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UNITED STATES DISTRICT COURT
MIDDLE DISTRICT OF FLORIDA
TAMPA DIVISION
Misc No.: 8:00-MC-64-T-26C
In Re:
RELIGIOUS TECHNOLOGY CENTER, Case No.: C-96-20207 RMW
Plaintiff
Northern District of California
vs
GRADY WARD,
Defendant
RESPONSE OF NONPARTIES TO PLAINTIFF'S 'MOTION FOR AN ORDER, etc.' and MOTION
OF NONPARTIES FOR PROTECTIVE ORDER and FOR REMISSION TO THE DISTRICT COURT for
the NORTHERN DISTRICT OF CALIFORNIA
STACY BROOKS, THE LISA McPHERSON TRUST, Inc.(hereafter "LMT"), and
JOHN MERRETT, ESQUIRE (collectively "Respondents") pray denial of the
above-referenced Motion of Plaintiff, and pray entry of a protective order and
of an order remitting this matter to the District Court for the Northern
District of California, and say:
1. On or about July 25, 2000, this Court granted deponents' Motion for
Protective Order, based upon a finding that Plaintiff violated the provisions
of Local Rule 3.02(a) (M.D. Fla.) by unilaterally setting the depositions of
Ms. Brooks and the LMT on less than ten days notice. The Court re-set the
depositions for August 3, 2000.
2. Ms. Brooks appeared as scheduled to give testimony individually and
as the LMT's representative. By agreement among the parties and the witness,
her personal and corporate Rule 69 depositions were conducted simultaneously.
3. Ms. Brooks testified exhaustively concerning her and the LMT's
financial dealings with Defendant, and answered every question put to her
concerning assets, income, and expectancies of Defendant.
4. Upon the advice of the undersigned, Ms. Brooks refused to answer
questions put to her which dealt with her own affairs or those of the LMT,
except insofar as they related to the assets, income, and expectancies of
Defendant.
5. Well after Plaintiff exhausted Ms. Brooks' knowledge of the assets,
income, and expectancies of Defendant, the undersigned announced suspension of
the deposition pursuant to the terms of Rule 30(d)(3), F.R.Civ.P., because the
examination was abusive and interminably probed, for illegitimate purposes,
matters beyond the lawful scope of examination under Rule 69, F.R.Civ.P.
6. After suspension of the deposition, Respondents revisited the
records of the LMT in accordance with discussions had during the deposition,
and supplemented the LMT's production before the close of business on the day
of the deposition. [Plaintiff's Exhibit E]
7. Ms. Brooks and the LMT have furnished all information and
documentation in their possession to which Plaintiff is entitled pursuant to
Rule 69, F.R.Civ.P.
8. The jurist presiding over the underlying action is Magistrate Judge
Edward A. Infante.
9. On Wednesday, August 9, 2000, the undersigned transmitted by
facsimile to counsel for RTC a letter "written in conformity with Magistrate
Judge Infante's standing order regarding the bringing of discovery motions,"
requesting that counsel confirm or deny within 24 hours that Plaintiff's
examination of Ms. Brooks and the LMT was at an end, and asking that, if
Plaintiff wished to further pursue the examination, counsel advise the
undersigned "of the questions or areas of inquiry [he] wished to pursue, so
that [the undersigned] could determine whether it [would] be necessary to
pursue relief in the form of a protective order from Magistrate Judge
Infante." [Exhibit 1] Counsel for Plaintiff failed to respond to this inquiry.
10. The undersigned took no action until the afternoon of Monday,
August 14, 2000, giving counsel for Plaintiff five days to respond.
11. On Monday, August 14, 2000, the undersigned mailed to Magistrate
Judge Infante a letter [Exhibit 2] pursuant to Civil Local Rules 7-1 et seq.,
37-1 et seq., (N.D. Ca.) and Magistrate Judge Infante's Standing Order
regarding the bringing of discovery motions requesting leave to file a motion
for protective order. [Exhibit 3]
12. Later on August 14, 2000, Plaintiff's above-referenced Motion was
served upon the undersigned by facsimile.
