IN THE SUPREME COURT OF THE STATE OF NORTH DAKOTA

State of North Dakota ex rel. Supreme Court No. 990212 Heidi Heitkamp, Cass County No. 96-88 Attorney General, Plaintiff-Appellee, vs. Family Life Services, Inc., dba Family Life Credit Services, et al. Defendants-Appellants.

____________________________________________________________

MOTION FOR PARTIAL STAY OF JUDGMENT

PENDING APPEAL ____________________________________________________________

Appellant Family Life Services, Inc. ("FLS") moves the court for a partial stay of

the judgment entered May 7, 1999 in this case. The court is asked to stay

paragraphs 2, 3, 9 and 10 of the judgment which remove the board of directors of

Family Life Services and provide for selection of a new seven-member board.

This motion is supported by the attached Brief in Support of Motion for Partial

Stay of Judgment Pending Appeal and all the other papers in this case. Respectfully submitted this 17th day of September, 1999. ________________________________ Peter B. Crary Attorney at Law N.D. Bar No. 3028 1201 12th Avenue North Fargo ND 58102 (701) 280-9048

IN THE NORTH DAKOTA SUPREME COURT State of North Dakota ex rel. Supreme Court No. 990212 Heidi Heitkamp, Attorney General, Cass County Civil No. 96-88 Plaintiff-Appellee vs. Family Life Services, Inc., dba Family Life Credit Services, et al. Defendants-Appellants.

__________________________________________________________________

BRIEF IN SUPPORT OF MOTION FOR PARTIAL STAY OF JUDGMENT PENDING APPEAL

__________________________________________________________________

Peter B. Crary Attorney at Law

N.D. Bar No. 3028 1201 12th Avenue North

Fargo ND 58102 (701) 280-9048

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The Establishment Clause prohibits government from abandoning secular purposes to favor the adherents of any sect or religious organization.

Gillette v. United States 401 U.S. 437, 450 (1971)

______________ [W]hat imprudence and indiscretion is it in the most common affairs of life, to conceive that emperors, kings and rulers of the earth must not only be qualified with political and state abilities to make and execute such civil laws which may concern the common rights, peace and safety (which is work and business, load and burden enough for the ablest shoulders in the Commonweal) but also furnished with such spiritual and heavenly abilities to govern the spiritual and Christian commonweal . . .

Engel v. Vitale 370 U.S. 421, 434, n.20 (1962)

quoting from

Roger Williams'

The Bloody Tenet,

of Persecution

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CONTENTS

I. Background . . . . . . . . 1 II. The Judgment . . . . . . . 4 III. Likelihood of Success on Appeal . . . . . 7 A. Establishment Clause . . . . . 7 1. Court appointment of ministers . . . 7 a. Political divisiveness . . . 7 b. Persecution of the disfavored . . 10 c. Lack of neutrality . . . . 11 d. Union of church and state . . . 12 2. Agents of ministry choose board . . . 16 a. Religious qualifications . . . 17 b. Reconfiguring of ministry hierarchy . 17 B. Free Exercise Clause . . . . . 18 1. Intrusion into ministry governance . . 18 2. The ministerial exception . . . . 23 3. Smith does not apply . . . . 26 a. FLS has no religious objection to obeying North Dakota credit counseling law . 26 b. Smith does not affect the ministerial exception . . . . . 28 c. Hybrid rights . . . . . 29

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d. State constitution . . . . 29 C. Freedom of Association . . . . . 29 D. Summary . . . . . . . 30 IV. Irreparable Injury . . . . . . . 30 A. Loss of Religious Rights and Ministry Assets . . 30 B. Loss of Fruits of Appeal: Mootness . . . 32 V. The Public Interest . . . . . . . 34 A, Protection of Constitutional Rights . . . 34 B. Avoidance of Multiple Changes of Administration . 35 VI. Conclusion . . . . . . . . 37

Rule 8(a) of the North Dakota Rules of Appellate Procedure provides that an

application for stay of judgment pending appeal “must ordinarily be made in the

first instance in the trial court.” “[I]f the trial court has denied an application,” a

subsequent motion may be made to the Supreme Court. The same motion now

being presented to the Supreme Court was submitted to the trial court on June 17,

1999. Dkt. No. 1791-1794. The court denied the motion on July 21, 1999. Dkt.

No. 1822. Affidavit of Peter B. Crary, Exhibit E. Therefore, it is now appropriate

to renew the motion before the Supreme Court.

The criteria for a stay of a civil judgment pending appeal are:

(a) a strong showing that the appellant is likely to succeed on appeal;

(b) that unless the stay is granted, the appellant will suffer irreparable injury;

(c) that no substantial harm will come to any party by reason of the issuance of

the stay; and

(d) that granting the stay will do no harm to the public interest. Bergstrom v.

Bergstrom, 271 N.W.2d 546, 549 (N.D. 1978).

I. Background

In September, 1981 the Fargo Women’s Health Organization, an abortion

provider, opened for business in Fargo, North Dakota. The following spring

Darold and Pat Larson opened a crisis pregnancy center in their home to minister

to abortion-prone women. A small ad in the local newspaper -- “Abortion? Come

see us first” -- brought a flood of calls. Their front porch, remodeled as an extra

room, served as Pat’s office. The living room was the waiting room. Free

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pregnancy tests were given and also Biblical counseling on the sanctity of life and

reserving sex for marriage. Darold and Pat were closely associated with Dr. David

and Judy Perry in their pro-life work. Dr. Perry was an OBGYN and a devout

Christian. The Perry’s regularly opened their home to pregnant women in need of

housing and nurturance. They also picketed at the Fargo Women’s Health

Organization, as did the Larsons. In November, 1984, the Perry’s were killed in a

highway accident in Minnesota. After the funeral Darold Larson began a campaign

to open a maternity home in Fargo as a memorial to their lives and to carry on the

pro-life work they began. In 1986, after obtaining a maternity home license from

the state of North Dakota, the Perry Center opened in a frame house on Main

Avenue in Fargo. Shortly thereafter, Darold began Christian Family Life Services

(“CFLS”), an adoption agency that placed children in Christian homes.

Thus, by the latter part of the 1980’s the Larsons had established in the city of

Fargo an integrated pro-life Christian ministry comprised of a crisis pregnancy

center, a maternity home and an adoption agency. The common underpinning of

each agency and all of them collectively was to minister the gospel of Christ to

young women facing a crisis pregnancy and to provide them also practical

assistance in giving life to their children and choosing adoption or the

responsibilities of parenting. Although there were other pro-life organizations in

North Dakota, the Larson’s ministry was unique in its scope -- an integrated

Christian pro-life social service ministry. No other pro-life ministry in the state

operated a maternity home. Trial Transcript (hereinafter “T”) at 1260-1301.

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In 1988 Darold Larson founded Help and Caring Ministries (“HCM”) as an

umbrella agency to provide fundraising and administrative services to all the

agencies. HCM also put on Christian pro-life events in the community, bringing in

such national speakers as Allan Keyes, Gary Bauer, Franky Schaeffer, and others.

