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IN THE UNITED STATES DISTRICT COURT

FOR THE SOUTHERN DISTRICT OF TEXAS 8

HOUSTON DIVISION

Urantia FOUNDATION, an Illinois Foundation,

Plaintiff,

v.

FIRST Urantia SOCIETY OF HOUSTON, INC., KERMIT LAURENT, CATHY FUSCO, SUE V. BRAZELL, JOHN CHARLES, JR., and WILLIAM A. BRAZELL, (also known as W. Allen Brazell),

Defendants.

No. H-80-1428

Judge Gabrielle K. McDonald

Order

This matter having come before the Court on plaintiff's Motion for Summary Judgment and the Court having held one evidentiary hearing, received and reviewed additional evidence, reviewed legal memoranda of the parties and heard oral argument in support of and in opposition to plaintiff's Motion, IT IS HEREBY ORDERED, ADJUDGED and DECREED AS FOLLOWS:

1. Judgment is he hereby entered in favor of plaintiff and against defendants and each of them.

2. Defendant First Urantia Society of Houston, Inc. shall amend its Articles of Incorporation to change its name to delete any use of the word "Urantia" or colorable variation thereof, and shall file such amendment with the Secretary of the State of Texas within fifteen days of this order. Defendant corporation's new name shall not imply in any way that it is a licensed affiliate of plaintiff or any of its licensees.

3. Kermit Laurent, Cathy Fusco, Sue,V. Brazell, John Charles, Jr., and William A. Brazell (also known as W. Allen Brazell), and each of them, are hereby permanently enjoined from forming or joining any organization, including an association, corporation, foundation or other group or entity having a name or styling which uses the word "Urantia" 0 . r any colorable variation thereof unless that organization is chartered by Urantia Brotherhood or otherwise licensed by plaintiff.

4. Defendants First Urantia Society of Houston, Inc., Kermit Laurent, Cathy Fusco, Sue V. Brazell, John Charles, Jr. and William A. Brazell (also known as W. Allen Brazell), and each of them, are hereby permanently enjoined from offering any services employing or in association with the terms "Urantia" or "UrantiaN" or colorable variations of those terms in a manner as to suggest that such services are offered or supplied in association with or under the sponsorship or auspices of Urantia Foundation, Urantia Brotherhood or any of their licensees or affiliates.

United States District Judge

Date: Sept. 23, 1982

IN THE UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF TEXAS FOR THE SOUTHERN DISTRICT OF TEXAS HOUSTON DIVISION Urantia FOUNDATION Plaintiff,

V.

FIRST Urantia SOCIETY OF HOUSTON, INC., ET AL. 1.9

Defendants.

CIVIL ACTON NO. H-80-1428

ORDER

Before the Court is plaintiff's Motion for Summary Judgment. This is an action brought under the Lanham Act, 15 U.S.C. 1114 (1976) for infringement of trademark, service mark and collective trademark. Plaintiff, Urantia Foundation, a not-for-profit educational foundation with a religious purpose, owns the marks "Urantia" and "Urantian". It licenses the Urantia Brotherhood, a social and fraternal organization with religious objectives to use the trademark "Urantia" in its distribution of the "Urantia Book" which the Foundation publishes, and to use the Foundation's marks. It also licenses local groups to use the service mark. The Brotherhood, in turn, charters local social and fraternal groups with religious objectives granting them the license to use the collective membership mark, "Urantia" and making their members members of the Brotherhood. It chartered a group in Houston in 1971 called First Urantia Society of Houston.

Defendants are a local group calling itself the Urantia Society of Houston, Inc., organized in 1979 by former members of the original chartered group, and individual members of that group. Plaintiffs claim that defendants have violated the Lanham Act by taking and using the corporate name "Urantia" without authorization from plaintiff's licensee, the Urantia Brotherhood, and without a license from the Foundation itself. On July 16, 1.980, this Court denied plaintiff's request for a preliminary injunction on the ground that it had not shown a likelihood of success on the merits. At that time the Court expressed the opinion that the case presented an issue which could best be resolved by the Urantia organization internally, outside of the federal court.

The parties have stipulated that the Urantia Brotherhood's judicial committee, following a hearing on December 12 and 13, 1980, officially determined that defendants are not associated with plaintiff or chartered by the Brotherhood, and that defendants, although they were given notice and an opportunity to ap!,3ear, chose not to attend or participate in the hearing and have not appealed the committee's decision within the Urantia organization.

