DEFENDANTS' FIRST AMENDED ANSWER TO FIRST AMENDED COMPLAINT

IN THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF COLORADO

Civil Action No. 95-K-2143

RELIGIOUS TECHNOLOGY CENTER, a California non-profit corporation; and

BRIDGE PUBLICATIONS, INC., a California non-profit corporation,

Plaintiffs,

F.A.C.T.NET, INC., a Colorado non-profit corporation;

LAWRENCE WOLLERSHEIM, an individual; and ROBERT PENNY, an individual,

Defendants.

DEFENDANTS' FIRST AMENDED ANSWER TO FIRST AMENDED COMPLAINT

FOR INJUNCTIVE RELIEF AND DAMAGES FOR:

(1) COPYRIGHT INFRINGEMENT; (2) TRADE SECRETS

MISAPPROPRIATION (C.R.S. §§7-74-102 et. seq.)

COUNTERCLAIMS, AND JURY DEMAND

Defendants, F.A.C.T.Net, Inc. (hereinafter "FACTNET"), through its counsel, Musick, Peeler & Garrett, LLP, and Beem & Mann, P.C.; Lawrence Wollersheim, through his counsel, Hagenbaugh & Murphy and Beem & Mann, P.C.; and Robert Penny, through his counsel, Waldbaum, Corn, Koff, Berger & Cohen, P.C., (collectively, "Defendants"), hereby submit their First Amended Answer to the First Amended Verified Complaint ("Complaint") of Plaintiffs Religious Technology Center ("RTC") and Bridge Publications, Inc. ("BPI") (collectively, "Plaintiffs").

ANSWERING THE COMPLAINT

ADMISSIONS AND DENIALS

As to the allegations appearing under the title, "Introductory Averments," Defendants, and each of them:

1. On information and belief, deny the allegations of the first sentence of ¶ 1; are without information sufficient to form a belief as to the truth of the second sentence of ¶ 1 and therefore deny the same; deny the allegations of the third, fourth, and fifth sentences of ¶ 1.

2. Are without information sufficient to form a belief as to the truth of the allegations of ¶ 2 and therefore deny the same.

3-4. Deny the allegations of ¶¶ 3 and 4.

5. Admit that RTC obtained a temporary restraining order and a writ of seizure in the United States District Court for the Eastern District of Virginia, but deny that the raid and search of Mr. Lerma's premises on August 11, 1995 constituted execution of the writ of seizure; deny the facts which RTC claims it first learned on August 15, 1995, and deny the other allegations of ¶ 5 except as specifically admitted.

6. Admit that this action was filed August 21, 1995, and on that date Hon. Lewis Babcock issued a temporary restraining order and order of impoundment, and ordered the clerk to issue a writ of seizure to be executed at the residences of Defendants Wollersheim and Penny, which writ speaks for itself; deny the allegations of ¶ 6 except as so admitted.

7. Admit that at the time of the raid of the premises of Wollersheim and Penny on August 22, 1995, computer equipment, floppy disks, computer compact disks, computer tapes, and hard copy documents were seized, but deny the allegations of ¶ 7 except as so admitted.

8. Deny the allegations of the first sentence of ¶ 8; admit that Lerma disclosed to The Washington Post the document known as the "Fishman affidavit," but deny the allegations of the second sentence of ¶ 8 except as so admitted.

9. Deny the allegations of ¶ 9.

10. Admit that Arnaldo Lerma made a posting to the Internet on or about August 1, 1995, but deny the allegations of ¶ 10 except as so admitted.

11.-14. Deny the allegations of ¶¶ 11, 12, 13, and 14.

JURISDICTION AND VENUE

As to the allegations appearing under the title, "Jurisdiction and Venue," Defendants, and each of them:

15. Admit that this Court has subject matter jurisdiction, but deny the allegations of ¶ 15 except as so admitted.

16. Admit that venue is proper, but deny the allegations of ¶ 16 except as so admitted.

THE PARTIES

As to the allegations appearing under the title, "The Parties," Defendants, and each of them:

17.-18. Are without information sufficient to form a belief as to the truth of the allegations contained in ¶¶ 17 and 18 and therefore deny the same.

19. Admit that FACTNET is a Colorado non-profit corporation duly organized and existing under the laws of Colorado with its principal place of business in Golden, Colorado; admit that FACTNET also operates out of the residences of Wollersheim and Penny; deny the allegations of ¶ 19 except as so admitted.

20.-21. Admit the allegations of ¶¶ 20 and 21.

GENERAL ALLEGATIONS

As to the allegations appearing under the title, "General Allegations," Defendants, and each of them:

22. On information and belief, admit that L. Ron Hubbard wrote some materials concerning Scientology, but are without sufficient information to form a belief as to the other allegations of ¶ 22, and therefore deny the same; and, on information and belief, deny that Hubbard created all of the Advanced Technology.

23. Are without sufficient information to form a belief as to the truth of the allegations of the first sentence of ¶ 23, and therefore deny the same; deny the allegations of ¶ 23 except as so admitted; on information and belief, deny that L. Ron Hubbard is the author of all of the Advanced Technology.

24.-30. Are without information sufficient to form a belief as to the truth of the allegations of ¶¶ 24, 25, 26, 27, 28, 29, and 30, and therefore deny the same.

31. Deny the allegations of ¶ 31.

32. Deny the allegations of the first sentence of ¶ 32; are without information sufficient to form a belief as to the other allegations of ¶ 32 and therefore deny the same.

33. Deny the allegations of ¶ 33.

34. Admit that Wollersheim was a Scientologist between the years 1969 and 1979 and that he received access to OT materials; deny the allegations of ¶ 34 except as so admitted.

35. Admit that Wollersheim was permitted access to OT materials, but deny the allegations of ¶ 35 except as so admitted.

36. Admit that Wollersheim signed agreements, later canceled, that were provided by Scientology, but deny the allegations of ¶ 36 except as so admitted.

37. Admit that Wollersheim left Scientology in or about 1979, and that in or about 1994, Wollersheim, along with others, founded FACTNET; deny the allegations of ¶ 37 except as so admitted.

38. Admit that Defendant Penny is a former Scientologist who left Scientology in approximately 1986, and that Penny was involved with the Church of Scientology from the 1970's to 1986, and that while he was in the Church of Scientology he received access to OT materials; deny the allegations of ¶ 38 except as so admitted.

39. Admit that between 1981 and 1985, Penny received access to some OT materials and signed agreements that were provided to him by Scientology; deny the allegations of ¶ 39 except as so admitted.

40.-41. Deny the allegations of ¶¶ 40 and 41.

42. Admit that on or about August 15, 1995, the Defendants made a posting which speaks for itself; deny the allegations of ¶ 42 except as so admitted.

43.-53. Deny the allegations of ¶¶ 43, 44, 45, 46, 47, 48, 49, 50, 51, 52, and 53.

FIRST CLAIM FOR RELIEF

As to the allegations appearing under the title, "First Claim for Relief," Defendants, and each of them:

54. Plead to the paragraphs incorporated by reference in ¶ 54 as set forth in ¶¶ 1 through 53 above.

55.-60. Deny the allegations of ¶¶ 55, 56, 57, 58, 59, and 60.

SECOND CLAIM FOR RELIEF

As to the allegations appearing under the title, "Second Claim for Relief," Defendants, and each of them:

61. Plead to the paragraphs incorporated by reference in ¶ 61 as set forth in ¶¶ 1 through 60 above.

62. Are without information sufficient to form a belief as to the truth of the allegations of ¶ 62, and therefore deny the same.

63.-67. Deny the allegations of ¶¶ 63, 64, 65, 66, and 67.

THIRD CLAIM FOR RELIEF

As to the allegations appearing under the title, "Third Claim for Relief," Defendants, and each of them:

68. Plead to the paragraphs incorporated by reference in ¶ 68 as set forth in ¶¶ 1 through 67 above.

69.-77. Deny the allegations of ¶¶ 69, 70, 71, 72, 73, 74, 75, 76, and 77.

SEPARATE AND ADDITIONAL DEFENSES

Defendants, and each of them (unless otherwise stated), set forth the following affirmative defenses against Plaintiffs, and each of them (unless otherwise stated):

78. For the purposes of each of the following affirmative defenses, the term "Defendants" refers to each Defendant individually and to all Defendants collectively, unless otherwise stated. Similarly, for the following affirmative defenses, the term "Plaintiffs" refers to each Plaintiff individually, as well as to both Plaintiffs collectively, unless otherwise stated.

79. Defendants reallege, repeat, and incorporate by reference herein, the allegations set forth in all of the previous paragraphs of this document, as if set forth fully herein.

80. Plaintiffs' Complaint fails to state a claim upon which relief may be granted.

81. Plaintiffs' claims against Defendants are barred, in whole or part, by waiver.

82. Plaintiffs' claims against Defendants are barred, in whole or part, by estoppel.

83. Plaintiffs' claims against Defendants are barred, in whole or in part, by the doctrine of laches.

84. Plaintiffs' claims against Defendants are barred, in whole or in part, by the doctrine of collateral estoppel.

85. Plaintiffs' claims against Defendants are barred, in whole or in part, by the doctrine of res judicata.

86. Plaintiffs' claims against Defendants are barred, in whole or part, by the doctrine of unclean hands.

87. Plaintiffs' copyright claims are barred under the doctrine of copyright misuse.

88. Plaintiffs' copyright claims are barred because Plaintiffs have made misstatements and misrepresentations in connection with their applications for registration, and misrepresented the status of their purported copyrights to this Court.

89. Plaintiffs' copyright claims are barred to the extent that Plaintiffs are not the actual owners of the alleged copyrights.

90. Plaintiffs' copyright claims are barred to the extent that Plaintiffs obtained the alleged copyrights by fraud, duress, undue influence, or any illegal procedures.

91. Plaintiffs' copyright claims are barred to the extent that Plaintiffs enforce the alleged copyrights unlawfully.

92. Some or all of the works the copyrights of which Plaintiffs claim have been infringed are in the public domain.

93. Some or all of the works the copyrights of which Plaintiffs claim have been infringed are not entitled to protection because they do not fall within the subject matter of copyright.

94. Defendants' use of the materials in question constitutes fair use.

95. Defendants' use of the materials in question is protected under the Library and Archive Exception of §108 of the Copyright Act.

