IN THE SUPERIOR COURT OF THE VIRGIN ISLANDS



DIVISION OF ST. THOMAS AND ST. JOHN



VIRGIN ISLANDS TAXI ASSOCIATION,

Plaintiff,



vs. CASE NO. ST-97-CV-117

VIRGIN ISLANDS PORT AUTHORITY,

FREDDY LETTSOME, EAST END



TAXI SERVICES, INC., THE RITZ-CARLTON

VIRGIN ISLANDS, INC., and CANEEL BAY

RESORT,



Defendants,



THE ST. THOMAS-ST. JOHN HOTEL

ASSOCIATION, INC.,



Intervenor.



Nee Somme” Nowe! Nome! Sum” Nee Nee Nee Nome Nee” Nee” Nee Nee” Nee” Nee Nee’ “nee “tee” tee”



MEMORANDUM OPINION

Before the Court is Defendants’ July 15, 2015, Motion to Dismiss.' For the following

reasons, Defendants’ Motion will be granted.

RELEVANT FACTUAL AND PROCEDURAL HISTORY

Plaintiff commenced this action on February 12, 1997, claiming that, in violation of

Plaintiff's exclusive franchise agreement with the VI Port Authority, VIPA permitted non-VI Taxi

Association operators to pick up passengers without pre-paid vouchers and the other Defendants



solicited or contracted with independent drivers to pick up passengers directly from the airport.2



' VITA responded on August 17, 2015, and Defendants replied on August 31, 2015,



2 On December 29, 1986, the Virgin Islands Legislature enacted Act No. 5231 (the “Act”), which granted Plaintiff,

with limited exceptions for pre-paid transportation with tour operators, the “exclusive right to provide public taxicab

services from the terminal facility” at Cyril E. King Airport on St. Thomas (the “Airport”) for a period of ten years,

with potential renewal by the franchisee for a subsequent ten year term. Under the Act, if “the franchisee remains in

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Page 2 of 45.



Through a March 10, 1997, Order, the then Territorial Court issued a preliminary injunction, and

on September 22, 1997, the Appellate Division of the District Court affirmed. On May 9, 2004,

VITA filed a motion for sanctions, and on June 13, 2006, the Superior Court found all Defendants

in contempt and issued sanctions.



Defendants appealed, and on February 6, 2008, the Appellate Division reversed the

Superior Court’s decision and determined that “VITA failed to show noncompliance with the

preliminary injunction” and failed to present any evidence to “reveal even one instance where a

particular passenger was transported in violation of the March 10, 1997 preliminary injunction or

the August 3, 2005 order.”? The case was remanded to the Superior Court to determine whether

VITA properly renewed the exclusive franchise, but VITA appealed to the Third Circuit. On

January 12, 2011, the Third Circuit determined that, although the Appellate Division’s exercise of

jurisdiction over the interlocutory appeal was proper and fines imposed clearly met the definition

of criminal contempt sanctions, the Third Circuit did not have jurisdiction over the appeal because

the Appellate Division did not issue a final order.*



Plaintiff filed a motion for partial summary judgment on September 11, 2012, and amended

it on September 17, 2012, stating that “[ VITA] is entitled to judgment as a matter of law on the

issue of its renewal of its exclusive taxi franchise.”*> Defendants objected in a November 5, 2012,



opposition, claiming that there was no evidence of a valid renewal by VITA. On August 1, 2013,



possession of the premises after the expiration of [the] franchise... it shall be deemed to be occupying the premises as

a tenant month to month”.



> E. End Taxi Services, Inc. v. VI. Taxi Ass'n, Inc., 49 V.1. 658, 684 (D.V.L. App. Div. 2008).



4 E. End Taxi Servs., Inc. v. VI. Taxi Ass'n, Inc., 411 F. App'x 495, 499 (3d Cir. 2011) (“Because the order of the

Appellate Division was not a final order, we have no appellate jurisdiction over the VITA's appeal. Accordingly, we

will dismiss the VITA's appeal. However...we do have jurisdiction to review the limited question of the Appellate

Division's determination of its own jurisdiction. ..[and] [i]t is also clear that the Appellate Division had jurisdiction

to hear the defendants’ interlocutory appeals because criminal contempt sanctions are considered final and

appealable in pending actions by parties and non-parties.”).



* PL.'s Sept. 11, 2012, Mot, for Partial Summary Judgment, p. 20.

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this Court ruled in favor of VITA and found appropriate renewal of the franchise agreement under

Act No. 5231 for an additional ten years.



Defendants sought reconsideration of the Court’s August 1, 2013, Order,® arguing that the

Court failed to address Defendants’ argument that Plaintiff's acceptance of the airport taxi contract

with Defendant Virgin Islands Port Authority “was statutorily insufficient to initiate the

[franchise]” under Act No. 5231 by the statutory deadline, making it impossible for VITA to have

validly renewed the franchise.’ On September 24, 2013, VITA replied with a motion for sanctions

against East End Taxi Association, claiming that the motivation of East End’s motion was for the

improper purpose of delay. On August 7, 2014, the Court denied Defendants’ request, finding that

the motion for reconsideration was untimely, that the Defendants did not establish the existence of

clear error or manifest injustice, and that the request was not supported by new evidence or law.



On October 6, 2014, a hearing was held on Plaintiff's pending motions for sanctions against

East End Taxi Services, Inc., Attorney Charles Engeman and Attorney Engeman’s client, CBI

Acquisitions. At the conclusion of the hearing, the Court took the motions for sanctions under

advisement and ordered the parties to submit written briefs by November 14, 2014.2 Defendant

Plantation Bay, Inc., f/k/a Caneel Bay Resorts’ filed a brief on behalf of Defendants on November

14, 2014,” but Plaintiff did not respond by the Court’s deadline. Instead, on November 20, 2014,

Plaintiff filed a motion for extension of time to respond, which Defendants opposed on December



3, 2014. Plaintiff's failed to file a timely response. On June 15, 2015, the Court denied Plaintiff's



® The Aug. 1, 2013, Opinion and Order were issued by the Hon. James S. Carroll, III.



? Defs. East End Taxi Services, Inc., and Freddy Lettsome’s Aug. 16, 2013, Mot. for Reconsideration of the Court’s

Order Granting Plaintiff Partial Summary Judgment Regarding Franchise Renewal, p. 6.



8 The order was reduced to writing in an October 31, 2014, Order.



° Defendants Freddy Lettsome and East End Taxi Services, Inc., filed a notice of joinder on November 14, 2014. On

the same date Defendant Ritz-Carlton filed a notice of joinder with supplemental notes. On November 17, 2014,

Intervenor, the St. Thomas-St. John Hotel Association, Inc., also filed a notice of joinder.

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motions for sanctions, indicated its unwillingness to dismiss the action without a properly filed

motion to dismiss and briefing by both parties, and ordered Defendants to file any motion to

dismiss by July 1, 2015."

ANALYSIS



Defendants assert that the action must be dismissed because VITA may not re-litigate the

issue of civil or criminal contempt sanctions for the relevant period, March 10, 1997, to March 1,

2006. Alternatively, Defendants argue the case should be dismissed because of Plaintiff's failure

to prosecute and because laches bars VITA from seeking “monetary sanctions stemming from

violations of the preliminary injunction that have not yet been alleged by VITA.”!! Defendants

acknowledge that “the only period of time in which VITA is not foreclosed by the law of the case

from seeking damages is the period June 14, 2006, to April 30, 2007", yet maintain that the

doctrine of laches precludes any attempt to now litigate any claim for damages from that period.

Defendants also contend that nothing in Act No. 5231 gives VITA a private right of action for

damages for an alleged violation of its exclusive franchise by VIPA. Further, Defendants posit

that, since VITA claimed _ that damages were incalculable, thus necessitating

a preliminary injunction, judicial estoppel precludes VITA’s current claims for compensatory

damages.'’ Plaintiff responds that VITA is entitled to a permanent injunction, discovery on the

issue of successor in interest and contempt damages for violations of the injunction both before



and after this Court’s contempt rulings through present, and a hearing to determine the proper



'° Defendants timely filed for an extension of time, which was granted by the Court on July 17, 2016.

" Defs.” Aug. 31, 2015, Joint Reply, p. 23.



" Defs.” July 15, 2015, Mot. to Dismiss, p. 12.



"8 Id. at 13.

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amount of contempt damages. Plaintiff maintains that Defendants have been continuously

violating the injunction since this Court conducted the contempt hearings.

I. Permanent Injunction

The Court clearly indicated in its June 15, 2015, opinion that any relief requested would be

limited to events related to the franchise agreement and renewal under Act No. 5231, as well as

the amended preliminary injunction from May 27, 1997.4 Defendants assert that there is no longer

any basis for a finding of a violation of Act No. 5231 that would justify the issuance of a permanent

injunction. The allegedly wrongful behavior is not recurring because Act No. 5231, upon which

VITA’s Complaint is based, expired in 2007 and VITA no longer possesses an exclusive franchise

based on Act No. 5231. VITA’s continued occupation of the airport premises after the expiration

of Act No. 5231 has only been as a month to month tenant.'5

Plaintiff contends that the Court has resolved every merits-related defense to entry of a

permanent injunction against Defendants, claiming the last remaining hurdle is disposing of

Defendants’ claim that the injunction is “moot” because the exclusive franchise is now granted by

Act No. 7452 rather than through the automatic renewal provisions of Act No. 5231. Further,

Plaintiff claims that, since the provisions of Act No. 7452 are substantively the same as those of

Act No. 5231, the Court should reject this argument as a matter of law, grant a permanent



injunction, and permit discovery on the issue of damages from contempt sanctions. Plaintiff urges



'4 Defendant Ritz-Carlton also emphasized that the preliminary injunction should be dissolved because the Plaintiff

no longer has any conceivable legal basis for seeking a permanent injunction because the Act which formed the

basis of the injunction expired on its terms in 2007. Def. Ritz-Carlton’s Nov. 14, 2014, Joinder in Plantation Bay’s

Brief in Response to Order of Oct. 31, 2014.



'S “Indeed, if the franchise had expired pursuant to Act 5231 (f), then VITA would no longer have the exclusive right

to transport passengers from the airport, even if it continued to occupy the space reserved for it at the airport and

consequently was obligated to pay VIPA for such use pursuant to Act 5231(m).” E. End Taxi Services, Inc., 49 V.1.

at 682.

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the Court to employ the preliminary injunction “sliding scale” analysis adopted by the Supreme

Court of the Virgin Islands in 3RC & Co. v. Boynes Trucking Sys.'® for evaluating whether to grant

a permanent injunction.



While the Supreme Court has stated that the analysis required for a preliminary injunction

is distinct from that for a permanent injunction,'’ the Supreme Court has not taken a position

regarding whether the “sliding scale” analysis adopted in 3RC & Co. v. Boynes Trucking Sys.

applies to a permanent injunction. Although the Supreme Court has awarded injunctive relief!*®

and has reviewed cases on appeal regarding the Superior Court’s issuance of permanent

injunctions,'? the Supreme Court has not conducted a Banks analysis, the framework for

determining the appropriate rule of law in this jurisdiction.2” Banks requires the Court to engage

in a three-factor analysis: first, determine which common law rule Virgin Islands courts have

applied in the past; second, identify the rule adopted by a majority of courts of other jurisdictions;

and third, most importantly, decide which common law rule is soundest for the Virgin Islands.2!

As a result, the Court will perform a Banks analysis to determine the appropriate standard for a



permanent injunction for this jurisdiction.



'6S. Ct. Civ. No. 2015-0016, _-‘V.I.__, 2015 V.I. Supreme LEXIS 22, at *5 (V.1. July 23, 2015).



"" See Tip Top Constr. Corp. v, Gov't of the V.L, S. Ct. Civ. No. 2014-0006, 2014 V.I. Supreme LEXIS 15, at *3 n.1

(V.I. Feb. 14, 2014) (unpublished) (recognizing the analysis for a preliminary injunction and a stay pending appeal

is the same and distinct from that for a permanent injunction).



'® In re VI. Bar Ass'n Comm. on the Unauthorized Practice of Law, 59 V.1. 701, 739 0.26 (V.1 2013) (awarding a

permanent injunction against the unauthorized practice of law).



"" See Caribbean Healthways, Inc. v. James, 59 V.1. 805, 811-12 (V.L 2013) (reversing the Superior Court’s

issuance of the permanent injunction finding the injunction to be internally inconsistent, and broader than necessary

{o restrain the impermissible conduct); see e.g., Hansen v. O'Reilly, 62 V.1. 494, 508 (V.I. 2015) (finding the

Supreme Court ts “not bound to follow a permanent injunction of the District Court issued in a second case

involving some of the same parties and the same issues.”).



*° “Because courts could no longer derive principles of common law through rote application of the Restatements of

the Law as mandated by | V.I.C. § 4, the Supreme Court provided a framework for determining the appropriate rule

of law. This framework applies to every court called upon to determine a question of Virgin Islands law, including the

Supreme Court itself.” Merchants Commercial Bank v. Oceanside Village, Inc., 2015 V.1. LEXIS 146, *5 (V.L Super.

