||||| Path: uni-berlin.de!fu-berlin.de!news.mailgate.org!news2.euro.net!216.196.110.149.MISMATCH!border2.nntp.ams.giganews.com!border1.nntp.ams.giganews.com!nntp.giganews.com!feeder1.cambrium.nl!feed.tweaknews.nl!130.161.131.100.MISMATCH!news.tudelft.nl!tudelft.nl!newsfeed.multikabel.nl!news.tele.dk!bofh.vszbr.cz!news.radio.cz!24.226.1.12!feed.cgocable.net!pd7cy1no!shaw.ca!pd7tw2no.POSTED!53ab2750!not-for-mail X-Trace-PostClient-IP: 70.70.44.129 From: Gerry Armstrong Newsgroups: alt.religion.scientology,de.soc.weltanschauung.scientology Subject: Reporter's transcript, 1984-04-19, Scientology v. Armstrong, LASC No. C 420153 Message-ID: <0q9et0d0m27n13gjmp5s20o8kd0t0k9vev@4ax.com> X-Newsreader: Forte Agent 1.7/32.534 MIME-Version: 1.0 Content-Type: text/plain; charset=ISO-8859-1 Content-Transfer-Encoding: 8bit Lines: 8036 Date: Sat, 01 Jan 2005 22:54:49 GMT NNTP-Posting-Host: 24.67.253.205 X-Complaints-To: abuse@shaw.ca X-Trace: pd7tw2no 1104620089 24.67.253.205 (Sat, 01 Jan 2005 15:54:49 MST) NNTP-Posting-Date: Sat, 01 Jan 2005 15:54:49 MST Organization: Shaw Residential Internet Xref: uni-berlin.de alt.religion.scientology:1820521 de.soc.weltanschauung.scientology:111563 Webbed at: http://www.gerryarmstrong.org/50grand/legal/a1/rt-1984-04-19.html SUPERIOR COURT OF THE STATE OF CALIFORNIA FOR THE COUNTY OF LOS ANGELES DEPARTMENT NO. 57 HON. PAUL G. BRECKENRIDGE, JR., JUDGE CHURCH OF SCIENTOLOGY OF CALIFORNIA, Plaintiff, vs. GERALD ARMSTRONG, Defendant. ______________________ MARY SUE HUBBARD, Intervenor. ______________________ NO. C 420153 REPORTER'S TRANSCRIPT OF PROCEEDINGS Thursday, April 19, 1984 APPEARANCES: (See next page.) NANCY L. HARRIS, CSR #644 Official Reporter [page break] APPEARANCES: For the Plaintiff and Intervenor: LITT & STORMER BY: BARRETT S. LITT Paramount Plaza 3550 Wilshire Boulevard Suite 1200 Los Angeles, California 90010 (213) 386-4303 -and- BARRETT S. LITT BY: MICHAEL S. MAGNUSON The Oviatt Building 617 South Olive Street Suite 1000 Los Angeles, California 90014 (213) 623-7511 For the Plaintiff Only: PETERSON & BRYNAN BY: JOHN G. PETERSON 8530 Wilshire Boulevard Suite 407 Beverly Hills, California 90211 (213) 659-9965 For the Defendant: CONTOS & BUNCH BY: MICHAEL J. FLYNN and JULIA DRAGOJEVIC 5855 Topanga Canyon Boulevard Suite 400 Woodland Hills, California 91367 (213) 716-9400 [page break] INDEX PAGES 1 through 134, incl. DAY DATE PAGE Thursday April 19, 1984 A.M. 1 P.M. 82 -------------------------------------------------------------- PRETRIAL MOTIONS 1 -------------------------------------------------------------- [page break] 1 LOS ANGELES, CALIFORNIA; THURSDAY, APRIL 19, 1984; 9:10 A.M. -oOo- THE COURT: Good morning, counsel. ALL COUNSEL: Good morning. THE COURT: You people have practically buried me in paperwork here. I have been doing a lot of reading and I am not sure I have as good a handle on some of these problems as I'd like to, but at least I think we could probably get started with some of these motions. Plaintiff has suggested an order of review of motion. I don't know whether defense has any particular feeling one way or another about the suggested order. MR. FLYNN: I believe the first motion was the disqualification. THE COURT: I think they had that at the bottom. Counsel, would you state your appearances for the record from my left to right? MR. PETERSON: John Peterson for plaintiff Church of Scientology. MR. LITT: Barry Litt and Michael Magnuson for plaintiff and intervenor. MR. FLYNN: Michael Flynn and Julia Dragojevic for the defendant. MR. LITT: Your Honor, while Mr. Flynn is looking at that in terms of the order that we suggested, I would make one modification which is, it seems to me, that the court might want to put the question of the equitable claim issue 2 and the jury trial issue after it has determined the motions in limine. THE COURT: Yes, I would prefer to deal with that later. MR. FLYNN: The only suggestion I would make, Your Honor, is with regard to the motion regarding disqualification. THE COURT: We have joint motions. Would you prefer to hear those first? MR. FLYNN: I think those should probably be heard first. THE COURT: Okay, I will take that. Plaintiff's motion to disqualify the defense counsel Flynn and defendant's motion to disqualify the plaintiff's counsel Litt. I guess what is sauce for the goose is sauce for the gander. My tentative ruling would be to deny both motions. If you want to be heard further, I will be happy to hear further. MR. LITT: I would like to be heard if I may. THE COURT: Certainly. MR. LITT: Your Honor, I should first clarify the nature of our motion which is not to disqualify Mr. Flynn from any representation of Mr. Armstrong, but it is to disqualify him from certain forms of participation. The first has to do with the question of the documents under seal. The second has to do with the question of the implications of his status as a witness and what role he plays in the trial. Let me take each of them in turn. I don't need to spend a lot of time, I don't 3 think at this stage, going over the nature of the materials under seal. Suffice it to say that they are the private materials of Mr. and Mrs. Hubbard, that they were sent to Mr. Flynn for use in his other litigation, and it is our contention that given the fact that the essence of the wrong committed here was precisely Mr. Armstrong taking these materials to provide them to Mr. Flynn to allow Mr. Flynn access to these materials through the back door of status of counsel in this case, when it is admitted that they were provided to him for use in other cases, constitutes a substantial and unjustifiable intrusion into the privacy of the Hubbards and the church in the very process of vindicating those rights. Now, if it were just that these have been provided to Mr. Flynn, perhaps the balance might not tip so much in our favor. But I think that there are other circumstances that make it even more compelling. Firstly, we have made reference in our papers to the fact that Mr. Flynn represented a son of Mr. Hubbard's from a former marriage and he brought on this man's behalf an action to attach Mr. Hubbard's assets on the theory that he was missing. In that action, as in this case, many broad ranging allegations concerning Mr. Hubbard were made. Mr. Flynn was ultimately disqualified from actually representing Mr. Hubbard's son because of his conflict of interest with the estate because Mr. Flynn is suing the estate. However, Mr. Flynn had been permitted to act as counsel for out of state depositions. Mr. Flynn did so. 4 In the course of the proceedings there was discovery taken into the financial records of Mr. Hubbard from various banks. Mr. Flynn obtained those records. There was an order placing those records under seal by the court in that case, Judge Hennigan in Superior Court of Riverside County. There was an order that the materials could not be used for any other litigation. Mr. Flynn was held in contempt by that court for having used the sealed materials, private financial materials relating to L. Ron Hubbard in other proceedings connected to Scientology or to Mr. Hubbard. Mr. Flynn has said and we have cited in our papers that he is incapable of distinguishing what comes from one set of documents and what comes from another set of documents, and yet we have an order here prohibiting the use of the information and the materials for any case other than this case. Mr. Flynn has admitted his inability to do that in the deposition taken of him only within the last two months. Mr. Flynn, by his own testimony, represents 35 parties in litigation with the Church of Scientology, L. Ron Hubbard and Mary Sue Hubbard. Mr. Flynn himself is a plaintiff in a case filed in the United States District Court in the District of Massachusetts in which L. Ron Hubbard is the sole named defendant. When all of these circumstances are taken together, when we realize that one of the fundamental problems with the court processes in dealing with privacy issues is that the process itself threatens to undermine the very privacy 5 which it is the function of the court to protect, then we believe that Mr. Flynn should not be permitted access to these documents when all the circumstances are taken together. That is the present status of the matter. Judge Shimer, and Mr. Flynn did not contest this, agreed to enter an order that Mr. Flynn could not have access to the documents pending further ruling of this court, which means as the matters presently stand, Mr. Flynn does not have access to the documents. It is our contention, one, that that should at a minimum remain until the issue of the admissibility of the documents is determined because if they are not admissible, Mr. Flynn has no need to gain access to them and should not be permitted to gain access to them, and that secondly, even if certain materials from the sealed documents are found to be admissible, Mr. Flynn should not be permitted to do that, and Miss Dragojevic, who, while, she has some similar conflicts here they do not amount to the totality of the circumstances here, or anyone from her firm should be the counsel to handle that part of the case for the defendant in order to insure that the privacy rights of the Hubbards and the church are not undermined by Mr. Flynn's access. I could say quite honestly that based on the experience of the parties from our side of the table, it is the concern that these materials and the information in them will be misused for purposes outside of this litigation which has a track record to it. It is not speculation. It is sufficiently substantial that we think that the court 6 should at least take the measure of preventing access to the documents, and that there is no substantial prejudice to the defendant in doing that. That is the first element of our motion. The second element of our motion has to do with the implications of Mr. Flynn's status as a defendant -- I am sorry, as a witness in this case. I have already described that the heart of the case has to do with Armstrong's taking these materials, copying them or in some cases taking originals, sending them to Mr. Flynn for use in other litigation. Mr. Flynn will be a witness called by us. Whether he will be a witness called by the defendant, I do not know. I don't believe he was on the defendant's witness list. He will be a witness called by us. The defendant has argued that this is a trial tactic on our part. I think the facts speak for themselves. It is not a trial tactic. The court should be aware that in December, I believe it was prior to any indication, Mr. Flynn was not of record in this case, Your Honor. He filed a motion to appear pro haec vice in this case to be heard the day of trial, the day the case was originally set for trial which was March 22nd. That was filed approximately -- it was filed sometime in March. In December or January we had made clear to the law and motion court our need for a commission to take Mr. Flynn's deposition because he was a witness in the case 7 and we intended to take testimony from him and use that testimony in this case. So that the record is quite clear that before there was any question of Mr. Flynn acting as trial counsel, our need and our intention to use testimony from Mr. Flynn and to use him as a witness was clear, and the circumstances in light of the allegations, are clear that he is a probative and important witness in the case. The problem is that we are now going to be in a position where frankly one of the central actors in this case, Mr. Flynn, because the heart of the case has to do with what happened between Mr. Flynn and Mr. Armstrong in the transfer of the documents, is now going to be the person to argue as an attorney on behalf of another defendant. He is not representing himself, his own credibility and his own, by implication or directly, his own motives. The ABA, the recent Model Rules of Professional Conduct of the American Bar Association, which are not in force in this state, state that a lawyer shall not act as an advocate at a trial in which a lawyer is likely to be a necessary witness except where one, the testimony relates to an uncontested issue; two, the testimony relates to the faith and value of legal services rendered; or three, it would work a substantial hardship on the client. The Comment to that rules goes on to talk about the problem, not just when a client is calling a lawyer as a witness but for either side, the problem of combining the role of advocate and witness. It says, "Combining the role of advocate and witness can prejudice the opposing party 8 and can involve a conflict of interest between the lawyer and party. The opposing party has a proper objection where the combination of roles may prejudice that party's rights in the litigation." That is precisely the situation we are in here. Mr. Flynn, in effect, is going to have the opportunity to argue his own credibility, his own motivation, and to infer to the jury in the context of arguing as attorney for another party the propriety of Mr. Armstrong's conduct in association with him. In light of the lateness with which the application was made from Mr. Flynn in the role of counsel in this case, the firm of Contos & Bunch was sole counsel of record in this case from the time the action was filed until the time that the court ruled on Mr. Flynn's pro haec vice motion which was, I believe, April 2nd or actually by the time it got ruled on it was like April 9th. So that the argument that Mr. Armstrong will be substantially prejudiced under the circumstances should not carry a great deal of weight because frankly until a week or two ago it was not known whether the court would grant Mr. Flynn permission to appear pro haec vice. It was known that the problems that I have raised with issues in the case and the work on this case has been done by the firm of Contos & Bunch. They are California counsel. They have represented Mr. Armstrong throughout, and the prejudice to us is simply greater than any benefit to Mr. Armstrong. This does not mean that Mr. Flynn cannot 9 assist the firm of Contos & Bunch. What we are talking about is the ability and the problem in acting as counsel before the jury. We are not even saying he can't argue the motions to the court. We are talking about the particular problem of being able to play the dual role before the jury of advocate and witness. So it is on the basis of these facts and circumstances that we raise the issues that we do and we ask not for a complete disqualification, but we do ask that these forms of participation be prohibited by the court. THE COURT: Very well. MR. FLYNN: If Your Honor's ruling is the same, then I will refrain from argument. If Your Honor wishes to have me be heard -- THE COURT: Well, my reaction is, of course, that his first point deals with your use of these exhibits, I suppose, as it might relate to other cases, and my reaction is that if counsel remains in this case, he is subject to the power of this court to control these proceedings and access to exhibits, and the court can make any appropriate orders it may see fit with respect to any exhibits that are available. I assume that counsel has knowledge of these exhibits gained from things which occurred in the past. He knows pretty much what is there and it seems to me that I can't erase that from his mind, and it seems to me that the court has the power to control the use of any of the exhibits in this proceeding, and this should cover that problem. 