13. On August 15, 2000, the undersigned again wrote to counsel for
Plaintiff, reminding counsel of the pendency of Respondents' request to the
California Magistrate and asking for agreement that the dispute be resolved by
that jurist. [Exhibit 4] Plaintiff's counsel declined. [Exhibit 5]
14. The California Magistrate, without benefit of brief or argument,
determined that, because Plaintiff's Motion was "pending," Respondents would
not be granted leave to present their Motion for Protective Order. In
actuality, the mandatory procedure for gaining leave to proceed in the
California court was "pending" before the filing of Plaintiff's Motion in this
Court.
15. Plaintiff's Motion falsely claims an attempt at extrajudicial
resolution of the issues raised. Plaintiff appears to rely on the dispute
itself as the attempt at resolution required by Rules 37(a)(2)(A) and 26(c),
F.R.Civ.P. and Local Rule 3.01(g) (M.D. Fla.). Counsel for Plaintiff failed to
respond to the written inquiry of the undersigned concerning resolution of the
underlying discovery dispute.
16. The issues now before this Court require a determination of the
proper scope of discovery under Rule 69, F.R.Civ.P.
17. Because this action was long since litigated to judgment, the
District Court for the Northern District of California is the more appropriate
forum for determination of the proper scope of discovery.
18. Respondents specifically request that Plaintiff's Motion, together
with Respondents' request for relief, be remitted to the District Court for
Northern District of California.
19. Respondents further request entry of a protective order pursuant
to the provisions of Rules 26(c) and/or 37(a)(4)(B), relieving them of any
responsibility to respond further in this matter, and taxing their attorney
fees and costs against Plaintiff and its counsel.
MEMORANDUM
A. This matter must be decided in light of the history of Plaintiff
and its counsel. Plaintiff, one of many entities of various titles which
together make up the organization
known as"Scientology," indulges in a great deal of off-point discussion in its
Motion and Memorandum. Plaintiff's representations are often less than
accurate. This is no surprise.
A British court found after a three week trial that "Scientology is
both immoral and socially obnoxious. Mr Kennedy did not exaggerate when he
termed it 'pernicious'. In my judgement it is corrupt, sinister and dangerous.
It is corrupt because it is based on lies and deceit .... It is sinister
because it indulges in infamous practices both to its adherents who do not toe
the
line unquestioningly and to those outside who criticise or oppose it. * * *
The "Church" resorts to lies and deceit whenever it thinks it will profit it
to do so. In Re: B & G (Wards), High Court of Justice - Family Division, July
23, 1984; Latey, J. In 1984, the California Superior Court for Los Angeles
County found that Scientology "over the years with its 'Fair Game' doctrine
has harassed and abused those persons not in the Church whom it perceives as
enemies. The organization clearly is schizophrenic and paranoid, and the
bizarre combination seems to be a reflection of its founder...." Church of
Scientology of California vs Gerald Armstrong, Case No. C 420153 (Memorandum
of Intended Decision, June 20, 1984) Breckenridge, J. RTC has a "documented
history of vexatious behavior" and abuses "the federal court system by using
it, inter alia, to destroy their opponents, rather than to resolve an actual
dispute over trademark law or any other legal matter." RTC vs Scott, Nos.
94-55781 & No. 94-55920; 1996 U.S. App. LEXIS 8954 (9th Cir. 1996). For a
rather detailed discussion of Scientology's lack of regard for courts and
litigants, see Church of Scientology vs Wollersheim, 42 Cal.App. 4th 628 (Cal.
App. 2d Dist. 1996).
The attitude of Plaintiff's counsel toward the judicial system has
previously been recognized. See, e.g., Cury vs Philip Morris USA, 93 Civ.
2395, 1995 U.S. Dist. Lexis 14798 (D.C.S.D.N.Y. 1995); (Deposition taken in
Korea suppressed due to the behavior of Samuel D. Rosen during the deposition,
and the witness' resultant departure from the deposition.); Schering
Corporation vs Vitarine Pharmaceuticals, Inc., 124 F.R.D. 580 (D.C.D.N.J.
1989) (Samuel D. Rosen, his co-counsel, and his client assessed at least
$50,000.00 in Rule 11 sanctions because of Mr. Rosen's false oral and written
representations to the court.); Unique Concepts, Inc. vs Brown, 115 F.R.D. 292
(D.C.S.D.N.Y. 1987) (Samuel D. Rosen sanctioned for conduct "undertaken in bad
faith, intended to harass and delay, and reflect[ing] a willful disregard for
the orderly process of justice.").
