76 F.4th 962
9th Cir.2023Background
- Plaintiff James Huntsman, a longtime former LDS Church member, alleged he tithed heavily from 1993–2015 and that the Church fraudulently misrepresented that tithing funds would not be used for commercial projects.
- Ensign Peak Advisors (EPA), the Church’s investment vehicle, transferred large sums (initially $1.2 billion and later more) that, with earnings, funded the City Creek Mall redevelopment; the Church spent over $1.438 billion on the project.
- Five public statements by Church leaders/publications (2003–2012) said no tithing funds were or would be used for City Creek; President Hinckley also said earnings of “invested reserve funds” would be used.
- David Nielsen (former EPA portfolio manager) declared that EPA staff commonly referred to EPA funds as “tithing money,” that tithing principal and earnings were commingled, and that transfers to Property Reserve were done to conceal EPA as the source.
- District court granted summary judgment for the Church; Ninth Circuit reversed as to the City Creek Mall fraud claim (finding triable issues on misrepresentation and reliance), affirmed as to the Beneficial Life insurance bailout claim, and remanded.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| First Amendment / ecclesiastical abstention | Huntsman’s fraud claim is secular (misrepresentation about fund use) and thus justiciable. | Church: church-autonomy doctrine bars inquiry into internal religious matters. | Court: claim is secular (about what was said and what funds were used); First Amendment does not bar adjudication. |
| Fraud — City Creek Mall (misrepresentation) | Church publicly denied use of tithing funds (principal or earnings); statements were false and made to induce tithing. | Church: Hinckley’s 2003 statement (earnings of reserve funds) was truthful — reserves = tithing earnings — so no false statement. | Court: Genuine dispute exists — reasonable juror could find misrepresentation (unqualified denials, ambiguous "reserve funds," Nielsen/Clarke evidence). Reversed as to City Creek claim. |
| Reliance (justifiable reliance) | Huntsman read/heard the five statements and continued to tithe in reliance. | Church: Huntsman was sophisticated and should have understood "reserve funds" meant tithing earnings. | Court: Credibility/reasonableness of Huntsman’s reliance is for jury; summary judgment improper on reliance. |
| Fraud — Beneficial Life insurance bailout | Huntsman points to general teachings and isolated statements about tithing not funding commercial ventures. | Church: no specific actionable representation about Beneficial Life in the record. | Court: Affirmed — insufficient evidence of a specific misrepresentation regarding Beneficial Life. |
Key Cases Cited
- Delta Sav. Bank v. United States, 265 F.3d 1017 (9th Cir. 2001) (de novo review of summary judgment)
- Anderson v. Liberty Lobby, Inc., 477 U.S. 242 (1986) (standard for summary judgment and reasonable-jury inquiry)
- Center for Auto Safety v. Chrysler Grp., LLC, 809 F.3d 1092 (9th Cir. 2016) (standard for sealing judicial records; "compelling reasons" required)
- Puri v. Khalsa, 844 F.3d 1152 (9th Cir. 2017) (scope of ecclesiastical-abstention doctrine)
- Serbian E. Orthodox Diocese for U.S. & Can. v. Milivojevich, 426 U.S. 696 (1976) (courts must avoid resolving religious doctrine)
- Jones v. Wolf, 443 U.S. 595 (1979) (church property and internal disputes principles)
- Gen. Council on Fin. & Admin. of the United Methodist Church v. Superior Ct. of Cal., 439 U.S. 1355 (1978) (in-chambers) (religion may not shield fraud)
- Cantwell v. Connecticut, 310 U.S. 296 (1940) (Free Exercise protections do not excuse fraud)
- Elvig v. Calvin Presbyterian Church, 375 F.3d 951 (9th Cir. 2004) (texts guiding religious actors can be examined under secular analysis)
- Small v. Fritz Companies, 65 P.3d 1255 (Cal. 2003) (elements of fraud under California law)
- Engalla v. Permanente Med. Grp., Inc., 938 P.2d 903 (Cal. 1997) (actual reliance definition in fraud cases)
- Earp v. Ornoski, 431 F.3d 1158 (9th Cir. 2005) (credibility disputes preclude summary judgment)
- Gaddy v. Corp. of President of Church of Jesus Christ of Latter-Day Saints, 551 F. Supp. 3d 1206 (D. Utah 2021) (similar claim: First Amendment did not bar RICO/fraud-style claims about tithing statements)