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FILED
United States Court of Appeals
PUBLISH Tenth Circuit
UNITED STATES COURT OF APPEALS August 31, 2026
Christopher M. Wolpert
FOR THE TENTH CIRCUIT Clerk of Court
In re: THE CHURCH OF JESUS CHRIST No. 25-4068
OF LATTER-DAY SAINTS TITHING
LITIGATION
Appeal from the United States District Court
for the District of Utah
(D.C. No. 2:24-MD-03102-RJS-DAO)
Scott A. George of Seeger Weiss, Philadelphia, Pennsylvania (Frazar W. Thomas; Christopher A. Seeger of Seeger Weiss, Ridgefield Park, New Jersey; Steven A. Schwartz of Chimicles Schwartz Kriner & Donaldson-Smith, Haverford, Pennsylvania; James E. Magleby and Yevgen Kovalov of Magleby Cataxinos, Salt Lake City, Utah; Martin Woodward of Kitner Woodward, Dallas, Texas; James J. Rosemergy of Carey Danis & Lowe, St. Louis, Missouri; Jacob A. Flint of Jacob Flint Law, St. Louis, Missouri; David B. Jonelis of Lavely & Singer, Los Angeles, California; and Todd S. Eagan of Eagan Law Corporation, Santa Monica, California with him on the briefs), for Plaintiffs-Appellants.
Paul D. Clement of Clement & Murphy, PLLC, Alexandria, Virginia (Andrew C. Lawrence and Nicholas A. Aquart; Randy T. Austin and Justin W. Starr of Kirton McConkie, Salt Lake City, Utah; Mark S. Mester of Latham & Watkins LLP, Chicago, Illinois; Jason R. Burt of Latham & Watkins LLP, Washington, D.C. with him on the briefs), for Defendants-Appellees.
Before HARTZ, PHILLIPS, and MORITZ, Circuit Judges.
HARTZ, Circuit Judge.
Plaintiffs brought this action against the Church of Jesus Christ of Latter-day
Saints (the Church) and its subsidiary, Ensign Peak Advisors, Inc. (Defendants),
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alleging that Defendants engaged in fraudulent conduct to induce Plaintiffs to donate
to the Church. They also brought claims for breach of fiduciary duty and unjust
enrichment and sought to represent a class of all persons in the United States who
donated money to the Church after 1997. The district court granted Defendants’
motion to dismiss under Fed. R. Civ. P. 12(b)(6) on the ground that the complaints
were untimely. It said that in light of news reports throughout the country Plaintiffs,
had they exercised reasonable diligence, should have known of the scheme more than
three years before they filed suit. We agree and affirm the dismissal.
I. BACKGROUND
In reviewing a motion to dismiss, courts may consider only the well-pleaded
allegations of the complaint, documents that the complaint incorporates by reference,
documents referred to in the complaint that are central to the plaintiffs’ claims and
whose authenticity is not challenged, and matters of which the court may take
judicial notice. See Gee v. Pacheco, 627 F.3d 1178, 1186 (10th Cir. 2010). We
assume the truth of the well-pleaded factual allegations of the complaint so long as
they are not contrary to documents that the court can consider.
The Church receives substantial funds from tithes and other donations. Much
of this money finances significant religious outreach and charitable work. But the
Church also operates several secular businesses, such as a general-goods store near
its Salt Lake City headquarters. And, more relevant to this case, the Church has said
that it sets aside a portion of donations to invest and build a “prudent reserve for the
future.” In re Church of Jesus Christ of Latter-day Saints Tithing Litig., (In re
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Tithing Litig.) 785 F. Supp. 3d 1009, 1019 (D. Utah 2025) (internal quotation marks
omitted). In 1997 it formed Ensign as a § 501(c)(3) nonprofit corporation. Ensign
now manages a portfolio worth over $100 billion.
A. The Alleged Scheme
We take our description of the alleged scheme from the allegations of the
complaint.
Defendants concealed the size of Ensign’s portfolio to make the Church more
attractive to potential donors. These donors were misled into believing that the
Church promptly used donations for charitable purposes. One deceptive tactic that
Ensign employed was to submit misleading documents to the SEC. The SEC required
Ensign to file certain forms listing all public securities (not including cash or bonds)
under its management. But Ensign created 13 shell LLCs throughout the country and
filed the forms in the names of those entities, obscuring the fact that Ensign retained
discretion over all investment decisions by the LLCs. Also, the Church used a
complex web of entities to transfer funds to Ensign. Once funds reached Ensign, they
were continually reinvested, not used for Church organizations or efforts.
