Friday, December 3, 2010

Excerpts 11-15 - Opinion of US 7th Circuit Court of Appeals, Case No. 08-2306 Options

November 23, 2010 - 7th Circuit Court of Appeals rules against Haifan Baha'is of Wilmette, Illinois
Seventh Circuit Court of Appeals. Opinion, Judge Sykes.
Excerpts - Opinion of US 7th Circuit Court of Appeals, Case No. 08-2306

No. 08-2306
reviews and approves all decisions relating to the organiza-
tion’s activities and affairs.
2. The Second Group of Alleged Nonparty Contemnors
The Second International Council and Bahá’í Publishers
were created by Dr. Leland Jensen, who signed the incor-
poration papers for the Hereditary Guardianship
and served as a board member from April 1963 to May
1964. In 1964, however, Jensen lost reelection to the board,
and he thereafter disassociated himself from any formal
governance role in the Hereditary Guardianship. Accord-
ingly, he was not a board member when the Hereditary
Guardianship sued the National Spiritual Assembly,
nor did he have any role in the litigation. Dr. Jensen
continued to follow Remey’s Guardianship, however,
and when he and his wife moved to Missoula, Montana,
sometime later that year, they established a small commu-
nity of believers there.
In 1969 Dr. Jensen formed the Bahá’í Publishers as
a publishing trust and incorporated it in Montana in
1987. Bahá’í Publishers publishes books and pamphlets on
Dr. Jensen’s interpretation of the beliefs of the Bahá’í
faith “under the Provisions of the Covenant.” Dr. Jensen
also helped establish the Second International Council
in 1991, which was incorporated two years later. The
Second International Council handles administrative
responsibilities for believers in the Bahá’í faith “under
the Provisions of the Covenant” and describes its “main
responsibility” as “giv[ing] guidance to anybody
who requests it.” Jensen died in 1996.
No. 08-2306
C. The District Court Rejects the Privity Claim
Judge Austin had long since died by the time the Na-
tional Spiritual Assembly returned to court in 2006, so the
contempt motion was assigned to Judge Amy St. Eve. She
authorized limited discovery and then held an extensive
evidentiary hearing on the question of whether the alleged
nonparty contemnors were in privity with the Hereditary
Guardianship and thus bound by the injunction. She
concluded they were not. In reaching this decision, Judge
St. Eve declined to follow the First Circuit’s decision in
Merriam, 639 F.2d 29, on which the National Spiritual
Assembly had substantially relied in support of its privity
claim. But she made detailed findings about the relation-
ship of each of the alleged contemnors to the Hereditary
Guardianship and/or Remey, and based on those findings,
concluded that they could not be bound. This appeal
II. Analysis
The National Spiritual Assembly argues that the district
court committed legal error by rejecting the First Circuit’s
holding in Merriam that a key officer or employee of an
enjoined but later dissolved corporation can be “legally
identified” with the corporation and therefore personally
bound by the injunction. As a more general matter, the
National Spiritual Assembly challenges the district court’s
conclusion that the five nonparty alleged contemnors were
not in privity with the Hereditary Guardianship and
therefore are not bound by the 1966 injunction. We agree
with the first of these arguments. Merriam is not, as the
No. 08-2306
district court thought, an overbroad statement of the
principles on which a nonparty may be considered bound
by an injunction. But it does not follow that the district
court’s no-privity conclusion was in error. The facts here
do not support a finding of privity even when Merriam is
A. The Effect of Presbyterian Church
Before proceeding, a few words about the substance of
the underlying injunction and its relationship to the civil-
procedural questions at issue in this case. The injunction
was entered in 1966, before the Supreme Court’s decision
in Presbyterian Church in the United States v. Mary Elizabeth
Blue Hull Memorial Presbyterian Church, 393 U.S. 440 (1969),
but after Kedroff v. St. Nicholas Cathedral of Russian Orthodox
Church in North America, 344 U.S. 94 (1952). Kedroff
