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Appeals court upholds sale of FLDS assets, overturns federal ruling

Published: Monday, Nov. 5 2012 6:53 p.m. MST

On Oct. 2, the Supreme Court ruled that their ruling did preclude any "subsequent action on the same claims between the same parties."

"The point of the ruling out of Denver is that Judge Benson made a mistake of law and he should have dismissed the case when it was filed with him," assistant attorney general Peggy Stone said. "That mistake was that the FLDS Association had already brought claims like these constitutional claims before the Utah Supreme Court in a previous case … and the Utah Supreme Court denied those claims, saying that the FLDS Association had waited too long to bring them."

Neither the Utah Supreme Court nor the 10th Circuit looked at the constitutional claims brought by the FLDS.

"(The 10th Circuit said) we're not going to address the merits of those constitutional claims, because you waited too long — they're just over," Stone explained, adding that a legal principle of res judicata, pointed to by the 10th Circuit, should have seen Benson dismiss the case. "(Res judicata means) once you've had your bite of the apple, you don't get another one."

Briscoe wrote about some of the reasons used by the Utah Supreme Court, which included "a lack of diligence with no adequate explanation from the FLDS Association for its three-year delay in filing its petition … (and) the related injury resulting from the FLDS Association’s lack of diligence to individuals who have relied upon the state district court’s final order."

"It's a longstanding doctrine that if you sit on your rights too long, you could lose your rights," Shields said.

He believes that the reason the FLDS waited so long to file their lawsuit in the first place goes back to Jeffs. He said Jeffs told his followers not to do anything about the state seizure of the trust. Part of that, Shields said, has to do with his belief that the FLDS were planning to abandon Hildale and Colorado City in favor of the Yearning for Zion Ranch in El Dorado, Texas.

"We noticed that as soon as the Texas thing didn't go as planned, (that's) when they came back and started asserting rights here," Shields said, referring to a 2008 law enforcement raid on the YFZ Ranch. "I think it's logical that they were going to leave. You read the writings of Warren Jeffs … and they didn't care what happened to the trust. … But when they lost their plan in Texas, 'Whoa. We better care' — they started to come back and fight."

The 10th Circuit ruling doesn't solve all the trust problems, however. There is still the question of who will pay the more than $5.6 million in fees owed to Wisan, Shields and others hired by the state to administer and represent the trust. The Utah Supreme Court ruled in August that the Utah Attorney General's Office should foot the bill until the trust can pay for itself.

Stone reiterated this Monday, as she said the 10th Circuit ruling means trust assets can be sold and used to generate funds to pay the fees, "which is how it's supposed to be."

Wisan said there are still "over 20 lawsuits outstanding or open" involving the trust, some of which need to be resolved before they start distributing or selling property. Shields said the state should pay them, as ordered, and the trust funds can then repay the state.

Wisan would like some "interim funding" to allow him to get going on his hopes for the trust.

"The genesis of my plan is to authorize a group of community members to make the decisions regarding the distribution and either I or Judge Lindberg, or both, would be an appeal process," Wisan said. "The committee or board of community members would make the distribution process decisions — instead of the fiduciary."

Utah officials plan to hold a town hall-style meeting Nov. 30 in St. George for church leaders and members or ex-members asserting rights of ownership.

E-mail: emorgan@desnews.com, hollenhorst@desnews.com

Twitter: DNewsCrimeTeam

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