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FOR THE COUNTY OF LOS ANGELES

DEPARTMENT NO. 57        HON. PAUL G. BRECKENRIDGE, JR., JUDGE

  (See Appearances page.)

VOLUME 4

Pages 431 - 597

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APPEARANCES:

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I N D E X

W I T N E S S E S

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THE COURT: Good morning, Counsel.

MR. LITT: Good morning.

MR. HARRIS: Good morning.

MS. DRAGOJEVIC: Good morning.

MR. FLYNN: Good morning, Your Honor.

THE COURT: Plaintiff ready to proceed?

MR. LITT: Yes, we are, Your Honor.

THE COURT: Well --

MR. HARRIS: I should introduce myelf. I am

Robert N. Harris, H-a-r-r-i-s, and I have been associated

in representing the Church of Scientology of California.

THE COURT: All right. Defense ready to proceed?

MR. FLYNN: We are, Your Honor.

We filed a motion for costs which we are not

going to present at the present time.

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THE COURT: I have read and considered the motion. I

am not going to rule on it at this time. I'll simply it off

calendar -- on second thought, I won't put it off calendar.

I'll deny it without prejudice. I'm not disposed to do that.

All right. Who is going to be the counsel

in presenting this thing for the plaintiff? Let's try to

get our act organized.

MR. LITT: It will vary, Your Honor. For purposes of

the opening, I'll present an opening on behalf of both plaintiffs.

Our plan with respect to direct, one of the other counsel

will present the direct on this particular witness.

THE COURT: The lawyer that conducts the direct will

be the only lawyer that will be permitted to object on

cross-examination or argue to the court on rulings. I

don't want a triumverate of lawyers arguing each objection

for one side or the other. It is the same rule for the

defense as well.

MR. LITT: That is fine with one exception that I

would like to make clear, Your Honor. One of the reasons

there is separate counsel for the church and Mrs. Hubbard

is we feel the way the case is framed, there are separate

issues that apply to each. We'll designate one counsel

for each plaintiff to act. And we'll not -- essentially the

person who handles the direct will be the main lawyer on

the plaintiff's side to take responsibility for that. But I

don't want to be precluded or have Mr. Harris precluded

from being able to act with respect to the particular client

that is being represented on a matter that comes up. That is

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MR. FLYNN: I would like to raise one point on procedure:

In terms of presentation of the evidence, it is my under-

standing that the plaintiff should go first; present its case

and then the intervenor should proceed and present her

case.

THE COURT: I'll let the plaintiffs -- much of this

evidence would overlap anyway. I don't really see that we

should try to departmentalize the evidence. I'll let the

plaintiff present their evidence as they see fit.

Are you going to be conducting the examination

of witnesses, Mr. Flynn?

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MR. FLYNN: I am, Your Honor. What I had in mind,

maybe to clarify a little more, in other words, rather than

the plaintiff proceed, the defendant conduct the cross, the

intervenor proceed and the defendant conduct the cross, I

was wondering what the court had in mind?

Is the plaintiff going to proceed with the

witnesses, then the intervenor examine the witnesses and then

me?

THE COURT: Yes. If there is to be more than one --

MR. LITT: On direct that is not a problem, Your Honor.

We don't intend to have Mr. Harris do a direct and then me

do another direct or a cross or whatever. So that is not

a problem.

Obviously on cross-examination of Mr. Flynn's

witnesses, depending on the circumstances, both counsel for

the plaintiffs may examine at that stage, but in terms of

our case that is not our intention.

THE COURT: If you are going to call the witness,

Mr. Litt, then you can conduct your examination, and I will

ask Mr. Harris if he has any additional questions he wants

to elicit on direct examination at this point because the

interests are basically allied, and than defense will have

an opportunity to cross-examine, and there will be rebuttal.

Are you going to be --

MR. FLYNN: I am, Your Honor. I will conduct the

entire trial unless I am called as a witness, in which event

Miss Dragojevic will conduct that part of the trial when I

am on the witness stand.

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THE COURT: What about these exhibits which have been

identified by the parties as exhibits they, at least initially

intend to use in this trial; are they up here? Shouldn't we

order these up here now at this time so we have them available

or are we going to be needing them?

MR. FLYNN: I think they should be brought up.

MR. LITT: It remains our intention, your Honor,

not to introduce any documents that are under seal, at least

until such time as that court has admitted them by the defendant

over our objection. The court is obviously aware of the

reasons for that, so we don't see the necessity of them at

this time, at least.

I don't know, I suppose Mr. Flynn may try to

open the door from the beginning by trying to bring them in

through our witnesses.

THE COURT: Well, that may be cross-examination.

I don't know. With reference to some of these exhibits, I

don't know.

MR. FLYNN: There will be, Your Honor.

THE COURT: In what form have these been seprated

out from the bulk of the documents? Are they in a separate

box now?

MR. FLYNN: They are.

THE COURT: Both the plaintiffs' and the defendants'

additional, are they in envelopes as I understand it or

something?

MR. FLYNN: They are segregated by plaintiff and by

defendant, and at the end of the day yesterday, I believe, the

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THE COURT: Let's order those exhibits brought up.

MR. LITT: Your Honor, has the defendant prepared an

exhibit list of the exhibits that have been designated?

(Mr. Flynn hands document to Mr. Litt.)

THE COURT: Have you got a copy for me and for the

clerk?

MS. DRAGOJEVIC: Yes, Your Honor.

THE COURT: Well, the clerk wants a copy obviously

and I should have a copy.

FLYNN: We will make another, Your Honor.

THE CLERK: Do you want them all?

THE COURT: I just want the ones that both sides have

identified as ones they propose to use, possibly use.

MR. FLYNN: We may not offer all of those, Your Honor.

We pulled the ones that we thought were relevant to the issues

in the case.

THE COURT: I don't understand what you have done here.

I am with you up to double Z and then you have got 3-A, 3-B,

3-C.

MR. FLYNN: In terms of since we were assigned the

letter system, we would have had to go to four A's and then

put four A's in a row on a piece of paper, so rather than put

four A's, we put 4 dash A.

THE COURT: Oh, I see. It is triple A.

The clerk can worry about that, I guess.

What about the plaintiff; did you prepare a

list?

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MR. LITT: There's already been one submitted, Your

Honor. It is no different. We submitted a separate list

of sealed documents, separate frown our regular exhibit list.