This scheme ran counter to the Church’s public statements about how it used
tithed funds. For example, the Church said it was not using tithes to pay for a Church
effort to revitalize an area near the Church’s Temple Square by developing the City
Creek Mall. The Church-owned Ensign magazine, which is available online, reported
on this promise in its December 2003 and December 2006 issues, as did a 2012
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article in The Salt Lake Tribune. Yet, between 2010 and 2014, Ensign spent $1.4
billion in donated funds on the construction of the City Creek Mall.
B. The 2019 Whistleblower Report
In December 2019 a former Ensign employee and self-styled whistleblower
published a “Letter to an IRS Director” (the Whistleblower Report) claiming that
Defendants underreported the value of the Church’s assets and improperly directed
tithing funds toward nonreligious commercial ventures.
Between December 2019 and February 2020 news outlets including The Wall
Street Journal, The Washington Post, Forbes, Fox News, CNN, The Salt Lake
Tribune, and Deseret News ran stories on the Whistleblower Report. The Church
responded publicly, acknowledging that it maintains a reserve fund but arguing that it
“complies with all applicable law governing . . . donations, investments, taxes and
reserves.” Aplts. App., Vol. 1 at 64 (quoting The Church of Jesus Christ of Latterday Saints, First Presidency Statement on Church Finances (Dec. 17, 2019),
https://newsroom.churchofjesuschrist.org/article/first-presidency-statement-churchfinances [https://perma.cc/A34K-ZQ2C]). According to Plaintiffs, “the IRS evidently
found nothing of interest in the Whistleblower Report.” Aplts. Br. at 23.
But three suits by current and former Church members soon followed,
incorporating allegations based on the Whistleblower Report. Huntsman v. Corp. of
the President of the Church of Jesus Christ of Latter-day Saints, 2021 WL 4296208,
at *3 (C.D. Cal. Sept. 10, 2021), filed in March 2021, raised a fraud claim based on
misuse of tithing funds and alleged that the plaintiff discovered the fraud in
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December 2019 after learning of the Whistleblower Report. See Compl. at 5,
Huntsman, 2021 WL 4296208 (No. 2:21-cv-2504) (hereinafter Huntsman Compl.).
Cook v. Corp. of the President of the Church of Jesus Christ of Latter-Day Saints,
No. 2:20-cv-80 (D. Utah Feb. 10, 2020), filed in February 2020, asserted a fraud
claim against the Church for failing to abide by the teachings of the Book of
Mormon, and cited a December 2019 Washington Post article about the
Whistleblower Report. Compl. at 5–6, 8, Cook, No. 20-cv-80 (hereinafter Cook
Compl.). And Gaddy v. Corp. of the President of the Church of Jesus Christ of
Latter-Day Saints, 665 F. Supp. 3d 1263, 1272–73 (D. Utah 2023), filed before the
Whistleblower Report’s publication, alleged a scheme to conceal facts about Mormon
history from lay members and was amended soon after publication of the Report to
allege misuse of tithing funds. See Proposed Am. Class Action Compl. at 2–3,
Gaddy, 665 F. Supp. 3d 1263 (No. 19-cv-554) (hereinafter Gaddy Proposed Am.
Compl.).
C. The 2023 SEC Order
In February 2023 the SEC issued a stipulated order initiating cease-and-desist
proceedings against Defendants and agreeing to a settlement. See Ensign Peak
Advisors, Inc. & The Church of Jesus Christ of Latter-day Saints, Exchange Act
Release No. 96951, 2023 WL 2160756, at *1 (Feb. 21, 2023) (order instituting
proceedings). The order directed Defendants to refrain “from committing or causing
any violations” of the statutory provision requiring proper filing of the forms filed by
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Ensign’s 13 LLCs. Id. at *7. Defendants did not admit any legal violations but paid
$5 million in civil penalties.
D. This Action
In October 2023 Plaintiffs Daniel Chappell, John Oaks, and Masen
Christensen filed a proposed class-action complaint in the United States District
Court for the District of Utah. The other Plaintiffs then filed similar cases in federal
courts in California, Tennessee, and Washington, and the Judicial Panel on
Multidistrict Litigation ordered that the four cases be centralized in Utah federal
court for “coordinated or consolidated pretrial proceedings.” Aplts. App., Vol. 1 at 58
(transfer order). Plaintiffs filed a consolidated class-action complaint containing five
causes of action: (1) breach of fiduciary duty for the misuse of donations and failure
to disclose that misuse, (2) fraudulently inducing donations, (3) fraudulently
concealing the misuse of donated funds, (4) fraudulently misrepresenting that tithing
funds would be used only for Church purposes, and (5) unjust enrichment through the
continued retention of donated funds.
