Title: Reply to Opposition
Motion of RTC to renewed motion to amend judgement--Wollersheim
Author: LMT News <info@lisatrust.net>
Date: Mon, 31 Jan 2000 18:35:34 -0500
Daniel A. Leipold, State Bar No. 77159
Cathy L. Shipe, State Bar No. 156453
LEIPOLD, DONOHUE & SHIPE, LLP
960-A West Seventeenth Street
Santa Ana, CA 92706
Telephone: (714) 796-1555
Facsimile: (714) 796-1550
Craig J. Stein, State Bar No. 98041
GARTENBERG JAFFE GELFAND & STEIN LLP
11755 Wilshire Boulevard, Ste. 1230
Los Angeles, CA 90025-1518
Telephone: (310) 479-0044
Ford Greene, State Bar No. 107601
HUB LAW OFFICES
711 Sir Francis Drake Blvd.
San Anselmo, CA 94960
Telephone: (415) 258-0360
Attorney for Plaintiff,
LAWRENCE DOMINICK WOLLERSHEIM
SUPERIOR COURT OF THE STATE OF CALIFORNIA
FOR THE COUNTY OF LOS ANGELES
LAWRENCE DOMINICK WOLLERSHEIM Plaintiff, vs.CHURCH OF
SCIENTOLOGY OF CALIFORNIA Defendant ))))))))))))) Case
No.: C 332 027REPLY TO OPPOSITION OF RELIGIOUS TECHNOLOGY CENTER TO RENEWED
MOTION TO AMEND JUDGMENTDate: February 18, 2000Time: 8:30 a.m.Dept: 24
1. PRELIMINARY NOTE.
At the outset, plaintiff and moving party, Lawrence Wollersheim,
acknowledges the unusual length of this reply brief and apologizes for any
inconvenience it may cause. However, inasmuch as the lion's share of it is
devoted to meeting the constitution-based arguments advanced by Religious
Technology Center -- arguments that demand comprehensive treatment --
plaintiff submits that the length is unavoidable.
2. SUMMARY OF THE FUNDAMENTAL FALLACIES OF RTC'S OPPOSITION.
In an elaborate effort at distraction, RTC invites this Court to
chase myriad red herrings. Initially, RTC does this by listing various
facts that bear not at all on the viability of the motion to amend, such as
that RTC "did not exist at the time of the alleged tortious acts in this
case." (RTC Opp., p. 1.) In no reported opinion is such a factor held to
be dispositive of anything.
Nonetheless, respondent remarks at length about this and other irrelevant
points, faulting Mr. Wollersheim for "mak[ing] no real effort to prove these
essential legal elements of an alter ego relationship." (Ibid.) The
problem with this argument is that RTC is simply wrong about what it claims
are "essential legal elements." For instance, that "RTC never assumed the
assets, liabilities or functions of CSC" (Ibid.), even if true, is
indicative of exactly nothing where the present motion is concerned.
The fact is, there is no litmus test for use in determining when the
corporate veil may appropriately be pierced to amend a judgment. The cases
are legion that the result depends on the circumstances of each particular
case. (See, i.e., Mid-Century Insurance Co. v. Gardner (1992) 9 Cal.App.4th
1205, 1212.) Indeed,
"It is a fundamental rule that the 'conditions under which the corporate
entity may be disregarded... necessarily vary according to the circumstances
of each case inasmuch as the doctrine is essentially an equitable one and
for that reason is particularly within the province of the trial court.
Only general rules may be laid down for guidance.'" (Associated Vendors,
Inc. v. Oakland Meat Co. (1962) 210 Cal.App.2d 825, 836-837; citations
omitted; emphasis added.)
As a different court put it:
"When considering the application of the alter ego doctrine to a particular
situation, it must be remembered that it is an equitable doctrine and,
though courts have justified its application through consideration of many
factors, their basic motivation is to assure a just and equitable result."
(Alexander v. Abbey of the Chimes (1980) 104 Cal.App.3d 39, 48; emphasis
added.)
Importantly, plaintiff is not bound to prove that RTC and CSC are
alter egos of CSC for all purposes, but only for purposes of this case (see,
i.e., Hall, Goodhue, Haisley & Barker, Inc. v. Marconi Conference Center
Board (1996) 41 Cal.App.4th 1551, 1555). Thus, several courts have upheld
amended judgments where as little as three facts pointed to the alter ego
status of the new judgment debtor. (See, i.e., Thomson v. L. C. Roney & Co.
(1952) 112 Cal.App.2d 420 (four factors); Mirabito v. San Francisco Dairy
Co. (1935) 8 Cal.App.2d 54 (three factors); Jack Farenbaugh & Son v. Belmont
Construction (1987) 194 Cal.App.3d 1023 (three factors).) RTC's effort to
render this process unduly complex finds no support in the case law.
Equally misplaced is RTC's constitution-based religious liberty
argument, by which respondent urges the Court not to tread on its
"ecclesiastical" territory. RTC claims that to even consider whether the
Sea Org indeed rules all of Scientology would be to trample on Scientology's
first amendment freedoms. Like the rest of what RTC puts before the Court,
this argument is the legal equivalent of cotton candy: it has substance only
from a distance and is shown on examination to be so much spun air.
Aside from the fallacies of RTC's legal arguments, there are its
tortuous factual claims. As noted, they are largely irrelevant. But, even
the arguably relevant evidence -- that which addresses the supposed
integrity of the corporate structure -- consists wholly of hearsay and a
host of self-serving declarations. It does not undermine Mr. Wollersheim's
submissions showing retaliatory acts accomplished through RTC against him as
punishment for bringing this lawsuit. Nor does it impair the evidence
showing the intimate involvement of RTC officials in shaping CSC's defense.
