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CASE NO. 8:13-CV-220-T27 TBM


TRUST; et al.
Defendants, Church of Scientology Flag Service Organization, Inc. (Flag Church) and
Church of Scientology Ship Service Organization, Inc. (Ship Church) file this memorandum of
law to address the two issues raised by the Courts Order of November 13, 2014 (Dkt 137): the
existence of rules of procedure and whether the arbitration is unconscionable and state.



Church Scripture consists of the writings and lectures of Scientology Founder L. Ron
Hubbard on the subject of Scientology and Dianetics. (Ex. 1, Deposition of Mike Ellis, p. 158).
Church Scripture includes documents called HCO Policy Letters (HCO PLs). HCO PL 7
September 1963, entitled Committees of Evidence; Scientology Jurisprudence, Administration
Of, governs the conduct of Scientology Ethics and Justice Procedures. A Committee of Evidence
may be requested by any Scientologist for whatever reason, including by a Scientologist who
has been expelled from the Church. (Ex. 1, Ellis Depo., pp. 125, 138, 140.) It may address any

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and all matters of Ethics and Justice according to the Scientology Justice system. (Id., pp. 211,

HCO PL 7 September 1963 unequivocally and conspicuously states on its title page:

This system is for use in all matters of justice in Scientology.

It also is Scripture of the Church that all disputes between and among Scientologists or
between Scientologists and any church entity be settled through such internal justice procedures,
and not through the civil courts. (Id., pp. 104-105, 229.) Indeed, that system is bilateral,
meaning that if the Church had a dispute with a Scientologist, it too would resolve the matter
through the internal justice system. (Id.) Scientologists are taught those principles through
participation in Scientology training and courses. Plaintiff Luis Garcia participated in precisely
such a course, and fully understood and agreed with the principle of internal dispute resolution
through the Scientology justice system. Thus, Mr. Garcia testified:
I was familiar with all the ethics procedures and justice procedures. And I knew
there was a system whereby Scientologists could settle disputes, have hearings . . . .
And I used some things of the system. . . . I was aware of the committees of
evidence, I knew how that worked. I mean, most Scientologists do because they
study them. We study this book, and we study . . . the ethics specialty course, and
we become well versed on how these things are supposed to work.
(Ex. 2, Deposition of Luis Garcia, pp. 23-24, 46-48.)
In agreeing to arbitration, the Plaintiffs signed numerous enrollment agreements over
many years. The enrollment agreements directly at issue here are the agreements that Plaintiffs
signed with Defendants Flag Church and Ship Church. Those agreements, with which the Court
is now familiar, specifically provide that if a dispute arises between the Plaintiffs and any
Scientology church or entity, the Plaintiffs will not seek relief in the civil courts, but will submit
such disputes to resolution through the Scientology system of dispute resolution procedures.
Accordingly, the Enrollment Agreements at issue here specifically provide that the Plaintiffs will
seek resolution of any such dispute solely and exclusively through Scientologys internal

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Ethics, Justice and binding religious arbitration procedures, which include application to senior
ecclesiastical bodies, including, as necessary, final submission of the dispute to the International
Justice Chief of the Mother Church of the Scientology religion, Church of Scientology
International (IJC) or his or her designee. Enrollment Agreement, para. 6(d). Those internal
justice procedures were the system of procedures applicable to Committees of Evidence, as
stated in the aforementioned HCO Policy Letter of 7 September 1963, which Mr. Garcia studied
assiduously in the course of his Scientology training. The Enrollment Agreement then sets forth
in greater detail the specific step of internal arbitration, which, the Plaintiffs agreed, should be
conducted in accordance with Scientology principles, and consistent with the ecclesiastical
nature of the procedures and the dispute . . . Id., par. 6(e).
Michael Ellis is the International Justice Chief for the Church of Scientology
International, the senior management church of the hierarchical Scientology religion. (Ex. 1,
Ellis Depo, pp. 202, 203.) Mr. Ellis is the senior church authority over all justice matters
concerning Scientology churches, missions, and parishioners. (Id.) Mr. Ellis trained for his
ecclesiastical position by intensely studying Scientology Scripture and policy relating to justice
and ethics matters for over a year, spending well over 3000 hours in such religious study. (Id.,
pp. 204-205). He has held his position since 1998. (Id., p. 203.)
It is to Mr. Ellis that any request for arbitration must be submitted, and it is his
responsibility to insure that any arbitration be conducted in accordance with Scientology
principles, and consistent with the ecclesiastical nature of the proceedings . . . (Id., pp. 230231.) Mr. Ellis has specifically studied the question of the procedures to be applied in an
arbitration proceeding, and he has definitively found that, according to Scientology Scripture and

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policy, the system of procedures applicable to a Committee of Evidence must be applied.1 As

International Justice Chief, Mr. Ellis is the person charged with determining and applying such
policies, and he speaks for the Church and the religion in that regard. (Id., pp. 226, 231-232.)
In particular, Mr. Ellis reviewed the 1963 Policy Letter and its statement that This
system is for use in all matters of justice in Scientology. He also reviewed paragraphs 6(d) and
(e) of the Enrollment Agreements, which provide that any dispute between a parishioner and a
church entity shall be resolved solely and exclusively through Scientologys internal Ethics,
Justice and binding religious arbitration procedures, and that any arbitration should be
conducted in accordance with Scientology principles, and consistent with the ecclesiastical
nature of the procedures and the dispute . . .

