1996 Decisions

Opinions of the United

States Court of Appeals

for the Third Circuit

2-7-1996

Brown v. Francis

Precedential or Non-Precedential:

Docket 95-7273

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Recommended Citation

"Brown v. Francis" (1996). 1996 Decisions. Paper 230.

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1 

 UNITED STATES COURT OF APPEALS 

FOR THE THIRD CIRCUIT 

_________________ 

NO. 95-7273 

_________________ 

BARRY BROWN; JOLIE STAHL, AS THEY ARE TRUSTEES OF THE LONG 

BAY TRUST 

v. 

LEO FRANCIS, AS HE IS THE COMMISSIONER OF THE DEPARTMENT 

OF PUBLIC WORKS; DELMA G. HODGE, AS SHE IS THE COMMISSIONER 

OF THE DEPARTMENT OF PROPERTY AND PROCUREMENT OF THE 

GOVERNMENT OF THE VIRGIN ISLANDS; GOVERNMENT OF THE VIRGIN 

ISLANDS OF THE UNITED STATES OF AMERICA 

(D.C. No. 92-cv-00081) 

________________ 

GOVERNMENT OF THE VIRGIN ISLANDS 

v. 

0.459 ACRES OF LAND CONSISTING OF FOLLOWING: PARCEL NO. 

6A ESTATE THOMAS KINGS QUARTER AND PARCEL NO. 9A ESTATE 

THOMAS, VIRGIN ISLANDS; LONG BAY TRUST 

(D.C. No. 93-cv-00059) 

LEO FRANCIS, AS HE IS THE COMMISSIONER OF THE DEPARTMENT OF 

PUBLIC WORKS; DELMA G. HODGE, AS SHE IS THE COMMISSIONER 

OF THE GOVERNMENT OF THE VIRGIN ISLANDS; GOVERNMENT OF 

THE VIRGIN ISLANDS OF THE UNITED STATES OF AMERICA 

_________________ 

 

On Appeal from the District Court of the 

Virgin Islands 

(Division of St. Thomas and St. John) 

(D.C. Civil Action Nos. 92-00081 and 93-00059) 

_________________ 

Argued December 4, 1995 

BEFORE: GREENBERG and MCKEE, CIRCUIT JUDGES, and 

ACKERMAN, DISTRICT JUDGE1

 

1

Honorable Harold A. Ackerman, Senior Judge of the United States 

District Court for the District of New Jersey, sitting by 

designation. 
2 

(Filed: February 7, 1996) 

Robert W. Bornholt 

 Pamela Tepper (argued) 

 Department of Justice 

 48B-50C Kronprindsens Gade 

 GERS Bldg., 2d Floor 

 St. Thomas, USVI 00802 

Attorneys for Appellants

Morris M. Goldings (argued) 

 Ellen S. Shapiro 

 Mahoney, Hawkes & Goldings 

 The Heritage on the Garden 

 75 Park Plaza 

 Boston, Massachusetts 02116 

 Attorneys for Appellees

 

______________ 

OPINION OF THE COURT 

______________ 

HAROLD A. ACKERMAN, Senior District Judge

 On this appeal, we are faced with several interrelated 

jurisdictional issues arising out of appellant Long Bay Trust's 

inverse condemnation action filed in the District Court of the 

Virgin Islands and the Government of the Virgin Islands' 

("government") parallel eminent domain action filed in the 

Territorial Court of the Virgin Islands. Both cases involved the 

same parcels of land. 

 First, we must determine whether the government's eminent 

domain case was properly removed from Territorial Court to the 

district court. Second, we must assess the impact, if any, of 

the district court's order consolidating the eminent domain and 
3 

inverse condemnation cases following the removal from the 

Territorial Court, and the parties' subsequent submission of 

their claims to binding arbitration. 

