Update on Huntsman Lawsuit: Ninth Circuit Reverses Trial Court

[ksfisher]

9 minutes ago, ZealouslyStriving said:

From all I've heard from Church members online about how out of the box activities often need to be run by lawyers and such at COB and are often denied because of liability issues, thus making youth programs vastly less engaging than when I was a youth. Red tape apparently is killing some of the social aspects of the Church.

So you don't really know.

[ZealouslyStriving]

Just now, ksfisher said:

So you don't really know.

Have I personally experienced it? No.

Neither have I personally experienced skydiving, but people say it's  quite a rush.

[Stormin' Mormon]

54 minutes ago, Analytics said:

Fair point.

As a simple model to illustrate the value of this, say somebody makes a flat $100k every year from age 25 to age 67. That turns out to $4.3 million of lifetime earnings, and a total tithing bill of $430,000.

If he decides to pay the tithing at the end of his working life, and saves the money in a “tithing fund” that earns 5% interest, that fund will grow to about $1,500,000 when he retires. He then cuts a check to the church for $430,000 to settle his tithing obligation in full, and has a $1,070,000 left in the fund. It would be appropriate to pay $107,000 tithing on that investment income, leading to an extra $963,000 of retirement assets. 

Not bad.

Remember, the definition of tithing is to pay the church 10% of your income, but it doesn’t say anything about when you should pay the 10%. If your personal rainy day fund isn’t as strong as the Church’s why wouldn’t you do this?

If you see tithing as an exercise in accounting, then you've missed the entire point of it.  If tithing isn't changing your heart, changing who you are on a fundamental level, then you're doing it wrong, regardless of how closely you hew to the letter of the law.  The goal of Gospel living is not about DOING, but about BECOMING.  We don't inherit a celestial glory by virtue of anything we DO in this life, but by BECOMING the kinds of people who ardently desire a celestial eternity.  

A sacrifice is a sacrifice BECAUSE it is difficult.  A sacrifice that is not difficult is not really a sacrifice at all.  Calculating a way to make one's sacrifice as painless as possible is only calculating a way to make one's sacrifice as insignificant as possible.  And insignificant sacrifices have a much greater difficulty in effectuating a mighty change of heart.  

It's entirely possible to have such a mighty change of heart while nickel-and-diming the Lord; it's just gonna be much harder.  

 

[Analytics]

40 minutes ago, Stormin' Mormon said:

If you see tithing as an exercise in accounting, then you've missed the entire point of it.  If tithing isn't changing your heart, changing who you are on a fundamental level, then you're doing it wrong, regardless of how closely you hew to the letter of the law.  The goal of Gospel living is not about DOING, but about BECOMING.  We don't inherit a celestial glory by virtue of anything we DO in this life, but by BECOMING the kinds of people who ardently desire a celestial eternity.  

A sacrifice is a sacrifice BECAUSE it is difficult.  A sacrifice that is not difficult is not really a sacrifice at all.  Calculating a way to make one's sacrifice as painless as possible is only calculating a way to make one's sacrifice as insignificant as possible.  And insignificant sacrifices have a much greater difficulty in effectuating a mighty change of heart.  

It's entirely possible to have such a mighty change of heart while nickel-and-diming the Lord; it's just gonna be much harder.  

From my perspective, it would be a lot easier to donate 10% of my income to a charity that would deploy the money to help solve some the urgent needs we are facing as a society now. Donating money to a Church that uses 80% of its total annual income to purchase office buildings, farms, and corporate stocks seems like a waste, which causes such donations to be that much more difficult.

Perhaps that is the point?

[SeekingUnderstanding]

2 hours ago, webbles said:

I think it comes down to how a person views tithing.  For me, I don't see why I would do what you propose since it doesn't fit my mental model of how I should pay tithing.

Assuming you had an irrevocable trust that kept the funds with the church as the beneficiary, what about this doesn’t fit your mental model. I’m legitimately curious. 

[Analytics]

On 7/24/2024 at 2:02 PM, smac97 said:

Since Roger is playing around with ChatGPT, I thought I'd give it a go:

The response:

I followed:

The response:

I followed:

The response:

I followed:

The response:

I followed:

The response:

I followed:

The response:

I responded:

The response:

I followed:

The response:

I followed:

The response:

I just saw this, and in general I agree with what ChatGPT told Smac (however, I don’t have any opinion about the tax treatment--that is outside of my expertise).

That said, I don’t know what any of the questions he asked have anything to do with my position or with the position of the plaintiffs in these lawsuits.

I’m presuming that Smac really thought this was addressing my points however, and I’d like to use this as an opportunity to clarify what my actual points are.

Smac asked ChatGPT the following:

If a person ("Jack") were to donate $1,000 as a charitable contribution to a church, and if the Church were to invest that $1,000 in the stock market, and if that investment were to yield a profit of $200, could Jack then tell the IRS that his donation was $1,200 (the original $1,000 plus the $200 investment return)?

That question has nothing to do with my point of view but for the record, I agree with ChatGPT’s response.

Fixing the question so that it did address my point, I just asked ChatGPT the following:

If a person ("Jack") were to donate $1,000 as a charitable contribution to a church, and if the Church were to invest that $1,000 in the stock market, and if that investment were to yield a profit of $200. If the church then used that $200 for another for-profit project (e.g. to “build a mall”), would it be fair to say that the Church used Jack’s donation to build the mall?

Before I share ChatGPT’s answer, let me reiterate what my point is. I am not  insisting that this is the correct way of looking at it. Nor am I saying that this is the way that I looked at. Rather, I’m stating that many Latter-day Saints did in fact interpret Hinckley’d comments this way at the time. 

