Lynchburg, Virginia — There is a new development in a lawsuit filed by Jerry Falwell Jr. over allegations that Liberty University exploited Dr. Jerry Falwell Sr.'s trademarked name and image.
Now, Falwell Jr. is calling out high-ranking university officials for alleged sexual misconduct, questionable financial decisions, and mistreatment of the Falwell family. The Amended Complaint, filed on September 13, claims the actions of university leadership are damaging to the "Jerry Falwell" trademark.
Background
When Dr. Falwell passed in 2007, he left the "Jerry Falwell" trademark in a trust for the benefit of his children. The Jerry Falwell trademark and the associated intellectual property (together, Falwell IP) do not belong to Liberty University, and the university has previously acknowledged in a written agreement that the Trust has the exclusive right to control the Falwell IP in commerce.
The complaint - filed against Liberty University, Jerry Prevo, and Jonathan P. Falwell - claims that Liberty University used the Falwell IP in advertising and promotion for Liberty, without consulting the Falwell family and without the authorization of the family Trust. The complaint states that the Falwell IP should not be perceived as endorsing the University without the consent of the Trust.
"There are numerous good reasons for the JERRY FALWELL brand to not want to be perceived as having endorsed or sponsored Liberty, at least as it exists in its current incarnation, under the control of a small group of members of the so-called 'Executive Committee' who have seized control of the University after Mr. Falwell’s resignation as President and Chancellor of the University in August 2020. For instance, as detailed herein, Mr. Falwell has learned that Liberty has made payments totaling over a million dollars in purported “donations” to organizations that are, upon information and belief, under the control of certain members of Liberty’s Board of Trustees and its Executive Committee, or their close associates," the complaint reads.
The complaint contends that Liberty University's leadership has shifted away from Dr. Falwell's original vision and it is damaging to the Falwell IP to be perceived as endorsing or sponsoring the university in its current incarnation.
"Control of the university"
The complaint states that in the summer of 2020, members of the Executive Committee and the Board of Trustees "maneuvered to eliminate" Falwell from the leadership of Liberty and gain control over the University and its $2 billion endowment for their own benefit.
To force Falwell’s exit, the complaint says certain Executive Committee members exploited Falwell’s health condition and attempted to convince Falwell to take a leave of absence because of "excess drinking". Liberty had not previously enforced any rules prohibiting drinking by faculty, according to the complaint. At least two members of the Executive Committee drink and one of them has been to rehab three times, the complaint continues.
Falwell later visited a detox center at the request of the Executive Committee, where the staff informed him he was suffering from a potentially deadly lung condition, and not from alcoholism, according to the complaint.
Shortly after, the news of Becki Falwell’s affair became public, and certain members of the Board of Trustees and/or Executive Committee set out to use this as a pretext to force Falwell’s exit, the complaint claims. The Executive Committee refused to meet with Falwell to hear his side of the story and gave Falwell the ultimatum of resignation or termination, the complaint continues. Falwell ultimately submitted his resignation “without cause” and “for good reason,” and the Board accepted his resignation unanimously.
The complaint makes the case that Falwell was being held to a standard that did not apply to other high-ranking university officials. The complaint alleges that several other incidents were not met with the same punitive action:
- One former University President was sued by a former Liberty employee for sexual harassment but was not removed from his position.
- The former Dean of Liberty’s School of Divinity, the late Dr. Edward Hindson, had an extramarital affair during his time at Liberty but was not removed from his position.
- The former provost of Liberty, Dr. Ronald Godwin, had an extramarital affair with his secretary while working at a Liberty affiliate Moral Majority, Inc., but was not removed from his position.
- A current member of the Executive Committee has admitted to previously having more than one affair.
Unlike other university officials, the complaint alleges that Falwell was not the recipient of Liberty's "long-standing culture of forgiveness".
"Questionable financial dealings"
According to the complaint, after Falwell left Liberty, members of the Executive Committee and the Board of Trustees directed Liberty to dole out hundreds of thousands of dollars in "self-dealing transactions".
The complaint claims the following examples of "donations" made by Liberty benefit organizations controlled by members of the Board of Trustees and its Executive Committee, or their associates:
- After Jerry Vines joined the Executive Committee, and in 2021, Liberty gave $100,000 to Jerry Vines Ministries.
