Kevin McCarthy v. Patricia Fuller, 810 F.3d 456

Background

In 1956 Sister Mary Ephrem reported Marian apparitions and promoted "Our Lady of America" devotions; a cloister and later Our Lady of America Center were formed.
Patricia Fuller (aka Sister Therese) succeeded Ephrem in controlling the Center and amassed artifacts, copyrights, and trademarks; she later registered related marks and copyrights.
Kevin McCarthy and Albert Langsenkamp allied with Fuller, then had a falling out; they sued Fuller and Paul Hartman in 2008 for conversion, fraud, defamation and sought declaratory relief on IP noninfringement; Fuller and Hartman counterclaimed.
The Holy See determined Fuller was not a nun or member of a recognized religious institute; the Seventh Circuit directed the district court to take judicial notice of that ruling during interlocutory appeal.
A jury found Fuller and Hartman liable for defamation and awarded compensatory and punitive damages; the district court also entered a permanent injunction broadly prohibiting various defamatory statements and ordering Hartman’s blog removed.
The Seventh Circuit affirmed the judgment on liability and damages but vacated the permanent injunction as vague, overbroad, and unsupported by specific jury findings, and remanded for further proceedings on injunctive relief.

Issues

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether federal court must defer to Holy See on Fuller’s religious status	McCarthy/Langsenkamp: courts must accept Holy See’s authoritative ruling	Fuller: jury should decide Fuller’s status as factual matter	Court: Take judicial notice of Holy See; secular courts cannot reexamine ecclesiastical determinations (affirmed earlier interlocutory ruling)
Whether permanent injunction against future speech was proper	Plaintiffs: injunction needed to prevent continued reputational harm and deter judgment‑proof defendants	Fuller/Hartman: injunction is prior restraint, overbroad, vague, and not tied to specific jury findings	Court: Injunction vacated—must be specific, tied to findings; current injunction was vague and broader than jury verdict permitted
Whether defamation can ever be enjoined	Plaintiffs: narrow injunctions limited to specific false statements are permissible to prevent ongoing harm	Defs: Equitable prior restraint is presumptively unconstitutional; damages are sole remedy	Court: Did not decide categorical rule; acknowledged modern trend allowing very narrow injunctions but held this injunction unlawful for lack of specificity and overbreadth
Whether district court could base injunction on plaintiff’s proposed terms despite defendants’ failure to timely respond	Plaintiffs: lack of timely objection waived challenge; judge may adopt proposed injunction	Defs: waiver notwithstanding, public First Amendment interests require scrutiny; judge erred in adopting vague terms	Court: Although defendants waived response, judge had obligation to consider First Amendment and public interest; injunction nonetheless vacated

Key Cases Cited

Cohen v. Beneficial Indus. Loan Corp., 337 U.S. 541 (1949) (collateral order doctrine)
Hosanna-Tabor Evangelical Lutheran Church & School v. EEOC, 565 U.S. 171 (2012) (civil courts avoid resolving ecclesiastical questions)
Near v. Minnesota ex rel. Olson, 283 U.S. 697 (1931) (strong presumption against prior restraints)
Bantam Books, Inc. v. Sullivan, 372 U.S. 58 (1963) (prior restraints bearing heavy presumption against validity)
Pittsburgh Press Co. v. Pittsburgh Comm’n on Human Relations, 413 U.S. 376 (1973) (upholding limited prohibition on discriminatory job ads)
Kingsley Books, Inc. v. Brown, 354 U.S. 436 (1957) (upholding injunction against obscene material after trial)
e360 Insight v. The Spamhaus Project, 500 F.3d 594 (7th Cir. 2007) (equity traditionally does not enjoin libel)
Lothschuetz v. Carpenter, 898 F.2d 1200 (6th Cir. 1990) (example of limited injunction against repeated libelous statements)
Balboa Island Village Inn, Inc. v. Lemen, 40 Cal.4th 1141 (2007) (state high‑court endorsing narrow injunctions against specific false statements)
Kinney v. Barnes, 443 S.W.3d 87 (Tex. 2014) (state court rejecting permanent injunction as prior restraint in defamation context)