Update on Huntsman Lawsuit: Ninth Circuit Reverses Trial Court

smac97 · September 21, 2023

2 hours ago, ttribe said:

Still not seeing how Huntsman's fraud claim is provable in this case. It would require a smoking gun of epic proportions.

I am trying to envision what such a "smoking gun" would look like. A leaked memo about talking points Pres. Hinckley could use to hoodwink the members of the Church and the general public by . . . saying what he said? He differentiated tithes from other sources of income, and said the former would not be used for City Creek. And that's what happened.

Huntsman's theory posits that Pres. Hinckley's references to "tithes" were intended to exclude these other sources, when in fact the members of the Church generally conflate them. What sort of smoking gun could there be as evidence that John Q. Mormon conflates tithes with revenues generated from invested income?

I'm not asking you to answer, just thinking out loud.

Thanks,

-Smac

Edited September 21, 2023 by smac97

ttribe · September 21, 2023

23 minutes ago, smac97 said:

I am trying to envision what such a "smoking gun" would look like. A leaked memo about talking points Pres. Hinckley could use to hoodwink the members of the Church and the general public by . . . saying what he said? He differentiated tithes from other sources of income, and said the former would not be used for City Creek. And that's what happened.

Huntsman's theory posits that Pres. Hinckley's references to "tithes" were intended to exclude these other sources, when in fact the members of the Church generally conflate them. What sort of smoking gun could there be as evidence that John Q. Mormon conflates tithes with revenues generated from invested income?

I'm not asking you to answer, just thinking out loud.

Thanks,

-Smac

To be candid, I think it would need to be written communication amongst the leadership acknowledging that: 1) they knew the general membership wouldn't want tithes to be used for a commercial venture; 2) acknowledging that the funds were fungible and inseparable contrary to the way the general membership expected or believed; and 3), agreeing that deception was both necessary and preferable to any alternatives. Absent that, it's an extremely difficult claim to prove. Based on everything we know at this point, I believe the likelihood of such written communications existing approaches zero at a very steep angle.

Edited September 21, 2023 by ttribe

smac97 · September 21, 2023

2 hours ago, Stormin' Mormon said:

I'm impressed that Paul Clement is the lead attorney for the Church on this case. The dude argued some of SCOTUS' biggest free exercise cases of the last generation: Windsor, Burwell, Little Sisters, Kennedy, etc. Didn't always win (obviously), but I can't think of a bigger name in this particular arena. The Church is bringing the Big Guns for this one.

I think this excerpt from Clement's Wikipedia bio is interesting:

Quote

In June 2022, following his clients' Supreme Court victory in New York State Rifle & Pistol Association, Inc. v. Bruen, Clement separated from Kirkland & Ellis, after the firm announced it would "no longer handle Second Amendment litigation."^[4] Subsequently, Clement opened a boutique law firm, Clement & Murphy PLLC, with Erin Murphy, another former partner at Kirkland & Ellis.^[24]^[25]

Let's think about this:

A) K&E's client was pursuing litigation to challenge a longstanding (since 1911) law stating that to obtain a permit, the applicant must "demonstrate a special need for self-protection distinguishable from that of the general community or of persons engaged in the same profession."

B) More than eighty (80) "Friend of the Court" briefs were submitted in the suit.

C) The case made it to the Supreme Court, and with representation by Clement, K&E's client won. On a Bill of Rights case.

D) K&E responded to this victory by . . . refusing to take on any further Second Amendment cases.

I suspect K&E responded this way out of threats or pressure from outside groups and/or other clients. See, e.g., here:

Quote

Former Solicitor General Paul Clement and Erin Murphy, a regular Supreme Court litigator, said they were launching their own firm after Chicago-based Kirkland & Ellis decided to step back from gun-related litigation.

“We were given a stark choice: either withdraw from ongoing representations or withdraw from the firm,” Clement said in a statement. “Anyone who knows us and our views regarding professional responsibility and client loyalty knows there was only one course open to us: We could not abandon ongoing representations just because a client’s position is unpopular in some circles.”

Through a firm spokesperson, Kirkland confirmed its decision but did not explain its rationale for dropping gun cases. A key attorney at Kirkland, Jon Ballis, said he hoped the firm could continue to work with Clement and Murphy on matters not related to guns.
...

Clement’s departure from Kirkland & Ellis echoes a similar episode about a decade ago when he left Atlanta-based King & Spalding after that firm moved to distance itself from Clement’s work to preserve the Defense of Marriage Act, a federal law banning benefits for same-sex couples.

“I resign out of the firmly held belief that a representation should not be abandoned because the client’s legal position is extremely unpopular in certain quarters. Defending unpopular clients is what lawyers do,” Clement said then. The Supreme Court ultimately rejected his position on DOMA in a 5-4 decision issued in 2013.

See also here:

Quote

As dramatic exits go, Paul Clement’s departure from Kirkland & Ellis was a doozy. After scoring a landmark victory for gun rights in the Supreme Court last week, Clement and his partner Erin Murphy announced their departures from Kirkland—effective immediately.

