CAN vs. Jason Scott: Motion for Leave to File Amicus Curiae Brief

UNITED STATES COURT OF APPEALS

FOR THE NINTH CIRCUIT

CULT AWARENESS NETWORK,
Appellant,
v.
JASON SCOTT,
Respondent.
No. 96-35050

MOTION FOR LEAVE TO FILE AMICUS CURIAE BRIEF
Pursuant to FRAP 29, the undersigned nonprofit organizations joining herein, briefly described at pp. 11-12, infra, request leave to file a brief (conditionally submitted with this motion) as amicus curiae, on one issue:

Whether, in light of

a nonprofit association may be held vicariously liable as a "principal," and assessed compensatory and punitive damages, based solely on a volunteer's alleged acts and omissions performed on her own

Interest of Amici

Amici limit their brief to public policy and First Amendment impacts of the District Court's unwarranted expansion of vicarious responsibility of nonprofits. This case involves alleged communications by an unpaid volunteer, unbeknownst to the nonprofit association. The trial court's refusal to consider factors unique to the relationship between a nonprofit and a volunteer concerns amici.

Appellant, Cult Awareness Network ("CAN"), repeatedly raised the vicarious liability issue, in its motion for summary judgment, pre-trial brief and post-trial memorandum. CAN did not raise the First Amendment issues below, but Constitutional issues are not waived and amici are informed that appellant will raise them here.

Public policy consequences of the decision below will recur in other contexts if the trial court's decision stands. The risk of "ascending liability" for acts or omissions of volunteers vitally concerns nonprofit associations in their day-to-day work, but it receives dangerous new impetus from the decision below, all the more so when vicarious liability, as sustained by the District Court, threatens First Amendment freedoms.

In order to leverage their ability to fulfill their goals, not-for-profit associations commonly rely in large measure on unpaid members, unrelated persons who support their ideals and concerns, and other volunteers, in contrast to commercial or for-profit enterprises that rely largely on employees. The doctrine of vicarious responsiblity is well established as to agents that are paid "servants" but has only limited applicability to unpaid agents or to nonprofit organizations using volunteers. That expansion of liability raises serious concerns for amici.

As Professors Gaffney and Sorensen point that:

authority and the right to control are often ambiguous and multidirectional in nonprofit groups. Confusion and jurisdictional overlap are common--a circumstance not too surprising when the participants have no economic stake in how the lines of authority are run. Moreover, authority and control, rather than being fixed, may shift with time, circumstances, and personalities. In contrast, prerogatives and lines of authority in profit organizations tend to be definite and distinct.

Even as to vicarious liability applicable to commercial enterprises under Washington state common law, the District Court did not apply tort principles appropriate to an unpaid agent. The unpaid wife of a Texaco dealer -- when she drove to the bank to deposit receipts -- was held not the agent of Texaco, Inc. despite an extraordinary measure of control over the filling station.

The court below also ignored distinctions made by the Restatement (even in the case of for-profit principals) between "servant" and "non-servant" agents. And it regarded as irrelevant unique aspects of relationships between nonprofit association and volunteers.

A treatise advising associations how to insulate themselves from liability for improper acts of agents and chapters, discusses careful monitoring while conceding ambivalence:

Unfortunately, the legal result of such monitoring is that the more closely an association controls the activities of its chapters the more likely it is to [be] held responsible for what the chapter does, ....
To balance these considerations sensitively, nonprofit organizations need as much clarity as the law can provide and recognition of unique characteristics of the non-profit sector and its reliance on volunteers -- characteristics that bear directly on judicial policies that underly vicarious liability doctrine.

Amici support appellant, CAN, because the decision below raises matter of public significance by exposing all nonprofit organizations to expanded liability, and undermining their First Amendment freedoms of speech and association.

Summary of the Case

The association defendant's alleged agency relationship was not with a local branch or chapter but with a single individual part-time volunteer, Ms. Shirley Landa, who was not an officer, director or person of authority.

The undisputed testimony was that she neither held herself out as or was recognized by the persons with whom she dealt (plaintiff's mother) as an agent or representative of CAN. Indeed she was a volunteer for a number of organizations acting with a common purpose and concern in the same area, and described herself as an independant actor.

