Aquarian Foundation v. Lowndes

District Court, W.D. Washington·Decided June 14, 2022·No. 2:19-cv-01879·Unknown

Opinion

6 UNITED STATES DISTRICT COURT 7 WESTERN DISTRICT OF WASHINGTON 8 AT SEATTLE

9 AQUARIAN FOUNDATION, a nonprofit Case No. C19-1879RSM 10 Corporation Pursuant to the laws of the State 11 of Washington, FINDINGS OF FACT AND CONCLUSIONS OF LAW 12 Plaintiff, 13 v. 14 BRUCE KIMBERLY LOWNDES a/k/a 15 Sankacharya Sunkara, 16 Defendant. 17 I. INTRODUCTION 18 19 A remote bench trial was held in this matter on May 23, 25, and 26, 2022, with live 20 testimony and exhibits submitted by both parties. Dkts. ##237–239. The Court previously 21 ruled on summary judgment that Keith Rhinehart’s copyrights were transferred to Plaintiff 22 Aquarian Foundation (“AF” or “the Church”) through his will. Dkt. #214. AF presented 23 sufficient evidence of infringement occurring in the United States. Id. The Court dismissed 24 25 several affirmative defenses related to this infringement. Id. 26 The remaining issues of law at trial were: 1) whether Defendant Lowndes infringed 27 certain of Plaintiff’s registered copyrights in the United States, 2) whether Lowndes had a valid 28 license related to those copyrights, 3) whether AF could terminate the license, 4) whether 1 2 Lowndes breached the license agreement, 5) whether any of the copyrighted works were 3 “works for hire,” 6) what damages should be imposed for copyright infringement, 7) what relief 4 Plaintiff may seek for unregistered “proprietary works,” 8) whether Mr. Lowndes infringed 5 Plaintiff’s trademark for “Church of Higher Spiritualism,” 9) whether Plaintiff’s trademark 6 claim is barred by laches, 10) whether Mr. Lowndes engaged in unfair competition and false 7 8 designation, and 11) whether attorney fees are warranted to either side in this case. See Dkt. 9 #232 at 3–4.1 10 II. CREDIBILITY OF THE WITNESSES 11 “In an action tried on the facts without a jury... the court must find the facts specially 12 13 and state its conclusions of law separately.” Fed. R. Civ. P. 52(a). The trial court is 14 empowered to judge the credibility of the witnesses. See Spokane Arcade, Inc. v. City of 15 Spokane, 75 F.3d 663, 665 (9th Cir. 1996); Zivkovic v. S. Cal. Edison Co., 105 Fed. Appx. 892, 16 893 at n.1 (9th Cir. 2004) (citing Anderson v. City of Bessemer City, N.C., 470 U.S. 564, 575, 17 84 L. Ed. 2d 518, 105 S. Ct. 1504 (1985)). 18 19 This was a highly unusual case in that it lacked significant credible testimony of any 20 kind. The key witnesses in this case were AF president Jannifer Werner, Defendant Lowndes, 21 AF treasurer Cathryn Reid, and handwriting expert Hannah McFarland. Their answers during 22 direct and cross examination were often incomplete, inconsistent with other testimony or 23 exhibits, or otherwise indicated evasiveness, exaggeration, or dishonesty. The Court was thus 24 25 largely unable to rely on the testimony of witnesses when it would be necessary to prove a 26 1 The parties also raised in their Proposed Pretrial Order several issues of law subsumed by the Court’s rulings on 27 the issues above, and the following issues of law: 1) have any of Plaintiff’s copyrights expired due to failure to make a timely renewal; 3) which (if any) of the Works were created after the date of the license, June 9, 1985. See 28 Dkt. #232 at 4–5. The Court finds that these two issues are essentially irrelevant given the Court’s rulings, but that in any event insufficient evidence was presented to decide them. claim or defense, as stated below. The Court has attempted to piece together the truth from 1 2 undeniable facts admitted by both parties and from the exhibits. Many disputed facts remain 3 unproven. 4 III. FINDINGS OF FACT 5 The Court incorporates the facts as stated in its prior Summary Judgment Order. Dkt. 6 #214. The following additional findings of fact are based upon a preponderance of the 7 8 evidence presented at trial and the above credibility analysis. 9 1. Plaintiff, the Aquarian Foundation (“AF” or “the Church”) is a non-profit 10 corporation in the State of Washington centered around the spiritual teachings of 11 Keith Milton Rhinehart. Mr. Rhinehart served as the Church’s president and 12 13 ecclesiastical head for many years until his death in 1999. 14 2. The current president and ecclesiastical head of the Church is Jannifer Werner. The 15 Church’s treasurer is Cathryn Reid. The Church also has a board of directors, other 16 officers, and various spiritual leaders. 17 3. The size of the Church’s membership is unclear. Witnesses Werner and Reid, who 18 19 would have every reason to know membership information, were evasive under 20 direct questioning by the Court. The majority of Church members reside in the 21 United States. 22 4. The Church collects funds through a required membership fee, tithing and 23 donations, as well as fees for access to the teachings of Rhinehart in various 24 25 media—literature, audio recordings, and video recordings. 26 5. The Church’s annual income was not presented in evidence. The amount collected 27 for the teachings of Rhinehart is unknown to the Court. Witnesses Werner and 28 Reid, who would have every reason to know this information, were evasive under 1 2 direct questioning by the Court. 3 6. The copyrighted audio and video recordings of Rhinehart listed in Plaintiff’s Exhibit 4 4 were at issue in this case. These recordings were primarily made in the 1970s and 5 1980s. Their author is Mr. Rhinehart. It is unclear from the record whether the 6 recordings were always made with the assistance of AF employees or at the behest 7 8 of the Church, or whether some were at times created by Rhinehart himself or others 9 around him not directly employed by the Church. 10 7. These recordings were copyrighted by Mr. Rhinehart or his private attorney, with 11 the copyright made under Mr. Rhinehart’s name rather than the Church. The filing 12 13 forms indicate that these were not “works for hire.” No other credible evidence 14 indicates these were “works for hire.” 15 8. Defendant Lowndes is a man approximately 80 years of age, currently residing in 16 Tasmania, Australia. Starting in the 1970’s, Lowndes devoted much of his time to 17 leading AF spiritual groups in the United States. In this role, Lowndes was given 18 19 permission by Rhinehart and/or the Church to use certain of the Church’s 20 copyrighted works. Lowndes was never involved in AF’s corporate structure. He 21 was never an AF employee. 22 9. Starting in 1985, Mr. Lowndes began transferring and converting tape recordings of 23 Rhinehart’s teachings into electronic digital format for easier dissemination on 24 25 electronic platforms. Mr. Lowndes acquired these recordings either by taking them 26 from open tables at Church events or by writing to AF and having them mailed. It is 27 unclear if Mr. Lowndes was permitted at any time to have possession of all of the 28 materials. No credible testimony could clarify how Lowndes originally acquired 1 2 copies of the recordings prior to uploading them to the internet. 3 10. Mr. Lowndes offered as an exhibit a signed written agreement with Mr. Rhinehart 4 granting him a license to use his copyrighted materials. Credible testimony and 5 photographs demonstrate that this agreement was created at a time when Mr. 6 Lowndes and Mr. Rhinehart were close acquaintances and Mr. Rhinehart stayed at 7 8 Mr. Lowndes’s residence. The document appears to be signed by Mr. Lowndes, Mr. 9 Rhinehart, and two witness. Mr. Lowndes does not recall if the date on the 10 agreement, June 9, 1985, is correct, but testified credibly that the document was 11 created around that time. 12 13 11.

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