# S. Methodist Univ. v. S. Cent. Jurisdictional Conference of the United Methodist Church Supreme Court of Texas, No. 23-0703 **S. Methodist Univ. v. S. Cent. Jurisdictional Conference of the United Methodist Church, No. 23-0703 (Tex. June 27, 2025). Holding: The Court has jurisdiction because the claims can be decided by applying Texas statutes and SMU's articles without deciding any ecclesiastical question; Business Organizations Code section 22.207 protects the Conference's authority to sue SMU to enforce its rights under the 1996 articles, so section 20.002 does not bar the suit; the Conference may pursue its breach-of-contract claim as a third-party beneficiary of the contract between SMU and the State, at least at this stage; and SMU is entitled to summary judgment on the false-filing claim because the certificate, read as a whole, was not materially false.** Practice areas: business organizations, civil procedure, texas constitution ## Key issues - Business Organizations Code § 22.207, which lets a religious conference elect and control the board of a nonprofit educational corporation, protects the Conference's authority to sue SMU to enforce its rights under the articles of incorporation, so § 20.002's limit on who may challenge ultra vires acts does not bar the suit. - SMU's articles are not a contract between SMU and the Conference, but the articles are a contract between SMU and the State, and given § 22.207 and the articles' express grants of rights, the Conference may pursue its breach-of-contract claim as a third-party beneficiary; SMU was entitled to summary judgment on the false-filing claim because the certificate of amendment, read as a whole, was not materially false. ## Factual History Southern Methodist University (SMU) was organized in 1911 as a corporation to establish and support an institution of higher learning, and its charter has long said it is to be owned, controlled, and managed by a predecessor of the South Central Jurisdictional Conference of the United Methodist Church (the Conference) (Opinion, PDF p. 3). As amended in 1996 with the Conference's approval, SMU's articles provide that it is a nonprofit corporation with no members, "to be forever owned, maintained and controlled by" the Conference, that the Conference may elect and remove for cause members of the board of trustees, that its consent is required to sell or lease campus property, and that no amendment "shall ever be made" without the Conference's authorization and approval (Opinion, PDF p. 4). In 2019, amid doctrinal disagreements, SMU's trustees voted 34 to 1 to amend the articles to delete all references to the Conference and all provisions on the board's composition, and SMU filed the amended articles with the secretary of state on November 15, 2019, without the Conference's approval and with a certificate of amendment (Opinion, PDF pp. 4-5). ## Procedural History The Conference sued for declarations that the 2019 amendments and actions taken in reliance on them are void, for breach of contract, and for filing a materially false instrument under Business Organizations Code sections 4.007 and 4.008; Bishop Scott Jones, the trustee who cast the sole negative vote, intervened (Opinion, PDF pp. 5-7 & n.5). SMU moved to dismiss under Rule 91a, arguing that the Conference is not among those the Code authorizes to sue over ultra vires acts, that no enforceable contract exists, and that the certificate's statement was a conclusion of law (Opinion, PDF pp. 6-7). The trial court dismissed the declaratory-judgment and breach-of-contract claims, then granted SMU summary judgment on the false-filing claim (Opinion, PDF pp. 6-7). The Fifth Court of Appeals held that it had jurisdiction, reversed as to the declaratory, contract, and false-filing claims, and remanded; the rulings on the Conference's other claims and on Bishop Jones's claims became final because neither petitioned for review (Opinion, PDF pp. 6-8 & nn.2, 5). SMU and Paul Ward petitioned for review on November 10, 2023, and the Conference responded on November 29, 2023; the Court requested merits briefing on March 8, 2024, and granted review on October 18, 2024, heard argument on January 15, 2025, and decided the case on June 27, 2025 (Docket; Opinion, PDF pp. 1, 32). ## Issues Presented SMU presents whether the court of appeals erred by expanding the list of persons authorized under section 20.002 to challenge corporate conduct as ultra vires, whether the breach-of-contract claim fails because a nonmember nonprofit's articles are not a contract enforceable by an outside party, and whether the court of appeals erred on the false-filing claim (Brief on the Merits (Southern Methodist University, et al), PDF p. 17; Petition for Review (Southern Methodist University, et al), PDF p. 13). The Conference presents whether section 22.207 gives it authority to sue, whether it has contract rights in SMU's articles as SMU's controlling entity, whether the "pure opinion" defense applies to a section 4.007 claim, and whether it must prove specific monetary damages (Brief on the Merits (South Central Jurisdictional Conference of the United Methodist Church), PDF p. 9). The Court first addressed whether it had jurisdiction despite the church-autonomy doctrine, and then SMU's three issues (Opinion, PDF pp. 9-13). ## Standard(s) of Review The Court reviews summary judgments and Rule 91a dismissals de novo; a Rule 91a dismissal is proper if the allegations, taken as true with reasonable inferences, do not entitle the claimant to relief, and summary judgment requires that no genuine issue of material fact exists and the movant is entitled to judgment as a matter of law (Opinion, PDF pp. 12-13). ## Legal Arguments **Whether the Conference may sue SMU over the 2019 amendments.