THE BATTLE OF PORTLAND
Men in general judge more from appearances than from reality. All men have eyes, but few have the gift of penetration. — Niccolo Machiavelli
Everything hung in the balance at the spring, 1985 trial of Julie Christofferson-Titchbourne vs Church of Scientology. This was the very case that my brother’s friend had tried to tell me about in 1977 in Portland, when he was making an effort to get me out of Scientology. Christofferson was a young woman who had taken a simple Communication Course. It was the very Communication Course that I had taken, at the same Portland mission I’d attended.
Christofferson had, however — according to her — an experience completely opposite to my own in taking the course. She and her Flynn-allied attorney Garry McMurry claimed that she was defrauded into taking the course in the first place, by false representations about L. Ron Hubbard’s credentials and Scientology’s scientific guarantees to bring her health, joy and happiness. According to the lawsuit, the course hypnotized Christofferson and the mission subsequently used that hypnotic state to turn her against her family. The case had originally gone to trial in 1977, and a Multnomah County jury had returned a verdict in her favor for more than two million dollars.
In 1982, the Oregon Court of Appeals reversed and remanded the case for new trial. The appeals court decision was one of our first major religious recognitions. While Miscavige took full credit for the victory with L. Ron Hubbard, in fact he had served as little more than a nuisance to its accomplishment. The case had already been argued and was pending decision when Miscavige’s Special Project came on the All Clear scene in 1981. His then-deputy Starkey had attempted to intervene in the matter, and wound up blowing off the attorney who would ultimately win the great precedent, Charles Merten.
Merten refused to re-try the case because of his disgust with the church’s new order. But he had already briefed and argued the appeal of the 1979 verdict, so there was no way for the Special Project to mess that up. Had it not been for the original Christofferson case appeals court decision, we likely would not have attained several of the more minor — but useful in their cumulative effect — religious recognition precedents we did wind up achieving through the perilous fight for an All Clear.
A new trial lawyer had been retained in Portland to try the case. Ted Runstein was a personable, seasoned and successful trial attorney. He was, however, demoted to ride shotgun to Earle Cooley and keep his mouth shut as local counsel after saying something for which Miscavige never forgave him. Runstein had suggested that “the jury needs to hear from some real Scientologists from the witness stand.” Miscavige replied that we have plenty of Scientologists on our witness list. Runstein countered, “Those are all Sea Org staff; I am talking about having them hear from Scientologist parishioners who live and work in the same community as the jurors — real Scientologists.” Miscavige snapped, “Sea Org members are real Scientologists, public Scientologists are dilettantes.” Miscavige ruminated on this affront by Runstein throughout the trial, calling him a “theetie-weetie, airy-fairy idiot” behind his back.
So when Earle Cooley rolled into town he had free rein.
David Miscavige, as the chairman of the board of Author Services, would spend the next several weeks in Portland supervising and dictating every last detail of the trial. He was going to show me, the dozens of other attorneys he categorized as “defensive losers,” and the entire OSA network how a trial was conducted, Scientology style. No more counter-intention from lawyers who knew best. He had a soul mate in Earle, so that in his view L. Ron Hubbard’s slash-and-burn policies with respect to detractors and attackers would run into no internal interference. David Miscavige would prove to Ron once again why he needed him to ramrod his intentions through. Hubbard himself was apparently incommunicado, as evidenced by little to no dispatch traffic arriving — which made Miscavige’s two-month, full-time battle of Portland stint possible.
We rented a number of units at a downtown condominium, walking distance from the courthouse. One unit was inhabited by Earle, his long-time mistress Jeannie and their fourteen-year-old son. Another one-bedroom unit was occupied by Miscavige and me. Another was reserved for a couple of Office of Special Affairs staff, and served as a document preparation area and repository. We had a dozen more staff working out of the offices of the mission, which were only a few blocks away. One more condo unit was occupied by Earle’s partner and protégé, Harry Manion.
Harry would prove pivotal to the case, though he did very little speaking in court. Harry was in his early thirties. A big, strapping man — if overweight, like Earle — with a boyish face and an infectious smile and personality. Harry was the archetypal hale fellow well met. He had a glib, friendly word for everyone he encountered, and a natural ability to make people feel comfortable and light. Harry had something else going for him. He was a former college and minor-league professional baseball player, and that really meant something to the judge.
Judge Don Londer was respected by many locally. But because he was Jewish, he was not really accepted into Portland’s traditionally WASP judicial circles. Londer consider himself an old jock, often reminiscing about his boxing career during his younger days in the Navy. He was also a decent, considerate man. However, he was not very bright. In the condo we used to joke that maybe he had his lights knocked out one too many times during his boxing career. But because Harry was a real professional athlete, in Londer’s eyes Harry could do no wrong. Harry struck up a relationship gradually by arriving a little early to court, and thus “bumping into” the judge regularly. The latter always wanted to hear jock war stories from Harry. Harry was the son Don Londer wished he had fathered.
In Miscavige’s view, the Christofferson case was the perfect test case. Christofferson had only ever had a few months engagement with Scientology. She had spent a total of $3,000 on auditing and courses. She had not been harassed by the Guardian’s Office. The court of appeals had already ruled that she could make no case for infliction of emotional distress/outrageous conduct.
Her only remaining cause of action was for fraud. The court of appeal had even narrowed the issue to whether the representations made to her were motivated by sincerely-held religious belief.
In retrospect, it was probably the stupidest move imaginable to not settle the case before trial, for those very reasons. Christofferson claimed fraud primarily based on alleged false representations about L. Ron Hubbard’s pre-Scientology credentials. These were the very issues aired in the Armstrong case, which had made an All Clear all but unattainable. By going to trial, we were affording a woman — who effectively had no damages to claim — a worldwide platform to replay the Armstrong inquisition all over again. Except this time Flynn’s stable of witnesses was bolstered by the former Executive Director of International Scientology, Bill Franks, and the former head of the organization Christofferson had interacted with — the Scientology Mission of Portland, Martin Samuels.
Samuels had been the owner of the Portland mission when both Christofferson and I were parishioners there. He was the owner of the Portland mission when the first Chistofferson trial played out. Samuels had joined the Flynn camp shortly after being expelled, during Miscavige’s mission holder purges of 1982. Samuels testified in the first Christofferson trial on behalf of the church. In the second trial we knew that he would testify that the mother church had not only run every single detail of the trial, but even forced Samuels to lie on the witness stand. And thus Christofferson II was rather a cinch for the Flynn camp to hit the mother church with a sizable judgment (something that had not occurred in the first trial).
But Miscavige — and thus we — looked at it in the simplistic, black-and-white, good-vs.-evil worldview of L. Ron Hubbard. This was our big opportunity to play it all over again. In our view, the 1979 Chistofferson verdict had been what motivated Flynn and FAMCO in the first place.
All of the testimony in the Armstrong trial (including that of Armstrong and Laurel Sullivan) came pouring into the record. More horror stories were added by Samuels and Franks, and by a host of other witnesses. Miscavige and I directed a couple dozen staff, frenetically working through each and every night to provide Earle with material to discredit each witness on cross examination. While direct examination was still in progress, I, Miscavige and several other staff would pore over the real-time transcripts being relayed from court, marking them up for every bit of discrediting documentation we had available in a massive file room at the mission. When the court day ended, we would huddle with Cooley and outline the preps required for the cross exam the next morning. The crews stayed up until 1 or 2 every night, putting the material together and getting final ok from me and Miscavige. Then we would sleep for two to three hours, wake up at 4 a.m. and prepare to meet Earle in his condo at 5 a.m. We would spend the next three hours briefing him on details about how each witness had lied, exaggerated, and twisted the truth or was somehow morally reprehensible. We liberally used material from the ethics records from their days in the church, even copying internal reports to use on cross. This went on for weeks. We continually engaged in echo-chamber, confidence-reinforcing sessions, reviewing how Earle had so thoroughly destroyed each witness’ credibility.
There were external indicia to support our overconfidence. Earle Cooley brutalized the plaintiff’s witnesses on cross examination. So dramatic were his cross exams, that each day Earle was up, the courtroom was packed with local lawyers. They had no interest in the case itself, but Earle’s cross examinations were so dramatic that word had spread through the legal community that Cooley was the best show in town. They were there only to watch a master of their own trade at work. What we were blind to was the cumulative impression that so much manhandling conveyed.
We received a wake-up call of sorts in the middle of the plaintiff’s case, but collectively chose not to heed it. We had planned to enter the covert Armstrong-Griffith-Park surveillance tapes into evidence during the cross examination of Armstrong. Earle set up Armstrong masterfully, leading him to deny that he had ever talked to anyone about taking over the church, orchestrating federal raids, and least of all manufacturing and planting documents in church files. Then Earle started quoting Armstrong from transcripts of the surveillance tapes, clearly demonstrating he was lying from the witness stand. The warning we did not heed came in the form of Judge Londer’s reaction to the courtroom spectacle. In chambers he loudly chastised the church’s behavior in being involved in such cloak-and-dagger activity to begin with. Londer, who clearly did not think much of Chistofferson’s case based on comments he had made up to that point in the trial, was more disgusted with the secret video-taping than the lies they revealed. Had we not been so thoroughly in the throes of a thought-stopping, alternate-reality creation, we might have given thought to how the jury felt about the aggressive, “gotcha” manner we were using with all the plaintiffs witnesses.
Even though it backfired in the case at hand, getting the Armstrong surveillance videos on the public record would serve as a major step in dealing with the more serious government threats of criminal indictments then still extant. The stakes were far higher than merely the Chistofferson case, and there was a great deal of tension in getting the tapes put on the record. We did not want to submit the producer, private eye Gene Ingram, to cross-examination, for fear that he would be forced to disclose anything about the increasing number of operations he was privy to. In the course of coordinating the transportation of the tapes to Portland and into the hands of church coordination attorney John Peterson, Miscavige insisted upon bypassing me and speaking directly to Ingram — something he had not done up to that point in time. I advised him that was a bad idea, should Ingram or he ever be subject to deposition.
I picked up the phone to make the call to Ingram, and Miscavige came flying at me — tackling me into a sofa and attempting to wrestle the phone from my hand. I would not relinquish my grip even though he was strangling me. I threw my chest out to buck Miscavige from me. He violently stabbed his fist into my chest and said menacingly, “Don’t you ever cross me,
motherfucker! I’ll have you declared [excommunicated] in a heartbeat if you ever fuck with me again.” I looked Miscavige in the eye for a moment and considered the weight of that statement. For four years no one on planet earth could communicate to L. Ron Hubbard but through Miscavige — not even his wife. Miscavige was the recipient of personal communications on a weekly basis from Hubbard — but for the extended periods the latter went incommunicado entirely. He was right, he could have me declared in a heartbeat, and all I’d fought for to date would have been for naught. I handed him the phone. He had established himself — much as he had done with Mary Sue Hubbard — as boss buffalo.
So dramatic were Earle Cooley’s cross examinations that we were all swept into the sweet oblivion of the drama of it all. We heard from Judge Londer, through Harry, and we heard from dozens of lawyers who attended as spectators and students: Earle Cooley was magnificent. Earle huddled us up in the condo one evening over beers.
“Have you guys ever heard of Percy Foreman?” Earle asked us.
We all replied that we had not.
“Foreman was one of the premier trial lawyers in American history. He once defended a woman who was up for a murder rap in Miami. The government brought a bunch of scumbag convicts in to bolster their case against her. Foreman demonstrated on cross examination that the testimony was obviously paid for. When he saw the jury understood that, he surprised everyone. After the case in chief, he rested the defense without calling a single witness. He wanted those cross examinations fresh on their minds when they went to deliberate.”
“Brilliant!” exclaimed Miscavige. “We don’t want to serve up our people to McMurry anyway.”
“Exactly,” Earle replied, “sending in Runstein and his ‘real Scientologists’ would be like sending sheep to slaughter.”
“You’re fucking-A right, Earle!” Miscavige proclaimed, as final authorization of the strategy.
And so Earle Cooley shocked the judge, the plaintiff’s team, and all who were watching when he announced the next morning in open court that the defense would call no witnesses, and rested. Judge Londer thought it was a great idea. He didn’t want to sit for another several weeks on this case. And he agreed with Earle that the plaintiff had never made a case worth a hill of beans. It was judge Londer’s nonchalant manner of dealing with jury instructions that helped set us up for the shock of our lives. Londer told Earle and Harry to relax on their stressed arguments to attempt strict control of the jury before their deliberations began. He said, “Hey, what has she got, three grand in damages? The jury isn’t stupid.” And so, with the judge’s assessment of the merits, we were optimistic — albeit nervous — as we awaited the verdict.
Nobody was prepared for the result. On a Friday afternoon the jury awarded Christofferson $39 million. That not only buried any idea of an All Clear, it put the church’s very future at risk. Earle Cooley wasn’t sure why he did it, but he asked the judge to hold off on recording the verdict for a few days. The judge wasn’t sure why either, but he granted Earle’s request.
Miscavige had flown back to Los Angeles after closing arguments. Cooley left that night for Las Vegas to blow off steam and to try to deaden the devastating loss with a weekend of amnesiainducing recreation. In a way, I was left alone holding the bag at the scene of the crime. Early Saturday morning I met with two associates of our local counsel in their Portland office. We frantically traded ideas for challenging the verdict before the case went up to the court of appeals for the two-to-three-year appellate process. One of the associates was a cheery, bright British woman. She came up with a wild idea. Since the verdict had not yet been recorded, we could still make a motion concerning the case before the lower court. That court retained jurisdiction until such time as the verdict was recorded.
We reckoned that since there were motions brought by our side continuously, against prejudicial matter being entered into evidence throughout the trial, and since those motions had been consistently denied, there was no way to challenge rulings already made along the way. However, what if we brought a motion for mistrial based on what was put before the jury during closing arguments? That was the one small window of trial history we had not already brought legal challenges to. With Cooley incommunicado, we got busy dissecting the transcript of the closing arguments to find something, anything we could hang our mistrial motion on. We noted some particularly prejudicial statements that plaintiff’s counsel had made, and drafted a motion for mistrial on the basis that the statements were so outrageous and prejudicial as to have potentially caused the jury to act on passion and prejudice, rather than on the evidence presented over several weeks of trial.
When Cooley returned at the end of the weekend, he thought the motion was brilliant. We filed it early the following week. Harry Manion artfully used his weeks of informal credibility-and-sympathy- building with judge Londer to obtain his agreement to set a hearing for a few weeks down the road, to consider the motion. Londer would not and did not ever record the jury’s verdict.
Miscavige returned to Portland and we had a conference in Cooley’s condo with a couple of legal staff. Miscavige was distraught and desperate. He talked of moving L. Ron Hubbard and Scientology management to a South American country in order to assure the church’s future survival. We discussed how with a 39-million-dollar judgment being publicized internationally, the three dozen similar FAMCO suits heading toward trial, and the DOJ and IRS champing at the bit to clean up anything remaining after the damage was done, the United States was about the least safe territory in the world for Scientology.
Miscavige railed about the stupidity of Judge Londer, how he continued to allow the trial to go out of control while reassuring us that the worst-case scenario was a few thousand dollars in damages. He ruminated how a mighty institution like Scientology could be brought to its knees by a group of degraded “wogs” (non-Scientologists) from a cow town. His own characterization prompted a lightning bolt from the blue.
“I got it!” he exclaimed. “We’ll take over this shit-hole town. I’ll bring in one hundred thousand Scientologists from around the world and we’ll surround that courthouse and make this town comply. We’ll overwhelm them. We’ll overwhelm not only the judge but every other criminal judge he talks to in his town.”
The battle of Portland had only just begun. We called in every Public Relations officer assigned to every church of Scientology in the world (several dozen) and gave them orders to call every person who had ever taken a service at each local church and order them to get to Portland for the biggest, most important event and contribution they would ever make to Scientology. Ken Hoden was pulled out of mothballs and put in charge of the “religious freedom crusade.” Hoden had been the Guardian’s Office person in charge of external affairs in Portland during the original Christofferson case appeal. Miscavige and Starkey had busted him and relegated him to backlines PR work in Los Angeles back in 1981, when they decided he had screwed up the appeal of the original case (the result of which was ultimately the vacating of the original two million-dollar judgment, and Scientology’s strongest religious recognition to date). But now Hoden was integral — he was the only one who knew the ropes in Portland, as well as all allies of the church and public officials in the Portland area. Hoden was instructed to wear a religious “dog collar” shirt and coat at all times in public. He would be the spokesman and he would position all utterances along the line that the Christofferson judgment was the worst assault on religious freedom in the United States in modern times.
Within days, several hundred Scientologists had shown up in Portland. Hoden organized them up, made signs and began regular marches around the courthouse. The trademark chant of the crusade echoed down the streets of Portland:
Hoden: “What do we want?”
The crowd: “Religious freedom!”
Hoden: “When do we want it?”
The crowd: “Now!”
Initially, the protesters came across as angry, in compliance with Miscavige’s orders to intimidate the city into compliance. As Miscavige was back in LA, and there was no allowance
for discussion of mitigation of his ideas, instead Hoden discussed with me the need to tone it down and create a far less threatening and far more dignified presentation. I told Ken he was right, and told him follow his instincts, just learn to report to Starkey and Miscavige in the language they liked to hear. That was to emphasize, in briefing them, how loud you were, how numerous you were, and how shocked and awed the public watching was — while taking a slightly different approach in conducting affairs on the ground. It was an art I had come to learn out of necessity, to avert many church catastrophes over the years.
Ken got the knack of how to play shock absorber to the brass — and did a masterful job in controlling the masses in a fashion that had maximum impact. Over the next week, thousands of Scientologists showed up and the regular protest marches easily surrounded the entire block the courthouse occupied, with parishioners marching in ranks of several abreast. Hoden took care to brief each arriving Scientologist on the importance of being polite and friendly, cleaning up after themselves and generally creating a good impression of “regular Scientologists.”
We wound up having two hearings before judge Londer, separated by several weeks. As much as the crusaders were creating the impression we wished they would, Londer could not wrap his wits around the constitutional arguments we were making. In one chambers meeting with counsel, he uttered something which, despite the public relations gains we were making with the “religious freedom campaign,” flagged our hopes of success. Earle Cooley had made a lengthy presentation, backed by citations to court case precedents. Londer had seized on one particular case that Cooley cited, buoying our attorneys’ hopes that he might understand and adopt our position. After a back-and-forth conversation about its parallels to the case at hand, Londer shocked them all by saying, “Wait a second. That was a court of appeals decision; this isn’t a court of appeals.” Of course, all legal precedent is created by opinions rendered by courts of appeal, and these are binding law for the lower courts to apply and follow. Londer’s statement belied a challenged cognitive capacity. As Earle Cooley put it, “Oh my God, we’re in the hands of the Philistines!”
We kept orchestrating Harry’s having “chance” encounters with Judge Londer, hoping to divine where he stood and hoping that he might begin to understand this case was not only important to the church and Earle, but to Harry’s future. Try as he might, Harry would come back from his meetings befuddled. His refrain was that Londer was as dumb as a sack of rocks, and he couldn’t tell whether anything we were presenting was getting through.
On the afternoon prior to the final hearing and the announcement of decision on the mistrial motion, Earle, Harry and I sat in Earle’s hotel room in Portland preparing our arguments. We had a last-minute brief to file, and had purposely waited until mid afternoon, when we knew Londer took a break. That way, when Harry was bringing the brief into the clerk, Londer might see him and invite him into his chambers for a chat. That went like clockwork. Earle and I beseeched Harry to call in any chips he might have with Londer. Earle told Harry to tell him outright that Londer needed to do this for Harry. Harry reported back that he had schmoozed with Londer, but that it wasn’t appropriate under the circumstances — open chambers doors — to make his ultimate personal pitch. However, Londer had invited Harry to come to his home that evening to meet his wife, since it might be the last time they would see one another. Harry had not committed, out of concern for doing something that would smell of impropriety and could come back to haunt us.
Earle and I discussed the matter in some detail. He explained the downsides of a visit — if it were ever found out it could raise the ugly specter of the decades of GO improprieties we were attempting to live down. “On balance,” Earle said, “this is up to the client. You need to brief the boss [Miscavige] and I’ll trust his instincts.” I called Miscavige and briefed him on all that had transpired. He said, “What is your hesitance? It’s a no brainer. Of course he sees Londer, and he does whatever he has to do to get the product.” I told Earle the verdict. Earle told me, “Okay, now it’s between me and Harry. I’m going to protect you and Dave. Leave it to me.”
Earle did report that Harry had gone to Londer’s home. He did not give particulars beyond saying that Londer was thrilled with the visit. He gave no guarantee of any particular outcome, “But,” Earle added, “tell Dave to relax.” And then Earle told me an anecdotal aphorism he would repeat several times to Dave and me over the next couple of years. He said, “Here is my only test of friendship. I know you are going to testify tomorrow in front a grand jury investigating me.
Do I sleep tonight…or don’t I?”
Even though Earle said he would sleep well that night, I did not. Of secondary importance was my own life. I was so thoroughly invested in the crusade to protect LRH and Scientology that the possible impact on them loomed larger than my own spiritual death — which would be a virtual certainty if we did not win. As I had learned by then on Hubbard’s lines of operation, there had to be a head on a pike after a catastrophe of this magnitude. And I had been around Miscavige long enough to know that regardless of his having micro-managed every move in the trial, down to strangling me the first time I attempted to counter him, it would not be Miscavige’s head on this particular pike.
The next morning, the Multnomah County Courthouse was surrounded by Scientologists. The hallways and wide stairways inside were packed with Scientologists, from the front door,
through the lobby, up to the third-floor courtroom of Judge Londer. Londer gave a touching soliloquy about how well the “real Scientologists” who had descended upon Portland had
conducted themselves. He said he might not have been so gracious and polite had his own religion been compared to botulism soup, as plaintiff’s counsel had done to the jury. He found
such conduct to be extremely prejudicial, and in violation of his own orders — having already determined that Scientology was a religion. The judge granted the mistrial motion, wiping out in one breath the $39,000,000 judgment.
After having survived a nuclear explosion by, among other things, successfully defrauding the court as to L. Ron Hubbard’s inaccessibility (Ron had been a named defendant, but we managed to get through the entire trial without the issue of his personal liability ever being adjudicated), Ron had two handwritten messages relayed to Miscavige. The first was a short note to the “real Scientologists,” the crusaders, commending them for having pulled off a feat of historical proportions by influencing the winning of the mistrial motion. The second consisted of two words and a single letter, sprawled across a full page in Ron’s signature style. It read, “Earle, congratulations! — R” The “R” stood for Ron, a signatory he had used for years on internal church dispatches.
Two months later, at our annual Sea Org Day celebration, Miscavige and I would be awarded special medals of honor, of a type never before issued by Ron. We had slipped on a banana peel and somehow managed to fall on a fur rug.
By Dan Garvin
9 November 2003
In the summer of 1985, I had been in OSA Int for less than a year. I was in charge of external computerization for OSA, which meant I got to go all over the place setting up and taking care of anything that had a CPU and wasn’t inside OSA Int. Up in Portland, Oregon, the “Christo Trial” was getting going. There was already a Trial Unit of OSA Int, OSA US, local DSA and other staff and some volunteers. Some attorneys were also in Portland —Earle Cooley was the main one I dealt with. Miscavige was there, as were Marty Rathbun, Mike Sutter, Lynn Farny, Ken Long, Karen Hollander, and many other names you’d recognize. Many famous SPs were there too. Somebody got a nice picture once of Gerry Armstrong flipping the bird at the camera as he was leaving the courtroom.
The Christo Trial was a damages suit by Julie Christofferson against the Church in Portland for, IIRC, fraud and emotional distress and a number of related torts. By that time she was Julie Titchbourne, but we still called the case Christo in OSA. After a while, I was called up from LA. There were two or three condominiums in the same building in downtown Portland, near the courthouse. One was Earle Cooley’s; one was the work and research area for the OSA Int execs and senior Legal personnel; I think there was a third one for the ASI/RTC personnel (at that time, Miscavige was still calling himself ED ASI, although he was just as much the boss of everything as he is now, at least as far as OSA was concerned). These condos were fairly luxurious. The lesser beings worked in the Trial Unit at the Celebrity Centre. I got to work in the OSA Int Condo, although I slept in a hotel some distance away.
The reason I was brought up is that they wanted transcripts of the proceedings loaded into computers on a daily basis so they could be searched by Cooley, Farny, Long, et al. At first, so I was told by one of the attorneys (probably Tim Bowles), we were not even supposed to have been given the transcripts. Only the attorneys were allowed to have them, for some reason. So our attorneys of course violated this order and gave the transcripts to me and to other personnel. But I got pretty crappy copies. I had miniature duplicates of the INCOMM computers set up in the condo. They were made by a company called WICAT, and they had a Unix-like proprietary operating system. We had one or two OCR – optical character recognition – machines set up. In those days, OCRing was pretty primitive (or prohibitively expensive), and these could only handle certain fonts, which had to be in very good condition. So the crappy and illicit copies we were getting had to be mostly typed in by hand, and for that there were about a half dozen personnel who had been doing that type of thing in LA.
Later they got permission to let us have copies of the transcripts, and the quality improved vastly. The other typists were sent home and I was pretty much running the whole computer show. I could OCR and correct everything by myself. We had huge rack-mount tape drives with twelve- or fourteen-inch reels, each holding 10 MB of data. I used these for backups and to transfer the data up to the computer in Earle Cooley’s condo. The information was loaded into a database that INCOMM called FAST, which was like SIR, or Source Information Retrieval, which is all the LRH issues (of all kinds, and advices too for those authorized) in a searchable database. FAST was the same system exactly, but for non-LRH material. OSA was inputting all the documents in all legal cases, and later added just about everything else as well. When a case was going on, everybody would rush to get it into FAST as soon as possible so the legal vultures could pick it over for anything they could use to win points the next day in court.
The Christofferson case is a fascinating story, but one I don’t know very well. What’s relevant to this post is, we lost. The jury awarded Julie Titchbourne something like $30 million. Nothing like this had ever happened before (so I was told and believed). The loss would set a precedent and all the other “frivolous” deep-pocket lawsuits against Scientology churches would fall like dominoes in favor of the enemy. We were crushed. I had not been in the courtroom once the whole time I was there, but I came down to hear the decision – and share in the victory. When I heard the award against us, I literally did not know what to do. I thought it was the end of the world, or pretty close. It was impossible and unthinkable. Our religion could be shut down by ambulance-chasing attorneys and professional victims. I wandered out of the courtroom in a daze. I went down to a park in town and just walked around. Everything seemed surreal. But I realized we would not just cave in. We would appeal. We would fight with every ounce of our strength, and when that was gone, we would still fight on. I started to feel a little better. All the same, it was unbelievable. After all, RTC and ASI were running things directly, and if anybody would make sure LRH legal tech was standardly applied, they would — and still we lost. Man, there must be some heavy-duty corruption going on behind the scenes, to create such a miscarriage of justice! Well, we’d find that, too, and somehow we’d win. We had to. The survival of the world depended on it.
So I got tired of moping and headed back to the condo. The execs and OSA guys were there; I don’t remember which ones but probably most of the ones who normally worked or attended conferences there. Nobody was saying much; it looked like everybody else hadn’t finished moping yet. So I took a hint and resumed moping. Every once in a while somebody would wonder what the hell we were going to do, or what went wrong, and speculate about how bad it was going to be. After a while, the CO OSA Int, Mike Sutter, spoke up. He said (paraphrasing), “I don’t care if she thinks she won. That bitch is never going to see one single cent. I’ll kill her first. I don’t care if I get the chair — it’s worth it. It’s just one lifetime.”
I froze. I wasn’t moving much to begin with, but I froze solid. I didn’t want to breathe. I forgot all about our immediate problems. My CO had just said he was going to murder Julie Titchbourne. He was absolutely serious. I was in shock. Sure, she deserved to die — all SPs did. But you can’t actually do that that sort of thing. My thoughts raced. Please, I thought, please, somebody say something that will make this stop. I was trying to think what I could say. If I said the wrong thing, or said it the wrong way, I’d be out of there that night and getting sec checked the next day. But this was madness!
There was not a sound in the room. It seemed like ten minutes but was probably only one. Finally Miscavige spoke up. Here’s what he didn’t say: He didn’t say, “Sutter, you’re fucking crazy, we don’t kill people!” He didn’t say, “You’re joking, right?” He didn’t explain that Julie’s estate would still get the money or that killing a plaintiff would be a hundred times worse for the Church than paying her even the whole $30 million. He just said, “No, this is what we’re going to do.” And then launched what within a day or two became the Portland Crusade.
The Crusade, along with a lot of flanking actions and, according to Cooley, his own research in the database I’d put together for him, worked, and the Judge, Londer, eventually threw out the decision. Julie would have had to start from scratch, with much tighter restrictions on what was admissible as evidence. I guess they just gave up.
Julie deserved that money, or at least some compensation for being screwed over by Scientology. I’m sorry for my part in stopping her from getting paid. But, then again, if the Crusade and everything had failed and she had won in the end, I wonder if Sutter would ultimately have made good on his promise to murder her. Even if the estate still collected Julie’s money, it sure would have made other plaintiffs think twice about their own cases. It may be that Julie’s loss is the only reason she is alive today.
One thing I am absolutely certain of: When Mike Sutter said he would kill her, he meant it, absolutely and literally. He certainly was not reprimanded or corrected at the time by anyone for suggesting this, and if any action was taken against him later, it was nothing I ever heard about – nor did anybody ever pull me aside and say, “You know we would never actually do that, right?” or some such. In fact, a few months later he was promoted to RTC. He was still in RTC as late as 1995 or so. I don’t know if he has been seen in the last few years. That could mean a number of things. He could just have a post that never requires him to leave the Gold Base, or he could have gone to the RPF, or he could have been transferred somewhere else on some secret post or mission. Or, for all I know, he could have gone off to do the Hit Man Full Hat and Apprenticeship.
Hubbard’s Code of Honor says, near as I can recall, “Your honor and integrity are more important than your physical body.” Also, the third and fourth dynamics (the group Scientology, and all mankind) are more important than anyone’s first dynamic (self — an SP’s life or the life of whatever hero murdered the SP). To the average Scientologist and perhaps the average SO member, this interpretation of those ideals may sound extreme, even beyond extreme. As one nears the top of the ladder, though, I think they’re pretty typical. What may not be typical is the willingness to actually go through with it, mainly because the repercussions on Scientology would be far worse than the consequences of not committing the murder.
Lurkers, those of you still in the COS— this is a glimpse at a side of RTC that you don’t hear about at the International Events. Next time you’re watching David Miscavige spewing his glib, formulaic PR at you, try remembering that this is a man to whom murdering a plaintiff was apparently just another option, one that he ultimately rejected in favor of a better one, but one he seemed to have no fundamental objections to.
- Retrieved from http://www.xenu-directory.net/accounts/garvin20031109.html ↩
L: Do you know any other executives who left Scientology who would have knowledge of Scientology’s criminal activities?
L: Mark Yeager?
J: Has left?
L: I didn’t know if he was still in or not.
J: That’s the point.
L: Does anyone know if he’s still in?
J: Not me.
L: What about Terry Gamboa?
J: Terry Gamboa would know, Janis Grady would know.
L: They would have known?
J: Janis not so much, but Terry Gamboa would.
L: The type of criminal activity she would be most familiar with?
J: Finance, corporate shenanigans, corporate integrity.
L: Anyone else that you know or has heard of that has left that… Or let me ask this another way, when you were in, what factors were they most worried about?
J: Gerry Armstrong, Lawrence Wollersheim, that girl up in Portland, the Portland case…
L: Julie Titchbourne?
J: Julie Titchbourne?
L: Any other staff?
J: David Mayo.
L: David Mayo.
J: Bent Corydon.
L: Bent Corydon. OK. You have mentioned before that David Miscavige, Norman Starkey, Lyman Spurlock and Marty Rathburn are the four that are most knowledgeable and most involved in Scientology’s past and current criminal activities. Beside those four, you also mentioned a…
J: Ben Shaw.
L: Ben Shaw. What other executives are…
J: Jeff Schriver, as far as the black ops thing. Gary Klinger.
L: Gary Klinger. The people that deal with the most secret stuff in Scientology.
J: Marine Bergatti.
L: Marine Bergatti, she’s out of England?
L: She makes regular trips in and out of the United States, has a passport?
J: Wendell Reynolds would know finance. He could tell you, because he did the whole thing.
L: He would have knowledge related to the IRS.
J: Another secret little person in the back that’s right up there, that’s maybe a notch and a half below David Miscavige is Mark Ingber.
L: He would have knowledge about criminal activity?
J: Financial criminal activities.
L: Any of the other top executives that you know that would be the ones most knowledgeable or most involved in criminal activity going on inside of Scientology?
J: No, I think that covers it all.
L: Besides Marty Rathburn being the weakest link and most likely to possibly turn states’ evidence or leave, rather than go to jail himself when they start prosecuting these crimes, is there anyone else in that group of people that you think would be the second most likely person that would say, “I’m not going to jail for all this.”
J: Lyman Spurlock.
L: Lyman Spurlock, why do you say that?
J: Because he is loaded with crimes, he’s loaded with doing the corporate, I mean, as a matter of fact, Dave Miscavige and Norman could easily point their finger to him and say, “He did it.” It’s not real to people how these people operate under orders, but, because by his hand a lot of things happened.
L: Do you think they would set it up that way that if something happened, you know, the old Mary Sue was not following policy, this is the renegade in the organization. Do you believe that if David Miscavige or Starkey could avoid the criminal charges and frame one of these other people, would they be loyal or would the frame them?
J: They would frame them in a heartbeat. Like I said, Scientology has a theory, a bent theory. We’ve seen L. Ron Hubbard’s wife go to jail based on orders he was having her execute. So, there is no dignity.
In the responses that follow, the Church is providing all of the information the Service has requested in the various subparts to Question 10. It is only fair, however, that the following responses be considered in their proper context, and for that reason we submit the following additional information by way of introduction.
Question 10 relates exclusively to public policy questions, focusing on civil litigation involving the Church. There is no escaping the irony of being asked to catalogue the unsubstantiated allegations of civil litigation adversaries when those allegations often have been manufactured, promoted, disseminated, and even subsidized by a cadre of anti-Scientology individuals within the Service itself. The Church does not believe that the Service as an institution, hates Scientology. We believe there are and have been, however, a core of dedicated “Scientology-bashers” within the Service who have allied themselves with encouraged, and even fixed the tax problems of the principal sources of the tired civil allegations we are now being asked to chronicle.
Question 10.e.i and 10.e.ii request a list of all of the tort allegations that have been made against any Church of Scientology in more than a score of cases arising within the last twelve years and for copies of all verdicts, decisions or findings made by any court that any of those allegations were true. As may be seen in the following responses, two of the only four cases where any such decision has been issued, and a majority of the other cases were instigated or heavily influenced by the Cult Awareness Network (“CAN”).
CAN and its influence on the litigation in question was described in passing at page 10-20 of our response to Question 10 of your second series of questions. There is no escaping the fact that CAN has been able to survive financially and has drawn much of its false veneer of credibility from the Service’s recognition of it as exempt under section 501(c)(3).
CAN was formed in 1975, under its original name, Citizen’s Freedom Foundation. CAN’s activities, from its inception until today, have consisted of negative propaganda campaigns against nontraditional religious organizations and promoting and perpetrating “deprogrammings,” a euphemism for kidnapping people and using force and coercion to dissuade individuals from maintaining their voluntarily held religious beliefs.
CAN applied for tax exemption in March of 1976 as an educational organization. Literature provided with its
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application, however, clearly evidenced CAN’s biased views and its involvement in deprogramming. Indeed this material shows CAN’s close association with Ted Patrick (one of its founders), who has been convicted on numerous occasions for kidnapping, assault and related charges arising from his violent deprogramming activities. It was Patrick who touched off the premier tort case against Scientology when he deprogrammed Julie Christofferson in 1977. (This is further described at pages 10-15 and 10-16 of our response to Question 10 of your second series of questions and infra.)
The IRS denied CAN’S initial application for exemption because “after reviewing your publications, we concluded that a significant portion of your viewpoints were not supported by relevant facts.” CAN reapplied in 1977 but the application and CAN’s accompanying literature showed that CAN had not reformed. Consequently, the Service again informed CAN that its application was being denied because “Your revised application for exemption contains disparaging statements about organizations which are not supported by facts. Your revised application indicates that the reasons for our denial of your previous application are still present.” (Exhibit III-10-A).