In April 2025 the district court dismissed the Appellants’ consolidated
complaint with prejudice. The court took judicial notice of news coverage of the
Whistleblower Report and of the earlier suits—Gaddy, Cook, and Huntsman. Based
on these records, the court ruled that Plaintiffs’ claims were barred by Utah’s threeyear statute of limitations for fraud claims, because persons in their situations should
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have discovered their claims through reasonable diligence more than three years
before Plaintiffs filed suit. 1
II. DISCUSSION
“We review de novo the dismissal of a complaint for failure to state a claim
under Rule 12(b)(6).” Bistline v. Parker, 918 F.3d 849, 862 (10th Cir. 2019). This
court’s role in this diversity action is to predict whether the Utah Supreme Court
would hold on this record that Plaintiffs’ claims are barred by the state statute of
limitations. See Wade v. EMCASCO Ins. Co., 483 F.3d 657, 666 (10th Cir. 2007).
Plaintiffs challenge the district court’s conclusion that their claims are timebarred. Although three of the consolidated cases were originally filed in States other
than Utah, Plaintiffs assert that “the relevant statute to examine for statute of
limitations purposes is” a Utah statute. Aplts. Br. at 12. Utah’s statutes of limitations
“promote justice by preventing surprises through the revival of claims that have been
allowed to slumber until evidence has been lost, memories have faded, and witnesses
have disappeared.” Berenda v. Langford, 914 P.2d 45, 52 (Utah 1996). The specific
1
The district court held in the alternative that Plaintiffs’ breach-of-fiduciaryduty claim failed because the Church did not owe a fiduciary duty to its donors, Plaintiffs’ fraudulent-inducement and fraudulent-misrepresentation claims failed because Plaintiffs failed to plead reliance on any allegedly false representations, Plaintiffs’ fraudulent-concealment claims failed because Plaintiffs failed to plead that an objectively reasonable person in Plaintiffs’ position would find the nondisclosed information material, and Plaintiffs’ unjust-enrichment claims failed because they were predicated on the fraud allegations. We need not reach these alternative holdings because we affirm the court’s conclusion on the statute of limitations.
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statute identified by the parties here is Utah Code Ann. § 78B–2-305(3) (2019), 2
which provides a three-year limitations period for “relief on the grounds of fraud or
mistake; except that the cause of action does not accrue until the discovery by the
aggrieved party of the facts constituting the fraud or mistake.” 3 According to the
Utah Supreme Court, the limitations period “begins to run from the time the person
entitled to the property knows, or by reasonable diligence and inquiry should know,
the relevant facts[,] . . . [and the] means of knowledge is equivalent to knowledge.”
Baldwin v. Burton, 850 P.2d 1188, 1196 (Utah 1993) (internal quotation marks
omitted) (emphasis added). Thus, the claim must be filed within three years of the
earlier of (1) when the plaintiff actually knew the factual basis of the claim (the
subjective test) or (2) when a hypothetical person in the plaintiff’s situation should
have known those facts by the exercise of reasonable diligence (the objective test),
see O’Dea v. Olea, 217 P.3d 704, 714 (Utah 2009) (the phrase “through the exercise
of reasonable diligence should have known” in a different statute established “an
objective standard” (internal quotation marks omitted)); Patterson v. United States,
2
Since the parties and district court have agreed that this is the correct statute of limitations to apply to all Plaintiffs’ claims, we will accept their choice of law. See TMJ Implants, Inc. v. Aetna, Inc., 498 F.3d 1175, 1180–81 (10th Cir. 2007) (“The parties agree that the applicable substantive law is that of Colorado, although subject to any restrictions on the alleged torts that may be imposed by the United States Constitution. We therefore assume that this case is governed by Colorado substantive law (and, of course, the federal constitution)”).
3
Utah Code Ann. § 78B–2-305 was amended in 2026, reorganizing the
contents of former subsection 3. See 2026 Utah Laws Ch. 307 (H.B. 260). The relevant statutory language was not changed at any time between the publication of the Whistleblower Report and when Plaintiffs filed their complaint.
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451 F.3d 268, 271 (1st Cir. 2006) (describing the reason-to-know test for starting the
limitations period in the Federal Tort Claims Act as “an objective one”). When the
objective component is satisfied, we say that the plaintiff had constructive knowledge
(or, sometimes, constructive notice) of the claim. See Constructive Knowledge,
Black’s Law Dictionary 1041 (12th ed. 2024) (“Knowledge that one using reasonable
care or diligence should have, and therefore that is attributed by law to a given
person”).
