WVa SCt immunizes religious schools and camps for false advertising about services

State ex rel. Morrisey v. Diocese of Wheeling-Charleston, 851
S.E.2d 755 (W.Va. 2020)

In response to a certified question, the West Virginia Supreme
Court, over a dissent, held that the AG could not sue the Diocese and a former
bishop for violating the deceptive practices provisions of the West Virginia
Consumer Credit and Protection Act, reasoning that the law didn’t apply to
educational and recreational services offered by a religious institution.

The allegations of deception related to the Diocese’s knowing
employment, for decades, of people who admitted to sexually abusing others or
who were credibly accused of sexual abuse at its schools and camps. The Diocese
allegedly neither disclosed that material information to consumers nor warned
them of the alleged dangers inherent to the educational and recreational
services it provided, and also falsely represented that it conducted background
checks (an allegation of affirmative misrepresentation that is buried in a
footnote of the main opinion). The alleged deceptive practices were advertising
services not delivered and failing to warn of dangerous services.

The relevant statute says: “Unfair methods of competition
and unfair or deceptive acts or practices in the conduct of any trade or
commerce are hereby declared unlawful.” “ ‘Trade’ or ‘commerce’ ” is “the
advertising, offering for sale, sale or distribution of any goods or services
and shall include any trade or commerce, directly or indirectly, affecting the
people of this state.” “ ‘Services’ include[ ] … ‘privileges with respect to
… education[ and] recreation.’ ”

Nonetheless, West Virginia Code §§ 18-28-1 to 7 created a
conflict by imposing requirements on “private, parochial or church schools or
schools of a religious order” (church schools), such as observance of a 180-day
instructional term, maintenance of attendance and immunization records,
compliance with the West Virginia school bus safety regulations, administration
of a nationally-normed standardized achievement test, and establishment of a
school specific crisis response plan. If a church school meets those
requirements, then the Legislature has directed that it “shall [not] be subject
to any other provision of law relating to education except requirements
of law respecting fire, safety, sanitation and immunization” (emphasis added).
The majority held that, though church schools might not be exempted from the
entire CCPA, this preemptive provision barred “the regulation of educational
services offered by a church school under the deceptive practices provisions of
the CCPA.” [Are living circumstances part of “educational services”?]

The deceptive practices provisions were “provisions of law
relating to education” when the AG tried to apply them to educational services.
“[W]hile the deceptive practices provisions may regulate the commercial
relationship between a church school and consumers, its enforcement depends on
the assessment of the qualities of the education actually supplied by the
church school.” Finding a violation would require “passing judgment upon the
substantive educational services actually provided.”

Because of this preemption and because of West Virginia’s
public policy of freedom of religion in education, there was also implied
preemption of any regulation of educational and recreational services by a
religious institution, because it was silly to preempt regulation as to only school-related
services, thus allowing the AG to regulate false statements made by a church
about a trip it sponsored but not false statements by a church-affiliated
school about the same trip. [I’m not sure that argument proves what the
majority wants it to prove, and it’s also pretty odd as a theory: explicit
preemption is usually limited to what it explicitly covers.] Thus, and despite
the fact that the CCPA is a remedial statute intended to be liberally
construed, “[i]t would also be absurd to conclude that the Legislature intended
to exempt a church school’s representations about its educational services from
regulation under the deceptive practices provisions of the CCPA, but not those
same representations when made by the affiliated religious institution
regarding its recreational services.”

The majority ended by commenting that the allegations were
nonetheless “deeply troubling,” and might have allowed liability under other
legal theories, such as a violation of mandatory reporting law, which
definitely covers religious institutions and their schools and camps.

Justice Workman’s dissent was persuasive:

The majority opinion is
transparently result-oriented which explains its logical incoherence and sins
of omission. The issue before the Court is one of fairness and honesty in
commercial communications to the public—potential purchasers of goods and
services. The fundamental question involves matters of unfair or deceptive acts
or practices in advertising or selling and in advertising based on false
promises. That is all. Nothing else is at issue. This case has absolutely
nothing to do with the free exercise or expression of religious thought and
nothing to do with regulating religious institutions in the sense of excessive
State entanglement. As brought and pled by the State, what is at issue is
alleged false promises and deceptive advertising promoting a safe environment
aimed at getting students and campers to attend for-fee-based schools and
camps, when alleged facts indicated the contrary to be true.

As the dissent pointed out, the yearly fees ranged from
$6,000 to $8,000. “The Diocese also provides partial scholarships, arranges
financing through third parties, and uses in-house installment payment plans.
Just as any other creditor may act, the Diocese has availed itself of the
courts and legal system to enforce credit agreements.” The Diocese advertises
to the public at large with no faith-based restrictions for either schools or
camps. Starting in 2002, it advertised its “Safe Environment Program for the
protection of minors from abuse by religious and lay employees of the Diocese
and volunteers,” which plainly sought to “attract consumers away from
competitors that did not advertise similar safety measures.” 

In the dissent’s view, truthful advertising and safety are
purely secular concerns. The majority agreed that “services” encompassed the
activities here, and that should have been enough.

Instead, the majority wrongly asserted that enforcing the
deceptive practices provisions would require “assessing the qualities and
substance of the education actually provided.” But the allegations here did not
require anything of the sort. “Requiring fairness when selling advertising and selling
educational and recreational services simply does not interfere with the
services themselves. Rather, it is the marketing of the services that is at
issue.” Given the CCPA’s specific coverage of educational services, this
manufactured conflict was even more unjustified; the legislature has exempted
other institutions from the CCPA, such as lawyers, accountants, stockbrokers,
and licensed pawnbrokers, but not religious institutions.

The majority approach authorized religious schools to
advertise one tuition but, halfway through the year and as a matter of policy,
demand more or the student will be expelled. Religious schools could advertise ten-to-one
student/teacher ratios and deliver forty-to-one. This freedom would provide
them an unfair advantage over nonreligious schools.

I share the dissent’s view that “most incredible is the
sophistry exhibited in the opinion’s bootstrapping into its unfounded
conclusion the issue of recreational services.” As it pointed out, the supposedly
preemptive code provisions simply do not cover recreational services or camps,
but now religious institutions can advertise whitewater rafting or other
dangerous activities, promise fully certified instructors, and deliver nothing
of the sort. This results both in consumer danger and competitive disadvantage
to regulated camps.

“[N]othing about religious freedom, thought, or instruction
is infringed upon by virtue of enforcing an act mandating that entities
offering services for-fee tell the truth about the services.” Fear of overly
broad enforcement actions wasn’t a justification for disallowing these specific
claims, even if remedies would have to be carefully crafted to avoid infringing
on religious freedom.


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