Case :-cv-00 Document Filed 0// Page of Ryan A. Hamilton NEVADA BAR NO. HAMILTON LAW S. Durango Dr., Ste. C Las Vegas, NV (0) - (0) - (fax) ryan@hamiltonlawlasvegas.com Attorney for the plaintiffs UNITED STATES DISTRICT COURT FOR THE DISTRICT OF NEVADA CHARIS YATES, a Washington Citizen; BERET PUGH, a Washington Citizen; and DEAN PUGH, a Washington Citizen, vs. Plaintiffs, NARCONON FRESH START d/b/a RAINBOW CANYON RETREAT, a California Corporation; ASSOCIATION FOR BETTER LIVING AND EDUCATION INTERNATIONAL; NARCONON INTERNATIONAL; and DOES -0, ROE Corporations I X, inclusive, Defendants. Case No. COMPLAINT AND JURY DEMAND 0 Plaintiffs Charis Yates, Beret Pugh, and Dean Pugh ( Plaintiffs ), allege, by and through their attorney, Ryan Hamilton of Hamilton Law, LLC, the following: I. PARTIES. Plaintiffs are, and at all relevant times to this Complaint were, citizens of Washington.. Defendant Narconon Fresh Start is, and at all times relevant to this Complaint was, a corporation incorporated under the laws of, and with its principal place of business in, the State of
Case :-cv-00 Document Filed 0// Page of 0 California. Fresh Start has been at all relevant times transacting business in Caliente, Lincoln County, Nevada. Fresh Start may be served with process through its registered agent, Mark Kirwin, 0 Market St., Ste. 0, Ventura, CA 00.. Defendant Narconon International ( NI ) is a California corporation with its headquarters in Los Angeles, California.. NI is the parent/licensor of Defendant Narconon Fresh Start. NI exercises control over the time, manner, and method of Fresh Start s operations.. NI was doing business in the State of Nevada by and through its agent and subsidiary/licensee Defendant Narconon Fresh Start. NI may be served with process through its registered agent, Sherman D. Lenske, 00 Canoga Ave., Suite, Woodland Hills, CA.. Fresh Start and NI are subsidiaries of the Association for Better Living and Education ( ABLE ). ABLE oversees the drug rehabilitation, education, and criminal justice activities of the Church of Scientology including, but not limited to, Fresh Start and NI.. Defendant ABLE is a corporation registered in the State of California with its headquarters in Los Angeles, California.. ABLE controls the time, manner, and method of NI s and Fresh Start s businesses by actively managing their daily operations, including conducting inspections of Narconon centers and creating, licensing, and approving their marketing materials.. ABLE transacts business in the State of Nevada by and through its agents, Narconon International and Narconon Fresh Start. ABLE may be served with process through its registered agent, Sherman D. Lenske, 00 Canoga Ave., Suite, Woodland Hills, CA.. Plaintiffs are unaware of the true names and capacities, whether individual, corporate, associate, or otherwise, of Defendant DOES -0, inclusive, and, therefore, sues these Defendants by fictitious names. Plaintiffs will seek leave of this Court to amend this Complaint when the identities of these Defendants are ascertained.
Case :-cv-00 Document Filed 0// Page of 0 II. JURISDICTION AND VENUE. This Court has subject jurisdiction pursuant to U.S.C.. The amount in controversy exceeds $,000.00, and there is complete diversity between the parties.. Venue is proper in this Court pursuant to U.S.C. (a) because a substantial portion of the events and omissions giving rise to this lawsuit occurred in this District, and the Court has personal jurisdiction over each of the parties as alleged throughout this Complaint. III. FACTUAL ALLEGATIONS. On or about August 0, 0, Plaintiffs Charis Yates and Dean Pugh were seeking substance abuse treatment for their daughter, Plaintiff Beret Pugh.. Dean spoke on the telephone with Dan Carmichael, Admissions Director for Fresh Start, about getting treatment for his daughter, Beret. Dean also spoke with another Fresh Start salesperson named Ryan.. During their conversations, Carmichael and Ryan made numerous material false representations of fact.. First, Carmichael and Ryan falsely represented to Dean that the Fresh Start treatment program has over a % percent success rate.. Second, Carmichael and Ryan falsely represented to Dean that at Fresh Start Beret would receive extensive substance abuse treatment and counseling from qualified counselors.. Third, Carmichael and Ryan falsely represented to Dean that the Fresh Start s sauna program, the New Life Detoxification program, would reduce or eliminate Beret s drug cravings by flushing residual drug toxins stored in her fatty tissue.
