Claire-Headley-Labor Case-Reply Memo For Summary Judgment

Case 2:09-cv-03987-DSF-MAN Document 85 Filed 03/22/10 Page 1 of 37
1 MARC MARMARO (Bar No. 85242)

mmarmaro@jmbm.com
2 AMY LERNER HILL (Bar No. 216288)
alernerhill@jmbm.com
3 JEFFER, MANGELS, BUTLER & MARMARO LLP
1900 Avenue of the Stars, Seventh Floor
4 Los Angeles, California 90067-4308
Telephone: (310) 203-8080
5 Facsimile: (310) 203-0567
6 Attorneys for Defendant Religious Technology
Center
7
BERT H. DEIXLER, SBN 70614
8 bdeixler@proskauer.com
HAROLD M. BRODY, SBN 84927
9 hbrody@proskauer.com
PROSKAUER ROSE LLP
10 2049 Century Park East, 32nd Floor
Los Angeles, CA 90067-3206
11 Telephone: (310) 557-2900
Facsimile (310) 557-2193
12
ERIC M. LIEBERMAN, admitted pro hac vice
13 elieberman@rbskl.com
RABINOWITZ, BOUDIN, STANDARD,
14 KRINSKY & LIEBERMAN, P.C.
111 Broadway, 11th Floor
15 New York, NY 10006
16 Attorneys for Defendant Church of Scientology International

17
18 UNITED STATES DISTRICT COURT

19 CENTRAL DISTRICT OF CALIFORNIA
20
21
CLAIRE HEADLEY, Case No. CV 09-3987 DSF (MANx)
22
Plaintiff, REPLY MEMORANDUM IN
23 SUPPORT OF DEFENDANTS’
v. JOINT MOTION FOR PARTIAL
24 SUMMARY JUDGMENT
CHURCH OF SCIENTOLOGY
25 INTERNATIONAL, RELIGIOUS Date: April 5, 2010
TECHNOLOGY CENTER, and Time: 1:30 p.m.
26 DOES 1 -20, Judge: Hon. Dale S. Fischer
Dept.: 840
27 Defendants.
28
6898103v1
TABLE OF CONTENTS
Page
1
2 INTRODUCTION ............................................................................................ 1
3 ARGUMENT ................................................................................................... 1
4 I. THE MINISTERIAL EXCEPTION BARS APPLICATION OF
5 WAGE AND HOUR LAWS TO HEADLEY’S ACTIVITIES................... 1
6 II. THE MINIMUM WAGE LAWS DO NOT APPLY BECAUSE
7 DEFENDANTS DO NOT ENGAGE IN COMMERCIAL BUSINESSES
8 IN COMPETITION WITH OTHER BUSINESSES................................. 16
9 A. CSI and RTC Are Not Commercial Businesses .................................... 16
10 B. Churches Are Subject to FLSA Only to the Extent They Engage in
11 Competition with Other Businesses ...................................................... 23
12 C. California’s Minimum Wage Laws Also Do Not Apply ....................... 25
13 III. SUMMARY JUDGMENT IS MANDATED ........................................... 26
14 CONCLUSION ...............................................................................................30
15
16
17
18
19
20
21
22
23
24
25
26
27
28
6898103v1
i
1 TABLE OF AUTHORITIES
2 Page
CASES
3
4 Anderson v. Liberty Lobby, Inc.,

477 U.S. 242 (1986)....................................................................................27
5
6 Building Material and Construction Teamsters' Union, Local 216 v.

Farrell,
7 41 Cal. 3d 651 (1986) .................................................................................26
8
Bureerong v. Uvawas,
9 922 F. Supp. 1450 (C.D.Cal. 1996).......................................................25, 26
10
Bollard v. Cal. Province of the Soc'y of Jesus,
11
196 F.3d 940 (9th Cir. 1999).........................................................................1
12
Celotex Corp. v. Catrett,
13
477 U.S. 317 (1986)..............................................................................26, 27
14
Cook v. Babbit,
15
819 F. Supp. 1 (D.D.C. 1993) .....................................................................29
16
Delta Sav. Bank v. United States,
17
265 F.3d 1017 (9th Cir. 2001).....................................................................27
18
EEOC v. Catholic University of America,
19
83 F.3d 455 (D.C. Cir. 1996) ........................................................................5
20
EEOC v. Roman Catholic Diocese of Raleigh,
21
213 F.3d 795 (4th Cir. 2000)...............................................................3, 5, 14
22
EEOC v. Southwest Baptist Theological Seminary,
23
651 F.2d 277 (5th Cir. 1981).........................................................................3
24
Elvig v. Calvin Presbyterian Church,
25
375 F.3d 951 (9th Cir. 2004).........................................................................5
26
Elvig v. Calvin Presbyterian Church,
27
397 F.3d 790 (9th Cir. 2005).........................................................................5
28
6898103v1
2
1
Endsley v. Luna, Number CV 06-04100,
2009 WL 3806266 (C.D. Cal. Nov. 12, 2009).............................................26
2
3
Esquivel v. Hillcoat Properties, Inc.,
484 F. Supp. 2d 582 (W.D. Tex. 2007) .......................................................22
4
5 Everson v. Bd. Of Educ.
330 U.S. 1 (1947) .........................................................................................1
6
7 General Electric Co. v. Jackson,

595 F. Supp. 2d 8 (D.D.C. 2009) ................................................................29
8
9 Harper v. Wallingford,
877 F.2d 728 (9th Cir. 1989).......................................................................27
10
11 Haynes v. Alfred A. Knopf, Inc.,
8 F.3d 1222 (7th Cir. 1993).........................................................................27
12
13 Hirel Connectors, Inc. v. United States, Number CV01-11069,

2006 WL 3618007 (C.D. Cal. Sept. 5, 2006) ..............................................27
14
15 Holy Spirit Association for the Unification of World Christianity v. New

York City Tax Commissioner,
16 55 N.Y.2d 512, 450 N.Y.S.2d 292 (1978) .....................................................8
17
Hope International University v. Superior Court,
18 119 Cal. App. 4th 719 (2004)..............................................................3, 6, 14
19
In re Richlawn Turf Farms, Inc.,
20 26 B.R. 206 (Bankr. D. Colo. 1982)............................................................22
21
Marc Headley v. CSI,
22 Case No. 09-CV-03986-DSF-MAN................................................ 23, 24, 26
23
Matsushita Elec. Indus. Co. v. Zenith Radio Corp.,
24 475 U.S. 574 (1986)....................................................................................27
25
Matter of Placid Oil Co.,
26 932 F.2d 394 (5th Cir.1991)........................................................................29
27
McClure v. Salvation Army,
28 460 F.2d 553 (5th Cir. 1972).....................................................................3, 4
6898103v1
3
1
Mitchell v. Pilgrim Holiness Church,
2 210 F.2d 879 (7th Cir. 1954).......................................................................25
3
Murdock v. Pennsylvania,
4 319 U.S. 105 (1943)....................................................................................22
5
NLRB v. Catholic Bishop of Chicago,
6 440 U.S. 490 (1979)........................................................................ 2, 3, 8, 28
7
Nunez v. Superior Oil Co.,
8 572 F.2d 1119 (5th Cir. 1983).....................................................................29
9
Paul v. Watchtower Bible & Tract Society of New York,
10 819 F.2d 875 (9th Cir. 1987).........................................................................9
11
People v. Bhakta,
12 162 Cal. App. 4th 973 (2008)......................................................................28
13
People v. First Federal Credit Corp.,
14 104 Cal. App. 4th 721 (2003)......................................................................28
15
Presbyterian Church v. Mary Elizabeth Hull Me. Presbyterian Church,
16 393 U.S. 440 (1969)......................................................................................9
17
Rayburn v. General Conference of Seventh-day Adventists,
18 772 F.2d 1164 (4th Cir. 1985).............................................................3, 5, 14
19
Rosas v. Corporation of the Catholic Archbishop of Seattle,
20 __ F.3d ___, 2010 WL 917200 (9th Cir. March 16, 2010) ...................passim
21
Rosati v. Toledo, Ohio Catholic Diocese,
22 233 F. Supp. 2d 917 (N.D. Ohio 2002) .........................................................6
23
Schaicr v. Church of Scientology of Cal.,
24 535 F. Supp. 1125 (D. Mass. 1982).............................................................25
25
Schleicher v. Salvation Army,
26 518 F.3d 472 (7th Cir. 2008)...............................................................5, 6, 25
27
Schmoll v. Chapman University,
28 70 Cal. App. 4th 1434 (1999)............................................................ 3, 14, 29
6898103v1
4
1
Serbian E. Orthodox Diocese v. Milivojevich,
2 426 U.S. 696 (1976)..................................................................................8, 9
3
Shaliehsabou v. Hebrew Home of Greater Washington,
4 363 F.3d 299 (4th Cir. 2004).........................................................................5
5
Shulman v. Group W Products, Inc.,
6 18 Cal. 4th 200 (1998) ................................................................................27
7
Smith v. Raleigh District of the N.C. Conference of the United Methodist
8 Church,
9 63 F. Supp. 2d 694 (E.D.N.C. 1999) .............................................................1
10 Steinberg v. Moore, Moorad & Dunn Inc.,

11 136 Fed. Appx. 6 (9th Cir. 2005))...............................................................28
12 Swart v. United States,

13 568 F. Supp. 763 (C.D. Cal. 1982),
aff'd, 714 F.2d 154 (9th Cir. 1983)..............................................................29
14
15 Tony and Susan Alamo Foundation v. Secretary of Labor,