Now, the numbers that the court has on those,

they are just sequentially numbered. My suggestion would be

that any such sealed documents begin instead of with 1, with

101 and then we will have from 1 to 100.

THE COURT: That is all right.

MR. FLYNN: There is one other procedural matter,

Your Honor.

One of the first pieces of evidence that we

will introduce is the letter from Mr. Hubbard. That is

presently in the court file. The original, I don't believe,

is up here.

We can either proceed with a copy, if that is

agreeable to the court and the defendant or we can order the

original up, but the court will have to do that.

MR. FLYNN: Your Honor, we are prepared to litigate

the issue of its admissibility in terms of the availability

of Mr. Hubbard. We are in the process of subpoenaing a witness

who we think will be pretty much able to provide the court

conclusive evidence of Mr. Hubbard's availability so as to

make the document inadmissible. If the court was going to

take it de bene and until we had the opportunity to put on

our evidence with regard to his availability, that is a

possible point of procedure. But we would object to its

admissibility at this point in time if for no other reason

on the grounds of the availability of Mr. Hubbard.

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MR. LITT: Your Honor, at this point --

MR. HARRIS: Excuse me, Your Honor. Mr. Flynn used

a word which I didn't understand which was "de bene." Is that

a legal word that Your Honor is familiar with?

THE COURT: No, I wasn't sure.

MR. FLYNN: In Massachusetts it is accepting evidence

that during the pendency of the trial temporarily to be

ruled on at the end of the trial as to whether it is finally

admitted into evidence.

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THE COURT: Well, we can order up the original if we

can identify it.

Has it been marked in some other proceeding?

Has Judge Cole specially marked it?

MR. LITT: Judge Cole, as far as I know, just ordered

it placed in the file. The date of it is February, '83,

to the extent that that helps find where it is.

I have been informed that it is being held

specially by the clerk.

THE COURT: We can order it specially brought up

here alone with the other exhibits.

I don't think we should get started until we

get these exhibits up here and see what order they are in

so that the clerk can get an opportunity to see how we can

handle these up here at least mechanically.

Were you going to make an opening statement,

gentlemen?

MR. LITT: Yes, Your Honor.

THE COURT: Okay. Let's take our recess until we get

these exhibits up here.

(Recess.)

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THE COURT: All right. In the case on trial, let

the record reflect that all counsel are present.

The record should reflect that apparently all

the exhibits identified by the parties are now in court

and are available to the parties if and when there is a

request for such.

Do the plaintiffs desire to make an opening

statement?

MR. LITT: Yes.

THE COURT: You may do so, Mr. Litt.

MR. LITT: Your Honor, I hope to make this opening

statement brief. One advantage of having waived a jury is

that I don't have to explain to the court, obviously, how

some of the evidence works. But I do want to summarize

for the court the evidence that we'll present which will

establish that Mr. Armstrong has committed the torts which

we have claimed in the complaint and which will establish

that we are entitled to receive back the originals and copies

of all of the materials presently under seal.

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This case can be described in a brief way as

a story of the betrayal of a sacred trust held by Gerald

Armstrong who was entrusted by the Church of Scientology to

care for the very private papers and archives held by the

church, mainly composed of the private papers of L. Ron Hubbard,

also of many private papers of Mary Sue Hubbard and of the

church itself.

It is the story of how Mr. Armstrong took

these papers, many originals and copies of these papers,

gave then to Michael Flynn for the purpose of using them to

attack the Hubbards, to invade their privacy, and in an

effort to discredit by using their most personal and private

materials.

L. Ron Hubbard, as the court is aware, is the

revered founder of the religion of Scientology, and within

Scientology he is revered as the man who has developed the

religion which is followed by millions of people around the

world.

He and Mary Sue Hubbard, who is present in

court today with us, have been married for over 30 years.

Mr. Hubbard presently is in seclusion. His whereabouts are

not known. He has been in seclusion for the past four years

and he is not personally available.

For many years Mary Sue Hubbard held a post

within the Church of Scientology known as the controller post,

and I will explain that more. I just want to briefly cover

the parties and the actors so that we are all clear on who

they are.

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The Church of Scientology of California,

which is the other plaintiff along with Mrs. Hubbard, is a

religious corporation which was founded in 1954 and bases

itself upon the philosophy and religious views of L. Ron Hubbard

It is that church of which Mr. Armstrong was

a staff member for the period when he held the post of

archivist. When Mr. Armstrong held that post, he believed

in Scientology, was a dedicated member of the Church of

Scientology. Later after he left the church, he went and

obtained copies of the materials that he had gathered as I

have described.

Michael Flynn, although not a party of this

action, is an important actor in the action. Mr. Flynn is

involved in extensive litigation throughout the United

States in suing Church of Scientology, L. Ron Hubbard and

Mary Sue Hubbard.

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He is the man to whom Mr. Armstrong gave these

private papers. He gave them to him so that Mr. Flynn

could use them in the way that I described previously, in an

antagonistic way.

Mr. Flynn is a self-described antagonist of the

church and of the Hubbards. And Mr. Flynn has millions of

dollars at stake in this litigation. He represents plaintiffs

who are suing for many millions of dollars.

The act of giving these materials to

Mr. Flynn was in furtherance of an effort to use these -- to

gain these millions.

The documents themselves which are under seal,

which are the subject of this action, encompass approximately

8- to l0,000 pages. There are many private materials,

including letters between Mr. and Mrs. Hubbard, letters

between Mr. Hubbard and his first two wives, letters between

Mr. Hubbard and his parents, letters from his parents to

Mr. Hubbard, and to Mrs. Hubbard, and material relating to

Mr. and Mrs. Hubbard's children; a premarital agreement

between Mr. and Mrs. Hubbard; private journals and diaries;

letters to attorneys; internal church matters, business

correspondence, and a variety of other personal and private

materials.

The archives from which these materials came

have a value that in straight economic terms -- which is not

their only value from the church's and from the Hubbard's

point of view -- that is in the millions of dollars.

The materials taken have a value that is in the

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unpublished manuscript carbon which by itself has a value

which is hard to calculate which is a book called Excalibur

which is legendary within Scientology and has never been

published and considered the first writing of Mr. Hubbard on

the subject of the spirit.

