New Mexico Court: Child Abuse Reporting Laws Did Not Apply to Pastor’s Testimony

The defendant in this case was protected by both the clergy-penitent privilege and state statute.

Key point 3-08.08 . Clergy who are mandatory reporters of child abuse are excused from a duty to report in many states if they learn of the abuse in the course of a conversation covered by the clergy-penitent privilege. Some state child abuse reporting laws do not contain this exception.

Key point 4-08. Every state has a child abuse reporting law that requires persons designated as mandatory reporters to report known or reasonably suspected incidents of child abuse. Ministers are mandatory reporters in many states. Some states exempt ministers from reporting child abuse if they learned of the abuse in the course of a conversation protected by the clergy-penitent privilege. Ministers may face criminal and civil liability for failing to report child abuse.

A New Mexico court ruled that the designation of clergy as mandatory reporters under state child abuse reporting laws does not serve as a basis for admitting into evidence communications clearly protected by the clergy-penitent privilege.

The trial court said the pastor’s testimony was admissible

An adult male (the “defendant”) was charged with the sexual abuse of a child under 13 years of age. He was found guilty and appealed his conviction on the ground that his pastor was allowed to testify at trial about a confession he had made to him.

The defendant claimed that his pastor’s testimony was barred by the clergy-penitent privilege—a privilege that generally prohibits ministers from testifying in court regarding statements shared with them in confidence in the course of spiritual counseling.

The trial court ruled that even if the defendant’s statements to the pastor were privileged, they were admissible in court because of the state’s child abuse reporting law, which requires “a member of the clergy . . . who knows or has a reasonable suspicion that a child is an abused or a neglected child” to “report the matter immediately only if the information is not privileged as a matter of law.”

Appeals court: The trial court erred

A state appeals court concluded that the defendant’s statements to his pastor fell within the scope of the clergy communication privilege and thus were not admissible at trial.

The appeals court stated:

It was obvious error for the [trial court] to rule that New Mexico’s child abuse reporting statute . . . allowed the [trial court] to admit Defendant’s statements into evidence. . . . Insofar as the pastor’s knowledge or suspicion that [the] Victim had been abused was based on information that was privileged, the plain language of the statute exempted the matter from disclosure.

What this means for churches

Clergy are mandatory reporters of child abuse in most states. Several state child abuse reporting laws provide that clergy, even if mandatory reporters, are not required to report evidence of child abuse obtained in the course of conversations protected by the clergy-penitent privilege.

And, according to this court, the designation of clergy as mandatory reporters does not serve as a basis for admitting into evidence communications between clergy and their counselees clearly protected by the clergy-penitent privilege.

State v. Pritchett, 2021 WL 3674571 (N.M. App. 2021).

Courts and Non-Minister Employee Disputes

Church Law and Tax Report Courts and non-minister employee disputes Key point 8-10.2. Some courts

Church Law and Tax Report

Courts and non-minister employee disputes

Key point 8-10.2. Some courts have not recognized the ministerial exception, usually because the complainant was not a minister in either status or function, or was employed by a secular organization.

Key point 9-07. The First Amendment allows civil courts to resolve internal church disputes so long as they can do so without interpreting doctrine or polity.

A New Mexico court ruled that the First Amendment did not prevent it from resolving a claim of wrongful termination by a teacher at a church-operated elementary school. An adult female (the “plaintiff”) was employed as a teacher by a church-operated elementary school from 2009 to 2011. She alleged that she was sexually harassed by her supervisor in the summer of 2010. She reported her complaint to church officials, who issued a written reprimand to the supervisor. She claimed that her supervisor later retaliated against her, which ultimately led to the termination of her employment. She further claimed that the school and church breached her employment “contract” by terminating her despite assurances that she would be employed for the following school term. The plaintiff filed a lawsuit, claiming that the school was liable on the basis of breach of contract; and that the supervisor and other school officials were liable on the basis of retaliatory discharge, violation of the state Human Rights Act, intentional interference with contract, and defamation. The plaintiff sought compensatory and punitive damages, interest, attorney fees, and costs.

