Opposition Brief — Religious Technology Center v. Wollersheim

Suprame Court, US.

(3) FILED *

No. 86-1123 FEB 7 Ber

Sosr ere eH, JR,

CLERK

In The

Supreme Court of the United States

October Term, 1986

RELIGIOUS TECHNOLOGY CENTER, a California

corporation, and CHURCH OF SCIENTOLOGY IN-

TERNATIONAL, INC., a California corporation,

Petitioners,

v.

JON ZEGEL, an individual; DAVID MAYO, an individ-

ual; CHURCH OF THE NEW CIVILIZATION (dba

ADVANCED ABILITY CENTER), a California cor-

poration,

Respondents.

LY.

Vv

BRIEF IN OPPOSITION TO PETITION

FOR WRIT OF CERTIORARI

,

Vw

JoHN R. Reese

(Counsel of Record)

Gary H. Moore

Sera J. Conrap

McCurcuHen, Dove, Three Embarcadero Center

Brown & ENERSEN San Francisco, CA 94111

Of Counsel Telephone: (415) 393-2000

Attorneys for Respondents

COCKLE LAW BRIEF PRINTING CO., (800) 225-6964

or call collect (402) 342-2831

QUESTIONS PRESENTED

1. Can a church use RICO to obtain an injunction

that prohibits the church’s ‘‘enemies’’ from practicing

similar religious beliefs?

2. Does the first, fifth or fourteenth amendment of

the United States Constitution require state law to afford

trade secret protection to religious scriptures that lack

commercial value?

ii

RULE 28.1 LIST

Counsel of Record for Respondents Church of the

New Civilization, David Mayo and Jon Zegel certifies

that there are no known parties interested in the outcome

of this case other than those participating in the case, ex-

cept various affiliates and adherents of Religious Tech-

nology Center and Church of Scientology International,

Ine.

iil

TABLE OF CONTENTS

Page

STATEMENT OF THE CASE 1

A. THE FACTS 1

B. PRIOR PROCEEDINGS 4

1. The District Court’s Devision ~.....WW..... ee

2. The Court of Appeals’ Decision .................... 5

SUMMARY OF ARGUMENT

REASONS FOR DENYING THE WRIT 7

I. THE DECISION THAT RICO DOES NOT AU-

THORIZE PRIVATE INJUNCTIONS DOES

NOT WARRANT THIS COURT’S REVIEW ..... 7

A. THERE IS NO CONFLICT IN DECISIONS 7

. Seana On eee 7

2. The District Courts 10

B. THIS IS NOT THE CASE TO DECIDE

WHETHER RICO AUTHORIZES PRI-

VATE INJUNCTIONS ... 11

C. THIS CASE DOES NOT PRESENT IM-

PORTANT QUESTIONS 14

D. THE DECISION BELOW WAS CORRECT 15

1. Statutory Language 15

2. Legislative History 17

3. Policy 18

II. THE CALIFORNIA TRADE SECRETS LAW

ISSUE DOES NOT WARRANT REVIEW .......... 22

A. PETITIONERS MISSTATE THE DECI-

SION BELOW 22

B. THERE IS NO CONFLICT IN DECI-

ESSE SST BASSAS Ce a 23

C. PETITIONERS’ CONSTITUTIONAL

CLAIMS ARE FRIVOLOUS 24

CONCLUSION 27

lv

TABLE OF AUTHORITIES

Page

CasEs

Aetna Casualty & Sur. Co. v. Inebowitz, 730 F.2d

905 (2d Cir. 1984) 8, 9

Apex Hosiery Co. v. Leader, 310 U.S. 469 (1940) ........... 18

Ashland Oil, Inc. v. Gleave, 540 F. Supp. 81

(W.D.N.Y. 1982) 11

Ashwander v. Tennessee Valley Auth., 297 U.S.

288 (1936) 26

Bennett v. Berg, 685 F.2d 1053 (8th Cir. 1982),

aff’d on rehearing en banc, 710 F.2d 1361, cert.

denied, 464 U.S. 1008 (1983) 8

Brockett v. Spokane Arcades, Inc., 472 U.S. 491,

105 S. Ct. 2794 (1985) 23

Brown v. Barry, 3 U.S. (2 Dall.) 365 (1797) —..... 18

Butner v. Umited States, 440 U.S. 48 (1979) 23

Cell Assocs. Inc. v. National Instits. of Health,

579 F.2d 1155 (9th Cir. 1978) ........ 20

Chambers Dev. Co. v. Browning-Ferris Indus.,

590 F. Supp. 1528 (W.D. Pa. 1984) 10

Chrisman v. Sisters of Si. Joseph, 506 F.2d 308

(ee. ae. Se) 8... ts 20

Congregation Beth Yitzhok v. Briskman, 566

F. Supp. 555 (E.D.N.Y. 1983) .............. — 12

Dan River, Inc. v. Icahn, 701 F.2d 278 (4th Cir. 1983). 9

Davis v. Umted States, 417 U.S. 333 (1974) ww... 9

DeMent v. Abbott Capital Corp., 589 F. Supp.

1378 (N.D. Tl. 1984) 10

Ellis v. Dixon, 349 U.S. 458 (1955) 13

Ernst & Ernst v. Hochfelder, 425 U.S. 185 (1976) ......... 21

Vv

TABLE OF AUTHORITIES—Continued

Page

Estelle v. Gamble, 429 U.S. 97 (1976) 13

First Presbyterian Church v. United Presbyterian

Church, 464 N.E.2d 454 (N.Y.), cert. denied,

469 U.S. 1037 (1984) 26

Follett v. McCormack, 321 U.S. 573 (1944) ne ceeeesessssesee oo

Founding Church of Scientology v. United States,

409 F.2d 1146 (D.C. Cir.), cert. denied, 396 U.S.

963 (1969) 2

Fowler v. Rhode Island, 345 U.S. 67 (1953) ..cceecccoossoom 25

Gillette v. United States, 401 U.S. 437 (1971) —........... 25

Herman & MacLean v. Huddleston, 459 U.S. 375

(1983) 16

Huddleston v. Dwyer, 322 U.S. 232 (1944) 23

International Tel. & Tel. Corp. v. General Tel. &

Elecs. Corp., 518 F.2d 913 (9th Cir. 1975) WW... 20

Kaushal v. State Bank of India, 556 F. Supp. 576

(N.D. Ill. 1983) 10

Lauf v. E.G. Shinner & Co., 303 U.S. 323 (1938) ........... 20

Lockerty v. Phillips, 319 U.S. 182 (1943) 20

Marshall Field & Co. v. Icahn, 537 F. Supp. 413

(S.D.N.Y. 1982) 11

McCray v. New York, 461 U.S. 961 (1983) 11

McDaniel v. Paty, 435 U.S. 618 (1978) 25

Merrill Lynch, Pierce, Fenner & Smith v. Curran,

456 U.S. 353 (1982) i a 18

Middlesex County Sewerage Auth. v. National

Sea Clammers Ass’n, 453 U.S. 1 (1981) 16

Miller v. Affiliated Fin. hie 600 F. Supp. 987

(N.D. Ill 1984) 10

vi

TABLE OF AUTHORITIES—Continued

Page

National Labor Relations Bd. v. Henricks County

Rural Elec. Membership Corp., 454 U.S. 170 (1981) 2.

