FEDERAL COURTS

AND STATE COURTS

There is some confusion about the state of the Church litigation now going on in South Carolina. Since this is the only one of the five breakaway diocesan cases that has been litigated simultaneously in federal and state courts, it is understandable that misunderstandings should arise. However, a review of some fundamental historical facts should help us get a clearer picture of the present and future states of the competing legal actions of the two opposing dioceses in South Carolina.

The United States constitution established a federal system of government. States were given rights to regulate themselves within their own borders. The national government, however, was given supremacy (Article 6, Clause 2) over the whole nation, "the supreme law of the land." Federal laws take precedence over state laws. The constitution "mandates that all state judges must follow federal law when a conflict arises between federal law and either a state constitution or state law of any state." (Wikipedia, "The Supremacy Clause"). State courts may only adjudicate cases involving matters within the state. They have no jurisdiction beyond the boundaries of the state. Federal courts handle cases involving federal or national law. They do have jurisdiction beyond a local state. 

Four of the five secessionist diocesan cases were/are adjudicated in state courts only. See: "Litigation Summary, the Cases of the Five Dioceses (March 11, 2015)" on this blog, March 11, 2015. The decisions have run the gamut from one end to the other. Pittsburgh was settled first, entirely for the Episcopal Church. If state courts could set precedence for the whole country, that should have been it. Case closed in favor of the Episcopal Church. A second diocese, San Joaquin, has had a similar experience. There a state court twice very strongly ruled in favor of the Episcopal Church. That decision is on appeal but is likely to remain intact. On the other hand, two diocesan cases have gone against the Church: Fort Worth and Quincy. In Ft. Worth the local court ruled in favor of the Church only to be ordered to reverse itself by the state supreme court. In Quincy, a state court ruled in favor of the separatist diocese. This was upheld by a state appeals court. The Illinois supreme court denied review of the case. Since these four were all in state courts, none of their decisions have jurisdiction outside their respective states.

It has been argued on the Internet that the federal case in SC is dead on arrival because a SC state court has already rendered a judgment in favor of the independent diocese and the Illinois state court has made a final decree in favor of the "Anglican" diocese. Both rejected the claims of the Episcopal Church. In fact, neither of these two examples is necessarily relevant to the federal case in South Carolina. Federal courts are beholding to federal law. The case in South Carolina must be reheard under national law, namely the Lanham Act. It really does not matter what a state court may have said otherwise. The federal court in Charleston will have to adjudicate the case before it under federal, not state, law.

The supremacy of federal over state law was the major underlying point in the March 31 ruling of the U.S. Fourth Circuit Court of Appeals as it overturned Houck's decision. One should recall the original lawsuit in the U.S. court. On March 5, 2013, Bishop vonRosenberg filed a suit in the U.S. District Court, in Charleston, against Mark Lawrence. VonR claimed that under the national Lanham Act (Act of Congress, 1946), Lawrence wrongly infringed on the trademarks of the Episcopal Church and had engaged in false advertising while making himself out as the Episcopal bishop of the Diocese of South Carolina. The suit asked the court to: --find Lawrence in violation of the Lanham Act, --issue an injunction against Lawrence, --award vonR legal costs, --Lawrence make a written application, --Lawrence make accounting of the profits he had earned under the false advertising.

The original lawsuit of Mar 5 was augmented on March 7, 2013, in "Plaintiffs' [ECSC] Motion for a Preliminary Injunction." In this, vonR asked the court to issue an injunction against Lawrence to prevent him from using the official emblems, from claiming to be the bishop of the Diocese of South Carolina, and from making false advertisement. This motion was accompanied by a voluminous memo of supporting evidence.

On August 8, 2013, Judge C. Weston Houck, of the U.S. District Court, in Charleston, heard oral arguments in the case. On August 23, he issued an "Order" dismissing both lawsuits (Mar 5 and 7) in "deference" to the parallel case in state court. In other words, he abstained from ruling on the case. On September 16, ECSC filed a motion with Houck to reconsider. On January 4, 2014, Houck gave an "Order" denying ECSC's Sept. 16 motion. On February 5, 2014, ECSC filed an appeal of Houck's decisions to the U.S. Fourth Circuit Court of Appeals, in Richmond. On January 28, 2015, a three judge panel of that court held a hearing on the case. On March 31, 2015, the judges issued a unanimous decision vacating (overturning) Houck's orders and directing a rehearing in the District Court following the Colorado River principle.

The Fourth Circuit judges were very clear that a federal court is required ("must" "obliged") to conduct adjudication of federal law unless there is an extremely compelling reason not to do so. A federal court has only a very narrow window in which it can abstain from hearing a case involving federal law. The judges said Houck had met not one of the criteria for the right of abstention in this case. The judges all but ordered the District Court in Charleston to rehear the case and judge it under the terms of the Lanham Act. Their words could hardly have been any clearer. The three judges gave not the slightest nod to what had happened in state courts. No one could have missed the point the judges made that federal law takes precedence over state law.

Thus, the case returns to Charleston. One should recall that Judge Houck, while he deferred, also ruled that the Episcopal Church was an hierarchical institution and that Mark Lawrence had renounced his ordained ministry in the Church. Thus, the case will resume in Charleston on strong ground for the Episcopal Church side.

Which federal judge will hear the case? Rumor has it the case may go to one of the other four judges of the U.S. District Court in Charleston. Two of the four have already shown attitudes that might be considered favorable to the Episcopal Church.

Judge Patrick Michael Duffy was the one who handled the Church insurance case. On January 9, 2014, Duffy ruled that the Church Insurance Company of Vermont must provide benefit coverage for the Episcopal Church diocese (ECSC). This gave de facto recognition of legal legitimacy to the Church diocese. On March 5, 2014, Duffy denied a petition to reconsider the decision. Later, ECSC made an advantageous settlement with the insurance company.

Judge Richard M. Gergel was the one who legalized same-sex marriage in South Carolina. In so doing, he overruled an amendment to the state constitution that had been ratified by an overwhelming majority of the voters.

Another of the judges is ninety-four years old and has been a "senior" judge for twenty-five years. Judge Sol Blatt, Jr. has served on the court since 1971. One may doubt that he would take this particular case.

The other is Judge David C. Norton. He is a graduate of the University of the South, the Episcopal Church college at Sewanee, Tennessee. He has served on the bench since 1990 having been appointed by President George H.W. Bush.

Therefore, if Judge Houck does not resume the case, it is likely to go to a judge who may well favor the Episcopal Church side, or at least give every chance to the Church to make its case (as opposed to the predisposed state court). Now, it is undeniably true that the Episcopal Church lawyers will have a serious challenge. They must prove that the Lanham Act governs this matter and that Lawrence has been guilty of violating the Act. That will not be easy to do. They have their work cut out for them.

In conclusion, it is wrong to assume the Episcopal Church has lost its case in court in South Carolina. Far from it. The state court ruling is on appeal, probably to the state supreme court. Even more encouraging for Episcopalians is the federal court case now in process of returning to Charleston. The federal judge will conduct that case under federal law. Since the Episcopal Church is a national organization, it stands a better chance of winning in a national court. We should not jump to conclusions about what the District Court will do, but we should also keep cautious optimism about the future. Let's hold that in mind as we observe the holiest time of the year.