IN THE UNITED STATES COURT OF APPEALS FOR THE THIRD CIRCUIT
September 6, 2006
LYNETTE M. PETRUSKA, APPELLANT
GANNON UNIVERSITY; THE BOARD OF TRUSTEES OF GANNON UNIVERSITY; WILLIAM I. ALFORD, II; ROBERT H. LLSHOUSE; JOSEPH F. ALLISON; MICHAEL P. ALLISON, REV.; JAMES A. BALDAUF; L. SCOTT BARNARD; GEORGE J. BEHRINGER; ARNOLD E. ERGQUIST; LAWRENCE E. BRANDT, REV. MSGR.; ROBERT L. BRUGGER, REV. MSGR.; DONALD M. CARLSON; DANIEL C. CARNEVAL, D.O.; TEPHANIE DOMITROVICH, HON.; THOMAS L. DOOLIN; JAMES J. DURATZ; ANTOINE M. GARIBALDI; THOMAS C. GUELCHER; WILLIAM M. HILBERT, SR.; BRIAN J. JACKMAN; JAMES W. KEIM, JR.; MARY RITA KUHN, SR., SSJ; THOMAS J. LOFTUS; ANNE C. MCCALLION; JOSEPH T. MESSINA; MICHAEL J. NUTTALL; JOHN E. PAGANIE; DENISE ILLIG ROBISON; JAMES J. RUTKOWSKI, JR.; JAMES A. SCHAFFNER; HELEN M. SCHILLING, M.D., D.D.S.; JOHN M. SCHULTZ, VERY REV.; ROBERT J. SMITH, REV. MSGR.; LAWRENCE T. SPEICE, REV. MSGR.; WILLIAM C. SPRINGER; JAMES G. TOOHEY; DONALD W. TRAUTMAN, BISHOP; ANASTASIA VALIMONT, SR. SSJ; RICARDA VINCENT, SR. SSJ; MELVIN WITHERSPOON; ALL OTHER KNOWN AND UNKNOWN MEMBERS OF THE BOARD OF TRUSTEES OF GANNON UNIVERSITY DURING THE TENURE OF DONALD W. TRAUTMAN, AS MEMBERS OF THE BOARD OF TRUSTEES OF GANNON UNIVERSITY; DAVID RUBINO, MSGR., IN THEIR INDIVIDUAL AND OFFICIAL CAPACITIES; NICHOLAS ROUCH, REV., IN THEIR INDIVIDUAL AND OFFICIAL CAPACITIES
On Appeal from the United States District Court For the Western District of Pennsylvania (D.C. Civ. Action No. 04-80) District Judge: The Honorable Sean J. McLaughlin.
The opinion of the court was delivered by: Smith, Circuit Judge
Argued August 16, 2006*fn1
BEFORE: SMITH, COWEN, and GREENBERG.
OPINION OF THE COURT
Former University Chaplain Lynette Petruska appeals an order from the United States District Court for the Western District of Pennsylvania dismissing her federal employment discrimination and state law claims against Gannon University ("Gannon" or "the University"), the private Catholic diocesan college that employed her from July 16, 1997 until October 15, 2002. The District Court dismissed Petruska's complaint for lack of jurisdiction pursuant to Federal Rule of Civil Procedure 12(b)(1), holding that the "ministerial exception"--a doctrine rooted in the First Amendment--barred her claims.
This Court has not previously ruled on the viability or the scope of the ministerial exception. Today, we join seven of our sister circuits in adopting the exception and hold that it applies to any claim, the resolution of which would limit a religious institution's right to choose who will perform particular spiritual functions.
Petruska's Title VII discrimination and retaliation claims, as well as her state civil conspiracy and negligent retention and supervision claims, are barred by the ministerial exception insofar as they implicate a church's right to select its ministers under the Free Exercise Clause. Because resolution of Petruska's fraudulent misrepresentation and breach of contract claims do not limit Gannon's free exercise rights, and because an evaluation of these claims would not violate the Establishment Clause, they are not precluded by the exception. Nevertheless, Petruska has failed to plead fraud with particularity as required by Federal Rule of Civil Procedure 9(b). Accordingly, we will affirm the District Court's order dismissing Petruska's Title VII discrimination and retaliation claims, as well as her state civil conspiracy, negligent retention and supervision, and fraudulent misrepresentation claims. For the reasons set forth below, we will remand her breach of contract claim for further consideration by the District Court.
