La Venda VAN SCHAICK, Plaintiff,
v.
CHURCH OF SCIENTOLOGY OF CALIFORNIA, INC., et al., Defendants.
Civ. A. No. 79-2491-G.
United States District Court, D. Massachusetts.
March 26, 1982.
Former church member brought action against churches of particular ideology,
founder, and second-ranking person in church hierarchy, alleging fraud,
intentional infliction of emotional distress, breach of contract, violation of
Fair Labor Standards Act and class action for treble damages under civil remedy
provision of Racketeer Influenced and Corrupt Organizations Act. On former
member's motion to amend complaint and churches' motion to dismiss, the
District Court, Garrity, J., held that: (1) there was insufficient factual
foundation for assertion of personal jurisdiction under conspiracy theory of
jurisdiction; (2) venue was proper as to California church with respect to RICO
claims; (3) former member had failed to state claim under RICO; (4) counts of
former member's complaint failed to state claim for intentional infliction of
emotional distress; (5) complaint failed to state claim under Fair Labor
Standards Act; (6) complaint fell short of specificity required of claim for
fraud; (7) complaint stated claim upon which relief could be granted with
respect to alleged intentional infliction of emotional distress through church
doctrine; and (8) question whether count of complaint alleging that former
member was fraudulently induced to become member by false representations
concerning nature of church movement and content of church doctrine stated
claim for relief could not be resolved on motion to dismiss.
Ordered accordingly.
[1] FEDERAL COURTS
Although, under conspiracy theory of jurisdiction, mere presence of conspirator
within forum state is not sufficient to permit personal jurisdiction over
nonresident coconspirators, where substantial acts in furtherance of conspiracy
are performed in forum state and coconspirator knew or should have known that
acts would be performed there, such additional connections between conspiracy
and forum state will support exercise of jurisdiction.
[2] FEDERAL COURTS
Conspiracy theory of jurisdiction would give district court jurisdiction only
over any claims which arose from acts within district.
[3] FEDERAL COURTS
Although former church member did pinpoint some connection between out-of-state
churches and occurrences in Massachusetts in attempt to dissuade her
from pursuing her legal remedies against churches, where she failed to submit
detailed factual allegations connecting each of nonresidents with events
occurring in Massachusetts, there was insufficient factual foundation for
assertion of personal jurisdiction over nonresidents under conspiracy theory of
jurisdiction.
[4] LABOR RELATIONS
General venue statute controls actions under Fair Labor Standards Act, since
Act does not contain special venue provision. Fair Labor Standards Act of
1938, s 1 et seq. as amended 29 U.S.C.A. s 201 et seq.; 28 U.S.C.A. s
1391(b, c).
[5] CRIMINAL LAW
For corporate defendant, in private action under section of Racketeer
Influenced and Corrupt Organizations Act providing that venue is proper where
defendant "resides, is found, has an agent, or transacts his affairs," to be
"found" in district within meaning of section, it must be present in district
by its officers and agents carrying on business of corporation. 18
U.S.C.A. s 1965(a).
[5] FEDERAL COURTS
For corporate defendant, in private action under section of Racketeer
Influenced and Corrupt Organizations Act providing that venue is proper where
defendant "resides, is found, has an agent, or transacts his affairs," to be
"found" in district within meaning of section, it must be present in district
by its officers and agents carrying on business of corporation. 18
U.S.C.A. s 1965(a).
[6] CRIMINAL LAW
Venue was proper in district as to California church with respect to former
member's Racketeer Influenced and Corrupt Organizations Act claims where church
was carrying on business of corporation in district, both directly, through its
agents, and indirectly, through affiliated church. 18 U.S.C.A. ss 1965,
1965(a).
[6] FEDERAL COURTS
Venue was proper in district as to California church with respect to former
member's Racketeer Influenced and Corrupt Organizations Act claims where church
was carrying on business of corporation in district, both directly, through its
agents, and indirectly, through affiliated church. 18 U.S.C.A. ss 1965,
1965(a).
[7] CRIMINAL LAW
Special venue provision in Racketeer Influenced and Corrupt Organizations Act
is not intended to be exclusive, but is intended to liberalize existing venue
provisions. 18 U.S.C.A. s 1965.
[7] FEDERAL COURTS
Special venue provision in Racketeer Influenced and Corrupt Organizations Act
is not intended to be exclusive, but is intended to liberalize existing venue
provisions. 18 U.S.C.A. s 1965.
[8] FEDERAL COURTS
Where venue is improper under special venue provision of Racketeer Influenced
and Corrupt Organizations Act, it is appropriate to inquire whether action can
be maintained under general venue statute. 18 U.S.C.A. s 1965(a); 28
U.S.C.A. s 1391(b).
[9] FEDERAL COURTS
Where almost all of acts upon which former church member's Racketeer Influenced
and Corrupt Organizations Act counts were predicated occurred outside of
Massachusetts, none of her RICO claims "arose" in district within meaning of
general venue statute. 18 U.S.C.A. s 1961; 28 U.S.C.A. s 1391(b).
[10] FEDERAL COURTS
Where California church conducted business within Massachusetts continuously
and systematically, both directly and through affiliated church, it was "doing
business" in district within meaning of statute defining corporate residence
for venue purposes and therefore venue was proper for California church with
respect to former member's diversity and Fair Labor Standards Act claims.
28 U.S.C.A. s 1391(b, c); Fair Labor Standards Act of 1938, s 1 et seq.
as amended 29 U.S.C.A. s 201 et seq.
[11] FEDERAL CIVIL PROCEDURE
Defense of improper venue is personal to party to whom it applies, and resident
defendant may not avail himself of dismissal or transfer due to improper venue
over nonresident unless latter is indispensable party. 28 U.S.C.A. s
1391(b, c).
[11] FEDERAL COURTS
Defense of improper venue is personal to party to whom it applies, and resident
defendant may not avail himself of dismissal or transfer due to improper venue
over nonresident unless latter is indispensable party. 28 U.S.C.A. s
1391(b, c).
[12] CONSTITUTIONAL LAW
Even if California church was religious institution, free exercise clause of
First Amendment would not immunize it from all common-law causes of action
alleging tortious activity. U.S.C.A.Const.Amend. 1.
[12] RELIGIOUS SOCIETIES
Even if California church was religious institution, free exercise clause of
First Amendment would not immunize it from all common-law causes of action
alleging tortious activity. U.S.C.A.Const.Amend. 1.
[13] CONSTITUTIONAL LAW
First Amendment does not exempt religious groups from all regulatory
statutes. U.S.C.A.Const.Amend. 1.
[14] RELIGIOUS SOCIETIES
Whether immunity of religious group from regulatory statutes exists depends, in
part, on whether adjudication of claim would require judicial determination of
validity of religious belief and, if not, on whether application of
regulation is least restrictive means of achieving some compelling state
interest. U.S.C.A.Const.Amend. 1.
[14] RELIGIOUS SOCIETIES
Whether immunity of religious group from regulatory statutes exists depends, in
part, on whether adjudication of claim would require judicial determination of
validity of religious belief and, if not, on whether application of
regulation is least restrictive means of achieving some compelling state
interest. U.S.C.A.Const.Amend. 1.
[15] RELIGIOUS SOCIETIES
Causes of action based upon some proscribed conduct may withstand motion to
dismiss even if alleged wrongdoer acts upon religious belief or is organized
for religious purpose. U.S.C.A.Const.Amend. 1.
[16] COMMERCE
Racketeer Influenced and Corrupt Organizations Act applies to persons who
conduct activities of wholly illegitimate enterprise whose activities affect
interstate commerce through pattern of racketeering activity. 18
U.S.C.A. ss 1962, 1962(c).
[16] RACKETEER INFLUENCED AND CORRUPT ORGANIZATIONS
Racketeer Influenced and Corrupt Organizations Act applies to persons who
conduct activities of wholly illegitimate enterprise whose activities affect
interstate commerce through pattern of racketeering activity. 18
U.S.C.A. ss 1962, 1962(c).
[16] CRIMINAL LAW
Racketeer Influenced and Corrupt Organizations Act applies to persons who
conduct activities of wholly illegitimate enterprise whose activities affect
interstate commerce through pattern of racketeering activity. 18
U.S.C.A. ss 1962, 1962(c).
[17] COMMERCE
Former church member who, in claim for treble damages under civil remedy
provision of Racketeer Influenced and Corrupt Organizations Act on her own
behalf and on behalf of class of all those who had paid money or property to
church of particular ideology, its employees or agent, referred to subject
church as both enterprise and as "person" from whom class sought treble damages
failed to state claim under section of RICO providing that it shall be unlawful
for any person "employed by or associated with any enterprise to conduct or
participate * * * in the conduct of such enterprise's affairs * * * " through a
practice of racketeering activity since it is only a person, or one associated
with an enterprise, not the enterprise itself, who can violate the provisions
of such section. 18 U.S.C.A. ss 1961(3, 4), 1962(c), 1964(c).
[17] RACKETEER INFLUENCED AND CORRUPT ORGANIZATIONS
Former church member who, in claim for treble damages under civil remedy
provision of Racketeer Influenced and Corrupt Organizations Act on her own
behalf and on behalf of class of all those who had paid money or property to
church of particular ideology, its employees or agent, referred to subject
church as both enterprise and as "person" from whom class sought treble damages
failed to state claim under section of RICO providing that it shall be unlawful
for any person "employed by or associated with any enterprise to conduct or
participate * * * in the conduct of such enterprise's affairs * * * " through a
practice of racketeering activity since it is only a person, or one associated
with an enterprise, not the enterprise itself, who can violate the provisions
of such section. 18 U.S.C.A. ss 1961(3, 4), 1962(c), 1964(c).
[17] CRIMINAL LAW
Former church member who, in claim for treble damages under civil remedy
provision of Racketeer Influenced and Corrupt Organizations Act on her own
behalf and on behalf of class of all those who had paid money or property to
church of particular ideology, its employees or agent, referred to subject
church as both enterprise and as "person" from whom class sought treble damages
failed to state claim under section of RICO providing that it shall be unlawful
for any person "employed by or associated with any enterprise to conduct or
participate * * * in the conduct of such enterprise's affairs * * * " through a
practice of racketeering activity since it is only a person, or one associated
with an enterprise, not the enterprise itself, who can violate the provisions
of such section. 18 U.S.C.A. ss 1961(3, 4), 1962(c), 1964(c).
