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|
|Libel charges dismissed by court.
Court allowed defense to view 60-hour est organization videotape.
|Judge(s) sitting||Superior Court Commissioner Eleanor M. Palk|
|Defamation, Destructive cult, 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". The Cox campaign mailer was compared by The Orange County Register to that mailed out by the Badham campaign in the 1986 election. 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 general election and 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.
Erhard's brother campaigns for Congress
In March 1986, Erhard's brother Nathan Rosenberg announced his intention to run for congress in Orange County, California. Rosenberg had spent years volunteering for Erhard-related organizations, including both Erhard Seminars Training, and The Hunger Project,  and served in key managerial roles. Rosenberg's political opponent in the primary campaign for California's 40th congressional district was five-term incumbent member of the United States House of Representatives, Robert Badham. The Congressional Quarterly publication Politics in America described the 1986 race as "a significant primary challenge for the first time since he [Badham] initially ran for his seat". Writing in The Almanac of American Politics, authors Michael Barone and Grant Ujifusa described Rosenberg as "a fringe candidate who is the brother of est founder Werner Erhard". Rosenberg's decision to run against Badham was a move made against the Republican leadership.
Badham was critical of Rosenberg's ties to Erhard's organizations, referring to Rosenberg's run as a "tissue paper campaign". Badham stated to journalists during the campaign: "His [Rosenberg's] ties are terribly close to Erhard ... I would imagine [that Erhard's supposed promotion of his brother's candidacy] would be the outreach for power, the tenets of the est program: to create a different world by mind revolution. And that is ominous in scope." Badham described Rosenberg's campaign as a "front" for Erhard, and stated that est training techniques included "brainwashing". Badham publicized summaries of his tax returns, and requested that Rosenberg do likewise, stating "who is Nathan Rosenberg, who sent him here and where does he get his money?"
Badham characterized Erhard's organization as a "mind control group", and his campaign sent out a mailer to 130,000 households in his district comparing it to the groups led by Bhagwan Shree Rajneesh and Jim Jones. Werner Erhard and Associates filed a lawsuit against Badham regarding the mailer, Badham later retracted and publicly apologized for these statements after he was reelected, and the lawsuit was dropped.
Erhard and his brother both denied that there was anything untoward behind Rosenberg's campaign, and denied that it was influenced by Erhard or his companies. "There is no connection between my brother and his organization and this campaign," said Rosenberg. Rosenberg denied that he had ever served Erhard's organization as an "est trainer", though he had volunteered as a seminar leader for est and The Forum. Werner Erhard and Associates executive vice president Dr. Jack Mantos stated "If it becomes clear that at any point Nathan or any political candidate is subverting or using those kinds of resources, then maybe we'll put a stop to it. But at this point, it's purely coincidental that a lot of Nathan's friends have also done our programs. I am very clear that there is no corporate thrust, no corporate intent to support Nathan or any other candidate." A few weeks after Rosenberg filed his intent to run for Congress on March 7, 1986, his campaign had 200 volunteers.
An April 1986 article in the Los Angeles Times described connections between Nathan Rosenberg's campaign for Congress and Erhard's organizations. Erhard and Rosenberg's brother, Harry Rosenberg, was on leave from his position as director of the national seminar program at Werner Erhard and Associates, in order to serve as Nathan Rosenberg's campaign manager. Harry Rosenberg acknowledged to the Los Angeles Times that approximately one quarter of the campaign's 200 volunteers came from Erhard's organizations. According to data from the Federal Elections Commission, 43% of donations to Nathan Rosenberg's total of US$39,551 in campaign donations as of March 31, 1986 came from executives of Erhard's organization or individuals related to the est training or The Forum. Harry Rosenberg told the Los Angeles Times that $8,583 of the campaign contributions were given from 32 employees of Werner Erhard and Associates, and an additional $8,355 came from another 32 "volunteer seminar directors, seminar participants and one manager of The Hunger Project".
