A series of fraud lawsuits filed in multiple states against The Church of Jesus Christ of Latter-day Saints over tithing have now been moved to a single federal courtroom in the faith’s home state of Utah.
In the name of justice and legal efficiency, an esoteric panel of federal judges based in Washington, D.C., has ordered four would-be class-action complaints against the church — filed by former or disaffected Latter-day Saints in Illinois, Washington, Tennessee and California — transferred to the Salt Lake City court of U.S. District Judge Robert Shelby.
Gathering in a court blocks away from the faith’s world headquarters, the suits join a similar complaint already pending before Shelby. Three were moved Monday; a fourth is labeled a potential “tag-along” to follow later.
Church lawyers have called these suits “copycat” actions stemming from a separate legal battle brought by prominent Utahn and onetime church member James Huntsman, accusing top Latter-day Saints leaders of lying over how tithing donations from churchgoers were spent.
As church attorneys and legal supporters continue to fight Huntsman’s 2021 case before the 9th U.S. Circuit Court of Appeals, these other nearly identical actions have bubbled up across the country, making similar assertions of fraud and seeking the return of varying sums in donations.
The five-member Judicial Panel on Multidistrict Litigation agreed in a recent ruling that the five cases share common legal facts. The panel called Utah “the logical center of gravity” for further court review of the disputes — as church headquarters and home to a host of relevant documents and witnesses.
Attorneys for the faith and its investment arm, Ensign Peak Advisors, which is also being sued in these suits, had both supported consolidating them in Utah.
Common facts
Plaintiffs in the five cases all allege that church leaders falsely claimed tithes paid by members were used only for charitable or humanitarian purposes, the D.C. panel wrote, “while instead allowing tithes to accumulate in investment accounts, hiding the extent of its wealth from church members, and spending tithing monies for commercial purposes.”
All also contend, according to the panel, that they were misled by church leaders’ statements that no tithing would be used to develop City Creek Center in downtown Salt Lake City and then learned via an IRS whistleblower that the church diverted $1.4 billion to the mall project.
The church has steadfastly denied that any tithing funds were used for City Creek Center, saying instead the money came through its for-profit companies and investment earnings on tithing amassed in its reserve funds.
Centralizing the tithing cases, the D.C. panel wrote, will avoid duplicative discovery of evidence as the cases roll forward and prevent inconsistent pretrial rulings, including ones on First Amendment issues, the admissibility of experts offering testimony and other issues.
(Leah Hogsten | The Salt Lake Tribune) U.S. District Judge Robert Shelby, shown in 2017, will handle tithing lawsuits seeking class-action status against The Church of Jesus Christ of Latter-day Saints.
The panel described Shelby, who is now the Utah court’s chief judge, as an experienced jurist “with the ability and willingness to manage the proceedings efficiently. We are confident that he will steer this matter on a prudent course.”
Shelby, who was appointed to the bench by then-President Barack Obama, made headlines in December 2013 when he struck down Amendment 3 of the Utah Constitution, effectively legalizing same-sex marriage in the state.
The Wisconsin native, who replaced Judge Tena Campbell, also previously presided over at least one fraud case against the church, brought in 2019 by former Latter-day Saint Laura Gaddy, a North Carolina resident.
That suit alleges mail and wire fraud, breach of fiduciary duties, fraudulent concealment and civil racketeering under the federal Racketeer Influenced and Corrupt Organizations Act, also known as RICO.
It is currently pending before the 10th U.S. Circuit Court of Appeals, which covers Utah.
Status of Huntsman’s case
Huntsman, who resigned his church membership in 2020, sued the faith in March 2021.
His case — which is not seeking class-action status — cites the sworn testimony from whistleblower David Nielsen, a former portfolio manager with Ensign Peak, that church leaders knowingly misled members on how money was being 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.
Huntsman’s lawsuit has been tossed out of federal court once, only to be reinstated on appeal and then vacated again as the matter now heads to new oral arguments before the 9th Circuit in September.
Church attorneys sounded legal alarms starting in February over the spate of tithing cases springing up after Huntsman’s case got revived, warning that it “would open the floodgates for ‘copycat’ suits endangering religious liberty and church autonomy.”
Five sets of plaintiffs
Last October, Daniel Chappell, a Virginia resident, and Masen Christensen and John Oaks, both from Utah, sued the church over a combined $350,000 they had donated to the church over the past decade.
Three more suits then were filed by former or disaffected Latter-day Saints within a week of one another in December, according to court dockets, in federal courts in Illinois, Washington and Tennessee.
Plaintiff and former church member Joel Long, a resident of Chesterfield, Mo., is seeking $60,000 he says he paid in tithing while living in Metropolis, Ill.
Kevin Risdon, who lives in Cashmere, Wash., says in court documents he was active in the church from 1989 to 2016 and his suit also seeks recovery of about $60,000 in tithing.
Brandall Brawner is based in Gallatin, Tenn., according to his legal challenge, and has filed suit over about $30,000 in tithing paid between 2003 and 2012.
The most recent of the suits emerged in February in U.S. District Court in California, seeking a refund of $40,000 on behalf of Gene and Michelle Judson, a couple living in San Leandro, near Oakland.
Similar and different
Court motions indicate all parties involved — including plaintiffs, the church and Ensign Peak — had sought for the suits to be centralized under one federal judge, though they differed on the destination.
In addition to asserting similar claims, the cases now grouped before Shelby also all seek to create a class of similarly situated plaintiffs who would join the case.
They also all refer to a February 2023 settlement between the church and the Securities and Exchange Commission, which found top church officials had authorized the creation of 13 shell companies partly to evade public reporting laws and obscure the size of the faith’s investment portfolio. The SEC fined Ensign Peak $4 million and the church $1 million.
The D.C. panel noted key differences between the cases, as well. Three suits call for a special trust to be created to hold tithing and investment proceeds that the church may have obtained inequitably.
The lawsuit filed by Chappell, in contrast, seeks the appointment of a special master, the panel said, “to monitor the collection, use, and disposition of tithing funds and the proceeds.”
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