Byron V. Rajneesh Foundation International - Portland Federal Trial

Portland Federal Trial

Byron filed a lawsuit against Rajneesh Foundation International claiming she had been defrauded by the organization, and the suit proceeded to a six-member jury trial in 1985 in federal court Portland, Oregon. Byron's claim included $309,990 she stated she had given as a loan to the Rajneesh Foundation, in addition to $80,000 she had deposited in a Rajneeshee bank, and $1.5 million in punitive damages. Byron testified at trial that the $309,990 was given in 1980 as a loan to Rajneesh Foundation International for the organization to buy land in Poona, India, and that the $80,000 was to be held in safekeeping, while Ma Anand Sheela testified that Byron's money was a donation and not a loan. Rajneesh Foundation International submitted an opinion survey in the case, but the survey was conducted by volunteer members of the organization itself. Participants in the survey were able to identify the volunteers as members of the Rajneesh organization, and the court ruled that the results of the survey were unreliable. The trial concluded on May 25, 1985. The jury decided Byron's money should be returned to her, in addition to $1.25 million in punitive damages against Rajneesh Foundation International. The total amount awarded to Byron by the jury was $1.64 million, and the jury concluded that Byron had been deliberately misled by Sheela. The jury, composed of three women and three men, came to the conclusion that Ma Anand Sheela committed a "wanton" violation of Byron's trust, and that Byron had been under Sheela's "domination". The jury came to its decision after deliberating for just over two hours.

Ma Anand Sheela, the spokesman for Bhagwan Shree Rajneesh at the time, stated that the jury verdict shows "Rajneeshees can't get a fair trial in Oregon". Sheela characterized the lawsuit as part of the government's plan to "destroy the Rajneeshees" by utilizing "poison" of former followers, and said that the organization would appeal the verdict. Rajneesh spokeswoman Ma Prem Isabel stated: "I think Oregonians basically are trying to bring their bigotry into the court, and until now they are doing pretty good. We'll see how they do on appeal. This is witchhunting if I ever saw it. I know the government is out to get this community."

Rajneeshee attorney Swami Prem Niren (Philip J. Toelkes) argued before the United States District Court for the District of Oregon in November 1985 that the financial situation of the Rajneesh organization was such that it would take time to sell off assets to raise capital. He attempted to block execution of the jury judgment against the organization. Judge Owen Panner ruled that the judgment and collateral for paying it would remain, due to the uncertain financial circumstances of the Rajneesh organization. Byron received $975,000 of the judgment on November 27, 1985. Judge Panner refused to order Byron to return the funds to the Rajneesh organization.

According to Byron's attorney, the Rajneeshees paid for a majority of the judgment by signing over a Southern California building owned by the organization to her. According to Richardson, this was partly done in order to avoid the appeal process, since the Rajneeshees at the time were busy dealing with a plethora of other legal matters. Richardson notes that "in every disputed point of fact in the case the jury sided with the plaintiff, Mrs. Byron, and they chose as well to punish by awarding punitive damages". The jury also awarded Byron the return of money for which no records existed.