Silly Little People, We Are An Autocracy!

‘Dissident’ plaintiffs can’t speak for all members, LDS Church argues in seeking to block tithing lawsuit

Utah-based faith works to halt the sharing of evidence until a federal judge rules on an expected push to toss out the class-action case.

A new court filing makes clear that The Church of Jesus Christ of Latter-day Saints is treating a class-action lawsuit over tithing as a multipronged attack on religious freedoms.

In arguments unveiled Friday, church lawyers are urging U.S. District Judge Robert Shelby in Salt Lake City to put any court-sanctioned evidentiary probes in the newly formed case on hold until he can rule on an upcoming motion to throw out the fraud allegations.

In moving to block the process, known as discovery, the Utah-based faith’s attorneys are promising to mount a formidable challenge in September outlining how core lines of argument in the high-profile case jeopardize the U.S. Constitution’s legal shields against intrusions into matters of religious belief.

“This is anything but a garden-variety consumer class action based on misrepresentations about a product or service,” the church’s lawyers told Shelby, instead calling the suit “a sprawling class action against a worldwide religious organization” filed by “a handful of dissenters.”

Labeling the plaintiffs as nonbelievers, the church is also challenging their legal standing to represent millions of active Latter-day Saints in a class action over the sacred practice.

“How can plaintiffs who do not share that faith adequately represent those who believe?” church lawyers write, adding that they “offer no reason why millions of faithful tithe-paying church members would want any part in plaintiffs’ attack on the church.”

Noting that all but one of the nine who have sued the faith since October are “apparently no longer even church members,” the new filing continues, “they offer no rationale for how persons who lack faith in the doctrine of tithing as taught by the church can adequately represent millions of persons who have faith on a matter that itself is deeply rooted in faith.”

And because they “do not and cannot adequately represent the members of the proposed class,” the brief states, their lawyers should not be allowed to start evidentiary discovery “that conflicts with the interests of the class.”

Counterarguments from the plaintiffs’ lawyers are expected to be filed in a few weeks.

Claims of fraud and ‘a slush fund’

Nine plaintiffs in five states are suing the global church and its investment arm, Ensign Peak Advisors, alleging that senior church leaders and their money managers lied for decades about using member tithing donations solely for charitable causes while instead investing the cash in a multibillion-dollar “slush fund.”

The multiple federal cases pressed by former or disaffected Latter-day Saints in Utah, Illinois, Washington, Tennessee and California were rolled into one action last month and placed in Shelby’s Salt Lake City courtroom, mere blocks from the church’s worldwide headquarters.

The class-action case accuses Ensign Peak and the church of fraud, unjust enrichment and breaching fiduciary duties. In the newly consolidated complaint, the plaintiffs seek the return of varying amounts in individual donations they gave — ranging from $3,700 to $183,256 — along with other remedies, including possible creation of a national class of plaintiffs with similar interests.

In addition to refunds, the class-action suit calls for declaring the church’s financial practices illegal and ordering a halt to tithing altogether while accountants sort through the faith’s finances or the court appoints a special monitor.

In several court venues and public statements until now, church officials and their lawyers have firmly denied that top leaders ever misled members on tithing. Faithful Latter-day Saints donate 10% of their incomes to the church.

‘Refrain from trolling’

Last week’s church filing, its first major move in the class-action case, also paints an intriguing picture of how its lawyers plan to fight it.

The new motion notes that the lawsuit takes direct aim at questions that are fundamentally matters of belief, including faith in the act of tithing itself, church attorneys argue, “based on deeply personal religious experiences developed over a lifetime.”

That puts probing the lawsuit’s main allegations squarely off-limits to a class action, the lawyers contend, under the First Amendment’s protections of church autonomy which preempt government intrusion.

Allowing it to proceed, they proclaim, risks second-guessing decisions made by duly appointed ecclesiastical leaders regarding the church’s mission, its prophesied future, the priorities and timing of its spending and programs, and “the amount of funds needed currently versus the future to fulfill the church’s destiny and how to invest reserve funds.”

The assertions of “disenchanted members about how the church accomplishes its mission,” the attorneys write, “implicate precisely the kind of internal church conflict the First Amendment prohibits courts from adjudicating.”

Those same arguments also apply to the process of discovery, argue the faith’s lawyers, who at one point cite a previous ruling that says “courts should refrain from trolling through a person’s or institution’s religious beliefs.”

The lawyers argue that Shelby should at least put discovery on hold and decide the merits of the underlying case “at the earliest possible stage of litigation” to fully protect the church’s autonomy and rights to free exercise of religion.

A road map for the litigation issued by Shelby in July calls for the church to seek dismissal of the lawsuit in early September, followed by a response from the plaintiffs in mid-November.

More on ‘copycats’

Church attorneys have labeled the suits that went into this latest class action case “copycats” stemming from a separate legal battle brought more than three years ago by prominent Utahn and onetime church member James Huntsman. The wealthy film distributor also accuses top Latter-day Saint leaders of misleading the faithful over how tithing donations were spent.

A son of the late industrialist-philanthropist Jon Huntsman Sr. and brother to former Utah Gov. Jon Huntsman Jr., James Huntsman seeks the return of $5 million in tithing, plus penalties and interest, but is not pursuing class-action status.

The 17.2 million-member church and its legal supporters are also mounting religious-liberty arguments in that case, saying that it risks trampling religious protections. The issue is being closely followed nationally for its implications on religious autonomy as well as its potential impact on a range of nonprofits relying on donations.

Huntsman’s case has focused on the church spending $1.4 billion on its commercial venture with City Creek Center in downtown Salt Lake City and statements made by then-President Gordon B. Hinckley. It is now pending before the California-based 9th U.S. Circuit Court of Appeals.

New oral arguments in Huntsman’s case are scheduled in late September.