A federal judge has declined to exercise supplemental jurisdiction over parts of a claim brought by Pop Warner Little Scholars, Inc. against an affiliate that had separated from the entity.
The dispute arose when the New Hampshire Pop Warner Football Conference separated from PWLS and became the New Hampshire Pee Wee Football Conference. The new entity kept the same acronym NHPWFC and even the same web site nhpwfc.org, but shifted its allegiance to one of plaintiff’s competitors, the American Youth Football & Cheer Association.
The plaintiff sued the defendants, seeking redress for registered trademark infringement (Count I), trademark dilution (Count II), violations of the Anti-cybersquatting Consumer Protection Act (Count III), unfair competition and false designation of origin (Count IV), fraudulent registration of a trade name under N.H. Rev. Stat. Ann. (RSA) 349:10 (Count IV), breach of fiduciary duty (Count VI), ultra vires (Count VII), breach of contract (Count VIII), and unfair and deceptive acts and practices in violation of RSA 7:28-f and RSA 358-A:2 (Count IX). The plaintiff also sought a declaratory judgment that the defendants lacked authority to change the New Hampshire Youth Football & Spirit Conference Articles of Agreement (Count V).
The defendants countered with a motion to dismiss the declaratory judgment, breach of fiduciary duty, and ultra vires claims on grounds that plaintiffs failed to join the New Hampshire Director of Charitable Trusts as an indispensable party to this action. The defendants also moved to dismiss the unfair and deceptive acts and practices claim on the same grounds, or alternatively, “because plaintiffs have failed to state a claim upon which relief can be granted.”
In its analysis of the case, the court promptly zeroed in on “a fundamental procedural issue that determines the proper disposition of this case. … Under 28 U.S.C. § 1367(a), a federal court with original jurisdiction over federal claims may also exercise ‘supplemental jurisdiction over all other claims that are so related to claims in the action within such original jurisdiction that they form part of the same case of controversy under Article III of the United States Constitution.’ In considering whether claims are sufficiently related so as to justify exercise of jurisdiction, courts consider whether the supplemental claims derive from the same ‘common nucleus of operative fact.’ Fafel v. DiPaola, 399 F.3d 403, 412 n.10 (1st Cir. 2005)(explaining that 28 U.S.C. § 1367(a) codifies the ‘common nucleus of operative fact’ test adopted in United Mine Workers v. Gibbs, 383 U.S. 715, 725, 86 S. Ct. 1130, 16 L. Ed. 2d 218 (1966).
“The substantive legal issues in this case fall into two broad, yet easily identified, categories,” the court continued. “The first involves trademark infringement and consumer confusion regarding the identity of NHYF and its association with Pop Warner. Although there is one state law claim that falls in that category, the bulk of these issues arise under federal law. The second broad category involves the scope of authority possessed by the NHYF board and whether its decision to dissociate from Pop Warner was lawful under New Hampshire’s charitable trust laws.
“While some common events underlie these various causes of action, the specific inquiries into each are distinct. Regardless of whether NHYF had the authority to dissociate from Pop Warner, it did so, and that change in affiliation may, as they allege, harm plaintiffs’ intellectual property rights. Put differently, whether consumers are likely to continue to believe that NHYF is associated with Pop Warner is a question wholly separate from whether NHYF had authority to change the affiliation of the underlying charitable trust.
“Further, the parties’ interests in each category of claims are different. Ms. Doughty and Mr. Patch, as individuals, have no interest in the Pop Warner trademarks, which serve to identify both the national organization and its football and cheerleading programs, as well as the local affiliates licensed to use such marks. There is no indication that Ms. Doughty or Mr. Patch, or any other individual has ever used a Pop Warner mark to identify any goods or services offered by them. Accordingly, neither Ms. Doughty nor Mr. Patch have rights in the Pop Warner marks.
“Similarly, Pop Warner has no legal interest in whether NHYF unlawfully changed its charitable purpose. While Pop Warner’s business in New Hampshire may have been harmed by NHYF’s decision to dissociate, whether NHYF breached its duties under state law is irrelevant to the trademark inquiry, which principally concerns consumer confusion.
“Simply put, the facts necessary to resolve the federal trademark issues are quite different from those necessary to resolve charitable trust issues that arise under state law. Because these two distinct categories of claims do not share a common nucleus of operative fact, the court declines to exercise supplemental jurisdiction over the breach of fiduciary duty (Count VI), ultra vires (Count VII), breach of contract (Count VIII), and unfair and deceptive practices (Count IX) claims.”
The court also declined to exercise jurisdiction over the plaintiffs’ request for a declaratory judgment (Count V). “The Declaratory Judgment Act, 28 U.S.C. § 2201, provides that a court ‘may declare the rights and other legal relations of any interested party seeking such declaration, whether or not further relief is or could be sought.’ The Act, however, is ‘an enabling Act, which confers discretion on the courts rather than an absolute right upon the litigant;’ courts have broad discretion to decline to enter a declaratory judgment.” DeNovellis v. Shalala, 124 F.3d 298, 313 (1st Cir. 1997)(quoting Wilton v. Seven Falls Co., 515 U.S. 277, 287, 115 S. Ct. 2137, 132 L. Ed. 2d 214 (1995)). ‘In the declaratory judgment context, the normal principle that federal courts should adjudicate claims within their jurisdiction yields to considerations of practicality and wise judicial administration.’ Id. (quoting Wilton, 515 U.S. at 288).
“The issues presented in plaintiffs’ request for a declaratory judgment are governed entirely by state law and require factual and legal inquiries wholly distinct from those necessary to adjudicate the federal trademark issues. Accordingly, in the interest of comity and judicial economy, the court declines to exercise its authority under the Declaratory Judgment Act.
“For the foregoing reasons, the court declines to exercise supplemental jurisdiction over Counts VI-IX and declines to exercise its jurisdiction under the Declaratory Judgment Act as to Count V. Accordingly, those claims are dismissed without prejudice, and defendants’ motions to dismiss are denied as moot. What remains, then, are the state and federal intellectual property claims (Counts I, II, III, IV, and IV), which may well be amenable to settlement by agreement, or on summary judgment.”
Pop Warner Little Scholars, Inc. et al. v. New Hampshire Youth Football & Spirit Conference et al.; D.N.H.; Civil No. 06-cv-98-SM, 2007 DNH 27; 2007 U.S. Dist. LEXIS 15102; 3/1/07
Attorneys of Record: (for plaintiffs) Thomas J. Donovan, LEAD ATTORNEY, McLane Graf Raulerson & Middleton, Manchester, NH; Adam M. Hamel, McLane Graf Raulerson Middleton, Manchester, NH. (for defendants) Michael D. Ramsdell, Kacavas Ramsdell & Howard PLLC, Manchester, NH.
