In Hutterville Hutterian Brethren, Inc. v. Waldner, (SD Sup. Ct., Nov. 17, 2010), the South Dakota Supreme Court held that it lacks jurisdiction over a dispute between two factions of the Hutterian Church, both claiming control of the non-profit corporation that controls the Hutterville Colony. The dispute grew out of a 1992 schism in the church, after which each faction tried to obtain control of the corporate governance of Hutterville. The court held that the governance question depends on resolving a dispute over membership in and expulsion from the "true" Hutterite by the "true" church elders. The First Amendment shields such issues from scrutiny by civil courts. Religious issues pervade the dispute, and corporate governance cannot be decided without extensive inquiry into religious doctrines and beliefs.
Meanwhile the state circuit court judge whose opinion was affirmed by the Supreme Court has now held that the Hutterville colony dispute should be dealt with by dissolving the colony, selling off its assets and distributing the proceeds to its members. That decision was handed down one day before release of the Supreme Court's opinion. Reporting on the decision, KELO Land Television quotes one of the attorneys involved as saying that the dissolution decision will probably not be affected by the Supreme Court's holding. Colony members still have the option of reconciling and continuing to live communally.
