Ney v. Landmark Education Corporation and Werner Erhard
Encyclopedia
Ney v. Landmark Education Corporation and Werner Erhard is a legal case that was filed in United States District Court for the Eastern District of Virginia
against Landmark Education
, its predecessor Werner Erhard and Associates
, and Werner Erhard
, by a participant in one of Erhard's courses named Stephanie Ney. In September 1989, Ney was a participant in "The Forum" in Alexandria, Virginia
, a self-improvement course given by a predecessor company to Landmark Education which was at the time owned by Erhard. After her attendance at the course, she suffered from a nervous breakdown
and had to be hospitalized. She was then committed to a psychiatric facility. She remained at the psychiatric facility for two weeks, and at times had to be drugged or restrained so that she would not harm herself.
Judge James C. Cacheris
dismissed Landmark Education from the lawsuit, stating that it was not the owner of The Forum course at the time of Ney's experiences. A jury determined that the trainer of her course, Ron Zeller, should not be held responsible for her emotional distress. Erhard was not personally served and did not respond to the lawsuit, and a default judgement was entered against him. Erhard was ordered to pay Ney over US$
500,000. Ney appealed the case to the United States Court of Appeals for the Fourth Circuit
, specifically on the matter of the liability of Landmark Education, and the judges affirmed the decision of the district court
. Erhard defaulted on the payment
due to Ney.
, born John Paul Rosenberg, created the Erhard Seminars Training
(est) course in 1971. Est was a form of Large Group Awareness Training
, and was part of the Human Potential Movement
. Est was a four-day, 60-hour self-help program given to groups of 250 people at a time. The program was very intensive: each day would contain 15–20 hours of instruction. During the training, participants had to agree to certain rules which remained in effect for the duration of the course. Participants were taught that they were responsible for their life outcomes, and were promised a dramatic change in their self-perception.
Est was controversial: critics characterized the training methods as brainwashing, and suggested that the program had fascistic
and narcissistic
tendencies. Proponents asserted that it had a profoundly positive impact on people's lives. By 1977 over 100,000 people completed the est training, including public figures and mental health professionals. In 1985, Werner Erhard and Associates
repackaged the course as "The Forum", a seminar focused on "goal-oriented breakthroughs". By 1988, approximately one million people had taken some form of the trainings. In the early 1990s Erhard faced tax and family problems. A group of his associates formed the company Landmark Education
in 1991, purchasing The Forum's course "technology" from Erhard.
with two sons, sued Landmark Education
, its trainer Ron Zeller, its predecessor company Werner Erhard and Associates
, and Werner Erhard
, for US$
2 million, after attending one of Erhard's courses. Landmark Education purchased The Forum from Erhard after Ney had attended her training. In September 1989, Ney attended a two-day seminar of "The Forum" course held in Alexandria, Virginia
. After attending The Forum, she suffered from a nervous breakdown
, and had to be hospitalized.
Ney was committed to a psychiatric
facility, the Psychiatric Institute of Montgomery County
. She was held for two weeks in the psychiatric facility, and during periods of her stay she was drugged and secured to a bed in order to prevent her from intentional self-injury. Subsequent to this medical experience, she continued to need ongoing treatment. She said that there was a high chance she would need psychological therapy for her entire life.
Ney's complaint asserted that Landmark Education recklessly utilized complex psychological treatments. She stated that Landmark Education was aware these psychological treatments could harm the individuals attending their courses, in part due to lack of training received by their group leaders.
Attorney Gerald F. Ragland Jr. stated it was not appropriate that managers of The Forum would "conduct what is in effect therapy without training, without therapists in the room". On the first day of the trial, Ragland told the jury that "Part of the process of therapy is to confront defense mechanisms and cause change. Each of us have our own way of dealing with life. Defense mechanisms aren't bad. They are our methods of coping with the constant demands of life." Ragland said that The Forum managers should have ensured that attendants were "more closely monitored". Psychologist
Margaret Singer
, author of Cults in Our Midst, appeared before the court as an expert witness
in the case. In her testimony, Singer asserted that Ney's attendance at The Forum was tied to her mental breakdown
.