constitutionalized the general common-law principle
announced in Watson v. Jones, 80 U.S. (13 Wall.) 679 (1871),
that civil authorities may not make judgments about
religious controversies when deciding church property
disputes. Kedroff, 344 U.S. at 116 (The church-autonomy
principle recognized in Watson “must now be said to have
federal constitutional protection as a part of the free
exercise of religion against state interference.”).
Building on Kedroff, the Supreme Court held in Presbyte-
rian Church that “the First Amendment severely circum-
scribes the role that civil courts may play in resolving
church property disputes.” 393 U.S. at 449. The Court
acknowledged that “[c]ivil courts do not inhibit [the] free
No. 08-2306
exercise of religion merely by opening their doors to
disputes involving church property.” Id. But “First Amend-
ment values are plainly jeopardized when church property
litigation is made to turn on the resolution by civil courts
of controversies over religious doctrine and practice.” Id.
The “[First] Amendment therefore commands civil courts
to decide church property disputes without resolving
underlying controversies over religious doctrine.” Id.; see
also Serbian E. Orthodox Diocese for the U.S. of Am. & Can. v.
Milivojevich, 426 U.S. 696, 713 (1976) (noting “the general
rule that religious controversies are not the proper subject
of civil court inquiry”). Civil courts may decide church
property claims based on “neutral principles of law,
developed for use in all property disputes,” but have no
authority to resolve religious disputes.2 Presbyterian
Church, 393 U.S. at 449.
Considered in light of these First Amendment limitations
on the court’s authority, certain aspects of the 1966 injunc-
tion are troubling. The decree declares that “there is only
one Baha’i Faith,” that Shoghi Effendi was its last Guardian
and none has come since, and the National Spiritual
Assembly was its representative and “highest authority” in
the United States and was “entitled to exclusive use of the
For different views on the so-called “hands-off” doctrine in
disputes over religious property, see Richard W. Garnett, A
Hands-Off Approach to Religious Doctrine: What Are We Talking
About?, 84 N OTRE D AME L. R EV . 837 (2009); Kent Greenawalt,
Hands Off! Civil Court Involvement in Conflicts Over Religious
Property, 98 C OLUM . L. R EV . 1843 (1998); Samuel J. Levine,
Rethinking the Supreme Court’s Hands-Off Approach to Questions of
Religious Practice and Belief, 25 F ORDHAM U RB . L.J. 85 (1997).
No. 08-2306
marks and symbols of the Faith,” including the exclusive
use of the word “Bahá’í.” Declarations of this sort push the
boundaries of the court’s authority under Kedroff and
Presbyterian Church. In church property disputes (trade-
mark suits obviously qualify), the First Amendment limits
the sphere in which civil courts may operate. When a
district judge takes sides in a religious schism, purports to
decide matters of spiritual succession, and excludes
dissenters from using the name, symbols, and marks of the
faith (as distinct from the name and marks of a church), the
First Amendment line appears to have been crossed.
But a contempt proceeding is ordinarily not the proper
place for collateral attacks on the underlying injunction. See
Pasadena City Bd. of Educ. v. Spangler, 427 U.S. 424, 439-40
(1976); Walker v. City of Birmingham, 388 U.S. 307 (1967);
Reich v. Sea Sprite Boat Co., 50 F.3d 413, 415 (7th Cir. 1995);
TICE AND P ROCEDURE § 2960, at 391 (2d ed. 1995) (“[T]he
general principle appears to be that obedience to a decree
is required, even though the issuing court has based its
decision on an incorrect view of the law, unless there was
no opportunity for effective review of the decree.”). We do
not have the substance of the 44-year-old decree before us.
Still, resolving the procedural questions at issue in this case
requires some sensitivity to the constitutional concerns
inherent in church property claims. Presbyterian Church is
in the background and circumscribes the inquiry. Applying
neutral privity principles is permissible; pronouncing on
matters of religious succession is not.

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