| Ney v. Landmark Education Corporation and Werner Erhard | |
|---|---|
| Court | United States Court of Appeals for the Fourth Circuit |
| Full case name | Stephanie Ney v. Landmark Education Corporation and Werner Erhard; Werner Erhard and Associates |
| Date decided | February 2, 1994 |
| Citation(s) | 16 F.3d 410 |
| Transcript(s) | Ney v. Landmark Education Corporation and Werner Erhard |
| Judge(s) sitting | James C. Cacheris (district court) Francis Dominic Murnaghan Jr., Paul V. Niemeyer, Frank Albert Kaufman (appeal) |
| Case history | |
| Prior action(s) | United States District Court for the Eastern District of Virginia (CA-91-1245-A) |
| Case opinions | |
| District court ruling affirmed. | |
| Keywords | |
| Default judgement, Emotional distress, Liability, Negligence | |
Ney v. Landmark Education Corporation and Werner Erhard is a legal case that was filed in United States District Court for the Eastern District of Virginia against Landmark Education, its predecessor Werner Erhard and Associates, and Werner Erhard, by a participant in one of Erhard's courses named Stephanie Ney. In September 1989, Ney was a participant in "The Forum" in Alexandria, Virginia, a self-improvement course given by a predecessor company to Landmark Education which was at the time owned by Erhard. After her attendance at the course, she suffered from a nervous breakdown and had to be hospitalized. She was then committed to a psychiatric facility. She remained at the psychiatric facility for two weeks, and at times had to be drugged or restrained so that she would not harm herself.
Judge James C. Cacheris dismissed Landmark Education from the lawsuit, stating that it was not the owner of The Forum course at the time of Ney's experiences. A jury determined that the trainer of her course, Ron Zeller, should not be held responsible for her emotional distress. Erhard was not personally served and did not respond to the lawsuit, and a default judgement was entered against him. Erhard was ordered to pay Ney over US$500,000. Ney appealed the case to the United States Court of Appeals for the Fourth Circuit, specifically on the matter of the liability of Landmark Education, and the judges affirmed the decision of the district court. Erhard defaulted on the payment due to Ney.
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Werner Erhard, born John Paul Rosenberg,[1] created the Erhard Seminars Training (est) course in 1971.[2] Est was a form of Large Group Awareness Training,[3][4] and was part of the Human Potential Movement.[5] Est was a four-day, 60-hour self-help program given to groups of 250 people at a time.[6] The program was very intensive: each day would contain 15–20 hours of instruction.[5] During the training, participants had to agree to certain rules which remained in effect for the duration of the course.[7] Participants were taught that they were responsible for their life outcomes, and were promised a dramatic change in their self-perception.[5]
Est was controversial: critics characterized the training methods as brainwashing,[8][9][10][11] and suggested that the program had fascistic and narcissistic tendencies.[5] Proponents asserted that it had a profoundly positive impact on people's lives.[5] By 1977 over 100,000 people completed the est training, including public figures and mental health professionals.[5] In 1985, Werner Erhard and Associates repackaged the course as "The Forum", a seminar focused on "goal-oriented breakthroughs".[2] By 1988, approximately one million people had taken some form of the trainings.[2] In the early 1990s Erhard faced tax and family problems.[2] A group of his associates formed the company Landmark Education in 1991, purchasing The Forum's course "technology" from Erhard.[2]
Stephanie Ney, then a 45-year-old artist from Silver Spring, Maryland with two sons, sued Landmark Education, its trainer Ron Zeller, its predecessor company Werner Erhard and Associates, and Werner Erhard, for US$2 million, after attending one of Erhard's courses.[1][12][13] Landmark Education purchased The Forum from Erhard after Ney had attended her training.[14] In September 1989, Ney attended a two-day seminar of "The Forum" course held in Alexandria, Virginia.[1][15] After attending The Forum, she suffered from a nervous breakdown,[16] and had to be hospitalized.[17]
Ney was committed to a psychiatric facility, the Psychiatric Institute of Montgomery County.[15][18] She was held for two weeks in the psychiatric facility, and during periods of her stay she was drugged and secured to a bed in order to prevent her from intentional self-injury.[12] Subsequent to this medical experience, she continued to need ongoing treatment.[17] She said that there was a high chance she would need psychological therapy for her entire life.[12]