Landmark Education's lawyer Robert P. Trout said that 250,000 individuals had gone through The Forum training, and described it as a philosophical environment for "people who are well ... who want to gain greater effectiveness". Trout stated that "While it's not for everyone, many people found the Forum satisfying, gratifying and valuable in their lives. The Forum is for people who are well and effective in their lives and want to gain better effectiveness. They advise you that you may experience stress and different emotions." Trout said that Ney did not abide by a consent form sent by the organization to potential participants prior to the course. He described the consent form as "It says if you're coming here for therapy, go someplace else."
In addition, Trout stated that in the interim three days between Ney's attendance at The Forum and her commitment to a psychiatric facility, she had found out that her husband had cheated on her and had two affairs. Ney testified to the jury in the case that she was surprised when she found out about her husband's behavior, but "burst out laughing, because I had been so worried about my infatuation [with a fellow art student] and he had gone and had this affair".
Erhard had not been seen in public for several months prior to the trial. He was not personally served, and did not respond to the lawsuit. Judge James C. Cacheris
entered a default judgement in favor of the plaintiff. "Erhard defaulted. He never filed an answer to our complaint," said attorney Ragland. The judge decided to wait for the lawsuit to conclude before determining Erhard's liability in the case. After a 5 day trial, Judge Cacheris issued his ruling against Erhard, immediately after the jury determined its verdict in the lawsuit. The judge ordered Erhard and his company to pay her both compensatory damages and punitive damages
, in the total amount of $501,790.
Ney appealed the case to the United States Court of Appeals for the Fourth Circuit
, specifically on the matter of the liability of Landmark Education, and the judges affirmed the decision of the United States District Court for the Eastern District of Virginia
. Erhard defaulted on the payment
due to Ney.
cited the lawsuit in an article about transformation training, and commented that "Some of the reports are disturbing, indeed." The case was cited by the defendant in Landmark Education's lawsuit against Condé Nast Publications
, Landmark Education Corporation v. The Conde Nast Publications, Inc., to support its claim that "The Forum has been the subject of legal complaints alleging cult-like practices and psychological damage". In his 1993 biography of Erhard, Outrageous Betrayal
, author Steven Pressman commented that it was not likely the plaintiff would recover the $500,000 default judgement from Erhard.
United States District Court for the Eastern District of Virginia
The United States District Court for the Eastern District of Virginia is one of two United States district courts serving the Commonwealth of Virginia...
against Landmark Education
Landmark Education
Landmark Education LLC is a personal training and development company which offers educational programs in approximately 115 locations in more than 20 countries worldwide....
, its predecessor Werner Erhard and Associates
Werner Erhard and Associates
Werner Erhard and Associates, also known as WE&A or as WEA, operated as a commercial entity from February 1981 until early 1991. It replaced Erhard Seminars Training, Inc. as the vehicle for marketing, selling and imparting the content of the est training, and offered what some people refer to as...
, and Werner Erhard
Werner Erhard
Werner Hans Erhard is an author of transformational models and applications for individuals, groups, and organizations...
, by a participant in one of Erhard's courses named Stephanie Ney. In September 1989, Ney was a participant in "The Forum" in Alexandria, Virginia
Alexandria, Virginia
Alexandria is an independent city in the Commonwealth of Virginia. As of 2009, the city had a total population of 139,966. Located along the Western bank of the Potomac River, Alexandria is approximately six miles south of downtown Washington, D.C.Like the rest of northern Virginia, as well as...
, a self-improvement course given by a predecessor company to Landmark Education which was at the time owned by Erhard. After her attendance at the course, she suffered from a nervous breakdown
Nervous breakdown
Mental breakdown is a non-medical term used to describe an acute, time-limited phase of a specific disorder that presents primarily with features of depression or anxiety.-Definition:...
and had to be hospitalized. She was then committed to a psychiatric facility. She remained at the psychiatric facility for two weeks, and at times had to be drugged or restrained so that she would not harm herself.
