National Urban League, Inc. v. Urban League of Gre ( 2018 )

Case: 17-11469 Document: 00514650375 Page: 1 Date Filed: 09/20/2018
IN THE UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT
United States Court of Appeals
Fifth Circuit
No. 17-11469 FILED
Summary Calendar September 20, 2018
Lyle W. Cayce
Clerk
NATIONAL URBAN LEAGUE, INCORPORATED,
Plaintiff - Appellee
v.
URBAN LEAGUE OF GREATER DALLAS & NORTH CENTRAL TEXAS,
INCORPORATED,
Defendant - Appellant
Appeals from the United States District Court
for the Northern District of Texas
USDC No. 3:15-CV-3617
Before DAVIS, HAYNES, and GRAVES, Circuit Judges.
PER CURIAM:*
Urban League of Greater Dallas & North Central Texas, Inc.
(“Defendant”) appeals a grant of summary judgment against it on National
Urban League Inc.’s (“Plaintiff”) claims for breach of contract and trademark
infringement, and the denial of relief from that judgment. For the reasons set
forth below, we AFFIRM.
* Pursuant to 5TH CIR. R. 47.5, the court has determined that this opinion should not
be published and is not precedent except under the limited circumstances set forth in 5TH
CIR. R. 47.5.4.
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No. 17-11469
I. Background 1
Plaintiff is a civil rights organization with affiliates across the country.
To become affiliates, nonprofit organizations undergo rigorous screening and
enter an agreement that requires compliance with the Terms of Affiliation;
Affiliate Policies, Standards and Procedures Manual (“Affiliate Policies”); and
Urban League Movement Mission Statement. The agreement allows affiliates
to use the “Urban League” name and logo, which are registered trademarks
owned by Plaintiff. An organization that violates the agreement and fails to
cure the violations, however, risks losing its affiliate status, which entails no
longer using the “Urban League” name or logo.
In early 2014, Plaintiff became aware that Defendant, an affiliate since
1967, was experiencing corporate governance issues. These included problems
with properly invoicing for federal grant reimbursements, maintaining
adequate financial records, and completing its yearly audit. In response,
Plaintiff’s staff, led by its Vice President of Affiliate Services, proposed
corrective action in a written report of findings and provided on-site assistance
to Defendant in Dallas. According to Plaintiff, Defendant did not implement
any of the corrective actions.
Defendant’s troubles continued. In September 2014, its CEO retired.
Although it hired an interim CEO in October 2014, it terminated this
individual in January 2015 only to rehire the same person two months later
after several board members resigned in March 2015. Meanwhile, several
funding sources suspended the affiliate’s grants, including the United Way of
Dallas, a state agency, and a federal agency.
1Where the parties disagree on the facts, the recitation here sets forth facts in the
light most favorable to Defendant, the non-movant.
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Plaintiff developed another corrective action plan in February 2015. The
plan involved Defendant creating advisory and transition boards made up of
certain specific individuals, using recommended volunteer accountants, and
cutting staff and third-party services to reduce costs. According to Plaintiff,
Defendant again did not implement any of the corrective actions.
In late March 2015, Plaintiff’s Chief Executive Officer sent Defendant a
“Notice of Default & Opportunity to Cure,” notifying Defendant of specific
violations causing it to be in material breach of the parties’ affiliation
agreement and, therefore, on “non-compliance status” and subject to
disaffiliation. Several weeks later, in April 2015, Plaintiff’s CEO sent
Defendant a “Notice of Non Compliance,” listing a number of violations that
caused Defendant to be in non-compliance and stating that Plaintiff’s
management recommended disaffiliation. The notice also set a hearing at the
national offices where the parties could “address these serious concerns.”
After the hearing in early May, Plaintiff provided Defendant with
another corrective action plan, which Defendant rejected. Plaintiff
subsequently sent Defendant two more notices, in June and July, setting
deadlines for Defendant to regain compliance, and then another notice after
the second deadline passed stating that it was recommending disaffiliation to
its board of trustees.
On July 23, 2015, Plaintiff sent a “Notice of Disaffiliation” to Defendant,
informing it of the board’s vote to disaffiliate and advising it to stop using the
“Urban League” name and logo. Defendant appealed to Plaintiff’s appeals
committee, which affirmed the disaffiliation, concluding that Defendant had
violated the parties’ affiliation agreement by, inter alia, failing to pay affiliate
dues and prepare required financial reports.