Plaintiff now moves for summary judgment on the grounds that the Brotherhood's findings, as the actions of a private association, are conclusive in this court, and that even if they are not, defendants do not point to any facts from which the court may infer that the original officers of the Houston group abandoned or were properly removed from their offices according to the group's constitution and by-laws, and thus that these original officers and not defendants are the holders of the charter. Finally, it asserts that defendants' affirmative defenses are both resolved in plaintiff's favor by the Brotherhood's determination, and barred by the doctrine of licensee estoppel.

Defendants respond, first, that they are the holders of the original Houston society charter which has not been revoked, that as a result of a local, internal controversy in the Houston group in the summer of 1979, defendants took action which resulted in some of them becoming spokesmen for the Houston Urantia Society which is authorized by charter from the Brotherhood to use the word Urantia, i.e., that there is a single Houston group, and the only dispute is as to which of two sets of leaders is the proper one and that this is a purely local matter. They argue, second, that there is a fact issue regarding whether the Brotherhood's judicial committee hearing was fair. In addition, they claim that the plaintiffs are barred from summary judgment by the defenses of laches, misrepresentation of the source of the trademark, and failure to exercise control over the marks.

The Urantia Foundation, the Urantia Brotherhood and its constituent local Urantia societies constitute a private association. The well-established rule in Texas with required to private associations is that, the civil courts will not interfere with the internal operations of such associations of private individuals or assume to review their failure to conduct their business affairs according to the laws and rules of the order except for the purpose of protecting some civil or property right of the party complaining.

Gaines v. Farmer, 55 Tex.Civ.App. 601, 119 S.W. 874, 877 (1909 writ dism'd w.o.j.). On the other hand, the Courts "will not hesitate, when some valuable or property right is involved, to entertain jurisdiction and afford relief."

Owens Entertainment Club v. Owens Community Improvement Club, et al., 466 S.W.2d 70, 72 (Tex.Civ.App. 1.971)(citations omitted). In this case plaintiff has a litigable interest based on its property rights in its service mark and collective trademarks and the parties do not dispute the Court's jurisdiction.

However, where a member's property rights, for example, his right to make a living, are involved, the Court's review is limited:

[The courts will interfere to ascertain whether or not the proceedings within the [association] were pursuant to rules and laws of the [association] and whether there was anything therein in violation of the laws of the land . . . [Because] "[t]he articles of association or constitution and the bylaws so agreed upon constitute a contract which the courts will enforce both as between the members themselves and as between the association on the one hand and the individual members on the other, and their rights and powers, and duties and liabilities are measured accordingly." Lundine v. McKinney, 183 S.14.2d 265, 273 (Tex.Civ.App.-Eastland 1944), quoting 7 CJS associations, Section 11, at 34,(where plaintiffs alleged defendants ousted the officers of a labor union from office.) As stated more recently, "[b]y their voluntary assent to the rules of the [a]ssociation [defendants] have bound themselves to abide by all lawful limitations imposed by [a]ssociation rules, and courts will not interfere with a reasonable interpretation placed by the [a]ssociation on those rules." Combs v. Texas State Teachers Association, 533 S.W.2d,911, 913 (Tex.Civ.App. 1973), citing Brotherhood of Railroad Trainman v. Price, 108 S.W.2d 239 (Tex.Civ.App. 1937).

Similarly, the United States Court of Appeals for the Fifth Circuit has stated in Hatley v. American Quarter Horse Association, 552 F.2d 646, 656 (5th Cir. 1977) that Texas courts, in adjudicating claims related to property rights stemming membership require something akin to traditional due process on the part of voluntary associations . . . Normally organizations are free to promulgate rules regarding eligibility for an admission to membership. These rules are enforced by the courts "unless they are against good morals or violate the laws of the state." . . Texas courts preach and practice noninterference so long as the governing bodies heed the bounds of reason, common sense and fairness, and do not violate public policy or law . . . . By analogy . . . . a pecuniary right incident to membership, (is] similarly insulated from judicial review only insofar as [it is) reasonable in substance and administration.

(citations omitted). In this case, it is undisputed that the proceedings of the Brotherhood were pursuant to its own rules and laws.

Even if the Court adopts defendants' theory that the dispute. is not between two separate local groups, but between two sets of leaders of a single group, it comes within the jurisdiction of the Urantia Brotherhood Judicial Committee. Art. 3 of the Brotherhood's Constitution provides that the local Urantia Societies be "autonomous in conduct of their local affairs, but subservient to this constitution, chartered by, and inseparably associated with, the integrant organization (i.e., the Urantia Brotherhood). Art. 5, ~4 provides that each local society "shall be autonomous in all matters of its government and activities, including the termination of its membership, except as limited by [the] Constitution or delegated to . . . one or more of the Departmental Committees. Art. 11, 9 of the Constitution provides that the Brotherhood's Judicial Committee as the Supreme Arbitrating Body has jurisdiction to resolve "differences between (local) Urantia Societies, or between any Urantia Society and any member thereof, or between any members or groups of members," and to render opinions on the construction of the Constitution and By-laws of the Brotherhood. The dispute in this case is clearly a dispute between two groups of members.

