PRECEDENTIAL 

UNITED STATES COURT OF APPEALS 

FOR THE THIRD CIRCUIT 

_______________________ 

Nos. 20-1749 and 20-1766 

_______________________

GOVERNMENT EMPLOYEES RETIREMENT 

SYSTEM OF THE VIRGIN ISLANDS, 

 Appellant in No. 20-1766 

v. 

THE GOVERNMENT OF THE VIRGIN ISLANDS; 

COMMISSIONER OF FINANCE OF THE 

GOVERNMENT OF THE VIRGIN ISLANDS, 

 Appellants in No. 20-1749 

_______________________ 

On Appeal from the District Court 

of the Virgin Islands 

(D.C. No. 3:81-cv-00005) 

District Judge: The Honorable Curtis V. Gomez 

__________________________ 

Argued December 8, 2020 

Before: SMITH, Chief Judge, CHAGARES and MATEY, 

Circuit Judges

(Filed: April 9, 2021) 
‐iiRobert D. Klausner [ARGUED] 

KLAUSNER, KAUFMAN, JENSEN & LEVINSON

7080 N. W. 4th Street 

Plantation, FL 33317 

Cathy M. Smith 

GOVERNMENT EMPLOYEES RETIREMENT SYSTEM

3438 Kronprindsens Gade 

GERS Complex, Suite 1 

St. Thomas, VI 00802 

Counsel for Government Employees Retirement System 

Brigid F. Cech Samole 

Katherine M. Clemente 

Elliot H. Scherker [ARGUED] 

GREENBERG TRAURIG, LLP 

333 Southeast 2nd Avenue 

Suite 4400 

Miami, FL 33131 

Angel Taveras 

WOMBLE BOND DICKINSON LLP 

Independence Wharf 

470 Atlantic Avenue 

Suite 600 

Boston MA 02110 

Carol L. Thomas-Jacobs 

OFFICE OF ATTORNEY GENERAL OF VIRGIN ISLANDS

Department of Justice 

34-38 Kronprindsens Gade 

GERS Complex, 2nd Floor 

St. Thomas, VI 00802 
‐iiiCounsel for Government of the Virgin Islands and 

Commissioner of Finance of Government of the Virgin 

Islands 

Ian H. Gershengorn 

JENNER & BLOCK LLP 

1099 New York Avenue, N.W. 

Suite 900 

Washington DC 20001 

Counsel for Amicus Appellees 

TABLE OF CONTENTS

I. Background and Procedural History _____________ 3

A. Legal Background ____________________________ 3 

1. Creation of GERS in 1959 ____________________ 3 

2. The 1968 amendments _______________________ 5 

3. The 2005 amendments _______________________ 5 

B. Procedural History ___________________________ 7

1. The 1981 complaint _________________________ 7 

2. The 1984 consent judgment ___________________ 8 

3. The 1994 amendment to the consent judgment ____ 8 

4. The tangential 2001 action ___________________ 9 

5. The 2016 enforcement proceedings ____________ 10 

II. Jurisdiction and Standard of Review ____________ 15

III. The GVI’s Appeal ____________________________ 16

A. Principal Award to GERS _____________________ 17

1. The historical under-contributions fall within the 

consent judgment ___________________________ 17 
‐iv2. The GVI’s historical under-contributions were 

properly before the District Court ______________ 19 

3. Direct contributions to GERS and the true-up process 

do not offset the award _______________________ 28 

4. The expert reliably calculated the $18.9 million in 

principal __________________________________ 31 

B. Award of Fees and Interest to GERS ____________ 32

1. The statutes are not intended only for willful 

misconduct ________________________________ 33 

2. The District Court erred by applying the statutes 

retroactively _______________________________ 35 

3. GERS’s action was timely ____________________ 42 

IV. GERS’s Cross-Appeal ________________________ 51

A. GERS’s Textual Arguments ___________________ 54

B. GERS’s Authorities _________________________ 59

C. The Parties’ Historical Understanding ___________ 62

V. Conclusion __________________________________ 66
__________________________ 

OPINION OF THE COURT 

_________________________ 

SMITH, Chief Judge. 

The promise of a pension is critical to the retirement security of many of us who work. And retirement security “is 

often compared to a three-legged stool supported by Social 

Security, employer-provided pension funds, and private 

savings.”1

 When an employer’s promise of deferred compensation goes unfulfilled, the expectations of many-a-pensioner 

are upended. That threat looms for a substantial share of the 

citizenry of the U.S. Virgin Islands because of the perilous financial condition of its Government Employees Retirement 

System (“GERS”). 

When a public-pension system reaches the point where 

it is actuarially unsound, the blame rarely lies with a single person, political party, or institution. Economic recession, unfunded legislative mandates, poor investment strategies—all 

can conspire to destabilize a pension system. And each bears 

responsibility for GERS’s untenable financial state. 

But GERS has also faced a unique challenge. Virgin 

Islands law seemingly fails to obligate anyone to fund GERS 

when employee-compensation-based contributions and associated investment returns fall short of the assets required, based 

1

 Former Rep. Sander Levin, Social Security at 75: Don’t Mess 

with Success, HUFFPOST (Aug. 16, 2010, 12:00 PM), 

http://www.huffpost.com/entry/social-security-at-75-don_b_ 

683384. 
‐2- 

on actuarial assessments, to meet future pension commitments. 

