With a federal judge shutting down the latest legal challenge to The Church of Jesus Christ of Latter-day Saints over its handling of billions of dollars in sacred donations from its members, where does that leave the larger story of tithing and transparency in light of the faith’s vast wealth?
In a ruling Thursday, federal Judge Robert Shelby seemed to close a major chapter in that saga, flowing from revelations in late 2019 about the scope of the global church’s financial empire, estimated by independent analysts to be worth at about $293 billion.
In a 44-page ruling, Shelby dismissed a potential class-action lawsuit brought by current and disaffected Latter-day Saints from six states who had accused the faith of fraud in its spending and stockpiling of tithing funds.
Avoiding heavy constitutional questions opened under the First Amendment and a legal doctrine known as church autonomy, the judge instead threw out the fraud case on technical grounds.
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The plaintiffs waited too long after that explosive leak from an IRS whistleblower to file their cases, the judge wrote, invoking a three-year statute of limitations after the church’s $100 billion-plus investment portfolio came to public light. The plaintiffs, the judge noted, missed that legal window by nine months or more.
Shelby also poked major holes in the legal structure of their underlying arguments as to how they sought to prove elements of fraud on behalf of church leaders.
An attorney for those plaintiffs said Friday that Shelby’s ruling was a blow to transparency owed to millions of Latter-day Saints who have contributed 10% of their hard-earned income as tithes.
“They have the right to know how these donations are being used,” said Christopher Seeger, founding partner of the New Jersey-based law firm Seeger Weiss LLP and co-lead counsel for the plaintiffs.
This ruling will “make it more challenging for members to understand how the Corporation of the President of the Church of Jesus Christ of Latter-day Saints manages the billions in funds donated in good faith,” Seeger said in a statement shared Friday.
“We remain committed,” Seeger said, “to fighting for full transparency and accountability for the millions of members around the world.”
He and other lawyers for the plaintiffs did not address whether Shelby’s ruling would be appealed to the 10th U.S. Circuit Court of Appeals in Denver.
‘An expression of faith’
For its part, the church welcomed Shelby’s decision, which followed hotly contested oral arguments in January, saying the case had been “rightfully dismissed.”
“Tithing donations ... are an expression of faith and allow the church to fulfill its divine mission,” church spokesperson Sam Penrod said in a statement late Thursday. “These donations are carefully used and wisely managed, under the direction of senior church leaders.”
Shelby’s ruling dismissed both the plaintiffs’ legal actions against the church as well as its investment arm, Ensign Peak Advisors, with prejudice, meaning the case is closed and cannot be amended and refiled.
A similar high-profile lawsuit alleging church fraud over tithing, filed in 2021 by wealthy Utahn James Huntsman and citing the whistleblower’s claims, got dismissed early this year by the 9th U.S. Circuit Court of Appeals.
In that unanimous ruling, the court’s 11 judges found “no reasonable juror” could have concluded that the Utah-based faith fraudulently misrepresented the source of funds it used to spend $1.4 billion on building and developing City Creek Center, a church-owned mall and residential towers in downtown Salt Lake City.
That ruling also stopped short of a deep legal dive into underlying issues of religious freedom and whether the U.S. Constitution bars courts from all legal probes of the church financial decisions.
Sam Brunson, a popular Latter-day Saint blogger and a tax law professor at Loyola University Chicago, said Shelby’s reliance on a statute of limitations argument to reject the latest complaint “basically forecloses the possibility of future suits” against the church along the same legal lines.
“The statute of limitations problem is really hard to get around,” Brunson wrote via email. “Unless a potential litigant is in a jurisdiction where the statute of limitations for fraud exceeds five or six years, it’s too late for them to file a suit.”
Religious freedom still on the table
But Shelby’s decision leaves other crucial questions on any future legal challenges over Latter-day Saint tithing and church finances unanswered.
Much of the legal wrangling in the would-be class-action case focused on religious freedom, with the church’s lawyers asserting vigorously that courts have no business looking into a its financial affairs and decisions — even in the early legal stages of discovering evidence.
In this case and the Huntsman lawsuit, the church brought in top national experts to argue that stance, along with a host of friend-of-the-court briefs filed along the same lines. So with all that legal heft, it might seem like a head fake to have the Shelby case instead tossed out over timing.
Shelby’s ruling pointed directly to judicial canon he said required him to focus on “nonconstitutional failures” in the suit — before delving into thornier questions involving religion and the church’s legal autonomy to govern its financial affairs.
Many of those crucial religious liberties questions, according to Brunson, were also left unresolved in the 9th Circuit’s dismissal of Huntsman’s case.
Only one judge in that matter drew a sharp line, writing in his own opinion that church autonomy barred the courts — including his 9th Circuit colleagues — from even considering Huntsman’s fraud assertions.
“But so far,” Brunson noted, “nobody has agreed with” that judge.
For now, Shelby’s opinion clearly defers those questions as well. Nothing in his ruling, Brunson added, “depends on the church being a church.”
“This opinion could have been written about a museum, about a university, or any other (probably charitable) organization that receives donations,” he said.
In that way, Brunson said, “it’s a pretty standard case.”
As for additional church transparency about its riches — something outsiders and even faithful Latter-day Saints like Brunson have called for — the latest ruling may do little to affect that pressure.
“This issue would go away,” Brunson has previously argued, “if the worldwide church were transparent about its finances, a thing entirely within its power.”
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