Dead Canadians, Defrauded Californians, And Scientology’s Huge, Weird Win In Court


With Scientology in the spotlight thanks to a new HBO documentary, questions about the bizarre and shadowy organization’s classification as a religion are due for renewed scrutiny. The film’s juicy revelations come on the heels of a complicated Florida court case involving the First Amendment, Scientology’s refusal to return a dead Canadian’s money, and two former members who say they were defrauded of almost half a million dollars.

Luis and Rocio Garcia say they have been defrauded of about $449,000 for religious services they never received and charitable work that the church never undertook. The Garcias have been deemed “Suppressive Persons,” the church’s jargon for apostates who must be shunned by other followers who don’t want to be excommunicated themselves. This casting-out is the crux of the case, with plaintiffs arguing that because “suppressives were to be treated in the fashion that their church doctrine provides, [Scientology admits] that you couldn’t get a fair hearing,” attorney Ron Weil told ThinkProgress.

The judge seems to believe the Garcias have a strong case. Yet he decided in mid-March that he doesn’t have the power to get them their money back. The reasoning involves Scientology’s success in defining itself as a religion in the public mind, if not the courts. That success has allowed Scientology to amass billions of dollars’ worth of prime real estate in fancy zip codes around the globe, and helped a handful of individual followers like Tom Cruise to reportedly lived in extreme comfort thanks in part to the uncompensated sweat and tax-free cash of rank-and-file Scientologists.

Donations to the Church of Scientology are exempt from taxes because of a 1993 decision by the Internal Revenue Service (IRS). The move reversed a quarter-century of legal rulings that Scientology was a commercial organization because follower cash enriched church leaders, particularly founder L. Ron Hubbard. Despite repeatedly finding that the “church” was a commercial enterprise, and repeatedly having that finding upheld by courts, the IRS relented after years of lawsuits, private investigator inquiries into IRS agents’ private lives, a Scientologist break-in at an IRS record-keeping facility, and an un-recorded meeting between church head David Miscavige and the agency’s then-chief, Fred Goldberg.


The reversal, according to HBO’s new documentary Going Clear: Scientology and the Prison of Belief, came only after Miscagive told Goldberg that Scientology’s “war” on the IRS would end the moment it was granted tax-exempt status. (The church has always disputed that claim, which was originally reported in the 1990s by the New York Times, and described itself as enduring “more harassment and more attacks certainly than any religion in this century and probably any religion ever” at that time.)

The big-picture financial consequences of the IRS ruling are striking, but the consequences of the government deciding that Scientology is religious enough to be tax exempt have been downright nasty for individuals who left the church. For the Garcias, Scientology’s religious status prevented a judge from helping ex-members pursue fraud claims and refund demands against the church. In a ruling that says the plaintiffs had the better of the argument, Judge James Whittemore decided that the First Amendment prohibits him from carrying that argument to its logical conclusion and order the church to return almost half a million dollars in gifts by former Scientologists.

“We believe that the arbitration process has as its goal sort of a weighted deck against anyone who challenges any of the policies of the church,” Weil told ThinkProgress, “including those that are purely commercial, that deal with the solicitation of funds.”

Late last September, according to a deposition, the judge asked Scientology attorneys to provide evidence for their claim that the church had formally determined that arbitrations would follow the main internal process for settling other disputes. The church had at that point never conducted an arbitration process, but claimed that arbitrations would follow the procedures of something called a “Committee of Evidence” (Com Ev), which is the formal process for labeling someone “suppressive.”

Six days later, the church’s top official for interpreting how internal justice proceedings work wrote a letter to a Canadian man who wanted about $17,000 of his dead grandfather’s money returned so that he could set up a college fund for his daughter. That letter became the evidence the judge had requested, but the timeline confirms that church officials had not made that formal decision in the prior decades of its history. (Scientology praised the dead Canadian but declined to return his money, saying it has no legal obligation to return charitable religious gifts.)

As detailed in the documentary Going Clear, formal church policy installs a series of catch-22s for ex-members.

Technically, an excommunicated Scientologist can request refunds, but the process for filing such a request requires going into a church building to fill in a form, and excommunicated members are barred from entering church buildings. Technically, a “suppressive person” has recourse within the church, but that recourse involves the judgment of members in good standing, who are doctrinally obligated to treat the ex-member as a crazy and dangerous individual whose word can’t be trusted. Technically, binding arbitration for Scientologists involves the Com Ev procedure, but the Com Ev and binding arbitration are such fundamentally different processes that they are incompatible.


The judge takes the plaintiffs’ side on all these catch-22s, saying that the church “failed to present any convincing evidence supporting their strained contention” that the Com Ev and arbitration processes are connected. Yet he still found that the arbitration agreements meet the minimum standard under Florida law and can be enforced, and decided that the First Amendment prohibited him from considering whether all those interlocked paradoxes screw ex-members out of due process rights.

An arbitration process “has to be fair, it has to have some basis on which somebody can find against the church and on behalf of the Garcias,” plaintiffs attorney Ted Babbitt told ThinkProgress. “I don’t think that exists in this case, and in fact the court found the evidence was very persuasive that the Garcias couldn’t get a fair shake out of arbitration.” But because the judge decided he cannot consider how church doctrine permanently prejudices these internal deliberations against the ex-members, winning on the evidence didn’t translate to winning the day.

“It doesn’t do any good to have a court decide that you’re right on the evidence if you’re wrong on the law,” Babbitt said, while noting that any appeal would at least be based the same evidentiary findings. Besides, he said, it’s really a cut-and-dried fraud case.

“If you are told by the Bishop of the Catholic Church that they need money to support a certain school and in fact that money is used to buy the Bishop new clothes, that’s fraud. It’s fraud regardless of the fact that it’s a religion.”