The earliest of Plaintiffs’ consolidated actions was filed October 2023. Thus,
Plaintiffs’ claims are untimely if the limitations period began to run before October
2020.
Plaintiffs argue that the district court committed several errors in deciding that
their claims are time-barred. First, they argue that the statute of limitations is a
question of fact that should not have been resolved on a motion to dismiss. Second,
they contend that the district court wrongly took judicial notice of the Whistleblower
Report and related news articles. Third, they say that the district court erred in ruling
that the Whistleblower Report (and the resulting newspaper articles and other media
attention) sufficed to start the running of the limitations period. And fourth, they
claim that they should have been granted an opportunity to amend their pleadings to
allege that they did not know of the Whistleblower Report or the media coverage of
it. We reject each argument.
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A. Resolution of Timeliness on Motion to Dismiss
Plaintiffs argue that the question of when exactly their claims accrued is a
question of fact that should have been explored in discovery and then submitted to a
jury rather than decided by the district court on a motion to dismiss.
We disagree. Though not the common case, “on occasion it is proper to
dismiss a claim on the pleadings based on an affirmative defense[, as] . . . when the
complaint itself admits all the elements of the affirmative defense by alleging the
factual basis for those elements.” Fernandez v. Clean House, LLC, 883 F.3d 1296,
1299 (10th Cir. 2018). This is one such occasion. Utah’s statute of limitations for
fraud is triggered not just at the time of actual discovery of the fraud but also at the
time “a plaintiff . . . should have discovered his or her cause of action.” Russell
Packard Dev., Inc. v. Carson, 108 P.3d 741, 746 (Utah 2005) (emphasis omitted).
The facts from which the district court concluded that Plaintiffs should have
discovered their claim—the date of publication of the Whistleblower Report and
related news coverage—are either alleged in the complaint or are undisputed facts
that can be considered in resolving a motion to dismiss. See infra at § B.1; In re
Tithing Litig., 785 F. Supp. 3d at 1032 (“[T]he overwhelming information in the
public domain by early 2020 would have inspired (and in fact did inspire) similarlysituated individuals to learn about the facts underlying their claims and file suit”).
In response, Plaintiffs cite Bistline for the proposition that “[t]he fraud statute
of limitations involved here almost always presents a question of fact as to when
plaintiff did discover or should have discovered the defendants’ wrongdoing.” 918
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F.3d 849 at 881 (internal quotation marks omitted). But, as the district court pointed
out, the reason that Bistline refused to conclude as a matter of law that the plaintiffs’
suspicions should have led them to discover their claims was because the case
involved “incredibly unique and extreme factual circumstances.” In re Tithing Litig.,
785 F. Supp. 3d at 1031 (internal quotation marks omitted). In Bistline the plaintiffs
were former members of the Fundamentalist Church of Jesus Christ of Latter-day
Saints, who had been entrenched for generations in a community “insulated from the
outside world,” lacked “outside education that could alert them to their legal rights,”
and received “specialized schooling to indoctrinate them against recognizing their
legal claims.” Bistline, 918 F.3d at 882. Such plaintiffs could reasonably have been
ignorant of their claims despite significant media attention “in the external world.”
Id. at 861.
Here, Plaintiffs’ claims lack the essential feature of Bistline: an isolated,
almost totalitarian, environment creating an issue of fact as to whether someone in
those unique circumstances could reasonably discover fraudulent misconduct that
could readily be discovered by someone in the “outside” world. Plaintiffs are more
similarly situated to those Bistline plaintiffs who escaped their confinement and
“were no longer immersed in the unique circumstances” for many years before filing
their suit. Id. at 887. Those plaintiffs’ claims were “barred by the applicable statutes
of limitations as a matter of law,” id. at 888, and the district court could properly
determine the same with respect to Plaintiffs’ claims here.
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Plaintiffs also complain that “the district court did not find a date when notice
was triggered, leaving a period of weeks or months between 2019 and 2020 of
possible notice.” Aplts. Br. at 25–26. We see no reversible error. True, in some cases
the question of exactly when a plaintiff should have discovered enough facts to bring
suit will control the statute-of-limitations analysis. See, e.g., Russell Packard Dev.,
108 P.3d at 752 (declaring a “legitimate factual question” as to when in a five-month
period the plaintiffs reasonably would have discovered the facts forming the basis for
their causes of action, so that the trier of fact would need to decide whether the
plaintiffs acted reasonably in failing to file their complaint within the limitations
period). But when it is clear that the plaintiff should have learned of his or her claims
early enough that the statute of limitations has lapsed, a court does not err in so
holding without giving a precise date that the limitations period began to run. See,
e.g., Robert L. Kroenlein Trust ex rel. Alden v. Kirchhefer, 764 F.3d 1268, 1280
(10th Cir. 2014) (accrual began well before the critical date of August 31, 2007).