I. Factual and Procedural Background
For purposes of a motion to dismiss, we must accept as true--as did the District Court--the plaintiff's factual allegations. See Mortensen v. First Fed. Sav. & Loan, 549 F.2d 884, 891 (3d Cir. 1977) (explaining the standard of review for Rule 12(b)(1) and Rule 12(b)(6) motions).*fn2 Accordingly, the facts set forth below are drawn from Petruska's First Amended Complaint.
Gannon University is a private Catholic diocesan college located in Erie, Pennsylvania. Gannon hired Petruska as the University's Director of Social Concerns on July 16, 1997. At that time, Reverend Nicholas Rouch was the University Chaplain. When Rouch left to study in Rome for a period of three years, he was promised that he could resume his position as chaplain when he returned. In his absence, the University appointed an interim chaplain, who held the position until June of 1999. When the interim chaplain resigned, then-President Monsignor David Rubino promoted Petruska to permanent University Chaplain on July 1, 1999, with the advice and consent of Bishop Trautman, the Chair of Gannon's Board of Trustees (the "Board"). Petruska was the first female in Gannon's history to serve in that position. As such, and cognizant of the promise made to Rouch, Petruska specifically sought assurances from Rubino that she would not simply be replaced when Rouch returned or another qualified male became available. Rubino assured her that future decisions regarding her tenure as chaplain would be based solely on her performance, not her gender.
Several months after her appointment, in March of 2000, Rubino was forced to take a leave of absence when allegations surfaced that he was having a sexual affair with a female subordinate. Thereafter, another female employee accused Rubino of sexual harassment, and Petruska was instrumental in bringing this claim to the attention of Bishop Trautman and then-Provost Dr. Thomas Ostrowski. Rubino formally resigned in May of 2000, and Ostrowski was appointed Acting President. Following Rubino's resignation, and at Bishop Trautman's behest, Gannon began a campaign to cover-up Rubino's misconduct. Petruska strenuously--and vocally--objected to the University's response.*fn3
In July of 2000, Ostrowski met with Bishop Trautman, as well as Rouch, who had by then returned from Rome. Bishop Trautman notified Ostrowski that he had created a new position--Vice-President for Mission and Ministry--and that he had appointed Rouch to fill it. The position was created without input from any other University officials and did not include a job description. At that meeting, the Bishop informed Ostrowski that he was to remove Petruska as University Chaplain. When Ostrowski refused, Bishop Trautman instructed him to restructure the Chaplain's Division by placing it under the leadership of Rouch. Ostrowski also refused to take part in the proposed restructuring.
On July 28, 2000, Ostrowski told Petruska about his meeting with Rouch and Bishop Trautman. He explained the proposed restructuring and asked Petruska how she would respond if the Chaplain's Office were placed under Rouch's leadership. Petruska indicated that she would challenge this decision, and Ostrowski conceded that the proposed action was being taken on the basis of her gender. Although Ostrowski stated that he would try to prevent the restructuring and Petruska's removal, he later explained that he could delay, but not prevent, these events.
On October 2, 2000, Petruska signed a revised contract, which was equivalent to those of the other vice-presidents at Gannon. Her contract was thereby extended until June 30, 2003. From March to May of 2001, Ostrowski repeatedly suggested that Petruska consider accepting another position at Gannon, because Bishop Trautman and Reverend Rouch would never let her remain as University Chaplain. Ostrowski was removed from consideration in the presidential search on April 19, 2001.
On May 21, 2001, Dr. Antoine Garibaldi was appointed President of Gannon and he began his tenure on July 1, 2001. After Garibaldi became President, some of Petruska's responsibilities were reassigned and she was instructed to limit her comments at University events.
