OPERATION CLAMBAKE: SCIENTOLOGY COURT FILES

Part of a public library containing court papers related to lawsuits involving Scientology in some way. Collected to help lawyers and critics of Scientology in future lawsuits from or against this cult. Please report back if this has been of help, or send new contributions to the collection. Thanks. Andreas Heldal-Lund (heldal@online.no)




       RELIGIOUS TECHNOLOGY CENTER;  Church of Scientology International,
                             Plaintiffs-Appellants,
                                       v.
 Larry WOLLERSHEIM;  Leta Schlosser;  Richard Ofshe;  Margaret Singer, et al.;
                   Charles B. O'Reilly, Defendants-Appellees.
                                  No. 90-56104.
                         United States Court of Appeals,
                                 Ninth Circuit.
                       Argued and Submitted Oct. 8, 1991.
                        Submission Vacated Oct. 23, 1991.
                           Resubmitted July 20, 1992.
                             Decided July 29, 1992.
  Religious organization sued parties involved in state court action against
 organization alleging Racketeer Influenced and Corrupt Organizations Act (RICO)
 violations, and violations of the Copyright Act.  The United States District
 Court for the Central District of California, James M. Ideman, J., dismissed
 the law firm and expert witnesses who had testified on behalf of the plaintiff
 in the state tort action, and appeal was taken.  The Court of Appeals held
 that:  (1) organization failed to allege pattern of racketeering activity in
 connection with claim that attorneys and expert witnesses had obtained
 confidential religious materials and threatened to reveal that confidential
 information for litigation leverage, and (2) use of allegedly confidential
 documents was "fair use" and not an infringement of organization's copyright.
  Affirmed.
  See also 869 F.2d 1306.

 [1] RACKETEER INFLUENCED AND CORRUPT ORGANIZATIONS
 Allegation of two isolated criminal acts is insufficient to satisfy relatedness
 requirement for Racketeer Influenced and Corrupt Organization Act (RICO)
 claim.  17 U.S.C.A. s 501(b);  18 U.S.C.A. s 1962.

 [2] RACKETEER INFLUENCED AND CORRUPT ORGANIZATIONS
 Claim by religious organization that attorneys, who successfully represented
 party in tort action against church, and expert witnesses who testified on that
 party's behalf, violated Racketeer Influenced and Corrupt Organizations Act
 (RICO) by obtaining religious materials to prosecute state case and threatening
 to reveal that confidential information for litigation leverage, while meeting
 RICO relatedness requirement, did not satisfy "continuity" requirement or show
 required pattern of racketeering activity;  only goal was successful
 prosecution of suit so there could be no threat of activity continuing beyond
 completion of that suit.  17 U.S.C.A. s 101 et seq.;  18 U.S.C.A. s 1961
 et seq.

 [3] RACKETEER INFLUENCED AND CORRUPT ORGANIZATIONS
 Pattern of activity lasting only a few months does not reflect long-term
 criminal conduct to which Racketeer Influenced and Corrupt Organizations Act
 (RICO) was intended to apply.  17 U.S.C.A. s 101 et seq.;  18 U.S.C.A. s
 1961 et seq.

 [4] COPYRIGHTS AND INTELLECTUAL PROPERTY
 Use of allegedly confidential church documents by plaintiff in state tort
 action against church was "fair use" and not an infringement of copyright;
 documents were provided to expert witnesses for purposes of preparing testimony
 in state tort litigation and were not used for any other purpose.  17
 U.S.C.A. s 107;  Fed.Rules Evid.Rule 501, 28 U.S.C.A.;  West's
 Ann.Cal.Civ.Code s 47, subd. 2 (1989).
  *364 William T. Drescher, Calabasas, Cal., for plaintiffs-appellants.
  Michael L. Goldberg, Mandell, Lewis & Goldberg, McLean, Va., for defendants-
 appellees.
  Leta Schlosser, pro per.
  Charles B. O'Reilly, pro per.
  Appeal from the United States District Court for the Central District of
 California.

  *365 Before BROWNING, ALARCON and T.G. NELSON, Circuit Judges.