96. Plaintiffs' claims are barred by §507 of the Copyright Act, which provides a statute of limitations as to any alleged infringements prior to three (3) years from filing of suit.

97. Defendants had innocent intent within the scope of Section 504(c) of the Copyright Act.

98. Plaintiffs' copyright infringement claims are barred, in whole or in part, by 17 U.S.C. §117.

99. Plaintiff RTC's alleged copyrights as to secret and unpublished materials are invalid because the Registrar of Copyrights exceeded its legislative and constitutional authority in granting copyright protection to the individual masked copyright applications for the copyrights here at issue -- by failing to establish classes of work eligible for this special treatment; and by acting in an arbitrary manner without standards, hearing, record or any other elements of due process in violation of the United States Constitution. Furthermore, the legislation under which the Registrar purportedly acted allocates certain executive powers in violation of the requirements of the Separation of Powers doctrine. Even if the legislation is itself constitutional, the rule adopted by the Registrar, 37 C.F.R. §202.20, is an unconstitutional extension of that legislation and the Registrar's acts are both outside the scope of that rule and an unconstitutional expansion of that rule. In arbitrarily deciding to accept secret copyright applications and thereby prohibiting all individuals, as a matter of law, from copying and distributing material (even for fair use purposes) that only the Registrar and Plaintiff RTC could identify, the Registrar was clearly executing the laws passed by Congress, a role which it was constitutionally prohibited from fulfilling. Furthermore, its manner of execution clearly violated the Fifth Amendment even if the Registrar had been a member of the Executive Branch.

100. Plaintiff RTC is not entitled to statutory awards, fines or attorney's fees for any violation of its purported copyright rights in the unpublished manuscripts at issue because RTC has not complied with the requirements of 17 U.S.C. §412 by publicly registering the material prior to the commencement of the alleged infringement as required by 17 U.S.C. §412.

101. Plaintiffs are not entitled to enforce whatever purported intellectual property rights they possess in the disputed materials because of Plaintiffs' consistent pattern of abuse and misuse of these purported rights through the judicial process. Plaintiffs have consistently sought to prevent their critics from exercising their constitutional rights under the First Amendment by bringing unjustified actions, consistently misusing judicial processes such as search and seizure actions, seeking to drive their critics into bankruptcy by excessive discovery, endless motions, largely unjustified, constant appeal of every ruling and relitigating every issue against every critic. Plaintiffs have consistently misused the judicial process, their members have engaged in a pattern and practice of extra-judicial harassment following a plan, policy and program laid down by Scientology founder L. Ron Hubbard, all under the guise of protecting their intellectual property rights.

102. Plaintiffs have failed to adequately protect their alleged trade secrets and confidential information. Plaintiffs' information is no longer secret because it is publicly available and disseminated throughout the public domain.

103. Plaintiffs' claims for misappropriation of trade secrets are preempted, in whole or in part, by federal law.

104. Defendants' actions are protected, and Plaintiffs' claims are barred, by the First, Ninth and Fourteenth Amendments to the U.S. Constitution, and by Article II Sections 6, 7, 10, 20, and 24 of the Constitution of Colorado.

105. Plaintiffs' claims are barred due to an unconstitutional and improper search and seizure of Defendants' property.

106. Plaintiffs' claims are barred as a result of Plaintiff RTC's (and Plaintiff BPI's to the extent that the persons involved were acting as its agents) unconstitutional search and seizure of Defendants' property in violation of the Fourth Amendment to the Constitution of the United States and Art. II, Sec. 7 of the Constitution of Colorado.

107. Plaintiffs are barred from introducing any evidence obtained as a result of the unconstitutional search and seizure of Defendants' property in violation of the Fourth Amendment to the Constitution of the United States and Art. II, Sec. 7 of the Constitution of Colorado.

108. Plaintiff BPI's claims are barred to the extent they are based on any of Defendants' materials which were obtained in the unconstitutional search and seizure which did not permit disclosure to or review by third parties.

109. Plaintiff BPI is barred from introducing any evidence obtained as a result of Plaintiff RTC's unconstitutional search and seizure of Defendants' materials, because all seized materials were to remain in the custody of RTC's counsel, and neither disclosure to or review by third parties, including BPI, was permitted.

110. Plaintiffs are barred from introducing any evidence resulting from the search and seizure of Defendants' property other than the Advanced Technology materials because Plaintiff RTC was not authorized to search or identify materials in computer media beyond the limited list of documents identified in Exhibit A to the original Complaint, and plaintiff BPI was not permitted to participate in any search at all.

111. Defendants were justified in their use of the materials in question to the extent that Defendants were using the materials for self-defense, and thus Defendants' actions are protected.

112. Defendants were justified in their use of the materials in question to the extent that Defendants were using the materials for the defense of others, and thus Defendants' actions are protected.

113. Defendants were justified in their use of the materials in question to the extent that Defendants were acting as "whistleblowers," using the materials in question to expose certain improper and illegal actions by Scientology (including Plaintiffs), and thus Defendants' actions are protected.

114. Defendants were justified in their use of the materials in question to the extent that the use was in the public interest and/or for public benefit, and thus Defendants' actions are protected.

115. Defendants were justified in their use of the materials in question to the extent that the use was for purposes of litigation, including (but not limited to) personal litigation and use as expert consultants and/or witnesses.

116. To the extent that the actions of any of the Defendants were outside the scope of the powers granted to FACTNET by its corporate charter and bylaws, these actions were ultra vires, and Defendant FACTNET is not liable for these actions.

117. Enforcement of any "confidentiality agreements" with Defendants Wollersheim and Penny are barred by reason of cancellation, rescission, duress, fraud, incapacity, illegality, failure of consideration, and/or violation of public policy.

118. Plaintiffs' claims are barred, in whole or in part, by failure to fully comply with D.C.Colo.LR 7.1(k) (disclosure of related cases).

119. All damages, if any, assessed against Defendant Wollersheim, should be set off by the outstanding judgment and interest owed him by Scientology.

WHEREFORE, having fully answered the First Amended Complaint of the Plaintiffs, Defendants pray the Court for entry of judgment for Defendants and against Plaintiffs on Plaintiffs' First Amended Complaint, dismissing the First Amended Complaint and (pursuant, at least in part, to 17 U.S.C. §505) awarding Defendants the costs of defending this action, including reasonable attorney fees.

COUNTERCLAIMS

GENERAL ALLEGATIONS

120. Defendant FACTNET is a non-profit corporation duly organized and existing under the laws of the State of Colorado At all times relevant herein, FACTNET's principal place of business was in the City of Golden, County of Jefferson, State of Colorado -- until approximately three months ago, when its principal place of business moved to the City of Boulder, County of Boulder, State of Colorado.

121. Defendant Wollersheim is a citizen and resident of the City of Boulder, County of Boulder, State of Colorado. Defendant Penny is a citizen and resident of the City of Longmont, County of Boulder, State of Colorado. Defendant Wollersheim is a Director of FACTNET, and an expert witness and consultant to numerous persons and organizations on issues concerning coercive persuasion and cults, including Scientology. Defendant Penny was a Director of FACTNET from about June, 1993, to about October, 1996. FACTNET is a non-profit library and historic preservational archive of information pertaining to coercive persuasion and hundreds of cults, such as Scientology.

122. On information and belief: Plaintiff BPI is, and was at all times relevant herein, a California corporation, organized and existing under the laws of the State of California with its principal office in the City of Los Angeles, County of Los Angeles, State of California. BPI is wholly controlled by Scientology's "Managing Agents" (a small group of approximately four (4) persons, led by David Miscavige), and has no de facto independent corporate authority.

123. On information and belief: Plaintiff RTC is, and was at all times relevant herein, a California corporation, organized and existing under the laws of the State of California with its principal office in the City of Los Angeles, County of Los Angeles, State of California. Its function is to preserve the "purity" of Scientology by constantly examining and critiquing all other Scientology entities regarding their operations, including the delivery of supposedly religious service "technology" as well as management operations. This gives it de facto command control over every aspect of every Scientology corporation, entity and individual without regard to the alleged separate management and structure of such entities.

124. On information and belief: Plaintiffs RTC and BPI are entities within the "Command Chart" of the organization known as "Scientology" (or the "Church of Scientology"). Furthermore, Plaintiffs are interwoven into the corporate hierarchy which makes up Scientology (and are also related in any other way set forth in Church of Spiritual Technology v. U.S., 26 Ct.Cl. 713 (1992)).

125. On information and belief: There exists, and at all times relevant there existed, a unity of interest and ownership between RTC, BPI, Scientology, and the other corporate entities besides Plaintiffs in the Scientology organization, such that any individuality and separateness between each of them has ceased and each is the alter ego of the others and all are the alter egos of the Managing Agents in that each corporation is completely controlled, dominated, managed and operated by the Managing Agents without regard for corporate individuality; and further in that each corporation is a mere shell instrumentality and conduit through which said Managing Agents carry on their domination of Scientology and the business of developing, marketing and selling Scientology; in that the corporations fail to maintain corporate formalities; in that there is a concealment and misrepresentation of the identity of the responsible management of such entity; and further in that there is a use of one corporate entity to procure and use services or merchandise and/or staff or employees of another affiliated corporation. Although the corporations nominally use separate counsel, all counsel are controlled and directed by the Managing Agents and the retention of separate counsel is merely one aspect of the fraud designed to create the appearance of independent corporate entities.

126. Adherence to the fiction of the separate existence of the several corporations would permit an abuse of the corporate privilege and would promote injustice in that, on information and belief, the Managing Agents can transfer assets at will and thus manipulate corporate assets to avoid debts, liabilities, and obligations. Adherence to the fiction of the separate existence of the several corporations would also be inequitable because the Managing Agents can transfer personnel and control of documents from one entity to another, thus permitting the Defendants to avoid legitimate discovery and thereby to effect a continuing abuse of process and obstruction of justice.

127. Alternatively, at all times herein mentioned, each of the Plaintiffs, was the agent, servant, employee, fellow member, associate and/or joint venturer or conspirator of each of the other remaining Plaintiffs, and was at all times acting within the purpose and scope of said agency, employment or joint venture and acting with the express and/or implied knowledge or consent of the remaining Plaintiffs. The acts of each Plaintiff were approved and/or ratified by each other Plaintiff and, together, constitute a single course of conduct.

