Werner Erhard & Associates v. Christopher Cox for Congress

Werner Erhard and Associates v. Christopher Cox for Congress

Superior Court of California, County of Orange
Court Superior Court of California, County of Orange
Full case name Werner Erhard and Associates; Werner Erhard v. Christopher Cox for Congress; Christopher Cox
Decided December 6, 1988 (libel charges dismissed)
February 28, 1989 (slander charges dropped)
February 5, 1992 (dismissed with prejudice)
Citation(s) Case Number: 558168, Filed: May 17, 1988
Case opinions
Libel charges dismissed by court.
Court allowed defense to view 60-hour est organization videotape.
Court membership
Judge(s) sitting Superior Court Commissioner Eleanor M. Palk
Keywords
Defamation, Dispositive motion, Libel, Slander, Summary judgment

Werner Erhard and Associates v. Christopher Cox for Congress is a lawsuit that was filed in 1988 by the company Werner Erhard and Associates and its owner Werner Erhard (the founder of Erhard Seminars Training, or "est") against then-Congressional candidate Christopher Cox and his campaign organization Christopher Cox for Congress. Cox's campaign sent out material which was critical of Rosenberg's ties to Erhard and Erhard's organizations. The mailer described Rosenberg as an "est advocate", and quoted a Los Angeles magazine article which had said the Cult Awareness Network described Erhard's organization as a "destructive cult". Cox's campaign also called citizens and asked them what they thought of a political candidate who had connections "with that cult est". Cox won the election in the Republican primary, with Irvine, California Councilman David Baker placing second and Rosenberg third. Cox went on to win the Republican primary and then later won the general election to become the next United States Representative from California's 40th congressional district.

On May 27, 1988, Werner Erhard and his organization Werner Erhard and Associates filed a lawsuit for $5 million in Orange County Superior Court against Christopher Cox and his campaign, claiming libel and slander. On December 6, 1988, Superior Court Commissioner Eleanor M. Palk issued a ruling dismissing the libel cause of action, but did not dismiss the slander charges. On December 16, 1988, Palk ruled that Cox, his defense attorneys, and expert witnesses could view a 60-hour est organization videotape. Cox's attorneys had requested to view the video in order to determine if material contained in the tape could support expert witness testimony from cult experts. On February 28, 1989, Werner Erhard chose to drop the charges of slander from his suit against Cox. Erhard's attorney's asserted this decision was made in order to expedite an appeal of the dismissal of the libel charges to the California Courts of Appeal. According to testimony given by Cox in his nomination hearing to become Chairman of the U.S. Securities and Exchange Commission, the case was dismissed with prejudice in 1992.

1988 campaign

On January 4, 1988, Congressman Robert Badham announced he would not seek re-election to Congress, and Nathan Rosenberg who had run against Badham in 1986 said he "is definitely looking at it".[1] Rosenberg said he had "stayed in contact with all the supporters I had last time", and had already raised $50,000 for a potential primary challenge to Badham.[1] Rosenberg became the first candidate to officially enter the race for the open seat for Congress on January 5, 1988.[2] Rosenberg said he already had $200,000 in cash and an additional $150,000 in pledged contributions.[2] He hired David Vaporean, Badham's campaign manager from 1986.[2] Rosenberg commented on the effect of Erhard on his 1988 campaign: "In some ways it's a help. In other ways, for some people, it's controversial. Werner is a controversial figure."[3]

Rosenberg ran against Christopher Cox in the 1988 race for the seat representing California's 40th congressional district.[4] For the period of January 1 to March 31, 1988, Rosenberg's campaign had raised $195,986 to Cox's $186,082.[5] Rosenberg led the contenders for the 40th Congressional District in total expenses for the period.[5] Rosenberg was seen as an early favorite in the 1988 race, though his candidacy was subject to a whisper campaign that the majority of his supporters were followers of his brother Erhard's est training.[6] "His money is est money," said a political operative in Orange County in a statement in the Sacramento Bee.[6]

