Global Mail Limited v. US Postal Service

PUBLISHED
UNITED STATES COURT OF APPEALS
FOR THE FOURTH CIRCUIT
GLOBAL MAIL LIMITED,
Plaintiff-Appellant,
v.
UNITED STATES POSTAL SERVICE,
No. 97-1146
Defendant-Appellee.
UNITED PARCEL SERVICE,
INCORPORATED; AIR COURIER
CONFERENCE OF AMERICA,
Amici Curiae.
Appeal from the United States District Court
for the Eastern District of Virginia, at Alexandria.
Albert V. Bryan Jr., Senior District Judge.
(CA-96-1644-A)
Argued: July 14, 1997
Decided: April 23, 1998
Before MURNAGHAN, Circuit Judge, PHILLIPS,
Senior Circuit Judge, and BRITT, Senior United States District Judge
for the Eastern District of North Carolina, sitting by designation.
_________________________________________________________________
Vacated and remanded by published opinion. Senior Judge Phillips
wrote the opinion, in which Judge Murnaghan and Senior Judge Britt
joined.
_________________________________________________________________
COUNSEL
ARGUED: Edward Alan Pennington, MORGAN & FINNEGAN,
L.L.P., Washington, D.C., for Appellant. John Crawford Hoyle,
Appellate Staff, Civil Division, UNITED STATES DEPARTMENT
OF JUSTICE, Washington, D.C., for Appellee. ON BRIEF: Frank
W. Hunger, Assistant Attorney General, Helen F. Fahey, United
States Attorney, Barbara C. Biddle, Appellate Staff, Civil Division,
UNITED STATES DEPARTMENT OF JUSTICE, Washington,
D.C., for Appellee. Hill B. Wellford, Jr., Wood W. Lay, HUNTON
& WILLIAMS, Richmond, Virginia; John E. McKeever, Kaethe B.
Schumacher, SCHNADER, HARRISON, SEGAL & LEWIS, Phila-
delphia, Pennsylvania, for Amicus Curiae UPS. L. Peter Farkas,
Michael H. Selter, Mary Boney Denison, FARKAS & MANELLI,
P.L.L.C., Washington, D.C., for Amicus Curiae Air Courier Confer-
ence.
_________________________________________________________________
OPINION
PHILLIPS, Senior Circuit Judge:
Global Mail Limited, a private courier service, brought this action
alleging that the United States Postal Service (USPS) had violated the
Lanham Act in advertising its international mailing service under the
name "Global Priority Mail." The district court determined that USPS
was immune from Lanham Act suits through its retained sovereign
immunity, and dismissed the suit. We reverse.
I
Global Mail Limited (Global), an enterprise primarily engaged in
the business of sending letters, packages and parcels to recipients in
other countries, entered the international mailing service market in
1987. Since that time it has continuously used the names "Global" and
"Global Mail," and a design including the name"Global Mail Ltd.,"
in connection with its services. Global has published these marks and
registered the design mark in the United States Patent and Trademark
Office on March 7, 1989. Headquartered in Vienna, Virginia, Global
has approximately 170 employees and totaled $32 million in service
volume in 1996. Until March 1996, the United States Postal Service
(USPS) operated an international mailing service under the name
"World Post" that served as a direct competitor to Global's services.
2
That month, USPS changed the name of its international mailing ser-
vice to "Global Priority Mail," and embarked on a widespread adver-
tising campaign prominently featuring the new name.
Global filed a complaint in the Eastern District of Pennsylvania in
June 1996, alleging violations of the Lanham Act ("Act"), 15 U.S.C.
§§ 1051-1127 (1994). After the case was transferred to the Eastern
District of Virginia, USPS moved to dismiss the complaint alleging
sovereign immunity from suit under the Act. The district court
granted the motion and issued a four-page memorandum opinion.
