IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA
SECOND APPELLATE DISTRICT, DIVISION FOUR
Civ. No. B 069450
(Super. Ct. No. BC 052395)
CHURCH OF SCIENTOLOGY INTERNATIONAL,
On Appeal From
Superior Court Of The State Of California
County of Los Angeles
The Honorable Ronald M. Sohigian
APPELLANT’S OPENING BRIEF1
HUB LAW OFFICES
California State Bar No. 107601
711 Sir Francis Drake Boulevard
San Anselmo, California 94960-1949
Telephone: (415) 258-0360
PAUL MORANTZ, ESQ.
P.O. Box 511
Pacific Palisades, California 90272
Attorneys for Appellant GERALD ARMSTRONG
STATEMENT OF THE CASE
On February 4; 1992, Scientology filed its verified complaint for damages and for preliminary and permanent injunction against defendant Gerald Armstrong in Marin County Superior Court Action No. 152229. On March 30, 1992 the Marin court granted Armstrong’s motion to transfer to the Los Angeles County Superior Court where it became Action No. BC 052395. During the pendency of Scientology’s motion for injunctive relief, and in order to maintain the status quo, but specifically stating there was no adjudication on the merits, the Marin Court granted a temporary restraining order (16) 1/ which was ultimately dissolved in Los Angeles.
On May 7, 1992, Scientology filed its Amended Memorandum of
1 All citations designated (___) are to the particular sequential page number of the Appendix Filed In Lieu Of Clerk’s Transcript pursuant to California Rule of Court 5.1.
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Points and Authorities in Support of Plaintiff’s Motion for Preliminary Injunction for Breach of Contract (1-29), and Armstrong filed his Opposition to Motion for Preliminary Injunction. (30-50) Scientology replied on May 20, 1992. (51-63) The matter was heard on May 26 and 27, 1992 by the Honorable Ronald M. Sohigian (RT 5/26/92 and 1594-1713) who issued a preliminary injunction by his minute order dated May 28, 1992. (1714-17) Notice of ruling was given on June 5, 1992 in conjunction with the posting of a $70,000.00 bond.
Armstrong’s Notice of Appeal was timely filed on July 30, 1992. (1728-30)
STATEMENT OF APPEALABILITY
Since this matter involves the granting of an injunction, it is the proper subject of an appeal. Code of Civil Procedure section 904.1 (f).
I. STATEMENT OF FACTS
A. Gerald Armstrong, The Scientologist
In consequence of being a member of the Scientology Organization for 12 years, Gerald Armstrong gained first-hand knowledge regarding both the nature of the organization and the methods of its day-to-day operations. Although Armstrong ultimately learned, that L. Ron Hubbard (“LRH”) was “virtually a pathological liar when it [came] to his history, background, and achievements” (474-75, 485-89, 1004, 1008-14), at the outset of his involvement it was Hubbard’s lies which induced his affiliation. (1004-08, 1067)
Armstrong learned that after inducing the affiliation of its members by various deceptions, Scientology continually “violat[ed] and abus[ed] its own members’ civil rights, . . . with its “Fair Game” doctrine [and] harass[ed] and abuse[ed] those persons not in the Church whom it perceive[d] as enemies.” (474) The “Fair Game Policy,” a part of Scientology’s system of discipline and punishment, states:
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“Enemy – SP (Suppressive Person) Order. Fair Game. May 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.”
