Case 2:17-cv-09158-GW-SK Document 1 Filed 12/21/17 Page 1 of 11 Page ID #:1

1 RABINOWITZ~ BOUDIN, ST AND ARD,

KRINSKY & L1EB .. RMAN, LLP
2 Eric M. L ieberman (pro hac vice applied for)
61 BroadwaJ;..~uite 1800
3 New York, l"l r 10006
Telephone: 212.254.1111
4 Facsunile: 212.674.4614
5 KENDALL BRILL & KELLY, LLP
Bert H. Deixler (70614)
6 10100 Santa Monica Bfvd.0Suite 1725
Los Angeles, California 9 067
7 Telephone: 310.556.2700
Facsimile: 310.556.2705
8
Attorneys for Plaintiff
9 Church ofScientology International
10
UNITED STATES DISTRICT COURT
11
CENTRAL DISTRICT OF CALIFORNIA, WESTERN DIVISION
12
13
CHURCH OF SCIENTOLOGY Case No.
14 INTERNATIONAL,
15 Plaintiff, · COMPLAINT FOR
DECLARATORY AND
16 v. INJUNCTION RELIEF
17 LAURA ANN DeCRESCENZO, aka
LAURA A. DIECKMAN,
18
Defendant.
19
20
21
22
23
24
25
26
27
28
328422.1
COMPLAINT FOR DECLARATORY AND INJUNCTION RELIEF
Case 2:17-cv-09158-GW-SK Document 1 Filed 12/21/17 Page 2 of 11 Page ID #:2

1 1. Plaintiff Church of Scientology International ("CSI") brings this action

2 for declaratory and injunctive relief to enjoin defendant Laura DeCrescenzo
3 ("DeCrescenzo") from prosecuting a certain lawsuit ("the state court lawsuit")
4 pending in the Superior Court of the State of California, Los Angeles County ("the
5 Superior Court") entitled DeCrescenzo v. Church ofScientology International, et
6 ano., No. BC411018. The ground for this lawsuit is that a prior final judgment of
7 this court precludes DeCrescenzo from prosecuting the merits of the state court
8 lawsuit, or the state court from hearing or deciding it.
9 JURISDICTION
10 2. This case arises under Article III, Article IV, Section 1 (the Full Faith
11 and Credit Clause), and Article VI, Clause 2 (the Supremacy Clause) of the
12 Constitution of the United States; the Due Process Clause of the Fourteenth
13 Amendment to the Constitution of the United States; the All Writs Act, 28 U.S.C.
14 § 1651; the Full Faith and Credit Act, 17 U.S.C. § 1738; the third exception set forth
15 in the Anti-Injunction Act, 22 U.S.C. §2283 (permitting a federal court to issue an
16 injunction to stay proceedings in a state court "to protect or effectuate its
17 judgments"); and the Declaratory Judgment Act, 28 U.S.C. §§ 2201-2202.
18 3. This court has jurisdiction under 28 U.S.C. §1331 and §1651, as well as
19 its jurisdiction over the original action in which it rendered the judgment that
20 plaintiff seeks to enforce by bringing this action.
21 PARTIES
22 4. Plaintiff CSI is the senior ecclesiastical management church of the
23 Scientology religion. CSI is formally recognized by the Internal Revenue Service as
24 a tax-exempt charitable and religious corporation that oversees Scientology' s
25 ministering of religious and other services and overall ecclesiastical
26 management. CSI is a named defendant in the state court lawsuit pending in the
27 Superior Court.
28
328422.1
1
COMPLAINT FOR DECLARATORY AND INJUNCTION RELIEF
Case 2:17-cv-09158-GW-SK Document 1 Filed 12/21/17 Page 3 of 11 Page ID #:3

