1999 Decisions

Opinions of the United

States Court of Appeals

for the Third Circuit

2-17-1999

Govt of V.I. v. United Ind Workers

Precedential or Non-Precedential:

Docket 98-7148

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"Govt of V.I. v. United Ind Workers" (1999). 1999 Decisions. Paper 41.

http://digitalcommons.law.villanova.edu/thirdcircuit_1999/41
Filed February 17, 1999 

UNITED STATES COURT OF APPEALS 

FOR THE THIRD CIRCUIT 

No. 98-7148 

GOVERNMENT OF THE VIRGIN ISLANDS; 

DEPARTMENT OF JUSTICE 

 Appellants 

v. 

UNITED INDUSTRIAL WORKERS, N.A., SEAFARERS 

INTERNATIONAL UNION OF NORTH AMERICA, AFL-CIO; 

LAWRENCE ACKER 

On Appeal from the District Court 

of the Virgin Islands, Appellate Division 

(St. Croix) 

(D.C. No. 92-cv-00022) 

District Judge: Honorable Thomas K. Moore 

Argued Thursday, December 10, 1998 

BEFORE: ROTH, LEWIS and GARTH, Circuit Judges 

(Opinion filed February 17, 1999) 
 Julio A. Brady 

 Attorney General 

 Paul J. Gimenez (Argued) 

 Maureen P. Cormier 

 Solicitor General 

 Department of Justice 

 48B-50C Kronprindsens Gade 

 GERS Building - 2nd Floor 

 St. Thomas, U.S.V.I. 00802 

 Attorneys for Appellants 

 Eszart A. Wynter, Sr. (Argued) 

 Law Offices of Eszart A. Wynter 

 #27 Estate Whim, P.O. Box 1847 

 Frederiskted, St. Croix, U.S.V.I. 

 00841 

 Attorney for Appellees 

OPINION OF THE COURT 

GARTH, Circuit Judge: 

This case presents the issue of whether the Virgin Islands 

Writ of Review statute, 5 V.I.C. SS 1421-23, provides the 

Territorial Court of the Virgin Islands with jurisdiction to 

review an employment arbitration decision that binds the 

Government of the Virgin Islands in its role as an employer. 

We are also faced with the question of whether the Federal 

Arbitration Act ("FAA"), 9 U.S.C. SS 1-16, applies in the 

Territorial Court. 

We hold that the Writ of Review statute gives the 

Territorial Court jurisdiction to review actions of

government actors only, as distinct from private actors. 

Because the arbitrator whose conduct is at issue here was 

not a government actor, the Writ of Review statute cannot 

apply to the instant case. We also hold that the provisions 

of the FAA and the standards developed by our 

jurisprudence in reviewing arbitrations under the FAA are 

enforceable in the Territorial Court. 

 2 
I. 

Defendant Lawrence Acker commenced his employment 

with plaintiff Virgin Islands Department of Justice ("DOJ") 

as an Assistant Attorney General in the fall of 1987. The 

DOJ alleges that Acker took unauthorized leaves of 

absences beginning in 1988 and continuing into early 

1990. In the spring of 1990, the DOJ suspended Acker, 

giving sixteen reasons for doing so, pending review of his 

alleged unauthorized absences and withheld his pay.

Acker's union, defendant United Industrial Workers of 

North America, Seafarers International Union, AFL-CIO 

("Union"), filed a grievance on Acker's behalf. 

Pursuant to the Collective Bargaining Agreement ("CBA") 

between the DOJ and the Union, the DOJ and the Union 

met to discuss the grievance ("Grievance Meeting"), but 

their efforts produced no solution. The Union demanded 

arbitration, again pursuant to the CBA, and the DOJ and 

the Union selected an arbitrator, Robert A. Ellison

("Arbitrator"), to conduct the arbitration. 

