Burgess Et Al V Narconon: Appeal Brief

Appeal No.
14-11214-FF

IN THE UNITED STATES COURT OF APPEALS
FOR THE ELEVENTH CIRCUIT

BENJAMIN BURGESS, RHONDA BURGESS, HEIDI HOWARD, JOYCE
MARTIN, BETH KARAMPELAS, TERRI DACY, and MICHAEL DACY,
Plaintiffs-Appellants,

v.

RELIGIOUS TECHNOLOGY CENTER, INC., ASSOCIATION FOR BETTER
LIVING AND EDUCATION INTERNATIONAL, NARCONON
INTERNATIONAL, and NARCONON OF GEORGIA, INC.,
Defendants-Appellees.

ON APPEAL FROM THE UNITED STATES DISTRICT COURT FOR
THE NORTHERN DISTRICT OF GEORGIA, ATLANTA DIVISION
Case No. 1:13-cv-02217-SCJ

BRIEF OF PLAINTIFFS-APPELLANTS

JEFFREY R. HARRIS
Georgia Bar No. 330315
REBECCA C. FRANKLIN
YVONNE S. GODFREY
HARRIS PENN LOWRY LLP
400 Colony Square
1201 Peachtree St. NE, Suite 900
Atlanta, GA 30361
(404) 961-7650
Counsel for Plaintiffs-Appellants
Case: 14-11214 Date Filed: 05/06/2014 Page: 1 of 46
Appeal No. 14-11214-FF, Benjamin Burgess, et al. v. Religious Tech. Ctr., et al.
Page A of C

Certificate of Interested Persons and Corporate Disclosure Statement

Pursuant to Federal Rule of Appellate Procedure 26.1 and Eleventh Circuit
Rule 26.1-1, counsel for Appellants Benjamin Burgess, Rhonda Burgess, Heidi
Howard, J oyce Martin, Beth Karampelas, Terri Dacy, and Michael Dacy hereby
certifies that, to the best of counsels knowledge, the following individuals, firms,
governmental entities, and corporations have an interest in the above- captioned
appeal:
Alston & Bird, LLP

Association for Better Living and Educational International

Barton, Thomas M.

Burgess, Benjamin

Burgess, Rhonda

Carpenter, David B.

Chilvis, Cochran, Larkins & Bever LLP

Coles Barton LLP

Coles, Matthew S.

Dacy, Michael

Dacy, Terri

Dalbey, J .D.

Dawson, Cari K.
Page B of C

Diffley, Dan F.

Fleming, J ohn H.

Franklin, Rebecca C.

Godfrey, Yvonne S.

Goodman McGuffey Lindsey & J ohnson, LLP

Hankins, J ames T.

Harris, J effrey R.

Harris Penn Lowry LLP

Howard, Heidi

J ones, The Honorable Steve C.

Karampelas, Beth

Larkins, J ohn K.

Lindsey, Edward H.

Martin, J oyce

McNeil, William Taylor

Mohr, Stacey M.

Narconon International

Narconon of Georgia, Inc.

Religious Technology Center, Inc.

Sanders, Valerie S.
Page C of C

Sutherland Asbill & Brennan LLP

Tady, Aaron P.M.
Statement Regarding Oral Argument
Plaintiffs-Appellants Benjamin Burgess, et al. request oral argument. This

case raises significant legal issues regarding the appropriate application of the
pleading standards contained in Federal Rules of Civil Procedure 8 and 9, the proper
interpretation of Georgias Long Arm statute, and the implications of denying leave
to amend a complaint pursuant to Federal Rule of Civil Procedure 15(a) where there
has been no evidence of bad faith, undue delay, prejudice to the defendants, or
futility. Oral argument will allow this Court the fullest opportunity to explore those
legal issues with counsel.
ii
Table of Contents
Certificate of Interested Persons and Corporate Disclosure Statement .................... A
Statement Regarding Oral Argument ........................................................................ i
Table of Contents ...................................................................................................... ii
Table of Citations ..................................................................................................... iv
Statement of Subject-Matter and Appellate J urisdiction ....................................... viii
I. STATEMENT OF THE ISSUES .......................................................................... 1
II. STATEMENT OF THE CASE ............................................................................ 1
Course of the Proceedings. ..................................................................................... 1
Statement of the Facts ............................................................................................. 3
Standard of Review ................................................................................................. 5
III. SUMMARY OF THE ARGUMENT ................................................................. 5
IV. ARGUMENT AND CITATION OF AUTHORITY ......................................... 7
A. Class Representatives stated a plausible claim for relief for breach of
contract, quasi-contract, and negligence per se. ..................................................... 7
1. Breach of contract ...................................................................................... 8
2. Unjust Enrichment.................................................................................... 11
3. Detrimental Reliance/Promissory Estoppel ............................................ 12
4. Negligence Per Se..................................................................................... 14

iii
B. Class Representatives stated with particularity claims sounding in fraud
and Georgias RICO statute. ................................................................................. 15
1. Fraudulent Misrepresentation ................................................................. 17
2. Georgia RICO Claims .............................................................................. 19
C. Class Representatives made a showing sufficient to warrant the exercise of
personal jurisdiction over RTC or, at a minimum, jurisdictional discovery. ...... 22
D. The district court abused its discretion by denying leave for Class
Representatives to amend their original complaint. ............................................. 28
V. Conclusion .......................................................................................................... 30
Certificate of Compliance .......................................................................................... a
Certificate of Service ................................................................................................. b

iv
Table of Citations
Cases
Am. Dental Assn v. Cigna Corp., 605 F.3d 1283 (11th Cir. 2010) .......................... 8
Ambrosia Coal & Const. Co. v. Pages Morales, 482 F.3d 1309 (11th Cir.2007) ... 16
Artzner v. A & A Exterminators, Inc., 531 S.E.2d 200 (Ga. Ct. App. 2000) ........... 17
Ashcroft v. Iqbal, 556 U.S. 662, 129 S.Ct. 1937 (2009) ........................................7, 8
Bell Atl. Corp. v. Twombly, 550 U.S. 544, 127 S.Ct. 1955 (2007) ............................ 8
Brooks v. Blue Cross & Blue Shield of Fla., Inc., 116 F.3d 1364 (11th Cir. 1997) 16
Bryant v. Dupree, 252 F.3d 1161 (11th Cir. 2001) ........................................... 29, 30
Corsello v. Lincare, Inc., 428 F.3d 1008 (11th Cir. 2005) ...................................... 29
Diamond Crystal Brands, Inc. v. Food Movers Intl, Inc., 593 F.3d 1249 (11th Cir.
2010) ..................................................................................................................... 24
Durham v. Bus. Mgmt. Assocs., 847 F.2d 1505 (11th Cir. 1988) ............................ 16
Evans v. McClain of Ga., Inc., 131 F.3d 957 (11th Cir. 1997) ........................ 13, 14
Fisher v. Toombs Cnty. Nursing Home, 479 S.E.2d 180 (Ga. Ct. App. 1996) ... 9, 10
Foman v. Davis, 371 U.S. 178, 83 S.Ct. 227 (1962) ............................................... 29
Handy v. DeKalb Med. Ctr., 679 S.E.2d 107 (Ga. Ct. App. 2009) ......................... 25
Hatmarker v. Meml Med. Ctr., 619 F.3d 741 (7th Cir. 2010) ................................ 14
Houston v. Houston, 600 S.E.2d 395 (Ga. Ct. App. 2004) ...................................... 13