  PER CURIAM:
                                        I
  Plaintiffs Religious Technology Center and Church of Scientology
 International (CSI) [hereinafter collectively RTC] brought two suits against
 numerous defendants alleging violations of the Racketeer Influenced and Corrupt
 Organizations Act (RICO), 18 U.S.C. s 1962;  the Copyright Act, 17
 U.S.C. s 501(b);  and state tort law.  The cases were consolidated and referred
 to a Special Master who recommended dismissal of the so-called "Greene
 defendants."  The district judge issued an order adopting the Report and
 Recommendations of the Special Master.  RTC appeals.  We affirm.
                                       II
  The facts are briefly set out below.  Additional background can be found in
 the opinion in an earlier appeal, Religious Technology Center v.
 Wollersheim, 796 F.2d 1076, 1077-79 (9th Cir.1986).
  Defendant Wollersheim was the plaintiff in a state tort action against the
 Church of Scientology California (CSC), an entity not a party to this appeal,
 for intentional infliction of emotional distress.  The suit was ultimately
 successful.  Defendant law firm of Greene, O'Reilly, Broilet, Paul, Simon,
 McMillian, Wheeler and Rosenberg, P.C., and individual defendants Leta
 Schlosser and Charles B. O'Reilly, were Wollersheim's attorneys.  Defendants
 Richard Ofshe and Margaret Singer were expert witnesses who testified on
 Wollersheim's behalf.  These are the "Greene defendants."
  RTC, a Scientology affiliate, and CSI then filed this suit alleging that,
 during the prosecution of the state court action, Wollersheim's attorneys
 obtained copies of stolen religious scriptures from former members of the
 Scientology Church and gave them to Wollersheim's expert witnesses.  RTC also
 alleged the defendants planned to reveal the contents of these scriptures,
 which are kept highly confidential by the Church of Scientology, to blackmail
 CSC into settling the Wollersheim state case.  In addition, RTC alleged
 defendant O'Reilly sent an extortionate letter to CSC, a related corporation,
 threatening to disclose the contents of the scriptures unless he was paid $10
 million.
  This case was consolidated with an earlier suit filed against the persons who
 allegedly stole the religious scriptures.  In due course, the district court
 issued an Order to Show Cause why the RICO and pendant state claims should not
 be dismissed and referred the case to a Special Master.  Based upon the
 allegations of the complaint supplemented with RTC's detailed statement of the
 facts they relied upon in response to the order to show cause, the Special
 Master recommended, inter alia, that the Greene defendants be dismissed.  The
 court adopted the Special Master's recommendation and entered final judgment in
 favor of the Greene defendants pursuant to Rule 54(b). [FN1]

      FN1. Appellee Schlosser asserts that RTC is precluded from bringing this
     appeal because it did not object to the Order adopting the Special Master's
     report.  Since the order was final, RTC acted appropriately in seeking
     Rule 54(b) certification.

                                         III
  A. RICO CLAIM
  The Special Master recommended judgment for the Greene defendants on RTC's
 RICO claim [FN2] because RTC failed to allege:  (1) an "enterprise";  (2) two
 predicate acts;  or (3) a "pattern of racketeering activity."  We do not reach
 the first two grounds of dismissal.  We agree with the Special Master *366
 that appellants failed as a matter of law to allege a "pattern of racketeering
 activity" by the Greene defendants. [FN3]

      FN2. 18 U.S.C. s 1962(c) provides:
     It shall be unlawful for any person employed by or associated with any
     enterprise engaged in, or the activities of which affect, interstate or
     foreign commerce, to conduct or participate, directly or indirectly, in the
     conduct of such enterprise's affairs through a pattern of racketeering
     activity or collection of unlawful debt.

      FN3. The parties disagree whether the district court's ruling was based
     on Rule 12(b) or Rule 56.  The dispute is not relevant to our decision.
     RTC does not contend any relevant facts were not before the district court
     or that there were any conflicts as to facts relied upon by the district
     court in disposing of the issue we decide.  We have accepted RTC's
     allegations as true and have reviewed their adequacy de novo.
     The Special Master concluded the plaintiffs had failed to allege a
     violation under 18 U.S.C. s 1962(a).  Report and Recommendation at 28.
     The appellants claim not to have sought relief under that section.
     Appellant's Brief at 20.  We therefore assume plaintiffs do not appeal
     dismissal of this cause of action.