128. On information and belief: The management design of Scientology is to ignore the formal structure of the several entities and to operate them as the Managing Agents' personal domain, and it is done so. This style of management permits money to be shifted among entities to hide their profit-making reality and to avoid taxes and judgments. Furthermore, insofar as actual control of the entities was/is in the hands of individuals who were not within the formal corporate structure, the conduct of affairs of each of the several entities could be kept secretive.

129. Jurisdiction is proper under 28 U.S.C. §1332 in that there is a complete diversity of citizenship between the Plaintiffs and the Defendants, and the amount in controversy exceeds $50,000. In addition, several of the counterclaims listed below involve federal questions (as will be discussed in each such counterclaim individually), and thus the Court has jurisdiction over these counterclaims pursuant to 28 U.S.C. §1331. The remainder of the counterclaims are pendent state claims, over which this Court has supplemental jurisdiction pursuant to 28 U.S.C. §1367.

130. Venue is proper in this District pursuant to 28 U.S.C. §1391(b) in that events or omissions giving rise to the claims occurred in this judicial district and Defendant FACTNET has its principal place of business in this District.

131. For the purposes of each of the following counterclaims, the term "Defendants" refers to each Defendant individually and to all Defendants collectively, unless otherwise stated. Similarly, for the following counterclaims, the term "Plaintiffs" refers to each Plaintiff individually, as well as to both Plaintiffs collectively, unless otherwise stated.

COUNTERCLAIM FOR DECLARATORY JUDGMENT (TRADE SECRETS)

(By Defendants FACTNET and Wollersheim)

Defendants FACTNET and Wollersheim, through their respective counsel, counterclaim against Plaintiffs pursuant to Rule 57 F.R.C.P. as follows:

132. Defendants (for purposes of this Counterclaim, the term "Defendants" refers only to Wollersheim and FACTNET) reallege, repeat, and incorporate by reference herein, the allegations set forth in all of the previous paragraphs of this document, as if set forth fully herein.

133. Defendants operate a library and archive which contains information about coercive indoctrination and mind control organizations, including Scientology. Defendants actively participate in the public debate regarding the public controversy about Scientology.

134. The Colorado Uniform Trade Secrets Act, C.R.S. §7-74-101, et. seq., ("CUTSA"), prohibits misappropriation of trade secrets.

135. Plaintiffs claim to have trade secrets, and further claim that Defendants have misappropriated or threatened to misappropriate trade secrets belonging to Plaintiffs in violation of CUTSA, as part of Defendants' operation of their library and archive and participation in the public debate regarding the public controversy.

136. Defendants wish to continue to operate the library and archive and participate in debate regarding Scientology without risk of violating any rules prohibiting misappropriation of trade secrets, but cannot do so unless the Court first determines that Plaintiffs have no trade secrets or a full and complete determination of which of Plaintiffs' alleged trade secrets are valid and the nature and scope of such trade secrets. In particular, throughout this litigation, Plaintiffs have changed position as to the nature and content of their trade secrets and Defendants are left without guidance as to what materials they may comment upon.

WHEREFORE, pursuant to Rule 57 of the Federal Rules of Civil Procedure, Defendants pray that this Court issue a declaratory judgment in favor of Defendants and against Plaintiffs as follows:

137. That Defendants, and each of them, have in their possession (with respect to the trade secrets alleged in the present lawsuit) no trade secrets of Plaintiffs which are protected under CUTSA, common law, or otherwise.

138. That if this Court determines that Plaintiffs have one or more trade secrets protectable under CUTSA, the common law, or otherwise, that this Court make a full and final determination on each such claim to trade secrets sufficient to provide a clear and detailed determination of the nature and scope of these trade secrets and sufficient to provide clear guidance to Defendants about the scope of public comment which they might make about this important public controversy.

COUNTERCLAIM FOR DECLARATORY JUDGMENT (COPYRIGHT)

(By Defendants Wollersheim and FACTNET)

Defendants FACTNET and Wollersheim, through their respective counsel, counterclaim against Plaintiffs pursuant to Rule 57 F.R.C.P. as follows:

139. Defendants (for the purposes of this Counterclaim, the term "Defendants" refers only to Wollersheim and FACTNET) reallege, repeat, and incorporate by reference herein, the allegations set forth in all of the previous paragraphs of this document, as if set forth fully herein.

140. The Copyright Act, 17 U.S.C. §101, et. seq., prohibits infringement of copyrights.

141. Plaintiffs claim to have copyrights, and further claim that Defendants have infringed or threatened to infringe copyrights belonging to Plaintiffs in violation of the Copyright Act, as part of Defendants' operation of the FACTNET library and archive and participation in the public debate regarding the public controversy.

142. Defendants wish to continue to operate the library and archive and participate in debate regarding Scientology without risk of violating any rules prohibiting infringement of copyright, but cannot do so unless the Court first determines that Plaintiffs have no copyrights, or a full and complete determination of which of Plaintiffs' alleged copyrights are valid, and the nature and scope of such copyrights. Defendants are left without guidance as to what materials upon which they may comment.

WHEREFORE, pursuant to Rule 57 of the Federal Rules of Civil Procedure, Defendants pray that this Court issue a declaratory judgment in favor of Defendants and against Plaintiffs as follows:

143. That Defendants, and each of them, have in their possession no copyrighted materials of Plaintiffs which are protected under the Copyright Act, or otherwise.

144. That if this Court determines that Plaintiffs have one or more items protectable under the Copyright Act, or otherwise, that this Court make a full and final determination on each such claim to copyright sufficient to provide a clear and detailed determination of the nature and scope of the copyright and sufficient to provide clear guidance to Defendants about the scope of public comment which they might make about this important public controversy.

COUNTERCLAIM FOR WRONGFUL SEARCH AND SEIZURE

(By All Defendants)

Defendants Wollersheim, Penny and FACTNET, collectively and individually, through their respective counsel, counterclaim against Plaintiffs pursuant to the Fourth Amendment of the United States Constitution and Art. II, Sec. 7 of the Constitution of Colorado as follows:

145. Defendants reallege, repeat, and incorporate by reference herein, the allegations set forth in all of the previous paragraphs of this document, as if set forth fully herein.

146. On or about August 21, 1995, Plaintiff RTC moved the Honorable Lewis Babcock, Judge of the United States District Court for the District of Colorado, ex parte, without advising Defendants, for a writ of seizure and impoundment of certain materials allegedly in the possession of Defendants Wollersheim, Penny, and FACTNET. Plaintiff RTC submitted documents in support of its motion including:

(1) RTC's original Verified Complaint;

(2) The declaration of Helena K. Kobrin;

(3) The declaration of Warren McShane;

(4) The declaration of Robert Anderson;

(5) Plaintiffs' Motion for a Writ of Seizure and Impoundment of Infringing Trade Secret Articles;

(6) A Motion for a Temporary Restraining Order and/or Preliminary Injunction, with supporting Memorandum of Points and Authorities;

(7) A number of exhibits.

(These documents are not attached as exhibits as they are already before the Court as a part of Plaintiffs' initial pleadings.) Each of these documents was signed by a person who is either a member of Scientology (an organization which includes Plaintiffs RTC and BPI) or is an attorney therefor.

147. The information in the documents submitted to the Court by RTC was materially false, incomplete and misleading. The false, incomplete and misleading information provided in the documents was intentionally and/or recklessly inserted there.

148. RTC failed to provide reliable and credible information as to the veracity of the statements made in the documents submitted by RTC, or the credibility or reliability of those persons making the statements. Thus, the Court was misled and misinformed by relying upon the unreliable and non-credible informants and facts.

149. In reliance on the documentation submitted by RTC, the Court ordered the Court Clerk to issue a Writ of Seizure. The Order is attached as Exhibit A hereto. The Writ of Seizure (attached as Exhibit B hereto) reads, in relevant part, as follows:

TO THE UNITED STATES MARSHAL, OR TO ANY ON-DUTY OR OFF-DUTY FEDERAL, STATE OR MUNICIPAL LAW ENFORCEMENT OFFICER:

Pursuant to the Order ("Order") of the Honorable Lewis T. Babcock, United States District Judge, District of Colorado, issued on August 21, 1995, which commanded me to issue this Writ of Seizure directed to the United States Marshal, or to any on-duty or off-duty federal, state or municipal law enforcement officer;

YOU ARE ORDERED to seize, using such force as may be reasonably necessary under the circumstances, and assisted by counsel and representatives of the plaintiff, the following articles and things which you may then or otherwise thereafter find on the person, in the possession, or under the control of defendant Lawrence Wollersheim ("Wollersheim") and/or defendant's agents and persons acting in concert with defendant, at Tantra Lake Apartments, 880 West Moorehead Circle, Apt. 3K, Boulder Colorado, 80303, or defendant Robert Penny ("Penny") and/or defendant's agents and persons acting in concert with defendant, at 6962 Miro Court, Longmont, Colorado, 80501, or elsewhere where defendant Wollersheim, Penny or any such agents and persons may be found in the territory in which you may serve this Writ, including any building, annex or other structure adjacent to or on the premises identified above, to wit: any and all copies, reproductions, or embodiments of all or any part of the literary works identified on Exhibit A to the Verified Complaint (a copy of Exhibit A is attached hereto), including any computer disks and printed materials; all plates, molds, matrices, masters, tapes, or other articles by which such copies, reproductions, or embodiments may be reproduced; any articles and things that appear to be works of L. Ron Hubbard protected by copyrights or Colorado's trade secret statute; optical scanning equipments; and all personal computers (including all ancillary equipment and disk drives, disks and other things with memory capacity) found at or within the above-described locations.

YOU ARE FURTHER DIRECTED to hold the articles so seized in a safe place and to forthwith deliver all such articles to the custody of counsel for plaintiff;

YOU ARE FURTHER DIRECTED to use such force as may be reasonably necessary under the circumstances to enter the above-described locations and to seize the above-described articles and/or some part thereof;..."

