Opposition Brief — Grady v. Sovereign Order of Saint John of Jerusalem, Inc.

Supreme Court, U.S.

; FILED

YY JAN 26 1998

No. 97-883

+k

In The ‘

Supreme Court of the United States

a

October Term, 1997

JOHN L. GRADY

Petitioner,

vs.

SOVEREIGN ORDER OF SAINT JOHN OF JERUSALEM,

INC.; SOVEREIGN ORDER OF SAINT JOHN OF

JERUSALEM - KNIGHTS OF MALTA,

Respondents.

On Petition for Writ of Certiorari to the

Supreme Court of Ohio

RESPONDENTS’ BRIEF IN OPPOSITION

EDWIN VIEIRA, JR. HUGH J. MOORE, JR.

13877 Napa Drive Counsel of Record

Manassas, VA 22110 DOUGLAS E. PECK

(703) 791-6780 WITT, GAITHER & WHITAKER, P.C.

1100 SunTrust Bank Building

736 Market Street

Chattanooga, TN 37402

(423) 265-8881

Attorneys for Respondents

utz

A DIVISION OF COUNSEL PRESS

144249 (800) 274-3321 + (800) 359-6859 tng ao .\

i

STATEMENT PURSUANT TO RULE 29.6

Respondent Sovereign Order of Saint John of Jerusalem,

Inc. is a non-profit corporation and has no parent company or

nonwholly owned subsidiaries.

TABLE OF CONTENTS

Statement Pursuant to Rule 29.6 ...........-00005:

Table Of ComtemtS .....ccccccccccccccccccseveces

YY fe rrrrrrrrrrrrrrrrry TT yt

Reasons for Denying the Writ ............-.+0++5:

I Determination Of The “True Order” Is A Non-

Justiciable Question. ..........---+eeeeeee

II. Grady’s Challenges To The Registered Trademark

Have Been Appropriately Dismissed Pursuant To

The Lamhe Act. ....cccscccccccccssecsss

III. Grady’s Constitutional Rights Have Not Been

Hafringed. ......cccccccccccccsscccesccses

Cometeshee ... cc cccccsccsccsenssceccuceesecsses

TABLE OF CITATIONS

Cases Cited:

Benevolent and Protective Order of Elks of the U.S.A. v.

Improved B. & P.O. of Elks of the World, 122 Tenn.

B68 CITED) «nc cccccccccsscesceseseseovesses<

Bouldon v. Alexander, 82 U.S. (15 Wall.) 131, 21 L. Ed.

OD CRIED 5 occ cccccccsecccsasavsasnyddovenens

Page

ii

12

15

ii

Contents

Page

Grand Lodge of 1.B. & P.O. Elks of the World v. Grand

Lodge, Improved, 50 F.2d 860 (4th Cir. 1931) .... 6

Jandron v. Zuendel, 139 F. Supp. 887 (N.D. Ohio 1955)

RAMEE Gaus WOKS VaUSaas cdc Wesictacscwee am 83

lowa Farmers Union v. Farmers’ E. & C. Union, 247

es cea cccesccee 6

Lindstrom v. Tell, 154 N.W. 969 (Minn. 1915) ...... 5

Lutheran Free Church v. Lutheran Free Church (Not

Merged), 141 N.W. 2d 827 (Minn. 1966) ........ 4,5

Nance v. Busby, 18 S.W. 874 (Tenn. 1892) ......... 2

National Board of YWCA v. YWCA of Charleston, S.C.,

wae ay ee, ee Gee, ESTE) ...........0005. 5

Partin v. Tucker, 172 So. 89 (Fla. 1937) ............ 3

Piletich v. Deretich, 328 N.W. 2d 696 (Minn. 1983) .. 4

Purcell v. Summers, 145 F.2d 979 (4th Cir. 1944) .... 5

Second Baptist Church of Reno v. Mount Zion Baptist

Church, 466 P.2d 212 (Nev. 1970) .............. 3

Serbian Eastern Orthodox Diocese v. Milivojevich, 426

U.S. 696, 49 L. Ed. 2d 151 (1976) ............. 23

iv

Contents

Page

Smith v. Church of God, 326 F. Supp. 6 (D. Md. 1971)

, abadn wed bbe ewold S50Us Bak ake s sens Net CEN SD 2

Sovereign Order of St. John of Jerusalem, Inc. v. Grady,

119 F.3d 1236 (6th Cir. 1997) ........ ee eee eee 3

United States Constitution Cited:

ee. nr ee rere eens ee a 12, 13

|

This case centers around the right to use a registered

trademark, “Sovereign Order of St. John of Jerusalem - Knights

of Malta.” This mark is a collective membership mark, and is

used to show membership in the group bearing that name (the

“Order”). This mark is owned by the Sovereign Order of St.

