In May 1991 a TIME cover article titled, "Scientology: The Cult of Greed," said the so-called religion is "really a ruthless global scam."
Author Richard Behar said wrote that Scientology posed as a religion that survived "by intimidating members and critics in a 'Mafia-like' manner."
The cult wasn't happy, harassed the author (unethical behavior was condoned and encouraged by Scientology founder L. Ron Hubbard), and filed a libel suit.
The lawsuit was dismissed. Scientology fought the dismissal, but the Supreme Court refused to consider reinstating the cult's lawsuit.
In our opinion, Scientology is a commercial enterprise that masquerades as a religion and often operates like a hate group.
FOR THE SECOND CIRCUIT
August Term 1999
(Argued December 6, 1999 Decided January 12, 2001)
Docket Nos. 98-9522(L), 99-7332(CON)
Church of Scientology International,
-- v. --
Time Warner, Inc., Time Inc. Magazine Company,
B e f o r e : WALKER, Chief Judge, CABRANES and PARKER, Circuit
Appeal from orders of the United States District Court for
the Southern District of New York (Peter K. Leisure, District
Judge) dismissing appellant's complaint.
BURT NEUBORNE, New York, NY,
Eric M. Lieberman, Andrew J.
Fields, Scott T. Johnson,
Rabinowitz, Boudin, Standard,
Krinsky & Lieberman, New York,
NY, for Plaintiff-Counter-
FLOYD ABRAMS, Dean Ringel,
Janet A. Beer, Cahill Gordon &
Reindel, New York, NY, Robin
Bierstedt, Time Inc., New
York, NY, for Defendant-
JOHN M. WALKER, JR., Chief Judge:
Plaintiff-appellant Church of Scientology International
("CSI") appeals from judgments of the district court for the
Southern District of New York (Peter K. Leisure, District Judge)
dismissing appellant's libel complaint. Because we find that the
challenged statements were either not of and concerning CSI or not
published with actual malice, we affirm the judgments of the
On May 6, 1991, Time magazine published a 10-page, 7500-word
cover article entitled "Scientology: The Cult of Greed" (the
"Article"). The Article, written by defendant-appellee Richard
Behar ("Behar"), was highly critical of Scientology, which it
described as "pos[ing] as a religion" but being "really a ruthless
global scam," and narrated various instances of wrongdoing by a
number of individual Scientologists. CSI filed a complaint
alleging libel against Behar and defendants-appellees Time Inc.
Magazine Co. and its parent company Time Warner, Inc.
(collectively, "Time"). The complaint alleged as false and
defamatory the following statements from the Article:
Paragraph 40 of the Complaint
1. "[T]he church . . . survives by intimidating members and
critics in a Mafia-like manner."
2. "'Scientology is quite likely the most ruthless, the most
classically terroristic . . . cult the country has ever seen.'"
3. "Those who criticize the church journalists, doctors, lawyers
and even judges often find themselves . . . framed for fictional
crimes, beaten up or threatened with death."
Paragraph 45 of the Complaint
4. "Occasionally a Scientologist's business antics land him in
jail. Last August a former devotee named Steven Fishman began
serving a five-year prison term in Florida. His crime: stealing
blank stock confirmation slips from his employer, a major
brokerage house, to use as proof that he owned stock entitling him
to join dozens of successful class-action lawsuits. Fishman made
roughly $1 million this way from 1983 to 1988 and spent as much as
30% of the loot on Scientology books and tapes."
"Scientology denies any tie to the Fishman scam, a claim
strongly disputed by both Fishman and his longtime psychiatrist,
Uwe Geertz, a prominent Florida hypnotist. Both men claim that
when arrested, Fishman was ordered by the church to kill Geertz
and then do an 'EOC,' or end of cycle, which is church jargon for
Paragraph 52 of the Complaint
5. "One source of funds for the Los Angeles-based church is the
notorious, self-regulated stock exchange in Vancouver, British
Columbia, often called the scam capital of the world."
6. "Baybak, 49, who runs a public relations company staffed with
Scientologists, apparently has no ethics problem with engineering
a hostile takeover of a firm he is hired to promote."