471 U.S. 290 (1985).............................................................................passim
16
17 Turner v. nification Church,
473 F. Supp. 367 (D.R.I. 1978),
18 aff'd, 602 F.2d 458 (1st Cir. 1979) ..............................................................25
19
Van Schaick v. Church of Scientology of Cal.,
20 535 F. Supp. 1125 (D. Mass.1982)..............................................................25
21
Weishuhn v. Catholic Diocese of Lansing,
22 756 N.W.2d 483 (Mich. Ct. App. 2008)....................................................1, 2
23
Werft v. Desert Southwest Annual Conference of the United Methodist
24 Church,
25 377 F.3d 1099 .............................................................................................29
26 Williams v. GE,
27 1990 WL 357805 (S.D. Tex. June 29, 1990) ...............................................27
28
6898103v1
5
1
CODES AND STATUTES
2 26 U.S.C.
3
§ 501(c)(3)..................................................................................................22
4 29 C.F.R.
5 § 779.214 ....................................................................................................20
6 Cal. Bus. & Prof. Code

7 § 17200.2 ....................................................................................................28
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
6898103v1
6
1
INTRODUCTION
2
The First Amendment has erected a wall between church and state. That
3 wall must be kept high and impregnable. We could not approve the
slightest breach.” Everson v. Bd. of Educ., 330 U.S. 1, 18 (1947). The
4 interplay between the First Amendment’s Free Exercise and
Establishment Clauses creates an exception to an otherwise fully
5 applicable statute if the statute would interfere with a religious
organization’s employment decisions regarding its ministers. Bollard v.
6 Cal. Province of the Soc’y of Jesus, 196 F.3d 940, 944, 946-47 (9th
Cir.1999). This “ministerial exception” helps to preserve the wall
7 between church and state from even the mundane government intrusion
presented here. In this case, plaintiff Cesar Rosas seeks pay for the
8 overtime hours he worked as a seminarian in a Catholic church in
Washington. The district court correctly determined that the ministerial
9 exception bars Rosas’s claim and dismissed the case on the pleadings.
We . . . affirm.
10 So begins the Ninth Circuit’s opinion in Rosas v. Corporation of the
11 Catholic Archbishop of Seattle, __ F.3d ___, 2010 WL 917200, at * 1 (9th Cir.
12 March 16, 2010). The Court’s analysis and holding are dispositive of Plaintiff
13 Claire Headley’s ("Plaintiff" or "Headley") minimum wage/maximum hour
14 cause of action, and require dismissal of that claim under the ministerial
15 exception. Accordingly, this Reply Brief first addresses the ministerial
16 exception before turning to the other bases mandating summary judgment in
17 this case.1
18 ARGUMENT
19
20 I. THE MINISTERIAL EXCEPTION BARS APPLICATION OF
WAGE AND HOUR LAWS TO HEADLEY’S Activities
21
22 The Rosas Court traced the origin and basis of the ministerial exception
23
1
24 As demonstrated in Defendants' opening brief and nowhere rebutted by
Headley, the determination of the coverage of the ministerial exception is a
25 question of law vested to this Court’s determination. See Smith v. Raleigh Dist.
of the N.C. Conference of the United Methodist Church, 63 F. Supp. 2d 694,
26 706 (E.D.N.C. 1999) (“The applicability of the ministerial exception is a
question of law for the court.”); see also Weishuhn v. Catholic Diocese of
27 Lansing, 756 N.W.2d 483, 498-500 (Mich. Ct. App. 2008) (application of
ministerial exception is a “question of law for the judge, not a question of fact
28 for the jury.”)
6898103v1 1
1 to both the Establishment and Free Exercise clauses of the First Amendment.
2 With respect to the Establishment clause, the Court explained that it “is the
3 third factor, entanglement, that is at issue here”, noting that entanglement “has
4 substantive and procedural components.” Id. at *2-3. The substantive
5 component implicates a “church’s freedom to choose its ministers,” while “as
6 for the procedural dimension, the very process of civil court inquiry into the
7 clergy-church relationship can be sufficient entanglement [to foreclose judicial
8 interference].” Id. Quoting the Supreme Court, the Rosas Court emphasized:
9 It is not only the conclusions that may be reached by [the court] which
may impinge on rights guaranteed by the Religion Clauses, but also the
10 very process of inquiry leading to findings and conclusions.
11 Id. (quoting NLRB v. Catholic Bishop of Chicago, 440 U.S. 490, 502 (1979)).
12 With respect to the Free Exercise clause the Court held that it “mandates a
13 ministerial exception for religious organizations” from State labor laws where
14 such laws “may … have such an adverse impact on religious liberty as to render
15 judicial review of a Church’s compliance with the statute a violation of the Free
16 Exercise Clause.” Id. at *2.
17 The Court then held that both religion clauses compel application of the
18 ministerial exception to state or federal minimum wage/maximum hour laws,
19 rejecting Rosas’s argument that the exception only applies to anti-
20 discrimination laws. The Court stated that in order to invoke the exception, a
21 church need not allege or show that application of the statute would impose an
22 actual burden on its free exercise rights or cause an actual entanglement: “The
23 exception was created because government interference with the church-
24 minister relationship inherently burdens religion.” Id. at * 3 (Court’s
25 emphasis). Next, the Court rejected the plaintiff’s argument that the exception
26 is limited to a church’s choice of who will be its minister, holding that the
27 exception “encompasses all ‘tangible employment actions’” and applies broadly
28 “to employment decisions regarding . . . ministers, . . . including the
6898103v1 2
1 determination of a minister’s salary, his place of assignment, and the duty he is

2 to performs in the furtherance of the religious mission of the church.” Id. at *4
3 (Court’s emphasis) (citations omitted). Finally, the Court rejected arguments
4 that the exception applies only in cases of formal “ordination or ‘categorical
5 notions of who is or is not a ‘minister’”, but held that it applies more broadly to
6 those who were chosen for their position based upon some “religious criteria”
7 and who “perform some religious duties and responsibilities.” Id. at *5, 6.2
8 In so doing, the Rosas Court found “problematic” the so-called “primary
9 duties” test, which it construed, “if taken literally”, to require a mechanical
10 calculation of the percentage of time a church worker spends on ministerial as
11 opposed to other duties, warning that “[t]his could create the very government
12 entanglement into the church-minister relationship that the ministerial exception
13 seeks to prevent.” Id. at *5.3 The Court further warned that such a test ignores
14
2
In so holding, the Court cited approvingly to EEOC v. Roman Catholic
15 Diocese of Raleigh, 213 F.3d 795 (4th Cir. 2000), where the Fourth Circuit,
following numerous other courts including the California state courts, defined
16 the scope of the exception with greater specificity as including “teaching,
spreading the faith, church governance, supervision of a religious order, or
17 supervision or participation in religious ritual and worship,” or work that “is
important to the spiritual and pastoral mission of the church,” Id. at 801, 803
18 quotingthRayburn v. Gen. Conference of Seventh-day Adventists, 772 F.2d 1164,
1169 (4 Cir. 1985)). Accord, Hope Int’l Univ. v. Superior Court, 119 Cal.
19 App. 4th 719, 734 (2004); Schmoll v. Chapman Univ., 70 Cal. App. 4th 1434,
1439 (1999).
20
3
In Defendants' opening brief (Br. at 37), they suggested that the courts should
21 and typically do apply the “primary duties” test in a qualitative rather than
quantitative manner, by looking to the duties for which the church ultimately
22 employs the individual, rather than attempting to measure and evaluate each
duty he or she might undertake in a particular time period. Thus, so long as the
23 worker potentially could be assigned such critical religious duties, he or she
comes within the exception, regardless of the worker’s assignment at the time
24 of the alleged adverse employment action. See EEOC v. Sw. Baptist
Theological Seminary, 651 F.2d 277, 284 (5th Cir. 1981) (explaining McClure
25 v. Salvation Army, 460 F.2d 553 (5th Cir. 1972), and holding that plaintiff who
“was functioning principally as a secretary at the time she was discharged” was
26 subject to the ministerial exception because this was simply “the staff duty
assigned to her” at the time, and she “was still fully qualified and authorized to
27 perform the ceremonies of the [Salvation] Army . . .”). The result under this
qualitative measure of the primary duties test would be in accord with the
28 holding and discussion of the Rosas Court, as set forth in the text above.
6898103v1 3
1 the fact “that secular duties are often important to a ministry,” but do not
2 diminish the application of the ministerial exception. In rejecting Rosas’
3 argument that under his ministry training program he was hired to work as a
4 “maintenance” employee doing such chores as “cleaning sinks”, the Court held:
5 A religious organization can constitutionally require its ministers or
ministers-in-training to spend a year volunteering in urban areas in the
6 United States. Similarly, a religious organization can constitutionally
require its ministers to take a vow of poverty. So too, here, could the
7 Catholic Church require its candidate for the priesthood to spend a year
‘mostly clean[ing] sinks’ without overtime pay.
8
9 Id. What was important was not whether Rosas performed some — even a lot
10 of — secular tasks as part of his commitment to the Church. What was
11 important was that he was participating in a training program at a religious
12 institution; that his “position was largely based on religious criteria — it was a
13 ministerial placement open only to seminarians”; and that “he performed some
14 religious duties.” Id. at *6. Based on those facts, the Court concluded:
15 It is without consequence that [Rosas] also may have performed many
secular duties. [He] was not a secular employee who happened to
16 perform some religious duties; [he] was a spiritual employee who also
performed some secular duties.” Scharon v. St. Luke's Episcopal
17 Presbyterian Hosps., 929 F.2d 360, 362 (8th Cir.1991). The district
court correctly dismissed the case on the pleadings because requiring the
18 Catholic Church to pay overtime wages to Rosas would interfere with the
Church’s employment decisions regarding its minister. Rosas’s claim is
19 thus barred by the Free Exercise Clause and the Establishment Clause of
the First Amendment.
20 Id.
21 So too is Claire Headley’s claim barred by the First Amendment and the
22 ministerial exception mandated by the Religion Clauses. Following the Rosas
23 test, she worked for a religious institution (SUF 58-60, 73), she was chosen on
24 the basis of her religious training and eternal commitment to the religion by
25 joining the Sea Org, which was a requirement for working with CSI or RTC
26 (SUF 39, 41), and she “performed some [far more than some] religious duties”
27 and responsibilities (SUF 60, 72-73, 80.) Rosas at *6. Each argument Headley
28 advances as to why the ministerial exception does not bar her claim is refuted
6898103v1 4
1 by Rosas and the constitutional doctrine upon which it is based.