[18] COMMERCE
Class action counts of former church member's complaint against churches of
particular ideology, seeking damages for money class spent in purchasing
literature and auditing, alleging that class had to flee about United States
and suffered emotional distress, and otherwise alleging various types of
damages which did not constitute commercial injury, failed to state claim for
relief under civil remedy provision of Racketeer Influenced and Corrupt
Organizations Act. 18 U.S.C.A. s 1964(c).
[18] RACKETEER INFLUENCED AND CORRUPT ORGANIZATIONS
Class action counts of former church member's complaint against churches of
particular ideology, seeking damages for money class spent in purchasing
literature and auditing, alleging that class had to flee about United States
and suffered emotional distress, and otherwise alleging various types of
damages which did not constitute commercial injury, failed to state claim for
relief under civil remedy provision of Racketeer Influenced and Corrupt
Organizations Act. 18 U.S.C.A. s 1964(c).
[18] CRIMINAL LAW
Class action counts of former church member's complaint against churches of
particular ideology, seeking damages for money class spent in purchasing
literature and auditing, alleging that class had to flee about United States
and suffered emotional distress, and otherwise alleging various types of
damages which did not constitute commercial injury, failed to state claim for
relief under civil remedy provision of Racketeer Influenced and Corrupt
Organizations Act. 18 U.S.C.A. s 1964(c).
[19] COMMERCE
Violation of Racketeer Influenced and Corrupt Organizations Act does not depend
upon existence of competitive injury. 18 U.S.C.A. s 1964(c).
[19] RACKETEER INFLUENCED AND CORRUPT ORGANIZATIONS
Violation of Racketeer Influenced and Corrupt Organizations Act does not depend
upon existence of competitive injury. 18 U.S.C.A. s 1964(c).
[19] CRIMINAL LAW
Violation of Racketeer Influenced and Corrupt Organizations Act does not depend
upon existence of competitive injury. 18 U.S.C.A. s 1964(c).
[20] COMMERCE
In construing word "property" in civil remedy provision of Racketeer Influenced
and Corrupt Organizations Act, courts should be sensitive to the statute's
commercial orientation and to Congress' obvious intention to restrict plaintiff
class. 18 U.S.C.A. s 1964(c).
[20] RACKETEER INFLUENCED AND CORRUPT ORGANIZATIONS
In construing word "property" in civil remedy provision of Racketeer Influenced
and Corrupt Organizations Act, courts should be sensitive to the statute's
commercial orientation and to Congress' obvious intention to restrict plaintiff
class. 18 U.S.C.A. s 1964(c).
[20] CRIMINAL LAW
In construing word "property" in civil remedy provision of Racketeer Influenced
and Corrupt Organizations Act, courts should be sensitive to the statute's
commercial orientation and to Congress' obvious intention to restrict plaintiff
class. 18 U.S.C.A. s 1964(c).
[21] COMMERCE
Congress did not intend civil remedy provision of Racketeer Influenced and
Corrupt Organizations Act to afford remedy to every consumer who can trace
purchase of product to violation of section of Act prohibiting person employed
by or associated with interstate enterprise from conducting enterprise's
affairs through pattern of racketeering activity. 18 U.S.C.A. ss 1962,
1962(c), 1964(c).
[21] RACKETEER INFLUENCED AND CORRUPT ORGANIZATIONS
Congress did not intend civil remedy provision of Racketeer Influenced and
Corrupt Organizations Act to afford remedy to every consumer who can trace
purchase of product to violation of section of Act prohibiting person employed
by or associated with interstate enterprise from conducting enterprise's
affairs through pattern of racketeering activity. 18 U.S.C.A. ss 1962,
1962(c), 1964(c).
[21] CRIMINAL LAW
Congress did not intend civil remedy provision of Racketeer Influenced and
Corrupt Organizations Act to afford remedy to every consumer who can trace
purchase of product to violation of section of Act prohibiting person employed
by or associated with interstate enterprise from conducting enterprise's
affairs through pattern of racketeering activity. 18 U.S.C.A. ss 1962,
1962(c), 1964(c).
[22] COMMERCE
Courts should confine civil remedy provision of Racketeer Influenced and
Corrupt Organizations Act to business loss from racketeering injuries. 18
U.S.C.A. s 1964(c).
[22] RACKETEER INFLUENCED AND CORRUPT ORGANIZATIONS
Courts should confine civil remedy provision of Racketeer Influenced and
Corrupt Organizations Act to business loss from racketeering injuries. 18
U.S.C.A. s 1964(c).
[22] CRIMINAL LAW
Courts should confine civil remedy provision of Racketeer Influenced and
Corrupt Organizations Act to business loss from racketeering injuries. 18
U.S.C.A. s 1964(c).
[23] COMMERCE
Racketeer Influenced and Corrupt Organizations Act is not broad enough to
embrace every fraud action. 18 U.S.C.A. ss 1961(1), 1962, 1962(c),
1964(c).
[23] RACKETEER INFLUENCED AND CORRUPT ORGANIZATIONS
Racketeer Influenced and Corrupt Organizations Act is not broad enough to
embrace every fraud action. 18 U.S.C.A. ss 1961(1), 1962, 1962(c),
1964(c).
[23] CRIMINAL LAW
Racketeer Influenced and Corrupt Organizations Act is not broad enough to
embrace every fraud action. 18 U.S.C.A. ss 1961(1), 1962, 1962(c),
1964(c).
[24] COMMERCE
Class action count of former church member's complaint against churches of
particular ideology, alleging that churches and others had committed various
criminal acts within purview of section of Racketeer Influenced and Corrupt
Organizations Act defining racketeering activity and that commission of such
criminal acts contradicted representations made and relied upon concerning
nature of church, failed to state claim for which relief could be
granted where it failed to identify any specific predicate acts or to
establish that they were committed within Act's required time period, and
former church member did not claim that alleged acts caused her any harm but,
rather, in effect attempted to recast her fraud and contract actions. 18
U.S.C.A. ss 1961(1, 5), 1962, 1962(c), 1964(c).
[24] RACKETEER INFLUENCED AND CORRUPT ORGANIZATIONS
Class action count of former church member's complaint against churches of
particular ideology, alleging that churches and others had committed various
criminal acts within purview of section of Racketeer Influenced and Corrupt
Organizations Act defining racketeering activity and that commission of such
criminal acts contradicted representations made and relied upon concerning
nature of church, failed to state claim for which relief could be
granted where it failed to identify any specific predicate acts or to
establish that they were committed within Act's required time period, and
former church member did not claim that alleged acts caused her any harm but,
rather, in effect attempted to recast her fraud and contract actions. 18
U.S.C.A. ss 1961(1, 5), 1962, 1962(c), 1964(c).
[24] CRIMINAL LAW
Class action count of former church member's complaint against churches of
particular ideology, alleging that churches and others had committed various
criminal acts within purview of section of Racketeer Influenced and Corrupt
Organizations Act defining racketeering activity and that commission of such
criminal acts contradicted representations made and relied upon concerning
nature of church, failed to state claim for which relief could be
granted where it failed to identify any specific predicate acts or to
establish that they were committed within Act's required time period, and
former church member did not claim that alleged acts caused her any harm but,
rather, in effect attempted to recast her fraud and contract actions. 18
U.S.C.A. ss 1961(1, 5), 1962, 1962(c), 1964(c).
[25] TORTS
Former church member, who alleged that churches of particular ideology and
others had systematically disclosed auditing information obtained from subjects
to control and manipulate them and that contents of her own auditing file were
disclosed, had failed to state claim for intentional infliction of emotional
distress where she alleged no specific disclosures and only one complaint
specified was letter to her attorney.
[26] DAMAGES
Church's exhorting member to sever family and marital ties and to depend solely
on church for emotional support did not constitute kind of extreme and
outrageous action which would support claim for intentional infliction of
emotional distress.
[27] LABOR RELATIONS
Former church member had failed to state claim against church of particular
ideology under Fair Labor Standards Act, even considering allegations that she
was promised some compensation for her services, where complaint failed to
allege facts sufficient to show that she was person whose employment
contemplated compensation, that employer-employee relationship was ever
established between her and church, or that labor she provided related to
commerce or production of goods for commerce. Fair Labor Standards Act of
1938, ss 1, 6, 29 U.S.C.A. ss 201, 206.
[28] LIMITATION OF ACTIONS
A court may dismiss an action owing to the running of a statute of limitations
if the defect appears on the face of the complaint. Portal to Portal Act of
1947, s 6(a), 29 U.S.C.A. s 255(a).
[29] CONSTITUTIONAL LAW
Adjudication of count of former church member's complaint against church of
particular ideology, alleging that church promised that she would receive
benefits, including training, room and board, and various work and research
opportunities, after undergoing period of auditing, and that such
representations were fraudulent, would not be barred by First Amendment where,
even if church were entitled to protection as religion, adjudicating claims
which count asserted would not force court to consider truth or falsity of
religious doctrine. U.S.C.A.Const.Amend. 1.
[29] RELIGIOUS SOCIETIES
Adjudication of count of former church member's complaint against church of
particular ideology, alleging that church promised that she would receive
benefits, including training, room and board, and various work and research
opportunities, after undergoing period of auditing, and that such
representations were fraudulent, would not be barred by First Amendment where,
even if church were entitled to protection as religion, adjudicating claims
which count asserted would not force court to consider truth or falsity of
religious doctrine. U.S.C.A.Const.Amend. 1.
[30] FEDERAL CIVIL PROCEDURE
Former church member's allegations that church promised that she would receive
benefits, including training, room and board, and various work and research
opportunities, after undergoing period of auditing, and that such
representations were fraudulent, fell short of specificity required for claim
of fraud with respect to time, place, manner and content of alleged
misrepresentations. Fed.Rules Civ.Proc. Rule 9(b), 28 U.S.C.A.
[31] CONSPIRACY
It is necessary to plead fraudulent conspiracy with enough specificity to
inform multiple defendants of facts forming basis of conspiracy charge.
Fed.Rules Civ.Proc. Rule 9(b), 28 U.S.C.A.
[32] CONSPIRACY
Conspiracies described in sweeping and general terms cannot serve as basis for
cause of action, and may be dismissed. Fed.Rules Civ.Proc. Rule 9(b), 28
U.S.C.A.
