In Garcia v. Church of Scientology Flag Service Organization, Inc., (11th Cir., Nov. 2, 2021), the U.S. 11th Circuit Court of Appeals, in a 2-1 decision, affirmed a district court decision refusing to vacate a arbitration award made under arbitration agreements between the Church of Scientology and two of its former members. After Luis and Maria Garcia were expelled from the Church as "suppressive members", they unsuccessfully sought refunds of their donations and payments. They then sued in federal court seeking $400,000 in damages. The district court compelled arbitration, and the arbitrators awarded the Garcia's only $18,495 in refunds in the first arbitration in the history of the Church of Scientology. The Garcia's unsuccessfully challenged the validity of the arbitration agreement and the conduct of the arbitrators.
On appeal to the 11th Circuit, the majority rejected the argument that the arbitration agreements were procedurally unconscionable because they did not adequately disclose the procedures that would govern the arbitration. The agreements provided that the arbitration would be “conducted in accordance with Scientology principles” by arbitrators who were “Scientologists in good standing with the Mother Church.” They also rejected the claim of substantive unconscionability. The Garcia's argued that Scientology doctrine prevented a fair hearing for suppressive members. The Church disagreed. The court concluded that the 1st Amendment prevents civil courts from resolving disputes about church doctrine.
Judge Rosenbaum dissented, contending in part:
[T]he arbitration agreement is not a valid agreement to arbitrate. Rather, in requiring the Garcias to agree to be governed at arbitration by rules that did not exist and would be devised by the Church and evolve while the arbitration proceeded, the arbitration agreement was as one-sided and unconscionable as an arbitration agreement can be.
News Service of Florida reports on the decision.