2 First, Headley broadly argues that the ministerial exception simply does
3 not apply to minimum wage claims. (Pl.’s Br. at 19-20.)4 Rosas rejects that
4 argument flatly. Rosas at *2. Accord, Schleicher v. Salvation Army, 518 F.3d
5 472, 478 (7th Cir. 2008); Shaliehsabou v. Hebrew Home of Greater
6 Washington, 363 F.3d 299, 305 (4th Cir. 2004).
7 Second, Headley argues that she was not a minister because she was not
8 ordained and did not claim special tax treatment as a minister. (Pl’s. Br. at
9 20:13-23.) Again, Rosas flatly rejects that argument. Id. at *5. See also Elvig
10 v. Calvin Presbyterian Church, 375 F.3d 951, 958 n.3 (9th Cir. 2004) (quoting
11 Roman Catholic Diocese of Raleigh, 213 F.3d at 801, 803 (exception
12 encompasses religious “teaching, spreading the faith, church governance,
13 supervision of a religious order, or supervision or participation in religious
14 ritual and worship,” or “is important to the spiritual and pastoral mission of the
15 church”) (quoting Rayburn 772 F.2d at 1169)); EEOC v. Catholic Univ. of Am.,
16 83 F.3d 455, 463 (D.C. Cir. 1996) (“the ministerial exception encompasses all
17
18 4
In so arguing, Plaintiff quotes Judge Fletcher’s concurrence in the denial of a
19 petition for rehearing en banc in Elvig v. Calvin Presbyterian Church, 397 F.3d
790, 792 (9th Cir. 2005), while ignoring the opinion of the court reported at 375
20 F.3d 951 (9th Cir. 2004), an important decision recognizing the ministerial
exception to state and federal labor laws. Elvig had nothing to do with a
21 minimum wage claim; it involved a Title VII sexual harassment claim. No
minimum wage issue had been briefed or argued by the parties. Judge Fletcher
22 had no occasion to consider whether or under what circumstances a church
might be covered by minimum wage laws. Judge Fletcher’s concurrence, citing
23 Tony and Susan Alamo Foundation v. Secretary of Labor, 471 U.S. 290 (1985),
unremarkably stated, “The First Amendment does not exempt religious
24 institutions from laws that regulate minimum wage . . .” But, as the Ninth
Circuit just emphasized in Rosas, “Alamo deals only with lay employees, and
25 its holding is specifically premised on the fact that the challenged statute
applied only to ‘commercial activities undertaken with a ‘business purpose’.”
26 Rosas at *3. Alamo, however, implicitly suggested that the Establishment
Clause entanglement prohibition might well bar application of a minimum wage
27 law to the religious, non-commercial activities of non-lay employees or
religious workers of a church. 471 U.S. at 302-303. And the decision in Rosas
28 now makes the point explicitly and definitively.
6898103v1 5
1 employees of a religious institution, whether ordained or not, whose primary

2 functions serve its spiritual and pastoral mission”).
3 Third, Headley argues that the fact that she was required to undergo
4 training for, make an eternal religious commitment to and join the Sea Org
5 religious order as a qualification and condition for her work with Golden Era
6 and RTC is irrelevant to determination of whether she was a minister within the
7 exception. (Pl.’s Br. at 20:24-21:8.) Plaintiff’s argument runs head on into the
8 Rosas Court’s test for determination of the question; the second element of that
9 test is whether the person was chosen for her position on the basis of religious
10 criteria. Rosas at *6. The Court held that Rosas met that criteria precisely
11 because his training placement was “open only to seminarians.” Id. Just so,
12 Claire Headley’s training and placements with Golden Era and RTC were open
13 only to Sea Org members. (SUF 39.) Moreover, Defendants’ showing that the
14 Sea Org precisely meets the definition of a religious order is entirely
15 unchallenged and uncontroverted by Plaintiff. Members of religious orders are
16 a church’s “lifeblood” in much the same way as are ministers; they provide the
17 church’s leadership and the services essential to the church’s spiritual and
18 pastoral missions. A court can no more interfere with the Church’s selection of
19 Sea Org members and the assignments and compensation it gives them than it
20 can with more traditional ministers. Functionally, Sea Org members must be
21 ministers within the meaning of Rosas.5 Indeed, cases involving “members of
22 religious orders suing in regard to their relationship in the order” are among
23 “the relatively easy cases” in the application of the ministerial exception. Hope
24 Int’l Univ., 119 Cal. App. 4th at 735-36 (citing Rosati v. Toledo, Ohio Catholic
25
26 5
For that very reason the Seventh Circuit in an opinion by Judge Posner has
27 “adopt[ed] a presumption that clerical personnel are not covered by the FLSA”
and suggested that “the ministers exception is better termed the ‘internal affairs’
28 doctrine.” Schleicher v. Salvation Army, 518 F.3d 472, 475, 478.
6898103v1 6
1 Diocese, 233 F. Supp. 2d 917, 921 (N.D. Ohio 2002) (novice to order of
2 cloistered nuns subject to ministerial exception because “a nun is obviously
3 important to the spiritual and pastoral mission of the Catholic Church”)).
4 Defendants have found no case, and Plaintiff cites to none, holding that a
5 member of a religious order does not come within the ministerial exception.
6 Finally, Plaintiff devotes several pages of her Brief (21-27) and her
7 declaration to an effort to show that the positions she held and the services she
8 performed were secular. To prove that point, Plaintiff declares it to be so by
9 ipse dixit. Plaintiff attempts to brush off and ignore the uncontroverted record
10 of her own deposition, in which she repeatedly acknowledged that all her
11 functions and positions were defined by Scientology writings and scripture,
12 principally by Mr. Hubbard, and that they were “part of Scientology,”6 by
13 unilaterally declaring that parts of Scientology are religious and other parts are
14 not, and that she worked on the non-religious parts. Plaintiff ignores the
15 declaration of Reverend Warren McShane, who demonstrates the religious basis
16 and function of each of her positions, including by specific reference to
17 Scientology Scripture.7
18 Headley thus would frame the issue before the court as whether her
19 positions were religious in nature, as defined by the Church itself, or whether
20 they are not, as declared by her. In doing so, Headley runs directly into the core
21 non-entanglement principle stated by the Rosas Court as the very reason for the
22 existence of the ministerial exception. For a civil court to determine what is
23
6
24 Headley repeatedly conceded that practices such as cramming, correction
procedures, or confessionals, required extensive study of and adherence to
25 official writings and policies of Scientology and were “Scientology practices”
and part of the “Scientology belief system.” (SUF 23, 27-29, 86, 89-91.) Try
26 as she might, she cannot controvert her own testimony by ignoring it.
7
27 Headley’s own witness Amy Scobee states unequivocally in her declaration
that all writings by Mr. Hubbard or issued in his name on the subject of
28 Scientology are Scripture. (Scobee Decl., ¶ 17.)
6898103v1 7
1 and what is not part of a religion, and for it to depart in any manner whatsoever
2 from the church’s own definition of its religion, fundamentally violates the
3 Supreme Court’s doctrine “that the First Amendment strongly circumscribes
4 legislative and judicial intrusion into the internal affairs of a religious
5 institution.” Rosas at *3 (citing Serbian E. Orthodox Diocese v. Milivojevich,
6 426 U.S. 696, 721-23 (1976)). As Rosas emphasizes, “[t]he [ministerial]
7 exception was created because government interference with the church-
8 minister relationship inherently burdens religion.” Id. at * 3 (Court’s
9 emphasis). Quoting the Supreme Court, the Rosas Court emphasized:
10 It is not only the conclusions that may be reached by [the court] which
may impinge on rights guaranteed by the Religion Clauses, but also the
11 very process of inquiry leading to findings and conclusions.
12 Id. (quoting Catholic Bishop of Chicago, 440 U.S. at 502).
13 We need not and do not rely only on these broad statements of the non-
14 entanglement principle, sweeping and fundamental as they may be. As we
15 emphasized in our opening brief, the very kind of inquiry into religious belief
16 and practice that Headley seeks to impose upon this Court has been rejected
17 explicitly. Quite simply, it is not for Headley, or the Court, to determine
18 whether such concededly Scientology beliefs and practices are part of the
19 religion. It is the Church authorities’ explanation and description of the beliefs
20 and practices of the Scientology religion, here set forth in the McShane
21 Declaration, that must be accepted by the Court, lest the judiciary become
22 entangled in a religious dispute as to what is the nature and content of a
23 religion. Holy Spirit Ass’n for the Unification of World Christianity v. New
24 York City Tax Comm’r, 55 N.Y.2d 512, 518, 450 N.Y.S 2d 292 (1978)
25 (“[C]ourts may not inquire into or classify the content of the doctrine, dogmas,
26 and teachings held by that body to be integral to its religion but must accept that
27 body’s characterization of its own beliefs and activities and those of its
28 adherents, so long as that characterization is made in good faith and is not
6898103v1 8
1 sham”) 8; Paul v. Watchtower Bible & Tract Soc’y of New York, 819 F.2d 875,
2 879 (9th Cir. 1987) (“Shunning is a practice engaged in by Jehovah’s Witnesses
3 pursuant to their interpretation of canonical text, and we are not free to
4 reinterpret that text”); id. at 878 n.1 (discussing source and meaning of this rule
5 of judicial deference compelled by the First Amendment) (quoting Serbian
6 Eastern Orthodox Diocese, 426 U.S. at 709).
7 The rule of deference was applied by the Supreme Court in the seminal
8 case of Presbyterian Church v. Mary Elizabeth Hull Me. Presbyterian Church,
9 393 U.S. 440, 450 (1969), where the Court held unconstitutional Georgia’s
10 Departure from Doctrine rule, by which Georgia courts would attempt to
11 resolve church property disputes between different church factions:
12 The departure-from-doctrine element . . . requires the civil judiciary to
determine whether actions of the general church constitute . . . a
13 ‘substantial departure’ from the tenets of the faith and practice. . . . In
reaching such a decision, the court must of necessity make its own
14 interpretation of the meaning of church doctrine. . . . Plainly, the First
Amendment forbids civil courts from playing such a role.
15
Plaintiff has essayed no response to these fundamental principles. There
16
is none. Logic and constitutional doctrine are completely congruent on this
17
point. It would be both anomalous and unconstitutional for a court to try to
18
resolve a dispute as to what is or is not part of a religion, let alone to decide that
19
what a religious body states is part of its religious beliefs and practices really is
20
not. The Court should reject Plaintiff’s invitation to do so.
21
Just to demonstrate that each of Plaintiff’s positions in fact was of a
22
23
8
24 Rev. McShane’s characterization of the practices of the religion on its face is
not merely his own personal opinion set forth for litigation purposes, but is
25 based entirely upon the writings of Mr. Hubbard, as Rev. McShane repeatedly
states and demonstrates. In particular, Rev. McShane demonstrates, and
26 Headley repeatedly concedes, that Headley’s actions as an RTC executive,
course supervisor, cramming officer or ethics counselor were all based upon
27 study of and adherence to written church policy and scripture, principally that
set forth in The Technical Bulletins and The OEC. (See Statement of Facts in
28 our opening Brief.)
6898103v1 9
1 religious nature, we briefly review Plaintiff’s attempt to claim otherwise.