[33] CONSTITUTIONAL LAW
First Amendment protects utterances which relate to religion but does not
confer same license for representations based on other sources of belief or
verification. U.S.C.A.Const.Amend. 1.
[34] FRAUD
Statements citing science as their source may provide basis for fraud action
even though same contention would not support such action if it relied
on religious belief for its authority. U.S.C.A.Const.Amend. 1.
[35] TORTS
Former church member's allegation that, pursuant to church doctrine, agents of
church engaged in course of conduct, including slanderous telephone calls to
her neighbors and employer, physical threats, and assault with automobile,
which was designed to dissuade her from pursuing her legal rights stated claim
upon which relief could be granted for intentional infliction of emotional
distress.
[36] FRAUD
Claim for relief based upon fraud must include proof that defendant knowingly
made false statement.
[37] CONSTITUTIONAL LAW
Although free exercise clause protects all religions, old and new alike, once
its protection attaches, in determining whether that protection applies courts
may require newer faith to demonstrate that it is, in fact, entitled to
protection as a religion. U.S.C.A.Const.Amend. 1.
[38] FEDERAL CIVIL PROCEDURE
Question whether counts of former church member's complaint alleging that she
was fraudulently induced to become member by false representations concerning
nature of church movement and content of church doctrine stated claim upon
which relief could be granted could not be resolved on motion to dismiss and
motion would thus be treated as motion for summary judgment where to take all
of former member's allegations as true would strip church of all First
Amendment protections without any factual showing by former member while to
treat church as religion entitled to full panoply of First Amendment rights
would be to ignore allegations of complaint, and thus ascertaining church's
status required reference to extrinsic materials. U.S.C.A.Const.Amend. 1.
[39] CONSTITUTIONAL LAW
In determining whether First Amendment protects particular belief as religious,
courts may not inquire into truth or falsity of belief in question or conduct
general inquiry into whether individual members of religion hold in good faith
the belief they assert; rather, testing sincerity of religious belief involves
somewhat truncated inquiry which must focus on extrinsic evidence.
U.S.C.A.Const.Amend. 1.
*1129 Thomas Greene, Michael J. Flynn, William Sheridan, Thomas Hoffman,
Philip Mulvey, Boston, Mass., for plaintiff.
Nancy Gertner, Thomas Shapiro, Silverglate, Gertner & Shapiro, Boston, Mass.,
for defendants.
MEMORANDUM OF DECISION AND ORDERS
GARRITY, District Judge.
This case raises a number of questions regarding the jurisdiction of this
court, the adequacy of plaintiff's pleadings, and the reach of various federal
statutes and constitutional guarantees. The decisions we state below follow a
period of procedural maneuvering between the parties. We preface our discussion
of the substantive issues presented for decision by reciting relevant portions
of that history.
Procedural History
Seeking relief for herself and on behalf of a class she purports to represent,
plaintiff La Venda Van Schaick, a resident of Massachusetts, brought this
action originally against the Churches of Scientology of California, Nevada,
Florida, Washington, D. C., and New York, and against numerous other
corporate and individual defendants, on December 13, 1979. Service was made
upon the five above-mentioned defendants by delivery of the summons to the
director of legal affairs of the Church of Scientology of Boston. The defendant
churches filed a motion to dismiss on January 16, 1980. They argued, either
then or later, that the court lacked jurisdiction over the defendants, that
service had been insufficient, that venue was improper, that the First
Amendment *1130 barred inquiry into the subject matter of plaintiff's
complaint, that the complaint failed to state a claim upon which relief could
be granted, that the plaintiff's pleadings were defective and that various
parties were improperly named or joined. Plaintiff filed an amended complaint
on May 22, 1980 in which she 1) dropped her claims against all defendants
except the five aforementioned churches and two individuals, L. Ron Hubbard,
the founder of Scientology, and Mary Sue Hubbard, the second-ranking person
in the Scientology hierarchy, 2) sought to add an additional party plaintiff,
Sylvana Garritano, and 3) asserted additional claims against the remaining
defendants. The complaint, as first amended, asserted that defendants were
liable to Van Schaick and Garritano individually for fraud (Counts IV-IX),
intentional infliction of emotional distress (Counts X-XII), breach of
contract (Count XIII) and violation of the Fair Labor Standards Act, 29
U.S.C. ss 201, 206 (Count XIV). In addition, the amended complaint sought to
state a class action against defendants for treble damages under the civil
remedy provision of the Racketeer Influenced Corrupt Organizations Act (RICO),
18 U.S.C. ss 1961, 1964 (Counts I-III). Defendants objected to
plaintiff's attempt to add a party plaintiff. The court heard oral argument on
September 8 and September 10, 1980 and received numerous briefs from the
parties regarding plaintiff's motion to amend her complaint and defendants'
motion to dismiss.[FN1]
FN1. On August 14, 1981, before disposition of these motions, Garritano
moved to substitute counsel. Her affidavit cited "irreconcilable
differences" with Van Schaick's attorney, who had been acting as her
counsel as well. We allowed that motion on August 21, 1981.
Plaintiff moved, on September 4, 1981, for a temporary restraining order and
for other injunctive relief to prevent the destruction and dissemination of
material allegedly stolen by defendants from the office and trash of
plaintiff's attorney and in the possession of the Church of Scientology of
California and of defendants' lawyers. Plaintiffs also sought the return of
those documents. We heard argument on that contested motion on the same day. At
the hearing, we ruled that this court had personal jurisdiction over the Church
of Scientology of California and issued a protective order from the bench. That
order, the essence of which was subsequently written and entered on September
14, 1981, directed defendants' attorneys to produce for plaintiff's attorney's
inspection some 800 allegedly stolen documents and directed the Church of
Scientology of California not to destroy or disseminate those documents.
On September 8, 1981, plaintiff moved to amend her complaint again and filed a
proposed second amended complaint. Plaintiff stated that her previous motion to
amend her complaint was withdrawn. The second amended complaint dropped
plaintiff's claims against all defendants except the Churches of Scientology of
California and Nevada and the two Hubbards.[FN2] It also dropped Garritano's
claims and changed various assertions presented in the first amended complaint.
On September 17, 1981, we directed Garritano to file a pleading seeking either
to participate or withdraw from these proceedings. Garritano subsequently
advised the court that she had reached a settlement with defendants, which,
after review, this court approved. Accordingly, she withdrew from the case,
leaving Van Schaick the sole named plaintiff.
FN2. Plaintiff has not served the individual defendants, L. Ron Hubbard
and Mary Sue Hubbard.
The Church of Scientology of California moved on December 24, 1981 that we
reconsider our finding of personal jurisdiction over it and that we conduct an
evidentiary hearing to resolve that question. We see no point in embellishing
upon that ruling at this juncture, but may, in later ruling on the motion to
reconsider, discuss further the issues regarding personal jurisdiction.
This case is within the subject matter jurisdiction of this court under 28
U.S.C. s 1332, 29 U.S.C. s 206 and 18 U.S.C. s 1964(c). We decide below some
of defendants' motions to dismiss for lack of *1131 personal jurisdiction
and insufficiency of service, improper venue, failure to state a claim, and on
the grounds that the First Amendment bars this action in its entirety.
Motion to Amend Complaint
Under Federal Rule of Civil Procedure 15(a) a party may amend its pleadings
once as a matter of course at any time before a responsive pleading is served.
Since defendants' motion to dismiss is not a "responsive pleading", McDonald
v. Hall, 1 Cir. 1978, 579 F.2d 120, 121, plaintiff was entitled to amend her
complaint without leave of court initially. Defendant objected, however, to
plaintiff's attempt to add a party-plaintiff without leave of court, arguing
that F.R.C.P. 21, which requires a court order to add a party, not
F.R.C.P. 15, governs. And, defendants argued that the addition of Garritano
as a plaintiff would fail to satisfy the tests for permissive joinder of
F.R.C.P. 20. We need not decide that issue, however. Plaintiff Van Schaick
now moves the court for leave to file a second amended complaint. She no longer
seeks to add Garritano as a party-plaintiff, and Garritano, having reached a
settlement with defendants, no longer seeks to intervene. Of course, a motion
to file a second amended complaint requires permission of the court. But that
permission is to be "freely given when justice so requires" under Rule
15(a), Fed.R.Civ.P. Accordingly, we grant plaintiff Van Schaick's motion to
amend and consider the complaint filed September 8, 1981 as her current
pleading.
Motion to Dismiss
For the purpose of this motion to dismiss, we assume that the following
allegations, contained in Van Schaick's second amended complaint, are true.
Beginning in October, 1971, in Las Vegas, Nevada, Bob Harvey, an agent of the
California and Nevada Churches represented to Van Schaick that auditing, the
central practice of Scientology,[FN3] was scientifically guaranteed to have
certain beneficial physical, mental, and social consequences for the plaintiff.
Similar claims were shown to her in books and documents written by L. Ron
Hubbard and disseminated to Nevada by the California Church through the mail.
In March of 1972, in Nevada, Harvey also represented that auditing is
confidential; that Scientology is a "law-abiding, religious, scientific
organization," and that L. Ron Hubbard is a nuclear physicist with degrees from
George Washington University and Princeton.
FN3. Auditing is a process during which a Scientology employee or agent
(Auditor) uses a set of questions and drills, in conjunction with a
mechanical device similar to a lie detector (the Hubbard E-meter) to elicit
personal information from the subject, for the alleged purpose of
psychotherapy. In order to obtain auditing, the subject signs a contract
with the Church. The auditor asks questions which locate "Buttons"-a
conscious or subconscious indication or response. To help locate "buttons",
the auditor uses a Hubbard E-meter, a device which measures skin voltage.
During auditing, the auditor pursues lines of questioning on highly
personal subjects ("rundowns") to locate the subject's "buttons". The
auditor then makes a written record of the disclosures made.
Based upon these representations, plaintiff paid $575 to the Nevada and
California Churches for books and auditing courses between October 1971 and
March 1972, and continued to purchase auditing services until January 1974.
During this period, Van Schaick worked for the Nevada and California Church
full time. She left Scientology in 1974.
