Utah Supreme Court to address United Effort Plan in light of federal court ruling

Published: Saturday, March 12 2011 10:22 p.m. MST

SALT LAKE CITY — In light of a federal court ruling denouncing the state's formation of a trust to govern the assets of a polygamous sect as unconstitutional, the Utah Supreme Court is seeking more information on the issue.

In the order, filed March 8, the Utah Supreme Court said the recent decision handed down by U.S. District Judge Dee Benson that denounced the state's takeover of the assets of the Fundamentalist LDS Church "may have significant implications" for the action currently pending in state court.

On Feb. 24, Benson ruled that when Utah's state courts seized control of the FLDS' trust in 2005, amid allegations of mismanagement by church leaders, they were "in forbidden territory."

"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 said.

The United Effort Plan was 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.

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.

Members of the Utah-based church have long been challenging the state takeover in both state and federal courts, alleging it's an inherent violation of their constitutional rights.

In 2009, 3rd District Judge Denise Lindberg, who presides over legal issues involving the trust, ruled that a liquidity crisis of the UEP trust made selling trust property 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, which was filed in 2008 and challenged the administration of the trust, 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."

The FLDS Church has continued to challenge in 3rd District Court the state's administration of the trust.

In the Utah Supreme Court order issued Tuesday, Chief Justice Christine Durham said the federal court's ruling — which stated that it would be "inequitable in the extreme to dismiss this case" due to lack of diligence — may impact the resolution of the other related cases still pending in state court. She said the court may still need to determine "whether the Reformed Trust is still viable."

"The competing claims and interests of the parties in these cases are too significant to allow their resolution to turn on the federal court's inferences regarding our intent," Durham wrote.

She asked that the parties involved file additional briefs, addressing how the federal court's ruling affects the case before the Utah Supreme Court and whether their previous ruling that the court action came too late would affect future claims of unconstitutionality.

In the meantime, according to court records, Lindberg decided to hold off on any further state court actions after the federal court ruling and "pending further appellate action."

e-mail: emorgan@desnews.com Twitter: DNewsCrimeTeam

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