Scientology also abused its members’ civil rights through breaching its promises that the personal information it extracted from adherents through “auditing” 2/ would be kept confidential. Instead, it used such information for the purposes of domination, extortion and blackmail. (734-74, 1039-41) Auditing was also employed to eliminate the members’ ability to critically reason, (1038, 1081), despite Scientology’s public claim that its purpose was to free individuals. (1086)
Armstrong possesses first-hand information regarding the visible structure of Scientology, and how the leadership ran Scientology through internal organizations, such as the Guardian’s Office, the Sea Organization and the Commodore’s Messenger Organization, which managed, operated and controlled all of Scientology regardless of any particular corporate designation. (475, 997, 1023-30, 1045-46). He knew that LRH’s representation to the general public and the Scientology membership that “the fees you pay for service do not go to me” was false and that LRH lived in splendor while the organization staff lived like slaves. (1032-34)
Armstrong participated in and drilled hundreds of people in
2 During the process of “auditing” in Scientology, a person being “audited,” a “penitent,” communicates to the clergyman, counselor, or therapist, the “auditor,” his innermost thoughts and relates incidents from his life which are emotionally charged, embarrassing or for which he could be blackmailed. The auditor writes down what the penitent says in “auditing reports.” The auditor demands and records details such as time and place when an incident occurred, who was present, who knew about the incident, their relationship to the penitent and their address or general location. These “auditing reports” form, along with the auditor’s notes and instructions made after the auditing sessions, the penitent’s auditing files. (1081)
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institutionalized schemes of practiced deception called “shore stories” or “acceptable truths,” which LRH claimed were required to combat the “enemy.” (1051, 1016-19, 787-88)
Armstrong was assigned to the Intelligence Bureau of the Guardian’s Office 3/ headed by LRH and his wife and then posted as LRH’s communications aide. (996) During this time he coded and decoded Guardian’s Office telexes, and maintained LRH’s operations files including those which ordered infiltration of the federal, state and local government offices, and the theft of documents. Armstrong also handled LRH’s telexes and dispatches ordering corporate manipulations which showed an absence of corporate integrity among the Scientology organizations.(1045-46)
LRH ordered Armstrong and his wife into the Rehabilitation Project Force (“RPF”), which was “a virtual prison Hubbard had created for any Sea Org members whom he considered to be in violation of or ‘counter-intention’ (“CI”) to his orders or policies.” (997; 738; 1048-49) The purpose of the RPF was to control members, who were physically held and not free to leave, break their will and obtain free labor. (740, 1050) Armstrong was imprisoned within the RPF for 17 months on one occasion and 8 months on a second. (739, 997, 999, 1048)
Armstrong personally participated in the massive destruction of evidence ordered in anticipation of a raid by the F.B.I. during which he came across LRH’s life archive. (480-81, 485-86, 1000-01) Throughout 1980 and 1981, Armstrong assembled an
3 “The Guardian’s Office is charged with the protection of Scientology. The Guardians handle intelligence matters including covert operations to acquire Government documents critical of Scientology, internal security within Scientology, and covert operations to discredit and remove from positions of power all persons whom Scientology considers to be its enemies.” United States v. Heldt (1981) 668 F.2d 1238, 1247, cert. denied (1982) 102 S.Ct. 1971. The Guardian’s Office executed tremendous control throughout all of Scientology, and until 1981, was the most powerful of LRH’s two main control lines. (1023-28)
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archive of 500,000 pages of documentation of LRH’s life, writings and accomplishments. (1003) In October 1980, LRH contracted with an independent author, Omar V. Garrison, to write his
biography. (1004) Armstrong became Garrison’s “research assistant.” (1004; 483-85)
During his biographical research, Armstrong discovered that LRH and Scientology had continuously lied about LRH’s past, credentials and his accomplishments. (486, 1008-14) As the wide gap between LRH’s claims about himself and the reality evidenced by the documentation Armstrong had assembled became manifest, he attempted to convince Scientology executives to change the biographical materials being published and disseminated about LRH so that they would be truthful. (1004; 486-87)