On August 21, 2002, Garibaldi notified Petruska that he had decided to restructure and informed her that she would be removed from the President's Staff and that the Chaplain's Division would report to Rouch. Garibaldi did not present the restructuring proposal to the University's President's Council as required by Gannon's Governance Manual. Petruska informed Garibaldi that she knew that this action was being taken against her because of her gender and told him that she would be open to a "buy out" of her contract. Although Garibaldi indicated that he would be willing to discuss the restructuring, he later declined to discuss the matter with Petruska. After meeting with Garibaldi, Petruska orally requested information about filing a discrimination grievance with the University Review Council, but was notified in a letter dated August 28, 2002 that the University Review Council was not a proper forum because her complaint was directed against the President and Chair of the Board.
On September 30, 2002, Rouch called Petruska and indicated that he wanted to discuss the restructuring. She declined to meet with him until she resolved her concerns about the University's discriminatory conduct with Garibaldi. That same day, Petruska sent an e-mail to Garibaldi, stating that she intended to speak publicly about the questionable motives underlying the restructuring, but noted that she was willing to meet with him to discuss how all parties could "move forward" if Ricarda Vincent, the president of her community, was permitted to attend. Garibaldi did not respond. Petruska later learned that, during a telephone conversation between Bishop Trautman and Vincent, the Bishop "yelled" at Vincent. The next day, October 1, Vincent told Petruska that she could not take any action against Gannon, nor was she to make any comment about Gannon's discriminatory conduct. Faculty, staff, and students were informed of Petruska's "demotion" from the head of the Chaplain's Division.
On October 7, 2002, Rouch once again contacted Petruska regarding the restructuring. In response, she sent an e-mail to Garibaldi, noting that she had not yet received an answer to her request for a meeting. The next day, Garibaldi responded to Petruska's e-mail, indicating that the University would take "appropriate action" if she did not report to Rouch. Believing that she was about to be fired, she tendered her resignation with two-weeks notice on October 14, 2002. The following day, Rouch and Bob Cline, Gannon's Human Resources Director, entered Petruska's office and told her that her resignation was accepted effective immediately.
Based on these events, Petruska filed a complaint with the Equal Employment Opportunity Commission ("EEOC") on August 20, 2003. Upon exhausting her administrative remedies, she received a ninety-day "right-to-sue" letter. She filed this action in the United States District Court for the Western District of Pennsylvania against Gannon University, members of the Board of Trustees (including Trautman, Garibaldi, and Vincent), Rubino, and Rouch. Petruska asserted six claims: (1) gender discrimination in violation of Title VII against all Defendants; (2) retaliatory discrimination in violation of Title VII against all Defendants; (3) fraudulent misrepresentation against Gannon, Rubino, and Trautman; (4) civil conspiracy against Trautman, Garibaldi, and Rouch; (5) breach of contract against Gannon and Garibaldi; and (6) negligent supervision and retention against Gannon and its Board. Gannon moved to dismiss Petruska's claims pursuant to Federal Rule of Civil Procedure 12(b)(1) for lack of jurisdiction, or in the alternative, pursuant to Federal Rule of Civil Procedure 12(b)(6) for failure to state a claim on which relief can be granted. The District Court granted the motion, concluding that the ministerial exception barred adjudication of Petruska's claims.
II. Gannon's Motion to Dismiss
The District Court granted the motion to dismiss pursuant to Federal Rule of Civil Procedure 12(b)(1) for lack of jurisdiction. Although we agree that the ministerial exception applies in this case, we conclude that the exception does not act as a jurisdictional bar, but rather, is best viewed as a challenge to the sufficiency of Petruska's claim under Rule 12(b)(6). See, e.g., Elvig v. Calvin Presbyterian Church, 375 F.3d 951, 955 (9th Cir. 2004); Bryce v. Episcopal Church in the Diocese of Colorado, 289 F.3d 648, 654 (10th Cir. 2002).
At issue in a Rule 12(b)(1) motion is the court's "very power to hear the case."*fn4 Mortensen, 549 F.2d at 891. A Rule 12(b)(6) motion, by contrast, tests the legal sufficiency of plaintiff's claim. In other words, for purposes of resolving a Rule 12(b)(6) motion, the question is whether the plaintiff would be able to prevail even if she were able to prove all of her allegations. Id.
