Seventh Circuit Court of Appeals. Opinion, Judge Sykes.
Excerpts - Opinion of US 7th Circuit Court of Appeals, Case No. 08-2306
http://www.fglaysher.com/bahaicensorship/US_7th_Circuit_Court_of_Appe...
36
No. 08-2306
E. Second International Council and Bahá’í Publishers
The National Spiritual Assembly also challenges the
district court’s decision that the Second International
Council and Bahá’í Publishers are not bound by the
injunction. It offers two reasons for binding these
nonparties: First, they were created by Jensen, who (the
argument goes) was personally bound by the injunction;
and second, they are successors in interest to Remey, who
also was personally bound by the injunction.
1. The Jensen Connection
The district court rejected the contention that the Second
International Council and Bahá’í Publishers were in privity
with the Hereditary Guardianship through Jensen. After
declining to apply Merriam, the judge explicitly entered an
alternative holding that Jensen was not legally identified
with the Hereditary Guardianship even if Merriam applied.
The judge acknowledged that Jensen was an incorporator
of the Hereditary Guardianship, that he served as one of its
first board members, and that contemporaneous evidence
suggested that Jensen remained a follower of the Heredi-
tary Guardianship during the underlying litigation.
Nevertheless, the court found that Jensen disassociated
himself from any governing role in the organization shortly
after serving his one-year term on the board. This was well
before the underlying injunction was issued.
The National Spiritual Assembly disputes these findings.
It argues that Jensen’s extensive involvement with the
Hereditary Guardianship prior to the underlying litigation
No. 08-2306
37
establishes legal identity. We see no clear error in the
district court’s findings, which were amply supported by
the record. Jensen’s term on the Hereditary Guardianship
board ended in the middle of 1964; he was not reelected as
a board member. After he lost reelection, he did not serve
in a governance, advisory, or any other controlling position
in the Hereditary Guardianship, and he had no involve-
ment in the underlying litigation. As such, Jensen did not
occupy the sort of “key” role in the Hereditary Guardian-
ship—either generally or with respect to injunction litiga-
tion—that could form the basis of a “legal identity” finding
under Merriam.
The National Spiritual Assembly argues in the alternative
that Jensen (and by extension, the Second International
Council and the Bahá’í Publishers) should be bound by the
injunction because Jensen remained an adherent and the
Hereditary Guardianship adequately represented its
believers’ interests in the underlying suit against the
National Spiritual Assembly. The Supreme Court in Taylor
and our own recent decision in Tice recognize that the
concept of privity in preclusion doctrine includes a very
limited adequate-representation category. See Taylor, 553
U.S. at 894 (observing that “adequate representation” by
“someone with the same interests who [wa]s a party” to
the earlier suit sufficed for privity purposes “in certain
limited circumstances,” including “properly conducted
class actions” and “suits brought by trustees, guardians,
and other fiduciaries”); Tice, 162 F.3d at 973 (“[U]nless a
formal kind of successor interest is involved . . . , there
should be some indication . . . that the second party either
had participated or had a legal duty to participate.”); see
38
No. 08-2306
also R ESTATEMENT (SECOND) OF JUDGMENTS § 41 (similarly
limiting adequate-representation theory of privity). The
trademark litigation 44 years ago does not fit into this
limited category.
A finding of privity based on “adequate representation”
in the circumstances of this case would be entirely unwar-
ranted. The Hereditary Guardianship did not conduct the
underlying litigation as anything like a fiduciary for its
members, and there is no evidence to suggest it was acting
in a representative capacity for its followers personally. To
find privity based on “adequate representation” here
would treat every suit by an organization as having res
judicata and contempt implications for the organization’s
members individually. This is contrary to the Supreme
Court’s language in Taylor carefully limiting the scope of
the adequate-representation category of privity.
At bottom, this argument is an appeal to the theory of
“virtual representation,” which the Supreme Court has
firmly rejected in the field of claim preclusion. Taylor, 553
U.S. at 904. Having rejected virtual-representation theory
in its traditional res judicata setting, we see no reason why
the Supreme Court would view it more favorably in the
context of injunctions. The district court properly rejected
the attempt to bind the Second International Council and
Bahá’í Publishers through Jensen.