This reply, then, will focus on revealing the deceptions rife in
RTC's factual assertions, and on debunking RTC's erroneous legal arguments.
3. RTC'S FACTUAL ASSERTIONS ARE CONTRARY TO THE EVIDENCE.
A. Among RTC's Most Odious And Incorrect Contentions Is That "No
Evidence Of Bad Faith" Supports The Motion To Amend The Judgment.
Mr. Wollersheim begins by addressing RTC's extraordinary -- and
utterly inaccurate -- statement that "[i]n this case, there is no showing of
bad faith to justify disregarding the corporate structure." (RTC Opp., p.
17.)
To convince the Court of its uprightness, RTC hopes to paint the
picture of heeded corporate boundaries. But RTC's sweeping declarations
fail. The bad faith tactics, implemented largely by Scientology boss David
Miscavige through respondents' officials and trustees, began in at least
1985, when RTC and CSI filed the Wollersheim II case. The Honorable James
Kolts, acting as special master, recommended dismissal upon finding that the
lawsuit's purpose was to punish the prosecution of this case:
"The plaintiffs' case... borders on the frivolous and malicious, boiling
down to penalizing an attorney simply for conducting necessary discovery to
represent his or her client's case." (Plaintiff's Exhibit "GG" to original
motion.)
Of course, that collateral lawsuit was followed by others, including
Wollersheim V, filed by RTC. There, RTC's lawyers, ostensibly seeking
evidence that Mr. Wollersheim had made unauthorized copies of
Scientology-owned documents, inexplicably searched his computer for
documents containing such "keywords" as "Swearinger" and "O'Reilly" (the
trial judge and plaintiff's attorney in this case) -- which quite obviously
had relevance only to CSC, and only to this lawsuit. (Plaintiff's Exhibit
"DD" to original motion.)
RTC is curiously silent about these established facts.
Indeed, though RTC questions some of Mr. Wollersheim's evidence,
most of it simply goes unaddressed; for instance, RTC says nothing about
former Scientology Attorney Joseph Yanny's declaration, submitted with
plaintiff's original motion. In it, among other things, Mr. Yanny
acknowledged having attended meetings at which RTC officials, including
Marty Rathbun, strategized about blackmailing Mr. Wollersheim's lawyer in
this case against CSC, Charles O'Reilly. Tellingly, Rathbun's present
declaration does not deny relaying the message from David Miscavige to
blackmail Mr. Wollersheim's then counsel with medical records to be stolen
from the Betty Ford Center. (Yanny Decl., 21(a).)
Similarly, the present declarations of RTC's Warren McShane and
Marty Rathbun are silent about Mr. Yanny's statement that they were ordered
in his presence -- by another of respondents' present declarants, and CSC's
original lawyer herein, Attorney Earle Cooley -- to destroy documents
relevant to this case. (Yanny Decl., 18.)
B. RTC's Own Prior Veneration of Jesse Prince's Expertise Means
The Current Effort to Discredit Him Fails.
Although both respondents rail against Mr. Prince ad nauseum, they
cannot defeat his expert status, chiefly because they have previously
acknowledged it themselves. Initially, this is shown in a document
respondents submit, the March 10, 1994 interview of Mr. Prince by Attorney
Earle Cooley. (Respondents' Exh. 24, attachment B.) There, Cooley, who has
represented CSC and RTC against Mr. Wollersheim, implicitly acknowledges the
intimate role Mr. Prince played in Scientology litigation, especially
Wollersheim II (referred to as "that RICO trial" by Mr. Prince):
ECC: Would you consider any of that litigation, or any other litigation,
for example, the one in San Diego involving Larry West, to be frivolous or
harassing litigation?
JP: No sirree! ....
ECC: The Larry West case -- how did that come out?
JP: That one came out good.
ECC: You win that one?
JP: Yes.
ECC: Did that case settle or did that try to a court conclusion?
JP: You know, I'm not sure. I'm not sure.
ECC: In any way it came out favorably?
JP: Yes, it came out favorably and it was done. We were happy with it.
Things that I remember specifically about cases are stellar -- a stellar
result. Like that Christofferson -- I remember a lot about that and that
RICO trial. Boy, I could tell you every little detail about that.
ECC: Boy, we lived that one together, didn't we Jess?
JP: We certainly did."
(Respondents' Exhibit 24, attachment B, pp. 13-14; emphasis added.)
Beyond Mr. Cooley's acknowledgement, Scientology officials also once
demonstrated high regard for Mr. Prince's expertise about
Wollersheim-related litigation. As seen in the newly-received video
evidence accompanying this Reply (see, Exhibits "XX-99" and "III-99"), in
December 1986 a uniformed Captain David Miscavige of the Sea Org introduced
fellow officer and RTC official, Commander Jesse Prince, to an audience of
Scientologists. Mr. Prince then expounded knowledgeably about Scientology
litigation, including the Scott/Wollersheim II matter. (Exhibit "XX-99" and
Second Supplemental Decl. of J. Prince, 2.)
Especially when viewed in light of their onetime reverence of Mr.
Prince's insight, respondents' current focus on semantics is impotent.
Whether the use in Mr. Prince's declaration of the phrase "in charge" (to
describe his accountability for Scientology litigation during his tenure at
RTC) was strictly accurate, the demonstrable fact is that RTC afforded Mr.
Prince much responsibility for monitoring litigation, including the
Wollersheim matters. In fact, RTC and CSI were so enamored of Mr. Prince
that they nominated him as their expert in Wollersheim II. (Supp. Prince
Decl., 28.)
