On Sat, 29 Jun 2002 04:42:10 GMT, elrond1@cogeco.ca (Gregg Hagglund) wrote:

Below is Exhibit 10 which the Chronically Convicted Criminal Cult filed under seal.

Now this pile of steaming crap is meant by the Criminal Cult to defame and demean, degrade and disqualify Judge Weissbrodt in Keiths' Bankruptcy case.

These unethical gangsters have complicated and conspired to increase the length and cost of Keiths' bankruptcy and yet these hypocrites claim that it is Keith who delays the proceedings and the Judge is also dragging things on. Problem is, every time the cult scum sucking lawyers try to pull a fast one both Keith and the Judge react negatively. Now if Keith and the Judge would just hold still so that Hogan, Rosen and Abelson could buttfuck them then these terrorists would complain it was all too easy, because they could not milk the cults' legal fees tit which is stapled to their lower lip.

Doesn't that hurt Davey?

Say Davey, do you get an under the table kickback from all these unnecessary legal acts of litigation-terrorism?

Or do you get to wear the Sheep costume for Ableson on Saturdays?

Best,

Gregg

Elaine M. Seid, SBN 72588 MCPHARLIN, SPRINKLES & THOMAS LLP Ten Almaden Blvd., Ste. 1460 San Jose, CA 95113 Telephone: (408) 293-1900

Helena K. Kobrin, SBN 152546 MOXON & KOBRIN 3055 Wilshire Blvd., Ste. 900 Los Angeles, CA 90010 Telephone: (213) 487-4468

Samuel D. Rosen PAUL, HASTINGS, JANOFSKY & WALKER LLP 75 East 55th Street New York, N.Y. 10022-3206 Telephone: (212) 318-6000

Attorneys for Creditor RELIGIOUS TECHNOLOGY CENTER

UNITED STATES BANKRUPTCY COURT

NORTHERN DISTRICT OF CALIFORNIA

In re H. KEITH HENSON,

Debtor.

CASE NO.: 98-51326ASW-13 (Chapter 13)

USDC CASE NO.:

Date: Time: Ctrm:

MOTION OF CREDITOR RELIGIOUS TECHNOLOGY CENTER TO WITHDRAW THE REFERENCE

TABLE OF CONTENTS

MEMORANDUM OF POINTS AND AUTHORITIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1

PRELIMINARY STATEMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1

BACKGROUND 6

A. Underlying Proceedings . . . . . . . . . . . . . . . . 6

B. RTC's Motion to Dismiss and its Objection to Henson's Plan . . . . . . . . . . . . 7 C. The Bankruptcy Judge Is Unable or Unwilling to Conduct a Trial . . . . . . . . . 7 D. RTC's Prior Motion to Disqualify The Bankruptcy Judge . . . . . . . . 8 E. Henson's Conviction in Riverside County and His Flight to Canada

to Avoid Sentencing . . . . . . . . . . . . . . . . . . ... . . . . . . . . . . . 10

F. RTC's Motion to Dismiss Henson's Chapter 13 Based on his

Fugitive Status 10

FACTS 11

ARGUMENT 13

THE REFERENCE SHOULD BE WITHDRAWN . . . . . . . . . . . . . . . . . . . 13

A. The Court's Evident Bias and Its Violations of RTC's

Constitutional Rights . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13

B. RTC Does Not Believe the Bankruptcy Judge Intends to Try this Matter 17

C. It Will Be More Efficient for t6eb ish~ict Court t'o* Withdraw t*h*e' Reference Because the Contempt is One of the Bases for

the Motion to Dismiss . . .... . ... . . . . . . . . . . . . . . . . . . . 18

D. Withdrawing. the Reference Is An Alternative Remedy to

Disqualification for Bias . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20

CONCLUSION ......................................................... 21

[table of authorities omitted]

TO DEBTOR H. KEITH HENSON AND HIS ATTORNEY OF RECORD:

PLEASE TAKE NOTICE that on _______ at _______ in the Courtroom of the

Hon. ________, United States District Court, Creditor, Religious Technology Center will, and it hereby does, move for an Order Withdrawing the Reference from the bankruptcy court to the district court, of Henson's pending chapter 13 bankruptcy petition, and thereafter modifying the bankruptcy court's April 22, 2002 Order to remove the unconstitutional portion.

The grounds for this motion are the bankruptcy court's manifest bias against RTC and the Scientology religion, his aiding of the debtor's fugitive status, while permitting him to remain a chapter 13 debtor, and his continuing unwillingness or inability to conduct an evidentiary hearing on RTC's Motion to Dismiss, pending for nearly two years in a bankruptcy proceeding that has been pending for more than four years. In addition, Henson has committed contempt of the district court's Permanent Injunction, which is being urged as further evidence of Henson's bad faith in support of dismissal. As RTC's contempt motion will be heard by the district court, judicial economy suggests it should also withdraw the reference and address the related issues.

This motion is based upon the annexed Declaration of Warren McShane, all of the proceedings herein, and the motion for issuance of an order to show cause in civil contempt against Henson being filed in the related copyright action, No. C-96-20271-RMW.2 MEMORANDUM OF POINTS AND AUTHORITIES PRELIMINARY STATEMENT

In its most extraordinary April 22, 2002 Order, the bankruptcy judge blatantly violated the First and Fifth Amendments to the United States Constitution by prohibiting one of creditor Religious Technology Center's ("RTC") long-standing counsel of record from access

------------- FN

1) References herein to the exhibits are the exhibits to the Declaration of Warren McShane filed with this motion, unless stated otherwise.

2) A copy of that motion is Exhibit 14 to the Declaration of Warren McShane ("McShane Dec.") and a copy of that motion's supporting declaration is at Ex. 15.

