Charles v. nRosenberg v. Mark Lawrence , 849 F.3d 163 ( 2017 )

PUBLISHED
UNITED STATES COURT OF APPEALS
FOR THE FOURTH CIRCUIT
No. 15-2284
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: December 9, 2016 Decided: February 21, 2017
Before GREGORY, Chief Judge, MOTZ, Circuit Judge, and Richard D. BENNETT,
United States District Judge for the District of Maryland, sitting by designation.
Vacated and remanded by published opinion. Judge Motz wrote the opinion, in which
Chief Judge Gregory and Judge Bennett joined.
ARGUED: Thomas S. Tisdale, Jr., HELLMAN YATES & TISDALE, Charleston, South
Carolina, for Appellant. Henrietta U. Golding, MCNAIR LAW FIRM, Myrtle Beach,
South Carolina, for Appellee. ON BRIEF: Jason S. Smith, HELLMAN YATES &
TISDALE, Charleston, South Carolina, for Appellant. C. Alan Runyan, Andrew S.
Platte, SPEIGHTS & RUNYAN, Beaufort, South Carolina; Charles H. Williams,
WILLIAMS & WILLIAMS, Orangeburg, South Carolina; David Cox, BARNWELL
WHALEY PATTERSON & HELMS, Charleston, South Carolina, for Appellee.
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DIANA GRIBBON MOTZ, Circuit Judge:
This dispute between two clergymen — each claiming to be the Bishop of The
Protestant Episcopal Church in the Diocese of South Carolina — comes to us a second
time. Bishop Charles G. vonRosenberg initiated this action, seeking declaratory and
injunctive relief. He alleges that Bishop Mark J. Lawrence has violated the Lanham Act
by falsely advertising himself to be the Bishop of the Diocese of South Carolina. At
Bishop Lawrence’s request, the district court abstained in favor of related state court
proceedings, applying Brillhart v. Excess Insurance Co. of America, 316 U.S. 491
(1942), and Wilton v. Seven Falls Co., 515 U.S. 277 (1995). On appeal, we vacated that
order, concluding that Colorado River Water Conservation District v. United States, 424
U.S. 800 (1976), not Brillhart and Wilton, governs abstention decisions in actions where
the plaintiff seeks both declaratory and nondeclaratory relief. See vonRosenberg v.
Lawrence (vonRosenberg I), 781 F.3d 731 (4th Cir. 2015). On remand, the district court
has again abstained, staying the action pending the conclusion of the state proceedings.
For the reasons that follow, we must again vacate and remand for further proceedings.
I.
As discussed in our earlier opinion, Bishop vonRosenberg alleges that The
Protestant Episcopal Church in the United States (“the Episcopal Church”) removed
Bishop Lawrence from his position as the Bishop of the Diocese of South Carolina and
installed Bishop vonRosenberg in his place. Bishop vonRosenberg asserts that, despite
Bishop Lawrence’s removal, Bishop Lawrence continues to use the service marks,
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names, and symbols of the Diocese and continues to hold himself out as the Bishop of the
Diocese. For his part, Bishop Lawrence maintains that he was not removed from office.
He contends that the Diocese of South Carolina withdrew from the Episcopal Church and
now operates independently of the national organization. Accordingly, Bishop Lawrence
argues that, although he no longer serves as a Bishop of the Episcopal Church, he is still
the Bishop of the Diocese and thus may represent himself as such.
We briefly sketch the course of the state and federal actions that led to the
abstention orders in this case.
A.
On January 4, 2013, the Diocese of South Carolina and various churches and
parishes loyal to Bishop Lawrence filed suit in South Carolina state court against the
Episcopal Church. They argued that the Diocese had dissociated from the Episcopal
Church and sought “resolution of their real and personal property rights.” The property
at issue included the Diocese’s service marks, which the plaintiffs alleged the Episcopal
Church had used in violation of South Carolina law.
The Episcopal Church filed an answer and counterclaims, including claims of
trademark infringement and dilution under the Lanham Act. It also sought to add Bishop
Lawrence and others as individual counterclaim defendants. In September 2013, the state
court denied the request to add the proposed additional parties, and it repeatedly denied
similar requests throughout the litigation. Accordingly, neither Bishop Lawrence nor
Bishop vonRosenberg is a party to the state action. And no Lanham Act false advertising
claim against Bishop Lawrence is before the state court.
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On February 3, 2015, after more than a year of discovery and a fourteen-day bench
trial, the state court issued a final order in favor of the Diocese. It held that the Diocese
had validly dissociated from the Episcopal Church and therefore owned the property at
issue in the litigation, including the service marks. The state court permanently enjoined
the Episcopal Church and its agents from using any of the Diocese’s marks. The
Episcopal Church appealed to the South Carolina Supreme Court. That court heard oral
argument on September 23, 2015, but has issued no opinion to date.