In May, 1994, Helena K. Kobrin and her firm (then known as "Bowles &
Moxon") were ordered to pay $17,775.00 in sanctions for the presentation and
prosecution of a frivolous civil RICO claim on behalf of RTC. Religious
Technology Center vs Gerbode, No. CV 93-2226 AWT, 1994 U.S. Dist. Lexis 6432
(D.C.C.D.Ca.).
In or about October, 1979, the Honorable Charles Richey accepted a
stipulation of evidence in United States vs Mary Sue Hubbard, et al., Criminal
No. 78-401 (D.C.D.C.) The signers of that stipulation included Michael
Hertzberg, Esq., who is presently Mr. Moxon's co-counsel in the McPherson
case, and United States Attorney Carl Rauh. At pages 212 - 214 of that
stipulation, Mr. Moxon, then as now affiliated with Scientology, is identified
as having knowingly produced some nine pages of forged handwriting exemplars
in response to a grand jury subpoena, and having sworn in an accompanying
affidavit to the authenticity of the exemplars.
Among the more pungent falsehoods offered by Plaintiff in the instant
matter are
a) that Robert Minton's "stated agenda" is the destruction of
Scientology. Mr. Minton has expressed a desire to see Scientology reformed,
and its more revolting and antisocial practices terminated, but has no
"agenda," stated or otherwise, for the destruction of Scientology;
b) that Robert Minton is the "real party in interest" and an
"investor" in the Lisa McPherson wrongful death case. It is unclear whether
Plaintiff's identification of Mr. Minton as the "real party in interest" is a
matter of deliberate falsehood or merely a display of carelessness regarding
the law. A "real party in interest" is "the person in whom rests, by
substantive law, the claim sought to be enforced." Kumar Corp. vs Nopal
Lines, Ltd., 452 So.2d 1178, 1183 (Fla. 3d DCA 1985) (citing Author's Comment
to Fla.R.Civ.P. 1.210 and 3A J. Moore, Moore's Federal Practice, para. 17.02
(2d ed. 1984)) Mr. Minton has advanced costs for the benefit of the Plaintiff
in the McPherson case, and hopes to be reimbursed. The personal representative
of the Estate of the Ms. McPherson is Dell Leibreich. Mr. Minton is not
entitled to press the wrongful death claim which is now pending in the Florida
Circuit Court, and is therefore not the (or even "a") real party in interest
in that action.
c) that the Brooks/LMT deposition was "terminated" for some reason
other than the stated reason. The deposition was, as stated in the transcript
of the deposition, suspended because Plaintiff refused to restrict its
inquiries to pertinent matters, and had exhausted the witness' knowledge of
Defendant's financial affairs.
d) that the undersigned was retained for the purpose of thwarting
discovery in the McPherson case. The undersigned has taken all appropriate
measures to minimize the impositions of Scientology upon persons who are not
witnesses to the facts of the McPherson-Scientology death case, but who have
nonetheless been subpoenaed for deposition by Scientology. Scientology has
made a practice of unilaterally setting depositions on very little notice,
effecting service of subpoenas at times calculated to ensure that the deponent
is, so far as is possible, deprived of meaningful access to the court, and
probing personal affairs of individuals who have no connection to the
sufferings and death of plaintiff's decedent in the McPherson case. The abuse
of non-parties is a favorite exercise of Scientology. See, e.g., Church of
Scientology vs Wollersheim, 42 Cal.App. 4th 628, n.5 at 649 (Cal. App. 2d
Dist. 1996) (New suit instituted as a collateral attack on adverse judgment
used by RTC to delve into the affairs of the original and successor trial
judges, along with the opponents' attorneys.)
Respondents will not undertake a point-by-point refutation of the
"facts" offered by Messrs. Rosen and Moxon. Rather, Respondents deny each such
allegation which is not specifically and precisely supported by record
evidence other than the affidavits of counsel. If the Court intends to rely to
any degree upon the affidavits of Messrs. Rosen and Moxon, Respondents request
that they be permitted to depose and/or cross examine the affiants upon their
claims.