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to discovery responses to be made by debtor, H. Keith Henson ("Henson"), on the sole ground that counsel is an adherent to the Scientology religion, and also aided and abetted Henson to maintain his fugitive status in Canada by denying RICh's request that Henson appear for further deposition in California. RTC here moves to withdraw the reference of the bankruptcy proceeding from the bankruptcy court to the district court on the following grounds:

1) By his April 22, 2002 Order, the bankruptcy judge has now demonstrated, beyond any shadow of doubt, that he is so insensitive and so biased against RTC and the Scientology religion, that he is legally unqualified to further preside over Henson's chapter 13 bankruptcy case;

2) By that same order, the bankruptcy judge has again cast himself as an alder and abettor of Henson, who has fled the United States and remains a fugitive from a sentence of incarceration imposed by a California State Court;3

3) The bankruptcy judge is unable or unwilling to conduct an evidentiary hearing on RICh's Motion to Dismiss Henson's chapter 13 petition or on RICh's Objections to Henson's chapter 13 plan. Indeed, it has been two years since RTC filed that Motion to Dismiss and one and a half years since it filed those Objections and to date, the bankruptcy judge has refused to even hold the final pretrial conference (having postponed it several times sua sponte), let alone to conduct a hearing on a bankruptcy petition that has now been pending for over four years. Indeed, whether it be because of the press of other business, or the bankruptcy judge's commitment to assist Henson to maintain his fugitive status outside the United States, it is now apparent that the bankruptcy judge has no intention of conducting an actual hearing until after the five years of Henson's proposed plan has expired, until after

FN

3) While RTC does not accuse the bankruptcy judge of criminal conduct, it notes 18 U.S.C. § 752 and California Penal Code § 659, which make it a crime to aid and abet a fugitive or to assist someone in committing a misdemeanor. And while the bankruptcy judge may not be guilty of violating the letter of these statutes, he has clearly violated their spirit, as well as Canon 2 of the Code of Judicial Conduct, in his extending accommodation to Henson's fugitive status.

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Henson returns to the U.S. from Canada, voluntarily or involuntarily;

4) By separate motion being filed with the district court in RTC v. Henson, No. C96-20271 RMW, RTC seeks an order to show cause directing Henson to appear for an evidentiary hearing and there show cause why he should not be adjudicated in civil contempt of the Permanent Injunction entered in that underlying copyright infringement action on June 16, 1997. Thus, as that proceeding will necessarily be before the district court, rather than the bankruptcy court, it well serves the goals of judicial economy and efficiency for the district court to hear, as well, the other Henson matters so that they can all be finally resolved.'

Respecting the first ground enumerated above, there can be no debate about what the bankruptcy judge said in his April 22, 2002 Order, nor the consequences of it. In plain English, in words that do not admit of any inoffensive interpretation, the bankruptcy judge held that "the identity of Debtor's employer must be disclosed, but only to Creditor's outside counsel who are not members of the Church of Scientology or members of Creditor." It is, pure and simple, nothing less than a ruling depriving RTC of one of its long-standing counsel,' thus trampling upon the constitutional rights of both RTC and its counsel, Ms. Kobrin.

Respecting the bankruptcy judge's accommodation to Henson's status as a fugitive residing in Canada, the facts, as set forth below, show beyond any shadow of a doubt that the

FN

4) Henson's latest contempt of the Permanent Injunction is an additional ground asserted by RTC in support of its pending motion to dismiss Henson's chapter 13 petition. Thus, that issue, before this Court, is inextricably related to RTC's Motion to Dismiss the bankruptcy petition presently pending before the bankruptcy judge.

5) Helena Kobrin, the object of the bankruptcy judge's order, has been one of the principal counsel for RTC in the bankruptcy proceeding from its inception, as well as the underlying copyright case. Although she is not identified by name in the Order, there is no question that she is the target of it. The bankruptcy judge was well aware that Ms. Kobrin was a member of the Scientology religion before issuing this Order, as this has been stated on the record (Kobrin Dec., T 5), and there can be no question that the bankruptcy judge's intent was to single her out, solely because of her religion, to be excluded from effective participation and representation of RTC in the bankruptcy court.

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bankruptcy judge was trying to permit Henson to continue his fugitive status when it rejected RTC's request for a deposition of Henson in California, and instead, sua sponte, confined RTC's discovery rights to written interrogatories:

Creditor's motion seeks leave to "depose" Debtor for one or two hours about changes in his financial circumstances, including income and expenses since he left the Untied States a year ago. The amount of time that Creditor proposes to spend on examination is reasonable, but Creditor does not state that it is important to ask questions of Debtor in person rather than by means of interrogatories. There is no apparent reason that interrogatories would not be entirely sufficient for the kind of information that Creditor says is being sought. Use of that method would avoid all difficulties caused by travel for either side as well as by Debtor's claimed inability to leave Canada while his petition for refugee status is pending.

(Ex. 1, at 9 (emphasis supplied).)'

RTC has chosen not to file another disqualification motion with the bankruptcy judge to avoid any further delay in those proceedings and because the bankruptcy judge has exhibited no sensitivity or restraint in his actions and unfortunately, it is clear beyond debate that the bankruptcy judge would deny any further motion for disqualification not because it is not well taken, but because he views his actions as totally proper, and when criticized, his reaction is to lash out with outrageous, baseless accusations against his accusers.7 Instead,

FN

6) As also shown herein, the bankruptcy judge's statement in his April 22, 2002 Order, that RTC had not made any showing that written interrogatories were not an acceptable alternative to a deposition in California, is singularly disingenuous. While Henson opposed the discovery motion, nowhere in his papers or at oral argument on RTC's motion, did Henson's counsel suggest the alternative of written interrogatories. Nor did RTC or the court ever address that subject, either in the papers or at oral argument, at which the bankruptcy judge said nothing. (Ex. 30.) Thus, to suggest, as the bankruptcy judge has done in his order, that RTC was given an opportunity to address the sufficiency of the alternative of written interrogatories and failed to show their insufficiency, is nothing more than a continuation of the bankruptcy judge's established practice of revisionist history, of sua sponte rulings on issues never presented to him, and most offensively, of presenting those rulings in a manner so as to disguise their sua sponte nature.