In this case, the question does not concern the court's power to hear the case--it is beyond cavil that a federal district court has the authority to review claims arising under federal law--but rather whether the First Amendment bars Petruska's claims. See Elvig, 375 F.3d at 955 ("Federal question jurisdiction is statutorily established, giving district courts 'original jurisdiction of all civil actions arising under the Constitution, laws, or treaties of the United States.'"). In that respect, as the Tenth Circuit noted in Bryce, assertion of the ministerial exception--or, in that case, the "church autonomy doctrine"--is akin to a government official's defense of qualified immunity, which is often raised in a Rule 12(b)(6) motion. Bryce, 289 F.3d at 654. The exception may serve as a barrier to the success of a plaintiff's claims, but it does not affect the court's authority to consider them. We therefore review Petruska's complaint to determine whether she has stated a claim upon which relief can be granted pursuant to Federal Rule of Civil Procedure 12(b)(6). So construing the motion to dismiss, we have jurisdiction under 28 U.S.C. § 1291. Jordan v. Fox Rothschild O'Brien & Frankel, Inc., 20 F.3d 1250, 1251 (3d Cir. 1994). Our review is plenary. Id.
III. The Ministerial Exception to Title VII
Title VII of the Civil Rights Act of 1964 prohibits discrimination in employment on the basis of race, sex, national origin, or religion and forbids retaliation based on an employee's opposition to practices made unlawful under the statute. 42 U.S.C. § 2000e-2; 42 U.S.C. § 2000e-3. The statute exempts religious entities and educational organizations from its non-discrimination mandate to the extent that an employment decision is based on an individual's religious preferences. See 42 U.S.C. § 2000e-1(a) (providing an exception for "religious corporation, association, educational institution, or society with respect to employment of individuals of a particular religion to perform work connected with the carrying on . . . of its activities"); see also 42 U.S.C. § 2000e-2(e) (permitting religious educational institutions "to hire and employ employees of a particular religion"). By its terms, however, Title VII "does not confer upon religious organizations the right to make those same decisions on the basis of race, sex, or national origin." Rayburn v. Gen'l Conf. of Seventh Day Adventists, 772 F.2d 1164, 1166 (4th Cir. 1985).
The questions presented in this case are whether applying Title VII to Gannon's decision to restructure would infringe upon its free exercise rights and whether adjudication of Petruska's Title VII claims would result in unconstitutional entanglement under the Establishment Clause. Every one of our sister circuits to consider the issue has concluded that application of Title VII to a minister-church relationship would violate--or would risk violating*fn5 --the First Amendment and, accordingly, has recognized some version of the ministerial exception.*fn6 To the extent that a claim involves the church's selection of clergy--in other words, its choice as to who will perform particular spiritual functions*fn7 --most of these circuits have held that the exception bars any inquiry into a religious organization's underlying motivation for the contested employment decision.*fn8
Although we have not previously confronted a factually appropriate case in which to determine whether the ministerial exception is constitutionally warranted, we have acknowledged and cited with approval its application by other courts of appeals. See Little v. Wuerl, 929 F.2d 944, 947 (3d Cir. 1991) (citing McClure v. Salvation Army, 460 F.2d 553(5th Cir. 1972); Rayburn, 772 F.2d 1164) ("Relying on this basic principle, courts have consistently found that Title VII does not apply to the relationship between ministers and the religious organizations that employ them, even where the discrimination is alleged on the basis of race or sex."); Geary v. Visitation of the Blessed Virgin Mary, 7 F.3d 324, 329 (3d Cir. 1993) (citing Scharon, 929 F.2d at 363) ("Indeed, when the employee who challenges an employment decision is a member of the clergy, some courts have refused to allow even this limited inquiry."). Because we conclude that a federal court's resolution of a minister's Title VII discrimination or retaliation claim would infringe upon First Amendment protections, we now join those courts in adopting the exception.*fn9
Id. at 967.
