IN THE SUPERIOR COURT OF THE VIRGIN ISLANDS

DIVISION OF ST. THOMAS AND ST. JOHN



TUTU PARK, LTD,



Plaintiff, Case No. ST-15-CV-570



vs.



GOVERNMENT OF THE VIRGIN ISLANDS,

and IRA MILLS, in his official capacity as

Tax Assessor,



Action For

Declaratory Judgment



Defendants.



ee ee ee ee



Cite as 2019 V.I. Super 30U



MEMORANDUM OPINION



{1 THIS MATTER is before the Court on Defendant Government of the Virgin

Islands’ Amended Motion to Dismiss for Lack of Jurisdiction and for Failure to Join

an Indispensable Party, filed June 30, 2016 (the “Motion to Dismiss”).! Plaintiff's

Complaint challenges certain real property tax bills and the interpretation of an EDC

certificate. But Defendants argue that Plaintiffs failed to exhaust their

administrative remedies before the V.I. Board of Tax Review. The Court disagrees.



For the reasons set forth herein, Defendants’ Motion to Dismiss will be denied.



RELEVENT BACKGROUND



{2 Plaintiff Tutu Park, LTD (“TUTU”) has a ground lease for Parcel #26 Estate



Charlotte Amalie, No. 3, New Quarter, St. Thomas, Virgin Islands (the “Property’).



+The motion is fully briefed. The title of the Motion suggests the only moving party is Defendant Government of

the Virgin Islands. However, the body of the Motion makes clear that both defendants are moving for dismissal.

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On November 30, 1993, the Virgin Islands Economic Development Authority (the

“EDA”) issued TUTU an Economic Development Certificate (an “EDC Certificate”),

which, inter alia, exempted TUTU from certain real property taxes.



943 On October 23, 2015, TUTU initiated this matter, naming the Government of

the Virgin Islands and Ira Mills, in his official capacity as Tax Assessor (the “Tax

Assessor” and collectively (the “Government”) as Defendants (the “Complaint”).

TUTU makes various claims against the Tax Assessor, questioning the methodology

used for assessing properties, challenging the valuations the Tax Assessor has

assigned to the Property since 2012 and suggesting that the Tax Assessor has

incorrectly collected taxes on portions of the Property that were exempted by the EDC

Certificate. Prior to filing the Complaint, in or about February 2015, TUTU filed an

appeal for a review of the 2014 tax assessments before the Board of Tax Review

(“‘BOTR”). Concurrently with the Complaint, TUTU filed a Motion to Stay

Proceedings Before the Board of Tax Review, to allow this matter to proceed pursuant

to V.I. CODE ANN. tit. 5 § 80.2



74 In the instant Motion to Dismiss, the Government argues that, as TUTU has

failed to exhaust its administrative remedies, this Court does not possess subject



matter jurisdiction and the case should be dismissed pursuant to Virgin Islands Rules



? Per a letter dated August 8, 2016 (and attached as Exhibit 2 to TUTU’s Informational Notice Related to Pl.’s

Emergency Mot. to Stay Proceedings Before the 8d. of Tax Review, filed Aug. 9, 2016), the BOTR granted the

request and stayed its review, pending a decision from this Court.

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of Civil Procedure 12(b)(1).2 Further, the Government claims that the matter should

be dismissed pursuant to V.I. R. Civ. P. 12(b)(7), asserting that by not including the

EDA as a Defendant, TUTU has failed to join an indispensable party, as required by

V.L. R. Civ. P. 19.

ANALYSIS



{5 There are two issues before the Court in this matter: (A) whether the Court

has subject matter jurisdiction over this case, and (B) whether the EDA is an

indispensable party to this action.



A. This Court has Subject Matter Jurisdiction to Hear this Case.



{6 Motions to dismiss for lack of subject matter jurisdiction are governed by V.I.

R. Civ. P. 12(b)(1). “The applicable standard of review under Rule 12(b){1) differs

depending on whether the moving party has made a facial attack or a factual attack

on the court's power to hear the case.” James-St. Jules v. Thompson, Super. Ct. Civ.