7) As this Court will well recall, when RTC previously moved for disqualification of the bankruptcy judge, his order denying it accused RTC's counsel of misconduct in seeking disqualification for ulterior purposes.

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RTC here seeks to withdraw the reference on several grounds, including the new and ongoing cumulative, relentless bias, partiality, and patent misconduct of the bankruptcy judge. In this regard, RTC notes that in its August 7, 2001 Order denying RTC's previous Motion to Withdraw the Reference, this Court observed that there is no "controlling authority" for the proposition that disqualification matters may be raised in a motion to withdraw the reference. As discussed herein, while there is, in fact, no case within the Ninth Circuit so holding, many other courts from other circuits have found such a procedure to be proper to address bias of a bankruptcy court, and, as discussed below, RTC respectfully submits that in the absence of controlling authority from the Ninth Circuit holding to the contrary, this Court ought to follow the practice, if not the holdings, of these other cases. Indeed, using a procedural vehicle of a motion to withdraw the reference to raise issues respecting the conduct of the bankruptcy judge is, if anything, a more polite, non-contentious recusal request in that it does not require this Court to hold, explicitly, that the bankruptcy judge has engaged in misconduct.

Once the Court has considered this motion and withdrawn the reference, RTC requests that it modify the April 22, 2002 Order to remove the unconstitutional and discriminatory provision.

Finally, so as to avoid redundancy, RTC, in this brief, respectfully refers to and incorporates the separate memorandum, affidavit and exhibits being submitted by RTC in support of its separate motion for contempt in the copyright action. Thus, rather than burden this Court with a reiteration, in full, of the arguments made in those briefs, and the affidavits and exhibits submitted in support of those motions, RTC will merely reference them here, incorporating all of them herein by reference.

Page 5

BACKGROUND

A. Underlying Proceedings

RTC filed a copyright infringement action ("Copyright Action") against Henson in the U.S. District Court for the Northern District of California ("district court") on April 4, 1996. In the Copyright Action, RTC alleged that Henson had infringed upon RTC's copyrights by reproducing an unpublished, copyrighted work in which RTC holds the exclusive rights and distributing that work on the Internet. (Ex. 2, Declaration of Thomas R. Hogan, TT 3, 4, Exs. 1 and 2 thereto.) Judge Ronald M. Whyte granted summary judgment in favor of RTC on April 15, 1997 and, on June 16, 1997, entered a Permanent Injunction against Henson. The sole remaining issues for trial were whether Henson wilfully infringed RTC's copyrights and, if so, the amount of damages to be awarded to RTC. (ld., ~ 5, and Ex. 3 thereto.) The trial was scheduled to commence on December 1, 1997, but was continued by the court, sua sponte, until February 24, 1998. The district court denied several Henson motions to continue the trial date. (ld , ~~ 6-8 and Exs. 4, 6, 7, at 21, and 8 thereto.)

On February 23, 1998, on the eve of the trial in the Copyright Action, Henson filed his chapter 13 petition, which consisted of a single-page cover sheet with RTC listed as his sole creditor. As Henson has admitted, the sole purpose for Henson's bankruptcy filing was to delay the trial in the Copyright Action. Henson had prepared the petition to stay the December 1 trial, but when it was unnecessary, held it in reserve for February 23, even though at neither of those times had he suffered a monetary judgment. (Id., T 9 and Ex. 9 thereto.) Henson also used the pendency of the automatic stay as cover under which he explicitly threatened to commit contempt on national television by giving the media a copy of the unpublished, copyrighted work whose posting had led to the lawsuit and the Permanent Injunction. (Id., T 11 and Ex. 10 thereto.) RTC was forced to seek orders from the bankruptcy court and then the district court to avert that contempt from happening. (Exs. 3, 4.)

A month later, after the automatic stay had been lifted and Henson was scheduled to have his deposition taken, Henson withdrew his filing; however, the bankruptcy court failed

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to do the ministerial act of entering an order and the chapter 13 was later dismissed on motion of the chapter 13 trustee for failure to make plan payments. Because the court had not granted Henson's withdrawal, when Henson moved to reinstate his chapter 13 after the copyright trial, the bankruptcy court ruled that 11 U.S.C. § 109(g)(2) did not apply, so it granted Henson's motion and reinstated his bankruptcy nunc pro tunc. (Ex. 5, at 41-42.)

B. RTC's Motion to Dismiss and its Objection to Henson's Plan

On August 16, 2000, RTC moved to dismiss Henson's chapter 13 for several reasons, including bad faith, not his best efforts, not in the best interests of creditors, and the plan not being feasible. RTC's motion to dismiss was fully supported with evidence, primarily the unimpeachable evidence of Henson's own earlier statements and testimony. (Exs. 2 and 6.) Henson submitted virtually nothing by way of evidentiary opposition. RTC was entitled to have its motion granted as a matter of law for Henson's utter failure to show any triable issue of fact. Yet, on September 13, 2000 the bankruptcy judge denied the motion saying that while RTC's allegations were "serious" (Ex. 7, at 64), he was going to give Henson a trial on them (despite his failure to offer any significant evidence in opposition on the motion, as required by Rule 56, Fed.R.Civ.P.).

RTC filed its Objections to Henson's plan on November 13, 2000. The bankruptcy judge ruled that he would address the Objections in the same trial he was going to hold on the Motion to Dismiss. (Ex. 7, at 64-65, 68.)