Before deciding the substantive issue of Acker's 

suspension and termination, the Arbitrator considered and 

decided two procedural arguments raised by the DOJ. First, 

the DOJ claimed that Acker's grievance had not been timely 

filed. The Arbitrator decided that Acker's grievance had 

been filed within the specified ten days provided in the CBA 

after he received his termination letter on March 15, 1990.1 

Second, the DOJ argued that although Acker was present 

at the Grievance Meeting, his behavior at the Grievance 

Meeting amounted to a failure to participate, which was a 

waiver of the right to arbitrate.2 The Arbitrator rejected this 

argument as well. On the substantive issue of Acker's 

termination, the Arbitrator ruled that the DOJ's decision to 

terminate Acker was unjust and he ordered Acker to be 

reinstated with back-pay. 

_________________________________________________________________ 

1. The DOJ had argued that the dispute "ripened" on February 12, 1990, 

the date on which Acker's termination was effective. However, the 

termination letter was dated March 15, 1990. 

2. The appellate record does not specify the particulars of Acker's 

conduct at the Grievance Meeting. 

 3 
The DOJ filed a Writ of Review under 5 V.I.C.SS 1421-23 

in the Virgin Islands Territorial Court ("Territorial Court"), 

seeking vacation of the arbitration award. The Writ of 

Review statute provides: 

 Any party to any proceeding before or by any officer, 

 board, commission, authority, or tribunal may have the 

 decision or determination thereof reviewed for errors 

 therein as prescribed in this chapter and the rules of 

 court. Upon the review, the court may review any 

 intermediate order involving the merits necessarily 

 affecting the decision or determination sought to be 

 reviewed. 

5 V.I.C. S 1421 (1997).3 The DOJ asserted in the Territorial 

Court that the Arbitrator was biased because he had rented 

office space from counsel for the Union. The DOJ also 

argued to the Territorial Court, as it had to the Arbitrator, 

that the Arbitrator did not have jurisdiction over Acker's 

grievance because Acker did not meaningfully participate in 

the Grievance Meeting. 

The Territorial Court held that it did not have subject 

matter jurisdiction because 5 V.I.C. S 1421 only permitted 

review of actions of governmental officers or entities. The 

Territorial Court further held that the Federal Arbitration 

_________________________________________________________________ 

3. 5 V.I.C. S 1422 provides: 

 The writ of review shall be allowed in all cases where there is no 

 appeal or other plain, speedy, and adequate remedy, and where the 

 officer, board, commission, authority, or tribunal in the exercise 

of 

 his or its functions appears to have exercised such functions 

 erroneously, or to have exceeded his or its jurisdiction, to the 

injury 

 of some substantial right of the plaintiff. 

5 V.I.C. S 1423 provides: 

 Upon the review provided for in this chapter the court shall have 

 power to affirm, modify, reverse, or annul the decision or 

 determination reviewed, and, if necessary, to award restitution to 

 the plaintiff, or, by mandate, direct the officer, board, 

commission, 

 authority, or tribunal to proceed in the matter reviewed according 

to 

 its decision. From the judgment of the district court on review an 

 appeal may be taken in like manner and with like effect as from a 

 judgment of such district court in a civil action. 
 4 
Act, 9 U.S.C. SS 1-16, barred any review of the Arbitrator's 

decision. 

The DOJ appealed to the District Court of the Virgin 

Islands, Appellate Division ("District Court"), which agreed 

with the Territorial Court that 5 V.I.C. S 1421 did not 

provide the Territorial Court with subject matter 

jurisdiction: "[W]e hold that the Territorial Court does not 

have jurisdiction to review a private arbitrator's decision 

under the Writ of Review statute." Government of the Virgin 

Islands v. United Industrial Workers of Am., D.C. Civ. App. 

No. 1992-022 (D.V.I. App. Div. Dec. 1, 1997), at 10. 

