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You may be seated.

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Good afternoon, and welcome to all of you.

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Welcome to the James Browning Courthouse here in San Francisco.

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We're all happy to be here.

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This is the time set for the case of James Hutzman versus the Corporation of the President of the Church of Jesus Christ of Latter-day Saints.

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If the lawyers are ready to proceed, you may come forward.

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Good afternoon, and may it please the Court, Your Honors.

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My name is David Janellis, and I represent Appellant James Huntsman.

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Before I begin, may I reserve five minutes for rebuttal?

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Thank you.

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I'd like to start, Your Honors, with a quote from a song that I'm sure you all know.

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When I find myself in times of trouble, Mother Mary comes to me.

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Speaking words of wisdom, let it be.

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In most contexts, the name Mother Mary has religious connotations.

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But here, it's just Sir Paul McCartney singing about his Mother Mary McCartney.

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It's secular.

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And the same is true of the word tithing, Your Honors.

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In many cases, that word would invoke religion.

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But here, in this narrow case, the implications are no more religious than the song Let It Be.

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Council, how can you say that?

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I understand the importance of avoiding constitutional questions where we don't need to do that.

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But for example, the Supreme Court in Presbyterian Church versus Mary Elizabeth Bluehall,

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that dealt with a trespass claim, Our Lady of Guadalupe, which dealt with an employment claim, and Kedra versus St.

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Nicholas Cathedral of Russian Orthodox Church dealt with an incorrect incorporation of secular legal principles to church governance.

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Why in this case where we're dealing with tithing, which

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that you would agree is a very common principle among many, many religions.

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You've seen some of the arguments from opposing counsel or the amicus counsel talking about the many differences that there are among religions about the meaning of tithing.

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to my understanding, tithing, unlike your Mother Mary example, is a quintessential religious issue.

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In fact, I don't know of any use of the term tithing that is not religious in context.

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What am I missing?

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Your Honor, you've cited three cases in which the Church's decision-making functions were at issue.

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For example, in Our Lady of Guadalupe School, as Your Honor noted, that had to do with a decision to hire or fire.

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It was employment, which is why the ministerial exception applies.

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What we have here is more similar, Your Honor, to US v. Rashid.

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where in this circuit found that even where, and there it wasn't called tithing, but it was still a donation made to the religious organization under a supposed commandment of God, and the organization in that particular instance had not disclosed

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how the money was being used truthfully.

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And this circuit found that it doesn't matter that the concept of donation may be cloaked in religion.

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That's not a way to get away from fraud.

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And Your Honor, this is a fraud case, a simple fraud case for which the First Amendment provides no sanctuary.

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And frankly, that's why every single judge that's looked at this case so far has reached the same conclusion with respect to the First Amendment, even where they may have staunchly disagreed

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on other issues.

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And to this point, Your Honours, I'd like to spend my limited time here today addressing three points.

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First, the secular nature of this dispute.

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Second, inferences that must be drawn in Mr. Huntsman's favour.

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And third, the slippery slope.

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And I also understand that the panel has requested that we be prepared to discuss domicile.

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And should the panel have questions, I'm happy to address them.

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I was going to be going to address this, but I hope you will.

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Your claim sounds under California tort law for fraud.

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And one of the elements of that, of course, you know, is justifiable reliance.

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I'd be interested to know, wouldn't you be asking a jury

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to determine whether Mr. Huntsman's reliance was justifiable.

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And in order to do that, wouldn't you have to understand what a reasonable church member would know, which would get you into the religious context?

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At some point, would you answer that question, please?

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I'm happy, Judge Smith, to answer that question now.

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With respect to the issue of reliance, and again this gets me to preview my second issue of inferences, we have Mr. Huntsman's sworn testimony on pages 44 to 45 of the record, unequivocally that he relied on the church's statement that the money for City Creek was coming from somewhere other than

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tithing.

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In fact, the church on one instance at least went so far as to say not one penny of tithing was used.

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And Mr. Huntsman has stated unequivocally that that mattered to him.

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It was material.

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And that that impacted his decision to donate tithing.

[00:05:59] Speaker 01:
It still has to be reasonable reliance, right?

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That's the test under state law.

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So he may subjectively believe that.

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But we would then have to ask, or a jury would have to ask, is that reasonable?

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That's correct, Your Honor.

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At that point, sorry to cut you off, but the question would be, how is that not essentially weighing his belief that he gave tithed monies as a condition for something, and the church's view that tithed money is a required commandment?

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Because, Your Honor, in the context of the reliance here, Judge Bress,

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It's a secular issue.

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It's one of accounting.

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And that's the fundamental way we would submit that this case has been misframed by the church, respectfully.

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Yes, tithing is a religious doctrine, a commandment from God, as the church would have it be known.

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However, to address tithing in the context of this case with the facts at bar, we don't need to look at any commandment.

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We need to look at the church's own secular definition of tithing, which at the record at 682.

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And just to pause you, how can a church have a secular definition of a religious obligation?

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I don't understand how that could be.

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because it's not about the reasons for giving tithing in general.

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It's the reasons for giving the tithing in this particular instance.

[00:07:25] Speaker 09:
Again, it's a very- Well, counsel, let me follow up on that because I'm really struggling to understand how this case would be tried without really delving into not only the church's view of what its doctrines dictate, but Mr. Huntsman's own understanding of tithing and how tithing donations would be utilized.

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I thought that he had

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testified at numerous points in his declaration talking about how when he

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gave the tithing money, there were no conditions put on it.

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And the reason was that as a long time church member, he had a very firm understanding of what tithing really meant.

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And all of that understanding really stemmed from church doctrine or his understanding of church doctrine.

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So I take it that your argument really tries to narrow the trial on the few statements that

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were at issue in this case, but if this case were to go to trial, wouldn't the church be entitled to pull the lens back and talk about tithing, the purposes of tithing in general?

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They would be able to talk about President Hinckley's statements, not just as narrowly defined as you, but much broader than that.

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And in response, then Mr. Huntsman would also potentially testify about his own understanding of religious doctrine.

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I just don't see how this case could be tried as narrowly

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as you're contemplating.

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Can you respond to that?

[00:08:52] Speaker 03:
Of course, Your Honor.

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And this goes to Judge Bess's question as well.

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Yes, I was really struggling with the same area that his questions went to.

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I think we need to respectfully back up for a moment just to talk about this case, because you've referenced what the case is about.

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And let me be clear, lest this has been misframed by the church.

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Mr. Huntsman in this case does not challenge how

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the church ultimately chooses to spend its tithing, even if it spends the money on City Creek or on beneficial life.

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That's the church's prerogative that's protected, admittedly, under the First Amendment and 14th Amendment, the autonomy doctrine, whatever we want to call it, and completely distinct from the issue here.

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The issue here

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is how the church told Mr. Huntsman under its definition of tithing, which again is not secular.

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The church has used general accounting principles to describe the tithing here.

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If we look at page 682 of the record, the church has stated that tithing, as President Hinckley apparently understood it in 2003 during his general address, was the principle.

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The money that my client Mr. Huntsman took

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and gave to the church before it was invested anywhere else.

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It wasn't.

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Does it matter that the April 2003 speech came from President Hinckley in this religious context?

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In other words, this isn't just any old speech.

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It was given in this broader sense of describing the church activities and religious mission.

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And isn't there a concern if

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you're asking courts to start parsing these speeches, whether it's going to chill something within religious doctrine or internal church governance that a church leader might have to run a speech by legal before he can deliver a sermon.

[00:10:51] Speaker 03:
No, Your Honor, and respect that that actually piggybacks very nicely on Judge Bress and Judge Wynn's question.

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I can answer all these together because

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The answer would be no more so than the religious statements made in Rashid, no more so than the religious statements made in Maktab Tariq or in Annamalai or in any of the other cases where our Supreme Court or this circuit or other circuits such as the 11th Circuit in Annamalai or the Court of Appeal in Texas in Libhart have addressed issues where in the context of a sermon, for example in Rashid, Pastor Rashid told his congregants, it is God's will from the pulpit.

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that you give your money as ministers and it will be quadrupled under the will of God.

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In that case, just as we would submit in this case, Pastor Rashid knew at the time that he made that statement that it was not actually going to be quadrupled under the will of God.

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It was going to be quadrupled by all of the other donations that were taken in in what this circuit characterized as a Pyramid or Ponzi scheme.

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In this case, likewise, there is at a bare minimum, Your Honours, a triable issue of fact as to when President Hinckley and Bishop Burton and the Church's official magazine

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and the church's statement to Deseret News and Keith B. McMullen's statement to the Salt Lake Tribune at the time that all of those statements were made on five.