C. RTC Fails To Overcome The Evidence Demonstrating Its
Integral Role In The Management Of CSC's Defense.
RTC's protestations that it was uninvolved with CSC's defense are
perhaps most notable for what they do not contain. As noted, RTC ignores
vast portions of Mr. Wollersheim's evidentiary base; although his
submissions before now have totalled more than 60 items (see, indices of
declarations and exhibits submitted with original motion and evidence
accompanying renewed motion), RTC comically characterizes it all as "a few
bits and pieces..." (RTC Opp., p. 8.)
Rather than meeting the weight of Mr. Wollersheim's supporting
evidence head on, RTC rests on its own submissions which, it insists,
constitute "unequivocal evidence that it exercised no control over CSC's
defense of this case at trial..." (RTC Opp., p. 19; emphasis added.)
RTC's statement is a demonstrable illusion. The events of the
pre-trial period alone undermine RTC's claim of disinterest. For instance,
Attorney John Peterson, who defended CSC in this case, also represented RTC
in Wollersheim II. On November 5, 1985, the same day RTC and CSI obtained
a temporary restraining order against the Wollersheim II defendants, Mr.
Peterson signed a writ application for CSC in this case, attempting to
prevent the materials targeted in Wollersheim II from being entered in
evidence here. (Second Declaration of Leta Schlosser, 5-7 and Exhibit
"MM-99" submitted herewith.) Though unsuccessful, Mr. Peterson would march
back to the court at least two more times in an effort to obtain the same
relief; his requests were repeatedly denied. (Second Schlosser Decl., 7-8
and Exhibits "NN-99" and "OO-99.") Clearly, Wollersheim II was filed -- by
one of CSC's attorneys -- as an integral part of the strategy to defend CSC
against Mr. Wollersheim's claims.
D. The Competent Evidence Continues To Show That, As Puppets Of The Sea
Org And Its Leader, David Miscavige, Respondents Were Intimately Involved In
Determining CSC's Defense.
While obviously unhappy about Mr. Wollersheim's demonstration that
the Sea Org and its leader, David Miscavige, run all of Scientology ultra
vires of the various corporate lines, RTC offers no competent evidence to
contradict it.
Instead, RTC thrusts volumes of hyperbole at the Court, apparently
hoping to divert the Court's attention. The current proclamations of,
inter alia, David Miscavige, insisting that Scientology "corporate
responsibilities and boundaries are distinct and firm" and that suggestions
about the Sea Org's status as the true power hub in Scientology are
"ludicrous" (Miscavige Decl., 11, 12) are certainly expedient.
Unfortunately for respondents, they are also contrary to every independent
and credible bit of evidence.
The persistent denials that David Miscavige controls the Scientology empire
by virtue of his preeminent Sea Org post are refuted by an ocean of evidence
to the contrary. Some of it is already in the record. Some of it, in
direct contravention of respondents' present declarations, is presented with
this Reply and more fully explained in the accompanying Declaration of
Robert Vaughn Young:
· Exhibit "L-99": This publication from approximately 1982, The Sea
Organization Expansion News, shows a stern Commander David Miscavige
"declaring a former Mission Holder suppressive." Also depicted are Sea Org
officers "demonstrat[ing] the get-tough attitude of the 'new blood in
management'" and illustrating the "powerful Sea Org activity that strikes
swiftly to wipe out any attempt to rip off the Church or its parishioners in
their quest for a brighter future."
· Exhibit "HH-99": This excerpt from Sea Org magazine Highwinds
(Issue 19 (1996)) lists Sea Org achievements for the 1995-96 year, including
one from March 1996: "over 100 Sea Org officers fire out from International
Management Headquarters to take command in every continental zone."
· Exhibit "EE-99": In this February 1969 policy letter, Scientology
founder L. Ron Hubbard announced that "The Sea Org sends its officers to
individual orgs with unlimited powers to handle Ethics[,] Tech[, and] Admin"
As these exhibits suggest, one need look no further than to Scientology's
own documents for proof of the Sea Org's status as Scientology's power hub
-- and David Miscavige's control of the Sea Org. RTC's portrayal of the Sea
Org as an "honorary religious order" that "plays no role in the
administration of individual Scientology churches" -- indeed, as a group
that "does nothing" at all (RTC Opp., p. 13) -- is shattered by the words of
Scientology's own "scripture."
The cited documents further demonstrate that, corporate lines
notwithstanding, Sea Org officers are authorized to seize control of
organizations, usurping the power of their non-Sea Org officers and
directors whenever it suits Scientology. (R. Young Decl., 31-36.)
The proof provided by Mr. Young also discredits other of respondents'
assertions. For instance, the claim that the Sea Org has no money (RTC
Opp., p. 13) is a fiction, as additional Scientology documents show. (R.
Young Decl., 33; see also, Supplemental Decl. of J. Prince, 2-3.)
Such evidence dovetails with the United States Claims Court's 1992 opinion,
which exhaustively examined Scientology's "nominal corporate structure."
(Church of Spiritual Technology v. U.S., supra, 26 Cl.Ct. 713.) In that
court's determination, Scientology's corporate scheme is a deception. "Real
control is exercised less formally, but more tangibly, through an
unincorporated association, the Sea Organization..." (Id. at p. 718.)