** **Petitioners (SMU and Paul Ward):** Section 20.002 carefully limits who can bring ultra vires claims, the Conference is not a member, shareholder, the corporation, or the attorney general, and the court of appeals let it evade that limit by repleading the claim as breach of contract (Brief on the Merits (Southern Methodist University, et al), PDF pp. 28-30; Opinion, PDF pp. 13-14). **Respondent (the Conference):** SMU's governing documents vested the Conference with long-standing rights, including that SMU be forever owned and controlled by it and that no amendment be made without its approval; it has statutory and common-law authority to sue, including through section 22.207, which confers authority on a controlling entity (Brief on the Merits (South Central Jurisdictional Conference of the United Methodist Church), PDF pp. 9, 21-22). **Whether the articles create a contract the Conference can enforce.** **Petitioners (SMU and Ward):** A nonmember nonprofit's articles of incorporation are not a contract with anyone, because such a corporation exists to benefit the public and not nonmember third parties (Brief on the Merits (Southern Methodist University, et al), PDF p. 30; Opinion, PDF p. 19). **Respondent (the Conference):** The court of appeals correctly held that the Conference has valid contract rights in SMU's articles as SMU's controlling entity under section 22.207 (Brief on the Merits (South Central Jurisdictional Conference of the United Methodist Church), PDF p. 9; Opinion, PDF p. 19). **Whether the false-filing claim survives summary judgment.** **Petitioners (SMU and Ward):** The certificate's statement was a good-faith legal opinion that cannot be materially false, and the Conference offered no evidence of damages (Opinion, PDF pp. 28-29). **Respondent (the Conference):** SMU violated the Conference's rights by filing a certificate falsely stating that the 2019 amendments were approved as the governing documents required, when it knew it lacked the Conference's approval (Brief on the Merits (South Central Jurisdictional Conference of the United Methodist Church), PDF p. 22). ## Stated Reasons the Court Should Take the Case SMU argued that the Legislature restricted who may challenge an organization's authority to act in order to avoid harassing litigation, that the court of appeals' decision creates a roadmap for litigants to evade that limit by pleading the same ultra vires claim as a breach of contract, and that it broke with settled law that a legal opinion cannot be "materially false" (Petition for Review (Southern Methodist University, et al), PDF pp. 23-24). The Conference responded that the petition identifies no split of authority and cites no case supporting its argument that section 20.002(c) divests the Conference of standing (Response to Petition (South Central Jurisdictional Conference of the United Methodist Church), PDF p. 6). ## Practice Area Tags business-organizations, civil-procedure, texas-constitution ## Procedural Posture/Vehicle Petition for review from the Fifth Court of Appeals after a Rule 91a dismissal and a summary judgment; argued January 15, 2025, and decided June 27, 2025, with a concurring opinion and an opinion dissenting in part (Opinion, PDF pp. 1, 6-8). ## Amicus Involvement - [The Becket Fund for Religious Liberty](https://search.txcourts.gov/SearchMedia.aspx?MediaVersionID=6e712a78-093d-4305-b4ae-ccec0201431e&coa=cossup&DT=BRIEFS&MediaID=d5f249b8-7677-4b01-b3d1-4bc91dd65072) filed an amicus curiae brief on January 2, 2025, in support of the Conference (Opinion, PDF p. 11), and a [response to First Liberty's brief](https://search.txcourts.gov/SearchMedia.aspx?MediaVersionID=1d82f888-10a7-43f0-8197-6602fe296903&coa=cossup&DT=BRIEFS&MediaID=29f46ad8-1d46-453c-bfd0-05c874080c9f) on March 10, 2025. - [First Liberty Institute](https://search.txcourts.gov/SearchMedia.aspx?MediaVersionID=6e9b1f51-a380-4a3f-ae96-14d00396d87c&coa=cossup&DT=BRIEFS&MediaID=f431a770-e9ee-448c-b776-ff7eb496748c) filed an amicus curiae brief on March 7, 2025, which urges dismissal for lack of jurisdiction (Opinion, PDF p. 12 n.7). ## Holding The Court has jurisdiction because the claims can be decided by applying Texas statutes and SMU's articles without deciding any ecclesiastical question; Business Organizations Code section 22.207 protects the Conference's authority to sue SMU to enforce its rights under the 1996 articles, so section 20.002 does not bar the suit; the Conference may pursue its breach-of-contract claim as a third-party beneficiary of the contract between SMU and the State, at least at this stage; and SMU is entitled to summary judgment on the false-filing claim because the certificate, read as a whole, was not materially false (Opinion, PDF pp. 2-3, 9-10, 19, 26, 29-31). ## Court's Reasoning **Jurisdiction.** Under *Masterson*, courts lack jurisdiction over ecclesiastical questions but apply neutral principles of law to matters such as land titles, trusts, and corporate formation and governance involving religious entities (Opinion, PDF p. 9). The Conference chose to establish SMU as a nonprofit corporation subject to Texas law, its claims can be resolved by looking solely to Texas statutes and SMU's articles, and the doctrinal differences that led SMU to amend its articles have no bearing; the Court rejected the Becket Fund's argument that the case cannot be resolved without unconstitutionally impeding the Conference, and noted that if the courts could not decide the case the result would be dismissal, not judgment for the Conference (Opinion, PDF pp. 10-12). **Authority to sue.