2 1. For most of the period from 1992-1995, Headley was a Supervisor for
3 the Key to Life and Life Orientation courses at Golden Era. Headley
4 characterizes these courses as “similar to continuing education or job training”
5 type courses.” She claims they were not “written” by Mr. Hubbard, only had to
6 do with grammar and spelling, and “had nothing to do with the Scientology
7 religion.” (Pl.’s Br. at 21-22)(emphasis added).9 Yet the uncontroverted
8 record, including Headley’s own testimony, conclusively establishes that:
9
10  The courses were conceived and designed by Mr. Hubbard and

created from his scriptural writings (SUF 66-71, Reply SUF 15),
11 and thus, as conceded by Plaintiff’s own declarant Amy Scobee,
12 are themselves scripture (Scobee Decl., ¶ 17). In addition, they
include auditing and training, two central Scientology practices;
13
14  The Life Orientation course was designed to help Scientology staff
members be more productive in their work on the International
15 Base. (SUF 69);
16
 The Life Orientation Course studies the Eight Dynamics, which
17 Headley testified are an “important part of the Scientology
18 religion.” (SUF 68);
19
 In supervising the Life Orientation course Headley used an E-
20 meter to assist her as part of a Scientology “ethics procedure.”
(SUF 70, 71, Darnell Decl., Ex. A at 341:16-344:17);
21
22  Both courses are listed as introductory Scientology services on The

Bridge to Total Freedom, the Scientology Grade Chart of spiritual
23
progress (SUF 66, 68);
24
25
9
26 Defendants highlight the word religion above because here, once again,
Headley is drawing her own distinction between Scientology and the
27 Scientology religion, since she clearly admits at her deposition that the courses
were part of Scientology. For the reasons stated above, Headley’s attempted
28 distinction must be rejected as a matter of law.
6898103v1 10
1  Headley was required to train for her position as supervisor of the

Key to Life course by reading numerous scriptural writings written
2 by Mr. Hubbard, including such writings as “Keeping Scientology
3 Working,” “The Auditor’s Code,” “Auditor Trust,” and “The
Factors,”10 all of which are fundamental to Scientology beliefs and
4 practices (SUF 66);
5
 Headley’s training for the Life Orientation course required her to
6 read and master such additional Hubbard scriptural writings as
7 “Auditing by List,” “Overt/Withhold Write-Ups,” “Repairing Past
Ethics Conditions,” and “Life Orientation Repair List,” and to
8 undergo E-meter training. (SUF 68.)
9 2. In 1994, Headley held the position of Auditor Gold, for which, as
10 she admits, her “assignment was to engage in auditing.” (SUF 72.) As she
11 testified:
12
Q.And what was your understanding of auditing?
13 A. My understanding of auditing is that
14 there’s various different procedures that are
applied to help a person spiritually.
15 Q. And were you trained as an auditor?
16 A. Yes.
Q. And did you perform auditing services to
17 help other people spiritually?
18 A. On occasion. (SUF 56.)
19
Headley does not dispute this fact and ignores it in her Brief; in her
20
Opposition to the Separate Statement (Opp. SUF 72), she seeks to minimize it
21
by referring to her testimony where she stated, “[f]or the most part over my
22
entire career, I was not auditing. I was doing ethics actions and correction
23
actions.” (Id.) Ethics actions and correction actions, of course, are part of
24
Scientology practices and founded upon Scientology beliefs, just like auditing.
25
26 10
As stated by Rev. McShane, “The Factors of Scientology” “are a series of
27 thirty concisely stated discoveries by Mr. Hubbard that comprise a summation
of the considerations and examination of the human spirit and the material
28 universe.” (McShane Decl., ¶ 79 (referred to in SUF 66, and uncontroverted).)
6898103v1 11
1 (SUF 21-23 (Corrections and Cramming); SUF 24-30 (Ethics).)11 Headley so

2 testified:
3 Q. Is the Sec Checking a concept that was developed by L. Ron
4 Hubbard?
A. Yes. (Reply SUF 15)
5 Q. … And when you’re doing the Sec Checking, are you in any way
6 following procedures written by Mr. Hubbard as you understood it?
A. Yes. (SUF 29)
7 Q. You mentioned as a staff auditor, you did Sec Checking. I know we
8 covered this briefly the last time. But would you tell me what you mean
by Sec checking?
9
A. Yes. It’s an investigative procedure used in Scientology ethics to
10 uncover someone’s supposed or considered transgressions.
Q. Is the Sec Checking a concept that was developed by L. Ron
11
Hubbard?
12 A. Yes. (SUF 27, 28)
13
Q. Did Mr. Hubbard write about cramming?
14 A. Yes.
Q. And you’ve read material written by Mr. Hubbard about cramming?
15
A.Yes. (SUF 23)
16
3. Headley does not dispute (except, incredibly, to call it irrelevant) the
17
showing made in Defendants’ moving papers that in 1996 Headley was
18
assigned to an RTC post at the Church of Scientology Flag Service
19
Organization (“FSO”) in Florida to supervise execution of a program for the
20
training of the Supervisors for the release of the “Golden Age of Tech,” which
21
she describes as “a major event within the church” consisting of “revisions of
22
all the Scientology courses or a good majority of them” (SUF 78, 80-81),
23
including overseeing the provision of the Flag Metering Course, in which
24
“students were studying to learn [the] use of the E-meter.” (SUF 83.) Headley
25
26
11
27 Plaintiff does not materially dispute the facts set forth in SUF 21-30, except
to conclusorily state that Scientology ethics and corrections actions are not
28 religious, contrary to the Church’s own characterizations of them.
6898103v1 12
1 merely attempts to minimize her work as analogous to that of an administrative

