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Court backs Church of Scientology in ex-member dispute

Church of Scientology
Courtesy of HBO
The Church of Scientology Celebrity Center in Los Angeles.

A divided federal appeals court has sided with the Church of Scientology in a Florida lawsuit filed by two former members who sought to recover money they donated to the church.

A panel of the 11th U.S. Circuit Court of Appeals, in a 2-1 decision Tuesday, upheld the use of a church arbitration process and an $18,495 award to former church members Luis and Maria Garcia — an amount that was hundreds of thousands of dollars less than they sought.

The majority opinion and a dissent said it was the first time that the church arbitration process had been used. The Garcias argued, in part, that a panel of three arbitrators --- members of the church --- had shown improper partiality and that the award should be tossed out.

In the 34-page majority opinion, Judge Robert Luck wrote that the Garcias, while members, had donated money to church-related projects and causes and had agreed to resolve disputes through binding religious arbitration.

The opinion upheld a 2018 decision by Tampa-based U.S. District Judge James Whittemore, who refused to vacate the arbitration award.

Luck wrote that an “international justice chief of Scientology” testified in district court that Scientologist arbitrators must follow the church’s justice codes and treat everyone impartially. Luck pointed to U.S. Supreme Court precedents that prevent courts from resolving church disputes that involve considering religious doctrine.

“Based on these well-established precedents, the district court correctly ruled that the First Amendment prevented it from entertaining the argument that Scientology doctrine rendered the arbitration agreements substantively unconscionable,” Luck wrote in the opinion joined by Chief Judge William Pryor. “Although the Garcias presented evidence to support their interpretation of Scientology doctrine, the international justice chief offered a conflicting interpretation. The First Amendment barred the district court from resolving this underlying controversy about church doctrine.”

But Judge Robin Rosenbaum wrote a 16-page dissent that said the agreement to resolve disputes in church arbitration was invalid, as the church was able to “make up” rules as the arbitration process moved forward. She wrote that “in requiring the Garcias to agree to be governed at arbitration by rules that did not exist and would be devised by the church and evolve while the arbitration proceeded, the arbitration agreement was as one-sided and unconscionable as an arbitration agreement can be.”

“If a party to the arbitration can create the rules governing the arbitration as the arbitration progresses, it enjoys an insurmountable advantage that effectively guarantees its victory,” Rosenbaum wrote. “That’s not an arbitration; it’s just plain arbitrary. And a federal court should not be a rubber stamp for the kind of inherently unfair, anything-the-arbitration-contract-drafting-party-wants-goes ‘arbitration’ that necessarily occurs when the agreement-drafting party can subject the other party to whatever rules it desires — even changing the rules — as the arbitration unfolds.”

After leaving the church, the Garcias filed a lawsuit in federal court against Church of Scientology entities and sought more than $400,000 in damages, Luck wrote. They made allegations such as fraud and breach of contract.

The district judge ordered that the case goes to arbitration because of the agreements the Garcias had signed that included arbitration requirements. The Garcias later returned to federal court to request vacating the $18,495 award, which represented refunds of deposits for retreats that they never attended, Luck wrote.