National R.R. Passenger Corp. v. National Ass’n

of R.R. Passengers, 414 U.S. 453 (1974) 2 ... 20

North Haven Bd. of Educ. v. Bell, 456 U.S. 512 (1982) 18

Northwest Airlines, Inc. v. Transport Workers

Union, 451 U.S. 77 (1981) 16

Presbyterian Church v. Hull Church, 393 U.S. 440

SD so sininbasosperenihapeieeaiciebinattmsedibaahds ela ca cts aaa edhe 26

Purcell v. Summers, 145 F.2d 979 (4th Cir. 1944) 23, 24

Ruhlin v. New York Life Ins. Co., 304 U.S. 202 (1938) 24

Securities & Exch. Comm’n v. Sloan, 4386 U.S. 103

(1978) 21

Sedima, S.P.R.L. v. Imrex Co., 741 F.2d 482 (2d

Cir. 1984), rev’d, 473 U.S. 479, 105 S. Ct. 3275

(1985) : passim

Sprague v. Ticonic Nat’! Bank, 307 U.S. 161 (1939) .... 20

Texas Indus. v. Radcliff Materials, Inc., 451 U.S.

630 (1981) 18

Texas v. Mead, 465 U.S. 1041 (1984) 00 23

T.I.M.E. Inc. v. United States, 359 U.S. 464 (1959) 20

Touche Ross & Co. v. Redington, 442 U.S. 560 (1979) ..18, 21

Trane Co. v. O’Connor Sec., 718 ¥.2d 26 (2d Cir.

NOY incssnenninsnsnscscinliecbia ah itl ca latent aici 9

United States v. Johnston, 268 U.S. 220 (1925) 0. 23

United States v. Rutherford, 442 U.S. 544 (1979) 18

United States v. Shannon, 342 U.S. 288 (1952) li

USACO Coal Co. v. Carbomin Energy, Ine., 539

F.Supp. 807 (W.D. Ky.), aff’d on other grounds,

GRP Fe 98 CORN CAR. SEE weceinetenceeedn. 19

TT |

Vil

TABLE OF AUTHORITIES—Continued

Page

Van Schaick v. Church of Scientology, 535 F.

Supp. 1125 (D. Mass. 1982) 12

Vietnamese Fisherman’s Ass’n v. Knights of Ku

Kluz Klan, 518 F. Supp. 993 (S.D. Tex. 1981) _... 1]

Wainwright v. City of New Orleans, 392 U.S. 598

( 1968) 13

STaTUTES AND RuLEs

18 U.S.C. § 1964(a) 15, 16

18 U.S.C. § 1964(b) 15, 16

18 U.S.C. § 1964(c) 16

S. Ct. Rule 17.1(a) 10

MISCELLANEOUS

R. Stern, E. Gressman & S. Shapiro, Supreme

Court Practice 4 4.8 (6th ed. 1986) 00 10

The Report of the Ad Hoc Cwil RICO Task Force

of the ABA Section of Corporation, Banking and

Business Law (1985) 12, 19, 22

pee Pk | ea 17,19

H.R. 4892, 99th Cong., 2d Sess. 5 (1986) 19

ARTICLES

Blakey & Gettings, Racketeer Influenced And

Corrupt Organizations (RICO): Basie Con-

cepts—Criminal and Civil Remedies, 53 Temple

L.Q. 1009 (1980) . 21

eee |

TABLE OF AUTHORITIES—Continued

Bridges, Private RICO Litigation Based Upon

‘Fraud in the Sale of Securities’’, 18 Ga. L. Rev.

43 (1983) 2]

Fricano, Civil RICO: An Antitrust Plaintiff’s

Considerations, 52 Antitrust L.J. 361 (1983) ................ wee

Long, Treble Damages for Violations of the Fed-

eral Securities Laws: A Suggested Analysis

and Application of the RICO Ciwil Cause of Ac-

tion, 85 Dickinson L. Rev. 201 (1981) oo eh

Note, Civil RICO: The Temptation and Impro-

priety of Judicial Restriction, 95 Harv. L. Rev.

1101 (1982) EEE GP SS a 21

Weissman, In the High Stakes Game of Civil

RICO, Can Private Claimants Raise the Ante

Even Further with Claims for Equitable Relief?

gS Ee 21

No. 86-1123

4.

Vv

In The

Supreme Court of the United States

October Term, 1986

ry

Vw

RELIGIOUS TECHNOLOGY CENTER, a California

corporation, and CHURCH OF SCIENTOLOGY IN-

TERNATIONAL, INC., a California corporation,

Petitioners,

JON ZEGEL, an individual; DAVID MAYO, an individ-

ual; CHURCH OF THE NEW CIVILIZATION (dba

ADVANCED ABILITY CENTER), a California cor-

poration,

Respondents.

ry

Vv

BRIEF IN OPPOSITION TO PETITION

FOR WRIT OF CERTIORARI

STATEMENT OF THE CASE

A. THE FACTS

This case involves a religious dispute between two

factions of the Scientology religion. Petitioners’ complaint

alleges that Respondents are ‘‘apostates and enemies of

the religion of Scientology’’ who were engaged in ‘‘an

apparent scheme to confuse or spread spiritual injury

among Scientologists. ’’

2

Petitioners are the Religious Technology Center

(‘*RTC’’) and its ‘‘Mother Church,’’ the Church of Scien-

tology International, Inc. RTC views itself as ‘‘the pro-

tector of the Religion,’’ responsible for maintaining ‘‘the

purity and ethical use of the technology [religious doc-

trine], and for the protection and proper delivery of the

Advanced Technology.’’

Respondents are the Church of New Civilization, its

founder, David Mayo, and one of its former officials,

Jon Zegel. Prior to founding the Church of New Civiliza-

tion, Mayo was a high ranking member of the Church

of Scientology for nearly 25 years. His duties included

‘‘auditing’’ and technical research and writing.

Scientology is a religion of ‘‘auditing.’’ An ‘‘audi-

tor’’ puts an individual through a series of procedures;

the individual’s responses are noted by use of an elec-

tronic metering device; further procedures are applied;

and ultimately the individual rids his/her unconscious

mind of ‘‘engrams,’’ traumatic impressions previously

recorded in this or earlier lives. See generally Founding

Church of Scientology v. United States, 409 F.2d 1146,

1151-54 (D.C. Cir.), cert. denied, 396 U.S. 963 (1969). The

auditing process is the ‘‘technology’’ of the religion, and

the writings that set forth that ‘‘religious philosophy and

spiritual healing technology comprise the scriptures of

the religion.’’

