That’s the question presented in The Protestant Episcopal Church in the Diocese of South Carolina v. The Episcopal Church. Samuel Bray explains the case in a recent post at the Volokh Conspiracy:

The U.S. Supreme Court has just been asked to review a major church property decision. At issue is who owns the land and buildings of 29 formerly Episcopal parishes in South Carolina. Some of these parishes have had their property for a long time—one of these parishes dates back to 1680, about a century before the Episcopal Church even existed as an entity in the United Sates. But notwithstanding this history, and even though the local congregations hold title to all these properties, the South Carolina Supreme Court held 3-2 that all of the properties belong to the national denomination, the Episcopal Church. In other words, the court held that the local congregations didn’t really own their property, they just held it it in trust for the national denomination.

What is at issue is much more than the property of these 29 parishes. The case raises a fundamental question about how the First Amendment interacts with church property cases. In Jones v. Wolf, 443 U.S. 595 (1979), the Supreme Court said “neutral principles” may be applied in church property cases. Accordingly, in some jurisdictions courts have held that church property disputes should be resolved using the very same property rules as any other dispute.

In other jurisdictions–including South Carolina–courts have read Jones as requiring them to carve out special rules for ecclesiastical disputes, allowing national churches to claim that local churches hold their property “in trust” for the national church, even though there are no facts that would be sufficient to establish a trust if a church were not involved. In these jurisdictions trust law and real property law are different for churches, in ways that redistribute property away from local congregations toward denominational hierarchies. The scope of the “exception” for churches turns on the internal government structure of the church–or, more precisely, on a court’s reading of the internal government structure of the church. There are obvious dangers when the ownership of real property turns on how a judge understands a church’s ecclesiastical structure.

This case is an excellent vehicle for resolving a major dispute among state and federal courts over the meaning of Jones and the basic rules for how the First Amendment applies to church property cases. If the “neutral principles” of Jones are compatible with special trust and property rules for churches, the state supreme court’s decision should be affirmed by the U.S. Supreme Court. But if–and I think this is the better view–the “neutral principles” of Jones can only be carried into effect with the same trust and property rules in church disputes as in any other kind of dispute, then the state supreme court’s decision should be reversed. Either way, this is a cert petition the Court should grant.