Falwell Jr. sues brother over their late father’s trademark

Where Jerry Falwell Jr. alleged that his brother, Liberty University and another individual were improperly using the JERRY FALWELL trademark as well as the image and name of Jerry Falwell Sr., but there was already a pending circuit-court suit involving many of these issues, the court stayed this suit pending the outcome of that action.

Background

On September 13, 2023, Jerry Falwell Jr., filed an eight-count amended complaint. Counts One through Seven focus on the alleged misuse of intellectual property under federal and Virginia law by defendants Liberty University and Jerry Prevo. Count Eight, a claim for breach of fiduciary duty, names defendant Jonathan Falwell (the plaintiff’s brother). All defendants have filed motions to dismiss.

Jonathan Falwell

The only claim against Jonathan Falwell in the amended complaint is breach of fiduciary duty based on his conduct as to the Falwell Family Trust. This cause of action is not rooted in federal law. Nor is there diversity of citizenship, as both of the Falwell brothers are alleged to live in Virginia.

When a federal court has original jurisdiction over a civil case, it may exercise supplemental jurisdiction over claims that form part of the same case or controversy. However, a court “may decline to exercise supplemental jurisdiction” under a variety of circumstances, including when the claim “raises a novel or complex issue of State law” or “in exceptional circumstances, [when] there are other compelling reasons for declining jurisdiction.”

The court concludes that this case presents an exceptional circumstance and compelling reasons to decline supplemental jurisdiction over the claim against Jonathan Falwell. When plaintiff filed the amended complaint, which added the Count Eight breach of fiduciary duty claim against Jonathan Falwell to this action, he had already filed a petition for disqualification of trustee in a circuit court action. The allegations in that petition as to Jonathan Falwell’s actions and inactions regarding the Falwell Family Trust overlap substantially with those presented in the amended complaint.

Additionally, respect for the capacity of the state court and the interests of judicial economy counsel against exercising supplemental jurisdiction over this claim. And while breach of fiduciary duty is not novel in the abstract, the specific facts of this case require complex and novel application of Virginia law of trusts. For these reasons, the court considers it proper to decline to exercise supplemental jurisdiction over Count Eight.

Remaining defendants

Claims One through Seven focus on misuse of the Falwell IP by Liberty University and Jerry Prevo, and so the issue of who owns the Falwell IP is material to the resolution of these claims. Yet the question of who owns the Falwell IP — whether it belongs to the trust or to the Falwell siblings as tenants in common — is being litigated in the circuit court.

Proceeding with the claims against Liberty and Prevo in this action, during the pendency of the state court action regarding ownership of the Falwell IP would require substantially overlapping—if not wholly duplicative—argument and evidence from the parties, and overlapping legal and factual determinations from the court. To manage the docket with economy of time and effort for itself, counsel, and litigants, the court will stay the case until the issue of ownership is resolved in the circuit court.

So ordered.

Falwell v. Liberty University, Case No. 6:23-cv-40, Dec. 4, 2023. WDVA at Lynchburg (Moon). VLW 023-3-754. 7 pp.