FILED NOV 2 2

JAMES R. MANSPEAKER

clk

IN TME UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLORADO

Civil Action No. 95-K-2143

RELIGIOUS TECHNOLOGY CENTER, a California non-profit corp.
and BRIDGE PUBLICATIONS, INC., a California non-profi= corporation,

Plaintiffs,

V.

F.A.C.T.NET, INC., a Colorado corporation; LAWRENCE WOLLERSHEIM, an individual; and ROBERT PENNY, an individual,

Defendants.

MEMORANDUM OPINION AND ORDER ON PENDING MOTIONS

KANE, J,

Religious Technology Center ("RTC") and Bridge Publications,
Inc. sue Lawrence Wollersheim, Robert Penny and F.A.C.T.NET, Inc.
for injunctive relief and damages for copyright infringement (17
U.S.C. § 501) and trade secrets misappropriation (Colo. Rev. star.
7-74-102 (1986)) .

Jurisdiction is based on 28 U.S.C. § 1331 and 1338(a) and (b)
over the copyright infringement claim and supplemental Jurisdlction
under 28 U.S.C. § 1367 over the trade secrets misappropriation
claim, which Plaintiffs allege arises out of the same transaction
and occurrences.

Pending are Defendants' Motion to Admit Graham E. Berry to
Practice Pro Hac Vice, Motion for Protective Order Prohibiting
Deposition and Document Discovery of Graham E. Berry Esq. and
Motion to Admit Daniel A. Leipold to Practice Pro Hac vice. I
grant all three motions.

I. Procedural Status.

On August 22, 1996, I granted the motions for leave to
withdraw as counsel of record filed by Defendants' then counsel in
this case, Faegre & Benson and Reiman & Associates, P.C. I ordered
that F.A.C.T.Net must have new counsel enter an appearance by
September 23, 1996, or be subject to being held in default and
having a default judgment enter. I gave all three Defendants until
January 6, 1997 to respond to the pending summary judgment motion
filed by Plaintiffs.

On September 23, 1996, Clifford L. Beem, of the law firm of
Beem & Mann, P.C. in Denver, Colorado, entered his appearance as
co-counsel for the Defendants, F.A,C.T.Net, Inc. and Lawrence
Wollersheim in this matter.:

On September 27, 1996, Beem filed a Motion to Admit Graham E.
Berry to Practice Pro Hac Vice for the purposes of representing the
corporate Defendant F.A.C.T.Net, Inc. in this case.

On September 27, 1996, Plaintiffs' Opposition to Pro Hac Vice
Application of Graham Berry and Musick, Peeler, & Garrett was
filed. Defendants Wollersheim and F.A.C.T.Net filed a response to
the opposition. Thereafter, I permitted both sides to file various
supplemental documents relating to the issues of Berry's admission
pro hac vice.

No appearance has been entered on behalf of Defendant
Robert Penny. I suggested in court on August 22, 1996 that because
of Penny's serious illness, multiple sclerosis, the parties should
attempt to extricate him from this suit and the related suit of
F.A.C.T.Net. Inc .... et al. v. Coregis Insurance Co., .Civil Action
No. 96-K-166.

On October 9, 1996, F.A,C.T.Net filed a Motion for Protective
Order Prohibiting Deposition and Document Discovery of Graham E.
Berry, Esq. On October 11, 1996, I granted this motion pro tempore
until Berry's request to practice pro hac vice is granted or
denied. On October 18, 1996, plaintiffs filed an opposion to the
motion for a protective order.

On October 10, 1996, Defendants F.A.C.T.Net and Wollersheim
filed a Motion to Admit Daniel A. Leipold to Practice Pro Hac Vice
for the purposes of representing Wollersheim in this case. On
October 18, 1996, Plaintiffs' Objections to Motion of Daniel A.
Leipold to Appear Pro Bac Vice was filed. F.A.C.T.Net and
Wollersheim responded to the objections on November 8, 1996. On
November 18, 1996, Plaintiffs filed a reply.

II. Analysis of Pending Motions.
A. Motion to Admit Graham E. Berry to_Practice Pro Hac Vice.
Plaintiffs, in their Opposition to Pro Hac Vice Application
of Graham Berry and Musick, Peeler, & Garrett, argue the Musick,
Peeler firm and Berry should be disqualified because (1) Berry was
a central figure in the events that lead to this suit, and is
therefore a material witness as to contested issues where his
credibility will be a significant factor; (2) Berry and the Musick,
Peeler firm both previously represented a former counsel of RTC in
actions against RTC, during the course of which representation both
Berry and the Musick, Peeler firm necessarily were exposed to
confidences RTC exposed to its former counsel on matters
substantially related to the instant lawsuit; and (3) there is a
conflict of interest created by the fact that another Musick,
Peeler partner was a member of a law firm where dozens of attorneys
and paralegals represented plaintiffs and other Church of
scientology entities in a wide variety of matters, and participated
in briefings on Plaintiffs' legal affairs, including intellectual
property matters.

Plaintiffs assert each of these grounds requires
disqualificaion under the Colorado Rules of Professional Conduct,
which set the standard for attorneys practicing before this court.
See D.C.Colo.LR S3,6. Rule 3.7 of the Colorado Rules of
Professional Conduct provides:

(a) A lawyer shall not act as an advocate at a trial in
which the lawyer is likely to be a necessary witness
except where:

(1) the testimony relates to an uncontested issue;

(2) the testimony relates to 5he nature and value of
legal services rendered in the case; or

(3) disqualification of the lawyer would work substantial
hardship on the client.Colo. R. Prof. Conduct 3.7

    (a). Plaintiffs argue none of the exceptions applies here.