A few hours later, they amplified that news, publishing an opinion piece, “The Law Firm That Got Tired of Winning,” in the Wall Street Journal that essentially scorched their former firm. Rather than receiving the customary “round of congratulatory messages from law-firm colleagues for a job well done, especially when we have helped our clients vindicate their fundamental constitutional rights,” they write, the firm presented them with an ultimatum: keep their controversial clients (namely, the National Rifle Association) or keep their jobs at Kirkland. They picked their clients.

And here:

Quote

Amid the hubbub, it was easy to miss another important Supreme Court drama. The winning side of that New York gun-control case was argued by noted appellate attorney Paul D. Clement. Yet instead of offering congratulations for a job well done, Clement’s firm, the venerable Kirkland & Ellis, abruptly announced that it would no longer accept Second Amendment cases. Clement and another Kirkland & Ellis partner, Erin Murphy, have left to start their own firm.

This contretemps might not matter much in itself; Murphy and Clement will undoubtedly be fine. Nonetheless, it neatly encapsulates the polarizing forces ripping the country apart and endangering the legitimacy of the Supreme Court.

Lawyers used to have a standard response to people who complained about their choice of clients: Everyone, no matter how noxious, deserves representation. A Washington law firm might find itself representing Richard M. Nixon and Ted Kennedy at the same time; the American Civil Liberties Union could end up defending the right of Nazis to march through a Jewish neighborhood in Skokie, Ill.

So it’s troubling to see a major firm not just ruling out a whole category of cases but also forcing its attorneys to choose between representing their current clients or keeping their jobs.

This is not the first time this has happened to Clement, who in 2011 was forced out of King & Spalding over his advocacy of the Defense of Marriage Act. But this trend marks a striking departure from the profession’s old norms. And it’s hard not to see this as a symptom of the cancel culture that has overtaken a number of American institutions, including the elite law schools where Kirkland & Ellis recruits.

The firm itself might have no objections to conservative causes — this is, after all, Justice Brett M. Kavanaugh’s former employer. But like many American institutions, it is under pressure from a younger generation of workers who are much further to the left, and much less tolerant of dissent, than their predecessors. It is also under pressure from corporate clients that are — partly in deference to their own youngsters — increasingly comfortable using their power to advance the left’s side of controversial social issues.

This is obviously bad for conservative lawyers, and for a society that aspires to liberal values. But it’s not great for the left, as it essentially doubles down on a strategy that has already failed: using the left’s control over key institutions to essentially rule some ideas, or policies, out of bounds.
...

After the flurry of rulings, academic Twitter and newspaper op-ed pages filled with outraged declarations that the Supreme Court had lost its legitimacy by becoming a partisan, ideological actor. Yet this is precisely how the right feels about media and academia, and increasingly about corporate America. It’s hard to argue the conservatives are wrong while you’re enthusiastically purging them from your ranks.

The more the left tightens its control where it has influence, the more it cedes the institutions it doesn’t control to the other side. Given that those institutions include the Supreme Court, now would be a good time to reflect on the limits of this kind of maneuver.

From the Trib article (quoting Huntsman's attorneys) :

Quote

“We feel very confident in our case, particularly around the First Amendment issue,” Huntsman said. “It’s the only point on which all four judges have so far agreed: that this is not a First Amendment issue.”

IIRC, the Church did present First Amendment arguments to the trial court. The trial court thereafter granted summary judgment in favor of the Church, but not on First Amendment grounds. The Church would, as the prevailing party, take that as a win, even if not on its preferred legal argument (First Amendment). Now that the Church is seeking an en banc review by the entire 9th Circuit, they are indeed bringing in the "Big Guns" on the First Amendment issue.

Thanks,

-Smac

smac97 · September 21, 2023

5 minutes ago, ttribe said:

To be candid, I think it would need to be written communication amongst the leadership acknowledging that: 1) they knew the general membership wouldn't want tithes to be used for a commercial venture;

I think the Brethren wouldn't have wanted this. Not at this stage of the Church's existence. It had the means to use non-tithing funds, and did so.

In the past, I suspect the Church was far less parsimonious, likely because it had to be due to insufficient alternative-to-tithes sources of income.

5 minutes ago, ttribe said:

2) acknowledging that the funds were fungible and inseparable in the way the general membership expected;

Ben McGuire has a pretty good summary of "fungible" in this post.

I think most (virtually all) members of the Church are not really fixated on fungibility.

5 minutes ago, ttribe said:

and 3), agreeing that deception was both necessary and preferable to any alternatives.

What "deception," though? This theory only works if the Church cannot differentiate between sources of income.

5 minutes ago, ttribe said:

Absent that, it's an extremely difficult claim to prove. Based on everything we know at this point, I believe the likelihood of such written communications existing approaches zero at a very steep angle.

Yes. In the end, Huntsman is going to lose. I think that's pretty much a given.

But then, I don't think Huntsman ever expected to "win." He just wanted to tarnish the reputation of the Church. In a sense, he's done that. He's likely expended hundreds of thousands of dollars doing it, but such options are available to the very wealthy.

Thanks,

-Smac

ttribe · September 21, 2023

16 minutes ago, smac97 said:

I think the Brethren wouldn't have wanted this. Not at this stage of the Church's existence. It had the means to use non-tithing funds, and did so.