C. The Bankruptcy Judge Is Unable or Unwilling to Conduct a Trial

Henson's chapter 13 plan has never been confirmed. On September 13, 2000, the bankruptcy court held a hearing on RTC's Motion to Dismiss and ruled that it would conduct a trial on the motion. It set a discovery cut-off and further scheduled a Status Conference for November 1, 2000, later continued to November 20, for trial setting. (Ex. 7, at 82-83.) At the November 20 Conference, however, rather than set a trial date, the bankruptcy court sua sponte extended the discovery cut-off so that Henson could conduct new discovery that had not been initiated timely. (Ex. 8, at 5-6, 21, 23-26.) A Trial-Setting Conference was then scheduled for March 13, 2001, but again the bankruptcy court would not set a trial date. (Ex.

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9; Ex. 10 at 5-6, 8-9, 23-24, 36-37.) This time, the reason was that Henson's attorney had not provided his specific list of documents and discovery excerpts for trial, as required by the Order scheduling the Trial-Setting Conference. (Ex. 10, at 7-8; Ex. 11, at 38-39.) In spite of this non-compliance, the bankruptcy judge, again sua sponte, gave Henson's attorney more time to comply (Ex. 10, at 7-8), and then launched into his remarks concerning settlement that led to RTC's first motion to withdraw the reference and motion to disqualify the bankruptcy court.

Another Pretrial Conference to schedule trial on RTC's Motion to Dismiss and Objections to Henson's plan was not set until March 7, 2002 (Ex. 28), but again the bankruptcy judge would not proceed because RTC had moved to compel a further deposition of Henson to find out what his financial situation had become in light of his fugitive status, after Henson's attorney objected to producing him.' The bankruptcy judge reset the Pretrial Conference for May 2, 2002 (Ex. 32), but then, once again sua sponte, adjourned it until July 10, 2002, without articulating any reason. (Ex. 33.)

D. RTC's Prior Motion to Disqualify The Bankruptcy Judge

On March 13, 2001, during the Trial-Setting Conference, the bankruptcy judge, sua sponte, made repeated remarks that evidenced pervasive favoritism towards Henson, equally pervasive religious bigotry against RTC and the Scientology religion, and an inability to make fair judgments in this case. Following that Conference, RTC filed a motion to disqualify the bankruptcy judge based on numerous remarks made by the bankruptcy court during that Conference. For example, the bankruptcy judge referred to RTC as "an organization that represents itself as a church," while questioning if RTC's actions were appropriate for a church. (Ex. 10, at 39.) The bankruptcy judge also intruded into settlement FN

8) RTC had asked the bankruptcy judge to shorten time and hear the motion at the Pretrial Conference, but the judge declined to shorten time. (Ex. 31.) At the Pretrial Conference, RTC's attorney explained that the deposition need not delay the trial, as it would probably take a couple of hours at most, but the bankruptcy judge insisted on hearing the matter as a regularly scheduled motion a month later, and putting off the Pretrial Conference. (Ex. 29.)

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by suggesting that RTC settle its claim for $10,000 (id. at 38), based on his expressed sympathy for Henson, whom he characterized as "an older man." (Id. at 39.) Third, the bankruptcy judge collaterally attacked the underlying jury verdict for copyright infringement against Henson that gave rise to RTC's claim in bankruptcy by openly questioning the correctness of, if not overtly, disparaging that verdict despite the judgment entered upon it by the district court and its affirmance by the Ninth Circuit. (Id.)

RTC moved the U.S. District Court for the Northern District of California for leave to appeal or, alternatively, for a writ of mandamus directing the bankruptcy judge to recuse himself. The district court denied RTC's request for mandamus and denied leave to appeal. (Ex. 12.) Upon review of the record, the district court interpreted the bankruptcy judge's offensive remarks as inoffensive and non-disqualifying, generally opining that the bankruptcy court was merely stating his "opinion," and that the remarks occurred in the context of a settlement discussion. (Ex. 12, at 6-11.) The district court even found that the March 13, 2001 hearing was a mere "status conference," not a final Trial-Setting Conference, based on how the court reporter had characterized it on the transcript of that hearing, and despite the bankruptcy judge's prior order setting the March 13 hearing as a Trial-Setting Conference. (Ex. 9, at 1.)

When RTC petitioned the Ninth Circuit for a writ of mandamus to review the district court's refusal to order the bankruptcy court to disqualify himself, the Ninth Circuit declined to issue the writ. (Ex. 13.)

It would have seemed that, having had his disqualification for misconduct sought and his untoward offensive and defensive remarks memorialized at length in a district court opinion, the bankruptcy judge would have developed a greater sensitivity, a greater concern respecting the propriety of his conduct and his responsibilities as a judicial officer, but as discussed infra, that was not to be. To the contrary, apparently buoyed by the district court's August 10, 2001 decision, the bankruptcy judge was impelled to exhibit even less tolerance and judicial propriety by, inter alia, committing the most egregious misconduct of trampling on First Amendment rights.

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E. Henson's Conviction in Riverside County and His Flight to Canada to Avoid Sentencing

As addressed in RTC's new contempt motion, in May 2000, following a course of extensive harassment by Henson of a Scientology religious facility in Riverside County, California, and taunting, stalking, harassment, and threatening of the Scientology religious workers who live and work there, the Riverside County District Attorney's office charged Henson with violating California Penal Code § 422.6, for intimidating, threatening, and oppressing Scientologists on account of their religious beliefs. (Ex. 14, Contempt Motion, at 3; Ex. 15, McShane Dec., filed in support of contempt motion,' 2.) On April 26, 2001, a jury convicted Henson of this crime. (Ex. 14, at 3; Ex. 15, T 2 and Ex. 2 thereto.) After his conviction, Henson was released on his own recognizance until his scheduled appearance for sentencing on May 16, 2001 (Ex. 14, at 3; Ex. 15, T 2 and Ex. 2 thereto), but fled to Canada, instead of appearing, from where he announced on May 13, 2001, on the Internet:

I will not be in Riverside May 16. In fact I would have to be a complete idiot to be in Riverside May 16! Bon Soire! Eh? Keith Henson (Ex. 14, at 3; Ex. 15, ~ 3, and Ex. 3 thereto.) On May 16, 2001, the court filed an additional criminal charge for Henson's failure to appear (Penal Code § 1320), and issued a bench warrant without bail for his arrest. (Ex. 14, at 3; Ex. 15, T 4, and Ex. 6 thereto.) The court later pronounced its sentence on Henson, in absentia. (Ex. 14, at 3; Ex. 15, T 4 and Ex. 4 thereto.) Based upon Henson's fugitive status, the Riverside Superior Court dismissed his appeal of the section 422.6 conviction on February 27, 2002. (Ex. 14, at 3; Ex. 15, T 4 and Ex. 5 thereto.)

