Charles v. nRosenberg v. Mark Lawrence

Opinion

PUBLISHED

UNITED STATES COURT OF APPEALS FOR THE FOURTH CIRCUIT

No. 14-1122

THE RIGHT REVEREND CHARLES G. VONROSENBERG, individually and in his capacity as Provisional Bishop of the Protestant Episcopal Church in the Diocese of South Carolina,

Plaintiff - Appellant,

v.

THE RIGHT REVEREND MARK J. LAWRENCE; JOHN DOES 1 - 10, being fictitious defendants whose names presently are unknown to Plaintiff and will be added by amendment when ascertained,

Defendants - Appellees.

Appeal from the United States District Court for the District of South Carolina, at Charleston. C. Weston Houck, Senior District Judge. (2:13-cv-00587-CWH)

Argued: January 28, 2015 Decided: March 31, 2015

Amended: April 17, 2015

Before MOTZ, GREGORY, and WYNN, Circuit Judges.

Vacated and remanded by published opinion. Judge Motz wrote the opinion, in which Judge Gregory and Judge Wynn joined.

ARGUED: Thomas S. Tisdale, Jr., HELLMAN YATES & TISDALE, Charleston, South Carolina, for Appellant. Charles Alan Runyan, SPEIGHTS & RUNYAN, Beaufort, South Carolina, for Appellees. ON BRIEF: Jason S. Smith, HELLMAN YATES & TISDALE, Charleston, South Carolina, for Appellant. Andrew S. Platte, SPEIGHTS & RUNYAN, Beaufort, South Carolina; Henrietta U. Golding, MCNAIR LAW FIRM, Myrtle Beach, South Carolina; Charles H. Williams, WILLIAMS & WILLIAMS, Orangeburg, South Carolina; David Cox, WOMBLE, CARLYLE, SANDRIDGE & RICE, LLP, Charleston, South Carolina, for Appellee The Right Reverend Mark J. Lawrence.

2 DIANA GRIBBON MOTZ, Circuit Judge:

This appeal arises from a dispute between two clergymen.

Each believes himself to be the proper leader of The Protestant

Episcopal Church in the Diocese of South Carolina. Bishop

Charles G. vonRosenberg brought this action against Bishop Mark

J. Lawrence, alleging two Lanham Act violations and seeking

declaratory and nondeclaratory relief. In response, Bishop

Lawrence asked the district court to abstain in favor of pending

related state court proceedings. Relying on the abstention

doctrine articulated in Brillhart v. Excess Insurance Co. of

America, 316 U.S. 491 (1942) and Wilton v. Seven Falls Co., 515

U.S. 277 (1995), which affords a federal court broad discretion

to stay declaratory judgment actions, the district court

dismissed the action. Because we conclude that Colorado River

Water Conservation District v. United States, 424 U.S. 800

(1976), which permits a federal court to abstain only in

“exceptional” circumstances, properly governs the abstention

decision in this action seeking both declaratory and

nondeclaratory relief, we vacate the dismissal order and remand

for further proceedings.

I.

Bishop vonRosenberg alleges that in December 2012, the

Disciplinary Board of The Protestant Episcopal Church in the

3 United States ousted Bishop Lawrence from his position as Bishop

of the Diocese of South Carolina. He further alleges that on

January 16, 2013, a Convention of the Diocese elected and

installed him as Bishop Lawrence’s replacement. Bishop

vonRosenberg claims that Bishop Lawrence, after his ouster, has

improperly continued to use the Church’s service marks and

falsely advertised himself as the leader of the Church. Bishop

Lawrence maintains that he was not removed from office. He

contends that Bishop vonRosenberg serves only as leader of an

unincorporated Episcopal association created to supplant the

Diocese. Each man views himself “as the Diocese’s veritable

head, and, thus, the rightful user of its service marks.”

vonRosenberg v. Lawrence, No. 13-587, slip op. at 4 (D.S.C. Aug.

23, 2013) (“Abstention Order”).

On January 4, 2013 (prior to the filing of this action and

before the Convention assertedly installed Bishop vonRosenberg

as Bishop Lawrence’s replacement), a faction of Bishop

Lawrence’s supporters filed suit in South Carolina state court

against the Episcopal Church. That action alleges violations of

service mark infringement and improper use of names, styles, and

emblems -- all “arising exclusively under South Carolina law.”

Id. The state court issued a temporary restraining order

preventing anyone other than Bishop Lawrence and those under his

direction from using these service marks and names.