2 assistant, and states that she was not required to “preach” about Scientology.
3 (Pl.’s Br. at 23.) Inasmuch as preaching is not a core Scientology practice, it
4 hardly is surprising that Plaintiff did not preach. The “Golden Age of Tech,” on
5 the other hand, “was a major technical improvement in the training of auditors,”
6 (SUF 80), and the use of the E-meter is central to the religion by Headley’s own
7 admission, which she ignores in her Brief. Plaintiff played a major role in
8 training auditors and supervisors with respect to those religious practices.
9 4. From 1997-2000, Headley was posted as “Director AVC
10 [Authorization, Verification, and Correction] Correction.” (SUF 84-85.) Headley
11 testified that the position “oversees the management organizations on the property.”
12 (SUF 87.) Headley testified, and does not dispute, that prior to assuming this
13 position, she was required to take a training course, which is set forth in Exhibit 40.
14 That course establishes that the purpose of her position was “to ensure the results of
15 Scientology, correct them when needful and attest to them when attained.” (SUF
16 86 (citing Ex. 40).) As Exhibit 40 shows, Headley was required to study numerous
17 Scientology policies, most or all written by Mr. Hubbard, including on such
18 subjects as the Scientology “Tone Scale,” “The Hubbard Chart of Human
19 Evaluation,” withholds and overts, the duties and techniques of cramming officers,
20 “Cramming and Basics,” “E-Meter Use,” “The Tools of a Cramming Officer,”
21 “Case Supervision,” “Flubless C/Sing [Case Supervision],” “Org Ethics,” “Third
22 Dynamic De-Aberration,” and “Ethics Review.”
23 Headley does not and cannot dispute the above facts. Instead, she merely
24 recounts some of the activities she performed, including “sec checks” (which she
25 acknowledges were part of the Scientology ethics system (Reply SUF 15)) and
26 concludes that “these tasks were simply those of an ordinary manager, and were not
27 religious in nature.” (Pl.’s Br. at 24.) Even aside from Headley’s ineffective
28 proclamation that such activities were not religious in nature, Headley ignores the
6898103v1 13
1 fact that a manager of a church, who undergoes extensive religious training for the
2 position and must meet religious criteria to hold it, is a minister for purposes of the
3 ministerial exception. See, e.g., Rayburn, supra, 772 F.2d at 1169 (ministerial
4 exception encompasses those engaged in church governance or supervision of a
5 religious order); Roman Catholic Diocese of Raleigh, supra, 213 F.3d at 803
6 (same); Hope Int’l Univ., supra, 119 Cal. App. 4th at 734 (same); Schmoll,
7 supra, 70 Cal. App. 4th at 1439 (same).
8 5. Headley describes her functions as Internal Executive at RTC in much
9 the same fashion, demonstrating that she played a major role in running the
10 organization. She ignores, but does not dispute (except as irrelevant) the facts
11 that to qualify for that position, she was required to read and master numerous
12 writings contained in The Technical Bulletins of Scientology and the
13 Organization Executive Course, both written by Mr. Hubbard and constituting
14 core scripture of the religion. (SUF 3.) She also ignores that she herself wrote
15 the job description for the position, in which she described the “purpose of my
16 post” as “[t]o observe, supervise, plan and execute the expansion, effectiveness,
17 production, training, hatting, correction and establishment of the organization.”
18 (SUF 90.) Clearly, Headley was engaged in church governance and supervision
19 of a religious order12, and comes within the ministerial exception.
20 6. Finally, Headley states that, while she was Internal Exec RTC, she
21 also was required to spend four hours per day helping Golden Era produce its
22 audio visual materials, all of which concerned Scientology.13 (Pl.’s Br. at 10:20-
23 22.) Such work was for a religious purpose, but even if it were not, Rosas
24
12
25 See, e.g., Ex. C to the Declaration of Claire Headley, containing work
schedules of RTC, several of which were authorized by her as Internal
26 Executive.
13
27 Plaintiff claims to have done so in 2003-2004, when she admits that Golden
Era did not produce any fictional materials. (Darnell Decl., Ex. A at 126:24-
28 127:3; Reply SUF 36.)
6898103v1 14
1 makes clear that the ministerial exception would still apply. If “the Catholic
2 Church [could] require its candidate for the priesthood to spend a year ‘mostly
3 clean[ing] sinks’ without overtime pay,” Rosas at *5, then certainly RTC can
4 require its Internal Executive to spend a few hours per day helping to produce
5 religious media for use in religious practices or to disseminate the religion.
6 Plaintiff’s argument that Defendants have “expand[ed] their operations beyond
7 the traditional functions essential to the propagation of their doctrine” and
8 therefore are not entitled to invoke the ministerial exception (Pl.’s Br. at 27:12-
9 21) thus runs head on into the facts and holding of Rosas, and likewise betrays a
10 blindness, whether knowing or not, to what “traditional functions” ministers
11 and members of religious orders have undertaken. As noted by Dr. Frank Flinn:
12 During the Middle Ages monasteries and nunneries spent endless hours
creating illuminated manuscripts of the Bible, massive tapestries showing
13 dramatic biblical scenes, and designs for the sculptures and stained glass
windows gracing countless cathedrals from Sicily to England. [Examples
14 omitted.] To the illiterate commoners of the times these images were, as
numerous historians of religious art have described them, the ‘Bible in
15 Stone, on Parchment, and in Colored Glass.’ . . . [T]o the devout monk or
nun this was holy work and as fully a part of the Opus Dei or ‘Work of
16 God,’ . . . , as chanting the Divine Office of the Hours, or praying and
meditating. (Flinn Decl., ¶ 26.)
17
Indeed, Dr. Flinn’s own experiences in the Franciscan Order provides a
18
better understanding of the functions traditionally carried out by a religious
19
order, even in modern times:
20
21
I worked in the monastery book bindery, binding new and rebinding old
22 editions of the Bible and theological treatises. I produced holy cards and
publications to advertise the work of the monastery. There was one
23 difference: Scientology and the Sea Organization avail themselves of the
latest forms of technology in carrying out their religious mission. We
24 forget that when the monasteries first arose they did the same thing.
(Flinn Decl., ¶ 60.)
25
26 Headley’s concluding argument that what she did at Golden Era and RTC
27
is “analogous to the workers in Alamo” (Pl.’s Br. at 27) is preposterous.
28
Neither RTC nor Golden Era run commercial businesses that compete with
6898103v1 15
1 similar businesses, such as hog farms, gas stations, or restaurants. Moreover,

2 Headley did not hold positions in which she produced goods or services for sale
3 at all, let alone of an ordinary commercial nature in competition with other
4 common businesses. Each position she held fits precisely and comfortably
5 within the Ninth Circuit’s definition of a minister under the ministerial
6 exception: She worked for a religious institution, the nature of and
7 qualifications for her work required religious training and membership in a
8 religious order, and “some”, indeed most or all, of her work involved religious
9 services.
10 II. THE MINIMUM WAGE LAWS DO NOT APPLY BECAUSE
DEFENDANTS DO NOT ENGAGE IN COMMERCIAL
11
BUSINESSES IN COMPETITION WITH OTHER BUSINESSES
12
A. CSI and RTC Are Not Commercial Businesses
13
Headley seeks to avoid the clear meaning of Alamo by inaccurately
14
characterizing Defendants as commercial businesses. Thus, Plaintiff repeatedly
15
refers to Golden Era as an ordinary commercial company that produces CDs and
16
cassettes for sale to the general public. It is no such thing. As carefully set forth in
17
the moving papers, Golden Era is, in Headley’s own words, “the dissemination
18
org[anization] of Scientology.” (SUF 33.) It plays a vital role in CSI’s
19
propagation, dissemination and expansion of the Scientology faith through the
20
compilation and dissemination of the scriptural material and teachings of L.
21
Ron Hubbard, Scientology’s Founder, to Scientology churches, parishioners
22
and the general public. (SUF 33.) Golden Era accomplishes this purpose in
23
several ways.
24
First, Golden Era creates and produces “religious films” and videos that
25
are vital to the training of Scientology “auditors”, who administer the central
26
religious practice of auditing, and “course supervisors,” who supervise the
27
conduct and progress of the other central religious practice of Scientology
28
training, provided through Scientology “courses.” (SUF 35; Fraser Decl., ¶¶ 5-
6898103v1 16
1 7.) For example, Mr. Hubbard wrote a number of film scripts to instruct
2 auditors and teach the proper use of the E-Meter; these films are produced by
3 Golden Era for distribution solely to Scientology churches for training of
4 auditors and course supervisors. (Id.)
5 Second, Golden Era creates and produces so-called “public films” and
6 videos that are used to introduce the religion’s basic concepts to the general
7 public and to explain and depict different aspects of the Scientology religion.
8 Such films and videos are shown on television monitors and film rooms in large
9 public areas in every Scientology church, and at events put on by the Church.
10 (SUF 35; Fraser Decl., ¶¶ 8, 12.) As Marc Headley conceded in his deposition,
11 such materials are “meant to get people into Scientology. It’s meant to get new
12 members, turn people into Scientologists . . . .” (Reply SUF 35.)
13 Third, Golden Era makes Mr. Hubbard’s 3,000 recorded Scriptural
14 lectures available by mixing, editing and reproducing them on cassette and,
15 until recently, reproducing the majority of these lectures on compact discs.
16 (SUF 34; Fraser Decl., ¶¶ 9-11.) Mr. Hubbard recorded these lectures about
17 Scientology forty to fifty years ago, and it is Golden Era’s religious duty to
18 make these lectures available to Scientology churches, missions and
19 parishioners now and for future generations.
20
Fourth, Golden Era produces religious booklets, brochures, posters, still
21
photography and artwork, as well as television, radio and Internet ads and
22 feature length programs, all exclusively for use in proselytizing the faith. (SUF
23
35; Fraser Decl., ¶ 13.)
24
Fifth, Golden Era also designs, creates and installs in Scientology
25 churches, missions, and religious organizations audio visual systems to present
26
to Scientology staff members, parishioners, and possible interested public the
27
various audio and visual materials about Scientology that Golden Era produces.
28 (SUF 35; Fraser Decl., ¶ 15.)
6898103v1 17
1 Sixth, Golden Era produces films and videos of Scientology meetings,

