Monday, April 28, 2003

Jonathan Hutson
Communications Director
TRIAL LAWYERS FOR PUBLIC JUSTICE
1717 Massachusetts Avenue, N.W., Suite 800
Washington, D.C. 20036

RE: 2003 Trial Lawyer of the Year Nomination
Nominated Case: Wollersheim v. Church of Scientology

Dear Mr. Hutson:

          I greatly appreciate the above nomination and the opportunity to respond to your letter dated April 8, 2003 in which you set forth, and herein I respond to, the following headings:

The public interest significance of the case.

          When one defines “public interest” to include what traditionally has been called the “police power” of the state to act on behalf of the health, safety and welfare of its citizens, the impact of the multi-million dollar Wollersheim jury verdict, subsequent published appellate decision, and collection of the full judgment with interest sixteen years thereafter is profound.

          Speaking most broadly, Wollersheim vindicates the right of citizens to be free from deception, coercion, exploitation and abuse perpetrated against them by a “religion” which enjoyed the full panoply of protections conferred by the religious liberty clauses of the First Amendment and in its defense asserted such protections at every conceivable turn.

          Such vindication is of incalculable significance inasmuch as it could be accomplished only by the most precise charting of deep and perilous constitutional waters so as to define, distinguish and constitutionally protect the differences between individual liberty on one hand and religious liberty on the other such that any religious prerogative exercised by a group or cult did not improperly predominate over the rights of an individual. Given that Wollersheim’s adversary throughout was the terrible and broad-ranging Scientology Organization—which post-verdict publicly employed the jingo, “Not One Thin Dime For Wollersheim”—his victory stands as a beacon that, notwithstanding intractable denial, resistance and opposition, complete redress can be an achievable reality for an injured and zealously represented plaintiff.

Jonathan Hutson, Communications Director
TRIAL LAWYERS FOR PUBLIC JUSTICE
Monday, April 28, 2003
Page 2 of 9.

          Relying in substantial part on the California Supreme Court decision set forth in Molko v. Holy Spirit Association (1988) 46 Cal.3d 1092, 252 Cal.Rptr. 122,¹ / in setting new law the Court of Appeal in Wollersheim provided a telling analogy to demonstrate its reasoning in imposing liability on Scientology for the practices of “fair game,” “disconnect” and “auditing” as to which the religious corporation had claimed constitutional protection:

As we have seen, not every religious expression is worthy of constitutional protection. To illustrate, centuries ago the inquisition was one of the core religious practices of the Christian religion in Europe. This religious practice involved torture and execution of heretics and miscreants. (See generally Peters, Inquisition (1988); Lea, The Inquisition of the Middle Ages (1961).) Yet should any church seek to resurrect the inquisition in this country under a claim of free religious expression, can anyone doubt the constitutional authority of an American government to halt the torture and executions? And can anyone seriously question the right of the victims of our hypothetical modern day inquisition to sue their tormentors for any injuries — physical or psychological—they sustained?

We do not mean to suggest Scientology's retributive program as described in the evidence of this case represented a full-scale modern day "inquisition." Nevertheless, there are some parallels in purpose and effect. "Fair game" like the "inquisition" targeted "heretics" who threatened the dogma and institutional integrity of the mother church. Once "proven" to be a "heretic," an individual was to be neutralized. In medieval times neutralization often meant incarceration, torture, and death. (Peters, Inquisition, supra, pp. 57, 65-67, 87, 92-94, 98, 117-118, 133-134; Lea, The Inquisition of the Middle Ages, supra, pp. 181, 193-202, 232-236, 250-264, 828-829.) As described in the evidence at this trial

¹ I was the lead lawyer who litigated the Molko case and obtained the reversal of summary judgment granted on First Amendment religious liberty grounds by the trial court and affirmed by the Court of Appeal. In imposing liability the California Supreme Court stated “We must next consider whether a compelling state interest justifies the marginal burden such liability imposes on the Church's free exercise rights. We have no difficulty in finding such an interest in the "substantial threat to public safety, peace or order" the Church's allegedly fraudulent conduct poses. [citation omitted] For it is one thing when a person knowingly and voluntarily submits to a process involving coercive influence, as a novice does on entering a monastery or a seminary. . [citation omitted] But it is quite another when a person is subjected to coercive persuasion without his knowledge or consent. While some individuals who experience coercive persuasion emerge unscathed, many others develop serious and sometimes irreversible physical and psychiatric disorders, up to and including schizophrenia, self-mutilation, and suicide. [citation omitted] The state clearly has a compelling interest in preventing its citizens from being deceived into submitting unknowingly to such a potentially dangerous process.” (Molko at p. 1118) (Exhibit 1, attached)