Mr. and Mrs. Hubbard were married in 1952. And

the story of these materials in some ways begins when they

packed up materials at the time that they were living in

Washington D.C. which was in approximately 1959; the Hubbards

moved around a great deal.

In 1959 they left the United States and went

abroad. At this point Mrs. Hubbard personally packed the

private possessions that she and her husband had collected

over the years including many materials which were her

husband's from prior to their marriage. These were stored

in Washington D.C. and they were stored there for some 17 years

or so until the middle to late '70's when the materials were

moved from the storage to Church of Scientology facilities;

subsequently to facilities called Gilman Hot Springs.

They were stored in areas that were known as

private storage of the Hubbards. It was called R storage,

R referring to Ron, Mr. Hubbard. Not only did it have the

various -- many of the various private materials that I have

described, it had furniture, clothing, and a whole range of

private possessions of all types that were maintained there.

That is the origin of one of the sets of materials under seal

as I'll further describe.

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In addition there is a set of materials that

runs from the mid 1960's to the 1970's that were gathered

up from England. These mere materials of a similar nature,

private materials of the Hubbards that had been gathered

over the years that they had spent primarily in England.

They were eventually brought aboard a ship

called the Apollo which was a ship that the Hubbards and

many Scientologist spent several years on. These materials

at the time that the ship finally stopped sailing, which

was in approximately 1975, they were brought from the ship

and was stored with the church under Mrs. Hubbard's direct

control.

These materials were what is known as the

controller's archives, as I mentioned before.

Mrs. Hubbard held the Scientology post of

controller which is not a financial position as one might

think in terms of determining corporations, that it was a

post that involved coordinating external affairs and the

internal management of the churches. There are many private

materials from these controller archives, many originals

which have ended up before the court. And in addition,

there are a variety of materials from other files, personal

files maintained within various church organizations concerning

the Hubbards.

Mr. Armstrong joined Scientology in 1969.

And he held a variety of positions which I will not detail

except to say that in early 1980 he sought the post to gather

up materials relating to Mr. Hubbard.

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He requested within the church apparatus and

within the Scientology structure that he be permitted to

hold this post and he was assigned to this post. The

function of this post was to gather and preserve materials

relating to Mr. Hubbard.

Mr. Armstrong set about gathering up materials,

many of which I have already described. These materials

were, in fact, we will demonstrate not known to Mrs. Hubbard

and from what we can determine to Mr. Hubbard to, in fact,

be taken by anyone. Mrs. Hubbard, who was supposed to be

told about activities relating to her and her husband's

storage, was not informed that Mrs. Hubbard -- I am sorry,

that Mr. Armstrong was gathering the private and personal

materials that had been stored by them over the years, nor

would she have given her permission for Mr. Armstrong to

do so.

Nonetheless we would not contend that within the

church this was not known and we do not contend that what

Mr. Armstrong did in and of itself in taking the materials

and gathering them was wrongful. Mr. Armstrong put these

materials together at a Church of Scientology facility at

what is called the Cedars Complex which is where they were

moved to. He gathered up the materials from Gilman Hot

Springs, some 25-or-so boxes. He moved them to church

facilities at the Cedars Complex. He organized them. He

took extreme precautions to maintain their confidentiality,

their security and their safety. He was provided church

moneys to do so. He was provided church moneys to purchase

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He put these materials and organized them into

various binders. The doors were always locked. It was

extremely difficult to get access. Normal church staff

members could not have access to this. Only a very small

number of people could have access because it was recognized

that these were private and confidential papers and that

they were very valuable papers and that they were to be

treated with the greatest care.

Approximately sometime in late 1980 or in early

1981 Mr. Armstrong got from the controller's archives a

small number of materials with Mrs. Hubbard's approval.

These controller's archives were materials for which there

was an archivist in charge of them who will testify, and he

had been informed by Mrs. Hubbard that in these materials,

which had come from the ships originally and then had been

added to their, were what were rightfully archive materials

and there were also personal materials that were not

rightfully archive materials that were personal storage

materials.

Mr. Armstrong sought to obtain some materials

for what Mrs. Hubbard thought was a museum, materials of

historical interest because there was a plan to develop a

museum concerning Mr. Hubbard.

Mr. Armstrong contacted the archivist who was in

charge of the controller's archives whose name was Tom Vorm

and requested some materials.

Mr. Vorm sent to Mrs. Hubbard a list of the

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review to determine whether or not they had been provided to

Mr. Armstrong. After she reviewed them, Mrs. Hubbard

approved those and, as the court will see, the list of those

materials are materials of the type that would be of use to

a museum or of general historical interest.

In the same time frame, approximately in the

fall of 1980, a contract concerning a biography of L. Ron

Hubbard was entered into. This contract was entered into

between a corporation called AOSH-DK which was a

Scientology -- not a Church of Scientology of California

corporation, but a Scientology corporation located in

Denmark, and Omar Garrison who was to be the biographer.

This biography project and the contract setting

it up included the fact that the biography to be drafted by

Mr. Garrison was subject to the approval of the publisher,

and it was the understanding of the parties that that would

include submission to Mr. Hubbard and to Mrs. Hubbard for

review and approval. If the biography was not satisfactory,

there was a provision that the book would not be published

and Mr. Garrison would be paid a certain amount of money if

an agreement could not be reached as to what the text of the

biography should be and what should be in it and what should

not be in it. The biography contract contained a clause

that in writing the biography, there shall be no invasion of

anyone's privacy.

Now, after this Denmark corporation entered into this

agreement, it contacted the Church of Scientology of

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by the way Mrs. Hubbard was generally aware of, she was not

involved in any negotiations but she was kept apprised of

what was going on in general with respect to the contract.

The Denmark company, the AOSH-DK Denmark corporation had

agreed that it would make an effort to provide various

previously unavailable materials concerning Mr. Hubbard and

provide a research assistant and an office for Mr. Garrison

to work out of.

A letter was then written to the Church of

Scientology of California requesting that the the Church of

Scientology of California provide an office and provide a

researcher. The Church of Scientology of California agreed

and passed a Board minute pursuant to that agreement.

Mr. Armstrong was then assigned by the Church of

Scientology of California to assist Mr. Garrison. Indeed it

was contemplated even before that that Mr. Armstrong would

assist Mr. Garrison if the biography, in fact, developed.