The volunteer did not participate in any of the wrongful acts at issue, involving abduction and detention, which were directly contrary to the policy of the national association. The allegations against her conduct in this case were of "negligent referral" and conspiracy. But there was a complete absence of evidence of control by the national organization over any of the activities of the volunteer alleged in this case.

And there was no allegation or proof of ratification of the volunteer's actions by the national organization except for the claim that failure to terminate her status was implicit ratification. Such an argument of ratification was expressly rejected in similar circumstances by Justice Douglas in NAACP v. Overstreet and Justice Brennan in United Mine Workers v. Gibbs. Comparison of this case with others demonstrates the dramatic expansion of vicarious liability in the absence of appropriate evidence of agency, proof of control over the agent by the principal as regards the acts alleged or clear and appropriate proof of ratification.

Even assuming that CAN believed (as it apparently did not) that Landa wanted to refer families for unlawful deprogramming of adult children, the only "control" that CAN could exercise over Landa would have been to "fire" her by designating her as a contact person. There was no other evidence of "control" by CAN or reason to believe that such non-exclusive "control" could have had any teeth.

CAN contended that Ms. Landa had acted on her own and not within the scope of her authority since plaintiff's mother turned to the volunteer as an individual in the community and indisputably without regard to any connection to or representation of the association and because unlawful abduction and detention of an adult, such as plaintiff, Mr. Scott, was contrary to CAN policy.

Nonetheless, the trial judge denied the association summary judgment and allowed the issue of vicarious liability to go to the jury and sustained a jury verdict against the nonprofit association.

Position of Amici

Amici contend that the trial court expanded vicarious liability of nonprofits far beyond accepted agency law precedents. Such expansion opens the door for endless attempts by prejudicial evidence and argument, to destroy nonprofit organizations which espouse controversial views by proponents of conflicting views.

Amici urge this Court to adopt the presumption of nonagency which Professors Gaffney and Sorensen set forth:

Often an activity could be on behalf of and for the benefit of either the organization or the member [of a church or a civil rights organization]. The issue is whether any agency relationship whatsoever has been established. No inference of agency can be drawn from activities that advance both the actor's and the organization's interests. The presumption should not be one of agency but one of nonagency.
As recognized by the Supreme Court in Claiborne Hardware and the dissent in Overstreet, nonprofit associations engaged in bringing matters of controversy before the public -- in areas which today include abortion, environmental advocacy, health care, homelessness and discrimination based on race, religion, national origin or sexual preference -- should not have their rights and the rights of their members chilled by the threat of liability such as is raised here.

Amici's support for CAN on the agency issue does not extend to supporting those other defendants whose appeals the Court has consolidated with CAN's. None of them, however, was held to be an agent for appellant CAN and, notably, although alleged to be co-conspirators, neither the volunteer nor plaintiff's mother were named co-defendants.

The District Court should have dismissed CAN as a defendant, as a matter of law, rather than letting the case against CAN proceed to the jury, either by granting summary judgment, thereby confining further discovery and trial to the actual abduction and restraint of plaintiff and outrage committed against him by the named, individual defendants, or by granting CAN's trial or post-trial motions.

The District Court should not have allowed a so-called expert witness to be heard or considered expressing his opinion as to an ultimate jury question, whether to believe the sincerity of CAN's formal policies and literature opposing abduction and involuntary detention.

The District Court should not have held that the alleged "inflammatory" character of information CAN disseminated supported either vicarious liability or punitive damages.

Why a Brief of Amici Curiae Is Desirable

Amici will stress analogous contexts in which nonprofits face agency/- vicarious liability issues and the public policy reasons why the courts should draw a clear line that encourages associations to use volunteers and police their own activities without risking a novel, perhaps, endless expansion of vicarious liability.

