Litigation against Disaffiliating Dioceses: Is it Authorized and What does Fiduciary Duty Require?

by: Mike Watson
Thursday, September 17th, 2009

full footnoted text available for download here (.pdf)

This paper examines whether the Presiding Bishop is authorized to initiate and conduct recent property litigation and finds no source for such authority in the Constitution and Canons of the Episcopal Church. Arguments based on a presumed equivalence of the roles of the Presiding Bishop and Executive Council to those of a corporate CEO and board of directors are found not to be valid. The paper also examines claims that pursuit of litigation is necessitated by fiduciary duty. It concludes that no convincing case has been made that this is so. First, no person is under a fiduciary duty to undertake something that has not been authorized. Putting aside the issue of authorization, several factors relevant to a proper fiduciary duty analysis suggest refraining from litigation such as has been commenced against disaffiliating dioceses. In this connection, relevant fiduciary duties are not limited to those that may be owed to TEC as an organization, but also include duties owed to its member dioceses. Claims that a member diocese cannot disaffiliate and retain ownership of its property implicate the latter set of duties. The paper presents a case that the duties to dioceses include duties to those that have withdrawn because the claims against them are based on alleged consequences of their having been dioceses of TEC rather than the actions of an unaffiliated third party.

Paper here