In July 1989, California Lawyer magazine pegged Molko as No. 6 in the “Top Ten” “bellwether” cases from the second term of the “Lucas” court. (Exhibit 2, attached)

Jonathan Hutson, Communications Director
TRIAL LAWYERS FOR PUBLIC JUSTICE
Monday, April 28, 2003
Page 3 of 9.

the "fair game" policy neutralized the "heretic" by stripping this person of his or her economic, political and psychological power.

Wollersheim v. Church of Scientology (1989) 212 Cal.App.3d 872, 888, 260 Cal.Rptr. 331. (Exhibit 3, attached)

          While common sense may easily see that religion is no privilege to torture, to successfully negotiate the constitutional thicket that obfuscates such an obvious predicate necessarily establishes law that is both novel and greatly important to the fair regulation of the proper scope of the role that certain types of organizations - which often claim religious status and First Amendment protection - play in our society.

The harmfulness of the defendants’ conduct.

          Commencing in the mid-1970s, the harms associated with so-called cult groups began to strike citizens, some of whom raised a loud hue and cry and would even resort to kidnapping their adult children in order to deprogram them from having been brainwashed and subjugated into submitting to commands and the ideology of a cult without their knowledge or consent. The most visible groups included the Moonies (Unification Church) and Scientology.

          Scientology is an extremely well-financed organization that is adroitly adept at manipulating every source of power available to it so as to dominate in whatever field in which it conducts itself. As set forth below, the harmfulness of the conduct in which Scientology engaged was exceeded only by the vigor with which it denied and defended against being made accountable for the consequences of such conduct toward Wollersheim or, by inference, any other claimant.

          In Wollersheim, Scientology and its leaders “made the deliberate decision to ruin Wollersheim economically and possibly psychologically.” (Wollersheim v. Church of Scientology, supra., 212 Cal.App.3d at 890)

          They were aware that Wollersheim was an “incipient manic-depressive” and notwithstanding such knowledge, aggravated his mental condition which drove him into deep depressive episodes. Employing its “practice of retribution” called “fair game” Scientology coerced Wollersheim into continued participation in other Scientology practices which were harming him emotionally.²/

² “Fair Game” was a practice of retribution that Scientology threatened to inflict on “suppressives,” which included people who left the organization or anyone who could pose a threat to it. Once somebody was identified as a “suppressive,” all Scientologists were authorized to do anything to “neutralize” that individual – economically, politically and psychologically. “Under Scientology’s ‘fair game’ policy, someone who threatened Scientology by leaving the church ‘may be be deprived of property or injured by any means by a Scientologist. . . [The targeted defector] may be tricked, sued lied to or destroyed.’” (Wollersheim v. Church of Scientology, supra., 212 Cal.App.3d at 893)

Jonathan Hutson, Communications Director
TRIAL LAWYERS FOR PUBLIC JUSTICE
Monday, April 28, 2003
Page 4 of 9.

          When Wollersheim sought to escape, Scientology members seized him and held him captive until he agreed to remain and continue “auditing” and other “religious” practices. Scientology officials prohibited Wollersheim from ever speaking of his problems with a priest, doctor or psychiatrist.

          At trial, Wollersheim’s experts testified that Scientology’s “auditing” and “disconnect” practices constituted brainwashing and thought reform akin to what the Chinese and North Koreans practiced on American prisoners of war. His experts testified that such brainwashing aggravated Wollersheim’s bipolar manic depressive personality and caused his mental illness. (Wollersheim v. Church of Scientology, supra., 212 Cal.App.3d at 878-880)

          In sum, the Court of Appeal stated that the “state has a compelling interest in allowing its citizens to recover for serious emotional injuries they suffer through religious practices they are coerced into accepting. Such conduct is too outrageous to be protected under the constitution and too unworthy to be privileged under the law of torts.” (Wollersheim v. Church of Scientology, supra., 212 Cal.App.3d at 897)

The dedication, tenacity and skill of the trial lawyer(s) involved.

