1. Bishop Lawrence's Diocese and its Trustees, if you recall, brought the initial complaint in the Circuit Court for Dorchester County in Prince George on January 4, joined as plaintiffs by the sixteen individual parishes. The only defendant named was the Episcopal Church (USA), and the lawsuit sought a declaratory judgment against it that the plaintiff Diocese and congregations were the sole owners of their respective names, registered marks (including the Diocese's traditional seal) and real properties. Copies of the complaint were served upon the Presiding Bishop, the Church's Treasurer, and its South Carolina counsel (Mr. Thomas Tisdale) within a few days of its filing.
2. A little over two weeks later, ECUSA's representatives had not yet filed any appearance in the lawsuit, although they had known about it since January 7 (and Mr. Tisdale was served the same day the complaint was filed, on January 4). The Diocese filed an amended complaint which added another fifteen parishes as plaintiffs, and also filed an application for an emergency temporary restraining order against ECUSA. (The latter's Presiding Bishop had noticed, for January 26, a special convention of the entity that was then calling itself by the same name as Bishop Lawrence's Diocese, "the Episcopal Diocese of South Carolina", and was threatening to infringe upon the registered name and marks of Bishop Lawrence's Diocese.)
3. On January 22, Circuit Court Judge Diane Goodstein held an ex parte hearing (meaning a hearing held on an urgent basis, with less than the usual notice to the other side) on Bishop Lawrence's request for a temporary restraining order against ECUSA. Judge Goodstein issued the restraining order the next day, January 23, after Bishop Lawrence and his Diocese had posted the required bond.
4. Certain members of the remnant group tried to make much of the fact that Judge Goodstein issued the Temporary Restraining Order without their counsel having received notice of the hearing. This criticism, however, ignores the fact that their counsel had not yet responded to the complaint, or otherwise entered an appearance in the action. Until an attorney files a pleading with the court which constitutes an official appearance on behalf of a named party, that attorney is not entitled to any notice of anything in the case.
5. The criticism also ignores how such TROs function. A TRO is always issued on an emergency basis, to prevent an impending harm. Because of the urgency (which must be shown in the application, and which must justify the issuance of immediate relief in order to maintain the status quo of the existing situation against some threatened injury), TROs are always issued on very short notice, and quite frequently upon no notice at all. For that reason, they are always of very short duration -- up to ten days maximum. And in this case, Judge Goodstein set a hearing on issuing a lengthier injunction for February 1, and directed that plaintiffs give ECUSA and its counsel immediate notice of that hearing. They were in fact served on January 24 -- two days before the convening of the "special convention", and eight days before the scheduled hearing.
6. But the hearing was never held as scheduled. On behalf of ECUSA, Mr. Tisdale notified Judge Goodstein on January 29 that his client had no objection to the indefinite extension of the TRO. However, there is no provision in law for such an extension, and since ECUSA had now (through Mr. Tisdale) appeared in the lawsuit, the Court issued a temporary (preliminary) injunction to replace the TRO, and provided that it would last until such time as it issued a further decision following any hearing on the matter requested and noticed by ECUSA. (To date, the injunction remains in force, because ECUSA has never requested a hearing, but has pursued remedies in South Carolina federal court, as explained below.)
7. ECUSA requested, and received, from plaintiffs an extension of time within which to respond to the complaint. Meanwhile, more parishes continued to join in the lawsuit, and the complaint was amended a few more times in the interim by consent of all parties. One of the amendments, on February 28, also added as a defendant the Episcopal Church's remnant group, which now called itself "the Episcopal Church in South Carolina" in order to comply with Judge Goodstein's injunction.
8. Thus, up through the end of February 2013, all proceedings to date had taken place in the Circuit Court of Dorchester County, South Carolina. But on March 5, everything changed. On that date, Bishop vonRosenberg made the litigation personal, by instituting a lawsuit in his own name in the federal District Court of South Carolina, in Charleston, against Bishop Lawrence as an individual defendant. The lawsuit claimed that Bishop Lawrence was violating the federal trademark Act ("Lanham Act"), by using what Bishop vonRosenberg claimed were marks and names that belonged to his "Protestant Episcopal Church in the Diocese of South Carolina." (Note that, despite his counsel's having consented to the entry of an injunction against Bishop vonRosenberg and others which forbade them from using that name in South Carolina, Bishop vonRosenberg blatantly used the name in his pleadings in the federal District Court.)