Case :-cv-00 Document Filed 0// Page of 0. Fourth, Carmichael and Ryan falsely represented to Dean that at Fresh Start Beret would be under the supervision of licensed medical professionals, including licensed physicians and nurses.. Fifth, Carmichael and Ryan falsely represented to Dean that the Fresh Start program was secular and did not involve the study or practice of any religion. 0. Based on these false representations, Plaintiffs Dean Pugh and Charis Yates decided to admit their daughter to the Fresh Start program. They paid $,000 to Fresh Start for treatment for Beret. The Contract and Invoice for Fresh Start s services are attached hereto as Exhibit A.. The Contract describes the founding of the Narconon program as follows: The Narconon Program was founded in by William Benitez, where it was first used in the Arizona State Prison, after being inspired by the practical betterment philosophy of author and humanitarian L. Ron Hubbard in the book, The Fundamentals of Thought.. The full title of the L. Ron Hubbard book referenced in the Contract is Scientology: The Fundamentals of Thought.. In the same paragraph, the Contract provides, The Narconon Program is secular (NON- RELIGIOUS) in nature and the program does not include in any participation in any religious studies of any kind.. Despite Fresh Start s representation that it is a secular program, Fresh Start had Beret unwittingly practicing and studying Scientology in place of counseling for substance abuse.. Fresh Start uses the Narconon treatment program.. The Narconon treatment program consists of eight books written by, or based on the works of, L. Ron Hubbard, the founder of Scientology.. The books in the Narconon treatment program teach Scientology doctrines and concepts. There is no apparent connection between the material in the Narconon books and treatment for substance abuse and addiction.
Case :-cv-00 Document Filed 0// Page of 0. NI and ABLE license the written materials to individual Narconon centers such as Fresh Start.. NI and ABLE monitor and supervise the individual Narconon center s use of the Narconon books. 0. Individual Narconon centers such as Fresh Start must administer the Narconon program exactly as it is written or they risk losing their ability to administer the program.. Each patient at an individual Narconon center receives the same treatment program no matter what substance abuse problem the patient has.. Fresh Start administered Beret the Narconon treatment program.. The Narconon treatment program also has patients undergo a sauna program, what it calls the New Life Detoxification Program.. The sauna program is actually a Scientology ritual known as the Purification Rundown.. Under Narconon s sauna program, students first exercise vigorously before entering the sauna each day. On entering the sauna, Fresh Start requires each student to ingest increasing doses of Niacin and a vitamin bomb.. Fresh Start had Beret participate in the New Life Detoxification program. During her participation, Fresh Start had Beret ingest extreme doses of Niacin well beyond the recommended daily allowance.. There were no licensed medical personnel, such as doctors or nurses, supervising Beret as she participated in the sauna program.. Fresh Start claimed to Plaintiffs that the New Life Detoxification Program has been scientifically shown to flush out residual drug toxins stored in fatty tissue thereby reducing or eliminating a person s drug cravings.. Not only does the New Life Detoxification fail to live up to these claims about its benefits, the sauna program is dangerous. By having students ingest extreme doses of Niacin and other
Case :-cv-00 Document Filed 0// Page of 0 vitamins while sitting in extreme temperatures for hours, the sauna program unnecessarily exposes students to serious health risks including severe dehydration. 0. In a prior lawsuit, Dr. Louis A. Casal, an expert retained by Narconon International and Narconon of Northern Georgia in a wrongful death suit filed against those entities, testified at a deposition. Relevant portions of Dr. Casal s deposition testimony are attached hereto as Exhibit B. When asked under oath about Narconon s sauna program, he testified that there is no scientific basis for the notion that sweating in a sauna detoxifies a person s body or treats addiction: Q. Have you looked at the Narconon literature on what Narconon contends the benefits from the sauna are? A. [Dr. Casal] Yes, I have. Q. And the sauna program, what Narconon contends is that in it in fact detoxifies your body. True? A. True. Q. But there s no scientific basis that you can point to to support that contention, is there, sir? A. You re correct. Q. So when Narconon states that the sauna program detoxifies its students, you re not aware, as a medical doctor, of any scientific basis for that contention? A. I agree. Exhibit B, Deposition of Dr. Louis Casal, : :.. Despite their own expert s admission that there is no scientific basis for the idea that patients sweating in the New Life Detoxification Program treats addiction, Defendants continue to represent to prospective patients, as they did to Plaintiffs, that the New Life Detoxification has been scientifically and medically proven as effective.
