Ninth Circuit Affirms Summary Judgement of Mormon Fraud Case, Debates Church Autonomy Doctrine

From the ADF Church & Ministry Alliance

Last Friday, the Ninth Circuit unanimously affirmed the summary dismissal in Huntsman v. Corporation of the President of the Church of Latter-Day Saints.  But the Court differed as to whether the case should have been decided under the “church autonomy doctrine.”  That doctrine, in essence, states that courts may not adjudicate internal fights amongst organized worshippers.  Six judges considered the doctrine irrelevant, deciding the case on principles of common law fraud principles, as adopted by California.  Five judges were somewhat aghast the majority failed to decide the case on the church autonomy doctrine, thinking the case was an obvious attempt by a former member to enlist the court in internal church doctrine.  One judge thought all the other judges should have ruled that the church autonomy doctrine presents a jurisdictional question that should have been resolved before anything else.  The First Amendment folks will have a lot of fun with the provocative debates.  Here are short excerpts from each opinion:

From the six-judge majority: 

Members of the Church engage in tithing, a practice of contributing ten percent of their annual income to the Church. Tithing is the principal way that members financially contribute to the Church. Huntsman, who comes from a prominent family of devout Church members, tithed for twenty-two years, from 1993 to 2015. Between 2003 and 2015, he tithed over $1 million in cash, over 20,000 shares of Huntsman Corporation stock, and over 1,800 shares of Sigma Designs stock. Huntsman later “became disillusioned with the Church’s doctrines” and stopped tithing, eventually resigning his membership from the Church.

. . .

David Nielsen, who was a Senior Portfolio Manager at Ensign Peak from 2010 to 2019, filed a whistleblower complaint with the Internal Revenue Service in 2019 alleging that the Church misused tithing funds to engage in commercial ventures, including funding the City Creek project and bailing out Beneficial Life. After Huntsman learned about Nielsen’s complaint, Huntsman asked the Church to return his lifetime tithing donations. The Church refused, and Huntsman subsequently filed this lawsuit in the United States District Court for the Central District of California. 1 Huntsman’s Complaint alleged that the Church committed fraud by stating that tithing funds were not used for the Church’s commercial endeavors when in fact they were. The Complaint further alleged that Huntsman relied on the Church’s statements in continuing to pay tithings.

. . .

The Church moved for summary judgment, arguing that it had made no misrepresentations. The Church contended that the City Creek project had been funded with earnings on invested reserves, not direct tithing contributions, and that this was consistent with its public statements. As to Beneficial Life, the Church argued that Huntsman had not submitted evidence of any specific statements and thus had not identified any misrepresentations that could possibly support a fraud claim. In the alternative, the Church argued that summary judgment was warranted under the First Amendment church autonomy doctrine.

Finally, the church autonomy doctrine has no bearing here. That doctrine protects First Amendment values by prohibiting courts from resolving “controversies over religious doctrine and practice.” Presbyterian Church in U.S. v. Mary Elizabeth Blue Hull Mem’l Presbyterian Church, 393 U.S. 440, 449 (1969). Because nothing in our analysis of Huntsman’s fraud claims delves into matters of Church doctrine or policy, our decision in this case does not run afoul of the church autonomy doctrine.

From four-judge concurrence:

A prominent disaffected member of the Church of Jesus Christ of Latter-day Saints is suing the Church seeking a refund of religiously commanded tithes because the Church’s leader made purported fraudulent misrepresentations during a religious address to the Church. This lawsuit is extraordinary and patently inappropriate, a not-so thinly concealed effort to challenge the Church’s belief system under the guise of litigation. The majority is correct that there was no fraudulent misrepresentation even on the terms of plaintiff’s own allegations. But it would have done well for the en banc court to recognize the obvious: there is no way in which the plaintiff here could prevail without running headlong into basic First Amendment prohibitions on courts resolving ecclesiastical disputes.

Although plaintiff’s claims can be rejected even as he styles them, which is the approach the majority takes, we should not indulge in the illusion that this is merely a secular lawsuit about civil fraud. Under the First Amendment, the plaintiff’s challenge to the Church’s understanding of tithing is not susceptible to resolution in a court of law, lest the judiciary wrest control from religious authorities over matters of theological concern. It would have been straightforward and preferable for the court to recognize that plaintiff’s unprecedented theory encounters overwhelming First Amendment impediments. While every judge on this panel agrees that the plaintiff’s claims fail, I write separately to explain why a suit like this could never succeed under the First Amendment’s church autonomy doctrine.

. . . 

As I set forth above, “[t]he First Amendment protects the right of religious institutions ‘to decide for themselves, free from state interference, matters of church government as well as those of faith and doctrine.’” Our Lady of Guadalupe Sch., 591 U.S. at 736 (quoting Kedroff, 344 U.S. at 116). The corollary to this is that courts must respect religious organizations’ “independence in matters of faith and doctrine and in closely linked matters of internal government.” Id. at 747. This is known as the church autonomy doctrine, or, alternatively, the doctrine of ecclesiastical abstention. These doctrines reflect a basic American truth: “[T]he Religion Clauses protect the right of churches and other religious institutions to decide matters ‘of faith and doctrine’ without government intrusion.” Id. at 746 (quoting Hosanna-Tabor Evangelical Lutheran Church and Sch. v. E.E.O.C., 565 U.S. 171, 186 (2012)). That includes intrusion by the courts.

From the one-judge concurrence:

The Constitution gives us no such choice. In deciding religious matters, the Constitution strictly limits our authority. Simply put, the church autonomy doctrine bars federal courts from resolving matters of faith, doctrine, and church governance. So we can’t just sidestep the doctrine and jump straight to the merits. Nor can the doctrine be assumed away, considered an afterthought, or serve as a convenient alternative ruling. Rather, it’s a threshold structural bar that must be reckoned with. Otherwise, we violate the restraints the Constitution places on our power.

It will be interesting to hear Sam Brunson’s take on this.  

darryll k. jones