Opinion ID: 179728
Heading Depth: 2
Heading Rank: 5

Heading: Second International Council and Bahá'í Publishers

Text: The National Spiritual Assembly also challenges the district court's decision that the Second International Council and Bahá'í Publishers are not bound by the injunction. It offers two reasons for binding these nonparties: First, they were created by Jensen, who (the argument goes) was personally bound by the injunction; and second, they are successors in interest to Remey, who also was personally bound by the injunction.
The district court rejected the contention that the Second International Council and Bahá'í Publishers were in privity with the Hereditary Guardianship through Jensen. After declining to apply Merriam, the judge explicitly entered an alternative holding that Jensen was not legally identified with the Hereditary Guardianship even if Merriam applied. The judge acknowledged that Jensen was an incorporator of the Hereditary Guardianship, that he served as one of its first board members, and that contemporaneous evidence suggested that Jensen remained a follower of the Hereditary Guardianship during the underlying litigation. Nevertheless, the court found that Jensen disassociated himself from any governing role in the organization shortly after serving his one-year term on the board. This was well before the underlying injunction was issued. The National Spiritual Assembly disputes these findings. It argues that Jensen's extensive involvement with the Hereditary Guardianship prior to the underlying litigation establishes legal identity. We see no clear error in the district court's findings, which were amply supported by the record. Jensen's term on the Hereditary Guardianship board ended in the middle of 1964; he was not reelected as a board member. After he lost reelection, he did not serve in a governance, advisory, or any other controlling position in the Hereditary Guardianship, and he had no involvement in the underlying litigation. As such, Jensen did not occupy the sort of key role in the Hereditary Guardianshipeither generally or with respect to injunction litigationthat could form the basis of a legal identity finding under Merriam. The National Spiritual Assembly argues in the alternative that Jensen (and by extension, the Second International Council and the Bahá'í Publishers) should be bound by the injunction because Jensen remained an adherent and the Hereditary Guardianship adequately represented its believers' interests in the underlying suit against the National Spiritual Assembly. The Supreme Court in Taylor and our own recent decision in Tice recognize that the concept of privity in preclusion doctrine includes a very limited adequate-representation category. See Taylor, 553 U.S. at 894, 128 S.Ct. 2161 (observing that adequate representation by someone with the same interests who [wa]s a party to the earlier suit sufficed for privity purposes in certain limited circumstances, including properly conducted class actions and suits brought by trustees, guardians, and other fiduciaries); Tice, 162 F.3d at 973 ([U]nless a formal kind of successor interest is involved . . ., there should be some indication . . . that the second party either had participated or had a legal duty to participate.); see also RESTATEMENT (SECOND) OF JUDGMENTS § 41 (similarly limiting adequate-representation theory of privity). The trademark litigation 44 years ago does not fit into this limited category. A finding of privity based on adequate representation in the circumstances of this case would be entirely unwarranted. The Hereditary Guardianship did not conduct the underlying litigation as anything like a fiduciary for its members, and there is no evidence to suggest it was acting in a representative capacity for its followers personally. To find privity based on adequate representation here would treat every suit by an organization as having res judicata and contempt implications for the organization's members individually. This is contrary to the Supreme Court's language in Taylor carefully limiting the scope of the adequate-representation category of privity. At bottom, this argument is an appeal to the theory of virtual representation, which the Supreme Court has firmly rejected in the field of claim preclusion. Taylor, 553 U.S. at 904, 128 S.Ct. 2161. Having rejected virtual-representation theory in its traditional res judicata setting, we see no reason why the Supreme Court would view it more favorably in the context of injunctions. The district court properly rejected the attempt to bind the Second International Council and Bahá'í Publishers through Jensen.
The National Spiritual Assembly also argues that the Second International Council and Bahá'í Publishers are bound by the injunction through privity with Remey. This argument is based on trademark-registration filings with the United States Patent and Trademark Office in which Neal Chase, the current president of the Second International Council and Bahá'í Publishers, explained that the throne to the Davidic kingdom passed by succession from Bahá'u'lláh to Abdu'l-Bahá, to Charles Mason Remey, to Pepe Remey (Remey's adopted son), and now to him. The National Spiritual Assembly treats these filings as an admission of legal successorship to Remey, who in turn was legally identified with the Hereditary Guardianship. The district court treated the trademark-registration filings as nonbinding evidentiary admissions rather than binding judicial admissions. See Help at Home, Inc. v. Med. Capital, L.L.C., 260 F.3d 748, 753 & n. 2 (7th Cir.2001); Higgins v. Mississippi, 217 F.3d 951, 954 (7th Cir.2000); Murrey v. United States, 73 F.3d 1448, 1455 (7th Cir.1996); Keller v. United States, 58 F.3d 1194, 1198 n. 8 (7th Cir. 1995). The National Spiritual Assembly apparently agrees with this characterization, but argues that the court gave them insufficient weight. We find no fault with the district court's treatment of this factual matter. Other than the version of spiritual-leadership succession described in trademark filings, the National Spiritual Assembly offered no evidence of a link between Remey and the Second International Council or Bahá'í Publishers. Indeed, Remey had no involvement in either organization and died more than 25 years before the Second International Council was established. Neither the Second International Council nor Bahá'í Publishers received any money, property, or other assets from Remey or the Hereditary Guardianship. On these facts the district court properly concluded that the Second International Council and Bahá'í Publishers are not successors to Remey. See Walling, 321 U.S. at 674, 64 S.Ct. 826 (successors are those to whom the business may have been transferred); Flowdata, 154 F.3d at 1355 (nonparty successorship liability under injunction requires a substantial continuity of identity); cf. Golden State Bottling Co., 414 U.S. at 179, 94 S.Ct. 414 (finding bona fide purchaser of a business enterprise was the legal successor to the enterprise and thus subject to enterprise's liability); Reich, 50 F.3d at 417 (a company that acquired the business subject to this court's order was legal successor and bound by the order). AFFIRMED.