B.
On March 5, 2013, two months after the Diocese filed suit in state court, Bishop
vonRosenberg filed this federal action. In it, Bishop vonRosenberg alleges that Bishop
Lawrence violated the Lanham Act by engaging in false advertising. Specifically, Bishop
vonRosenberg alleges that Bishop Lawrence’s continued assertions that he remains the
Bishop of the Diocese creates confusion as to who is the true Bishop. Bishop
vonRosenberg asserts that this impairs his ability to perform his ecclesiastical duties and
to communicate effectively on behalf of the Diocese. 1
1
We note that Bishop vonRosenberg now argues that, even if the Diocese of
South Carolina properly dissociated from the Episcopal Church and Bishop Lawrence is
the leader of that dissociated organization, Bishop Lawrence is still violating the Lanham
Act. Bishop vonRosenberg argues that Bishop Lawrence “is confusing and misleading
the public” into thinking he is still a Bishop of the Episcopal Church and that his services
are authorized by that church. This theory differs from that alleged in the complaint.
There, Bishop vonRosenberg pled that Bishop Lawrence falsely represented himself to be
the Bishop of the Diocese of South Carolina. Bishop vonRosenberg’s new argument
requires proving a separate set of facts than required to prove his original allegations. “It
is well-established that parties cannot amend their complaints through briefing or oral
advocacy.” S. Walk at Broadlands Homeowner’s Ass’n v. OpenBand at Broadlands,
LLC, 713 F.3d 175, 184 (4th Cir. 2013).
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In response, Bishop Lawrence asked the federal district court to abstain in favor of
the state proceeding. In August 2013 — before the state court denied the Episcopal
Church’s request to add Bishop Lawrence as an individual counterclaim defendant — the
district court granted Bishop Lawrence’s motion to abstain and dismissed the case. The
court based its decision on the broad discretion to decline jurisdiction over cases seeking
declaratory relief that the Brillhart/Wilton doctrine provides federal courts.
Bishop vonRosenberg appealed. In our previous opinion in this case, we held that
Colorado River, and not Brillhart/Wilton, supplied the abstention standard for claims
seeking both declaratory and nondeclaratory relief. vonRosenberg I, 781 F.3d at 735.
Colorado River establishes a more rigorous abstention standard than the Brillhart/Wilton
standard. Accordingly, we vacated the district court’s dismissal order and remanded for a
determination of whether “exceptional” circumstances justified abstention under the
Colorado River standard. Id. at 736.
On remand, the district court once again abstained, staying the federal proceeding
until the conclusion of the state action. Bishop vonRosenberg again timely appealed. 2
II.
“The rule is well recognized that the pendency of an action in the state court is no
bar to proceedings concerning the same matter in the Federal court having jurisdiction.”
2
It is no barrier to Bishop vonRosenberg’s appeal that the abstention order stays
rather than dismisses the case. Contrary to Bishop Lawrence’s suggestion, orders staying
federal suits under Colorado River are “final for purposes of appellate jurisdiction.”
Moses H. Cone Mem’l Hosp. v. Mercury Constr. Corp., 460 U.S. 1, 9 (1983).
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McClellan v. Carland, 217 U.S. 268, 282 (1910). However, under the Colorado River
doctrine, a federal court may abstain from exercising jurisdiction over a duplicative
federal action for purposes of “wise judicial administration.” 424 U.S. at 818. But a
court must apply Colorado River abstention “parsimoniously.” Chase Brexton Health
Servs., Inc. v. Maryland, 411 F.3d 457, 463 (4th Cir. 2005). This requires recognizing
that our task is not “to find some substantial reason for the exercise of federal jurisdiction
by the district court; rather, the task is to ascertain whether there exist ‘exceptional’
circumstances, the ‘clearest of justifications,’ that can suffice under Colorado River to
justify the surrender of that jurisdiction.” Moses H. Cone, 460 U.S. at 25–26.
In deciding whether such exceptional circumstances exist, a court must first
determine whether the federal and state actions are parallel. State and federal suits are
parallel only “if substantially the same parties litigate substantially the same issues in
different forums.” New Beckley Mining Corp. v. Int’l Union, United Mine Workers of
Am., 946 F.2d 1072, 1073 (4th Cir. 1991). It is not enough for parties in the state and
federal actions to be merely aligned in interest.
