Burgess v. Narconon: RTC Appeal Brief

DOCKET NO.
14-11214-FF

UNITED STATES COURT OF APPEALS FOR THE ELEVENTH CIRCUIT
_________________________________________

BENJ AMIN BURGESS, RHONDA BURGESS, HEIDI HOWARD, J OYCE
MARTIN, BETH KARAMPELAS, TERRI DACY, AND MICHAEL DACY,

Appellants,

vs.

RELIGIOUS TECHNOLOGY CENTER, INC., ASSOCIATION FOR BETTER
LIVING AND EDUCATION INTERNATIONAL, NARCONON
INTERNATIONAL, AND NARCONON OF GEORGIA, INC.,

Appellees.
__________________________________________________________________

APPEAL FROM A FINAL J UDGMENT OF THE UNITED STATES
DISTRICT COURT FOR THE NORTHERN DISTRICT OF GEORGIA
ATLANTA DIVISION
__________________________________________________________________

BRIEF OF APPELLEE RELIGIOUS TECHNOLOGY CENTER, INC.
__________________________________________________________________

J ohn H. Fleming
Valerie S. Sanders
Stacey M. Mohr
SUTHERLAND ASBILL & BRENNAN LLP
999 Peachtree Street, NE, Suite 2300
Atlanta, Georgia 30309-3996
404.853.8000

Attorneys for Appellee
Religious Technology Center, Inc.

Case: 14-11214 Date Filed: 06/16/2014 Page: 1 of 40

Burgess, et al. v. Religious Technology Center, Inc., et al.
Appeal No. 14-11214-FF
C-1 of 1

CERTIFICATE OF INTERESTED PERSONS
AND CORPORATE DISCLOSURE STATEMENT

Counsel for Religious Technology Center, Inc. hereby certify that they
believe the Certificate of Interested Persons and Corporate Disclosure Statement
filed with Appellants brief to be complete.

i

STATEMENT REGARDING ORAL ARGUMENT
Religious Technology Center, Inc. respectfully submits that oral argument is
not necessary. This case presents no issues of first impression and instead involves
the application of existing law. These issues have been correctly resolved in
accordance with existing precedent in the well-reasoned opinion of the district
court.


ii

TABLE OF CONTENTS

CERTIFICATE OF INTERESTED PERSONS AND CORPORATE
DISCLOSURE STATEMENT .............................................................................. C-1
STATEMENT REGARDING ORAL ARGUMENT ................................................ i
TABLE OF CITATIONS ......................................................................................... iv
I. STATEMENT OF ADOPTION OF BRIEFS OF OTHER PARTIES .................. 1
II. STATEMENT OF THE ISSUES .......................................................................... 1
III. STATEMENT OF THE CASE ............................................................................ 2
A. Introduction ........................................................................................... 2
B. Course of Proceedings and Disposition Below ..................................... 3
C. Statement of the Facts ........................................................................... 4
D. Standard of Review ............................................................................. 12
IV. SUMMARY OF THE ARGUMENT ................................................................ 13
V. ARGUMENT ...................................................................................................... 15
A. The Trial Court Correctly Held that it Lacked J urisdiction Over
RTC. .................................................................................................... 15
1. Plaintiffs Cannot Rest on Their Allegations. ............................ 15
2. Plaintiffs Have Failed to Show that RTC Has Any
Contacts With Georgia, Much Less Contacts Sufficient to
Confer J urisdiction Over RTC. ................................................. 17

iii

B. Plaintiffs Are Not Entitled to Additional Time for Discovery. .......... 27
C. Plaintiffs Claims Were Properly Dismissed under Fed. R. Civ.
P. 12(b)(6). .......................................................................................... 29
VI. CONCLUSION .................................................................................................. 29
CERTIFICATE OF COMPLIANCE WITH RULE 32(a)
CERTIFICATE OF SERVICE


iv

TABLE OF CITATIONS
Cases Page(s)

In re Banco Santander Securities-Optimal Litigation, 732 F. Supp. 2d 1305
(S.D. Fla. 2010) ................................................................................................... 20
* Burger King Corp. v. Rudzewicz, 471 U.S. 462, 105 S. Ct. 2174 (1985) ............... 20
* Consolidated Development Corp. v. Sherritt, Inc., 216 F.3d 1286 (11th Cir.
2000) ............................................................................................... 4-5, 12, 15, 16
* Daimler AG v. Bauman, ___ U.S. ___, 134 S. Ct. 746 (2014) .........................passim
Diamond Crystal Brands, Inc. v. Food Movers International, 593 F.3d 1249
(11th Cir. 2010) ............................................................................................. 17, 18
Future Technology Today, Inc. v. OSF Healthcare Systems, 218 F.3d 1247
(11th Cir. 2000) ................................................................................................... 20
* Goodyear Dunlop Tires Operations, S.A. v. Brown, 564 U.S. ___, 131 S. Ct.
2846 (2011) ................................................................................................... 14, 23
Helicopteros Nacionales de Colombia, S.A. v. Hall, 466 U.S. 408, 104 S. Ct.
1868 (1984) ................................................................................................... 19, 23
* Henriquez v. El Pais QHubocali.com, 500 F. Appx 824 (11th Cir. 2012) ........... 28
Innovative Clinical & Consulting Services, LLC v. First National Bank of
Ames, Iowa, 279 Ga. 672, 620 S.E.2d 352 (2005) ........................................ 17-18