Despite the alleged fact that USPS has filed for or registered 82 trade-
marks under the Lanham Act, and has filed at least six cancellation
or opposition proceedings to prevent competitors from registering
marks too similar to their own, the court found that a section of the
Postal Reorganization Act, 39 U.S.C. § 409(c) (1994), limits USPS's
tort liability to only those tort claims that are available under the Fed-
eral Tort Claims Act (FTCA), 28 U.S.C. §§ 2671-80 (1994). The
court opined that because Lanham Act claims are tort claims, but fed-
erally created, they are not viable under the FTCA and that USPS
therefore retains its sovereign immunity as to such claims. Said the
court: "This result seems harsh, particularly in light of the Postal Ser-
vice's own activity in seeking protection of its own trademarks.
Harshness resulting from sovereign immunity, however, is not new,
and the court cannot as a matter of equity override what it concludes
to be a valid sovereign immunity defense." J.A. 218. The district court
therefore dismissed Global's action, and this appeal followed.
II
Challenging the district court's dismissal of its claim, Global
makes two related contentions: (1) that the Postal Reorganization Act
(PRA) included within its broad waiver of USPS's sovereign immu-
nity all tort claims, and not just those cognizable under the FTCA;
and (2) that USPS is a "person" capable of being sued under the Lan-
ham Act. Reviewing de novo the district court's dismissal of the com-
plaint for lack of subject matter jurisdiction, see White v. United
States, 53 F.3d 43, 45 (4th Cir. 1995) (citing Ahmed v. United States,
30 F.3d 514, 516 (4th Cir. 1994)), we take these issues in turn.
3
A.
As a governmental entity, USPS is entitled to sovereign immunity
unless Congress waives that immunity and authorizes consent to suit.
Sovereign immunity deprives a court of jurisdiction to hear a case.
See FDIC v. Meyer, 510 U.S. 471, 475 (1994); United States v.
Mitchell, 463 U.S. 206, 212 (1983). Congress has enacted a general
waiver of USPS's sovereign immunity through the Postal Reorganiza-
tion Act of 1970 (PRA). Specifically, § 401(1) provides that USPS
shall have the power "to sue and be sued in its official name," 39
U.S.C. § 401(1), and "to settle and compromise claims by or against
it." 39 U.S.C. § 401(8). And, Section 409(c) of the PRA, under the
title "Suits by and against the Postal Service," provides: "The provi-
sions of chapter 171 and all other provisions of title 28 relating to tort
claims shall apply to tort claims arising out of activities of the Postal
Service." "Chapter 171" refers to the FTCA which was itself enacted
to waive the federal government's sovereign immunity for certain tort
suits.
Meanwhile, the FTCA includes the provision, "The authority of
any federal agency to sue and be sued in its own name shall not be
construed to authorize suits against such federal agency on claims
which are cognizable under section 1346(b) of this title, and the reme-
dies provided by this title in such cases shall be exclusive." 28 U.S.C.
§ 2679(a). This subsection was intended to"place torts of ``suable'
agencies . . . upon precisely the same footing as torts of ``nonsuable'
agencies." H.R. Rep. No. 1287, 79th Cong., 1st sess., 6 (1945)
(quoted in Loeffler v. Frank, 486 U.S. 549, 562 (1988)). In other
words, those agencies that have been given the general authority to
sue and be sued, and therefore have lost their general sovereign
immunity, remain subject to the terms of the FTCA for those claims
cognizable under that Act. See FDIC v. Meyer, 510 U.S. 471, 476-79
(1994).
The question then is the intended interrelationship of these PRA
and FTCA provisions in defining the scope of the USPS's sovereign
immunity from Lanham Act claims.
Although § 401(1) of the PRA is a general waiver of USPS's sov-
ereign immunity, see Franchise Tax Bd. of California v. USPS, 467
4
U.S. 512, 519 (1984), it is axiomatic that waivers of sovereign immu-
nity are not necessarily total. See Ruckelshaus v. Sierra Club, 463
U.S. 680, 685-86 (1983). USPS contends that § 409(c) of the PRA,
making "[t]he FTCA provisions relating to tort claims" applicable to
tort claims "arising out of activities of the Postal Service," limits
USPS's tort liability to only those torts cognizable under the FTCA.
