1 IN THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF COLORADO

Civil Action No. 95B2143

RELIGIOUS TECHNOLOGY CENTER,

Plaintiff,

vs.

F.A.C.T.NET, INC., et al.,

Defendants.

REPORTER'S TRANSCRIPT

10 MOTION FOR PRELIMINARY INJUNCTION

13 Proceedings before the HONORABLE JOHN L. KANE, JR.,

14 Judge, United States District Court for the District of

15 Colorado, commencing at 10:00 p.m., on the 8th day of

16 September, 1995, in Courtroom C401, United States Courthouse,

17 Denver, Colorado.

DEBORAH A. STAFFORD, Official Reporter

23 P.O. Box 3592

Denver, Colorado, 80294

24 (303) 5710530

25 Proceedings Reported by Mechanical Stenography

Transcription Produced via Computer

20 THE COURT: Thank you very much. Call your first

21 witness, please.

22 MR. COOLEY: Warren McShane, please.

23 THE COURT: I think everyone should know when the

24 oath is being administered, I do not allow any other conduct

25 to be taking place. The witness is entitled to that respect.

1 So we'll just wait a minute until these exhibits come in and

2 then we'll proceed with the taking of the oath. Since there

3 are a number of spectators, I might point out to you that you

4 are free to come and go as you wish except as the oath is

5 being taken, I don't want people moving around at that time.

6 MR. KELLEY: It's my fault, Your Honor. I told them

7 to come in.

8 THE COURT: Mr. Case said he hadn't notified people

9 before. It may be an idiosyncrasy, but it's one that I am

10 comfortable with.

11 MR. KELLEY: I am familiar with it, too, and I

12 apologize.

13 (Warren L. McShane was sworn.)

14 THE COURTROOM DEPUTY: State your name for the

15 record. Please spell your last name.

16 THE WITNESS: Warren L. McShane, MCSHANE.

17 DIRECT EXAMINATION

18 BY MR. COOLEY:

19 Q What position do you hold with Religious Technology

20 Center, sir?

21 A I am the president of the corporation.

22 Q How long have you held that position since?

23 A Since January 1994.

24 Q How long have you been with Religious Technology Center

25 and in what capacities?

1 A I first became employed with R.T.C. in August 1983.

2 I have held various positions within R.T.C. mainly

3 dealing with the protection of intellectual property rights.

4 Q Have you worked continuously in the area of having primary

5 responsibility for the enforcement of the R.T.C.'s

6 intellectual property rights?

7 A Yes.

8 Q Would you tell us, sir, what steps are taken to maintain

9 the confidentiality of the O.T. levels?

10 A Okay. From the very beginning of time when they became

11 available to the church from Mr. Hubbard, he has always

12 stressed their confidentiality. When the materials were sent

13 to trusted aids of his back in 1966, they were instructed to

14 copy them.

15 MR. KELLEY: I don't think there is any foundation

16 for this.

17 THE COURT: Overruled.

18 THE WITNESS: They were instructed to maintain their

19 confidentiality. In fact, they weren't even allowed to look

20 at them when they copied them, and they were to be held in a

21 safe, so that there would be an additional copy to the one

22 that Mr. Hubbard had at the time in case anything happened,

23 natural disaster, whatever happened, he had copies. From that

24 point when they were allowed to be viewed by the parishioners

25 who had obtained the correct spiritual level, parishioners

1 were made to sign confidentiality agreements and the materials

2 were always kept under lock and key, usually in separate

3 rooms, separate filing cabinets and only allowed to be viewed

4 when the qualified person is in the room usually with a

5 supervisor to oversee the person's study of those materials.

6 If the materials went anywhere within the church, they were

7 always couriered within locked briefcases always accounted

8 for. They were logged in and out of their secured filing

9 cabinet, so they would always be maintained and always be kept

10 track of. Over the years, the technology has increased and

11 improved, and we have hopefully kept up with technology and

12 increased our security to what it is today. I can go into the

13 details what it is today. If you would like me to.

14 MR. COOLEY: Could the exhibits be given to

15 Mr. McShane? Does the court have its book of exhibits.

16 THE COURT: Mr. Case will get them to me now.

17 THE COURTROOM DEPUTY: He will.

18 THE COURT: I have it now.

19 MR. COOLEY: Your Honor, the first 27 exhibits relate

20 to the area which Mr. Kelly has said is not going to be in

21 dispute, at least at this hearing, namely, the copyrights, the

22 title to the copyrights, be the copyright registrations, those

23 are all in the exhibit book as Exhibits 1 through 27.

24 THE COURT: Thank you.

25 BY MR. COOLEY:

1 Q I am asking the witness now to focus on the photographs

2 which have been marked as Exhibits 29 through 58, and tell us

3 generally what those depict, what they reflect with respect to

4 security procedures?

5 A Certainly. Like I stated, the technology has increased

6 over the years, especially in the advent of computerization.

7 In modern times when a parishioner requests access to the

8 materials, as his next step in the spiritual bridge, he has to

9 apply for permission to obtain access. That is not contingent

10 on any donation fee he would pay. The eligibility for him to

11 have access comes to R.T.C. R.T.C. approves everyone who goes

12 onto the O.T. levels. We ensure that the person is ethically

13 of the standard that we require, that they have no

14 qualifications which would not allow them access.

15 Q Disqualifications?

16 A Disqualifications, sorry. Once we have approved that

17 person, then he is allowed to have access to the materials at

18 the text level that is next on his sequence.

19 Q Do these photographs all show security procedures that are

20 in place?

21 A Yes, they do. The first one which is Exhibit 29 I believe

22 shows the eligibility for O.T. levels. That's something that

23 the person who would receive once he has had clearance from

24 R.T.C., then the photographs depict the sequence that he would

25 go through and the various stages to ensure their security.

1 The important break through that we have affixed to these

2 materials is computerization. All of the documents themselves

3 are in binders which you can see. I will point to one.

4 Exhibit 48, for instance, this shows one of the O.T. levels.

5 This happens to be O.T. VI, and you will notice they are in

6 binders. These binders are sealed and cannot be opened. The

7 rings within them cannot be opened, and the packs themselves

8 are wired into the computer system. When the course

9 administrator removes these packs from their secure cabinets,

10 they are unplugged. As soon as they are unplugged, the door

11 to that course room is locked magnetically, so no one can

12 leave the room with the materials. The course administrator

13 has a specific amount of time, usually about 20 seconds, to

14 plug in the pack at the table where the parishioner would be

15 studying his materials. Once that's plugged in, the alarm

16 system is turned off. That is the same procedure that's done

17 for all of the O.T. levels.

18 Q Have the O.T. levels been kept under lock and key from the

19 beginning in locked cabinets?

20 A Yes, they have.

21 Q Have they been logged out consistently from the beginning?

22 A Yes, each pack has been given a number has since the very

23 beginning, and when a parishioner when a course

24 administrator assigns it back for a parishioner for study in

25 the course room, then that particular number is logged out to

1 him.

2 Q In an effort to place the advanced technology, which are

3 these upper levels that you have referred to, in perspective

4 can you tell us the origin of the Scientology scriptures?

5 A The origin the beginning started in 1950 when

6 Mr. Hubbard wrote the first book Dianetics The Modern

7 Science of Mental Health. That technology addressed man and

8 his relationship to the body of the physical universe. From

9 that and as he continued his research he discovered that

10 mental image pictures that a person records at the time of

11 traumatic experiences were recorded in the mind and

12 specifically in a mind that he called a reactive mind which is

13 a portion of the mind that is not under the person's control.

14 It's a stimulus response mechanism that controls the

15 individual in times where certain traumatic experiences might

16 be I want I don't want to use any Scientology terms. I am

17 trying to keep this as simple as possible. Certain instances

18 in present time may rekindle some of the past experiences or

19 certain things that are in that traumatic experience. Maybe

20 it's the same time of day or same sound that would rekindle

21 that thought and then have that negative reaction on the

22 person at the present time. These negative impulses and

23 pictures or stories in the reactive mind Mr. Hubbard

24 discovered this and discovered a way of alleviating that. In

25 this process of doing that he discovered that looking at these

1 pictures, he asked the question who was actually looking at

2 them. What entity was looking at these pictures. If you say,

3 okay, get a picture of a cat in your mind, and everybody sees

4 a cat. Who is looking at that cat? That was the question

5 that he asked of himself. He discovered and actually kind a

6 phrase or an identity for that person at that time was called

7 just the I. The person himself not his body or the mind but

8 the actual spiritual being himself. From that point that has

9 led into more of the spiritual realm. He then coined a word

10 for that person I, he called it Thetan, THETAN, which is

11 taken from the Greek letter Theta.

12 Q Is the word Thetan the T in O.T.?

13 A Yes.

14 Q What is the O?

15 A Operate. I can get to that in a minute. Once he

16 discovered this Thetan as this spiritual being, he then

17 continued his research and discovered that there have been

18 certain instances in the past far back in history that have

19 debilitized the Thetan and all Thetans. Have led to what the

20 present condition is of most Thetans, that they are not aware

21 of who they are. They are not aware of their inherent

22 abnormalities, and that many of us are stuck in the physical

23 universe and do not have a clue of what occurred or how to

24 deal with these inabilities.

25 Through his research and discoveries over the years

1 he found the way out. He found what had happened many, many

2 years ago, traumatic and devastating circumstances to all

3 Thetans and discovered and developed a way out, so to speak, a

4 particular series of processes and things that a person can do

5 in Scientology that can rekindle the person's native abilities

6 and his natural spiritual awareness of himself and others. He

7 also found at that time period that that unknowingness or the

8 blocks that occurred were done intentionally and that those

9 blocks were designed to stop anyone from discovering what had

10 occurred way back then.

11 That is the reason why these materials are kept very

12 confidential because in the wrong hands, since he discovered

13 how to reverse that, negative instances that occurred and put

14 a person back into his native spiritual sense, that if in the

15 wrong hands that that technology could be used to further

16 degradate the individual and stop him from regaining his

17 natural abilities and natural spiritual awareness of himself

18 and others.

19 From that point on, materials have always been kept

20 confidential, and it's inherent within the materials

21 themselves that they have to be kept that way. And that's why

22 we protect them so vigorously.

23 Q And the confidentiality of these upper level materials

24 doesn't apply to all Scientology scripture, does it?

25 A Not at all.

1 Q Are there a vast body of Scientology religious technology

2 that is available to the public in libraries and published

3 books and the like?