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About McMullen, don't we have to decide whether or not McMullen can speak for the church?

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And isn't that a religious question?

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No, Your Honor, because at the time that McMullen made the statement, he was speaking on behalf of the church.

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And he said that not one penny of tithing was being used.

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I mean, how do we know he was speaking on behalf of the church?

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Your honor, that would be a question that could be asked in discovery.

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Should this case proceed?

[00:12:46] Speaker 08:
Isn't that precisely the problem though?

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We're supposed to ask who can speak on behalf of the church.

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So what if the church says, no, he wasn't speaking on behalf of us and then we're going to decide as a religious matter that he was speaking on behalf of the church.

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First of all, Your Honor, the church has never questioned that issue.

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In fact, in the record below.

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But in that hypothetical, what would happen in that case?

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Hypothetically, if he was not speaking upon the church and if the church chose to distance itself, which it had the opportunity to do.

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I mean, that statement was made, as we know, in 2012.

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This case was filed in 2022.

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There was ample opportunity for the church to say no.

[00:13:24] Speaker 08:
So what would happen in that case, though, then we would have to say the church is wrong, that Keith McMullen actually was speaking on behalf of the church.

[00:13:32] Speaker 03:
The church would in your hypothetical if the church denied that Mr McMullen was speaking on behalf of the church and said no, none of these five individuals were speaking on behalf and really it was something completely different even though one of the individuals President Hinckley was, according to the church was speaking.

[00:13:49] Speaker 08:
So on behalf of the bottom line is we can say no, the church is wrong.

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Keith McMillan was speaking on behalf of the church based on the record.

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Yes.

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And in your hypothetical, we'd have to address it in the facts at bar.

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But the issue, but how is that not like deeply entwined with religious matters?

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Because if that was deeply entwined in religious matters, a simple issue of is somebody speaking on behalf of an organization?

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Where would we even draw the line as to what's religious and what's not so long as linguistics are and vernacular are religious.

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I mean this gets back to the issue of of let it be and tithing and it shouldn't be.

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It wouldn't be equitable or consistent with the intent of the First and Fourteenth Amendments and the doctrine stemming, therefore, to say that simply to use this circuit's terminology, simply because you invoke religious terminology, you're now cloaking civil torts in immunity.

[00:14:42] Speaker 03:
That's not the purpose.

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When there are issues here, and this again gets back to the questions, these are accounting issues.

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The church— Council, with respect.

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If I understand the record correctly, President Hinckley never said these were accounting issues.

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Mr. Hudson was a member of the church for many years, continued to pay well after President Hinckley said what he agreed he said.

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He says that he understood President Hinckley to say that tithing was treated in two parts.

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There's the principal is given and then the reserve.

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The church later showed that it was just the reserve was being used.

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You got four statements after the original statement.

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that he didn't break it down that way.

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But Mr. Huntsman knows, and the record shows, that unless you want to get into LDS doctrine, which you can't do, President Hinckley is the only person, the only person, who is authorized to speak authoritatively on behalf of the church.

[00:15:39] Speaker 05:
So you say that's not true.

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But then you get into church doctrine to say otherwise, do you not?

[00:15:45] Speaker 03:
Respectfully, no, you don't, Your Honor.

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How's that?

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First of all, Mr. President,

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Hinckley was not the only person to speak on behalf of the church.

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And on what do you rely for that?

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I would cite the presiding bishop H. David Burton's statement.

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The presiding bishop of the church is an inferior officer of the church.

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There's only one prophet and president of the church.

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Mr. Huntsman's record indicates that.

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He speaks for the church, nobody else.

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So how do, now you may say that's not true, but then we would be required to get into the LDS doctrine and for you to show that he wasn't the only person, right?

[00:16:26] Speaker 03:
No, Your Honor, we'd have to apply common law issues, again, under neutral.

[00:16:31] Speaker 05:
Unless the Constitution says otherwise, right?

[00:16:34] Speaker 03:
No, Your Honor, we would have to apply neutral principles of common agency law as to if somebody is holding themselves out as a representative of an organization, as a bishop, and a president, and a statement made by the church to the church's publication to say after the fact, to Monday morning quarterback,

[00:16:56] Speaker 03:
and state, no, that wasn't a statement on behalf of the church, because the LDS's official spokesperson is not President Hinckley, would open up the door for every religious organization, including in Rashid.

[00:17:09] Speaker 03:
It wasn't just Pastor Rashid who made the statement, it was Pastor Rashid's colleague who was not the pastor, was just a minister, the same way that presiding Bishop Burton is not the president, but everybody would be exculpated if they could say, well, other than the ultimate

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be all and end all, top of the pyramid person, everybody else isn't speaking for the church.

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That would be inconsistent.

[00:17:32] Speaker 05:
Well, would it?

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Because in this case, if you're looking at LDS doctrine, the answer to that question is absolutely yes, he is the only person.

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And it's not agency law, it's religious law.

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And I don't understand how you can determine by applying common agency law to what LDS doctrine is.

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And if you're trying to get into LDS doctrine, it seems to me that the First Amendment bars us to consider it.

[00:18:00] Speaker 05:
Isn't that right?

[00:18:01] Speaker 03:
and respectfully know, Your Honor.

[00:18:03] Speaker 03:
If we look at the record here, the representations that were made, starting with President Hinckley, where it may have been qualified, but continuing.

[00:18:11] Speaker 05:
It was qualified in your counsel.

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I mean, your client apparently recognized that.

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He understood it.

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He heard it.

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He saw that President Hinckley was saying, you got tithing and you got

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and from the earnings of entities owned by the church.

[00:18:31] Speaker 05:
The church has shown by the record, as I understand it, that that's all that was being used to do the city development, City Creek.

[00:18:39] Speaker 03:
that is the church's position, Mr. Huntsman's declaration.

[00:18:42] Speaker 03:
Isn't that what the record shows?

[00:18:43] Speaker 03:
No, Mr. Huntsman's declaration, if we look at the record at page 44 to 45, he doesn't differentiate.

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He just took Mr. President Hinckley at his word.

[00:18:53] Speaker 03:
And if we look at the qualification of Mr. Hinckley, meaning not his qualifications to be the president, but the qualifications of his statement that

[00:18:59] Speaker 05:
Okay, if he took him at his word, then you take the first statement, then he would understand what President Hinckley was talking about, right?

[00:19:06] Speaker 03:
The issue here, Your Honor, is we can take that.

[00:19:08] Speaker 03:
We don't have to, if the Court is so inclined not to look at the subsequent four statements, if to take Your Honor's

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position, as I understand it, that President Hinckley is the be-all and end-all.

[00:19:20] Speaker 03:
And we just look at his statement, and we look at how his statement has been explained in the record as he was referring purely to principle.

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That does not change the ultimate disposition of this case.

[00:19:31] Speaker 05:
Who said that he was just referring to principle in the first talk?

[00:19:35] Speaker 05:
I'm sorry, Your Honor?

[00:19:36] Speaker 05:
Who says that President Hinckley in his first remarks was just referring to principle?

[00:19:42] Speaker 03:
The church, your honor.

[00:19:43] Speaker 05:
The church says that?

[00:19:44] Speaker 03:
The church has differentiated in their papers between the principal donations made by members and the interest generated by the investment of that project.

[00:19:54] Speaker 05:
And that's exactly what I'm saying.

[00:19:56] Speaker 05:
President Hinckley made that clear.

[00:19:57] Speaker 02:
Counsel, I want to ask a question on a different matter.

[00:20:01] Speaker 02:
I guess, what's your best case to support that there was a misrepresentation here, or that there was a factual dispute regarding the misrepresentation?

[00:20:11] Speaker 02:
Especially given that the church told its members that it would fund them all with earnings on invested reserves.

[00:20:24] Speaker 02:
It appears that that's what occurred, so I wanted to give you a chance to address that.

[00:20:29] Speaker 03:
And respectfully, Your Honor, we disagree that the record shows that's what occurred.

[00:20:33] Speaker 03:
What we have in the record is the church's testimony.

[00:20:37] Speaker 03:
And again, let's take, so we're not delving into meanings, let's take President Hinckley's after the fact explanation in the record as to what he meant principle.

[00:20:45] Speaker 03:
Let's look aside for a moment for the issue of interest.

[00:20:48] Speaker 03:
Let's just look at the principle.

[00:20:50] Speaker 03:
We have sworn testimony from David Nielsen stating, and this is in the record at pages

[00:20:59] Speaker 03:
80 through 82, stating that principal tithing funds were used to fund City Creek Mall, and that beyond that, principal tithing funds were also commingled with the earnings on the principal.