However, the District Court went on to hold that the 

Territorial Court did have jurisdiction to review the 

Arbitrator's decision. First, Virgin Islands substantive law, 

which incorporates rules of the common law in absence of 

local law to the contrary, see 1 V.I.C.S 4, provides that a 

court may enforce an arbitration award. See Restatement 

(Second) Contracts S 345(f).4 Second, section 2 of the FAA5 

requires a court to review the validity, irrevocability, and 

enforcement of agreements to arbitrate. The District Court 

held that the FAA's substantive provision in section 2 

applies to both federal and state courts, Southland Corp. v. 

Keating, 465 U.S. 1, 16 (1984),6 and that the Territorial 

_________________________________________________________________ 

4. Restatement (Second) Contracts S 345(f) provides: 

 The judicial remedies available for the protection of interests 

stated 

 in S 344 [expectation, reliance, or restitution interests] include 

a 

 judgment or order . . . (f) enforcing an arbitration award 

5. 9 U.S.C. S 2 provides: 

 Validity, irrevocability, and enforcement of agreements to 

arbitrate 

 A written provision in any maritime transaction or a contract 

 evidencing a transaction involving commerce to settle by 

arbitration 

 a controversy thereafter arising out of such contract or 

transaction, 

 or the refusal to perform the whole or any part thereof, or an 

 agreement in writing to submit to arbitration an existing 

controversy 

 arising out of such a contract, transaction, or refusal, shall be 

valid, 

 irrevocable, and enforceable, save upon such grounds as exist at 

law 

 or in equity for the revocation of any contract. 
6. See also Virgin Islands Hous. Auth. v. Coastal General Constr. Services 

Corp., 27 F.3d 911, 915-16 (3d Cir. 1994). 

 5 
Court is a state court for this purpose. See Harris v. 

Boreham, 233 F.2d 110, 113-14 (3d Cir. 1956). 

The District Court recognized that the United States 

Supreme Court has not ruled definitively on whether the 

procedural FAA provisions apply in a state or territorial 

court. The District Court ruled, however, based upon 

Supreme Court dicta and other precedents, that the 

procedural provisions in sections 3 and 4 of the FAA (orders 

to stay and to compel arbitration), applied in the Territorial 

Court. 

The DOJ timely filed its notice of appeal of the District 

Court's December 1, 1997 order on December 30, 1997. We 

exercise jurisdiction pursuant to 28 U.S.C. S 1291 and 

Section 23A(c) of the Revised Organic Act of 1954, 48 

U.S.C. S 1613a(c). 

II. 

As both the Territorial Court and the District Court 

concluded, the plain language of the Writ of Review statute 

contemplates review of actions taken by the Government of 

the Virgin Islands qua government. The Arbitrator was 

neither a government employee, nor was he associated with 

the government. Accordingly, S 1421, which authorizes a 

Writ of Review only when the proceeding is before an 

"officer, board, commission, authority, or tribunal

[government actors]," is inapplicable here. 

We therefore reject the two arguments made by the DOJ. 

First, the DOJ criticizes the Territorial Court for

disregarding Territorial Court prior decisions that read the 

Writ of Review statute more broadly, entertaining 

jurisdiction under S 1421 of other than governmental 

determinations. Those decisions, as the District Court 

pointed out, are not binding on either the Appellate 

Division or, as we observe, on this court. Second, the DOJ 

argues that because the DOJ was a party to the contract, 

a statute providing review of government actions applies to 

the decision of the Arbitrator concerning such an 

employment contract. Because the DOJ does not have to 

agree to arbitration in its employment contracts, it argues, 

it may obtain review of the arbitration decision under the 

 6 
Writ of Review statute. We reject this argument as well 

because the Government of the Virgin Islands is acting here 

as a litigant, the employer, and not as a governmental 

adjudicatory body. 

III. 

A. 

We must next consider whether the FAA applies to local 

matters litigated in the Territorial Court. Congress enacted 

the FAA pursuant to its power to define the jurisdiction of 

the federal courts and pursuant to the Commerce Clause. 