2 celebrations and “events,” which take place several times a year at locations
3 around the world. These convocations provide an opportunity for Church
4 leaders to share with parishioners news and developments concerning the
5 Church and the religion. The films and videos of such occasions are then
6 shown in local Scientology churches to parishioners who were unable to attend
7 in person. (SUF 35; Fraser Decl., ¶ 15.)
8 Seventh, as Plaintiff acknowledges (M. Headley Decl., ¶ 12), Golden Era
9 produces E-meters, which are religious articles used by Scientology ministers in
10 providing auditing, Scientology’s spiritual counseling.
11 Golden Era distributes these materials to Scientology churches around
12 the world. Some of the materials, such as the lectures by Mr. Hubbard, are
13 made available by the churches for sale to parishioners. Most are for the
14 internal use and display by the churches themselves. (Fraser Decl., ¶¶ 5-16.)
15 Plaintiff does not dispute these facts, except to state that (1) “Golden Era
16 is a production facility competing with other production facilities and sub-
17 contractors” (Pl.’s Br. at 8:18-19); (2) Golden Era produces both Scientology
18 and non-Scientology films (Opp. SUF 35); and (3) Golden Era produced audio
19 books of “certain fiction works of L. Ron Hubbard.” (Opp. SUF 36.)
20 The first two statements are false, and are supported by no evidence.
21 Golden Era does not compete for and does not obtain business from any other
22 source; it only produces its own materials for use by CSI or other Scientology
23 churches. It is not in competition with any other business. In purported support
24 of the second statement, Headley cites “Scobee Decl., ¶ 10” and “M.Headley
25 Decl., ¶¶ 3-15”. (Opp. SUF 35.) Neither declaration says any such thing; the
26 statement is pure invention. Indeed, Headley herself testified that all the films
27 had to do with Scientology: “Half of them were promotion of Scientology,
28 intended to bring new people into Scientology. Half of them had training
6898103v1 18
1 purposes . . . to train people in Scientology.” (C. Headley Dep. at 312:16 -

2 313:2 (Darnell Decl., Ex. A).)
3 With respect to the third statement, Headley relies on the same
4 declaration from her husband, Marc, and her own testimony that Golden Era
5 produced some audio books “in the early 90s.” Marc Headley also dated the
6 production to the early 1990s. (Reply SUF 36.) But as Catherine Fraser,
7 Golden Era’s Director of Public Affairs stated in her declaration filed with
8 Defendants’ moving papers, “[i]n the early 1990s, Golden Era produced a few
9 audio cassettes of several of Mr. Hubbard’s fiction works. This was only a tiny
10 fraction of Golden Era’s production of audio-cassettes. . . . No more than 1.8%
11 of all audio cassettes14 were audio books of Mr. Hubbard’s fiction. In any
12 event, none of the positions Claire Headley held at Golden Era involved the
13 production of fiction works by L. Ron Hubbard.” (SUF 33, 35, Reply SUF 36.)
14 As Fraser further explains in her declaration, “Golden Era undertook
15 these few activities for several reasons: Church members desire to listen to all
16 works of Mr. Hubbard on tape; it makes Mr. Hubbard better known to the
17 public; and it creates greater interest in exploring his religious writings.” (Id.)
18 There certainly was a rational basis for Golden Era to reach such a
19 determination, especially because Mr. Hubbard’s prior renown as a science
20 fiction writer had helped significantly in the early dissemination of Dianetics
21 and Scientology. Indeed, while he typically tries to put a negative slant on it,
22 Marc Headley acknowledges that such materials were produced to help
23 disseminate Scientology:
Ć Q. So all products are to induce audience
admiration, respect and impact that will forward
swiftly the dissemination of Dianetics and
Scientology?
鐂
0 14
In addition, of course, the production of audiocassettes represents but a fraction of
鐂 all of the activities of Golden Era. SUF Nos. 35, 36.
6898103v1 19
1 A. Exactly. That includes fiction books, that

includes radio advertisements, that includes
2 promotional videos…
3 (Reply SUF 35.)
4 In any event, these few de minimus and archaic instances of production
5 of Hubbard fictional audio books in the early 1990s, undertaken in good faith
6 for what even Marc Headley admits was the religious purpose of disseminating
7 Scientology, do not convert Golden Era into a commercial enterprise under the
8 FLSA, especially with respect to Headley’s activities. Headley’s positions and
9 responsibilities at Golden Era, as she concedes, did not even involve the
10 production of the religious media, but rather consisted exclusively of the
11 supervision of religious courses and the provision of auditing, cramming and
12 confessionals to the staff of Golden Era. (SUF 60.) As the Solicitor General
13 and the Supreme Court emphasized in Alamo, even where some activities of a
14 religious entity arguably could be considered to be an “enterprise,” which is not
15 true here, the non-commercial religious activities of the organization are not
16 included within the “enterprise” and are not subject to minimum wage
17 regulation. (See Defs.’ Opening Br. at 31-32.) Accordingly, the Labor
18 Department regulations explicitly provide that even where a non-profit engages
19 in commercial activity that is covered as an enterprise, “the nonprofit,
20 educational, religious, and eleemosynary activities will not be included in the
21 enterprise.” 29 C.F.R. § 779.214.
22 Headley also grossly mischaracterizes RTC. The purpose and functions
23 of RTC are set forth in Reverend McShane’s declaration. (See SUF 37 (citing
24 McShane Decl, ¶¶ 53-57).) As summarized in Defendants' opening brief, RTC
25 enforces the strict orthodoxy of the Scientology religion and insures that
26 Scientology churches are providing their parishioners with standard and
27 orthodox religious services. Plaintiff purports to dispute this fact by stating that
28 RTC makes money by licensing the copyrights and trademarks of Scientology
6898103v1 20
1 to other Scientology churches.15 But, as Rev. McShane explains, it is precisely

2 through its control of the intellectual property of Scientology that RTC carries
3 out its core function of policing the orthodox practice of Scientology:
4 RTC performs many activities in carrying out its basic ecclesiastical
functions: ensuring that what is represented as Dianetics or Scientology is
5 genuinely so; protecting the general public by not allowing any
organization or individual to do something entirely different while using
6 the religious marks to misrepresent itself as Dianetics or Scientology; and
not allowing any individual or organization to deliver Dianetics or
7 Scientology while calling it something else. Any misuse or unauthorized
use of the Scientology religious marks is rapidly corrected by RTC so
8 that the religion is kept pure and all people may benefit from the
application of Mr. Hubbard’s religious technologies.
9
(McShane Decl., ¶ 56.) And the fact that RTC receives licensing fees is hardly
10 surprising, nor does it convert it into a commercial “enterprise.” RTC never
11
licenses the trademarks or other intellectual property to commercial enterprises,
12
but only to Scientology organizations precisely so that they may practice
13 Scientology.
14
Ultimately, Headley’s argument that Defendants are “enterprises” is
15
centered on her repeated quotation from a document written in 1972 by Mr.
16 Hubbard, which Headley says shows that RTC’s “Governing Policy” and
17
purpose is to “Make Money . . .” (Pl.’s Br. at 6; Scobee Decl., Ex. B.) The
18
document says no such thing. First, it was written in 1972, ten years before
19 RTC or CSI were created. It is part of a series of documents directed to then-
20
nascent and financially-challenged local Scientology churches entitled
21
“Principles of Money Management.” It is directed only and exclusively to the
22 finance network in each such church. It says nothing about the purpose of
23
Scientology, of any Scientology church, let alone of RTC and CSI. Instead, it
24
15
25 Headley also baldly states that her “responsibilities were directly related to
RTC’s goals of selling products and increasing reserves.” (Pl.’s Br. at 10
26 (citing C. Headley Decl., ¶ 26).) This statement of RTC’s alleged “goals” is
flatly false, and there is no evidence to support it. As is evident from Rev.
27 McShane’s Declaration, which has not and cannot be controverted, RTC sells
no products. The reference to Claire Headley’s declaration is bogus; she says
28 no such thing.
6898103v1 21
1 says that “[t]he governing policy of Finance is to make money. . . .” (Id.

2 (emphasis added).) Well, of course it is. L. Ron Hubbard was a professional
3 writer, and he wrote with a flair and style typical of his era, and not of ours; he
4 sought to make his points in a colorful and vibrant manner. In the early years of
5 Scientology, local churches were struggling to become established and to keep
6 solvent, because no one could advance spiritually if the churches ceased to
7 exist. As the Supreme Court has recognized, “[A] religious organization needs
8 funds to remain a going concern. . . . [T]he mere fact that the religious literature
9 is ‘sold’ by itinerant preachers rather than ‘donated’ does not transform
10 evangelism into a commercial enterprise.” Murdock v. Pennsylvania, 319 U.S.
11 105, 111 (1943). Indeed, as we have noted, the Internal Revenue Service has
12 long recognized CSI, RTC and all Scientology churches as bona fide churches
13 entitled to tax exemption under 26 U.S.C. § 501(c)(3). In examining the
14 churches’ applications for exemption, the IRS was well aware of the so-called
15 “make money” document as well as other written finance policies; had the IRS
16 thought that it, or any other evidence or document demonstrated that the
17 churches were administered in a way to maximize making money for
18 commercial purposes, it could not and would not have granted exemption.16
19
16
20 Headley argues that the fact that defendants’ staff members sometimes are
referred to internally as “employees” and that they pay federal income taxes on
21 the stipends they receive for living expenses shows that they are covered
“employees” under FLSA. It does no such thing. The use of such a common
22 colloquial term does not define the legal status of those to whom it refers; the
question is not whether Headley was an “employee” in some vernacular sense,
23 but rather whether she was the kind of employee covered by the statutes and/or
included within the ministerial exception. Indeed, in Rosas the parties and the
24 Court repeatedly used the term to refer to the relationship, including that the
Church “hired” Rosas (*1); that the case implicated Washington State’s interest
25 in maintaining “minimum standards of employment” (*2); that the Church
made a “protected employment decision” (*3) and “employment decisions
26 regarding its minister” (*6); that the case involved “employment decisions
regarding … ministers” and “tangible employment actions” (*4) and “whether
27 an employee is a minister” (*5); and that Rosas was a “spiritual employee”
(*6). The fact that Headley was denominated as an “employee” for tax
28 withholding purposes is irrelevant to whether she was covered by the wage and
hour laws. See Esquivel v. Hillcoat Props., Inc., 484 F. Supp. 2d 582, 584
6898103v1 22
1 Headley argues that the IRS exemption is meaningless because the

