In
Johnson v. Antioch United Holy Church, Inc., (NC App., Aug. 16, 2011), a North Carolina appeals court reversed a trial court's dismissal of lawsuit against a church. The trial court had held that it was constitutionally precluded from deciding the case because the suit-- alleging violations of North Carolina's Non-Profit Corporation Act and alleging intentional infliction of emotional distress-- involved an internal church governance dispute. However the court of appeals concluded that the claims could be resolved under neutral principles of law. It said in part:
Plaintiffs allege Defendants have wasted corporate assets without proper authority under Antioch’s bylaws, caused church assets to inure to the benefit of private individuals, and failed to keep appropriate records of its activities. Plaintiffs further allege these acts have threatened the church’s tax-exempt status and exposed Plaintiffs to liability for federal and state income tax for funds received by Antioch. Whether Defendants’ actions were authorized by the bylaws of the church in no way implicates an impermissible analysis by the court based on religious doctrine or practice....
Plaintiffs’ second claim alleges common law intentional infliction of emotional distress against McGlenn when McGlenn delivered to Wallace a letter stating that Wallace was no longer a member of Antioch. While a court cannot determine whether a church’s grounds for membership are spiritually or doctrinally correct, ... applying a secular standard of law to secular tortious conduct by a church is not prohibited by the Constitution.
The appeals court also reversed the trial court's imposition of Rule 11 sanctions on plaintiff.
