If the district court were correct in adopting McMurtry's theory as to why he was the O.H.O., in order to be consistent it would have to hold that McMurtry's death ended plaintiffs' claims to authority within the O.T.O. This argument was made to the court below in defendants' post-trial brief at page 28, CR 101. This is a legal question subject to de novo review.
Plaintiffs' claim was that there is something called a "de facto" O.H.O. whose power completely terminates with his death. RT 127-8. Plaintiffs argue further that McMurtry was such a de facto O.H.O. RT 28-9, 160-1, 285-6. Plaintiff McMurtry is now apparently dead. Under plaintiffs' theory therefore, which the district court presumably adopted, McMurtry's authority has completely terminated. Specifically, all the remaining plaintiffs have lost any official authority they might have had through McMurtry. RT 118,127-8. The district court's judgment ought to have been modified accordingly.
IV. THE TRIAL COURT DENIED DEFENDANT MOTTA'S RIGHTS AS AN O.T.O. MEMBER.
The trial court improperly denied Mr. Motta his rights as an O.T.O. member. As a member, he was entitled to be free from suit by other O.T.O. members (DX lA #25; RT 183-3, 644) and to access O.T.O. libraries. DX lA #46. As a IX° member he is co-owner of all O.T.O. property, including its libraries, copyrights and trademarks. DX lA #52, RT 234, 283, 735. The trial court denied him all these rights.
This involves a factual question as to whether Mr. Motta is an O.T.O. member and so is subject to a substantial evidence standard of review. Fed. R. Civ. P. 52(a).
The trial court made no specific findings about whether or not Mr. Motta is a member of the O.T.O. The Maine court specifically found that he was a member. Maine case, 598 F. Supp. 943. The evidence to that effect in this trial may be enumerated as follows.
1. Mr. Motta went to visit Mr. Germer at the end of 1956 e.v. or beginning of 1957. Mr. Germer initiated him then into the IX° of the O.T.O. and gave him the secret IX° paper, Emblems and Modes. RT 676-8, 691. (According to plaintiffs' own testimony, the Emblems and Modes paper was a secret paper that Karl Germer guarded very carefully, and when a candidate was handed the paper he or she became a IX° member. RT 196, 297.)
2. In 1957 e.v., Mr. Germer wrote Mr. Motta a letter about the IX°, specifically referring to points mentioned in the IX paper. DX 23.
3. In 1959 e.v., Mr. Motta wrote Mr. Germer inquiring whether the secret of the IX° was as all-powerful as it was supposed to be. DX 34. Mr. Germer wrote back that it was, and suggested that Mr. Motta perform his own experiments. DX 35.
4. In 1962 e.v., Mr. Germer wrote Mr. Motta and offered him a charter to work the first three degrees of the O.T.O. Mr. Motta was to be the head of a Lodge. PX54. Mr. Motta's right to open a Lodge was confirmed in a later letter by Mrs. Germer. PX 55.
Mr. Germer's repeated communications with Mr. Motta about the IX° (which is a secret grade, RT 196, 691) and offer of specific authority within the O.T.O. confirm Mr. Motta's own testimony about his O.T.O. membership and IX° status. Plaintiffs also repeatedly treated Mr. Motta as an O.T.O. member.
5. Plaintiff Smith wrote Mr. Motta a letter in 1977 e.v. PX 122. She starts it off "Dear Brother". O.T.O. members are known as "brothers" (or "sisters"). DX lA. She says that in conformance with her obligations of the III° O.T.O. she is informing Mr. Motta that his private correspondence is being circulated among newly made members. PX 122. When asked in court to explain the III obligation she was referring to in that letter, she testified that it was, to the effect, "If ill is spoken of another member of the O.T.O. that at least he be alerted." RT 345.
6. In 1976 e.v., Seckler wrote Mr. Motta saying that Mr. Germer had willed a library to the O.T.O. and suggesting that Mr. Motta try to get it. PX 50.
7. In 1977 e.v., Seckler offered Mr. Motta materials out of the O.T.O. library. PX 123.
8. In 1979 e.v. and again in 1981 e.v. plaintiffs wrote Mr. Motta acknowledging his O.T.O. membership (prior to their purported expulsion of him). PX 11, 73.