It would take a book to do justice to the scope of all of the litigation involved – directly and indirectly – in this case. There is no way to adequately describe what many, if not all, of Mr. Wollersheim’s attorneys had to endure over the years in the course of obtaining redress for him.

          Since I did not become attorney of record for Mr. Wollersheim until 1993, and it would be impossible for me to recount the inner fortitude and endurance of the other lawyers, I will simply note the other lawyers’ presence where appropriate.

          In the trial court there were at least six different judges as to various decisions of whom Scientology sought – and more than once obtained – successful appellate review.

          At trial and in the initial appeal, California lawyer Charles O’Reilly gets the credit for the spectacular result achieved at great personal and professional cost. The trial alone lasted 5 ½ months. Throughout all proceedings, on the trial and appellate levels, Scientology relentlessly asserted, in a manner that only it can, “a broad spectrum of issues all the way from a technical statute of limitations defense to a fundamental constitutional challenge to this entire species of claims against Scientology.” (Id., at 880)

Jonathan Hutson, Communications Director
TRIAL LAWYERS FOR PUBLIC JUSTICE
Monday, April 28, 2003
Page 5 of 9.

          In addition, during the pendency of the tort case, Scientology sued Wollersheim’s counsel and experts twice in federal court, first for alleged RICO violations and then for 42 U.S.C. sections 1983 and 1985 civil rights violations. Mr. O’Reilly handled this litigation.

          When that strategy failed to work, Scientology sued Mr. Wollersheim again in an effort to set aside his jury award based on the alleged prejudice of the trial judge, Ronald Swearinger. (Church of Scientology v. Wollersheim (1996) 42 Cal.App.4th 628, 49 Cal.Rptr.2d 620) (Exhibit 4, attached)

          Finally, during the pendency of Mr. Wollersheim’s efforts to collect his judgment, Scientology sued him for copyright violations and obtained a federal seizure warrant for Wollersheim’s computer. On the list of search terms for Wollersheim’s computer for seizure of articles infringing on statutory copyright were the names of his past and present attorneys. (Exhibit 5, attached) This litigation was handled and settled by Daniel A. Leipold with the assistance of local counsel in Denver where the claim was brought.

          After the published decision of the California Court of Appeal in 1989, and Scientology’s unsuccessful Petition for Review with the California Supreme Court, Mr. Wollersheim substituted himself in propria persona. Both he and Scientology sought certiorari in the U.S. Supreme Court.

          During the pendency of its petition for certiorari, the Court decided Pacific Mutual Life Insurance Company v. Haslip (1991) 499 U.S. 1. Based on its decision in Haslip, the Court granted Scientology’s petition and remanded the matter back to the California Court of Appeal for consideration of the punitive damage award in light of the Haslip standards.

          On remand, the Court of Appeal reaffirmed that its earlier decision was constitutional in light of Haslip in response to which Scientology again sought review in the California Supreme Court. Initially, on July 23, 1992, the California Supreme Court granted review and thereafter dismissed the same. (10 Cal.Rptr.2d 182, dismissed July 15, 1993) When its petition for review was dismissed, it again sought certiorari which the United States Supreme Court denied on March 7, 1994. (Church of Scientology v. Wollersheim (1994) 114 S.Ct. 1216)

          As noted, I became Mr. Wollersheim’s lawyer in 1993 when Scientology sought certiorari in the U.S. Supreme Court for the second time and remained his attorney of record thereafter through the collection of the judgment on May 9, 2002.

          Meanwhile, also as noted above, in February 1993, Scientology filed a separate action against Mr. Wollersheim the gravamen of which was to set aside the then-reduced judgment on the grounds that the original trial judge (Ronald Swearinger who had meanwhile died) had harbored covert malice and been prejudiced against Scientology.

Jonathan Hutson, Communications Director
TRIAL LAWYERS FOR PUBLIC JUSTICE
Monday, April 28, 2003
Page 6 of 9.

