An Award of Punitive Damages Against A Religious Institution:
Is It a Constitutional Violation?

By MARCI HAMILTON
hamilton02@aol.com
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Thursday, Sep. 09, 2004

Recently, a novel constitutional basis has been proposed for limiting punitive damages in civil cases: The First Amendment's Free Exercise Clause, which guarantees the freedom to exercise one's religion. This basis is not only novel - it's ridiculous. And in the context in which this argument has been made - clergy abuse cases - it's actually offensive.

Can it truly be the case that tobacco companies who disregarded health risks to adults deserve punitive damages, but churches that disregarded horrific, traumatic abuse to children with immense psychological health consequences do not?

Can it truly be the case that car companies that disregarded faulty brakes deserve punitive damages, but churches that disregarded intentional rape of the defenseless do not?

That's exactly what this argument - which was recently made by the Becket Fund in an amicus (friend-of-the-court) brief filed in Arizona Superior Court- suggests.

The Becket Fund has declared that it will be filing similar briefs "in every case seeking punitive damages against religious institutions from whatever tradition." So the issue is not just an Arizona issue, or a Catholic Church issue. It's a national one.

But every court that addresses this argument ought to reject it - for it is simply wrong. And the courts that confront this argument in clergy abuse cases ought to passionately reject it - for it slights the terrible suffering of abuse victims, and the wrongs of their abusers, and those who knew of the abuse but did nothing.

No Constitutional Basis For Voiding Religious Institutions' Punitive Damages

The Supreme Court has already put constitutional limits on punitive damages awards in civil cases - requiring that they be proportional to compensatory damages, for example. ("Punitive" damages punish and deter the defendant; compensatory damages aim to "make the plaintiff whole" by putting a value on actual harm suffered.)

These sensible limits derive from constitutional Due Process. There is no need to imply further limits from the First Amendment's Free Exercise Clause. Nor does that clause - which was intended to prohibit religious persecution - imply any such limit. As I have explained in a prior column, the last thing our Framers wanted to do was to put churches (and other religious institutions) above the law.

Constitutional doctrine is clear: Suppose a law - like civil laws authorizing punitive damages -- is neutral and generally applicable (that is, it applies to everyone who has performed the same conduct). In that instance, there is no Free Exercise problem if the law applies to religious entities and persons too.

That was the holding in Employment Division v. Smith, the landmark 1990 peyote case. There, the Court held that it was no defense if the defendant had used the illegal drug in the course of religious ceremonies.

Put another way, the Free Exercise Clause does not create an implicit exemption to the drug laws. Nor does it create an implicit exemption to punitive damages laws.

Illegal actors need to be deterred from antisocial behavior, such as widespread childhood sexual abuse. Their religious identity is simply and constitutionally beside the point. Punitives exist to punish reprehensible conduct, and the identity of the bad actor is irrelevant. Punitives are directed not at belief - religious or otherwise - but at harmful conduct. Laws authorizing punitives are thus exactly the kind of generally applicable, neutral laws the Court blessed in Smith.

When the Catholic Church knowingly and repeatedly placed pedophiles in direct contact with children, it caused devastating harm. If a corporation generated that kind of harm, no one would hesitate to assess punitives and even to shut down the business, because the harm is so severe. There is no justification - constitutional or otherwise -- for treating religious entities generating the same harm any differently.

Even If Strict Scrutiny Applied, the Laws Would Still Be Constitutional

The amicus brief in the Arizona case tries to distinguish Smith by arguing that punitive damages are not in fact neutral, generally applicable laws, because they are applied on a case-by-case basis. But that's ridiculous: Every law is applied on a case-by-case basis in the courts. For instance, the law at issue in Smith was applied to a particular offender.

Moreover, suppose for a moment that the brief is right - and strict scrutiny by the courts is necessary. Punitive damages laws would still survive.

Strict scrutiny requires a compelling interest, and the lack of less constitutionally-restrictive alternatives. Here, both tests are fulfilled.

States have a compelling interest in deterring, preventing, and punishing childhood sexual abuse. That interest is even more compelling when the perpetrator is an individual that society has taught the child to trust, such as a teacher, doctor, or clergyperson. The state has a further compelling interest in deterring, preventing, and punishing institutions that knowingly place pedophiles within easy reach of children--who have been taught to trust the adults within the institution. And a civil penalty such as punitive damages is less restrictive than a criminal penalty - the obvious alternative.

Criminal prosecutions under the Racketeering-Influenced Corrupt Organizations (RICO) laws could in theory put a church into receivership - with a new, civil head. It's hard to get more restrictive than that!

Other criminal prosecutions - for conspiracy, and aiding and abetting - could lead to long prison sentences and perhaps destroy the institution for lack of leadership. That's pretty restrictive, too.

Absurdly, the amicus brief suggests criminal penalties are actually less restrictive than civil punitive damages awards. I think any prisoner will tell you otherwise. So will the blaring headlines if church leaders go to jail. These arguments are unnecessary, however, because punitive damage law is generally applicable and neutral and therefore constitutional.