Petitioners believe that parishioners must advance

through the auditing process in defined stages and that

religious harm is caused if the advanced religious doc-

trine is disclosed ‘‘at an improper stage.’’ Petitioners

say that for that religious reason and to preserve ‘‘the

purity of the technology,’’ not for any commercial pur-

3

pose, the advanced doctrine is kept confidential. This case

concerns the advanced religious doctrine contained in

scriptures known as the ‘‘NOTS pack.”’

Mr. Mayo developed the NOTS materials in 1978, in

the course of a series of auditing sessions of Mr. Hubbard.

Mr. Mayo thereafter extensively used the NOTS material

for years in the course of his religious duties.

In 1982-83 there were disagreements among the lead-

ers of the Church of Scientology, and the Church purged

itself of dissidents. Mr. Mayo was one of them. He was

kept under guard for six months, and he was told that

he would be excommunicated unless he confessed that his

criticisms were ill-advised, that he was a government

‘‘plant’’ and that he had committed alleged crimes. He

refused. He was then declared to be an enemy of the

church and excommunicated.

Following his excommunication, in July 1983, Mr.

Mayo established the Church of the New Civilization,

which provides religious counseling and training similar

to that provided by the Church of Scientology. Mr. Mayo

and others created a set of upper level scriptures for the

new church. Respondents’ witnesses swore that that ma-

terial came from a variety of sources and from memory.

Respondents began using their advanced scriptures in

August 1983, and they had provided advanced religious

instruction according to those scriptures for two years

before the district court enjoined them from doing so.

In December 1983, three NOTS packs were stolen

from an affiliate of Petitioners in Denmark. Contrary

to Petitioners’ statement (Pet. 6), there is no evidence—

none—that Respondents aided or participated in that

‘

4

theft, knew of it in advance or had anything to do with it.

Moreover, the stolen physical property was returned to

Petitioners by those who took it, and it is not involved

in this case.

B. PRIOR PROCEEDINGS

On November 1, 1985, in a state court action against

the Church of Scientology in which these Respondents are

not involved, the court denied Petitioners’ request to seal

that court’s records containing some of the scriptures

involved here. Petitioners filed this action three days

later. i

Petitioners alleged that Respondents’ religious scrip-

tures were copied from the stolen NOTS packs, that Re-

spondents were about to improperly disclose those scrip-

tures to others and that disclosure would ‘‘confuse or

spread spiritual injury among Scientologists.’’ They

asked the district court to restrain Respondents, the plain-

tiff in the state court action, his counsel, and others from

making any public disclosure of the scriptures or using

them in any way. Mr. Mayo denied under oath that the

NOTS materials had been copied and swore that Respon-

dents never had and ‘‘didn’t want’’ Petitioners’ materials.

The district court granted Petitioners’ request for a

temporary restraining order, but denied their motion for

a preliminary injunction. Petitioners then renewed their

motion and the court issued the preliminary injunction on

November 23, 1985.!

. Petitioners had previously brought another action against

Respondents in January 1985, alleging essentially the same re-

ligious trade secret claims as are alleged here. Religious Tech-

nology Center v. Robin Scott, No. 85-711 (C.D. Cal.) Petitioners

have never moved for an injunction in that case.

oe

see =

pa

1. The District Court’s Decision

There was no direct evidence to support the issuance

of the preliminary injunction (or, indeed, any claim at all)

against Respondents. Instead, the injunction was issued

because the district court disbelieved Mr. Mayo’s sworn

testimony. It did not ‘‘believe’’ that ‘‘anyone, even Mr.

Mayo”’ could have produced the religious teachings in

Respondents’ scripiures without reference to the stolen

documents. Therefore, the court concluded: ‘‘I think

that probably prima facie there is a RICO case here based

on the idea that the documents were stolen and that they

found their way into their present use.’’ The court also

concluded that the religious teachings in the documents

were trade secrets under California law and that Petition-

ers would suffer irreparable religious injury from ‘‘any

inadequately supervised disclosure of and use of the ma-

terials.’’ (App. p. 8)

Accordingly, the court issued a broad preliminary

injunction requiring Respondents to deliver their own

religious materials to the court and prohibiting them

from using, distributing, exhibiting or in any manner

publicly revealing any and all originals, copies, re-

typings, recastings, variations of or altered versions

of all confidential religious scriptures ... or the con-

tents thereof ....

(Id. at 3)

2. The Court of Appeals’ Decision

The court of appeals reversed the injunction. Al-

though it noted the serious first amendment issues cre-

ated by an injunction that prevents one religious faction

6

from,,teaching religious doctrine claimed to be ‘‘owned’’

by another, 796 F.2d at 1089 n.15, it did not rest its deci-

sion on constitutional grounds. Instead it held that (1)

civil RICO does not authorize injunctive relief and (2)

as a matter of state law, the religious scriptures in dis-

pute are not legally protectable trade secrets. 796 I*.2d

1076 (9th Cir. 1986).

The court of appeals then denied petitions for rehear-

ing and rehearing en banc (App. pp. 81-82) and a motion

for a stay of its mandate. Petitioners did not seek a stay

from this Court.

fy.

m4

SUMMARY OF ARGUMENT

1. Petitioners contend that this Court should grant

certiorari ‘‘based on a conflict of decisions among the

circuits on the availability of injunctive relief to private

plaintiffs under the RICO Act, and the overall import-

ance of this issue.’’ (Pet. 10) Petitioners’ contention is

wrong. The Court should deny the petition because:

a. There is no conflict in the circuits.

b. This religious dispute is a RICO case in name

only; it is not an appropriate vehicle for deciding the

propriety of private injunctive relief under RICO.

ce. The question of private injunctive relief under

RICO is not an important issue on which this Court should

spend its time. In fact, the question rarely arises because

RICO liability is purely derivative and injunctive relief

is available based on the underlying predicate claims—

“if those claims have merit.

7

d. The decision below was correct; the statutory

language and legislative history make clear that RICO

does not give private parties an extra basis for seeking

injunctive relief.

2. Petitioners also contend that the Court should

grant certiorari ‘‘to reverse the Ninth Circuit’s first im-

pression ruling that religious materials, merely because

they are owned by non-profit religious organizations, are

not protectable under the California Trade Secret Act.’’

(Pet. 10-11) This contention is wrong for two reasons:

a. The court of appeals made no such ruling. It

held only that the religious scriptures involved in this

case did not have the independent economic value neces-

sary to qualify as a protectable trade secret under state

law.

b. Neither the court of appeals’ interpretation of

state law nor Petitioners’ factual arguments presents any

constitutional question or any other issue of interest to

this Court.