10 So far as the other aspects of it, it again seems to me that this case has been expedited. It has not taken five years to get to trial like most of our cases, and the fact that Mr. Flynn has only come in of recent date only bears upon the fact that this case hasn't been around all that long. It seems to me that the present state of our ethical rules are that as long as there is no prejudice to the client and the client wants a particular lawyer to represent him, then the client's wishes should be respected and if Mr. Armstrong is willing to waive any possible claim of prejudice by reason of the fact that Mr. Flynn is here and apparently is going to represent him, that is satisfactory with the court. Also, the court would make the proviso that Mr. Flynn, if he is to argue the case,can't argue his own credibility as to matters as to which he is testifying or would be required to testify, and if under those circumstances Mr. Armstrong wants Mr. Flynn to represent him and is willing to waive any claim of prejudice, then as far as I am concerned, Mr. Flynn may remain as counsel in the case. MR. FLYNN: Thank you, Your Honor. Mr. Armstrong is here so we could put that on the record right now. THE COURT: It is Mr. Gerald Armstrong? MR. ARMSTRONG: Your Honor. THE COURT: You heard my statement? MR. ARMSTRONG: Yes. 11 THE COURT: You understand that plaintiff has indicated they are going to call Mr. Flynn as a witness in this case. If that occurs and he testifies, if he remains as counsel, he will not be permitted to argue his own credibility; that is, be can't argue to the jury that he should be believed over somebody else. MR. ARMSTRONG: I understand, Your Honor. THE COURT: And that conceivably might be considered prejudicial to your case. I don't know. So, do you waive any claim of prejudice by reason of this fact? MR. ARMSTRONG: Yes, I do. THE COURT: And any other claim of prejudice that might exist by reason of the fact that your attorney may be called as a witness in this trial? MR. ARMSTRONG: Yes. MR. FLYNN: In that light, Your Honor, I would like to correct one statement which is in the record regarding this contempt proceeding which is somewhat personal to me and somewhat important, I would think, for purposes of the record. And that is that it is true that I was held in contempt, but the court should be aware that it was done under the following circumstances: I did not appear and defend the contempt proceeding because that was at that point the third contempt proceeding and the twelfth legal proceeding that had been brought against me. It was the church's practice to notice my deposition in various areas of the country all at the same time, and then when I didn't appear, they would 12 bring contempt actions in different areas of the country all at the same time, and this, in fact, happened on one occasion when I was conducting legislative hearings with the City of Clearwater, Florida relative to the Church of Scientology where my deposition was noticed in Florida, in Massachusetts and in California in three separate cases, all at the same time, and I was unable to appear in those three separate locations, and then ex parte the Church of Scientology went in and sought contempt actions. With regard to this one matter that I did not even appear and contest because I thought it was so frivolous on its face, it related to the following facts: A deposition was taken in the De Wolfe proceeding, the probate proceeding, and thereafter two members, a member of the Church of Scientology and its attorney Sherman Lenske filed affidavits with the court relative to part of that deposition proceeding, even though the deposition was under seal, and distributed those copies of their affidavit to the news media on the front steps of the Riverside Superior Court. Thereafter Miss Dragojevic obtained possession of those two affidavits and called me on the telephone and asked me about the two affidavits, and I said on the telephone that I confirmed that in the deposition a bank official had, in fact, testified that there was an attempted forgery in the amount of $2 million of one of L. Ron Hubbard's checks on or about the time that he disappeared and this other group had taken control of his assets. On that basis, Miss Dragojevic, unaware of the 13 sealing order in connection with my response to the two affidavits that had been made public, filed an affidavit in an unrelated federal action, and thereafter the Church of Scientology brought the contempt, Mary Sue Hubbard and the Church of Scientology brought the contempt action against me in the Riverside Probate Court on the basis of Miss Dragojevic's affidavit relative to that simple phone conversation. I did not appear and defend it and the judge apparently found me in contempt. I subsequently went out there and asked him to vacate it. I had not filed a memorandum in support of it, and the judge at the hearing said, "Well, there was no bad faith. It was only a mere technicality and that is why I entered it." And he chose not to vacate it. Those were the circumstances under which that took place, and as I indicated, it was a long succession of harassing legal actions that the Church of Scientology has taken against me. Other than that, I would just like to correct the fact of what took place before Judge Shimer. Judge Shimer had the issue on my petition for pro haec vice before him, and in the middle of the argument I simply stood up and told Judge Shimer that rather than address the issue of my access to the documents during the week that has transpired between -- the week that transpired between the time of the motion and the time that this trial would actually begin, he simply said enter an order preventing the access during that time 14 period and leave everything else to the trial judge as to how he will conduct the trial and what documents will be examined at that time. Secondly, as the court is going to find out through the course of this proceeding, I have long known about the contents of all of those documents. In fact, I had them in my possession for two months and, in fact, the great bulk of the documents, as the court is going to find out, are already in the public arena and approximately a year before Mr. Armstrong ever came to me, I filed a 200 page report with the City of Clearwater in which some 10,000 pages of exhibits, including many of those documents, were attached to that report. So, on those two items, I would just like to correct the record. MR. LITT; Well, Your Honor, that is one of the problems I have. What has just occurred is one of the problems I have in the case. I am not going to go through all Mr. Flynn's claims about legal proceedings that have been brought against him and everything else. Mr. Flynn was represented in the contempt hearing. All I did was recite the basis of what happened, and the reason we are concerned about his access. That is still our concern, and we would ask a minimum; one, I point out that Mr. Flynn states that he cannot recall many of these documents so that the issue that he has had access does not really solve the problem. That is from his deposition testimony. 15 What Judge Shimer ordered, and I am quoting from the transcript here in response to Mr. Flynn's offer to stipulate that the matter of access to the documents go over to the trial court. Judge Shimer said: "I accept your offer and that will be the condition to the granting of the application, that you are not to be allowed access to the sequestered documents except on order of the trial court judge." Now I would ask that at a minimum this issue of the documents and access to the documents, that the status quo remain until the court has made rulings on the motion in limine regarding the documents. THE COURT: Well, he is here. Where is he going to go look at the documents while he is here, counsel? I suppose that sooner or later I will get around to ruling on these motions. MR. LITT: He doesn't need to look at the documents if they are not going to be admitted in evidence. THE COURT: I haven't ruled upon that. MR. LITT: I understand that, so what I am asking is that the status quo with respect to no access to the documents remain until such time as the court does rule because if the court rules that the documents are not admissible, then there is no need for the representation of Mr. Armstrong for Mr. Flynn to have access to these documents. THE COURT: I haven't made any orders of any kind, so I don't know what you are referring to. 16 MR. LITT: I understand. Well, what I am referring to is the somewhat confused, the present status of Judge Shimer's order. Does that remain in effect until further order of the court? THE COURT: Yes. Do you want to take up the defendant's motion to disqualify Mr. Litt? MR. FLYNN: I will waive it, Your Honor, if your preliminary ruling is as stated. THE COURT: Okay. Motion is denied. The next motion purports to be the motion limiting the subject matter of admissible evidence and testimony of various witnesses. MR. LITT: Your Honor, if I may make a suggestion. I think that the issues would probably flow more naturally if I argued the motion in limine regarding the documents before that. THE COURT: Which motion is that; sub (b), documents sealed by the court? MS. DRAGOJEVIC: Yes, Your Honor. MR. LITT: Yes, Your Honor, and the relevant pleadings in that, Your Honor, are three. There is a motion in limine regarding admission of and testimony relating to the documents sealed by this court, and then there is an opposition to that motion, and then there is a combined reply memorandum which largely speaks to that but is also a reply on the motion in limine regarding the subject matter. THE COURT: Very well. 17 I have read the documents that both parties have submitted on this matter. So far as the tentative rulings are concerned on this, I don't know whether I have any tentative rulings. I am leaning toward the position that once we determine what the issues are, that any evidence that is in the documents that is relevant to those issues should be received in evidence. MR. LITT: Let me begin, Your Honor, by discussing briefly -- THE COURT: I have some problems with some of the issues, but be that as it may, go ahead. MR. LITT: Discussing briefly what the issues are, what the circumstances are because I think the defendant's papers make clear that at least as we view it that the purported relevance of the documents essentially relates to issues that are not permissible issues in the case at all. The case, this case is, in essence, a very simple case, although nothing simple about the litigation of the case exists. But the case itself involves the following circumstances: Mr. Armstrong was a member of the Church of Scientology and active in the Scientology movement from 1969. He was a dedicated Scientology staff member who worked full time for the church for many years. L. Ron Hubbard is the founder of the religion of Scientology. He is revered by Scientologists. He is 18 considered the sole source of doctrine for the Scientology religion, and his writings and researches are the basis of the religion, and as such, be holds the title of founder and holds an esteemed position to any Scientologist, which is beyond really what one who has not had direct experience with it can characterize, and it really can only be understood in the context of a characteristic ken that a religious follower has for the person who started that religion. Mr. Armstrong in 1980, January or February of 1980, petitioned within the church that he be appointed as an archivist to gather up materials that had been found in a building on church property in a place out in the desert called Gilman Sot Springs, it turned out to be a great deal of old material of the Hubbards which had been gathered, as Mrs. Hubbard will demonstrate eventually and Mr. Armstrong does not dispute, over years of marriage and from Mr. Hubbard's life before the marriage. And these materials had been gathered up in 1959 when the Hubbards left Washington, D.C. and stored for many years by them privately, and then moved to church property and stored there. These were come upon. Mr. Armstrong says that they were come upon in the course of what he calls a shredding party. Regardless of the circumstances, they were come upon and according to him, realizing the importance of these documents, he took them to this superior. The upshot of it was that it was deemed that these materials were of great importance and great value and should be preserved and maintained and protected, and Mr. Armstrong petitioned to 19 hold the post to do that. He petitioned to Mr. Hubbard, with copies to various church Scientologists for approval. He got back a note, which it is not clear whether it was written by Mr. Hubbard or not, but that essentially approved his holding this position. This was a church position. The evidence that will be given to establish that, including from Mr. Armstrong himself, although he waffles on the subject, is undisputed. So he sets about gathering up these materials. The materials that he gathered were the most private of papers. They were letters between Mr. Hubbard and his current wife, Mary Sue Hubbard, the intervenor. They were letters between Mr. Hubbard and his first two wives. They were letters between Mr. Hubbard and his parents. There was a marital agreement between Mr. and Mrs. Hubbard. There were private journals of Mr. Hubbard through various years of his life. There were Naval records. There was correspondence with attorneys. There was business correspondence. There were letters with friends. There were certain writings concerning international activities of the church. There were manuscripts, tax records, divorce records. This is the type of things. These were all things, by the way, that were given to Mr. Flynn. Mr. Armstrong, as part of his function as archivist, was responsible to provide information to a man named Omar Garrison. Omar Garrison had contracted with the 20 Scientology publishing house to write an authorized biography of Mr. Hubbard which was subjected to approval, and he was given access to various of these materials from these archives, and without getting into whether it was fully understood by Mrs, Hubbard that this was, in fact, going on, nonetheless it clearly happened under the auspices of the church, and we are not making an issue out of it in this case. Mr. Armstrong gave these materials to Mr. Garrison. By Mr. Armstrong's own testimony, he gave them to Mr. Garrison solely for use on the biography. It was not done for any other purpose. He didn't think he had the right to use them for any other purpose. Mr. Garrison didn't think he had the right to use them for any other purpose. They were considered confidential by both of them. They had only this limited purpose which had control on it because ultimately the manuscript itself was subject to review. Mr. Armstrong at a certain point became disillusioned, for whatever reasons, with the church. He left the church in December of 1981. Prior to doing that, he made copies of voluminous amounts of material to give to Mr. Garrison because he felt that Mr. Garrison should be sure to have access to that. He then says that he helped Mr. Garrison on the biography for a period of time. Mr. Garrison says that he did up until pay of 1982. In May of 1982, Mr. Armstrong took a letter, a private, and by his description, extremely private letter of Mrs. Hubbard to Mr. Hubbard and took it to Clearwater, Florida and showed it to Mr. Flynn. 