United Supreme Council v. United Supreme Council of the Ancient Accepted Scottish Rite for the 33 Degree of Freemasonry
United Supreme Council v. United Supreme Council of the Ancient Accepted Scottish Rite for the 33 Degree of Freemasonry
Opinion of the Court
This matter came before the Court on Defendants' Motion for Summary Judgment *287(Dkt. 255).
I. Background
The background of this case has been addressed at length in the pleadings and in the Court's previous order addressing Defendants' Motion to Dismiss. See Dkt. 71. The Court will not review matters previously addressed, but will turn directly to the issues raised by Defendants' Motion for Summary Judgment. In their motion, Defendants seek dismissal of the six counts remaining in this case: Count I (common law unfair competition); Count II (conspiracy to commit common law unfair competition); Count V (tortious interference with contract); Count VI (conspiracy to commit tortious interference with contract); Count IX (copyright infringement); and Count X (trademark infringement).
II. Legal Standard
The court shall grant summary judgment if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law. Fed. R. Civ. P. 56(a). Summary judgment is appropriate if the "pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law." Celotex Corp. v. Catrett ,
In reviewing a summary judgment motion, the court must "draw all justifiable inferences in favor of the nonmoving party." United States v. Carolina Transformer Co. ,
III. Analysis
Defendants challenge Plaintiffs' claims on several grounds. The Court will first address Plaintiffs' standing, and will then consider the merits of Plaintiffs' claims of tortious interference with contract, copyright *288infringement, trademark infringement, unfair competition, and conspiracy.
a. Standing
Before this Court may exercise jurisdiction over Plaintiffs' claims, Plaintiffs must demonstrate that they have constitutional standing. See Lujan v. Defenders of Wildlife ,
Defendants challenge the standing of both named Plaintiffs in this case: (1) the United Supreme Council, 33 Degree of the Ancient and Accepted Scottish Rite of Freemasonry, Prince Hall Affiliation, Southern Jurisdiction of the United States of America ("Plaintiff USC-SJ"); and (2) the United Supreme Council 33° of the Ancient and Accepted Scottish Rite of Freemasonry (Prince Hall Affiliation) Southern Jurisdiction U.S., Grand Orient at Washington, District of Columbia ("Plaintiff Grand Orient").
i. Plaintiff USC-SJ
Defendants argue that Plaintiff USC-SJ has failed to establish that it is either a natural person or a legal entity. See Dkt. 256 at 20. In the absence of a legal existence, Defendants argue, Plaintiff has suffered no injury in fact that can be redressed by this lawsuit.
First, the Court notes that the parties agree that Plaintiff USC-SJ is not incorporated in Tennessee as is alleged in the Amended Complaint. See Dkt. 182; Dkt. 183; see also Dkt. 44 at ¶ 1. On October 9, 2017, Plaintiffs filed a Motion for Leave to File a Second Amended Complaint, requesting, among other things, leave to amend to "reflect that the first named Plaintiff [USC-SJ] is, and has operated as, a D.C. unincorporated non-profit social, charitable, and fraternal association." See Dkt. 182 at 2. Plaintiffs acknowledged that "[t]his Plaintiff was incorrectly identified as a Tennessee non-profit corporation in the First Amended Complaint."
Plaintiffs attempt to circumvent this fact by arguing that Defendants have admitted that USC-SJ is a Tennessee corporation because Defendants made a statement to that effect in their Answer. See Dkt. 319 at 4; see also Lucas v. Burnley ,
Plaintiffs also assert that Defendants have waived their argument regarding Plaintiff USC-SJ's legal existence because lack of capacity is an affirmative defense which must be raised with particularity in a party's answer. See Dkt. 319 at 3; Fed. R. Civ. P. 9(a) ; see also Definitive Res., Inc. v. United States , No. DKC 2005-3233,
While it is true that lack of legal capacity is an affirmative defense which must be raised in an answer, standing is a jurisdictional issue which may be raised at any time.