F. RTC's Motion to Dismiss Henson's Chapter 13 Based on his Fugitive Status

On August 23, 2001, RTC filed a motion in the bankruptcy court to dismiss Henson's

chapter 13 petition on the basis of the long-standing equitable Fugitive Disentitlement Doctrine, which "limits access to courts in the United States by a fugitive who has fled a criminal conviction in a court in the United States." Prevot >>. Prevot, 59 F.3 )d 556, 562 (6th

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Cir. 1995), cent. denied, 516 U.S. 1161, 116 S.Ct. 1048 (1996). However, contrary to established law, the bankruptcy judge denied the motion, thus allowing Henson to continue to receive the protection and benefit of the U.S. Bankruptcy statutes. See, Prevot, 59 F.3d at 562; Conforte >>. Commissioner, 692 F.2d 587, 589 (9th Cir. 1982) (disentitlement doctrine may be even more applicable to civil cases because a defendant's liberty is not at stake, therefore less harm can come from the refusal to entertain his case); Maghrta v. Samples, 162 F.3d 662, 664 (11th Cir. 1998) (dismissal of a civil action on fugitive disentitlement grounds requires that the party's fugitive status have a connection to his civil action). FACTS

As discussed above, this more than four-year-old case has still not been set for trial on RTC's Motion to Dismiss, and at every opportunity, the bankruptcy court creates further delay by giving Henson extensions of time and continuing Pretrial Conferences repeatedly, when no continuation is necessary.

Henson continues to take advantage of the bankruptcy court's willingness to accommodate and protect him, even to the extent of protecting his fugitive status. The Pretrial Conference Statement that Henson filed for the aborted March 7 Pretrial Conference asked the bankruptcy court to permit Henson to appear at trial "by video transmission from his residence in Canada," to avoid his in-person appearance being "interfered with by his arrest." (Ex. 16, at 2.) Henson also opposed RTC's motion for his deposition, stating that, if it was to be taken, it should be taken at his home in Canada because he cannot leave Canada while his refugee petition is pending and because he cannot afford to travel to California. (Ex. 17, at 2.) The opposition made no suggestion that Henson should be deposed by written interrogatories.

RTC asked the bankruptcy court to reject Henson's request to appear at trial by video transmission and argued that it has an absolute right of in-person confrontation. See, Deitchmann v. F.R. Squibb & Sons, Inc., 740 F.2d 556, 561-562 (7th Cir. 1984) ("Crossexamination is a fundamental right that a court should abridge only to curb abuse."); see also, The Ottcm,a, 70 U.S. 268, 271 (1865). No ruling has been made on this issue, but Henson's

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counsel is now pressing the matter and has conceded it is likely that Henson will not appear for trial. (Ex. 18.) However, even though RTC offered to pay for Henson to come to California for his deposition if finances were the real problem (Ex. 19, at 5), and even though the bankruptcy judge did not even mention that he was considering ordering the discovery to proceed by way of interrogatories, he issued an Order finding that RTC was entitled to the information on Henson's changed financial circumstances, but denied RTC's ability to cross examine Henson's responses by, sua sponte, limiting the discovery to written interrogatories. (Ex. 1, at 9.) The Order disingenuously said that RTC did not show that interrogatories would not suffice, even though the word "interrogatories" had not been mentioned by anyone prior to the Order, and RTC certainly was not asked if they would be acceptable.'

It therefore appears a virtual certainty that should a trial ever occur - and RTC argues below that it does not believe that it will - Henson will be allowed to participate from his remote hideout because the bankruptcy judge: (1) always accommodated him before he was a fugitive; and (2) has continued to accommodate him in his fugitive status.

However, even more serious than his depriving RTC of its cross-examination right is that the bankruptcy judge's religious bias, that was rejected by the bankruptcy court, the district court and Ninth Circuit as a basis for disqualification, has now festered to such a degree that it was explicitly expressed in this latest Discovery Order. In ordering that RTC could propound interrogatories about Henson's financial situation, the bankruptcy court stated:

FN

9) The bankruptcy judge's evident bias against RTC continued in other ways in his April 22 Discovery Order. For example, the bankruptcy judge states that RTC deposed "`many' of prospective employers and those for whom Debtor had performed consulting services." (Ex. 1, at 3.) This, again, is simply not accurate. RTC has never deposed one of Henson's prospective employers, and in fact, RTC's attorney told Henson that it would not do so, as RTC wanted Henson to obtain employment. (Ex. 20, at 425-426.) RTC did depose three of Henson's actual consulting clients for 21, 31, and 45 minutes, respectively, to verify what they had paid him and also to test his claims that he lost employment because of RTC. The claim proved false in each instance. (Ex. 21, at 16-17; Ex. 22, 7-8; Ex. 23, at 9.)

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As has been done throughout this case, the Court will order that the identity of Debtor's employer must be disclosed, but only to Creditor's outside counsel who are not members of the Church of Scientology or members of Creditor . . .

(Ex. 1, at 9.) Contrary to the assertion that this limitation has been in place "throughout this case," the bankruptcy court has never previously stated that an attorney could not participate in discovery because of her religion! While RTC desired the discovery and had asked for it by deposition following the April 22 Order, RTC was obliged to inform the Court that it would not conduct the discovery by Interrogatories, inter alia, because it would not consent to the exclusion of its long time counsel, Ms. Kobrin, and would not be a party to the blatant violations committed by the bankruptcy judge. (Ex. 24.)