As for the notion that "hatred" propels Mr. Wollersheim's assertion
that David Miscavige controls Scientology as the Sea Org's undisputed
leader, it is a fantasy (and an irrelevant one). Though not targeted for
status as a judgment debtor himself, David Miscavige's status as Sea Org
boss (and, accordingly, Scientology's leader) is clearly established by
independent, previously-submitted evidence, which respondents eschew. For
instance:
On July 18, 1990, Vicki J. Aznaran, a Sea Org member from 1978, and RTC
Inspector General pursuant to an appointment by David Miscavige from 1984 to
1987 (First Aznaran Decl. at 1:17-19, 2:4-9; Plaintiff's Exh. "T" to
original motion, 45:9-11), testified that in 1984 and 1985, while he was
Chairman of the Board of Author Services, Inc., David Miscavige
"represented Hubbard in all aspects of controlling Scientology. He attended
regular meetings with myself and other top officials of Scientology
organizations to review the status of all Scientology's activities,
including its litigation and dirty tricks campaigns against Scientology's
enemies." (First Aznaran Decl., at 3:8-18, submitted with original motion)
In Wollersheim II, Ms. Aznaran testified that Miscavige exercised "ultimate
control over Church of Scientology finances." (Plaintiff's Exh. "T" to
original motion at 46:8-23.) She said the decision to bring Wollersheim II
was made by David Miscavige and others, including RTC's Marty Rathbun, and
Jesse Prince, in addition to Ms. Aznaran herself. (Id., at 684:1-685:21)
She also testified that while Jesse Prince and Warren McShane worked for her
at RTC, David Miscavige ordered her to destroy documents concerning the
finance and control of Scientology. (Plaintiff's Exh. "S" to original
motion at 215:1-22; 332:6-333:1.)
Further, Mr. Miscavige ordered the destruction of confidential
counseling ("auditing") folders "of every person who was in litigation with
the church;" some of these were subject to requests for production. (Id., at
332:6-333:23.) In particular, he ordered Mr. Wollersheim's auditing folders
destroyed, a mission that was carried out by Jesse Prince and Rick Aznaran.
(See also, original Prince Decl., submitted with Renewed Motion, 14-16.)
Finally, his denials notwithstanding, Mr. Miscavige did attend
several of the trial proceedings in Wollersheim I. Contrary to Mr.
Miscavige's present assertions, these appearances had nothing whatsoever to
do with "protecting" L. Ron Hubbard. (Plaintiff's Exh. "K" to original
motion; Supplemental Decl. of Leta Schlosser at 16(a)-(e), 17.)
/ / /
4. RTC CANNOT PRECLUDE SCRUTINY OF ITS IMPROPER EXTRA CORPORATE
ACTIVITIES BY HIDING BEHIND A VEIL OF "ECCLESIASTICAL" PRIVILEGE.
RTC argues that any inquiry by this Court into the nature of
Scientology's power structure would violate the religious liberty guarantees
of the first amendment. For support, RTC begins by importing snippets of
constitutional doctrine describing the courts' compelled abstention from
passing on ecclesiastical controversies. Respondent then juxtaposes that
ostensible authority with pretextual statements about the nature of the Sea
Organization and David Miscavige's relationship to it, hoping the Court will
be warned off.
Indeed, in RTC's view, the Court cannot even question the truth of
respondents' own assertions about the Sea Org, because to do so would be an
ecclesiastical determination violative of the establishment clause.
RTC's arguments fail on at least two counts. First, the fraud and collusion
rampant throughout the litigation between Scientology and plaintiff
precludes respondents' hoped-for constitutional protection, blanket or
otherwise.
Yet, even assuming arguendo no fraud or collusion exists to remove
constitutional protection, the first amendment does not compel the Court's
deference to RTC's assertions. There is no intra-church controversy about
doctrine or power here, the resolution of which would cause the Court to
favor one warring faction's particular sectarian preference over another's.
Instead of an intra-church ecclesiastical controversy, the matter before the
Court simply involves a plaintiff seeking to enforce a lawfully entered
judgment.
Ironically, it is Mr. Wollersheim whose constitutional rights have been
trampled. While draping themselves in the cloaks of "RTC" and "CSI,"
Scientology's powerful have done everything to deny Mr. Wollersheim his
constitutionally-protected redress. As the Second District Court of Appeal,
commenting on this case, held,
"[A]n examination of the history of the underlying litigation reveals... a
pattern of conduct by the Church to employ every means, regardless of merit,
to frustrate or undermine Wollersheim's petition activity.... [A]cts which
are designed to discourage the bringing of a lawsuit are no more oppressive
than acts which seek to prolong the litigation to a point where it is
economically impracticable to maintain and pursue it to a final conclusion.
When one party to a lawsuit continuously and unsuccessfully uses the
litigation process to bludgeon the opponent into submission, those actions
must be closely scrutinized for constitutional implications." (Church of
Scientology of California v. Wollersheim (1996) 42 Cal.App.4th 628, 649.)
Now, once again, Scientology throws religion up as an obfuscatory ploy.
The resistance of RTC's Miscavige and his Sea Org to submit to this Court's
authority to enforce a lawfully approved multi-million dollar judgment
resorts to spurious sectarian contentions that simply boil down to a dodge
of responsibility.
A. The Doctrine Of Ecclesiastical Abstention Does Not Preclude
Imposition Of Alter Ego Liability On Religious Liberty Grounds.
The Supreme Court has recognized two primary constitutional
considerations favoring judicial noninvolvement in ecclesiastical disputes.
The first is the extent to which judicial resolution of the particular
controversy would involve deciding issues of religious doctrine or beliefs.
Second, where religious organizations establish rules for internal
discipline and governance, and tribunals for adjudicating disputes over such
matters, "the Constitution requires that civil courts accept their decisions
as binding upon them." (Serbian Orthodox Diocese v. Milivojevich (1976) 426
U.S. 696, 725.)