1 5. Defendant DeCrescenzo is the plaintiff in the state court lawsuit

2 pending in the Superior Court. DeCrescenzo is a former staff member of CSI, and
3 brought the state court lawsuit seeking damages for her experiences in that position.
4 Upon information and belief, DeCrescenzo is now a resident of New Mexico.
5 FACTS
6 6. On April 2, 2009, almost five years after she terminated her
7 relationship with CSI, defendant DeCrescenzo filed the state court lawsuit, alleging
8 six state law causes of action based on allegations concerning her relationship with
9 CSI from 1991-2004. Prior to CSI's response, DeCrescenzo filed her First Amended
10 Complaint ("FAC") on May 19, 2009.
11 7. DeCrescenzo's FAC alleged that she was coerced to work for CSI from
12 1991 to 2004 "at below minimum wage compensation," doing unspecified "clerical
13 and secular" work [F AC ,r 12], that she worked excessive hours without overtime
14 compensation and with insufficient time off [F AC ,r 2 7]; that throughout her
15 relationship with CSI, "she was under the undue influence of CSI and its agents"
16 [FAC ,r 39]; that CSI "blackmail[ed]" her by subjecting her to a "sec checking"
17 procedure whereby she was "interrogated on a primitive lie detector known as an e-
18 meter" [F AC ,r,r 86-87] to keep her from leaving her staff position, including by
19 threats that she would be "declared" a "suppressive person" and "an enemy of the
20 church and 'disconnected' from family and friends" [FAC ,r 25]; and that as a result
21 she would be "harassed and attacked by the Scientology enterprise." (Ibid.)
22 DeCrescenzo specifically asserted in her FAC that "for these reasons and others,
23 [CSI] should be estopped from using a statute of limitations defense to avoid or limit
24 damages." (Ibid.) DeCrescenzo alleged that she "eventually decided to leave" CSI
25 by staging a simulated suicide attempt to encourage the Church to dismiss her [F AC
26 ,r 36]. Finally, she claimed that only years after she left did she "conduct research on
27 the internet to find out what the 'religion' of Scientology is all about" [FAC ,r 42],
28 and that she "only recently learned that CSI may have a legal responsibility for its
328422.1
2
COMPLAINT FOR DECLARATORY AND INJUNCTION RELIEF
Case 2:17-cv-09158-GW-SK Document 1 Filed 12/21/17 Page 4 of 11 Page ID #:4

1 wrongful conduct and that this legal responsibility would not be destroyed or lost by
2 reason of documents [she] was coerced into signing under duress when she was
3 'offloaded' as a security risk. ... " [FAC ,r 88].
4 8. Based on these allegations, DeCrescenzo asserted various state law
5 claims, including for unfair business practices, minimum wage and maximum hour
6 violations, and intentional infliction of emotional distress. DeCrescenzo also alleged
7 that CSI coerced her to execute various releases and confidentiality agreements and
8 told her that they extinguished her legal rights. She alleged that she was
9 "coerce[ed]" into signing these documents while "under extreme duress"; that she
10 "did not freely consent" to the terms of these documents; that "[she] did not fully
11 understand the papers, or the process" [FAC ,r 37]; and that CSI misled her to
12 believe that the releases and confidentiality agreements she signed were legal [F AC
13 ,r,r 40, 51]. Finally, DeCrescenzo added a new federal claim for "human trafficking"
14 pursuant to 18 U.S.C. §§ 1589, 1593, 1595. [FAC ,r,r 71-74].
15 9. DeCrescenzo acknowledged that all her claims had accrued when she
16 left her position at CSI in April, 2004, that the statutes of limitations on all such
17 claims had begun to run upon such accrual, and that all her claims equally were
18 barred by the statute of limitations, unless tolled. Anticipating such a defense,
19 DeCrescenzo pleaded:
20 [CSI]'s deceitful and atrocious conduct should operate to equitably toll any
21 statute of limitations and equitably estop [CSI] from using time bars to escape
22 liability for an ongoing course of illegal and coercive conduct.
23 [FAC ,r 19].
24 10. Based on DeCrescenzo's allegation of a human trafficking claim
25 arising under federal statutes, CSI removed the entire action to this court, where it
26 ultimately was assigned to District Judge George H. King, now retired.
27 11. CSI moved the district court to dismiss all of DeCrescenzo's causes of
28 action in the FAC on the ground that they all were time-barred because the statutes
328422.1
3
COMPLAINT FOR DECLARATORY AND INJUNCTION RELIEF
Case 2:17-cv-09158-GW-SK Document 1 Filed 12/21/17 Page 5 of 11 Page ID #:5

