When the Supreme Court decided Jones v. Wolf it required courts to use secular criteria to decide church property disputes, yet there remains considerable uncertainty about the permissible latitude of those secular principles. This stems from the Court's attempt to honor three principles that are in tension with one another: 1) autonomous church governance, which the Court sees as an aspect of the free exercise of religion, 2) the need to prevent civil courts from deciding issues of religious doctrine, an aspect of the ban on governmental establishments of religion, and 3) preservation of state autonomy to decide how best to accommodate these twin goals, an aspect of federalism. There are three principal problems with this tripartite objective. First, sometimes they conflict with each other. Second, and worse, this framework fails to take into account adequately the interest of individuals united in local congregations of religious believers freely to exercise their religious beliefs. Finally, embedded in this framework is a generally unrecognized potential violation of the establishment clause: the provision by states of special advantages to hierarchical churches that allow them unilaterally to impose trusts for their benefit upon property held by local congregations. This article seeks to expose these problems and present an approach that better protects the interest in religious freedom of local congregants while still preserving autonomy of church governance and limiting civil courts to adjudication of secular issues. When hierarchical churches divide into factions the principles of religious freedom embedded in the religion clauses compel civil courts to recognize the religious beliefs of a majority of the local congregation in deciding which faction of the divided church is entitled to the use of the local congregational property, absent some clear and wholly secular indication that the local congregation has given control of its property to the general church. The cost of this approach is a slight reduction in the discretion of states to specify decision rules for church property disputes, and a somewhat more controversial reduction in the degree of deference that civil courts should pay to internal church governance rules when churches divide into factions as a result of religious schism. When the Supreme Court decided Watson v. Jones in the late nineteenth century and adopted deference to internal church governance as a standard for resolution of church property disputes, the religion clauses did not apply to the states. While the Court couched its reliance upon internal governance as an implication flowing from the ideals of religious freedom, it did not have to examine that premise critically. When in Jones v. Wolf the Court perpetuated this principle as an option for resolution of church property disputes it may have thought that deference to internal governance rules of hierarchical churches promotes religious freedom. Sometimes it does, but not always. Civil judicial interference with a hierarchical church's control of its clergy is the paradigmatic case of impermissible interference with the free exercise of religion. By contrast, permitting a hierarchical church unilaterally to impose trusts in its favor upon property held for the benefit of local congregations either creates an establishment clause violation (if secular charitable entities are denied this state-created benefit or if there is no plausible secular purpose for this benefit) or cuts deeply into the practical reality of how individual believers gathered in local communities manifest their religious conduct. This problem is exacerbated when a hierarchical church divides amid doctrinal disagreement. At that point, courts should apply a rule of local option, permitting each congregation to decide for itself which branch of the divided church will have its fealty and its property. Only by applying such a rule can a proper balance be struck between the splintered autonomy interest of a hierarchical church and the interest in religious associational freedom of local congregations and their individual members. The reflexive reliance of courts upon internal governance rules to decide property issues amid schism has obscured the interests in religious freedom that are at stake. Adoption of the local congregational option principle leaves hierarchical churches with many avenues to secure congregational property for the benefit of the general church. First, they can avoid rupture by finding sufficient common ground in their religious doctrine to accommodate their body of believers. Second, they can insist that local congregations explicitly place their property in trust for the benefit of the general church as the price of continued affiliation with the general church. What they cannot do is create such trusts by the ipse dixit of the hierarchical church.
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