In the past, I suspect the Church was far less parsimonious, likely because it had to be due to insufficient alternative-to-tithes sources of income.

Ben McGuire has a pretty good summary of "fungible" in this post.

I think most (virtually all) members of the Church are not really fixated on fungibility.

What "deception," though? This theory only works if the Church cannot differentiate between sources of income.

Yes. In the end, Huntsman is going to lose. I think that's pretty much a given.

But then, I don't think Huntsman ever expected to "win." He just wanted to tarnish the reputation of the Church. In a sense, he's done that. He's likely expended hundreds of thousands of dollars doing it, but such options are available to the very wealthy.

Thanks,

-Smac

1 - Mine was a hypothetical specifically designed to show how it is near impossible for Huntsman to prove his claim.

2 - I don't need someone to define "fungible" for me; you do remember what I do, right?

3 - The "deception" reference in my hypothetical presupposes the existence of a deception purely for the thought exercise. I've seen ZERO evidence Church leadership made any intentional attempt at deceiving anyone in this case.

4 - I don't know what Huntsman's intent was, but I've said from the beginning that I didn't think this case had any real legs. I still believe that.

JAHS · September 21, 2023

The basic problem that such people like Huntsman have is that as a member they consider the tithing donations they give to the church was once their own money.
Faithful members would always consider that money as already belonging to God who gave it to them in the first place and all they are doing is giving some of it back.
Because it belonged to God in the first place there should be no concern or worry about what the church does with it.
There has to be some level of trust in what the church leaders do with it. If not, that church member already has other issues with the church that are bothering them and this is just adding on to it.
It would be different if the donation were given to any other secular charity, then the donor would be right to question and investigate what happens to the money.

smac97 · September 21, 2023

4 minutes ago, ttribe said:

1 - Mine was a hypothetical specifically designed to show how it is near impossible for Huntsman to prove his claim.

Understood. And my comments were more in the "thinking out loud" genre.

4 minutes ago, ttribe said:

2 - I don't need someone to define "fungible" for me; you do remember what I do, right?

Actually, I don't remember offhand. I have a hard time keeping biographies attached to online handles.

In any event, Teancum and others have been throwing that word around, and Ben provided a pretty decent explanation of "{differing} types of fungibility." Do you disagree with him?

4 minutes ago, ttribe said:

3 - The "deception" reference in my hypothetical presupposes the existence of a deception purely for the thought exercise. I've seen ZERO evidence Church leadership made any intentional attempt at deceiving anyone in this case.

Understood. But the "thought exercise" is predicated on the facts underlying Huntsman's lawsuit. I have a hard time formulating any form of evidence that would facilitate a (hypothetical) piece of evidence fitting your description.

Let me walk you through my thinking:

1. Let us refer to the Church's public statements about the funding of City Creek as, cumulative, "X."

2. X includes explicit differentiations between tithes and other sources of income.

3. For X to be factually false, there must by Y, which is the absence of any way to differentiate between tithes and other sources of income.

4. Huntsman's fraud claim posits that the leaders of the Church was attempting to misrepresent the funding of City Creek to the members.

5. Huntsman's fraud claim further posits that the misrepresentation arose when James Huntsman, having heard X (which differentiates sources of church income), nevertheless reasonably believed Y (which does not differentiate).

6. Huntsman's fraud claim, then, requires that the Church intended for Huntsman to believe Y when it stated X. But in stating X, which included explicit differentiations between tithes and other sources of income, the Brethren demonstrated an intention to induce acceptance of X. X, then, must be Not-Y, and Y is Not-X. The statements by the Brethren were intended to establish X, and therefore not Y.

7. Huntsman's fraud claim is predicated on a false statement of fact. In this context, falsity is, I think, going to be an objective, empirically-testable kind of thing. Here, the statement is about the use of tithing funds. The meaning of "tithing" is, I think, a fairly objective, empirically-testable kind of thing.

8. Notably, the only issue is not how the general public construed X, or even how the members of the Church construed X, but rather only how James Huntsman construed X, and whether his interpretation was reasonable. Sam Brunson (who is not exactly a fan of the Church's handling of its finances) nevertheless pretty much lowers the boom on this point:

Quote

Was the Court of Appeals right? Frankly, I’m not convinced. It basically turns on whether a reasonable person would believe that “tithing” included not just the church’s tithing revenue, but income earned on that tithing revenue.[fn1] And honestly, that’s a pretty absurd assertion; every financial endeavor that includes both principal and income on the principal distinguishes the two. And it’s even tougher to believe given that Huntsman (remember, this is James, not John Sr. or Jr.) is a sophisticated businessperson. As such, it’s relatively unbelievable that he wouldn’t have understood that differentiation. (The dissent makes this and other points and is, frankly, more convincing imho.)

9. Simply put, the factual "boots on the ground" reality reflects X, not Y. The Church can differentiate between sources of income. That James Huntsman might believe otherwise is A) incredible (that is not credible), and B) objectively unreasonable.

10. Based on the foregoing, I cannot formulate any "Smoking Gun" evidence, even purely as a hypothetical.

4 minutes ago, ttribe said:

4 - I don't know what Huntsman's intent was, but I've said from the beginning that I didn't think this case had any real legs. I still believe that.