In response to Armstrong’s requests that Scientology tell the truth about Hubbard, a leader ordered that Armstrong be “security checked. (487) Sec checking is a brutally accusative interrogation in which the E-Meter, the electrometer used in Scientology auditing, is employed as a lie detector and tool of intimidation. Upon learning that his sec checking had been ordered, Armstrong and Jocelyn, his wife, left Scientology. (1015)
Following Armstrong’s departure, Scientology sued him, and hired private investigators who assaulted him, ran into him bodily with a car, attempted to involve him in a freeway accident, and followed and harassed him day and night for over one month. Scientology made four attempts to bring false criminal charges against him, destroyed his marriage, used his best friend to set him up in an intelligence operation, and had its members, lawyers and private investigators make false statements against him. (1053, 492-93)
B. Scientology Sues Armstrong The First Time And Loses
On August 2, 1982, Scientology sued Armstrong in L.A.S.C. No C420153 (“Armstrong I“) for conversion of certain papers which he had archived as part of the Hubbard biography project. After a
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lengthy trial, Judge Paul G. Breckenridge, Jr., filed his Memorandum of Intended Decision in Armstrong’s favor on June 22f 1984. (467) Rejecting Scientology’s effort to silence Armstrong and his counsel, (see 1202-1226), he stated:
Defendant and his counsel are free to speak and communicate upon any of Defendant Armstrong’s recollections of his life as a Scientologist or the contents of any exhibit received in evidence or marked for identification and not specifically ordered sealed. . . . defendant and his counsel may discuss the contents of any documents under seal or of any matters as to which this court has found to be privileged as between the parties hereto, with any duly constituted Governmental Law Enforcement Agency or submit any exhibits or declarations thereto concerning such documents or materials, without violating any order of this court.
(469) Judge Breckenridge found the facts presented by Armstrong to be true and incorporated Armstrong’s trial brief as an appendix to its decision. (470) He characterized Scientology as malevolent, in part because the organization “or its minions is fully capable of intimidation [of witnesses, including Armstrong] or other physical or psychological abuse if it suits their ends” (474), and provided the following factual findings:
In 1970 a police agency of the French Government conducted an investigation into Scientology and concluded “this sect, under the pretext of ‘freeing humans’ is nothing in reality but a vast enterprise to extract a maximum amount of money from its adepts by (use of) pseudo-scientific theories, by (use of) ‘auditions’ and ‘stage settings’ (lit. to create a theatrical scene’) pushed to extremes (a machine to detect lies, its own particular phraseology . . ), to estrange adepts from their families and to exercise a kind of blackmail against persons who do not wish to continue with this sect.” [footnote omitted] From the evidence presented to this court in 1984, at the very least, similar conclusions can be drawn.
In addition to violating and abusing its own members civil rights, the organization over the years with its “Fair Game” doctrine has harassed and abused those persons not in the Church whom it perceives as enemies. The organization is clearly schizophrenic and paranoid, and this bizarre combination seems to be a reflection of its founder LRH [L.
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Ron Hubbard]. The evidence portrays a man who has been virtually a pathological liar when it comes to his history, background, and achievements. The writings and documents in evidence additionally reflect his egoism, greed, avarice, lust for power, and vindictiveness and aggressiveness against persons perceived by him to be disloyal or hostile.
(Emphasis added.) (474)
In contrast to his findings regarding Scientology, Judge Breckenridge found Armstrong and his witnesses to be credible and sympathetic. He wrote:
As indicated by its factual findings, the court finds the testimony of Gerald and Jocelyn Armstrong, Laurel Sullivan, Nancy Dincalcis, Edward Walters, Omar Garrison, Kima Douglas, and Homer Schomer to be credible, extremely persuasive and the defense of privilege or justification established and corroborated by this evidence . . . In all critical and important matters, their testimony was precise, accurate, and rang true. The picture painted by these former dedicated Scientologists, all of whom were intimately involved [with the highest echelons of power in] the Scientology Organization, is on one hand pathetic, and on the other, outrageous. Each of these persons literally gave years of his or her respective life in support of a man, LRH [L. Ron. Hubbard], and his ideas. Each has manifested a waste and loss or frustration which is incapable of description.
