Phyllis Schlafly Revocable Trust v. Cori, 17-2115
| Decision Date | 22 May 2019 |
| Docket Number | No. 17-2115, No. 17-3761,17-2115 |
| Citation | 924 F.3d 1004 |
| Parties | PHYLLIS SCHLAFLY REVOCABLE TRUST, a Missouri trust by its trustee, John Schlafly; Eagle Trust Fund, an unincorporated not-for-profit association by its sole members, Bruce Schlafly and John Schlafly, Plaintiffs-Appellants Eagle Forum Education and Legal Defense Fund, an Illinois not-for-profit corporation, Plaintiff v. Anne CORI, a Missouri resident; Eunice Smith, a Alabama resident; Cathie Adams, a Texas resident; Carolyn McLarty, a Oklahoma resident; Rosina Kovar, a Colorado resident; Shirley Curry, a Tennessee resident; Jane or John Doe, #1, residents of the several states, wherever situated; Eagle Forum, an Illinois not-for-profit corporation, Defendants-Appellees Phyllis Schlafly Revocable Trust, a Missouri trust by its trustee, John Schlafly; Eagle Trust Fund, an unincorporated not-for-profit association by its sole members, Bruce Schlafly and John Schlafly; Eagle Forum Education and Legal Defense Fund, an Illinois not-for-profit corporation, Plaintiffs-Appellants v. Anne Cori, a Missouri resident; Eunice Smith, a Alabama resident; Cathie Adams, a Texas resident; Carolyn McLarty, a Oklahoma resident; Rosina Kovar, a Colorado resident; Shirley Curry, a Tennessee resident; Jane or John Doe #1, residents of the several states, wherever situated; Jane or John Doe #2, residents of the several states, wherever situated; Jane or John Doe #3, residents of the several states, wherever situated; Jane or John Doe #4, residents of the several states, wherever situated; Jane or John Doe #5, residents of the several states, wherever situated; Eagle Forum, an Illinois not-for-profit corporation, Defendants-Appellees |
| Court | U.S. Court of Appeals — Eighth Circuit |
Jennifer E. Hoekel, Brendan Zee-Cheng, ARMSTRONG & TEASDALE, Saint Louis, MO, Ian A. Northon, RHOADES & MCKEE, Grand Rapids, MI, for Plaintiff-Appellant Phyllis Schlafly Revocable Trust.
Andrew P. Alexander, GRAVES & GARRETT, Kansas City, MO, Jennifer E. Hoekel, Brendan Zee-Cheng, ARMSTRONG & TEASDALE, Saint Louis, MO, Ian A. Northon, RHOADES & MCKEE, Grand Rapids, MI, for Plaintiff-Appellant Eagle Trust Fund.
Andrew P. Alexander, GRAVES & GARRETT, Kansas City, MO, Ian A. Northon, RHOADES & MCKEE, Grand Rapids, MI, for Plaintiff.
Eric David Block, Arthur David Gregg, Richard David Lageson, Megan Dana Meadows, Attorneys, Erik O. Solverud, SPENCER & FANE, Saint Louis, MO, for Defendants-Appellees.
Before BENTON, MELLOY, and KELLY, Circuit Judges.
In this consolidated appeal, the Phyllis Schlafly Revocable Trust (PSRT), Eagle Trust Fund (ETF), and Eagle Forum Education and Legal Defense Fund (EFELDF) (collectively, the trusts) appeal from the district court's1 denial of preliminary injunctive relief and its sua sponte order staying litigation. Having jurisdiction over the denial of preliminary injunctive relief under 28 U.S.C. § 1292(a)(1), we affirm. We dismiss the appeal of the order staying litigation for lack of appellate jurisdiction.
Conservative activist Phyllis Schlafly founded several nonprofit entities and associated trusts during her lifetime, including the four entities involved in this case: Eagle Forum and the trusts: PSRT, ETF, and EFELDF. Several of Phyllis Schlafly's adult children have held leadership positions in the nonprofits for some time.
In the spring of 2016, a rift developed among the siblings. On one side stood Phyllis Schlafly's youngest daughter, Anne Cori, backed by five of her fellow Eagle Forum board members: Eunice Smith, Cathie Adams, Carolyn McLarty, Rosina Kovar, and Shirley Curry. Together, these six members have become known as the "gang of six." On the other side stood Phyllis Schlafly's eldest son, John Schlafly, who supported the then-president of Eagle Forum, Ed Martin. On April 11, 2016, the gang of six voted, over John Schlafly's objection, to remove Martin from his position as president of Eagle Forum and to appoint Smith as acting president and Cori as executive director.