See Ellis testimony at 99-100 (the arbitration

procedures follow the system of committees of evidence which since 1963 has been the basic of
the justice policies) and at 231 (referring to the term Scientology principles as used in
paragraph 6(e) of the Enrollment Agreement: They would be the policies covering justice in
Scientology such as committee of evidence policy). Mr. Ellis further testified in his deposition
in this proceeding:
I reviewed the policies, particularly this policy committee of evidence. And it
was very obvious at that time that a religious arbitration would take the form of
the system used by the committee of evidence because it says its for all matters.
(Id., pp. 46-47)

Mr. Ellis first confronted the question about ten years ago when another church official
requested his counsel as to what procedure would apply:
Well, the first time it came to my attention or my thought was about 9 or 10
years ago. And at the time someone was someone that I worked with in the
same building was reviewing the enrollment agreement. And, so, they asked me,
because Im the person that they would ask as the international justice chief, what
form would a religious arbitration take.
Mr. Ellis testified that after examining the applicable Scripture and written policies as described
above, there was no question but that the system set forth in the Committee of Evidence Policy
Letter applies, and he so advised and directed. (Id., pp. 46-47, 207-210)

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Plaintiffs attempt to contradict the testimony and declaration of Mr. Ellis in several ways.
Each fails as a matter of fact and a matter of law.
First, Plaintiffs have presented the declarations and will present the testimony of former
Scientology staff member and now sworn church enemy Mike Rinder that he was responsible
for the development of the enrollment agreements and the arbitration provisions, and that it never
was intended that the Committee of Evidence procedures, or any other procedures, would apply
to the arbitration provisions. Rinder went so far as to claim in his declaration in this matter that
it was he who created the enrollment agreements and the arbitration provisions, and that it all
was intended as a sham:
During the course of my employment with the Church, I was responsible for
creating the Enrollment Agreement and arbitration clause, and I would
have been responsible for providing the rules for arbitration. No such rules
were ever created for the arbitration process beyond selection of the arbitral
panel, nor were, or have they ever been delineated. It simply was not the intent
of the Church that the arbitration process amount to anything beyond a
statement on paper.
(Dkt. 133-1 3) (emphasis added). In an earlier declaration in the Garcias dismissed state court
action, Rinder similarly claimed that the enrollment agreement was the result of my work with
in-house counsel for CSI, William T. Drescher, Esq. (Rinder Dec. Jan 6, 2012, Garcia v FSO),
which he identified in his deposition in this case as occurring in approximately 2000 (Ex. 3,
Deposition of Michael Rinder p. 63).
The evidence, however, belies Rinders sworn assertions. The arbitration provisions
which were made part of the enrollment agreements were drafted by attorney Sherman Lenske in
1982-83, consistent with the instructions of L. Ron Hubbard and Lyman Spurlock, Mr.
Hubbards representative and senior ecclesiastical official of Scientology. (Ex. 4, Deposition of
Sherman Lenske pp. 27-28, 35.) As Mr. Lenske testified that he never met or consulted with

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Rinder on the matter whatsoever. (Id., pp. 12, 16-17.) He also testified the arbitrators were to act
in a fair and impartial manner because that was part of the scriptures (Id. pp. 11-12) and that the
arbitration clause was not intended to unfairly restrict the rights of anyone. (Id., p. 12.)
In the deposition of Church official Allan Cartwright taken by Plaintiffs, Mr. Cartwright
reiterated that Mike Rinders statement in his declaration filed in this case about creating the
enrollment agreement and the arbitration clause was false. (Ex. 5, Deposition of Allan Cartwright
pp. 74-75). As Cartwright will testify at the hearing, Rinder had no duties in the division of the
church responsible for developing and drafting the enrollment agreements at the time.
Indeed, at his deposition, Rinder in effect recanted his declaration and admitted that at no
time did he ever create, develop, or draft the arbitration provisions or the enrollment agreements.
Q. You have no idea who actually put pen to paper in the creation of the
arbitration agreement; is that true?
A. Thats correct.
Q. Would you agree with me that youve never put pen to paper or keys
fingers to keyboard to draft the words of an arbitration agreement that is
contained in any enrollment form used by the Church of Scientology?
A. Correct. (Ex. 3, Deposition of Mike Rinder pp. 78-79)
Q. So now were through the entire 1980s. You dont know whether there was
an arbitration clause in an enrollment agreement and if there was, how it got there.
Do I understand your testimony correctly?
A. Youre correct. (Id., pp. 82-83)
Q. And for sure during that period, from 88 to 93, you werent involved in
any way in the preparation of enrollment agreements or arbitration clauses; is that
also true?
A. Its -- its, yes, very likely to be true. (Id., p. 84)
Okay. So now I dont want to fall into the logical mistake of the
undistributed middle here, so Im going to focus now on the period from 1990 to
about 1998, and your role, if any, in connection with the modification of any
enrollment form, if any, and its arbitration clause, if any.
A. Yes, I have that in mind, and I can save you a lot of breath here. I
dont recall any specific time where I was or I was not involved in those things,
but that doesnt -- that doesnt mean that there may not have been some revisions

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that happened in those years, but I certainly dont recall it without having my
recollection refreshed that that was the case. (Id., p. 110)
Second, Plaintiffs and their counsel have attempted to put their own definitions and spin
on the Scientology written Scriptures and policies. Thus, Mr. Garcia conclusorily states that
Scientologys Justice and Ethics system is irrelevant to the question of arbitration under the
enrollment agreements. The Agreements, of course, state quite the opposite, directly tying, in a
single clause, the question of arbitration to Scientologys internal Ethics, Justice and binding
religious arbitration procedures and requiring that arbitration be conducted in accordance with
Scientology principles and consistent with the ecclesiastical nature of the proceedings . . . And
Plaintiffs counsel spent over an hour attempting to cross-examine Mr. Ellis by reference to
various snippets from Scientology Scripture to show that not every single aspect of the
Committee of Evidence procedures would apply to an arbitration, especially because the
members of the panel are chosen in a different manner. Mr. Ellis repeatedly emphasized that
such contradictions are irrelevant to the ultimate question: whether, as the Scripture states, the
system of procedures established for Committees of Evidence must be applied to other justice
procedures such as arbitrations, as specifically stated in the Policy Letter.
Theres two different procedures [referring to the method by which the
members of a committee of evidence and an arbitration panel are chosen]. These
rules dont fit arbitration, do they?
A Those specific parts of it, but the general system does. The system of
getting evidence, the system of interviewing witnesses, et cetera, thats covered in
here . . . would definitely fit an arbitration. (Ex. 1, Ellis Depo pp. 114-115)
And theres no bill of particulars in an arbitration, right?
There would be. . . . Yes, I mean, it would have to based on the
fact that the arbitrators would have to have some direction on what theyre
looking into to decide. (Id., pp. 125-126.)
These attempts by Plaintiffs to deconstruct Scientology Scripture and written policy and
to challenge the definitive determination of Scientologys senior justice official on matters of