Congress, and thereafter the courts, intended to override 

the then-current federal courts practice of not favorably 

regarding arbitration clauses in contracts. "The basic 

purpose of the Federal Arbitration Act is to overcome 

courts' refusals to enforce agreements to arbitrate." AlliedBruce Terminix Cos. v. Dobson, 513 U.S. 265, 270 (1995) 

(citing Volt Information Sciences, Inc. v. Board of Trustees of 

Leland Stanford Junior Univ., 489 U.S. 468, 474 (1989)). As 

the District Court stated and as we agree, the Territorial 

Court is a state court for purposes of the FAA. See Harris 

v. Boreham, 233 F.2d 110, 113-14 (3d Cir. 1956). 

The FAA thus mandates that federal courts not review 

substantive decisions of arbitrators. Review of arbitration 

decisions is severely restricted and limited to, among other 

things, fraud, impartiality, or lack of jurisdiction. See 9 

U.S.C. S 10(a); see, e.g., Matteson v. Ryder Sys., Inc., 99 

F.3d 108 (3d Cir. 1996); High Concrete Structures, Inc. v. 

United Elec., Radio & Mach. Workers of Am., 879 F.2d 1215 

(3d Cir. 1989); Apex Fountain Sales, Inc. v. Kleinfeld, 818 

F.2d 1089 (3d Cir. 1987); Sun Ship, Inc. v. Matson 

Navigation Co., 785 F.2d 59 (3d Cir. 1986); Virgin Islands 

Nursing Association's Bargaining Unit v. Schneider, 668 

F.2d 221 (3d Cir. 1981); Bender v. Smith Barney, Harris 

Upham & Co., Inc., 901 F. Supp. 863 (D.N.J. 1994), aff'd, 

67 F.3d 341 (3d Cir. 1995). Although the FAA applies by its 

terms to cases in federal courts, 9 U.S.C. #8E8E # 3-4, in 

Southland Corp. v. Keating, 465 U.S. 1 (1984), and AlliedBruce Terminix Companies v. Dobson, 513 U.S. 265 (1995), 

 7 
the Court reaffirmed that the FAA also applies in state 

courts to the extent that an arbitration provision affects 

interstate commerce. See also Virgin Islands Hous. Auth. v. 

Coastal Gen. Constr. Services Corp., 27 F.3d 911, 915 (3d 

Cir. 1994). Thus, in order for the FAA to apply in the 

Territorial Court, the arbitration at issue must affect 

interstate commerce as defined by Allied-Bruce. 

The District Court, in its opinion, stated that the Virgin 

Islands had not adopted statutes making the FAA 

applicable to the Virgin Islands Territorial Courts, and we 

are aware that the issue remains unsettled. The District 

Court, however, directed the Territorial Court, which is 

where arbitration decisions are to be enforced (or vacated) 

to "look to the substantive and procedural body of federal 

arbitration law for guidance in enforcing arbitration 

agreements." Government of the Virgin Islands v. United 

Industrial Workers of Am., D.C. Civ. App. No. 1992-022 

(D.V.I. App. Div. Dec. 1, 1997), at 16. 

We are of course aware of the Southland and Allied-Bruce 

requirement that a contract comes within the purview of 

the FAA only when an interstate nexus is shown. The

Supreme Court has stated that the FAA's reach coincides 

with that of the Commerce Clause. Allied-Bruce, 513 U.S. at 

274. This broad interpretation of the FAA "is consistent 

with the [FAA]'s basic purpose, to put arbitration provisions 

`on the same footing' as a contract's other terms." Id. 

(quoting Scherk v. Alberto-Culver Co., 417 U.S. 506, 511 

(1974)). 

