N.A.A.C.P. v. N.A.A.C.P. Legal Defense & Educational Fund, Inc.
| Decision Date | 26 February 1985 |
| Docket Number | No. 83-1719,83-1719 |
| Citation | 753 F.2d 131 |
| Parties | , 225 U.S.P.Q. 264 NATIONAL ASSOCIATION FOR THE ADVANCEMENT OF COLORED PEOPLE, aka NAACP v. N.A.A.C.P. LEGAL DEFENSE & EDUCATIONAL FUND, INC., Appellant. |
| Court | U.S. Court of Appeals — District of Columbia Circuit |
Jay Topkis, New York City, of the Bar of the United States Supreme Court, pro hac vice, by special leave of the Court and William T. Coleman, Jr., Washington, D.C., with whom Vernon E. Jordan, Jr., Daniel Joseph, Randall L. Sarosdy and Barrington D. Parker, Jr., Washington, D.C., were on the brief, for appellant. Sidney S. Rosdeitcher, Washington, D.C., also entered an appearance for appellant.
Edward W. Brooke, Washington, D.C., with whom Barry J. Cutler and Judith Hall Howard, Washington, D.C., were on the brief, for appellee.
Before MIKVA and BORK, Circuit Judges, and BAZELON, Senior Circuit Judge.
Opinion for the Court filed by Senior Circuit Judge BAZELON.
Two civil rights organizations contend for the right to use the initials "NAACP" as their trademark. The National Association for the Advancement of Colored People (the Association) alleges that the continued use of the NAACP initials by the NAACP Legal Defense and Education Fund, Inc. (the LDF) constitutes a trademark infringement. 1 The LDF replies that the Association irrevocably granted it the right to use the initials. The LDF also maintains, inter alia, that the Association's suit is barred by laches. In the district court, both sides moved for summary judgment. 2 The court granted the Association's motion and ordered the LDF to refrain from using the NAACP initials. Because the district court erred in denying the LDF's defense of laches, its judgment is reversed.
The material facts are undisputed. 3 The Association, known as "the NAACP," was founded in 1909, 4 and listed among its goals:
to promote equality of rights and eradicate caste or race prejudice among the citizens of the United States; to advance the interests of colored citizens; to secure for them impartial suffrage; and to increase their opportunities for securing justice in the courts, education for their children, employment according to their ability, and complete equality before the law. 5
The Association has sought to achieve its goals through educational work, legislative activity, and litigation. 6
As early as 1936, 7 the Association's Board of Directors voted to organize a national defense fund to raise money for its litigation program. 8 Besides serving as a means to ensure on-going financing of civil rights litigation, the creation of the LDF provided an important tax advantage. 9 The Bureau of Internal Revenue had ruled that contributions to the Association were not deductible for federal income tax purposes because of the Association's lobbying work. Hence, the creation of a separate organization to perform the Association's legal work allowed contributors wishing to support its nonpolitical activities to receive tax deductions. 10
The Association's Board of Directors was informed by the New York Secretary of State that a certificate of incorporation could be processed only if the new corporation obtained "consent" from the Association to the use of the NAACP initials. 11 The Association's Board of Directors then passed the following resolution on October 9, 1939:
BE IT RESOLVED, That the Board of Directors of the National Association for the Advancement of Colored People grant permission for the use of the initials, "N.A.A.C.P." by the "N.A.A.C.P. Legal Defense and Education Fund, Inc." and authorize the President and Secretary to execute whatever papers might be necessary to carry out this resolution. 12
The State of New York approved the incorporation of the LDF in 1940. 13
From 1940 to 1957, the LDF served as a subsidiary of the Association. Although funds were kept in separate accounts, all the LDF's first directors were members of the Association's board. 14 The Association solicited contributors by explaining that they could help the Association by making tax-deductible contributions to the LDF. 15 Apparently some gifts contributed directly to the Association were placed in the LDF fund, and the contributor was then notified that his contribution was deductible for federal income tax purposes. 16 The allocation of contributions between the LDF and the Association was not based upon who made the solicitation, but upon the purpose for which the money was used--so funds used for lobbying could only go to the Association, while funds used for litigation would go to the LDF. 17
During this initial period, the LDF was under its progenitor's direct control. The two organizations had common directors, offices, and staff. 18 Throughout the 1940's and into the 1950's, the LDF was guided by the Association's National Office's policy decisions regarding the handling of litigation. In particular cases, the Association's Board of Directors' approval was sought before proceeding. 19 The LDF, as the legal branch of the Association, routinely handled general legal matters of the Association.
