Judge: State's control of FLDS trust unconstitutional

SALT LAKE CITY — In a monumental ruling that could overturn five years of work done by a state-appointed team charged with managing the funds of a Utah-based polygamous sect, a federal judge ruled Thursday that the seizure of the sect's assets was unconstitutional and a "virtual takeover."

"Virtually from its first step after it decided to reform the trust, the state court was in forbidden territory," U.S. District Court Judge Dee Benson wrote in the ruling. "It not only had no authority to determine the 'just wants and needs' of the members of the FLDS Church, but it had no authority to interpret or reform the trust at all."

Benson writes that the state's involvement constituted becoming "entangled with religion" and amounted to efforts to "disestablish" the sect.

"The resulting intrusion into the everyday life of the FLDS Church and its members fostered not only 'excessive government entanglement with religion,' but was a virtual takeover by the state," he wrote.

The United Effort Plan was created by the Fundamentalist LDS Church in 1942 on the concept of a "united order," allowing followers to share in its assets. Members consider sharing its assets a religious principle and see state intervention in the trust as a violation of their religious rights.

Valued at more than $110 million, the trust holds most of the property and homes in the twin FLDS communities located in the border towns of Hildale, Utah, and Colorado City, Ariz. The church also holds property in Bountiful, British Columbia, and Eldorado, Texas.

Utah's state courts seized control of the trust in 2005 amid allegations of mismanagement by church leaders, including Warren Jeffs, the newly reinstated head of the church who is currently in jail in Texas pending trial on charges of bigamy, aggravated sexual assault and assault.

Benson said he's heard various complaints about conduct on the part of Jeffs' and his followers, but said those "allegations as a matter of law do not justify the constitutional infirmities of the state action."

Heber Hammon, who has written on the UEP issue and whose father was an initial trustee, said those who organized the trust intended for it to be a positive thing to unite the community.

"It was a benevolent trust," he said. "It was intended to help us develop the property, to be kept in one place and to be passed from one generation to generation. It's the legacy we hoped to give to our children."

But he said he lost faith in the ability of the FLDS leadership when it came to managing the property. He said he felt that the state's intervention was necessary after church leaders, including Jeffs, began to use the property to "cajole and coerce" members of the sect.

"We put our heart and soul into it," he said. "We worked hard to get this going and then they started using it to cajole people into believing what they said. (People) were being coerced. People were being threatened. The UEP was never meant to be a cajole, to force people to take a line."

Hammon said he was one of the trustees given an eviction notice because he wouldn't "adhere to the official line" being handed down by the FLDS leadership. He said the implications of the judge's ruling is unclear, but he thought the court-appointed special fiduciary, Bruce Wisan, was doing the right thing with the trust.

"Mr, Wisan, I think, was taking a pretty aggressive view on things," Hammon said. "He was just seeing that the property was given to the people who had an interest in it."

He said if control of the property were returned to the the FLDS people, there would be "too much emotion and bad feelings all around" to foster effective management. But he expressed his fear that without some form of oversight, many would lose their hard-earned property.

Benson said he will issue a second order detailing the extent of the injunction.

Members of the polygamous church have long been challenging the state takeover in both state and federal courts, alleging it's an inherent violation of their constitutional rights. The primary point of contention is the proposed sale of Berry Knoll Farm, a 438-acre parcel of land that had been set aside as a building site for a temple.

In 2009, 3rd District Judge Denise Lindberg ruled that a liquidity crisis of the United Effort Plan trust made selling the farm necessary. The trust has around $3 million in debt and no steady source of revenue. The FLDS Church appealed the ruling to the Utah Supreme Court.

In August 2010, the state's high court found that the pending state lawsuit, filed in 2008, came too late.

"The FLDS Association was not diligent in challenging the district court's modification of the UEP trust," the court wrote in a unanimous decision, "and that lack of diligence has resulted in prejudice to numerous parties."

In 2008, Benson decided against an injunction so the matter could be argued in state court. The FLDS renewed its federal petition to block the sale in October after Lindberg ruled the sale should go forward.

Benson issued a temporary restraining order in federal court in December 2010, blocking the sale of various assets held by the trust while he mulled whether Utah authorities had violated the constitutional rights of the FLDS faithful.

Thursday's ruling denied the state's motion to dismiss the case and implemented an injunction against the sale of the land, effective immediately. Benson states in the ruling that the arguments offered up by the state to defend its actions are "so tepid as to be nearly nonexistent."

"In extensive briefing in this case, the defendants cite no case that is even suggested to be remotely similar enough to the instant case to support their defense," he wrote. "This is because there isn't one. The defense amounts to nothing more than a repeat of why the state actors felt it was so important for them to take the action they took, as opposed to why it was constitutionally justified."

FLDS attorney Rod Parker said the judge's ruling was one of the biggest victories the group has had, second only to the return of FLDS children to their homes in Texas. He called the opinion "remarkable" and commended Benson's bravery.

"Constitution and religion questions always come up in an unusual context," Parker said. "It’s usually a minority group and it takes a lot of courage on the part of the judge to stand up for their constitutional rights. It was a big victory for religious freedom."

He said he has spoken with members of the FLDS community who were "very pleased" to hear of the judge's stance.

"It's a cloud that's been over the community that's been lifting," he said.

Paul Murphy, a spokesman for the Attorney General's Office, said they "strongly disagree" with the ruling.

"We will be meeting during the next few weeks to discuss our legal options, including filing an appeal with the 10th Circuit Court of Appeals," he said.

Special Fiduciary Bruce Wisan could not be immediately reached for comment Thursday, but Val Oveson, who is the spokesman for the fiduciary said those working to preserve the trust have spent the past six years "preserving the property and protecting the homes of the families of those living on UEP property."

"Clearly the federal court is directly at odds with all five members of the Utah Supreme Court and we will continue to do our best to administer the trust while the higher courts resolve this dispute," he said.

Parker said he was unsure what will happen next in the process, whether that will mean another ruling or additional hearings.

"As for what happens next, we're waiting for Judge Benson to tell us what to do."

E-mail: emorgan@desnews.com

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