SLPERIOR COURT OF THE VIRGIN ISLANDS
DIV [SIGN OF ST THOMAS / ST JOHN
JODY OLSON, [INDIVIDLAL LY AND ON BuuLF Case No ST 2019 CV 00602
OF ALL OTHERS Sum ARM SITL \TFD,
PLAINTIFF, Class Action
V.
Complex Litigation Division
VIRGIN ISLANDS WA FER AND POWER
AUTHORITY AND LAWRENCE J KUPFER
Jury Trial Demanded
DEPFNDANTS,
AND
GOVERNMENT OF THE VIRGIN ISLANDS
INTERVENOR
Cite as 2024 VI Super 17
Appearances
JOSEPH A DIRUZZO III ESQ
DiRuzzo 8. Company
Ft Lauderdale FL 3330]
F0; P1011114}
DIONNE G SINCLAIR ESQ
PATRICIA QUINLAND ESQ
Vi1 gin Islands Watel and Power Authority
St Thomas V1 00804
THOMAS J WELLIRC JR (p70 lmc wee)
Venablc LLP
New York NY 10020
P0; Defendants Vzrgm Islands Ware; and P0110; Authonn and Lamence J Kup/CI
IAN S A CLEMENT ESQ
Vixgin Islands Department of Justice
St Thomas VI 00802
To; Intenenoz Defendant Gmemmcm ofllze Dug“! Islands
Olsont I I Hutu 61 Panel mm ()1 (1/
Cw. No S? 2019 LV 00607
Memorandum Opinion
Pave 3 of 23
MEMORANDUM OPINION
VVILLOCKS, Administrative fudge
1H BEFORE THE COURT is a Recommendation by the Statf Mamet addressing the following
motions (1) Motion to Take Judicial Notice filed by Plaintiff Jody Olson (heieinatter ‘ Plaintitf” or
Olson ’); (2) Motion to Deem Conceded filed by Olson (3) Joint Motion fol Judgment on the Headings
filed by the Viigin Islands Water & Power Authority (hereinaftei ‘ WAPA ’) and Lawrence J Kupter
(hereinaftei Kupfer ) (collectiVely Defendants ); and (4) Motion to Declare / Hold Sections lll(a) &
120 ofTitle 30 ofthe Virgin Islands Code Unconstitutional filed by Olson Also befoxe the Court are the
following responses to the Recommendation (5) Motion to Adopt (in Part), Modify (in Part) & Reject
(in Part) filed by Olson‘ (6) Response to Staff Master 3 Recommendation filed by the Defendants and (7)
Motion to Adopt Staff Master 8 Recommendation About Plaintiffs Constitutional Challenge to Title 30
of the Virgin Islands Code, Sections 1 1 l and 120 and Notice OfJoinder filed by Intewenm Gm eminent
of the Virgin Islands (hereinaftei Government )
112 HaVing considered the Recommendation de M» 0 as well as the panties responses to it the Court
will f01 the reasons explained below, dismgard the Government 5 motion and accept only its notice of
joindet overrule the parties’ objections and giant thei1 competing requests to adopt those portions of the
Recommendation they agree with men ule and deny their requests to modify 01 amend those portions
they disagree with, and adopt the Recommendation appended to this Opinion, in all respects except two
The Court will reject the Staff Master’s recommendation to allow Olson to stand on her current pleading
and deny Olson’s related request to intellineate her complaint rather than file an amended pleading The
COLut will also reject the Staff Master 5 recommendation to allow the Defendants to file an amended
answer HoweVer, to address Olson 3 concerns and ensure the Defendants do not evade the consequences
of hating tailed to comply with Rule 8 0fthe Virgin Islands Rules of Civil Pioeeduie in preparing their
O/mni l I Wait] cl? Potter 421th L/(l/
Case NO ST 2019 LV 00602
Memmandum Opinion
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answei, the Court will direct the Defendants, in their forthcoming answei to admit those paiagraphs t0
the forthcoming second amended complaint that the Court finds they admitted to in the Fiist Amended
Complaint Otherwise, the Recommendation will be adopted in lull Finally, the CQuit will grant the
Defendants tequest to dismiss Kuptei and Olson 3 request to substitute the cunent Chief Executive
Oifieei 0t WAPA
I FACTUAL BACKGROUND AND PROCEDURAL HISTORY
18 The Staff Mastei detailed the pieceduial history of this case in the Recommendation, mfi a This
Court also detailed some of the taetual background in a prior Opinion See gene/ally Olson \ V I Wale;
& Pomei 4111‘]? 2023 VI Supei 6] 1H] 2 3 (hereinafter Olson I”) As turthex background fox this Opinion
the Court notes the following allegations taken from the pleadings Olson is a customer of WAPA,
residing on St Thomas (See First Am Comp] 111] 4 24 filed Jan 23 2020 ) As quuired by statute she
paid a cash deposit to WAPA t0 ieceive electricity services See 1d W 24 25 That makes her and all
customeis 0t WAPA creditors ofWAPA she contends See ((1 1] 26 Olson avers that WAPA is insolvent
because its 1e» enues cannot meet its expenses Sec [d 1H] 8 32 She fears that
based on WAPA s tenuous financial position, WAPA (i) will not be able to provide
electrical sewices t0 the Plaintiff (ii) will not be able to iefund the Plaintiff‘s customer
deposit and will not be able pay the Plaintiff the statutory interest due to her under 30 V l C
§ 9a(b), and (iii) will negatively effect not only current Virgin Islands residents, but several
geneiations of Virgin Islands residents (and by necessary extension the Virgin Islands as a
viable location to live) [d 1] 74
Wt Olson commenced this action initially on her own behalf, but then Via an amended complaint on
behalf of a class of eustomets 0f WAPA to obtain a judgment declaiing the Territory s sole electrieity
suppliei in a state of emergency and insolvent Olson further seeks a judgment declaring the amount of
st itulOI'y inteiest due to her and the class on their cash deposits, and an injunction ordering WAPA to set
aside sufficient funds to be able to comply with its obligation to refund the deposits with interest
0130121 1/ 1 Nam (52 Pow] lull] era]
Case N0 51 2019 CV 00602
Memorandum Opinion
Pa"( 4 0t 23
115 Olson also asserts a second allegation, that WAPA gives preferential treatment to gm eminent
officers depaitments, and agencies by supplying them with eleetiieity without terminating service fin
nonpayment Olson claims this billing practices is diSCIiminatory because WAPA “treat[s] [its]
customers (goveinmental VCISUS non governmental) differently ’ [d fit 78 Since [tjhe Vilgin Islands Bill
of Rights, as intupreted by the Virgin Islands Supreme Couit in Balbom i Range; Amuzcan 0f the
D1 provides f01 more protections than the federal Bill of Rights[ 1 1d ll 77 she seeks a judgment
declaring WAPA’S practice of not tenninating service fox nonpaying government customeis
diseximinatoxy She seeks an injunction prohibiting the practice and any othei appropriate reliefineluding
costs and fees
11,6 The Defendants appeared and after a delay not relevant to this Opinion, answered the First
Amended Complaint and then moved f01 judgment on the pleadings Pertinent heie they denied that Olson
was a customer ()1 that she had a cash deposit Olson had earliei filed a motion for a preliminary injunction
and a motion to appoint a ieceivei, whieh the Defendants opposed and which this Court later denied She
then filed two more motions a motion to take judicial notiee of documents filed with the Virgin Islands
Public Services Commission, and a motion to deem certain portions of the Defendants’ answei conceded
the Court heard a1gument 0n the motion for judgment on the pleadings and stated from the bench that
the motion would be denied but gave the parties leave to address an issue the Defendants p1 essed, namely
whethet by denying (rather than admitting) that Olson was a customer of WAPA the Defendants had
t01eclosed judgment on the pleadings as an option The Ccurt also inquiied into the Defendants’ asseition
that the Court could not grant Olson (or the class) any ieliefbecause Seetions l l 1(a) and 120 OfTitle 30
As noteghiBa/lmm by Virgin Islands Bill of Rights the Viigin Islands Supieme Court \x as leferring t0 seetion 3 0f the
Raised Organic Apt 0t 1954 Set Balbomx Range) Am quhe I l 70 V I 1048 1033 (7019) sit also 1d at 1055 56
& n 3 (citing, and discussing 48 U S C § 1561)
Ohm“ I I Watt; &me1 41H]? eta]
{fist No ST 2019 CV 00602
Memoiandum Opinion
Page 5 ol 23
of the Vii gin Islands Code respectively exempt all pioperty of WAPA from judicial piecess 01 execution
and piohibit the issuanCe of injunctions against WAPA ’ ’ Olson i V] Wale; & Pane; Am]; 2023 \II
Supei 64 f; 2 (citation omitted) (hereinafter Olson 11’ ) Olson asked for lean e to consider the issues
and file a Iesponse ’ ’ [0’ (citation omitted) The response Olson filed was a motion to hold or deelaxe
both statutes unconstitutional ’ [d
W In the inteiim, as briefing was underway on Olson‘s constitutional challenge, this Court in its
fomiei administrative capacity as Presiding Judge of the Superim Court filled the staff mastei position
the Supieme Court of the Viigin Islands established to assist the Complex Litigation Division ’ Id 1] 7
The Staff Master pIoeeeded to hear argument on the supplemental bliefing the Court allowed as well as
on the other pending motions including Olson s motions to take judicial notice and the motion to deem
conceded, but not ancillary motions pertaining to these motions But (5/. 1d The Staff Mastei then issued a
Recommendation addressing Olson’s constitutional challenge, the Defendants” motion for judgment on
the pleadings, and Olson s motions to take Judicial notice and to deem conceded
fl8 Olson and the Defendants Jointly asked the Court f01 additional time to respond and for leave to
file simultaneous iesponses to the Recommendation and one reply to each other 3 response which the
Court allowed Olson timely filed her motion to adopt in part ieject in pan and modify in part which the
Defendants xeplied to The Defendants also timely filed a response which the Court construes as a motion,
that Olson replied to However both sides neglected to serve 01 otheiwise include the Govemment who
had intervened by then as a defendant pursuant to Rule 5 l of the Virgin Islands Rules of Civil Piocedure
to addtess Olson’s constitutional challenge The Goxemment also failed to object to its exclusion
Consequently the Court oxdeted the Government to file a response to Olson’s motion and to the
Defendants iesponse (constiued as a motion) Sm Id 1] 22 The Government filed a notice ofjoinde: in
ilk. Defendants iesponse as well as a motion to adopt the Staff Master s Recommendation on the
0/S()l?\ I 1 Warm &Ponei 411th eta]
Case 1\o ST 7019 CV 00602
Memox andum Opinion
P tge 6 of 23
constitutional challenge I he GOV 61 nmmt did not file a iesponse to Olson’s motion howu er
[1 LEGAL STANDARD
‘19 Judges reviewing orders and 1ecommendations of [staff] mastets exereise a quasi appellate iole ’
111561 Holdmg C01}? 1 BlackROCA Fm Mgmt Inc 2023 V1 Super 75 11 12 They may adopt 01 attirm,
modify wholly or partly ieject 01 16V e1 se, or resubmit to the [staff] master with instiuctions ’ V l R Civ
P 53(t)(1) ‘ To be clear the judge ‘does not act as an appellate court when reviewing the
recommendations of a mastei ” lame) Holdmg (01p , 2023 V1 Super 75 at $1 13 (ellipses and citation
omitted) But the judge does ‘assume a quasi appellate role that entails assessing the legal validity ot the
conclusions reached by the non judicial official [0' (brackets and Citation omitted) This ‘Ieview
permits correction of possible error at the earliest time and will also give the appellate court the benefit of
the tiial court's reasoned consideration [d (brackets and citation omitted) However, ‘ a ‘do over’ as
such is [not] requiled ex Ln when objections are 1aised[,] ’ Id 11 15 largely because [L]OUI’lS avoid using
judieial adjuncts in a way that inCIeases rather than decreases theii work [d ‘ Doing over the w01k the
staff master performed would be wasteful and contiaiy to the reason the position was created Id
1110 Findings of fact which the panics object to are reviewed de now, see V I R Civ P 5 (0(2) as
well as objections to conclusions of law made or ieeommended are also reviewed de now see V 1 R
Civ P 53(fl(3) But (/6 mm 0 rexiew does not tequire that the court ignoxe the recommendation and do
the work itself De now means that the court 5 inquiry is not limited to or constricted by the iee01d mm
is any deference due the conclusions under renew ’” E1 bet Holdmg Com , 2023 VI Super 75 at 1,1 15
(quoting In 18 Infant Shaman, 49 V I 452, 460 (2008) (Swan, J concurring» Instead, ieview is de not 0
because ‘ ultimate autltotity iemains with thejudge Id 21111 12 By contiast, Clea) error is the applicable
legal standaid for teviewing an Older or recommendation of [the staff] master no one objected to ’
Id at ‘11 14 (quoting Stanley 1 I I Billealt 01101; 2022 VI Supei 77 11 29) And “piocedux a1 matters are
Olson t l 1 Han; & Pom; 411th eta]
Case No ST 2019 CV 00602
Memorandum Opinion
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teviewcd only tor an abuse of disuetion ’ Stanley 2022 VI Supet 77 at 11 29 acwid V1 R Ch P
53(t)(3) ( lmless the appointing Older establishes a different standard of IG'vlCW the coutt may set aside
a mastet s 1uling on a p10eedural matter only for an abuse of disuetion ’)
111 1 [A]tter conducting a dc 110x 0 teview, the court can adopt the [staff] mastet ”s xeeommendation in
its entilety without turthe1 analysis ” E; be» Holdmg Corp 2023 VI Supet 75 at 11 16 “The court can also
issue an opinion adopting and incorporating the [staff] master 3 recommendation as its own Id ‘When
ineorporating a recommendation the court can append or attach the [staff] master’s teeommendation to
its own opinion ’ 1d Alternatively the court can issue its own opinion that adopts a pettion of the
recommendation that amplifies or modifies the recommendation, 01 that addlessee specific objections
Id at 11 17 ‘ The court can also re] ect the recommendation but with reasons why to enable lateI appellate
review ’ [(1
III DISCUSSION
1112 Befme turning to the parties xesponses t0 the Recommendation, the Coult must fnst addless tn 0
pleliminary mattels the GOV emment’s failure to comply with the Court 5 prior di1eetive and a
disagreement between Olson and the Defendants as to whethet the motion for Judgment on the pleadings
was denied before the Staff Master addressed it by recommendation
Gm e} nmenf S Manon [0 Adam /N0!lce 0: Jamie;
1113 In its ptior Opinion, this Court directed the Government to SERVE and FILE one or more
RFSPONSES to the motion filed by Plaintiff and the response (t1 eated as a motion for purpose ofthis
Memorandum Opinion and Order) filed by Defendants Olson 11 2023 V1 Super 64 at 11 22 The
reason the CCult issued this ditectiye is because the Gm emment had inten ened and thus beeome a party
and Rule 6 1 directs that “‘a party shall file a response within 14 days aftel service upon the party of any
motion 10’ atfil21 (quotinng R Ci\ P 6 l(t)(l)) (ellipsis omitted»
0/80111 l I Hutu & Ponm 411i!) 6! (II
Cise No ST 2019 CV 00602
Memotandum Opinion
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1114 Teehnieally Rule 53 of the Virgin Islands Rules of Civil Procedule only permits the filing ofa
motion to adopt or to modify, or an objection to a recommendation See V l R C“ P 53(1)(2) (‘ A party
may file objections to 01 a motion to adopt 01 modify the mastet 9 ordex ICpOYl or Iecommendations
no later than 21 days after a copy is sewed, unless the court sets a different time ’ ) Olson filed a motion
in response to the Recommendation to adopt it in part, modify it in part, and 1eject it in part Them was
no ambiguity about W hat She filed She moved for specific relief Thus, the Government and the
Defendants had a duty to file a response to her motion per Rule 6 1(f)(1) The Defendants by contrast
did not file a motion in response to the Recommendation at least not according to its title They filed a
response However because their ‘ response ’ argued f01 and against adopting poxtions of the
Recommendation the Court eonstrued it as a motion See Olson I 2023 V1 Super 61 at 11 17 n 4 Olson
and the Gove1 mnent also had a duty to file a xesponse to the Defendants response (construed as a motion)
“MS As noted, Olson and the Defendants asked to be allowed to file one response to the
Recommendation and one reply each rather than two motions two responses and two Ieplies They did
not include the Gove1 nment and the Government did not object However in obselving that ‘ [e]very one,
including the Government [had] treated the Government as if it W616 an amzcuv czmae not a party
delendant[ ] ’ Olson 1 2023 VI Super 61 at 11 l 1, the Court clarified that the Government was in fact a
party and like any other pmty it had to comply with the obligations imposed by the rules of plocedule,
I As thia Court pleviously cheeryed the staff master [has] discretion to manage the sequence in xx hieh he or she acts on
matters within he1 01 his scope of authority In IL Lunetlee Bat Conzmelcm/ Ling Cases 2023 VI Supel 66 ‘[ 13 n 8 Ihe
staff mastel also has discretion to decide whether to make bet or his recommendation ax ailable on Lexis or Westlaw or when
an opinion as opposed to an order should be issued Elbe) Holdmg C011) 2023 VI Super 75 at {l 18 n ”‘ The Court also
Ieiterates that while it is not for the judges ‘to dictate how the staff master issues recommendations[ ] the staft master must
‘find an applopriate balance between issuing one [ecommendation per motion on the one hand and one recommendation on
multiple unrelated motions on the other hand particularly if it necessitates a motion to exceed the page 11min ” Olson II 2023
V1 Super 64 at ‘1 24 n 2 Here by addressinv four motions in one recommendation No of which (Olson a motion to deem
eonceded and her motion to take judicial notice) the Goxernment did not have had a right to respond to cf Olson I 2023 VI
Super 61 at ‘ 18 n 5 the Statl Master may haVe inadvertently necessitated Olson seeking an extension of the page limits Cf
Olson II 2023 V1 Super 64 ati 24 n 2 All motions must be m enty pages or less unlees leaye to include more paves is obtained
in ad\ mce Id at ‘1 23 (citing V I R Liv P 6 l(e)) Rule 33(1) motions are not exempt from this limit
Oismzi I I Wait: (Si Panel 4111/2 (lul
Lax N0 ST 2019 (V 00602
Memo: anduni Opinion
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ineluding the obligation to file responses to motions To that end the {Quit Oidered the GOV eminent to
file a response to Olson’s motion and t0 the Defendants’ iesponse (constiued as a motion) The
Gm eminent complied in pait by filing its notice ofjoinder in the Defendants iesponse The Goveimnent
did not comply With Iespect t0 Olsen 3 motion, however because it did not file a response
{[16 Instead the Govemment filed its own motion to adopt the Rewmmendation but a motion that
failed t0 comply with the rules of piecedure because it was half a page in length, with the entire
document including the caption, the signature block the certificate of seivice and the portion joining
the Defendants’ response totaling three pages The Goveinment merely took a position that the Court
should adopt the Recommendation’s conclusions on the constitutional Challenge What the Government
filed does not qualify as a motion, however and to be Clear the Coufi did not order the Government to
respond to the Staff Master’s Recommendation See Olson I 2023 VI Super 61 at 1] 22 The C Curt does
not believe that it has that authority because litigants can ehoose not to iespond in which ease courts will
1m iew recommendations lei clear error Cf Stanley 2022 VI Super 77 at fl 29 Of course, the Gm eminent
could have filed its own motion but only ifit obtained leave to file out oftime first Sac Olson 1, 2023 VI
Supei 61 at 1] 22 (‘ Should the Government wish to respond directly to the Staff Master's recommendation,
whethei by filing a motion to adopt or modify or an objection the Government can file a motion for leave
to file out of time suppmted by whatever arguments it deems propel given the circumstances ’ (citation
omitted» The Gm eminent did not ask for leave to file out oftime and filing a motion to adopt in lieu of
complying with this Court’s directive (or the rule 5 requirement) to respond to Olsen 8 motion was
impiopei
1H7 In addition the motion that the Government did file had to comply with the rules Notices of
joinder filed in complex cases ‘ cannot make arguments iaise new a1 guments 0r tequest relief ’ Standing
Order No 4 § 8 In If Complex 1mg Cases Pendmg m the Super CI 0/ the VI, Case No SK 2019
(Jim)! 1 I I Hate; & Pam; mm or (1/
Last: 1V0 ST 2019 (V 00602
Memmandum Opinion
Page 10 of 23
MC 00035 2019 V I LEXIS 28 *9 (V 1 Super Ct Max 3 2019) But written motions espeei 11y
motions filed in eomplex cases must include argument and Lontain appropriate citations to supporting
legal authority ’ Olson 11 2023 VI Super 64 at ‘11 23 (quoting Mans Flew \ Exams F1 eke, 75 V I 407
430 n 8 (2021) (Swan J concurring»; accordVl R CIV P 6 l(a)( All motionsmust (2) state with
pattieulcnity the glounds for seeking the Older, including a concise statement of masons and citation of
authozities ) Here, the Government’s motion failed to make any arguments or cite any legal
authofities in support It also was filed late and without leave 01‘ court, and possibly in lieu of filing a
response to Olson’s motion But responses, not motions are filed in response to a motion Cf 11/181710 \
Dmgco USP] Inc 69 V l 307 316 n 3 (Super Ct 2018) For these reasons the Coutt will disregald the
Government s motion and treat it solely as a notice ofjoinder
P0311116 0f the Motion [0} Judgment on the Pleadmgs
I118 In her response to the Recommendation Olson moves, on the one hand to adopt the Stathaster’s
Iecognition that this Coun denied the Defendants motion fiom the bench and on the other hand, to 1eject
the Staff Mastel ’s Iecommendation that by granting the parties leave to file supplemental briefs the Conn
either implicitly vacated its bench ruling or glanted the Defendants leave to seek reconsideration The
Defendants initially did not address the Staff Master 5 concerns about the postute of their motion but
did teply to Olson s arguments In theix Ieply the Defendants aglee with the Staff Master that by granting
the parties leave to file supplemental briefs the Court Iesewed judgment to atf01d Defendants the
opportunity to submit supplemental briefing on whether the existence of any disputed facts versus only
matuial disputed facts bars judgment on the pleadings ’ (Dets ’ Reply Br in Resp to Staff Master’s
Recommend 4, filed Ian 19 2023 ) The posture of the motion f01 judgment on the pleadings matters hele
beLause the Staff MasteI is correct a judicial adjunct does not have authority to reconsider a judicial
otfieu s ruling on a dispositiye motion E1 go, if this Court denied the motion from the bench there was
Olmnx I I Ham & Pom; «lath Li!!!
L tse No SF 2019 CV 0060?.