The Ayotte Court set forth several guiding principles to "inform our approach to remedies." Id. It explained that the courts should not engage in "quintessentially legislative work," and accordingly, cautioned that we should not endeavor to draw lines where doing so would be "inherently complex." Id. at 968. The Court also instructed us to consider the intent of the legislature: In other words, we must ask whether the legislature would "have preferred what is left of its statute or no statute at all[.]" Id. Finally, in selecting a remedy, we must "try not to nullify more of a legislature's work than is necessary. . . ." Id. at 967.
In this case, we conclude that application of the ministerial exception is not "inherently complex": It requires federal courts to determine only whether the resolution of the plaintiff's claim would limit a church's right to choose who will perform particular spiritual functions. Further, we agree with the implied findings of our sister circuits that Congress would prefer a tailored exception to Title VII than a complete invalidation of the statute. Finally, our remedy is limited: It does not apply to all employment decisions by religious institutions, nor does it apply to all claims by ministers. It applies only to claims involving a religious institution's choice as to who will perform spiritual functions. We also note that this is the "finely drawn" remedy requested by Gannon. See id. at 969 (noting that the parties recognized the possibility of a "modest remedy"). Accordingly, we conclude that the ministerial exception is the proper response to the constitutional defect in Title VII.
A. The Free Exercise Clause of the First Amendment
The First Amendment of the United States Constitution provides that "Congress shall make no law respecting an establishment of religion or prohibiting the free exercise thereof." U.S. Const. amend. I. The Religion Clauses extend to both legislative and judicial action, see Kreshik v. Saint Nicholas Cathedral of the Russian Orthodox Church of North Amer., 363 U.S. 190, 191 (1960), and apply equally to state and federal laws, see Elk Grove Unified Sch. Dist. v. Newdow, 542 U.S. 1, 8 (2004) (citing Cantwell v. Connecticut, 310 U.S. 296, 303 (1940)).
The Free Exercise Clause protects not only the individual's "right to believe and profess whatever religious doctrine one desires," Employment Division, Dep't of Human Resources of Oregon v. Smith, 494 U.S.872, 877 (1990), but also a religious institution's right to decide matters of faith, doctrine, and church governance. Kedroff v. St. Nicholas Cathedral, 344 U.S. 94, 116 (1952); see also Serbian Orthodox Diocese v. Milivojevich, 426 U.S. 696, 713 (1976) ("[C]ivil courts are bound to accept the decisions of the highest judicatories of a religious organization of hierarchical policy on matters of discipline, faith, internal organization, or ecclesiastical rule, custom, or law.") (emphasis added). In ministerial exception cases, those rights are interrelated.
First, like an individual, a church in its collective capacity must be free to express religious beliefs, profess matters of faith, and communicate its religious message. Unlike an individual who can speak on her own behalf, however, the church as an institution must retain the corollary right to select its voice. A minister is not merely an employee of the church; she is the embodiment of its message. A minister serves as the church's public representative, its ambassador, and its voice to the faithful. Accordingly, the process of selecting a minister is per se a religious exercise. As the Fifth Circuit explained: "The relationship between an organized church and its ministers is its lifeblood. The minister is the chief instrument by which the church seeks to fulfill its purpose." McClure, 460 F.2d at 558-59. "Matters touching this relationship must necessarily be recognized as of prime ecclesiastical concern." Id. at 559.*fn10 Consequently, any restriction on the church's right to choose who will carry its spiritual message necessarily infringes upon its free exercise right to profess its beliefs. This right is squarely at issue in Petruska's First Amended Complaint.
The second right protected by the Free Exercise Clause--the church's right to decide matters of governance and internal organization--is also implicated by Gannon's decision to restructure. The Vice President for Mission and Ministry and the University Chaplain at Gannon both serve spiritual functions--in other words, the primary duties of those employees include "teaching, spreading the faith, church governance, supervision of a religious order, or supervision of participation in religious ritual and worship."*fn11 See Rayburn, 772 F.2d at 1169. Accordingly, Gannon's decisions regarding who to install in those positions and the manner in which their duties would be divided were decisions about who would perform those constitutionally protected spiritual functions. Those choices are protected from governmental interference by the Free Exercise Clause.