No. SX-09-CV-136, 2015 V.I. LEXIS 74, *6 (V.I. Super. Ct., June 25, 2015)

(unpublished) (citing Mortensen v. First Fed. Sav. and Loan Ass'‘n, 549 F.2d 884, 891

(8d Cir. 1977)). “A facial attack ...1s an argument that considers a claim on its face



and asserts that it is insufficient to invoke the subject matter jurisdiction of the court’



3 Defendant refers to the Federal Rules of Civil Procedure throughout its Mot. to Dismiss. However, effective March

31, 2017 the Supreme Court adopted the Virgin Islands Rules of Civil Procedure, which supersede afl previous civil

procedure rules applicable to the Superior Court, including the Federal Rules of Civil Procedure. Mills-Williams v.

Mapp, 67 V.I. 574, 584 (V.I. 2017). Although this action was pending on the effective date of the rules, the Court

finds no reason why applying the V.I. R. Civ. P. to this matter would be infeasible or work an injustice to either party

and will apply them, per V.I. R. Civ. P. 1-1{c)(2)(B).

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based on a jurisdictional defect.” Id. at *6-7 (quoting Constitution Party of

Pennsylvania v. Aichele, 757 F.3d 347, 358 (3d Cir. 2014)). A factual attack occurs

“when a defendant disputes the existence of certain jurisdictional facts alleged by

plaintiffs ....” Id. at *7. “A factual attack to the Court's subject matter jurisdiction

may only occur after the allegations of the complaint have been controverted.” Id. at

*7-8 (citing Mortensen v. First Federal Savings and Loan Assoc., 549 F.2d 884, 892 n.

17 (3d Cir. 1977)). In the case of a factual attack, “the burden of proving the existence

of subject matter jurisdiction lies with the plaintiff.” Id. at *7 (citing Carpet Group

Intern. v. Oriental Rug Importers Ass'n, Inc., 227 F.3d 62, 69 (3d Cir. 2000)).

{7 Inthe case at hand, the Government filed their Motion to Dismiss after filing

their Answer to the Complaint, and that Answer challenged certain allegations in the

Complaint. Therefore, the Court will review the 12(b)(1) claim in the Motion to

Dismiss as a factual attack.

{8 | The Government claims that the Court lacks jurisdiction to hear this matter

because (i) V.I. CODE ANN. tit. 33 §§ 2451 — 2456 provides taxpayers with an exclusive,

mandatory remedy for challenging tax assessments, (ii) Plaintiff has failed to exhaust

the applicable administrative remedies available, and (iii) there is no irreparable

harm.



1. Exhaustion of Administrative Remedies

{9 The Government argues that the administrative remedies provided in



accordance with 33 V.I.C. §§ 2451 — 2456 are mandatory and must be pursued fully

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before a taxpayer can bring an action before the court. TUTU counters that the

administrative remedies are non-exclusive and that exhaustion of the appeals process

with the BOTR is not a condition precedent to filing an action under V.I. CODE ANN.

tit. 5 § 80, the Virgin Islands taxpayer statute.

410 “Persons who believe that the Tax Assessor has incorrectly assessed the value

of their property have the opportunity to seek redress from the Board of Tax Review

under V.I. Code Ann. tit. 33, § 2451.” V.L Tel. Corp. v. Mills, Super. Ct. Civ. No. ST-

17-CV-279, 2018 V.I. LEXIS 65, *8 (V.I. Super. Ct. June 22, 2018) (unpublished).

“Any person aggrieved by the action of the Tax Assessor in relation to the valuation

of his property may make written complaint thereof to the Board of Tax Review .. .”

33 V.LC. § 2451(a) (emphasis added). Pursuant to 5 V.L.C. § 80, “[a] taxpayer may

maintain an action to restrain illegal or unauthorized acts by a territorial officer or

employee, or the wrongful disbursement of territorial funds.”

In circumstances where illegal or unlawful conduct is alleged, Virgin

Islands courts have long held that, to invoke the Court's jurisdiction and

have standing under 5 V.I.C. § 80, all the plaintiff must plead is that (1)

he or she is [sic] Virgin Islands taxpayer; (2) that defendant is a

Territorial officer or employee who engaged in illegal or unauthorized

conduct; and (3) the Plaintiff requests relief, whether it be injunctive or

declaratory, to compel defendant to refrain from that illegal or

unauthorized conduct.

Lorraine Associates, L.L.C. v. Gov't of the V.I., Super. Ct. Civ. No. ST-15-CV-438, 2016

V.I. LEXIS 24, *7 (V.I. Super. Ct. Mar. 18, 2016) (unpublished) “. . . Virgin Islands



courts have continued to construe [S]ection 80 as meaning what it says, that any

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taxpayer may sue the Government or one of its officers or employees to prevent a

violation of the law.” Id. at *8 (citing Haynes v. Ottley, 61 V.I. 547, 567 (V.I. 2014).

