10th Circuit: Mormon Tithing Fraud Claims Barred by Statute of Limitations

• The 10th Circuit affirmed the dismissal of a class action against the Church of Jesus Christ of Latter-day Saints, ruling donors waited too long to file fraud claims.
• Plaintiffs alleged the church misused tithing funds for non-charitable purposes, including $1.4 billion for the City Creek Mall, and accused Ensign Peak Advisors of concealing asset values.
• The court found that widespread media coverage following a December 2019 whistleblower report constituted sufficient constructive notice, triggering the statute of limitations.
• U.S. Circuit Judge Harris Hartz stated that the national scope of news coverage meant plaintiffs should have known of potential fraud claims, regardless of whether they saw a specific article.
• The ruling emphasizes that an objective standard applies to the discovery rule, meaning public knowledge can start the clock on legal claims even if individual plaintiffs claim ignorance.

This ruling from the 10th Circuit regarding the Mormon tithing fraud statute of limitations carries significant implications for potential class action claims, particularly those involving allegations of fraud where public information is available.

A federal appeals court has affirmed the dismissal of a class action lawsuit brought by donors against the Church of Jesus Christ of Latter-day Saints, ruling that the plaintiffs waited too long to file their fraud claims. The 10th Circuit panel concluded that widespread media coverage surrounding allegations of tithing fund misuse provided sufficient notice to the donors, negating their argument that they were unaware of potential wrongdoing until much later.

The lawsuit, filed by former members of the Church of Jesus Christ of Latter-day Saints residing outside Utah, alleged that the church engaged in fraud and unjust enrichment. Plaintiffs contended they were misled into believing their tithing donations would be used exclusively for charitable purposes, when in fact, a significant portion was allegedly diverted to a "slush fund" for noncharitable expenses. Specifically, they cited the expenditure of $1.4 billion in donated funds on the City Creek Mall in Salt Lake City, Utah, and accused Ensign Peak Advisors, a church-created nonprofit investment firm, of concealing the church's property value through shell companies.

The appellate panel's decision upheld a federal judge's April 2025 ruling, which found that the class members initiated their legal action approximately eight months after the applicable statute of limitations had expired. The core of the court's reasoning centered on the extensive public discourse that followed a December 2019 whistleblower report to the Internal Revenue Service, which brought the church's financial practices into national scrutiny.

The 10th Circuit's ruling hinged on the principle of constructive notice within the context of the statute of limitations' discovery rule. U.S. Circuit Judge Harris Hartz, writing for the unanimous three-judge panel, emphasized that the critical factor was not whether individual plaintiffs had personally seen a particular news article, but rather the national scope and sheer volume of media coverage. Judge Hartz noted that the whistleblower report was widely known and likely appeared across numerous news outlets and in general public conversation, asserting that "the news of that day will still echo in follow-up news pieces and in discussion among members of the public interested in a particular issue."

Plaintiffs argued they only became aware of the alleged issues after a May 2023 60 Minutes report. However, the court rejected this, stating that courts cannot ignore "the realities of modern life." The panel underscored the strong public interest in legal repose, which statutes of limitations are designed to protect, and highlighted the necessity of an objective test for the discovery exception. The court concluded that plaintiffs "should have known of the whistleblower report, and reasonable people would have understood its implications for potential fraud claims," further noting that the report would have "excited the attention of anyone in plaintiffs' position." The facts supporting this conclusion, including the report's publication date and related news, were either alleged in the complaint or undisputed.

This decision aligns with the fact that other plaintiffs successfully brought claims against the church within the statute of limitations, demonstrating that timely action was possible. The whistleblower report, originating from a former employee of Ensign Peak Advisors, claimed the church was underreporting its asset value and directing charitable tithes into commercial ventures. In a related development, the U.S. Securities and Exchange Commission fined the church $5 million in 2023, though the church did not admit wrongdoing. Ensign Peak Advisors currently manages a portfolio exceeding $100 billion.

This ruling from the 10th Circuit regarding the Mormon tithing fraud statute of limitations carries significant implications for potential class action claims, particularly those involving allegations of fraud where public information is available. It establishes a clear precedent that widespread media coverage can serve as constructive notice, effectively starting the clock on a statute of limitations, even if individual plaintiffs claim personal ignorance.

For attorneys advising on potential fraud or class action claims, this case underscores the critical importance of proactively monitoring public disclosures and news. Waiting for direct client awareness may no longer be a viable strategy, as the court's objective standard for the discovery rule means that claims could be time-barred if a reasonable person would have been alerted by public information. The decision reinforces that the legal system expects individuals to be reasonably attentive to publicly available information that could impact their legal rights, especially when such information is broadly disseminated and discussed.

This ruling highlights that widespread media coverage can establish constructive notice for statute of limitations purposes, even if individual plaintiffs claim ignorance. Lawyers advising on potential fraud or class action claims must proactively monitor public disclosures and news, as waiting for direct client awareness may result in claims being time-barred.

Source: Original reporting via Courthouse News