The first party to court, of course, gets to frame the issues, and the Lawrence parties made corporate law arguments about registered trademarks and corporate registrations, rather than arguments about church polity. Moreover, they have prevailed in the early round of litigation, having managed to get the court even to prevent those who did not leave The Episcopal Church from calling themselves the Episcopal Diocese of South Carolina.
What Episcopalians consider the real Episcopal Diocese of South Carolina, which temporarily has to style itself The Episcopal Church in South Carolina, now has a provisional bishop, namely the Rt. Rev. Charles G. vonRosenberg. Today, Bishop vonRosenberg filed suit in U.S. District Court against “[t]he Right Reverend Mark J. Lawrence and John Does numbers 1-10, being fictitious defendants whose names presently are unknown to Plaintiff and will be added by amendment when ascertained.” (The complaint can be found here. The Episcopal Church itself is not now a plaintiff in the litigation.) The counterstrike by Bishop vonRosenberg is being brought under the Trademark Act of 1946 as amended.
A story on the complaint on the Episcopal Web site explains
Having renounced The Episcopal Church, Bishop Lawrence is no longer authorized to use the diocese’s name and seal. By doing so, he is engaging in false advertising, misleading and confusing worshippers and donors in violation of federal trademark law under the Lanham Act, the complaint says. It asks the court to stop Bishop Lawrence from continuing to falsely claim that he is associated with the Diocese of South Carolina, which is a recognized sub-unit of The Episcopal Church. …Litigation now proceeds on two fronts. Ostensibly, the issues being argued in the state and federal courts are similar, but it is clear that Lawrence has an edge in the South Carolina courts, and vonRosenberg has an advantage in the federal courts. The battlefield has been leveled.
Under the First Amendment, the designated authorities in a hierarchical church have the authority to determine how church controversies are resolved, not civil courts. The complaint cites two United States Supreme Court decisions: Serbian Eastern Orthodox Diocese v. Milivojevic (1979) and Hosanna-Tabor Evangelical Lutheran Church and School v. Equal Employment Opportunity Commission (2012).
Update, 3/6/2013. The Post and Courier, a Charleston newspaper, has a story about the lawsuit today.
Update, 3/9/2013. The above post contains a link to the 21-page complaint. The complaint, along with accompanying exhibits is not available. The 273-page PDF file can be found here.