John of Jerusalem, Inc. (the “Corporation”). The Corporation

has no parent or subsidiary corporations, and has no affiliated

groups other than the Order itself. Collectively the Order and

the Corporation are referred to as the “OSJ”. John L. Grady

(“Grady”) is an expelled former member of the Order.

In his Petition, Grady argues at length that his claims

depend upon an adjudication of who or what group in the

current embodiment of “the Order,” and that failure to make

such a finding misconstrues the Lanham Act and denies Grady

his Constitutional rights of free speech and religious freedom.

As set forth in detail below, each of these contentions is

without merit.

The determination of the “true Order” is a non-justiciable

question which the District Court correctly refused to consider.

The prior decisions denying Grady’s challenges to the

registered trademark were correct, and do not misconstrue the

Lanham Act. Finally, Grady is free to exercise his Constitutional

rights of expression and worship, so long as he does so in

accordance with other recognized limitations. Intentional

misuse of another’s registered trademark is not a privilege

granted to Grady by the Constitution or otherwise.

2

REASONS FOR DENYING THE WRIT

I.

DETERMINATION OF THE “TRUE ORDER” IS A

NON-JUSTICIABLE QUESTION.

Grady’s contention on page 50 and elsewhere in his Petition

that examining the legitimacy of the lineage of his group and

of the Respondent Order is necessary for a full adjudication of

this case is incorrect. The determination of which group is the

“true Order” is, in fact, a non-justiciable issue. In a dispute

among the members of a religious organization with an

“hierarchical” polity, a civil court may inquire only whether

such a polity exists, what its supreme authority is, and what

decision that authority has made. Serbian Eastern Orthodox

Diocese v. Milivojevich, 426 U.S. 696, 709, 49 L. Ed. 2d 151,

162 (1976). Where expulsions or lapses from membership of

former members in an hierarchical religious organization are

involved, the courts may not investigate the religious doctrines

underlying the expulsion, and may not question the procedures

the organization employs to expel dissidents, to affiliate or

disaffiliate with other groups, or to select officers. See Serbian

Eastern Orthodox Diocese, 426 U.S. at 708-10, 49 L. Ed. 2d

at 162-63; Nance v. Busby, 18 S.W. 874, 879, 881 (Tenn. 1892).

The lower courts’ decisions in this case are fully consistent

with this basic legal principle.

The polity of the OSJ is hierarchical both internally, with

the Order’s ultimate, unreviewable authority in the General

Chapter of Knights; and externally, with the Corporation

exercising supervisory control. See Smith v. Church of God,

326 F. Supp. 6, 9 n.6 (D. Md. 1971); Jandron v. Zuendel, 139

F. Supp. 887, 888-89 (N.D. Ohio 1955). Therefore, the courts

lack authority to “review” the General Chapter’s or the

Corporation’s interpretation and application of “the ancient

ee

Ne ee ee

3

acts, precedents, and the inherited power and authority of the

Order to confer or grant letters patent or diplomas of

membership” or to “disturb th{e Corporation’s] interpretation

of the [OSJ’s] law from which th[e Corporation] claim[s] to

derive [its] authority to grant or deny” membership. Affidavit

of Leonard J. Messineo, Jr., District Court File No. 6, Ex. A,

art. EIGHTH, { 7; Jandron, 139 F. Supp. at 889.

Therefore, the courts “must take the fact of expulsion [of

Grady] as conclusive proof that [Grady and the other former

members] are not now members” of the Order and are “not

entitled to any rights or privileges * * * from membership

therein.” Partin v. Tucker, 172 So. 89, 91 (Fla. 1937). Grady’s

subjective views to the contrary have no evidentiary value.