  In H.J., Inc. v. Northwestern Bell Telephone Co., 492 U.S. 229, 109
 S.Ct. 2893, 106 L.Ed.2d 195 (1989), the Supreme Court held that to establish a
 "pattern of racketeering activity," plaintiff's allegations must show both
 that "the racketeering predicates are related, and that they amount to or pose
 a threat of continued criminal activity."  Id. at 239, 109 S.Ct. at 2900
 (emphasis in original).
  [1] An allegation of two isolated criminal acts is insufficient to satisfy
 the relatedness requirement, id.;  the predicate offenses are related if
 they have "the same or similar purposes, results, participants, victims or
 methods of commission."  Id. at 240, 109 S.Ct. at 2901 (citation omitted).
  [2] RTC alleged that the Greene defendants obtained the religious materials
 to prosecute the state court case, and threatened to reveal this confidential
 information for litigation leverage.  All of the predicate acts alleged were
 directed to these ends.  They therefore satisfied the "relatedness"
 requirement.
  However, the conduct alleged did not satisfy the "continuity" requirement.
 The Supreme Court has held that continuity can be demonstrated by proving
 either "a series of related predicates extending over a substantial period of
 time" or "past conduct that by its nature projects into the future with a
 threat of repetition."  Id. at 241-42, 109 S.Ct. at 2901-02.
  Since the only goal of the Greene defendants was the successful prosecution of
 the Wollersheim state tort suit, there was no threat of activity continuing
 beyond the conclusion of that suit.  See Medallion Television Enter., Inc.
 v. SelecTV of California, Inc., 833 F.2d 1360, 1364 (9th Cir.1987) (where fraud
 was a joint venture to obtain broadcast rights, once the rights were obtained
 the threat ended).
  RTC also failed to allege a series of related predicates extending over a
 "substantial" period of time.  See 492 U.S. at 242, 109 S.Ct. at 2902.
 [FN4]  The first predicate offense alleged was the receipt of the documents by
 Schlosser in the spring of 1985. [FN5]  The last predicate act was defendant
 Singer's attempt to introduce the scriptures into evidence in the state tort
 suit in October of 1985.  Thus the alleged activity continued for six months at
 most. [FN6]

      FN4. RTC alleges that the racketeering activity began in 1980 with the
     sending of the extortionate letter.  The letter was, however, sent to CSC,
     not RTC or CSI.  Since CSC is not a party to this case, it does not have
     standing to assert the wrongs done to another party.  The Supreme Court has
     held that, under 18 U.S.C. s 1962(c), "the plaintiff only has standing
     if, and can only recover to the extent that, he has been injured in his
     business or property by the conduct constituting the violation....  [N]or
     is the defendant liable to those who have not been injured."  Sedima,
     S.P.R.L. v. Imrex Co., 473 U.S. 479, 496-97, 105 S.Ct. 3275, 3285, 87
     L.Ed.2d 346 (1985) (citation omitted).

      FN5. As noted above, we do not reach the issue of whether RTC has
     sufficiently alleged predicate acts under RICO;  we only assume for
     purposes of discussion that they have.

      FN6. In its reply brief, RTC argues that the Greene defendants should be
     held responsible as co-conspirators for the later actions of other
     defendants.  There is no evidence this theory was raised in the district
     court, and we deem it waived.  See Winebrenner v. United States, 924
     F.2d 851, 856 n. 7 (9th Cir.1991).

  [3] The Supreme Court in H.J., Inc. held that "[p]redicate acts extending
 over a few weeks or months and threatening no future criminal conduct do not
 satisfy this [continuity] requirement."  492 U.S. at 242, 109 S.Ct. at
 2902.  We have found no case in which a court has held the requirement to be
 satisfied by a pattern of activity *367 lasting less than a year. [FN7]  A
 pattern of activity lasting only a few months does not reflect the "long term
 criminal conduct" to which RICO was intended to apply.  See 492 U.S. at 242,
 109 S.Ct. at 2902;  see also Feinstein v. Resolution Trust Corp., 942 F.2d
 34, 45-46 (1st Cir.1991) (span of 3-4 months, absent a threat of future
 criminal activity, is too short to support claim of long term criminal conduct
 at which RICO is aimed);  Kehr Packages, Inc. v. Fidelcor, Inc., 926 F.2d
 1406, 1418 (3d Cir.1991) (fraudulent scheme lasting 8 months directed at a
 single entity did not meet the continuity test);  Parcoil Corp. v. Nowsco
 Well Serv., Ltd., 887 F.2d 502, 504 (4th Cir.1989) (four months is insufficient
 to make out continuity);  Sutherland v. O'Malley, 882 F.2d 1196, 1205 (7th
 Cir.1989) (five month period is insufficient). [FN8]

