Plaintiffs suing The Church of Jesus Christ of Latter-day Saints in a would-be class-action lawsuit over tithing say they are not challenging how the faith spends and manages its money.
Instead, in their latest arguments filed this week in Utah’s U.S. District Court, lawyers for the nine current or disaffected church members allege their dispute with the worldwide faith centers on a straightforward and secular deception that need not be viewed through a religious lens.
Church leaders solicited tithes and other donations for charitable purposes for decades, the plaintiffs assert in newly filed briefs, but diverted much of that cash to the church’s investment arm, Ensign Peak Advisors, where managers multiplied it into “vast reserves” the faith sought to hide.
“By actively concealing the size of these reserves,” their attorneys explain to federal Judge Robert Shelby, “defendants fraudulently induced plaintiffs and the class to donate more than they would have had defendants not concealed their holdings.”
The courts, they continue, “have never suggested that, ‘under the cloak of religion,’ church officials may ‘with impunity, commit frauds upon the public.’” And the plaintiffs are not challenging any Latter-day Saint teachings, their new briefs assert. Their claims “concern purely secular representations.”
The legal principle of church autonomy from legal intrusion, in other words, doesn’t apply to their fraud case, the plaintiffs maintain, nor does it bar their action.
(Trent Nelson | The Salt Lake Tribune) The Church Office Building in Salt Lake City in 2023. The faith's vast public holdings reach into the billions.
They cite comments attributed to Roger Clarke, president of Ensign Peak, stating that the “reason for the cover-up of the billions of LDS funds was so ‘they never wanted to be in the position where people felt like, you know, they shouldn’t make a contribution.’”
By invoking faith as a defense, the church’s legal motions opposing the case amount to a mischaracterization, the plaintiffs say, “setting up a paper tiger so they can knock it down.” The plaintiffs instead argue they are challenging “the deceit with which defendants drove their solicitation of donations,” not their “prerogative to spend funds or manage their affairs.”
The arguments are part of the latest exchange in a would-be class-action case against the church and Ensign Peak that was consolidated in April in Shelby’s Salt Lake City courtroom.
The new briefs also come in response to motions in September from the church and Ensign Peak to throw out the case, largely on religious grounds.
Secular vs. religious
(Leah Hogsten/The Salt Lake Tribune) U.S. District Judge Robert Shelby, seen in November 2017, is overseeing the proposed class-action case against The Church of Jesus Christ of Latter-day Saints.
Church attorneys have argued the lawsuit and similar cases filed over the sacred donation practice seek to breach vital barriers that should bar legal intrusions on religious thought and church governance. They’re seeking to have the case dismissed outright.
In an array of court venues and public statements up to now, church officials and their attorneys have firmly denied that top leaders ever misled members on tithing, which calls for faithful members to give 10% of their income.
Shelby has scheduled oral arguments in December on whether to dismiss the high-profile complaint entirely or allow it to proceed.
In addition to recovering their own donations, the 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.
Legal briefs indicate that if Shelby approves class-action status, the case could balloon to millions of members and former members as plaintiffs.
In August, the judge agreed to pause any sharing of evidence, known as discovery, until he decides whether the underlying lawsuit should advance.
Believers vs. nonbelievers
(Illustration by Christopher Cherrington | The Salt Lake Tribune)
The plaintiffs remain adamant that First Amendment protections shielding issues of spiritual belief and church autonomy from legal review don’t bar their would-be class-action against the faith.
The current or former Latter-day Saints from five states (Utah, Tennessee, Illinois, Washington and California) also say the church has distorted their arguments to create the illusion of inherent conflict among potential members of any class action, as though to pit believers and nonbelievers against one another.
Church lawyers seem to have ignored, they say, that at least one of the Utah plaintiffs, Masen Christensen, remains an active Latter-day Saint.
At the same time, attorneys for the worldwide faith of 17.2 million members have repeatedly marginalized if not derided all the plaintiffs as “dissidents,” the plaintiffs’ brief contends, based on matters of belief, when their legal action is secular.
“Nothing in the complaint remotely challenges tithing or any other religious tenet or practice,” their lawyers argue, “and tithes are just one form of donations that are at issue. Rather, this litigation is about defendants’ lack of transparency and deceit to induce donations through misrepresentations and concealments regarding how donated funds were used.”
Lawyers for the church and Ensign Peak “surmise” that the plaintiffs who are no longer active in the faith “oppose its teachings and governance,” attorneys for the plaintiffs assert, “but nothing in the complaint suggests that any plaintiff — let alone Mr. Christensen — challenges them.”
“This litigation is not about some individuals opposed to LDS [doctrine] in general or tithing obligations in particular seeking to also represent those who are not opposed,” the brief states. “Rather, these consolidated actions are, plain and simple, about lack of accountability and outright deceit — namely, how defendants deceptively solicited various donations, tithes being just one kind.”
Along with tithing, their lawsuit also takes aim at what are known as fast offerings — once a month, devout members go without food for 24 hours and then give the money saved by skipping those meals to help the poor — as well as wider solicitations on behalf of Latter-day Saint philanthropies.
The briefs also sought to debunk the church’s assertion that certifying a class in the case would lead to the disclosure of personal financial details of those involved, calling that argument “hyperbolic and specious.”
“Plaintiffs’ claims do not focus on particular pitches made to individual donors,” they say, “but rather challenge defendants’ overarching and active concealment of Ensign’s holdings and deceptive solicitations to drive donations.”
More on SEC settlement
The plaintiffs contend a 2023 settlement by the church and Ensign Peak with the U.S. Securities and Exchange Commission “put an end” to a “deliberate, decadeslong, illegal concealment” of a church portfolio of stocks and other equities estimated to have topped $100 billion or more in value.
The SEC settlement levied $5 million in penalties against the church and Ensign Peak for failing to properly disclose past stock holdings and going to “great lengths” to deliberately “obscure” the church’s investment portfolio over decades.
Under the deal, Ensign Peak was ordered to pay $4 million and the church $1 million. The SEC charged the investment firm with essentially creating a dozen shell companies “that obscured the church’s portfolio and misstated Ensign Peak’s control over the church’s investment decisions.” The SEC also charged the church with “causing these violations.”
That SEC settlement “pulled back the curtain on defendants’ deceit,” plaintiffs contend in their latest brief. And, like the federal regulatory agency, those involved in the proposed class action are seeking relief, the filing says, “without reference to church doctrine or running afoul of the First Amendment.”
In its own news release posted soon after the SEC announcement, the church expressed its “regret” for what it described as errors and said that “investment returns” — not members’ tithes — would be used to cover the settlement.