B. Respondents are entitled to have this matter resolved by the
District Court for the Northern District of California. (1) Temporal Primacy:
efforts toward resolution of the issues now before the Court were initiated
by Respondents, and were directed toward entry of a protective order by the
court in which the underlying action is pending. Proceedings to resolve the
discovery dispute between Respondents and Plaintiff began when Respondents
attempted to settle the matter, giving notice at that time that protection, if
any were necessary, would be sought in the District Court for the Northern
District of California. [Exhibit 1] Plaintiff failed to respond, and did not
even acknowledge the pendency of the issue until it served and filed its
instant Motion.
Despite its claim to the contrary, Plaintiff made no effort to resolve
the disagreement concerning the proper scope of inquiry. Plaintiff offers no
factual support for this claim, because Plaintiff made no move in or out of
court to resolve the present issues until confronted with the commencement by
Respondents of proceedings under Rule 26(c).
Because Respondents' quest for a protective order was commenced before
Plaintiff's efforts to compel, it is Respondents and not Plaintiff who should
be afforded the choice of forum.
(2) Analytical Primacy: The court in which the underlying action is
pending is, as a matter of fact and of law, the proper forum for resolution of
this matter. As noted above, the first move toward resolution of the dispute
arising from the deposition in question was made by Respondents.
The dispute revolves around the propriety of Plaintiff's attempt, in a
deposition in aid of execution under Rule 69, F.R.Civ.P., to probe the
personal, financial, and business affairs of persons other than the
Defendant/judgment debtor. The matter for determination is the proper scope of
examination, and that determination will be best made by the jurist who
authorized post-judgment discovery. "Local courts whose only connection with a
case is the supervision of the taking of depositions ancillary to an action
elsewhere should be especially hesitant to pass judgment on what constitutes
relevant evidence thereunder." Horizons Titanium Corp. vs Norton Co., 290 F.2d
421, 425 (1st Cir. 1961). The court in which the action is pending has
authority to entertain a nonparty's motion for protective order, by the plain
language of Rule 26. Socialist Workers Party, et al. vs Attorney General of
the United States, et al., 73 F.R.D. 699 (D.C. Md. 1977). Obviously, the
restriction on the locale in which a party may seek compulsion against a
nonparty is intended to benefit and protect the nonparty, not to give the
interrogating party a choice of forum. See, e.g., Lampshire vs Procter &
Gamble, 94 F.R.D. 58 (D.C.N.D. Ga. 1982); Nature's Farm Products, Inc. vs
Giorgio Foods, Inc., 1997 U.S. Dist. Lexis 428; 42 U.S.P.Q. 2d (BNA) 1959
(D.C.E.D. Pa. 1997). The privilege of choice of forum belongs to the nonparty
deponent whether the device in question is a motion for protective order or a
motion to compel:
The Advisory Committee Note is thus more naturally read to suggest
that the court for the district where the deposition is to be taken may stay
its action on the motion, permit the deponent to make a motion for a
protective order in the court where the trial is to take place, and then defer
to the trial court's decision. See Kearney, 172 F.R.D. at 383. This reading
cures the jurisdictional problems; a nonparty that moves for a protective
order in the court of the underlying action thereby submits to that court's
jurisdiction.
Such a reading might seem to raise a new question: does it allow the nonparty
witness territorial convenience with respect to motions to quash but not with
respect to motions for a protective order? They are not obviously so
different; in fact there is broad overlap in the grounds for granting the two
motions. Compare Fed. R. Civ. P. 26(c)(1)-(4) with Fed. R. Civ. P.
45(c)(3)(A). As it turns out, the differential treatment is only apparent. The
operation of the subpoena rules in fact grants nonparty witnesses the
privilege of choosing to litigate in their home districts regardless of how
relief is sought.
In the end what affords the nonparty deponent this territorial protection is
that the rules vest power to compel discovery from a nonparty, and to impose
contempt sanctions for non-compliance, in the subpoena-issuing court. Fed. R.
