(Photo: Pixabay/Squarefrog)
On May 10th, Gateway Church obtained a protective order to keep certain information secret by invoking the Defend Trade Secrets Act.
Gateway Church is facing a class action suit filed by former donors seeking a return of their donations based on allegations the church leadership lied about how much money it was giving to missions.
According to the Gateway Church protective order, “‘Confidential Information’ shall include, but shall not be limited to, information that concerns or relates to (1) sales, marketing, manufacturing, or research and development; (2) financial performance; (3) manufacturing or other costs of doing business; (4) licenses or other confidential agreements; (5) technical details of products or methods of doing business and/or marketing; and/or (6) personally identifiable information.”
Pete Evans, President of Trinity, says, “It’s pure insanity! Previous court cases have invalidated church trade secrets.”
In 1986, while deciding a case involving the Church of Scientology, the U.S. 9th Circuit Court of Appeals ruled that religious teachings weren’t subject to laws protecting trade secrets, citing California trade secrets legislation.
In the ruling, Judge Harry Pregerson explained, “We hold that the California courts would conclude that sacred Scriptures do not meet the definition of a trade secret under California law.”
Source: Los Angeles Times
Courts have also thrown out protective orders for Daystar Television Network and Paula White.
In 2012, Trinity Foundation filed as an intervenor to unseal Daystar Television Network financial documents that were disclosed in a prior court case.
Wikipedia explains, “In law, intervention is a procedure to allow a nonparty, called intervenor (also spelled intervener) to join ongoing litigation, either as a matter of right or at the discretion of the court, without the permission of the original litigants.”
In their motion to seal financial records, Daystar’s attorneys argued against the release of income statements and balance sheets for the network, “Public disclosure of this information could cause harm to Daystar, by giving competitors an understanding of Daystar’s competitiveness within the marketplace.”
Trinity Foundation’s intervenor response, written by Attorney David Pyke, argued that Daystar’s motion was at odds with its Church status. “Daystar has both asserted that it is a ministry immune from suit and that it has protected business interests. It squawks Church but waddles for-profit business.”
Daystar’s motion quoted the Upjohn Co. v. Freeman ruling to defend financial secrets as trade secrets, “A properly proven trade secret interest may constitute a specific, serious, and substantial interest, which would justify restricting access to the documents in question.”
Meanwhile, Pyke argued that Daystar’s operations were not dependent on trade secrets and cited the same court ruling as a precedent for denying Daystar’s sealing of documents.
The intervenor response said, “In Upjohn the Court of Appeals upheld the trial court’s find that the protocols in testing and analyzing medications were a trade secret, but all other documents, including internal memoranda, adverse reaction reports, and clinical study documents were not trade secrets and did not otherwise meet the test for a specific, serious and substantial interest.”
On July 30, 2012, Judge Carl Ginsberg denied Daystar’s motion to seal the documents, which Trinity Foundation gave to journalists at National Public Radio (NPR).
In 2014, an NPR article quoted the late Marcus Lamb, then president of Daystar Television Network, saying the ministry gave $30 million “to ministries, to churches, to missions, to hurricane relief, to tsunami relief, to hospitals.’
Then NPR reported, “NPR analyzed six years of Daystar balance sheets. They show the network gave away $9.7 million dollars in direct grants to outside recipients. Not $30 million. That works out to charitable giving of about 5 percent of donor revenue.”
In 2016, Congress passed the Defend Trade Secrets Act which Gateway Church cited to obtain a protective order.
Since the new law passed, The Washington Post and Trinity Foundation filed as intervenors in a court case in which YouTube content creator Shirley Johnson (theremnantsjnj channel) countersued Paula White, and successfully obtained financial records and church bylaws.
In her ruling, Judge Leslie R. Hoffman cited the Nixon v. Warner Comm., Inc. ruling: “Beyond establishing a general presumption that criminal and civil actions should be conducted publicly, the common-law right of access includes the right to inspect and copy public records and documents.”
The court unsealed a treasure trove of financial documents investigative reporters would find interesting: Paula White’s Lamborghini loan application, W-2 tax forms, and financials for Paula Michelle Ministries Inc. (which previously operated the trade name Paula White Ministries) and New Destiny Christian Center Church.