Class Action Against the Church of Jesus Christ of Latter-day Saints Dismissed

Last Thursday, the Salt Lake Tribune reported (Patreon link here), a federal judge in Utah dismissed a proposed class action against the LDS church. The plaintiffs made claims similar to James Huntsman, whose suit was recently dismissed. Like Huntsman, these plaintiffs claimed that, in choosing to pay tithing, they relied on the church’s statement that it wouldn’t use tithing in its for-profit endeavors. It turned out, they claimed, that the church did use tithing in its for-profit endeavors.

The LDS church filed a motion to dismiss. Because Utah is in the Tenth Circuit, while Huntsman’s case was in the Ninth Circuit, the Ninth Circuit’s holding that the church’s statement was not fraudulent was not binding on this court. And, interestingly enough, this court did not address that questions. Nor did it look at the church autonomy doctrine.

Instead, it dismissed the case on purely procedural grounds. The plaintiffs, it held, had filed their suit too late. In Utah (as in many states), the statute of limitations is three years for a fraud claim. Those three years start running when the plaintiffs knew or should have known about the underlying fraud.

Their claims, the court said, were largely based on the whistleblower disclosure from 2019. But they didn’t file their suits until 2023, three years and ten months after the disclosure. Moreover, the court points to thirteen media reports in the following three months (including one I wrote!) to determine that this was a national story, one that the plaintiffs should have known about. (It also points to five plaintiffs who filed timely suits.) Because the statute of limitations had already expired before the plaintiffs filed their proposed class action, they couldn’t maintain the suit.

But even if they had filed timely, the court says, their complaint was deficient. While a complaint doesn’t have to lay everything out, it must plead certain facts that establish the issues they claim. Because I need to get into work, I’m not going to go issue-by-issue here, but there’s one I want to raise.

The plaintiffs claimed that the church breached its fiduciary duties to them in misusing their donations. (A fiduciary duty is a heightened duty owed by virtue of some legally-recognized relationship between two parties.) The plaintiffs pointed to Utah Charitable Solicitations Act. The court held (correctly) that there is no fiduciary relationship, and thus no fiduciary duty, between donors and charities, and that the UCSA governed charitable solicitors and the charities on whose behalf they are soliciting.

Because the LDS church won on statute of limitations grounds and on failure to state a claim grounds, the court didn’t need to go into constitutional questions or whether the church lied. The claim—and, presumably, any subsequent claims arising from the same statement—is over.

Samuel D. Brunson

Cross-posted to By Common Consent.