v
Kuritzky v. Emory Univ., 669 S.E.2d 179 (Ga. Ct. App. 2008) ................................. 8
Lee v. Just Scott Designs, Inc., 754 S.E.2d 616 (Ga. Ct. App. 2014) ...................... 25
Madara v. Hall, 916 F.2d 1510 (11th Cir. 1990) ...................................................... 5
Maddox v. S. Eng'g Co., 453 S.E.2d 70 (Ga. Ct. App. 1994) .................................. 22
Morris v. SSE, Inc., 843 F.2d 489 (11th Cir. 1988) .......................................... 23, 24
Regional Pacesetters v. Eckerd Drugs of Ga., 358 S.E.2d 481 (Ga. Ct. App. 1987)
............................................................................................................................... 10
Satisfaction & Serv. Hous., Inc. v. SouthTrust Bank, Inc., 642 S.E.2d 364 (Ga. Ct.
App. 2007) ............................................................................................................ 27
Liquidation Commn of Banco Intercontinental, S.A. v. Renta, 530 F.3d 1339 (11th
Cir. 2008) .............................................................................................................. 19
Cable News Network, Inc. v. Video Monitoring Servs. of Am., Inc., 723 F. Supp.
765 (N.D. Ga. 1989) ............................................................................................. 28
Smith Serv. Oil Co. v. Parker, 549 S.E.2d 485 (Ga. Ct. App. 2001) ....................... 11
Sosa v. Airprint Sys., Inc., 133 F.3d 1417 (11th Cir. 1998)....................................... 5
Stires v. Carnival Corp., 243 F. Supp. 2d 1313 (M.D. Fla. 2002) .......................... 17
Surowtiz v. Hilton Hotels Corp., 383 U.S. 363, 86 S.Ct. 845 (1966) ........................ 8
TechBios, Inc. v. Champagne, 688 S.E.2d 592 (Ga. Ct. App. 2009) ........................ 9
United States v. Gen. Dynamics, 315 F. Supp. 2d 939 (N.D. Ill. 2004). .......... 16, 18
United Techs. Corp. v. Mazer, 556 F.3d 1260 (11th Cir. 2009) .............................. 11

vi
United States v. Ward, 486 F.3d 1212 (11th Cir. 2007) .......................................... 20
Walter v. Orkin Exterminating Co., 385 S.E.2d 725 (Ga. Ct. App. 1989). ............. 14
Welch v. Laney, 57 F.3d 1004 (11th Cir. 1995) ......................................................... 5
Williams Gen. Corp. v. Stone, 614 S.E.2d 758 (Ga. 2005) ...................................... 19
Ziemba v. Cascade Intl, Inc., 256 F.3d 1194 (11th Cir. 2001) ........................ 16, 19
Statutes
28 U.S.C. 1332 ........................................................................................................ 2
28 U.S.C. 1441 ........................................................................................................ 2
28 U.S.C. 1446 ........................................................................................................ 2
O.C.G.A. 10-6-1 .................................................................................................... 25
O.C.G.A. 1331 .................................................................................................... 9
O.C.G.A. 16-10-20 ................................................................................................ 21
O.C.G.A. 16-14-1 .................................................................................................... 2
O.C.G.A. 16-14-2 .................................................................................................. 19
O.C.G.A. 16-14-3 .................................................................................................. 21
O.C.G.A. 16-14-5 .................................................................................................. 19
O.C.G.A. 16-8-3 .................................................................................................... 20
O.C.G.A. 16-9-121 ................................................................................................ 20
O.C.G.A. 16-9-31 .................................................................................................. 20
O.C.G.A. 26-5-1 .................................................................................................... 15

vii
O.C.G.A. 26-5-2 .................................................................................................... 15
O.C.G.A. 26-5-5 .................................................................................................... 15
O.C.G.A. 26-5-6 .................................................................................................... 15
O.C.G.A. 9-10-91 .................................................................................................. 25
Rules
Fed.R.Civ.P. 12 ......................................................................................................2, 6
Fed.R.Civ.P. 15 ............................................................................................... 2, 6, 29
Fed.R.Civ.P. 8 ........................................................................................................6, 7
Fed.R.Civ.P. 9 ............................................................................................... 6, 15, 16
viii
Statement of Subject-Matter and Appellate Jurisdiction
The district court had subject matter jurisdiction over this action under 28
U.S.C. 1332, 1441, 1446, and 1453, pursuant to the Class Action Fairness Act of
2005.
This Court has appellate jurisdiction pursuant to 28 U.S.C. 1291. The
district court entered final judgment disposing of all claims on February 19, 2014.
(Docs. 40, 41). Plaintiffs-Appellants timely filed their Notice of Appeal on March
20, 2014, pursuant to Federal Rules of Appellate Procedure 3 and 4. (Doc. 42).


1
I. STATEMENT OF THE ISSUES
A. Whether Class Representatives stated a plausible claim for relief for
breach of contract, quasi-contract, and negligence per se.
B. Whether Class Representatives stated with requisite particularity claims
sounding in fraud and Georgias RICO statute.
C. Whether Class Representatives made a showing sufficient to warrant the
exercise of personal jurisdiction over RTC or, at a minimum,
jurisdictional discovery.
D. Whether the district court abused its discretion by denying leave for Class
Representatives to amend their original complaint.
II. STATEMENT OF THE CASE
Course of the Proceedings: On J une 4, 2013, Benjamin Burgess, Rhonda
Burgess, Heidi Howard, J oyce Martin, Beth Karampelas, Terri Dacy, and Michael
Dacy (Class Representatives) filed suit against Religious Technology Center, Inc.
(RTC), Association for Better Living and Education International (ABLE),
Narconon International (International), and Narconon of Georgia, Inc. (NNGA)
(referred to collectively as Defendants), in the State Court of Gwinnett County,
Georgia, individually and on behalf of a class of individuals who paid money to
Defendants to procure drug or alcohol rehabilitation services at NNGA, asserting