7. "'What these guys do is take over companies, hype the stock,
sell their shares, and then there's nothing left. . . .'"
". . . 'They stole this man's property.'"
Paragraph 58 of the Complaint
8. "THE LOTTICKS LOST THEIR SON, Noah, who jumped from a Manhattan
hotel clutching $171, virtually the only money he had not yet
turned over to Scientology. His parents blame the church and
would like to sue but are frightened by the organization's
reputation for ruthlessness."
9. "His death inspired his father Edward, a physician, to start
his own investigation of the church. 'We thought Scientology was
something like Dale Carnegie,' Lottick says. 'I now believe it's
a school for psychopaths. Their so-called therapies are
manipulations. They take the best and brightest people and
10. "It was too late. 'From Noah's friends at Dianetics' read the
card that accompanied a bouquet of flowers at Lottick's funeral.
Yet no Scientology staff members bothered to show up."
Paragraph 62 of the Complaint
11. "The next month the Rowes flew to Glendale, Calif., where
they shuttled daily from a local hotel to a Dianetics center. 'We
thought they were brilliant people because they seemed to know so
much about us,' recalls Dee. 'Then we realized our hotel room
must have been bugged.' After bolting from the center, $23,000
poorer, the Rowes say, they were chased repeatedly by
Scientologists on foot and in cars."
Paragraph 67 of the Complaint
12. "In a court filing, one of the cult's many entities the
Church of Spiritual Technology listed $503 million in income
just for 1987."
In June of 1992, the defendants moved to dismiss the
complaint on the grounds that the statements, none of which
mentioned CSI by name, were not of and concerning CSI. On
November 23, 1992, the district court granted the motion to
dismiss in part, finding that certain of the statements complained
of could not be read as referring to CSI. Church of Scientology
Int'l v. Time Warner, Inc., 806 F.Supp. 1157 (S.D.N.Y. 1992)
("Time I"). Specifically, the court found that parts of statement
4 and all of statements 6, 7, 11, and 12 could not reasonably be
considered to be of and concerning CSI. See id. at 1162-64.
Defendants then answered the complaint, and Behar asserted
counterclaims against CSI for harassment and violation of the Fair
Credit Reporting Act, 15 U.S.C. . 1681. The parties agreed to
focus discovery on the issue of actual malice and to defer
discovery on the issue of truth and falsity.
After two and a half years of discovery, the district court
granted summary judgment to defendants as to all of the remaining
statements, except for statement 5, on the grounds of lack of
actual malice. Church of Scientology Int'l v. Time Warner, Inc.,
903 F.Supp. 637, 642-44 (S.D.N.Y. 1995) ("Time II"). On
reconsideration, the district court granted summary judgment to
defendants on statement 5, that the Vancouver Stock Exchange (the
"VSE") was one source of funds for the church (the "VSE
statement"), based on the subsidiary meaning doctrine, and
dismissed the complaint. Church of Scientology Int'l v. Time
Warner, Inc., 932 F. Supp. 589, 595 (S.D.N.Y. 1996) ("Time III").
CSI then moved for an order modifying the district court's
opinion in Time III, arguing that it was now stating a claim for
nominal damages, for which it did not need to prove actual malice.
The district court declined to address the merits of the claim
because it found CSI's motion to be a procedurally defective
motion for reargument. Church of Scientology Int'l v. Time
Warner, Inc., No. 92 Civ. 3024, 1997 WL 538912, at *2 (S.D.N.Y.
Aug. 27, 1997) ("Time IV").
On September 9, 1997, CSI moved for leave to amend the
complaint to assert a claim for nominal damages premised on a
finding that the disputed statements were demonstrably false. The
district court denied the motion, holding that allowing CSI to
amend its complaint five years after it brought the action, and
after summary judgment had been granted against it, would be
unduly prejudicial to the defendants. Church of Scientology Int'l
v. Time Warner, Inc., 1998 WL 575194, at *3 (S.D.N.Y. Sept. 9,
1999) ("Time V"). The district court also held that amendment
would be futile, since a public figure claiming even nominal
damages is still required to demonstrate actual malice under New
York Times Co. v. Sullivan, 376 U.S. 254, 297-98 (1964). See Time
V, 1998 WL 575194, at *4-5. Although Behar's counterclaims were
still pending, the parties agreed that these claims would be
dismissed without prejudice, on the understanding that they could
be refiled should the complaint be reinstated. CSI moved for the
district court to enter a final judgment dismissing its complaint.
