Wednesday, March 14, 2012
"Federal Arbitration Act, Meet Church Autonomy"
Last week, a Florida Circuit court addressed the enforceability of the arbitration agreement used by the Church of Scientology when enrolling new members. The battle over the arbitration agreement arose as part of a suit filed by two former members of the Church of Scientology, where the plaintiffs alleged that the Church of Scientology had wrongfully retained over $27,000 that should have been refunded to them.
At issue was whether the agreement was enforceable given that the selected arbitrators all had to be "Scientologists in good standing with the Mother Church." According to the plaintiffs, this amounted to requiring arbitration proceedings so unfair that the court could not compel arbitration.
So far this debate is relatively standard. The court compelled arbitration although the plaintiffs will presumably appeal - and they appear to have pretty good grounds for the appeal (this case, in many ways resembles, Hooters of America v. Phillips, 173 F.3d 933 (4th Cir. 1999), where the court invalidated an arbitration agreement because, among other issues, "the employee's arbitrator and the third arbitrator [had to] be selected from a list of arbitrators created exclusively by Hooters"). If the plaintiffs successfully demonstrate on appeal that the arbitrator elegibility rules - as required by the contract - so unduly prejudice the process in favor of the Church of Scientology, then the plaintiffs have a good shot at rendering the agreement unenforceable.
But that's where the case gets interesting. The Church of Scientology's primary defense in its court filings was not based on arbitration law; it was based on First Amendment doctrine.
According to the the Church of Scientology, the court had to abstain from intervening in the dispute because doing so would impermissibly trespass on the Church of Scientology's religious institutional rights - often termed the "church autonomy doctrine" (think here, the long line of church property cases and the Supreme Court's recent decision in Hosanna Tabor). Indeed, the Church of Scientology even incorporated this argument into the arbitration agreement itself, which states:
"I understand and acknowledge that because of constituional prohibitions which forbid governmental interference with religious services or dispute resolution procedures, that in the event I have a dispute . . . resolution of that dispute . . . may be pursued solely through the internal procedures of the Church's Ethics, Justice and Binding Religious Arbitration System."
And here's the challenge for cases where the Federal Arbitration Act meets the church autonomy doctrine. While the FAA has grounds for voiding arbitration agreements and vacating arbitration awards that include fraud, misconduct and collusion, the church autonomy doctrine does not. In fact, while the Supreme Court originally held in its 1929 decision Gonzalez v. Roman Catholic Archbishop that it would consider the decisions of “the proper church tribunals . . . as conclusive” only in the absence of “fraud, collusion, or arbitrariness,” the Supreme Court all-but rejected these exceptions in its 1976 decision Serbian E. Orthodox Diocese v. Milivojevich. The Court's refusal to use review religious institutional decisions for fraud, collusion or arbitrariness flowed from an oft-cited constitutional proposition: courts cannot adjudicate claims that turn on religious doctrine or practice. And to evaluate claims of fraud, collusion or arbitrariness would inevitably lead courts to engage in that precise type of inquiry.
All this leaves former-members of the Church of Scientology with two hoops to jump through. First, they would have to successfully claim that the arbitrator-selection process is so grossly biased that it should render the arbitration agreement unenforceable. Second, they would have to circumvent the church autonomy doctrine and, at least under current constitutional doctrine, I'm not sure they can.
So where does this leave us? One of the aims of my current project - an article titled Litigating Religion - is to bring back the old constitutional regime of Gonzalez and thereby harmonize how the First Amendment treats religious disputes with how the FAA treats religious disputes - and to do this all in the name of religious institutional autonomy. But an explanation for why will have to wait until the next post.
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