4 A The majority of Mr. Hubbard's works are publicly

5 available. The confidential levels are a portion of the

6 materials that he discovered but are a small portion in

7 comparison to what he has discovered and written out and

8 published in books since the early fifties. These are

9 publicly available, sold in church book stories, sold in

10 regular book stores. They are available in libraries.

11 But the key thing to confidentiality is to understand

12 that a person who is not spiritually at that stage to be able

13 to confront what has occurred way back in time, the materials

14 can be harmful to the person or could be harmful to the person

15 spiritually. Mr. Hubbard discovered a gradient of bringing a

16 person up and building, so he can confront those instances

17 that occurred and achieve the spiritual benefit. That's why

18 it's very, very important, and we stress strongly that the

19 person has to do Scientology in the exact sequence Mr. Hubbard

20 discovered and created.

21 Q Is that an article of religious conviction and faith by

22 the Church of Scientology and all Scientologists?

23 A Absolutely.

24 Q Now, at the time that these advanced technologies

25 religious technology materials were made available to people

1 who had reached the proper level so as to have them, were new

2 organizations, church organizations formed to deliver their

3 level?

4 A Yes, they were. In 1966 Mr. Hubbard made his major break

5 through when he discovered a lot of these instances that

6 occurred in the past. And that level was called O.T. III. He

7 had to develop a way of obviously being able to present that

8 to parishioners who had obtained that state. And in order to

9 maintain their confidentiality, he actually started an

10 organization or an organization was formed of the most trusted

11 staff in the church. And this organization was called the Sea

12 Organization. This organization consisted of, like I said,

13 the most dedicated staff in the history of the church. They

14 are mainly responsible for keeping the materials protected and

15 secured. They are also the ones who are only the ones who are

16 authorized to deliver this material to parishioners. Special

17 advanced churches were created to deliver this material to

18 parishioners. There are six of them actually in the world.

19 They are specifically licensed by R.T.C. to have this

20 material. They are all staffed by Sea Org members in order to

21 keep the materials secure and to ensure their standard

22 delivery to parishioners.

23 Q Just identify the six advanced organizations for the court

24 that deliver these levels?

25 A The largest advanced church that we have is located

1 Clearwater, Florida, called the Flag Service Organization.

2 There is an advanced organization in East Grinstead in Sussex,

3 England. There is an advanced organization in Copenhagen,

4 Denmark. There is an advanced organization in Sydney,

5 Australia, and an advanced organization in Los Angeles,

6 California.

7 Q The reference to the Sea Organization, had Mr. Hubbard in

8 fact done research on advanced technology aboard a ship?

9 A That's how the Sea Organization got its name. He was

10 aboard a ship. Mr. Hubbard was a decorated naval officer

11 during the war. He loved the sea and chose to do his research

12 and his upper research levels at sea, where he could be

13 totally undisturbed. He chose a select few staff members to

14 go with him that he trusted, and that's how the Sea

15 Organization was formed.

16 Q Are the advanced organizations that you have identified

17 staffed solely by Sea Organization members.

18 A Yes, absolutely.

19 Q About how many Sea Org members are there?

20 A Overall, internationally about 5,000.

21 Q Now, the first advanced organization and every one since

22 then, has it applied the confidentiality provisions that you

23 have described?

24 A Absolutely. It was upon instruction from Mr. Hubbard. In

25 fact, it was a requirement that these materials be maintained

1 secure. They would not be authorized to have them unless they

2 were authorized to and they required the parishioners to sign

3 for instance the confidentiality agreements.

4 Q When you say the parishioners had to sign confidentiality

5 agreements, would you look at Exhibits 59, 60, 61 and 62.

6 A Okay.

7 Q Will you tell me what those are please. Tell the court

8 what they are.

9 A They are the confidentiality agreements that I was

10 referring to. They have taken different forms, but

11 essentially the essence of the agreement is the same; that is,

12 to maintain confidentiality of materials.

13 Q Whose agreements are these?

14 A These specific ones are all the ones that Mr. Wollersheim

15 signed when he was in the church.

16 Q And was Mr. Wollersheim had Mr. Wollersheim been at

17 O.T. III completion?

18 A I believe he actually got up to O.T. V.

19 Q With respect to Exhibits 63, 64, would you tell me what

20 those are?

21 A These are the confidentiality agreements called a

22 security pledge. Security pledge that Bob Penny has signed.

23 Q Mr. Penny is one of the other directors of F.A.C.T.Net,

24 correct?

25 A That's correct.

1 Q Okay. Now, going on with his passing on, we don't have to

2 get into it in any detail, is it fair to say that R.T.C. today

3 is the party or corporation in the church charged with the

4 protection of the upper level materials?

5 A Yes, they are.

6 Q And is it R.T.C. who licenses the use of those materials

7 to other churches?

8 A That's correct.

9 Q And does it in fact license those materials to the mother

10 church, Church of Scientology International?

11 A That's one of the organizations.

12 Q And other organizations as well. These were these

13 works, these upper level materials, which I take it covers the

14 range of power through O.T what O.T. level? Should I wait

15 for Mister

16 THE COURT: No, it's all right. You can wait if you

17 wish, but that's okay.

18 BY MR. COOLEY:

19 Q Give me the range of upper level materials.

20 A The ranges from level which is called power which is the

21 first confidential level and goes all of the way to the level

22 called O.T. VIII. That's the level that have been released

23 for delivery to the public. There are levels that are above

24 that.

25 Q Incidentally, the socalled O.T. VIII that is contained in

1 the Fishman affidavit, is that a legitimate O.T. VIII?

2 A No, it's not. It's a complete forgery.

3 Q It bears a date of 1980. Was O.T. VIII even out in those

4 early days?

5 A No, O.T. VIII came out in 1986.

6 Q So the R.T.C. is claiming no copyright or intellectual

7 property interest in that forgery whatsoever, is it?

8 A That's correct.

9 Q Now, could you tell us what the activities of R.T.C. has

10 been over the years to protect the upper level materials and

11 particularly to protect their confidentiality or any

12 infringement of them as well as any attempted violations

13 thereof? What activities has R.T.C. engaged in?

14 A Well, from the very beginning RTC was formed in 1928.

15 Just as a little background, Mr. Hubbard when he was doing his

16 estate planning, obviously he knew he wasn't going to be

17 around forever, he was very concerned about maintaining the

18 integrity and confidentiality of the materials. And an

19 organization was formed which was the Religious Technology

20 Center with the sole purpose of the protection of the religion

21 itself. He assigned to R.T.C. all of the trademarks that are

22 contained within the religion and the advanced technology

23 itself. From that point on, R.T.C.'s job has been to maintain

24 the integrity and the confidentiality of the materials. We

25 have taken great steps over the years to ensure that the

1 security of the materials are increased as the technology

2 increases. We do various inspections of the advanced churches

3 to ensure that they are standardly delivering the materials to

4 the parishioners and maintaining the security requirements.

5 They have logs that show people who are on a

6 particular level that the materials are logged in and out to

7 them. R.T.C. is also responsible, as I testified a while

8 ago, responsible for ensuring that all people are eligible to

9 come on to the O.T. levels, and there is a section within my

10 office that their responsibility is to check the

11 qualifications of these people. We maintain a log, which we

12 have produced here that has the peoples' names that are listed

13 and shows what we do and what we checked to ensure that they

14 do and why. Once we do, then we give the okay to be advanced

15 to allow them onto other levels.

16 Q Is that in one of these exhibits?

17 A I am not sure.

18 Q I don't see it. I don't see it here.

19 A It was produced.

20 Q Produced in the document production?

21 A That's correct.

22 Q Now, has the Religious Technology Center run into

23 situations in which it has had to deal with theft of documents

24 in an attempt to set up a competing church with those

25 documents?

1 A Yes, we have.

2 Q Would you tell the court about that?

3 A Well, the person in April or May of 1983, in England,

4 where some apostates, exmembers, had arranged to steal some

5 of the lower O.T. levels, I believe it was O.T. I, II, and

6 III. Then they planned out the theft of O.T. V materials,

7 which we call the NOTS materials. It's another name for O.T.

8 V. It's important to know that these individuals who

9 attempted to set up splinter organizations or competitive

10 groups needed to have the material in order to attract

11 anybody. This was why they believe the money was with the

12 materials themselves, they could attract people away from the

13 church or attract new people. Without these materials, it was

14 impossible to operate. They have tried over time to create

15 the materials themselves either out of memory or whatever.

16 MR. KELLEY: Your Honor, I object on the grounds of

17 foundation.

18 THE COURT: Overruled.

19 THE WITNESS: Thank you, Your Honor. They attempted

20 this throughout this period of time unsuccessfully, so they

21 figured they had to have originals the copies of

22 Mr. Hubbard's works in order to make the money they intended.

23 This is where the thefts these two instances that I

24 described came to fruition. The theft in Copenhagen, Denmark,

25 is the most important one, I think, because there the O.T. V

1 materials were stolen. These individuals there were three

2 of them in coordination with Mr. Atack, who was director at

3 that time of the F.A.C.T.Net worked out and planned the theft.

4 They dressed themselves up in uniforms that are worn by the

5 Sea Organization, specifically, by my organization, R.T.C.

6 They went in impersonating as being members of R.T.C. in order

7 to quote "inspect their materials," which is something that we

8 do. The staff at that particular organization in Copenhagen

9 fell for the pretense, allowed them to view the materials in a

10 secure room. They preceded then to put them in a briefcase

11 and walk out to the car that was sitting outside in front of

12 the church with its motor running. The whole bit, just like

13 the movies. The gentleman who was driving the car, Mr. Robin

14 Scott, subsequently came back to Copenhagen, where he was

15 arrested at the airport by the Copenhagen police. He was

16 imprisoned, convicted of theft and eventually deported from

17 the country. We didn't get the other two thieves as they

18 never reentered the country. If they do, the same fate will

19 be waiting for them. These materials were then taken back to

20 England and over to Mr. Atak's home, copied and distributed.

21 MR. KELLEY: Your Honor, I object. The witness has

22 no way of knowing this other than hearsay.

23 THE COURT: I am admitting this as a recitation of

24 history by the president of the organization. It's not

25 admitted for the truth of the facts asserted. Objection is

1 overruled.

2 BY MR. COOLEY:

3 Q Did you indicate that Jon Atak was a director of

4 F.A.C.T.Net at the time of the theft?

5 A I don't know that. He was a director at some point in

6 time.

7 Q He later became?

8 A I don't think F.A.C.T.Net existed back then.

9 Q I wanted to make sure that you weren't misstating

10 A I do state Your Honor, I participated in the recovery

11 of those materials and the prosecution of Mr. Scott. I

12 attended all the depositions that occurred there. We obtained

13 injunctions in both England and Scotland. Impoundment orders

14 were issued by the courts. All of the materials were

15 recovered. The defendants in the UK case were supposed to

16 turn everything in, all copies, to our solicitors in England.

