United States District Court, W.D. Michigan, Southern Division
L. Maloney United States District Judge
brings an action in diversity under 28 U.S.C. § 1332,
alleging breach of contract, negligence, fraud, and premises
liability. (ECF No. 1.) Defendant Narconon Freedom Center
(“NFC”) brings a motion to dismiss under Federal
Rule of Civil Procedure 12(b)(6). (ECF No. 16.) Defendant
Narconon Eastern United States (“Eastern”) joins
NFC's motion to dismiss, and also raises an argument for
lack of personal jurisdiction under Federal Rule of Civil
Procedure 12(b)(1).(ECF No. 18.) Upon careful review of the
record, the Court has decided that the motion can be resolved
without oral argument. See W.D. Mich. LCivR 7.3(d).
For the reasons that follow, Defendants' motions are
Dana Oberhansly, an Arizona resident, sought treatment for
her drug addiction from NFC in Albion, Michigan. In April
2013, Plaintiff contacted NFC through their website. She
spoke with an intake counselor who described NFC's
facility and drug-addiction program. During the conversation,
the intake counselor explained that NFC's facilities were
very nice, and that she would be able to receive massages,
exercise, and use a hot tub to help with her withdrawals. The
intake counselor also informed her that her first week in the
withdrawal unit would be comfortable and monitored by health
care professionals. The intake counselor explained that the
sauna portion would help her body detox by sweating out
toxins to rid her body of residual drugs in her fat cells.
The intake counselor also told her that the program would
address her addiction and the problems associated with it,
and that she would be monitored by health care professionals
and work with trained counselors during the course of the
intake counselor offered to pay for half of Plaintiff's
flight to Michigan because she could not afford the travel
cost and entrance fees up front. He also told Plaintiff that
she should come immediately to the facility to begin
treatment as soon as possible because her addiction was a
matter of life or death. Three days later, Plaintiff traveled
to Michigan to enroll in NFC's drug-treatment program.
The week before she left for Michigan, Plaintiff abused drugs
heavily and continued to do so until she landed in Michigan.
In fact, she was still high when she first arrived at NFC.
During the flight to Michigan, Plaintiff admits to using
cocaine, ecstasy, and ketamine.
arrival at NFC, Plaintiff signed and initialed each page of
NFC's admission agreement, which describes the nature of
the treatment program and its cost:
NARCONON FREEDOM CENTER, INC. (FREEDOM CENTER) drug and
alcohol rehabilitation program has an excellent success rate
for students who actively and honestly participate in and
complete the entire program. Our program is designed to
achieve this positive result with specific program steps and
procedures, in a gradient found to be most workable and
successful based on 40 years of experience in treating
Freedom Center delivers a comprehensive drug and alcohol
treatment program using the Narconon program methodology.
This methodology was written and developed by founder William
Benitez. This is based on the client's (called students)
completion of established, results-oriented treatment goals,
as opposed to a set number of days or weeks in treatment. The
amount of time it takes each individual to complete the
program varies, but should average between three and six
(Def.'s Mot. to Dismiss Ex. A, ECF No. 16-2, PageID.254.)
The signed agreement also contains an arbitration provision:
The parties agree that any controversy, dispute or claim
arising out of or relating to or involving this Admission
Agreement shall be resolved by binding arbitration. Those
claims subject to arbitration include but are not limited to
any and all disputes or controversy regarding services
provided, conditions at the Freedom Center facility, the
staff, the results of the program, other student's
actions, claims of discrimination, consumer complaints or any
other cause of action.
(Id. at PageID.266.)
website indicated a high success rate, ranging from 70-82%
for those who completed Narconon's program. But the
website and the information provided by the intake counselor
did not indicate that NFC had any affiliation with
Scientology, and never explained that the treatment program
was based on Scientology. The website simply indicated that
the program was developed by L. Ron Hubbard. The signed
admission agreement also does not reference Scientology.
Plaintiff arrived at the facility, she was strip-searched by
the staff and drug tested. She alleges that she entered the
withdrawal portion of the program for seven days, and
suffered withdrawals without the comfort measures that she
was promised and without the supervision of trained health
care professionals. She also alleges that the counselors were
not trained professionals. Rather, they were individuals who
had completed NFC's program themselves, some only a few
weeks before beginning to work as a counselor. The website
also advertised around-the-clock medical staffing, but
Plaintiff only saw a doctor once a week and the remainder of
the time, a single registered nurse was present. During
Plaintiff's time in the withdrawal unit, the counselors
periodically checked her heart rate and blood pressure, and
provided her with vitamin bombs.
week in the withdrawal unit, Plaintiff moved across the hall.
NFC's facility was dilapidated; it did not look like the
website's pictures or as the intake counselor had
described. During Plaintiff's stay at NFC, the water in
the women's wing was shut off for over two weeks. There
was also a lack of hot water in the kitchen, and the Calhoun
County Health Department cited NFC for several health code
violations while Plaintiff was a patient. At one point, the
Health Department shut down the kitchen for over a week.
There was also a rampant bed-bug infestation in the facility.
addition, Plaintiff did not receive counseling as advertised;
the counselors were former graduates of the program, without
any specialized training, knowledge, or expertise. At one
point, a counselor was removed for abusing drugs. Based on
the website and her conversation with the intake counselor,
Plaintiff believed that she would undergo therapy to help her
deal with her addiction. Instead, she received exercises
based on Scientology teachings. Rather than receiving
medically-recognized substance abuse therapy, patients
adhered to a program of studying eight books written by L.
Ron Hubbard, known as “technology” or
“study technology” to Scientologists. The program
included drills or exercises routinely used in Scientology.