Second Baptist Church of Reno v. Mount Zion Baptist Church,

466 P.2d 212, 216 (Nev. 1970). Further, the courts may not

entertain any argument that the Corporation or General Chapter

were “arbitrary,” that they did “not follow[ their] cwn laws

and procedures in arriving at [their] decisions,” or that those

decisions or procedures went “beyond their jurisdictions.”

Serbian Eastern Orthodox Diocese, 426 U.S. at 712-24, 49 L.

Ed. 2d at 165-71. Rather, the courts must accept as binding

and enforce those decisions as final and unreviewable. Bouldon

v. Alexander, 82 U.S. (15 Wall.) 131, 139-40, 21 L. Ed. 69, 71

(1872). Clearly, the Sixth Circuit has done so in this case. In

support of their ruling that Grady had no right to use the

registered trademark the court specifically found that “the

Corporation’s Board of Directors expelled Grady from the

Order in 1983. Despite his expulsion, [Grady] continued to

use the trademark... .” Sovereign Order of St. John of

Jerusalem, Inc. v. Grady, 119 F.3d 1236, 1239 (6th Cir. 1997).

Note that Grady does not claim to have separated himself

from the OSJ and formed some other, different, and independent

“sect.” Rather, he claims to be the leader of the Order itself,

4

and to have displaced the validly pre-existing officers thereof.

Numerous civil cases have decided the membership vel non

of individuals in religious organizations. For example, in

Piletich v. Deretich, 328 N.W. 2d 696 (Minn. 1983), “certain

members” of a church

stopped participating and paying dues and thus,

under the church’s by-laws, [were] no longer

members. ... The majority faction ... continued

to operate and maintain the church property.

When the dispute resulted in litigation, the court refused to

dispose of the matter on the ground that the

controversy is doctrinal in nature and therefore

beyond the purview of the courts. ...

...[T]his action . . . would accurately be termed

a matter of property ownership and membership

qualification, to be determined by documents and

proceedings of the ... church government. Since it

is not a doctrinal matter ..., there is no first

amendment barrier to resolution by the civil courts.

We proceed, therefore, to a determination on the

merits.

On the nierits, the court found the dissidents were not members,

because they “chose to leave the church,” and “ceased to pay

dues as required.” Jd. at 698, 700, 702. This holding likewise

applies to Grady.

Nonmembers — including former members — of a

religious organization cannot falsely hold themselves out as

members or officials, immune from judicial control. E.g.,

Lutheran Free Church v. Lutheran Free Church (Not Merged),

5

141 N.W. 2d 827 (Minn. 1966) (injunction against use of name

by dissidents). “[A] religious, benevolent or fraternal

organization is entitled to protect the use of its name against

those who secede.” National Board of YWCA v. YWCA of

Charleston, S.C., 335 F. Supp. 615, 621-22 (D.S.C. 1971);

accord Benevolent and Protective Order of Elks of the U.S.A.

v. Improved B. & P.O. of Elks of the World, 122 Tenn. 141,

145-46 (1909). A fortiori, a religious organization is entitled

to protection against persons expelled, or whose memberships

have lapsed or otherwise been forfeited. See Lindstrom v. Tell,

154 N.W. 969, 971 (Minn. 1915).

The reason for the decisions in cases such as these is that

[t]he right to use the name [of a religious

organization] inheres in the institution, not in its

members; and, when they cease to be members of

the institution, use by them of the name is misleading

and, if injurious to the institution, should be

enjoined. No question of religious liberty is

involved. Men have the right to worship God

according to the dictates of conscience; but they

have no right in doing so to make use of a name

which will enable them to appropriate the good will

which has been built up by an organization with

which they are no longer connected.

Purcell v. Summers, 145 F.2d 979, 987 (4th Cir. 1944)

(emphasis supplied).

Members dissatisfied with an organization have

a right to withdraw and organize a new order; but

they ha[ve] no right ... to adopt the name of the

original order, or to hold themselves out as a branch

6

of that order. To do so constitutes a fraud upon the

original order and upon the public, and, if allowed,

would result in enabling the rival organization to

appropriate to itself the advantages which the original

order had built up through years of effort. A more

glaring example of unfair competition could not well

be imagined.