For decades, GERS has experienced annual deficits between 

its assets and projected liabilities to system participants. Its 

aggregate shortfall now stands at about three billion dollars—

leaving the system on the brink of insolvency. 

 Yet the Government of the Virgin Islands (“GVI”) is itself fiscally challenged and has at times failed to remit to 

GERS all the employer contributions it is statutorily mandated 

to make. GERS has repeatedly sued the GVI for these contributions—first in 1981, resulting in a consent judgment, and 

most recently in 2016, when GERS sought to enforce that judgment in court. GERS claimed that, as far back as 1991, the 

GVI had contributed tens of millions of dollars less than 

required by the statutory percentages of employee compensation. GERS also sought to compel the GVI to step into the 

billion-dollar breach, arguing that—independent of these 

fixed-percentage contributions—the GVI must fully fund 

GERS to the point of actuarial soundness. 

With an appointed expert’s help, the District Court 

awarded GERS an amount calculated to reflect the GVI’s historical percentage-based under-contributions. We will affirm 

that award of principal. But the Court erred when it enhanced 

the award by applying late-arriving interest and penalty statutes retroactively. We will vacate the portion of the judgment 

to GERS that includes those enhancements and remand with 

instructions for the District Court to reduce its award accordingly. Finally, the Court determined that the consent judgment 

does not require the GVI to fund GERS for the delta between 

its assets and liabilities. We, too, find no anchor for this sweeping duty GERS seeks to impose on the GVI, so we will affirm 

the District Court’s ruling in GERS’s cross-appeal. Even were 

we to cut that obligation on a rationale made of whole cloth, 
‐3- 

the system would remain insolvent. The citizens of the United 

States Virgin Islands—population 106,4052

—simply cannot 

pay the necessary billions. The cure for GERS’s chronic 

underfunding is not judicial but legislative—if not at the territorial level, then perhaps on Capitol Hill. 

I. BACKGROUND AND PROCEDURAL HISTORY

We need not trace the long and winding road across 

laws, history, politics, and litigation that has brought the Virgin 

Islands’ public-pension system to where it is today. Instead, 

we hew to the legal framework relevant to the questions presented and to the procedural narrative by which this case and 

the parties’ arguments have wended their way to us. 

A. Legal Background 

1. Creation of GERS in 1959. By passing Act 479, 

effective October 1, 1959, the unicameral legislature of the 

Virgin Islands (“the Legislature”) created GERS as the retirement system for GVI employees. GERS was “established as a 

trust, separate and distinct from all other entities”; endowed 

with “the powers and privileges of a corporation”; and required 

to transact all its business and hold all its assets in its own 

name. Act of June 24, 1959, No. 479, §§ 701(c), 715(a), 1959 

V.I. Sess. Laws 92, 94, 104. The Legislature vested responsibility for operating GERS in a board of trustees, which has the 

power to authorize the purchase or sale of investments, make 

2

 United States Census Bureau, U.S. Virgin Islands Demographic Profile Summary File – 2010 Census of Population 

and Housing (2013), available at https://www.census.gov/ 

schools/facts/u.s.%20virgin%20islands. 
‐4- 

contracts, and “sue and be sued” under the GERS name. Id. 

§ 715(b)(3), (6). The system was “established as a part of the 

Division of Personnel in the office of the Government Secretary,” with the Director of Personnel acting as both administrator of GERS and secretary of the board. Id. § 715(c).3

 

Act 479 also purported to fund GERS. It implemented 

section 718 of the new Retirement Code, which provided first 

that “[t]he various obligations of the system shall be financed 

in accordance with actuarial reserve requirements from 

contributions by members, contributions by the employer, 

interest income, and other income accruing to the system.” Id. 

§ 718. Section 718 then required employees to contribute to 

GERS via a “deduction from compensation” at a rate of four 

percent, with an annual compensation cap. Id. It also set an 

annual compensation floor so that the GVI, as employer, would 

contribute four percent for an employee “whose minimum rate 

in his class of position is $1200 per annum, or less.” Id. 

Unlike the specified employee contribution rate, section 

718 did not fix the rate for the GVI’s employer contribution. 

Instead, Section 718 obligated the GVI to “make [employer] 

contributions concurrently with the contributions by members 

in an amount which, if paid during such service, and added to 

the members’ contributions, together with regular interest, will 

be sufficient to provide actuarial reserves” for the payment of 

benefits under the system. Id. These concurrent employer contributions were to “be determined by applying a percentage rate 

to the aggregate compensation of the members for each regular 

3

 In 1987, the Legislature amended section 715 to classify 

GERS as an “independent and separate agency” of the GVI. 

Act of June 24, 1987, No. 5265, § 1303(a), 1987 V.I. Sess. 

Laws 92, 97; accord 3 V.I.C. § 715(a). 
‐5- 

payroll period.” Id. Section 718 provided for an annual computation “of the actuarial reserve requirements” of the system 

and, in a provision reminiscent of its first sentence, looked for 

financing to “contributions by the members as above provided 

and by contributions by the employer.” Id. 

2. The 1968 amendments. In 1968, the Legislature 

passed Act 2098, which amended section 718. Act of February 

8, 1968, No. 2098, 1968 V.I. Sess. Laws, Pt. I, 9. Act 2098 

divided section 718 into subsections, with its first sentence on 

“actuarial reserve requirements” becoming subsection (a). Id. 

§ 718(a). Act 2098 retained the four-percent employee contribution rate but changed the compensation caps and minima. 