9. Two days later, on March 7, Bishop vonRosenberg's attorneys filed and served a motion for a preliminary injunction, supported by voluminous affidavits, in the federal court Lanham Act lawsuit. This motion sought the issuance of an order from the federal court which would do exactly the reverse of what Judge Goodstein had already ordered -- without objection from ECUSA!
10. Bishop vonRosenberg's moving papers, as you can see, mentioned the state court injunction only in these words, and did not attach a copy of the order itself (see pp.26-27 of the previous link):
The state court plaintiffs also sought an injunction prohibiting The Episcopal Church from such uses [of their name and seal]. Id. On January 31, 2013, the state court issued a temporary consent injunction.11. On March 28, 2013, Bishop Lawrence's attorneys responded to the federal court Lanham Act suit by filing a motion to dismiss, or alternatively to stay or abstain from all proceedings pending the outcome of the state court action. The ground for this reasonable request was that Bishop vonRosenberg had not told the federal court the full story of the state court action, or about the injunction which that court had already issued. In accordance with well-settled federal precedent, some of which I discussed in this earlier post, Bishop Lawrence asked the federal court to take no further action in the case until the state court case could proceed to judgment -- if not to dismiss the federal case altogether at this point. (Of especial note is the fact that Bishop vonRosenberg's request for a preliminary injunction did not even mention for discuss the federal Anti-Injunction Act, which is designed to keep federal courts from interfering in just these kinds of state-law disputes.)
12. Next, the saga returned to the State court, where on the following day -- March 29, 2013 -- ECUSA and its rump diocese each filed answers to the complaint for declaratory relief, and then added counterclaims for all of the properties and assets of each of the (by now) thirty-five individual parishes which had joined the state court lawsuit, together with all of the assets and properties of Bishop Lawrence's Diocese. Using a by now standard tactic, they also sued individually the rectors and vestries of each of the thirty-five parishes, and alleged that they had "usurped control" of their respective parishes. (ECUSA's answer and counterclaims may be downloaded here; the rump diocese's pleadings are here.)
13. The counterclaims, as may be imagined, multiplied the issues and parties in the state court action a thousandfold, and turned the litigation into a juggernaut on the scale of that currently pending in Fort Worth. However, ECUSA and its attorneys were not done yet with introducing still further complications.
14. Having responded to the State court action, Bishop vonRosenberg's group (which -- remember, is claiming that they are the rightful occupants of the incorporated religious organization which filed the original state court complaint, and that Bishop Lawrence and his trustees are mere temporary interlopers) now filed on April 3, 2013 a pleading which removed the state court action to the same federal District Court in which the Lanham Act suit was pending.
15. With this measure, Bishop vonRosenberg's group (and ECUSA itself) have now doubled down on their attempts to get this matter out of the South Carolina State court system, and into the South Carolina federal courts. Any defendant to a state-court lawsuit which could have been brought in federal court originally may, within a specified time period, remove that case to the local federal court, as though it had been filed there in the first instance. But the key to this trick is that the complaint, fairly read, must state claims under federal law. It is only by virtue of such claims that the federal court may take jurisdiction of the claims (since there is no diversity of citizenship between the parties here).
16. And here is where ECUSA and its attorneys will have their work cut out for them. On April 7, 2013, Bishop Lawrence and his attorneys filed a motion to remand the removed action back to the state court. This pleading states very well all the reasons why the original complaint could not have been heard by a federal court in the first instance, and also shows why Bishop vonRosenberg's and ECUSA's filings in State court constituted a waiver of their right to argue that federal claims were involved in the state-court action.
So that is where matters stand in South Carolina as of this writing. The ball is clearly with the federal judge in the federal District Court in Charleston (the two cases have separate file numbers at present, but they are in front of the same judge -- the Hon. C. Weston Houck, who has senior status on that court (meaning that he is semi-retired, and hears cases only that he agrees to hear). He and his law clerks are no doubt now sorting through the welter of pleadings that have cascaded into his court in recent weeks. It is up to him whetehr or not he will schedule a hearing on the various motions, or will simply issue a ruling once all the reply memoranda have been filed.
If Judge Houck does return the original case to state court, for want of a well-pled federal question on the face of the complaint, then the issue for Judge Goodstein will be whether to impose any sanctions on ECUSA, Bishop Rosenberg and/or their counsel for their disregard of her injunction in filing their pleadings with the federal court.
In other words, the fight has just begun in South Carolina.