While it is true that in this case the record is scant as to 

an interstate nexus, we recognize that the appellee United 

Industrial Workers of North America, Seafarers 

International Union, AFL-CIO itself, which represents 

Acker, is an international body embracing Union workers 

not only in the various states of the union, but in foreign 

countries as well. Its activities, by their very nature, qualify 

as having an interstate nexus. Moreover, we can take 

judicial notice that the Attorney General's office of the 

Virgin Islands, of which Acker was a member until his 

termination, has been and is involved with matters 

concerning the various states. See, e.g., Travel Services, Inc. 

v. Government of the Virgin Islands, 904 F.2d 186 (1990) 

 8 
(assessment of tax on commissions earned from sale of 

airline tickets); Business Ventures International v. Olive, 893 

F.2d 641 (1990) (determination of tax liability for income 

unconnected with Virgin Islands' activity); Inter-Island 

Transport Line, Inc. v. Government of the Virgin Islands, 539 

F.2d 322 (3d Cir. 1976) (alleged breach of water-hauling 

contract between Government of the Virgin Islands and 

carrier); Pan American World Airways, Inc. v. Government of 

the Virgin Islands, 459 F.2d 387 (3d Cir. 1972) (whether tax 

on airlines' gross receipts violates Commerce Clause or 

Fourteenth Amendment of the United States); Holmes v. 

Government of the Virgin Islands, 370 F. Supp. 715 (D.V.I. 

1974) (validity of act of legislature authorizing agreement 

between the Government of the Virgin Islands and a 

corporation intending to build an oil refinery); Southerland 

v. St. Croix Taxicab Ass'n, 315 F.2d 364 (3d Cir. 1963) 

(action by tour agency to prevent the Government of the 

Virgin Islands from interfering with tour agency's right to 

transport persons who purchased package tour); Virgo 

Corp. v. Paiewonsky, 254 F. Supp. 405 (D.V.I. 1966)

(validity of tax of watches exported to United States 

customs area); see also The West Indian Co. v. Government 

of the Virgin Islands, 844 F.2d 1007 (3d Cir. 1988)

(enforceability of contract between the Government of the 

Virgin Islands and a Danish-owned corporation). 

Although we recognize that the individual employment 

contract of Lawrence Acker can be construed narrowly as 

an employment contract of a local nature only, we are not 

persuaded that the character of his union, which negotiated 

the CBA, which sought to enforce the CBA, and which filed 

the grievance on behalf of Acker, and the nature of Acker's 

employment can be overlooked in determining whether the 

necessary interstate nexus for application of the FAA is 

present. Hence, we are satisfied that the FAA should be 

applied by the Territorial Court because its requirements 

have been met. See Virgin Islands Hous. Auth. v. Coastal 

Gen. Constr. Services Corp., 27 F.3d 911, 915 (3d Cir. 

1994). 

The appellant has called our attention to Great Western 

Mortgage Corp. v. Peacock, 110 F.3d 222 (3d Cir. 1997), 

where the appellant argued that the FAA did not apply to 

 9 
her employment contract because she fell within the scope 

of the exceptions to the FAA mandatory arbitration.7 We 

rejected her argument, relying upon Tenney Engineering, 

Inc. v. United Electrical Radio & Machine Workers of Am., 

207 F.2d 450 (3d Cir. 1953) (en banc), and we held that the 

exceptions to the FAA only applied to those employees 

working directly in the channels of commerce itself. Peacock 

did not fall within that classification, and neither does 

Acker in the present case. We are satisfied that while Acker 

was not employed directly in the channels of commerce, the 

FAA in this case nevertheless satisfies the interstate 

commerce nexus. 

B. 

Additionally, the District Court held that the provisions of 

the FAA apply within the Territorial Court by virtue of the 

common law of the Virgin Islands. We agree. Because there 

is no Virgin Islands statute on point, the Restatement 

(Second) of Contracts S 345(f) provides a rule of law for the 

Virgin Islands. 1 V.I.C. S 4.8 Section 345(f) provides: 

 The judicial remedies available for the protection of 

 interests stated in S 344 [expectation, reliance, or 

 restitution interests] include a judgment or order . . . 

 (f) enforcing an arbitration award. 

