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CTX Update: When Courts Do Not Know Their Limitations

Introduction

It has been a long time since I last wrote about the Concordia University Texas (CTX) litigation. The last time was September 21, 2024. Significant things have happened since then. The main ones are these:

  1. The federal district court granted CTX’s motion to dismiss from federal court for lack of federal jurisdiction.
  2. The federal district court granted CTX’s motion to remand the federal court case to the Texas state court to be decided there.
  3. The LCMS has appealed those decisions to the U. S. Court of Appeals for the Fifth Circuit. The appellate court has set the briefing schedule for the appeal. Some briefs have been filed.

Understand: Those are jurisdictional rulings. They only say that the federal courts do not have jurisdiction and that the case should be sent to the state court. The rulings do not say who is right or wrong on the merits of the substantive claims and defenses in the case.

To understand the orders of dismissal and remand, we need to recall the background leading up to them. In this article we will look at:

  • A very brief review of the federal case.
  • The roles of the federal court and state law.
  • The proposition of CTX’s motion to dismiss.
  • The proposition of LCMS’ defense against that motion.
  • The federal court’s decision about those propositions.
  • The appeal to the U. S. Court of Appeals for the Fifth Circuit

I apologize for the length of this essay. When so much time has passed, I must bring back to mind the background and then address so much that has happened. Not wanting to oversimplify, this essay is on the long side. Please bear with me.

The Federal Lawsuit

The Lutheran Church—Missouri Synod filed a civil lawsuit against Donald Christian, Christopher Bannwolf, and Concordia University Texas, Inc. on September 1, 2023. As with most court cases, the filing of the complaint that begins a lawsuit is not the beginning of the story. It is a step in the middle of the story. The endnote[1] lists my essays and interviews about the context leading up to the filing of the complaint.

A majority of the board of regents of the university, under the leadership and influence of the board chairman and the university president, threw off the control, doctrine, and ownership of the university by LCMS on November 8, 2022. Without authority, they amended the university’s governing documents; denied any control of the synod’s school by the synod; denied the right of the synod to elect and appoint members to the board of regents; denied the right of the synod to govern the selection of the president who is the spiritual leader of the theological faculty, the rest of the faculty, and the student body; and declared that they alone would determine the extent to which they would retain the doctrine of the synod. The case challenges these actions after the synod in convention voted overwhelmingly that the actions were rebellion against the Fourth Commandment and moral theft against the Seventh, Ninth, and Tenth Commandments.

The complaint in the lawsuit sought to put things back to where they should be. It sought to reverse the unauthorized amendments of the governing documents, the rebellion against the authority of the synod over its synodical school, and the appropriation the schools’ property. In the alternative, it sought damages.

Federal Court; State Law

The case was filed in a federal court, not a court of the state of Texas. Why was the case in federal court and why did the motion say it should not be in federal court?

The state district courts usually are courts of general jurisdiction. This means they are assumed to have jurisdiction over the subject matter of practically any case. Consequently, complaints filed in state district courts usually are not required to plead facts or law showing that the court has jurisdiction. Jurisdiction of the subject matter is assumed unless a party or the court raises a question about jurisdiction.

The federal district courts are courts of limited jurisdiction. This means there is no assumption that the court has jurisdiction of the subject matter of cases filed in it. Instead, one of the first tasks of a party filing a complaint in a federal district court is to plead facts and law showing that the court has subject matter jurisdiction.

The claims in this case all arise under state law, particularly, the law of Texas. Consequently, by default, a federal court does not have jurisdiction of this case. Congress, however, has granted jurisdiction to the federal courts in cases of absolute diversity of citizenship. In this case, diversity of citizenship means that the defendants are citizens of the state of Texas while the plaintiff is not a citizen of Texas. Though LCMS is a corporation with authority to transact business in Texas, it is a Missouri corporation. Absolute diversity means that all of the defendants are citizens of Texas whereas none of the plaintiffs are.