It is undisputed that the FTCA does not provide a waiver of sovereign
immunity for torts created under federal law, but only for those torts
cognizable under state law. As the Supreme Court recently noted, "to
be actionable under [the FTCA], a claim must allege . . . that the
United States ``would be liable to the claimant' as ``a private person'
``in accordance with the law of the place where the act or omission
occurred.' . . . Indeed, we have consistently held that § 1346(b)'s ref-
erence to the ``law of the place' means law of the State -- the source
of substantive liability under the FTCA." Meyer, 510 U.S. at 477-78
(quoting 28 U.S.C. § 1346(a)).
The Lanham Act creates in essence a federal statutory tort, derived
from the common law tort of unfair competition. See, e.g., Bauer
Lamp Co., Inc. v. Shaffer, 941 F.2d 1165, 1170 (11th Cir. 1991);
Homeowners Group, Inc. v. Home Mktg. Specialists, Inc., 931 F.2d
1100, 1105 & n.1 (6th Cir. 1991); Toro Co. v. R. & R. Products Co.,
787 F.2d 1208, 1214 (8th Cir. 1986). And, because the FTCA does
not provide a cause of action for federal torts, federal agencies typi-
cally cannot be sued under the FTCA for Lanham Act violations. See
U.S. Gold & Silver Invs., Inc. v. United States ex rel. Director, U.S.
Mint, 885 F.2d 620, 621 (9th Cir. 1989) ("The sole basis for plain-
tiff's claim alleged in this complaint . . . is violation of . . . the Lan-
ham Act. The FTCA is not intended to encompass such a claim."); see
also Beneficial Consumer Discount Co. v. Poltonowicz , 47 F.3d 91,
97 n.5 (3d Cir. 1995) (noting that "a showing of a violation of federal
law will not alone suffice to qualify a claim under the FTCA's
waiver"); Goldstar (Panama) S.A. v. United States, 967 F.2d 965, 969
(4th Cir. 1992) (same).
Global responds that § 409(c) does not limit§ 401(1)'s broad
waiver of immunity to only those torts cognizable under the FTCA.
Each of the circuits to have considered the issue has concluded that
§ 409(c) serves as a substantive limit on the types of suits to which
USPS must submit. In the context of an alleged "constitutional tort"
5
under Bivens v. Six Unknown Fed. Narcotics Agents, 403 U.S. 388
(1971), the Eleventh Circuit held simply, "Section 409(c) applies the
[FTCA] to the Postal Service. Any tort claim against the USPS must
be cognizable under the FTCA." McCollum v. Bolger, 794 F.2d 602,
608 (11th Cir. 1986). In Insurance Co. of North America v. USPS,
675 F.2d 756, 758 (5th Cir. 1982), USPS was sued for misplacing a
bag containing $100,000 in the mails. The court observed that the
FTCA contained a provision that sovereign immunity was not waived
"with respect to claims involving negligent handling of the mails." Id.
The court then held that USPS's waiver of sovereign immunity under
§ 401(1) was "not complete; it is explicitly conditioned by § 409(c),
in which Congress has stated that in actions sounding in tort, the rem-
edies and restrictions of the FTCA shall apply." Id. (citations omit-
ted). See also Houston v. USPS, 823 F.2d 896, 898-99 n.1 (5th Cir.
1987) (citing McCollum and Insurance Co. and observing that Con-
gress "condition[ed] the waiver of immunity for the USPS on the pro-
visions of the FTCA"); Active Fire Sprinkler Corp. v. USPS, 811 F.2d
747, 753 (2d Cir. 1987) (noting in dictum in decision involving Miller
Act claim that by "incorporat[ing] the provisions of the [FTCA] . . .
Congress explicitly has narrowed the waiver of immunity contained
in the ``sue or be sued' clause of section 401(1)") (citations omitted).*
Also in the context of a Bivens-type claim, the Ninth Circuit held
that the "``sue and be sued' language of the Postal Service's charter
should not be interpreted to enlarge the waiver of sovereign immunity
specified by the FTCA." Pereira v. USPS, 964 F.2d 873, 876 (9th Cir.