Same here.

AFAIK, there is not a single instance of the Church losing an "I want my tithing back" case. Not a single one. This is nearly universally so (there is a notable exception regarding the Harmston folks down in Manti). Huntsman's attorneys must have told him this. And he proceeded anyway. And in proceeding, he presented a palpably absurd set of factual and legal claims. He knew that before the suit was filed, too. So I think it's always been about a pound of flesh, nothing more. And in that sense,

Thanks,

-Smac

ksfisher · September 21, 2023

28 minutes ago, JAHS said:

The basic problem that such people like Huntsman have is that as a member they consider the tithing donations they give to the church was once their own money.
Faithful members would always consider that money as already belonging to God who gave it to them in the first place and all they are doing is giving some of it back.
Because it belonged to God in the first place there should be no concern or worry about what the church does with it.
There has to be some level of trust in what the church leaders do with it. If not, that church member already has other issues with the church that are bothering them and this is just adding on to it.
It would be different if the donation were given to any other secular charity, then the donor would be right to question and investigate what happens to the money.

It looks like what you're describing is the difference between ownership and stewardship. Members of the church consider themselves stewards of God's gifts.

ttribe · September 21, 2023

1 hour ago, smac97 said:

Understood. And my comments were more in the "thinking out loud" genre.

Same.

1 hour ago, smac97 said:

Actually, I don't remember offhand. I have a hard time keeping biographies attached to online handles.

I'm a forensic accountant and expert witness. https://www.linkedin.com/in/timdtribe/

1 hour ago, smac97 said:

In any event, Teancum and others have been throwing that word around, and Ben provided a pretty decent explanation of "{differing} types of fungibility." Do you disagree with him?

I don't fundamentally disagree with Ben. If fund accounting is being applied, and it is done properly, then it should be possible to prove what portion of the Church's funds are donations versus interest on those donations.

The potential problem is once funds get to EPA, since such an entity is unlikely to use fund accounting. That being said, I have no reason to believe the Church is doing it's accounting improperly.

1 hour ago, smac97 said:

Understood. But the "thought exercise" is predicated on the facts underlying Huntsman's lawsuit. I have a hard time formulating any form of evidence that would facilitate a (hypothetical) piece of evidence fitting your description.

Let me walk you through my thinking:

1. Let us refer to the Church's public statements about the funding of City Creek as, cumulative, "X."

2. X includes explicit differentiations between tithes and other sources of income.

3. For X to be factually false, there must by Y, which is the absence of any way to differentiate between tithes and other sources of income.

4. Huntsman's fraud claim posits that the leaders of the Church was attempting to misrepresent the funding of City Creek to the members.

5. Huntsman's fraud claim further posits that the misrepresentation arose when James Huntsman, having heard X (which differentiates sources of church income), nevertheless reasonably believed Y (which does not differentiate).

6. Huntsman's fraud claim, then, requires that the Church intended for Huntsman to believe Y when it stated X. But in stating X, which included explicit differentiations between tithes and other sources of income, the Brethren demonstrated an intention to induce acceptance of X.  X, then, must be Not-Y, and Y is Not-X. The statements by the Brethren were intended to establish X, and therefore not Y.

7. Huntsman's fraud claim is predicated on a false statement of fact. In this context, falsity is, I think, going to be an objective, empirically-testable kind of thing. Here, the statement is about the use of tithing funds. The meaning of "tithing" is, I think, a fairly objective, empirically-testable kind of thing.

8. Notably, the only issue is not how the general public construed X, or even how the members of the Church construed X, but rather only how James Huntsman construed X, and whether his interpretation was reasonable. Sam Brunson (who is not exactly a fan of the Church's handling of its finances) nevertheless pretty much lowers the boom on this point:

9. Simply put, the factual "boots on the ground" reality reflects X, not Y. The Church can differentiate between sources of income. That James Huntsman might believe otherwise is A) incredible (that is not credible), and B) objectively unreasonable.

10. Based on the foregoing, I cannot formulate any "Smoking Gun" evidence, even purely as a hypothetical.

I get it. My hypothetical was designed to show how far afield from the known facts we'd have to get in order to prove the fraud claim.

1 hour ago, smac97 said:

AFAIK, there is not a single instance of the Church losing an "I want my tithing back" case. Not a single one. This is nearly universally so (there is a notable exception regarding the Harmston folks down in Manti). Huntsman's attorneys must have told him this. And he proceeded anyway. And in proceeding, he presented a palpably absurd set of factual and legal claims. He knew that before the suit was filed, too. So I think it's always been about a pound of flesh, nothing more. And in that sense,

Perhaps. His intent isn't really my concern. I'm just looking at it from the standpoint of someone who has testified as an expert in fraud claims (both criminal and civil), I just don't see how Huntsman wins without some extraordinary change in the facts.

smac97 · September 21, 2023

The Tribune has just posted a link to the Church's "Petition for Rehearing or Rehearing En Bank":

https://www.scribd.com/document/672789922/The-Church-of-Jesus-Christ-of-Latter-day-Saints-Petition-for-Rehearing-in-James-Huntsman-s-fraud-case#download&from_embed

The opening salvo is pretty good:

Quote

This is no ordinary fraud case. In the first place, it lacks the first essential ingredient of a fraud claim, i.e. , a misrepresentation. Here, the President of The Church of Jesus Christ of Latter-day Saints 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.