v

* International Shoe Co. v. Washington, Office of Unemployment
Compensation & Placement, 326 U.S. 310, 66 S. Ct. 154 (1945) ......... 22, 23-24
Lee v. Etowah County Board of Education, 963 F.2d 1416 (11th Cir. 1992) ......... 13
Madara v. Hall, 916 F.2d 1510 (11th Cir. 1990) ...................................................... 5
Meier ex rel. Meier v. Sun International Hotels, Ltd., 288 F.3d 1264 (11th
Cir. 2002) ........................................................................................... 15-16, 25-26
OBrien v. Seay, 263 F. Appx 5 (11th Cir. 2008) ................................................... 28
Parker v. Brush Wellman, Inc., 377 F. Supp. 2d 1290 (N.D. Ga. 2005) ................. 27
* Pennoyer v. Neff, 95 U.S. 714 (1877) ................................................................ 22, 23
Posner v. Essex Insurance Co., 178 F.3d 1209 (11th Cir. 1999) ............................ 12
Prophet v. International Lifestyles, Inc., 447 F. Appx 121 (11th Cir. 2011) ... 12-13
Sculptchair, Inc. v. Century Arts,Ltd., 94 F.3d 623 (11th Cir. 1996) ...................... 12
Stubbs v. Wyndham Nassau Resort & Crystal Palace Casino, 447 F.3d 1357
(11th Cir. 2006) ................................................................................................... 25
* United Technologies Corp. v. Mazer, 556 F.3d 1260 (11th Cir. 2009) . 12, 15, 16, 28
* Walden v. Fiore, ___ U.S. ___, 134 S. Ct. 1115 (2014) .............................. 19, 20, 21
Xena Investments, Ltd. v. Magnum Fund Management Ltd., 726 F.3d 1278
(11th Cir. 2013) ................................................................................................... 20
Statutes
O.C.G.A. 9-10-91 ............................................................................................ 17-18

vi

Rules
Fed. R. App. P. 28(i) .................................................................................................. 1
Fed. R. Civ. P. 12(b)(2) .............................................................................. 4, 5, 27, 29
Fed. R. Civ. P. 12(b)(6) ........................................................................................ 4, 29


I. STATEMENT OF ADOPTION OF BRIEFS OF OTHER PARTIES
Pursuant to Fed. R. App. P. 28(i), Religious Technology Center, Inc.
(RTC) states that it adopts by reference the brief filed in this Court by Appellees
Association for Better Living and Education International and Narconon
International, and the portion of Narconon of Georgia, Inc.s brief incorporated
therein.
II. STATEMENT OF THE ISSUES
As to RTC, this appeal raises the following issues:
1. Whether the district court correctly held that it lacked personal
jurisdiction over RTC; and
2. If the claims against RTC were not dismissed for lack of personal
jurisdiction, whether the claims against RTC should nevertheless have
been dismissed for failure to state a claim.
Plaintiffs also include among their statement of issues the question whether
Plaintiffs made a showing sufficient to warrant jurisdictional discovery. (Br. at
1.) This issue was not properly raised or preserved. No discovery was ever served,
no showing of what additional discovery allegedly would accomplish was offered,
and no motion to conduct discovery was made. In any event, RTC submits that
there is no basis to allow any additional time for discovery.

2

III. STATEMENT OF THE CASE
A. Introduction
Plaintiffs concede that RTC is a foreign corporation, and do not attempt to
show that RTC has a presence, office, bank account, employee, telephone number,
or address in Georgia. Plaintiffs further make no effort to show, because they
could not do so, that RTC undertook any act, either by itself or by directing any
alleged agent, with respect to the alleged false representations to Plaintiffs in the
State of Georgia upon which the lawsuit is based.
The entire thrust of Plaintiffs assertion of personal jurisdiction over RTC, as
stated in their brief to this Court, is that the other named Defendants are agents of
RTC, or agents of other named Defendants who are agents of RTC; that such other
Defendants allegedly do business in and are subject to personal jurisdiction in
Georgia; and that RTC therefore should be found to be doing business in Georgia
through such agents, even though it neither undertook nor specifically directed the
acts upon which the lawsuit is based.
The notion of wide-ranging jurisdiction-by-association argued by Plaintiffs
is unsupported by Georgia law or any decision of this Court and is fundamentally
at odds with the Supreme Courts most recent decision on personal jurisdiction,
Daimler AG v. Bauman, __ U.S. __, 134 S. Ct. 746 (2014). Daimler holds that a
court may not assert general jurisdiction over a corporation merely because an

3

alleged agent or subsidiary of the corporation is subject to personal jurisdiction in
the forum; with respect to specific jurisdiction, Daimler reaffirms that jurisdiction
must be based on an act directed to the specific dispute raised by the complaint.
Daimler eliminates any possible doubt as to whether the claims against RTC were
properly dismissed.
B. Course of Proceedings and Disposition Below
On J une 4, 2013, Plaintiffs filed a complaint in the State Court of Gwinnett
County, Georgia, alleging fraudulent misrepresentation, breach of contract, and
related claims purportedly on behalf of a class of individuals who paid, on behalf
of others, for drug and alcohol rehabilitation services provided by Defendant
Narconon of Georgia, Inc. (NNGA). (App. Vol. 1, Compl., Doc 1-1, 1-19.)
Plaintiffs named as Defendants not just NNGA, but also three other parties, none a
resident of Georgia: the Association for Better Living and Education International
(ABLE), Narconon International (NN International), and RTC.
NN International removed the case to the United States District Court for the
Northern District of Georgia on J uly 2, 2013. (App. Vol. 1, Doc. 1.) On J uly 9,
2013, ABLE, NN International, and NNGA moved to dismiss the complaint under
Fed. R. Civ. P. 12(b)(6) but did not challenge the district courts jurisdiction over
them. (Id. at Docs. 4, 5, 9.) Also on J uly 9, RTC, a California corporation with no
ownership or contractual relationship with any of the other Defendants, moved to

4

dismiss the complaint against it on the ground that RTC is not subject to personal
jurisdiction in Georgia. (Id. at Doc. 7.)
On August 1, 2013, the parties submitted to the district court their J oint
Preliminary Report and Discovery Plan. Plaintiffs did not include in their portion
of the submission any proposal for jurisdictional discovery. (Id.)
Plaintiffs have never served any discovery on RTC and never filed any
motion for discovery in the district court.
On February 19, 2014, the district court entered an order granting RTCs
Rule 12(b)(2) motion to dismiss for lack of personal jurisdiction (and therefore
denying as moot RTCs motion under Rule 12(b)(6)) and granting the other
Defendants 12(b)(6) motions to dismiss. (App. Vol. 2, Order, Doc. 40.) This
appeal followed.
C. Statement of the Facts
In a case in which there has been no evidentiary hearing, this Courts
evaluation of a dismissal for lack of personal jurisdiction depends on the interplay
among a plaintiffs allegations; the defendants evidence in response to the
allegations; and any contrary evidence submitted by the plaintiff.
1
Accordingly,

1
If there has been no evidentiary hearing, this Court in evaluating the question
whether a federal court has personal jurisdiction over a defendant accepts the
allegations in the complaint as true, but only to the extent that those allegations are
uncontroverted by the defendants affidavits and depositions. Consol. Dev. Corp.