During the summer of 1975, the plaintiff was contacted in Las Vegas, Nevada,
by her auditor, Pam Bevan, who warned her that unless she returned to the
Nevada Church, she would be harassed by the Church and its adherents.[FN4]
During the same period, she *1132 was locked in a furnitureless room for a
period of two weeks against her will at the offices of the Nevada Church in Las
Vegas, and was audited for alleged "crimes" committed against the Church. In
response she paid approximately $3,000 to the Church and, pursuant to an order
to "disconnect" from her husband, obtained a divorce. In April of 1977, the
plaintiff went to Clearwater, Florida, for additional auditing, and, in April
through May of that year, paid $5,000 to the Florida and California Churches
for new courses, books, and auditing. Returning to Nevada in April 1977, Van
Schaick remained with the Church until March 1979, when she was declared a
"suppressive person" and fled to Boston, in fear of harassment from the Church.
FN4. Plaintiff alleges that it is Church policy to harass ex-members, and
that this policy is explicitly authorized in the "Fair Game Doctrine" which
states, inter alia:
"Every S. P. (Suppressive Person) Order Fair Game. May be deprived or
injured by any means by any Scientologist. May be tricked, sued, or
destroyed."
For purposes of the pending motions, we ignore defense counsel's
representation at oral argument that the Fair Game Doctrine had been
misconstrued and was repealed in 1968.
In Boston, Massachusetts, on or about September, 1979, the Nevada, California,
and Boston Churches and L. Ron Hubbard, acting in concert, attempted to
dissuade plaintiff from pursuing her legal remedies by relaying and eventually
disclosing her confidential auditing information to her attorney in Boston, by
sending Scientologists from New York and Nevada to threaten her, and by causing
the Boston Church to harass her.
Jurisdiction under the Conspiracy Theory
[1] The plaintiff here claims that this court has personal jurisdiction over
the corporate defendants under the conspiracy theory of jurisdiction. The
theory, which evolved in a number of cases alleging civil conspiracies, is
based upon the notion that the acts of a conspirator in furtherance of a
conspiracy may be attributed to the members of the conspiracy for establishing
jurisdiction over the person. While the mere presence of a conspirator within
the forum state is not sufficient to permit personal jurisdiction over the non-
resident co-conspirators, certain additional connections between the conspiracy
and the forum state will support the exercise of jurisdiction. These additional
connections exist where (1) substantial acts in furtherance of the conspiracy
are performed in the forum state and (2) the co-conspirator knew or should know
that the acts would be performed there. Leasco Data Processing Equipment
Corp. v. Maxwell, S.D.N.Y., 1970, 319 F.Supp. 1256, aff'd in part, rev'd and
remanded in part, 468 F.2d 1326 (2 Cir., 1972), on remand, 68 F.R.D. 178
(1974); Gemini Enterprises, Inc. v. WFMY Television Corp., M.D.N.C., 1979,
470 F.Supp. 559, 564, and cases cited therein.
At the outset we note that not all federal courts considering the question
have accepted the conspiracy theory as a basis for asserting personal
jurisdiction. See I. S. Joseph Co. v. Mannesmann Pipe and Steel Corp.,
D.Minn., 1976, 408 F.Supp. 1023. Moreover, those federal courts which have
exercised jurisdiction under the conspiracy rationale have done so on the basis
of the long-arm statutes applicable in the forum states, Mandelkorn v.
Patrick et al., D.D.C., 1973, 359 F.Supp. 692; Ghazoul v. International
Management Services, Inc., S.D.N.Y., 1975, 398 F.Supp. 307; and no
Massachusetts decision has ever adopted the theory. We note, too, that the
Court of Appeals for the First Circuit has recently declined to decide whether
the Massachusetts long-arm statute contemplates the conspiracy theory.
Glaros v. Perse, 1 Cir., 1980, 628 F.2d 679, 682 n. 4.
[2] As the formulation stated above makes clear, plaintiff's broad, general
allegations regarding the conspiratorial nature of the Scientology movement,
even if proved, would not warrant the assertion of jurisdiction under the
conspiracy theory. The theory gives this court jurisdiction only over any
claims which arise from acts within the commonwealth. As the Court of Appeals
for the First Circuit recently observed in Glaros v. Perse, supra, courts
which have recognized the conspiracy theory have often required the plaintiff
"to pinpoint a connection between the out-of-state defendants and specific
acts" in the forum state.
[3] Although the plaintiff here does pinpoint some connection between the
out-of-state defendants and occurrences in Massachusetts, she fails to submit
detailed factual allegations connecting each of the nonresident *1133
defendants with events occurring in this state. Although the courts are divided
concerning the necessity of making such a showing, see discussion in
McLaughlin v. Copeland, D.Md., 1977, 435 F.Supp. 513, 529-33, and the
question has not been resolved in this circuit, Perse, supra at 682 n.4, we
observe that the plaintiff's affidavit differs from the allegations in her
complaint with respect to the nature and extent of each church's participation
in the alleged conspiracy to harass her in Massachusetts, and conclude that, on
the record before us, Van Schaick's reliance on the conspiracy theory is based
on nothing but speculation and conjecture on the essential issue of connecting
each of the corporate defendants with acts or transactions within the forum
state. She simply hopes "somehow and somewhere to find enough facts to create
grounds for jurisdiction." Cf. Socialist Workers Party v. Attorney General
of the United States, S.D.N.Y., 1974, 375 F.Supp. 318, 325. We therefore
conclude that there is an insufficient factual foundation for the assertion of
personal jurisdiction under the conspiracy theory in this case.
Venue
[4] The defendant churches also argue that venue is improper in this
district. The controlling venue statutes are 18 U.S.C. s 1965 for the RICO
claims and 28 U.S.C. s 1391(b) and s 1391(c) for the other claims
plaintiff asserts.[FN5]
FN5. Since the Fair Labor Standards Act does not contain a special venue
provision, the general venue statute controls actions under the Act.
Goldberg v. Wharf Constructers, N.D.Ala., 1962, 209 F.Supp. 499, 501.
Venue under RICO
[5][6] Title 18 U.S.C. s 1965(a) provides that venue is proper for RICO
claims where a defendant "resides, is found, has an agent, or transacts his
affairs." For a corporate defendant in a private action under this section to
be "found" in the district within the meaning of this section, it must be
present in the district by its officers and agents carrying on the business of
the corporation. King v. Vesco, N.D.Cal., 1972, 342 F.Supp. 120. Since the
California Church is carrying on the business of the corporation in this
district, both directly, through its own agents, and indirectly, through the
Boston Church, venue is proper in this district under 18 U.S.C. s 1965, as
to the California Church.
[7][8][9] It is unclear whether, or in what respects, Van Schaick intends to
include the Nevada church as a defendant in her RICO counts, but, in any event,
we conclude that venue is improper here with respect to that defendant. Since
that defendant does not meet the test for corporate residence enunciated in
King v. Vesco, supra, venue is improper as to it in this district under
18 U.S.C. s 1965(a). Nor is venue proper here as to this defendant under the
general venue provision, 28 U.S.C. s 1391(b).[FN6] Therefore, the RICO
claims, insofar as they pertain to the Nevada Church, must be dismissed.
FN6. The special venue provision found in 18 U.S.C. s 1965 is not
intended to be exclusive, but is intended to liberalize the existing venue
provisions. Therefore, where venue is improper under s 1965(a), it is
appropriate to inquire whether the action can be maintained under the
general venue statute, 28 U.S.C. s 1391(b). Farmers Bank of State of
Del. v. Bell Mortg. Corp., D.Del., 1978, 452 F.Supp. 1278, 1280-1281.
Section 1391(b) provides that venue is proper where the cause of action
arose. But since almost all of the acts upon which plaintiff's RICO counts
are predicated occurred outside of Massachusetts, none of her RICO claims
"arose" in this district.
Venue for Diversity and Fair Labor Standards Act Claims
Since this is a court action in which the court's subject matter jurisdiction
does not rest solely on diversity of citizenship, the applicable venue
provision for the remaining counts is 28 U.S.C. s 1391(b). Under these
circumstances it provides that venue is proper "only in the judicial district
where all defendants reside, or in which the claim arose .... Corporate
residence, for venue purposes, is defined in 28 U.S.C. s 1391(c) which
states:
*1134 A corporation may be sued in any judicial district in which it is
incorporated or licensed to do business or is doing business, and such judicial
district shall be regarded as the residence of such corporation for venue
purposes.
[10][11] Since we have held that the California Church conducts business
here continuously and systematically, both directly and through the Boston
Church, it is "doing business" in this district within the meaning of 28
U.S.C. s 1391(c). Therefore, venue is proper here for the California Church,
the only corporate defendant over which we have personal jurisdiction with
respect to the diversity and Fair Labor Standards Act claims.[FN7]
FN7. The California Church argues that even if its own business activities
here are sufficiently extensive to meet the venue requirements of 28
U.S.C. s 1391(c), venue for the entire action is still improper in this
district because the venue requirements of 28 U.S.C. s 1391(b) have not
been met with respect to the individual defendants. But the defense of
improper venue is personal to the party to whom it applies, and a resident
defendant may not avail himself of a dismissal or transfer due to improper
venue over a nonresident, unless the latter is an indispensable party.
Camp v. Gress, 1919, 250 U.S. 308, 316, 39 S.Ct. 478, 481, 63 L.Ed.
997; Vance Trucking Co. v. Canal Insurance Co., 4 Cir., 1964, 338 F.2d
943, 944; Goldberg v. Wharf Constructers, N.D.Ala., 1962, 209 F.Supp.
499, 503-504.
Motion to Dismiss for Failure to State a Claim
Having decided that this court has jurisdiction over the Church of California
and that venue is proper in this district, we turn now to the merits of
defendant's motion to dismiss each count of plaintiff's complaint. The
defendant churches argued that plaintiff's first amended complaint must be
dismissed because the doctrines and actions alleged as the basis for each cause
of action are religious beliefs and practices.[FN8] The plaintiff, on the other
hand, urges that although the Church of California claims to be a religious
institution, it is, in fact, part of an organized commercial and criminal
undertaking engaged in fraud and that, therefore, none of the First Amendment
protections applicable to religions should be accorded defendant.
FN8. Although defendants have not addressed themselves to plaintiff's
second amended complaint, we assume, based on defendants' briefs and oral
argument, that they would raise the same objections to plaintiff's most
recent pleading.