** Section 20.002(b) says an ultra vires act is not invalid for that reason, and subsection (c) lets only members or shareholders, the corporation, and the attorney general assert it, but section 22.207, which authorizes a religious association to affiliate with, elect, and control the board of an educational corporation, expressly authorizes the Conference to assert and maintain the control SMU disputes (Opinion, PDF pp. 13-16). SMU has no members or shareholders, and the attorney general may sue only to enjoin an unauthorized act, not to set aside one already performed, so SMU's reading would grant a right with no mechanism to enforce it (Opinion, PDF p. 17). The specific provision controls over the general one, and constitutional avoidance points the same way because reading the statutes to bar a religious entity from court would raise tension with article I, section 6 of the Texas Constitution; the Court reserved how its reading would apply to entities not covered by section 22.207 (Opinion, PDF pp. 18-19). **Breach of contract.** In the for-profit context a charter is a contract between the corporation and its shareholders, but a nonmember nonprofit operates for the benefit of the public, so SMU's articles are not a contract between SMU and the Conference (Opinion, PDF pp. 19-22). The articles are, however, a contract between SMU and the State, and the Conference may sue as a third-party beneficiary: the articles contain unequivocal statements that expressly and directly benefit the Conference, such as its right to elect and remove trustees, to consent to the sale of campus property, and to approve amendments (Opinion, PDF pp. 23-25). The Court acknowledged that the State does not bargain over the articles' terms and did not decide whether articles alone could confer third-party-beneficiary status, but held that section 22.207, together with the articles' terms, supplies the needed basis, and it limited the right to sue to the Conference as the party to whom the articles expressly grant rights (Opinion, PDF pp. 25-28). **False filing.** The Court assumed without deciding that a legal opinion can support liability under section 4.007, and held that summary judgment for SMU was proper because the certificate must be read as a whole: it said that no additional approval by the church was provided because none was required under section 22.107(a) and that, on advice of independent counsel, the filing complied with the Code and SMU's articles (Opinion, PDF pp. 28-31). The certificate thus disclosed that Conference approval had not been obtained, and the fact that SMU's president had signed the 1996 amendment did not call into question Ward's 2019 conclusion based on advice of counsel, so it did not reach damages (Opinion, PDF pp. 29-31). **Concurrence (Justice Young, joined by Justice Devine and Justice Sullivan in full, and by Chief Justice Blacklock as to Parts I, III, and IV).** He said section 22.207 makes this an easy case and that, even without it, constitutional avoidance and the approach of *NLRB v. Catholic Bishop* might lead to reading section 20.002 in favor of religious autonomy (Young, J., concurring, PDF pp. 2-6). He explained that the church-autonomy doctrine sometimes requires a court to decline jurisdiction and sometimes to exercise it to vindicate a religious organization's authority, concluded that dismissal here would jeopardize church autonomy, and noted that the court of appeals acted responsibly in raising the issue itself (Young, J., concurring, PDF pp. 9-32). He also suggested that the Texas Constitution's freedom-of-worship provision may be more protective than the First Amendment, invited briefing on its original meaning, and expressed hope that the parties would reconcile without further litigation (Young, J., concurring, PDF pp. 32-38). **Dissent in part (Justice Bland).** She joined Part IV.A, which allows the Conference to seek declaratory relief, but dissented from Part IV.B and the remand of the contract claim: the Conference did not present a third-party-beneficiary claim in this Court, the State cannot be said to have intended to benefit a third party by performing its mandatory duty to file compliant articles, section 22.207 does not supply that intent, and the ruling lets a private party seek damages while exercising enforcement powers that belong to the State (Bland, J., dissenting in part, PDF pp. 1-9). ## Disposition The Court affirmed in part and reversed in part the court of appeals' judgment and remanded the case to the trial court for further proceedings (Opinion, PDF pp. 31-32). ## Vote Breakdown Justice Lehrmann delivered the opinion of the Court, joined in full by Chief Justice Blacklock and Justices Boyd, Devine, Busby, Huddle, Young, and Sullivan, and joined by Justice Bland except as to Part IV(B); Justice Young filed a concurring opinion, joined by Justices Devine and Sullivan in full and by Chief Justice Blacklock as to Parts I, III, and IV; Justice Bland filed an opinion dissenting in part (Opinion, PDF p. 1). --- Source: The SCOTX Report, https://scotxreport.com/cases/23-0703. AI-generated summary of the Court's opinion, orders and the parties' briefs, with pin cites to the page of each document; verify against the Court's own documents at search.txcourts.gov.