Here is what ChatGPT said:

The situation you described involves several steps, so let's break it down:

1. Initial Donation: Jack donates $1,000 to the church.
2. Investment: The church invests the $1,000 in the stock market.
3. Profit: The investment yields a profit of $200.
4. Reinvestment: The church uses the $200 profit to fund a for-profit project like building a mall.

Given this sequence of events, whether it is fair to say that the church used Jack’s donation to build the mall depends on how we interpret the use of the original donation and the generated profit. Here are some perspectives:

Yes, It is Fair to Say

• Direct Connection: Jack’s donation was the initial capital that enabled the church to make the investment. Without Jack's $1,000, the $200 profit would not exist.
• Economic Causation: The profit, which is being used to build the mall, is a direct result of the initial $1,000 donation. Therefore, the mall project is indirectly funded by Jack’s donation.

No, It is Not Fair to Say

• Separated Funds: Once the church invested the $1,000 and earned a profit, the original donation and the profit could be considered separate funds. The $1,000 might still be in the investment or used for other purposes, while only the $200 profit is used for the mall.
• Purpose of Donation: Jack's donation might have been intended for charitable purposes. The church's decision to use the profit for a for-profit project might deviate from the original intent of the donation.

Middle Ground

• Partial Credit: It could be acknowledged that Jack's donation played a crucial role in enabling the profit, but the actual amount used for the mall project ($200) is different from the original donation.

In summary, from an economic causation perspective, it is fair to say that Jack’s donation was used to build the mall. However, from a more nuanced or intent-based perspective, one could argue that the profit generated from the donation, rather than the donation itself, was used for the mall.

[Analytics]

After posting the above, I decided to ask a follow-up question that gets to the heart of the issue that @smac97 and I are discussing:

Say Jack’s church did not practice financial transparency, and the general membership had no idea what the church’s revenue, expenses, and investments were. And say a leader of the Church assured the membership that general donations would not be used to build the mall, but rather the mall would be funded by the Church’s for-profit business holdings. If a member later found out from a whistleblower that: 1- the Church had an enormous investment portfolio with enough assets to cover the Church’s expenses into perpetuity, 2- that the church directed perhaps 15% of its annual tithing revenue to increase the size of the investment portfolio, 3- that it never used any of the assets in the investment portfolio for any religious or charitable purposes, and that 4- this portfolio of assets was the source of funding to build the mall. If Jack felt lied to about how the mall was funded, would it be reasonable to claim the church was being honest because the funding came from investment income on the unspent donations and not from the principal?

I thought ChatGPT’s answer was spot on:

Given the additional details provided by the whistleblower, let's break down the situation further and assess whether the church's actions and assurances can be considered honest:

Key Points from the Whistleblower

1. Enormous Investment Portfolio: The church has a large investment portfolio sufficient to cover its expenses indefinitely.
2. Use of Tithing Revenue: The church directs 15% of its annual tithing revenue to grow this investment portfolio.
3. Lack of Charitable Use: None of the investment portfolio assets are used for religious or charitable purposes.
4. Source of Mall Funding: The investment portfolio funds the mall.

Jack's Perspective

Jack and other members were assured that general donations would not be used to build the mall. They later learn:

• A significant portion of tithing (donations) is diverted to grow an investment portfolio.
• The mall is funded by the investment income from this portfolio.

Analysis

1. Assurance vs. Reality:

   • Leader's Assurance: The church leader assured members that donations would not be used for the mall.
   • Whistleblower's Revelations: Although the mall is funded by investment income, this income is generated by an investment portfolio partly built using tithing revenue.

2. Technical Honesty vs. Ethical Integrity:

   • Technical Honesty: The leader's statement might technically be true if we consider "general donations" as distinct from the investment income. The mall is funded by investment income, not directly by donations.
   • Ethical Integrity: The use of donations to grow the investment portfolio, which in turn funds the mall, suggests a more complex relationship. Members might feel misled because their donations indirectly support the mall through the portfolio.

3. Transparency and Trust:

   • Lack of Transparency: The absence of financial transparency means members are not fully informed about how their donations are used.
   • Breach of Trust: Members, like Jack, might feel that the assurance given by the church leader was misleading, as the indirect use of their donations to fund the mall through investment income was not disclosed.

Conclusion

Given the revelations, Jack’s feelings of being lied to are reasonable. While the church might argue technical honesty (the mall is funded by investment income), the indirect use of donations to build the investment portfolio, which then funds the mall, constitutes a breach of ethical integrity. The lack of transparency and full disclosure undermines trust and suggests that the church's assurances were, at best, misleading.

Recommendations

1. Enhance Transparency: The church should improve financial transparency, clearly reporting how donations and investment income are used.
2. Clarify Communications: Church leaders should provide clear, honest communications about financial practices and the use of funds.
3. Review Ethical Practices: The church should review its financial practices to ensure alignment with its ethical and religious commitments, addressing any discrepancies between assurances and actual use of funds.

Edited July 26, 2024 by Analytics

[SeekingUnderstanding]

3 hours ago, Stormin' Mormon said:

If you see tithing as an exercise in accounting, then you've missed the entire point of it. 
 

Why is paying tithing this way an exercise in accounting?

3 hours ago, Stormin' Mormon said:

If tithing isn't changing your heart, changing who you are on a fundamental level, then you're doing it wrong, regardless of how closely you hew to the letter of the law. 

Why wouldn’t paying tithing this way change your heart in the same way? You are going without now. People talk about the immense blessings associated with tithing. Do these blessings negate the change of heart? What is the problem with adding one more blessing to the paying of tithing? 

3 hours ago, Stormin' Mormon said:

 

 

The goal of Gospel living is not about DOING, but about BECOMING.  We don't inherit a celestial glory by virtue of anything we DO in this life, but by BECOMING the kinds of people who ardently desire a celestial eternity.  

