Now there are quite a few legal concepts embodied in that opening sentence, and so let me try to unpack them for lay readers.
The current litigation in South Carolina began a little more than a year ago. The Diocese of South Carolina, a corporation headed by the Rt. Rev. Mark Lawrence and his co-trustees, joined by a number of parishes in the Diocese, filed a pre-emptive suit in the local state court in Dorchester County, northwest of Charleston. Initially they sued only the Episcopal Church (USA), but later they added the dissident group of remnant Episcopalians (who had been responsible for ECUSA's proceeding against Bishop Lawrence in the first place) which calls itself "the Episcopal Church in South Carolina [ECSC]."
The suit sought a judgment declaring Bishop Lawrence's diocese to be the sole registered owner, under South Carolina law, of its official name, seal and other trademarks, and declaring that the plaintiff parishes owned their respective properties free and clear of claims by ECUSA. In its response to the complaint against it, ECUSA asserted claims for the very same trademarks, and also for the respective parish properties -- based on ECUSA's Dennis Canon.
The counterclaims of ECUSA showed that it refused to recognize the validity of the quitclaim deeds which Bishop Lawrence and his Chancellor had issued to the member parishes of the Diocese of South Carolina. Not only that, but it refused to acknowledge the ruling by the South Carolina Supreme Court in 2009 in All Saints Waccamaw Parish v. Protestant Episcopal Church in the Diocese of South Carolina, which held that the Church's Dennis Canon (declaring a trust on all parish property) was of no force or effect in South Carolina.
Bishop Lawrence's Diocese and the other plaintiffs secured a restraining order against ECUSA and those working with it, to keep them from misappropriating the Diocese's name and trademarks. As noted, they later added the remnant group itself -- ECSC -- as a defendant, and then surprisingly, counsel for ECUSA and ECSC (Thomas Tisdale and his law firm represent both) agreed to make the restraining order into an injunction to the same effect, pending further notice or until the trial of the case.
Next, ECUSA's litigation strategy kicked in. After answering the complaint and asserting its counterclaims, ECSC filed a notice removing the case to federal district court. It claimed that the complaint raised issues of federal trademark law, and asked that court to enjoin Bishop Lawrence's Diocese from using its own name and trademarks. Almost simultaneously, ECSC's provisional bishop, the Rt. Rev. Charles G. vonRosenberg, filed a separate federal trademark infringement suit against Bishop Lawrence in federal district court.
Eventually, after almost eight months wasted litigating in federal court, that court remanded the main case back to the Circuit Court of Dorchester County, and dismissed Bishop vonRosenberg's separate action on the grounds that the same issues were already presented in the main case. Nothing ventured, nothing gained: Bishop vonRosenberg first asked the federal district judge to reconsider the dismissal of his lawsuit, and when the judge denied that motion just last month, Bishop vonRosenberg appealed the decision to the Fourth Circuit Court of Appeals in Richmond.
Meanwhile, the main case also saw repeated attempts by ECUSA and ECSC to widen its scope and to slow it down. First they sought discovery of all correspondence between Bishop Lawrence and his attorneys, which is ordinarily protected by the attorney-client privilege. But ECSC claimed that they were the "real" diocese for which the attorneys worked, and so they, in effect, were the client who was entitled to assert the privilege. Judge Goodstein entered an order denying their motion to compel production of the correspondence on November 18, 2013.
Next, ECSC moved to name Bishop Lawrence and other clergy members as defendants on claims of conspiracy to defraud (by allegedly scheming to take the Diocese out of ECUSA). Circuit Judge Goodstein denied that motion in an order entered on December 31, 2013. ECSC had also filed a motion with Judge Goodstein to reconsider her ruling on the motion to compel, which Judge Goodstein denied the same day.
Ordinarily, orders on discovery motions are considered to be interim, or "interlocutory" orders which, not being final, are not subject to appeal. ECSC, however, claimed that Judge Goodstein's order on their motion to compel in reality decided most of the merits of the case, because she found that ECSC had come into existence only in late January 2013 (when it met in a special convention to elect a provisional bishop and adopt a set of governing documents).
This finding, argues ECSC, in effect holds that it is not the continuing Episcopal Diocese of South Carolina that it claims to be, and so prejudges the main case as to who owns the name and trademarks. Therefore, it treated Judge Goodstein's order as one that decided ultimate matters and so was appealable. On January 13, 2014 it filed a notice of appeal from her order with the South Carolina Court of Appeals.
A notice of appeal at the end of a case suspends the jurisdiction of the trial court, and transfers the case to the Court of Appeals. An interim appeal does not necessarily have the same effect. Judge Goodstein, however, declined to let the plaintiffs proceed with noticed depositions pending the appeal, and so ECSC's move has effectively halted the proceedings below.
For that reason, Bishop Lawrence's attorneys promptly filed a motion to dismiss the appeal. ECSC responded, opposing the motion, and the matter is now up to the Court of Appeals to decide -- that is, until the motion to transfer jurisdiction to the supreme Court was filed yesterday.
The reader is now finally in a position to understand the strategy behind the motion described in the first paragraph above. The attorneys for Bishop Lawrence's Diocese and its parishes are asking the Supreme Court to take immediate jurisdiction of the appeal, instead of waiting to see how the appellate court will rule. They point out that if the appellate court were to grant the motion to dismiss, ECSC could then ask for a rehearing, and if that were also denied, it could request the Supreme Court to review the matter -- thus ending up just where the matter would be if the Supreme Court accepts a transfer of the appeal now.
One sees here also the wisdom of the strategy of Bishop Lawrence and his Diocese in being the first to go to court, ahead of ECSC's formation so that it could file a lawsuit. Indeed, as ECSC tells the Court of Appeals in its latest pleading:
It is only because the Respondents were first to the courthouse that they, instead of the Appellant, appear in this litigation under the name of the Diocese's corporations. Their fortuitous designation in the caption, however, should not entitle them to any advantage on the merits of this identity dispute.ECUSA's standard tactic in the cases in San Joaquin, Pittsburgh, Fort Worth and Quincy had been to have its replacement entity assume the name and identity of the diocese that had withdrawn, and then claim it was in fact a continuing entity with no break in its existence. This strategy allows it to file papers with the State authorities in which its rump organizations claim to be the true owners of the bank accounts and assets of the dioceses that had voted to leave ECUSA. It is a strategy designed to engender confusion in the courts -- but it has not worked thus far in South Carolina, thanks to the pre-emptive move by Bishop Lawrence's attorneys.
And, as those same attorneys tell the South Carolina Supreme Court in their latest papers, at some point ECUSA and ECSC are going to have to acknowledge the effect of that Court's All Saints Waccamaw decision on their property claims. By ruling that a trust could be created on a parish's real property only by a declaration of trust in the proper form that was signed by the owner of the property in question, the Court made the Dennis Canon a nullity in South Carolina.
Far from breaching his "fiduciary duty" by giving the individual parishes deeds which quitclaimed any trust interest of the Diocese in their properties, as ECSC claims, Bishop Lawrence was simply acknowledging what the Supreme Court of South Carolina had declared the law to be in that State.
ECSC and its parent would be well advised to follow in the same path, and cease their disgracefully punitive and wasteful litigation there. The utter lack of any probable chance for success in their claims should make Bishop vonRosenberg and Presiding Bishop Jefferts Schori liable to charges of breach of their fiduciary duties to their respective organizations: they are wasting their church's assets on a futile attempt to magnify the cost of leaving ECUSA for their opponents. That is not a proper use of a non-profit's assets, and the sooner they are held accountable by their own organizations, the better.