ANALYSIS OF AUGUST 16, 2018 SUPREME COURT OPINION

(Posted August 16, 2018) Trouble in God’s house. That’s the setting for today’s ruling in Pure Presbyterian Church of Washington v. Grace of God Presbyterian Church, which comes to Richmond from the Fairfax Circuit Court. The issue underlying the trial was whether two churches had validly merged into one successor church. But today’s appeal turns on the issue of subject-matter jurisdiction.

Pure Presbyterian was a small congregation in Fairfax that had what looks like a terrific facility. It also had a lot of bills. Late in 2015, the church filed a bankruptcy petition. When word of that got out, another church – Grace of God Presbyterian – approached one of Pure’s elders and asked if Grace could buy Pure’s church property. Alternatively, “we could always merge …”

Not wanting to abandon its mission, Pure decided to explore merger instead. In February 2016, each congregation voted on a formal merger proposal, and each voted yes.

Denominational leaders determined that the two had no doctrinal conflicts, so the merger process began. In March, the two congregations met for a joint Easter service. Grace listed and promptly sold its former site in Falls Church, and assumed liability for Pure’s debts. Leaders of the two congregations drafted a merger agreement that settled who would preach, which elders would govern, and so forth. Pure submitted a reorganization plan to bankruptcy court based on this arrangement; the court approved the plan in September.

That seemed to settle matters once and for all. Except it didn’t. Justice McCullough explains:

On November 6, 2016, leaders of the unified church received an email stating that Pure Presbyterian wished to withdraw from the “proposed” merger. This announcement came as a surprise to the leaders originally from Grace Presbyterian. At that point, Grace Presbyterian had sold its building and the two congregations had been worshipping together for almost seven months. On December 5, 2016, the pastor and a deacon discovered that they were locked out of the church building. A notice was posted on the door, which stated, in part: “Please do not trespass. Property of Pure Presbyterian Church Members Only! Violators will be prosecuted.” In addition, Pure Presbyterian attempted to sell the property to a third party.

Grace understandably reacted by filing suit, seeking a declaration that the merger agreement was valid and an injunction to allow it into the building. Pure replied that it had never agreed to merge; just to a trial period to see if everyone could get along. The case proceeded to a jury trial. The jury found that the merger agreement was valid, and the court entered judgment accordingly.

On appeal, Pure argued for the first time that this was an internal church matter, and that Virginia’s courts thus had no jurisdiction to adjudicate the matter. In most instances, the failure to raise an issue in the trial court is fatal to an appeal on that ground, but subject-matter jurisdiction is a well-established exception to that rule. The Supreme Court thus goes ahead and analyzes the argument before concluding that the courts can indeed adjudicate this issue.

Mr. Jefferson’s “wall of separation between church and state” does bar our courts from deciding ecclesiastical or theological questions. But this isn’t an issue of church doctrine; this is plain-vanilla contract law. Both the SCV and SCOTUS have ruled that the courts can rule on matters like this. “[A]s long as courts avoid religious questions, church property disputes can be resolved just like other property disputes within a voluntary association.” Justice McCullough’s opinion also notes that if courts didn’t have subject matter jurisdiction over pure church-contract issues, that would make churches second-class citizens when it comes to property and contract rights.

The Supreme Court goes on to hold that the trial court had jurisdiction to award declaratory relief, and that the bankruptcy court’s approval of the reorganization plan meant that the circuit court was free to entertain the subsequent lawsuit here.