B. Should Plaintiffs Have Discovered Their Claims by October
2020?
The district court determined that with reasonable diligence Plaintiffs should
have discovered their claims before October 2020. Plaintiffs challenge the facts and
reasoning underlying that determination. They argue that the district court improperly
took judicial notice of news stories about the Whistleblower Report because the court
conflated the attention the Report received with its truthfulness. And they further
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contend that even if judicial notice was proper, the Report and articles about it would
not establish that they should have discovered their claims.
1. Judicial notice
The challenge to the district court’s judicial notice of the Whistleblower
Report and news coverage can be readily rejected. Plaintiffs argue that courts should
“‘take[] judicial notice of contents of news articles’” only as “‘proof that something
is publicly known, not for the truth’” of the articles’ assertions. Aplts. Br. at 19
(quoting Est. of Lockett v. Fallin, 841 F.3d 1098, 1111 (10th Cir. 2016)). But that is
exactly what the court did here: the court considered the articles “not for their truth
but only as evidence of the information in the public realm shortly following the
release of the Whistleblower Report.” In re Tithing Litig., 785 F. Supp. 3d at 1026
n.127 (citing Est. of Lockett, 841 F.3d at 1111).
2. Reasonable diligence
“A plaintiff is deemed to have discovered his action when he has actual
knowledge of the fraud or by reasonable diligence and inquiry should know[] the
relevant facts of the fraud perpetrated against him.” Colosimo v. Roman Cath. Bishop
of Salt Lake City, 156 P.3d 806, 811 (Utah 2007) (internal quotation marks omitted).
Plaintiffs challenge the application of this law to their complaint. They make two
arguments.
First, they contend that a reasonably diligent person in their position would not
necessarily have known of the news articles about the Whistleblower Report, which
were mostly local to Salt Lake City and behind paywalls. Second, they say,
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knowledge of the articles would not have caused a reasonable person to investigate
the possibility of fraud by the Church since there was no reason to believe that the
Whistleblower Report’s allegations were true. In their view, the limitations period
could not have started to run before May 2023, when the network TV show 60
Minutes aired an exposé “on the [W]histleblower [R]eport and related matters,”
which made them “truly aware of Defendants’ conduct.” Aplts. App., Vol. 2 at 311–
12 (opp’n to mot. to dismiss).
i. Reason to know of the Whistleblower Report
In support of their first argument, Plaintiffs contend that (1) the news coverage
was much less widely available than the court believed, and (2) the court incorrectly
imposed on Plaintiffs a heightened duty owed by sophisticated investors to follow the
news.
We are not persuaded. Contrary to Plaintiffs’ claim that “[t]he stories [about
the Report] were largely local, Salt Lake news sources,” Aplts. Br. at 19, the
coverage cited by the district court included articles from The Wall Street Journal,
The Washington Post, Forbes, Fox News, and CNN, 4 all sources that can hardly be
4
The articles are: Ian Lovett & Rachael Levy, The Mormon Church Amassed $100 Billion, It Was the Best-Kept Secret in the Investment World, Wall St. J. (Feb. 8, 2020, 5:07 PM), https://perma.cc/578H-2SYV; Peggy Fletcher Stack, LDS Church Kept the Lid on Its $100B Fund for Fear Tithing Receipts Would Fall, Account Boss Tells Wall Street Journal, Salt Lake Trib. (Feb. 8, 2020, 1:40 PM), https://perma.cc/2Z7V-9TYV; Benjamin Wood, Whistleblower Claims That LDS Church Stockpiled $100 Billion in Charitable Donations, Dodged Taxes, Salt Lake Trib. (Dec. 16, 2019, 8:25 PM), https://perma.cc/3226-3FLK; Jon Swaine, Douglas MacMillan, & Michelle Boorstein, Mormon Church Has Misled Members on $100
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described as parochial. Nor is it of much significance that, as Plaintiffs assert, some
(unidentified) articles are behind paywalls. The issue is not whether Plaintiffs saw or
should have seen any particular article. Rather, the national scope and quantity of
sources illustrate that the Whistleblower Report was widely known and very likely
appeared in multiple other news sources and in public conversation in general. See In
re Tithing Litig., 785 F. Supp. 3d at 1026 (the articles “demonstrate the extensive