(Emphasis added.) (473)
C. Scientology’s Attempt To Frame Michael Flynn 4/
Within four months of Judge Breckenridge’s decision, Scientology engaged in a massive “black PR” campaign against Michael Flynn which included the following operation:
The recent efforts of Hubbard and his Organization include procurement through the payment of $25,000 to an individual currently under indictment for perjury and fraud, of an affidavit claiming that I assisted in the forgery of a two million dollar check belonging to L. Ron Hubbard. The affidavit was procured by one Eugene Ingram who has been removed from the Los Angeles
4 This section is based upon the Declarations of Michael J. Flynn, Armstrong’s attorney. The Court should note that said declarations, however, were excluded from evidence. The trial court was incorrect however, because said declaration were based upon the personal knowledge of Flynn.
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Police Department for aiding narcotics dealers, pimping, and running a house of prostitution. Mr. Ingram procured the affidavit from a citizen of the United Arab Emirates after publicizing a $100,000 reward in full page advertisements in the Boston Globe, the New York Times, and other newspapers.
(1183-84) The foregoing facts were found to be accurate in the reported decision, United States v. Kattar (5th Cir. 1988) 840 F.2d 118, 119-22.
D. Scientology’s Attempt To Frame Armstrong
In 1984, after the Breckenridge decision, Scientology also attempted to set up and frame Armstrong, to “dead agent” him. As stated by Scientology in the Miller, Aznaran, and Xanthos litigation (discussed infra.)
Gerald Armstrong has been an admitted agent provocateur of the U.S. Federal Government who planned to plant forged documents in [Scientology’s] files which would then be “found” by Federal officials in subsequent investigation as evidence of criminal activity.
(1546-50; see also (1320). He had been
“plotting against … Scientology … and seeking out staff members who would be willing to assist him in overthrowing [Scientology] leadership. [Scientology] obtained information about Armstrong’s plans and, through a police-sanctioned investigation, provided Armstrong with the “defectors” he sought. On November 30, 1984, Armstrong met with one Michael Rinder, an individual whom Armstrong thought to be one of his “agents” (but who in reality was loyal to [Scientology]). In the conversation, recorded with written permission from law enforcement, Armstrong stated the following in response to questions by Mr. Rinder as to whether they had to have actual evidence of wrongdoing to make allegations in Court against [Scientology’s] leadership:
Armstrong: They can allege it. They can allege it. They don’t even have — they can allege it.
RINDER: So they don’t even have to — like — they don’t have to have the documents sitting in front of them and then–
Armstrong: Fucking say the organization destroys documents. . . . Where are the — we don’t have to prove a goddamn thing. We don’t have to prove shit; we just have to allege it.
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(Ex. E, Declaration of Lynn R. Farney, ¶ 6.) With such a criminal attitude, Armstrong fits perfectly into Yanny’s game plan for the Aznaran case.”
The “written permission from law enforcement” was fraudulent and made without authority. The bogus document was dated November 7, 1984 on the letterhead of Eugene Ingram. (1572)
By public announcement, Los Angeles Chief of Police, Daryl F. Gates, repudiated the “written permission.” In part, Chief Gates stated:
I have directed an official letter to Ingram informing him that the letter signed by Officer Phillip Rodriguez dated November 7, 1984, and all other letters of purported authorizations directed to him, signed by any member of the Los Angeles Police Department, are invalid and unauthorized.
Scientology’s allegations against Armstrong were thoroughly investigated by the Los Angeles County District Attorney’s Office and completely and soundly rejected. (1576-87)
E. The Settlement
In the Armstrong I litigation, on both the complaint and cross-complaint, Armstrong was represented by Boston attorney Michael J. Flynn, who also was Armstrong’s employer. (665) In early December 1986, an agreement was reached in Los Angeles by the Scientology Organization and Flynn to settle most of the cases in which Flynn was involved, either as counsel, or as a party. On December 5, 1986, Armstrong, along with nearly a score of other litigants adverse to Scientology – all of whom were represented by Flynn – was flown to Los Angeles to participate in a “global settlement.” (667) When Armstrong arrived in Los Angeles from Boston, he knew that settlement negotiations had been going on for months. (762) Upon Armstrong’s arrival, he was shown a copy of a document entitled “Mutual Release of All Claims and Settlement Agreement” for the first time, as well as some other documents that he was expected to sign.