150. At all times and in doing all things mentioned hereafter in this counterclaim, Plaintiffs, [1] through their agents, including, but not limited to, Ronald Tencati, Robert Brunelli, David Keil, Allan Cartwright, Helena Kobrin, Joe Duncanson and Tim Hancock ("Plaintiffs' Penny Seizure Agents"); and Maher Salfiti, Warren McShane, Paul Figlia, Tom Howard, Jack Keenan, and Todd Blakely (Plaintiffs' Wollersheim/FACTNET Seizure Agents") (collectively "Plaintiffs' Seizure Agents"), were acting as federal agents under color of federal authority and under color of the statutes, regulations, customs and usages of the United States and the office of federal marshals. Despite the fact that Plaintiffs are private organizations and Plaintiffs' Seizure Agents are private citizens, not government officials, Plaintiffs, through their Seizure Agents, were acting in concert with, and as agents of the federal government.

151. On or about August 22, 1995, Plaintiffs (through their Wollersheim/FACTNET Seizure Agents), violated Defendant Wollersheim's constitutionally protected Fourth Amendment right to be free from unreasonable search and seizure when, in conjunction with federal marshals, Plaintiffs entered and searched Wollersheim's home located at Apartment 3K, Tantra Lake Apartments, 880 West Moorehead Circle, Ignacio, COlorado, 80303 (hereinafter, "Wollersheim Home"), and seized numerous items, including computer equipment and documents. [2] This search and seizure was unconstitutional and improper for the reasons set forth in this Counterclaim.

152. On or about August 22, 1995, Plaintiffs (through their Penny Seizure Agents) violated Defendant Penny's constitutionally protected Fourth Amendment right to be free from unreasonable search and seizure when, in conjunction with federal marshals, Plaintiffs entered and searched Penny's home located at 6962 Miro Court, Longmont, Colorado, 80501 (hereinafter, "Penny Home"), and seized numerous items, including computer equipment and documents. [3] This search and seizure was unconstitutional and improper for the reasons set forth in this Counterclaim.

153. On or about August 22, 1995, Plaintiffs (through their Wollersheim/FACTNET Seizure Agents) violated Defendant FACTNET's constitutionally protected Fourth Amendment right to be free from unreasonable search and seizure when, in conjunction with federal marshals, Plaintiffs entered and searched the offices of FACTNET located at Apartment 3K, Tantra Lake Apartments, 880 West Moorehead Circle, Ignacio, COlorado, 80303 (separate locked back room office) (hereinafter, "FACTNET Office"), and seized numerous items, including computer equipment and documents. [4] This search and seizure was unconstitutional and improper for the reasons set forth in this Counterclaim.

154. Defendant Wollersheim had a reasonable expectation of privacy in the Wollersheim Home, because it was the home which he leased, and he further had a right to possession of it. Defendant Wollersheim further has standing to bring this counterclaim because his property was seized during the search of the Wollersheim Home.

155. Defendant Penny had a reasonable expectation of privacy in the Penny Home, because it was his home, and he further had a right to possession of it. Defendant Penny further has standing to bring this counterclaim because his property was seized during the search of the Penny Home.

156. Defendant FACTNET had a reasonable expectation of privacy in the FACTNET Office, because it was the office of FACTNET. Defendant FACTNET further has standing to bring this Counterclaim because its property was seized during the search of the FACTNET Office. Defendants Wollersheim and Penny had a reasonable expectation of privacy in the FACTNET Office as Directors of FACTNET. Defendant Wollersheim had a reasonable expectation of privacy in the FACTNET office because it was part of a back room in Wollersheim's home.

157. Plaintiffs, through their agents, did not have a warrant to search the Wollersheim Home, the Penny Home, or the FACTNET Office, nor did Plaintiffs have a proper writ to search any of these properties or seize the items seized. Plaintiffs' writ was inadequate because:

a. The writ did not describe with reasonable precision the places to be searched and the items to be seized;

b. Issuance of the writ was not supported by an affidavit under oath, or other sworn testimony;

c. No probable cause existed upon which to base the issuance of the writ, since (1) the writ was issued based on declarations and other documents provided by RTC which contained false, incomplete and misleading information, which was intentionally or recklessly included in the documents, and which false and misleading information was material to the issuance of the writ; and without which the writ would not have been issued; (2) the writ was issued based on declarations and other documents provided by RTC which intentionally or recklessly omitted material information, including Plaintiffs' extensive 16-year litigation history with Defendant Wollersheim and FACTNET's non-profit library and archive status, which omissions were material to the issuance of the writ, and without which omissions the writ would not have been issued; (3) the reliability and credibility of the signatories of the documents were not shown by the documents and were not established prior to the issuance of the writ; and (4) the signatories had no sound basis of knowledge for certain material information set forth in the documents, nor was such sound basis of knowledge established by the documents or the Court prior to the issuance of the writ.

d. The writ was too broad to come within the authorization of 17 U.S.C. §503 and the Rules of Copyright concerning the impoundment of materials and equipment that relate to the infringement of copyrights.

e. The statutory authority in 17 U.S.C. §503 cited by Plaintiffs, and relied on by Judge Babcock in issuing the writ, is limited to copyrights, and is not proper authority for issuance of a writ for the seizure of trade secrets. Thus, there was no authority on which to base the portions of the writ concerning the seizure of trade secrets and related materials.

158. In their searches and seizures discussed in this counterclaim, Plaintiffs (including Plaintiffs' Seizure Agents) did not reasonably or in good faith rely on the validity of the writ, as Plaintiffs knew the writ was not valid on its face, was based on false and misleading information (as well as on material omissions), and was not supported by probable cause.

159. The writ was improperly executed because the searches and seizures exceeded the scope of the places to be searched and the items to be seized, as set forth in the writ. In addition, the search of Defendants' (and each of their) computer equipment and files was based on a list of search terms (this list is attached as Exhibit C, hereto), which does not just include categories of the allegedly copyrighted or trade secret materials, or the instrumentalities of copyright and trade secret violation. Rather, this list also includes the names of persons such as Defendants' attorneys (in this action and others), expert witness clients, private donors (for FACTNET), judges in related litigation, and others who are not subject to the terms of the writ of seizure (for example, Swearinger and O'Reilly); as well as other search terms not permitted by the writ. Plaintiffs' search for documents (written and electronic) concerning these parties and terms is an improper execution of the writ because it gave Plaintiffs access to information that was protected by the attorney-client and other privileges, rights of privacy, and other laws -- that was not provided by the language of (or the intent behind) the writ.

160. The searches and seizures were also improperly executed and violative of Defendants' (and each of their) Fourth Amendment rights because the items seized were provided unsupervised to counsel for RTC, rather than to a neutral party or place supervised by a neutral party. In addition, the items seized were revealed to BPI, who was not a party to this lawsuit at the time of the searches and seizures, and thus should not have been privy to the information and materials discovered during the searches and seizures.

161. The searches and seizures were also improperly executed and violative of Defendants' (and each of their) Fourth Amendment rights because the items seized were not maintained in a protected environment, and thus were subject to theft, alteration, and supplementation. [5]

162. The searches and seizures were also improperly executed and violative of Defendants Wollersheim's and FACTNET's Fourth Amendment rights because neither Plaintiffs nor the federal marshals provided Wollersheim or FACTNET with complete inventory lists of the items seized from Wollersheim's or FACTNET's property at the time of the seizures, despite the fact that, in the search of the Wollersheim Home and FACTNET Office, the federal marshals promised such an inventory list to Wollersheim before leaving the premises.

163. The searches and seizures were also improperly executed and violative of Defendants' (and each of their) Fourth Amendment rights because the searches and seizures were executed improperly under the Copyright Rules (set forth in the United States Code following 17 U.S.C. §501, prior to 17 U.S.C. §502).

164. The searches and seizures were also improperly executed and violative of Defendants' (and each of their) Fourth Amendment rights to the extent that attorney-client communications were intercepted by Plaintiffs and were rebroadcast.

165. None of Defendants in any way consented to these searches and seizures of their property. In fact, none of Defendants were advised of the searches and seizures prior to their execution. Defendants only permitted access to the property searched and seized to Plaintiffs and the federal marshals when Plaintiffs and the federal marshals made it known to Defendants that Plaintiffs and the marshals were acting under color of federal authority as agents of the United States government.

166. Defendant Wollersheim was at the Wollersheim Home at the time of the search and seizure therein. He and his girlfriend were in bed and undressed when Plaintiffs (through their Wollersheim/FACTNET Seizure Agents) and the marshals pounded on the door. Defendant Wollersheim and his girlfriend were able only to put on robes before the search, and Defendant Wollersheim was told to stand against a wall and keep his mouth shut in his bedraggled state of semi-dress during the improper search and seizure of the Wollersheim Home. Defendant Wollersheim's personal, private items -- including his clothing, personal documents and personal litigation files for other lawsuits (including against Scientology) -- were searched. News reporters witnessed and filmed portions of the search and seizure of the Wollersheim Home, to Mr. Wollersheim's tremendous embarrassment. Defendant Wollersheim was forced to plead with his landlord after the search and seizure to permit Wollersheim to remain living in the Wollersheim Home. He was further forced to explain to his friends, neighbors and clients the facts of the search and seizure. FACTNET has been rendered uninsurable at an affordable premium (if insurable at all) in part by the improper search and seizure.

167. On the locked door to the FACTNET Office at the back of the Wollersheim Home at the time of the improper search and seizure was a "Search Warrant Special Notice" (attached as Exhibit D, hereto), which had been posted on the door for months. This Notice reads as follows:

The materials contained at this location (880 Moorehead Circle. 3K. Boulder Colorado) are owned by FACTNet Inc. (FACTNET is a non profit research library and archive.) These materials contained at this location are being used in numerous civil and criminal court cases and investigations.

They are currently protected by the confidentiality and immunities designated to attorney client privilege materials, attorney work product materials, library and archive fair use copyright immunities and materials being used in government investigations or in preparation for grand jury investigations. No search warrant is valid that does not specifically mention that these materials are present on this site and are separately protected from ANY inspection, search, and seizure.

If your warrant does not specifically mention the presence of these materials and their exemption you may not proceed without incurring legal liability to the agency or organization you represent. If this is the case, before entering you must recontact the judge who issued the original search warrant and inform him of these facts and that he has possibly been deceived by the organization or individuals requesting this action. (It is a common practice of certain cults like Scientology to swear out false or incomplete affidavits in order to obtain search warrant to inspect documents on their opposition's litigation or investigations against them.)

