2008 D e c i sion s O p inion s of the U nit e d S t at e s C our t of Appe al s for the Thir d C ir c uit 11-28-2008 

# P att e rson v . S helt on P r e c e de n t i al or N on-P r e c e de n t i al : N on-P r e c e de n t i al D ocke t N o . 07-2778

F o l low thi s a nd a dd it ion al work s at : http://d i git alc ommon s .l a w . vi l l a no va . e du/thir dc ir c uit_2008

Thi s de c i sion i s br ou gh t t o you for f r e e a nd ope n a c c e s s b y the O p inion s of the U nit e d S t at e s C our t of Appe al s for the Thir d C ir c uit at V i l l a no va U nive r sity S choo l of L a

w Di git al Re posit or y

. It h as be e n a c c e pt e d for inclusion in 2008 D e c i sion s b y a n author i z e d a dmini s tr at or of V i l l a no va U nive r sity S choo l of L a

w Di git al Re posit or y

. F or mor e inform at ion, p le as e c on t a ct Be n j amin . C a rl s on@l a

w . vi l l a no va . e du . Re c omme nde d C it at ion
" P att e r s on v

. S he lt on " (2008). 2008 D e cisio n s . P ape r 187. http://d i git alc ommon s .l a

w . vi l l a no va . e du/thir dc ir c uit_2008/187NOT P RE CE DE NT I AL UN I TED STATES CO UR T OF A PP EALS F O R T H E T H IR D C IR C U IT

_____________ No. 07-2109

_____________ T H ET R U S T E E S O F T H EG EN E RA L A S S E M B LY OF T HE CHURCH OF T HE L ORD J ESUS CHRI ST OF THEAPOSTOL I C FAI TH, I NC., Appellant , v. ANTHONEE PATTERSON; KENNET H SHEL TON C on sol i dated A pp eal from t he U nit ed S t at es D istric t C o u rt f

o r th e E a ste rn D istric t o f P e n n sy lv a n ia ( C i v. N o. 07- 0024) D i s t r i ctC our tJ udge: H onor abl e A ni t a B . B r ody

_____________ Nos. 07-2270, 07-2378, 07- 2392, 07-2419 &07-2778

_____________ ANTHONEE PATTERSON, as General Overse er of the Minority Fa ction of TRUSTEES OF TH E GENERAL ASSEMBLY OF THE CHURCH OF THE L ORD J ESUS CHRI ST OF THEAPOSTOL I C FAI TH, I NC., v. KENNET H SHEL TON, individually and as the Gene ral Oversee r of the T RUSTEES OF THE GENERAL

ASSEMBLY OF THE CHURCH OF THE L ORD JESU S CH RI ST O F TH E APOS TO L I C F AI TH , I NC . TRU STE ES O F TH E G EN ERALASS EM B LY O F TH E CHURCH O F T H ELO RD J E S U S C H RIS T A N D T H EA P O S T O LIC-2- FAITH, I NC.; I NDIVIDUAL

TRUSTEES OF THE TRUSTEES GENERALASSEMBLY OF THE CHURCH OF THE L ORD J ESUS CHR I ST OF THEAPOSTOL I C FAI TH, I NC., J OHN C. S. THOMAS, J . LEON B L I GEN, ERIK SHEL TON, A. WOODARD REAGAN , J OHN R. B ROWN, J AMES H. BROWN, I , AND AN THONYE. LAMB; TH E GENERAL ASSEMBLY OF THE CHURCH OF THEL ORD J ESUS CHR I ST OF THE

APOSTOL I C FAI TH,

In te rv e no rs in D ist

ric t Co urt ANTHONEE PATTERSON, as General Overse er of the Minority Fa ction of TRUSTEES OF TH E GENERAL ASSEMBLY OF THE CHURCH OF THE L ORD J ESUS CHRI ST OF THEAPOSTOL I C FAI TH, I NC., Appellant in No. 07-2270 TRUSTEES OF THE G ENERAL ASSEMBLY OF THE CHURCH OF T HE L ORD J ESUS CHR I ST OF THEAPOSTOL I C FAI TH, I NC., Appellants in No. 07-2378 KENNET H SHEL TON, Appellant in No. 07-2392 GENE RA LASS EM B LY O F TH E CHURCHOF TH E L ORD JESUS CH RI ST O F TH E APOS TO L I C F AI THB Y C HURCH ME MB ERS CA RL TON M ORRI SON , D IAN E T AY L OR , ANDREW SCO TT , A

ND C. K AT HE RL I

NEWILL IAM S, TRUSTEES AD L I TEM, AND CARL TON MORRI SON, DIAN E T AY L OR , A

ND REW SC OT T, AND C . K AT HE RL I

NEWILL IAM S (COLLECTIVELY THE ‘ GENERAL ASSEMBLY’ OR ‘I

NTERVENORS’), Ap pe lla nts in No. 07-2419 I NDIVIDUAL

TRUSTEES OF THE TRUSTEES OF THE GENE RA LASS EM B LY O F TH E CHURCHOF TH E L ORD J ESUS CHR I ST OF THEAPOSTOL I C FAI TH, I NC.; SPEC IFI CALLY, J OHN C. S. THOMAS, J . LEON B L I GEN, ERIK SHEL TON, A. WOODARD REAGAN,

