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Inspection

§ 6.03.01
Key point 6-03.01. Church members generally have no right to inspect church records unless such a right is conferred by state nonprofit corporation law, a church's charter or bylaws, state securities law (if the church has issued securities), or a subpoena. Church records enjoy no privilege against disclosure, with the exception of documents that are protected by the clergy-penitent privilege under state law.

Can church members inspect church records? If so, which records can be inspected and under what circumstances? What about nonmembers? Generally, there is no inherent right to inspect church records. Such a right must be granted in some legal document such as a church's bylaws or state nonprofit corporation law. Some of the possible justifications for a right of inspection are reviewed in this section.

1. NONPROFIT CORPORATION LAW

Section 25 of the Model Nonprofit Corporation Act, previously quoted, gives members of an incorporated church the right to inspect corporate records for any proper purpose at any reasonable time. The Revised Model Nonprofit Corporation Act gives members broad authority to inspect corporate records, but specifies that "the articles or bylaws of a religious corporation may limit or abolish the right of a member … to inspect and copy any corporate records."[93] REVISED MODEL BUSINESS CORPORATIONS ACT § 16.02. Some of the special provisions under the revised Act include: (1) ordinarily, a member must give the corporation written notice at least five business days before the date of inspection; (2) the right to inspect includes the right to make copies; (3) the corporation may charge a reasonable fee for the duplicating expenses; (4) for certain types of records, a member's request for inspection must be "in good faith and for a proper purpose," and the member must describe with "reasonable particularity the purpose of the records the member desires to inspect," and the records must be directly related to such purpose; and (5) a member's agent or attorney has the same inspection and copying rights as the member. In addition, the revised Act empowers the civil courts to order a corporation to grant a member's request for inspection.

Can a church incorporated under the Model Nonprofit Corporation Act refuse a member's request to inspect church records on the ground that such a right conflicts with the church's constitutional guaranty of religious freedom? The courts have reached conflicting answers to this question.

Case study. The Arkansas Supreme Court ruled that members of a church incorporated under the Model Nonprofit Corporation Act do not have a right to inspect church records if doing so would "impinge upon the doctrine of the church." When church elders rejected members' requests to inspect church records, the members incorporated the church under a state nonprofit corporation law making the "books and records" of a corporation subject to inspection "by any member for any proper purpose at any reasonable time." When church elders continued to reject the members' request for inspection, the members asked a state court to recognize their legal right to inspection under state law. The elders countered by arguing that application of state corporation law would impermissibly interfere with the religious doctrine and practice of the church, contrary to the constitutional guaranty of religious freedom. Specifically, the elders argued that according to the church's "established doctrine," the New Testament "places within the hands of a select group of elders the sole responsibility for overseeing the affairs of the church," and that this authority is "evidenced by biblical admonitions to the flock to obey and submit to them that have rule over the flock." The state supreme court agreed that "application of our state corporation law would almost certainly impinge upon the doctrine of the church" as described by the elders, and accordingly would violate the constitutional guaranty of religious freedom. The court concluded that if the application of a state law would conflict with the "doctrine, polity, or practice" of a church, then the law cannot be applied to the church without a showing of a "compelling state interest." No such showing was made in this case, the court concluded, and therefore the state law giving members of nonprofit corporations the legal right to inspect corporate records could not be applied to the church.[94] Gipson v. Brown, 749 S.W.2d 297 (Ark. 1988). A "compelling state interest" no longer is required with respect to "neutral laws of general applicability," according to the United States Supreme Court's decision in Employment Division v. Smith, 494 U.S. 872 (1990).

Other courts have rejected the claim that the First Amendment insulates church records from inspection by members. To illustrate, members of one church sought a court order authorizing them to examine the church's financial records. The church was incorporated under the state's general nonprofit corporation law, which gave members the right to inspect corporate records at any reasonable time. The church and its pastor objected to the inspection on the ground that the First Amendment prohibits the courts from involving themselves in church affairs. The court disagreed with this contention, concluding that "First Amendment values are plainly not jeopardized by a civil court's enforcement of a voting member's right to examine these records."[95] Bourgeois v. Landrum, 396 So.2d 1275, 1277-78 (La. 1981).

It is doubtful that most courts would permit churches incorporated under the model Act to refuse members' requests to inspect church records on the basis of the First Amendment guaranty of religious freedom. The statutory right of inspection is a "neutral law of general applicability" that is presumably constitutional without the need for demonstrating a compelling state interest.[96] Employment Division v. Smith, 110 S. Ct. 1595 (1990). As a result, church leaders should not assume that the First Amendment permits them to deny inspection rights given to members under state corporation law.

A right of inspection, however, generally applies only to members. Persons who are not members of a church generally have no right to demand inspection of church records under nonprofit corporation law.

