Court overturns Virginia ban on church incorporation

By The Associated Press

04.17.02

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ROANOKE, Va. — In a lawsuit brought by the Rev. Jerry Falwell, a federal judge ruled that an 18th-century Virginia law banning churches from receiving corporate charters unconstitutionally restricts the free exercise of religion.

U.S. District Judge Norman K. Moon ordered the State Corporation Commission to grant Falwell's Thomas Road Baptist Church a corporate charter, needed to accomplish the Lynchburg minister's dream of a master-planned Christian community.

Moon wrote that the state constitution discriminates based on religious status.

"Unlike other groups in Virginia, members of 'a church or religious denomination' are ... denied the benefits of incorporation because of their religious status," Moon wrote in an opinion issued April 15 in Lynchburg.

Corporation commission spokesman Ken Schrad said yesterday he did not know if the commission would grant Falwell a charter.

"We're deciding right now whether or not to follow the order or appeal the order," Schrad said.

Falwell said his ministry has grappled with Virginia's restrictions since the 1950s.

"The worst part has been that the church has had to go before a circuit court judge for every business transaction," Falwell said in an interview. "It's not been something we couldn't deal with, but it has been very burdensome."

Virginia's ban on church incorporation is rooted in Thomas Jefferson's 1779 Statute of Virginia for Religious Freedom, which calls for a strict separation of church and state. The General Assembly outlawed corporate charters for churches in 1787 and included the ban in Article IV, Section 14 of the Virginia Constitution.

In addition to the ban on incorporation, churches are not allowed to own more than 15 acres of property in a city or town and 250 acres in any one county. Virginia and West Virginia are the only states with such restrictions.

A.E. Dick Howard, a University of Virginia law professor and former counsel to the General Assembly, said he had recommended removing the laws while supervising the 1971 revision of Virginia's constitution.

"To allow anybody to not incorporate based on religion was on its face a violation of the First Amendment," Howard said. "That's an easy call."

The General Assembly, however, decided to keep the laws to maintain a rigorous separation of church and state, Howard said.

Since opening Thomas Road 46 years ago in Lynchburg, Falwell's ministry has grown into a sprawling 4,300-acre enterprise that includes a broadcasting network, Liberty University, a retirement village and a youth camp.

The 5,200-seat church, however, hasn't expanded from its original plot of 28.88 acres of residential property in Lynchburg.

Falwell, who wants to build a 6,000-seat sanctuary on 60 acres near his university, sued the state in November in an attempt to overturn laws that forbid churches from obtaining corporate charters and restrict the amount of property they can own.

Moon has yet to rule on a second lawsuit that challenges Virginia's property restriction.

A corporate charter would give Falwell's church added protection from liability lawsuits, the ability to sue as an organization and the power to enter contracts.

It would also allow Falwell to eventually include his entire ministry under one corporate umbrella. Currently, the ministry is controlled by a dozen or so mini-corporations under separate charters and boards of directors.

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Falwell argues against Va. law limiting church property
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