Further, under V.I. CODE ANN. tit. 4 § 76: “the Superior Court shall have original

jurisdiction in all civil actions regardless of the amount in controversy ....” This

includes claims brought under 5 V.I.C. § 80. “The [Superior] Court has jurisdiction

under 4 V.I.C. § 76 for claims arising under. 5 V.I.C. § 80...” where the plaintiff has

satisfied the conditions for bringing suit under the latter statute. Lorraine Assocs.,

L.L.C. v. Gov't of the V.I, Super. Ct. Civ. No. ST-15-CV-438, 2016 V.I. LEXIS 233,

*20 (V.I. Super. Ct. Dec. 13, 2016) (unpublished).



411 The Court in Lorraine, adjudicating an almost-identical motion to dismiss,

undertook an exhaustively thorough analysis of the statutory construction and

interplay between 33 V.I.C. §§ 2451 — 2456 and 5 V.I.C. § 80. Id. at *8-22. This Court

finds the analysis in Lorraine highly persuasive, as Lorraine is very similar to the

instant matter. The complaint in Lorraine was filed one month prior to the Complaint

in this case, by the same attorney, against the same Defendants. Importantly, several

of the filings in the two matters are virtually identical, with only the case-specific

details being altered. In point, the Motion to Dismiss, Opposition and Reply filed in

the instant matter are — save the aforementioned case-specific details — identical to

the briefings filed in Lorraine. Therefore, this Court is satisfied that the analysis

performed in Lorraine is correct and applicable to this matter and consequently, this



Court adopts Lorraine’s analysis as though it were set forth in this Opinion.

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412 The Court in Lorraine held that “the administrative appeals process under 33

V.I.C. §§ 2451 — 2456 does not function as a jurisdictional prerequisite to judicial

review in cases arising under 5 V.I.C. § 80.” Id. at *23 (citing Public Emples. Rel. Bd.

v. United Indus. Workers-Seafarers Ina Union, 56 V.1. 429, 438 (V.I. 2012) Gnternal

citations omitted)).4 Finding that the plaintiff had brought a colorable claim under 5

V.I.C. § 80, the Lorraine Court thus held that, “Defendants' contention that the Court

lacks subject matter jurisdiction because Plaintiff failed to exhaust its administrative

remedies under 33 V.I.C. §§ 2451 — 2456 lacks merit.” Jd.



413 Here, TUTU has properly 1) alleged that it is a Virgin Islands taxpayer, 2)

alleged that Ira Mills, in his official capacity as the Tax Assessor for the Territory,

has engaged in illegal or unauthorized conduct, and 3) has requested injunctive relief,

thereby satisfying the criteria for bringing a claim under 5 V.I.C. § 80.5 Therefore, as

in Lorraine, this Court finds that pursuing the administrative appeals process

provided by 33 V.I.C. §§ 2451 — 2456 is not an exclusive, necessary prerequisite to

bringing such a claim under 5 V.LC. § 80. Thus, this Court has subject matter



jurisdiction to hear this case.



4 See also First Am. Dev. Group/Carib, LLC v. WestLB AG, 55 V.1. 594, 611 (V.I. 2011). (“As the United States

Supreme Court has recently reiterated, a statute is ‘jurisdictional’ if ‘it governs a court's adjudicatory capacity, that

is, its subject-matter or personal jurisdiction ... .’” (Quoting Henderson v. Shinseki, 562 U.S. 428, 435 (2011)).



> In Lorraine, the Court noted that not all claims regarding the Tax Assessor’s office would rise to the level of

satisfying the pleading requirements of 5 V.I.C. § 80. Specifically, the Court referenced the requirement that the

conduct described be “illegal or unauthorized.” Lorraine at *20 (citing citing McBean v. Gov't of the V.1., 32 V.I. 120,

128 (V.I. Super. Ct. 1995)).

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{14 Inits Reply, the Government argues that commencing the appeals process with



the BOTR has created “an additional jurisdictional flaw.” Reply 8 (citing Thomas v.