Case studies
  • The Alabama Supreme Court ruled that a dismissed church member no longer had a legal right to inspect church records.[97] Lott v. Eastern Shore Christian Center, 908 So.2d 922 (Ala. 2005). Accord Ex parte Board of Trustees, 2007 WL 1519867 (Ala. 2007).
  • A Colorado court ruled that a church member's legal authority to inspect church records pursuant to state nonprofit corporation law ended when his membership was revoked by the church board.[98] Levitt v. Calvary Temple, 2001 WL 423040 (Colo. App. 2001).
  • A Louisiana court ruled that an incorporated church had to allow members to inspect church records. Four members asked for permission to inspect the following records of their church: (1) bank statements; (2) the check register and cancelled checks for all the church's bank accounts; (3) the cash receipts journal; and (4) monthly financial reports. The pastor denied the members' request. The members then sought a court order compelling the church to permit them to inspect the records. The pastor insisted that such an order would interfere with "internal church governance" in violation of the First Amendment. A state appeals court ruled that allowing the members to inspect records, pursuant to state nonprofit corporation law, would not violate the First Amendment. The court quoted from an earlier Louisiana Supreme Court ruling: "A voting member of a nonprofit corporation has a right to examine the records of the corporation without stating reasons for his inspection. Since the judicial enforcement of this right does not entangle civil courts in questions of religious doctrine, polity, or practice, the First Amendment does not bar a suit to implement the statutory right. First Amendment values are plainly not jeopardized by a civil court's enforcement of a voting member's right to examine these records. No dispute arising in the course of this litigation requires the court to resolve an underlying controversy over religious doctrine."[99] Jefferson v. Franklin, 692 So.2d 602 (La. App. 1997). The court quoted from the Louisiana Supreme Court's decision in Burgeois v. Landrum, 396 So.2d 1275 (La. 1981), referred to in the text.
  • A New York court ruled that a church member had the legal authority to inspect church records despite the pastor's refusal to allow him to do so. The court acknowledged that only members had a legal right to inspect records, but it concluded that the member had not lost his status as a member of the church. It concluded: "The member is simply trying to enforce his secular rights as a member, using the church's own criteria of membership and the pastor's own admission that he has not been expelled as a member. Nor are the church's First Amendment rights violated by the inspection of the records, as the questions involved here are not concerned with internal ecclesiastical or religious issues, but purely secular ones."[100] Watson v. The Manhattan Holy Bible Tabernacle, 732 N.Y.S.2d 405 (2001). Accord Smith v. Calvary Baptist Church, (N.Y.A.D. 2006); Tae Hwa Yoon v. New York Hahn Wolee Church, Inc. 870 N.Y.S.2d 42 (N.Y.A.D. 2008).
  • A Tennessee court ruled that church members were not legally entitled to inspect certain records of their church on the basis of a provision in the state nonprofit corporation law giving members a right of inspection, since they lacked a "proper purpose" for their request.
  • The Texas Supreme Court ruled that a state nonprofit corporation law that granted a limited right to inspect corporate records did not mandate the disclosure of donor records.[101] In re Bacala, 982 S.W.2d 371 (Tex. 1998). The Texas Nonprofit Corporation Act specifies that nonprofit corporation "shall maintain current true and accurate financial records with full and correct entries made with respect to all financial transactions of the corporation." It further specifies that "all records, books, and annual reports of the financial activity of the corporation shall be kept at the registered office or principal office of the corporation … and shall be available to the public for inspection and copying there during normal business hours." Based on these provisions, a group of persons demanded that a charity turn over documents revealing the identities of all donors and the amounts of donors' annual contributions. The charity resisted this request, claiming that the inspection right provided under the nonprofit corporation law did not refer to inspection or disclosure of donor lists, and that even if it did, such a provision would violate the First Amendment freedom of association. The state supreme court ruled that the right of inspection did not extend to donor lists. It noted that "the statute does not expressly require that contributors' identities be made available to the public." And, it found that the intent of the legislature in enacting the inspection right "was not to force nonprofit corporations to identify the exact sources of their income; rather, it was to expose the nature of the expenditures of that money once received from the public and to make nonprofit organizations accountable to their contributors for those expenditures." As a result, the statute "can be upheld as constitutional when interpreted as not requiring disclosure of contributors' names."
  • A Texas court ruled that persons who have been dismissed from membership in a church no longer have a right under the state nonprofit corporation law to inspect church records.[102] Two Rivers Baptist Church v. Sutton, 2010 WL 2025444 (Tenn. App. 2010).
TIP. The Privacy Act and Freedom of Information Act have no application to religious organizations. They do not provide church members with any legal basis for inspecting church records.