Memorandum Opinion
Pane l l of23
nothing for the Staff Mastei to addiess by ieeommendation Howevei, the Staff Mastei does have authoiity
to issue a ieeommendation on any mattei pertinent to the p10eeedings which includes a motion for
reconsideiation of a iuling on a dispositive motion See In 16 41th f0} the Cicatzon & App I 0/ Szaff
Mask: f0; the Complex LIt/g DIV 0/ tin Supel CI of the II 1, Admin Order No 2021 0012, 2021 V I
Supieme LEXIS l4 *3 (V l Aug 12 2021) ( Make formal and infounal recommendations and reports
to the judge regarding am maria pertinent to the proceedings ’ (emphasia added» Additionally, the
Staff Master also has discretion to formally recommend, as a matter pertinent to the proceedings that the
judge leyisit a prior decision Since courts retain the discretion to reexamine theii intetlocutory orders at
any time below a final ordei is entered See Island 7116 & Malb/e LLC i Bemand, 57 V l 596 609
(20l2) (‘ [Tlhe common law eonters tiial courts with the discretion to revise any interlocutmy order at
any time prior to entty of a final judgment )
1119 Olson moves the Couit to adopt the Staff Master 3 recognition that the CQuit denied the motion
fiom the bench and then asks, implicitly that the Court disregaid the Staff Mastei ’5 analysis ofthe merits
0t hex claims She towses on this Court 5 in court colloquy with the Defendants pointing to the Conn
having invited the Defendants to show the Court where it was wrong to change the Court 5 mind, and so
forth She assets that ‘ [b]eing Wiong means that the motion was already ruled upon just Wiongly so
(according to the Defendants) (Pl 5 Mot to Adopt (in Part) Modify (in Part) & Reject (in Part) 9 filed
Dec 15, 2022 (hereinafter ‘ Pls ’ Mot ’) ) Olson also quotes a portion of the transcript where the Court
stated from the bench that the motion would be denied Sce 1d at 8 (‘ ‘The motion for judgment on the
pleadings is going to be denied (quoting H1 g F1 5 4 5 (Sept 7 2021)) Olson then aigues that the
Defendants cannot meet the standard t01 ieeonsideration something she also argued in her supplemental
brief But she fails to address the significance of the Court having granted the parties leave to file
supplemental briefs
Olsonx 1 I 11 me] & P018) 411/11 LIN]
Case No 51 2019 CV 00602
Memoiandum Opinion
Page 12 of23
$90 The Defendants were not given a deadline to file a new motion or to refile a prim motion Instead
they wete giyen lean e to file supplement briefing on a previously filed motion something only permitted
with leave of eomt Cf \ l R C iv P 6 I(e) (‘ Only a motion a response in opposition and a reply may
be served on othei parties and filed with the eourt; further response 01 reply may be made only by leaye
of eourt obtained before filing ) What s mow the Court does not have to gixe the parties lean e to seek
reeonsideration The miles of pioeedure already provide f01 it See genem/ly V l R C iv P 6 4 Coutt
proceedings can be dynamie and geneially should be considered on the whole, and parties should avoid
isolating a portion of the hearing to the exclusion of the entire pioeeeding Duling the same hearing this
Court denied several motions horn the bench including Olson’s motion f01 a preliminaly injunetion and
hei motion to appoint a reeeiyel (See Hl’ g Tr 3 23 25 (‘ The motion to have the state of emergency for
WAPA to be declared under the state of emergency is denied ’); see 1d at 4 3 4 (‘ Also, the motion for a
teeeivership is also denied ) ) The Court also denied the Defendants motion for xeeonsideration trom the
bench See zd at 4 19 21 ( [T]he motion for reconsideration ofeeltlfication ofthe elass action is denied ’)
Yet, when the Court turned to the motion for judgment on the pleadings the Couxt filS’E indicated how it
intended to rule then permitted argument from the Defendants and finally granted the parties leave to file
supplemental biiefs It the Court had intended only to announee its luling from the beneh it VV ould not
have allowed argument and certainly would not have pennitted supplemental briefing sinee motions
eannot be supplemented after they are ruled on Instead the Court simply signaled that it was inclined to
deny the Defendants motion, but then withheld ruling after hearing argument and while awaiting fuxther
bxiefing Thus, there is no clear error as Olson contends, in the Staff Maste1 addressing the Detendants’
motion (See Pl ’s Mot 9 (“Thus, given this context it was clear (and the Rec cleanly erred) that the
motion tel judgment on the pleadings was denied but the Defendants opp01tunity to show the C ourt that
it was Wtong via the standard pioeedural vehicle a motion tor reconsideration ’) ) Eyen if the motion
Olson i V] 11am & Panel 111th (I ((1
Case INC 51 2019 (V 00602
Memorandum Opinion
Page 13 0f23
had been denied the Staff Master could still address it b) recommendation and recommend that the court
revisit its bench ruling gix en the motion s significance to these proceedings
3121 For these reasons the Ccurt finds that Olson and the Staff Master are mistaken about the posture
of the motion tor Judgment on the pleadings This would require the C Quit to reject the Staff Mastei 3
third recommendation mfia that the Court vacate its September 7 2021 bench ruling as there would be
nothing to vacate if the Court did not deny the motion for judgment on the pleadings from the beneh
Howwei, since oral orders are enforceable pending reduction to writing see V1 R Civ P 85, and
because Olson and the StaffMaster believed (based on their reading of the transcript) that the Court denied
the Defendants motion, the C01111 will adopt the Staff Master 3 recommendation and vacate the bench
ruling out of an abundance of caution particularly because the record of proceedings prepared by the Clerk
states that the motion Vt as denied, and that could constitute a reduction to writing Cf W01 [(1 F1 6511 Mitts
LLC i Hem v 71 V l 1161 1179 n 13 (2019) (discussing minute orders as clerk documenting 01a101deis
in the court rec01d) The outcome, and what legal standards apply he1 e, should not turn on finer points of
grammar such as the distinction between the use of denied ’versus would be denied Olson s arguments
and the Staff Master 5 concerns give the Court reason to believe exercising its discretion is proper here
Cf Island 1116 & 11011918 57 V l at 609
OblCCIZOIIS to the Recommendation
1122 Turning first to Olson’s motion to deem conceded, the Defendants object to the Staff Master s
rewmmendation that the C ourt dis1 egaid their response to the motion Their obj ection is overruled As
the Staff Master explained, mfia ‘ [t]he Defendants did not respond to Plaintiff‘s motion 101 659 days
Plaintiff filed her motion on March 18 2020 Without requesting leave of court or explaining the delay
the Delendants filed their response in opposition on January 6 2022 Olson objected and rather than file
a motion and show good cause why their response should be accepted the Defendants ignored Olson s
01mm l 1 Hum & Power lut/z e! (1/
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Memorandum Opinion
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obieetion When the Staff Master addressed it they continue to gloss 0x er it arguing that the Staff
Master 5 recommendation to disregard the Deem Coneeded Opposition due meiclv to a dc lay should be
{quad ’ (Dots Resp to Staff Master 5 Recommend 20 filed Dee 15 2022 (emphasis added)
(lteteinaftel ‘ Defs’ Mot ) ) Defendants point to the COVID l9 pandemic and its unique impacts felt
even more acutely by WAPA a public utility ’ Id Then they Lonelude that a ‘mere’ 659 day delay
Should be excused under these circumstances ’ Id This Court wholeheartedly disaglees
“”23 hankly the C01m l8“ dumbstruek by the Defendant? argument if it can be called that because it
reads mete like a conclusion Other than citing the pandemic as a panacea for their delay, the Defendants
plovide no other teaser} especially none to explain why their counsel (as opposed to the Defendants’
themselves) could not file a timely response to Olson s motion or file an appropriate motion anytime
between Match 19 2020 (the day aftex Olson filed her motion) and January 6, 2022 (the day the
Defendants filed then Iesponse late) to ask that theil delay be excused Even after the Staff Master noted
what the Defendants should have done i e request leave Ofcourt and explain the delay they instead stood
firm in then mistaken belief that they can decide unilaterally when to file responses to motions and can
assert good cause without any showing in support They are mistaken See Gleene \ P I Ware; & P014 e;
Aulh 67 VI 727 740 (2017) see also The Lzrum C0Ip \ Unzteisal OzlPlods C0
69 VI 363 377
(Super Ct 2018) ( ‘Exeusable neglect and good cau5e must be shown, not concluded (brackets and
citation omitted» Olson notes that the Defendants gloss over the fact that that their opposition was filed
659 days late That should end the matter (Pl 5 Reply to Defs Resp t0 the Staff Master 3 Recommend
l7 filed Jan 12 2023 (hereinafter Pl 3 Reply ))Itdoes
'1124 Next Olson and the Defendants Object to portions 01‘ the Recommendation on the motion to deem
For the \ame reasons the Conn Will also adopt the reeommendation to disregard the Defendants untimely response to Olsen 9
motion to take judieial notice
()[\0H\ 1 I Want d2 Pom] 1111/2 6/11]
Case No 51 7019 CV 00602
Memorandum Opinion
Page 15 01 23
eoneeded Th Staff Master reeommended that the Court grant it but tather than deem portions of the
answet admitted grant the Defendants leave to file an amended answei Fhe Detendants objeet as fat as
the Statt Mastei found merit in Olson’s motion but otherwise agree with the recommendation to glam
them leave to file an amended answel Olson agrees with the reeommendation to grant heI motion whieh
(as the Staff Mastet noted) is more aptly ealled a motion to deem admitted not conceded But she objeets
to giying the Detendants leave to file an amended ansvt er whieh she asserts is like giving them a pass or
‘ a ptoveihial mulligan and allowing them to replead iuns counter to Rule 8(b)(6)’s mandate that the
tailuxe to deny results in the allegation being admitted (Pl ’3 Mot 5 ) Defendants countet that coutts
deem allegations in complaints admitted only when the matter is obviously one as to whieh a defendant
has knowledge or intonnation[,]’ (Defs Mot 19 (quoting Claw Dzsnzct 0f Columbza,
831 F Supp 2d
36 47 (D D C 201 1)) or as a “‘sanction where there is bad faith 01 evasive pleading ’ ’ Id (quoting
C [at
831 F Supp 2d at 47) Olson s 1ep1y is that the ‘ Defendants ate in a position eleaxly of their own
making they eannot now piotest where they find themselves (Pl 5 Mot 5' see also Pl 5 Reply 17
(incorporating 131101 arguments) ) She notes that the Defendants had possession 0t then own knowledge
and elaiming that WAPA did not have information/data about its own finaneial statements is not only
disingenuous it iuns dangerously close to Violating Rule 1 1 (Pl ’5 Reply 17 ) Also [a]s to the direct
quotations eontained in the [Fiist Amended Complaint] given that they are direct quotations, the
Defendants should know if the direct quotations are accurate If they at e, they should be admitted ’ Id
And to the Defendants point that they needed time to \ erify the aecuraey of Olson’s allegations, Olson
concedes that is true but eountets that the time to confinn the truth of the allegations is befme the filing
ot an Answel (and not, which is appaiently that WAPA is arguing, whenevet WAPA gets around to it)
[(7 at 18
1795 Having eonsidered the parties positions and the Staff Master 3 analysis the Court agtees with
0R0!“ I I Hate) & Potter tut}: tin]
Ca 6N0 $12019 (V 00602
Memot andum Opinion
Pam? lo 01 23
Olson and will adopt the recommendation to grant the motion to deem conceded The Defendants did not
wmply with Rule 8 For this same mason howevei, the Court agrees with Olson that gaming the
Defendants leave to file an amended answer would be tantamount to exeusing their failure While the
C 01m acknowledges the Staff Master s assessment of the various positions federal eoun‘s have taken see
mfi a note 4, the Virgin Islands rule outlines the consequences for failure to comply ‘ An allegation othei
than one telating to the amount of damages is admitted if a responsive pleading is tequiied and the
allegation is not denied V I R Civ P 8(b)(6) The mle is clear and, thetefore, there is no need to look
beyond it Furthermme the Defendants Clearly knew 01 should have known whether quotes 01‘ their own
public testimony and statements were accurate and denying the allegations for lack of knOMedge was
evasive at best Q F01 this mason, the Court must reject the Staff Master 5 ieeommendation to allow the
Defendants to file an amended answer and instead ditect that in their answer to the forthcoming second
amended complaint the Defendants must admit the eon esponding allegations the Court deems them to
\‘ The Court is sympathetic to a tery limited extent with the Defendants position insofar as Olson s Fiist 5intended
Complaint contains quotations fiom public testimony citations to newspaper articles and retetences to anions taken by
legislators ineluding the Virgin Islands Legislature and the Delegate from the Virgin Islands to the United States House of
Representatives For example the First Amended Complaint states in paragraph 64 that A copy of Bill No 33 0237 is
attached heteto as Exhibit 4 (I irst Amend Compl ' 64 ) This is not an ax erment in a pleading that a defendant can admit
deny or deny for lack of knowledge The Defendants did deny it for lack of knonledge “hitch is nonsensical because the
exhibit Lithei was or was not attached to the complaint i e the Defendants could have admitted that the exhibit was attached
or denied that it was attached But it also undeiseores a broader and growing concern with hon complaints are drafted
particularly complaints in complex cases, that read like treatises 0r essays on a subieet Many of the allegations in Olson s
complaint try to tell the “stoty of WAPA s financial woes See c g Id ‘ 56 ( According to the St Thomas Source WAPA
was scammed out ofmore than $2 million ) But this is not the function of a pleading Olson fot example does not need to
allege that WAPA n as scammed out of money or reference an online newspaper as the source of the information because
allegations in pleadings go to the elements of the claims 01 defenses asserted It may have been sufficient particularly in a
notice pleading jurisdiction like the Virgin Islands it Olson had alleged simply that she is a customer with a cash deposit that
WAPA is insolV em and in financial distiess that WAPA does not account for its eustomers deposits and thus she asseits (on
behalf of the elass) that WAPA will not be able to honor eustomei deposits Similarly and only as an example Olson could
have also alleged generally that WAPA does not pay interest on deposits or disctiminates against [3er ate businessLs and
residents in fa\ ()1 of gm eminent agencies by not terminating gox eminent agencies depaitments and offices for nonpayment
8} including direet quotations Olson ptesumably sought to simplifymatters but ultimately ended up complicating them The
Defendants tentedy may hate been to ask for more time or to file a motion to strike the redundant or immaterial ox imputinent
matters horn Olson s complaint See V I R Ci\ P 170) Instead the Defendants LhOSB to ans“ er and by answeiing they W ere
subject to the tequiiements of Rule ll As Olson notes they could not reserve to themselves the right to verily the truth 01
falsity of her allegations whem yet they got around to it as their attempt to supplement the pleading with Ms hands s
declaiation reveals To the extent the decision to Grant Olson s motion is \ith ed as a sanction it is wairanted here
013mm I I Hate; &P(/H€i 1m}, tin]
Case No S1 2019 CV 00602
MemOiandum Opinion
Page 17 of 23
haw admitted by not eomplying with Rule 8 Ordering the Defendants to file an amended answei u ould
also be pointless at this juneture sinee they will have to answer the amendment to the eomplaint soon
theteafter
W6 Bef01e mining to the objections to the Recommendation on the motion 1‘01 judgment on the
pleadings the Court first must address the legal standard because the Defendants had tequested in their
supplemental brief that the Court convert their motion for judgment on the pleadings into a motion for
summary judgment The Defendants attempted to eliminate the factual dispute the Coutt identified fiom
the bench by attaching to their brief (which was effectively a surresponse) a declaration of WAPA’S
Customer Services Manager Marlene Fiancis who deelated under penalty of peijury that Olson is a
customer of WAPA with a cash deposit of $110 00 Olson objected to the Defendants attempt to
supplement the pleadings and to their iequest to eonvett the motion for judgment on the pleadings into a
motion for summary judgment and the Staff Master iecommended that the Court deny the request The
Court agrees
fil27 Even if the Coutt weie inclined to convert the motion out of judicial economy coneems notiee
must be given to the parties in advanee sec United C0119 \ Hamcd
64 VI 297 311 (2016) and all
parties including Olson must be given a leasonable oppoxtunity to piesent all the matetial that is
pertinent to the motion ’ V l R C iv P 12(d) To give notiee now would only delay this mattei further
More importantly, discovery has not yet begun and Olson, likely, would respond with a tequest to defer
summaiyjudgmentpending discoveiy Cf V1 R Civ P 56(d) Futthermore the C‘outt granted the parties
leave to addtess the legal question discussed du1ing the hearing whether the faetual dispute the Court
identified pteeluded g1 anting the relief the Defendants sought The Defendants maintained that it did not
beeause the gist 0t theii motion was an attaek on the legal sutfieiency of Olson’s eomplaint and failure to
state a claim tor teliet ean be Iaised by motion t01 judgment on the pleadings See V1 R Civ P
()lwni VI [lulu (E P(nu/ lull) cla/
Case No ST 2019 CV 00hO2
Memmandum OpiniOn
Page 18 0f23
12(11)(2)(B) The more appiopliate course especially given the pending (and at that point still
unopposed) motion to deem conceded was to move fOI leave to file an amended answei and ask that the
motion papers be eonstrued t0 taiget the amended pleadings InStead the Defendants tried to supplement
the factual reCOId attei the pleadings had dosed eV en though they knew that mattels outside the pleadings
cannot be eonsidered on a motion 10] Judgment on the pleadings Cf Reynolds 1 Rolzn, 70 V l 887 896
(2019) ‘ Conversion under Rule 12(d) is diSCIetionary Stanley 2022 V1 Supet 77 at 11, 37 The Court
agrees with the Statf Mastet 3 recommendation that conversion is not propex and will overiule the
Defendants objection
1128 Olson next objects to the recommendation that the Defendants motion be granted in part and
portions of her counts dismissed that request a judgment declaring WAPA insolvent and declaiing a state
of emergency The Ccurt will biietlv address the objection that the Virgin Islands Assignment for the
Benefit ()1 C1 editors laws 5ch 5 V I C §§ 1201 32 represents the codification of the “common law light
to bring insolvency proceedings against a debt01 (Pl ’3 Mot 15 ) Even ifOlson is cmrect that the Vitgin
Islands Assignment f01 the Benefit of Cieditors laws provide a [territorial] law alteinative t0 the filing
of a federal bankiuptey ease[,]” Id (quoting Carly Landon, Ma/tmg Asszgnmenrs f2); [/10 Benefit 0/
Cledzlms as 11091 (15A B C 41 Fordham Urb L] 1451 1453 (2014)) Olson overlooks sevetal important
points First assignments for the benefit 0t creditors or ABC‘s, are not used to turn a business around
iestructuie, or financially rehabilitate the business Rather, ABCS are purely used to wind the business
down by selling 01 liquidating it ’ Landon, Making 4sszgnments f0; the Bane]?! 0/ Ciedzlms as Easy as A
B C 41 tordham [Jib L J at 1456 (footnote omitted) Second ABC‘s will generally not be enforced
when they conflict with the public policy of the state [01 territmy] in which the assignment is sought ’ [d
at 1461 Third and most impmtantly ABCS are biought on a voluntary not involuntary basis See a V 1 C
Q» 1201 (‘ N0 iolzzntalv assignment tor the benefit of creditms hereaftei made shall be valid unless the
Olsonx I 1 Haiti (QPmttI 41141 ()1 a]
(186 No S] 2019 C\ 00602
Manet andum Opinion
Page 19 0t 23
same is made in conformity to the terms of this chapter (emphasis added)); see also Landon Making
isszgnmenls 701 the Benefit of ClCdllO/S as East as A B C 41 Fordham Uib L] at 1459 n 53 ( in ABC‘s
the debtm iolzmlaI 11V assigns its assets to a thiid party as trustee ft» the purpose of liquidating the assets
to satisfy in full or in part ereditms claims against the debt01[ ] ’ (emphasis added) (quoting Watch); 1
411101110 843 So 2d 904 910(F1a Dist Ct App 2003)) As the authority Olson heiselt relies on explains
T0 commence the ABC process, a distressed corporation Vi ill generally need to obtain both
boaid of director authorization and shareholder approval Although ABC‘s are a state [or
territorial] law procedure many of their tequiiements such as board and shareholdei
approval, are rooted in state [and territorial] corporate law rather than in ABC statutes 01
ABC common law [d at 1458 (footnotes and quotation marks omitted)
Putting aside public policy concerns and statutory prohibitions on WAPA, a public utility, liquidating its
assets much of which the Staff Master adeptly discussed uifia WAPA did not commence this action
Olson did and Olson cannot force WAPA involuntarily to make an assignment to benefit the class of cash
deposit creditoxs Again Olson s own authority explains that
[a]n ABC stops creditors from pursuing the debt01 through collection lawsuits The
piactical effect of many of the laws surrounding ABCs is that these (:1 edit01 actions are
rendered ineffectiVe This does not mean, howevei that Cieditors ate left completely
without a remedy Cieditors can always file an zniolzmtaii bankluptct petition without
proof of the debtor’s cash flow insolvency Proof of the ABC is itselt giounds tor
involuntary bankruptcy relief [0’ at 1461 (emphasis added) (footnotes omitted)
Olson cannot use the Virgin Islands Assignment for the Benefit 0t Creditms laws to involuntarily declare
WAPA insolvent
1129 Olson is conect in one respect how eve: The Staff Mastei tailed to recognize that an estate is
created in assignment for the benefit of creditoxs pioceedings While the statutes do not expiessly declare
that an estate is Cleated upon execution and deli\ery 0f the assignment With the cleik of court that is
imphed by how the term estate is used thioughout the chapter Sec, c g 5 V I C § 1206 (directing that
Cleik of court take possession of assigned estate) Id § 121 1 (retelling t0 inventmjy and appraisement 0f
Olson I I Haiti & Pout! lurk eta]
Case No SI 2019 LV 00602
Memorandum Opinion
Pane 20 0t 23
assigned estate); 10’ § 1216 (pioyiding for the sale of the assigned estate) The Staff Master noted that
declaiatory relief is available to any person interested as a creditor in the administration of the estate of
an insolvent but then concluded, Inf} (1 that ‘ estates are only established to manage the affairs of insolvent
persons and corporations in banktuptey pioeeedings ’ That is incorrect But the underlying conclusion is
correct N0 estate was opened here because WAPA did not commence an ABC action Assuming
a: gucnab that WAPA could commence an assignment fox the benefit of creditms pieceeding and it there
were a dispute among the ereditoxs about Olson s (and the class’s) status, that dispute could be addtessed
through a declaratory judgment The Court agrees with the Staff Master’s iecommendation that even if it
eould declare WAPA insolvent doing so would not terminate the uncertainty so the Court will exercise
its discretion and enter judgment of dismissal on this count
$130 The next objection Olson iaises is to the recommendation that the Court sua sponte grant the patties
leave to amend theii pleadings As noted supla the Court will reject the iecommendation to grant the
Defendants leave to file an amended answer Olson also objects to having to file an amended complaint
She first requests that the Couit modify the recommendation to allow in lieu of filing a second amended
complaint amendment by interlineation (Pl 3 Mot 3O ) Olson does not explain how amendment by
interlineation operates nor does she cite any auth01ity in support Comm V l R Civ P 6 1(a)(2) This
C ourt also has not uncovered any auth01ity addlessing amendment by interlineation The term
“interlineation ’ means to add new language in between the lines ofa pre existing legal document, usually
to clarify a provision or address an afterthought or omission The insertion is traditionally initialed by all
parties or alternatiVely the document is ietyped and then signed Intetlineation, Legal Information
Institute https //www law comell edu/wex/interlineation (last Visited Apr 23, 2024) There simply is no
authOIity in Virgin Islands law or rules of procedme for what Olson proposes, and the effect of taking a
copy 01‘ the First Amended C omplaint, adding new language and/or striking existing language and then
Ohm“ I 1 Nam & Puma) lut/I «ta!
