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SCIENTOLOGY DENIED: Federal judge finds that Garcia fraud lawsuit can continue

Luis and Rocio Garcia

Luis and Rocio Garcia

Federal District Judge James D. Whittemore today issued an order denying a motion by Scientology that would have ended the fraud lawsuit brought last year by former church members Luis and Rocio Garcia, who say they were scammed for hundreds of thousands of dollars in donations.

The Garcias were longtime members who had been constantly hit up for increasing amounts in donations, and they claim they were lied to about how the money would be used. Today’s order allows the Garcias to file an amended complaint in the lawsuit after dropping three of the five Scientology corporate entities they originally named in the lawsuit. The order also lifts a stay in the case, allowing the Garcias to move forward on discovery, and allowing Judge Whittemore to get back to the question of whether Scientology can force the case into arbitration.

The Garcia lawsuit had hit a snag when Scientology revealed that three of the five corporate entities that had been named defendants had trustees who lived in California, where the Garcias reside. Because the Garcias had filed the suit in Tampa, Florida, the California residence of those trustees meant that the suit violated a basic legal concept of “diversity jurisdiction” — the Garcias had simply filed the suit in the wrong venue, Scientology argued.

Pointing out that the church had waited more than nine months before revealing the jurisdiction issue (and after an expensive mini-trial had occurred in which Scientology had attempted, and failed, to disqualify the attorneys working for the Garcias), the Garcias accused the church of acting in bad faith and asked for a period of time to gather evidence about the jurisdictional question.

At the end of that 90-day period, once the Garcias were convinced that the jurisdictional problem did exist, they then proposed dropping the three entities with California trustees and amending their complaint against the other two defendants, which are based in Florida.

Scientology cried foul, arguing that if the three California entities were dropped, the entire lawsuit should be thrown out.


But today, Judge Whittemore denied Scientology’s motion and announced that he will allow the Garcias to file their amended complaint against the two remaining defendants — the Flag Service Organization (FSO) and the Flag Ship Service Organization (FSSO).

The order also lifts the stay that was on the case, and so now Whittemore can get back to the issue we expected he was about to rule on before the jurisdiction mess came up.

Scientology had previously asked Whittemore to force the Garcias to submit to the church’s internal arbitration system, saying that the Garcias’ complaints were really a religious dispute and not something for the U.S. courts.

The Garcias responded that their lawsuit is about fraud, not religion, which they have been saying since the day they filed the lawsuit in January 2013.

If we were betting, we’d say Whittemore is likely to go against Scientology on that issue as well — why else would he have spent as much time as he did on this jurisdictional ruling, which he clearly spent a lot of time on?

“And so we go on,” Garcia attorney Ted Babbitt told us when we reached him by telephone today. “We’re delighted that the judge saw it our way. Now the big question is, we’re waiting for the court on arbitration. But he’s lifted the stay, so we can go forward on discovery.”

Here’s the judge’s order….


Garcia v. Scientology: Order denying Scientology motion to dismiss


Posted by Tony Ortega on May 2, 2014 at 17:30

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SCIENTOLOGY MYTHBUSTING (Historian Jon Atack discusses key Scientology concepts) 1, 2, 3, 4, 5, 6, 7, 8, 9, 10, 11, 12, 13, 14, 15, 16, 17, 18, 19, 20, 21, 22, 23, 24, 25, 26, 27, 28, 29, 30, 31, 32, 33, 34, 35, 36, 37, 38, 39, 40, 41, 42, 43

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