THE STATUS OF LITIGATION,

DECEMBER 5, 2017

What are these two beautiful golden labs thinking?: What in the world is going on? Why are you sad (note that the person is reading my history of the schism)? Can we take you for a walk? Play with us!

My choice for a caption would be: What's going on? And so, they stand in for all of us. What IS going on, we all wonder.

(A correspondent sent me this picture; and I am grateful.)

I am going to try and summarize the state of the litigation between the independent diocese (DSC) on one hand, and the Episcopal Church (TEC) and the Church diocese (TECSC) on the other. Please be aware that I am a professional historian, not a lawyer or legal expert. The following is meant as my layman's opinion only.

FIVE ASPECTS OF LITIGATION

There are five areas of litigation to be considered. Some of these overlap, but still should be examined separately.

1. Mediation.

2. The South Carolina Supreme Court decision.

3. The Complaint.

4. The planned appeal to the U.S. Supreme Court.

5. vonRosenberg v. Lawrence, United States District Court, Charleston.

Let's look at each.

1. MEDIATION.

U.S. District Court judge (handling the vonR v. L case), Richard Gergel, ordered the mediation on August 30, 2017. The two sides agreed to put all issues, in state and federal courts, on the table for consideration. Senior judge, Joseph Anderson, agreed to be the overseeing mediator. 

The mediation has had two sessions. The first was on November 6-7, 2017. It adjourned on the morning of the second day in a recess that was to last until December 4-5. Since the parties involved were not allowed to discuss the proceedings, no reason was given for the suspension. The second session was on December 4. It adjourned before the end of that day. Again, no reason was given for the suspension. A third session was announced for January 11-12, 2018. 

Considering the total news blackout on the talks, one can only speculate on what happened in the two abruptly halted meetings. My best guess is that, in the first session, one or both parties demanded detailed accounting of financial issues, and that these were not forthcoming in the second session. 

Having tried and failed twice, one should not be too optimistic that the mediation is going to lead to a settlement.

2. THE SOUTH CAROLINA SUPREME COURT DECISION.

The South Carolina Supreme Court issued a written decision on August 2, 2017 and reaffirmed it on November 17. The Court had considered an appeal of the circuit court ruling of Feb. 3, 2015. The SCSC partially overturned and partially upheld the lower court decision.

The SCSC overturned the lower ruling on 29 of the 36 parish properties in question plus Camp St. Christopher. The Court recognized TEC/TECSC trust control over these properties.

The SCSC left in place the lower court's injunction recognizing DSC as the holder of the legal entity of the old diocese. The justices recognized that the federal court would decide the question of trademark ownership. Thus, at present, DSC holds the legal rights of the diocesan entity of the pre-schism diocese until such time as the federal court may decide differently. If the U.S. District Court should decide in favor of TEC/TECSC, DSC could appeal the decision to the U.S. Court of Appeals, in Richmond, and ask for a stay leaving in place its control over the diocesan rights at least until the appeal is over.

3. COMPLAINT.

On November 19, DSC filed a new lawsuit against TEC/TECSC, a Summons and a Complaint in the circuit court of Dorchester County. This was the court that had handled the original lawsuit of DSC v. TEC. The Complaint demanded a jury trial.

The Complaint asked two responses from the court:

1-that TEC/TECSC pay the DSC and the parishes in question for all "improvements" made to the properties. It cited the "Betterments Statute" which said that occupants of property belonging to someone else were entitled to reimbursement for improvements they made on the properties they occupied in the mistaken belief that they owned the property. With this, DSC gave at least tacit recognition that TEC/TECSC owned the properties of the diocese and the parishes in question.

The text of the Complaint was vague about what "improvements" would mean. At one point (#7), it listed acquisition, improvements, maintenance, repair, and renovations. This could conceivably meant the full value of the real property. (The full value of Camp St. Christopher, for instance, with its 200 acres of ocean-front land would be many, many millions.) In the end, the Complaint demands "the value of the improvements" but does not attempt to explain what that means.

2-a stay in the Complaint action pending DSC's appeal to the U.S. Supreme Court. This would put on hold the circuit court case of the Complaint until the U.S. Supreme Court should make a final ruling on the appeal.