Judge James C. Cacheris
James C. Cacheris
James C. Cacheris is currently serving as judge on the United States District Court in the Eastern District of Virginia....
dismissed Landmark Education from the lawsuit, stating that it was not the owner of The Forum course at the time of Ney's experiences. A jury determined that the trainer of her course, Ron Zeller, should not be held responsible for her emotional distress. Erhard was not personally served and did not respond to the lawsuit, and a default judgement was entered against him. Erhard was ordered to pay Ney over US$
United States dollar
The United States dollar , also referred to as the American dollar, is the official currency of the United States of America. It is divided into 100 smaller units called cents or pennies....
500,000. Ney appealed the case to the United States Court of Appeals for the Fourth Circuit
United States Court of Appeals for the Fourth Circuit
The United States Court of Appeals for the Fourth Circuit is a federal court located in Richmond, Virginia, with appellate jurisdiction over the district courts in the following districts:*District of Maryland*Eastern District of North Carolina...
, specifically on the matter of the liability of Landmark Education, and the judges affirmed the decision of the district court
United States district court
The United States district courts are the general trial courts of the United States federal court system. Both civil and criminal cases are filed in the district court, which is a court of law, equity, and admiralty. There is a United States bankruptcy court associated with each United States...
. Erhard defaulted on the payment
Default (finance)
In finance, default occurs when a debtor has not met his or her legal obligations according to the debt contract, e.g. has not made a scheduled payment, or has violated a loan covenant of the debt contract. A default is the failure to pay back a loan. Default may occur if the debtor is either...
due to Ney.
Background
Werner ErhardWerner Erhard
Werner Hans Erhard is an author of transformational models and applications for individuals, groups, and organizations...
, born John Paul Rosenberg, created the Erhard Seminars Training
Erhard Seminars Training
Erhard Seminars Training, an organization founded by Werner H. Erhard, offered a two-weekend course known officially as "The est Standard Training"...
(est) course in 1971. Est was a form of Large Group Awareness Training
Large Group Awareness Training
Large-group awareness training refers to activities usually offered by groups linked with the human potential movement which claim to increase self-awareness and bring about desirable transformations in individuals' personal lives...
, and was part of the Human Potential Movement
Human Potential Movement
The Human Potential Movement arose out of the social and intellectual milieu of the 1960s and formed around the concept of cultivating extraordinary potential that its advocates believed to lie largely untapped in all people...
. Est was a four-day, 60-hour self-help program given to groups of 250 people at a time. The program was very intensive: each day would contain 15–20 hours of instruction. During the training, participants had to agree to certain rules which remained in effect for the duration of the course. Participants were taught that they were responsible for their life outcomes, and were promised a dramatic change in their self-perception.
Est was controversial: critics characterized the training methods as brainwashing, and suggested that the program had fascistic
Fascism
Fascism is a radical authoritarian nationalist political ideology. Fascists seek to rejuvenate their nation based on commitment to the national community as an organic entity, in which individuals are bound together in national identity by suprapersonal connections of ancestry, culture, and blood...
and narcissistic
Narcissism
Narcissism is a term with a wide range of meanings, depending on whether it is used to describe a central concept of psychoanalytic theory, a mental illness, a social or cultural problem, or simply a personality trait...
tendencies. Proponents asserted that it had a profoundly positive impact on people's lives. By 1977 over 100,000 people completed the est training, including public figures and mental health professionals. In 1985, Werner Erhard and Associates
Werner Erhard and Associates
Werner Erhard and Associates, also known as WE&A or as WEA, operated as a commercial entity from February 1981 until early 1991. It replaced Erhard Seminars Training, Inc. as the vehicle for marketing, selling and imparting the content of the est training, and offered what some people refer to as...
repackaged the course as "The Forum", a seminar focused on "goal-oriented breakthroughs". By 1988, approximately one million people had taken some form of the trainings. In the early 1990s Erhard faced tax and family problems. A group of his associates formed the company Landmark Education
Landmark Education
Landmark Education LLC is a personal training and development company which offers educational programs in approximately 115 locations in more than 20 countries worldwide....
in 1991, purchasing The Forum's course "technology" from Erhard.