In November 2015, Plaintiff filed the instant lawsuit, alleging that
Defendant was still using the “Urban League” name and logo despite being
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disaffiliated. It alleged breach of contract, trademark infringement and
dilution under federal and state law, and unfair competition under federal and
state law. The district court granted summary judgment on the breach of
contract, trademark infringement, and unfair competition claims; it dismissed
the dilution claims, which Plaintiff said it would withdraw if it won summary
judgment on the other claims.
Defendant subsequently moved for reconsideration under Federal Rule
of Civil Procedure 60(b), and the district court denied the motion. The district
court granted Plaintiff’s request for contract damages and a permanent
injunction prohibiting Defendant from using the “Urban League” name and
logo. Defendant timely appealed.
II. Discussion
A. Rule 60(b) Motion and Summary Judgment
Defendant argues the district court abused its discretion by denying its
Rule 60(b) motion seeking relief from the grant of summary judgment against
it. It argues summary judgment was improper because the evidence raised a
material fact issue as to whether Plaintiff failed to follow the proper procedure
for discontinuing the parties’ affiliation and, therefore, whether Defendant was
still entitled to use the “Urban League” name and logo. 2
Under the Affiliate Policies, before taking disciplinary action for
compliance failures, Plaintiff’s Department of Affiliate Services ordinarily
2 We review the denial of a Rule 60(b) motion for abuse of discretion and a grant of
summary judgment de novo. Provident Life & Accident Ins. Co. v. Goel, 274 F.3d 984, 997
(5th Cir. 2001); Reingold v. Swiftships, Inc., 126 F.3d 645, 646 (5th Cir. 1997). To prevail on
its breach of contract claim, Plaintiff had to show “(1) the existence of a valid contract; (2)
performance or tendered performance by the plaintiff; (3) breach of the contract by the
defendant; and (4) damages sustained by the plaintiff as a result of the breach.” Smith Int’l,
Inc. v. Egle Grp., LLC, 490 F.3d 380, 387 (5th Cir. 2007) (quoting Valero Mktg. & Supply Co.
v. Kalama Int’l, L.L.C., 51 S.W.3d 345, 351 (Tex. App.—Houston [1st Dist.] 2001, no pet.)).
Here, the parties only dispute the second element.
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must notify an affiliate of the failures with a “Notice of Noncompliance.”
Defendant argues that Plaintiff violated this policy because Plaintiff’s CEO
initially sent a “Notice of Default & Opportunity to Cure,” and therefore the
notice lacked the proper title and was sent from the wrong person. 3 The
undisputed evidence shows otherwise.
The Affiliate Policies state that “[t]he procedure by which affiliates who
are out of compliance are brought back into compliance shall remain
sufficiently flexible to accommodate the various facts and circumstances.”
Serious corporate governance issues would justify Plaintiff’s decision to have
its CEO, rather than a departmental executive, send notice of noncompliance,
especially where an affiliate has already failed to comply with corrective action
measures proposed by Plaintiff’s Vice President of Affiliate Services. The
notice, though titled “Notice of Default & Opportunity to Cure,” informed
Defendant that it was on “non-compliance status” and listed specific
compliance problems and steps required to resolve them. The minor
discrepancy in the notice’s title is, therefore, at best a “scintilla of evidence,”
which is not enough to create a genuine issue of material fact as to whether
Plaintiff followed the “flexible” disaffiliation procedure established in the
Affiliate Policies. See Little v. Liquid Air Corp., 37 F.3d 1069, 1075 (5th Cir.
1994) (en banc) (per curiam) (internal quotation marks omitted). This is
3 Defendant also argues Plaintiff gave the initial notice to the media as a “punitive”
measure. Insofar as Defendant argues that such action violated the Affiliate Policies because
it was “disciplinary action” that Plaintiff took without first providing a reasonable
opportunity to cure the compliance problems, this argument also fails. As the district court
concluded, Defendant has not identified competent evidence supporting its claim that
Plaintiff provided the notice to the news media, relying instead on the existence of a news
story that does not identify the story’s source. Moreover, “beyond a conclusory assertion,”
Defendant “makes no argument and cites no authority” for its assertion that such action
counts as the type of “disciplinary action” contemplated by the Affiliate Policies; it has
therefore waived this argument due to inadequate briefing. See SEC v. Life Partners
Holdings, Inc., 854 F.3d 765, 778 n.7 (5th Cir. 2017).
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particularly true here, given that Plaintiff sent two other notices titled “Notice
of Non Compliance,” which gave Defendant further opportunity to avoid
disaffiliation.