1 of limitations had run on all claims from the date that DeCrescenzo acknowledged
2 such claims had accrued, that is, the date she left her position at CSL In response,
3 and as pleaded in her F AC, DeCrescenzo argued that CSI was precluded from
4 interposing a defense of statute of limitations to each cause of action by the doctrine
5 of equitable estoppel, including that CSI had misled plaintiff to believe that she had
6 waived her legal rights by signing the releases she alleged she had been coerced to
7 sign.
8 12. On November 5, 2009, Judge King held that plaintiffs federal "human
9 trafficking" claim was barred by the applicable four-year statute of limitations, and
10 dismissed that claim with prejudice and without leave to amend. Judge King
11 specifically considered and rejected DeCrescenzo's argument that equitable estoppel
12 precluded CSI from invoking the statute of limitations.
13 13. Having dismissed the federal claim, Judge King remanded the state law
14 claims to the Superior Court. DeCrescenzo did not appeal the order of dismissal.
15 14. Following remand to the Superior Court, CSI demurred to the
16 remaining claims in the FAC on the grounds that all DeCrescenzo's claims accrued
17 no later than 2004 and were thus time-barred, including that no equitable doctrine
18 salvaged her stale claims, and that she was collaterally estopped by Judge King's
19 ruling to assert otherwise. The Superior Court sustained CSI' s demurrer in its
20 entirety, with leave to amend, finding that DeCrescenzo failed to plead "adequate
21 facts explaining why any type of tolling is appropriate in the situation before the
22 court." The court did not address CSI's collateral estoppel argument.
23 15. DeCrescenzo then filed her Second Amended Complaint (SAC) on
24 February 2, 2010. DeCrescenzo alleged seven causes of action based on the same
25 events alleged to have occurred between 1991 and 2004 in connection with her staff
26 positions as a religious worker with CSL [SAC ,I 5]. DeCrescenzo once again
27 pleaded facts to support her argument that CSI was equitably estopped from
28 invoking the statutes of limitations as a defense. Those allegations were similar or
328422.J
4
COMPLAINT FOR DECLARATORY AND INJUNCTION RELIEF
Case 2:17-cv-09158-GW-SK Document 1 Filed 12/21/17 Page 6 of 11 Page ID #:6

1 identical to those pleaded in her earlier complaints. The SAC added Religious
2 Technology Center (RTC) as a named defendant. RTC is responsible for insuring
3 and enforcing the orthodox practice of the Scientology religion. RTC also is
4 formally recognized by the Internal Revenue Service as a tax exempt charitable and
5 religious organization. DeCrescenzo alleged that RTC controlled CSI and therefore
6 was responsible for CSI's acts.
7 16. CSI demurred to the SAC on two grounds: (1) all claims were barred
8 by collateral estoppel, based on this court's final judgment that CSI was not
9 equitably estopped from invoking the statute of limitations as a defense to plaintiffs
10 federal law claim; and (2) all claims were barred by the statutes of limitations. RTC
11 also demurred.
12 17. On March 18, 2010, the Superior Court sustained CSI's demurrer
13 without leave to amend. In an oral opinion delivered on April 30, 2010 granting
14 RTC's demurrer, the court rejected DeCrescenzo's equitable estoppel argument,
15 because, given the circumstances of her "escape" from Scientology, "a reasonable
16 person in plaintiffs position would have, should have obtained counsel ... to
17 evaluate whether plaintiff had any legal recourse" when CSI allegedly forced her to
18 sign documents as a condition for leaving. The Superior Court, however, rejected
19 CSI' s collateral estoppel argument arising from the prior federal court judgment,
20 finding that under California law that the federal court dismissal based on the statute
21 of limitations was not a decision on the merits under state law (although it is on the
22 merits under federal law).
23 18. Having sustained the demurrers t9 the SAC in its entirety without leave
24 to amend, the Superior Court ordered the matter dismissed on April 30, 2010.
25 (Ibid.) The court entered judgment on June 9, 2010.
26 19. DeCrescenzo appealed. On June 24, 2011, the California Court of
27 Appeal, District Two, Division Three reversed and remanded to the Superior Court.
28 DeCrescenzo v. Church of Scientology International, 2011 WL 2508142 (As

328422.1
5
COMPLAINT FOR DECLARATORY AND INJUNCTION RELIEF
Case 2:17-cv-09158-GW-SK Document 1 Filed 12/21/17 Page 7 of 11 Page ID #:7

