Huntsman v. Church of Jesus Christ of Latter-Day Saints: Church Autonomy is “a Threshold Structural Bar that Must be Reckoned With”

In Huntsman v. Corporation of the President of the Church of Jesus Christ of Latter-day Saints, the Ninth Circuit sitting en banc affirmed a district court’s summary judgment in favor of the Church of Jesus Christ of Latter-day Saints. A divided panel of the Ninth Circuit had affirmed in part, reversed in part, and remanded. However, the opinion of the panel was vacated when a petition for rehearing en banc was granted.

James Huntsman, a former member of the Church and from one of its prominent families, tithed considerable sums from 1993 to 2015. Huntsman alleged that the Church had diverted tithed contributions to certain for-profit projects—most prominently the redevelopment of a shopping center located near temple square in Salt Lake City—despite representing to its members that it would not use any tithed funds in this manner. Huntsman sued in federal district court in California invoking diversity jurisdiction. His complaint alleged fraud and sought a judgment ordering a return of all monies he had contributed to the Church.

The Church moved for summary judgment on two bases. It averred that the claim was barred by the First Amendment doctrine of church autonomy and, in any event, that the plaintiff had failed to state a claim for which relief could be granted. In its decision here, the eleven-judge en banc court was unanimous in its affirmation of the district court’s summary judgment for the Church but was divided among three different opinions concerning the proper rationale.

In an opinion by Judge Friedland, an en banc majority of six judges leaped over the church autonomy defense and reached the merits of the claim for fraud. Concerning the essential element of misrepresentation, the majority found that the Church had not used principal tithed funds for its commercial projects, only earnings on that principal—which is what Church officials had said they would do with all monies tithed to the Church. Because no reasonable juror could conclude that the Church misrepresented the source of the funds used for the redevelopment of the shopping center, the district court’s summary judgment against Huntsman was affirmed.

In the penultimate paragraph of its opinion, the majority said that the church autonomy doctrine had no bearing on the case. The majority explained that this was because its analysis did not delve “into matters of Church doctrine or policy.” Without expressly saying so, this was an oblique way of claiming that its opinion was entirely secular, guided by religiously neutral principles of law, and thereby sidestepping any need to address the doctrine of church autonomy. Claiming to follow “neutral principles” of state law is the much-disparaged workaround of church autonomy to skirt the First Amendment.

Four of the eleven judges concurred in a separate opinion by Judge Bress, and Judge Bumatay concurred in the judgment only. On the merits, the four-judge concurrence agreed with the majority that summary judgment was warranted because no reasonable jury could find that Church officials had misrepresented the source of the donated funds used for the Church’s commercial projects. However, the concurrence thought it imprudent to not go on and discuss the eight-hundred-pound gorilla in the room: that Huntsman’s lawsuit posed a religious dispute over the meaning of “tithe” and “tithed funds.” The Church insisted that its use of the term “tithe” entailed direct principal only, not principal plus later earnings on the principal. While earnings on tithed funds were indeed devoted to redevelopment of the shopping center, that is exactly what officials of the Church had told its members might happen. For the four-judge concurrence, disposition in favor of the Church was permitted either by: (1) holding that the doctrine of church autonomy barred Huntsman’s claim; or (2) finding that Huntsman failed to raise a genuine question of fact for the jury that there was a misrepresentation. Because the majority’s choice of summary disposition on the merits was one of two permissible choices, the four judges concurred with the majority. But the four-judge concurrence also believed that its analysis should not stop there. It was the “First Amendment’s protections that most properly frame the central and unavoidable problem with this case.”

The four concurring judges’ belief that the court had a choice in how to resolve the case and that one of its options was based on church autonomy is inconsistent with the majority’s holding that church autonomy had no part in the case. Indeed, the four concurring judges went on to say things that disparaged the possibility of resolving the case via “neutral principles of law.” For example, the principal concurrence said:

[F]or Huntsman to prevail, a court or jury would need to agree with his view of what “tithing funds” in the Church includes. But that would intrude on the Church’s authority to define that divine concept for itself. . . .

Undermining any resort to “neutral principles” to accomplish a workaround of the First Amendment, the four-judge concurrence went on to say:

Huntsman cannot override the First Amendment’s protections by abstracting the Church’s statements about tithing from their religious context. . . .

