Case: 20-30796 Document: 00516445448 Page: 1 Date Filed: 08/24/2022
United States Court of Appeals
for the Fifth Circuit
United States Court of Appeals
Fifth Circuit
FILED
August 24, 2022
No. 20-30796 Lyle W. Cayce
Clerk
Paige Lee; Business Moves Consulting, Incorporated;
Brandmixer, Incorporated; Curtis Bordenave,
Plaintiffs—Appellants,
versus
Anthony Lawrence Collection, L.L.C.; Defron Fobb;
Thaddeus Reed, also known as Reed Enterprise; Collegiate
Licensing Company, L.L.C., incorrectly sued as Learfield
Communications, L.L.C.,
Defendants—Appellees.
Appeal from the United States District Court
for the Eastern District of Louisiana
USDC No. 2:20-CV-839
Before Jolly, Elrod, and Oldham, Circuit Judges.
Jennifer Walker Elrod, Circuit Judge:
Curtis Bordenave and Paige Lee are in the business of owning
trademarks. They petitioned the United States Patent and Trademark Office
for federal registration of the mark “THEEILOVE” (and other similar
marks). That phrase, “Thee I Love,” comes from the alma mater of Jackson
State University. They then sued the University’s licensing agent
(Collegiate Licensing Company) and a few of the licensees in charge of
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producing and selling the University’s merchandise (Anthony Lawrence
Collection, Defron Fobb, and Thaddeus Reed, together “the Licensees”).
But they did not sue the University itself. Collegiate and the Licensees moved
to dismiss under Federal Rule of Civil Procedure 12(b)(7). The district court
granted the motion and dismissed the suit without prejudice. We AFFIRM.
I.
Curtis Bordenave, by his telling, licenses trademarks “from time to
time.” He owns Business Moves Consulting, a “branding business[]” which
“protect[s] the identity of the products” it sells “by consistent, deliberate
federal trademark registration.” In 2017, Business Moves applied for the
design mark “THEEILOVE,” which the USPTO granted the next year.
Business Moves then licensed use of the mark to Brandmixer (also a branding
business) and Paige Lee, all of which claim to sell apparel with the registered
design. In 2019, Business Moves and Brandmixer together applied for
another “THEE I LOVE” mark, this time for several other uses, such as on
license plates. (That application is still pending with the USPTO.)
This posed a problem for Jackson State University. Founded in 1877,
the University is one of the largest historically black colleges or universities
in the country. Its football team, led by Head Coach Deion Sanders (also
known as “Prime Time” or “Neon Deion”), runs onto the field each game
to the music of the University’s marching band, the Sonic Boom of the South.
And when the Tigers secured the Southwestern Athletic Conference
championship last season, the Sonic Boom of the South played “Thee I
Love,” the University’s alma mater, for the team and all its loyal fans. That
phrase plays a significant role in the University’s lore, as it has served as the
University’s alma mater for roughly eighty years. Students and alumni wear
shirts bearing the phrase, and the State of Mississippi even issues vanity
plates with “Thee I Love” and the school’s logo to the University’s most
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loyal fans. The University does not handle the licensing of its trademarks or
make its own merchandise. It instead works with Collegiate Licensing
Company to license out the University’s “trademarks and other indicia” to
manufacturers to make (and sometimes sell) its merchandise. The
University and Collegiate have since authorized several licensees, including
Anthony Lawrence Collection, LLC, Defron Fobb, and Thaddeus Reed, to
produce and sell the University’s merchandise.
Despite this history, the University never applied to have the phrase
registered as a federal mark until after Business Moves had already done so.
The University did register a mark under Mississippi law in 2015 for use on
vanity plates, and in 2019 (after Business Moves had already secured the
federal mark) for use on merchandise. It also claims to have common-law
rights to the mark under the Lanham Act. The University applied in late
2019 for the same federal marks as it secured under state law, but the USPTO
preliminarily refused the applications because Business Moves and
Brandmixer beat it to the punch.