5

and although RTC submits that virtually all of Plaintiffs allegations as to RTC
have been disproved by uncontroverted evidence submitted by RTC, for the sake
of completeness RTC sets forth below Plaintiffs jurisdictional allegations as to
RTC; the evidence submitted by RTC in support of its Rule 12(b)(2) motion to
dismiss; and Plaintiffs submissions to the district court in response to RTCs
evidence.
Plaintiffs Allegations
In their complaint, Plaintiffs alleged that they agreed to pay for drug and
alcohol rehabilitation services provided by NNGA, and that in doing so they relied
on certain alleged misrepresentations regarding the program made by NNGA and
NN International. (App. Vol. 1, Compl., Doc 1-1 3, 7, 11, 14, 18.) The
complaint alleged that the Narconon programs were established based upon the
writings and technology, or tech., of L. Ron Hubbard, the founder of the
Church of Scientology. (Id. 39, 41.) Plaintiffs further alleged that NN
International and NNGA are controlled by Defendant ABLE, which, they claimed,
operates as an umbrella group that oversees the drug and alcohol rehabilitation . . .

v. Sherritt, Inc., 216 F.3d 1286, 1291 (11th Cir. 2000) (citing Madara v. Hall, 916
F.2d 1510, 1514 (11th Cir. 1990)). To the extent the plaintiff submits evidence
controverting the defendants evidence, the Court will view the evidence in the
plaintiffs favor.

6

activities of the Church of Scientology and controls the time, manner, and
method of International and NNGAs businesses . . . . (Id. 24.)
As to RTC, the complaint acknowledged that RTC is a foreign, nonprofit
corporation registered in the State of California with its headquarters in Los
Angeles, California. (Id. 20.) The complaint alleged that RTC oversees
Church of Scientology activities and serves as the final arbiter and enforcer of
orthodoxy for all Scientology-related activities and organizations and also that
RTC approves the activities of International and NNGA, and also licenses the
technology used in Narconon centers through its subsidiary, ABLE. (Id. 21.)
The complaint went on to allege that RTC assumed control over the time, manner,
and method of NNGAs operations, and RTC was doing business in the State of
Georgia by and through its agents, ABLE, International, and NNGA. (Id. 22.)
Specifically, the complaint alleged that RTC is the branch of the Church of
Scientology that holds the rights to Hubbards writings, or technology, and that
RTC licenses the technology to ABLE, which licenses the material to
International. (Id. 64.) In addition the complaint alleges that Narconon centers
are run according to exacting standards of RTC and in strict compliance with
the Hubbard/Narconon technology as allegedly required by RTC. (Id. 65, 71.)
Plaintiffs also alleged that RTC, through its agent, ABLE, requires Narconon
centers to pay money to the Church of Scientology; that RTC produce[s]

7

marketing and promotional materials for use by the Narconon centers; and that
RTC approve[s] and/or, recommend[s] certain claims for the Narconon centers to
use in promoting their services. (Id. 69, 72.)
Evidence Submitted by RTC
In support of its motion to dismiss, RTC submitted detailed declaration
testimony from its President, Warren McShane, disproving every allegation as to
RTC except the fact that RTC is a California nonprofit corporation located in Los
Angeles. Mr. McShane testified that:
a. RTC is a nonprofit religious tax exempt corporation organized and
existing under the laws of the State of California. (App. Vol. 1,
McShane Decl., Doc. 7-2, 3.)
b. RTC was established in 1982 to own the trademarks associated
with the religious services and products of the Scientology
religion. (Id. 4.)
c. RTC accomplishes its religious purpose by authorizing the use and
supervision of the Scientology religious trademarks by Church of
Scientology International, also located in California. (Id.)
d. While RTC owns the religious marks associated with the
Scientology religion, L. Ron Hubbards secular marks, including
the Narconon mark, are owned by ABLE, not RTC. (Id. 5.)

8

e. ABLE licenses Narconon and its other secular marks to secular
social betterment organizations, including NN International. RTC
does not own, nor has it ever owned, any of the secular trademarks,
including the Narconon trademarks. (Id. 5, 6.)
f. Likewise, RTC does not own any of the technology used in the
Narconon drug treatment and education programs. (Id. 6.)
g. RTC has never entered into any contract or license with ABLE, nor
with NN International or NNGA. (Id. 6, 7.)
h. RTC has never received any money from ABLE or its licensees,
including NN International and NNGA. (Id. 10.)
i. RTC is not the parent corporation of ABLE; ABLE is not RTCs
subsidiary. (Id. 8.)
j. RTC and ABLE have no common ownership, board members, or
officers. (Id.)
k. RTC has never managed or controlled the activities of ABLE, NN
International, or NNGA. (Id. 14.)
l. None of ABLE, NN International, or NNGA has ever been an
agent of RTC. (Id. 9.)

9

m. RTC has never issued any directives, rules or guidelines to NNGA,
and has never exercised control over any of its operations,
including those related to student intake and staffing. (Id. 14.)
n. RTC does not conduct business or operate in Georgia, and RTC
has not contracted with any Georgia resident. (Id. 11.)
o. RTC has not recruited Georgia residents, directly or through any
intermediary, for any staff position inside or outside the State of
Georgia. (Id.)
p. RTC is not a resident of the State of Georgia and is not required to
maintain, and does not maintain, a registered agent for service of
process in Georgia. (Id. 12.)
q. RTC has no real or personal property in Georgia, and maintains no
office or place of business in Georgia, and no mailing address or
telephone listing in Georgia. (Id.)
r. RTC does not maintain any bank accounts in Georgia. (Id.)
s. RTC does not have any officers, directors, staff, or agents in
Georgia. (Id.)
Documents Submitted by Plaintiffs in Response to RTCs Motion
In response to RTCs motion to dismiss and the declaration testimony of Mr.
McShane, Plaintiffs abandoned any allegations about direct involvement of RTC in

10

Georgia or in the alleged tortious acts. Instead Plaintiffs rely entirely on an
agency argument. They submitted to the district court, with their brief in
opposition to the motion, three declarations and 28 other unauthenticated
documents. (App. Vol. 2, Doc. 19.)
2

None of the documents or declarations submitted by Plaintiffs in the district
court claims that RTC has a presence, office, bank account, employee, telephone
number, or address in Georgia. None of the three declarations from Ms. Scobee,
Ms. Alene, and Mr. J ames mentions NN Georgia or the state of Georgia. And
none of the declarants purports to have worked for RTC.
Ms. Scobee claims that while working for the Church of Scientology
International (which has never been a party to this action) she was supervised by
unnamed RTC employees at an unspecified time and to an unspecified degree, at
an unspecified location. (App. Vol. 2, Scobee Decl., Doc. 19-13 10.) She says
nothing about RTC holding the rights to Hubbards writings, nothing about how
RTC supposedly licenses the technology to ABLE, and nothing about money
flowing to RTC from any NN. And she does not mention Georgia or NNGA at all.

