Update on Huntsman Lawsuit: Ninth Circuit Reverses Trial Court

[smac97]

On 1/31/2025 at 10:53 AM, smac97 said:

Update: The Church has defeated James Huntsman's lawsuit:

Alert: LDS Church prevails as federal appeals court tosses out James Huntsman’s tithing lawsuit

...

So it sounds like some on the en banc court did feel that the Church Autonomy Doctrine applies.

In a sense, perhaps the court's non-reliance on this Doctrine is the best outcome for the Church.  If the court had applied the Doctrine, our critics would almost certainly have said something like "Yeah, well, the Mormon Church was dishonest, but they got away with it by relying on a legal loophole/technicality."  Moreover, if the Ninth Circuit has applied CAD, I think Huntsman would have been more likely to seek review by SCOTUS, and I think SCOTUS might have been more inclined to grant such review (because CAD is an important constitutional principle).

Instead, we have the Ninth Circuit essentially declaring as a factual matter that the Church was honest and accurate in its statements regarding how it used its funds.  And since the decision did not "reach" the constitutional dimensions of Huntsman's lawsuit (which were, nevertheless, addressed well in the concurring opinions), I think Huntsman will be far less likely to seek an appeal.

IOW, thanks, Ninth Circuit!

I suspect Huntsman will throw in the towel.  Had the Ninth Circuit premised its decision on the Church Autonomy Doctrine, Huntsman may have been willing to proceed with a (likely Quixotic) attempt to appeal to the U.S. Supreme Court.  As it is, the Ninth Circuit's ruling does not seem to cover any new legal ground, so there's no reason for SCOTUS to consider it on appeal (and the statistical likelihood of SCOTUS doing so was always tiny anyway).

It appears that the deadline for seeking review by the U.S. Supreme Court is 90 days from the date of the order, which would be May 1, 2025.  Mr. Huntsman and his attorneys have that long make up their minds.  

Again, I doubt they will seek SCOTUS review, both because A) they lost the case mostly on the facts, not the law (appellate review is generally much more about seeking review of legal conclusions, not factual ones), and B) the chances of SCOTUS authorizing appellate review are very low.  We'll see what happens after May 1.

Thanks,

-Smac

[cujo22]

11 hours ago, webbles said:

The three judges in the three-judge decision weren't on the en banc panel.  It was 11 other judges.

Thank you. I see.

I searched online and see now that there are 29 total judges on the 9th circuit and an en banc review consists of 11 randomly selected judges (I wonder if that pool excludes the 3 from the initial ruling?). So it sounds like after the 3-panel decisions they selected a different 11 judges to do the en banc review. 

https://www.ca9.uscourts.gov/news-media/media-education-1/#:~:text=An en banc panel in,in the court of appeals.

[smac97]

22 minutes ago, cujo22 said:

Thank you. I see.

I searched online and see now that there are 29 total judges on the 9th circuit and an en banc review consists of 11 randomly selected judges (I wonder if that pool excludes the 3 from the initial ruling?).

Yes, it did.  I think that makes sense, as asking judges to "review" their own decision would negate the purpose of appellate review.

22 minutes ago, cujo22 said:

So it sounds like after the 3-panel decisions they selected a different 11 judges to do the en banc review. 

https://www.ca9.uscourts.gov/news-media/media-education-1/#:~:text=An en banc panel in,in the court of appeals.

Yep.

Thanks,

-Smac

[smac97]

An interesting article in The Federalist assessing the Huntsman decision (by a law professor) :

Huntsman v. Church of Jesus Christ of Latter-Day Saints: Church Autonomy is “a Threshold Structural Bar that Must be Reckoned With”

Some excerpts:

Quote

In the penultimate paragraph of its opinion, the majority said that the church autonomy doctrine had no bearing on the case. The majority explained that this was because its analysis did not delve “into matters of Church doctrine or policy.” Without expressly saying so, this was an oblique way of claiming that its opinion was entirely secular, guided by religiously neutral principles of law, and thereby sidestepping any need to address the doctrine of church autonomy. Claiming to follow “neutral principles” of state law is the much-disparaged workaround of church autonomy to skirt the First Amendment.

Four of the eleven judges concurred in a separate opinion by Judge Bress, and Judge Bumatay concurred in the judgment only. On the merits, the four-judge concurrence agreed with the majority that summary judgment was warranted because no reasonable jury could find that Church officials had misrepresented the source of the donated funds used for the Church’s commercial projects. However, the concurrence thought it imprudent to not go on and discuss the eight-hundred-pound gorilla in the room: that Huntsman’s lawsuit posed a religious dispute over the meaning of “tithe” and “tithed funds.”

I have opined a lot on this board about how this lawsuit turned on "the meaning of 'tithe' and 'tithed funds,'" and it turns out I was right and wrong.  I think I was substantively correct insofar as the "eight-hundred-pound gorilla in the room," the Church Autonomy Doctrine, since that doctrine would have necessarily involved the courts parsing out definitions of religious terms.  I was incorrect insofar as the majority of the 9th Circuit declined to "reach" CAD, and instead decided the case on the grounds that the Church had been honest in its communications.  I had assumed, as did the minority opinion, that the 9th Circuit would not want to put the cart (assessing the factual allegations in the lawsuit) before the horse (applying CAD to bar adjudication of the dispute).