In May 1988, Cox's campaign sent out a four-page political mailer to 110,000 potential Republican voters in the district, which accused Rosenberg of concealing links to Erhard and his companies and of not being fully truthful regarding his work experience.[4][7] The mailer characterized Rosenberg as an "est advocate".[4] It quoted a Los Angeles magazine article which had said that the Chicago, Illinois organization Cult Awareness Network referred to Erhard's companies as "destructive cults".[4][8] Quotations included in the mailer said "what Erhard has done is utterly disastrous".[9] The Los Angeles magazine article cited by the mailer quotes a representative of the Cult Awareness Network who had compared the est organization to the Unification Church, Scientology, Transcendental Meditation, and Hare Krishna.[8] The Orange County Register compared the mailer to a similar brochure sent out by Badham's 1986 campaign to voters in the district.[8] A political consultant for Cox said that the mailer was sent out in order to point out "Rosenberg's campaign tactics of concealment and distortion," and stated "We just wanted to tell the voter to be wary of anything Nathan Rosenberg says."[4] The Cox campaign also placed phone calls to voters asking for their opinions on a political candidate's links "with that cult est".[9] A subsequent mailer sent out by the Cox campaign included an article that detailed Rosenberg's connections to Erhard's est organization.[10] The article stated "some critical studies ... branded" est "a non- or even anti-religious cult with Eastern mystical overtones".[10]

According to the Los Angeles Times, Rosenberg said he had worked as a "seminar leader" in The Forum, and he "angrily dismissed allegations raised in the mailer that his brother's programs are subversive or cultlike."[4] Rosenberg's political consultant, David Vaporean, acknowledged that "a number of people" who had previously heard Rosenberg lecture in seminars for Erhard's organization were included in the volunteer base for his 1988 campaign.[4]

A poll in late May 1988 found that a majority of voters were not concerned with whether or not a candidate had a controversial member within their family - a reference to Rosenberg's brother Erhard.[11] The poll, conducted by Chapman University's Chapman College Survey group for The Orange County Register, showed Cox leading in the Republican primary with 15 percent to Rosenberg's 13 percent.[11] 57 percent of voters polled were undecided.[11] Of those that were decided, 36 percent supported Cox, while 30 percent supported Rosenberg.[11] "I think the undecideds will break out along the lines of the people who have already decided," he said. "We'll get the lion's share. The momentum is all going in the right direction," said Cox.[11] Rosenberg commented on the large number of undecided voters: "What it points out is none of us really has gotten our message out," he said. "Not one candidate has been strong enough to break out of the pack."[11]

In June 1988, only days before the election date, mailers were sent out by an individual named Arthur M. Jackson that characterized Christopher Cox as a Communist propagandist, based on Cox's business involvement in translating the Soviet newspaper, Pravda, and accused Baker of marital infidelity.[12][13][14] Rosenberg, whose own campaign had sent out a similar mailer referencing Cox's Pravda translation work, held a press conference and stated his campaign had "nothing to do" with Jackson's mailers, an assertion that seemed implausible to Cox and Baker.[12][13] Jackson was a graduate of Erhard's est training, and a donor to Rosenberg's campaign.[13] A company called Diversified Mailing Inc. handled Jackson's mailings. The same company processed Rosenberg's campaign mail and had been used by his political consultant David Vaporean for 10 years.[13] Rosenberg acknowledged he knew Jackson since 1980 when the two both worked in Washington, D.C.[12][13] He said that Jackson was "a friend, but a misguided friend", and told press he had asked an aide to return Jackson's $1,000 campaign contribution to him, as he disapproved of his tactics.[12] Rosenberg asserted that Cox was responsible for the bitter nature of the campaign, stating, "He started it with all those lies about est. We tried to take the high road."[13]

Cox gained in pre-election polls after gaining powerful supporters including William F. Buckley, Jr., Oliver North and Robert Bork.[15][16] Cox won the June 7, 1988 Republican primary.[17] Irvine, California Councilman David Baker came in second in the primary, and Nathan Rosenberg came in "a distant third", after previously coming in second in pre-election polling.[18][19] Cox received 31% of the vote, Baker 29%, and Rosenberg 18%.[20] Cox went on to win the general election and become a member of the United States House of Representatives.[17]