21 The conversation that took place between Mr. Flynn and Mr. Armstrong I do not know the details of because it has been consistently asserted that it is protected by the attorney-client privilege. Nonetheless, subsequently Mr. Armstrong went to Mr. Garrison and asked Mr. Garrison if he could take copies of various materials. He said he needed them for his case. They were legally related, and in the course of the next several months he made copies of 8 to 10,000 pages of these private materials which were provided either to Mr. Flynn and later in, I believe it was, a second delivery also to the firm of Contos & Bunch. Those are the materials that are under seal. Those are the materials that are at issue in this case and the materials are what I described to the court earlier. What I picked out are things that have been established were sent by Mr. Armstrong to Mr. Flynn or to the firm of Contos & Bunch. Now the issue, therefore, is whether or not these private materials can be used by the defendant and introduced into evidence. We have made clear our position that we will not introduce the evidence -- I am sorry -- the documents. By not introducing the documents, we are foregoing from a legal point of view a substantial issue in the case because the documents are very private documents, but because we are not prepared to vindicate our rights solely by giving them up in the very course of doing it, we have chosen to limit the issue, and we will present testimony that simply categorizes the nature of the documents in the way that I 22 stated before, most of which testimony comes from Mr. Armstrong. These are letters and correspondence. They are this period, they are that, most of which Mr, Armstrong has testified to. Now, in light of that issue, the defendant has put forward certain theories of the relevancy of this. We don't intend to introduce them, and given the fact that all we are doing is providing general categorizations, most of which come from Ms. Armstrong, we are not opening up in any way in our case the contents. The defendant has put forward a variety of theories as to why it is relevant, the most important of which I will address last, and that is his public policy theory. I will say that because that theory, I think, is the real theory on which he rests his argument of the relevance of the documents, but let we briefly speak to the other theories that he puts forward. He says first it is relevant to damages. It is not relevant to damages because providing a private letter, even if the contents of the document do not speak to anything particularly private, is an invasion of privacy and therefore we are entitled to proceed strictly on the fact that these were private materials that were provided in an unauthorized way, and if we don't rely upon the contents of those materials to establish damages, which we do not, then the defendant is not entitled to argue that the contents show that they are not private because we are not arguing that the contents 23 show that they are private. We are arguing that the nature of the material is private. If you write a letter to your spouse and in it all you do is talk about what happened in court today, which the whole courtroom saw, you are entitled to an action for invasion of privacy for somebody improperly gaining that letter and taking it from you and showing it to someone to whom you did not authorize it, and you could rely strictly on the fact that it was a private letter, and if you didn't argue that the contents were particularly private and rested solely on the fact of the privacy of the material in its general nature, then the defendant would have no reason to argue that the contents aren't private. Only if you asserted that there was something independently private about the contents would you do this. So, we rely upon the general characterizations. They are journals. We rely really on Mr. Armstrong. Mr. Armstrong says these are private materials. Mr. Armstrong says they are confidential materials, and it is on that that we are preparing to put forward our case. So, they are not relevant for damages. It is contended that they are relevant because the facts in them are in the public record. The problem is that this confuses the issue. We are not talking here about a particular fact. We are talking about providing copies of private documents. Therefore, if one of the facts in the documents is private, given the way that we are framing the case, it does not matter. Again, only if we were asserting the contents 24 of the documents themselves as an independent basis would this be relevant. What facts are in those documents and whether any of them have ever been published anywhere or not is not relevant in light of the way that the case is being framed by us and in light of the way that we will put forward the evidence which is without reference to the contents themselves of the documents. Therefore, the only real issue has to do with the public policy issue because if there is public policy, the defense is not available which, as we will demonstrate it is not, then the damages theory and the publication theory does not apply. The most that could be done on the publication theory is to show that a particular document that is under seal, there is a public copy of. In other words, if Mr. Flynn contends that there is a Naval record that was already in the public record, then it could be put forward that that document was not private. That is at least discoverable although we would contend that is not a defense because since they were taken from Mr. Hubbard or from the church or Mr. Garrison, they were private materials, and the fact that some other copy existed in the public record did not obviate their privacy. But even on that basis, it becomes relevant. That is the only basis on which any documents -- and that would be by introducing the public record documents and then a determination could be made at that point, and we would frankly, if necessary, enter into stipulations as to whether 25 or not it is the same as the documents under seal without introducing the documents under seal. So that the heart of this comes down to quite an extraordinary public policy issue. Now, in discussing that issue, we would suggest to the court that the court should understand the context in which we are dealing. The real theory that the defendant is advancing and especially as it applies to the document is to accomplish through the vindication process what they were not entitled to accomplish on their own, to wit: Mr. Armstrong takes the documents. Court restrains his use of the documents. Requires them to be put with the court. Requires Mr. Flynn and requires the firm of Contos & Bunch to return the documents. Why were the documents taken? So that they could be used by them against Mr. Hubbard, against Mrs. Hubbard and against the church. Now we come to trial. They weren't allowed to do it by taking them. What they want to accomplish is to be allowed to do it under the imprimatur of this court on the theory that it is evidence. We have cited cases that talk about the dilemma that a party seeking to vindicate privacy rights faces in that there is a danger that the very process of vindication will intrude worse than what occurred originally, and we face the potential problem of that in this case, and I think it is critical for the court to understand that. They want these documents spread on the public 26 record for use elsewhere. That is the intended objective. It is an effort to engage in, and the theory that is being put forward is an effort to engage in trial by calumny. It is a desire to intrude into these private materials so that they can be used in the public arena in various ways as part of what is in reality a very intense litigation battle and public battle that exists throughout the country in which Mr. Flynn is involved with the church, and I am not asking for the court to rule on the merits of these issues, but the implications of how the defendant is trying to utilize the processes of this court, I think, are important. It is important to understand that context. Now, before addressing the public policy issue as such, I think that it is important to first speak to the standard that the court has to use with respect to the documents. I argued before relevance and, in fact, it is our contention that under traditional relevancy standards these documents are not relevant given how we have framed and intend to frame the case, But the standard, in fact, is not relevant. The standard, as we have demonstrated in our brief, is that because these documents are private documents, that they must be more than relevant once it is established that the documents themselves are private and are entitled to the privacy protections of the United States Constitution and the California Constitution, and I will not elaborate on the discussion in the brief. We cited several cases; Boyd, Couch, United States versus Hubbard, Nixon, all of which clearly establish that 27 materials of the type that we are dealing with here are private papers. The cases cited in a rather weak effort to oppose that concept are essentially cases having to do with the scope of the exclusionary rule and nothing else, and it is very clear that the materials themselves are private documents. Now, once they are private, the traditional standards for infringing upon constitutionally protected rights that are fundamental rights comes into play. The California cases in the context of discovery are crystal clear on that. Britt versus Superior Court is crystal clear on that. Therefore, what must be shown, a compelling state interest in disclosure or in use in this case where there are no less intrusive means available. That is the standard that must be met in order for this court to determine that these documents may be admitted into evidence. We have cited numerous cases that show that material frankly much less private than what we are dealing with here has been protected. In the case of Porten, student transcripts that were on file; in Valley Bank of Nevada, financial data; in Board of Trustees versus Superior Court, personnel files were not discoverable. These are materials frankly that on their face are not nearly as private as the materials that we are talking about here. The defendant cannot begin to meet this standard. We have already said that we are not going to introduce the documents. We have already said that the 28 defendant admits these categories in general. The reference to the categories, which is all that is needed, is far less intrusive than permitting the contents of the documents themselves. Now, since the materials meet the constitutional requirement, it is the burden of the defendant to demonstrate that that constitutional right way be infringed by the introduction of the documents. In the exhibit list submitted by the defendant, the list for the documents under seal says "Documents under seal" which is reflection of what we are talking about. Any admission of the documents at all could only be done based on a particularized finding by this court that the individual documents, and only those portions of the individual documents, meet this test. It is impermissible for a sweeping admissibility of documents, even if any documents do come in which I will turn to more in a moment, but I wanted to emphasize this point. But any determination, if the court finds that any of these theories are permissible or potentially applicable, then on a document by document, and for that matter, paragraph by paragraph basis, a determination using this standard must be made by the court. We cited to the court the case of United States versus Hubbard which is a case fn which documents were used in a suppression hearing, and the issue was whether or not the documents would be sealed or unsealed. Now, we are in a slightly different procedural posture here, but it was the contention of the appellant, 29 the church, that it had an interest in maintaining them under seal. They were private materials, just as we are maintaining that we have an interest in their not being introduced into evidence and their being held under seal which they already are. The court recognized the church had an interest in their being under seal, that it had a privacy interest, that the constitutional analysis that I have set forth applied, and that therefore the general order on sealing them was illegal. That any unsealing order had to be gone through on a document by document basis with written findings justifying under the constitutional standards the intrusion involved, and as to the theory that evidence of criminality, which is a somewhat vague issue that seems to get thrown around in this case, was relevant, that that would have to be determined, and then that was not a generalized basis but was simply a factor in the court's making, engaging in this balancing process to see whether or not the privacy interest was outweighed based on the standards that I have set forth. Now before I turn to the merits of the defendant's public policy theory, I just want to note that at the time of any such document by document.determination, if it were to occur and we don't think that we should ever get that far, the other evidentiary issues we would raise at that time -- it is obviously very difficult to deal with whether something is hearsay in the abstract. So it seemed to us that the best procedure was to reserve those questions until 30 we knew what, if any, documents we were dealing with, and I wanted to note that. The public policy defense, as it is called, defendant contends that he was justified in invading the Hubbard's privacy, in taking other people's documents, in copying other people's documents, in providing them materials to use against them essentially on the ground that it exposed alleged frauds of Mr. Hubbard or the church. We will establish first that this is no defense at all. It is not a recognized defense, It does not exist. The cases cited by the defendant do not apply or even comply to the circumstances here and secondly, we will establish that even if such a defense existed and were applicable here, that the defense in the context of this case is barred by the First Amendment because the issues of trying to put on trial alleged fraudulent representations concerning Mr. Hubbard and his role in the church are themselves barred by the First Amendment. They are not justiciable and since they are not justiciable, they cannot be a defense. Before I discuss the first prong of our analysis, which is this is not a defense, I want to read from what the defendant says they want to show. The defendant says, they set forth in their opposition to our motion the things that they want to establish through introducing these documents to show that Mr. Armstrong was justified in doing what he did, and they say the following: "The documents which are under seal in this court prove that these representations" -- 31 we never know really what they are -- "are false and that plaintiff and intervenor knew they were false when made." Then they state what they establish, They established that L. Ron Hubbard is a fraud. He doesn't have the qualifications that have been claimed. His personal life and practices contradict how he is represented. Promises and claims made by Scientology are false. Mr. Hubbard has controlled the Church of Scientology for a long time. Mrs. Hubbard was his agent in effectuating that control. Mr. Hubbard owns the Church of Scientology as well as controls it. There is no corporate integrity to any Scientology organizations. I set these forth because the defendant from their own mouth or the defendant has demonstrated precisely the First Amendment problems inherent in the whole theory that he wishes to advance which is, in essence, to argue that Scientology is a fraud. That is the heart of what this is about. That is what they are trying to do as I will elaborate. First, leaving aside the constitutional issues and taking simply the issue of whether or not this public policy theory is a defense. The defendant has made an extraordinary number of allegations without any specificity, particularity, definition, character. He says that there have been various misrepresentations regarding Mr. Hubbard's background that aren't