 For the following reasons, we conclude that the district 

court did not have subject matter jurisdiction over the 

government's eminent domain case and that the case was therefore 

improperly removed to the district court. Ultimately, this lack 

of jurisdiction requires us to vacate the district court's order 

confirming the arbitration award. The eminent domain and inverse 

condemnation cases will be remanded to the district court with 

instructions to remand the eminent domain case to the territorial 

court. Finally, for the reasons we set forth below, the district 

court is to consider abstaining from deciding the inverse 

condemnation case. 

I. FACTUAL BACKGROUND AND PROCEDURAL HISTORY

 A. Introduction

 This appeal involves a dispute that arose out of the Virgin 

Island Government's plans to condemn a portion of privately-owned 

commercial property located in the Virgin Islands. Sometime 

prior to 1988, the government began planning to improve traffic 

circulation on or about Long Bay Road and Route 313 in the Virgin 

Islands. The project, which was to be 100% U.S. federally 

funded, and was known as the "Long Bay Road Highway Improvement 

Project" required the use of additional land. Accordingly, the 

Virgin Islands government commenced negotiations for the "taking" 

of private land that would be needed for the project. 
4 

 Specifically, the government required approximately 2.64 

acres of land known as Parcels No. 6 and No. 9, located in Estate 

Thomas, Kings Quarter, St. Thomas. The property was commercially 

zoned and several buildings were situated upon the land. During 

December 1988 or January 1989, the government commenced 

negotiations with the owners of the property, Millad Associates, 

for the acquisition of the property. 

 Before a deal could be ironed out with the government, 

Millad Associates sold the property to Jolie Stahl and Barry 

Brown, as co-trustees ("trustees") of the Long Bay Trust. The 

purchasers paid $3.25 million for both the property and the 

buildings situated upon the property. A deed to the property was 

executed by the parties on May 9, 1989, and the deed was recorded 

on May 31, 1989. At the time of purchase, the trustees were 

aware of the government's plans to "take" a portion of the 

property. 

B. The Litigation

 Three years after the trustees purchased the subject 

property, the trustees filed an inverse condemnation action in 

the District Court of the Virgin Islands against the government, 

alleging that the government had unreasonably delayed in taking 

portions of the trust property. According to the trustees, the 

government had deprived the trust of the highest and best value 

of its property by unreasonably delaying in the condemnation of 

Lots 6 and 9, while at the same time condemning property across 

the street from the two lots. The trustees contended that this 
5 

sequence of events allowed a competitor to get a head-start on 

business, to the detriment of the trust. Moreover, the trustees 

alleged that they could not secure financing or tenants while the 

government's proposed taking was pending.2 

 The government responded to the trustees' federal court 

action on August 13, 1992, by filing an eminent domain action, 

pursuant to V.I. Code Ann. tit. 28, § 411 (1957 & Supp. 1994), in 

the Virgin Islands Territorial Court. The government alleged in 

its complaint that the property was worth approximately $1.2 

million. Furthermore, the government submitted a Declaration of 

Taking and an Order Vesting Title. The order vesting title was 

signed by Judge Ive Arlington Swan on September 1, 1992. 

 On September 14, 1992, the trustees filed a notice of 

removal seeking to remove the government's territorial court 

eminent domain action to the District Court of the Virgin 

Islands. App. 10-13. The government thereafter moved to dismiss 

the removal petition, arguing that removal was improper because 

the district court did not have subject matter jurisdiction over 

 

2

See App. 215 (Appellees' Inverse Condemnation Complaint 

(D.V.I.)). The government filed a motion to dismiss the inverse 

condemnation suit on May 29, 1992. The government argued that 

the action should be dismissed for failure to state a claim 

because the government's failure to act on the condemnation at 

issue was not amenable to court scrutiny. Furthermore, the 

government alleged that the district court lacked jurisdiction to 

hear the inverse condemnation case. See App. 231-57 (containing 

filings pertinent to the motion to dismiss). The district court 

denied the government's motion in its entirety on March 11, 1993. 

App. 256-57. 
6 

the eminent domain claim.3 The district court denied the motion 

to dismiss. 

