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Seeking to break legal logjam, judge asks for list of Scientologists to arbitrate church lawsuit

 In 2013, a California couple filed a lawsuit against the Church of Scientology alleging fraud. They say they spent $1.3 million on church services and causes, many of which never came to fruition, including $420,000 for the church’s “Super Power” building in Clearwater, decorated in red ribbon. [DOUGLAS R. CLIFFORD | Times]
Published Apr. 30, 2017

TAMPA — More than two years ago, a federal judge in a high-profile lawsuit against the Church of Scientology told both sides to settle the matter outside court.

Since then, the case has gone nowhere because neither party can agree on an arbitrator.

So now the judge in Tampa plans to pick three random Scientologists in California and ask them to resolve the case.

"Candidly, my sense is that you are not cooperating in the selection of an arbitrator," U.S. District Judge James D. Whittemore told the parties in a court hearing this month. "This case will be arbitrated and I have explored avenues that I can follow, if you will, in forcing you to do this."

He ordered the church to assemble a list of 500 Scientologists "in good standing" with the church who live in the greater Los Angeles area, where the plaintiffs reside. From that list, the judge will select three at random to serve as arbitrators.

"(The case has) been going on four years and I expect it will be going on for a long time," said Ted Babbitt, a West Palm Beach attorney representing the plaintiffs, Luis and Rocio Garcia.

It started in 2013, when the Garcias, of Irvine, Calif., filed a lawsuit against the Church of Scientology that alleged fraud. The couple were church members for 28 years but left after growing weary of money demands and spiritual practices they said had become "corrupted."

They say they spent $1.3 million on church services and causes, many of which never came to fruition, including more than $420,000 for the Scientology "Super Power" building in Clearwater. They want a refund.

The church argued in court that the couple had to go through Scientology's internal justice system to be considered for a refund.

Whittemore ultimately agreed. He said the couple was bound by contracts they signed in their time with the church that require them to use the church's internal process to get their money back.

In 2015, the judge stayed the case and ordered the parties to go to arbitration. That means each side would select people to hear the dispute and decide how to settle it.

The trouble was neither side could agree on whom to pick.

The Garcias objected to the arbitration process, saying it puts their claims entirely in the hands of practicing Scientologists, who frown heavily on defectors. It also required them to find a practicing Scientologist to serve on the arbitration panel but barred them from ever talking to that person.

The couple offered one person. But the church rejected him, saying he was not a "Scientologist in good standing with the mother church."

Both sides spent several months exchanging letters and emails trying to agree on someone who was a good Scientologist and agreeable to the Garcias.

In April 2016, the Garcias complained the church was "thwarting" their ability to pick an arbitrator. The couple asked for the lawsuit to continue in court. The judge refused and told the sides to keep talking.

More words were exchanged.

Over the course of a year, the church gave the Garcias 120 names of people who could serve as arbitrators, according to court records. The Garcias refused to select any of them.

At the same time, the Garcias gave the church 52 of their own potential arbitrators. Of those, the church named three who were Scientologists in good standing. But all three declined to get involved in the case.

Again, in 2017, the church proposed 120 more names. Again, the Garcias refused to accept any. Again, the Garcias proposed one name, but again, the church said that person was not in good standing.

Round and round they went.

On April 7, Whittemore held a court hearing to ask why no arbitrators had been selected more than two years after he ordered them to do so. Both sides said they were at a stalemate.

Babbitt complained that the church's list of names were all "hand-picked" so they hadn't selected any.

"Therein is the problem," Whittemore told the lawyer. "That's bordering on failure to comply with a court order and it's close to justifying a dismissal for lack of prosecution as a sanction. . . . This will be arbitrated."

A lawyer for the church noted a federal law that gives the judge authority to pick the arbitrators if the opposing sides cannot do so themselves.

Whittemore ordered the church to give him within 15 days a list of 500 Scientologists in good standing, selected at random in the greater Los Angeles area, where the arbitration is to be held. The list would include each person's contact information and notes indicating if they work for the church.

From that list, the judge will select three to serve as arbitrators. He also ordered that neither the church nor the Garcias interfere with his selection or contact any of the people selected to serve. He threatened sanctions.

Joseph Varner, a civil trial lawyer in Tampa who's not involved in the case, said the move is a bit unusual, but so is the inability to arbitrate.

"I can't speak for Judge Whittemore, but I would think any judge would be disappointed that he told the parties to pick an arbitrator two years ago and they haven't been able to arbitrate," Varner said. "I've never encountered anything like that."

An attorney for the church did not return calls for comment.

"We don't know what's going to happen," Babbitt said.

Contact Dan Sullivan at dsullivan@tampabay.com or (813) 226-3386. Follow @TimesDan.

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