Friday looms as a big day in the legal history of The Church of Jesus Christ of Latter-day Saints as the once-secret story of the faith’s vast financial empire continues to unspool.
A federal judge will hear oral arguments in Salt Lake City in a would-be class-action case accusing the worldwide church of fraud over tithing, the sacred practice of donating a tenth of one’s income to the faith.
The following Q&A will bring you up to speed about the combined lawsuit, the players, the allegations, the defenses and the high stakes.
In a nutshell, what’s the case about?
This is about billions in tithing paid to the Utah-based church over nearly two decades and assertions that the church amassed those funds by deceiving its members.
Ultimately, though, the legal dispute turns on vital principles enshrined in the U.S. Constitution and what the world has learned in recent years about the religion’s immense wealth.
When did it all start?
(CBS News) David Nielsen, a former senior portfolio manager with the church's investment wing who turned whistleblower, talks to correspondent Sharyn Alfonsi of "60 Minutes."
In late 2019, a whistleblower and former fund manager for the church’s investment arm, Ensign Peak Advisors, leaked details to the IRS of a $100 billion-plus portfolio built from tithing that church officials had worked to keep hidden.
David Nielsen also alleged that while piling up immense market returns at Ensign Peak, without spending a penny from the reserve account on charity, church leaders diverted billions of dollars to prop up an ailing insurance company, Beneficial Life, and help build and develop the City Creek Center mall in downtown Salt Lake City.
After resigning his membership, James Huntsman, a brother of former Utah Gov. Jon Huntsman, sued the faith, alleging fraud by top church leaders and seeking to recover millions of his own donations, shaping his case from Nielsen’s exposé.
(Chris Samuels | The Salt Lake Tribune) James Huntsman, shown in 2023, sued his former church over its spending on City Creek Center and Beneficial Life.
As that lawsuit — now on appeal — progressed, others followed with their own in what church lawyers have called “copycat” claims.
Now a total of eight current and disaffected members from five states are pushing a would-be class action in Salt Lake City’s U.S. District Court.
What is the federal court being asked to do?
Plaintiffs from Utah, Tennessee, Illinois, Washington and California are suing the church and Ensign Peak not only to get back their donations but also to create a class action involving potentially millions of members with similar interests.
They’re asking a federal judge in Utah to declare the church’s financial practices illegal and order a pause to tithing altogether, while accountants sort through the faith’s finances or the court appoints a special monitor.
Church lawyers have forcefully invoked the Constitution’s protections for religion, asking the court to label the lawsuit an unauthorized invasion into deep spiritual questions and a breach of church autonomy. Their briefs have at times likened the plaintiffs’ pleadings to asking a judge to decide the truth of a biblical story or a church member’s beliefs.
In this way, the legal dispute is all but sure to plow fresh and difficult legal grounds under the First Amendment’s safeguards of religions while balancing those with legal notions of fraud in the secular world.
After firing legal salvos back and forth for months, the two sides are headed to face-to-face arguments Friday on the church’s legal motions to have the entire case tossed out.
Who is the judge?
(Leah Hogsten | The Salt Lake Tribune) U.S. District Judge Robert Shelby listens to Bluff residents 2017. He presides over a would-be class-action fraud case against The Church of Jesus Christ of Latter-day Saints.
Robert J. Shelby, chief judge of the U.S. District Court in Utah, presides over the case.
A special panel of judges in Washington balled five cases into one last spring and sent it to Shelby’s Salt Lake City arena on the argument that key witnesses and documents — if this all comes to full-blown litigation — would be nearby at church headquarters.
Many know of Shelby, an appointee of then-President Barack Obama, for a landmark December 2013 ruling that struck down Amendment 3 of the state constitution, effectively legalizing same-sex marriage in Utah more than a year before the U.S. Supreme did the same nationally.
Shelby has also presided over another recent tithing lawsuit against the church. That August 2019 legal action, brought by former Latter-day Saints, including North Carolina resident Laura Gaddy, has also veered into church-autonomy issues.
In an earlier version of the Gaddy suit, Shelby determined that some allegations sought to delve into matters of faith shielded by the Constitution. He also has ruled, however, that religious institutions are not immune from fraud claims.
Like Huntsman’s dispute, the Gaddy case is also pending on appeal, this one before the 10th U.S. Circuit Court of Appeals in Denver.
What are plaintiffs arguing?
Their central assertion is that the church, while soliciting tithes and other donations for charitable purposes over the decades, instead diverted much of that money to Ensign Peak, where managers “hoarded” tens of billions and dollars and multiplied the account in a “slush fund” the faith sought to conceal.
They argue their case has been strengthened by a 2023 settlement with the U.S. Securities and Exchange Commission that levied $4 million in penalties against Ensign Peak and $1 million against the church for failing to properly disclose past stock holdings and going to “great lengths,” federal regulators said, to deliberately “obscure” the scale and scope of the faith’s investment portfolio.