[00:21:12] Speaker 03:
However, he's clear that even without looking at the commingling, principal tithing funds, and this goes to Judge Smith's question as well, it has to do, and this is my second point, with inferences.

[00:21:26] Speaker 03:
We are on summary judgment.

[00:21:29] Speaker 03:
Despite all the First Amendment and 14th Amendment and constitutional issues, if we really look at what we're talking about here in the posture of this case, which is what's on appeal, we are at summary judgment and on summary judgment.

[00:21:44] Speaker 03:
of Mr. Huntsman's evidence must be taken as true and all reasonable inferences must be drawn in favor.

[00:21:49] Speaker 09:
Council, I'm sorry to interrupt you.

[00:21:51] Speaker 09:
Before you run out of time altogether, I want to give you a chance to address the diversity jurisdiction because my concern is I'm not sure on this record without further factual findings by this court, which wouldn't be appropriate that there's enough to determine his domicile.

[00:22:07] Speaker 09:
As you know, the burden is on Mr. Huntsman to demonstrate diversity jurisdiction.

[00:22:11] Speaker 09:
He moved to California shortly before the lawsuit was filed, but his company had a filing with the state of California that has the Utah address.

[00:22:22] Speaker 09:
So to figure out domicile involves an evaluation of a lot of facts and a lot of them doesn't appear to be on the record.

[00:22:31] Speaker 03:
I appreciate that, Your Honor, and if I may respectfully put a pin in my answer, I will come back in about 45 seconds to the inferences.

[00:22:37] Speaker 02:
I have a follow up for you as well.

[00:22:39] Speaker 03:
Fantastic, Your Honor.

[00:22:41] Speaker 03:
To Judge Winn's question, if we look, as you've recognized in the record, at 213 and 214, what we know, which in and of itself is a far cry from the facts of Lou V. Moss, we know that Mr. Huntsman moved his family to California in October of 2020.

[00:22:57] Speaker 03:
We know this case was filed in March of 2021.

[00:23:01] Speaker 03:
We know Mr. Huntsman moved to California to be closer to his business, which is located, notwithstanding where it may be registered, but it's located, it's offices in California.

[00:23:12] Speaker 03:
We know Mr. Huntsman came here for

[00:23:14] Speaker 03:
He wanted to be closer to the ocean, he said, too.

[00:23:17] Speaker 03:
And we know that at the time that the case was filed, there's no indication, unlike in Louis V. Moss, that Mr. Huntsman had any intention to be anywhere else.

[00:23:25] Speaker 03:
And if we look at the circuit's decision in Mondragon B Capital One auto finance, this circuit contemplated, without applying it there because the facts were different,

[00:23:34] Speaker 03:
that a court may treat a party's residence as a presumption of domicile.

[00:23:41] Speaker 03:
In fact, other circuits have done that.

[00:23:42] Speaker 09:
Actually, under Louis V. Maas, the presumption is in favor of his established domicile, which is Utah.

[00:23:48] Speaker 09:
So I'm trying to figure out whether he overcame that presumption with what's currently in the record.

[00:23:55] Speaker 09:
He obviously has the ability to have homes in a lot of different places.

[00:23:59] Speaker 09:
And I know his business, Blue Fox Entertainment, had a California address, but the filing actually listed.

[00:24:05] Speaker 09:
his personal address as a Utah address.

[00:24:08] Speaker 09:
So there's just a lot of given the timing of it.

[00:24:11] Speaker 09:
Uh, my concern is that the presumption should have been triggered and the district court, we would have benefited from findings by the district court, but neither party really raised this issue below and, and, uh, the district court didn't, uh, Sue Esponte examined this issue.

[00:24:26] Speaker 03:
And we agree, your honor.

[00:24:27] Speaker 03:
Well, of course the court could Sue Esponte address it.

[00:24:30] Speaker 03:
It was never challenged by the court.

[00:24:32] Speaker 03:
Therefore, there was never any response by Mr. Huntsman.

[00:24:34] Speaker 03:
And until this panel had raised the issue, it's never been in dispute.

[00:24:37] Speaker 03:
That said, we would welcome, if there's concerns by this panel that necessitate a remand to the district court on the limited issue of domicile, we'd welcome the opportunity to clarify the record, put in the evidence either through declarations or documents or depositions on that issue.

[00:24:54] Speaker 03:
That would not be a problem.

[00:24:56] Speaker 03:
And so it is a resolvable issue either through the presumption based on what's in the record already, which again is not like Louvy Moss where the person was living in hotels in the challenged domicile at the time.

[00:25:07] Speaker 03:
This is Mr. Huntsman was living in California, had his family here, moved here.

[00:25:13] Speaker 03:
I see a question.

[00:25:13] Speaker 08:
Yes, sorry.

[00:25:14] Speaker 08:
Thank you, counsel.

[00:25:15] Speaker 08:
Do you have a position on whether or not the church autonomy doctrine is jurisdictional or not?

[00:25:20] Speaker 08:
I mean, it's an important question, because whether or not we could skip right to the fraud analysis, or do we have to address this question of the First Amendment?

[00:25:28] Speaker 03:
Your Honor, it is jurisdictional insofar as conceptually a Article III court cannot, I'm not aware, maybe there is a case that states it in terms of specific jurisdiction, but conceptually, yes.

[00:25:42] Speaker 08:
Watson does say jurisdiction, but that was like over 100 years ago, so I'm just wondering if that, yeah.

[00:25:46] Speaker 03:
Understood, and recently,

[00:25:48] Speaker 03:
Conceptually, perhaps yes, insofar as if a church has to delve into issues of doctrine, the church cannot do so.

[00:25:57] Speaker 03:
But to address the issue here, it would be, it's a moot point because our position is, again, not our position, but the position of every judge has looked at it so far, is that this is secular.

[00:26:09] Speaker 03:
And again, it just gets back to- Can I ask you just on this point?

[00:26:14] Speaker 01:
One question one would have looking at the lawsuit is whether, if this lawsuit is allowed, would it invite a flood of lawsuits by people who become disillusioned with their religion?

[00:26:25] Speaker 01:
Because many people are religious or belong to a religious organization and decide that it's not for them.

[00:26:32] Speaker 01:
And in this case, the speech that we're speaking of is really more of a sermon.

[00:26:36] Speaker 01:
If this case goes forward, are we going to have situations in which lots of people are suing their church or their synagogue or something else, asking us to resolve claims of religious nature?

[00:26:48] Speaker 03:
Your Honor, I see my time once we take into account rebuttal has run, and I would like to have time to respond to Mr. Clement.

[00:26:54] Speaker 03:
I'd be happy to answer your question, but I just wanted to- But you should go ahead and answer Judge Fletcher's question.

[00:26:58] Speaker 03:
Yes.

[00:26:58] Speaker 03:
So the answer to the question is no.

[00:27:01] Speaker 03:
The precedent set here is very, very limited.

[00:27:05] Speaker 03:
If we find, and again, this goes to the slippery slope, and in fact, if we just say, had Judge Fletcher's prior opinion not been vacated,

[00:27:11] Speaker 03:
It would have had no impact whatsoever on how the church or any other religious organization practices its religion.

[00:27:18] Speaker 03:
The only precedent set by that opinion, now vacated, or by this Court's opinion, if it's reinstated, is that a church in this circuit cannot lie about how it intends to spend the donations of its congregants.

[00:27:32] Speaker 03:
And so if that's the precedent that's set, we would submit that's a

[00:27:35] Speaker 03:
proper precedent.

[00:27:37] Speaker 03:
It's not inconsistent with doctrine.

[00:27:39] Speaker 03:
It doesn't require an analysis of doctrine.

[00:27:42] Speaker 03:
It is secular, the same way it was secular in Rashid, the same way it was secular in every case thus far that's looked at the issue of fraud, not employment decisions.

[00:27:54] Speaker 03:
Your Honours, I'd like to reserve your time.

[00:27:56] Speaker 03:
Just very quickly,

[00:27:58] Speaker 03:
In conclusion, tithing is a religious practice.

[00:28:01] Speaker 03:
Fraud is not.

[00:28:02] Speaker 03:
To hold otherwise would open up the floodgates to a litany of serious civil torts, no longer being punishable.

[00:28:08] Speaker 03:
Thank you, Your Honor, as I respectfully reserve my time.

[00:28:24] Speaker 07:
Good afternoon, Your Honors, and may it please the Court, Paul Clement, for the appellees.

[00:28:28] Speaker 07:
There are at least two fundamental problems with the fraud claimed by a former church member against his church year.

[00:28:35] Speaker 07:
First, there's no misrepresentation.

[00:28:37] Speaker 07:
The leader of the church explained that financing for a particular project would come from two buckets of church money

[00:28:44] Speaker 07:
and not from a third.