>)

REASONS FOR DENYING THE WRIT

I. THE DECISION THAT RICO DOES NOT AU-

THORIZE PRIVATE INJUNCTIONS DOES

NOT WARRANT THIS COURT’S REVIEW

A. THERE IS NO CONFLICT IN DECISIONS

1. The Courts of Appeals

Petitioners say the decision below conflicts with other

circuit decisions. (Pet. 10, 23-32) This is not true. The

8

Ninth Circuit found that this was ‘‘a matter of first im-

pression for an appellate court.’’ 796 F.2d at 1082. And

so it is. Petitioners refer to three cases. None conflicts

with this one.

Petitioners concede that Bennett v. Berg, 685 F.2d

1053, 1064 (8th Cir. 1982), aff’d on rehearing en banc,

710 F.2d 1361, cert. denied, 464 U.S. 1008 (1983), ‘‘did not

decide’’ whether equitable relief is available to private

plaintiffs. (Pet. 26)

Petitioners nevertheless argue that in Bennett, ‘‘the

Court determined that [‘legal writers’] had concluded that

equitable relief was available.’’ (Pet. 26-27) If the court

had made such a determination that, of course, still would

not present any conflict in decisions by the courts of ap-

peals. But it did no such thing; instead, the court simply

‘‘note[d] for the information of the parties and the dis-

trict court such scholarship as [it] ha[d] discovered.’’

685 F.2d at 1064. That consisted of a single law review

article, and overlooked the wealth of commentary support-

ing the decision below in this case. (Infra p. 21 n.9)?

Petitioners alse cite Aetna Casualty & Sur. Co. v.

Liebowitz, 730 F.2d 905 (2d Cir. 1984) (Pet. 25), but it

does not conflict with the decision below, either. Aetna

concerns the propriety of attorney’s fees in a RICO ac-

tion that had been settled after a preliminary injunction

was issued. The district court held that ‘‘analysis of

whether plaintiff was entitled to injunctive relief under

2 Petitioners also rely on the concurring paragraph of a

single judge on rehearing en banc, 710 F.2d at 1365-66, to as-

sert a conflict with the decision below. One judge’s sentiment

hardly suggests a conflict in the circuits.

§ 1964 is not ... necessary for a determination of this

[attorneys’ fees] motion,’’ 570 F. Supp. 908, 910 (E.D.

N.Y. 1983), and noted that the issue ‘‘appears at least

to be an open question.’’ Id. at 911. Similarly, the Sec-

ond Circuit addressed injunctive relief only long enough

to presage the Ninth Circuit: civil RICO ‘‘does not re-

fer to injunctive relief.’’ 730 F.2d at 909.

Moreover, even if Aetna held what Petitioners con-

tend it did, that is not the definitive Second Circuit view.

In Trane Co. v. O’Connor Sec., 718 F.2d 26, 28 (2d Cir.

1983), another Second Circuit panel said that ‘‘courts

which have confronted the issue have expressed serious

doubt concerning the propriety of granting injunctive re-

lief under any circumstances to private parties.... We

have the same doubts.’’ And still another Second Circuit

panel in Sedima, S.P.R.L. v. Imrex Co., 741 F.2d 482, 489

n.20 (2d Cir. 1984), rev’d on other grounds, 473 U.S. 479,

105 §. Ct. 3275 (1985), found it ‘‘altogether likely that

§ 1964(¢c) as it now stands was not intended to provide pri-

vate parties injunctive relief.’? Thus, Aetna creates no

conflict in the circuits because it is not the law of any cir-

cuit. See Davis v. United States, 417 U.S. 333, 340 (1974).

Petitioners’ reference te Dan River, Inc. v. Icahn, 701

F.2d 278, 290 (4th Cir. 1983) (Pet. 28), is difficult to un-

derstand, for they concede that the court there used the

same analysis as the court of appeals here and found

‘‘substantial doubt’? that RICO grants private parties

equitable relief. Thus, Dan River supports the decision

below.

In short, there is no conflict among the circuits.

ite

10

2. The District Courts

A conflict in decisions between a court of appeals and

a district court or between district courts is not a basis

for this Court’s review. S.Ct. Rule 17.1(a); R. Stern, E.

Gressman & §. Shapiro, Supreme Court Practice § 4.8

(6th ed. 1986).

Moreover, only one district court has held even argu-

ably contrary to the Ninth Circuit. Chambers Dev. Co.

v. Browning-Ferris Indus., 590 F. Supp. 1528, 1540-41

(W.D. Pa. 1984) (Pet. 31). As Petitioners concede, the

Chambers court simply ‘‘declined to strike a prayer for

equitable relief’’; nothing more. (Pet. 31) Moreover,

Chambers rests on RICO’s ‘‘remedial purpose,’’ id. at

1540—a purpose that does not support the implication

of private injunctive relief. See infra p. 21.

Petitioners try to explain away the fact that every

other district court decision on point comports with the de-

cision below by saying each ‘‘was decided prior to this

Court’s decision in Sedima.’’ (Pet. 31) But Petitioners do

not explain why that matters, and it does not. Sedima’s

approach to statutory interpretation was precisely the one

followed by the court of appeals here: RICO should be ap-

plied as Congress wrote it and not judicially rewritten.

Sedima, 105 S.Ct. at 3287. In any event, the fact remains

that the few district court decisions addressing the issue

are consistent with the opinion below. See Miller v. Af-

filiated Fin. Corp., 600 F.Supp. 987, 994 (N.D. Til. 1984) ;

DeMent v. Abbott Capital Corp., 589 F.Supp. 1378, 1382-

83 (N.D. IL 1984); Kaushal v. State Bank of India, 556

11

F.Supp. 576, 581-84 (N.D. Ill. 1983); Ashland Oil, Inc. v

-Gleave, 540 F. Supp. 81, 84-86 (W.D.N.Y. 1982).

Thus, there is no meaningful conflict in decisions on

the question Petitioners tender. The question has not yet

reached any other court of appeals, and the dicta so far

solidly support the court of appeals’ decision here. In

these circumstances, this Court should decline to review the

issue. See, e.g., McCray v. New York, 461 U.S. 961, 962

(1983) (Stevens, J.) (‘‘further consideration of the sub-

stantive and procedural ramifications of the problem by

other courts will enable us to deal with the issue more wise-

ly at a later date’’).

B. THIS IS NOT THE CASE TO DECIDE

WHETHER RICO AUTHORIZES PRIVATE

INJUNCTIONS

If this Court wishes to decide whether RICO authorizes

private injunctions, it should do so in a case that has at

least some relation to the matters RICO typically con-

cerns. This is not that case, to say the least. See United

States v. Shannon, 342 U.S. 288, 294 (1952) (Frankfurter,

J.) (urging dismissal of writs because ‘‘they were legal

sports. Each presents a unique set of circumstances.