In 1957, however, the LDF and the Association mutually agreed to the LDF's independence. A gradual shift in that direction had suddenly been accelerated by external forces. The U.S. Treasury Department and several Southern state officials challenged the LDF's tax-exempt status. 20 The Southern state officials claimed that the LDF had too close a relationship with the Association, which was engaged in lobbying and political activities. 21 The U.S. Treasury Department objected to the sharing of board members and the NAACP initials. 22 In response, the Association and LDF decided that the LDF should retain its NAACP initials but should sever all direct connections with the Association. 23 On May 16, 1957, the LDF's board adopted a resolution that "no person should be a Board member, officer or employee of this corporation who is also a Board member, officer or employee of the N.A.A.C.P." 24
The board, budget, staff, and program of both organizations were completely separated. 25 The LDF now came under the direct control of its own board of directors. Since 1957, the LDF has spent over eleven million dollars soliciting contributions using the NAACP initials. 26 The LDF continued to function as the Association's outside counsel, and coordinated its efforts with those of the Association in cases directly involving the Association's branches and individual members. 27 However, the LDF also sought other clients who had no connection with the Association. 28
The independence of the LDF from the Association was reported to the Treasury Department which never again challenged the LDF's tax-exempt status. 29 Donations occasionally made to the wrong organization were forwarded to the intended beneficiary. Contributors were instructed about the tax deductibility of their donations, 30 as well as advised about the total separateness of the two organizations. 31
Because such scrupulous organizational separation precluded "direct and formal control of the Inc. Fund [LDF] by the NAACP Board," 32 cooperation between the two parties relied upon personal ties and common policy interests. But by the 1960's, however, tensions between the two organizations became evident, 33 despite the formation of several liaison committees established between 1960-62 and 1965-66. 34 These strained relations resulted from a heightening of direct competition in fundraising. 35 There was also a dispute over who should take public credit for successful civil rights litigation. 36 Although both organizations publicly attempted to deemphasize any explicit competition, 37 the tensions between them continued to heighten. 38
In July 1965, the Association's Board adopted a resolution 39:
it was VOTED that the Inc. Fund [the LDF] be approached by the Chairman of the Board, the Executive Director, the Treasury, and the Chairman of the Special Contribution Fund for the purpose of requesting the Inc. Fund to voluntarily reincorporate under a name that does not include NAACP; or to bring the Inc. Fund back into Special Contribution Fund status; and, if they refuse to do so, the NAACP should go into court and enjoin them from use of the name NAACP. 40
The Association's Executive Director orally conveyed this request and threat of suit to the Director of the LDF, who rejected the demand. 41 At the Association's September 12, 1965 meeting, the Association's Board formally withdrew the language of its resolution threatening suit.
The Executive Director reported that the Legal Committee has suggested that a phrase in the July 2, 1965, minutes [page 4], to wit: "and, if they refuse to do so, the NAACP should go into court and enjoin them from use of the name NAACP," be stricken from the minutes .... [B]ecause of the feeling of the Legal Committee that it was impolitic to have such a phrase on record and, additionally, that it would have no standing in court, it was voted unanimously, on motion by Mr. Alexander, duly seconded, that the phrase be stricken from the minutes .... 42
Thereupon, the Association's Executive Director told the Director of the LDF that the threatening language had been withdrawn. 43 On February 24, 1966, representatives of both sides met to discuss their relationship. It was suggested again that the LDF change its name but the LDF declined. 44
During the next twelve years, from 1966 through 1978, the Association remained silent concerning the LDF's use of the NAACP initials. 45 The Association did not give clear notice to the LDF about reserving its exclusive claim to the NAACP initials. There were no negotiations. Cooperative interchanges between the LDF and the Association's attorneys waned. 46 The Association itself indicated that during this time, the LDF "pursued an independent course of action ... without...
To continue reading
Request your trial
-
U.S. v. State of La.
...is founded on the notion that equity aids the vigilant and not those who slumber on their rights." NAACP v. NAACP Legal Defense & Educational Fund, Inc., 753 F.2d 131, 137 (D.C.Cir.), cert. denied, 472 U.S. 1021, 105 S.Ct. 3489, 87 L.Ed.2d 623 (1985). "`The law of laches, like the principle......
-
Gates v. Dist. of Columbia
...under District of Columbia law that laches is a defense to an action in equity.” (citing N.A.A.C.P. v. N.A.A.C.P. Legal Def. & Educ. Fund, Inc., 753 F.2d 131, 137–38 (D.C.Cir.1985) ; Powell v. Zuckert, 366 F.2d 634, 636 (D.C.Cir.1966) ). When the “right [the plaintiff] purportedly would vin......
-
Live365 Inc v. Copyright Royalty Bd.
...an unreasonable delay under the laches doctrine by courts in this Circuit. See, e.g., N.A.A.C.P. v. N.A.A.C.P. Legal Defense & Educational Fund, Inc., 753 F.2d 131, 137 (D.C.Cir.1985) (holding that thirteen year delay in resuming negotiations with defendant constituted unreasonable Pro-Foot......
-
Sierra Club v. Marsh
...delay to the plaintiffs or, for that matter, reasonable reliance on the part of the defendants. See NAACP v. Legal Defense & Education Fund, 753 F.2d 131, 136-37 (D.C.Cir.), cert. denied, 472 U.S. 1021, 105 S.Ct. 3489, 87 L.Ed.2d 623 67 The proposed site of the Sears Island cargo terminal l......
-
The One Year Limit on Removal: an Ace Up the Sleeve of the Unscrupulous Litigant?
...of Gov't Employees v. Public Service Board, 40 F.3d 698, 708 (5th Cir. 1994) (quoting NAACP v. NAACP Legal Defense & Educ. Fund, Inc., 753 F.2d 131, 137 (D.C. Cir. 1985)); Ferguson, 996 F. Supp. at 603; Caudill, 271 F. Supp. 2d at 1328; Clark, No. 04-1537,2004 U.S. Dist. LEXIS 14224, at *5-......