Congress had the idea that out of state parties might suffer bias in favor of the citizens of the state court’s own state when all of the opposing parties are from out of state. To safeguard the impartiality of the court that will hear a case, Congress gave jurisdiction to the federal courts to hear state law cases when there is an absolute diversity of citizenship of the parties.

LCMS chose to avail itself of the impartiality of a federal court in this case where all the defendants are citizens of Texas and LCMS is from outside of Texas. This, however, does not change the law that applies. Federal courts can and frequently do apply state law. In this case, the federal court would apply the law of the state of Texas.

The Motion to Dismiss

CTX filed a motion to dismiss the complaint. The motion denied that diversity of citizenship jurisdiction in the federal court existed for this case.

The motion depended on two senses of the word “synod.” In one sense, the synod is an unincorporated association of two kinds of members: congregations and rostered clergy members. Its ultimate legislative authority is the synod in convention. In another sense, the synod is a Missouri corporation. The corporation is governed by its Board of Directors. Among other things, the Board of Directors is the custodian of all property of the synod.

The motion contended that, despite the incorporation of LCMS, the existence of the synod as an unincorporated association persists. According to the motion, before incorporation there was only one synodical entity, the unincorporated association, but after incorporation, the unincorporated association continued, and the corporation was added. In other words, since incorporation, there have been two parallel entities. One is the unincorporated association of synod. The other is the Missouri corporation.

The motion contended that whatever the interests of corporate synod might be, the real party in interest – the party to whom the benefits would flow on the issues to be decided in the case – is the unincorporated association.

Why would that matter? Because the unincorporated association has members who are Texans. The congregations and ordained clergy in Texas are members of synod in the sense of synod as an unincorporated association. If the association of which they are members is the real party in interest and an indispensable party that must be joined in the lawsuit, then the absolute diversity of citizenship dissolves. The proposition of the motion is that “Synod is an unincorporated association with members throughout the United States, including Texas, and is therefore a citizen of Texas for diversity jurisdiction purposes.”  (Motion, ¶ 2.)

LCMS’ Defense Against the Motion

Because the key to the motion to dismiss is the claim that there is a second sense of the word “synod” besides the Missouri corporation, a key contention of LCMS’ amended complaint is about the word “synod.” Against the claims of the motion, the amended complaint denies that there is an unincorporated association. It flatly asserts that no such association exists. Paragraph 15 of the amended complaint says:

The Synod in 1894 incorporated what is now known as LCMS, the Missouri nonprofit corporation.[6] Synod did so to carry out its property, business, and civil law functions, including the ability to sue and be sued. The Synod does not exist as a civil entity or unincorporated association.[7]

________________________

[6] The nonprofit corporation LCMS, originally formed in 1894 as the “German Evangelical Synod of Missouri, Ohio, and other States,” has had its governing documents amended in convention from time to time. This includes convention action to establish LCMS’s present name, which is identical to that of the Synod, to restate the articles in 1956, and to adopt the provisions of Missouri’s “General Not-for-Profit Corporation Act” in 1967. The Missouri nonprofit corporation LCMS has the same Constitution and Bylaws as the Synod, the church body or ecclesiastical denomination. The members of LCMS are the same members as the members of the Synod. The officers of LCMS are the same as those of the Synod. The Synod convention is the “ultimate authority of the corporation” (i.e., LCMS) just as it is the “legislative authority” of the ecclesiastical denomination (i.e., Synod).

[7] Any attempt to declare the member congregations of the Synod to constitute a purported unincorporated association, as has been already attempted by Defendant CTX in seeking to dismiss this action, would run roughshod over the Synod’s long-standing, definitive, and exclusive exercise of its rights to establish its polity and form of legal association in the free exercise of its religious beliefs and to incorporate and represent itself before the state, as LCMS.

