The California Court of Appeal held its last week-end hearing (Bixler v. Superior Court() Refused to Apply a Broad Scientology Arbitration Agreement to a Lawsuit brought by former members who claim they were wrongly treated after their departure from the Church.
A person has the First Amendment right of leaving a religious organization. We hold that once petitioners had terminated their affiliation with the Church, they were not bound to its dispute resolution procedures to resolve the claims at issue here, which are based on alleged tortious conduct occurring after their separation from the Church and do not implicate resolution of ecclesiastical issues….
Because I was familiar with Prof. Michael Helfand’s work on religious arbitrage, I reached out to him. His response struck me as both very informative and helpful.
A California Court of Appeals made a surprise decision last week and declined to enforce religious arbitration agreements between a few plaintiffs, Church of Scientology, and other parties. The court’s refusal to compel arbitration was not surprising. However, its decision stated that the First Amendment right to modify religious beliefs would be violated by compelling arbitration. This ruling is unique in its type when it comes religious arbitration agreements.
You might also find it a little thin in its arguments. It leaves significant questions as to whether or not it fits with existing doctrine. Below, I will try to address some of these concerns.
The underlying claims of a conspiracy to kill are what I have already stated in this post. Bixler v. Church of Scientology InternationalThey are indeed disturbing. The complaint alleges that plaintiffs were sexually assaulted in their home by Daniel Masterson who is a member of Church of Scientology. It also claims that the Church of Scientology tried to hide the allegations and repeatedly harassed them after they complained. Following the filing of the complaint, Scientology moved to compel arbitration. The Church argued that plaintiff’s claims should all be submitted to binding arbitration in accordance with an arbitration agreement signed between the Church of Scientology and the plaintiffs when they joined the Church. Plaintiffs claimed that the agreements are invalid due to the fact that the arbitral process is not neutral and enforcement would violate their First Amendment free exercise rights.
It seemed reasonable to suppose that the California Court of Appeal would invalidate the arbitration agreement if there were neutrality issues with the arbitral process. The arbitration agreement appears to have included representatives of Scientology in the preparation of evidence and in procedural decision-making. In addition to the requirement that all arbitrators be “good standing” with “Mother Church,” the qualification clause raised questions about whether the mediators could resolve the dispute impartially. (See my previous post for more details). The California Court of Appeal requested additional briefing and indicated that this was indeed the direction it was taking. The letter requested “additional briefing on the following issue: Whether the compelled arbitration is sufficiently neutral to constitute an enforceable arbitration” and then went on to cite some of the case law, and Scientology-related precedent, on the issue.
The court instead ruled that the arbitral agreements were invalid on constitutional grounds. According to the court, “An individual possesses an ‘inalienable First Amendment right to the free exercise of religion, which includes her right to change her religious beliefs ….’ “In re marriage of Weiss (1996) 42 Cal.App.4th106 and 118. Accordingly, the court ruled that petitioners were no longer bound by the Church’s dispute resolution procedures after they had ended their Church affiliation. The claims here are based upon alleged tortious behavior and don’t involve the resolution of ecclesiastical questions. Even though disputes fell within the purview of arbitration agreements and should have been settled pursuant to those terms, the court ruled that plaintiffs’ constitutional rights prohibited them from compelling arbitration.
It is a novel decision. It is however in conflict with the prevailing case law, and raises serious questions regarding future doctrinal issues.
The decision’s choice of precedent is one of its most interesting aspects. Religious arbitration has come under criticism from academics in recent years. Please see Michael A. Helfand, The Peculiar Genius Of Private Law Systems: Making Space for Religious Commerce 97 Wash. U. L. Rev. 1787 (2020) (parts III and IV collect this literature and critique it), courts have uniformly enforced religious arbitration agreements and awards over and above constitutional challenges. It holding was therefore reached. Bixler This does not include cases that involve religious arbitration agreements. In establishing the right to alter faiths, it examines case law concerning the enforceability and religious upbringing provisions within agreements regarding child custody.
Child custody agreements don’t have presumptions of enforceability. Instead, custody decisions must be determined based on the best interests and child. The doctrine is complicated and may vary from one jurisdiction to the next. However, arbitration agreements are subject to federal law and courts must enforce them. Look! 9 U.S.C. §2. The court’s choice to rely nearly exclusively on custody cases—without addressing the significant doctrinal differences between child custody and arbitration—is, at best, curious.
[2.]State Action Doctrine
The court also dismissed the requirement for state action. This is a curious move. An essential condition for any constitutional claim is state action. In general, the judicial enforcement or arbitration of a claim is not considered state action. Look!Christopher Drahozal Commercial Arbitration: Problems and Cases 18 (3d ed. 13) (noting “[a]All of the federal courts who have considered the question have ruled that commercial arbitrage isn’t a’state action’ that falls within the scope of constitutional protections. According to then-Judge Posner “Arbitration can be used as a private self-help solution.” The American Arbitration Association is a private organization selling a private service to private parties who are under no legal obligation to agree to arbitrate their disputes or, if they decide to use arbitration to resolve disputes, to use the services of the Association, which is not the only provider of such services…. When arbitrators issue awards, they do so pursuant to the disputants’ contract—in fact the award is a supplemental contract obligating the losing party to pay the winner. The fact that the courts enforce these contracts, just as they enforce other contracts, does not convert the contracts into state or federal action and so bring the equal protection clause into play.” Smith v. Am. Arbitration Association, 233 F.3d 502, 507 (7th Cir. 2000).