A sacrifice is a sacrifice BECAUSE it is difficult.  A sacrifice that is not difficult is not really a sacrifice at all.  Calculating a way to make one's sacrifice as painless as possible is only calculating a way to make one's sacrifice as insignificant as possible.  And insignificant sacrifices have a much greater difficulty in effectuating a mighty change of heart.

Isn’t the sacrifice (living on 10 percent less) just as real? I mean God promised to open the windows of heaven upon those that pay. As a member I was inundated with stories of people who choose to pay and then got a raise at work, found a cheaper house or some other financial blessing. Did these things lesson their sacrifice??

3 hours ago, Stormin' Mormon said:

 

  

It's entirely possible to have such a mighty change of heart while nickel-and-diming the Lord; it's just gonna be much harder.  

 

How is it nickel and diming the Lord. The Lord gets every penny due to him. 

[Stormin' Mormon]

37 minutes ago, SeekingUnderstanding said:

How is it nickel and diming the Lord. The Lord gets every penny due to him. 

You're calculating your sacrifice down to the exact penny and that's somehow NOT nickel-and-diming your devotional sacrifice?

37 minutes ago, SeekingUnderstanding said:

Isn’t the sacrifice (living on 10 percent less) just as real? 

When I pay tithing, I sacrifice both the present value of my donation, and it's time value. In your scheme, you would retain the time value of your donation for yourself. 

41 minutes ago, SeekingUnderstanding said:

Why wouldn’t paying tithing this way change your heart in the same way?

Sacrifice isn't simply going without. Otherwise, I could start  putting 20% of my income into my 457 account and expect to be blessed for it. Sacrifice is about removing ego, relinquishing control, going without for the sake of a cause greater than self.

[Calm]

22 minutes ago, Stormin' Mormon said:

Sacrifice is about removing ego, relinquishing control, going without for the sake of a cause greater than self.

To me, the bold is an extremely, maybe even the most important aspect because tithing is an exercise in trust as well as gratitude. Gratitude is not necessarily increased in paying tithing (unless you see other blessings being received afterwards that you believe are a result), but trust is inherent to the action imo as we have opportunities to second guess ourselves constantly (as in thinking ‘maybe I should have skipped tithing and paid off the car first’ or ‘if only I had that tithing I could pay for my medical bill right now’).  Paying tithing gives us a multitude of opportunities to choose trusting God first. 
 

I am not saying those who wait till the end of the year aren’t exercising trust as much as those who pay monthly (especially if they were like my dad who paid two years at once, the previous and the next to maximize his deduction), it all depends imo on what one feels inspired to do. If one does not feel the spirit leading one a certain way, then I think the Lord is okay with any choice, but I personally in that condition would choose to pay monthly to maximize the opportunity to experience the action of giving back to the Lord.  Others may see greater spiritual benefits doing it in different ways, of course. 

[SeekingUnderstanding]

31 minutes ago, Stormin' Mormon said:

When I pay tithing, I sacrifice both the present value of my donation, and it's time value. In your scheme, you would retain the time value of your donation for yourself. 

In your view, then, would donating the interest as tithing satisfy the religious requirement?

[Stormin' Mormon]

23 minutes ago, SeekingUnderstanding said:

In your view, then, would donating the interest as tithing satisfy the religious requirement?

You've missed my point entirely.

Once again: gospel living is about BECOMING, not about DOING. Tithing is not a transaction, but a transformation. There's no list of requirements to be satisfied, no balance sheet to be reconciled, no returns to be filed.

I didn't say your scheme was invalid, just that it'd be harder to experience a change of heart in doing so. I didnt even say that such would be impossible. But when we put our own will into a sacrifice meant for Deity, we don't leave as much room for His will to guide us in the manner and method of the sacrifice. 

I'm all in favor of honest truthseekers seeking the Lord's guidance and paying their tithing in the way they honestly believe that spirit tells them to, be it however unconventional. At the end of the day, what will be important is not whether we donated a meticulously calculated 10% of our income, but whether we have learned to love God more than Things, whether we have learned to stop coveting our own property, whether our hearts are truly broken and our spirits truly contrite.

 

Edited July 26, 2024 by Stormin' Mormon

[webbles]

2 hours ago, SeekingUnderstanding said:

Assuming you had an irrevocable trust that kept the funds with the church as the beneficiary, what about this doesn’t fit your mental model. I’m legitimately curious. 

For me, tithing should be paid at least annually for my salary (because of the Tithing Settlement each year).  I also don't see it as my money, but God's.  So using a process to gain more money from His money doesn't feel right to me.

[SeekingUnderstanding]

11 minutes ago, Stormin' Mormon said:

You've missed my point entirely.

You said:

1 hour ago, Stormin' Mormon said:

When I pay tithing, I sacrifice both the present value of my donation, and its time value. In your scheme, you would retain the time value of your donation for yourself. 

This made the sacrifice less real for some reason. I asked if changing that and paying it all as tithing would help address that concern. How does that miss the point?

[Analytics]

20 minutes ago, Stormin' Mormon said:

You've missed my point entirely.

Once again: gospel living is about BECOMING, not about DOING. Tithing is not a transaction, but a transformation. There's no list of requirements to be satisfied, no balance sheet to be reconciled, no returns to be filed.

I didn't say your scheme was invalid, just that it'd be harder to experience a change of heart in doing so. I didnt even say that such would be impossible. But when we put our own will into a sacrifice meant for Deity, we don't leave as much room for His will to guide us in the manner and method of the sacrifice. 

I'm all in favor of honest truthseekers seeking the Lord's guidance and paying their tithing in the way they honestly believe that spirit tells them to, be it however unconventional. At the end of the day, what will be important is not whether we donated a meticulously calculated 10% of our income, but whether we have learned to love God more than Things, whether we have learned to stop coveting our own property, whether our hearts are truly broken and our spirits truly contrite.