17 We subsequently found out that they did not. They violated

18 the law there and copies were sent out to the states and a few

19 other places. Wherever these materials have cropped up, we

20 have sued. The first one was in 1985 when they showed up in

21 California to a gentleman by the name of David Mayo. He set

22 up a competing organization in Santa Barbara, specifically, to

23 offer the upper level materials and substantially made a lot

24 of money from that. As we proved in that court case, he made

25 over $2 million from doing this. An injunction was issued at

1 the time in 1985. All of his materials were impounded. They

2 are in the court to this date. Both sides or both cases were

3 dismissed and are both up on appeal at this point. Other

4 people, other members of his organization attempted to set up

5 other splinter organizations and in each one of those cases

6 have been shut down.

7 Q Are you aware of a concept known as the "free zone?"

8 A Yes.

9 Q What does that mean?

10 A A "free zone" is a loose term that describes mainly

11 exmembers of the church, who want to be out in the field, so

12 to speak, and deliver these materials or deliver Scientology

13 without any authorization from the church.

14 Q They want to use the material but not within the church?

15 A That's correct.

16 Q In addition to the efforts that you have described, have

17 you was one of those a case involving Enid Vien?

18 A Yes. Enid Vien was an exmember of the church who had

19 possessed a copy of one of these materials that were stolen in

20 Copenhagen. She was sued in San Diego. An impoundment order

21 was issued. All of her materials were impounded by the court.

22 We subsequently then filed a series of Summary Judgment

23 Motions which were granted by the court and a preliminary

24 injunction was issued and damages of some $52,000 was awarded

25 for both copyright infringement, trade secret infringement,

1 which are almost the identical issues that are at issue here.

2 Q That are involved here including O.T. III that Mr. Kelly

3 recited to the court?

4 A Yes, sir, they are.

5 Q And that was held to be a trade secret, was it?

6 A Yes, it was.

7 Q As a matter of law?

8 A Yes, the same type of evidence, newspaper articles, et

9 cetera, were attempted to dissuade the judge in that case that

10 that material was not trade secrets and were public domain and

11 she issued her order.

12 MR. KELLEY: Your Honor, I object to his reciting

13 court records.

14 THE COURT: Sustained.

15 BY MR. COOLEY:

16 Q The AAC, that is the Advanced Ability Center of David Mayo

17 that was attempting to use these materials, closed its doors

18 at point, did it not?

19 A Yes, it did.

20 Q When was that?

21 A Sometime in 1986, I believe.

22 Q How many months that was after the entry of the

23 preliminary injunction denying them the right to use these

24 materials?

25 A It was shortly thereafter.

1 Q And have the illicitly obtained materials, including

2 copies, were they to have been returned to the church pursuant

3 to orders by both the criminal court in Denmark and the United

4 States Federal Court in Los Angeles?

5 A Yes, they were.

6 Q And did the thieves as well as Mr. Mayo claim not to have

7 kept copies?

8 A That's what he says.

9 Q But have copies cropped up from time to time?

10 A They have, yes.

11 Q As has the church done everything in its power to track

12 down those copies and to litigate the possession of them

13 wherever it could?

14 A Yes, once we became aware that anybody had possession, my

15 normal reaction would be to contact them usually via our

16 attorneys and ask for their return and a stipulation that they

17 would not be exposed. And if not, then we would take whatever

18 relevant legal action would be called for.

19 THE COURT: We'll take a recess until 1:30.

20 (Recess at 12:00 to 1:25 p.m.)

21 THE COURT: Mr. McShane can come back to the stand.

22 BY MR. COOLEY:

23 Q Mr. McShane, to your knowledge, has any upper level

24 material or advanced technology ever left the possession of

25 the church by any legitimate means whatsoever?

1 A No, it has not.

2 Q And has there in fact ever been any of the advanced

3 technology made available to any parishioner of the church for

4 use under any circumstances and allowed them to keep it?

5 A No, not at all.

6 Q And if anybody ever took a copy, would it have been in

7 violation of their confidentiality agreement?

8 A Yes.

9 Q Now, while you have testified to some theft and

10 misappropriation on your prior testimony, have each of these,

11 to the extent that they occurred, occurred in breach of

12 confidentiality agreements?

13 A Yes, they have.

14 Q And in violation of the procedures under which the

15 materials are held and made available to parishioners?

16 A Yes.

17 Q And has R.T.C. done everything that it possibly can to

18 track those down and enforce its rights?

19 A Yes, we have.

20 Q Has it succeeded wherever it has found these materials in

21 either obtaining a new agreement or in having an injunction

22 entered or having a case pending on the matter?

23 A Yes, in every instance that we are aware of where these

24 materials have been stolen or distributed in some form after

25 the theft, we have taken the necessary steps. Normally, we

1 would contact the person, request that they return the

2 materials to us and agree to keep the materials confidential.

3 If the person refuses, then we end up usually in litigation.

4 Q Now, were any of the Strike that.

5 You testified to the competing church set up by David

6 Mayo; do you recall that testimony?

7 A Yes.

8 Q That went out of operation in April of 1986?

9 A Yes, late April of 1986.

10 Q And that happened as a result of a court injunction

11 entered against the use of those materials?

12 A Yes, sir.

13 Q Now, in the Fishman case; do you recall the Fishman case?

14 A Yes, I am familiar with it.

15 Q Were measures taken to protect the confidentiality of the

16 materials in that case?

17 A Yes, several measures.

18 Q What was done? Will you tell the court?

19 A When the material I believe that was attached to the

20 Fishman affidavit first came into the case, the plaintiff in

21 that action, which was the mother church, Church of

22 Scientology International who was the only plaintiff in that

23 action, moved the court for a confidentiality order, I believe

24 concurrently when that occurred, the case was transferred from

25 Los Angeles to Florida. And then in that interim time period

1 nothing was ruled on. The documents were not available, the

2 whole court file was in transit. And at some point it was

3 in late July the judge in Florida transferred the case back

4 to Los Angeles. And once the court finally got it and the

5 record was there, we moved again to seal the record. I

6 believe there was a ruling from the Magistrate to maintain the

7 confidentiality of anything that was produced, and it stayed

8 that way until the case was finally resolved when we dismissed

9 the action. And then when the court file became then

10 available, then we moved CSI moved to seal the records.

11 That was denied by the District Court Judge. Although he did

12 not rely upon those records at all throughout that whole

13 proceeding. That went up to the Ninth Circuit and the Ninth

14 Circuit remanded it back down, basically instructing the judge

15 to make a determination on whether they were secret or not

16 secret, and it has been pending ever since.

17 Q Was that fully briefed and submitted by November of 1994?

18 A Yes, in fact the R.T.C. moved to intervene which was

19 accepted by the District Court Judge.

20 Q Does the court still have that under submission?

21 A Yes.

22 Q It does?

23 A It does.

24 Q Has the court now sealed that file?

25 A Yes.

1 Q Are confidential religious scriptures unique to

2 Scientology in any way?

3 MR. KELLEY: Irrelevant, Your Honor.

4 THE COURT: Sustained.

5 MR. COOLEY: I was trying to get into a question of

6 comparative religion, and it's a very common thing, Your

7 Honor, historically.

8 THE COURT: I know that.

9 MR. COOLEY: That's enough for me.

10 THE COURT: Okay.

11 BY MR. COOLEY:

12 Q Is Scientology what you would call a missionary religion?

13 A Yes, I would call it that.

14 Q Does it ultimately seek to reach communicants throughout

15 the universe?

16 A Yes, Scientology is nondenominational, and it's our intent

17 hopefully at some point in time that all people on earth and

18 elsewhere would partake in Scientology service.

19 Q And as a matter of religious belief and scriptural dogma

20 in the church, is it harmful for these to be viewed out of

21 sequence?

22 A Absolutely, yes.

23 Q Does that harm in the religion of Scientology accrue not

24 only to Scientologists but to others?

25 A Yes. If I can explain briefly? To a nonScientologist

1 who was unfamiliar with the technology itself, the harmful

2 effect or the spiritual harmful effect may not be evident

3 until a point where he has progressed up the levels. The

4 closer to the O.T. levels one becomes, the more spiritual harm

5 would ensue from prior exposure, if he was not ready for it.

6 Q Is it a central belief and practice in Scientology that

7 the spiritual destiny and salvation of every man, woman, and

8 child in the universe depends upon the precise application of

9 the Scientology religion?

10 A Absolutely.

11 Q Now, were there policies written by Mr. Hubbard regarding

12 the security of these materials?

13 A Yes, there have been many policies.

14 Q And is there specifically a policy entitled no

15 unauthorized copies of upper level materials are to be made?

16 A There is a policy referenced the first of that, yes.

17 Q Is that a 1981 reference?

18 A I believe there is one issue.

19 Q Do you happen to have that available to you?

20 A If it's in here.

21 MR. COOLEY: May I approach the witness, Your Honor?

22 THE COURT: Yes.

23 BY MR. COOLEY:

24 Q Have you policy reference in front of you now, sir?

25 A Yes, I do.

1 Q Could you tell the court what it provides and who wrote

2 it?

3 MR. KELLEY: Your Honor, is this an exhibit? If so,

4 it ought to be offered before he reads from it? If not, it

5 shouldn't be gone into at all.

6 THE COURT: I don't know what it is yet. Let him

7 identify it first.

8 THE WITNESS: This is the policy extract from a

9 policy that was written by Mr. Hubbard in 1981 which covers

10 emphasizes strongly the fact that no copies, no notes, no

11 nothing are to be made of the materials.

12 THE COURT: Then it should be marked as an exhibit.

13 MR. COOLEY: I can't recall whether we did it, but I

14 will. I don't have it on my list of exhibits, so I will pass,

15 Your Honor, and furnish it on a supplemental submission to

16 counsel and to the court.

17 THE COURT: All right.

18 MR. COOLEY: I have to retrieve my document.

19 THE COURT: Okay.

20 BY MR. COOLEY:

21 Q In any event, was the policy of confidentiality created by

22 the author of the materials, namely, L. Ron Hubbard?

23 A Yes, Mr. Hubbard authored all the policies.

24 Q Is it pursuant to that teaching that they are kept

25 confidential?

1 A Yes.

2 Q Now, is any student allowed to keep notes of it when he is

3 doing the process?

4 A No. When a student is on the level as in a course room

5 setting, he is supervised by the course supervisor, a minister

6 who is trained to deliver that level and no notes or any type

7 of notes or anything or tape recordings are made.