Interesting to note, the Complaint was filed by lawyer Andrew Platte, the one-time clerk of Judge Diane Goodstein.

There is a very helpful online description of the court's handling of a Complaint in SC. Find it here . According to this, TEC/TECSC has 30 days to file a response. That would be December 20, 2017. TEC/TECSC could make one of two responses, an Answer or a Motion. My guess is they will submit a Motion for a dismissal of the Complaint. There is likely to be a hearing on the motion to dismiss and both sides would make oral arguments before the judge who then would decide whether to accept of deny the motion to dismiss. However, the Complaint asks for a stay in the case pending a decision of the U.S. Supreme Court. The judge would have to decide on whether or not to grant the stay. If granted, the stay would leave the case in suspension for the duration of the U.S. Supreme Court's consideration of the appeal.

In my view, the Complaint of Nov. 19 is a frivolous lawsuit. The SCSC closed this case and then reaffirmed that. There was no mention in the SCSC decision of financial reimbursements for improvements. Indeed, there was no mention of this for the whole nearly five years of the lawsuit. DSC never raised the issue of improvements in the circuit court or the state supreme court. I do not see what grounds they have to raise the issue retroactively. The case is closed in SC state court.

Besides, as I read the SC Code of Laws, DSC has no right to bring a Complaint for betterments. The Code says "After final judgment in favor of plaintiff" the defendant has the right to claim reimbursements for betterments. In fact, DSC was the Plaintiff (initiator) in its lawsuit of Jan. 4, 2013 and TEC, and later TECSC, was the Defendant. Thus, under the state code of laws, DSC has no right to file for betterments because it was the Plaintiff and not the Defendant. As the law reads, only TEC/TECSC could claim betterments. This fact alone should cause the circuit court to dismiss the Complaint as being improperly filed. Find the appropriate section of the SC Code of Laws here .

The Complaint was entered in the circuit court of Dorchester County. That court has only two judges. If Judge Goodstein is assigned the case, perhaps TEC/TECSC would either ask for a change of venue, as to Charleston, or ask Goodstein to recuse herself from the case.

4. THE PLANNED APPEAL TO THE U.S. SUPREME COURT.

Soon after the state supreme court denial of rehearing, on Nov. 17, DSC announced that it was planning to appeal the SCSC decision to the United States Supreme Court. DSC would have 90 days in which to file an appeal. That would be February 15, 2018.

The U.S. Supreme Court receives around 10,000 appeals a year and grants 1% of them. Thus, right off, DSC has a 99% chance of denial. Even more, the case itself. DSC based its entire argument, in circuit and supreme courts, on state property and corporate law. In short, they wanted to extend the 2009 All Saints decision as a blanket over the whole diocese. That decision had ruled that All Saints parish (of Pawleys Island) had indeed legally removed itself from the diocese (corporate rights) and that the parish was the sole owner of the parish property (property rights). The Court ruled that the Dennis Canon was irrelevant for All Saints. Indeed, throughout the state court actions, the DSC lawyers had strenuously objected to the Church side's attempts to inject constitutional issues into the case. Only in the end did Justice Pleicones make a case of constitutional considerations, but he and Hearn were alone in this. In the Aug. 2 SCSC decision, the majority of justices ruled that the 29 parishes had acceded to the Dennis Canon and that this accession could not be revoked by sole action of the parish. Thus, the decision finally rested on state law. Since the entire case was tried and judged on state law, I do not see how the U.S. Supreme Court would take it on appeal. They would do so only if they believed an important U.S. constitutional issue was at stake. I do not see that here.

5. vonRosenberg v. Lawrence, UNITED STATES DISTRICT COURT, CHARLESTON.

On March 4, 2013, the Church side entered a lawsuit in the U.S. District Court, in Charleston, vonRosenberg v. Lawrence. This charged that Bishop Mark Lawrence was in violation of the Lanham Act, the federal act protecting federally registered trademarks. Federal trademarks take precedent over state ones. Bishop Charles vonRosenberg asked the court to recognize him, and not Lawrence, as the bishop of the Episcopal diocese of South Carolina, and to stop Lawrence from pretending to be the Episcopal bishop.