Cdsc No ST 20l9 CV 00602
Memorandum Opinion
Pave 21 of 73
retyping and resigning it (and iefiling it) would be the functional equivalent of her filing an amended
complaint Olson’s objection and tequcst to interlineate her complaint, iathci than amcnd it is denied
Rcmammg ()bzecizons
{Bl Hating considered all othci objections the parties raised they are ovenuled Briefly the Comt
notes that it agiees vs ith the Staff Mastcr 3 analysis of the constitutionality of the statutes Olson challengcd
and, thus thc Defendants motion joincd by the Government to adopt the iecommcndation will be
gianted The Court is also not convinced by Olson s arguments in favor of iejecting thc Staff Mastei’s
recommendation to deny her motion to take judicial notice of thousands of pages ofdocuments tiled in an
administrative agency pIOCecding Olson objccts, Claiming she needs the dOcuments judicially noticed t0
estop the Defendants from denying their contents or their existence It seems instead howcver, that Olson
is tiying to fOICClose issues that may arise in discovery or during depositions by getting the Court’s
impiimatur in advance Taking Judicial notice is not necessary at this junctuie, particularly becausc
discoveiy has not commenced yet
1132 The Couit also notes biiefly that it agiees with the Staff Master that citations to legal authority are
superfluous in pleadings since pleadings should contain a short and plain statement of thc pleadei 5 light
to ieliet Olson may have a right to relief on Count 11, which alleges WAPA s billing piactices are
discniminatoxy but not undei the Virgin Islands Bill of Rights, which piohibits the enactment of laws that
deny equal piotection or deprive people oflitc, liberty 01 property without due process See 48 U S C §
1361 (‘ No lav» shall be enacted in the Virgin Islands which shall deprive any person of life liberty or
pioperty without due process of law or deny to any person thcrein equal protection of the laws ) As the
Staff Mastci explained the billing practices of a semi autonomous public COIpOiation cannot be
considcicd the enactment of a law Olson objects to removing the refcienecs to the Viigin Islands Bill of
Rights tiom hei complaint claiming it might foreclose further appellate reyicw The Count disagrees The
0/301“ VI Nam ti Pom; INN? vial
Case No ST 2019 C\ 00602
Memo: andum Opinion
Page 22 of 23
issue w as Iaised addlessed and is presencd for appeal The Comt does disagree with the St ttt Waste; on
one point, however giving Olson the option to stand on 1161 eomplaint {lemming ietetenees to legal
authority wouid allow Count II to suwive the Defendants’ motion as the Staff Mastet noted that Virgin
Islands law not tedexal law might ptohibit the discriminatmy plaetiees Olson eomplains of But the
Virgin Islands Bill of Rights does not apply here Since legal authotities do not have to be eited in
pleadings iemoving them “ill simplify the issues For similat reasons, the Defendants objeetion to
denying theii motion for judgment of dismissal on Count II is also oyenuled
Defendants Motion to Dismiss Kugtu / Substzlutlon 01 szem WAPA CEO
1133 Finally, the Staff Master acknowledged that Kupfer is no longei the C E0 of WAPA and then noted
that substitution may be tequiied under Rule 25(d) of the Virgin Islands Rules of Chi] Piocedure The
Staff Master made this obsetyation in locommending that the patties be given leaVe to file amended
pleadings The Defendants in thei1 response moved not to adopt the tecommendation but to dismiss
Kupter outtight, but without naming his successor or offering to substitute the current CEO Olson in her
ieply to the Defendants response merely eounteled that [t]he cunent CEO of WAPA should be
substituted in tor Kupfei (P1 5 Reply 18 )
1B4 WAPA is a public cmporation See 30 V I C § 103(a) WhethCI its officets should be eonsidered
publie officers for purposes of Rule 25(d) 0fthe Virgin Islands Rules of Civil Proeeduie is unclear and
neither the Staff Master 1101 the parties addressed the issue The C oun takes judicial notice that Kupfer is
no longer the C E0 Olson did not specify in her complaint whether Kupter was being sued in his offieial
eapacity or in his peisonal capaeity On the whole hel allegations COnCCIH WAPA s solveney and its
billing praetiees and she seeks deelaratory relief not damages She did not allege any personal action
taken by Kupfer 01 done in deteliction of his offieial duties so the (01m sees no harm in gtanting the
Detendants tequest to dismiss Kupfet and gunning Olson’s request to name the cum ent C E0 in his plaee
Olson \ l I Ham 6: PUHCI 4111/2 eta]
Case No bl 30l9 C» 0(602
Memorandum Opinion
Page 23 01 23
in her toxtheoming second amended eomplaint
IV CONCLUSION
1,135 Having comideted dc 11m 0 the Recommendation in h ght of the patties lespomes the Court 31g] LBS
with the Recommendation and will adopt it in full, eXLept in two Iespects The reeommendation to g1 ant
the Defendants leave to file an amended answer Will be 1ejected because oxdering the Defendants to file
an amended ans“ et at this junctuxe would be pointless as they will have to file an answel to the
forthcoming amendment to the complaint soon theleafter Instead to ensuxe that the Defendants do not
evade the consequences of failing to comply with Rule 8 the Court will dileet them to admit in their
forthcoming ans“ er the con eeponding paraglaphs of the 1‘01 thcoming complaint that mirror the
paragraphs they are deemed to have admitted by not complying with the rule The Court must also reject
the Staff Mastel’s recommendation to allow Olson to stand on her complaint To let hel stand on her
complaint seeking 1eliet unde1 the Virgin Islands Bill of Rights would tequire dismissal ofCount II which
is not what Olson seeks Next, even though the Coun disagrees with Olson and the Staff Mastex on the
status of the Defendants motion fox judgment on the pleadings out of an abundance of caution the Court
will vacate the bench 1111ng denying it which would have the effect ofreinstating the motion forjudgment
on the pleadings Lastly the Court will treat the Govemment’s motion as a notice of joindeI and will
allow fm the dismissal of Kupfel and the substitfition ofhis suecessox Applopliate orders follow
DONE and SO ORDERED this 9% day of pril 2024 / /
// 0//
HAROLD W L WILLOCKS
ATTEST Administlative Judge of the Supelior C ourt
Tamara Challes
Clexkofthe Co t /
/ /
By /
C ourt Clet
Dated 41%;? 91$
RECOMMElNDA HON
Casper, Staff] Master
This Recommendation is submitted in fiartheranee 0f the undersigned’s duties and responsibility
to ‘ [nflake or recommend findings of facts and conclusions of Ian on dispositiye motions ’ t0 ‘ [1n1ake
fonhal Ieeommendations regalding any matter pertinent to the proceedings[,] and t0 [C]0nduet
legal analysis of palties' motions 0r Othel submissions and make recommended findings of facts and
Lonelusions 01 law In 16 Altman anon {01 the Cleanon & 4pp0mz‘mem 0] Staff [Waste] [’01 {/18
(amplex Lzlzg D11 0/1/26 Supei (I of the I I Admin Older N0 2021 0012 2021 V1 Supreme LEXIS
14 *3 4(V1 Aug 12 2021) Specifically this recommends addresses the following motions (1)Motion
to Take Judicial Notice filed by Plaintiff on March 16, 2020, (2) Motion to Deem Conceded filed by
Plaintifflody Olson(he1einafte1 Plaintiff” 01 ‘ Olson’ ) on March 18, 2020 (3) Joint Motion for Judgment
on the Pleadings filed by the Vixgin Islands Wate1 & Powel Authority (hereinafter WAPA’) and
Lawrence J Kupfer (heleinafter ‘ Kupfer ’) (collectively Defendants ) 0n Decembex 29, 7020; and (4)
Motion to Declare / Hold Sections 1 l 1(a) 8. 120 ofTitle 30 0fthe Virgin Islands Code Uneonstitutional
filed by Plaintiff on October 6 2021 Having consideled the parties alguments the undersigned
lecommends for masons explained funher below that the COUIt g1 ant Plaintiff” s motion to deem conceded
deny Plaintist motion to take Judicial notiee without prejudice grant in pan“: and deny in part the
Defendants joint motion for judgment on the pleadings, and deny Plaintist motion to declare title 30
sections 1 1 1(a) and 120 unconstitutional Additionally, though not laised by the parties, the undersigned
also leeommends that the C ourt ma spon/e grant the parties leave to amend theil respective pleadings
I Background
The parties initially appeared befme the (Gun (Willocks P J) on luly 19 2021 for a status
{mpg torconecting 1mg; scrEZler senors the Recommendation incorporated herein isidenticaltothatissued on 0mm
18 202
Reuniimendation
01mm I [ Hutu (L Pom] {um LIN] SI 20” (V 00602
Palm 2 of 57
eonletenee ( ounsel 1‘01 Plaintiff uiged the Court to rule on hei May 7 2020 motion to Leitity the edse as
a Llass action C ounsel tel the Defendants opposed a1 guing that the Court should instead decide the
Defendants motion tor judgment on the pleadings and motion to stay diseoyery first The C Quit initially
expressed concern that the parties had not engaged in discover given the quuiiements of Rule 76(d)(4)
ot the Viigin lslands Rules of ClVll Ploeedure which provides that ‘[t]he filing of any motion ineluding
potentially dispositive motions such as a motion to dismiss or a motion for summaiy judgment shall not
stay discovery in the action unless the judge so orders ’ Fiom the beneh, the Court gianted Plaintiff‘s
motion to certify a class and appointed Plaintist counsel Joseph A DiRuuo Ill Esq elass counsel
The C ourt also granted the Defendants motion to stay discoveiy but only until the patties could meet and
eonfei and submit a stipulated scheduling order The parties filed their proposed order on August 18 2021
which the Court apploved on September 10 2021 The Court scheduled oral a1 gument fin September 7
2021
At the Septembei 7 2021 healing the Count denied the Detendants motion fox judgment on the
pletdings hem the beneh (8‘60 Hr g Tr 5 4 5 (Sept 7 2021) ( THE COURT Okay The motion for
judgment on the pleadings is going to be denied ) ) The basis for the tuling was a factual dispute the
Defendants in theil Answei had denied that Olson was a eustomer 0t WAPA See 1d at 5 5 9 (‘ The
ploblem we have is that the defense in its ans“ 61 did not concede that the plaintitf Olson was a customei
of WAPA 01 even that they had made a deposit A judgment on the pleadings iequires that there's no
factual issms ’ ) Counsel f01 the Defendants objected and asked to be heatd Aftei hearing the objections
the Court granted the Defendants leave to address “llCthEl the Judgment on the pleadings motion w ould
be propel notwithstanding the factual dispute Plaintiff was also gix en leave to iespond Sec 1d at 12 8
2t) ( I'll gixe you the opportunity if you wish to brief it I'll look at it But um you know absent you
showing me citations and so forth to Change my mind that's my ruling Nov» it you V» ish to take leave of
Recommendation
0130121 V I Hate] (Q Pout; 411/17 L. a] ST 2019 (V 00602
Page 3 of57
the Coun to show this Couit where it's wrong l have no problem you know, 1 love lemming so if you
wish to take leave and show me where I'm wrong on my position I'll give you relief HOV» much time do
you want> MR WFLLING Um 30 days Your Honon ’ THE COURT Okay Thats fine Plaintiff will
haw, 15 days after that to iespond Simply on that issue Okay? ’ (line b1 eaks omitted»
The Defendants filed their supplemental brief which the undersigned refers to hereinaftei as a
sun espouse, on October 7 2021 Plaintiff filed her reply, which the undelsigned reteis to as a sun eply
on Octobei 22, 2021 The Defendants attached to their surresponse an affidavit of Marlene Flancis
WAPA’S Customer Sen ices Manager in which she confirmed that Olson is a customer with a cash deposit
on file ofSl ll 00
During the September 7, 2021 hearing the CouIt had also raised a concem about its authmity to
giant relief to the class Section 1 1 1(a) of title 30 ot the Virgin Islands Code proyides that [a]11 propeity
including funds of the Authority shall be exempt from levy and sale by virtue of an execution and no
execution or othei judicial piocess shall issue against the same nor shall any judgment against the
Authority be a charge or lien upon its property ’ Likewise, section 120 oftitle 30 ofthe Viigin Islands
Code piovides that [ajn injunction shall not be granted to pievent the application of this chapter 01 any
part thereof ’ In light of these limitations the Couit questioned whether it could award any ielief to the
class (See Hr’g Tr 16 1 l 17 (Sept 7 2021) ( [E]verything you say is correct Let's say that Everything
you say is conect I agree with you 100 percent What position can the Court do) What can this Court
subject to the statutory limitations what is it that this C ourt can do to WAPA? What can they order WAPA
to do that would not be in Violation ofthe statute?”) )
After fmther discussion, the C ourt began to refei to its eoncems in terms ofjurisdiction See 10’ at
19 23 20 3 4 (‘ It’s almost like a jurisdictional issue Does the Court have juiisdiction to ptovide you
with the iemedy that you seek? ) I he Court then gave Plaintiff leave to addless its LOHLCIHS “11th Olson
Recommendation
0110111 I 1 11am (5? 172116} 111(1) L111] ST 2019 CV 0060/
Page 4 at 57
did by filing, on Octobei (1 2021 a motion to declaie / hold title 30 sections 1 l 1(a) and 120 01 the Viigin
Islands COde unconstitutional The Defendants responded in opposition on October 26 2021 to which
Olson 1eplied 011 Nowmbei 9 2021 Pulsuant to Rule 5 l 0ftl10 Viigin Islands Rules of C1111 Proceduie
th+ Gm eminent 0fthe Virgin Islands W as notified OfOlson’s constitutional challenge and filed a response
011 Decembei 13, 2021 to which 015011 1eplied 011 January 6 2022
Having giVen the paities leave to file additional briefing the Court (W111OLkS P J ) adjoumed
argument to December 9 2021 Because 01 the jurisdictional 0011001118, the C01111 also extended the stay
on dizeovery Diseoxery still remains stayed Bef01e the December healing date counsel f01 Plaintiff filed
a motion on November 29 2021 for a eontinuance because of a 00nfliet with oral argument seheduled
before the United States CQuit of Appeals f01 the Third C ircuit 011 the same day As the undersigned had
been appointed Staff Master by that point the undersigned granted Plaintist 1equest, mowed the
Deeember 9 2021 healing to January 7 2022 and dimmed counsel to come plepared to 211 gue all motions
listed as pending in their July 2 2021 joint report
Plaintiff and the Defendants appeared through counsel at the January 7 2022 11ea1ing N011 Party
Vitol Vi1gin Islands Corp01 ation (heieinatter Vito] ’) and lnterven01 Government 01 the Viigin Islands
also appeaied through counsel The undersigned heard a1 gument 011 Plaintist motion to dCCldle
unconstitutional and b1ief1y addiessed Vit01 s motion to quash At the end of the hearing the undersigned
directed 019011 and Vital to meet and 00111e1 in an attempt to 1esolve their issues which they 1am did
filing a notiee 011 March 25, 2022 that the dispute had been resolved and that Olson and Vitol wou1d
Wlthdl‘dW their motions to compel and to quash, respectively Due to time constiaints the undersigned
was unable to hem argument on all pending motions on January 7 2022 Furthei, two motions the
motion to take judicial notice and the motion to deem conceded technically 11 ere not fully inefed until
after the heating because the Defendants waited two years to file their oppositions
Reeommendation
0/3sz I I Nam & Pom; 1111/1 ctu/ ST 2019 (V 00602
Page 5 of5?
On January l2 2022 the undeisigned issued an ordei scheduling anothet hearing fox Apiil l 2022,
latei eontinued to June 6 2022 to accommodate counsel for Defendants The Ordei also diiected counsel
to file a notice by lamtaiy 28 2022 listing the motions it any they Vt anted to argue Any motion not
listed v» ould be addreesed by ordei 01 rewmmendation on the papers In theii Joint notiee counsel listed
two motions for argument the motion tel Judgment on the pleadings and the motion to declaie seetions
l 1 1(3) and 120 unconstitutional
The undersigned heard at gument on both motions At the eonelusion of the heating, the
undelsigned inquited it counsel wanted to request a tianseript If they did the undetsigned would defer
issuing a tecommendation until the transeript was prepared If the patties waited to tequest the t1 ansetipt
until aftet the recommendation had issued, some of the time allotted by Rule 53(t)(2) of the Vitgin Islands
Rules of C ivil PIOeeduie to object 01 to move to adopt or modify a master 5 tecommendation would he
ieduced while awaiting the transelipt Counsel for Plaintiff indicated that he would be tequesting the
transcript and pioposed that the recommendation ‘be [issued] a eouple weeks aftei the transcript is
prepaied (Hi g It 108 15 (June 6 2022) ) Plaintitfthen filed a notiee on June 15 2022 that she
received the tianseript on June 14, 2022 ’ Nothing futthei has occurl ed to date
11 Motions
A Motion to Deem Conceded
Ihe undetsigned tecommends that the Court grant Plaintiff‘s motion to deem coneeded 1 Plaintiff
moves to deem patabraphs 24 27 28 29 36 38 39 40 41 42 44 45 46 47 48 49 50 51 52 55 56
{—Adet—he Ord; No 2021 0012 directs that the Staff Master shall file all olden recommendatione and repmts promptly
with the clerk's ottice[ ] In It 411/110” anonfm the Cumin”; & Appmmment of Staff Maw) 2021 V I Supreme I EXIS 14
at *4 Ihe undersigned aeknowledges that this Reeommendation is not as prompt as it eould ha\ e been and apologies to the
( ourt and eounsel tor the delay At the time “hen the parties discussed timing of the reeommendation with the undersigned
the undersigned nevleeted to eonsidet the other motions for judicial notiee and to deem eoneeded that \V ere to be addressed
on the papers
I It ma§ be mote aeeutate to say deem admitted
Reeommendation
0hr 11 t I I Hum (E P(mu 4m}: ti (1/ ST 2019 CV 00602
Page 6 0t 57
and 57 0t her 1ir9t Amended Complaint admitted H61 motion rests on Rule 8(b) of the Vixgin Islands
Rules of Ch 11 Ptoeedure and persuasive authority from tedual courts eonstzuing the federal ru1e Plaintitt
points out that Rule 8(b) provides three options when lesponding to a pleading admit deny or deny t01
lat k of knowledge or information (See Pl 3 Mot t0 Deem Conceded 2 filed M81 18 2020 (“ Rule 8(1))
permite a party only three ways to respond to an allegation (1) admit it (2) deny it or (3) state that the
party lacks knowledge or information sufficient to form a belief about the truth of the a11egation’
(quoting KCgfllSC’l Susquehanna Twp Sch Du! 321 F R D 121 124 (M D Pa 2016)) ) (Ice also V1
R C iv P 8(b)(5) (‘ A party that 121016 knowledge or information suffieient to form a belief about the truth
of an allegation must so state, and the statement has the effect of a dental ” (emphasis added»
Plaintiff points to multiple places in the Defendants’ Answer where according to he1 the
Defendants violated Rule 8(b) by not admitting the corresponding paragraphs of her Filst Amended
Complaint For example, she points to the Defendants having denied paragraph 24 0f the Filst Amended
Complaint in which she alleged that she is a customer OfWAPA with a cash deposit on file How do the
Detendants not know that the Plaintiff is a WAPA customer and shouldn t they know it she has a
deposit[] Olson asks (Deem Conceded Mot 4) Another example Olson points to patagraphs 38
thtough 42 of the First Amended Complaint which quote portions of the October 1 2019 testimony
Kupfet gave before the 331d Legislatute Committee of the Whole Olson attached a copy of Kupfel’s
statement to her Complaint as Exhibit 2 Paraglaphs 38 thtough 42 quote or 1efe1 enee portions of Kupfer s
testimony Rather than admit deny or deny for lack of knowledge, the Defendants’ responses to all five
patagrdphs me the same the testimony speaks for itself and [they] deny the allegations asserted in
Patagraph No 38 0f the Complaint t0 the eontlary (Ans 1] 38 see also 10’ W 39 42 )
Plaintiff further points to paraglaphs 56 and 57 w hieh allege that WAPA was scammed out of $2
milhon due to phishing emails and lax eybeteeeurity twining tor employ ees Specifical1y, Palagraph 56
R eeemmendaiion
()lwmx I I "(IIH & Ponu {m}: e! (1] ST 2019 (V 00602
Page 2 01 57
ates to 3 him 11 2019 artiele from the St Thomas Source ax ailab1e at
htth //stthomassou1ee cein’eontent/ZOI9/06/1l/wapa missing 2 18 1111111011 was stolen in emaiI scam“
which reterenees a statement WAPA issued the prior weekend In their Answer the Defendants claim that
they lack sufficient information to admit 01 deny this allegation Olson cites this iesponse as
demonstmtfing] a who1esale tailuxe to comply with Rule 8 in good faith [and] an impropei attempt
to obseme the Defendants’ position ’ (Deem Conceded Mot 7 )
One final example is paragraph 36 111 paiagraph 36 Olson alleged that ‘ WAPA has a $24 million
judgment entered against i[t] in ‘ fede1a1 court due to Trafigura (a former fuel suppliet) (First Am
Lomp1 “5136 ) In their Answei, the Defendants den[ied] the allegations assented in Paiagraph N0 26 [sic]
of the Complaint ’ ( Answ e1 11 36 ) Olson counters that WAPA ‘ entered into a consent judgment on May
10 2017[ 1 ’ (Deem Coneeded Met 9) and attached as exhibit 2 to her motion a copy of the May 10, 2017
judgment signed by Judge Curtis V Gomez in Yngfigma Tladmg Ll C1 Vugm Islands Water & Pane;
[41111101111 Case No 3 16 w 00028 3 Since WAPA consented to entry ofjudgment against it fei WAPA
to lespond t0 Olson’s complaint with anything othei than an admission bordels on a violation ofRule 1 1
Olson argues
These examples are Just a few 01‘ the twenty two paiagraphs in the Defendants Answer that Olson
wants the Court to deem admitted 1n supp01t 0t her motion howevei Olson did not eite any Virgin Islands
precedent binding or persuasive She did (.116 several decisions offederal courts that support the re1iet she
Seeks (Sec general]: Deem Conceded Mot 2 3 (citing KBgCIIYC’ \ Susquehanna Imp Sch DIM 321
FRI) 121 124 (M D Pa 2016) GIa/mm [mgg C011) \ 4dau N0 116 CV 2521 2018 US Diet
1 I \ eh—thougISS‘mi proxided a eopy the Court would lime discretion to take judicial notice of the judgmmt 01 the Distriet
Court of the Virgin Islands Cf Gm ’1 aflhe 1 I 1 Untied Indus SM Tumsp PIOf & Gm '1 110110“ (MA 1m 64 VI 312
319 n 2 (2016) ( Although the patties did not inelude the Distriet Court record in then joint appendix this Couit may take
judicial notice 01 its existence and it )
Reeommendation
0/301“ 1 I 11am Ci Pane; lurk eta/ 51 2019 (V 00602
Page 8 0t
57
LEXIS 67430 (M D Pa Apt 23, 2018) (mzted States [01 the use 0] 411101710th Sp; 1111/61 C (Np 1 11¢; I 1’!
