U.S. Judge Delays Hearing on Episcopal Church Appeal Demanding Identity of Diocese of South Carolina, Pending State Court Decision

A federal judge handed the Episcopal Church (TEC) and its local subsidiary, the Episcopal Church in South Carolina (TECSC) a setback today when he refused the request to reconsider a decision about who rightfully owns the Diocese of South Carolina identity, trademarks and other intellectual property.

Bishop Charles G. vonRosenberg, who heads TECSC, has repeatedly alleged that the property and identity of the Diocese of South Carolina actually belongs to the Episcopal Church and was wrongfully taken by Bishop Mark Lawrence, who heads the Diocese which left TEC in 2012.

Federal District Judge C. Weston Houck originally dismissed vonRosenberg’s claim in 2013, recognizing that the essential issues of the Diocese’s identity would be resolved by the South Carolina courts. Last February, South Carolina Circuit Judge Diane Goodstein ruled the Diocese of South Carolina was, in fact, free to leave the denomination and keep its property and assets. TEC appealed that decision and the appeal will be heard by the South Carolina Supreme Court on Sept. 23.

Meanwhile, TEC appealed Judge Houck’s decision to the U.S. Court of Appeals for the Fourth Circuit. The appellate panel ordered Judge Houck to reconsider his earlier dismissal of the case using a different legal standard for that decision. The panel decision was largely procedural. It did not issue any opinions about the merits of TEC’s claim.

In today’s decision to delay any further hearings pending the outcome of a South Carolina Supreme Court decision about the case Judge Houck wrote, “Regardless of the [state Supreme Court’s] ultimate decision, Bishop vonRosenberg’s rights will necessarily be addressed and will be adequately protected in the state court action.”

He referred to the Supreme Court hearing, scheduled for Sept. 23, as “the parallel state court action.”

“Basically, the Judge is saying that if the Supreme Court upholds the state ruling the case will be dismissed,” said the Rev. Jim Lewis, Canon to Bishop Lawrence.

Houck applied the Colorado River Abstention doctrine to conclude that the factors in this case presented the “exceptional circumstances” to warrant abstention.