March 31, 2011

Churches in Court

Lawsuits Arising from Misconduct

The fourth and final type of case arises as a result of actions on the part of a religious organization’s employee or agent. (Agent is a legal term that refers to any person who is authorized to act on behalf of another.) In a religious organization this can include many people, such as clergy members, lower-level employees and even volunteers acting on behalf of the organization.

In general, an agent’s wrongful act can provide the basis for a civil or criminal legal action, not only against the agent but also against the organization that employs the wrongdoer. The most prominent example of this type of case, at least in recent history, involves allegations that Roman Catholic priests sexually abused minors and the subsequent charges that church leaders covered up these incidents in the interest of protecting the alleged offenders and the church itself.

Courts usually resolve such cases by applying the same legal principles that they would use to address similar claims against secular organizations. For example, if a pastor is engaged in a sexual relationship with a child and the child’s parents sue the church for the pastor’s sexual misconduct, a court might adjudicate the case in the same way as it would address a similar claim against a psychological counseling firm that employed a therapist who had been accused of abusing a child in counseling.

When such lawsuits threaten to penalize a religious organization because of the way it is governed, however, the First Amendment at times requires courts to treat the religious organization differently from a secular organization. As a result, the constitutional issues raised in this fourth type of case depend on the specific character of the lawsuit against the religious organization – specifically, whether the legal claim is based on what is known as “vicarious liability,” institutional breach of fiduciary duty or organizational negligence.

Vicarious Liability

A vicarious liability claim is a legal action against an employer based entirely on the wrongdoing of one of its employees. To prevail in a vicarious liability action, the injured party must demonstrate that the wrongdoer was an agent of the employer and that the wrongful act arose within the scope of the employee’s job responsibilities. Importantly, a vicarious liability claim does not allege that the employer actually caused the employee’s misconduct. Instead, the doctrine of vicarious liability assumes that the employer should bear the costs resulting from the wrongful act because the wrongdoer committed the act while working on behalf of the employer. For example, if a restaurant employed a driver to deliver meals to customers and the driver was at fault in an auto accident that occurred while making a delivery, the person injured in the accident could file a vicarious liability claim against the restaurant, even if the restaurant did not specifically do anything to cause the accident.

Generally, vicarious liability claims against religious organizations do not raise constitutional problems because these claims rarely require courts to inquire into the organization’s internal affairs. As in the example above, if a pastor was involved in an auto accident while visiting a parishioner, a person injured in the accident could file a vicarious liability claim against the church that employed the pastor. The First Amendment would allow a court to adjudicate this lawsuit because such a claim would not require the court to inquire into the details of the employment relationship between the church and the pastor.

Vicarious liability claims are rarely successful in cases alleging sexual misconduct by members of the clergy, but this has nothing to do with the special character of religion. Instead, a vicarious liability claim requires the plaintiff to show that the wrongful conduct occurred within the scope of the agent’s duties for the employer, and courts generally hold that sexual misconduct is outside the scope of employment – whether of a pastor or a secular counselor.

Institutional Breach of Fiduciary Duty

The second type of lawsuit over an agent’s misconduct involves a claim that (1) a special relationship exists between an organization and some individual; (2) as a result of that relationship, the organization was obligated to act for the benefit of that person; and (3) it failed to do so. For example, an orphanage would have a fiduciary duty to act in the best interests of the children placed in its care.

Most often, a lawsuit based on an institutional breach of fiduciary duty alleges that the institution failed to investigate accusations of an agent’s wrongdoing, to warn people who might be exposed to such wrongdoing, or to take immediate action against the agent or agents known to have committed wrongful acts. For example, a psychological counseling practice generally owes a fiduciary duty to its patients because the patients trust that the practice will protect their interests. So when a therapist breaches that trust by making sexual advances toward a patient, the patient might sue the counseling practice for breaching its fiduciary duty by not taking appropriate action to ensure that such advances do not occur. Likewise, when a pastor engages in a sexual relationship with a parishioner, the parishioner might claim that the religious organization has breached a fiduciary duty by not taking steps to protect parishioners from sexually predatory clergy.

In a high-profile case on this issue, Moses v. Diocese of Colorado (1993), a Colorado woman sued the Episcopal Diocese of Colorado for the emotional and financial injuries she suffered as a result of the manner in which the local bishop handled her extramarital affair with a priest. Specifically, the woman claimed that she had a mental breakdown because the bishop requested that she keep her relationship with the priest a secret and made her feel that she, not the priest, was primarily to blame for the affair. After the trial court jury awarded damages to the woman, the church appealed to the Colorado Supreme Court on the grounds that the judgment violated both religion clauses of the First Amendment. The state’s high court upheld the constitutionality of the judgment, ruling that it was appropriate for the lower court to treat the church like a secular organization. In its decision, the state’s Supreme Court stated that the claim involved only the secular questions of whether the diocese, acting through the bishop, had assumed fiduciary obligations to the woman and whether the diocese had breached those obligations. The court ruled that the woman’s case met both conditions.

Organizational Negligence

The most common type of lawsuit in this category is a claim that a religious organization was negligent in allowing one of its employees to harm another person. This type of claim alleges that while the religious organization did not directly cause the employee’s misconduct, the organization should still be held responsible because it negligently placed the employee in a position to commit the harmful act.

The most constitutionally problematic type of negligence claim against a religious organization is an allegation that the organization was negligent in ordaining the wrongdoer. Courts have generally dismissed negligent ordination claims on the grounds that, to adjudicate such claims, courts would need to evaluate the religious organization’s decision to ordain a particular individual – an evaluation that might require the interpretation of religious doctrine or an appraisal of religiously based judgment. Following the reasoning in ministerial exception cases, these courts have concluded that such government interference with ordination decisions is prohibited.