Suit filed
Stephanie Ney, then a 45-year-old artist from Silver Spring, MarylandSilver Spring, Maryland
Silver Spring is an unincorporated area and census-designated place in Montgomery County, Maryland, United States. It had a population of 71,452 at the 2010 census, making it the fourth most populous place in Maryland, after Baltimore, Columbia, and Germantown.The urbanized, oldest, and...
with two sons, sued Landmark Education
Landmark Education
Landmark Education LLC is a personal training and development company which offers educational programs in approximately 115 locations in more than 20 countries worldwide....
, its trainer Ron Zeller, its predecessor company Werner Erhard and Associates
Werner Erhard and Associates
Werner Erhard and Associates, also known as WE&A or as WEA, operated as a commercial entity from February 1981 until early 1991. It replaced Erhard Seminars Training, Inc. as the vehicle for marketing, selling and imparting the content of the est training, and offered what some people refer to as...
, and Werner Erhard
Werner Erhard
Werner Hans Erhard is an author of transformational models and applications for individuals, groups, and organizations...
, for US$
United States dollar
The United States dollar , also referred to as the American dollar, is the official currency of the United States of America. It is divided into 100 smaller units called cents or pennies....
2 million, after attending one of Erhard's courses. Landmark Education purchased The Forum from Erhard after Ney had attended her training. In September 1989, Ney attended a two-day seminar of "The Forum" course held in Alexandria, Virginia
Alexandria, Virginia
Alexandria is an independent city in the Commonwealth of Virginia. As of 2009, the city had a total population of 139,966. Located along the Western bank of the Potomac River, Alexandria is approximately six miles south of downtown Washington, D.C.Like the rest of northern Virginia, as well as...
. After attending The Forum, she suffered from a nervous breakdown
Nervous breakdown
Mental breakdown is a non-medical term used to describe an acute, time-limited phase of a specific disorder that presents primarily with features of depression or anxiety.-Definition:...
, and had to be hospitalized.
Ney was committed to a psychiatric
Psychiatry
Psychiatry is the medical specialty devoted to the study and treatment of mental disorders. These mental disorders include various affective, behavioural, cognitive and perceptual abnormalities...
facility, the Psychiatric Institute of Montgomery County
Montgomery County, Maryland
Montgomery County is a county in the U.S. state of Maryland, situated just to the north of Washington, D.C., and southwest of the city of Baltimore. It is one of the most affluent counties in the United States, and has the highest percentage of residents over 25 years of age who hold post-graduate...
. She was held for two weeks in the psychiatric facility, and during periods of her stay she was drugged and secured to a bed in order to prevent her from intentional self-injury. Subsequent to this medical experience, she continued to need ongoing treatment. She said that there was a high chance she would need psychological therapy for her entire life.
Ney's complaint asserted that Landmark Education recklessly utilized complex psychological treatments. She stated that Landmark Education was aware these psychological treatments could harm the individuals attending their courses, in part due to lack of training received by their group leaders.
Attorney Gerald F. Ragland Jr. stated it was not appropriate that managers of The Forum would "conduct what is in effect therapy without training, without therapists in the room". On the first day of the trial, Ragland told the jury that "Part of the process of therapy is to confront defense mechanisms and cause change. Each of us have our own way of dealing with life. Defense mechanisms aren't bad. They are our methods of coping with the constant demands of life." Ragland said that The Forum managers should have ensured that attendants were "more closely monitored". Psychologist
Psychologist
Psychologist is a professional or academic title used by individuals who are either:* Clinical professionals who work with patients in a variety of therapeutic contexts .* Scientists conducting psychological research or teaching psychology in a college...
Margaret Singer
Margaret Singer
Dr. Margaret Thaler Singer, was a clinical psychologist and a part-time Adjunct Professor in the Department of Psychology at the University of California, Berkeley, U.S....
, author of Cults in Our Midst, appeared before the court as an expert witness
Expert witness
An expert witness, professional witness or judicial expert is a witness, who by virtue of education, training, skill, or experience, is believed to have expertise and specialised knowledge in a particular subject beyond that of the average person, sufficient that others may officially and legally...
in the case. In her testimony, Singer asserted that Ney's attendance at The Forum was tied to her mental breakdown
Mental breakdown
Mental breakdown is a non-medical term used to describe an acute, time-limited phase of a specific disorder that presents primarily with features of depression or anxiety.-Definition:...
.