The defendants asked the court to dismiss all claims on the ground that they were barred by the so-called “church autonomy doctrine” which generally bars the civil courts from intruding into matters of church governance and administration. A trial court agreed with the defendants, and dismissed all claims. The plaintiff appealed, claiming that the church autonomy doctrine does not prohibit breach of contract claims and does not apply to individuals sued in their individual capacity as opposed to churches.

The court began its opinion by noting:

The church autonomy doctrine prohibits civil court review of internal church disputes involving matters of faith, doctrine, church governance, and polity. The doctrine is based on the First Amendment, which states in pertinent part that “Congress shall make no law respecting an establishment of religion, or prohibiting the free exercise thereof.” The church autonomy doctrine protects both interests embodied in the First Amendment. First, it prevents civil legal entanglement between government and religious establishments by prohibiting courts from trying to resolve disputes related to ecclesiastical operations. Second, it protects the free exercise of religion by limiting the possibility of civil interference in the workings of religious institutions.

But the court cautioned that the immunity provided by the church autonomy doctrine is not absolute. It does not apply “to purely secular decisions, even when made by churches.” Before a court concludes that the church autonomy doctrin e is implicated:

It first must analyze each element of every claim and determine whether adjudication would require the court to choose between competing religious visions, or cause interference with a church’s administrative prerogatives. The court must next examine the remedies sought by the plaintiff and decide whether enforcement of a judgment would require excessive procedural or substantive interference with church operations. If the answer to either of those inquiries is in the affirmative, then the dispute is truly of a religious nature and the claim is barred from secular court review. If, however, the dispute can be resolved by the application of purely neutral principles of law and without impermissible government intrusion there is no First Amendment shield to litigation.

breach of contract

The plaintiff claimed that the school and church breached her employment contract by dismissing her, despite prior assurances that her contract would be renewed for the following term. The court concluded that a resolution of this claim, against the church and school, would not require the court to interfere with church governance or internal administration:

In her complaint, plaintiff alleges that the church made express and implied promises to her concerning her employment, which she reasonably relied upon in accepting employment. She alleges that the church breached its promises to her, among them the failure to timely notify her of non-renewal and the failure to timely terminate her teaching contract year with just cause. As pled, it appears that she can succeed on her breach of contract claim without any religious intrusion. The trial court does not need to determine whether the church had cause to terminate plaintiff’s employment, but only whether it complied with its contractual obligation with respect to the timeliness of the notice it provided to her.

The second step in the court’s two-step analysis required it to examine the remedy being sought: “In terms of remedy, plaintiff does not seek reinstatement of her teaching position, but seeks only monetary damages. Defendants do not contend that entering a money judgment against the church would require excessive interference with church operations. Thus … plaintiff’s breach of contract claim does not appear to be religious in nature and thus does not implicate First Amendment concerns as a matter of law.”

The court cautioned that “if, at some later stage in the proceedings, it becomes apparent that plaintiff’s breach of contract claim in fact turns on matters of doctrinal interpretation or church governance, then summary judgment in favor of the church may be proper.”

claims against individual defendants

The plaintiff raised a novel argument, claiming that the church autonomy doctrine did not apply to her claims against the individual defendants. Rather, she insisted, it only applies to lawsuits against churches and church schools. The court agreed:

The immunity afforded by the church autonomy doctrine is not triggered simply by the subject matter of the complaint. Instead, the church autonomy doctrine applies only if judicial resolution of the claims would violate the First Amendment. This is a fact-specific and claim-specific inquiry, an inquiry that the district court did not engage in here. We are not persuaded that the resolution of plaintiff’s claims against [her supervisor and church officials] will necessarily result in religious entanglement. We thus conclude that the trial court erred in dismissing them as a matter of law.

The court again conceded that “if it appears at a later stage of this case that plaintiff’s claims against [the individual defendants] cannot be resolved without religious entanglement, then those claims may properly be dismissed.”