CAN did not give up. In July 1978, CAN submitted additional information to the IRS including a “Statement of Purpose, Functions and Activities” which included the claim that one of CAN’s functions was to recommend personnel and facilities for deprogramming. CAN furnished the Service with an example of how CAN would handle a contact from a caller who intended to join the Church of Scientology: referral of the person to ex-members for negative information on Scientology and to an attorney in his or her area, as well as providing the person with a list of “Dos and Don’ts” which included advising the person to file complaints with the government. (Exhibit III-10-B). CAN identified the Church of Scientology as one of its principal targets and the Service granted CAN tax exempt status. (Exhibit III-10-C).
From that point forward until the present, CAN has followed the precise modus operandi concerning Scientology that it described to the Service in 1978. CAN refers individuals to ex-members for negative information about the Church and to attorneys who then create causes of action against the Church that almost always recite the same boilerplate tort claims. As will be seen in the response to Question 1.e.i, a large number of the cases listed in that section have been filed by attorney Toby L. Plevin. Plevin is a CAN member who gets all of her client referrals from CAN in exactly the manner CAN described in its 1978 application supplement.
CAN also continues to be involved in the felonious practice CAN calls deprogramming, which is as flagrant a violation of public policy as can be imagined. While CAN enjoys exempt status
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its deprogrammers are being arrested and jailed by local police agencies and the FBI. Recently, CAN deprogrammers Galen Kelly and Bob Moore, and CAN attorney Robert (“Biker Bob”) Point, were arrested by the FBI and charged with conspiring to kidnap Lewis DuPont Smith, heir to the DuPont fortune, and to “deprogram” him from his support of Lyndon LaRouche’s political organization. (Exhibit III-10-D). At this writing there are several other CAN deprogrammers under indictment as a result of their deprogramming activities, including Joe Szimhart, Mary Alice Chrnaloger, Karen Reinhardt and Randall Burkey. (Exhibit III-10-E). It is troubling that in the face of this kind of evidence individuals in the Service like Jacksonville District EO agent Melvin Blough, continue to use CAN as an investigative arm to drum up false charges against the Church of Scientology. (Exhibit III-10-F).
There are individuals in the Los Angeles IRS Criminal Investigation Division (“CID”) who harbor sentiments about Scientology very much akin to those espoused by CAN, who have directly brought about or have had a major influence on Scientology-related civil litigation. Much of this information has been covered before or is covered in more detail in the responses to specific subparts of Question 10 that follow. Consider the following:
* The decision in Gerry Armstrong’s case is one of those described in detail in response to Question 10.e.ii. Armstrong’s fanatical hatred of Scientology ingratiated him with the LA CID and earned him the status of IRS operative in an unlawful scheme to infiltrate and destroy the Church through, among other things, the seeding of Church files with forged or manufactured documents. Armstrong was a link between the CID and Michael Flynn, whose multi-jurisdictional litigation campaign against Scientology was encouraged and assisted by the CID. (See pages 10-8 to 10-16 of our response to Question 10 of your second series of questions). The allegations, first manufactured by Armstrong and Flynn, have been adopted and parroted by many of the other tort litigants whose cases are described in the response to Question 10.e(i). In exchange, Gerry Armstrong has been insulated from liability for his theft of Church documents and encouraged to continue and to expand his nefarious efforts.
*The Aznarans, whose case was described at pages 10-18 and 10-19 of our response to Question 10 of your second series of questions, left the Church and filed suit for $70,000,000,
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resulting almost immediately in their being embraced by the IRS CID. The CID agents then passed the Aznarans on to like-minded EO agents in Los Angeles who interviewed them, encouraged them to continue their attacks on Scientology, treated their claims as fact and used their allegations as a basis to throw five years of cooperation from the Church down the drain. A tax debt that the Aznarans had been unable to handle with the IRS for ten years disappeared when they became civil litigants against the Church and CID informants.
*Question 10.e.iii asks for a description of the criminal case involving the Church in Canada, which is described in the answer to Question 10-e-(iii) and in a memo from counsel for the Church of Scientology of Toronto attached as Exhibit III-10-U. As that memo details, LA IRS CID agents fed information, allegations and witnesses to the Ontario Provincial Police (“OPP”) and plotted with Armstrong, Flynn and OPP officers to bring about the “collapse” of the Church. CID agents traveled to Canada where they encouraged the OPP to bring indictments, offering to help locate L. Ron Hubbard and others in the Church if OPP moved forward with their case. The CID and OPP also utilized apostate David Mayo and his cronies to recruit ex-GO criminals as government witnesses to testify against the church and their former subordinates about crimes that they themselves had perpetrated. Mayo is further described below.
* As early as 1969, a CID operative named Gene Allard was allowed to get off scot-free with the out-right theft of Church records. (See response to Question 10.d.1, infra.).
* Laurel Sullivan, who left and became disaffected with the Church after she was removed from her Church post for being a Guardian’s Office sympathizer, was embraced as an informant by the CID, and was represented by a government attorney when the Church sued her personally for improperly disclosing attorney-client information to the IRS. (See page 3-40 of our response to Question 10 of your second series of questions).
* As described below apostate David Mayo gained favor with the IRS as an informant and IRS reciprocated by granting exempt status to his group in support of his anti-Scientology stance. This list could go on with example after example of times when some person or organization has manifested an anti-Scientology sentiment and has suddenly emerged as an IRS ally, operative or beneficiary. At that moment such a person or group is transformed into a fountainhead of unassailable virtue whose claims are gospel, whose protection is guaranteed and who is given unwarranted, improper encouragement and assistance. As described in detail below, while Churches of Scientology receive unprecedented scrutiny when they apply for tax exemption, apostates who sue the Church and attack the religion have been aided by IRS tax exemption subsidies.
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An anti-Scientology sentiment has existed in the IRS National Office Exempt Organizations Technical Division, dating at least back to CAN’S 1978 exemption. Certain EO Technical Division officials appear to have directly colluded with the CID in 1984 and 1985, using information gathered by the CID, including the statements and allegations of their informants, to sabotage the Church’s exemption proceedings at that time. Evidence of their bigotry is best seen in their treatment of anti-Scientologists.
David Mayo was removed from a senior Church position for moral turpitude. He was using his position for economic advantage. Even more serious from a Scientology perspective, he was the source of serious alteration and denigration of the technical scriptures of Scientology. Rather than atone for his misdeeds, he left the Church in 1982.
Upon leaving, Mayo and a few others established an organization he called the Advanced Ability Center (“AAC”), which utilized a badly altered version of Dianetics and Scientology technology in an effort to lure parishioners away from the Church for economic advantage. For example, Mayo dropped the use of Scientology ethics technology altogether, eschewing ethics as an applicable concept. Solely for the tax advantages it would afford, he incorporated the AAC under the name “Church of the New Civilization” (“CNC”), but it operated solely as the Advanced Ability Center. Mayo’s prime objective was to obtain copies of the confidential upper level scriptures so that he could represent that CNC/AAC could deliver the entire Bridge as it existed in the early 80’s and thus attract a larger following. Mayo conspired with like-minded apostates in Europe and effected the theft of these scriptures on December 9, 1983 from AOSH EU & AF in Denmark. These events prompted the suit by RTC and the Church as described on pages 10-17 and 10-18 of our response to Question 10 of your second series of questions. Mayo also actively endeavored to lure Scientologists away from Scientology, including putting out a publication of negative propaganda on the Church.
In 1984 CNC filed for tax exemption. The original application identified CNC’s source of financial support to be “Fees received from parishioners for counseling.” CNC’s statement of activities stated that “The program of activities of [CNC] are limited to personal counseling and spiritual studies” and responded affirmatively to questions on whether or not recipients would be required to pay for counseling. Subsequently, Mayo gave an opposite answer to the question. Eventually, the 1023 application was forwarded to National Office for processing by Rick Darling who inquired further into CNC’s fundraising methods. Mayo responded that “Parishioners receive spiritual enhancement and guidance from the Church in a program of services for which monies are given and received” to a question asking why parishioners would donate to CNC.
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During the same time period Darling and Friedlander were considering the CNC application, they were using “commercialism” as a reason to deny tax exemption to various church of Scientology applicants. Their purported reason was that the Church charged fixed donations for services giving them a “commercial hue and purpose.” Shortly after issuing adverse determination letters to the Scientology applicants, EO granted CNC’s application on substantially identical information as to funding practices.
Mayo had become a CID informant (Exhibit III-10-G) and Darling/Friedlander were now aware that Mayo was an enemy of the Church of Scientology. (Exhibit III-10-H). On March 27, 1986, David Mayo himself responded for CNC to a set of questions from Darling. In response to a question whether CNC charged fixed amounts for their services, Mayo provided information which contradicted CNC’s 1023 record and was flatly impossible stating that CNC had “no predetermined price.” (Exhibit III-10-H).
Psychiatrist Frank Gerbode is an heir to the Alexander Baldwin sugar fortune. He left psychiatry for Scientology in the 1970s and for several years was the mission holder of the Palo Alto mission. He ran afoul of Church management in the early 1980s when the Church tried to reform his financial misdealings. In March 1984, Gerbode left the Church to join up with David Mayo. He set up a parallel operation he also called Advanced Ability Center in Palo Alto which, for tax purposes, he named the Church of the Universal Truth (“CUT”). Gerbode’s 1023 application, along with those of CNC and various Church applicants also went to Darling and Friedlander.
The exemption applications for the churches of Scientology were denied; the applications for CNC and CUT were granted. While Darling and Friedlander asked endless intrusive questions of the Scientology applicants, they chose not to find out about CNC and CUT. For example, by the time they recognized CNC’s exempt status, CNC had long since ceased operations. Mayo had cashed in its assets and deposited them in his personal Liechtenstein bank account and had gone to work for Gerbode at CUT. He essentially liquidated the corporation into his own pocket, even though it was a non-profit organization purportedly dedicated to section 501(c)(3) purposes.
More specifically, the last known letter from Mayo to the IRS on the CNC exemption application is the one mentioned above, dated March 27, 1986. (Exhibit III-10-H). According to the deposition testimony of his wife, Julie Mayo, CNC closed its doors one month later, on April 30, 1986, at which time David and Julie Mayo both resigned their respective director and officer positions. They also sold the house in which they were living that had been purchased in their name by CNC as a “parsonage,” and using other
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rsed to them from CNC as “severance pay,” “travel expenses”and “vacation pay accrued,” they traveled for the next several months to Europe, Australia and Florida with Gerbode and his wife. While on this trip they stopped over in Liechtenstein where Gerbode introduced Mayo to his banker who opened an account for him with the $80,000 received from the sale of their “parsonage.” CNC’s exempt status was granted subsequent to these events. In fact the only ongoing activity of CNC at the time it was granted exemption was ongoing litigation with the Church of Scientology.
Gerbode obtained tax exemption for CUT ostensibly based on representations that the organization was a church and conducted exclusively religious activities. (Exhibit III-10-I). In fact, once tax exempt status was obtained, CUT ceased carrying out any religious activities and began dispensing a novel brand of psychology under the name Center for Applied Metapsychology (“CAM”), and promoting Gerbode’s personal books and literature, co-authored by Mayo, much of which are plagiarized from the works of L. Ron Hubbard. In 1986, Gerbode also established the Institute for Research in Metapsychology (“IRM”), another tax exempt organization which operates at the same address using the same personnel as CAM, and which produces the literature and materials that CAM promotes and distributes. IRM characterizes metapsychology in scientific terms, making it clear it is not a religion and followed no belief system. Yet metapsychology is what Gerbode’s church, CUT operating as CAM, dispenses.
Compare the representations made by CUT in Exhibit III-10-I, a letter to the IRS in support of their exemption application in December 1985, to the representations made by Gerbode concerning the same organization on November 2, 1992 in Exhibit III-10-J. In the December 5, 1985 letter in support of its exemption application, CUT discussed its purported “religious doctrine” and “religious history” and submitted copies of their baptismal, funeral and marriage ceremonies, representing that it was a Church conducting exclusively religious activities. (Exhibit III-10-I). On November 2, 1992, Gerbode wrote to the City of Menlo Park, California in response to a “complaint that a church is being operated at the premises” to set the record straight so that they would not lose their zoning permit:
CAM [really CUT] is classified under the IRS code as a church . . . However . . . CAM does not hold worship services, perform baptisms, or carry out other such activities typical of churches.
* * * *
“‘Church’ means a structure intended as a meeting place for organized religious worship and related activities.” We feel that this does not apply to the building or the activities occurring therein.
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This is the “church” that passed muster with Friedlander and Darling as soon as it was apparent to them that, like Mayo, Gerbode was no longer associated with and was opposed to L. Ron Hubbard and the Church of Scientology. Gerbode has made substantial “contributions” to both CAM and IRM, which he deducts on his personal income tax returns as charitable contributions. However, at the same time Gerbode receives the direct benefit of the bulk of these “contributions” from CAM and IRM in the form of rent, salaries and payment of personal expenses. The organizations also provide Gerbode with an administrative staff and office facilities, all tax-free. The following are specific tax law violations Darling and Friedlander could have found if they had subjected CUT to the same kind of scrutiny they had subjected Churches of Scientology to during the same period.
In 1982 and 1983, prior to the incorporation of CUT, when Gerbode was still the mission-holder of the Church of Scientology Mission of Palo Alto, he claimed substantial tax deductions on his personal tax returns for books, office furnishings, equipment, artwork, etc., that he purchased for use at the Mission. When Gerbode left the Mission in 1984 and established CUT, he donated these same books, office furnishings, equipment and artwork to the new corporation and again claimed them as charitable contribution deductions on his personal tax return. These were listed as donations in the 1023 application for CUT that Darling reviewed in 1986. When Gerbode left Scientology in 1984 he evicted the mission from his building in favor of his new operations, CAM and IRM from which he now collects rent. It is also evident that he launders donations to CAM/IRM back to himself as rent in order to get the benefit of both the charitable deductions and depreciation write-offs.
The IRS continues to probe litigation involving the Church while it ignored litigation against Mayo et al. Indeed the Service gave a de facto subsidy to the Gerbode/Mayo litigation by granting exemption to their litigation tax shelter. In the letter that Mayo wrote to the Service in support of CNC’s exempt status in March of 1986 (Exhibit III-10-H) he sent along part of the complaint in the suit RTC and CSI had brought against Mayo and CNC which alleged theft and violations of the RICO statute. Darling apparently did not consider it necessary to inquire about the possible public policy implications of this litigation once he saw that Mayo was on opposite sides in the litigation to the Church and granted exempt status.
In 1986, Gerbode and Mayo established and obtained tax exempt public charity status for the Friends of the First Amendment (“FFA”), an organization purportedly established to support and promote First Amendment rights, but which in fact enabled Gerbode to claim tax deductions for hundreds of thousands of dollars he
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“donated” to FFA, which sums were then used to pay Mayo’s litigation costs in his litigation with the Church. Although Gerbode is not a party to this litigation, a central issue in the suit concerns the control of copyrights in the name of L. Ron Hubbard that Gerbode has exploited. Gerbode struck a deal with David Mayo that Mayo will continue the litigation provided that Gerbode funds it, with the understanding that Gerbode will be reimbursed for the litigation costs if Mayo wins a counterclaim for damages. Thus, Gerbode has used FFA to deduct as charitable contributions what are in reality his own litigation expenses, that he expects to recover if the litigation is successful. David Mayo, on the other hand, hopes to net millions of dollars if the counterclaim is won. Gerbode has also disguised some of the millions of dollars he laundered through FAA so that they would not appear to be from him in order to avoid FFA being found to be a private foundation, and cemented this by shutting FFA down just before its advance ruling period on private foundation status expired in 1990.
The only question Mayo’s and Gerbode’s groups were asked concerning litigation was whether their “legal defense fund” was set up solely to battle the Church of Scientology. When they answered in the affirmative, exemption was awarded.
Unlike CNC, CUT, and CAN, who to this day enjoy exemption, our principal clients have no such status. Yet we alone of that group have been and are providing truthful and full answers to each question you have asked.
All of the information the Service has requested in the various subparts of Question 10 is contained in the responses to the individual subparts that follow.
* * * *
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Questions 10.a, 10.b, 10.c and 10.d.2
In question 10 of our second series of questions, we expressed our concern over the possibility of continuing violations of public policy and requested certain information to assuage these concerns. We have additional follow-up questions in this regard.
a. Attached is a document relating to a program referred to as Snow White that apparently existed as of December 16, 1989. Please explain the apparent discrepancy between the document contained at the attachment and the response to Question 10.b.
b. The response to Question 10.b refers to a decision by Judge Osler of the Supreme Court of Ontario (page 10-5). Please provide a complete copy of the cited opinion.
c. What is the status of Operation Transport Company? Does it continue in existence? If not, please specify when and to whom all assets were distributed or transferred.
* * * *
d.2. Please provide the following information with respect to Exhibit II-10-A; (i) fill in the blank under the heading of “Primary” contained in #6; (ii) an explanation of the reference to “HF” or “AS” under the heading of “Primary” at #7; and, (iii) fill in the blanks under the heading of “Vital Targets” contained in #7.
As a preliminary matter, we note that question 10 has two subparagraphs denominated as “10.d.” For the sake of clarity, we will refer to the first as “10.d.1″ and the second as “10.d.2.” Subparagraph 10.d.1 and paragraph 10.e are addressed in separate responses. This response addresses the remainder of question 10.
Subparagraph 10.a asks for an explanation of an “apparent discrepancy” between the response to Question 10.b of your second series of questions and Exhibit II-10-A.
That which is attached is a copy of a document written in December of 1989 by a person holding the position of Snow White Programs Chief in the Office of Special Affairs United States,
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and describes her functions and those of the Snow White Unit. The document also specifically mentions the Snow White program and its “Ideal Scene”: “All false and secret files of the nations of operating areas brought to view and legally expunged and OTC, “Apollo” and LRH free to frequent all Western ports and nations without threat and all required ports open and free.”
Initially, it must be stated that the document in question was stolen from Church offices by an individual who had infiltrated the Church at the behest of the Cult Awareness Network. It was then passed on to the IRS by the CAN infiltrator via CAN. (See page 10-20 of our response to your second series of questions and supra for discussions of the Cult Awareness Network).
The “apparent discrepancy” to which subparagraph 10.a refers seemingly arises from use of the word “programs” in a post title that includes the words “Snow White” viewed against the statement on page 10-5 of our response to your second series of questions that “The Snow White program is not being executed today.” There is no inconsistency. That same page also states that the term Snow White became synonymous with the activity of legally locating and correcting false reports on the Church. The Church vigorously pursues these objectives through the use of the Freedom of Information Act and through direct negotiation with government agencies intended to persuade them, at minimum, that if expungement of false reports is not feasible, corrective reports should be filed.
The original Snow White program, provided as Exhibit II-10-A, was written specifically to address problems which existed in 1973 with respect to OTC, the Apollo and Mr. Hubbard. Because the United States State Department and other government agencies had engaged in the circulation of false reports, free access to various Western ports and nations had been severely curtailed. The Apollo was sold in 1975, OTC became inactive at that time, and Mr. Hubbard passed away in 1986. Clearly, the original Snow White program became obsolete within a couple of years of its creation and is no longer in effect. In fact, the Apollo no longer exists. Once converted by its new ownership to a restaurant in Texas, it was involved in a train collision and in dry dock was cut into scrap. So, there is no way the Apollo will be frequenting Western or any ports!
However, obsolescence of the actual program did not invalidate Mr. Hubbard’s observation that when governmental and police agencies are allowed to accumulate false information in their files, and disseminate it to other agencies, they then “…tend
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to act on the file without the presence of the real scene data which is factually good but which is then ignored.” In an ongoing effort to practice the Scientology religion free from the interference of misinformed government agencies, the Church continues to pursue the Snow White objectives with the legal means at its disposal. Only when the Church is free from governmental harassment and is accorded its rights will the 6 need for Snow White activities vanish.
Subparagraph 10.b requests a copy of Justice Osler’s decision cited in the June submission. A copy of that Supreme Court of Ontario decision is submitted as Exhibit III-10-J-1, with the appropriate sections highlighted.
Subparagraph 10.c addresses the present status of OTC, as well as details regarding the timing and distribution of any of OTC’s former assets.
OTC effectively ceased to operate in late 1975 when the Church activities that had been housed on the Apollo moved ashore in Florida. OTC remained inactive from that point forward except for ongoing litigation against the Portuguese government which is described on page 10-3 of our response to your second series of questions.
In July 1981, OTC’s aggregate assets were approximately $2,244,252 plus Pounds Sterling 2,254,852. At that time, OTC transferred all of its assets except for approximately Pounds Sterling 200,000 and its pending Portuguese claim to the Scientology Endowment Trust. This trust was recognized as tax exempt by the IRS under Section 501(c)(3) in 1983 after the particulars relating to the transfer of funds from OTC were specifically reviewed. In 1988, OTC dissolved and all assets still remaining, approximately $180,000, were transferred to Church of Scientology Religious Trust.
In Subparagraph “10.d.2,” you ask to have some blanks in the copy of the Snow White program provided to you with the June submission filled in and for an explanation of the terms “HF” and “AS.”
The version of the Snow White program provided with the June submission contained blanks in the places that you noted, apparently left there by whoever retyped that version. We have located, and are including here as Exhibit III-10-K, another
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version which appears to be a copy of the original version and contains no blanks. The abbreviations “Cont,” “Gdn” and “DG/US” in Vital Target 7 stand for Controller, Guardian and Deputy Guardian United States.
The abbreviation “HF” stands for Hubbard Freedom Foundation. Our records show that it was set up as a Liberian corporation in November 1972 for scientific, research and educational purposes, received a total of $500 from OTC, but then never became active and never received any other funding.
The abbreviation “AS” stands for American Society which was another Liberian corporation also established in late 1972, at or around the same time as the Hubbard Freedom Foundation and probably for similar or related purposes. The best available information is that the American Society had a fate similar to Hubbard Freedom Foundation, receiving a small amount of money to get started, but then never actually carrying out any activities or function.
As neither of these Liberian corporations was ever active and as no effort was made to maintain their corporate charters in Liberia, we assume that they were dissolved by operation of law many years ago. The Liberian attorney who originally formed them was killed in a political upheaval more than a decade ago, and we, therefore, have no access to HF or AS records.
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In our prior question 10, we expressed our concern over the possibility of continuing violations of public policy and requested certain information to assuage these concerns. We have additional follow-up questions in this regard.
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d. In CSC v. Commissioner, 83 T.C. 381 (1984) at 431-437, there is a discussion of the actions of several persons identified by name or office (e.g., Vicki Polimeni). Please identify the persons who held the following offices during the period referenced at pages 431-437 of the CSC opinion: (i) FBO International; (ii) FBO AOLA; and (iii) FBOs at various other Advanced Organizations as described at page 431 of the CSC opinion. Please state whether Vicki Polimeni or any of the individuals identified in the response to this question have at any time subsequent to 1989 been related (by reason of being service-provider or otherwise) to any Scientology-related organization (either as staff or in any other capacity). Please describe the current relationship between Martin Greenberg and Scientology-related organizations.
During the period of time described at page 431 and 432 of the CSC decision, i.e., May through August 1969, there were only three Advanced Organizations in existence. Consequently, the positions you have inquired about and the individuals who held them were:
FBO International — Al Boughton FBO AOLA — Lauren Gene Allard FBO AO United Kingdom — Don Clark FBO AO Denmark — Rob Sanderson
Vicki Polimeni, Don Clark and Rob Sanderson ceased having any relationship with any Scientology-related organization many years ago, long before 1989. From 1989 to the present, Al Boughton has been a staff member at the American Saint Hill Organization (ASHO) in Los Angeles. He holds the position of Auditing Supervisor for the Saint Hill Special Briefing Course, responsible for overseeing the auditing done by students training to be Scientology auditors on this course. The Church has had no specific information concerning the activities or whereabouts of Gene Allard since 1981, when he appeared as an IRS witness in the Tax Court trial of the CSC case.
The Church has long suspected that Allard was sent into AOLA in 1969 by IRS Intelligence Division agent John Daley, to infiltrate the Church as an agent provocateur. John Daley was an agent in the IRS’ Case Development Unit in Los Angeles, a unit
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which served as a model for a national intelligence operation known as the Intelligence Gathering and Retrieval System (“IGRS”). The IGRS was disbanded in 1975 when Congress found that it had “fostered unrestrained, unfocused intelligence gathering and permitted targeting of groups for intelligence collection on bases having little relationship to enforcement of the tax laws.” Congress found that “there were the beginnings of politically motivated intelligence collection in at least one district; and evidence that the fruits of similar investigative efforts in two districts had been destroyed.” One of the districts that destroyed its files on the eve of the Congressional investigation was the Los Angeles District (i.e. John Daley’s files) and the other was the St. Louis District, where Congress found that a file labelled “Subversives” that “contained only material on the Church of Scientology” had been destroyed. (See pages from Supplementary Detailed Staff Reports On Intelligence Activities And the Rights of Americans, Final Report of the Select Committee to Study Governmental Operations With Respect to Intelligence Activities, attached as Exhibit III-10-L).
Circumstantial evidence strongly suggests that Allard was a clandestine operative who reported to Daley. Daley had been investigating the Church since at least 1968 and, by the time Allard first appeared at AOLA, Daley had already used a plant inside Crocker Bank who provided Daley with illegally-obtained copies of the Church’s confidential bank records. After occupying the position of FBO AOLA for barely two months, Allard suddenly disappeared, taking with him some internal Church correspondence and other Church assets. Allard turned over the documents to the IRS in Kansas City; the documents were forwarded to John Daley in Los Angeles.
The Church filed criminal charges against Allard. He was later located and arrested by the FBI in Florida and brought back to Los Angeles. Not long after Daley interviewed Allard in jail, the California Attorney General’s office decided the evidence against Allard was insufficient and dropped the charges. Then, in 1981, Allard surfaced as a witness for the IRS in the CSC case along with the documents that he had stolen, admitting on cross-examination that he was hopeful of receiving a reward if his testimony resulted in collection of any taxes. Judge Sterrett demonstrated a willingness throughout the CSC trial to regard any anti-Church witness as credible, but even he had problems with Allard’s testimony: Judge Sterrett found that “There were significant inconsistencies in his testimony . . .”. 83 T.C. 509.
Nevertheless, it was Allard’s testimony and the documents that he stole that formed virtually the sole basis for the findings at
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pages 431 and 432 of the CSC decision about which you now inquire. Judge Sterrett’s gratuitous comments suggested that whatever occurred at AOLA in 1969 constituted some kind of criminal conspiracy. All of this evidence however, was known in 1969 when Revenue Agent Woodrow Wilson unsuccessfully sought to institute a fraud investigation. In June 1969, Daley even went so far as discussing with California State officials the use of the Allard evidence as “grounds for dissolution” of the Churches of Scientology. (Exhibit III-10-M.) In August of 1969, Wilson presented this information in the form of a “fraud referral” in an effort to elevate it from “case development” status to an actual criminal investigation. The fraud referral was declined by the Chief of Intelligence. (Exhibit III-10-N.)
You have also asked about the current relationship of Martin Greenberg to any Scientology-related organizations. Mr. Greenberg has not been on the staff of any Scientology-related organization since early 1980’s. He is a certified public accountant with an accounting practice in Clearwater, Florida. Although we understand that individual Church members have used his services for their personal or business accounting, he has not to our knowledge been retained nor has he done any accounting work for any Scientology-related organizations for many years. Mr. Greenberg is a parishioner of the Scientology religion.
While in Los Angeles in 1978, Martin Greenberg, along with CPA James Jackson, formed the firm of Greenberg and Jackson. In 1983 Greenberg moved away and sold his interest in the practice to Jackson, who retained the name “Greenberg and Jackson” for the professional corporation. At that time Mr. Greenberg ceased having any involvement in or knowledge of the affairs of any Scientology-related organizations. Recently, Mr. Jackson also sold his interest in this practice and presently there is neither a Greenberg nor a Jackson associated with “Greenberg and Jackson.” Several Scientology- related organizations continue to utilize the services of CPA Brad Bernstein, one of the present shareholders of that firm.
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Questions 10 e(i)-(ii)
In our prior question 10, we expressed our concern over the possibility of continuing violations of public policy and requested certain information to assuage these concerns. We have additional follow-up questions in this regard.
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e. We have carefully reviewed the response to Question 10.d. The Service still requires a more complete understanding of the cases listed in the response. Please provide the following information, as well as any other information or documentation that you believe would assist the Service in this regard.
(i) For each of the cases listed on pages 10-20 through 10-22, please provide a short description of all claims by the non-Church of Scientology parties. In particular, please describe any allegations that the Scientology-related organizations, and/or the individuals, described in Question 2.d of our second series of questions have engaged in any action that is an intentional tort and/or that would violate any criminal law. In your description, please include the date the action is alleged to have occurred and the party alleged to have committed the action.
(ii) For each of the cases on pages 10-8 through 10-22, other than the “GO Criminal Activity Fallout Litigation” cases listed on pages 10-16 and 10-17, please provide a copy of any jury verdict, or any decision, finding or statement by a court that any Scientology-related organization, and/or any individuals described in our prior Question 10.d, engaged after 1980 in any action that is an intentional tort and/or that would violate any criminal statute. The copy should be provided regardless of the ultimate disposition of the underlying legal action (e.g., even if an appeal is still pending or the action was settled, dis- missed, or successfully appealed). With respect to each copy provided, please state whether the Church agrees with the court’s statement, and, if so, whether there is presently any connection or relationship between the individual(s) involved and the church.
Subparagraph 10 e(i)
In our response to the Service’s prior Question 10.d, we provided a lengthy description of litigation involving Scientology-related organizations or individuals since 1980. To facilitate the Service being able to understand these cases and put them into proper context, the cases were grouped according to the kind of case and allegations and the phenomena that brought the various suits about.
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In this follow-up question the Service is asking for copies of any jury verdicts or judicial findings respecting all but a few of those cases, where it was found that a Scientology-related organization or individual committed a tort or criminal law violation; and with respect to just three of the groupings of cases, the Service wants further information concerning the allegations made in those cases. Those groupings are: 1) cases listed as financial or property disputes or transactions; 2) personal injury or medical-related suits; and 3) suits that appear to have been instigated directly or indirectly by the Cult Awareness Network.
As described above in the Introduction to Question 10, in the vast majority of these cases the allegations that have been made and which are described below, trace back in one way or another to the IRS itself.
Nonetheless, in the spirit of cooperation, we are providing in this response all of the information requested — i.e. the description of the allegations in each of the cases listed on pages 10-20 to 10-22 of our response to your second series of questions and copies of the verdicts, decisions and findings requested in Question 10.e (ii). We feel it is appropriate, however, to make the following preliminary observations.
Public Policy As An Exemption Issue:
All of these questions concerning litigation relate to the issue of public policy. Section 501(c)(3), however, contains no express condition that an organization must operate in conformance with public policy to qualify for tax exemption. Whether or not an organization violates public policy is relevant to exemption only in the context of whether the organization is operated exclusively for one of the exempt purposes that section 501(c)(3) enumerates.
Only one judicial decision has ever applied a public policy condition to the exempt status of a church — the Tax Court decision concerning the Church of Scientology of California (the “CSC decision”). Judge Sterrett, however, limited his findings of public policy violations affecting CSC’s exempt status strictly to the activities of the Guardian’s Office (“GO”) that resulted in a number of GO members being convicted of crimes. Thus, although the Service was prepared to present testimony in the CSC case from tort claimants such as Larry Wollersheim and some of attorney Michael Flynn’s clients, Judge Sterrett precluded that testimony and made no finding regarding public policy based on any civil tort claims. (See our response to Question 10.d of your second series of questions for a description of Michael Flynn’s and Larry Wollersheim’s claims infra.).
The CSC decision, upon which the Service has often relied, itself highlights the irrelevancy of pending, dismissed or settled legal cases where any form of tort allegation has been made. The public policy issue was addressed in the CSC case and decided in that case, and the only acts of any Church of Scientology members that were found to provide a basis for questioning exempt status were the criminal activities of the Guardian’s Office. If Judge Sterrett did not find the allegations of Flynn’s clients, Wollersheim and the rest to be relevant, there can be no legal basis for considering the same kinds of allegations now.
The Church has addressed the Guardian’s Office both here (see responses to Questions 3.e, 10.a and 10.d) and in our prior response (responses to Questions 3.d and 10.d). The Church also addressed at some length the various kinds of other litigation Scientology-related organizations and individuals have been involved in (response to your prior Question 10.d). On this basis, the Church feels that it has adequately addressed public policy against the relevant legal authorities.
Public Policy As Applied to Other Churches:
The Service has enforced the public policy standard selectively, applying it only to the Church of Scientology and not to other churches to which it could just as easily, if not more appropriately, be applied. For example, for most of the past decade the Catholic Church has been embroiled in a major scandal arising from the exposure of an astonishingly large number of instances of child molestation involving Catholic priests. Copies of newspaper and magazine articles about this subject are attached as Exhibit III-10-O. A book published in October 1992, Lead Us Not Into Temptation by Jason Berry, states that between 1984 and 1992 four hundred Catholic priests in North America were reported for molesting children, and in this same period the Catholic Church has paid out $400 million to resolve these cases. The book further details how other Catholic officials, including many high in the Catholic hierarchy, have covered up what occurred or were guilty of complicity by knowing what was happening and ignoring it or reassigning a tainted priest to another job where he would still have contact with children. These are not merely cases where unproven allegations have been made; some of the cases resulted in criminal convictions of the priests involved. In the case of Father Gilbert Gauthe, for example, Father Gauthe pleaded guilty to 36 counts of child molestation while serving as a parish priest in Louisiana. The attempts to cover-up Father Gauthe’s crimes described in Jason Berry’s book spanned the Catholic hierarchy and included archbishops, bishops, other priests and directions and orders emanating from Rome. Thus a jury also awarded a verdict of $1.25 million to one of the victims and his family against the responsible Catholic diocese.
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We are not suggesting that the IRS should now investigate the Catholic Church or make a tax exemption issue out of an unfortunate scandal that should be dealt with in the criminal justice system. Rather, this example serves simply to illustrate the unfair double standard that has been applied to the Church of Scientology.
Nevertheless, the following is a description of the cases that were listed in our prior response, describing the allegations in those cases of commission of intentional torts or violations of criminal statutes.
Description of Tort Litigation:
The suits listed on pages 10-20 through 10-22 each have their own set of facts and assortment of claims, but for the most part are of the same general character. They involve frivolous claims by “crazies” who think they can make some money suing Scientology; suits against former spouses or business associates naming the Church to seek a tactical advantage; and a considerable number of suits inspired by the Cult Awareness Network, which bombards the person with negative information about the Church and then refers them to an attorney who tells them they can sue the Church and get rich. (See the “Introduction To Question 10″ for further information on CAN) . There are a few instances, like the Rabel case, where a stereo speaker fell from the window of a Scientology mission injuring someone walking below, where there was a valid claim which the Church equitably settled. Not one of the cases asked about in Question 3.e.1 has been adjudicated by a court; thus all the claims listed are unproven.
Because many of these suits are refund suits, it is useful first to review the Church’s refund policy. It has been a longstanding policy of the Church that if someone is dissatisfied with their Scientology services and asks to have their contributions returned within a three month period, these amounts will be returned. Likewise, if the person asks for return of contributions for which no services were received (i.e. an advance payment), there is no three month limitation period. Anyone newly enrolling in services at a Church of Scientology is informed of the policies and signs an agreement to abide by them. As a further condition of receiving a refund or repayment, the person understands that they may not again receive services from the Church.
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Within the Church, there are two separate terms: A “refund” refers to a return of contributions to a parishioner within 90 days of participating in religious services while a “repayment” refers to a return of a parishioner’s advance payment before he or she has participated in religious services. For simplicity, the following discussion will use the term “refund” to describe both types of transactions, because both involve a return of parishioner contributions.
The Church’s refund policy is exceedingly fair. If someone isn’t happy with Scientology — which is a very small minority of people — he simply has to make a proper request for his donations back, agree to forego further services and his donations will be returned. For the Church, in addition to the fact that this policy aligns with Scientology principles of exchange, it also serves the purpose of allowing our churches and the parishioners who are very happy with Scientology, to carry on without the unhappy few in their midst.
