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Lawn Managers, Inc. v. Progressive Lawn Managers, Inc.

United States District Court, E.D. Missouri, Eastern Division

January 9, 2017

LAWN MANAGERS, INC., Plaintiffs,
v.
PROGRESSIVE LAWN MANAGERS, INC., Defendant.

          MEMORANDUM AND ORDER STAYING ACTION PENDING STATE COURT CASE RESOLUTION

          DAVID D. NOCE UNITED STATES MAGISTRATE JUDGE

         On December 16, 2016, on motion of defendant, the court conferred with both parties about the management of this case. Following this conference, on its own motion, the court takes up the subject matter jurisdiction of the district court to decide this case in its current posture. “It is well established that a court has a special obligation to consider whether it has subject matter jurisdiction, ” and it may do so sua sponte where it believes that jurisdiction may be lacking. Hart v. United States, 630 F.3d 1085, 1089 (8th Cir. 2011); see also Fed. R. Civ. P. 12(h)(3).

         I. Background

         This trademark dispute arises out of a 2012 divorce between Randy Zweifel, the principal of plaintiff Lawn Managers, Inc., and Linda Smith (formerly Zweifel), the principal of defendant Progressive Lawn Managers, Inc. (ECF No. 1, ¶¶ 6-10). Prior to their divorce, Linda and Randy held equal ownership interests in plaintiff Lawn Managers, Inc. (ECF No. 30, Ex. 1 at § 5.01). As part of their marital settlement agreement, Linda and Randy divided their interests in the plaintiff corporation's residential accounts and accounts receivables by zip code. (Id. at § 5.02). Linda was awarded the accounts in certain specified zip codes, and Randy was awarded the accounts in other specified zip codes. (Id.) Linda agreed to assign all of her shares in the plaintiff corporation to Randy, who was permitted to retain the corporate name of "Lawn Managers, Inc." (Id.)

         Pursuant to the marital settlement agreement, Linda could then “establish a new lawn care company using the name Progressive Lawn Managers, Inc. doing business as Lawn Managers.” (Id. at § 5.06). Linda could use the name “Lawn Managers” for up to two years from the date of the divorce, at which time she must discontinue using the name Lawn Managers, though she would still be permitted to use the name “Progressive Lawn Managers, Inc.” (Id.) The divorce was finalized in May 2012. (Id. at Ex. 1). There have been a number of contempt motions in the state court based on alleged breaches of the divorce agreement, as well as motions to modify the divorce agreement. Following one such dispute in 2014, the parties agreed to extend Linda's right to use the name “Lawn Managers” for approximately six additional months, until Dec. 31, 2014. (ECF No. 30, Ex. 2). They specifically noted that she could continue to use the name Progressive Lawn Managers, Inc., after that date. (Id.) Additional motions for contempt and motions to modify are ongoing.

         Parallel to the divorce and post-dissolution proceedings, plaintiff Lawn Managers made certain applications with the United States Patent and Trademark Office. Before the divorce was finalized, plaintiff Lawn Managers filed an application to register its service mark, consisting of the words “Lawn Managers” within a rectangle atop two footprints. (ECF No. 1, Ex. 1). This was filed in November 2011, published in May 2012, and registered in August 2012. (Id.) Then, in February 2015, Lawn Managers filed an application to register the name “lawn managers.” (Id.) Registration was granted in October 2015. (Id.)

         In February 2016, Lawn Managers brought the instant federal trademark infringement suit against Progressive Lawn Managers under the Lanham Act, 15 U.S.C. § 1114, alleging that defendant's logo was too similar to its own and confusing consumers because the phrase “Lawn Managers” was the largest text of the logo. (ECF No. 1).

         In August, counsel for plaintiff Lawn Managers appeared at a post-divorce hearing in state court in order to protect plaintiff's trademark interests. (ECF No. 30, Ex. 4). That court noted it was not considering anything with regard to trademark at that time, but “either side could bring that up in a motion for contempt.” (Id.)

         Counsel for defendant subsequently asked this court for a supplemental case management conference to bring the overlapping nature of these suits to the court's attention. (ECF No. 30). Defendant has not made any written or oral jurisdictional motion and plaintiff has requested that the court require defendant to do so. (ECF No. 32). However, as noted above, a court may consider on its own motion whether it has subject matter jurisdiction to decide a case.

         II. Subject Matter Jurisdiction

         Plaintiff alleges that this controversy presents a federal question over which this court has original subject matter jurisdiction. (ECF No. 1, ¶ 3) (citing 15 U.S.C. § 1114, 1121 and 28 U.S.C. §§ 1331, 1338, 1367). While the complaint on its face may present such a question, there are nevertheless additional principles the court must consider in determining the justiciability of this case in federal court. Federal abstention is appropriate here because of the ongoing nature of the related state court proceedings, the strong state interest in domestic relations matters and enforcement of state judgments, and in order to promote wise and efficient judicial administration.

         A. Legal Standard

         While a federal court's obligation to hear and decide a case is “virtually unflagging, ” federal courts apply judicially-created abstention doctrines in specific, limited circumstances. Sprint Communications, Inc. v. Jacobs, 134 S.Ct. 584, 591 (2013) (citations omitted). Relevant here are the Younger and Colorado River forms of abstention. See Colorado River Water Conservation Dist. v. United States, 424 U.S. 800 (1976); Younger v. Harris, 401 U.S. 37 (1971).

         Federal courts apply Younger abstention to avoid interfering with two kinds of pending state civil cases: (1) enforcement proceedings and (2) cases involving “certain orders uniquely in furtherance of the state courts' ability to perform their judicial functions.” New Orleans Public Service, Inc. v. Council of City of New Orleans ...


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