What This Means For Churches:

This case is instructive for a couple of reasons. First, it demonstrates that employers may violate state and federal employment discrimination laws by “retaliating” against employees because they complained about discrimination on the job. Church leaders should never terminate, demote, or take any other action against an employee that may be perceived as “retaliation” for making a claim of unlawful discrimination without first consulting with legal counsel.

Second, the court concluded that the church autonomy doctrine does not insulate the “secular decisions” of churches and church schools from legal scrutiny. However, the court made clear that if any time while a lawsuit is pending it becomes clear that any resolution of the lawsuit would implicate a court in matters of faith or doctrine, then the case must be dismissed.

Third, the court reached the novel conclusion that the church autonomy doctrine does not necessarily apply to individuals, even if employed by a church. 331 P.3d 997 (N.M. App. 2014).

Defamation and Proof of Injury to Reputation

Injury to reputation is not always presumed in cases of false accusations.

Church Law and Tax

Defamation and Proof of Injury to Reputation

Injury to reputation is not always presumed in cases of false accusations.

Key point 4-02. Defamation consists of (1) oral or written statements about another person; (2) that are false; (3) that are “published” (that is, communicated to other persons); and (4) that injure the other person’s reputation.

Key point 4-02.02. Ministers are considered “public figures” and as a result they cannot be defamed unless the person making an otherwise defamatory remark did so with malice. In this context, malice means that the person making the defamatory remark either had actual knowledge that it was false or made it with a reckless disregard as to its truth or falsity.

The New Mexico Supreme Court ruled that defamation requires proof of actual injury to reputation, and that injury to reputation will not be presumed even in cases of false accusations of pedophilia, and as a result a pastor who was falsely accused of pedophilia could not sue the perpetrators for defamation without proof of actual damage to his reputation. A church board member compiled a packet of documents for presentation to a denominational agency (the “regional church”) pertaining to misconduct by the pastor. The packet included documentation related to financial problems at the church, an alleged lack of leadership shown by the pastor, and personal attacks against the pastor. One of the documents was an anonymous letter accusing the pastor of several acts of pedophilia. After the presentation of this information to the regional church, and at its recommendation, the pastor disclosed a summary of the allegations to the congregation during a Sunday service.

At some point after the pastor’s disclosure to the congregation, one or more board members offered to make copies of the packet for inquiring parishioners. The pastor later sued the board members who disclosed the full contents of the packets (the “defendants”), claiming that their actions amounted to defamation.

The defendants asked the court to dismiss the lawsuit on the ground that the pastor failed to establish a cause of action for defamation because he was unable to demonstrate that he had suffered any actual injury to his reputation as a result of the distribution of the material. The pastor insisted that falsely accusing a religious leader of pedophilia is always defamatory and that personal humiliation and mental anguish qualified as the necessary injury.

The trial court dismissed the case, finding that the pastor was unable to demonstrate actual injury to his reputation because he was never suspended from his position, nor did he suffer any “adverse employment consequences” or other related losses from distribution of the anonymous letter. It rejected the pastor’s argument that evidence of mental anguish and humiliation is sufficient to establish actual injury for liability purposes.

The state supreme court ruled that to prevail in a defamation lawsuit a plaintiff must prove actual injury to reputation, and it stressed that injury to reputation could not be “presumed” even in cases involving unfounded accusations of pedophilia.

The court concluded, “It is undoubtedly the case that a system that restricts recovery to actual loss will be imperfect, but so is any system that attempts to compensate human injury with money …. The interest served by allowing recovery for defamation, however, is the interest of compensating individuals for injury to reputation. Recovery for a mere tendency to injure reputation, or only upon a showing of mental anguish, is not only too speculative where the tort action for defamation has existed to redress injury to the plaintiff’s reputation.”