The court granted the motion, Church of Scientology Int'l v. Time
Warner, Inc., No. 92 Civ. 3024, 1999 WL 126450, at *2 (S.D.N.Y.
Mar. 9, 1999), and this appeal followed.
On appeal, CSI challenges the district court's rulings in
Time I through Time V on the grounds that the district court (1)
improperly ruled that portions of the Article's allegedly
defamatory statements were not of and concerning CSI, (2)
improperly disregarded CSI's evidence that the statements were
made with purposeful avoidance of the truth, (3) committed plain
error in dismissing the VSE statement under the subsidiary meaning
doctrine, and (4) erred in refusing to permit CSI to pursue a
claim for nominal damages premised on a finding of falsity. CSI
has not appealed the district court's decision with respect to
statements 11 and 12.
Libel, a method of defamation expressed in writing or print,
is a common law cause of action and applies separate standards to
plaintiffs who are private individuals and those who are public
figures. See Celle v. Filipino Reporter Enters., Inc., 209 F.3d
163, 176 (2d Cir. 2000). CSI concedes that it is a public figure;
therefore to prevail it must show that the statements it complains
of were (1) of and concerning CSI, (2) likely to be understood as
defamatory by the ordinary person, (3) false, and (4) published
with actual malice, that is, either knowledge of falsity or
reckless disregard of the truth. See id. In contrast, a private
plaintiff need only prove that false and defamatory statements of
and concerning the plaintiff were made with gross negligence. See
Karaduman v. Newsday, Inc., 51 N.Y.2d 531, 539 (1980).
Of these inquiries, the first two should ordinarily be
resolved at the pleading stage, while resolution of the falsity
and actual malice inquiries typically requires discovery. In this
case, we hold that CSI has failed to establish actual malice as to
the statements identified in paragraphs 40, 45, and 58 of the
Complaint, and as a result, CSI's claims based on the remaining
statements, contained in paragraph 52, are barred by the
subsidiary meaning doctrine. Accordingly, we do not reach the
question whether any of these statements is "of and concerning"
Under New York Times, a public figure plaintiff must prove
that an allegedly libelous statement was made with actual malice,
that is, made "with knowledge that it was false or with reckless
disregard of whether it was false or not." New York Times, 376
U.S. at 280. This showing must be made by clear and convincing
evidence. See Celle, 209 F.3d at 183. Despite its name, the
actual malice standard does not measure malice in the sense of ill
will or animosity, but instead the speaker's subjective doubts
about the truth of the publication. See Masson v. New Yorker
Magazine, Inc., 501 U.S. 496, 510 (1991) ("Actual malice under the
New York Times standard should not be confused with the concept of
malice as an evil intent or a motive arising from spite or ill
will."). If it cannot be shown that the defendant knew that the
statements were false, a plaintiff must demonstrate that the
defendant made the statements with reckless disregard of whether
they were true or false. The reckless conduct needed to show
actual malice "is not measured by whether a reasonably prudent man
would have published, or would have investigated before
publishing," St. Amant v. Thompson, 390 U.S. 727, 731 (1968), but
by whether there is sufficient evidence "to permit the conclusion
that the defendant in fact entertained serious doubts as to the
truth of his publication," id.
The St. Amant Court found the following factors to be
relevant to a showing that the defendant harbored actual malice:
(1) whether a story is fabricated or is based wholly on an
unverified, anonymous source, (2) whether the defendant's
allegations are so inherently improbable that only a reckless
person would have put them in circulation, or (3) whether there
are obvious reasons to doubt the veracity of the informant or the
accuracy of his reports. See id. at 732.
