Court grants Scientology motion to force Florida trafficking case into arbitration
Federal district Judge Thomas Barber has denied Scientology leader David Miscavige’s objection to being served a labor trafficking lawsuit that was filed in Tampa by three former Sea Org workers.
However, Barber has granted Scientology’s motion to force the case into “religious arbitration” based on contracts that those workers, Valeska Paris and Gawain and Laura Baxter, signed while they were working on Scientology’s cruise ship, the Freewinds.
Although Judge Barber gave indications in court hearings that he suspected those contracts had been signed under duress, he is pointing to a 2006 US Supreme Court ruling written by Antonin Scalia that says the arbitrators should judge that duress argument and not Barber’s court.
Barber is hamstrung, he says, by that ruling and by Scientology’s status as a church, which prevents him from analyzing Scientology’s justice procedures and whether “suppressive persons” like Valeska and the Baxters would get a fair hearing from a panel of arbitrators who are Scientology members in good standing.
The lawsuit was first filed on April 28, 2022 and alleges that Valeska and the Baxters were forced into the Sea Org as children, suffered neglect and harsh punishments as children and adults, and served as virtual prisoners aboard the ship. Valeska also alleged that she had been sexually assaulted by other Sea Org workers, and then had been punished for speaking up about it.
Scientology responded by filing motions to compel arbitration, a strategy that has largely been a successful one for the church in recent years. The church says that Valeska and the Baxters signed contracts between 2003 and 2015 that obliged them not to sue but to take their grievances to Scientology’s internal form of arbitration. The church’s filings ignored the allegations of neglect and abuse that the lawsuit made, and argued that a contract was a contract and these former Sea Org workers can’t sue. Also, Scientology was pointing out that a 2013 lawsuit filed by two former Scientologists, Luis and Rocio Garcia, was forced into arbitration in the same Tampa courtroom, and it was upheld on appeal by the federal Eleventh Circuit. The same fate should apply to the trafficking lawsuit, Scientology asserted.
The plaintiffs responded that there was no valid arbitration agreement because the documents Scientology has presented are conflicting and were signed under duress; because they would unlawfully require the plaintiffs to give up their rights; because the plaintiffs would be forced into an “ecclesiastical” proceeding in a church they are no longer members of; and because the agreements are unconscionable.
Judge Barber rejected all of those arguments.
As for Miscavige, Barber said little about his decision to uphold the ruling by Magistrate Judge Julie Sneed that the Scientology leader had been evading service, and should be considered served and an official defendant in the case…
After an independent review of the record, the undersigned concurs with Judge Sneed. Judge Sneed’s Order is neither clearly erroneous nor contrary to law. Consequently, the objections are overruled, and Judge Sneed’s February 14, 2023, Order shall remain the Order of the Court.
Judge Barber’s order on the arbitration motions was much more involved. We’re going to quote a generous portion of it.
In this case, Defendants have presented evidence of presumptively valid arbitration agreements signed by Plaintiffs. The agreements broadly cover “any dispute, claim or controversy” between Plaintiffs and the Church of Scientology and related individuals and entities, and Plaintiffs agreed to resolve disputes “solely and exclusively through Scientology’s Internal Ethics, Justice and binding religious arbitration procedures.”
The agreements provide for “binding religious arbitration in accordance with the arbitration procedures of Church of Scientology International.” Plaintiffs do not contest the authenticity of the arbitration documents. Rather, they oppose submitting this dispute to arbitration on other grounds, including that (1) the arbitration agreements are unconscionable and not enforceable by third parties; (2) the arbitration provisions amount to an unlawful prospective waiver of substantive rights; (3) forcing Plaintiffs to participate in an ecclesiastical dispute resolution process when they no longer believe in Scientology would violate their First Amendment rights; and (4) the agreements were never formed due to duress, fraud, and lack of mutual assent.