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ecclesiastical law and governance merely highlight the fundamental legal flaw in Plaintiffs
position. Plaintiffs ask this Court to determine what Scientology justice procedures are and are
not in a manner that is in direct contradiction to the Churchs own espousal of what they are. To
hold for Plaintiffs, the Court must determine that Plaintiffs correctly define church justice
procedures and that the church does not.

There is nothing that is more contrary to well

established First Amendment doctrine.

The Supreme Court has made clear that the judiciary has no role in interpreting or
applying religious doctrine or practice. Presbyterian Church v. Mary Elizabeth Blue Hull
Memorial Presbyterian Church, 393 U.S. 440, 449 (1969). (First Amendment values are
plainly jeopardized when church property litigation is made to turn on the resolution by civil
courts of controversies over religious doctrine and practice). A court cannot begin to adjudicate
what is and is not church doctrine or the importance of the doctrine to the religion.
[L]itigating in court about what does or does not have religious meaning touches the
very core of the constitutional guarantee against religious establishment. New York v. Cathedral
Acad., 434 U.S. 125, 133 (1977). A Churchs declaration of its religious beliefs and practices
must be accepted by the Court, lest the judiciary become entangled in deciding the nature and
content of a religion. In re Holy Spirit Assn for the Unification of World Christianity v. Tax
Commn of the City of New York, 55 N.Y.2d 512, 518 (N.Y. 1982).
Thus, in Bible Way Church of Our Lord Jesus Christ of the Apostolic Faith of
Washington, D.C. v. Beards, 680 A.2d 419 (D.C.1996), church members brought a negligence
action against the church over its alleged failure to account for church funds and to issue
financial reports to members. The District of Columbia Court of Appeals:
held that the First Amendment precluded a civil court from resolving the negligence
claim because the determination of whether particular accounting and reporting methods
advanced by the plaintiffs constituted the prevailing standard of care would require the
court to decide whether the church should apply those methods. As that determination

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necessarily would involve the court in matters of ecclesiastical judgment relating, for
example, to the church's collection, tithing, and offering practices and to the pastors'
discretionary funds, we concluded that a civil court could not resolve the dispute without
impermissibly entangling itself in doctrinal interpretations. Id. at 42831.
Meshel v. Ohev Sholom Talmud Torah (D.C. 2005) 869 A.2d 343, 355-56, applying Bible Way.
The Eleventh Circuit rigorously has upheld the principle that civil authorities must
abstain from interposing themselves in matters of church organization and governance, insisting
that the judiciary must avoid even the appearance of intrusion into such matters:
The Fifth Circuit applied a settled principle when it declared that the law is
clear: civil courts are barred by the First Amendment from determining
ecclesiastical questions. Simpson v. Wells Lamont Corp., 494 F.2d 490, 493 (5th
Cir.1974); accord, e.g., Natal v. Christian & Missionary Alliance, 878 F.2d 1575
(1st Cir.1989).
In applying this principle we must not narrowly limit its scope to actual
differences in church doctrine. The cases negative such a strict view. A spirit of
freedom for religious organizations, an independence from secular control or
m[a]nipulation[,] in short, power to decide for themselves, free from state
interference, matters of church government as well as those of faith and doctrine
is reflected in the Supreme Courts decisions.
Simpson, 494 F.2d at 493(quoting Kedroff, 344 U.S. at 116, 73 S.Ct. at 154).
Church of Scientology Flag Serv. Org. v. City of Clearwater, 2 F.3d 1514, 1537 (11th Cir. 1993)
(emphasis added).
This court cannot adjudicate whether the procedures contained within the 1963 policy
letter apply to internal arbitration proceedings in a manner contrary to that determined by senior
church authorities. That is a question of church law for the Defendants to decide. In Gonzalez v.
Roman Catholic Archbishop of Manila, 280 U.S. 1 (1929), Gonzalez claimed the right to be
appointed to a chaplaincy in the Roman Catholic Church under a will which provided that a
member of his family receive that appointment. The Archbishop of Manila refused to appoint
Gonzalez on the ground that he did not satisfy the qualifications established by Canon Law for
that office. Id. at 6. The Court held it was the Archbishop, not the civil courts, which had the
task of analyzing and interpreting church law to determine the validity of Gonzalez claim to a

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chaplaincy. Id. at 78. Here it is the International Justice Chief who has the task of analyzing
and interpreting church law (i.e., the 1963 policy letter and the enrollment agreements) and
applying it to the resolution of the Gracias dispute. It is not the role of this court or a former
Church member to make that analysis and application.
The point was reemphasized in even stronger terms in Serbian Eastern Orthodox Diocese
v. Milivojevich, 426 U.S. 696 (1976), where the Court reversed a state court decision finding the
removal of a Bishop to be arbitrary under church procedures. Id. at 735. The Court held that the
decision of the Serbian Diocese authorities was beyond civil court review.
[N]o arbitrariness exception in the sense of an inquiry whether the decisions of
the highest ecclesiastical tribunal of a hierarchical church complied with church
laws and regulations is consistent with the constitutional mandate that civil courts
are bound to accept the decisions of the highest judicatories of a religious
organization of hierarchical polity on matters of discipline, faith, internal
organization, or ecclesiastical rule, custom, or law.
Id. at 713. Even if an ecclesiastical decision appears harsh, humiliating, unfair, or irrational from a
secular viewpoint, civil courts have no role to play. Id at 715. Constitutional concepts of due
process, involving secular notions of fundamental fairness do not apply to ecclesiastical matters.
As Defendants showed in their moving papers, the Federal Arbitration Act applies to the
instant motion because the dispute arises out of activities involving interstate commerce. The FAA
reflects a liberal federal policy favoring arbitration. AT&T Mobility, LLC v. Concepcion, 131
S. Ct. 1740, 1745 (2011)(quoting Moses H. Cone Meml Hosp. v. Mercury Constr. Corp., 460 U.S.
1, 24 (1983) (Section 2 is a congressional declaration of a liberal federal policy favoring
arbitration agreements, notwithstanding any state substantive or procedural policies to the
contrary.)). It is Congress clear intent, in the Arbitration Act, to move the parties to an


