Reporters' Daily Transcript (April 23, 1984)

Armstrong 1





NO. C 420153


Monday, April 23, 1984

Pages 328 through 392, incl.


(See next page.)
Official Reporters


For the Plaintiff and Intervenor: LITT & STORMER
Paramount Plaza
3550 Wilshire Boulevard
Suite 1200
Los Angeles, California 90010
(213) 386-4303
The Oviatt Building
617 South Olive Street
Suite 1000
Los Angeles, California 90014
(213) 623-7511
For the Plaintiff
8530 Wilshire Boulevard
Suite 407
Beverly Hills, California 90211
(213) 659-9965
For the Defendant: CONTOS & BUNCH
5855 Topanga Canyon Boulevard
Suite 400
Woodland Hills, California 91367
(213) 716-9400




THE COURT: Good afternoon, counsel.

MR. LITT: Good afternoon, Your Honor.

MR. FLYNN: Good afternoon, Your Honor.

THE COURT: Here we are again.

Mr. Litt, I guess the ball is in your court.

MR. LITT: I think it is, Your honor.

Your Honor, we have some motions to make to the court and the ruling then will affect the outcome of where we go from there, so let me start with those.

The court is aware that at least as we view it, the defenses which have been asserted by the defendant in this case were not part of the file at the time we came into the court, and the court has made some indications that it sees a distinction between the equitable claims and the damages claims, so before we went further we wanted to make a suggestion to the court which we felt could potentially limit the nature of these proceeding without prejudicing either side in light of the defenses which have been permitted, and that is that we would request at this time that the damages claims be severed from the equitable claim. That the damages case, which now as we view it essentially overlaps the counter claim and relates to the same issues, be reconsolidated with the counter claim and that we try at this time only the claim for the right to possession of the documents which hopefully can be a trial of a limited scope and one for which we feel


we have been prepared.

This would be our initial request, Your Honor.

THE COURT: Well, what is the defense position on that?

MR. FLYNN: Your Honor, may I have a moment?


MR. FLYNN: Your Honor, this comes as a complete surprise to us, and if we could perhaps adjourn for five minutes. It is such a complete surprise and a complete shift from the entire direction of the case that frankly I am at a little bit of a loss.

My reaction is that we should go forward with the case, jury waived, but I’d like to consult with Mr. Armstrong.

THE COURT: Certainly.

MR. FLYNN: Just perhaps five minutes.

THE COURT: Okay, we will take a few minutes.

(Recess. )

THE COURT: We are back in session.

MR. FLYNN: It occurred to us almost immediately that there is one fundamental underlying issue that permeates the entire lawsuit with regard to the counter claim, and that is the documents. The thrust of the counter claim, if Your Honor reads it, is that Mr. Armstrong relied upon all of the representations that were made in relationship to Mr. Hubbard’s background which he subsequently found to be almost universally falsified when he went through the documents. So, it strikes me that if we followed Mr. Litt’s suggestion, the whole case should be reconsolidated because


it would be impossible — what essentially would happen in potentially a case solely on the so-called  equitable claims is we would arrive at the conclusion that Judge Cole and Judge Shimer, and I think another judge arrived at; namely, that we just keep the documents in the court and preserve then until the litigation is over or until other third party litigants have a right to use them, until that issue was determined.

So, it seems to me that there are fundamental issues in the counter claim that go to the use of the documents, and if they are going to try it, we might as well try the whole thing together.

THE COURT: I am not sure I understand what your position is. You object to it or what, or consent to it or stipulate to it or what?

He’s made a motion that the damages should be severed from the equitable action and the case proceed only on the equitable action, and that the action be reconsolidated with the cross-complaint on the action for damages. I am not sure what your position is on that motion.

MR. FLYNN: I object to the motion and I would suggest that the appropriate procedure would be to  reconsolidate the entire case.

THE COURT: Well, I am not about to do that unless the plaintiff were willing to stipulate to that. I don’t know what discovery would be required, what further law and motion matters might have to be resolved.

But so far as the idea of severing the causes


of action for damages, by disposition is against that unless the parties by stipulation felt that was the way they wanted to mutually agree to try the matter. It seems to me that we are here. The case has been put together by both sides in a certain fashion and we are here for trial and we should go ahead and try the case, I guess, as long as that is what we are here to do.

So, I will deny the motion.

MR. LITT: In light of that ruling, Your Honor, this was alluded to the other day and the court indicated some of its tentative views on, but I don’t want to explain it further.

We are going to and we are moving for a substantial continuance in the case, and I want to make clear to the court why because I know the first words I will hear from the other side of the table is that this is a tactic or whatever.

Your Honor, this case was severed from the counter claim. It was severed from the counter claim specifically on the ground that the counter claim raised issues which did not exist in this case, having to do with Mr. Armstrong’s allegations which essentially — which allegations are essentially the allegations that have now been put forward by Mr. Armstrong is also his defense as to why he took the documents.

After the matter was severed, the counter claim was severed, the plaintiff moved to expedite the case. At the time that this occurred, that that occurred, there was


no unclean hands defense in the case nor was there any defense either in the case or that had been advanced by the defendant along the lines of what has now been adopted at the urging of the defendant as the scope of this matter.

Not only that, but every time the issue of unclean hands had come up, the affirmative defense had been stricken by the court, discovery was done on the basis of how we understood the issues.

After the preliminary injunction was entered, there was a motion to modify the preliminary injunction, and there was a hearing twice on summary judgment. We have provided the court the transcripts of the  arguments at the time of the summary judgment hearings. The court will see from a review of that and can see from a review of the papers that, while various facts were asserted by the defendant, they could not connect it to any theory of the defense that had been put forward, that it did not refer to any affirmative defense as the basis of it that had been put forward.

The courts that addressed it did not address it in the context of an affirmative defense in discussing its relevance. In fact, in the argument Judge Shimer specifically said to Miss Dragojevic, "What does that have to do with this case?"

I raise all of this, the court is aware of our view of what the correct standards should be. I am not trying to get back into that. I am trying to explain to the court that we did not and I think reasonably did not under the circumstances and based upon the pleadings in the case prepare


a case of the nature and scope of the case that is now before the court. We feel that we have been prejudiced. I will tell the court that I took on behalf of Mrs. Hubbard three days of deposition testimony of Mr. Armstrong. At no time did I even try to explore these issues because the issues as framed were narrow. It was fully recognized that all of those issues would have to be addressed at some point in the litigation between Mr. Armstrong and the church, but it was not at issue and it was not even dealt with in our depositions.

We did not advance discovery on these issues, and I believe that the record shows that it was reasonable on our part, given how the pleadings were framed and given what had been permitted to be in the case that we conduct ourselves in this case. We wanted to get in particular to the issue of the equitable claim. The  documents are very important to us. They are private documents. We want them back and we are now in a position where we feel that we are at an enormous disadvantage if we are to proceed immediately with a trial of the issues as they have now been defined in the case.

There is further discovery that we would want to do. There are further depositions of Mr. Armstrong that we would want to take. There are claims that have nothing to do with Mr. Armstrong that are now at issue in the case. The case has now become a case concerning whether — the whole issue really of whether Scientology is a fraud, the allegation of that, and whether L. Ron Hubbard is a fraud.


There has been no discovery on those issues. There has been no probing of those issues. There has been no preparation on our part of those issues and we researched the law thoroughly.

We believe that we were conscientious about it. We found no case permitting the type of defense that is being discussed here. That defense was not articulated in any of the defendant’s papers prior to the time of the opposition to the motions in limine, and we feel that a substantial continuance that allows us to do some further discovery, if we have to, we don’t think it is proper, but if we have to, we will litigate the case and we will litigate it on these issues, and we believe that we will prevail on the issues, but we also believe that we are at a substantial disadvantage if we have to do that without having had notice of what the defenses are and what the issues are and having to try the case without such preparation.

On that basis without at this point trying to specify the full length of the continuance, we are requesting a continuance of some months. That would allow us to prepare that and have the case come to trial and have us be ready to try the case, so that at least the parties are in an equal position with respect to knowing what the issues are.

I have nothing further on that question.

THE COURT: Mr. Flynn?

MR. FLYNN: Your Honor, we oppose the motion. There have been several occasions where Mr. Litt has suggested to the court that the original answer did not assert the


defenses that we are now asserting, and I would submit if the court read pages 3, 4, 5 in the affirmative defenses in the original answer, you will see that all of the defenses, particularly the ". . . consistent pattern of fraud perpetrated by Hubbard through his agent, the plaintiff, upon members of the Church . . ." was asserted on page 3.

That the public had "an interest in said materials and documents in order to reveal the falsity of numerous representations uniformly made in writing by Hubbard and the plaintiff" as on page 3 of the very original answer.

As Your Honor knows, the defense of unclean hands has been asserted all along and, in fact, the plaintiff has filed extensive memoranda relating to the unclean hands defense trying to have it stricken all along.

Additionally, there have been five days of deposition testimony of Mr. Armstrong in this case and by this plaintiff there have been 13 days of deposition testimony because what they have done is they have chosen to depose him in every case they could depose him in, which I suggest is solely for the purpose of pressuring him.