Defendants are not strangers to the court system. In fact, the validity of the exact arbitration agreements at issue here was recently determined in Defendants’ favor in an unrelated case by another judge on this Court. See Garcia, 2015 WL 10844160, at *8. On appeal, the Eleventh Circuit held that the arbitration agreements were enforceable. See Garcia v. Church of Scientology Flag Serv. Org., Inc., No. 18- 13452, 2021 WL 5074465, at *6-7 (11th Cir. 2021). Plaintiffs have raised additional arguments here that were not made in Garcia to support their challenge to the enforceability of the arbitration agreements. Those arguments will be considered – but the Court is required to consider them with the Eleventh Circuit’s very recent opinion in Garcia firmly in mind
Unconscionability
The Court initially notes that when these arbitration agreements were challenged by other plaintiffs in the Garcia cases, unconscionability was one of the arguments that was specifically rejected by the District Court, and that determination was affirmed by the Eleventh Circuit. Those decisions relied on Florida law. See Garcia, 2021 WL 5074465, at *16 n.4 (discussing Florida choice-of law). Here, the parties acknowledge that California law governs this dispute. But at least with the major issues involving arbitration, California law and Florida law appear to be in agreement.
“[T]o invalidate an arbitration clause, a party must establish both procedural and substantive unconscionability.” Garcia, 2015 WL 10844160, at *5; see also Armendariz v. Found. Health Psychcare Servs., Inc., 24 Cal.4th 83, 114 (Cal. 2000) (explaining both procedural and substantive unconscionability must be present for a court to exercise its discretion to refuse to enforce a contract or clause). “Procedural unconscionability ‘relates to the manner in which the contract was entered,’ and substantive unconscionability asks whether the terms of the agreement are themselves too unfair to enforce.” Garcia, 2021 WL 5074465, at *6.
When evaluating whether an agreement is unconscionable, both California and Florida employ a balancing, or “sliding scale,” approach. See, e.g., Pinnacle Museum Tower Ass’n v. Pinnacle Market Dev. (US), LLC, 55 Cal.4th 223, 247 (Cal. 2012); Armendariz, 24 Cal.4th at 114; Basulto v. Hialeah Auto., 141 So. 3d 1145, 1159 (Fla. 2014). “[B]oth the procedural and substantive aspects of unconscionability must be present, although not necessarily to the same degree, and both should be evaluated interdependently rather than as independent elements.” Id. at 1161. Ultimately, “[t]he overarching unconscionability question is whether an agreement is imposed in such an unfair fashion and so unfairly one-sided that it should not be enforced.” OTO, L.L.C. v. Kho, 8 Cal.5th 111, 124 (Cal. 2019). “The burden of proving unconscionability rests upon the party asserting it.” Id. at 126.
Procedural Unconscionability
Plaintiffs contend that the agreements are procedurally unconscionable because they were contracts of adhesion and provided no procedures to govern an arbitration. “The central question with respect to the procedural component of unconscionability ‘is whether the complaining party lacked a meaningful choice when entering into the contract.’” Garcia, 2015 WL 10844160, at *5 (quoting Basulto, 141 So. 3d at 1157 n.3). A contract of adhesion strongly indicates that the contract is procedurally unconscionable, but “the presence of an adhesion contract alone does not require a finding of procedural unconscionability.” Garcia, 2021 WL 5074465, at *6 (quoting VoiceStream Wireless Corp. v. U.S. Commc’ns, Inc., 912 So. 2d 34, 40 (Fla. 4th DCA 2005)). Rather, the important question is whether the circumstances created such oppression or surprise that closer scrutiny of the fairness of the agreement is required. OTO, L.L.C., 8 Cal.5th at 126. In support of their procedural unconscionability argument,
Plaintiffs have presented evidence as to the adhesive nature of the arbitration agreements, “[b]ut adhesiveness alone is insufficient to prove ‘any degree of procedural unconscionability.’” Garcia, 2021 WL 5074465, at *9 (quoting Kendall Imps., LLC v. Diaz, 215 So. 3d 95, 110 (Fla. 3d DCA 2017)). Rather, a plaintiff must demonstrate oppression or surprise. Plaintiffs signed multiple agreements containing arbitration provisions over the years, each initialing next to the arbitration provisions themselves. A failure to explain arbitration does not justify a refusal to enforce an arbitration agreement. See, e.g., Nguyen v. Applied Med. Res. Corp., 4 Cal. App. 5th 232, 249 (Cal. Ct. App. 2016). In addition, considering the factors related to oppression, the Court finds that Plaintiffs have failed to put forth sufficient argument or evidence to demonstrate unfair oppression related to the arbitration provisions.