The court added the following observation regarding proof of actual injury to reputation:

A showing of actual injury to reputation is not so high a barrier to surmount that it limits recovery only to monetary loss and employment termination, however. Injury to reputation may manifest itself in any number of ways. Events indicating an injury to reputation in the present case might include a decline in [church] membership, an unwillingness for parishioners to allow children to participate in parish-related activities, or a decline in general social invitations from fellow parishioners—assuming such evidence could be proved and linked to the defamatory communication. There is no indication that plaintiff came forward with evidence of any kind to support an argument that his reputation was actually injured by the publication of the anonymous letter.

What This Means For Churches:
While many courts in other states have rejected presumed injury in defamation cases, this view is not unanimous. Other courts have been willing to accept the concept of presumed injury to reputation in egregious cases. Smith v. Durden, 276 P.3d 943 (N.M. 2012).

This article first appeared in Church Law & Tax Report, March/April 2013.

Age and Disability Discrimination

Most courts have concluded that they are barred by the First Amendment from resolving challenges by dismissed clergy to the legal validity of their dismissals.

Church Law & Tax Report

Age and Disability Discrimination

Most courts have concluded that they are barred by the First Amendment from resolving challenges by dismissed clergy to the legal validity of their dismissals.

Key point 2-04.1. Most courts have concluded that they are barred by the First Amendment guarantees of religious freedom and non-establishment of religion from resolving challenges by dismissed clergy to the legal validity of their dismissals.

* A New Mexico court ruled that it was barred by the First Amendment guaranty of religious freedom from resolving a rabbi’s claim that a synagogue unlawfully dismissed him on the basis of his age and Parkinson’s disease. A Jewish synagogue hired a rabbi (David) for a term of thirty years. During the term of his employment David developed Parkinson’s disease and his symptoms became progressively more apparent. His wife was diagnosed with breast cancer, and some of the synagogue’s board members came to believe that her condition distracted David from his rabbinical duties. David claimed that the synagogue had engaged in an “ouster campaign” against him that involved both a willful failure to pay him the compensation called for by his employment contract, and an attempt to get him to release the synagogue from the thirty-year contract through a campaign of “false promises, harassment, ridicule, and intimidation, including publishing one-sided and negative information about him to congregation members and other members of the public in an effort to ensure that in the event he did not resign, the synagogue would have the congregation members’ votes to terminate his employment.” This negative information included statements accusing David of a poor work ethic, having no concern for congregation members, and performing poorly as a rabbi by failing to return telephone calls, failing to work adequate hours, and failing to make hospital visits.

David asserted that the synagogue’s motivation for conducting this campaign was due to his Parkinson’s disease, his age, his wife’s medical condition and his complaints about the synagogue’s failure to compensate him in accordance with his contract. He sued the synagogue and several board members on the basis of several grounds, including unlawful age and disability discrimination and a breach of various fiduciary duties. The trial court dismissed David’s lawsuit on the basis of the First Amendment guaranty of religious freedom. David appealed.

A state appeals court affirmed the trial court’s dismissal of the lawsuit. It relied on the “church autonomy doctrine,” which “prevents civil legal entanglement between government and religious establishments by prohibiting courts from trying to resolve disputes related to ecclesiastical operations.” The basis for this doctrine is a decision by the United States Supreme Court. In an 1871 case, the Court observed: “The rule of action which should govern the civil courts Â… is, that, whenever the questions of discipline, or of faith, or ecclesiastical rule, custom, or law have been decided by the highest of these church judicatories to which the matter has been carried, the legal tribunals must accept such decisions as final, and as binding on them, in their application to the case before them.” Watson v. Jones, 80 U.S.(13 Wall.) 679 (1871).

The New Mexico court concluded that the dispute in the present case was “precisely the type of religious debate that the church autonomy doctrine is intended to protect from judicial review.” The court was sympathetic to David’s claim that his struggles with Parkinson’s disease played a role in his termination, but was “not persuaded that this circumstance justifies judicial intervention into how [a synagogue] treats and selects its ecclesiastical leaders.”

The court quoted with approval from a federal appeals court decision: “The relationship between an organized church and its ministers is its lifeblood. The minister is the chief instrument by which the church seeks to fulfill its purpose. Matters touching this relationship must necessarily be recognized as of prime ecclesiastical concern. Just as the initial function of selecting a minister is a matter of church administration and government, so are the functions which accompany such a selection.” McClure v. Salvation Army, 460 F.2d 553 (5th Cir.1972).