Ct., Dec. 18, 2015).



*! Gov't of the V.I. v, Connor, 60 V.I. 597, 605 (V.I. 2014); 3RC & Co., 2015 V.1. Supreme LEXIS 22, at *8.

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Prior to the establishment of the Banks analysis, Courts in this jurisdiction tended to

consider the same four factors as those adopted by the Supreme Court for a preliminary injunction,

the exception being that, for a permanent injunction, the Court must consider the merits of the

case.”* Nevertheless, the Superior Court has not uniformly applied a standard.”> For example, in

several cases the Court made oral rulings after a hearing, limiting the number of opinions in which

the Court listed and analyzed factors for injunctive relief.* Additionally, permanent injunctions

have been issued far less frequently than their preliminary injunction counterpart.



Turning to the second factor, while there is not unanimity among other jurisdictions

regarding the factors to be considered, the majority of jurisdictions agree that the most important

distinction for a permanent injunction is the Court’s ability to determine the merits of the claims.”



Recently, the Supreme Court of the United States addressed the appropriate test to be utilized.



” “With respect to a permanent injunction, a court must consider whether: ‘(1) the moving party has shown actual

success on the merits; (2) the moving party will be irreparably injured by the denial of injunctive relief; (3) the

granting of the permanent injunction will result in even greater harm to the defendant; and (4) the injunction would

be in the public interest."” Beachside Assocs. v. Bayside Resort, Inc., 2011 V.1. LEXIS 68, *20 (V.I. Super. Ct., Nov.

25, 2011) (quoting Kendall v. Russell, Civil No. 2007-126, 49 V.1. 602, 618 (D.V.I. 2008)); see Gourmet Gallery

Crown Bay, Inc. v. Crown Bay Marina, L.P., 2015 V1. LEXIS 141, *29 (V.L. Super. Ct., Nov. 10, 2015) (“Unlike a

permanent injunction, a preliminary injunction functions as a provisional remedy pending the ultimate disposition of

a case.”),



3 See e.g, S & C Corp. v. Hodge, 1990 V.1. LEXIS 10, *15 (V.L Terr. Ct. 1990) (not distinguishing between a

preliminary or permanent injunction standard, and finding “the Plaintiff must show the existence of irreparable harm

and the absence of an adequate [and speedy] remedy at law; the probability of ultimate success on the merits; and

that the threat of harm [to the Plaintiff] outweighs the harm [or threat thereof] to the opposing party”: in the case

before the Court that the public interest will not be disserved or subverted by the granting of injunctive relief” to

receive a preliminary or permanent injunction); Hodge v. Luis, 1984 V.I. LEXIS 25, *10-11 (VL Terr. Ct. 1984)

(after finding a party was likely to suffer irreparable harm and substantial prejudice, while the government would

suffer no prejudice, exercising its inherent equitable power, the Court issued a permanent injunction).



*4 See e.g., Marsh-Monsanto y. St. Thomas-St. John Bd. of Elections, 60 V.1. 41, 47 (V.L Super. Ct. 2014) (after an

evidentiary hearing, the Court announced its decision on the pending motions and the issue of permanent injunctive

relief at a subsequent hearing); Dyer v. Worldwide Protein, 1985 V.I. LEXIS 19, *2-3 (V.L. Terr. Ct. 1985) (holding

a four-day bench trial to determine the merits of the injunction).



*5 See e.g., Md. Comm'n on Human Rels. vy. Downey Communs., 110 Md. App. 493, 517, 678 A.2d 55, 67 (1996) (CA

permanent injunction is, as its name indicates, “‘an injunction final or permanent in its nature granted after a

determination of the merits of the action.’ But a permanent injunction is not ‘permanent’ in the sense that it must

invariably last indefinitely. Rather, it ‘is one granted by the judgment which finally disposes of the injunction suit.”

(citations omitted)); Classroomdirect.com, LLC v. Draphix, LLC, 992 So, 2d 692, 702 (Ala. 2008) (“In regard to the

Motion for Permanent Injunction, the Court considered the elements necessary to issue a permanent injunction,

namely, a plaintiff must demonstrate success on the merits, a substantial threat of irreparable injury if the injunction

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According to well-established principles of equity, a plaintiff seeking a permanent

injunction must satisfy a four-factor test before a court may grant such relief. A plaintiff

must demonstrate: (1) that it has suffered an irreparable injury; (2) that remedies

available at law, such as monetary damages, are inadequate to compensate for that injury;

(3) that, considering the balance of hardships between the plaintiff and defendant, a

remedy in equity is warranted; and (4) that the public interest would not be disserved by a

permanent injunction. The decision to grant or deny permanent injunctive relief is an act

of equitable discretion. ...”7°



Prior to this holding in eBay Inc. v. MercExchange, L.L.C., none of the circuits applied this

particular four-factor test.2”. While some state courts utilize an identical or similar four-factor

test,”* others do not consider the success on the merits and focus on the risk of harm and right to



equitable relief.?°



is not granted, that the threatened injury to the plaintiff outweighs the harm the injunction may cause the defendant,

and that granting the injunction will not disserve the public interest.”); Roper y. Jolliffe, No. 05-14-00500-CV, 2015

Tex. App. LEXIS 10462, at *16 (App. Oct. 9, 2015) (“A permanent injunction is an equitable remedy for some other

cause of action and requires a liability finding after a final hearing on the merits.”); Syngenta Crop Protection, Inc.

v. Helliker, 138 Cal. App. 4th 1135, 42 Cal. Rptr. 3d 191 (2d Dist. 2006) (“A permanent injunction is an equitable

remedy...where a damage remedy is inadequate. A permanent injunction is a determination on the merits that a

plaintiff has prevailed on a cause of action for tort or other wrongful act against a defendant and that equitable relief

is appropriate.” (citation omitted)); see Sierra Club v. DOT of Haw., No. 29035, 2009 Haw. LEXIS 118, at *12-15

(May 13, 2009) (considering the success on the merits, the possibility of irreparable injury; and the public interest).

** eBay Inc. v. MercExchange, L.L.C., 547 U.S. 388, 391, 126 S. Ct. 1837, 1839 (2006). See also Waters v. Ricketts,

No. 8:14CV356, 2016 U.S. Dist. LEXIS 13515, at *7 (D. Neb. Feb. 4, 2016) (“The basis of injunctive relief in the

federal courts has always been irreparable harm and inadequacy of legal remedies.” (citations omitted)).



“7 “In a plurality of the circuits — the First, Fifth, Seventh, Tenth, D.C., and Federal Circuits - courts had sometimes

used a four-part test consisting of success on the merits, irreparable injury, balance of harms, and the public interest.

The Sixth Circuit had used a different four-part test: success on the merits, irreparable injury, no adequate remedy at

law, and the public good. The Fourth Circuit had applied a three-part test: no adequate remedy, balance of equities,

and the public interest. The Eighth Circuit had applied its own three-part test: irreparable harm, balance of equities,

and the public interest.” Samuel L. Bray, The Supreme Court and the New Equity, 68 VAND. L. REV. 997, 1025-

1026 (2015) (collecting cases).



*8 See e.g., River Springs Ranch Prop. Owners Ass'n v. L'Heureux, No. | CA-CV 09-0560, 2010 Ariz. App. LEXIS

1285, at *8 (Ct. App. Oct. 26, 2010) (unpublished) (quoting eBay Inc., 547 U.S. at 391); Vintage Health Res., Ine. vy.

Guiangan, 309 $.W.3d 448, 467 (Tenn. Ct. App. 2009) (“When determining whether to grant injunctive relief, the

trial court should consider such factors as the adequacy of other remedies, the danger that the plaintiff will suffer

irreparable harm without the injunction, the benefit to the plaintiff, the harm to the defendant, and the public

interest.”); Inner-Tite Corp. v. Brozowski, 27 Mass. L. Rep. 204 (Mass. Super. 2010) (“The standard for issuing a

permanent injunction requires a finding that: ‘(1) the plaintiffs [will] prevail on the merits; (2) plaintiffs would suffer

irreparable injury in the absence of injunctive relief; (3) the harm to plaintiffs would outweigh the harm the

defendant would suffer from the imposition of an injunction; and (4) the public interest would not be adversely

affected by an injunction.’” (internal quotation and citation omitted)).



2° See e.g., Kocken v. Wisconsin Council 40, 301 Wis. 2d 266, 732 N.W.2d 828 (2007) (“Before the circuit court can

issue @ permanent injunction, ‘a plaintiff must show a sufficient probability that future conduct of the defendant will

violate a right of and injure the plaintiff.’ A permanent injunction will not be granted unless there is the threat of

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Considering the most important factor, the soundest rule for the Virgin Islands, this Court

finds that the four-factor preliminary injunction analysis from 3RC & Co. v. Boynes Trucking

Sys.,*" is not the best common law rule for this jurisdiction. Untike preliminary injunctions, where

previous Supreme Court precedent has established a four factor test, with the burden of proving

the factors on the party seeking the injunction,*! here the Supreme Court has offered little precedent

as to the appropriate factors to be considered, only recognizing the distinct nature between

permanent injunctions and preliminary injunctions. Nevertheless, this Court agrees with the

Supreme Court’s recognition of the importance of equitable relief. “Despite the fact that the

Superior Court of the Virgin Islands — like almost all modern American courts — exercises both

equitable and legal authority, the division between law and equity remains meaningful to defining



3332



the remedies available in a particular action.”’~ Significantly, in the same context, the Supreme

Court agreed with the Superior Court that, since courts possess “more flexibility in considering

equitable remedies than it does in considering legal remedies...the application of a strict,

sequential multi-factor test would be entirely inconsistent with this ‘hallmark of equity



jurisdiction.””°?



irreparable injury that cannot be compensated with a remedy at law.” (citations omitted)); Freyou v. Iberia Par. Sch.

Bd., 657 So. 2d 161, 164 (La.App. 3 Cir.) (“A permanent injunction is an extraordinary remedy appropriately

ordered only to prevent damage that is likely to occur in the future rather than to punish for past damage. Thus, no

injunction may be issued when the situation sought to be enjoined has already been remedied.” (citations omitted));

Indiana Family and Social Services Admin. v. Hospitality House of Bedford, 704 N.E.2d 1050 (Ind. Ct. App. 1998)

(“Permanent injunctions are limited to prohibiting injurious interference with rights. If an injunction is overbroad or

if it becomes an instrument of wrong through changed circumstances, it is subject to modification through the court's

continuing equity jurisdiction.” (citations omitted)); DeLong v. Parmelee, 157 Wash. App. 119, 150, 236 P.3d 936,

951-52 (2010) (“And, as with temporary injunctions, an individual seeking a permanent injunction must demonstrate

that (1) he has a clear legal or equitable right, (2) he has a well-grounded fear of immediate invasion of that right,

and (3) that the acts he is complaining of have or will result in actual and substantial injury. Moreover, the trial court

must precisely tailor a permanent injunction to prevent a specific harm.” (citations omitted)).



3° 3RC & Co., 2015 V.I. Supreme LEXIS 22, at *5.



31 Id. at *14-18.



32 Id. at *10.



33 Jd. (citing SBRMCOA, 62 V.1. at 186, [WL], at *8 (quoting Winter v. Natural Res. Def. Council, Inc., 555 U.S. 7,

51, 129 S. Ct. 365, 172 L. Ed. 2d 249 (2008) (Ginsburg, J., dissenting))).

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However, the Supreme Court has suggested that the crux of equitable relief is the need to

limit its use to circumstances where other legal remedies are unavailable, finding a party must

demonstrate that “the injunction is necessary to avoid ‘certain and imminent harm for which a

monetary award does not adequately compensate.’”** Additionally, the Supreme Court determined

that when a permanent injunction is granted, the order must be specific and ‘“‘cannot be broader

than necessary to restrain the unlawful conduct,’*> [and] must ensure that it is narrowly tailored

‘to fit the particular circumstances of the case.””°° This finding further supports the need to restrict

the use of permanent injunctions to circumstances where other legal remedies are unavailable.*”



As a result, the Court believes a four-factor test is appropriate, but finds it necessary to

restate the standard, combining factors from eBay Inc. v. MercExchange, L.L.C. and state courts.

With respect to a permanent injunction, a court must consider whether: (1) the moving party has

shown actual success on the merits; (2) the moving party has suffered irreparable harm; (3) the

remedies at law are inadequate; and (4) the injunction would be in the public interest. A permanent

injunction is typically issued after a trial on the merits, but when a case can be disposed on the

merits, it is unnecessary to evaluate the injunctive factors.** Further, since an injunction is an

extraordinary remedy, its purpose is not to punish, but to prevent damage that is likely to occur in

the future. Thus, when the situation is remedied or becomes moot, an injunction is not appropriate.