2
claims of fraud, breach of contract, unjust enrichment, detrimental reliance,
negligence per se, and Georgias Racketeer Influence and Corrupt Organizations
(RICO) statute, O.C.G.A. 16-14-1 et seq. (Doc. 1-1, hereinafter Compl.). On
J uly 2, 2013, International filed a notice of removal to the Northern District of
Georgia, pursuant to the Class Action Fairness Act, 28 U.S.C. 1332(d), and 28
U.S.C. 1441 and 1446. (Doc. 1).
On J uly 9, 2013, ABLE, International, and NNGA filed motions to dismiss
the complaint for failure to state a claim pursuant to Fed.R.Civ.P. 12(b)(6). (Docs.
4, 5, 9). On the same day, RTC filed a motion to dismiss for lack of personal
jurisdiction, pursuant to Fed.R.Civ.P. 12(b)(2), or alternatively, for failure to state a
claim pursuant to Rule 12(b)(6). (Doc. 7). Class Representatives filed a response
in opposition to each motion on J uly 23, 2013. (Docs. 14, 15, 16, 19). In their
responses, Class Representatives sought leave to amend the complaint pursuant to
Fed.R.Civ.P. 15(a) and jurisdictional discovery with respect to RTCs motion to
dismiss. (Id.). Defendants filed their reply briefs on August 9, 2013. (Docs. 28, 29,
30, 31).
On February 19, 2014, the district court issued its order granting RTCs
motion to dismiss pursuant to Rule 12(b)(2) for lack of personal jurisdiction, and
granting ABLE, International, and NNGAs motions to dismiss for failure to state a
claim pursuant to Rule 12(b)(6). (Doc. 40). The district court denied Class

3
Representatives leave to amend and denied their request for jurisdictional discovery.
(Id.). The district court dismissed with prejudice Class Representatives complaint
and closed the action. (Docs. 40, 41).
Statement of the Facts: Class Representatives paid money to Defendants to
enroll themselves or their loved ones in the Narconon program at NNGA, and to
cover costs associated with books, housing, and related goods and services. (Compl.
31). The Narconon program was established in 1966 as a drug and alcohol
rehabilitation program based on the writings of L. Ron Hubbard, a science-fiction
writer and the founder of the Church of Scientology. (Id. 38). Narconons
treatment for drug and alcohol addicts is based exclusively on Hubbards writings,
also known as technology or tech. (Id. 41). Narconons proponents believe
that strict adherence to the Hubbard technology alone will completely address the
rehabilitation needs of its patients. (Id. 46). Therefore, patients receive no
counseling or education in drug and alcohol rehabilitation, and the therapeutic
discussion of drugs and their effects is actually discouraged. (Id.).
ABLE operates as an umbrella group that oversees the drug and alcohol
rehabilitation activities of the Church of Scientology. (Id. 24). ABLE is responsible
for ensuring that programs using Hubbards technology, including Narconon, meet
the Church of Scientologys and RTCs exacting standards. (Id. 65). To that end,
ABLE licenses the Narconon materials to International, conducts inspections of

4
Narconon centers, and otherwise actively manages the daily operations of
International and NNGA. (Id. 24, 64-66). International owns, licenses, operates,
and otherwise directs drug and alcohol rehabilitation services at Narconon centers,
including NNGA. (Id. 38). As the parent/licensor of NNGA, International
exercises direct control over the time, manner, and method of NNGAs operations.
(Id. 27). Finally, ABLE, International, and NNGA are controlled by RTC, which
oversees Church of Scientology activities and serves as the final arbiter and enforcer
of orthodoxy for all Scientology-related activities and organizations. (Id. 21-22).
RTCs Chairman of the Board, David Miscavige, is the current leader of the
Church of Scientology and its many affiliated organizations, having assumed that
role shortly after Hubbards death in 1986. (Doc. 19 at 4). Under Miscaviges
leadership, management, and control, Defendants function as an interrelated and
interdependent network of entities that aim to expand the reach of the Church of
Scientology. (Id.)
As alleged in the complaint, Defendants have repeatedly made a vast array of
false and misleading claims and employed other deceptive techniques in their
dealings with drug and alcohol addicts and their families, through websites,
marketing materials, advertising, and personnel. (Compl. 74). These
misrepresentations pertain to, among other things: the effectiveness of the Narconon
program, which consists of a sauna and vitamin program and written training

5
routines originally devised to teach communication skills to Scientologists;
Narconons purported success rate; Narconons connection to Scientology; the
certifications of NNGAs staff; NNGAs housing and drug-free environment; and
the nature of its government licensing. (Id. 74-105). By reason of their justified
reliance on Defendants false statements and material misrepresentations, Class
Representatives filed the complaint, seeking restitution, compensatory damages, and
punitive damages, for their actual physical, mental, and economic harm. (Id. 170-
72).
Standard of Review: Where a district court dismisses the complaint for
failure to state a claim, this Court will determine whether, considering the facts in
the light most favorable to the plaintiffs, it appears beyond doubt that [they] can
prove no set of facts that would entitle [them] to relief. Welch v. Laney, 57 F.3d
1004, 1008 (11th Cir. 1995) (citation omitted). This Court will review a dismissal
for lack of personal jurisdiction de novo. Madara v. Hall, 916 F.2d 1510, 1514 (11th
Cir. 1990). This Court reviews a district courts refusal to allow the plaintiffs to
amend the complaint for an abuse of discretion. See Sosa v. Airprint Sys., Inc., 133
F.3d 1417, 1419 (11th Cir. 1998).
III. SUMMARY OF THE ARGUMENT


6
First, Class Representatives stated plausible claims for relief for breach of
contract, unjust enrichment, promissory estoppel, and negligence per se. In
dismissing these claims, the district court applied an erroneous understanding of both
Rule 8(a)s pleading standard and the required elements of these claims under
Georgia law.
Second, given the blurred and concealed relationship among the Defendants,
combined with the extent and scope of the perpetrated fraud, Class Representatives
pleaded their fraud and civil RICO claims with sufficient specificity under Rule 9(b),
and the district court erred in dismissing these claims.
Third, the district court erred in dismissing Class Representatives claims
against RTC pursuant to Rule 12(b)(2) because it applied an incorrect understanding
of agency law to determine that RTC was not subject to personal jurisdiction through
Georgias Long Arm Statute. Correspondingly, the district court erred by denying
Finally, Class Representatives were entitled to at least one opportunity to
amend their original complaint pursuant to Rule 15(a), as they sought leave to do so,
they had no notice of the defects in the complaint, and there was no evidence of bad
faith, delay, or prejudice to Defendants. The district court abused its discretion by
denying Class Representatives the opportunity to amend their complaint.

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IV. ARGUMENT AND CITATION OF AUTHORITY
This Court should reverse the district courts dismissal of Class
Representatives complaint and remand for further proceedings. The district court
erred in dismissing the complaint because Class Representatives: (A) stated a claim
for relief with respect to their contract, quasi-contract, and negligence per se claims;
(B) pleaded their claims sounding in fraud with the requisite specificity; and (C)
alleged a sufficient basis to exercise personal jurisdiction over RTC or, at a
minimum, to warrant jurisdictional discovery. Alternatively, (D) the district court
abused its discretion by denying Class Representatives leave to amend their original
complaint.
A. Class Representatives stated a plausible claim for relief for breach
of contract, quasi-contract, and negligence per se.

A pleading in a civil action must contain a short and plain statement of the
claim showing that the pleader is entitled to relief. Fed.R.Civ.P. 8(a)(2). When
reviewing a motion to dismiss, a court, as a general rule, must accept the plaintiffs
allegations as true and evaluate all plausible inferences derived from those facts in
favor of the plaintiff. See Ashcroft v. Iqbal, 556 U.S. 662, 680, 129 S.Ct. 1937,
1951 (2009) (holding that a court should deny a motion to dismiss where the
pleading asserts non-conclusory, factual allegations that, if true, would push the
claim across the line from conceivable to plausible (quoting Bell Atl. Corp. v.

