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SALT LAKE CITY — The battle being waged in two courts over the Fundamental LDS Church trust continued Tuesday as the Utah Supreme Court heard arguments on two separate issues.
They were charged with the task of determining who can represent those in the church, who will administer the trust worth approximately $110 million, and what to do in light of searing federal court action.
Michael Zimmerman, who represented the law firm of Snow, Christensen and Martineau, who are not allowed to represent FLDS members because they were part of the initial reformed trust of 1998, asked the Utah Supreme Court to take control of the case.
"I think this case … is a magnificent manifestation of why somebody needs to restore order to this world and this is the court to do it," he said.
This prompted Chief Utah Supreme Court Justice Christine Durham to ask how he proposed the court restore such order.
- Created by the FLDS 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.
- Holds most of the property and homes in the twin FLDS communities in 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.
"What do you want us to do?" she asked.
On Monday, 3rd District Judge Denise Lindberg responded to a prior ruling by U.S. District Judge Dee Benson that could all but undo the work of a state-appointed team charged with managing the funds of those within the Utah-based polygamous sect. After a February ruling in which Benson called the trust unconstitutional and a "virtual takeover," Benson implemented an injunction that ordered that the church's assets be returned to FLDS leadership.
Benson's injunction also prevents any further sale of assets within the United Effort Plan Trust, requires that any cash coming to the trust be first used to pay property taxes in Utah and Arizona and doesn't allow church leaders to evict nonmembers or former members living in trust-owned homes or automatically void any contractual agreements put in place by state managers.
In her ruling, Lindberg ordered that the state-appointed special fiduciary, Bruce Wisan — who was appointed to oversee the assets of those within the FLDS sect — maintain control over those assets, but said he should not take any further action until the matter is decided.
FLDS Church attorney Rodney Parker spent the bulk of his time Tuesday answering the justices' questions about the actions taken by Benson and whether he believes they preclude the Utah Supreme Court and Lindberg from taking action.
"The question at this point is how final is (Benson's order)? How firm is it?" Parker said before reading a quote reiterating Benson's unequivocal position that the state's actions were unconstitutional. "So, the probability Judge Benson would change his mind is very low."
Utah Supreme Court Justice Thomas Lee questioned why Benson didn't seek help from the state court on some of the issues.
"I have a hard time understanding why the federal court wouldn't want guidance … on a state law question," Lee said. "The dispute that's been brewing between these two court systems has a state question embedded in it."
Parker confirmed that no one has asked Benson or the 10th Circuit Court of Appeals to stay pending future court proceedings while the appeal is handled. Lee said this whole process has put Wisan in a tough spot, which might be alleviated by a stay.
"One reason I ask about a stay is because it seems that the special fiduciary is in an impossible position right now," Lee said. "He's damned if he does and damned if he doesn't."
Jeffrey Shields, Wisan's attorney, said Benson's ruling had a "huge impact" and leaves a number of questions to be addressed, including who are the beneficiaries of the reformed trust and what part religion plays in the issue.
"Judge Benson didn't look at critical issues," he said, citing a repudiation of the trust in 1998 and some of the alleged illegal activity that has taken place. "There are major issues that were never considered by the federal court."
Shields also pointed out that Benson's injunction is not final and is currently being appealed.
The justices repeatedly asked why there hadn't been motions to stay proceedings in the federal court pending subsequent appeals of Benson's ruling and their decision on whether there was an undue delay in the filing of the case, which is a state court issue.
In the meantime, Lindberg's attorney, Brent Johnson — who pointed out that Lindberg is still appointed to oversee the case — said the handling of the case has "reached a crisis" and questioned Benson's dismissal of his client's motion to dismiss the federal court case, which she did citing judicial immunity.
"It's the elephant in the room," he said.
Email:emorgan@ksl.com
