Wednesday, April 01, 2015

4th Circuit Vacates Trial Court's Abstention In South Carolina Episcopal Diocese Trademark Litigation

In vonRosenberg v. Lawrence, (4th Cir., March 31, 2015), the U.S. 4th Circuit Court of Appeals vacated a federal district court's decision that declined to exercise jurisdiction over a trademark infringement case growing out of the ongoing controversy between a large break-away portion of the Episcopal Diocese of South Carolina and the smaller number of parishes that remain loyal to The Episcopal Church.  The district court held that the trademark dispute is part of a larger dispute over ownership of the Diocese's property which is being litigated in state court and concluded that it is "judicially impractical to retain jurisdiction over a fragmented claim that has been separated from the larger controversy." (See prior posting.)  The 4th Circuit held that the district court had applied precedents that apply to abstention when a plaintiff is seeking only declaratory relief.  Instead, where as here the plaintiff seeks an injuction as well as a declaratory judgment, the district court should have applied precedent that allows abstention only if "exceptional circumstances" justify the surrender of federal jurisdiction. The 4th Circuit remanded to case for the district court to determine whether exceptional circumstances are present. [Thanks to Will Esser via Religionlaw for the lead.]