Chapman (‘2 Scan Corp 305 F 2C1 121 123 (3d Cir 1962); SCC Sznclazz Calm (0 i Wald No 1 14
CV 1144 2015 L S Dist LEXIS 140746 (M D Pa Oct 16 2015)‘ [10111 Nassau Civil Action l\0 09
383 2011 1‘ S Dist LEXIS 95303011 D Pa Aug 25 2011)) )4 Howevet before addressing the metits
the undersigned must first addtess the Defendants two year delay in tesponding to Olson s motion
i Defendants’ Response Should be Disregal (led
The Defendants did not respond to Plaintiff’s motion for 659 days Plaintitt filed her motion on
March 18, 2020 Without tequesting lean of count or explainng the delay, the Defendants filed theii
response in opposition on January 6 2022 Putsuant to Standing Order No 4 parties to complex eases
‘ need only alett the ( omt to [the] alleged violation or impropriety (timeliness, new argumenfls) raised
failure to adhere to totmatting requirements etc ) in theit respectiye papers or by a separately filed notice
and the CCurt will then take that intormation into consideration ’ Standing Order No 4 11 7 at azlable at
In )6 Complex [trig Cases Pendmg m Illa 5111701101 Cami 0f the V1, No SX 19 MC 035, 2019 V l
I EXlS 28, *9 (V 1 Super Lt Mar 5 2019) Olson alerted the Court to the Defendants’ untimely tesponse
in he1 teply (Sec Pl 5 Reply 1e Mot to Deem Conceded 2 filed Jan 10 2022( Thus the 659 day late
4 Rule 11 0fthe Virgin Island.» Rules 01 CM] PIOLedUIC prm ides that [bjy ptesenting to the court a mitten motion an
attorney or self tepresented patty certifies that to the best ofthe person's knowledge infonmation and beliet toxmed attei an
inquiry teasonable under the circumstances the applicable Viigin Islands la“ has been eited including authority for and
against the positions being adt oeated by the party V I R Cit P l 1(d) Although Rule 1 1(d) does not mandate that an attorney
or self lepresented party alert the Couit to the absence of Virgin Islands‘ law the undersioned beliet e9 that this requirement is
Kagonabl} implied The Court could also infer from an attorne) or self represented party 5 failuie to Cite Virgin Islands law
(including ease la“) that there Is no local law on point A problem arises hottever because Rule 11(d) does not carry a
similai 1equitement when citing non Virgin Islands 1a“ i e that authorities for and against the position being 21th oeated also
be cited Considering that thue are 50 States 6 leiTitories (including the Disttiet of Columbia) 94 fedeial district courts and
13 federal appellate courts there is‘ a strong likelihood ofdi\ ergent approaches Here 101 example the question is whethet
courtx‘ can (01 should even it they can) LOIIVle a iesponse in an answer to a denial when the rules gm eming pleadingb are not
eomplied with Or should a court simply grant the patty lea\e to amend its pleading instead lemming tie a last resort the
authority to deem an allegation admitted 1he undemigned s thL\\' 01 the L836 law shows a disagreement among the federal
coutts 0\ at how and “hen courts exereise this authority and absent a requiiement that attorneys or self ieptesented patties Cite
authority both for and again“ their own positions the court xx ould be lelt to assume mistakenly perhaps that the petfiuasite
authority cited by the mm ant reptesettts the majority (or unit ersal) approach which could be error it the mmant only cited
authority that suppotted hex position rather than presutt the 001111 \tith both or all apptoaches and then aigue fot th! apptoach
that she belie\ ed in
Rewmmendation
0/30)“ I I Natl); & Pom; 411/11 ([11] $1 2019 CV 00602
P 1g? 9 of 57
opposition must ht. rejeetetl/disregarded and the motion granted in full ) ) 1 bus betete eonsideiing the
Defendants’ response the undeisigned must address its untimeliness F01 the following masons, the
undersigned ieeommends that the COUI‘t disregard the Defendants response and Plaintiff‘s teply
Rule 6 of the Virgin Islands Rules of Civil Procedure p1 ovides that [ulnless otheiwise Oideied by
the e0111”t a party shall file a iesponse within 14 days after seniee upon the patty of any motion VI
R Civ P 6(t)(1) The Court (Molloy, I ) piovided otherwise by issuing Standing Order No 4 which
applies to all eases in the Complex Litigation Division Section 5 of Standing Ordei No 4 extends the
deadline 101 all responses [and] for all replies to twenty eight (28) days from the date the [motion
or] response is served and filed provided that the parties meet and confei as diiected and that a
diffeient deadline is not specified by court ordei In re Complet [mg Cases Pendmg m the Supazo;
Cowl 0f the VI 2019 V I LEXIS 28 at *7 8 Thus, unless the Court provides otherwise the deadline for
all responses and replies in complex cases is 28 days approximately seven days more than the 14 days
piovided by Rule 6 l(f)(l) as calculated pei Rule 6 See V I R Civ P 6(I)(B) (a 1—1 day deadline v» hich
is less than 15 days, is calculated by counting only business days) ( [W]hen the peiiod is 15 days or m01e
count eyeiy day including intermediate Saturdays Sundays, and legal holidays when the period is 14
days 01 less (10 not count intermediate Saturdays Sundays and legal holidays[ ] ’) Thetefoxe the
Defendants had twenty eight days or until April 15 2020 to file their response
However, two days after Plaintift filed hei motion the Supreme Court of the Virgin Islands on
Match 20, 2020, issued Administiative Order No 2020 0004 in iesponse t0 the ( OVID 19 pandemic
Administrative Order No 2020 0004 extended ‘ [a]ll deadlines in all pending cases which have not yet
passed by t0u1teen (14) days or to April 27 2020 whichever is longei[ ] In ye Suspension 0/ hon
hssc’ntzal Jud Blanch Sens In Response [0 (0101mm us Dzseasc 2019 ((0110 19) & 4d0p11011 0/
Inteizm PIOCS‘ 1,2 Marten 38/016 the b CI of the V1 (111111110 Supel Ct 0/1/26 I 1 Admin Ordei N0
Recommendation
Olson! I I ”(1ch &P0uu 1211/1 (111/ ST 2019 CV 00602
Page 10 01 x7
2020 0004 2020 V I Supt: me LEXIS 5, *8 9 (V I Mar 20, 2020) A second 0rch Administiative Oldei
N0 2020 0008 furthet extended [a]ll deadlines in all pending cases which ha[d] not yet passed by
tourteen (14) days or to June I 2020 whichevei is longe1[] [17 1e SIIYPLIUIOII 0f 1V0}? Ecsennal furl
Blanch Yum m Rcspalzse f0 (01 (mamas Dlsease 7019 (COVID 19/ & Adoptmn 0/ litre; m1 P1065 m
Matias Bg/wc file 3 (I QfI/TG VI cmdtlzc Supel Cr ofthe I 1 Admin Order No 2020 0008 2020 V l
Supieme LFXIS 9 *6 (V I Api 23 2020) A third Older Administratiye Older N0 2020 0010 gamed
a final extension declaring that ‘ [a]ll documents that were due to be filed in the Supei i01 CQuit
between Maich 23 2020 and June 14 2020, shall be due on June 15 2020 ’ In re Yzcznszrzon f0
Ruumpflon of C um”? Jud Blanch OpGICZI‘lOILS Admin Order No 2020 0010, 2020 V I Supreme LEXIS
l4 8 (V I May 28 2020) Thus, the deadline tor the Defendants t0 Iespond t0 Olson 5 Motion to Decm
Conceded originally Apiil 15, 2020 Vt as extended by the COVID 19 pandemic ielated administrative
OldBI‘b to J une 15 2020 Defendants did not file thei1 response until January 6 2022
The rules governing piactim, and procedure in the Superior C curt are silent on whethei courts
should OV€ll()Ol( untimely motion papeis it an opposing party docs not object One could argue that the
deadline f01 filing responses and replies are claims processing iules which courts should not raise 91m
sponte Sac Gm s Q/tlze I I i (woke 54VI 237 253 54(2010)( It is well established that time limits
set exclusively by couit rules axe mere claims processing iules which do not affect a court S subject matter
juiisdiction wen if they may iesult in dismissal if violated ) But heie Olson did object And mole
importantly the Supreme C 01111 has held that litigants cannot dictate that the Superior C ourt resolve
motions in a piecemeal mannei, piolonging litigation ’ G1 eenc 1 VI Waic: (Si Pom; 111th 67 V I 727
”740 (2017)
The Defendants did not move for an extension of time or f01 lune to file thei1 xesponse out of
time Instead they adhetcd t0 their own timing, waiting to file their response until aftei the undetsigncd
Recommendation
Olsonx I I Walt] & Panel 411th 51a], ST 2019 CV 00607
Page ll of 37
on Deeembet l, 2021, granted Plaintiff‘s motion to continue the December healing and directed that the
Ltndeisigned would hear argument on all pending motions (See Dets Opp’n to Pl 8 Mot to Dean
C onceded 2, filed J an 6 2022 ( Defendants submit this opposition pursuant to the Court’s Decembex l
202] Ordel diieeting that all pending motions will be argued at the Januaiy 7 2022 hearing ’) (heIeinafter
Deem Coneeded Opp n ’) ) Clearly, the Defendants adhered to their own timing, waiting until the day
before 01al argument to file theit response That delay had the effect of rendeting the motion to deem
eoneeded not fully btiefed and caused furthei delay (See Ordei l n I entered Jan 12, 2022 ( Two motions
a eie technically not fully briefed until after the January 7, 2022 hearing namely Plaintiff‘s motion to
take judicial notice and motion to deem conceded ) ) For these masons, the undersigned recommends
that the Court disregaid the Defendants’ Iesponse and by extension all a1 guments in Plaintiff’s reply
except her objeetion to the untimeliness of the Defendants iesponse
ii Merits of the Motion
However even it the Court disagiees and consideis the Defendants’ response the explanations the
Defendants otter actually support the when” Plaintiff is seeking F01 example the Defendants assert that
when infonnation necessaiy to eonfimt the tiuth or falsity of certain allegations is not leadin available
possessed by thiid parties or otheiwise difficult to ascertain courts routinely uphold [dletendants’
assettion of a lack of sufficient knowledge ’ (Deem Conceded Opp n 4 ) The Defendants also contend
that they like defendants in othei eases also did not obviously readily possess information telating
to WAPA’S financial statements liabilities and assets payments by customer; rating agency repmts
third party news reports and yarious othei statements made by thiid parties legislatures or WAPA
employees ’ Id at a It is a stretch to accept these
"I ake as examples Olson alleging that she is a ratepayei and referencing the testimony of Kupter
betote the ”mid Legislature Olson made both allegations in her initial complaint (Sec ( ompl Tl l5 filed
Recommendation
Olsoni l I Hula & POHC’I Auf/z (111/ ST 2019 (V 00602
Page 13 of37
Oct 30 2019 ( Plaintiff is a customer of WAPA and like all WAPA customeis as a condition preeedent
t0 1€C€1Vlllg service, made a customer deposit with WAPA ”)‘ sec also 1d {W 28 33 (referencing Kupfei ’s
testimony before the 331d Legislatuie) ) The Defendants did not file theii Answei until February 28 2020,
roughly a month aftei the Fiist Amended Complaint was filed and feur months after the initial Cemplaint
They had ample time to determine whether the copy of Kupfer’s testimony that Olson attached to her
pleadings was accurate “Responses that documents speak for themselves and that allegations axe legal
conclusions do not comply with rule 8(b)'s requirements ” Kassa i Plans Admin C 0mm 0/ Cztzgloup
Inc No CIV 10 0933 JB/ACT 2011 U S Dist LEXIS 165427 *9 (DN M Apr 27 2011) They also
had ample time to determine w hether Olson was a customer Instead, they denied the allegation which
only frustrated their motion for judgment on the pleadings and caused delay While counsel for the
Defendants may not have possessed inf01mation coneeming WAPA’S financial statements, liabilities
assets customers, and so feith theii Clients did 01 should have
Anothei example funhei illustiates Olson’s objections the allegation that the District Ccurt
entered a judgment against WAPA WAPA and Kupfei know whether this allegation is true, and their
attorneys had a duty to meet with them betoxe filing an answer on then behalf Cf V l R Civ P 1 1(h)
(noting that pleadings must be based on an inquiiy reasonable undei the cixcumstanees) [A] party may
not deny sufficient information or knowledge with impunity but is subject to the iequirements of honesty
in pleading An avennent will be deemed admitth when the mattei is obviously one as to which defendant
has knowledge or information A paity may also be held to the duty to exert leasonable elfort to obtain
knowledge Ofa fact ’ Kege/ I58, 321 F R D at 125 (internal quotation marks and eitations omitted)
l astly the Defendants essentially concede that then Answei at least in pait does not comport
with Rule 8(1)) because they state in a footnote that they ‘may seek leave to amend then Answu attei
disem my (Deena Coneeded Opp’n 4 n 4 ) Like many of em rules, Rule 8 0f the Virgin Islands Rules of
Rewmmendation
013mm 1 [ Unit) & Panel furl! LIN] SF 2019 CV 00602
Pave l3 0f5'.’
Civil Ploeedwe is patterned after Rule 8 of the Federal Rules of Civil Procedure Cf Pom ell 1 [AM
PI 01cc m c Sens Inc 72 V1 1029 1038 (2020) ( Both Rule 8(0) and Rule 15 ofthe Virgin Islands Rules
of Livil Piecedure are substantiwly identical in all relevant respects to their counterparts in the Federal
Rules ”) Accmdingly “the body of case law construing th[e federal] rule may p1 operly be considered in
construing [the local 1ule] ’ Slack \ Slack, 69 V I 567 573 (2018) There is one important difference,
how evei, between Federal Rule 8(b) and Virgin Islands Rule 8(b) the omission of subsection (b)(3)
Compaie Fed R Civ P 8(b)(3) ( A party that intends in good faith to deny all the allegations of a
pleading including the Jurisdictional giounds may do so by a genei a1 denial A party that does not
intend to deny all the allegations must either specifically deny designated allegations 01 geneially deny all
except those specifically admitted ) wilt V l R Civ P 8(b)(3) (‘ [Reserved ] ) When filing an answer
to a complaint at crossclaim or a third party complaint the responding party cannot assert a gene! a1 denial
Instead in Virgin Islands practice requiies that the responding palty admit or deny each and every
allegation even ifthe denial is for lack ofinformation This difference supports Olson s 1equests because
the Defendants were obligated to conduct a reasonable inquiry befmehand Defendants did not comply
with Rule 8(b) So even if the Defendants response is not stricken, the arguments they offer in opposition
actually underscore the relief Olson seeks in he1 motion
As noted in the discussion in footnote 4, courts in otherjurisdictions are divided when answers do
not comply with Rule 8(b) Some courts simply deem the offending allegation admitted as Rule 8(b)(6)
directs, while others diiect the defendant to file an amended answei to COIrect the offending iesponses
Compalc chense 321 F R D at 125 ( Based on the fmegoing, we will issue an Oidei requiiing
Defendants to file an amended answei with responses that confmm to the pleading 1equi1 ements 01 Rule
8(b) ) mt]? Flefclzei 1 [Ioeppnu Wagnu & Emits LIP No 2 14 CV 231 RL PRC 2015 U S Dist
LEXIS 153057 at 21 (N D 1nd 1\oy 12 2015)( The Couit DEEMS ADMITTED th allegations in
Recommendation
Ohm“ I 1 Hutu (1 Po u 1111/7 la] 81 2019 CV 00602
Page 14 01 >7
Paiagraphs 4 and 10 of the C omplaint ’) The majority of courts appeal to favor granting leaVe to amend
6/ Telfo; cl Bo; 011g]: 1m]: 1 L S 1119/1 No 12 CV 6548 2021 U S Dist [EXIS 198815 *5 (E D Pa
Oct 15, 2021) (collecting eases) The undersigned recommends that the C Quit g1 ant Plaintiff’s motion to
deem conceded but iather than deem the various paragraphs admitted the undeisigned instead
iecommends that the Court direct the Defendants to file an amended answer that Lomplies with Rule 8(b)
B Motion to Take Judicial N otice
On Maieh 16 2020 Olson filed a motion to ask the Coult to take judicial notice 01 thousands of
pages of documents filed before the Public Seivices Commission in the case styled as [n the Matter
0/ the Vugzn Islands Wale} and Power Altman!) Petition for Elect} 16 System Rate Relief PSC docket no
678 (P1 3 Mot to Take Jud Not I filed Mai 16 2020 (hereinafter Jud Not Mot ))P1aintiff also
attached as an appendix to her motion copies of the documents generated in the administratix e proceeding
Citing Rule 201 ofthe Federal Rules ovaidenee (not the Virgin Islands Rules of Evidence) Olson asserts
that the Court ‘ ‘must take judicial notice if a party requests it and the court is supplied with the necessary
information ’ Id at 7 (emphasis in original) (quoting Fed R Evid 201(0) Judicial notice may be
accomplished at any stage ofthe ploceeding[,] she argues further Id (quoting Fed R Exid 201(d))
Olson is conect But she tails to explain what the Court should do once it takes judicial notice And tel
this reason the undersigned recommends that the Court deny Olson’s motion without prejudice ‘
First Olson’s failure to cite the Virgin Islands rule is not fatal since the two iules ate identical
Compaie V I R Evid 201 MM Fed R Evid 201 Thus, the undetsigned will proceed as if Olson Cited
the Virgin Islands rule Second, even though Olson is conect Rule 201 does require that couits take
As With their response in opposition to Plaintist motion to deem conceded the Defendants also filed their lesponse in
opposition to Plaintitt s motion to take judicial notice late and without seeking leave or filing a motion showing exeusable
neglect The undelsigned incorporates the lemons giV en in the pieceding section and recommends that the Couxt disregaid the
Defendants response and by extension Plaintith reply
Rewmmmdatioi
Olsoni I I Nate} diPuucr 1th (ta/ SI 2019 (V 00602
Page 13 0t »7
judicial notice when asked and does provide that judicial notice can be taken at any stage of the
pxoLeLdings what Olson neglected to provide here is backgiound Rule 20l does indeed say that
judicial notiee is mandatmy when a palty tequests it and supplies the necessary supporting information
But facts subject to judieial notiee are not exempt from analysis under the othu rules of evidence
5117251611 Inc \ 411981 {a (11/er C0 NOS 01 C 736 01 C 5825 2006 U S Dist LEXIS 95678 *9 (N D
Ill NOV 16 2006) (Litations omitted) ‘As a result courts refuse to take e» en mandatmy’ judicial notice
when the fact to be noticed is inadmissible undet Rule 403 Id Further courts do not take judicial notice
just for the sake of taking judicial notice Taking judicial notice is done in connection with some other
pieceeding in a case A court's decision to take judicial notice of a fact is nothing mow than a finding
that the prottering party need not undertake the burden of litigating the existence of the fact ” United
Staten Falcon 957F Supp 1572 1585 (SD Fla 1997)
Olson fails to explain how she will use the documents she wants judicially noticed She says in her
reply which the undersigned leferences only for context given the recommendation in footnote 5 that
she. seeks judicial notice of four basic groups of documents (1) the transcripts of hearings, (2) PSC
orders (3) WAPA s own documents submitted in litigation and (4) PSC documents (including but not
limited to market reports and similai commercial documents (e g S&P and Moody 3 reports) ’ (Pl 5
Reply 2 filed Jan 10 2022 ) But again Olson fails to explain what facts would be established and for
which claims if the Court weie to take judicial notice Olson does not point to any admissions in the
tlansmipts of the hearings before the PSC in which WAPA admitted for example, that it favors
governmental customers ove1 indi\ idual or business customers and Judicial notice of that fact would help
alleviate the burden of proving facts in support of C ount 11
But peihaps most importantly, Olson does not address the fact that Viigin Islands courts can take
judicial notice of the 011.5 [CHCL of documents filed in other ptoceedings but cannot take judicial notice of
Reu‘mmendcltion
0180121 I / Ham & Pam! Aullz Lia! 51 2019 CV 00602
Page 16 of 37
the contents of those documents ‘ A distinction must be eatetully d1 awn between taking judicial notice
of the existence of doeuments in the file as Opposed to the tluth 0f the lads asselted in thoxe
documents Func/lx Pcop’c 54 V l 600 616 n 13 (2011) (quoting State 1 Ram 98—1 P 2d 78 102
(Haw 1999)) Judieial notice is nevel appropriate when the facts ale disputed WAPA may not dispute
the existence of the hearing transelipts, fm example or PSC s Oldels But WAPA may dispute the facts
assetted in those doeuments particularly since matters before the PSC 316 somewhat adx elsarial insotat
as the PSC must balance the intelests ofpublie utilities with latepayers Cf 1/ I Ware; & Pom; Aur/z \
V1 Pub Sens (0mm 11 Civ No 657/04 2006 V1 LEXIS 37 52 54 (V 1 Super Ct NOV 30 2006)
(holding that the PSC must plovide notice and a meaningful hearing to publie utilities under title 30)‘ see
also 10’ at *52 33 (referring to ‘ ‘a meamng/itl hearing ’ as one in ‘Whieh interested persons can present
their views and present evidence in support thereof (emphasis in original) (quoting V1 Hotel Ass 12 x
l [ Warez & Pom; Auth 8 V1 580 587 (3d C11 1972)) Everyone including the courts would benefit
if the parties were alleviated of some ofburdens 0f litigating the existence of facts But that ploeess should
not be done in a vacuum and can be done closer to t1ial For these reasons the Llndelsigned lecoxnmends
that the Court deny Olson s motion to take judicial notice without prejudice
C Motion for Judgment on the Pleadings
The Defendants jointly move for judgment on the pleadings seeking dismissal of all elaims In
luling on a motion torJudgment 0n the pleadings, ‘ [e]ourt[s] view[] the facts alleged in the pleadings and
the infelenees to be dlawn from those facts in the light most favoxable t0 the plaintiff[ ] Reynolds 1 Rolm,
70 V l 887 896 (2019) (quotation marks and eitation omitted) Courts ‘ may not considel evidence flom
any souree outside of the pleadings and the exhibits attached to the pleadings in determining whether
to grant a motion fox judgment on the pleadings ’ 1d (quotation ma1ks, brackets, and Citation omitted)
“[A] motion f01 judgment on the pleadings should not be g1 anted unless the moving party has established
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01mm i I Haiti & POM; mi}: {la} 51 2019 CV 00602
Page 1 / of 37
that them is no matetial issue of fact to 1es0lxe, and that it is entitled to Judgment in its lave: as a mattet
0t law Id (quoting Unwed Com \ [{ade 64 V I 297 305 (2016))
Before addtessing the merits, the unde1signed first must make a point about the posture of the
motion because technically the Court denied it from the bench 0n Septembet 7 2021 Although that
ruling was not reduced to writing yet it is enforceable per Rule 85 0f the V11 gin Islands Rules of Civil
Pxoceclule During the same hearing the Court also granted the parties lea\e to submit supplemental
briefing From a procedtual standpoint if the Defendants motion was denied, the supplemental briefing
<.0uld be constlued as a motion for teconsideration But it might only satisty the clear emu of law basis
See genuallt V l R Ci» P 6 S(b) (listing change in law new evidence clear elror, 01 lailtue 0f coutt t0
considel previously raise issue as grounds for Ieeonsideration) The othe1 option is to view the denial 01L
the motion from the bench as having been vacated implicitly by the Court granting the parties leave to file
supplemental briefing
The statfmastet has authority in all complex cases to recommend a tuling 0n dispositiVe motions
See genemlly In If Aur/zon anon f0} the Cleanon & Appomimem 0/51fo [Waste], 2021 V 1 Supreme
I FXIS 14 at 3 The statfmaster does not have authority to reconsider a Judge 5 ruling on a dispositive
motion Thus, it the C ourt believes that its bench ruling stands, and the motion was denied from the bench
then the undersigned leeommends for the reasons given below, that the Court tevisit that ruling, deny the