In the process of counseling with young women, Darold discovered that they often

had financial problems. From small beginnings, he developed a Christian credit

counseling agency called Family Life Credit Services. Like the other agencies

under the Help and Caring umbrella, it provided practical help to people facing a

crisis in their lives while at the same time teaching them a gospel approach to their

problems. Originally a part of HCM, FLS, because of its growth in size, was

separately incorporated in 1989. In time FLS became the financial centerpiece of

the ministry, contributing substantial funds to the other mercy ministries. All the

agencies, though separately incorporated, operated under the overall spiritual and

administrative leadership of Darold Larson. HCM expressed its direction of the

allied agencies through management agreements it held with each one. The HCM

Constitution, adopted in 1986, stated the guiding purpose of the overall ministry:

to promulgate the gospel of Jesus Christ, to establish a Biblical form of ministry

government, to hold Christian meetings, and to minister to people in need

including those entangled in addictions, facing a crisis pregnancy, and

experiencing financial problems. Dkt. No. 1103, Exhibit 153, Article I. The

Constitution is the governing document for the entire ministry. Id., Article I(9), ¶

2. Crary Affidavit, Exhibit G.

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II. The Judgment

The state’s complaint against the ministry falls under two heads: that funds in

the credit counseling agency were used improperly, and that the ministry overall

was “defectively organized” because Darold Larson maintained overall control of

its operations. On the first point, there is little dispute about the facts or the law,

nor has there been any since the inception of the case. In May, 1996, and

subsequently FLS offered to settle this case for an appropriate injunction and/or

fine pursuant to NDCC 13-07, the state credit counseling law. See, e.g., Pretrial

Conference Memorandum dated February 13, 1998 at 11 (“Defendants are

agreeable to fashioning a permissible remedy”). Dkt. No. 686. The State, however,

rejected all settlement offers because it had a broader objective in the case than

correcting violations of law. Its objective, accomplished in the judgment, was to

remove the board of directors of FLS, have the court appoint an “independent”

board, and sever this revenue-producing agency from the larger pro-life ministry

of which it was a part.

This purpose is achieved in the judgment. See Crary Affidavit, Exhibit D. To

preserve the admitted religious character of FLS, the court reserved three positions

on its remade Board of Directors for appointment by the Fargo-Moorhead

Evangelical Ministerial Association (“Ministerium”). Thus the court has delegated

to a religious body its own claimed power to appoint board members for FLS. The

remaining positions on the court-constituted board have been allotted to the

employees and branch offices of FLS, again on religious grounds. By so doing the

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court has additionally inverted the ministry hierarchy, making the agents of the

ministry its principals. See “Defendant Family Life Services synopsis of the record

on court appointment of evangelical ministers and other ‘sufficiently religious’

persons to select the board of Family Life Services” (hereinafter “Synopsis”) for a

detailed presentation of the ongoing entanglement of the trial court in these

quintessentially religious decisions.

The ultimate issue for appellate determination is whether, assuming state law

permits the removal and appointment of the board of FLS (a matter not conceded),

the federal and state clauses on religious freedom and freedom of association

permit such an action. A subsidiary question is whether or not the court is required

to apply a compelling interest/least restrictive means test to its remedy. Finally, a

significant establishment question arises from the court appointing the board of a

Christian ministry and delegating that power in part to a religious association,

namely the Ministerium.

FLS is likely to succeed on appeal in showing that the court has exceeded its

authority in (1) both removing and appointing the entire board of directors of FLS,

(2) completely severing FLS from participation in the larger Christian pro-life

ministry to which it belonged, and (3) employing its own sense of religiosity in

selecting the FLS board. Because the new board is completely unrestricted by the

court in its expenditure of FLS funds, the surplus revenue of the ministry could be

dissipated prior to conclusion of the appeal. As of July 30, 1999, after payment of

over $104,616.11 to the Attorney General for fees and expenses, FLS had

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$769,451.23 in savings accounts. Dkt. No. 1848. These funds should at a

minimum be frozen pending the outcome of this appeal to ensure the effectiveness

of the Supreme Court’s judgment. If the court-appointed board dispenses these

funds prior to the outcome of the appeal, there is no practical way they could be

recovered. It would be impossible to sue to recover the funds because they would

have been disbursed under court authority, thus invoking immunity. It would also

be exceptionally unseemly for FLS to be put in the position of suing, for example,

the United Methodist Church, to recover funds disbursed to purchase a new wing

for the church or Youth for Christ for funds disbursed to hire additional staff.

Additionally, the judgment does not limit the court-appointed board in its

management of FLS or capacity to alter the bylaws. Therefore, the ministry may

also be irreparably harmed by hiring of personnel and setting of policies which are

antithetical to the purposes of the ministry or inadequate to fulfill them. Finally,

the mercy ministries traditionally associated with FLS under the umbrella of Help

and Caring Ministries are experiencing financial difficulties which should be the

first charge on FLS revenues. The court-appointed board is under no obligation to

meet these needs. Apart from the irreparable harm that FLS may experience from

uncontrolled disbursement of its assets pending outcome of the appeal is the loss

of religious freedom attendant upon having its governing structure redefined and

populated by a state court. Such loss of freedom, even for brief periods of time, is

irreparable harm. Elrod v. Burns, 427 U.S. 347, 373 (1976).

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III. Likelihood of Success on Appeal

Because the judgment clearly violates the establishment clause and free

exercise clauses of both the state and federal constitutions, FLS is likely to

succeed on appeal.

A. Establishment Clause

The State may not place its imprimatur upon a particular religion, delegate its

civil powers to a religious organization or fuse together the civil and religious

functions. The court’s scheme for appointing the board of directors of FLS does all

three.

1. Court appointment of ministers

The district court has designated the Ministerium, an unambiguously religious

association of evangelical churches, to appoint three members to the FLS board.

The unconstitutionality of this approach is evidenced by the voluminous case law

which forbids preferential treatment to any or all religions, prohibits government

from delegating its powers to religious bodies, and decries the attendant evil of

entangling religious bodies in political strife.

a. Political Divisiveness

The potential pitting of ministry against ministry by the state is “one of the

principal evils against which the First Amendment was intended to protect,”

namely, “[p]olitical fragmentation and divisiveness on religious lines.” Lemon v.

Kurtzman, 403 U.S. 602, 623 (1971). Churches not granted the light of the state’s

favor in dividing the assets of a disfavored ministry may seek influence in the

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political process to insure themselves a place at the table. Secular groups may

wrestle politically with the favored churches, wondering why they are not equally

entitled to a portion of the spoils.

What is at stake as a matter of policy is preventing that kind and degree of government involvement in religious life that, as history teaches us, is apt to lead to strife and frequently strain a political system to the breaking point.

Walz v. Tax Commission, 397 U.S. 664, 694 (1970) (Opinion of Harlan, J.). “The

potential divisiveness of such conflict is a threat to the normal political process.”

Lemon v. Kurtzman, 403 U.S. at 622. “In this situation, where the underlying issue

is the deeply emotional one of Church-State relationships, the potential for

seriously divisive political consequences needs no elaboration.” Committee for

Public Education & Religious Liberty v. Nyquist, 413 U.S. 756, 797 (1973).

[C]ompetition among religious sects for political and religious supremacy has occasioned considerable civil strife generated in large part by competing efforts to gain or maintain the support of government.