If I am not here please call FACTNet's legal councils Ford Green at 1-415-2586303 so that my attorney and I may contact relevant government officials, other law firms whose documents are here, and protected, and the media.

UNTIL YOU RECONTACT THE ISSUING JUDGE RELATING THIS INFORMATION, UNDER NO CONDITIONS ARE YOU TO ENTER THESE PREMISES WITHOUT MY OR MY ATTORNEY'S PRESENCE OR WITH ANY OFF DUTY GOVERNMENT OFFICIAL OR NON GOVERNMENT OFFICIAL!

Lawrence Wollersheim, Executive Director. 1-303 473-1111, or Bob Penny , Vice President. 1-303-652-2994

(Emphasis in original)

Despite stopping to read this Notice, and on information and belief, understanding it, the marshals and Plaintiffs broke open the locked door and proceeded to search the FACTNET Office. Neither Plaintiffs, nor the marshals attempted to contact Judge Babcock, or any other federal judge, to ask about the Notice. The search of the FACTNET Office (and seizure of items therein) was improper and unlawfully executed in that Plaintiffs failed to heed this Notice.

168. As a direct and proximate result of the deprivation of Defendant Wollersheim's Fourth Amendment rights, as set forth in this counterclaim, Defendant Wollersheim suffered at least the following losses in amounts to be determined, but not less than $50,000:

(a) severe humiliation, embarrassment, and mental anguish;

(b) loss of earnings from any salary Wollersheim would have been paid by FACTNET, which was rendered inoperable for months (and is still not completely operational at present);

(c) loss of earnings (at approximately $50,000 per year) in that Defendant Wollersheim has been unable to perform his other jobs as computer consultant and expert witness due to the time spent rebuilding FACTNET;

(d) personal items seized from the Wollersheim Home were not returned (or not returned in their original condition and working order), so that Defendant Wollersheim had to repair or replace numerous items;

(e) physical damage to Defendant Wollersheim's home and property;

(f) loss of reputation;

(g) loss of attorney-client and attorney work-product privileged information;

(h) and other losses to be determined.

169. As a direct and proximate result of the deprivation of Defendant Penny's Fourth Amendment rights, as set forth in this counterclaim, Defendant Penny suffered at least the following losses in amounts to be determined, but not less than $50,000:

(a) severe humiliation, embarrassment, and mental anguish;

(b) loss of earnings from any salary Penny would have been paid by FACTNET, which was rendered inoperable for months (and is still not completely operational at present);

(c) personal items seized were not returned (or not returned in their original condition and working order), so that Defendant Penny had to repair or replace numerous items;

(d) physical damage to Defendant Penny's home and property;

(e) increased rapidity in the deterioration of his multiple sclerosis physical and mental condition;

(f) loss of reputation;

(g) loss of attorney-client and attorney work-product privileged information;

(h) and other losses to be determined.

170. As a direct and proximate result of the deprivation of Defendant FACTNET's Fourth Amendment rights, as set forth in this counterclaim, Defendant FACTNET suffered at least the following losses:

(a) FACTNET was rendered inoperable for months (and is still not completely operational at present), which resulted in a loss of approximately $50,000 to $80,000 in donations, plus additional costs to restart FACTNET;

(b) FACTNET is no longer insurable at an affordable premium (if at all);

(c) items seized were not returned in their original condition and working order, so that FACTNET had to repair or replace numerous items at a cost of at least $50,000;

(d) loss of numerous original and irreplaceable items in an amount to be determined;

(e) physical damage to FACTNET's office and property in an amount to be determined;

(f) loss of reputation and good will in an amount to be determined;

(g) loss of attorney-client and attorney work-product privileged information;

(h) and other losses to be determined.

171. Plaintiffs' actions set forth in this counterclaim were willful, malicious, fraudulent, and part of their policies of intelligence gathering, information suppression, and intimidation; as well as their policy of harassment of witnesses -- including, but not limited to Defendants. Moreover, Plaintiffs' actions set forth in this counterclaim were part of Scientology's "Fair Game" policy to "trick, sue, lie to or destroy ... or deprive of property or injure by any means...;" as well as Scientology's "Snow White" policy of document removal. Plaintiffs knew that their searches and seizures were improper and violated Defendants' (and each of their) Fourth Amendment rights. Plaintiffs further intended to use the searches and seizures to obtain privileged information, and other confidential information to which Plaintiffs knew they were not entitled. Plaintiffs additionally intended to use the searches and seizures to obstruct justice, and as part of a conspiracy to obstruct justice. Moreover, Plaintiffs intended that the searches and seizures be done to harass, annoy, embarrass, intimidate and cause hardship to Defendants, and each of them. As such, Plaintiffs' actions in searching and seizing property from Defendants, and each of them, were not done in good faith, and Defendants are each entitled to punitive damages.

COUNTERCLAIM FOR TRESPASS TO REAL PROPERTY

(By Defendant Wollersheim)

Defendant Wollersheim, through his counsel, counterclaims pursuant as follows:

172. Defendant Wollersheim realleges, repeats, and incorporates by reference herein, the allegations set forth in all of the previous paragraphs of this document, as if set forth fully herein.

173. Defendant Wollersheim, at all times herein mentioned, rents and was in possession of the real property and improvements located at Apt. 3K, Tantra Lake Apartments, 880 West Moorehead Circle, Ignacio, COlorado, 80303 ("Wollersheim Home") including the office of FACTNET located in a back room of the Wollersheim Home ("FACTNET Office").

174. On or about August 22, 1995, Plaintiffs, by and through their agents (Plaintiffs' Wollersheim/FACTNET Seizure Agents), intentionally entered the Wollersheim Home and FACTNET Office without Defendant Wollersheim's consent.

175. As a direct and proximate result of Plaintiffs' actions Plaintiffs, and each of them, have interfered with Defendant Wollersheim's right to the possession of the Wollersheim Home and FACTNET Office.

176. As a further direct and proximate result of Plaintiffs' actions, Defendant Wollersheim has suffered property damage and loss of earnings in an amount to be determined.

177. As a further direct and proximate result of Plaintiffs' actions, Defendant Wollersheim has suffered the loss of attorney-client and attorney work-product privileged information.

178. As a further direct and proximate result of Plaintiffs' conversion of Mr. Wollersheim's property, Defendant Wollersheim has suffered loss of his reputation for maintaining the privacy and secrecy of materials provided to him.

179. As a further direct and proximate result of Plaintiffs' actions, Defendant Wollersheim has suffered severe humiliation, embarrassment, mental anguish and emotional distress.

180. As a further, direct and proximate result of Plaintiffs' actions, Defendant Wollersheim has suffered loss of any salary he would have been paid by FACTNET, which was rendered inoperable for months (and is still not completely operational at present); as well as a loss of earnings (at approximately $50,000 per year) in that Defendant Wollersheim has been unable to perform his other jobs as computer consultant and expert witness due to the time spent rebuilding FACTNET; and other losses to be determined.

181. Plaintiffs' actions were willful and malicious in that Plaintiffs (and each of them) were aware that Defendant Wollersheim had possession and right to possession of the Wollersheim Home and FACTNET Office, and Plaintiffs' purposes for entry therein were for "Fair Game," "Snow White," obstruction of justice, and to obtain materials and information possessed by Defendant Wollersheim that Plaintiffs knew did not belong to Plaintiffs, including certain privileged documents and confidential materials; as well as to harass, annoy, embarrass, intimidate, and cause hardship to Defendant Wollersheim. Defendant Wollersheim is thus entitled to punitive damages.

WHEREFORE, Defendant Wollersheim prays judgment on this counterclaim against Plaintiffs, and each of them, as follows: (1) that each Plaintiff be required to pay Defendant Wollersheim compensatory and special damages in an amount according to proof; (2) that Plaintiffs be required to pay Defendant Wollersheim punitive damages.

COUNTERCLAIM FOR TRESPASS TO REAL PROPERTY

(By Defendant Penny)

Defendant Penny, through his counsel, counterclaims against Plaintiffs as follows:

182. Defendant Penny realleges, repeats, and incorporates by reference herein, the allegations set forth in all of the previous paragraphs of this document, as if set forth fully herein.

183. Defendant Penny is, and at all times herein mentioned was, the owner and in possession of the real property and improvements located at 6962 Miro Court, Longmont, Colorado, 80501 ("Penny Home").

184. On or about August 22, 1995, Plaintiffs, by and through their agents (Plaintiffs' Penny Seizure Agents), intentionally entered the Penny Home without Defendant Penny's consent.

185. As a direct and proximate result of Plaintiffs' actions, Plaintiffs, and each of them, have interfered with Defendant Penny's right to the possession of the Penny Home.

186. As a further direct and proximate result of Plaintiffs' actions, Defendant Penny has suffered property damage and loss of earnings in an amount to be determined.

187. As a further direct and proximate result of Plaintiffs' actions, Defendant Penny has suffered the loss of attorney-client and attorney work-product privileged information.

188. As a further direct and proximate result of Plaintiffs' conversion of Mr. Penny's property, Defendant Penny has suffered loss of his reputation for maintaining the privacy and secrecy of materials provided to him.

189. As a further direct and proximate result of Plaintiffs' actions, Defendant Penny has suffered severe humiliation, embarrassment, and emotional distress; as well as personal injury and increased rapidity in the worsening of a pre-existing physical ailment; and other losses to be determined.

190. Plaintiffs' actions were willful and malicious in that Plaintiffs were aware that Defendant Penny owned and possessed the Penny Home, and Plaintiffs' purpose for entry thereon was for "Fair Game," "Snow White," obstruction of justice, and to obtain materials possessed by Defendant Penny that Plaintiffs knew did not belong to Plaintiffs, including certain privileged documents and confidential materials; as well as to harass, annoy, embarrass and cause hardship to Defendant Penny. Defendant Penny is thus entitled to punitive damages.

WHEREFORE, Defendant Penny prays judgment on this counterclaim against Plaintiffs, and each of them, as follows: (1) that Plaintiffs be required to pay Defendant Penny compensatory and special damages in an amount according to proof; (2) that Plaintiffs be required to pay Defendant Penny punitive damages.

