Erhard to Pursue Libel Claim in Suit Against Cox

Werner Erhard & Associates, a firm based in San Francisco, announced Monday that it will appeal an Orange County Superior Court decision last December that disallowed the company’s libel claim against Rep. C. Christopher Cox (R-Newport Beach).

In May, Werner Erhard, the head of Werner Erhard & Associates, filed a suit charging that Cox’s congressional campaign last spring both libeled and slandered him. The suit asked for $15 million in damages.

Erhard was the founder of est, a self-awareness program. Cox’s Republican primary campaign last spring sent out mailers that referred to est as “a destructive cult.”

Linked Erhard, Rosenberg

Other candidates in that Republican primary in the 40th Congressional District included Erhard’s brother, Newport Beach businessman Nathan Rosenberg. Cox’s mailers linked Rosenberg to Erhard and asked voters if they would vote for a candidate associated with “that cult est.”

Erhard, who changed his named from Jack Rosenberg, stopped offering est programs in 1984. His theories now are presented in a seminar program known as “The Forum.” Erhard’s libel and slander suit said that the Cox campaign’s mailers and telephone calls hurt his business in Orange County. On Dec. 6, Superior Court Commissioner Eleanor M. Palk threw out the libel portion of Erhard’s claim against Cox. Palk ruled that the statements made in the Cox mailer were political opinions protected by the constitutional right of free speech.

Palk upheld Erhard’s right to sue Cox for slander in the case, which has not yet come to trial.

On Monday, however, Erhard’s company announced that it will drop its slander suit against Cox “in order to more fully pursue the libel claim.” The company said it considered the libel portion of the suit more important. Libel involves written defamation; slander is spoken defamation.

Art Schreiber, general counsel for Werner Erhard & Associates, said: “The effect of (Palk’s) decision is to allow political candidates to make libelous statements in campaign literature without being held legally accountable for the damage caused by such statements. We consider this a clearly erroneous result. . . . “

Cox Statement

Cox said Monday in Washington that he believes the appeals court will throw out the libel case on the same constitutional grounds--constitutional freedom of speech--cited by the Superior Court decision. Cox said he believes that Erhard is on the verge of also losing the right to sue on the grounds of slander.

Cox said last week that the California Court of Appeal agreed to hear his legal arguments on why the slander portion of Erhard’s suit should also be dismissed. Cox said he believes the appeal court would have ruled in his favor. With the announcement Monday that Erhard now plans to drop the slander suit, Cox noted that the matter becomes moot.

“It’s all over,” Cox said. “They have put all their eggs into a basket that has already been tossed out.”