RICO and the Church of Jesus Christ of Latter-day Saints

I‘ve written (both here and on the Mormon blog I blog at) about James Huntsman’s late suit against the Church of Jesus Christ of Latter-day Saints. In short, he alleged that the church fraudulently induced him to pay tithing. He requested, among other things, the return of donations he had made to the church. Ultimately, an en banc panel of the Ninth Circuit held that the complaint was deficient in stating underlying misstatement by the church. And without that misstatement, there could be no fraud. (A minority of the panel said the decision should have been based on both the lack of fraud and the church autonomy doctrine; one judge wrote that the church autonomy doctrine was jurisdictional and that the court shouldn’t even have looked at whether there was a misstatement.)

Huntsman was not the only one arguing that the church had fraudulently induced him to pay tithes. A couple days ago, the Tenth Circuit dismissed a putative class action brought by a couple former members of the LDS church. (The court emphasizes that the complaint was 203 pages long with 555 paragraphs. Now, I’m not a litigator, but having read a number of cases during my lifetime, I am perfectly comfortable saying that when the court comments on the length of your complaint, you’re probably not going to come out well.)

This suit had a twist on Huntsman’s though: the complaint alleged a civil RICO violation. Two, actually: first, that plaintiffs had been induced to join the church by relying on statements of religious history that church leaders did not actually believe. And second, that the church had violated the RICO statute by lying about how it would use tithing money.

The court dismissed the first count based on the religious autonomy doctrine. Courts, it explained, are constitutionally prohibited from adjudicating religious doctrine, including religious history. It could not even hear that question.

It dismissed the second count for failure to meet the RICO pleading standards. I’m not an expert on RICO, but it has very specific standards you have to meet in pleading. The district court found the plaintiffs had failed to sufficiently allege their reliance on the alleged misrepresentations. The appeals court agreed, but based its dismissal on a different problem with the complaint: by failing to allege their reliance, plaintiffs failed to plead the necessary RICO element that the predicate acts caused the harm they asserted.

Either way, plaintiffs lose. The court acknowledged the Ninth Circuit’s holding in the Huntsman case that there were no misrepresentations but said they didn’t even need to address that. Because the plaintiffs tried to use RICO, and because they failed to meet the very specific RICO pleadings on the second count, the court didn’t have to arrive at either the question of misrepresentation or the question of church autonomy.

Samuel D. Brunson