But what about the argument that punitive damages will force bankruptcy, and criminal prosecutions will not? For one thing, it's speculative: Jail time will dry up donations quite fast. For another, bankruptcy is a means of protecting the Church, not necessarily a bad result for the Church. And complete dissolution of the institution as a result of the fines is rarely the actual result.

In general, the Church won't lose all its property, but rather will suffer a lien against some of its property in the amount of the award. To lift the lien, the Church will have to pay the damages, over time. That is no violation of the free exercise of religion.

Punitive Damages Are Fully Merited in the Typical Clergy Abuse Case

In sum, the Free Exercise argument against punitive damages for religious institutions isn't just weak: It's nonexistent. And the invocation of this argument in clergy abuse cases is particularly absurd - for nowhere are punitive damages more justified.

These cases always turn on virtually identical facts: Someone tells a priest that another priest raped or otherwise sexually abused a child. That priest tells the Cardinal or Archbishop's office. That office fails to report the crime to the police - and usually, fails to contact the victim either.

If the Church does contact the victim, it's only to intimidate the victim out of going to the police. If the victim makes any noise, the Church offers a settlement - but only in exchange for complete confidentiality. That confidentiality then ensures other children remain vulnerable.

What about the offending priest? He might be sent for a short stay at a church-sponsored clinic. But soon, he'll return to the Archdiocese - and active ministry. He'll still have access to children -- the children of the new parish and the attached parochial school. And he will arrive with a letter in good standing, and not a whisper of his past rape or abuse. Soon, he'll rape or abuse another child. The cycle starts all over again.

In this typical case, the moral and legal culpability of the Church is enormous. Of course the institution deserves to be subject to punitives.

Why Compensatory Damages Aren't Enough: Deterrence, and Insurance

Aren't compensatory damages enough? Not here - not by a longshot.

Punitives are necessary to get the attention of the institution of the Church, and to force it to change its ways. Institutions are inherently static, and act out of self-preservation instincts.

It takes a truly significant prod to move a criminal or tortious institution off its current position, and toward a position of social responsibility. And when an institution has been entrenched in its ways for many years (or centuries), that institution is going to be particularly adverse to change.

The question that must be posed to any entity arguing - even as a policy matter -- against punitive damages in clergy abuse cases is: How does it propose to deter this criminal, illegal, and antisocial behavior in the future? It is obvious that self-policing is inadequate to serve the public good.

Incarcerating the pedophiles and the leadership that aided and abetted their behavior is likely to deter particular individuals (unless current, shockingly short statutes of limitations make that incarceration impossible). But such incarceration does not address the institution's culpability, or effectively deter it for the future: An institution may simply accept that criminal prosecutors will "clean house" for it every so often (and belatedly), and keep right on acting as it always has. There are always candidates willing to be promoted through the ranks.

The "Charitable Immunity" Doctrine Has Been Rejected by the Courts

It's important to distinguish policy realities from constitutional issues here. Churches are tax-exempt as a matter of policy - but they don't have a right to be tax or damage-exempt as a matter of constitutional law.

Arizona might have tried to exempt churches from its punitive damages laws, as a matter of policy. In the absence of a legislative exemption, the courts are obligated to apply punitives to those whose actions trigger them.

The amicus brief in the Arizona case comes up with some policy arguments against punitive damages for religious institutions: These damages hurt "innocent donors." But so too do corporate punitive damages hurt "innocent shareholders." And if a political organization commits crimes, the punitive damages against it will hurt "innocent donors" as well. This is the old argument used to justify charitable immunity--the now-discredited rule that charitable entities' coffers should be shielded from claims in tort for the tortious conduct of their employees. The argument has been soundly rejected, because it is impossible to defend in this society the notion that one who caused severe harm should be held unaccountable. It goes against everything on which this country was built--the rule of law, fairness, and personal responsibility.

The truth is that the "innocence" of those who fund an institution is no defense to its responsibility for its intentional bad acts - or society's ability to punish and deter such acts through punitive damages.

The Crux of the Issue: Insurance Limitations

The reason punitive damages are a hot issue now for the Church is not just that they can run into the millions. It's also that they are likely to be paid by the Chruch - not its insurer. But that fact - far from cutting in favor of the Church's anti-punitives argument -- illustrates exactly why they should be awarded in the first place.

The very public policy reason insurers do not insure against punitive damages, is that we don't want insurance to cover the perpetrators of intentional bad acts. So the Church should not whine about not having insurance here. Instead, it should reflect on how it managed to tolerate actions so heinous, that they justify punitive damages, and stripped it of insurance coverage.

Punitive damages aren't just legal and constitutional here - though they certainly are both. They are also necessary and just.


Marci A. Hamilton is a Visiting Scholar at the Princeton Theological Seminary and the Paul R. Verkuil Chair in Public Law at Benjamin N. Cardozo School of Law, Yeshiva University. An archive of her columns, including those on the Catholic Church clergy abuse scandal can be found on this site. Her email is hamilton02@aol.com.

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