Here, Defendants assert that Plaintiff USC-SJ has failed to establish that it is a legal entity of any kind. See Dkt. 256 at 20. The Court agrees. Plaintiff USC-SJ is indisputably not a Tennessee corporation. Plaintiff USC-SJ has not made any showing that it is a D.C. unincorporated association. If Plaintiff USC-SJ has failed to establish a legal existence, it can have no stake in the outcome of this case. Northpoint Tech. ,
ii. Plaintiff Grand Orient
The capacity of a corporation to sue or to be sued is determined by its state's law of incorporation. See United States v. Moore ,
Under District of Columbia law, when Plaintiff Grand Orient's charter was revoked, *290it continued its existence but was barred from carrying on any activities or affairs except as necessary for winding up its affairs. See
A corporation may not take advantage of its revoked status to enjoy a benefit derived from acts taken during a period of revocation. See Bourbeau v. Jonathan Woodner Co. ,
Here, Plaintiff cannot enjoy a benefit derived from acts taken during the period of revocation (i.e., registering a trademark and entering into membership contracts). The plain language of the D.C. code supports this reading:
When reinstatement under this section is effective, it shall relate back to, and be effective, as of the effective date of the administrative dissolution, and the domestic filing entity shall resume carrying on its activities and affairs as if the administrative dissolution had never occurred, except for the rights of a person arising out of an act or omission in reliance on the dissolution before the person knew or had reason to know of the reinstatement.
*291Even if Plaintiffs USC-SJ and Grand Orient had standing to bring the claims asserted in the Amended Complaint, summary judgment in Defendants' favor is appropriate because Plaintiffs' claims fail on the merits.
b. Tortious Interference with Contract (Count V)
To establish tortious interference with contractual relations, a claimant must: (1) demonstrate the existence of a valid contractual relationship or business expectancy; (2) prove knowledge of the relationship or expectancy by the interferor; (3) show intentional interference inducing or causing a breach of the relationship; and (4) show that it suffered damages from the interference. See Commerce Funding Corp. v. Worldwide Sec. Servs. Corp. ,
Here, Plaintiffs fail the first prong. They have not demonstrated an enforceable contract. Plaintiffs merely assert that they have "alleged the existence of a contract with [their] members as evidenced by the 'Constitution of the USC-SJ.' " Dkt. 319 at 18. Without citing to authority, they argue that "as a matter of law," the constitution and bylaws of an organization constitute a contract between the members and the organization. See
Even if the Court were willing to enforce Plaintiffs' interpretation of Masonic law, Plaintiffs have not demonstrated that they had a reasonable probability of a continuing business relationship with any of the members who left the organization to join Defendants' organization. Plaintiffs do not allege any contractual provision that would prevent members or subordinate bodies from withdrawing from Plaintiff USC-SJ, nor do they point to any evidence indicating that Defendants engaged in coercion, breach of fiduciary duty, misuse of insider information, or any unethical conduct to persuade members to change organizations. See Dkt. 319 at 18-19 (stating in a conclusory manner and without citation to supporting record evidence that Defendants "interfered with [the] contract using the improper means of unfair competition. Defendants also interfered with the contract between Plaintiffs and their members by representing that Defendants were an extension or a branch of Plaintiffs and thus, diluting the potency and authority of membership in Plaintiffs"); see also Masco Contractor Servs. E., Inc. v. Beals ,
For these reasons, the Court grants summary judgment on Count V.
c. Copyright Infringement (Count IX)
To prove copyright infringement, a plaintiff must show (1) that he owned the copyright to the work that was allegedly copied, and (2) that the defendant copied protected elements of the work. Bouchat v. Baltimore Ravens, Inc. ,
*292In this case, Plaintiffs have alleged infringement of copyrighted information including Plaintiffs' "rituals, names, numbers, badges, paraphernalia, symbols, and other intellectual and personal property." But the only material which is actually subject to copyright is U.S. Copyright Registration No. TX0008-210-759, effective date November 16, 2015, respecting their Constitution and General Regulations of the United Supreme Council, 33 Degree Ancient & Accepted Scottish Rite of Freemasonry, PHA, SJ, USA, Inc.