Further, the Supreme Court has found in the context of preliminary injunctions that the



moving party “has the burden of making some showing on all four injunction factors. But in



4 Td, (quoting Yusufv. Hamed, 59 V.1. 841, 854 (V.I. 2013) (internal quotation marks and citation omitted).

SCaribbean Healthways, Inc. v. James, 55 V.1. 691, 700 (V.1. 2011) (remanding the Superior Court’s permanent

injunction for being overly broad) (quoting Educ. Testing Servs, v. Katzman, 793 F.2d 533, 545 (3d Cir. 1986)).



36 Jd. (quoting Brow v. Farrelly, 994 F.2d 1027, 1038, 28 V.1. 345 (3d Cir. 1993)).



3» See Yusuf, 59 V.I. at 842 (finding a preliminary injunction to be an “extraordinary and drastic remedy... and may

only be awarded upon a clear showing that the plaintiff is entitled to such relief.”’).



38 Mapp v. Fawkes, 61 V.1. 521, 531 n.7 (V.I. 2014).

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considering whether to grant or deny the preliminary injunction, the Superior Court...” must

consider the factors together and weigh them against one another to determine whether the party

is entitled to injunctive relief.°” The Court does not find it necessary to deviate from this standard

of analysis and finds its application to permanent injunctions appropriate. Generally, a court is

required to make findings of fact after an evidentiary hearing before granting a preliminary

injunction. But, in limited circumstances, an evidentiary hearing is not necessary if it is clear that

there are no factual disputes.*” Here, the Court finds the same principle to be true for a permanent

injunction.



Applying this standard to the current case, although Plaintiff maintains that the issue is not

moot because the exclusive franchise is now granted by Act No. 7452 and the provisions of Act

No. 7452 are substantively the same as Act No. 5231, the Court disagrees. “A motion becomes

moot when something occurs after a motion is filed that resolves the issues raised in that motion.”“!

It is undisputed that the exclusive franchise premised on Act No. 5231 expired in 2007. While the

Court recognizes the similarities between Act No. 5231 and Act No. 7452, Act No. 7452 does not

mention Act No. 5231, and the terms of each Act are not identical. For example, under Act No.

7452, VITA’s franchise is for five years instead of ten.” VITA has had since 2012 to seek leave

to file an amended complaint incorporating Act No. 7452, but has failed to do so as of the date of



this Opinion.



% 3RC & Co., 2015 V.1. Supreme LEXIS 22, at *14-18



40 Id. at *19-22.



“'Der Weer v. Hess Oil Virgin Islands Corp., 60 V.1. 91, 99, [WL], at *3 (V.1. Super. Ct. 2014) (citations omitted);

Haynes v. Ottley, 61 V.1. 547, 558 (V.1. 2014) (“[T]he mootness doctrine in the Virgin Islands is a non-jurisdictional

claims-processing rule that has been incorporated into Virgin Islands law only as a matter of judicial policy.”

{citations omitted)).



* Defs.’ July 15, 2015, Mot. to Dismiss, compare Ex. 2 at §1(f) with Ex. 25 at §1(f.

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Alternatively, even applying the factors for a permanent injunction, an injunction is not

warranted. As discussed above, VITA would be unable to establish actual success on the merits

for its claims. Here, the Court indicated it would limit relief to events related to Act No. 5231, and

it is undisputed that Act No. 5231 has expired. Based on this undisputed fact, the Court is able to

make a determination on the merits and deny VITA’s request for a permanent injunction. Without

a showing on the first factor, VITA fails to meet its burden of making a showing on each of the

factors as the Supreme Court requires. Even assuming arguendo that VITA had a claim on the

merits, since the preliminary injunction was upheld by the Appellate Division of the District Court,

VITA has essentially had a permanent injunction protecting its interest for the entire period of Act

No. 5231, without having to successfully prove the merits of its claims.*? Therefore, VITA will

not be able to prove irreparable harm. Further, it appears there are other remedies at law that are

adequate to compensate VITA for its injuries.4



Lastly, a permanent injunction would not serve the public interest, since the Act has expired

and enforcement would be a waste of government resources. While the Court did not schedule a

separate hearing for the permanent injunction, based on the foregoing, there is no longer an active

claim on the merits that would justify the issuance of a permanent injunction, and it would be



meaningless to issue one now based on an expired Act.



See Pate v. Gov't of the V.I., 2014 V.I. LEXIS 112, *6-7 (V.I. Super. Ct., Dec. 11, 2014) (“Although granted

without a full adjudication on the merits, a preliminary injunction has all of the force of a permanent injunction

during its period of effectiveness and it binds defendant, defendant's representatives, and persons with actual notice

of the order who are acting in concert with defendant in the same way as does a permanent injunction.” (internal

quotations and citations omitted)).



“4 See 3RC & Co., 2015 V.1. Supreme LEXIS 22, at *22 (When the moving party's “loss is a matter of simple

mathematic calculation, [it] fails to establish irreparable injury....”).

VITA v. VIPA et al.



Case No. ST-97-CV-117

Memorandum Opinion, June 7, 2016

Page 13 of 45.



II. Contempt Sanctions and Law of the Case



On May 9, 2004, VITA filed a post-judgment motion for rule to show cause and monetary

fine, seeking a finding of contempt and sanctions against Defendants, after which the Court

ordered Defendants to show cause why they should not be held in contempt. Specifically, VITA

requested an award of damages for lost business for the period March 10, 1997, when the

preliminary injunction was issued, to June 24, 2005, when the contempt hearing was held. On

September 2, 2005, VITA submitted an estimate of costs and damages to the Court from 1997

through 2005 and requested damages in the amount of “$750,000 or such other sum as the Court

deems just and equitable for the Defendant Virgin Islands Port Authority’s contempt.” In its June

13, 2006, opinion, the court found all Defendants in contempt and assessed a $1,000 per day fine,

retroactive to March 1, 2006, for continued violations, but found it improper to award the $750,000

in damages as a sanction. At the September 7, 2006, show cause hearing, the Court directed that

a $105,000 retroactive fine would be paid to the registry of the Superior Court for Defendants’

failure to follow the Court’s Order, after which the Defendants filed interlocutory appeals to the

Appellate Division of the District Court.



On appeal, the Appellate Division considered: “(1) whether VITA properly renewed its

franchise under Act [No.] 5231; (2) whether the contempt sanctions imposed by the June 13, 2006,

order, and the September 7, 2006, verbal order were civil or criminal in nature; and (3) whether

the evidence adduced at the show cause hearings was sufficient to support the findings of contempt

and sanctions imposed against the appellants.”** Ultimately, the Appellate Division reversed the

Superior Court’s findings of contempt and vacated the imposition of sanctions.



Assuming the validity of the March 10, 1997, preliminary injunction and the August 3,

2005, order. ..the Court finds that VITA failed to show noncompliance with the preliminary



45 E. End Taxi Services, Inc., 49 V.1. at 671.

VITA v. VIPA et al.



Case No. ST-97-CV-117

Memorandum Opinion, June 7, 2016

Page 14 of 45,



injunction and order by clear and convincing evidence. The evidence adduced at the March

1, 2006, hearing showed that East End, Caneel, and the Ritz had, on occasion, transported

passengers from the Cyril E. King Airport. However, VITA failed to present any evidence

to demonstrate that East End, VIPA, Caneel, or the Ritz ever transported or facilitated the

transportation of passengers from the airport who had not prepaid for their transportation

before arriving in St. Thomas. The record does not reveal even one instance where a

particular passenger was transported in violation of the March 10, 1997, preliminary

injunction or the August 3, 2005, order. Therefore, the Superior Court's imposition of civil

contempt constituted an abuse of discretion.”

Notwithstanding the fact that the Appellate Division remanded the issue of franchise renewal to

the Superior Court, the Appellate Division independently considered the issue of sanctions.

Defendants argue that the Appellate Division’s ruling is the law of the case. The Supreme

Court of the Virgin Islands has recognized that “the law-of-the-case doctrine, [applies] ‘when a

court decides upon a rule of law, that decision should continue to govern the same issues in

subsequent stages in the same case.”*’ However, in Hodge v. Bluebeard's Castle, Inc.,*

the Supreme Court found, “[b]ut even if we were to adopt some form of the law-of-the-case

doctrine with regard to this Court's decisions, treating the Appellate Division's remand as the law

of the case would be inappropriate here.’ Nevertheless, Defendants maintain that the Supreme

Court has authority to review and reverse the Appellate Division’s holding, but the Superior Court

does not. The Court agrees. Given the date the current case was commenced in the Superior Court,



it appears the Third Circuit retains certiorari jurisdiction, but this determination is outside the scope



of the jurisdiction of this Court.*°



46 Id. at 684-85.



*” Hodge y. Bluebeard's Castle, Inc., 62 V.1. 671, 688 (V.L. 2015).



8d.



Y id.



°° “But on December 28, 2012 — following the recommendation of the Third Circuit Judicial Council — President

Barack Obama signed H.R. 6116 into law, ending the Third Circuit's certiorari jurisdiction 10 years early. Despite

this, the Third Circuit recently held that the effective date of this legislation — ‘apply[ies] to cases commenced on

or after’ December 28, 2012, Pub. L. No. 112-226, § 3 — referenced the date a case was commenced by filing a

complaint in the Superior Court of the Virgin Islands, as opposed to the date a case is commenced in the Third

VITA vy. VIPA et al.



Case No. ST-97-CV-117

Memorandum Opinion, June 7, 2016

Page 15 of 45.



VITA maintains that the issue of contempt sanctions can be revisited on remand or again

on appeal because the Appellate Division only had jurisdiction to consider criminal contempt

sanctions. The remedy for civil contempt includes compensation for “plaintiff's actual loss or a

defendant’s actual profit resulting from the disobedience.”>' The Appellate Division noted that

“the record below contains scant evidence of the loss to VITA or the profit to East End, VIPA,

Caneel, and the Ritz caused by the contemptuous conduct during the relevant period from March

1, 2006, through June 13, 2006.”°? Even still, “when a contempt order contains both a punitive

and a coercive dimension, [flor purposes of appellate review it will be characterized as a criminal



53 Because the $1,000 per diem fine contempt order was both punitive and



contempt order.

coercive, for purposes of appellate review the contempt order was a final judgment for criminal

contempt and the Appellate Division properly exercised jurisdiction to review the June 13, 2006,

order.** Additionally, “since the retroactive fine of $105,000 was fixed, unconditional, lacked a



sufficient evidentiary basis, and was not made payable to VITA, the Court finds that it was a



criminal contempt sanction.”*>



Circuit seeking a writ of certiorari to the Supreme Court of the Virgin Islands.” /d. at 689 n.10 (citing UIW-SIU ex

rel. Bason v. Gov't of the V.1,, 767 F.3d 193, 206 (3d Cir. 2014), cert. denied 135 S. Ct. 1734 (2015)).



‘' E. End Taxi Services, Inc., 49 V.L. at 675; see also In re Rogers, 56 V.1. 325, 340 (V.I. 2012)(citations omitted)

(“Civil contempt may be coercive or compensatory. If a fine is coercive instead of compensatory, the contemnor

must retain the ability to purge the contempt. Per diem fines typically coerce a contemnor, permitting the contemnor

to “purge” the contempt by conforming to the court's directive.”).



2 FE. End Taxi Services, Inc., 49 V.1. at 676.



% Jd, at 678 (quoting Lamar Financial Corp. v. Adams, 918 F.2d 564, 567 (5th Cir. 1990)).



54 Id. at 678-79.



%9 Id. at 678 (citing United States v, Pozsgai, 999 F.2d 719, 735 (3d Cir. 1993) (holding that a contempt order

labeled by the district court as “civil” was actually a criminal contempt because the order was retroactive, seeking to

penalize previous violations, and was punitive, serving no compensatory purpose)).

VITA v. VIPA etal.



Case No. ST-97-CV-117

Memorandum Opinion, June 7, 2016

Page 16 of 45.



As a result, the Court is unpersuaded by VITA’s argument that the Appellate Division

failed to address the civil sanctions, since the Appellate Division was able to construe the sanctions



1.56



as criminal for purposes of the appeal.°® The Appellate Division clearly reversed



the Superior Court's findings of contempt against East End, VIPA, Caneel, the Ritz, and

Jencks. The Court will also reverse all findings made by the Superior Court in the June 13,

2006, memorandum opinion and order and all verbal findings made during the September

7, 2006, show cause hearing as based on insufficient evidence. The Court will vacate the



$105,000 retroactive contempt fine, the $1,000 per diem fine, and the arrest warrant for

Jencks. *7



Further, the Court recognized that the remand was a “case remand” and not a “record remand,” so

that the Court is not bound by the Appellate Division’s factual view of the record.** However, the

Court finds it unnecessary to differ from the Appellate Division’s ruling and to revisit the issues

of contempt sanctions for the relevant period.



