SALT LAKE CITY (ABC4) — The question of whether a prominent member of the Church of Jesus Christ of Latter-day Saints can sue the church over how his tithes were used continues to make its way through the legal system.
James Huntsman, brother of former Utah Gov. Jon Huntsman, Jr., sued the church in March 2021, claiming that millions of dollars of his tithes were used by the church for non-charitable matters. James Huntsman lives in California and filed his suit in a federal court in Los Angeles. This comes after he left the church in 2020. By September 2021, a U.S. District Court had dismissed Huntsman’s lawsuit, awarding the LDS church a summary judgment.
Last month, however, that ruling was overturned and Huntsman’s suit was reinstated. Now church officials are asking the 9th U.S. Circuit Court of Appeals to again toss out Huntsman’s suit, this time asking for a “rehearing en banc,” which simply means a hearing involving all of the court’s judges, and not just a panel of them.
In doing so, the church argues that Huntsman’s suit would open “threats” to all churches that have lapsed members.
“Every religion has adherents who lose their faith; opening the secular courts to their refund claims inevitably risks inquiries into church doctrine and the donor’s spiritual motivations for tithing, along with invasive entanglements in internal religious affairs, that pose dire threats to religious liberty,” states the Church’s petition, which can be read in its entirety below.
The Church calls Huntsman’s suit a “profound threat to religious liberty.” It argues that at the inception of the church in the 1830s, members were forced to create “commercial enterprises necessary for survival” due to persecution and “several forced migrations.” As such, the church has maintained a corporate arm throughout most of its history.
Huntsman’s lawsuit, however, alleged the Church was using tithes — or a traditional, voluntary 10% donation of one’s salary to the Church — for business opportunities, not charitable resources. Huntsman specifically claimed the church used tithes to build City Creek, a mixed-use commercial development across from the Church’s headquarters in Salt Lake City. He also claimed the Church used tithing funds to “bail out the Beneficial Life Insurance company.”
The Church has repeatedly stated since 2003 that it did not use tithing funds for those projects, but rather the interest from investments.
“This is no ordinary fraud case,” states the church’s petition. “In the first place, it lacks the first essential ingredient of a fraud claim, i.e., a misrepresentation. [In 2003, then-Church President Gordon B. Hinkley] explained to the faithful that an important building project would not be financed by tithing funds, but rather would be paid for through earnings on investments. The Church then proceeded to do just that.”
Huntsman’s original suit alleges he became aware of “the LDS Corporation’s fraud” via the whistleblower complaint filed by David Nielsen, a former senior portfolio manager of Ensign Peak Advisors (LDS Corporation’s investment division).” In that complaint, Nielsen said the church and Ensign Peak Advisers, a nonprofit investment manager overseen by ecclesiastical leaders, used shell companies to hide the full value of the assets they control.
In February this year, the U.S. Securities and Exchange Commission reached a settlement in that case, fining the church $1 million and Ensign Peak Advisers $4 million. Ensign Peak avoided disclosing investments “with the church’s knowledge,” denying the SEC and the public of accurate information required under law, Gurbir Grewal, the agency’s enforcement director, said in a statement. Federal investigators said for a period of 22 years, the firm violated agency rules and the Securities Exchange Act by not filing the paperwork required that disclose the value of its assets.