In this case, the Urantia Brotherhood Judicial Committee Hearing held to consider revocation of the Houston Urantia Society's charter has resolved the dispute between the parties.

The findings of the Committee relating to its jurisdiction, Which defendant stipulates have been incorporated and adopted by the Urantia Brotherhood, include the following:

1. The Committee had jurisdiction under Art. 5, q6 of the Brotherhood's Constitution "to determine all intermediate and ancillary issues of fact which are reasonable, appropriate or necessary to be determined in order to reach the-ultimate issue" of charter revocation, including "the identity of the true officers" of the Houston Urantia Society in 1979 and 1980 and "whether or not the First Urantia Society of Houston has validly executed a licensing agreement with the Urantia Foundation (II of Findings);

2. The Committee had "jurisdiction" to determine the identity of the true officers under Art. 11, 9 of The Urantia Brotherhood Constitution and "to determine whether or not the Texas Corporation known as the First Urantia Society of Houston, Inc. is the identical organization as the First Urantia Society of Houston Charter by the Urantia Brotherhood" (III of Findings);

3. The controversy in the Houston group was "not purely local in import or effect," and proper construction of Brotherhood By-laws and Constitution and a Local Society's constitution is that Judicial Committee activities are exempt from the rule of local society autonomy provided in the Brotherhood's Constitution Art. 5, F 4, 6, and Art. 11, S9 and the Local Constitution, Art. III. (IV of Findings)

(Exhibit B in support of Plaintiff's Motion for Summary Judgment.)

Because defendants apparently do not dispute that the Committee hearing and findings conformed to the Constitution of the Brotherhood, the remaining issue for the Court is whether or not defendants have raised a genuine issue of material fact as to the fairness of the hearing. Defendants base their claim of unfairness on two facts: first, that a Brotherhood official testified on behalf of plaintiff at this Court's hearing on the preliminary injunction; and, second, that Brotherhood refused to recognize certain defendants as delegates to the Brotherhoods' Triennial Delegate Assembly in August, 1979. Defendants also point to the "unity of purpose" of plaintiff and The Brotherhood and urge that the hearing was merely a "tactic" in the conduct of this lawsuit.

Defendants' argument of bias must fail, however, since, if accepted, it would invalidate every Urantia Judicial Committee determination and preclude all internal resolutions of disputes by an association. Given that the Constitutional purpose of the Brotherhood is "the study and dissemination of the teachings of the Urantia Book" which the Urantia Foundation licenses the Brotherhood to-distribute, defendants' complaint about the "unity of purpose" of plaintiff Foundation and the Brotherhood amounts only to a challenge by purported members of The Association, to the existence of the association itself. The Court concludes that defendants have not raised a genuine issue of material fact regarding the fairness of the hearing.

Finally, with regard to defendants' affirmative defenses of laches, misrepresentation and failure to exercise control, these could only be valid if defendants were the true chartered. Houston Urantia Society, and the Brotherhood's Judicial Committee has determined that they are not. Thus, the misrepresentation claim is premised on the assumption that defendant, and not the first Urantia Society of Houston, is the chartered group. Defendants' claim that they have been allowed to use the marks for more than nine years is unsupported since there is no evidence raising an issue of fact as to whether plaintiff took immediate legal action when it learned of defendants' use of its mark. Similarly, defendants allege no issue of material fact regarding defendants' alleged failure to exercise control. Moreover, defendants are barred by the doctrine of licensee estoppel from challenging the validity of the marks on the basis of facts arising prior to the time they established their separate group, thereby terminating their affiliation with plaintiff. See Council of Better Business Bureau, Inc. v. Better Business Bureau of South Florida, 200 USPQ 282,.288-89 (S.D. Fla. 1978); Professional Golfers Ass'n v.

Bankers L. Co., 514 F.2d 665 (1975).

Accordingly, the Court finds that there is no genuine issue of material fact and that plaintiff is entitled to judgment as a matter of law.

This is a FINAL JUDGMENT.

The Clerk shall send a copy of this Order to counsel for all parties.

DONE at Houston, Texas, this 23rd day of September, 1982.

GABRIELLE K. McDONALD UNITED STATES DISTRICT JUDGE