According to the amended complaint, the basic claim of the motion to dismiss is a false dichotomy. According to the LCMS, there is no dichotomy between the Missouri corporation and a multi-state unincorporated association because there is no unincorporated association. If that were true, then the sense of the word “synod” posited by CTX, Christian, and Bannwolf would be a smoke screen to cloud the simplicity that the only party in interest on the plaintiff’s side was the single Missouri corporate entity. There were no parties in interest on the plaintiff’s side who are citizens of Texas. Complete diversity of citizenship does exist, and therefore the federal court has jurisdiction.

The Court’s Dismissal and Remand

On November 20, 2024, U. S. Federal Magistrate Judge Dustin M. Howell issued his Report and Recommendation to the presiding Judge David Alan Ezra. The Recommendation:

  • Determined that along side the LCMS Missouri corporation there is another entity: synod as an unincorporated association.
  • Determined that the association has members who are Texans, namely, LCMS congregations and ordained ministers, and hence the association has citizenship in Texas.
  • Determined that synod as an unincorporated association, not the Missouri corporation, is the real party in interest and an indispensable party.
  • Since diversity of citizenship should be considered as if all indispensable parties were joined in the suit, there is no absolute diversity of citizenship and hence no federal jurisdiction over the case.

The magistrate judge said:

As such, [as an unincorporated association] it is a citizen of every state in which its members reside. Americold Realty Tr. v. Conagra Foods, Inc., 577 U.S. 378, 381 (2016) (adhering to its “oft-repeated” rule that diversity jurisdiction in a suit involving an unincorporated entity depends on the citizenship of the entity’s members). Because, by its own admission, the Synod has members (i.e., member congregations and individuals) in Texas, the Synod is a Texas citizen.

On February 3, 2025, Judge Ezra issued his Order Adopting Report and Recommendation. He swallowed the magistrate’s theory hook, line, and sinker. Here are some excerpts:

LCMS claims that the formation of LCMS as a nonprofit corporation precludes the existence of Synod as a separate unincorporated association. According to LCMS, TUUNAA [the Texas Uniform Unincorporated Nonprofit Association Act] is not intended to, and does not, create a parallel “unincorporated nonprofit association” where a group has already “chosen to incorporate.” [Order, pp. 6-7, citations omitted]

The Court concludes that it is not against Texas law to recognize the Synod as an unincorporated association. Indeed, the Texas Supreme Court has also recognized that churches may be deemed an unincorporated association pursuant to the TUUNAA, even where the church creates a corporation for purposes of acquiring property. See Episcopal Diocese of Fort Worth v. Episcopal Church [citation omitted].

LCMS is a Missouri nonprofit corporation. The Synod is not. While LCMS may act on behalf of the Synod, it is not the Synod itself. In other words, the two entities are not one and the same. Therefore, it is an appropriate application of the unambiguous Texas law that the Synod may be classified as an unincorporated nonprofit association as the Synod is an organization existing for the common, nonprofit purpose. [Order, pp. 10-11, citations omitted, emphasis in original]

The Recommendation concludes that the Synod [as an unincorporated association] holds the substantive rights at issue here and LCMS cannot show that it possesses rights with respect to Defendants that are independent of Synod. Therefore, the Magistrate Judge recommended that the 2023 action should be dismissed for failure to prosecute in the name of the real party in interest. [Order, p. 17, citations omitted.]

The Synod’s bylaws acknowledge that LCMS (as “Corporate Synod”) may hold title to certain property, but that property is considered property of the Synod [as an unincorporated association]. [Order, p. 18]

“The Synod owns the properties of all agencies of the Synod, including its institutions of higher education, regardless of how such properties are titled.” [Order, p. 19, citing and quoting Bylaw 3.51 I and Resolution 4-04]

In one part of the Order, the Court delved into the capacity to sue and be sued. This is an important aspect of the motion in two ways.

First, the Order depends on more than just the existence of the unincorporated association. Even if there is a second entity, but that second entity can neither sue nor be sued, its existence would be irrelevant to diversity of citizenship in a lawsuit. Lawsuits are exactly where capacity to sue and be sued is exercised. If the synod as an unincorporated association exists but lacks this capacity, then it cannot be joined as a party, only corporate synod can be the party, diversity of citizenship would exist, and federal diversity jurisdiction would exist.