See id. § 718(b), (c). It also slightly modified the provision for 

annual computation of the system’s actuarial reserve requirements. Id. § 718(e). In a gloss on the original language of 

subsection (f), Act 2098 provided that “[t]he employer shall 

make contributions which together with the members’ 

contributions and the income of the system will be sufficient to 

provide adequate actuarially determined reserve for the 

annuities and benefits herein prescribed.” Id. § 718(f). And 

for the first time, the employer’s contribution rate was fixed at 

a percentage of employee compensation—on a temporal 

gradient from 4.00% for the period before July 1, 1968 to 

7.63% for the period after July 1, 1971—by the terms of subsection (g). Id. § 718(g). Both employer and employee contributions were to be paid into the system each payroll period. Id. 

§ 718(h). 

3. The 2005 amendments. Relevant amendments were 

later adopted when the Legislature passed the Retirement 

System Reform Act of 2005. Act of Nov. 2, 2005, No. 6794, 

2005 V.I. Sess. Laws 380. 
‐6- 

First, the bill added new subsections to section 704. 

That section now provides that “[r]etirement contributions paid 

for a prior period, whether by employer or by member, must 

be charged a delinquent fee of 1.5% for each calendar month 

or part thereof that paid [sic] contributions should have been 

paid.” 3 V.I.C. § 704(q). Such delinquent contributions 

“include[] prior period contributions due to incorrect wages 

and contributions from an earlier report or wages and 

contributions that should have been reported, but were not.” 

Id. The 1.5 percent “assessment may not be waived,” id., 

unless the GERS administrator in “exceptional circumstances” 

grants a waiver—and then, “only once for an employer during 

any one fiscal year.” Id. § 704(r). 

Second, the 2005 amendments require the accrual of 

interest on delinquent contributions to GERS. Under the new 

provision, “[w]henever any agency, department[,] instrumentality, or employer fails to make timely contributions, interest 

shall accrue on the amount of the contributions not paid based 

on the system’s domestic fixed income investment rate of 

return not to exceed the rate of 9%.” Id. § 736(b). 

Third, the Legislature amended existing provisions of 

section 718 by, among other things, adding that “the Board 

may actuarially determine the rate of contribution for members 

and employers of the system,” id. § 718(a), and that “[t]he 

employer and employee contributions must be paid to the 

system within ten days after the closing of each payroll 

period,” id. § 718(h). The Board, however, “may not increase 
‐7- 

rates, in addition to rates already in effect, by more than 3.0% 

over a five-year period.” Id. § 718(b).4

 

Finally, the 2005 act codified section 734, under which 

“[a]ll payments required by this chapter to be made by the 

employer to the retirement fund are continuing obligations of 

the Government.” Id. § 734. This provision ensures that 

“funds owed to the system by the employer should never be 

capable of escaping payment due to a statute of limitations.” 

V.I. 26th Legis., Bill No. 26-0071, Bill Summary, Section 21. 

B. Procedural History 

1. The 1981 complaint. Exercising its “power to sue 

and be sued in its own name,” GERS filed a complaint in 1981 

against the GVI and its Commissioners of Finance in the District Court of the Virgin Islands. Emps. Ret. Sys. of Gov’t of 

V.I. v. Quinn, No. 3:81-cv-5 (D.V.I.), Compl. ¶ 2; JA754.5

 

GERS alleged that the Commissioners had failed to timely remit several pay periods’ worth of employee contributions to 

GERS and commingled these funds with the GVI’s. GERS 

also alleged that the GVI had failed to timely remit to GERS 

“its matching retirement contribution of 11%,” as required by 

4

 This constraint on GERS’s rate-setting ability resides in the 

subsection of the statute on employee contributions. But 

GERS seems to understand that it equally applies to the 

employer rate. Indeed, GERS’s inability to unilaterally increase the GVI’s required employer contribution percentage is 

arguably what makes GERS’s cross-appeal justiciable. We express no opinion on the scope of GERS’s authority under 

section 718(b). 

5

 Citations preceded by “JA” are to the parties’ Joint Appendix. 
‐8- 

statute, to the tune of nearly $500,000. 1981 Compl. ¶ 9; see 

also id. ¶ 4 (noting GVI’s responsibility “to contribute 11%” 

as “the employer”). GERS requested injunctive relief ordering 

the Commissioners and the GVI to timely pay GERS all funds 

due and owing, preventing the Commissioners from commingling funds, and restraining the GVI “from future withholding 

of matching contributions.” Id. at 3. GERS also sought interest of at least 18 percent annually on all funds due and owing, 

as well as attorneys’ fees and costs.

 

2. The 1984 consent judgment. After written and oral 

discovery, the parties entered into a consent judgment in 1984. 

The judgment acknowledged that the GVI’s Commissioner of 

Finance “receives and releases employee and employer retirement contributions.” JA113. So it obligated “defendant, 

Commissioner of Finance, [to], within thirty (30) days of each 

payroll period, certify and pay into the Employees’ Retirement 

System Fund the total amount due of employee and employer 

contributions as defined in Title 3, Section 718.” JA113–14. 

The judgment recognized that “[a]t this time, the Court does 

not have jurisdiction to compel the payment of the legal rate of 

interest by the Commissioner of Finance on deliqneunt [sic] 

employee and employer contributions.” JA114. But it also 

provided that “if an act is established by the Legislature, 

authorizing the payment of interest, this Consent Judgment 

shall be amended to reflect such change.” Id. A Virgin Islands 

assistant attorney general executed the consent judgment on 

behalf of all defendants. 

