An appeals court in the District grappled Tuesday with a thorny case involving control of $3 billion in assets of the Unification Church and whether judges are violating the First Amendment if they try to settle the dispute over how the money was used.

The three-judge panel seemed wary of wading into the dispute, suggesting it was wrapped in ecclesiastical questions of church hierarchy and mission that the courts aren’t able to sort through.

On one side is the Family Federation for World Peace and Unification International, which says it is carrying out the wishes of the Rev. Sun Myung Moon, the late founder of the global church.

Opposing them is Preston Moon, the late reverend’s eldest son, who at one point appeared to be the reverend’s successor before having that called into question.

The Family Federation says Preston Moon and his Unification Church International (UCI) took money and property that was supposed to go to the church’s mission — some $3 billion worth, in current value — and siphoned it away to his own projects.

Cathy Hinger, who represented the Family Federation, said if her clients are allowed to make the argument in lower courts, they could prove Preston Moon acted out of bad faith and self-dealing, and that the money should revert to the federation.

“The issue is the transfers became a vehicle to essentially launder the D.C. nonprofit assets of all the protection and guardrails of the D.C. nonprofit laws,” she told the court. 

But Jacob Roth, who represented Preston Moon, said his client was faithfully carrying out the church’s mission — and he said the First Amendment means the courts shouldn’t get involved.

That argument seemed to appeal to Judge Joshua Deahl.

“To me when you say it’s bad faith, it keeps coming back to true, if not being used to advance Unification [Church] purposes. But in order to say that requires some religious determination that I don’t really have the capacity to make,” the judge told Ms. Hinger.

He offered up a hypothetical, asking what if Rev. Moon, who was the undisputed leader of the movement before his death, had made the same moves as Preston Moon.

The judge said there would be no argument that the moves furthered the church’s purpose — so that means the argument over Preston Moon isn’t about the decisions, but rather who made them. And that, he suggested, is a matter of church doctrine the courts have declined to consider.

Judge Deahl added that a lot of Rev. Moon’s projects were personal, including support for The Washington Times, which he founded in 1982.

“Raising your profile seems part and parcel with raising the profile of the church,” Judge Deahl said.

Ms. Hinger said Preston Moon’s moves went beyond that, and constituted self-dealing. She said the Family Federation could prove that at trial.

Judge Vijay Shanker said he didn’t see anything in the documents to back up those allegations.

“Where is the self-dealing?” he asked. “It is not a trial issue. It is a pleading issue and a summary judgment issue.”

The legal battle has been kicking around the city’s courts since 2011, and has been before the same appeals court before, too.

The last time, in 2022, the appellate judges ruled that the First Amendment claims generally shielded Preston Moon and UCI from the legal challenge, but told the trial court to delve more deeply into the fraud claims. Judge Deahl was part of that previous decision.

Derek Shaffer, who represented UCI, told the court on Tuesday it was time to shut down the proceedings.

“It has taxed the parties. It has taxed a religious movement to no end,” Mr. Shaffer said, adding that he thought continuing the lawsuit is bad faith.

The legal issues involved in the case have attracted attention from other interests, with a coalition of child welfare and anti-clergy abuse groups backing the Family Federation. In their brief they said using the church autonomy argument to shut off legal action would be a dangerous road to take.

“For too long, the failure to adjudicate claims where religion was superficially involved enabled institutional bad actors to seek shelter from the very laws that were designed to deter their harmful activities,” said the groups, led by Child USA. “The Catholic Church’s clergy-abuse era is strong testimony to the cost to society of religious institutions that seek to relegate themselves to the private sphere, where unchecked, they may harm untold numbers and obstruct the administration of justice.”

The Washington Times was founded by Reverend Sun Myung Moon and Hak Ja Han Moon and is owned by Operations Holdings Ltd., a business subsidiary of the Unification Church. Editorial control is vested in its independent professional journalists.

• Stephen Dinan can be reached at sdinan@washingtontimes.com.

• Alex Swoyer can be reached at aswoyer@washingtontimes.com.