As previously noted, these exact arbitration agreements have been reviewed by the Eleventh Circuit, which concluded that the agreements were not procedurally unconscionable. Garcia, 2021 WL 5074465, at *6-7. There are no material factual distinctions that would require a different result here, considering that California law and Florida law are substantially similar or identical on this and other issues related to arbitration. Consequently, procedural unconscionability has not been established here.
Substantive Unconscionability
Even if the Court were to find the agreements were procedurally unconscionable to some degree, Plaintiffs have not demonstrated that the agreements are substantively unconscionable. Plaintiffs attempt to distinguish their case by arguing the Garcia Court did not expressly decide whether the agreements were substantively unconscionable because they lacked mutuality. But this argument is not persuasive. First and most importantly, it is not clear that these agreements include only unilateral, rather than bilateral obligations to arbitrate disputes. Rather, it appears that the terms of at least some of the agreements created a mutual agreement to arbitrate all Scientology-related disputes. See, e.g., Roman v. Superior Court, 172 Cal. App. 4th 1462, 1473 (Cal. Ct. App. 2009); Nguyen, 4 Cal. App. 5th at 251-53 (use of words “I agree” did not destroy bilateral nature of agreement to arbitrate disputes). Second, even if there was not mutuality, California courts recognize that a contract can provide for one-sided arbitration when there is a legitimate need without rendering the agreement unconscionable. See, e.g., Armendariz, 24 Cal.4th at 117; Flores v. Transamerica HomeFirst, Inc., 93 Cal. App. 4th 846, 855 (Cal. Ct. App. 2001). Plaintiffs have failed to adequately explain why any alleged lack of mutuality here should render the agreements invalid.
Plaintiffs also argue that the agreements are substantively unconscionable because they will not receive a fair hearing before arbitrators who view them as enemies of the church. However, deciding whether Scientology doctrine about suppressive persons renders the agreements substantively unconscionable requires “an analysis and interpretation of Scientology doctrine, which the First Amendment forbids civil courts to undertake.” Garcia, 2021 WL 5074465, at *2 (11th Cir. 2021). Based on controlling caselaw, the First Amendment prevents the Court from resolving this underlying controversy about internal church doctrines. Id. at *9. For the reasons stated, Plaintiffs’ unconscionability arguments do not provide a basis to invalidate the arbitration agreements at issue here.
Prospective Waiver
A prospective waiver of substantive federal rights is void. See, e.g., Mitsubishi Motors Corp. v. Soler Chrysler-Plymouth, 473 U.S. 614, 637 n.19 (1985); 14 Penn Plaza LLC v. Pyett, 556 U.S. 247, 273-74 (2009). However, the United States Supreme Court has determined that an agreement to arbitrate statutory claims does not necessarily constitute a prospective waiver of substantive rights. See, e.g., id. at 265-66. And even if federal anti-trafficking rights may not be prospectively waived, Plaintiffs appear to be confusing “an agreement to arbitrate those statutory claims with a prospective waiver of the substantive right.” Id. at 265. Plaintiffs have pointed to no case law requiring nullification of the entire agreement, including the agreement to arbitrate, due to a commitment to arbitrate under religious law.