3. The 1994 amendment to the consent judgment. In 

March 1994, four members of GERS individually filed a federal lawsuit against GERS, several of its trustees, and the GVI 

alleging chiefly that the GVI had been dilatory in making 
‐9- 

required payments to GERS under the consent judgment. See 

Molloy v. Monsanto, Civ. No. 1994-30, 1994 WL 326237, at 

*1 (D.V.I. June 9, 1994). Among the motions filed by the 

Molloy plaintiffs was a motion to enforce the consent judgment, seeking to require the GVI to remit employee and 

employer contributions to GERS within 30 days of each payroll period. Id. That motion, although filed in Molloy, was 

“considered as having been filed in the litigation that produced 

the consent judgment,” id. at *1 & n.6, and the District Court 

denied it without prejudice. Quinn, 1994 WL 326224, at *1 

(D.V.I. June 9, 1994) (noting allegation that “the amount of 

GERS money in the government’s bank account has increased 

more than fifteen fold since December 1984”). 

Hoping to remedy these and other issues related to the 

consent judgment, GERS and the GVI jointly asked the District 

Court to modify it. The modified consent judgment, entered in 

April 1994, ordered that a separate interest-bearing bank 

account in the name of GERS be created for the Commissioner 

to use when depositing employer and employee contributions, 

“interest[,] and all other monies received of every kind and 

description belonging to the System.” JA316. The parties also 

agreed on an auditing process, deposit logistics, and an investment interest allocation methodology. The provisions of the 

1984 consent judgment were otherwise retained. Upon completion of motions practice, and following conferences with the 

District Court, any disagreement between the parties about the 

amended consent judgment seemed to have dissipated by late 

1994. 

4. The tangential 2001 action. In 2001, GERS sued the 

Governor of the Virgin Islands, the Legislature, and the GVI 

seeking to compel the payment of contributions required under 

discrete 1994 legislation that enacted a special early retirement 
‐10- 

incentive program aimed at avoiding layoffs of certain employees. See, e.g., Gov’t Emps. Ret. Sys. v. Turnbull, 134 F. App’x 

498, 500 (3d Cir. May 16, 2005); see also 3 V.I.C. §§ 718c, 

718(j). That legislation included a financing mechanism 

requiring the GVI to make special quarterly contributions to 

GERS to compensate for employee contributions lost because 

of the early retirement of incumbent contributors. GERS 

alleged that the 1994 legislation and related amendments did 

not put in place an adequate financing structure, and thus unconstitutionally impaired an implied contract between the GVI 

and its employees, in violation of Article 1, Section 10 of the 

U.S. Constitution. 

The District Court in Turnbull dismissed GERS’s complaint, holding that GERS failed to state a cognizable Contracts 

Clause claim. Gov’t Emps. Ret. Sys. v. Turnbull, No. 01-cv-69 

(D.V.I. Jan. 23, 2004). We affirmed, albeit on ripeness 

grounds. We held that GERS “failed to establish a justiciable 

case or controversy” because “no GERS members have 

suffered any harm” and there was “no evidence in the record 

that any GERS members have been denied, or are about to be 

denied retirement benefits, or were otherwise injured as a 

consequence of the claims alleged.” 134 F. App’x at 501. 

5. The 2016 enforcement proceedings. In 2016, GERS 

moved to enforce the consent judgment, alleging that the GVI 

had violated section 718(f) by failing to fund GERS for the 

entire delta between its assets and its liabilities to pensioners. 

GERS referred to this supervening obligation, over and above 

the fixed-percentage employer contributions spelled out in section 718(g), as the GVI’s “actuarially determined employer 

contribution” or “ADEC.” JA89–93. Then, in 2017, GERS 

moved on an emergency basis to enforce the consent judgment 

because, for several months beginning in late 2016, the GVI 
‐11- 

withheld wholesale its employees’ and its own employer fixedpercentage contributions. GERS filed both enforcement 

motions in the 1981 Quinn action, under its case number and 

caption. And both motions sought enforcement through a finding that the GVI was in contempt of the consent judgment or, 

alternatively, by recourse to the District Court’s “general 

equitable powers.” JA293–94; JA515. The GVI ultimately 

admitted to the blanket withholding of fixed-percentage 

contributions, the District Court found a breach of the consent 

judgment, and the GVI then repaid a total of about $36 

million—which included principal and interest—by July 2018. 

 The proceedings next focused on whether what had 

occurred was an isolated breach or whether the GVI had failed 

to remit fixed-percentage contributions to GERS in any prior 

period. GERS’s administrator testified that “missing employer 

contributions going back years are still outstanding.” JA1748. 

(According to GERS publications, “[t]he issue of prior periods 

missing employer contributions” first surfaced with the implementation of a new computer system in March 2012. JA3055; 

JA3082; JA3107.) GERS calculated that the GVI owed over 

$72 million in previously missed employer contributions, including interest and penalties, through the end of 2017. Based 

on a sample population of employees, the GVI claimed that it 

owed GERS just a few hundred dollars. Because of the disparity in the parties’ calculations, the District Court appointed an 

independent expert, RSM US LLP (“RSM”), to determine the 

extent of the GVI’s arrears for prior periods beginning in 1991 

and running through December 31, 2018. The GVI and GERS 

each had equal access to RSM’s data and personnel, and equal 

obligations to provide records to and cooperate with RSM. 