He proceeded to copy many materials from the

materials that he had gathered and provide them to

Mr. Garrison. He provided these to Mr. Garrison on a

confidential basis. That is Mr. Garrison's testimony. That

is Mr. Armstrong's testimony. He considered the materials

extremely private. In fact, Mr. Garrison describes the

materials; he said that if he had to give a one-line

description, they would be the private papers of L. Ron

Hubbard.

The materials which Mr. Armstrong eventually

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materials of Mrs. Hubbard's end of the church. These

materials were given to Mr. Garrison for one purpose and one

purpose only, for use in drafting the biography and for no

other purpose. Both Mr. Garrison and Mr. Armstrong attest

to that.

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Mr. Armstrong concedes that his sole authority

as he perceived it was to compile the archives and provide

materials to Mr. Garrison and that he had no authority to do

anything else with them.

We'll show that these materials that he gathered

up, that there were policies with respect to how to handle

them; that originals could not be removed; although

Mr. Armstrong in fact did so. And we'll show that it was

the understanding of all of the parties and every person who

is before the court and every party that had anything to do

with any of these transactions that these materials were

completely private; that they would be returned at the end

of Mr. Garrison's work on the biography; that Mr. Armstrong

had no right to them and that the whole biography relationship

was based on a long working relationship of some 10 years

in which, as Mr. Garrison described it, there was a high

degree of mutual trust based upon this prior working relationship.

Literally tens and tens of thousands of pages

of these private materials were provided by Mr. Armstrong

to Mr. Garrison, most of it from the Hubbard's private files;

included in them were materials that Mr. Armstrong obtained

after Mrs. Hubbard had left her Scientology post of controller.

Mrs. Hubbard left that post some time in the

middle of 1981. And the controller archives, which contained

both materials relating to the subjects of Scientology and

Dianetics, archives that were lodged with Mr. Vorm which

were taped materials and handwritten manuscript materials of

Mr. Hubbard as well as these materials that I have described

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these materials be given to him. He said they were urgently

needed for the biography.

Mr. Vorm was most reluctant to give them to

him. He attempted, but was unable to reach Mrs. Hubbard.

He then inquired of the person who held the

post of controller that Mrs. Hubbard had previously held

and he was told to provide them to Mr. Armstrong and he did

so; although with many things, he still refused to provide

the original copies and only provided Xerox copies.

He was assured by Mr. Armstrong that these

materials would not be used in a way that would violate the

privacy of them and that Mr. Garrison needed them to review,

but that there should be no concern about using them in a

way that would intrude into the Hubbard's privacy.

So they were given to him. Many of the originals

which are under seal with this court come from those

material which Mr. Armstrong obtained after Mrs. Hubbard was

no longer acting as the controller.

In approximately December of 1981 Mr. Armstrong

reached a decision to leave the Church of Scientology.

According to his testimony, he reached that decision by

approximately December 1st.

For the next 12 days he engaged in an extra-

ordinary range of activities of copying as many materials

as he could to provide to Mr. Garrison. And in a 12-day period

of December 1 to December 12, he flooded Mr. Garrison with

thousands of pages of additional materials.

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When Mr. Armstrong left there was at that time

many originals which either was taken by his at that time

or which he bad gives to Mr. Garrison -- it is not completely

clear -- but which originals were never permitted to have

been given to Mr. Garrison for, among other reasons, their

extraordinary value and the fact that Mr. Armstrong's

function was to gather up originals, not to give anybody

else the originals.

After Mr. Armstrong left the church in December,

1981 he continued to have contact with Mr. Garrison. And

he continued to have access to these materials. And he,

apparently, had many of then with him in his possession.

In early May, 1982, without discussing the

matter with Mr. Garrison, Mr. Armstrong went to Clearwater,

Florida and met with Michael Flynn.

He took with him an original letter from

Mrs. Hubbard to Mr. Hubbard from the early 1950's which we

do not intend to introduce into evidence, but which

Mr. Armstrong has ascribed as a particularly personal

letter. And this was one of the documents that he took to

show to Mr. Flynn at that tine.

Mr. Flynn was shown the letter and he read the

letter.

Mr. Flynn paid for Mr. Armstrong's trip to

Clearwater, Florida.

At the same time Mr. Armstrong told Mr. Flynn

about the archives materials and what was in them.

Within a period of approximately three weeks,

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he there met with Armstrong again.

In the interim Mr. Armstrong, after returning

from Clearwater, went to Mr. Garrison and persuaded

Mr. Garrison to let him have copies of many materials from

these archives which had been provided originally to Mr. Garrison

by Mr. Armstrong when he was acting for the church on the

archives post.

He told Mr. Garrison that he needed the documents

for evidence, although there was no suit against him by

anyone.

In his first conversation with Mr. Garrison

on this subject he requested letters between Mr. Hubbard

and his first wife, letters between Mr. Hubbard and Mary Sue

Hubbard and naval records of Mr. Hubbard. He made copies

of these materials.

He met with Mr. Flynn; he provided him at

the meeting at the Bonaventure Hotel -- he brought him

approximately 1,000 pages of materials; then copied them

and sent them to him.

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The court should recall, of course, that this

is not going to seek the advice of any lawyer. This is going

to seek the advice or to provide materials, which is the real

situation, to the attorney in the United States who is more

active in litigation against various Church of Scientology

and against the Hubbards than any other lawyer in the country.

Mr. Armstrong, when he went to see Mr. Flynn,

knew that Mr. Flynn represented a variety of plaintiffs.

He agreed with Mr. Flynn that he would act as a witness for

Mr. Flynn. He agreed that Mr. Flynn could use the materials

that he was providing in his other litigation. Mr. Armstrong

prepared affidavits for use in suits in which he reviewed

and used the private materials that he had not taken originals

or copies of and given to Mr. Flynn, and when he did all

of this by his own testimony he did not believe that it was

pursuant to the conditions under which he had been permitted

to gather them up.

In the course of the next approximately three

months or so Mr. Armstrong sent to Michael Flynn approximately

3,000 pages of original materials, sent to Contos & Bunch

approximately 2,000 pages of original materials and sent

thousands of other copies of materials as well. He was

clearly engaged in a systematic gathering up of materials.

He had free access to Mr. Garrison's materials which he

would go into and copy what he wanted and send on to Mr. Flynn

or toward the end also to Contos & Bunch.