Id. at 796. “Only anguish, hardship and bitter strife result when zealous religious

groups struggle with one another to obtain the Government’s stamp of approval.”

Lee v. Weisman, 505 U.S. 577, 606 (1992) (Blackmun, J., concurring).

The danger of inciting conflict between religious groups for the government’s

favor in dividing the assets of disfavored ministries carries the same potential for

sectarian strife as does direct government funding of religious institutions. The

district court’s judgment is an invitation for churches to seek the assistance of state

law enforcement in cannibalizing disfavored sects. The Establishment Clause does

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not permit the State to be such a cause of division in the body of Christ. By

selective prosecution of unwanted sects and distribution of their assets to

“reputable” churches, the State can eventually consolidate the religious life of its

jurisdiction into a few favored entities subservient to the hand that feeds them.

“The dominating group will achieve the dominant benefit; or all will embroil the

state in their dissensions.” Engel v. Vitale, 370 U.S. 421, 444 (1962) (Douglas, J.,

concurring), quoting from Madison’s Memorial and Remonstrance against

Religious Assessments.

When the governmentally-favored class is broad and not defined by religion,

e.g., a tax exemption statute that encompasses all nonprofit organizations, the

potential for divisiveness is minimal. Walz v. Tax Commission, supra. “[T[he

narrowness of the benefited class,” however, is an “important factor” in evaluating

“potential divisiveness.” Nyquist at 794. In the school aid cases, government

benefits flowed to all non-public schools. They were not designated solely for the

aid of a particular denomination or religious association. Yet, because most non-

public schools were religious in orientation, the primary effect of the legislation

was to aid religion or to entangle the state with the church in performing the

educational mission. For that reason many such programs were invalidated as

offending the Establishment Clause. How much more is this true when a court

grants participation in the control of the assets of a particular Christian ministry to

one and only one religious association in a particular community in the state!

Where the benefited class is a single religious association, the “risk of politicizing

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religion,” Walz at 695 (Harlan, J.), is perforce greatly magnified.

b. Persecution of the Disfavored

The flip side of established religion is persecution of the unestablished.

“[G]overnmentally established religions and religious persecution go hand in

hand.” Engel v. Vitale, 370 U.S. at 432. This case unfortunately displays both

sides of the coin: government favoritism to a certain religious association (the

Ministerium) and unrelenting prosecution of another (HCM/FLS). Former Chief

Judge of the Eighth Circuit, Donald Lay, in a ringing dissent, cited Edmund

Cahn’s statement that separation of church and state is essential to preserve the

independent voice of the church as a check upon state power. “[T]oday more than

ever before, the government of the most powerful democracy on earth needs the

critical scrutiny of independent churches, their visions, exhortations, and

unsparing rebukes.” Quoted in Ceniceros v. Board of Trustees, 66 F.3d 1535, 1550

(9th Cir. 1997) (Lay, J., dissenting). When the church is too eager to receive

benefits from the government, it loses this power of independent rebuke to “defy

the currents of popular opinion.” Id. Is it mere coincidence that the court’s

judgment implementing the State’s program silences the voice of the most strident

pro-life ministry in the state while delivering its assets to milquetoast evangelicals

whose opposition to abortion is scarcely discernible in the public dialogue? Isaiah

56:10-11. By seizing and redistributing its assets, the court has muffled the voice

of Help and Caring Ministries. Buckley v. Valeo, 424 U.S. 1, 19 (1976), cited in

State ex rel. Heitkamp v. Family Life, 1997 ND 37, ¶ 15, 560 N.W.2d 526.

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c. Lack of Neutrality

Even if there were no dire political potential in the court’s establishing the

Ministerium as a state-favored sect, the stark favoritism of this selection violates

the principal of neutrality central to the Establishment Clause. This court employs

a three-part test to examine Establishment Clause questions. The analysis is the

same under both federal and state constitutions.

First, the statute must have a secular legislative purpose; second its principal or primary effect must be one that neither advances nor inhibits religion; finally, the statute must not foster an excessive government entanglement with religion.

State v. Burckhard, 1998 ND 21, ¶¶ 10-11, 579 N.W.2d 194, quoting Lemon v.

Kurtzman, 403 U.S. at 612-13 (internal quotation marks and elisions omitted).

State power employed for the benefit of a particular religious association is

impermissible even if the effect of advancing religion is not intended. “The fullest

realization of true religious liberty requires that government . . . effect no

favoritism among sects[.]” Abington v. Schempp, 374 U.S. 203, 305 (1963)

(Goldberg, J., concurring). “We sponsor an attitude on the part of government that

shows no partiality to any one [religious] group . . .” Zorach v. Clauson, 343 U.S.

306, 313 (1952). An essential purpose of “constitutional neutrality” in interpreting

the religion clauses is “to insure that no religion be sponsored or favored[.]” Walz

at 669. “[G]overnment may not promote or affiliate itself with any religious

doctrine or organization[.]” Allegheny County v. ACLU, 492 U.S. 573, 590-91

(1989) (emphasis added). “The strictest command of the Establishment Clause is

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that one religious denomination cannot be officially preferred over another.”

Larson v. Valente, 456 U.S. 228, 244 (1982). “No state can pass laws which aid

one religion or that prefer one religion over another[.]” Id. at 246, quoting from

Everson v. Board of Education, 330 U.S. 1, 15 (1947).

The First Amendment mandates governmental neutrality between religion and religion. The State may not adopt programs or practices which aid or oppose any religion. This prohibition is absolute.

Id., quoting from Epperson v. Arkansas, 393 U.S. 97, 104, 106 (1968) (elisions

and quotation marks omitted).

The court’s selection of the Ministerium for special favor in controlling the

assets and governance of FLS violates the strict canon of “denominational

neutrality.” Id. The Catholic Church is also pro-life. Why was the Diocese of

Fargo not invited by the court to sit at the FLS banquet table? “When the

government puts its imprimatur on a particular religion, it conveys a message of

exclusion to all those who do not adhere to the favored beliefs.” Lee v. Weisman,

505 U.S. at 606 (Blackmun, J., concurring) (quotation marks and citation omitted).

What of non-evangelical Protestants? Lutherans make up a large proportion of the

population in the Fargo-Moorhead area. They were not invited. Neither were the

Fargo Hebrew Congregation or Temple Beth El. “The Establishment Clause . . .

certainly means at the very least that government may not demonstrate a

preference for one particular sect or creed[.]” Allegheny at 605.

d. Union of church and state

Even if the court had adopted a denominationally-neutral scheme for the

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governance of FLS, and had permitted all churches equally to propose members

for its governing board, the Constitution would still be offended. “Separation is a

requirement to abstain from fusing functions of Government and of religious sects,

not merely to treat them equally.” Abington v. Schempp, 374 U.S. at 219. “[T]here

shall be no concert or union or dependency one on the other.” Id. at 220.

Government may no more ally with all religions than it may favor any one in

particular. “[T]he mere appearance of a joint exercise of legislative authority by

Church and State provides a significant symbolic benefit to religion in the minds

of some by reason of the power conferred.” Larkin v. Grendel’s Den, 459 U.S.