Civ. P. 37(a)(1); Fed. R. Civ. P. 45(e). Rule 26(c) permits that court to stay
its proceedings on a nonparty deponent's motion for a protective order pending
action by the trial court, and to defer to the trial court's resolution of
that motion. The rules may well allow similar abstention on a motion to quash,
followed by deference to the trial court's decision on a motion for a
protective order; this was the technique used in Kearney. But if the nonparty
deponent fails to take the bait and move for a protective order in the trial
court, the issuing court must make the decision whether discovery may be had,
and its scope, since it is the only court with the power to order enforcement.
In Re: Sealed Case No. 98-5062, 141 F.3d 337, 342 (D.C. Cir. 1998). Having
"taken the bait," Respondents are entitled to have this issue resolved by the
court in which the action is pending, which is also the court best situated to
determine the proper scope of the inquiry. At least two courts have ruled that
the right of nonparties to elect the forum for litigation of disputes of the
sort here presented is absolute, and that parties have no right to contest the
nonparty's election. Pactel Personal Communications vs JMB Realty Corp., 133
F.R.D. 137, 139 (D.C.E.D.Mo. 1990); Byrnes vs Jetnet Corp., 111 F.R.D. 68, 70
(n.2). (D.C.M.D.N.C. 1986).
By moving for remittance of the matter to the originating court,
Respondents have invoked their entitlement to "territorial convenience" as to
Plaintiff's Motion and as to their own Motion for Protective Order. The
precise procedure under the authorities previously cited in this section
appears to be abatement or deferral of the proceedings in this Court coupled
with entry of an order authorizing the nonparties to seek Rule 26(c) relief in
the district in which the action is pending.
C. Plaintiff is not entitled to an order of contempt. Plaintiff seeks
an order adjudging some or all of Respondents in contempt for violation of the
Court's order of July 25, 2000. That order found Plaintiff and its counsel
guilty of noncompliance with the local rule governing the setting of
depositions, granted Respondents' Motion for Protective Order, and deferred
the deposition in question to August 3, 2000. The mandate of the order
provides that Respondents' motion is granted "to the extent that the
depositions shall go forward on August 3,...." No additional or more specific
command is included.
It is upon a supposed violation of that order that Plaintiff bases its
request for an adjudication of contempt. However, Plaintiff fails to make out
even a prima facie case for violation of the order, admitting in its Motion,
Memorandum, and exhibits that Ms. Brooks appeared for deposition at the
appointed time and place and answered all questions which were not deemed
objectionable. Likewise, Plaintiff concedes through its filings that all
exhibits not produced at the time of the deposition were delivered to
Plaintiff's counsel after adjournment on the day of the deposition, together
with a preliminary errata statement fully explaining the pertinent
circumstances. Consequently, Plaintiff has indulged in the peculiar act of
seeking a finding of contempt for violation of the protective order entered on
Respondents' behalf, while simultaneously creating a record of complete and
good faith compliance with the duces tecum provisions of the subpoena. For
example, Plaintiff alleges that certain checks were not produced in compliance
with the subpoena, while attaching copies of the checks as exhibits to its
memorandum.
Plaintiff further contends that Respondents are somehow subject to
citation for contempt because of what is referred to as Respondents'
"unilateral termination" of the deposition. The only issue raised by that
contention is whether the contention itself is a deliberate or only an
inadvertent falsehood.
The deposition was suspended by the undersigned because of the abusive
intelligence-gathering exercise conducted by Plaintiff under the guise of a
deposition. Rule 30(d)(1) and (d)(3), F.R.Civ.P. specifically authorizes the
procedure followed by Respondents in defending against Plaintiff's abuses. It
is entirely appropriate for counsel to instruct a witness not to answer
questions which are posed in bad faith or amount to harassment, and to halt a
deposition conducted in such a manner, if a protective order is thereafter
sought on behalf of the witness who refuses to answer. Quantachrome Corp. vs
Micrometrics Instrument Corp., 189 F.R.D. 697, 701 (D.C.S.D. Fla. 1999);
McDonough vs Keniston, 188 F.R.D. 22, 24 (D.C.N.H. 1998).
This is precisely the procedure followed in the instant case.
Respondents suspended the deposition and initiated the appointed process for
bringing the dispute to the attention of the court in which the action is
pending; within the week, an attempt was made to resolve the dispute
extrajudicially [Exhibit 1]; leave of court [Exhibit 2] pursuant to the
standing order of the presiding magistrate [Exhibit 3] was sought when
Plaintiff ignored the inquiry. Five days later, Plaintiff brought the Motion
now pending.
