Charles v. nRosenberg v. Mark Lawrence , 781 F.3d 731 ( 2015 )

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
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 stayed
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 stay order and remand for further proceedings.
I.
Bishop vonRosenberg alleges that in December 2012, the
Disciplinary Board of The Protestant Episcopal Church in the
United States ousted Bishop Lawrence from his position as Bishop
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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. § 1114and § 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 stayed 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 false
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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.
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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).
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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,
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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
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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 stay 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
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