In Sri Shirdi Sai Baba Temple of Austin v. Lam, (TX Bus. Ct., July 14, 2026), the Texas Business Court’s holding that a non-profit corporation’s Certificate of Formation controls over by-laws that conflict with the Certificate of Formation settled a complex battle over control of a Hindu Temple. The Temple’s Certificate of Formation placed management of the Temple in a board of directors and stated that the Temple “will have no members.” In 2024, the Temple’s Board resigned in the wake of a fraudulent donation-matching scheme that was discovered at the Temple. The new Board adopted Bylaws that purported to vest control of the Temple in a General Body of Trustees, defined as devotees who contribute a one-time membership fee of $20,000. An attorney advised the Board that the bylaws were invalid. Nevertheless, one faction went ahead and held an election of a new Board by the Trustees. The court refused to issue a declaratory judgment that would have validated the election, saying in part:
Texas courts apply a “neutral principles methodology,” under which they lack jurisdiction to decide, and “must defer to the decisions of appropriate ecclesiastical decision makers” with respect to, “questions of an ecclesiastical or inherently religious nature,” but “apply neutral principles of law to non-ecclesiastical issues involving religious entities,” including issues of corporate formation and governance, “in the same manner as they apply those principles to other entities and issues.” This case presents a non-ecclesiastical issue of corporate governance that can be decided by neutral application of Texas corporate law, such that the Court has jurisdiction.