The sanctions having been vacated, VITA is foreclosed from re-litigating any claims for

damages for the period of March 10, 1997, when the Court granted the preliminary injunction, to

June 13, 2006, when the Court issued its Order for contempt sanctions. Defendants assert that

VITA has not sought to file an amended complaint to incorporate post-1997 acts as part of this

case and that “the only period of time in which VITA is not foreclosed by the law of the case from

seeking damages is the period June 14, 2006, to April 30, 2007.”° But, Defendants assert that

VITA is foreclosed from claiming damages for even that period because of judicial estoppel and

alternatively, laches. Further, Defendants argue that, since the preliminary injunction in this case



merely tracks the language of Act No. 5231, the Appellate Division’s finding is necessarily the



8 Id.



7 Id. at 685.



** See VI. Taxi Ass'n v. V.I. Port Auth., 59 V.1. 148, 156 (V.L Super. Ct. 2013) (finding the Court was not bound by

the Appellate Division's statements relating to the validity of the renewal of the franchise agreement.)



°° Defs.’ July 15, 2015, Mot. to Dismiss, p. 12.

VITA v. VIPA et al.



Case No. ST-97-CV-117

Memorandum Opinion, June 7, 2016

Page 17 of 45.



equivalent to a finding that VITA failed to prove any violations of the exclusive franchise that

would entitle VITA to damages.

I. PBI is not a Proper Party



Defendant Plantation Bay, Inc., f/k/a Caneel Bay Resort (“PBI”) seeks dismissal claiming

the injunctive-relief claims against it are moot since it sold Caneel Bay Resort in 2004 and

therefore, should be released from liability. VITA believes that PBI is still responsible for

contempt damages from violation of the preliminary injunction before the sale. Further, VITA

maintains that PBI is a proper party to this litigation and that VITA should be granted discovery

to determine whether PBI and its successor were “merged” or “substantially consolidated” to

conclude if the new entity should or should not be part of any injunctive relief going forward based

on successor liability.



Defendant PBI replies and asserts that successor liability is immaterial to resolving the

motion to dismiss and argues that successor liability only confers liability on the successor

corporation, CBI Acquisitions, Inc., for the predecessor corporation’s torts. Additionally, after the

sale in 2004, VITA stipulated to the fact that Caneel Bay, Inc. sold and transferred all of its assets

to CBI effective May 10, 2004, and that since that time Caneel Bay, Inc. has changed its corporate

name to Plantation Bay, Inc., and has not operated in the Virgin Islands.*! Here, while the Court

agrees with VITA that the issue of successor liability is not firmly established in the Virgin Islands,

the Court need not establish the law in this matter since the Court has determined that all of the

pre-2004 contempt sanctions against PBI have been vacated by the Appellate Division.



Furthermore, the Court denied VITA’s request to amend its Complaint to add CBI as a party to



© PI.’s Aug, 17, 2015, Opposition, p. 30.

*! Defs.’ Aug. 31, 2015, Joint Reply, p. 25; Stipulation dated Sept. 1, 2006.

VITA vy. VIPA et al.



Case No. ST-97-CV-117

Memorandum Opinion, June 7, 2016

Page 18 of 45.



this litigation in 2012. As a result, the Court agrees with Defendants that any discovery requests

related to the sale are irrelevant and all claims against PBI should be dismissed.

IV. Private Right of Action for Damages



Defendants assert that VITA’s Complaint failed to include a cause of action for which

damages could be awarded.” Specifically, Defendants claim there is nothing in Act No. 5231,

which grants VITA a right to pursue a damage remedy for any alleged violation of VITA’s

exclusive franchise by VIPA or any interference with that franchise. While Defendants rely on

Haynes y. Ottley® in support of their argument that “whether a private right of action exists is

whether the text of the statute itself expressly states a private right to file suit,” Haynes is not

binding on this Court. Rather, the Supreme Court of the Virgin Islands “has repeatedly held, it is

presumed that the Virgin Islands Legislature will not create a right without a remedy, and thus

“statutes which are silent as to who has standing should be broadly interpreted to confer

standing.”® Although the Court agrees with Defendants that Act No. 5231 does not explicitly

address the issue of remedies, this in itself does not foreclose the right of VITA to pursue damages.



Vv. Judicial Estoppel



There are two issues before the Court regarding VITA’s ability to pursue damages: first,



whether VITA should be judicially estopped from making a claim for damages based on its initial



representation that damages were incalculable, and second, whether VITA should be allowed to



© Defs.’ Nov. 14, 2014, Brief in Response to the Order of Oct. 31, 2014, p. 2.



63 No. 2014-70, 2014 U.S. Dist. LEXIS 154161 (D.V.I. Oct. 28, 2014)(other citations omitted).



64 Td. at *11.



°5 Mapp v. Fawkes, 61 V.1, 521, 534 n. 11 (V.1. 2014) (quoting Bryan v. Fawkes, 61 V.1. 201, 223, [WL], at

*9 n.12 (V.I. 2014) (other citations omitted); see also Haynes v. Ortley, 61 V.1. 547, 576 (V.L 2014) (“In

reaching this decision, we express no opinion as to what statutory or common law remedy is appropriate;

while Haynes invoked 5 V.I.C. § 80 in his amended complaint, he also stated that the Superior Court

possessed jurisdiction under 4 V.1.C. § 76, which generally grants the Superior Court jurisdiction over civil

disputes. Thus, Haynes could, in addition to or instead of pleading a claim under 5 V.I.C. § 80, assert other

equitable claims under 4 V.LC. § 76.”).

VITA vy. VIPA et al.



Case No. ST-97-CV-117

Memorandum Opinion, June 7, 2016

Page 19 of 45,



pursue damages at law since it received equitable relief. When VITA moved for a preliminary

injunction in 1997, VITA claimed that its monetary damages were incalculable. In the Court’s

March 10, 1997, Order granting VITA a preliminary injunction, the Court found irreparable harm

and concluded “[t]he Taxi Association established that, due to the infringement of its exclusive

franchise by the defendants and others, it and its members daily suffer incalculable economic loss.”

Specifically the Court recognized “[w]hile the Plaintiff has alleged that it may be entitled to

damages, the Court questions whether the Plaintiff could establish to any degree of certainty the

revenue lost by it and its approximately four hundred (400) members due to the direct competition

of innumerable others who are allegedly soliciting fares and transporting persons, on a daily and

continuing basis, from the Cyril E. King Airport.”



On February 6, 2006, VITA filed a Motion for a Temporary Restraining Order, Contempt

Finding and Enforcement of This Court’s Orders, wherein VITA outlined “[flacts [s]upporting the

[violation of this Court’s March 10, 1997 Order and this Court’s August 3, 2005 Order.’ In so

doing, VITA specifically argued that “[d]espite enlisting the assistance of a consultant to calculate

its compensatory damages, compensatory damages may not be accurately and completely

calculated due to insufficient data, including but not limited to, vouchers, passenger lists and

invoices[,]”®* a verbatim quote of the Affidavit of then President of VITA, Winston Parker, which

was attached as an exhibit in support of VITA’s motion.® As a result, VITA argued that



“Defendants, in concert with each other, have made if [sic] difficult, if not impossible, for VITA



66 Td,



6? VITA’s Mot. for a Temporary Restraining Order, Contempt Finding and Enforcement of this Court’s Orders, p. 3.

“8 Jd, at 6 19 (citing Parker Aff. § 20, attached as Exhibit E) (attesting that “[d]espite enlisting the assistance of a

consultant to calculate its compensatory damages, compensatory damages may not be accurately and completely

calculated due to insufficient data, including but not limited to, vouchers, passenger lists and invoices”).



69 Id. at Ex. EJ 20.

VITA vy. VIPA et al.



Case No. ST-97-CV-117

Memorandum Opinion, June 7, 2016

Page 20 of 45.



to calculate its compensatory damages” and that, while damages awarded for civil contempt are

“limited to the actual loss suffered by the aggrieved party . . . perfect mathematical certainty is not

required . . . [and] Defendants should not be permitted to benefit by the uncertainty it [sic] has

caused,””?



In ruling on VITA’s February 6, 2006, Motion, the Court denied VITA’s request for a

Temporary Restraining Order, finding the factors did not weigh in favor of the requested injunctive

relief and noting that VITA “already has obtained a preliminary injunction against Defendants.”””!

Specifically, the Court found that a “risk” of irreparable harm was not enough to warrant the

requested injunctive relief in that, for harm to be irreparable, it “must be of a peculiar nature, so

that compensation in money cannot atone for it.”’”? The Court concluded that VITA did not

demonstrate the requisite irreparable harm, reasoning that VITA “has an adequate remedy at law .

. . [because t]he crux of [VITA’s] grievances is the economic loss it has suffered from Defendants’

and non-parties’ violations ... As monetary loss is the main point of contention, there exists an

adequate remedy at law. As such the harm done to Plaintiff is not irreparable.” Importantly, the

Court also recognized that VITA “cannot seek to get through the back door by contempt

proceeding, what it is unable to get in a direct action for damages. The established rule in contempt

proceedings is that any damages awarded may be awarded only to a party in the proceeding,”



In its June 13, 2006, Memorandum Opinion, wherein the Court found Defendants in

contempt for violating the Preliminary Injunction, the Court stated “Plaintiff sought an award of



$750,000.00 in damages due to lost business . . . [and wJhile this amount appears to be conservative



7 Td. at 10 (internal quotation marks omitted) (citations omitted).



| See generally Feb. 14, 2006, Order, p. 4.



? Id. (citing ECRI v. McGraw-Hill, Inc., 809 F.2d 223, 226 (3d Cir. 1987)).



® Id.



™ Def. Caneel's Feb. 28, 2006, Response to Pl.’s Estimate of Costs and Damages, at 4.

VITA y. VIPA et al.



Case No. ST-97-CV-117

Memorandum Opinion, June 7, 2016

Page 21 of 45.



given the period of the violation involved i.e. March 10, 1997 to June 24, 2005, it would be

improper to award such damages as a sanction for Defendants’ conduct while trial of the matter is

pending.””> Nevertheless, the Appellate Division of the District Court noted that “the record below

contains scant evidence of the loss to VITA or the profit to East End, VIPA, Caneel, and the Ritz

caused by the contemptuous conduct during the relevant period from March 1, 2006, through June

13, 2006.” Additionally, the Court noted,



[both figures cited by VITA suffer from the same fundamental flaw. VITA has failed to



provide any evidence or assertions regarding what portion of the $ 1,105 or $ 2,500



figures represented the actual profit received by the Ritz or Caneel. Without even a rough



breakdown of new and gross revenues for taxi fares, there is an insufficient evidentiary

basis for the imposition of compensatory fines. '’

Adding to the confusion surrounding VITA’s representations to the Court for calculable damages,

the Court has also made conflicting rulings on VITA’s entitlement to damages at trial in connection

with injunctive relief. VITA has also changed positions, first stating damages are incalculable,

and now maintaining that VITA can’t calculate the majority of its damages.



To the extent VITA now wishes to prosecute a claim for money damages, Defendants

believe VITA asserts that claim in bad faith because, contrary to VITA’s requests for injunctive

relief, VITA alleges “the exact opposite- that damages are awardable and calculable.””* Further,

Defendants rely on Murray v. Silberstein,” a Third Circuit case in which the court applied judicial

estoppel to prevent a plaintiff from seeking damages after previously obtaining a preliminary



injunction based on the argument that damages, including back pay, were not available.



Defendants assert that VITA should be judicially estopped from asserting any claims for



75 EB. End Taxi Services, Inc., 49 V.1, at 676 (quoting June 13, 2006, Memorandum Opinion, p. 21).

%6 Id. at 676.



77 Id. at 677.



78 Defs.’ July 15, 2015, Mot. to Dismiss, p. 14.



9 882 F.2d 61, 66 (3d Cir. 1989).

VITA v. VIPA et al.



Case No. ST-97-CV-117

Memorandum Opinion, June 7, 2016

Page 22 of 45,



compensatory damages, including any outstanding claims from the Complaint, damages based on

Act No. 5231, and damages for the period June 14, 2006, to April 30, 2007.



The Supreme Court of the Virgin Islands has recognized judicial estoppel as “estoppel that

prevents a party from contradicting previous declarations made during the same or a later

proceeding if the change in position would adversely affect the proceeding or constitute a fraud on

the court.”*° Although the Supreme Court has defined the doctrine in at least one opinion,! the

Supreme Court has yet to explicitly adopt the doctrine.*? As a result, to determine the appropriate

standard for this jurisdiction, the Court must examine the following three-factors known as a Banks

analysis: first, which common law rule Virgin Islands courts have applied in the past; second,

identify the rule adopted by a majority of courts of other jurisdictions; and third, most importantly,

determine which common law rule is soundest for the Virgin Islands.*3



Courts in the Virgin Islands have recognized the doctrine of judicial estoppel, but have

generally not analyzed the factors to be considered when applying the doctrine. For example, in

Benjamin v. Coral World VI, Inc.,®° the Court defined judicial estoppel as “‘a fact-specific,

equitable doctrine, applied at courts' discretion’ that ‘rests on the basic notion that, absent any good



explanation, a party should not be allowed to gain an advantage by litigation on one theory, and



* See Fontaine v. People of the V.L, 56 V.1. 571, 583 n.7 (V.1. 2012) (citing Boston v. Virgin Islands, 46 V.1. 520,

526 (V.I. 2005) (quoting Black's Law Dictionary 57! (7th ed. 1999)).