Case :-cv-00 Document Filed 0// Page of 0. Defendants represented to Plaintiffs that Fresh Start has a success rate of % for all Narconon centers, including Narconon Fresh Start d/b/a Rainbow Canyon Retreat. Defendants have published no studies or other verifiable evidence to support their claimed success rates.. Dr. Casal, the medical expert retained by Narconon International in another lawsuit, testified at his deposition that he was not convinced Narconon s claimed success rate was true: Q. Okay. What are you relying on well, let me ask you this; do you believe that percent success ratio is accurate? A. [Dr. Casal]. Mr. Harris, I ll be honest with you, that s a big number. Q. Yeah, it s it s a real big number. A. It s a big number. Q. And it s completely inconsistent A. I I hope it s true, but, I mean, I would need some convincing. Q. Okay. Do you have any idea where Narconon is getting the numbers that it s using? A. You know, in the interest of time I just didn t have enough time to delve deeper into those studies, Mr. Harris. And I I would be happy to, but, no, I don t have a clear understanding of where that 0 0-something number came from, no, sir. Exhibit B, Deposition of Dr. Louis Casal, : :; :.. Defendants are well aware that there is no support for Narconon s claimed success rate, but nonetheless advertised a % success rate to Plaintiffs.. Narconon documents indicate that the Narconon program is used to recruit patients into the Church of Scientology. For example, a Narconon document titled the Narconon Technical Line- Up provides a flow chart of a patient s experience into and through the Narconon program. The document shows that when a patient finishes the Narconon program, the patient is to be route[d] to the nearest Org for further services if the individual so desires. Org is Scientology jargon for
Case :-cv-00 Document Filed 0// Page of 0 an individual church providing services for the Church of Scientology. A copy of the Narconon Technical Line-Up is attached hereto as Exhibit C.. Defendants consider the Narconon treatment program to be the Bridge to the Bridge. That is, Narconon considers its program to be an initial step into getting on Scientology s Bridge to Total Freedom, the key spiritual journey that practitioners of the Scientology religion undertake. See, e.g., Narconon News,, Volume, Issue : Narconon Is The Bridge to The Bridge, attached hereto as Exhibit D.. Despite Defendants representations that Beret would receive extensive counseling at Fresh Start, at no point did staff ever speak to her about the specifics of her drug use and its causes.. Beret did not receive any of the counseling or substance abuse treatment at Fresh Start that Plaintiffs had been promised. 0. In contrast to Defendants representations to Dean that Beret would be receiving treatment from duly qualified and licensed professionals, the staff at Fresh Start consisted almost entirely of former graduates of the Narconon program. These personnel were not licensed counselors, therapists, or addiction specialists.. Beret left Fresh Start early because she was not receiving any actual addiction treatment. She left Fresh Start much worse than when she entered and relapsed almost immediately. Plaintiffs have incurred expenses to get Beret the treatment Defendants promised to provide. Further, Beret has had to get help for the injuries Defendants treatment caused her. ALTER EGO LIABILITY. Plaintiffs incorporate by reference, as if fully set forth herein, each and every allegation set forth in the preceding paragraphs and further alleges as follows:. Defendants Narconon Fresh Start and NI have all appearances of being a corporate sham illusion and mere instrumentalities of Defendant ABLE.