Application. This case illustrates once again the reluctance of the civil courts to interfere with employment decisions between religious organizations and clergy. The court in this case was not persuaded that a rabbi’s claims of disability and age discrimination were sufficient to justify its intervention. Celnik v. Congregation B’Nai Israel, 131 P.3d 102 (N.M. 2006).

Embezzlement of Church Funds

Court rejects treasurer’s excuses.

State v. Foubion, 964 P.2d 834 (N.M. App. 1998)

Background. Some church treasurers have been charged with embezzlement for misappropriating church funds. In many cases, they insist that they are innocent, and claim that they had no intent to steal anything. But despite such protests they may be convicted of embezzlement in a criminal prosecution, as one church treasurer discovered.

Facts of the case. In 1994 a husband (John) and wife (Mary) became members of a local church. Soon after they arrived, John was selected to be the church music director, which was an unpaid position. Mary was selected to be the church's piano player, for which she was paid $30 per week. A year later Mary was elected church treasurer, which was an unpaid position. As treasurer, Mary's duties were to keep the church's books, deposit money into the bank account, pay the bills, and prepare financial statements for the monthly business meetings.

In 1996 the couple moved to another state. Soon after they moved, the church's pastor was surprised to discover that the water bill had not been paid and the water to the church had been shut off. The pastor and the new church treasurer searched but could not find the church's checkbook. John and Mary had kept the church's checkbook when they moved.

The new treasurer obtained checks and copies of the church's bank statements from the bank. Upon examining the statements, discrepancies were discovered between the actual balance and the balance presented to the church in the monthly financial statements provided by Mary. For example, the December 1995 financial statement showed a balance of $4,134.12, while the bank statement showed a balance of $608.12. The January 1996 financial statement showed a balance of $1,796.52, while the bank statement showed a balance of $399.07.

The discrepancy was due to the fact that Mary wrote eight checks to herself and to her husband for approximately $3,600.00. She wrote five checks in December 1995 in the amounts of $750.00, $1,528.87, $400.00, $200.00, and $150.00, and she wrote three checks in January 1996 in the amounts of $150.00, $300.00, and $200.00. Mary recorded none of these checks in the church's financial records and only one of the checks contained an explanation in the memo line.

The pastor called John and Mary to confront them about the missing money. He spoke with Mary who told him that he would have to speak with John. When John returned the pastor's phone call, he told the pastor that the money had been placed in "certificates of deposit" for the church. When John and Mary were questioned over the phone by a detective, they repeated the same story. In fact, they never purchased any certificates of deposit for the church.

Later, when the police questioned John and Mary, they admitted that there were no certificates of deposit and claimed that the money taken from the church was for past services rendered. They alleged that the church was supposed to pay John $50 per week for his work as the music director. They stated that a former pastor of the church had agreed to this. However, there was no record of such a decision.

John and Mary were charged with criminal embezzlement. At their trial, there was testimony that the church had never taken any action to make either the music director or the church treasurer a paid position. In addition, the church's budget did not reflect any compensation for the music director position. Mary admitted that she knowingly falsified the monthly financial statement prepared for the church to cover up what she had done. John and Mary were convicted on seven of the eight counts of embezzlement. They appealed their convictions, claiming that they could not be guilty of embezzlement since they lacked "criminal intent."

The appeals court's decision. A state appeals court affirmed the couple's convictions. It agreed that to support a conviction for embezzlement there must be proof that the couple embezzled the money with the fraudulent intent to deprive the church of that money. However, the court did not agree with the couple that there was insufficient evidence of such an intent. It observed:

Although they argue that they did not intend to deprive the church of its money, we believe it was reasonable for a jury to determine from the evidence that there was evidence to the contrary. [They] also admitted that they submitted false financial statements to the church, took the church's checkbook with them [when they moved], and lied to both the pastor and the police about what they had done with the money. These lies and misleading actions evidence their consciousness of guilt. From [their] actions, the jury could reasonably conclude that they had the requisite criminal intent to embezzle money from the church. Therefore, we find that there is sufficient evidence in the record to support the convictions.