The presence of a considerable number of refund suits in the following list is directly related to the influence of CAN and CAN attorneys. As described in the “Introduction to Question 10,” CAN’s modus operandi is to seek out anyone who is unhappy with Scientology, feed them negative information and then refer them to an attorney. The CAN attorney then convinces the person that he can not only get a refund of his donations, but by allowing the attorney to handle the claim he can get damages as well, and possibly get rich. As will be seen in the descriptions of the cases that follow, almost one for one such suits are ultimately settled for the refund amount the person could have obtained in the first place simply by requesting it.
It is also of interest that we know of no suit filed for refund that wasn’t instigated by CAN. In fact, the Church rarely has any refund requests, by suit or otherwise, except when instigated by the IRS-sanctioned CAN. And in most cases, further discussion reveals the person was quite happy with his service at the Church and seeks his money back only after CAN has told him how “terrible” Scientology is.
Descriptions of individual suits follows:
Mira Chaikin v. Church of Scientology. L. Ron Hubbard. et al.: The following is from the judge’s ruling dismissing the case, which says all that needs to be said about this case:
“In this pro se complaint, which can most charitably be described as bizarre, plaintiff Mira Chaikin (‘Chaikin’) alleges that the various defendants are exploiting her, impersonating her and ‘implanting’ her.
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She alleges that because defendant Ron Hubbard has been ‘flowing to (her) sexually and romantically’ she is his ‘true wife,’ as well as ‘having been (his) wife in (her) last life who was murdered. ‘ Thus, she further alleges, defendant Mary Sue Hubbard is ‘in no way the wife of Lafayette Ron Hubbard ‘ but has merely been impersonating plaintiff with resulting severe endangerment of plaintiff’s mental health.
“As against the Church of Scientology, Chaikin appears to be claiming that the organization is acting contrary to its theoretical foundation. For the reasons set forth below, I dismiss the complaint.
“An action may be dismissed ‘when the allegations of the complaint are beyond credulity . . .’ [cite omitted]. I find plaintiff’s allegations, to the extent they are comprehensible at all, to be patently incredible.
Terry Dixon v. Church of Scientology Celebrity Center of Portland, et al.: This is a typical CAN-influenced suit for refund by Terry Dixon, which also asks for damages based on claims of breach of contract and breach of fiduciary duty. Dixon alleges that the Church of Scientology Celebrity Centre Portland, Church of Scientology of Portland and Church of Scientology Flag Service Org, breached a contract with him and their fiduciary duty, by failing to deliver to him results he considers to have been promised him from Scientology religious services. The suit was filed in December 1990.
Each of the three churches filed motions to abate the case pending arbitration, based on enrollment agreements signed by Dixon while he was in the Church, which include a clause that any disputes between the Church and the parishioner must be arbitrated. The judge ordered the case to arbitration and it has now been settled for the refund amount.
John Finucane, David Miller, Alexander Turbyne v. Emery Wilson Corporation, et al.: This suit was instigated directly by CAN and CAN attorney Toby Plevin. All of the plaintiffs are dentists who were clients of Sterling Management Systems (Emory Wilson Corporation) for a brief period of time and also briefly received some services from the Church of Scientology of Orange County. Sterling is a company that has been owned and run by Scientologists and uses methods of organizational administration developed by L. Ron Hubbard to help business people improve their businesses. Some of these individuals, upon being impressed with Mr. Hubbard’s works, have become interested in Scientology.
The lawsuit was filed in LA Superior Court on December 26, 1991 by Finucane, Miller, and Turbyne, who reside, respectively, in Aiken, South Carolina, Sacramento, California, and Sohigan, Maine,
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against Sterling and the Orange County Church. The complaint contains causes of action for deceptive trade practices, fraud, and injunctive relief, alleging that Sterling misrepresented itself to be an independent management training organization when, in fact, it was a part of the Church of Scientology and operated as a recruitment office for the Church with the goal of procuring new members and getting them to take Church services.
Miller and Turbyne settled their cases with the Church of Scientology of Orange County for a refund, but not with Sterling, leaving all plaintiffs with claims against Sterling, and only Finucane suing the Orange County Church. Finucane has so far refused offers from the Church to have his claim arbitrated as per the enrollment agreement he signed. The Church therefore filed a counter-claim and criminal complaint against Finucane relating to his breach of contract (his refusal to abide by the enrollment agreement) and invasion of privacy (for secretly tape-recording a conversation with a Church staff member and then broadcasting a heavily edited version of it on national television).
Dorothy Fuller, an individual v. Applied Scholastics International, et al.: This is another Toby Plevin, CAN instigated suit filed in April 1992. The claims are breach of lease, fraud and negligent misrepresentation. Applied Scholastics leased a residential property from Fuller who claims that the house was misused in several ways, including housing more people than agreed upon in the lease, use of the house as a child center, dormitory style living, and fabrication of products for resale. Thus it is a minor property dispute escalated by Plevin into tort litigation. It is expected that this suit will be quickly settled.
Lisa Stuart Halverson v. Church of Scientology Flag Service Organization, et al.: This was another suit for refund that CAN attorney Toby Plevin filed, alleging several torts for purposes of effect. The claims were for violation of the deceptive practices act and fraud, based on Halverson being told she could get a refund and then not being able to get it. The suit was settled for the refund amount.
Thomas and Carol Hutchinson v. Church of Scientology of Georgia, et al.: The complaint in this suit is virtually a carbon copy of the complaint in the Corydon case, one of the Michael Flynn cases listed at page 10-13 of our prior response. Although the Corydon case was settled, Hutchinson apparently got a copy of the complaint, very likely provided by CAN, and felt its inflammatory claims against a wide array of Church organizations would add spice to what is otherwise a suit for refund of money paid to the Church of Scientology of Georgia. The claims are stated as fraud and deceit and infliction of emotional distress, seeking unspecified damages and injunctive relief. However, the claims revolve around a core that the teachings of Scientology differ from those of
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Fundamentalist Christianity, a topic constitutionally barred from secular adjudication.
The Church anticipates dismissal of this suit, favorable summary judgment or settlement for a refund of the Hutchinson’s donations.
Mark Lewandowski v. Church of Scientology of Michigan, et al.: This suit was against the Church of Scientology of Michigan and two individuals, one former and one current staff member of the Michigan Church. Mark Lewandowski, who had previously been under psychiatric treatment with a substance abuse disability, took some courses at the Church of Scientology of Michigan in 1988. Although Lewandowski’s relationship with the Church was short, in his suit he alleges that the Church committed consumer fraud by failing to ascertain his unstable mental condition, fraud, for allegedly misrepresenting the nature of the courses he took, and intentional infliction of emotional distress through the above. The nature of Lewandowski’s claims and allegations strongly suggest that he was influenced to file suit by CAN.
This case went before a mediation panel where a settlement was accepted by the Lewandowski’s attorneys for a refund. The Church of Scientology of Michigan is in the process of paying this amount to end the suit.
Peter and Francis Miller v. Church of Scientology et al.: The suit was filed on April 29, 1991 by CAN attorney Toby Plevin against several organizations, including CSI, Church of Scientology Orange County and Sterling Management Systems. This suit makes claims not unlike those of the Finucane suit described above, that they were misled into Sterling and Scientology and therefore want their money back. The claims include fraud, breach of express and/or implied warranties, invasion of privacy, intentional infliction of emotional distress and negligence. The Millers’ claims against Sterling were arbitrated, with the millions the Millers originally claimed reduced to the refund amount. The case is still at the pleading stage as regards the Church parties.
Dee and Glover Rowe v. Church of Scientology of Orange County, et al.: This is another Toby Plevin/CAN suit naming the Church of Scientology of Orange County, RTC, CSI, the Sea Org and Does 1-100. It was filed on October 7, 1991, alleging fraud/deceptive trade practices, invasion of privacy, false imprisonment, assault, and intentional infliction of emotional distress. The suit essentially repeats the allegations made by the Rowes in the May 6, 1991 edition of Time magazine, that they took courses at Sterling Management Systems and allegedly under the guise of management training were induced to take Scientology services. Discovery in this case has demonstrated that the Rowe’s claims are contrived and maliciously false, and that these are people with a history of criminal activity. Glover Rowe embezzled
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money from a fraternity in college and Dee Rowe has a history of emotional turbulence starting long before any contact with any Scientology organization. One of their claims, which has already been dismissed on summary judgment, was that the Church bugged their hotel room. This was a completely fabricated claim as seen by the fact that the staff of the hotel testified that this was impossible and that the Rowes could “support” it only by stating without any proof that their room “must have been bugged.” It was not, a fact quickly recognized by the court. The Rowes were referred to Time magazine by CAN and continue to be encouraged by CAN.
Pretrial summary judgment motions are still being considered in this case and the Church expects all of the Rowe’s claims to be dismissed. The Church also expects to prevail on a counterclaim naming the Rowes and CAN defendants, for libel and breach of contract, and that by deprogramming the Rowes, CAN interfered with the Church’s relationship with the Rowes.
Frank and Joan Sanchez v. Sterling Management Systems, et al.: This is yet another CAN-inspired suit involving a dentist, Frank Sanchez and his wife, Joan Sanchez, filed against Sterling, the Church of Scientology of Orange County and IAS.
The Sanchezes attended a Sterling seminar at the end of October 1989, after which Sanchez asked Sterling to administer a program in his office. The Sanchezes went to the Church of Scientology of Orange County in December 1989 and were involved with the Church for less than a month. Sanchez wanted help with his marriage as he and his wife had marriage counseling over a twenty year period but it had been unable to straighten out problems arising from twenty years of adulterous affairs. Joanne Sanchez was opposed to the trip to Sterling and Orange County and went only because her husband wanted her to go.
The Sanchezes paid some money to Sterling and the Orange County Church, but then returned to New Mexico and refused further participation in any services at either Sterling or the Church, which would appear to have been directly caused by negative information provided them by CAN. Although the bottom line of what they are seeking is a refund of their money, their complaint asks for damages for breach of contract, intentional infliction of emotional distress, breach of covenant of good faith and fair dealing, for fraud and all the usual, boilerplate CAN allegations. The suit was dismissed with respect to the Orange County Church and it is expected that ultimately it will be settled for a repayment of the money they paid to Sterling.
Thomas Spencer v. The Church of Scientology, et al.: This suit was settled for a refund and dismissed on August 31, 1992. It was another suit for refund laced with the standard CAN claims,
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breach of contract, fraud, and intentional infliction of emotional distress.
Irene Zaferes v. Church of Scientology: This was a personal injury suit filed in April 11, 1989. The plaintiff was a Hollywood woman who claimed that a wrongful death occurred when her brother, Luke Andrea (a.k.a. Louis Zaferes) died on April 12, 1988, some months after he did some “heavy construction work” at the Church of Scientology Flag Service Org, while having a heart condition. Zaferes was acting as her own attorney. The case was dismissed.
Jo Ann Scrivano v. Church of Scientology of New York, et al.: Jo Ann Scrivano, had an extensive psychiatric history including the use of heavy psychiatric drugs, before she came to the Church of Scientology Mission of Long Island in January of 1986. After receiving a small amount of introductory level auditing for which she donated $450, Mrs. Scrivano became upset and blamed this on her auditing. She was offered her money back, but refused it and left. She subsequently filed a suit naming not just the Long Island Church but also a number Church organizations that had never heard of her. She even alleged an array of torts and sought $10,000,450 in damages. Her claims include Fraud, Constructive Trust, Breach of Fiduciary Duty, Malpractice, Negligence, and Intentional Infliction of Emotional Distress. None of these claims is true, and both Scrivano’s own attorneys and the judge assigned to the case have encouraged her to accept a token settlement offered by the Church just to get rid of the suit.
Marissa Alimata and Richard Wolfson v. Church of Scientology of California, etc., et al.: This case, of Marissa and Richard Wolfson, furnishes an excellent example of how any fruitcake can file a civil suit. The Wolfsons sued for $1 billion alleging intentional infliction of emotional distress and that the conduct of the Church was “outrageous, fraudulent, malicious, abusive, indecent, intentional, unduly influential, willful, wanton and beyond bounds of common human decency.” They claimed to have been subject to “undue influence” and to have suffered “violation of fiduciary relationship,” interference with prospective economic advantage, loss of consortium and fraud. Before winning summary judgment on all of the Wolfsons’ claims, the church was required to endure the public airing of delusional charges and suffer through such bizarre conduct as Mr. Wolfson appearing at his deposition dressed as Mrs. Wolfson.
Sherry Fortune v. Church of Scientology American Saint Hill Organization and Chuck Tingley: This case was brought by Sherry Fortune against the Church of Scientology American Saint Hill Organization and Chuck Tingley, her former husband, an independent contractor who had been a computer programmer at the Church. The case was essentially a domestic dispute between Fortune and Tingley that involved the rights to some computer software Tingley had developed. Fortune believed that naming the Church in her suit
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would give her additional leverage over her former husband so she alleged that the Church was guilty of intentional interference with economic advantage, fraud and misrepresentation, intentional infliction of emotional distress, and conversion. The frivolous claims against the Church were dismissed and Fortune and Tingley reached a settlement between them.
Gary and Susan Silcock v. Church of Scientology, Mission of Salt Lake, et al.: The Silcock’s received some religious services from the Church of Scientology Mission of Salt Lake in 1984 and then asked for a refund. The refund amounts requested were paid to the Silcocks and the suit was dismissed in September 1986.
Pedro H. Rimando and Irene Marshall v. The Church of Scientology of San Francisco, et al.: This suit was a suit brought by the parents of Rodney Rimando, a former Church staff member who committed suicide in November 1986 by jumping out of a window of a Church of Scientology building. The suit’s claims were wrongful death, intentional infliction of emotional distress, negligence, and outrageous conduct. The suit claimed that Rimando came to the Church of Scientology of San Francisco for spiritual guidance and that no precautions were taken to prevent his suicide or see that he got psychiatric help. This suit only came about because a CAN attorney incited the parents to file it. The parents did not really believe the Church to be responsible for their son’s suicide. The suit was never served and was voluntarily dismissed with prejudice.
Wendy and William Rabel v. Eric Rising, Jane Doe Rising, Church of Scientology Mission of University Way, et al.: As described previously, this suit involved an incident where a stereo speaker placed in the window of the University Way Mission in Seattle, Washington fell out of the window and struck Wendy Rabel on the head. A settlement payment was negotiated and the case was dismissed in January 1988.
Francine Necochea, a minor child, by her Guardian Ad Litem Cecilia Garcia v. Church of Scientology, et al.: This was an insurance suit dealing with an incident in 1983 when a girl on a motorized bike hit a Golden Era Studios Bus. She sustained a broken leg and other minor injuries. The girl’s family sued the Church and the Church’s insurance company handled the case and settled it for $5,000.
Roxanne Friend v. Church of Scientology International, et al.: Some background leading up to the filing of this suit will help make it understandable.
Shortly after breaking away from the Church of Scientology, Roxanne Friend became romantically involved with a non-Scientologist. After an on-again, off-again relationship, they
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finally broke off the relationship in August 1989. For months after this Friend experienced what she later characterized on a medical questionnaire as a “nervous breakdown.”
Documents authenticated by Friend in her own hand illustrate her state of mind during this period, and outline the series of bizarre and violent acts that she admits were preceded and prompted by the break-up with her non-Scientologist boyfriend. She first secretly absconded with her former boyfriend’s young son and molested him sexually. She next tried to persuade a karate instructor to murder her former boyfriend. Failing this, she wrote letters to the ex-boyfriend claiming that he had drugged, hypnotized and forced her to perform lewd sexual acts for he and his friends. When all of this further alienated the man, her conduct became more bizarre. She scrubbed her mare’s vagina with bleach causing the animal severe pain and then physically assaulted and injured the proprietor of the stable when she tried to intercede on behalf of the horse. A bit later Friend was stopped for dangerous reckless driving and resisted arrest by assaulting a police officer.
Church staff who knew Friend and Friend’s brother, nonetheless attempted to help by taking her to doctors in Los Angeles and then escorting her to Florida to be in a less stressful environment where she could also be examined by doctors. Once in Florida, Friend refused help, and went to the police with the hallucinatory claim that someone put crack cocaine in her cigarettes to account for her bizarre behavior. She was taken to a hospital at her insistence. The Church attempted to get her to submit to a full medical examination, knowing that most such behavior episodes are initially prompted by some undetected and untreated physical ailment. Friend refused.
Friend was then taken to her mother along with a written recommendation from the Church that she receive a full medical examination.
Friend’s mother ignored the recommendation and Friend was later arrested, incarcerated in a mental hospital and sent for counselling at a Jewish support group. A psychiatrist at that group turned her over to the Cult Awareness Network (CAN). As they do in every such case, CAN promptly pumped Friend full of false and derogatory information about the Church and turned her over to their attorney Plevin. Up to that point, when CAN became involved, Friend had never considered the efforts of the Church members to help her as anything other than help, and despite her agitated state, had never accused the Church of causing the condition — indeed she recognized that the break-up of her ill-fated romance was what brought it on. After being manipulated by CAN, however, Friend decided the Church was to blame and should pay her damages.
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Months after the Church had its last communication with Friend, she finally received two medical examinations. The first found nothing wrong with her. The second found that she had a large lump in her abdomen and it was diagnosed as a very rare form of cancer. Friend’s CAN attorneys, the same attorneys who had represented the Aznarans (see description of the Aznaran litigation in the response to your prior Question 10.d) considered this the next best thing to a plane crash, and suddenly saw in Friend the prospect of a circus trial with a dying woman to play on the emotions of a jury. Her attorneys rushed to court with a lawsuit that claimed the Church was responsible for her cancer not being earlier detected by not allowing her to see a doctor, and that all her psychotic episodes stemmed from this undetected physical condition. The attorneys characterized the efforts of Church members to help her as examples of assault and battery, wrongful imprisonment, invasion of privacy and intentional infliction of emotional distress. The suit also claimed the Church was guilty of fraud and false advertising and breached express and implied covenants in representing it would refund money to those not satisfied but then failing to do so.
These claims were completely unfounded as discovery proved that Friend had seen many doctors on a regular basis during the period that she was at the Church, both at the Church’s direction and on her own, and thus the Church took the appropriate measures to see that she got the care and diagnosis needed. Her own doctor testified that the type of cancer Friend contracted was very rare and virtually undetectable by modern medical science until well developed and spread. The doctor testified that the only way to detect such cancer was for the patient to complain of a lump and then have a biopsy performed. Friend subsequently testified that she had felt a lump developing for two years, but never mentioned it during that time to the several doctors she did see.
The Church settled this case for nuisance value, for less than the cost of a trial, even if the Church prevailed. David Miscavige met with Friend in settlement talks as he was concerned that her attorneys would leave her destitute when doctor reports were submitted in court stating she only had several months left to live. Once settlement terms were generally agreed upon, the first thing Friend did was ask whether if she miraculously recovered, could she get back into the Church and take services. Thus, in the final analysis Friend herself acknowledged that her frightening claims against the Church were contrived.
To our knowledge, despite the claims that were made by Friend and her attorneys of imminent death, she is still alive.
Bruce and Lynnel Arbuckle v. Skip Pagel M.D., Church of Scientology Celebrity Center Portland, et al.: This suit was brought by the parents of Chris Arbuckle, a former Church
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parishioner, who died of kidney failure. The suit’s claims were wrongful death against Scientologist Dr. Skip Pagel and the Tuality Community Hospital, and breach of fiduciary duty against the Church of Scientology Celebrity Centre Portland, Church of Scientology of Portland and Church of Scientology Mission of Fairfax. Arbuckle, a 25-year-old chiropractor, participated in the Purification Rundown after first receiving a physical examination by Dr. Pagel. Subsequent to this Arbuckle died, in August of 1986, of a heart attack resulting from a kidney failure which followed a dying liver, with the cause of the dying liver attributed to “probably hepatitis” on the death certificate. The complaint alleged that the Purification Rundown caused this to occur. What was found on further examination was that Arbuckle was known to be abusing steroids for body building purposes, that he had undergone a bout of hepatitis prior to doing the Purification Rundown (which he did not disclose to Dr. Pagel), and that a pathologist familiar with Arbuckle’s death stated that his liver died as a result of Hepatitis B, and that there was no way the Purification RD could have caused this to occur. The suit was settled and dismissed in August 1990.
In re Dynamic Publications Inc.: Dynamic Publications was a company owned by two now-expelled former Scientologists, who filed for bankruptcy in early 1987 in United States Bankruptcy Court for the District of Maryland. The trustee in bankruptcy, appointed by the court to collect all the assets of the company, determined that these individuals had made donations to Churches of Scientology and Scientology-related organizations through the company and sought to get some of this money back as having been fraudulently conveyed when the company was in debt. The suit was settled in January of 1991.
Ted Patrick, et al. v. Church of Scientology of Portland, et al.: The Church of Scientology of Portland filed a suit against the deprogrammers of Julie Christofferson in September, 1980, suing them for barratry and practicing medicine without license. Ted Patrick, a convicted felon, was one of the deprogrammers. He filed a counterclaim in September 1980 alleging abuse of process and claiming that the Church’s suit was frivolous and vexatious. The attorney on the suit was an associate of Michael Flynn associate. The counter-suit was ultimately dismissed.
Gregory F. Henderson v. A Brilliant Film Company, et al. and Gregory F. Henderson v. Marvin Price, et al.: Henderson had a contract with Brilliant Film Company to shoot a movie written by L. Ron Hubbard. Brilliant Film went bankrupt and Henderson filed suit on May 14, 1982 against a series of defendants, including L. Ron Hubbard. It raised financial claims and also that there had been a conspiracy to induce Henderson to agree to a loan that would not be repaid and to keep him from pursuing his legal remedies. He
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also filed a second suit, against Marvin Price, an ex-Scientologist who had was the mission holder of the Church of Scientology Mission of Stockton stating claims for negligent misrepresentation, fraud, breach of fiduciary relationship and conspiracy to defraud. The suit with Brilliant Film Company was settled and the other suit was then dismissed with prejudice in July 1984.
Peter Siegel v. Religious Technology Center, et al.: Peter Siegel is a “sports hypnotherapist”, doing business as “Achievement Plus Institute”. Siegel used a logo similar to a trademark owned by RTC. Attempts were made prior to litigation to settle Siegel’s confusion as to the ownership of the mark, which was registered by RTC in December 9, 1986, and to obviate the need for litigation. Siegel was uncooperative in this and RTC and CSI filed suit. Siegel filed a pro per cross-complaint on December 20, 1989 for registration of the mark in his name, cancellation of RTC’s registration, trademark infringement, intentional infliction of emotional distress and revocation of RTC and CSI’s tax-exempt status. Siegel has no valid claim to this trademark and RTC’s summary judgment motion is presently pending. Although Toby Plevin came in at the last minute to represent the defendant at the summary judgment hearing, the court, after hearing her argument, told Plaintiff’s counsel to propose an order on the summary judgment motion to be written from the viewpoint that the court was ruling in Plaintiff’s favor. The court has also asked for more detailed information concerning RTC’s pending motion for attorneys’ fees.
Steve Dunning v. Church of Scientology, et al.: Dunning was a Church staff member for three months in 1983 and came and went for very brief periods after that. He is currently in a half way house for psychiatric patients where he committed himself because he could not function in the outside world, has an outstandingwarrant for his arrest in North Carolina for assault with a deadly weapon and another arrest for threatening someone with a knife. He filed a suit against the Church asking for over $5 billion claiming breach of contract, breach of implied covenant of good faith and fair dealing claims, fraud and intentional infliction of emotional distress. The suit was completely groundless and it was dismissed in favor of the Church in August 1987 when Dunning failed to appear at the hearing on the Church’s Motion for Entry of Final Judgment.
Jeff and Arlene Dubron v. Church of Scientology International, et al.: This suit which named 21 defendants and 50 “John Doe” defendants, alleged claims of defamation, invasion of privacy, outrageous conduct, and negligent infliction of emotional distress. The suit stemmed out of an incident where some Church staff posted a notice around Scientology churches calling for Scientologists to report unethical conduct and used some facts concerning Dubron as an example. The suit was voluntarily dismissed.
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Vicki Adler v. American Sun, Inc., Church of Scientology of Los Angeles: This suit alleged emotional distress as a result of Adler’s alleged brainwashing by American Sun, a business owned and operated by several Scientologists. The suit was essentially an employment dispute between Adler and American Sun where Adler made Scientology an issue to intimidate the company. The suit was settled and dismissed in 1988.
Benham v. Church of Scientology Celebrity Center of Dallas This was a personal injury case in Dallas, Texas. Vicki Benham alleged that she was injured while on the Purification Rundown and that she had emotional distress. The case was settled in 1991 for a refund and nominal nuisance fee which was paid by the insurance company.
Michael Burns v. The Recording Institute of Detroit, Inc., et al.: This case was filed on July 25, 1991 against the Church of Scientology of Michigan, Church of Scientology Flag Service Org and several individual Scientologists, and a recording school owned by a Scientologist. Burns claimed that he was subjected to mind control by the Scientologist from the recording school and that this induced Burns to become involved with Scientology and join Church staff, which prevented him from pursuing his studies in the recording field. The case alleged fraud, breach of contract, intentional interference with a contractual relationship, intentional infliction with emotional distress, and conspiracy. The suit has no merit and is expected to be dismissed shortly.
Clay Eberle and Eberle & Jordan Law Firm v. Church of Scientology of California: Eberle is an attorney who formerly represented refund/repayment claimants suing the Church. His suit alleges that he was damaged when CSC settled directly with some of the claimants as the claimants then did not pay him attorneys’ fees. In April 1988, the Court granted the Church’s summary judgment motion dismissing the case and ruled that there was a qualified privilege for the Church to deal directly with its former members notwithstanding the retention of an attorney by the former member, and there was no evidence that the Church intended for the persons to breach their attorney/client contracts with Eberle, and no evidence that the Church caused the attorney/client contracts to be breached.
Mario Metellus v. Church of Scientology of New York, and Linda Barragan: Metellus was a non-Church member who responded to an advertisement placed by the New York Church for part-time help. After working less than a day, on November 29, 1989 he was dismissed. Metellus refused to leave and the police had to be called in to remove him from the premises. Metellus even refused to respond to the police officer’s directions to leave and
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was arrested. When Metellus refused to allow the police to take his fingerprints, he was held in custody. The complaint, claimed that Metellus was falsely accused of criminal trespassing and falsely arrested. Metellus also sued the City of New York. The complaint against the New York Church was settled for a nominal amount.
In this subparagraph, the Service has asked for a copy of any verdict, decision or judicial finding that any Scientology-related organization or individual was involved in the commission of an intentional tort or violation of criminal law. Copies of these documents are attached as Exhibit 10-P. There were verdicts, or decisions with judicial findings of intentional torts in only four of the cases discussed on the pages of the prior submission referenced in this question, and all of these cases were discussed in the response to Question 4.d of the Service’s May letter — the Stifler case, the Christofferson case, the Wollersheim case, and the Armstrong case, discussed at pages 10-12; 10-15 to 10-16; 10-16; and, 10-12 respectively, of our prior response.
The Service has asked the Church to state whether it agrees with the findings of the Courts in each of the above decisions. The Church’s response to this part of the question follows:
Lawrence Stifler v. Church of Scientology of Boston:
The Stifler case was, for all practical purposes, won by the Church, as the only money judgment in the case was entered against an individual Church member for $979 in medical bills. This was one of Michael Flynn’s stable of cases described in our prior response at 10-12. Lawrence Stifler accosted a staff member of the Boston Church, Roger Sylvester, on the streets of Boston, Massachussetts in the early 1980’s. Stifler verbally abused Sylvester for attempting to disseminate his religion. Both men lost their tempers and came to blows. As a result of the altercation Stifler suffered a minor injury to his knee. Stifler filed suit claiming $4,250,000 in damages.
During the 1984 trial, Flynn attempted to show that the altercation was part of a nefarious Church of Scientology scheme. Flynn sought to introduce his standard retinue of professional anti-Church witnesses in order to reap a large punitive damages award. The Court refused to go along with this charade, bifurcated the Boston and California Churches from the trial and prohibited Flynn from introducing any of his general Scientology issues or “evidence.”
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Stifler claimed to have suffered major trauma to his knee which had permanently incapacitated him. Yet, when the evidence was presented at the trial, the defense showed that whatever injuries he may have suffered at the time of the altercation with Sylvester were extremely minor. Evidence supporting this defense included photographs of Stifler engaging in competitive stair climbing up skyscrapers at the very time he claimed to be incapacitated. The jury awarded a mere $979.00 against Sylvester to cover Stifler’s medical costs, and the Church defendants were dismissed from the case.
The Church disagrees with the fact that Stifler was awarded any money at all. The Church agrees with the dismissal of the Church of Scientology of Boston and the Church of Scientology of California from the case.
Church of Scientology v. Gerald Armstrong:
We have included some background information here and an epilogue to the decision in question. That is because the Service has continuously thrust the Armstrong case at us, demanding an explanation. The Armstrong case decision was so inflammatory and intemperate that it was used to stigmatize the Church in the legal arena and make other outrageous decisions possible. As we shall demonstrate below, all this decision ever involved was Armstrong’s state of mind, which subsequently obtained evidence proved conclusively to be one sordid, sado-masochistic nightmare. Furthermore, Armstrong’s state of mind horror stories have fallen on deaf ears in recent litigation. Relying on Armstrong or the Armstrong decision is wholly unjustified.
During the later years of his tenure as an employee of the Church, Gerald Armstrong was placed in charge of a huge quantity of documents that belonged to Mr. Hubbard that contained private and personal information regarding Mr. Hubbard. Part of his duties included research to support the work of an author who had been retained to write an authorized biography of Mr. Hubbard.
In late 1981 after the initial clean out of the higher levels of the Guardian’s Office, and when investigations were turning toward identifying those in alliance or sympathy with the GO, Armstrong suddenly vacated Church premises and left its employ, taking with him huge numbers of confidential documents that belonged to Mr. Hubbard or his wife which the Church was holding as bailee. It was no coincidence that Armstrong left at that time because he had repeatedly expressed his ambition to join the GO and work in Bureau 1 (Information Bureau), the same area of GO that had been responsible for the criminal acts of the 70’s. Armstrong also had been a long-time friend and confidant of Laurel Sullivan. Just prior to the take over the GO taking place, Sullivan had made a
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proposal to place convicted GO members into corporate positions of control throughout the top of the ecclesiastical hierarchy. She was also found to be spying on the CMO for the GO during the early days of the CMO’s investigation into the GO. Armstrong assisted and supported Sullivan in her efforts.
In the summer of 1982 the Church received evidence that Armstrong had stolen thousands of documents from archives when he left the Church. Church counsel wrote to Armstrong, demanding that he return them. Armstrong denied the theft.
Once the demand for return of documents was made, Armstrong turned the stolen documents over to Michael Flynn, with whom Armstrong decided he could make a lot of money.
In August 1982, the Church sued Armstrong for conversion, breach of fiduciary duty and confidence, and invasion of privacy based on Armstrong’s theft of extensive amounts of private papers owned by the Church or the Hubbards. The Church sought return of the papers and the imposition of a constructive trust over them, and any proceeds derived from them, as well as preliminary and permanent injunctive relief against dissemination or disclosure of the private documents.
In September 1982, Armstrong, represented by Flynn, answered the complaint and raised the defense that he was justified in stealing the documents entrusted to him as a fiduciary because he wished to make public information about Mr. Hubbard and the Church out of fear for his safety and well-being. His defense was stricken on four different occasions by three different judges.
In April 1984, the case was assigned for trial before Judge Paul Breckenridge, Jr. At that time, the Church presented motions in limine to prevent Armstrong from introducing the stolen, confidential documents since their introduction into evidence would vitiate the very rights of privacy the action sought to protect. The Court not only allowed Armstrong to introduce the confidential documents, but also allowed him to raise his four-times stricken defense with a new perverted twist. He would not have to prove there was anything to fear from the Church, but only his state of mind when he stole the documents. The Church was completely ambushed in the trial by these documents, as in most cases Armstrong had stolen the only copy that existed. Then, after he and Flynn had ample time to prepare their case from them, the documents were placed under seal in the Court. Although the inflammatory allegations that Armstrong made and purported to support with these docments could have been shown to be false or grossly distorted by other evidence, the Church had no chance to prepare and put on that evidence before being hit with the documents in court.
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During the trial, Armstrong presented testimony from numerous witnesses who testified for the purpose of establishing Armstrong’s supposed “state of mind” with regard to his alleged justification for stealing the documents. Each of the witnesses was hostile to the Church and, in fact, was a plaintiff against or taking a position adverse to the Church in other litigation in which Flynn was the counsel. Each witness gave general testimony about his or her own viewpoint on relationships with the Church in an effort to bolster Armstrong’s state of mind justification defense.
The Court did not allow the Church to put on evidence to rebut the testimony of those witnesses. The Court also declined to allow the Church to put on evidence explaining the confidential documents and precluded the Church’s proffered rebuttal evidence on the ground that the adverse testimony was admitted only for the purpose of establishing Armstrong’s state of mind and not for the truth or falsity of the matter testified about.
On July 20, 1984, Judge Breckenridge issued a Statement of Intended Decision which became final a month later, which held that the Church had “made out a prima facie case of conversion…, breach of fiduciary duty, and breach of confidence” (as the former employer who provided confidential materials to its then employee for certain specific purposes, which the employee later used for other purposes to employer’s detriment). Judgment, however, was entered in favor of Armstrong. The Statement of Decision adopted as the facts of the case the allegations which Armstrong had made in his trial brief. These allegations included the statements on which Armstrong premised his justification defense; i.e., that defendant “… became terrified and feared that his life and the life of his wife were in danger, and he also feared he would be the target of costly and harassing lawsuits.” The judge went on to pontificate on the psychological mind-set of not only Mr. Hubbard, but Scientology at large. The only lawsuit that there was to fear was the one that was ultimately filed for return of the stolen documents. It never would have been brought had Armstrong voluntarily returned the documents when asked, despite the theft.
The IRS CID, however, absorbed Breckenridge’s findings as the definitive statement of what Scientology is, and used this decision and the Flynn witnesses who testified at the trial as the nucleus of their investigation. The Church tried repeatedly to explain to the IRS that the Armstrong decision was nothing more than a statement concerning Armstrong’s state of mind. The CID and EO weren’t interested, as they found in Armstrong a kindred spirit who echoed their own sentiments. They therefore embraced Armstrong and the Flynn witnesses and used their fabrications as the basis for their investigations and denials of exemption.
Evidence found after the Armstrong trial proves not only that Armstrong never was afraid of the Church as he claimed at trial,
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but that he was engineering a plan to infiltrate and take over the Church at the behest of the CID.
Shortly after the trial, Armstrong’s conspiracy against the Church surfaced when he sought, at the behest of IRS CID agents Al Lipkin and Phillip Xanthos, to recruit Church employees and organize them against the Church. To this end Armstrong contacted a Church member and former friend to enlist his aid in recruiting a group of dissident Scientologists to overthrow Church management. After this individual, however, informed the Church of Armstrong’s plan, it obtained permission from the Los Angeles Police Department to conduct undercover surveillance of Armstrong. The Church then used two “undercover” persons to collect evidence of Armstrong’s machinations.
Videotaped conversations show that Armstrong intended to recruit additional persons to create “as much shit for the organization as possible.” Armstrong intended to foster this plan by creating sham lawsuits against the Church, seeding the Church’s files with forged and “incriminating” documents which would then be seized in a raid by the Internal Revenue Service as part of the then ongoing CID investigation, taking control of the Church after such a raid, and lying under oath to prevent discovery and to protect Armstrong’s co-conspirators.
Armstrong admitted on videotape that there was no basis in fact for his justification defense since he had no fear that anyone associated with the Church could or would harm him. Speaking with an undercover operative known to Armstrong as “Joey,” Armstrong revealed his “justification” defense for the fraud it was, and that his only “fear” was that his conspiratorial plans would be discovered:
JOEY: Well, you’re not hiding!
JOEY: You’re not hiding.
ARMSTRONG: Fuck no! And. . .
JOEY: You’re not afraid, are you?
ARMSTRONG: No! And that’s why I’m in a fucking stronger position than they are!
JOEY: How’s that?
ARMSTRONG: Why, I’ll bring them to their knees!