At trial plaintiffs took the position that they must have made a mistake, or they really did not have any records showing his membership even though they said they did, or they were not really referring to him as a member when they addressed him as "Brother", or they interpreted the obligations of the III to really refer to everyone, even though in fact it refers only to members. RT 311-2, 345, 626-8.
There was no evidence introduced to show that Mr. Motta was not a member. On such a record, the only possible finding was that Mr. Motta is in fact a member of the O.T.O. As a member he is entitled to the rights enumerated at the beginning of this Section which the trial court improperly denied him.
V. THE DISTRICT COURT SHOULD NOT HAVE DECIDED INTERNAL QUESTIONS OF O.T.O. DOCTRINE AND PRACTICE.
The district court improperly decided questions of internal O.T.O. doctrine and practice. These arguments were set out in defendants' post-trial brief below at pages 14-19, 27, CR 101. The question of the district court's legal authority is a legal one subject to a de novo standard of review.A. O.T.O. Rules:
As the O.T.O. governing documents make clear, O.T.O. members may not sue other O.T.O. members. Members who do sue other members are automatically expelled from the Order. DX lA #25 ("Lawsuits between members of the Order are absolutely forbidden, on pain of immediate expulsion and loss of all privileges..."); RT 183-183, 644. Defendant Motta is an O.T.O. member. See Section IV, above. Accordingly, plaintiffs cannot use the courts to enforce rights against defendants which are based on plaintiffs' O.T.O. membership.B. Necessary Parties Absent:
The failure to include necessary parties should also invalidate the district court's determination that McMurtry is the O.H.O. and that Mr. Motta has no rights to O.T.O. property. This may be raised even after trial. The parties in question are other claimants to O.T.O. authority.
As the Maine opinion indicates, 598 F. Supp. 946-7, and the evidence in the case showed, RT 138, 286, 382, 729, 736-7, PX 47, PX 125, there are a number of groups not parties to the case which claim to be headed by the real Outer Head and the right to ownership of O.T.O. property, including O.T.O. branches in England and Switzerland. See also Velle Transcendental Research Association, Inc., v Sanders, 518 F. Supp. 512, 514 (C.D. Cal. 1981 e.v.). Jean Brayton, a California resident, claims to be the leader of the O.T.O.
Federal Rule of Civil Procedure 19 requires joinder of necessary parties where the absent person "claims an interest relating to the subject of the action and is so situated that the disposition of the action in his absence may (i) as a practical matter impair or impede his ability to protect his interests..." The absent O.T.O. claimants will have their ability to protect their interests impeded since this decision will place a cloud on their claimed titles of ownership.
The need to include these necessary parties is particularly strong here since the court's determination that McMurtry is the O.H.O. was based on a theory about the O.T.O.'s internal structure which was supported only by members of plaintiffs' O.T.O. group, and by no other O.T.O. group in the world. By doing so, the district court has allowed plaintiffs' American O.T.O. group to simply appoint itself to worldwide O.T.O. supremacy and ownership of all its property.C. First Amendment Violation:
The Supreme Court in Presbyterian Church in the United States v. Mary Elizabeth Hull Memorial Presbyterian Church, 393 U.S. 440 (1969 e.v.) made plain that the First Amendment bars civil courts from deciding questions of church property if the decision turns on the resolution by the civil courts of questions of religious doctrine or practice. The district court's opinion violates this rule, The discussion in Section II above indicates the great extent to which the district court had to interfere with internal O.T.O. doctrine to reach its conclusions. The district court should not be permitted to decide internal questions of O.T.O. doctrine and practice and its determinations of those questions should be vacated. In particular, its decision that McMurtry is the O.H.O. and that defendants have no rights to O.T.O. property should be stricken.
The district court improperly relied on the Maine decision for collateral estoppel purposes. Conclusions 6, CR 94 p. 9. These arguments were made below in defendants' post-trial brief at 19-27, CR 101. As this involves strictly a question of law, a de novo standard of review is appropriate.