 According to the court, diversity of citizenship 

jurisdiction supported removal of the eminent domain case to 

federal court. The court reasoned that complete diversity of 

citizenship existed between the Government of the Virgin Islands 

and the trustees. Furthermore, the court found that the 

trustees' tenants were merely nominal parties to the action whose 

citizenship could be disregarded for purposes of establishing 

diversity jurisdiction. The district court therefore found that 

it had subject matter jurisdiction over the government's eminent 

domain case and the court denied the government's motion to 

dismiss the removal petition. 

 The government renewed its jurisdictional argument in a 

motion for reconsideration. According to the government, the 

trustees erroneously relied upon the citizenship of the Territory 

of the Virgin Islands in invoking the diversity of citizenship 

jurisdiction of the district court. The government argued that 

because the citizenship of the territory could not be relied upon 

for purposes of establishing diversity jurisdiction, the district 

 

3

The government filed its motion to dismiss pursuant to Federal 

Rule of Civil Procedure 12(h). It appears, however, that the 

government's motion should have been filed as a motion to remand 

pursuant to 28 U.S.C. § 1447(c), which states that "[i]f at any 

time before final judgment it appears that the district court 

lacks subject matter jurisdiction, the case shall be remanded." 

Whether the government labeled its motion as motion to dismiss or 

as a motion to remand, does not, however, have any impact on the 

outcome of this case. 
7 

court did not have diversity jurisdiction over the eminent domain 

case. The government argued that removal was therefore improper. 

 The district court denied the motion for reconsideration, 

without discussion, in an order dated December 6, 1993. 

C. The Arbitration

 Following the trustees' successful removal of the eminent 

domain case, two actions involving lots 6 and 9 were left pending 

in the District Court of the Virgin Islands. Eventually, the two 

actions were consolidated for both discovery purposes and for 

trial without a jury. See Appellee's Brief, at 7. Thereafter, 

the government and the trustees entered into a joint stipulation 

to refer their controversies to binding arbitration. App. 125. 

The stipulation specified that the parties would abide by the 

award rendered, and that the district court could enter judgement 

on the arbitration award. App. 126. 

 An arbitration hearing was held on October 5 and 6, 1994. 

Alex Gonzalez, Esq., served as the arbitrator. App. 126. The 

arbitrator issued his findings on October 24, 1994. App. 128. 

The trustees of the Long Bay Trust were awarded a total of 

$2,891,158.00. App. 134. 

D. Post Arbitration Litigation

 The Government of the Virgin Islands filed a motion to 

dismiss the arbitration award on December 7, 1994. App. 104. The 

government claimed that its agents had acted without statutory 

authority when they had signed the arbitration agreement. 
8 

Furthermore, the government argued that the district court was 

without statutory jurisdiction under the Federal Arbitration Act 

("FAA") to confirm the arbitration award. App. 104-105. The 

trustees moved to confirm the arbitration award on February 13, 

1995. 

 The district court denied the government's motion to dismiss 

and granted the trustees' motion to confirm the arbitration award 

in a memorandum opinion and order dated March 31, 1995. App.

161-167. According to the court, both the government and the 

trustees signed the arbitration agreement voluntarily. This in 

itself constituted an enforceable contract under the FAA, the 

court reasoned, which the court could enforce. Despite the 

government's obfuscation, the court noted, the proceeding was 

governed by the FAA, and the trustees could seek entry of 

judgment on the arbitration award. 

 Furthermore, the court noted that the joint stipulation 

stated that the government would abide by and perform any award 

rendered by the arbitrator. Even if the parties mistakenly 

referred to irrelevant statutes in the stipulation (which the 

government contended deprived the district court of 

jurisdiction), the court found that the parties' intention to 

arbitrate their dispute was clearly evidenced by the stipulation. 

The court therefore denied the government's motion to dismiss the 

arbitration award and granted the trustees' motion to confirm the 

arbitration award. App. 167. 

 Finally, the court also took issue with the government's 

written submissions in support of its motion to dismiss. 
9 

According to the court, the government's brief did not contain 

one citation to precedent. Furthermore, the court noted that 

"[c]onsidered as a whole, the Government's motion papers are 

inexcusably opaque and insufficiently supported by case law." 