1992). That court, however, relied on the FTCA's§ 2679(a) and held
that for those suits for which it provided a cause of action under the
FTCA, "``sue and be sued' agencies would be subject to suit only to
the same limited extent as agencies whose sovereign immunity from
tort suits was being waived for the first time.'" Id. at 877 (quoting
Loeffler, 486 U.S. at 562) (internal quotations omitted)).
_________________________________________________________________
*In an unpublished opinion we have held, "Although [§ 401(1)] autho-
rizes the USPS ``to sue and be sued in its official name,' this Act does
not completely eviscerate sovereign immunity. Rather, [§ 409(c)]
restricts this waiver to tort claims cognizable under the [FTCA]."
Johnson v. Runyon, No. 95-3083, 1996 WL 405218, at *1 (4th Cir.
July 19, 1996) (citing Insurance Co.). As an unpublished opinion,
though, this case holds no precedential value. See 4th Cir. R. 36(c).
6
While acknowledging these decisions, Global and amici insist the
legal landscape shifted dramatically with the Supreme Court's deci-
sion in FDIC v. Meyer, 510 U.S. 471 (1994). There the Court consid-
ered another Bivens-type constitutional tort claim brought directly
against the Federal Savings and Loan Insurance Corporation (FSLIC).
The Court noted that Congress had empowered the agency in 1934 to
sue and be sued, effecting a "broad" waiver of sovereign immunity.
See id. at 475. When Congress passed the FTCA, it included
§ 2679(a) to place "suable" and "nonsuable" agencies on precisely the
same footing "on claims which are cognizable" under the FTCA. Id.
Recalling its holdings that constitutional torts are not "cognizable"
under the FTCA, the Court then held that plaintiffs were not limited
by the FTCA's restrictions on federally-created tort claims and could
properly bring such a claim against an agency whose sovereign
immunity had been waived through a "sue-and-be-sued" clause. Id. at
477-78. The Court specifically rejected the argument made by the
Federal Deposit Insurance Corporation (FDIC, FSLIC's successor)
that § 2679(a) evinced an intent for all agencies, suable and nonsu-
able, to be treated equally with regard to tort claims, that all claims
sounding in tort were claims "cognizable" under § 1346(b), and that
all federal agencies were therefore immune from suit for claims that
could not be brought under the FTCA. Id.
Instead, the Court held that the FSLIC's broad "sue-and-be-sued"
clause constituted a waiver of sovereign immunity for all torts, even
federal torts not cognizable under § 1346(b) of the FTCA. "[S]ue-and-
be-sued clauses cannot be limited by implication unless there has
been a ``clea[r] show[ing] that certain types of suits are not consistent
with the statutory or constitutional scheme, that an implied restriction
of the general authority is necessary to avoid grave interference with
the performance of a governmental function, or that for other reasons
it was plainly the purpose of Congress to use the sue-and-be-sued
clause in a narrow sense.'" Id. at 480 (quoting Federal Housing
Administration v. Burr, 309 U.S. 242, 245 (1940)). "Absent such a
showing, agencies ``authorized to sue and be sued are presumed to
have fully waived immunity.'" Id. at 481 (quoting International Pri-
mate Protection League v. Administrators of Tulane Ed. Fund, 500
U.S. 72, 86 n.8 (1991)).
Citing Burr, Franchise Tax Board, and Loeffler (the latter two
involving USPS), the Court noted that "the claimants sought to sub-
7
ject the agencies to a particular suit or incident of suit to which pri-
vate businesses are amenable as a matter of course." Id. at 481. In
such a situation, "it was only natural for the Court to look to the liabil-
ity of private businesses for guidance. It stood to reason that the
agency could not escape the liability a private enterprise would face
in similar circumstances." Id. at 482. Finding no plain evidence of
Congress's intention to limit the waiver of FSLIC's sovereign immu-
nity, the court held that it was not immune as a sovereign to federal
torts, though the Court ultimately found that the plaintiff had no cause
of action.
