vonRosenberg v. Lawrence et al

Filing 87

ORDER AND OPINION The Court Grants The Episcopal Church's 83 Motion for leave to intervene under Rule 24(a) of the Federal Rules of Civil Procedure. Signed by Honorable Richard M Gergel on 8/23/2017.(erav, )

IN THE UNITED STATES DISTRICT COURT
DISTRICT OF SOUTH CAROLINA
CHARLESTON DIVISION
The Right Reverend Charles G.
)
vonRosenberg, individually and in his
)
capacity as the former Provisional Bishop )
of The Episcopal Church in South Carolina,)
and the Right Reverend Gladstone B.
)
Adams, III, individually and in his capacity )
as the Provisional Bishop of The Episcopal )
Church in South Carolina,
)
)
Plaintiffs,
)
)
v.
)
)
The Right Reverend Mark J. Lawrence and )
John Does numbers 1-10, beingjictitious )
defendants whose names presently are
)
unknown to Plaintiffs and will be added
)
by amendment when ascertained,
)
)
Defendants.
)

Civil Action No. 2:13-587-RMG

ORDER AND OPINION

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This matter is before the Court on The Episcopal Church's motion for leave to intervene
as Plaintiff-in-Intervention under Rule 24 of the Federal Rules of Civil Procedure. For the reasons
set forth below, the Court grants the motion for leave to intervene.

I.

Background
Bishop vonRosenberg alleges that The Episcopal Church removed Bishop Lawrence as the

Bishop of the Diocese of South Carolina and installed Bishop vonRosenberg in his place. Bishop
Lawrence denies that he was removed, instead contending the Diocese of South Carolina withdrew
from The Episcopal Church. On January 4, 2013, the Diocese of South Carolina and certain
associated churches and parishes sued The Episcopal Church in the Dorchester County Court of

Common Pleas, arguing the Diocese had dissociated from The Episcopal Church and seeking
"resolution of their real and personal property rights." The property at issue included the Diocese's

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service marks, which the state-court 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. 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.
On March 5, 2013, Bishop vonRosenberg filed this federal action, alleging Bishop
Lawrence's continued assertions that he remains the Bishop of the Diocese was false advertising
in violation of the Lanham Act. In response, Bishop Lawrence asked this Court to abstain in favor
of the state proceeding. In August 2013, this Court granted Bishop Lawrence's motion to abstain
and dismissed the case.
Meanwhile, on February 3, 2015, the state court issued a final order in favor of the Diocese.
(Dkt. No. 86-6.) 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 the Diocese's marks. The
Diocese appealed to the South Carolina Court of Appeals on March 24, 2015. 1
Shortly thereafter, on March 31, 2015, the Fourth Circuit vacated the Court's dismissal and
remanded for determination of whether "exceptional" circumstances under Colorado River Water
Conservation District v. United States, 424 U.S. 800 (1976), justified abstention. On remand, this

Court again abstained, staying the federal proceeding until the conclusion of the state action.
Bishop vonRosenberg again appealed and on February 21, 2017, the Fourth Circuit again vacated
the Court's order. The mandate issued on March 15, 2017, and Bishop vonRosenberg shortly

1

The appeal was transferred to the South Carolina Supreme Court under Rule 204(b), SCACR.

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thereafter filed an amended complaint, rewording certain allegations and adding his successor,
Bishop Adams, as a Plaintiff.
On August 2, 2017, the South Carolina Supreme Court held The Episcopal Church owned
most of the property at issue, reversing the Court of Common Pleas. The Protestant Episcopal

Church in the Diocese of SC. v. The Episcopal Church, No. 2015-000622, 2017 WL 3274123
(S.C. Aug. 2, 2017). On the issue of service marks the court was fragmented, with Acting Justice
Pleicones and Justice Hearn finding the trial court erred in holding the Diocese's state-registered
trademarks prevail over The Episcopal Church's federal trademarks, Chief Justice Beatty
expressing no opinion because the issue should be decided in this pending federal proceeding, and
Acting Justice Toal and Justice Kittredge finding that the Diocese's service marks are validly
registered under state law but that determination of the effect of federal trademark law on the marks
should be decided in this pending federal proceeding. A petition for rehearing is expected by
September 1, 201 7.
On August 8, 2017, this Court entered a scheduling order, providing that discovery shall
be completed by December 2017 and that this case is subject to being called for trial in March
2018. On August 15, 2017, The Episcopal Church moved for leave to intervene of right or,
alternatively, for permissive intervention. (Dkt. No. 83.) Bishop Lawrence opposes intervention.