2. The Remey Connection
The National Spiritual Assembly also argues that the
Second International Council and Bahá’í Publishers are
No. 08-2306
39
bound by the injunction through privity with Remey. This
argument is based on trademark-registration filings with
the United States Patent and Trademark Office in which
Neal Chase, the current president of the Second Interna-
tional Council and Bahá’í Publishers, explained that the
throne to the “Davidic kingdom” passed by succession
from Bahá’u’lláh to Abdu’l-Bahá, to Charles Mason Remey,
to Pepe Remey (Remey’s adopted son), and now to him.
The National Spiritual Assembly treats these filings as an
admission of legal successorship to Remey, who in turn
was legally identified with the Hereditary Guardianship.
The district court treated the trademark-registration
filings as nonbinding evidentiary admissions rather than
binding judicial admissions. See Help at Home, Inc. v. Med.
Capital, L.L.C., 260 F.3d 748, 753 & n.2 (7th Cir. 2001);
Higgins v. Mississippi, 217 F.3d 951, 954 (7th Cir. 2000);
Murrey v. United States, 73 F.3d 1448, 1455 (7th Cir. 1996);
Keller v. United States, 58 F.3d 1194, 1198 n.8 (7th Cir. 1995).
The National Spiritual Assembly apparently agrees with
this characterization, but argues that the court gave them
insufficient weight. We find no fault with the district
court’s treatment of this factual matter. Other than the
version of spiritual-leadership succession described in
trademark filings, the National Spiritual Assembly offered
no evidence of a link between Remey and the Second
International Council or Bahá’í Publishers. Indeed, Remey
had no involvement in either organization and died more
than 25 years before the Second International Council was
established. Neither the Second International Council nor
Bahá’í Publishers received any money, property, or other
assets from Remey or the Hereditary Guardianship. On
40
No. 08-2306
these facts the district court properly concluded that the
Second International Council and Bahá’í Publishers are not
successors to Remey. See Walling, 321 U.S. at 674 (succes-
sors are “those to whom the business may have been
transferred”); Flowdata, 154 F.3d at 1355 (nonparty succes-
sorship liability under injunction requires a “substantial
continuity of identity”); cf. Golden State Bottling Co., 414
U.S. at 179 (finding bona fide purchaser of a business
enterprise was the legal successor to the enterprise and
thus subject to enterprise’s liability); Reich, 50 F.3d at 417 (a
company that “acquired the business subject to this court’s
order” was legal successor and bound by the order).
No. 08-2306
E. Second International Council and Bahá’í Publishers
The National Spiritual Assembly also challenges the
district court’s decision that the Second International
Council and Bahá’í Publishers are not bound by the
injunction. It offers two reasons for binding these
nonparties: First, they were created by Jensen, who (the
argument goes) was personally bound by the injunction;
and second, they are successors in interest to Remey, who
also was personally bound by the injunction.
1. The Jensen Connection
The district court rejected the contention that the Second
International Council and Bahá’í Publishers were in privity
with the Hereditary Guardianship through Jensen. After
declining to apply Merriam, the judge explicitly entered an
alternative holding that Jensen was not legally identified
with the Hereditary Guardianship even if Merriam applied.
The judge acknowledged that Jensen was an incorporator
of the Hereditary Guardianship, that he served as one of its
first board members, and that contemporaneous evidence
suggested that Jensen remained a follower of the Heredi-
tary Guardianship during the underlying litigation.
Nevertheless, the court found that Jensen disassociated
himself from any governing role in the organization shortly
after serving his one-year term on the board. This was well
before the underlying injunction was issued.
The National Spiritual Assembly disputes these findings.
It argues that Jensen’s extensive involvement with the
Hereditary Guardianship prior to the underlying litigation
No. 08-2306
37
establishes legal identity. We see no clear error in the
district court’s findings, which were amply supported by
the record. Jensen’s term on the Hereditary Guardianship
board ended in the middle of 1964; he was not reelected as
a board member. After he lost reelection, he did not serve
in a governance, advisory, or any other controlling position
in the Hereditary Guardianship, and he had no involve-
ment in the underlying litigation. As such, Jensen did not
occupy the sort of “key” role in the Hereditary Guardian-
ship—either generally or with respect to injunction litiga-
tion—that could form the basis of a “legal identity” finding
under Merriam.