nationwide reporting on Defendants’ alleged fraud that quickly followed publication
of the Whistleblower Report” (footnotes omitted)). A reasonably informed person
Billion Tax-Exempt Investment Fund, Whistleblower Alleges, Wash. Post (Dec. 17, 2019), https://perma.cc/25ZZ-SQ5R; Tad Walch, Church Responds to Allegations Made by Former Employee in IRS Complaint, Deseret News (Dec. 17, 2019, 12:43 PM), https://perma.cc/4GP6-MJES; Jerad Giottonini, Whistleblower Alleges Church Misused $100 Billion in Accounts Intended For Charitable Purposes, ABC4 News (Dec. 17, 2019, 12:12 PM), https://perma.cc/YPT3-P52Y; Cristina Flores, Will LDS Church Suffer Consequences After Whistleblower Claims It Sits on $100B?, KUTV News (Dec. 17, 2019, 8:15 PM), https://perma.cc/GHX9-DLSE; Caleb Parke, Mormon Church Misled Members on Tax-Exempt Investment Fund, Whistleblower Claims, Fox News (Dec. 18, 2019, 1:28 PM), https://perma.cc/X9EN-63EL; Cheri Mossburg & Stephanie Becker, Mormon Church Accused of Stockpiling Billions, Avoiding Taxes, CNN (Dec. 18, 2019, 8:50 PM), https://perma.cc/RJ39-DBD7; Jack Jenkins, LDS Church Fund Unlikely to Face IRS Backlash, Experts Say, Salt Lake Trib. (Dec. 19, 2019, 6:03 PM), https://perma.cc/9X7C-V57K; Larry Curtis, LDS Church Releases Explanation of Its Use of Tithes, Donations After $100B Fund Revealed, KUTV News (Dec. 20, 2019, 5:39 PM), https://perma.cc/PH4F-WRCH; Peter J. Reilly, More on the Mormon Ensigngate, Forbes (Dec. 20, 2019, 2:35 PM), https://perma.cc/8DYY-T984; Nate Carlisle, Excerpts Show How the LDS Church Tried to Keep a Lid on Its $100B Account, Even Freezing Out Apostle Boyd K. Packer, Salt Lake Trib. (Dec. 22, 2019, 7:00 AM), https://perma.cc/MEB8-QZPM; Michelle Boorstein & Jon Swaine, These Mormon Twins Worked Together on an IRS Whistleblower Over the Church’s Billions—And It Tore Them Apart, Wash. Post (Jan. 16, 2020), https://perma.cc/5YZ5-4TET; Samuel Brunson, What’s A Church? That Can Depend on The Eye of The Beholder or Papers Filed With the IRS, Salt Lake Trib. (Feb. 6, 2020, 11:06 AM), https://perma.cc/N4HY-F3RW. See In re Tithing Litig., 785 F. Supp. 3d at 1026–27.
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may have been ill or on vacation and missed all the news one day. But 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. The courts cannot blind themselves to the
realities of modern life. The strong public interest in repose that is reflected in
statutes of limitations should not be thwarted by highly unlikely vicissitudes. That is
the very purpose of having an objective (as well as a subjective) test for a discovery
exception in a statute of limitations.
This view is reflected in several prior circuit opinions. In Grynberg v. Total
S.A., 538 F.3d 1336 (10th Cir. 2008), we held that an investor should have discovered
his claim because of financial-news reporting on matters relevant to his multimilliondollar investment abroad. To be sure, the investor was sophisticated (not everyone
can be expected to follow the financial news), but we noted with approval that “more
generally” other circuits had held that “where events receive widespread publicity,
plaintiffs may be charged with knowledge of their occurrence.” Id. at 1349 (brackets,
ellipsis, and internal quotation marks omitted). In Patterson v. United States the First
Circuit said that a plaintiff should have learned of the FBI’s involvement in her
father’s death through nationally circulated reporting on the matter. See 451 F.3d
268, 271 (1st Cir. 2006). In In re Briscoe the Third Circuit held that “extensive
publicity and notice campaigns” about the withdrawal of potentially dangerous diet
drugs gave the plaintiffs a “reasonable opportunity to discover the alleged wrong and
bring suit before the limitations period expired.” 448 F.3d 201, 224 (3d Cir. 2006)
(internal quotation marks omitted). In United Klans of America v. McGovern, 621
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F.2d 152, 154 (5th Cir. 1980), one of the grounds supporting summary judgment was
that “[w]here events receive . . . widespread publicity, plaintiffs may be charged with
knowledge of their occurrence.” The event in that case was a statement by the United
States Attorney General at a nationally covered press conference. And Hughes v.
Vanderbilt University, 215 F.3d 543, 548 (6th Cir. 2000), followed United Klans in
charging a Nashville resident with knowledge of a matter reported three times by a
local television station and highlighted in the local press.