The ministerial exception, as we conceive of it, operates to bar any claim, the resolution of which would limit a religious institution's right to select who will perform particular spiritual functions. Accordingly, in this case, the relevant question with respect to each of Petruska's claims is whether application of the state or federal law will limit Gannon's right to choose who performs particular spiritual functions on its behalf. Petruska asserts six claims in her First Amended Complaint: two violations of Title VII--discrimination and retaliation (Counts I and II, respectively); fraudulent misrepresentation (Count III); civil conspiracy (Count IV); breach of contract (Count V); and negligent supervision and retention (Count VI). We conclude that resolution of Counts I, II, IV, and VI would impose unconstitutional limits on Gannon's First Amendment right to the free exercise of religion. Consequently, we hold that they are barred by the ministerial exception.
1. Petruska's Title VII Claims
Petruska alleges that Gannon demoted and constructively discharged her from her position as University Chaplain based on her gender and retaliated against her on the basis of her opposition to sexual harassment at the University. Her discrimination and retaliation claims are premised upon Gannon's decision to restructure, a decision which Petruska argues was merely pretext for gender discrimination. It is clear from the face of Petruska's complaint, however, that Gannon's choice to restructure constituted a decision about who would perform spiritual functions and about how those functions would be divided. Accordingly, application of Title VII's discrimination and retaliation provisions to Gannon's decision to restructure would violate the Free Exercise Clause.*fn12
For that reason, Petruska's Title VII claims (Counts I and II) should be dismissed.
Petruska argues that Gannon waived its right to raise the ministerial exception as a defense by (1) failing to raise it before the EEOC; (2) accepting state and federal funds with conditions limiting discrimination; and (3) repeatedly and publicly representing itself as an equal opportunity employer. We find these arguments unpersuasive.
First, as the District Court correctly noted, although a plaintiff has an obligation to exhaust her administrative remedies as a prerequisite to suit, we are aware of no authority that requires a defendant to proffer every possible defense or legal argument before the EEOC, much less to raise all constitutional challenges. Cf., e.g., McGinty v. New York, 251 F.3d 84, 93-94 (2d Cir. 2001) (concluding that failure to raise Eleventh Amendment immunity as a defense did not result in waiver in subsequent federal court action under the ADEA); Marie v. Allied Home Mortgage Corp., 402 F.3d 1, 15 (1st Cir. 2005) (holding that appellee did not waive right to raise arbitration defense in district court by failing to raise it before EEOC); Brennan v. King, 139 F.3d 258, 263 (1st Cir. 1998) (same). Moreover, as a general rule, an administrative agency is not competent to determine constitutional issues. See, e.g, Weinberger v. Salfi, 422 U.S. 479, 765 (1975) ("Exhaustion is generally required as a matter of preventing premature interference with agency process, so that the agency may function efficiently and so that it may have the opportunity to correct its own errors, to afford the parties and the courts the benefit of its experience and expertise, and to compile a record which is adequate for judicial review . . . . Plainly these purposes have been served once the Secretary has satisfied himself that the only issue is the constitutionality, a matter which is beyond his jurisdiction to determine . . . ."); but cf. Bethlehem Steel Corp. v. Occupational Safety and Health Review Commission, 607 F.2d 871, 876 (3d Cir. 1976) (concluding that in context of OSHA enforcement cases, "there are compelling reasons for insisting that fourth amendment claims for suppression of evidence . . . be tendered first to the Commission.").
In this case, we can see no reason that the general rule regarding agencies' lack of competence to resolve constitutional claims should not apply. The EEOC has no special expertise to resolve First Amendment claims, nor is Gannon's assertion of the ministerial exception related to the EEOC's jurisdiction or administrative procedures. We therefore cannot conclude that Gannon's failure to raise the ministerial exception before the EEOC resulted in a waiver of its right to raise it in federal court.*fn13
Second, Gannon did not "waive" its First Amendment rights by representing itself as an "equal opportunity employer" or by accepting federal and state funds. A waiver is "an intentional relinquishment or abandonment of a known right or privilege." Johnson v. Zerbst, 304 U.S. 458, 464 (1938). "'[C]courts indulge every reasonable presumption against waiver' of fundamental constitutional rights." Id. (citation omitted). Here neither Gannon's invocation of "equal employer" language nor its acceptance of funds constitutes a waiver of its First Amendment rights. By invoking the "equal opportunity" language, Gannon acknowledged only that it would comply with Title VII to the extent the statute applies to its employment decisions. It does not apply in this context. We thus agree that Gannon did not waive its right to raise the ministerial exception and we conclude that the District Court properly applied the exception to Petruska's Title VII claims.