 

Let me respond with three things.

First, the edifying effect that donating 10% of your income the the Church on a timely basis is a religious claim that is beyond the scope of what I want to talk about.

Second, For me at least, the suggestion of paying tithing in one big check when you retire was said in jest to mock the strict, legalistic definitions of tithing that have been emphasized over and over. If you say tithing should be paid in a timely way so that the time-value of tithing goes to the Church rather than the tithe-payer, you are redefining tithing.

Third, regardless of the edifying effects of tithing, the fact remains that tithing also has pecuniary effects. Given the Church’s current needs and forecasted future needs, the tithing program results in the Church literally having way too much money, while for the majority of tithe-paying Latter-day Saints, it contributes to them not having enough money when they retire. SeekingUnderstanding’s suggestion would help rectify this unfortunate imbalance.

Edited July 26, 2024 by Analytics

[smac97]

An update from the Trib: New class-action case over tithing could lead to millions suing the LDS Church

Quote

A new court filing makes clear that The Church of Jesus Christ of Latter-day Saints is treating a class-action lawsuit over tithing as a multipronged attack on religious freedoms.

In arguments unveiled Friday, church lawyers are urging U.S. District Judge Robert Shelby in Salt Lake City to put any court-sanctioned evidentiary probes in the newly formed case on hold until he can rule on an upcoming motion to throw out the fraud allegations.

In moving to block the process, known as discovery, the Utah-based faith’s attorneys are promising to mount a formidable challenge in September outlining how core lines of argument in the high-profile case jeopardize the U.S. Constitution’s legal shields against intrusions into matters of religious belief.

Here is a link to the court filing mentioned above.  it is a "Motion to Stay," that is, a request for the Court to freeze the discovery phase of the lawsuit until motions to dismiss are heard and adjudicated.  Here are the main beats:

1. When a lawsuit is filed, typically the plaintiff files a "Complaint," the defendant files an "Answer" to the Complaint, then the parties move into the next phase of the lawsuit, called "discovery."  This is there the parties exchange information, documents, etc.  It is the most expensive and time-consuming part of the lawsuit, and also the most intrusive.

2. A defendant may, instead of filing an Answer, file a "Motion to Dismiss," in which the defendant argues that regardless of the factual allegations in the Complaint, the lawsuit necessary files and should be dismissed.  For example, if P sues A for a breach of contract claim, and when the breach occurred ten years prior to the suit being filed, and where the statute of limitations for a breach of contract claim is six years, the defendant would likely file a MTD and argue that the lawsuit cannot proceed.  

3. Here, the Church has previously filed MTDs in two of the previous lawsuits which have since been consolidated into the present one.  Those motions were all denied as "moot," apparently because the cases were consolidated.  The Church will now be filing one or more MDTs, as the Motion to Stay states: "Defendants respectfully ask the Court to stay discovery until their forthcoming motions to dismiss have been resolved by the Court."  I'm not sure why the Church would file multiple motions.  Likely a procedural quirk in class action lawsuits.

4. This is all entirely normal litigation behavior.

As for the Motion to Stay, it includes some interesting bits:

Quote

Plaintiffs (all but one of whom are apparently no longer even Church members) claim to adequately represent believing and active Church members. Plaintiffs plead in conclusory fashion that “their interests do not conflict with the interests of other members of the Class they seek to represent” and that the “interests of the Class will be fairly and adequately protected by Plaintiffs and their counsel.” Consol. Compl. (MDL Dkt. 63) ¶ 143. But the conflict is palpable. Indeed, Plaintiffs offer no reason why millions of faithful tithe-paying Church members would want any part in Plaintiffs’ attack on the Church.  And they offer no rationale for how persons who lack faith in the doctrine of tithing as taught by the Church can adequately represent millions of persons who have faith on a matter that itself is deeply rooted in faith.

This is a fair point, particularly since the contested issue is the use of tithes.

Quote

For nearly two centuries, the Church has taught that giving tithes is a commandment from God. There have literally been hundreds of sermons by the Church’s ecclesiastical leaders on the subject. Yet every Church member makes an individual, faith-based decision to give tithes or not.  Obeying the scriptural law of tithing requires faith that (1) God exists, (2) he has called prophets in modern times through which not only the commandment to tithe, but also the responsibility for the timing and disposition thereof, has been given, and (3) God will bless those who obey that commandment. This faith is based on deeply personal religious experiences developed over a lifetime. Thus, this is anything but a garden-variety consumer class action based on misrepresentations about a product or service. Indeed, it is the polar opposite of the type of case for which the class device is best suited and for which the requirements of adequate representation possibly could be met.

This pertains to the nature of the lawsuit.  "Class action" suits are intended to represent a "class" of people.  To that end, the "class" must be "certified" by the Court before the lawsuit can really proceed.  See here:

Quote

For the case to proceed as a class action and bind absent class members, the court must certify the class under Rule 23 on a motion from the party wishing to proceed on a class basis. For a class to be certified, the moving party must meet all of the criteria listed under Rule 23(a), and at least one of the criteria listed under Rule 23(b).^[66]

The 23(a) criteria are referred to as numerosity, commonality, typicality, and adequacy.^[73] Numerosity refers to the number of people in the class. To be certified, the class has to have enough members that simply adding each of them as a named party to the lawsuit would be impractical.^[66] There is no bright-line rule to determine numerosity, but classes with hundreds of members are generally deemed to be sufficiently numerous.^[73] To satisfy commonality, there must be a common question of law and fact such that "determination of its truth or falsity will resolve an issue that is central to the validity of each one of the claims in one stroke".^[74] The typicality requirement ensures that the claims or defenses of the named plaintiff are typical of those of everyone else in the class.^[66] Finally, adequacy requirement states that the named plaintiff must fairly and adequately represent the interests of the absent class members.^[66]

