The Episcopal Church lost a major court battle on February 3 when a South Carolina judge ruled that the Diocese of South Carolina legally seceded from the denomination and can retain control of $500 million in church property and assets.

The Charleston-based Diocese of South Carolina voted to secede in 2012 after the national church accused its bishop, Mark Lawrence, of abandoning the church and taking his diocese with him. The diocese said it helped form the national church in 1789 and was not legally bound to stay.

Lawrence insisted he and the 38 parishes that followed him out of the national church composed the Episcopal Diocese of South Carolina. The 30 parishes that remained part of the national church sued, asking a judge to determine which body could legally claim the name “Episcopal” and who controlled the property.

Circuit judge Diane Goodstein ruled that the national church has “no provisions which state that a member diocese cannot voluntarily withdraw its membership.” The diocese was chartered in 1785, four years before the national church.

“With the freedom to associate goes its corollary, the freedom to disassociate,” Goodstein ruled.

Goodstein’s decision affects the fates of some of Charleston’s most iconic churches, whose towering steeples and colonial charm helped earn Charleston the nickname “the Holy City.”

The ruling follows similar decisions in Fort Worth, Texas, and Quincy, Illinois, in which judges have ruled in favor of breakaway dioceses, even as most courts have said that the property of individual breakaway parishes belongs to the denomination.

Lawrence said the national church’s decades-long battles over sexuality were just a “distraction” in the South Carolina fight.

“This has never been about exclusion,” he said in a statement. “Our churches, our diocese, are open to all. It’s about the freedom to practice and proclaim faith in Jesus Christ as it has been handed down to us.”

The parishes that remain loyal to the national denomination, known as the Episcopal Church in South Carolina, plan to appeal Goodstein’s ruling, with its chief lawyer, Thomas S. Tisdale, saying the ruling was expected.

“We have understood from the beginning that this lawsuit was mounted after years of planning by individuals who were intent upon taking the diocese and its property out of the Episcopal Church,” spokeswoman Holly Behre said. “We have also understood that defending ourselves will be a long legal process.”

A separate suit in federal court accuses Lawrence of “false advertising” by “continuing to represent himself as bishop of the diocese.”

A spokeswoman for the national denomination, based in New York, declined to comment on either case. —Religion News Service

This article was edited on February 17, 2014.