CSI argues that Behar had a negative view of Scientology, and
that his bias pervaded his investigation and caused him to publish
false and defamatory statements about CSI. The district court
found that the evidence could not support such a claim. The
district court found that Behar's alleged bias would be relevant
to show a purposeful avoidance of the truth if it were coupled
with evidence of an extreme departure from standard investigative
techniques. The district court concluded, however, that
"plaintiff has failed to demonstrate the correlative circumstance
of inadequate investigation to make its evidence of bias probative
of actual malice, rather than probative of lack thereof," Time
II, 903 F. Supp. at 641, noting also that the "speaker's belief in
his statements, even his exaggerations, enhances, rather than
diminishes, the likelihood that they are protected," id. We
believe that the district court properly applied the actual
malice standard, and turn to the statements themselves.
The "Intimidation" Statements. The district court found
that Behar had relied on (1) "affidavits from former high-ranking
Scientologists, newspaper and periodical articles, interviews and
personal experience, and published court opinions" to support
statement 1 (mafia-like intimidation), (2) the judgment of
Cynthia Kisser, an executive director of an organization
dedicated to the study of cults, which was likely to be given
credence by Behar in view of her knowledge and experience, for
statement 2 ("classically terroristic"), and (3) Behar's personal
experience and research to support statement 3 (retaliation
against journalists, lawyers, doctors and judges). Id. at 642-
43. In view of the evidence in the record of Behar's extensive
research, we agree with the district court's conclusion that no
reasonable jury could find that defendants either knew or
entertained serious doubts that these statements were false.
The Fishman Statements. The part of the Fishman statement
that pertained to Fishman's stock scam (paragraph 45, statement
4) was not published with actual malice. Behar interviewed
Steven Fishman, Robert Dondero, the Assistant United States
Attorney that prosecuted Fishman for stock fraud, and Marc Nurik,
the attorney that represented Fishman. As the district court
observed, Behar relied on these interviews. See id. at 644. He
had no reason to have serious doubts about the truth of the
information given him by the prosecuting attorney, the defense
attorney, and the defendant in the case.
Nor were the murder-suicide allegations published with
actual malice. Behar interviewed Fishman's psychiatrist, Uwe
Geertz, and Vicki Aznaran, a former high-ranking
Scientologist. CSI argues that Behar had evidence that Fishman's
claims that the church had ordered him to kill Dr. Geertz and
commit suicide were false since Fishman had previously tried to
frame the church with similar charges by staging a phony death
threat 18 months earlier. While this does raise questions about
whether Fishman's account was reliable, the evidence in the
record shows that Behar had considerable corroboration of
Fishman's account, including the testimony of Dr. Geertz that he
had reported the death threat referred to in the Article to the
FBI, and Dr. Geertz's testimony in Fishman's criminal trial. In
addition, Behar had reason to discount the relevance of the
earlier threat based on his interview with Nurik, who told him
that he believed Fishman had been manipulated into staging the
fake death threat by Scientologists; Dr. Geertz's appraisal of
the two threats; and Behar's own awareness of similarly
convoluted plots to frame others. In any event, the Article does
not present Fishman's claim as undisputed fact, but rather makes
clear that Scientology denies the truth of Fishman and Dr.
Geertz's charges. In view of the extensive research Behar
conducted, and the fact that the death threat was accurately
reported as an allegation, we agree with the district court that
no reasonable jury could find that Behar had published the
statements about the stock scam or the murder-suicide allegation
with purposeful avoidance of the truth.
The Lottick Statements. The district court found that
statements 8, 9, and 10 (concerning the Lotticks and the loss of
their son Noah) could not be found to have been published with
actual malice because the Lotticks were not obviously lacking in
credibility, their statements were not inherently improbable, and
Behar had investigated the case thoroughly. See id. at 643. We
agree with the district court that CSI's complaints that Behar
included some information and not other information, for example,
by not interviewing Noah Lottick's roommate, amount to no more
than "minor omissions in investigation, from which no inference
of purposeful avoidance of the truth could reasonably be drawn,"
id. Any such omissions are insignificant when viewed against the
backdrop of Behar's investigation as a whole: he interviewed Noah
Lottick's parents, his friends and teachers, reviewed the police
report of his death, and was twice refused an interview by the
director of the Dianetics Center in Hackensack, New Jersey, that
Noah was attending.