### A lso inv o lv edinth is case are th e In terv en o rs o nap p eal: T h e G en eral A ssem b ly 1 

### of the Chur c h, the I ndi vi dua lTr us t e e s of the Ge ne r a lAs s e m bly of the Chur c h, and the Tr us t e e s of the Ge ne r a lAs s e m bl y of the Chur c h ( the Chur c h Cor por at i on) , who a dopt the ar gum e nt s s e t

fo rth i n S he l t on ’ s bri e f. -3- J OHN R. B ROWN, J AMES H. BROWN, I , AND

ANT HON Y E. LAM B, Ap

pe lla nts in No. 07-2778 C on sol i dated A pp eal from t he U nit ed S t at es D istric t C o u rt f

o r th e E a ste rn D istric t o f P e n n sy lv a n ia ( C i v. N o. 06- 5060) D i s t r i ctC our tJ udge: H onor abl e A ni t a B . B r ody

___________ Subm i t t ed U nderT hi r d C i r cui tL . A . R . 34. 1( a)

N ovember 21, 2008

___________ B e f o re : F U E N T E S , H A R D IM A N a n d G A R T H , C i r cui tJudges ( O pi ni on Fi l ed: N ovember28, 2008)

___________ OP I NI ON

___________ G A R T H , C i r cui tJudge : A nt honee Patt er s on ( “Pat t er s on”) w as a mem berof t he C hur ch of the Lord J es us C hr i s tof t he A pos t ol i c Fai t h ( “the C hur ch”) . I n 1995, Pat t er s on s ued fe l l ow congr egant and then- head of

the C hur ch K enneth Shel t on ( “Shel t on”) and hi s br ot herE r i k foran 1
a c c o u n tin g o f

f u n d s , a n d f

o r a p p o in tm e n t o f

a re c e iv e r, a lle g in g m is a p p ro p ri a tio n .

### T h e reco rdin d icates th at th e M ay 8 , 2 0 0 6 aw ardw as also co n f irm ed . Ap p x . 5 1 . 2 

### I t i s que s t i onabl e , howe ve r , i f the May 16, 2006 awar d wa s c onfi rm e d. Appx. 51, 58. Th is appealfrom

the c on firm at ion o f the October 3, 200 6 award rem ai ned 3 

### pe ndi ng at

the t i m e Patt e r s on fi l e d hi s a c t i on i n the Uni t e d St at e s Di s tr i c t Court for the Ea s t e rn Di s tr i c t

of Pe nns yl vani a , on Nove m be r 15, 2006. -4- S h e l t o n f i l e d a c o u n t e r c l a i m f

o rf r a u d . Th e p a r t i e s a g r e e d i n 2 0 0 6 t o a rb i t r a t e t h e c l a i ms b e f o re re tir e d M a g is tr a te J u d g e E d w in N a y th o n s . J udge N ayt hons found i n favorof Pat t er s on i n a s er i es of aw ar ds on A pr i l 26, 2006, M ay8, 2006, M ay16, 2006, and O ct ober3, 2006. T he A pr i l 26, 2006 aw ar d w as t he pr i nci pal j udgm entfi ndi ng Shel t on and hi s aff i l i at es l i abl e forvar i ous act s . Pat t er s on p eti ti o n ed to co n firm that aw ard in the P h il ad elph ia C o u rto f C o m m o n P leas. T h at C o u rt
c o n f ir m e d th e a w a rd o n J u ly 1 0 , 2 0 0 6 . S h e lto n a p p e a le d . 2 Pat t er s on al s o s oughtt o confi r m t he O ct ober3, 2006 aw ar d, w hi ch aw ar ded d am ag es. S h elt o n o p p o sed the c o n firm ati o n o f th e O ctob er 3 , 2 0 0 6 aw ard . O n Jan u ary 3 3 1 , 2 0 0 8 , the C o m m o n w e a lth C o u rt o f P e n n sy lv a n ia, in ru lin g o n S h e lto n ’s a p p e a l o f Ju ly 10, 2006, r ever s ed t he C our tof C om m on Pl eas ’ confi r m at i on of t he A pr i l 26, 2006
aw ard , an d instructed the C o u rto f C o m m o n P leas to v ac ate a ll o f Ju d g e N ay tho n s’s
aw ard s o n the g rou n d s tha t Jud g e N ay tho n s h ad ex ce ed ed the s co p e o f h is au tho ri ty . It t her eupon r emanded t he ca s e t o t he C our tof C om m on Pl eas “t o conductt he pr oper proceed i ng s consi st ent w i t h the foregoing o pini on t o d et erm i ne w hetherA nthonee J. Pat t er s on i s ent i t l ed t o r el i ef pur s uantt o t he Penns y l vani a N onpr ofi tC orpor at i on L aw . ” S u p p . A p p x . 2 3 2 .