RSM examined all available payroll documents and records of contributions to GERS. RSM concluded that the GVI 
‐12- 

had indeed failed to contribute all that was required under the 

fixed percentages in force during various payroll periods 

dating back as far as 1991.6

 Based on detailed records covering 

2010–2018, RSM determined that the GVI under-contributed 

to GERS during that period by about $4.0–$5.0 million. 

According to RSM, these under-contributions stemmed from 

clerical, accounting, and processing errors. In a February 5, 

2020 order, the District Court adopted RSM’s calculations, 

awarded GERS $5.0 million in principal for the GVI’s 2010–

2018 under-contributions, and directed RSM to calculate the 

pre-2010 amounts and undertake an interest analysis. The 

Court also set a schedule for the parties to brief the appropriateness and amount of interest. 

 RSM concluded that the under-contributions during the 

1991–2009 period were less certain because of gaps in the relevant pay records. The “[m]ost significant[]” impediment to 

its obtaining comparable detailed payroll and employment 

information for the 1991–2009 calculations was that the GVI 

had changed its payroll software at the end of 2009 without 

“migrat[ing] detailed historical payroll and employment information.” JA4806. Making matters worse, “[t]he [GVI] server 

on which [the defunct software’s] data was stored . . . was decommissioned and did not receive patching and maintenance 

in recent years.” Id. Even so, RSM successfully retrieved 

from the decommissioned server annual payroll reports that 

included the GVI’s historical determinations of each 

employee’s pensionable wages. By subtracting known non6

 Over the same timeframe, RSM determined—based on data 

it characterized as incomplete—that GVI employees also 

under-contributed to GERS by some $2.2 million. GERS 

elected not to pursue current or former GVI employees to 

recover that amount. 
‐13- 

pensionable wages, such as overtime pay, from reported gross 

wages, RSM performed its own calculations of pensionable 

wages. Applying the statutory contribution percentages to the 

GVI’s and to its own pensionable wage determinations yielded 

a significant variance between the two as to the GVI’s historical contribution obligations. Accordingly, RSM went on to 

refine its calculations. 

RSM began by sampling 20 employees and comparing 

the GVI’s and its own calculation of each employee’s pensionable wages with their salary information as documented in 

Notices of Personnel Action (“NOPAs”), which the GVI generates based on changes in an employee’s pay or employment 

status. This comparison led RSM to assume that the GVI had 

properly calculated an employee’s pensionable wages whenever its calculation was greater than 60 percent of RSM’s own 

initial calculation. RSM thus adopted the GVI’s calculations 

in every such instance across the entire set of raw pensionable 

wage data from 1991–2009, amounting in toto to 83 percent of 

the data inputs to RSM’s findings for that period. 

But for the remaining 17 percent, RSM’s and the GVI’s 

pensionable wage calculations varied more significantly. RSM 

analyzed available payroll records for the 97 employees with 

the largest variance, requesting historical personnel records, 

including information relating to annual salaries, from both the 

GVI and GERS. It estimated an expected pensionable wage 

amount for these employees by using NOPAs, when available, 

and, when those were unavailable, GERS’s annual benefit 

summaries. But this methodology accounted for only about 12 

percent of the high-variance problem. For the remaining 88 

percent of the high-variance data, which “likely erroneously 

include[d] certain non-pensionable wage types,” RSM reduced 

its own pensionable wage calculations by a ratio derived from 
‐14- 

a sample of 75 employees for whom there was “sufficient supporting documentation”—the average ratio between their 

document-supported pensionable wages and RSM’s own initial pensionable wage calculations. JA4815–16. RSM then 

relied on both of its sets of adjusted pensionable wage 

calculations. 

 Using this methodology, RSM determined with 95 percent confidence that the GVI’s 1991–2009 under-contributions 

fell within an interval from about $11.6 million to $15.8 

million. The District Court chose the statistical midpoint of 

this range and, in an April 3, 2020 order, awarded GERS 

$13,860,879 (hereinafter rounded to $13.9 million) in 

principal. 

 In calculating interest and fees, RSM applied the 2005 

interest and delinquency-fee statutes to the balance of undercontributions the GVI accumulated before the statutes’ 

effective date and, alternatively, only to contributions the GVI 

missed on or after that date. In its April 3 order, the District 

Court adopted the former calculation and awarded GERS 

$43,161,354 (hereinafter rounded to $43.1 million) in interest 

and penalties on the GVI’s $13.9 million in undercontributions from 1991–2009. Based on RSM’s calculations, 

the Court also awarded GERS $6,121,273 (hereinafter rounded 

to $6.1 million) in interest and delinquency fees on the $5 

million in principal for the 2010–2018 under-contributions. 

The District Court’s award to GERS for all the GVI’s undercontributions from 1991–2018, inclusive of interest and penalties, totaled about $68 million. 

 Finally, the District Court granted judgment to the GVI 

on GERS’s motion to enforce the consent judgment with 

respect to the ADEC obligation. The Court reasoned that the 
‐15- 

consent judgment, which obligated the GVI to make its 

employer contributions to GERS within 30 days of each 

payroll period, conflicted with GERS’s proffered ADEC 

obligation, which would obligate the GVI to fund GERS in 

accordance with the annual actuarial analysis ordered by the 

Retirement Code. 

 The GVI appealed the District Court’s award of principal and interest, and GERS appealed the District Court’s denial 

of its motion to enforce the consent judgment as to the alleged 

ADEC obligation. 

