LEGAL UPDATE, FEDERAL COURT
A few months ago, the federal court case between the two competing bishops was remanded to the U.S. District Court in Charleston by the U.S. Court of Appeals, Fourth Circuit, with direction to follow the Colorado River principle that requires a federal court to adjudicate federal law except in certain rare circumstances. On June 11, Judge C. Weston Houck, who has handled this case all along since its beginning in 2013, held a hearing in which he requested a brief from Mark Lawrence's attorneys and a response brief from Bishop vonRosenberg's attorney. These two briefs are now available at www.episcopalchurchsc.org ("News"> "Legal News," on right, "Related Documents," "In Federal Court," July 15, 2015 and June 30, 2015).
Bishop vonRosenberg brought this lawsuit against Lawrence in 2013 claiming that the defendant had violated the federal Lanham Act (the independent diocese had already brought suit against the Episcopal Church for the legal rights of the diocese). The Lanham Act, an act of Congress, protects trademarks. vonR asserted that he and not Lawrence was the only legitimate bishop of the Episcopal diocese; and therefore Lawrence was making a fraudulent claim of being the bishop of the Episcopal diocese. In short, vonR was asking the federal court to recognize himself as the only legal bishop of the diocese. Judge Houck essentially dismissed this case on the grounds that the state court had already begun adjudicating a parallel case. vonR appealed Houck's decision to the U.S. Court of Appeals, in Richmond. The Appeals court ruled that Houck had erred by not applying the Colorado River principle. This standard requires federal courts to try cases involving federal law except in very unusual circumstances. A federal court can defer to a state court only for extremely limited reasons. When Lawrence's lawyers asked the Appeals court for reconsideration of their decision, the entire panel of judges in the Appeals court refused and ordered the case to be remanded to Judge Houck.
Following Houck's hearing on June 11, Alan Runyan and Lawrence's other lawyers submitted to Houck on June 30, "Memorandum in Support of Defendant Lawrence's Supplemental Motion to Dismiss or in the Alternative to Stay Proceedings." They asked Houck either to dismiss the case or to grant a stay pending the South Carolina Supreme Court decision. The lawyers declared that the issues in the case had already been settled by the state circuit court. Judge Goodstein had issued an order on Feb. 3, 2015 that found entirely in favor of the independent diocese and against the Church side (that is now on appeal to the state supreme court). They claimed that the Colorado River standard could not be applied in this case.
In response, attorney Thomas Tisdale submitted to Houck on July 15, "Plaintiff's Memorandum in Opposition to Defendant's Supplemental Motion to Dismiss or in the Alternative to Stay the Proceedings." Tisdale argued that the state court action was not parallel to the federal case and that the Colorado River principle must be followed as per the opinion of the Appeals Court. The federal case involves a federal law covering trademark infringement, a different issue that that of the state court suit.
As I see it, Judge Houck now has three choices. In the first he could dismiss the case ruling that certain highly unusual factors allowed him to defer to the state courts. In order to satisfy the Appeals Court, this would require very detailed explanations of why he could do this. This, of course, would be to the advantage of the independent diocese. In the second, he could issue a stay pending the outcome of the state supreme court action. That court has scheduled a hearing for oral arguments on Sept. 23. A written decision would be issued probably several months afterwards. In the third, he could call a trial following the Colorado River standard. This would mean a full trial in the U.S. district court on whether Lawrence had violated the Lanham Act. This would likely be to the advantage of the Church side.
At this point, we can only await Judge Houck's decision. There is no hint of when we might hear from him. The matter before him now is much more difficult and complicated than when it first appeared before him in 2013 when he essentially summarily tossed it out in deference to the state circuit court process. He cannot do that now. The Court of Appeals changed everything.