Quote

The Church insisted that its use of the term “tithe” entailed direct principal only, not principal plus later earnings on the principal. While earnings on tithed funds were indeed devoted to redevelopment of the shopping center, that is exactly what officials of the Church had told its members might happen. For the four-judge concurrence, disposition in favor of the Church was permitted either by: (1) holding that the doctrine of church autonomy barred Huntsman’s claim; or (2) finding that Huntsman failed to raise a genuine question of fact for the jury that there was a misrepresentation. Because the majority’s choice of summary disposition on the merits was one of two permissible choices, the four judges concurred with the majority. But the four-judge concurrence also believed that its analysis should not stop there. It was the “First Amendment’s protections that most properly frame the central and unavoidable problem with this case.”

In the weeks since this decision came out, I have become more persuaded that the concurring opinion was the more appropriate application of the law.  I'll still take the Church's win, tho.

Quote

The four concurring judges’ belief that the court had a choice in how to resolve the case and that one of its options was based on church autonomy is inconsistent with the majority’s holding that church autonomy had no part in the case. Indeed, the four concurring judges went on to say things that disparaged the possibility of resolving the case via “neutral principles of law.” For example, the principal concurrence said:

[F]or Huntsman to prevail, a court or jury would need to agree with his view of what “tithing funds” in the Church includes. But that would intrude on the Church’s authority to define that divine concept for itself. . . .

Undermining any resort to “neutral principles” to accomplish a workaround of the First Amendment, the four-judge concurrence went on to say:

Huntsman cannot override the First Amendment’s protections by abstracting the Church’s statements about tithing from their religious context. . . .

It is therefore irrelevant that, in stylized form, the elements of a fraud claim can have a secular orientation. It is likewise irrelevant that terms like “income” and “reserved funds” can have secular meanings. The question here is not whether it is possible to recast Huntsman’s argument in secular terms, without the religious trappings. . . .

So too here. That a litigant invokes a state-law prohibition on fraud, even though “a valid and neutral law of general applicability,” . . . does not sideline the church autonomy doctrine. Religious disputes restated in the elements of a fraud claim do not lose their inevitably religious character . . . .

[A]ny effort to limit the Church to “secular” defenses would implicitly deem illegitimate the very system of beliefs and governance that define the Church as a religious institution and that lie at the heart of the First Amendment’s protections for religion.

These passages and others in the four-judge concurrence contradict the majority’s declaration that the doctrine of church autonomy had no part in the lawsuit’s disposition.

Well, yes.  Hence the concurring opinion.

Quote

They also undermine the concurrence’s joining in the majority opinion without reservation.

Not sure about that.  A "concurring opinion" is 

Quote

an opinion that agrees with the majority opinion but does not agree with the rationale behind it. Instead of joining the majority, the concurring judge will write a separate opinion describing the basis behind their decision.

The concurring opinion's logic seems to have been "The majority opinion chose Ground (A) and not Ground (B) for affirming the trial court's decision, when we think both (A) and (B) were available."

So I think the concurring opinion was alright.

Quote

The principal difference between the four-judge concurrence and Judge Bumatay’s concurrence in the judgment is that the latter insists that the church autonomy doctrine cannot be passed over. This is because the doctrine of church autonomy is rooted in constitutional structure. Indeed, just 30 days before the decision here, the Ninth Circuit handed down a decision in Markel v. Union of Orthodox Jewish Congregations of America, which among other things held that church autonomy can be raised sua sponte because the doctrine is rooted in constitutional limits on delegated authority. I discussed this decision in a previous FedSoc Blog post, Markel v. Union of Orthodox Jewish Congregations of America: Welcome Developments in the Law of Church Autonomy.

Interesting!  "{CAD} can be raised sua sponte" means that the court could have cited and relied on CAD even if the parties themselves failed to cite it ("sua sponte," a Latin phrase that means "of one's own accord," refers to an action taken by a judge without being requested by a party).