Quite clearly, the extent to which the religious clauses of the First
Amendment protect the Church of Scientology is a question relevant to this
case. But a review of plaintiff's pleading reveals that the court need not
reach the First Amendment issues to rule on defendant's motion to dismiss some
of the counts. Some of plaintiff's counts can be, and are, dismissed on grounds
other than the First Amendment.
[12][13][14][15] On the other hand, in some instances even the First
Amendment, were it to apply, would not insulate a defendant religious
organization or its members from liability. The Supreme Court has recognized
that the First Amendment's protection "... embraces two concepts,-freedom to
believe and freedom to act. The first is absolute but, in the nature of things,
the second cannot be. Conduct remains subject to regulation for the protection
of society." Cantwell v. Connecticut, 1940, 310 U.S. 296, 303-304, 60 S.Ct.
900, 903, 84 L.Ed. 1213. Thus even if we were to find that the California
Church is a religious institution, the free exercise clause of the First
Amendment would not immunize it from all common law causes of action alleging
tortious activity. Turner v. Unification Church, D.R.I., 1978, 473 F.Supp.
367, 371, aff'd, 602 F.2d 458 (1979). Nor does the First Amendment exempt
religious groups from all regulatory statutes. See, e.g., United States v.
Lee, --- U.S. ----, 102 S.Ct. 1051, 71 L.Ed.2d 127, 1982; Heffron v.
International Society for Krishna Consciousness, 1981, 452 U.S. 640, 101 S.Ct.
2559, 69 L.Ed.2d 298; Prince v. Massachusetts, 1944, 321 U.S. 158, 64 S.Ct.
438, 88 L.Ed. 645; Reynolds v. United States, 1878, 98 U.S. 145, 25 L.Ed.
244; The Founding Church of Scientology of Washington v. United States,
1969, 133 U.S.App.D.C. 229, *1135 409 F.2d 1146; Mitchell v. Pilgrim
Holiness Church Corp., 7 Cir. 1954, 210 F.2d 879, cert. den. 1954, 347 U.S.
1013, 74 S.Ct. 867, 98 L.Ed. 1136. Whether or not such immunity exists depends,
in part, on whether the adjudication of the claim would require a judicial
determination of the validity of a religious belief, United States v.
Ballard, 322 U.S. 78, 64 S.Ct. 882, 88 L.Ed. 1148 and, if not, on whether
application of the regulation "is the least restrictive means of achieving some
compelling state interest." Thomas v. Review Board of the Indiana Employment
Security Division, 1981, 450 U.S. 707, 101 S.Ct. 1425, 67 L.Ed.2d 624. See
also Sherbert v. Verner, 1963, 374 U.S. 398, 406, 83 S.Ct. 1790, 1795, 10
L.Ed.2d 965; West Virginia State Board of Education v. Barnette, 1943, 319
U.S. 624, 639, 63 S.Ct. 1178, 1186, 87 L.Ed. 1628; Cantwell v. Connecticut,
1940, 310 U.S. 296, 304, 60 S.Ct. 900, 903, 84 L.Ed. 1213. Causes of action
based upon some proscribed conduct may, thus, withstand a motion to dismiss
even if the alleged wrongdoer acts upon a religious belief or is organized for
a religious purpose.
We discuss first those counts which we dismiss on grounds independent of the
First Amendment. We then turn to those claims against which the First Amendment
affords no immunity.
RICO Claims
The plaintiff brings Counts I-III as class action claims for treble damages
under the civil remedy provisions of RICO, 18 U.S.C. s 1964(c),[FN9] on her
own behalf and on behalf of all those who have paid money or property to any
Church of Scientology, its employees or agents, "including defendants," as a
result of violations of s 1962 of the RICO statute. The subsection of the
Act on which plaintiff apparently [FN10] relies prohibits any person (including
a corporation) employed by or associated with any interstate enterprise, from
conducting the enterprise's affairs through a pattern of racketeering
activity, 18 U.S.C. s 1962(c). A "pattern of racketeering activity" is
defined as the commission of two or more specific criminal acts, including
extortion and mail fraud, within a ten-year period, 18 U.S.C. s 1961.
FN9. 18 U.S.C. s 1964(c) states:
Any person injured in his business or property by reason of a violation of
section 1962 of this chapter may sue therefor in any appropriate United
States district court and shall recover threefold the damages he sustains
and the cost of the suit, including a reasonable attorney's fee.
FN10. Plaintiff's complaint itself fails to specify which subsection of
s 1962 defendants are alleged to have violated; however, the memoranda
of law filed subsequently have made it clear that she predicates her claim
on s 1962(c).
[16][17] We note, at the outset, the recent opinion of the Supreme Court in
United States v. Turkette, 1981, 452 U.S. 576, 101 S.Ct. 2524, 69 L.Ed.2d
246 which accorded RICO a more expansive reading than had some earlier lower
courts. Although the Court observed "that the primary purpose of RICO is to
cope with the infiltration of legitimate businesses", Turkette, supra 101
S.Ct. at 2533, it held that "enterprise" as defined in s 1961(4) and as used
in 1962(c) refers to both legitimate and illegitimate enterprises. Thus, after
Turkette, it is clear that RICO applies to persons who conduct the activities
of a wholly illegitimate enterprise (whose activities affect interstate
commerce) through a pattern of racketeering activity. Although Turkette
removes one potential issue from our consideration, it does not establish that
RICO covers the facts and allegations of this case. Indeed, we hold that
plaintiff has failed to state a claim under RICO.
The theory of plaintiff's complaint ignores the express language of 1962(c)
which provides that it shall be unlawful for any person "employed by or
associated with any enterprise to conduct or participate ... in the conduct of
such enterprise's affairs ..." through a practice of racketeering activity. To
be sure, a person under RICO includes a "legal entity", 18 U.S.C. 1961(3).
And an "enterprise" may be either a legal entity or an informal association,
18 U.S.C. 1961(4), as it was in Turkette. But RICO *1136 quite clearly
envisions a relationship between a "person" and an "enterprise" as an element
of the offense which 1962(c) proscribes and for which 1964(c) would subject
the "person" to treble damages.
Plaintiffs fail to specify this relationship. They several times refer to the
Church of Scientology as an enterprise. They seem also to treat the Church of
Scientology as the "person" from whom they seek treble damages. The Church of
Scientology cannot, at once, be both the associated person and the enterprise.
It is only a person, or one associated with an enterprise, not the enterprise
itself, who can violate the provisions of the section.
Moreover, we believe that s 1964(c) does not extend to claims like those
plaintiff asserts. That provision, which is patterned after s 4 of the
Clayton Act, 15 U.S.C. s 15, extends a treble damage remedy to any person
injured in "business or property" by a violation of s 1962. Little
legislative history exists on the clause. But courts which have recently
considered s 1964(c) have interpreted it narrowly. See Adair v. Hunt
International Resources Corp., N.D.Ill.1981, 526 F.Supp. 736, 746; Waterman
Steamship Corp. v. Avondale Shipyards, Inc., E.D.La., 527 F.Supp. 256, 1981
(available on LEXIS, Genfed library, Dist. file); Kleiner v. First National
Bank of Atlanta, N.D.Ga., 526 F.Supp. 1019, 1981; Landmark Savings & Loan v.
Loeb Rhoades, Hornblower & Co., E.D.Mich., 527 F.Supp. 206, 1981, (available on
LEXIS, Genfed library, Dist. file). They have consistently concluded that s
1964(c) must be interpreted with careful attention to the provision's purpose
and have avoided a slavish literalism that would escort into federal court
through RICO what traditionally have been civil actions pursued in state
courts. See Adair v. Hunt International Resources Corp., supra; Waterman
Steamship Corp. v. Avondale Shipyards Inc., supra; Kleiner v. First National
Bank of Atlanta, supra; Landmark Savings & Loan v. Loeb Rhoades,
Hornblower & Co., supra; Salisbury v. Chapman, N.D.Ill., 527 F.Supp. 577,
1981, (available on LEXIS, Genfed library, Dist. file). Just as in the
antitrust context the Supreme Court has held that the Clayton Act's treble
damage provisions are available to remedy only "injury of the type the
antitrust laws were intended to prevent," Brunswick Corp. v. Pueblo Bowl-O-
Mat, Inc., 1977, 429 U.S. 477, 489, 97 S.Ct. 690, 697, 50 L.Ed.2d 701 so, too,
s 1964(c) addresses only a specific sort of injury arising out of
racketeering. Landmark Savings & Loan v. Loeb Rhoades, Hornblower & Co.,
supra; North Barrington Development, Inc. v. Richard Fanslow, No. 80-C2644,
N.D.Ill., October 9, 1980 (available on LEXIS, Genfed library, Dist. file).
Indeed, it is telling that whereas RICO's other criminal and civil penalties
apply generally to violations of s 1962, the remedy which s 1964(c)
prescribes extends only to persons who suffer a specific injury, viz., to their
business or property.
[18][19] Since, as the Court observed in Turkette, "the primary purpose
of RICO is to cope with the infiltration of legitimate businesses, supra 101
S.Ct. at 2533, Congress designed a treble damage provision to protect those
whose businesses had been infiltrated and damaged by the offenses s 1962
proscribes. Although s 1962 reaches other types of offenses, see, e.g.,
United States v. Turkette, supra, to which RICO's other remedies were
addressed, s 1964(c) confers standing to bring a civil action only on those
within a smaller class. Salisbury v. Chapman, supra at n. 4. The cases in
which courts have held that plaintiffs have, or but for some other defect could
have, stated a claim under s 1964(c) have involved business persons engaged
in conventional commercial activity who allegedly suffered commercial injury.
For instance, in Hellenic Lines Ltd. v. O'Hearn, S.D.N.Y.1981, 523 F.Supp.
244, a shipping firm whose employees had paid and received bribes in connection
with a scheme to bill it excessive amounts for the purchase of business related
materials and services was held to state a RICO claim. Similarly, a
teleprompter company that sued various defendants, including the city council
and a business rival, alleging that the rival had received a cable television
franchise by exercising *1137 corrupt influence on the council clearly
suffered the type of business injury RICO addresses. Teleprompter of Erie, Inc.
v. City of Erie, W.D.Pa., May 11, 1981, Civil Action 81-17 Erie (available on
LEXIS, Genfed library, Dist. file) (RICO count dismissed on other grounds).
