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Geanacopulos v. Narconon Fresh Start

United States District Court, D. Nevada

August 18, 2014

HARRY GEANACOPULOS, et al., Plaintiff(s),

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For Harry Geanacopulos, Lauren Geanacopulos, Peter Geanacopulos, Plaintiffs: Ryan Andrew Hamilton, Hamilton Law, LLC, Las Vegas, NV.

For Narconon Fresh Start, doing business as Rainbow Canyon Retreat, Defendant: Stephen B Vogel, LEAD ATTORNEY, Alayne M. Opie, Lewis Brisbois Bisgaard & Smith LLP, Las Vegas, NV.

For Association for Better Living and Education International, Narconon International, Defendants: John Bemis, Hall Prangle & Schoonveld LLC, Las Vegas, NV.

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Presently before the court is a motion to dismiss filed by defendants Association for

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Better Living and Education International (ABLE) and Narconon International (hereinafter " defendants" ) pursuant to Fed.R.Civ.P. 12(b)(2) and 12(b)(6). (Doc. #13). Plaintiffs Harry Geanacopulos, Lauren Geanacopulos, and Peter Geanacopulos filed a response to the motion. (Doc. #17). Defendants filed a reply. (Doc. #22).

I. Background

Plaintiffs Harry and Lauren Geanacopulos (hereinafter " plaintiffs" ) allege that on or about November 27, 2013, they spoke on the telephone with an individual named Dan Carmichael, who claimed to be a Narconon representative. Plaintiffs expressed interest in finding a drug counseling center for their son, Peter, and Carmichael recommended the Narconon Fresh Start (NFS) program in Nevada.

According to plaintiffs, Carmichael indicated that the NFS program has more than a 76 percent success rate, that there would be a licensed physician on site at all times, and that the program was secular in nature. He directed plaintiffs to the Rainbow Canyon Retreat website at, which further detailed the NFS program. Relying on representations by Carmichael and the website, plaintiffs paid $30,000 up front to NFS and signed a contract with NFS for Peter's drug treatment.

Plaintiffs allege that upon his arrival at the NFS facility, Peter was mistreated. They claim that he was forced to sign away his legal rights and practice scientology. They further claim that Peter was forced to take dangerously high doses of vitamins and sit in a sauna for 30 hours each week, causing him to suffer from heart palpitations. Plaintiffs allege that there were no medical personnel overseeing Narconon students and that NFS did not treat Peter for his substance abuse problems.

Rainbow Canyon Retreat is a Narconon facility run by NFS, a California corporation with its principal place of business in California. NFS transacts business in Nevada through the Rainbow Canyon Retreat facility.

Defendants ABLE and Narconon International are non-profit organizations incorporated and headquartered in California. ABLE owns the Narconon trademark and licenses it to Narconon International, who sub-licenses it to NFS. Plaintiffs claim that defendants transact business in Nevada through NFS as its parent companies and principals.

Plaintiffs' complaint includes claims for breach of contract, fraud, negligent representation, intentional infliction of emotional distress, mail and wire fraud under RICO, negligence, negligence per se, breach of the implied covenant of good faith and fair dealing, and civil conspiracy. Plaintiffs' claims are based on the representations of Carmichael and the NFS website as well as Peter's alleged mistreatment at the NFS facility. Plaintiffs contend that defendants ABLE and Narconon International are liable under alter ego and agency theories.

II. 12(b)(2) Dismissal for Lack of Personal Jurisdiction

a. Legal Standard

To avoid dismissal for lack of personal jurisdiction on the pleadings, a plaintiff bears the burden of demonstrating that his or her allegations would establish a prima facie case for personal jurisdiction. See Boschetto v. Hansing, 539 F.3d 1011, 1015 (9th Cir. 2008). A plaintiff must demonstrate jurisdiction over each defendant individually. Sher v. Johnson, 911 F.2d 1357, 1365 (9th Cir. 1990). However, allegations in the plaintiff's complaint

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must be taken as true and considered in plaintiff's favor. Rio Props., Inc. v. Rio Intern. Interlink, 284 F.3d 1007, 1019 (9th Cir. 2002).

Nevada has authorized its courts to exercise jurisdiction over persons " on any basis not inconsistent with . . . the Constitution of the United States." Nev. Rev. Stat. § 14.065. An assertion of personal jurisdiction must comport with due process. Fiore v. Walden, 688 F.3d 558, 573 (9th Cir. 2012). For specific jurisdiction, a plaintiff must demonstrate that each nonresident defendant has at least " minimum contacts" with the ...

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