4 On March 5, Bishop vonRosenberg filed the present action

against Bishop Lawrence seeking declaratory and injunctive

relief for two violations of the Lanham Act, 15 U.S.C. § 1114

and § 1125(a)(1)(A) (2012). Bishop vonRosenberg alleges that

Bishop Lawrence violated Section 43(a) of the Lanham Act, 15

U.S.C. § 1125(a), by the unauthorized use of four service marks

belonging to the Diocese of South Carolina and by advertising

falsely that “he is the true Bishop and ecclesiastical authority

of the Diocese.” On March 28, Bishop Lawrence asked the

district court to dismiss this federal action for lack of

standing or, in the alternative, asked the court to abstain and

stay this action pending resolution of the related state court

case.

That same day, Bishop vonRosenberg’s followers filed

answers and counterclaims in the state case, including trademark

infringement claims. On April 3, the vonRosenberg followers

removed the state action to federal court pursuant to 28 U.S.C.

§ 1441(a). Six weeks later, the district court remanded that

case to state court.

On August 23, 2013, the district court granted Bishop

Lawrence’s motion to abstain and dismissed the present action.

The district court held that Bishop vonRosenberg had

constitutional and prudential standing to assert individual

injuries against Bishop Lawrence for trademark infringement and

5 false advertising. Nevertheless, invoking its “broad discretion

to . . . decline to grant[] declaratory relief” under Brillhart

and Wilton, the district court granted Bishop Lawrence’s motion

to abstain. Abstention Order at 12 (quoting Wilton, 515 U.S. at

281). Bishop vonRosenberg timely noted this appeal. 1

II.

We “review the district court’s decision to surrender

jurisdiction for abuse of discretion.” New Beckley Mining Corp.

v. Int’l Union, United Mine Workers, 946 F.2d 1072, 1074 (4th

Cir. 1991). But “[w]hether a case satisfies the basic

requirements of abstention” constitutes “a legal question

subject to de novo review.” Myles Lumber Co. v. CNA Fin. Corp.,

233 F.3d 821, 823 (4th Cir. 2000).

Bishop vonRosenberg contends that the district court

applied the wrong criteria in determining to abstain in this

case. He maintains that the principles set forth in Colorado

River, rather than those in Brillhart and Wilton, should have

guided the abstention inquiry in this action seeking both

declaratory and nondeclaratory relief.

1 On February 3, 2015, the state trial court issued a judgment and final order in favor of Bishop Lawrence’s followers. Bishop vonRosenberg’s followers have noted an appeal of that order.

6 In Colorado River, the Supreme Court held that a federal

court may abstain from deciding non-frivolous, nondeclaratory

claims in favor of a parallel state suit for reasons of “wise

judicial administration” –- but only in “exceptional”

circumstances. 424 U.S. at 818. The Court explained that a

federal court’s “virtually unflagging obligation” to decide such

federal claims rendered its authority to stay a federal action

for these administrative reasons “considerably more limited than

the circumstances appropriate for abstention” under other

abstention standards. 2 Id. at 817-18; see also Moses H. Cone

Mem’l Hosp. v. Mercury Constr. Corp., 460 U.S. 1, 28 (1983).

Thus, a court must apply Colorado River abstention

“parsimoniously.” Chase Brexton Health Servs., Inc. v.

Maryland, 411 F.3d 457, 463 (4th Cir. 2005). Even if a parallel

state court suit exists, in deciding whether to abstain for that

reason, a court must balance several factors, “with the balance

heavily weighted in favor of the exercise of [federal]

jurisdiction.” Moses H. Cone Mem’l Hosp., 460 U.S. at 16. We

have identified six factors a court must consider in making this

decision. See Chase Brexton, 411 F.3d at 463-64.

2 The parties do not contend on appeal that any abstention standard other than that set forth in Colorado River or Brillhart/Wilton governs this case.

7 The district court did not consider any of these factors,

rather it simply found abstention proper under the

Brillhart/Wilton standard. Those cases recognize that courts

have broad discretion to abstain from deciding declaratory

judgment actions when concurrent state court proceedings are

under way. This wide latitude arises out of “federal courts[’]

unique and substantial discretion in deciding whether to declare

the rights of litigants.” Wilton, 515 U.S. at 286.

We have never expressly held which abstention standard

applies to a federal complaint, like the one at hand, which

asserts claims for both declaratory and nondeclaratory relief.

See VRCompliance LLC v. HomeAway, Inc., 715 F.3d 570, 571-72

(4th Cir. 2013). But, although we have recognized that some

circuits have taken other approaches to these mixed cases, we

have held that when a court is “required to entertain” a

nondeclaratory claim, it is “not at liberty to abstain from

entertaining the declaratory claims.” Great Am. Ins. Co. v.