II. JURISDICTION AND STANDARD OF REVIEW

We have jurisdiction to review the District Court’s 

February 5, 2020 and April 3, 2020 orders under 28 U.S.C. 

§ 1291.7

 The District Court had jurisdiction over GERS’s original 1981 action under Section 22 of the Virgin Islands Revised 

Organic Act of 1954. 48 U.S.C. § 1612. Its jurisdiction to hear 

GERS’s motion to enforce stems from United States Public 

7

 The February 5, 2020 order awarding GERS principal for the 

2010–2018 period was not listed in the GVI’s Notice of Appeal. Federal Rule of Appellate Procedure 3(c)(1)(B) requires 

that the Notice “designate the judgment, order, or part thereof 

being appealed.” That said, we liberally construe the requirements of Rule 3(c). Pacitti v. Macy’s, 193 F.3d 766, 776 (3d 

Cir. 1999). “[W]hen an appellant gives notice that he is 

appealing from a final order, failing to refer specifically to earlier orders disposing of other claims . . . does not preclude us 

from reviewing those orders.” Shea v. Smith, 966 F.2d 127, 

129 (3d Cir. 1992) (citation omitted). When, as here, there is 

a connection between the specified and unspecified orders, 

review is appropriate. Pacitti, 193 F.3d at 777. 
‐16- 

Law No. 98-454, 98 Stat. 1732, 1738, sec. 703(b) (codified at 

48 U.S.C. § 1612 note (Jurisdiction of District Court Over 

Pending Cases)). 

We review the District Court’s interpretation and construction of the consent judgment de novo. Holland v. N.J. 

Dept. of Corr., 246 F.3d 267, 277–78 (3d Cir. 2001). We also 

review statutory constructions de novo. United States v. 

Hodge, 948 F.3d 160, 162 (3d Cir. 2020). We review any 

mixed questions of fact and law de novo insofar as “the primary facts are undisputed and only ultimate inferences and 

legal consequences are in contention.” U.S. Gypsum Co. v. 

Schiavo Bros., Inc., 668 F.2d 172, 176 (3d Cir. 1981). But 

when the mixed questions require a district court to make casespecific factual conclusions, our review is deferential—

examining the record for clear error. See U.S. Bank Nat’l Ass’n 

ex rel. CWCapital Asset Mgmt. LLC v. Village at Lakeridge, 

LLC, 138 S. Ct. 960, 967–69 (2018). 

Interpreting an issue of Virgin Islands law that the Virgin Islands Supreme Court has not ruled on requires us to 

“predict how [that court] would decide” the matter. Edwards 

v. HOVENSA, LLC, 497 F.3d 355, 361 n.3 (3d Cir. 2007). 

III. THE GVI’S APPEAL

The GVI raises a hodgepodge of objections to the District Court’s judgment for GERS on the issue of historical 

under-contributions. The challenges can be sorted into attacks 

on the District Court’s (A) award of $18.9 million in principal 

to GERS and (B) enhancement of that principal with $49.2 million in interest and fees. We will affirm the District Court’s 

award of $18.9 million in principal to GERS. We will also 

affirm its award of $6.1 million in interest and fees for the 
‐17- 

2010–2018 period. But the District Court erred by applying 

the interest and delinquency fee statutes to enhance arrears that 

the GVI accumulated before those statutes’ effective date. We 

will therefore vacate the $43.1 million enhancement for the 

1991–2009 period and remand with instructions. 

A. Principal Award to GERS 

The GVI contends that (1) its under-contributions to 

GERS from 1991–2018 are beyond the scope of the consent 

judgment; (2) the issue of whether it under-contributed to 

GERS was not properly before the District Court; (3) certain 

of its direct contributions to GERS and the process of “truing 

up” contributions at the time of an employee’s retirement offset 

the $18.9 million award; and (4) the portion of the award covering the 1991–2009 period rests on unreliable data. 

There is no merit to any of the GVI’s arguments. 

1. The historical under-contributions fall within the 

consent judgment. The GVI argues that the consent judgment 

was limited to requiring timely biweekly contributions to 

GERS. This was different in kind, the GVI claims, from failing 

to remit all funds that have since been determined were 

required under the percentages set by statute. But the GVI’s 

argument conflicts with the text of the consent judgment and 

section 718, both of which require mathematical accuracy. 

 That the “biweekly contributions were correct when 

made and later circumstances may have required an increased 

contribution,” Appellants’ Reply Br. 6, is beside the point 

because the consent judgment and statute are formulaic. A 

consent decree is interpreted as a contract, with its scope “discerned within its four corners, and not by reference to what 
‐18- 

might satisfy the purposes of one of the parties to it.” 

Firefighters Local Union No. 1784 v. Stotts, 467 U.S. 561, 574 

(1984) (quoting United States v. Armour & Co., 402 U.S. 673, 

681–82 (1971)). Under the consent judgment, the GVI must 

pay GERS “the total amount due of employee and employer 

contributions as defined in Title 3, Section 718.” JA113–14 

(emphasis added). Section 718 in turn sets forth, first, the 

fixed-percentage framework for deducting employee contributions from paychecks. 3 V.I.C. § 718(b), (d). It then requires 

“[t]he employer” to “contribute” to GERS in “an amount paid 

upon a percentage of employees[’] compensation” after each 

pay date, and specifies certain percentages and dates of 

increase. Id. § 718(g); see also id. § 718(h). A straightforward 

reading brooks no argument that funds demanded by the statutory percentages are unrecoverable if inadvertently withheld, 

whether due to clerical errors or other circumstances. The Retirement Code prohibits both the employer’s intentional 

“refusal” and unintentional “failure” to pay. See id. § 736(a) 

(“Neither the government nor any agency, department, or 

instrumentality may fail or refuse to pay the employer’s contribution required by this chapter within the applicable time 

limitation.” (emphases added)); accord id. § 704(s); see also 

id. § 704(q) (classifying as “delinquent” and subject to 

enhancement “prior period contributions due to incorrect 

wages” (emphasis added)). 