Business Moves (along with Brandmixer, Bordenave, and Lee) sued
Collegiate and the Licensees for various claims centered on their licensing,
manufacturing, and selling of “Thee I Love” merchandise. The primary
claims were brought under the Lanham Act for trademark infringement and
unfair competition. Along with damages, plaintiffs requested the court
permanently enjoin the defendants from producing or selling any more
“infringing” merchandise, and that the court declare that defendants were
infringing on the plaintiffs’ federally registered marks.
Collegiate and the Licensees moved to dismiss under Rule 12(b)(1)
and (7). They argued that they were merely the University’s agents, and that
these claims are premised on a not-yet-fought battle over who “Thee I Love”
rightfully (and lawfully) belongs to. Because defendants said they could not
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adequately fight that battle for the University, they contended that the
University was a required party under Rule 19(a)(1)(A) and (B). But because
the University enjoys sovereign immunity (and thus cannot be joined),
defendants urged that the court should, “in equity and good conscience,”
dismiss the case. Plaintiffs responded that Collegiate and the Licensees were
merely joint tortfeasors, and that plaintiffs were not required to include every
joint tortfeasor. Plaintiffs went on to say that even if the University was a
required party, the district court could proceed without it because these
claims would not affect the University’s claimed right to the phrase “Thee I
Love” and would not preclude it from claiming that interest.
The district court granted the motions to dismiss under Rule 12(b)(7).
The court first held that, under Rule 19(a)(1)(B)(i), the University claimed
an interest in the “Thee I Love” phrase, and without the University present,
its interests could be practically impaired—especially because of “the
ongoing petition process between [the University] and plaintiffs over the
trademark.” Because the court could not join the University, the court then
considered under Rule 19(b) whether “‘equity and good conscience’
mandate dismissal.” It ultimately concluded that each of Rule 19(b)’s four
factors counseled in favor of dismissal and dismissed the case without
reaching the Rule 12(b)(1) issue. 1
1
Dismissing under Rule 12(b)(7) without resolving the Rule 12(b)(1) issue is
appropriate. That is because the dismissal was without prejudice. See Fed. R. Civ. P. 19(b);
id. R. 41(b). And “in an ordinary civil case, all dismissals [without prejudice] are created
equal—they all equally prevent the exercise of jurisdiction where there is none.” Davis v.
Sumlin, 999 F.3d 278, 280 (5th Cir. 2021); see Mowrer v. DOT,
14 F.4th 723, 733–43 (D.C.
Cir. 2021) (Katsas, J., concurring) (detailing principles of judicial sequencing).
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II.
We review a district court’s assessment of whether a party is
“required” under Rule 19 for abuse of discretion. Moss v. Princip, 913 F.3d
508, 514–15 (5th Cir. 2019). Rule 12(b)(7) allows for dismissal of a suit when
the plaintiff fails to join a required party under Rule 19. Fed. R. Civ. P.
12(b)(7). There are three types of “required” parties: (1) parties needed to
give complete relief to the existing parties,
id. R. 19(a)(1)(A); (2) parties who
claim interests which could be practically impaired or impeded if not joined,
id. R. 19(a)(1)(B)(i); and (3) parties necessary to ensure that existing parties
are not exposed to multiple or inconsistent obligations,
id. R. 19(a)(1)(B)(ii).
The burden of proof starts with the movants, but if at first glance it appears a
“possibly necessary party is absent,” the burden shifts to the nonmovant to
dispute that “initial appraisal” of the facts. Hood ex rel. Mississippi v. City of
Memphis,
570 F.3d 625, 628 (5th Cir. 2009).
If an absent party is “required” under Rule 19(a), but joinder would
destroy the court’s jurisdiction (as is the case here), the court has two
options: continue without the absent party or dismiss the litigation. HS Res.,
Inc. v. Wingate, 327 F.3d 432, 439 (5th Cir. 2003). Rule 19(b) tells courts to
make this decision “in equity and good conscience,” weighing these factors:
(1) the extent to which a judgment rendered in the
person’s absence might prejudice that person or the
existing parties;
(2) the extent to which any prejudice could be
lessened or avoided by:
(A) protective provisions in the judgment;
(B) shaping the relief; or
(C) other measures;
(3) whether a judgment rendered in the person’s
absence would be adequate; and
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(4) whether the plaintiff would have an adequate
remedy if the action were dismissed for nonjoinder.