It is therefore irrelevant that, in stylized form, the elements of a fraud claim can have a secular orientation. It is likewise irrelevant that terms like “income” and “reserved funds” can have secular meanings. The question here is not whether it is possible to recast Huntsman’s argument in secular terms, without the religious trappings. . . .

So too here. That a litigant invokes a state-law prohibition on fraud, even though “a valid and neutral law of general applicability,” . . . does not sideline the church autonomy doctrine. Religious disputes restated in the elements of a fraud claim do not lose their inevitably religious character . . . .

[A]ny effort to limit the Church to “secular” defenses would implicitly deem illegitimate the very system of beliefs and governance that define the Church as a religious institution and that lie at the heart of the First Amendment’s protections for religion.

These passages and others in the four-judge concurrence contradict the majority’s declaration that the doctrine of church autonomy had no part in the lawsuit’s disposition. They also undermine the concurrence’s joining in the majority opinion without reservation.

The principal difference between the four-judge concurrence and Judge Bumatay’s concurrence in the judgment is that the latter insists that the church autonomy doctrine cannot be passed over. This is because the doctrine of church autonomy is rooted in constitutional structure. Indeed, just 30 days before the decision here, the Ninth Circuit handed down a decision in Markel v. Union of Orthodox Jewish Congregations of America, which among other things held that church autonomy can be raised sua sponte because the doctrine is rooted in constitutional limits on delegated authority. I discussed this decision in a previous FedSoc Blog post, Markel v. Union of Orthodox Jewish Congregations of America: Welcome Developments in the Law of Church Autonomy.

It is true that church autonomy is not jurisdictional in the sense that Article III, § 2, of the Constitution grants subject matter jurisdiction to Huntsman’s diversity claim. Jurisdiction is not the issue. Rather, Huntsman’s fraud claim asks whether the Church’s statements about its use of tithes were fraudulent. To decide that question, the majority opinion necessarily settled a dispute between the Church and a disaffected member concerning the religious meaning of “tithe” and “tithed funds.” Just like separation of powers—a matter of constitutional structure—allocates authority among the legislative, executive, and judicial branches, the Establishment Clause governs the division of authority between organized religion and civil government. Writing in Hosanna-Tabor Evangelical Lutheran Church and School v. EEOC (2012), Chief Justice Roberts said that the meaning of the words “an establishment” in the First Amendment is to be found by reference to the founders’ rejection of the established Church of England. And just as Parliament determined the Thirty-nine Articles of Faith for the Church of England, here the founders would have rejected a civil court deciding for a church the religious meaning of “tithe” and “tithed funds.” As I discuss in a forthcoming law review article, the resolution of religious questions or disputes, such as testing the validity, meaning, or importance of an organization’s religious beliefs and practices, is one of those few but important subjects that fall within a zone of a church’s autonomy. When this occurs, it does not trigger a balancing test over a personal right. Rather, a government of limited, delegated powers has no authority in the domain of disputes over theology. The case abruptly ends. A temporal court has no authority to proceed to the merits of the claim for fraud. We saw this in Hosanna-Tabor where the Court upbraided counsel for the EEOC for her failure to grasp that the Court’s threshold finding that it was working in a church autonomy zone—i.e., hiring and dismissal of ministers—cut off any rejoinder that the Lutheran school’s claim to be religiously motivated was pretextual.

It would seem, therefore, that Judge Bumatay is correct. The church autonomy defense cannot be skirted and the case resolved on the merits. And the very words of the four-judge concurrence against resort to “neutral principles of law” admit as much.

There’s more. Huntsman contended that when discussing tithes the Church had not distinguished between direct “principal” and “earnings on principal.” This assertion was backed by the testimony of a whistleblower, David Nielson, who had worked for an investment advisor used by the Church. Thus, we have a contested question of fact. On that question, the majority opinion sub silentio takes the side of the Church over Huntsman. However, taking sides in a religious dispute is forbidden by the doctrine of church autonomy. It’s more than ironic that not only did the six-judge majority err, but in erring it violated church autonomy. Given the structural nature of that doctrine, this makes perfect sense. When a subject matter falls into a zone that the First Amendment dedicates exclusively to the authority of the church, civil involvement within the zone is forbidden. The court’s sole duty was to dismiss because, as Judge Bumatay put it, church autonomy is “a threshold structural bar that must be reckoned with.”

Right result; wrong rationale. Unlike Markel, Huntsman was not a good day for the First Amendment in the Ninth Circuit.