What this means for churches

Many pastors, church treasurers, and other staff members have written checks to themselves using the church checkbook, for what they consider to be legitimate reasons. As this case illustrates, they may believe that the church "owes" them something for services rendered but not fully compensated. In some cases, they believe they are "borrowing" church funds for an urgent financial need, and intend to pay the church back when they are able. In either case, the "innocent" intention does not prevent the person from being convicted of embezzlement.

Church staff members must avoid taking church funds, without clear authorization, no matter how "innocent" their intentions. In most of these cases, church staff members are forced to engage in acts that "conceal" their theft from others. It is these very acts that often are used to prove criminal intent despite a staff member's claim of innocence.

Injuries Occurring Under the Supervision of Volunteers

A recent case is important for a number of reasons.

Church Law and Tax 1994-11-01 Recent Developments

Personal Injuries – On Church Property or During Church Activities

Key point: Volunteer youth workers must act with reasonable care in the supervision of children. However, this does not mean that they are responsible for every injury that occurs to a child. If a child is injured as a result of disobedience to a worker’s clear instructions, the worker may not be responsible for injuries that result.

In a case that will be relevant to every volunteer youth worker, a New Mexico court concluded that a Little League coach was not responsible for the death of a teenage boy who fell from the back of a truck while being transported to a baseball field. A Little League baseball team assembled for practice at a baseball field and was informed by park officials to use another field a short distance away. In order to travel to the second field the team had to ride in two vehicles. One vehicle was owned by the coach, but it was not big enough for all the boys. One of the older players had a truck with a camper on the back, and he volunteered to take the boys who could not fit in the coach’s vehicle. Three boys asked the coach if they could ride on the back bumper of the truck but the coach refused and instructed them to crawl inside the camper. As the coach was driving away he noticed that the three boys were standing beside the truck with the camper door open. Assuming that his instructions were being followed, he drove to the other field about a half of a mile away on a dirt road without traffic. When the coach drove away the boys closed the camper door and stood on top of the truck’s back bumper. There was nothing on the back of the truck or camper shell for the boys to grab firmly. The truck proceeded to the other field. Along the way, two of the boys fell off the bumper. One was killed and the other seriously injured. The parents of the deceased boy sued the coach and the Little League, arguing that they had negligently supervised the boys and that their negligence was the cause of their son’s death. A trial court dismissed the lawsuit and the parents appealed. A state appeals court upheld the trial court’s dismissal of the lawsuit. It agreed with the trial court that the coach had not been negligent. And, since the coach had not been negligent the case against the Little League had to be dismissed as well. In finding that the coach was not negligent the court relied on the following factors (these will be helpful for church leaders to keep in mind in evaluating the risk to their own volunteers): (1) The coach had explicitly warned the boys not to ride on the truck’s back bumper. (2) The boys had never before disobeyed the coach or engaged in activities that would lead him to believe they would not obey him. (3) The coach waited until he saw one of the boys open the camper door before he drove away. (4) The coach had no reason to believe that the boy who drove the truck was an unsafe driver. (5) The vehicles had to travel only a half of a mile on a dirt road without traffic. (6) The court quoted with approval from a similar case: “The reasonableness of [the coach’s] conduct is especially clear in light of the social utility of said conduct—namely, the value of the services of volunteers in a youth sports program to the community in which they participate.” (7) The court referred to another case finding that a teacher was not responsible for injuries sustained by a student in a woodworking class. The court in the other case noted that it was impossible for a teacher to personally supervise each student under his care every moment of the school day, and concluded that “a teacher must necessarily rely, to some extent, on the responsibility and maturity of his students to conduct themselves in a proper and safe manner.” Similarly, the court referred to another case in which a court concluded that ordinary care on the part of a teacher does not require having each student constantly in sight, since such a standard would be impossible.

