Hutterville Hutterian Brethren, Inc. v. Sveen, No. 13-3160 (8th Cir. 2015)
Annotate this CaseHutterites disavow individual property ownership for a communal lifestyle. The Hutterian Church has three conferences. South Dakota’s Hutterville Colony belonged to the Schmiedeleut Conference. Hutterville’s nonprofit corporation operates a communal farm, conducts business, and owns all property. In 1983, when the Colony formed, Kleinsasser led Schmiedeleut Conference. Several ministers repudiated Kleinsasser’s leadership in 1992 and followed Wipf. Colonies following Wipf ratified a new constitution. Kleinsasser’s colonies did not. Each group claimed that it was the true Schmiedeleut. Waldner, Hutterville’s ecclesiastical leader, its corporation’s president, and a director, was loyal to Kleinsasser. The complaint alleges that through “sham” corporate meetings in 2008-2009, Wipf faction members were elected to replace Waldner faction officers and directors. Each faction conducted business in the name of the company. In 2009 a state trial court determined that Wipf faction members were the duly elected directors and officers. Waldner and Kleinsasser excommunicated Wipf faction members. State courts rejected a challenge to the excommunication, reasoning that control of the corporation could not be determined without addressing religious questions. In a second state action, the supreme court reversed appointment of a receiver, concluding that even corporate dissolution is beyond secular jurisdiction. As the factions were contesting the receiver’s accounting, the Waldners filed suit under RICO, as individuals and in their “official” capacities as purported directors and officers, claiming that attorneys worked with the Wipf faction to “wrest control” of Hutterville, and that the receiver was part of the plan. The district court dismissed, reasoning that official capacity standing required knowing who truly controls Hutterville, which involves religious disputes; individual claims for property damages claims were dismissed based on the renunciation of individual property. The Eighth Circuit affirmed.
Court Description: Civil case. In this dispute over control of the Hutterville Hutterian Brethern, Inc., a South Dakota religious nonprofit corporation, the key issue is who rightly controls Hutterville, a question which cannot be answered without determining issues such as church membership, the validity of excommunications and the proper designation of the "true Schmiedeleut," all of which are questions impermissible for secular courts; having argued to the South Dakota Supreme Court that the issues were church governance issues not subject to resolution in secular courts, plaintiffs may not now argue that the issues are subject to resolution in federal court. [ January 12, 2015
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