The church made reasonable efforts to inquire

of Mr. Armstrong as to whether he was engaging in this

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sent a letter to Mr. Armstrong asking that he return

anything that had been taken while he was a church employee.

Mr. Armstrong responded that there was nothing, although

the materials under seal are original materials which

Mr. Armstrong had in his possession which were ultimately

delivered to the church and which come from the archives as

originals.

In addition, there were numerous copies. In

Mr. Armstrong's response he said nothing about the fact that

he had been copying materials or taking materials from

Mr. Garrison.

The church, concerned about the situation and

concerned about whether or not either originals or copies

of the archives materials had been taken, set about a reasonable

course of retaining private investigators through Mr. Peterson

and others to engage in surveillance of Mr. Armstrong in

an effort to determine whether or not he had archives

materials which he was not entitled to. The surveillance

was extensive and involved substantial expense suffered by

the church in an effort to recover its property.

Ultimately, as the court is aware, a temporary

restraining order and then a preliminary injunction was

issued and the materials which are now under seal were

returned pursuant to court order from the firms of

Michael Flynn and Contos & Bunch. The order required that

all materials or copies of materials from the archives be

provided to the court.

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Mrs. Hubbard learned of this whole affair only

after the court suit itself had begun. She was not aware

that any of this had occurred. She was quite upset to hear

that hers and her husband's private materials were being

gathered up and extremely upset to hear that Mr. Armstrong,

whom she had known, had not only gone into her private

storage but more to the point, then sent these materials to

Mr. Flynn.

At this time the relationship of Mr. Garrison

to this whole matter had been resolved. Mr. Garrison and

the publishing company with whom he originally entered

into a contract or successor to that contract actually,

entered into a settlement agreement. In that settlement

agreement Mr. Garrison agreed that he was not going to

publish a book. He returned all materials from the archives

that he had and he forgave any possessory claim that he

may have had or presently had with respect to any other

materials that had been provided to him in connection with

his biography research.

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The court is aware that Mr. Hubbard, who is not

available, has sent a letter expressing his wishes that

these materials be returned to the custody of the church.

We'll authenticate that letter and show that it is a genuine

letter from Mr. Hubbard.

The materials themselves are of such a range

that any description hardly begins to give a comprehension

of just how extensive and how private both from the point of

view of the Hubbards personally and from the point of view

of the church because many of the materials relate to

internal church matters or Scientology matters.

There are under seal letters from the mid-1960s;

many letters from Mrs. Hubbard to Mr. Hubbard and some from

Mr. Hubbard to Mrs. Hubbard; materials relating to the

tragic death of one of the sons of the Hubbards that

Mr. Armstrong sent to Mr. Flynn.

There is a pre-marital agreement which had never

been even discussed with other people which Mr. Armstrong

sent.

There are letters from the Hubbards' parents and

Mr. Hubbard and Mrs. Hubbard, extensive correspondence

between Mr. Hubbard and his first two wives and private

financial materials relating to that; extremely personal

journals kept by Mr. Hubbard which speak to his innermost

thoughts and which are part of the early bodies of self-

research in the development of Scientology and Dianetics

which have not been published and which he has never

provided to anyone until Mr. Armstrong took them and gave

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archives; unpublished manuscripts of extraordinary value

which Mr. Hubbard had never indicated should be published;

tax and financial records of the Hubbards; wills,

correspondence with friends, correspondence with

Scientologists, correspondence with business associates,

correspondence with attorneys; records of attorney-client

conferences. The list goes on and on. And one could spend

an hour describing the range of these materials which were

taken.

Hence, we'll establish from the evidence that we

present that Mr. Armstrong was a church employee who had

access to the private and confidential material of the

Hubbards and the church; that after leaving, knowing their

privacy, knowing their confidentiality, he wrongfully went

and obtained them for unauthorized purposes which he knew to

be unauthorized, but in fact which were not only

unauthorized, but hostile; that he took materials that he

had no right to have at that point; that he had no right to

have access to; that he took them, sent them to an

individual antagonistic of the Hubbards and the church and

did so for antagonistic reasons and in furtherance of his

scheme of collecting multi-million dollar damage claims;

that he used the materials to prepare documents in other

cases than his own case and gave the same permission to Mr.

Flynn to do so; that he was not entitled to do any of this

and that any claim he makes to justify his conduct -- we'll

not address factually those issues in this opening

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justify his conduct will be shown to be misleading and false

and which cannot be shown to justify his conduct in any way,

shape, or form.

In reality, what this conduct comes down to is

the act of voyeurs pouring through the private lives of

other people to find any and everything they can to spread

about them in an effort to discredit them in order to

collect through lawsuits large amounts of money; that it

will be shown that this supposed justification defense that

the defendant presents will come down to nothing but self-

serving vigilanteism of the worst kind.

In short, we'll show that Mr. Armstrong

converted these materials for his own use; that he

enormously invaded the privacy of Mrs. Hubbard, Mr. Hubbard

and the church and that he breached confidences that he had

been given and that he completely, disloyally, and without

justification breached his fiduciary obligation to both the

church and the Hubbards to maintain the privacy and

confidentiality of the archives materials.

THE COURT: Mr. Harris, did you have anything you

wanted to add?

MR. HARRIS: Mr. Litt was so eloquent, Your Honor,

I'll waive.

THE COURT: Mr. Flynn, do you wish to make an opening

statement at this time?

MR. FLYNN: I will, Your Honor.

Before doing so, I would like to briefly review

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parties. I'll be very, very brief.

The indispensible parties are the corporations

that Mr. Litt referred to, AOSH-DK Publications of Denmark;

New Era Publications which he did not mention, but which

Your Honor is going to find is one of the most significant

parties in this lawsuit. And the most significant party,

without doubt, is L. Ron Hubbard.

Mr. Litt told the court that final approval for

the entire biography project was predicated and given to

L. Ron Hubbard.

This court has no way of knowing how to dispose

of the interests in this lawsuit, the rights, liabilities,

and duties of any of the parties to this lawsuit without

Mr. Hubbard coming forth and giving testimony as to what

those rights, liabilities and duties are within the context

of the contracts and, specifically, the final biography

project with regard to Mr. Garrison was predicated upon

Mr. Hubbard's approval.

