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Trademark lawsuit against Scientology’s drug rehab network settles weeks before trial


[Federal Judge Ronald A. White]

What started out as a major lawsuit against 82 defendants connected with Scientology — including its leader, David Miscavige — has ended suddenly and will not be going to trial.

According to a document filed by its attorneys, the National Association of Forensic Counselors has reached a settlement with the parties it has been suing for trademark violations at Scientology’s drug rehab network, Narconon.

The document, filed by NAFC attorney Paul DeMuro last week, claimed to be a “joint” request for a stay in the case as details of the settlement are finalized in the next few days. Oklahoma Federal District Judge Ronald A. White issued an order asking the defendants’ attorneys to confirm by noon yesterday that it was, in fact, a joint decision by both sides. We decided to hold off on reporting the news of the settlement until we, like Judge White, received that confirmation from the Narconon side yesterday afternoon.

Narconon’s attorneys did notify the judge that the case was indeed settling, and just seven weeks before the lawsuit was scheduled to go to trial.


The settlement also comes after Judge White had refused to disqualify his magistrate judge, Steven Shreder, after Judge Shreder had ordered that the contents of NAFC CEO Karla Taylor’s personal hard drive be turned over to Narconon’s attorneys in a stunning ruling. It was not only surprisingly harsh, but then it turned out that Shreder’s wife works for one of the defendant law firms, as did Shreder in the past. Despite those connections, Judge White let Shreder’s ruling stand and did not disqualify him, which did not bode well for NAFC as trial approached.

We made multiple attempts to reach Karla Taylor and her attorneys and received no response. So we’ve turned to our federal court expert, Texas Lawyer, who has handled district and appellate federal cases.

After three years of the NAFC’s research and litigation, this looks to us like a plaintiff taking what they can get before things get worse. Is that a bad assumption?

“Lots of cases end up settling on the eve of trial, so that fact alone probably doesn’t tell us much about the the size of the settlement payment, if any,” Texas Lawyer says. “It’s probably a lot more telling that the judge and the magistrate have been ruling against the plaintiffs on a number of recent motions, including the disqualification and the hard drive turnover order. It’s not a good feeling to be going to trial when the judge seems to be dead set against your client’s position. It would not be at all surprising if this is a matter of the plaintiffs and their attorneys getting out with whatever they can salvage.”

To explain how we got here, we’ll repeat our history of this case that we presented recently…

We first learned about Karla Taylor and the National Association of Forensic Counselors in 2013. Two former officials who had worked at Scientology’s Narconon drug rehabs, Lucas Catton and Eric Tenorio, had come forward to tell harrowing stories about how Narconon clinics deceived potential customers and put patients at risk (a story they told NBC’s Rock Center). In particular, they alleged that the staffs at Scientology rehabs had obtained counseling credentials in fraudulent ways and were misrepresenting those credentials on websites in order to fool potential patients.

Narconon employees claimed to be tested as “Certified Chemical Dependency Counselors” by the NAFC. But Tenorio and Catton said that some of the CCDC certificates had been obtained in bogus ways, and Taylor learned that many staff members who claimed to hold CCDC certs had let them expire years before. Narconon websites, meanwhile, made misleading claims that the NAFC approved of what was happening in the rehabs.

Taylor spent more than a year gathering evidence about the way Narconon clinics were misusing NAFC logos and certifications before she filed suit in May 2014, initially naming 82 defendants — including numerous Scientology Narconon rehab centers as well as Scientology leader David Miscavige. With the help of attorney David Keesling, Taylor, an Indiana resident, filed the lawsuit in Oklahoma, where Scientology’s flagship rehab, Narconon Arrowhead, was located. The NAFC lawsuit was ambitious; it alleged that individual rehabs were misrepresenting their certifications in a widespread conspiracy involving Miscavige himself. And if the goal was ambitious, the potential payout under trademark law was huge, our legal experts told us.

But Scientology did not gain its scorched-earth litigation reputation for nothing. Soon, Karla Taylor began to learn just what it meant to live with Scientology diving into her personal history, looking for any edge in the case.

We learned in November 2014 that Scientology had hit paydirt digging into Taylor’s private life, and they made sure news organizations heard about it. Her husband, Frank Palani, turned out to be a scumbag of legendary proportions. Under a previous name, Frank Deisler, he was committing horrible crimes by the time he was 13 and raped a 7 year old girl. He went on to commit armed robberies and more rapes as an adult. In one scheme, he and a friend targeted homes that were for sale, raping women who were home while their husbands were at work.

Somehow, after he served prison time for his crimes, Deisler lied his way into getting the credentials to counsel drug abusers and sex offenders, which never should have happened if the state agencies that licensed him had looked into his past.