Case :-cv-00 Document Filed 0// Page of 0. ABLE heavily influences Narconon Fresh Start and NI and governs and controls nearly every aspect of their business activities.. There is such unity of interest and ownership among Narconon Fresh Start, NI, and ABLE that they are inseparable from one another.. The separate corporate existences of Narconon Fresh Start, NI, and ABLE is a design or scheme to perpetrate a fraud. The separate corporate existences of Narconon Fresh Start, NI, and ABLE is a scheme to fraudulently induce patients to enroll in one of their treatment facilities and pay substantial funds. Further, Defendants perpetrate this scheme to recruit for and promote the Scientology religion.. It is interests of justice to disregard the corporate shield and treat Defendants Narconon Fresh Start, NI, and ABLE as identical. Accordingly, each cause of action listed below is made against all Defendants. FIRST CLAIM FOR RELIEF BREACH OF CONTRACT. Plaintiffs incorporate by reference, as if fully set forth herein, each and every allegation set. Plaintiffs and Defendants were bound by a Contract whereby Defendant agreed, in exchange for consideration, to provide secular, residential drug and alcohol treatment to Beret Pugh. 0. Defendants breached this contract by, inter alia: (i) failing to provide services constituting drug and alcohol treatment; and (ii) providing Scientology in lieu of drug and alcohol treatment.. Defendants breaches have caused Plaintiffs to suffer damages in excess of $,000.00. SECOND CLAIM FOR RELIEF FRAUD
Case :-cv-00 Document Filed 0// Page of 0. Plaintiffs incorporate by reference, as if fully set forth herein, each and every allegation set. The following is a non-exhaustive list of false representations Defendants knowingly made to Plaintiffs: (i) that the Narconon Fresh Start program has a % success rate; (ii) that the Narconon program is secular and does not involve the study or practice of any religion; (iii) that Beret would receive counseling related to substance abuse at Fresh Start; (iv) that Fresh Start s sauna program, i.e, the Purification Rundown, is safe and has been scientifically proven as effective to reduce or eliminate drug cravings; and (v) that Beret would be under the care of licensed medical professionals, such as doctors or nurses, at Fresh Start.. Acting on behalf of Defendants, Dan Carmichael and Ryan of Fresh Start, made these statements to Dean Pugh on or about August 0, 0, to induce Dean and Charis to send their daughter to Fresh Start.. Had Plaintiffs known that any of the above representations Defendants made were false, they would not have sent Beret to Fresh Start, nor paid Fresh Start a substantial sum of money.. As a proximate result of Defendants fraudulent conduct, Plaintiffs have suffered damages in excess of $,000.00. THIRD CLAIM FOR RELIEF NEGLIGENCE. Plaintiffs incorporate by reference, as if fully set forth herein, each and every allegation set. Defendants owed Plaintiffs a duty to render substance abuse treatment to Beret Pugh in a manner that did not subject her to an unreasonable risk of harm. Defendants further had a duty of care to render reasonably safe and effective treatment to Beret Pugh.. Defendants breached these duties by: (i) instructing Beret to sit in a sauna for hours per day while ingesting extreme dosages of Niacin; (ii) failing to staff the Fresh Start treatment
Case :-cv-00 Document Filed 0// Page of 0 facility, and particularly the sauna, with any qualified medical personnel; (iii) failing to provide duly qualified counselors to administer treatment; and (iv) providing Scientology in lieu of substance abuse treatment. 0. As a proximate result of Defendants breaches of the above duties, Plaintiff Beret Pugh has suffered injuries in excess of $,000.00. FOURTH CLAIM FOR RELIEF INTENTIONAL INFLICTION OF EMOTIONAL DISTRESS. Plaintiffs incorporate by reference, as if fully set forth herein, each and every allegation set. Defendants engaged in extreme and outrageous conduct with the intention of causing, or with reckless disregard of the probability of causing Plaintiffs severe or extreme emotional distress. Defendants extreme and outrageous conduct consisted of, inter alia: providing Beret Pugh Scientology in lieu of drug treatment or substance abuse counseling; preying on Plaintiffs vulnerabilities and attempting to recruit Plaintiff Beret Pugh into Scientology under the guise of providing drug treatment.. As a proximate result of Defendants extreme and outrageous conduct, Plaintiff Beret Pugh has suffered severe and extreme emotional distress beyond what any person in a civilized society should be expected to endure. FIFTH CLAIM FOR RELIEF NEGLIGENT MISREPRESENTATION. Plaintiffs incorporate by reference, as if fully set forth herein, each and every allegation set. Defendants made the following false representation of fact to Plaintiffs: (i) that the Narconon Fresh Start program has a % success rate; (ii) that the Narconon program is secular and does not involve the study or practice of any religion; (iii) that Beret would receive counseling