1 Modified on Denial of Rehearing, July 22, 2011 ). On the issue of equitable estoppel,
2 the court held that DeCrescenzo' s allegations of "intimidation and threats of
3 banishment and harassment, if true, may preclude defendants, in equity, from
4 asserting the statute of limitations as a defense," and were sufficient "for pleading
5 purposes," even though "[DeCrescenzo] does not expressly allege that the threats
6 caused her to delay filing her complaint." Id. At *6.
7 20. On the question of the collateral estoppel effect of the federal court
8 judgment, the Court of Appeal held, on the purported basis of California law, that
9 collateral estoppel does not apply to a judgment in one lawsuit if the losing party
10 then alleges "additional facts" in another legal action that she failed to allege in the
11 first proceeding. Finding that DeCrescenzo had alleged additional facts in her SAC
12 in the state court action after the case had been remanded from federal court, the
13 Court of Appeal refused to grant preclusive effect to this court's final judgment and
14 its determination that CSI was not equitably estopped from interposing the statute of
15 limitations to DeCrescenzo' s federal claim.
16 21. In so holding, the Court of Appeal relied exclusively on California state
17 law cases. The court ignored- in fact, did not even address -the well-recognized
18 and constitutionally compelled rule, fully briefed and argued to it by CSI, that the
19 effect, including the preclusive effect, of a judgment of a federal court exercising
20 federal question jurisdiction is governed exclusively by federal law. Equally, the
21 Court of Appeal made no mention of the well-established federal law holding that a
22 party cannot escape the preclusive consequences of a federal court judgment merely
23 by alleging new arguments or "additional" facts that she already knew and could
24 have raised in the original federal court proceeding that concluded in the federal
25 court judgment. Finally, the Court of Appeal ignored that a federal court judgment
26 dismissing a federal claim under Rule 12(b)(6) is a final judgment with both claim
27 and issue preclusive effect.
28
328422.1
6
COMPLAINT FOR DECLARATORY AND INJUNCTION RELIEF
Case 2:17-cv-09158-GW-SK Document 1 Filed 12/21/17 Page 8 of 11 Page ID #:8

1 22. CSI and RTC petitioned for rehearing, raising not only the Court of
2 Appeal's failure to apply federal law, but also showing that the very allegations that
3 the Court of Appeals found that DeCrescenzo had made purportedly "for the first
4 time" in her SAC were all set forth virtually in haec verba in the FAC as grounds
5 for applying equitable estoppel. The petition was denied without comment.
6 23. CSI and R TC petitioned for review to the California Supreme Court on
7 the ground that the Court of Appeal improperly had failed to apply federal law to the
8 question of the preclusive effect of this court's judgment. The petition was denied
9 on May 15, 2013.

10 24. Following the Supreme Court's denial of review, CSI attempted to

11 resolve the case by seeking dismissal of the action without trial in state court. CSI
12 successfully moved the Superior Court to bifurcate its consideration of the lawsuit
13 between the statute oflimitations/equitable estoppel issues and the merits of
14 plaintiffs claims for relief. CSI then sought to obtain dismissal of the lawsuit in the
15 Superior Court through separate summary judgment motions addressed to both
16 issues. By doing so, CSI attempted to avoid the necessity of asking this court to
17 intervene in the state court proceedings. The case was then delayed for several years
18 by the retirement of Judge Sohigian and the appointment and subsequent recusal of
19 a series of Superior Court judges. CSI' s last motion for summary judgment was
20 finally denied in 2016.
21 25. In attempting to establish trial dates, plaintiffs counsel has taken the
22 position that the first trial - the statute of limitations/equitable estoppel trial - will
23 require over a month to try and will involve inquiry into all of plaintiffs allegations
24 about her experiences. As a result the case has been assigned to the long trial part of
25 the Superior Court. The trial on statute of limitations/equitable estoppel has just
26 been scheduled for August 13, 2018.
27 26. Plaintiff therefore now returns to this court to protect the integrity of
28 the court's final judgment under the Full Faith and Credit and Supremacy Clauses,
328422.1
7
COMPLAINT FOR DECLARATORY AND INJUNCTION RELIEF
Case 2:17-cv-09158-GW-SK Document 1 Filed 12/21/17 Page 9 of 11 Page ID #:9