Rule 23(b)(3) allows class certification if "questions of law or fact common to class members predominate over any questions affecting only individual members, and that a class action is superior to other available methods for fairly and efficiently adjudicating the controversy."^[75]

The "Rule 23" here is Rule 23 of the Federal Rules of Civil Procedure.  This application of this rule gets pretty dense, so I will not delve into it.  I also have essentially no experience in class action litigation, so I can't really speak intelligently about the particulars of how this will play out.  I suspect, though, that the MDL plaintiffs will have difficulty in meeting the foregoing requirements, and that the foregoing excepts from the Motion to Stay are intended as preliminary attempts to address this.  More from the Motion to Stay:

Quote

How can Plaintiffs who do not share that faith adequately represent those who believe?  Even in a secular context, courts have held in cases involving alleged fraud that issues of individualized reliance are not suitable for class treatment. See, e.g., Castano v. Am. Tobacco, 84 F.3d 734, 745 (5th Cir. 1996) (“[A] fraud class action cannot be certified when individual reliance will be an issue.”).  

Wow.  This is a potentially fatal flaw in the MDL plaintiff's theory.  Here are the nine elements of common law fraud (from Utah case law, but this formulation is fairly consistent throughout courts in the United States) :

• (1) a representation;
• (2) concerning a presently existing material fact;
• (3) which was false;
• (4) which the representor either (a) knew to be false, or (b) made recklessly, knowing that he [or she] had insufficient knowledge on which to base such representation;
• (5) for the purpose of inducing the other party to act upon it;
• (6) that the other party, acting reasonably and in ignorance of its falsity;
• (7) did in fact rely upon it;
• (8) and was thereby induced to act;
• (9) to his [or her] injury and damage.

The Castano case seems to stand for the proposition that a key component of a fraud claim (#7 above) is that the recipient of the representation "did in fact rely upon it," and that a class action lawsuit cannot be "certified" (meaning it cannot proceed) "when individual reliance {on the representation} will be an issue."

Put another way, the MDL plaintiffs will be required, in the early states of the lawsuit (likely before discovery), to plausibly argue that the plaintiffs are representing a "class" of people who are situated like them (as regarding feeling deceived by the Church's representations regarding the use of tithing), but that they (the plaintiffs) will not be be legally required to show that the other members of the class individually relied on those representations.  I think that will be a very tough row to hoe, and it is a flaw in the plaintiffs' legal theory that is quite independent of the Church's First Amendment / Ecclesiastical Abstention defenses/theories.

Moreover, element #6 above may also become important.  It is not enough that the recipient of a representation demonstrate that he "relied" on it, he must also show that this reliance was "reasonable," and that he was "ignorant" of the "falsity" of the representation.  The Church has, for many decades now, been pretty open that it "set{s} aside" a "fixed percentage of the income {} to build reserves."  See also here:

Quote

Church members are taught to “gradually build a financial reserve by regularly saving [a portion of their income]” (Providing in the Lord’s Way: Summary of a Leader’s Guide to Welfare [booklet, 2009], 2). The Church applies this same principle in its own savings and investments. In addition to food and emergency supplies, the Church also sets aside funds each year for future needs. These funds are added to Church reserves, which include stocks and bonds, taxable businesses, agricultural interests and commercial and residential property. Investments can be accessed in times of hardship or to meet the emerging needs of a growing, global faith in its mission to preach the gospel to all nations and prepare for the Second Coming of Jesus Christ (see Gérald Caussé, “In the Lord’s Way: The Spiritual Foundations of Church Financial Self-Reliance,” Church Newsroom, Mar. 2, 2018).

Some investments serve a dual purpose. For example, Church President Gordon B. Hinckley stated that “we have felt that good farms, over a long period, represent a safe investment where the assets of the Church may be preserved and enhanced, while at the same time they are available as an agricultural resource to feed people should there come a time of need” (“The State of the Church,” Ensign, May 1991, 54). Another example is the Church’s participation in the development of downtown Salt Lake City. With its investment in City Creek (a mixed-use development that includes retail space, residential units, office space and parking), the Church enhanced the environs of Temple Square and underscored a commitment to Salt Lake City, Utah, where it is headquartered. The investment increased local economic activity during a financial downturn and attracted visitors and residents to Salt Lake City’s historic downtown.

The Church’s reserves are overseen by Church leaders and managed by professional advisers, consistent with wise and prudent stewardship and modern investment management principles. Ultimately, all funds earned by the Church’s investments go back to supporting its mission to invite souls to come unto Christ.

The Church having made such public statements, I think the MDL plaintiffs will be hard pressed to show that they nevertheless were blindsided by the notion that the Church does not spend 100% of tithes/offerings.

More from the Motion to Stay:

Quote

All the more so where reliance is fundamentally a matter of faith and would require a court to adjudicate issues of faith. For that reason, the First Amendment prohibits class treatment when the individualized experience at issue is religious. “Religious experiences which are as real as life to some may be incomprehensible to others.” U.S. v. Ballard, 322 U.S. 78, 86-87 (1944). And because Plaintiffs do not and cannot adequately represent the members of the proposed class, they should not be allowed to commence discovery that conflicts with the interests of the class. See, e.g., Phillips Petroleum v. Shutts, 472 U.S. 797, 812 (1985) (“[T]he Due Process clause of course requires that the named plaintiff at all times adequately represent the interests of the absent class members.”).