MR. LITT: Your Honor, I am going to object to that. He was named by a witness in each of those cases, by Mr. Flynn who is his lawyer in those cases, and now to say in not only issues related to this case but for other things, and it is just improper to constantly make these allegations. There is no basis for it.

THE COURT: Okay, relax, gentlemen. Relax.

MR. FLYNN: I take strong issue. In most of those


cases there has been no witness list prepared in any event, but he has been deposed for 13 days.

Every item of his life has been meticulously discovered in connection with those 13 days, including the doctors he went to when he was 15 and 16 years old because I have attended many of these depositions.

The plaintiff has taken a great deal of discovery in this case and has been fully aware of the fact all the way along, particularly as the facts relate to the unclean hands defense. Now, the unclean hands defense is basically simple. It has to do with the fact that they used unlawful means to steal photographs back from Mr. Armstrong which they did. It was an intentional act, fully within the scope of their knowledge. Therefore, there is very little discovery that is needed. They are the ones who know precisely what they did.

With regard to the consummation of the biography, they took Mr. Garrison’s deposition and we submit that the attempt to consummate the biography, even given their knowledge of the false background of L, Ron Hubbard would also be or result in the invocation of the doctrine of unclean hands.  They are fully versed because of those issues, because they took the deposition of Garrison. They have possession of all of the documents, so they are fully versed with regard to everything that is in the documents.

With regard to the assaults on Mr. Armstrong, police reports were filed. They were perpetrated by agents of the plaintiff. They were intentional acts and because


they were intentional acts, they were all within the purview of the knowledge of the plaintiff, and further they were even intending to get costs for the private investigation services of some of these people who assaulted Mr. Armstrong during the course of this case, which Judge Cole took note of.

I submit, Your Honor, that when you come into a lawsuit and you inform the court that you are ready to try the issues in the lawsuit, and when the issues are as extensively briefed as were briefed in the motions in limine, then it is simply somewhat of a mythical claim to say that they are now unprepared to go forward.

Your Honor has basically spent five days reviewing several feet high of material which would suggest, in itself, that they have given extensive preparation to all of the issues in the lawsuit, and there is some degree of expertise required on the part of a plaintiff when he undertakes a lawsuit to anticipate what the issues will be, and I submit that they have known from the beginning what the issues are in this lawsuit. We have put a great deal of time in. The court has put a great deal of time in. The case is ready to go forward, and I think the motion should be denied.

THE COURT: Well, of course, it is –

MR. LITT: before the court rules, I don’t want –


MR. LITT: The only affirmative defense — the affirmative defenses that Mr. Flynn referred to, one is unclean hands. That was stricken.


One is laches. That was stricken.

One is standing. That we are perfectly prepared to deal with.

One is privacy, whether they are private. That we are perfectly prepared to deal with.

One, is it against public policy and in violation of the defendant in intervention’s rights under the First Amendment to prevent him from disclosing or disseminating information. Nothing about what we have been talking about.

Those were the affirmative defenses, plus our complaint. Those framed the issues and the unclean hands  was out.

I believe that the representations that we have made that we reasonably did not have notice that there was a charge that they were entitled to do this on claims of fraud is not in the case. At least, as we understood it, and that furthermore our research did not find any cases that permitted this issue even to be raised except in the context of public disclosure of private facts, which is not our allegations.

So, I believe we are correct in saying that as we understood the issues and as they were framed by the pleadings, the issues that have not been identified, we were not on notice of. We are not, therefore, saying that they can’t be tried. We are simply saying that we should have the opportunity to prepare for them.

THE COURT: Well, I don’t know. It seems to me that we may be attaching too much significance to labels here


rather than to substance. The issue is whether you are really prepared under the facts that you are aware of.

The court has refined its thinking a little bit.

I think that the — notwithstanding that you have a cause of action phrased in terms of invasion of privacy, it has to always be an unreasonable invasion of privacy before it is actionable. What is reasonable is going to depend, to some extent, on the circumstances so that is something that should have been anticipated, evaluation of what is reasonable and what is unreasonable.

Certainly, we have the fact that Mr. Armstrong is an agent, was an agent of different people and he always contended that, and he always contended that is the reason, I gather, that he had for delivering this matter to the attorneys involved. It is not, I don’t believe, the contention that he went public in the sense that he went to Time Magazine or some other agency and publicized these matters, and he has asserted apparently that he believed it was necessary, assertion of his defenses to the actions being taken against him by the Church of Scientology or its agents.

Now, without going into whether or not that is true, it seems to me that that is essentially the defense he has asserted all along, and it seems to me that is within the ambit of his First Amendment rights to discuss these matters with his attorney and the Restatement says an assertion of a superior interest to that of — in other words, to the interest of the party whose privacy is being invaded, and I think if what he says is true, that he would be perfectly


justified in delivering these materials to his counsel, assuming what counsel has represented to be true is true. So I don’t think that this goes that much beyond any of the issues that have been framed.

So far as the unclean hands, I have already indicated that would only be considered by the court as an affirmative defense on the equitable causes of action, and you were ready to go forward with those.

I think that when you come to court for trial, you have to anticipate that you are not going to prevail on some of your motions, some of your thinking, that you have to anticipate all of the possible direction that the case is going to take, and I just don’t feel that it is fair to have the defense, and I don’t think it is fair to the taxpayers of the community to invest a week of a trial department’s time and then throw it all out the window.

Certainly I don’t really know what the technical problems will be as they develop, but at least at this particular point in time, I am going to deny the motion for continuance.

MR. LITT: Well, Your Honor, the continuance that I was just asking for was for a substantial continuance, and if the court is not prepared to do that, then we would ask for a brief continuance and I will explain what we would like to be able to have happen.

THE COURT: Very well.

MR. LITT: In the period of time of that brief continuance, we would like that the defendant — we received


a list of documents. This is the first thing that comes close to being an itemization of the documents that they seek to admit. When we discuss those more, the court will still see that we do not have notice of even what documents are being asserted by the defendant.

We would like a document by document itemization of each document that is asserted by them as — that they intend to introduce into evidence. The rules of the court require that the exhibits be identified. In the exhibit list that was exchanged between the parties, the exhibit list contained the following notation: "Documents under seal"; something to that effect.

There are eight to ten thousand pages of materials under seal. That is not an identification of the documents. This list begins to get to that issue, but it does not do any more than begin to get at that issue. So that is the first thing we believe that there should be in the way that an exhibit list is normally exchanged and prepared, a specified exchange of documents list which lets us know precisely what documents are being asserted.

Secondly, we then believe that the court should follow a certain procedure which is — we cited to the court in our original papers the case of United States versus Hubbard that discussed the issue of a document by document review, not only for purposes of admissibility but also in balancing the privacy interests against the needs of a party to make use of the material, and it is our view, at least, that the court should still engage in such a process on a document


by document basis which can obviously only happen after there has been an opportunity to do that, That is the first thing which we feel should happen in  the course of a short continuance.

The second thing which we feel should happen is that we should have the opportunity to take at least certain depositions, and we will be prepared to do it within a day, if necessary, but there are certain witnesses who have been identified by the defense whose depositions have not been taken who we had no reasonable notice of, and we would like the opportunity to take the depositions of four people for at least a day each. We will run them simultaneously, if

We would like those witnesses to be provided by the defense and give us the opportunity to at least see what it is that these people have to say on the issues in this case.

I will just give the court one example. The name of Laurel Sullivan has been thrown around quite a bit by Mr. Flynn. I, in fact, knew that Miss Sullivan, because she was Mr. Armstrong’s senior, was a relevant issue in this case and I made an effort to see if I could get any cooperation from Miss Sullivan in having her deposition taken, and through an intermediary made the inquiry of whether I could get access to her address or her telephone number. Miss  Sullivan’s position was that she was not going to be a witness in this case. She did not want to be contacted by the church. I spoke with her briefly on the telephone, but


she would not make herself available for deposition. We have had consistent claims made against us of harassing people, so I, in a discussion with Mr. Peterson and the church, instructed that there be no effort to contact her in light of the intentions that she had expressed.

I now find that the is voluntarily coming into the jurisdiction because I understand she does not live in California, is not subject to California subpoena power to be a witness.

Now, all of that is fine, She is entitled to appear and be a witness for Mr. Armstrong. I don’t have any objection to her being a witness for Mr. Armstrong, but I do think we should be entitled to take her deposition.

There are other people whose names we were not aware of as even having to do with the issues in this case. For instance, the name Bill Franks has been thrown around a great deal. I know who Mr. Franks is. I know the position that he held. We made absolutely no effort to contact Mr. Franks in the context of this case, so we would just like to be able to designate by tomorrow morning four witnesses. We are not asking for all 50 or anything, but four witnesses who will be provided by the defense with the opportunity to take a deposition of each of them.

That deposition will be solely a discovery deposition and not a deposition for use at trial.