Gross, 468 F.3d 199, 210 (4th Cir. 2006). Thus, “when a

plaintiff seeks relief in addition to a declaratory judgment,

such as damages or injunctive relief, both of which a court must

address, then the entire benefit derived from exercising

discretion not to grant declaratory relief is frustrated, and a

stay would not save any judicial resources.” Chase Brexton, 411

F.3d at 466 (emphasis in original).

8 To apply the Brillhart/Wilton standard to a federal

complaint seeking injunctive or monetary relief, which would

otherwise be governed by the Colorado River standard, would

ignore the very different justifications for the two abstention

standards. Colorado River permits a court to abstain only in

the rare circumstance in which the needs of judicial

administration are so pressing as to supersede the court’s

otherwise “virtually unflagging obligation” to exercise its

jurisdiction over that federal action. Colorado River, 424 U.S.

at 817 (emphasis added). Brillhart/Wilton, by contrast,

naturally flows from the broad discretion afforded courts to

entertain actions and award declaratory relief under the

Declaratory Judgment Act. The Brillhart/Wilton standard

therefore provides a poor fit for causes of action over which a

federal court generally must exercise jurisdiction -- namely,

claims for nondeclaratory relief. For those claims, “[o]nly the

clearest of justifications will warrant dismissal” in favor of

concurrent state court proceedings. Id. at 819.

We have previously taken note of these differences and

related considerations, including a federal court’s “unflagging

obligation” to adjudicate federal claims for injunctive or

monetary relief over which it has jurisdiction. See Gross, 468

F.3d at 210; Chase Brexton, 411 F.3d at 466. We now join

several of our sister circuits in holding that Colorado River,

9 not Brillhart/Wilton, must guide a court’s decision to abstain

from adjudicating mixed complaints alleging claims for both

declaratory and nondeclaratory relief. See New England Ins. Co.

v. Barnett, 561 F.3d 392, 396 (5th Cir. 2009); Village of

Westfield v. Welch’s, 170 F.3d 116, 124 n.5 (2d Cir. 1999).

Cf., United States v. City of Las Cruces, 289 F.3d 1170, 1180-82

(10th Cir. 2002).

A contrary approach would deprive a plaintiff of access to

a federal forum simply because he sought declaratory relief in

addition to an injunction or money damages. Such a penalty for

requesting a declaration seems especially unwarranted given that

nearly all claims, including those for damages or injunctive

relief, effectively ask a court to declare the rights of the

parties to the suit. To ensure that they have asked for all

available relief, plaintiffs commonly add a request for

declaratory relief in addition to requests for equitable or

monetary relief. We decline to adopt a rule that would

transform that thoroughness into a handicap.

The Colorado River standard applies to all mixed claims --

even when the “claims for coercive relief are merely ‘ancillary’

to [a party’s] request for declaratory relief.” Black Sea Inv.,

Ltd. v. United Heritage Corp., 204 F.3d 647, 652 (5th Cir.

2000). Indeed, “the only potential exception to this general

rule arises when a party’s request for injunctive relief is

10 either frivolous or is made solely to avoid application of the

Brillhart standard.” Id. 3 Nothing in the record in this case

indicates that Bishop vonRosenberg’s request for injunctive

relief is frivolous or designed to avoid application of the

Brillhart/Wilton standard. Accordingly, the Colorado River

standard governs the abstention question here.

III.

In considering whether to abstain in mixed cases, where a

plaintiff seeks both declaratory and nondeclaratory relief, a

federal court’s task “is not to find some substantial reason for

the exercise of federal jurisdiction [but] . . . to ascertain

whether there exist ‘exceptional’ circumstances . . . to justify

the surrender of that jurisdiction.” Moses H. Cone Mem’l Hosp.,

460 U.S. at 25-26 (quoting Colorado River, 424 U.S. at 813).

Because the district court did not apply this abstention

standard, we must vacate its dismissal order and remand for a

3 Riley v. Dozier Internet Law, P.C., 371 F. App’x 399 (4th Cir. 2010), an unpublished and therefore non-precedential opinion on which Bishop Lawrence nevertheless heavily relies, is such a case. There we concluded that “the perfunctory inclusion of nondeclaratory requests for relief does not suffice to remove a plaintiff from the ambit of the Brillhart/Wilton rule.” Id. at 404 n.2. For a declaratory judgment plaintiff may not obtain the benefit of “nearly mandatory jurisdiction under Colorado River[] simply by tossing in dependent or boilerplate nondeclaratory requests.” Id.

11 determination whether such “exceptional” circumstances are

present in this case. We express no view on that issue.

VACATED AND REMANDED