That action was dismissed. (Church of Scientology v. Wollersheim (1996) 42 Cal.App.4th 628, 49 Cal.Rptr.2d 620) This matter was handled by Daniel A. Leipold of Hagenbaugh and Murphy and Mark Goldowitz, Esq., who brought and successfully litigated a special motion to strike the complaint as a SLAPP (Strategic Lawsuit Against Public Participation) and obtained a substantial attorneys’ fee award.

          Mr. Wollersheim then turned his attention toward the collection of his judgment. ³/ Even though notice of entry of judgment had been filed on July 22, 1986, Scientology filed a motion seeking the determination that interest did not start to accrue until March 20, 1992 when the case came back down from the higher courts. When on October 26, 1994, the trial court denied Scientology’s motion and held that interest on the judgment started to accrue as of the date of the entry of judgment in 1986, Scientology appealed that ruling. The Court of Appeal denied the appeal on September 27, 1995. Scientology’s subsequent Petition for Review filed with the California Supreme Court was also denied.

          Even though shortly after Mr. Wollersheim filed suit the original defendant Scientology Corporation (Church of Scientology of California aka CSC) was worth approximately $340 million in 1981, at the end of trial in July 1986 its claimed net worth that it put before the jury was $18,667,947.00.

          By the mid-90s it had been stripped of substantially all of its remaining assets and therefore was functionally judgment proof, a true corporate “shell.”

          Concomitantly, during the pendency of Wollersheim’s tort case, the entire Scientology corporate structure was reorganized so as to make it “impregnable” from attack by litigation. This was called Mission Corporate Category Sort-Out. (Church of Spiritual Technology v. United States (1992) 26 Cl.Ct. 713, 716, aff’d 991 F.2d 812 (1993). ⁴/

          In a minute order denying Scientology’s motion for waiver of bond on appeal, on September 26, 1986 trial judge Ronald Swearinger stated “Proof has shown that Scientology as an overall entity is comprised of numerous operating entities, including defendant [CSC], and that they are all inter-related, being parts of a monolithic whole. Transfer 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

³ For this purpose Mr. Wollersheim hired California lawyer Craig J. Stein who has remained his attorney of record ever since.

⁴ The MCCS facts spawned separate litigation which broadened the crime-fraud exception to the attorney client privilege because the facts “demonstrate[d] that the purpose of the [Mission Corporate Category Sort Out] project was to cover up past criminal wrongdoing.” (United States v. Zolin (9th Cir. 1990) 905 F.2d 1344, 1345. cert. denied, Church of Scientology v. United States (1991) 111 S.Ct. 1309)

Jonathan Hutson, Communications Director
TRIAL LAWYERS FOR PUBLIC JUSTICE
Monday, April 28, 2003
Page 7 of 9.

pokery.’ The power to transfer out to a sister entity is the power to transfer back in ‘when the heat is off,’ so to speak.” (Exhibit 5, attached)

          Scientology’s “jiggery pokery” paid off handsomely in the Court of Appeal when that court reduced his $30 million damage award to $2.5 million because it was “preposterous” to hit a corporation worth $18 million with a $30 million punitive damages verdict.

           On May 9, 1997, Mr. Wollersheim filed his motion in the trial court to amend the judgment on an alter ego theory to include solvent Scientology corporations as real party defendants and judgment debtors. On November 14, 1997 the trial court granted Mr. Wollersheim’s motion to amend to add Church of Scientology International and Religious Technology Center as judgment debtors effective as of the date of the entry of the original judgment. The attorneys of record were Daniel A. Leipold, Craig J. Stein and me.

           On February 4, 1999 Scientology’s appeal of the ruling was granted. The Court of Appeal reversed the trial judge’s grant of Wollersheim’s motion to amend the judgment and remanded the case back to the trial court for further proceedings.

           After numerous motions to dismiss, unsuccessful petitions for mandate in the Court of Appeal and other efforts to maim Wollersheim’s quest to satisfy his judgment, the matter came on for a 10-day trial on the alter ego issue which was set to commence on May 9, 2002. On that date, Scientology deposited the entire judgment – with interest, almost $8.7 million – in the trial court.

           Despite that the above recitation is necessarily incomplete on a procedural level, from the intensity of litigation discussed reasonable inferences can be drawn as to the nature and extent of day-to-day litigation.