Plaintiffs attempt to distinguish these cases, but they rely on facts that were
not considered by the courts in resolving the should-have-known issue. They contend
that the plaintiffs in Grynberg (all closely related to Mr. Grynberg) admitted actual
knowledge of a news article relating to their claims in 1993. But our holding charged
the plaintiffs with constructive knowledge of the facts of the claims only by 1997,
when several other news articles were published. See Grynberg, 538 F.3d at 1348. In
Patterson, Plaintiffs argue, the statute of limitations was “strictly construed in the
government’s favor,” and one plaintiff did have actual knowledge of the pertinent
facts and presumably would have conveyed them to the other plaintiff, her sister.
Aplts. Reply Br. at 14 n.5 (internal quotation marks omitted); see also id. at 14–15.
But the First Circuit referenced neither the strict construction of the statute of
limitations nor any alternative sources of the information when it said that the fact
that the second plaintiff “resided in Georgia in December 2000-January 2001 is
insufficient to vitiate a finding that she should have learned of the [nationally
reported] news at that time.” 451 F.3d at 271. Plaintiffs weakly attempt to distinguish
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In re Briscoe, arguing only that “the relevant question before the court was whether
the plaintiff had no ‘reasonable opportunity to discover the alleged wrong.’” Aplts.
Reply Br. at 13 (quoting In re Briscoe, 448 F.3d at 224). The question here—whether
Plaintiffs should have known of the facts of their claims by the exercise of reasonable
diligence—is substantially similar.
Plaintiffs further suggest that in United Klans “a combination of factors”
established the plaintiffs’ notice, and that in Hughes “the plaintiff alleged the date of
accrual in her complaint independently of” the widespread publicity that gave rise to
constructive notice. Aplts. Reply Br. at 13–14 (internal quotation marks omitted). But
there is no denying that the United Klans court recognized as authoritative the
proposition regarding widespread publicity for which we quote it. And in Hughes,
that the plaintiff’s complaint alleged that she “did not know or have reason to know
of their claims” until the date that details of those claims were published in the press,
Hughes, 215 F.3d at 546 (emphasis omitted), supports, not undermines, the holding
that “[t]his publicity was sufficient to charge Hughes with constructive knowledge of
the events underlying her cause of action,” id. at 548. This is just an example of a
party conceding the undeniable, which is presumably why the Sixth Circuit has
continued to rely on Hughes for the proposition that “where events receive
widespread publicity, plaintiffs may be charged with knowledge of their
occurrence[] . . . even when [the plaintiffs] claim[] that [they] did not hear or read
any of the media reports.” Ball v. Union Carbide Corp., 385 F.3d 713, 722 (6th Cir.
2004) (brackets and ellipsis omitted).
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The only case that Plaintiffs put forward to support their view that ordinary
citizens should not be held to follow the news, Thompson v. 1-800 Contacts, Inc.,
2018 WL 2271024 (D. Utah May 17, 2018), is not to the contrary. There, the
plaintiffs were individual consumers who alleged that they paid inflated prices for
contact lenses because the defendant, a retailer of contact lenses, had entered into a
series of anticompetitive settlement agreements with other retailers. See id. at *1.
Holding that the plaintiffs did not have constructive knowledge of their claims, the
court said that cases where constructive knowledge was found based on “information
[that] was widely disseminated through press releases, news reports, and multiple
complaints” were “distinguishable on their facts”; it explained that the Thompson
plaintiffs “had no reason to know about (much less understand) the antitrust
implications of the settlement agreements.” Id. at *13. Here, Plaintiffs should have
known of the Whistleblower Report, and reasonable people would have understood
its implications for potential fraud claims.
Moreover, there are particular features of this case that confirm the fairness of
this analysis. First, as counsel for Defendants observed, in this case there is a market
test for when a reasonably diligent person could be expected to discover the present
claims against the Church and Ensign. At least three other groups of plaintiffs of
varying levels of sophistication managed to bring claims against the Church long
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before Plaintiffs did. 5 At one end of the sophistication spectrum, James Huntsman
alleged that he held “numerous” leadership and teaching assignments within the
Church and had donated millions of dollars. Huntsman Compl. at 5. Toward the other
end of the spectrum, Lynnette Cook, Rodney Vessels, and Julie Taggart filed a pro se
complaint that described themselves simply as “members of the Church in good
standing for many years.” Cook Compl. at 7. In the middle, Laura Gaddy was
involved in a Church women’s organization and paid her full tithes, though she did
not allege contributions as large as Huntsman’s.