2
The documents were not only unauthenticated, but included hearsay (sometimes
multiple layers of hearsay) and otherwise inadmissible material. RTC takes the
exhibits at face value only for purposes of the Courts review of the jurisdictional
question.

11

Ms. Alene claims to be aware of an alleged review process, by which
some Narconon materials . . . would be sent for approval to AVC
International, which is claimed to be a division of RTC. (App. Vol. 2, Alene
Decl., Doc. 19-17 6.) She offers no description of the materials or the time and
circumstances under which the review supposedly occurred. Like Ms. Scobee
she says nothing about RTC holding the rights to Mr. Hubbards technology,
nothing about RTC licensing to ABLE or money flowing to RTC, and she also
does not mention NNGA or Georgia.
Mr. J ames claims to have been employed by the Church of Scientology and
offers the opinion that RTC runs Scientology. (App. Vol. 2, J ames Decl., Doc.
19-15 5.) But like the other two declarations filed by the Plaintiffs, that of Mr.
J ames says nothing about RTC holding any rights to Mr. Hubbards writings,
includes no mention of licensing or money flow, and says nothing about Georgia
or NNGA.
The same is true of the 28 other documents submitted with Plaintiffs
response to RTCs motion to dismiss, many of which obviously pre-date the 2001
incorporation of NNGA if not the 1982 founding of RTC. (See, e.g., App. Vol. 2,
Doc. 19-2 (1972); Doc. 19-3 (1989); Doc. 19-6 (1996); Doc. 19-8 (1996); Doc. 19-9
(1996); Doc. 19-16 (1991); Doc. 19-27 (2000).) None of the documents suggests
that any of ABLE, NN International, or NNGA shared officers, employees,

12

directors, or bank accounts with RTC. None of the documents shows RTC
licensing to ABLE, to NN International, or to NNGA and none shows any money
flowing to RTC from ABLE, NN International, or NNGA.
Only one of the 28 documents refers to NNGA or to Georgia. (App. Vol. 2,
Doc. 19-18.) That document makes no reference to RTC. (Id.)
The organizational chart submitted by Plaintiffs to the district court shows
no management or reporting lines between RTC and any of ABLE, NN
International, or NNGA. (App. Vol. 2, Doc. 19-14.) And one of the documents
expressly states that The Religious Technology Center (RTC) is not part of [the
Church of Scientologys] International Management. (Id. at Doc. 19-12 Pg. 8.)
D. Standard of Review
Whether a federal court has personal jurisdiction over a defendant is a
question of law and subject to de novo review. Consol. Dev. Corp. v. Sherritt,
Inc., 216 F.3d 1286, 1291 (11th Cir. 2000) (citing Sculptchair, Inc. v. Century Arts,
Ltd., 94 F.3d 623, 626 (11th Cir. 1996)). To the extent the district court can be
said to have denied rather than terminated discovery, the Court reviews that
decision under an abuse-of-discretion standard. United Techs. Corp. v. Mazer, 556
F.3d 1260, 1281 (11th Cir. 2009) (citing Posner v. Essex Ins. Co., 178 F.3d 1209,
1214 n.7 (11th Cir. 1999)); Prophet v. Intl Lifestyles, Inc., 447 F. Appx 121, 126

13

(11th Cir. 2011) (citing Lee v. Etowah Cnty. Bd. of Educ., 963 F.2d 1416, 1420
(11th Cir. 1992)).
IV. SUMMARY OF THE ARGUMENT
RTC is a foreign corporation with no presence in Georgia. In their
complaint, Plaintiffs conceded this much, and alleged no Georgia presence or
activity by RTC. Instead Plaintiffs relied in their complaint on allegations of
agency, generally recited as a bare legal conclusion and accompanied by only a
few factual allegations to the effect that RTC was a parent corporation to ABLE
(but not the Georgia resident NNGA) and/or that RTC licensed, through ABLE,
trademarks used in the Narconon programs. These allegations were specifically
denied, and the absence of any Georgia activity by RTC was confirmed, by the
declaration testimony of RTCs President, Warren McShane. At that point, the
burden shifted to Plaintiffs to come forth with evidence supporting their claim that
a court in Georgia could lawfully exercise jurisdiction over RTC. In a failed
attempt to meet their burden, Plaintiffs offered no admissible evidence and
submitted three hearsay declarations and 28 documents, which collectively refer to
Georgia exactly once, and that in a document that makes no reference to RTC.
The district court correctly held that it lacked jurisdiction over RTC under
the Georgia Long-Arm statute. Plaintiffs do not claim that RTC has any direct
contacts with Georgia, and they have failed to produce any evidence to substantiate

14

a claim that the jurisdictional contacts of any other entity can be attributed to RTC,
under a theory of agency or otherwise. The claims against RTC were properly
dismissed.
The district court also lacked personal jurisdiction as a matter of due
process. Due process limitations are measured by the concepts of general
jurisdiction and specific jurisdiction. Goodyear Dunlop Tires Operations, S.A. v.
Brown, 564 U.S. __, 131 S. Ct. 2846, 2853-54 (2011). As confirmed in Daimler,
the district court lacked general jurisdiction because general jurisdiction over a
foreign corporation cannot be based solely on the presence of a related corporation
as an alleged agent in the forum, and RTC had no direct contacts in Georgia, let
alone was it at home in Georgia, as Daimler requires. The district court also
lacked specific jurisdiction because there is no claim and no evidence that RTC
directed the making of the alleged misrepresentations upon which the lawsuit is
based.
This is unaffected by Plaintiffs arguments about jurisdictional discovery.
Even assuming that the issue of jurisdictional discovery is properly before the
Court no motion for discovery was ever made or denied there is no basis to
allow Plaintiffs additional time for discovery before the dismissal of their claims
against RTC is affirmed. Plaintiffs served no discovery upon RTC, made no
motion for jurisdictional discovery, never described the proposed additional