The two lower federal courts that have considered USPS's liability
under the Lanham Act in light of Meyer have concluded that § 401(1)
operates as a waiver of the USPS sovereign immunity. In United
States v. Quick International Courier, Inc., 131 F.3d 770 (8th Cir.
1997), the court concluded that Congress's broad grant of authority
to sue and be sued was sufficient to evidence an intent by Congress
to waive the USPS' sovereign immunity for suits not cognizable
under the FTCA. The court rejected the USPS' argument that § 409
operated to preclude § 401's effect as a broad waiver of immunity,
concluding instead that "[n]othing in § 409(c) suggests that it
intended to forbid recovery against the Postal Service for tort claims
that are beyond the reach of the Federal Tort Claims Act." Id. at 775.
Similarly, in Federal Express Corp. v. USPS, 959 F. Supp. 832
(W.D. Tenn. 1997), the court held that the USPS was subject to Lan-
ham Act claims in the wake of Meyer. Meyer's holding that agencies
with "sue and be sued" clauses could be liable for federally-created
tort claims and other claims not cognizable under the FTCA, along
with the PRA's statutory construction and legislative history, con-
vinced the court that § 409(c) did not serve to limit § 401(1)'s waiver
of sovereign immunity to only those tort cases that could be brought
under the FTCA. Rather, § 409(c) only limited putative plaintiffs
suing USPS to remedies under the FTCA for those claims cognizable
under the FTCA. See id. at 835.
We agree with the holdings of Quick and Federal Express, but
must concede that Meyer does not flatly dictate them. USPS is correct
in observing that the FSLIC's waiver of sovereign immunity did not
include a provision comparable to § 409(c) of the PRA. Nevertheless
8
Meyer does explain that the FTCA does not serve as the only means
by which a federal agency can be sued in tort, and torts that are not
cognizable under the FTCA still may be the sources of appropriate
claims. Courts must look to the scope of a waiver of sovereign immu-
nity to determine whether a particular agency is amenable to suit for
a particular claim.
The issue before us thus narrows to the effect of§ 409(c) on the
PRA's broad waiver of USPS's sovereign immunity contained in
§ 401(1).
As the Court explained long ago in Burr and recently reiterated in
Loeffler:
[W]hen Congress establishes . . . an agency, authorizes it to
engage in commercial and business transactions with the
public, and permits it to "sue and be sued," it cannot be
lightly assumed that restrictions on that authority are to be
implied. Rather if the general authority to "sue and be sued"
is to be delimited by implied exception, it must be clearly
shown that certain types of suits are not consistent with the
statutory or constitutional scheme, that an implied restriction
of the general authority is necessary to avoid grave interfer-
ence with the performance of a governmental function, or
that for other reasons it was plainly the purpose of Congress
to use the "sue and be sued" clause in a narrow sense. In the
absence of such showing, it must be presumed that when
Congress launched a governmental agency into the commer-
cial world and endowed it with authority to "sue or be sued,"
that agency is not less amenable to judicial process than a
private enterprise under like circumstances would be.
Loeffler, 486 U.S. at 554-55 (quoting Burr 309 U.S. at 245). See also
Franchise Tax Bd., 467 U.S. at 520 (applying this presumption to
USPS's waiver of immunity). The Court relied on this presumption
in Loeffler to find USPS responsible for prejudgment interest in Title
VII actions, and in Franchise Tax Bd. to require the USPS to withhold
delinquent state income taxes, as any other employer would have to
do.
9
As the Supreme Court and lower federal courts have noted, the leg-
islative history surrounding the PRA is replete with evidence that
Congress intended that USPS "be run more like a business than had
its predecessor, the Post Office Department," Franchise Tax Bd., 467
U.S. at 520, and that the inclusion of the "sue and be sued" clause was
part of this "general design." Loeffler , 486 U.S. at 549. Of course,
USPS retains many features of a governmental entity. It remains
closely regulated, to be "operated as a basic and fundamental service
provided to the people by the Government of the United States . . . ."