The third problem is, Your Honor, that in light of the court’s ruling that it is going to permit documents to be entered, we now intend, and this is under maintaining


our general objection that none of these documents should be introduced, but we do not intend to fight this case with one hand tied behind our backs. We are going to designate documents from among the sealed documents of our own which will conclusively establish the fallaciousness of this defense, which will conclusively establish how private these materials are, which will conclusively establish that sending them to Mr. Flynn has no reasonable relationship to any allegations which were made by Mr. Armstrong, and we intend to designate such exhibits and present them, and would need the time to do that.

The courts should understand that my approach to these documents has been to as little as possible go through them. I feel like a voyeur when I read those documents. I don’t think they are anybody’s business, and we have tried in the context of representing our clients not to further intrude on their privacy, and we hoped that this trial could be tried in that way, but it appears it cannot. But we now feel that we need the opportunity to spend some time putting together some documents that we intend to introduce.

The court has permitted Mr. Armstrong to make an issue of reasonableness of Mr. Armstrong’s conduct under certain circumstances. We believe that requires that we also present evidence of the reasonableness of the church’s conduct and the church’s state of mind with respect to various things which we did not think was relevant under the theory of the case which we believe casts the issues and frames the relevant evidence in the case.


We can do all of this, Your Honor, in a period of two weeks or even less, if necessary. We are not asking for a long continuance. We are not asking that it be transferred out of this court. This court can take a short cause matter or some other trials in the interim.

I have already explained the circumstances showing why we did not feel that we were prepared to put the case on and try the case in the way that it is now going to be tried, and we feel that it is reasonable that we have a brief continuance and that we have some order with respect to discovery along the lines that I have requested, and that in that time it will be difficult, but that we can be fully prepared to try the case on the issues that are now before the court.

MR. PETERSON: Your Honor, I would like to be heard on that matter if I might.

THE COURT: All right, Mr. Peterson.

MR. PETERSON: In reviewing the case as it stands today, as we are supposed to try the case, I really honestly feel that it is my client who stands to suffer the most. The defenses, as they are now defined, actually, in effect, will put my client on trial. The jury’s state of mind regarding the church, jury’s state of mind regarding his interpretation of what Fair Game means, could mean toward him, would mean in the context of other facts, seems to all de possibly relevant in this case.

These are issues, as Mr. Litt has explained to the court and that we had no idea would become a part of


this case when the case was severed and Your Honor was talking about judicial economy, I agree with you entirely. It was severed to try the very narrow issues of the conversion and invasion of privacy and the breach of fiduciary duty.

All of the issues that will come in that Gerry, his state of mind, the harassment of Gerry — that claim is in his counter claim. That is why no discovery was done regarding Gerry’s state of mind, regarding any of the harassive allegations, Fair Game. None of that discovery was done because it was always anticipated that will be a part of the counter claim and it may well be.

Something the court should bear in mind is why Mr. Litt has suggested that this case, the damages’ part go back to the other cases. That will all be litigated if we litigate Gerry’s state of mind, the harassive acts that Gerry Armstrong alleges. It will all be relitigated again in another two month trial three years from now.

So, there really isn’t a lot of judicial economy in sending the damages claim off to the counter claim and just trying a good, clean equitable case on neutral principles of law with no First Amendment implications and all of that, but again that’s already been argued.

But another problem, too, that I face, and I think it is sort of a trial tactic by Mr. Flynn which has caused me and my client a lot of concern over this weekend is that when we first started the trial, we went into chambers with Your Honor and Mr. Flynn spent 45 minutes with a bunch of unsupported allegations, some vague, unsupported harangue


against my client, the church, against L. Ron Hubbard, various things, talking about grand juries, fraud, the whole thing.

My client was told about it. I said, "Don’t worry. The judge isn’t the man who will be trying the case. It will be the jury."

Again on Thursday Mr. Flynn went through and I took notes, four pages of allegations against L. Ron Hubbard, including taking $250 million from the church and putting it in a Lichtenstein bank account; that Mary Sue was stripped of her post by L. Ron Hubbard. That every Scientologist witness in this court will have been trained to lie. Wide variety of unsupported allegations.

But I told my client, "Don’t worry. His Honor can put that all out of his mind because it will be a jury that will be listening to this case."

So, after Mr, Flynn was able to put all of these unsupported allegations in front of this court, he drops the jury demand and wants Your Honor, having heard all of this information, to try this case. My client was very upset at that thought.

I said, "Well, we can have a jury." But he said, "Wait a minute. You said we didn’t want a jury."

We had waived a jury. We weren’t interested in trying our religion in front of 12 people. We wanted a sophisticated jurist, a judge, to listen to the evidence and to try this case. So, there was a very serious question put to me by my client of whether Your Honor could actually


try this case.

Now, I have assured them and I would like Your Honor maybe to state, and I think you can put all of the wild, unsupported allegations out of your mind. But I think it presents a problem that there is a possibility that this case should be transferred, but again I am not asking. I am not moving to disqualify Your Honor, but I think it is something that should be borne in mind about this case.

But what Mr. Litt said is entirely true. My client, the Church of Scientology, now must defend this case based upon what Gerry had in his mind regarding what the church had done, What it could do. What it has done to other people throughout the world, and we have to prepare a case now since last Friday when these rulings were made allowing these defenses.

Miss Dragojevic indicated that 21 of the 50 witnesses had never, never appeared in any of the discovery. We will hear these witnesses’ testimony for the first time when they are sitting there. That is no way to prepare for a trial.

You had mentioned well, the facts have been going around and we know the facts and the legal issues, the legal areas that you pushed the facts into. That isn’t important. But it is very important. We have to try the case on what the law is. We don’t want to get new facts from that witness stand while we are trying the case and trying to pigeonhole those facts into legal theories that we just heard about last Friday, so any client, the church, is in a very severe


disadvantage, Your Honor, and I think that at the very least we need two weeks to analyze these new defenses that just came up on Friday and Thursday, we need some chance to do a limited amount of discovery, and we could be ready to try this case.

THE COURT: Mr. Flynn?

MR. FLYNN: Your Honor, at the outset I’d simply like to read into the record the portion of the very first answer that was filed in this action. On page 3 the following defense is raised:

"Defendant states that Hubbard had absolute control of all plaintiffs’ accounts, that plaintiff acted as the agent of Hubbard and that any and all of his activities were not conducted for the plaintiff but rather for Hubbard. Defendant denies that any and all materials collected or maintained by him in said project are the personal property of plaintiff, but rather states that said materials constitute his property or the property of Omar V. Garrison. Defendant further states that the materials and documents collected by him in said project in many respects reveal a consistent pattern of fraud perpetrated by Hubbard through his agent, the plaintiff, upon members of the Church of Scientology and the public at large. Defendant asserts that the membership of the Church of


Scientology and the general public have an interest in said materials and documents in order to reveal the falsity of numerous representations uniformly made in writing by Hubbard and the plaintiff."

That should put to rest the issue of whether or not the defendant knew what the basic defense was in this case. That is the very first answer that was filed.

With regard to the request for continuance for two weeks, the defendant objects but with regard to the itemization of the documents, the plaintiff is prepared to spend a day going through the documents that are relevant and segregating those documents so that either the court or the plaintiff in intervention can see specifically what documents are involved.

As far as the designation of documents by Mr. Litt, they have had the documents in their possession throughout the period of this litigation. They have also
come into the court, I understand from Miss Dragojevic, on numerous occasions and itemized and catalogued every document. So, with regard to what documents they intended to introduce in evidence to show an invasion, I submit that when they filed the suit and made a claim for invasion of privacy and then filed a readiness to go to trial, they had access to all the documents and should have known specifically at that time what documents they intended to use.

With regard to Mr. Litt’s statement that he felt like a voyeur if he looked at the documents, well, I simply


suggest to the court that these documents were all given to an author, Omar Garrison, to write a biography that was going to be disseminated all over the world about this man based upon these documents.

We would agree that a continuance perhaps until Wednesday morning so that each document can, be itemized is appropriate.

With regard to a continuance to reopen discovery, we strenuously object to that. The plaintiff has taken numerous depositions and, in fact, this individual Laurel Sullivan that has been brought up, her name was placed, I understand from Miss Dragojevic, in interrogatories and answers to interrogatories some time ago. We ourselves until fairly recently did not have any particular access to Laurel Sullivan. Contrary to what Mr. Litt represented to the court, she is not appearing voluntarily. She’s been subpoenaed.

Mr. Litt failed to inform the court that he had a two hour taped conversation with Laurel Sullivan in which they went over, from what she tells me, every aspect of the case and this was approximately a year ago.

She also tells me that he subsequently sent a memoranda to her, some four to five pages long, where Mr. Litt suggested what the full extent of her testimony or evidence would be regarding the case.

So, with regard to reopening discovery, we think that that is completely inappropriate. The itemization of documents, perhaps a one day continuance for that, can be done for both sides. We have no objection to that.


With regard to Mr. Peterson’s statements that they did not know about the Fair Game Doctrine and as to how it was applied to Mr. Armstrong, just the two volumes that we have checked of testimony on the summary of testimony at page 85, Volume 1, Mr. Armstrong was interrogated with regard to the Fair Game Doctrine and things that were done to him.