_________________________________________________________________ 

7. That exception is found in S 1 of the FAA, which provides, in pertinent 

part: 

 "Maritime transactions" and "commerce" defined; exceptions to 

 operation of title 

 . . . but nothing herein contained shall apply to contracts of 

 employment of seamen, railroad employees, or any other class of 

 workers engaged in foreign or interstate commerce. 

8. 1 V.I.C. S 4 provides: 

 The rules of the common law, as expressed in the restatements of 

 law approved by the American Law Institute, and to the extent not 

 so expressed, as generally understood and applied in the United 

 States, shall be the rules of decision in the courts of the Virgin 

 Islands in cases to which they apply, in the absence of local laws 

to 

 the contrary. 

 10 
Comment (e) to S 345 states that "[b]ecause questions 

concerning the enforcement of arbitration awards depend 

largely on statute, they are not considered in detail in this 

Restatement." The Restatement contemplates that state 

courts will look to arbitration statutes for guidance. See 

Allied-Bruce Terminix Cos. v. Dobson, 684 So. 2d 102, 106 

(Ala. 1995) (opinion after remand) (adopting provisions of 

the FAA to define state law to the extent the FAA is 

consistent with otherwise-provided procedures of the state). 

The common law, as articulated by the Restatement, 

provides that arbitration law depends on statutory 

schemes, and thus the Territorial Court should apply the 

FAA scheme to questions of arbitration. 

If there is a difference between applying the FAA directly 

to the Territorial Court, as we now do, see supra III.A, or 

holding, as the District Court did, that the FAA "supplies 

the framework" for the Territorial Court, id. at 20, it is a 

difference without a distinction. We therefore take no great 

leap in holding the FAA applicable to the Virgin Islands in 

light of those provisions of the FAA that have been held to 

apply in the Territorial Court by the District Court 

Appellate Division and the common law of the Virgin Islands.9 

_________________________________________________________________ 

9. The opinion of Chief Judge Moore for the District Court included the 

provisions of S 10(a) of the FAA listing five factors for the Territorial 

Court to consider in reviewing the instant arbitration decision. In 

addition, it listed in the footnote those sections of the FAA that applied 

in the Territorial Court: 

 In addition to sections 9, 10(a), and 11, other sections of the FAA 

 clearly apply in Territorial Court. These include: section 3, 

providing 

 for a stay of proceedings where [the] issue therein [is] referable 

to 

 arbitration; section 4, for order to compel arbitration and 

judicial 

 enforcement; section 5, appointment of arbitrators or umpire; 

 section 6, application heard as motion; section 7, witnesses before 

 arbitrators, their fees, and compelling attendance; section 12, 

notice 

 of motions to vacate or modify and their service, and procedure for 

 staying proceedings; section 13, what papers must befiled for an 

 order confirming, modifying, or correcting award; and section 16, 

 appeals from actions of Territorial Court. There are some 

provisions 

 of the FAA which obviously would not apply in the Territorial Court 

 because they deal with strictly federal proceedings, e.g., 9 U.S.C. 

S 8 

 (proceedings begun by libel in admiralty and seizure of vessel or 

 property); id. S 10(b) (referring to 5 U.S.C. SS 372 & 380). 
Government of the Virgin Islands v. United Industrial Workers of Am., 

D.C. Civ. App. No. 1992-022 (D.V.I. App. Div. Dec. 1, 1997), at 19 n.21. 

 11 
IV. 

We hold that the Writ of Review statute, 5 V.I.C.SS 1421- 

23, does not provide the Territorial Court with jurisdiction 

to review a private arbitrator's decision. The Federal 

Arbitration Act, 9 U.S.C. S 1-16, however, applies to 

appellant Lawrence Acker's employment contract by virtue 

of its interstate character and through application of the 

common law. 

We will therefore affirm the order dated December 1, 

1997, of the District Court of the Virgin Islands, Appellate 

Division of St. Croix, and remand to the Territorial Court 

for proceedings consistent with this opinion. 

A True Copy: 

Teste: 

 Clerk of the United States Court of Appeals 

 for the Third Circuit 

 12