Fed. R. Civ. P. 19(b)(1)–(4). With no prescribed formula for balancing these
factors, the inquiry is “[g]uided by common sense” and is highly casespecific, requiring a “flexible and pragmatic” evaluation of the facts. Moss,
913 F.3d at 515, 517.
A.
The first question is whether the University was a required party
under Rule 19(a). The district court held that the University has “an interest
relating to the subject of the action” which, if the University is not joined,
the suit “may as a practical matter impair or impede [its] ability to protect
the interest.” We agree.
First, the inquiry at this stage is more about whether the absent party
claims a non-frivolous interest, not the ultimate merit of the claim. See, e.g.,
Republic of Philippines v. Pimentel, 553 U.S. 851, 868–69 (2008); White v. Univ.
of Cal.,
765 F.3d 1010, 1026–27 (9th Cir. 2014). The University here claims
an interest in the mark that is the basis of each of appellants’ claims.
Appellants spend much of their briefing arguing that because the University
has no interest in the mark, it cannot be a required party. But that begs the
question: the very basis of appellants’ claims require that they prove their
ownership of the mark, and the University’s consistent usage (and purported
state- and common-law rights) reveal the ownership dispute lurking beneath
the surface. The ongoing dispute over the federal mark is already underway.
Rule 19 allows courts to consider these facts, and the district court was not
required to blind itself to the realities of that litigation in reaching its result.
Second, appellants argue that even if the University has an interest in
this suit, the University’s absence would not keep it from protecting that
interest later on. They make two points along these lines: (1) the University
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can sue to challenge appellants’ mark in federal court apart from this
litigation; and (2) the University would not be precluded from challenging
the federal mark if it is not joined here. But Rule 19 is not concerned with
preclusive effect as much as it is “practical[]” impairment. 2 Fed. R. Civ. P.
19(a)(1)(B)(i). Even if the University remains free to challenge Business
Moves’s ownership of “Thee I Love” elsewhere, it could still face challenges
protecting its interest if it is not joined here. For instance, if the University
was part of the lawsuit, there would be no need to challenge Business
Moves’s trademark in other fora. A loss here, in its absence, could put
pressure on the University in the short term to abandon or capitulate to
appellants, as it could all but halt their use of the mark in commerce. Because
ownership of the mark is what this case is ultimately about, Rule 19’s interest
in “protect[ing] interested parties and avoid[ing] waste of judicial resources”
would counsel in favor of the University’s inclusion. Askew v. Sheriff of Cook
Cnty., Ill., 568 F.3d 632, 634 (7th Cir. 2009) (quotation omitted).
Thus, the district court did not abuse its discretion in concluding that
the University was a required party under Rule 19(a)(1)(B)(i). And because
everyone agrees that the University enjoys sovereign immunity, the question
becomes whether the district court abused its discretion in dismissing the
case rather than proceeding without the University.
B.
When a required party cannot be feasibly joined, the district court
“must determine whether, in equity and good conscience, the action should
2
Even short of preclusive effect, we have previously explored the circumstances
under which the stare decisis effect of a decision could justify joinder, highlighting the
“practical disadvantage” that a previous non-preclusive decision could pose. See Atlantis
Dev. Corp. v. United States, 379 F.2d 818, 829 (5th Cir. 1967).
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proceed among the existing parties or should be dismissed.” Fed. R. Civ. P.
19(b). We again agree with the district court’s conclusion.
1.