The second paragraph then pivots to the First Amendment:

Quote

But this case is far more than a fraud claim in search of a misrepresentation. By allowing this novel tithing-fraud claim to proceed, the panel ignored clear Supreme Court First Amendment teaching and created a profound threat to religious liberty. Tithing differs from any other dynamic in which a person parts with money, as the terms of the exchange and the donor’s motivation transcend the secular world. Virtually any person who has fallen away from their faith may view their donations to the church during their faithful years as a waste, but that cannot mean each of them has a fraud claim that allows them to try to convince a secular jury that they were swindled. The threat to churches and to the civil courts from such suits is obvious.

And the third:

Quote

The panel mistakenly believed that those dangers could be avoided and this case could proceed on secular principles. But its opinion runs afoul of a host of recent Supreme Court cases like Hosanna-Tabor Evangelical Lutheran Church &School v. EEOC , 565 U.S. 171 (2012), and Our Lady of Guadalupe School v. Morrissey-Berru, 140 S.Ct. 2049 (2020). The problem in those cases was not that the claims could not be conceptualized as secular employment disputes. Rather, the problem was that allowing those suits to proceed before secular courts and secular juries posed a grave threat to church autonomy. The threat here is far more palpable. 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. This Court has been reversed before for failing to adhere to the Supreme Court’s vision of religious liberty. See, e.g., Kennedy v. Bremerton Sch. Dist., 142 S.Ct. 2407 (2022); Our Lady, 140 S.Ct. 2049.The en banc court should intervene here to avoid another reversal.

"The problem in those cases was not that the claims could not be conceptualized as secular employment disputes. Rather, the problem was that allowing those suits to proceed before secular courts and secular juries posed a grave threat to church autonomy."

First, dang, I wish I could write like this. The clarity. The concision. The impact. It's just . . . really good legal writing. I am officially a fanboy of Paul Clement.

Second, earlier today I speculated about the contents of the Petition:

Quote

I wonder if the petition includes argument that Huntsman is using a fraud claim as a pretext to circumvent the Ecclesiastical Abstention doctrine. That is, his dispute with the Church is really an ideological/religious dispute (Huntsman is angry at the Church), but he and his lawyers know that there is no legal remedy except to couch his claim as one for "fraud," which in turn requires him to fabricate a idiosyncratic and ad hoc definition of "tithing" so that it includes (A) "tithes" (a voluntary donation to the Church) and also (B) income derived from investing tithes.

I was a bit more focused on the nitty-gritty (the meaning of "tithing"), but the larger principle - that the suit is less about fraud and more about Ecclesiastical Abstention / Church Autonomy doctrine - does appear to be in the Petition.

Anyway, the Petition goes on to provide the Church's definition of "tithing":

Quote

Since 1838, the Church has taught that a core “commandment,” Op.5,is that members must “tithe,” which the Church defines as giving “one-tenth of their increase or income.” The Church of Jesus Christ of Latter-day Saints, Tithing ,https://rb.gy/2b18i(last visited Sept. 19, 2023). That religious obligation does not derive from the Church’s current financial needs and thus does not ebb and flow as the Church takes on new projects or as Church membership grows in wealth or size. Instead, the 10% “tithing” obligation is derived from sacred text. Doctrine &Covenants 119:4. Accordingly, if the Church collects more in tithing than it expends in any given year, it does not issue rebates or relax the next year’s tithing obligation.

This is a pretty solid point. The Church has never abrogated tithing as a principle, nor has it issued rebates.

The next part is good in that it addresses the tithing v. income-derived-from-tithing differentiation that is so key to Huntsman's case:

Quote

Nor does the Church increase its annual expenditures to match and exhaust that year’s tithing contributions. Instead, to ensure that the Church will have sufficient funds to operate and finance religious work, the Church has long set aside a portion of each year’s tithes for a reserve fund.See3-ER-310; 3-ER-354. The Church further distinguishes between the principal in that fund, which includes surpluses from tithing in earlier years, and earnings created by investing that principal. See Church.Resp.Br.9.

"The Church further distinguishes between the principal in that fund, which includes surpluses from tithing in earlier years, and earnings created by investing that principal."

Yep.

Quote

As Gordon B. Hinckley, then a senior Church leader, explained at the April 1991 General Conference (a semi-annual worship service), “[t]he financial program of the Church” “is found in … the Doctrine and Covenants,” and “Section 119” of that scripture states that all members of the Church “shall pay” tithing. 2-ER-236-37. He added that one “fixed principle[]” of the Church’s “financial operations” is that “a fixed percentage of income”— i.e., of annual tithing funds—“will be set aside to build reserves against what might be called a possible ‘rainy day.’” 3-ER-310-11; 2-ER-237. After his elevation to Church President, he reaffirmed during the Church’s October 1995 General Conference that “I am profoundly grateful for the law of tithing” and “each year we put into the reserves of the Church a portion of the annual budget.” 2-ER-245-46; 3-ER-311-12. Although a Church department initially managed the reserve funds, the Church in 1997 established a nonprofit corporation—Ensign Peak Advisors—to “serve as its primary investment vehicle for tithing funds received from church members.” Op.6.