Less constitutionally problematic, and more common, are claims that a religious organization was negligent in hiring, supervising or retaining the wrongdoer. Secular employers are regularly subject to such claims. For example, if a psychological counseling practice hired a therapist even though the practice knew that the individual had a history of sexual misconduct, then the therapist’s subsequent sexual advances toward patients could lead to lawsuits against the practice for negligently hiring that person. Likewise, if the practice knew of a therapist’s previous sexual misconduct and then did not take steps to monitor the therapist’s interaction with patients, then patients could sue the practice for failing to adequately supervise the therapist. Similarly, if the practice continued to employ a therapist who had a pattern of sexual misconduct, patients could sue the practice for retaining the employee.

Similar scenarios have arisen in religious organizations, as victims of clergy sexual abuse have alleged that the religious organizations were negligent in employing clergy accused of wrongdoing. Court rulings in this area have gone in different directions. Although most judges have concluded that the First Amendment does not limit the extent to which courts may hold churches liable for negligently hiring, supervising or retaining clergy who have committed sexual abuse, a few courts have found that the First Amendment does impose some limits on such liability. For instance, in Gibson v. Brewer (1997), the Missouri Supreme Court ruled that a church could not be held liable for negligence in supervising a minister who allegedly committed sexual misconduct. The court based its ruling on the principle that civil courts may not assess the adequacy of a church’s oversight of its clergy. At the same time, however, the Missouri court said the church could be held liable for intentional failure to supervise the minister if the church knew of the minister’s propensity to commit sexual misconduct and failed to prevent him from doing so. This is a much higher threshold for injured plaintiffs to satisfy when suing churches.

In contrast with the Missouri Supreme Court, most other federal and state courts have ruled that religious organizations may be held liable for negligence – on the same terms as secular employers – in hiring, supervising or retaining clergy who harm others. These courts have concluded that they may adjudicate such actions, consistent with the “neutral principles” approach adopted by the U.S. Supreme Court in its 1979 ruling in Jones v. Wolf, which allowed courts to treat churches the same as secular organizations (see Internal Property Disputes).

A U.S. District Court in North Dakota, for example, used this reasoning in deciding Enderle v. Trautman (2001), a case that involved an extramarital affair between an adult female parishioner and a minister during the course of their counseling relationship. The parishioner sued the Olivet Lutheran Church and the Eastern North Dakota Synod for negligently supervising and retaining the minister. Specifically, the parishioner alleged that the church should have supervised the minister more closely, and perhaps fired him, because the church was aware of rumors that the minister had engaged in sexual misconduct with several of his parishioners. The congregation and synod argued that adjudication of the claim would violate the First Amendment because it would require deciding what authority a congregation or hierarchical body should have over a pastor – a matter of internal religious governance and religious doctrine. The court disagreed and held that it could adjudicate the case by applying secular standards to determine whether the congregation and synod actually had the authority to supervise and retain the pastor. At trial, the court determined that the congregation and synod had not been negligent in their supervision of the minister’s actions.

In Fortin v. Roman Catholic Bishop of Portland (2005), the Maine Supreme Court ruled that a court may consider a plaintiff’s claim that the church was negligent in its supervision of a priest who sexually abused a minor. The court held that the First Amendment does not bar a court from scrutinizing the supervisory relationship between the priest and his bishop.

This issue is still being battled in the courts and will likely not go away any time soon, especially given the continuing sexual abuse cases against a variety of religious organizations, including the Roman Catholic Church. The damage awards and negotiated settlements in these cases involve very significant sums, well into the millions of dollars. Indeed, at least eight Roman Catholic dioceses – those in Davenport, Iowa; Fairbanks, Alaska; Milwaukee, Wis.; Portland, Ore.; San Diego, Calif.; Spokane, Wash.; Tucson, Ariz.; and Wilmington, Del. – have entered bankruptcy reorganization because of the massive liability they face as a result of sexual abuse awards and settlements.

In addition, several plaintiffs in sexual abuse cases have recently filed suits against the Holy See on the grounds that high church officials were complicit in the abuse because they blocked the removal of allegedly abusive priests. The Foreign Sovereign Immunities Act (FSIA) generally precludes lawsuits against foreign governments in U.S. courts. But FSIA contains a number of exceptions to this rule, including a provision that foreign governments may be held liable if their employees commit wrongful acts that cause personal injury. Therefore, the key question in the lawsuits against the Vatican is whether the alleged wrongdoers – in this case, those who selected and supervised the abusive priests – should be regarded as employees of the Holy See.

So far, federal courts have reached different conclusions on the Vatican’s claims of sovereign immunity in such cases. For example, in a 2008 lawsuit in federal District Court in Oregon, the Vatican asked to be dismissed, on the grounds of sovereign immunity, as a defendant in a case involving accusations of sexual misconduct by a priest. The District Court judge denied the request, ruling that the Vatican’s assertion of immunity was premature and that the plaintiff should have an opportunity to show that the Vatican’s conduct fell within the FSIA exceptions to sovereign immunity. The 9th U.S. Circuit Court of Appeals affirmed the Oregon ruling, and in June 2010 the U.S. Supreme Court declined to hear the Holy See’s appeal. The case has now been returned for further proceedings in Oregon, with the Vatican, at least for now, still one of the defendants in the action.

In Texas, however, a federal district court judge ruled in 2006 that the FSIA does give the Vatican immunity in lawsuits involving allegations of sexual misconduct on the part of Catholic clergy. The case in Texas moved forward against officials in the local diocese of the Catholic Church but without the Vatican as a party in the suit.

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