A finding of contempt cannot be predicated on the fact that
Respondents followed a procedure authorized by Rule 30(d)(1) and (d)(3),
F.R.Civ.P. and sanctioned by decisional law.
Plaintiff claims further entitlement to an order of contempt based on
the claim that Ms. Brooks perjured herself in explaining the origin of a cash
register receipt. Ms. Brooks identified the receipt as one for goods purchased
by Defendant for use by the LMT, and testified that Defendant's expenditure,
as documented by the receipt, was to be credited against a debt he owes the
LMT. Plaintiff argues that because the receipt contains the word "Eureka," the
purchase was made in California rather than Florida, and that the deponent is
therefore guilty of perjury, which is, according to Plaintiff, a contumacious
act. There are a number of problems with this line of "reasoning."
First, however likely it may be that the purchase in question was made
in California, Plaintiff's blusterous proclamation does not establish that
fact. Second, because of the limited scope of a Rule 69 examination of a
nonparty, the issue is not material. See Section C(2) below, and authorities
cited therein. Third, assuming the purchase was made in California, there is
no basis for a determination that Ms. Brooks' testimony is perjurious rather
than merely erroneous. Moreover, Ms. Brooks' reading and signing of the
deposition remain pending, and no statement in the transcript can be regarded
as final until the signed transcript has been returned to the court reporter.
D. Plaintiff is not entitled to an order compelling answers to those
questions the deponent declined to answer, but Respondents are entitled to a
protective order. (1) Plaintiff failed to fulfill the mandatory preconditions
to bringing its Motion. Local Rule 3.01(g) (M.D. Fla.) and Rule 37(a)(2)(A),
F.R.Civ.P. require that the movant attempt to resolve discovery disputes
before seeking relief from the court. Nodding to those requirements, Plaintiff
claims in its Motion that "counsel conferred concerning these issues at the
deposition, but were unable to resolve them." Although Plaintiff filed a
portion of the deposition transcript, no "conference" is cited in its
Memorandum. The reason for this shortcoming is simple: there was no such
conference. What occurred during the deposition was a dispute; the only
attempt at resolution was made in Respondents' unanswered letter of August 9
[Exhibit 1]. That letter is an example of a good faith attempt to resolve a
discovery dispute; the more or less bilateral bloviation shoveled out during
the deposition is not.
Because Plaintiff failed to comply with the mandatory conference
requirements of the applicable rules, there is no cognizable request for entry
of an order compelling answers to specified questions.
(2) The questions Respondents declined to answer were entirely
inappropriate, and Respondents are entitled to a protective order and
sanctions. Respondents' request for a protective order is brought pursuant to
the provisions of Rules 26(c), 30(d)(3), and 37(a)(4), F.R.Civ.P. The issue
is whether a non-party deponent is entitled to protection from further
interrogation once a judgment creditor has exhausted the deponent's knowledge
of the financial affairs of the judgment debtor.
Plaintiff deposed Ms. Brooks and the LMT pursuant to Rule 69,
F.R.Civ.P. The seminal case regarding the scope of nonparty examinations
under Rule 69 is Burak vs Scott, 29 F.Supp. 775 (D.C.D.C. 1939). In Burak, a
judgment creditor subpoenaed a number of purported business acquaintances of
the judgment debtor, commanding that they appear pursuant to Rule 69 to
"testify and to produce 'a complete list of all persons indebted to you; all
bank pass books, and all books and records showing assets of every kind
belonging to you or under your control.'" Id. Quashing the subpoenas, the
court held that while Rule 69 permits examination of non-parties, it "...
do[es] not, however, give to a judgment creditor any right to subject to the
judgment the property of persons other than the judgment debtor, nor to
require the disclosure of assets of persons other than the judgment debtor."
[e.s.]
In Caisson Corp. vs County West Bldg. Corp., 62 F.R.D. 331 ( E.D. Pa.