In response, Defendants deny that Berry is a "necessary
witness," asserting any information he may have is privileged,
irrelevant or obtainable elsewhere. They maintain disqualification
of Berry would cause F.A.C.T.Net substantial hardship and that
F.A.C.T.Net has waived any conflict of interest that may arise from
testimony by Berry. Defendants argue Berry's representation of
Plaintiffs' former counsel does not disqualify him from again
opposing Plaintiffs here. Finally, with regard to the Musick,
Peeler partner, Willie Barnes, Defendants state there is no

4

substantial relationship between the present matter and the work
done by Barnes at his previous firm. They further contend Barnes
received no actual material confidential information and Musick,
Peeler has in place specific institutional measures to screen him
from the present litigation.

I. Berrv as a Material Witness.

Plaintiffs' opposition to the motion to admit Berry to
practice pro hac vice amounts to a motion to disquallfy Berry and
the Musick, Peeler firm from representing Plaintiff F.A.C.T.Net in
this lawsuit. see Ouark. Inc. v, Power Up Software Corp., 812 F.
Supp. 178, 179 (D. Colo. !992). "A motion to disqualify rests
within the sound discretion of the trial court."

Plaintiffs first seek to disqualify Berry and his new firm on
the basis that Berry is a "necessary witness" under Rule 3.7 of the
Colorado Rules of professional Conduct and therefore should not act
as an advocate for Defendants at trial.

Plaintiffs have-the burden to establish the grounds for
disqualification. See World Youth Day. Inc. v. Famous Artists
Merchandising Exchange, 866 F. Supp. 1297, 1299 (D. Colo. 1994).

When ruling on a motion for disqualification of counsel, one must
make specific findings and conclusions. Id. However, the use of
these factual findings is restricted to the decision on this motion
and the parties are not bound by the factual findings for any other
purpose in the course of this litigation. Id.2

2: Neither party has requested an evidentiary hearing
concerning the motion for admission pro hac vice. In Fullmer v..
Harper, the Tenth Circuit held where a
"The rules of professional conduct, as adopted by the Colorado
Supreme Court, are adopted as the standards of professional
responsibility applicable in this court." D.C.Colo.LR 83.6.
verified motion to disqualify raises ethical questions
that are conceivably of a serious nature . . the
trial court should . hold a full evidentiary hearing
on the issues posed by the motion to disqaulify and the
response thereto, which hearing should include the taking
of testimony. A motion of this type should not be
resolved on the basis of mere colloquy between court and

counsel. At the conclusion of such hearing the trial

court should then make specific findings and conclusions

4

517 F.2d 20, 21 (10th Cir. 1975).

Some district courts have followed this ruling as mandating an

evidentiary hearing. See. e.g., Geralnes B.V. v. City of Greenwood

Village, 609 F. Supp. 191, 192 (D. Colo. 1985) (Kens J,);

Greenebaum-Mountain Mortgage Co. v..Pioneer.Nat Title Ins. Co.,

421F, Supp. 1348, 1349 (D. Colo. 1976). Others have not.

e.g., Beck V. Board of the Regents of.Kansas, 568 F, Supp. 1107,

1113 {D. Kan 1983) (noting that Harper mandated the district courts

to make findings of fact and conclusion of law in rulin9 on motions

to disqualify opposing counsel, but declining to hear oral argument

and making no mention of the evidentiary hearing requirement).

Notably in the recent case of World Youth Day. Inc. v. Famous

Artists Merchandising Exchange. Inc, 866 F. Supp, 1297 (D. Colo,

1994), extensively cicted by both sides, the court heard oral

argument on the motion to disqualify, but made no mention of an

evidentiary hearing.

I find no authority mandating an evidentiary hearing

concerning an opposed motion for admission pro hac vice. Neither

patay has requested an evidentiary hearing nor oral argument.

Plaintiffs do not frame their opposition as a "motion to

disqualify," although their arguments amount to such, Even if

granting of the pro hac vice motion effectively amounts to the

denial of a motion to disqualify, such denial is not appealable as

a final order under 28 U.S.C. § 1291. See Firestone Tire & Rubber

Co. v. Risjord, 449 U.S. 368, 379 (1981) .

In Taylor v. Growth, 900 P.2d 60, 64 (Colo. 1995) (en bent),

cert, denied, 116 S. Ct. 916 (1996), the court found neither Rule

3.7 nor the accompanying committee comment mandate a hearing where

there is a possibility of conflict oŁ intersst on the part of an

attorney called as a witness.

In the circumstances, I find an evidentiary hearing is not

required.

6

Effective January 1, 1993, the Colorado Supreme Court has adopted

the Colorado Rules of Professional Conduct.