Judge Skinner recently held that a complaint stated a civil RICO cause of
action where a company alleged that it suffered business injury through
defendants' acquisition of an interest in it through racketeering activity.
Spencer Companies, Inc. v. Agency Rent-A-Car, Inc., D.Mass., November 17, 1981,
Civil Action 81-2097-S. See also Parnes v. Heinold Commodities, Inc.,
N.D.Ill., 1980, 487 F.Supp. 645 (RICO civil claim stated where plaintiff
alleges defendant's racketeering acts caused him loss through commodities
trading). We conclude that these cases reflect proper applications of s
1964(c) to situations in which a defendant's racketeering caused injury to
plaintiff in a business activity.[FN11] The injuries plaintiff alleges here are
plainly of a different nature. Count I apparently seeks damages for money the
plaintiff class spent in purchasing literature and auditing. Such a claim goes
beyond the theory of s 1964(c). Count II alleges no injury to business or
property but rather that plaintiff had to flee about the United States and
suffered emotional distress. Claims can be brought for such damages, but not
under RICO. Finally, the various types of damages Count III alleges do not
constitute commercial injury.
FN11. Judge Duffy's opinion in Hellenic Lines, Ltd. v. O'Hearn, supra,
is not to the contrary. He rejected as "specious" the argument that a
company that had paid allegedly reasonable prices, though ones inflated by
bribes and kickbacks, had not suffered an injury which s 1964(c)
addresses since it was "not hurt competitively by the RICO violation."
Ibid. at 248. We subscribe to Judge Duffy's conclusion that a RICO
violation does not depend upon the existence of a competitive injury.
Although antitrust law proscribes and remedies certain injuries to
competition, RICO does not so directly seek to protect competition. As
Judge Churchill observed, "(c)ompetitive injuries and racketeering
enterprise injuries would frequently overlap, but they are not necessarily
the same." Landmark Savings v. Loeb Rhoades, Hornblower & Co., supra.
Section 1964(c) does not require a "competitive injury" but rather, in
part, a "racketeering enterprise injury" and a plaintiff who has
experienced commercial harm resulting from it.
[20][21][22] To be sure, RICO uses the disjunctive in referring to "business
or property." Yet we believe that phrase must be read with the statute's
primary purpose-to protect legitimate businesses from infiltration by
racketeers-in mind. Thus, in construing "property" courts should be sensitive
to the statute's commercial orientation and to Congress' obvious intention to
restrict the plaintiff class. We do not believe Congress intended s 1964(c)
to afford a remedy to every consumer who could trace purchase of a product to a
violation of s 1962. See Salisbury v. Chapman, supra; North Barrington
Development, Inc. v. Fanslow, supra. Such an interpretation would open the
federal courts to frequent RICO treble damage claims by federalizing much
consumer protection law and by inviting plaintiffs to append RICO claims for
consumer fraud to nonfederal claims thereby achieving treble damage recovery
and a federal forum. Yet the legislative history contains no hint that Congress
intended RICO as a remedy for private plaintiffs alleging consumer fraud. Cf.
Adair v. Hunt International Resources Corp., supra at 747 (s 1964 not
intended as remedy for private plaintiffs alleging securities fraud or
misrepresentations in real estate transactions). Absent a clear statement that
Congress intended such a result, we believe courts should confine s 1964(c)
to business loss from racketeering injuries. Under this analysis, the RICO
claims before us here clearly cannot survive.[FN12]
FN12. We do not reach defendants' contention that civil liability under s
1962(c) and s 1964(c) must be preceded by prior criminal convictions
of two criminal acts, except to note that the opposing citations relied on
by plaintiff, United States v. Malatesta, 5 Cir. 1978, 583 F.2d 748,
cert. den., 1979, 440 U.S. 962, 99 S.Ct. 1508, 59 L.Ed.2d 777, and
United States v. Frumento, 3 Cir. 1977, 563 F.2d 1083, cert. den.,
1978, 434 U.S. 1072, 98 S.Ct. 1256, 55 L.Ed.2d 775, are distinguishable
in their factual situations and holdings. While it is difficult for us to
conclude that Congress, in using the words "indictable" and "punishable"
contemplated that civil liability could result without involvement of the
criminal process, other courts have done so.
*1138 Further, two of plaintiff's three RICO counts are deficient in
additional respects. Count I, which is based on alleged violations of the mail
fraud statute, 18 U.S.C. 1341, apparently intends to claim a violation of
all sections of 18 U.S.C. s 1962. Although plaintiff's complaint is not
entirely clear on this point, plaintiff predicates her class action solely on
Count I, which alleges that defendants violated RICO by failing to conform to
the requirements of the decree in United States v. Article or Device,
D.D.C.1971, 333 F.Supp. 357, ("Affidavit of Michael J. Flynn in Opposition to
Affidavit of Nancy Gertner and in Support of Plaintiff's Motion for Protective
Order," filed December 8, 1981, p. 6). Plaintiff relies on defendants'
alleged non-compliance with orders entered against the Washington, D.C. Church
in the Articles or Device case to establish both the fraudulent nature of the
materials which were "disseminated" and to show an intent to defraud. Given the
factual differences between that case and the instant suit, and considering the
different legal standards applicable under the criminal mail fraud statute at
issue here and the civil Food, Drug & Cosmetic Act, at issue there, we find Van
Schaick's reliance on that litigation misplaced.
Contrary to plaintiff's assertion, the "representations made to plaintiffs in
paragraphs 46 and 47" [FN13] (Plaintiff's Second Amended Complaint, p. 28, P
52) were not adjudged to be fraudulent in United States v. Article or
Device, Etc., D.D.C.1971, 333 F.Supp. 357. Judge Gesell did use the word
"fraud" in the opinion, but the case held only that the representations about
the E-meter there at issue violated the Food, Drug and Cosmetic Act for
mislabelling, a holding that did not require a finding of "fraud" but only of
"falsity."
FN13. Plaintiff's complaint does not contain a paragraph 47.
[23][24] It is unclear from the face of plaintiff's complaint what RICO
violation Count III intends to allege. Plaintiff alleges that defendants have
committed various criminal acts within the purview of 18 U.S.C. s 1961(1),
the section that defines racketeering activity. Commission of these criminal
acts, the complaint alleges, contradicted representations defendants made, and
plaintiff relied upon, concerning the nature of Scientology, viz., that it was
"a non-profit, educational, scientific, religious, law-abiding organization."
(Plaintiff's Seconded Amended Complaint, p. 34, P 65). Although Count III
alleges in conclusory language that various criminal acts were committed
against opponents of Scientology, it fails to identify any specific predicate
acts or to establish that they were committed within the time period set out
in 18 U.S.C. s 1961(5). Even ignoring these deficiencies and assuming for
purposes of argument only that Count III does properly allege a pattern of
racketeering activity and a violation of s 1962, Count III still fails to
suggest any way in which plaintiff was injured in her business or property by
these alleged violations of 18 U.S.C. s 1962(c), as 18 U.S.C. s 1964(c)
requires. Plaintiff does not claim that the alleged acts-obstruction of justice
and criminal investigations, burglary, infiltration of offices, etc. caused her
any harm. Rather, she, in effect, attempts to recast her fraud and contract
actions, which are discussed below, as a RICO claim and thus gain the benefit
of RICO's treble damage provisions. Yet RICO is not broad enough to embrace
every fraud action, Adair v. Hunt International Resources Corp., supra at
747; Waterman Steamship Corp. v. Avondale Shipyards, Inc., et al., supra;
Salisbury et al. v. Chapman et al., supra; North Barrington Development,
Inc. v. Fanslow, supra, and surely this is one that is beyond its reach.[FN14]
FN14. For the reasons stated above, we dismiss plaintiff's three RICO
counts for failure to state a claim upon which relief can be granted. Since
plaintiff predicates her class action on one or more of these RICO counts,
our ruling eliminates the class claims from this case.
Although we dismiss plaintiff's RICO counts on the grounds stated above, we
add that these counts would encounter further *1139 objection if the court
should find Scientology entitled to protection as a religion. In order not to
risk abridging rights which the First Amendment protects, courts generally
interpret regulatory statutes narrowly to prevent their application to
religious organizations. At times, they will require "a clear expression of
Congress' intent" before subjecting religious organizations to regulatory laws
pertaining to other entities, N.L.R.B. v. Catholic Bishop of Chicago, 1979,
440 U.S. 490, 507, 99 S.Ct. 1313, 1322, 59 L.Ed.2d 533. Even where clear proof
of such intent exists, courts have sometimes construed statutes to exclude
religious groups from coverage to avoid "an encroachment by the State into an
area of religious freedom which it is forbidden to enter by the principles of
the free exercise clause of the First Amendment." McClure v. Salvation Army,
5 Cir. 1972, 460 F.2d 553, 560, cert. den. 1972, 409 U.S. 896, 93 S.Ct. 132,
34 L.Ed.2d 153.
Intentional Infliction of Emotional Distress
(Counts X and XII)
Two of plaintiff's counts alleging intentional infliction of emotional
distress fail to state a claim. Plaintiff alleges that, contrary to assurances
that auditing would remain confidential, the corporate defendants
systematically disclosed the auditing information obtained from subjects to
control and manipulate them and that the contents of her own auditing file were
disclosed (Count X). She alleges further that the defendants intentionally
subjected her to emotional distress through the policy of Disconnect (Count
XII).
A cause of action for intentional infliction of emotional distress consists of
four elements: "(1) that the actor intended to inflict emotional distress or
that he knew or should have known that emotional distress was the likely result
of his conduct, ... (2) that the conduct was 'extreme and outrageous,' was
'beyond all possible bounds of decency' and was 'utterly intolerable in a
civilized community,' ... (3) that the actions of the defendant were the cause
of the plaintiff's distress, ... and (4) that the emotional distress sustained
by the plaintiff was 'severe' and of a nature 'that no reasonable man could be
expected to endure it.' " Agis v. Howard Johnson Co., 1976, 371 Mass. 140,
144-145, 355 N.E.2d 315, citing Restatement (Second of Torts) s 46, comments
(d), (i), (j).
[25] Plaintiff does not state facts sufficient to support her claim with
respect to Counts X and XII of her complaint. Count X alleges that defendants
have engaged in a "systematic course of conduct" to disclose information
received through auditing, and that such a scheme has caused plaintiff severe
emotional distress. Yet Count X alleges no specific disclosures, and the only
one the complaint specifies is a letter to plaintiff's attorney.