true. We don't know when they were supposed to have 32 occurred. We don't know where they were supposed to have occurred. We don't know the circumstances under which they occurred. We don't know who said them. What we do know is that Mr. Armstrong said that the whole time he was the archivist people were coming to him to check with him to make sure that facts about Mr. Hubbard were accurate, and now he wants to use generalized statements that in the past misstatements have been made to justify his impermissible and tortious conduct here. Such generalized statements do not come close and cannot come close to constituting a fraud. You cannot -- it is not fraud to argue that anything that someone contends is incorrect amounts to fraud. Fraud is a very narrow standard. It is a very high standard, and I note preliminarily simply that even if fraud were a defense, which as we will see it is not, that they have not come close to establishing that they are, not to mention the fact that many of these facts can simply not be established to be fraudulent as a matter of law, and that allegations like this characterize this litigation, and it creates a difficult situation. We are in court trying to vindicate our rights, and what we are faced with is a barrage of wild allegations, all over the board. The court heard Mr. Flynn the other day. Grand juries here, this here, that here. It is a situation in which to have access to the courts, it is like running a gauntlet of allegations of every sort to deal with a simple, straightforward issue of whether Mr. Armstrong was entitled to do what he did. 33 The church and Mrs. Hubbard are not on trial in this proceeding. Now, the defendant's argument that there is a public policy exception relies on two main cases, copies of which the defendant provided to the court, and this is again leaving aside the First Amendment issue. First they cite the Pearson versus Dodd. That was the case in which Drew Pearson and Jack Anderson published information concerning Senator Dodd. It was information that one or more of Senator Dodd's employees had taken from his files and given to Drew Pearson and Pearson knew that that had gone on. The court was faced with the issue of whether or not, not Dodd's employees who took the information, who took the documents and provided copies, but whether or not Drew Pearson and Jack Anderson could be liable based upon the press publication of the information, and as such, it was a public disclosure of private facts case. The court said in dealing with this, and it is a mixed tort analysis of invasion of privacy and constitutional analysis, basically said that where information is published in the press that is of general interest, that is a factor and in this case was a decisive factor that can be taken into account and should be taken into account. It is the traditional newsworthiness issue on invasion of privacy and public disclosure of private facts. So, in an invasion of privacy analysis there are certain things about me which are not newsworthy even if I am a public figure and they cannot be published, but 34 if I am a public figure and they are published and they are newsworthy, they are protected both as a defense to the tort but also more fundamentally constitutionally protected. However, the court specifically said we are not here deciding Senator Dodd's employees, and Mr. Armstrong is in the position of Senator Dodd's employees. He went and improperly took these materials. He copied then. He knew it was for an improper purpose and he sent them off. He is in the position of Senator Dodd's employees. What the court said there is, "We don't have them before us. We will assume that what they did was improper although we don't decide it." And the court stated in making the distinction between a publication situation, such as was the issue with Drew Pearson, and an intrusion situation said the following, and this is a quote: "Wherever there is intrusion, the intruder should generally be liable whatever the content of what he learns." The concurrence in that case was very careful to say that this case is confined to the fact that there were stipulated facts. It is a narrow case. It is a press case, and it should not be taken for more than what it was, and the defendant is trying to take it for more than what it is. The defendant is trying to use it for the proposition that a public figure is subject to tortious conduct if you believe that the tortious conduct will give you information that is newsworthy. 35 That seems to be the defendant's theory. That is certainly the proposition that they are arguing from this case, and this case does not come close to that. Pearson versus Dodd is essentially a First Amendment press case under New York Times versus Sullivan and its progeny, and the whole question of press privilege in the context of publication. The second case cited by the defendant is Willig versus Gold. This is the other main case that they rely on, In Willig versus Gold, Gold, the defendant, had acted as a broker for Willig, the plaintiff. He had particularised information that Willig had made specific false representations to a buyer just in a time frame that is contemporaneous with the activities in the case. He told the buyer -- Gold, the agent, the broker, told the buyer about this. Willig sued, the plaintiff sued saying, "You breached a fiduciary duty and you breached it because you had learned that I had made this misstatement to this person in confidence." The court said that it was not a breach of fiduciary duty for him to have disclosed this information. There is no question there of him having gone into the plaintiff's office and taking copies of confidential materials. The issue in Willig versus Gold was after this was over, he went to the buyer and he said, "Hey, I think you got ripped off. You got cheated." That is what happened there. There is no invasion of privacy, and the court said informing someone of this 36 is permissible, and it is not a breach of fiduciary duty. That is all that case stands for. It is a case from 1946, and to use it for the proposition that the generalized right to privacy, which every California Supreme Court decision discussing has given expansive interpretation to, to argue that this case from 1946 stands for the proposition that is being put forward here that you can willfully take someone's private documents on your belief that it will expose them as a fraud is simply so far from what the case stands for that it is really hard to respond to it. But suffice it to say that under the facts, the case is not close to what we are dealing with here. The last authority on which the defendant relies is the Restatement of Agency Section 395 Comment (F), which is cited in Pearson versus Dodd and in reality is pretty much parallel to Willig versus Gold. What that says is one can reveal information. It doesn't say anything about taking things. One can reveal information concerning one's principal if the principal is committing or about to commit a crime. So what this does is it carves out a very discrete exception to the confidentiality of a fiduciary relationship. If one is committing or will in the future commit a crime, you can tell the interested party. Essentially that is what that says. Obviously there are no facts and circumstances here that begin to come under this. The court should be aware that the allegations that Mr. Hubbard is a fraud have been made by Mr. Flynn for five years, have been made by 37 others for decades. That Scientology is a fraud. That these statements are fraudulent. No law enforcement agency has ever expressed any interest in prosecuting the claim that statements about Mr. Hubbard's background are a fraud. The theory that this is evidence of crime, not to mention Mr. Armstrong's own statement that it wasn't going on because he was making sure and people were coming to him to make sure that information was accurate. Now, let me pose to the court in terms of analyzing the logic of defendant's position the following questions or hypotheticals: There are a series of public figures, well known public figures who information has come out in recent years made substantial misrepresentations. John F. Kennedy was nominated for the vice- presidency in large part upon his purported authorship of "Profiles in Courage" which there is some substantial question about whether he ever wrote. Franklin Delano Roosevelt had a mistress for years while he and his public relations people asserted the healthy state of the marriage between Franklin and Eleanor Roosevelt. Joseph Conrad, the famous English writer, promoted the fact that he had extensive maritime experience and had risen to the rank of captain. It turns out that this is simply not so. If you ever read any of the books of Conrad, you know this his books sold on the basis of his abilities to describe scenes having to do with the sea. 38 Elliot Janeway, the noted economist, has claimed to have graduated from Cornell University. According to a recent press report, he never graduated from Cornell University. He attended Cornell University. Jimmy Carter had ghostwritten his autobiography shortly before he began his campaign for the presidency. It was not publicly disclosed that it was ghostwritten. I use these examples simply to say are we now in a situation where any person can -- after all these are arguably misstatements of fact about an important public figure. Is there really a license to engage in the kind of conduct that defendant is asserting here? The implications are staggering. The ability for self-defining justification is enormous. It makes any public figure a legitimate object of theft, lies, deception, dishonesty, maybe even not only public figures, and how is this done? It is done in the name of public interest. I mentioned to the court the other day and we will discuss later on the issue of the Fair Game Doctrine. THE COURT: Maybe it's a good time to take a recess. We've been going for quite a while. (Recess.) THE COURT: We are back in session. You may continue, counsel. MR. LITT: Thank you, Your Honor, Essentially, Your Honor, the theory that the defendant is putting forward is, to paraphrase their 39 characterization of what they call the Fair Game Doctrine, is that the defendant was entitled and any defendant in the position would be entitled to lie, cheat, steal from another and it would be justified by public policy, and that is really the heart of their defense. Now, I have spent some time on cases that they have cited in support of their proposition, but I think more to the point are the cases that clearly show that this is not a defense at all, the cases that have not been noted by the defendant in his papers. We have cited to the court the cases of Snepp and Marchetti. That is a United States Supreme Court case and the Circuit Court of Appeals case, federal decision. It is a former CIA employee signed a nondisclosure agreement with the CIA. Wrote a book and put it in the hands of his publisher, and the CIA moved on the grounds that he had not cleared the book with the CIA to enjoin the publication of the book and to impose a constructive trust on any profits that had been made. The Supreme Court said -- and the argument was this information is in the interests of the public and this is a restraint on information that is of great public importance, information which, among other things, would show misdeeds by the CIA. The court said that there had been a clear agreement. There was a confidential relationship, and there was no first Amendment problem here at all. The injunction was entirely proper and the CIA was entirely within its rights 40 to restrain the dissemination of information that he had learned in the course of his employment with the CIA. Perhaps the closest case to ours is a case cited in our papers, Dietemann versus Time. That is a Ninth Circuit case decided under California law. Dietemann versus Time is quite an interesting case because, in fact, it is much more compelling than those asserted here. The court squarely decided against the theory being advanced by the defendant. In Dietemann two reporters who were working with a district attorney had information that an individual was practicing medicine without a license and was engaging in fraudulent conduct and saying that he could heal people through various unscientific ways. After talking with the law enforcement officers and basically pursuant to an arrangement with them that by ruse they would gain access to this man's home and get information about him, the reporters went to this man's home. Said they had been sent there by some individuals who had referred them. Got inside the home and had with them a camera, a hidden camera, on which they took pictures and a hidden microphone on which they recorded events that went on there. the individual involved, based upon the evidence obtained by these people, was prosecuted for practicing medicine without a license. The man sued in federal district court and the defendants, the reporters who had gained access to his home through the ruse, argued that they were entitled to do what they did because it was part of their news gathering function, that public policy and the First Amendment protected 41 their doing that and that the information showed that the man was a quack and a fraud, and this fact had been used in evidence to demonstrate that he was acting illegally and that clearly they were entitled to do this. The court's response, and I am quoting, was as follows: "The First Amendment is not a license to trespass, steal or to intrude by electronic means into the precincts of another's home or office. It does not become such a license simply because the person subjected to the intrusion is reasonably suspected of committing a crime." That is the theory of the defendant in much less compelling circumstances because this was a press case and the press had special protection under the First Amendment. The court clearly rejected it and it seems to me that the harmony of all these different decisions from Pearson versus Dodd and Dietemann versus Time is essentially that acts that are impermissible as such, that constitute improperly going into one's home, taking someone else's things, there is simply no defense to that. There is no public policy defense to that. Under certain circumstances there may be a public policy defense to simply information, publication or receipt and use of it that otherwise might be wrongful but where the acts involved are direct intrusions and violations of the person's rights, there is simply no public policy defense. 