In June 1988, police closed an investigation into alleged jamming of the Cox campaign's phone lines by supporters of Rosenberg.[21] "For several weeks, about every third call we got was one of these bogus calls. You would hear a kind of whirring noise like a machine of some kind. ... It got so bad just before the election that we had to move our get-out-the vote operation to another office and use cellular phones in the field," said Cox's campaign manager Bob Schuman.[22] A representative of the police said that charges were not made because though the location of the jamming was traced, it could not be determined specifically which individuals were responsible.[21] "It's incredible to me that someone can do what was done to us and we have an absolute identification" of the location of the jamming, said Schuman.[21] "I can't speak for Chris, but I feel pretty strongly that we don't want to let them get away with it. We don't want to let it end here," he said.[21] Rosenberg denied knowledge about the phone jamming.[21][22] "I don't know anything about it. I don't want to speculate about who might have done this to Cox's phones, but I certainly don't condone it," said Rosenberg.[22] Rosenberg posited that the Cox campaign was requested police look into the matter as a tactic to discourage him from attempting a write-in-campaign against Cox in the November general election for Congress.[23] According to the Orange County Deputy District Attorney, the phone calls were traced to a residence owned by Rosenberg supporters.[21][23] The residence belonged to a developer and his wife who had each made donations of $1,000 to Rosenberg's campaign for Congress.[21]

Lawsuit

Suit filed

On May 20, 1988, Werner Erhard and Associates announced its intention to file a lawsuit for $5 million against Cox over the mailer sent out to voters about the est company and other Erhard organizations.[8] On May 27, 1988, Werner Erhard and his organization Werner Erhard and Associates filed a lawsuit in Orange County Superior Court against Cox and his campaign Christopher Cox for Congress, claiming libel and slander charges for the mailer that had described Erhard's organization as a "destructive cult".[24][9][25] Nathan Rosenberg was not a party to the suit.[26] The lawsuit claimed that statements about the est organization made in the Cox campaign mailer were "untrue, libelous and extremely damaging" to its reputation and that of its founder, Werner Erhard.[24] Erhard and his company claimed that the mailer could potentially harm its "human potential" seminars, financial dealings, and other business interests in Orange County.[9]

Sharon Spaulding, a representative of Werner Erhard and Associates, called the characterization of the est training in the Cox campaign mailer "completely untrue, clearly libelous, and ... extremely damaging", and said "We are taking this action to rectify ... allegations made against ... Werner Erhard and Associates, its employees and the more than 24,000 people in Orange County who have participated in programs developed by Mr. Erhard."[8] According to Spaulding, the est organization had warned the Cox campaign against making critical statements about it, and provided Cox with material regarding its prior conflict with the Badham campaign.[8]

Official's for Cox described Erhard's suit as a political ploy for Rosenberg's campaign.[26] Cox's campaign manager, Bob Schuman, defended the mailing.[24][25] He described Erhard's suit as "baseless and groundless".[24][25] He said the assertions it made were "factual and documented", and that its statements about the est organization were attributed to "a credible publication".[8] Schuman pointed out that the fact that Erhard's organization did not file a lawsuit against the "credible publication that we quoted word for word shows that this is malicious litigation designed to help Nathan Rosenberg's campaign".[24] He noted that the language of the Cox campaign mailer was different from that used previously by the 1986 Badham campaign's mailer about the est organization.[8]

Art Schreiber, an attorney for Werner Erhard and his organization Werner Erhard and Associates, stated that the fact that a defamatory statement had previously been published in another publication was not a proper defense against a possible claim of libel.[8]

At a candidates forum at the University of California, Irvine in May 1988, Cox commented on the mailings and defended the statements made therein: "I firmly believe that the issues I pointed out ... must be pointed out."[27] Cox described the statements made in the mailings as "factual" and "issue-oriented".[27] Cox noted that the comment characterizing the est organization as a "destructive cult" came from "a credible source", Los Angeles magazine, and that it was properly quoted.[27] Referring to Rosenberg's involvement in the Erhard-related organization The Hunger Project, Cox said: "(Rosenberg) claimed to be a leader in one of the foremost organizations devoted to solving world hunger. In fact that organization is an est affiliate and that was not identified."[27]