COUNTERCLAIM FOR TRESPASS TO PERSONAL PROPERTY (CHATTELS)

(By Defendant Wollersheim)

Defendant Wollersheim through his counsel, counterclaims against Plaintiffs as follows:

191. Defendant Wollersheim realleges, repeats, and incorporates by reference herein, the allegations set forth in all of the previous paragraphs of this document, as if set forth fully herein.

192. Defendant Wollersheim is, and at all times herein mentioned was, the owner and in possession of certain personal property, including computer equipment and documents, which he kept at the Wollersheim Home.

193. On or about August 22, 1995, Plaintiffs, by and through their agents (Plaintiffs' Wollersheim/FACTNET Seizure Agents), intentionally entered the Wollersheim Home, and intentionally took possession of Mr. Wollersheim's personal property, all without Defendant Wollersheim's consent.

194. As a direct and proximate result of Plaintiffs' actions, Plaintiffs have interfered with Defendant Wollersheim's right to the possession of his personal property.

195. As a further direct and proximate result of Plaintiffs' actions, Defendant Wollersheim has suffered property damage and loss of earnings in an amount to be determined.

196. As a further direct and proximate result of Plaintiffs' actions, Defendant Wollersheim has suffered the loss of attorney-client and attorney work-product privileged information.

197. As a further direct and proximate result of Plaintiffs' conversion of the property of Mr. Wollersheim, Defendant Wollersheim has suffered loss of his reputation for maintaining the privacy and secrecy of materials provided to him.

198. As a further direct and proximate result of Plaintiffs' actions, Defendant Wollersheim has suffered severe humiliation, embarrassment, mental anguish and emotional distress.

199. As a further, direct and proximate result of Plaintiffs' actions, Defendant Wollersheim has suffered loss of any salary that he would have been paid by FACTNET, which was rendered inoperable for months (and is still not completely operational at present); as well as a loss of earnings (at approximately $50,000 per year) in that Defendant Wollersheim has been unable to perform his other jobs as computer consultant and expert witness due to the time spent rebuilding FACTNET; and other losses to be determined.

200. Plaintiffs' actions were willful and malicious in that Plaintiffs (and each of them) were aware that Defendant Wollersheim owned the personal property at issue, and Plaintiffs' purposes for taking possession of it were for "Fair Game," "Snow White," obstruction of justice, and to obtain materials that Plaintiffs knew did not belong to them, including certain privileged documents and confidential materials; as well as to harass, annoy, intimidate, and cause hardship to Defendant Wollersheim. Defendant Wollersheim is thus entitled to punitive damages.

COUNTERCLAIM FOR TRESPASS TO PERSONAL PROPERTY (CHATTELS)

(By Defendant Penny)

Defendant Penny through his counsel, counterclaims against Plaintiffs as follows:

201. Defendant Penny realleges, repeats, and incorporates by reference herein, the allegations set forth in all of the previous paragraphs of this document, as if set forth fully herein.

202. Defendant Penny is, and at all times herein mentioned was, the owner and in possession of certain personal property, including computer equipment and documents, which he kept at the Penny Home.

203. On or about August 22, 1995, Plaintiffs, by and through their agents (Plaintiffs' Penny Seizure Agents), intentionally entered the Penny Home, and intentionally took possession of Mr. Penny's personal property, all without Defendant Penny's consent.

204. As a direct and proximate result of Plaintiffs' actions, Plaintiffs have interfered with Defendant Penny's right to the possession of his personal property.

205. As a further direct and proximate result of Plaintiffs' actions, Defendant Penny has suffered property damage and loss of earnings in an amount to be determined.

206. As a further direct and proximate result of Plaintiffs' actions, Defendant Penny has suffered the loss of attorney-client and attorney work-product privileged information.

207. As a further direct and proximate result of Plaintiffs' conversion of Mr. Penny's property, Defendant Penny has suffered loss of his reputation for maintaining the privacy and secrecy of materials provided to him.

208. As a further direct and proximate result of Plaintiffs' actions, Defendant Penny has suffered severe humiliation, embarrassment, mental anguish and emotional distress; as well as personal injury.

209. As a further, direct and proximate result of Plaintiffs' actions, Defendant Penny has suffered loss of any salary that he would have been paid by FACTNET, which was rendered inoperable for months (and is still not completely operational at present); and other losses to be determined.

210. Plaintiffs' actions were willful and malicious in that Plaintiffs (and each of them) were aware that Defendant Penny owned and possessed the personal property at issue, and Plaintiffs' purposes for taking possession of it were for "Fair Game," "Snow White," obstruction of justice, and to obtain materials that Plaintiffs knew did not belong to them, including certain privileged documents and confidential materials; as well as to harass, annoy, intimidate and cause hardship to Defendant Penny. Defendant Penny is thus entitled to punitive damages.

WHEREFORE, Defendant Penny prays judgment on this counterclaim against Plaintiffs, and each of them, as follows: (1) that each Plaintiff be required to pay Defendant Penny compensatory and special damages in an amount according to proof; (2) that Plaintiffs be required to pay Defendant Penny punitive damages.

COUNTERCLAIM FOR TRESPASS TO PERSONAL PROPERTY (CHATTELS)

(By Defendant FACTNET)

Defendant FACTNET through its counsel, counterclaims against Plaintiffs as follows:

211. Defendant FACTNET realleges, repeats, and incorporates by reference herein, the allegations set forth in all of the previous paragraphs of this document, as if set forth fully herein.

212. Defendant FACTNET is, and at all times herein mentioned was, the owner and in possession of certain personal property, including computer equipment and documents, which personal property was kept at the FACTNET Office.

213. On or about August 22, 1995, Plaintiffs, by and through their agents (Plaintiffs' Wollersheim/FACTNET Seizure Agents), intentionally entered the FACTNET office and intentionally took possession of the personal property of FACTNET, all without Defendant FACTNET's consent, or that of any of its officers or directors.

214. As a direct and proximate result of Plaintiffs' actions, Plaintiffs have interfered with Defendant FACTNET's right to the possession of its personal property.

215. As a further direct and proximate result of Plaintiffs' actions, Defendant FACTNET has suffered property damage and loss of donations in an amount to be determined.

216. As a further direct and proximate result of Plaintiffs' actions, Defendant FACTNET has suffered the loss of attorney-client and attorney work-product privileged information.

217. As a further direct and proximate result of Plaintiffs' conversion of the property of FACTNET, Defendant FACTNET has suffered loss of its reputation for maintaining the privacy and secrecy of materials provided to it; and other losses to be determined.

218. As a further, direct and proximate result of Plaintiffs' actions, Defendant FACTNET has suffered economic loss in that FACTNET is no longer insurable at an affordable premium (if at all).

219. Plaintiffs' actions were willful and malicious in that Plaintiffs (and each of them) were aware that Defendant FACTNET owned and possessed the personal property at issue, and Plaintiffs' purposes for taking possession of it were for "Fair Game," "Snow White," obstruction of justice, and to obtain materials that Plaintiffs knew did not belong to them, including certain privileged documents and confidential materials; as well as to harass, intimidate and cause hardship to Defendant FACTNET. Defendant FACTNET is thus entitled to punitive damages.

WHEREFORE, Defendant FACTNET prays judgment on this counterclaim against Plaintiffs, and each of them, as follows: (1) that each Plaintiff be required to pay Defendant FACTNET compensatory and special damages in an amount according to proof; (2) that Plaintiffs be required to pay Defendant FACTNET punitive damages.

COUNTERCLAIM FOR CONVERSION

(By Defendant Wollersheim)

Defendant Wollersheim, through his counsel, counterclaims against Plaintiffs as follows:

220. Defendant Wollersheim realleges, repeats, and incorporates by reference herein, the allegations set forth in all of the previous paragraphs of this document, as if set forth fully herein.

221. On or about August 22, 1995, Plaintiffs, by and through their agents (Plaintiffs' Wollersheim/FACTNET Seizure Agents), intentionally entered the Wollersheim Home, and intentionally removed the personal property of Mr. Wollersheim, all without Defendant Wollersheim's consent, and converted it to Plaintiffs' own use.

222. Certain items were used by Plaintiffs for Plaintiffs' purposes for a period of time, but have now been returned to Defendant Wollersheim.

223. Other items, which on information and belief are still being used by Plaintiffs for Plaintiffs' purposes, have not been returned to Defendant Wollersheim.

224. As a direct and proximate result of Plaintiffs' conversion of Mr. Wollersheim's property, Defendant Wollersheim has suffered loss of his reputation for maintaining the privacy and secrecy of materials provided to him.

225. As a further direct and proximate result of Plaintiffs' actions, Defendant Wollersheim has suffered the loss of attorney-client and attorney work-product privileged information.

226. As a direct and proximate result of Plaintiffs' conversion of Mr. Wollersheim's property, Defendant Wollersheim has sustained a loss in a dollar amount as yet to be determined.

227. As a further direct and proximate result of Plaintiffs' actions, Defendant Wollersheim has suffered severe humiliation, embarrassment, mental anguish and emotional distress.

228. As a further, direct and proximate result of Plaintiffs' actions, Defendant Wollersheim has suffered loss of any salary that he would have been paid by FACTNET, which was rendered inoperable for months (and is still not completely operational at present); as well as a loss of earnings (at approximately $50,000 per year) in that Defendant Wollersheim has been unable to perform his other jobs as computer consultant and expert witness due to the time spent rebuilding FACTNET; and other losses to be determined.

229. Plaintiffs' actions were willful and malicious in that Plaintiffs (and each of them) were aware that Defendant Wollersheim owned the personal property at issue, and Plaintiffs' purposes for taking possession of it were for "Fair Game," "Snow White," obstruction of justice, and to obtain materials that Plaintiffs knew did not belong to them, including certain privileged documents and confidential materials; as well as to harass, annoy and cause hardship to Defendant Wollersheim. Defendant Wollersheim is thus entitled to punitive damages. Moreover, to the extent that Plaintiffs have failed to return any of the items converted, despite being ordered to do so by this Court, Plaintiffs have acted in bad faith, and Defendant Wollersheim is entitled to punitive damages.

COUNTERCLAIM FOR CONVERSION

(By Defendant Penny)

Defendant Penny, through his counsel, counterclaims against Plaintiffs as follows:

230. Defendant Penny realleges, repeats, and incorporates by reference herein, the allegations set forth in all of the previous paragraphs of this document, as if set forth fully herein.

