The Scientology Money Project

Hamtaro’s Outstanding Analysis of Narconon’s Legal Situation

As reported today by Tony Ortega, Las Vegas attorney Ryan Hamilton has filed his sixteenth lawsuit against Narconon, the disreputable and highly controversial Church of Scientology licensed drug rehab center. Hamtaro, a member of the Underground Bunker commenting community, posted what I think is an outstanding analysis of Narconon’s legal situation. I am reposting here in its entirety:


  • “We’re told that this is a standard procedure in this particular court, and that there’s a good chance this lawsuit could be settled at that meeting.”

    This one time, I have to respectfully disagree. I believe there is zero chance of a negotiated settlement at this juncture. In the 20+ years I’ve been reading Scn court documents, this is never Scn’s strategy. It is always to delay the proceedings as long as possible, to get the best understanding of their potential overall liability, and to put both the plaintiff and the plaintiff’s attorneys through a grueling war of attrition.

    Already there are 16 suits. There could eventually be 100, 500 or 2000 suits. Therefore, to ensure the survival of Narconon, Scn will have to accomplish (at least one or two of the following) three things before even one suit can be settled:
    A. Convince Hamilton to agree to not file any additional suits, ever, or have Narconon establish some variation of a “global settlement fund” that would include a maximum dollar liability that all Scn related entities will have to pay to all current and future Narconon plaintiffs, similar to the BP oil spill or Union Carbide at Bhopal.

    B. Narconon, Scn and their liability insurer(s) must already be in serious conflict because not only can the insurer(s) see the probability of lots of additional future suits, Narconon continues to incur additional liability every day by continuing the fraudulent practices. Therefore, no sane insurer is going to go forward without limiting their eventual liability by one of several methods, each of which is far too complex to go into here. Obviously, these negotiations will take place outside the view of the plaintiffs, but they will be lengthy and you can damn well bet that this issue will be resolved before DM ever considers putting his stamp of approval on any settlement.

    C. I fully believe Scn will never settle until one or more courts rule (presumably during pretrial motion practice) on the issue of liability for Narconon Inc and ABLE. On the remote chance that liability can be limited to the local Narconon/Fresh Start corporations, Scn will then adopt the tactic of stripping out assets and attempting to prove that each is individually insolvent, or close to it, and work towards settling the suits for nuisance values, say $50,000 a piece. This is a tried and true Scn legal strategy that worked to delay, for example, final resolution of the Wollersheim suit for well over a decade.

    I agree with Tony that Scn will do virtually anything to avoid having one of these cases go to trial. I just also believe that their legal strategy (as it is ultimately determined by DM) will not allow even one case to settle until they have determined the broad strokes of their global exit strategy for this entire fiasco. To do otherwise would be to effectively allow Narconon to be put out of business.

    Like most critics, my personal preference is to see a test case go to trial. I certainly hope that if that ever happens, the first thing Ryan Hamilton does when it’s his turn to speak in open court is to turn to the table full of Narconon/Scn attorneys and say “Good morning, gentlemen, this is the session.”


2 replies »

  1. It’s ironic that the strategy Scientology used to get the IRS to buckle and force the tax exemption, i.e. the filing of hundreds of suits, is being used against it this time.
    Karma is a bitch.
    The other interesting reference on what Scientology does when faced with multiple suits is the strategy used to fight Larry Flynt in the 1980’s. Marty Rathbun covers it well in ‘Memoirs of a Scientology Warrior’.

  2. The thing is, the current suits being filed against Narconon are not efforts to harass, destroy, silence, or intimidate anyone, unlike the Scientology suits filed against the IRS and others. You are right, though, that Karma is a bitch, inasmuch as the people they have shat on are finally fighting back…

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