2. Petruska's State Tort Law Claims
Petruska's First Amended Complaint also contains three state tort claims: civil conspiracy (Count IV), negligent supervision and retention (Count VI), and fraudulent misrepresentation (Count III). The civil conspiracy*fn14 and negligent supervision*fn15 claims turn on Petruska's ability to prove that Gannon's restructuring constituted an unlawful or tortious act. Because the First Amendment protects Gannon's right to restructure--regardless of its reason for doing so--we cannot consider whether the act was unlawful or tortious and, therefore, these claims must be dismissed.
By contrast, Petruska's fraudulent misrepresentation claim requires no such conclusion. To establish a claim for fraudulent misrepresentation, a plaintiff must prove: "(1) a misrepresentation, (2) a fraudulent utterance thereof, (3) an intention by the maker that the recipient will thereby be induced to act, (4) justifiable reliance by the recipient upon the misrepresentation and (5) damage to the recipient as the proximate result." Martin v. Lancaster Battery Co., 530 Pa. 11, 19, 606 A.2d 444, 448 (Pa. 1992). Unlike Petruska's civil conspiracy or negligent supervision claims, which require proof of the unlawful act or intentional harm, the resolution of Petruska's fraudulent misrepresentation claim does not turn on the lawfulness of the decision to restructure, but rather upon the truth or falsity of the assurances that she would be evaluated on her merits when she was initially appointed as University Chaplain in July of 1999.
Because the state's prohibition against fraud does not infringe upon Gannon's freedom to select its ministers, resolution of Petruska's fraudulent misrepresentation claim would not violate the Free Exercise Clause. Nevertheless, we conclude that Petruska has failed to plead fraud with particularity as required by Federal Rule of Civil Procedure 9(b), and accordingly, affirm the District Court's dismissal of that claim.*fn16 See Chistidis v. First Pennsylvania Mortg. Trust, 717 F.2d 96, 99 (3d Cir. 1983) (indicating that the pleading requirements of Rule 9(b) "appl[y] not only to fraud actions under federal statutes, but to fraud claims based on state law.").
3. Petruska's State Law Contract Claim
In Count V of her First Amended Complaint, Petruska alleges that pursuant to her contract with Gannon, she was entitled to serve on the President's Staff and lead the Chaplain's Division. She claims that by changing her responsibilities, Gannon breached its contract.
On its face, application of state contract law does not involve government-imposed limits on Gannon's right to select its ministers: Unlike the duties under Title VII and state tort law, contractual obligations are entirely voluntary. As the court noted in Minker v. Baltimore Annual Conference of United Methodist Church, 894 F.2d 1354, 1360 (D.C. Cir. 1990), "[a] church is always free to burden its activities voluntarily through contract, and such contracts are fully enforceable in civil court." See also, e.g., Rayburn, 772 F.2d at 1171 ("Like any other organization, [churches] may be held liable . . . upon their valid contracts."). Enforcement of a promise, willingly made and supported by consideration, in no way constitutes a state-imposed limit upon a church's free exercise rights. Accordingly, application of state law to Petruska's contract claim would not violate the Free Exercise Clause.
B. The Establishment Clause
Above and beyond its Free Exercise argument, Gannon contends that resolution of Petruska's claims would violate the Establishment Clause. Because we conclude that Petruska failed to plead fraud with specificity and that her Title VII, civil conspiracy, and negligent retention and supervision claims are barred by the Free Exercise Clause, we need not address those claims further. Petruska's claim for breach of contract, however, remains subject to review under the Establishment Clause. Based upon our analysis in Geary v. Visitation of the Blessed Virgin Mary Parish School, 7 F.3d 324 (3d Cir. 1993), we cannot conclude that review of this claim would, at the outset, unconstitutionally entangle the court in religion, and we therefore remand it to the District Court.