3 | td.



82 Recently, the Supreme Court has implied that the Superior Court should give greater weight to its decisions in

footnotes. However, while the Supreme Court simply defined judicial estoppel in a footnote, rather than taking a

position, the Superior Court finds a Banks analysis to be necessary here. See Ventura v. People of the V.1., No. 2014-

0021, 2016 V.I. Supreme LEXIS 15, at *37-39 (V.I. May 4, 2016) (““Instead, it should have given greater weight to

our decision in Joseph, in which we held that Super. Ct. R. 135 is a claims processing rule.” (citing Joseph v. People

of the V.1., 60 V.1. 338, 347 n.7 (V.I. 2013)).



*} Connor, 60 V.I. at 605; 3RC & Co., 2015 V.I. Supreme LEXIS 22, at *8.



* See e.g., Walters vy, Walters, 60 V.1. 768, 775 n.7 (V.I. 2014) (“Although ‘unsworn representations of an attorney

are not evidence,’ an attorney's client may nevertheless be bound by such statements under the doctrines of judicial

admissions and judicial estoppel.” (internal citation and other citations omitted)); Fontaine, 56 V.1. at 583 n. 7;

Benjamin v. Coral World VI, Inc., 2014 V.1. LEXIS 35, *7-8 (V.1. Super. Ct., June 12, 2014).



85 2014 V.I. LEXIS 35, *7-8 (V.I. Super. Ct., June 12, 2014).

VITA v. VIPA et al.



Case No. ST-97-CV-117

Memorandum Opinion, June 7, 2016

Page 23 of 45.



then seek an inconsistent advantage by pursuing an incompatible theory.’”® Further, “[o]nce the

Court determines that positions are irreconcilably inconsistent, it must also find that the party's

position was changed in bad faith and that there is no lesser sanction that would adequately remedy

the damage done by the misconduct.”*” Additionally in Walters v. Walters,*® the Supreme Court

recognized that, “[a]lthough ‘unswom representations of an attorney are not evidence,’ an

attorney's client may nevertheless be bound by such statements under the doctrines

of judicial admissions and judicial estoppel.”®°



Turning to the second factor, the majority of jurisdictions have adopted judicial estoppel

in some form.” Recently, the Supreme Court of the United States reviewed the doctrine in New



' recognizing that it is a judicially created equitable doctrine and that “other



Hampshire v. Maine,’

courts have uniformly recognized that its purpose is ‘to protect the integrity of the judicial process’



by ‘prohibiting parties from deliberately changing positions according to the exigencies of the



%© Id. (citing Semper v. Gomez, 747 F.3d 229, 247 (3d Cir. 2014) (on appeal from D.V.I1.) (quoting Jn re Kane, 628

F.3d 631, 638 (3d Cir. 2010))).



87 Id. at *7-8 (citing Prosser v. Carroll (In re Prosser), 534 F. App'x 126, 130 (3d Cir. 2013) (quoting Jn re Kane,

628 F.3d at 638).



88 60 V.I. 768, 775 n. 7 (V.1. 2014).



* Id. (internal citation omitted). While the Supreme Court claims to have recognized the doctrine of judicial

admission, the Supreme Court has not performed a Banks analysis on this doctrine. See Arlington Funding Services,

Inc. v. Geigel, 51 V.1. 118, 133 (V.L. 2009) overruled in part on other grounds by Benjamin v. AIG Ins. Co. of P.R.,

56 V.I. 558, 564 (V.1. 2012).



” See e.g., Gottlieb v. Kest, 141 Cal. App. 4th 110, 131, 46 Cal. Rptr. 3d 7, 19 (2006); Dougan v. Dougan, 301 Conn.

361, 372, 21 A.3d 791, 798 (2011) (“We have recently decided that the doctrine of judicial estoppel may be invoked

under certain circumstances.” (citation omitted); Ex parte Jackson Hosp. & Clinic, Inc., 167 So. 3d 324, 332 (Ala.

2014) (“this Court “embrace[d] the factors set forth in New Hampshire v, Maine, 532 US. 742, 121 S.Ct. 1808, 149

L.Ed.2d 968 (2001), and join{ed] the mainstream of jurisprudence in dealing with the doctrine of judicial estoppel.”

(citation omitted)); Lone Star Engine Installation Ctr., Inc. v. Gonzales, No. 05-14-0161 6-CV, 2016 Tex. App. LEXIS

5006, at *19 (App. May 11, 2016) (Rather, the trial court should determine if applying judicial estoppel is appropriate

in light of the specific facts of each case and the doctrine's purpose of protecting the integrity of the judicial process.”

(citation omitted)); Arkison v. Ethan Allen, Inc., 160 Wash. 2d 535, 538-39, 160 P.3d 13, 15 (2007) (“The doctrine

seeks to preserve respect for judicial proceedings, and to avoid inconsistency, duplicity, and ... waste of time.”

(internal quotations and citations omitted)).



9! $32 U.S. 742, 750, 121 S. Ct. 1808, 1815 (2001).

VITA v. VIPA et al.



Case No. ST-97-CV-I17

Memorandum Opinion, June 7, 2016

Page 24 of 45.



moment.”””? The Supreme Court first applied the doctrine over a hundred years ago,”’ while state

courts have utilized estoppel for even longer.** The doctrine is also known as preclusion of

inconsistent positions,”> fact preclusion, judicial preclusion, or estoppel in pais. Nevertheless

estoppel is not uniformly applied, and courts consider different factors. In New Hampshire v.

Maine, the Supreme Court recognized three primary factors utilized by federal courts including,

whether “a party's later position is ‘clearly inconsistent’ with its earlier position”, “whether the

party has succeeded in persuading a court to accept that party's earlier position”’’, and “whether

the party seeking to assert an inconsistent position would derive an unfair advantage or impose an

unfair detriment on the opposing party if not estopped.”



However, other approaches used by courts have been categorized as a “‘success test”, ‘“‘a

fast and loose test”, or complete rejection of the doctrine. The success test is defined as "where a

party assumes a certain position in a legal proceeding, and succeeds in maintaining that position,



he may not thereafter, simply because his interests have changed, assume a contrary position.”””



® Id. at 750 (internal citations and other citations omitted) (“‘Where a party assumes a certain position in a legal

proceeding, and succeeds in maintaining that position, he may not thereafter, simply because his interests have

changed, assume a contrary position, especially if it be to the prejudice of the party who has acquiesced in the position

formerly taken by him.’ Davis vy. Wakelee, 156 U.S. 680, 689, 39 L. Ed. 578, 15 S. Ct. 555 (1895). This rule, known

as judicial estoppel, ‘generally prevents a party from prevailing in one phase of a case on an argument and then relying

on a contradictory argument to prevail in another phase.’ Pegram v. Herdrich, 530 U.S. 211, 227, n. 8, 147 L. Ed. 2d

164, 120 S, Ct. 2143 (2000).”).



” Davis, 156 U.S. at 689. But see Edwards v. Aetna Life Ins. Co., 690 F.2d 595, 598 (CA6 1982) (citing Davis as an

example of equitable estoppel rather than judicial estoppel since Davis does not use the term judicial estoppel).



See e.g., Succession of Harris, 39 La. Ann. 443, 445, 2 So. 39, 40-41 (1887) (“The general doctrine that a party is

bound by his judicial declarations and is estopped from subsequently denying them is well established and supported

by the numerous authorities cited by the leamed counsel for opponents.”); Fogler v, Clark, 80 Me. 237, 242, 14 A.

9, 11 (1888).



°’ Fontaine, 56 V.1. at 583 n.7 (citing Boston, 46 V.I. at 526).



% Id. (citing United States v. Hook, 195 F.3d 299, 306 (CA7 1999); Browning Mfg. v. Mims (In re Coastal Plains,

Inc.), 179 F.3d 197, 206 (CAS 1999); Hossaini y. Western Mo. Medical Center, 140 F.3d 1140, 1143 (CA8 1998);

Maharaj vy. Bankamerica Corp., 128 F.3d 94, 98 (CA2 1997).



7 Id. (citing Edwards v. Aetna Life Ins. Co., 690 F.2d 595, 598 (CA6 1982)).



8 Id, (citing see Davis, 156 U.S. at 689: Philadelphia, W., & B. R. Co. v. Howard, 54 U.S. 307, 13 HOW 307, 335-

337, 14 L. Ed. 157 (1852); Scarano v. Central R. Co., 203 F.2d 510, 513 (CA3 1953) (judicial estoppel forbids use

of “intentional self-contradiction . . . as a means of obtaining unfair advantage”); see also 18 Wright § 4477, p. 782.

° Davis, 156 U.S. at 689.

VITA v. VIPA et al.



Case No. ST-97-CV-117

Memorandum Opinion, June 7, 2016

Page 25 of 45.



Generally this test requires a showing of a benefit to the party asserting an inconsistent position

from the prior proceeding. Without a benefit to a party, courts find it unnecessary to apply judicial

estoppel for inconsistent positions taken by a party. Alternatively, the fast and loose test does not

require the success of a party’s inconsistent position, but instead focuses on “whether a litigant is

intentionally contradicting earlier statements in order to obtain an unfair advantage in a judicial

forum. Additionally, a court may require that the litigant be acting in bad faith.”!™



Generally courts utilizing the fast and loose test have rejected a formulaic approach to

applying judicial estoppel, but also limit the doctrine’s application. For example, the Third Circuit

rejects the success test’! and considers judicial estoppel to be “an extraordinary-remedy to be

invoked when a party's inconsistent behavior will otherwise result in a miscarriage of justice.”!?

Lastly, some courts reject the use of judicial estoppel. Arguments against judicial estoppel include

the belief that it limits a party’s pleading right in terms of the ability to plead in the alternative,

while other courts have found that the doctrine prevents the determination of cases on their merits,



specifically when the factual circumstances have changed.!



' See Ashley S. Deeks, Comment, Raising the Cost of Lying: Rethinking Erie for Judicial Estoppel, 64 U. CHI. L.

REV. 873, 878-879 (1997) (citing Hicks v Andrew Johnson Bank, 1990 Tenn App LEXIS 181, *6-7 (party need not

prevail in first suit before judicial estoppel will be applied); North Jersey Savings and Loan v Fidelity and Deposit

Co, 283 NJ Super 56, 660 A2d 1287, 1299 (1993) (estopping litigant from changing a position that was raised but not

decided in the first litigation); Ziwemer v Production Credit Assn of Midlands, 792 P2d 245, 247 n 3 (Wyo 1990)

(Judicial estoppel applies whether the position first assumed has been successful or not.); Amfac Mechanical Supply

Co v Federer, 645 P2d 73, 79 (Wyo 1982) (applying judicial estoppel without inquiring into success of earlier position

because litigant had "blown hot and cold")).



'\ Ryan Operations G.P. v. Santiam-Midwest Lumber Co., 81 F.3d 355, 365 (3d Cir. 1996) (“We begin by

determining whether as a general rule a party must have benefitted from her prior position in order to be judicially

estopped from subsequently asserting an inconsistent one. We readily conclude that the doctrine of judicial



estoppel in this circuit contains no such requirement.”).



' Fontaine, 56 V.I. at 583 n.7 (quoting Ryan Operations G.P., 81 F.3d at 365) (citing Boston, 46 V.I. at 526).



'® Deeks, supra note 100, at 878-879 (collecting cases) (citing see e.g., Southern Pacific Transportation Co v ICC,

69 F3d 583, 591 n 3 (DC Cir. 1995) (“This court, however, has firmly disapproved of judicial estoppel in prior

cases.”); Brodie v General Chemical Corp, 1996 US App LEXIS 418, *11 (10th Cir.) (unpublished opinion) (“This

court does not recognize the principle of judicial estoppel.”)).

VITA v. VIPA et al.



Case No. ST-97-CV-117

Memorandum Opinion, June 7, 2016

Page 26 of 45.



Turning to the most important factor, the soundest rule for the Virgin Islands, this Court

concludes that adopting the doctrine of judicial estoppel is a necessary addition to the common

law of this jurisdiction. Not only is the doctrine important for instances where a party changes

positions during the pendency of a single case, but also when the Court may be faced with difficult

questions involving claims by a party in separate proceedings. Further, the Court finds the doctrine

necessary to prevent fraud against the Court and to preserve the Court’s function of truth seeking

in its administration of justice. After considering the various factors and tests utilized by other

jurisdictions, the Court finds the “success test” relies too heavily on a party’s success with their

inconsistent position rather than considering the harm caused by the fraud to the Court. However,

the Court also is not convinced that the “fast and loose” test is appropriate for this jurisdiction if it

requires a separate analysis of whether the party is changing their position in bad faith. While the

Court agrees with the definition of judicial estoppel cited by the Supreme Court of the Virgin



Islands!