[00:28:46] Speaker 07:
And that is exactly what happens as the record reflects.

[00:28:49] Speaker 07:
Second, and even more fundamentally, this kind of tithing refund claim is barred by the church autonomy doctrine of the First Amendment.

[00:28:58] Speaker 07:
This case ultimately boils down to the question of what a church leader meant and what a church member understood when the former talked about tithing funds in contradistinction to earnings on invested reserve funds.

[00:29:12] Speaker 09:
Council, can I ask you something, because you had briefed and argued this case as first and foremost, no trial will question a fact, summary judgment should have been granted, and secondarily, the First Amendment.

[00:29:24] Speaker 09:
But I would have thought that, given the church autonomy doctrine, that the arguments would go the other way in terms of the order.

[00:29:31] Speaker 09:
So I'm curious to see what your response is as to why the defense has set up the arguments that way.

[00:29:39] Speaker 09:
And secondarily, assuming that the church autonomy doctrine doesn't stand in the way of reaching the summary judgment issue, there is still the declaration of Mr. Nielsen indicating that funds were co-mingled.

[00:29:52] Speaker 07:
So the two questions, let me try to answer them in turn.

[00:29:56] Speaker 07:
Look, I think it's a challenge for a church when they feel they are falsely accused of fraud in the context of the church leader speaking to the flock.

[00:30:07] Speaker 07:
It's a bit of a conundrum.

[00:30:08] Speaker 07:
Do you try to essentially clear the church's name by saying there's absolutely no misrepresentation here?

[00:30:15] Speaker 07:
Even if this were a completely secular case, there'd be no there there.

[00:30:19] Speaker 07:
Or do you say instead, this is the religious autonomy doctrine, the church autonomy doctrine?

[00:30:24] Speaker 07:
I think in fairness, the church was so convinced that there is just no there here that it essentially wanted to clear its name and say, look, the easiest way to decide this case is to decide that there's absolutely no misrepresentation here at all.

[00:30:41] Speaker 09:
That's where I figured the answer was.

[00:30:42] Speaker 09:
But now then, on summary judgment, you want us to go there first.

[00:30:46] Speaker 09:
There is the declaration saying that the funds were co-mingled.

[00:30:49] Speaker 09:
So why doesn't that create a triable question of fact for the jury?

[00:30:52] Speaker 07:
It absolutely doesn't, Your Honor, because the fact that the funds may have been commingled for some purposes makes absolutely no difference under the secular law or under the church understanding of what President and Prophet Hinckley said.

[00:31:07] Speaker 07:
I mean, it may well be that the people that worked at Ensign Peak looked at all the funds under their management

[00:31:15] Speaker 07:
which at some broad level, like all church funds, probably came from the faithful.

[00:31:19] Speaker 09:
The fact that they looked at all of those funds as in some sense sacred, as some sense the widows might, as some- Maybe I'm misunderstanding something because I thought the President Hinckley's statement was that no tithing funds will be used, but that earnings from reserves would be.

[00:31:36] Speaker 09:
But in a commingling situation, then there may be an issue as to how that's teased apart.

[00:31:42] Speaker 07:
But here's the thing, Your Honor.

[00:31:44] Speaker 07:
I mean, they may have been commingled for purposes of making an investment, but there was very careful record keeping.

[00:31:51] Speaker 07:
They were not commingled for accounting purposes.

[00:31:53] Speaker 07:
And what the record here reflects in an irrefutable way is that the funds for this project that started out with $1.2 billion on January 1, 2004, and then were segregated from all other funds, that $1.2 million came from

[00:32:12] Speaker 07:
in earnings on investment returns exclusively.

[00:32:15] Speaker 07:
And that is the unrebutted testimony, unrefuted testimony of Mr. Writing, and that's in his declaration in paragraph 14, and that's in excerpts of the record 538.

[00:32:27] Speaker 02:
So everything that was used for— I just want to follow up on this, because it seems that Mr. Huntsman is arguing that the church was fraudulently misleading because it did not speak with sufficient clarity about how it would use these ties.

[00:32:47] Speaker 02:
And so I'm just trying to figure out, why is he wrong?

[00:32:52] Speaker 02:
given that the 1991 and 1995 statements that are in the record point to several years removed and are not referenced within the 2003 statement.

[00:33:11] Speaker 07:
So, I mean, two things, Your Honor.

[00:33:13] Speaker 07:
First, to the extent we're saying, as Judge Fletcher did for the now vacated opinion, that the problem here is that the head of the church

[00:33:22] Speaker 07:
didn't speak with sufficient precision when addressing the faithful about tithing, I think that's why this is a First Amendment problem.

[00:33:29] Speaker 07:
But I don't actually think, in the President and Prophet's defense, I actually think in 2003, even if you look at that document in isolation, he spoke with sufficient precision.

[00:33:40] Speaker 07:
Because he is in a way that some of the ensign-peak employees at a later time are not.

[00:33:45] Speaker 07:
He's talking about three different buckets of money, and he is distinguishing among and between those three buckets.

[00:33:52] Speaker 07:
And he says, okay, the church has some earnings from commercial ventures.

[00:33:56] Speaker 07:
And that corresponds to the fact that there was $150 million from an entity called PRI that's the church's sort of real estate arm that's used as some of the seed money for this.

[00:34:06] Speaker 07:
So he talks about that bucket.

[00:34:07] Speaker 07:
Then he talks about another bucket that's distinct, which is, and I want to quote him directly, the earnings on invested reserve funds.

[00:34:15] Speaker 07:
And then he talks about a third bucket, which is tithing.

[00:34:18] Speaker 07:
Now, in a context where you're talking about those three buckets, I think it is clear

[00:34:23] Speaker 07:
even without the 91 statement, even without the 95 statement, that those earnings on invested reserve funds are different from tithing, which is, in the context of that distinction, more of the ongoing annual tithing of the faithful.

[00:34:38] Speaker 07:
And the only sort of contradiction here is the testimony in the Nielsen Declaration.

[00:34:44] Speaker 07:
which is all of three pages long, so I invite you to read it.

[00:34:46] Speaker 07:
It is not particularly damning.

[00:34:49] Speaker 07:
But he says, well, when they were working at Ensign Peak, they talked about all their funds, which included current year tithing funds and earnings on invested reserve funds.

[00:34:58] Speaker 07:
They talked about all of them as tithing.

[00:35:00] Speaker 00:
Council, I would like to essentially piggyback on Judge Bumate's question about the First Amendment abstention doctrine.

[00:35:07] Speaker 00:
And if we, if I understand your argument to have been that if we were to agree with the district court in the sense

[00:35:15] Speaker 00:
in the now vacated three judge opinions, reasoning on the merits of the fraud claim that there was no need to abstain, but that it's only when you don't agree that you start to get into church doctrine and then there is a need to abstain.

[00:35:33] Speaker 00:
As a matter of abstention doctrine as versus the pragmatic concern you mentioned before, is that still your position that that is doctrinally correct?

[00:35:43] Speaker 07:
So I don't think we, I'm not aware that we took a position on that before.

[00:35:47] Speaker 07:
Let me tell you what my position is.

[00:35:49] Speaker 07:
And this is just my effort to be helpful to the court.

[00:35:52] Speaker 07:
I mean, you know, it might be tempting for me to say, yeah, it's jurisdictional and we really would love you to decide the first amendment question right now, but I don't think that's right.

[00:36:00] Speaker 07:
And I think there was a lot of confusion in the courts before Hosanna-Tabor, but in footnote four of Hosanna-Tabor,

[00:36:09] Speaker 07:
the Supreme Court clearly labels the ministerial exception as an affirmative defense.

[00:36:15] Speaker 07:
And then a few years later in Our Lady of Guadalupe, they say that the ministerial exception is just a subspecies of the church autonomy doctrine.

[00:36:25] Speaker 07:
So I think if you put the Supreme Court's two latest pronouncements on this question together, you are left with the inescapable conclusion that this is not

[00:36:34] Speaker 07:
jurisdictional.

[00:36:35] Speaker 07:
It is an affirmative defense.

[00:36:36] Speaker 07:
And that is, I should just add parenthetically, that is the virtue of courts being coherent and true.

[00:36:41] Speaker 07:
There's nothing about Article 3 about the church abstention doctrine.

[00:36:45] Speaker 05:
Can I just change the focus a little bit?

[00:36:48] Speaker 05:
The church primarily defends itself on secular grounds on the basis that it was very clear what President Hinckley said at the beginning.