8 Q No cribbing?

9 A No.

10 Q Any study aids allowed?

11 A None at all.

12 Q Any flash cards or films or anything like that allowed?

13 A Nothing of that nature whatsoever.

14 Q When is anyone, any Scientologist, ever accepted on to the

15 O.T. levels without having met all the requirements and

16 signing a covenant of confidentiality promising never to

17 disclose the contents of the materials?

18 A None at all.

19 Q Is this a procedure agreed upon by all Scientologists

20 before they are given access to the material?

21 A If a parishioner when he makes his way up the spiritual

22 level wants to partake in the next level which is a

23 confidential level, then he is explained the requirements to

24 be allowed onto that level. He reads the confidential issues

25 that cover the level and if he agrees to abide by that in

1 keeping the materials confidential, then he is permitted.

2 Q Suppose he says he won't agree to that?

3 A Then he is not allowed onto that level.

4 Q Have you yourself taken the upper level advanced

5 technology courses?

6 A Yes, I have done up to O.T. VII back in 1976.

7 Q And have you yourself signed those confidentiality

8 agreements?

9 A Yes.

10 Q Do you know what level Mr. Penny reached?

11 A I believe it was O.T. III.

12 Q And Mr. Wollersheim went to O.T. V?

13 A I believe so.

14 Q Is that old O.T. V or new O.T. V?

15 A It's new O.T. V. There was a change in 1978 where

16 Mr. Hubbard made some additional discoveries and the upper

17 part of the O.T. levels from V, VI and VII were changed and

18 that's what we call new O.T. V, new O.T. VI and new O.T. VII.

19 Q Now, is there anything in the confidentiality that relates

20 to the to the matters of eternal spiritual significance

21 being achieved in a unique step by step way?

22 MR. KELLEY: I don't see the relevance and the

23 document speaks for itself.

24 THE COURT: Overruled.

25 THE WITNESS: The O.T. levels are done in an exact

1 sequence and one is built upon the other. And that's why it's

2 imperative that a parishioner do them in the exact order that

3 Mr. Hubbard laid out and the documents themselves mandate

4 confidentiality and mandate the order in which they are made

5 out.

6 Q Is there any concern for the altering of the materials by

7 shorthand expressions or by paraphrasing or things of that

8 nature if they are in hands other than the church and is that

9 a reason for keeping them confidential?

10 A Absolutely.

11 MR. KELLEY: No foundation, Your Honor.

12 THE COURT: Overruled.

13 THE WITNESS: There cannot be any alteration at all

14 of Mr. Hubbard's work. The way he had laid it, there is an

15 exact sequence of steps. It's very detailed, and there can't

16 be any alteration to it.

17 Q Some of these newspaper articles alluded to buy Mr. Kelley

18 in his opening statement this morning have seen some

19 alterations and paraphrasing?

20 A There have. In all the newspapers articles I have seen

21 since 1982 and before have all contained to some degree some

22 alteration. I don't believe that I can remember sitting here

23 exact quotes from any of the materials.

24 Q Did Mr. Kelley's statement itself constitute some serious

25 paraphrasing of the material?

1 A Absolutely.

2 Q Is that considered spiritually harmful by the Church of

3 Scientology?

4 A Yes, alteration or preexposure to materials we believe is

5 harmful.

6 Q I want to turn, Mr. McShane, to the question of economic

7 harm resulting to the Religious Technology Center by the

8 publication of these materials, failure to keep these

9 materials confidential; is there such economic harm?

10 A Absolutely, yes.

11 Q Would you tell us what it consists of?

12 A Scientology has a system of donations that are fixed per

13 each level and the donation rates for the O.T. levels are

14 known about ahead of time, and parishioners agree to make that

15 particular donation for that level. It's one of our strongest

16 tenets of the religion is that there be fair exchange in no

17 matter what you do in life. For allowing someone to go onto

18 these services, there has to be exchange and that is an agreed

19 upon exchange that all parishioners agree to be able to do the

20 level. R.T.C. licenses the six churches advanced churches

21 to deliver those materials. As part of this license agreement

22 R.T.C. receives a 6 percent licensing fee that is paid from

23 the advanced organizations from the donations that are

24 received from those levels. That 6 percent is used to fund

25 our organization, our expenses, our promotion, and also we

1 make donations to an archival organization to maintain an

2 archive of Mr. Hubbard's works for life. If there is any

3 hindrance of anyone coming into the church that will

4 eventually arrive at those upper level materials, there is

5 economic harm.

6 Q When you say 6 percent, is that 6 percent of the donations

7 received by the church that holds the license to use the

8 materials?

9 A It's 6 percent of the donation once the service has

10 actually been delivered to that parishioner. It's not upon

11 the payment of the donation but the upon the completion of a

12 level.

13 Q And so that whatever the donation is for that level, 6

14 percent of that would go to Religious Technology Center?

15 A That's correct.

16 Q Is that a substantial factor in the support and survival

17 of Religious Technology Center to provide the services that it

18 provides?

19 A Very substantial, yes.

20 Q Could you give us an idea of what percentage of the total

21 income of Religious Technology Center that represents?

22 A I would say probably 94, 95 percent.

23 Q And is that basically how Religious Technology Center

24 staffs itself, pays its bills, and survives to protect the

25 religious technology of the Scientology religion?

1 A Yes, it is.

2 Q Now, in all of your experience since 1983 and in all of

3 the things that we have been talking about, including postings

4 to the Internet and the and the Vien case and cases where

5 you track down copies and the theft in Denmark and the whole

6 thing, have you ever encountered a situation in which it may

7 be said that those materials are generally available?

8 A No, not at all.

9 Q When it's considered in the universe of people to whom

10 they may be administered and delivered or on a lesser basis

11 are they generally available anywhere?

12 A No, they are not.

13 Q Have you seen any evidence to the contrary?

14 A No, not even on the Internet.

15 Q Do you have any clue as to how many people on the Internet

16 have these?

17 A I have no clue. There is a handful of people on the

18 Internet that communicate their views on the church, critical

19 views or whatever. Many allege that they have this or they

20 have that. There have been some quotations, alterations of

21 snippets of materials, and in all circumstances, I have

22 instructed our counsel if anything does come on the Internet,

23 that they are immediately contacted. We have gotten great

24 cooperation from the service providers on the Internet, that

25 if any violation is found, they take the material off and

1 delete it. They send warnings to people who put it on,

2 telling them not to violate the copyrights any more or else

3 they will be suspended. We have cooperated with many, many

4 service providers, in fact, working with service providers to

5 actually form rules and regulations internationally, so that

6 copyright and intellectual property are protected.

7 Q In your view as president of the R.T.C. charged with the

8 primary responsibility of dealing with these matters, do these

9 materials still have significant value to R.T.C. by virtually

10 not being generally available?

11 A Absolutely, yes.

12 Q Completely aside from that, these materials are materials

13 that the various advanced organizations that you have

14 identified earlier intend to continue to deliver on a

15 confidential basis pursuant to the advanced security

16 precautions you have described in those photographs, correct?

17 A Yes, they have to.

18 Q Provided that of course that those materials are continued

19 to be protected?

20 A Yes.

21 Q Now, in terms of the administration of those materials,

22 let's say by the Flag Service Organization which is an

23 advanced organization, correct?

24 A That is right.

25 Q If you get the 6 percent of their income from it, do you

1 have an idea of what it represents to them in terms of

2 essential income to survival?

3 A Well, the income from the upper level materials is the

4 majority of their income overall.

5 Q Does this apply across the board in the Scientology

6 religion to all Scientology organizations, include Religious

7 Technology Center?

8 A That's true, yes.

9 Q Now, the harm that might be the harm that accrues to

10 the church is that limited in any way to the somebody

11 administering these levels to himself or to his friend or

12 using them in that fashion? Is that what the harm is limited

13 to or is it broader?

14 A That's part of the harm but it's broader than that.

15 Q By broader than that, does it cut across the board, strike

16 the whole income fabric of the Religious Technology Center?

17 A Yes, certainly.

18 Q Scientology in the terms of the great sweep of time is a

19 relatively new religion having been in existence how long?

20 A I think the first church was formed in 1953 or 1954.

21 Q So we are talking something on the order of 41 or 42

22 years?

23 A We celebrated our 40th anniversary recently.

24 Q It hasn't been around for hundreds of years, and does it

25 rely solely upon the donations of its parishioners to survive?

1 A That's our sole income, yes.

2 Q Is that part of the funding system whereby fixed donations

3 are set for religious services to ensure the survival of the

4 religion?

5 A Yes, that's the system of donations we use.

6 Q Now, Scientology parishioners need assistance from church

7 staff for application of the confidential religious materials,

8 don't they?

9 A Yes, all levels have assistance.

10 Q But does that mean that there is no market for

11 unauthorized access?

12 A No, there is a market, put it that way, yes.

13 Q That market is a bootleg market, is it not?

14 A Yes.

15 Q Is the concern what existing Scientologists will do with

16 the materials if they fall into their hands or what outsiders

17 will do with them?

18 A It's plainly outsiders. Existing Scientologists would not

19 expose the materials. They have agreed to that tenet of the

20 religion and they abide by that. They are very strongly

21 supportive of that.

22 Q Now, did you personally deal with the copyrights in these

23 works and the registration applications filed with the

24 copyright office for the advanced technology?

25 A Yes.

1 Q Are each of the O.T. levels covered by a single copyright?

2 A Well, it depends on the level. There are some levels that

3 are a series registered as a series.

4 Q Each series is listed in the copyright?

5 A The contents of the series is listed in the registration

6 certificate, yes.

7 Q So I understand, give me an example of an O.T. level of

8 which that is true?

9 A O.T. II, for example, has the main body of the materials

10 and it has 21 steps that are attached to it. And each of

11 those steps are listed out in the certificate itself along

12 with the main body of the work.

13 Q So each one of them is separately covered under the main

14 registration number; is that right?

15 A Yes.

16 Q How many of the O.T. I through VII are copyrighted as a

17 series?

18 A There are three levels O.T. I, II, and O.T. V.

19 Q How many series in I, do you recall, in O.T. I?

20 A O.T. I consists of several issues. There isn't a series.

21 Q By Scientology an issue is something that's issued, not a

22 debatable issue, but something that's issued?

23 A Issued, yes, but not published.

24 Q I am trying to get the term use in the proper context.

25 Sometimes we in the law talk about issues as things we fight

1 over.

