Thomas H. Segars

West Virginia made history last week when it filed a new lawsuit about the sexual-abuse scandal embroiling the Roman Catholic Church. The state attorney general is suing the Diocese of Wheeling-Charleston and its former Bishop for failing to protect children from priests and laity who had been credibly accused of sexual misconduct.

What makes this lawsuit novel—and of interest to this blog—is the legal theory on which it is based. This enforcement action is brought by the attorney general under West Virginia’s consumer-protection act.

The complaint accuses the church of making material misrepresentations and omissions “to consumers of its educational and recreational services”—namely Catholic pre-schools, schools, and camps. It recites details from a Diocesan website about a “Safe Environment Program” implemented in 2005 “to protect children and young people from being abused.” According to the complaint, however, the church did not always follow its Safe Environment Program. The complaint also alleges a litany of examples of Diocesan officials knowingly permitting adults accused of abuse to continue working with children.

From these allegations, West Virginia asserts two theories of liability: “Advertised Services Not Delivered” and “Failure to Warn of Dangerous Services.” The attorney general seeks injunctive relief, restitution, disgorgement, and statutory civil penalties.

The complaint contains some especially attention-getting language. For one, it alleges that the Diocese was intentional about its failure to warn of priests and teachers accused of sexual abuse and intended for students and parents to rely on that failure. It even labels the church’s educational and recreational services “inherently dangerous” for children. To the tens of thousands of alumni of these schools—and to their parents—it must be jarring to see the state describe their education in legal terms typically reserved for activities like blast mining or transporting radioactive material. See, e.g., Shaffer v. Acme Limestone Co., 524 S.E.2d 688, 699 (W. Va. 1999).

The complaint has only recently been filed, so it is too early to tell how it will fare. Nevertheless, the attorney general’s novel approach raises some obvious questions.

Does the court have subject-matter jurisdiction?

The Diocese likely will raise a subject-matter-jurisdiction defense. The First Amendment generally prohibits civil courts from adjudicating ecclesiastical concerns. See, e.g., Presbyterian Church v. Mary Elizabeth Blue Hull Mem’l Presbyterian Church, 393 U.S. 440, 449 (1969).

Although West Virginia courts recognize this prohibition on becoming entangled in “purely ecclesiastical or spiritual practices,” they “have not hesitated to find jurisdiction to protect property and contractual rights, even when one of the parties is a church or religious society.” Gillespie v. Elkins S. Baptist Church, 350 S.E.2d 715, 718 (W. Va. 1986).

On one hand, West Virginia’s complaint explicitly recites facts about church hierarchy and the church’s internal policies and procedures for dealing with accused priests and operating religious schools and camps. These matters could be considered ecclesiastical in nature and, therefore, out of bounds for judicial review.  See, e.g., Rayburn v. Gen. Conference of Seventh-Day Adventists, 772 F.2d 1164, 1167–68 (4th Cir. 1985). On the other hand, a consumer’s relationship with the Diocesan services could be considered fundamentally contractual in nature—especially when the consumer is not even a member of the church.

North Carolina law is similar. When churches are sued in a North Carolina state court, subject-matter jurisdiction exists where the court may resolve the dispute applying only “neutral principles of law.” Ann Anderson, UNC Sch. of Gov’t, Courts, Church Disputes, and the First Amendment (2016). If a dispute requires a court to weigh in on ecclesiastical matters like issues of internal governance, subject-matter jurisdiction will not exist. In her helpful article on this subject, UNC School of Government Professor Ann Anderson discusses how this principle applies in several circumstances. While North Carolina courts generally do not have jurisdiction to hear cases involving disputes about church property or the use of church funds, they do have jurisdiction to hear cases alleging the church’s negligent supervision over sexual misconduct. See Smith v. Privette, 128 N.C. App. 490, 494–95, 495 S.E.2d 395, 398 (1998). By characterizing sexual-abuse allegations in religious education as matters of consumer protection, West Virginia’s attorney general attempts to walk a tightrope between these two concepts.

What is the significance of the fact that this was brought by the attorney general?

Like most consumer-protection statutes, West Virginia’s statute provides for both a private right of action and enforcement by the attorney general.