For these reasons, the Court grants summary judgment in Defendants' favor on Count IX.
d. Trademark Infringement (Count X)
i. Lanham Act Section 32
Plaintiffs have no standing to bring a claim under
In the absence of a registered trademark, Plaintiffs cannot claim trademark infringement under Section 32, which entitles "the registrant" to sue for trademark infringement. See
Plaintiff has not provided, nor has the Court identified, any authority to suggest that an applicant for a trademark registration is entitled to the standing due to a registrant. Nor is the Court aware of any support for the proposition that a standing deficiency can be cured by the subsequent registration of a trademark during a lawsuit. The general rule is that standing is determined from the circumstances at the time the suit is filed. See Lujan ,
ii. Lanham Act Section 43
To show a violation of Section 43 of the Lanham Act, a plaintiff must demonstrate that it has a valid, protectable trademark and that the defendant's use of a colorable imitation of the trademark is likely to cause confusion among consumers. Lone Star Steakhouse & Saloon, Inc. v. Alpha of Virginia, Inc. ,
Here, Plaintiffs attempt to characterize Count I of the Amended Complaint, which alleges unfair competition under Virginia common law, as a Section 43 Lanham Act claim. See Dkt. 319 at 10. Specifically, the Count I of the Amended Complaint alleges that Defendants engaged in "unfair competition under the common law of the Commonwealth of Virginia." Dkt. 44 at ¶ 69. In their Opposition to Defendants' Motion for Summary Judgment, Plaintiffs argue that they have "plead infringement as a cause of action both specifically and broadly enough to include any violations of Section 43(a), in addition to Section 32(1)." Dkt. 319 at 10.
This belated recasting of the Amended Complaint must fail. Plaintiffs only cite two sentences in support of this argument: "Defendants ... have falsely represented that they are the true, genuine, and authentic 33rd Degree Scottish Rite Freemasonry, Prince Hall Affiliated, organization governing Plaintiffs' exclusive territorial 'Southern Jurisdiction,' or a legitimate branch of Plaintiffs" and "[a]s a result of Defendant's unauthorized use of trademarks that are identical to and/or confusingly similar to Plaintiffs' Registered Marks, the public is likely to believe that Defendant's goods or services are approved by or affiliated with Plaintiffs." See
For these reasons, the Court grants summary judgment in Defendants' favor on Count X.
e. Unfair Competition Under Virginia Common Law (Count I)
First, the Court notes that Plaintiffs did not address Defendants' summary judgment arguments about unfair competition.
*294See generally Dkt. 319. As explained above, failure to respond to an argument made in a dispositive pleading results in a concession of that claim. See Rahman ,
The tests for trademark infringement and unfair competition under common law are essentially identical. See Nationstar Mortgage, LLC v. Ahmad ,
When analyzing whether there is a likelihood of confusion, courts have considered the following factors: (1) the strength or distinctiveness of the Plaintiffs' mark as actually used in the marketplace; (2) the similarity of the two marks to consumers; (3) the similarity of the goods or services that the marks identify; (4) the similarity of the facilities used by the markholders; (5) the similarity of advertising used by the markholders; (6) the Defendants' intent; (7) actual confusion; (8) the quality of Defendants' product; and (9) the sophistication of the consuming public. See Select Auto Imports Inc. v. Yates Select Auto Sales, LLC ,
First, the Court considers the strength and distinctiveness of the Plaintiffs' mark. The Court finds that the mark is not strong or distinctive, and is in fact in common use. The terms "United Supreme Council Ancient Accepted Scottish Rite" are used by many organizations both domestically and internationally. See Dkt. 256, Ex. 1 at 154:20-155:1-8; 156:18-20; Ex. 27; Ex. 28. Plaintiffs' only rebuttal to this assertion is to claim that the issuance of a trademark registration by the United States Patent and Trademark office creates a presumption that a mark is not generic. See Dkt. 320 at 19 ¶ 51.