request to eonvert the motion into a motion t01 summary judgment, and grant it in part and deny it in part
Cf Island 7116 & Mmble [[C v Ber n and 37 V I 596 609 (2012) ( [T]he common law confers trial
courts with the disetetion t0 tevise any intetloeutory order at any time prim to entry of a final judgment ’)
Altetnatively if the Coutt agtees that the bench ruling was implicitly vacated, then the undetsigned
recommends only that the Ccurt deny the request to convert the motion for judgment on the pleadings into
a motion t0! summary judgment and g1 ant the motion in part and deny it in pent
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()1th VI Halt! & P0th 1117/? mu] SI 2019 LV 00602
Page 154 0t 37
One last point must be addressed before tuming t0 the melits 01‘ the claims Olson asserted The
Defendants make a thtesheld aigument that Olson lacks standing and thus all her Liiil‘tfi are not
justitiable The Court should Iejett these aiguments ‘ Fhe Viigin Islands Supieme Court [has]
aeknowledged that wheter the party biinging suit has a right to the relief it is seeking goes to the melits
at the cause 01 action not the Supeiim Court's authority to hear the ease in the first plaee [1,655 01/ L 1
C011) 1 I 11101 Dame! 72 V I 676 697 (Super Ct 2020) (brackets and ellipsis omitted) (quoting Unwed
(01p 64 V I at 303) Thus standing in the Virgin Islands challenges whether a plaintitf has stated a
claim for ieiief ’ Id acm/d Sate (010/8211 Inc \ Elwin, 2022 VI 7, 1] 1011 1 (2022) (‘ [B]y dismissing
SC B's winplaint as moot, the Supeiim Court in effect dismissed it for failure to state a claim puisuant to
Virgin Mantis Rule 0fCi\ i1 Proeedute 12(b)(6) ’) Olson alleges that she is customei OfWAPA and gen e
a deposit to WAPA to obtain electricity which makes hex a ratepayer The Court also granted Olson s
motion to eertify a class Although the parameters of the class must still be defined, Olson now repiesents
a larger gloup 0t peisons Hei standing is not at issue heie
Justiciability is also not an issue heie Justieiability is itself a concept of uncertain meaning and
scope Hacfl C 017m, 392 U S 83, 95 (1968) The Supreme Court ofthe Virgin Islands has not addiessed
justiciability diiectly But as the Supreme Court ofthe United States explained justiciability may best be
illusttated by the various grounds upon which questions sought to be adjudicated have
been held not to be justiciable Thus no Justiciable controversy is presented when the
parties seek adjudication of only a political question, when the patties are asking f01 an
advisory opinion, when the question sought to be adjudicated has been mooted by
subsequent developments, and when there is no standing to maintain the aetion
10’ (emphasis; added) (footnotes omitted) Additional uncertainty exists in the doctline ofjustieiability
because that doetiine has become a blend of constitutional tequirements and policy considerations And a
poiiey limitation is not always clearly distinguished from the constitutional limitation ’ ’[d at 97 (quoting
Banousx Jackson 346 U S 249 235 (1955))
Retommtndation
0130173 I l Ware; (1.1%)“?! 1111/; (ta! ST 2019 CV 00602
Patzc 19 01 57
11 justieiability in Virgin Islands jurispmdence encompass the same concepts stated in I last then
neither mootness nor standing 2116 at issue here Cf Hess 01/ l 1 Com , 72 V 1 at 697 ( {S]tancling like
mootness and other fedetal constitutional doctrines ale claims ptoeessing mks in the V irgin lslands
) WAPA has not alleged that any of Olson’s claims are moot and standing W as addressed above The
othel eoncetns political questions advisory opinions and policy restrictions am also not at issue hue
No question is raised about the ExecutiVe Blanch or the Legislative Branch that the C ourt should tetrain
1mm addiessing Although declatatory judgments do have an advi501y aspect to them insofax as they ban
be commenced befOIe rights haVe been Violated a judgment here would not yield an adxismy opinion
Finally, any policy eoneems that may be taised are addressed below or have aheady been iesolved by the
Coult e g by denying the motion to appoint a receiver
Even if Justieiability should be used in Virgin Islands jurisprudence in a more general 561186 to
tetet to a ‘ detennination of a justieiable eontroy ersy where the plaintiff is in doubt as to his legal rights[ 1 ’
11p 70p Cons!) \ (.101 tollhc V] Dep’r Q/Plop & Plocmemenr 41 VI 72 78 (Ten (t 1999), there
is a LOHUOVCI‘S) here that can be ielieved via a declaratory judgment Relying solely on persuasive
precedent (without noting the absence of binding pICLchm on this question) the Defendants argue that
declaratory judgment actions must 1m olve an actual and justieiable controyersy ’ (Defs Jt Mot for
ngt on the Headings 4 filed Dec 29, 2020) (hereinafter Headings Mot ’) (quoting Pale 1 Gm ’t 0/1/10
I I 62 V1 271 286 (Super Ct 2015)) (citing Fuzsz‘e; \ [)GC/Iabé’ll 65 V 1 20 44 (Super Ct 2016)
Walsh 1 Dalv No ST 01 CV 165
2014 WL 2922302 7/2014 VI LbXIS 36 28 (V1 Supet Ct
Jun 18 2014) Compamon 4951mmce CO 1 Al/IameAssmance (a
21 VI 34 38 n 3 (D V1 1984»)
None of the cases the Defendants rely on withstand scrutiny how ever
Companion A svummt C0172190121 was decided by the Diettict Coutt of the V11 gin Island9 at a time
when that eou1t had broadet subject matter jurisdiction in the Virgin Islands Like other Vilgin Islands
Recommendation
0180171 I 1 Haiti (i Pom; 1m]? LIN! ST 7019 (V 00602
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courts the District Court is not an Article III court It is an Artiele 1V mutt But it exeieises thejurisdietion
01‘ a distiiet mutt oi the United States and, thus, is limited by the ease or contioveisy tequiiement 01
Article 111 Sec Russc/l \ Delong/z 48 V 1 1062 1065 n 3 (3d Cit 2007) Thus Companion Assmance
Compam s holding that an actual contioversy must be present in actions brought undei the Viigin
Islands Declaiator} Judgment Act speaks to the limitations on that cou1t s jurisdiction C1‘ Compamon
Assumnce C0 21 V l at 38 ( Indeed the requirement that an actual wntmveisy exist is no mme than a
Ieeognition that the federal Judicial power is limited to cases’ and contrm elsies puisuant t0 the United
States Constitution, Art Ill § 2 Cl 1 ’) The Supeiior Court sju1isdieti0n is not limited by Article 111
Walsh should also be iejeeted It ielied 011 Campaman A5511] (true Compam when it held that ‘ the
discretionary authority to giant [a] declaratmy Judgment pursuant to 5 V l C § 1261 cf seq is only
permissible where a iusticiable contioversy exists ’ Walsh 2014 V I LEXIS 36, 2‘28 (footnote omitted);
96( 1d at 28 n61 (Citing Companion 4S§ZIICII1C€ C0 21 V1 34 (D V1 1984)) Sinee Companion
As mmncc C ompam focused on Artic 1e 111 limitations and Walsh relied on Cmnpanzon 1451511101266
Compam, both cases 2116 not good law» under cunent Virgin Islands Supreme Court precedent
Pare too held that ‘ [t]hc decision to entertain a declaratory action is within the diseietion 0fthe
C outt, and the matter must involve an actual and justieiable eonttoversy Pate 62 V1 at 285 86
(footnote omitted) (quoting Flam R1011 \ Quum 18 V I 530 532 (D V l 1981)) Pate, in tum, 1elied on
I [ma Rich which im olved a tax dispute biought in the District Court as a declalatory judgment action
against the C(immiSSionei of the Vii gin Islands Department of Finance and the United States Department
Of TIG’dSUIy The Distiiet Court dismissed the aetion not because of Amide 111 limitations but because
administrative 1emedies had not been exhausted bet01e filing suit See Flam Rich 18 V1 at 530
( [W]here an appeal hem an action of an administiative body is plovided declaratory Judgment will be
denied ’) Arguably [1m 0 Rich could be seen as having been deeide on policy concerns like those noted
Ree ommendation
Olsunx I 1 ”(Mel & Pom; 411th e761] ST 2019 CV 00602
Page 21 0137
in I fast But exhaustion of administiative remedies is not at issue here 1 he othei ease Pare ie1ied 0n held
th it [a] dee1amt01y judgment may issue only where the constitutional standing tequirements of a
iustieiahle eontioversy die satisfied ’ Pate 62 V I at 286 n 29 (quoting NASCAR \ Selim 16 184 F App’x
270 274(3dCi1 2006) parenthetically» sec NASC 1R 184F App x at 374 (quoting SI leomas Sr 101212
Hotel& 1011115172 Assoc Inc 1 Gm ’1 Q/US I/ I 218 F 3d 232 240 (3d Cii 2000)) Again eonstitutional
standing requilements do not app1y in the Virgin Islands So, the eases Pate ielied on do not suppmt the
Justieiability tequirement it imposed
Lastly I ensign is also not good law It 1e1ied on Pale and another Superior Court case that, in turn
re1ied on both Walsh and Companzon Assurance Compam See Fennel, 65 V I at 43 ii 57 (citing 8d of
[)ZiS 0/ 5/11/9111 Condo A591“ Datum 50/3 LLC N0 ST 2013 CV 395 2015 VI LEXIS 100 at 11
(V1 Super Ct Aug 31 2015)) see Bd of Dus 0f Slublu (012(10 Assn 2015 V1 LEXIS 100 at 11
n 51 (citing Walsh Compamon Assmance C0 and Pate) Unlike Walsh and Pate, I 611916} explained
for the fiist time Why the Viigin Islands Declaratory Judgment Aet might inelude a justieiable
tequirement Sec Panstw, 65 V I at 43 n 58 ( [S]ince Virgin Islands courts ate not Aiticle 111 courts it
stands to reason that the diseietion of a Viigin Islands eoufi to grant declaratory relief is not eonstrained
by a justiciable controveisy requirement at least in the same manner as federal courts, sinee the
jurisdiction of Viigin Islands eourts does not depend on satisfying the Artiele 111 case or controveisy’
requilement ’) The iedson I enstei gave is because the Viigin Islands Legislature has expressly provided
that the Viigin Islands Declaiatory Judgment Act should be harmonized, as far as possible with federal
laws and legulations 0n the subject ofdeclaratory judgments and dec1 ees ’ [d (biackets omitted) (quoting
Estat 0f Gc01ge 1 Gcwge 50 V I 268 274 (2008)) see also 5 V I C § 1272 ( This ehaptei shall be so
interpieted and eonstiued as to efteetuate its general purpose to make uniform the law 0fthOseJu1isdicti0ns
which enaet it and to harmonize as far as possible with fedel a1 laws and tegulations 0n the subject 01L
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013mm V1 Hula (f. Pond 1111/: cm] 51 2019 LV 00602
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deeiaiatory Judgments and decrees ) But the Court also note[d] that Virgin Islands Lourts could
potentially deviate from this inteipietdtion should the facts and circumstances wariant it P617316; 65
V I at 43 n 58
Even if Fcnslu is correct and the Legislatuie implieitly incoxpoxated fedei 31 iustieiabihty
tequiiements into the Viigin 151ands Declaiatmy Judgment Act most of O1son 5 claims are justieiable
Section 1261 0ftit1e 5 of the V irgin Islands C ode empowers the Superim Court to deem“. rights status
and othei legal ielations whether 01 not further 1e1ief i9 01 could be claimed Title 5 section 1262 of the
V iigin Islands Code allows [a]ny person whose rights are affected by a statute contract or
tianeliise [to] have deteimined any question of construction 01 validity and obtain a declaiation 0t
tights status 01 other legal relations thereunder ’ Olson seeks a declaration Ofrights and legal ielations on
hm own behali and on behalf of other ratepayers legaiding the constiuetion of section 921 of title 30 of the
Virgin Islands Code 1itle 5 section 1263 of the Virgin Islands Code authmizes the filing of a deelaiatory
aetion before a 001m act has been bleached The eash deposits WAPA imposes on its ratepayeis Lat} be
seen as a fOim 0t contract imposed by statute, a precondition to receiving electrical SL1V1L€ As tmther
exp1ained below sevei a1 courts haw: held that eash deposits given to publie utilities in exchange f0!
service, on which interest must be paid creates a debtor ueditor relationship Contract law recoghi7es
the coneept ofantieipatOiy iepudiation C/ C anbe Connactmg (0 i Eduam’s 18 V I 194 199 n 7 (Ten
Ct 1982) Olson can bring a declaratoxy action anticipating that WAPA may be unable 01 appalently
unabIe to pertorm[,j’ Id (quoting Restatement Second ofContracts § 250(b) (1981)) even though WAPA
has not yet breached its agieement to ietum the cash deposits with interest to Olson or the L1dSS‘ Lastly
title 5 seetion 1270 of the Virgin Islands (ode states that the Virgin Islands Dee1a1 atmy hidgment Act
is iemedialg [and] its purpose is to settle and to afford relief from uncertainty and insecurity with
respect to righte status and other legal telations and is to be 1ibe1a11y consumed and administeied A
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01mm I I Hutu & Pout, 4m]; (Ia! SI .7019 CV 00602
Page ?3 0f 57
liberal construction supports finding that Olson’s claims ale justieiable For these reasons ex en it tedelal
justiciability requiiements have been incorporated into the Viigin Islands Declaratmy Ittdgment Act, the
undeisigned ieeommends that the C curt find that Olson has asserted a justiciable contioxersy that can he
rediessed \ia a declaratOI y judgment action
i Count I
In Count I of her First Amended Complaint, Olson seeks deeIaxatory and injunctive IeIief in the
discrete areas Specifically paragraph 75 of the First Amended Complaint provides as follows
Plaintiff, and Class members, have a need for this Court to declare (i) whether WAPA is
insolvent, (ii) the amount of statutory interest due to the Plaintiff, (iii) the amount of
statutOiy inteiest due to 0the1 WAPA customers (iv) declare the amount of funds that
WAPA must set aside to comply with its statutory obligation under 30 V I C § 9a(b) and
ordeI/enjoin the Defendants to do so and (v) that WAPA is in a “state of emeigeney ’
(First Am Compl 1] 75) Each of the five tequests operates essentially as stand alone claims for
declaratcny relief In other Vt 0rds even though Olson only pleaded two Claims fox relief Count I seeks
declaiatory IeIief on the different bases
The pumose of a deelaratmy judgment action is to ‘ declare rights status and Oth€l legal telations
5 V I C g 1261 However because declaxatmy judgment actions must be based on an underlying claim
courts look to the primaly purpose the‘ essence or the controlling issue in suit[s] 1‘01 declaiatory
judgment RUIZ}? & ASSOLIafGS LIC \ Maishall A Bell& 4ssoczatcs P C, 71 VI 392 405 (Super Ct
2019) For example in Rolm & Assoczales, a declaiatoryjudgment action, the court considered the subject
mattei 0f the underlying dispute a contraLt to analyze where venue lies contraet actions Courts have
likewise recognized that ‘ in declaratory judgment actions the statute of limitation Im the analogous legal
remedy Will also apply to the declatatozyjudgment action ’ Gm (1’81 \ Comma 868 S E 2d 775 780 (Ga
2022)
Since a declaratory judgment action is not a stand alone claim but rather the means to obtaining a
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decimation 0t lights statuses and legal relations them must be a claim or cause of aetion on which the
action is based 01 the pessibility that a claim or cause of aetion will arise CI Mack \ Pia a Dem 111 Ltd
P512119 484 N E 2d 900 905 (111 Ct App 1985)( The remedy of a declaratOIW/Judgment is cumulative 0f
othet forms 0t relief It is not deemed to create in itself substantixe rights or duties hOWCV er but instead
merely affmds an additional piecedu1 a1 method for their Judicial determination Beeause the teinedy is
stxictly piecedural an action to: such Ielief must state a claim based upon particular substantiVe legal
theories ’ (citations omitted)) Thus ‘ [a] contract may be construed eithet betOte or after there has been
a breach thereOI0 via a declaratory Judgment action 5 V I C § 1263 It is immaterial that the breach has
not yet accrued Instead it is the disagreement between the parties as to the intelpretation of that contact
01 between persons interested in the construction of wills and other mitings[,] ’ 5 V I C § 1264(c)
that provides the basis for a declaratory judgment action Because some claim or right of action must
support the tequest t01 deLIaIatOIy relief, the undersigned considers eaeh 0f Olsen 3 requests separately
3 Count I (i) WAPA insolvency
The undeisigned recommends that the Court grant the Defendants motion as to Count I (i) in
which Olsen seeks a judgment declaiing WAPA insolvent The complaint alleges that WAPA is
effectively insolvent because its liabilities are greater than its assets [and it] is unable to pay its
bills as they become due ’ (Fiist Am Comp] 1] 31 (quotation marks and Citation omitted) ) The complaint
also alleges that WAPA s reV enues are insufficient to meet its expenses ’ [d 11 32 (quotation marks and
citation omitted) The Defendants denied both allegations in their Answer How even even when Viewing
these allegations in the light most favmable t0 the plaintiff it is C1681 that Olson has failed to state a claim
iOI relieiL thele is no authOIity in the Virgin Islands authoxizing a proceeding to declare a person or
emporation insolvent
As a threshold mattet insolvency is an area largely coveted by bankiuptey law now In fact, ‘ the
Reeommenddtion
O/wnx VI [lulu (Q Pow), 411th Lia] ST 2019 CV 00602
Page 25 0f5
welds insoheney and bankruptcy are synonymous terms in ordinafly usage meaning and eommon
undelstanding Fmthetmore in ordinary parlance and understanding there is no distinctien between
insolxency proceedings and bankruptcy proceedings and the terms ale used interchangeably ’ In 16
P111\ , 137 F Supp 910 915 (W D Mich 1958) Several provisions within the Vitgin Islands Code speak
of insolvents 0r insolveney proceedings ” synonymously 01 in tandem with bankruptey proceedings
See 6 g 22 V I C fq 410 (disqualifying bankrupt or insolV ent individuals from being dileetors of domestic
mutual insurels) (‘ Adjudieation as a banklupt or taking the benefit of any insolvency law or making a
general assignment for the benefit of creditors disqualifies an individual from being or acting as a
diteetor ) See also 6 g In )6 Wztfstem 3 V I 374 (D V I 1958) (concluding that federal bankruptcy
laws partly supelceded the Vngin Islands Assignment f0] the Benefit of Creditors statutes, 5 V I C §§
1201 32 but not as to voluntalily commeneed assignment proceedings)
To be sure the WOldS insolvent and ‘ insolvency as well as the phrase “insolvency proceedings
d0 appeal thtoughout the Virgin Islands Code See e g 9 V I C § 126 (‘ Any bank or f01eign bank shall
be deemed insolvent tor the pumoses of this title when upon an examination made by the Banking Board
01 by any of its authorized reptesentatives it is found that sueh bank or foreign bank has lost its entitc
Ies‘erye and one thud pent 01 meme ofits capital stock ) 1 IA V I C 9‘ I 201(22) (Unitonn Commereial
Code) (‘ ‘Insolvent means (A) haying generally ceased to pay debts in the ordinaxy course ofbusiness
other than as a result of bona fide dispute (B) unable to pay debts as they become due or (C) insolvent
within the meaning 0tfedera1bankruptcy law ’) 13 V I C § 533(b) (C Otporate Franehise 1 axes) (‘ Failure
of any emporation to pay its annual hanchise tax tot a petiod of one year fiom and aftet the date When
such payment thst beeame due, shall be plima tacie evidence of the insolxency 0f sueh corporation and
the fact of sueh insoly ency may be shown by the govemment 0f the United States Virgin Islands 01 by
any ptivate person 01 eorpmation ) 28 V I C § 172 (Vitgin Islands Flaudulent T1anste1 ZXct) ( (a) A
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Ohm“ I I ”am & POIHI 4111/1 LIN] ST 2019 CV 00602
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debtm is insolvent it the sum of the debtor's debts is gleam than all of the debtor‘s aesets at a ffaix
valuation (b) A debtm who is genelally not paying debts as they become due is plesumed to be
insolxent ’) See also ( g , 11A V I C § 1 201(21) ( Insolveney proceeding includes an assignment f01
the benefit of exeditors or other prOeeeding intended to liquidate 0r rehabilitate the estate 01 the person
involx ed ) The Code also plovides for insolvency proceedings in certain instances Sec 6 g 29 V 1 C
§ 907 (mandating that the Banking Boald notify the Govemm when the Economic DeV elopment Bank is
not in a sound financial condition and authorizing a receivership action) An action to dissolve a domestic
e01p01ati0n 01 to force a foreign corporation to forfeit its business license can 21130 be commenced whexe
Intel aha ‘ the corporation is insolvent as evidenced by a return of no property found in execution, or by
a judgment or decree in insolvency ploeeedings or an adjudication of bankruptcy[ ] 13 V I C § 288(a)( 1)
Arguably these statutes could be read to at least imply that Virgin Islands courts should teeognize
imelveney proceedings If not, a domestic eorpOIation might be immune from corporate dissolution
Courts also must give effect to all provisions of a statute if possible See In 16 1. 01 , 62 VI 655
661 (2015) ( In analyzing a statutory scheme we must give effect to evety ptovision making sum to
avoid interpreting any provision in a manner that would 1ende1 it or another prox ision 'wholly
superfluous and without an independent meaning 01 function of its own "’ (quoting Defoe \ Plullzp 56
V I 109 129 (2012) (pm 0111mm» Since the Legislature ineluded a definition of‘ insolveney proceeding ’
within the Vilgin Islands Unifonn Commercial Code, it stands to reason that the Legislature either
authoxized insolV ency proceedings at least in the commereial context or acknowledged that insolvency
ploeeedings were recognized at common law In fact the Virgin Islands Declaratory Judgment Act itSelf
speaks to insolvency pmaeedings providing that
[a]ny person interested as ex editor in the administtation 0f the estate at
an insolx ent may have a deelalation of lights or legal xelations in Iespect thereto (a)
T0 aseettain any class 01 credit01s devisees, legatees heirs next of kin 0r othets 01 (b) To
diIeCt the executors administrators or trustees to do 01 abstain from doing any particular
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act in their fiduciary eapacity; 01 (e) To determine any question aiising in the
administiation of the estate or tmst, including questions of construction 0t wills and other
u ritings
a V l C § 1264 (subsection breaks omitted) But even this statute speaks in terms 0t an estate meanng
an estate must have been established to manage the insolvent’s affaits and estates ate only established to
manage the affairs of insolvent persons and eorporations in bankmptcy prOeeedings
Given the unceitainty whethet insolvency proceedings exist under Virgin Islands la“ and then
u hethei undei statutory or common law and further, if under common law a Banks analysis would he
required, which neither Side conducted the undeisigned recommends that the C ourt decline to enter
judgment as to whether WAPA is insolvent Section 1266 of title 5 of the Virgin Islands Code gives couits
the dismetion to ‘ refuse to tendei or enter a declaratory judgment or decree where such judgment 01
decree, if rendeted or entered would not terminate the uncertainty or controveisy giving rise to the
pioceeding Instead, it would prolong the proceedings as the Couit and the parties would first have to
detennine the scope of insolx ency proceedings generally before Olson can be permitted to establish the
merits of her claim Even if insolvency proceedings are available under Virgin Islands law declaring
WAPA insolvent would not terminate the uncettainty here Accordingly the undeisigned ieeommends
that the Court exercise its statutory dismetion and decline to entel judgment on Count I (i)
b Count I (ii) and (iii) Interest Due Olson and the Class