Between 2003 and 2012, Church leaders or publications made five statements explaining that the Church would use earnings on invested tithing funds—not tithing funds themselves—to invest in and revitalize the area around the ZCMI site through a project now known as “City Creek.” First, at the April 2003 General Conference, speaking as a religious leader and not a financial analyst, President Hinckley made the distinction between funds from tithing and the proceeds of prior investments clear:

Quote

I wish to give the entire Church assurance that tithing funds have not and will not be used to acquire this property. Nor will they be used in developing it for commercial purposes. Funds for this have come and will come from those commercial entities owned by the Church. These resources, together with the earnings of invested reserve funds, will accommodate this program.

The Petition goes on to quote the other statements, all of which A) acknowledge that money is going to City Creek, and B) none of that money is from tithed donations.

The next paragraph sums things up nicely:

Quote

The Church was true to its word. The Church spent about $1.4 billion on the City Creek project, Op.6—with all money coming from earnings on invested tithing funds. That fact is undisputed. More precisely, in January 2004, Ensign Peak allocated $1.2 billion for the project.SeeOp.6; 3-ER-538. And that initial allocation itself accrued significant earnings, allowing the Church to finance the City Creek project without touching current or past tithing funds.See1-ER-8-9; 3-ER-327-28;3-ER-539-40; 4-ER-658. The district court found exactly that, 1-ER-8-9, and the panel majority never disagreed. Instead, the only dispute is what Church officials meant and what a then-faithful Church member understood by “tithing funds.”

"{T}he only dispute is what Church officials meant and what a then-faithful Church member understood by 'tithing funds.'"

Yep.

The next part includes something I had overlooked:

Quote

Accordingly, the district court concluded that it “need not” reach or apply the church-autonomy doctrine. 1-ER-6. But the court recognized that Huntsman’s claim implicated it. As it explained, Huntsman’s claim reflected his understanding that tithing funds and earnings on invested tithing funds are “two sides of the same financial coin,” such that proceeds from invested tithing reserves constitute “tithing funds.” 1-ER-11 n.4. But the court observed that “determining whether the term ‘tithing funds’ encompasses earnings on invested tithing funds would require an analysis of Church doctrines and teachings,” and “[t]he First Amendment bars such an inquiry.” 1-ER-11 n.4.

Ah, that makes a bit more sense. It's not that the trial court deemed the doctrine inapplicable, it just did not "reach" the need to examine the facts in the light of that doctrine. That happens all the time.

This changes my assessment a bit. If the trial court did not "reach" the Church Autonomy / Ecclesiastical Abstention doctrine (at least, the trial court's decision was not based on it), then the three-judge circuit panel would not have addressed it either, and least not substantively. Paul Clement may therefore be on stronger legal ground than I first thought. I had thought that the trial court had evaluated the doctrine and determined that it did not apply, and that Clement would therefore need to overcome that evaluation. Instead, the trial judge never actually reached or applied that doctrine. And to the extend the trial court discussed the doctrine, it held that “[t]he First Amendment bars such an inquiry.”

Cool stuff!

The next part nicely summarizes the three-judge circuit's treatment:

Quote

On appeal, a divided panel reversed as to the City-Creek claim, but unanimously affirmed as to the Beneficial-Life claim. As to City Creek, the majority first determined that resolving Huntsman’s claim would not implicate the church-autonomy doctrine. In its view, a jury can determine whether “the Church’s statements about how it would use tithing funds were true, and whether Huntsman reasonably relied on those statements when he made tithing contributions,” “based on secular evidence and analysis.” Op.11-12.

Applying its purportedly “secular” analysis, the majority offered four reasons why “a reasonable juror” could find that the Church “misrepresented the source of the funds used to finance the City Creek Mall project.” Op.19. First, the panel emphasized that Church officials or publications made “four unqualified statements ”that “tithing funds were not used.” Op.27. Second, although the panel recognized that President Hinckley’s 2003 message distinguished between “earnings of invested reserve funds” and “tithing funds,” the panel majority deemed the former phrase too “opaque”— i.e., not “plain English”—and observed that President Hinckley “did not define” either “tithing funds” or “reserve funds.” Op.20, 25-26. Third, the panel stated that a juror could conclude from the former Ensign Peak portfolio manager’s declaration that tithing funds encompass earnings on invested tithing. Op.27. Finally, invoking the same declaration, the panel noted that Ensign Peak employees allegedly sought to “conceal” the firm’s “role” in the City Creek project. Op.27.

The majority then briefly addressed reliance and found that element too should go to a jury. According to the majority, it sufficed that Huntsman submitted a declaration stating that “he believed, based on the five statements, that no tithing principal or earnings on principal were or would be used to finance the City Creek Mall project.” Op.28.

"Huntsman submitted a declaration stating that 'he believed, based on the five statements, that no tithing principal or earnings on principal were or would be used to finance the City Creek Mall project.'"

