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$5M Tithe Refund Case Could Lead to Litany of Lawsuits for Churches

An influential California businessman has sued to get back more than $5 million in tithes he donated over 20 years to The Church of Jesus Christ of Latter-day Saints. His case could have far-reaching implications for Christian churches and other religious organizations that rely on financial donations from members.

The Tithing Case

The businessman, James Huntsman, alleges that the LDS Church misled him about how his tithes would be used. Huntsman claims in his lawsuit that instead of his tithes being used for charitable purposes, the church used his tithes to help finance the upscale City Creek Mall, a commercial project. Huntsman wants a refund of more than $5 million he gave in cash and corporate shares as tithes to the church. Huntsman, whose father and grandfather held high-ranking positions in the church, paid tithes over a period of 22 years.

The LDS Church has denied Huntsman’s allegations of fraud, arguing that he was not misled about how his tithes would be used.

Further, the church argues that the case should be dismissed because it pertains to religious issues, not secular matters. Religious matters covered by the ecclesiastical abstention doctrine are not subject to judicial review, the defendants argue. The doctrine essentially prevents secular courts from involving themselves in a church body’s handling of matters related to discipline, faith, internal organization, etc. However, there are exceptions for cases involving alleged violations of civil law.

Deseret News reports that a U.S. District Court judge dismissed Huntsman’s lawsuit two years ago. However, the “2-1 vote in August by a three-judge panel of the Ninth Circuit reversed that decision and reinstated Huntsman’s suit, saying that the issue in question was secular, not religious.”

The panel judges, Kim McLane Wardlaw, William A. Fletcher, and Edward R. Korman (partially dissented), stated in their opinion that “the ecclesiastical abstention doctrine did not apply because the questions regarding the fraud claims were secular and did not implicate religious beliefs about tithing itself.”

In addition, the judges said they were not required to “examine Huntsman’s religious beliefs about the appropriate use of church money.” Their opinion, delivered by Judge Fletcher, acknowledges that “[c]hurch doctrine, to which Huntsman subscribed … teaches that giving tithes is a commandment from God.”

The LDS Church has appealed the court’s ruling, calling it a “threat to religious liberty” because, they say, the case centers on theological questions that fall under the church’s purview.

The defendants in the case are listed as the “Corporation of the President of the Church of Jesus Christ of Latter-day Saints” and 10 “Does,” or unnamed individuals.

LDS Church Finds Support

Several Christian groups have joined the LDS Church in its quest to reverse the three-judge panel’s ruling.

These religious groups filed an amicus (friend-of-the-court) brief on October 2, agreeing with the Mormon Church that the appeals court’s decision violates the First Amendment. The Constitutional Amendment protects the freedom of religion and prevents government establishment of religion.

They also expressed concern that religious organizations under the Ninth Circuit’s jurisdiction could face “a deluge of dubious lawsuits over their use of donated funds,” Deseret News reports.

The U.S. Courts for the Ninth Circuit comprises 15 federal judicial districts. Some of these districts are in Arizona, California, Hawaii, Idaho, Montana, Nevada, Oregon, and Washington.

If the court’s decision is upheld in Huntsman’s favor, the case could potentially set a precedent for other people to sue religious nonprofits in these states for refunds of their financial donations.

On Tithing

In its primary meaning, “the tithe … refers to the tenth of one’s income” that, in general, is given to one’s church usually to meet expenses. Christian denominations and other religious groups have their unique take on tithing, but generally, these offerings are not refunded. Some churches require members to tithe to remain in good standing.

Huntsman’s case against the LDS Church could significantly impact religious groups that rely on tithes and offerings to fund their operations. This could result in fundraising challenges or litigation expenses that snowball into church closures.

A suspicion that tithes are not always used for church expenses is not unwarranted, as criminal cases involving fraud and theft at churches are not uncommon. In some cases, mismanagement of monies has led to steep losses for some denominations.

Although Huntsman’s lawsuit has already put some religious groups and churches on edge, the case could potentially encourage faith organizations to be more transparent with members about how their tithes and offerings are used.

Among the religious groups that reportedly petitioned the court in support of the LDS Church are: Agudath Israel of America, the Christian and Missionary Alliance, the Southern Baptist Convention’s Ethics and Religious Liberty Commission, the General Conference of Seventh-day Adventists, the United Methodist Church’s General Council on Finance and Administration, the International Church of the Foursquare Gospel, the Jewish Coalition for Religious Liberty, the Lutheran Church-Missouri Synod, and the Union of Orthodox Jewish Congregations of America.

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Nicola A. Menzie
Nicola A. Menziehttp://www.nicolamenzieonline.com
Nicola A. Menzie a religion reporter whose bylines have appeared on the websites of the Religion News Service, The Christian Post, CBS News and Vibe magazine. Nicola is the Managing Editor at faithfullymagazine.com. You can find her on Twitter @namenzie. Email: nicola.menzie (at) faithfullymagazine.com.

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