42 That is what Dietemann clearly says, and Pearsons versus Dodd, in fact, says the same thing. THE COURT: Well, of course, one of the problems I have is that I gather your complaint is couched in terms of, at least on behalf of Mrs. Hubbard, deals with invasion of privacy and deals with the idea of intrusion. Yet from everything that's been submitted to me, it appears, and I am not entirely sure of all that will be submitted, but Mr. Armstrong came into possession of all this information with the consent of the church or Mr. Hubbard or possibly even Mrs. Hubbard as to some of it, either actually or apparent consent. MR. LITT: But limited consent. THE COURT: Well, be that as it may, there was no spying out, no subterfuge as I gather to gain any information. That the gravamen of the problem is because he didn't return it when requested or turned it over to his attorney. MR. LITT: No, he didn't turn it over to his attorney. He gave it to Mr. Flynn, an attorney, and he has admitted that that was for use in other cases. So that the argument that they were given to his attorney -- THE COURT: Maybe that is a publication if he gives it to somebody else. MR. LITT: It is not a publication under public disclosure and private facts cases. Publication has to be a public form of dissemination. It is, however, a clear violation of privacy under California law. In the Porten case, it involved exactly 43 transferring a copy of a document in the rightful possession of the university to another person without permission. They had it only for a limited purpose. They gave a copy of it to another party outside of that authorized purpose. The court said -- THE COURT: What case is that? MR. LITT: Porten, P-o-r-t-e-n. I can give the court the cite. It is 64 Cal.App.3d 825, Porten versus University of San Francisco. THE COURT: All right, go ahead. MR. LITT: The other thing I think that is important is that Mr. Armstrong did not have access to these materials by his own testimony for any purpose other than to put them in the archives and give them to Mr. Garrison. He went to Mr. Garrison and said, and Mr. Garrison knew that and Mr. Garrison testified to that, that he only had the documents for work on the biography, and that the biography itself was subject to control. Mr, Armstrong went to Mr. Garrison and basically asked him, and Mr. Garrison agreed, and I think also could but isn't subject to a tort action, to give the materials which they both knew were for a purpose beyond the terms under which they had been provided them. In terms of the question that the court raises, an employee by definition has access to materials. It is clearly not the case that an employee therefore can use them for any purpose in a privileged way. THE COURT: Now you are talking about a breach of 44 fiduciary duty, He is not an employee of Mrs. Hubbard. The church is not suing him for invasion of privacy. MR. LITT: Well, to some extent that is true and to some extent it is not true. We would contend that he clearly has a fiduciary duty to Mrs. Hubbard even though he wasn't an employee of Mrs, Hubbard because he knew that he had her materials and he had a duty to keep them, and we think the evidence will, in fact, support and justify a jury instruction on that issue as well. The church invasion of privacy is somewhat more problematic. Where the privacy interest in particular comes in is that the information was private, the documents were private and he knew they were entrusted with maintaining their privacy, and the fact that they were private is an element of his breach of fiduciary duty, but the point is, in fact, it is an invasion of privacy and this is what Pearson versus Dodd says. It says it is an intrusion and it is talking in the context of the facts of Pearson versus Dodd. It is an intrusion to do what was done here. That was the clear implication of Pearson versus Dodd, and what these employees who had access to all of these materials which were given to Drew Pearson engaged in was an intrusion. In fact, the court assumed that they engaged in an intrusion without deciding, by taking copies of these things which they clearly had access to but using them for a different purpose, and there is substantial law cited in our trial brief that talks about the fact that unauthorized use or unauthorised disclosure 45 constitutes an improper invasion of privacy under California law. That is not the same thing as public disclosure of private facts. That is precisely the issue in Porten. The court says this isn't a public disclosure of private facts case because there is not publication within that meaning because it has to be relatively broadly disseminated, but it is an invasion of privacy and it is actionable. To take another example, and this was discussed also in the Dietemann versus Time, is the Pentagon Papers case. Now the New York Times, just like Drew Pearson, was able to publish the Pentagon Papers, but Daniel Ellsburg was able to be prosecuted for giving them to them, and that is the distinction. It is one thing where the press receives something and it can use it. Was Daniel Ellsburg privileged -- THE COURT: Well, that case was never resolved. MR. LITT: No, it wasn't resolved. THE COURT: It was dismissed. We don't know what the law would have been had it resulted in some conclusion. MR. LITT: But the law is quite clear, and where it has been raised, it has never been permitted. The draft cases where Father Berrigan went into various military installations and raised a defense that he was justified in doing it to stop the war. Those defenses have not been permitted. The defense of justification and necessity, as we explained in our memorandum, is extremely limited and is not available in a criminal case. 46 Dietemann versus Time makes clear that in the precise, not precise, but in almost totally analogous circumstances where based on a purported relationship you gain access to private information and then you use it in a way which was not authorized and you engage in improper intrusion or you engage in improper disclosure, that is what Porten stands for, it is an invasion of privacy and there is no defense of public policy under those circumstances. If there is any such defense, it is only for publication of newsworthy information, one, and conceivably for a verbal communication that in and of itself doesn't do anything wrong advising someone of discrete information that you otherwise are obligated not to in connection with commission of a crime, neither of which are the circumstances here. Other than that, those two arguable situations, there is no such defense. There is no case establishing that there is such a defense and every case that touches on the issue clearly indicates to the contrary. Let me give the court another example. That is an example from this court, the PDID case. Judge Olson recently heard a motion by the PDID for the return of all the documents obtained through California discovery in that case. The police department went into court and said, "We want the documents back. Even though they were lawfully obtained, the only purpose for which they were obtained was this lawsuit. Now we are entitled to them back, entitled to the copies back and all copies made from 47 the copies. We are entitled to those back." The ACLU opposed the motion, arguing that there was evidence of criminal and illegal conduct in the papers in that case. That the public was entitled to know about that information and that they were entitled to have it to enforce the settlement that included certain standards applicable to the PDID. The court ruled that even though these documents, unlike the circumstances here, were obtained completely lawfully, the documents that had been provided to the ACLU had to be returned and all copies had to be returned, and this public policy defense in compelling circumstances where, in fact, it could be established quite clearly that there had been violations of law by the PDID was simply not permissible. It was not a defense and the court so found. This decision occurred only, I believe, last week. Given these authorities, the proposition, the extraordinary proposition that is put forward here for which there is not one case, I have discussed all the cases that are cited that come close to being on point that are cited by the defendant. There is not one case, and every case that reaches it in any form close to this, such as Dietemann versus Time, clearly rejects this defense, and the reason is obvious. Let me give a hypothetical. Let us suppose that there is an employee who works in the court and that employee decides that one or another court staff member is engaging in unlawful conduct and therefore goes into the person's 48 drawer or has access to the person's drawer because it is part of their functions and takes things from that person that are their private materials. Now, it may be that that information may be usable by some other party. That is not the issue that we are dealing with, but clearly that is not allowed. You cannot give private citizens any more than you can give the government license to violate people's rights, trample on their rights in the generalized name of public policy, a self-defined public policy. The implications for how society operates, for how any organization operates are enormous. If this is the law and the defendants can cite no case that comes close to establishing that this is the law, and every case that really begins to get at the issues such as Snepp and Marchetti or such as Dietemann versus Time, clearly rejects it out of hand. Only cases dealing with attenuated circumstances where there is a thirdhand receipt or there is a discrete verbal disclosure have said that it may be able to made permissible. Those are the circumstances here. Now, even leaving aside for the moment whether or not such a defense is available in some circumstances and even leaving aside whether it would arguably be available here, it is our position that the First Amendment prohibits putting on this defense in order to make claims that Mr. Hubbard has been misrepresented by the church or by himself in the context of Scientology activities or that 49 representations concerning his role in the church or ownership of the church are permissible. If these fraud allegations are not justiciable, then they cannot be a defense because the jury cannot decide that there was fraud, so that this is a second independent issue that must be resolved even if there is some arguable public policy defense available here. We provided to the court a declaration by a religious expert concerning this issue of whether or not there have been misstatements of fact concerning L. Ron Hubbard's background, and in that evidence of Frank Flynn, he discusses the traditional circumstance of tendencies toward exaggeration by religious movements concerning personages who have been important in the development of this movement. He discusses in the Catholic Church the tradition of hagiography which was biographical writings about saints and the fact that historical study has shown that the statements made in these hagiography files are in large part exaggerated, and he goes on to explain, he discusses, for instance, the fact that the story of the Virgin birth did not originate at the time of the beginning of the Christianity religion but actually came somewhat later in the development as did certain alleged facts concerning the genealogy of Jesus. He discusses Moses, Buddha, St. Francis, Catherine of Sienna. There are a variety of examples given, but the point of this is that these representations arise and cannot be separated from a religious context. 50 In fact, Mr. Flynn says quite the contrary. To the extent that they occur, they are one form of indication of the religious character of the movement because the tendency for this to occur within religious movements independently frankly of any individual is so strong that, in fact, it evidences the very religious character of the movement; rather than what Mr. Flynn wants us to assert which is that it is somehow a demonstration of fraud. He also says that he has seen the precise phenomenon occur in Scientology. That when he has studied the subject of Scientology -- he, himself is not a Scientologist. He has been trained in the Catholic religion, but is also a student of comparative religion -- that the forms and the ways in which people talk about Mr. Hubbard is exactly -- within Scientology is exactly characteristic of this very phenomenon. He explains that these things are simply inseparable from religious conviction and belief. He gives the example, for instance, within the Catholic religion of the view that transubstantiation of bread into the body and blood of Jesus, now this is precisely the circumstance we are dealing with here but I think it makes an important point. He says someone could argue that that was fraudulent by showing, that scientifically there had been no change in the chemical properties of the bread. Clearly not, his point being that quote factual representations that occur in a religious context, that are often accompanied by metaphor and a variety of languages peculiar to the religion cannot be pulled out 51 of their context and of the circumstances from which they come and alleged to be facts or not facts. They are part of the fabric of the way that the religion developed and of religious beliefs and activities, and as such are not justiciable under the First Amendment. Any question about this, this particular issue in terms of background and representations about a religious leader in particular were settled by the case of United States versus Ballard. In that case the United States Supreme Court was faced with the issue of a fraud prosecution against the Ballards who were the founders of a religious movement called the "I Am" movement, and it was concerned that in fact it was a religious movement, and the issue before the Supreme Court was whether or not the trial court had properly determined that the truth or falsity of the representations that the government wished to prove were not justiciable. Now, in and of itself one could think that that is simply referring to generalized religious doctrine, but actually an analysis of the record in that case shows that precisely the types of representations that Mr. Flynn wants to have adjudicated in this court were deemed impermissible to be adjudicated in Ballard. Let me be specific, and some of this is not in the opinion itself, but it is in the record and we have searched the record itself and we cite to the Supreme Court records as well as to the opinion to get the actual representations which the government was not permitted to adjudicate. 52 The Ballards had claimed that they were free from ailments and that they had conquered death, disease and old age. The government wanted to prove that scientifically they could demonstrate that that was false. They could not do that. The Ballards claimed that they could heal ailments, diseases and injuries which were otherwise incurable. That they had, in fact, done so on hundreds of occasions, and more importantly that they had proof in the form of written testimonials from the people whom they had healed. The government said, "We will prove that these written testimonials that they have held out were, in fact, written by the Ballards themselves and were falsified and that the people whose names are on them never signed them." Could not be adjudicated. The Ballards had claimed, Guy Ballard had claimed that a religious book he wrote was dictated to him by St. Germain. You would think you can't adjudicate that. He said it was written by him at a certain time in a certain place in 1930 in Mt. Shasta. The government offered to prove, aside from whether St. Germain had dictated the book to him, that he was never in that time and place. Could not be adjudicated. The Ballards had claimed that they had a portrait of St. Germain which an artist by the name of Charles Sindelar had drawn, and they were promoting this portrait. The government offered to prove that the portrait had been drawn 20 years earlier by a different artist. Could not be adjudicated. 