LDS Church wins a round in tithing fight with James Huntsman. What comes next?

9th Circuit Court of Appeals is scheduled to rehear the case in June in Seattle.

(Trent Nelson | The Salt Lake Tribune) The Church Office Building in Salt Lake City on Tuesday, Dec. 12, 2023. A federal appeals court has granted the church's appeal and will reconsider the tithing fraud case brought by James Huntsman.

Federal appellate judges have granted a rehearing in the sensitive tithing case brought against The Church of Jesus Christ of Latter-day Saints by former member and prominent Utahn James Huntsman.

The 9th U.S. Circuit Court of Appeals ruled late Friday in favor of the church’s request for what is called an en banc review in the latest twist in Huntsman’s fraud lawsuit, with fresh oral arguments in the high-profile case now scheduled for June before a full set of the court’s judges.

In a short order with no comment, Chief Judge Mary H. Murguia said a majority of the court’s judges had voted to vacate a split ruling issued last August by a three-judge panel of the 9th Circuit. That 2-1 decision had revived Huntsman’s tithing case and returned it to a lower court, which previously had thrown it out.

Murguia set the 9th Circuit’s heftier review to start with oral arguments in a Seattle courtroom the week of June 24, likely before as many as 18 judges.

“These are important matters the church is following carefully,” church spokesperson Doug Andersen said in a statement Sunday. “The church appreciates the 9th Circuit’s ruling setting aside the three-judge panel’s opinion and agreeing to give this case further consideration. We look forward to presenting our case to the full court.”

Friday’s ruling is a win for the Utah-based faith with more than 17 million members worldwide.

Tithing is considered a sacred practice for Latter-day Saints, and church lawyers have vigorously invoked religious liberty and church autonomy concerns in defending against Huntsman’s allegations of fraud and deceit against top church leaders, including former President Gordon B. Hinckley.

(Chris Samuels | The Salt Lake Tribune) James Huntsman poses for a photograph at the Huntsman Foundation headquarters in Salt Lake City in October 2023. His tithing case will be heard in Seattle by an appeals court.

Huntsman, who resigned his church membership in 2020, sued the faith in March 2021.

He asserts in the federal suit that Latter-day Saint leaders misled members about how donations were spent, assuring them in statements over the pulpit that tithing was not used for commercial ventures, including $1.4 billion for City Creek Center, a luxury mall in downtown Salt Lake City.

In an April 2003 General Conference address, Hinckley insisted that tithing funds “have not and will not be used” for the shopping center, stating that the money came from “commercial entities owned by the church” and the “earnings of invested reserve funds.”

(Tribune file photo) President Gordon B. Hinckley, speaking at General Conference in April 2003, said "earnings" off invested reserve funds, not tithing itself, helped pay for City Creek Center.

Huntsman is seeking the return of a total of $5 million in tithing, plus penalties and interest.

After the case was reinstated, the faith’s attorneys filed lengthy briefs in October and November, arguing the decision violated free speech and religious protections, and threatened to expose it and other churches, nonprofits, colleges, universities and other groups to unwarranted, unconstitutional legal intrusions.

Its lawyers rang legal alarm bells with the 9th Circuit in late January, filing another brief urging an en banc review in light of a spate of new “copycat” lawsuits seeking class-action status by targeting the church and its investment firm, Ensign Peak Advisors.

Church lawyer Paul Clement said that continued class-action assaults against the church and other religions “are inevitable” as long as the decision to resurrect Huntsman’s personal fraud case remained on the books.

In nearly identical language, a series of recent suits filed by plaintiffs in Utah, Illinois, Tennessee, Washington and California contend, like Huntsman, that their allegations don’t implicate religious beliefs, doctrines or how the church is organized or governed — but rather the faith’s financial practices.

The cases also all refer to a February 2023 settlement between the church and the Securities and Exchange Commission, which found top church officials had authorized the creation of 13 shell companies partly to evade public reporting laws and obscure the size and scope of the faith’s investment portfolio.

The SEC fined Ensign Peak $4 million and the church $1 million.

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