2 A Okay.

3 Q In Scientology an issue is something that is a written

4 Scientology matter?

5 A Yes, either handwritten by Mr. Hubbard or typed.

6 Q And in connection with the with the copyrights, did you

7 personally supervise the manner in which they were

8 copyrighted?

9 A Yes, I did.

10 Q Did the copyright office permits you to retain the trade

11 secret aspect of the copyright of the material by copyrighting

12 it in a masked fashion?

13 A Yes.

14 Q Is that the same technique that was developed by the

15 copyright of office for software?

16 A Yes, that's where I got the idea from.

17 Q Tell us from that masking consists of and how it's

18 accomplished?

19 A When I started on this project, I contacted the copyright

20 office to see what method would be allowed to be able to

21 register trade secret material. The gentleman at the

22 copyright office informed me that they deal with software a

23 lot and that they permit a mask to be placed over the work and

24 the mask is a piece of paper that would have slots cut in it,

25 and then the work itself would be copied on a copy machine

1 with the mask over it, so the result would be a sheet of

2 paper, the trade secret work itself, with the slots which

3 would hide text. You would see text from in between the slots

4 which would be for the copyright office to identify there was

5 actually something there. And we allowed at least the

6 identification for the title to be apparent so the copyright

7 office could identify it somehow and all of the levels are

8 done that way and identified accepted by the copyright

9 office.

10 Q Accepted by the copyright office and continue to maintain

11 secrecy?

12 A They were all registered as unpublished works, yes.

13 Q Is that so on all upper level materials that have been

14 copyrighted?

15 A Yes.

16 Q Are you familiar with the socalled Fishman affidavit that

17 is at the heart of this litigation?

18 A Yes, I am.

19 Q Could you tell us how many pages, excluding the phony O.T.

20 VIII material, dealing with O.T. I through VII, how many pages

21 of copyrighted and trade secret material are included in that

22 affidavit?

23 A I believe between 60 and 70. I believe it's 63 or 69. I

24 am not totally sure.

25 Q Have you have you had the opportunity to review the

1 Fishman affidavit Strike that.

2 Was the Fishman affidavit with that material attached

3 retrieved from Mr. Wollersheim's F.A.C.T.Net system?

4 A Yes, it was.

5 Q And in how many separate places did it appear?

6 A In Mr. Wollersheim's hard drive it was in one file. I

7 think it was C drive in two different locations in its

8 entirety. We also found a hard copy in the materials that we

9 seized and then bits of it, meaning that various exhibits that

10 were attached to it, various O.T. levels were found in other

11 areas of the hard drive.

12 Q How many do you remember how many copies of it you

13 found in there?

14 A I don't remember. I did a chart that listed out

15 everywhere any of the O.T. materials were found.

16 Q Is that chart what's the exhibit number? Is that chart

17 an exhibit?

18 A I'm not sure, sir.

19 Q Exhibit 28?

20 A I am not sure, sir.

21 Q Do you have the exhibits there, Mr. McShane, Exhibit 28?

22 A Yes, I do.

23 Q And would you describe what this chart shows?

24 A I put this chart together to show the various confidential

25 materials that were found in either Mr. Wollersheim's

1 apartment or in Mr. Penny's residence which would include

2 either a soft copy or a hard copy.

3 Q What copy does this cover copyrighted works in addition

4 to O.T. I through VII?

5 A We found well, O.T. I through VII is copyrighted.

6 Q In addition, but in addition to them were there

7 copyrighted works that were in Mr. Wollersheim's possession?

8 A Yes, a lot.

9 Q Now, if we read across these columns, the first item, for

10 example, is power and it says, Wollersheim apartment, Box 1,

11 is that a box of hard copies?

12 A Yes, it was.

13 Q And so was it in the computer file?

14 A Correct.

15 Q N/A in the next column indicates that?

16 A That's true, yes.

17 Q And the amount of the work that was copied was 100

18 percent, Hubbard communication bulletin?

19 A All of these issues, they are policy letters or bulletins.

20 Q So an HCOPL is a Hubbard policy letter and Hubbard

21 communication office bulletin and the date also indicates

22 the date on which it was issued, correct?

23 A That's correct.

24 Q So you found and power, you indicated that the upper

25 level material starts with power?

1 A Correct. That's the first confidential element, yes.

2 Q I note that the first three items are copies of that

3 copyrighted work, correct?

4 A In Mr. Wollersheim's apartment, yes.

5 Q So were all three of them found in his Box No. 1?

6 A Well, the box No. 1 is the designation that I gave to the

7 box when it was seized. It was found in various different

8 places.

9 Q But it was a hard copy?

10 A Yes.

11 Q Not a computer copy?

12 A That's correct.

13 Q In each instance it was 100 percent of the work and the

14 copyright registration number for that work is in the extreme

15 righthand column?

16 A Yes, there were photocopies. Yes.

17 Q This chart goes on for quite a few pages, and as a

18 concession to the shortness of life, I am not going to go

19 through every item, but could you tell us whether there were

20 O.T. levels that are on this chart?

21 A Yes, there were several O.T. levels.

22 Q Could you pick them out for us?

23 A Certainly. On page 2 of the chart, line 18 starts with

24 O.T. I.

25 Q O.T. I, 30 November 1966. And that was found in the Penny

1 computer?

2 A That's correct, in the designation below that the D stands

3 for the D drive which was one of his hard drives. And then

4 the following identification, either words or letters,

5 identify the file name itself or where it was found in the

6 computer.

7 Q And the dates saved into the computer is given what's

8 that date there, August 14?

9 A That date is August 14.

10 Q I'm sorry. December 22, 1993.

11 A That would be the date that the file itself was created on

12 the computer, wherever.

13 Q Was it scanned in or loaded into his computer?

14 A That was the date that that filed was created.

15 Q This says that 90 percent of the work was copied?

16 A Yes.

17 Q And does that mean 90 percent of the total work was

18 copied?

19 A No, 90 percent of that particular issue, 30 November 1966.

20 Q So that was a separate issue, that was a copyrighted issue

21 part of O.T. I, correct?

22 A Yes, the O.T. I consists of two, three, or four individual

23 issues.

24 Q This was 90 percent of one of them?

25 A That's correct.

1 Q It was covered under the copyright number listed in the

2 extreme righthand column?

3 A Yes, sir.

4 Q I notice that O.T. I is repeated at item 20, 21, 22, 23

5 through 26. Does that indicate that it's the same item each

6 time?

7 A The dates are there in the second box. The first 18, 19.

8 20, 21, 22 were all the same issue found in different

9 locations.

10 Q Those were all the issue of 30 November 1966 found in

11 different locations on either Mr. Penny's computer or in

12 Mr. Wollersheim's home box, right?

13 A Correct.

14 Q Going onto the item 23, we have O.T. I instruction, 21

15 July 1968, was that a separate issue?

16 A Yes, that's a separate issue for O.T. I.

17 Q That was found where in the Penny computer?

18 A Yes, in the Penny computer. Again, the hard drive and the

19 identification for the file.

20 Q On that one it says date saved if computer file, 122293.

21 What does that date indicate?

22 A It indicates when that file was created.

23 Q What percentage of that issue was copied?

24 A All we found on that particular file was 25 percent of the

25 issue.

1 Q That was covered by the copyright in the extreme

2 righthand corner?

3 A I would like to clarify. When we found some of these

4 things in the computer file, we found several files that had

5 been deleted. And the computer experts ran an undelete

6 program to recover the text to see what it was. When that's

7 done, computers don't file the whole document in one section

8 of the computer file. Usually it's in various different

9 sectors on the disk itself. So this was all that we would be

10 able to recover from that particular section of the disk.

11 Q I take it that in the computer world if you delete a file

12 and don't write over it, it still remains there subject to

13 undeleting?

14 A That's what I was told, yes.

15 Q If you write over it, it disappears all together?

16 A Yes.

17 Q Going down, I see several O.T. I's on that July 21, 1968

18 issue and various percentages. Were these also undelete

19 files?

20 A I believe so, yes, that's why the percentage is so small.

21 Q The next one is O.T. I. We are dealing with a different

22 date, part one, 14 August 1966, and that was found in

23 Mr. Penny's computer?

24 A Yes, it was.

25 Q 30 percent of that issue was found there, correct?

1 A Correct.

2 Q The file having been opened August 14, 1995?

3 A That's correct. And there again you have the copyright

4 listed.

5 Q Now, as we go through these, did you personally make this

6 chart, assess the percentage copying that was involved,

7 crossreference it to the registration, copyright

8 registration, and identify where it was found either on the

9 premises of Mr. Wollersheim or Mr. Penny or on their

10 respective computers?

11 A Yes, I did, sir.

12 Q Is there anything additional that you would like to point

13 out about this, because I noticed page after page of O.T.

14 III for example, I just turned to page 33, and I see item

15 378, O.T. III additional additional O.T. III material,

16 Wollersheim computer, and you give the drive that it's on.

17 Saved on August 21, 1995, 100 percent of that work. What was

18 that?

19 A It was a specific issue that was part of O.T. III. It's

20 entitled additional O.T. III material. And that was found in

21 a particular file in Mr. Wollersheim's computer on the C

22 drive. The entire issue. I think it's a threepage issue. I

23 see that that item repeats itself time and again, 378, 379,

24 381, the percentages varying from 80 to 100 percent.

25 A That's correct, they were found in different locations

1 during the seizure.

2 Q Is there anything that you would like to point out to the

3 court about this schedule that you made, that I haven't

4 brought out because I don't want to go over every item, it

5 would be too cumbersome.

6 A No.

7 MR. KELLEY: I object, Your Honor.

8 THE COURT: He has already said no.

9 Q Nothing else?

10 A That's it.

11 MR. COOLEY: All right. The court will have it as an

12 exhibit then.

13 BY MR. COOLEY:

14 Q Mr. McShane, do you have the book in front of you? Have

15 you the notebook in front of you that comprises exhibit

16 excuse me, Your Honor 79.

17 A Is that a separate book?

18 Q Yes, it is.

19 A I have, it Mr. Cooley.

20 Q Would you explain to the court what this is, Mr. McShane?

21 A Okay. In the time that I had, I have taken what was part

22 of the attachments to the Fishman declaration that contain the

23 confidential material, and I have taken the page by page of

24 that, what was on the computer what was posted by Mr. Lerma

25 and Mr. Wollersheim and did a comparison to the actual text of

1 the church's material. What I attempted to do was to do a

2 sidebyside comparison, as best I could; although our search

3 is continuing since a lot of this material is fairly old and

4 some of it is archived, we are attempting to determine if

5 there was any other infringement but this is what I put

6 together so far.

