FEDERAL JUDGE FINDS
ANGLICAN DIOCESE OF SC
IN CONTEMPT OF COURT
United States District Court Judge Richard Gergel today issued an "Order and Opinion" finding the Anglican Diocese of South Carolina in contempt of court for their use of the term "Protestant Episcopal Church in the Diocese of South Carolina":
The Court finds Defendants [ADSC] in civil contempt for their use of this mark [Protestant Episcopal Church in the Diocese of South Carolina].
The ADSC had used the term when they applied for a loan from the Paycheck Protection Program administered by the U.S. Small Business Administration earlier this year. The ADSC subsequently received a loan through PPP. One can only wonder how the SBA will respond to this once they are informed of the earlier Injunction against ADSC using this term and the finding of contempt of court for claiming it in an application for a PPP loan. Will the SBA demand return of the loan? Seems fair to me.
On a couple of other points, Judge Gergel allowed ADSC leeway. Since ADSC voluntarily corrected practically all of the 27 items the Church diocese had listed as violations of the Injunction, these were really moot. Too, he found that ADSC's use of the terms "2009 Convention" and "2008 Consecration" did not violate the Injunction.
Most importantly, it seemed to me that Judge Gergel used today's decision to speak to both the U.S. Court of Appeals and the South Carolina Supreme Court, in support of the Episcopal Church positions. The ADSC is appealing Gergel's Sept. 19, 2019 decision to the U.S. Court of Appeals. It is also petitioning the appeals court for a stay pending a decision of the SCSC. Meanwhile, EDSC is appealing Judge Dickson's decision of June 19, 2020 to the SCSC. These will be crucially important decisions; and it seemed to me that Gergel went out of his way to address the issues involved in his statement today.
1---The Episcopal Church is hierarchical.
This case arises out of a schism in 2012 in the Historic Diocese, originally known as the "Protestant Episcopal Church in the State of South Carolina," in which certain members and parishes sought to dissociate from The Episcopal Church, a nationwide hierarchical church.
2---The SCSC decision held that the Episcopal Church owned most of the property in question.
The parties have litigated property issues related to the schism in the state courts of South Carolina, culminating in a 2017 decision in the South Carolina Supreme Court holding that The Episcopal Church owned most of the property in dispute and finding that twenty-eight of the Disassociated Parishes held real and personal property in trust for TEC.
3---The Anglican Diocese was formed after the schism of 2012.
Defendant Disassociated Diocese, headed by Defendant Right Reverend Mark Lawrence and was formed following the schism in 2012 to disassociate from TEC.
4---The Episcopal Church diocese of SC is the lawful heir of the historic diocese.
On September 19, 2019, this Court granted summary judgment in favor of TEC and TECSC, finding that TECSC is the lawful successor of the Historic Diocese.
Perhaps the most important point in Gergel's order of today was what seemed to me to be a thinly disguised statement to the U.S. Court of Appeals. On October 16, 2020, the ADSC filed with the appeals court a "Motion to Stay Case." They asked the court to set aside the appeal until the SCSC rules on EDSC's appeal of Dickson's order. One of the main arguments ADSC made in its motion was that the SCSC would decide ownership of the state marks:
What the S.C. Supreme Court held in its 2017 opinions matters in this case because its decision on corporate governance affects the ownership of the state-marks...
First, with that decision in hand, the Court [SCSC] can resolve the state-marks and prior-use issues with the final decision from South Carolina's court of last resort.
In today's order, Gergel bristled at the notion that the issue of the marks had not been settled and took ADSC to task for misinterpreting Judge Dickson's June 19, 2020, order:
While Defendants [ADSC] argue that [Dickson's June 19, 2020 Order] permits such usage [Protestant Episcopal Church in the Diocese of South Carolina], this decision does no such thing, stating in relevant part that "the Federal Court has exclusive authority to decide all issues relating to the trademarks, service marks, and intellectual property." ([Dickson's Order]noting that "[a]lmost uniformly, the Supreme Court determined that TEC and TECSC owned all service marks, trademarks, and intellectual property or deferred to the Federal courts on these issues" and reiterating that "the Federal Court has jurisdiction over matters related to the trademarks, intellectual property, and service marks issues")
It appears to me that Gergel is telling the U.S. Court of Appeals that ADSC has no substantial claim to a stay order on the grounds of the settlement of marks which Gergel has most emphatically ruled on THREE times (Injunction and two enforcements). With this, I fully expect the appeals court to deny ADSC's motion for a stay toute de suite. Moreover, I continue to believe the appeals court will reject the entire appeal. Gergel has been ingenious at making and protecting his decisions. It seems to me they are appeal proof.
All in all, Gergel's order of today is a major boost for the Episcopal Church side, partly in enforcing its identity as the only legal and legitimate heir of the historic diocese, but also in sending unmistakable messages to the state supreme court and the federal appeals court in favor of the Episcopal Church. This comes at a good time for the Church side.
Find the Diocese of South Carolina's press release about today's order here .