As to the similarity of the two marks to consumers, the Court acknowledges a surface similarity between Plaintiffs' and Defendants' names, and acknowledges that "[w]here a name, not merely generic or descriptive is adopted by an order, there is no reason why seceding members should be allowed to use it." Grand Lodge Improved, Benevolent, Protective Order of Elks of the World v. Eureka Lodge No. 5, Independent Elks ,
*295The Court finds that the record reflects Defendants' intent to distinguish themselves from Plaintiffs' organization. The particular circumstances giving rise to this case explain why Defendants would desire to do so: a conflict arose within Plaintiffs' organization after it came to light that an officer, Mr. Vaughn, was allegedly misappropriating funds. Defendants' members, unhappy with how the situation was handled, thus departed from Plaintiffs' organization. See Dkt. 256 at 5. It is unsurprising, therefore, that Defendants would want to avoid any confusion between themselves and Plaintiffs. Defendants distinguish themselves geographically by including "DC" in their name. Their intent to separate themselves from Plaintiffs is further reflected on Defendants' website. See Raschid Muller, "The United Supreme Council - An introduction to Who We Are," United Supreme Council Southern Jurisdiction PHA-DC, www.uscsjpha-dc.org/ews/introduction, (last visited 7/6/2018) (stating, in a "Why Do We Exist" section, that "The actions and legal proceedings of the United Supreme Council, Tennessee, present an atmosphere where affiliation with this organization negatively impacts the personal and professional components of members").
Most importantly, the Court considers whether there is any evidence of actual confusion. See George & Co. LLC v. Imagination Entm't Ltd. ,
Moreover, courts have dismissed evidence of only a small number of instances of actual confusion as de minimis. See George ,
Thus, having considered all the factors relevant to a likelihood of confusion in light of the evidence and in light of parties' arguments in the pleadings and at the motion hearing, the Court concludes that Plaintiffs' claim of unfair competition must fail. See Potomac Conference Corp. of Seventh-Day Adventists v. Takoma Academy Alumni Ass'n , No. DKC 13-1128,
For these reasons, and for good cause shown, the Court therefore grants summary judgment in Defendants' favor on Count I.
f. Conspiracy (Counts II and VI)
Without an underlying tort, there can be no cause of action for a conspiracy to commit the tort. See McDonald's Corp. v. Turner-James , No. 05-804.
IV. Conclusion
For these reasons, and for good cause shown, the Court grants summary judgment in Defendants' favor. See Dkt. 338.
Dkt. 255 is a motion from the following Defendants: United Supreme Council of the Ancient Accepted Scottish Rite for the 33 Degree of Freemasonry, Southern Jurisdiction, Prince Hall Affiliated; Ralph Slaughter; Joseph Williams; and Michael Parris. Defendant Most Worshipful Prince Hall Grand Lodge of Virginia Free and Accepted Masons and Defendant Roger Brown entered into a settlement agreement with Plaintiffs. See Dkt. 344.
The Court previously dismissed Counts III, IV, VII and VIII. See Dkt. 71 at 8.
There is a difference between the capacity to sue, which is the right to come into court, and the standing to sue, which is the right to relief in court. Washington Mut. Bank v. Blechman ,
Defendants contend that the rituals of Scottish Rite Masonry are generic and available on the open market. See Dkt. 256, Ex. 1 at 46:4-9; Ex. 22. Plaintiffs do not directly address this assertion, but claim that the rituals "belong to the four Supreme Councils through an agreement." See Dkt. 320 at ¶ 39 (citing Dkt. 320, Ex. 31 at 183:9-22, 184:1-5). This fact is therefore admitted for the purposes of summary judgment. Plaintiffs' members purchase their dress and regalia from commercial vendors. See Dkt. 256, Ex. 6 at 160:17-162:3. Once a member purchases regalia, it is his private property. See
On the contrary, it appears that the individuals who joined Defendants' organization did so because they understood the difference between Plaintiffs and Defendants, and because they wished to separate themselves from what they perceived as a criminal (or, at least, unethical) culture within Plaintiffs' leadership. Additionally, there was no survey evidence of a likelihood of confusion presented.
Reference
- Full Case Name
- UNITED SUPREME COUNCIL, 33 DEGREE OF the ANCIENT AND ACCEPTED SCOTTISH RITE OF FREEMASONRY, PRINCE HALL AFFILIATION, SOUTHERN JURISDICTION OF the UNITED STATES of America v. UNITED SUPREME COUNCIL OF the ANCIENT ACCEPTED SCOTTISH RITE FOR the 33 DEGREE OF FREEMASONRY, SOUTHERN JURISDICTION, PRINCE HALL AFFILIATED
- Cited By
- 18 cases
- Status
- Published