116, 125-26 (1982). Even assuming that the court possesses the power to remove

and reappoint the board of directors of FLS, and completely to sever FLS from

any connection with HCM and its allied agencies, the court may not delegate that

equitable judicial authority to any religious organization or to all religious

organizations. “The Establishment Clause was intended to erect a wall of

separation between church and State.” Burckhard, ¶ 10 (citation omitted). “Here

that wall is substantially breached by vesting discretionary governmental powers

in religious bodies.” Larkin v. Grendel’s Den, 459 U.S. at 123. “[D]elegating a

governmental power to religious institutions inescapably implicates the

Establishment Clause.” Id. “Neither a state nor the Federal Government can

openly or secretly, participate in the affairs of any religious organizations or

groups and vice versa.” Everson at 16.

In Larkin, the court opined that delegation to churches of governmental power

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to deny liquor licenses granted them the discretion to use that power for religious

ends. Id. at 125. Thus, government power might serve religion, a result forbidden

by the Establishment Clause. In this case the court expects the Ministerium to

employ the authority granted to it for religious ends. The court has appointed an

association of churches to select a portion of the FLS board precisely, it is

claimed, to maintain its religious character. The constitutional violation is thus far

more egregious here than in Larkin. There is no pretense or intention on the part of

the court that the authority granted to the Ministerium “will be used exclusively

for secular, neutral, and nonideological purposes.” Id. No, indeed. It is the court’s

express purpose, prompted by the Attorney General, to maintain the religious

character of FLS through expressly religious appointments of its own choosing. If

this is not an establishment of religion, the term has no meaning.

In Board of Educ. of Kiryas Joel v. Grumet, 512 U.S. 687 (1994), the Court

examined a legislative scheme which set special school district boundaries to

coincide with an orthodox Jewish religious community. The court overturned the

law, stating flatly that government may not “deliberately delegate discretionary

power to an individual, institution, or community on the ground of religious

identity.” Id. at 699.

Where “fusion” is an issue, the difference lies in the distinction between a government’s purposeful delegation on the basis of religion and a delegation on principles neutral to religion, to individuals whose religious identities are incidental to their receipt of civic authority.

Id. In short, government may not identify recipients of governmental authority “by

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reference to doctrinal adherence[.]” Id. Employment of religious criteria by the

government results in “a purposeful and forbidden fusion of governmental and

religious functions.” Id. at 702. “The Establishment Clause prohibits government

from abandoning secular purposes to favor the adherents of any sect or religious

organization.” Gillette v. United States, 401 U.S. 437, 450 (1971).

Although the court is in this case aiding only a single religious association, the

Ministerium, the constitutional offense is not diminished. As the Supreme Court

stated in Grumet:

Here the benefit flows only to a single sect, but aiding this single, small religious group causes no less a constitutional problem than would follow from aiding a sect with more members or religion as a whole, and we are forced to conclude that the State of New York has violated the Establishment Clause.

Id. at 705. Likewise, Judge Foughty in exercising state authority as a judge has

violated the Establishment Clause by delegating his supposed equitable authority

to appoint the governing board of FLS to the Ministerium. The principle of illegal

delegation of judicial authority has been recognized by the North Dakota Supreme

Court, though not in the context of a fusion of religious and secular functions.

State v. Nelson, 417 N.W.2d 814 (N.D. 1987) (judge may not delegate sentencing

authority to addiction evaluator); State v. Saavedra, 406 N.W.2d 667 (N.D. 1987)

(judge may not delegate sentencing authority to probation officer).

Government promotes religion as effectively when it fosters a close identification of its powers and responsibilities with those of any -- or all -- religious denominations as when it attempts to inculcate specific religious doctrines.

----------

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This effect -- the symbolic union of government and religion in one sectarian enterprise -- is an impermissible effect under the Establishment Clause.

Grand Rapids School District v. Ball, 473 U.S. 373, 389, 392 (1985).

The objective of the Establishment Clause “is to prevent, as far as possible, the

intrusion of either [Church or State] into the precincts of the other.” Lemon v.

Kurtzman, 403 U.S. at 614.

[T]he core rationale underlying the Establishment Clause is preventing a fusion of governmental and religious functions. The Framers did not set up a system of government in which important, discretionary governmental powers would be delegated to or shared with religious institutions.

Larkin at 126-27 (citations and quotation marks omitted). The court noted, as

stated above, “the danger of political oppression through a union of civil and

ecclesiastical control.” Id. at 127, n.10. The court’s intimate, prolonged, and secret

off-the-record negotiations with the Ministerium to select board members for FLS,

Synopsis at 9-15, are completely unconstitutional, redolent of a time in history

when religion was the handmaiden of the state and the heavenly authority served

the earthly. Such arrangements, though they may have existed in other times and

places, are anathema to the governing documents of the American polity.

2. Agents of ministry choose majority of board

The court has designated the branch offices of FLS to appoint three members

to the board and the employees one member. This part of the court’s program also

violates the Establishment Clause because (1) the employees and branches were

chosen because of their religious qualifications and (2) a civil court may not

17

reconfigure the governance of a religious body to its liking.

a. Religious Qualifications

The Attorney General first raised the argument that the employees and branch

offices of FLS were sufficiently religious to sit on its board. “[B]ecause the vast

majority of FLS employees and branch offices entered into their relationship with

the nonprofit company prior to commencement of this action, they have already

met the religious qualifications Defendants claim as a prerequisite to association

with the organization.” Synopsis at 3. The court adopted this argument in its ruling

from the bench, finding the branch offices and employees to be “sufficiently

religious” to serve on the board precisely because they had been chosen by Darold

Larson and hired by FLS. Id. at 5-7. By applying religious criteria to the non-

Ministerium members of the board, the court violates the purpose and effects

prongs of the Lemon test, as adopted by this Court in Burckhard.

b. Reconfiguring of Ministry Hierarchy

A civil court may not redistribute power within a religious organization.

“[S]hifting the balance of power between the laity and the central ecclesiastical

authority” is impermissible. Church of Scientology v. City of Clearwater, 2 F.3d

1514, 1536 (11th Cir. 1993). “The interposition of official authority on behalf of a

church’s laity is . . . offensive to the Establishment Clause[.]” Id. The branches

and employees were chosen for the positions they fill, not to sit on the board of

directors. If “a State cannot substitute its judgment for that of a political party as to

the desirability of a particular internal party structure,” March Fong Eu v. San

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Francisco County Democratic Cent. Comm., 489 U.S. 214, 233 (1989), then

neither may it do so in a Christian ministry without establishing a government

form of religion.

B. Free Exercise Clause

In addition to the evils of sectarian favoritism, the potential embroiling of

churches in political strife, and the fusion of religious and civil authority, the

court’s remedy also constitutes a forbidden intrusion of state authority into

ministry governance. The state may not appoint the leadership of religious

organizations. Not only is such action an establishment of religion, but it also

violates the free exercise rights of the ministry.

1. Intrusion into Ministry Governance

Although this motion is an independent application to the Supreme Court for a

stay and not an appeal of the trial court’s denial, it is instructive to observe the

flaw in the district court’s reasoning which caused it to dismiss without analysis

the religious freedom questions implicated by its remedy.

FLS is a corporation. A corporation is an artificial being existing only in contemplation of the law. A corporation can have no existence outside the boundaries set by the state.