1 and to avoid the unnecessary and wasteful and considerable expenditure of time and
2 money to relitigate the dispositive issue on which plaintiff already has obtained
3 judgment from this court.
4 CLAIM FOR RELIEF
5 27. Plaintiff repeats and re-alleges the contents of paragraphs 1-26.
6 Further prosecution of the state court lawsuit, including trials, would fail to give full
7 faith and credit to the judgment of this court, in violation of Article III and Article
8 VI, Clause 2 of the Constitution of the United States, and the Due Process Clause of
9 the Fourteenth Amendment to the Constitution of the United States, and the Full
10 Faith and Credit Act, 17 U.S.C. §1738.
11 28. The issue preclusive and claim preclusive effects of a final judgment of
12 a federal court acting under federal question jurisdiction is governed exclusively by
13 federal law.
14 29. Where a case filed in state court is removed to federal court on the
15 basis that some of the claims arise under federal law, and where the federal court
16 issues final judgment on the federal claims and remands remaining state law claims
17 to state court, the federal court judgment has both claim and issue preclusive effect
18 in the remanded proceedings.
19 30. A federal court has the power under the All Writs Act and the third
20 exception to the Anti-Injunction Act to enforce its judgments, if necessary, by
21 issuing an injunction staying stay court proceedings in derogation of that judgment
22 and the issues finally decided by that judgment, or by enjoining a party from
23 continuing to avoid the preclusive effects of the federal court judgment by
24 relitigating the issue in another judicial proceeding. A federal court also has power
25 to issue a declaratory judgment that the state court lawsuit should not go forward
26 due to the preclusive effects of the federal court judgment. A state court is required
27 to give full faith and credit to such a declaratory judgment.
28
328422.1
8
COMPLAINT FOR DECLARATORY AND INJUNCTION RELIEF
Case 2:17-cv-09158-GW-SK Document 1 Filed 12/21/17 Page 10 of 11 Page ID #:10

1 31. Where, as here, state courts refuse to apply federal law or give
2 preclusive effect to a federal court judgment, a federal court should exercise its
3 power to act as set forth in the above paragraph. Plaintiff here seeks an order
4 enjoining the defendant from continuing to prosecute her state court action, thereby
5 avoiding the necessity of the federal court directly enjoining the state court, albeit
6 such relief properly can be granted.
7 32. Pursuant to the All Writs Act, 28 U.S.C. § 1651 and its federal question
8 jurisdiction under 28 U.S.C. § 1331, this court has jurisdiction over this action and
9 power to issue all writs necessary in aid of its jurisdiction and to effectuate its
10 judgments.
11 33. By its terms, the federal Anti-Injunction Act, 28 U.S.C. § 2283,
12 pursuant to its so-called "re-litigation exception," specifically permits a federal court
13 to issue an injunction against a state court proceeding where necessary to effectuate
14 and carry out a judgment of a federal court exercising its federal question
15 jurisdiction.
16 WHEREFORE,
17 1. Plaintiff requests that the court issue a declaratory judgment stating that
18 its prior judgment, dismissing LD's federal human trafficking claim on the ground
19 that the claim was barred by a four year statute of limitations and that equitable
20 estoppel did not bar CSI from raising that defense, precludes LD from raising the
21 issue of equitable estoppel in her claims pending in the state court action because
22 those claims accrued on the same date as did her federal human trafficking claim,
23 those claims also had statutes oflimitations of four years or less, and this court's
24 prior judgment decided that equitable estoppel does not apply to the period running
25 from the date LD's claims accrued and the date she first filed the state court action.
26 2. Plaintiff further requests this court to issue a preliminary and
27 permanent injunction prohibiting defendant DeCrescenzo from taking any steps to
28
328422.1
9
COMPLAINT FOR DECLARATORY AND INJUNCTION RELIEF
Case 2:17-cv-09158-GW-SK Document 1 Filed 12/21/17 Page 11 of 11 Page ID #:11

1 further prosecute the state court lawsuit and requiring her to dismiss said lawsuit
2 with prejudice.
3 3. Plaintiff further requests this court to provide such further and
4 necessary relief as is just and proper.
5
6 DATED: December 21, 2017 RABINOWITZ, BOUDIN, STANDARD,
KRINSKY & LIEBERMAN, LLP
7
8
9 <6 ,, IA I...._--"-(V_I _,,_,'J/V-;..._v---
By : __~_l_ , _ ·_ ,L.,...A _ _ __ _ _ __
10 Eric M. Lieberman
Attorneys for Plaintiff Church of
11 Scientolog:v International
12 DATED: December 21, 2017 KENDALL BRILL & KELLY LLP
13
14
15 By: &0,~/.t. De:l(l u
- - - - - - - - - - - - - -- -
Bert H. Deixler
16
Attorneys for Plaintiff Church of
17 Scientology International
18
19
20
21
22
23
24
25
26
27
28
328422.1 10
COMPLAINT FOR DECLARATORY AND INJUNCTION RELIEF