App. 167. Accordingly, the court determined that the government 

would be sanctioned. The court ordered the Government to pay all 

costs and attorneys' fees associated with the motion. The 

Government was, however, given an opportunity to show cause why 

it had not violated Rule 11 of the Federal Rules of Civil 

Procedure by filing the motion. The Trustees were directed to 

file an affidavit of costs and attorney fees. App. 163-67. At 

the present time, the district court has not rendered its 

decision on the sanctions issue. 

II. DISCUSSION

 The government filed a timely notice of appeal from the 

district court's final order and judgment confirming the 

arbitrator's award. This order was final within the meaning of 

28 U.S.C. § 1291 and we may therefore exercise jurisdiction over 

the government's appeal from that order.4

 

4

The district court also ordered the government to show cause by 

April 14, 1995, why it should not be sanctioned for its written 

submissions on the motion to dismiss the arbitration award. The 

government argues on appeal that the district court abused its 

discretion in imposing sanctions. At the same time, however, the 

government concedes that the district court has not yet issued a 

final order quantifying or even definitively imposing sanctions. 

 A court of appeals clearly does not have jurisdiction to 

review an order which has not yet been issued. The court is 

therefore without jurisdiction to review the sanctions which may 

be imposed upon the government. We hasten to add, however, that 

our lack of jurisdiction over the sanctions issue does not 
10 

 Proper appellate jurisdiction does not, however, relieve us 

from inquiring into the propriety of the district court's 

exercise of jurisdiction in this case. Employers Ins. of Wausau 

v. Crown Cork & Seal Co., 905 F.2d 42, 45 (3d Cir. 1990) (citing 

Bender v. Williamsport Area Sch. Dist., 475 U.S. 534, 541, 106 S. 

Ct. 1326, 1331, 89 L. Ed.2d 501 (1986)). We exercise plenary 

review in determining whether the district court was vested with 

subject matter jurisdiction. Bumberger v. Insurance Co. of North 

America, 952 F.2d 764, 766 (3d Cir. 1991). 

A. The Eminent Domain Case Was Improvidently Removed From 

Territorial Court

 The Federal Rules of Civil Procedure permit a defendant in a 

state court action to remove that action to a federal forum. See

28 U.S.C. § 1441, applicable in the Virgin Islands under 48 U.S. 

C. § 1613. As § 1441(a)'s language indicates, removal under 

that section is proper only if the federal district court would 

have had original jurisdiction if the case was filed in federal 

court. This jurisdictional prerequisite to removal is an 

absolute, non-waivable requirement. See Allbritton 

Communications Co. v. NLRB, 766 F.2d 812, 820 (3d Cir. 1985), 

cert. denied, 474 U.S. 1081, 106 S. Ct. 850, 88 L. Ed.2d 891 

 

deprive us of jurisdiction over the larger, substantive issues 

out of which the sanctions issue arose. See McDonnell v. United 

States, 4 F.3d 1227 (3d Cir. 1993) (finding that unresolved 

attorney fee issues in case does not deprive court of appeals 

from exercising jurisdiction over appeal from underlying 

controversy) (citing Budinich v. Becton Dickinson & Co., 486 U.S. 

196, 198-202, 108 S. Ct. 1717, 1719-22, 100 L.Ed.2d 178 (1988) 

(other citations omitted)); see also Confer v. Custom Eng'g Co., 

952 F.2d 41, 44 (3d Cir. 1991). 
11 

(1986). "Because lack of jurisdiction would make any decree in 

the case void and the continuation of the litigation in federal 

court futile, the removal statute should be strictly construed 

and all doubts resolved in favor of remand." Abels v. State Farm 

Fire & Cas. Co., 770 F.2d 26, 29 (3d Cir. 1985) (citations 

omitted). If there is any doubt as to the propriety of removal, 

that case should not be removed to federal court. See Boyer v. 

