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Next in the Garcia Fraud Lawsuit: Scientology Is Asked to Explain Its Arbitration System

Judge James D. Whittemore

Judge James D. Whittemore

On Friday, federal Judge James D. Whittemore issued an order in Luis and Rocio Garcia’s fraud lawsuit against the Church of Scientology. Whittemore has given Scientology until Thursday to produce a 5-page memo explaining its arbitration system as this case approaches its next hurdle.

On October 3, Whittemore dispensed with Scientology’s attempt to disqualify the Garcia legal team. That failed church motion had put the lawsuit on hold for some six months and was, for the most part, a non-starter. (Here’s our report from the courtroom.) But even before it moved to disqualify Garcia attorneys Ted Babbitt and Ronald Weil, Scientology had filed a motion that would have the effect of dismissing the lawsuit.

In that motion, Scientology asked Whittemore to find that based on agreements the Garcias signed when they were members of the church, they should be using Scientology’s own internal arbitration system to settle any disputes about donations they’ve made. The dispute the Garcias have with them is a religious one, Scientology argues, and there’s no place for a civil law court in such a dispute — the church’s First Amendment religious freedom rights would be violated if such a lawsuit continued.

The Garcias responded by pointing out that they are suing the church over fraud, not religious matters. And besides, they added, Scientology’s arbitration system is a scam. They attached a declaration by former high-ranking church official Marty Rathbun who claimed that Scientology leader David Miscavige wanted the enrollment forms the Garcias and other members signed to be designed to confound anyone who wanted a refund.

For example, Scientology arbitration requires an arbitrating panel made up of three church members in good standing. That makes it impossible for a former member to have his case heard impartially, the Garcias pointed out. (And there’s interesting case law to back them up, as we pointed out in the strange precedent involving Hooter’s Restaurant. An appeals court found that a business couldn’t require arbitration and choose the arbitrators. That’s just inherently unfair to the complaining party.)

On Thursday, the church filed a notice with Judge Whittemore, asking him to look at a recent Florida district appeals court ruling involving religious arbitration, hoping that he’ll consider it support for their argument that the Garcias should give up on their lawsuit and submit to Scientology’s internal justice procedures.


That new ruling, Spivey v. Teen Challenge of Florida did uphold a lower court decision that a woman named Pamela Spivey could be compelled to submit to Christian arbitration because her 19-year-old son, Nicklaus Ellison, had signed an agreement to submit claims to arbitration when he enrolled at Teen Challenge to try and kick a drug habit. Ellison instead relapsed and ultimately died. His mother then filed a wrongful death lawsuit, but was compelled to drop it and submit to Teen Challenge’s arbitration procedures. Spivey argued in her appeal that although she was a Christian herself, she didn’t want to be involved in a process that involved prayer, and she didn’t think she should be held to an agreement her son had signed. Her appeal was struck down.

In many ways, however, Spivey is nothing like the Garcia case. The Garcias have left the Church of Scientology, they claim that they had signed agreements under duress, and they claim the church committed fraud in the way donations were solicited. Also, we checked the rules of the Christian arbitration involved in the Spivey matter, and they are simple, clear, and the choosing of arbitrators is done by both sides.

That Scientology’s arbitration system is not clear was reflected when Whittemore asked the church on Friday to explain itself. The church may have a difficult task: top former church officials tell us Scientology arbitration was designed to confound members from getting refunds. And it will be fascinating to see the church now try to convince Whittemore that its system is fair and easy to grasp.

DOCUMENTS: Judge Whittemore’s order

Scientology notices the judge about the Spivey case.

The Spivey ruling.


The Fort Harrison Hotel is Paradise!

For your Sunday Funnies entertainment, we have this slick new brochure from the Fort Harrison Hotel, the spiritual center of the Scientology universe. Pack your bags, because soon this place is going to become a hive of activity. Super Power opening (perhaps, we hear, only a week from today? That’s the newest rumor), the IAS gala just two weeks after that, and then the New Year’s Eve celebration. Where else would a thetan want to be?


Fort Harrison Newsletter


Posted by Tony Ortega on October 20, 2013 at 07:00

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