Although there are many commentators who disagree, the consensus is among judges. Look! Sarah Rudolph Cole, Arbitration and State ActionBYU L.Rev. 2005, p. 1, 3-4 (noting that consensus among the courts and also collecting much scholarly criticism).
California Court of Appeal rejected this concern with the following footnote: “We believe that cases such as Re: Marriage of WeissThe appropriate precedent is the, specifically stating that parties cannot trade away their constitutional rights to alter religions. Contrary to Scientology’s view that state action would not be justified by enforcing religious restrictions, the authorities recognized that it would violate a person’s fundamental constitutional rights.
The court is unclear as to what it has in mind. Maybe the fact that compelling arbitration is a form of specific performance, and the remedy of specific performance itself—participating in a Church of Scientology arbitration—constituted a violation of the plaintiffs’ free exercise rights, explains why this decision differs from the general doctrinal consensus. This argument is made more complicated by the court’s statement, “Whether Scientology arbitration is a ritual or not, is irrelevant to our analysis.” This argument may still be available in some form. However, the court’s analysis is not clear and leaves readers wondering. One would expect more from the court, given the overwhelming judicial consensus.
[3.]Recriminating against religious arbitration
Due to the court’s initial holding, it also addresses the question whether refusing enforce religious arbitration agreements is “hostility toward religion.” Because there is no authority that can uphold arbitration agreements ad infinitum, the court finds it doesn’t. This argument seems to contend that the Scientology agreement—which covers all future disputes, including those sounding in both contract and tort, between the plaintiffs and the Church of Scientology—would not have been enforced even if it did not involve religious arbitration. This opinion goes on to highlight California case law that requires arbitration for ongoing tort claims. In those cases, tort claims were covered by the contract scope of arbitration.[med]They were not based on the contractual relationship between them, and therefore fell within the purview of the arbitration agreement. These claims by petitioners against Scientology are not based on the contractual relationship.
It’s difficult to grasp the meaning of what is being said by this court. The court is stating that Bixler Because the disputes do not fall within the purview of the arbitration agreement it is different. This argument is called the First Amendment Argument. A court shouldn’t order arbitration since the disputes don’t fall within the reach of the agreement. (I also raised this possibility).
If the court believes that disputes fall within the terms of the agreement it will treat religious arbitration agreements as worse than any other form of arbitration. To protect the constitutional right of the plaintiffs, the court does this. However, in so doing, it does also raise the possibility—which the court appears to acknowledge—of a claim that its decision constitutes a form of religious discrimination pursuant to cases such as Church of Lukumi Babalu Aye, v. City of Hialeah Trinity Lutheran against Comer
[4.]Use of Bixler
This is the big question that stems from the Court’s Decision in Bixler This is an area where it could apply. It could also be taken to mean that religious goods or services agreements must be invalidated by courts if one party changes their religious affiliations. It would have far-reaching consequences. Barak Richman, as well as I, outline this in Co-Religionist Commerce – The Challenge64 Duke L.J. 769 (2015). The United States has a very active religious commercial sector that uses a variety of religiously-related instruments. This type of holding could cause significant uncertainty about such contracts due to the possibility of one party arguing against enforcement in the future on the grounds that their religion or affiliation might change. Before BixlerYou might imagine that these claims would fall under the umbrella of impracticability/frustration-of-purpose contract doctrines. Such claims could now be heard in the First Amendment.
As an example, let’s say a synagogue has in their membership application and agreement all potential members sign a clause that says that all disputes must be brought before the Beit Din (rabbinical courts) whose decision will be final and binding. Now imagine a member quitting the synagogue to become a member of another synagogue. Before BixlerAssuming that the court found that the arbitral procedure was neutral, and that the dispute fell within the terms of the arbitration agreement; a court would likely have ordered arbitration.
After BixlerOne can see the ex-member arguing that their departure from the synagogue was a change of religious affiliation. The third-party neutral court would then have to arbitrate the matter. This violation of his or her First Amendment rights to free religion and the freedom to alter her beliefs. It doesn’t matter if the ex-member has left their faith completely or just changed synagogue affiliation. This argument might be valid regardless. Bixler.
The court says precious little on this front—although addressing future applications of the doctrine is not necessarily something one would have expected. That being said, it is worth noting that some of the language in the court’s opinion noted above—that the claims implicated in Bixler did not stem from a contractual relationship—might be used to limit the decision’s application to cases where parties sought arbitration of future tort claims that were not related to an underlying contractual relationship. This could mean that the Church of Scientology would not be treated the same as the synagogue due. Bixler.
Despite the lack of analysis, however BixlerIt is difficult to say. Like much of the decision, it is all a bit quick given the kind of far-reaching—and unanticipated—consequences that the decision may have.