Fund for Community Progress v. United Way of Southeastern New England

• Decision Date: 25 June 1997
• Docket Number: No. 95-443-A,95-443-A
• Citation: 695 A.2d 517
• Parties: , 25 Media L. Rep. 2431 The FUND FOR COMMUNITY PROGRESS v. UNITED WAY OF SOUTHEASTERN NEW ENGLAND. ppeal.
• Court: Rhode Island Supreme Court

Page 517

695 A.2d 517

43 U.S.P.Q.2d 1683, 25 Media L. Rep. 2431

The FUND FOR COMMUNITY PROGRESS v. UNITED WAY OF SOUTHEASTERN NEW ENGLAND.

No. 95-443-Appeal.

Supreme Court of Rhode Island.

June 25, 1997.

Mortimer C. Newton, Providence, for Plaintiff.

David A. Wollin, Providence, for Defendant.

Before WEISBERGER, C.J., and LEDERBERG, BOURCIER and FLANDERS, JJ.

OPINION

BOURCIER, Justice.

United Way of Southeastern New England appeals from the entry of a preliminary injunction enjoining it from continuing to include and display the name and logo of the Fund for Community Progress in its solicitation materials. It contends here on appeal that the preliminary injunction is tantamount to a prior restraint in violation of its right of free speech guaranteed pursuant to the First Amendment to the United States Constitution as well as constituting an abuse of discretion on the part of the Superior Court trial justice. We disagree with both contentions and affirm the order entered below.

The findings made below reveal that the United Way of Southeastern New England (the United Way) and the Fund for Community Progress (the Fund) are both nonprofit charities that act as "umbrella organizations," collecting money for and distributing it to other affiliated charities. Both organizations offer informational literature to prospective donors regarding the benefits of charitable giving and the type of charitable work performed by their affiliated charities. In addition to providing this literature, the United Way and the Fund conduct work site fund-drives in which they present speakers at places of business or other institutions to discuss charitable giving.

In performing its fundraising activities, the United Way often solicits contributions through the use of donor-choice forms. These forms list the numerous charities on whose behalf the United Way will collect donations. The forms are distributed at various commercial and business institutions and are often presented in conjunction with a United Way speaker. From approximately 1989, the United Way has listed the Fund's name and logo on its donor-choice forms and in its other informational literature. However, unlike the other charities listed on the United Way's donor-choice forms, the Fund has never given the United Way express permission to use its name or logo. Although this casual relationship may initially have been amenable to both the Fund and the United Way, as time progressed, the Fund decided that its charitable philosophy was so sufficiently distinct from that of the United Way that it no longer wished to continue to be affiliated with the United Way and wanted to conduct its own separate solicitation campaigns. As a result the Fund informed the United Way of its interest in having its name and logo removed from certain United Way campaign literature and donor-choice forms. Despite the Fund's insistence that its name and logo be used only as it directed, the United Way nonetheless continued to make full use of the Fund's name and logo without abatement. In a series of letters written in 1993 by Nondas Hurst Voll (Voll), the executive director of the Fund, to the president of the United Way, W. Douglas Ashby (Ashby), Voll finally requested that the United Way discontinue using its name and logo. Ashby, however, rather than follow the Fund's wishes, reiterated to Voll the benefits of being a part of the United Way and the United Way's efforts to make sure that donors understood the unique goals of the Fund.

The dispute between the parties remained unresolved until 1994 when Voll learned that the Fund's name and logo would be used again, this time on the United Way's 1994 marketing brochure. In response, on July 27, 1994, Voll wrote to Ashby and described the Fund's wishes explicitly:

"The Fund for Community Progress does not grant permission to the United Way of Southeastern New England to use the name of, or other information about, The Fund for Community Progress and any or all of its 22 member agencies in any United Way administered campaign or fund-raising materials, other than in the State Employees Charitable Appeal (SECA) and the Combined Federal Campaign (CFC) which are managed by People Services, Inc., a subsidiary of the United Way of Southeastern New England."

The United Way did not respond favorably to the Fund's request, and thereafter, in September of 1994, the Fund filed an action in the Providence County Superior Court, seeking both temporary and permanent injunctive relief.

A hearing was held before a justice of that Court on September 26, 1994, on the Fund's request for a temporary restraining order, and after denial thereof the case was assigned for hearing on the Fund's request for a preliminary injunction. Hearings thereon were conducted over the course of the next few months.