Granted, a consent decree’s reach is limited by “the general scope of the case made by the pleadings.” Sansom Comm. 

by Cook v. Lynn, 735 F.2d 1535, 1538 (3d Cir. 1984) (quotation omitted). But GERS’s 1981 complaint made the case that 

the GVI had failed to contribute the full amount that was 

required of it as employer. See, e.g., 1981 Compl. ¶¶ 4, 9 

(alleging that GVI failed to timely remit to GERS “its matching 
‐19- 

retirement contribution of 11%” as “the employer”). And it 

sought an order compelling the GVI to pay all funds due and 

owing, including the withheld employer contributions, as well 

as restraining the GVI “from future withholding of matching 

contributions.” Id. at 3. So the general scope of GERS’s original complaint jibes with the dictates of both the consent decree 

and section 718. And even assuming some dissonance 

between the allegations in the 1981 complaint and the GVI’s 

under-contributions here, we are loath to slice and dice them in 

order to depart from a plain reading of the consent judgment—

particularly given the vintage of most of the relevant facts. See, 

e.g., Harris v. City of Philadelphia, 137 F.3d 209, 212 (3d Cir. 

1998) (noting that a court should not “strain the decree’s precise terms or impose other terms in an attempt to reconcile the 

decree with [the court’s] own conception of its purpose”). 

We thus conclude that the consent judgment obligated 

the GVI to make the under-contributions that were the subject 

of the District Court’s award of principal. 

2. The GVI’s historical under-contributions were 

properly before the District Court. The GVI raises the corollary argument that its liability for historical undercontributions to GERS was not properly before the District 

Court. To be sure, GERS’s enforcement motions that spawned 

the District Court’s evidentiary hearings sought first to impose 

the so-called ADEC obligation at issue in the cross-appeal, and 

then to recover contributions that the GVI had intentionally 

refused to pay GERS beginning in late 2016. In the latter 

motion, GERS alleged that the GVI stopped timely and fully 

paying fixed-percentage contributions in 2016 and into 2017, 

and attached a sworn affidavit from the GERS administrator to 

support those factual allegations. But GERS did not, in these 

motions, claim a systemic “unintentional” breach redolent of 
‐20- 

the GVI’s legacy under-contributions, nor did it seek fixedpercentage deficiencies stretching back decades. That said, we 

are not troubled by the absence of this issue from either the 

enforcement motions or the initial proceedings. 

First, we cannot say that the District Court clearly erred 

by concluding that the GVI’s historical under-contributions 

were systemically intertwined with the breaches GERS 

asserted. Based on GERS’s motions, the District Court 

received evidence from both sides about the extent of the 

GVI’s unpaid liabilities. The District Court then heard testimony about the GVI’s various instances of nonpayment over 

the years, amid the backdrop of GERS’s litigation against the 

GVI for unpaid contributions in the 1980s, 1990s, and 2000s. 

After hearing the GVI’s argument that “the indispensable predicate” to GERS’s recovery of missing prior-period contributions was “some sort of supplemental pleading” or “motion that 

lays [it] out,” the District Court ruled that nothing “precludes a 

court from undertaking its own inquiry to determine . . . the 

depth and breath [sic] of th[e] breach” that “a party points 

out.”8

 JA3451–71 (“[A] party certainly doesn’t take the role 

8

 The award to GERS of the GVI’s contribution deficiencies 

for the 1991–2018 period did not come with an express written 

conclusion that the GVI breached the consent judgment. The 

GVI raises this as part of its argument against expanding the 

scope of GERS’s claims to embrace the historical undercontributions. But the District Court made relevant findings 

and a ruling of breach on this specific issue. For example, at a 

November 2018 hearing, before instructing the parties to present evidence to value the 1991–2018 missing fixed-rate 

contributions, the District Court stated: 
‐21- 

of the Court into its hands when it makes suggestions.”). 

Hence the Court’s appointment of RSM, the third-party expert, 

to examine the parties’ records and opine on the full range of 

the GVI’s arrears. Before RSM released its first report, the 

Court concluded that the GVI’s intentional withholding of contributions beginning in late 2016 was only a “snapshot in time” 

of a larger “systemic failure to pay what is due and owing, 

which systemic failure [has] require[d] the Court to intervene 

on one, two, and multiple occasions [in the 1980s and 1990s].” 

JA3774–76. 

When a district court “takes a raft of case-specific 

historical facts, considers them as a whole, balances them one 

against another,” and makes a legal conclusion consisting “primarily” of “factual work,” appellate courts should review that 

conclusion only for clear error. U.S. Bank Nat’l Ass’n, 138 S. 

Right now the evidence that has been largely presented by the GERS or by the Government of the 

Virgin Islands suggests that there is, one, a 

breach; and two, there is an amount that needs to 

be determined as to the depth and breadth of that 

breach. So if the Government wishes the Court 

to consider any other evidence that hasn’t already been provided in the record, then the Government needs to present that sooner rather than 

later. I think we’ve covered this issue about the 

breach. . . . The breach needs to be closed. 