Plaintiffs' opposition to the motion to admit Berry pro hac

vice rests upon Colorado Rule of professional Conduct 3.7 which

reads pertinently: "A lawyer shall not act as an advocate at a

trial in which the lawyer is likely to be a necessary witness

n3

A party seeking disqualification of an attorney as "likely to

be a necessary witness," must show that "the advocate's testimony

[is] necessary, and not merely cumulative , " Colorado Bar

Association 'Ethics Committee' Opinion, Formal Opinion No. 78:

Disqualification of the Advocatet/Witness, 23 Colorado Lawyer 2087,

2088-89 (Sept, 1994). "The court may delay ruling on a motion to

The Comment to Rule 3.7 states its rationale:

Combining the roles of advocate and witness can

involve a conflict of interest between the lawyer and

client and can prejudice the opposing party. If a lawyer

is both counsel and witness, the lawyer becomes more

easily impeachable for interest and thus may be a less

effective witness, Conversely, the opposing counsel may

be handicapped in challenging the credibility of the

lawyer when the lawyer also appears as an advocate in the

case. An advocate who becomes a witness is in the

unseemly and ineffective position of arguing his or her

own credibility.

The opposing party has proper objection where the

combination of roles may prejudice that party's rights in

the litigation. A witness is required to testify on the

basis of personal knowledge, while an advocate is

expected to explain and comment on evidence given by

others. It may not be clear whether a statement by an

advocate-witness should be taken as proof or as an

analysis of the proof,

Colo. R. Prof. Conduct 3.7, Comment [i], [2] .

disqualify until it can determine whether another witness can

testify." id. "A lawyer is a 'necessary' witness if his or her

testimony is relevant, material and unobtainable elsewhere." World

Youth Day. Incc., 866 F. Supp. at 1302.

In considering a motion ior disqualification of counsel,

a balancing is required between the interests of the

client and those of the opposing party. Whether the

opposing party is likely to suffer prejudice depends on

the nature of the case, the importance and probable tenor

of the lawyer's testimony, and the probability that the

lawyer's testimony will conflict with that of other

witnesses. Even if there is a risk of such prejudice, in

determining whether the lawyer should be disqualified due

regard must be given to the effect of disqualification on

the lawyer's client. It is relevant that one or both

parties could reasonably foresee that the lawyer would

probably be a witness.

Colo. R. Prof. Conduct 3.7, Comment [4].

"The financial burden on the client of replacing the attorney,

if combined with other circumstances, may be sufficient to create

an exception [to disqualification.]" CBA Ethics Committee Opinion

No. 78 at 2089-90.

For the reasons stated below, I find Plaintiffs have not met

their burden of proof to establish Berry is a "necessary witness."

I also find disqualification of Berry would work substantial

hardship on F.A.C.T.Net.

Plaintiffs contend Berry was a central figure in the events

that lead to this suit, and is therefore a material witness as to

contested issues where his credibility will be a significant

factor. They assert the posting to the Internet of RTC's Advanced

Technology materials which triggered this lawsuit was made by

F.A.C.T.Net director Arnaldo Lerma who was separately sued by RTC

8

in the Eastern District of Virginia. The posting was of certain

"OT II" and "0T III" works which were attached to a document

referred to as the "Fishman Declaration."

Plaintiffs assert Berry is inextricably linked with the events

surrounding the Fishan declaration which appeared as a filing in

the lawsuit entitled Church of scientology International v. Fishman

and. Geertz in the Central District of California. Geertz was

represented by the law firm of Lewis, D'Amato, Bribois & Bisgaard

("Lewis, D'Amato") and Berry was the partner in the firm who

handled the case. According to Plaintiffs, the Fishman

Declaration, including the OT II and OT III exhibits, was filed by

Berry in support of a motion for reconsideration of an order

changing venue.

In this case, Plaintiffs assert, Defendants have argued

Berry's placement oŁ the Fishman Declaration and attachments in the

court file has justified their posting of RTC's copyrighted and

trade secret materials. Lerma testified he obtained a copy of the

documents from Wollersheim who has testified that he received his

copy from Berry's former law firm Lewis, D'Amato, while serving as

an expert witness for Berry. Plaintiffs state Wollersheim argues

the passage of the documents from Berry to him legitimizes

Defendants' possession of them although RTC claims the documents

were stolen aan misappropriated.

It is Plaintiffs' position that the Colorado Uniform Trade

Secrets Act places in issue the circumstances under which a

defendant acquired the trade secret materials and the knowledge of

9

the person furnishing them. See Colo. Rev. Stat. § 7-74-102

(1986). Plaintiffs state Berry is a material witness regarding the

chain of custody of the documents at issue. They state he was

identified as a material witness in this case in December 1995 in

their initial disclosures as someone "likely to have discoverable

information relevant to disputed facts alleged with particularity

in the pleadings."

According to Plaintiffs, Berry's anticipated testimony relates

to his personal knowledge regarding the OT II and OT III materials,

his filing of the Fishman Declaration and attachments in the

Fishman court file, his passage of the declaration to Wollersheim,

Wollersheim's participation with him in the Fishman case, and any

participation by Berry or Wollersheim in the execution of the

release.

Plaintiffs maintain because they are raising disqualification

within hours of the notice of pro hac vice application, when Berry

and Musick, Peeler are coming in as new counsel, there is no

hardship on Defendants who have already engaged other counsel to

represent them and will not be left unrepresented.

In response, Defendants state Berry is not a "necessary

witness" under Rule 3.7(a) because his expected trial testimony is

not "relevant, material and unobtainable elsewhere." World Youth

Day. Inc., 866 F. Supp. at 1302. They address the areas in which

Plaintiffs assert Berry will be a necessary witness.