[00:36:56] Speaker 05:
when you look at what he said, when you look at what the accounting record showed, and the fact that the former employee of Enson Peak wasn't there when this allegedly occurred, that it doesn't really matter what the employee said, they weren't the profit.

[00:37:09] Speaker 05:
What I don't understand is why the definition of tithing funds, by definition, doesn't run into a First Amendment problem.

[00:37:19] Speaker 05:
If the First Amendment

[00:37:21] Speaker 05:
basically eclipses this.

[00:37:22] Speaker 05:
We don't even get into summary judgment issue.

[00:37:25] Speaker 05:
We never get to it at all.

[00:37:27] Speaker 05:
Why did the church take the position that this was just secular?

[00:37:31] Speaker 07:
So I don't think the church ever took the position this was secular.

[00:37:34] Speaker 07:
Not just my reading.

[00:37:36] Speaker 07:
Right, no.

[00:37:36] Speaker 07:
I think they took the position that there was no misrepresentation here at all.

[00:37:42] Speaker 07:
And as I alluded to, I mean, I think that's actually an understandable temptation for any church when it's accused of fraud or misconduct.

[00:37:50] Speaker 07:
because obviously it's important to the church to be above board, holier than thou, whatever phrase you want.

[00:37:56] Speaker 07:
And so there's just this temptation to say, we did nothing wrong.

[00:38:00] Speaker 07:
Now, I think... I get that.

[00:38:02] Speaker 05:
I get that.

[00:38:03] Speaker 05:
I'm just saying, since you're dealing with your colleague over there, he's saying, hey, look, this is just a sort.

[00:38:10] Speaker 05:
It's a tort.

[00:38:11] Speaker 05:
We think it's all secular.

[00:38:13] Speaker 05:
You seem to say it's secular.

[00:38:15] Speaker 05:
It all comes down to who said what, when and where.

[00:38:18] Speaker 05:
It's a material issue of fact.

[00:38:21] Speaker 05:
But if you have a focus on what the tithing means, then you run into the religious protection issue, which you never get to the other one.

[00:38:30] Speaker 07:
Help me with that, please.

[00:38:32] Speaker 07:
I'm happy to help you.

[00:38:34] Speaker 07:
I guess what I would say is, I think, ultimately, the temptation that this church or any church has

[00:38:40] Speaker 07:
to defend itself as if it were a secular entity is maybe upon reflection the best reason to apply the religious autonomy doctrine at the threshold and just say, we're not going to put churches in this position because we're going to make it crystal clear that when a member or former member of the church sues for a tithing refund absent unusual circumstances, and I think there probably are exceptions for

[00:39:05] Speaker 07:
embezzlement or cases that would be different, where it's not general tithing, but it's a specific representation for a particular purpose, then the funds are diverted.

[00:39:14] Speaker 05:
And there's nothing in this case, if I understand correctly.

[00:39:16] Speaker 05:
Nobody's claimed that the church had a Ponzi scheme.

[00:39:20] Speaker 05:
Nobody claimed that some person enriched themselves or provided jewels and so on for somebody.

[00:39:27] Speaker 05:
This is strictly an issue of the president of the church, who by all these people is the person

[00:39:35] Speaker 05:
The authorized person says what it meant.

[00:39:38] Speaker 05:
It didn't change.

[00:39:40] Speaker 05:
Mr. Huntsman apparently read that, understood that, if I gather.

[00:39:44] Speaker 05:
He's taken the later four statements.

[00:39:46] Speaker 05:
He says, well, that's confusing.

[00:39:48] Speaker 05:
Well, it's not him to decide, right?

[00:39:49] Speaker 05:
Otherwise, you have lay people deciding what the doctrine of the church is.

[00:39:53] Speaker 05:
And that, to me, gets back to the church autonomy doctrine, which maybe should be governing this case.

[00:40:00] Speaker 07:
I don't disagree.

[00:40:02] Speaker 07:
I think the church autonomy doctrine squarely covers this case.

[00:40:05] Speaker 07:
In my opening, I was going to give you two sentences on whether there was no misrepresentation.

[00:40:09] Speaker 07:
And then I was planning to talk to you about the church autonomy doctrine for the balance of the time.

[00:40:14] Speaker 10:
So if we were to go with the church autonomy doctrine and rationale, it sounds like you were starting to say that there would be still some cases that could be brought.

[00:40:21] Speaker 10:
And I'd like to hear more about that, like a hypothetical where there's been some tragedy, there's a fire in the next town and now you've got orphans.

[00:40:29] Speaker 10:
because their parents were killed in the fire.

[00:40:31] Speaker 10:
And the church says, we're collecting for these kids, everything in this basket will go to the kids.

[00:40:36] Speaker 10:
And then they spend the money on new clothes for the minister.

[00:40:40] Speaker 10:
Is that a case that could still be brought under your?

[00:40:43] Speaker 07:
Under my view, that is a case that can still be brought and essentially doubly so.

[00:40:48] Speaker 07:
Because the way I would sort of think about this area of the law is you start with the presumption that the religious autonomy doctrine applies.

[00:40:55] Speaker 07:
But there are exceptions, the two exceptions

[00:40:57] Speaker 07:
that I think have been recognized by the courts over the years is one, call it embezzlement, just call it whatever it is ends up in the church leader's pocket.

[00:41:08] Speaker 07:
And then the second situation, which I think is different, and I think you could allow the claims to proceed without running afoul of the doctrine, is where it's not general tithing, it is a specific solicitation for a specific purpose, and then the funds are diverted.

[00:41:23] Speaker 07:
And I think that that latter case is different largely because a whole second problem, and I believe Judge Bress alluded to this in one of his questions, but a whole separate problem under the church autonomy doctrine with this claim is with the reliance element.

[00:41:38] Speaker 07:
Because when it's tithing from the church's perspective and from the perspective of a faithful adherent, that is a commandment, that is a scriptural commandment to give 10% of

[00:41:51] Speaker 07:
your earnings or your increase or your income that is really wholly independent of what the church does with it.

[00:41:58] Speaker 07:
And that's not the case, obviously, when it's a solicitation for everything in this basket is going to go to hurricane relief in a particular place.

[00:42:05] Speaker 10:
Are there limits to that, though?

[00:42:06] Speaker 10:
So say it's a Catholic church that has always said we're against abortion and they collect tithes.

[00:42:12] Speaker 10:
And then they say we would, of course, never support abortion.

[00:42:15] Speaker 10:
And then they collect a bunch of money and they pay for abortions with it.

[00:42:18] Speaker 10:
Could you sue?

[00:42:19] Speaker 07:
I don't think you could.

[00:42:20] Speaker 07:
I think that's a hard case.

[00:42:21] Speaker 07:
It's a hard hypothetical.

[00:42:22] Speaker 07:
I understand it.

[00:42:23] Speaker 07:
But I think in that kind of general tithing thing, you know, you might be able to leave the church over it, but I don't think you can get a refund under those circumstances.

[00:42:33] Speaker 10:
And why not?

[00:42:34] Speaker 10:
That's because there's some religious ambiguity about what abortion means or what would be the reason.

[00:42:39] Speaker 07:
Well, I mean, I think of it this way.

[00:42:40] Speaker 07:
I mean, one reason might be that the church might change its doctrine on the on the issue and you'd still have these refund claims.

[00:42:47] Speaker 07:
And I think if you go down that route, you know, all of a sudden, I mean, you know, in the secular context, the SEC's developed the safe harbor for forward looking statements.

[00:42:55] Speaker 07:
And I just hate for this court to have to impose that on religious leaders.

[00:42:59] Speaker 07:
when they talk to their flock.

[00:43:01] Speaker 07:
And that's exactly what this is.

[00:43:02] Speaker 07:
This statement 2003 is a forward-looking statement.

[00:43:06] Speaker 07:
It says no tithing funds will be used for this purpose.

[00:43:10] Speaker 07:
Now, it turns out that under President and Prophet Hinckley's definition, that's exactly what happened.

[00:43:16] Speaker 07:
But if that changed for some reason, would that be a basis for somebody to get a refund?

[00:43:21] Speaker 07:
Would it be a basis for the courts to be, even in the hard hypothetical you gave me, you'd still have this problem of the Catholic parishioner coming in and saying, well, I would have never given my money if I knew that was going to happen.

[00:43:35] Speaker 07:
And then the church would be saying, well, that's not right.

[00:43:37] Speaker 07:
You actually as an adherent Catholic, you have an obligation, a commandment to give tithing as well.

[00:43:44] Speaker 07:
And so there's a jury question over whether or not there was actual or reasonable reliance in this case.

[00:43:51] Speaker 07:
I suppose if you were really going to adjudicate this, you could have one side bring in an expert on Catholic church doctrine.