1974), Jack Blumenfield was the sole owner of the judgment debtor, County
West. The judgment creditor sought discovery from Mr. Blumenfield regarding
the activities and assets of other corporations in which he was involved or
held an interest. Observing that "the inquiry must be kept pertinent to the
goal of discovering concealed assets of the judgment debtor and not be allowed
to become a means of harassment of the debtor or third persons," [e.s.] the
court opined that discovery may be had concerning the assets and activities of
nonparties only if there has been "some showing of the relationship that
exists between the judgment debtor and the third party from which the court on
a motion for a protective order can determine whether the examination has a
basis." Examination of Mr. Blumenfield's other corporate interests and
activities was allowed, because the creditor was able to prove that Mr.
Blumenfield, sole owner and alter ego of the judgment debtor, also
substantially controlled the other corporations into whose affairs the
creditor sought to probe.
Strick Corporation vs Thai Teak Products Co. Ltd, et al., 493 F.Supp
1210, 1217-1218 (E.D.Pa. 1980) likewise dealt with Rule 69 examination of
persons other than the judgment debtor. The court ruled that the affairs and
assets of third parties are subject to examination under Rule 69 only when
there is a factual showing establishing "a reasonable doubt about the bona
fides of [a] transfer of assets." Because the judgment creditor in Strick
Corporation was unable to offer facts in support of its allegation that the
debtor and the nonparty examinees were alter-egos, the nonparty examinees were
obliged to respond only with respect to the activities and assets of the
judgment debtor, and not with respect to themselves. See also Magnaleasing,
Inc. vs Staten Island Mall, 76 F.R.D. 559 (S.D.N.Y. 1977) (discovery of third
party activities and assets allowed only after a showing and protracted
analysis of potential relevance to the matter of identification of assets,
income, and expectancies of the judgment debtor.)
The financial relationships shown to exist between Mr. Ward and the
deponents in this action, as established by the testimony received at the
deposition in question, are limited and transparent:
1. He provides computer systems management to the LMT for a fixed
monthly fee of $2500.00;
2. He is indebted to LMT on a note in the amount of $12,200.00,
payable over sixty months at 7% annual interest;
3. In 1998, Ms. Brooks made him a gift of $8,000.00, and made a like
gift to his children.
4. He has no ownership interest in or control over LMT, and no access
to LMT's assets.
There is no evidence suggesting that Defendant has authority over or
access to any assets of Ms. Brooks or the LMT, or that either of them owes
Defendant any money.
Plaintiff requests that the Court compel responses to questions
regarding the number of persons employed by LMT, the means by which Ms.
Brooks' position and duties with the LMT were determined, the identities of
Defendant's correspondents at LMT, whether Robert Minton had access to LMT's
checkbook in January 2000, and the sources of funding for the LMT. These
questions are set forth on pages 3, 4, 7, and 9 of Plaintiff's Motion.
Plaintiff offers no explanation of the pertinence of any of these areas of
inquiry, except to suggest that information about the number of LMT employees
would allow Plaintiff to determine whether Defendant has the use of a car.
Plaintiff does not suggest how knowing whether Defendant borrows cars would
promote execution of its judgment.
Plaintiff requests that Ms. Brooks be required to disclose whether her
(now closed) checking account in Washington State was a joint account with her
then-husband, the source of her income at the time she made cash gifts to
Defendant and his children, whether she believes that she was wealthy at the
time the gifts were made and whether she had received any money from Robert
Minton at that time, where she banks, whether she received tax advice and/or
committed tax fraud in making the gifts, whether she or the LMT has
outstanding debts or mortgages and the interest rates thereon, and whether she
knows what Medicare is. These questions are set out on pages 4 through 11 of
Plaintiff's Motion. Plaintiff suggests that the requested banking information
is pertinent because it would lead to evidence regarding other payments to
Defendant. This is insupportable; such information could only be pursued by
embarking on a fishing expedition through Ms. Brooks' bank records, which is
patently impermissible under Burak, supra. Plaintiff suggests that Ms. Brooks'
opinion of her wealth at the time of the gifts is relevant because it goes to
her credibility concerning "her wherewithal to pay Defendant and his family
$16,000.00," and that information about the place at which she first met
Defendant's children is relevant to her credibility on the issue of the gift
to the children. Because Plaintiff does not contest the fact that the funds
were transferred, it is ludicrous to postulate that Ms. Brooks' credibility,
rather than harassment, is the true object of the questions. Plaintiff claims
that the debt/mortgage/interest rate questions are proper because the
information sought would allow Plaintiff to determine whether the 7% interest
on the loan from LMT to Defendant was a standard commercial rate. This claim
is transparently false; the only possible reason for the questions is the
discovery of the private financial affairs of Ms. Brooks and the LMT. The
Medicare questions, supposedly pertinent to the "issue" of Defendant's payroll
deductions was completely answered by the production, during the deposition,
of Defendant's payroll records, and by Ms. Brooks' explanation of the entries.