2 Alamo church was exempt, but nevertheless was required to pay minimum
3 wages. But the government did not allege, and the Supreme Court did not hold,
4 that the commercial businesses run by the Alamo Foundation required the
5 Alamo church to pay minimum wages to all its employees; indeed it recognized
6 that FLSA would not apply to the Foundation’s other activities outside the
7 commercial businesses: “[t]he Act reaches only the ‘ordinary commercial
8 activities’ of religious organizations [citation], and only those who engage in
9 such activities . . . .” 471 U.S. at 302 (emphasis added).
10
B. Churches Are Subject to FLSA Only to the Extent They
11 Engage in Competition with Other Businesses
12
Plaintiff urges the court to reject the doctrine that churches are subject to
13
FLSA only to the extent that they engage in businesses that compete with other
14
businesses in the general marketplace. (Pl.’s Br. at 7-8.) Plaintiff’s counsel has
15
ignored the Court’s Order in the Marc Headley case:
16
The FLSA “reaches only the ‘ordinary commercial activities’ of religious
17 organizations, 29 CFR § 779.214 (1984), and only those who engage in
those activities in expectation of compensation.” [citing Alamo, 471 U.S.
18 at 302.] A church-run business that “serve[s] the general public in
competition with ordinary commercial enterprises” is covered by the
19 FLSA; otherwise church-run businesses would have an unfair
competitive edge over their non-religious affiliated competitors. Id. at
20 299.
21 ***
22
23 (W.D. Tex. 2007) (in regard to claim for overtime compensation, “[d]efendants
have cited no authority whatsoever for the proposition that a classification for
24 income tax purposes has any application to the determination of employee
status under the FLSA”); cf., In re Richlawn Turf Farms, Inc., 26 B.R. 206, 209
25 (Bankr. D. Colo. 1982) (in regard to withholding tax exemption, “[t]he
definition of agriculture under the Fair [Labor] Standards Act and its applicable
26 regulations” for minimum wage purposes “has nothing to do with the issue of
withholding tax exemptions pursuant to the Internal Revenue Code”). The
27 simple fact is that the exceptions to coverage under FLSA pursuant to its own
purpose and legislative history, the Alamo decision, and the ministerial
28 exception have no parallels under the Internal Revenue Code.
6898103v1 23
Although plaintiff has put forward evidence that Golden Era had the
1 intent to maximize profits, plaintiff did not allege that any other business
enterprise competes with Golden Era in the marketplace. Moreover,
2 there is no evidence that Golden Era competes with other entities in
disseminating multimedia products about the CSI. Cf. Alamo, 471 U.S.
3 at 292 (finding FLSA covers employees who work at the service stations,
retail clothing and grocery outlets, farms, construction companies, a
4 record keeping company, a motel, and candy companies of a religious
non-profit foundation). Without such evidence, Alamo’s rationale cannot
5 be applied here.
6
Order Denying Pl.’s Mot. Partial Summ. J., Sept. 22, 2009, at 2; Marc Headley
7 v. CSI, Case No. 09-CV-03986-DSF-MAN, Dkt. #50.)
8 This Court’s emphasis on the “competition” element of course did not
9 come out of the blue, as this Court’s Order makes clear. Rather, the Court’s
10 conclusion derived from the legislative history,17 the arguments of the Solicitor
11 General in the Alamo case, and from the Supreme Court’s careful and nuanced
12
opinion in Alamo. (See discussion and authorities in our opening Brief at 16-
13
17, 19-20.) Plaintiff’s arguments to the contrary must be rejected again. And,
14
as we have shown, Plaintiff’s arguments that Golden Era competes with other
15
“production facilities”, or that RTC competes in “selling” Scientology
16
trademarks and copyrights is without basis or logic. Golden Era produces its
17
own religious media exclusively for its own use and the use of other
18
Scientology churches, and RTC licenses Scientology’s religious intellectual
19
property only to Scientology churches; indeed it would be breaching its
20
religious purpose if it licensed it to others. Like her husband, Marc, in his
21
failed motion, Claire Headley still has not even alleged let alone produced any
22
evidence that “that any other business enterprise competes with Golden Era [or
23
17
24 Plaintiff dismissively refers to the legislative history as “congressional notes
that purportedly suggest ‘competition’ is necessary to be engaged in commerce
25 under the FLSA.” (Pl.’s Br. at 7:25-26.) As shown in Defendants' opening
Brief at 16-17, 19 n. 8, the legislative history includes the Senate and House
26 Reports, a pointed colloquy between the floor leader of the bill, then-Senator
John F. Kennedy, and Senator Barry Goldwater, and statements by Senator
27 McNamara, the Chairman of the Committee that reported the bill leading to its
passage. The legislative history certainly was deemed significant by the Court
28 in Alamo.
6898103v1 24
1
RTC] in the marketplace.”
2
Plaintiff spends two pages discussing Mitchell v. Pilgrim Holiness
3
Church, 210 F.2d 879 (7th Cir. 1954), but remarkably manages not even to
4
address Defendants’ arguments as to why that case is inapposite here, including
5 that: (1) It was decided 31 years before the Supreme Court’s decision in Alamo,
6 and is of limited precedential value in light of Alamo, to say nothing of the
7 substantial doctrinal developments under the Establishment and Free Exercise
8 clauses since 1954; (2) It was overruled sub silentio by the Seventh Circuit in
9 Schleicher v. Salvation Army, supra, 518 F.3d 472; (3) Even on its own terms,
10 Pilgrim applies only to lay workers who provide labor in expectation of salary;
11 (4) The case accordingly was not deemed apposite, even before Alamo, by two
12 district courts which held that church workers engaged in religious, non-
13 business activities were not covered by the minimum wage laws. See Van
14 Schaick v. Church of Scientology of Cal., 535 F. Supp. 1125, 1140, n. 15 (D.
15 Mass.1982) (“the legislative history and regulations [of FLSA] suggest that
16 religious activities of non-profit organizations were to be exempt”); Turner v.
17 nification Church, 473 F. Supp. 367, 377 (D.R.I. 1978), aff’d, 602 F.2d 458 (1st
18 Cir. 1979).
19 C. California’s Minimum Wage Laws Also Do Not Apply

20 In its Order denying Marc Headley’s Motion for Partial Summary
21 Judgment, this Court noted that while Marc Headley appeared to have
22 backtracked from his concession that California’s minimum wage law mirrored
23 FLSA, he “did not cite to any authority suggesting the scope of California’s
24 labor laws is greater than the federal labor law for people who are similarly
25 situated.” (Order of 9/22/09 at 2 n.2.) Neither has Headley in her opposition to
26 the instant motion. Indeed, as with her husband, Plaintiff relies on Bureerong v.
27 Uvawas, 922 F. Supp. 1450 (C.D.Cal. 1996), to define the scope of California’s
28 labor laws. (Pl.’s Br. at 16-18.) As this Court pointedly noted, the Bureerong
6898103v1 25
1 court found that California’s courts would follow FLSA standards in construing
2 the state’s wage and hour laws. (Order of 9/22/09 at 2 n.2 (also citing Bldg.
3 Material and Constr. Teamsters’ Union, Local 216 v. Farrell, 41 Cal. 3d 651,
4 658-59 (1986)).) No cases hold differently.18
5 III. SUMMARY JUDGMENT IS MANDATED
6 Contrary to Headley’s mischaracterization of summary judgment as a
7 “drastic remedy,” (Pl.’s Br. at 2), the Supreme Court considers summary
8 judgment to be “properly regarded not as a disfavored procedural shortcut, but
9 rather as an integral part of the Federal Rules as a whole, which are designed ‘to
10 secure a just, speedy and inexpensive determination of every action.’” Celotex
11 Corp. v. Catrett, 477 U.S. 317, 327 (1986) (internal citations omitted).
12 Headley’s assertion that Defendants “must establish [their] right to a judgment
13 ‘with such clarity as to leave no room for controversy and that the other party is
14 not entitled to recover under any discernable circumstance,’” is equally
15 misplaced. (See Pl.’s Br. at 2.)
16 Rule 56(c), F.R.Civ.Proc., requires that summary judgment should be
17 granted “when there is no genuine issue of material fact and when the moving
18 party is entitled to judgment as a matter of law.” Endsley v. Luna, No. CV 06-
19 04100, 2009 WL 3806266, at *7 (C.D. Cal. Nov. 12, 2009) (Fischer, D.J.)
20 (citing Bias v. Moynihan, 508 F.3d 1212, 1218 (9th Cir. 2007)). Once
21 Defendants have met their initial burden of establishing the absence of a
22 genuine issue of material fact, Rule 56(e)(2) requires Headley “to go beyond the
23 pleadings and identify facts which show a genuine issue for trial.” Id. (citing
24 Celotex, 477 U.S. at 324). “‘The opponent must do more than simply show
25 there is some metaphysical doubt as to the material facts.’” Hirel Connectors,
26
18
27 Plaintiff argues that FLSA does not preempt state law. (Pl.’s Br. at 18-19.)
Defendants have not argued that it does, only that the California law, like that
28 of most states, largely mirrors the FLSA in scope and effect.
6898103v1 26
1 Inc. v. United States, No. CV01-11069, 2006 WL 3618007, at *3 (C.D. Cal.