At first glance, it might seem unusual that the attorney general, rather than the parents who paid tuition to West Virginia’s Catholic schools, are suing the Diocese. The parents, after all, should be easy to identify and able to sue in their own right.

One explanation for this is the requirement that a plaintiff show actual injury. In West Virginia, actual injury for a private plaintiff means “an actual out-of-pocket loss.” For an unfair-trade-practices claim based on a concealment or omission of information, the private plaintiff must also show a causal connection between the out-of-pocket loss and the concealment or omission. For consumers not personally affected by any alleged sexual misconduct, this would seem quite difficult to show.

State attorneys general, on the other hand—like the FTC bringing a section 5 claim—often do not need to prove consumer reliance or an injury to the consumer.  See, e.g., FTC v. Freecom Commc’ns, Inc., 401 F.3d 1192, 1203 (10th Cir. 2005). Instead, attorneys general can take preemptive action against allegedly unfair or deceptive practices. In West Virginia, for instance, the attorney general can obtain temporary injunctive relief based on a “reasonable cause to believe that the [defendant] is engaging or is likely to engage in conduct sought to be restrained.”

Is religious education “in the conduct of any trade or commerce”?

Similar to section 75-1.1’s “in or affecting commerce” requirement, West Virginia’s statute applies only to unfair or deceptive acts or practices “in the conduct of any trade or commerce.”

The provision of private education in exchange for tuition might, at first blush, seem to qualify as “trade or commerce.” Decisions applying the similar North Carolina law, however, suggests that the answer may not be so clear.

In McClean v. Duke University, the U.S. District Court for the Middle District of North Carolina dismissed a section 75-1.1 claim against a private university. The McClean court recognized that a school can perform commercial functions (like selling textbooks or apparel), but that when schools “educate students, they perform a fundamentally different role.” The court concluded that “[w]here the only relationship at issue is the university-student relationship, and there is no ‘practice that was deceptive to the general public,’ there can be no consumer-oriented deception of the type that [the statute] is intended to prevent.”

On the other hand, a few cases have allowed section 75-1.1 claims against private schools to proceed past the pleadings. See, e.g., Barchiesi v. Charlotte Sch. of Law, LLC, No. 3:16-CV-00861 (W.D.N.C. Aug. 17, 2017); Elmendorf v. Duke Univ., No. 1:14CV697 (M.D.N.C. July 7, 2015) (leaving open possibility of a section 75-1.1 claim “based  on conduct . . . to attract students  or . . . false statements made to induce students to enroll”).

The West Virginia case concerns the relationship between the Diocese and the “consumers of its educational and recreational services.” Those consumers, as opposed to the general public, are the parties allegedly deceived by the Diocese. If the reasoning in McClean applies, a court might conclude that the West Virginia statute was never intended to reach that relationship.

Is religious education categorically excluded or exempted from the scope of the statute?

The Catholic clergy’s and educators’ status as learned professionals may be significant, too. Unlike section 75-1.1, West Virginia’s statute does not contain an express carve-out for members of a learned profession. If this complaint were brought in North Carolina, we might expect the Diocese to argue that the claim is barred by the learned-profession exemption, because it involves clergy.

Theology is, after all, one of the three traditional learned professions.  See, e.g., Patronelli v. Patronelli, 360 N.C. 628, 630, 636 S.E.2d 559, 561 (2006). Although we are unaware of any case applying this exemption to a claim involving the clergy, a North Carolina Attorney General opinion issued shortly after the exemption was added to the statute and scholarship on the subject suggest that it would apply.  In fact, the unfair-trade-practices statutes of at least two jurisdictions (Maryland and the District of Columbia) explicitly exempt clergy from their scope.

Will the West Virginia case start a trend for similar cases?

West Virginia is the first state to use a law on consumer protection to address allegations about sexual abuse in religious education, but it may not be the last. As noted above, cases like the one filed in West Virginia might find state-specific hurdles in other jurisdictions—like the learned-profession exemptions that exist in many states. Whether this lawsuit will start a new chapter in the history of litigation over sexual abuse in the church remains to be seen.

We will continue to monitor the case and report on developments of interest to our readership. If you have thoughts about how this unique application of consumer-protection law may play out or areas that you would like to have further analyzed, please share them with us.

Author: Tom Segars