39 U.S.C. § 101(a). As such, it is restricted in ways that many private
businesses are not: For example, the Postal Rate Commission is given
the authority to set rates for transporting mails, see 39 U.S.C. § 3621,
and USPS is required to send certain items, such as franked mail,
without a fee. See 39 U.S.C. §§ 3201-3219. And, USPS retains privi-
leges that other private mailing services do not have, including the
right of eminent domain, 39 U.S.C. § 401(9), and legal representation
furnished by the Justice Department. See 39 U.S.C. § 409(d). Gener-
ally, however, "[b]y launching ``the Postal Service into the commer-
cial world,' and including a sue-and-be-sued clause in its charter,
Congress has cast off the Service's ``cloak of sovereignty' and given
it the ``status of a private commercial enterprise.'" Loeffler, 486 U.S.
at 556 (quoting Library of Congress v. Shaw, 478 U.S. 310, 317 n.5
(1986)).
As identified in Meyer, supra, there are three ways in which the
presumption of immunity suggested by the "broad" waiver may be
rebutted: (1) when the waiver would conflict with a statutory or con-
stitutional scheme; (2) when there is plain evidence of congressional
intent to restrict the waiver; or (3) when a broad reading would lead
to "grave interference with performance of a governmental function."
510 U.S. at 480 (quoting Burr, 309 U.S. at 245; see also Beneficial
Finance Co. v. Dallas, 571 F.2d 125, 128 (2d Cir. 1978)). USPS
bases its argument on the alleged congressional intent to restrict the
waiver as demonstrated in the language of § 409(c); neither of the
other two means appear to be applicable here. USPS does not point
to any suggestion in the legislative history of the PRA to suggest that
§ 409(c) was intended as a limitation on the substantive claims that
might be brought against it; indeed it appears it cannot.
Rather, USPS argues that its construction of § 409(c) is the most
natural reading of the subsection's plain language and the only one
10
that gives independent meaning to § 2679(a) of the FTCA. There are
two possible interpretations of that subsection: (1) that only those
torts cognizable by the FTCA are available to claimants against
USPS, and those claimants must utilize FTCA procedures in pursuing
their claims; and (2) that for those claims cognizable under the FTCA,
claimants against USPS must utilize FTCA procedures, but for other
tort claims for which they have a cause of action claimants may sue
USPS directly. As indicated, § 2679(a) of the FTCA provides that
independent waivers of a federal agency's sovereign immunity do not
authorize suits against that agency for claims cognizable under the
FTCA; rather a claimant must follow the procedures of the FTCA and
FTCA remedies are exclusive for such claims. As USPS urges, under
the second interpretation of § 409(c) that subsection would mirror
§ 2679(a). Nevertheless we find it to be the more reasonable reading
of the language. In the face of § 401(1)'s broad waiver of immunity,
this subsection does not facially purport to create any restriction of
that waiver. Rather, in a section of the PRA laying out general proce-
dures to be used in suing USPS, we think the subsection is most logi-
cally interpreted as indicating that FTCA procedures should be used
in pursuing tort claims. We interpret the subsection to be simply an
additional "procedural guidepost for would-be plaintiffs" to ensure
that they do not misunderstand that FTCA procedures must be fol-
lowed for cognizable tort claims. Federal Express, 959 F. Supp. at
835. Accordingly, we read § 409(c) to restrict§ 401(1)'s general
waiver of sovereign immunity only by requiring claimants to follow
FTCA procedures for those claims cognizable under the FTCA.
Under our reading, admittedly, § 2679(a) and§ 409(c) have sub-
stantially the same effect. But USPS's preferred interpretation of
§ 409(c) would have more of an impact than we believe was intended,
considering its ambiguous language and the general purpose of the
PRA. In interpreting a statute we must consider both the plain lan-
guage of the provisions and "its object and policy." United States v.