Neither is likely to recur; both are individualized in-

stances’’).

RICO has been applied in two major categories; this

ease presents neither. First, as Petitioners acknowledge, a

3 Both Marshall Field & Co. v. Icahn, 537 F. Supp. 413, 420

(S.D.N.Y. 1982) and Vietnamese Fisherman’s Ass’n v. Knights of

Ku Klux Klan, 518 F. Supp. 993, 1014 (S.D. Tex. 1981) (Pet. 32),

denied injunctive relief Giceune there was no “likelihood of

success.” Neither court reached the issue raised here.

12

‘‘primary objective of RICO [is] to curtail organized

crime.’’ (Pet. 15) There is not even a hint of organized

crime here.

Second, forty percent of the published civil RICO deci-

sions alleged securities fraud and thirty-seven percent com-

mon law fraud in a business or commercial setting. The

remaining twenty-three percent include a variety of mat-

ters including traditional organized crime activities, anti-

trust and bribery. Sedima, 105 8. Ct. at 3287 at n.16 (citing

The Report of the Ad Hoc Civil RICO Task Force of the

ABA Section of Corporation, Banking and Business Law

55-56 (1985) (‘‘ABA Report’’)). This dispute between

religious factions over the use of religious doctrine is the

antithesis of those casés.*

In short, RICO is neither designed for nor typically

arises in the context of a religious dispute, and the facts

and issues in this case are sui generis. Therefore, to use

this case to resolve the need for and availability of private

¢ Two cases did involve religious disputes, ABA Report,

p. 56 n.61; neither was anything like this one. Congregation

Beth Yitzhok v. Briskman, 566 F. Supp. 555, 557 (E.D.N.Y. 1983),

involved a battle over the disposition of property belonging to

a deceased rabbi. The court correctly noted “[t]he core of

this litigation is an internecine dispute between rival religious

factions. If there can be a case that should not be covered by

the RICO statute, this is it.’ The court held that it could not

adjudicate the controversy “without first wading deeply (and

impermissibly) into religious issues,” id. at 558; it therefore de-

—_ an injunction aot dismissed the case for want of justici-

ability.

The second case, Van Schaick v. Church of Scientology, 535

F. Supp. 1125, 1135-39 (D. Mass. 1982) dismissed the RICO

claims on pre-Sedima grounds, but also noted, on Petitioners’

affiliates’ urging, that RICO might not apply to religious en-

tities.

13

injunctive relief under RICO would be inappropriate and

even unfair to other litigants who face the issue in typical

RICO settings.

Indeed, this case may not even present the question

Petitioners assert, because, in fact, there is no genuine

RICO claim here. RICO was an afterthought, raised only

to confer federal jurisdiction. 796 F.2d at 1080 n.4. The

lone basis for RICO is the district court’s highly dubious

refusal to believe that Respondents, who created the NOTS

materials and had used them for years, could reproduce

them without copying from stolen documents they swore

they never saw. And, as the Ninth Cireuit recognized,

“‘fi]t is not clear whether [Petitioners’ alleged] injury is

sufficient to allow the Church to press even a civil RICO

damages action.’’ Jd. at n.6.

Finally, even if this case were representative of RICO

litigation, the record contains only the evidence that was

compiled during the preliminary injunction hearing. The

important factual issues, including those concerning the

alleged conspiracy, are still to be resolved at the impending

trial on the merits. Thus, this case does not present the

kind of record that the Court can best utilize to evaluate

the injunction question in a concrete context. See Estelle

v. Gamble, 429 U.S. 97, 115 (1976) (Stevens, J., dissenting)

(‘‘the crude allegations of this complaint do not provide the

kind of factual basis the Court normally requires’’) ; Wain-

wright v. City of New Orleans, 392 U.S. 598 (1968) (Har-

lan, J., concurring in dismissal of certiorari) (‘‘I find this

record too opaque to permit any satisfactory adjudication

of that question’’) ; Ellis v. Dixon, 349 U.S. 458, 464 (1955)

(dismissing certiorari because ‘‘[e]ven if we were to look

at the matter ourselves de novo, we could not on this vague

14

and empty record decide the . . . issues sought to be pre-

sented’’).

C. THIS CASE DOES NOT PRESENT IM.-

PORTANT QUESTIONS

Unable to demonstrate a conflict in the circuits, Peti-

tioners argue that the question of private injunctive relief

under RICO is important, ‘‘obviously, .. . of national sig-

nificance.’’ (Pet. 13) Petitioners overstate their case.

First, the question of injunctive relief arises far less

often than Petitioners would have the Court believe. Over

270 RICO decisions have been published (Sedima, 105 8. Ct.

at 3287 n.16) and the number of claims is undoubtedly much

larger, yet only a dozen have even raised an injunction

question. (Supra pp. 8-11)

Second, Petitioners’ unhappiness with the doctrine of

pendent jurisdiction is no ground for this Court to grant

certiorari in this case. They argue that ‘‘[t]he existence

of pendent party jurisdiction ... [is] a subtle and complex

question’’ (Pet. 17), and that ‘‘in light of some district

courts’ hostility to RICO, that uncertainty [over pendent

jurisdiction] may altogether too often be resolved by

throwing out the pendent claims.’’ (Pet. 17-18) If true,

that is no different than any other case where, if a district

court errs, it can be corrected. That is no basis for review

here.

Moreover, Petitioners’ fears have nothing to do with

this case. The district court in this case accepted the

pendent state trade secrets claim, reviewed state law and

made a decision on both the RICO and the pendent state

15

claim. (App. pp. 9-11) This Court should hardly review

this case because in some future case a district court might

improperly fail to do what this district court did.

Third, Petitioners’ fear of the ‘‘specter (sic) of incon-

sistent results’’ and forum shopping is misplaced. (Pet.

20-21) Their argument is premised either on a conflict that

4 does not exist (supra pp. 7-11) or on the diversity of state

| laws that is inherent in our federal system. Neither is a

7 reason for certiorari.

D. THE DECISION BELOW WAS CORRECT

This is not the occasion to argue the merits, but be-

cause Petitioners rely primarily on their substantive views

(Pet. 33-45), we respond briefly. The court of appeals con-

ducted a scholarly and extensive analysis of RICO’s lan-

guage and legislative history and concluded that RICO does

not authorize private injunctions. Both the analysis and

the conclusion are sound.

1. Statutory Language

Petitioners say a ‘‘dispassionate reading’’ of RICO

‘‘leads ineluctably’’ to the conclusion that Section 1964 in-

cluded equitable relief for private parties. (Pet. 33) In

fact, no reading of Section 1964—passionate or otherwise—

will uncover any mention of private equitable relief.