, and generally agrees with this Courts previous reliance on the factors considered by the

Third Circuit’, considering the best rule for the Virgin Islands, the Court now finds it unnecessary

to consider whether the party changed its position in bad faith. Instead, the Court recognizes the

importance of a determination involving whether a party is in fact asserting inconsistent positions,

which then prejudices the opposing party in the proceeding before the Court. Additionally, the

Court believes that it is necessary to leave some discretion with the Court, rather than adopt a strict

multi-factor test, so that judicial estoppel may be applied on a case by case basis.



Applying these factors here, the Court will first consider if VITA presented inconsistent



positions to the Court. VITA responds that it did not commit fraud by arguing that it could never



4 See Fontaine, 56 V.1. at 583 n.7 (citing Boston, 46 V.I. at $26).

15 See Benjamin, 2014 V.L. LEXIS 35, *7-8 (citing Jn re Prosser, 534 F. App'x 126, at 130) (quoting /n re Kane,

628 F.3d at 638) (relying on the Third Circuit).

VITA v. VIPA et al.



Case No. ST-97-CV-117

Memorandum Opinion, June 7, 2016

Page 27 of 45.



prove the full extent of its economic loss, believing that it can never obtain complete proof of each

time Defendants violated the Act because of the sheer number of violations and that VITA should

not be precluded from recovering contempt damages for the losses it can prove. In the Verified

Complaint dated February 11, 1997, Plaintiff requested “damages for all revenues and fares lost

to unauthorized and illegal operators who openly violate the terms of Plaintiff's exclusive

franchise” and “damages to be proven at trial.” In Count I, Plaintiff alleged there was “no adequate

remedy at law in that V.I.P.A. has advised Plaintiff that it lacks the ability to enforce paragraph 1

(e ) of the Act No. 5231,”' and under Count IV, “{t]he pick up and transportation of such

passengers by non VITA drivers is a violation of Plaintiff's exclusive franchise, all to its damage

and injury.”!°’ Under Count V, Plaintiff claims “[tJhe conduct of the defendants including the

VIPA has resulted in loss of earnings and fares reviews [sic] to the Plaintiff and its members.”!

VITA further asserts, “Plaintiff is entitled to damages for all revenues and fares lost to

unauthorized and illegal operators who openly violate the terms of Plaintiff's exclusive



77109 and judgment against the Defendants for damages to be proven at trial.!!°



franchise



In VITA’s Opposition to the Motion to Dismiss, it now seeks damages for: “(1) lost profits

based on Defendants[’] use of improper vouchers and VIPA’s failure to enforce the franchise

agreement; (2) profits Defendants made using improper vouchers; and (3) damages for the



expenses VITA incurred to maintain its presence at the airport and the fee it paid to VIPA for the



right to an exclusive franchise during any period in which Defendants defeated its right to maintain



106 P}.’s Feb. 12, 1997, Compl. 14.

7 Id at 931



108 Td. at 435



109 Id. at 437



0 Yd. at 7.

VITA y. VIPA et al.



Case No. ST-97-CV-117

Memorandum Opinion, June 7, 2016

Page 28 of 45.



an exclusive franchise by violating the injunction.”''' As explained below, VITA only has the

ability to bring a claim for damages on behalf of the association and not any individual taxi drivers.

Assuming, arguendo, that VITA could seek damages on behalf of individual taxi driver members,

VITA has failed to prosecute those claims. On April 26, 2006, VITA filed a motion to amend its

Complaint and to join the V.I. Taxi Driver’s April 21, 2006, Motion to Intervene as Plaintiffs.!!2

By VITA’s own concession, it recognized in its Reply to Defendants’ Oppositions to VITA’s



Motion to Intervene and Amend the Complaint that:



[M]any of the individual Taxi Driver have been working at the airport over the last

ten years and lost significant income- the bulk of the damages lie with the individual

drivers. On the other hand, their interest and [VITA’s] interests are likely to diverge

... [VITA’s] interest is driven towards protecting its statutory and contractual rights

in the future. The individual Taxi Drivers, contrary to [VITA], do not have a

perpetual existence- some have retired, others are planning retirement, some gave

up and changed occupations. The individual Taxi Drivers’ primary interest is to

collect the monies illegally obtained by the Defendants that are [sic] rightfully

belong to them.”!?



On February 2, 2012, the Court denied Plaintiff's motion to amend its Complaint for

Plaintiff's failure to comply with LRCi 15.1. As of the date of this opinion, Plaintiff has failed to

seek leave to file an amended complaint in compliance with the rules. Notably, in the Court’s June

15, 2015, Opinion, the Court addressed Defendants’ claim, asserted in response to the Court’s

October 31, 2014, Order, that VITA lacks associational standing to bring an action for damages

on behalf of its members. The Court determined that Defendants failed to raise the issue of



associational standing in a timely manner and that the issue had therefore been waived.



''' PI.’s Aug. 17, 2015, Opposition, p. 34.

1? Defs.’ July 15, 2015, Mot. to Dismiss, Ex. 16, Ex. 17.

''3 Pf.'s June 23, 2006, Reply to Mot. to Intervene, pp. 10-11.

VITA y, VIPA et al.



Case No. ST-97-CV-117

Memorandum Opinion, June 7, 2016

Page 29 of 45.



Nevertheless, Plaintiff still did not seek to file any claim on behalf of the members. As a result,

any claims for damages on behalf of the individual members of the Taxi Association are dismissed.



Defendants believe that VITA should be judicially estopped from pursuing damages

because VITA has presented irreconcilably inconsistent theories of recovery. “In contrast to legal

remedies like money damages, injunctive relief is an equitable remedy. [C]ourts of equity

developed these remedies in order to provide relief that was unavailable in courts of law, [i]t is

axiomatic that equitable relief is only available where there is no adequate remedy at law.”!!4

While the Court recognizes that VITA clearly stated a cause of action for damages in its Complaint,

VITA has since waived its right to pursue those damages, based on its allegations that the damages

were incalculable made to receive injunctive relief. Additionally, by VITA’s own admission, it

recognized that the bulk of any damages are to individual taxi drivers, which appears to encompass

the remainder of damages outside of the scope of those alleged for injunctive relief and determined

to be incalculable.



As a result, the Court finds that VITA presented inconsistent theories in making its initial

representation that damages were incalculable and then asserting that some damages are now in

fact calculable. Further, the Court finds Defendants would be prejudiced if VITA was allowed to

pursue damages, including discovery of damages. Therefore, VITA is judicially estopped from

pursuing damages that it previously stated were incalculable and is foreclosed from seeking



damages based on its award of equitable relief.



"4 3RC & Co., 2015 V.1. Supreme LEXIS 22, at *11 (internal quotations and other citations omitted).

VITA v. VIPA et al.



Case No. ST-97-CV-117

Memorandum Opinion, June 7, 2016

Page 30 of 45.



VI. ‘Failure to Prosecute



Even though the Court finds that VITA is judicially estopped from asserting a claim for

damages, the Court will consider Defendants’ alternative basis for requested dismissal, failure to

prosecute. Typically a motion to dismiss for failure to prosecute is governed by Fed. R. Civ. P.

41(b), which states “[i]f the plaintiff fails to prosecute or to comply with these rules or a court

order, a defendant may move to dismiss the action or any claim against it.”''5 However, the

sanction of dismissing a case under Fed. R. Civ. P. 41(b) is not available until the Court expressly

weighs and considers each of the six factors articulated by the Third Circuit in Poulis v. State Farm

Fire and Cas. Co.''® The Supreme Court of the Virgin Islands adopted the six Poulis factors in



Halliday v. Footlocker Specialty, Inc.,'"" which are as follows:



(1} the extent of the party's personal responsibility; (2) the prejudice to the

adversary caused by the failure to meet scheduling orders and respond to discovery;

(3) a history of dilatoriness; (4) whether the conduct of the party or the attorney was

willful or in bad faith; (5) the effectiveness of sanctions other than dismissal, which

entails an analysis of alternative sanctions; and (6) the meritoriousness of the claim

or defense.””!'8



“Although a court must explicitly address and balance each of these factors in its analysis, not all

of the six (6) factors need to be satisfied” or weigh in favor of dismissal for dismissal to be



warranted”! '9



"'5 Tn the absence of a local statute, case law, or Superior Court of the Virgin Islands rule addressing the issue

adequately, the Federal Rules of Civil Procedure are applicable to the Superior Court by V.I. Super, Ct. R. 7.

Dismissal under Fed. R. Civ. R. 41(b) is considered an adjudication on the merits.



''6 Poulis v, State Farm Fire and Cas. Co., 747 F.2d 863, 868 (3d Cir. 1984).



7 53 VI. 505 (V.I. 2010)



"8 fd. at 510 (citing Poulis, 747 F.2d at 868).



'!9 Pollara v. Chateau St. Croix, LLC, 58 V.1. 455, 469 (V.1. 2013) (internal citation and citations omitted); Molloy v.

Indep. Blue Cross, 56 V.1. 155, 186 (V.I. 2012) (citing Halliday, 53 V.1. at 511).

VITA y. VIPA et al.



Case No. ST-97-CV-117

Memorandum Opinion, June 7, 2016

Page 31 of 45.



A. The extent of the party's personal responsibility.



In analyzing the first factor in Poufis, the Third Circuit distinguished the instances in which

plaintiff's counsel is responsible for the dilatory conduct from those where “there had been

‘flagrant bad faith’ on the part of the [client] as well as ‘callous disregard’ by their counsel of their

responsibilities.”!°” Here, Defendants allege VITA is solely responsible for the failure to prosecute

this matter in a timely manner and assert Plaintiff has benefitted from the “seven (7) year gap in

prosecution [from 1997 to 2004], as VITA has essentially granted itself a de facto permanent

injunction via its failure to prosecute.”'*' Further, Defendants point to the fact that VITA failed

to comply with the Court’s October 31, 2014, Order by not filing a brief before November 14,

2014, and subsequently failing to file a brief at all, leading the Court to issue its Order on June 15,

2015, without VITA’s response. Previously, the Court has found in a case pending for more than

six years that “[a]lthough it would be reasonable for [the client] to rely to some extent on her

counsel's diligence and dedication to move the matter forward, at some point the responsibility

becomes that of the client's [sic] to ensure that the case is progressing.”'? Here, Defendants

contend that between 1997 and 2004, when the case remained pending without action, VITA was

responsible for moving the matter forward, claiming that courts are unwilling to assume that

attorneys refuse to prosecute their client’s cases, '23



VITA responds that VITA was not responsible for moving for a permanent injunction,



since the Court did not issue a scheduling order requiring it to do so within a certain length of time,



2° Poulis, 747 F.2d at 868 (citing NHL v. Metro. Hockey Club, 427 U.S. 639, 640-641 (1976)) (The United States

Supreme Court upheld the sanction of dismissal of the case under Fed. R. Civ. P. 37 for plaintiffs’ failure to provide

complete answers to interrogatories in the face of “several admonitions by the Court . . . [and] warnings that their

failure to provide certain information could result in the imposition of [this] sanction”).



'*! Defs.' July 15, 2015, Mot. to Dismiss, p. 17.



2 Sanchez v. Hughes, 2011 V.1. LEXIS 16, *4 (V.1. Super. Ct., Mar. 21, 2011).



123 fd at *7,

VITA v. VIPA etal.



Case No. ST-97-CV-117

Memorandum Opinion, June 7, 2016

Page 32 of 45.



and that the record in this case shows that VITA has in fact been prosecuting the damages-for-

contempt phase of this case since it filed contempt motions in 2004. Further, VITA claims

Defendants are responsible for any delay because Defendants refused to substantively answer

discovery requests and initiated an appeal that effectively stayed the case until 2013, benefiting

Defendants. However, VITA fails to address the seven year time gap or their failure to respond

from November 2014 until their opposition to this motion on August 15, 2015.



Defendants reply by re-asserting that the burden to move the case forward was on VITA,

regardless of the absence of a scheduling order, and argues that VITA’s failure to seek a scheduling

order is evidence of its dilatory conduct and its tactical decision to treat the preliminary injunction

as a permanent injunction. Further, Defendants respond that VITA did not request discovery until

mid-2006. Defendants defend any stay based on their appeal, primarily from 2006 through 2008,

noting its success in overturning the contempt sanctions. Instead, Defendants highlight the fact

that it was VITA that filed a “meritless appeal of clearly interlocutory order from the Appellate

Division” to the Third Circuit, causing an additional three year delay from 2008 to 2011.



The Court is unconvinced by VITA’s attempt to blame the delay in this case on Defendants’

appeal. Moreover, VITA waited until 2006 to even attempt to file an amended complaint and to

add the individual taxi drivers and since then has had numerous opportunities to seek leave to file

an amended complaint based on violations of the Act that could justify relief, but has failed to do

so. Unlike the circumstances in Poulis, which “guides under the assumption that a plaintiff wants

to pursue his claim,” VITA has failed to timely pursue its case.'*4 Although the Court recognizes



that the responsibility for failing to prosecute does not rest entirely with VITA, as it is unclear



'4 Harvey v. Rawlins d/b/a Player's Club and Diamond Crest, LTD, Case No. SX-07-CV-005 (V.L. Super. Ct., Nov.