The undersigned recommends that the Court deny the Defendants joint motion fox judgment on
the pleadings as to Counts 1 (ii) and (iii) In hei Filst Amended Complaint, Olson asks for a declaration as
to the amount of intetest WAPA owes he1 on her deposit (Count 1 (ii)) and amount WAPA owes the class
at laige (Count 1 (iii)) Since the claims are the same and may men he duplicathe the undetsigned
addresses them together Section 93 of title 30 of the Virgin Islands Code diicets that WAPA must ‘ pay
interest on cash deposits paid by customeis, as a condition preeedent to receiving seiyice at a ldtL equal
Recommendation
Olson \ I I ”ate; & P0 16] lull) ()1 a! ST 2019 CV 00602
Page ’8 ( {37
to the average preyaihng interest paid by local banks on saying aecounts 30 V I C § 9a(b) The
Detendants fiist argue that Olson has not alieged that she was a customei 0t WAPA tor mete than six
months and second that Olson has not alleged that she (or any membeI Of the elass) tequested a ietund but
did not 16L€i\€ it WAPA also objeets that calculating the amount of interest due Olson and the class
cannot be done in a vaeuum (See Pleadings Mot 7 ( There is no way to caleulate the amount oi interest
pay able to Plaintiff 01 any othei putatix e elass member without allegations as to the length of time they
hm e been a customer and when, 01 ex en whether they terminated their seIVice ’)
A thieshoid question here is what law governs Olson cites to subseetion (b) of section 9a While
the Detendants cite t0 the same subsection they also point to What they see as a fatal deicet in Olson s
eomplaint, namely the lack of allegations that anyone has requested a refund but not reecived one ’ [d
And the tight to obtain a refund is found only in subsection (a) Section 9a 0ftitle 30 provides
Except as provided in subseetion (b) eveiy public utility which requiies its customers as
a condition preeedent to receiving the service offered by such public utility to make cash
deposits with sueh utility to secure payment of tolls and charges shall pay interest on such
cash deposits at an annual compounded rate of four and three quarters (4%%) pereent
which shall be refunded to the customer with his cash deposit upon termination of seiviee
for any reason othei than unjustifiable nonpayment of tolls or charges by sueh eustomer;
provided that inteiest shall not be payable by the utility upon deposits held by sueh utility
f01 less than six (6) months and piovided further that the customer may upon applieation
therefOi 0n fonns prescribed and furnished by the utility obtain periodic payments of
aecumulated interest prim t0 the termination of sexvice when the inteiest on said deposit
equals $10 01 more
30 V I C é} 9a(a) Subsection (b) quoted earlier direets that the interest WAPA must pay has to be at a
late equal to the avelage prevailing interest paid by local banks on saving aeeounts ’ Id § 9a(b) Finally
subsection (e) p10\ ides
EV cry public utility atfeeted by the prox isions 0t subseetion (a) of this section shall disclose
to the customei with its final billing statement in each ealendar yeai, the amount of interest
which has aecumulated 0n the security deposit during that calendai year and the total
amount of interest which has aeeumulated and has not been claimed by said eustomei as
permitted in subseetion (a) of this section
Reeonimendation
0130111 V1 Wale) (E Panel AuI/I at (1/ ST 2019 CV 00602
Page 29 0f 57
Id § 9a(») The question is whether WAPA is still subject to subsections (a) and (c)
Until 2016, WAPA was coveied by both subsections On Septemer 30 2016 the Legislature of
the Virgin Islands passed
An Act amending title 30 Virgin Islands Code, Chapter 1 subehaptei I section 9a relating
to the interest iate paid by the Viigin Islands Water and Power Authority ( VIWAPA ’) on
customer deposits, requiring that the VIWAPA pay interest on custome1 deposits at a rate
equal to the aveiage prevailing interest rate paid by local banks on saving accounts
Act No 7931 2016 V I Sess L 185 185 (Oct 7 2016) The act “hich was signed by the Governor of
the Virgin Islands and became law on October 7 2016, amended section 9a(a) by adding an exception
clause at the beginning of the subsection[ ] adding subsection (b) and redesignating the existing
subsection (b) as subsection (C) Id § 1 (codified at 30 V I C § 9a)
There are mo ways to view the 2016 amendments The first way to view the 2016 amendments is
to read section 9a as having removed WAPA’S duty to provide annual disclosures to its customers of the
amount of interest that accrued on their deposits (per subsection (0)) and that WAPA 3 customers can no
longer obtain periodic payments of any accrued interest 0V er 8 10 In othei woxds WAPA only has to pay
interest on customei deposits at the average preV ailing interest late paid by local banks on savings
accounts The second way to read the 2016 amendments is to constiue the exception clause added to
subsection (a) as excluding WAPA only from the requiiement of paying interest at an annual compounded
rate of 4 75% In othe1 words, the V11 gin Islands Waste Management Authority (waste management
service) Viya (telephone seivice), and the Transportation Services of St John lnc (public marine
passenger transpoxtation serviees) for example, must pay interest at an annual compounded iate of 4 75%,
if they tequire their customeis, as a condition precedent to receiving the seniee offered to make cash
deposits with such utility to secure payment of tolls and eharges ’ 30 V I C § 9a(a) But WAPA only
has to pay the average prevailing interest 1316 paid by local banks on savings accounts All public utilities,
including WAPA would still hate to Iefund interest to their customeis except for nonpayment of tolls and
Recommendation
013mm 1 1 11am <52 Pout] 4m}: and SF 2019 CV 00602
Page 30 0t 57
charges Customers of WAPA would also still be entitled to period payments of intelest exceeding $10
1111s is the othu way to consttue the 2016 amendments
‘ A statute is ambiguous when the statutory language lends itself to two 01 m01e reasonable
interpletations One St Pete: llC\ Ed ofLand Use Appeals 67 V1 920 924 25 (2017) (quoting
Shame \ State 350 P 3d 388 391 (Nev 2015)) Based on the preeeding discussion, the undersigned
believes that section 9a is ambiguous Cf 1d at 294 ( The plainness 01 ambiguity of statutory language is
determined not only by leference to the language itself but as well by the specific context in which the
language is used and the broader context of the statute as a whole (quotation marks brackets and
Citation omitted) The undersigned recommends, fo1 the reasons given below, that the Court resolve the
ambiguity by constwing the 2016 amendments to title 30 section 9a of the Virgin Islands Code as only
having affected the amount of intelest WAPA must pay
First although titles and other descriptive headings in the Virgin Islands Code do not constitute a
part 01 the law sec 1 V I C § 45 courts can look to the titles of acts to discem legislatiye intent In fact
the Supreme CouIt oi the Virgin Islands has held that the title of an act is available in case of ambiguity
to clalify the legislative meaning[ ] R0121? \ People, 57 V 1 637 646 n 6 (2012) (quoting 1A Norman]
Singer & J D Shambie Singer, Suthei/and Statutes and Statutow Consn ucnon § 20 10, at 138 (7th ed
2007)) 4cc0Id Ilzompson \ fins! Jud Dzst Ct 683 P 2d 17 19 (New 1984) (‘ In construing an
ambiguous statute evidence of the legislature's intent may be gleaned from the title of the act by which
the statute was enacted ) Slate \ Supm CI
627 P 2d 686 688 (A112 1981) ( It is true that title and
section headings in the statutes ate not part of the law but we can nevertheless refer to titles and captions
in the legislatiye bills fm indications of legislative intent ’ (citation omitted» Here the title of the Act
No 7931 shows that the legislative intent was simply to change the intelest rate WAPA must pay on
customel deposits from 4 75% to a rate equal to the avetage prevailing intexest late paid by local banks
Recommendation
0/30sz I [ Hale; & PUHU lurk t! u/ S Y 2019 CV 0060’
Page 31 ol 37
on saying accounts
Second ‘ even Vt here the language of the statute is plain its meaning is contiolled by its context
and the statutory language must be construed in light of and governed by its eontext within the overall
statutmy scheme ’ ’ 4!] Human Res AdUSOIS LLCx Espezsen, 2022 VI 11, 11 21 (quoting Moro; hhmle
4mm}? 1 Alltcll 12 A 3d 656, 665 (Md 2011)) What 5 more exeept Clauses come into play only when
theie is a Clash As the Supreme Court of the United States explained ‘ ‘[t]h0usands of statutory provisions
use the phrase except as piovided in followed by a cross reference in 01dei to indicate that one rule
should prevail over another in any Circumstance in which the two conflict ’ A [I chlzfield C0 \ C12; zstzan,
140 S Ct 1335, 1351 (2020) (ellipsis in original) (quoting Cyan Inc \ Beavel Cnfv Ez71ples Re: Fund,
583 U S 416 428 (2018)) ‘ Such clauses explain what happens in the case of a clash, but they do no!
011ch u zse expand 0; cont; act the scope of either provision by implication ’ Id (emphasis added) Clearly
theie is a clash now between subsection (a), all public utilities must pay interest at 4 75%, and subseetion
(b) WAPA must pay interest at a rate equal to the average of what local banks pay on savings accounts
Thus subsection (b) prevails over subsection (a) as to the interest rate WAPA must pay There is no othel
clash with WAPA not haying to pay interest on deposits held for less than six months or with WAPA
having to disclose annually to each eustomer in the final billing statement the total amount of inteiest
accrued
Third inteipreting the 2016 amendments to have ieinoved WAPA entiiely from subsections (a)
and (c) of section 921 would yield absurd eonsequenees and a comt should not apply the plain text of the
statute if ‘it is uncontested that legislative intent is at odds with the literal terms of the statute ’ 01 if doing
so would lead to absuid consequences ’ Rain: 57 V I at 646 n 6 (citations omitted) 1 0 read the language
‘[e]‘(eept as proyided in subseetion (b) ’ as having 161DOV€d WAPA from all of subsection (a) and by
utension from all of subsection (c) since subseetion (c) only applies to public utilities affected by
Retonnnendation
Ohm“ I I ”am at Pane) furl? e! (1/ SI 2019 (V 00602
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subseetion (a) would mean that customeis ieceiving telephone ser\ice from Viya or hash removal
sewice from the Virgin Islands Waste Management Authority fox example ean terminate service and
obtain a refund of the intelest that accrued on then accounts but customers of W APA cannot In fact an
argument could be made it WAPA is not subject to subsection (a) that WAPA must ‘pay interest on
cash deposits paid by customeis ’ 30 V I C § 9a(b) but the interest no longei has to ‘be refunded to the
customer with his cash deposit upon termination of senice for any reason othe1 than unjustifiable
nonpayment of tolls or Chalges by such customer[ ]” Id § 9a(a) Instead interest accrues tor the benefit
0t WAPA to insulate it from losses caused by customers who terminate se1 vice and leave unpaid charges
In othei wmds if WAPA has been removed from subsection (a) then the statutoxy requiiement that
WAPA refund interest to its customers is also gone; only the initial deposit must be refimded If WAPA
has been removed from subsection (a) then WAPA also must now pay interest on all customer accounts,
including those held for less than six months Section 9a does not have to be read this way 6
The undersigned recommends that the Court construe the 2016 amendments as having changed
only the statutory rate of interest that WAPA must pay on cash deposits Customels of WAPA still have
the right to ‘ obtain periodic payments of accumulated interest prior to the termination of service when the
inteiest on said deposit equals $10 or more 30 V I C § 9a(a) Customeis of WAPA still have the tight
to ‘ interest refunded with his cash deposit upon termination of service for any reason other than
unjustifiable nonpayment of tolls or Charges by such customer[ ] ’ Id WAPA does not have to pay intetest
“ Although the parties Lannot stipulate to the la“ the undersigned does note that this appears to also be the way the Defendants
read the 2016 amendments (See Pleadings Mot 6 ( Section 9a(a) ofthe Virgin Islands Code prox ides that interest is only due
and owed upon termination of service by WAPA and only for deposits held for 6 months or more Section 9atb) sets the
interest rate applicable to WAPA but does not change the requirement that interest is only due upon termination (footnotes
omitted) (emphasis in original» The Gowmment of the Virgin Islands in its response in opposition to Olson s motion to
declarexhold sections 1 l 1(a) and 120 of title 30 of the Vi1gin Islands Code unconstitutional also reads the 2016 amendments as
haying changed only the rate of interest WAPA must pay (81¢ GOV t of the U S V I s Resp to Pls Const L hallenge to lit
30 of the V 1 Code Sees Ill and 120 6 filed Dec 13 7021 ( WAPA must refund the deposit to the customer upon the
thnnation of sen ice [or any reason other than unjustifiable nonpayment of charges A eustomer may also obtain peiiodic
payments of accumulated interest before the teunination ot serViee when the interest on the deposit equals ten dollats (S l 0 00)
01 more (LlIdIl0n\ omitted)) )
Recommendation
0/30)“ I I ll (11L) (K Pane; 411% ([11/ bl 2019 C V 00602
Pave 33 01 57
on deposits held for less than six (6) months[ ] Id And WAPA must still ‘ disclose to the eustomei
with its final billing statement in each calendai ) ear, the amount of inteiest which has accumulated on the
seeuxity deposit during that calendai year and the total amount of inteiest “111611 has accumulated and has
not been claimed [0’ g 9a(e)
Olson is clearly a person whose rights, status or othei legal telations are affected by a etatute
5 V 1 C § 1262 On her own behalf and on behalf of the class she may have deteimined any
question of construction or validity arising undei the statute and obtain a declaration of rights
status or othex legal relations thereunder ’ [(1 She seeks a declaration of the amount of inteiest due her
(Count 1(ii)), and the class (Count 1(iii)) WAPA was required to ‘ establish an accounting system for the
proper statistical contiol and record of all expenses and income belonging to or managed or controlled by
the Authmity 30 V I C § 1 15(0) So WAPA should be able to report how much it holds in deposits from
its customers The amount of intexest due on its customers deposits before the 2016 amendments is clear
4 75% The amount of interest due aftei the 2016 amendment depends on what the average of the
prevailing inteiest paid by local banks on savings accounts was between the date the amendments took
effect in 2016 and now Since prevailing inteiest rates on savings accounts vary the average of those iates
would also vaiy A deela1 atory judgment can address these uncertainties including the scope of the 2016
amendments because it WAPA no longer has to refund interest to its customers, then Olson may have
failed to state a claim for ielief
Section 9a of title 30 0f the Virgin Islands Code was enacted in 1974 For purposes of this
recommendation assume that the class includes at least one an indiVidual who became a eustomer on
January 1 1975 Assume furthei that WAPA required a cash deposit in 1975 0f$100 00 Cf 30 V l R R
§ 105 4(b) (security deposit) (‘ The customer shall be eharged an amount required for senice which is
equal to two (2) month's aveiage actual billing where there is a previous history of usage by the eustmnei
Retommendation
ON)!“ I I Nam dc Po it) 1111/1 cm] 531 2019 CV 00602
P126 34 of 57
01 an amount equal to two (2) month's estimated billing where there is none or a minimum of S 100 00
The security deposit must be paid in advance ’) Assume also that this LUSl()1T1€I never quuested a payout
of the accrtied inteiest As 0t Decembei 31 2015, the amount of interest at 4 75% compounded annual on
a $100 deposit would be appioximately $5.40 00 7 Whethei the 4 75% inteiest late should apply for all of
2016 none of2016 or only until the 2016 amendments became law also must be decided Assuming the
4 75% late remained in efteet until Oetobex 6, 2016 (the date the Goyeinor signed Act No 7931 into 1aw)
the amount of interest WAPA should have paid on this customer 5 $640 account ($100 security deposit w-
3540 in interest after 40 years) will depend on what the average was 01‘ the pre\ ailing interest iates paid
by local banks on savings accounts was on October 7 2016 and how frequently they changed
Olson cleaily has iaised impoxtant questions about the construction of section 9a with respect to
WAPA and its ratepayeis and the amount of interest each customer is owed The Defendants” arguments
contending that judgment of dismissal should be g1 anted in their favor because Olson “cannot allege that
she is entitled to statutoiy interest[ ] has not alleged an amount of any interest she may be owed at some
indefinite time in the future[ ] and is unable to allege what she is owed [or] how much WAPA must
set aside[,] (Headings Mot 7), should be rejected Viewing the pleadings in the light most favorable to
the nonmoving party it is clear that judgment on the pleadings should not be gianted as to Count I(ii) 01
(iii) Section 9a of title 30 ofthe Viigin Islands Code requires that WAPA pay interest on cash deposits
paid by customers as a condition precedent to receiving service ” 30 V I C § 9a(b) Olson alleges in
hei eomplaint that she ‘ is a customer of WAPA and, like all WAPA customers as a condition precedent
to ieceiying service made a customer deposit with WAPA ” (First Am Compl 11 24 ) She also quoted
section 9a(b) in her complaint See id ‘11 25 ( 30 V I C § 9a(b) provides that WAPA shall pay inteiest on
iCaleulated using the Compound Interest Calculator at Investor gm https WW“ imestor gov financial tools
caleulatoxsmaleulatoxsxcompound inteiest calculatox (last Visited Oct 13 2022) Fhe actual amount estimated xx as $639 97
Recommendation
01mm 1 1 Watt; A [‘03th 4111/! Lia] SI 2019 CV 00607
Page 33 of37
Lash deposits paid by customers, as a condition precedent to receiving sen ice at a late equal to the average
pievailing interest paid by local banks on saving accounts ’ ) The Defendants in their answer denied
Olson s allegations (3’66 ans 1] 24 ( Defendants lack knowledge 01 intonnation sufficient to form a belief
as to the truth or falsity of the allegations contained in paragraph 1N0 24 of the C omplaint and theretoxe
deny same[] ) see id 11 25 ( Defendants deny the allegations asseited in Paragraph No 25 ot the
Complaint in that Plaintiff failed Lite the previous paragraph 01‘ the statute which states when suLh inteiest
must be paid[ ] ’) ) The Defendants are simply wrong in arguing that Olson has not and cannot allege that
she is entitled to statutozy interest ’ (Pleadings Mot 7 ) 1f the undersigned is eon eat about the effect of
the 2016 amendment then the law does entitle Olson (and all of WAPA’s customeis) to statutory interest
on then cash deposits, a fact Olson alleged in her complaint Judgment is not appiopriate heie
Olson also alleges that WAPA ‘ will not be able to refund the customer deposit and will not be
able pay the statutory interest due unde1 30 V l C § 9a(b) (First Am Comp 1] 74 ) The
Defendants in their answer deny these allegations too (See Ans 1] 74 (‘ Defendants deny the allegations
asserted in Paiagiaph No 74 oi the Complaint[ ] ) ) At this juncture the Com“: views the allegations in the
light most tavoxable t0 Olson Contiary to what the Defendants contend, the customei does not hate a
duty to tell the public utility how much interest she is owed (But see Pleadings Mot 7 ( Plaintiff also has
not alleged an amount of any interest she may be owed at some indefinite time in the futu1e ’ ) ) Instead,
it is the public utility who it it iequiies a cash deposit as a precondition to receiving service must
disclose annually to each customer how much interest has accrued on the deposit See 30 V I C § 9a(c)
WAPA does not ha\ e a ‘ duty of hunting up its customeis and thrusting the inteiest into their
hands The Legislature intended to put upon the public service companies only the duty to pay 01
credit the interest if the customer demanded that it be paid or credited ’ Cammonm call]: v Ky Panel &
Light Co 77 S W 2d 395 396 97 (Ky 1934) Since no demand has been made no amount is due and no
Recommend ttion
01%)}? t I I Nam (31 Pout} 4111/1 cla/ ST 2019 CV 0060j
Page 36 01 57
breach has OLLut‘I ed But courts have power to declare rights, status and othei legal relations whether or
not ftiithei relief is 01 could be claimed ’ 5 V I C 9, 1261 And ifthe cash deposits ate Viewed as a type
Of contact imposed by statute, Olson and the class can ask the CQuit t0 eonstme theii rights betme or
after there has been a bleach theieot Id § 1263 For this reason, the Defendants’ a1 gument that
Plaintist mere speculation that WAPA might be unable to meet its payment obligations undet Section
9 is insufficient to establish the injuiy needed to haxe standing[,] (Pleading Mot 7 8) should also be
iejeeted
Again, Viewing the pleadings in the light most fax viable t0 the nonmoving patty Olson S
allegations that She is a creditm 0f WAPA by virtue of her cash deposit and that WAPA ‘ is currently not
collecting enough 1evenues[ ] ’ (First Am Compl 1] 40) suppoxt her claim that WAPA may not be able
to iefund the statutmy interest due her and the class and would enable the Couxt t0 declaie the amount of
interest WAPA should have paid and how much the class and Olson are owed Aceording t0 the documents
attached to the complaint, WAPA had approximately 55,000 customeis as of 2019 If the undersigned s
interpretation of the 2016 amendments is con eet then WAPA 5 customers continue to have a right, under
seetion 9:1(0) 0ftit1e 30 to an annual accounting and under section 9a(a) t0 iequest payment of inteiest in
excess of $10 If even halt of WAPA’s customer base approximately 23,500 iatepayeis according to the
materials attached to the complaint, have an average 0t $50 each in acetued interest, and if all were to
submit a form and tequest payment the amount of money WAPA would have to pay out totals
51 175 000 00 Olson (and the class) have a right to have title 30 section 9a of the Virgin Islands Code
censtrued and a deeldiation made as to how much interest is due to her and the class 1 Thus the
” Fhe undelsigned has assumed tor purposes 0t this reeommendation that a cash deposit giV en by a ratepayer remains in place
until the ratepayer terminates sen ice and turthei that most members of the class (“hich still must be defined) will have gix en
a Seeutity deposit prior to the amendments to section 9a 0ftitle 30 ofthe V irgin Islands Code The 2016 amendments txeie not
git en retioactiVe etfeLt and u en it they had been it might run atoul of the Contract Clause 0fthe United States Constitution
as applied to the Territory through the Re\ ised Oi garlic Act as it “Quid interteie with existing eontraets and potentially depltVC
Recommendation
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Page 37 of 57
undersigned xeeommends that the Court deny the Defendants’ joint motion as to Loums I (ii) and (iii)
c Count I (h) Order VS APA to Set Aside Funds per 30 \ I C § 921
”the undeisigned also recommends that the Court deny the Defendants motion as to Count 1m)
but without p1 ejudiee In her Fiist Amended Complaint Olson asks in addition to deelaring the amount