15

discovery, and submitted to the district court a joint discovery plan including no
suggestion for jurisdictional discovery. Even if Plaintiffs had properly requested
jurisdictional discovery, the district court dismissal would have been correct in
preventing fishing expedition discovery, because Plaintiffs provided no evidence
of any contact with the forum state. Thus there was no abuse of discretion, and
indeed no error, in the decision not to allow additional time for unspecified
jurisdictional discovery.
Finally, even if there were a basis for a court in Georgia to exercise
jurisdiction over RTC and there is not Plaintiffs claims would still fail for the
reasons set out by the district court in dismissing the other Defendants and
expressed in the other Appellees briefs in this Court.
V. ARGUMENT
A. The Trial Court Correctly Held that it Lacked Jurisdiction Over RTC.
1. Plaintiffs Cannot Rest on Their Allegations.
In a case in which there has been no evidentiary hearing, the burden is on the
party asserting jurisdiction to establish a prima facie case of personal jurisdiction
over the non-resident. Consol. Dev. Corp. v. Sherritt, Inc., 216 F.3d 1286, 1291
(11th Cir. 2000). Where, as here, the defendant challenges jurisdiction by
submitting affidavit evidence in support of its position, the burden traditionally
shifts back to the plaintiff to produce evidence supporting jurisdiction. United
Techs. Corp. v. Mazer, 556 F.3d 1260, 1274 (11th Cir. 2009) (quoting Meier ex

16

rel. Meier v. Sun Intl Hotels, Ltd., 288 F.3d 1264, 1269 (11th Cir. 2002)); see also
Consol. Dev., 216 F.3d at 1288 (we take our factual framework from the
allegations made in the first amended complaint, to the extent that they remain
uncontroverted by the defendants affidavits and depositions).
Mr. McShanes declaration (App. Vol. 1, Doc. 7-2) provides specific and
detailed factual testimony rebutting the complaints allegations, including the
allegations that ABLE is RTCs subsidiary (id. 8); that RTC owns and/or licenses
the marks used in the Narconon program (id. 5, 6); and that ABLE, NN
International and/or NNGA is an agent of RTC (id. 9). These specific factual
denials shifted the burden to Plaintiffs to come forth with evidence not just
allegations in support of their claim that jurisdiction exists. United Techs., 556
F.3d at 1277.
Plaintiffs submitted no such evidence. Plaintiffs begin Section IV.C of their
brief with a recitation of the complaints allegations all of them irrelevant to the
jurisdictional inquiry and/or rebutted by Mr. McShanes testimony and multiple
citations to Plaintiffs own brief in the district court, Document 19 in the record.
(Br. at 22-23.) This is followed by the breezy assertion that Plaintiffs filed a brief
and numerous exhibits citing specific examples of RTCs association with
Narconon and its control over ABLE, International, and NNGA (Br. at 23)
without discussion of any of the alleged evidence. But it is Mr. McShanes

17

testimony and the evidence submitted by Plaintiffs to the district court, not the
allegations in the complaint, that provide the factual backdrop for the jurisdictional
inquiry. As discussed in more detail below, none of the documents submitted by
Plaintiffs substantiates a claim that RTC controls ABLE, NN International, or
NNGA. The submissions include only the barest reference to Georgia, and suggest
at most a shared philosophical or religious belief between RTC and the global
Narconon program. But the question of jurisdiction is not based on whether
Narconon makes use of any principles of the Scientology religion or of the writings
of the religions founder, L. Ron Hubbard. Sharing a philosophical or religious
belief with any Georgia resident is insufficient to subject a nonresident to
jurisdiction in Georgia. Plaintiffs provided no basis at all for the district court or
this Court to conclude that RTC has sufficient contact with Georgia, directly or
indirectly, to permit a court in Georgia to exercise jurisdiction over RTC.
2. Plaintiffs Have Failed to Show that RTC Has Any Contacts With
Georgia, Much Less Contacts Sufficient to Confer Jurisdiction
over RTC.
J urisdiction over nonresidents may be exercised only as authorized by
Georgias long-arm statute, O.C.G.A. 9-10-91, and even then, only if the exercise
of jurisdiction over the nonresident would comport with due process. Diamond
Crystal Brands, Inc. v. Food Movers Intl, 593 F.3d 1249, 1257-59 (11th Cir.
2010); see also Innovative Clinical & Consulting Servs., LLC v. First Natl Bank of

18

Ames, Iowa 279 Ga. 672, 620 S.E.2d 352 (2005).
3
Section 9-10-91 provides for
personal jurisdiction only in limited circumstances: when the nonresident, in
person or through an agent, (1) [t]ransacts any business in Georgia; (2)
[c]ommits a tortious act or omission in Georgia; (3) [c]ommits a tortious injury
in this state caused by an act or omission outside this state if the tort-feasor
regularly does or solicits business, or engages in any other persistent course of
conduct, or derives substantial revenue from goods used or consumed or services
rendered in Georgia; [or] (4) [o]wns, uses or possesses any real property situated
within Georgia. O.C.G.A. 9-10-91.
a. RTC Has No Presence in Georgia.
Plaintiffs identify no action allegedly taken by RTC in Georgia, much less
any action sufficient to invoke any provision of Georgias long-arm statute. Mr.
McShanes testimony confirms that RTC has never transacted business or had a
registered agent in Georgia (App. Vol. 1, Doc. 7-2, 11, 12); owns no property in
Georgia (id. 12); and has no office, telephone number, or bank account in
Georgia (id.). There is no basis to find that RTC has conducted any activity in

3
Although courts in Georgia had previously read the Georgia long-arm statute as
coextensive with constitutional due process, this Court and the Georgia Supreme
Court have since made clear that the Georgia statute imposes independent
obligations that a plaintiff must establish for the exercise of personal jurisdiction
that are distinct from the demands of procedural due process, requiring a two-step
inquiry. Diamond Crystal, 593 F.3d at 1259 (discussing Innovative Clinical)).