Plaintiff does not bother to offer an explanation of the supposed relevance of
the tax advice and tax fraud questions.
Plaintiff asks on pages 3, 4, 5, 7, 8, and 10 of its Motion that Ms.
Brooks be ordered to disclose the LMT's record-keeping procedure for telephone
bills, any large cash gifts she had made to persons other than Defendant,
where she met Defendant's children, her personal living arrangements, her
accountant's name, her activities outside the LMT, whether she discussed the
gifts to Defendant and his children with anyone before making the gifts, and
the reason that the LMT loaned, rather than gave, $12,200.00 to Defendant. The
contretemps regarding the telephone bills, though totally irrelevant to the
issues properly raised in a Rule 69 examination, was resolved after suspension
of the deposition when Respondents produced the telephone bill reflecting the
date and duration of the call about which Plaintiff had inquired.[Plaintiff's
Exhibit E] Plaintiff claims that inquiries about Ms. Brooks' living
arrangements and decision-making process, and about her accountant, were
relevant because they might, respectively, lead to information about other
"sources of funding" to Defendant and to records of the 1998 gifts to
Defendant and his family. "Sources of funding" to Defendant are irrelevant;
information about them leads in no way to any source of satisfaction of
Plaintiff's judgment; even if they were relevant, they could not decently be
pursued by rummaging through the private affairs of nonparties. As previously
noted, the amount and timing of the cash gifts are not in question, which
means that records of the transaction could not promote achievement of the
legitimate goals of a Rule 69 deposition. Plaintiff spares all concerned the
annoyance of an attempted explanation of the other questions noted in this
paragraph.
The deponent testified fully concerning the Defendant's assets,
income, and expectancies. The only questions not answered were those directed
to the private affairs of Ms. Brooks and the LMT. In dealing with Ms. Brooks
and the LMT (identified in Plaintiff's Memorandum as "adversaries" of
Scientology), Plaintiff made a deliberate decision to follow the instruction
of its founder, L. Ron Hubbard, who wrote that "People attack Scientology; I
never forget it, always even the score....When we need somebody haunted we
investigate....When we investigate we do so noisily always. And usually
investigation damps out the trouble even when we discover no really pertinent
facts." Hubbard, L.R. Manual of Justice, Grant Prod.Co. Ltd., G.B. 1959.
Hubbard said of legal action by Scientology that "[t]he purpose of the suit is
to harass and discourage rather than to win. The law can be used very easily
to harass...." Hubbard, L.R. Magazine Articles on Level 0 Checksheet, Hubbard
College of Scientology, East Grinstead, 1968.
Respondents' involvement in this matter began when Plaintiff, in an
attempt to prevent Ms. Brooks from appearing at a press conference concerning
Scientology (see the original Motion for Protective Order herein) violated the
rules governing the setting of depositions. The proceeding at hand is riddled
with brazen falsehoods, which are entirely consistent with the judicially
documented history of Plaintiff and its counsel. Plaintiff's purpose in
drawing Respondents into this action is illegitimate from beginning to end.
Protection for Respondents and sanctions against Plaintiff and its counsel,
determined by the California court which almost certainly has substantial
familiarity with the facts of the underlying action and the tactics of
Plaintiff and its counsel, is the appropriate end to this matter.
Respectfully submitted,
_____________________________
JOHN M. MERRETT, ESQUIRE
2716 Herschel Street
Jacksonville, Florida 32205
Telephone: 904.388.8891
Florida Bar No.: 0742848
I hereby certify that a copy of the foregoing was furnished to Samuel
Rosen, Esquire, Ford Greene, Esquire, and Helena Kobrin, Esquire by facsimile
transmission this 28th day of August, 2000.
______________________________
John M. Merrett
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