Appeals Court Upholds Judgment For Wounded Warrior Project

January 12, 2011       Mark Hrywna      

A three-judge panel has denied an appeal and upheld the original verdict in a battle between two charities that support returning American veterans and were using similar names.

In a 19-page decision filed today (Jan. 12), the U.S. Court of Appeals for the 8th Circuit in Nebraska knocked down six alleged key errors in the original case raised in the appeal by Wounded Warrior Family Support (WWFS). A jury in September 2009 awarded $1.7 million to Wounded Warrior Project (WWP) of Jacksonville, Fla., and entered a permanent injunction against WWFS. The $1.7 million included $1.295 million for deceptive trade practices and $400,000 for unjust enrichment as a result of confusion. Wounded Warrior Project originally filed suit in 2007 against Wounded Warriors, Inc., of Omaha, Neb., which changed its name to Wounded Warrior Family Support.

Following oral arguments in November, the appeal was dismissed on Jan. 12. “It’s probably the largest verdict of its kind on the issue of using a confusingly similar name,” said Errol Copilevitz of the Kansas City, Mo., firm of Copilevitz and Canter, which represented WWP. Based in Jacksonville, Fla., WWP also has offices in Washington, D.C., and New York City. “We found all kinds of evidence of people who had donated to them thinking that they had seen the Wounded Warrior Project featured on national TV and sent money,” he said.

About $429,000 of the judgment has been collected so far, according to Copilevitz, and foreclosure is moving ahead on condominiums and property acquired by WWFS, which it offered to wounded veterans and their families for vacations.

A key issue in the litigation was the website, woundedwarriors.org, which WWFS launched in 2004. WWP registered two websites, woundedwarrior.org and woundedwarriorproject.org, in January 2003 and March 2004, respectively. In 2005, the organization registered its trademark logo depicting one soldier carrying another soldier on his back.

The Wounded Warriors in Nebraska only had a passive website that generated about $1,400 a month in donations, and did little or no advertising, fundraising or marketing, said Copilevitz, until WWP was featured on Fox television and it started getting upward of $90,000 or more in donations each month. After WWFS was ordered by the court to shut down its website in July 2008 donations immediately decreased 56 percent while WWP’s donations jumped 29 percent, according to court documents.

A forensic accountant hired by WWP estimated that $1.2 million to $2 million was potentially misdirected between 2004 and 2008, but the Omaha-based nonprofit never sent any funds to his client until he penned a letter in April 2007.

Col. John Folsom, founder and CEO of Wounded Warriors, Inc./Wounded Warrior Family Support, confirmed that his organization’s website has had a disclaimer on it since December 2004 that it is not associated with Wounded Warrior Project and that it changed its name in July 2008 after the litigation was initiated.

Both charities were started in about 2003 and 2004 and have seen strong growth in recent years. Wounded Warrior Project had total revenue of $26 million in 2009, according to its most recent tax Form 990, up considerably from $18.6 million in 2007 and $10 million in 2006. Founded in March 2003, WWSP had revenue of almost $900,000 in 2009, $1 million in 2008 and $1.7 million in 2007.  Those figures are up substantially from the $302,000 in 2005 and $409,000 in 2006.