This case is important for a number of reasons. First, it illustrates the potential liability of volunteer leaders for injuries occurring to minors under their supervision. Second, it demonstrates that volunteer workers will not be responsible for every death or injury that occurs. If teenagers are injured because they violate a volunteer worker’s explicit instructions, and the volunteer has no reason to believe that the instructions will not be obeyed, this may be enough to refute a charge of negligence. Supporting this conclusion are court decisions recognizing that youth workers cannot possibly keep every child in sight at all times, that older children have some responsibility to conduct themselves in a safe manner, and, that the valuable community service provided by volunteer workers necessitates a clear showing of negligence. Marquez v. Gomez, 866 P.2d 354 (N.M. App. 1993).

See Also: Negligent Supervision

Legal Requirements for Church Child Care Centers

Court rules that state law requiring church-operated child care facilities to be licensed, and prohibiting spanking, do not violate a church’s constitutional rights.

Does a state law requiring church-operated child care facilities to be licensed, and prohibiting spanking, violate a church's constitutional rights?

No, said a New Mexico appeals court. A Baptist church operated a child care center pursuant to a state license for many years. The church has a policy, which it believes is mandated by the Bible, permitting teachers to spank children who misbehave. Ultimately, however, the church's pastor concluded that submitting the child care center to state licensure amounted to a subordination of the center to the secular state rather than to Jesus Christ.

Accordingly, the pastor refused to renew the center's license. The state filed suit against the church, seeking a court order prohibiting the church from any further operation of the center without a license. The church responded by arguing that application of the child care licensing law to the church's facility violated the first amendment's guaranty of religious freedom. A trial court disagreed with the church's position, and the church appealed.

A state appeals court also rejected the church's position and agreed with the state that the church could not operate its child care facility without a state license. The court relied on a 1990 decision of the United States Supreme Court (Employment Division v. Smith). Prior to 1990, the courts generally allowed interference with religious practices only if a "compelling state interest" could be shown. However, in Smith, the Supreme Court said that a compelling state interest is not required to justify the application of "neutral laws of general applicability" to religious organizations.

The New Mexico appeals court concluded that the state law requiring child care centers to be licensed was a neutral law of general applicability that could be applied to a church without any need to demonstrate a "compelling state interest." The same conclusion applied to the law's anti-spanking provision. The court refused to address the church's claim that its rights under the New Mexico Constitution were violated by the licensing requirement, since this argument had not made at trial and "was made so late in the appellate process." Health Services Division v. Temple Baptist Church, 814 P.2d 130 (N.M. App. 1991).


Church Law and Tax 1990-05-01 Recent Developments Bankruptcy Richard R. Hammar, J.D., LL.M., CPA •

Church Law and Tax 1990-05-01 Recent Developments


Can a bankruptcy court reject a debtor’s bankruptcy petition on the ground that it calls for monthly contributions of $100 to the debtor’s church? Yes, concluded a bankruptcy court in New Mexico. The debtor filed a “Chapter 13” (wage-earner’s) bankruptcy petition that listed $22,000 in debts. The plan called for only 2% of unsecured debts to be satisfied over the next four years. The largest unsecured creditor (a local bank) objected to the petition on the ground that the plan did not provide for the payment of all of the debtor’s disposable income to the bankruptcy trustee. Among other things, the bank pointed out that the debtor’s plan called for monthly contributions of $100 to the debtor’s church. The court noted that the right of a bankruptcy debtor to make charitable contributions has been addressed in several decisions. Nearly all courts have concluded that debtors can make no contributions whatever, or very minimal ones (i.e., $1.50 per week in one case). The court agreed with these prior rulings. It observed: “By allowing a debtor to deduct contributions to any organization, the court necessarily is forcing the debtor’s creditors to contribute to the debtor’s church or favorite charity. Congress could have intended no such result.” Accordingly, the court rejected the debtor’s bankruptcy petition. In re Tucker, 102 B.R. 219 (D.N.M. 1989).

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