The rule requiring deference to decisions of ecclesiastical bodies
on matters of internal church governance was first articulated in Gonzalez
v. Roman Catholic Archbishop (1929) 280 U.S. 1. At issue there was the
ability of a civil court to pass on questions about the qualifications of
potential chaplains. The Supreme Court held that "[i]n the absence of
fraud, collusion, or arbitrariness, the decisions of the proper church
tribunals on matters purely ecclesiastical, although affecting civil rights,
are accepted in litigation before civil courts as conclusive, because the
parties in interest made them so by contract or otherwise." (280 U.S. at p.
16.)
Kedroff v. St. Nicholas Cathedral (1952) 344 U.S. 94 and Serbian
Orthodox Diocese v. Milivojevich, supra, make clear that the principle of
deference to church authorities applies to disputes concerning matters of
internal church governance. In Kedroff, the Court held that a state could
not dictate which of two factions within the Russian Orthodox Church had the
power to appoint the ruling hierarchy for their churches in America.
According to the Court, state legislation regulating matters of church
administration was contrary to the first amendment because, in the absence
of fraud, collusion, or arbitrariness, matters of church governance are for
the church to decide free from state interference. (344 U.S. at pp.
107-108, 116.)
Balanced against these two first amendment considerations favoring
civil court noninvolvement are state interests in resolving disputes about
civil rights and individual interests in adjudicating before a civil forum.
Even where church property is involved, the state has a strong interest in
rapid resolution of disputes concerning ownership rights. (See, e.g., Jones
v. Wolf (1979) 443 U.S. 595, 602 ("The state has an obvious and legitimate
interest in the peaceful resolution of property disputes, and in providing a
civil forum where the ownership of church property can be determined
conclusively."); Presbyterian Church v. Mary Elizabeth Blue Hull Memorial
Presbyterian Church (1969) 393 U.S. 440, 445 ("It is of course true that the
State has a legitimate interest in resolving property disputes, and that a
civil court is a proper forum for that resolution."); Kedroff v. St.
Nicholas Cathedral, supra, 344 U.S. 94, 120 ("There are occasions when civil
courts must draw lines between the responsibilities of the church and state
for the disposition and use of property.")
Thus, the Jones court, over dissent, refused to adopt a rule of compulsory
deference to the authoritative decisions of church bodies. (Jones v. Wolf,
supra, 443 U.S. at p. 605.) Instead, the "state is constitutionally
entitled to adopt neutral principles of law as a means of adjudicating a
church property dispute." (Id. at p. 604.)
What plaintiff seeks here -- the imposition of alter ego liability on RTC
and CSI -- is fully in accord with Jones.
B. There Exist At Least Three Separate Bases For Rejecting RTC's Effort
To Assert A Religious Liberty Deference Defense To Trump Alter Ego
Liability.
1. Lack Of Standing: Respondents Cannot Rely On The Ecclesiastical
Defense Because They Claim The Sea Org Possesses No Ecclesiastical Or
Corporate Authority.
According to CSI's representation to the IRS when it sought tax exempt
status for itself and other Scientology corporations:
"The Sea Org is not an organization in any usual sense of the term. The Sea
organization is not incorporated, nor is it an unincorporated association,
and it has no formal or informal ecclesiastical or other structure. It has
no income, disbursements, assets or liabilities. [] The Sea Org has no
organizational existence apart from the corporate and ecclesiastical
hierarchy of the Scientology religion. . . . The Sea Org exists as a
spiritual commitment to the transcendent goals and purposes of the
Scientology religion." (Plaintiff's Exhibit "B," submitted with original
motion, p. 150161.)
As CSI further explained to the IRS, David Miscavige, RTC's
Chairman, "holds the highest ecclesiastical position within the Scientology
religion." (Ibid.)
In his present declaration, Mr. Miscavige swears that the Sea Org "confers
no corporate or ecclesiastical authority. Sea Org members are staff in many
churches of Scientology across the globe. Any authority they have in the
church entity that employs them derives from their position in that church
structure and not their honorary status in the Sea Organization."
(Respondents' Exhibit 34, at 6:19-22)
Quite clearly, respondents' unequivocal assertions that the Sea Org
exercises no ecclesiastical authority leaves them with no standing to claim
the protection, if any, offered by the constitutional principle of
ecclesiastical abstention.
2. Respondents' Fraud And Collusion Precludes Them From Invoking The
Protection, If Any, Offered By The Ecclesiastical Abstention Doctrine.
As noted, the ecclesiastical abstention doctrine does not preclude
scrutiny of the fraudulent and collusive deeds of church tribunals acting in
bad faith for secular purposes, notwithstanding that they are ecclesiastical
by nature. (Gonzalez, supra, 280 U.S. at p. 16; Milivojevich, supra, 426
U.S. at p. 713.) As Kedroff teaches, government "power to punish subversive
action cannot be doubted. If such action should actually be attempted by a
cleric, neither his robe nor his pulpit would be a defense." (Kedroff, 344
U.S. at p. 109.)
Accordingly, when purportedly ecclesiastical conduct is, in fact, fraudulent
and collusive, the civil court is not constitutionally bound to defer to
religion's altar. (Kedroff, 344 U.S. at p. 116, fn. 23; Presbyterian Church
v. Mary Elizabeth Blue Hull Memorial Presbyterian Church, supra, 393 U.S. at
447, 451.)
When the full record is examined, it becomes crystal clear why RTC scrambles
so feverishly to label its maneuvers as "ecclesiastical" decisions entitled
to immunity from judicial scrutiny. The only thing that becomes clearer is
the reason why those decisions scream to see the light of day.
