Antitrust Law Daily Wrap Up, ADVERTISING—4th Cir.: Abstention order vacated, remanded for “exceptional circumstances” inquiry in Episcopal Bishop dispute, (Apr 2, 2015)

By Greg Hammond, J.D.

The federal district court in Charleston, South Carolina, improperly abstained from adjudicating Lanham Act claims, seeking declaratory and nondeclaratory relief, in a case where two clergymen disagreed about which one of them was the proper leader of the Protestant Episcopal Church in the Diocese of South Carolina. The U.S. Court of Appeals in Richmond, Virginia, determined that the proper abstention standard, in cases where federal complaints allege claims for both declaratory and nondeclaratory relief, is whether “exceptional circumstances” exist that justify the surrender of jurisdiction (vonRosenberg v. Lawrence, March 31, 2015, Motz, D.).

Bishop Charles G. vonRosenberg filed suit against Bishop Mark J. Lawrence, alleging false advertising and trademark infringement under the Lanham Act and seeking declaratory and nondeclaratory relief. Specifically, vonRosenberg alleges that he was elected and installed as Provisional Bishop of the Protestant Episcopal Church in the Diocese of South Carolina after Bishop Lawrence was purportedly ousted from his position as Bishop of the Diocese of South Carolina. vonRosenberg further alleges that Bishop Lawrence improperly continued to use the Church’s service marks and falsely advertised himself as the leader of the Church.

Conversely, Bishop Lawrence argued that he was not removed from office and that Bishop vonRosenberg serves as leader of an unincorporated Episcopal association created to supplant the Diocese. After supporters of Bishop Lawrence filed suit in South Carolina state court against the Episcopal Church, Bishop Lawrence requested that the federal district court abstain in favor of the pending related state court proceedings. The district court stayed the action, using a broad discretion standard to decline declaratory relief. Bishop vonRosenberg timely appealed.

The proper abstention standard to apply, in federal cases where both declaratory and nondeclaratory relief is sought, is whether “exceptional circumstances” exist that justify the surrender of federal jurisdiction, pursuant to the Supreme Court’s decision in Colorado River Water Conservation District v. U.S., 424 U.S. 800 (1976). A contrary approach would strip a plaintiff of access to a federal forum by simply seeking declaratory relief in addition to an injunction or money damages, the appeals court reasoned. Because the district court failed to consider any of the six factors used to determine whether “exceptional circumstances” exist, the abstention order was vacated and remanded for such a determination.

The case number is 14-1122.

Attorneys: Thomas S. Tisdale, Jr. (Hellman Yates & Tisdale) for Charles G. vonRosenberg. Charles Alan Runyan (Speights & Runyan) for Mark J. Lawrence.

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