Predominating our analysis is the fact that the University is an arm of
the State of Mississippi. See Whiting v. Jackson State Univ., 616 F.2d 116, 127
n.8 (5th Cir. 1980). It thus enjoys sovereign immunity. Daniel v. Univ. of
Tex. Sw. Med. Ctr.,
960 F.3d 253, 257 (5th Cir. 2020). That sovereign
immunity “does not exist solely in order to ‘preven[t] federal-court
judgments that must be paid out of a State’s treasury’; it also serves to avoid
the ‘indignity of subjecting a State to the coercive process of judicial tribunals
at the instance of private parties.’” Seminole Tribe of Fla. v. Florida,
517 U.S.
44, 58 (1996) (first quoting Hess v. Port Auth. Trans-Hudson Corp.,
513 U.S.
30, 48 (1994), then quoting Puerto Rico Aqueduct & Sewer Auth. v. Metcalf &
Eddy, Inc.,
506 U.S. 139, 146 (1993)). Because the University cannot enter
the scrum without waiving its immunity, its sovereign interest is necessarily
impaired when plaintiffs try to use the state’s sovereign immunity to lure it
into a lawsuit against its will. Cf. Gensetix, Inc. v. Bd. of Regents of Univ. of
Tex. Sys.,
966 F.3d 1316, 1322–23 (Fed. Cir. 2020) (a university cannot be
made an involuntary plaintiff under Rule 19(a)(2) because of its sovereign
immunity).
The Supreme Court in Republic of Philippines v. Pimentel said that
“where sovereign immunity is asserted, and the claims of the sovereign are
not frivolous, dismissal of the action must be ordered where there is a potential
for injury to the interests of the absent sovereign.” 553 U.S. at 867 (emphasis
added). Even before Pimentel, other courts of appeals left “very little room
for balancing of other factors set out in Rule 19(b) where a necessary party
under Rule 19(a) is immune from suit because immunity may be viewed as
one of those interests compelling by themselves.” Kickapoo Tribe of Indians
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v. Babbitt, 43 F.3d 1491, 1496 (D.C. Cir. 1995) (quotation omitted). And
more recently, in an adjacent context, another court recognized the “wall of
circuit authority” favoring dismissal of actions “in which a necessary party
cannot be joined due to tribal sovereign immunity.” Dine Citizens Against
Ruining Our Env’t v. Bureau of Indian Affs.,
932 F.3d 843, 857 (9th Cir. 2019)
(citing White,
765 F.3d at 1028).
The same can be said for state sovereign immunity. As compelled by
Pimentel, as discussed above, the University has a non-frivolous claim here.
As a practical matter, this suit would impair or impede its ability to protect
its interest in the “Thee I Love” mark. That is enough to require dismissal
of the action because “there is a potential for injury to” the University’s
“interests [as] the absent sovereign.” See Pimentel, 553 U.S. at 867; see also
Gensetix, 966 F.3d at 1331–34 (Taranto, J., dissenting in part). 3 Under Rule
3
In a thorough dissenting opinion, Judge Taranto explains how Pimentel commands
that where, as here, a state “sovereign entity is a required party under Rule 19(a), is
protected against joinder by sovereign immunity, and makes a non-frivolous assertion that
it will be prejudiced by a suit proceeding in its absence, a district court” must dismiss the
suit under Rule 19(b). Gensetix, 966 F.3d at 1331–34 (Taranto, J., dissenting in part). The
majority opinion, by contrast, concluded that the sovereign’s interests in that case were not
substantial enough to justify dismissal “in equity and good conscience.” Id. at 1324–
27. Specifically, the majority determined that the prejudice to the absent state sovereign
was “greatly reduced” because the party had an “identical” (rather than “overlapping”)
interest in the property at issue.
Id. at 1325–27.
We disagree with the Gensetix majority opinion’s treatment of the state’s sovereign
status as insufficient to justify dismissal for several reasons. First, it differs from several of
our sister circuits’ cases pre- and post-Pimentel. See, e.g., Fla. Wildlife Fed’n Inc. v. U.S.