[00:43:56] Speaker 07:
You could have another side bring in an expert on actual practice of Catholics when it came to the collection basket.

[00:44:01] Speaker 07:
And then you throw it all to the jury.

[00:44:04] Speaker 07:
I think that's a pretty good explanation for why the church autonomy doctrine would apply even in that hard hypo.

[00:44:09] Speaker 04:
Can I ask you a question about commingling?

[00:44:14] Speaker 04:
If, and I don't know if this is a church's position, but if the funds from tithing went into Ensign's bank account and then the earnings were accrued in that, and so it's commingled, but if the church establishes that the earnings themselves far exceeded the investment that would go into the City Creek project,

[00:44:39] Speaker 04:
Is that the church's position as to why there's no misstatement?

[00:44:43] Speaker 04:
Because even if there's a co-mingling of the funds, the earnings themselves are more than sufficient to cover the cost of the investments, and therefore, that's why President Hinckley did not misstate anything.

[00:44:55] Speaker 04:
Is that the church's position?

[00:44:57] Speaker 07:
Well, if those were the facts, I think that would be the church's position.

[00:45:01] Speaker 07:
But the facts are even better for the church because there was not co-mingling for accounting purposes.

[00:45:09] Speaker 07:
And indeed, after January 1, 2004, the record clearly shows that money was set aside for this project.

[00:45:19] Speaker 07:
$1.2 billion was set aside specifically for this project.

[00:45:24] Speaker 07:
And then that was always treated separately.

[00:45:26] Speaker 07:
There's an account that shows every withdrawal from that account.

[00:45:30] Speaker 07:
It shows that that was basically drew down on until March of 2012, where at the end, there was still $151 million in there.

[00:45:38] Speaker 07:
So, and then we have testimony from writing, that's paragraph 15 that I've already alluded to, that says that that $1.2 billion came exclusively from earnings on reserve funds.

[00:45:50] Speaker 07:
So, under this record, I don't have to, you know, and this is something else that you'd get into if you got to the reliance element.

[00:45:58] Speaker 07:
I mean, at a certain point, money is fungible.

[00:46:01] Speaker 07:
And so if the church hadn't been as careful in its accounting, I think I would still be up here saying, like, what are we talking about?

[00:46:10] Speaker 07:
In year 2003 alone, the church had earnings on reserve funds that were well in advance on anything they spent on this project.

[00:46:19] Speaker 07:
And so there's just no issue that they had to go into.

[00:46:23] Speaker 04:
Is it your view that the Nielsen Declaration does not create a genuine issue?

[00:46:27] Speaker 04:
Because even if Ensign used shorthand to say it's all tithing, that doesn't make it so.

[00:46:33] Speaker 04:
It's what the church is saying that is what's important for purposes of this distinction between

[00:46:39] Speaker 04:
earnings versus the principle.

[00:46:42] Speaker 07:
Absolutely.

[00:46:43] Speaker 07:
And Judge Smith was alluding to that earlier, but there's only one person that can speak authoritatively for the church on the meaning of tithing, and that is the president and the prophet Hinckley.

[00:46:54] Speaker 07:
And so if other people in the church are using loose language, that is just irrelevant as a legal matter.

[00:46:59] Speaker 07:
I just have to add, though, even in a secular setting, I can imagine the same thing, because President Hinckley is being very specific about three buckets.

[00:47:08] Speaker 07:
And in that context, he describes one of the three buckets as tithing.

[00:47:12] Speaker 07:
If somebody else in another context is not differentiating between three buckets and is just talking about one bucket and describes it as tithing.

[00:47:21] Speaker 07:
I mean, look, try to find a simple secular example, but there's blueberries and then there are blueberries.

[00:47:26] Speaker 07:
Not all berries that are blue are blueberries.

[00:47:28] Speaker 07:
And so if somebody's talking about that in one context and they very specifically distinguish between blueberries and black raspberries and blue raspberries, well, then you'd understand it one way.

[00:47:37] Speaker 07:
And if somebody else is saying, oh, they're all blueberries, you wouldn't think that was a fraud claim.

[00:47:41] Speaker 07:
And at some level, that's all that we have here.

[00:47:44] Speaker 08:
Can you explain why we're carving out embezzlement from the church autonomy doctrine?

[00:47:48] Speaker 08:
It seems like it'd be the same interest.

[00:47:50] Speaker 08:
Are you saying there's a text in history of that or something of that nature?

[00:47:55] Speaker 07:
When the courts have come up with something that is that egregiously self-dealing, and that's really this court's decision in Rashid.

[00:48:04] Speaker 07:
I think what the courts have done, maybe call it a cheat, but what they've done is they've said there's a sincerity problem.

[00:48:12] Speaker 08:
And that's the way they've sort of been carving out embezzlement, though.

[00:48:15] Speaker 07:
It comes to the same thing at the end of the day.

[00:48:16] Speaker 07:
And not every court has gone the sincerity route.

[00:48:20] Speaker 07:
But that's the way I think the courts have mostly approached that.

[00:48:23] Speaker 07:
I also think that the reason maybe they're sort of joined at the hip is, at a certain point, the reliance question, I think, becomes more straightforward.

[00:48:33] Speaker 07:
when very few people are actually going to give money to the church if they just think it's going to be embezzled.

[00:48:39] Speaker 02:
You said you were going to start out by saying there was no misrepresentation here.

[00:48:45] Speaker 02:
and then go into the church autonomy doctrine.

[00:48:50] Speaker 02:
Are you suggesting that is the way we can resolve this, is just say there's no misrepresentation and end it there?

[00:48:58] Speaker 07:
That is a way you could resolve this case, and you could say not one word about the religious autonomy doctrine, and I would be happy to win this case for my client on that ground alone.

[00:49:07] Speaker 09:
Can you talk about the, sorry, go ahead Judge Freeland.

[00:49:10] Speaker 10:
Could I just go back to, so the hypo, I think you said there were two things.

[00:49:12] Speaker 10:
So there's the fire and you've got kids who have no parents and they say this basket of money is going to go to those kids.

[00:49:18] Speaker 10:
Let's get rid of the clothes for the priest and say instead they spend it just on a hurricane somewhere else.

[00:49:25] Speaker 10:
Is that a claim?

[00:49:26] Speaker 07:
I think that's a claim.

[00:49:27] Speaker 07:
But because I think that's a distinguishable situation where it's a solicitation for a particular reason.

[00:49:34] Speaker 07:
And if those funds are diverted to something else, I think that's a different I think that's that's a claim that you could bring.

[00:49:39] Speaker 10:
And I don't think just embezzlement.

[00:49:41] Speaker 07:
No, no.

[00:49:41] Speaker 07:
Yeah, right.

[00:49:42] Speaker 07:
I took the question to be

[00:49:44] Speaker 07:
In some respects, it's harder to explain the embezzlement exception than it is the specific solicitation diversion.

[00:49:51] Speaker 07:
At least, I find it harder to explain the embezzlement exemption, but it's there in the cases.

[00:49:58] Speaker 07:
And I do think, as I say, whether you call it a little bit of a cheat or you just understand it as a unique situation where there's just no real practical difficulty in proving reliance.

[00:50:09] Speaker 05:
And in this case, there is no allegation, I gather, of a specific request

[00:50:14] Speaker 05:
to use tithing for this specific fund.

[00:50:17] Speaker 05:
That's the church's position, right?

[00:50:19] Speaker 07:
That is the church's position.

[00:50:20] Speaker 07:
And one of the things that makes this case so extraordinary, of course, is that we're so far away from these other examples because the church was completely forthright that it was going to use church money for this particular purpose.

[00:50:33] Speaker 07:
And then the president added, I suppose

[00:50:37] Speaker 07:
gratuitously and maybe unfortunately in hindsight.

[00:50:40] Speaker 07:
All right, but I'm going to be clear, there's three buckets of church money that we could use and we're only going to use two buckets.

[00:50:45] Speaker 07:
We're not going to use the third bucket for this purpose.

[00:50:47] Speaker 05:
So in this case where if the church takes the position, he's the president of the church, the prophet.

[00:50:54] Speaker 05:
And church members are asked to contribute tithing based on worthiness.

[00:50:59] Speaker 05:
They only get to go to the temple if they do that.

[00:51:01] Speaker 05:
They're supposed to get certain blessings.

[00:51:02] Speaker 05:
There's never any discussion about how it's going to be used in church doctrine.

[00:51:07] Speaker 05:
So if you have that situation, and you get back to what was actually said by President Hinckley, you don't have the example that you give where they said, we'd like you to contribute some money for this, and we're going to use it for this.

[00:51:23] Speaker 05:
which is contrary to the normal doctrine, and that answers, I think, my colleague's question.