8
Twombly, 550 U.S. 544, 555, 570, 127 S.Ct. 1955, 1965, 1974 (2007))); Am. Dental
Assn v. Cigna Corp., 605 F.3d 1283, 1289 (11th Cir. 2010) (quoting Twombly, 550
U.S. at 570) (explaining that allegations in a complaint must contain sufficient
factual matter, accepted as true, to state a claim to relief that is plausible on its
face.). A claim is facially plausible when the plaintiffs factual allegations allow[
] the court to draw the reasonable inference that the defendant is liable for the
misconduct alleged. Iqbal, 556 U.S. at 678.
The basic purpose of the Federal Rules is to administer justice through fair
trials, not through summary dismissals . . . . Surowtiz v. Hilton Hotels Corp., 383
U.S. 363, 373, 86 S.Ct. 845, 851 (1966). With this background in mind, determining
whether a complaint states a plausible claim for relief will be a context-specific task
that requires the reviewing court to draw on its judicial experience and common
sense. Iqbal, 556 U.S. at 678-79.
1. Breach of contract
The elements for a breach of contract claim in Georgia are the (1) breach
and the (2) resultant damages (3) to the party who has the right to complain about
the contract being broken. Kuritzky v. Emory Univ., 669 S.E.2d 179, 181 (Ga. Ct.
App. 2008). To constitute a valid contract, there must be parties able to contract, a
consideration moving to the contract, the assent of the parties to the terms of the
contract, and a subject matter upon which the contract can operate. O.C.G.A. 13

9
31. Under Georgia contract law, a complaint that alleges a more than de minimus
breach of contract and resultant damages is sufficient to allege breach of contract
any dispute regarding the existence of an enforceable contract [does] not present
grounds for dismissal. TechBios, Inc. v. Champagne, 688 S.E.2d 592, 595 (Ga. Ct.
App. 2009). Moreover, an agreement impose[s] upon each party a duty of good
faith and fair dealing in the performance and completion of their respective duties
and obligations, which includes substantial compliance with the spirit, and not
merely the letter, of a contract. Fisher v. Toombs Cnty. Nursing Home, 479 S.E.2d
180, 184 (Ga. Ct. App. 1996).
The district court dismissed Class Representatives breach of contract claim
because they fail[ed] to establish the existence of a valid contract. (Doc. 40 at 19).
The district court reasoned that Class Representatives were required to show the
breach of specific contract provision. (Id. at 19-20). The district court found that,
without pointing to a specific contract provision, there can be no breach of the duty
of good faith and fair dealing. (Id. at 20-21). The district courts decision was in
error for several reasons.
First, Class Representatives were required to make a plausible showing, with
all inferences made in their favor, as to the existence of a contract they were not
required to attach a copy of the contract to their complaint. Second, Class
Representatives sufficiently alleged breach of contract by asserting that, despite their

10
contract with Defendants for drug and alcohol rehabilitation services, those services
were never provided. Specifically, Class Representatives alleged that Defendants
breached their contractual duty to provide drug and alcohol rehabilitation services
by, inter alia, misrepresenting Narconons connection to Scientology, providing
false information to regulators to avoid oversight, misrepresenting the addiction-
treating properties of the sauna, mega-doses of niacin, and other components of
Narconon treatment, falsely representing the scientific evidence and success rate
of Narconon, misrepresenting the training given to its staff members, and failing to
provide a drug-free environment for its patients. (Id. 115-18). Defendants
breach deprived Class Representatives of the benefit for which they contracted,
namely, legitimate drug and alcohol rehabilitation treatment. (Id. 18).
Moreover, to fulfill its agreement to actually and legally treat drug and
alcohol addiction and to discharge its duty in good faith, NNGA was required to
comply with the aforementioned criteria. See, e.g., Regional Pacesetters v. Eckerd
Drugs of Ga., 358 S.E.2d 481, 483 (Ga. Ct. App. 1987) ([W]hatever may be fairly
implied by the terms of the agreement is in the eyes of the law embodied in the
agreement. (quotation omitted)). Given that a defendants compliance with the
spirit of contract may be a jury question, see Fisher, 479 S.E.2d at 184, the district
court erred in finding that Class Representatives failed to state a claim as a matter of
law.

11
Moreover, as Class Representatives argued in response to NNGAs motion to
dismiss, specific provisions of the contracts at issue were breached. For example,
the Rules of Conduct, incorporated into the Financial Policy and Agreement
Form, contained provisions prohibiting the possession, use, exchange, or sale of
drugs and alcohol. (Doc. 16 at 7-11, citing Doc. 9-2). Yet, NNGA failed to provide
a safe and sober facility for its patients. (Compl. 117). This was a breach of a
specific contractual provision.
2. Unjust Enrichment
Class Representatives also alleged that Defendants unlawfully, unjustly, and
directly obtained payment from them, resulting in unjust enrichment. (See Compl.
119-21). The theory of unjust enrichment applies when there is no legal contract
and when there has been a benefit conferred which would result in an unjust
enrichment unless compensated. Smith Serv. Oil Co. v. Parker, 549 S.E.2d 485,
487 (Ga. Ct. App. 2001). Class Representatives allegation of a breach of contract
did not prevent them from alleging unjust enrichment. See United Techs. Corp. v.
Mazer, 556 F.3d 1260, 1273 (11th Cir. 2009) (noting that Fed.R.Civ.P. 8(d)
expressly permits the pleading of both alternative and inconsistent claims).
The district court dismissed the unjust enrichment claim for the sole reason
that, because Class Representatives pointed to specific contractual provisions in
response to NNGAs motion to dismiss the breach of contract claim, all parties

12
concede[d] that the contracts at issue in the named plaintiffs breach of contract
claim are valid, and therefore, there can be no unjust enrichment claim as a matter
of law. (Doc. 40 at 23-24). This is reversible error for several reasons.
First, the district court rejected Class Representatives breach of contract
claim in part because they fail[ed] to establish [ ] the specific contract at issue in
this action . . . . (Id. at 21). However, the district court then rejected the unjust
enrichment claim, determining that Class Representatives had conceded the validity
of the contract. (Id. at 23). It is nonsensical that Class Representatives could have
failed to sufficiently identify a contract, and yet have also conceded the validity of a
contract sufficient to bar their unjust enrichment claim.
Second, Class Representatives argument regarding the sufficiency of its
breach-of-contract claim at the motion to dismiss phase must not be construed to bar
an unjust enrichment claim. Under the district courts reasoning, any complaint that
pointed to a breached contract would have essentially conceded the validity of that
contract, therefore preventing any party from alleging both a breach of contract and
unjust enrichment claim in the same action. This is directly contrary to the Rules of
Civil Procedure and Eleventh Circuit law, which allow Class Representatives to
proceed on seemingly inconsistent theories of recovery.
3. Detrimental Reliance/Promissory Estoppel