- Tim Lee is the Chairman of the Board of Trustees and became an Executive Committee member after Mr. Falwell resigned from Liberty. In 2021, Liberty gave $100,000 to Tim Lee Ministries, and in 2022, Liberty gave $76,000 to Wylie Preparatory Academy, a school in Texas that Lee’s granddaughters attended.
- The late Harvey Gainey was a member of the Board of Trustees and Executive Committee until his passing in November 2021. Between 2020 and 2021, Liberty gave $125,000 to the Gainey Foundation which operated Two Moose Camp in Montana. From 2018 through 2021, Gainey allegedly received annual contributions from Liberty for students, staff, and faculty to “visit” his camp for a week in amounts ranging from $30,000 and up.
- Jerry Prevo and William Graham - the grandson of evangelist Billy Graham - allegedly assisted in securing hundreds of thousands of dollars for an organization organized by the Graham family. In 2021, Liberty paid $200,050 to Samaritan’s Purse, the president of which is Franklin Graham.
While Falwell was president of Liberty, Prevo allegedly pressured Falwell to pay thousands of dollars for Prevo’s grandson to receive flight training at Liberty’s expense. Liberty also allegedly paid Prevo’s wife a substantial sum for her role as the wife of the president. Furthermore, Prevo allegedly racked up hundreds of thousands of dollars in expenses associated with his use of Liberty’s corporate jet, including flights between Virginia and his home in Alaska, each trip costing at least $35,000, as well as his home in Arizona, each trip costing $20,000.
The complaint claims that this "scheme to elevate" positions of power was enabled by Liberty University’s General Counsel, David Corry. The complaint states that Corry’s salary increased by 60% in a single year following Falwell’s resignation, bringing his total compensation to $491,728. Liberty allegedly also made a payment of $588,191 to Liberty Counsel Inc., where Corry was working prior to joining Liberty as General Counsel.
Removing Falwell
The complaint makes the case that the Executive Committee brazenly attempted to disparage Falwell and his family. The complaint states that Mr. and Ms. Falwell were banned from the campus of Liberty University after they attended a sporting event on Liberty’s campus to support their daughter, who was a student of the university at the time. According to the complaint, Liberty allegedly removed on-campus photos of Falwell, deleted social media comments that were supportive of Falwell, and digitally removed Falwell from photos used in promotional materials.
Members of the Board of Trustees and its Executive Committee also directed their "cruelty" towards other Falwell family members, according to the complaint. The complaint details a "particularly heinous method" of firing Falwell's son, Trey Falwell, who was an employee of the university.
According to the complaint, President Prevo knew Trey’s wife had recently suffered a miscarriage and the family was grieving. The complaint continued, stating that Prevo communicated to Trey that Board members wanted to fire Trey and that Prevo could “fool” the Board into dropping the issue if he could present a resignation letter signed by Trey. Prevo told Trey that he could not tell his parents about his request, according to the complaint. Trey did not write a resignation letter and was subsequently fired by CFO Rob Ritz, the complaint stated.
A spokesperson for Liberty University gave ABC13 the following statement on Jerry Falwell, Jr.’s Amended Complaint:
"In response to Liberty’s compelling motion to dismiss his complaint, Jerry Falwell, Jr. filed an amended complaint containing improper and unsupported allegations designed to diminish former colleagues, family, and friends and to discredit the university where he formerly served. These personal attacks have no place in a legal dispute over the use of a person’s name, image, and likeness. Liberty will file the appropriate response to these claims in due time and defend its legal right to continue the use of Dr. Jerry Falwell’s name. Furthermore, we stand by our initial statement that Liberty University and its Board of Trustees have only sought to honor the visionary leadership of Dr. Jerry Falwell and the mission of training Champions for Christ."
Falwell's ongoing trademark lawsuit includes the following counts:
- Federal Trademark Infringement
- Federal Trademark Infringement, Unfair Competition, And False Designation Of Origin
- False Advertising
- Unauthorized Use Of Name, Portrait, Or Picture
- Trademark Infringement, Unfair Competition, And False Designation Of Origin Under Virginia Law
- False Advertising And Unfair Competition Under Virginia Law
- Anticybersquattting Consumer Protection Act
- Breach Of Fiduciary Duty
The lawsuit asks for monetary relief in the form of a full accounting and return of profits Liberty University made while using Dr. Falwell's name and image. The court document recalls that Dr. Falwell used his own name as a trademark in multiple commercial pursuits which collectively generated hundreds of millions of dollars.