231. On or about August 22, 1995, Plaintiffs, by and through their agents (Plaintiffs' Penny Seizure Agents), intentionally entered the Penny Home, and intentionally removed Mr. Penny's personal property, all without Defendant Penny's consent, and converted it to Plaintiffs' own use.

232. Certain items were used by Plaintiffs for Plaintiffs' purposes for a period of time, but have now been returned to Defendant Penny.

233. Other items, which on information and belief are still being used by Plaintiffs for Plaintiffs' purposes, have not been returned to Defendant Penny.

234. As a direct and proximate result of Plaintiffs' conversion of Mr. Penny's property, Defendant Penny has suffered loss of his reputation for maintaining the privacy and secrecy of materials provided to him.

235. As a further direct and proximate result of Plaintiffs' actions, Defendant Penny has suffered the loss of attorney-client and attorney work-product privileged information.

236. As a direct and proximate result of Plaintiffs' conversion of the property of Mr. Penny, Defendant Penny has sustained a loss in a dollar amount as yet to be determined.

237. As a further direct and proximate result of Plaintiffs' actions, Defendant Penny has suffered severe humiliation, embarrassment, mental anguish, and emotional distress.

238. As a further, direct and proximate result of Plaintiffs' actions, Defendant Penny has suffered loss of any salary that he would have been paid by FACTNET, which was rendered inoperable for months (and is still not completely operational at present); and other losses to be determined.

239. Plaintiffs' actions were willful and malicious in that Plaintiffs (and each of them) were aware that Defendant Penny owned the personal property at issue, and Plaintiffs' purposes for taking possession of it were for "Fair Game," "Snow White," obstruction of justice, and to obtain materials that Plaintiffs knew did not belong to them, including certain privileged documents and confidential materials; as well as to harass, annoy and cause hardship to Defendant Penny. Defendant Penny is thus entitled to punitive damages. Moreover, to the extent that Plaintiffs have failed to return any of the items converted, despite being ordered to do so by this Court, Plaintiffs have acted in bad faith, and Defendant Penny is entitled to punitive damages.

COUNTERCLAIM FOR CONVERSION

(By Defendant FACTNET)

Defendant FACTNET, through his counsel, counterclaims against Plaintiffs as follows:

240. Defendant FACTNET realleges, repeats, and incorporates by reference herein, the allegations set forth in all of the previous paragraphs of this document, as if set forth fully herein.

241. On or about August 22, 1995, Plaintiffs, by and through their agents (Plaintiffs' Wollersheim/FACTNET Seizure Agents), intentionally entered the FACTNET Office, and intentionally removed the personal property of FACTNET, all without Defendant FACTNET's consent, and converted it to Plaintiffs' own use.

242. Certain items were used by Plaintiffs for Plaintiffs' purposes for a period of time, but have now been returned to Defendant FACTNET.

243. Other items, which on information and belief are still being used by Plaintiffs for Plaintiffs' purposes, have not been returned to Defendant FACTNET.

244. As a direct and proximate result of Plaintiffs' conversion of FACTNET's property, Defendant FACTNET was unable to continue to operate properly, thus resulting in loss of donations.

245. As a further direct and proximate result of Plaintiffs' conversion of FACTNET's property, Defendant FACTNET has suffered loss of its goodwill and reputation for maintaining the privacy and secrecy of materials provided to it.

246. As a further direct and proximate result of Plaintiffs' actions, Defendant FACTNET has suffered the loss of attorney-client and attorney work-product privileged information.

247. As a direct and proximate result of Plaintiffs' conversion of FACTNET's property, Defendant FACTNET has sustained a loss in a dollar amount as yet to be determined; and other losses to be determined.

248. As a further, direct and proximate result of Plaintiffs' actions, Defendant FACTNET has suffered economic loss in that FACTNET is no longer insurable at an affordable premium (if at all).

249. Plaintiffs' actions were willful and malicious in that Plaintiffs (and each of them) were aware that Defendant FACTNET owned the personal property at issue, and Plaintiffs' purposes for taking possession of it were for "Fair Game," "Snow White," obstruction of justice, and to obtain materials that Plaintiffs knew did not belong to them, including certain privileged documents and confidential materials; as well as to harass, and cause hardship to Defendant FACTNET. Defendant FACTNET is thus entitled to punitive damages. Moreover, to the extent that Plaintiffs have failed to return any of the items converted, despite being ordered to do so by this Court, Plaintiffs have acted in bad faith, and Defendant FACTNET is entitled to punitive damages.

COUNTERCLAIM FOR ABUSE OF PROCESS

(By All Defendants)

Defendants FACTNET, Wollersheim and Penny, collectively and individually, through their respective counsel, counterclaim against Plaintiffs as follows:

250. Defendants reallege, repeat, and incorporate by reference herein, the allegations set forth in all of the previous paragraphs of this document, as if set forth fully herein.

251. On or about August 21, 1995, Plaintiff RTC filed the present action for copyright infringement and trade secret misappropriation, and requested ex parte searches and seizures of Defendants' property. BPI later joined as a party and amended the complaint to allege similar claims to RTC's. Both the filing of the action, and the request for an ex parte search and seizure constitute abuses of process in that the action was not filed (and the searches not requested) in order to obtain legal redress or because Plaintiffs believed that Defendants had infringed on Plaintiffs' alleged copyrights, or that Defendants had misappropriated Plaintiffs' alleged trade secrets; nor was the action filed because Plaintiffs had suffered any monetary loss as a result of the use of copyrighted materials or the alleged trade secret misappropriation, or for any other proper purpose. Rather, despite knowing that the materials were not trade secrets, and their publication did not constitute copyright infringement, Plaintiffs nevertheless filed this action for improper purposes, with ulterior motives, to accomplish certain ends or goals for which the action was not designed, namely:

a. To harass and cause financial hardship to Defendants;

b. To inhibit Defendants' willingness to assist in efforts to collect, archive, publish, and make available for defense in lawsuits, materials revealing Plaintiffs' criminal activities, use of coercive persuasion, false health claims, psychotic breaks (PTS Type III phenomena), induced suicides, secret suicides and other casualties, financial frauds, tax frauds, and other improper activities;

c. To intimidate Defendants, so that Defendants and other individuals and organizations with opinions and views contrary to Plaintiffs' would restrict or terminate any efforts to bring these opinions and views to the attention of the public;

d. To inhibit Defendant Wollersheim from attempting to collect the $2.5 million judgment (with interest) that he was awarded against Scientology (including Plaintiffs) in Wollersheim v. Church of Scientology, 212 Cal.App.3d 872 (1989);

e. As a part of Plaintiffs' (and Scientology's in general) policies of intelligence gathering, information suppression, intimidation, harassment of critics (including, but not limited to, Defendants), and "Fair Game" -- which permits Plaintiffs (and their agents) to "trick, sue, lie to or destroy ... or deprive of property or injure by any means..." any opponent;

f. To prevent attorneys and other parties who are involved in or contemplating litigation or other actions against Scientology from gaining access to the information concerning Scientology that was available from Defendant FACTNET's library prior to Plaintiffs' seizure of the materials on or about August 22, 1995;

g. To gain access to confidential and/or privileged materials and information (including records of individual statements, attorney-client privileged material, attorney work-product, and other privileged and/or confidential information), that FACTNET had lawfully amassed that would be harmful to Scientology if publicized or used against it in a suit or other action (including suits Scientology and Wollersheim were concurrently involved in);

h. To gather intelligence; including to identify the names of, and information concerning, (1) critics of Scientology, (2) investigations against Scientology, (3) witnesses against Scientology, and (4) legal actions concerning Scientology (including, but not limited to, those actions which Scientology and Wollersheim were concurrently involved in);

i. To obstruct justice;

j. To eliminate or reduce the scope of FACTNET, believed to be the largest non-profit library and archive concerning Scientology in the world;

k. To collect (and possibly destroy) certain original works concerning Scientology;

l. To prevent Defendant Wollersheim from acting as an expert witness or source in Scientology investigations and lawsuits throughout the world;

m. To prevent the establishment, and exercise of religion, as well as to prevent the lawful association of people;

n. To gain access to FACTNET's donor lists, former Scientology member and whistleblower lists, witness lists, and lists of Scientology induced suicides; as well as information on Scientology-related financial frauds, and other Scientology-related criminal and tortious conduct; and to prevent FACTNET from obtaining similar information in the future;

o. In accordance with Scientology policy, as part of an on-going conspiracy that was prosecuted in U.S. v. Hubbard, and further as operation or project "Snow White," to remove and eliminate critical, negative, or "entheta" documents, including but not limited to documents accumulated and filed in Church of Scientology v. Fishman, Fishman v. Geertz, and other cases, from court files, official government files, law office files, and the files of expert consultants and witnesses such as Defendants; and

252. To otherwise hamper and inhibit Defendants' and others' ability and willingness to exercise their Constitutional and legal rights in a way that may be adverse to Scientology's interests.

253. As a direct and proximate result of Plaintiffs' actions, Defendants' ability and willingness to do the following has been diminished:

a. Exercise their Constitutional right to express their views in opposition to Plaintiffs' beliefs, policies, practices and activities;

b. Exercise their Constitutional right to petition (see, e.g., Church of Scientology v. Wollersheim, 42 Cal.App.4th 628 (1996));

c. Lawfully provide information concerning Scientology and other coercive persuasion cults and organizations to persons interested in it;

d. Maintain the secrecy of privileged and confidential information provided to Defendants concerning Scientology and other mind control organizations;

e. Collect and archive information concerning Scientology and other coercive persuasion organizations; and

f. Perform other legally and Constitutionally protected acts as described, in part, above.

254. As a direct and proximate result of Plaintiffs' abuses of process, as set forth in this counterclaim (and referencing the previous counterclaims), Defendants, and each of them, have suffered property damage and economic losses as set forth in the preceding counterclaims. Defendants, and each of them, have further suffered loss of income (or donations, in the case of FACTNET), attorneys fees, and court costs as a direct and proximate result of Plaintiffs' abuses of process detailed herein. Defendants Wollersheim and Penny have further suffered mental anguish, emotional distress, and humiliation; and Defendants have each suffered loss of reputation as a direct and proximate result of Plaintiffs' abuses of process detailed herein.