Snap-On Tools Corp., 913 F.2d 108, 111 (3d Cir. 1990), cert.

denied, 498 U.S. 1085, 111 S. Ct. 959, 112 L. Ed.2d 1046 (1991); 

Abels, 770 F.2d at 29. 

 Diversity of citizenship subject matter jurisdiction falls 

within the original jurisdiction of the district court and a 

state court case that implicates diversity jurisdiction may 

therefore be removed to federal court. Abels, 770 F.2d at 29. 

Diversity jurisdiction is properly invoked in cases where there 

is complete diversity of citizenship between plaintiffs and 

defendants and where the amount in controversy exceeds $50,000. 

28 U.S.C. § 1332. See Development Fin. Corp. v. Alpha Housing & 

Health Care, Inc., 54 F.3d 156, 158 (3d Cir. 1995) ("It is 

axiomatic that the federal judiciary's diversity jurisdiction 

depends on complete diversity between all plaintiffs and all 

defendants.") (citing Strawbridge v. Curtiss, 7 U.S. (3 Cranch) 

267, 2 L.Ed. 435 (1806)). For purposes of determining whether 

the complete diversity requirement has been met, the citizenship 

of nominal parties to the litigation may be disregarded. Abels, 

770 F.2d at 29. 
12 

 The district court ruled that the Virgin Islands Government 

could be considered a citizen for purposes of establishing 

diversity of citizenship jurisdiction. We disagree with the 

district court's conclusion. More than one hundred years ago, 

the United States Supreme Court ruled that a state cannot be 

considered a citizen for purposes of establishing diversity of 

citizenship jurisdiction in federal court. Postal Telegraph 

Cable Co. v. State of Alabama, 155 U.S. 482, 487, 15 S. Ct. 192, 

194 (1894). See Ramada Inns, Inc. v. Rosemount Memorial Park 

Assoc., 598 F.2d 1303, 1306 (3d Cir. 1979) ("[I]t is well settled 

that a state is not a citizen within the meaning of the diversity 

statute.") (citations omitted); see also Gable v. Commonwealth of 

Pennsylvania, 521 F. Supp. 43, 43-44 (E.D. Pa. 1981) ("The rule 

that a state is not a `citizen' for diversity purposes is a longstanding one; it enjoys a history of acceptance, which remains 

undiluted by the passage of time.") (citations omitted). 

 In this case, the district court relied upon the citizenship 

of the Territory of the Virgin Islands in finding that diversity 

of citizenship jurisdiction supported removal of the trustees' 

eminent domain case to federal court. Thus, the question is 

whether the Government of the Virgin Islands constitutes a 

"state" for purposes of establishing diversity of citizenship 

jurisdiction. The trustees argue that the Virgin Islands is not 

a State, but a Territory of the United States and that the 

policies which preclude sovereign immunity for territories in 

federal court similarly preclude a Territory from being 
13 

considered a "state" for purposes of establishing diversity 

jurisdiction. We are not persuaded by these arguments. 

 Section 1332 of Title 28 of the United States Code 

specifies, in pertinent part, that "district courts shall have 

original jurisdiction of all civil actions" between "citizens of 

different States." 28 U.S.C. § 1332(a). According to § 1332(d), 

the "word `States,' as used in this section, includes the 

Territories, the District of Columbia, and the Commonwealth of 

Puerto Rico." Accordingly, the Territory of the Virgin Islands, 

a United States Territory, qualifies as a "state" for purposes of 

the diversity jurisdiction statute. 