Grand Lodge of 1.B. & P.O. Elks of the World v. Grand Lodge,

Improved, 50 F.2d 860, 864 (4th Cir. 1931) (emphasis supplied).

Clearly, where (as here) dissidents “were formerly

associated with [the order] and are no longer associated,” the

evil is especially serious, for “[t}he former association makes

[the dissidents’ misrepresentation] much more injurious to [the

order] than if the same wrong were committed by a stranger.”

lowa Farmers Union v. Farmers’ E. & C. Union, 247 F.2d 809,

816 (8th Cir. 1957). The lower courts’ injunction prohibiting

Grady from using the registered trademark is fully appropriate

and consistent with this authority.

GRADY’S CHALLENGES TO THE REGISTERED

TRADEMARK HAVE BEEN APPROPRIATELY

DISMISSED PURSUANT TO THE LANHAM ACT.

This case is factually far less complex than Grady asserts.

The record establishes the following facts:

1. In 1979, Grady joined the OSJ. Sovereign

Order of St. John of Jerusalem, Inc. v. Grady,

119 F.3d at 1239.

2. The OSJ as then organized included two

7

aspects — the “Order” and the “Corporation.”

Id. at 1238.

The Corporation owns the mark “Sovereign

Order of St. John of Jerusalem - Knights of

Malta.” This mark is a collective membership

mark, denoting membership in the Order. /d.

at 1238-39.

The Corporation, acting through its officers

and directors, licenses the mark to approved

members of the Order. Jd. at 1237.

Since December 31, 1982, Grady has not been

a member of the Order. /d.

Although he applied for a license, his

application was denied and Grady is not

authorized to use the mark. /d.

continued for well over a decade to use the

name, marks and symbols of the Order, and in

1991 claimed to have “reconstituted” the Order

with himself as its leader. Jd.

Following a trial in which the jury found

the mark and from claiming membership in

the Order. Id. at 1239-40.

Grady'’s challenges to the validity of the registered

trademark and the actions of the Corporation in licensing the

use of that mark are wholly without merit. Indeed, many of

the factual premises used to support his theory of the alleged

“takeover” of the Order are incorrect, and other material facts

are omitted from his recitation. Grady’s Petition proceeds from

the erroneous assumption that the Order and the Corporation

are fundamentally at odds, and that the actions of the

Corporation were unauthorized or otherwise improper. Petition

at 30-31, 61-62. Indeed, on page 21 of the Petition, Grady

asserts that the Corporation “was virtually unknown to the

membership of the Order.” This is surprising in that on page

26 Grady correctly notes that only seven months after he joined

the Order, all members were advised that the Supreme Council

had directed the Corporation to proceed with licensing the

membership to use the registered trademark. Further, though

Grady admits on page 34 the Corporation did proceed with

the licensing requirement announced on page 26, he claims

on page 62 that such licenses have not been issued. Indeed, as

the Sixth Circuit found, Grady’s application for a license from

the Corporation was denied, following which he was expelled

from the Order. 119 F.3d at 1239. Grady has made no attempt

to explain these internal inconsistencies in his Petition. Quite

simply, Grady is a disgruntled former member of the Order

who, for reasons he alone may know, refuses to accept the

its head. Although his Petition contains numerous misstatements

and omissions, the most significant are the following:

1. Although Grady objects to or questions the

validity of various prior acts of the OSJ, it is

clear that the Corporation was organized and

affiliated with the Order well before Grady

the owner of the registered trademark for many

years prior to Grady’s connection to the Order.

119 F.3d at 1238-39.

9

Grady never held any office or position in the

Corporation, and thus has never had standing

to challenge the Corporation's acts, pursuant

to 8 Del. Code § 225. In addition, as a

nonmember of the Order, Grady lacks standing

to challenge the Order’s delegation of authority

to the Corporation. See Capetola v. Orlando,

426 F. Supp. 616, 617, 194 U.S.P.Q. 319,

320 (E.D. Pa. 1977). During the time Grady

was a member of the Order, he never

challenged the Corporation's authority. Indeed,

during the 1981 General Chapter, Grady voted

to approve the Corporation’s actions in

expelling several members of the Order.