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arbitrable dispute out of court and into arbitration as quickly and easily as possible. Moses H.
Cone Meml Hosp., 460 U.S. at 22. The FAA reflects a statutory policy of rapid and unobstructed
enforcement of arbitration agreements. Id. at 23. In Solymar Invs., Ltd. v. Banco Santander S.A.,
672 F.3d 981 (11th Cir. 2012), the Eleventh Circuit similarly explained that when Federal Courts
consider arbitration clauses, the following rule applies:
[F]ederal courts interpret arbitration clauses broadly where
possible. The results of such broad interpretation is that any
doubts concerning the scope of arbitrable issues should be resolved
in favor of arbitration.
Id. at 988 (quoting First Options of Chi., Inc. v. Kaplan, 514 U.S. 938, 945 (1995) (internal
citations removed)).
In Anders v. Hometown Mortg. Serv., Inc., 346 F.3d 1024 (11th Cir. 2003), the plaintiff
argued that, because an arbitration agreement covering any action, dispute, claim, counterclaim
or controversy might frustrate remedies afforded by federal statutes, the parties must not have
intended for the arbitration agreement to cover his claims. Id. at 1028. The Eleventh Circuit
rejected this didnt mean to arbitrate argument:
The agreement could not have been broader. Any disputes means
all disputes, because any means all. And so, of course, does
the word all by itself. The agreement reaches this dispute
because the agreement reaches any and all disputes.
Id. (citing Merritt v. Dillard Paper Co., 120 F.3d 1181, 1186 (11th Cir. 1997) (the adjective
any is not ambiguous any means all)).
See also, O.N. Equity Sales Co. v. Stephens, 2008 WL 835808, at *4 (N.D. Fla. Mar. 28,
2008) (the court must resolve any doubts concerning the scope of arbitration clause in favor of
arbitration); Ryan v. LP Fort Myers, LLC, 2014 WL 3341306, at *3 (M.D. Fla. July 8, 2014)
(the law is clear that any doubts concerning the scope of arbitration issues should be resolved in


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favor of arbitration); Hamlett v. Owners Advantage, LLC, 2013 WL 4711165, at *1-2 (S.D. Fla.
Aug. 30, 2013) (stating that arbitration agreements must be rigorously enforced by the courts
and when in doubt, questions of arbitrability should be resolved in favor of arbitration (quoting
Dean Eitter Reynolds, Inc. v. Byrd, 470 U.S. 213, 219 (1985))). Agreements to arbitrate now
receive near universal approval. Pilitz v. Bluegreen Corp., 2011 WL 3359641, at *2 (M.D. Fla.
Aug. 4, 2011).
Florida statutes are not materially different for purposes of this case. See, e.g., Gainesville
Health Care Ctr., Inc. v. Weston, 857 So. 2d 278, 282 (Fla. 1st DCA 2003). There is a strong
presumption in favor of enforcement of arbitration agreements in Florida, and a party seeking to
avoid enforcement will carry the burden of persuasion. See Weston, 857 So. 2d at 288; Spring
Lake NC, LLC v. Figeroa, 104 So.3d 1211, 1214 (Fla. 2d DCA 2012) (the court should resolve
any doubt concerning the scope of the provisions in favor of arbitration (quoting C.C. Borden
Constr., Inc. v. Walding Co., 94 So. 3d 725, 725 (Fla. 1st DCA 2012))); Estate of Perez v. Life
Care Centers of Am., Inc., 23 So.3d 741, 742 (Fla. 5th DCA 2009). The strong presumption in
favor of enforcement of arbitration agreements clearly extends to arbitration by a religious tribunal.
See e.g., Ainsworth v. Schoen, 606 So. 2d 1275 (Fla. 3d DCA 1992).
The unconscionability doctrine provides a limited, infrequently used exception to the
rule of freedom of contract. Steinhardt v. Rudolph, 422 So. 2d 884, 890 (Fla. 3d DCA 1982). A
court may with great caution invoke the doctrine in extraordinary circumstances to refuse to
enforce a contract or certain contract provisions. Weston, 857 So. 2d at 284. Synonyms for the
term unconscionable include shocking to the conscience and monstrously harsh. Garrett v.
Janiewski, 480 So. 2d 1324, 1326 (Fla. 4th DCA 1985). Unconscionability does not permit a
court to correct contractual terms which are unreasonable or impose an onerous hardship.