On Volume 2, page 193, he was again interrogated with regard to the Fair Game Doctrine and what was done to him.

With regard to wild and unsupported allegations, I submit to the court that everything I have said is absolutely true. They are not wild nor are they unsupported. Whether they are relevant remains to be seen in terms of the evidence that will be introduced, and that is basically our position.

THE COURT: Well, of course, there is, I suppose any litigant is concerned about whether a judge is going to be able to put aside what people say and try to decide the case fairly. That is the normal situation.

But I think the lawyers are trained, notwithstanding what they hear other lawyers say or what they hear other people talk about, most lawyers don’t have any real problem with setting aside these impressions and deciding cases that were submitted to them on evidence.  That is my reaction. I have been trying cases for 16 years as a judge, involved in trials day by day for 15 years before that, and I have no problem in my own mind separating what I hear from what actually is evidence in a lawsuit,


notwithstanding the charges and counter charges, and this is something that happens in nearly every case that comes before a court; charges and counter charges, lots of hyperbole and rhetoric and so forth, but when the chips are down, the cases are decided on the evidence that is presented to the court under oath. That is the way it is and that is the way it should be.

I think in reality judges are less likely to be swayed by some emotional appeals and rhetoric than some trial juries are likely to be swayed, but be that as it may, I don’t see that there would be any basis for the court to disqualify itself.

If the case is going to be a court trial, I don’t have any particular indisposition to allowing a reasonable continuance if there actually is a bona fide need for some further designation of exhibits or perhaps depositions of witnesses if this is really something that is necessary. I don’t see that two weeks is required.

What witnesses do you have in mind? You have indicated Miss Erickson.

MR. LITT: Laurel Sullivan.

THE COURT: Or Sullivan.

MR. LITT: She will be one. I will tell you quite honestly we are at somewhat of a disadvantage.

How I would like to handle this is that one, the defendant tell us who the anticipated witnesses are. There is a 50 person witness list. We haven’t the faintest idea who they seriously intend to call.


Mr. Flynn at one point said how do we know until we hear the case. Well, in part that may be true, but our trial brief sets forth in large part the elements of our case and the facts that we intend to prove. So, I think that the defense can clearly tell us at least the people that they know they intend to call based on what has been presented to them.

There are at least two I can think of at this point, which is Mr. Franks and Miss Sullivan. Mr. Franks, depending on what testimony he may have to give, there may be attorney-client privilege issues which have to be litigated by the court. Mr. Franks was the executive director international of the Church of Scientology of California.

It appears that he has divulged to Mr. Flynn the substance of conversations that he had with attorneys for the church at various times when he was acting as a representative of the church. I don’t know if he intends to come in and rely on such information or not in any testimony, but if so, I make this statement based upon the fact that in another case where Mr. Franks was designated as a witness in which a plaintiff represented by Mr. Flynn is suing the church, that this information did come to light and that that issue has not yet been resolved in that lawsuit.

As to other potential witnesses, I don’t know, Your Honor, quite honestly who they seriously intend to call off of this list. If we could get an agreement that the defendant has to specify the people that they presently know that they will call as defense witnesses, we can then look


at that and make the assessment, in particular, we could do that if there was even a generalized offer of proof as to the subject matter of the testimony of the individuals involved.

The court must understand that we are still not sure exactly what issues we are trying even now, Some of the allegations made by Mr. Flynn we still think are clearly beyond the pale of anything in this lawsuit, but we are not quite certain. So if there could be an offer of proof by the defense, and we could look at that, then have a bona fide witness list of the people that they intend to call. I am not trying to limit their ability to call other witnesses, but at least a good faith representation, then I think that we would be in a position to say and to make specific requests of the court.

If the court isn’t inclined to give that, then I would ask until tomorrow morning to designate the people. I mentioned four people just because it seemed a reasonable figure that wasn’t getting out of hand. As Miss Dragojevic said there are 21 people on their witness list who have never been named in discovery in this case by her own admission, so we would suggest that procedure then, Your Honor, and we could then tell the court exactly who we feel we would need. But the two names I mentioned are clearly two such people.

MR. PETERSON: One other point, Your Honor. The access to the documents at the present time is limited by court order of Judge Olson that we can only see them two days a


week, Julia, and you have to give 24 hours’ notice, and you can only be there for three hours at a time or there is some set of rules which I don’t think we can get in now.

THE COURT: Let’s put it this way. We could make some order to amend that so far as that goes. That is not any problem. My order would supercede Olson’s.

MR. LITT: There is a third name I have which is Jim Dincalci, D-i-n-c-a-l-c-i, who is on the witness list of the defendant and whose deposition we would like to take.

THE COURT: Do you definitely propose to call these three people, Mr. Flynn?

MR. FLYNN: Laurel Sullivan will certainly be called.

However, we submit that her name was on the witness list in interrogatories all along. Mr. Litt, as I said, had a two hour taped telephone conversation with her and is fully apprised of everything she intends to testify about.

MR. LITT: I don’t think the conversation was taped. I did have a conversation with her.

MR. FLYNN: She informed me that it was taped.

MR. LITT: Maybe it was.

MR. FLYNN: That the initial part of it was taped and then she asked and Mr. Litt said he did have a tape recording going, and then she asked –

MR. LITT: That is false. This is false. I never taped anyone without their consent.

I don’t recall whether there was a tape recording, but if there was a tape recording, she consented to it and her voice was not recorded without her consent for one moment


and, Your Honor, I really would like this to stop.

THE COURT: Well, do you know whether or not you have any kind of a tape recording, counsel, of this conversation that you had?

MR. LITT: I can check with my associate to see. I am virtually positive that we did not tape the call because we did a file memorandum based on notes, and we would have done a transcript had we taped it, and I know we didn’t do a transcript so I can tell the court that we did not tape the conversation.

Whether there was some portion of it taped is what I cannot say without absolute certainty, but no portion was taped without her consent, if any portion was taped, which I doubt.

THE COURT: I will accept that.

MR. FLYNN: All I can tell the court is Mr. Litt called her once. The conversation lasted approximately five minutes. She asked if it was being taped. He said it was.

THE COURT: Well, this is what she told you.

MR. FLYNN: This is what she told me. She called him back half an hour after that.

He told at the beginning of the conversation that the first conversation was taped and they then went on for two hours and then he sent her a five or six page memo about what was in the conversation. That is all I can tell the court.

Now, Laurel Sullivan will definitely be called as a witness. She was Mr. Armstrong’s senior.


THE COURT: Okay, you don’t need to go into that.

Can she be made available for deposition here? Is she out of the state now or she is coming in or she is here?

MR. FLYNN: No, that was another misstatement. She is now a resident of California and working and living in the State of California.

THE COURT: Can she be made available for deposition? Is she local?

MR. FLYNN: I can consult with her and I can do my best to make her available as soon as possible which I will do.

MR. LITT: Wait, Your Honor. I would like the court — I guarantee the court that if the court enters an order that in order for the defense to call her she make herself available, she will be made available. If it is a question of asking Miss Sullivan whether she wishes to make herself available, I can tell the court what her answer will be. She is cooperating with the defense. That is fine, but then the defense should have to cooperate and should have the incentive to cooperate and the witness should have the incentive to cooperate.

THE COURT: I don’t have any problem with that, counsel.

MR. FLYNN: So I will do my best, Your Honor.

In the last several weeks I have learned quite a bit about her involvement in this case, specifically with regard to the fundamental issues of the shredding, the biography project –


MR. PETERSON: Your Honor, you are now the trier of fact in this case. I think you should hear this testimony from the lips of the witnesses and not Mr. Flynn’s distorted view.

MR. FLYNN: I thought they wanted an offer of proof.

THE COURT: Yes, he wanted an offer of proof.

MR. LITT: Well, is this an offer of proof?

MR. FLYNN: This is basically what I was going to call the witness for.

MR. LITT: Okay. As long as it is an offer of proof, fine.

MR. PETERSON: Categorize it as an offer of proof.


MR. FLYNN: Your Honor, with regard to the shredding, the biography project, her supervision of Mr. Armstrong, the permission of Armstrong to give the documents to Garrison, the fact that the contract was specifically silent on the issue of what Garrison could do with the documents and was specifically made so, the fact that she was subsequently declared and she was offered to have that Declare suspended if she would testify cooperatively, the fact that she worked for L. Ron Hubbard, that Gerry Armstrong worked for L. Ron Hubbard, that there were extensive discussions of those particular facts because they were informed and it was agreed that it they worked for the church while working for Hubbard, it would be illegal. So it was always agreed upon throughout this project that both Miss Sullivan and Gerald Armstrong worked for Mr. Hubbard.


In fact, Mr. Hubbard told her that. There will be direct testimony that Hubbard instructed her that she was his personal employee as was Armstrong, and the fact that Mr. Armstrong brought the box of documents to her, told her that they were headed for the shredder and what should we do with them. That is basically her testimony.

With regard to Mr. Franks, it simply involved this entire shredding operation. He was the head of the church at the time. The reliance on Hubbard’s background, the fact that the entire church revolved around L. Ron Hubbard, relied upon his background, That all the orders came directly down from Hubbard if that becomes an issue.