### 9 U. S. C. § 1 e t s e q. 4 W hi l e Pat t er s on’ s fede r al appea l of t he D i s t r i ctC our t ’ s or derof di s m i s s al w as 5 pendi ng befor e us , w e w er e not i fi ed thatt he Penns y l vani a Supr eme C our tdeni ed Pat t er s on’ s Pet i t i on forA l l ow ance of A ppeal , t hus l eavi ng undi s turbed the C om m onw eal t h C our t ’ s or dervaca t i ng t he arbi t r at i on aw ar ds and r emandi ng forfur t her -5- Pat t er s on fi l ed a Pet i t i on forA l l ow ance of A ppeal i n t he Supr eme C our tof Penns y l vani a. O n N ovember 15, 2006, Pat t er s on fi l ed a Pet i t i on/ M ot i on t o confi r m t he
a w a rd s in th e U n ited S tate s D istric t C o u rt f o r th e E a ste rn D istric t o f P e n n sy lv a n ia pur s uantt o t he Feder al A rbi t r at i on A ct( “FA A ”) . Shel t on and s ever al i nt er veni ng 4 C hur ch ent i t i es m oved t o di s m i s s and/ orvaca t e the pet i t i on forl ack of s ubj ectm at t er j ur i s di ct i on or , al t ernat i vel y , forJ udge N ayt hons ’ s fai l ur e t o s etfor t h a pr operaw ar d, for p a rtialitya n d m isc o n d u c t, fo r e x c e e d in g th e sc o p e o f h is p o w e rs, a n d f

o r m a n if e stly di s r egar di ng t he l aw . Supp. A ppx. 128. O n A pri l 6, 20 07 , t he D i stri ctC ou rtheld a t el eph on e con ference t o d i scuss j ur i s di ct i on. T he part i es ar gued t hatj ur i s di ct i on w as bas ed upon di ver s i t ys i nce Patt er s on w as f rom F lori d a a n d S h elt o n w as f rom P en n sy lvan ia. H o w ev er, w h en p resse d fu rt h er, couns el forPat t er s on i ndi cat ed t hat“the mi nor i t yt rus t ees ” w er e al s o pl ai nt i ffs – al t hough notnamed i n t he ca pt i on – and t hatcouns el , hi m s el f, w as one of the trus t ees , and he
r es i ded i n Penns y l vani a. A ppx. 122. T he D i s t r i ctC our tdi s m i s s ed the ca s e s ua s pont e for la c k o f d iv e rs ity ju ri s d ic tio n . O n A p ri l 25 , 2 0 0 7 , P att erso n fil ed a ti m elyn o ti ce o f a p p ea l of the D istri ct C o u rt ’s di s m i s s al . T hi s C our thas j ur i s di ct i on pur s uantt o 28 U . S. C . § 1291. T he D i s t r i ct

5proceed i ng s.

Shel t on had r ai s ed the i s s ues of r es j udi cat a and c ol l at er al es t oppel i n hi s br i ef on 6 appea l t o us . I n l i ghtof ouraff i r m ance of t he D i s t r i ctC our t ’ s di s m i s s al bas ed on l ack of diver si t yj uri sdi ct i on , w e do no tadd res s Sh el t on ’s i ssues. -6- C o u rt ’s ju ri s d ic tio n u n d e r 2 8 U .S .C . § 1 3 3 2 is in q u e s tio n .

“ W e r e v i e w d e n o v o t h e D i s t r i c tC o u r t ’ s d i s m i s s a l f o rl a c k o f

[ d i v e r s i t y] j u r i s d i c t i o n . ” M e t r o . L i f e I n s . Co . v . P r i c e , 5 0 1 F . 3 d 2 7 1 , 2 7 5 ( 3 d Ci r . 2 0 0 7 ) . T h e F AA d o e s n o t cr e a te in d e p e n d e n t f e d e ra l q u e stio n ju risd ictio n . T h e S u p re m e C o u rt h a s h e ld t hatan i ndepende ntbas i s forj ur i s di ct i on m us texi s t , s uch as di ver s i t y . M os es H . C one M e m ’l H o sp . v . M e rc u ryC o n str. C o rp ., 4 6 0 U .S . 1 , 2 6 n .3 2 (1 9 8 3 ). W e a g re e w ith Shel t on t hatt her e i s i ns uffi ci entevi dence of t he r es i dence of t he part i es t o s at i s fyour d iv e rsityju risd ictio n re q u ire m e n ts. T h e p e tit io n n e e d n o t af f irm a tiv e lya lleg e d iv e rsity juri sd ict ion if t h e p arti es o therw ise p lead the e lem en ts. S ee S m ith B arn ey , Inc . v . S arv er, 108 F. 3d 92, 95 ( 6t h C i r . 1997) ; A verbach v. R i val M fg. C o. , 809 F. 2d 1016, 1019 ( 3d C i r . 1987) . H ow ever , Pat t er s on has nots at i s fi ed thi s s t andar d. W e w i l l aff i r m t he D i s t r i ctC our t ’ s hol di ng t hatt he l ack of di ver s i t yj ur i s di ct i on m andat ed a di s m i s s al of t he act i on. 6 T he mot i on t o expand the r ecor d i s acc or di ngl ydeni ed.