Because of the vast fraud and collusion involved in this case, which results
in the ongoing unabashed violation of Mr. Wollersheim's civil rights, the
decisions of RTC -- whether sectarian or secular -- merit no constitutional
protection. Indeed, the appellate panel initially considering arguments in
this case held that
"the law of this jurisdiction... would not support a constitutional shield
for Scientology's retribution program.... Scientology leaders made the
deliberate decision to ruin Wollersheim economically and psychologically...
he was bankrupted by a campaign his former religionists carefully designed
with the specific intent to bankrupt him.... Nothing... even implies a
religion is entitled to constitutional protection for a campaign
deliberately designed to financially ruin anyone - whether a member or a
non-member of that religion. Nor have we found any cases suggesting the
free exercise clause can justify a refusal to honor financial obligations
the state considers binding and legally enforceable. One can only imagine
the utter chaos that could overtake our economy if people who owed money to
others were entitled to assert a freedom of religion defense to repayment of
those debts. It is not unlikely the courts would soon be flooded with
debtors who claimed their religion prohibited them from paying money they
owed to others." (Wollersheim v. Church of Scientology (1989) 212
Cal.App.3d 872, 890; emphasis added.)
Likewise, one can only imagine the utter chaos that would overtake our
justice system if people who violate others' rights were entitled to assert
a religious liberty defense to avoid facing evidence that they had destroyed
evidence, violated court orders and acted as a "single monolithic whole"
masquerading in the guise of a religious corporation. Such conduct is
clearly within the scope of the appellate court's holding that the abusive
litigation tactics leveled at Mr. Wollersheim "must be closely scrutinized
for constitutional implications" (Church of Scientology v. Wollersheim,
supra, 42 Cal.App.4th at p. 649) and obviates RTC's claim of religious
immunity.
Given the criminal or quasi-criminal nature of the acts Mr. Wollersheim has
proven, there can be no mistake about why RTC (or, more precisely, the Sea
Org and its leader, David Miscavige) hope to hide behind the shield of
ecclesiastical deference. Yet, "[t]he absolute protection afforded belief
by the first amendment suggests that a court should be cautious in expanding
the scope of that protection since to do so might leave government powerless
to vindicate compelling state interests." (McDaniel v. Paty (1978) 435 U.S.
618, 627.)
In the end, if RTC's effort to shield its acts from scrutiny succeeds, it
will only serve as a wrongful trump of Mr. Wollersheim's first amendment
right to redress.
/ / /
/ / /
/ / /
a. Ascribing The Fraud And Collusion To Respondents By Way Of Their Sea
Org Connection Finds Authority In Published Case Law.
The fraud/collusion exception should be applied to respondents in this case.
As shown, the fraudulent tactics that make the alter ego doctrine applicable
here were orchestrated through Scientology's power elite in the Sea Org. To
accurately scrutinize and understand the role played by the Sea Org, it is
proper to view it "in the context of Scientology as a whole." (Church of
Spiritual Technology v. United States, supra, 26 Cl.Ct. at p. 715.)
As the Claims Court recognized after its comprehensive excursion through
Scientology's corporations -- which journey resulted in the Church of
Spiritual Technology v. United States opinion quoted herein -- CSC underwent
"almost constant corporate metamorphosis since its creation," resulting in
the corporate reorganization whereby its total control of Scientology was
supplanted by CSI and RTC. (Id. at pp. 715-717.) And, both CSI and RTC are
"management churches" that, according to Scientology's own scriptures, "are
staffed with Sea Org members." (Id. at p. 717.)
Plainly, though Mr. Miscavige et. al. maintain that "[a]llegations
concerning 'unity of control,' 'violation of corporate boundaries,' and
'control through the Sea Organization' have been made repeatedly over the
years... and every one of them has already been disproved" (Respondents'
Exh. 34, p. 13:6-11), the established facts show otherwise. As plaintiff
has conclusively demonstrated, those facts have been found not only here but
in countless other courts, and they have invariably been upheld on appeal.
In light of these facts and the record, not to mention Scientology's
litigation history, Mr. Miscavige's view recalls "the familiar pose of not
seeing, hearing, or knowing any evil" which, unfortunately for him and his
cohorts, leaves much to be desired in the credibility department. (See,
Exh. "JJ" to plaintiff's original motion, 9:25-10:1.)
In addition to the findings of other courts, of course, the trial court in
this case has already reviewed submissions of the parties herein to
determine:
"Proof has shown that Scientology as an overall entity is comprised of
numerous operating entities, including defendant, and that they are all
inter-related, being parts of a monolithic whole. Transfers of assets and
functions from one entity to other entities are more pro forma than actual.
In the case of the transfers in question here, they are seen as mere
'jiggery pokery.' The power to transfer out to a sister entity is the power
to transfer back 'when the heat is off,' so to speak." (Plaintiff's Exh. "Q"
to original motion.)
3. The Absence Of An Intra-Sectarian Controversy Means There Is No Risk
Of An Improper Judicial Determination And No Basis To Abstain From Deciding
This Controversy.
Crucially, the establishment clause does not prevent the government from
making a threshold inquiry into whether a given practice is a religious one
entitled to first amendment protection. (See, i.e., Wisconsin v. Yoder
(1972) 406 U.S. 205, 209?213; International Society for Krishna
Consciousness, Inc. v. Barber (2d Cir. 1981) 650 F.2d 430, 433; Jones v.
Bradley (9th Cir. 1979) 590 F.2d 294, 295.)
The establishment clause precludes government from acting to "aid one
religion, aid all religions, or prefer one religion over another." (Everson
v. Board of Education (1947) 330 U.S. 1, 15.) The purpose of the clause is
"to prevent, as far as possible the intrusion of either [the church or the
state] into the precincts of the other." (Lemon v. Kurtzman (1971) 403 U.S.