The remedies for violations of RICO are contained in

Section 1964. Section 1964(a) is a general jurisdictional

grant. Section 1964(b) specifically authorizes injunctive

relief, but only in actions brought by the Attorney General.

This Court has recognized that neither sub-section (a) nor

sub-section (b) provides any private remedy:

16

The civil remedies in the bill passed by the Senate, S.

30, were limited to injunctive actions by the United

States and became §{§ 1964 (a), (b), and (d).

Sedima, 105 8. Ct. at 3280.

The only other remedial provision is Section 1964(c),

which provides:

Any person injured in his business or property by

reason of a violation of section 1962 of this chapter

may sue therefor in any appropriate United States

district court and shall recover threefold the damages

he sustains and the cost of the suit, including a rea-

sonable attorney’s fee.

18 U.S.C. § 1964(c) (1984). That language not only omits

any provision for private injunctive relief, it is the same

language that Congress knew had been definitively inter-

preted to exclude injunctive relief under the antitrust laws.

See 796 F.2d at 1086-87.

Thus, Congress enacted a detailed remedial scheme

that pointedly omits any private injunctive remedy. To

imply such a remedy would be contrary to established prin-

ciples of statutory interpretation.’ See 796 F.2d at 1087-

88 & n.14; Middlesex County Sewerage Auth. v. Na-

tional Sea Clammers Ass’n, 453 U.S. 1, 15 (1981) (‘‘Con-

gress provided precisely the remedies it considered appro-

priate’’); Northwest Airlines, Inc. v. l'ransport Workers

Unton, 451 U.S. 77, 97 (1981) (‘‘The presumption that a

remedy was deliberately omitted from a statute is strong-

5 Herman & Maclean v. Huddleston, 459 U.S. 375, 386

(1983) (Pet. 37) does not reject expressio unius est exclusio

alterius. There the Court found evidence of a specific congres-

sional intent to cumulate remedies.

17

est when Congress has enacted a comprehensive legisla-

tive scheme including an integrated system of procedures

for enforcement’’).

Thus, there is nothing in the language of the statute

authorizing private injunctions.

2. Legislative History

Petitioners complain that the Ninth Circuit looked to

legislative history. (Pet. 35) But since there is no author-

izing statutory language, private injunctions under RICO

could be judicially created only on the basis of supporting

legislative history. That history, however, makes clear

that Congress did not intend to authorize private injunctive

relief. First, although several pre-RICO bills provided for

private injunctive relief, none was enacted. See 796 F.2d

at 1084.

Second, an amendment that would have expressly pro-

vided for private injunctions was presented, but was not

enacted. Jd. at 1084-85. Petitioners argue that the amend-

ment proposing private injunctive relief ‘‘was withdrawn,

not defeated.’’ (Pet. 42) But that does not matter. It was

withdrawn for the very reason Petitioners deny here: be-

cause ‘‘[i]t does offer an additional civil remedy’’ that

Congress was not prepared to adopt without further con-

sideration. 796 F.2d at 1086. See 116 Cong. Ree. at 35,346

(1970).

Third, in the first session of Congress after RICO

was enacted, unsuccessful efforts were made to add a pro-

vision giving private parties the right to seek injunctive

relief. 796 F.2d at 1086. Petitioners argue that ‘‘the

views of a subsequent Congress form a hazardous basis for

18

inferring the intent of an earlier one’’ (Pet. 44), but this

is not evidence of Congress’ original intent; it is proof that

Congress recognized that RICO does not now contain in-

junctive relief. See, e.g., North Haven Bd. of Educ. v. Bell,

456 U.S. 512, 530-35 (1982); Texas Indus. v. Radcliff

Materials, Inc., 451 U.S. 630, 645 (1981) (‘‘the continuing

existence of this statutory scheme for 90 years without

amendments authorizing contribution is not without signifi-

eance’’); United States v. Rutherford, 442 U.S. 544, 554

n.10 (1979) (where ‘‘construction has been ‘fully brought

to the attention of the public and the Congress,’ and the

latter has not sought to alter that interpretation . . . then

presumably the legislative intent has been correctly dis-

cerned’’) (quoting Apex Hosiery Co. v. Leader, 310 U.S.

469, 489 (1940).

Thus, the legislative history confirms the statutory

language: Congress intentionally omitted any provision

for private injunctive relief.®

3. Policy

Finally, Petitioners submit that RICO should include

private injunctive relief. But:

a. That is not the issue. The issue is whether it

does. Touche Ross & Co. v. Redington, 442 U.S. 560, 578

6 Petitioners argue that RICO’s liberal construction clause

precludes examination of the legislative history, citing Brown

v. Barry, 3 U.S. (2 Dall.) 365, 367 (1797) (Pet. 36). Brown merely

states the obvious point that legislative intent prevails over

abstract rules of construction. That is all the more reason to

examine what Congress intended.

Furthermore, Petitioners’ own cases confirm that ‘Con-

gress’ perception of the law that it was shaping” is determina-

tive. Merrill Lynch, Pierce, Fenner & Smith Inc. v. Curran, 456

U.S. 353, 378 (1982). (Pet. 29-30 n.5)

siceneniacsssnie Bs

19

(1979) (‘‘The ultimate question is one of congressional in-

tent, not one of whether this Court thinks that it can im-

prove upon the statutory scheme that Congress enacted

into law’’); Sedima, 105 8S. Ct. at 3287 (warning against

‘‘statutory amendment [in]Jappropriately undertaken by

the courts’’). Furthermore, if amendment is desirable,

Congress is the place to make it, and Congress is actively

considering that suggestion. In the last session of Con-

gress alone, at least eleven RICO bills were introduced, one

of which would specifically add a private right of injunc-

tive relief. H.R. 4892, 99th Cong., 2d Sess. 5 (1986). This

Court should not preempt that congressional decision mak-

ing.

b. Congress’ initial decision makes sense. Its provi-

sion of a treble damages remedy but not injunctive relief

was carefully tailored to the situation.’ As the ABA Re-

port determined, ‘‘it is difficult to conclude that a genuine

need for equitable relief cannot be met adequately through

traditional equitable actions under state law. This being

the case, there seems little reason to expand Civil RICO

beyond its express terms to provide a further avenue for

such relief.’’ (ABA Report, pp. 339-40) (citations omitted).

See, e.g., USACO Coal Co. v. Carbomin Energy, Inc., 539

F.Supp. 807, 814-16 (W.D. Ky.), aff’d on other grounds,

. See, e.g., 116 Cong. Rec. at 35,346 (1970) (quoted at 796

F.2d at 1086) (‘prudence would dictate that the Judiciary Com-

mittee very carefully explore the potential consequences that

this new remedy might have in all the ramifications which this

legislation contains’). Thus, as the court below noted, “[i]t

may be that in drawing the line beiween private equitable re-

lief and private damages, Congress wished to preclude federal

courts from interfering with the day-to-day running of businesses

at the behest of what might be only a disgruntled competitor.”