Mr. Dincalci, the fact that Mr. Dincalci was the actual owner of the photographs that were taken from Mr. Armstrong, stolen from Mr. Armstrong by church employees which goes to the unclean hands defense.

With regard to those witnesses, that is it.

But I submit, Your Honor, that a continuance for more than a day or two where we have already been at this for over a week is something that the court should seriously consider with regard to the imposition on the defense. The plaintiff has known throughout this litigation exactly who these people are and, in fact, because of the nature of the way the plaintiff operates, it has extensive files –

THE COURT: Well, be that as it may, is there somebody else that you –

MR. PETERSON: He hasn’t designated the witnesses.


MR. LITT: Your Honor, once we get beyond those three witnesses, I have examined the defendant’s witness list and I cannot quite honestly tell what is hype and what is real in these other witnesses. I mean, the three I named I could sort of make an assessment.

I assume that Joyce Armstrong is a serious witness.

Is Omar Garrison — his deposition has been taken. I don’t know if he is going to come in live for the defendant.

MR. FLYNN: We intend to call him.

MR. LITT: He is not willing to make himself available to us live.

But then there is just a list here, Your Honor; John Nelson, Vicky Livingston, David Mayo. I am familiar with many of these people. I am also familiar with the fact that from what I know about them, they don’t really know anything about this case and I just can’t tell who he intends to call and who he doesn’t. At this time do you know who you are going to call?

MR. FLYNN: I don’t know, Your Honor. I anticipate, based upon the evidence that I know, that a directed verdict, as I have previously submitted to the court, will probably be appropriate on virtually every count, and the simple fact of the matter if the documents were given to a journalist, I think that is probably the predominant fact in the case. I believe we will be entitled to a directed verdict, and I simply do not want, contrary to Mr. Litt’s representation, to expand the case bigger than need be.


However, if allegations are made by either Mrs. Hubbard or representatives of the church with regard to certain documents, the nature of the privacy  interests of Mrs. Hubbard or L. Ron Hubbard, then we will have to expand on those issues. But at the present time, I simply don’t know.

THE COURT: What if we try the plaintiffs’ case; I don’t know what the posture of the case will be then. If it goes then to the defense and then he can identify these witnesses and maybe take a short break at that time.

MR. LITT: What we would ask then, Your Honor, is that these three witnesses appear to be serious witnesses by Mr. Flynn. One of the points I was making earlier is we feel that we have to recast, to a certain extent, our own case to deal with the reasonableness of our conduct in the affirmative suit itself. We would like the opportunity to take at least three witnesses who can be identified by Mr. Flynn, and then after we rest our case, if there are witnesses who we can demonstrate to the court we didn’t have reasonable opportunity to examine, that question can be dealt with at that time. If necessary, we are prepared to work weekends to do depositions or whatever is required. We are not trying to slow anything down, so the procedure that we would propose is that we have the opportunity to take these three depositions with the opening at the end of our case when Mr. Flynn can perhaps and after there’s been a ruling on a directed verdict, which we don’t expect him to win, and if Mr, Flynn has additional witnesses, that he can inform


us and the court at that time, and we can then take up any issues at that time before the court.

THE COURT: How long will it take to depose these three people? It doesn’t sound like it is all that complicated.

MR. FLYNN: Franks is in New York.

THE COURT: When is he going to come out here?

MR. FLYNN: He is a cooperative witness and he was going to come out voluntarily, but the present status of the situation is I have told him I don’t know –

THE COURT: I am not going to have him come out here specially — if it gets to that, then you can have some time to take his deposition.

MR. LITT: That is fine.

Miss Sullivan, Mr. Flynn says, is here. I didn’t know that, and I believe that Mr. Dincalci lives in the area, so for the two of them, I presume that should not be a problem. Miss Sullivan’s deposition, I would expect, would take a full day.

Mr. Dincalci, if he is only being called on the photograph issue, I don’t expect would take a lengthy period of time. I don’t know for sure if the offer of proof is limited to that. I’d just like to get that clear.

MR. FLYNN: Your Honor, apparently Mr. Dincalci is only going to be limited to that one fact.

I would also bring to the attention of the court, if we are now going to reopen discovery, we have tried from the outset to take the deposition of David Miscavige. He, we believe, is the principal party in all of this litigation.


He runs the church. He works for L. Ron aubbard, and we have sought to depose him since the beginning of the case, and he’s never been made available. He communicates on a daily basis with Sherman Lenske, an attorney here in Los Angeles, who at one point, maybe he still does, had an appearance in this action.

If they are going to take the deposition of Laurel Sullivan and I am going to make her available, I submit, Your Honor, that we should be able to take the deposition of David Miscavige with regard to the following points:

If Mr. Miscavige tells the truth, he will testify that L. Ron Hubbard has known from day one about Mr. Armstrong’s involvement with the biography project. That he was getting regular reports throughout the biography project through Mr. Miscavige. That he has been informed on a daily basis of everything that’s occurred in this lawsuit which goes to his availability as a witness, his privacy interests, and virtually every issue that permeates the case.

If they are going to depose Laurel Sullivan and we are going to make Laurel available, I submit to the court that they should make David Miscavige available for a one day deposition.

MR. LITT: David Miscavige is not going to be called as a witness by us. We have no power whatsoever over David Miscavige. David Miscavige is not an officer or director or employee or managing agent of the Church of Scientology of California or of Mrs. Hubbard, and we simply have no ability to produce him.


Obviously if we were using him as a witness, he would have to be made available. I have no quarrel with that if he was voluntarily cooperating with us to be a witness, which as far as I know he wouldn’t know anything about this in any event. It is an inconceivable request.

It is the same as the request that they made for us to produce Mr. Hubbard. We have no ability to produce Mr. Hubbard. There are a whole lot of people we have no ability to produce. All you can do in a case if you are going to use someone, then the other side should have the opportunity to use them. That is the most we can do.

MR. PETERSON: This is an obvious red herring. The simple point is Laurel Sullivan is going to be his witness. If he wishes to withdraw Laurel Sullivan as his witness, then we won’t take her deposition.

But Mr. Miscavige is not going to be our witness and he has no knowledge of these facts.

THE COURT: Well, if he is not an officer or director of the corporation, if he has some other informal role, I don’t know what it is. It seems to me that it doesn’t sound like he is that percipient to facts that are in issue here.

At this time without prejudice to renewing it later, I will deny that request.

How much time are you going to need to check the exhibits down here? I assume we can make an order that they will be made available to you, all counsel.

MR. LITT: Here is what I think, What I would propose on the exhibits, Your Honor, is that the defense have a day


down there and then we have a day down there after we get their list, and the reason I say that is one, I want to correct one misstatement of fact. We do not have by any means all the documents that are under seal.

Mr. Armstrong took two or three thousand originals which, by his own testimony, he didn’t copy before he took them and they are under seal in the court and there are no copies available to us whatsoever.

What we need to do is we need to see what documents they intend to introduce. We then need to go to the materials because there may be related documents in order to put certain things in context that we need to use, and we essentially need at least a full day to do that after we get their documents list.

Then, in addition, of course, as we have indicated, there are documents that we intend to introduce which we have not yet determined, which I think can be determined by — well, we really need to go down and look through the materials that are not available to us as well, so I think we could determine that by Thursday and we could have looked at their documents by Thursday.

If tomorrow they go through the documents and first thing Wednesday morning or like 9:00 a.m. Wednesday morning have a list to us, that we can then go  hrough them, I would say, by Thursday we could know, have reviewed those documents, know where we stand on these documents as well as identify what other documents we would intend to introduce and provide that list to them.


I don’t know how the court wants to handle the issue of rulings on admissibility of documents, and there are other issues related to the documents.

THE COURT: That can be done in due course. If it is going to be a court trial, there is no real big problem. It seems to me we deal with it on an ad hoc basis as each exhibit comes up.

MR. FLYNN: I suggest we take the depositions on the weekend, one deposition now being of Laurel Sullivan.

MR. LITT: And Mr. Dincalci.

MR. FLYNN: but that is only limited to the photographs. That can be done on the weekend at the same time.

On the document issue I think we should simply both go down tomorrow. We will designate the ones we want.

They can segregate the ones they want. Ours are not that much. We have given them the list this morning.

The Naval documents are voluminous and we will refer to them as one packet because the only way we can prove the substance of our claims is to look at the entire Naval record. There isn’t one document you can look at.

MR. LITT: I can go through in terms of some suggestions I have.

THE COURT: Well, I would think in order to make this more logical, the thing to do, I think you should go down there and make a list and premark your exhibits; Plaintiff’s 1, 2, 3 or whatever and Defendant’s A, B, C and so forth, and that will save us some time as well and make just a general brief description of what it is so the clerk will have it


ahead of time, also.

We will also, of course, have to make some arrangements with the clerk’s office for getting those matters up here. I don’t know. I haven’t talked to anybody
downstairs. I understand they want to talk to me, but I know what they are going to tell me. They are going to be complaining about the situation and the costs that may be involved and so forth, but I have been putting that off. I don’t want to get to talking to them or be influenced by them on this thing. Anything they tell me, they can tell you, too,

MR. LITT: We do not particularly care to be down there going through the documents because we will be taking certain people with us who have familiarity with Mr. Hubbard’s archives, who can help us to put things in context, with the defendant and his lawyers present. So we would suggest that that be done for obvious reasons on different days.