When Armstrong read the settlement agreement, he was shocked
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and heartsick. The agreement betrayed everything that Armstrong had stood for in his battle opposing Scientology. (760) He told Flynn that the condition, set forth in settlement agreement ¶ 7-D, of “strict confidentiality and silence with respect to his experiences with the [Scientology organization]” was outrageous and not capable of compliance because it involved over 17 years of his life. Armstrong told Flynn that ¶ 7-D would require him to pay $50,000 if he told a doctor or a psychologist about his experiences over those 17 years, or if he put on a job resume the positions he had held while in Scientology. He told Flynn that the requirements of non-amenability to service of process in ¶ 7-H and non-cooperation with persons or organizations adverse to the organization in ¶ ¶ 7-G and 10 were obstructive of justice. Armstrong told Flynn that agreeing in ¶ 4-B to allow Scientology’s appeal of Judge Breckenridge’s decision in Armstrong I to continue without opposition was unfair to the courts and all the people who had been helped by the decision. Armstrong said to Flynn the affidavit that Scientology demanded he sign along with the settlement agreement was false. (668, 759)
Right after Armstrong first saw the document, he was told there were a number of other people with claims against Scientology who had already signed and others were being flown in to sign. (762) Flynn told Armstrong that he, and all the other lawyers, wanted to get out of the litigation because it had ruined his marriage and his wife’s health. Flynn told Armstrong that all the other witnesses upon whom later he would have to depend wanted to settle, too.
In Flynn’s presence, Eddie Walters, another litigant adverse to Scientology, yelled at Armstrong. Walters said everybody wanted out of the litigation, that Armstrong’s objections would kill the deal for all of the them, and that Armstrong’s objections didn’t matter because the settlement was bigger than he was. (762-63) Flynn did not stick up for Armstrong. (764)
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Flynn told Armstrong if he did not sign all he had to look forward to would be more years of threats, harassment and misery from Scientology, and everybody else would be very upset. Flynn advised Armstrong that the conditions of the settlement which he found offensive “were not worth the paper they were printed on” and that Scientology’s lawyers were aware of Flynn’s legal opinion and, nonetheless, wanted such language included. (759) Flynn advised Armstrong that in the event that there was further litigation against Armstrong by Scientology, Flynn would still be there to defend him. (768) Armstrong felt “a great deal” of pressure to sign the agreement, and capitulated. (761, 765-66, 772; 670-71)
It was Armstrong’s understanding and intent at the time of the settlement that he would honor the silence and confidentiality provisions of the settlement agreement, and that Scientology would do likewise. (672)
On December 11, 1986, Flynn and Scientology attorneys John G. Peterson, Michael Lee Hertzberg and Lawrence E. Heller appeared, ex parte, before Judge Breckenridge, announced that they had settled Armstrong’s Cross-Complaint in Armstrong I (458), and submitted a number of documents for filing. (1235-36, 1238, 1240-41, 1243-45, 1247-49, 1251.) Despite its promises, Scientology never did file the settlement agreement. (1258)
When Judge Breckenridge inquired whether the agreement impacted the appeal of his decision, the attorneys said that the agreement did not (458), despite Paragraphs 4-A and 4-B. (75-76) None of the attorneys advised Judge Breckenridge of their side stipulation that any retrial of Armstrong I ordered by the Court of Appeal would limit damages claimed by Scientology to $25,001, (1253) 5/ and they failed to advise him there was another side
5 Said stipulation, signed by Michael Flynn on Armstrong’s behalf and by John Peterson and Michael Hertzberg for Scientology and Mary Sue Hubbard, states: “The Church of Scientology of California, Mary Sue Hubbard, and Gerald
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agreement between Flynn and Scientology attorneys Cooley and Heller whereby they agreed to indemnify Flynn if the Court of Appeal reversed Armstrong I and they retried the case and won. (1255-56)
Moreover, prior to and at the time of the settlement Armstrong was not aware of the side agreements between his lawyers and the lawyers for the organization that considered Gerald Armstrong as their enemy! (712-13, 715; 771-72)
On December 18, 1986, the Court of Appeal dismissed appeal No. B005912 as premature because Armstrong’s cross-complaint remained to be tried. (1260-73) 6/
On January 30, 1987, Scientology filed an Unopposed Motion to Withdraw Memorandum of Intended Decision in Armstrong I. (1279-83) which Judge Breckenridge denied. (1285) Scientology then filed its second appeal in Armstrong I. (1287) On July 29, 1991, the Court of Appeal affirmed Judge Breckenridge’s decision. Church of Scientology of California v. Armstrong (1991) 232 Cal.App.3d 1060, 283 Cal.Rptr. 917.