13
In Count Four, Class Representatives alleged that they reasonably relied on
Defendants representations that NNGA patients would receive drug or alcohol
rehabilitation services, Defendants failed to live up to those representations, and
Class Representatives were harmed by their reliance on Defendants promise to
perform, entitling them to damages. (Compl. 125). Class Representatives
conceded below that this count should have been framed as one of promissory
estoppel, rather than detrimental reliance. See Houston v. Houston, 600 S.E.2d
395, 396 (Ga. Ct. App. 2004) (The elements of a promissory estoppel cause of
action are: (1) defendant[s] made certain promises, (2) defendant[s] should have
expected that plaintiffs would rely on such promises, (3) the plaintiff[s] did in fact
rely on such promises, and (4) injustice can be avoided only by enforcement of the
promise. (alterations omitted)).
1

A complaint need not specify in detail the precise theory giving rise to
recovery, Evans v. McClain of Ga., Inc., 131 F.3d 957, 964 n.2 (11th Cir. 1997),
and neither Twombly nor Iqbal changed this principle, Hatmarker v. Meml Med.
Ctr., 619 F.3d 741, 743 (7th Cir. 2010). All that is required is that the defendant

1
Class Representatives sought to amend the complaint pursuant Fed.R.Civ.P.
15(a) to correct this phrasing. The district court denied leave because permission
was sought in the response to dismiss rather than in a separate motion. This
amounted to an abuse of discretion, as discussed in Part IV-D, infra.

14
be on notice as to the claim being asserted against it and the grounds on which it
rests. Evans, 131 F.3d at 964 n.2.
While Class Representatives incorrectly categorized the legal theory
underlying their claim, they alleged the necessary elements of promissory estoppel,
putting Defendants on notice as to the nature of that claim. As a result, the district
court erred in dismissing with prejudice Class Representatives claim for promissory
estoppel.
4. Negligence Per Se
For the violation of a statute or regulation to amount to negligence per se,
Georgia courts look to the purposes of the legislation to determine: (1) whether the
injured person falls within the class of persons it was intended to protect; and
(2) whether the harm complained of was the harm it was intended to guard against.
Walter v. Orkin Exterminating Co., 385 S.E.2d 725, 728 (Ga. Ct. App. 1989).
Here, the Georgia Department of Community Health (DCH) regulations
provide for minimal requirements for the licensing and inspection of drug abuse
treatment programs. Ga. Comp. R. & Regs. 290-4-2-.02. The Drug Abuse
Treatment and Education Act (the Act) authorized DCH to develop and enforce
these regulations. The Act tasks DCH with promulgating minimum standards of
quality and service, encompassing the qualifications of staff, the content and quality
of services, the safety of housing facilities, and the effectiveness of programs. See

15
O.C.G.A. 26-5-5 to -6.
2
The Act clearly states that the regulations purposes are,
inter alia, to ensure that every governing body which operates a drug abuse
treatment and education program is licensed to do so[,] and to meet the rehabilitative
needs of drug dependent persons while safeguarding their individual liberties.
O.C.G.A. 26-5-1 to -6.
Class Representatives believed that they were securing drug and alcohol
rehabilitation services at a facility that was legally and properly licensed. NNGAs
failure to comply with Georgia regulations resulted in the failure to safeguard the
liberties of its patients, as required by the Act. See O.C.G.A. 26-5-2. As a result,
and contrary to the district courts finding (Doc. 40 at 26), NNGAs negligent acts
directly affected injured the class of persons the Act was designed to protect, in the
manner in which the Act was designed to protect against.
B. Class Representatives stated with particularity claims sounding in
fraud and Georgias RICO statute.

Pursuant to Fed.R.Civ.P. 9(b), a party must state with particularity the
circumstances constituting fraud or mistake. The purpose of this particularity
requirement is to alert[ ] defendants to the precise misconduct with which they are
2
DCHs regulations, in turn, require, among other things, that drug and
alcohol rehabilitation centers create individualized treatment, discharge, and
aftercare plans, employ clinical and medical directors, and implement policies and
procedures for drug-testing employees and patients. (See Compl. 101-05).

16
charged and protect[ ] defendants against spurious charges of immoral and
fraudulent behavior. Ziemba v. Cascade Intl, Inc., 256 F.3d 1194, 1202 (11th Cir.
2001) (quotations omitted). Rule 9s particularity requirements must be read in
conjunction with Rule 8 so as not to abrogate the concept of notice pleading.
Durham v. Bus. Mgmt. Assocs., 847 F.2d 1505, 1511 (11th Cir. 1988). Rule 9 does
not require the plaintiff to explain his entire case, only that he state the actions that
allegedly constitute fraud. United States v. Gen. Dynamics, 315 F. Supp. 2d 939,
945 (N.D. Ill. 2004).
To satisfy Rule 9(b)s particularity standard, this Court generally requires a
complaint to identify (1) the precise statements or misrepresentations made; (2) the
time, place, and person responsible for the statement; (3) the content and manner in
which the statements misled the plaintiff; and (4) what the defendants gain by the
alleged fraud. Ambrosia Coal & Const. Co. v. Pages Morales, 482 F.3d 1309, 1316
17 (11th Cir.2007). This Court has observed that Rule 9(b)s requirements can be
flexible depending on the factual context. See, e.g., Brooks v. Blue Cross & Blue
Shield of Fla., Inc., 116 F.3d 1364, 1371 (11th Cir. 1997).
The district court dismissed Class Representatives fraud and civil RICO
claims, finding that Class Representatives failed to plead those claims with the
specificity Rule 9(b) requires. (Doc. 40 at 13-18). However, as demonstrated below,

17
Class Representatives sufficiently alleged their fraud and civil RICO claims in
keeping with the concepts of notice pleading.
3

1. Fraudulent Misrepresentation
Under Georgia law, fraud has five elements: (1) a false representation by a
defendant; (2) scienter; (3) intention to induce the plaintiff to act; (4) justifiable
reliance by the plaintiff; and (5) damages. Artzner v. A & A Exterminators, Inc., 531
S.E.2d 200, 204 (Ga. Ct. App. 2000). Class Representatives alleged a time period
for Defendants fraud by specifying when they each sought the services of NNGA.
(See Compl. 2, 6, 10, 14, 17). Class Representatives then alleged the 11 specific
fraudulent statements and/or acts made by Defendants. (See id. 111). In so doing,
Class Representatives sufficiently alleged the what and when of the fraud. See,
e.g., Stires v. Carnival Corp., 243 F. Supp. 2d 1313, 1319-20 (M.D. Fla. 2002)
(finding that the plaintiffs sufficiently alleged fraud when complaint included, inter
alia, specific misrepresentations and where they occurred).
Likewise, Class Representatives set forth the relationship among the
Defendants as it pertains to the who for the perpetrated fraud. (See Compl. 20-

3
Because the district court dismissed Class Representatives fraud and RICO
claims for the failure to specify the time and place of the misrepresentations, and the
role of each Defendant in the fraud, this brief will not set forth each element of the
fraud and civil-RICO claims as alleged in the complaint, except to the extent the
district court found Class Representatives allegations insufficient.

