Scientology can settle legal disputes from within, appeals court rules

In an opinion that could set precedent for challenges to the Church of Scientology, a U.S. appeals court on Tuesday affirmed the church’s ability to arbitrate disputes with former members on its own, effectively sidestepping the court system.

The decision upheld a federal judge’s earlier ruling that resulted in the first-ever internal arbitration held between the church and defectors.

Luis and Rocio Garcia had sued Scientology in Tampa federal court in 2013, alleging they were defrauded of $1.3 million. But because the couple had signed dozens of contracts over their 28 years as parishioners agreeing to resolve any future disputes within the church, U.S. District Judge James D. Whittemore granted the church’s motion to compel the couple into internal arbitration.

Theodore Babbitt, an attorney for the Garcias, called the two-day arbitration that took place in 2017 “a sham” as church officials refused to allow the couple to enter evidence critical of Scientology or have an attorney present.

Church doctrine teaches that defectors like the Garcias are “suppressive persons” who are insane criminals out to destroy Scientology. Babbitt argued that because the Garcias were seen as enemies of the church, they could not possibly receive a fair hearing, making the agreements they signed “substantively unconscionable.”

On Tuesday, a three-judge panel of the U.S. Court of Appeals for the 11th Circuit voted 2-1 to side with the lower court. They agreed that deciding whether or not teachings about suppressive persons impacted the arbitration would have required the court to interpret Scientology doctrine, an endeavor that “the First Amendment forbids civil courts to undertake.”

By confirming all disputes must be diverted to internal arbitration, Babbitt told the Tampa Bay Times on Wednesday that the federal appeals court has ensured nobody hurt by Scientology has any legal recourse.

No parishioner acting as an arbitrator would ever rule against the church, because if they did, Babbitt said, Scientology would order them to be shunned by their family, friends and business associates. This means that while no claim can be heard in civil court, no internal arbitration will ever favor a Scientology critic, Babbitt said.

“What concerns me is that I don’t see how any former Scientologist can ever sue the church for anything now,” Babbitt said. “They can steal your money, they can lie to you, they can excommunicate you and isolate you and there’s nothing you can do about it.”

Babbitt said the Garcias could petition the U.S. Court of Appeals for a new hearing, and if that were denied, appeal to the U.S. Supreme Court. As of Wednesday, he had not yet discussed next steps with the Garcias.

Scientology spokesman Ben Shaw did not respond to a request for comment.

In their original lawsuit, the Garcias alleged that the church stalled construction of its massive Super Power building in downtown Clearwater in order to bilk parishioners for donations. The couple began donating to the project in 1998 and would give more than $420,000 for the building, which was not completed until 2013.

Spend your days with Hayes

Subscribe to our free Stephinitely newsletter

Columnist Stephanie Hayes will share thoughts, feelings and funny business with you every Monday.

Loading...

You’re all signed up!

Want more of our free, weekly newsletters in your inbox? Let’s get started.

Explore all your options

They also say they donated more than $40,000 to programs described as helping starving children in Africa and tsunami victims in the Pacific, but that those calls were a ploy by the church to solicit cash from parishioners.

After Whittemore ordered the case into arbitration, it took 2½ years for the hearing to take place. Scientology objected to all of the parishioners the Garcias suggested to be arbiters because the church deemed they were not “in good standing.”

The judge ultimately selected three Scientologists at random from a list of 500 provided by the church.

For the two-day arbitration in 2017, the Garcias were not allowed to bring witnesses. Out of 900 pages of evidence the Garcias submitted, a church official removed all but 70 because they contained “entheta,” a term Scientologists use for anything critical of the church.

“Essentially, (the Garcias) were denied any opportunity to present their case,” Babbitt wrote in an appeal filed in 2019. “They were also lectured by the chairman that they are suppressive persons trying to destroy the Church and they should recant and atone and come back to the church.”

The panel ultimately refunded the Garcias $18,495 for unused deposits on religious services but did not acknowledge the claims of fraud, misrepresentation or breach of contract.

When the Garcias challenged the outcome, Whittemore denied the couple’s motion, stating their challenges “involve matters of religious doctrine” and relied on “secular notions of due process.”

In their appeal to the federal appeals court, the Garcias also argued that the agreements themselves were not valid because at the time they signed them, the church did not have established rules for how to conduct arbitrations. In an earlier hearing, Scientology’s legal director, Allan Cartwright, testified that the church, founded in 1954, had never held an arbitration in its history before the Garcias’ case.

The appeals court, however, ruled that the agreements were sufficient since they at least outlined that the arbitration would be “conducted in accordance with Scientology principles” by a panel of three arbitrators who were “Scientologists in good standing with the Mother Church.”

In her dissent, 11th Circuit Judge Robin Rosenbaum argued that she would vacate Whittemore’s order compelling the arbitration because the agreements the Garcias signed were not valid. Rosenbaum said without established rules of procedure for the arbitration, the process was “as one-sided and unconscionable as an arbitration agreement can be.”

“You can’t make up the rules as you go along,” Rosenbaum wrote. “It’s a basic concept of fairness, and it’s one that applies to arbitration as well. No wonder. If a party to the arbitration can create the rules governing the arbitration as the arbitration progresses, it enjoys an insurmountable advantage that effectively guarantees its victory.”