Order Denying Stay of Judgment at 2. A corporation admittedly is created under

state, not federal law. However, this fact does not render federal law irrelevant

where it conflicts with state law, corporate or otherwise. The Supremacy Clause

imposes certain First Amendment limitations on the remedies that may be

employed against religious organizations for violation of secular statutes. These

19

remedies, in particular, cannot redefine a ministry’s governing structure or intrude

into its choice of leadership and survive constitutional scrutiny. State government

“cannot validate action which the Constitution prohibits . . .” Kedroff v. St.

Nicholas Cathedral, 344 U.S. 94, 107 (1952). A long train of Supreme Court cases

stretching back into the nineteenth century set a strict prohibition on State

definition of the governing structure of religious organizations. The court in

metaphorically describing the religious freedom issue in this case as alternatively a

“red herring,” “a dog chasing its tail,” and “a get-out-of-jail-free card” failed to

consider these cases. Dkt. Nos. 1617, 1822.

In Kedroff, a state statute which transferred control of the New York churches

of the Russian Orthodox religion from one religious authority to another was

invalidated as prohibiting the free exercise of religion. “Legislation that regulates

church administration, the operation of the churches, the appointment of clergy . . .

prohibits the free exercise of religion.” Id. at 107-108. Even though the statute

sought to maintain doctrinal conformity and to place ecclesiastical authority in

those the state deemed most likely to be faithful to the religious organization’s

historic purposes (as the district court did in giving branch offices and employees

majority control of the FLS board), the very act was unconstitutional because the

conformity “is by legal fiat and subject to legislative will.” Id. at 108.

Should the state assert power to change the statute requiring conformity to ancient faith and doctrine to one establishing a different doctrine, the invalidity would be unmistakable.

Id. The parallel to this case is clear. The state by fiat seeks to maintain the

20

religious character of FLS through the exercise of its own power to coerce a

change in the leadership of the organization.

The Free Exercise Clause protects not only free choice of doctrine and beliefs,

but also the very form of religious government selected to express that faith. “The

opinion radiates, however, a spirit of freedom for religious organizations, an

independence from secular control or manipulation, in short, power to decide for

themselves, free from state interference, matters of church government as well as

those of faith and doctrine.” Id. at 116, citing Watson v. Jones, 13 Wall 679

(1872). When a state court remakes a ministry’s governing structure and installs

state-approved clerics into that structure, it travels far beyond constitutional limits.

By fiat it displaces one church administrator with another. It passes the control of matters strictly ecclesiastical from one church authority to another. It thus intrudes for the benefit of one segment of a church the power of the state into the forbidden area of religious freedom contrary to the principles of the First Amendment.

Id. at 119. A civil court may not establish voting methods within a religious

organization to select its leadership. “[I]t is not a function of civil government

under our constitutional system to assure rule to any religious body by a counting

of heads.” Id. at 122-23 (Frankfurter, J., concurring). Nor may it decide that the

agents of the ministry (employees and branch offices) should select its principals

(directors). “[I]ntroduction of government standards to the selection of spiritual

leaders would significantly, and perniciously, rearrange the relationship between

church and state.” Rayburn v. Conf. of Seventh-Day Adventists, 772 F.2d 1164,

1169 (4th Cir. 1985). When a court takes from a ministry the “temporal goods” it

21

needs to carry out its mission, its religious freedom is impaired, Kedroff at 131

(Jackson, J., dissenting), and its capacity for religious speech. Family Life

Services, ¶ 15. Thus, “control of ecclesiastical polity, as well as doctrine” must be

left to the governing bodies of religious organizations. Eldership v. Church of God

at Sharpsburg, 396 U.S. 367, 370 (1970).

The Help and Caring Constitution sets out a hierarchical-type Biblical model

of church governance for HCM and allied agencies. T1364-1376. A civil court has

no jurisdiction to alter this form, state corporation law notwithstanding. The

limitations set out in Kedroff apply as much to judicial as to legislative action.

After the St. Nicholas Cathedral case returned to the New York state courts, an

attempt was made to change control of the church government by resort to the

common law of trusts rather than a specific legislative enactment. The Supreme

Court tersely reversed this subterfuge. “But it is established doctrine that it is not

of moment that the State has here acted solely through its judicial branch, for

whether legislative or judicial, it is still the application of state power which we

are asked to scrutinize.” Kreshik v. Saint Nicholas Cathedral, 363 U.S. 190, 191

(1960) (citation and internal quotation marks omitted).

In Serbian Orthodox Diocese v. Milivojevich, 426 U.S. 696 (1976), the court

re-emphasized the autonomy of religious organizations in matters of church

government as well as of doctrine. “This principle applies with equal force to

church disputes over church polity and administration.” Id. at 710. By enforcing

its own preferences as to the form of ministry government for FLS, the district

22

court has engaged in a quintessentially religious act. The form of government of a

religious body is as much a religious decision as its choice of doctrine.

To permit civil courts to probe deeply enough into the allocation of power within a hierarchical church so as to decide religious law governing church polity would violate the First Amendment in much the same manner as civil determination of religious doctrine.

Id. at 709 (citation and internal punctuation omitted). Matters of “ecclesiastical

government” and “fundamental organization” of a religious denomination are

beyond the jurisdiction and competence of civil courts. Id. at 714 (citation

omitted). As the court stated in rejecting the Illinois Supreme Court’s approval of

a court-directed reorganization of the American-Canadian Serbian Orthodox

Church: “[I]t suffices to note that the reorganization of the Diocese involves a

matter of internal church government, an issue at the core of ecclesiastical affairs;

Arts. 57 and 64 of the Mother Church constitution commit such questions of

church polity to the final province of the Holy Assembly.” Id. at 721.

Although Help and Caring Ministries and associated agencies are an

embryonic denomination and not a richly-articulated hierarchy developed over

centuries, they are as fully entitled to autonomy in the development of their

governing structure as any other religious organization. The state has no more

power to reorganize small ministries than it does to dictate the governance of

established denominations. The HCM Constitution sets out these relationships and

provides for a top-down form of government. The ministry is constitutionally

entitled to make its own choice in these areas free of state interference. The

23

Serbian court restated the principles set forth in Kedroff that “religious freedom

encompasses the power of religious bodies to decide for themselves, free from

state interference, matters of church government as well as those of faith and

doctrine.” Id. at 721-22.

In short, the First and Fourteenth Amendments permit hierarchical religious organizations to establish their own rules and regulations for internal discipline and government . . .

Id. at 724 (emphasis added).

2. The Ministerial Exception

The autonomy of a religious ministry in the selection of personnel that set

policy and doctrine has been strongly asserted by federal circuit courts in applying

the lessons of Kedroff and Serbian.

The right to choose ministers without government restriction underlies the well-being of religious community, for perpetuation of a church’s existence may depend upon those whom it selects to preach its values, teach its message, and interpret its doctrines both to its own membership and to the world at large.

Any attempt by government to restrict a church’s free choice of its leaders thus constitutes a burden on the church’s free exercise rights.

