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Court Sends Krishna, Scientology Punitive-Damages Cases to Lower Courts

March 18, 1991 GMT

WASHINGTON (AP) _ The Supreme Court today sent back to lower courts for further study seven disputes over punitive-damages awards, including one the justices were told threatens to destroy the Hare Krishna religion.

The court told lower courts to restudy each of the seven cases in light of its decision on punitive damages earlier this month.

In that ruling, the justices refused to set constitutional limits on the awarding of punitive damages in personal injury lawsuits.

In the Krishna case acted on today, a lower court left intact a $5 million judgment against the religious sect that could force the sale of five Hare Krishna temples across the country and in Canada.

Lawyers for the Krishnas had argued, among other things, that the California court judgment violates the church’s religious freedom.

The various corporate entities of the International Society of Krishna Consciousness and two Krishna officials were sued successfully by a mother and daughter, Marcia and Robin George of Cypress, Calif.

Their 1977 lawsuit alleged that Robin had been brainwashed by the Krishnas when she was 14 and that Krishna leaders conspired to keep her away from her parents.

A California jury in 1983 awarded the Georges $32.5 million in damages against the Krishnas, but the award was reduced on appeal to $2.9 million.

With interest, the judgment today is estimated to be in excess of $5 million.

A state judge has ordered that five Krishna temples already placed under court supervision, including the religion’s headquarters in Los Angeles, be sold and the proceeds be paid to the Georges.

The other temples are located in Southern California and the New York City area, according to David Liberman, a Los Angeles lawyer for the Krishnas.

The California Supreme Court refused to review the award.

According to court documents, a Krishna official told Miss George to leave her home and live at a temple. She did, spending time with Hare Krishnas in Laguna Beach, San Diego, New Orleans, Buffalo, N.Y., and Ottawa, Canada.

The Georges’ lawsuit alleged that Krishna officials conspired to keep Miss George from her parents, who learned of her whereabouts in late 1975 only after a friend of hers left the religion and told them.

Lawyers for the Krishnas said the award won by the Georges amounts to religious bigotry.

″The proceeding below turned into a trial of what (the Georges’) counsel called the ‘pernicious evil’ of the Krishna Consciousness religion, and ... the jury awarded damages ... calculated to bring the religion in this country to an end,″ the appeal said.

In a separate case, the court ordered further study of a $2.5 million ″emotional distress″ award won against the Church of Scientology by a former member.

The Church of Scientology of California appealed an order to pay $500,000 in compensatory damages and $2 million in punitive damages to former Scientologist Larry Wollersheim.

A trial jury had awarded Wollersheim $30 million in damages but that amount was reduced by the appeals court.

Wollersheim, a Scientologist from 1969 to 1979 who now lives in Aspen, Colo., said church members coerced and harassed him and tried to drive his novelty business into bankruptcy. Scientology officials denied the charges, but a jury in Los Angeles ruled for Wollersheim.

Upholding the jury’s finding that church officials inflicted emotional distress on Wollersheim, the state appeals court said, ″There was substantial evidence to support a factual finding that the auditing, as well as other practices in this case, were conducted in a coercive environment.″

The state court therefore ruled that the church’s asserted religious freedom could not shield it from having to pay the damages award.

The other punitive-damage cases acted on today included:

-A $500,000 award won by a Mississippi woman who waited more than three years for her insurance company to pay off a $6,658 claim.

Reserve Life Insurance Co. was ordered by a federal judge to pay $500,000 to Patricia Eichenseer of Westville, Miss.

Ms. Eichenseer was hospitalized in January 1983 with severe stomach pains, and underwent a hysterectomy after doctors diagnosed her illness as acute pelvic inflammatory disease with other complications.

She submitted a claim to Reserve for $6,658 in medical bills, but the insurance company said her condition was a pre-existing illness not covered by her policy.

-A $400,000 punitive-damages award won by a Missouri man who lost $7,923.50 due to the misrepresentations of a commodities futures broker in Kansas City.

A federal jury awarded David T. Jordan the $7,923.50 he had lost as compensatory damages and ordered the Clayton Brokerage Co. of St. Louis to pay $400,000 more.

The jury found that Martin Rachlin, a Clayton broker and branch manager at its Kansas City office, violated federal and state law in his handling of Jordan’s investments.

-A $1.4 million punitive-damages award was levied against the Gwinnett County, Ga., Hospital Authority in the case of a severely burned accident victim.

When William H. O’Kelley was injured in a Gwinnett County traffic accident in 1985, he initially was rushed by ambulance toward Grady Hospital’s burn unit. But that plan was revised and O’Kelley instead was taken to Joan Glancy Hospital, which did not have a burn unit.

O’Kelley was at Glancy for about 90 minutes before it was decided he had to be rushed by helicopter to Humana hospital in Augusta. On liftoff from the hospital parking lot, the helicopter hit a light pole and crashed.

The pilot and another occupant were killed, but O’Kelley was only slightly injured in the helicopter crash. He was taken by ambulance to Grady, where he died six days later from his burns.

O’Kelley’s family sued the hospital authority for negligence.

-A $2 million punitive-damages award was assessed against Pacific Lighting Corp. and its two former real estate developer subsidiaries in a 1983 broken- contract suit filed by a California real estate broker. The state jury also awarded $558,000 in compensatory damages.

-A $1.5 million award in favor of a British corporation, The Post Office Inc., for trademark infringement and other prohibited conduct by Illinois- based Portec Inc. and its Flomaster division, based in Canon City, Colo.

The suit was filed over the manufacturing of package-handling and sorting chutes for mail.

The court today also let stand two punitive-damage awards. They are:

-A $600,000 award against the General American Life Insurance Co. in a fraud suit from Mobile, Ala.

Brad L. Simmons sued the insurance firm after being refused payment on a $10,000 burial policy for his deceased wife.

-A $750,000 verdict against the Massachusetts Mutual Life Insurance Co. in a 1986 fraud suit from Marion County, Ala.

The actual damages suffered by William E. Collins were between $1,300 and $1,800.