1. Offensive collateral estoppel: In Parklane Hosiery Co. v. Shore, 439 U.S. 322 (1979 e.v.), the Supreme Court permitted the use of offensive collateral estoppel subject to a court's discretion. The case states that offensive collateral estoppel will not apply where "...a plaintiff could easily have joined in the earlier action," but instead employs a "wait and see" attitude. 439 U.S. at 330, 331. The reason for this rule is that collateral estoppel is supposed to be a doctrine of judicial economy, yet wait-and-see plaintiffs actually increase litigation by refusing to allow their issues to be settled in the first proceeding.
The rule against wait-and-see plaintiffs applies here. Not only could plaintiffs have joined and were invited to join in the Maine proceeding, they did join to the extent of testifying, plaintiff McMurtry being one of the crucial witnesses in that case. Maine case, 598 F. Supp. 946. McMurtry's testimony went to the same issues as were presented in the instant proceeding. Plaintiffs had a financial stake in the Maine case since they do business with the publisher defendant in that case. RT 799-801.
2. General requirements for collateral estoppel: The district court set forth no analysis of the general requirements for collateral estoppel. Those requirements are that not only must the identical issue be involved, but also (a) the issue must have been actually litigated in the prior proceeding; (b) the prior determination of the issue must have been essential to the prior judgment; and (c) the prior judgment must have been valid. Restatement (Second) of Judgments # 27 (1982 e.v.).
(a) Actually litigated. The issue of whether or not the O.T.O. existed was never actually litigated in the Maine case, as that opinion itself reveals. Maine case, 598 F. Supp. 951. Therefore, defendants cannot be bound by that finding (not the implication the district court drew from that finding, that defendants do not own the O.T.O. property, Conclusion 6(a), CR 94 p. 9) under the doctrine of collateral estoppel. Where an issue is not actually litigated, collateral estoppel does not attach, even where the first court enters a finding on the issue.
(b) Valid judgment: The requirement that the first judgment be valid is also not met here. A decision which violates the First Amendment is void and therefore subject to collateral attack in a later proceeding. No collateral estoppel effect attaches to such a decision. The reason the Maine decision is void as violating defendants' First Amendment rights is that it impermissibly decided a question of ecclesiastical authority (i.e., O.T.O. headship). This is the same issue which is discussed above in Section V(C) of this brief.
3. Change in facts: Another consideration in the application of collateral estoppel is whether the facts have changed between the first and second proceedings. In this case they have. As discussed above, Mr. Motta contended that Mr. Germer's naming of him as the "Follower" constituted his appointment as O.H.O. The Maine court specifically found that the term "Follower" had no special meaning in O.T.O. parlance. Maine case, 598 F. Supp. 944. After the Maine decision, plaintiffs here proffered a letter by Mrs. Germer in which she clearly used the term "Follower" to mean the head of the O.T.O. DX 53. A change in the facts so key to the decision in Maine should preclude the collateral estoppel effect of that decision.
4. Effect on plaintiffs: While defendants contend that the Maine decision is in no way binding, if, notwithstanding the prior arguments, this Court upholds the application of collateral estoppel, it should apply it to plaintiffs as well as to defendants.
(a) Collateral estoppel binds those claiming through an unincorporated association once that association has had a full and fair opportunity to litigate an issue... Since the O.T.O. litigated its rights in Maine and was found not to exist, and since plaintiffs' claims derive solely from the O.T.O., their ability to argue that the O.T.O. does exist should be foreclosed.
(b) Plaintiffs are also ensnared by the collateral estoppel rule which binds anyone who "substantially participates" in a proceeding by the court's decision in that proceeding, even through the person was not technically a party in the proceeding. Restatement (Second) of Judgments # 39...
In sum, the Maine decision should not be held to have any collateral estoppel effect in the instant case.VII. DEFENDANTS DID NOT LIBEL PLAINTIFFS
The arguments in this part go to whether there was substantial evidence in support of the district court's findings. Fed. R. Civ. P. 52(a).