Plaintiffs argue they are unable to vindicate their rights because the arbitration agreements do not allow for the selection of an impartial decision-maker. While that argument is certainly consistent with a practical, common-sense view of the situation, it is not supported by sufficient evidence. Plaintiffs have failed to put forth any evidence showing that Scientology doctrine would compel an arbitrator to be hostile to their claims or would make it impossible for them to receive a fair and neutral arbitration. Moreover, even if they put forth such evidence it is likely that the First Amendment would preclude the court from resolving an underlying controversy about church doctrine. See Garcia, 2021 WL 5074465, at *4.
Finally, Plaintiffs argue they cannot vindicate their rights because they are not allowed counsel of their choice. While that argument also is consistent with a practical, common-sense view of the situation, and an elementary understanding of simple fairness and justice, there does not appear to be any constitutional or statutory requirement that parties be permitted counsel at arbitration proceedings. The cases cited by Plaintiffs in support of their argument are distinguishable on their facts. For the reasons stated, Plaintiffs’ prospective waiver of rights argument does not provide a basis to invalidate the arbitration agreements at issue here.
First Amendment
“Arbitration in a religious forum has long been recognized as a valid approach to dispute resolution.” Garcia, 2015 WL 10844160, at *4. Although Plaintiffs argue that their First Amendment rights would be violated if they are required to arbitrate their disputes, as former Church members there is no question they agreed to abide by the rules and procedures of the chosen arbitration forum. Plaintiffs’ main authority supporting their First Amendment argument is an unpublished California opinion, Bixler v. Superior Ct. for the State of California, Cnty. of Los Angeles, No. B310559, 2022 WL 167792, at *1 (Cal. Ct. App. Jan. 19, 2022), review denied (Apr. 20, 2022), cert. denied sub nom. Church of Scientology Int'l v. Bixler, 214 L. Ed. 2d 124, 143 S. Ct. 280 (2022). It should be noted that this opinion could not be cited in California because the opinion itself states that “California Rules of Court, rule 8.1115, restricts citation of unpublished opinions in California courts.” In any event, Bixler is distinguishable because those claims involved “alleged tortious conduct occurring after [the petitioners’] separation from the Church and do not implicate resolution of ecclesiastical issues.” Id. at *1. The conduct alleged here occurred while Plaintiffs were members of the Church – their claims do not implicate conduct after separation.
For the reasons stated, Plaintiffs’ First Amendment argument does not provide a basis to invalidate the arbitration agreements at issue here.
Duress and Fraud
Plaintiffs argue that the agreements are void because they were signed under “severe duress,” which included “imprisonment and threats of economic, reputation, and physical harm.” If supported factually, this appears to be a strong argument – especially in light of California statutory and caselaw on this point, which seems to be considerably more liberal than other jurisdictions with respect to claims of duress, including claims of economic duress. See Cal. Civ. Code §§ 1569 and 1570; Tarpy v. Cnty. of San Diego, 1 Cal. Rptr. 3d 607, 614 (Cal. Ct. App. 2003); Leader Global Sols., LLC v. Tradeco Infraestructura, S.A. de C.V., 155 F. Supp. 3d 1310, 1317-18 (S.D. Fla. 2016). The Court directed supplemental briefing on the issue of duress, specifically whether the issue of duress should be resolved by the federal courts or must be submitted to arbitration and decided by the arbitrator.
The parties’ supplemental briefing has demonstrated that the law on this issue is not a model of clarity. Having carefully considered the arguments and case law, the Court finds that controlling law on this point from the United States Supreme Court requires the issue of duress to be determined in the first instance by an arbitrator. See, e.g., Buckeye Check Cashing, Inc. v. Cardegna, 546 U.S. 440 (2006); Prima Paint Corp. v. Flood & Conklin Mfg. Co., 388 U.S. 395 (1967).