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Steinhardt, 422 So. 2d at 890; see also Belcher v. Kier, 558 So. 2d 1039, 1043 (Fla. 2d DCA
1990) (noting legal distinction between unreasonable and unconscionable); Beach Resort
Hotel Corp. v. Wieder, 79 So. 2d 659, 663 (Fla. 1955) ([C]ourts may not rewrite a contract . . .
to relieve one of the parties from the apparent hardship of an improvident bargain.).
To invalidate a contract as unconscionable, Florida law requires a contract to be both
procedurally and substantively unconscionable. Basulto v. Hialeah Automotive, 141 So.3d 1145,
1158 (Fla 2014). Procedural unconscionability relates to the manner in which the contract was
entered. AMS Staff Leasing, Inc. v. Taylor, 2015 WL 71705, at * 4 (Fla. 4th DCA Jan. 7, 2015);
Brea Sarasota, LLC v. Bickel, 95 So.3d 1015, 1017 (Fla. 2dDCA 2012); Pilitz, 2011 WL
3359641, *3; (citing Powertel, Inc. v. Bexley, 743 So. 2d 570, 574 (Fla. 1st DCA 1999)).
Substantive unconscionability requires an assessment of whether the contract terms are so
outrageously unfair as to shock the judicial conscience. Pilitz, 211 WL 3359641, at *3 (quoting
Bland v. Health Care & Retirement Corp. of Am., 927 So. 2d 252, 256 (Fla. 2d DCA 2006);
citing Kohl v. Bay Colony Club Condo., Inc., 398 So. 2d 865, 868 (Fla. 4th DCA 1981)).
Substantive unconscionability is defined as an agreement no man in his sense and not under
delusion would make on the one hand, and as no honest and fair man would accept on the other.
Belcher, 558 So. 2d at 1044 (quoting Hume v. U.S., 132 U.S. 406 (1889)).
Unconscionability must be measured at the time the contract is made and not at some
later date. Steinhardt, 422 So. 2d at 889. A party to a contract is not permitted to avoid the
consequences of a contract freely entered into simply because he or she elected not to read and
understand its terms before executing it, or because, in retrospect, the bargain turns out to be
disadvantageous. Estate of Perez v. Life Care Centers of Am., Inc., 23 So. 3d 741 (Fla. 5th
DCA 2009) (quoting Weston, 857 So. 2d at 288). The party seeking to avoid the arbitration


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provision has the burden to establish unconscionability. Perez, 23 So. 3d at 742.

A. The Agreement to Arbitrate Was Not Procedurally Unconscionable
At the hearing on this motion on September 4, 2014, Plaintiffs counsel conceded that the
Garcias could not claim procedural unconscionability on the basis of not having had an
opportunity to know that they were being compelled to agree to the arbitration provision. Plaintiffs
had entered into over three dozen such agreements over a period of more than twenty years. As
Plaintiffs counsel stated:
But really it wasnt a situation that they didnt have a chance to because they were
rushed into it, thats not really our claim. Our claim is the question of
unconscionability does not rise or fall on that issue. . . . I can hardly make the claim
that thats the basis of our argument because they did it many times over many
(Dkt. 129, Sept. 4, 14 Hearing Trans., pp. 38-39.) As the court then stated, Well, Mr. Babbitt
just acknowledged that hes not in a position to contend that they were rushed or forced to sign
something because of that very point. So Im moving on. (Id., p. 41.)
Rather, Plaintiffs counsel argued that the agreement to arbitrate was unconscionable
because, in his view, (1) it constituted an adhesion contract because Plaintiffs had no choice but to
accept the arbitration provision or forego participation in Scientology religious services that they
wished to undertake; and (2) Plaintiffs were not informed of the procedures that would apply at an
arbitration. (Id., p. 28.)
Plaintiffs adhesion argument must be rejected under the First Amendment. The Church is
neither a public accommodation, a common carrier, nor a secular employer. It is not bound by
ordinary anti-discrimination laws.2 It has an inherent constitutional right to accept or reject

In Hosanna-Tabor Evangelical Lutheran Church and School v. EEOC, 132 S. Ct. 694 (2012)
the Court held that secular laws prohibiting the retaliatory termination of employment did not
apply to ecclesiastical matters such as who a church might decide to retain as its minister. Id. at

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members, employees or clergy on any or whatever basis it wishes. It may impose conditions on
membership or participation in its religious services free from government intrusion or
All who unite themselves to [a church] do so with an implied consent to [its]
government, and are bound to submit to it. . . .
We cannot decide who ought to be members of the church . . .
[T]he judicial eye cannot penetrate the veil of the church for the forbidden
purpose of vindicating the alleged wrongs of excised members; when they
became members they did so upon the condition of continuing or not as they and
their churches might determine, and they thereby submit to the ecclesiastical
power and cannot now invoke the supervisory power of the civil tribunals.
Watson v. Jones, 80 U.S. 679, 729-31 (1871). See Kedroff v. St. Nicholas Cathedral of Russian
Orthodox Church, 344 U.S. 94, 115-16 (1952) (Watson principle is mandated by the First
Amendment). Well over a century later, in a case involving this very church (Flag Church), the
Eleventh Circuit, relying on and quoting Watson, re-stated its core holding. See Church of
Scientology v. City of Clearwater, 2 F.3d at 1544 (striking down a city ordinance requiring a
church to disclose to its members all its expenditures from moneys donated by the members:
The City may not intervene on behalf of such dissidents. If they remain dissatisfied with the
churchs voluntarily assumed disclosure policy then they may attempt to reform that policy from
within, they may acquiesce in the policy despite their objections or they may leave the church).
So too here. While as a matter of Scientology religious law Plaintiffs could not enroll in
Scientology courses or religious services without agreeing to be bound by the enrollment
agreements dispute resolution provision, no one could or did compel them to participate in the

709. The church allegedly discharged a minister in response to her threat to file a civil lawsuit
against the church. Id. at 700. The threat contravened Lutheran ecclesiastical doctrine that
disputes among Christians should be resolved internally without resort to the civil court system
and the legal wrangling it entails. Id. at 715.