[00:51:27] Speaker 05:
If there's a specific request to use money for X and they don't use it for X, that might be different.

[00:51:33] Speaker 05:
But that's not the way tithing is solicited, is it?

[00:51:37] Speaker 07:
Well, yes, and tithing really isn't solicited in the same way as limited purpose funds are, which is why in describing sort of the meets and bounds of the doctrine, I would describe it as tithing refund claims are presumptively covered by the church autonomy doctrine, subject to these two exceptions, and I think that would provide

[00:51:56] Speaker 07:
a clear rule, and it would have the incidental benefit of avoiding churches from being in the dilemma that my clients were in, which is they don't want to just rely on an immunity.

[00:52:06] Speaker 07:
They've been accused of wrongdoing, and they want to defend themselves.

[00:52:11] Speaker 07:
But if you make it crystal clear that there's a broad doctrine with two exceptions, then I think that it's much easier for churches in future cases to say, we're going to get rid of these cases at the threshold.

[00:52:22] Speaker 07:
And it also prevents the opening of floodgates.

[00:52:27] Speaker 07:
And Judge Bress asked a question about this as if it were a hypothetical.

[00:52:32] Speaker 07:
But since this panel decision, there have been multiple class actions brought against the church.

[00:52:37] Speaker 07:
And I don't think it is a problem that is limited to my client.

[00:52:42] Speaker 07:
Other churches are here as amici because they're worried about this same thing.

[00:52:46] Speaker 07:
And I think the reason they're worried about it is every church has

[00:52:51] Speaker 07:
adherents that then lose their faith now if those adherents former adherents came into court and said well I want all my money back because you know for years I was told I needed to give this money to save my immortal soul and now I've decided all that immortal soul stuff is bunk there's no afterlife this is it I want that money back I'm going to Vegas whatever like if they tried to bring that claim they would be laughed out of court of course you can't bring that kind of fraud claim

[00:53:16] Speaker 07:
where you bring in experts and say all this afterlife stuff is bunk.

[00:53:20] Speaker 07:
But there's a profound temptation in that circumstance to, you know, go back and fly speck all of the sermons and say, oh, well, you know, I was told something about abortion or I was told something about this.

[00:53:31] Speaker 07:
the City Creek project.

[00:53:33] Speaker 07:
In retrospect, I wouldn't have given my money.

[00:53:37] Speaker 07:
I want to do a secular fraud claim instead of the obviously improper religious fraud claim.

[00:53:42] Speaker 07:
I think there are good reasons to stop that threshold.

[00:53:45] Speaker 09:
Sorry to interrupt you because I know your time is running short.

[00:53:48] Speaker 09:
Can you spend a minute addressing the jurisdictional issue?

[00:53:51] Speaker 09:
Because it seems apparent to me that the Church's council

[00:53:55] Speaker 09:
were aware and just the way that they questioned Mr. Huntsman during his deposition had flagged this issue for themselves, but then it just kind of like petered out.

[00:54:05] Speaker 09:
Is there a reason for that?

[00:54:06] Speaker 09:
Is there a downside to remanding for additional factual findings by the district court before we take up the merits of the case?

[00:54:14] Speaker 07:
So, I mean, if this court can instantly reconvene the en banc panel after it sends it back to

[00:54:21] Speaker 07:
clarify what I think is true and have no reason to doubt.

[00:54:26] Speaker 07:
I mean, I don't really, you know, I barely have standing to object to that.

[00:54:30] Speaker 07:
I mean, I think if the consequences of that were that we had to go back to square one or something, you know, I think it was not the best use of this Court's resources.

[00:54:39] Speaker 07:
I guess, you know, to answer the question

[00:54:42] Speaker 07:
We asked some questions in the deposition.

[00:54:44] Speaker 07:
The answers were such that combined with the aversions in the complaint, we didn't think we had a basis to question his domicile at the point that he filed the complaint.

[00:54:54] Speaker 07:
I mean, he alleges he's a California resident.

[00:54:57] Speaker 07:
Which I know there's kind of these competing presumptions, the presumption in favor of the old sort of domicile, but there's also a presumption in favor of residents being the domicile.

[00:55:07] Speaker 07:
As my friend on the other side says, we're miles away from a situation where the only new domicile is a hotel room.

[00:55:14] Speaker 07:
And then you add to that the fact that there was a specific allegation that there's complete diversity.

[00:55:19] Speaker 07:
in the citizenships of the parties, which was a separate allegation in the complaint.

[00:55:23] Speaker 07:
I think we took all of that, everything we heard in the deposition.

[00:55:26] Speaker 07:
We did not think we had a good faith basis to question what is, you know, this is, you know, it's a weird situation in a sense because

[00:55:35] Speaker 07:
The question is ultimately, I mean, although testimony intent is not dispositive, the legal question is ultimately the intent of the person at the point at which they filed the complaint.

[00:55:46] Speaker 07:
And we don't think we have any basis to question that.

[00:55:50] Speaker 07:
And I would say maybe this is another reason why the church autonomy doctrine should apply.

[00:55:54] Speaker 07:
But, you know, puts the church in a weird position where it has to call its former member a liar, you know, at the jurisdictional threshold, which is essentially what we would have had to do if we doubted his appearance in his testimony.

[00:56:05] Speaker 08:
Can I ask a question?

[00:56:06] Speaker 08:
What are we to do with Watson, which did call it jurisdictional?

[00:56:09] Speaker 08:
I know that wasn't a constitutional case, but it does seem relevant to how we look at this now.

[00:56:16] Speaker 07:
So, you know, the Supreme Court multiple times since Watson has said that jurisdiction is a term of many meanings, too many meanings.

[00:56:25] Speaker 07:
Right.

[00:56:25] Speaker 07:
And so I think when you put that more recent observation of the Court together with what it said in Hosanna-Tabor and what they then subsequently said in Our Lady, I think as a lower court, you do not have to tie yourself to the mast of what the Court said in Watson.

[00:56:42] Speaker 07:
I think you are free looking at the Supreme Court's

[00:56:45] Speaker 08:
Although, that footnote could also be considered dicta, don't you think?

[00:56:47] Speaker 08:
What's that?

[00:56:48] Speaker 08:
That footnote in Hosanna-Taylor could be also considered dicta.

[00:56:51] Speaker 07:
I've read theories that that is dictum.

[00:56:53] Speaker 07:
I would take my chances with saying that's a holding and think that's a safer course than saying we're bound by Watson as the holding.

[00:57:02] Speaker 06:
So, counsel, in this case, if we were to resolve it, we'll call it the first ground, which is the non-constitutional ground.

[00:57:08] Speaker 06:
That would be solely a question, really, of California law, correct?

[00:57:13] Speaker 06:
You agree with that?

[00:57:14] Speaker 07:
I would agree with that.

[00:57:15] Speaker 06:
So there are a lot of other states in the country, and I'm curious, would there be other states that define fraud differently that would then, in a sense, bring this case right back to us if it was brought in Nevada or brought in Idaho or Utah?

[00:57:30] Speaker 06:
Or do you not see a difference?

[00:57:32] Speaker 07:
I don't see a material difference.

[00:57:35] Speaker 07:
There's probably some state out there that has a funky concept of fraud by omission, but I think you really don't get a fraud claim anywhere without a misrepresentation.

[00:57:44] Speaker 05:
Does the church have any sense of how many copycat cases were filed against it as a result of the original panel's decision?

[00:57:52] Speaker 07:
Well, there's been at least half a dozen, but most of those have been styled as putative class actions.

[00:57:58] Speaker 07:
And there's sufficient litigation against them that an MDL has been convened.

[00:58:01] Speaker 07:
So that's why I say the floodgates concern here is not hypothetical.

[00:58:05] Speaker 07:
It is real and it's all since the panel's decision in this case.

[00:58:10] Speaker 04:
Are they all California cases or do they vary?

[00:58:13] Speaker 07:
They're brought in multiple jurisdictions.

[00:58:16] Speaker 07:
Let me just close with one point of context here.

[00:58:20] Speaker 07:
Among the problems with this claim is not just that you can't decide it without deciding the definition of tithing.

[00:58:26] Speaker 07:
But you can't really decide it without saying that the supreme leader, the supreme religious prophet of a religion with 17 million adherents basically committed a massive fraud on his followers when he was speaking ex cathedra.

[00:58:40] Speaker 07:
Now, I don't think that proposition alone decides the case for the reasons I alluded to and the exceptions, but it sure contextualizes the case and sure makes clear that the autonomy doctrine should apply.

[00:58:50] Speaker 07:
Thank you.

