In the span of eight days, SKO won two separate judgments—in two different courts—requiring the dismissal of a lawsuit that had embroiled one of Kentucky’s most prominent charitable institutions for almost two years.
SKO attorneys Walter Sales, Joe Bilby and Leah Smith represented St. Joseph’s Children’s Home and its current Board of Trustees in a widely publicized lawsuit that was filed by several of its former trustees in April 2013.
At an annual members’ meeting on February 6, 2013, St. Joe’s members voted in favor of a resolution removing the former trustees following their failure to respond to allegations of misconduct by one of their own. SKO’s clients were elected to serve on the Board of Trustees in place of the removed trustees. The members’ vote also implemented important new governance reforms that brought St. Joe’s into compliance with best practices for nonprofit organizations.
The former trustees then filed suit in Jefferson Circuit Court, challenging their removal and disputing the authority of SKO’s clients to serve on the board. Several months after the lawsuit was filed, St. Joe’s members gathered for a new meeting where they voted in favor of another resolution ratifying the election of SKO’s clients as the rightful members of the board.
At the outset of the litigation, SKO moved for the dismissal of the case, arguing that the ecclesiastical abstention doctrine (also known as the religious autonomy principle) – which serves to protect the religious freedoms guaranteed by the First Amendment’s Free Exercise and Establishment Clauses – would not allow the court to decide which group of individuals was entitled to lead St. Joe’s.
When the trial court denied its motion to dismiss the case, SKO sought relief in the Kentucky Court of Appeals, asking that court to issue an injunction requiring the lower court to reverse its decision and dismiss the case. The Court of Appeals ruled against SKO’s clients, reasoning that the trial court could decide the leadership dispute on the basis of “neutral principles of law” that had nothing to do with religion. SKO immediately appealed the decision to the Kentucky Supreme Court.
In a decision rendered December 18, 2014, the Kentucky Supreme Court ruled in favor of SKO’s clients, holding that the ecclesiastical abstention doctrine prohibits Kentucky’s courts from deciding which individuals should serve on St. Joe’s Board of Trustees
The Court’s ground-breaking opinion created significant changes in the law of religious organization governance in Kentucky. In the wake of this opinion, Kentucky’s courts are required to abstain from deciding any dispute that would require a judge to choose which individuals should lead a church, synagogue or mosque. This rule of law applies with equal force to religiously affiliated organizations, like St. Joe’s, that are not houses of worship.
In addition, the ecclesiastical abstention doctrine is now understood to be an affirmative defense rather than a limitation on the inherent subject matter jurisdiction of Kentucky’s courts. As such, religious organizations may seek immediate appellate review of a trial court’s refusal to dismiss a lawsuit whose resolution would violate the religious autonomy principle.
Just eight days before the Kentucky Supreme Court’s ruling, the lower court ruled that the case must be dismissed because St. Joe’s members’ decision to ratify SKO’s clients’ election effectively rendered the controversy moot. Thus, in a span of eight days, SKO won two separate rulings that required the dismissal of the case in favor of its clients.