Quote

It is true that church autonomy is not jurisdictional in the sense that Article III, § 2, of the Constitution grants subject matter jurisdiction to Huntsman’s diversity claim. Jurisdiction is not the issue. Rather, Huntsman’s fraud claim asks whether the Church’s statements about its use of tithes were fraudulent. To decide that question, the majority opinion necessarily settled a dispute between the Church and a disaffected member concerning the religious meaning of “tithe” and “tithed funds.” Just like separation of powers—a matter of constitutional structure—allocates authority among the legislative, executive, and judicial branches, the Establishment Clause governs the division of authority between organized religion and civil government. Writing in Hosanna-Tabor Evangelical Lutheran Church and School v. EEOC (2012), Chief Justice Roberts said that the meaning of the words “an establishment” in the First Amendment is to be found by reference to the founders’ rejection of the established Church of England. And just as Parliament determined the Thirty-nine Articles of Faith for the Church of England, here the founders would have rejected a civil court deciding for a church the religious meaning of “tithe” and “tithed funds.” As I discuss in a forthcoming law review article, the resolution of religious questions or disputes, such as testing the validity, meaning, or importance of an organization’s religious beliefs and practices, is one of those few but important subjects that fall within a zone of a church’s autonomy. When this occurs, it does not trigger a balancing test over a personal right. Rather, a government of limited, delegated powers has no authority in the domain of disputes over theology. The case abruptly ends. A temporal court has no authority to proceed to the merits of the claim for fraud. We saw this in Hosanna-Tabor where the Court upbraided counsel for the EEOC for her failure to grasp that the Court’s threshold finding that it was working in a church autonomy zone—i.e., hiring and dismissal of ministers—cut off any rejoinder that the Lutheran school’s claim to be religiously motivated was pretextual.

Huh.  Sounds like this law professor is siding with the concurring opinion in Huntsman.

Quote

It would seem, therefore, that Judge Bumatay is correct. The church autonomy defense cannot be skirted and the case resolved on the merits. And the very words of the four-judge concurrence against resort to “neutral principles of law” admit as much.

I think this is correct.  It's sort of moot, though, as the 9th Circuit has spoken and life moves ever onward.

The concurring opinions will likely be cited in future cases involving CAD.

Quote

There’s more. Huntsman contended that when discussing tithes the Church had not distinguished between direct “principal” and “earnings on principal.” This assertion was backed by the testimony of a whistleblower, David Nielson, who had worked for an investment advisor used by the Church. Thus, we have a contested question of fact. On that question, the majority opinion sub silentio takes the side of the Church over Huntsman. However, taking sides in a religious dispute is forbidden by the doctrine of church autonomy. It’s more than ironic that not only did the six-judge majority err, but in erring it violated church autonomy.

Huh!  I hadn't thought of that.  But I'm not sure he's correct that there was a "contested question of fact."

Quote

Given the structural nature of that doctrine, this makes perfect sense. When a subject matter falls into a zone that the First Amendment dedicates exclusively to the authority of the church, civil involvement within the zone is forbidden. The court’s sole duty was to dismiss because, as Judge Bumatay put it, church autonomy is “a threshold structural bar that must be reckoned with.”

I agree with this.

Quote

Right result; wrong rationale. Unlike Markel, Huntsman was not a good day for the First Amendment in the Ninth Circuit.

Perhaps.  But it was a good day for the Church.  The First Amendment will continue to chug along.  The Church's honesty and reputation, meanwhile, were vindicated.  I'll take that "right result" and let future litigants explore CAD and the First Amendment.  The Church has other things it can and should be doing with its time, money and effort.

Thanks,

-Smac

[Stargazer]

In connection with this lawsuit... includes a brief snippet from what I think is Huntsman's interview on Mormon Stories, as well as a snippet from an interview with Elder Bednar.

 

Edited March 8, 2025 by Stargazer

[Calm]

Is there a link to Elder Bednar’s actual interview? 

[JAHS]

Here's the full interview. He talks about the finances at abut 26:00 mark.

 

Edited March 9, 2025 by JAHS

[Calm]

Quote

let me address two things

we have four overarching responsibilities

the mission of the church is to help people learn about and live the teachings of Jesus Christ, to share that message with the world, to strengthen and unite families, and to care for the poor and the needy

now we do this all over the world so in terms of scope that's the answer

and the people who want to tell us how to spend the money, I would just emphasize one undergirding principle, the assets of the church are primarily income consuming they are not income producing…

 there 35,000 meeting houses and Facilities, they're all paid for when they're dedicated

all of the utilities are paid for, they're not passing a plate or collecting money in local congregations

that's all done through the tithes that the members of the church pay all over the world

but you've got fixed costs in the maintenance the utilities all of those things for all of those buildings…315 temples in operation announced in design being renovated or under construction, four major institutions of higher education

you don't have to be an accountant to figure out those are some big dollars so when people say ‘well what do you do with all that money’

well there's an episode in the Old Testament about Joseph who interpreted a dream for the Pharaoh that there were seven years of plenty and seven years of famine and in the years of plenty you better prepare for the years of famine

so people want to speculate about the size of the reserve and all that that kind of stuff uh

a billion dollars assisting poor and needy people all over the world annually, a billion dollars for Education…. you just begin to think about that stuff and it's necessary to maintain the mission of this church, which is to bless the lives of individuals and families

that's what we do….

 I think it would be imprudent and unwise not to have a reserve that was unbelievable

Edited to remove the other person and to create natural division

If that is the epic takedown, I don’t see it that way.  I don’t disagree with it, but I have seen others and myself use the same reasoning.  It does not really address the size of the reserve.

I also don’t see it as necessary for the size to be addressed. Again just saying it’s not a novel rebuttal.  So it comes across as false advertising in the first video to me.

Edited March 9, 2025 by Calm