Libel charges dismissed

On December 6, 1988, the libel portion of Rosenberg's lawsuit against Cox was dismissed.[28][29] The ruling did not dismiss the slander portion of the suit, which dealt with phone calls individuals received which asked if they would vote for a political candidate with ties to a "cult" such as Erhard's est organization.[29] Superior Court Commissioner Eleanor M. Palk ceded to the request by attorneys for Cox to dismiss the libel charge,[28] and ruled that the statements included in the mailer sent out by the Cox campaign were within accepted grounds for comments made during a political campaign, and should be treated as opinion protected by the United States Constitution, which could not be characterized as defamatory under law.[9] Of the calls from the Cox campaign received by voters that posed questions about Erhard's organization, Palk stated: "The audience consisted of residents who received unsolicited telephone calls and who would not necessarily expect a political message in the guise of what could have been understood to be a poll."[9][28]

Erhard representative Sharon Spaulding stated "From our standpoint, we're just glad that the judge ruled we have a viable claim" for the issue of the slander part of Erhard's lawsuit.[9] Erhard's attorney, William S. O'Hare, asserted that his client was vindicated by the ruling.[28] O'Hare said that "Up until now, we didn't know whether this case had any validity at all. It was up in the air. ... This ruling is a mixed message, but at least we're still in court".[9]

Sue Himmelrich, one of the lawyers who represented Cox in Los Angeles, called the judge's dismissal of Erhard's libel claim a victory: "We think this is a tremendous victory. Half of the lawsuit has been knocked out without the judge even having heard evidence, which is obviously unusual," she said.[9] She said that Cox was "absolutely thrilled" when he heard of the judge's decision to throw out the libel charge.[9] She said that "we have no doubt we'll win" the on the slander claim, as well as a possible appeal by Erhard of the dismissal of the libel claim.[9] Himmelrich characterized Erhard's legal complaint as "a nuisance suit".[9]

Slander charges dropped

Congressman Christopher Cox commented that Erhard's decision to drop the slander charges meant the case was over.[30]

On December 16, 1988, the judge in the case ruled that defense attorneys for Cox could watch a 60-hour est organization videotape.[31][32] The videotape's purpose was to train instructors in the est organization on how to carry out est seminars.[32] Superior Court Commissioner Eleanor M. Palk denied Cox's lawyers' request to view three other videotapes, but ruled that they could view the most recent tape, which was from 1984.[32] Cox's attorneys hoped that the tape would help them to show that the est organization did have similarities to a religious cult.[32]

William O'Hare, a lawyer for Erhard, had argued that the videotapes should not be reviewed by defense attorneys because this would violate the privacy of the individuals that appear in the video.[32] The judge's ruling specified that only expert witnesses, Cox, and his lawyers would be able to watch the video.[32] Cox's lawyer Sue Himmelrich stated that the video would potentially be able to assist cult experts in testifying that the Cox campaign's characterization of the est organization as a cult was accurate.[32] "Truth is always an absolute defense (against libel). If the tapes establish that they (est instructors) do things that expert witnesses would consider cult-type behavior, that would help establish our defense," said Himmelrich.[32]

Cox's campaign appealed the judge's decision not to dismiss the slander charges in addition to the libel charges.[33] In February 1989 the California Courts of Appeal agreed to hear arguments from attorneys for Cox on why Erhard's slander charges should also be dismissed.[33] Cox felt that the court would issue a ruling dismissing Erhard's slander charges on appeal.[33]

On February 28, 1989, Werner Erhard chose to drop the charges of slander from his suit against Cox.[30] His lawyers asserted that the slander charges were dropped so that Erhard could focus on an appeal of the earlier dismissal of Erhard's libel charges against Cox.[30] "Our feeling is the libel case is the more significant of the two. The slander involved a smaller number of people," said Erhard's lawyer O'Hare.[30] O'Hare explained that Erhard primarily wished to appeal the dismissal of the libel charges, but was prevented from doing so until the lawsuit involving Erhard's slander charges had been concluded, which could have taken weeks or months.[30] O'Hare said that the slander charges were dropped so that Erhard could immediately take the dismissal of the libel charges to the California Courts of Appeal.[30]