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Armstrong requested that the undercover persons give him Church documents so that he could forge documents in the same style. In particularly revealing language with respect to the documents he stole and later relied on at trial, Armstrong stated with respect to forgeries that he can “create documents with relative ease” because he “did it for a living.” (Exhibit III-10-Q).2
Armstrong then planned to “plant” forged, incriminating documents in the Church’s files so that those documents could be later discovered and used to discredit the Church. Armstrong planned to “tip off” investigators for the Criminal Investigations Division of the Internal Revenue Service once the phony documents were safely planted so that they could be “discovered” in a later IRS raid.
JOEY: (Laughs) Great, so what kind of stuff are we going to want to create and who’s going to get it?
ARMSTRONG: That’s what we need to talk about!
* * *
JOEY: — and what do the agencies want on this?
ARMSTRONG: O.K. Well, the agencies have asked for some specific things, that’s all they asked for. Now – – * * *
JOEY: Now, who wanted this?
The videotapes also reveal Armstrong’s true motivations and his systematic and fraudulent sabotage of the trial. Armstrong stated he would bring the Church to its knees and that the fomentation of litigation was one of the prime vehicles for accomplishing this objective. He stated:
ARMSTRONG: That they’re going to lose in a whole bunch of jurisdictions. They’re going to lose, they’re going to lose, they’re going to lose (tapping his palm each time he said it). And they’re going to start losing (shrugs) 1985. They only even have to lose one, and attorneys all over the country are going to jump on the fucking bandwagon. And watch, you know, all of a sudden you’ve got precedents being established, which are incredible.
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Armstrong further explained that, from his perspective, neither the truth nor good faith play any significant role in litigation. He instructed the undercover Church member that facts mean nothing to a civil litigant and that truth is merely an avoidable obstacle. Armstrong explained how a civil claim can be pursued despite an absence of a claim or essential facts:
ARMSTRONG: They can allege it. They can allege it. They don’t even have — they can allege it.
MIKE: So they don’t even have to have the document sitting in front of them and then —
ARMSTRONG: Fucking say the organization destroys the documents
* * *
ARMSTRONG: Where are the — we don’t have to prove a goddam thing. We don’t have to prove shit; we just have to allege it.
As to Armstrong’s “dedication to the truth,” for which he is complimented in the trial court’s decision, Armstrong took the opportunity to instruct both “Joey” and “Mike” separately on the need and desirability of lying under oath:
ARMSTRONG: . . . . By the way, no one will ever get any names, any communications, any times, any dates or anything out of me, that’s just the way it is. I’ll go to prison before I ever talk, okay. So you have to know that, because they’re wanting to depose me every couple of months. I’m simply saying no, anyone I talked to that’s, that has nothing whatsoever to do with this lawsuit, the causes of action in my lawsuit began in 1969 when I was enticed into the Sea Organization and it ended in 1981, or they actually they continue on because you guys have continued to harass me but you…
MIKE: Not us, hey!
ARMSTRONG: No, I’m telling you what I would tell them in deposition, but they don’t get anything else, go ahead.
MIKE: Okay, so that, that’s fine, we have an agreement on that point.
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ARMSTRONG: Right. And you guys also have to have your agreements marked out between yourselves too, like, I don’t know who knows I’m involved but, I’ll deny it!
MIKE: Okay, well, we haven’t said anything either.
ARMSTRONG: Good, Good.
Armstrong was even more direct in discussing the fine points of perjury when speaking with Joey:
ARMSTRONG: OK. What are our conversations, should it come down to it?
JOEY: What do you mean?
ARMSTRONG: What do we talk about. You’re deposed. You walk out there, and there’s a PI hands you paper, saying you’re deposed Jack, and not only that, you’re out of the organization. And what do you say in deposition. Well,Armstrong and I talked about this, and he had a whole bunch of ideas about how to infiltrate the communication lines and spread turmoil and disaster, you know! What are we doing here? That’s my question, before I tell you my ideas on documents.
* * * *
ARMSTRONG: OK. So as far as the doc… Let me just say ah, you and I get together, we get together because I have a goal of global settlement. You have felt that the turmoil and abuses and so on have gone on too long… Hence we get together and discuss things. We have not discussed anything about a destruction of the tech, or Scientology is bad, or anything like that. Are we agreed?
The evidence shows Armstrong’s state of mind, not to be fear, but instead to be of a calculating, aggressive and dishonest character.
Armstrong’s own writings illustrate Armstrong’s state of mind to be sickly and twisted. Attached are two examples of Armstrong’s writings illustrating Armstrong’s psychosis and his plan to entrap a senior Scientologist in a compromising sexual situation, as previously presented but not provided to the Service. (Exhibits III-10-R and III-10-S).
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We do not enjoy even reading much less repeating Armstrong’s demented ramblings. However, we have tried to explain to the IRS at every level that the Armstrong decision only stood for what Armstrong’s feigned state of mind was during the trial. Yet, the allegations kept getting raised for us to have to deal with as some sort of fact. And they are being raised here again.
The Armstrong case was reviewed by the California Court of Appeal in summer 1991. The Court of Appeal refused to accept the evidence that the Church had discovered after the trial as outlined above, on the technicality that the trial court never got to see it first (an impossibility since it was obtained after the trial). The Court of Appeal upheld Breckenridge’s decision on the legal technicality that it believed a justification defense is available to defend against theft in California. As to the Church’s protest to the gratuitous and condemning language of the Armstrong decision, the Court of Appeal ruled there was not a problem of stigmatization because Breckenridge was only reciting Armstrong’s purported state of mind – exactly what we had been telling the IRS from 1984 to this writing.
In December 1986, Armstrong entered into a settlement agreement with the Church as part of the overall Flynn case settlement. The agreement was designed to resolve all present and future issues between the parties. Armstrong agreed not to insert himself into future legal proceedings regarding the Church absent legal process. Within a short time after receiving the Church’s money, however, Armstrong embarked on a course of conduct in direct, intentional violation of that agreement.
Upon entering into the agreement, Armstrong acknowledged that he understood the provisions of the settlement and had received legal advice thereon. Armstrong now states, however, that he found these provisions to be “not worth the paper they were printed on.” He now says that he “put on a happy face” and “went through the charade” of signing the settlement agreement. The Church recently sued Armstrong for his blatant disregard of his obligations under the settlement agreement. After a full hearing, in which Armstrong was able to fully air his “justification defense”, essentially replaying his 1984 case, another Superior Court Judge was not impressed and slapped Armstrong with a preliminary injunction. So, history has proven Breckenridge wrong. Armstrong is anything but frightened. As he so clearly said – “just allege it.”
There is a compelling body of evidence that suggests that Armstrong case was manufactured and arranged by the IRS prior to it even going to trial. The following is brief synopsis of some of that evidence:
– The IRS was part of Armstrong’s attorney Flynn’s FAMCO plan from the very beginning. FAMCO documents disclosed plans to create
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“Federal and State attacks” with the objective of “closing orgs”. Flynn conducted a FAMCO conference in May 1981 that included “representatives of Internal Revenue Service”
– The IRS was the recipient of attorney-client privileged audio-taped conferences that were stolen by Armstrong. The IRS pleaded at one point during the US v. Zolin proceedings (see more about this below) that they had received a copy of the tapes from a “confidential informant” whom they refused to identify. This revelation shows the CID had a very strong vested interest in Armstrong being found justified, after they were in receipt of stolen property. This is evidence of motive for tampering with the outcome of the Armstrong case. It also explains their conduct in illegally and secretly obtaining a “legitimate” copy of the tapes from the Superior Court after the Breckenridge decision had been rendered.
– Despite the fact that communication with the IRS or any other federal agency was never an issue in the Armstrong case, Breckenridge’s ruling inexplicably invited Armstrong to discuss the contents of the sealed archives documents, and share them, with “any duly constituted Governmental Law Enforcement Agency”.
– During post trial proceedings, Armstrong’s counsel let slip a mention to Judge Breckenridge that “The IRS is interested, as the court probably knows. An investigation is ongoing right now with respect to the IRS criminal office concerning the testimony in this case and the evidence that was introduced at trial.” However, the Church knew of no such investigation and was not informed of such for 2 months. In fact, the CID to this day claims the investigation did not begin until July. Apparently, the IRS saw fit to inform Armstrong, his attorneys, and a sitting Judge about their investigation before informing the Church or the individual targets. The only explanation for this is ex parte communication with the judge on the part of the IRS to the exclusion of the Church.
– Discovery in the Canadian case revealed that Armstrong’s video taped statements concerning Flynn, the IRS CID and the Ontario Provincial Police (OPP) actively conspiring to create the “collapse” of the Scientology religion were borne out. Detective Ciampini’s notes revealed constant communication with Armstrong, Flynn, and LA CID agents. The CID agents travelled to Canada in late 1984 to coordinate. Canadian documents and agent testimony also revealed that Ciampini and his associates travelled to LA to coordinate with Armstrong and LA IRS in April 1984 – one month BEFORE the Armstrong trial.
– The CID’s own Special Agent’s Report of May, 1985 also corroborated that they were working in alignment with the FAMCO plan and Armstrong’s video taped aims. The report stated that the
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objective of the investigation was to cause the “ultimate halt” to and “final disintegration” of the Church of Scientology.
– In the David Miscavige v. IRS FOIA case covering the IRS CID files, the IRS has strenuously evaded acknowledging the name of a single informant, despite the fact Mr. Miscavige has provided public documents irrefutably proving two dozen of them are Flynn clients. In fact, every single witness for Armstrong was an IRS CID informant. The CID has gone so far as to knowingly file a forged document in order to prejudice the court in the effort to prevent the disclosure of any documents generated by informant contacts.
– LA CID agents have sworn under oath several times that the CID investigation started as the result of a 11 July, 1984 New York Times story that covered the Armstrong case. Yet, the New York Times story itself quoted an IRS spokesman as claiming the “Internal Revenue Service has been investigating Mr. Hubbard’s financial arrangement with the Church of Scientology for more than a year.”
– On Sept 26, 1984 David Miscavige met with several high ranking IRS officials in Washington D.C. including Al Winbourne, Charles Rumph, Joe Tedesco, Marvin Friendlander, and Bill Connet, to answer to allegations made in the New York Times article since that was what purportedly caused the CID investigation. When Mr. Miscavige began by asking how the NY Times article could be the impetus for the CID investigation when the same article states it has been going on for a year, none of the IRS personnel could answer and in fact ended the entire discussion on the article – yet an explanation of the article is precisely why they asked for someone to attend this meeting.
CID agents continuously dispute evidence that their investigation began earlier than the 11 July, 1984 New York Times article. If the investigation started before 11 July, then it would clearly show there was no “reason” for it, other than the reason that has been clearly emerging in evidence obtained through discovery in Canada, and in FOIA cases – to wit, the CID started the investigation much earlier, orchestrated the Armstrong case and N.Y. Times article as a pretext to justify their concerns, with the aim to bring about the “final halt” to and “ultimate disintegration” of Scientology.
The Church contends the 1984 Armstrong decision was brought about by IRS agents illegally working in collusion with private litigants. The Church vigorously disagrees with the 1984 decision and with Judge Breckenridge’s observations about Scientology. The Church agrees with the 1992 Armstrong decision preliminarily
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enjoining him from injecting himself into other private and government actions concerning the Church.
Among the fall-out from the Armstrong case has been litigation for most of the past decade over the IRS’s use of some of the fruits of Armstrong’s theft. In addition to Mr. Hubbard’s private and personal papers, Armstrong stole a tape made of a GO attorney conference in 1980. This conference was attended by Laurel Sullivan (later an IRS informant) who headed a project called Mission Corporate Category Sort Out (MCCS). The purpose of MCCS was to align the Church’s corporate structure with its expanding ecclesiastical hierarchy. MCCS was disbanded in early 1981, coincident with the overthrow and disbandment of the GO, when it was learned that Sullivan was attempting to place some of the indicted GO criminals in high corporate positions and also in control over the trade and service marks of Dianetics and Scientology.
The IRS gained illegal possession of these tapes through a secret summons served on clerk the Superior Court (Frank Zolin) without notice to the Church. A Federal Court later ruled the IRS must return the tapes back to their sealed position in the Superior Court. In defiance of the court order, the IRS made a copy of the tapes, transcribed them, and sent the transcripts to IRS agents around the country. Several CID and EO agents working on Church cases fully reviewed the transcripts, while the Church itself never had access to them.
The IRS has used the existence of the stolen tapes against the Church both in court and in the exemption proceedings. Knowing full well that the Church did not have access to them or knowledge of their contents, the IRS has demanded the Church provide copies of them in virtually every 1023 proceeding.
This ploy was taken to its most outrageous extreme in the CST declaratory judgement case before the Court of Claims in Washington DC. The Department of Justice attorney representing the IRS in this litigation vehemently asserted the bald face lie that CST failed to establish its entitlement to exemption by not providing copies of the MCCS tapes during its exemption proceedings. He used that as the stepping stone for the rest of his argument in which he speculated that nefarious purposes for the establishment of CST were evident in the MCCS tapes, and that these inferences had to be accepted since CST failed to produce them. Not only were the tapes unavailable to the Church, contrary to DOJ assertions, but the IRS had possession of them and knew they didn’t contain the inferences put forth to the court. The big lie was pressed so insistently and forcefully that the judge bought and premised his entire ruling on it.
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These tapes are still the subject of ongoing litigation. The most recent decision was rendered by the United States Supreme Court on November 16, 1992 in (U.S. v. Zolin which acknowledged that the IRS had access to the tapes in 1984 and had access in 1991 up through present time. In fact, the IRS argued unsuccessfully that because they had the tapes, the Church’s appeal of the ruling granting the IRS access was moot.
Christofferson v. Church of Scientology:
The Christofferson case, described at pages 10-15 and 10-16 of our prior response, went to trial twice, had two jury verdicts and both verdicts were overturned. The case ultimately was settled as a nuisance.
Julie Christofferson made her claims against the Church only after being kidnapped and deprogrammed by convicted felon and CAN founder Ted Patrick, and after being induced to file suit by unethical attorneys as part of Michael Flynn’s FAMCO scam, as described in the response to Question 10.d of our prior response. Christofferson’s attorneys were FAMCO members.
Christofferson claimed that she had been defrauded, brainwashed and subjected to emotional distress. The first trial of the case, conducted in 1979, was a free-for-all, in terms of Scientology bashing. The judge at that trial allowed Christofferson’s counsel to parade a string of former members and store-bought psychiatrists through the court room and essentially put the Scientology religion on trial, as seen through their hate-filled eyes. This resulted in a verdict against the Church of Scientology of Portland and other Church entities in the Portland area, of $2 million.
The Oregon Court of Appeals resoundingly reversed the verdict on the ground that it was a runaway, heresy trial prohibited by the First Amendment. The case was remanded for a new trial.
Given the admonitions of the Court of Appeals in remanding the case, the second trial should have been better controlled. It was not. If anything the second trial, conducted in 1985, was worse, as by that time Michael Flynn had put together a regular traveling circus of apostates that he exported to his allied FAMCO attorneys who were trying the case. All the witnesses had three things in common. One, they had never met Julie Christofferson. Two, they were all represented by Flynn and had a stake in the outcome of the litigation. Three, they were CID informants. This was the same turn-key arrangement used in the Armstrong case.
None of the witnesses had a single thing to say about Christofferson. They were simply summonsed to rant about the
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“evil” Church for days on end. Gerald Armstrong, an IRS informant whose love poem to a pig was written at plaintiff attorney Gary McMurry’s farm-home between days of testimony, spent several days denigrating the Church and its beliefs.
On cross examination Armstrong was questioned about the facts disclosed in the video tapes outlined earlier in the Armstrong section of this answer. True to his premeditated pledge to deny any of it, even under oath, he proceeded to do just that. Thus, he denied that he had ever been involved in any planning to take over the Church or to seed its files with phoney documents in preparation for a CID raid, and other similar facts that the tapes clearly documented. He was asked if he ever met with anyone to discuss anything like this. Armstrong vehemently denied it. His blatant perjury then was exposed when the Los Angeles police department sanctioned video tapes were put into evidence.
Within two hours of this testimony, CID agents and District Counsel attorneys were in Portland in the Judge’s chambers, and in a clear attempt at intimidation, demanded access to and sealing of the tapes. Simultaneously, CID agents Lipkin and Ristuccia visited the Chief of the Los Angeles police department to arrange cover for their operation. This case should have exploded in the plaintiff’s face with a summary perjury conviction of her star witness. Instead, as a result of IRS CID interference it was allowed to run its full course as a modern-day heresy trial against the Scientology religion.
Not only was Armstrong not charged with perjury, but other CID informants such as Laurel Sullivan, Bill Franks, Eddie Walters and Howard Schomer, were also allowed to disparage the Scientology religion to their heart’s content; and CAN psychologist Margaret Singer, whose theories on “cults” and “brainwashing” have subsequently been completely discredited in several courts, was allowed to expound upon those theories making Scientology out to be something entirely evil and diabolical. This went on to the point where once again Scientology was on trial and the jury was overwhelmed by the poisoned atmosphere and the inflammatory accusations.
The resulting $39 million verdict was so outrageous that a public outcry went up, not just from Scientologists but from the religious community at large. The judge himself was shocked, and in admitting that the case had gotten out of hand in violation of the court of appeals ruling in the first case, declared a mistrial and nullified the verdict completely.
The Church thus does not agree with the verdict reached by the jury but does agree with the mistrial declaration that nullified that verdict exactly 60 days after it was entered. Lawrence Wollersheim v. Church of Scientology of California.
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The Wollersheim case, discussed on page 10-16 of the prior submission is still under consideration by the California Supreme Court. The original $30,000,000 verdict was reached after months of testimony by Michael Flynn’s regular stable of witnesses, including Laurel Sullivan, Eddie Walters, and psychiatrist Margaret Singer, none of whom had even met Larry until the eve of trial. The trial was no different than Christofferson – same witnesses, same documents – except that it lasted for an additional two months. The entire trial was five months of unrestrained ridicule and attack of the Scientology religion.
On appeal the verdict was reduced by the California Court of Appeal to $2.5 million. The Court of Appeal characterized the amount of the verdict as “preposterous.” Although clearly shocked by the outrageous verdict, the court of appeal went out of its way to recite a factual record absolutely unsupported by the record below to justify Wollersheim receiving the $2.5 million they arbitrarily decided he was entitled to.
Both Wollersheim and the Church filed petitions with the United States Supreme Court. Wollersheim’s petition was denied, but the United States Supreme Court granted the Church’s petition, vacated the judgment and remanded the case to the state appellate court for further proceedings. On remand, the Court of Appeal issued a new decision giving Wollersheim a choice of accepting a $2.5 million award or having the case remanded for a new trial. When Wollersheim refused to accept the award, the Court of Appeals changed their decision and, instead of sending the case for a new trial as required, amended the decision to affirm their original award of $2.5 million.
That decision was superceded as a matter of law by the California Supreme Court’s grant this summer of CSC’s Petition for Review. The matter is pending before the California Supreme Court. The final adjudication of this case is yet to be made.
However, the only thing the Church of Scientology was ever guilty of with respect to Larry Wollersheim was trying to help him, which is why he kept coming back for over a decade, even after being expelled for unethical conduct. The Church obviously disagrees with the jury’s treatment of the Wollersheim case as well as the dishonest manner in which the California Court of Appeals dealt with the case on both occasions on which that court acted. The Church agrees with the US Supreme Court’s decision vacating the judgment, and the California Supreme Court’s decision to review the case.
Wollersheim, an attendee at numerous CAN functions, has recently communicated directly with Church counsel. This is
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significant because the communication from Wollersheim confirms what the Church has asserted about Wollersheim the entire time — he is deranged and delusional. As can be seen from the attached correspondence (Exhibit III-10-T), Wollersheim’s current position is that the Church of Scientology is some sort of massive United States government intelligence experiment run amok. Wollersheim’s theory even has the Internal Revenue Service, along with the FBI, Justice Department and the Judiciary, having their actions with respect to Scientology dictated by the CIA:
“If you were sitting as director in one of the super-secret intelligence agencies or think tanks would you hesitate for a moment to run interference on the outer agencies, the FBI, the Justice Dept., the IRS or the Judiciary if this would insure that national security interests in this valuable thought reform field experiment would not be terminated. Wouldn’t you also periodically let the lower agencies publicly rough up Scientology to help maintain the great religion cover and release some of the pent up victim and social back-pressure.”
Wollersheim’s letter is plainly the ramblings of a decayed mind, but it illustrates the sort of persons against whom the Church has been forced to defend itself and further illustrates that any reliance by the Service on the claims of anti-Church plaintiffs like Wollersheim and other CAN members is seriously misguided.
As you no doubt expected, we don’t agree with the negative decisions concerning some Scientology corporations in the 1980s. More importantly, through the passage of time we are being vindicated.
The Service has criticized the Church for being over-litigious in fighting dissidents. In virtually every instance, however, it has been the Church that in the first instance was required to defend itself in litigation commenced by these dissidents; litigation packaged, marketed and sold by cynical merchants of religious intolerance like Michael Flynn, CAN and a significant element of the IRS.
As detailed in this and our previous submission, we have to litigate seriously because we have been subjected to great persecution. Perhaps those in the Service who complain about our “litigious nature” do so because we didn’t just fold under the onslaught of IRS sponsored attacks and this upset the best laid plans of the IRS Scientology-haters. The Service exhibits remarkable temerity to ask us to “explain” such cases when it was so integral in creating them.
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The Service also has directed the support these dissidents receive. An LA district counsel attorney encouraged Vicki Aznaran to “take a stand” against Scientology, and her lawyer discussed her civil case strategy at length with LA District Counsel and EO agents. Once Aznaran was on board her ten year old personal income tax dispute with the IRS magically disappeared. Laurel Sullivan was represented by the U.S. Attorney’s office (on the justification she was an IRS informant) in a civil case brought by the Church against her for violating the attorney-client privilege. Mayo’s perverted version of Scientology principles received tax exemption as soon as he became an IRS informant. Even Flynn’s “Scientology Victims Defense Fund” which raised “donations” to fund his contingent fee litigation against the Church received tax exemption.
Cult Awareness Network received exemption as soon as they stated in writing that they would actively refer innocent inquiries about Scientology to lawyers. No cases remain in existence that were not started or maintained by Cult Awareness Network, which continues to operate under the IRS’ imprimatur. If the IRS were to withdraw its support, CAN and its instigated cases would disappear.
Our consistent view has been that the civil litigants are solely motivated by greed. The exception is Armstrong who we truly believe to be psychotic. During the 1980’s, the IRS used every single civil litigant against Scientology as an IRS witness. The government, however, has no business in taking sides in a religious or civil dispute. It is indeed ironic to note that once the Flynn civil litigation in the 80’s was settled, with the exception of Armstrong, we hear no more of their “horror stories” from these paragons of virtue claiming to be interested only in “principle” and “what is right.”
But there is a more important point to be made. You are still holding us to a higher standard in these proceedings, which is not a fair and impartial administration of tax law. These decisions –Armstrong, Christofferson and Wollersheim– concerned CSC. Even putting aside whether we were right or not in the court room, how could these decisions have anything at all to do with these current proceedings? CST, RTC and CSI did not even exist when these individuals left the Church and the decisions in the aforementioned cases are not against these corporations.
We have more than answered your questions on the subject of litigation and we want you to understand how unfair we think this is. After all, as we have shown, significant elements within the IRS have actively participated in the litigation with a vested interest in the outcome. So you are asking us to defend ourselves against unfair attacks that your own agency has had a hidden and illegal part in creating. To understand why we have had to engage in so much FOIA litigation, you need only look at the bizarre
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occurrences in our general litigation. So why continue this war of attrition? Who keeps pushing to ask us questions about our civil litigation? It isn’t relevant to these proceedings and this should be the end of it.
Everybody today knows Pontius Pilate was a toady who rendered a dishonest decision to curry favor from the Roman establishment. Judge Breckenridge is of the same ilk. The true story of his decision is in LA CID files – provided they haven’t been destroyed to avoid our FOIA litigation.
It is time to end this shameful IRS involvement in trying to destroy Scientology. Why must the Service follow in the footsteps of the Nazis, who spread black propaganda about the Jews so that the German people would be inured to the massacre of millions. This is the same tactic used by significant and powerful elements within the Service in their dissemination of false information and active participation in attempting to destroy us.
We have no doubt that the IRS officials involved in unreasoned hatred and war against us are morally certain of their correctness that this isn’t the same as the early Roman attacks on Christianity, that it isn’t the same as the Nazis’ genocide against the Jews. No doubt, the Romans and Nazis also showed the same moral certainty. Many such dogmas have borne the imprimatur of government–the indestructibility of the Roman Empire, the supremacy of the Aryan race, the inevitable triumph of communism over capitalism, the legal segregation of the races. History, however, always has proven otherwise: Rome fell, the Nazis were defeated, communism collapsed and apartheid was unmasked for the evil it is. History is on our side today.
* * * *
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iii. The Service understands that criminal legal proceedings are pending in Canada. Please provide a full description, including the current status of the proceedings.
In the preceding subparts to Question 10 and the response to Question 10.d of your second series of questions, the Church has described in detail litigation involving Scientology-related organizations or individuals in the United States. This final subpart broadens the scope of the Service’s public policy inquiry to include Canada. While the relevance of this inquiry is perhaps more attenuated than those concerning U.S. litigation, at the same time it provides a fitting conclusion because the Canadian case mirrors much of what occurred in the U.S., including a leading role played by the IRS. We are providing a full description of the Canadian proceedings below, and have also attached as Exhibit III-10-U, a memorandum prepared by counsel for the Church of Scientology of Toronto, setting forth his perspective on this case in response to this question.
Canadian Criminal Proceedings:
The acts that were at issue in Toronto occurred nearly 20 years ago, from 1974 to 1976. Canadian law, however, has no statute of limitations to bar anachronistic prosecutions such as occurred in this case. All the acts at issue were committed by Guardian’s Office members during the same time period as similar acts in the U.S. These included a conspiracy of infiltration and theft of documents in Canada similar to that which lead to the trial and convictions of GO members in the U.S. Yet, it was not until March of 1983, when the GO criminals in the U.S. had long since been convicted and sentenced, that the Ontario Provincial Police (“OPP”) conducted the largest raid in the history of Canada against the Church of Scientology of Toronto.
The Guardian’s Office Clean-up:
In our prior response, the Church’s response to Question 3-d provided a detailed description of the actions taken by the Church to investigate and disband the Guardian’s Office (“GO”). This included sending missions from CMO INT to Guardian Offices around the United States and in other countries to investigate involvement by GO staff in illegal activities and, based on the findings, to purge offending staff from Church employ. The Guardian’s Office Canada, located in Toronto, was one of those offices investigated. A CMO mission found that some of the GO staff had been involved in
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illegal activities. Actions were therefore instituted to weed out and discharge those involved. Church executives insisted that all wrongdoers make up for damage done to society by full and appropriate amends. During the thorough clean-up process, those who earnestly complied through thousands of hours of community-based charitable works, although barred from Church staff, were allowed to otherwise retain their membership in the Church. Those who refused to take responsibility for their actions were expelled.
A clique of the most high level GO members in Canada, lead by Brian Levman and Marion Evoy, who ran the Guardian’s Office in Canada and, in fact, were the ones originating criminal activities and ordering them carried out, refused to take any responsibility for their acts and were expelled from the Church. Their refusal to cooperate with investigations into the extent of the criminality made it impossible for the CMO missions to find out just how pervasive the crimes committed by GO Canada were.
By January of 1983 it was well known to the OPP that the Church had dismissed from staff all people even tangentially involved in criminal activities committed in the mid 70’s, and no one then currently on staff had the slightest inclination to commit crimes, and could not be induced to despite the best efforts of OPP informants. In February 1983, after 2 years of reorganization, a CMO mission fired to GO WW to begin the disbandment of the entire GO network. By late February 1983, GO WW no longer existed, and in the last week of February 1983, GO Canada was disbanded. This drove Ciampini and the OPP into a frenzy of activity.
Just two weeks later, as if fearing that the clean-up and elimination of the GO would completely undermine any case against the Church, the OPP conducted the largest raid in Canadian history, smashing Church property with sledgehammers and axes, and seizing two million documents, including confidential priest-penitent confessional materials from 641 parishioners. All together a total of 950 banker’s boxes full of materials were carted off from the Church.
Why did the OPP do this, almost a decade after the alleged acts occurred, six years after the FBI had raided U.S. churches and punished the masterminds of this activity in the US? It was at least in part pursuant to the goal of destroying the Scientology religion. It was also in large measure aimed at aiding U.S. attackers, including Scientology-haters in the IRS.
The IRS, Michael Flynn and his clients Gerry Armstrong and Laurel Sullivan, were key sources who had supplied the OPP with information for the warrant used in the raid. Indeed, a large portion of the Toronto warrant dealt with allegations of fraud (saying Church services did not result in spiritual betterment) and tax fraud against the Church based on information provided
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by these IRS witnesses. The warrant predicted broad charges being laid, not only against the Toronto Church, but against the religion’s Founder, L. Ron Hubbard, and senior Scientologists such as David Miscavige and Lyman Spurlock.
The two other main informants for the warrant were former Church members John and Nan Mclean. Documents received under the Freedom of Information Act evidence that during the 1970s and early 1980s while the Mcleans were assisting the OPP infiltrate the Church, they were at the same time acting as agents for the IRS. The Mcleans were also plaintiffs in one of the many Flynn FAMCO lawsuits. Other FOIA documents revealed that the OPP had arranged for government legal assistance in the form of money for the Mcleans’ attorneys in order to prosecute their civil claims.
Immediately following the raid, Ontario attorney general Roy McMurtry told the news media that a US government agency was coordinated with and served to help spearhead the investigation leading to the raid. Subsequent discovery showed the US agency working hand in glove with the OPP was the IRS. After the raid, IRS agents in LA CID became regular communicants with Detective Ciampini to get information seized in the raid and share with him information from their investigation. In August 1984, CID agents Al Lipkin and Stephen Petersell went to Toronto and met with Ciampini and the forensic accountants who had examined seized Church financial records.
Because of an agreement made with Church counsel, none of the seized documents could be given to foreign agencies. Nevertheless, the Crown allowed IRS agents Lipkin and Petersell to be briefed for several days on the information from the documents, including extracts from the documents themselves. CID agent Lipkin advised Ciampini that if the OPP indicted L. Ron Hubbard and others, the IRS would assist in locating them. Clearly the IRS was encouraging the OPP to go forward with charges despite the stale nature of the evidence, hoping to bolster their own chances to bring charges of some kind in the U.S.
In March 1984, Church representatives went to Toronto to offer the Church’s cooperation to the Crown law offices in prosecuting the GO criminals responsible for the criminal acts in Canada. The Crown categorically rejected the Church’s good faith offer saying they held all the cards. Instead, the Crown Law Office twisted the Church’s offer of good faith cooperation as a threat by the Church against the GO criminals and used this to convince the criminals to accept immunity from prosecution and attack their former religion and the very subordinates they had ordered to commit the crimes in question.
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Initially, the Toronto GO criminals were so uncooperative that the Crown could not even communicate with them directly. The Crown Law Office approached apostate IRS informant, David Mayo, for help in gaining support from the criminals. The OPP also utilized Mayo as a middleman to approach the expelled former Church members, as they knew Mayo was a GO supporter and part of the same splinter movement. The government chose sides in a religious dispute and went with those demonstrably guilty of criminal acts because they were willing to denounce the religion of Scientology.
In December 1984, 18 months after the raid, the OPP brought charges against the Church of Scientology of Toronto and 19 named individuals alleging theft of confidential information and property, breach of trust, and possession of stolen information and property. None of the other charges against the Church as set forth in the search warrant that authorized the raid – tax fraud, consumer fraud and conspiracy to commit indictable offenses – were raised in the indictment. After an extensive review by forensic accountants and Revenue Canada agents of all Church finance records and correspondence which had been seized in the raid, no evidence of any financial crime was ever found and no charges proceeded from these allegations. The only charges brought concerned the breaking and entering, and the infiltration activities by the GO.
The Crown gave immunity to the real culprits who actually ordered the activities of the charged individuals. Those given immunity were the GO staff who had been at the top-levels of the Guardian’s Office in Canada and who had planned out and ordered the criminal activities. Those who were prosecuted were the lower-level staff who were following these orders. In an unprecedented move, no member of the Board of Directors of the Church of Scientology of Toronto was charged, but rather the entire corporation itself was – a clear move by the Crown to attempt to stigmatize the entire religion for the acts of a few long-since-expelled criminals.
During the preliminary hearings from 1988 to 1990, the Crown produced no evidence that the Church as a corporate entity had advocated the illegal actions of those charged. Evidence that was produced showed that the Church forbade actions which violated the law, was not aware of these individuals’ activities and that when they were discovered, the Church removed these people from staff and disbanded the Guardian’s Office. Several charges were dropped as a result of the preliminary hearing.
The individuals who were indicted offered to plead guilty if the Crown would drop the charges against the Church, because neither the Church nor its directors nor Church members had any idea that the criminal acts in question were being committed.
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The Crown refused to change its position, insisting that the Church plead guilty as well.
In the litigation of this case, which spanned most of a decade, during which time government officials expended $15 million in attempts to “get” the Church of Scientology. As described below, of 19 original charges, only 12 proceeded to trial and of those the Church was acquitted on 10. The remaining two are on appeal. The case was ill-intentioned from the outset and fell apart in court.
In November 1991, the Ontario Court of Justice ruled that the search of the Toronto Church premises was unlawful and violated the Church’s rights under the Canadian Charter of Rights and Freedoms, which affords protection from unreasonable search and seizure. The Church had shown in the months-long evidentiary hearing that the OPP timed the raid to coincide with press deadlines of the international media; that many of the searching officers acted with no specific instructions or were left unsupervised, seizing everything in sight.
The judge ruled that the OPP failed to respect the terms of the search warrant that safeguarded against a general rummaging of the premises. Although the Crown argued that the police had acted in “good faith,” the judge found that the police either were unaware of this limitation or chose to ignore it, and he could not find they had acted in good faith. The judge found that the instigator of the raid, Detective Al Ciampini, was not a credible witness.
The judge cited as a significant example of the massive over-seizure, the large amount of religious confessional material respecting Church members taken by the police, noting that confessional material from 641 parishioners was unlawfully seized in violation of their privacy rights.
The judge also found it ironic that for two years prior to the raid, the two OPP officers, placed inside the Church as plants, had stolen hundreds of documents without authorization and without a warrant. These stolen documents then were used in the Information section of the warrant as the justification for the raid. The fact that the information came from documents the OPP had unlawfully stolen from the Church was withheld from the Justice of the Peace who issued the Warrant. The judge also observed the ironic fact that the OPP’s undercover police officers had done the very thing that was now the subject of charges against the Church and some of its members. The judge’s ruling resulted in acquittals on 7 of the remaining 12 charges, and the elimination of all theft charges. The remaining five charges for Breach of Trust were left for trial. The crime was that certain GO members had worked for Ontario government agencies, had signed confidentiality agreements and then
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breached those agreements by passing on information concerning the agencies’ activities outside the agencies.
The trial judge allowed the Crown to keep the Church in the case as a party on a tenuous legal theory. The law that was used to support the Crown’s position is called the “Dredge & Dock” case, in which a court had ruled that a corporation can be held criminally liable for the actions of its employees. This case was relied on even though it clearly pertained to a profit-making, commercial enterprise, had never been applied to, nor is applicable to, a church and had never been applied to an organization that had thoroughly and demonstrably taken responsibility to rectify the actions of the miscreants.
The trial proceeded in April and May 1992. The Crown put on several ex-GO criminals, all of whom had been expelled by the Church in the early 80s. They testified under immunity even though they were the masterminds of the Canadian criminal activity. These criminals testified against their erstwhile juniors, whom the criminals had ordered to commit criminal acts. The criminals also were allowed to manufacture justifications for their own unconscionable conduct, laying the blame on the Church’s doorstep with tortured and false stories about their states of mind.
The Toronto Church had no local witnesses testify as there was no one locally in good standing who knew the first thing about the criminal activity from the 1970s. Senior Scientologists from California did travel to Toronto to testify. David Miscavige, who Ciampini had earlier threatened to indict solely for the purpose of getting ex-GO criminals to testify, voluntarily testified. He told the entire story of the GO take over, what lead to it, how it was carried out, and how the Church was so offended by the GO’s crimes that it was the only entity or individual that volunteered its services to the Crown to prosecute the wrongdoers. None of the Church witnesses attempted to justify a single act of the GO. Instead they outlined how the GO had covered up their criminal activity from Church management, and when management found out about the acts, it acted, swiftly and responsibly.