19

Georgia, much less that it has engaged in a persistent course of conduct here.
Plaintiffs do not contest any of this, but rely entirely on a claim that one or more of
ABLE, NN International, or NNGA acted as RTCs agent in a manner sufficient
to create jurisdiction over RTC in Georgia. For the following reasons, the
argument fails as a matter of due process.
b. RTC is Not Subject to Jurisdiction Under a Theory of
Agency.
Plaintiffs brief generally argues agency but does not distinguish between
general and specific jurisdiction. Neither exists in Georgia as to RTC.
Specific J urisdiction. Specific jurisdiction over a nonresident defendant
may exist in cases in which the suit aris[es] out of or relate[s] to the defendants
contacts with the forum. Daimler AG v. Bauman, __ U.S. __, 134 S. Ct. 746,
754 (2014) (quoting Helicopteros Nacionales de Colombia, S.A. v. Hall, 466 U.S.
408, 414 n.8, 104 S. Ct. 1868, 1872 n.8 (1984)). For a State to exercise
jurisdiction consistent with due process, the defendants suit-related conduct must
create a substantial connection with the forum State. Walden v. Fiore, __ U.S. __,
134 S. Ct. 1115, 1121 (2014).
Plaintiffs offer vague allegations of control but, as the district court noted,
have never precisely articulated their agency theory or identified any action said
to have been taken in Georgia on RTCs behalf. (App. Vol. 2, Doc. 40 Pgs. 4-9.)
And Mr. McShanes declaration confirms that RTC has never managed or

20

controlled the activities of ABLE, NN International or NNGA. (App. Vol. 1,
Doc. 7-2, 14.)
Even the most generous interpretation of the documents submitted by
Plaintiffs to the district court falls far short of supporting a claim that RTC directed
the transaction of business, or the commission of a tort, or otherwise reached out
to Georgia so as to subject itself to jurisdiction in the state. Walden, 134 S. Ct. at
1122 (quoting Burger King Corp. v. Rudzewicz, 471 U.S. 462, 479-80, 105 S. Ct.
2174, 2186 (1985)).
4
None of the documents mentions both RTC and Georgia (or
NNGA). Many of the documents do not refer to RTC at all; many simply concern
Narconon. A few of the documents upon which Plaintiffs rely do refer to both
RTC and the (worldwide) Narconon program generally; Plaintiffs characterize
these as demonstrating RTCs promotion of expansion of the Narconon program
(Br. at 28). But expressions of support for a global drug rehabilitation program,
which include no mention of NNGA or Georgia, are insufficient to suggest, much

4
While it is true that in assessing personal jurisdiction in a case without an
evidentiary hearing the Court will view conflicting evidence in a light most
favorable to the nonmoving party, see, e.g., Xena Invs., Ltd. v. Magnum Fund
Mgmt. Ltd., 726 F.3d 1278, 1284 (11th Cir. 2013), Plaintiffs citation to Georgia
law regarding agency to the effect that the question is usually a jury issue (Br. at
25) is inapt because the cases do not address jurisdiction. See, e.g., In re Banco
Santander Sec.-Optimal Litig., 732 F. Supp. 2d 1305, 1326 (S.D. Fla. 2010) (citing
Future Tech. Today, Inc. v. OSF Healthcare Sys., 218 F. 3d 1247, 1249 (11th Cir.
2000)).

21

less demonstrate, the substantial connection with Georgia that would be required
for invocation of specific jurisdiction. Walden, 134 S. Ct. at 1123 (a defendants
relationship with a plaintiff or third party, standing alone, is an insufficient basis
for jurisdiction).
General J urisdiction.
Nor is RTC subject to general jurisdiction in Georgia.
In Daimler, the Supreme Court undertook a review of its past precedents
concerning personal jurisdiction over out-of-state defendants, and in particular
focused on the question of general jurisdiction. In doing so, the Court made clear
that general jurisdiction ordinarily may not be asserted over an individual who
does not live in the state or over a corporation that is neither incorporated in the
state or does not have its principal place of business in the state. Even the
presence in the state of an agent is not sufficient to overcome the strong limitation
the Court placed upon exercise of general jurisdiction.
The case arose when the plaintiffs brought suit in district court in California
against Daimler, the German corporation, and its United States subsidiary,
Mercedes Benz USA (MBUSA), which distributes Daimler manufactured

22

vehicles throughout the United States, including in California.
5
Plaintiffs asserted
jurisdiction over Daimler on the basis of its alleged agency relationship with
MBUSA, which plaintiffs in turn alleged was subject to general jurisdiction in
California.
The Court began its analysis with the venerable case of Pennoyer v. Neff, 95
U.S. 714, 720 (1877), which held that a tribunals jurisdiction over persons
reaches no further than the geographical bounds of the forum. Daimler, 134 S.
Ct. at 753. The Court then showed how Pennoyer ultimately gave way to a less
rigid understanding, id. at 753-54, notably in the canonical case of International
Shoe Co. v. Washington, Office of Unemployment Compensation & Placement, 326
U.S. 310, 66 S. Ct. 154 (1945), where the Court first stated its minimum contacts
doctrine. From that the Daimler Court traced the development of the doctrines of
general and specific jurisdiction, noting that International Shoe was a prototypical
specific jurisdiction case in which the in-state activities of the corporate defendant
ha[d] not only been continuous and systematic, but also g[a]ve rise to the
liabilities sued on. Daimler, 134 S. Ct. at 754, quoting International Shoe, 326
U.S. at 317, 66 S. Ct. at 159.

5
The substantive basis of the suit, of no materiality here, was that plaintiffs alleged
that Daimlers Argentinean subsidiary collaborated with Argentinean security
forces in 1976-1983 to kidnap, torture, and kill the plaintiffs or their families.