ARGUMENT

THE REFERENCE SHOULD BE WITHDRAWN

A. The Court's Evident Bias and Its Violations of RTC's Constitutional Rights

The bankruptcy court's conduct violates Canon 2 of the Code of Judicial Conduct and creates an appearance of impropriety. Canon 2 requires that "[a] judge shall respect and comply with the law and shall act at all times in a manner that promotes public confidence in the integrity and impartiality of the judiciary." As the commentary to Canon 2 states, "[t]he test for appearance of impropriety is whether the conduct would create in reasonable minds a perception that the judge's ability to carry out judicial responsibilities with integrity, impartiality and competence is impaired."

The outrageousness and impropriety of the bankruptcy judge placing a proscription on access to discovery by an attorney chosen by RTC to represent its interests because an attorney is a member of the Scientology religion can best be realized by analogy. Surely, as Cardinal Roger Mahoney is in court defending his Archdiocese in connection with pedophilia cases brought against Catholic priests, he is not being told by the courts that he cannot have a Catholic attorney, whether that attorney is viewed as "in-house" or "outside" counsel, represent him or that a Catholic attorney he has chosen to represent him cannot have access to

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discovery. Yet there may be many reasons why a Catholic church - or a Scientology church - wants a member of its own religion on its legal team, such as greater understanding of or familiarity with certain issues that may arise. To exclude such a person on the basis of that person's religion is unconstitutional religious bias.

Reasonable people would certainly share the perception of RTC and its counsel that the judge is not carrying out his "judicial responsibilities with ... impartiality . ..." By disabling RTC, a church of the Scientology religion, from having the full assistance of an attorney it has chosen to engage who is a member of that religion, the bankruptcy court is violating RTC's First Amendment rights.

The free exercise of religion means, first and foremost, the right to believe and profess whatever religions doctrine one desires. Thus, the First Amendment obviously excludes all "governmental regulation of religious beliefs as such." Employment Div., Dept. of Human Resources of Oregon v. Smith, 494 U.S. 872, 877, 110 S.Ct. 1595, 1599 (1990)(emphasis in original), citing Sherbert i,. Verner, 374 U.S. 398, 402, 83 S.Ct. 1790, 1793 (1963). The Supreme Court has observed that: "[t]he principle that government may not enact laws that suppress religious belief or practice is so well understood that few violations are recorded in our opinions." Church of the Lukumi Babalu Aye, Inc. i,. City ofHialeah, 508 U.S. 520, 523, 113 S.Ct. 2217, 2222 (1993).

When government action is taken in violation of this precept, it is done "by officials who did not understand, failed to perceive, or chose to ignore the fact that their official actions violated the Nation's essential commitment to religious freedom." Hialeah, at 524, 113 S.Ct. at 2222. "At a minimum, the protections of the Free Exercise Clause pertain if the law at issue discriminates against some or all religious beliefs or regulates or prohibits conduct because it is undertaken for religious reasons." Id. at 532, 113 S.Ct. at 2226. Furthermore, "a law targeting religious beliefs as such is never permissible." Id., citing McDaniel v. Paty, 435 U.S. 618, 626, 98 S.Ct. 1322, 1327-1328 (1978); Brown v. Borough of Mahaffey, Pa., 35 F.3d 846, 850 (3d Cir. 1994)( "government actions intentionally discriminating against religious exercise a fortiori serve no legitimate purpose," and such

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actions need not even be scrutinized through a balancing test).

In Broivn v. Mahaffey, referring to "[t]he rare cases which address acts or laws which target religious activity," the court stated that "the pivotal issue in a case alleging deliberate interference with religious activity is not the extent of the burden on religious exercise, but instead whether the defendants intended to impose a burden." Id. at 847. There can be no doubt here that the bankruptcy court was intentionally burdening RTC's religious rights for no legitimate purpose. The bankruptcy court has never made any finding of improper conduct by Ms. Kobrin, nor did the district court in the copyright case. She is a member in good standing of two state Bars and numerous federal courts. (See, Kobrin Dec., T l.) And she has always acted in conformity with her obligations as a Bar member and officer of the Court. Yet, in essence, without any stated reason, the April 22 Order gave RTC the choice of hiring only attorneys who are not members of the religion it represents, or hiring an attorney who is a member of its religion who may not fully perform her duties as counsel because she may not have access to discovery on the basis of her religious beliefs.

Beyond violating RTC's First Amendment rights, the bankruptcy judge is also violating the spirit, if not the letter, of the criminal law (see fn. 4) by aiding and abetting Henson to continue to be a fugitive, while at the same time seeking the benefits of the bankruptcy statute. Surely, a judicial officer should not be seen as assisting a criminal, but that is exactly what the bankruptcy court is doing by bending over backwards to accommodate Henson's desire to remain in Canada while seeking political asylum to avoid his criminal sentence in Riverside County. Again, the lack of impartiality is manifest in these actions.

In Liteky v. United States, 510 U.S. 540, 550, 114 S.Ct. 1147, 1155 (1994), the

Supreme Court addressed the quality of bias that supports recusal of a court, and ruled that

such bias need not always be from an extrajudicial source. Rather, the court stated:

The words [bias or. prejudice] connote a favorable or unfavorable disposition or opinion that is somehow is wrongful or inappropriate, either because it is undeserved, or because it rests upon knowledge that the subject ought not to possess (for example, a criminal juror who has been biased or prejudiced by

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receipt of inadmissible evidence concerning the defendant's prior criminal activities), or because it is excessive in degree (for example, a criminal juror who is so inflamed by properly admitted evidence o a defendant's prior criminal activities that he will vote guilty regardless of the facts) ....