The VSE Statements: Subsidiary Meaning. The district court
ultimately dismissed the VSE Statement based on the subsidiary
meaning doctrine established by this court in Herbert v. Lando,
781 F.2d 298 (2d Cir. 1986). See Time III, 932 F. Supp. at 595.
In Herbert, we held that when a "published view" of a plaintiff
is not actionable as libel, other statements made in the same
publication are not "actionable if they merely imply the same
view, and are simply an outgrowth of and subsidiary to those
claims upon which it has been held that there can be no
recovery." Id. at 312. Relying on the Supreme Court's holding
in Masson v. New Yorker Magazine, Inc., 501 U.S. 496 (1991), that
the related "incremental harm" doctrine is not a creature of
federal constitutional law, CSI argues that (1) the subsidiary
meaning doctrine can be applied here only if it is part of the
relevant body of state law, and (2) neither California nor New
York law, one of which presumably applies to this case,
recognizes this doctrine. Because the subsidiary meaning
doctrine is merely a gloss on constitutional actual malice, we
The incremental harm doctrine at issue in Masson reasons
that when unchallenged or non-actionable parts of a publication
are damaging, an additional statement, even if maliciously false,
might be non-actionable because it causes no appreciable
additional harm. See Herbert, 781 F.2d at 310; Simmons Ford,
Inc. v. Consumers Union, 516 F. Supp. 742, 750 (S.D.N.Y. 1981)
(holding that, in the context of an article evaluating
plaintiffs' new electrical car and rating it "Not Acceptable" for
a range of unchallenged reasons, a portion of the article wrongly
implying that the car did not meet federal safety standards
"could not harm [plaintiffs'] reputations in any way beyond the
harm already caused by the remainder of the article."). In
Masson, the Supreme Court
reject[ed] any suggestion that the incremental harm
doctrine is compelled as a matter of First Amendment
protection for speech ... [because t]he question of
incremental harm does not bear upon whether a defendant
has published a statement with knowledge of falsity or
reckless disregard of whether it was false or not.
Masson, 501 U.S. at 523.
By contrast with the incremental harm doctrine, the
subsidiary meaning doctrine does "bear upon" whether a defendant
has acted with actual malice. In Herbert, for example, this
court held that nine of eleven allegedly libelous statements were
not actionable because they were not maliciously published; the
published statements were backed by evidence that was not known
to be false, and as to the reliability of which the defendants
had not shown reckless disregard. See Herbert, 781 F.2d at 305-
07. Because the defendants' overall "view" of the plaintiff
rested on such evidence, we held that they "could not be said to
have had actual malice in publishing [it]." Id. at 311. In
light of this conclusion, it would have been illogical to hold,
based on other statements, that the plaintiffs in fact had such
actual malice. See id. (holding that recovery was barred as to
an "incorrect" statement in part because "given the amount of
other evidence supporting this view, the [defendants] did not
publish this view with actual malice"); id. at 312 (holding that
recovery was barred as to another statement because "[w]e have
already held ... that the [defendants] did not have actual malice
in publishing their view"). To avoid that contradiction, we
enunciated the subsidiary meaning doctrine. It follows that the
doctrine, as articulated in Herbert and as relevant here,
"bear[s] ... upon" whether a "view" was published with actual
malice. It is thus a question of federal constitutional law, not
state law, and it remains good law after Masson.
Our holding in Herbert is still the law of this Circuit, and
we therefore conclude that the district court properly held that
the VSE Statement was subsidiary in meaning to the larger thrust
of the Article, which asserted that "Scientology, rather than
being a bona fide religion, is in fact organized for the purpose
of making money by means legitimate and illegitimate." Time III,
932 F. Supp. at 595. We believe that the import of statements 6
and 7, which were included in the Article's VSE sidebar, is also
subsidiary to the general message of the Article, and therefore
CSI's claims with respect to those statements were properly
We have considered CSI's remaining arguments and find them
to be without merit.
We find that the challenged statements in the Article were
not published with actual malice or were subsidiary in meaning to
statements made without actual malice. The judgments of the
district court are affirmed, and the complaint is dismissed.
Research resources on Scientology