Once the evidence was all in, the trial judge, misusing the “Dredge and Dock” case essentially directed a verdict for the Crown. The Judge stated that whether the GO was separate and autonomous or not, and whether or not they withheld from the Church what they were doing, and whether or not the Church cleaned house long before the OPP and Crown were even interested in any criminal charges, did not matter. He told the jury that despite the unrefuted nature of the evidence of the Church witnesses mentioned above, they must return a verdict against the Church on certain counts. Notwithstanding the de facto directed verdict, the jury found the Toronto Church innocent on 3 of the 5 counts tried. It
CSI Prod 11-4-93
was convicted on two counts of breach of trust. 3 ex-GO individuals were convicted on between one and two counts of breach of trust each.
No jail terms were given to any of the individual defendants. One was fined $5,000 and two others were each fined $2,500. No probation or community service work was ordered, in acknowledgment of the fact that they had already done thousands of hours of community service at the direction of the Church. The Church was given a fine of $250,000, one quarter the sum the Crown pleaded was an appropriate minimum.
The judge acknowledged that the alleged criminal acts had taken place more than 15 years ago and that all those responsible were removed by Church officials from positions of authority. He also recognized that not a single member of the present Board of Directors was a director at the time of the offenses, and that most present parishioners were likely not even members of the Church then. He specifically found that in light of those facts, deterrence was not required of the Church.
Following the decision, Church counsel immediately served the government attorney with a Notice of Appeal on the two counts upon which the Church was found guilty. The Church and Church counsel fully expect these convictions to be overturned. Not only was a novel extension of the law used to find corporate responsibility, but the trial was fraught with numerous other errors. The fact that the directing minds of the GO criminality, who testified for the Crown under grants of immunity, were allowed to go on week after week denigrating the beliefs and practices of the religion in their attempt to lay the blame for their own acts on the Church’s shoulders, made for an inquisition-like, heresy trial.
On September 15, 1992, the Church filed notice of a $19 million Constitutional Damages suit against the Ontario Provincial Police and the Crown law office for the unconstitutional search and seizure in the 1983 raid. At the center of that suit are the discriminatory and violent acts manifested by the OPP’s raid; a raid that has already been ruled to have been illegal and conducted in bad faith.
The Toronto case began with dozens of charges being proposed in the early 1980’s. Internal OPP memoranda obtained through discovery have shown that the aim of the case was to complement the plans of IRS CID and US private litigant to physically overthrow leadership of the mother Church and to wipe out the religion of Scientology. It began with infiltration and attempted entrapment, followed then by an unconscionable physical assault on the Toronto Church, later ruled illegal and unconstitutional. The case was pressed by the OPP and Crown, despite the Church providing evidence it expelled the culprits and was willing to cooperate in their prosecution. The individuals who were convicted, GO underlings of
CSI Prod 11-4-93
the Crown’s immunized witnesses, had already made up for their wrong-doing years prior to trial at the Church’s insistence. The Crown’s animus against the Church was so strong that notwithstanding the failure of the IRS CID’s takeover plan, and the failure of the US litigants against the Church, they pressed forward by dismissing dozens of capital crime cases in order to make room for their several week heresy trial against Scientology.
The fact that the OPP and Crown walked away with 2 counts of breach of trust, a fine less than 1/4 of what they argued was the minimum possible, and no jail time for any of the individual defendants amounts to one of the biggest embarrassments in the entire history of Canadian jurisprudence. Nevertheless, the Church will continue to fight until justice is completely served. And that means reversal of the two breach of trust convictions, and full recompense awarded for the OPP’s vicious and illegal raid on the Toronto Church.
* * * *
CSI Prod 11-4-93
- This document in PDF format. Source image files: https://web.archive.org/web/20090927222617/http://www.xenu-directory.net/documents/corporate/irs/1993-1023-csi-questions-3-10.pdf ↩
- Transcript excerpts from the illegal videos submitted as Exhibit III-10-Q on archive.org. Cf. court transcripts and illegal videos. ↩
- Exhibit III-10-Q: Transcript excerpts of illegal videos on archive.org. Cf. court transcripts and illegal videos. ↩
UNITED STATES COURT OF APPEALS
For The Ninth Circuit
VICKI J. AZNARAN and RICHARD N. AZNARAN,
Plaintiffs, Counterdefendants, and Appellees,
CHURCH OF SCIENTOLOGY OF CALIFORNIA,
CHURCH OF SPIRITUAL TECHNOLOGY, RELIGIOUS
TECHNOLOGY CENTER, AUTHOR SERVICES, INC.,
and CHURCH OF SCIENTOLOGY INTERNATIONAL,
Defendants, Counterclaimants, and Appellants.1
On Appeal from the United States District Court for the Central District of California
BRIEF FOR APPELLEES
HUB LAW OFFICES
Ford Greene, Esquire
711 Sir Francis Drake Boulevard
San Anselmo, California 94960-1949
Telephone: (415) 258-0360
Attorney for Appellees VICKI J. AZNARAN and
RICHARD N. AZNARAN
UNITED STATES COURT OF APPEALS
For The Ninth Circuit
VICKI J. AZNARAN and RICHARD N. AZNARAN,
Plaintiffs, Counterdefendants, and Appellees,
CHURCH OF SCIENTOLOGY OF CALIFORNIA,
CHURCH OF SPIRITUAL TECHNOLOGY, RELIGIOUS
TECHNOLOGY CENTER, AUTHOR SERVICES, INC.,
and CHURCH OF SCIENTOLOGY INTERNATIONAL,
Defendants, Counterclaimants, and Appellants.
On Appeal from the United States District Court for the Central District of California
BRIEF FOR APPELLEES
CERTIFICATE REQUIRED THE NINTH CIRCUIT _________COURT OF APPEALS RULE 28-2.1_________
The undersigned counsel of record for Vicki J. Aznaran and Richard N. Aznaran certifies that other than parties to this appeal, the following parties have an interest in the outcome of this case.
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Bent Corydon Gerry Armstrong Martin Samuels Marjorie Wakefield Nancy Dincalci Gabriel Cazares Kima Douglas Tonja Burden Robert Dardano William Franks Laurel Sullivan Homer Schomer Edward Walters Julie Christofferson-Titchbourne
With the exception of Bent Cordon, the aforementioned parties, all former Scientologists, have executed settlement agreements with Scientology which include releases containing obstruction of justice provisions of the same type and nature Scientology will enforce against appellees Vicki J. Aznaran and Richard N. Aznaran if it prevails in the herein appeal. Moreover, pursuant to such agreements, in each court case connected with each said party, with the exception of Bent Corydon, the court file has been sealed.
Attorney of Record for Vicki J. Aznaran and Richard N. Aznaran
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TABLE OF CONTENTS
Page TABLE OF CASES…………………… vii STATEMENT OF THE ISSUES PRESENTED FOR REVIEW ……. 1 I. STATEMENT OF JURISDICTION …………… 3 A. Jurisdiction of the District Court …….. 3 B. The Court of Appeals Does Not Have
Jurisdiction Over This Appeal ………..
3 1. The Motion For Summary Judgment ……. 4 2. The Motion For Reconsideration ….. 5 3. The Motion For A Preliminary Injunction … 5 4. The Notice Of Appeal…………. 6 5. Orders Determining Rule 56 Motions For Summary Judgment Are Not Final …… 6 6. Interlocutory Appeals Must Be Strictly Construed; Thus, This Court May Penetrate The Label Of An Interlocutory Order To Determine If It Is The Proper Subject For Appellate Review …………… 8 7. The Instant Appeal Addresses The District Court’s Exercise of Control Over The Parties’ Litigation ……… 9 II. STATEMENT OF THE CASE…………….. 13 A. Nature Of The Case…………… 13 B. Factual Background …………… 14 C. The Substance Of The Releases………. 23 23
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Page III. THE RELEASES ARE VOID AND UNENFORCEABLE BECAUSE THEY VIOLATE THE PUBLIC POLICY PROHIBITING AGREEMENTS THE OBJECTIVES OF AND CONSIDERATION FOR WHICH ARE THE SUPPRESSION OF EVIDENCE OF BOTH CRIMINAL ACTIVITY AND DISCREDITABLE FACTS …………… 25 A. Illegal Contracts Are Void, Not Enforceable And May Be Challenged For The First Time On Appeal………. 25 1. Introduction…………….. 26 2. Standard Of Review…………. 26 3. Preliminary Legal Principles …….. 27 B. If The Consideration In Support Of A Contract Is The Nondisclosure Of Discreditable Facts, It Is Illegal And The Contract Is Void………… 29 C. If The Object Of A Contract Is Illegal, The Contract Is Void………… 32 D. The Releases Are Void Because Both Their Object And Consideration Are Not Legal……………… 34 1. Scientology’s Contentions ……… 34 2. The Substance Of Vicki Aznaran’s Declarations ……………. 35 a. Declaration Executed October 27, 1988……….. 35 b. Declaration Executed November 30, 1988……….. 37 c. Declaration Executed February 8, 1989……….. 38 d. Declaration Executed September 26, 1989………. 40
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Page 3. The Substance Of Richard Aznaran’s Declaration Executed October 31, 1989 41 4. The Aznarans’ Interviews With Agents Of The Internal Revenue Service And The Federal Bureau Of Investigation … 45 5. Conclusion…………….. 45 IV. SCIENTOLOGY’S MOTION FOR A PRELIMINARY INJUNCTION IS EQUIVALENT TO A MOTION FOR SPECIFIC PERFORMANCE; THUS IT WAS PROPERLY DENIED…………. 45 V. STANDARD OF REVIEW OF DENIAL OF PRELIMINARY INJUNCTION . …….. 46 A. Appellate Review Of A Preliminary Injunction Must Be Narrowly Circumscribed …. 46 B. To Establish An Abuse Of Discretion Requires A Stringent Showing Of A Definite And Firm Conviction That The District Court Committed A Clear Error Of Judgment…………. 48 C. Review Of A Preliminary Injunction Does Not Serve The Purpose Of A Preliminary Adjudication Of The Merits Of A Case………….. 50 D. The Reviewing Court May Reverse The Denial Of A Preliminary Injunction Only For An Abuse Of Discretion In Any Of Three Ways………….. 51 E. The District Court Standard For The Determination Of A Preliminary Injunction ………… 52
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Page VI. THE DISTRICT COURT PROPERLY DENIED
THE PRELIMINARY INJUNCTION …………..
54 A. Scientology’s 17 Month Delay In Seeking Injunctive Relief Precludes A Finding That Any Harm It Claims Is Irreparable………. 54 1. Scientology’s Contentions Of Irreparable Injury Submitted In Support Of Its Motion For
A Preliminary Injunction ……….
56 2. Scientology Submitted Similar Or The Same Contentions In The Proceedings Below
17 Months Before Moving For A Preliminary Injunction ……..
57 3. The Duration Of Scientology’s Delay Belies Any Claim Of Irreparable Harm …. 60 B. Scientology’s Claim Of Religious Status Does Not Preclude The Imposition Of Legal Accountability ………….. 61 C. Scientology’s Constitutional Challenge To The Aznaran Suit……………. 65 D. Scientology Is Not A Prima Facie Religion Entitled To Automatic Protection Under The First Amendment…………. 69 E. Scientology Is Not Likely To Succeed On The Merits……………… 71 F. The Balance Of Hardships Favors The Aznarans . . 77 G. An Injunction Would Harm The Public Interest … 78 VII. THE APPEAL IS FRIVOLOUS AND JUSTIFIES THE IMPOSITION OF SANCTIONS………….. 80 CONCLUSION 80
TABLE OF AUTHORITIES
Cases Page Abernathy v. Southern California Edison (9th Cir.1989) 885 F.2d 525………………. 9 Allard v. Church of Scientology (1976) 58 Cal.App.3d 439, 129 Cal.Rptr. 797……. 16, 44 Allen v. Jordanos’ Inc. (1975) 52 Cal.App.3d 160, 125 Cal.Rptr. 31……. 30, 31 Apple Computer, Inc. v. Formula Intern, Inc. (9th Cir.1984) 725 F.2d 521…………….. 50 Associated Press v. United States 326 US 1……… 79 Barry v. Time, Inc. (N.D.Cal. 1984) 584 F.Supp. 1110 ………….. 57 Beasley v. Union Pacific Railroad Co. (8th Cir.1981) 652 F.2d 749……………… 7 Brown v. Chote (1973) 411 U.S. 452, 36 L.Ed.2d 420…………. 47 Brown v. Freese (1938) 28 Cal.App.2d 608……………. 30, 31 Buckley v. Valeo (1976) 424 U.S. 1, 46 L.Ed.2d 659………… 57, 67 Buckley v. Valeo (1976) 424 U.S. 1………………… *, * C.I.T. Corporation v. Panac (1944) 25 Cal.2d 547, 154 P.2d 710…………. 73 Cantwell v. Connecticut (1940) 310 U.S. 296, 84 L.Ed. 1213……… 57, 62, 68 Carson v. American Brands, Inc. (1981) 450 U.S. 79………………… 51 Casey v. Proctor (1963) 59 Cal.2d 97………… 75
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Cases Page Chalk v. United States District Court (9th Cir.1988) 840 F.2d 701…………….. 52 Chism v. National Heritage Life Insurance Co. (9th Cir.1982) 637 F.2d 1328……………. 49 Church of Scientology of California v. Commissioner of Internal Revenue (1984) 83 T.C. 381, aff’d 823 F.2d 1310 (9th Cir.1987) …………. 43 Citibank, N.A. v. Citytrust (2d Cir.1985) 756 F.2d 273…………….. 54 Citizens to Preserve Overton Park, Inc. v. Volpe (1971) 401 U.S. 402………………… 48 Cohen v. Beneficial Indus. Loan Corp. (1949) 337 U.S. 541…………………. 3 Corydon v. Church of Scientology International, Inc. et al, Los Angeles Superior Court No. C 694 401……….. 34, 35, 37, 38, 40, 41 Deader’s Digest Ass’n v. Superior Court (1984) 37 Cal.3d 252……………….. 57 Domarad v. Fisher & Burke, Inc. (1969) 270 Cal.App.2d 543, 76 Cal.Rptr. 529……… 74 Doran v. Salem Inn, Inc. (1975) 422 U.S. 922, 45 L.Ed.2d 648…………. 47 Dymo Industries, Inc. Tapewriter, Inc. (9th Cir.1964) 326 F.2d 141…………….. 49 Eggleston v. Pantages (1918) 103 Wash. 458, 175 P. 34…………… 29 Elrod v. Burns (1976) 427 US 347………….. 78 Everson v. Board of Education (1947) 330 U.S. 1……………….. 57, 58 F.W. Kerr Chemical Co. v. Crandall Associate, Inc. (6th Cir.1987) 815 F.2d 426 ……………. 3, 12 Fabrege, Inc. v. Saxony Products, Inc. (9th Cir. 1979) 605 F.2d 426……………. 49
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Cases Page First National Bank v. Thompson (1931) 212 Cal. 388………………… 27 Fong v. Miller (1951) 105 Cal.App.2d 411, 233 P.2d 606……….. 29 Founding Church of Scientology v. United States (D.C.Cir.1969) 409 F.2d 212…………….. 70 Founding Church of Scientology v. Webster (D.C.Cir.1986) 802 F.2d 1448……………. 71 Fowler v. Rhode Island (1953) 345 U.S. 67, 97 L.Ed. 828………….. 62 Franchise Realty Interstate Corp v. San Francisco Local Joint Executive Board (9th Cir. 1976) 542 F.2d 1076………….. 57, 59 Gardner v. Westinghouse Broadcasting Co. (1978) 437 U.S. 478, 57 L.Ed.2d 364………….. 8 Gillette Company v. Ed Pinaud, Inc. (S.D.N.Y. 1959) 178 F.Supp. 618 …………… 54 Gospel Army v. Los Angeles (1945) 27 Cal.2d 232, 163 P.2d 704…………. 69 Gulfstream Aerospace Corp. v. Mayacamas Corp. (1988) 485 U.S. 271, 99 L.Ed.2d 296………… 8, 13 Herbert v. Lando (S.D.N.Y. 1985) 603 F.Supp. 983 …………… 57 Hook v. Hook & Ackerman (3rd Cir.1954) 213 F.2d 122……………… 9 Hydro-Tech Corp. v. Sunstrand Corp. (10th Cir.1982) 673 F.2d 1171……………. 57 In re Talmadge (N.D. Ohio 1988) 94 B.R. 451……………. 54 International Moulders v. Nelson (9th Cir.1986) 799 F.2d 547…………….. 49 International Society for Krishna Consciousness, Inc. v. Barber (2nd Cir. 1981) 650 F.2d 430………….. 69, 70
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Cases Page J.B. Williams Company, Inc. v. Le Conte Cosmetics, Inc. (9th Cir.1975) 523 F.2d 187…………….. 49 Jones v. Pacific Intermountain Express (9th Cir.1976) 536 F.2d 817…………….. 50 Jordan v. Guerra (1944) 23 Cal.2d 469, 144 P.2d 349 ….. 75 Kass v. Arden-Mayfair, Inc. (C.D.Calif.1977) 431 F.Supp. 1037 ………….. 51 Kleindienst v. Mandel (1972) 408 US 753…………………. 79 Kraus v. County of Pierce (9th Cir.1986) 793 F.2d 1105…………….. 7 LaFortune v. Ebie (1972) 26 Cal.App.3d 72, 102 CAl.Rptr. 588……… 27 Le Sportsac, Inc. Dockside Research, Inc. (1979 S.D.N.Y.) 478 F.Supp. 602…………… 55 Lemon v. Kurtzman (1971) 403 U.S. 602………………. 57, 58 Lewis & Queen v. M.M. Ball Sons (1957) 48 Cal.2d 141, 308 P.2d 713…………. 28 Lopez v. Heckler (9th Cir.1984) 725 F.2d 1489, vacated on other grounds 463 U.S. 1328, 83 L.Ed.2d 694 (1984)……………….. 53 Lydo Enterprises, Inc. v. City or Las Vegas (9th Cir.1984) 745 F.2d 1211……………. 56 Majorica, S.A. v. R.H. Macy & Co., Inc. (2d Cir. 1985) 762 F.2d 7……………. 54, 55 Maness v. Meyes (1975) 419 U.S. 449………………… 57 Manhattan Citizens’ Group, Inc. v. Bass (S.D.N.Y. 1981) 524 F.Supp. 1270 ………….. 55 Marine Electric Railway v. New York City Transit Authority (E.D.N.Y. 1982) 17 B.R. 845…………….. 55
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Cases Page Marine Transport Lines v. Lehman (D.C.D.C. 1985) 623 F.Supp. 330…………. 46, 47 Martin v. City of Struthers (1943) 319 US 141…….. 79 Martin v. International Olympic Committee (9th Cir.1984) 740 F.2d 670…………… 53, 76 Mary R. v. B. & R. Corp. (1983) 149 Cal.App.3d 308, 196 Cal.Rptr. 871…… 32, 33 Maryland C. Co. v. Fidelity & Cas. Co. of N.Y.
71 Cal.App. 492…………………..
29 Matter of Bowoon Sangsa Co. LTD. v. Micronesian Industrial Corp. (9th Cir. 1983) 720 F.2d 595…………….. 9 McDaniel v. Paty (1978) 435 U.S. 618, 55 L.Ed.2d 593…………. 69 Miller & Sons Paving, Inc. v. Wrightstown Civic Assoc. (E.D.Pa. 1978) 443 F.Supp. 1268…………… 57 Miss Universe, Inc. v. Fisher (9th Cir.1979) 605 F.2d 1130……………. 50 Molko v. Holy Spirit Association (1988) 46 Cal.3d 1092……………. 14, 61, 80 Morey v. Paladini (1922) 187 Cal. 727………… 30 Morgenstern Chemical Co. v. Schering Corp. (3rd Cir.1950) 181 F.2d 160……………… 7 Murdock v. Pennsylvania (1943) 319 U.S. 105, 87 L.Ed. 1292…………. 62 N.A.A.C.P. v. Button (1963) 371 U.S. 415………………. 57, 58 National Customs Brokers and Forwarders v. U.S. (CTT 1989) 723 F.Supp. 1511…………….. 55 Nebraska Press Association v. Stuart (1976) 427 US 539…………………. 78 New York Times Co. v. Sullivan (1964) 376 US 254……………… 57, 58, 79
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Cases Page Nixon v. Administrator of General Services (1977) 433 U.S. 425, 53 L.Ed.2d 867…………. 67 NLRB v. Catholic Bishop of Chicago (1979) 440 U.S. 490………”………. 57, 58 Oakland Tribune Publishing Co. v. Chronicle Publishing Co. (9th Cir.1985) 762 F.2d 1374…………… 53, 56 Owens v. Haslett (1950) 98 Cal.App.2d 829, 221 P.2d 252……….. 28 Owens v. Haslett (1950) 221 P.2d 253………… 46 People V. Reynolds (July 23, 1990) 90 C.D.O.S. 5596 ….. 26 People v. Woody (1964) 61 Cal.2d 716, 40 Cal.Rptr. 69………… 62 Perez-Funez v. District Director, I.N.S. (C.D.Calif .1984) 611 F.Supp. 990………….. 47 Programmed Tax Systems, Inc. v. Raytheon Co. (S.D.N.Y. 1976) 419 F.Supp. 1251 ………….. 55 Red Lion Broadcasting Co. v. F.C.C. (1969) 395 US 367…………………. 79 Religious Technology Center v. Scott, et al, United States District Court, Central District of California, Case Nos. CV 85-711 and 85-7197 JMI…………. 34 Republic of Philippines v. Marcos (9th Cir.1987) 818 F.2d 1473……………. 52 Roth v. United States 354 US 476………….. 79 S.E.C. v. Carter Hawley Hale Stereo, Inc. (9th Cir.1985) 760 F.2d 945…………….. 50 Safeway Stores v. Hotel Clerks Intn’l Ass. (1953) 41 Cal.2d 567, 261 P.2d 721…………. 29 Securities and Exchange Commission v. Suter (7th Cir.1987) 832 F.2d 988…………… 10, 11
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Cases Page Sherbert v. Verner (1963) 374 U.S. 398, 10 L.Ed.2d 965…………. 62 Sid Berk, Inc. v. Uniroyal, Inc. (C.D.Calif.1977) 425 F.Supp. 22 …………… 46 Sierra On-Line v. Phoenix Software, Inc. (9th Cir.1984) 739 F.2d 1415……………. 50 Sipple v. Chronical Publishing Co. (1984) 154 Cal.App.3d 1045…………… 57, 58 Sports Form, Inc. v. United Press International, Inc. (9th Cir.1982) 686 F.2d 750…………… 48, 51 Stanley v. Georgia (1969) 394 US 557………… 79 Surgidev Corp. v. Eye Technology, Inc. (8th Cir.1987) 828 F.2d 452……………… 8 Surinach v. Pesquera de Busquets (1st Cir.1979) 604 F.2d 73…………….. 57 Surinach v. Pesquera de Busquets (1st Cir.1979) 604 F.2d 73…………… 57, 58 Synanon Foundation, Inc. v. California (1979) 444 U.S. 1307, 62 L.Ed.2d 454………. 47, 48 Tagupa v. East-West Center, Inc. (9th Cir.1981) 642 F.2d 1127…………….. 9 Tappan v. Albany Brewing Co. 80 Cal. 570 …………………… 33 Theriault v. Silber (W.D. Texas 1987) 453 F.Supp. 25………….. 70 Tiedje v. Aluminium Paper Milling Co. (1956) 46 Cal.2d 450, 296 P.2d 554…………. 29 Time, Inc. v. Hill (1967) 385 U.S. 374………………… 57 Torasco v. Watkins (1961) 367 U.S. 488, 6 L.Ed.2d 982…………. 62 United States v. Ballard (1944) 322 U.S. 78, 88 L.Ed. 1148………….. 62
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Cases Page United States v. Hubbard (D.C.D.C. 1979) 474 F.Supp. 64…………… 43 United States v. Kozak (3rd Cir.1971) 438 F.2d 1062……………. 42 United States v. Kuch (D.D.C. 1968) 288 F.Supp. 439……………. 70 United States v. Lippman (6th Cir.1974) 492 F.2d 314…………….. 43 United States v. San Martin (5th Cir.1975) 515 F.2d 317…………….. 42 United States v. Seeger (1965) 380 U.S. 163, 13 L.Ed.2d 733…………. 69 United States v. Siegel (2nd Cir.1983) 717 F.2d 9……………… 42 United States v. United States Gypsum Co. 333 U.S. 364…………………… 50 Upper Mississippi Towing Corp. v. West (8th Cir.1964) 338 F.2d 823……………… 7 Van Cauwenberghe v. Baird (1988) 486 U.S. 517, 100 L.Ed.2d 517…………. 7 Van Schaick v. Church of Scientology of California (D.Mass.1982) 535 F.Supp. 1125…………… 70 Von Kessler v. Baker (1933) 131 Cal.App. 654…….. 42 Walz v. Tax Commission (1970) 397 U.S. 664………………. 57, 58 Watkins v. United States (1957) 354 U.S. 178………………. 57, 68 Western Geophysical Co. of America v. Boly Associates, Inc. (2nd Cir.1972) 463 F.2d 101……………… 9 Wetzstein v. Thomasson (1939) 34 Cal.App.2d 554, 93 P.2d 1028……….. 74 White v. Pierce County (9th Cir.1986) 797 F.2d 812……………… 7
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Cases Page Winfield v. St. Joe Paper Co. (11th Cir.1981) 663 F.2d 1031……………. 10 Wisconsin v. Yoder (1972) 406 U.S. 205, 32 L.Ed.2d 15…………. 61 Wollersheim v. Church of Scientology (1989) 212 Cal.App.3d 872; 260 Cal.Rptr. 331…………. 15, 44, 62-65, 69, 80 Wood v. Imperial Irrigation Dist. (1932) 216 Cal. 748………………… 27 Wright v. Rushen (9th Cir.1981) 642 F.2d 1129……………. 51 Yakus v. United States (1944) 321 U.S. 414………………… 47 Zepeda v. United States I.N.S. (9th Cir.1983) 753 F.2d 719…………… 49, 52 Statutes 18 U.S.C. § 201(b)(3) ………………. 44 § 201(c) (2) ………………. 44 § 1510……………….. 42,43 28 U.S.C. § 1291……………… 3, 6, 8, 11 § 1292(a)(1) …………… 9-11, 13 § 1332………………….. 3 § 1927…………………. 80 F.R.A.P. Rule 4……………….. 10, 11 Rule 38………………… 80 F.R.C.P Rule 42(b)………………… 7 Rule 56……………….. 4,7 Civil Code § 1550…………………. 32 § 1598…………………. 32 § 1607…………………. 29 § 1608…………………. 29 § 1667…………………. 32 § 1668…………………. 32 § 3423…………………. 46
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Treatises Page Pomeroy, Equity Jurisprudence (4th Ed.1918) § 397 …… 27 Witkin, Summary of California Law (9th Ed. 1987) Vol. 1, Contracts, § 441……………… 27 § 442……………… 27 § 429……………… 29 § 444……………… 27 § 445……………… 28 § 611……………… 32
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UNITED STATES COURT OF APPEALS
For The Ninth Circuit
VICKI J. AZNARAN and RICHARD N. AZNARAN,
Plaintiffs, Counterdefendants, and Appellees,
CHURCH OF SCIENTOLOGY OF CALIFORNIA,
CHURCH OF SPIRITUAL TECHNOLOGY, RELIGIOUS TECHNOLOGY CENTER, AUTHOR SERVICES, INC.,
and CHURCH OF SCIENTOLOGY INTERNATIONAL,
Defendants, Counterclaimants, and Appellants.
On Appeal from the United States District Court for the Central District of California
BRIEF FOR APPELLEES
STATEMENT OF THE ISSUES
PRESENTED FOR REVIEW
1. Can the Ninth Circuit Court of Appeals question whether an appeal ostensibly taken from a denial of a motion for a preliminary injunction is, in fact, simply a pretext to obtain interlocutory review of a denial of a motion for summary judgment,
and would an exercise of interlocutory appellate jurisdiction over such an appeal be proper?
2. Do contractual releases whose objects are the suppression of evidence of discreditable facts and the suppression of evidence of criminal conduct constitute an obstruction of justice, and, if so, are said releases illegal and void?
3. Can contractual releases whose objects are the suppression of evidence of discreditable facts and the suppression of evidence of criminal conduct be specifically enforced?
4. When an organization which ascribes religious status to itself is aware of what it alleges are threats to its First Amendment religious rights arising from and at the outset of tort litigation and waits for 17 months before seeking a preliminary injunction, can it assert such threats are irreparable injury?
5. Does the bare claim of religious status confer an immunity in tort from accountability from the consequences of conduct that is outrageous and coercive?
6. Is Scientology1 necessarily entitled on this appeal to prima facie status as a religion?
7. Would judicial enforcement of the releases by preliminary injunction constitute a prior restraint on the Aznarans’ First Amendment rights to Freedom of Speech and Associational Privacy?
8. Would judicial enforcement of the releases by preliminary
1Appellants herein are Religious Technology Center, Church of Scientology International, Church of Spiritual Technology and Author Services, Inc. They will be referred to collectively as “Scientology.”
injunction violate the Aznarans’ First Amendment right to Redress of Grievances.
9. Did the district court erroneously apply the law underlying the legal issues in denying Scientology’s motion for a preliminary injunction and therefore abuse his discretion?
10. Is the herein appeal frivolous?
STATEMENT OF JURISDICTION
A. Jurisdiction of the District Court
The District Court properly exercises jurisdiction over the persons and subject matter of this lawsuit pursuant its diversity jurisdiction conferred by 28 U.S.C. § 1332.
B. The Court of Appeals Does Not Have Jurisdiction Over This Appeal
When the issue is one of appellate jurisdiction, it is the duty of the court of appeals to determine whether jurisdiction is proper. F.W. Kerr Chemical Co. v. Crandall Associates. Inc. (6th Cir.1987) 815 F.2d 426, 429. Unless subject to a statutory or judicially created exception, 28 U.S.C. § 1291 states this Court of Appeals has no jurisdiction over an interlocutory appeal that is not a “final decision” of the District Court. “The effect of the statute is to disallow appeal from any decision which is tentative, informal or incomplete … So long as the matter remains open, unfinished or inconclusive, there may be no intrusion by appeal.” Cohen v. Beneficial Indus. Loan Corp. (1949) 337 U.S. 541, 546.
Although Scientology’s instant appeal is from the denial of a motion for a preliminary injunction, the practical effect of this
appellate review is that Scientology now relitigates, for the fourth time, the District Court’s denial of its mc ion for summary judgment on the issue of whether the purported releases and waivers are valId. Below, after losing its summary judgment motion, Scientology first sought reconsideration. After the motion for reconsideration was denied, Scientology again relitigated the issue by a motion for a preliminary injunction. Thus, through the pretext of this interlocutory appeal, now Scientology will again relitigate the issue of whether the purported releases are valId.
1. The Motion For Summary Judgment
On December 12, 1988, pursuant to the Rule 56 of the Federal Rules of Civil Procedure, Scientology filed its motion for summary judgment or, in the alternative, for a separate trial on the issue whether the alleged releases and waivers were valid. (Record No. 140.)
On May 25, 1989, the District Court denied Scientology’s motion for summary judgment on the issue of the Aznarans’ alleged release and waiver of their right to prosecute this lawsuit by its written Order filed on May 25, 1989. (Record No. 219.) In its decision the District Court specifically found there was a
“genuine issue of material fact [whether the release was an enforceable contract because] . . . plaintiffs were subjected to threats of being sentenced to defendants’ Rehabilitation Project Force, or declared ‘suppressive persons’ and subjected to the ‘fair game policy’ if they did not cooperate in signing the releases. Plaintiffs also provide testimony that they did not sign the releases with their free will and only signed them to get away in relative safety from defendants. Plaintiffs further provide testimony that they
were not given the opportunity to confer with legal counsel when they signed the releases and the releases they signed and the releases submitted to the Court are not the same because at the time they executed the releases, they were not given copies of them.” (Record No. 219 at 2:5-3:14.)
2. The Motion For Reconsideration
On June 6, 1989, Scientology filed its motion for reconsideration of the District Court’s Order denying summary judgment. (Record No. 228.) On July 24, 1989, the District Court denied Scientology’s motion for reconsideration and specifically found as follows:
“In the instant action, the defendants’ motion for reconsideration merely repeats the arguments made in its original motion for summary judgment. Therefore, defendants’ motion for reconsideration is denied. (Emphasis supplied)” (Record No. 238 at 2:10-13.)
3. The Motion For A Preliminary Injunction
On November 9, 1989, not deterred by having suffered two adverse decisions on the issue of the legal effectiveness of the purported releases and waivers, Scientology filed its motion for a preliminary injunction wherein it sought to enforce the terms of the purported release and waiver against the Aznarans. Scientology’s motion also sought a separate evidentiary hearing on the issues raised by the release and waiver. (Record No. 261.)
On January 9, 1990, the District Court denied Scientology’s motion for a preliminary injunction and for a separate evidentiary hearing. In its Order denying injunctive relief the District Court specifically found as follows:
“In the instant action, defendants’ motion merely attempt[s] to relitigate the issue of the validity of the release. The Court has already determined in ruling upon defendants’ previous motion for summary judgment and motion for reconsideration that the validity of the release is a jury question because there is a genuine issue of material fact as to whether plaintiffs consented to the release. The Court has also ruled that it would be an unnecessary expenditure of time to have a separate trial on the validity of the release.” (Emphasis added.) (Record No. 2 64 at 2:19-3:2.)
4. The Notice Of Appeal
On February 5, 1990, Scientology filed its notice of appeal (Record No. 267) of the District Court’s Order denying its motion (1) for a preliminary injunction to enforce the releases and (2) for a separate hearing on the validity thereof. Thus, Scientology asks this Court to relitigate the issue a fourth time. This appeal is a transparent ploy to both avoid the consequences of the final judgment rule as it applies to summary judgment orders and to relitigate an issue which thus far in the trial court has been conclusively determined as a proper question for trial.
5. Orders Determining Rule 56 Motions For Summary Judgment Are Not Final
The provisions of 28 U.S.C. § 1291 confer jurisdiction upon the courts of appeals to review appeals “from all final decisions of the district courts . . . except where a direct review may be had in the Supreme Court.” Generally, a party may not take an appeal under § 1291 “until there has been a decision by the District Court that ‘ends the litigation on the merits and leaves nothing for the court to do but execute the judgment.’ [Citation.]”
Van Cauwenberqhe v. Baird (1988) 486 U.S. 517, 521, 100 L.Ed.2d 517.
As a general rule, “the denial of a Rule 56 motion is an interlocutory order from which no appeal is available until the entry of judgment following trial on the merits.” Kraus v. County of Pierce (9th Cir.1986) 793 F.2d 1105, 1107; White v. Pierce County (9th Cir.1986) 797 F.2d 812, 814.
“The denial of a motion for summary judgment because of the presence of genuine issues of fact is not normally appealable. For the moving party is not hereby foreclosed. When the facts are developed, he may still win. Plainly such an order is not final.”
Morqenstern Chemical Co. v. Scherinq Corp. (3rd Cir.1950) 181 F.2d 160, 161. When a summary judgment is denied on the basis of”‘unresolved issues of fact,’ the order is only a pretrial one which does not touch on the merits of the case” Beasley v. Union Pacific Railroad Co. (8th Cir.1981) 652 F.2d 749, 750 and is not
final. Thus, where “[o]nly [a] procedural aspect or incident was . . . involved, [n]o substantive right of appellant was affected. Without injury to rights, there could not be a basis for any interlocutory consideration.” Upper Mississippi Towing Corp. v. West (8th Cir.1964) 338 F.2d 823, 825.
The substance of the instant appeal is, in fact, taken from the denial of a FRCP Rule 56 motion for summary judgment and a Rule 42(b) motion for a separate trial on the issue of the releases. Contrary to the manner in which Scientology labelled its third motion on the issue of whether the releases were valid as one for a preliminary injunction and for a separate evidentiary hearing,
the substance of the summary judgment motion, the reconsideration motion, the preliminary injunction motion and this appeal was, and is the same. The obvious thrust of each of the motions was to judicially validate the releases so as to defeat the Aznarans lawsuit before it could get to trial.