Army Corps of Eng’rs, 859 F.3d 1306, 1317–20 (11th Cir. 2017); Two Shields v. Wilkinson,
790 F.3d 791, 798 (8th Cir. 2015); Gensetix, 966 F.3d at 1331–34 (Taranto, J., dissenting in
part) (collecting cases). Second, Pimentel involved foreign sovereign immunity while this
case and Gensetix involved state sovereign immunity. This matters because “the States’
sovereign immunity is a historically rooted principle embedded in the text and structure of
the Constitution,” while a foreign nation’s sovereign immunity is by “consent or
compact” (i.e., not grounded in the Constitution). Franchise Tax Bd. of Cal. v. Hyatt,
139
S. Ct. 1485, 1497, 1499 (2019). Third, the Gensetix majority opinion’s contention that a
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19(b), in the interest of “equity and good conscience,” the suit should be
dismissed.
2.
The outcome is the same when considering the Rule 19(b) factors.
The aim is to weigh those factors “seeking to avoid manifest injustice while
taking full cognizance of the practicalities involved.” Pulitzer–Polster v.
Pulitzer, 784 F.2d 1305, 1312 (5th Cir. 1986). The district court concluded
that all four of Rule 19(b)’s factors favored dismissal, and we again agree.
Under the first factor, the district court considered “the extent to
which a judgment rendered in [the University’s] absence might prejudice
[the University] or the existing parties.” Fed. R. Civ. P. 19(b)(1). On this
point, the district court said that both the University and Collegiate would be
prejudiced without the University’s involvement. The court pointed to
appellants’ own complaint to cast doubt on their contention that this case is
only about their federal trademark rights; appellants, for instance, complain
about “Thee I Love” vanity plates, even though appellants conceded the
University has a trademark on those plates under Mississippi law.
Appellants do not highlight that concession, but instead focus on the
fact that Collegiate is well-equipped to defend the University’s interest on its
state interest is “identical” to a non-governmental party is unpersuasive. For one thing,
whether there is identity or not, a court’s “consideration of the merits was itself an
infringement on [state] sovereign immunity.” Pimentel, 553 U.S. at 864. And if anything,
for state sovereign immunity, identity is worse because we would allow indirect adjudication
of the state’s interest, even though state sovereign immunity would forbid direct
adjudication of that interest. For another, the notion that a state entity’s interest in
property is “identical” to a non-government party’s is perplexing, to put it mildly. In any
event, as discussed in the next section, we conclude that the University’s interests here are
substantial enough even under each of the Rule 19(b) factors. See Gensetix, 966 F.3d at
1324–27 (evaluating factors).
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own. Collegiate responds that it is “merely a licensing agent with limited
rights” which would struggle to establish the University’s “use [of ‘Thee I
Love’] in commerce over some eight decades.” Cf. Two Shields, 790 F.3d at
799; Tell v. Trs. of Dartmouth Coll.,
145 F.3d 417, 419 (1st Cir. 1998)
(“[W]ithout a perfect identity of interests, a court must be very cautious in
concluding that a litigant will serve as a proxy for an absent party.”).
This point, on balance, favors the University. To appellants’ credit,
there does not seem to be a risk that appellees would take a position
inconsistent with the University. See Tell, 145 F.3d at 419. Foundational to
appellants’ claims is their ownership of the mark, and appellees and the
University both want to disprove that ownership. So if the University was
joined, it is unlikely that Collegiate or the Licensees would take a different
position on who owns the mark. On the other hand, the battle over ownership
of the mark is the University’s, and as the commercial agents for the
University’s use of that mark, neither Collegiate nor the Licensees have the
same personal stake in that battle as the University.
