Ney v. Landmark Education Corp.

Suit filed

Stephanie Ney, a 45-year-old artist from Silver Spring, Maryland 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 WE&A'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. According to the unpublished opinion of the United States Court of Appeals, Fourth Circuit:

"Ney's attendance at The Forum apparently passed without incident, and she left the weekend that she attended feeling satisfied and hoping to return. As a result of her experience at The Forum, however, she decided that she should become more open in her life. To that end, two days later she confessed to her husband a "crush" that she had on a fellow graduate student. Ney's husband in turn told her that he had conducted several extramarital affairs. The following day she confessed her crush to her faculty advisor, who explained that the graduate student should be avoided since he was a Satan worshipper and had wrecked marriages in the past."

After three days, Ney experienced a psychotic break, and was committed to 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, and she stated there was a high probability she would now need psychological therapy for 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 the lack of training received by their group leaders.

Her attorney, Gerald F. Ragland Jr., asserted that 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, "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." He also said The Forum managers should have ensured that attendants were "more closely monitored." Psychologist Margaret Singer, author of Crazy Therapies, appeared before the court as an expert witness in the case.

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, "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 Ney did not abide by a consent form sent by the organization to potential participants prior to the course, which he described 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. But Ney testified 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 participated in The Forum's two-day seminar, therefore Landmark Education was not the owner of The Forum course at the time of Ney's experiences. A jury concluded that the leader of The Forum course attended by Ney should not be held responsible for inflicting emotional distress upon her, or for her emotional distress. Erhard was not personally served, so did not respond to the lawsuit, and, following the rules, a default judgement was entered against him in the amount of US$380,000. 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 United States District Court for the Eastern District of Virginia, at Alexandria.