That the defense mark their exhibits tomorrow down there and provide us with a detailed list, and then we will do the same the following day, and on Thursday provide them a list.

THE COURT: Well, why don’t I just recess the trial and start it on Monday, the 30th, as a court trial?

MR. LITT: That is acceptable.

THE COURT: I know Mr. Flynn is out here from the East Coast, but if it is going to be a court trial, it is going to be a lot shorter than a jury trial.

MR. FLYNN: My client has also lived with this and


he has had to drop his employment in order to defend the case. His wife has basically dropped her employment.

THE COURT: We are still going to try to get the case moving. It seems to me if you go down and premark your exhibits and the plaintiff can premark his exhibits. You can set up these depositions Thursday and Friday and do whatever else you have to do, and then we will be ready to go on Monday, the 30th, and we can get something to keep us busy the next four days.

MR. LITT: May I make a couple of other inquiries? The depositions, is it possible — I am concerned about having transcripts prepared which is some difficulty.

Does Mr. Flynn know whether or not either of his witnesses are not working and therefore could be available on Friday?

MR. FLYNN: I will have to check with her, Your Honor.

I have no idea. I know she is working full time. I believe the whole case is an imposition on her. I am going to ask her to voluntarily appear.

THE COURT: Maybe she’d do it on a Saturday to avoid losing work.

MR. LITT: Yes, if she is working, then we will do it on Saturday.

MR. FLYNN: Or in the alternative, if he will pay her day’s wages.

THE COURT: You can check with him. You have a better chance of getting a transcript –

MR. LITT: Yes, I think we’d be prepared to do that,


but I’d have to check with the client.

MR. PETERSON: Also Your Honor, Mr. Flynn has indicated that Miss Sullivan is under subpoena by his office. If he contacts her and she is not willing to appear for this deposition on her own, that he give us her address to allow us to subpoena her.

MR. FLYNN: I will do everything in my power to produce her because the address is a very sensitive issue.

THE COURT: I can understand. Considering the emotions involved in the case, we won’t get involved in that. You make her available.

You tell her if she doesn’t do it that way, then you will have to take some other steps to see that she gives her deposition.

MR. LITT: There are a couple of other questions that I have.

THE COURT: Let me think in terms for the moment of the kind of order we are going to need to give you people access to these records. I assume we will just make an order that the defendant, Mr. Armstrong, and his counsel, I assume, will have access to the records in the clerk’s office between 8:00 and 5:00 tomorrow.

THE CLERK: I don’t recall now what the original order was.

MR. LITT: There is now an order that says Tuesdays and Fridays, 9:00 to 3:00 on 24 hours’ notice.

THE COURT: Well, tomorrow is Tuesday. Will 9:00 to 3:00 give you enough time?


MR. FLYNN: I think so, Your Honor.

THE COURT: And it is now 3:00. Is that enough time? Is that enough notice?

THE CLERK: I am sure that is okay.

THE COURT: And how much time do you want? Do you want Wednesday from 9:00 to 3:00?

MR. LITT: Wednesday from 9:00 to 4:00 and we would like, because we may need to do some follow-up, we will give the list on Thursday, but we’d like Thursday morning also if we need it. I will tell you that Mr. Nuttke, while a very nice man, if the order doesn’t say it, we will have to come back and have it say it.

THE COURT: Wednesday 9:00 to 4:00 and Thursday 9:00 through 12:00.

Where do you want to exchange these lists? Is there some neutral ground?

MR. LITT: We would ask that there be hand delivery to us by 9:00 a.m. Wednesday morning, if that can be arranged or 9:30 a.m. Wednesday morning by hand delivery, however they want to deliver it by hand. We will hand deliver by noon Thursday — 1:30.

MR. FLYNN: That is fine,

THE COURT: I guess that is neutral ground.

MR. LITT: Now, Your Honor, there is a matter that we never reached because we reserved it.

THE COURT: We have been going for a long time. For the reporter’s benefit, if it is going to be at all lengthy, we will take a recess.


MR. LITT: Well, I think the things I am going to raise might take another 10 to 15 minutes.

THE COURT: All right, we will take a recess.


MR. FLYNN: Your Honor, I have just a couple of questions.

THE COURT: All right, we are back in session.

MR. FLYNN: We’d like permission for Mrs. Armstrong to come into the room where the documents are so she can basically work in a secretarial capacity to make notes.

THE COURT: All right.

MR. FLYNN: And if possible, we’d like to go in from 9:00 to 5:00 rather than 9:00 to 3:00.

THE COURT: How about 8:30 to 4:30?

MR. FLYNN: Okay, 8:30 to 4:30, and Friday morning from 9:00 to 12:00.

THE COURT: Friday morning 9:00 to 12:00.

THE CLERK: They are not open until 9:00.

THE COURT: Okay, 9:00 to 5:00 tomorrow and Friday 9:00 to 12:00.

MR. FLYNN: Mr. Dincalci is working in San Francisco, so apparently we are unable to produce him.

MR. LITT: Does that mean he is living in San Francisco or comes down on the weekends or what do we have here?

MR. FLYNN; I understand he is up in San Francisco, Your Honor.

THE COURT: Well, you can renew your request at the conclusion of the plaintiff’s case, and then if he is going


to come down here, maybe you can get — it is a very limited subject that he is going to testify about anyway.

MR. FLYNN: That he owned the photographs that were taken.

MR. LITT: It appears so.

THE COURT: Well, you may rethink your decision as to whether you want to depose him then.

MR. LITT: All right. As long as it is understood that before he testifies we will have the opportunity in some form, then we are not insisting that it be this week.

I am not saying that we will demand the opportunity, depending on what happens. We just want to know that we have the opportunity.

MR. FLYNN: And I assume that Laurel Sullivan is going to be limited to one day?

THE COURT: Yes. As long as it is a good faith effort to submit the deposition. As long as you don’t spend all day arguing between counsel. You can save your argument for when you come back to court.

MR. LITT: I understand.

What I wanted to move to at this point, and the court may want to defer this issue, but I wanted to raise it is that there are questions that were raised in our original motion in limine regarding the documents concerning their being sealed, their being subjected to discovery. There is, as the court may be aware, a present order that there is a requirement for a Special Master, procedure for the


discovery of any documents in this case in which various issues can be asserted. While the court has ruled that it is going to permit them in this case, the question of whether they would be discoverable in other cases is a separate issue. The issue here goes to Mr. Armstrong’s state of mind. The issue in other cases goes to factual issues and allegations in support of plaintiff’s complaint. We just want it to be clear one, that the order which I believe was an order of Judge Cole that set up a discovery procedure remains in effect for all documents.

THE COURT: Well, I am not interfering at this time with Judge Cole’s order as it may relate to other cases. At the same time, I assume that we are trying the equitable issues along with the legal issues all at the same time, and the court will have to make some orders that may bear upon that in the course of whatever it does on this case, and so –

MR. LITT: That is fine. I understand.

MR. PETERSON: Also, since Mrs. Armstrong is going in, that she also be bound by the court’s order of nondissemination of any of the information or documents.

THE COURT: Yes, I would make that order, that if she goes in there, it is on condition that she not disclose anything that is therein except in court or to counsel.

MR. FLYNN: That is not the order as I understand it.

MR. LITT: That she abide by the order.

THE COURT: I assume that is the order. What is the order?


MR. FLYNN: Anyone is free to talk about the contents.



THE COURT: It seems to one that she is going in there for a limited purpose, and that is acting in a secretarial type capacity, and that is that she will be foreclosed from discussing anything that is disclosed there except with counsel and with her husband and in open court. But she is not to disclose otherwise without further order of court.

MR. LITT: We would also like — Mr. Flynn has not had access to these documents, assuming that the court is now allowing him to go into them, we also would like an order that requires that he has seen these materials under seal. He may not disclose the materials or the contents of the materials for any purpose outside of the use in this proceeding. That is the order that exists presently with respect to counsel.

THE COURT: I don’t have any problem with that, at least until the court decides what to do with these exhibits. It seems to me at this point we are talking about this case.

He obviously is involved in a myriad of other cases involving, I guess you and Mr. Peterson, and it seems to me that at least until we have resolved the issues in this case, that probably any examinations will be limited to your use in this case, Mr. Flynn.

MR. FLYNN: I essentially have no quarrel with that.

The problem that I do have is that I am involved in other litigation. I am intimately familiar with the


documents.  I am intimately familiar with Hubbard’s background, and I deal with co-counsel all over the country and I speak on these issues.

In fact, in connection with one speech a contempt action was brought against me. My right of free speech to speak about Hubbard is something that the First Amendment guarantees me.