II.

Legal Standard
Rule 24 of the Federal Rules of Civil Procedure provides for two types of intervention.

"Intervention of Right" requires the court to permit anyone to intervene upon timely motion who
"claims an interest relating to the property or transaction that is the subject of the action, and is so
situated that disposing of the action may as a practical matter impair or impede the movant's ability
to protect its interest, unless existing parties adequately represent that interest." Fed. R. Civ. P.
24(a)(2). Thus, to intervene as ofright, a movant must show: (1) timely application; (2) an interest
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in the subject matter of the underlying action; (3) that a denial of the motion for leave to intervene
would impair or impede the movant's ability to protect its interest; and (4) that the movant's
interest is not adequately represented by the existing parties to the litigation. Houston Gen. Ins.
Co. v. Moore, 193 F.3d 838, 839 (4th Cir. 1999). "A party moving for intervention under 24(a)
bears the burden of establishing a right to intervene, and must do so by satisfying all four
requirements." US. ex rel. MPA Constr., Inc. v. XL Specialty Ins. Co., 349 F. Supp. 2d 934,937
(D. Md. 2004). Failure to satisfy even one of these requirements is sufficient to warrant denial of
a motion for leave to intervene as a matter of right. See NAACP v. New York, 413 U.S. 345, 369
(1973).
"Permissive Intervention," on the other hand, allows the court, in its discretion, to permit
anyone to intervene upon timely motion who "has a claim or defense that shares with the main
action a common question of law or fact." Fed. R. Civ. P. 24(b)(1 )(B). In exercising discretion
under Rule 24(b), "the court shall consider whether the intervention will unduly delay or prejudice
the application of the rights of the original parties." Fed. R. Civ. P. 24(b)(3).

III.

Discussion

The Episcopal Church argues it may intervene of right because it has timely applied to
intervene, because it has an interest in the subject matter of this litigation, because denial of
intervention would impair its interest, and because its interest is not adequately represented by
Plaintiffs. Defendant opposes intervention. For the reasons that follow, the Court rules The
Episcopal Church may intervene of right in this matter. Because the Court holds The Episcopal
Church may intervene ofright under Rule 24(a), it does not reach the parties' alternative arguments
about permissive intervention under Rule 24(b).
Before applying the requirements for intervention of right under Rule 24(b) to this case,
the Court briefly addresses an argument raised at length by Defendant.
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Defendant argues

intervention should be denied because a prior state court adjudication bars The Episcopal Church's
proposed claims. (See Dkt. No. 86 at 7-12.) To the extent Defendant means the Dorchester
County Court of Common Pleas has actually enjoined The Episcopal Church from asserting its
proposed claims in federal court, his objection is erroneous because a state court cannot enjoin a
plaintiff from prosecuting an action in a federal court having jurisdiction over the parties and the
subject matter. See Donovan v. City of Dallas, 377 U.S. 408, 412-13 (1964). To the extent
Defendant means The Episcopal Church cannot succeed on the merits in this matter because of
prior state-court rulings, his objection is misplaced at this time. Substantial likelihood of success
on the merits is not a requirement for intervention.

If Defendant believes prior state court

adjudications are fatal to The Episcopal Church's proposed claims, he may so move after a
complaint-in-intervention is filed.

A.

Timeliness
The Episcopal Church moves to intervene over four years after this litigation was initiated.

It nevertheless argues its motion to for leave to intervene is timely because "[c]ourts assess the

timeliness requirement by looking at 'how far the suit has progressed, the prejudice which delay
might cause other parties, and the reason for the tardiness in moving to intervene."' (Dkt. No. 831 at 6 (quoting Gould v. Alleco, Inc., 883 F.2d 281, 286 (4th Cir. 1989).) The Court agrees. As
the Fourth Circuit has stated, "[t]he purpose of the requirement is to prevent a tardy intervenor
from derailing a lawsuit within sight of the terminal." Scardelletti v. Debarr, 265 F.3d 195, 202
(4th Cir. 2001 ). This case is not within sight of the terminal. The amended complaint was
answered a mere four months ago and the first scheduling order was entered a mere two weeks
ago. The Episcopal Church moved to intervene within one week of the entry of the scheduling
order.