2 Sept. 5, 2006) (Fischer, D.J.) (quoting Matsushita Elec. Indus. Co. v. Zenith
3 Radio Corp., 475 U.S. 574, 586 (1986)). And where “the nonmoving party []
4 fails[] to make a sufficient showing on an essential element of her case with
5 respect to which she has the burden of proof,” the moving party is entitled to
6 judgment as a matter of law. Celotex, 477 U.S. at 323.
7 “‘[M]ere disagreement or the bald assertion that a genuine issue of
8 material fact exists’ does not preclude summary judgment.” Hirel Connectors,
9 supra (quoting Harper v. Wallingford, 877 F.2d 728, 731 (9th Cir. 1989)).
10 Similarly, “[t]he mere existence of a scintilla of evidence in support of the
11 [nonmoving party's] position will be insufficient.” Anderson v. Liberty Lobby,
12 Inc., 477 U.S. 242, 252 (1986). Rather, “‘[o]nly disputes over facts that might
13 affect the outcome of the suit under the governing law will properly preclude
14 the entry of summary judgment.’” Hirel Connectors at *3 (quoting Anderson at
15 248).19 Headley’s reliance post Celotex on a heightened “discernable
16 circumstance” standard is simply “mistaken[].” Williams v. GE, 1990 WL
17 357805, at *1 (S.D. Tex. June 29, 1990).
18 Indeed, summary judgment is a “favored remedy” in cases involving
19 First Amendment considerations “because unnecessarily protracted litigation
20 would have a chilling effect upon First Amendment rights;” hence, “speedy
21 resolution of such cases is desirable.” Shulman v. Group W Prods., Inc., 18
22 Cal. 4th 200, 228, (1998) (affirming summary judgment on free speech
23 grounds) (citing Haynes v. Alfred A. Knopf, Inc., 8 F.3d 1222 (7th Cir. 1993)).
24 The courts’ concern about the chilling effect of protracted litigation in freedom
25 of speech cases is even further heightened in cases involving the First
26
19
27 “The standard and procedures for a motion for partial summary judgment are
the same as for summary judgment of a claim.” Hirel Connectors at *2 (citing
28 Delta Sav. Bank v. United States, 265 F.3d 1017, 1021 (9th Cir. 2001)).
6898103v1 27
1 Amendment’s religion clauses. As noted ante at 1-2, the Rosas opinion

2 emphasizes that “the very process of civil court inquiry into the clergy-church
3 relationship can be sufficient entanglement [with religion so as to violate the
4 religion clauses]. It is not only the conclusions that may be reached by [the
5 court] which may impinge on rights guaranteed by the Religion Clauses, but
6 also the very process of inquiry leading to findings and conclusions.” 2010 WL
7 917200 at *3 (quoting Catholic Bishop of Chicago, 440 U.S. at 502).
8 For these reasons, as noted ante at 1, n. 1, determination of the
9 applicability of the ministerial exception is a question of law to be decided by
10 the Court. Indeed, not just the ministerial exception issue but Plaintiff’s entire
11 minimum wage claim must be tried to the court because it is asserted as an
12 equitable claim under California’s Unfair Competition Law (“UCL”). Cal. Bus.
13 & Prof. Code § 17200.20
14 In such a context, where the Court would be the ultimate trier of fact, a
15 relaxed summary judgment standard may be applied:
16
If decision is to be reached by the court, and there are no issues of
17 witness credibility, the court may conclude on the basis of the
affidavits, depositions, and stipulations before it, that there are no
18
genuine issues of material fact, even though decision may depend
19 on inferences to be drawn from what has been incontrovertibly
proved. ... A trial on the merits would reveal no additional data.
20
Hearing and viewing the witnesses subject to cross-examination
21 would not aid the determination if there are neither issues of
credibility nor controversies with respect to the substance of the
22
proposed testimony. The judge, as trier of fact, is in a position to
23
24
20
25 See People v. Bhakta, 162 Cal. App. 4th 973, 979 (2008) (UCL action sounds
in equity, and thus defendantsthnot entitled to a jury trial); People v. First Fed.
26 Credit Corp., 104 Cal. App. 4 721, 733 (2003) (“[T]here is no right to a jury
trial in [UCL] cases. See also Steinberg v. Moore, Moorad & Dunn Inc., 136
27 Fed. Appx. 6, 9 (9th Cir. 2005) (“Statutory unfair competition is an equitable
claim under California law, one that does not provide for damages or a jury
28 trial.”).
6898103v1 28
1
and ought to draw his inferences without resort to the expense of
trial.
2
3 Swart v. United States, 568 F. Supp. 763, 764 (C.D. Cal. 1982) (Tashima,
4 J.) (quoting Nunez v. Superior Oil Co., 572 F.2d 1119, 1123-24 (5th
5 Cir.1978)), aff’d, 714 F.2d 154 (9th Cir. 1983); see also Matter of Placid
6 Oil Co., 932 F.2d 394, 398 (5th Cir.1991) (“[I]t makes little sense to forbid
7 the judge from drawing inferences from the evidence submitted on
8 summary judgment when that same judge will act as the trier of fact,
9 unless those inferences involve issues of witness credibility or disputed
10 material facts”) (quotations and citations omitted)); Cook v. Babbit, 819 F.
11 Supp. 1, 11 n.11 (D.D.C. 1993) (“The Court is not confined to deciding
12 questions of law, but also may, subject to the “clearly erroneous” standard
13 of Fed.R.Civ.P. 52(a), draw a derivative inference from undisputed
14 subsidiary facts, even if those facts could support an inference to the
15 contrary, so long as the inference does not depend upon an evaluation of
16 witness credibility....”); Gen. Elec. Co. v. Jackson, 595 F. Supp. 2d 8, 14-
17 15 & n.4 (D.D.C. 2009) (“I’m not sure the Court is ever going to have
18 much more than it has right now.... [T]he nightmare of continuing this
19 already long proceeding much longer, I think there is no need....”).
20 Thus, in line with previous ministerial exception cases, summary
21 judgment is the preferred procedure, and clearly is warranted here. See
22 Schmoll, 70 Cal. App. 4th at 1444 (applying ministerial exception upon
23 summary judgment); Rosas at *6 (holding that “[t]he district court
24 correctly dismissed the case on the pleadings . . . .”); Werft v. Desert Sw.
25 Annual Conference of the United Methodist Church, 377 F.3d 1099, 1104
26 9th Cir. 2004) (affirming application of ministerial exception as basis for
27 granting a motion to dismiss).
28
6898103v1 29
1 CONCLUSION
2
Defendants’ joint motion for summary judgment dismissing Plaintiff’s
3
first claim for relief should be granted.
4
5
DATE: March 22, 2010 JEFFER, MANGELS, BUTLER & MARMARO LLP
6 MARMARO LLP
7 MARC MARMARO
AMY LERNER HILL
8
9
By: /s/Marc Marmaro
10 MARC MARMARO
11 Attorneys for Defendant
RELIGIOUS TECHNOLOGY CENTER
12
13 DATE: March 22, 2010 PROSKAUER ROSE LLP

ANTHONY J. ONCIDI
14 HAROLD M. BRODY
15
-and-
16
17 RABINOWITZ, BOUDIN, STANDARD, KRINSKY
& LIEBERMAN, P.C.
18 ERIC M. LIEBERMAN
19
20
By: /s/Harold Brody
HAROLD BRODY
21 Attorneys for Defendant
22
CHURCH OF SCIENTOLOGY INTERNATIONAL
23
24
25
26
27
28
6898103v1 30

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Case 2:09-cv-03987-DSF-MAN Document 85 Filed 03/22/10 Page 1 of 37

1 MARC MARMARO (Bar No. 85242)

16 Attorneys for Defendant Church of Scientology International

18 UNITED STATES DISTRICT COURT

4 Anderson v. Liberty Lobby, Inc.,

6 Building Material and Construction Teamsters' Union, Local 216 v.

7 General Electric Co. v. Jackson,

13 Hirel Connectors, Inc. v. United States, Number CV01-11069,

15 Holy Spirit Association for the Unification of World Christianity v. New

10 Steinberg v. Moore, Moorad & Dunn Inc.,

12 Swart v. United States,

15 Tony and Susan Alamo Foundation v. Secretary of Labor,

6 Cal. Bus. & Prof. Code

1 determination of a minister’s salary, his place of assignment, and the duty he is

1 by Rosas and the constitutional doctrine upon which it is based.

1 employees of a religious institution, whether ordained or not, whose primary

1 religious nature, we briefly review Plaintiff’s attempt to claim otherwise.

10  The courses were conceived and designed by Mr. Hubbard and

22  Both courses are listed as introductory Scientology services on The

1  Headley was required to train for her position as supervisor of the

1 (SUF 21-23 (Corrections and Cramming); SUF 24-30 (Ethics).)11 Headley so

1 merely attempts to minimize her work as analogous to that of an administrative

1 similar businesses, such as hog farms, gas stations, or restaurants. Moreover,

1 Sixth, Golden Era produces films and videos of Scientology meetings,

1 purposes . . . to train people in Scientology.” (C. Headley Dep. at 312:16 -

1 A. Exactly. That includes fiction books, that

1 to other Scientology churches.15 But, as Rev. McShane explains, it is precisely

1 says that “[t]he governing policy of Finance is to make money. . . .” (Id.

1 Headley argues that the IRS exemption is meaningless because the

6 and is of limited precedential value in light of Alamo, to say nothing of the

7 substantial doctrinal developments under the Establishment and Free Exercise

14 Schaick v. Church of Scientology of Cal., 535 F. Supp. 1125, 1140, n. 15 (D.

16 religious activities of non-profit organizations were to be exempt”); Turner v.

19 C. California’s Minimum Wage Laws Also Do Not Apply

1 Inc. v. United States, No. CV01-11069, 2006 WL 3618007, at *3 (C.D. Cal.

1 Amendment’s religion clauses. As noted ante at 1-2, the Rosas opinion

13 DATE: March 22, 2010 PROSKAUER ROSE LLP

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