Second, the capacity to sue and be sued would say something about the existence of the unincorporated association. The Order points to the synod’s constitution, bylaws, and the LCMS Board of Directors’ Policy Manual as evidence that the synod as distinct from “corporate synod” can sue and be sued. Thus, the Court asserted that it was not violating the synod’s nonprofit or religious rights to decide for itself questions of polity and governance insofar as the capacity to sue and be sued is concerned. The Court was simply taking synod at its word. Pause and reflect on the implications of that. Since LCMS itself says another entity has capacity to sue and be sued, it becomes embarrassingly unconvincing to still argue that the entity does not even exist. How can an entity have capacity without existence?

This is rudimentary stuff. It is not technical, not advanced, not legalistic. Capacity presupposes existence. A thing that can sue or be sued exists. And then, for diversity purposes, it must have citizenship somewhere.

So that looks bad for the LCMS, would you not say?

But, as Clint Eastwood sagely said, “A man’s got to know his limitations.” Federal district courts have limitations. Did this one know its limitations? Does the judge’s exegesis of our bylaws rule? Is a judge even supposed to have engaged in an interpretation of our bylaws?

The Appeal

The LCMS appealed the Order to the U. S. Court of Appeals for the Fifth Circuit. The record from the lower court has been transmitted to the appellate court. With the record complete, on March 18, 2025, the Court of Appeals issued its briefing schedule.

The LCMS filed its appellant’s brief on April 28, 2025. This could be the district court’s Clint Eastwood moment.

But that is not all.

Quite impressively, numerous organizations have filed friend-of-the-court briefs supporting the LCMS and calling stridently for the reversal of the district judge. They say he was out of bounds even looking into our bylaws and interpreting them, never mind how logical he might have been when reading them. That is not for him to do. He must accept the interpretation that we, the church, ourselves put upon our own bylaws. He does not have jurisdiction to rule our church. When he came to the point in the road where, to proceed further, he would interpret our bylaws, he was supposed to halt right there and leave the interpretation to us. That’s our freedom in this country. To proceed was a trespass upon our domain, as one of the briefs calls it.

Get a load of the friends of the court who also are our friends:

  • Ethics and Religious Liberty Commission
  • National Association of Evangelicals
  • The Assembly of Canonical Orthodox Bishops of the United States of America
  • The Aleph Institute
  • The Anglican Church in North America
  • The General Conference of Seventh-Day Adventists
  • The Texas Catholic Conference of Bishops

That is a broad coalition of religious people: Baptists, Evangelicals, Orthodox, Jewish, Anglican, Seventh-Day Adventists, and Roman Catholics all joining with Lutherans for religious liberty against judicial overreach.

And also:

  • The State of Missouri

The State of Missouri says that as a state, it has an interest by its laws of religious incorporation that encourage the religious life and liberties of all who choose to incorporate there. The district court cast off the Missouri corporation with all the life, liberty, and religious interests that Missouri corporation law protects and imposed instead an unincorporated association by Texas law. Missouri says that exceeds the bounds of the law and that Texas and the federal courts in Texas must honor the Missouri law of its Missouri corporation.

Missouri also addresses the spectre that if the district court proposition stands, would that mean the LCMS is governed by the varying laws of every state where it has congregations or pastors? What, then, is the point of choosing to incorporate in Missouri if the sister states fail to honor Missouri law as they should? The legal environment would turn into a crazy quilt.

The brief of the two school associations is especially cogent and incisive. In a direct shot at the district judge, it says that the question of legal form of entity – the question whether besides the Missouri corporation there is a parallel unincorporated association – is not a neutral question of law. It is a religious question where a church is concerned, and the court “trespasses” if it proceeds across the boundary between church and state to decide that religious question for us.