18
28, 62-73). Specifically, the complaint alleged that RTC, ABLE, and International
controlled the time, manner, and method of NNGAs operations (id.); ABLE,
International, and NNGA misrepresented their connection to the Church of
Scientology (id. 80-81); and patients are referred to Narconon through
purportedly objective Internet and telephone services that are actually run and/or
paid for, in whole or in part, by International and/or NNGA (id. 87-89). Class
Representatives also alleged that ABLE actively ran each Narconon facility by,
among other things, overseeing the Church of Scientologys secular activities,
licensing Hubbards material to Narconon International, inspecting Narconon
centers, including NNGA, to check for compliance, providing technical and
financial support to Narconon International, and promoting Narconon through
nationwide advertising and government lobbying (id. 62-66, 69-73), and that RTC
ultimately controlled the operations of ABLE, International, and NNGA (Doc. 19 at
4). Ultimately, Defendants acted in concert either as agents or principals of one
another, partners, joint venturers, or co-conspirators. (Id. at 5).
Given the blurred and concealed relationship among Defendants, combined
with the extent and scope of the fraud, Class Representatives satisfied Rule 9(b) by
providing Defendants with enough information to meaningfully respond. See, e.g.,
Gen. Dynamics, 315 F. Supp. 2d at 945 (finding that a qui tam relator alleging fraud
was not required to provide names of employees who allegedly defrauded the

19
government because those identities were in exclusive possession of employer).
Class Representatives provided further support for one of Defendants fraudulent
statements, regarding the Narconon programs success rate, by attaching an email
acknowledging that the 70% success rate quoted to Class Representatives was not
supported by scientific evidence. (See Compl., Ex. B). As a result, Rule 9(b)s
purposes of alerting Defendants of the precise misconduct with which they are
charged while preventing spurious charges have been satisfied. See Ziemba, 256
F.3d at 1202.
2. Georgia RICO Claims
The Georgia RICO Act was enacted to impose criminal penalties against those
engaged in an interrelated pattern of criminal activity motivated by or the effect of
which is pecuniary gain or economic or physical threat or injury, and to provide
civil remedies to compensate those injured by reason of such acts. O.C.G.A. 16-
14-2(b) & 16-14-5; Williams Gen. Corp. v. Stone, 614 S.E.2d 758, 759 (Ga. 2005).
The Georgia RICO Act is to be liberally construed to effectuate the remedial
purposes embodied in its operative provisions. See O.C.G.A. 16-14-2(b). While
a RICO predicate act sounding in fraud must be pleaded in accordance with Rule
9(b), a plaintiff is not required to plead a predicate act with particularity if it does
not sound in fraud. See Liquidation Commn of Banco Intercontinental, S.A. v.
Renta, 530 F.3d 1339, 1355-56 (11th Cir. 2008). Class Representatives alleged that

20
Defendants violated Georgias RICO statute through several predicate acts: theft by
deception; mail and wire fraud; credit card fraud and identity theft; and false
statements to a government agency.
a. Theft by Deception and Mail and Wire Fraud: A person commits the
offense of theft by deception when he obtains property by any deceitful means or
artful practice with the intention of depriving the owner of the property. O.C.G.A.
16-8-3. The offenses of mail and wire fraud require that a person: (1) intentionally
participates in a scheme to defraud; and (2) uses or causes the use of the mail or
wires for the purpose of executing the scheme. United States v. Ward, 486 F.3d
1212, 1221-22 (11th Cir. 2007).
For the same reasons discussed in Part IV-B-1, supra, in connection with
Class Representatives fraudulent misrepresentation claim, the complaints
allegations are sufficiently specific to give Defendants notice of the basis for the
Georgia RICO claims based on theft by deception and mail or wire fraud. As a
result, the district court erred in dismissing the RICO claims based on theft by
deception and mail or wire fraud.
b. Credit-Card Fraud and Identity Theft: A defendant commits credit-card
fraud when he obtains and uses a card without the cardholders consent. O.C.G.A.
16-9-31 to -33. A defendant commits identity fraud when he willfully and
fraudulently, without authorization or consent, uses identifying information

21
concerning a person. O.C.G.A. 16-9-121. Class Representatives sufficiently
pleaded credit card fraud and identity theft as it pertains to those who fell victim to
this aspect of Defendants fraud: the Burgesses and the Dacys. (See Compl. 4,
19). Specifically, Class Representatives alleged the time period when they enrolled
a patient in NNGA and that Defendants opened high-interest credit cards in their
names to fund NNGAs services, without their knowledge or permission. (Id. 4,
19, 154-69). Particularly in the context of identity theft, where the nature of the
fraud entails concealment from the victims, Class Representatives alleged their
claims with sufficient specificity to survive a motion to dismiss.
c. False Statements to a Government Agency: Class Representatives alleged
that Defendants engaged in racketeering activity by providing false statements and
writings to a government agency, in violation of O.C.G.A. 16-10-20 and 16-14-
3, by knowingly and willfully concealing from the State of Georgia on its license
applications NNGAs illegal operation as a residential drug and alcohol
rehabilitation facility without the proper licensing, and while concealing its failure
to, inter alia, create individualized treatment plans, update patient files, retain a
Clinical Director and Medical Director, and ensure a drug-free environment.
(Compl. 145-153).
The district court dismissed Class Representatives RICO claim based on the
submission of false statements to the government Georgia for the sole reason that

22
the claim sounded in fraud, thereby necessitating application of the Rule 9(b)
pleading standard. (Doc. 40 at 17-18). However, Georgia law provides that a
Georgia RICO claim based on a violation of O.C.G.A. 16-10-20 may go forward
even where a plaintiffs fraud claim is not pled with specificity. In Maddox v.
Southern Engineering Co., 453 S.E.2d 70, 72 (Ga. Ct. App. 1994), the court held
that the plaintiffs inability to show that he was actually misled by the false
statements and his inability to specify what false statements were made to state
agencies did not warrant dismissal of his Georgia RICO claim, and the trial courts
dismissal for failure to plead with specificity was reversible error.
Moreover, even if this Court were to determine that Rule 9(b) applies, Class
Representatives allegations met this elevated standard. The complaint alleged
specific false statements, the government agency to which the statements were made,
and the timeframe when the statements took place. (Compl 90-105, 150).
C. Class Representatives made a showing sufficient to warrant the
exercise of personal jurisdiction over RTC or, at a minimum,

Class Representatives allegations against RTC stem from RTCs complete
control over the Church of Scientology, including Scientologys secular social
betterment organizations, ABLE, International, and NNGA. (Doc. 19 at 2). RTC
holds out the Narconon rehabilitation program as its own, promotes the Narconon
program to the public, and exercises control over the way in which individual