6. Interlocutory Appeals Must Be Strictly Construed; Thus, This Court May Penetrate The Label Of An Interlocutory Order To Determine If It Is The Proper Subject Of Appellate Review
The provisions of 28 U.S.C. § 1292(a)(1) provide that the denial of an interlocutory injunction in District Court is reviewable pursuant to an interlocutory appeal. “[T]he statute creates an exception from the long-established policy against piecemeal appeals …. The exception is a narrow one and is keyed to the ‘need to permit litigants to effectually challenge interlocutory orders of serious, perhaps irreparable, consequence.’ [Citation.]” Gardner v. Westinghouse Broadcasting Co. (1978) 437 U.S. 478, 480, 57 L.Ed.2d 364. Hence, “It must be construed strictly.” Surgidev Corp. v. Eye Technology, Inc. (8th Cir.1987) 828 F.2d 452, 457.
Thus, as when summary judgment is denied, “an order by a federal court that relates only to the conduct or progress of litigation before that court ordinarily is not considered an injunction and is not appealable under § 1292(a)(1).” Gulfstream Aerospace Corp. v. Mayacamas Corp. (1988) 485 U.S. 271, 279, 99
L.Ed.2d 296. Such orders do not involve irreparable consequence.
This Court enjoys the discretion to determine whether the instant appeal falls within, or is beyond the scope of 28 U.S.C. §
1292(a)(1) because “Courts examine the effect of an interlocutory order rather than its terminology in determining reviewability under 28 U.S.C. § 1292(a)(1).” Matter of Bowoon Sangsa Co. LTD. v. Micronesian Industrial Corp. (9th Cir. 1983) 720 F.2d 595; Tagupa v. East-West Center, Inc. (9th Cir.1981) 642 F.2d 1127, 1129. Therefore, “the meaning of injunction within § 1292(a)(1) would turn … on the substance . . . [not] on the form of the trial court order.” Abernathy v. Southern California Edison (9th Cir.1989) 885 F.2d 525, 528. “[A]n injunction is defined not by its title but by its effect on the litigants.” Id. at 529, Fn. 14.
“In considering the application of § 1292(a)(1) to borderline cases . . . [the Court] must be ever mindful that it was intended as a narrow exception to the policy of the basic final judgment rule, ‘a wisely sanctioned principle against piecemeal appeals governing litigation in federal courts.’ [Citation.] The great advantages of that policy in the administration of federal justice dictate against a reliance on the strict letter of § 1292(a)(1) which would cause the exception to encroach unduly on the rule.” (Emphasis added.)
Western Geophysical Co. of America v. Boly Associates, Inc. (2nd Cir.1972) 463 F.2d 101, 104.
The same common-sense rule applies to the Court’s evaluation of the nature of a motion for a preliminary injunction. “The label does not determine the nature of the motion. Hook v. Hook & Ackerman (3rd Cir.1954) 213 F.2d 122, 128.
7. The Instant Appeal Addresses The District Court’s Exercise of Control Over The Parties’ Litigation
Simply because Scientology dubbed its motion as one for a”preliminary injunction” does not necessarily require this Court to
exercise its appellate jurisdiction over the District Court’s denial thereof. Although under “normal circumstances” Winfield v. St. Joe Paper Co. (11th Cir.1981) 663 F.2d 1031, 1032, the denial of a preliminary injunction requires review pursuant to 28 U.S.C. § 1292(a) (1) , such is not required when a “motion for a preliminary injunction was not made under normal circumstances.” Ibid.
Thus, in Winfield, the court rejected jurisdiction of an appeal of a denial of a preliminary injunction. It found the appeal “was simply a refiling of a motion which had been denied two years earlier.” Ibid. The court recognized that it was confronted with “a device to extend the period for filing an appeal from thirty days to two years” and to “rule in favor of appellants on this issue would circumvent the policy behind Rule 4 of the Federal Rules of Appellate Procedure.” Ibid. Therefore, “where the motion is simply a ploy” Ibid, designed to subvert a policy behind a rule or statute, an appeal from the denial thereof will not be heard because it is not properly before the reviewing court.
The Seventh Circuit reserves the right “to penetrate through form to substance” in order to dismiss an appeal of an injunctive order brought pursuant to 28 U.S.C. § 1292(a)(1). In Securities and Exchange Commission v. Suter (7th Cir.1987) 832 F.2d 988, the trial court enjoined Suter from violating the Security Act and he did not file a timely appeal. Thereafter, Suter brought three successive, and unsuccessful, motions to vacate the injunction. He took an appeal from the last denial. The appellate court dismissed his appeal because his briefs in both the district court and the court
of appeals revealed “that his only ground for vacating the injunction is that it should never have been entered in the first place.” Id. at 990. The reviewing court found that the motions to vacate were “efforts to create appellate jurisdiction over the injunction after the deadline for an appeal had passed.” Ibid.
The strategy employed by Scientology in connection with the instant appeal is analogous to the conduct rejected by the courts in Winfield and Securities and Exchange Commission. Appellants in those cases employed devices, in the form of injunction related motions, intended to circumvent the policy implemented in Federal Rule of Appellate Procedure 4(a) requiring timely appeals. In our case Scientology has employed the device of a preliminary injunction to circumvent the policy of 28 U.S.C. § 1291 to avoid piecemeal appeals and consider only those trial court determinations that are final. Scientology could not properly appeal from either the denial of its summary judgment motion nor its motion for reconsideration. Thus, it cannot legitimately appeal from the denial of a “motion for a preliminary injunction” when the appeal seeks to do indirectly that which the law prohibits it from doing directly.
“Because the civil rules do not explicitly define the extent of the district judge’s discretion in allowing successive pretrial motions or motions for reconsideration of an interlocutory order such as a preliminary injunction, early court decisions formulated a requirement that a successive motion state new facts warranting reconsideration of the prior decision. [Citations.] This logic also applies to the interpretation of § 1292(a)(1). . . . The issue here is appellate jurisdiction and the duty of the court of appeals to determine
sua sponte if necessary, whether jurisdiction is proper. Mischaracterization by the lower court or by the parties does not affect jurisdictional determinations.” F.W. Kerr Chemical Co. v. Crandall Associate, Inc., supra . 815 F.2d at 428-429.
In Kerr three similar motions were brought, the last two of which were “virtually identical.” Id. at 429. The court stated:
“Parties should not be allowed to harass their adversaries and the courts with a barrage of successive motions for extraordinary, preliminary injunctive relief, secure in the knowledge that they can take an interlocutory appeal when it becomes apparent that they cannot win their war of attrition.” Ibid.
Likewise, in the instant case Scientology should not be allowed to successively relitigate the issue of the validity of the releases in the hope that if enough shots are taken, it will obtain a favorable ruling. Since the nature of the motion for preliminary injunction was, in fact, as found by the District Court, “merely [an] attempt to relitigate the issue of the validity of the release [which] [t]he Court has already determined in ruling upon defendants’ previous motion for summary judgment and motion for consideration”, it is respectfully submitted that this Court should dismiss the instant interlocutory appeal for lack of proper appellate jurisdiction.
The repeated rulings of the District Court consistently reveal that it was exercising its control over the progress of this litigation so as to preserve for the jury’s determination all claims between the adverse parties, to be heard together in the same proceeding. Similarly, the substance of the three motions
below, unsuccessfully brought by Scientology, which now culminate in the instant interlocutory appeal consistently reveal its determination to obtain a favorable pretrial ruling that the releases are valid. Therefore, as this Court’s scrutiny penetrates the terminological form Scientology dubs as a motion for a preliminary injunction, logic compels the conclusion that in substance Scientology is attempting to obtain an advantageous, and improper, pretrial ruling via appeal on the releases which in the trial court has thus far been three times elusive.
An analysis of Scientology’s motions and the District Court’s rulings below compels the conclusion that the District Court’s respective rulings on Scientology’s motions for summary judgment, for reconsideration of the denial of summary judgment and for a preliminary injunction relate “only to the conduct or progress of litigation . . . [which] is not considered an injunction and appealable under § 1292(a)(1).” Gulfstream, supra, 485 U.S. at 279.
Therefore, the herein appeal should be dismissed because it is not properly before this Court. The Court should decline to exercise its appellate jurisdiction.
STATEMENT OF THE CASE
A. Nature Of The Case
On April 1, 1988, the Aznarans filed their Complaint below for false imprisonment, fraud, intentional and negligent infliction of emotional distress, loss of consortium, invasion of privacy, conspiracy, breach of contract, restitution, breach of statutory
duty to pay minimum wages and overtime and constructive fraud. The factual basis of the complaint is predicated upon the Aznarans’ fifteen years in Scientology.
After successfully disqualifying the Aznarans former counsel, the Scientology defendants answered and all except Author Services, Inc., counterclaimed against the Aznarans.
In the District Court, Scientology has consistently, but unsuccessfully, sought to silence and neutralize the Aznarans by acquiring a judicial finding that the “releases” Scientology alleges the Aznarans signed are valid and enforceable.
B. Factual Background
Vicki J. Aznaran and Richard N. Aznaran are married. Formerly, they were among the highest ranking officials in Scientology. Vicki was the President of Religious Technology Center and Richard was the Chief of Security, Worldwide. For fifteen years they were subjected to fraud, coercive persuasion and exploitation at the hands of Scientology. The Aznarans were subjected to coercive persuasion 2 by Scientology without their knowledge or consent.
2 As defined by the California Supreme Court in 1988, what has been called coercive persuasion, thought reform or “Brainwashing is ‘a forcible indoctrination to induce someone to give up basic political, social, or religious beliefs and attitudes and to accept contrasting regimented ideas.’ [Citation.] The specific methods of indoctrination vary, but the basic theory is that brainwashing ‘is fostered through the creation of a controlled environment that heightens the susceptibility of a subject to suggestion and manipulation through sensory deprivation, physiological depletion, cognitive dissonance, peer pressure, and a clear assertion of authority and dominion. The aftermath of indoctrination is a severe impairment of autonomy of the ability to think independently, which induces a subject’s unyielding compliance and rupture of past connections, affiliations, and associations.” Molko v. Holy Spirit Association [Footnote con’t.]
The imposition of such techniques forced them to abandon their identities and submit to Scientology’s authority. They were brainwashed by, among other techniques, being hooked up to a lie detector machine, called an “E-Meter,” whereby they were coercively indoctrinated with the Scientology’s peculiar definitions and meanings of words. This caused them to communicate in a language known only to Scientologists. The result of the indoctrination was blind acceptance of everything that Scientology promulgated, including the dissolution of their marriage. (Record No. 197 at 26, 32-34; Record No. 259, Exhibit B at ¶14.)
Both Aznarans were continuously subjected to techniques of coercive persuasion through which Scientology coercively inculcated them with its ideology and dominated them. Yielding to Scientology’s coercion, they were subject to Scientology’s domination and almost absolute control. The ideology included the premise that if they dis-affiliated with Scientology, each of them would be deemed a “suppressive person” against whom the “fair game policy” would be employed by Scientology.3
[Footnote con’t.] (1988) 46 Cal.3d 1092, 1109. Coercive persuasion often results in “serious and sometimes irreversible physical and psychiatric disorders, up to and including schizophrenia, self-mutilation and suicide.” Id. 46 Cal.3d at 1118.
3 “. . .'[F]air game’ was a practice of retribution Scientology threatened to inflict on ‘suppressives,’ which included people who left the organization or anyone who could pose a threat to the organization. Once someone was identified as a ‘suppressive,’ all Scientologists were authorized to do anything to ‘neutralize’ that individual – economically, politically and psychologically.” Wollersheim v. Church of Scientology (1989) 212 Cal.App.3d 872, 888. The “fair game policy”, to be enforced against “enemies” or “suppressive persons” states that such [Footnote con’t]
After 15 years of deception, coercion, exploitation and abuse, Vicki Aznaran found herself in a potentially life-threatening circumstance at the end of March 1987. Having been incarcerated for almost two months under constantly cruel conditions in Scientology’s forced-labor camp dubbed “Rehabilitation Project Force” in the California desert near Gilman Hot Springs, Vicki’s uterus had become infected. She had been forced to run, not walk, at all times. She was compelled for long hours to perform hard physical labor on a daily basis and sometimes with a jackhammer from 7:00 a.m. until after night fell. She was not allowed adequate sleep or provided adequate food. She was at almost all times guarded by one or two people who constantly watched her, even as she used the bathroom. Additionally, on motorcycles and in jeeps armed security guards patrolled the fenced-in area where Vicki was incarcerated. Letters from Richard Aznaran, her husband, were not delivered and he was prohibited from visiting her.
She was prohibited from reading newspapers or books. At night, she was locked up. Despite her daily requests to see a doctor for her infected uterus and consequential fever, Vicki was denied medical attention. She was in physical pain. (Record No. 197 at 22-25; Record No. 259, Exhibit D at ¶ 2.)
Terrified, Vicki managed to escape from the forced labor camp in the desert and fled to Hemet, a nearby town.
[Footnote con’t] person “[m]ay be deprived of property or injured by any means by any Scientologist without any discipline of the Scientologist. May be tricked, sued or lied to or destroyed.” Allard v. Church of Scientology (1976) 58 Cal.App.3d 439, 443, fn. 1, 129 Cal.Rptr. 797.
Scientology leader David Miscavige and chief Security Checker, Ray Mithoff summoned Richard to Hemet where they interrogated him until 5:00 a.m. in an effort to get him to divorce Vicki because she was a “suppressive person.” Richard could not compromise his loyalty to his wife. He told Miscavige and Mithoff that he would try to salvage Vicki. They sent him to the hotel to talk her into returning to Scientology. (Record No. 197 at 25.)
From April 1, 1987 to April 9, 1987, with an exception of a trip to obtain medical attention for Vicki, Richard and Vicki were held at a hotel in Hemet. They had less than $50 between the two of them. They were surveilled 24 hours per day by plainclothes security guards from a local Scientology church. They were supposed to stay in the hotel room unless they specifically left to eat. Richard felt they were physically restrained from leaving the hotel. The Aznarans were told by Mark Rathbun and Ray Mithoff that they had to remain at the hotel until the Scientology leaders were finished with them and that if they failed to “cooperate” they would be declared to be suppressive persons and subject to the fair game policy. It was reiterated to the Aznarans that the only way to avoid being declared suppressive persons was to “cooperate.” (Record No. 197 at 26-29; Record No. 259, Exhibit D at ¶ 10.)
Vicki and Richard had a plan to leave the control of the Scientologists but only if they could accomplish it without being declared “fair game.” When Scientologists left without approval, they were declared “fair game.” Over the years, the Aznarans had seen what happened to people who were subjected to the fair game
policy after they had failed to cooperate with Scientology. The Aznarans knew that if they were not “fair game,” Scientology would “exercise some kind of restraint, whereas with fair game there would be no restraint.” (Record No. 197 at 2 6-29.)
The Scientology security guards held all their personal belongings, including a horse and two dogs, so as to further ensure the Aznarans’ cooperation. Vicki knew of others in the past whose belongings and pets were possessed by Scientology as they were leaving the organization. When such people had not “cooperated”, their pets were given away and belongings destroyed. (Record No. 197 at 26; Record No. 259, Exhibit D at ¶ 5.)
While in the hotel room, Mark Rathbun and Ray Mithoff for hours at a time subjected both Richard and Vicki to “security checking” and “interviews.” Security checking is a form of interrogation employing the E-Meter lie detector. Security checking was a tool of thought reform and control employed by Scientology. Ray Mithoff was the highest trained and most senior security checker in all Scientology. During the time the Aznarans were confined to the hotel room, one of them would be getting security checked while the other was being interviewed by Mark Rathbun. (Record No. 197 at 28-29; Record No. 259, Exhibit B ¶¶ 3, 3A.)
During the course of the hours of security checking, Richard was reminded how powerful Scientology was and the type of command it could bring to bear upon him should he fail to cooperate fully. Much of the security checking interrogation was directed toward the reasons that the Aznarans wanted to leave Scientology. Specific
attention was paid to whether either of them harbored a secret motive for wanting to leave, whether they were going to go to the government with information concerning crimes being committed by Scientologists or their agents, give testimony or otherwise make information public that Scientology wanted kept secret. (Record No. 197 at 22-32; Record. No. 259, Exhibit B at f 6; Record No. 259, Exhibit D at ¶ 2.) Particular attention was also paid to interrogating the Aznarans on how much they knew about Scientology so the threat of their leaving could be analyzed. It was intimidating to be security checked by Ray Mithoff and the Aznarans “were in terrible fear that [they] would not be allowed to leave.” (Record. No. 259, Exhibit B at ¶ 3.)
The releases were not negotiated at all. (Record No. 259, Exhibit D ¶ 7.)
The Aznarans never requested any “loan” from Scientology. (Record No. 259, Exhibit A at ¶ 5.)
A few days before the Aznarans were allowed to leave the hotel, top Scientology leader, David Miscavige, came and spoke with them. In response to Miscavige’s inquiry as to their future plans, Richard told him that they had no specific plans, but intended to stay in Southern California and work something out. Miscavige was adamant that he wanted the Aznarans to “leave Southern California” and avoid contact with people they knew, but wanted them to go to Texas. Richard told him that as he had little money, he and Vicki would have to stay in California long enough to sell their horse and make some money to finance the trip. The following day, at
Miscavige’s request, Mark Rathbun suggested to Richard that Scientology purchase the horse from him as well as loan him some money so that he and Vicki could leave immediately for Texas. The Aznarans never requested any loan from Scientology. However, they were told that the reason for the loan was to keep them “out of enemy hands” and to ensure they would not be easy “prey” to those opposed to Scientology. Rathbun’s offer to purchase the horse was for the purpose of expediting our departure from California. Thus, the loan and the purchase of the horse had nothing to do with the releases. Rathbun’s statements to the contrary are false. (Record. No. 259, Exhibit B at f 7; Record No. 259, Exhibit D at ¶ 7; Record No. 197 at 32. Record No. 259, Exhibit A at ¶ 5.) The Scientologists wanted the Aznarans “out of California quickly so we would not be served with any subpoenas in the cases that were going on against them at that time.” (Record No. 259, Exhibit D at f 7.) Scientology did not pay $300 more for the horse than had Richard; it paid $300 less. (Record. No. 259, Exhibit B at ¶ 13.)
That Scientology wanted to indemnify Vicki with respect to any lawsuit wherein she might be named was in order to maintain control over her and prevent her from testifying in a hostile manner in any litigation to which Scientology was a party or to any governmental agency. (Record No. 259, Exhibit D at ¶ 7.) With respect to the ongoing case entitled Stansfield. et al. v. Starkey, et al.. wherein Vicki was at that time named as a defendant, Mark Rathbun “specifically brought up the indemnification” and “warned us that we were to contact him should there be any contact concerning this
litigation or any other litigation in which Scientology was involved. The purpose was to protect Scientology’s interest however and certainly not ours.” (Record No. 259, Exhibit A at ¶ 4b.)
There had been a fire at one of the Scientology ranches where Richard had worked. It destroyed all his belongings concerning which a claim was being negotiated with the insurance company. Rather than wait in California, Richard was -given $1,040.90, the value of his belongings destroyed in the fire. His understanding is that the money would later be reimbursed by the insurance company. (Record No. 259, Exhibit B at ¶ 8; Record No. 259, Exhibit D at ¶ 7.)
Richard was also paid $387.37 in wages, according to Scientology’s rules, that was owed to him for the pay period immediately preceding his departure from Scientology. However, it did not include any compensation for the many hundreds of hours of work he had performed, but been forbidden to include on his time card during the previous 13 months that he had worked for Scientology leader, Norman Starkey. He was supposed to have received minimum wage. (Record No. 259, Exhibit B at f 9; Record No. 259, Exhibit D at ¶ 7.)
Through earlier contacts as a staff member with Scientology’s dirty tricks unit known first as the Guardian’s Office and then as the Office of Special Affairs, Richard had seen various policies concerning releases. Releases were to executed by every public and staff Scientologist before and after every single service received. Guardian’s Office personnel and Scientology attorney John Peterson
told Richard that the releases were unenforceable and for purposes of deterrence only. (Record. No. 259, Exhibit B at ¶ 5; Record No. 259, Exhibit D at ¶ 4.)
In order to dis-affiliate with Scientology without being declared “suppressive” and thereby subject to “fair game,” the Aznarans did what they were told by the Scientologists. This included signing stacks of documents which they did not, with any care, read. Two of Scientology’s attorneys were also present when the Aznarans complied with Scientology’s orders and signed the papers whatever papers they were given. Richard said all the releases and other papers were “all handed to me at the same time. I just signed them.” (Record No. 197 at 29-30; Record. No. 259, Exhibit B at ¶ 4; Record No. 259, Exhibit D at ¶ 3.) Vicki said “we were being watched by guards . . . and we were extremely afraid of being declared fair game if we did not cooperate. I was in a very bad physical and mental state and would have signed anything in order to get away.” (Record No. 259, Exhibit D at ¶ 10.)
Neither of the Aznarans “carefully” read the Mutual Releases and Settlement Agreements. (Record No. 259, Exhibit A at ¶ 4a.) Any statements by Mark Rathbun to the contrary are false. (Record No. 259, Exhibit A at ¶ 2.)
At the time Vicki and Richard signed whatever releases where presented to them at the hotel, it was stressed that if they “spoke to government agents about any ‘confidential information’ [they] had concerning the cult that [they] would be in violation of [their] agreements and that [they] would be sued.” Additionally,
they were directed to “withhold information and avoid testimony in any civil litigation where the truth may be harmful to the cult or aid someone else seeking justice.” Richard concluded that “with the purpose of the releases including the withholding of information from lawful authorities, [he] certainly did not feel that they could possibly be legal or binding.” (Record. No. 259, Exhibit B at ¶ 6.)
The Aznarans did not have the benefit of legal counsel. In fact, it was made clear that they could not seek other counsel. Id. Despite their repeated requests for a copy of the releases over many months following the Aznarans’ move to Dallas, Texas, the Aznarans were not provided copies of the papers they had been forced to sign until shortly before the instant lawsuit was filed. (Record. No. 259, Exhibit B at ¶¶ 2B, 4; Record No. 259, Exhibit D at ¶¶ 2, 2A; Record No. 259, Exhibit A at. ¶ 13.)
The Aznarans do not believe that the releases and waivers supplied by Scientology in support of itself in the instant lawsuit were the papers that they signed in the hotel room in Hemet. In fact, what Scientology now asserts as the releases include more pages that what Richard recalls having signed (Record. No. 259, Exhibit B at ¶ 2A; Record No. 259, Exhibit A at. ¶ 11; Record No. 197 at 30-31.)
C. The Substance Of The Releases
The alleged releases in question provide, in part, that the Aznarans would be bound as follows:
To “release, acquit and forever discharge . . . the
CHURCH . . . from any and all claims, demands, damages, actions and causes of action of every kind and nature, known and unknown, from the beginning of time to and including the date hereof.” (¶ 3 of Exhibits B [As to Vicki] and C [As to Richard] to Documents Nos. 110, 111, 112 and 124.)
“Never to create or publish or attempt to publish, and/or assist another to create for publication by means of magazine, article, book or other similar form, any writing, or to broadcast, or to assist another to create, write, film or video tape or audio tape, any show, program or movie, concerning [his/her] experiences with the Church of Scientology, or personal or indirectly acquired knowledge or information concerning the Church of Scientology, L. Ron Hubbard, or any entities or individuals listed in Paragraph 1, above. [Plaintiff] further agrees that [he/she] will maintain strict confidentiality and silence with respect to [his/her] experiences with the Church of Scientology and any knowledge or information [he/she] may have concerning the Church of Scientology . . ..” (¶ 6.C. of Exhibits B [As to Vicki] and C [As to Richard] to Documents Nos. 110, 111, 112 and 124.)
To “not voluntarily assist or cooperate with any person adverse to the religion of Scientology in any proceeding against any of the Scientology organizations, or cooperate with any person adverse to any of the organizations, individuals, and entities listed in Paragraph 1 above, in any proceeding against any of the organizations, individuals, or entities listed in Paragraph 1 above. [Plaintiffs] also [agree] [they] will not cooperate in any
manner with any organizations aligned against Scientology and any of the organizations, individuals, and entities listed in Paragraph 1 above, (¶ 6.E. of Exhibits B [As to Vicki] and C [As to Richard] to Documents Nos. 110, 111, 112 and 124.)
Will “not testify or otherwise participate in any other judicial, administrative or legislative proceeding adverse to Scientology or any of the organizations, individuals or entities listed in Paragraph 1 above unless compelled to do so by lawful subpoena or other awful process. Unless required to do so by such subpoena, [plaintiffs] [agree] not to discuss [his/her] experiences or personal or indirectly acquired information concerning the organizations, individuals, or entities listed in Paragraph 1, with anyone other than members of [his/her] immediate family. [Plaintiffs] shall not make [themselves] amenable to service of any such subpoena in a manner which invalidates the intent of this agreement. . .” (f 6.F. of Exhibits B [As to Vicki] and C [As to Richard] to Documents Nos. 110, 111, 112 and 124.)
THE RELEASES ARE VOID AND UNENFORCEABLE BECAUSE THEY VIOLATE THE PUBLIC POLICY PROHIBITING AGREEMENTS
THE OBJECTIVES OF AND CONSIDERATION FOR WHICH ARE THE SUPPRESSION OF EVIDENCE OF BOTH CRIMINAL ACTIVITY
AND DISCREDITABLE FACTS
A. Illegal Contracts Are Void, Not Enforceable And May Be Challenged For The First Time On Appeal
Scientology’s indefatigable effort, now through this appeal, has been and is to silence the appellees Aznaran who by first-hand experience possess comprehensive knowledge of the nature and
conduct of Scientology. Such knowledge was gleaned first, from the ground up, and later, from the top down. Scientology would have this Court prohibit the Aznarans from providing aid and support to litigants adverse to Scientology, such as Bent Corydon, whom Scientology has harmed. To do this, Scientology would have this Court enforce agreements that are illegal.
Such illegality lies in the agreements’ would-be legal effect: the judicially enforced suppression of any information that would discredit Scientology or expose its criminal activities. Such a legal effect would corrupt and pervert the time-tested and result-approved objective of all judicial proceedings: the search for and ascertainment of truth. Were such to occur, litigation to which Scientology was a party would become a travesty of justice and, for the opposing party, a paradigm of fundamental unfairness.
2. Standard Of Review
With respect to a contract the validity of which is challenged on public policy grounds, “[t]he burden is on the defendant to show that its enforcement would be in violation of the settled public policy of this state, or injurious to the morals of its people.” People v. Reynolds (July 23, 1990) 90 C.D.O.S. 5596, 5597. As to the judiciary, before “labelling a contract as being contrary to public policy, courts must carefully inquire into the nature of the conduct, the extent of public harm which may be involved, and the moral quality of the conduct of the parties in light of the prevailing standards of the community.” Ibid.
3. Preliminary Legal Principles
In his work Equity Jurisprudence (4th Ed.1918) § 397 at 738, Professor Pomeroy states:
“Whenever a party, who as an actor, sets the judicial machinery in motion to obtain some remedy, has violated conscience, good faith, or other equitable principle, in his prior conduct, then the doors of the court will be shut against him in limine; the court will refuse to interfere on his behalf, to acknowledge his right, or to award him any remedy.” (Emphasis added.)
Thus, where a contract is made either (1) to achieve an illegal purpose, or (2) by means of consideration that is not legal, the contract itself is void. Witkin, Summary of California Law (9th Ed. 1987) Vol. 1, Contracts, § 441 at 396. (Hereinafter”Witkin, § ____ at ____.”) Since an illegal contract is void, it cannot be ratified by an subsequent act, and no person can be estopped to deny its validity. Witkin, § 442, at 396; First National Bank v. Thompson (1931) 212 Cal. 388, 405-406; Wood v. Imperial Irrigation Dist. (1932) 216 Cal. 748, 759 [“A contract void because it stipulates for doing what the law prohibits is incapable of being ratified.”]
A party need not plead the illegality as a defense and the failure to do so constitutes no waiver. In fact, the point may be raised at any time, in the trial court or on appeal, by either the parties or on the court’s own motion. Witkin, § 444, at 397; LaFortune v. Ebie (1972) 26 Cal.App.3d 72, 75, 102 Cal.Rptr. 588 [“When the court discovers a fact which indicates that the contract is illegal and ought not to be enforced, it will, of its own
motion, instigate an inquiry in relation thereto.”]; Lewis & Queen v. M.M. Ball Sons (1957) 48 Cal.2d 141, 147-148, 308 P.2d 713 [“[T]he court has both the power and the duty to ascertain the true facts in order that it may not unwittingly lend its assistance to the consummation or encouragement of what public policy forbids [and] may do so on its own motion.”].
Thus, the court will look through provisions that may appear valid on their face, and with the aid of parol evidence, determine that the contract is actually illegal or is part of an illegal transaction. Id. 48 Cal.2d at 148 [“[A] court must be free to search out illegality lying behind the forms in which the parties have cast the transaction to conceal such illegality.”]; Witkin, § 445 at 398.
There are two reasons for the rule prohibiting judicial enforcement, by any court, of illegal contracts.
“[T]he courts will not enforce an illegal bargain or lend their assistance to a party who seeks compensation for an illegal act [because] Knowing that they will receive no help form the courts . . . the parties are less likely to enter into an illegal agreement in the first place.”
Lewis & Queen, supra , 48 Cal.2d at 149 [308 P.2d at 719].
“This rule is not generally applied to secure justice between parties who have made an illegal contract, but from regard for a higher interest – that of the public, whose welfare demands that certain transactions be discouraged.” (Emphasis added.)
Owens v. Haslett (1950) 98 Cal.App.2d 829, 221 P.2d 252, 254.
Illegal contracts are matters which implicate public policy. Public policy has purposefully been a “vague expression .
[that] has been left loose and free of definition in the same manner as fraud.” Safeway Stores v. Hotel Clerks Intn’l Ass. (1953) 41 Cal.2d 567, 575, 261 P. 2d 721. Public policy means “anything which tends to undermine that sense of security for individual rights, whether of personal liberty or private property, which any citizen ought to feel is against public policy.” Ibid. Therefore,”[a] contract made contrary to public policy may not serve as the foundation of any action, either in law or in equity, [Citation] and the parties will be left where they are found when they come to court for relief. [Citation.]” Tiedie v. Aluminum Paper Milling Co. (1956) 46 Cal.2d 450, 454, 296 P.2d 554.
“It is well settled that agreements against public policy and sound morals will not be enforced by the courts. It is a general rule that all agreements relating to proceedings in court which involve anything inconsistent with [the] full and impartial course of justice therein are void, though not open to the actual charge of corruption.”
Eggleston v. Pantages (1918) 103 Wash. 458, 175 P. 34, 36; Maryland C. Co. v. Fidelity & Cas. Co. of N.Y. 71 Cal.App. 492
B. If The Consideration In Support Of A Contract Is The Nondisclosure Of Discreditable Facts, It Is Illegal And The Contract Is Void
The consideration for a promise must be lawful. Civil Code § 1607. Moreover, “[i]f any part of a single consideration for one or more objects, or of several considerations for a single object, is unlawful, the entire contract is void.” Civil Code § 1608. Fong v. Miller (1951) 105 Cal.App.2d 411, 414, 233 P.2d 606. “In other words, where the illegal consideration goes to the whole of the promise, the entire contract is illegal.” Witkin, § 429 at 386;
Morev v. Paladini (1922) 187 Cal. 727, 738 [“The desire and intention of the parties [to violate public policy] entered so fundamentally into the inception and consideration of the transaction as to render the terms of the contract nonseverable, and it is wholly void.”].
In Brown v. Freese (1938) 28 Cal.App.2d 608, the California Court of Appeal adopted section 557 of the Restatement of the Law of Contracts prohibiting as illegal those agreements which sought to suppress the disclosure of discreditable facts. The court stated:
“A bargain that has for its consideration the nondisclosure of discreditable facts … is illegal. … In many cases falling within the rule stated in the section the bargain is illegal whether or not the threats go so far as to bring the case within the definition of duress. In some cases, moreover, disclosure may be proper or even a duty, and the offer to pay for nondisclosure may be voluntarily made. Nevertheless the bargain is illegal. Moreover, even though the offer to pay for nondisclosure is voluntarily made and though there is not duty to make disclosure or propriety in doing so, a bargain to pay for nondisclosure is illegal.” (Emphasis added.)
Brown 28 Cal.App.2d at 618.
In Allen v. Jordanos’ Inc. (1975) 52 Cal.App.3d 160, 125 Cal.Rptr. 31, the court did not allow a breach of contract action to be litigated because it involved a contract that was void for illegality. In Allen, plaintiff filed a complaint for breach of contract which he subsequently amended five times. Plaintiff, a union member, was entitled by his collective bargaining agreement to have a fair and impartial arbitration to determine the truth or
falsity of the allegations against him of theft and dishonesty. The allegations of the amended complaints stated that there had been an agreement between the parties whereby defendant laid off plaintiff, defendant’s employee, and allowed plaintiff to receive unemployment benefits and union benefits. “Defendants also agreed that they would not communicate to third persons, including prospective employers, that plaintiff was discharged or resigned for dishonesty, theft, a bad employment attitude and that defendants would not state they would not rehire plaintiff.” Id. at 163. Plaintiff alleged there had been a breach in that defendants had communicated to numerous persons, including potential employers and the Department of Human Resources and Development, that plaintiff was dishonest and guilty of theft and for that reason had resigned for fear of being discharged for those reasons, that plaintiff had a bad attitude and that defendants would not rehire him. Plaintiff alleged as a result of the breach he suffered a loss of unemployment benefits, union benefits and earnings. The court held that the plaintiff had bargained for an act that was illegal by definition, the withholding of information from the Department of Human Resources Development. It stated:
“The nondisclosure was not a minor or indirect part of the contract, but a major and substantial consideration of the agreement. A bargain which includes as part of its consideration nondisclosure of discreditable facts is illegal. (See Brown v. Freese, 28 Cal.App.2d 608, 618 [83 P.2d 82.].) It has long been hornbook law that consideration which is void for illegality is no consideration at all. [Citation.]” Id. 52 Cal.App.3d at 166.
C. If The Object Of A Contract Is Illegal, The Contract Is Void
The object of a contract must be lawful. Civil Code § 1550. If the contract has a single object, and that object is unlawful, the entire contract is void. Civil Code § 1598. Civil Code § 1667 defines unlawfulness as that which is either “[[c]ontrary to an express provision of the law,” or is “[c]ontrary to the policy of the express law, though not expressly prohibited” or is “[o]therwise contrary to good morals.”
Civil Code § 1668 states:
“All contracts which have for their object, directly or indirectly, to exempt anyone from responsibility for his own fraud, or willful injury to the person or property of another, or violation of law, whether willful or negligent, are against the policy of the law.”
Further, an agreement to suppress evidence or to conceal a witness is illegal. Witkin, § 611 at 550. Penal Code §§ 136, 136.1, and 138. In Mary R. v. B. & R. Corp. (1983) 149 Cal.App.3d 308, 196 Cal.Rptr. 871, a licensed physician was alleged to have repeatedly engaged in the sexual molestation of a 14 year old girl. A civil lawsuit arising from the molestations had been settled and the file sealed. In the order dismissing the action by stipulation and sealing the court files, the trial court, at the request of the parties, ordered the parties, their agents and representatives never to discuss the case with anyone. The appellate court found such “confidentiality” was against public policy. That court stated:
”The stipulated order of confidentiality is contrary to public policy, contrary to the ideal that full and impartial justice shall be secured in every matter and designed to secrete evidence in the case from the very public agency charged with the responsibility of policing the medical profession. We believe it clearly improper, even on stipulation of the parties, for the court to issue an order designed not to preserve the integrity and efficiency of the administration of justice [Citation], but to subvert public policy by shielding the doctor from governmental investigation designed to protect the public from misconduct within the medical profession, and which may disclose a professional license of this state was used to establish a relationship which subjected a juvenile patient to criminal conduct. Such a stipulation is against public policy, similar to an agreement to conceal judicial proceedings and to obstruct justice. . . Accordingly, . . . such a contract made in violation of established public policy will not be enforced . . . .” (Emphasis added.)
Id. at 316-317.