“[W]e have strictly construed the requirement of parallel federal and state suits,
requiring that the parties involved be almost identical.” Chase Brexton, 411 F.3d at 464.
For example, in McLaughlin, we found the state and federal actions not parallel where the
state suit involved claims by several corporations and the federal suit involved personal
claims by the president of those corporations. 955 F.2d at 934–35. We held Colorado
River abstention not proper even though resolution of the state suit might have had a res
judicata effect on some of the claims in the federal action. See id. at 934 n.*.
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In addition, even state and federal claims arising out of the same factual
circumstances do not qualify as parallel if they differ in scope or involve different
remedies. See, e.g., Chase Brexton, 411 F.3d at 464; New Beckley, 946 F.2d at 1074
(“[S]ome factual overlap does not dictate that proceedings are parallel.”). Rather, a
federal court may abstain under Colorado River only if it “concludes that the parallel
state-court litigation will be an adequate vehicle for the complete and prompt resolution
of the issues between the parties.” Moses H. Cone, 460 U.S. at 28 (emphasis added). If
there is any serious doubt that the state action would resolve all of the claims, “it would
be a serious abuse of discretion” to abstain. Id.
Finally, even if the federal and state suits are duplicative, Colorado River requires
a court to balance carefully several other factors before abstaining:
(1) whether the subject matter of the litigation involves property where the
first court may assume in rem jurisdiction to the exclusion of others; (2)
whether the federal forum is an inconvenient one; (3) the desirability of
avoiding piecemeal litigation; (4) the relevant order in which the courts
obtained jurisdiction and the progress achieved in each action; (5) whether
state law or federal law provides the rule of decision on the merits; and (6)
the adequacy of the state proceeding to protect the parties’ rights.
Chase Brexton, 411 F.3d at 463–64. A court must look at these factors holistically, “with
the balance heavily weighted in favor of the exercise of jurisdiction.” Moses H. Cone,
460 U.S. at 16.
With these principles in mind, we turn to the facts of the case at hand, reviewing
the decision to abstain for abuse of discretion. Chase Brexton, 411 F.3d at 464.
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III.
Bishop vonRosenberg argues that the district court’s application of Colorado
River abused its discretion because the state and federal actions are not parallel. We must
agree. 3
We recognize that our opinion in vonRosenberg I focused solely on determining
the appropriate abstention standard in cases asking for both declaratory and
nondeclaratory relief. We expressed no view as to the propriety of abstention under that
standard — the one articulated in Colorado River — and we did not analyze the
similarity between the state and federal cases.
Exceptional circumstances allowing for abstention under Colorado River do not
exist when state and federal cases are not duplicative, but merely raise similar or
overlapping issues. New Beckley, 946 F.2d at 1074. Moreover, “we must address
whether abstention is appropriate based upon the current posture of the state court
actions.” Gannett Co. v. Clark Constr. Grp., Inc., 286 F.3d 737, 745 n.6 (4th Cir. 2002)
(emphasis added).
Here, events occurring after the district court’s first abstention order and before its
second order make clear that the two actions are not parallel — the state action will not
resolve every claim at issue in the federal action. Neither Bishop vonRosenberg nor
Bishop Lawrence is a party to the state action; indeed, the state court has denied the
Episcopal Church’s request to add Bishop Lawrence as an individual counterclaim
3
Bishop Lawrence’s alternative contention — that the Anti-Injunction Act, 28
U.S.C. § 2283 (2012), requires us to affirm the district court’s abstention order — is
meritless.
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defendant. Furthermore, as the district court noted, the state court has held that the
Episcopal Church’s proposed Lanham Act claims were not before it. Nor is Bishop
vonRosenberg’s individual false advertising claim, alleging harms to his ecclesiastical
authority distinct from the harms of the Episcopal Church, before the state court. See
Dixon v. Edwards, 290 F.3d 699, 712–13 (4th Cir. 2002) (recognizing that interference
with the exercise of authority an individual possesses by virtue of his or her office as
Bishop creates a distinct injury from the injury to power or prestige experienced by the
church). Thus, because the state and federal cases involve different parties and different
claims, the district court abused its discretion under Colorado River by abstaining in
favor of the state court proceedings.
As the district court correctly recognized, however, the state and federal
proceedings do involve the resolution of the same underlying issue — whether the
Diocese validly withdrew from the Episcopal Church. Moreover, the district court may
well be correct that the resolution of the issues in the state court proceeding may have
collateral estoppel effect on claims asserted in this litigation. We leave the determination
of those questions to the district court.
IV.
Accordingly, we vacate the abstention order and remand for further proceedings
consistent with this opinion.
VACATED AND REMANDED
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