Under the unprecedented decision below, the association's only way to avoid risk of exposure to liability is to buy insurance coverage, if it can, or desist from relationships with volunteers who may act on their own. There is only a limited body of appellate law focused on the issue of vicarious liability of nonprofits, perhaps because of a tendency to compromise vexing cases, perhaps because many states immunized charities from any liability during much of the evolution of the doctrines of vicarious liability and respondeat superior in American law. Development of those issues here will assist the court in considering significant factors pertinent to the nonprofit sector.

As the following description of amici suggests, they bring several perspectives to the issue:

American Family Foundation ("AFF") is a not-for-profit organization dedicated to educating the public on the dangers of destructive cults. AFF, which has no more than half a dozen employees (some part-timers), relies on over a hundred volunteers. AFF is mentioned in the record below, e.g., at Tr 3:163.

HALT--An Organization of Americans For Legal Reform ("HALT") is a nonprofit organization, supported entirely by individual member donations of its 70,000 members, working on a national basis to make the legal system more accessible and affordable to citizens. HALT is concerned, among its many issues, about limits on the activities of nonprofits, and about excessive punitive damage awards. HALT uses volunteers and often takes controversial positions.

Jews for Judaism ("JFJ") is a non-affiliated, non-denominational organization serving the entire Jewish community. Its principal purpose is to provide information on the methods and practices of the deceptive missionary and cult groupsthat target the Jewish community for conversion. JFJ facilitates and promotes positive Jewish experiences in dealing with such deceptive groups, through counseling services, outreach programs for unaffiliated and estranged Jews, encounter groups, lectures and production of books, periodicals, pamphlets, video and audio material.

Watchman Fellowship ("WFI") is a nonprofit, international, Christian ministry concerned with cults and new religious movements. WFI's focus is research, education, and counseling family of cult members and interventions with cult members. WFI works with 20 paid staff in 7 states and 2 foreign countries, and at least a hundred volunteers. Volunteers play a variety of vital roles throughout the nonprofit sector. They raise funds, teach courses, speak to the press and staff a myriad of positions. Some are closely supervised; others are in almost totally independent roles. Some volunteer their services exclusively and full-time to one nonprofit; others volunteer fractions of their time with several. And some just work in parallel with nonprofit associations, to which they belong, not as unpaid staff and not as unpaid independent "contractors" but, rather, as fully independent Americans who want to furthershared ideals, shared doctrines, shared goals.

Amici will address what the decision here will imply for these important contributions by volunteers in the nonprofit sector, factors the District Court declined to consider, and will urge a sounder framework for analysis and decision than guided the court below.
Respectfully submitted,

  ________________________ David J. Bardin Arent Fox Kintner Plotkin & Kahn 1050 Connecticut Avenue, NW Washington, DC 20036-5339 (202) 857-6089 Counsel for AFF  William Fry Executive Director HALT--An Organization of  Americans For Legal Reform 1319 F Street, NW * Suite 300 Washington, DC 20004  Mark K. Powers National Director Jews For Judaism P.O. Box 15059 Baltimore, MD 21282  K. Craig Branch Vice President Watchman Fellowship P.O. Box 530842 Birmingham, AL 35353   Dated: September 3, 1996 

APPENDIX

American Family Foundation ("AFF"), HALT-An Organization for Legal Reform, Jews for Judaism, Watchman Fellowship.

For discussions, see E.M. Gaffney, Jr. & P.C. Sorensen, ASCENDING LIABILITY IN RELIGIOUS AND OTHER NONPROFIT ORGANIZATIONS (H.C. Griffen, ed. Macon: Mercer University Press 1984) and M.E. Chopko, Ascending Liability of Religious Entities for the Actions of Others, 17 AM. J. TRIAL ADVOCACY 289 (1993).

