Battle of the Bishops. Parallel jurisdiction in the Fourth Circuit (Round 2)
Plaintiff sued seeking declaratory and injunctive relief and claiming that Defendant violated the Lanham Act by falsely advertising himself as the Bishop of the Diocese of South Carolina. At Defendant’s request, the district court deferred to related state court proceedings. In Round 1 of the appeal, the Fourth Circuit vacated that order. On remand, the district court again stayed the action pending conclusion of the state proceedings.
Plaintiff alleged specifically that the Episcopal Church removed the defendant from his position as Bishop and installed the Plaintiff in his place, but that the Defendant continues to assert that he holds the position. Defendant insists that the Diocese of South Carolina withdrew from the Church, kept him as Bishop, and operates independently.
The state court actions, brought by allies of the Defendant, sought a resolution of their rights relative to the Episcopal Church. The Church counterclaimed for trademark infringement and dilution. Neither of the Bishops are party to that state court lawsuit. The state court ordered that the state diocese had validly dissociated, and therefore owned the property at issue, including the service marks. The Church appealed to the state supreme court, and that appeal was pending at the time of the Fourth Circuit decision.
In order for the state action to bar proceedings in the federal court, the federal court must find ‘exceptional circumstances’ and ‘clearest justifications’ to justify the surrender of its jurisdiction. In order to find these circumstances, a court must first determine whether the two actions are parallel, meaning they have the same facts scope and remedies.
Even if the actions are parallel, courts then balance a number of factors to determine whether or not to abstain. (Those factors include: whether in rem jurisdiction applies, convenience of the forum, avoidance of piecemeal litigation, the order in which jurisdiction was obtained, the progress of each action, which law governs, and adequacy of state proceedings to protect the parties’ rights). The balance starts with a weight in favor of jurisdiction.
Here, the two actions are not parallel. Exceptional circumstances allowing for abstention do not exist when state and federal cases are not duplicative, but just raise overlapping issues.
Here, events occurring after the district court’s first abstention order and before its second order make clear that the two actions are not parallel — the state action will not resolve every claim at issue in the federal action. Neither Bishop vonRosenberg nor Bishop Lawrence is a party to the state action; indeed, the state court has denied the Episcopal Church’s request to add Bishop Lawrence as an individual counterclaim defendant. Furthermore, as the district court noted, the state court has held that the Episcopal Church’s proposed Lanham Act claims were not before it. Nor is Bishop vonRosenberg’s individual false advertising claim, alleging harms to his ecclesiastical authority distinct from the harms of the Episcopal Church, before the state court.
So, Round 2 ends as Round 1: the Circuit Court and vacates the district court’s order and remands for further proceedings. But, the door is left open for Round 3:
. . . the district court may well be correct that the resolution of the issues in the state court proceeding may have collateral estoppel effect on claims asserted in this litigation. We leave the determination of those questions to the district court.