           Specifically, Scientology litigates by the dump truck load, by blitzkrieg. Its factual and legal citations are rarely accurate. All conversations with adverse counsel have to be confirmed in writing. The sheer volume of legal work that has to be done to stay alive is akin in scope to trying to block the flow of a glacier. Scientology has the money to finance top-shelf legal representation and the in-house policies to pay massive sanctions awards for bad-faith litigation tactics as a part of the way it conducts its day-to-day legal business. Scientology’s litigation strategies give the phrase “war of attrition” expanded and novel meaning.

           That truncated procedural recitation does not include the extra-curricular “fair game” activity that almost all lawyers – as well as expert and other witnesses - who face off against Scientology for any period of time must endure. Such “fair game” activity almost always focuses on ascertaining any sort of personal or professional weakness that can then be leveraged into an unethical litigation advantage or settlement opportunity.

Jonathan Hutson, Communications Director
TRIAL LAWYERS FOR PUBLIC JUSTICE
Monday, April 28, 2003
Page 8 of 9.

           In the 14 years that I personally have litigated against the Scientology Organization, it or its agents have generated two criminal investigations of me, one federal and one state, numerous State Bar complaints, and one civil lawsuit. An agent was sent into my life whom I befriended and who used that good will and friendship to obtain confidential litigation materials. That same agent discussed sitting in on discussions with Scientology officials and investigators which pertained to how to kill me. (Exhibit 6, attached article “Litigation Noir”)

           At this point I believe that I am the longest standing lawyer adverse to Scientology in the country.

The result that was reached.

           Originally, on July 22, 1986 a Los Angeles County jury awarded Wollersheim $5 million in general damages and $25 million in punitive damages. At that time Scientology stated its intention to appeal and “promised that Larry Wollersheim will never collect a dime.” (Exhibit 7, Los Angeles Times, 7/23/86, p. 1)

           On May 9, 2002, Wollersheim collected almost 87 million dimes because the decision was made at the highest level of the Scientology Organization’s hierarchy of power that it was more expedient to pay Wollersheim’s 16-year old judgment rather than to defend against Wollersheim’s alter ego theory of liability and presentation of evidence that all of Scientology’s corporations are run by an in-house paramilitary group called the “Sea Organization” at the apex of which sits its supreme and autocratic commander, David Miscaviage.

The extent to which the case advances any of the goals set forth in TLPJ’s vision statement.

           There is no question that the litigation required to obtain total redress for Lawrence Wollersheim was highly creative in order to (1) convey an accurate evidentiary presentation of highly nuanced psychological manipulation, (2) to overcome First Amendment religious liberty impediments and (3) accurately illustrate the flow of power within the Scientology Organization. Such redress is completely necessary to protect people from the consequences of often religiously-based conduct which in other cults and contexts have led to various types of documented horror and apocalypse.

           There are probably few people in society who are have more latitude to abuse the power that they possess than religious leaders in general and cult leaders in particular. While the wrongdoing in which such persons willingly engage is myriad, they all share in common the assertion of defenses based on First Amendment religious liberty. Wollersheim has substantially circumscribed the scope of such license and abuse of precious First Amendment liberties.

Jonathan Hutson, Communications Director
TRIAL LAWYERS FOR PUBLIC JUSTICE
Monday, April 28, 2003
Page 9 of 9.

           That Scientology willingly and knowingly abuses the judicial system through engaging in what can only be described as litigation by attrition has been brought into higher relief by the nominated case.

           Finally, as to Wollersheim’s lawyers, personal fortitude, integrity and character of the highest magnitude has been required to withstand Scientology’s multi-leveled dirty-trick onslaughts brought continuously over time.

           I am hopeful that the law made and results obtained in Wollersheim are of such a character as to inspire lawyers to confront and expose the odiousness which lurks evermore under the cloak of religious liberty. It undermines and abuses the freedom of thought which necessarily underlies the intelligent exercise of all First Amendment freedoms. Each of those freedoms is guaranteed to all citizens and is centrally necessary to effective democratic participation.

           Thank you for extending the courtesy of additional time to respond to your letter. As you can see, for the purpose of providing a reasonably comprehensive and fair presentation of the work that went into this case, I needed it.

           It is my real hope that you will honor Mr. O’Reilly, Mr. Leipold, Mr. Stein and me for what I believe is an outstanding collective contribution to the public interest through precedent-setting litigation.

           I believe that we have earned it.