The United Methodist Church can sue Southern Methodist University for breach of contract and to enforce its control over the school, the Texas Supreme Court ruled Friday.
The justices ruled that although the church is not a “member” of the university, it still has legal rights to control nonprofit entities it founded even when those entities try to break away.
“We agree with the Conference that it qualifies as a third-party beneficiary of those articles and may thus pursue its breach-of-contract claim against SMU,” Justice Debra H. Lehrmann wrote Friday.
KERA News reached out to attorneys for both the church and school and will update this story with any response.
The ruling is a landmark in protecting religious groups’ legal relationships and reinforces that legal documents – like articles of incorporation – can be binding and must be amended according to the group’s terms.
Friday’s ruling comes as part of the church’s lawsuit against SMU, which has challenged the authority the UMC has over the university.
UMC said in its lawsuit it has control over the university because it founded SMU in 1911 and donated 133 acres of property — and its articles of incorporation asserting any amendments made must be authorized and approved by the church.
The higher court heard arguments from both sides in January, when SMU told justices the school is an independent entity and controlled solely by its board of trustees as ultimate authority.
The five-year legal battle began when UMC members voted in 2019 to assert a ban on LGBTQ+ clergy and prohibit pastors from performing same-sex marriages. That same year, the denomination granted churches the option to leave before the end of 2023 so long as they provided a “reason of conscience” concerning sexuality, causing a major divide.
Soon after, SMU updated its founding documents and made clear their own intention to separate from the church. It changed the articles of incorporation to assert its board of trustees -– not UMC -- had ultimate authority over the university.
The UMC in 2024 voted to lift the ban on LGBTQ+ clergy — but that didn’t end the argument over who has ultimate power over the private university.
The change to the articles of incorporation led the Southern Conference of UMC to sue the university over breach of contract, arguing the church had to approve the school’s departure and the updated governing language.
The church claims because it founded the university, the articles of incorporation grant it the right to block amendments to the documents.
A judge in 2021 ruled in favor of SMU in its lawsuit and dismissed the church’s claims. But the Dallas-area Fifth Court of Appeals reversed that decision in 2023, siding with the conference in its argument that it oversaw SMU.
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