When contacted about Erhard's decision to drop the slander charges, Cox was happy and commented that this meant the end of the case: "This is terrific. The whole thing is over; the other shoe has dropped," he said.[30] Daniel J. Woods, a lawyer for Cox, described the lawsuit as frivolous.[30] "The Orange County Superior Court has already thrown out the libel claim, with good reason. Today's action is merely the est people giving up on the slander cause of action," said Woods.[30] Woods said that Erhard would lose his case regarding the dismissed libel charges if he attempted to bring the matter up on appeal: "Saying they are going to focus on an appeal for the libel claim is only a face-saving statement."[30]

In May 1989, Commissioner Palk ruled that Cox's and his lawyers had to return videotapes of est training seminars to Werner Erhard and Associates.[34] Palk also ordered Cox to pay Erhard's organization $1,000 for failing to return them.[34]

Christopher Cox described the lawsuit in his nomination hearing to become Chairman of the U.S. Securities and Exchange Commission, noting: "Following protracted discovery the case was dismissed with prejudice in 1992; I and the plaintiff executed a mutual release of claims. No settlement monies were paid."[35] On February 5, 1992, Werner Erhard and Associates filed a motion to dismiss with prejudice, titled: "Request for Dismissal - Full - With Prejudice".[36]

Analysis

In a 1990 article reflecting on the political campaign, Larry Peterson of The Orange County Register noted "Before Rep. Christopher Cox, R-Newport Beach, won the primary, various detractors: ... Attacked Rosenberg concerning the est human-potential seminar program led by his brother, Werner Erhard. Rosenberg denied the charges, and Erhard's firm sued Cox's campaign, charging libel and slander. The libel charges were dismissed ... Most of the charges were made in slick brochures mailed almost daily to voters in the district. Sometimes, as in Cox's mailing lambasting Rosenberg for links to what it called Werner Erhard's 'destructive cult,' the sender was identified. But sometimes attackers cloaked themselves in anonymity. That shielded candidates who were responsible for them—or on whose behalf they were made—from the wrath of those who might be turned off by smear tactics."[16] Political consultant Eileen Padberg commented on the negative nature of the campaign "They used negative stuff because it works," and consultant Harvey Englander said that "the negative material gave candidates a way to distinguish themselves from their opponents."[16]