255. Plaintiffs' filing of the present action and requesting/obtaining an ex parte search and seizure for an improper purpose was done willfully, maliciously, oppressively, and in conscious disregard of Defendants' Constitutional rights to free speech, privacy and protection from unlawful search and seizure, as well as in conscious disregard of Defendants' rights in property, and other rights.

256. Due to the willful and malicious nature of Plaintiffs' conduct, and the rights Plaintiffs' have tried to abridge by filing this action and obtaining the ex parte searches and seizures against Defendants, it is necessary to assess punitive and exemplary damages against Plaintiffs to punish and make an example of Plaintiffs and in order to deter Plaintiffs and others from engaging in similar conduct in the future.

WHEREFORE, Defendants, and each of them, pray judgment on this counterclaim against Plaintiffs, and each of them, as follows: (1) that each Plaintiff be required to pay each Defendant compensatory and special damages in an amount according to proof, and punitive damages; and (2) that Plaintiffs' causes of action be dismissed in their entirety, without leave to amend, in favor of all Defendants.

COUNTERCLAIM FOR INVASION OF PRIVACY

(Defendants Wollersheim and Penny)

Defendants Wollersheim and Penny, through their counsel, counterclaim against Plaintiffs as follows:

257. Defendants (for the purposes of this Counterclaim, the term "Defendants" refers only to Wollersheim and Penny) reallege, repeat and incorporate by reference herein, the allegations set forth in all of the previous paragraphs of this document, as if set forth fully herein.

258. On or about August 22, 1995, Plaintiffs, through their agents (Plaintiffs' Seizure Agents), without Defendants' consent, invaded Defendants' rights to privacy by entering Defendants' homes and office, and invading upon their solitude therein. Plaintiffs, through their agents, further invaded the privacy of Defendants by searching through Defendants' homes and office and seizing therein materials without Defendants' consent.

259. Plaintiffs, through their agents, further invaded Defendants' privacy by revealing documentation and information obtained during the non-consensual searches of Defendants' homes (and office) to third-parties, including, but not limited to BPI (who was not a Plaintiff at the time, but for whom, on information and belief, Plaintiffs' Seizure Agents were secretly working as agents) and the local news media. The search of the homes included private areas, and the materials taken included private, privileged, and confidential documents and other materials. Similarly, the materials revealed to third-parties included private, privileged and confidential materials.

260. The intrusion into Defendants' homes and office was offensive and objectionable to Defendants and to a reasonable person of ordinary sensibilities in that the intrusions were non-consensual, under color of law, and into Defendants' homes, office, and/or other private areas and materials. Moreover, the intrusions were offensive and objectionable to Defendants and to a reasonable person of ordinary sensibilities in that private, privileged and confidential information taken during the intrusions into Defendant Wollersheim's and Defendant Penny's homes was revealed to third parties, including Plaintiff BPI, against whom the materials were intended to be private, privileged and confidential. Defendants Wollersheim and Penny were further exposed to ridicule, humiliation, and loss of reputation as a result of Plaintiffs' invasions.

261. The facts and information disclosed to third parties about Defendants were private facts that Defendants desired to keep private. These facts included private legal records (including attorney-client privileged communications and information), personal letters and documents, Defendant Wollersheim's work as an expert consultant, and personal information about both Defendants.

262. The disclosure by Plaintiffs of the above facts was offensive and objectionable to Defendants, and to a reasonable person of ordinary sensibilities in that such facts contain intimate details about Defendants' lives, thoughts, and problems. No legitimate public concern is served by revealing these facts, or identifying Defendants as the persons to whom these facts relate.

263. As a direct and proximate result of the above disclosures, Defendants were humiliated, exposed to contempt and ridicule, and suffered a loss of reputation -- all to their general damage in an amount according to proof.

264. As a further direct and proximate result of the above-mentioned disclosures, Defendants suffered loss of earnings and other economic injury as set forth (and incorporated by reference) in the previous counterclaims, all to Defendants' special damage in an amount according to proof.

265. In making the disclosures described above, Plaintiff RTC was guilty of oppression, fraud, or malice, in that Plaintiff made the disclosures with a willful and conscious disregard of Defendants' rights. Defendants, therefore, seek an award of punitive damages.

WHEREFORE, Defendants, and each of them, pray judgment on this counterclaim against Plaintiffs, and each of them, as follows: (1) that each Plaintiff be required to pay each Defendant general and special damages in an amount according to proof; (2) that each Plaintiff be required to pay each Defendant punitive damages; (3) for an injunction prohibiting Plaintiffs (and their agents) from revealing to any third party any of the information or material obtained during the intrusions into Defendants' homes and office.

NEGLIGENT INFLICTION OF EMOTIONAL DISTRESS

(By Defendant Wollersheim)

Defendant Wollersheim, through his counsel, counterclaims against Plaintiffs as follows:

266. Defendant Wollersheim realleges, repeats and incorporates by reference herein, the allegations set forth in all of the previous paragraphs of this document, as if set forth fully herein.

267. Plaintiffs, through their conduct and actions described herein, including their negligence, negligently created an unreasonable risk of physical and emotional harm and distress to Defendant Wollersheim, and have caused Wollersheim to be put in fear for his safety.

268. Wollersheim's fear is evidenced by and has resulted in his sustaining physical consequences and long continued emotional disturbance.

269. Plaintiffs' conduct herein included willful, wanton and malicious behavior entitling Defendant Wollersheim to exemplary damages.

WHEREFORE, Defendant Wollersheim prays judgment on this counterclaim against Plaintiffs, and each of them, as follows: (1) that each Plaintiff be required to pay Defendant Wollersheim compensatory and special damages in an amount according to proof, and punitive damages; and (2) that Plaintiffs' cause of action be dismissed in its entirety without leave to amend, in favor of Defendant Wollersheim.

COUNTERCLAIM FOR INTENTIONAL INFLICTION OF EMOTIONAL DISTRESS

(By Defendant Wollersheim)

Defendant Wollersheim, through his counsel, counterclaims against Plaintiffs as follows:

270. Defendant Wollersheim, realleges, repeats and incorporates by reference herein, the allegations set forth in all of the previous paragraphs of this document, as if set forth fully herein.

271. Plaintiffs, through their conduct (including their outrageous conduct) and actions described herein, intentionally (and recklessly) created an unreasonable risk of physical and emotional harm and distress to Defendant Wollersheim, and have caused Wollersheim to be put in fear of his safety.

272. Wollersheim's fear is evidenced by and has resulted in his sustaining physical consequences and long continued emotional disturbance.

273. Plaintiffs' conduct herein included willful, wanton and malicious behavior entitling Wollersheim to exemplary damages.

WHEREFORE, Defendant Wollersheim prays judgment on this counterclaim against Plaintiffs, and each of them, as follows: (1) that each Plaintiff be required to pay Defendant Wollersheim compensatory and special damages in an amount according to proof and punitive damages; and (2) that Plaintiffs' cause of action be dismissed in its entirety without leave to amend, in favor of Defendant Wollersheim.

COUNTERCLAIM FOR OUTRAGEOUS CONDUCT

(Defendants FACTNET, Wollersheim and Penny)

Defendants, through their counsel, counterclaim against Plaintiffs as follows:

274. Defendants reallege, repeat and incorporate by reference herein, the allegations set forth in all of the previous paragraphs of this document, as if set forth fully herein.

275. The acts and conduct of the Plaintiffs described herein constitute extreme and outrageous conduct.

276. Plaintiffs engaged in the conduct described herein recklessly, or with the intent of causing the Defendants severe emotional distress.

277. Defendants Wollersheim and Penny have incurred severe emotional distress as a result of the conduct of the Plaintiffs described herein.

278. As a result of the outrageous conduct of the Plaintiffs, the Defendants, and each of them, have sustained injuries, losses and damages.

WHEREFORE, Defendants pray judgment on this counterclaim against Plaintiffs, and each of them, as follows: (1) that each Plaintiff be required to pay each Defendant compensatory and special damages in an amount according to proof and punitive damages; and (2) that Plaintiffs' cause of action be dismissed in its entirety without leave to amend, in favor of all Defendants.

JURY DEMAND

Defendants demand a trial by jury on all issues, causes of action and counterclaims.

DATED this ____ day of February, 1997.

BEEM & MANN, P.C.

By_______________________________

Clifford L. Beem, #917

One Norwest Center - Suite 3901

1700 Lincoln Street

Denver, Colorado 80203

(303) 894-8100

Attorneys for Defendants

F.A.C.T.Net, Inc. and

Lawrence Wollersheim

WALDBAUM, CORN, KOFF,

BERGER & COHEN, P.C.

By_______________________________

Michael H. Berger, #6619

Scot M. Peterson, #18950

303 East 17th Avenue, Suite 940

Denver, Colorado 80203

(303) 861-1166

Attorneys for Defendant

Robert Penny

Footnotes

[1]Even though BPI was not yet a Plaintiff in this case at the time of the illegal searches and seizures at issue in this counterclaim, on information and belief, at least the following people who took part in the searches and seizures, were acting not only as agents of RTC, but also as agents of BPI: Ronald Tencati, Robert Brunelli, David Keil, Allan Cartwright, Helena Kobrin, Joe Duncanson and Tim Hancock, Maher Salfiti, Warren McShane, Paul Figlia, Tom Howard, Jack Keenan, and Todd Blakely.

[2]It is unclear whether the items seized from the Wollersheim Home were properly inventoried by the seizing parties (in part because an inventory was not provided at the time of the seizure), and thus, it remains unclear exactly what was seized.

[3]It is unclear whether the items seized from the Penny Home were properly inventoried, and thus, it remains unclear exactly what was seized.

[4]It is unclear whether the items seized from the FACTNET Office were properly inventoried by the seizing parties (in part because an inventory was not provided at the time of the seizure), and thus, it remains unclear exactly what was seized.

[5]Scientology has a policy (called "Snow White") of removing and/or altering its opponents' documents. Moreover, Scientology has a criminal history of being involved in these sort of improprieties. See, e.g., United States v. Heldt, 668 F.2d 1238 (D.C. Cir. 1981).

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