7 MR. COOLEY: Your Honor, I would request that

8 Mr. McShane be allowed to point out to the court without

9 reading it the specific comparisons that he would he would

10 like to bring to the Court's attention and that the matter be

11 confidential.

12 THE WITNESS: Your Honor, I would discuss the

13 contents I tried to lay out as simply as I could. If you take

14 number one, it's entitled "Operating Thetan, Section Three."

15 MR. COOLEY: May I sit down, Your Honor?

16 THE COURT: Yes, please go ahead.

17 THE WITNESS: This is the this is part of the O.T.

18 III level materials. This is one particular issue. And the

19 section that's highlighted there I have compared that to the

20 item handwritten version from Mr. Hubbard that's used in

21 the church. I believe that you can see that it's a verbatim

22 copy. Again, this is one of our confidential levels. A very

23 significant level for us in the church. It continues to go

24 on. Tab No. 2 is the rest of that paragraph, and as you can

25 see it goes onto the next page which is the data continued,

1 part two. I go through the whole text that way and so you can

2 see on this particular section O.T. III, it runs from No. 1 to

3 No. 43. In fact, I can say honestly that in the years that I

4 have been doing this, this is one of the most substantial

5 copies that I have seen.

6 Q What level is that, sir?

7 A This is O.T. III. We go on from there. The next section

8 is O.T. II. Your Honor, I put these in an order that would

9 show you like from the most amount of copying backwards to

10 paraphrasing that was done. Section O.T. II, again as you can

11 see, it says on tab under O.T. course. O.T. Course Section

12 Two, 24 of April 1967, which is the exact title of the typed

13 version of that the actual church issue which is also

14 called O.T. Course Section Two, the same date. This goes

15 through all of the way through to tab No. 22, yes, tab

16 No. 22. Then under O.T. IV, which is the next O.T. level that

17 I did the comparison to, which is called O.T. IV which matches

18 the church issue, which is dated HCOB September 8, 1971,

19 R1. At the bottom of the page there you can see it says O.T.

20 IV run down. And the rest of the words that are there. This

21 goes through tab No. 6. Then it goes onto O.T. VII, and I

22 have just included in this, Your Honor, the page that says

23 page No. 7 on the church issue, the page where the

24 infringement was found. Especially these levels O.T. I, O.T.

25 VII, O.T. VI I am still searching for the earlier issues to

1 determine if there is any other infringement.

2 This will give a fairly good example of the text that

3 was taken. And these Your Honor, you see a lot of these

4 are in question form. Statements, instructions to the

5 parishioner on what to do once he is in his counseling

6 session. These are part of the work that Mr. Hubbard

7 discovered as to undo the harmful and devastating effects that

8 occurred many years ago. As you can see, this is why they are

9 highly confidential because we don't want people to take those

10 simple statements there and do that with themselves until they

11 are totally prepared to do that.

12 There are many different particular processes that

13 contained in O.T. VII. And not all of the processes were

14 attached to the Fishman affidavit, which is why you don't see

15 the entirety of the work here. When I produced these

16 materials to the defendants and to the court here, I only

17 produced the copies that have been infringed. I did include a

18 full set of materials that were submitted to the copyright

19 office that were passed, so that the defendants would see the

20 volume that's included here, but I only in order to protect

21 the trade secrets that were not included in the Fishman

22 affidavit, I did not produce those.

23 Then towards the back, Your Honor, you will see as we

24 get into O.T. VI and O.T. VII, you will see different color

25 highlighting. The blue highlighting, this is where the

1 paraphrasing comes on.

2 THE COURT: Can you give me the exhibit number,

3 please?

4 THE WITNESS: Under O.T. VI towards the back, Your

5 Honor, under tab No. 1 you can see yellow highlighting and

6 blue highlighting. What I tried to do here is to illustrate

7 the paraphrasing that was done. This is an example where

8 someone has attempted where it appears not having the

9 actual material itself has attempted to reconstruct or some

10 form remember what these issues are.

11 MR. COOLEY: Are we both the court and the witness

12 on the right page?

13 THE COURT: I'm sorry, but

14 MR. COOLEY: Let's back up Mr. McShane and give the

15 court a precise location.

16 THE WITNESS: Towards the back, Your Honor, you will

17 see the last section is called O.T. I. Towards the very back

18 of this binder, Your Honor. I'm sorry.

19 MR. COOLEY: That volume is Exhibit 79, Your Honor,

20 itself.

21 THE COURTROOM DEPUTY: We have O.T. I.

22 THE WITNESS: In this one, Your Honor, this is the

23 blue highlighting. This is basically the paraphrase of what

24 Mr. Hubbard has written. You can see the concept, the general

25 concept is there. Like I said earlier, I am continuing my

1 search to see if I can find earlier references than what I

2 included to see if there was any more direct infringement or

3 any other paraphrasing that has taken place here.

4 THE COURT: Okay.

5 BY MR. COOLEY:

6 Q With respect to the paraphrasing, have you attempted to

7 pick out those items that are substantially similar in

8 expression?

9 A Yes.

10 Q Have they also included in the trade secret context a

11 substantial similarity of ideas?

12 A Yes.

13 Q So what you have attempted to highlight for the court

14 deals with both copyright and trade secrets?

15 A Yes, as best I could. The O.T. VII or O.T. I or O.T. VI

16 materials, Your Honor, they only consisted of maybe 15 pages

17 in total, so the amount of copying is not as big as in O.T. II

18 or O.T. III. We are talking a couple hundred pages a piece.

19 Q Now, with respect to how much more there is to search on

20 these computers?

21 A What I have requested from our archives people to see if

22 they can go back and find any other revisions or any other

23 earlier works to determine there is any other copy

24 copyright infringement. The works have been revised over the

25 years. O.T. VII, for instance, was originally written by

1 Mr. Hubbard in 1970. As Mr. Hubbard's research continued, he

2 would develop new discovery would which would then amend the

3 level or change the level in some form or add to it. What I

4 have attempted to do since these materials are in archives is

5 try to find exactly what other materials are there that have

6 been infringed.

7 Q Did L. Ron Hubbard who authored the materials intend them

8 for use by anybody but Scientologists?

9 MR. KELLEY: I have an objection. No foundation.

10 THE COURT: Sustained.

11 BY MR. COOLEY:

12 Q Were they given to anybody except Scientology churches?

13 A No, they were not.

14 Q Were they authorized for use other than for Scientology

15 churches or other Scientology parishioners?

16 A No, they were not.

17 Q Does the Religious Technology Center have any concern

18 about the potential loss of parishioners through ridicule by

19 taking portions of the materials out of context?

20 A Yes, very much so.

21 Q Does the Religious Technology Center have any concern

22 about potentially loss of income and donation of parishioners

23 from competing churches, competitive knockoff materials and

24 essentially black market trafficking in protected works?

25 A Yes.

1 Q Does the Religious Technology Center have a concern about

2 violation of the instructions of their Scientology founder and

3 the author of the materials concerning the use of the

4 materials precisely as written?

5 A Yes.

6 Q Does the Religious Technology Center have a concern about

7 the violation of the instructions issued by Mr. Hubbard, the

8 religion's founder who gave them to the church for use in a

9 precise and exact way if they are exposed to people not

10 spiritually ready for them?

11 MR. KELLEY: Leading and irrelevant.

12 THE COURT: He has already answered the question in

13 his testimony.

14 MR. COOLEY: Okay. If Your Honor heard it, I am

15 delighted.

16 BY MR. COOLEY:

17 Q Are you concerned about irreversible alteration of

18 religious beliefs?

19 A Of course.

20 Q And spiritual harm to Scientologists everyone and every

21 where?

22 MR. KELLEY: Irrelevant, Your Honor.

23 THE COURT: Overruled.

24 A That's one of our primary concerns, yes.

25 BY MR. COOLEY:

1 Q Are you concerned about violation of the intended use of

2 these materials as strictly unpublished materials?

3 MR. KELLEY: Asked and answered, Your Honor.

4 THE COURT: Sustained.

5 MR. COOLEY: I think that's all.

6 CROSSEXAMINATION

7 BY MR. KELLEY:

8 Q Good afternoon, Mr. McShane. I have a couple of

9 questions. First of all, on your Exhibit 79, which is your

10 comparison of original text with text you say you found at the

11 defendants' residences; is that what that exhibit is?

12 A Yes.

13 Q I didn't understand what you said when said you were

14 including only the FishmanGeertz materials. Do I understand

15 that Exhibit 79 contains the entirety of each of the works

16 claimed to be infringed in this case?

17 A It contains the pages where the infringing work was found.

18 There may be other pages that make up that 63 or 69 pages

19 where I haven't found an infringement yet or where we are

20 still searching for infringement.

21 Q For example O.T. III consists of approximately 200 pages,

22 does it not?

23 A The whole level, yes.

24 Q As registered?

25 A I believe so.

1 Q How many pages are in that exhibit?

2 A Do you want me to count them? I don't know.

3 Q Would it be easy to count? That might be the fastest way

4 to do it.

5 A Sure.

6 THE COURT: Do you mean how many pages relating to

7 O.T. III?

8 MR. KELLEY: Yes.

9 THE COURT: Okay.

10 THE WITNESS: If you take just the pagination itself

11 or the tabs, there are 46.

12 BY MR. KELLEY:

13 Q 46 pages out of 200?

14 A Yes, but you also have to understand that the 200 pages

15 I would have to see what was dispositve to count those pages,

16 but I believe you took that 200 from an affidavit I did. I

17 don't recall as I sit here right now if that's the whole work,

18 including nonconfidential stuff issues that are included in

19 that level or that's just all the confidential materials. I

20 believe we supplied to you the deposit copies which contained

21 all of the confidential materials. If we can have those,

22 then, I can give you the exact page number.

23 Q We'll do that.

24 MR. KELLEY: Your Honor, could I return to my table

25 for a minute?

1 BY MR. KELLEY:

2 Q I am going to hand you, sir, what was produced to us as

3 the deposit for O.T. III.

4 A Okay. Just a second, sir. I am not finding O.T. III in

5 here, Mr. Kelly.

6 Q Which deposits are those, sir?

7 A It starts with O.T. VII. They seem to be out of sequence.

8 There are some O.T. IV in here.

9 Q Do you see the deposits for O.T. III there?

10 A Not in that first folder. I don't see it in the second

11 folder either. I'm sorry, Mr. Kelley, we don't see it in

12 here.

13 Q We are not seeing it in the materials produced as well.

14 Put that question aside for a moment. Are you able to tell us

15 how many pages, as you say, nonconfidential material that was

16 part of the registration pack in O.T. III?