Judge C. Weston Houck handled this case from the start until his death this year. In short, he refused to adjudicate it, in deference to the state court case, even though he was twice directed to proceed by the U.S. Court of Appeals, in Richmond. In August of 2017, Judge Richard Gergel took the case and proceeded to schedule a trial for March of 2018. He also ordered a mediation; and the federal case was put on stay pending the outcome of the mediation.

The outlook for the Church side here is good, for two reasons. 1-Federal courts almost always either side with the national institution of the Episcopal Church, or refuse to get involved. A crucial factor overhanging federal litigation is the First Amendment of the U.S. Constitution that demands the separation of church and state. Courts are strictly forbidden from interfering in the internal matters of a religious institution. The 1st Amendment makes federal courts very wary of treading into religious disputes. 2-the SCSC's decision not only ruled that state law sided with the Church, it also declared the Church to be hierarchical, that is, superior to the local diocese (even Judge Houck had said the same). The SCSC also made it clear that the federal court would decide on ownership of the legal entity of the old diocese (by trademark decision).

DSC should be very reluctant to proceed to the federal court. As I see it, the weight is against them. What is more, DSC stands to lose everything if the federal court comes down entirely on the side of TEC/TECSC. Even the 7 parishes now out of TEC/TECSC control could possibly be returned to the Church. Too, the Betterments, even if granted by the circuit court, could be in jeopardy.

What all this says to me is that TEC/TECSC has the upper hand in the litigation. The state supreme court ruled for them. It is highly unlikely DSC can overturn this. The two sides have failed to reach compromise agreement in two rounds of mediation. This bodes ill for the hope of peaceful settlement in the foreseeable future. It appears to me that DSC, even seeing defeat, has no interest in dealing with the other side and is denying and delaying as long as possible. They are putting off the inevitable, and they can put it off for years to come.

As I see it, DSC's situation in litigation will only get worse with time. It appears to me that they are not interested in a mediated settlement. Their frivolous lawsuit of Nov. 19 against TEC/TECSC is likely to be thrown out. There is very little chance that the U.S. Supreme Court will take their appeal. Once they get to federal court, they face the very real possibility of catastrophic finality.

DSC is desperate to keep as many communicants with them as possible as the 29 parishes return to TEC/TECSC (and to keep paying for the horde of lawyers). I believe that is a crucial factor in DSC's delaying tactics. They need time to pull as many people as possible out with them. Demonizing the other side and de-legitimizing the court decisions in the minds of the faithful may work for this. On the other hand, DSC is running a very strong risk of alienating more and more of their communicants. Lawsuit fatigue is real and growing whether they want to recognize it or not. From letters to the editor and e-mails I am receiving, I would say DSC had better beware of popular revolt. People are getting sick and tired of the endless war which, after all, was foisted on them by their leaders.

The signs of decline are clear. When Mark Lawrence arrived nearly ten years ago, the Diocese of South Carolina counted 27,670 communicants. The last figures, for 2015, showed 15,556 communicants, a fall of 44%. In the same decade, the budget has fallen by a third, more if one figures in inflation. The vast majority of DSC churches have lost significant numbers of members. Around the time of the schism, the diocese lost 10,000 people, about half staying with the Episcopal Church and half dropping out of the DSC churches. In addition, the promised journey to the promised land went nowhere. The diocese joined the Anglican Church in North America, a bunch of American schismatics who have proven to be all too fond of schism. That house of cards is now collapsing. Bishop Jack Iker, of Ft. Worth, says he is no longer in communion with DSC; and former archbishop Robert Duncan is now publicly disputing with Iker (find the link here ). Schism begets schism. 

Some of the faithful are beginning to have doubts about the wisdom of their leadership. Obviously the DSC power structure failed on the big claims they made--to take the diocese out intact from TEC and to have the local parishes own their own properties. The leaders failed at both. The state high court judged it illegal. Why should communicants believe in their leaders any more? DSC is facing a crisis of integrity among its own people and the ongoing litigation is only feeding this. DSC leaders would be smart to stop with what they have, make the best deal they can with TEC/TECSC, and consolidate what is left. DSC can still be viable religious entity. If, however, they keep on the path of legal destruction, they may wind up with too little to survive.