Rayburn at 1167-68. Accord Newport Church of the Nazarene v. Hensley, ____

P.2d ____, (Or. App. 1999) (minister of religious organization “exercises its faith

with each ministerial act”). The court and the Attorney General were quite

assiduous during trial in questioning witnesses to establish that FLS was not a

church. This effort, however, misses the point. The First Amendment refers not to

“churches,” but to “religion.” The practice of religion is not limited to one

24

organizational form. Christian schools and ministries also have First Amendment

rights. Discrimination against non-church religious organizations violates the

equal protection clause. See “Memorandum on Religious Rights of Non-Church

Organizations.” Dkt. No. 1353. Employment Division v. Rogue Valley Youth for

Christ, 770 P.2d 588 (Or. 1989). That HCM and FLS are Christian ministries is

beyond dispute and acknowledged by the court in its Findings. That credit

counseling may be carried on by secular organizations does not change this fact. In

Corporation of the Presiding Bishop v. Amos, 483 U.S. 327 (1987), the court

found that a gymnasium operated by the Mormon Church was clothed with free

exercise protection for Title VII purposes because it was part of a larger ministry.

Indeed, eight of the federal circuits have found that the Free Exercise Clause

even supersedes federal employment discrimination law in protecting church

decisions as to choice of personnel that minister the faith. This is true even when

religious doctrine is not an issue in the case. Combs v. Central Texas Conf. United

Methodist Church, 173 F.3d 343 (5th Cir. 1999). The State simply cannot tell

religious organizations how to organize themselves or who shall minister the faith

for them. Yet this is exactly what the court’s judgment does in minute detail, not

only removing the board of directors in its entirety but establishing a scheme for

selecting board members and removing FLS from any connection with the larger

ministry of which it was a part and from which it developed. The ministerial

exception “is designed to protect the freedom of the church to select those who

will carry out its religious mission.” E.E.O.C. v. Catholic University of America,

25

83 F.3d 455, 462 (D.C.Cir. 1996). It is not the title of the position that is

important, but the function. Non-clergy whose primary duties consist of teaching,

spreading the faith, and church governance, whose positions are “important to the

spiritual and pastoral mission of the church” perform ministerial functions. People

in such positions may not be subject to secular tests of suitability.

There can hardly be any dispute that replacement of the governing board of a

religious organization by the State implicates positions “important to the spiritual

and pastoral mission” of the organization. “[T]he Free Exercise Clause guarantees

a church’s freedom to decide how it will govern itself, what it will teach, and to

whom it will entrust its ministerial responsibilities[.]” Id. at 463. If the State is

allowed to control such decisions, as has occurred in this case, “the danger is that

choices of clergy which conform to the preferences of public agencies may be

favored over those which are neutral or opposed.” Rayburn at 1170. Where the

goals of the State and a religious organization differ, as on the abortion question,

“the temptation for state intrusion becomes apparent.” When such values clash, the

ministry “is entitled to pursue its own path without concession[.]” Id. at 1171.

Although the State is not directly attacking the opposition to abortion of HCM and

allied agencies, its stated disagreement with Darold Larson’s refusal to pay a now-

expired judgment and its attack upon the ministry governing structure as assisting

in non-payment of that judgment accomplish the same objective. The State is

intruding its values into ministry governance contrary to the Free Exercise Clause.

Certainly the State may pursue a remedy for violation of secular law, but it may

26

not under the guise of seeking a secular remedy impose its own selection of

ministers and choice of ministry governing structure without violating the First

Amendment. State law remedies are constrained by constitutional imperatives.

3. Smith does not apply

a. FLS has no religious objection to obeying North Dakota credit counseling law

The free exercise of religion that protects ministry government from state

intrusion does not grant individuals who cleave to that ministry a license to violate

neutral laws which do not target religion for disability. Employment Division v.

Smith, 494 U.S. 872 (1990). But see “Memorandum on Free Exercise of Religion

and the North Dakota Constitution”, Dkt. No 485 (North Dakota Constitution

requires adherence to pre-Smith case law for free exercise claims). Unlike Late

Corporation of Latter-Day Saints v. United States, 136 U.S. 1 (1890), in which the

Mormon authorities adamantly refused as a matter of religious doctrine to obey the

federal law on polygamy, FLS has stated its willingness to conform to NDCC 13-

07, the state credit counseling law, from the outset of this case. Dkt. No. 686. In

Latter-Day Saints the church corporation was dissolved and its assets distributed

under a federal statute adopted for the suppression of polygamy. Even in that case,

however, the court did not assay to appoint the leadership of the defendant

religious organization as the state seeks in this case. It also had the guidance of a

specific statute providing for dissolution of polygamous organizations and

specifying the distribution of their assets. There is no such a history of defiance of

27

civil authority in this case. See id. at 64 (“a contumacious organization . . .

constantly attempting to oppose, thwart and subvert the legislation of Congress”).

Prior to the commencement of this lawsuit the North Dakota Attorney General

never audited FLS or indicated any displeasure with its administrative practices or

organizational structure.

A religious objection to state law, therefore, is not the source of the

establishment and free exercise issues in this case. This is not a case where

particular religious beliefs are in conflict with the requirements of secular law. The

credit counseling statute is neutral with regard to religion. The ministry has

expressed its willingness to abide by a remedy fashioned according to Chapter 13-

07, NDCC. Indeed, steps had been taken prior to the filing of this lawsuit and

before the ministry had any knowledge of the Attorney General’s investigation to

remedy the problems. Findings of Fact, ¶ 186 (recognizing raising of substantive

defense “that Dennis Uchtman took control of the operation of FLS and Darold

Larson no longer had control of the finances”). The State, by seeking an extreme

and non-statutory remedy, has created a First Amendment problem where none

need have existed. Civil enforcement actions of this kind are commonly settled for

an injunction or penalty. The defendants can range from small businesses to the

largest corporations in the land. Even in the tobacco litigation no attempt was

made to change the boards of directors of the defendant corporations. If FLS was

merely a disguised criminal enterprise, the Attorney General could have employed

the state RICO statute, which does provide for reorganization. NDCC 12.1-06.1-

28

05(4)(c). Since the facts exhibit neither a pattern of criminal activity nor the

cynical use of religion as a shield for wrongdoing, RICO remedies are not

available to the court in this matter. Yet that is what has been imposed.

b. Smith does not affect the ministerial exception Courts which have examined the question have held that Smith does not apply

to church governance questions but only to challenges by individuals to neutral

laws of general applicability. Smith prevents an individual from becoming a law

unto himself based on his religious beliefs. It does not give the State a license to

reorder religious institutions.

The ministerial exception is not invoked to protect the freedom of an individual to observe a particular command or practice of his church. Rather it is designed to protect the freedom of the church to select those who will carry out its religious mission. Moreover, the ministerial exception does not present the dangers warned of in Smith. Protecting the authority of a church to select its own members free of government interference does not empower a member of that church, by virtue of his beliefs, to become a law unto himself.

---------- [W]e cannot believe that the Supreme Court in Smith intended to qualify this century-old affirmation of a church’s sovereignty over its own affairs.

Catholic University at 462-63 (internal quotation marks and citations omitted).

The Fifth Circuit has recently “agree[d] with the reasoning and conclusion of the

D.C. Circuit” in distinguishing between the two strands of free exercise precedent.