ot ihteiest due to her and the class that the Court also deeIaie the amount of funds that WAPA must
set aside to comply vxith its statutOIy obligation under 30 V I C § 9a(b) and Older/enjoin the Defendants
to do so[ ] (Fiist Am (01an 11 73 ) The Defendants may be correct that ‘ WAPA is not undei any
statutOiy obligation to keep such funds available in a separate account[,] ’ (Pleadings Mot 7) and ate
correct that Plaintiff does not allege one [0’ But even though Olson does not allege in her eomplaint
that WAPA must maintain eustomei deposits separately that is implied from her request to orde1 WAPA
to do so In other V1. ords Olson is not asking that the Court order WAPA to put tunds aside only to hax e
W APA comingle them again a day latei Instead Olson is implicitly asking the Court to declaie that
W APA must maintain eustomer security deposits separately and order WAPA to do so going forwaid if
it does not The question is whethei Olson has a light to this Ielief
Nothing in section 9a 0t title 30 0fthe Viigin Islands Code speaks to how publie utilities must
aecount for their cash deposits Many jurisdictions have cnaeted statutes generally conceming seeurity
deposits given to landlmds that require that the holder ofthe deposit keep it in a separate, interest bearing
account in pait to ensure that the tunds cannot be reached by eieditors of the deposit holder See c g
[mum 1 hm, 20 N E 3d 943, 950 (Mass Ct App 2014) (land101d tenant)( The puipose ofthis subseetion
is to insure that tenant monies are pioteeted trom potential dIVLISIOH t0 the personal use of the landlord
eam iiiteiest tor the tenant, and ate kept tiom the ieaeh of the land101d's CieditOIS ’ (quoting Nellzazzs t
iatepayers oi" iheome ifmerest on a pie 2016 deposit “as calculated at the wuent rate and resulted in Iowa amount of
total interest
Reeommendation
O[\()ll\ I 1 Wing) & Pom; 111i}? 0/ (1/ ST 2019 CV (10602
Pige 38 of57
Maxim]! 766 N E 2d 356 558 (Mass Ct App 7002)) Seetion 9a of title 30 does not impose SULl’l a
requii uncut
C omits haw: held that When customers must give a deposit and Mien publie utilities must pay
intei est on that deposit it creates a dethI e1 editor relationship between the customei and the publie utility
See 6 g L S Tellei, Delmar chumd [9v Publzc Utz/ufv, 43 A L R 2d 1262 5‘; l[b] (1935) (‘ The making
of a deposit does not ereate a trust relationship between a utility and its customer ), see also 1d ( Deposits
are not to be regaided as assets of a utility in determining the value of the utility's property fol rate
pumoses ) Accozd State In Ian Ripe} 1 All Cm) [3165* Co 128 A2d 861 865 (N J 1957)( Piobably
the most important determinative of whether a debtor creditor, as opposed to an informal trust,
telationship is created lies in the piovisions for the payment or nonpayment of interest Whei e the recipient
of money obligates himself to pay a fixed late of interest legardless of whethei the money is invested and
without reierenee to the iate of return which it yields it is only reasonable to expect unless a eontiary
intention is cleanly manifested by some other Citeumstdnce that the recipient is to have the beneficial as
well as the legal inteiest Piesumably a debt 111V olving only a personal obligation to repay the amount
received at the propei time is established ’ ), see also Lawson 1 Bank One Lexington, N A ,
35 F Supp
2d 961 964 (E D Ky 1997) (‘ There is limited existing authority to aid the Couit in its quest to categorize
plaintiffs seeurity deposit Various courts have held that the lessee/lessor relationship is one simildl to
the dethI/creditm telationship Courts have expounded 0n the debtox/ei edit01 relationship to hold that a
sewiity deposit does not create a pledge but lather creates a comma right ’ (citations omitted»
Courts have also ieeognized that, unless a eontraxy requiiement exists public utilities can comingle
customer deposits and accrued interest on those deposits with other funds f01 genei a] use of the public
utility Cf Comm? 1 Indianapolis Pout} & light C0 493 U S 203 205 (1990)( Customei deposits
w ere not physically segregated in any way tom the company 3 general funds They xx ere commingled
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with other reeeipts and at all times were subject to [Pl 3 unfettered use and eontiol 1t is undisputed that
IPL s treatment of the deposits Has caimstcnt mill accepnd a( counting pun [1C6 and applicable state
regulations (emphasis added))' accozd Plume]: Compiessmg C0 \ Buffalo (ms (0 28012 830 840 (2d
C ii 1922) ( [T]he iequiiement of the statute that the gas eompanies shall pay inteiest is some support for
the eontention that such eomorations ale authorized not to treat the deposits as inactive moneys but to use
them in their business and henee to mix these deposits with geneial funds ); 4!] City Nee C0 128 A 2d
at 865 (‘ When a fixed rate of interest is paid, as here, theie is a strong inteienee that the payee is entitled
to use the money to suit his own eonvenienee )
1 he Defendants as the moving parties have the burden to show that judgment as a mattei of law
is warranted here The undersigned ieeommends that the Court find that they failed to catty that burden
as to C omit I (iv) Neithei side has addressed what the soundest rule fox the Virgin Islands would be in
this instanee it statutory law is absent and the common law would govem Cf Callas Warehouse \
Ilzomus 64 VI 173 183 (Supei Ct App Div 2016) ( When statutes are silent, the eommon law
governs ’) The paities have also not refened the Court to any regulations piomulgated by the Public
Se1viees Commission that WAPA must follow cf 30 V I C § 4 or to any other seetions ot the Virgin
Islands Code that might apply Nonetheless the obligation to determine what law goveins ultimately iests
with the Court And the undeisigned notes that section 1 15 oftitle 30 ofthe Virgin Islands eould be read
to tequire that WAPA to keep its customer deposits segregated from other tunds
Section 115 was enaeted in in 1964 so the Legislature was on notice of the statute when in 1975
it enaeted section 9a of title 30, iequiring the payment of inteiest on customer deposits Se: Haynes \
Oitlet 61 V l 547, 564 (2014) (per cm zam)( It is well established that when a legislature adopts a statute
it does so with knowledge of existing law ’) Seetion 1 15 mandates that WAPA establish an aeeounting
system for the piopei statistical contiol and record of all expenses and ineome belonging to 01 managed
Recommendation
0/30,“ I I Um“ & [’01th 1111/1 4.! (1/ Sf 2019 CV 00603
Page 40 of 37
m LONIIO/ltd lot the Authority 30 V I C 53 115(0) (emphasis added) Customet deposits and the interest
paid on those deposits should qualify as expenses (liabilities) 01 income managed 01 eontmlled by WAPA
partieulaxly if the requitement to pay interest creates a debtm e1 editor 1elationship
Furthetmoxe the amounting system that WAPA must implement must also segregate the
accounts fox water and power functions make a reasonable allocation of costs that may be common to
both functions, and insofal as advisable othemzse segregate the accounts, tot dittetent elasses 01‘
operations taeilities and activities of the Authoxity ” Id (emphasis added) The language insofal as
adyisable is unclean but is certainly stxong legislatixe support that WAPA should keep diftelent Classes
01 opelations and activities separate which could be read to include customer cash deposits and intelest
eamed on those deposits Again the Legislature V» as on notice of section 1 15 when it adopted seetion 9a,
1equixing intelest on customer deposit law However section 1 15 is also preceded by the Clause [shlbject
t0 agleements with bondholders ’ Id P1esumably, bondholders may be permitted to dictate how
WAPA maintains its accounting systems
Since neithel side has add1essed the impact if any of section 115 on the case 01 whether the
Public SerVices Commission has promulgated legulations (or updated the regulations that were previously
promulgated) t0 addless how WAPA should control and record the cash deposits and associated interest
it manages on behalf of its ratepayers the undersigned 1ec0mmends that the Court deny the Defendants’
joint motion without prejudice as to Count 1 (iv) WAPA is under a statutory mandate to pay interest on
cash deposits it requires hom its customers, see 30 V I C § 9a(b), and to establish plopel controls ova
all expenses and income WAPA manages 01 controls See 10’ § 115(0) Customu deposits and intelest
earned on those deposits would qualify as expenses or income managed by it At this juncture the
undersigned cannot recommend that the pleadings establish as a mattet of law that the Defendants are
entitled to judgment on Count 1 (iv)
Recommendation
0/80Ht I I Wait) (9. POMC’I Jutll (’1 (1/ SF 2019 (V 00602
Page 41 0t :7
(1 Count I (v) WAPA State of Emergency
The undeisigned ieeommends that the Ccurt giant the Defendants motion mi judgment on the
p1eadings as to Count I (\ ) In 1161 First Amended Complaint Olson asks that the Court declare that WAPA
is in a Hate 0f emergeney ’ A9 a threshold matter the Court already rejected the allegation that WAPA
should be declared to be in a state of emergency when the Court on the record on September 7 2021
stated that ‘ the only person that has jurisdiction is the GOV emor t0 deelate anything a state 01‘ emergency
That’s denied (Hi’g F1 3 25 4 2 (Sept 7, 2021)) Furthermore the undersigned has not found any
authmity to support a cause of action for a state of emergency
As noted eailier deelaratmy judgment actions must be predicated on something 6186 To be sure
there haVe been instances where courts have declared states of emergency as to theii own opeiations for
example due to the COVID 19 pandemic or in response to natural disasters But there is \ ery little ease
law where courts have declared a state of emergency regarding the melits 0f the case In llzllzams i
Fdnmcls 87 F 3d 126 (5th Cii 1996) the United States Court of Appeals f01 the Fifth Ciicuit noted that
the District Court had declaied a state of emergency with respect to a consent decree that had been in
effect OVCI Iouisiana s pIiSOI] system And in Spence \ Reea’e/ 416 N E 2d 914 (Mass 1981) the
Supreme Judicial C ourt 01‘ Massachusetts noted that the trial court had found a state of emergency existed
in the Boston Housing Auth01ity with iespect to safety and seeurity There is also mention of statutmy
auth01ity in other juiisdietions For example, in Fulle; \ Sc 01! 328 F Supp 842 (M D N C 1971) the
dissenting opinion ofChiet ludge Jones discussed North Caiolina s riots and Civil dismdeis statute, which
would have let a superior court judge deelare a state of emeigeney in public 01 priVate educational
institutions Similaily in Cole i (/1010)? U51 Inc
554 F Supp 2d 665 (S D Miss 2007) the Distiiet
Court analyzed whethei Mississippi laws piohibiting price gauging dining states of emeigency authorized
a piivate right of action
Recommendation
013mm I 1 Ware} & POHLI 41th L)! (1/ S] 2019 CV 00602
Page 42 0t 37
Howevei, the unde1 signed has not found any cases (published 01 unpublished) V hete the plaintiff
01 petitioner commenced an action for deelaratoiv relief and a judicial declaration of a state of emetgency
Section 1004(a)(3) of title 23 0f the Viigin Islands Code defines state of emergency’ as a public
declaration by the Governor to mitigate, piepare for respond to, or reenvet hem an emergency or major
disastei ’ And emergency and majox disasters 2116 given the Oidinary meanings of hunicane, tsunami
eatthquake and so tmth Admittedly the Supreme (Quit of the Virgin Islands did state in Rennie \ Hess
Oz! Vngzn Islands Calpomtton ()2 V I 329 550 (2015), that ‘ statutes which ate silent as to who has
standing to biing suit should be broadly interpreted to confer standing ’ And another Superior Court judge
observed in Denme I Ohmptc Rent 4 Cal 72 V I 91 98 (Super Ct 2019) that ‘ [i]n Rennie [the]
Supreme Court approved of those cases that had recognized the common law tradition that the denial
of a 1emedy is the exception rather than the rule (quotation marks brackets and citations omitted»
Notwithstanding the presumption that statutes should be construed to prOVide a remedy the state 01‘
emetgeney statute should fall \A ithin the exception to this common law rule Because declaring a state of
emergency is not a iecognized cause of action 1101 a type of 1elief courts can piovide the undersigned
iecommends that the Couit grant the Defendants motion for judgment on the pleadings as to C ount I (v)
ii Count II
The undersigned recommends that the Court deny the Defendants motion for judgment on the
pleadings as to Count II In her First Amended Complaint Olson seeks a declaiation that WAPA's billing
piaetices as applied to the facts of this case are unconstitutional insofar as WAPA’S billing piaetiees
Violate the Virgin Islands Bill of Rights by heating the two classes of WAPA customeis (g(iyeinmental
\e1 sus non governmental) differently (Fiist Am Compl 1} 78 ) Specifically Olson challenges WAPA’s
p1 acme of not terminating eleetiical service for govemmental customers t01 nonpayment Olson alleges
that this p1 aetiee conflicts with the treatment of indi\ iduals and businesses who do get seiviee terminated
Recommendation
Olsonx I I Nam 01 POHU 1m}: ([0] $1 2019 C" 00602
Page 4> 01 57
tm nonpayment and that the dispaiity in treatment violates the Vitgin Islands Bill of Rights Olson seeks
an injunction against WAPA and its diicetOIS to prohibit them fiom violating the Viigin islands Bill of
Rights going tom ard
The Viigin Islands Bill of Rights proxides that ‘[n]0 law shah be enacted in the Viigin Islands
which shall depiive any peisOn 0f lite libei’ty or property without due process of law or deny to any
person theiein equal piotection 0f the laws ’ 48 U S C § 1561 In Balbom 1 Range; 4muzcan 0f the
Lz/gm Islands [m 70 \f 1 1048 1096 (2019) the Supreme Court of the Vi1gin Islands held that
heightened lational basis teview lepresents the appropriate standard t01 determining the validity of a
Vilgin Islands statute under the equal protection Clause of the Virgin Islands Bill of Rights The
undersigned be1ieves that Olson is mistaken that the Virgin Islands Bill of Rights app1ies here According
to its plain language the statute applies only when a law is enacted that deprives peisons of life liberty or
pioperty without due pmeess 0r denies them equal protection How WAPA (and its directors) treats its
customers and Whether WAPA ta\ 01s governmental customers over individuals and business is not a
law enacted in the Virgin Islands
However even though Olson ieteieneed the Virgin Islands Bill of Rights in hei complaint
“pleadings must be read in then entirety whenevei they are challenged ’A} no 1 Hats (01;) 71 V I 463
504 (Supex Ct 2019) As the Defendants note on page 9 0ftheii motion, the law that govems here is not
the Viigin Islands Bill 0t Rights but lather 30 V I C § 2 ’ (Headings Mot 9 ) Seetion 2 01 title 30
()fthe Viigin Islands Code pmvides that
[e]very pub1ie utility doing business within the Virgin Islands is requiied t0 tuinish service
and facilities leasonably safe and adequate and in 2111 respects just and leasonable The
charge made by any such public utility for any facility 01 services fu1 nished, 0r rendered
01 to be furnished 01 lendeied shall be teasonable, just and nondiscriminatory Eveiy
unjust 01 unieasonable 0r discriminatory charge to: such facility or seiviee is prohibited
and is hereby declared unlaw fu1 Every public utility is heieby requiied to obey the 121w ful
01 deis 0f the Commission
Recommendation
0190111 I I Nun); c6 POHU 111111 (la/ ST 2019 CV 00602
Pa e 44 of57
30 V 1 C § 2 1t 13 clear that what Olson is complaining ofis the allegedly untaii t1 eatment by WAPA
hem eon its iatepayets Olson claims that WAPA treats govemmental and non gm e1 nmental customers
ditteiently and that this dilleieme in treatment is discriminatory Although Olson cites to the Virgin
Islanda Bill of Rights in het eomplaint but as with any claim for ieliet, complaints ate considered as a
whole, and legal conclusions and labels ignored ’ {mo 71 V I at 506; ((CCO/d Wapp \ P(m/(es, ()1 V l
321, 534 n 1 l (2014) (noting that statutes do not have to be cited in complaints)
Section 2 requires that WAPA furnish its services in a just and reasonable manner and not impose
C1131 ges that axe unjust and diSCIiminatory Discriminatory chaiges are prohibited and unlawful Olson
alleges that WAPA provid[es] the Government of the Viigin Islands with electiieity while being millions
of dollais in arrears ’ which constitutes ‘ special treatment that it [does] not extent to [its] non
governmental customers (Fiist Am Compl 11 54 ) Again, although Olson does not Cite section 2 this
statute (and not the Viigin Islands Bill of Rights) would provide Olson (and the Class) with a right of
action Cl Renme 62 V l at 550 F01 this reason the undersigned recommends that the Court deny the
Defendants motion 1‘01 judgment on the pleadings as to Count 11
iii Failure to Exhaust Administrative Remedies
The Defendants make one further argument in support of their motion for judgment on the
pleadings, namely that ‘ [t]he C ourt lacks subject matter Jurisdiction [because] the PSC has primary
jurisdiction over billing disputes ’ (Headings Mot 10 ) The PSC has the powei, after healing and
notice by oxder in writing, to require and compel every public utility to comply with the pi ovisions ofthis
chapter, and with all othei laws 01 the Virgin Islands applicable and any ordinance or regulation relating
to said public utility 30 V I C § 4 The PSC also has the authOIity to in» estigate complaints about
public utilities and dinetiminatmy 01 unjust practices See general]; 30 V 1 C § 20(a) ( Upon its own
initiative 01 upon reasonable complaint made against any public utility including the Virgin Islands Watet
Rewnnnendaiion
01mm 1 1 Han; A Panel 1m] (la! 51 2019 CV 00607
Page 45 of57
and Pow a Authmity that any of the rates tolls, L1H; gas, or schedules 01 sex vices or time and conditions
of payment, 01 any Joint rate or iates schedules or services are in any respect unleasonable Oi unjustly
discriminatory or any service in connection therevxith is in any ILSpCbt umeasonable, msutficient or
unjustly discriminatmy 01 that any seiviee is inadequate or cannot be obtained, 01 any billing fm sen ice
inaCeurate or enoneous the Commission may, in its discretion, mowed, with 01 Without notiee to make
such investigation as it may deem necessaiy 01 com enient ’) The Defendants contend that Olson 5 Claims
must be dismissed beeause she failed to exhaust these administtatixe iemedies fiist betoxe commencing
this action fox declaiatory relief The Defendants ale mistaken
[E]xhaustion applies where a claim is cognizable in the first instance by an administrative agency
alone VI Comcnalwn Socfvi Golda: Resorts LLLP 55 VI 613 621 (2011) (quotation marks
and citations omitted) While the Detendants are correct the PSC can compel WAPA to comply with the
law and investigate whether WAPA 5 practice is dism iminatory 0t not suspending service to governmental
customers t01 nonpayment the Virgin Islands Code does not vest the PSC with exclusixe authority
Instead, declaratory xelief is available whethei or not futther relief is or could be claimed 5 VIC §
1261 Fuithennore [n]o action or proceeding shah be open to objection on the ground that a deelatatory
Judgment or decree is prayed for Id
Nothing in sections 4 or 20 oftitle 30 of the Virgin Islands Code supports construing the statutes
as having deprived the Supeiior Coult of its juiisdiction Unlike other statutes wheie it is clear that the
Legislature limited the Superior Couit to appellate Jurisdiction only Cf Baumann i Pub 11mph? Re]
8d ()8 V I 304 (Supet Ct App Div 2018) there is no indication hue that the Legislatuie intended to
testiiet the Superim Couxt’s jurisdietion to issue declaratory judgments 10 be stile, the Supexior Court
does have appellatejurisdietion over the PSC See 30 V I C 9 34 And iftuo ptoeeedings V\ ere pending
simultaneous1y one befom the PSC and the othei before the Supexiox C ourt then perhaps the Defendants
Recommendation
OISOlIt I I flute; & Pom; 4th1] at ”I $1 ”010 C\ 0060”
P ige 46 of 3
would be on fitmei ground Cf [lam Rick 18 V I at 332 But nothing in title 30 vests the PSC with
(3‘ elusixe juiiscliction over eustome1 disputes particularly since section 20 says that the PSC may in its
LllSLICthH pioceed to make such im estigation as it may deem necessary 01 mm enient ’ 30 V l C §
20(a) (emphasis added) For these reasons the undeisigned recommends that the Court reject the
Defendants a1 gument that Olson S complaint should be dismissed for lack of subject matter julisdietion
Olson was not required to seek relief fiom the PSC first, befoxe coming to the Superior Court
D Motion to Declare / Hold Section 111(3) and Section 120 of Title 30 of the Virgin
Islands Code Unconstitutional9
In response to questions asked at the September 7 2021 healing, as to whether the C ourt could
grant Olson or the class any reliefin light of sections 1 l 1(a) and 120 of title 30 ofthe Virgin Islands Code,
Olson responded by filing a motion to declare or hold both sections unconstitutional The undersigned
recommends that the Court deny Olson s motion because it proceeds from the mistaken assumption that
WAPA is bothjudgment proof and immune from injunctive relief (Pl’s Mot to Deelare/ Hold §§
lll(a) & 120 of tit 30 of the VI Code Uncon & Br in Supp of Jurisdiction 14 filed Oct 6 2021
(heieinaftei Declaie Mot ) )
Section 111 of title 30 provides that [a]ll property including funds ot the Authority shall be
exempt from levy and sale by virtue of an execution and no execution or other judicial process shall issue
against the same nor Shall any judgment against the Authority be a Change 01 lien upon its property
30 V I C § lll(a) There is one exception Section lll(a) does not apply to 01 limit the right of
bondholders to pursue any remedies for the enforcement of any pledge or lien given by the Authority on
9 Olson also filed a motion for leaxe to exceed the page limits The undeisigned presumes that this motion is not a matter
pertinent to the prOCeedings and, for this reason has not lecommended a ruling Nonetheless the undersigned has proceeded
under the assumption that the Court would grant it since the motion is unopposed and to deny it at this juncture Would only
mean turther delay beeause Olson Vt ould have to be given lean to refile her motion within the page limits the present motion
eXeeeds the page limits by approximately six pages which n ould also be problematic as the undersigned already heard
argument on 1116 111011011
Reeotmnendation
O/mni l I Hate} & mez 414/1 tru/ SI 2019 (V 00602
Page. 47 0t 57
its iates fees revenues 01 other income 01 any other funds ’ [(1 Based on this language Olson claims
W APA is judgment proof and mm ed to declare the statute unconstitutional WAPA is not judgment
pioot however
Fixst thete is a preliminary point even if the Ccurt were to declare section 1 1 1(a) unconstitutional
it would have no effect on anothei mom genual statute that also applies to WAPA Seetion 479 of title 5
of the Viigin Islands Code exempts [a]ll property of any public cotporation or the government 01‘ the
Viigin Islands fiom execution by a judgment debtox 3 V I C § 479(a)(5) While speeifie statutes govern
to the exclusion of moxe general statutes see Rolm 57 V I at 647, it a specific statute were deelated
unconstitutional the general statute would remain in effect WAPA is a public e0rp01ati0n See 30 V I C