It is wrong in theory, though it may not be too far off the mark as a practical matter, to suggest, as many opinions have, that "extrajudicial source" is the only basis for establishing disqualifying bias or prejudice. It is the only common basis, but not the exclusive one, since it is not the exclusive reason a predisposition can be wrongful or inappropriate. A favorable or unfavorable predisposition can also deserve to be characterized as "bias" or "prejudice" because, even though it springs from the facts adduced or the events occurring at trial, it is so extreme as to display clear inability to render fair judgment.

Id. at 550-551, 114 S.Ct. at 1155.

In Alexander vs. Primerica Holdings, Inc., 10 F.3rd 155 (3rd Cir. 1993), a number of factors led to a disqualification motion, including the judge's attitude after a summary judgment for the defendant had been reversed by the Third Circuit, his remarks on the record attacking the plaintiffs' attorney, and, significantly, rulings that he made prior to trial in which he emphasized the significance of particular pieces of evidence, as well as the veracity of certain witnesses, without having had the benefit of a full presentation of evidence. Id. at 159-161. The special significance of the court's prejudgment of the issues related to the fact that he was to be the trier of fact. Id. at 161.

Following the judge's opinion denying recusal, in which he explained and justified all of the conduct to which objection had been made, the Third Circuit granted mandamus to review his decision, and issued an order disqualifying the trial court. Ruling that it did not have to decide the merits of any of the allegations made by the plaintiffs or the trial judge's view that they had acted in bad faith, "as that issue is simply irrelevant to the [28 U.S.C.] § 455(a) issue," the appeals court stated that "the appropriate - and the only - inquiry to which we must respond is `whether a reasonable person, knowing all the acknowledged circumstances, might question the district court judge's continued impartiality."' Id. at 164. In addition to the trial court's prejudgment of evidentiary and credibility issues, the appeals court pointed to its constant accusations of bad faith which, while ostensibly targeting

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plaintiffs' attorneys, also "tarred the [plaintiffs] as `bad faith' participants and has thus drawn them into the recusal controversy to the same extent as their counsel - and this despite an absence of record evidence." Id. at 164. It also found the trial judge's response to the disqualification motion, in which he personally refuted the allegations, as rendering it "difficult to resist the suggestion that [the trial judge] . . . has exhibited a personal interest in the outcome of this litigation." Id. at 164-165. Furthermore, "a judge's participation in a case must never reach the point where it appears, or is even perceived to appear, that the judge is aligned with any party in the pending litigation" Id. at 166. "When the judge is the actual trier of fact, the need to preserve the appearance of impartiality is especially pronounced." Id.

Here, the judge is also the trier of fact. RTC cannot possibly proceed to trial before him when he has disqualified one of its attorneys from participation in discovery on the basis that she is a member of the Scientology religion. This is more than "tarring" the party with a prejudice towards counsel; it is exhibiting prejudice towards counsel on the very basis of a religious affiliation with the religion that RTC itself represents. The court's prior justifications of its earlier prejudicial actions and his accommodations of Henson's fugitive status only serve to contribute to the conclusion that the bankruptcy court appears partial towards Henson and biased against RTC and its attorney.

B. RTC Does Not Believe the Bankruptcy Judge Intends to Try this Matter

There is also a clear apparency that the bankruptcy court is intent on never bringing this case to trial, whether he is too busy to deal with it or has some other reason, such as not wanting to have to address Henson's bad faith. Or perhaps he is delaying to give Henson time to resolve his fugitive status.'° RTC has reluctantly come to these speculations based on

'° It is obvious that wrong headed sympathy for Henson's fugitive status is motivating the actions of the bankruptcy judge. While he refused to dismiss Henson's chapter 13 on the basis of his being a fugitive, he then protected Henson's fugitive status by issuing an order that while the discovery was relevant, RTC could not depose Henson, to facilitate "Debtor's claimed inability to leave Canada while his petition for refugee status is pending." (Ex. 1, at 9.)

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considerable evidence that this is the case. For example,

o The bankruptcy judge, sua sponte, and without any request by Henson, extended the discovery cut-off after it had expired so as to allow Henson's attorney to pursue discovery that the judge himself had suggested, i. e., the amount of money RTC had spent in legal fees pursuing its claim as a creditor; the bankruptcy judge had ordered that all discovery was to be concluded (i.e., with answers completed) by November 13, 2000, and Henson's attorney had nonetheless propounded new discovery two days after the discovery cut-off (Exs. 26 and 27), as to matters - i. e., RTC's motives - that were clearly irrelevant to whether Henson's plan should be confirmed or whether his chapter 13 should be dismissed or converted to chapter 7, even though there was no change in circumstances warranting such an order. (Ex. 7, at 68-70, 82-83; Ex. 8, at 5-6, 20-21.) o

The bankruptcy judge has found an excuse to delay setting trial every time the issue has been raised, even when he himself has scheduled what he dubbed a "Trial-Setting Conference" or a "Pretrial Conference," and even when there was no need at all for a continuance." (Ex. 7, at 82-83; Ex. 8, at 5-6, 21, 23-26; Ex. 10, at 7-8.)

FN 11) For example, on March 7, 2002, the bankruptcy judge insisted that the pretrial conference be continued to May because RTC was seeking a two hour deposition of Henson, even though RTC informed the bankruptcy court that no delay was needed. (Ex. 30.) On November 20, 2000, the bankruptcy judge continued a status conference to facilitate Henson's untimely discovery, and in part because he stated that RTC wanted more discovery. RTC again argued that it wanted a brief completion of an outstanding deposition, and that it was not necessary to delay setting trial. (Ex. 8 at 5-8, 20-21.) On other instances, the bankruptcy judge has given Henson's attorney extensions of time to provide the information required in the Pretrial Conference Statement by the bankruptcy judge's own Order, when RTC had fully complied with the Order, and Henson's attorney had no valid excuse for not complying. (Ex. 11, at 5-6, 8-9, 23-24, 36-37.)