53 The Ballards had claimed that they had helped destroy three enemy submarines during World War II which were on their way to the Panama Canal. The government offered to prove that no such incident ever occurred and they could not have done it. Could not be adjudicated. Ballard is dispositive of the theory that gets promoted here that one's representations about a religious leader's background are not religious and somehow can be pulled out and dealt with in a separate world. Ballard just disposes of that in circumstances so much more clear-cut than those here. It is self-evident from the Ballard decision that representations about backgrounds are considered by the court and were considered by the Supreme Court to be inherently intertwined with religious belief and doctrine and advocacy, and it simply was not a matter that the courts can deal with. They could not decide it. The claim of fraud that the United States Government brought against the Ballards on these theories to prove these discrete facts were simply impermissible. Here the claims that get made by the defendant about various misrepresentations about Mr. Hubbard, many of which claims I won't even get into what would be involved in determining what claims we are talking about, what was accurate, what was inaccurate, what the context was and all of the matters that would be involved in trying this issue which would, I don't even want to imagine what would be 54 involved in trying those issues. Even if there is a public policy defense available here, the issue should not be and cannot be tried because it is impossible that they could be dealt with in a way that did not intrude on religious belief and, in fact, it is impossible to address them in any context except the context of Scientology. Then the defendant says that a second basis of his fraud claim concerns Mr. Hubbard's control, ownership and role within Scientology. It says it has been contended that Mr. Hubbard has no position, has no corporate position in Scientology, and that this is a fraud because in reality he controls Scientology. Well, Mr. Hubbard has no corporate position in any Church of Scientology. He has a role in Scientology which is defined by Scientology and which under the cases that we have cited cannot be challenged and adjudicated by the court. He has the role of founder. Any control that he has is religious control. It is precisely the kind of thing that cannot be gotten into by the courts. What role he has, what authority, religious authority, moral authority, whatever authority he has is precisely an issue that is not of concern to the courts and it may not be adjudicated by the courts, and when the church says that he is not responsible for the activities of the church, that he doesn't run the church and the defendant wants to show you that he really does run the church, the very process of this inquiry of intruding into those questions, 55 making determinations about those questions, how his role operates, what is involved, on what basis people do or do not listen to him, it is impossible to address those issues without intruding in a totally impermissible way into protected First Amendment rights and making determinations which undermine the protections of the First Amendment. We have cited cases such as Catholic Bishop which is the United States Supreme Court case involving the applicability of the Title VII -- I as sorry, the NLRA to religious organizations in which the court discusses this problem of unfolding a process of inquiry into the internal activities and roles and functions of different people, and we have cited various other cases on this. Now, there is a case that, in fact, the Supreme Court cases that is fairly close, although it is not precise, to the kinds of claims that they want to adjudicate here. In two cases which are Kresich, K-r-e-s-i-c-h, and Kedroff. The full cites are in the memorandum. New York had passed a statute and it had to do with the Russian Orthodox Church which was located in the Soviet Union and had a branch in the United States, and title rested with the Soviet Union Church, and the New York Court passed -- I am sorry, the New York Legislature passed a law that said basically that if you are an agent of a foreign power, you can't own property in the United States, something like that, and on that basis moved to vest title in the church property with the New York church which had split off from the former mother church. The court said that the process 56 of inquiring into the whole issue of resolving church property disputes but also of resolving the issue of Soviet control -- the theory was that the Soviet Government really controlled the Soviet church, so it really wasn't a church and it was really a secular institution. It was controlled by a foreign body which was an enemy of the United States. The court simply said that could not be done. When it was tried a second time eight years later, the court again said it could not be done. That time they tried it in the form of bringing a lawsuit under common law, and Justice Frankfurter in his concurrence talks about this issue of misrepresentations about relationships between the church and someone else. He talks about the relationship between the Catholic Church and the Mussolini Government under the Lateran Agreements and said we can't go into that. By the way it was represented that this Soviet church wasn't controlled by the Soviet Government. That representation was not subject to judicial inquiry and investigation. That is what the defendant wants to do here to justify unbelievably his own wrongful conduct. We are not even dealing with a suit where this is in issue. We are dealing with a circumstance where this is trying to be brought in through the back door to justify what is on its face clearly impermissible conduct. The defense also says that these documents show that promises and claims made by the Church of Scientology are false. Well, the promises and claims are more straight- forward, and I think we talked about Ballard. Obviously 57 if it is the kind of representations and facts that I talked about, they are not justiciable, so, too, these are not justiciable and the Ballard case is dispositive about that. What is important about the inclusion of the promises and claims, and that is a quote from the defendant's memorandum, that that is part of what is the fraud," is it shows, in fact, precisely the point that we are talking about here is that, in essence, the theory here is to attack the foundation of Scientology and to try to show that Mr. Hubbard and Scientology are frauds and that just cannot be done. Now, there are some religious issues, but they arise in the context of the subject matter of the motion and so I will reserve them at this time, having to do with whether the court can go into them or not, and the only final point that I want to make is that if we get this far, we have cited substantial case law to the court about the need for an evidentiary hearing. In the event that any First Amendment related issues are going to be at issue in this trial, that the court has to hold an evidentiary hearing and we would submit that this is required, both by the religious clauses of the California and United States Constitution and by the rules of evidence for preliminary facts to make a determination that they are not -- must make an independent factual determination before submission to a jury that these do not arise in a religious context and are not protected representations so that I will address that issue more if we ever have to walk that far down the road. But I did want to note it for the court at this point, 58 and in such a hearing the burden would be, in light of the presumptive issues that we have raised and the law, the burden would be on the defendant. Now, the only final point I want to make is that, and I think this will become clear when Mr. Flynn argues, is that the nature of the defendant's public policy theory and its implications are extraordinary, not only for how this case would be tried but for the whole processes of the court. I fully expect that Mr. Flynn will stand up and advance allegations concerning the church, Mr. Hubbard, Mrs. Hubbard of wrongdoing, misconduct. I have heard him do it before and I expect to hear him do it again, and if we ever have to, we will respond to those allegations. But we should not in this court with these allegations where the issue is the taking of the church's and the Hubbards' property wrongfully have to be in a position where what we are responding to is they are generalized, sweeping, wild allegations which are brought out in every proceeding in which Scientology is involved. I have been involved in the probate case that I described before. Mr. Flynn represented Mr. De Wolfe. The probate petition which was filed supposedly because Mr. Hubbard was a missing person and his estate needed preservation, in which the allegations were that Scientologists were seeking money from him. That case was ultimately won by Mrs. Hubbard on summary judgment who had opposed the petition, but the petition itself contained within it every one of the kinds of allegations that the court will hear 59 here. They were stricken by the court there as irrelevant, but the tactic is clear. Bring all these things out. Make emotional charged, wild allegations which can prejudice a court, which can prejudice a jury, which puts the jury in a position or the Hubbards in a position where it is virtually impossible to defend their rights, and you can do what you want to them and they begin to turn around allegations that they made against us. In reality what they do and what they wish to do in this court is precisely what they say the church does. They want to say that the church and the Hubbards are fair game for any wrongful conduct and that this is a legal defense, not some international policy about whether you have access to their justice system. This is a legal defense. You can do what you want to them and it is okay because they are bad people. That is the heart. That is what the court will hear in the argument, and that is what ultimately the court must respect. Thank you. THE COURT: Mr. Flynn? MR. FLYNN: If Your Honor please, at the outset let me say that I feel like I have come from Boston to watch the Dodgers and Giants game and I have arrived here and found myself in the middle of a Red Sox game against another National League team. Much of what Mr. Litt had to say, which I hope I will be able to demonstrate to the court, I don't really believe has got anything to do with any defense of Mr. Armstrong. I think Mr. Litt basically overlooked the 60 fact that I am defending a case brought by Mary Sue Hubbard and the Church of Scientology, his clients. They have thrust themselves, particularly the Church of Scientology, a supposedly religious organization, into this court system, into the temporal matters that relate to the issues that are involved in this case. It is not a case where Mr. Armstrong thrust himself on the court with regard to some of these allegations. It is a case where he has been forced to defend himself and that matter seems to have been basically completely overlooked. Secondly, the case relates to property rights and personal rights. That is what the case relates to. This extensive argument with regard to quote public policy, to follow up on my baseball game analogy, I don't even know what he is referring to. If he is referring to the public interest, public figure defense against a private right for invasion of privacy, then if he intends to pursue his invasion of privacy counts through Mary Sue Hubbard, then we will defend based on whatever cases we can defend on; namely, the public interest, public figure defense. The public policy theory which he continually calls such, I assume with regard to the invasion of privacy and breach of fiduciary duty counts, he really means that which is a legal defense. It is not a public policy defense. If he is talking about the conversion count or possession of personal property count, then the defense is a supervening or superceding interest on the part of Armstrong to do what he did. 61 The legal justification, the Restatement of Agency defense, the Restatement of Torts defense which is set forth in our memorandum, that is not a public policy defense. That has to do with property rights and under what circumstances property rights, as alleged by a plaintiff, can be defended by a defendant. Now, Mr. Litt stated that Mr. Armstrong hopes to do in this court what he couldn't do illegally, suggesting that Mr. Armstrong had stolen or in some way improperly converted these documents. Well, first of all, and he suggests that the follow-up or the sequitor to that is that Mr. Armstrong wants the documents disseminated in various litigation around the United States. Well, this court has already ruled that Mr. Armstrong can do that. The preliminary injunction that was issued gives authority to third party litigants to come into the court to get documents for purposes of other litigation. That's been the ruling of this court for almost a year and a half. So, therefore, the idea that there is something wrong with third party litigants coming in and getting documents that are under seal in this court is just totally frivolous, and the court has already approved of it, and that's been the law throughout the United States for years. In fact, since Mr. Litt has raised this issue, and it really has not been briefed in the memoranda submitted to the court by him, in anticipation of it, I did a little bit of research into the issue of the admissibility of stolen 62 property. Assuming that Mr. Armstrong under some subterfuge as in the Dietemann case or just outright conducting a breaking and entering, broke into church property or through some subterfuge went in and obtained these documents, took them out and gave them to me or some third party, the case law is absolutely clear that if that evidence is relevant and material in other judicial proceedings, then it can be introduced into evidence. In California there is a Herrescher case which held that documents stolen by a private detective from a law office could be admitted into evidence in a State Bar proceeding. There is the Munson case in which a wife or a husband, one or the other, stole a private letter from the home of her divorced spouse, and the other divorced spouse during the divorce proceeding tried to block it from coming into evidence. The Appeals Court of California held that since it was just purloined, it could not be admitted into evidence because no wrongdoer should be able to take advantage of his own wrong. The Supreme Court of California reversed that decision and held the letter admissible. Of course, the Pearson versus Dodd case is a recent case. The Herrescher case which held that documents taken from an attorney's trash container if they weren't privileged under the attorney-client privilege could be admitted into evidence. There is The People versus Johnson case which held an employer who took materials from the trunk of his 63 employee's car and gave it to the police could be used in evidence. There is the NLRB versus South Bay Daily Breeze case, a Ninth Circuit circus case which holds the same. I am going to explain the facts to the court under which Mr. Armstrong came into possession of these documents which I submit to this day has still not been fully understood by the plaintiff in this action and will be the evidence fn this case. But in any event, even if Mr. Armstrong had stolen them, if third party litigants could prove in the court where they are then litigating, which is precisely incidentally what the United States versus Hubbard case held on remand, third party litigants could demonstrate a need for them for competency and materiality, then the documents could be used and I believe this court has recognized that by entering the preliminary injunction that it did. Now, addressing myself in the context of the facts through the conversion count, which is what we are defending as I see this case essentially, because I don't believe if the court really looks at the law of the breach of fiduciary duty and invasion of privacy -- if Mr. Litt does, in fact, have the jury, what he represented to the court; namely, not put into evidence anything that would offend the sensibilities of the ordinary and prudent person on the invasion of privacy count, then we are entitled to a directed