Tuesday, March 31, 2015

As Predicted: Federal Appeals Court Returns Trademark Action to SC District Court

In a published decision earlier today, the United States Court of Appeals for the Fourth Circuit reversed an earlier decision of Senior District Judge C. Weston Houck to abstain from exercising  jurisdiction over a case alleging infringement of trademarks under the Lanham Act. The case had been filed by Provisional Bishop Charles vonRosenberg of the Episcopal Church in South Carolina against Bishop Mark Lawrence of the Episcopal Diocese of South Carolina. The validity of its allegations turns upon the question of whether a diocese is free to disaffiliate from the Episcopal Church (USA).

ECUSA has now lost the argument over whether one of its dioceses may withdraw of its own volition from union with General Convention, without asking the latter body for permission. The courts of Illinois have issued a ruling contrary to ECUSA's position, and that decision is now final, or what attorneys call res judicata ["the matter has been adjudged"]. The term means that the Illinois decision is no longer subject to being changed or altered in any way.

The Illinois courts were diligent and extremely thorough in examining ECUSA's constitution and canons in minute detail. Not only could they find no restrictions upon dioceses' powers to amend their own governing documents so as to remove or change their affiliation with the Episcopal Church (USA), but they also could find no adjudicatory body of any kind within ECUSA that had been given the authority over dioceses, to tell them what they could and could not do.

(General Convention is only a legislative, not a judiciary, body -- it cannot decide a dispute with a diocese, or order a diocese to do anything, and has no means within the Church itself of enforcing its canons against a diocese. Inside the Church, and as regards a member diocese, the canons have mostly moral, rather than legal, force. And that is why ECUSA uniformly has been forced to seek relief against withdrawing dioceses in the secular courts.) 

The legal doctrine of res judicata will now prevent ECUSA's attorneys from continuing to argue to State and federal courts that its dioceses may not leave without permission. That is why the reversal today of Judge Houck's earlier decision will probably have little consequence over the long run. As I wrote in this earlier post:
[W]hat about the case argued last week before the federal Fourth Circuit Court of Appeals, in Richmond? Could that case still go forward?

I listened to the recording of the oral arguments in that case (mp3 file available for download using this link). Based on the questions asked of both sides, I think the Court of Appeals will most likely return the case to Senior District Judge Houck and direct him to use a different technical standard in deciding whether or not to abstain from exercising jurisdiction over the case (which was brought by Bishop vonRosenberg to address charges of federal trademark infringement by Bishop Lawrence and his Diocese).

Judge Houck will have the benefit (which the Court of Appeals may not) of reading Judge Goodstein's well-written opinion -- which decides the trademark issues under State law. Moreover, the injunction against Bishop vonRosenberg claiming to be the "Bishop of the Diocese of South Carolina" is now made final against him, and he cannot disobey it while the case is on appeal without getting the injunction first stayed (see Rule 62 [c], which you may read here). So he can no longer argue to the federal courts that he has the rights to that title unless he can get a South Carolina Appeals Court justice to stay the injunction, and I personally doubt he will be able to do so.

If this analysis correct, the federal case is dead unless and until ECUSA and ECSC manage to get a court to reverse Judge Goodstein's decision. And this Curmudgeon, at this point, just does not see how that could ever happen.
So there are now two very good reasons why ECUSA and its rump group should have no cause to celebrate their opportunity to go before Judge Houck once more with their claims of "infringement." The first is that the injunction against Bishop vonRosenberg remains in effect pending their appeal (which they have asked the South Carolina Supreme Court to hear directly, thus bypassing the Court of Appeals if the Supreme Court grants their request). If he is prevented from claiming to be the Episcopal Bishop of the Diocese of South Carolina, how can he say he owns the trademarks which have been adjudicated to belong to Bishop Lawrence and his Diocese?

Second, if the Episcopal Diocese of South Carolina had the right to withdraw from ECUSA, as now finally adjudged in the Illinois courts, then it has the right to keep its marks and trade names -- and ECUSA (and by extension ECSC, since the latter claims to be one of ECUSA's dioceses) are both now barred from arguing to the contrary.

Judge Houck thought he was doing Bishop vonRosenberg a favor by declining to accept jurisdiction of his suit. Now that he is required to revisit that decision, however, he might just proceed (in due course, after appropriate motions and briefing) to the merits, and add his own adverse decision to the ones in the State courts of Illinois, Texas and South Carolina. ECUSA has asked for a decision, and now it will get one (but not for several more months).


  1. If Judge Houck is unable to hear the case, citing reasons of poor health, would that make a difference. I woudn't think so but one never knows....

  2. It shouldn't matter which Judge gets the case on remand, Galletta -- the law of res judicata is well-known to all judges, and should be followed without any difficulty. Indeed, it makes their job that much the easier.

  3. With the res judicata, doesn't that drastically reduce the chances of any US court siding with ECUSA? Therefore, the largest form of income (e.g. selling property acquired in court) is hamstrung, and the exorbitant expenses of the national church will eventually bleed them into insolvency, and it is now merely a waiting game until budgetary forces solve this problem.