The Board of Pensions of the Evangelical Lutheran Church in America, Minneapolis, won a major victory in its long-running legal dispute with a group of dissident pastors and lay workers unhappy with its South Africa divestment policy.
The Minnesota Court of Appeals Nov. 28 ruled in favor of the ELCA.
The court said the divestment strategy was motivated by the church's conclusion that apartheid should be rejected as a matter of Lutheran faith. As such, a civil court does not have any jurisdiction over the issue, the three appellate court judges said.
Last spring, a state district court had agreed to hear a case brought by the pastors' group, the Pension Defense Fund. The organization accused the board of breach of contract and fiduciary duty.
The appeals court decision said the ELCA's religious decision to divest pension assets was protected from civil attack by the First Amendment and the "conscience" clause of the Minnesota Constitution.
The Pension Defense Fund intends to immediately appeal the case to the state Supreme Court, said the group's attorney, Lynn Basich.
John G. Kapanke, president of the Board of Pensions, said it's ironic the two sides still are battling in court, since "we removed investment screens in 1993 and the last South Africa-free portfolio was terminated earlier this year."
The Board of Pensions manages about $3 billion in a cash balance plan.