Case :-cv-00 Document Filed 0// Page of 0 related to substance abuse at Fresh Start; (iv) that Fresh Start s sauna program, i.e, the Purification Rundown, is safe and has been scientifically proven as effective to reduce or eliminate drug cravings; and (v) and that Beret would be under the care of licensed medical professionals, such as doctors or nurses, at Fresh Start.. Acting on behalf of Defendants, Dan Carmichael and Ryan of Fresh Start, made these statements to Dean Pugh on or about August 0, 0, to induce Plaintiffs Dean Pugh and Charis Yates to send their daughter to Fresh Start.. Defendants made these statements to Plaintiffs in the course of Fresh Start s business. These statements were for Plaintiffs guidance in their transaction with Fresh Start. Plaintiffs relied on these false statements of fact resulting in substantial pecuniary loss and other injuries to Plaintiffs.. Defendants made these statements without exercising reasonable care. SIXTH CLAIM FOR RELIEF NEGLIGENCE PER SE. Plaintiffs incorporate by reference, as if fully set forth herein, each and every allegation set 0. Defendants performed medical procedures on Plaintiff Beret Pugh for which a medical license was required under NRS 0.0. Such procedures included non-physicians instructing Beret Pugh to ingest extreme doses of Niacin while undergoing Fresh Start s sauna program.. Plaintiff Beret Pugh is in the class of persons the license requirement under NRS 0.0 is intended to protect and the injury she sustained is of the type against which the statute is intended to protect.. As a proximate result, Plaintiff Beret Pugh sustained injuries. /// ///
Case :-cv-00 Document Filed 0// Page of 0 SEVENTH CLAIM FOR RELIEF CIVIL RICO FOR MAIL AND WIRE FRAUD, U.S.C. (c). Plaintiffs incorporate by reference, as if fully set forth herein, each and every allegation set. Plaintiffs have been injured by Defendants conduct of an enterprise through a pattern of racketeering activity.. Defendants have engaged in a scheme to defraud Plaintiffs and countless others. In furtherance of that scheme, Defendants have committed countless acts of mail fraud and wire fraud under U.S.C. within the preceding ten years.. Defendants perpetrate this scheme as follows: When prospective patients or their loved ones are referred to Narconon facility, they then speak to an intake specialist. The intake specialist following a script makes claims that Narconon knows to be false and without scientific support such as the claims that Dan Carmichael and Ryan made to Plaintiffs in this case on or about August 0, 0. These false claims include: (i) that Narconon has a more than % success rate; (ii) that Narconon s sauna program reduces or eliminates drug cravings by eliminating toxins from an addict s fatty tissue; (iii) that patients at Narconon will receive extensive drug counseling; (iv) that the Narconon treatment program does not involve the study or practice of any religion; and (v) that patients at the Narconon facility will be under the supervision of licensed physicians and other medical personnel.. Defendants also mail prospective clients such as Plaintiffs pamphlets making these same false claims to induce them to enter into the program. Defendants refer prospective patients to its website where these false claims are also made. NI and ABLE approve Narconon Fresh Start s marketing materials and scripts that contain these false claims.
Case :-cv-00 Document Filed 0// Page of 0. As was the case here, Defendants recruit prospective clients from different states in which the facility is located. For that reason, Defendants use of the phones, wires, mail, and internet is integral to their fraudulent scheme.. When patients such as Beret Pugh enter the Narconon treatment program, instead of receiving the extensive counseling and substance abuse treatment they and their families were promised, Narconon provides only instruction in Scientology and dangerous Scientology rituals such as the sauna program. In addition, Defendants use their treatment program as a recruiting tool for the Church of Scientology, as evidenced by Defendants own documents, attached hereto as Exhibits C and D. 0. While a patient is undergoing the program, Defendants prepare the patient to become a Narconon staff member following the patient s completion of the program. In doing so, the patient becomes a counselor for the next wave of incoming patients. This scheme allows Defendants to pay a patient-turned-counselor low wages and Defendants are spared the relatively higher cost of paying duly qualified addiction counselors.. As a result of Defendants racketeering activity, Plaintiffs have suffered pecuniary damages and other injuries. EIGHTH CLAIM FOR RELIEF BREACH OF IMPLIED COVENANT OF GOOD FAITH AND FAIR DEALING. Plaintiffs incorporate by reference, as if fully set forth herein, each and every allegation set. The contract Plaintiffs Dean Pugh and Charis Yates entered into with Defendants for Defendants to provide treatment to Beret contained an implied covenant of good faith and fair dealing.. Defendants acted unfaithfully to the purpose of the contract and Plaintiffs justified expectations by, inter alia: () having Beret unwittingly study and practice Scientology in lieu of