The realistic problem for me is that if the court enters an order, at some subsequent point in the future if I say anything, a contempt action will be brought against me. That is the history of what this organization has done, so in terms of the language of the court’s order, that could be very significant because I already know what is in the documents. I have been speaking about them for four years in front of courts, legislative bodies and et cetera. To curtail that right would be curtailing something I have been doing for four years.

I will make a good faith representation to the court that pending this litigation, I don’t have any present intention to go out and speak about the contents. With regard to discussions with other lawyers, I have those on a daily basis. What I don’t intend to do is go into the court, look at the documents and then go out and speak about them. I already know what is in there, but I just don’t want a contempt action brought against me in the future because of the technical language of the order.

MR. LITT: It is not a question of technical language. It is one of the problems that we raised as to why we felt


Mr. Flynn should not be provided access to the documents in which he says it is impossible for me to sort these out, and it is unfair if he is going to be given access to these, and the court will see that these are private documents, and he is being permitted access to them for this case, it is Mr. Flynn’s obligation to either be able to say that he will be capable of following standard orders that it be used for only purposes of this case, the information that he learns and the contents that he learns, and that it not be disseminated for purposes of any other case, and it is unfair to us for Mr. Flynn to say, "Well, I know so much that it is impossible for me to say that. Therefore, I will go in and intrude on your privacy. I will go through all of these documents," and then he will say, "I don’t know whether I was using that or not."

That is not fair.

THE COURT: Well, that would be true in an ordinary situation, but here we have a situation where these matters were already delivered to him.

MR. LITT: He says that he doesn’t recall what those documents said and what he learned from those materials.  He is now going to go back to them and he has made speeches, in essence, what has happened is that Mr. Armstrong tells him what is in the materials and then he has given speeches about them.

Now we are not asking for anything unreasonable, but the order that we are asking for is a standard order under the circumstances. Mr. Flynn is a plaintiff against


Mr. Hubbard.

Mr. Flynn represents enumerable parties in litigation who are seeking these documents with Mr. Flynn or associates of his representing these parties.

The court, in order to protect the privacy of the documents, the court has set up a procedure to insure that their privacy is maintained and it is not fair. We
did not create this situation.

We believe that we were the victims of this situation, and it is reasonable for us to request that he be bound by the same order that any other counsel in his
position would be bound by, and if Mr. Flynn cannot do that, then I think the onus is on him to either be able to do it or to suggest that somebody who can do it handle this aspect of the case.

That was what we suggested originally and he opposed that, and the court has ruled on that and we are not reraising that. The order that would normally be entered in this respect, which I think is clear, applies to Mr. Flynn just as it would to any other counsel.

MR. FLYNN: I think I can obviate the problem. I will agree that I won’t quote or disseminate any material from any documents presently under seal unless they are already in the public record.

MR. LITT: No. The public record doesn’t solve it because we are moving — that is the next item I was going to get into.

THE COURT: I don’t know what is in the public record.

MR. FLYNN: Well, that at least protects me because


if a contempt action is brought against me, then I can say it is in the public record.

THE COURT: But if it is put in the public record by you, then we are sort of hoisted by our own –

If it has been put in the public record by someone other than you, but if it is put in the public record by you –

MR. FLYNN: Well, the public record, there seems to be some misconception. The public record predated Mr. Armstrong leaving the church. We collected many documents prior to Mr. Armstrong ever leaving the church.

MR. LITT: Very few of these, very, very few.

THE COURT: Well, I will accept the representation by Mr. Flynn that he is not going to do anything of an untoward nature that would violate the theory and the principles of what we are trying to deal with here. He is subject to the protective order.

At the same time, there are some things that I cannot make an order against. I can’t order somebody to do the impossible, and he is not to — during the pendency of these proceedings until further order discuss or disseminate to other people, other than people like his client or in court here, matters contained in the sealed records which were not in the public domain before Mr. Armstrong first went to Mr. Flynn or Miss Dragojevic, her firm. Anything that might have been in the public record before then is nothing I have a right to do anything about.

MR. LITT: The next part of this same general issue,


Your Honor, has to do with the question of the conditions under which any documents among the sealed documents are admitted into evidence.

We would ask that, and I don’t know if the court wants to resolve this now or wait until we begin the trial or what or wait until the first document comes in, so I will just raise it and you can tell me.

We made a series of requests, the first of which was that any documents introduced into evidence shall be placed under the seal of the court when they are admitted into evidence. It is obvious, I think, that if what happens in the course of this trial is that Mr. Armstrong and his counsel are able to utilize the processes of this court and the existence of this trial to introduce the materials, which are private which is the whole gravamen of the case, into evidence publicly, that the whole purpose of the case will have been completely undermined. It is standard in trade secret cases and in other confidentiality cases that the procedure we are requesting be followed, and we would ask that it be followed here. It is critical to the protection of the privacy of these materials.

THE COURT: Well, I haven’t got the impression that the defendant intends to do that. They have indicated there are only certain documents out of this massive collection that they intend to use.

MR. LITT: They are private documents that they intend to use.

THE COURT: Okay. The point is they haven’t said that


they intended to use all of them. They want to use a select group, and the court will deal with it on an ad hoc basis as far as that is concerned. My disposition is that basically this is a public procedure, a trial, and matters which are of relevance and are material are to be made a part of the public record.

Now, if there is something that for some peculiar reason or some extraordinary situation that there is something that specially is a problem about, I will be glad to consider it and make the possibility of further orders, but my basic reaction is that this is a public courtroom. It is paid for by the taxpayers. I don’t know what is in these documents.  If it is something that strikes me as being something that shouldn’t be bruited about, I will give consideration to it certainly, but because you put a characterization on this as being private writings, that could encompass a lot of things, many of which would be harmless and neutral and matters on which there is going to be testimony about here in the record, which is a public record, so I don’t know. I will have to deal with it on an ad hoc basis, counsel.

MR. LITT: I don’t know how the court wants to deal with it. When all the documents are marked, does the court want to review them at that time or — I am very concerned about this, Your Honor.

I really feel that the whole purpose of this proceeding and the reason that this proceeding was brought will have been totally viciated if the documents which we will establish Mr. Armstrong had no right to take and no


right to give to anyone, and he did so, then they were brought to the court and now, in effect — let me obviate your problem. He is going to give you a list by Wednesday of what he wants and you are going to give him a list on Thursday, whatever.

You come into court on Monday. We will have to get these exhibits here and there are some that you want me to review. All of them you want me to review I can do that. That is no big problem.

MR. LITT: Thank you, Your Honor.

The next question, Your Honor, and again I don’t know if the court wants to deal with this now or wait, is that when we serve our supplemental exhibit list, there may be as a result or the rulings of the court and the way that the case will be restructured some additional witnesses that we will list. I do not expect it to be many, two or three, because we feel we have to address certain issues which we previously didn’t feel, and we will serve that on the defendant as well on Thursday if that is acceptable.

MR. FLYNN: Your Honor, if there are going to be additional witnesses here, I am in the position of dependant, and I have had to make an offer of proof as to what my witnesses are going to say when I don’t even know what plaintiff’s case is going to be. I think I should be entitled to know now and be afforded the same opportunity to take their deposition if that becomes a necessity. I think if Mr. Litt has an idea of who these people are, he should tell me.

THE COURT: Who do you intend to call?


MR. LITT: I am not certain that it will be anybody additional, Your Honor.

We will be glad to provide the names by Thursday and anybody that we use we will make available for deposition if they want the deposition. I don’t have any problem with that.

THE COURT: Make it known to counsel on Thursday and try to work something out with them if there is somebody you want to call.

MR. LITT: The next item, Your Honor, and again this may be an issue that best waits is that in the pretrial identified exhibits if there can be stipulations as to authenticity on various matters, it can save, I think, everybody’s time. In the formal setting between counsel before the case we were not able to make much headway on that issue.

There are various items. There is a settlement agreement between Mr. Garrison and the publisher of the book. There is the contract between Mr. Garrison and the publisher of the book.

There is the letter from Mr. Hubbard which the court read the other day which we have a handwriting and fingerprint expert to testify about it and  authenticate. I don’t believe it has ever been examined by experts for the defendant, and I would suggest at some point for both sides that we establish a procedure whereby we see what stipulations can be had with respect to authenticity. That would shorten the trial. Otherwise, we would call three


witnesses to authenticate the letter from Mr. Hubbard.

We are perfectly prepared to do it, but I think it is unnecessary. But I think there may be other things.  I just wanted to raise that and see if the court or counsel –

THE COURT: Can you tell me about any of those exhibits?

MR. FLYNN: As to the settlement agreement, we will stipulate to it and the contract with Garrison we will stipulate to.

The letter from Hubbard we won’t.

THE COURT: Are there any other documents, Mr. Litt, that you are planning on introducing at this time on your case in chief?

MR. LITT: Yes, Your Honor. If I can just have a moment, I will find my list. There are a series of documents, most of which I don’t believe are — there are the bills from the investigation firm which we intend to introduce into evidence to show the investigation expenses related to finding out whether Mr. Armstrong had documents to which he was not entitled.

We are obviously not asking for stipulations to admissibility on relevance grounds, just foundational grounds.

THE COURT: Well, I understand that you are probably going to have to put somebody on to testify that they paid them.