INSPECTION OF CHURCH RECORDS

Do church members have a legal right to inspect church records as a result of state nonprofit corporation law? Consider the following:

  • Most state nonprofit corporation laws give members a limited right to inspect corporate records.
  • The right of inspection is not absolute. It only exists if a church is incorporated under a state nonprofit corporation law that gives members such a right.
  • The right of inspection only extends to members.
  • The right of inspection only extends to those records specified in the statute creating the right.
  • Most such laws provide that the member may inspect documents "for a proper purpose" at a "reasonable time."
  • Some courts have ruled that the right of inspection is limited by considerations of privacy, privilege and confidentiality. That is, some documents may be protected from disclosure by legitimate considerations of privacy (such as an employee's health records); privilege (such as communications protected by the clergy-penitent privilege); or confidentiality (such as reference letters submitted by persons who were given an assurance of confidentiality).[103] See, e.g., Lewis v. Pennsylvania Bar Association, 701 A.2d 551 (Pa. 1997).

2. CHURCH CHARTER OR BYLAWS

A right of inspection may be given by the bylaws or charter of a church corporation or association.

3. STATE SECURITIES LAW

Churches that raise funds by issuing securities (i.e., bonds or promissory notes) may be required by state securities laws to allow investors—whether members or not—to inspect the financial statements of the church.

4. SUBPOENA

Members and nonmembers alike may compel the production (i.e., disclosure) or inspection of church records as part of a lawsuit against a church if the materials to be produced or inspected are relevant and not privileged. For example, Rule 34 of the Federal Rules of Civil Procedure, adopted by several states and used in all federal courts, specifies that any party to a lawsuit

may serve on any other party a request (1) to produce and permit the party making the request, or someone acting on his behalf, to inspect and copy, any designated documents … which are in the possession, custody or control of the party upon whom the request is served; or (2) to permit entry upon designated land or other property in the possession or control of the party upon whom the request is served for the purpose of inspection. …

Similarly, Rule 45(b) of the Federal Rules of Civil Procedure states that a subpoena may command the person to whom it is directed "to produce the books, papers, documents, or tangible things designated therein. …" Rule 45 also stipulates that a subpoena may be quashed or modified if it is "unreasonable and oppressive." Federal, state, and local government agencies are also invested with extensive investigative powers, including the right to subpoena and inspect documents. However, this authority generally may not extend to privileged or irrelevant matters.

Since church records are not inherently privileged, they are not immune from production or inspection. Although most states consider confidential communications to be privileged when they are made to clergy acting in their professional capacity as a spiritual adviser, several courts have held that the privilege does not apply to church records.

Case studies
In upholding an IRS subpoena of the records of a religious corporation over its objection that its records were privileged, a federal court observed that the "contention of violation of a penitent-clergyman privilege is without merit. A clergyman must be a natural person."[104] United States v. Luther, 481 F.2d 429, 432 (9th Cir. 1973) (the court did state that its holding would not prevent "a later determination at a time when the issue is properly raised and supported by a proper showing"). See also Abrams v. Temple of the Lost Sheep, Inc., 562 N.Y.S.2d 322 (Sup. Ct. 1990); Abrams v. New York Foundation for the Homeless, Inc., 562 N.Y.S.2d 325 (Sup. Ct. 1990).
The Ohio Supreme Court, in upholding the admissibility of a church membership registration card over an objection that it was privileged, noted that "this information by any flight of the judicial imagination cannot conceivably be considered as a confession made to [a clergyman] in his professional character in the course of discipline … and, of course, is not privileged."[105] In re Estate of Soeder, 220 N.E.2d 547, 572 (Ohio 1966).
The Pennsylvania Supreme Court ruled that the clergy-penitent privilege did not excuse a Roman Catholic diocese from turning over internal documents pertaining to a priest in response to a subpoena. An individual (the "defendant") was charged with the murder of a Roman Catholic priest. The defendant admitted that he shot the priest, but he insisted that he did so in self-defense. In attempting to prove that he acted in self-defense, the defendant subpoenaed documents from the local Catholic Diocese. Specifically, the defendant requested the priest's personnel records and the Diocese's records concerning the priest's alleged alcohol and drug abuse and sexual misconduct. The defendant insisted that these documents could help prove that he acted in self-defense because of the priest's past violent conduct. The Diocese turned over some documents but refused to turn over any records kept in its "secret archives." It insisted that documents in its secret archives were protected from disclosure by the clergy-penitent privilege since they had been obtained in confidence by the bishop or other clergy in the course of their duties. The court disagreed, noting that there was no proof that the secret records reflected communications between members of the clergy in confidence and for confessional or spiritual purposes.[106] Commonwealth v. Stewart, 690 A.2d 195 (Pa. 1997).
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