They also want to certify a class of plaintiffs that could balloon to millions of members.
What are the church’s defenses?
First, church attorneys are adamant that tithing funds are sacred and that Latter-day Saint leaders never misled anybody over how that money was used.
Putting surplus donations in Ensign Peak, they say, is simply part of “prudent investment” in serving the church’s long-range mission and that the plaintiffs are seeking to second-guess financial decisions by top church authorities in an unconstitutional infringement of religious liberty. They point to the church’s temple-building blitz and “ever-growing” philanthropic efforts as examples of bolstering religious goals.
They’ve already invoked the principle of church autonomy in successfully persuading Shelby to delay the discovery of evidence in the case until he can decide on the church’s motion to dismiss the lawsuit.
Their arguments Friday are all but certain to take a similar tack.
Church attorneys are also fighting moves to certify the class action, saying the plaintiffs are “dissenters” who are trying “to turn all faithful church members who tithed ... into litigants against their own faith.”
Who are the key lawyers?
All the parties have heavyweight legal teams. Last May, at least 16 lawyers filed in before Shelby’s bench for their first meet-and-greet hearing.
David Jordan, a prominent Salt Lake City-based lawyer for the church and a former U.S. attorney, has been out in front on the church’s side, along with colleagues at Kirton McConkie, the faith’s longtime legal counsel.
As Friday’s hearing neared, the church added to its team Paul Clement, a former U.S. solicitor general and a top attorney on conservative causes, especially religious freedom. Notably, Clement seemed to capture a receptive ear from judges when he argued the church’s side in the Huntsman case during oral arguments before the 9th U.S. Circuit Court of Appeals in San Francisco.
(The 9th U.S. Circuit Court of Appeals, via YouTube.com) A screen capture from a hearing on James Huntsman's fraud lawsuit against The Church of Jesus Christ of Latter-day Saints.
Legal punch for the plaintiffs is led by James Magleby, a veteran litigator with the Salt Lake City firm Magleby Cataxinos, along with a team of lawyers from New Jersey, Pennsylvania and Texas.
David Jonelis, a Los Angeles lawyer representing Huntsman in his tithing action, is also an attorney for a California couple among the plaintiffs in this case.
Who are plaintiffs?
In October 2023, Daniel Chappell, a Virginia resident, and Masen Christensen and John Oaks, both from Utah, were the first of the so-called copycats to file a lawsuit, suing the church for a combined $350,000 they had donated over the past decade.
Three more suits pressed by former or disaffected Latter-day Saints dropped within a week of one another in December 2023. Plaintiff and former church member Joel Long, a Missouri resident, sought $60,000 he said he paid in tithing while living in Illinois. Kevin Risdon, who lives in Washington state said in court documents he was active in the church from 1989 to 2016 and his suit also seeks a refund of about $60,000 in tithing. Brandall Brawner is based in Tennessee, according to his original suit, and seeks about $30,000 in tithing paid between 2003 and 2012.
Jonelis sued in February 2024 on behalf of Californians Gene and Michelle Judson, a couple seeking about $40,000.
Which defendants are named?
Just two: The church and Ensign Peak Advisors.
What are the stakes?
Friday’s hearing is a make-or-break juncture, however you look at it. Beyond that, it’s hard to know what this might mean, except that it could be huge.
Shelby will use the hearing to help decide on a motion to dismiss the tithing lawsuit altogether. Chances are, the judge will ask questions and listen to the lawyers argue, then adjourn and issue a decision later.
Church attorneys want the lawsuit thrown out on multipronged religious and legal grounds. If they win, it’s a proverbial “case closed,” and the judge’s basis for dismissal could set new legal standards on this topic.
If Shelby leaves any grounds for the lawsuit to proceed, the church is likely to appeal.
The judge has already paused the discovery of evidence and Shelby based that on concerns from church lawyers that even a quest for evidence in the case might violate religious protections. Gauging from that and the church’s legal approach in Huntsman’s challenge, the church is likely to resist any further court scrutiny of its financial affairs.
Other faiths, nonprofits and third parties have jumped in with their own briefs in Huntsman’s case. It now appears that along with a lawyer for the church, Shelby will also hear Friday from an attorney representing the General Conference of Seventh-day Adventists and the National Association of Evangelicals.
The way lawyers for the plaintiffs have framed this, meanwhile, they’ll be looking for a confirmation from Shelby that their arguments on secular notions of fraud and in favor of certifying the would-be class action still have legal legs. Along the way, Shelby may also offer an answer to whether they can proceed without unduly entangling issues of faith in ways that the Constitution and case law have forbidden.
If Shelby keeps their chances alive, the resulting stakes could be huge — with billions of dollars in play, millions of current and former Latter-day Saints affected, and profound ideas in flux over how faith and the law interact.
