CHURCH OF SCIENTOLOGY, INTERNATIONAL, Plaintiff,
ELI LILLY & CO., Hill & Knowlton, Inc., et al., Defendants.
CA No. 92-1892 (SS).
United States District Court, District of Columbia.
May 3, 1994.
SPORKIN, District Judge.
*1 This matter comes before the Court on H & K Defendants' [FN1] motion for
reconsideration or in the alternative for certification for interlocutory
appeal and Defendant Eli Lilly's motion for certification for interlocutory
appeal. The Court has considered the motions, Plaintiff Church of
Scientology's ("CSI") opposition thereto, heard argument by the parties, and
received and considered post-argument briefs. The motions will be denied.
FN1. "H & K Defendants" refer to defendant and counterclaim plaintiff
Hill & Knowlton, Inc., its unit Hill & Knowlton Public affairs Worldwide
Company, defendant WPP Group, plc, Martin S. Sorrell, and J. Walter
H & K Defendants' Motion for Reconsideration
In their motion for reconsideration of this Court's decision to deny summary
judgment, the H & K Defendants rely on Choate v. TRW, Inc., 14 F.3d 74
(D.C.Cir.1994) and Minihan v. American Pharmaceutical Ass'n, 812 F.2d 725
In Choate, a senior policy analyst with TRW was fired for writings and
speeches that conflicted with his employer's business objectives. Choate had
sued TRW on a breach of contract theory, claiming that his employment contract
did not permit him to be fired because of his writings or their impact on his
employer. Choate, 14 F.3d at 76. As a basis for his breach of contract
claim, Choate referred to his own understanding that the employment contract
was to be "long term". The District Court granted summary judgment for the
defendant and the D.C. Circuit affirmed.
Citing Minihan, the Court of Appeals in Choate stated that:
"in the absence of clearly expressed contrary intent," the presumption of at
will employment prevails "even though the parties speak in terms of 'permanent'
employment" and that the legal assumption is that by using that term "the
parties have in mind merely the ordinary business contract for a continuing
employment, terminable at the will of either party." 812 F.2d at 727.
Choate, 14 F.3d at 77. The H & K Defendants point to this language and
argue that the Choate facts are analogous to the case at bar. The H & K
Defendants claim that, at best, CSI had an expectation and an understanding
that its relationship with Hill & Knowlton would not be terminated so long as
CSI performed its end of the bargain. The H & K Defendants point out that this
expectation conflicts with the written language of the integrated contract
which expressly provided for termination on 60 days written notice.
While this is a close issue, the Court is of the opinion that the instant case
is distinguishable from those cited by H & K Defendants. In the instant case,
CSI presents evidence that it had paid substantial money with the clear
understanding that its relationship with Hill & Knowlton would not be
terminated because of the controversial nature of its reputation. From the
beginning of the relationship, Hill & Knowlton recognized that it would be
subject to severe pressure if it took on Scientology as a client. Indeed,
Hill & Knowlton insisted on a nine-month trial period to assure itself that it
would be comfortable with the Scientologists' representation. At the
conclusion of this trial period, for which CSI paid handsomely, Hill & Knowlton
agreed without reservation to take on Scientology as clients. A jury could
find that by Hill & Knowlton's course of conduct, its representations to CSI,
the language of the two contracts, and the substantial "controversy premiums"
paid by CSI, that there was a "clearly expressed" intent and understanding that
while Hill & Knowlton had the right to terminate its contracts pursuant to its
terms, it would not do so where the sole basis turned out to be the
Scientologists' controversial nature. Succinctly put, Hill & Knowlton entered
into its relationship with the Scientologists with its eyes wide open. It knew
the Scientologists were a controversial client and had agreed to represent the
Scientologists only after it had assured itself that it could "live" with the
Scientologists as clients. A jury could find that the Scientologists would not
have spent some $4 million in fees if they believed Hill & Knowlton would
terminate its relationship because Hill & Knowlton found the Scientologists too
controversial. The documents submitted to the Court show that top officials of
Hill & Knowlton recognized their responsibilities to the Scientologists. As
Hill & Knowlton executive Robert Gray wrote in a draft memorandum:
*2 No client ever has invested more to justify H & K representation. If
we walk away from Scientology now, I fear the client, with some justification,
may demand return of that six-month study money (get amount) plus others they
attribute to the costs of bringing us up to speed on their mission and their
CSI Opposition to H & K Defendants' Motion for Summary Judgment, Ex. 50.
Defendants' Motions for Certification
Under 28 U.S.C. s 1292(b), when a district judge is confronted with an
issue that presents "a controlling question of law as to which there is
substantial ground for difference of opinion" and the judge believes that "an
immediate appeal from the order may materially advance the ultimate termination
of the litigation" the judge may certify the issue for review. The Court of
Appeals may then in its discretion permit an interlocutory appeal to be taken
of such certification. See 28 U.S.C. s 1292(b).
In their motion for summary judgment, the H & K Defendants have raised a
number of issues, some of which could be deemed to involve "controlling
questions of law as to which there is substantial ground for difference of
opinion." But the Court believes that an interlocutory appeal on these
questions will not realistically advance the ultimate determination of the
case. Whether or not some of the issues raised by the defendants eventually
are viewed more favorably in the Court of Appeals than in this forum, there
will remain nonetheless triable issues in this case. For example, CSI asserts
a secondary but nonetheless important basis for the breach of contract claim
against Hill & Knowlton. CSI maintains that during the two month "wind-down"
period after "oral notice" of termination to CSI, Hill & Knowlton failed to
continue to provide services at a time when CSI was in dire need of public
relations services. [FN2]
FN2. There is an additional fact issue stemming from the notice of
termination. The contract expressly provided for written notice. There
has been no evidence that written notice was ever given.
A trial will be needed no matter what the Court of Appeals decides on the
primary contract issue or on CSI's claim for breach of fiduciary duty. The
Court also finds that a trial will be needed on the Eli Lilly phase of the
case. To incrementally try this litigation will not result in its prompt
determination. At best it will delay the proceedings for possibly a year or
two. The case is scheduled for trial in a month. The most expeditious
procedure for all concerned would be to promptly try the case and then review
all the parties' litigation issues in due course.
Accordingly, it is hereby
ORDERED that the motion of H & K Defendants for reconsideration or, in the
alternative, for certification pursuant to 28 U.S.C. s 1292(b) is denied;
and it is further
ORDERED that the motion of Eli Lilly for certification pursuant to 28
U.S.C. s 1292(b) is denied.