The same brief also exposes a logic bomb in the district judge’s reasoning. The “neutral principles” doctrine says that sometimes courts can decide issues between religious parties when the issues are not especially religious, such as title to real estate. This case has a claim about title to real estate, so the court thought it could apply “neutral principles.” The non sequitur of the court’s foggy mindedness however did not apply neutral principles to the title question. It applied what it pretended were “neutral principles” to a different question, the question of the internal government of the church, whether by Missouri corporation or unincorporated association. There are no neutral principles for a secular court to decide religious questions. So there were no truly neutral principles applied to the question about a parallel unincorporated association.

The brief of the rest of the friends of the court (other than the religious scholars) states the issue very well as:

At issue in this appeal is the extent to which a federal court may usurp for itself the right to determine a religious community’s undisputed understanding of its own polity and self-governance for purposes of determining federal diversity jurisdiction.

Look at the language being used. The friends are not alleging a mere mistake. They allege a usurpation. These briefs are being quite critical of the district court. The next sentence answers the question saying, “The district court’s decision that it was authorized to intrude upon such matters is plainly unconstitutional.” They are calling it an intrusion. The brief of the two school associations calls it a trespass, and not only so, but hear this: “The district court should have recognized that its searching inquiry into the texts of church governance and beliefs and understandings of its leaders constituted a trespass on sacred lands.”

Trespass. Intrusion. Sacred lands. The court should have halted at the boundary. A man’s got to know his limitations. The next sentence from the school associations’ brief says: “Then, it should have stopped. It should have deferred to the judgment of the Synod that LCMS represented its civil identity and organization, and moved on.” These are some blunt briefs.

In another passage that brief says:

Rather, the district court charged into this sensitive question of church identity and organization. It conducted its own review of LCMS’s and the Synod’s governing documents. It discounted a declaration from the relevant religious authority explaining how LCMS’s and the Synod’s structures are direct implementations of theological precepts.

Whenever my dad used the expression “charged into,” it was a description of my teenage recklessness. Quite the critique.

Of course, the affidavit of the Secretary of the LCMS, Rev. Dr. John W. Sias, explaining the polity of our church to the court is exceptionally strong evidence. We all know he is a walking Rolodex™ of the constitution, bylaws, and history of the synod. But I found myself wondering about an argument that could be added, on the basis of the even greater authority of the synod in convention and its exercise of that authority in this case by resolution, as follows:

  1. The synod in convention is declared by the organizational documents to be the final, supreme, or ultimate authority as to nearly everything, limited only by Scripture and the confessions of the Lutheran church in the Book of Concord.
  2. In an exercise of that authority, the synod in convention did litigate or adjudicate the questions giving rise to the civil case, resolving them formally in Resolution 7-03 of the 2023 triennial convention.
  3. Therefore, the district court blithely waives off not merely the affidavit of the Secretary, which would be bad enough. It further discards the act of the synod in convention, which is the highest ecclesiastical authority.
  4. This is tantamount to saying that the people of our church are simply disallowed by the federal courts from governing ourselves as to our own supervision of our school. That would be bad enough, but further it is a school that prepares our pastoral candidates for entry into seminary, prepares teachers in our parochial schools, and prepares lay people in all vocations to carry them out as called by God, which (namely, our doctrine of vocation by which a cobbler is as much called of God to cobble as is a monk to pray) is among the most Lutheran of Lutheran doctrines.

Without engaging in so much drill-down into the bylaws as to bury the point, but going only far enough to be sufficiently convincing that the synod in convention is the supreme ecclesiastical authority in this case (Secretary Sias could possibly point to better examples), consider the following three provisions, and then the linked resolution of the synod in convention about the CTX matter.

Article IV Meetings

This corporation shall have general meetings, called conventions, at least once every three years, or as often as may be determined by resolution of the Synod in convention. Special meetings may be called in such manner as may be provided by the Constitution or Bylaws of The Lutheran Church—Missouri Synod. All officers and agencies of the Synod, defined in such Constitution or Bylaws, shall be responsible to the Synod convention, which is the ultimate authority of this corporation.