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C. It Will Be More Efficient for the District Court to Withdraw the Reference Because the Contempt is One of the Bases for the Motion to Dismiss

Withdrawal of the reference may be mandatory or permissive:

Section 157(d) contains both a mandatory and a permissive provision for withdrawal. Mandatory withdrawal is required in those cases that call for material consideration of both title 11 and non- title 11 federal law. Addison v. US. Dept. of Education, 240 B.R. 47, 49 (C.D. Cal. 1999)(citation omitted)."

The contempt proceeding that RTC requests has nothing to do with title 11 law, and is not a matter that the bankruptcy court has any jurisdiction to hear. The contempt is a contempt of an order of the district court, and it is that court that can hear the motion. See, Shillita"i v. United States, 384 U.S. 364, 370, 86 S.Ct. 1531, 1535 (1966); F. J. Ha"shcnv Enterprises, Inc. v. Emerald River Developme"t, I"c., 244 F.3d 1128, 1137, n. 5 (9`" Cir. 2002).

However, the contempt is also a critical ground for RTC's Motion to Dismiss the bankruptcy, based on the Supplemental Memorandum that has been filed with the bankruptcy court, urging Henson's posting as further evidence of bad faith under 11 U.S.C. § 1325(a)(3). (Ex. 25.) Therefore, because adjudication of the contempt bears on the core bankruptcy proceedings relating to the Objections and Motion to Dismiss, as well as on the contempt of the district court's order itself, the withdrawal is arguably mandatory in this instance. Moreover, even if the court does not view withdrawal as mandatory, it will be a more efficient use of judicial resources if the district court withdraws the reference. Security Farm

FN 12) 28 U.S.C. § 157(d) provides that:

The district court may withdraw, in whole or in part, any case or proceeding referred under this section, on its own motion or on timely motion of any party, for cause shown. The district court shall, on timely motion of a party, so withdraw a proceeding if the court determines that resolution of the proceeding requires consideration of both title 11 and other laws of the United States regulating organizations or activities affecting interstate commerce.

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vs. International Brotherhood of Teamsters, Chauffers, Warehousemen & Helpers, 124 F.3d 999, 1008 (9th Cir. 1997)("In determining whether cause exists, a district court should consider the efficient use of judicial resources, delay and costs to the parties, uniformity of bankruptcy administration, the prevention of forum shopping, and other related factors.").

D. Withdrawing the Reference Is An Alternative Remedy to Disqualification for Bias

In In re Memorial Estates, Inc., 90 B.R. 886, 892 n. 3 (N.D.III. 1988), the court stated:

It is possible for a party to use a motion to withdraw the reference as a procedural alternative to a motion to recuse the bankruptcy judge for bias. There are advantages. As discussed, the motion to withdraw the reference is made to the district court; the motion to recuse the bankruptcy judge for bias is made to the bankruptcy Judge requiring "the Judge to Judge the judge." 1 D. Cowans ~Cowans bankruptcy "thy and Practice], note 2, § 1.7, at 49 ("The practical difficulty is that to obtain recusal, one must ask the fudge to judge the judge.").

Just such a procedure was used in Crown Leasing Corp. v. Johnson-Allan, 70 B.R. 350, 351 (E.D.Pa. 1987). The bankruptcy judge had denied a motion to disqualify him, and on appeal to the district court, it had withdrawn the reference, stating that the bankruptcy judge had made "numerous statements which could reasonably be interpreted as expressing strong personal view on the subject at hand." Id.'' Withdrawal of the reference would be appropriate here for the same reason. /// /// /// /// ///

FN 13 While they did not find cause for permissive withdrawal based on a judge's bias, numerous other courts have considered a motion to withdraw to be an appropriate procedure for considering a claim for bias. See In re Camden Ordnance Mfg. Co. of Arkansas Inc., 245 B.R. 794, 805, 806 (E.D. Pa. 2000); In re Hargis, 146 B.R. 173, 175-176 (N.D. Tex. 1992); In re Huntington Park Assoc., 1993 WL 86802, *1; In re vane, 136 B.R. 863, 874 (D.Colo. 1992); In re Marina City Associates, 1989 WL 206465 *7 (N.D. Ill.).

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CONCLUSION For the reasons stated, the reference to the bankruptcy court should be withdrawn. RTC intends to set this motion for hearing on the district court's calendar once it has been

transferred to the district court.

Dated: June 24, 2002

Respectfully submitted, PAUL, HASTINGS, JANOFSKY & WALKER LLP

Samuel D. Rosen Attorneys for Creditor RELIGIOUS TECHNOLOGY CENTER

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Scientology Management does not always tell truth; Scientology Management has condoned, conducted and been convicted of illegal,unethical and immoral activities; Some Scientology Practices are dangerous to participants health, either physical or mental or both; Scientology Management and L.R. Hubbard lied about Hub bards' life, history and accomplishments; Despite the pseudo-scientific claims of Hubbard no Scientology or Dianetic process has *ever* been clinically *proven* to work as claimed.

I have been circulating the above, in one form or another for five years.

Were the above not true, then they would be defamations of Corporate Scientology and we both know Co$ has the money and the lawyers to force me to retract or cease to utter or print them.

But the above *are* true. And the first four are enforced by *current* Co$ policies.

William G. Hagglund [SP7] aka Solarius El Rond Temple of At'L'An (TM)*** Oakville Ontario

*** See: <http://strategis.ic.gc.ca/SSG/1051/trdp105117800e.html>

Malicious misrepresentation of this TradeMark is currently being implemented by OSA Agent Peter Ramsay. Ramsay continues to act as a TradeMark Terrorist on behalf of his OSA superiors Yvette Schenk & Al Buttnor and the Criminally Convicted Corporation of Scientology which they all slavishly serve.

Peter Ramsay has been ordered by my attorneys to Cease and Desist these wilful and malicious Infringements.

Legal Action is pending.