Update (April 19, 2013): The Virginia Supreme Court has ruled that The Falls Church, a "3,000-member congregation [that] voted in 2006 to leave the Episcopal Church did not have the right to keep the sprawling property known as the Falls Church."

The ruling, which came yesterday, affirmed a lower court’s decision in favor of the denomination, but also "said some of the nearly $3 million in church coffers belongs to the Falls Church Anglican congregation."
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(Note: If you're coming here from Google News or a similar link: My apologies for the posting of a very incorrect headline, based on some initial news reports. The Virginia Supreme Court did not say that Episcopalians own the Virginia churches. Read on for what it did say.)

The Supreme Court of Virginia has ruled in favor of the Episcopal Church in the state's much-watched dispute over church property. But it's just the latest ruling in what will continue to be a long fight.

Reversing a lower court's ruling, the Virginia Supreme Court said that the Anglican churches cannot use the Virginia "Division Statute" (the state law governing property when "a division has heretofore occurred or shall hereafter occur in a church or religious society") to file their claims.

But the actual answer to who owns the property is still a long way off.

Legal details after the jump...

At issue is Virginia code § 57-9[A]. I’ve bolded the two words at issue:

If a division has heretofore occurred or shall hereafter occur in a church or religious society, to which any such congregation whose property is held by trustees is attached, the members of such congregation over 18 years of age may, by a vote of a majority of the whole number, determine to which branch of the church or society such congregation shall thereafter belong. Such determination shall be reported to the circuit court of the county or city, wherein the property held in trust for such congregation or the greater part thereof is; and if the determination be approved by the court, it shall be so entered in the court's civil order book, and shall be conclusive as to the title to and control of any property held in trust for such congregation, and be respected and enforced accordingly in all of the courts of the Commonwealth.

The Virginia Supreme Court essentially gave the Episcopal Church two significant wins and a minor (and somewhat irrelevant) loss.

First, Justice Lawrence L. Koontz ruled that the circuit court erred in ruling that there was a division in the Anglican Communion—at least in terms of applying the Virginia code to the property dispute. The Anglican Communion as such isn’t claiming an interest in the Virginia properties, Koontz noted. And while there is an obvious theological dispute between the Episcopalians and the then-Nigerian-affiliated Virginia Anglicans, “all of these entities continue to admit a strong allegiance to the Anglican Communion.”

However (and this is where the Episcopalians lost), Koontz said there’s obviously division within the Virginia diocese. The Episcopalians had argued that the diocese could not actually divide without the approval of the Episcopal Church’s leadership. So long as the Episcopal Church says there’s no division, any “split” is just people leaving the church, not a division.

Koontz seemed amused by the argument. “While it is certainly possible that a division within a hierarchical church could occur through an orderly process under the church’s polity, history and common sense suggest that such is rarely the case,” he said. “To the contrary, experience shows that a division within a formerly uniform body almost always arises from a disagreement between the leadership under the polity and a dissenting group.”

In addition, playing by the Episcopal Church’s interpretation would “potentially involve the court in disputes involving church governance” and would entangle the secular courts in religious matters, Koontz ruled.

Instead, “the court simply determines from the facts presented whether the division has occurred, without regard to the nature of the dispute, whether over doctrine or some other cause, which lead to the separation of the congregation and its attachment to a different polity.” In this case, Koontz ruled, “there can be no question.”

But that finding didn’t matter much in the end, since Koontz said code § 57-9[A] doesn’t apply because the Anglican congregations are not part of a “branch” of either The Episcopal Church or the Episcopal Diocese of Virginia. They’re part of the Nigerian-led Convocation of Anglicans in North America (CANA) and the Anglican Diocese of Virginia.

The circuit court had argued that the congregations were, in fact, in a “branch,” since a branch can mean “a division of a family descending from a particular ancestor.” In this case, the Church of Nigeria and the Episcopal Church are both historically connected to the Anglican Communion.

Koontz disagreed: “While the branch joined may operate as a separate polity from the branch to which the congregation formerly was attached, the statute requires that each branch proceed from the same polity, and not merely a shared tradition of faith.”

So was it a big win for the Episcopalians? Kind of. The circuit court’s earlier ruling that the Anglican congregations could use code § 57-9[A] meant that it didn’t have to consider some other questions and filings from the Episcopal Church. Koontz said those questions and petitions are now back on the table “in order to resolve this dispute under principles of real property and contract law.”

But “the control and ownership of the property held in trust and used by the CANA Congregations remains unresolved,” Koontz said.

Indeed, perhaps more unresolved than ever, given very recent news. Does this week's news that the Anglican Communion is barring the Episcopal Church from membership in its ecumenical committee and its theological commission have any effect on Koontz's finding that there is no relevant division in the Anglican Communion? And with the Anglican Communion getting tougher on the Episcopal Church, doesn't that suggest that there's real polity, not just "a shared tradition of faith" at work?