Gov't, 26 V.I. 71, 73 (V.I. Super. Ct. 1991). The Court in Lorraine has already



analyzed this question, finding that “a ‘jurisdictional flaw’ is not created merely



because an appeal was instituted before the Board of Tax Review, since the Court



independently has jurisdiction over the action as a taxpayer suit under 5 V.I.C. § 80



and 4 V.I.C. § 76.” Lorraine at *24-25. This Court concurs. Having already.

established that the Court has subject matter jurisdiction under 5 V.I.C. § 80 and 4



V.1LC. § 76, the Court finds no reason to dismiss this action merely because an appeal



was filed with the BOTR.®



2. Irreparable Harm



415 The Government asserts that this matter should be dismissed because TUTU

has neglected to make a showing of irreparable harm. TUTU counters that

irreparable harm is not a required element for injunctive relief in cases brought under

5 V.LC. § 80.



416 This question has been addressed by various Virgin Islands courts.

“[P]laintiffs are not required to show irreparable harm under 5 V.I.C. § 80....” Berne

Corp. v. Virgin Islands, 120 F. Supp. 2d 528, 536, (D.V.I. 2000). “The Legislature of

the Virgin Islands enacted standing upon taxpayers, without the demonstration of a



particularized injury, pursuant to 5 V.I.C. § 80.” Donastorg v. Virgin Islands, 45 V.I.



5 The Court notes that TUTU’s appeal before the BOTR has been stayed pending the outcome of this case.

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259, 270 (V.I. Super. Ct. 2003). “Standing under section 80 is . . . premised on two

elements: an act by ‘a territorial officer or employee,’ and the allegation that such an

act was either ‘illegal’ or ‘unauthorized, or that it constituted a wrongful

disbursement of territorial funds.” Virgin Islands Taxi Association v. W. Indian Co.,

66 V.I. 473, 484 (V.I. 2017). “To sustain a taxpayer suit under Title 5, Section 80, a

plaintiff must show: (1) that he is a Virgin Islands taxpayer; and (2) that territorial

funds were wrongfully disbursed. Plaintiff does not need to show any actual or

particularized injury to himself to recover under Title 5, Section 80.” Olive v.

deJongh, 57 V.I. 24, 39 (V.I. Super. Ct. 2012) (citations omitted). “... I reaffirm my

earlier holding that plaintiff need not show irreparable harm, because the very

remedy provided by 5 V.I.C. § 80 is equitable in nature. Section 80 itself authorizes

injunctive relief to restrain or enjoin violations of law.” Equivest St. Thomas, Inc. v.

Gov't of the V.I., 208 F. Supp. 2d 545, 551 (D.V.I. 2002) (citing Berne, 120 F. Supp. 2d

at 536). This Court concludes TUTU need not show irreparable harm in order to

bring suit under 5 V.I.C. § 80, and thus failure to show such harm is not a reason to

dismiss this matter.

B. The EDA is Not an Indispensable Party to this Action.



{17 The Government argues that the EDA is an indispensable party to this action,

as failure to enjoin the agency would “impair or impede the [EDA]’s ability to grant



modifications, extensions, or renewals to existing certificates .. .” Mot. to Dismiss

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12. TUTU counters that not only is the EDA not an indispensable party, it is not

even a necessary party and is in fact “of marginal relevance to the case.” Opp. 18.

418 V.LR. Civ. P 12(b)(7) permits a party to move for dismissal for “failure to join

a party under Rule 19.” Rule 19(a) governs whether or not a party is required and

must be joined, if feasible, and provides as follows:



(a) Persons Required to Be Joined if Feasible.



(1) A person who is subject to service of process and whose joinder will not

deprive the court of subject-matter jurisdiction must be joined as a party if:

(A) in that person's absence, the court cannot accord complete relief

among existing parties; or

(B) that person claims an interest relating to the subject of the action

and is so situated that disposing of the action in the person's absence

may:

(i) as a practical matter impair or impede the person's ability to

protect the interest; or

(ii) leave an existing party subject to a substantial risk of incurring

double, multiple, or otherwise inconsistent obligations because of

the interest.



Rule 19(a) V.I. R. Civ. P.



An indispensable party is one who not only has an interest but an

interest of such a nature that a formal decree cannot be made without

either affecting that interest or leaving the controversy in such a

condition that a final determination may be wholly inconsistent with

equity and good conscience.



Richards v. Election, 13 V.I. 531, 537 (V.I Super. Ct. 1977) (citing Gaw v. Higham,

267 F.2d 355, 357 (6th Cir. 1959), cert. denied, 360 U.S. 933 (1959)). “The party that



must be joined under Rule 19(a)(1)(A) is referred to as an ‘indispensable party.”