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Scientology religion or to make their donations. There, of course, are many religions and many
charities that provide relief to humanitarian causes, and the Garcias were free to choose to
participate in or donate to any of them. They chose to be Scientologists and to donate to the
causes selected by the religious authorities. If the Garcias disagreed with the condition of
participating in the Church, i.e., that they agree to its arbitration of disputes policy, they had the
choice to try to reform it, to acquiesce in it, or to leave. They acquiesced for over twenty years,
and then they left. What they may not do now is ask this court to intervene, after the fact, on the
basis that they purportedly had no choice but to maintain their participation in the Church in
accordance with church law and governance.
Even aside from the First Amendment, the adhesive nature of a contract is just one factor
in determining procedural unconscionability. See, e.g., Murphy v. Courtesy Ford, L.L.C., 944
So. 2d 1131, 1134 (Fla. 3d DCA 2006); Perez, 23 So. 3d at 742 (same); Voicestream Wireless
Corp. v. U.S. Commcns, Inc., 912 So. 2d 34, 40 (Fla. 4th DCA 2005) ([T]he presence of an
adhesion contract alone does not require a finding of procedural unconscionability.). Moreover,
adopting Plaintiffs suggestion would render essentially every consumer agreement in Florida
procedurally unconscionable, a sweeping conclusion inconsistent with the principle that the
unconscionability doctrine is to be applied infrequently. Here, the purported adhesive nature of
the contract must be discounted by the ecclesiastical context and nature of the agreement, and the
fundamental First Amendment issues that would arise if the agreement were deemed
unenforceable because of conditions that a church imposes upon the right of parishioners to
participate in its religious services. See N.L.R.B. v. Catholic Bishop of Chicago, 440 U.S. 490,
500-01 (1979) (courts should construe civil law to avoid serious constitutional questions where


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With respect to Plaintiffs argument that they were unaware of the procedures that would
apply to an arbitration proceeding, Plaintiffs once again are wrong as a matter of both fact and law.
First, at his deposition before to this hearing, Mr. Garcia repeatedly stated that he had
closely studied and was thoroughly familiar with the Scientology Ethics and Justice system
procedures, including specifically the 1963 Policy Letter. See ante at 2. With respect to the
Enrollment Agreements, however, Mr. Garcia first stated that he had never even read the
Enrollment Agreements.3 When confronted, however, by his own declaration in which he made
statements indicating that he clearly had read the agreements, Garcia backtracked, admitting that
he had read the agreements, but not fully. (Ex. 2, Garcia Depo pp. 95-96.) Whatever that
means, the applicability of that Policy Letter to all Scientology justice procedures is clearly stated
in a conspicuous manner at the very outset of the Policy Letter. No one who read the Policy Letter,
let alone who studied it as carefully as Mr. Garcia did, could have failed to notice and understand
the statement. Moreover, the connection between Scientology justice proceedings and arbitrations
is clearly stated several times in the Enrollment Agreements themselves, which Garcia read, even if
not fully. Again, anyone familiar with the Policy Letter, even in passing, could not fail to
understand the reference. Mr. Garcia admitted he never suggested to anyone in the church that
the agreements were objectionable and should be changed. (Id., p. 47.)
Second, Florida law does not require an arbitration agreement to specify extensive rules
and procedures such as those set forth in the Florida Rules of Civil Procedure. Rather Florida
law requires that an arbitration provision be definite enough that the parties at least have some
idea as to what particular matters are to be submitted to arbitration and set forth some procedures
by which arbitration is to be effected. Spicer v. Tenet Florida Physician Services, LLC, 149 So.

As noted above, a party may not avoid the terms of an agreement to arbitrate by claiming he
never read the agreement. Perez, 23 So. 3d at 742.

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3d 163, 165-66 (Fla. 4th DCA 2014)(emphasis in original) (quoting Malone & Hyde, Inc. v. RTC
Transp., Inc., 515 So. 2d 365, 366 (Fla. 4th DCA 1987) (citing G & N Constr. Co. v.
Kirpatovsky, 181 So. 2d 664 (Fla. 3d DCA 1966))).
In Intracoastal Ventures Corp. v. Safeco Ins. Co. of America, 540 So.2d 162 (Fla. 4th
DCA1989)(reversed on other grounds at 833 So.2d 762), the court found the procedures
sufficiently identified where the agreement provided for selecting two independent appraisers,
the two appraisers were then to select an impartial umpire, and if an umpire could not be agreed
upon within fifteen days, either party could petition the court to appoint one; if the appraisers
could not agree upon an amount within a reasonable time, they were to submit their differences
to the umpire. Id. at 163.
In Malone & Hyde, Inc. v. RTC Transportation, Inc. 515 So. 2d 365 (Fla. 4th DCA1987),
the arbitration provision was invalidated because it did not identify the number of arbitrators,
how the arbitrators were to be selected, or the issues to be decided. Id. at 366. The arbitration
provision in this case does identify the particular matters to be submitted to arbitration and does
set forth procedures by which arbitration is to be effected.
Accordingly, Plaintiffs have no credible argument to support a claim of procedural
unconscionability. That should be the end of the inquiry, because Plaintiffs bear the burden of
showing both procedural and substantive unconscionability. As discussed below, they also
cannot carry the burden on the second prong.
B. The Arbitration Agreement is Not Substantively Unconscionable
In analyzing the Garcias arguments, it is helpful to distinguish between the two species
of claims that they assert. First, in Counts II and III of their Amended Complaint, the Garcias
assert contract claims based upon their donations made to Flag Church and Ship Church as


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advance donations for religious services. Significantly, Plaintiffs base these claims precisely upon
their interpretation of the Scientology religious policy, as set forth in the Agreements by which the
Plaintiffs agreed to submit to religious arbitration. See, e.g., Amended Complaint 44 (resting
cause of action on allegation that Defendants maintain a policy of returning funds), 43 (alleging
Ship Church induced donations with the express understanding that they would be returned upon
demand), 45 (resting claims on alleged Scientology principles of exchange), 90 and 96
(resting contract claims on defendants alleged represent[ations] in [their] policy and
publications). The enrollment agreements specify that such donations are not refundable, except
through application of ecclesiastical policy by the Claims Verification Board (CVB). Specifically
the enrollment forms signed by the Garcias provide:
c. No Scientology church is under any duty or obligation whatsoever to
return any portion of any religious donation I make. However, I have read
Scientology Policy Directive 13 March 1996, Return of Donations, and
understand that under certain circumstances identified in published
ecclesiastical policies such as that Scientology Policy Directive, a return
of donations may be obtained through my strict compliance with those
published policies and procedures relating to the Claims Verification
Board. I further understand, acknowledge and agree that . . . :
ii. returns of donations are exclusively within the ecclesiastical
authority and sole discretion of the Claims Verification Board;
Without the Agreements and the Scientology Policy upon which they are based, Plaintiffs
would have no basis to request a return of donations. And a civil court may not determine whether
Plaintiffs interpretation of church policy and law is correct and the churchs interpretation
incorrect. Plaintiffs rely on the refund religious policy, incorporated in the Agreements, to argue
that they have a right to return of their donations.

