District Court will proceed despite pending South Carolina State Supreme Court ruling

The U.S.  Court of Appeals for the Fourth Circuit granted the Episcopal Church (TEC) and its local subsidiary, the Episcopal Church in South Carolina (TECSC) their appeal of a decision by the Honorable C. Weston Houck.  Judge Houck issued a stay in September 2015 of Federal proceedings until the conclusion of state court litigation.  Yesterday’s ruling furthers the attempts by TEC to remove the litigation of a state property and identity issue into the Federal courts.

Bishop Charles G. vonRosenberg, who retired last summer as Bishop of TECSC, repeatedly alleged that the property and identity of the Diocese of South Carolina belongs to the Episcopal Church and was wrongfully taken.  Bishop Mark Lawrence heads the Diocese of South Carolina which left TEC in 2012.  In particular, the Federal case alleges that Bishop Lawrence is wrongly presenting himself as a Bishop of TEC which Bishop Lawrence says is a baseless accusation that continues to be used as a means to avoid the issues being addressed in the state courts.

Federal District Judge C. Weston Houck originally dismissed vonRosenberg’s claim in 2013, recognizing that the essential issues of the Diocese’s identity would be resolved by the South Carolina courts.  February 2015, South Carolina Circuit Judge Diane Goodstein ruled the Diocese of South Carolina was, in fact, free to leave the denomination and keep its property and assets.  TEC appealed that decision and the appeal was heard by the South Carolina Supreme Court on Sept. 23, 2015.

Meanwhile, TEC has repeatedly appealed Judge Houck’s decisions to the U.S. Court of Appeals for the Fourth Circuit. The appellate panel initially ordered Judge Houck to reconsider his earlier dismissal of the case using a different legal standard for that decision.  After consideration by that standard, Judge Houck ruled to delay any further hearings pending the outcome of a South Carolina Supreme Court decision.  Judge Houck wrote, “Regardless of the [state Supreme Court’s] ultimate decision, Bishop vonRosenberg’s rights will necessarily be addressed and will be adequately protected in the state court action.”  He also referred to the Supreme Court hearing, as “the parallel state court action.”   Given Bishop vonRosenberg’s retirement last summer, the validity of the complaint appears further suspect.

“Basically, the Judge was saying that if the Supreme Court upholds the current state court ruling the case will be dismissed,” said the Rev. Jim Lewis, Canon to Bishop Lawrence.

Houck applied the Colorado River Abstention doctrine to conclude that the factors in this case presented the “exceptional circumstances” to warrant abstention.  The Court of Appeals for the Fourth Circuit has now disagreed, returning the matter to the Charleston Federal District Court for further hearings.  In yesterday’s ruling the court vacated Judge Houck’s earlier ruling and remanded the case to the District Court for further proceedings.  The Circuit court ruled that because the two bishops were not named parties in the state proceedings, the two cases were not strictly parallel and could proceed separately, though the Circuit court did state that resolution of the state case could resolve many of the issues in question in the Federal litigation.