Case :-cv-00 Document Filed 0// Page of 0 engaging in drug treatment; and () attempting to have Beret surrender her legal rights in exchange for services for which Plaintiffs had already provided consideration; and () persuading Dean and Charis to send Beret to Fresh Start with promises that Narconon s sauna program would reduce or eliminate his drug cravings by flushing toxins and then asking Beret at Narconon to sign an acknowledgement that the sauna program is not a medical program and that it provides no physical gains.. As a consequence of Defendants breaches, Plaintiffs have suffered damages. NINTH CAUSE OF ACTION CIVIL CONSPIRACY. Plaintiffs incorporate by reference, as if fully set forth herein, each and every allegation set. Defendants intended to act in concert to accomplish the unlawful objectives of indoctrinating and recruiting Plaintiff Beret Pugh into Scientology under the guise of providing her with drug treatment.. Defendants further acted in concert to have non-physicians perform medical procedures on Plaintiff Beret Pugh for which a medical license was required under NRS 0.0.. As a proximate result of Defendants intentional actions in concert to accomplish unlawful objectives to harm Plaintiff Beret Pugh, she has been harmed. TENTH CAUSE OF ACTION FRAUD CLAIMS PURSUANT TO NRS.00 0. Plaintiffs incorporate by reference, as if fully set forth herein, each and every allegation set. By reason of Defendants actions complained of herein, Plaintiffs are victims of consumer fraud.
Case :-cv-00 Document Filed 0// Page of 0. Defendants have engaged in numerous deceptive trade practices as defined in NRS.0 to.0, inclusive. The following is a non-exhaustive list of the deceptive trade practices Defendants have engaged in with respect to Plaintiffs: (i) advertising substance abuse treatment with the intent not to sell them as advertised by providing Scientology instead; (ii) knowingly making false representations about the Narconon treatment program s success rate, the personnel delivering the treatment program, and the benefits of the sauna program; (iii) using bait and switch advertising whereby Defendants advertise extensive substance abuse counseling and treatment and then deliver a treatment program wherein the patient receives only Scientology instruction and dangerous Scientology rituals; (iv) failing to disclose material facts to Plaintiffs about the services Defendants were selling including, but not limited to, the fact that Defendants treatment program consisted of Scientology doctrines and practices and the staff at Fresh Start consisted of graduates of the Narconon treatment program without any other qualification; and (v) making assertions of scientific, clinical, or quantifiable fact without having appropriate evidence such as Defendants assertions of its % success rate for its treatment program and Defendants claims that the New Life Detoxification Program can reduce or eliminate drug cravings.. Plaintiffs have been the victims of Defendants deceptive trade practices listed above and, as a result, have suffered substantial pecuniary damages and other injuries.. Defendants deceptive trade practices are likely to continue absent court intervention.. Plaintiffs are entitled to all available relief under NRS.00 including Plaintiffs attorney s fees and costs of this action, an award for their damages, and an injunction restraining Defendants from further engaging in the deceptive trade practices complained of herein. DEMAND FOR JURY TRIAL Plaintiffs demand a jury trial on all issues triable. PRAYER FOR RELIEF WHEREFORE, Plaintiffs prays for the following relief:
Case :-cv-00 Document Filed 0// Page of A. Judgment in favor of Plaintiffs and against Defendants for damages in such amounts as may be proven at trial; B. Compensation for special, general, and treble damages, as well for loss of parental consortium; C. Reasonable attorney s fees and costs of suit; D. Interest at the statutory rate; E. Punitive or exemplary damages against Defendant; F. Injunctive relief restraining Defendants from further engaging in deceptive trade practices; and G. All further relief, both legal and equitable, that the Court deems just and proper. DATED this May, 0. 0 Respectfully submitted, By:_/s/Ryan A.Hamilton_ RYAN A. HAMILTON, ESQ. NEVADA BAR NO. HAMILTON LAW S. Durango Dr., Ste. C Las Vegas, NV (0) - (0) - ryan@hamiltonlawlasvegas.com Attorney for Plaintiffs