Instead of meeting with a counselor or drug-therapy
specialist, Plaintiff engaged in these drills. The activities
had no apparent connection to the treatment of substance
abuse, and often lasted for hours at a time.
her stay at NFC, Plaintiff also feared for her safety. Other
patients threatened violence against her, and NFC's staff
simply told the other patients not to approach Plaintiff or
talk to her.
detoxification or sauna portion of the program was a
Scientology ritual known as the “Purification
Rundown.” Patients first exercise vigorously, then
ingest increased doses of Niacin and a vitamin bomb before
entering the sauna for six hours a day. NFC requires all
patients to spend six hours a day for five weeks in the
sauna, and Plaintiff spent approximately 27 days in the sauna
program. During this time, Plaintiff had an adverse reaction
to the sauna and Niacin treatments, but she continued with
the program. Patients were given a small amount of water and
vegetables during their time in the sauna, but the vegetables
often had mold. Several times, sewage backed up through the
drains in the floor of the sauna. During the sauna
treatments, there were no medical personnel available to
oversee the health and safety of the patients. There was one
sauna supervisor, who sat outside of the sauna area while the
patients were inside. The sauna supervisor did not have any
medical or specialized training, but rather served as a
policing force to ensure that patients complied with the
program. The claims about the benefits of NFC's sauna
program are not scientifically proven, and there is no
scientific evidence for the claim that the residual drug
toxins stored in fatty tissue leak into the bloodstream and
cause drug cravings. The sauna program also exposes patients
to serious health risks including severe dehydration.
completed NFC's drug-treatment program, but had
difficulty adjusting to normal life afterward and relapsed.
She brings an action in diversity against Defendants,
alleging (1) breach of contract; (2) negligence; (3) fraud;
and (4) premises liability. Defendant NFC argues that the
signed admission agreement's arbitration clause controls,
so the Court should dismiss Plaintiff's complaint under
Rule 12(b)(6). Defendant Eastern joins NFC's motion and
also argues, in the alternative, that the Court lacks
complaint may be dismissed for failure to state a claim if it
fails “‘to give the defendant fair notice of what
the . . . claim is and the grounds upon which it
rests.” Bell Atl. Corp. v. Twombly, 550 U.S.
544, 555 (2007) (quoting Conley v. Gibson, 335 U.S.
41, 47 (1957)). Although a complaint need not contain
detailed factual allegations, a plaintiff's allegations
must include more than labels and conclusions.
Twombly, 550 U.S. at 555; Ashcroft v.
Iqbal, 556 U.S. 662, 678 (2009) (“Threadbare
recitals of the elements of a cause of action, supported by
mere conclusory statements, do not suffice.”). The
Court must determine whether the complaint contains
“enough facts to state a claim to relief that is
plausible on its face.” Twombly, 550 U.S. at
570. “A claim has facial plausibility when the
plaintiff pleads factual content that allows the court to
draw the reasonable inference that the defendant is liable
for the misconduct alleged.” Iqbal, 556 U.S.
at 679. Although the plausibility standard is not equivalent
to a “‘probability requirement, ' . . . it
asks for more than a sheer possibility that a defendant has
acted unlawfully.” Id. at 678 (quoting
Twombly, 550 U.S. at 556). “[W]here the
well-pleaded facts do not permit the court to infer more than
the mere possibility of misconduct, the complaint has
alleged-but it has now ‘show[n]'- that the pleader
is entitled to relief.” Id. at 679 (quoting
ruling on a Rule 12(b)(6) motion to dismiss, the Court may
only consider “the [c]omplaint and any exhibits
attached thereto, public records, items appearing in the
record of the case and exhibits attached to defendant's
motion to dismiss so long as they are referred to in the
[c]omplaint and are central to the claims contained
therein.” Bassett v. Nat'l Collegiate Athletic
Ass'n, 528 F.3d 426, 430 (6th Cir. 2008).
also raises a claim for fraud. Federal Rule of Civil
Procedure 9(b) requires particularity when pleading fraud.
Iqbal, 556 U.S. at 686 (discussing the elevated Rule
9(b) pleading standard). In other words, the complaint must
“(1) specify the statements that the plaintiff contends
were fraudulent, (2) identify the speaker, (3) state where
and when the statements were made, and (4) explain why the
statements were fraudulent.” Indiana State Dist.
Council of Laborers & Hod Carriers Pension & Welfare
Fund v. Omincare, Inc., 583 F.3d 935, 942-43 (6th Cir.
2009) (citation and quotations omitted).
addition, the party must identify the “alleged
misrepresentation on which he or she relied; the fraudulent
scheme; the fraudulent intent of [the other party]; and the
injury resulting from the fraud.” Coffey v. Foamex
L.P., 2 F.3d 157, 161-62 (6th Cir. 1993) (quotation
marks and citations omitted). But “[w]hen faced with a
motion to dismiss for failure to plead fraud ‘with
particularity' as required by Rule 9(b) . . ., ‘a
court must factor in the policy of simplicity in pleading
which the drafters of the Federal Rules codified in Rule
9.'” Whalen v. Stryker Corp., 783
F.Supp.2d 977, 982 (E.D. Ky. 2011) (quoting Michaels
Bldg. Co. v. Ameritrust Co., N.A., 848 F.2d 674, 679
(6th Cir. 1988)). “Rule 9(b) is not to be read in
isolation, but is to be interpreted in conjunction with
Federal Rule of Civil Procedure 8.” United States
ex. rel Bledsoe v. Cmty. Health Sys., Inc., 501 F.3d
493, 503 (6th Cir. 2007) (quoting Michaels, 848 F.2d
at 679). ...