Landmark Education's lawyer Robert P. Trout said that 250,000 individuals had gone through The Forum training, and described it as a philosophical environment for "people who are well ... who want to gain greater effectiveness". Trout stated that "While it's not for everyone, many people found the Forum satisfying, gratifying and valuable in their lives. The Forum is for people who are well and effective in their lives and want to gain better effectiveness. They advise you that you may experience stress and different emotions." Trout said that Ney did not abide by a consent form sent by the organization to potential participants prior to the course. He described the consent form as "It says if you're coming here for therapy, go someplace else."
In addition, Trout stated that in the interim three days between Ney's attendance at The Forum and her commitment to a psychiatric facility, she had found out that her husband had cheated on her and had two affairs. Ney testified to the jury in the case that she was surprised when she found out about her husband's behavior, but "burst out laughing, because I had been so worried about my infatuation [with a fellow art student] and he had gone and had this affair".
Court rulings
Prior to the start of the trial in July 1992, Landmark Education was dismissed from the lawsuit by the federal judge hearing the case because it did not yet exist when Ney was a participant in The Forum course. A jury concluded that the leader of The Forum course attended by Ney should not be held responsible for inflicting emotional distress upon her.James C. Cacheris
James C. Cacheris is currently serving as judge on the United States District Court in the Eastern District of Virginia....
entered a default judgement in favor of the plaintiff. "Erhard defaulted. He never filed an answer to our complaint," said attorney Ragland. The judge decided to wait for the lawsuit to conclude before determining Erhard's liability in the case. After a 5 day trial, Judge Cacheris issued his ruling against Erhard, immediately after the jury determined its verdict in the lawsuit. The judge ordered Erhard and his company to pay her both compensatory damages and punitive damages
Punitive damages
Punitive damages or exemplary damages are damages intended to reform or deter the defendant and others from engaging in conduct similar to that which formed the basis of the lawsuit...
, in the total amount of $501,790.
Ney appealed the case to the United States Court of Appeals for the Fourth Circuit
United States Court of Appeals for the Fourth Circuit
The United States Court of Appeals for the Fourth Circuit is a federal court located in Richmond, Virginia, with appellate jurisdiction over the district courts in the following districts:*District of Maryland*Eastern District of North Carolina...
, specifically on the matter of the liability of Landmark Education, and the judges affirmed the decision of the United States District Court for the Eastern District of Virginia
United States District Court for the Eastern District of Virginia
The United States District Court for the Eastern District of Virginia is one of two United States district courts serving the Commonwealth of Virginia...
. Erhard defaulted on the payment
Default (finance)
In finance, default occurs when a debtor has not met his or her legal obligations according to the debt contract, e.g. has not made a scheduled payment, or has violated a loan covenant of the debt contract. A default is the failure to pay back a loan. Default may occur if the debtor is either...
due to Ney.
Analysis
Ben Winters of NewCity ChicagoNewcity
Newcity is an independent, free weekly newspaper in Chicago that specializes in music, stage, film and art and is notable for launching the careers of numerous cartoonists and writers and art critics. The publication was described by the Chicago Tribune as "sophisticated" and as an "alternative...
cited the lawsuit in an article about transformation training, and commented that "Some of the reports are disturbing, indeed." The case was cited by the defendant in Landmark Education's lawsuit against Condé Nast Publications
Condé Nast Publications
Condé Nast, a division of Advance Publications, is a magazine publisher. In the U.S., it produces 18 consumer magazines, including Architectural Digest, Bon Appétit, GQ, The New Yorker, Vanity Fair, and Vogue, as well as four business-to-business publications, 27 websites, and more than 50 apps...
, Landmark Education Corporation v. The Conde Nast Publications, Inc., to support its claim that "The Forum has been the subject of legal complaints alleging cult-like practices and psychological damage". In his 1993 biography of Erhard, Outrageous Betrayal
Outrageous Betrayal
Outrageous Betrayal: The Dark Journey of Werner Erhard from est to Exile was written by freelance journalist Steven Pressman and first published in 1993 by St. Martin's Press...
, author Steven Pressman commented that it was not likely the plaintiff would recover the $500,000 default judgement from Erhard.