In Lemon v. Kurtzman, 403 U.S. 602, 612-13 (1971), the Supreme Court set forth a three-prong test to determine the validity of a statute under the Establishment Clause: "First, the statute must have a secular legislative purpose; second, its principal or primary effect must be one that neither advances nor inhibits religion; . . . and finally, the statute must not foster 'an excessive government entanglement with religion.'" Only the entanglement prong is at issue in evaluating Petruska's contract claim.
Entanglement may be substantive--where the government is placed in the position of deciding between competing religious views--or procedural--where the state and church are pitted against one another in a protracted legal battle. See, e.g., Catholic Univ., 83 F.3d at 465. Therefore, courts typically consider the character of the claim, the nature of the remedy, and the presence or absence of a "direct conflict between the . . . secular prohibition and the proffered religious doctrine." Geary, 7 F.3d at 328.
In Geary, the question presented was whether judicial review of a Catholic school teacher's Age Discrimination in Employment Act (ADEA) claims would excessively entangle the courts where the school's stated reason for the adverse employment decision was based on the plaintiff's marriage to a divorced man in violation of church doctrine. Id. We concluded that resolution of Geary's ADEA claims would not offend the Establishment Clause because the inquiry was limited to whether the school discriminated against Geary on the basis of her age and canceled her insurance in retaliation for her suit. Id. Geary did not challenge the validity of the religious doctrine; she merely claimed that the religious doctrine did not motivate the suit. Id. at 329. We therefore held that "when the pretext inquiry neither traverses questions of the validity of religious beliefs nor forces a court to choose between parties' competing religious visions, that inquiry does not present a significant risk of entanglement." Id. at 330.
The Court of Appeals for the District of Columbia Circuit took a similar approach to a minister's breach of contract claim in Minker, 894 F.2d at 1360. Minker involved a Methodist minister's claim that he was orally promised a more suitable pastorship, but was denied such a position based on his age. Id. at 1355. The Minker court affirmed the dismissal of the minister's ADEA and state law discrimination claim as well as a contract claim based on the Methodist Church's Book of Discipline, but reversed the dismissal with respect to the oral contract claim. Id. at 1359. The court acknowledged that inquiry into the church's reasons for failing to meet its contractual obligation could constitute excessive entanglement under the Establishment Clause, but nevertheless concluded that Minker's claim could "be adduced by a fairly direct inquiry" into whether there was an offer, acceptance, consideration, and breach. Id. at 1360. The court further noted that if resolution of the contract claim required inquiry into the church's ecclesiastical policy, the district court could grant summary judgment on entanglement grounds.
Although the ministerial exception does not apply to lay employees, we are presented with no principled reason to distinguish between clergymen and laity for purposes of determining whether resolution of a contract dispute will unduly entangle us under the Establishment Clause. Therefore, the question is whether Petruska's breach of contract claim can be decided without wading into doctrinal waters. Much like the claims in Geary and the oral contract claim in Minker, Petruska's breach of contract claim "do[es] not inevitably or even necessarily lead to government inquiry into [Gannon's] religious mission or doctrines." Geary, 7 F.3d at 329. Resolution of this claim does not turn on an ecclesiastical inquiry--or, at least not at the outset. If Gannon's response to Petruska's allegations raise issues which would result in excessive entanglement, the claims may be dismissed on that basis on summary judgment. Such a conclusion, however, is not inevitably drawn from the face of Petruska's complaint. We will therefore remand this claim for further consideration by the District Court.
The First Amendment protects a church's right to decide matters of faith and to declare its doctrine free from state interference. A church's ability to select who will perform particular spiritual functions is a necessary corollary to this right. The function of Petruska's position as University Chaplain was ministerial in nature, and therefore, her Title VII, civil conspiracy, and negligent retention and supervision claims--each of which directly turns on the propriety of Gannon's personnel decisions--must be dismissed. Likewise, Petruska's fraud claim was not plead with sufficient particularity to withstand a motion to dismiss. Accordingly, we will affirm the District Court's order with respect to these claims. For the reasons set forth above, however, we will be remand Petruska's contract claim for further consideration by the District Court.