burgess v. narconon: rtc appeal brief

8/12/2019 Burgess v. Narconon: RTC Appeal Brief

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DOCKET NO. 14-11214-FF

UNITED STATES COURT OF APPEALS FOR THE ELEVENTH CIRCUIT

_________________________________________

BENJAMIN BURGESS, RHONDA BURGESS, HEIDI HOWARD, JOYCE

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 JUDGMENT OF THE UNITED STATES

DISTRICT COURT FOR THE NORTHERN DISTRICT OF GEORGIA

ATLANTA DIVISION

__________________________________________________________________

BRIEF OF APPELLEE RELIGIOUS TECHNOLOGY CENTER, INC.

__________________________________________________________________

John 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


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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.



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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.



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ii

TABLE OF CONTENTS

CERTIFICATE OF INTERESTED PERSONS AND CORPORATE

DISCLOSURE STATEMENT .............................................................................. C-1

STATEMENT REGARDING ORAL ARGUMENT ................................................ i

TABLE OF CITATIONS ......................................................................................... ivI. 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 Jurisdiction Over

RTC. .................................................................................................... 15

1. Plaintiffs Cannot Rest on Their Allegations. ............................ 152. Plaintiffs Have Failed to Show that RTC Has Any

Contacts With Georgia, Much Less Contacts Sufficient to

Confer Jurisdiction Over RTC. ................................................. 17



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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



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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



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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



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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 personaljurisdiction over RTC; and

2. If the claims against RTC were not dismissed for lack of personaljurisdiction, 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.



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III. STATEMENT OF THE CASE

A. IntroductionPlaintiffs 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



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alleged agent or subsidiary of the corporation is subject to personal jurisdiction in

the forum; with respect to specific jurisdiction,Daimlerreaffirms 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 BelowOn June 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 July 2, 2013. (App. Vol. 1, Doc. 1.) On July 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 July 9, RTC, a California corporation with no

ownership or contractual relationship with any of the other Defendants, moved to



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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 Joint

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 FactsIn 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,

1If 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.



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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) (citingMadara 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.



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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]



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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 andexisting 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 associatedwith the religious services and products of the Scientology

religion. (Id. 4.)

c. RTC accomplishes its religious purpose by authorizing the use andsupervision of the Scientology religious trademarks by Church of

Scientology International, also located in California. (Id.)

d. While RTC owns the religious marks associated with theScientology religion, L. Ron Hubbards secular marks, including

the Narconon mark, are owned by ABLE, not RTC. (Id. 5.)



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e. ABLE licenses Narconon and its other secular marks to secularsocial 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 theNarconon drug treatment and education programs. (Id. 6.)

g. RTC has never entered into any contract or license with ABLE, norwith 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 RTCssubsidiary. (Id. 8.)

j. RTC and ABLE have no common ownership, board members, orofficers. (Id.)

k. RTC has never managed or controlled the activities of ABLE, NNInternational, or NNGA. (Id. 14.)

l. None of ABLE, NN International, or NNGA has ever been anagent of RTC. (Id. 9.)



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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 RTChas not contracted with any Georgia resident. (Id. 11.)

o. RTC has not recruited Georgia residents, directly or through anyintermediary, 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 tomaintain, 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 nooffice 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



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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. James 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.

2The 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.



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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. James claims to have been employed by the Church of Scientology and

offers the opinion that RTC runs Scientology. (App. Vol. 2, James Decl., Doc.

19-15 5.) But like the other two declarations filed by the Plaintiffs, that of Mr.

James 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,



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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 ReviewWhether a federal court has personal jurisdiction over a defendant is a

question of law and subject to de novoreview. 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



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(11th Cir. 2011) (citingLee 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



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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 inDaimler,

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, asDaimlerrequires. 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



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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) (quotingMeier ex



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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



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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 WithGeorgia, Much Less Contacts Sufficient to Confer Jurisdiction

over RTC.

Jurisdiction 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



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Ames,Iowa279 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

3Although courts in Georgia had previously read the Georgia long-arm statute ascoextensive 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 (discussingInnovative Clinical)).



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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 ofAgency.

Plaintiffs brief generally argues agency but does not distinguish between

general and specific jurisdiction. Neither exists in Georgia as to RTC.

Specific Jurisdiction. 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) (quotingHelicopteros 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



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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 (quotingBurger 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

4While 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 Georgialaw 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)).



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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 Jurisdiction.

Nor is RTC subject to general jurisdiction in Georgia.

InDaimler, 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 itsprincipalplace 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



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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 Pennoyerultimately gave way to a less

rigid understanding, id. at 753-54, notably in the canonical case ofInternational

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 theDaimler Court traced the development of the doctrines of

general and specific jurisdiction, noting thatInternational 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, quotingInternational Shoe, 326

U.S. at 317, 66 S. Ct. at 159.

5The 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.



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TheDaimlerCourt emphasized, however, thatInternational Shoe did not

significantly expand the concept of generaljurisdiction 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 Pennoyerssway, but we have declined to stretch general

jurisdiction beyond limits traditionally recognized. Daimler, 134 S. Ct. at 757-

58.6 The Court held thatInternational 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]sInternational 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, quotingInternational Shoe,

6The Court reviewed its major cases on general jurisdiction to demonstrate its

point, noting that inHelicopteros 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 inGoodyear 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 generaljurisdiction over a defendant. Daimler, 134 S. Ct. at 757, quoting

Goodyear.



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326 U.S. at 318, 66 S. Ct. at 159 (emphasis added). Instead, theDaimlerCourt

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).

7TheDaimlerCourt made clear that the general jurisdiction inquiry does not

focu[s] solely on the magnitude of the defendants in-state contacts. . . . Generaljurisdiction 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).



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Finally, theDaimlerCourt 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. Daimlershows 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

8The instant case is in this respect (among others) unlikeMeier 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



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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.



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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



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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 Joint 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.



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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 June, 2014.

s/ John H. Fleming

John 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)

[email protected]

[email protected]

[email protected]

Attorneys for Appellee

Religious Technology Center, Inc.



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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: June 16, 2014

s/ John H. Fleming

John H. Fleming



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CERTIFICATE OF SERVICE

I hereby certify that on June 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:

Jeffrey R. Harris

Rebecca C. Franklin

Yvonne S. Godfrey

HARRIS PENN LOWRY LLP

1201 Peachtree Street, NE400 Colony Square, Suite 900

Atlanta, GA 30361

[email protected]

[email protected]

Cari K. Dawson

Daniel F. Diffley

David B. Carpenter

ALSTON &BIRD LLP

One Atlantic Center1201 West Peachtree Street

Atlanta, GA 30309-3424

[email protected]

[email protected]

[email protected]

Thomas M. Barton

Aaron P.M. Tady

COLES BARTON LLP

150 South Perry Street, Suite 100

Lawrenceville, GA 30046

[email protected]

[email protected]

John K. Larkins, Jr.

W. Taylor McNeill

CHILIVIS,COCHRAN,LARKINS &

BEVER LLP

3127 Maple Drive NE

Atlanta, GA 30305

[email protected]

[email protected]

I further certify that on June 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:



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John 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

John H. Fleming