Defendants' position is Betty's personal knowledge of the OT

IX and OT III works is irrelevant and immaterial to the present

10

matter and Plaintiffs' desire for information in this subject area

falls short of making Berry a necessary witness. They assert Berry

is not on trial and has been specifically released from all

possible liability relating to the Fishman case by Paragraph 6 of

the "Agreement and Mutual General Release" entered into between the

Church of Scientology and Betty's former law firm, Lewis, D'Amato.

Defendants further respond Betty's knowledge of the filing of

the Fishman Declaration in the Fishman court file is also

irrelevant. They state the parties agree Defendants in the instant

case received official court-stamped copies of the declaration and

attachments. Berry denies that he personally filed the documents

and thus, even if relevant, Berry's actual knowledge of the filing

is cumulative and hearsay. Any other information Berry may have

relating to the Fishman declaration, Defendants argue, is

privileged pursuant to the attorney client privilege, the attorney

work-product doctrine and/or the joint defense privilege.

Likewise, Defendants argue, any receipt by Berry of the OT II

and OT III works is irrelevant and immaterial to the present

proceedings; any information regarding the Lewis, D'Amato firm's

receipt of such documents is similarly privileged; and the

informetlon at issue is obtainable from other sources including the

Lewis, D'Amato's clerical staff and other attorneys who worked more

closely with the documents than did Berry.

Defendants make similar arguments of privilege, and

additionally, the expert consultant privilege contained in Federal

Rule of Civil Procedure 26{b) (4) (B), concerning any knowledge Berry

11

might have of the passage of the Fishman Declaration to Wollersheim

as a non-testifying expert consultant for Lewis, D'Amato in the

Fishman matter.4 They maintain, since wollersheim has admitted he

received the Fishman Declaration and attachments from Lewis,

D'Amato while serving as an expert consultant, a restatement of

this information by Berry would be merely cumulative.

The same arguments are made concerning wollersheim's

participation with Berry in the Fishman case. According to

Defendants, the only relevant information from Wollersheim's

participation is that F.A.C.T.Net and Wollersheim received a copy

of the Fishman Declaration from-Lewis D'Amato in connection with

Wollersheim's services as an expert consultantt. As the parties

agree Wollersheim has already testified to that, Defendants

maintain it is not contested and Berry's knowledge of the subject

is irrelevant.

with reference to Betty's being a material witness regarding

4 A party may, through interrogatories or by

deposition, discover facts known or opinions held by an

expert who has been regained or specially employed by

another party in anticipation of litigation or

preparation for trial and who is not expected to be

called as a witness at trial, only as provided in Rule

35(b) or upon a showing of exceptional circumstances

under which it is impracticable for the party seeking

discovery to obtain other facts or opinions on the same

subject by other means.

Fed. R. civ. P. 26(b) (4) (B).

It is Defendants' position that the Church of Scientology did

not depose Wollersheim in connection with his expert declaration

in the Fishman/Geertz case as envisaged by the rule and thus, the

communications, documents and information that passed between Berry

and Wollersheim remain privileged under the rule, as well as under

the attorney-client privilege and Berry's attorney work-product

privilege.

12

"any participation by Berry or Wolliersheim in the execution of the

[Lewis, D'Amato/Church of Scientology,]* release, Defendants state

Plaintiffs are aware Berry was out of the country during the

creation of the settlement agreement and had no first hand

knowledge of its negotiation or execution. Therefore, they argue,

the parties who were involved in creating this agreement could

testify on the subject with far more knowledge than Berry.

Similarly, as regards the funding and set-up of F.A.C.T.Net, Berry

states he was not involved and thus has no percipient knowledge.

In his second declaration attached to Defendants' response,

Berry states it is too early in this litigation to determine

whether he could be a material witness and, in the unlikely event

that he were, he would step aside as trial counsel, if indeed he

acts as F.A.C.T.Net trial counsel, a matter not settled at this

time

In addition Defendants argue disqualification of Berry would

work substantial hardship on F.A.C.T.Net as contemplated in the

Colorado Rule 3.7(a)(3). They assert Plaintiffs have a reputation

for engaging in extreme litigation and extra-litigation tactics

which has resulted in less than a handful of attorneys in the

nation being willing to litigate against the Church of Scientology

organization, of whom Berry is one of the two most experienced and

successful.5 The other attorney declines to be involved in the

Defendants assert the Church of Scientology and its

related entities utilize their own language, dictionary, scriptures

and policy statements which take years of adversarial litigation to

discover, interpret and apply. With reference to Plaintiffs'

litigation tactics, Defendants cite a recent Ninth Circuit Court of

13

case unless Berry is also counsel of record. According to

Wollersheim's declaration, no other qualified law firm has been

willing to undertake to litigate against Plaintiffs.

Further, Wollersheim states F.A.C.T.Net has already spent a

large amount of money and a large portion of its remaining time

bringing the Musick, Peeler firm up to speed on the case for the

January 6, 1997 court deadline for summary judgment opposition, has

shipped almost two hundred banker boxes of records to the firm and

has already spent approximately $I.4 million attempting to litigate

against Plaintiffs with a law firm which had not previously

litigated against them.