Defendant also argues Plaintiff improperly disaffiliated it without
providing evidence that Plaintiff’s board of trustees voted to disaffiliate. This
argument lacks merit. The Affiliate Policies require only that Plaintiff notify
an affiliate when the board has decided to disaffiliate, which Plaintiff did. The
“Notice of Disaffiliation” states that the board approved a resolution
authorizing disaffiliation, and Plaintiff provided an affidavit from its Vice
President of Affiliate Services stating that the vote occurred, as well as a dated
copy of the resolution. This evidence is sufficient to persuade a reasonable fact-
finder that the vote occurred, and Defendant has identified no evidence
creating a genuine dispute of material fact on the issue. See Int’l Shortstop,
Inc. v. Rally’s, Inc., 939 F.2d 1257, 1264–65 (5th Cir. 1991).
Defendant’s argument that Plaintiff admitted in its complaint to
withholding $200,000 from Defendant also lacks merit. Plaintiff alleged in its
complaint that while visiting the Defendant’s office, it uncovered “$200,000 in
payable expenses for which no invoice for payment had been sent” by the
affiliate. That statement is not an admission that Plaintiff owes funds to
Defendant but, rather, an allegation that the affiliate failed to properly seek
reimbursement for reimbursable expenses.
As Defendant has not raised any genuine issues of material fact as to
whether Plaintiff breached the parties’ affiliation agreement, it has not shown
that summary judgment was improperly granted and, therefore, the district
court did not abuse its discretion in denying Defendant’s Rule 60(b) motion
seeking relief from the judgment.
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B. Scope of the Injunction
Defendant next argues that, even if summary judgment was proper, the
district court’s injunction is overbroad because it enjoins Defendant from using
“Urban League” in its corporate name for state registration purposes, as
opposed to only enjoining use of it in Defendant’s “trade name.” 4 We review
the grant of a permanent injunction for abuse of discretion. E. & J. Gallo
Winery v. Spider Webs Ltd., 286 F.3d 270, 279 (5th Cir. 2002).
The Terms of Affiliation state that “[i]n the event of disaffiliation, the
former [a]ffiliate shall promptly cease to use in any way the phrase ‘Urban
League’ or brand service logo as part of its name or in connection with its
operation.” Defendant admitted below, and does not dispute on appeal, that
the parties’ agreement bars use of Plaintiff’s trademarks after proper
disaffiliation. The district court did not abuse its discretion in issuing an
injunction that enforces the parties’ agreement. 5 See ITT Educ. Servs. v. Arce,
533 F.3d 342, 344, 348–49 (5th Cir. 2008).
C. Protective Order
Defendant lastly argues the district court abused its discretion in
denying its motion for a protective order and to quash notices of depositions.
“[A] district court’s discretion in discovery matters will not be disturbed
ordinarily unless there are unusual circumstances showing a clear abuse.”
Marathon Fin. Ins., Inc., RRG v. Ford Motor Co., 591 F.3d 458, 469 (5th Cir.
2009) (quoting Seiferth v. Helicopteros Atuneros, Inc., 472 F.3d 266, 270 (5th
Cir. 2006)).
4 Defendant is presently doing business as Urban Community Center.
5 Defendant’s reliance on Exxon Corp. v. Oxxford Clothes, Inc., 109 F.3d 1070 (5th Cir.
1997), is inapt. In that case, we rejected a trademark dilution claim that sought to enjoin a
party from using its own registered trademark. See Exxon, 109 F.3d at 1084. Here,
Defendant does not contend that it ever registered the “Urban League” name as owner of that
trademark.
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Defendant filed the motion at 7:30 p.m. the day before the scheduled
deposition of Defendant’s chairman, Edward R. Smith Jr., and two days before
a scheduled Rule 30(b)(6) 6 deposition. Defendant claimed that Smith could
not make the deposition because he was attending a funeral the day before. It
also said it did not have a corporate representative who could testify to the
proposed Rule 30(b)(6) topics and objected to those topics on various grounds.
Defendant provided no explanation for why Smith could not arrange his travel
plans to attend the deposition, given that he had ample notice of it, the funeral
was the day before the deposition, and Plaintiff agreed to delay the deposition
from the morning until the afternoon to allow for travel. Defendant also did
not explain why it waited to object to the Rule 30(b)(6) topics until two days
before the deposition was to occur. We conclude that the district court did not
abuse its discretion in denying the motion. See Marathon, 591 F.3d at 469; In
re Terra Int’l, Inc., 134 F.3d 302, 306 (5th Cir. 1998) (per curiam) (explaining
that the burden is on the party seeking a protective order “to show the
necessity of its issuance” (quoting United States v. Garrett, 571 F.2d 1323, 1326
n.3 (5th Cir. 1978))).
AFFIRMED.
6 See FED. R. CIV. P. 30(b)(6).
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