See also

References

  1. 1 2 Peterson, Larry (January 4, 1988). "Badham tells supporters he will not run - 'Megabucks' battle for seat could develop". The Orange County Register. p. A1.
  2. 1 2 3 Peterson, Larry (January 5, 1988). "3 enter race as Badham steps aside - '86 primary foe is first to announce". The Orange County Register. p. A1.
  3. ↑ Appel, Ellen (January 31, 1988). "A campaign gets some fuel in an automobile museum". The Orange County Register. p. F3.
  4. 1 2 3 4 5 6 7 Churm, Steven R. (May 20, 1988). "ELECTIONS '88 - ORANGE COUNTY - Job Record, Family Ties - Cox Uses Mailers in Attack on Rosenberg". Los Angeles Times. Retrieved 2009-09-08.
  5. 1 2 Pasco, Jean O. (April 16, 1988). "Baker raises $234,993 in 40th Congressional District race". The Orange County Register. p. B8.
  6. 1 2 Richardson, James (May 10, 1988). "State Can Look For a Few Good House Battles". Sacramento Bee. p. A3.
  7. ↑ Churm, Steven R. (May 24, 1988). "Democrat Puts Herself Into GOP's 40th District Feud". Los Angeles Times. p. 6.
  8. 1 2 3 4 5 6 7 8 9 Peterson, Larry (May 21, 1988). "Est firm to sue Cox over campaign mailer". The Orange County Register. p. B1.
  9. 1 2 3 4 5 6 7 8 9 10 11 12 Lichtblau, Eric (December 7, 1988). "Libel Part of est Founder's Suit Against Cox Rejected". Los Angeles Times. Retrieved 2009-09-08.
  10. 1 2 Peterson, Larry (June 1, 1988). "Cox, Rosenberg feud over endorsement claims". The Orange County Register. p. B1.
  11. 1 2 3 4 5 6 Pasco, Jean O. (May 25, 1988). "Voters draw blanks in 40th District race - Candidates mostly unknown, poll shows". The Orange County Register. p. A1.
  12. 1 2 3 4 Carlton, Jim (Jun 4, 1988). "ELECTIONS '88 Rosenberg Says Friend, but Not the Mailer, Is His". Los Angeles Times. p. 1.
  13. 1 2 3 4 5 6 Peterson, Larry (June 4, 1988). "Rosenberg asks critic of opponents to stay out of congressional race". The Orange County Register. p. B1.
  14. ↑ Carlton, Jim (Jun 3, 1988). "Elections '88 : Orange County : Cox and Baker Are Last-Minute Targets of Mystery 'Hit' Mail". Los Angeles Times.
  15. ↑ Richardson, James; Herbert A. Sample (June 5, 1988). "Most Incumbent Lawmakers Figure to Win Easily Tuesday". Sacramento Bee. p. A26.
  16. 1 2 3 Peterson, Larry (May 6, 1990). "Fighting words: 1988 race brought smear tactics to OC". The Orange County Register. p. N5.
  17. 1 2 Mercury News Wire Services (December 8, 1988). "Claim Dismissed". San Jose Mercury News. p. 2C.
  18. ↑ Peterson, Larry (June 9, 1988). "Results: Pundits see conservatism, luck, backlash in returns". The Orange County Register. p. A6.
  19. ↑ Peterson, Larry (November 15, 1989). "FEC attorney finds no wrongdoing by GOP's Rosenberg". The Orange County Register. p. B9.
  20. ↑ Barone, Michael; Grant Ujifusa (1989). The Almanac of American Politics, 1990. National Journal Group. pp. 174–175. ISBN 0-89234-044-4.
  21. 1 2 3 4 5 6 7 Pasco, Jean O. (June 29, 1988). "Probe of phone jamming closes with no charge". The Orange County Register. p. B4.
  22. 1 2 3 Peterson, Larry (June 21, 1988). "Cox claims his phones jammed - 2 Rosenberg backers suspected, police say". The Orange County Register. p. A1.
  23. 1 2 Churm, Steven R. (June 22, 1988). "Police Check on Jamming of Cox's Campaign Phones". Los Angeles Times. p. 3.
  24. 1 2 3 4 5 Peterson, Larry (May 28, 1988). "Est leader sues Cox for slander over campaign charges". The Orange County Register. p. B3.
  25. 1 2 3 Associated Press (May 31, 1988). "Erhard Sues GOP Politician For 'Libelous' Criticism of est". San Francisco Chronicle. p. A6.
  26. 1 2 Bravin, Jess (May 28, 1988). "Founder of est Sues Cox, Says Statements Libelous". Los Angeles Times. p. 6.
  27. 1 2 3 4 Peterson, Larry (May 24, 1988). "Candidate defends critical brochures". The Orange County Register. p. B4.
  28. 1 2 3 4 Warner, Gary A. (December 7, 1988). "Libel charge dismissed in suit filed by Erhard". The Orange County Register. p. B4.
  29. 1 2 3 4 5 6 7 8 9 10 Brennan, Pat (February 28, 1989). "Slander charges dropped - Cox declares victory in est founder's suit". The Orange County Register. p. B3.
  30. ↑ Lichtblau, Eric (December 17, 1988). "Cox Attorneys May See est Videotapes, Commissioner Says". Los Angeles Times. p. 4.
  31. 1 2 3 4 5 6 7 8 Brennan, Pat (December 17, 1988). "Judge to allow defense to see est seminar tape". The Orange County Register. p. B10.
  32. 1 2 3 Billiter, Bill (February 28, 1989). "Erhard to Pursue Libel Claim in Suit Against Cox". Los Angeles Times. p. 4.
  33. 1 2 Los Angeles Times staff (May 20, 1989). "Court Orders Cox, Attorneys to Pay est Founder $1,000 for Tapes". Los Angeles Times. p. 3.
  34. ↑ S. Hrg. 109-253 -- "Nominations of: Christopher Cox Roel C. Campos, Annette L. Nazareth Martin J. Gruenberg, John C. Dugan and John M. Reich", July 26, 2005. Hearing Before the Committee on Banking, Housing and Urban Affairs. United States Senate. One Hundred Ninth Congress. First Session.
  35. ↑ "Docket". Werner Erhard and Associates v. Christopher Cox for Congress. Case Number: 558168, Filed: May 17, 1988, Superior Court Commissioner Eleanor M. Palk.: Superior Court of California, County of Orange. February 5, 1992.
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