{A}s will be explained in great detail in the forthcoming motions to dismiss, Plaintiffs target the core First Amendment right of the Church to “decide for [itself], free from state interference, matters of church government as well as those of faith and doctrine.” Hosanna-Tabor Evang. v. EEOC, 565 U.S. 171, 186 (2012). Plaintiffs object to the Church’s reserve fund: (1) its size; (2) how it’s invested; (3) the duration of such investments; and (4) the extent of disclosure.  The claims, however, of disenchanted members about how the Church accomplishes its mission implicate precisely the kind of internal church conflict the First Amendment prohibits courts from adjudicating. See, e.g., The Bible Way Church v. Beards, 680 A.2d 419, 429 (D.C. App. 1996) (“[A] church’s financial regime, including any required reports to members, necessarily reflects an array of decisions about a member’s obligation to pledge funds, and about the leaders’ corresponding responsibility to account for those funds, that a civil court cannot arbitrate without entangling itself in doctrinal interpretations[.]”).

Here the Church's attorneys are applying the Ecclesiastical Abstention doctrine in the specific context of class action lawsuits.  More:

Quote

It is likewise well-established that discovery should be delayed where (as here) the Church Autonomy Doctrine is implicated. The Tenth Circuit has equated the Church Autonomy Doctrine with qualified immunity and directed that, like qualified immunity, the Church Autonomy Doctrine must “be resolved at the earliest possible stage of litigation” to “protect[] a church’s Free Exercise rights.” Bryce v. Episcopal Church, 289 F.3d 648, 654 (10th Cir. 2002). Accordingly, the Court should at a minimum stay discovery until it determines whether Plaintiffs’ claims are barred by the Church Autonomy Doctrine, which will be extensively addressed in the forthcoming motions to dismiss to be filed next month by the Church and Ensign Peak Advisors, Inc. (“Ensign Peak”).
...
Plaintiffs’ claims directly implicate the Church Autonomy Doctrine. See, e.g., Bryce, 289 F.3d at 657. “Courts have held that churches have autonomy in making decisions regarding their own internal affairs.  This church autonomy doctrine prohibits civil court review of internal church disputes involving matters of faith, doctrine, church governance, and polity.” Id. at 655.

When a defendant invokes “qualified immunity,” discovery “should not be allowed” until the issue is fully resolved. Harlow v. Fitzgerald, 457 U.S. 800, 818 (1982). The Tenth Circuit has, in turn, mandated the same approach where the Church Autonomy Doctrine is at issue:

Quote

If the church autonomy doctrine applies... then the plaintiffs have no claim for which relief may be granted. In this sense, the assertion that the First Amendment precludes the {claim} is similar to a government official’s defense of qualified immunity, which is frequently asserted in a motion to dismiss under Rule 12(b)(6).

Bryce, 289 F.3d at 654. Thus, to “protect[] a church’s Free Exercise rights,” the Church Autonomy Doctrine, which presents “a question of law,” should “be resolved at the earliest possible stage of litigation.” Id. at 654. By resolving the question “early in litigation, the courts avoid excessive entanglement in church matters.” Id. at 654 n.1. And like the Eleventh Amendment and the Speech or Debate Clause, the Church Autonomy Doctrine is rooted in express constitutional protections and operates as a complete bar against claims involving internal church decisions. See Bryce, 289 F.3d at 657.

Concise and clear stuff, this.

The Motion to Stay also addresses the "fiduciary duty" issue:

Quote

Bryce aside, the facial defects in the Consolidated Complaint would otherwise warrant a stay of discovery, as would the traditional factors the Tenth Circuit has directed courts to balance in determining whether a discovery stay is warranted. See generally In re Broiler Chicken, 2017 WL 3841912, *2-3 (E.D. Okla. 2017) (Shelby, J.); String Cheese Incident v. Stylus Shows, 2006 WL 894955, *2 (D. Colo. 2006). Among other things, Plaintiffs’ claims are premised on the existence of a fiduciary duty between the Church and its members, but this Court has determined “there is no legally cognizable general fiduciary duty between a church and its members.” Gaddy, 665 F.Supp.3d at 1291.

I would like to see this fleshed out more.

The Motion to Stay also attacks the fundamental allegation of fraud in the MDL suit:

Quote

Moreover, a church’s investment of donated funds for future religious use is scarcely fraud. See, e.g., Stone v. Salt Lake City, 356 P.2d 631, 633-34 (Utah 1960). None of the funds donated have been lost or misappropriated. Plaintiffs do not suggest otherwise. It is “common sense and common knowledge” that churches will manage their funds “for the ultimate accomplishment” of their religious objectives and mission, as those objectives and mission are determined by the Church itself and its leaders. See id.

The Motion to Stay also argues critiques the Complaint's apparently failure to satisfy the "particularity" requirements imposed on fraud claims:

Quote

Plaintiffs are not entitled to discovery without a plausible claim. As the Tenth Circuit has made clear, “threadbare recitals of the elements of a cause of action, supported by mere conclusory statements,... no longer suffice to unlock the doors of discovery.” Ghailani v. Sessions, 859 F.3d 1295, 1304 (10th Cir. 2017); see also Limestone Dev. v. Vill. of Lemont, 520 F.3d 797, 802-03 (7th Cir. 2008) (noting that “Bell Atlantic Corp. v. Twombly, 550 U.S. 544 (2007) teaches that a defendant should not be forced to undergo costly discovery unless the complaint” pleads a valid claim). That admonition is particularly apt in cases involving claims subject to the heightened pleading standard of Rule 9(b), which “has long played [a] screening function, standing as a gatekeeper to discovery, a tool to weed out meritless fraud claims sooner than later.” U.S. ex rel. Grubbs v. Kanneganti, 565 F.3d 180, 185 (5th Cir. 2009); see also Plastic Packaging v. Sun Chem., 136 F. Supp. 2d 1201, 1204 (D. Kan. 2001) (“[A]llowing non-particular fraud claims to proceed to discovery defeats Rule 9(b)’s purposes of bringing an early end to frivolous claims which bring reputational damage.”). Accordingly, the Court should stay discovery until it has determined whether Plaintiffs have plead valid claims.