A résumé given out by Nathan Rosenberg on the day of a March 25, 1986 press conference about his political campaign neglected to include his involvement in Erhard's organizations. He later acknowledged that he had served in several roles in Erhard's organizations, including: National chairman for 300 "seminar directors", volunteer "seminar director" for both the est training and subsequently The Forum, "a very high-level volunteer" and "major contributor" and fund-raiser for The Hunger Project, and volunteer fund-raiser for the Breakthrough Foundation, a San Francisco organization founded by Erhard. When Rosenberg was asked by the Los Angeles Times why he did not initially list this information on his résumé, he asserted that these connections were not relevant.
In June 1986, Badham defeated Rosenberg in the election by a wide margin, and Badham announced his victory early when only the absentee ballots had yet been counted. Rosenberg had raised a total of $200,000 in his 1986 campaign, and received 35 percent of the vote in the Republican primary election. Rosenberg kept involved in political dealings after the campaign, serving as co-chairman of the California Young Republicans and a member of a local fund-raising organization for his political party.
After Rosenberg was defeated in the campaign by Badham, Werner Erhard appeared at a speaking event on his behalf in order to alleviate Rosenberg's campaign debt. Erhard was the guest speaker at a September 15, 1986 fund-raiser event for Rosenberg which cost $175-per-person to attend. Rosenberg stated that no one should infer from the fund-raising invitations that Erhard and his organizations had influenced his campaign. "Look, that's just absolute nonsense. That's my brother, and he's coming to a fund-raiser that I'm doing. He's going to be speaking there. And also, he's a draw. I've got $15,000 to pay off, and I got to get it paid off," said Rosenberg in an interview with the Los Angeles Times. When asked to comment on Erhard's speaking engagement at the fund-raiser, Congressman Badham described it as "confirmation" that Werner Erhard was "part and parcel of the campaign".
On January 4, 1988, Badham announced he would not seek re-election to Congress, and Nathan Rosenberg said he "is definitely looking at it". 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. Rosenberg became the first candidate to officially enter the race for the open seat for Congress on January 5, 1988. Rosenberg told The Orange County Register that follower's of Erhard would again be involved in his campaign. Rosenberg said he already had $200,000 in cash and an additional $150,000 in pledged contributions. He hired David Vaporean, Badham's campaign manager from 1986. 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."
Rosenberg ran against Christopher Cox in the 1988 race for the seat representing California's 40th congressional district. For the period of January 1 to March 31, 1988, Rosenberg's campaign had raised $195,986 to Cox's $186,082. Rosenberg's top campaign contributors included eight executives with Werner Erhard and Associates. Rosenberg also led the contenders for the 40th Congressional District in total expenses for the period. 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. "His money is est money," said a political operative in Orange County in a statement in the Sacramento Bee.
In May 1988, Cox campaign political strategist Carlos Rodriguez stated that his candidate would raise a concern regarding Rosenberg's ties to Erhard's est organization. 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, est and The Forum, and of not being fully truthful regarding his work experience. The mailer characterized Rosenberg as an "est advocate". 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". Quotations included in the mailer said "what Erhard has done is utterly disastrous". 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. The Orange County Register compared the mailer to a similar brochure sent out by Badham's 1986 campaign to voters in the district. 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." The Cox campaign also placed phone calls to voters asking for their opinions on a political candidate's links "with that cult est". A subsequent mailer sent out by the Cox campaign included an article that detailed Rosenberg's connections to Erhard's est organization. The article stated "some critical studies ... branded" est "a non- or even anti-religious cult with Eastern mystical overtones".
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." 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.
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. 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. 57 percent of voters polled were undecided. Of those that were decided, 36 percent supported Cox, while 30 percent supported Rosenberg. "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. 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."
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. 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. Jackson was a graduate of Erhard's est training, and a donor to Rosenberg's campaign. 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. Rosenberg acknowledged he knew Jackson since 1980 when the two both worked in Washington, D.C. 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. 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."