Certainly under the numerous First

Amendment cases cited above, this Court is incompetent and powerless to interpret and construe
Scientology religious law and policy at all, let alone in a manner contrary to the Churchs own
interpretation and application of that policy. Presbyterian Church v. Mary Elizabeth Blue Hull


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Memorial Presbyterian Church, 393 U.S. at 450 (First Amendment forbids civil courts from
[making their own] interpretation of particular church doctrines and the importance of those
doctrines to the religion); In re Holy Spirit Assn for the Unification of World Christianity v.
Tax Commn of the City of New York, 55 N.Y.2d at 527-28

(It is for religious bodies

themselves, rather than the courts or administrative agencies, to define, by their teachings and
activities, what their religion is). Thus, the enrollment agreements and the arbitration provisions
provide plaintiffs with a potential remedy for return of donations where no such remedy exists at
all under civil law. Certainly, a court could not conclude that no man in his senses and not under
delusion would make such an agreement. The agreements thus cannot be deemed unconscionable
as a matter of law.
Second, in Counts I, IV, V, and VI the Garcias assert claims for the return of Super
Power Project and IAS humanitarian donations. No church policy permits refunds of donations
of that kind. Allan Cartwright will testify that, in fact, donors to the Super Power Project and to
IAS humanitarian projects, including the Plaintiffs, specifically were informed that the donations
were not refundable. Thus, church policy prohibits the refunds that the Garcias seek.
The Garcias allege, however, that their donations were not used for the purposes for
which they were solicited.

Even with respect to such claims, however, civil courts have not

hesitated to enforce religious policies that require faith based arbitration of disputes. See Jenkins
v. Trinity Evangelical Lutheran Church, 356 Ill.App.3d 504, 825 N.E.2d 1206, 121213 (2005)
(enforcing Lutheran Church doctrine mandating church-based arbitration of disputes); General
Conference of Evangelical Methodist Church v. Evangelical Methodist Church of Dalton,
Georgia, Inc., 807 F.Supp.2d 1291, 1294 (N.D. Ga. 2011) (enforcing church rules that believers
should resolve disputes among themselves or within the Church wherever possible, that


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members would resolve disputes among themselves without resort to the courts, and by
means of Christian conciliation, mediation or arbitration); Easterly v. Heritage Christian
School, Inc., 2009 WL 2750099, at *1 (S.D. Ind. 2009) (Teachers contracts with Christian
School agreed to resolution of differences by following the biblical pattern of Matthew 18:1517, including biblically based mediation followed by arbitration in accordance with Rules of
Procedure for Christian Conciliation, and waived right to file lawsuit). See also, Spivey v. Teen
Challenge of Florida, Inc., 122 So. 3d 986, 992-93 (Fla 1st DCA 2013) (enforcing religious
arbitration agreement signed by decedent requiring religious practices despite religious objection
of decedents personal representative; noting that religious arbitration is exceedingly common in
todays pluralistic religious society).
Moreover, the mere fact that the Garcias label these claims as claims for civil fraud does
not mean that they do not implicate church doctrine, governance and procedures beyond review
of civil courts. Rather, the claims implicate matters of church financial management, record
keeping, accounting, and decision making governed by ecclesiastical principles. As the court in
Meshev v. Ohev Sholom Talmud Torah, 869 A.2d at 355-56, explained its earlier decision in the
Bible Way Church case described above:
Our decision in Bible Way Church also stands for the proposition that in determining
whether the adjudication of an action would require a civil court to stray impermissibly
into ecclesiastical matters, we look not at the label placed on the action but at the actual
issues the court has been asked to decide. The claim in Bible Way Church was one of
negligent accounting principles, a cause of action with a distinctly secular sound to it. Yet
when we looked behind the label, we determined that a church's accounting principles
involve core ecclesiastical matters, such as the church's collection, tithing, and offering
practices, that raise questions of internal church governance, are often based upon the
application of church doctrine, and are therefore beyond the subject matter jurisdiction of
the civil courts. Bible Way Church, supra, 680 A.2d at 429.
Thus, as with their breach of contract claims based explicitly on church policy, the
Garcias ultimately may not have had a viable civil court forum even for their allegations of


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fraudulent misuse of funds they donated to their church. Once again, by agreeing to Scientology
arbitration of such claims, the Garcias may have obtained a remedy where none otherwise
existed. Here, too, a court could not conclude that no man in his senses and not under delusion would
make such an agreement at the time that the Garcias did.

