Dermody v. Presbyterian Church (U.S.A.)

Churches must have the right to follow their own religious rules, even if some church members disagree with how those rules apply to them. In this case, a disgruntled minister who had failed a church financial audit, threatened that right by asking the court to override the church’s enforcement of its internal financial guidelines against him.

The Presbyterian Church (U.S.A)’s “1001” movement” is a mission project aimed at creating 1,001 new worshiping communities. Under watch of the project executive, a church minister, two employees violated church financial policy when they transferred $100,000 from the church’s accounts into a private entity they had set up. Although the employees did not intend to misuse the money and the money was ultimately recovered, the minister was cited by the church for his failed oversight. The Presbyterian Church immediately published the audit findings on its website and detailed the corrective measures it was taking. Although the church initially never published the minister’s name, he publicly admitted responsibility and then sued the church for defamation.

The minister’s lawsuit was filed in May 2015, and sought monetary compensation for the church’s allegedly defamatory statements. Last September, the trial court denied relief because the church’s statements appeared to be true and the First Amendment barred the court from second-guessing the church’s decision to enforce its standards of ethical conduct for religious leaders. The minister then appealed to the Kentucky Court of Appeals.

Becket filed a friend-of-the-court brief in June 2016 on behalf of the church, arguing that, under the Free Exercise and Establishment Clauses of the First Amendment, courts cannot interfere with churches’ statements to their members about the conduct of their religious leaders. In July 2017, the Kentucky Court of Appeals ruled in favor of the Presbyterian Church (U.S.A), protecting the right of churches to operate their internal affairs without government intrusion. The church was represented by Stoll Keenan Ogden PLLC.