5, 2015).

VITA v. VIPA et al.



Case No. ST-97-CV-117

Memorandum Opinion, June 7, 2016

Page 33 of 45.



what advice was given by counsel, the Court finds this factor nonetheless weighs in favor of

dismissal, given these circumstances.



B. The prejudice to the adversary.



Defendants assert they have been severely prejudiced by VITA’s failure to prosecute.

Determining prejudice, in terms of a motion to dismiss on that basis, means evaluating the “burden

imposed by impeding a party’s ability to prepare effectively a full and complete trial strategy”

rather than irremediable harm. '?° The burden is generally “demonstrated by either increased

expense to the opposing party arising from the extra costs associated with filings responding to

dilatory behavior or increased difficulty in the opposing parties’ ability to present or defend their

claim(s) due to the improper behavior.”'* Additionally, delays in the discovery process can

“impede[] a defendant's ability to prepare effectively a full and complete trial strategy.”!2”



This action has been pending since 1997, and Defendants allege that, due to the significant

delay caused by VITA’s failure to prosecute, the Defendants are facing the prospect of defending

claims, with limited evidence, for which the factual basis occurred over eighteen (18) years ago

with limited evidence. Furthermore, Defendants claim that they have been prejudiced because

they have been forced to operate their businesses under a cloud of uncertainty for the past eighteen

(18) years. Further, Defendants state they have been forced to defend meritless accusations of

violations of the preliminary injunction and point to the fact that VITA has not alleged a single

violation of the preliminary injunction since the Appellate Division issued its Order in 2008.



Comparing the case to a similar District Court action, Defendants express concern over the



25 Watts v. Two Plus Two, Inc., 54 V.1. 286, 290-91 (V.I1. 2010) (quoting Majestic Const., Inc. v. JCB int'l, Inc., 48

V.I. 437, 443 (D.V.L App. Div. 2006)) (internal quotations omitted).



'26 Molloy, 56 V.I. at 189 (citations omitted); sce also Caravelle Land 1, LLC yv. USVI Mgmt. Corp., 2014 V.I. LEXIS

55, *7-8 (V.L. Super. Ct. 2014) (citing Scarborough v. Eubanks, 747 F.2d 871, 876 (3d Cir. 1984)).



'27 Watts, 54 V.1. at 292 (citing Carter y. Ryobi Techtronics, 250 F.R.D. 223, 229 (E.D. Pa. 2008)).

VITA v. VIPA et al.



Case No. ST-97-CV-117

Memorandum Opinion, June 7, 2016

Page 34 of 45.



potential lack of evidence resulting from the poor record keeping of VITA, the possibility that

relevant witnesses are now deceased or their memories have faded, and the likelihood that relevant

documents have gone missing. '*°



VITA notes that Defendants are unable to point to any violations of a scheduling order or

any discovery requests outstanding because the case was stayed. Instead, VITA claims that it has

been prejudiced by the delay caused by the appeals because Defendants failed to respond to

discovery requests since before the stay. While Defendants maintain that they are the only ones

prejudiced in this action and that VITA failed to preserve evidence, VITA counters that Defendants

“spoiled” evidence in violation of their discovery obligations, specifically evidence related to the

vouchers. Defendants claim that, while VITA cannot support their allegations of “spoiled”

evidence, Defendants have documented several instances of VITA admitting to poor record

keeping concerning this lawsuit.



Nevertheless, VITA admits that it failed to file a status report requested by the Court and

“apologizes for this omission”, explaining the status report “apparently fell through the cracks

during the period when there was substantial confusion in this case as to representation.”!?? VITA

relies on the fact that it believes this was its only omission during the entire pendency of the case



and points to Defendants’ failure to claim specific prejudice. However, the Court finds Attorney



"8 Defendants support their claims based on testimony from a District Court hearing involving events occurring

from around 2006 to the present. See Ex. 27 District Court Hearing Transcript of March 30, 2015 (Attomey Rohn

stating that “I want to remind this Court that the V.I. Taxi Association is a — predominantly made up of a group of

elderly gentlemen. Most of whom are over 50. Many of them are over 70 who run the V.I. Taxi Association. They

are not sophisticated people.”).



‘°° VITA opposition at 21. Specifically, VITA claims that, during the fall of 2014, Attorney Griffiths was acting as

lead counsel, but was appointed as Acting Attorney General, thus withdrawing from most of her cases. “Rohn, at the

request of Griffiths, withdrew from this Superior Court case, but then Griffiths was terminated by VITA and Rohn re-

noticed her appearance.”

VITA y. VIPA et al.



Case No. ST-97-CV-117

Memorandum Opinion, June 7, 2016

Page 35 of 45.



Rohn’s argument unpersuasive since she filed a notice of appearance on December 1, 2014, the

same day as the motion for extension of time to respond to the Court’s October 31, 2014, Order.



Unlike in other cases where plaintiffs have refused to participate in fashioning a workable

scheduling order or failed to participate in discovery proceedings, making it difficult for a

defendant to obtain crucial information imperative to developing a trial strategy, here, when

prompted, Plaintiffhas been responsive to discovery but has failed to timely move the case forward

toward resolution. Additionally, it appears that both sides face similar challenges in terms of

discovery and the potential lack of evidence from poor record keeping and the absence of relevant

witnesses. However, “unlike a plaintiff, a defendant possesses no affirmative duty to take any steps

to bring a case to trial prior to filing a motion to dismiss for failure to prosecute.”!2° Thus, a

defendant is not required to “incur the expense and inconvenience of conducting discovery if [the

plaintiff's] inaction gave him the hope or expectation that the case would never be tried.’!3!

Consequently, it appears VITA has impeded resolution on the merits.



Upon finding Defendants are prejudiced by the lack of prosecution, the Court must then

“determine the extent of that prejudice in order to determine how heavily to weigh that factor as

part of its balancing test.”'?? If the Court makes a finding of prejudice suffered as a result of the

delay, the Supreme Court of the Virgin Islands instructs that this factor weighs in favor of dismissal



“only slightly.”'*? Here, the Court’s determination rests on the inherent prejudice suffered by



'% WVatts, 54 VI. at 292 (citing Ely Valley Mines, Inc. v. Hartford Acc. and Indem. Co., 644 F.2d 1310, 1317 (9th Cir.

1981) (“Although delay caused by a defendant may be considered by the court, the primary responsibility for

furthering a case is upon the plaintiff and his attorney”) (other citations omitted).



'| Id. (citing Ternes v. Knispel, 374 N.W.2d 879, 881 (N.D. 1985) (citations omitted)).



132 ld.



'°? Jd, at 293 (“Under these circumstances, as well as the absence of any evidence in the record indicating that Two

Plus Two was actually prejudiced, the Superior Court lacked a factual basis to find that the prejudice to Two Plus Two

had been ‘substantial.’ Therefore, while the second Halliday factor does support dismissal because of the inherent

prejudice Two Plus Two suffered as a result of the delay, it does so only slightly”).

VITA v. VIPA et al.



Case No. ST-97-CV-117

Memorandum Opinion, June 7, 2016

Page 36 of 45.



Defendants in Plaintiffs failure to pursue a permanent injunction, failure to seek leave to

accurately file an amended complaint, and failure to respond to Defendants’ motion, even after

requesting an extension of time to file a response. Because there is no evidence in the record that

Defendants have actually been prejudiced, this factor weighs only slightly in favor of dismissal.



C. A history of dilatoriness.



In addressing this factor in Poulis, the Third Circuit examined a party’s history of meeting

court ordered deadlines. For example, a party’s repeated failure to comply with time limits

imposed by the Court demonstrated a pattern of dilatoriness that was “intolerable,”'*4 recognizing

that “[i]f compliance is not feasible, a timely request for an extension should be made to the

court.”!?> Both the Third Circuit and the Supreme Court of the Virgin Islands have found that, to

be considered dilatory, the circumstance must reflect a plaintiff's failure to comply with multiple

orders of the Court.!*



Again, Defendants maintain that VITA has a long history of dilatoriness in this matter and

rely on Plaintiff's failure to seek a permanent injunction after the Appellate Division of the District

Court affirmed the Court’s grant of a preliminary injunction to VITA in 1997. Defendants re-

assert that the burden to move the case forward was on VITA, while VITA responds it had no duty

to pursue. Defendants maintain that VITA’s failure to seek a scheduling order is evidence of



VITA’s dilatory conduct and VITA’s tactical decision to treat the preliminary injunction as a



'34 Poulis, 747 F.2d at 868.



135 Id.



16 Molloy, 56 V.1. at 191 (citing Poulis, 747 F.2d at 868) (finding a history of dilatory behavior because “[uJnlike the

Donnelly [v. Johns-Manville Sales Corp., 677 F.2d 339 (3d Cir. 1982)] case, for example, where there was only one

failure to comply in a timely manner, i.c. in obtaining local counsel, in this case there has been a pattern of

dilatoriness.”’))

VITA v. VIPA et al.



Case No. ST-97-CV-117

Memorandum Opinion, June 7, 2016

Page 37 of 45.



permanent injunction. VITA asserts that it has a history of diligent prosecution in this case with

meritorious victories. !37



Further, Defendants point to Plaintiff's failure to respond to the Court’s Order of October,

31, 2014, even after untimely filing for an extension of time on November 20, 2014. Significantly,

the parties were ordered to submit briefs concerning the status of the case, the remaining matters

that require the Court’s attention, and whether the case should be dismissed or a hearing conducted

on the issue of damages.'** Attorney Rohn defended VITA’s failure to respond based on confusion

between counsel for VITA regarding representation. However, Attorney Griffiths had withdrawn

as counsel by December of 2014, and Attorney Rohn filed a notice of appearance on December 1,

2014, the same day as the motion for extension of time to respond to the Court’s October 31, 2014,

Order. Defendants assert that Attorney Rohn and VITA have no excuse for failing to comply with

the Court’s Order, and the Court agrees. Without any reply from Plaintiff, the Court was forced

to rule on the motion, but, instead of dismissing the case, determined it was appropriate to give

Plaintiff another opportunity to respond to the instant motion.



Here, both parties have a history of seeking extensions, and the Court cannot fault either

party for their untimeliness in this regard. While VITA maintains it was not required to pursue a

permanent injunction, the Court disagrees, as the Plaintiff has the burden of pursuing the case on



the merits. Nevertheless, since a finding of dilatoriness requires circumstances reflecting a



'57 VITA outlines its involvement in the procedural history as follows: VITA relied on the preliminary injunction

until it determined that Defendants were violating the injunction, VITA defended the appeal, and then timely

appealed to the Third Circuit. On remand, VITA filed summary judgment motions, requested discovery that was

refused because of the stay, and obtained a victory on the issue of associational standing. Pl.’s August 17, 2015,

Opposition, p. 21.



'38 The order was reduced to writing in an October 31, 2014, Order.

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Plaintiff's failure to comply with multiple orders of the Court,'*? the Court is unable to make such

a finding here since Defendants were unable to point to more than one instance.

The circumstances of this case are similar to those in Molloy v. Independence Blue



Cross,!°



where the Supreme Court of the Virgin Islands found no history of dilatoriness, when,

“after five years of vigorous litigation and two years of waiting on the trial court, the delay

attributable to the [plaintiffs’] failure to respond to the [one order by the trial court] . . . is less than

two months.”"'4! Delays caused by the Court do not contribute to Plaintiff's history of dilatoriness.

Here, significant delay was caused by the appeals, specifically the appeal to the Third Circuit,

which stayed the case for three years. However, the Court is unable to fault either party for their

appeals and the impact on the timeline for the case. Because the Court is unable to find a clear

history of dilatoriness by Plaintiff in this case, this factor weighs against dismissal.



D. Whether the conduct of the party or the attorney was willful or in bad faith.



For the fourth factor, the Court must “examine whether Plaintiff's counsel has engaged in

willful or flagrantly bad faith behavior.”'*? “Willfulness involves intentional or self-serving



behavior.”'*? In order for this factor to weigh in favor of dismissal, the Court is required to “point



to specific evidence to justify its determination of willfulness or bad faith.”!*4 “When there is no



39 Molloy, 56 V.1. at 191 (citing Poulis, 747 F.2d at 868) (finding a history of dilatory behavior because “[u]nlike the

Donnelly [v. Johns-Manville Sales Corp., 677 F.2d 339 (3d Cir. 1982)] case, for example, where there was only one

failure to comply in a timely manner, i.e. in obtaining local counsel, in this case there has been a pattern of

dilatoriness.”)).



140 56 V.L. 155 (V.I. 2012).