(1) The court finds that McMurtry was accused of having "pirated property". Finding 17, CR 94 p. 5. Nowhere in the First Amended Complaint (CR 1 p. 6) is there any allegation that McMurtry was accused by defendants of having "pirated property". The word "pirated" appears only in connection with plaintiff Smith (and former plaintiff Regardie). First Amended Complaint #24, CR 1 p. 6.
(2) The district court found that McMurtry was accused of having "delivered property to the hand of thieves". Finding 17, CR 94 p. 5. Again, there is nothing in the First Amended Complaint about this. CR 1 p. 6.B. Defendants' statements about theft are true:
The points made here are subject to a substantial evidence standard of review. Fed. R. Civ. P. 52(a).
(1) The evidence is uncontradicted that Seckler stole the O.T.O. library for herself. RT 101-2,156-9, PX 16.
(2) Plaintiffs denied Mr. Motta, a IX° member, free access to the O.T.O. library, DX 65, 67, RT 436, even though all IX members share ownership of O.T.O. property, RT 283, 735, DX lA, #52, and all members are specifically permitted access to O.T.O. libraries. DX lA #46. This conversion constituted a theft and misappropriation.
(3) Plaintiff Smith has made money for herself publishing Crowley materials owned by the O.T.O. for 16 years without any permission at all, not even from plaintiffs' group until "recently" (although defendants deny that permission from plaintiffs grants any rights at all). RT 325, 335, 337, 365, PX 100. Furthermore, she admits she began publishing in 1971 e.v., RT 367, which would have been before plaintiffs' group would have had any authority to give her. Smith testified that she did not recognize McMurtry as having any authority until 1977 e.v. When she was publishing from 1971 e.v. to 1977 e.v., therefore, she was clearly without even any pretension of having authority to do so. Furthermore, she admits that she does not have a warrant from the O.T.O. (RT 326), yet an O.T.O. member must have a warrant (or "charter" or "patent") to publish books copyrighted by the O.T.O. RT 839.
(4) Plaintiffs sold O.T.O. books from the O.T.O. library and retained the proceeds for themselves. RT 232, 841-2.
(5) Plaintiffs licensed people who were not O.T.O. members to publish O.T.O. materials without getting royalties for the O.T.O. RT 549-50, PX 11. This violates the doctrine of waste. What is worse, plaintiffs gave away O.T.O. property simply to secure personal benefits, permitting publication of O.T.O. copyright materials without royalties in return for recognition of themselves as legitimate. RT 549.
(6) Plaintiff Wasserman did deliver property into the hands of thieves, the thieves being the other plaintiffs. Mr. Motta gave him a power of attorney to secure Mr. Motta's rights to the library in the Calaveras Country proceeding. RT 446. He also worked as an editor assisting a publishing house which he knew full well was infringing O.T.O. copyrights and he therefore was an active participant in that piracy. RT 443. He also helped publish O.T.O. copyrighted material, the Holy Books of Θελημα, without proper warrant to do so. RT 836, 849.
(7) Plaintiffs appropriated O.T.O. property without ever having a charter or warrant, which is required to do so. RT 839-40.C. Absolute privilege:
All of defendants' charges of theft and misappropriation of property are absolutely privileged under the First Amendment. The district court attempted to make a distinction between absolutely privileged matters in the religious realm and secular matters that are not privileged at all. RT 492-3. What the district court ignored, however, is that truth is a complete defense to any charge of defamation, and in the instant case the truth or falsity of the charges hinges entirely on nonjusticiable questions of internal O.T.O. religious doctrine and practice. The First Amendment therefore makes these charges absolutely privileged.
In particular, the charges of theft and misappropriation stem from plaintiffs' appropriation of the O.T.O. library and denying Mr. Motta access to it, their publication of O.T.O. copyrighted material and licensing of others to publish O.T.O. copyrighted material without proper warrant to do so from the O.T.O., and sale of O.T.O. library books and retention of the proceeds (see part B of this Section above). In each case, the question of whether or not such actions constituted thefts and misappropriations depends on whether plaintiffs had any authority from the O.T.O. to do what they did. Defendants contend that they did not. The district court could not have decided that they did without violating the First Amendment by deciding a question of internal church doctrine, i.e., that McMurtry is the O.H.O. of the O.T.O. For purposes of the defamation charges therefore, defendants' assertions must be deemed valid and therefore immune from a defamation claim.This issue is one of law and subject to de novo review.