Since that is the unassailable fact that was

admitted by Mr. Litt, there is no evidence and there will be

no evidence before this court that Garrison didn't properly

maintain possession of the documents and could have

published them on his own; disseminated them across the

United States on his own, given them to people like

Mr. Armstrong; given them to anyone he wanted as well as

published them in the book. That final approval lay with

Mr. Hubbard.

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Mr. Hubbard is not before the court. He is an

indispensible party before the court.

There is a document under seal which

specifically states that Mr. Garrison has the right to use

the documents; create video tapes and promotional material

prior to even publishing the biography; to travel throughout

the world and publish the biography.

Since the one unassailable fact admitted by

Mr. Litt is that Mr. Hubbard's approval is required for all

of that, it will be impossible, without hearing evidence

from either the two corporations or from Mr. Hubbard as to

what should have been done with the biographical materials

that were collected by Mr. Armstrong, what should have been

done with the book and what in the future can be done with

the book, with the documents or with Mr. Armstrong's right to

publish the contents of the documents.

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There are several cases which at the conclusion

of the trial we will provide a memorandum to the court. I

am again renewing my motion for failure to join an indispensable

party. I think that the rights, liabilities and duties in

this case are governed by two contracts, two written contracts,

only one of which has been introduced, the second of which

we will call for production during the trial. All of which

require the final approval of Mr. Hubbard and with that I

will make my opening statement.

THE COURT: Well, I should rule on your motion, I

guess. For the reason previously stated, I will deny your

motion without prejudice. You can renew it later on.

MR. FLYNN: Your Honor, Mr. Litt is correct when he

states that this case involves a sacred trust. However,

the sacred trust is a trust that Mr. Armstrong owed to

himself and a trust that he owed to thousands of people who,

together with him, were victimized by L. Ron Hubbard.

It is a sacred trust that is owed to society

because of the representations made by L. Ron Hubbard about

himself which representations were disseminated and promoted

in a very commercial manner to obtain money. Indeed the

evidence that the court will see will specifically address

the promotion of L. Ron Hubbard as having certain credentials,

character, integrity, academic qualifications, military

background on which he sold himself to the public, such as

Mr. Armstrong, in order to obtain money.

This case does have a certain characteristic

that threads through the entire case, and I submit at the

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that these characteristics do not relate to Mr. Hubbard

as a founder of a revered religion. They relate to intrigue,

greed, misrepresentation, fraud and criminology, criminology

and fraud permeated not only Mr. Armstrong's entire involve-

ment with Mr. Hubbard but begins virtually from the age of

12 with Mr. Hubbard which Mr. Armstrong discovered.

That criminality and the lies, written lies

within written lies, within written lies, within written

lies become self-evident in these documents which will become

blatantly clear in testimony of Mr. Armstrong will indicate

that the sacred trust that was owed was fulfilled by

Mr. Armstrong, not only to himself but to this court and

to other Scientologists.

Mr. Litt indicated that the position of

Mr. Armstrong would be structured within the position of the

church. The court will hear the following evidence: That

when Mr. Armstrong joined the Church of Scientology in 1969

he thought be was joining something which was represented

to him as not being a religion. In fact, that representation

was universally made.

He joined an organization within a short time

called the Sea Organization. The evidence which is in the

documents and which you will hear from the mouth of

Mr. Armstrong is that he went on board a ship which was

owned by a succession of for profit corporations, and the

for profit corporations are the Hubbard Explorational

Corporation, O T S and O T C.

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The documents under seal will show that the

the individuals who worked on the ship worked for Mr. Hubbard in

a for profit corporation. In fact, the testimony will be

from Mr. Armstrong that in connection with the duties in

the port captain's office on board the ship, he was required

to go into each port and tell the people in the port that they

were a business corporation called O T C conducting business

research in management.

The representations that were universally

made from 1970 through 1975 as to who Mr. Armstrong worked

for was that he worked for a corporation called Operation

Transport Corporation. The documents show it and

Mr. Armstrong will so testify.

In fact, he was instructed per written policies

to state to whoever asked that he was not connected with

the Church of Scientology but he worked for that corporation.

Following Operation Transport Corporation he

was instructed when they landed in Clearwater, Florida to

tell everyone that he worked for an organization called

the United Church of Florida.

Following that he was instructed to relate

to the public, the press and the media that he worked for an

organization called The Friends of Norton Karno doing business

research, then it became the Friends of Mr. Snyder's Uncle.

Eventually these organizations wound there

way down to an organization called Author Services Incorporated,

which is now a for profit organization which encompasses the

people that Mr. Armstrong worked with who are now all earning

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did for the period of 12 years.

The evidence will be that Mr. Armstrong worked

in the personal office of L. Ron Hubbard. The documents

will show that the personal office of L. Ron Hubbard

was a for profit undertaking and that Mr. Armstrong and

the others were working in Mr. Hubbard's office were continually

told and, in fact, the evidence will be that Mr. Hubbard

told then that he worked for them and Laurel Sullivan,

Mr. Armstrong's senior, worked for L. Ron Hubbard and not

for the Church of Scientology.

That evidence, I submit to the court, will

become critical and there is extensive evidence which I

am not going to go into at the present time in order to

keep this brief, but that evidence is extensive and it will

show fact upon fact upon fact that in the mind of Mr. Armstrong,

he always worked for L. Ron Hubbard. In the mind of

L. Ron Hubbard, the parties to this contract, Armstrong

always worked for L. Ron Hubbard.

Coming up to the biography project, in January

1980 the Church of Scientology and L. Ron Hubbard and

Mary Sue Hubbard, a party in this case, were being investigated

by numerous state and federal agencies. In fact --

MR. LITT: Your Honor, I am going to object to this.

what is the relevance of that to the issues in this case?

THE COURT: I assume it is preliminary to the reasons

why he took these documents, what was done, how it came into

his possession.

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Overruled.

MR. FLYNN: In fact, in July 1977 there was a raid

on the premises here is Los Angeles of the Church of

Scientology and some 80,000 documents were seized by the

Federal Bureau of Investigation. The contents of those

documents I won't go into. They eventually led to the

indictment of the 11 highest officials of the Church of

Scientology, including Mary Sue Hubbard, and their subsequent

conviction.