      FN7. See, e.g., Dana Corp. v. Blue Cross & Blue Shield Mutual of
     Northern Ohio, 900 F.2d 882, 887 (6th Cir.1990) (seventeen years);
     Fleet Credit Corp. v. Sion, 893 F.2d 441, 447 (1st Cir.1990) (four and a
     half years);  Walk v. Baltimore and Ohio R.R., 890 F.2d 688, 690 (4th
     Cir.1989) (ten years);  Jacobson v. Cooper, 882 F.2d 717, 720 (2d
     Cir.1989) ("matter of years").

      FN8. RTC's second cause of action alleges a conspiracy to violate RICO,
     18 U.S.C. s 1962(d), which makes it "unlawful for any person to conspire
     to violate any of the provisions of subsections (a), (b), or (c) of this
     section."  Because we find that RTC has failed to allege the requisite
     substantive elements of RICO, the conspiracy cause of action cannot stand.

  B. COPYRIGHT CLAIM [FN9]

      FN9. The Special Master made no express finding with regard to RTC's claim
     of copyright infringement, nor did the district judge.  Nonetheless, we may
     affirm if there is evidence in the record to support the dismissal.
     Jackson v. Southern California Gas Co., 881 F.2d 638, 643 (9th
     Cir.1989).

  [4] The complaint alleges the defendants copied RTC's work, made
 unauthorized revisions in the work, and distributed materials that are
 substantially similar to it.  Complaint P 71.  However, the only specific
 factual allegation implicating the Greene defendants is found in P 22, which
 alleges Leta Schlosser, one of Wollersheim's attorneys, copied and transferred
 the stolen documents to Singer and Ofshe, Wollersheim's expert witnesses.
  Defendants' answer admitted Schlosser and O'Reilly provided the documents to
 the expert witnesses for the purpose of preparing their testimony in the state
 tort litigation.  RTC does not contend the Greene defendants used the documents
 for any other purpose.  Moreover, RTC has not contested Leta Schlosser's
 assertion that the documents were sealed, marked "Confidential" and never
 offered into evidence.
  In these circumstances, use of the documents was "Fair use" under 17
 U.S.C. s 107, and not an infringement of RTC's copyright. [FN10]  See
 Jartech, Inc. v. Clancy, 666 F.2d 403, 406-07 (9th Cir.1982) (copying of
 allegedly obscene film to be used as evidence in a nuisance abatement action
 was "fair use");  3 Nimmer on Copyright s 13.05[D] at 13-91 (1991) ("works are
 customarily reproduced in various types of judicial proceedings, including
 obscenity and defamation actions ... and it seems inconceivable that any court
 would hold such reproduction to constitute infringement either by the
 government or by the individual parties responsible for offering the work in
 evidence");  see also Hustler Magazine, Inc. v. Moral Majority Inc., 796
 F.2d 1148, 1155 (9th Cir.1986) (" 'use that has no demonstrable effect upon the
 market for, or the value of, the copyrighted work need not be prohibited in
 order to protect the author's incentive to create' ") (quoting Sony Corp. of
 America v. Universal City Studios, Inc., 464 U.S. 417, 450, 104 S.Ct. 774, 792-
 93, 78 L.Ed.2d 574 (1984)).

      FN10. Defendant Schlosser also argues the suit is barred by a California
     litigation privilege.  See California Civil Code s 47(2).  However, the
     federal courts will recognize state privileges only in cases in which
     "[s]tate law supplies the rule of decision."  Fed.R.Evid. 501.  In
     federal question cases, the law of privilege is governed by "the principles
     of the common law as they may be interpreted by the courts of the United
     States in the light of reason and experience."  Id.  Schlosser cites no
     cases, and we have found none, indicating such a privilege has been
     recognized as a matter of federal common law.

  C. PENDANT STATE CLAIMS
  Dismissal of the pendant state claims was not an abuse of discretion.  "When
 *368 federal claims are dismissed before trial ... pendant state claims also
 should be dismissed."  Jones v. Community Redev. Agency, 733 F.2d 646, 651
 (9th Cir.1984).
  AFFIRMED. [FN11]

      FN11. We deny appellee Schlosser's request for damages under
     Fed.R.App.P. 38.  This appeal was not wholly frivolous.

End of file...