Furthermore, all the alleged libels were conditionally privileged as they involved discussions of the fitness for membership or office of people within a church or fraternal society... Although the privilege is qualified and could be overcome by a finding of knowledge of falsity or reckless disregard of truth, Restatement (Second) of Torts #600 (1965 e.v.), there was no such knowledge or recklessness involved here as discussed in part E, below.
Plaintiffs of course claim to be O.T.O. members and officers. Mr. Motta accused them of misappropriating O.T.O. property; failing to aid Mrs. Germer, the widow of the former O.H.O.; slandering other O.T.O. members; and being accused by Mrs. Germer of having been instrumental in the robbery of her home. (This last would be significant to someone judging whether plaintiffs' claimed authority was legitimate. Since Mr. Germer through his will had appointed his wife as the person to decide who to give O.T.O. authority to after his death, the fact that she thought Seckler (McMurtry's wife) had been instrumental in robbing her would strongly suggest that Mrs. Germer would never give plaintiffs any authority.)These statements all fall squarely within the bounds of this privilege.
The district court found that defendants had made the allegedly defamatory statements with knowledge of their falsity and reckless disregard of the truth. Finding 20, CR 94 p. 6. Even if the district court's conclusion that the statements were false were proper, Mr. Motta reasonably believed his charges were true.
(1) Statements about theft: See part B of this Section above. Defendants would also point out that with regard to the third theft of the O.T.O. library, plaintiffs admit that the lock on the storage locker where Seckler was hiding the library was undisturbed (RT 234), that only Seckler and Smith knew the location of the library (RT 239, DX 74A p. 1) and that only Seckler and Smith had keys to the lock. RT 280-1. Furthermore, plaintiffs' O.T.O. organization not only considered plaintiff Smith a suspect in the theft, but also considered Seckler to be the prime suspect. DX 74A p. 3, RT 810-1.
(2) Accusation that McMurtry allowed Mrs. Germer to starve to death: The basis for Mr. Motta's statement was that Mrs. Germer wrote Mr. Motta (who was living in Brasil) saying that she lived on $1 a day, with two dogs and two cats, DX 53A, while McMurtry (who lived in the United States as she did) did nothing to help her. RT 182, 847.
(3) Accusation regarding robbery of Mrs. Germer: The basis of Mr. Motta's statement that Mrs. Germer accused Seckler of sending her children to rob Mrs. Germer was a letter Mrs. Germer wrote Mr. Motta saying that plaintiff Seckler's daughter had robbed her and that it was a "2 Family Conspiracy". DX 53A, 53B. Mrs. Germer sent her accusation not to Seckler's daughter but to Seckler herself. PX 12.
(4) Accusation that McMurtry slandered members: Mr. Motta was alerted to McMurtry's slander of him by a letter from plaintiff Smith. RT 777-8, DX 71A. She says that in conformance with her obligations of the III O.T.O. and Duties of the Order 73, she is informing Mr. Motta that his private correspondence is being circulated among newly made members. PX 122 (DX 71A). When asked in court to explain the III obligation she was referring to in that letter, she testified that it was, to the effect, "If ill is spoken of another member of the O.T.O. that at least he be alerted." RT 345. Duty 73 deals with slander. RT 778.
Mr. Motta also testified directly that he believed his statements to be true. RT 773-4 (Seckler's misappropriation of property); RT 7747 (Seckler's cumplicity in robbery of Mrs. Germer); RT 777-8 (McMurtry's slanders); RT 778-80 (McMurtry's misappropriation); RT 83~42 (Smith's misappropriation); RT 843-4 (Wasserman's breach); RT 846-8 (McMurtry's allowing Mrs. Germer to starve).
The issues in this part are of fact and subject to substantial evidence review. Fed. R. Civ. P. 52(a).
For the foregoing reasons, the district court's findings that defendants libelled plaintiffs should be overturned.