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Moreover, Defendant's vehement objections to the timing of the motion for leave to
intervene must be taken with a grain of salt. Defendant moved for abstention, seeking dismissal
or alternatively a stay, on March 28, 2013. After the Fourth Circuit vacated the order granting that
motion, Defendant again moved for abstention, again seeking dismissal or alternatively a stay, on
June 30, 2015. After that order was again vacated by the Fourth Circuit, Defendant first answered
the complaint on April 11, 2017. The four years of delay preceding his answer to the complaint
occurred on Defendant's motion. He cannot now claim he is prejudiced by the delay he requested.
The Court therefore finds the motion for leave to intervene to be timely filed.
B.

Interest in the Litigation
The Episcopal Church argues it has an interest in this litigation because this suit "arises out

of Defendant Lawrence's misuse of marks owned by the Church." (Dkt. No. 83-1 at 8.) Whether
marks have been "misused" is of course undetermined at this time, but, without question, this suit
involves Defendant's right to use marks The Episcopal Church claims to own. The Episcopal
Church therefore has an interest in this litigation. Defendant's contrary argument under the
heading "Whether [The Episcopal Church] has interest in the pending litigation is trivial in
determining whether [The Episcopal Church's] motion to intervene is proper" is opaque and does
not appear directly to claim The Episcopal Church does not have an interest in this litigation. (See
Dkt. No. 86 at 15-16.)
C.

Impairment of Interest
Defendant argues that disposition of this litigation without The Episcopal Church's

intervention would not practically disadvantage The Episcopal Church in protecting its interests
in this litigation because it can file a separate action against Defendant. The Court finds that

argument unpersuasive.

If the Court were to rule in The Episcopal Church's absence that

Defendant has a right to use marks The Episcopal Church claims to own, The Episcopal Church's
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interest in those marks clearly would be impaired. The Episcopal Church's interests therefore
would be impaired if intervention were denied. Indeed, it is likely The Episcopal Church is a
necessary party in this matter because the complaint alleges The Episcopal Church owns the marks
at issue (see Dkt. No. 65
Act.

,r,r 28, 29) and the only cause of action asserted arises under the Lanham

See Kim J. Landsman, Daniel C. Glazer, Irene C. Treloar, Standing and Joinder

Considerations in Trademark Litigation and Licenses, 99 Trademark Rep. 143 7, 1449 n.51 (2009)
(collecting numerous cases holding that a trademark licensor must be joined as a necessary and
indispensable party in Lanham Act claims brought by licensees).

D.

Adequate Representation
Defendant argues Plaintiffs adequately represent The Episcopal Church's interests because

they have the same objective as The Episcopal Church, and "when the party seeking intervention
has the same ultimate objective as a party to the suit, a presumption arises that its interests are
adequately represented, against which the petitioner must demonstrate adversity of interest,
collusion, or nonfeasance." (Dkt. No. 86 (quoting Virginia v. Westinghouse Elec. Corp., 542 F.d2
214, 216 (4th Cir. 1976).) Certainly, The Episcopal Church has not demonstrated adversity of
interest, collusion, or nonfeasance by Plaintiffs, but that is not necessary because The Episcopal
Church does not have the same objectives as Plaintiffs. The Episcopal Church proposes to assert
claims Plaintiffs have not made and cannot make, such as trademark infringement claims and
trademark dilution claims. See 15 U.S.C. §§ 1114(1) & 1125(c)(l). Plaintiffs therefore cannot
adequately represent The Episcopal Church's interests in those claims.

IV.

Conclusion
For the foregoing reasons, the Court GRANTS The Episcopal Church's motion for leave

to intervene (Dkt. No. 83) under Rule 24(a) of the Federal Rules of Civil Procedure.

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AND IT IS SO ORDERED.

Richard Mark Ge
United States Dist ict Court Judge
August U, 2017
Charleston, South Carolina

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