Court upholds Nxivm ruling

Training company challenged allegations that it's a cult

Times Union/April 23, 2004
By Dennis Yusko

Albany -- Allegations that a Colonie-based human potential company is a cult can stay online, a federal court has affirmed. Nxivm (pronounced NEX-ee-um), which offers human potential seminars, alleged that Rick Ross of New Jersey, a "cult deprogrammer," published critical commentary of its program after obtaining information through copyright infringement. In September, a federal district judge in Albany denied its request for an injunction to remove the information from a Web site.

This week, the U.S. Court of Appeals for the Second Circuit in New York City rejected Nxivm's appeal of that decision, saying critical analysis of a confidential 265-page Nxivm manual by two mental health professionals on Ross' site represented criticism, and therefore "fair use" under copyright law.

"The court treats it like a negative theater review, which even though damaging is not legally actionable," said Albany attorney Thomas F. Gleason, who represented Ross. "It's a very negative development for the plaintiff."

Arlen Olsen of Latham, who has been acting as attorney for Nxivm, could not be reached.

The company claimed in a federal lawsuit filed in August that a former Nxivm student, Stephanie Franco of New Jersey, supplied Ross with its confidential "Rational Inquiry" manual after signing an agreement not to disseminate it.

Paul Martin, a clinical psychologist, and John Hochman, assistant clinical professor of psychiatry at the University of California at Los Angeles, acquired and read the material and characterized it on Ross' site as an expensive form of brainwashing. The postings caused Nxivm to lose the support of prominent members and a coach, thousands of dollars a day in revenue, a speaking engagement by actress Goldie Hawn and more, Nxivm lawyers alleged.

A motion to dismiss the lawsuit is pending before U.S. District Judge Gary Sharpe in Albany.

Rational Inquiry was created by Keith Raniere and Nancy Salzman, both of Halfmoon, and sold as part of Executive Success Programs or ESP at Nxivm's New Karner Road offices in Colonie. Students call Raniere "Vanguard" and Salzman "Prefect." The company has applied to build a 67,000-square-foot headquarters off Woodin Road in Halfmoon, a plan that has drawn the opposition of residents.

An ESP student named Kristin Marie Snyder has been missing for 14 months and is presumed dead. The 35-year-old woman was last seen leaving an ESP intensive session in Anchorage, Alaska. Police there believe Snyder committed suicide by drowning herself in an Alaska bay in February 2003.

Snyder left a note in her vehicle saying Nxivm brainwashed her, police said.