17 A Nonconfidential issues would not be part of the

18 registration pack. The only materials the only materials

19 that got registered were the confidential materials as a

20 series.

21 Q How many pages were registered for O.T. III?

22 A I thought we were looking for deposit copies.

23 Q You don't can't do it without looking at that?

24 A No, I have to see what was deposited.

25 Q Let me ask you to take a look at your declaration,

1 Exhibit N.

2 Mr. Case, would you hand the witness Exhibit N.

3 A I have it, sir.

4 Q This is a declaration you filed in the case now pending in

5 the Northern District of California where a seizure was made

6 at the home of Mr. Dennis Erlich?

7 A That's correct.

8 Q And at paragraph 14 of that page 9?

9 A I have it.

10 Q Do you see that?

11 A Yes.

12 Q In that case, did you make this declaration, "To put this

13 in perspective, the following is a list of advanced levels and

14 the amount of pages of material contained in each level?"

15 A That's what it says, yes.

16 Q Could you tell us how many are in O.T. I?

17 A It says 25 pages.

18 Q O.T. II?

19 A 300 pages.

20 Q O.T. III?

21 A 200 pages.

22 Q And O.T. IV?

23 A 63 pages.

24 Q O.T. V?

25 A 35 pages.

1 Q O.T. VI?

2 A Ten pages.

3 Q And O.T. VII?

4 A 80 pages.

5 Q Now, at the home of my clients, Messrs. Wollersheim and

6 Penny, you found O.T. materials that corresponded to those

7 attached to the Fishman affidavit; is that right?

8 A That's correct.

9 Q And the only additional materials were a few pages out of

10 O.T. II; is that correct?

11 A That's not correct.

12 Q What additional pages of the O.T.s did you find of those

13 contained in the attachments to the FishmanGeertz affidavit?

14 A We found I'm sorry. You are correct as far as the

15 attachments to the Geertz affidavit, you are right. O.T. I

16 through VII.

17 Q All right. Did you find any O.T. materials at Mr. Penny's

18 or Mr. Wollersheim's residence in addition to those attached

19 to the FishmanGeertz affidavit as Exhibit G?

20 A Yes, we did.

21 Q Which ones?

22 A Additional O.T. II materials.

23 Q That's about two or three pages?

24 A No, a lot more than two or three pages.

25 Q Well, how many was it?

1 A I am not sure. I would have to count.

2 Q Let me ask you to take a look at Exhibit P. Thank you,

3 Mr. Case.

4 A I don't see it in here.

5 Q It may be in the same notebook, but I don't think it is.

6 Before I ask you that, whether they are confidential or not,

7 these page numbers that you just rattled off from your

8 declaration in the Erlich case, are the numbers contained in

9 the series of each of those works?

10 A Yes, both confidential and nonconfidential.

11 Q But either way for purposes of what work is or is not,

12 those are the number of pages included; isn't that right?

13 A Yes.

14 Q That's what's on file with the copyright office masked or

15 unmasked?

16 A There are no unmasked.

17 Q You masked the whole 200 pages for O.T. III?

18 A No, we took which was confidential and on O.T. II, for

19 instance, and took those copies, those issues, and registered

20 them as being masked. There may be several other issues that

21 are part of that level that are nonconfidential, and those are

22 not included in the Fishman affidavit. But they are part of

23 the O.T. II level.

24 Q As part of the work in which you claim a copyright?

25 A Yes.

1 Q Is Exhibit P, in fact, the Fishman affidavit?

2 A Yes, it does appear that way.

3 Q Are those the attachments to it that we have been

4 referring to in Exhibit G?

5 A Yes.

6 Q For the record, in compliance with the court order, Your

7 Honor, that is submitted as a confidential exhibit. Where it

8 goes from here is up to the court. I think you told us that

9 there are pages of the confidential portions of the O.T.s that

10 you have not submitted in Exhibit 79; is that right?

11 A That's correct, yes.

12 Q We don't know how many pages there are without looking at

13 the registration deposits?

14 A If I knew exactly how many there were that were

15 registered, then we can subtract what's included in those.

16 Q You haven't submitted those to us or to the court?

17 A No, I haven't. They were not fringed, so I didn't include

18 them.

19 Q What was infringed of the work, was it not

20 A Issues within the work was infringed.

21 Q You only included those portions of the work that you

22 think are infringed?

23 A Correct.

24 Q You have not included the nonconfidential portions of the

25 work in any submissions so far, have you?

100

1 A No, the nonconfidential portions were not infringed.

2 Q We'll let the court decide whether we look at portions

3 being infringed or the entire work being infringed, but it's

4 clear that the court doesn't have the entire work,

5 confidential or nonconfidential, to use to compare against the

6 Fishman affidavit material; isn't that right?

7 A Yes, that's correct. If that's needed, I will gladly it.

8 Q Could you please take a look at Exhibit double I, please.

9 A I have it, Mr. Kelly.

10 Q Is this a letter by your counsel with a copy to you

11 addressed to me dated September 7, 1995?

12 A Yes, sir.

13 Q What does that purport to address?

14 A You asked me in my deposition that if I could identify the

15 files, either soft copy or whatever, where additional

16 materials were found. The Fishman affidavit where they were

17 specifically found in the hard copy files sorry the soft

18 copy files and anything in addition to the Fishman affidavit.

19 Q Does this cover in a less detailed form all of the matters

20 that you referred to in the exhibit you just went through that

21 contains a list of all of the infringing materials and so

22 forth?

23 A Yes, it includes that, yes, sir.

24 Q This is just simply a much more generalized form of the

25 same information?

101

1 A Yes.

2 Q It refers to all of the confidential materials you claim

3 are infringing?

4 A I believe so, yes.

5 Q Thank you. I was just hoping to have something a little

6 less cumbersome to deal with.

7 A Okay.

8 Q Now, regarding security, the high tech procedures what

9 that you have described are something that has come into being

10 pretty much in the last ten years; isn't that right?

11 A Yes, as I explained as the technology improved, we

12 improved our security.

13 Q In days before that, parishioners were permitted to take

14 the O.T.s home in locked briefcases, were they not?

15 A No, they were not, sir.

16 Q At least part of them?

17 A As we went over in detail in the deposition, there were

18 plattens which are sections of materials that a person would

19 need to audit to take it with them, yes.

20 Q The Church of Scientology claims some 8 million adherents?

21 A Internationally, yes, I believe that's correct.

22 Q Of those 8 million adherents, we can assume that many

23 thousands have had access to these materials at one time or

24 another, can we not?

25 A I think there are probably thousands that have done the

102

1 O.T. levels at some time in their life, yes.

2 Q Now, you have described the licensing have these materials

3 to churches of Scientology and the fact that those churches

4 receive donations. As a condition of permitting a parishioner

5 to receive a given O.T. level, what's the required donation

6 for O.T. I?

7 A I don't know. I believe we supplied you an exhibit of the

8 entire donation rate. If I could see that, I could tell you.

9 Q Can you give us a range for O.T. I?

10 A I think around 1,500 or 1,800.

11 Q How about O.T. II?

12 A I don't know, sir. If I could see the list, I could tell

13 you.

14 Q Can you tell us for O.T. III?

15 A No, I can't.

16 Q In any event, 6 percent of those donations go to R.T.C.?

17 A Correct.

18 Q And isn't it also true that 90 percent of that money is

19 paid out where does it go, the archive center, what's that

20 the name of that organization?

21 A It's called the Church of Spiritual Technology.

22 Q The 10 percent remains and deals with all R.T.C. expenses

23 including legal?

24 A That's correct.

25 Q You say in terms of the overall fabric of the church

103

1 income, this was basically it. Doesn't the church have

2 substantial income from an endowment?

3 A Which are you referring to?

4 Q Any of the Scientology organizations.

5 A I know of no endowment.

6 Q You know of no endowment anywhere?

7 A No.

8 Q Now, as far as the contracts that you have, parishioners

9 sign for confidentiality?

10 A Yes.

11 Q Those apply to both confidential and nonconfidential

12 information; do they not?

13 A I believe there is a clause in there that protects

14 nonconfidential information which is not publicly disclosed,

15 yes.

16 Q It prevents disclosure of that information to people

17 opposed to Scientology?

18 A I believe the word is hostile, yes.

19 Q Your position, both of those clauses lie in perpetuity

20 even after someone leaves the church and even if they obtain

21 information totally independent of that relationship?

22 A Well, I believe that the person who entered into that

23 could answer that yes or no. I'm sorry. You will have to

24 repeat.

25 Q It is your position that those provisions lie in

104

1 perpetuity as to both confidential and nonconfidential

2 information even after the person leaves the church and even

3 if he obtains the information independent of that

4 relationship, true or false?

5 A That's true.

6 Q Just for clarification the NOTS are the rewrite of O.T. V?

7 A That's not correct, sir.

8 Q IV?

9 A No, it's not a rewrite of O.T. V.

10 Q It's something that replaces and has now become O.T. V?

11 A It was a new discovery by Mr. Hubbard which replaced

12 O.T. V.

13 Q You testified I think that in the thefts in the UK and

14 Copenhagen what were taken were levels of O.T. I through IV

15 and the NOTS material; isn't that right?

16 A I believe I said I think out of UK was I, II, and III and

17 then NOTS material from Copenhagen, in other words, also O.T.

18 III materials in Copenhagen and a pack which was called the

19 Class Eight Auditor's Pack which was also stolen.

20 Q But not O.T. VI and VII?

21 A Maintained within the Class Eight Pack is I believe IV, V,

22 VI, and VII.

23 Q It's your position that as far as you know those are the

24 only thefts or breach of security that have taken place where

25 materials have been taken from the church?

105

1 A It's the only instances of operated theft that I know of,

2 yes.

3 Q How about the other misappropriation or missing documents

4 from the church, were there any other occasions prior to that

5 1983 occasion?

6 A I know of no other missing materials. There have been

7 other misappropriation.

8 Q Before 1983?

9 A I believe so.

10 Q Tell us about those.

11 A Well, like I tried to explain before in deposition with

12 you, there were newspapers articles, publications that came

13 out before 1983 that contained bits of snippets of the

14 materials usually taken by what appears to be from people's

15 memories. If someone had decided to leave the church,

16 breached his confidentiality agreement and talked to a

17 reporter about what his experiences were or what he believed

18 was in the O.T. levels, that might have occurred.

19 Q That's not an indication to you that the materials were

20 actually given to somebody, repeating something from memory?

21 A That's correct.

22 Q You know of no other information of any kind that the

23 church had that any materials were gone or missing prior to

24 the 1983 theft; is that your testimony?