The Garcias insist the arbitration clauses are substantively unconscionable because they
require the arbitrators to be Scientologists in good standing. According to them, no Scientologist
in good standing possibly could provide a fair hearing to the Plaintiffs because they have been
declared suppressive persons, in effect excommunicated from the church, and deemed to be
enemies with no rights as Scientologists. Plaintiffs base this argument upon their reading of
selected passages from pieces of Scientology Scripture, and from their testimony and that of
disaffected church members who are open critics and enemies of the church. International
Justice Chief Ellis, however, has testified that the members of any arbitration panel would be
required by Scientology policy and by specific instructions he would issue to be impartial and to
judge the claims of the Garcias fairly and impartially.
So people chosen as arbitrators who are Scientologists in good
standing, if they believe that, that they cant even speak to or adhere to anything
that a suppressed person says, how can they sit in judgment and listen to a
suppressed person and find for them, believe them? Wouldnt that be adhering to
what they -- what they believed?
A No, because the -- the justice policies of Scientology have to do with
finding out what is the truth of the matter and what are the facts of the matter. It
has nothing to do with personality or opinion or whatever.
In this particular scenario that were talking about of a person whos been
declared suppressive asking for use of Scientology justice procedures, whether it
be arbitration, committee of evidence, or whatever form of Scientology justice,
the members who are Scientologists in good standing would know from justice
policies and they would also be instructed to read justice policies that they would
be impartial in that matter.
Whether the person is like I said, whether theyre declared or whether
theyre a different religion or whether theyre whatever is not relevant to the
matter theyre deciding. Theyre just looking for the truth of the matter theyre
looking into. (Ex. 1, Ellis Depo pp. 160-161)


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Q. So even though they thought they were psychotic, suppressive people

are psychotics they still could . . . find for them?
A. Regardless of the situation, if there is evidence of a certain thing,
which is what is being looked at, not the person or anything other than just the
evidence. . . . The arbitrators will be instructed, based on basic Scientology
justice principles that they are impartial and they are not going to have any
predetermined idea of what to believe or not believe. Theyre there to get facts,
provide whatever evidence, collect whatever evidence is needed so that they can
arrive at a fair conclusion. (Id., pp. 175-77.)
The factual record supports Mr. Ellis. According to his testimony, over the past decade
over one hundred persons designated as suppressive persons by the church have petitioned Mr.
Ellis for a Committee of Evidence to challenge that designation and have succeeded in having
the designation and excommunication overturned. (Id., pp. 219-220.) All such proceedings, of
course, have gone forward under the same system of procedures as would apply under the
arbitration provision of the Enrollment Agreements. Mr. Cartwright also will testify that over 40
per cent of suppressive persons who have challenged their excommunication have succeeded
in having the order overturned.
In addition, Plaintiffs efforts to invoke certain passages from many volumes of Scientology
Scripture and policy to prove that no Scientologist in good standing could act as an impartial
arbitrator of the Garcias claims not only is contrary to religious policy as described by Mr. Ellis and
counter factual to the actual experience of church justice proceedings recited by Mr. Ellis and Mr.
Cartwright, but is fundamentally at odds with the First Amendment. Once again, Plaintiffs ask this
Court to construe church doctrine and law in a manner contrary to that of the Church itself. But the
First Amendment forbids civil courts from [making their own] interpretation of particular
church doctrines and the importance of those doctrines to the religion. Presbyterian Church v.
Mary Elizabeth Blue Hull Memorial Presbyterian Church, 393 U.S. at 450. Indeed, the very
prospect of litigating in court about what does or does not have religious meaning touches the very


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core of the constitutional guarantee against religious establishment. New York v. Cathedral Acad.,
434 U.S. at 133.
Reasonable, rational and prudent persons can and do agree to faith-based resolution of
disputes via arbitration before members, officials, or elders of their congregation. Certainly, in
no way should a court conclude that no person in his right sense and not under delusion would
refuse faith-based resolution of disputes before members in good standing of his own religion. It
is only now, after having left the religion that the Garcias object to faith-based resolution.
Unconscionability must be measured at the time the contract is made and not at some later date.
Steinhardt, 422 So. 2d at 889.
In both General Conference of Evangelical Methodist Church , 807 F.Supp.2d at 1294-95,
and Easterly v. Heritage Christian School, Inc., 2001 WL 2750099 (S.D. Ind. 2009), the court
recognized as valid and enforceable faith-based arbitration agreements applying Christian biblical
principles and policies. Those courts rejected claims that the arbitrators would be inherently biased
because of their religious beliefs and affiliations. General Conference of Evangelical Methodist
Church, 807 F.Supp.2d at 1301. (The Supreme Court has repeatedly counseled that [under] the
FAA . . . courts should not presume, absent concrete proof to the contrary, that arbitration systems
will be unfair or biased (quoting Easterly, 2009 WL 2750099 at *3)). See also Jenkins, 825
N.E.2d at 1214 (rejecting partiality argument based on fact that the dispute resolution procedure
calls for arbitrators who are either members or employees of the [defendant] Synod, because
Plaintiff has not pointed to any specific prejudice he would suffer under the bylaws, but only a
generalized fear of partiality. This anxiety is insufficient to overturn the LCMS arbitration
In BDO Seidman, LLP v. Bee, 970 So. 2d 869 (Fla. 4th DCA 2007), a former partner sued


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an accounting firm over retirement benefits after he was terminated for cause. Id. at 873. The
former partner unsuccessfully argued that an arbitration clause in his partnership agreement was
substantively unconscionable because it required the arbitrators to be BDO partners. Id. at 875.
The court observed that an arbitration proceeding could be challenged post-award if there was
evidence of partiality or actual bias. Id. at 877.
The arbitration provisions contained in the numerous enrollment agreements signed by
the Garcias are binding and enforceable.
11th , 2015, I electronically filed the foregoing

I HEREBY CERTIFY that on February

with the Clerk of the Court by using the CM/ECF system which will send a notice of electronic
filing to the following: RONALD P. WEIL, ESQUIRE,, and THEODORE



ESQUIRE,, Attorneys for Plaintiffs.

Of Counsel:
Eric M. Lieberman
Rabinowitz, Boudin, Standard,
Krinsky & Lieberman, P.C.
45 Broadway, Suite 1700
New York, NY 10006

# 2309799

/s/ Robert V. Potter

Robert V. Potter
Florida Bar No. 0363006
F. Wallace Pope, Jr
Florida Bar No. 012444
Post Office Box 1368
Clearwater, Florida 33757
(727) 461-1818; (727) 441-8617-fax
Attorneys for Flag Church & Ship Church