 As noted above, a state cannot be considered a citizen for 

purposes of establishing diversity of citizenship jurisdiction 

subject matter jurisdiction in federal court. Therefore, it 

follows that a Territory of the United States, which is 

considered a state pursuant to § 1332(d), also cannot be 

considered a citizen for purposes of establishing diversity of 

citizenship jurisdiction. The Territory of the Virgin Islands 

should not have been considered a citizen for purposes of 

establishing diversity jurisdiction in the court below. Cf. Mann 

v. District of Columbia, 742 F.2d 750, 752 (3d Cir. 1984) 

(concluding that District of Columbia did not qualify as a 

citizen for purposes of diversity of citizenship jurisdiction 

because § 1332(d) specified that the District of Columbia (like 

the territory of the Virgin Islands) was to be construed as a 

"state" for purposes of the diversity statute). 
14 

 Therefore, the district court did not have subject matter 

jurisdiction over the eminent domain case and the case was 

improvidently removed from the Territorial Court.5

B. The District Court's Post-Removal Actions

 We have concluded that the government's eminent domain case 

was improvidently removed to federal court. In the ordinary 

case, this conclusion would lead us to remand the action to the 

district court with instructions to remand the case to the state 

court. See Abels, 770 F.2d at 27. This case does not, however, 

fit within the mold of a garden variety improvidently removed 

case. 

 The district court engaged in actions subsequent to the 

removal of the government's case which served to integrate the 

jurisdictionally improper eminent domain case with the trustees' 

jurisdictionally proper inverse condemnation case. Following 

removal of the eminent domain case, the eminent domain and 

inverse condemnation cases were consolidated for discovery 

purposes and for trial without a jury. Thereafter, the parties 

entered into a stipulation to submit all of their claims to an 

arbitrator. Finally, the parties' claims were reduced to one 

award from the arbitrator and the court entered an order and 

judgment confirming that award. 

 

5

In view of this conclusion, there is no need for us to address 

the question of whether the trustees' tenants were nominal 

parties in the eminent domain proceeding. 
15 

 We must determine whether the district court's merger of the 

inverse condemnation case with the substantively similar, but 

jurisdictionally deficient eminent domain case precluded the 

district court from exercising its jurisdiction over the inverse 

condemnation case. For the reasons set forth below, we have 

determined that the district court could not properly exercise 

its jurisdiction over the inverse condemnation case. 

 It is clear in this case that due to the similarity of the 

issues in the two cases, the district court's post-consolidation 

exercise of jurisdiction over the jurisdictionally proper inverse 

condemnation case also constituted an exercise of authority over 

the government's jurisdictionally improper eminent domain case. A 

court may not, however exercise authority over a case for which 

it does not have subject matter jurisdiction. See Bender v. 

Williamsport Area Sch. Dist., 475 U.S. 534, 541, 106 S. Ct. 1326, 

1331, 89 L. Ed.2d 501 (1986)). Neither consolidation with a 

jurisdictionally proper case nor an agreement by the parties can 

cure a case's jurisdictional infirmities. See McKenzie v. United 

States, 678 F.2d 571, 574 (5th Cir. 1982) (consolidation of 

jurisdictionally deficient claim with jurisdictionally proper 

claim does not cure jurisdictional defects) (citations omitted); 

Reich v. Local 30, IBT, 6 F.3d 978, 982 n.5 (3d Cir. 1993) 

(parties to action cannot waive subject matter jurisdiction 

requirements by consenting to court's jurisdiction) (citations 

omitted). Nonetheless, the district court's consolidation of the 

cases and the parties' subsequent arbitration agreement had the 

practical effect of permitting the district court to exercise 
16 

authority over a case for which it did not have subject matter 

jurisdiction. We are unwilling to approve of this result. 

 The district court could not exercise jurisdiction without 

exercising jurisdiction over the improperly removed eminent 

domain case. The actions by the court and the parties to this 

action allowed the jurisdictional infirmity of the eminent domain 

case to taint the court's attempts to exercise its subject matter 

jurisdiction over the inverse condemnation case. It follows that 

we must vacate any orders entered by the district court that were 

entered after the eminent domain case was removed to the district 

court and in which the district court purported to exercise 

jurisdiction over both the eminent domain and inverse 

condemnation case. 