F. Scientology’s Post Settlement Breaches
1. The Corydon “Dead Agent” Pack
In 1987, less than one year after the agreement was signed,
Armstrong, by and through their undersigned counsel, hereby stipulate that in any retrial ordered by any appellate court in Church of Scientology of California v. Gerald Armstrong, LASC No. 420153, the total damages awarded to the Plaintiff Church of Scientology of California and Plaintiff in Intervention Mary Sue Hubbard, combined for any and all causes of action, shall not exceed twenty five thousand and one dollars ($25,001.00).”
6 The Court of Appeal would not have been advised of the resolution of the underlying Cross-Complaint in Armstrong I – on the existence of which it based its order of dismissal of the appeal – because the fate of said appeal was the subject of Paragraphs 4-A and 4-B of the secret agreement.
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Scientology distributed a “dead agent” 7/ pack which included an attack on Armstrong. It stated:
“Corydon has used a description of the RPF provided by Gerry Armstrong, among others. Armstrong’s description in this book, however, is completely contrary to his own previous sworn affidavit about the RPF. (Gerry Armstrong’s description of the RPF in Corydon’s book can also be viewed in light of Armstrong’s numerous false claims and lies on other subject matters.)”
(1504) (Emphasis added.)
2. Scientology’s Declarations In The Miller Litigation
In October, 1987, Scientology representative Kenneth Long executed five affidavits in Church of Scientology of California v. Miller, High Court of Justice, Chancery Division, No. 1987 C. No. 6140, wherein Long solely discussed his characterizations of Armstrong’s activities that had been at issue in the Armstrong I litigation, and thus included within the scope of the settlement agreement. (See Appendix pp. 1506-23; 1525-44; 1546-50, 1555-62, 1564-70)
Long’s third affidavit falsely charged that:
Gerald Armstrong has been an admitted agent provocateur of the U.S. Federal Government who planned to plant forged documents in [Scientology’s] files which would then be “found” by Federal officials in subsequent investigation as evidence of criminal activity. (1549)
In another affidavit filed in the Miller case on October 5, 1987, Sheila M. Chaleff also falsely stated:
Mr. Armstrong is known to me to be a US government informant who has admitted on video tape that he intended to plant
7 “A ‘dead agent’ is a concept created by Hubbard in which an agent who is supposedly spreading stories about you, a lie, an untruth in his story is found. And that is documented. [¶] And then that documented fact is circulated to all of the people to whom the agent has communicated, and then he will become essentially dead, he will be killed by those people who have earlier trusted him. So you’ve destroyed his credibility and as an agent he is dead. [¶] And this pack of materials was a dead agent pack put out to dead agent Bent Corydon. Bent Corydon had written a book about Hubbard, and this is a pack of materials to discredit Bent Corydon.” (791)
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forged documents within the Church of Scientology and then using the contents to get the Church raided where these forged documents would be found and used against the Church.