I think this is utter malarky. I don't believe for a second that Huntsman "believed ... that no tithing principal or earnings on principal were or would be used to finance the City Creek Mall project." I sure would like to have watched Huntsman in a deposition answer a question along the lines of "If you really believed that, where did you think the Church was going to get the enormous sums of money it put into City Creek? If not from tithes or earnings on them, then what other source of tremendous amounts of money does the Church have?"

Reading Huntsman's statement reminded me of this scene from A Man for All Seasons:

A transcript:

Quote

Court Clerk: Richard Rich! {Rich comes forward.} "I do swear the evidence I shall give before the court shall be the truth the, whole truth, and nothing but the truth. So help me God, sir, Richard."

Rich: So help me God.

Cromwell: Now Rich, on the twelfth of May you were at the Tower?

Rich: I was.

Cromwell: For what purpose?

Rich: I was sent to carry away the prisoner's books.

Cromwell: Did you talk with the prisoner?

Rich: Yes.

Cromwell: Did you talk of the King's supremacy of the Church?

Rich: Yes.

Cromwell: What did you say?

Rich: I said to him, "Supposing there were an act of parliament to say that I, Richard Rich, were to be king. Would not you, Master More, take me for king?" "That I would," he said. "For then you would be king."

Cromwell: Yes?

Rich: Then he said, "But I will put you a higher case. How, if there were an act of parliament, to say that God should not be God?"

More: This is true and then you said--

Court: Silence! Continue.

Rich: But then I said, "l will put you a middle case. Parliament has made our King Head of the Church. Why will you not accept him?"

Cromwell: Well?

Rich: And then he said, "Parliament had not the power to do it."

Court: Repeat the prisoner's words.

Rich: He said "Parliament had not the competence," or words to that effect.

From the Gallery: He denied the title!

Rich: He did.

More {Bowing his head}: In good faith, Rich, I am sorrier for your perjury than my peril.

Court: Do you deny this?

More: Yes! You know if I were a man who heeded not the taking of an oath, I need not be here. Now, I will take an oath. If what Master Rich has said is true I pray I may never see God in the face. Which I would not say, were it otherwise, for anything on earth!

Cromwell: That is not evidence!

More: Is it probable? Is it probable that after so long a silence on this the very point so urgently sought of me I should open my mind to such a man as that?

Court: Sir Richard, do you wish to modify your testimony?

Rich: No, my lord.

Court: Is there anything you wish to take away from it?

Rich: No, my lord.

Court: Have you anything to add?

Rich: No, my lord.

Court: Have you, Sir Thomas?

More: To what purpose? I am a dead man. You have your will of me.

Court: Then the witness may withdraw.

More: There is one question I would like to ask the witness. That's a chain of office you're wearing. May I see it? {Examines the chain.} The Red Dragon. What's this?

Cromwell: Sir Richard is appointed Attorney General for Wales.

More: For Wales. Why Richard, it profits a man nothing to give his soul for the whole world. But for Wales.

In the same vein, is it probable - is it probable - that a man of Huntsman's long experience in the Church, his upbringing and education and professional and work experience, would in his adulthood fail to comprehend a distinction between tithing and income generated through investment of it?

Rich got his sweet gig in Wales. And Huntsman is getting his pound of flesh from the Church's reputation, and his Fifteen Minutes. "It profits a man nothing to give his soul for the whole world..."

Thanks,

-Smac

Edited September 21, 2023 by smac97

smac97 · September 21, 2023

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Edited September 21, 2023 by smac97

Calm · September 22, 2023

3 hours ago, JAHS said:

The basic problem that such people like Huntsman have is that as a member they consider the tithing donations they give to the church was once their own money.
Faithful members would always consider that money as already belonging to God who gave it to them in the first place and all they are doing is giving some of it back.
Because it belonged to God in the first place there should be no concern or worry about what the church does with it.
There has to be some level of trust in what the church leaders do with it. If not, that church member already has other issues with the church that are bothering them and this is just adding on to it.
It would be different if the donation were given to any other secular charity, then the donor would be right to question and investigate what happens to the money.

Not all faithful members view tithing that way. My dad was faithful from the moment he was born till the minute he died and I highly doubt he would have phrased it that way unless prompted and then he would likely just being agreeable. He earned that money with his time and his sweat. God gave him other things, but the paycheck was his. And he had a hard time letting go of it, as generous as he was.

Edited September 22, 2023 by Calm

JAHS · September 22, 2023

11 minutes ago, Calm said:

Not all faithful members view tithing that way. My dad was faithful from the moment he was born till the minute he died and I highly doubt he would have phrased it that way unless prompted and then he would likely be agreeable. He earned that money with his time and his sweat. God gave him other things, but the paycheck was his. And he had a hard time letting go of it, as generous as he was.

I understand that, but the way I see it, God gave me my life, my time, and the ability to work and sweat so that I could earn the money. Therefore it belongs to him. And it's only 10%. Just my opinion.
The fact that your father had a hard time letting it go, just shows how faithful he was to be willing to make the sacrifice.

