Beardsley, Jensen and Von Wald
Who decides disputes regarding governance of religious corporations – the church or the courts?
It's the church in the circumstances presented to the South Dakota Supreme Court in Hutterville v. Waldner, 2010 SD 86.
Hutterville Hutterian Brethren, Inc. (Hutterville) is a nonprofit religious corporation organized under the laws of South Dakota. The purpose of the corporation is to promote the Hutterian religious faith and the Hutterian Church.
Hutterian Church members live in an agrarian, communal life based upon the Bible's New Testament. Hutterville operates a farming enterprise, which is also communal. All real and personal property is owned by the Hutterville Colony. All individual labor and services are for the sole benefit of the Colony and Hutterian Church.
The dispute at issue began in 1992 when there was a schism within the Canadian-United States Hutterian Church. Ninety-five of the 173 ministers of local colonies repudiated the leadership of Rev. Kleinsasser as Senior Elder. The Senior Elder is an important position because he acts as the final arbiter of issues affecting members of the Hutterian Church and the colonies. The colonies that repudiated Rev. Kleinsasser opted to follow Rev. Joseph Wipf.
Following the 1992 schism, most colonies adopted a new constitution and reaffirmed their faith in the Hutterian Church as led by Rev. Wipf. But, the minister of the Hutterville Colony remained loyal to Rev. Kleinsasser; Hutterville Colony was one of five South Dakota colonies that remained loyal to Rev. Kleinsasser.
Even though the Hutterville Colony followed Rev. Kleinsasser, followers of Rev. Wipf were permitted to live in the Hutterville Colony.
As you've surmised by now, this lawsuit arose out of the two factions – Rev. Kleinsasser v. Rev. Wipf – attempts to obtain control of the corporate governance of Hutterville.
The specifics of how the governance dispute unfolded are set out in the Court's opinion. A key circumstance was the purported excommunication of those who brought this lawsuit.
The South Dakota Supreme Court explained the issue of church membership – the validity of the excommunications - was central to resolving the dispute:
Thus, Church membership is a prerequisite for all three positions. A person cannot be a member, director, or officer of Hutterville unless that person is a member of the Hutterian Church. For that reason, to determine Appellants' corporate governance issue involving quorums of the voting members and the validity of calls of the meetings, the circuit court would have to determine the status of the Appellants' membership in the Church. To determine that membership issue, the circuit court would have to determine the validity of the Appellants' purported excommunications. And that necessarily leads to the religious questions of what is the true Hutterian Church at Hutterville Colony and who are its true leaders?
The Supreme Court explained:
To determine voting membership in Hutterville, the circuit court would have to determine the ‘true' Church and elders at Hutterville Colony in order to decide the validity of the excommunications. This would ensnare the circuit court in determining whether Rev. Kleinsasser or Rev. Wipf was the ‘presiding' leader of the Hutterian Church at Hutterville Colony and whether Appellants failed to abide by that leader's authority. But, as the Supreme Court noted in Milivojevich, civil courts have no subject matter jurisdiction when it comes to such matters as ‘theological controversy, church discipline, ecclesiastical government, or the conformity of the members of the church to the standard of morals required of them.
Concluding, the Court explained why constitutional principles dictated that the civil court system stay out of this religious dispute:
Voting memberships, directorships, and officerships of Hutterville are inseparable from religious principles and contemplate local Church membership…. After the excommunications of the October 2009 election, a resolution of the governance question became dependent upon resolution of a dispute regarding membership in and expulsion from the ‘true' Hutterian Church by the ‘true' church elders and the local church at Hutterville Colony. Such matters of membership are shielded from judicial scrutiny under the First Amendment…..
Because religious issues arising from the Rev. Kleinsasser/Wipf controversy pervade the corporate governance issue, corporate governance cannot be decided without ‘extensive inquiry into religious doctrine and beliefs' of the Hutterian faith…. Therefore, South Dakota courts have ‘no constitutional basis to interfere.'…. ‘[A]djudication …by the courts of this state is precluded by the First Amendment to the United States Constitution and art VI, § 3 of the South Dakota Constitution.'
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