[00:58:51] Speaker 02:
Thank you very much.

[00:59:01] Speaker 03:
Your Honor, I'd like to make three brief points on rebuttal.

[00:59:05] Speaker 03:
First of all, with respect to Judge Winn and Judge Smith's question on characterizing the First Amendment as really the fallback argument here, that's precisely right.

[00:59:16] Speaker 03:
What's strange about the posture here is that the church put its financials on the table.

[00:59:22] Speaker 03:
This is not a situation where the church said, we're called out for our financials.

[00:59:26] Speaker 03:
We're not giving them to you because it's First Amendment protected.

[00:59:29] Speaker 03:
The church went ahead and put its financials on the table and characterized them a certain way.

[00:59:35] Speaker 03:
And it was only when Mr Huntsman, again, who inferences must be drawn in favor of, put his own contrary declaration on the table and said, no, tithing principle funds were in fact used, that all of a sudden the church said, oh, this is a constitutional First Amendment issue up front and center was after

[00:59:54] Speaker 03:
the prior vacated decision, recognize the triable issue.

[00:59:58] Speaker 03:
So it's patently unfair, we'd submit, for the church to put their financials, and then when those financials are questioned, which again is a secular issue.

[01:00:06] Speaker 03:
It's anybody with an accounting degree, any high school student, even an elementary student who takes economics or anything, simple math.

[01:00:14] Speaker 03:
Let's count up what's in this pile, let's count up what's in this pile, and let's see if that's consistent with what we submit as a secular statement by President Hinckley about which pile was used.

[01:00:25] Speaker 03:
That's a secular issue that can create a triable issue under the summary judgment.

[01:00:31] Speaker 10:
On that one, are you saying co-mingling is combining the piles?

[01:00:35] Speaker 10:
Because the Nielsen talks about co-mingling as I read it, and I'm not sure you have evidence that there really were two piles and they took from both.

[01:00:44] Speaker 10:
You just have one pile together, right?

[01:00:45] Speaker 03:
No, Your Honor.

[01:00:46] Speaker 03:
If we look at the actual documents, and again, this is what's strange about the case.

[01:00:50] Speaker 03:
The church keeps saying the documents show, the documents show.

[01:00:53] Speaker 03:
The documents don't even mention the word tithing or tithe once.

[01:00:57] Speaker 03:
The documents are questionable.

[01:00:59] Speaker 03:
And if the case moves forward, there can be discovery and follow-up questions concerning those documents.

[01:01:04] Speaker 03:
We thought it was sufficient for the purpose of summary judgment.

[01:01:07] Speaker 03:
that a sworn testimony of somebody who has percipient knowledge, having worked for the church's financial arm, would at least create a triable issue.

[01:01:16] Speaker 03:
But there are numerous follow-up questions, not about the church's business decisions or about how they're conducting things, but simply, these are financials.

[01:01:26] Speaker 03:
Why don't they say tithing?

[01:01:28] Speaker 03:
Why don't they differentiate between principle and interest?

[01:01:31] Speaker 03:
As the Church said, these are accounting issues that you wouldn't need a doctrine expert, you would need a CPA to resolve.

[01:01:37] Speaker 03:
And to say that this is a First Amendment issue, or even that there's no triable issue of fact at this juncture, when inferences need to be drawn in favor of Mr. Nielsen and not the Church and Mr. Writing,

[01:01:50] Speaker 03:
would be to prematurely decide this case for the wrong reasons.

[01:01:54] Speaker 03:
Finally, with respect to Judge Friedland's hypothetical, your hypothetical about you're raising money for orphans and instead you're spending it for something else.

[01:02:04] Speaker 03:
And my colleague says, no, that case wouldn't be precluded by a decision in the church's favor here.

[01:02:11] Speaker 03:
To the contrary, it would.

[01:02:13] Speaker 03:
Because if it's okay here for the church to say where the money is not going to go and to do it dishonestly, then it's fine for somebody to say where the money will go.

[01:02:25] Speaker 03:
and to do it dishonestly.

[01:02:27] Speaker 03:
It's two sides of the same coin.

[01:02:28] Speaker 01:
Doesn't it turn on the baseline obligation?

[01:02:30] Speaker 01:
I mean, here the obligation is to pay money as a religious commandment, and these other hypotheticals, it's sort of like a conditional donation.

[01:02:39] Speaker 01:
I'm giving this money for this particular purpose.

[01:02:41] Speaker 01:
Do you think there's a distinction between the two?

[01:02:44] Speaker 03:
Oh, your honor, because the church in this instance set its own condition, sorry, its own secular condition on the money.

[01:02:51] Speaker 03:
The church said on five separate occasions, the money will not be used, including not one penny of this pile will be used to fund City Creek.

[01:03:02] Speaker 03:
And Mr. Huntsman relied on that.

[01:03:04] Speaker 03:
And if it turns out from the documents that even one penny was used, it was a misrepresentation, not under the First Amendment,

[01:03:14] Speaker 03:
not under the 14th Amendment, not under the church autonomy doctrine, under California neutral principles of law.

[01:03:27] Speaker 00:
to create a dispute of material effect, you're relying completely on the Nielsen Declaration and regarding the seed money for EPA.

[01:03:39] Speaker 00:
As far as I could tell, the entirety of his declaration was that according to what senior leadership of EPA informed me in 1997, EPA was formed and was seeded with tithing money.

[01:03:50] Speaker 00:
Is there anything else in the record specifically that you're relying on to create a genuine dispute of material facts regarding the source of the seeding money?

[01:04:01] Speaker 03:
it wouldn't be possible for there to be something else in the record at this juncture because there's been no ability.

[01:04:06] Speaker 03:
If we remember the posture, this was remarkably ordered to summary judgment a few months into the case at what was supposed to be a conference to discuss a discovery calendar and a trial date.

[01:04:18] Speaker 03:
None of that was done.

[01:04:20] Speaker 03:
All there was was a single deposition of Mr. Huntsman and there was a declaration from

[01:04:25] Speaker 03:
Mr. Nielsen.

[01:04:26] Speaker 03:
And if this case moves forward, which it should, there will be an opportunity to flesh that out.

[01:04:30] Speaker 03:
But to say that because the church is able to put in, again, documents that we submit don't really stand for much other than how the court chooses to characterize them, but we can't then follow up and ask what they actually stand for, consistent with Mr. Nielsen's declaration, again, on personal knowledge, as you just read, would be, again, to cut the legs of this case off prematurely.

[01:04:55] Speaker 08:
Can I ask, why doesn't sincerity fix the problem of Judge Friedland's hypothetical?

[01:05:01] Speaker 03:
It does, Your Honor, and if we look again at the sincerity doctrine here, which notably the first time it's been raised is here at oral argument.

[01:05:08] Speaker 03:
The church hasn't had a response to that point in any of its briefs.

[01:05:12] Speaker 03:
And that's because the point swings in Mr. Huntsman's favor.

[01:05:16] Speaker 03:
The issue of sincerity, again, as was held in Puri and in Rashid, is if you say,

[01:05:24] Speaker 03:
This is a commandment of God.

[01:05:26] Speaker 03:
We're going to do it this way."

[01:05:28] Speaker 03:
And you knew at the time that you said it, just like in Puri, it wasn't coming from investments that were making money because God blessed them.

[01:05:38] Speaker 03:
The money was coming just from other members, other ministers.

[01:05:41] Speaker 03:
Just like here, the money wasn't, at the time these statements were made, the money wasn't coming, at least according to Mr. Nielsen, from

[01:05:49] Speaker 03:
earnings on tithing funds, it was coming from principles.

[01:05:53] Speaker 03:
So under the sincerity doctrine, President Hinckley knew, we submit, at the time that he said it, that what he was representing was not true on behalf of the church.

[01:06:04] Speaker 03:
And that falls outside of the sincerity doctrine because it's not a question of his belief, it's a question of the facts that he was aware of, separate and apart from what

[01:06:16] Speaker 03:
a doctrine of God may have dictated to him.

[01:06:19] Speaker 03:
These were facts.

[01:06:20] Speaker 03:
These were secular facts.

[01:06:21] Speaker 02:
And, Your Honor.

[01:06:22] Speaker 02:
Thank you.

[01:06:22] Speaker 02:
Yes, thank you.

[01:06:23] Speaker 02:
Thank you very much.

[01:06:24] Speaker 02:
Thank you, Mr. Gianellis, and thank you, Mr. Clement, for the oral argument presentations here today.

[01:06:30] Speaker 02:
The case of James Huntsman versus the Corporation of the President of the Church of Christ of Latter-day Saints is now submitted, and we are adjourned.

[01:06:38] Speaker 02:
Thank you.