Plaintiffs challenge the enrollment and departure agreements as a whole as entered into under duress – there are no factual allegations specific to the arbitration provisions themselves. The Prima Paint doctrine has been extended to require arbitration panels to determine many issues involving the validity of a contract with arbitration language, including allegations that such contract is voidable because it involves fraud, duress, or unconscionability. See, e.g., Merrill Lynch, Pierce, Fenner & Smith, Inc. v. Haydu, 637 F.2d 391, 398 (5th Cir. 1981). These claims must therefore be decided by an arbitrator, not the district court.
Conclusion
Plaintiffs allege they suffered considerable mental, physical, and emotional abuse as a result of their participation in Scientology, which began during their childhood and included long stays aboard a large private cruise ship operating in the Caribbean. An uninterested observer reading the amended complaint would likely be surprised and shocked by the conduct alleged. But under existing law, Plaintiffs are limited to seeking relief through arbitration within the Scientology organization itself, not through the courts. This is what the law appears to require even where, as here, Plaintiffs allege they were forced to sign the agreements – enforceable for a billion years – under duress. An uninterested observer might also find such a limitation on access to the courts to be surprising and shocking, but such a limitation appears to be required under governing law. On the other hand, it should not be forgotten that Plaintiffs each signed numerous agreements to arbitrate disputes with Scientology over an extended period of years. The most recent agreements were signed in 2009, when Ms. Paris was roughly 31 years of age, and in 2015, when the Baxters were roughly 33 and 31 years of age respectively.
For the reasons discussed above, the arbitration agreements in this case are enforceable. Under existing law, this Court’s hands are tied – the Court is not permitted to determine whether the agreements were executed under duress and therefore void. Instead, those issues must be decided through arbitration.
However, Defendants are not entitled to dismissal of the action. In accordance with Eleventh Circuit precedent, this case must be stayed rather than dismissed. See, e.g., Milestone v. Citrus Specialty Grp., Inc., No. 8:19-cv-2341-T-02JSS, 2019 WL 5887179, at *3 (M.D. Fla. Nov. 12, 2019) (citing Bender v. A.G. Edwards & Sons, Inc., 971 F.2d 698, 699 (11th Cir. 1992); 9 U.S.C. § 3; Giraud v. Woof Gang Bakery, No. 8:17-cv-2442-T-26AEP, 2018 WL 2057814 (M.D. Fla. May 3, 2018)).
Accordingly, it is
ORDERED, ADJUDGED, and DECREED:
(1) The motions to compel arbitration (Docs. 84; 85; 87; 88; 89) are GRANTED to the extent the Court finds that Defendants may enforce the arbitration agreements in this case.
(2) The motions are DENIED to the extent that Plaintiffs’ claims are not subject to dismissal at this time.
(3) This case is STAYED pending the completion of arbitration, and the parties are directed to notify the Court within (14) days of the resolution of the arbitration proceedings.
(4) The Clerk is directed to terminate all pending motions and deadlines, and thereafter close this case. DONE and ORDERED in Chambers, in Tampa, Florida, this 31st day of March, 2023.
TOM BARBER
UNITED STATES DISTRICT JUDGE
Thank you for reading today’s story here at Substack. For the full picture of what’s happening today in the world of Scientology, please join the conversation at tonyortega.org, where we’ve been reporting daily on David Miscavige’s cabal since 2012. There you’ll find additional stories, and our popular regular daily features:
Source Code: Actual things founder L. Ron Hubbard said on this date in history
Avast, Ye Mateys: Snapshots from Scientology’s years at sea
Overheard in the Freezone: Indie Hubbardism, one thought at a time
Past is Prologue: From this week in history at alt.religion.scientology
Random Howdy: Your daily dose of the Captain
Here’s the link to today’s post at tonyortega.org
And whatever you do, subscribe to this Substack so you get our breaking stories and daily features right to your email inbox every morning.
Paid subscribers get access to two special podcast series every week…
Up the Bridge: A weekly journey through Scientology’s actual “technology”
Group Therapy: Our round table of rowdy regulars on the week’s news
COS 3 Justice 0
Damn.