WASHINGTON (BP)–The U.S. Supreme Court let stand a ruling preventing a bankruptcy trustee from recovering contributions to a church and, in the process, undergirded what remained of the Religious Freedom Restoration Act.
The high court rejected a request to review a 1998 federal appeals court decision in favor of a Minneapolis church that had refused to surrender tithes given by a married couple who later filed for bankruptcy. In so doing, the court allowed to stand the Eighth Circuit Court of Appeals’ ruling that RFRA, even though it was largely struck down in 1997 by the Supreme Court, still provides protection against a federal law such as the bankruptcy code.
The case, Christians, Trustee v. Crystal Evangelical Free Church, initiated in the early 1990s a series of efforts by judges and trustees throughout the country to recover tithes and offerings from churches that had received them from members who later filed for bankruptcy.
The cases resulted in this year’s passage of the Religious Liberty and Charitable Donation Protection Act. President Clinton signed the bill into law in June shortly after Congress adopted it. The new law amended the federal bankruptcy code to:
— prohibit a federal bankruptcy judge from forcing a church or charity to return past gifts of as much as 15 percent of the bankrupt person’s gross income. It would protect a larger percentage if the debtor has demonstrated a pattern of contributing more than 15 percent.
— allow a person who has filed for Chapter 13 bankruptcy to include tax-exempt contributions of as much as 15 percent of his gross income in a budget for debt repayment.
The bankruptcy code previously permitted a person who has filed for bankruptcy to budget moderately for entertainment, including gambling and alcohol, but increasingly courts had ruled a debtor may not budget money for a tithe to his church, because such giving does not provide a “reasonably equivalent value.”
While the door essentially is closed on creditors’ attempts to seize offerings from churches, the Eighth Circuit and Supreme Court actions fortified the limited reach of RFRA.
RFRA, which was enacted in 1993, restored the high standard the government had to meet before it could “substantially burden” the free exercise of religion. The government had to demonstrate it had a “compelling” reason for such action. In 1997, the Supreme Court struck down RFRA, ruling it exceeded Congress’ power. The Clinton administration, some members of Congress and religious liberty advocates contended RFRA still applied to federal law. The Eighth Circuit agreed in its ruling in the Crystal church case in April of this year.
“So, RFRA still has a lot of punch,” said Steven McFarland, director of the Christian Legal Society’s Center for Law and Religious Freedom, after the Oct. 5 refusal of the case by the high court. “Paying debts is important, but keeping the government’s hand out of the offering plate is even more important.”
The Christian Legal Society filed four friend-of-the-court briefs in support of the Minneapolis church, including one on behalf of the coalition that supported RFRA’s passage. The Southern Baptist Ethics & Religious Liberty Commission signed onto each of those briefs.
“We can be grateful for the Supreme Court’s position in deciding not to review the Crystal case, not only because of the implications with regard to bankruptcy proceedings but also with regard to the application of RFRA in federal jurisdictions,” said Will Dodson, the ERLC’s director of public policy. “Nevertheless, it needs to be understood that the Supreme Court’s treatment of religious liberty remains in need of serious attention.”
After the Minneapolis church was ordered by a state court in 1992 to return tithes from a couple, churches in states such as Colorado, Connecticut, Idaho, Kansas, Kentucky, Oregon, Pennsylvania and Texas faced actions by bankruptcy trustees. These included at least three Southern Baptist churches, Cedar Bayou Baptist Church, Baytown, Texas; First Baptist Church, Klamath Falls, Ore.; and Midway Southern Baptist Church, Wichita, Kan.
Reported by Tom Strode.