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Hendricks v. Clyne, Super. Ct. Civ. No. ST-16-CV-147, 2016 V.I. LEXIS 177, at *3-5

(V.I. Super. Ct. Oct. 27, 2016) (unpublished) (internal citations omitted). “A necessary

party, however, only becomes indispensable when it cannot be joined. Fed. R. Civ. P.

19(b).” Epstein v. Fancelli Paneling, Inc., 55 V.I. 150, 165 (V.I. Super. Ct. 2011).

“Ultimately, the burden is on the moving party to show that a party is both necessary

and indispensable.” Titan Medical Group, LLC v. Governor Juan F. Luis Hospital

and Medical Center, Super. Ct. Civ. No. SX-13-CV-497, SX-2013-CTO-00004, 2015

V.I. LEXIS 79, at *2 (V.I. Super. Ct. July 14, 2015) (unpublished), vacated in part on

other grounds, remanded by sub nom. Juan F. Luis Hosp. & Med. Ctr., & Gov't of the

V.I. ex rel. Governor Juan F. Luis Hosp. & Med. Ctr. V. Titan Med. Group, LLC, S.

Ct. Civ. No. 2015-0074, se V.I. __, 2018 V.I. Supreme LEXIS 33 (V.I. Oct. 25, 2018),

(emphasis added).



419 Here, not only has the Government failed to prove that the EDA is a necessary

party, they have also given no reason why the EDA could not be joined, if needed.

First, the EDA’s absence from this suit would not impede the Court’s ability to grant

complete relief among the parties. Whether the Tax Assessor is violating the law by

failing to disclose data and assessment methodologies, produce evidence that it is

following IAAO standards, or failing to comply with the terms of TUTU’s EDC

Certificate are all questions that do not require the EDA’s joinder as a party. As has

been noted by this Court in another, similar matter, the EDA “is not responsible for



the assessment of property taxes, the collection of property taxes, or the refunding of

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overpaid property taxes.” V.I. Tel. Corp. v. Mills, 2018 V.I. LEXIS 65, *11, Super. Ct.

Civ. No. ST-17-CV-279, (V.I. Super. Ct. June 22, 2018) (unpublished). Although the

Government asserts that failure to join the EDA would in some way “impair or

impede” the agency’s ability to “protect [its] interest” in the matter, they have not

shown any evidence of how, exactly, the EDA would be impacted since the Certificate

has expired. Finally, there is no reason to conclude that, should they not be joined,

the EDA would be at any risk of being “subject to a substantial risk of incurring

double, multiple, or otherwise inconsistent obligations because of the interest.”

Therefore, the EDA does not meet the threshold for a required party, as per Rule

19(a).7 As the EDA is not a required party, there is no reason for a Rule 19(b) analysis

and no reason to dismiss this matter for failure to join an indispensable party.®

CONCLUSION



420 The administrative remedies for challenging tax assessments as provided in

33 V.LC. §§ 2451 — 2456 are not mandatory and TUTU was not required to exhaust

them prior to filing suit under 5 V.I.C. § 80. Therefore, this Court has subject matter



jurisdiction over TUTU’s claim.



7Moreover, the Government have provided no reason why the EDA could not be joined in this matter. Asa result,

even if the EDA were established to be a required party, no 19{b) determination is necessary.

8 Importantly, a Rule 19(a) defense is one that is waived unless raised in the pleadings, per Rule 12(b). As TUTU



notes in the Opposition, Rule 12(h)(2) expressly provides relief to this waiver, but only for Rule 19(b) claims. As the

Government did not raise a Rule 19 defense in their Answer, they waived that defense.

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{21 The Government has failed to establish that the EDA is a required party in

this matter. As a result, there is no basis for dismissing this action for failure to join

EDA as a party under V.I. R. Civ. P. 12(b)(7) and V.I. R. Civ. P. 19.



422 For the foregoing reasons, Defendant’s Motion to Dismiss for Lack of

Jurisdiction and for Failure to Join an Indispensable Party will be demied.



{23 An Order consistent with this Memorandum Opinion will be entered.



DATED: March €_, 2019 LOE Feelin



Kathleen Mackay

Judge of the Superior Court

of the Virgin Islands



ATTEST:



ESTRELLA H. GEORGE

Clerk Court

BY:



D@NNA DONOVAN )

Court Clerk NOVA) 4 Lo, CONF