At those hearings the Fund asserted that it would be likely to succeed at trial against the United Way on claims of common law unfair competition and tortious interference with advantageous relations. A third claim that the United Way was violating G.L.1956 § 9-1-28 was initially asserted but later withdrawn.

Regarding the unfair competition claim, the Fund asserted that the United Way's activities created public confusion as to the affiliation of the two organizations. The Fund asserted that because many institutions and their donor employees believed that the United Way had permission to campaign for the Fund, many employers would opt to permit only the United Way to conduct work site fund-drives rather than allow the Fund to conduct its own. According to the Fund, the United Way was deliberately attempting to create confusion so as to exclude the Fund from many work sites. In support of its claim the Fund offered testimony from an employee of the Rhode Island Public Transportation Authority (RIPTA) and from an employee of the Cavanagh Co. Both testified that the listing of the Fund in the United Way solicitation literature caused them to question whether the Fund, to which they wished to donate, was a donor option in the United Way solicitation campaign. The Fund also alleged that the harm caused by the United Way's acts of unfair competition affected its good will and unique identity and was thus the type of irreparable injury not compensable by legal damages.

The United Way asserted that its use of the Fund's name and logo for the purpose of informing the public was fully protected speech under the First Amendment and that any injunction prior to publication would amount to an unconstitutional prior restraint. The United Way additionally argued that the Fund had failed to demonstrate its right to a preliminary injunction. It asserted that there was no showing of probable irreparable injury because all moneys collected by the United Way on behalf of the Fund went directly to the Fund without any deduction. The United Way also contended that the Fund had failed to show a likelihood of succeeding on the merits of its claim of unfair competition because it did not demonstrate any likelihood of confusion.

The hearing justice granted the Fund's request for a preliminary injunction, concluding that

"use of the [Fund's] name and logo in the [United Way's] solicitations has had the result, in fact, of excluding the plaintiff from pursuing its own business of making workplace solicitations in some marketplaces, either independently or in a side-by-side solicitation presentation. By virtue of the [United Way's] exploitation of the [Fund's] name and identity as a purported assenting participant in the [United Way's] fund-raising, the [United Way] has effectively foreclosed any chance the [Fund] might have had to compete in certain marketplaces."

He further found that

"[t]he [United Way's] false and misleading implied assertion that it is authorized to solicit charitable funds on behalf of the [Fund] has harmed the [Fund] by depriving [the Fund] of its distinctive identity in the charitable marketplace. It has further harmed the [Fund] by interfering with its opportunity to compete in the work-site charitable solicitation marketplace as the Court has just pointed out."

On that basis the trial justice concluded that there was a substantial likelihood of the Fund's success on the merits, particularly on its claim of unfair competition and preliminarily enjoined the United Way's use of the Fund's name and logo.

We note at the outset that in appealing from the grant of a preliminary injunction, the United Way bears a heavy burden. We have long recognized that an application for temporary injunctive relief is "addressed to a trial justice's sound discretion." Coolbeth v. Berberian, 112 R.I. 558, 564, 313 A.2d 656, 660 (1974). Upon review, we will not disturb the exercise of a hearing justice's discretion on an application for a preliminary injunction unless it is reasonably clear that the hearing justice illegally exercised his or her discretion, or has abused his or her discretion. See id. at 564-65, 313 A.2d at 660; see also Pawtucket Teachers Alliance Local No. 920 v. Brady, 556 A.2d 556, 557 (R.I.1989); Paramount Office Supply Co. v. D.A. MacIsaac, Inc., 524 A.2d 1099, 1101 (R.I.1987).

As a first matter we consider the United Way's contention that the hearing justice in this case abused his discretion in considering the requisite factors in granting the preliminary injunction. Though variously articulated in our decisions, the criteria a hearing justice should consider in deciding whether to grant a preliminary injunction are well settled. See, e.g., In re State Employees' Unions, 587 A.2d 919 (R.I.1991). The moving party seeking a preliminary injunction must demonstrate that it stands to suffer some irreparable harm that is presently threatened or imminent and for which no adequate legal remedy exists to restore that plaintiff to its rightful position. See Brown v. Amaral, 460 A.2d 7, 10 (R.I.1983); Rhode Island Turnpike & Bridge Authority v. Cohen, ...