Defendants consider Berry to be the most willing and qualified

attorney to represent F.A.C.T.Net in this case and assert his loss

would "work substantial hardship" on F.A.C.T.Net under Rule 3.7

which was intended to be "less prone to exploitation by opposing

parties and more compatible with each partĄ's interest in retaining

its counsel of choice." CRA Ethics Committee Opinion No. 78 at

Appeals ruling that the Church of Scientology organization had been

playing "fast and loose with the judicial system" and levied $2.9

million in sanctions against it for "destruction and concealment of

documents, refusal to comply with many court orders, needless

delay, and multiplication of the proceedings by [the Church of

Scientology] and [its] filings of frivolous motions and of

offensive and unreasonable motions" Religious Technology Center

v. Church of the New Civilization, No. 94-55781, slip op. at 13

(9th Cir. April I1, 1996). Specifically, with regard to the

church's tactics against Defendant Wollersheim, the California

Court of Appeal stated earlier this year: "When one party to a

lawsuit continuously and unsuccessfully uses the litigation process

to bluddgeon the opponent into submission, those actions must be

closely scrutinized for constututional implications."

Scientology of California v. Wollersheim, 42 Cal. App. 4th 628, 649

(Cal. App. 1996)

14

2089 (citing Canon Airways, Inc, v. Frankin Holdings Corp., 669 F.

Supp. 96, 100 (D. Del. 1987)).

Finally, Defendants assert F.A.C.T.Net has consented to

representation by Berry, an attorney who may be called as a witness

and that in these circumstances, waiver precludes disqualification

as long as a "disinterested lawyer" would conclude that the client

should agree to the representation under the circumstances. Id at

2088. Because, they argue, few attorneys would be willing and able

to stand up ~o the Church of Scientology's litigation tactics, a

"disinterested lawyer" would clearly have selected Berry as well.

In assessing whether Berry is a necessary witness, I consider

the two claims of Plaintiffs in this action, one for copyright

infringement and the other for misappropriation of trade secrets

under Colorado Revised Statute § 7-74-102 (1986).

To prevail in a copyright infringement action, a plaintiff

must prove (1) ownership of a valid copyright and (2) defendant

copied "protected components of the ccpyrighted material." Gates

Rubber CO. v. Bando Chemical Indus., Ltd,, 9 F.3d 823, 831 (10th

Cir. 1993). Plaintiffs have not established the relevance of

Berry's testimony to this claim, nor to the issue of Defendants'

"fair use" defense.

With regard to the trade secrets claim, the issue is whether

Defendants misappropriated Plaintiffs' alleged trade secrets by

using portions of the OT II and OTIII works without authorization.

In ruling on Plaintiffs' motion for a preliminary injunction, I

found the evidence showed the works to be widely known outside the

15

Church of ScienTology through multiple sources. See Religious

Technology v.F.A.C.T.Net, Inc., 901 F.Supp. 1519, 1527 (D. Colo.

1995). The court in Religious Technology Center v. Lerma, E.D. Va.

95-1107-A dismissed the trade secret count as to all defendants in

that case in which Lerma was sued arising out of the same posting

to the Internet of the Works which triggered this lawsuit. This

diminishes the likelihood that any testimony about the source of

the Fishman Declaration is relevant and material.

Wollersheim has already testified he received a copy of the

Fishman Declaration from Lewis, D'Amato in his capacity as non-

testifying consultant in the Fishman case. Berry's testimony in

this regard would be duplicative. The issues raised by the trade

secrets claim concern whether Defendants, rather than Berry,

misappropriated the alleged trade secrets. Moreover, Berry has

been released from all liability relating to the Fishman case by

the "Agreement and Mutual consent General Release" entered into

between the Church of Scientology and Lewis, D'Amato.

Plaintiffs have not established that Berry is a necessary

witness, as contemplated by Colorado Rule of Professional Conduct

3.7 with regard to either of Defendants' claims. compelling Berry

to testify with regard to the various topics on which Plaintiffs

claim his testimony is necessary would also invoke issues of the

attorney client privilege, attorney work-product doctrine, :he

joint defense privilege and the expert consultant privilege.

Moreover, in considering Plaintiffs' opposition to Betty's

representation, I must guard against the possibility that

16

Plaintiffs may seek to disqualify Berry in order to "secure a

tactical advantage in the proceedings." See Bartech Ind., Inc. v.

Int'l Baking Co.. Inc., 910 F. Supp. 388, 392 (E.D. Tenn. 1996).

The parties' litigation history and Berry's detailed declaration

with regard to the animosity of the Church of Scientology

organization toward him are qermane in this regard.

I am also persuaded that in light of all the relevant

circumstances, denying Berry's motion for admission pro hac vice,

alternatively disqualifying him from acting as counsel for

F.A.C.T.Net, would work substantial hardship on F.A.C.T.Net for the

reasons Defendants have argued.

2. Berry and the Musick, Peeler Firm's Previous

Representation of a Former Counsel of RTC.

Plaintiffs assert Berry and the Musick, Peeler firm both

previously represented a former counsel of RTC in actions against

RTC, during the course of which representation both Berry and the

Musick, Peeler firm necessarily were exposed to confidences RTC

shared with its former counsel on matters substantially related to

the instant lawsuit.

Here, Plaintiffs refer to Berry and Musick, Peeler's

representation of Joseph A. Yanny, a former attorney for RTC, in a

suit in which RTC sued Yanny for numerous causes oŁ action,

including breach of fiduciary duty, breach of contract, tortious

breach of the covenant of good faith and fair dealing, constructive

fraud, fraud, intentional interference with contract, civil

conspiracy and conversion.