MR. LITT: We can. Every exhibit we have we can authenticate, Your Honor.

We have a series of documents. I don’t think


most of them are in issue. There was an exchange of letter between Mr. Armstrong and Mr. Peterson in which Mr. Peterson wrote to Mr. Armstrong concerning whether he had any documents.

Mr. Armstrong responded to him. We intend to introduce those into evidence.

There are board minutes from the Church of Scientology. They have been listed out.

There are various receipts signed by Mr. Armstrong related to purchases he made for which moneys were provided to him, purchasing materials for the archives which demonstrate that he was, in fact, an agent of, an employee of the Church of Scientology of California. They are all listed. We can present foundational evidence on all of this.

THE COURT: You can cross-examine him on all of this as far as that goes.

MR. PETERSON: Mr. Flynn has been provided with a list of these exhibits. Maybe in the next day or two he can look at them and let us know by the end of the week if there are any that he can stipulate to and if not, we will present evidence.

MR. FLYNN: That is fine, and the same would go reciprocally.

MR. PETERSON: And we would do the same with his witness list.

THE COURT: Very well.

MR. LITT: Now, there are certain documents under seal, Your Honor, which we, at least, which we will want to deal with in advance. For instance, the materials which the court


ruled the other day were privileged are on the list of documents that Mr. Flynn submitted today. I suppose we can deal with that again, but certain things, at least, relate to privileged matters.

THE COURT: You mean those tapes?

MR. LITT: Yes.

THE COURT: Well, of course, that I suppose won’t come up until the defendant’s side of the case; will it?

MR. LITT: I don’t know whether they may intend to use any of these in cross-examination or not, Your Honor.

MR. FLYNN: It may, Your Honor, for the following reason:

A major issue in the case is who Armstrong worked for.

We will be bringing up through cross-examination of the plaintiffs’ witnesses, depending on who they put on, what we consider to be fairly strong evidence that he worked for Hubbard. The tapes virtually conclusively proved that everyone worked for Hubbard. There are statements made on the tapes –

THE COURT: You don’t need to go into that. The question merely is if you are going to be using them, then you should be prepared to demonstrate that there is no privilege attached to them. Maybe the facts are undisputed that they were given to him with the thought that they were blank tapes. I don’t know whether that is going to be developed or not.

Then it is a question of who was present and what the purposes of this meeting were, and obviously there were attorneys present; whether that causes a waiver of the privilege, I am not sure.


MR. FLYNN: We will be prepared to go into that.

THE COURT: Do you have any briefs on that? I think the plaintiff does.

MR. LITT: Your Honor, in our motion in limine we briefed the issue extensively as to the attachment of the privilege. We did not extensively brief the waiver issue.

The court indicated the other day that a waiver has to be a knowing and intelligent waiver and by Mr. Armstrong’s testimony, there was no knowing waiver. We can brief the issue further.

I am not prepared to argue it now.

THE COURT: I’d rather look it over and let counsel have a chance to maybe see if he has anything to submit on the issue.

MR. FLYNN: We intend to brief it, Your Honor.

There is one case which seems to be pretty much on point which I can give you the cite on.


MR. FLYNN: Morley versus McFarlane, and it is at 647 Pacific 2d 1215.

THE COURT: Got an official California reporter?

MR. FLYNN: It is a Colorado Supreme Court case.

THE COURT: Well, I don’t have that.

MR. FLYNN: Oh, I can leave you a copy of it.


MR. LITT: If a copy gets left, I would appreciate if I am provided a copy, also.

MR. FLYNN: I will have to Xerox it, Your Honor.



MR. LITT: And on the question of access, could the order for access for us say that counsel and any three people who we designate as people who need access for purposes of the case? I am not sure who we are going to bring in, and again Mr. Nuttke is a bit of a stickler.

THE COURT: How much room do they have down there?

MR. LITT: They have room for that many people.

THE COURT: All right, counsel and three people.

MR. LITT: The other matters, and again I can take them up later, there is some deposition testimony that we intend to introduce. We intend to introduce substantial portions from Mr. Armstrong’s deposition.

We also intend to introduce at least one other deposition, and on that deposition there are objections that we have to various cross-examination. I don’t know exactly how the court wants to handle it. We can provide marked copies of the deposition indicating what we intend to introduce and indicating the portions of any other examination that we object to or we can have it read in and deal with it. I just don’t know how the court would like to handle it.

THE COURT: I am not sure it is going to be a whole deposition that you are going to read or just a few questions and answers.

MR. LITT: It is not the whole deposition, but it is a substantial part of a deposition. I would say that it probably comes to 40 or 50 pages of a hundred page deposition.

THE COURT: Then I think the best way to handle it


is have one of you ask the questions and let Mr. Peterson read the answers from the witness stand, and if you have got a copy of it, I will follow and rule on the objections as they are made.

MR. LITT: That is fine, and the last thing that we wanted to state to the court is that in light of the rulings that have been made and especially in light of the fact there has been an issue about harassment is that one of the determinations that has been made is that I will not after today and in the course of the trial act on behalf of both Mrs. Hubbard and the church. Mr. Peterson will act on behalf of the church. I will act on behalf of Mrs. Hubbard, and the reason for that is that by the defendant’s own allegations, there is no claim of any harassment by Mrs. Hubbard, and since the court is considering these and we are now in a position where potential defenses against one party may not be applicable against, the other, we felt that the case should be reordered at this point, so we will continue to work together. We don’t intend to duplicate efforts, but I did want to indicate –

THE COURT: All right, then, you are withdrawing as counsel for the church and Mr. Peterson — are you attorney of record?

MR. PETERSON: I am attorney of record, Your Honor.

THE COURT: All Right.

MR. LITT: It is no problem. Thank you, Your Honor.

MR. FLYNN: There is one other point, Your Honor.

Apparently from what Miss Dragojevic tells me in order to


separate the exhibits from the boxes they are presently in, which we are going to have to do to mark them and segregate them, we need permission from the court to put them in a separate box.

THE COURT: Well, that is fine with me. I will be glad to make an order that any exhibits that are being premarked by either side can be separated from the bulk of the exhibits so that they can be brought up here in due course eventually and not the whole bunch being brought up here.

MR. LITT: In doing that, Your Honor, we would like as each exhibit is removed that it be indicated what box it came from because some materials came from Miss Dragojevic’s office. Some materials came from Mr. Flynn’s office, and we don’t want to get them mixed up in terms of any proof in the case.

THE COURT: In the way they are now, how are they identified? I don’t know.

MR. LITT: They are in boxes that they were sent in, so there were two boxes sent by Contos & Bunch and those have address labels on them "Contos & Bunch." And then there were three boxes sent by the Law Offices of Michael J. Flynn, and those are in boxes marked with the address label of Mr. Flynn, so that the boxes that they are in are what they arrived in and they are self-identifying as to where they came from.

THE COURT: I guess when you identify them, you can put "CB" or "MF" or something like that beside them. Just use the initials "CB" in addition to the description of the



MR. LITT: Thank you, Your Honor.

THE COURT: Before you gentlemen run away and counsel, it has been brought to my attention by the clerk that Mr. Armstrong lodged a certain letter from Mary Sue Hubbard to L. Ron Hubbard. Apparently it was in a sealed condition.

THE CLERK: Yes, Your Honor.

THE COURT: And is it separate and apart from these other five boxes?

THE CLERK: I believe it was there, but nobody has ever opened it. They said Judge Olson deferred it to the trial court.

THE COURT: Is this something that either side wants to use in this case?

MR. LITT: We want to take a look at it. It is a letter identified by Mr. Armstrong. It is a letter of Mrs. Hubbard. It is a letter he took to Mr. Flynn in 1982.

His description of it is that it is a particularly personal letter. We have always intended not to use the letter because of its private nature. I am not certain that we are going to maintain that position, and therefore we probably want to look at it.

Mr. Flynn has already seen it. I have never seen it. Mr. Armstrong returned that after the order of the court was entered, and so we do want the order to say that we have the right to have it opened so we can examine the letter.

THE COURT: It is all right with me. Apparently written


by your client. I would think she might remember what was in it.

MR. LITT: It is a letter from 1953.

THE COURT: Oh, 31 years old.

MR. PETERSON: There is a lot of this stuff that is that old.

THE COURT: The letter may be opened by counsel. So be it.

MR. LITT: Thank you, Your Honor.

THE COURT: All right, then we will recess these proceedings until Monday, the 30th, and let’s go forward at that time.

MR. LITT: Will that be at 9:00 a.m.?

THE COURT: 9:00 a.m., yes, indeed.

(At 3:40 p.m. an adjournment was taken until Monday, April 30, 1984, at 9:00 a.m.)






NO. C 420153
) ss

I, Nancy L. Harris, Official Reporter of the Superior Court of the State of California, for the County of Los Angeles, do hereby certify that the foregoing pages 328 through 392, comprise a full, true, and correct  transcript of the proceedings held in the above-entitled matter on Monday, April 23, 1984.

Dated this 30th day of April, 1984.
/s/ Nancy L. Harris, CSR #644
Official Reporter