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Hutterville Hutterian Brethren, Inc. v. Sveen

United States Court of Appeals, Eighth Circuit

January 13, 2015

Hutterville Hutterian Brethren, Inc., a South Dakota nonprofit corporation; George Waldner, Sr.; Tom Waldner; Kenneth Waldner, individually and as officers and directors of Hutterville Hutterian Brethren, Inc., Plaintiffs - Appellants
v.
Jeffrey T. Sveen; Rodrick L. Tobin; Harvey C. Jewett; Siegel, Barnett & Schutz, L.L.P., a South Dakota limited liability partnership, Defendants - Appellees

Submitted September 23, 2014

Appeal from United States District Court for the District of South Dakota - Aberdeen.

For Hutterville Hutterian Brethren, Inc., a South Dakota nonprofit corporation, George Waldner, Sr., Tom Waldner, Kenneth Waldner, individually and as officers and directors of Hutterville Hutterian Brethren, Inc., Plaintiffs - Appellants: Court J. Anderson, David Bradley Olsen, HENSON & EFRON, Minneapolis, MN; Steven Daniel Sandven, STEVEN D. SANDVEN LAW OFFICE, Sioux Falls, SD.

For Jeffrey T. Sveen, Rodrick L. Tobin, Siegel, Barnett & Schutz, L.L.P., a South Dakota limited liability partnership, Defendants - Appellees: Jason Robert-Feil Sutton, Michael F. Tobin, Thomas J. Welk, BOYCE & GREENFIELD, Sioux Falls, SD.

For Harvey C. Jewett, Defendant - Appellee: Robert B. Anderson, MAY & ADAM, Pierre, SD; Thomas G. Fritz, LYNN & JACKSON, Rapid City, SD; Jason Robert-Feil Sutton, Michael F. Tobin, Thomas J. Welk, BOYCE & GREENFIELD, Sioux Falls, SD.

Before RILEY, Chief Judge, LOKEN and KELLY, Circuit Judges.

OPINION

Page 548

RILEY, Chief Judge.

This case publishes a new chapter in the legal struggle for control of Hutterville Hutterian Brethren, Inc. (Hutterville), a South Dakota religious nonprofit corporation whose members have split into factions, mirroring a larger division in the Hutterite religion. Though both factions claim the right to control Hutterville, the South Dakota Supreme Court has ruled this issue is not constitutionally determinable by secular courts under either the federal constitution or the state constitution because the questions of corporate governance cannot be answered without delving into disputes of ecclesiastical[1] polity and hierarchy 1 which " are shielded from judicial scrutiny under the First Amendment." Hutterville Hutterian Brethren, Inc. v. Waldner (Hutterville I), 2010 SD 86, 791 N.W.2d 169, 179-80 (S.D. 2010) (no jurisdiction to answer governance issues); see also Wipf v. Hutterville Hutterian Brethren, Inc. (Hutterville II), 2012 SD 4, 808 N.W.2d 678, 686 (S.D. 2012) (no jurisdiction to mandate corporate dissolution). With the South Dakota Supreme Court effectively leaving a legal stalemate, the leaders of one faction brought the present suit against several attorneys and a law firm who allegedly conspired with leaders of the other faction to " manufacture" the apparent religious schism and improperly place the conspiring faction leaders in command of Hutterville.

Page 549

The district court[2] dismissed the case, reasoning it could not determine the presence of standing under Article III of the United States Constitution without reaching the same religious impasse that halted the South Dakota state courts. Equipped with appellate jurisdiction, see 28 U.S.C. § 1291, we affirm.

I. BACKGROUND

A. History

As the South Dakota Supreme Court explained, the Hutterite religion descends--like the Amish and Mennonite religions--from the Anabaptist movement in sixteenth-century Germany and takes its name from its founder, Jacob Hutter, who was burned at the stake in Innsbruck in 1536. See Hutterville II, 808 N.W.2d at 680; Decker ex rel. Decker v. Tschetter Hutterian Brethren, Inc., 1999 SD 62, 594 N.W.2d 357, 359 (S.D. 1999). In the 1870s and 80s, the Hutterites fled religious persecution in Europe, relocating in Canada and the northern United States, where their colonies remain today. See Decker, 594 N.W.2d at 359. One of the more distinguishing characteristics of the Hutterite faith is what the South Dakota Supreme Court referred to as a " community of goods" --Hutterites must disavow individual property ownership in favor of a communal lifestyle within each colony. See Hutterville II, 808 N.W.2d at 680.

As the Waldners explain, the Hutterian Brethren Church (Hutterian Church) is organized into three conferences--the Dariusleut, Lehrerleut, and Schmiedeleut Conferences--with each Hutterite colony belonging to one of these conferences. Hutterville Colony (the congregation associated with Hutterville, the corporation) is a South Dakota colony historically belonging to the Schmiedeleut Conference. See id. Consistent with the community-of-goods principle, members of Hutterville Colony live a communal lifestyle with all of the colony's real and personal property belonging to Hutterville. See id. Hutterville itself is a South Dakota nonprofit corporation, managed by an elected board and elected officers, who operate Hutterville as a communal farm for the colony. Formed with the stated purpose of promoting the Hutterite faith and Hutterian Church, Hutterville conducts the colony's business and owns all property in lieu of individual property ownership.

In 1983, when Hutterville and Hutterville Colony first formed, Reverend Jacob Kleinsasser was the Senior Elder (i.e., the spiritual and ecclesiastical leader) of the Schmiedeleut Conference. See Decker, 594 N.W.2d at 360. According to the complaint, this position made Rev. Kleinsasser " the final arbiter or decision-maker regarding issues affecting the members of the Church."

Around 1992, a large group of Hutterite ministers repudiated Rev. Kleinsasser's leadership in response to accusations of impropriety, and these ministers opted instead to follow Reverend Joseph Wipf. See id. The remaining ministers supported Rev. Kleinsasser. See id. Colonies following Rev. Wipf (forming the Schmiedeleut " Group 2" ) solidified their division in 1993 by ratifying a new constitution which purported to institute new conference leadership. See Hutterville II, 808 N.W.2d at 680. Rev. Kleinsasser's colonies (forming the Schmiedeleut " Group 1" ) ...


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