Tuesday, April 4, 2023

One Civil RICO Claim by LDS Donor Survives Motion to Dismiss in Federal District Court

Download (5)Late last month, the U.S. District Court for the District of Utah issued an opinion in a lawsuit brought for a former member of and donor to the Church of Jesus Christ of Latter-Day Saints. In Gaddy v. Corporation of the President of the Church of Jesus Christ of Latter-Day Saints, the court dismissed almost all of the plaintiff's claims stated in an amended complaint on a variety of grounds, including that some of them would have required the court to inquiry into the truth of the Church's religious teachings and doctrines (which was the primary basis for dismissal of the plaintiff's original complaint as well). But a civil RICO claim survived for the following reasons, as stated in the court's opinion:

As alleged in the Amended Complaint, the court concludes Gaddy's third alternative civil RICO theory is based on a secular dispute concerning statements by Church leadership about the specific ways tithing, once received, would in fact be spent. . . . .

Here, Gaddy does not challenge the Church's tithing doctrine or teachings related to it. The court does not read her Amended Complaint to advance a claim that the doctrine is false. Gaddy instead points to specific factual statements allegedly made by the Church through its representatives concerning the Church's use of tithing funds and alleges those statements are false. The inquiry required to adjudicate this claim does not implicate religious principles of the Church or the truth of the Church's beliefs concerning the doctrine of tithing. This claim further does not require the court to determine whether the Church or its members were acting in accord with what they perceived to be the commandments of their faith. Gaddy has instead challenged secular representations concerning the use of money received by the Church. While the statements were made by Church officials, the church autonomy doctrine does not apply as a defense. The Church has not asserted any other challenge to Gaddy's RICO claim based on this alternative theory of liability. Accordingly, Gaddy's RICO claim based only on this alternative theory survives the Church's Motion to Dismiss.

The court also granted the plaintiff leave to further amend her complaint.

Lloyd Mayer

https://lawprofessors.typepad.com/nonprofit/2023/04/one-civil-rico-claim-by-lds-donor-survives-motion-to-dismiss-in-federal-district-court.html

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