‘4! Id. at 190-191; see Browne v. Gore, 57 V.1. 445, 452 (V.I. 2012) (citing Molloy, 56 V.1. at 190) (The Supreme

Court of the Virgin Islands explained that in Molloy, “plaintiffs did not engage in history of dilatoriness when ‘[t]he

certified docket entries reflect that discovery had concluded, that the prior judge issued a January 11, 2005 Order of

Readiness for Trial, and had decided the last pending motion on April 28, 2005," for ‘the two year delay [wa]s

attributable entirely to the Superior Court for failing to set a trial date.’”).



'2 Dospiva v. Murray, 2015 V.1. LEXIS 31, *8 (V.L. Super. Ct., Mar. 30, 2015) (citing Poulis, 747 F.2d at 868).



'3 Adams v. Trustees of the N.J. Brewery Employees' Pension Trust Fund, 29 F.3d 863, 875 (3d Cir. N.J. 1994)).



'6 Molloy, 56 V.1. at 192 (citing Poulis, 747 F.2d at 868-69).

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evidence of willfulness on the record, the Court must presume that [a party's] failure to respond to

the prompting order was not willful and that this factor also does not favor dismissal.”'*5 Delay is

sufficient for a finding of willfulness or bad faith when there is “evidence on the record that

Plaintiff has repeatedly ignored the Court's orders or flouted the Court's authority.”'*°



While Defendants recognize the record does not contain specific instances of bad faith,

Defendants maintain that, to the extent VITA had the obligation to move the case to final resolution

and failed to do so, VITA’s actions demonstrate bad faith. Specifically, Defendants argue that

VITA added an additional 7.5 years to this litigation by obtaining a de facto permanent injunction

without a ruling on the merits of the case. In VITA’s response, it claims that “Defendants are

trying to parlay their failure to move for relief from the injunction during this period-instead they

engaged in self-help and willfully violated this Court’s injunction-into a claim that VITA should

somehow be punished for being satisfied with the injunctive relief they obtained.”!47



The Court agrees with Defendants that, although a specific instance of bad faith is not

present in the record, VITA held the burden to pursue resolution on the merits and the delay was

unreasonable, especially in light of the fact that the preliminary injunction has extended beyond

the life of Act No. 5231. As a result, this factor weighs only slightly in favor of dismissal.



E. The meritoriousness of the claim or defense.



“In considering whether a claim or defense appears to be meritorious for this inquiry, we

do not purport to use summary judgment standards. A claim, or defense, will be deemed



meritorious when the allegations of the pleadings, if established at trial, would support recovery



5 Caravelle, 2014 V.I. LEXIS 55, at *10 (citing Molloy, 56 V.I. at 192) (internal quotations omitted).



'46 Id, at *12 (“Absent evidence on the record that Plaintiff has repeatedly ignored the Court's orders or flouted the

Court's authority, delay is insufficient for a finding of willfulness or bad faith”) (citing Adams, 29 F.3d at 876).



47 P.’s Aug. 31, 2015, Opposition, p. 22.

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by plaintiff or would constitute a complete defense.”'4® Nevertheless, at early stages of litigation,

where “little discovery and no evidence [has been] presented to the Court[,]” it is difficult for

courts to conclude “with much certainty whether the Plaintiffs' claims are meritorious.”!*°



In ruling on the preliminary injunction, the Court found that VITA had shown a reasonable

probability of success on the merits, but since 1997 the Court has not considered the actual merits

of the claim. However, while Plaintiff failed to timely pursue a permanent injunction, the Act

upon which the preliminary injunction was based expired in 2007.'° As a result, Defendants

maintain that VITA cannot have a valid claim for a permanent injunction in this matter based on

violation of a statute that expired over eight (8) years ago and also that Plaintiff failed to state an

appropriate action for damages. Additionally, Defendants believe that VITA does not have a

meritorious claim pending because it has not made any new allegations of violations of the

preliminary injunction, and the Appellate Division of the District Court rejected VITA’s claims

for violations between 1997 and 2006 and did not remand the issue of sanctions back to the

Superior Court. Again, Defendants maintain that VITA does not have a valid claim left to be

decided by this Court. In response, VITA cites the Court’s June 15, 2015, Memorandum Opinion,

in which the Court recognized that, although “the Act which formed the basis of the 1997

injunction expired and was replaced by a new Act, the Court is unwilling to recognize expiration

as a defense for violations of a Court Order that occurred while the Act was in full effect.” Here,

based on the foregoing analysis, the Court is satisfied that Defendants did not violate the

preliminary injunction for the relevant period. Nevertheless, the Court clearly limited the events



that could still qualify for relief to those related to the “franchise agreement and renewal under Act



8 Poulis, 747 F.2d at 869-870 (citations omitted).

'"° Caribbean Island Adventures, Inc. y. Marzano, 2011 V.1. LEXIS 49, *8 (V.1. Super. Ct. 2011).

13 See Defs.’ July 15, 2015, Mot. to Dismiss, at Ex. 2.

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No. 5231, and the amended preliminary injunction from May 27, 1997.”'5! Asa result, the Court

finds that VITA does not have meritorious claims for purposes of the Halliday factors, based

primarily on the explanations above that VITA is not entitled to a permanent injunction, because

of VITA’s prior award of equitable relief, and as a result of judicial estoppel.



F. The effectiveness of sanctions other than dismissal, which entails an analysis of

alternative sanctions.



Since dismissal is a sanction of last resort, the Court must “consider whether a lesser

sanction would better serve the interests of justice.”!>? “In general, a sanction should be directed

toward the particular abuse that has occurred” and “may include excluding evidence, precluding

witnesses from testifying, striking portions of pleadings, or imposing monetary sanctions to

compensate the harmed party for reasonable expenses.””!*3



Defendants maintain that the only appropriate sanction in this matter is dismissal of VITA’s

Complaint and that all of the alternative sanctions fail to adequately remedy the prejudice to

Defendants. Again, Defendants maintain that they can no longer receive a fair trial over eighteen

(18) years after the relevant events occurred, given VITA’s own admissions that evidence has gone

missing, witnesses have died or moved off-island, and the memories of the remaining witnesses

have faded. VITA maintains that Defendants failed to allege any violations of a scheduling order,

discovery obligation, or any other personal procedural rule or litigation obligation that VITA

violated that would justify the extreme sanction of dismissal. Defendants disagree and believe that



VITA’s intentional refusal to prosecute in conjunction with VITA’s meritless appeal of an



'S! Defendant Ritz-Carlton also emphasized the fact that the preliminary injunction should be dissolved because the

Plaintiff no longer has any conceivable legal basis for seeking a permanent injunction in this case because the Act

which formed the basis for the injunction expired on its terms in 2007. Defendant Ritz-Carlton’s November 14,

2014, Joinder in Plantation Bay’s Brief in Response to Order of October 31, 2014.



'? Caravelle, 2014 V.I. LEXIS 55, at *10 (citing Guyer v. Beard, 907 F.2d 1424, 1429-30 (3d Cir. 1990)).



'3 Andrews v. Gov't of V.L., 132 F.R.D. 405, 413 (D.V.I. 1990).

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interlocutory order to the Third Circuit, which delayed the case for an additional (3) years, denying

Defendants the opportunity to defend their claims on the merits in a timely fashion, make dismissal

the only option to cure the prejudice to Defendants.



VITA delayed prosecuting this case to resolution on the merits on numerous occasions and

that the damages VITA is seeking could have been timely prosecuted years ago, even with the

numerous stays during the appeals. However, the Court recognizes VITA is actively pursuing its

case now, even if only because VITA is now faced with potential dismissal.



Although the Court finds that the Poulis factors slightly favor dismissal, except for lack of

a history of dilatoriness, the Court recognizes that alternative theories of dismissal raised by

Defendants, as discussed above, offer stronger support for dismissal of this case. Nevertheless, as

an alternative theory, the Court still finds that dismissal is slightly justified under the analysis for

failure to prosecute, but recognizes that this form of dismissal is traditionally reserved for cases

where a plaintiff is currently failing to participate in an action, rather than for a plaintiffs failure

to prosecute at the beginning of the action.



Vil. Laches



As another option, Defendants claim that the doctrine of laches bars any claims for

damages as sanctions arising from violations of the preliminary injunction between 1997 and 2003

and any monetary sanctions stemming from violations of the preliminary injunction that have not

yet been alleged by VITA. Laches is an affirmative defense “that bars a plaintiffs claim where

there has been an inexcusable delay in prosecuting the claim in light of the equities of the case and



prejudice to the defendant from the delay.”'** “Laches requires proof of (1) lack of diligence by



14 St. Thomas-St. John Bd. of Elections v. Daniel, 49 V.1. 322, 330 (V.L 2007)(citations omitted),

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Case No. ST-97-CV-117

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the party against whom the defense is asserted, and (2) prejudice to the party asserting the

defense.”'*> Under Fed. R. Civ. P 8(c), laches is an affirmative defense used to respond to a

complaint. Here, Defendants limit their argument of laches to VITA’s claims for sanctions

resulting from alleged violations of the preliminary injunction, and not in response to allegations

in the Complaint.



The Court entered a preliminary injunction in favor of VITA on March 10, 1997. Ina

motion for sanctions in May 2004, VITA asserted violations of the preliminary injunction

occurring between 1997 and 2003. On February 6, 2006, VITA asserted violations of the

injunction against the taxi and hotel defendants for the period of 1997 through 2005.'** Defendants

believe that VITA unreasonably delayed enforcing its rights, thereby greatly prejudicing

Defendants ability to defend. Defendants point to the fact that VITA’s sanctions motion, VITA’s

estimate of costs, and VITA’s motion for contempt all contain little or no actual evidence of the

violations pre-dating 2003 and state that VITA failed to present evidence nine (9) years ago to

support its assertions of the violations between 1997 and 2003. Further, Defendants claim that,

since VITA has never alleged violations of the preliminary injunction between 2006 and 2007, any

potential claims from this time period would also be barred by the doctrine of laches. Finally,

Defendants claim that VITA failed to produce any evidence of violations when the Court held

contempt hearings on June 24, 2005, and March 1, 2006.



VITA argues that Defendants are unable to raise laches as a defense since Defendants did

not raise the defense on appeal from the first set of contempt hearings and that, after suit is filed,



allegations of delay or failure to prosecute must be evaluated under the Halliday factors.



155 fd, {citing Costello v. United States, 365 U.S. 265, 282, 81 S. Ct. 534, 543, 5 L. Ed. 2d 551 (1961)).

156 See Defs’ July 15, 2015, Mot. to Dismiss, Ex. 12.

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Additionally, VITA claims that Defendants failed to articulate any procedural rule that would

support a laches-based dismissal.



However, laches is an affirmative defense and must be pled and proved in the trial court

before being raised on appeal.'°7 While VITA claims that laches cannot be used to bar post-

Complaint allegations of contempt, Defendants disagree and cite Derek & Constance Lee Corp. v.

Kim Seng Co., in which a district court’s dismissal of a motion for civil contempt sanctions under

the laches doctrine was upheld.'** Defendants re-assert that VITA cannot now claim for the first

time alleged violations of the preliminary injunction, which would require the Court to consider

events from over eight (8) years ago involving Act No. 5231, which expired in 2007. While the

Court agrees that Defendants would be prejudiced if forced to defend these claims based on the

delay, the Court is unwilling to dismiss the claims based on laches, since the Supreme Court of the

Virgin Islands has only recognized laches in terms of an affirmative defense in response to a

Complaint.'*’ In so ruling, the Court is by no means foreclosing arguments by parties in the future

utilizing laches in other situations, but here, where the claims can be dismissed based on other



doctrines, the Court finds the doctrine of laches inapplicable.



'S? Haynes, 61 V.I. at 576 n.18; see also Fed. R. Civ. P. 8(c).



158 467 F. App'x 696, 698 (9th Cir. 2012).



'S9 See In re the Suspension of Joseph, 60 V.1. 540, 542 (V.I. 2014) (“Laches, an equitable defense, is distinct from

the statute of limitations, a creature of law, and precludes an action if an omission to assert a right for an

unreasonable and unexplained length of time and under circumstances prejudicial to the adverse party.”’);



St. Thomas-St. John Bd. of Elections v. Daniel, 49 V.1. 322, 330 (V.1. 2007)(citations omitted); Haynes, 61 V.1. at

576 n.18.

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Case No. ST-97-CV-117



Memorandum Opinion, June 7, 2016



Page 45 of 45.



CONCLUSION



For the foregoing reasons, the Court will grant Defendants’ July 15, 2015, Motion to



Dismiss. An Order consistent with this Opinion shall follow.



=]



Dated: June &, 2016



a



HON. MICHAEL C.DUNSTON



JUDGE OF THE SUPERIOR COURT



OF THE VIRGIN ISLANDS



ttest: Estrella H. George



Ac



lerk



i



by:



Donna D. Donovan



Court Clerk Supervisor



le 10 2OlL



CERTIFIED A TRUE COPY



DATE:



0-/3-le



ESTRELLA H. GEORGE



Acting Clerk of the Court



By



Cameil A. Clarke



Court Clerk II