Two weeks later, on April 22, Phyllis Schlafly amended certain trust documents to remove Cori as a trustee of the PSRT. (The other trustee, John Schlafly, remained.) The same day, the gang of six filed suit against Martin, John Schlafly, and Eagle Forum in Madison County, Illinois, alleging that Martin continued to hold himself out as the president of Eagle Forum and that he and John Schlafly were blocking the gang of six from accessing the Eagle Forum headquarters and its property, including bank accounts, membership lists, and intellectual property. The Madison County court issued a temporary restraining order (TRO) enjoining John Schlafly and Martin from preventing the gang of six from accessing Eagle Forum's headquarters and property.
On May 26, Phyllis Schlafly amended the trust documents for the PSRT again, this time providing that prior to distribution of the trust proceeds amongst the siblings, Cori's share would be reduced by the litigation costs incurred by the defendants in the Madison County lawsuit and "in defense of any related lawsuit that may hereafter be brought during [Phyllis Schlafly's lifetime] relating to the same subject matter." She amended the trust documents a third time on August 31, providing that upon her death, the right to license all of her "copyrights, moral rights, intellectual property rights, and trademark rights," including "her name, persona, and likeness" and the "intangible literary property rights" associated with Eagle Forum and her other entities, would be "given to the Trustees of the Phyllis Schlafly Royalty Trust II." Phyllis Schlafly died six days later, on September 5.
Meanwhile, other litigation began. That same August, the gang of six filed suit in the Southern District of Illinois against Phyllis Schlafly's American Eagles—another entity headed by John Schlafly and Martin—claiming infringement of Eagle Forum's intellectual property. In October, the trusts filed the lawsuit underlying these consolidated appeals in the Eastern District of Missouri, claiming infringement of Phyllis Schlafly's intellectual property—which the PSRT claimed interest in pursuant to the August 31 amendment—by the gang of six.
One day later, the Madison County court found that John Schlafly and Martin had violated the TRO and therefore modified it to suspend their positions within Eagle Forum and allow the gang of six to "assume temporary sole control and possession over all Eagle Forum property," including some of the intellectual property at issue in the Eastern District of Missouri suit.
In November, the trusts filed a motion in the Eastern District of Missouri for a TRO and preliminary injunction enjoining the gang of six from using Phyllis Schlafly's intellectual property. In response, the gang of six argued that at least some of the intellectual property was owned by Eagle Forum and therefore was subject to the Madison County TRO. The Eastern District of Missouri denied the motion. On March 17, 2017, the trusts filed a second motion for a TRO and preliminary injunction, this time seeking to enjoin the gang of six from using the Eagle Logo mark and Phyllis Schlafly's name, likeness, and image. In support of their motion, they submitted Phyllis Schlafly's August 31 amendment to the PSRT, which they argued proved that the PSRT owned the intellectual property at issue in their motion,2 and affidavits stating that Phyllis Schlafly was of sound mind when she executed the August 31 amendment.
Three days later, Cori filed a petition in the St. Louis County probate court. She sought to set aside the May 26 and August 31 amendments to the PSRT, claiming that Phyllis Schlafly lacked testamentary capacity and was subject to undue influence when she executed the amendments.
On April 17, the Eastern District of Missouri denied the trusts' second motion for a TRO and preliminary injunction, concluding that the trusts had not established a likelihood of success on the merits, a threat of irreparable harm absent preliminary injunctive relief, or that the public interest would be served by preliminary injunctive relief. The court also ordered the parties to show cause why the proceedings in the case should not be stayed pending resolution of the Madison County lawsuit and the St. Louis County probate matter.
On November 15, after receiving the parties' responses, the court administratively closed the case, explaining that "the claims made and remedies sought in the Madison County lawsuit are substantially similar to those made and sought here," that both lawsuits "put the same property at issue and involve the same parties," and that rulings in the St. Louis County probate matter and the Southern District of Illinois lawsuit "may impact the property at issue in this case." It ordered the parties to submit status reports every six months and within 10 days of any final judgment or ruling on a dispositive motion in the related cases.
The trusts appeal the Eastern District of Missouri's denial of preliminary injunctive relief. They also appeal that court's stay of litigation.
We review the denial of a preliminary injunction for abuse of discretion. Barrett v. Claycomb, 705 F.3d 315, 320 (8th Cir. 2013). A district court abuses its discretion if it "rests its conclusion on clearly erroneous factual findings or erroneous legal conclusions." Id. (quoting Planned Parenthood Minn., N.D., S.D. v. Rounds, 530 F.3d 724, 733 (8th Cir. 2008) (en banc)). When determining whether to grant preliminary injunctive relief, district courts must consider the four Dataphase factors: "(1) the threat of irreparable harm to the movant; (2) the state of balance between this harm and the injury that granting the injunction will inflict on other parties litigant; (3) the probability that movant will succeed on the merits; and (4) the public interest." Id. (quoting Dataphase Sys., Inc. v. C L Sys., Inc., 640 F.2d 109, 114 (8th Cir. 1981) (en banc)). "Irreparable harm occurs...
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