In addition, the complaint itself provides a baseline for the sources of
information that Plaintiffs relied on. The core of Plaintiffs’ claims is that they
believed various statements made by the Church. How did they know about those
statements? The complaint identifies only three sources of publicity about those
statements: a press conference described in a Church-owned magazine, a later article
in that same magazine, and a report in The Salt Lake Tribune (which later published
at least five stories about the Whistleblower Report). Nothing in the complaint
explains why someone who followed Church affairs closely enough to learn of the
supposedly false statements about the use of tithed funds, could not be expected to
5
Plaintiffs misunderstand the significance of these other complaints, contending that “donors and former members” do not have a “duty to monitor case dockets for relevant filings” and that Cook, Gaddy, and Huntsman “do not involve the same allegations and are not reliable fonts of facts that are relevant to ‘inquiry notice.’” Aplts. Br. at 21–22. The point is not that Plaintiffs were likely to learn of the facts giving rise to their claims from reading these complaints. Rather, it is that similarly situated plaintiffs did timely learn of those facts, underscoring that, with reasonable diligence, Plaintiffs should have done so as well.
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learn, through reasonable diligence, about the Whistleblower Report, which was
much more widely publicized. Plaintiffs have not suggested any reason why they
would have been out of the loop.
In light of the authorities presented to us by the parties, we are confident that
we are reaching the result that Utah’s high court would come to.
ii. Reason to investigate
Plaintiffs argue, however, that the news reports about the Whistleblower
Report would not be enough to cause a reasonable person to investigate the Church’s
fraud. After all, the Report may have been just the delusions of a disgruntled zealot.
See Aplts. Br. at 21 (arguing that the whistleblower relayed unverified accusations
and “may have been a crackpot”). Besides, they say, after the Report was released,
Defendants “continued and expanded efforts to conceal their practices, including
issuing statements that they comply with all applicable law governing our donations,
investments, taxes and reserves.” Id. at 20 (brackets, ellipsis, and internal quotation
marks omitted). These “public denials give rise to competing inferences” that
Plaintiffs believe create a question of fact as to when their claims accrued. Id.
(internal quotation marks omitted).
But such reliability questions are not an excuse for ignoring the report, they
are a call to action. The Whistleblower Report declared that the Church had funneled
billions of dollars of donations into covert permanent investments. As the Utah
Supreme Court has stated, “Whatever is notice enough to excite attention and put the
party on his guard and call for inquiry is notice of everything to which such inquiry
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might have led.” Russell Packard Dev., 108 P.3d at 750 (internal quotation marks
omitted). If nothing else, the Whistleblower Report would have excited the attention
of anyone in Plaintiffs’ position. And, as the district court observed, “No imprecise
information, scientific uncertainty, or lack of expertise would have ‘hampered’
Plaintiffs’ discovery of the key facts upon reasonably diligent investigation.” In re
Tithing Litig., 785 F. Supp. 3d at 1026. Nor could they complain that they were
misled by the Church’s denials of the allegations in the Report, because their claim
that they were not aware of the Report until the 60 Minutes episode is inconsistent
with their having heard of any denials.
Before we move on, we emphasize that it is incorrect to say, as Plaintiffs do,
that our holding means that “ordinary donors to a charity are legally obliged to read
the Wall Street Journal or Washington Post to ensure that their donations are being
honestly and legally used.” Aplts. Br. at 20. We merely affirm the well-recognized
principle that a plaintiff can be charged with knowledge of events that are so widely
reported that a plaintiff exercising reasonable diligence should have learned of them.
C. Leave To Amend
Finally, Plaintiffs argue that the district court erred by dismissing their
consolidated complaint with prejudice. They claim that if granted leave to amend,
they would add allegations that would overcome the statute-of-limitations bar.
This argument comes too late. If Plaintiffs thought that additional pleadings or
evidence would be of assistance in resisting Defendants’ motion to dismiss on
statute-of-limitations grounds, it should have raised those matters in its response to
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the motion. But they did not do so. Nor did they seek relief in any motion after the
district court entered its decision. Briefs on appeal are not a proper venue for
initiating a request to amend the complaint. See Switzer v. Coan, 261 F.3d 985, 990
(10th Cir. 2001) (“it was incumbent upon [plaintiff] to seek leave [to amend] from
the district court” and “[b]y not doing so, he has elected to appeal the case as it
stood” (internal quotation marks omitted)). Because “curative amendment was not
properly sought in district court,” Plaintiffs “cannot object on appeal to lack of
opportunity to cure defective pleading.” Id.
III. CONCLUSION
We AFFIRM the judgment of the district court.
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