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Church of Scientology settles suit with PR firm

Published Oct. 7, 2005

On the verge of a trial, the Church of Scientology has settled a $40-million federal lawsuit against its former publicity agent, Hill & Knowlton, and foe Eli Lilly and Co. for an undisclosed sum of money.

No one involved in the litigation, however, is discussing the terms of the agreement, which was completed last week.

"All parties acknowledged that they are pleased that the case has been settled," said a statement from the Church of Scientology International in Los Angeles.

The agreement requires confidentiality, said Kurt Weiland, a director of the Church of Scientology International and head of its Office of Special Affairs.

"I can't say anything," said John Berard, a spokesman for Hill & Knowlton in New York, the nation's largest public relations firm.

The settlement ends the second of three major lawsuits brought by Scientology following a 1991 Time magazine cover article that painted the church as a "thriving cult of greed."

Earlier this year, Scientology dropped its libel case against former Scientologist Steve Fishman and his therapist, Uwe Geertz. Their courtroom allegations about Scientology had been cited in the article.

The third case, against Time itself, is pending.

For 2{ years, Scientology was a client of Hill & Knowlton, which worked with the controversial religion to help turn around its image and teach its officials how to handle reporters' questions.

Two days after the Time story, however, Hill & Knowlton dropped the church as a client.

In its lawsuit, Scientology alleged that Hill & Knowlton violated its contract with the church and was wrongly pressured by Eli Lilly, a drug manufacturer, to end its relationship with Scientology. An arm of the church has led a strident battle against Lilly's antidepressant drug Prozac.

Hill & Knowlton's sister advertising agency, J. Walter Thompson Co., and their parent, WPP Group PLC of Great Britain, were also parties in the lawsuit, as was WPP chief executive officer Martin Sorrell.

Scientology alleged that Lilly threatened to pull its multimillion-dollar advertising account with J. Walter Thompson if WPP didn't force Hill & Knowlton to end its relationship with the church.

Scientology's leader, David Miscavige, announced the settlement Friday at a weekly graduation ceremony at the church's Flag Service Organization in Clearwater, its international spiritual headquarters.

Church officials would not elaborate on his announcement, which included a statement that the church was paid money as part of the deal.