602, 614.)
However, "total separation is not possible in an absolute sense. Some
relationship between government and religious organizations is inevitable."
(Ibid.) As the United States Supreme Court has frequently observed, total
separation would foster a "callous indifference" by government toward
religion, something that was never intended by the establishment clause.
(See, Zorach v. Clauson (1952) 343 U.S. 306, 314.) For this reason, it has
never been considered either possible or desirable to enforce a regime of
total separation. (Committee for Public Education & Religious Liberty v.
Nyquist (1973) 413 U.S. 756, 760.)
Instead, the establishment clause requires "accommodation" between the
interests of church and state. (Zorach, supra, 343 U.S. at p. 314.)
Thus, the Court has "uniformly rejected" an absolutist approach in applying
the establishment clause. (Lynch v. Donnelly (1984) 465 U.S. 668, 678.) In
each case, the inquiry requires a line-drawing process which recognizes
that the division between permissible connections and those barred by the
establishment clause is not "straight and unwavering." (Id. at pp.
679-680.) As the Lemon Court put it, the establishment clause erects a
"blurred, indistinct, variable barrier depending on all of the circumstances
of a particular relationship." (Lemon v. Kurtzman, supra, 403 U.S. at p.
614.)
To aid tribunals in executing this line-drawing process, the Supreme Court
has suggested a three-part test: (1) whether the challenged law or conduct
has a secular purpose, (2) whether its principal or primary effect is to
advance or inhibit religion, and (3) whether the conduct creates an
excessive entanglement of government with religion. (Ibid.) Nonetheless,
the Court has repeatedly emphasized its "unwillingness to be confined to any
single test or criterion in this sensitive area." (Lynch v. Donnelly,
supra, 465 U.S. at p. 680.) Instead, the challenged activity must be
considered in light of the first amendment's purpose and the "reality" of
the particular interrelationship between church and state. (Id., 465 U.S. at
p. 678.)
In the present case, RTC argues "[p]laintiff would have this Court violate
the[] principles [prohibiting excessive entanglement] by interpreting Mr.
Miscavige's ecclesiastical role within the Scientology religion as giving
him temporal authority contrary to the governing structure established by
the Scientology churches." (RTC Opp., p. 25 l. 25-27; emphasis in
original.) In other words, according to RTC, an alter ego finding by this
Court would constitute an impermissible interpretation of whether
Scientology properly applies its own religious principles.
RTC misapprehends the law. Plaintiff does not seek to alter, modify, or
adjust RTC's internal relationship with itself or with Scientology's
adherents. He does not aim to instruct Scientology about how to handle its
intra-church affairs. Rather, plaintiff seeks only to hold RTC and CSI
accountable for the consequences of their conduct toward, and their
interaction with, him, by assigning accountability to those entities through
which CSC's defense was conducted.
To be sure, a court may not define or limit matters of ecclesiastical
choice as those sectarian decisions impact religious self-governance. But
the constitutional protection that gives religious groups the freedom to
tend to their own internal affairs does not necessarily furnish immunization
from liability for the external consequences of their agents' conduct.
Accordingly, the Court is not absolutely precluded from examining RTC's
proclaimed "ecclesiastical" actions as they impact Mr. Wollersheim's civil
and constitutional rights. This is the central and critical distinction
between the case authority upon which RTC relies and the situation
confronting the Court here.
The cases RTC cites do not support its hoped-for expansion of the rule, by
which RTC would receive an undeserved immunity from accountability not only
for the consequences of its conduct but also for the statements its
representatives have made under oath. In all of RTC's argument, nowhere is
found a case that says that a religion is immune from paying a judgment
awarded to redress the heinous harm it has caused.
Indeed, for example, RTC cites Presbyterian Church v. Mary Elizabeth Blue
Hull Memorial Presbyterian Church, supra, 393 U.S. 440, in suggesting that
"the Court must defer to the Church itself" because "[p]laintiff's motion
[impermissibly] asks this Court to impose its own judgment over who controls
Scientology churches..." (RTC Opp., pp. 24-25.)
The Presbyterian Church case does not assist RTC in this regard. There, the
Court examined a church property dispute. After the withdrawal of two local
churches from a hierarchical general church organization, the general church
had taken control of the real property of the local churches. The local
churches, in turn, sought injunctive relief prohibiting the general church
from trespassing.
The local churches had withdrawn because they believed certain actions and
pronouncements of the general church violated that organization's
constitution and departed from prescribed doctrine and practice. The case
was submitted to the jury with instructions to determine whether the actions
of the general church
"amount to a fundamental or substantial abandonment or the original tenets
and doctrines of the [general church], so that the new tenets and doctrines
are utterly variant from the purposes for which the [general church] was
founded." (Presbyterian Church, supra, 393 U.S. at pp. 441-444.)
In those circumstances, the Supreme Court held that submitting the case to
the jury "jeopardized" first amendment values. Contrary to the sweeping
proposition for which RTC cites the Presbyterian Church case, the Court's
pronouncement was narrow and specific: "[W]hen church property litigation is
made to turn on the resolution by civil courts of controversies over
religious doctrine and practice," the first amendment is offended. (Id. at
p. 449.)
So it is with other of RTC's cited cases. In Serbian Orthodox Diocese v.
Milivojevich, supra, 426 U.S. 696, the issue concerned the defrocking of a
Serbian Orthodox Church bishop. The Supreme Court held that the trial
court's intervention in the internal church dispute unconstitutionally
interfered with the church's province to manage its own affairs. The Court
cited "the constitutional mandate that civil courts are bound to accept the
decisions of the highest judicatories of a religious organization of
hierarchical polity on matters of discipline, faith, internal organization,
or ecclesiastical rule, custom or law." (Id., 426 U.S. at 713.)
