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UNITED STATES DISTRICT COURTNORTHERN DISTRICT OF GEORGIAATLANTA DIVISION

BENJAMIN BURGESS; RHONDABURGESS; HEIDI HOWARD; JOYCEMARTIN; BETH KARAMPELAS;TERRI DACY; and MICHAEL DACY,

individually and on behalf of all otherssimilarly situated

, Plaintiffs, CIVIL ACTION No. 1:13-cv-02217-SCJv. RELIGIOUS TECHNOLOGYCENTER, INC.; ASSOCIATION FORBETTER LIVING AND EDUCATIONINTERNATIONAL; NARCONONINTERNATIONAL; andNARCONON OF GEORGIA, INC.,Defendants.

O R D E R

This matter is before the Court on Defendant Religious Technology Center,Inc.’s (“RTC”) Motion to Dismiss [Doc. No. 7], Defendant Narconon International’s(“International”) Motion to Dismiss [Doc. No. 4], Defendant Association for BetterLiving and Education International’s (“ABLE”) Motion to Dismiss [Doc. No. 5], andDefendant Narconon of Georgia, Inc.’s (“NNGA”) Motion to Dismiss [Doc. No. 9].

Case 1:13-cv-02217-SCJ Document 40 Filed 02/19/14 Page 1 of 28

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The named plaintiffs allege that International is the parent/licensor of NNGA and“exercises direct control over the time, manner, and method of NNGA’s operations” [

id.

at 13]. The named plaintiffs further allege that ABLE is a subsidiary of RTC that overseesthe alcohol rehabilitation activities of the Church of Scientology and controls the “time,

-2-For the reasons explained in this order, RTC’s, International’s, ABLE’s, and NNGA’s(collectively “Defendants”) respective motions are

GRANTED

.

I.FACTUAL AND PROCEDURAL BACKGROUND

NNGA is a nonprofit corporation that provides a drug and alcoholrehabilitation service known as the Narconon program [Doc. No. 1-1, 16]. TheNarconon program is based on the writings of L. Ron Hubbard, the founder of theChurch of Scientology [

id.

]. Benjamin Burgess, Rhonda Burgess, Heidi Howard, Joyce Martin, Beth Karampelas, Terri Dacy, and Michael Dacy (collectively, the“named plaintiffs”) each enrolled their respective relatives in the Narconon programat NNGA [

id.

at 8-11].On June 4, 2013, the named plaintiffs, on behalf of themselves and otherssimilarly situated, filed this action the State Court of Gwinnett County, Georgia [

id.

at 46]. In their complaint, the named plaintiffs allege that Defendants made severalmisleading and false claims, through their respective advertising and marketingmaterials, about the Narconon program’s treatment of drug and alcohol addicts [

id.

at 23].

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Specifically, the named plaintiffs allege that Defendants misrepresented,

inter


manner, and method of International’s and NNGA’s businesses” [

id.

]. Also, according tothe named plaintiffs, RTC oversees “Church of Scientology activities” and “oversees andapproves the activities of International and NNGA” [

id.

at 12]. In summary, the namedplaintiffs allege that Defendants collectively control and are connected with the NNGA’suse and advertising of the Narconon program.

-3-

alia

, the Narconon progam’s connection to Scientology, the Narconon program’ssuccess rate, the certifications of its staff members, and NNGA’s governmentlicensing [

id.

at 31]. Based on these allegations, the named plaintiffs assert “claimsfor fraud and misrepresentation, breach of contract, unjust enrichment, detrimentalreliance, negligence

per se

” and violations of the Georgia Racketeer Influenced andCorrupt Organizations Act (“RICO”), O.C.G.A. § 16-14-1,

et seq.

[

id.

at 7]. The namedplaintiffs further assert that they and their potential class members “suffered actualphysical, mental, and economic harm” as a result of “Defendants’ false, deceptive,or misleading business practices” [

id.

at 15].On July 2, 2013, International properly removed this action to this Courtpursuant to the Class Action Fairness Act, 28 U.S.C. § 1711

et seq.

, and 28 U.S.C. §1332(d)(2) [Doc. No. 1, 2-3]. After removal, International, ABLE, and NNGA filedmotions to dismiss pursuant to Rule 12(b)(6) of the Federal Rules of Civil Procedure[Doc. No. 4, 1; Doc. No. 5, 1; Doc. No. 9, 1]. RTC, a California nonprofit corporation,also filed a motion to dismiss, requesting that this action be dismissed for lack of