1.4.1 The delegate convention of the Synod is the legislative assembly that ultimately legislates policy, program, and financial direction to carry on the Synod’s work on behalf of and in support of the member congregations. It reserves to itself the right to give direction to all officers and agencies of the Synod. Consequently, all officers and agencies, unless otherwise specified in the Bylaws, shall be accountable to the Synod for all their actions, and any concerns regarding the decisions of such officers or agencies may be brought to the attention of the Synod in convention for appropriate action. This provision does not apply to specific member appeals to the Concordia Plans, which has its own appeal process for such cases.

3.3.4 The Board of Directors of the Synod is the legal representative of the Synod and the custodian of all the property of the Synod. It shall be accountable to the Synod in convention for the discharge of its duties.

The district court arrogated to itself a pretended power to supplant the synod in convention. I was a voting lay delegate. I participated in floor debate in the floor committee supporting the resolution. I engaged in much pre-convention communication with the delegates by a variety of means (writings, radio interviews, etc.) in support of that resolution. I received a lot of communications from delegates. At the convention, delegates were talking about this. The convention workbook was chock full of information about the CTX matter. The convention even adopted a motion suspending the rules to allow Dr. Don Christian to speak on the floor against the resolution. From these experiences I know that the delegates were well informed, acted consciously and with deliberation, and devoted the time necessary for conscientious action. The convention voted for the resolution overwhelmingly. But the court discarded our legislation or adjudication of the matter. It substituted its ideas, as if we have no right to be a religious organization and organize ourselves as we wish, the better to nurture our faith, practice, and polity.

Were there a procedure by which I would have had a chance to speak to the district judge about his exegesis of our bylaws, I would have said, that is as may be, but the synod in convention did not resolve to take action directly as some unincorporated association. It resolved to encourage the officers of the Missouri corporation to act, including the Board of Directors of corporate synod, an authorization which they needed from us, and which they are obeying. Note particularly the formulation in Article IV quoted above, that the synod in convention “is the ultimate authority of this corporation,” not an unincorporated association, and of 3.3.4 that the Board of Directors “shall be accountable to the Synod in convention for the discharge of its duties.” But the court disallows us from proceeding with our own procedures as we interpret them and act on them. It forces us to act as if our constitution, bylaws, and doctrines were only whatever the court grants us its dispensation to have.

I was concerned about the no-brainer syllogism that the district court used. But the LCMS is far from alone is saying, and bluntly, that the court overreached to the extent of intrusion and trespass, and therefore the court’s exegesis does not matter. And I also think that if the act of the synod in convention is argued showing its interpretation about corporate entity, that should rule.

Conclusion

I have only read these briefs once. I must read them again. No doubt I am leaving out some important stuff. And we shall see where this goes. How do CTX, Christian, and Bannwolf reply? Do they say, oh no, the LCMS and everybody else are wrong, the courts are in the business of deciding for religious people what their internal government is? No matter how one tries to dress that up, the emperor might have no clothes.

Stepping back, way back, to look at the forest and not get lost in the trees, an interesting turnaround has happened here. The blogospheric defenders of the rebels at CTX contended that they were on the side of freedom and the big bad synod was a tyrant. But now look at the posture. The synod and so many friends are defending liberty against district court “trespass into sacred land” and CTX has to oppose religious liberty to sustain its case. They have to side with a big bad judicial absolutism. The third argument of the brief of the Religious Liberty Scholars is: “Decisions Like the District Court’s Threaten the Religious Liberty of All Americans.” The third argument in the brief of the rest of the friends is: “The Far-Reaching Consequences of the District Court Decision.”

This is a rich and momentous story, and that is why it has drawn in so many people who are speaking in striking terms.

[1] This endnote gathers a list and links to essays that I have written and radio interviews that I have done on the CTX matter.

Pastor Todd Wilken has interviewed me in the following episodes of Issues, Etc.

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