C. Restoring the Parties to their Pre Removal 

Postures; Abstention

 We have determined that the district court erroneously 

denied the government's motion to dismiss the trustees' removal 

petition. Furthermore, we have determined that the district 

court acted without jurisdiction when it purported to exercise 

authority over the consolidated inverse condemnation and eminent 

domain cases. Because any post-removal actions taken by the 

court in this case were therefore ineffectual, we have determined 

that restoring the parties to the positions that they occupied 

prior to the removal is the proper course of action for us to 

take on this appeal. 
17 

 Consequently, we will vacate the district court's order 

confirming the arbitration award as the district court did not 

have jurisdiction to enforce the award in this case. See

Southland Corp. v. Keating, 465 U.S. 1, 15 n.9, 104 S.Ct. 852, 

861 n.9 (1984). Furthermore, we will remand the eminent domain 

and inverse condemnation actions to the district court. The 

district court shall separate the two actions by remanding the 

government's condemnation action to the Territorial Court of the 

Virgin Islands and by retaining jurisdiction over the trustees' 

inverse condemnation action. 

 This disposition of the appeal will restore the parties to 

the positions that they occupied prior to the district court's 

improvident removal and improper exercise of jurisdiction. Two 

actions involving the same parcels of land will therefore be left 

pending in federal court and territorial court. Despite our 

resolution of the jurisdictional issues arising from the district 

court's improper removal, we are nonetheless concerned about the 

possibility of the district court's exercise of jurisdiction in 

this case even though the Territorial Court will also be 

exercising its jurisdiction over similar issues. 

 On similar facts, the United States Court of Appeals for the 

Eleventh Circuit ordered the district court to exercise its power 

of abstention. T.J. Fountain v. Metropolitan Atlanta Rapid 

Transit Auth., 678 F.2d 1038, 1046 (11th Cir. 1982). The court 

ruled that the district court should abstain from deciding an 

inverse condemnation case until such time that it became apparent 

that the inverse condemnation plaintiff would not receive the 
18 

relief it sought in the State of Georgia's previously-filed 

condemnation action. According to the court, "[a]s has been 

noted many times before, a suit involving state condemnation of 

private property is primarily a local matter that is best left to 

the state courts." Id. The court further reasoned that although 

abstention was not required in all condemnation cases, abstention 

was necessary in T.J. Fountain because there was the possibility 

of inconsistent state and federal judgments. We agree with the 

T.J. Fountain court's analysis. 

 Like the T.J. Fountain court, we too are concerned about the 

problems that may arise from inconsistent judgments in this case. 

Unlike the T.J. Fountain court, however, we believe that the 

abstention decision is one that should be exercised by the 

district court in the first instance. Therefore, instead of 

ordering the district court to abstain in this matter, we will 

suggest to the district court to consider abstaining in light of 

the parallel Territorial Court action. As previously noted, the 

Territorial Court had actually entered an order vesting title in 

the government prior to the district court's improper removal. In 

remanding the case, we leave this fact for the district court's 

consideration in its abstention analysis. 

III. CONCLUSION

 The district court's order and judgment confirming the 

arbitration award will be vacated. The trustees' inverse 

condemnation action and the government's eminent domain action 
19 

will be remanded to the District Court of the Virgin Islands with 

instructions for the district court to remand the government's 

eminent domain case to the Territorial Court for the Virgin 

Islands. Finally, in accord with our discussion on T.J. 

Fountain, the district court shall consider whether it should 

abstain from deciding the trustees' inverse condemnation case. 

 We must stress the narrowness of our ruling. We have 

determined that the district court acted without subject matter 

jurisdiction and was therefore without power to enter the postremoval order specified above. It does not necessarily follow 

from this conclusion, however, that the parties' post-removal 

agreement to arbitrate is similarly void and without legal 

effect. Thus, our opinion does not preclude further litigation 

on the point. Indeed, it is possible that if the arbitration 

award can be enforced in a jurisdictionally correct proceeding, 

this entire controversy may be put to rest without the need for 

extensive proceedings on the remand. Nonetheless, we do not 

express an opinion on whether the parties' agreement to arbitrate 
20 

can survive our conclusion that the district court was without 

power to enter decisions on that agreement. 

_________________________