3. Heller’s Declaration And Argument In The Corydon Litigation
On or about November 1, 1989, in the case entitled Corydon v. Church of Scientology International, Inc., et al., LASC No. C694401, Scientology attorney Lawrence E. Heller filed a Notice of Motion and Motion of Defendant Author Services, Inc. to Delay or Prevent the Taking of Certain Third Party Depositions by Plaintiff. (1294-1305) In his memorandum, Heller discussed the “block settlement” of which the Armstrong agreement was a part:
One of the key ingredients to completing these settlements, insisted upon by all parties involved, was strict confidentiality respecting: (1) the Scientology … staff member’s experiences within … Scientology; (2) any knowledge possessed by the Scientology entities concerning those staff members …; and (3) the terms and conditions of the settlements themselves. Peace has reigned since the time the interested parties entered into the settlements, all parties having exercised good faith in carrying out the terms of the settlement, including the obligations of confidentiality. [Original emphasis.]
(1297) In his sworn declaration, attorney Heller testified:
I was personally involved in the settlements which are referred to in these moving papers which transpired some two and one-half years ago. . . . a “universal settlement” was ultimately entered into between the numerous parties. The universal settlement provided for non-disclosure of all facts underlying the litigation as well as non-disclosure of the terms of the settlements themselves. The non-disclosure obligations were a key part of the settlement agreements insisted upon by all parties involved. [Original emphasis.]
4. Scientology’s Complaint Against The IRS
On August 12, 1991, Scientology filed a complaint styled Church of Scientology International v. Xanthos, et al., in United States District Court, Central District of California, No. 91-4301-SVW(Tx). (1307-47) Therein, Scientology stated:
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The infiltration of [Scientology] was planned as an undercover operation by the LA CID along with former [Scientology] member Gerald Armstrong, who planned to seed [Scientology] files with forged documents which the IRS could then seize in a raid. The CID actually planned to assist Armstrong in taking over the [Scientology] hierarchy which would then turn over all [Scientology] documents to the IRS for their investigation.
5. The Aznaran Litigation
On or about August 26, 1991, Scientology filed its Supplemental Memorandum in Support of Defendants’ Motion to Dismiss Complaint with Prejudice in Aznaran v. Church of Scientology of California, et al. United States District Court, Central District of California, No. CV-88-1786-JMI(Ex). (1349¬59) Therein, a Scientology attorney stated that in 1984 Armstrong was
“plotting against … Scientology … and seeking out staff members who would be willing to assist him in overthrowing [Scientology] leadership. [Scientology] obtained information about Armstrong’s plans and, through a police-sanctioned investigation, provided Armstrong with the “defectors” he sought. On November 30, 1984, Armstrong met with one Michael Rinder, an individual whom Armstrong thought to be one of his “agents” (but who in reality was loyal to [Scientology]). In the conversation, recorded with written permission from law enforcement, Armstrong stated the following in response to questions by Mr. Rinder as to whether they had to have actual evidence of wrongdoing to make allegations in Court against [Scientology’s] leadership
• • •
(Ex. E, Declaration of Lynn R. Farney, ¶ 6.) With such a criminal attitude, Armstrong fits perfectly into Yanny’s game plan for the Aznaran case.”
Armstrong was cleared by the Los Angeles District Attorney after a thorough – and Scientology generated – investigation. (1576-87)
G. Armstrong’s Post Settlement Breaches
Scientology’s position at the hearing below was that Armstrong violated paragraphs 7-G and 7-H of the settlement
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agreement. (81-82) The violations were predicated upon the facts that Armstrong had worked for two days in the office of Joseph A. Yanny and had executed two declarations to be filed in the Aznaran case (122-23; 128; 136-38), had later executed a declaration on Yanny’s behalf that was filed in Religious Technology Center v. Yanny, LASC No. BC 033035, (124-34), and had worked as a paralegal for Ford Greene in the Aznaran case (143
45; 159-64; 169) in which Armstrong filed another declaration on the Aznarans’ behalf. (147-57; RT 5/27/92 at 47)
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.
– i –
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
– ii –
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
– iii –
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