Cox gained in pre-election polls after gaining powerful supporters including William F. Buckley, Jr., Oliver North and Robert Bork. Cox won the June 7, 1988 Republican primary. 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. Cox received 31% of the vote, Baker 29%, and Rosenberg 18%. Cox went on to win the general election and become a member of the United States House of Representatives.
In June 1988, police closed an investigation into alleged jamming of the Cox campaign's phone lines by supporters of Rosenberg. "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. 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. "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. "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. Rosenberg denied knowledge about the phone jamming. "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. 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. According to the Orange County Deputy District Attorney, the phone calls were traced to a residence owned by Rosenberg supporters. The residence belonged to a developer and his wife who had each made donations of $1,000 to Rosenberg's campaign for Congress.
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. 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". Nathan Rosenberg was not a party to the suit. 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. Erhard and his company claimed that the mailer could potentially harm its "human potential" seminars, financial dealings, and other business interests in Orange County.
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." 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.
Official's for Cox described Erhard's suit as a political ploy for Rosenberg's campaign. Cox's campaign manager, Bob Schuman, defended the mailing. He described Erhard's suit as "baseless and groundless". He said the assertions it made were "factual and documented", and that its statements about the est organization were attributed to "a credible publication". 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". 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.
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.
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." Cox described the statements made in the mailings as "factual" and "issue-oriented". 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. 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."
Libel charges dismissed
On December 6, 1988, the libel portion of Rosenberg's lawsuit against Cox was dismissed. 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. Superior Court Commissioner Eleanor M. Palk ceded to the request by attorneys for Cox to dismiss the libel charge, 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. 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."
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. Erhard's attorney, William S. O'Hare, asserted that his client was vindicated by the ruling. 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".
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. She said that Cox was "absolutely thrilled" when he heard of the judge's decision to throw out the libel charge. 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. Himmelrich characterized Erhard's legal complaint as "a nuisance suit".
Slander charges dropped
On December 16, 1988, the judge in the case ruled that defense attorneys for Cox could watch a 60-hour est organization videotape. The videotape's purpose was to train instructors in the est organization on how to carry out est seminars. 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. Cox's attorneys hoped that the tape would help them to show that the est organization did have similarities to a religious cult.
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. The judge's ruling specified that only expert witnesses, Cox, and his lawyers would be able to watch the video. 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. "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.
Cox's campaign appealed the judge's decision not to dismiss the slander charges in addition to the libel charges. 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. Cox felt that the court would issue a ruling dismissing Erhard's slander charges on appeal.
On February 28, 1989, Werner Erhard chose to drop the charges of slander from his suit against Cox. 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. "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. 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. 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.
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. Daniel J. Woods, a lawyer for Cox, described the lawsuit as frivolous. "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. 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."
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. Palk also ordered Cox to pay Erhard's organization $1,000 for failing to return them.
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." On February 5, 1992, Werner Erhard and Associates filed a motion to dismiss with prejudice, titled: "Request for Dismissal - Full - With Prejudice".
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." 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."
- California's 40th congressional district
- Elections in California
- Ney v. Landmark Education Corporation and Werner Erhard
- Politics of California
- United States House of Representatives elections in California, 1986
- United States House of Representatives elections in California, 1988
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- 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.
- "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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- Christopher Cox
- Biography at the Biographical Directory of the United States Congress
- Financial information (federal office) at the Federal Election Commission
- Werner Erhard
- Friends of Werner Erhard (2009). "About Werner Erhard". www.wernererhard.com.
- Carroll, Robert Todd (2003). "est and Werner Erhard". The Skeptic's Dictionary. John Wiley & Sons.
- Nathan Rosenberg
- "ROSENBERG, NATHAN OWEN (R) - Contributions for Congress, Office: Congress, State: CA, District: 40, Last Campaign: 1988". Newsmeat. Polity Media, Inc. 2009.
- "Nathan Rosenberg". Insigniam Performance. www.insigniam.com. 2008.