For example, AFF has no more than half a dozen employees (some part-timers), but relies on over a hundred volunteers.
Gaffney & Sorensen, supra, at 37-38.
Kroshus v. Koury, 30 Wash. App. 258, 633 P.2d 909, 911 (1981), review denied, 96 Wash. 2d 1025 (1982).
The adverse impact of the decision below is not limited to one state both because of the departure from Restatement principles, a source of unifying law, and because vicarious liability was imposed under a federal statute as well as state tort law.
Contrast reluctance of a California court to treat a church as if it were a profit-making institution for purposes of establishing liability. Nally v. Grace Community Church of the Valley, 47 Cal. 3d 278, 298, 763 P.2d 948, 260, 253 Cal. Rptr. 97, 109 (1988)(en banc), cert. denied, 490 U.S. 1007 (1989). And a Flo- rida appellate court reversed a $676,000 jury verdict against a church diocese, when appellate court examination of the denominational documents (construed by the appellate court as a matter of law) and civil statutes showed that the diocese exercised no measure of dominance and control over the local church such as would make vicarious liability tenable. Folwell v. Bernard, 477 So.2d 1060, 1063 (Fla. Dist. Ct. App. 1985).

G.D. Webster, LAW OF ASSOCIATIONS (Matthew Bender & Co. 1991) 17.18[1] -- Agency Theories May be Used to Find Liability, at 17-112.
Although some amici are concerned with issues relating to groups often called "cults" and other amici rarely, if ever, deal with such issues, they all have a great stake in how agency law principles are inter- preted and applied when a non-profit organization uses volunteers to help carry out a mission of communicating with members of the public and regard this case as an opportunity to seek appellate declaration of non- liability as a matter of law in a field where uncer- tainty and the costs of litigation often lead non- profits to settle rather than carry cases through appellate resolution.

Amici will adopt appellant, CAN's statement of the case. Their understanding of the facts is summarized below and in the Appendix hereto.

Contrast American Soc'y of Mechanical Eng'rs v. Hydrolevel Corp., 456 U.S. 556, 566-67, reh'g denied, 458 U.S. 1116 (1982) (association committee member who communicated adverse information about plaintiff on association letterhead held to be acting within scope of apparent authority) with Coronado Coal Co. v. United Mine Workers, 268 U.S. 295, 304-305 (1925) and United Mine Workers v. Coronado Coal Co., 259 U.S. 344, 395 (1922) (where alleged conspiracy by local labor union was not authorized, ratified or apparently authorized by national union, only the local could be liable).
384 U.S. 118, 125 (1966)(dissent).
383 U.S. 715 (1966). See also Justice Harlan's concurrence. 383 U.S. at 742.

Even assuming, arguendo, that Ms. Landa had conspired or committed a tort (which CAN denied).
Thus plaintiff attempted (a) to infer CAN bad faith through "expert" testimony, (b) to point to an inter- locking directorship which did not even exist at the time of the events at issue in this case, (c) to examine a grassroots "anti-cult movement" of which the alleged agent was one of the individual activists and CAN was one of the involved associations and (d) to establish a kind of "liability by association" based on parallelism of concerns and objectives and of alleged actions in other transactions.

Id. at 90 [emphasis added]. See also Restatement (Second) of Agency definitions and comments which stress the commercial aspects, receipt of money or other property as key factors in defining responsibility (id. 14 L.(2)) and primary allegiance (id. 14 L. Comment on Subsection (1)a.), concepts at odds with commonplace aspects of unpaid volunterism and its multiple relationships.

NAACP v. Claiborne Hardware Co., 458 U.S. 886, 932- 33, reh'g denied, 459 U.S. 898 (1982) quoting with approval Mr. Justice Douglas's dissent from dismissal of a writ of certiorari found to have been improvidently granted in NAACP v. Overstreet, 384 U.S. 118, reh'g denied, 384 U.S. 981 (1966).

Plaintiff's mother was particularly concerned about one of the two minor sons who had moved into the home of church members. (The younger minor son had moved in with a grandmother.)

Either the volunteer or the deprogrammer apparently gave plaintiff's mother some CAN brochures.

Ms. Landa (the volunteer) contended that she had counseled with plaintiff's mother only as to the lawful deprogramming of Mr. Scott's two younger brothers, late in 1990, and not as to the deprogramming of Mr. Scott, in early 1991. CAN said it believed Ms. Landa.

The District Court had denied CAN's motion in limine to exclude that expert opinion testimony, letting it go to the jury and be repeatedly cited by plaintiff's counsel as grounds for the jury's disbelieving CAN's witnesses and documents.



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