We concur wholeheartedly with the D.C. Circuit’s conclusion that Smith, which concerned individual free exercise, did not purport to overturn a century of precedent protecting the church against governmental interference in selecting its ministers.

----------

29

The fundamental right of churches to be free from government interference in their internal management and administration has not been affected by the Supreme Court’s decision in Smith and the demise of Sherbert.

Combs, 173 F.3d at 349-50. Accord Newport Church of the Nazarene v. Hensley,

____ P.2d ____, n.10 (Or. App. 1999).

Free exercise protection against State selection of ministers and dictation of

ministry governing structure is so profound that it immunizes religious bodies

from federal employment discrimination law. That same protection operates as an

absolute prohibition against a state court appointing the leadership of a Christian

ministry or altering its governing structure.

c. Hybrid rights

Under Smith strict scrutiny still applies to hybrid rights claims which implicate

more than a single constitutional protection. The exception applies in this case

where the establishment clause, free exercise clause and freedom of association

are at issue.

d. State constitution

If strict scrutiny of free exercise claims is not available under federal law, this

greater protection for religious freedom exists under the North Dakota State

Constitution. “Memorandum on Free Exercise of Religion and the North Dakota

Constitution.” Dkt. No 485.

C. Freedom of Association

The organizational right to religious autonomy is buttressed also by the First

30

Amendment right of freedom of association. Government actions that may

unconstitutionally infringe on this right include “interference with the internal

organization or affairs of the group.” Freedom of association includes the right not

to associate. Roberts v. Jaycees, 468 U.S. 609, 623 (1984). State-defined

membership requirements, such as are imposed on the FLS board of directors by

the court in this case, impose restrictions “on the organization’s ability to exclude

individuals with ideologies or philosophies different from those of existing

members.” Id. at 627.

D. Summary

Because the court’s judgment is outside the boundaries of its civil jurisdiction,

the judgment must be invalidated regardless of whether or not there might be a

legal remedy it could have applied. FLS, therefore, has made a strong showing that

it is likely to succeed on appeal and has thereby satisfied the first prong of the test

for granting a stay pending appeal.

IV. Irreparable Injury

The preservation of the status quo recognizes that the most important prerequisite for the issuance of a preliminary injunction is a demonstration that, if the preliminary injunction is not granted, the applicant is likely to suffer irreparable harm before a decision on the merits can be rendered.

Vorachek v. Citizens State Bank, 461 N.W.2d at 585.

A. Loss of religious rights and ministry assets

FLS will be harmed in two ways by the enforcement of the judgment prior to

the conclusion of the appeal. First, it will be denied its fundamental First

31

Amendment right to freedom of religion and association by having the state

appoint its board of directors. FLS will be harmed indirectly by being deprived of

ministry oversight by HCM, an agency established to provide it ministry

leadership and make it conformable to Christian pro-life objectives as stated in the

HCM Constitution. Deprivation of a fundamental right constitutes irreparable

harm. Johnson v. Mortham, 926 F.Supp. 1540, 1543 (N.D.Fla. 1996). “The loss of

First Amendment freedoms, for even minimal periods of time, unquestionably

constitutes irreparable injury.” Elrod v. Burns, 427 U.S. 347, 373 (1976).

Secondly, FLS may be harmed economically by being deprived of use of its

revenues that have accumulated since the inception of the receivership. If the

court-appointed board takes over prior to the appeal and disperses the assets of

FLS, the ministry-selected board will have no recourse to recover these funds even

if it is successful on appeal. The court’s judgment places no limitation whatsoever

on the expenditure of these funds by its own designated board. Thus, the money

could be disbursed for purposes antithetical to the religious character of the

ministry or not applied to the purposes, such as support of the Perry Center and the

Women’s Care Clinic, which the ministry-selected board has stated as its primary

concern many times to the court. Financial injury is considered irreparable when it

cannot be redressed by success on appeal.

An injury is irreparable when it cannot be adequately compensated in damages, and it is not necessary that the pecuniary damage be shown to be great. Acts which result in a serious change of, or are destructive to, the property affected either physically or in the character in which it has been held or enjoyed, do irreparable injury.

32

Vorachek v. Citizens State Bank, 461 N.W.2d at 585 (elisions, quotation marks

and citations omitted).

As of July 31, 1999, after a court-initiated payment of $104,616.11 to the

Attorney General for fees and expenses, there was $769,451.23 on deposit in

unencumbered FLS savings accounts. Receiver’s Report of August 20, 1999. Dkt.

No. 1848. If a court-appointed board disburses these funds during the pendency of

the appeal, FLS would be helpless to recover these funds for ministry purposes,

even if successful on appeal. Additionally, the First Amendment right of the

ministry to direct the employment of its assets in furtherance of its own Christian

pro-life vision would also be irreparably harmed. “A civil court has no jurisdiction

over ecclesiastical decisions by churches as to how they are going to expend their

funds.” Bell v. Presbyterian Church (U.S.A.), 126 F.3d 328, 329 (4th Cir. 1997).

“A restriction on the amount of money a person can spend on communication

necessarily reduces the quantity of expression.” State ex rel. Heitkamp v. Family

Life Services, 1997 ND 37, ¶15, 560 N.W.2d 526, quoting Buckley v. Valeo, 424

U.S. 1, 19 (1976) (elisions omitted). By contrast, the state-selected board would

suffer no detriment by a delay of a number of months to await the outcome of the

appeal. The funds would be preserved for administration as finally determined by

the Supreme Court.

B. Loss of fruits of appeal: mootness

“A stay is issued to maintain the status quo, where otherwise, absent the stay,

33

there is a substantial likelihood that the basis for the appeal will be mooted by the

operation of the injunction.” Stop H-3 Association v. Volpe, 353 F.Supp. 14, 16

D.Haw. 1972). A court’s discretion to maintain the status quo pending appeal

should

be exercised on the basis of whether the appellant has any substantial right which would be injured by a refusal of the courts to maintain the status quo. The court should place no obstacle in the way of one appealing if such obstacle would virtually dispose of the appeal and destroy any possibility of its efficacy to the appellant, unless it should appear . . . that the appeal is frivolous and taken for the purpose of delay.

Brusegaard v. Schroeder, 199 N.W.2d 921, 926-27 (N.D. 1972). Haaland v.

Verendrye Electric Cooperative, 66 N.W.2d 902 (N.D. 1954) is directly on point.

A district judge determined that a certain corporate election was invalid and

removed the entire board of directors, replacing it with a competing board. The

defendants in the case sought a stay of the court’s order pending appeal. The

Supreme Court granted the stay on the grounds that allowing the court’s decision

to go into effect prior to completion of the appellate process might render the

appeal substantially moot for the defendants.

[If] the board of directors declared by the court to be elected may immediately take over the control and operation of the corporation pending the appeal and the determination of the correctness of the judgment appealed from, it appears to us that, should the judgment be reversed, the appellants may be deprived of a part of the fruits of their successful appeal.

Id. at 908.