Calm · September 22, 2023

7 minutes ago, JAHS said:

I understand that, but the way I see it, God gave me my life, my time, and the ability to work and sweat so that I could earn the money. Therefore it belongs to him. And it's only 10%. Just my opinion.
The fact that your father had a hard time letting it go, just shows how faithful he was to be willing to make the sacrifice.

I have no problem with that point of view. It is my own. My only issue was it appeared you believed all faithful members saw it that way.

provoman · September 22, 2023

None of this makes sense to me.

The 9th Circuit relied in part on purported statements made in business meetings that EPA was referred to as "tithing" regardless of principle or interest. Who outside those meetings would have known that?

Have Church Leaders every discussed tithing surplus use/investment and that investment returns are also tithing.

Interest or even "returns on investments" are "paid" by 3rd parties from their own "funds".

helix · September 22, 2023

That petition was logically shrewd. My favorite part:

Quote

And the panel’s decision will have a palpable chilling effect on the Church’s religious expression. The stark contrast between the panel’s resolution of the City-Creek and Beneficial-Life claims vividly illustrates the point. The panel allowed the City-Creek claim to proceed because the Church addressed the source of funding and did not do more to define certain terms. But the Beneficial-Life claim was dismissed because Church leaders made “no” such statements. Op.29. The lesson thus is unmistakable: Church leaders must refrain from discussing how Church funds will be used and avoid terms like “tithing” unless they want to carefully define their terms. That is intolerable in a Nation whose Constitution “doubly protects religious speech.”

---

And that's exactly correct. The 2-1 decision had the 2 deciding that because Hinckley didn't provide clear accountant-speak in his sermon, it opens up the case to a fraud lawsuit. Ambiguity allows a fraud case to proceed, and allows the government to decide if a religion hasn't been clear enough, and thus define a religion's terms for them. But because Hinckley made no statement on Beneficial-Life, there is no ambiguity, and no fraud case can proceed.

This reasoning is grossly contradictory to the First Amendment.

smac97 · September 22, 2023

11 hours ago, provoman said:

None of this makes sense to me.

The 9th Circuit relied in part on purported statements made in business meetings that EPA was referred to as "tithing" regardless of principle or interest. Who outside those meetings would have known that?

Moreover, how is it relevant to the case at hand, in which the only issue is not what EPA folks understood as "tithing," or what the general membership understood, but what Huntsman alone reasonably understood as the meaning of "tithing."

Thanks,

-Smac

Analytics · September 22, 2023

16 hours ago, provoman said:

None of this makes sense to me.

The 9th Circuit relied in part on purported statements made in business meetings that EPA was referred to as "tithing" regardless of principle or interest. Who outside those meetings would have known that?

If I were his attorneys, I would argue that "tithing" was a widely understood euphemism for "sacred funds" which includes literal tithing and investment income on unspent tithing. We know this because:

That is how the folks in the EPA meetings referred to it
Hinckley's comments make more sense when interpreted that way
Based on conversations on this very board: we discussed at length what Hinckley meant when he said no "tithing" would be used, and at least 90% of the faithful members argued that the money for the mall came from selling legacy businesses the Church owned such as U&I sugar, ZCMI, etc., and not from tithing, neither directly, nor indirectly.

smac97 · September 22, 2023

5 hours ago, Analytics said:

If I were his attorneys, I would argue that "tithing" was a widely understood euphemism for "sacred funds" which includes literal tithing and investment income on unspent tithing.

This is strained silliness, so much so that I won't even both with a CFR, as we both know you wouldn't be able to substantiate this claim.

The Church has never defined tithing this way. The IRS certainly doesn't define it that way. And I think the vast majority of members don't, either.

Tithes are voluntary donations of one tenth of one's increase to the Church. This is the sine qua non of the term.

If the Church thereafter invests some portions of tithed funds and realizes a profit, that profit is not a voluntary donation of one tenth of one's increase to the Church. It is not a "tithe" by any coherent application of the term. It didn't reach the Church's coffers via voluntary donation. It is not a tenth of anyone's increase.

Now, it is quite true that tithes are considered "sacred funds." But then, so are Fast Offerings. But it would be absurd for you or anyone else to therefore suggest that because "tithes" and "fast offerings" are both "sacred funds," they are synonymous. That doesn't work at all. All tithing is "sacred funds," but not all "sacred funds" are tithing.

The same can be said about donations to the Church via LDS Philanthropies. Charitable donation? Yep. Characterized and treated as "sacred funds?" Certainly. But synonymous with "tithing," a voluntary donation of one tenth of one's increase to the Church? Nope. Nobody "tithes" to LDS Philanthropies.

The same can also be said about other sources of income the Church has. It's wonderful that the folks at EPA consider the monies they generate through investments as "sacred funds," but is that synonymous with "tithing," a voluntary donations of one tenth of one's increase to the Church? Nope.

Let's take a look at a few prominent treatments of "tithing" by the Church:

Encyclopedia of Mormonism:

Quote

Tithing is the basic contribution by which Latter-day Saints fund the activities of the Church. By revelation to the Prophet Joseph Smith, the Lord stated that members should pay "one-tenth of all their interest [increase] annually; and this shall be a standing law unto them forever" (D&C 119:4).

"Tithing is the basic contribution by which Latter-day Saints fund the activities of the Church."