23

The Daimler Court emphasized, however, that International Shoe did not
significantly expand the concept of general jurisdiction beyond what had existed
under Pennoyer v. Neff: [G]eneral and specific jurisdiction have followed
markedly different trajectories post-International Shoe. Specific jurisdiction has
been cut loose from Pennoyers sway, but we have declined to stretch general
jurisdiction beyond limits traditionally recognized. Daimler, 134 S. Ct. at 757-
58.
6
The Court held that International Shoes use of the term continuous and
systematic activity was intended to modify the requirement that those activities
gave rise to the alleged liabilities sued upon, noting that [a]s International Shoe
itself teaches, a corporations continuous activity of some sorts within a state is
not enough to support the demand that the corporation be amenable to suits
unrelated to that activity. Daimler, 134 S. Ct. at 757, quoting International Shoe,

6
The Court reviewed its major cases on general jurisdiction to demonstrate its
point, noting that in Helicopteros Nacionales de Columbia, S.A. v. Hall, 466 U.S.
408, 416, 418, 104 S. Ct. 1868, 1874 (1984), it declined to find general
jurisdiction in Texas despite the fact that the defendant sent its CEO to Houston to
negotiate a contract, accepted checks drawn on a Houston bank, purchased
helicopters, equipment, and training services from a Texas company, and sent
personnel to Texas for training (Daimler, 134 S. Ct. at 756-57), and that in
Goodyear Dunlop Tires Operations, S.A. v. Brown, 564 U.S. __, 131 S. Ct. 2846,
2856 (2011), the Court had held that the placement of a product into commerce
into a state do[es] not warrant a determination that, based on those ties, the forum
has general jurisdiction over a defendant. Daimler, 134 S. Ct. at 757, quoting
Goodyear.

24

326 U.S. at 318, 66 S. Ct. at 159 (emphasis added). Instead, the Daimler Court
held that:
[O]nly a limited set of affiliations with a forum will render a
defendant amenable to all-purpose jurisdiction there. For an
individual, the paradigm forum for the exercise of general jurisdiction
is the individuals domicile; for a corporation, it is an equivalent
place, one in which the corporation is fairly regarded as at home. . . .
With respect to a corporation, the place of incorporation and principal
place of business are paradigm bases for general jurisdiction. . . .
Those affiliations have the virtue of being uniquethat is, each
ordinarily indicates only one placeas well as easily ascertainable.

Daimler, 134 S. Ct. at 760 (internal citations and quotation marks omitted).
7

Accordingly, the Court rejected use of the continuous and systematic test as
unacceptingly grasping, id. at 761, and instead further held that:
[T]he inquiry under Goodyear is not whether a foreign corporations
in-forum contacts can be said to be in some sense continuous and
systematic, it is whether that corporations affiliations with the State
are so continuous and systematic as to render [it] essentially at home
in the forum State.

Id. (internal quotation marks omitted). See also id. at 758 n.11(i.e., comparable to
a domestic enterprise in that State).

7
The Daimler Court made clear that the general jurisdiction inquiry does not
focu[s] solely on the magnitude of the defendants in-state contacts. . . . General
jurisdiction instead calls for an appraisal of a corporations activities in their
entirety, nationwide and worldwide. A corporation that operates in many places
can scarcely be deemed at home in all of them. Otherwise, at home would be
synonymous with doing business tests framed before specific jurisdiction evolved
in the United States. Daimler, 134 S. Ct. at 762 n.20 (internal citation omitted).

25

Finally, the Daimler Court held that even if MBUSA were subject to general
jurisdiction in California and even if its jurisdictional contacts could be attributed
to Daimler, its German parent, the California court could not exercise general
jurisdiction over Daimler on that basis:
Even if we were to assume that MBUSA is at home in California, and
further to assume MBUSAs contacts are imputable to Daimler, there
would still be no basis to subject Daimler to general jurisdiction in
California, for Daimlers slim contacts with the State hardly render it
at home there.

Id. at 760.
Plaintiffs argument here apparently is that the allegation of agency
between RTC and ABLE, NN International, and/or NNGA allows attribution
of those entities jurisdictional contacts to RTC. Daimler shows that is
wrong, and the argument also fails for at least two additional reasons.
First, as discussed above, Plaintiffs have not described, much less proffered
evidence of, the alleged agency relationships. In their complaint Plaintiffs
claimed that RTC was a parent corporation to ABLE, but this has been rebutted by
Mr. McShanes uncontroverted testimony.
8
And the organizational chart

8
The instant case is in this respect (among others) unlike Meier ex rel. Meier v.
Sun Intl Hotels, Ltd., 288 F.3d 1264 (11th Cir. 2002), or Stubbs v. Wyndham
Nassau Resort & Crystal Palace Casino, 447 F.3d 1357, 1361 (11th Cir. 2006).
Those cases, already distinguishable because they were decided by application of
Florida law, involved attribution of jurisdictional contacts among affiliated


26

submitted by Plaintiffs to the district court show no reporting or management lines
between RTC and any of ABLE, NN International, or NNGA. To the contrary,
Document 19-12 Pg. 8 (App. Vol. 2) which Plaintiffs mischaracterize as
demonstrating a chain of command including both RTC and ABLE (Br. at 27)
expressly states that [t]he Religious Technology Center (RTC) is not part of [the
Church of Scientologys] International Management. (Doc. 19-12 Pg. 8.) The
document also confirms Mr. McShanes testimony that RTC owns the religious
trademarks licensed to the Church of Scientology as distinct from the secular
trademarks, including the Narconon mark, owned by ABLE. (Id.)
Second, Plaintiffs claims of agency lack any connection to Georgia and
cannot be said to support a claim that RTC is at home in Georgia such that RTC
could be subject to general jurisdiction in the state. None of the three declarations
submitted by Plaintiffs in opposition to RTCs motion to dismiss mentions Georgia
or NNGA. None of the declarants purports to have worked for NNGA (the
Georgia entity) or for RTC (the alleged principal). Of the 28 documents
submitted in support of the claim that RTC could be subject to jurisdiction in
Georgia, only one even mentions Georgia or NNGA Document 19-18 (App. Vol.

corporations, where the corporation residing in the forum state operated without
any semblance of individual identity. Meier, 288 F.3d at 1272. There is no such
evidence here.

