Charles v. nRosenberg v. Mark Lawrence , 781 F.3d 731 ( 2015 )


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  •                               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
    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 stayed
    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 stay order and remand for further proceedings.
    I.
    Bishop     vonRosenberg      alleges    that    in     December       2012,   the
    Disciplinary Board of The Protestant Episcopal Church in the
    United States ousted Bishop Lawrence from his position as Bishop
    3
    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 stayed 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     false
    5
    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   stay    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