Affidavit of Salvatore T. Messineo, District

Court File No. 5, ¥¥ 48-58; see also Sovereign

Order of St. John of Jerusalem v. Messineo,

572 F. Supp. 983, 985-987 (E.D. Pa. 1983)

(ruling on preliminary injunction)(detailed

discussion of the role of the Corporation in

the OSJ and the General Chapter of 1981).

A challenge_to the Corporation's actions was

filed by Thorbjorn Wiklund, a former director

of the Corporation who was expelled in 1981,

and others who claimed Wiklund was the

properly elected head of the OSJ. Sovereign

Order of St. John of Jerusalem - Knights of

Malta v. Salvatore T. Messineo, et al., No. 83-

0032 (E.D. Pa.). By Stipulated Judgment and

Consent Decree entered 10/26/93, the

Corporation's actions were affirmed and

validated. Jd.

As a result of that litigation, Willund’s

10

purported expulsion of the Messineos, relied

upon in Paragraph 12 of Grady’s factual

history, was declared invalid. Jd.

Contrary to the assertions in Paragraphs 7-11

in Grady’s factual history, the authority of the

Corporation over the Order has no connection

to Romanoff’s appointment as Imperial

Protector or his actions in 1981 (or at any other

time), but derives from the Corporation’s 1956

Certificate of Incorporation, articles THIRD,

{ 2, and EIGHTH, 7. Affidavit of Leonard

J. Messineo, Jr., District Court File No. 6, Ex.

A; Affidavit of Salvatore T. Messineo, District

Court File No. 5, {¥ 6-8. Romanoff was

unknown to the leaders of the OSJ and the

Corporation in 1956. Affidavit of Aleksei

Nicholaevich Romanoff, District Court File

No. 27, { 13. Grady has proffered no evidence

the Corporation did not obtain or could not

have obtained its authority from the Order.

Affidavit of Leonard J. Messineo, Jr., District

Court File No. 22, ¥¥ 9-18.

William von Peters, an original co-defendant

with Grady in this action, has renounced and

disaffirmed his actions related to the

Association of Family Commanders of

Hereditary Knights of Saint John. von Peters

now says that the actions of this Association,

culminating in the “reestablishment” of the

Order under Grady, were improper and of no

effect. In contradiction to page 55 of the

Petition, von Peters does not recognize Grady

as the head of the Order nor does he believe it

11

is headquartered in Tennessee. Order of

November 1, 1995, District Court File. No.

136.

Benjamin von Stahl, the other original co-

defendant in this action, has likewise

renounced and disaffirmed his actions related

to the Association, and acknowledged that he

has had no authority over the Order since

1981. Order of November 1, 1995, District

Court File No. 135. Of the original three

founders of the Association, only Grady

continues to assert that his actions were valid.

The validity of the registered trademark was

challenged at length in William H. Coleman,

II v. Sovereign Order of St. John of Jerusalem,

Inc., Cancellation No. 14,038 (Trademark Trial

and Appeal Board, original Petition filed

October 8, 1983). The Second Amended

Petition was denied by Opinion dated June 14,

1990. Coleman appealed the Board’s decision

to the Eastern District of Pennsylvania, which

entered summary judgment against him.

William H. Coleman, II v. Sovereign Order of

St. John of Jerusalem, Inc., No. 90-5301 (E.D.

Pa. Feb. 9, 1993).

Although Grady has on many occasions

claimed “fraud” in the granting of this

trademark, he has never presented any proof

on this issue. Even his Tender of Proof before

the District Court makes only conclusory

allegations of wrongdoing, without providing

any factual basis to support this claim. 119

12

F.3d at 1240, 1241. Fraud was also alleged by

Coleman in the trademark cancellation action

noted above, and rejected by both the Board

and the District Court.

10. Prior to his expulsion from the Order, Grady

filed the required application for licensure with

the Corporation. This application was rejected.

119 F.3d at 1239.

Other persons, notably Wiklund and Coleman, have had

far greater standing to challenge the actions Grady raises in

his Petition. All such challenges have failed, and properly so.

As the jury found, Grady used the registered trademark for

more than a decade, knowing that such use was an

infringement. He has had a full hearing, both at trial and on

appeal. The issues he now raises are all invalid, and form no

basis for another rehashing of his unsupported allegations of

wrongdoing.

Ii.