23
Narconon centers operate. (Id.). Ultimately, RTC has sought to promote and expand
the Narconon program as part of its goal to expand the reach of Scientology and
clear the planet of non-Scientologists. (Id.). The facts, as alleged in the complaint
and further supported in response to RTCs motion to dismiss, show that the district
court erred by finding that it could not exercise personal jurisdiction over RTC and
declining to allow jurisdictional discovery on the issue.
As background, RTC attached a declaration to its motion to dismiss for lack
of personal jurisdiction in which its president asserted that ABLE, International, and
NNGA were not agents of RTC. (Doc. 7-2 at 2). In response, Class Representatives
filed a brief and numerous exhibits citing specific examples of RTCs association
with Narconon and its control over ABLE, International, and NNGA. (Doc. 19, Exs.
A-EE). The district court found that Class Representatives failed to allege an
express, implied, or apparent agency relationship between RTC and ABLE,
International, and NNGA, and declined to exercise personal jurisdiction or allow
jurisdictional discovery based solely on this determination. (Doc. 40 at 6-9).
In the context of a motion to dismiss for lack of personal jurisdiction in which
no evidentiary hearing is held, the plaintiff bears the burden of establishing a prima
facie case of jurisdiction over the movant, non-resident defendant. Morris v. SSE,
Inc., 843 F.2d 489, 492 (11th Cir. 1988). To evaluate whether plaintiff carried this
burden, the district court must construe the allegations in the complaint as true, to

24
the extent they are uncontroverted by defendants affidavits or deposition testimony.
Id. Where the evidence presented by the parties affidavits and deposition testimony
conflicts, the court must construe all reasonable inferences in favor of the non-
movant plaintiff. Id.
A federal court sitting in diversity undertakes a two-step inquiry in
determining whether personal jurisdiction exists: the exercise of jurisdiction must
(1) be appropriate under the state long-arm statute and (2) not violate the Due
Process Clause of the Fourteenth Amendment to the United States Constitution.
4

Diamond Crystal Brands, Inc. v. Food Movers Intl, Inc., 593 F.3d 1249, 1257-58
(11th Cir. 2010) (quotation omitted). Georgias Long Arm statute provides as
follows:
A court of this state may exercise personal jurisdiction over any
nonresident or his or her executor or administrator, as to a cause of
action arising from any of the acts, omissions, ownership, use, or
possession enumerated in this Code section, in the same manner as if
he or she were a resident of this state, if in person or through an agent,
he or she:

(1) Transacts any business within this state;

(2) Commits a tortious act or omission within this state, except as to a
cause of action for defamation of character arising from the act; [or]

(3) Commits a tortious injury in this state caused by an act or omission
outside this state if the tort-feasor regularly does or solicits business, or
engages in any other persistent course of conduct, or derives substantial

4
Because the district court did not reach the due-process issue, Class
Representatives brief focuses on the inquiry under Georgias Long Arm statute.

25
revenue from goods used or consumed or services rendered in this state.
. . .

O.C.G.A. 9-10-91. As set forth above, Georgias Long Arm statute provides for
the exercise of personal jurisdiction over a nonresident defendant where one of the
statutes subsections is satisfied by the acts or omissions of the non-resident
defendant or its agent. See id.
Under Georgia law, [t]he relation of principal and agent arises wherever one
person, expressly or by implication, authorizes another to act for him or subsequently
ratifies the acts of another in his behalf. O.C.G.A. 10-6-1. The fact of agency
may be established by circumstantial evidence, such as the conduct of the parties.
Handy v. DeKalb Med. Ctr., 679 S.E.2d 107, 108 (Ga. Ct. App. 2009). As a general
rule, the question of authority to do an act, when it is to be determined from disputed
facts or undisputed facts from which conflicting inferences may be drawn, must be
decided by the jury . . . . Lee v. Just Scott Designs, Inc., 754 S.E.2d 616, 620 (Ga.
Ct. App. 2014).
The district court erred when it found that Class Representatives had not
alleged a basis to exercise long-arm jurisdiction for at least three reasons.
5
First, the
district court found, erroneously, that Class Representatives conceded that express,

5
Class Representatives alleged that long-arm jurisdiction would be
appropriate under O.C.G.A. 9-10-91(1), (2), and (3). (Doc 19 at 18-20). Because
the district courts order addressed only the agency portion of O.C.G.A. 9-10-91,
this brief focuses on that analysis.

26
actual agency was not present. Specifically, the district court reasoned that Class
Representatives could not proceed under a theory of express agency because they
concede[d] that RTC has kept itself formally separate from Defendants ABLE,
International, and NNGA. (Doc. 40 at 7 (quoting Doc. 19 at 7)). However, Class
Representatives actually alleged, While Defendant RTC may have kept itself
formally separate . . . Plaintiffs have alleged, and can show, that the reality is quite
different. (Doc. 19 at 7 (emphasis added)). Class Representatives did not concede
that no actual agency existed to the contrary, they presented evidence that RTC
controlled ABLE, International, and NNGA to the extent that it created an agency
relationship, either express or implied, creating a conflict in evidence that the district
court should have construed in favor of Class Representatives.
Second, the district court erred by requiring Class Representatives to show
that they were aware of, and relied on an agency relationship, an element not
required by Georgia law for an action based on express or implied agency. In
reasoning that the complaint failed to allege any agency relationship, the district
court found, As the named plaintiffs fail to establish that third parties are aware of,
and relied on, RTCs alleged control, no principal/agent relationship is established .
. . (Doc. 40 at 8). While a claim of apparent agency requires such a showing,
6
there

6
Apparent authority to do an act is created as to a third person when the
statements or conduct of the alleged principal reasonably cause the third party to
believe that the principal consents to have the act done on his behalf by the purported

27
is no requirement under Georgia law that a plaintiff be aware of an express or implied
agency relationship to hold the principal liable. To the contrary, [t]o prove actual
agency, the purported principal must have assumed the right to control the method,
manner, and time of the purported agents work . . . . Satisfaction & Serv. Housing,
Inc., 642 S.E.2d at 366. For an inquiry of actual, not apparent agency, the perception
of a third party is not part of the analysis. See id.
Third, while the district court disregarded Class Representatives assertions
of RTCs control over ABLE, International, and NNGA in its agency analysis, the
issue of control is directly relevant and central to the actual agency analysis. See id.
Although not addressed in the district courts order, Class Representatives
introduced extensive evidence regarding RTCs involvement in Narconon and
control over ABLE, International, and NNGA. Class Representatives introduced
documents illustrating Narconons association with Scientology and its role in
expanding the reach of Scientology at the ultimate direction of RTC and its
Chairman, David Miscavige. (See Doc. 19 at 8-10, Exs. A, B, C, D, E, F, G, H, I, J ,
K). They also introduced evidence demonstrating a chain of command extending
from Miscavige and RTC down through ABLE, International, and NNGA, in
support of allegations that RTC bypasses corporate structure to govern Scientology-
agent. Satisfaction & Serv. Hous., Inc. v. SouthTrust Bank, Inc., 642 S.E.2d 364,
366 (Ga. Ct. App. 2007).