§ 103(a) ( Theie is hereby created a body corporate and politic constituting a public eorp01ation and
autonomous gm emmental instrumentality 0f the Go» eminent 0f the Viigin Islands, by the name of the
Virgin Islands Water and Power Auth01ity’ ’) So Olson s challenge to section 1 l 1(a) Vsould have
no impact on section 479 which also exempts property of all public corp01ations fiom execution by
judgment debtms Since WAPA is a public corporation section 479 would also exempt its property from
execution
Second Olson’s challenge stems lrom a misunderstanding of how judgments against public
corpoxations ale executed Courts in other jurisdictions have unanimously upheld similar statutes that
exempt the property of public coxporations explaining that
[als a geneial iule the propeity of all private emporations is as subject to legal process
t01 the satisfaction of debt as is the pioperty of natural persons An exception obtains
how ever when the corporation is created to seive public purposes, charged with public
duties and is in the exercise of its t1 anchise and in the performance of its duties Then, on
consideiations of public policy without regaid t0 the nature or quality of the estate 01
interest of the corporation, according to the weight of authority such property as is
necessary to enable it to dischaige its duties to the public and effectuate the objects of its
incorporation is not subject to execution at law The only remedy of 3 Judgment creditor is
to obtain the appointment of a receiver and the sequestration of its income or earnings
Recommendation
O/suni I 1 11mm &P()HUI {m}: ([a/ 51 2019 (\100602
Page 48 01 57
WM Mobzlc Bay 51mm}? CU \ Cm QlMObt/c Solid Waste 111111 No 1190978 2021 A1a 11*XIS 132
at 14 13(Dee 17 2021)(quoting Gamble; i W0bz!e&N W RR C0 1380 773 74(A1a 1894)) ALCO/d
Umon Redd! Mn (0 i SPCCld/fl Comm“ Contiactm, 476 S W2d 160 162 (Mo Ct Z\pp 1972)
( P1 ()perty 01‘ a municipality “hen used for a pub1ic purpose is not subject to scuttle and execution );
(flosso \ Pale] son, 157 A 201 868 870 (N J Supei Ct 1960) ( Had 11119 judgment been entered against
a private indiyidual or corpoxation plaintiffs could have caused execution to issue thereon and luied on
the judgment debtor’s property But since the judgment debtor is a public e01 pmation its propeity cannot
be 1eVied 0n ’) Vulcan“? Paimg C0 \ thla Rapid Tianszt (a , 69 A 1117 1117 (Pa 1908) ( The
decisions of our courts as well as the statutes relating to the subject ale based on a p01icy 01 the lav»
intended to keep intact the property belonging to and essential in the operation 01‘ a public service
corporation so that its creditom may not sei2e and sell the same piecemeal and by thus disabling it defeat
the pumose for which it “as Cleated by rendeling it unable to p61 form its duties to the public ’) Adlei v
[mcaln Ham 1111/1 623 A 2d 20 22 23 (R I 1993) ‘ The ‘long standing principle 01 exemption of public
pioperty is justified by the public purpose for which municipalities and other public corporations axe
c1eated ‘The mason to: the exemption is obvious Municipal corporations are created for public puiposcs
and fOi the good of the citizens in theii aggregate or public capacity That they may piopeily discharge
such public functions corporate property and ievenues are essential, and to deny them these would impede
and in some instances practically destioy the purposes 01 theit cleation (citations omitted»
Olson’s argument pI‘OLBCdS from an understandable starting point language in a decision of the
United States Couit of Appeals 101 the Thiid Circuit fmbe i (10\ 6111111011! of the VI] gm [5 [(11sz 938 F 2d
427 429 (3d C11 1991) eonstruing section 1 l 1(a) as providing WAPA with a limited form of
immunity it may be sued, but a vict01i0us plaintiff cannot force it to pay any judgment entered The
undersigned submite that the language quoted above from [m be is incorrect As a threshold matter
RLeommendation
Olvmi I I Ham 6: Pow) 1111/1 HI (1/ Si 2019 CV 0060’
Page 49 of 37
however it could be argued undel Banks 1 [ntcmanonal Rental and 14(15ng COIpOIatlon 55 V I 967
(201 1) that Imbe is binding precedent It “as a decision ofthe United States Conn of Appeals for the
Third Cireuit at a time when that coon functioned essentially as the dc fuck) supreme court of the Virgin
Islands Banks and Goummcnt 0/1116 I/zigm Islands \ Comm] ()0 VI 597 (2014) (pm euriam), which
followed deciaied that Third Cilcuit piecedent is no longer controlling, but only insotaI as it concerns
common Ian Twin w as interpreting a statute, section 1 11(a) Aiguabl y Thild Circuit plecedent
interpreting Virgin Islands statutes is still binding unless and until the Supreme Court of the V irgin Islands
says otherwise beeause the basis f01 the holding in Banks was that the legislature in establishing a
supreme court had implicitly repealed the Virgin Islands’ ieception statute title 1 section 4 of the Vi1 gin
Islands Code The concurrent authority granted to the Superior Court by the I egislature is limited only
to shap[ing] Vitgin Islands winmon law [(1 (citing Banks 55, VI at 977 78) 'lhe Virgin Islands
Supreme Court has never held that the Superi01 CQuit can chose whether to follow "I hird C ireuit preCedent
interpreting Vitgin Islands statutes NOV eltheless, the undersigned does belie“. that Tuibe is ineonect
Arguably the language quoted above from 711/ be is dicta insofa1 as the issue on appeal was
whether the Disttict Coult was correct in enteiing judgment on the pleadings in tav01 of WAPA See
[tube 938 F 2d at 427 28 ( In this case fiom the District Coun of the Virgin Islands plaintiff Roger
Turbe Challenges a judgment on the pleadings entered in favox of the Virgin Islands Watel and Powei
Authority ( ‘WAPA ) Tuibe alleged that WAPA's negligent failuie to Iepaii stieetlights was the
pioximate cause ot a cximinal assault against him We, will affiIm because we belie\e WAPA w as undet
no legal duty to ploteet Tuibe from eliminal attack ) Since Tuibe did not prevail the language about
WAPA having the choice to satisfy Judgments entered against it was dzclum and (Item axe not binding ”
Belle; Bldg Mam! 0f the L I Inc i Lee
60 VI 740 755 n 8 (2014) THle did honex er base that
discussion on an eatlier decision See T111176,
938 F 2d at 429 (citing Conapczon ‘1 Solo 17 V I 200 (3d
Recommendation
Olson ‘ VI ”(lftl d’ P(mu Am]? eta! SI 2019 (AV 00602
Pave 30 0t 5 7
Cir 1975)) And Comepczon did constiue seetion 111(a) as prohibiting execution and sale of WAPA
piopeity See 12 V 1 at 202 (‘ We think that the relief sought hem a judicia1 ordei that would compel the
AuthOIity to surrendei its assets in payment of a money judgment fox torttous personal inj my is within
the meaning ot the quoted prohibitory language since the order sought would be judieial process
designed to reach the piopeity of the Authoxity ’) 7 tube and C oncepczon both recognized that judgment
eieditors can go attei WAPA’S 1iabi1ity insurance See 1d at 207 03 ( This does not make the right to sue
the Authority or the obtaining of judgment against it meaninglese As a responsible agency the Authoxity
can, and apparently does earry liability insurance (footnote omitted», 711; be,
938 F 2d at 429 ( “We have
inteipieted § 1 1 1(a) as permitting WAPA to refuse to pay judgments entered against it But this provision
does not g1 ant fu11 immunity to WAPA Thus a plaintiff may be able to satisfy ajudgment against WAPA
by relying on WAPA'S liability insulance if any exists ’ (citation omitted» But 7111136 and Conccpaon
wen: both speculating howey er
1n othei w01ds, neither case looked to the decisions of state courts to see how those courts
interpreted similar prohibitions If they had they would have seen that the majority of courts have never
held that plaintiffs me without a remedy GIOSSO, 157 A 2d at 870 Instead [o]n the entiy of the
judgment it became the duty of the defendant to provide means for payment of the judgment That
duty is enforceable by an order in the natme ofa writ ofmandamus ’ Id (citing I 1 0n 1 Cztv ofElz abetlz,
43 N J L 158 (1881) Imp Comm 0/ Piscalauav Tupi F1151 ”Vat [Bank of Dzznel/en, 168 A 757 (N J
E11 & App Ct 1933); Goudy 1 8d ofEa'uc 0/013 0/ Patelcon 98 A 12 (NJ 1916) People a 16]
F115! Nat I Bank of Staten? Pom! WIS 1 Village Of SIzc/xm v 116 N E 2d 924 (111 App Ct 1954)
VGZd/Zaldf\ Cm of Wood Rue; 69 N E )d 345 (111 App Ct 1946)) The granting of the wit ‘is not a
diseletionary matte: Mandamus is the only 1emedy of the eleditm tor the enforcement 01 his judgment
This is a well established doetiine Id (brackets and ellipsis omitted) (quoting How (gm: 1 N Beige)?
Recommendation
Ohm“ I I Hate; & Pom; 4111/! e! (1/ SF 2019 CV 0060
Page 51 of 57
[up 172 A 193 195 (N J Err & App Ct 1934))
This is the majOIity 1ule (f I 1 pane Jones 399 So ”(1 246 247 (Ala 1981) ( Mandamus is a
pioper 1emedy to entome a judgment against a municipal or public corpoiation and it has been generally
used 101 sueh pu1pose in this state (quoting State ex )6] Huff? 1 Knight, 121 S W 2d 762 764 (Mo Ct
App 1938)) Cm 0f OCOCL 1 State 6 t Id Hcmzs, 20 So 2d 674 675 (Fla 1945) (‘ As we eonstiue the
section of the statute sup; a it does not preclude mandamus against a municipality to requiie the payment
ofa judgment lt appeais to us that to so eonstrue the statute would be equivalent to holding that a judgment
creditor of a munieipality would hate no means available to enforee the payment of such judgment ’)
State ex 16/ State Hzg/tiiat C ()mm’n 1 Qucscnbcuy
383 P 2d 253, 256 (N M 1963) (‘ Mandamus is one
01 the 1emedies and often the only one available to eompel a governmental body to pay a money
judgment ) Adlu 63 A 2d at 23 ( An altemati\ e to exeeution for a plaintiff with a validjudgment against
a munieipality or public corporation may be mandamus which compels municipal officials to pay a valid
judgment ) See also geizela/li 52 Am Jul 2d Mandamus § 137 ( A judgment eIeditOI 01 a public
e01p01ation is not generally entitled to levy execution on the property ofthe eorpomtion in the absenee 01
a statute expressly gianting that iight so that the writ does not lie to compel the leVy of execution or
seizure of the funds to enfmce a judgment but if payment of the judgment is demanded and refused the
creditor may haVe no adequate remedy but by mandamus and in such case the writ will issue to subjeet
the SUIplUS funds in the treasury of the corporation to the elaim This is t1 ue even wheie the issuanee of
flu: faczas or any writ of such nature on a judgment is piohibited by statute Mandamus in sueh cases is
not a 11th aetion, but is aneillaiy to and in aid 01 the judgment and saves the same purpose as a Wllt of
exeeution (footnotes omitted» Based on these authoxities the undersigned recommends that the Couit
Ieject Olson’s argument that section 1 1 1(a) of title 30 ot the Viigin Islands Code is unconstitutional If a
judgment w e1e enteied against W APA and it that judgment awaIded monetary damages, and if WAPA
Reeommendation
Olson 1 V] W afet & P0116} 411th er a] , ST 2019 CV 00602
Page 52 of57
did not appeal or did appeal and the Judgment were affirmed, and if WAPA refused to satisfy that
judgment, mandamus could issue to compel WAPA to satisfy the judgment WAPA is not judgment proof
and therefore there is no reason to declare unconstitutional the statute exempting WAPA’s ‘property
including funds 01 the Authority from levy and sale by virtue of an execution 30 V I C f9 1 l 1(a)
The undersigned also recommends that the Court deny Olson’s motion to declare Viigin Islands
Code title 30 section 120 unconstitutional Section 120 provides that “[a]n injunction shall not be granted
to prevent the application 01 this ehaptet 01 any part thexeot 30 V 1 C § 120 Identical language can also
be found in section 1111 of title 29 0f the Virgin Islands Code, concerning the Economic Development
Authority and in section 537 title 23 of the Laws of Puerto Rico, goveming the Port Commission of
Ponce Similat language can also be found in othei statutes enacted by Puerto Rico, specifically the Puerto
Rieo Potts Authority, see 23 L P R A § 351 ( ‘An injunction shall not be granted to prevent the application
of §§ 331 352 ofthis title or any pan thei e01 ) the Puerto Rico Electric Power Authority, set 22 L P R A
§ 216 ( An injunction shall not be granted to prevent the application of §§ 191 217 of this title 01 any
part thereof ) and the Pueito Rico Industrial Development Company sec 23 L P R A § 289 ( An
injunction shall not be granted to p1 event the application of§§ 271 291a of this title or any part the1 eot ’)
The Pueito Rico statutes all predate the Viigin Islands statutes and are quite similar with the Ponce Port
Commission Act being the Closest, even though the subject mattei differs The undersigned has not found
any othei jurisdiction having a statute v1 ith similar language Nonetheless the Couit is not lett without
guidance
‘One of the caidinal plineiples of statutory inteipretation quuiies [that courts] apply the plain
meaning’ of the statute whenex e1 it can be aseettained Rolm 57 V I at 643 Section 120 3 language is
plain, and its meaning is clear courts cannot issue an injunction against WAPA if th 1t injunction would
pi event the application ofthapter 5 of title 30 01 the Virgin Islands Code But section 1 )0 does not piohibit
Recommendation
Olson 1 VI Wale] & Pom: 1111/1 Lia] ST 2019 CV 00602
Page 53 0t 57
courts from issuing an injunction that would compel WAPA to comply with chaptei 5 And that is what
Olson seeks The term “to enjoin’ ordinarily means to ‘require,’ command ’ 01 positively direet’ an
action or to require a peison to perform, 01 to abstain or desist fiom, some act ”’ Gallana’ 1 G0712£ll€2
142 S Ct 2057 2064 (2022) (ellipsis omitted) (quoting Black 5 Law Dictionary 529 (6th ed 1990))
“When a court ‘enjoins’ conduct, it issues an ‘injunction,’ which is a judicial order that ‘tells someone
what to do 01 not to do ” [(1 (citation omitted) Although the words “injunction” and “enjoin” are
commonly thought of as telling a palty what it may not do, an injunction can also tell a party What must
do as noted by Supreme Court of the United States in Ga; [and
Although this might at fust glance provide support for Olson s claim that section 120 is
unconstitutional because it ‘ 0ffend[s] due process[,] ’ (Declaie Met 19), the statute must be read as a
whole, and effect given to all words therein And here, the authority to grant injunctions against WAPA
is limited to preventing the application 0fthe laws applicable to WAPA (Accom’ Pl ’5 Memo in Opp’n t0
Intervenor s Mots to Dismiss and/or for Summ J 7 n 2 (ECF N0 23), Cabot LNG (011) 1 P R Izlec
Powu Azu‘h No 3 94 CV 2036 (D P R Nov 14 1994) aiazlable (112005 WL 1827758( ABS and Ecos
anti injunction argument fails f01 the same reason 22 L P R A 9‘ 216 states that an injunction shall not
be granted to igievent the application of Sections 191 217 ofthis title 01 any part thereof This is an action
to enforce Section 205 It cannot be characterized as an effort to enjoin the exercise of PREPA'S
management discretion because that diseietion is limited by a variety of pIO‘vlSlOHS contained in 22
L P R A §§ 191 217 including the bidding requilements ()fSection 205 (citation and brackets omitted)
(emphasis in Oliginal)) :0 Limiting the authority of courts to enjoin WAPA from ‘issu[ing] and sell[ing]
1" The court teiected the tvlaintitf: equest for an injunction because it had unclean hands and did not address th distinction
betwnen and injunetion to compel compliance with the statute versus an injunction (0 pie\ em compliance 9c 9 Cabot 1 MG
(mp i PR Elec Panel 4m]:
922 F Supp 707 711 n 5 (DP R 1996) ( Plaintiff originally requested a preliminary
injunction However because Plaintitt item 613 participated in the piecedure it has unclean hands Plaintiff thexefme is
barred trom seeking equitable ieliet )
Recommendation
()lsoni i 1 1chth & P(HHI luf/z er a] $1 2019 CV 0060“
Page 34 0t 5 ./
bonds from time to time[] 30 V IC § 106(a), or from “mak[ing] contracts“ ’ Id § 105(5) or from
adVertising 101 competitive bids see Id § 1 16, as only a few examples, are all sound policy decisions for
the Legislature of the Virgin Islands to have made Imagine if WAPA were to stop soliciting competitive
bids, in Violation of section 116(a) of title 30, and instead awarded contracts on a different basis To
conelude that an action to compel WAPA to comply with section 116 was barred by section 120 s
prohibition against injunctions would be absuid and statutes should not be construed in a way that would
render them absurd See Rolm, 57 V I at 646 n 6
Here the plain language of section 120 clearly prohibits an injunction that would prevent the
application of title 30 Chaptei 5 But nothing in section 120 prohibits courts from granting an injunction
requiring WAPA to comply with title 30 chapter 5 1f the Legislature had wanted that outcome they
would have used more straightforward language providing that no injunction shall issue against WAPA
Instead, the Legislature chose only to restrict the courts’ equitable authority when granting an im unction
will prevent WAPA from carrying out functions ‘ declared to be necessary in the public interest ’ 30
V 1 C § 101(t) F01 this reason, the undersigned recommends that the Com“: deny Olson s motion to
declare unconstitutional section 120 oftitle 30 0fthe Virgin Islands Code
E Sua Sponte Grant Leave to Amend the Pleadings
Lastly, the undersigned recommends that the Court sua spome g1 ant the parties leave to amend
then pleadings Reynolds \ Rolm, 70 V 1 887 (2019), involved a motion torjudgment on the pleadings,
which was granted and a motion for ieconsideration which also sought leave to amend the complaint,
which was denied Sec 10’ at 890 91 On appeal the Virgin Islands SupIcme Court affirmed See 1d at
900 Although the CQuit did not addxess the procedural nuances inVolved in seeking leave to amend a
pleading attei the pleadings haxe closed and a motion f01 judgment on the pleadings has been filed, the
Supreme Court did state that ‘ [t]he decision to allow such amendments is \ ested in the disaetion of the
Reeonnnendation
0/3017) 1 I Ham (E Pout] 1111/7 era/ ST 2019 CV 00602
Page 33 0f 57
Superior Couit 1d at 899 And the Court further explained the grounds 101 denying, amendment namely
undue delay bad faith or dilatOIy motive 0n the part of the movant, repeated tailuxe to cum deficiencies
by amendments previously allowed, undue prejudice to the opposing party by virtue of allowance of the
amendment, and futility of the amendment Id (quoting Anl/mm x Indep [m Ad1 1501? Inc 56 V I
516 534 (2012) (blackets 0mitted))
Although Reynolds is distinguishable because it was decided under fennel Supeiior C0u1t Rule 8,
courts have recognized that motions fin judgment on the pleadings sometimes reV eal deficiencies in those
same pleadings See geneialli X0 stt; 0 LLC 1 Anthony Men ll] & White Sta; ILC, 2021 VI Super 74U
(denying motion for judgment on the pleadings and vua sponte granting leave to amend third party
complaint) 31102}? 1 Algal 71 V I 71 (Super Ct 2019) (denying motion forjudgment 0n the pleadings
and g1 anting motion for leave to amend complaint) Acc 01d Snack v Fed Land Bank ofSpoltane 218
P 2d 1052 1055 (Mont 1950) ( Where the pleading is susceptible to amendment the court in its
discretion may refuse a judgment on the pleadings, and under the prevailing rule is requiied to do so ’
(quoting 49 C J Pleadmg § 950 (1930)) 4tcluson Topcka & Santa Fe Ry C0 \ Coulson
371 P 2d 914
916 (Okla 1962) ( This court will not affirm a judgment rendered on a motion for judgment on the
pleadings, because of insufficient allegations in any pleading, unless it clearly appears that the pleading
could not have been amended, or the party elected to stand on the pleading as filed ’” (quoting 014 ens \
Momma
232 P 818 821 (Okla 1925)) Slogousklt Lyness
927 P 2d 587 588 (Ore 1996)( We note
however that motions f01 judgments on the pleadings axe not favored and amendments Should be granted
readily so as to preclude the entry of such a judgment )
Here assuming the Court agrees with this recommendation granting Plaintiff leave to file a second
amended complaint would let hei amend Count 11 to remove the lefeienees to legal authmity e g the
Vii gin Islands Bill of Rights, and let her remove from Count 1 the claims on which the Defendants’ motion
Recommendation
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Page 56 0f 57
i9 granted e g dismissal of the requests for declalations ofa state of emel geney and WAPA’S insolvency
Olson may choose to stand on her current pleading But she should be given the opportunity to amend her
pleadings it she chooses Likewise glanting the Defendants leave either to file an amended ansv» er (it
Olson declines to file a second amended complaint) or to file an answet t0 the second amended complaint
(it Olson elects to amend her pleading) will eliminate the need of the Court having to identify each specific
palaglaph in the Defendants’ Answer that should be deemed admitted due to the Defendants’ failure to
comply with Rule 8 Additionally, as LaWIence J Kupfer is no longel the Chief Executive Officer of
WAPA, an amendment is tequired pursuant to Rule 25 0f the Virgin Islands Rules Of Civil Procedure to
substitute the current public otfieial See V l R Civ P 25(d) (‘ An action does not abate when a public
officer who is a party in an official capacity dies resigns or otherwise ceases to hold office while the
action is pending The officer's successor is automatically substituted as a party ’ )
III Conclusion
For the reasons given above the undexsigned RECOMMENDS that the Court
(I) DENY without prejudice the Motion to Take Judicial Notice filed by Plaintiffon Maleh 16
2020
(2) GRANT the Motion to Deem Conceded filed by Plaintiff on March 18 2020
(3) VACATE the bench ruling on September 7, 2021 denying the Joint Motion for Judgment on
the Pleadings filed by Defendants Virgin Islands Water and Power Authority and Lawrence J
Kupfer on December 29 2020‘
(4) GRANT in part the Joint Motion for Judgment on the Pleadings filed by Defendants Virgin
Islands Watet and Powel Authority and Lawrence J Kupfel on December 29 2020 (as
supplemented) as to Count I (i) (request to declare Defendant Virgin Islands WateI and P0we1
Authority insolvent) and Count I (v) (request to declare a state of emergency as to Defendant
Virgin Islands Water and Power Authority) and DENY in part the Joint Motion tor Judgment
on the Pleadings filed by Defendants Virgin Islands Water and Power Authority and Lawrence
J Kupfer on December 29 2020 (as supplemented) as to Count I (ii) (request to declare
amount of statutory interest due to Olson), as to Count I (iii) (request to deelate amount Of
Recommendation
01m)“ I I ”(IILI & Punt); 4m}! a (1/ SI 7019 CV 00602
Pagr 37 of57
statutory intetest due to Claws) and Count II (request to declare certain ptdetices of Defendant
Virgin Islands Water and Power Authority discriminatory) and DFN'Y in part without
prejudice the Joint VIOtion for Judgment on the Pleadings filed by Defendants Vi1 gin Islands
Watel and Pow er AuthOIity and La“ rence J Kupfu 0n Deeembu 29, 2020 (as supplemented)
as to Count I (iv) (tequest to declare amount of funds Defendant Virgin Islands Watex and
POW€I Authmity must set aside)‘ and
(’5) GRANT the parties leave to amend their pleadings in Iesponse to any decision on this
recommendation
DONE this 18th day of Octobel 2022
/s/
JOSEPH T CASPER
Staff Master
ATTEST
TAMARA C HARLES
Clerk of the Court
By Chem Farris
Court Clelk III
Date Octobel 18 2022