My recollection is that some of these prior lawsuits (Huntsman, Gaddy, etc.) did not do much with this argument.  It is a potent one, though, so I am glad to see it here.

The Motion to Stay is pretty short, less than 10 pages.  It is an excellent piece of writing.  The Church is being well represented here, and I am glad of that.

Thanks,

-Smac

[Analytics]

2 hours ago, smac97 said:

The Motion to Stay is pretty short, less than 10 pages.  It is an excellent piece of writing.  The Church is being well represented here, and I am glad of that.

The lead attorney on the Motion to Stay is Mark S. Mester, a Chicago partner of the white-shoe law firm Latham and Watkins. According to his professional bio:

Mark has been lead counsel in over 1,000 consumer class actions over the last 35+ years. Mark is presently Lead Counsel in multidistrict litigation for the NCAA in In re NCAA Student-Athlete Concussion Injury Litigation, In re NCAA Student-Athlete Concussion Injury Litigation-Single Sport / Single School (Football) as well as for Beyond Meat in In re Beyond Meat, Inc. Protein Content Marketing and Sales Practices Litigation. Mark is also Lead Counsel for the Tampa Bay Buccaneers in a nationwide TCPA class action. He has also served as Lead Counsel in nationwide consumer class actions and multidistrict litigation for American Honda, Apple, Bass Pro, Behr, CCC Intelligent Solutions, Costco, Electrolux, Fairlife, Goldman Sachs, LG Energy, Navistar, Masco, Reckitt Benckiser, Safeway, Walmart, Weyerhaeuser, and Whole Foods.

I would guess he’s charging the Church about $1,300 an hour for his time.

Additionally, the Motion to Stay was signed by 6 other attorneys (another attorney from Latham & Watkins, three attorneys from Kirton McConkie, and two attorneys from Foley & Lardner). 

What’s clear to me is that the Church is taking this class action lawsuit very seriously, and in its legal defense, the Church is going to spend many times over what the named plaintiffs are asking for.

[smac97]

52 minutes ago, Analytics said:

Quote

The Motion to Stay is pretty short, less than 10 pages.  It is an excellent piece of writing.  The Church is being well represented here, and I am glad of that.

The lead attorney on the Motion to Stay is Mark S. Mester, a Chicago partner of the white-shoe law firm Latham and Watkins. According to his professional bio:

Mark has been lead counsel in over 1,000 consumer class actions over the last 35+ years. Mark is presently Lead Counsel in multidistrict litigation for the NCAA in In re NCAA Student-Athlete Concussion Injury Litigation, In re NCAA Student-Athlete Concussion Injury Litigation-Single Sport / Single School (Football) as well as for Beyond Meat in In re Beyond Meat, Inc. Protein Content Marketing and Sales Practices Litigation. Mark is also Lead Counsel for the Tampa Bay Buccaneers in a nationwide TCPA class action. He has also served as Lead Counsel in nationwide consumer class actions and multidistrict litigation for American Honda, Apple, Bass Pro, Behr, CCC Intelligent Solutions, Costco, Electrolux, Fairlife, Goldman Sachs, LG Energy, Navistar, Masco, Reckitt Benckiser, Safeway, Walmart, Weyerhaeuser, and Whole Foods.

I would guess he’s charging the Church about $1,300 an hour for his time.

Bummer that critics of the Church are compelling the Church to incur such expenses.  

52 minutes ago, Analytics said:

Additionally, the Motion to Stay was signed by 6 other attorneys (another attorney from Latham & Watkins, three attorneys from Kirton McConkie, and two attorneys from Foley & Lardner). 

No, it was only signed by Mr. Mester.  There is only one signature line.  

One of the K&M attorneys, Justin Starr, is a classmate of mine at BYU Law School.  I did not know him well, but I did know his brother (also a classmate).

52 minutes ago, Analytics said:

What’s clear to me is that the Church is taking this class action lawsuit very seriously, and in its legal defense, the Church is going to spend many times over what the named plaintiffs are asking for.

Here is the Amended Complaint in the MDL lawsuit.  From paragraph 16:

Quote

This Court has jurisdiction pursuant to 28 U.S.C. § 1332(d) because the Class consists of more than 100 members, the amount in controversy exceeds the sum or value of five million dollars exclusive of recoverable interest and costs, and minimal diversity exists.

So "many times over" $5 million dollars amounts to . . . how much?

Litigation is always expensive, but I think this case is fairly susceptible to dismissal under Rule 12(b)(6).  The Church's Motions to Dismiss will be filed on or before September 10, 2024.  If the suit is dismissed, then the Church will get nowhere near $5M, let alone "many times over" it.

Thanks,

-Smac

[Analytics]

56 minutes ago, smac97 said:

Bummer that critics of the Church are compelling the Church to incur such expenses.  

The plaintiffs are tithe-paying members, not critics.

The reason the Church is now incurring these legal expenses is because they chose not to be financially transparent with their tithe-paying members. That’s on them.

56 minutes ago, smac97 said:

No, it was only signed by Mr. Mester.  There is only one signature line.  

One of the K&M attorneys, Justin Starr, is a classmate of mine at BYU Law School.  I did not know him well, but I did know his brother (also a classmate).

Here is the Amended Complaint in the MDL lawsuit.  From paragraph 16:

So "many times over" $5 million dollars amounts to . . . how much?

Summing up the donations of the named plaintiffs in paragraphs 18-34 shows a total of $687,159.73.

56 minutes ago, smac97 said:

Litigation is always expensive, but I think this case is fairly susceptible to dismissal under Rule 12(b)(6).  The Church's Motions to Dismiss will be filed on or before September 10, 2024.  If the suit is dismissed, then the Church will get nowhere near $5M, let alone "many times over" it.