27

2). Contrary to Plaintiffs claim in their brief that Document 19-18 shows
evidence of report[ing] . . . to RTC (Br. at 28), the exhibit, which appears to be a
report of an alleged incident at NNGA, does not even mention RTC. Even
Plaintiffs opening brief in this Court fails to mention Georgia in its jurisdictional
argument, other than in citations to Georgia law.
Plaintiffs have not only failed to substantiate a claim of agency between
RTC and some other entity, they have failed even to describe how the alleged
agency supposedly reaches Georgia. Because there is no basis for a court in
Georgia to exercise specific or general jurisdiction over RTC under an agency
theory or otherwise the district courts dismissal under Fed. R. Civ. P. 12(b)(2) of
all claims against RTC should be affirmed.
B. Plaintiffs Are Not Entitled to Additional Time for Discovery.
The district court correctly granted RTCs Rule 12(b)(2) motion without
allowing jurisdictional discovery as the Plaintiffs produced no evidence connecting
RTC to the forum state. There was no basis on which to allow discovery as to RTC
and the court had the power to prevent fishing expeditions. See Parker v. Brush
Wellman, Inc., 377 F. Supp. 2d 1290, 1305 (N.D. Ga. 2005) (Given the total
dearth of evidence supporting a conflation of Axsys and Speedrings corporate
identities in a manner sufficient to attribute the latters jurisdictional contacts to the
former . . . the Court is not inclined to grant Plaintiffs leave to conduct a fishing

28

expedition in hopes that discovery will sustain the exercise of personal jurisdiction
over Axsys.). Cf. OBrien v. Seay, 263 F. Appx 5, 7 (11th Cir. 2008) (Rule 56(f)
motion for additional discovery requires specific demonstration of how additional
discovery would affect motion for summary judgment).
Plaintiffs never served any discovery to RTC, never filed a motion for leave
to conduct any discovery, and did not even include a proposal for jurisdictional
discovery in the J oint Preliminary Report and Discovery Plan submitted to the
district court shortly after RTCs motion to dismiss was filed. There is no basis for
allowing additional time for discovery now. See, e.g., United Techs., 556 F.3d at
1280-81 (no error in dismissing without further discovery where UTC never
formally moved the district court for jurisdictional discovery but, instead, buried
such requests in its briefs as a proposed alternative to dismissing APM on the state
of the current record); Henriquez v. El Pais QHubocali.com, 500 F. Appx 824,
830 (11th Cir. 2012) (Henriquez never formally moved for any additional
jurisdictional discovery and did not attempt to seek such discovery . . . we cannot
say that the district court abused its discretion in dismissing Henriquezs complaint
before he could conduct any additional discovery). The district court did not err,
much less abuse its discretion, when it dismissed the claims against RTC without
allowing additional time for unspecified jurisdictional discovery.

29

C. Plaintiffs Claims Were Properly Dismissed under Fed. R. Civ. P.
12(b)(6).
If the Court were to determine for any reason not to affirm the dismissal
under Fed. R. Civ. P. 12(b)(2) of Plaintiffs claims against RTC, the claims would
still be subject to dismissal under Fed. R. Civ. P. 12(b)(6), for failure to state a
claim, for the reasons found by the district court in dismissing the claims against
the other Defendants and for the reasons expressed in ABLEs, NN Internationals,
and NNGAs briefs filed in this Court.
VI. CONCLUSION
For the foregoing reasons, the district courts order dismissing all claims
against RTC should be affirmed.
Respectfully submitted this 16th day of J une, 2014.

s/ John H. Fleming
J ohn H. Fleming (GA 263250)
Valerie S. Sanders (GA 625819)
Stacey M. Mohr (GA 619207)
SUTHERLAND ASBILL & BRENNAN LLP
999 Peachtree Street, NE, Suite 2300
Atlanta, Georgia 30309-3996
404.853.8000 (t)
404.853.8806 (f)
john.fleming@sutherland.com
valerie.sanders@sutherland.com
stacy.mohr@sutherland.com

Attorneys for Appellee
Religious Technology Center, Inc.

CERTIFICATE OF COMPLIANCE WITH RULE 32(a)
I certify that this brief complies with the type-volume limitation set forth in
Fed. R. App. P. 32(a)(7)(B). This brief is prepared in Times New Roman, 14-point
font, and contains 5,943 words, excluding the parts of the brief exempted by Fed. R.
App. P. 32(a)(7)(B)(iii), according to the word count system of Microsoft Word
2010.
Dated: J une 16, 2014

s/ John H. Fleming
J ohn H. Fleming


CERTIFICATE OF SERVICE

I hereby certify that on J une 16, 2014, I electronically filed the foregoing
Brief of Appellee Religious Technology Center, Inc. with the Clerk of Court
using the CM/ECF system which will automatically send e-mail notification of
such filing to the following attorneys of record:
J effrey R. Harris
Rebecca C. Franklin
Yvonne S. Godfrey
HARRIS PENN LOWRY LLP
1201 Peachtree Street, NE
400 Colony Square, Suite 900
Atlanta, GA 30361
jeff@hpllegal.com
yvonne@hpllegal.com

Cari K. Dawson
Daniel F. Diffley
David B. Carpenter
ALSTON & BIRD LLP
One Atlantic Center
1201 West Peachtree Street
Atlanta, GA 30309-3424
cari.dawson@alston.com
dan.diffley@alston.com
david.carpenter@alston.com

Thomas M. Barton
Aaron P.M. Tady
COLES BARTON LLP
150 South Perry Street, Suite 100
Lawrenceville, GA 30046
tbarton@colesbarton.com
atady@colesbarton.com

J ohn K. Larkins, J r.
W. Taylor McNeill
CHILIVIS, COCHRAN, LARKINS &
BEVER LLP
3127 Maple Drive NE
Atlanta, GA 30305
jkl@cclblaw.com
tmcneill@cclblaw.com

I further certify that on J une 16, 2014, I filed the original plus six copies of
the foregoing Brief of Appellee Religious Technology Center, Inc. with the
Clerk of Court by Federal Express, addressed as follows:


2

J ohn Ley, Clerk of Court
United States Court of Appeals for the Eleventh Circuit
56 Forsyth Street, N.W.
Atlanta, Georgia 30303

s/ John H. Fleming
J ohn H. Fleming

Burgess v. Narconon: RTC Appeal Brief

Загружено:

Сведения о документе

Авторское право

Доступные форматы

Поделиться этим документом

Поделиться или встроить документ

Параметры публикации

Этот документ был вам полезен?

Это неприемлемый материал?

Авторское право:

Доступные форматы

Burgess v. Narconon: RTC Appeal Brief

Загружено:

Авторское право:

Доступные форматы

DOCKET NO.

Вам также может понравиться