verdict if he brings up some abstruse characterisation, for example, of this letter. He's brought up this letter now twice with regard to a letter between 64 Mary Sue Hubbard and L. Ron Hubbard, so I went out and checked with my client as to what this letter is. Well, first of all, the letters that are predominently under seal, as I understand it, are letters that have nothing to do with really quote personal correspondence. They have to do with the Hubbards taking money from the organization. They have to do with running the organization as a business. There was one personal letter that Mr. Armstrong is aware of, and apparently he mailed it back to Mary Sue Hubbard. Now that may or may not be the letter that Mr. Armstrong brought to me in Clearwater, Florida. Frankly, I don't remember, but even if it is, if he is simply going -- and this really indicates the whole problem with the contents of the documents. If he says in front of the jury, "Well, there is a letter between Mary Sue Hubbard and L. Ron Hubbard," and showing that letter to me constituted invasion of privacy and stops right there, and he does that with other documents, then I submit to the court I will be entitled to a directed verdict on the invasion of privacy count and on the breach of fiduciary duty count if he only addresses those points. Now, with regard to the conversion count, which I really think is where this case as I indicated in chambers comes down to, the facts are basically as follows: Armstrong worked for an organization which was generally denominated the Sea Organization, and he, in fact, was out on a ship of L. Ron Hubbard's. In every port they went and since Mr. Armstrong was the personal public relations officer of 65 L. Ron Hubbard, it was his duty to tell the people in the port who they were. Well, every port they went into they said, "We are not the Church of Scientology. We have nothing to do with the Church of Scientology. We are an independent business group called the Overseas or Operation Transport Corporation, and we are conducting research." It was his job for some six years to disseminate that lie across the world which he did. Then he, after the ship was sold in 1975 and they landed in Clearwater, Florida, and under another subterfuge called the United Church of Florida tried to offer the City of Clearwater, again not the Church of Scientology, he worked again for the Sea Organisation, and he eventually came to California on Hubbard's orders, was locked up for a period of time on Hubbard's orders, but eventually became assigned to Hubbard's household unit. In Hubbard's household unit he was assigned the task by Hubbard of taking care of all of Hubbard's personal property. That is essentially what he did. During that period of time he was drilled and trained to state that he was not an employee of the Church of Scientology of California, the plaintiff in this action. Thereafter, in the middle of probably the fourth raid, as I understand it, or the fourth threat of a raid -- there was an original raid in 1977, and then there were threats of raids in 1978, another threat of a raid in 1979, and in the middle of a fourth threat of a raid because of ongoing grand jury proceedings in Hew York, Washington, D.C., presently Toronto, Canada, a conviction for criminal fraud of L. Ron 66 Hubbard in France -- contrary to what Mr. Litt told the court with regard to Hubbard's biographical background, he's been convicted of fraud -- in the middle of all this, the internal intelligence agency of the church called the Guardian's Office thought there was going to be another raid because of the IRS case, so they mustered 25O people, headed by a group of people which included a woman named Diane Riesedorf, Laurel Sullivan, Gerald Armstrong, Gail Irwin, David Mayo and under the control of this group they seized probably some hundreds of thousands of documents, five ton truckload of documents. They rented a commercial paper shredder which they called Igor and for a period of several weeks they went through all of the documents in several locations and began to shred them, and that is the key circumstance under which Armstrong got these documents because a girl named Brenda Black came to Armstrong and there will be extensive testimony on this point on the defense side, if necessary, came to Mr. Armstrong and showed him a box of materials. It was Armstrong's decision what to shred. He decided that it shouldn't be shredded on an initial cursory examination of the box and entrusted it to Laurel Sullivan. Subsequently after a lot of other documents in the identical location were shredded, Armstrong began to look through the box of documents and he found documents which he thought had quote historical significance, and he wrote a petition to Hubbard asking for permission to collect more materials to complete the biography project which had actually started in 1973, and the evidence will be that Laurel Sullivan and 67 others actually began this biography project, But at various times it got derailed because the authors, one being a fellow named Peter Tompkins, wouldn't write what Hubbard wanted him to write. So eventually we come up to 1980. Armstrong writes to Hubbard. Hubbard approves it. Now, there is a key fact here and that is that Hubbard is in the process of fleeing because his wife has just been convicted of a felony, obstruction of justice for stealing documents. There is a pending grand jury in New York for the frame-up of a journalist named Paulette Cooper, and there is evidence which was then coming in before the grand jury relative to Hubbard's involvement in that frame- up. So, Hubbard flees. Subsequently he is determined to be concealing himself as a fugitive and a federal court in Tampa so found. What happened is because Mary Sue Hubbard was on her way to jail, because L. Ron Hubbard was fleeing, the control mechanisms within the organization over the documents deteriorated, and no one really knew and to this day I submit to the court no one knows, other than Gerald Armstrong, really what is in those documents because he is the one, other than Omar Garrison, who has analyzed them for years. So, even Hubbard himself did not precisely know what was in the documents. Now, Armstrong begins to go through them.He gets approval from Hubbard and, in fact, there are negotiations, and this has all been brought out in discovery 68 and it is not protected by the attorney-client privilege because there are attorneys representing the church and attorneys representing Hubbards particularly an attorney named Wertheimer. Wertheimer brings out in these meetings that Armstrong can't work for the church because it would violate the Internal Revenue Laws, and there vas then an ongoing Internal Revenue investigation because of the doctrine of inurement. MR. LITT: I am going to object. We have a motion on this concerning the use of any of these materials on the attorney-client privilege, and I really don't think that is the appropriate way to deal with this. The next thing I am going to hear is that Mr. Flynn is going to turn around and say we waived it because it's been talked about. I just want to at least make clear that we have an objection to any information related to what he is talking about. It is protected by the attorney-client privilege and cannot be gone into and is not an appropriate subject of discussion. The court can handle the argument on that however it wants, but I did think it was important to point it out at this point. MR. FLYNN: In any event, Your Honor, Mr. Wertheimer states that Armstrong has to work for Hubbard, and, in fact, there is a document which essentially so states. Mr. Armstrong considers himself right at the outset of this project the agent of L. Ron Hubbard, not the agent of the Church of Scientology and there are extensive documents which support this theory of the defendant's case. 69 Now, Mr, Armstrong initially collects probably what turned out to be a relatively small number of documents in terms of what was actually saved from the shredder because, as the court is going to find out, these documents come from probably at least six or seven different sources and they also involve documents which were collected by Mr. Garrison which have nothing to do with origins of or ownership of or possession in either L. Ron Hubbard, Mary Sue Hubbard or the Church of Scientology. Over a period of a year and a half Armstrong collects all these documents, turning them over to Garrison and Garrison begins to analyze them to write the book and starts writing the book. In the contract that Garrison has with Hubbard, there is no provision of any nature or description as to what Garrison can do with the documents. The only protective, covenant or protective or restrictive provision in the contract is that Hubbard has to give final approval to the ultimate biography. Well, Garrison begins doing this biography and he realizes that the representations that were made by L. Ron Hubbard right from his birth right up to the present time, which is the whole thrust of the book, are false, and the representations cover, and I won't bother to go into them all right now but just for an example, he's held out as a nuclear physicist and a medical doctor with doctorates and degrees from universities and all kinds of things which, as it turns out, are all fallacious. So Garrison realizes 70 that he can't write what Hubbard wanted him to write. In fact, if he follows any journalistic ethics, he's got to write just precisely the opposite. Now, Armstrong, in working with Garrison, realizes this and writes a letter to the organisation. Writes a letter which we submit should come into evidence to a person named Sara Shriven, and in the letter he states that everything that is being said about Hubbard is false. We have grossly mischaracteriaed his background and, in fact, we have got to correct it. So, as then the agent of L. Ron Hubbard, he is acting in Hubbard's behalf to correct the lies, and in the documentary evidence, one month before Mr. Armstrong leaves the church, proves that. He then is called in by the church to be security checked because he is saying bad things about Mr. Hubbard and that is not tolerated. He then has the choice of either undergoing that procedure or leaving, and at the same time he is told to sign a nondisclosure and release bond, and under this nondisclosure and release bond, one of which he had previously signed, he can be held liable for $10,000 temporal, not spiritual, temporal damages in a court of law if he discloses the contents of anything he's ever learned in the Church of Scientology. Well, that bond has been found by a number of courts to be not worth the paper it is printed on, but in any event, he leaves the church and he begins working independently with Garrison. Now the key fact for the court 71 to understand is that Garrison is in rightful possession of the documents. Hubbard is hiding. Mary Sue Hubbard is on her way to prison, and Garrison rightfully, pursuant to the contract, has the documents. Armstrong has no documents at this point. He's turned them all over to Garrison. For the next five to six months he works intermittently with Garrison on the biography project because they are now going to write their own, and he also works in a law firm part time, subsequently full time. Thereafter the church begins to harass Mr. Armstrong because they realize, and at this point in time -- Mr. Armstrong has never come to me. They begin to harass him. They do a number of things. For one thing, they make him an enemy. They issue what they call an S.P. Declare, a written document where they make him an enemy of the church, which we will show the court when we get into the argument, subject him to the Fair Game Doctrine. They steal photographs from him. Photographs have nothing to do with any of these archive materials. They are his own private materials which he actually received from a third party named Jim Dincalci who will testify in this court. They steal other materials from him which have nothing to do with the collection of documents when he was working for Hubbard. He has a meeting with them and they tell him to go get a lawyer because they are going to sue him. 72 At the same time in light of a lot of harassive acts, he's got very paranoid. He's seen what the Church of Scientology over the last decade has done to other people. He knows what they did in the criminal cases and he is fearful pursuant to the Fair Game Doctrine, which calls for the destruction of enemies, that they are going to kill him and he gets on an airplane and in late May 1982 he flies to Clearwater, Florida, and for the first time he sees me, and I can only describe to the court that he was in a state of total fear because he thought the organization was not only to kill him but they were going to sue him. He then goes back to Garrison and tells Garrison what is happening, and Garrison then gives him the documents, and this will be the testimony of Mr. Garrison, to defend himself because he's now been threatened by the church, et cetera, told he is going to be sued. So, he goes to a lawyer; namely, me, and the reason he came to me is because he thought that there were very few lawyers in the United States who were willing to litigate against the organization because of what they do. That is the reason he came to me. Garrison then gives him back documents which he copies with his own money. So, now, you have got in issue whether Garrison is in rightful possession. Armstrong copies Garrison's documents with his own money, so we submit that those pieces of paper, aside from the privacy issues which we will get into, but just on the conversion issue, those pieces of paper actually now belong to Mr. Armstrong. 