[26] With respect to Count XII, plaintiff alleges only that the Church
exhorted her to sever family and marital ties and to depend solely on the
Church for emotional support. Neither of these alleged courses of conduct
constitutes the kind of extreme and outrageous action which will support a
claim for intentional infliction of emotional distress. Cf. Agis, supra
(irrational firing of employee with overt implication of unjustified accusation
of theft); Boyle v. Wenk, 1979, 378 Mass. 592, 392 N.E.2d 1053 (private
investigator's harassing phone calls and visits to woman recently released from
hospital); George v. Jordan Marsh Co., 1971, 359 Mass. 244, 268 N.E.2d 915
(harassing debt collection practices). They are similar to the demands for
single-minded loyalty and purpose that have characterized numerous religious,
political, military and social movements over the ages.
Contract and Fair Labor Standards Act
(Counts XIII and XIV)
Plaintiff fails to state a claim for common law breach of contract and for
violation of the Fair Labor Standards Act, 29 U.S.C. ss 201, 206. Her
contract claim essentially recasts her fraud allegations, discussed below, in
contract terms. The terms of the alleged contract are entirely too
*1140 vague to constitute an enforceable agreement. The time of the alleged
agreement is not stated, and the parties are unspecified. The only objectively
determinable promise alleged is that plaintiff would receive auditing, which
she did, in fact, receive. Although we would imply a common law contract if
suitable allegations were before us, we will not invent one out of the
imprecise and conclusory allegations in this complaint.
[27] Similarly, the complaint fails to state a claim under the Fair Labor
Standards Act (Count XIV). Count XIV is stated in words that defy deciphering.
It alleges that defendants "fraudulently induced plaintiff to work for
defendants through the fraudulent representations contained in preceding
paragraph." Yet "preceding paragraph" contains no representations. Count XIV
further rests plaintiff's claim on "said violations set forth in paragraph
121," a paragraph that merely realleges the complaint's preceding paragraphs.
We conclude, from plaintiff's unclear statement of her Fair Labor Standards Act
claim and from the other allegations in her complaint, that her services were
provided primarily in exchange for auditing, rather than monetary compensation.
Even considering the allegations, scattered through her pleading, that she was
promised some compensation for her services, her complaint, read as a whole,
fails to allege facts sufficient to show that she was a "person whose
employment contemplated compensation," Walling v. Portland Terminal Co.,
1947, 330 U.S. 148, 152, 67 S.Ct. 639, 641, 91 L.Ed. 809, that an employer-
employee relationship was ever established between her and the California
Church, see Huntley v. Gunn Furniture Co., W.D.Mich., 1948, 79 F.Supp. 110,
111, or that the labor she provided related to commerce or the production of
goods for commerce.
[28] Even if plaintiff properly stated a claim under the Fair Labor
Standards Act, the bulk of it would be time-barred. A court may dismiss an
action owing to the running of a statute of limitation if the defect appears on
the face of the complaint. Title 29, s 255(a) prescribes a three-year
limitation for willful violations of FLSA, and a two-year limitation otherwise.
Under either limitation, the bulk of plaintiff's claim would be barred.
Moreover, although plaintiff provides a summary of dates in paragraph 128, her
complaint contains no allegations regarding work performed for defendant other
than from March 1972 to January 1974.
Because this count of plaintiff's complaint fails to state a claim upon which
relief can be granted, we need not defer decision on it until resolution of
whether Scientology is entitled to protection as a religion under the First
Amendment.[FN15]
FN15. The extent to which the Fair Labor Standards Act applies to
religious organizations is unclear. Although the Seventh Circuit did hold
that the FLSA covered employees of a church corporation who worked in a
church-owned printing establishment, Mitchell v. Pilgrim Holiness Church
Corp., 7 Cir. 1954, 210 F.2d 879, cert. den. 1954, 347 U.S. 1013, 74
S.Ct. 867, 98 L.Ed. 1136, the Supreme Court has not addressed this issue
and the legislative history and regulations suggest that religious
activities of non-profit organizations were to be exempt.
Claims Not Barred by First Amendment
Some counts of plaintiff's complaint state proper claims the adjudication of
which would not be barred by the First Amendment.
[29] Count VI sets forth several purely secular representations allegedly
made to Van Schaick by defendant's agents. In essence, this count alleges that
defendant promised that Van Schaick would receive benefits, including training,
room and board, and various work and research opportunities, after undergoing a
period of auditing. These representations, the complaint alleges, were
fraudulent. Even if Scientology were entitled to protection as a religion,
adjudicating the claims this count asserts would not force this court to
consider the truth or falsity of religious doctrine, the sort of inquiry
Ballard forecloses.
[30][31][32] With respect to this claim, however, the complaint presently
falls short of *1141 the specificity F.R.C.P. 9(b) clearly requires of a
claim for fraud. The time, place, manner and content of the alleged
misrepresentations are not alleged with sufficient particularity to meet the
requirements of the rule. Moreover, plaintiff charges a civil conspiracy to
defraud, and it is necessary to plead fraudulent conspiracy with enough
specificity to inform multiple defendants of facts forming the basis of the
conspiracy charge. National Egg Co. v. Bank Leumi le-Israel B.M., N.D.
Georgia, 1980, 504 F.Supp. 305, 308. Such allegations must "delineate among the
defendants (as to) their participation or responsibilities" in making the
statements which are the subject of the suit, Lerman v. ITB Management
Corp., D.Mass., 1973, 58 F.R.D. 153, 155 n.2. Conspiracies described in
sweeping and general terms cannot serve as the basis for a cause of action, and
may be dismissed. Kadar Corp. v. Milbury, 1 Cir., 1977, 549 F.2d 230, 233.
But because at least some of the misrepresentations alleged in Count VI do
appear to be secular on their face, and because plaintiff's pleading burden is
extraordinarily heavy due to the First Amendment implications of this
litigation, she shall be given an opportunity to amend this count of her
complaint, provided that any such amendments be filed within 15 days of the
date of this Memorandum of Decision and Orders on Various Motions.
It is less clear that Count V of plaintiff's complaint can be decided
independently of First Amendment considerations. It alleges that defendants
fraudulently represented that auditing was scientifically guaranteed to provide
an array of benefits, including a higher I.Q. for Van Schaick and her children,
immunity from various illnesses, cures for various ailments and better
eyesight.
Plaintiff's earlier complaint used the word "would" instead of "scientifically
guaranteed." The prior wording would quite clearly have raised First Amendment
objections if Scientology was, in fact, entitled to protection as a religion.
By replacing "would" with "scientifically guaranteed" plaintiff seeks to avoid
that problem. Words are not always adequate, however, to divide precisely that
which relates to the sacred and that which is purely secular. As Judge
Gesell wrote in United States v. Article or Device, D.C.1971, 333 F.Supp. 357,
363:
What the layman reads as straight science fiction becomes to the believer a
bit of early imperfect scripture. The result of all this is that what may
appear to the layman as a factual scientific representation (clearly false) is
not necessarily this at all when read by one who has embraced the doctrine of
the Church.
[33][34] Although the distinction is not always clear, we believe that even
if Scientology is entitled to protection as religion Count V may stand. The
First Amendment protects utterances which relate to religion but does not
confer the same license for representations based on other sources of belief or
verification. Statements citing science as their source may provide the basis
for a fraud action even though the same contention would not support such an
action if it relied on religious belief for its authority. Although the process
of sifting secular from religious claims may not be easy, Founding Church of
Scientology v. United States, 1967, 133 U.S.App.D.C. 229, 409 F.2d 1146, 1165
n. 3, found that endeavor possible. Should this court find that Scientology is
entitled to protection under the religion clauses of the First Amendment,
plaintiff would be restricted in proving her claim for relief under Count V, to
evidence which did not trench upon constitutionally protected areas.
Like Count VI, Count V presently fails to meet the specificity requirements
of F.R.C.P. 9(b); again, the time, place and manner of the alleged
misrepresentations are not stated in the precise and particular fashion the
rule requires. Moreover, the deficiencies in stating a civil conspiracy to
defraud which plague Count VI afflict its predecessor as well. Plaintiff will
be given an opportunity to amend this count within the same time limit as set
with respect to Count VI.
[35] Finally, taking plaintiff's complaint as a whole, Count XI, which
alleges intentional *1142 infliction of emotional distress through the Fair
Game doctrine, does state a claim upon which relief can be granted. Van Schaick
alleges that, pursuant to the Fair Game doctrine, agents of the Church engaged
in a course of conduct, including slanderous telephone calls to her neighbors
and employer, physical threats, and assault with an automobile, which was
designed to dissuade her from pursuing her legal rights. The conduct alleged
constitutes "an attempt to intentionally shock and harm a person's 'peace of
mind' by invading the person's mental or emotional tranquility," Wenk, supra
378 Mass. at 595, 392 N.E.2d 1053, and is therefore actionable. We have
noted, however, that the Fair Game doctrine has allegedly been repealed as a
matter of Scientology doctrine, and remind plaintiff that it remains her
burden to show that the actions taken against her by individual Church members
were taken pursuant to some Church policy, practice or directive. With this
understanding of plaintiff's allegations, we conclude that Count XI does state
a claim upon which relief can be granted.
Applicability of First Amendment
[36] Our decision regarding defendant's motion to dismiss other counts of
plaintiff's complaint turns on whether the Church of Scientology is entitled to
First Amendment protections. The remaining counts of plaintiff's complaint
allege assorted fraudulent conduct by the Church. A claim for relief based upon
fraud must include proof that defendant knowingly made a false statement. Proof
of those elements-that the statement was false and that defendant knew of its
falsity-becomes problematic when the statement relates to religious belief or
doctrine. In United States v. Ballard, supra, the Supreme Court held that
the truth or falsity of religious beliefs were beyond the proper scope of
judicial inquiry. Writing for the Court, Justice Douglas explained:
Men may believe what they cannot prove. They may not be put to the proof of
their religious doctrines or beliefs. Religious experiences which are as real
as life to some may be incomprehensible to others. Yet the fact that they may
be beyond the ken of mortals does not mean that they can be made suspect before
the law. Many take their gospel from the New Testament. But it would hardly be
supposed that they could be tried before a jury charged with the duty of
determining whether those teachings contained false representations.... (322
U.S. at pp. 86-87, 64 S.Ct. at pp. 886-87).