The National Spiritual Assembly argues in the alternative
that Jensen (and by extension, the Second International
Council and the Bahá’í Publishers) should be bound by the
injunction because Jensen remained an adherent and the
Hereditary Guardianship adequately represented its
believers’ interests in the underlying suit against the
National Spiritual Assembly. The Supreme Court in Taylor
and our own recent decision in Tice recognize that the
concept of privity in preclusion doctrine includes a very
limited adequate-representation category. See Taylor, 553
U.S. at 894 (observing that “adequate representation” by
“someone with the same interests who [wa]s a party” to
the earlier suit sufficed for privity purposes “in certain
limited circumstances,” including “properly conducted
class actions” and “suits brought by trustees, guardians,
and other fiduciaries”); Tice, 162 F.3d at 973 (“[U]nless a
formal kind of successor interest is involved . . . , there
should be some indication . . . that the second party either
had participated or had a legal duty to participate.”); see
38
No. 08-2306
also R ESTATEMENT (SECOND) OF JUDGMENTS § 41 (similarly
limiting adequate-representation theory of privity). The
trademark litigation 44 years ago does not fit into this
limited category.
A finding of privity based on “adequate representation”
in the circumstances of this case would be entirely unwar-
ranted. The Hereditary Guardianship did not conduct the
underlying litigation as anything like a fiduciary for its
members, and there is no evidence to suggest it was acting
in a representative capacity for its followers personally. To
find privity based on “adequate representation” here
would treat every suit by an organization as having res
judicata and contempt implications for the organization’s
members individually. This is contrary to the Supreme
Court’s language in Taylor carefully limiting the scope of
the adequate-representation category of privity.
At bottom, this argument is an appeal to the theory of
“virtual representation,” which the Supreme Court has
firmly rejected in the field of claim preclusion. Taylor, 553
U.S. at 904. Having rejected virtual-representation theory
in its traditional res judicata setting, we see no reason why
the Supreme Court would view it more favorably in the
context of injunctions. The district court properly rejected
the attempt to bind the Second International Council and
Bahá’í Publishers through Jensen.
2. The Remey Connection
The National Spiritual Assembly also argues that the
Second International Council and Bahá’í Publishers are
No. 08-2306
39
bound by the injunction through privity with Remey. This
argument is based on trademark-registration filings with
the United States Patent and Trademark Office in which
Neal Chase, the current president of the Second Interna-
tional Council and Bahá’í Publishers, explained that the
throne to the “Davidic kingdom” passed by succession
from Bahá’u’lláh to Abdu’l-Bahá, to Charles Mason Remey,
to Pepe Remey (Remey’s adopted son), and now to him.
The National Spiritual Assembly treats these filings as an
admission of legal successorship to Remey, who in turn
was legally identified with the Hereditary Guardianship.
The district court treated the trademark-registration
filings as nonbinding evidentiary admissions rather than
binding judicial admissions. See Help at Home, Inc. v. Med.
Capital, L.L.C., 260 F.3d 748, 753 & n.2 (7th Cir. 2001);
Higgins v. Mississippi, 217 F.3d 951, 954 (7th Cir. 2000);
Murrey v. United States, 73 F.3d 1448, 1455 (7th Cir. 1996);
Keller v. United States, 58 F.3d 1194, 1198 n.8 (7th Cir. 1995).
The National Spiritual Assembly apparently agrees with
this characterization, but argues that the court gave them
insufficient weight. We find no fault with the district
court’s treatment of this factual matter. Other than the
version of spiritual-leadership succession described in
trademark filings, the National Spiritual Assembly offered
no evidence of a link between Remey and the Second
International Council or Bahá’í Publishers. Indeed, Remey
had no involvement in either organization and died more
than 25 years before the Second International Council was
established. Neither the Second International Council nor
Bahá’í Publishers received any money, property, or other
assets from Remey or the Hereditary Guardianship. On
40
No. 08-2306
these facts the district court properly concluded that the
Second International Council and Bahá’í Publishers are not
successors to Remey. See Walling, 321 U.S. at 674 (succes-
sors are “those to whom the business may have been
transferred”); Flowdata, 154 F.3d at 1355 (nonparty succes-
sorship liability under injunction requires a “substantial
continuity of identity”); cf. Golden State Bottling Co., 414
U.S. at 179 (finding bona fide purchaser of a business
enterprise was the legal successor to the enterprise and
thus subject to enterprise’s liability); Reich, 50 F.3d at 417 (a
company that “acquired the business subject to this court’s
order” was legal successor and bound by the order).
AFFIRMED.
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