Turpin, 65 F.3d 1207, 1210 (4th Cir. 1995) (citing Crandon v. United
States, 494 U.S. 152, 158 (1990)). And, it is undisputed that the Con-
gress's overarching object and policy in enacting the PRA was to
loosen restrictions on USPS so that it might compete as a business.
Accordingly "we must presume that the Service's liability is the same
as that of any other business." Franchise Tax Bd., 467 U.S. at 520.
Such anomaly as may be involved in interpreting§ 409(c) to have pri-
11
marily the same effect with regard to USPS as does a FTCA provision
is simply too slim a reed to support USPS's burden of proffering
"plain evidence of congressional intent" to restrict the waiver of sov-
ereign immunity contained in § 401(1) beyond applying FTCA proce-
dures and limitations to those torts cognizable by the FTCA.
USPS is not an enterprise that occasionally affects commercial
firms indirectly in its endeavors. Rather, the language and the legisla-
tive history of the PRA make clear that Congress intended USPS to
be a full-fledged competitor in the business of carrying letters, parcels
and packages, and USPS has fulfilled that intention by competing
head-to-head with a host of private courier services. In competing
with private firms USPS advertises aggressively on television, in
print, on billboards and even by sponsoring a professional cycling
team. And, USPS has utilized the Lanham Act to register its marks
and to ensure that other firms do not infringe upon them. We cannot
conclude that Congress intended § 409(c) simultaneously to "launch
[USPS] into the commercial world" and also to immunize USPS from
liability for federally-created commercial torts such as the Lanham
Act. Such a reading would be wholly inconsistent with Congress's
stated purpose in enacting the PRA.
In sum, we hold that § 409(c) does not limit the PRA's waiver of
sovereign immunity such that USPS is liable in tort only for those
torts cognizable by the FTCA. Consequently, USPS is not immune
from Global's Lanham Act claim.
B.
The question remains whether USPS is a "person" capable of being
sued under the Lanham Act. Aside from the sovereign immunity
issue, USPS argues that the Lanham Act's prohibitions by their terms
do not apply to the federal government and its agencies, including
itself. USPS relies primarily on the Eighth Circuit's decision in
Preferred Risk Mut. Ins. Co. v. United States, 86 F.3d 789 (8th Cir.
1996), cert. denied, 117 S. Ct. 1245 (1997). There a private insurer
had filed trademark applications for names of policies including the
phrase "preferred risk." The Federal Emergency Management Agency
(FEMA) also used the phrase "preferred risk" in providing flood
insurance through the National Federal Flood Insurance Program.
12
After complaining to FEMA for several years about the likelihood of
confusion, the private insurer sued FEMA for Lanham Act violations.
Because Congress had not broadly waived FEMA's sovereign immu-
nity through a "sue and be sued" clause, the claim proceeded on the
theory that FEMA's actions were arbitrary, capricious, and not in
accordance with law under the Administrative Procedure Act (APA).
Accepting that the APA might serve as a vehicle to pursue valid
Lanham Act claims, the Preferred Risk court determined that the Lan-
ham Act prohibitions were not redressable against the federal govern-
ment. The Lanham Act's provisions apply to any "person," defined as
a natural person or a "juristic person," including "a firm, corporation,
union, association, or other organization capable of suing and being
sued in a court of law." 15 U.S.C. § 1127. To fit within this definition,
a federal agency would have to be included within the phrase, "orga-
nization capable of being sued." The court rejected this proposition,
noting that "[t]he principle of ejusdem generis dictates that a general
term following a list of particulars be interpreted as a reference to
subjects akin to those specifically enumerated." Id. at 794 (citation
omitted). Because the specifically enumerated groups in the Lanham
Act definition are private entities, "this rule of statutory construction
would counsel against an interpretation that includes the federal gov-
ernment." Id. The court also observed that Congress had amended the
Lanham Act in 1992 specifically to include state governments, and
that the principle of negative implication suggested that Congress
intended to omit the federal government from its subjection to the
Lanham Act, especially "against a legal backdrop of cases holding
that the Lanham Act did not apply to state or federal governments."