73 Mr. Garrison is in the position more so of like, of being the employees in the Pearson versus Dodd case. Mr. Litt cited extensively from Pearson versus Dodd and said the case was inapplicable because the court assumed that the employees would have been held liable for conversion in that case. However, Mr. Litt did not read the rest of the opinion after it made that assumption where it said: "Where the claim is that private information concerning plaintiff has been published" -- assuming the publication is to me or assuming even that Garrison made the publication to Armstrong -- "has been published, the question of whether that information is genuinely private or is of public interest should not turn on the manner in which it was obtained." Which goes to the intrusion allegedly by Armstrong, but as the facts show, in fact, Armstrong never even intruded because the documents were given by Garrison back to Armstrong, and I believe all of the testimony from the beginning to the end of this case will bear those facts out. So, in any event, if anyone is in the position of being the so-called Dodd employee, it is Garrison at this point because he is in rightful possession. The contract is silent on what he can do with the documents, and he gives them to Gerald Armstrong to defend himself, who gives them to his lawyer. Garrison, for the next year thereafter, continues 74 to prepare the biography and, in fact, comes up with a publisher. Approximately one month after Mr. Garrison comes up with a publisher for the true biography of L. Ron Hubbard he is approached by the Church of Scientology, attorneys for Mr. Hubbard, and they basically make a deal with Mr. Garrison. He will give them back every document he has. He will not disseminate the information. He will give them back the manuscript that he has done based upon the documents, and he will be paid some, I understand, $240,000 or something in that range, although we have never seen a settled agreement because they won't produce it in discovery, although we submit on the conversion count it is relevant for purposes of this case. But in any event, that took place in the summer of 1983. Now, at that time for the first time someone other than Garrison has the right to possess the documents. Hubbard is not around. He has never come in and asserted his property rights, let alone his privacy rights which are purely personal. Hubbard is not around, so the documents go back to the control of a lawyer who represents L. Ron Hubbard. That is essentially what happened. The case is already one year in process. They have the burden of proving that there has been -- they have a right to possession at the time of the alleged conversion. Well, the time of the alleged conversion, since Garrison was in rightful possession, could only have taken place, we submit, since conversion only deals with the right to possession, the time for the conversion could only arise 75 when Garrison is out of the picture, even if it legally can arise at all, which I really doubt, which is why I think we are entitled to a motion for directed verdict at the close of the opening. But in any event, Garrison in the summer of 1983, one year after the case is brought, is out of the picture. But the documents have already been under seal for almost a year, so if the conversion took place at that point in time, there has been no deprivation from then, the summer of 1983 to the present by Mr. Armstrong. He doesn't even have the documents. The court has the documents. So, we submit that as the facts evolve, it is going to become very, very clear that there has been no conversion by Mr. Armstrong because he received the documents rightfully from Mr. Garrison, and Mr. Garrison at all points in time, at least until he made the arrangements with Mr. Lenske on behalf of Mr. Hubbard, had the right to possess the documents. Now, those issues essentially raise many issues relating to the conversion count. Who had the right to possession. What documents. When, and what damages, which they have the burden of proving flowed from the alleged conversion. Now, first of all, if they pursue their conversion count, as Pearson versus Dodd states, conversion is essentially a forced sale of the documents. Mr. Armstrong, if he is found liable by a jury for conversion of the documents, will have to pay damages. Conversion does not give them the 76 documents back. He will have to pay damages to them and he keeps the documents, which I am sure is not what this case is about. So even if they prevail on their conversion count, they would not get the documents back. The essential issue comes down to whether or not the court under its equitable jurisdiction and/or under the claim of Mary Sue Hubbard on her personal property claim under the California Code of Civil Procedure can get the documents back. Now, with regard to Mary Sue Hubbard, the evidence will be that most of the documents have nothing to do with Mary Sue Hubbard, were never under her possession or control. In fact, she was stripped of her possession or control when she was convicted and removed from her post by her husband through another individual who took over the Church of Scientology named William Franks, who will testify in this courtroom. Mr. Franks will testify that he removed Mary Sue Hubbard from her post on the order of her husband so that she had no right to possess the documents. So, even to this date, we submit, the evidence will be that Mary Sue Hubbard has no claim to possession. With regard to the admissibility of the documents, in light of the facts I have laid out to the court, as I submit the evidence will be, the admissibility of the documents on solely the conversion count, which is the property count, the court is confronted, as I see it, with somewhat of a dilemma and the dilemma has nothing to do with all the First Amendment arguments and some of the other arguments that 77 were raised with regard to the Ballard case which I happen to be very familiar with. I don't know if Mr. Litt read both Supreme Court opinions, but the bottom line in the Ballard case is that the Ballards went to jail for fraud, and the bottom line in the Ballard case is that the court did adjudicate the good faith and the truth or falsity of some of the representations and the good faith of the others, and the Ballards went to jail. The representations by Mr. Litt as to what the Ballard case stands for, I submit to the court, are simply inaccurate. But in any event, the narrow question of on the conversion count what documents are admissible, if Mr. Litt introduces evidence that only categories of documents were taken, assuming he can even prove that all the facts I have given to the court are false but that Armstrong just took the documents, and he introduces evidence as to just general categories, then the question is going to become for the court, as Mr. Armstrong will testify, who owns or has the right to possess what documents? When this case started, when they got their preliminary injunction, they filed an affidavit under the name of a fellow by the name of Andrew Lenarcic, and I won't bother to read it to the court now, but we intend to introduce it into evidence. The affidavit states that the Church of Scientology owns the documents and has the right to possess them, and on that basis they got the preliminary injunction. Well, a few months later, Mary Sue Hubbard, who 78 has had a lot of conflict with the church, intervenes and she says, "That is wrong. I own and have the right to possess them because I as the wife of L. Ron Hubbard." She files an affidavit and states under oath in her deposition what I have just informed the court. The organization then comes back and says, "Well, we gave them to Mr. Armstrong and we didn't do so with Mary Sue Hubbard's permission, but we gave them to him because we thought that Mr. Garrison needed them." So, now, the church is in the position of being an agent of someone, probably Hubbard, saying we gave them to Garrison and didn't have authority to do so, so the Church of Scientology of California may be, the plaintiff in this action, arguably could be a wrongdoer on their own affidavit presently filed in the court. Mary Sue Hubbard then comes back and says, "I have a present right to possession." We then uncover documents; namely, to CSW, the petitioner that initially went to Mr. Hubbard in which Mary Sue Hubbard's handwriting appears on it approving Mr. Armstrong getting the documents. So, now, Mary Sue Hubbard is in the possession, having stated under oath before this court that she had never given Mr. Armstrong permission. She is in the position of stating something contrary to what the facts will show. Eventually, L. Ron Hubbard, through a letter to the court, who is supposedly in seclusion, which I submit to the court is just a nice word for a fact that he is 79 concealing himself, Mr. Hubbard writes a letter to the court. Doesn't even mention Mary Sue Hubbard and says give the documents to an organization called the Church of Scientology, International which isn't even before the court. If, on the admissibility of these documents, Mr. Litt tries to prove through interrogatories what documents are owned or who had the right to possess them, we have the right to defend on the issue of they didn't own or have the right to possess them. In fact, as this court is going to see, many of these documents have nothing to do with either L. Ron or Mary Sue Hubbard. They have to do with an organization called the Guardian's Office and potential criminal involvement of that agency with regard to concealing facts from the United States Government. Those documents and in the category that I just told the court about didn't even go through Mr. Armstrong. They were collected by another person who is going to testify on the witness stand, and given directly to Mr. Garrison as part of the biography project. Now, subsequently Mr. Garrison gave some of those documents to Mr. Armstrong, but, in fact, Mr. Armstrong never even collected some of the documents, so on the issue of these supposed categories of documents, we are going to be able to show the court that they didn't even come from the people who are now claiming they have a right to possess them. So on the issue of who has the right to possess, which is the underlying issue in this case, we submit that we should be able to admit into evidence the documents to prove that 80 neither one of these parties has the right to own then or possess them. If the court solely dealt with categories without getting into content on strictly the conversion issue now, I submit you are going to end up in an intractable dilemma because one document could be brought up as falling within a particular category. Mr. Armstrong is going to testify that document doesn't fall into that category. It falls into this category. It didn't cone from Mr. Hubbard's archives here or the Hubbard archives there. It came from a meeting, subsequently came from a person named Vaughn Young and was again directed to Mr. Garrison. The court is going to say then let me see the document. The best evidence may be the document itself. If that is the case, the court and the jury is almost going to have to look at the contents to decide the origin of the documents, so in that respect on just the conversion count, aside from all the problems on the invasion of privacy and breach of fiduciary duty counts, the documents as a practical matter have to come into evidence. There is a practical solution which we submit to save the time of the court. What Mr. Armstrong can do is he can collect the documents from downstairs where apparently they presently are, and under an order of the court bring them up here and categorize them along with categories that I am just informing the court about, and he can tell the court where they come from, either by stipulation or by me making a proffer as 81 to what the evidence will be. There are some five or six thousand pages of documents down there. We can limit the number of documents we need to prove the defense of these various counts, so if we could take probably 40 or 50 documents, and some of them are multipage documents, but 40 or 50 specific documents, we could prove that with regard to those documents, they don't have the right to possess them, that they never came from Mr. Armstrong when he was a member of the church, and that, in itself, would defeat, at least with regard to those documents, the conversion count. If Mr. Litt wanted to pursue his case with the rest of the thousands of documents, then he is right. We would be constrained to have to go through the documents to try to prove the origin of them and who has the ownership or the right to possess them. But as I indicate to the court, I submit that isn't even what this case is about because that wouldn't even give them the relief that they need. This case is not about commercial instruments that have value, literary works that have value, something that, as our trial brief indicates, their cause of action would be more appropriately for copyright infringement if they didn't want Mr. Armstrong to gain an economic advantage from the document. The case has to do with the contents and this is really what the Pearson versus Dodd case is about. THE COURT: We will stop right there and take a recess. Reconvene at 1:30. (A recess was taken until 1:30 p.m. of the same day.) 82 LOS ANGELES, CALIFORNIA; THURSDAY, APRIL 19, 1984; 1:45 P.M. -o0o- THE COURT: All right, we are back in session. You may continue, Mr. Flynn. MR. FLYNN: I spent a great deal of time on the facts. I am going to try to narrowly focus a little bit and try to wrap this up. One of the issues that's been raised is whether the documents are private, and it is our view that the documents, notwithstanding Mr. Litt's representation that Mr. Armstrong testified that they are private -- as Your Honor is going to find out, he testified that they were private until they were given to Garrison -- we feel that is a major issue in this case. If Senator Dodd had given his documents to Drew Pearson for the purposes of publication, then obviously there would be absolutely no case called Pearson versus Dodd. Now, maybe Senator Dodd was there at the tine and in control of his documents, so he vas willing to do so. In this case Mr. Hubbard, because he had fleed, was not around and in control of his documents, so he was not really sure, I give him this credit, he probably doesn't know to this date what is in those documents. We feel that there is powerful evidence, including court holdings, including evidence as I have indicated to the court that he is a fugitive from justice, the French authorities are after him. There is a penal investigation 83 in Toronto. I believe Mr. Hubbard is going to be indicted in Canada. I don't think that he knew, even though he approved the petition, exactly what he was giving to Mr. Armstrong, to be perfectly candid with the court, but that is Mr. Hubbard's problem and Mr. Hubbard is not a party to this lawsuit, and these are for the most part his documents which I think, in itself, is a serious defect in the plaintiff's case which I am going to get into. But in any event, if Senator Dodd had given those documents to Drew Pearson, there would be no lawsuit. In effect, what has happened here is Mr. Hubbard has given these documents to Omar Garrison pursuant to a contract that is totally silent on what Garrison can do with the documents, so that our view is that once you give documents to a journalist to write a book based on the documents, you have given whatever privacy, aside from all the public interest and public figure issues, and whether there was information already in the public records, aside from all that, if you gave your private documents to a journalist to write a book, then you lose your right of privacy in those documents. That is basically what has happened because Mr. Garrison, as he will testify, is a journalist. So, therefore, the question of whether these documents are private, we think we should be entitled to a directed verdict on that point alone. Let's suppose that Garrison went ahead and wrote the book and the book was a true reflection of what is in 84 these documents, and Mr. Litt is accusing me of making mischaracterizations or defamatory characterizations of Mr. Hubbard, so I won't even go into the details which are plentiful, but in any event, let's assume that Garrison wrote the book and published this material, that they hadn't entered into the contract that they did in the summer of 1983; clearly there would be no cause of action for invasion of privacy. There would be no cause of action for defamation if the contents of the documents -- if the story as predicated on the contents of the documents is accurate. There certainly would be no cause of action for conversion, and that is basically what the Pearson versus Dodd case ended up saying. What really protects this type of situation is a defamation in libel and slander type of lawsuit. That is really the rights that are being protected here, and if there is no libel and slander, then there is no cause of action. So, if Mr. Garrison had published the book, I submit to the court that there would be no cause of action and Mr. Armstrong certainly is in no worse position as the receiver of documents than Mr. Garrison who was rightfully in possession of than Mr. Garrison would have been. In fact, if Mr. Armstrong went out and wrote a book now based on what is in the documents, then our First Amendment of the United States and the California Constitution would entitle him to write what he wrote. That is the basis of this case, This case involves information. It doesn't really revolve around any inherent value in the documents thems