Ney's complaint asserted that Landmark Education recklessly utilized complex psychological treatments.[19] She stated that Landmark Education was aware these psychological treatments could harm the individuals attending their courses, in part due to lack of training received by their group leaders.[19]
Attorney Gerald F. Ragland Jr. stated it was not appropriate that managers of The Forum would "conduct what is in effect therapy without training, without therapists in the room".[12] On the first day of the trial, Ragland told the jury that "Part of the process of therapy is to confront defense mechanisms and cause change. Each of us have our own way of dealing with life. Defense mechanisms aren't bad. They are our methods of coping with the constant demands of life."[18] Ragland said that The Forum managers should have ensured that attendants were "more closely monitored".[18] Psychologist Margaret Singer, author of Cults in Our Midst, appeared before the court as an expert witness in the case.[20][21] In her testimony, Singer asserted that Ney's attendance at The Forum was tied to her mental breakdown.[20]
Landmark Education's lawyer Robert P. Trout said that 250,000 individuals had gone through The Forum training, and described it as a philosophical environment for "people who are well ... who want to gain greater effectiveness".[12] Trout stated that "While it's not for everyone, many people found the Forum satisfying, gratifying and valuable in their lives. The Forum is for people who are well and effective in their lives and want to gain better effectiveness. They advise you that you may experience stress and different emotions."[18] Trout said that Ney did not abide by a consent form sent by the organization to potential participants prior to the course.[12] He described the consent form as "It says if you're coming here for therapy, go someplace else."[12][18]
In addition, Trout stated that in the interim three days between Ney's attendance at The Forum and her commitment to a psychiatric facility, she had found out that her husband had cheated on her and had two affairs.[12] Ney testified to the jury in the case that she was surprised when she found out about her husband's behavior, but "burst out laughing, because I had been so worried about my infatuation [with a fellow art student] and he had gone and had this affair".[12]
Prior to the start of the trial in July 1992, Landmark Education was dismissed from the lawsuit by the federal judge hearing the case because it did not yet exist when Ney was a participant in The Forum course.[1][18] A jury concluded that the leader of The Forum course attended by Ney should not be held responsible for inflicting emotional distress upon her.[1][18]
Erhard had not been seen in public for several months prior to the trial.[12] He was not personally served,[22] and did not respond to the lawsuit.[1] Judge James C. Cacheris entered a default judgement in favor of the plaintiff.[1][18] "Erhard defaulted. He never filed an answer to our complaint," said attorney Ragland.[18] The judge decided to wait for the lawsuit to conclude before determining Erhard's liability in the case.[1] After a 5 day trial, Judge Cacheris issued his ruling against Erhard, immediately after the jury determined its verdict in the lawsuit.[14] The judge ordered Erhard and his company to pay her both compensatory damages and punitive damages,[14] in the total amount of $501,790.[1][22]
Ney appealed the case to the United States Court of Appeals for the Fourth Circuit, specifically on the matter of the liability of Landmark Education, and the judges affirmed the decision of the United States District Court for the Eastern District of Virginia.[22] Erhard defaulted on the payment due to Ney.[23]
Ben Winters of NewCity Chicago cited the lawsuit in an article about transformation training, and commented that "Some of the reports are disturbing, indeed."[16] The case was cited by the defendant in Landmark Education's lawsuit against Condé Nast Publications, Landmark Education Corporation v. The Conde Nast Publications, Inc., to support its claim that "The Forum has been the subject of legal complaints alleging cult-like practices and psychological damage".[24] In his 1993 biography of Erhard, Outrageous Betrayal, author Steven Pressman commented that it was not likely the plaintiff would recover the $500,000 default judgement from Erhard.[1]
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