Other courts have granted stays pending appeal in order not to moot or limit

34

the appellate process. Dayton Christian Schools v. Ohio Civil Rights Com’n, 604

F.Supp. 101 (S.D.Ohio 1984) (subsequent history omitted) (First Amendment

harm); Rose v. Giamatti, 721 F.Supp. 924 (S.D.Ohio 1989) (“preserve the status

quo”); Thomas v. City of Evanston, 636 F.Supp. 587 (N.D.Ill. 1986) (city granted

stay in employment action because citizens have “an interest in not paying out

money they may not be able to recoup ultimately”); Isaly Company v. Kraft, Inc.,

622 F.Supp. 62, 63 (D.C.Ill. 1985) (“denying a stay would moot the appeal for all

practical and economic purposes”). A money judgment can be automatically

stayed upon posting of an appropriate bond, but a stay of injunctive relief requires

action by the court. Where the enforcement of a nonmonetary judgment may

substantially moot the appellate process, a case “cries out for the maintenance of

the status quo, pending appeal.” Dayton Christian Schools, 604 F.Supp. at 105.

The granting of an injunction will guarantee that the appellate court’s opinion, whatever it might be, will be effective -- from a practical consideration -- in resolving the litigation. To deny the injunction would have the effect of rendering any appellate decision meaningless, insofar as the fundamental legal issues herein are concerned.

Id. (emphasis in original).

V. The Public Interest

A. Protection of constitutional rights

“The public interest always is served when constitutional rights . . . are

vindicated.” University Books & Videos, Inc. v. Metropol. Dade County, 33

F.Supp.2d 1364, 1374 (S.D.Fla. 1999). “[T]he public as a whole has a significant

35

interest in . . . protection of First Amendment liberties.” Dayton Area Visually

Impaired Persons, Inc. v. Fisher, 70 F.3d 1474, 1490 (6th Cir. 1995). The public

interest in protecting the autonomy of religious organizations to define and carry

out their missions free of state control is firmly established. Kedroff v. St. Nicholas

Cathedral, 344 U.S. 94 (1952). Religious freedom encompasses the power of

religious bodies “to decide for themselves, free from state interference, matters of

church government as well as those of faith and doctrine.” Id. at 116. See also

Dayton Christian Schools, 604 F.Supp. at 104 (finding it “axiomatic” that public

interest supports “fostering the values which underlie the religion clauses of the

First Amendment”). Enforcement of an unconstitutional remedy is not in the

public interest. Contractors Ass’n of E. Pa. v. City of Philadelphia, 739 F.Supp.

227, 231 (E.D.Pa. 1990).

Family Life Services, Inc. and Help and Caring Ministries, Inc. are nonprofit corporations with charitable, educational, and religious purposes.

---------- Our federal and state constitutions protect the religious beliefs of both majorities and minorities. We must never forget the role pursuit of religious freedom has played in the history of our nation.

State ex rel. Heitkamp v. Family Life Services, 1997 ND 37, ¶ 2, 15, 560 N.W.2d

526 (emphasis added).

B. Avoidance of multiple changes of administration

In Haaland v. Verendrye Electric Cooperative, supra, the court relied

substantially upon Smith v. Reid, 244 N.W. 81 (S.D. 1932). In Smith two parties

contested the right to an elective office. The issue was whether the winning

36

candidate satisfied a citizenship requirement. Although the court ordered that the

officeholder be removed, it stayed its judgment to prevent the possibility of its

installing a new occupant to the office, only to have him shortly removed and the

original official reinstated should the judgment be reversed. Thus, “there would

have been within a short period of time two changes in the administration of the

office, which would not be for the best interest of the public.” Id. at 84. Likewise

in this case the receiver is the current administrator of FLS and has been for three

years. It is in the best interest of FLS to have one more change of administration

rather than two.

Because it is undesirable for a court to install a board which is then removed

on appeal, continuance of the status quo pending appeal is in the best interest of

the stability and integrity of FLS and the capacity of the Supreme Court to conduct

meaningful review. See also U.S. v. Western Elec. Co., Inc., 774 F.Supp. 11, 12-13

(D.D.C. 1991) (“massive confusion” would result if order allowing regional

telephone companies to enter information services market were reversed on

appeal; stay therefore continued pending appeal); Buntzman v. Springfield

Redevelopment Authority, 918 F.Supp. 29 (D.Mass 1996) (disposal of landowner’s

property during pendency of appeal would moot entire appellate process, causing

irreparable harm); Miller v. LeSea Broadcasting, Inc., 927 F.Supp. 1148 (E.D.Wis.

1996) (judgment requiring sale of television station stayed to avoid significant

injury if judgment reversed); National Treasury Employees Union v. Von Raab,

808 F.2d 1057, 1060 (5th Cir. 1987) (injunction in effect against drug-testing

37

program continued pending appeal because it was not in public interest to

continually interrupt and recommence the program); First Savings Bank, F.S.B. v.

First Bank System, Inc., 163 F.R.D. 612 (D.Kan. 1995) (change of name of bank

pending appeal would confuse customers raising concern about its stability).

VI. Conclusion

If the ministry is successful on appeal, it should not be deprived of its assets by

a court-appointed board prior to the outcome of the appeal. Likewise should the

court’s creation of a state-selected board be approved on appeal, it might be

inequitable for the ministry board to have control of FLS assets pending appeal.

Therefore, the only just and sensible way to maintain the status quo pending

conclusion of the appeal is to retain the receiver in place and not pass control of

the corporation to a board of directors until the appellate process is complete. In

U.S. v. Mansion House Redevelopment Co., 682 F.Supp. 446 (E.D.Mo. 1988), the

court held certain rental property through a receiver. The court reasoned as

follows: “If the collateral is sold during the pendency of the appeal, the Court’s

judgment is subsequently reversed, and the sales cannot be avoided, then

defendants will suffer irreparable injury.” Id. at 448 n.4. See also Resolution Trust

Corp. v. Cruce, 785 F.Supp. 147 (D. Kan. 1992) (defendants not harmed when

assets frozen by court were retained under control of competent neutral trustee

pending outcome of appeal). As in the regional telephone companies case, in the

absence of a stay, “substantial funds could be spent in reliance on a decision which

could subsequently be vacated, and corporate changes could take place on a like

38

reliance” such as hiring personnel and establishing sub-ministries. “It is

appropriate, therefore, to stay the effects of this Court’s current ruling until finality

has been reached in the appellate process, and the Court will do so.” U.S. v.

Western Elec. Co., Inc., 767 F.Supp. 308, 333 (D.D.C. 1991).

Because of the substantial violations of the First Amendment in the design and

implementation of the court’s judgment, FLS is likely to succeed on appeal in

having the judgment vacated. When coupled with the irreparable harm FLS would

suffer if a state-approved board gained control of its assets and ministry prior to

completion of the appeal, and the public interest in protecting religious rights, the

conditions for granting a stay of the judgment pending appeal have been satisfied.

WHEREFORE, appellant Family Life Services, Inc. requests the court

pursuant to Rule 8(a) of the North Dakota Rules of Appellate Procedure to stay

paragraphs 2, 3, 9 and 10 of the judgment entered May 7, 1999 pending

completion of the appellate process.

Respectfully submitted this 17th day of September, 1999.

____________________________ Peter B. Crary Attorney at Law N.D. Bar No. 3028 1201 12th Avenue North Fargo ND 58102 (701) 280-9048