28
related activities as it sees fit. (See Doc. 19 at 10-13, Exs. L, M, N, O, P). Class
Representatives evidence in support of personal jurisdiction included evidence that
NNGA, ABLE, and International reported on their activities to RTC, illustrating
RTCs control over individual Narconon centers. (See Doc. 19 at 13-14, Exs. Q, R).
The evidence also included various instances of RTCs promotion and expansion of
the Narconon program. (See Doc. 19 at 14-18, Exs. S, T, U, V, W, X, Y, Z, AA,
BB, CC, DD, EE).
Finally, Class Representatives allegations and evidence in support of the
exercise of personal jurisdiction, at a minimum, warranted jurisdictional discovery
as to the extent of RTCs contacts in Georgia. See, e.g., Cable News Network, Inc.
v. Video Monitoring Servs. of Am., Inc., 723 F. Supp. 765, 770 (N.D. Ga. 1989)
(noting that a court has discretion to allow the parties time to engage in discovery
relevant to the jurisdictional issue where there is a basis for believing that discovery
would be fruitful).
D. The district court abused its discretion by denying leave for Class
Representatives to amend their original complaint.

As background, Class Representatives filed the complaint in Georgia state
court. (Doc. 1). One week after Defendants removed the case to federal court, and
before any amendments to the complaint, Defendants filed their motions to dismiss.
(Docs. 1, 2). In their responses to those motions, Class Representatives requested

29
the opportunity to amend the complaint pursuant to Fed.R.Civ.P. 15(a). The district
court denied leave for the sole reason that Class Representatives requested leave in
their responses rather than in a separate motion. (Doc. 40 at 25).
A district courts discretion to dismiss a complaint without leave to amend is
severely restricted by Rule 15(a), which directs that leave to amend shall be freely
given when justice so requires. Bryant v. Dupree, 252 F.3d 1161, 1163 (11th Cir.
2001) (quotations omitted). The Supreme Court has emphasized that this mandate
is to be heeded, Foman v. Davis, 371 U.S. 178, 182, 83 S.Ct. 227, 230 (1962), and
leave should be denied only when (1) the amendment would be prejudicial to the
opposing party, (2) there has been bad faith or undue delay on the part of the moving
party, or (3) the amendment would be futile. Id. Ordinarily, a party must be given
at least one opportunity to amend before the district court dismisses the complaint.
Corsello v. Lincare, Inc., 428 F.3d 1008, 1014 (11th Cir. 2005).
This Court has held that a district court abused its discretion by denying leave
to amend a complaint when the plaintiffs included a request to amend in their
response to a motion to dismiss. See Bryant, 252 F.3d at 1163. In Bryant, this Court
emphasized that, while the plaintiffs had amended their complaint once as a matter
of course, they had no notice of the defects for which the district court dismissed
their complaint and no opportunity to cure those defects. Id. at 1164. This Court
reasoned that an opportunity to amend the complaint was warranted even where the

30
litigation had been ongoing for over three years, where there was no other evidence
of prejudice to the defendants or bad faith on the part of the plaintiffs. Id.
Here, the district court abused its discretion by denying Class Representatives
leave to amend the complaint for the sole reason that they failed to seek leave in a
separate motion. First, like the plaintiffs in Bryant, Class Representatives had no
notice of the defects in the complaint and no opportunity to amend. Second, there
was no evidence of undue delay or bad faith on the part of Class Representatives or
prejudice to Defendants. Third, while Class Representatives filed their complaint in
state court, the complaint was removed and dismissed based entirely on federal
pleading standards. Accordingly, the interests of justice weighed in favor of
permitting Class Representatives at least one opportunity to amend their complaint
before dismissing their claims with prejudice.
V. Conclusion
Based on the foregoing, Class Representatives ask this Court to reverse the
district courts dismissal of the complaint and remand for further proceedings.


31
Respectfully submitted,
/s/ J effrey R. Harris
J effrey R. Harris
Yvonne S. Godfrey
400 Colony Square
Atlanta, GA 30361
(404) 961-7650

Rebecca C. Franklin
(admission to 11th Circuit pending)
FRANKLIN LAW, LLC
400 Colony Square
Atlanta, GA 30361
(404) 961-7650



a
Certificate of Compliance
1. This brief complies with the type-volume limitation of Fed.R.App.P.

32(a)(7)(B)(iii) because it contains 6,985 words, excluding the parts of the Brief
exempted by Fed.R.App.P. 32(a)(7)(B)(iii) and 11th Cir. R. 32-4.
2. This brief complies with the type-face requirements of Fed.R.App.P. 32(a)(5)
and the type style requirements of Fed.R.App.P. 32(a)(6) because it has been
prepared in a proportionally spaced type face using Word 2010 in 14-point Times
New Roman.


b
Certificate of Service

This is to certify that on May 6, 2014, the foregoing brief was served upon
all parties to this matter via the CM/ECF system, as follows:
Cari K. Dawson, Esq.
Daniel F. Diffley, Esq.
David B. Carpenter, Esq.
Alston & Bird LLP
1201 W. Peachtree Street
Atlanta, GA 30309-3424

Attorneys for Narconon International
and Association for Better Living and
Education International
Matthew S. Coles, Esq.
Thomas M. Barton, Esq.
Aaron P.M. Tady, Esq.
Coles Barton LLP
150 South Perry Street, Suite 100
Lawrenceville, GA 30046

Attorneys for Narconon International
and Association for Better Living and
Education International
Edward H. Lindsey, J r., Esq.
J ames T. Hankins, Esq.
Goodman McGuffey Lindsey &
J ohnson, LLP
3340 Peachtree Road NE, Suite 2100

Attorneys for Narconon of Georgia,
Inc.
J ohn K. Larkins, J r., Esq.
William Taylor McNeil, Esq.
J .D. Dalbey, Esq.
Chilivis, Cochran, Larkins & Bever
LLP
3127 Maple Drive NE
Atlanta, GA 30305

Attorneys for Narconon of Georgia,
Inc.
J ohn H. Fleming, Esq.
Valerie S. Sanders, Esq.
Stacey M. Mohr, Esq.
Sutherland Asbill & Brennan LLP
999 Peachtree Street NE, Suite 2300

Attorneys for Religious Technology
Center, Inc.


c

This 6th day of May, 2014.
/s/ J effrey R. Harris
J effrey R. Harris
Yvonne S. Godfrey
400 Colony Square
Atlanta, GA 30361
(404) 961-7650

Rebecca C. Franklin
(admission to 11th Circuit pending)
FRANKLIN LAW, LLC
400 Colony Square
Atlanta, GA 30361
(404) 961-7650



Burgess Et Al V Narconon: Appeal Brief

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Appeal No.

Case: 14-11214 Date Filed: 05/06/2014 Page: 4 of 46

Statement Regarding Oral Argument

Plaintiffs-Appellants Benjamin Burgess, et al. request oral argument. This

Case: 14-11214 Date Filed: 05/06/2014 Page: 5 of 46

Case: 14-11214 Date Filed: 05/06/2014 Page: 11 of 46

Statement of Subject-Matter and Appellate Jurisdiction

III. SUMMARY OF THE ARGUMENT

1. This brief complies with the type-volume limitation of Fed.R.App.P.

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