796 F.2d at 1088.

20

689 F.2d 94 (6th Cir. 1982) (granting injunction on pendent

state claims). Thus, because RICO liability is always de-

rivative from the predicate criminal acts, injunctive relief

is available—if the merits support it—in virtually every

case.®

Nor is Congress’ limitation on the available remedies

peculiar to RICO. To the contrary, it has imposed similar

limitations under many other statutes. See, e.g., National

R.R. Passenger Corp. v. National Ass’n of R.R. Passengers,

414 U.S. 453, 456-65 (1974) (no private injunctions under

Amtrak Act) ; 7.1.M.E. Inc. v. United States, 359 U.S. 464,

470-71 (1959) (Interstate Commerce Act); Lockerty v.

Phillips, 319 U.S. 182, 186-89 (1943) (upholding provision

of Emergency Price Control Act withholding lower court

authority to enjoin enforcement) ; Sprague v. Ticonic Nat’l

Bank, 307 U.S. 161, 164-65 (1939) (Congress may modify

courts’ equitable jurisdiction) ; Lauf v. E.G. Shinner & Co.,

303 U.S. 323, 329-30 (1938) (upholding Norris-La Guardia

Act denial of injunctive relief); Cell Assocs., Inc. v. Na-

tional Instits. of Health, 579 F.2d 1155, 1159-60 (9th Cir.

1978) (denying injunctive relief under Privacy Act which

limits private plaintiff remedies to damages, costs and at-

torney’s fees); International Tel. & Tel. Corp. v. General

Tel. & Elecs. Corp., 518 F.2d 913, 920-26 (9th Cir. 1975)

(private Clayton Act remedies limited to specifically au-

thorized equitable relief and not divestiture available to

the government); Chrisman v. Sisters of St. Joseph, 506

F.2d 308, 311 (9th Cir. 1974) (‘‘The Supreme Court has

consistently upheld restrictions placed on the ability of

s Petitioners recognize that private injunctive remedies will

be available on the pendent claims if the district court exer-

cises its discretion to accept pendent jurisdiction. (Pet. 17-18)

sonar June

21

the inferior courts to issue injunctive relief with respect to

designated causes of action’’).

ce. Petitioners’ reliance on RICO’s ‘‘remedial pur-

poses’’ (Pet. 37) misses the mark. As this Court has held:

‘*the mere fact that [the statute] was designed to provide

protection for [the plaintiff class] does not require the

implication of [an additional remedy] in their behalf.’’

Touche Ross, 442 U.S. at 578. Accord, Securities & Exch.

Comm’n v. Sloan, 436 U.S. 103, 115-16 (1978) (general ref-

erence to ‘‘statute’s remedial purposes’’ does not justify

reading Act ‘‘more broadly than its language and the stat-

utory scheme reasonably permit’’) ; Ernst & Ernst v. Hoch-

felder, 425 U.S. 185, 200-01 (1976) (rejecting construction

more consistent with ‘‘remedial purposes’’ because ‘‘the

language of a statute controls when sufficiently clear in its

context’’).°

9 Petitioners’ claim that “most’’ commentators “reject the

suggestion . . . that the statute denies to the courts the power

to grant all forms of needed relief” (Pet. 13-14 n.2) is simply

untrue. See, e.g., Weissman, In the High Stakes Game of Civil

RICO, Can Private Claimants Raise the Ante Even Further with

Claims for Equitable Relief? 1 RICO L. Rep. 234 (1984) (‘‘the

stronger arguments favor a finding that equitable relief is not

available to private RICO claimants’); Bridges, Private RICO

Litigation Based Upon “Fraud in the Sale of Securities,” 18 Ga.

L. Rev. 43, 74 (1983) (“Although some commentators and plain-

tiffs urge that RICO allows private injunctive relief, their argu-

ments are incorrect’); Fricano, Civil RICO: An Antitrust Plain-

tiff’s Considerations, 52 Antitrust L.J. 361, 374 (1983) (“argu-

ments may be made on both sides of the issue’); Note, Civil

RICO: The Temptation and Impropriety of Judicial Restriction,

95 Harv. L. Rev. 1101 (1982) (no discussion of injunctive relief);

Long, Treble Damages for Violations of the Federal Securities

Laws: A Suggested Analysis and Application of the RICO Civil

Cause of Action, 85 Dickinson L. Rev. 201 (1981) (no discus-

sion of injunctive relief); Blakey & Gettings, Racketeer Influ-

enced And Corrupt Organizations (RICO): Basic Concepts—

Criminal and Civil Remedies, 53 Temple L.Q. 1009, 1007-21,

1047 (1980) (discussion of legislative history only).

22

Petitioners also argue that the lack of a private injunc-

tion ‘‘hamstrings the statute’s effect’’ (Pet. 15) because

district courts ‘‘will be unable to utilize injunctions to cur-

tail ongoing continuing crime’’ (Jd. at 22), and private

parties won’t ‘‘even bother to sue.’’ (Jd. at 21) Peti-

tioners are just making up a problem that isn’t there.

Despite the fact that no court has issued a private RICO

injunction, there has been a wealth of RICO litigation.

Sedima, 105 S. Ct. at 3277 n.1. And, ‘‘[t]o the extent that

injunctive relief is truly needed to dissolve organized crim-

inal enterprises, the provision for equitable actions by the

Attorney General should be adequate.’’ (ABA Report,

p. 340)

II. THE CALIFORNIA TRADE SECRETS LAW

ISSUE DOES NOT WARRANT REVIEW

A. PETITIONERS MISSTATE THE D®CI-

SION BELOW

Contrary to Petitioners’ characterization, the court

of appeals did not hold that ‘‘religious materials, merely

because they are owned by non-profit religious organi-

zations, are not entitled to the protection afforded by the

California trade secrets statute.’’ (Pet. 45) Rather, the

court held only that the religious scriptures in issue ‘‘can-

not be said to have the ‘independent economic value’ nec-

essary to qualify as a protectible trade secret’’ under Cali-

fornia law. 796 F.2d at 1091. There is nothing remark-

able about that decision. It concerns only state law and

ah ea nl a alleen

ee ee

23

fact issues,’° and there is no reason why this Court should

review it.

This Court does not review matters of state law.