Similarly, in Tappan v. Albany Brewing Co. (1889) 80 Cal. 570, 571-572, the court invalidated a settlement agreement provision. It stated:
“It was contended by the Respondent that this was nothing more than a payment of a sum of money by way of a compromise of litigation, and that such contracts have been upheld. We do not so construe the agreement. It was a promise to pay a consideration for the concealment of a fact from the court and the parties material to the rights of said parties, and which it was her duty to make known. Such a contract was against public policy.”
In the instant case, the releases are void because they violate the public policy prohibiting the obstruction of justice by suppressing evidence of illegal conduct that is criminal and
D. The Releases Are Void Because Both Their Object And Consideration Are Not Legal
1. Scientology’s Contentions
Scientology contends that the Aznarans have “blatantly disregarded their promises not to divulge information about the Church and not to cooperate or appear voluntarily in other proceedings against the Church” (Brief for Appellants at 9-10) in the following ways:
(1) From March 18 to 30, 1988, the Aznarans met with Joseph A. Yanny, a former attorney for Scientology who at that time was not (but in the future would be) in litigation with Scientology.
(2) In June 1988, the Aznarans met with reporters for the Los Angeles Times newspaper.
(3) As recently as September 1989, the Aznarans met with and submitted declarations on behalf of Bent Corydon, in the case entitled Corydon v. Church of Scientology International, Inc. et al, Los Angeles Superior Court No. C 694 401.
(4) Vicki J. Aznaran met with an attorney in other Scientology litigation, currently before the Honorable James M. Ideman, entitled Religious Technology Center v. Scott, et al, United States District Court, Central District of California, Case Nos. CV 85-711 and 85-7197 JMI and in October 1988 filed a declaration therein. 4
4 For reasons that will become more apparent below, Scientology has not included in its litany of the “breaches” of the “release” it attributes to the Aznarans an interview with agents of the Internal Revenue Service that took place on [Footnote Con’t.]
Scientology claims such disclosures constitute irreparable injury because they disclose:
“confidential information about internal Church affairs, including subjects such as internal Church management, structure and activities, and information learned during attorney-client privileged discussions during the time when Vicki acted on behalf of one of the appellants [Religious Technology Center], information as to her own experiences with the Church, including her employment history, her claims in this lawsuit, and information allegedly imparted to her by senior officials of Scientology organizations when she was a fiduciary.”
(Brief for Appellants at 11.)
2. The Substance Of Vicki Aznaran1s Declarations
Vicki Aznaran submitted six declarations concerning which Scientology claims she has breached the “release.” However, as a quick perusal of the substance of Ms. Aznaran’s declarations will illustrate, Scientology’s “releases” are void. At best, the information imparted by Ms. Aznaran concerns facts which discredit Scientology. At worst, such information concerns criminal activity.
a. Declaration Executed October 27, 1988
Vicki Aznaran’s October 27, 1988 declaration in the Corydon litigation was in support of a motion seeking service of a Summons
[Footnote Con’t.] May 19, 1988. (Record No. 168 at p. 2 [Memorandum in Support of Motion for Production of Audio Tape [of I.R.S. interview].])
Similarly, among the complained of “breaches” Scientology has failed to mention an interview between Brett Pruitt, an agent for the Federal Bureau of Investigation and the Aznarans. (Record No. 252 at 3.)
and Complaint by publication of defendant David Miscavige. The facts of which Vicki Aznaran had first-hand knowledge which she set forth in her declaration include the following:
¶ 2. As one of the highest ranking members of Scientology and upon the basis of her position in upper management, Vicki was a member of the “Sea Organization” (“Sea Org”) and was familiar with Scientology’s methods of organization, authority and control. The Sea Org would send its members to individual Scientology organizations wherein such Sea Org personnel would exercise “unlimited power to handle ethics [discipline], tech and administration.” Sea Org personnel would be sent to Scientology organizations when said organization were making insufficient profits. Such personnel “can take any action they deem necessary . . . to accomplish their ends. They can control the funds of that organization and its personnel. They can remove personnel and post personnel. They can transfer funds to the Sea Org organizations or spend funds as they see fit.”
¶ 3. The real management of all Scientology organizations is comprised of Sea Org members. Scientology management will designate persons to be the “figurehead” officers of its corporations, but they will possess little, if any actual power, over that particular organization. Officers of Scientology corporations are to be mere figure heads; the directors have more power and there are “trustees who are over the very top corporations who can remove directors. These trustees hold the power as regards Scientology’s money, assets, personnel, etc. The top trustees of Scientology when I was director of RTC were David Miscavige, Lyman Spurlock and Norman Starkey.”
¶ 6. Spurlock controlled all tax matters for Religious Technology Center, Church of Scientology International/ Author Services/ Inc./ Church of Scientology of California and Church of Spiritual Technology. When Vicki was the president of Religious Technology Center, Spurlock would issue orders to her. Spurlock, Starkey and Miscavige chose the directors, trustees and officers for RTC, CSI and CST.
¶ 7. Starkey and Miscavige supervised and controlled all litigation matters for Scientology. In 1982 both Starkey and Miscavige ordered Vicki to obtain a private investigator to compromise Judge Krentzman of the United States District Court, Middle District of Florida, Tampa Division, because he “had been giving Scientology unfavorable rulings.” In 1986, they ordered certain
Scientology corporations to settle cases in which such corporations had been named defendants. The officers and directors of the corporations did not know the terms of the settlements.
¶ 9. Part of the strategy for the manner in which Scientology manages its enterprises is “to shield its management from legal process. Front men are designated to hold figurehead posts, while real management power is held by others outside the corporate structure. To this end, Scientology will go to extreme lengths to conceal upper management personnel from service of process, subpoenas and depositions. . . For example, in 1984 when the IRS was conducting a criminal investigation against various Scientology entities, the personnel who had knowledge of criminal behavior as regards Scientology’s funds were hidden or sent away. Fran Harris . . . was sent to Denmark for a year. Mark Ingber . . . was sent to Denmark for a year. . . . Miscavige, Starkey and Spurlock took great precautions with their travels, offices and residences so that they could not be found or served.”
¶ 12 I have reason to believe that documents which would
normally reflect traditional criteria of the managing agent relationship between Scientology and Mssrs. Spurlock and Starkey have either been concealed or destroyed by Scientology. For example, at Mr. Starkey”s direction, I destroyed such information as it related to the involvement and control over Scientology By L. Ron Hubbard, Mr. Starkey and Mr. David Miscavige.”
(Exhibit A.l to Appellees’ Request for Judicial Notice.)
b. Declaration Executed November 30, 1988
On November 30, 1988, Vicki Aznaran executed a declaration on behalf of Bent Corydon that was filed in the Corydon litigation. Among other things, it stated:
¶ 2. As President of RTC and a member of the Sea Org in 1985 Vicki “attended a Scientology conference on splinter groups, i.e. groups of ex-Scientologists, often called “squirrels.”
¶ 3. This meeting was attended by Norman Starkey, Lyman Spurlock and David Miscavige. At the meeting Miscavige “ordered that Scientologists be organized and motivated to physically attack Squirrels and disrupt their operations. Bent Corydon . . . was included in this target group.”
¶ 4. “This order represented an on-going policy that started before 1985 and was still in effect when I left Scientology in 1987.”
(Exhibit A.2 to Appellees’ Request for Judicial Notice.)
c. Declaration Executed February 8, 1989
On February 8, 1989, Vicki Aznaran executed a declaration on behalf of Bent Corydon that was filed in the Corydon litigation.
Among other things, it stated:
¶ 1. When she was President of RTC, it “claimed to own the various Scientology trademarks and functioned as an enforcer of the ‘purity’ of Scientology as interpreted by its power hierarchy. This enforcement power extended, in diverse ways, over the functioning of supposedly independent Scientology corporations. . . “I also had access to many of the business and litigation secrets of Scientology, including its many dirty tricks projects.
¶ 2. “In 1985, I attended a meeting called by David Miscavige . . . present were Norman Starkey (President of ASI) and Lyman Spurlock. These three . . . were the managing agents of Scientology at that time. . . The meeting was called to discuss legal matters of all the Scientology entities. Most of the important decisions for Scientology corporations ASI (Author Services, Inc.), SMI (Scientology Missions International), RTC (Religious Technology Center), Bridge, CSI (Church of Scientology International), etc.) were handled at meetings like this without the presence or input from the officers of the separate corporations because the control of all Scientology was principally in the hands of Hubbard, Miscavige, Starkey and Spurlock.
¶ 3. “Miscavige told the meeting that Scientology organizations had not been aggressive enough in combatting squirrels (individuals who had broken with the Church of Scientology but were still using ideas similar to Scientology).” Such persons are on “Scientology’s list of enemies and subject to Scientology’s ‘fair game’ policy. ‘Fair game’ is a policy (actually it is a part of Hubbard’s ‘scriptural’ writings) which mandates that the enemies of Scientology may be ‘deprived of property or injured by any means by any Scientologist without any discipline of the Scientologist. May be tricked, sued, lied to or destroyed.'”
“Miscavige told those at the meeting that they should take the lead from Hubbard’s suggestions of violence and personal attacks against squirrels both as written in the fair game policy and in Professional Auditor’s Bulletin No. 53 in which Hubbard said the way to treat a squirrel is to hurt him to hard that he ‘would have thought he had been hit by a Mack truck” and, Hubbard continued, ‘I don’t mean thought-wise.”
¶ 4. Actions against squirrels were commenced and “I received reports of such completed actions. These actions included, but were not limited to burglaries, stealing records, and sending provocateurs to infiltrate squirrel events and to provoke fights. These activities were also directed against Bent Corydon, including break-ins at his office, physical attacks upon him, and the use of spies to infiltrate his group.”
¶ 5. Whenever Scientology discovers that a book critical of it or L. Ron Hubbard is going to be published, “a three pronged attack is set into motion. Scientology’s intelligence arm (now the Office of Special Affairs and previously the Guardian’s Office) commences data gathering including covert operations to obtain data on the author and get a copy of the manuscript, etc. Scientology’s legal staff is activated to determine how to prevent publication by legal means or threats of suit. The public relations staff are also activated … to design plans to attack the author’s credibility …”
¶ 6. In late 1985, “Scientology became aware that Bent Corydon was writing a book critical of Scientology and L. Ron Hubbard. Therefore, the attacks of him became more important and plans were designed to meet the three objectives: legal, intelligence and public relations. This type of plan involved decision making, people and money from several of the ‘separate’ Scientology organizations under the direction of Miscavige.”
¶ 7. “When Scientology organizations undertake illegal operations, little in the way of written records are kept. However, as President of RTC I would regularly receive envelopes with unsigned papers detailing the specifics of operations targeted against enemies and announcing successful actions. I specifically recall seeing one such report outlining the attacks on Corydon on account of his book.”
(Exhibit A.4 to Appellees’ Request for Judicial Notice.)
d. Declaration Executed September 26, 1989
On September 26, 1989, Vicki Aznaran executed a declaration on behalf of Bent Corydon that was filed in the Corydon litigation. Among other things, it stated:
¶ 2. Vicki was the President of the Religious Technology Center (RTC) from 1983 to 1987. RTC is the most powerful corporation controlled by Scientology.
¶ 3. One of the “foremost enemies” of Scientology is a person labelled a “Squirrel”, someone who practices Scientology on his own and threatens Scientology’s profitability because Scientology does not get money from such practice. “Squirrels are despised and persecuted in Scientology.”
¶ 4. David Miscavige is the most powerful person in Scientology with whom and other “top officials of Scientology organizations” Vicki attended meetings “to review the status of all Scientology’s activities including its litigation and dirty tricks campaigns against Scientology’s enemies.”
¶ 6. At one meeting in 1984 or 1985 Miscavige instructed those present that “all of Scientology should be more aggressive in their fair game attacks upon and injuries inflicted on Scientology’s enemies, especially squirrels.” “Bent Corydon was a hated squirrel who vexed Scientology’s leadership by his refusal to give up his outspoken position.”
¶ 8. “Miscavige meant all types of attack be used, including physical attacks, defamation, and efforts to cause Corydon to go into bankruptcy” pursuant to Scientology’s “scripture” known as the “fair game” policy which dictates that enemies may be “Deprived of property or injured by any means by any Scientologist, without discipline of the Scientologist. May be tricked, lied to, sued or destroyed.”
¶ 9. Because Vicki was president of RTC she knew “that fair game actions against enemies were commonplace. In addition to the litigation tactics described below, fair game activities included burglaries, assaults, disruption of enemies1 businesses, spying, harrassive investigations, abuse of confidential information in parishioner files and so on.”
¶ 11 “Ultimate control of all Scientology corporations rested with Miscavige . . ..”
(Exhibit A.5 to Appellees’ Request for Judicial Notice.)
3. The Substance Of Richard Aznaran’s Declaration Executed October 31, 1989
In the same case in the Corydon litigation, appellee Richard N. Aznaran submitted a declaration dated October 31, 1989, on behalf of Bent Corydon, wherein among other things he stated the following:
¶ When he left Scientology in 1987 he “had been in security and intelligence operations for the most senior management of Scientology for five years.” He “reported to and was directed by David Miscavige” who “particularly detested Bent Corydon an ex-Scientology ‘squirrel’ who had defected in 1982.”
¶ If “I was instructed by David Miscavige . . . specifically . . . “that if I could I was to hurt Corydon physically if I could arrange for it to appear justified.”
¶ “On the next occasion . . . security guards, under my direction, jostled Corydon and placed him under ‘citizens arrest1 for trespassing. In actual fact Corydon never set foot on our property not did he represent any harm or threat of harm.”
¶ “Later, Miscavige called me to his office . . . and was yelling at me and threatening me with loss of my position and with ethics conditions [discipline] for not having carried out Miscavige’s instructions.”
“The bottom line was that Miscavige wanted Corydon physically and mentally punished.”
(Exhibit A.6 to Appellees’ Request for Judicial Notice.)
If this Court enforced the “releases,” Corydon would not have the benefit of the Aznarans’ voluntary cooperation in the form of sworn statements. Were Corydon deprived of such cooperation, the result would be “to subvert the truth and pervert justice through fraud, trickery and chicanery at the hands of unscrupulous
[persons].” Von Kessler v. Baker (1933) 131 Cal.App. 654, 657, 658 [Agreement was void “as tending to obstruct and impair the administration of justice, and therefore as contrary to public policy.”].
4. The Aznarans’ Interviews With Agents Of The Internal Revenue Service And The Federal Bureau Of Investigation
On May 19, 1988, the Aznarans were interviewed by agents of the Internal Revenue Service for eight hours on the subject of their knowledge of Scientology. (Document No. 168 at 3:12-4:27.) In addition to this, an F.B.I, agent named Brett Pruitt interviewed Vicki Aznaran for six hours in 1988 on the subject of her knowledge of Scientology. (Document No. 246 at 3:3-9.)
Obstruction of criminal investigations is included within the scope of 18 U.S.C. § 1510 which “was designed to deter the coercion of potential witnesses by the subjects of federal criminal investigations prior to the initiation of judicial proceedings.” United States v. San Martin (5th Cir.1975) 515 F.2d 317, 320; United States v. Siegel (2nd Cir.1983) 717 F.2d 9, 20-21. Its purpose is to “extend protection . . . afforded witnesses, jurors and others in judicial, administrative and congressional proceedings to ‘potential informants or witnesses’ and to those who communicate information to Federal investigators prior to a case reaching court.” United States v. Kozak (3rd Cir.1971) 438 F.2d 1062, 1065.
Scientology has a history of implementing strategies to avoid accountability for its criminal conduct. Thus, in relation to
Scientology in United States v. Hubbard (D.C.D.C. 1979) 474 F.Supp. 64, 75, Judge Richey found a violation of 18 U.S.C. § 1510. He stated:
“When an organized group [Scientology] attempts to prevent one of its members from withdrawing from a conspiracy, surrendering to federal investigators, and detailing the criminal offenses committed by the other members of the group, plainly a violation of section 1510 is made out.”
The information possessed by both Vicki and Richard Aznaran pertains to both criminal conduct perpetrated by Scientology including the secreting of witnesses during I.R.S. investigations and the destruction of documents. Judicial enforcement of the”releases” would conflict with the intent and purpose of 18 U.S.C.
§ 1510. As was the case in Hubbard, Scientology’s attempts to judicially enforce the “releases” are further attempts to prevent witnesses or participants, including the Aznarans, from withdrawing from the conspiracies of Scientology by sealing their lips, from communicating with federal investigators and from detailing the
criminal activities of the enterprise. Moreover, where funds are provided to one with “the specific intent to buy his silence,” United States v. Lippman (6th Cir.1974) 492 F.2d 314, 318, both bribery has been perpetrated and a violation of 18 U.S.C. § 1510.5
5 Given Scientology’s tradition as set forth in various official reports and the former high rank of the Aznarans with their concomitant knowledge of Scientology’s activities, it would be consistent for Scientology to attempt to obstruct justice by attempting to silence the Aznarans. See Church of Scientology of California v. Commissioner of Internal Revenue (1984) 83 T.C. 381, 443, aff’d 823 F.2d 1310 (9th Cir.1987) [“[Scientology] has violated well-defined standards of public policy by conspiring to prevent the IRS from assessing and collecting [Footnote Con’t.]
Pursuant to 18 U.S.C. § 201(b)(3) bribery of a witness is defined, in pertinent part, as follows:
“Whoever directly or indirectly, corruptly gives, offers or promises anything of value to any person . . . with intent to influence such person to absent himself [from a trial, hearing, or other proceeding before any court, congressional committee, agency, or officer authorized to take testimony].”
18 U.S.C. § 201(c)(2), in pertinent part, defines bribery of as witness as:
Whoever directly or indirectly, gives, offers, or promises anything of value to any person . . . for or because of such person’s absence [from a trial, hearing, or other proceeding before any court, congressional committee, agency, or officer authorized to take testimony].”
The “releases” are intended to obstruct justice and suppress evidence. Only information compelled by subpoena can be disclosed and that can take place only after either one of the Aznarans”shall not make [himself/herself] amenable to service of any such subpoena in a manner which invalidates the intent of this
agreement.” Even if the federal obstruction statutes are not violated, the “release” comes so close to the line as to indisputably violate the public policy prohibiting the suppression
[Footnote Con’t.] taxes due from [Scientology].”]; United States v. Heldt (1981) 668 F.2d 1238 [Scientology criminal convictions in connection with the burglary of and conspiracy against the I.R.S.]; Allard v. Church of Scientology (1976) 58 Cal.App.3d 439, 444, 129 Cal.Rptr. 797 [Former Scientologist falsely accused of grand theft and subjected arrest and imprisonment in consequence of application of “Fair Game Policy”]; Wollersheim v. Church of Scientology, supra , 212 Cal.App.3d at 888 [Retributive conduct per the “Fair Game Policy” constitutes modern day parallel to the inquisition of the middle ages.]
of evidence of discreditable facts or criminal conduct.
It is indisputable that the violations of the releases, solely as they apply to Corydon. concern the disclosure of both discreditable facts and criminal activity orchestrated by Scientology’s leaders. It is clear that the object of the “releases” was to prevent such information from ever seeing the light of day. It is equally clear that the “consideration” for the “benefits” Scientology claims the Aznarans have received was the nondisclosure of facts which tend to both discredit Scientology and reveal that it is an organization that is, in substantial part, criminal in nature. Therefore, the “releases” which Scientology would have this Court compel enforcement by reversing Judge Ideman’s denial of preliminary injunction, are void. Similarly, the “releases” intended to prevent the Aznarans from cooperating with federal agencies investigating Scientology. Thus, the “releases” could in fact violate federal statutes prohibiting the obstruction of justice.
SCIENTOLOGY’S MOTION FOR A PRELIMINARY INJUNCTION IS EQUIVALENT TO A MOTION FOR SPECIFIC PERFORMANCE; THUS IT WAS PROPERLY DENIED
In essence, Scientology has sought judicial relief in order to compel the Aznarans’ specific performance of the alleged”releases.” Scientology would have the Court force the Aznarans to drop their lawsuit and to remain mute in relation to their knowledge of the wrongdoing of Scientology. Such would constitute specific performance of the “releases.”
Civil Code § 3423 provides that an injunction cannot be granted to prevent the breach of a contract the performance of which could not be specific
ally enforced. Scientology could never obtain specific performance of the releases at issue because, as shown above, those releases are voId.
In this regard, the California Court of Appeal stated:
“courts will not compel parties to perform contracts which have for their object the performance of acts against sound public policy either by decreeing specific performance or awarding damages for breach. [Citation.] Ordinarily, the parties to a contract, void because contrary to public policy will be left where they are, when they come to the court for relief.”
Stanley v. Robert S. Odell & Co. (1950) 97 Cal.App.2d 521, 218 P.2d 162, 169; Owens v. Haslett (1950) 221 P.2d 253, 254.
Therefore, upon this ground as well, the denial, below, of preliminary injunction sought by Scientology is justified
STANDARD OF REVIEW OF DENIAL OF PRELIMINARY INJUNCTION
A. Appellate Review Of A Preliminary Injunction Must Be Narrowly Circumscribed
The grant of a preliminary injunction is a “drastic and unusual judicial measure,” Marine Transport Lines v. Lehman (D.C.D.C. 1985) 623 F.Supp. 330, 334, and “an extraordinary and drastic remedy to be granted as an exception rather than as the rule.” Sid Berk, Inc. v. Uniroyal. Inc. (C.D.Calif.1977) 425 F.Supp. 22, 28.
“The award of such relief is not a matter of right, even though the petitioner claims and may incur irreparable injury. The matter is
addressed to the sound discretion of the Court, and absent a strong showing of need, it need not be granted. Yakus v. United States (1944) 321 U.S. 414, 440. Where an injunction may adversely affect a public interest, the Court, in its exercise of discretion, may withhold such relief even though such denial may prove burdensome and cause hardship to the petitioner.” Marine Transport, supra , at 335.
The purpose of a preliminary injunction is to preserve the status quo pending a determination on the merits. When mandatory, rather than prohibitive, relief is sought, those seeking relief must “clearly establish that a change in the status quo is warranted.” Perez-Funez v. District Director, I.N.S. (C.D.Calif.1984) 611 F.Supp. 990, 1001.
The purpose and scope of appellate review of a preliminary injunction is the propriety of its issuance:
“While the standard to be applied by the district court in deciding whether a plaintiff is entitled to a preliminary injunction is stringent, the standard of appellate review is simply whether the issuance of the injunction, in light of the applicable standard constituted an abuse of discretion.” (Emphasis Added)
Brown v. Chote (1973) 411 U.S. 452, 457, 36 L.Ed.2d 420 See also Doran v. Salem Inn, Inc. (1975) 422 U.S. 922, 931-932, 45 L.Ed.2d 648.
The Supreme Court has affirmed this standard in a case in the face of a claim wherein First and Fourteenth Amendment rights were asserted to have been implicated as the basis for “different treatment.” Synanon Foundation, Inc. v. California (1979) 444 U.S. 1307, 1308, 62 L.Ed.2d 454. The Supreme Court stated:
“[A] trial judge’s determination of a
preliminary injunction should be reversed by this Court or by other appellate courts in the federal system only when the judge’s ‘discretion was improvidently exercised.’ [Citations.]” Id. at 1307.
The Court specifically rejected arguments by the Synanon Church that review of a district court’s decision was subject to a different standard of review simply because a church contended an impact upon its Constitutional Rights.
“Applicants contend, however, that by reason of the fact that they are a church, under the First and Fourteenth Amendments to the United States Constitution they are somehow entitled to different treatment than that accorded to other charitable trusts. But we held only last Term that state courts might resolve property disputes in which hierarchical church organizations were involved in accordance with ‘neutral principles’ of state law. [Citations omitted.]” Id. at 1307-1308.
B. To Establish An Abuse Of Discretion Requires A Stringent Showing Of A Definite And Firm Conviction That The District Court Committed A Clear Error Of Judgment
Generally speaking, for the court of appeal to determine whether the District Court has abused its discretion it must:
“Consider whether the decision was based on a consideration of the relevant factors and whether there has been a clear error of judgment. . . the [reviewing] court is not empowered to substitute its judgment for that of the [district court].”
(Citizens to Preserve Overton Park, Inc. v. Volpe1971) 401 U.S. 402, 416; See, Sports Form, Inc. v. United Press International, Inc. (9th Cir.1982) 686 F.2d 750, 752. Thus, a ruling on a preliminary injunction “will not be reversed simply because the appellate court would have arrived at a different result if it had
applied the law to the facts of the case. [Citation.]”
International Moulders v. Nelson (9th Cir.1986) 799 F.2d 547, 550.
Indeed, when deciding a motion for a preliminary injunction, the District Court “is not bound to decide doubtful and difficult questions of law or disputed questions of fact.” Dymo Industries, Inc. v. Tapewriter, Inc. (9th Cir.1964) 326 F.2d 141, 143.
The standard of review for an exercise of discretion in the denial of a preliminary injunction was clearly stated by this Circuit in Chism v. National Heritage Life Insurance Co. (9th Cir.1982) 637 F.2d 1328. In Chism, the district court, in an exercise of its discretion, entered an order of dismissal against the plaintiff for failure to comply with the court’s rules. The Ninth Circuit upheld the sanction of dismissal as being within the sound discretion of the trial court. It stated:
“The rule in this circuit, often reiterated, is that the trial court’s exercise of discretion will not be disturbed unless we have ‘a definite and firm conviction that the court below committed a clear error of judgment in the conclusion it reached upon a weighing of the relevant factors. [Citations omitted.] In applying the quoted standard of review, we must remember that the district court, not this court, exercises the discretion.” (Emphasis added.) Id. at 1331.
Furthermore, the trial court’s findings regarding disputed facts are to be upheld unless clearly erroneous. See, J.B. Williams Company, Inc. v. Le Conte Cosmetics, Inc. (9th Cir.1975) 523 F.2d 187; Fabrege Inc. v. Saxony Products, Inc. (9th Cir. 1979) 605 F.2d 426. Therefore, provided that the District Court has not based
its decision to deny a preliminary injunction “on a clearly erroneous finding of fact” Zepeda v. United States I.N.S. (9th
Cir.1983) 753 F.2d 719, 725, such that “the reviewing court on the entire evidence is left with the definite and firm conviction that a mistake has been committed” United States v. United States Gypsum Co. 333 U.S. 364, 395, the reviewing court is “bound by the district court’s resolution of conflicting evidence and other
findings of fact.” Jones v. Pacific Intermountain Express (9th Cir.1976) 536 F.2d 817, 818.
C. Review Of A Preliminary Injunction Does Not Serve The Purpose Of A Preliminary Adjudication Of The Merits Of A Case
The Ninth Circuit has noted that review of a preliminary injunction is much more limited than review of a permanent injunction:
“Our review of the district court at this stage of the proceeding is very limited. . .. The district court’s grant of the injunction must be affirmed unless the court abused its discretion or based its decision on an erroneous legal standard or on clearly erroneous findings of fact.”
Apple Computer, Inc. v. Formula Intern, Inc. (9th Cir.1984) 725 F.2d 521, 523; Accord, S.E.C. v. Carter Hawley Hale Stereo, Inc. (9th Cir.1985) 760 F.2d 945; Miss Universe, Inc. v. Fisher (9th Cir.1979) 605 F.2d 1130, 1133-1134, 1135 fn. 5.
A preliminary injunction is merely “an equitable tool for preserving rights pending final resolution of the dispute.” Sierra On-Line v. Phoenix Software. Inc. (9th Cir.1984) 739 F.2d 1415, 1423. Thus, appellate review:
“of an order granting or denying a preliminary injunction is therefore much more limited than review of an order involving a permanent injunction where all conclusions of law are
freely reviewable.” (Emphasis added.)
Sports Form, supra , 686 F.2d at 752.
The Supreme Court has stated:
“Preliminary injunctions are appealable to protect litigants from the potential irreparable consequences of erroneously issued injunctions, not to give litigants a preliminary opportunity to appeal their cases on the merits.” (Emphasis added.)
Carson v. American Brands. Inc. (1981) 450 U.S. 79, 83-86, In fact, “where the granting of a preliminary injunction would give to a plaintiff all the actual advantage which he could obtain as a result of a final adjudication of the controversy in his favor, a motion for a preliminary injunction ordinarily should be
denied.” Kass v. Arden-Mayfair. Inc. (C.D.Calif.1977) 431 F.Supp. 1037, 1041.
Unless the reviewing court is left with a definite and firm conviction that the trial judge made a clear error of judgment such as to render the discretionary denial of a preliminary injunction clearly unreasonable, the trial court’s denial of a preliminary injunction must be upheld.
D. The Reviewing Court May Reverse The Denial Of A Preliminary Injunction Only For An Abuse Of Discretion In Any Of Three Ways
The grant or denial of a motion for a preliminary injunction lies within the discretion of the District Court and will be reversed only if the District Court abused its discretion. Wright v. Rushen (9th Cir.1981) 642 F.2d 1129, 1132. A district judge may abuse his discretion in any of three ways:
“(1) he may apply incorrect substantive law or an incorrect preliminary injunction standard; (2) he may rest his decision to grant or deny a preliminary injunction on a clearly erroneous finding of fact that is material to the decision to grant or deny the injunction; or (3) he may apply an acceptable preliminary injunction standard in a manner that results in an abuse of discretion.” Zepeda, supra . 753 F.2d at 724.
Thus, a district court’s order is reversible for legal error if the court failed to employ the appropriate legal standards which govern the issuance of a preliminary injunction or, if in applying the appropriate standards, the court failed to apply the proper law in connection with the underlying issues in the litigation.
Finally, where the court’s decision on the preliminary injunction is based upon a clearly erroneous finding of fact, it is reversible. Id. at 724-725; Accord, Chalk v. United States District Court (9th Cir.1988) 840 F.2d 701, 704. Legal issues underlying the preliminary injunction decision are reviewed de novo. Republic of Philippines v. Marcos (9th Cir.1987) 818 F.2d 1473, 1478.
E. The District Court Standard For The Determination Of A Preliminary Injunction
In the Ninth Circuit, a party seeking a preliminary injunction must meet one of two tests. Under the first test, the court may issue a preliminary injunction if it finds that:
“(1) the [moving party] will suffer irreparable injury if injunctive relief is not granted, (2) the [moving party] will probably prevail on the merits, (3) in balancing the equities, the [non-moving party] will not be harmed more than [the moving party] is helped by the injunction, and (4) granting the injunction is in the public interest. [Citation omitted.]”
Alternatively under the second test:
“A court may issue a preliminary injunction if the moving party demonstrates ‘either a combination of probable success on the merits and the possibility of irreparable injury or that serious questions are raised and the balance of hardships tips sharply in his favor. [Citation omitted.] Under this last part of the alternative test, even if the balance of hardships tips decidedly in favor of the moving party, it must be shown as an irreducible minimum that there is a fair chance of success on the merits. [Citation omitted.] There is one additional factor which we must weigh. In cases … in which a party seeks mandatory preliminary relief that goes well beyond maintaining the status quo pendente lite, courts should be extremely cautious about issuing a preliminary injunction. [Citation omitted.]”
Martin v. International Olympic Committee (9th Cir.1984) 740 F.2d 670, 674-675. The two formulations of the alternative test”represent two points on a sliding scale in which the required degree of irreparable harm increases as the probability of success decreases [Citation.] Under any formulation of the test, there must be a demonstration that there “exists a significant threat of irreparable injury.” Oakland Tribune, Inc., supra . 762 F.2d at 1376.
Also, in certain cases, “the public interest is an important factor.” Lopez v. Heckler (9th Cir.1984) 725 F.2d 1489, 1498, vacated on other grounds 463 U.S. 1328, 83 L.Ed.2d 694 (1984).
THE DISTRICT COURT PROPERLY DENIED THE PRELIMINARY INJUNCTION
A. Scientology’s 17 Month Delay In Seeking Injunctive Relief Precludes A Finding That Any Harm It Claims Is Irreparable
A preliminary injunction is an “an exceptional remedy [to be] granted only in exceptional circumstances where its compulsory quality is appropriate.” In re Talmadge (N.D. Ohio 1988) 94 B.R. 451, 454. It is sought upon the theory
“that there is an urgent need for speedy action to protect the plaintiff’s rights. By sleeping on its rights a plaintiff demonstrates the lack of need for speedy action and cannot complain of the delay involved pending any final relief to which it may be entitled after a trial of all the issues.”
Gillette Company v. Ed Pinaud, Inc. (S.D.N.Y. 1959) 178 F.Supp. 618, 622; Citibank, N.A. v. Citytrust (2d Cir.1985) 756 F.2d 273, 276. Thus, party resisting a motion for a preliminary injunction may argue that the lapse of time between the filing of an action and moving therein for a preliminary injunction indicates an absence of any injury that is irreparable. In order to be effective, such delay need not rise to the level required to assert the equitable defense of laches.
“Although a particular period of delay may not rise to the level of laches and thereby bar a permanent injunction, it may still indicate an absence of the kind of irreparable injury required to support a preliminary injunction.”
Id. 756 F.2d at 275-276. In Majorica, S.A. v. R.H. Macv & Co., Inc. (2d Cir. 1985) 762 F.2d 7, a case trademark infringement case, plaintiff sought to enjoin certain conduct of defendant concerning
which it had been aware at the time it filed its lawsuit. It waited seven months before moving for a preliminary injunction. Reversing the district court’s grant of a preliminary injunction, the Second Circuit found even though there was not a defense of laches, plaintiff had not been entitled to a preliminary injunction. It
“Lack of diligence, standing alone, may, however, preclude the granting of preliminary injunctive relief, because it goes primarily to the issue of irreparable harm . . ..”
Id. 762 F.2d at 8.
In Le Sportsac. Inc. Dockside Research, Inc. (1979 S.D.N.Y.) 478 F.Supp. 602, plaintiff delayed nearly one year before seeking relief by way of preliminary injunction. The trial court stated”[d]elay of this nature undercuts the sense of urgency that ordinarily accompanies a motion for preliminary relief and suggests there is, in fact, no irreparable injury.” Id. 478 F.Supp. at 609. See, Manhattan Citizens’ Group, Inc. v. Bass (S.D.N.Y. 1981) 524 F.Supp. 1270, 1275 [Deprivation of constitutional rights failed to overcome unjustified delay in seeking preliminary injunction.]; Programmed Tax Systems, Inc. v. Raytheon Co. (S.D.N.Y. 1976) 419
F.Supp. 1251, 1255 [Ten week delay after commencement of action “evidences a lack of irreparable injury and constitutes a separate ground” for denial of preliminary injunction.]; Marine Electric Railway v. New York City Transit Authority (E.D.N.Y. 1982) 17 B.R. 845, 856 [Three month delay in bankruptcy proceeding before seeking preliminary injunction: “Such a delay negates the very purpose for which an injunction serves.”]; National Customs Brokers and
Forwarders v. U.S. (CTT 1989) 723 F.Supp. 1511, 1517 [While plaintiff’s exhaustion of alternative remedies “cannot be faulted the court is not convinced that each step towards a preliminary injunction has been pursued at a pace consistent with a necessity for immediate action to prevent further harm.”]
The Ninth Circuit applies the same rule. In Lydo Enterprises, Inc. v. City or Las Vegas (9th Cir.1984) 745 F.2d 1211, this Circuit held that a “delay in seeking a preliminary injunction is a factor to be considered in weighing the propriety of relief. . . By sleeping on its rights a plaintiff demonstrates the lack of need
for speedy action. [Citation omitted.]” Id. at 1213. Thus, a plaintiff’s “long delay before seeking a preliminary injunction implies a lack of urgency and irreparable harm.” Oakland Tribune Co. v. Chronicle Publishing Co. (9th Cir.1985) 762 F.2d 1374, 1377.
1. Scientology’s Contentions Of Irreparable Injury Submitted In Support Of Its Motion For A Preliminary Injunction
Scientology, in its “Brief for Appellants”, asserts that it suffers irreparable injury for the following reasons:
The instant litigation implicates what Scientology describes as “complex ecclesiastical issues, going to the truth or falsity of defendant’s religious practices and beliefs.” (Appellants’ Brief at 3 3.)