Many of the arguments center on whether the University and
appellees have nonidentical interests. Two Federal Circuit cases are
instructive. Gensetix, 966 F.3d 1316; A123 Sys., Inc. v. Hydro-Quebec,
626 F.3d
1213 (Fed. Cir. 2010). The court in Gensetix held that a patent licensee could
proceed without the patent owner (the University of Texas) because the
owner had given the licensee a license “in every field,” and thus the interests
of the owner and licensee were “identical.”
966 F.3d at 1326. The court in
A123, by contrast, held that a patent owner was a required party when the
owner gave only a “field-of-use license” to the licensee, so their interests
were “overlapping” but not “identical.”
626 F.3d at 1221. Here, the
University has an agreement with Collegiate to be its exclusive agent for
licensing out the University’s “indicia” “in connection with the marketing
of various articles of merchandise and to conduct certain [p]romotions.”
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Collegiate has no interest in the ownership of the mark, and the University
maintains sole discretion to grant licensees access to the mark. It is unclear
at this stage whether the University could use this mark for any reason other
than merchandise, but it at least maintains sole rights to use of the mark itself.
Like the owner/licensee relationship in A123, the University and Collegiate
have “overlapping” but not “identical” interests in ownership of the mark,
which counsels in favor of dismissal. See id.
The district court next considered the second factor: “the extent to
which any prejudice could be lessened or avoided by: (A) protective
provisions in the judgment; (B) shaping the relief; or (C) other measures.”
Fed. R. Civ. P. 19(b)(2). The district court noted that the University’s
interest in this suit was “implicated not only by potential judgment or the
form of relief, but by the necessary inquiry into ownership of the trademark
itself.” Appellants provide only a brief retort, that this factor “isn’t useful
with a sovereign nonparty” and that the University is “protected from
liability” by their agency agreement with Collegiate. The indemnity
provision, however, does not have much to do with the University’s
continued interest in owning the rights to “Thee I Love,” so this factor also
weighs in the University’s favor.
The third factor concerns “whether a judgment rendered in the
[University’s] absence would be adequate.” Fed. R. Civ. P. 19(b)(3).
Appellants again urge that a judgment would be adequate because appellees
are mere joint tortfeasors with the University, and appellees again respond
that it does not fully share the University’s interests. As with the other
discussions of the differing interests, the district court concluded that the
University and appellees did not have the same interests in the phrase “Thee
I Love.” The defendant in Gensetix had a patent “in every field,” and thus
its interests were “identical” to the absent party. 966 F.3d at 1326. The
defendant in A123, on the other hand, had only a “field-of-use license,” so
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its interests were “overlapping” but not “identical” to those of the absent
party. 626 F.3d at 1221. The district court likened this case to A123 and
distinguished it from Gensetix, concluding it could not “presume the
licensees fully stand in [the University’s] shoes.” That comparison is sound:
The University still retains interests in “Thee I Love” and retains control
over which companies receive its licenses. With that said, appellants’ jointtortfeasor point has purchase here: there is not any evidence that appellees
cannot carry out the specific relief requested, or that the University’s joinder
would somehow enhance their ability to do so. On balance, it was not an
abuse of discretion to disregard that fact, but this factor is at least more
neutral than the others.
The final factor is about “whether the plaintiff[s] would have an
adequate remedy if the action were dismissed for nonjoinder.” Fed. R. Civ.
P. 19(b)(4). Appellants on this point focus on the futility of requiring it to
take this dispute elsewhere. As the district court noted, the basis of this
dispute is which party “Thee I Love” belongs to. Though the parties dispute
whether appellants could bring these claims in state court, the proper forum
for determining the proper owner of these trademark rights is the USPTO.
Because appellants can presumably bring these claims against Collegiate and
the Licensees after they have established their superior rights to the mark,
this factor too weighs in favor of dismissal.
Thus, even setting aside the University’s sovereign status, the balance
of the Rule 19(b) factors weigh in favor of dismissal. As a result, the district
court did not abuse its discretion in dismissing the case.
…
Because the University is a required party under Rule 19(a) and the
suit was properly dismissed under Rule 19(b), we AFFIRM.
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