In Simpson v. Wells Lamont Corporation (1974) 494 F.2d 490, a pastor sued
after having been removed from his church position and evicted from the
parsonage because his sermons contained his racial opinions. Relying on the
Kedroff line of cases, the court upheld the case's dismissal since the
"interaction between the church and the pastor [was] an integral part of
church government." (Id., 494 F.2d at p. 493.)
In Natal v. Christian and Missionary Alliance (1989) 878 F.2d 1575, another
pastor sued his church for discharging him in contravention of its own
internal rules and regulations, depriving him of sectarian "due process."
Because a court cannot be "called upon to probe into a religious body's
selection and retention of clergymen," dismissal of the case was affirmed.
(878 F.2d at p. 1577.)
In Schmidt v. Bishop (1991) 779 F. Supp. 321, the 41-year-old plaintiff had
allegedly been the victim of sexual abuse by a clergyman when the plaintiff
was a minor. Claims of negligent hiring, supervision and retention against
the clergyman's religious organization were dismissed on statute of
limitations grounds. (Id., 779 F. Supp at pp. 331-332.) Next, having
looked at the case as one of "clergy malpractice," the court determined --
on the basis of the existence of myriad religions and doctrines -- that
imposing duty of care standards in a religious context would foster
excessive entanglement because the court would have to make judgments about
the "proper practice" of a religion. (Id. at pp. 327-328, 332.)
RTC further errs in citing Byrd v. Faber (1991) 565 N.E.2d 584 because that
case holds, as it should, that liability may be imposed on a religious
organization. In Byrd, the Ohio Supreme Court considered the issue of
negligent hiring in the context of a clergy sexual exploitation case. The
court was particularly addressed to the appropriateness of respondeat
superior liability on the church that had employed the miscreant. RTC's
characterization aside, Byrd does not hold that churches facing such
allegations may invariably escape scot-free, but rather that if the facts
are bad enough, the church may permissibly be held liable.
In Church of Scientology of California v. Commissioner, 83 T.C. 381,
Scientology contended the IRS, aided by Church policy letters, made an
impermissibly entangling inquiry into Scientology's management, corporate
structure, and dissemination practices. The tax court rejected this
argument, saying
"The establishment clause does not cloak a church in utter secrecy, nor does
it immunize a church from all governmental authority. The thrust of the
entanglement component of the establishment clause is to keep government out
of the business of umpiring matters involving religious belief and practice.
[Citations omitted.]" (Id. at p. 462)
Moreover, as the Tax Court further noted, "civil authorities are not barred
from settling disputes implicating the secular side of church affairs as
long as they rely on neutral principles of law." (Ibid.) Accordingly, Judge
Sterrett held:
"[The respondent tax commissioner] did not rely on Church policy letters to
establish basic facts about the Church. A nine?volume encyclopedia of
Scientology policy called the OEC series was placed in evidence. Some of
the policy letters in these volumes contain instructions on religious
practices. The majority contain information about Church administration.
An expert witness for the Church compared the OEC series to the constitution
of the Presbyterian Church. Respondent relied on scattered policy letters
in the OEC volumes to question witnesses about the Church's dissemination
practices, its corporate structure and its management functions. In making
his inquiry, respondent skirted matters of religious doctrine except at the
threshold level of inquiry. We have also used Church policy letters to make
findings on these topics and others including the Church's Franchise
Programme and pricing policies. However, we have not had to resolve
doctrinal matters to make our findings. The Church's documents speak for
themselves. We, therefore, find that the use of Church policy letters in
this case is consistent with the rule laid down in Jones v. Wolf, supra,
which allows the state to examine Church documents, including the
constitution of a church, provided the documents are scrutinized in purely
secular terms and the facts determined are not attendant on the resolution
of doctrinal issues. [Jones v. Wolf] 443 U.S. at 604. See also, Maryland
and Virginia Eldership of the Churches of God v. Church of God at
Sharpsburg, Inc., supra at 368." (83 T.C. at p. 483; emphasis added.)
Likewise here, the Court is not called upon to resolve any doctrinal matter.
Indeed, both Mr. Wollersheim and the state have multiple and compelling
interests, not the least of which is the integrity of the judiciary. The
state has a profound interest in the enforcement of lawful judgments --
particularly those that, like Mr. Wollersheim's, are, by the inclusion of
significant elements of punitive damages totaling millions of dollars,
designed to deter misconduct.
Just as "[r]eligious belief cannot be used as a magic wand to transform tax
avoidance into a tax exemption" (Church of Spiritual Technology v. United
States, supra, 26 Cl. Ct. at p. 738), it unquestionably cannot be used to
transform liability for misconduct into an immunity for all purposes.
5. CONCLUSION.
As shown, both the factual assertions and legal arguments offered by
RTC come up far short. The preponderance of creditable evidence weighs
distinctly in favor of Plaintiff Wollersheim, showing that RTC and CSC were
certainly alter egos of one another under applicable case law and that
officials of RTC were closely involved in guiding CSC's defense herein.
Moreover, under the facts and circumstances of this case, the
balance of constitutional interests fails to tip in favor of a religiously
conferred immunity.
Accordingly, Lawrence Wollersheim respectfully submits that his
motion to amend the judgment to name Religious Technology Center as an
additional judgment debtor must, in equity and all propriety, be granted.
DATED: January 14, 2000
LEIPOLD, DONOHUE & SHIPE, LLP
By_______________________
DANIEL A. LEIPOLD
Attorneys for Plaintiff
LAWRENCE WOLLERSHEIM