LDS Church can’t use religion to dodge sharing evidence in tithing case, say opponents

The Church of Jesus Christ of Latter-day Saints and its investment firm should not be able to avoid sharing evidence in a high-profile tithing lawsuit simply by invoking the idea of religious autonomy, say former and disaffected members who are suing the Utah-based faith.

In what amounts to the opening spat in a brewing federal class-action case over millions of dollars raised with the sacred donation practice, plaintiffs are pushing back on the church’s assertions it should have qualified immunity from discovery early in the litigation.

Nine individuals in five states are suing the global church of 17.2 million members and its investment firm, Ensign Peak Advisors, alleging that top church leaders and their money managers lied for decades about using tithing solely for charitable causes while instead investing the cash in a multibillion-dollar “slush fund.”

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 a motion filed Aug. 23, lawyers for the church have asked U.S. District Court Judge Robert Shelby in Salt Lake City to put any quests for evidence in the lawsuit on hold until he can decide whether to dismiss the entire matter later this fall.

In a variety of court venues and public statements until now, church officials and their attorneys have firmly denied that top leaders ever misled members on tithing.

Because tithing is a religious principal, the faith’s attorneys argue, the legal doctrine of church autonomy ultimately forbids such fraud claims. That also goes for court-sanctioned queries for evidence, they said, as part of discovery.

The church is expected to file its motion to dismiss the lawsuit in early September.

Faithful Latter-day Saints donate 10% of their incomes to the church.

Ensign Peak is ‘secular’

Firing back on Friday, lawyers for the plaintiffs say the church is grasping for “grab-bag arguments” to assert it has an “automatic” right of immunity to discovery.

They note that Ensign Peak is an “indisputably secular” money manager — and not subject to any potential religious barriers in the same way.

Plus, tithes are not the only church donations at issue in their fraud claims, the plaintiffs say, noting that fast offerings — in which devout members go without food for 24 hours and then give the money saved by skipping those meals to help the poor — and contributions solicited by a church charity are also part of their lawsuit.

Most basically, they argue, even if the church were the sole defendant and only tithing were at stake, the plaintiffs’ assertions could still be decided in court without ever having to delve into the religious principles behind the doctrine of tithing.

The plaintiffs say in their latest motion that much of the evidence they are seeking with discovery involves how Ensign Peak spent money solicited and collected by the church as charitable donations. That is relevant, they contend, to key commercial payments Ensign Peak made toward the church’s City Creek Center in downtown Salt Lake City and to prop up its ailing insurance company, Beneficial Life.

“Where did its money arrive from? Where was it kept? How did it come to be used to bail out a failing insurance business and build a shopping mall?” the plaintiffs ask. “There should be no question whether defendants can account for all these funds, and, accordingly, doing so should not be cumbersome for either of them.”

Legal standing questioned

The church has said that demands for evidence in the tithing case could threaten its religious freedoms, labeling it a version of legal “trolling” preempted by legal precedent and the U.S. Constitution. In addition to trying to block discovery, church lawyers have called the new suit “a sprawling class action against a worldwide religious organization” filed by “a handful of dissenters.”

As nonbelievers, church attorneys maintain, the plaintiffs are likely to lack the legal standing to represent millions of active Latter-day Saints in a class action over tithing, saying they “offer no reason why millions of faithful tithe-paying church members would want any part in plaintiffs’ attack on the church.”

The plaintiffs’ lawyers have countered by calling those challenges “tangential attacks,” saying they don’t adequately support the church’s claims that discovery of evidence would be burdensome or prejudicial enough to legally justify Shelby putting it on hold.

Multiple federal cases pressed by former or disaffected Latter-day Saints in Utah, Illinois, Washington, Tennessee and California were rolled into one action earlier this year and placed in Shelby’s Salt Lake City courtroom, just 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.

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.

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