Plaintiff alleges that she was fraudulently induced to become a scientologist
by false representations concerning the nature of the Scientology movement
(Count IV) and the content of Scientology doctrine (Counts VII-IX). If the
representations involved in plaintiff's fraud counts are entitled to the
protection of the First Amendment, Ballard would prevent us from examining
their veracity. Since an essential element of a cause of action for fraud is
the falsity of the representation in question, plaintiff would accordingly fail
to state a claim upon which relief could be granted.[FN16]
FN16. We do not construe Ballard to hold that, although courts may not
examine the truth or falsity of statements of a religious nature, these
statements may be the bases of a fraud action if made in bad faith. The
Court in Ballard never addressed that issue. Rather, it held only that
the verity of religious beliefs or doctrines should not be submitted to the
jury.
Whether the First Amendment immunizes those statements from judicial scrutiny
depends, however, on whether the statements relate to religion or religious
belief. "Only beliefs rooted in religion are protected by the Free Exercise
Clause, which, by its terms, gives special protection to the exercise of
religion." Thomas v. Review Board of the Indiana Employment Security
Division, supra 450 U.S. at 713, 101 S.Ct. at 1430. Before we can determine
whether the First Amendment mandates dismissal of any of the fraud counts
alleged in this complaint, we must first determine whether defendant is
entitled to the constitutional protections reserved for religious institutions
and beliefs.
*1143 Although courts once interpreted the word "religion" as used in the
First Amendment to require belief in a deity, see Davis v. Beason, 1890, 133
U.S. 333, 342, 10 S.Ct. 299, 300, 33 L.Ed. 637, they have long since abandoned
so restrictive a definition. In Torcaso v. Watkins, 1961, 367 U.S. 488, 81
S.Ct. 1680, 6 L.Ed.2d 982, the Court held that "religion" as used in the First
Amendment applied to nontheistic faiths, too, and explicitly recognized as
religions Buddhism, Taoism, Ethical Culture and Secular Humanism, 367 U.S.
at 495 n. 11, 81 S.Ct. at 1684 n. 11. More recently, the Second Circuit held
that Krishna Consciousness is a religion for free exercise purposes.
International Society for Krishna Consciousness, Inc. v. Barber, 2 Cir.
1981, 650 F.2d 430, 440.[FN17] Torcaso and International Society show that the
concept of religion is more capacious than early cases suggested, but they do
not, of course, resolve whether the representations at issue here should
receive the protection the First Amendment confers.
FN17. In International Society for Krishna Consciousness, Inc. v.
Barber, the Second Circuit held that, absent a showing that no less
restrictive alternative existed which would not have interfered with the
Krishna ritual of "sankirtan", the practice by which those devoted to
Krishna approach non-members, tell them of their religion's tenets and seek
contributions, a regulation restricting solicitation at a state fair to a
booth unconstitutionally interfered with free exercise rights of members of
Krishna Consciousness.
In Heffron v. International Society for Krishna Consciousness, supra,
the Supreme Court upheld a similar regulation restricting solicitation at
the Minnesota State Fair as a reasonable time, place and manner restriction
on First Amendment rights. The Court reached that decision through a
different analysis than that employed by the Second Circuit and one which
did not involve an inquiry regarding whether Krishna Consciousness had
religious aspects entitling it to the protection of the First Amendment.
Judge Kaufman's opinion for the Second Circuit is cited here not for its
holding, which the Supreme Court rejected in Heffron, but for whatever
light it sheds on the separate problem regarding the criteria a court uses
to determine when the protection of the Free Exercise clause is properly
invoked.
In evaluating defendant's claim to First Amendment protection, we begin with
prior litigation involving the Scientology movement. In Founding Church of
Scientology of Washington, D.C. v. United States, 1969, 133 U.S.App.D.C. 229,
409 F.2d 1146, Judge Wright found that Scientology had established a prima
facie case that it was a religion, 409 F.2d at 1160. This finding was based
upon evidence that the church maintained the formal, external appearance of a
religion-it was incorporated as a religion; maintained ministers with the
authority to marry and bury; and its writings were found to contain a general
account of man and his nature.
Significantly, however, in the Founding Church litigation, there was no
attempt to contest the bona fides of the Church's religious status. Thus, Judge
Wright carefully limited his holding, stating:
We do not hold that the Founding Church is for all purposes a religion. Any
prima facie case made out for religious status is subject to contradiction by a
showing that the beliefs asserted to be religious are not held in good faith by
those asserting them, and that forms of religious organization were erected for
the sole purpose of cloaking a secular enterprise with the legal protections of
religion. 409 F.2d at 1162.
The determination in Founding Church that Scientology had made a prima
facie case for religious status is obviously relevant to, but not conclusive
for, our purposes. As Judge Wright pointed out, the government did not contest
the issue. Moreover, the determination was made 12 years ago; at the least
defendants would have to satisfy this court that the factors Judge Wright found
persuasive still exist. Although plaintiff appeared to concede in oral argument
that Scientology had made a prima facie case for First Amendment protection,
she withdrew that concession in her post-argument brief. Scientology thus might
be entitled to protection as a religion, but that entitlement is not clear.
[37] If this case involved an established religion, the court could, of
course, accord it treatment as such without further inquiry.
*1144 Defendants have contended, in oral argument and brief, that the court
"may not favor one religion over another" by taking judicial notice of the fact
that an established religion is a bona fide religion while refusing to give
similar treatment to a less established religion. Although we agree that the
Free Exercise Clause protects all religions, old and new, alike once its
protection attaches, in determining whether that protection applies courts may
require a newer faith to demonstrate that it is, in fact, entitled to
protection as a religion. See, e.g., International Society for Krishna
Consciousness, Inc. v. Barber, supra at 433; Theriault v. Carlson, 5 Cir.
1974, 495 F.2d 390, cert. den. 1974, 419 U.S. 1003, 95 S.Ct. 323, 42 L.Ed.2d
279; United States v. Kuch, D.D.C.1968, 288 F.Supp. 439. "Not every
enterprise cloaking itself in the name of religion can claim the constitutional
protection conferred by that status." Founding Church of Scientology v.
United States, 1969, 133 U.S.App.D.C. 229, 409 F.2d at 1160. In such cases, the
bare assertion of a religious nature has not been sufficient to establish First
Amendment protection and neither is it here.
[38] A motion to dismiss, as a vehicle for determining whether defendant's
statements are entitled to the protection of the First Amendment, presents this
court with an intractable dilemma. Scientology is not an established religion
whose tenets, doctrines, and policies are generally known. The court may not,
therefore, by judicial notice identify it as a religion. To take all of
plaintiff's allegations as true could strip defendant of all First Amendment
protection without any factual showing by plaintiff. To treat Scientology as a
religion entitled to the full panoply of First Amendment rights would be to
ignore the allegations of the complaint. Ascertaining defendant's status-
whether religious or secular-requires reference to extrinsic materials. We
therefore conclude that the question whether Counts IV, VII, VIII and IX state
a claim upon which relief can be granted cannot be resolved on a motion to
dismiss. Therefore, as to those counts we shall treat defendant's motion to
dismiss as a motion for summary judgment and direct the parties to submit
materials regarding whether defendant is entitled to protection as a religion
under the First Amendment.
[39] In making that determination, the Founding Church criteria will provide
a useful starting point. See 409 F.2d at 1160. We note, too, the similar
guidelines Judge Adams enunciated in his concurring opinion in Malnak v.
Yogi, 3 Cir. 1979, 592 F.2d 197, 208-209; whether the candidate religion
addresses matters of ultimate concern, whether its doctrine and practices are
comprehensive, and whether it includes certain formal, external characteristics
of religious organizations. Most recently, Judge Kaufman, writing for the
Second Circuit, has used comparable criteria. International Society for
Krishna Consciousness, Inc. v. Barber, supra at 440-41. Presentation of proof
sufficient to make a prima facie case would entitle defendant to the
protections of the First Amendment free exercise clause unless plaintiff
effectively rebuts that case. The Supreme Court's recent decision in Thomas
v. Review Board, supra, makes clear, however, that certain types of inquiry
are impermissible in determining whether the First Amendment protects a
particular belief as religious. First, courts may not inquire into the truth or
falsity of a belief in question. Whether a belief is religious "is not to turn
upon a judicial perception of the particular belief or practice in question;
religious beliefs need not be acceptable, logical, consistent, or
comprehensible to others in order to merit First Amendment protection." 450
U.S. at 714, 101 S.Ct. at 1430. Moreover, Thomas suggests the difficulty of
challenging the good faith of an entire organization and states that courts may
not ordinarily consider intrafaith differences among adherents in determining
whether a religious belief is sincerely held. Although there may be ways in
which a party could rebut a prima facie showing by proving that "forms of
religious organizations were created for the sole purpose of cloaking a secular
enterprise with the legal protection of a religion," Founding Church of
Scientology of Washington, D. C. v. United States, *1145 supra at 1162, a
general inquiry into whether individual members of a religion hold in good
faith the belief they assert is not one of them. Rather, testing sincerity of
religious belief involves a somewhat truncated inquiry which must focus on
extrinsic evidence. See, e.g., International Society for Krishna
Consciousness, Inc. v. Barber, supra at 441-42.
ORDERS
In accordance with this Memorandum of Decision the court orders that (1)
plaintiff's motion to file a second amended complaint is granted; (2) the
Church of Scientology of Nevada's motion to dismiss for lack of personal
jurisdiction and venue is granted; (3) defendant's motion to dismiss Counts I,
II, III, X, XII, XIII and XIV is granted; (4) defendant's motion to dismiss
Count XI is denied, and its motion to dismiss Counts V and VI is denied on the
condition that plaintiff file an amended complaint which brings those counts
into compliance with Rule 9(b), Fed.R.Civ.P. within 15 days; and (5)
defendant's motion to dismiss Counts IV, VII, VIII and IX will be treated
pursuant to Rule 12(b), Fed.R.Civ.P., as a motion for summary judgment.
It is further ordered that the parties submit memoranda of law, affidavits and
other submissions by May 7, 1982 on said constructive motion for summary
judgment; and reply memoranda by May 24, 1982.