Id. (citing Serra v. GSA, 667 F. Supp. 1042, 1048-49 (S.D.N.Y.
1987), aff'd, 847 F.2d 1045 (2d Cir. 1988) (dismissing a Lanham Act
suit against the General Services Administration because it had not
waived its sovereign immunity) (emphasis in original) (additional
citations omitted)).
However, the Eighth Circuit found "[m]ost important" the "fact that
interpreting the Lanham Act to include the United States within the
definition of ``person' would create a right of action against the United
States under the terms of the Act. Providing such a right of action
against the United States requires an express and unequivocal waiver
of its sovereign immunity." 86 F.3d at 795 (citation omitted). Because
13
the Lanham Act did not expressly waive the federal government's
sovereign immunity, the court held that FEMA could not be liable
under the Lanham Act.
It is evident that the Eighth Circuit relied on the fact that the Lan-
ham Act did not contain an express waiver of the federal govern-
ment's sovereign immunity to conclude that no federal agency could
be a "juristic person" under the Act. See Quick, 131 F.3d at 775 (dis-
tinguishing its own decision in Preferred Risk because unlike FEMA
the "postal service is outfitted with a sue-and-be-sued clause waiving
its traditional sovereign immunity"). We agree that the Lanham Act
itself contains no waiver of sovereign immunity for the federal gov-
ernment, and that the Act's definition of "person" as an "organization
capable of being sued" falls short of the standard of explicitness
required for such a waiver. But those agencies whose immunity has
already been waived, and are capable of suing and being sued, fall
squarely within the plain language of the Lanham Act's definition of
"juristic persons." While we have applied the rule of ejusdem generis
to interpret general statutory terms "``in light of the specific terms that
surround it,'" United States v. Parker, 30 F.3d 542, 553 n.10 (4th Cir.
1994) (quoting Hughey v. United States, 495 U.S. 411, 419 (1990)),
we conclude that a federal agency whose sovereign immunity has
been waived unambiguously falls within that definition. Even apply-
ing the rule to the definition of "juristic persons," a governmental
agency engaged in a commercial enterprise, as is USPS, is indistin-
guishable in kind from a private "firm" or"association." USPS's
effort to limit the application of the Lanham Act's definition to
exclude itself therefore must fail.
Also, the fact that Congress amended the Act in 1992 to include
states within its purview, but not the federal government, only indi-
cates it did not intend to include a waiver of sovereign immunity for
Lanham Act violations for the whole of the federal government.
Again, we acknowledge that the Lanham Act itself does not include
a waiver of sovereign immunity for federal agencies. But it also does
not proscribe suits to enforce its provisions against agencies that are
capable of being sued. Construing the Lanham Act's definition of "ju-
ristic person" to exclude the USPS, a governmental corporation
actively engaged in competition in the private market, would lead to
the same "inherent inequity" that served as a catalyst for Congress'
14
amendment of the Lanham Act in favor of suits against states for vio-
lation of the Act. S. Rep. No. 102-280 (1992). For those agencies
whose sovereign immunity has been independently waived, therefore,
we hold that they are "juristic persons" under the terms of the Lanham
Act, and may be sued to enforce the provisions of the Act. Because
we find that Congress waived USPS's immunity as to Lanham Act
claims, it must defend against Global's action on the merits.
III
Because we conclude that Congress waived USPS's sovereign
immunity in the PRA, we need not consider and therefore express no
opinion on Global's arguments that the USPS is "judicially estopped"
from denying its status as a "person" under the Act, or that holding
USPS not to be liable under the Lanham Act would create an unlaw-
ful "taking" of Global's rights in violation of the Fifth Amendment.
IV
In conclusion, we hold that the PRA constituted a waiver of
USPS's immunity as to Lanham Act claims and USPS is a "person"
within the Lanham Act. We therefore vacate the judgment of the dis-
trict court and remand for further proceedings consistent with this
opinion.
VACATED AND REMANDED
15