GRADY’S CONSTITUTIONAL RIGHTS HAVE NOT

BEEN INFRINGED.

Grady also asserts that the decision below denies his

Constitutional rights to worship as he pleases and to freely

express himself. These assertions are also wholly without

merit.

Grady is free to follow whatever religion he chooses, and

to worship accordingly. He is likewise entitled to freedom of

expression as set forth in the First Amendment. These rights

do not, however, confer upon Grady the privilege of infringing

another's registered trademark. It is that privilege alone which

13

Grady seeks, and which the lower courts have properly denied

him. It has been held that in reviewing such an injunction

“religious freedom is not at issue” because an injunction would

never deny the dissidents the right to practice their religious

beliefs “in whatever manner they choose,” but instead would

simply prevent them “from appropriating to themselves the

good will and identity” of an organization to which they do

not belong. Jandron v. Zuendel, 139 F. Supp. 887, 889 (N.D.

Ohio 1955).

Further, after full consideration of these claims, the District

Court properly concluded that the First Amendment prevented

the courts from disturbing Grady’s expulsion from the Order:

Finally, in Part C of the third counterclaim, the

defendants allege that their First amendment rights

to freedom of religion have been violated by the

actions of the Plaintiffs. Defendants have presented

no evidence that any religious freedom has been

violated. Indeed, there is no evidence that the Order,

in any of its incarnations, is a religious organization

at all. By evidence presented by both sides, the Order

is a lay organization. While apparently associated

with the Catholic church historically, the Order does

not even require that its members be Catholic. Since

membership in the Order is not an inherently

religious act, Part C of the third counterclaim must

fail.

Even if the Order were a religious organization,

it is clear that it would be legally able to police its

own membership and policies. In Paul v. Watchtower

Bible & Tract Soc’y, 819 F.2d 875 (9th Cir.), cert.

denied, 484 U.S. 926 (1987), the Ninth Circuit held

that the Jehovah’s Witnesses were entitled to engage

14

in their practice of shunning former members of the

church. Jd. at 876. This holding was reached on the

ground that imposing tort damages on the church

for actions taken pursuant to religious belief would

create an unconstitutional burden on the free exercise

of religion. Jd. at 880. In Grunwald v. Bornfreund,

696 F.Supp. 838 (E.D.N.Y. 1988), the Eastern

District of New York noted that “federal courts will

not interfere with the decisions of a religious body

adjudicating the relationships of members in that

body; as a matter of jurisprudence federal courts will

defer to the decision of the religious body.” Jd. at

840. Indeed, “it is contrary to the first amendment

for a court, either federal or state, to engage in an

examination of ecclesiastical doctrine, and unless

such examination cannot be avoided, a court must

defer to the decisions of a religious body.” Jd. Thus,

the Order would be free to handle its own

membership in a way that it saw fit, including the

expulsion of the defendants. If it saw fit to

disassociate itself from the defendants, and to force

them to practice their “religion” elsewhere, the courts

of the land would be prevented by the First

Amendment from interfering. Put as simply as

possible, the considerable ecclesiastical wrangling

engaged in on both sides, even if this Court were to

find the Order to be a religious body, is beyond the

purview of this Court.

Memorandum of October 12, 1995 at 6-7.

In short, Grady can worship however he pleases and

express himself as he sees fit, within the limits recognized by

our system of jurisprudence. Grady has knowingly infringed

upon another’s registered trademark for more than a decade.

15

As shown by his Petition, he would gladly continue his

infringement in the future. Indeed, he seems to feel it is his

right to do so. Such conduct cannot, and should not, be

tolerated.

CONCLUSION

Grady’s claims are all without merit. As an expelled former

member of the Order, Grady has no right to continue to use

the Order’s name, marks and symbols. The injunctions issued

against him are appropriate and his Petition should be denied.

Respectfully submitted,

HUGH J. MOORE, JR.

Counsel of Record

DOUGLAS E. PECK

WITT, GAITHER & WHITAKER, PC.

1100 SunTrust Bank Building

736 Market Street

Chattanooga, TN 37402

(423) 265-8881

EDWIN VIEIRA, JR.

13877 Napa Drive

Manassas, VA 22110

(703) 791-6780

Attorneys for Respondents