Court Opinion

ID: 2794642
Source: CourtListenerOpinion
Date Created: 2015-04-17 20:00:51.533034+00
Date Added: 2024-06-11T11:29:10.905762
License: Public Domain

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

                     Amended:   April 17, 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

dismissed 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 dismissal order and remand

for further proceedings.

                                           I.

      Bishop     vonRosenberg         alleges     that    in     December       2012,       the

Disciplinary Board of The Protestant Episcopal Church in the

                                            3
United States ousted Bishop Lawrence from his position as Bishop

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. § 1114

and § 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 dismissed 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

                                             5
false 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.

                                             7
       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).

                                               8
       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,

                                                    9
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

                                          10
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 dismissal 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

                                  12