25 A Yes, sir, to the best of my recollection, that's true.

106

1 Q Is it your view that I assume it's your view from what

2 you have said that a parishioner needs to get the whole of a

3 given O.T. level to get the whole benefit from it?

4 A Yes.

5 Q It's the previous answer, is it not, of the faith that one

6 should get the entire package, the entire O.T. series, if

7 possible, if he can, he or she can get through it; isn't that

8 right?

9 A We want everyone to go through all of the levels, yes.

10 Q Now, you have described that these are based upon

11 Mr. Hubbard's research and recall of events in the past which

12 continue to cause us trauma today, if you will forgive another

13 bad paraphrase, is that the gist of it?

14 A I believe I testified that they were his discoveries, yes.

15 Q The O.T. levels, at least one portion of them, contains a

16 recitation of Mr. Hubbard's discoveries in that respect?

17 A Yes.

18 Q These are discoveries largely of his memory of what

19 occurred 75 million years ago and before and after those kinds

20 of time periods; isn't that

21 A I don't know if memory is the correct word or not. There

22 are things that he discovered, reasons for our spiritual

23 decline.

24 Q Did he discover them through research other than

25 consulting his memory?

107

1 A I don't know, sir.

2 Q In any event, it was researched and what we are talking

3 about is a recount of history, are we not?

4 A I am not sure if you can put it in that way. All I can

5 tell you, it was his discovery of events that occurred many,

6 many years ago.

7 Q It's believed that those events did in fact occur by

8 parishioners of the Church of Scientology?

9 A Yes.

10 Q It's not a science fiction story, it's a something that is

11 accepted as fact; isn't that true?

12 A That's true.

13 Q Other parts of the O.T.s contain essentially

14 methodological material on how to get rid of the things that

15 cause these traumas to persist in our spirits; isn't that

16 right?

17 A I am not sure of your definition of that, sir. They

18 contain formulas I hate to use the word scientific the

19 scientific formula as to what a person needs to do to reverse

20 what has happened to him.

21 Q Isn't it a process of asking one's self questions or

22 having the auditor ask questions and observing the response of

23 the lie detector that he or she is hooked up to? Emeter.

24 A We use an Emeter which is a religious device which is

25 used to

108

1 Q Is it based upon the same principles as the polygraph?

2 A No, it's not.

3 Q But the device, that has a needle on it?

4 A There is a needle on the device to register emotional

5 trauma, yes.

6 Q What else is included, what other types of materials are

7 included in these O.T.s?

8 A Well, as I explained, there are recitations of

9 Mr. Hubbard's discoveries. They describe what occurred to an

10 individual, they describe how the traps, so to speak, was

11 formed and how the degradation of the spiritual being has

12 progressed over the years and describes a process and how you

13 reverse that. It is all done, as I said, in gradient steps.

14 Q You never intend to publish these materials; is that

15 right?

16 A That's correct, sir.

17 Q Now, in November of 1985 there was pending in Los Angeles

18 Superior Court a lawsuit by Mr. Wollersheim against the Church

19 of Scientology for fraud and outrageous conduct, intentional

20 infliction of emotional distress; is that right?

21 A There was a lawsuit, yes.

22 Q He was claiming significant personal injuries from the

23 church?

24 A I don't remember exactly what the claims were.

25 Q It resulted in a verdict in favor of Mr. Wollersheim, did

109

1 it not?

2 A Yes.

3 Q On November 5, 19

4 A Yes, it did.

5 Q On November 5, 1984 portions of the O.T.s were made part

6 of the court file and that file was available to the public,

7 was it not?

8 A There was a very brief point in time when the judge

9 unsealed, I believe, the file.

10 Q At that time the Los Angeles Times obtained some or all of

11 that material, did they not?

12 A I don't believe so. That's what they claim. I don't

13 believe it's true.

14 Q You know they obtained some of it?

15 A They claim that, sir.

16 Q They claimed they obtained some?

17 A Yes.

18 Q You saw some articles published after that that referred

19 to those materials?

20 A I believe there was like a paragraph or two that referred

21 to O.T. III.

22 Q And a number of people in connection with this case also

23 had possession of these documents, did they not?

24 A In connection with Mr. Wollersheim's case?

25 Q Yes.

110

1 A I don't know that, sir.

2 Q You knew that Mr. Wollersheim had them?

3 A I think they came into the case. I am not sure if he

4 provided the documents or someone else did. I don't know.

5 Q Now, we have talked about the Fishman affidavit?

6 A Yes, sir.

7 Q That was filed by Mr. Fishman with the O.T. exhibits as

8 Exhibit G in support of his claim that he had been brainwashed

9 by Scientology, was it not?

10 A That was his claim. It was hard to believe since he never

11 took those levels.

12 Q It was filed in April of 1993?

13 A I believe that's correct.

14 Q And after the case was sent back to Los Angeles Superior

15 Court a request was made from the judge to keep that under

16 seal and the judge denied that; is that right?

17 A I believe the request went to the magistrate and she

18 issued some form of protective order for all discovery which

19 was in place until the case was dismissed, from my

20 understanding.

21 Q This is the FishmanGeertz

22 A Yes, sir.

23 Q Isn't it a fact that the R.T.C. and the church asked the

24 Central District of California to seal the Fishman affidavit

25 and the court declined to do that?

111

1 A Yes, sir, it's true. That was after the case was

2 dismissed.

3 Q You described that case going to the Ninth Circuit. Could

4 I ask you to take a look at Exhibit M.

5 A I have it, sir.

6 Q Is that the unpublished opinion of the Ninth Circuit in

7 that case?

8 A It appears to be, yes.

9 Q Now, that appeal has a 94 number on it, does it not?

10 A It said August 2, 1994, argued, submitted, Pasadena,

11 California.

12 Q Isn't it true that that Fishman affidavit remained as part

13 of the open public file in the Los Angeles Superior Court

14 until August 1995?

15 A That's true.

16 Q It's true that reporters for The Washington Post obtained

17 a copy of that?

18 A That's what they say, yes.

19 Q They published an article dated August 19, which will be

20 offered later, that detailed some of the materials in that

21 affidavit?

22 A I believe there was about two or three sentences that they

23 quoted from it.

24 Q And that affidavit had been on file and a part of the

25 public record in the Central District of California for that

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1 time, is what you are complaining about in terms of what my

2 clients had in their possession with the exception of a couple

3 of additional pages?

4 What you are claiming about as far as what my clients

5 possess in this case is O.T. materials attached to the Fishman

6 affidavit plus some additional pages from O.T. materials?

7 A As the Complaint is currently structured, yes, that's

8 true.

9 Q The fact that most of the materials in issue in this case

10 were a part of the public file in the Central District of

11 California wasn't disclosed in your moving papers in this case

12 when you sought a writ, was it?

13 A I don't know, sir. I would have to see the writ.

14 Q Would you be startled if you found that it was not in

15 there?

16 A No.

17 Q You don't know how Mr. Wollersheim came into possession of

18 the FishmanGeertz affidavit, do you?

19 A I believe he testified he got them from Graham Berry.

20 Q Do you know from personal knowledge?

21 A No, sir, I don't.

22 Q Now, on the raid of Mr. Erlich's premises in the Bay area

23 that occurred in February, in the Northern District of

24 California case, you found that FishmanGeertz materials

25 there, too, did you not?

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1 A Not that I recall.

2 Q Did you find any O.T. material at all at Mr. Erlich's

3 premises?

4 A Yes, sir, I did.

5 Q Were they materials other than what was in the Fishman

6 Geertz affidavit?

7 A Much more.

8 Q Do you have any idea where he got those?

9 A No, I do not.

10 Q Those included materials that weren't found in the

11 defendants' premises in this case, didn't they?

12 A I'm sorry. I didn't get

13 Q The materials that you found at the Erlich premises

14 included materials you did not find at the defendants'

15 premises in this case?

16 A The majority were the same. There were NOTS materials

17 that were found there. We found them in Wollersheim's place

18 basically. There were some other O.T. materials.

19 Q You told me that you found much more than what was in the

20 FishmanGeertz affidavit in the way of O.T. materials, didn't

21 you.

22 A That's true.

23 Q You didn't find much more than what's in the

24 FishmanGeertz affidavit in the way of O.T. materials at my

25 clients' house, did you?

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1 A We did. There were NOTS materials that were found which

2 were substantial.

3 Q The NOTS materials are not in issue in this case, are

4 they?

5 A No, at the present time, no, sir.

6 Q Did you find anything at the Erlich premises that you

7 didn't find at my clients' house?

8 A I would have to see how many pages of issues that were

9 there.

10 Q Mr. Erlich testified he got these materials off the

11 Internet, did he not?

12 A That's what he claims.

13 Q You have talked about the fact that a number of newspaper

14 articles have contained these materials, at least references

15 to them, quotes from them?

16 A Yes.

17 Q You say you have seen the same thing on the Internet. Is

18 it your testimony that you have never seen quotes or entire

19 portions of O.T. material on the Internet?

20 A I didn't say that, no, sir.

21 Q Now, you said your big concern about publication of these

22 materials is that it tends to ridicule the church; is that

23 right?

24 A That's one of the concerns, yes.

25 Q Because you feel that they are quoted out of context and

115

1 makes the church look weird?

2 A Yes, I think to the initial the uneducated person

3 seeing that for the first time may think it's strange.

4 Q You have taken the position publicly that the media

5 coverage distorts takes out of context the church's

6 teachings and makes it look weird, have you not?

7 A Something to that effect.

8 Q The reason is you feel that if the church is made to look

9 weird, you might lose parishioners before you have a chance to

10 condition them spiritually?

11 A That's not the only reason.

12 Q One of the reasons?

13 A One of the reasons, and the fact that the preexposure to

14 individuals is very much of concern to us.

15 Q You think that's spiritually harmful?

16 A Absolutely.

17 Q Can it be psychologically harmful?

18 A I don't know that.

19 Q Can it result in physical manifestations?

20 A I don't know, sir.

21 Q Does it ever cause someone to commit suicide?

22 A No.

23 Q Do you feel that someone reading, for example, the

24 coverage that's contained in the Washington Post of August 19

25 might dissuade someone from becoming a Scientology

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1 parishioner?

2 A That's possible, yes.

3 Q Whereas if they are spiritually conditioned to the

4 teachings concerning Xemu and the volcanoes, they are not

5 going to be dissuaded?

6 A They need the works written by Mr. Hubbard in the sequence

7 that he wrote them. They will understand it.

8 Q You have expressed some concern about economic harm, and

9 it was the fact that perhaps some of these people might be

10 disuaded because the cases are taken out of con