Vagaries of Virginia: A Look at a Dissenting View

Because I have a respect for him (though we approach issues with very different commitments and don't often agree), I was waiting to see A.S. Haley's take on the Virginia Supreme Court's decision in Falls Church. Unsurprisingly, I don't agree with his favored bottom line, nor do I agree with his overall analysis. That said, I think it's worth considering some of the specific points he makes in context.

In a sense. we agree on one thing: the Virginia Supreme Court's opinion is severely flawed in its methodology. As I explained last night, I believe that the Court went off the rails at an earlier point than does Haley, in that it found that, based on the law in effect at the time of the adoption by the Episcopal Church of the Dennis Canon, the Dennis Canon was ineffective in creating a trust.

Much of my disagreement with Haley on this case takes place here: If the Virginia Supreme Court has this point right (as Haley's analysis postulates) then, while I still don't buy his argument, it's a stronger one than if the concurring opinion by Justice McClanahan, which I think is indisputably correct, is in fact so--that the Virginia statute, by discriminating against hierarchical churches on the basis of their polity,was unconstitutional at the time the Dennis Canon was adopted.

Assuming that is correct, for the moment (and I really haven't seen a good argument why the Establishment Clause allows a state to disfavor a religious body based on animus toward its polity), then the Virginia Supreme Court should simply have found that TEC availed itself of one of the means of creating a trust set forth by the United States Supreme Court in Jones v. Wolf, that is, "by providing, in the corporate
charter or the constitution of the general church, that the identity of the local church is to be established in some other way, or by providing that the church property is held in trust for the general church and those who remain loyal to it." As the U.S. Supreme Court stated in Jones, as a matter of constitutional imperative, that "the civil courts will be bound to give effect to the result indicated by the parties, provided it is embodied in some legally cognizable form," that should be the end of it. Only the patently unconstitutional discrimination against hierarchical churches embodied in Virginia law prior to the amendment of the statute in 1993 prevented that simple analysis and readily predictable outcome.

But since the Virginia Supreme Court didn't undertake the more appropriate analysis, it posed a question which Haley contends it then went on to answer incorrectly--that is, the discrete question of whether, under Virginia law, the parties' course of dealing can create a constructive trust where the parties had previously created an express trust that was ineffective under Virginia law, and when no subsequent acts (prior to the break giving rise to the present litigation) changed the status quo? Or, as Haley puts it:

Look at the words of the statute that changed Virginia law, quoted above. It begins: “Every conveyance or transfer of real or personal property ...”. If trusts in Virginia stand or fall by the law in effect when they were created (opinion, p. 17), then what conveyance or transfer of The Falls Church property took place after 1993 to give rise to the existence of any trust as described by the Dennis Canon?

The Court cannot have it both ways (but Justice Powell tries to do just that). Either the trust in question arose at a time when it was invalid under Virginia law, or it arose at a time when it was valid, i.e., after 1993. And to arise and be effective as declared by the statute, it had to be part of a conveyance of transfer upon terms of trust executed after that date. If it “arose” out of a course of conduct or dealing, then it does not come within the language of the statute—and so it would remain invalid under Virginia law.

This is actually a fair point, and raises a genuine analytical weakness in the Supreme Court's analysis. If you take the amendment in its most literal reading, than it could reasonably be interpreted to mean that some new conveyance or transfer would be needed to bring a hierarchical church that had tried (and, in the Virginia Supreme Court's analysis) to effectuate a trust prior to the amendment within the amendment's scope. The fact that the result would be patently (almost grotesquely) unconstitutional doesn't really address the Virginia Court's analysis, as the Court doesn't reach that issue.

It's not quite the slam dunk Haley thinks it is, mind you, because if the statute is reasonably read as a remedial statute, seeking to avoid a constitutional problem, and/or to eliminate disparate treatment by religion, the broader reading of it taken by the Virginia Supreme Court is considerably more defensible--that remedial statutes are to be read broadly is an ancient truism of statutory interpretation. By looking at the ongoing course of dealing, the Court, exercising its equitable powers, sought to avoid disparate treatment of like-situated entities. Still, I wouldn't be fair if I didn't acknowledge that Haley had made a very salient critique of the rationale on which the Court based its ruling.

(I am not sure though, from what I have read, that the Falls Church made this argument explicitly; if they didn't than the Court's not addressing it other than in the rather short account of the parties' dealings up to the division point, makes more sense.)

I agree with him that, as this decision is limited to an interpretation of the Virginia law of trusts, it is not susceptible review by the U.S. Supreme Court, and will stand whether the reader finds the opinion,Haley's critique, or my limited defense persuasive.

I do disagree with the rest of Haley's analysis; most especially with this:

ssume for a moment that in 2006 the property was held by The Falls Church as a trustee for the Diocese. Then presumably by declaring itself free of the Diocese, it attempted to make its property free of that trust. And Justice Powell concludes it could not accomplish that step without betraying its fiduciary duty to keep the property available for the use of Diocese, and those loyal to the Diocese.

All right, but what about the relationship of the Diocese to The Falls Church all the time the latter was a member of the former? Was not the Diocese a fiduciary as well, in relation to The Falls Church? Did not The Falls Church rely upon the Diocese and its bishops to uphold the “doctrine, discipline and worship of [the national] Church” as that Church received them from the mother Church of England?

And what happened to that trust? The national Church and its Dioceses breached it in 2003, and breached it further in 2006—well before The Falls Church ever took its vote to disaffiliate in response to those breaches of trust.

Haley asserts that "even though the first trust is not civilly enforceable in the courts, it nonetheless furnished the quid pro quo for the creation of the second. And when that first trust ceased to exist, the Virginia Supreme Court had no justification for continuing to enforce the second trust."

Here, Haley's analysis is in my opinion simply untenable; Jones, again:

The neutral principles method, at least as it has evolved in Georgia, requires a civil court to examine certain religious documents, such as a church constitution, for language of trust in favor of the general church. In undertaking such an examination, a civil court must take special care to scrutinize the document in purely secular terms, and not to rely on religious precepts in determining whether the document indicates that the parties have intended to create a trust. In addition, there may be cases where the deed, the corporate charter, or the constitution of the general church incorporates religious concepts in the provisions relating to the ownership of property. If, in such a case, the interpretation of the instruments of ownership would require the civil court to resolve a religious controversy, then the court must defer to the resolution of the doctrinal issue by the authoritative ecclesiastical body.

The First Amendment "requires that civil courts defer to the resolution of issues of religious doctrine or polity by the highest court of a hierarchical church organization." (Id.) Implicit in Haley's "first trust" theory is precisely the kind of doctrinal scrutiny forbidden by the First Amendment.