New York Law Journal, 1/16/2001: Dismissal of Scn libel suit against Time magazine upheld

14 Jan 2001

http://www.nylj.com/stories/01/01/011601a1.htm

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Dismissal of Scientology Libel Suit Upheld

By Mark Hamblett
New York Law Journal
Tuesday, January 16, 2001

IN A LIBEL lawsuit, the Church of Scientology failed to show actual malice by a writer for Time magazine, which published an exposé of the organization in 1991, the U.S. Court of Appeals for the Second Circuit has held.

The appeals court, in a suit filed over the Time cover story "Scientology: The Cult of Greed," also said that no reasonable jury could find that reporter Richard Behar published allegations about a stock scam and murder-suicide involving members of the church "with purposeful avoidance of the truth."

The court's decision in Church of Scientology International v. Behar, 98-9522, affirmed the ruling of Southern District Judge Peter K. Leisure, who after two and a half years of discovery, dismissed the libel complaint.

Because the church had conceded it was a public figure, Judge Leisure had ruled that it could not meet the heightened standard for showing actual malice under libel law.

Mr. Behar's 10-page article criticized Scientology as a "ruthless global scam" posing as a religion that survived "by intimidating members and critics in a 'Mafia-like' manner." One allegation in the story, denied by the church, was that church member Steven Fishman stole stock confirmation slips in order to join dozens of successful securities class action lawsuits. Mr. Behar reported that Mr. Fishman spent almost a third of the million dollars he made from the stock scam on Scientology books and tapes, and when he was caught, was instructed by the church to kill a psychiatrist that he had confided in, Dr. Uwe Geertz, and then kill himself.

The Second Circuit agreed with Judge Leisure that the church could not make a showing of actual malice in publishing either the stock scam or murder-suicide allegations, which were included in the story after interviews with the participants, including Mr. Fishman and Dr. Geertz.

"[T]he article does not present Fishman's claim as undisputed fact, but rather makes clear that Scientology denies the truth of Fishman and Dr. Geertz's charges," said Chief Judge John M. Walker Jr., writing for the appeals court. "In view of the extensive research Behar conducted and the fact that the death threat was accurately reported as an allegation, we agree with the district court that no reasonable jury could find" Mr. Behar was purposefully avoiding the truth in publishing the allegations.

Reports of Intimidation

Other statements from the article that the court found fell short of actual malice were the "Mafia-like" allegation, a second that called the group "classically terroristic," and a third that read: "Those who criticize the church--journalists, doctors, lawyers and even judges--often find themselves framed for fictional crimes, beaten up or threatened with death."

Another allegation concerned the suicide of a man named Noah Lottnick*. Mr. Behar had written that "The Lottnicks lost their son, Noah, who jumped from a Manhattan hotel clutching $171, virtually the only money he had not yet turned over to Scientology. His parents blame the church and would like to sue but are frightened by the organization's reputation for ruthlessness."

The church had argued that Mr. Behar had a negative view of Scientology, and in the words of Judge Walker, "that his bias pervaded the investigation and caused him to publish false and defamatory statements" about the church--a claim Judge Leisure found unsupported by the evidence. Moreover, Judge Leisure said that the church had failed to show inadequate investigation on the part of the reporter.

Both findings were upheld by the Second Circuit. Judges Jose A. Cabranes and Fred I. Parker joined in the opinion. Burt Neuborne, of counsel, and Eric M. Lieberman, Andrew J. Fields and Scott T. Johnson, of Rabinowitz, Boudin, Standard, Krinsky & Lieberman, represented the Church of Scientology International. Floyd Abrams, Dean Ringel and Janet A. Beer, of Cahill Gordon & Reindel, along with Robin Bierstedt of Time Inc., represented Mr. Behar, Time Warner Inc., and Time Inc. Magazine Company.