Plaintiffs rely on Mull v. Celanese Corp., 513 F.2d 568 (2d

17

Cir. 1975). In Hull, the issue was "whether a law firm can take

on, as a client, a lawyer for The opposing party in the very

litigation against the opposing party," Id. at 569, The

court stated: "the novel factual situation here dictates a narrow

reading of this opinion." Id. at 572. It distinguished its

holding from the result reached in Myerhofer v, Empire Fire &

Marine Insurance Co., 497 F.2d 1190 (2d Cir.), cert. denied, 419

u,s, 998 (1974), where the court held disqualification was

unnecessary as the lawyer had acted properly in defending himself

against an accusation of wrongful conduct.

The facts here are more analogOUS to those in Myerholer.

There, an attorney, Goldberg, left his law firm after he had

objected to its handling of a client's securities offering.

Goldberg gave an affidavit to the Securities Exchange Commission

and three months later, upon being informed that he was to be

included as a defendant in an action against his former firm and

client, gave a copy of the affidavit to plaintiffs' counsel, the

Beanson firm, showing lack of complicity with the alleged

wrongdoing. Upon plaintiffs' motion to the court, Goldberg was

dropped as a defendant.

Defendants moved to disqualify the Bernson firm on the grounds

that they had received confidential information from defendants'

former lawyer, The appeals court held a "lawyer may reveal

confidences or secrets necessary to defend himself against 'an

accusation of wrongful conduct.'" Id. at 1194. It affirmed the

district court's order prohibiting Goldberg from representing the

18

interests of plaintiffs against his former client but found no

basis to disqualify the Bernson firm from representing plaintiffs

"in either this or similar actions." Id. at 1196.

Likewise here, Yanny would be prohibited from representing the

interests of any party against his former client, the Church of

Scientology organization. However, I see no basis for precluding

Berry or the Musick, Peeler firm from representing F.A.C.T.Net

based on the fact that they formerly represented Yanny in defending

him against charges made by the Church of Scientology.

Moreover, in suing Yanny as it did, Plaintiffs waived any

privilege with respect to any information relevant to the issues

raised by their claims and released Yanny from his obligation of

secrecy with respect to that information. See Carlson, Collins.

Gordon & Bo1d v. Banducci, 257 Cal. App. 2d 212, 228 (Cal. App.

1967) (holding "an attorney is released from those obligations of

secrecy which the law places upon him whenever the disclosure of a

communication, otherwise privileged, becomes necessary to the

protect~on of the attorney's own rights.") That principle of

California professional ' ' ~

responsibllity law is also applicable here

to Berry and Musick, Peeler's representation of Yanny.

The Tenth Circuit has set out requirements which a party

seeking to disqualify opposing counsel on the ground of a former

representation must establish:

(1) an actual attorney-client relationship existed

between the moving party and the opposing counsel;

(2) the present litigation involves a matter that is

"substantially related" to the subject of the movant's

prior representation; and

(3) the interests of the opposing counsel's present

19

client are materially adverse to the movant.

Cole v. Ruidoso Mun. Sch., 43 F.3d 1373, 1384 (10th Cir. 1994).

Here, there is no showing that the Plaintiffs were ever represented

by Berry or Musick, Peeler, thus one does not reach the issue of

whether the present litigation involves a matter "substantially

related" to that in a prior lawsuit.

I therefore find no basis for denying Berry's motion for

admission pro hac vice or disqualifying him or Musick, Peeler on

the grounds of their former representation of Yanny.

3. Musick. Peeler's Conflict of Interest

Paintiffs argue there is a conflict of interest created by

the fact that another Musick, Peeler partner, willie Barnes, was a

membcr of a law firm, Wyman, Bautzer, Kuchel & Silbert which

represented Church of Scientology entities in a wide variety of

matters, including intellectual property matters.

"A lawyer shall not knowingly represent a person in the same

or a substantially related matter in which a firm with which the

lawyer formerly was associated had previously represented a client

.... " Colo. R. Prof. Conduct 1.9(b). This Paragraph "operates

to disqualify the lawyer only when the lawyer involved has actual

knowledge of informatiom · .

. protected by Rules I 6 and 1,9(b) "

comment to Rule 1.9. "'Substantiality is present if the factual

contexts of the two representations are similar or related.'"

Quark, Inc., 812 F. Supp. at 179 (quoting Smith v, Whatcott, 757

F.2d 1098, llO0 {10th Cir. 1985)). In seeking to diequalify an

attorney, "[s]pecific facts must be alleged and 'counsel cannot be ..

20

disqualified on the basis of speculation or conjecture .... '"

Id. (quoting FDIC v. Sierra Resources. Iuc., 682 F. Supp. 1167,

117Q (D. Colo. 1987)).

Plaintiffs do not allege nor establish that the factual

context of any matter on which Barnes worked while at the wyman

firm was similar to that underlying the alleged copyright and trade

secret violations at the heart of this case. Nor do they allege

actual knowledge of Barnes of any confidential factual information

of relevance to the subject case.

Barnes has stated the only connection he had with Plaintiffs

was his involvement in "one minor consultation with another Wyman

attorney that generally related to the franchise investment law of

the State of California." (Resp. Pla.' Opp. Pro Hac Vice App,,

Barnes Decl. ~ 4.) He denies receiving any knowledge of any

confidential information Chat could be material to the present

case. (Id. ¶¶ 4-7.)