Karla Taylor’s attorney Deesling insisted to us that Deisler’s criminal history had happened many years before Taylor met him, and she had no knowledge of it. He went to prison, Deesling said, when Taylor was just a toddler (he was 31 years her senior). And even though the two of them had founded the National Association of Forensic Counselors, Deesling said that Deisler had retired and was no longer its president, and Karla was divorcing Deisler because he had not been truthful with her.

But Scientology’s attorneys had their theme. In court documents, they have continued to tell the tale that the NAFC was founded as an illegitimate enterprise, and that it never had any business certifying people for sensitive work. (That didn’t explain, however, why Scientology had gladly used the NAFC’s certifications for years to give the impression that its drug rehabs were more legitimate than they actually were.)

For the past year, the two sides have been going through the discovery process, producing tens of thousands of pages of documents, sitting for depositions, and answering interrogatory questions. Deadlines for that process approached this summer, and some of the defendants were using the material they’d gained from Taylor and NAFC to prepare motions for summary judgment to try and get the lawsuit thrown out of court.

And then, in August, Taylor ran into problems turning over interrogatory answers by the court’s deadline. After missing one due date, her answers were promised to Narconon’s attorneys by August 8 when her laptop was hacked on the night of August 7. The hacking was so thorough, and had put in so many controls on her machine, she couldn’t get access to her own hard drive. According to court filings, she overnighted the laptop to a security firm in Florida on August 8 to have it inspected and unlocked.

Naturally, Narconon’s attorneys complained bitterly to Oklahoma Federal District Judge Ronald White’s magistrate judge, Steven Shreder, who was handling the discovery process. On August 26, as punishment for missing the deadline, Judge Shreder ordered that data from Taylor’s laptop hard drive, as well as the NAFC business server, be turned over by a third party IT firm to the defendants’ attorneys.

Taylor’s attorneys fought that ruling, arguing that Taylor’s intensely private information was on the hard drive and that it had nothing to do with the case. But Judges Shreder and White stood firm. It was perhaps an indication that things would also not go well even if the motions for summary judgment were denied and a trial began as scheduled.

We don’t expect to learn much in the way of details about the settlement as it is finalized over the next week or so. But if we learn anything about it, we’ll let you know.


Kelly Preston with the Scientology photobomb

Kerri Kasem (on the right) and her friends were just trying to prove what big Scientology celebrities they were at the IAS gala in Saint Hill recently when they got bigfooted by one of the biggest Scientology celebrities of them all.

Watch the lovely Kelly Preston do the photobombing in this brief clip. See how fun it is to be a big OT in the coolest religion on earth?



3D-UnbreakablePosted by Tony Ortega on October 18, 2016 at 07:00

E-mail tips and story ideas to tonyo94 AT gmail DOT com or follow us on Twitter. We post behind-the-scenes updates at our Facebook author page. After every new story we send out an alert to our e-mail list and our FB page.

Our book, The Unbreakable Miss Lovely: How the Church of Scientology tried to destroy Paulette Cooper, is on sale at Amazon in paperback, Kindle, and audiobook versions. We’ve posted photographs of Paulette and scenes from her life at a separate location. Reader Sookie put together a complete index. More information about the book, and our 2015 book tour, can also be found at the book’s dedicated page.

Learn about Scientology with our numerous series with experts…

BLOGGING DIANETICS: We read Scientology’s founding text cover to cover with the help of L.A. attorney and former church member Vance Woodward
UP THE BRIDGE: Claire Headley and Bruce Hines train us as Scientologists
GETTING OUR ETHICS IN: Jefferson Hawkins explains Scientology’s system of justice
SCIENTOLOGY MYTHBUSTING: Historian Jon Atack discusses key Scientology concepts

Other links: Shelly Miscavige, ten years gone | The Lisa McPherson story told in real time | The Cathriona White stories | The Leah Remini ‘Knowledge Reports’ | Hear audio of a Scientology excommunication | Scientology’s little day care of horrors | Whatever happened to Steve Fishman? | Felony charges for Scientology’s drug rehab scam | Why Scientology digs bomb-proof vaults in the desert | PZ Myers reads L. Ron Hubbard’s “A History of Man” | Scientology’s Master Spies | Scientology’s Private Dancer | The mystery of the richest Scientologist and his wayward sons | Scientology’s shocking mistreatment of the mentally ill | Scientology boasts about assistance from Google | The Underground Bunker’s Official Theme Song | The Underground Bunker FAQ

Our Guide to Alex Gibney’s film ‘Going Clear,’ and our pages about its principal figures…
Jason Beghe | Tom DeVocht | Sara Goldberg | Paul Haggis | Mark “Marty” Rathbun | Mike Rinder | Spanky Taylor | Hana Whitfield


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