“Litigation of such issues as religiosity, the truth or falsity of religious doctrine, and the propriety of peaceful and voluntary religious practices would constitute a highly intrusive entanglement of the court in ecclesiastical matters” in violation
of Scientology’s contention it is entitled to First Amendment protection; (Appellants Brief at 33.) 6
That the instant lawsuit constitutes “harassing litigation”, a deterrent to the exercise of First Amendment rights. 7
However, Scientology’s contentions that it suffers such harms, which have now become “irreparable,” in consequence of the pendency of this lawsuit, have been made from the outset. Each legal contention submitted by Scientology in this appeal as the basis for its claim to irreparable harm was submitted in written arguments during the initial stages of this lawsuit in June 1988.
2. Scientology Submitted Similar Or The Same Contentions In The Proceedings Below 17 Months Before Moving For A Preliminary Injunction
On June 20, 1988, Scientology filed its “Notice of Motion and
6 In support of this claim, Scientology cites the following cases in pages 33-35 its brief herein: Walz v. Tax Commission (1970) 397 U.S. 664, 675; Lemon v. Kurtzman (1971) 403 U.S. 602, 620, 624-35; NLRB v. Catholic Bishop of Chicago (1979) 440 U.S. 490, 502; Surinach v. Pesquera de Busquets (1st Cir.1979) 604 F.2d 73; Maness v. Meyers (1975) 419 U.S. 449, 460; Buckley v. Valeo (1976) 424 U.S. 1, 64; Watkins v. United States (1957) 354 U.S. 178, 197; Cantwell v. Connecticut (1940) 310 U.S. 296; Everson v. Board of Education (1947) 330 U.S. 1, 16.
7 In support of this claim in its appellants’ brief Scientology cites the following cases: Franchise Realty Interstate Corp v. San Francisco Local Joint Executive Board (9th Cir. 1976) 542 F.2d 1076; Time, Inc. v. Hill (1967) 385 U.S. 374, 387-391; New York Times v. Sullivan (1964) 376 U.S. 254, 267-83; N.A.A.C.P. v. Button (1963) 371 U.S. 415, 431-433; Deader’s Digest Ass’n v. Superior Court (1984) 37 Cal.3d 252; Sipple v. Chronicle Publishing Co. (1984) 154 Cal.App.3d 1045; Hydro-Tech Corp. v. Sunstrand Corp. (10th Cir.1982) 673 F.2d 1171; Herbert v. Lando (S.D.N.Y. 1985) 603 F.Supp. 983, 989; Barry v. Time, Inc. (N.D.Cal. 1984) 584 F.Supp. 1110, 1121; Miller & Sons Paving, Inc. v. Wrightstown Civic Assoc. (E.D.Pa. 1978) 443 F.Supp. 1268, 1273.
Motion to Dismiss Complaint” (Record No. 50) wherein it contended it was a religion whose “religiosity” could not be adjudicated and cited Surinach v. Pesquera de Busquets (1st Cir. 1979) 604 F.2d 73, 78; Lemon v. Kurtzman, supra. (Record No. 50 at 9) In its Motion to Dismiss, from pages 6 to 27 of that motion Scientology submitted a lengthy argument wherein, citing Walz v. Tax Commission, supra, Everson v. Board of Education, supra, Lemon v. Kurtzman, supra,N.A.A.C.P. v. Button, supra, NLRB v. Catholic Bishop, supra, New York Times v. Sullivan, supra, Time, Inc. v. Hill, supra, Sipple v. Chronicle Publishing Co., supra, it contended that the Aznarans’ lawsuit was not justiciable on the following grounds:
- Because it involved a dispute between a church and its members;
- Because it impermissibly sought to impose tort liability of a religion;
- Because tort liability could not be imposed on the basis of church discipline;
- Because liability could not be imposed on the basis of brainwashing by church; 8
On August 15, 1988, Scientology filed a Rule 11 Motion for Sanctions (Record No. 85) wherein at page 24 it stated:
“A quick perusal of plaintiffs’ complaint and the opposition to dismissal reveals outrageous and vilifying charges against the defendant religious organizations as well as the assertion of massive financial liability. . . Accordingly it was foreseeable that a vigorous
8 On September 6, 1988, the District Court denied Scientology’s motion to dismiss in its entirety. (Record No. 102.)
and costly defense would be and indeed has been aroused against plaintiffs’ admittedly false allegations.” (emphasis added.)
On September 19, 1988, Scientology filed its Reply in support of its Rule 11 Motion where at page 29 it stated:
“included … in plaintiffs’ complaint are outrageous and inflammatory allegations regarding the defendants which would which would trigger a vigorous and costly defense . . . [including] allegations that the sole purpose of the defendant organizations was to make money . . . The significance of such a charge goes to the very heart of defendants1 First Amendment defenses to this entire litigation, as the defendants are religious entities who perform myriad religious services for their members. . . . Defendants . . . [argue] that the complaint must be dismissed because, inter alia, its adjudication would violate the First Amendment by invariably entangling the Court into a forbidden determination of solely religious concerns.” (emphasis added.) (Document No. 113) 9
On December 20, 1988, Scientology filed its “Defendants’ Opposition To Ex Parte Application For A Temporary Stay Of Proceedings” (Record No. 153) wherein, citing Franchise Realty Interstate Corp. v. San Francisco Joint Executive Board, supra . 542 F.2d at 1082, on page 8 it stated:
“In addition, defendants are prejudiced by plaintiffs’ continued delay in bringing this action to resolution. Moveover, the mere pendency of claims impacting heavily on defendants1 First Amendment rights cause prejudice to defendants. … In Franchise Realty, the court warned that where a case poses the threat of ‘the long drawn out process of discovery’ which can be ‘harassing and expensive,’ added to a large damage claim,
9On October 25, 1988, the District Court denied Scientology’s Rule 11 motion for sanctions. (Record No. 133.)
the action becomes ‘a most potent weapon to deter the exercise of First Amendment rights.’
Id. at 1082.” (emphasis added.)
At the time Scientology first raised the foregoing arguments, the harm it then claimed to suffer was not such as to move it to seek injunctive relief.10 At the time Scientology’s answers and counterclaims were filed, it did not seek injunctive relief despite the fact it was on notice as to the harms it now claims are
irreparable. Appellees submit if the harm was not then irreparable, it is less so now.
3. The Duration Of Scientology’s Delay Belies Any Claim Of Irreparable Harm
Scientology first noticed the depositions of the Aznarans on June 1, 1988. Thereafter, it commenced its “vigorous defense” with a consistent barrage of motions attacking the both substance of the Aznarans7 complaint and the facts upon which it is based. As set forth above, from the outset, Scientology was aware of the nature of the harm relief for which it now claims the District Court improperly denied a preliminary injunction.
Scientology delayed seeking a preliminary injunction until November 9, 1989, almost one and one-half years after it commenced litigating its defense of the suit. In light of the fact, according
10In fact, when Religious Technology Center, Church of Spiritual Technology and Church of Scientology International filed their answers and counterclaims they pleaded their first causes of action on the Aznarans’ alleged breach of the “releases”; their second causes of action are based on the Aznarans’ contacts with Joseph Yanny, reporters from the Los Angeles Times. Bent Corydon, Jerold Fagelbaum and agent of the I.R.S. (Document No. 110 at 20-22 [Religious Technology Center]); (Document No. Ill at 20-23 [Church of Scientology International]); (Document No. 112 at 19-21 [Church of Spiritual Technology])
to Scientology’s own arguments, it was aware of the “harm” it alleges to be manifest in the Aznaran lawsuit, and in light of the fact that it failed to seek injunctive relief for 17 months, Scientology’s delay was, and is, not reasonable. Scientology’s delay eviscerates the legitimacy of the irreparable harm it has now decided to claim.
Simply, Scientology resorted to the legal technique wherein it sought preliminary injunctive relief only after its resort to other legal techniques had failed. Failing to win may hurt, but it is not irreparable injury.
B. Scientology’s Claim Of Religious Status Does Not Preclude The Imposition Of Legal Accountability
Scientology contends it suffers irreparable harm because the instant lawsuit allegedly implicates a number of asserted rights. However, in so doing, Scientology has overlooked the legal fact of life that, like everybody else in our civilized society, it is subject to State Control in relation to the Torts it commits.
The First Amendment to the United States Constitution provides that “Congress shall make no law respecting an establishment of religion, or prohibiting the free exercise thereof . . .” The provision creates two very different protections. The “establishment clause” guarantees the government will not impose religion on us; the “free exercise” clause guarantees the government will not prevent us from freely pursuing any religion we choose. Molko v. Holy Spirit Association, supra . 46 Cal.3d at 1112.
The religion clauses protect only claims rooted in religious belief. Wisconsin v. Yoder (1972) 406 U.S. 205, 215, 32 L.Ed.2d 15.
The free exercise clause protects religious beliefs absolutely. Cantwell v. Connecticut (1940) 310 U.S. 296, 303-304, 84 L.Ed. 1213. While a court can inquire into the sincerity of a person’s religious beliefs, it may not judge the truth or falsity of those beliefs. United States v. Ballard (1944) 322 U.S. 78, 86-88, 88 L.Ed. 1148. The government may neither compel affirmation of religious belief Torasco v. Watkins (1961) 367 U.S. 488, 495, 6 L.Ed.2d 982, nor penalize or discriminate against individuals or groups because of their religious beliefs Fowler v. Rhode Island (1953) 345 U.S. 67, 70, 97 L.Ed. 828, nor use the taxing power to inhibit the dissemination of particular religious views. Murdock v. Pennsylvania (1943) 319 U.S. 105, 116, 87 L.Ed. 1292.
However, while religious belief is absolutely protected, religiously motivated conduct is not. Sherbert v. Verner (1963) 374 U.S. 398, 402-403, 10 L.Ed.2d 965; People v. Woody (1964) 61 Cal.2d 716, 718, 40 Cal.Rptr. 69. Such conduct “remains subject to a regulation for the protection of society.” Cantwell, 310 U.S. at 3 04. Thus, “while the free exercise clause provides absolute protection for a person’s religious beliefs, it provides only limited protection for the expression of those beliefs and especially actions based upon those beliefs. Wollersheim 212 Cal.App.3d at 884.
Government action burdening religious conduct is subject to a balancing test, in which the importance of the state’s interest is weighed against the severity of the burden imposed on religion. Yoder, 406 U.S. at 214. The greater the burden imposed on religion,
the more compelling must be the government interest at stake. Molko. 46 Cal.3d at 1113.
Unwitting exposure to coercive persuasion, even when occurring in a context claimed to be religious, justifies the imposition of tort liability. There is a substantial threat to public safety, peace and order posed by the fraudulent induction of unconsenting individuals into an atmosphere of coercive persuasion. Id. at 1118.
Many individuals exposed to coercive persuasion:
“develop serious and sometimes irreversible physical and psychiatric disorders, up to and including schizophrenia, self-mutilation and suicide. [Citation.] The state clearly has a compelling interest in preventing its citizens from being deceived into submitting unknowingly to such a potentially dangerous process. [f] The state has an equally compelling interest in protecting the family institution [Citations] . . . [which] almost invariably suffers great stress and sometimes incurs significant financial loss when one of its members is unknowingly subjected to coercive persuasion….” Ibid.
The court in Wollersheim decided that even if the “retributive conduct” known as “fair game” was a core practice of Scientology, it did not merit constitutional protection. The Wollersheim court reasoned that “fair game” was to the core of Scientology religious practice in Scientology in a similar way that “centuries ago the
inquisition was one of the core religious practices of the Christian religion in Europe.” Wollersheim 212 Cal.App.3d at 888.
“[T]here are some parallels in purpose and effect. ‘Fair game’ like the ‘inquisition’ targeted ‘heretics’ who threatened the dogma and institutional security of the mother church. Once ‘proven’ to be a ‘heretic, ‘ an individual was to be neutralized. In medieval times neutralization often meant
incarceration, torture and death. [Citations.] As described by the evidence in this trial, the ‘fair game’ policy neutralized the ‘heretic’ by stripping this person of his or her economic, political and psychological power. [Citation.]” Ibid.
The court stated that if such conduct were to, in fact, “qualify as ‘religious practices’ of Scientology … we have no problem concluding the state has a compelling secular interest in discouraging these practices.” Id. 212 Cal.App.3d 890-891
The Wollersheim court also held that the process of “auditing”11 was not constitutionally protected when conducted under threats of economic, psychological and political retribution. An atmosphere of coercion constructed on the threat of “fair game” if one were to “defect,” the threat of imposition of a “freeloader debt”12 and physical coercion stripped “auditing” of any constitutional protection that it might enjoy were it voluntarily practiced. Id. at 893-894.
Wollersheim, like Vicki Aznaran in this case, was assigned to “Rehabilitation Project Force.” While on Rehabilitation Project
11“Auditing” is a one-on-one process between a Scientology “auditor” and a Scientology student. The student is connected to a crude lie-detector, called an “E-Meter.” The auditor asks probing questions and notes the student’s questions as registered on the E-Meter. Wollersheim. 212 Cal.App.3d at 891.
12 When a Scientology staff member received courses, training or auditing, it was at a reduced rate of payment. If the person later were to leave Scientology, he would be presented with a bill for the difference between the staff rate and the public rate. A five-year member of Scientology could easily accumulate a “freeloader debt” of between $10,000 and $50,000. Wollersheim 212 Cal.App.3d at 894. “The threat of facing that amount of debt represented a powerful economic sanction acting to coerce continued participation in auditing …” Ibid.
Force, Wollersheim’s regime commenced at 6:00 a.m. and concluded at 1:00 a.m. It included menial and repetitive work in the morning, study in the afternoon and meetings in the evenings. When he slept, it was in a ship’s “hole.” Wollersheim subjected himself to
“auditing because of the coercive environment with which Scientology has surrounded him. To leave the church or to cease auditing he had to run the risk he would be become a target of ‘fair game’, face an enormous burden of ‘freeloader debt’, and even confront physical restraint.”
Id. 212 Cal.App.3d at 895. When a religious practice takes place in the context of such coercion, it enjoys “less religious value” than were it engaged in voluntarily. More significantly, “it poses a greater threat to society to have coerced religious practices inflicted on its citizens.” Ibid.
The facts pertaining to the Aznarans in the instant case and the facts set forth in Wollersheim have more in common with one another than not. In Wollersheim. as well as in the instant case, Scientology raised a “fundamental constitutional challenge to this entire species of claims against Scientology.” Wollersheim, 212 Cal.App.3d at 880. In the instant case, as in Wollersheim, Scientology’s constitutional challenge must be rejected.
C. Scientology’s Constitutional Challenge To The Aznaran Suit
In essence, Scientology asserts certain constitutional claims as the basis for its assertion of irreparable injury. It contends that the district court “erred as a matter of law in finding no injury as a result of the pendency of this lawsuit and the attendant threat to First Amendment rights.” (Appellant’s Brief at
Scientology claims the Aznarans’ suit causes injury of an irreparable nature because it (1) will not be able to “unring the bell” of improper disclosure of the practices and beliefs of Scientology; (2) the case involves complex ecclesiastical issues, going to the truth or falsity of defendants’ religious beliefs and practices; (3) the case is an intrusive entanglement of the court in ecclesiastical matters such as the propriety of peaceful and voluntary religious practices and the truth or falsity of religious doctrine; (4) the case is an invasion of privacy of the religious beliefs and practices of all Scientologists; (5) the case will have a chilling effect upon religious practice by Scientologists and an adverse effect on religious proselytizing; and (6) will constitute an unconstitutional breach of the “wall of separation” between church and state.
In light of Molko, Wollersheim and the principles of First Amendment jurisprudence upon which those cases are built, the cases upon which Scientology predicates its foregoing claims are not controlling and provide little, if any, guidance.
Scientology raises the concern that it will be impossible to “unring the bell” of improper disclosure of its practices and beliefs. However, as discussed above in Section VI,B, above, Scientology is not immunized from accountability for the consequences of its coercive practices. Indeed, there is a compelling state interest in preventing citizens from being exposed to religious coercion which justifies the state’s restriction of
Scientology’s conduct. Maness v. Meyers (1975) 419 U.S. 449, 42 L.Ed. 2d 574 does not support the creation of an immunity for Scientology. That case held that a lawyer may not be held in contempt for advising his client to refuse to produce documents in a civil proceeding that in good faith the lawyer believed would incriminate his client and the “bell” in that case that could not have been unrung would have been material protected by the Fifth Amendment privilege against self-incrimination.
For similar reasons, Scientology cannot take shelter behind the rubric wherefrom it asserts a claim of violation of “the privacy of the religious beliefs and practices of all Scientologists.” (Opening Brief at 34.) The Wollersheim court noted society has an interest in eliminating Scientology’s imposition of coercive religious practices on its citizens. Such a compelling interest overrides the above-mentioned ambiguous and broad claim to “privacy.” Buckley v. Valeo (1976) 424 U.S. 1, 64, 46 L.Ed.2d 659 does not help. Buckley pertains to the principle that compelled disclosure of names of political contributors “can seriously infringe on the privacy of association and belief guaranteed by the First Amendment.” Id. 424 U.S. at 60. However, as here, “a compelling public need that cannot be met in a less restrictive way will override those interests.” Nixon v. Administrator of General Services (1977) 433 U.S. 425, 467, 53 L.Ed.2d 867. The Molko court held “[a]fter careful consideration, we perceive no less restrictive alternative [to suing] available.” Molko 46 Cal.3d at 1118-1119. At 212 Cal.App.3d at 879, the Wollersheim court held:
“the state has a compelling interest in allowing its citizens to recover for serious emotional injuries they suffer through religious practices they are coerced into accepting. Such conduct is too outrageous to be protected under the constitution and too unworthy to be privileged under the law of torts.”
When Scientology contends that this lawsuit imposes a chilling effect upon religious practice by members and its proselytizing, it cites Watkins v. United States (1957) 354 U.S. 178, 197, 1 L.Ed.2d 1273 and Cantwell v. Connecticut, supra . Apparently, Scientology takes the position that any testimony about its practices will subject it to “public stigma.” Watkins 354 U.S. at 197. Simply because there may be a chance that Scientology will suffer stigmatization, due to its forcing its religion upon citizens such as the Aznarans, does not justify an abrogation of the victim’s right to seek redress by lawsuit. If Scientology wants to avoid the stigma attached to the public dissemination of its outrageous and coercive practices, it should stop them. The answer is not to cloak such practices in secrecy so that under the claim of religion Scientology can continue to abuse the rights of others.
Finally, Scientology appears to want to maintain a “wall of separation” between church and state that is absolute. Scientology’s wall would preclude the state from imposing any limitations whatsoever on the nature and extent of whatever conduct in which Scientology chose to engage. In two hypothetical questions the Wollersheim court succinctly disposed of a similar postulation:
“This religious practice [the inquisition] involved torture and execution of heretics and miscreants. [Citation.] Yet should any church
seek to resurrect the inquisition in this country under a claim of free religious expression, can anyone doubt the constitutional authority of an American government to halt the torture and executions? And can anyone seriously question the right of the victims of our hypothetical modern day inquisition to sue their tormentors for any injuries – physical or psychological – they sustained?”
Wollersheim 212 Cal.App.3d at 888. The framing of the questions communicates their answer. In fact, the logical conclusion of Scientology’s postulation would be “a diminution of the state’s power . . . [such] that there would soon cease to be that separation of church and state underlying the concept of religious liberty.” Gospel Army v. Los Angeles (1945) 27 Cal.2d 232, 163 P.2d 704, 712.
D. Scientology Is Not A Prima Facie Religion Entitled To Automatic Protection Under The First Amendment
“Initial characterizations of conduct are important, if not dispositive, within the First Amendment realm.” International Society for Krishna Consciousness. Inc. v. Barber (2nd Cir. 1981) 650 F.2d 430, 438. The First Amendment does not immunize an organization from governmental authority or cloak it in utter secrecy simply because it ascribes religious status to itself. In fact, courts should be “cautious in expanding the scope of [religious] protection since to do so might leave the government powerless to vindicate compelling state interests.” McDaniel v. Paty (1978) 435 U.S. 618, 627, fn. 7, 55 L.Ed.2d 593.
In order to merit bona fide religious status, the religious beliefs in question must be held in a manner that is “sincere.”
United States v. Seeger (1965) 380 U.S. 163, 166, 13 L.Ed.2d 733. Under this “sincerity” standard, courts have not been willing to accept bare assertions by litigants that their beliefs or conduct are “religious.” See, International Society for Krishna Consciousness, Inc. v. Barber, supra; United States v. Kuch (D.D.C. 1968) 288 F.Supp. 439; Van Schaick v. Church of Scientology of California (D.Mass.1982) 535 F.Supp. 1125. When embarking on an evaluation of the bona fides of an organization claiming it is religious, the court initially looks to the purpose of the underlying constitutional safeguard. “The free exercise of religion promotes the inviolability of individual conscience and voluntarism, recognizing that private choice, not . . . coercion, should form the basis for religious conduct and belief.” (Emphasis added.) Krishna Consciousness 650 F.2d at 438.
In Founding Church of Scientology v. United States (D.C.Cir.1969) 409 F.2d 212, the court noted that “[l]itigation of the question whether a given group or set of beliefs is religious is a delicate business, but our legal system sometimes requires it so that secular enterprises may not unjustly enjoy the immunities granted to the sacred.” Id. at 1160. The Founding Church court concluded that a purported religion would not be entitled to protection under the First Amendment upon a showing that”. . . the beliefs asserted to be religious are not held in good faith by those asserting them, and that forms of religious organizations were created for the sole purpose of cloaking a secular enterprise with the legal protection of a religion.”Id. at 1162. Moreover, in Theriault v. Silber (W.D. Texas 1987) 453
F.Supp. 25, the court indicated that criminal conduct by members of a purported religion may trigger “sharp and careful scrutiny of [their] activities, including [their] claim of religious sincerity.” Id. at 259.
The court in Wollersheim noted that the ”specific issue of whether Scientology is a religion . . . remains a very live and interesting question.” Id. 212 Cal.App.3d at 887. See, Founding Church of Scientology v. Webster (D.C.Cir.1986) 802 F.2d 1448, 1451 [“whether Scientology is a religious organization, a for profit private enterprise, or something far more extraordinary [is] an intriguing question that this suit does not call upon us to examine. . ..”].
Thus, for the purposes of this appeal the Court ought not to automatically confer religious status upon Scientology simply because it asserts it is, prima facie, a religion. See, Opposition To Defendants’ Motion To Dismiss Complaint (Document No. 65. at 2-17) [“Scientology is essentially a profit-driven business enterprise” engaged in quackery and criminal activity]. Its lust for money and coercion of its members’ free choice caution against too readily expanding the scope of First Amendment protection to include such conduct.
E. Scientology Is Not Likely To Succeed On The Merits
Scientology’s conduct as to the Aznarans, as described above in Section II.B, is medieval and of the same nature as the conduct described in Wollersheim. Under the facts set forth in this case, Scientology developed deception, coercion, overreaching and unfair
conduct into a formula whose equation would be a phenomenal escape from accountability – both to the Aznarans and to other victims whom the Aznarans could assist if they are not silenced. The “releases” were the final end point of Scientology’s formula for coercion which for 15 years it imposed upon the Aznarans. Having abused and harmed the Aznarans, Scientology then sought to silence them for life. Scientology has not stopped trying.
The Aznarans were under a misapprehension as to the nature and scope of the releases in that they understood the releases as the only means by which they could escape Scientology’s inquisition. Such an understanding was induced by the misconduct of Scientology.
The Aznarans did not intend:
(1) To release Scientology from legal liability for the egregious torts Scientology has perpetrated against them;
(2) To allow Scientology to chill, if not silence, their First Amendment right to speak by a “gag order” [which Scientology would then ask the court to enforce];
(3) To allow Scientology to dictate with whom they choose to associate and speak;
(4) To allow Scientology to prevent them from giving aid, comfort, and support to other victims of Scientology, including those who are bitterly locked in Scientology-style litigation;
(5) To bargain with Scientology about anything other than the chance to escape without being declared suppressive persons and subjected to retribution and the fair game policy.
Scientology has failed to demonstrate that it is likely to
succeed to establish that the releases are either valid or enforceable. The releases that Scientology would enforce are not even the releases that the Aznarans signed. For months after they signed whatever it was that Scientology had them sign the Aznarans repeatedly requested copies of the agreements. Those requests fell
on dead ears. Since Richard Aznaran on many occasions requested Scientology provide him with a copy, the most likely explanation for its refusal is that the releases have been changed to suit Scientology’s claims. Moreover, such conduct “fits with their earlier modus operandi.” (Record No. 197 at 30-31.) This is an
example of fraud in the inducement. When fraud induces a person to believe that the act which he does is something other than it actually is,
“the act of the defrauded person is void because he does not know [what] he is doing and does not intend to do this act. . . Where a person is fraudulently induced to sign or indorse a bill or note in the reasonable belief that he signing something else, he cannot really be said to have made or endorsed the bill or note.”
C.I.T. Corporation v. Panac (1944) 25 Cal.2d 547, 548, 154 P.2d 710 In our case, Scientology brought intense pressure to bear on the Aznarans, who were essentially captives, for more than one week. Scientology used the threat of “fair game” to obtain from the Aznarans what it wanted. It had the Aznarans sign agreements, but wouldn’t provide any copies thereof. Subsequently, when repeatedly asked for a copy over a course of months, Scientology produced
nothing. This is a case where there is a question of fact whether there has been fraud in the inception. Under this set of facts, it
is a question of fact for the jury whether the releases Scientology claims the Aznarans signed are genuine or whether they signed something other than what Scientology says they did.
In Wetzstein v. Thomasson (1939) 34 Cal.App.2d 554, 559, 93 P.2d 1028 the court applied the doctrine of fraud in the inception to avoid a release that the plaintiff had actually read and knew what she was signing. The trial court found that the adjuster who obtained plaintiff’s signature on the release had employed “high pressure” methods, including lengthy importunities over a period of several days, to take advantage of the plaintiff’s physical and mental condition. When the adjuster obtained the signature and left plaintiff’s house, he did not leave a copy of the release with plaintiff. The court held that the adjuster “prevented the plaintiff from becoming acquainted with the character, contents and legal effect of the instrument.” In such case, there was no assent to the agreement. Thus, it was “absolutely void.” In our case the facts are quite similar and the final determination shall be for the finder of fact.
Scientology’s conduct with reference to the “releases” is subject to an estoppel. Domarad v. Fisher & Burke, Inc. (1969) 270 Cal.App.2d 543, 555, 76 Cal.Rptr. 529. It had brainwashed the Aznarans for 15 years. It knew they had no money. It held them captive at the hotel. It sequestered their belongings and pets. It security checked them for hours eight days in a row. It threatened them with “fair game.” It offered the Aznarans the loan because it wanted them to leave California immediately. It threatened “fair
game” if they failed to sign all the documents submitted to them. It concealed the relationship of consideration among the releases, insurance payment, wage payment and loan by withholding the releases on one hand and providing documentation of the loaned principal on the other. It was aware of both the releases’ substance and that the Aznarans were not so aware because it refused to give them a copy, even when they asked. Scientology intended that the Aznarans spend the loan money without being aware of either the potential obligations of the releases or, in the alternative, the potential necessity for restoration and rescission. It induced the Aznarans to act in reliance on the concealment of the relationship of consideration between the releases and the loan by directing the Aznarans to move from Southern California to Texas where the Aznarans would have to start their lives anew. Such is compulsion, not ratification.
Scientology has manipulated the Aznarans into the posture where after they spent the loan money and could not offer to restore it, Scientology gave them a copies of the purported “releases” and took the position that the loan was consideration for the release the terms of which would be effective if the loan money was not restored. They should be estopped from asserting such a claim because Scientology may not take advantage of its own misconduct.
Nonetheless, Under the circumstances extant here, it is irrelevant that the Aznarans never sought to rescind the releases. Casey v. Proctor (1963) 59 Cal.2d 97, 103 [When releaser, not due
to his own neglect, suffers misapprehension induced by misconduct of the releasee as to nature and scope of the release, the release is binding only to the extent intended by the releaser unnecessary to effect recission of release]; Jordan v. Guerra (1944) 23 Cal.2d 469, 144 P.2d 349, 352 [Where releasee causes misconception whereby contract releases claims other than those understood by releasor to be included, the release is ineffective as to misconceived claims – rescission and tender unnecessary]; Walsh v. Majors (1935) 4 Cal.2d 384, 396 [Requirement of restoration what has been received may be excused by special circumstances when on general equitable principles it would be unfair to impose such a condition].
Since the circumstances of the inception of such “releases’7 were permeated with domination, undue influence, duress, menace, fraud and violence the escape from which was the Aznarans sole cognizant consideration, they never entered into any agreement whereby they intentionally contracted away precious constitutional rights. Rather, they submitted, one last time, to Scientology’s instructions, directives and demands. The Court properly denied the injunctive relief sought by Scientology because such relief would far exceed the status quo pendente lite. The Aznarans never acted in a manner which in any way has conferred any validity on the releases. They only sought to escape Scientology. In such a circumstance, “courts should be extremely cautious about issuing a preliminary injunction.” Martin 740 F.2d at 675. Just as after the ordering of injunctive relief, a court must be vigilant to ensure
”that what it has been doing [is not] turned through changing circumstances into an instrument of wrong” Toussaint v. McCarthy (9th Cir.1986) 801 F.2d 1080, 1090, it must be careful that a motion for a preliminary injunction does not constitute an instrument of wrong at its inception (at trial or on appeal). The trial court exercised such care when it denied the motion for a preliminary injunction.
P. The Balance Of Hardships Favors The Aznarans
Were the Court to reverse the denial of a preliminary injunction, Scientology would enjoy the following benefits and the Aznarans would suffer the following hardships:
1. Scientology would protect itself from adverse exposure in the marketplace of ideas by possessing the force of a court order by which the Aznarans would be compelled to remain mute and silent about the information pertaining to Scientology that, on the basis of their long-standing affiliation with Scientology, they possess. The Aznarans would suffer a prior restraint on their First Amendment rights to Freedom of Speech, Freedom of the Press, and Freedom of Association.
2. Scientology would protect itself from its adversaries in litigation and obtain an unfair advantage therein by controlling said adversaries access to the public dissemination of the Aznarans’ knowledge through an injunctive restraint on speech. Scientology would also control any assistance the Aznarans might be able and willing to provide to its adversaries by preventing a sharing of information intended to expose the malevolent nature and
practices of Scientology. Such an order would tend to suppress evidence and thus constitute an obstruction of justice and the truth-seeking function of the courts.
3. Scientology would sequester the Aznarans from participating in the core democratic functions pertaining to any judicial, administrative or legislative proceeding in a further strategic step designed to minimize liability for harm for which it is, and should be, responsible.
4. Scientology would enjoy the opportunity to avoid accountability to the Aznarans for the consequences of its conduct. Such conduct was clearly tortious, and not subject to constitutional protection. The Aznarans would be prevented from exercising their right to obtain redress for and to be made whole from their abusive treatment at the hands of Scientology.
The only hardship that Scientology would suffer from the denial of its appeal is that it would have to be responsible to its victims, including the Aznarans, for the wrongs it has committed. In contrast, reversal would result in impermissible violations of the Aznarans’ constitutional rights. The balance of hardships tips sharply away from, not toward, Scientology.
G. An Injunction Would Harm The Public Interest
Through the relief it seeks, Scientology would silence two of its highest-ranking former members from disclosing to an interested public what they learned about the nature, beliefs and practices of this “religion.”
This would be constitutionally intolerable. “Prior restraints
on speech and publication are the least tolerable infringement on First Amendment rights.” Nebraska Press Association v. Stuart (1976) 427 U.S. 539, 559. The loss of First Amendment freedoms, even briefly, without doubt constitutes irreparable injury. Elrod v. Burns (1976) 427 U.S. 347, 373-374.
It is axiomatic “that freedom of expression upon public questions is secured by the First Amendment.” New York Times Co. v. Sullivan 376 U.S. at 269. The mark toward which the First Amendment aims is “the widest possible dissemination of information from diverse and antagonistic sources.” Associated Press v. United
States 326 U.S. 1, 20. This constitutional safeguard “was fashioned to assure unfettered interchange of ideas for the bringing about of political and social changes desired by the people.” Roth v. United States 354 U.S. 476, 484. It is the purpose of the First Amendment to “preserve an uninhibited marketplace of ideas in which truth will ultimately prevail, rather than to countenance monopolization of that market, whether it be by the Government itself or a private licensee.” (Emphasis added.) Red Lion Broadcasting Co. v. F.C.C. 395 U.S. at 390. In Kleindienst v. Mandel (1972) 408 U.S. 753 the United States Supreme Court affirmed the public constitutional interest in being able to receive information.
“In a variety of contexts this Court has referred to a First Amendment right to ‘receive information and ideas: It is now well established that the Constitution protects the right to receive information and ideas. This freedom [of speech and press] . . . necessarily protects the right to receive …. Martin v. City of Struthers (1943) 319 US 141, 143; Stanley v. Georgia (1969) 394 U.S. 557, 564″ Id. 408 U.S. at 762-763.
Were the Aznarans silenced by an injunction, not only would
their First Amendment rights be violated, but also so would the right of the public at large to receive first-hand, truthful and accurate information about Scientology.
THE APPEAL IS FRIVOLOUS AND JUSTIFIES THE IMPOSITION OF SANCTIONS
This appeal is frivolous. This is the fourth time that Scientology has litigated whether it can enforce the releases. The releases themselves, as well as Scientology’s conduct in connection with them, smack of corruption and illegality, dirty The dilatory motion for a preliminary injunction was brought 17 months after Scientology submitted identical arguments in support of other motions by means of which it hoped to eliminate the Aznaran lawsuit. Both Molko v. Holy Spirit Association, supra, and Wollersheim v. Church of Scientology, supra, conclusively establish that Scientology is the constitutionally, and morally proper subject of a lawsuit prosecuted to redress the abuses of coercion and torture. Stripped of its rhetoric, Scientology’s position in this appeal is simply frivolous and taken with a reckless disregard for the law, if not in malicious bad faith.
This court may award just damages and as much as double costs. FRAP, Rule 38. Moreover, such costs can be, and in this case should be imposed personally on counsel for the four appellant Scientology entities. 28 U.S.C. § 1927. If the Court is inclined to give serious consideration to this request, appellees respectfully request further opportunity to comprehensively set forth the facts upon which this claim is predicated.
The Aznarans have been interlocutorily hauled into this Court to litigate the same issues on which they have prevailed three times below. They respectfully submit this appeal should be denied, if not dismissed.
DATED: August _____, 1990
HUB LAW OFFICES
By: (signed) Ford Greene
Attorney for Appellees
RICHARD N. AZNARAN and VICKI J. ANZARAN
Aznaran v. church of Scientology of California, et al.
UNITED STATES COURT OP APPEALS
For The Ninth circuit
PROOF OF SERVICE
I am employed in the County of Marin, State of California. I am over the age of eighteen years and am not a party to the above entitled action. My business address is 711 Sir Francis Drake Boulevard, San Anselmo, California. I served the following documents: BRIEF FOR APPELLEES
on the following person(s) on the date set forth below, by placing a true copy thereof enclosed in a sealed envelope with postage thereon fully prepaid to be placed in the United States Mail at San Anselmo, California: SEE ATTACHED SERVICE LIST
[X] (By Mail) I caused such envelope with postage thereon fully prepaid to be placed in the united States Mail at San Anselmo, California.
[ ] (Personal I caused such envelope to be delivered by hand Service) to the offices of the addressee.
[ ] (State) I declare under penalty of perjury under the laws of the State of California that the above is true and correct.
[X] (Federal) I declare that I am employed in the office of a member of the bar of this court at whose direction the service was made.
DATED: August 22, 1990
Aznaran v. Church of Scientology of California, et al.
UNITED STATES COURT OP APPEALS
For The Ninth circuit
SERVICE LIST No. 90-55288
HONORABLE JAMES M. IDEMAN
United States District Court
Central District of California
312 North Spring Street
Los Angeles, California 90012
ERIC M. LIEBERMAN
Rabinowitz, Boudin, Standard.
Krinsky & Lieberman, P.C.
740 Broadway – 5th Floor
New York, New York 10003
MICHAEL L. HERTZBERG
740 Broadway – 5th Floor
New York, New York 10003
EARLE C. COOLEY
Cooley, Manion, Moore & Jones, P.C.
21 Custom House Street
Boston, Massachusetts 02110
KENDRICK L. MOXON
Bowles & Moxon
6255 Sunset Boulevard, suite 2000
Hollywood, California 90028
* One (1) copy of Brief for Appellees