In January of 1980 the organization was fearful

that there was going to be another raid. They were fearful

that this raid would tie Hubbard into several operations,

including Operation Snow White which was the subject of the

indictment of Mary Sue Hubbard. For that reason they mustered

between 150 and 250 people. They rented a paper shredder

which they designated Igor, and they proceeded to shred some

5- to 600,000 potentially documents. No one knows what the

final amount is.

The shredder operated for weeks. They were

using five ton trucks.

The evidence will be that the purpose of the

shredding operation, which becomes critical evidence in this

case, was to one, remove all evidence that connected

L. Ron Hubbard to the Church of Scientology, and two, remove

all evidence that connected him to the property at Gilman

Hot Springs. The evidence will be that under that criteria,

the criteria under which the shredding was conducted, the

documents should have been shredded. The documents were

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they had value as L. Ron Hubbard's personal documents and

private documents.

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For that reason they weren't shredded. Under

the criteria for shredding, they should have been shredded.

And that will be the evidence.

Five copies were made of those documents which

essentially encompass the documents that are under seal with

additions. The value of those documents, the evidence will

be, was lost over the next year and a half because of the

contents of the documents.

If the documents prove what the Church of

Scientology, Mary Sue Hubbard and L. Ron Hubbard held out

L. Ron Hubbard to be for 30 years and if he was in fact what

was set forth in numerous biographical publications about

him and his organization of this religion, then they may

have had value.

The documents, however, as I indicated at the

outset, will reveal precisely the opposite. And they lost

during that period of time all their intrinsic value as

pieces of paper. And as they lost their intrinsic value as

pieces of paper, they gained value with regard to their

informational content.

And as the court will see in the presentation of

the evidence, it is the content of these documents and the

perspective of Mr. Hubbard's involvement with this

organization which is the critical issue before this court

and which is the only issue relating to value.

At the outset of the biography project

Mr. Armstrong contracted with L. Ron Hubbard by submitting a

petition to Mr. Hubbard to collect materials to work on the

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his collection of the materials; in fact, the evidence will

be that over the next year and a half he collected literally

hundreds of thousands of pages and that the documents under

seal represent probably 2 percent of the documents

collected. And, in fact, the evidence will be that of the

documents under seal, contrary to Mr. Litt's representation

to the court that Mr. Armstrong scurried around and copied

thousands of documents in the last days before he left the

organization, of the documents under seal the copying that

was done in the last few days probably represents less than

5 percent of the documents that were copied throughout that

period of time.

The evidence will be that the biography project

started and that the mid-1970s; the person most instrumental

in the biography project was Laurel Sullivan.

When Mr. Armstrong collected these materials and

obtained approval from L. Ron Hubbard, he went to Laurel

Sullivan. Laurel Sullivan contacted Mr. Hubbard and the

biography project at this point probably became reborn for

the third time.

There were two prior occasions when they

attempted to do it. The authors found so many discrepancies

in the biographical data on L. Ron Hubbard that they were

unable to proceed. Now for the third time the project is

reborn.

Laurel Sullivan and Armstrong believed they had

the documents to support a legitimate biography of L. Ron

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motion. Contract negotiations began.

Contrary to the representations of Mr. Litt, the

testimony will be that Mary Sue Hubbard didn't represent her

husband in those contract negotiations, but as she testified

in those depositions, she represented the interests of the

Church of Scientology.

Contract negotiations began and a written

contract was entered into in October of 1980. The contract

was entered into between what we called the PDK and Omar

Garrison. That contract, we submit, will be one of the most

critical pieces of evidence in this case, a provision with

regard to whether the documents could be revealed to third

parties or disclosed to anyone outside the people who were

immediately involved; namely, Gerald Armstrong, Laurel

Sullivan and Omar Garrison were specifically excluded from

the contract because it would have voided the contract as a

violation of public policy under the restatement of

contracts and under several cases that have been decided in

California.

MR. LITT: May we approach the bench, Your Honor, or

I'll make it here.

I believe -- we had a discussion about what

information Laurel Sullivan may or may not have given to

Mr. Flynn. I don't know exactly what he is referring to,

but if I had to put my money down, it would be that she has

been talking to him about advice that she gained from a

Church of Scientology staff member -- about advice --

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THE COURT: He is talking about the non-inclusion of

something in the contract.

Let's go forward.

MR. FLYNN: There was a question about Mr. Litt's

association on the --

THE COURT: Let's go on. Overruled.

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MR. FLYNN: They specifically did not put that provision

in the contract. The defense submits that that is one of

the critical items of evidence in this case with regard to

the rights and liabilities of Omar Garrison from which

Mr. Armstrong got the documents and, in fact, if they had

put it in, it would have been void as against public policy.

At the same time that contract was entered

into, a contract was entered into between L. Ron Hubbard

and PDK with regard to the publication rights in the biography.

Under the biography proposals that were negotiated at the

time, L. Ron Hubbard was to make $10 million from the

publication of this book. The evidence will be that that is

a for profit purpose, and Mr. Armstrong was working in

connection with that for profit purpose. Under that

contract Mr. Hubbard had final approval over every item

relating to the biography project. That contract has never

been produced.

During the next year and a half, and I won't

go into the misrepresentations, I will simply itemize for the

court some of the areas without stating what the evidence

will be from the documents at this time in order to obviate

Mr. Litt's objection. Some of the representations that

were made about L. Ron Hubbard which became the critical

focus for Mr. Armstrong in the collection of the documents

are as follows, and as the evidence will be, these became

absolutely the fundamental basis upon which most people paid

money and joined this organization.

That L. Ron Hubbard was a nuclear physicist.

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That he's the most highly decorated naval hero

of World War II. That he served in five theaters. That he

was a commander of squadrons of Corvettes.

That he was crippled and blinded from war wounds.

That he was twice pronounced medically dead. That he was

the first casualty of the Far East.

That he was flown home personally in the

Secretary of Navy's personal airplane. That he received

28 medals and palms.

That he was the subject of "Mr. Roberts." That

he is Mr. Roberts, the subject of the movie. That he served

in the amphibious forces in the South Pacific in connection

with his "Mr. Roberts" activities on the U.S.S. Algol.

That he was fully healed and reclassified for

combat duty after World War II as a result of his discoveries,

scientific discoveries of Dianetics. That at one point he

was returned to combat without rest in order to command a

Corvette. That he served the remainder of that year with

British and American anti-submarine vessels in the North

Atlantic.