Plaintiffs have failed to make the basic showing That Barnes

was involved in matters substantially related to this suit while at

the Wyman firm. Therefore, the presumption does not arise that

Barnes was privy to confidential information relevant to this case,

nor that he shared such information with other members of Musick,

Peeler, thus disqualifying the entire firm. See Quark Inc., 812

F. Supp. at 179-80.

Moreover, the Tenth Circuit, rather that adopt a per se rule

of imputed knowledge that would require automatic disqualification

of the firm, has recognized an exception for those firms which have

adopted "pre-existing institutional mechanisms that effectively

screened the attorney from the current case." Hunter Douglas. Inc.

y. Home Fashions. Inc,, 8il F. Supp. 566, 570 (D. Colo. 1992}

(ceting Smith, 757 F.2d at 1100); see also Quark, inc., 812 F.

9upp. at 180.

I am satisfied that such measures were in place at Musick,

Peeler before it accepted the present case and that the firm's

"confidentiality wall" satisfies the factors for effectively

screening Barnes from financial interest and participation in the

instant case. See Smith, 757 F.2d at 1101; 0uark, Inc., 812 F.

Supp. at 180.

For all the aforesaid reasons, I grant the motion to admit

Berry to practice pro hac vice.

B. Motion for Protective Order Prhibiting Deposition

and Document Discovery of Graham_E.... Berry Esq.

On October 11, 1996, I granted F.A.C,T.Net's Motion for

Protective Order Prohibiting Deposition and Document Discovery of

Graham E. Berry, Esq. pro tempore until Berry's request to practice

pro hac vice was granted or denied. On October 18, 1996,

Plaintiffs filed an opposition to the motion for a protective

order.

I have granted Berry's request to practice pro hac vice. As

counsel for Defendant F.A.C.T.Net, Berry's deposition mhould only

be allowed if Plaintiffs have shown (1) no other means exist to

obtain the information other than to depose him; (2) the

information is relevant and non-privileged; and (3) the information

is crucial to the preparation of the case. See Shelton v. American

22

Motors. Corp., 805 F.2d !323, 1327 (8th Cir 1986]. For the

reasons stated above in relation to the motion for admission of

Berry pro hac vice, I find Plaintiffs have not made the necessary

showing to allow the taking of Berry's deposition.

With regard to the document request, Plaintiffs request Berry

to produce:

I. All documents which you gave to Lawrence

Wollersheim, Robert Penny, Arnaldo Lerma, or F.A.C.T.Net,

Inc. in connection with work performed for you in Church

of Scientology International v. Fishman, Case No. 91-6426

2. All documents concerning the Advanced

Technology.

(Mot. Protective Order, Ex. B, Subpoena in Civil Case, Ex. A at 3.)

As noted in Shelton:

The work-product doctrine not only protects from

discovery materials obtained or prepared in anticipation

of litigation, but also the attorney's mental

impressions, including thought processes, opinions,

conclusions and legal theories.

[W]here, as here, the deponent is opposing counsel and

opposing counsel has engaged in a process of selecting

and compiling documents in preparation for litigation,

the mere acknowledgment of the existence of those

documents would reveal couneel's mental impressions,

which are protected as work product.

Shelton, 805 F.2d at 1328-29.

With regard to the first request for documents given by Berry

to F.A.C.T.Net and its directors in connection with the expert

consulting performed for him in the Fishman case, production of the

documents would reveal more than their mere existence. They would

be reflective of Berry's "mental selective process." See id. at

1329. As such, the documents are protected as work product.

Moreover, the information and documents F.A.C.T.Net and its

23

directors received "in connection with work performed" in the

Fishman matter are privileged pursuant to Rule 26(4){B) concerning

disclosure by non-testifying expert consultants.

In addition, Betty's statement that these documents have not

been returned to him by Defendants is uncontradicted. The

documents are therefore obtainable by means other than subpoenaing

Berry. Finally, Berry states he has no percipient knowledge of the

actual delivery of the documents to Defendants and names several

persons who would be more appropriate sources of information in

this regard.

With regard to the second request for all documents concerning

the "Advanced Technology," since the Church of Scientology produced

these documents and has the original or copies, it is not essential

to Plaintiffs came that Berry produce them.

Accordingly, I grant the Motion for Protective Order

Prohibiting Deposition and Document Discovery of Graham E. Berry,

Esq. F.A.C.T.Net requests me to sanction Plaintiffs and award

Berry his expenses and fees incurred in the preparation of this

motion for a protective order because the deposition subpoena was

intended to harass him and is unduly burdensome. I deny this

request.

c. Motion to Admit Daniel A. Leipold to Practice Pro Hac

Plaintiffs object to the motion of Daniel Leipold to appear

pro hac vice for the purpose of representing Defendant Lawrence

Wollersheim. They contend he assumed custody of the litigation

files from church of Scientologv v. Fishman containing the Fishman '

24

Declaration on July 11, 1996 and that twenty days later Lerma made

his allegedly unlawful posting of the declaration and its

attachments leading to this action. Plaintiffs contend Leipold

like Berry is inextricably linked with the chain of custody of the

subject documents leading to the copyright and trade secrets

violations at issue.

It is Plaintiffs' position that Leipold is therefore a

"necessary witness" whose testimony is "relevant, material and

unobtainable elsewhere." See World Youth Day, Inc., 866 P. Supp.

at 1302. Accordingly, Plaintiffs maintain Leipold's

disqualification should be granted and his pro hac vice

application be denied under Colorado Rules of Professional Conduct,

Rule 3.7 which prchibitss an attorney from being an advocate for a

trial in which he is likely to be a necessary witness.