Brockett v. Spokane Arcades, Inc., 472 U.S. 491, —, 105

S.Ct. 2794, 2800 (1985) (‘district courts and courts of ap-

peal are better schooled in and more able to interpret the

laws of their respective States’’); Butner v. United States,

440 U.S. 48, 58 (1979) (‘‘ We decline to review the state-law

question. The federal judges who deal regularly with

questions of state law in their respective districts and cir-

cuits are in a better position than we to determine how

local courts would dispose of comparable issues’’) ; Huddle-

ston v. Dwyer, 322 U.S. 232, 237 (1944) (‘‘ordinarily we

...do not review ... the considered determination of ques-

tions of state law by the intermediate federal appellate

courts’’).

Nor does the Court grant certiorari to review factual

determinations. Texas v. Mead, 465 U.S. 1041, 1043 (1984)

(Stevens, J.); National Labor Relations Bd. v. Henricks

County Rural Elec. Membership Corp., 454 U.S. 170, 176

n.8 (1981) (improvident grant of cross-petition that pre-

sented primarily a question of fact); United States v.

Johnston, 268 U.S. 220, 227 (1925) (‘‘[wle do not grant

a certiorari to review evidence and discuss specific facts’’).

B. THERE IS NO CONFLICT IN DECISIONS

Petitioners’ attempt to create a conflict with the

Fourth Cireuit’s aged decision in Purcell v. Summers, 145

10 This is apparent from Petitioners’ effort to argue their

interpretation of California law (Pet. 47-49) and their version

of the facts. (Pet. 57)

24

F.2d 979 (4th Cir. 1944) (Pet. 11-12, 55-59), rests on their

inaccurate description of the decision below. The court

below decided only that California trade secret law did

not apply to a particular set of facts. Purcell had noth-

ing to do with either California trade secret law or these

unique facts. In Purcell, the court simply prevented a

dissident organization from using a church’s name. 145

F.2d at 981. That is entirely different from this case,

where Petitioners, in the name of religious purity, claim the

exclusive right to religious ideas. And the Ninth Circuit

explicitly said so. 796 F.2d at 1091 n.17.

Finally, even if there were a conflict, it is well settled

that ‘‘[a]s to questions controlled by state law... con-

flict among circuits is not of itself a reason for grant-

ing a writ of certiorari. The conflict may be merely cor-

ollary to a permissible difference of opinion in the state

courts.’’ Ruhlin v. New York Life Ins. Co., 304 U.S. 202,

206 (1938).

C. PETITIONERS’ CONSTITUTIONAL

CLAIMS ARE FRIVOLOUS

Petitioners’ efforts to find a federal constitutional

question in the decision below again rests on their mis-

understanding of the decision and California law. The

constitutionality of the California Trade Secrets Act was

not, and is not, in issue, and the court below did not hold

that religious organizations or materials can never receive

trade secret protection. (Pet. 50, 61-62) Again, all it

held was that the materials in issue—which happened to

be religious materials—did not have the economic value

required for trade secret protection. That raises no con-

stitutional issue.

25

Petitioners say that because the decision ‘‘directly

effects the manner in which Petitioners’ religious beliefs

are disseminated,’’ it ‘‘[t]herefore’’ violates the free ex-

ercise clause. (Pet. 63) But that assumes that Petition-

ers have a monopoly en certain religious beliefs and the

exclusive right to ‘‘exercise’’ those beliefs. No such right

exists, and Respondents’ use of the disputed scriptures

does not interfere in any way with Petitioners’ ability to

use their similar scriptures. Petitioners’ contention that

their free exercise is violated by other people holding the

same beliefs and practicing the same religion is absurd."

In fact, Petitioners’ first amendment analysis is off

by 180 degrees. It is Petitioners who threaten Respon-

dents’ right to exercise their religion, not the other way

around. As the court of appeals found, ‘‘the effect of the

injunction’s prohibition on the use of any of the higher

level materials is to curtail the religious practice of [Re-

spondents’] adherents,’’ 796 F.2d at 1089 n.15. It also

found that ‘‘the court’s review of [Petitioners’] stolen

materials and [Respondents’] documents to determine

whether essential elements have been appropriated raises

the potential for impermissible entanglement in matters

i None of Petitioners’ cases (Pet. 62) suggest how their free

exercise is implicated. See McDaniel v. Paty, 435 US.

618 (1978) (state law barring ministers from seeking office is

unconstitutional); Gillette v. United States, 401 U.S. 437 (1971)

(cited by Petitioners as Negre v. Larsen) (upholding conviction

under Military Selective Service Act against first amendment

challenge); Fowler v. Rhode Island, 345 U.S. 67 (1953) (or-

dinance prohibiting political or religious addresses in park is

unconstitutional); Follett v. McCormack, 321 U.S. 573 (1944)

(ordinance requiring booksellers to pay license fee unconsti-

tutional as applied to preacher selling religious books).

26

of religious doctrine.’’ Id.'2 Finally, ‘‘the court’s recog-

nition of ‘religious injury’ from premature unsuper-

vised exposure to Church materials as irreparable harm

justifying an injunction prompts worrisome establishment

concerns.’’ Jd. (citations omitted)

The court of appeals recognized ‘‘the significant first

amendment issues raised by the district court’s injunction”’

(Id.); thus, it wisely and properly interpreted the Trade

Secrets Act according to the legion of cases which hold

that laws are to be construed to avoid, not create, such

constitutional issues. E.g., Ashwander v. Tennessee Val-

ley Auth., 297 U.S. 288, 348 (1936) (Brandeis, J., concur-

ring) (‘‘Court will first ascertain whether a construction

of the statute is fairly possible by which the [constitu-

tional] question may be avoided’’). The court of appeals’

interpretation of state law to avoid difficult federal con-

stitutional issues was correct. There is no reason why

this Court should get into that thicket.

12 In every religious trade secret case, the court would nec-

essarily be embroiled in resolving issues concerning religious

doctrine and practice. That is because a court could not find

an infringement without determining what the religious secret

was, its religious significance, and the religious significance of

any differences between the secret as practiced by plaintiff and

defendant. Cf. Presbyterian Church v. Hull Church, 393 U.S.

440, 450 (1969).

13 The purpose of the injunction was to protect religious

teaching from purported misuse; essential to that is a deter-

mination that Petitioners are the “true” holders of the secrets

of the religion. The injunction’s effect was to give Petitioners

the exclusive right to practice and teach the upper levels of

the parties’ religion; that put the sovereign power of the court

on the side of one particular church. See First Presbyterian

Church v. United Presbyterian Church, 464 N.E.2d 454 (N.Y.),

cert. denied, 469 U.S. 1037 (1984).

27

CONCLUSION

The petition should be denied.

February 5, 1987

Respectfully submitted,

Joun R. REEse

(Counsel of Record)

Gary H. Moore

SHerri J. Conrad

Three Embarcadero Center

San Francisco, California 94111

Telephone: (415) 393-2000

Attorneys for Respondents

McCutcuen, Doy.ez,

Brown & ENERSEN

Of Counsel