I would bet they will have blown through $600,000 before this dream team files their multiple motions to dismiss. And if I understand the process correctly, the plaintiffs will respond to each of their multiple motions, and then the Church will then file another batch of responses to the plaintiffs responses. They will have burned over a million at that point.

Maybe it will be dismissed at that point, but I wouldn’t dismiss the plaintiff’s arguments without first reading them and carefully considering them.

[smac97]

43 minutes ago, Analytics said:

The plaintiffs are tithe-paying members, not critics.

Apparently not.  My understanding is that only one of them is a member.  From the Motion to Stay: "Plaintiffs (all but one of whom are apparently no longer even Church members)..."

43 minutes ago, Analytics said:

The reason the Church is now incurring these legal expenses is because they chose not to be financially transparent with their tithe-paying members. That’s on them.

The reason the Church is now incurring these legal expenses is because dissidents and former members are suing it.  That's on them.

43 minutes ago, Analytics said:

Quote

 

Quote

What’s clear to me is that the Church is taking this class action lawsuit very seriously, and in its legal defense, the Church is going to spend many times over what the named plaintiffs are asking for.

Here is the Amended Complaint in the MDL lawsuit.  From paragraph 16:

 

Summing up the donations of the named plaintiffs in paragraphs 18-34 shows a total of $687,159.73.

The "named plaintiffs" are alleging an "amount in controversy" in excess of "five million dollars exclusive of recoverable interest and costs."

43 minutes ago, Analytics said:

Quote

The Church's Motions to Dismiss will be filed on or before September 10, 2024.  If the suit is dismissed, then the Church will get nowhere near $5M, let alone "many times over" it.

Maybe it will be dismissed at that point, but I wouldn’t dismiss the plaintiff’s arguments without first reading them and carefully considering them.

I am not dismissing the plaintiff's arguments, as evidenced by the condition phrasing above ("if the suit is dismissed...").

That said, we already know what the facts of the case are.  We already know the primary legal arguments.  We already know much of the applicable case law.  We already know what happened in the Gaddy case, and the Huntsman case (though the latter has a pending en banc review by the Ninth Circuit) The law is never a sure thing, but the generalized concept of precedent is supposed to introduce elements of predictability to likely outcome of legal disputes.  I think we are seeing that roll out in this case.

Thanks,

-Smac

Edited August 13, 2024 by smac97

[bluebell]

1 hour ago, Analytics said:

The plaintiffs are tithe-paying members, not critics.

The reason the Church is now incurring these legal expenses is because they chose not to be financially transparent with their tithe-paying members. That’s on them.

 

Are any of the people who are suing the church active members? 

Because if they aren't, that would seem to imply that the catalyst that caused the lawsuits is not the church "choosing not to be financially transparent" but rather the person deciding that the church isn't true.  In that case, the church's lack of transparency would be more of a stick to use to beat the church with than the cause of the beating (figuratively speaking of course).

If some of them are active members, then that accusation of it being on the church could hold some weight.

[Analytics]

31 minutes ago, bluebell said:

Are any of the people who are suing the church active members? 

Because if they aren't, that would seem to imply that the catalyst that caused the lawsuits is not the church "choosing not to be financially transparent" but rather the person deciding that the church isn't true.  In that case, the church's lack of transparency would be more of a stick to use to beat the church with than the cause of the beating (figuratively speaking of course).

If some of them are active members, then that accusation of it being on the church could hold some weight.

Quoting from the complaint:

20. Plaintiff Masen Christensen (“Mr. Christensen”) is a resident of Utah.

21. Between January 1, 1998 and today, Mr. Christensen directly donated at least $166,000 to LDS, which includes contributions of $120,000 in direct donations, and another $46,000 through donor-advised funds.

22. Mr. Christensen is an active member of the Church who made his most recent annual donation to LDS on November 11, 2022 and plans to continue making donations if the equitable and injunctive relief sought in this litigation is realized.

The “injunctive relief” they are asking for includes an order requiring the church to make a regular public accounting of "the use and disposition of collected funds and interest and income earned from those funds."

In any event, the validity of the Church’s truth claims and whether or not the Church has been appropriately honest regarding money are two different issues. If the Church were financially transparent, there would be a lot less resentment among former members on this issue.

Edited August 13, 2024 by Analytics

[bluebell]

12 minutes ago, Analytics said:

Quoting from the complaint:

20. Plaintiff Masen Christensen (“Mr. Christensen”) is a resident of Utah.

21. Between January 1, 1998 and today, Mr. Christensen directly donated at least $166,000 to LDS, which includes contributions of $120,000 in direct donations, and another $46,000 through donor-advised funds.

22. Mr. Christensen is an active member of the Church who made his most recent annual donation to LDS on November 11, 2022 and plans to continue making donations if the equitable and injunctive relief sought in this litigation is realized.

The “injunctive relief” they are asking for includes an order requiring the church to make a regular public accounting of "the use and disposition of collected funds and interest and income earned from those funds."

In any event, the validity of the Church’s truth claims and whether or not the Church has been appropriately honest regarding money are two different issues. If the Church were financially transparent, there would be a lot less resentment among former members on this issue.

Interesting.  I would define "active member" differently than Mr. Christensen's lawyer is (since he hasn't paid tithing since 2022), but that's a squibble that reasonable people can disagree on.  It would be interesting to know if he remains an active member if the lawsuit doesn't go in his direction (purely for curiosity's sake).

I agree with you though that if the church was transparent, resentment on this specific issue would go down.  I don't know that resentment against the church would follow suit or if it would be transferred to a different topic.  Probably no way to actually know that since it's so subjective.

[Calm]

8 minutes ago, bluebell said:

It would be interesting to know if he remains an active member if the lawsuit doesn't go in his direction (purely for curiosity's sake).

Or if it does…

[bluebell]

1 minute ago, Calm said:

Or if it does…

That too!