Defendants respond that Plaintiffs' contention that Leipold

cannot serve as counsel is meritless because Defendants in this

action have testified that they possessed the relevant documents

months before Leipold's brief possession of the documents.

Having reviewed the affidavits of Leipold and Wollersheim and

the deposition of Lerma, I find no merit in Plaintiffs' contention

that Leipold is linked with the chain of custody of the documents

at issue which lead to the alleged copyright and trade secrets

violations. Plaintiffs have not shown that Leipold is a necessary

witness in this regard. Accordingly I grant the Motion to Admit

Daniel A. Leipold to Practice Pro Hac Vice.

25

III. Conclusion.

I grant the Motion to Admit Graham E. Berry to Practice Pro

Hac vice, Motion for Protective Order Prohibititing Deposition and

Document Discovery of Graham E. Berry, Esq. and Motion to Admit

Daniel A. Leipold to Practice Pro Hmc Vice.

On August 22, 1996, I granted Defendants Wollersheim,

F.A.C.T.Net and Penny until January G, 1997 to respond to

Plaintiffs' pending motion for summary judgment and set a hearing

on the motion for February 7, 1997 at 8:00 a.m.

The opposition to the admission of Berry and Leipold as

counsel for Defendants F.A.C.T.Net and Wollersheim has resulted in

nearly a two month delay in Defendants' retention of their desired

counsel. I allow Defendants until February 6, 1997 to respond to

the summary judgment motion and continue the hearing on the motion

to March 17, 1997 at 9:00 a.m. Accordingly,

IT iS ORDERED THAT the Motion to Admit Graham E. Berry to

Practice Pro Hac Vice is GRANTED;

IT IS FURTHER ORDERED THAT the Motion for Protective Order

Prohibiting Deposition and Document Discovery of Graham E. Berry,

Esq. is GRANTED;

IT IS FURTHER ORDERED THAT the Motion to Admit Daniel A.

Leipold to Practice Pro Hac Vice is GRANTED;

26

IT IS FURTHER ORDERED THAT Defendants have up to and including
February 6, 1997 to respond to the pending summary judgment motion
and the hearing on the motion is continued to March 17, 1997 at 9:00 a.m.

Dated this 21 day of November, 1996 at Denver, Colorado.

U.S.. SENIOR DISTRICT COURT JUDGE

some commentary about scientology

"Knowing how to know" has immediate application in the field of astronomy. It
cuts out the need for powerful telescopes and manned or unmanned space-probes.
Instead, knowledge of the planets and possible life on planets can be known
directly. To date, planetary probes sent to Jupiter and Venus have all
malfunctioned, seemingly due to extreme heat and pressure, and so full and
accurate details of the nature of these planets and possible life on these
planets have eluded scientific search. But through the application of the
Scientology technique of "knowing how to know" these problems are avoided.

Firstly here is Ron commenting on Jupiter. The limited scientific wisdom about
this planet to date suggests that below its 600 mile atmosphere lies an
extremely hot core of liquid hydrogen and metallic hydrogen that is thousands
of miles deep and at the centre is a rocky core. And that the temperature at
the surface of the liquid hydrogen is tens of thousands of degrees Kelvin.
However, if true, this is seen not to be a problem to the likely inhabitants of
Jupiter, Eskimos.


And although I don't think you'd have very much pleasure out of kissing a girl
from Jupiter - that's a heavy-gravity planet, and if you stepped on the planet
Jupiter in one of these meat bodies that you presently have, you would become a
pancake promptly, you see? And what atmosphere it has lies in seas of liquid
air and so on. You might say that this is somewhat rigerous as an environment,
not completely similar to Russia but.. So you do get these various variations.
And it's not all that horrifying however.

You find somebody running around the planet Jupiter, he'd be built to withstand
that climatic condition, and the gravitic condition and so forth, and his legs
might be a bit modified and his arms and that sort of thing, but he would
probably look like an Eskimo.

--- "State of OT", SHSBC #296. 23 May 1963. (1:05)

The limited scientific knowledge of Venus that we have from various probes that
have landed on its surface is that the atmosphere of Venus is extremely hot and
dense and contains a great deal of sulphuric acid as a result of the huge
active volcanoes on its surface. Also that there is no water on the surface of
Venus because with the intense heat it has all boiled away. Fortunately Ron was
able to tell us about the mechanised transport that runs on the surface of
Venus, namely locomotive trains. If the surface of Venus is threatening to life
then it seems it is more likely due to the unguarded forms of transport on that
planet as Ron describes for us.

streaming | download [ files not available at this location any longer sorry ]
http://www.xs4all.nl/~xemu/rams/Venusloc.ram
http://www.xs4all.nl/~xemu/quotes/Venusloc.ra

Mary Sue gave the cue on this thing. She said, "Look at how hard they have to
work to keep you from being OT!" Hey, now, that's quite a thought! Isn't that
quite a thought?

Hm? Now you look at this. You look at this, now. The complete idiocy of it.
Somebody sits up on Venus -- there are probably some other stations around up
in the system. This one's on Venus. I notice that we all believe that Venus has
a methane atmosphere and is unlivable. I almost got run down by a freight
locomotive the other day -- didn't look very uncivilized to me. I'm allergic to
freight locomotives, they're always running into you.

--- "Between Lives Implants", SHSBC #317. 23 July 1963.