That his naval record states that he was

permanently disabled physically. That his naval record

states that this officer has no neurotic or psychotic

tendencies whatsoever.

That the naval record states that he saw

duty in the North Pacific. That in the space of two years

he worked himelf back to fitness and strength.

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That after World War II he had to study for

several years when he was blind and couldn't see. That he

resigned his commission in the Navy rather than assist

government research projects. That he worked for naval

intelligence in breaking up a black magic ring.

That he was sent home as the first casualty

in the Pacific and relieved by 15 officers of rank.

He studied under a Commander Thompson from the

age of 12 who vas a student of Sigmund Freud. That he was

a civil engineer with a Bachelor of Science, with a Ph.D.

That he was an atomic physicist, an anthropoligist.

That he had graduated from George Washington

University in mathematics and engineering. That be excelled

in his subject.

These are all written representations in the

biographical sketches of L. Ron Hubbard.

That he attended Princeton University as a

post-graduate. That he was involved in the first course in

nuclear physics.

That he graduated from grade school with high

honors. That he excelled in his subjects in high school.

That the book "All About Radiation" was written

by a nuclear physicist and a medical doctor, which is

purportedly him.

That between 1924 and 1929 he was educated

in Asia and studied under Llamas and learned the wisdom of

the Far East under four years of intense study.

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That he was an adventurer and explorer; that he

had conducted a Carribbean motion picture expedition;

conducted extensive underwater photography in connection

with that expedition; that he did it for the Hydrographic

Office of the Navy and that he provided the materials for

that expedition to the University of Michigan; that he led

three expeditions to study savage peoples; that he led an

expedition into Central America; that between 1933 and 1941

he visited many barbaric cultures; that he did the first

complete minerological survey of Puerto Rico; conducted the

Alaskan Radio Expedition for the government; rewrote the

Alaskan Pilot charting the coastline of Alaska; was the

originator of LORAN in connection with that expedition; that

he claimed he led an expedition to the Red Sea to

investigate and research underwater civilizations; that he

was involved in an around-the-world flight.

With regard to his health, he has claimed that

because of Dianetics, he represented the supremely healthy

and perfect human being.

He makes various claims with regard to his

health after World War II through the 1950s and into and

throughout the 1970s and into the early 1980s; that he was a

blood brother of the Black Feet Indians; that he wrote the

book Treasure Island; that he was -- that he was a Hollywood

director; that he wrote several books and Hollywood scripts;

that he is a member of various organizations relating to all

of his academic and professional qualifications.

The evidence will be that all of those

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The evidence will be that in early 1980 what

triggered this entire matter was that Mary Sue Hubbard and

the other individuals who were under indictment were trying

to raise funds in connection with the Church of Scientology

to defend themselves in a criminal case. In connection with

raising those funds, promotional material was sent out

throughout the United States; that the movie, the Dive

Bomber, a movie that was produced in the 1930s, was written

by L. Ron Hubbard; the screenplay was written by L. Ron

Hubbard and that thousands of people in connection with

extensive promotional materials that earned somewhere

between twenty and thirty thousand dollars was sent out to

have people come in and see the movie on the basis that it

was written by L. Ron Hubbard and on the basis that all of

the people that were to go to see the movie believed all of

those biographical representations that I laid out to the

court.

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Mr. Armstrong, because of the position he was

in as the researcher simply began to conduct research into

this very initial subject as to whether or not L. Ron Hubbard

had written the "Dive Bomber." He went to the library of

the Academy of Motion Picture Arts and Sciences, and he

could find no credit for L. Ron Hubbard. He found that

L. Ron Hubbard had written a very short story called

the "Dive Bomber" in the 1930's and he read the entire screen

play of the movie and the "Dive Bomber" and the were 180 degrees

opposite, and one had nothing to do with the other.

He than went to his seniors and he explained

to thaem that the promotional material was false based on

what he had found and he didn't think that L. Ron Hubbard

had written the "Dive Bomber" and it couldn't be proved.

A communication was then sent to L. Ron Hubbard

to try to explain the discrepancy in these basic facts upon

which thousands of people were about to pay between 20 and

$40,000 to defend Mary Sue Hubbard.

A communication came back from L. Ron Hubbard,

which is under seal, and the communication states that the

reason they couldn't find his credits was because someone

at Warner Brothers tried to gyp him out of the money, that

he really did, in fact, write it and they paid his $10,000

under the table, and this is on the sealed document, that

L. Ron Hubbard was paid $10,000 under the table, and then

he took the $10,000 before the war started and put it into

a safe deposit box, and then when the war ended, he used

the $10,000 to go on a cruise in the Carribbean.

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The beginning of Mr. Armstrong's inquiry

focused around this matter because Mr. Armstrong had remembered

in the collection of materials that he read that Hubbard

had said he was crippled and blinded after World War II,

abandoned by his family, penniless, broke, destitute, cured

himself with Dianetics, and not until he wrote the book

"All About Dianetics" in 1950 did he have any funds.

The documents under seal inescapably prove

that between 1945 when Mr. L. Ron Hubbard got out of the

Oak Knoll Military Hospital as a inpatient and 1950 prior to

writing "Dianetics, The Modern Science To Mental Health";

not only did he not have $10,000, but he was throughout the

five years writing to the Veterans Administration saying he

was broke, claiming that he vas a victim of war wounds to

get a pension.

The documents will prove that even among

those documents, it shows that there were no war wounds.

That he was destitute and broke and whatever it showed

Mr. Armstrong in 1980 was that the letter that Hubbard had

written in 1980 about what he had done is 1945 through '47

was false. Then as Mr. Armstrong got into the naval documents,

he found out that virtually everything that was said about

Mr. Hubbard with regard to his naval career was false, which

led him into all of the other documents.

Throughout this period of time he was having

on-going conversations with members of the organization and

with Omar Garrison. He explained to Garrison, he explained

to members of the organization what he was finding. Garrison

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from Mr. Garrison's mouth, that the biography could not

possibly be written. That it was subject to Hubbard's

final approval, and that they were being told that

Hubbard could not even be communicated with. So Mr. Armstrong

and Mr. Garrison both realized that they were in a box.

They had discovered the truth about an

individual who was involved in an organization which had a

doctrine called the "Fair Game Doctrine." The evidence

will