JA1969. To take another example, the Court expressed at a 

subsequent hearing that “the government failed to meet its 

obligations to make payments on behalf of the employees and 

the employers,” a “deficiency [that] needs to be remedied in 

short order.” JA2970–71. 
‐22- 

Ct. at 967–68 (reserving for de novo review situations where 

“applying the law involves developing auxiliary legal principles of use in other cases”). That is precisely what the District 

Court did in concluding that the GVI’s under-contributions 

stretching back to 1991 were systemically related to the initial 

ADEC and 2016 alleged breaches at the heart of GERS’s 

enforcement motions.9

 We decline to disturb the District 

Court’s conclusion, which was based on the consent judgment, 

GERS’s allegations, and decades of legal and factual development—all of which are memorialized, but only partially, in 

6,000-odd pages of appendix that the parties have submitted on 

appeal. Simply describing the District Court’s inquiry “indicate[s] where it (primarily) belongs: in the court that has presided over the presentation of evidence, that has heard all the 

witnesses, and that has both the closest and the deepest understanding of the record.” Id. at 968; see also Manning v. Energy 

Conversion Devices, Inc., 13 F.3d 606, 607 (2d Cir. 1994) 

(affirming district court order and rejecting argument that it 

“improperly expand[ed] the scope of the settlement agreement 

because . . . . district court’s factual finding as to what [was] 

meant by the term ‘parties’ was not clearly erroneous”). 

Even were we to second-guess the District Court’s conclusion that the breach GERS alleged was a snapshot of the 

breach later borne out by the evidence, we would still uphold 

inclusion of the GVI’s legacy under-contributions in the litigation. If a claim, though never pleaded, is tried by express or 

9

 Our reluctance to hold that the District Court could not chart 

this course finds support in a district judge’s ability to issue 

civil contempt sanctions sua sponte after giving the contemnor 

notice and an opportunity to be heard. See, e.g., Carty v. 

Turnbull, 144 F. Supp. 2d 395, 396 (D.V.I. 2001). 
‐23- 

implied consent of the parties, the pleadings may be deemed to 

conform even after judgment or on appeal.10 Schultz v. Cally, 

528 F.2d 470, 474 (3d Cir. 1975) (citation omitted); see also 

Fed. R. Civ. P. 15(b)(2). Determining whether an issue was 

litigated by implied consent requires balancing three factors: 

whether the parties recognized that the unpleaded issue entered 

the case, whether the evidence supporting it was introduced 

10 The operative filings animating this round of proceedings 

were GERS’s enforcement motions. Those motions are, strictly speaking, not pleadings within the meaning of Federal Rules 

of Civil Procedure 7 and 10. But in the context of enforcing 

the decades-old consent judgment based on a live complaint, 

GERS’s contempt motions setting forth allegations of breach 

are, in substance, pleadings. See, e.g., Pleading, BLACK’S LAW 

DICTIONARY (11th ed. 2019) (“[a] formal document in which 

a party to a legal procedure (esp. a civil lawsuit) sets forth or 

responds to allegations”). The parties shared this understanding in the District Court. For example, the GVI in its briefs 

referred to “the motion to enforce the Consent Judgment (Doc. 

#2)” as “essentially the operative pleading in this litigation.” 

JA2463 (also describing what GERS “alleged” therein). And 

when counsel for the GVI argued that GERS needed to “plead” 

the issue of historical under-contributions, the District Court 

asked, “When you say ‘plead,’ do you mean a complaint?” 

Counsel responded: “Well, we’re in the motion-to-enforce 

stage. But a motion that lays out [the under-contributions]. 

There certainly is no motion in the court’s file that says anything like that, let us respond, let us take the discovery and 

we’ll try it.” JA3454–57. Our holding on this point is limited 

to the particular facts of this case and should not be taken to 

mean that garden-variety motions are “pleadings” that can be 

conformed to evidence via Rule 15. 
‐24- 

without objection, and whether a finding of consent prejudiced 

the opposing party’s opportunity to respond. Douglas v. 

Owens, 50 F.3d 1226, 1236 (3d Cir. 1995) (citations omitted). 

The prejudice factor is the touchstone for granting leave to 

amend under Federal Rule of Civil Procedure 15(b). See 

United States v. Hougham, 364 U.S. 310, 316–17 (1960). 

 

It is difficult to imagine how it could have been any 

clearer to the parties that a new theory of breach entered the 

case by, at the latest, November 2018. The issue of the GVI’s 

historical under-contributions was expressly raised for the first 

time at a hearing on September 27, 2018, when the Court questioned the GVI’s counsel for several minutes about this new 

variant of the original contempt issue. Then, on November 26, 

2018, the Court again inquired about the issue with GVI 

counsel before hearing relevant testimony from GERS’s administrator, and then instructed the GVI to respond to GERS’s 

proffered under-contribution calculations. The Court reiterated in an order several days later that the GVI was to respond 

specifically to the witness’s report summarizing these missing 

contributions. (The GVI’s legacy under-contributions came to 

be called missed “prior-period” contributions, distinguishing 

them from the more current deficiencies first adjudicated in the 

proceedings.) Thereafter, so many hearings and briefing opportunities proliferated that it would be a waste of paper and 

ink for us to recount them all here. Evidentiary hearings targeted to this issue occurred in February, March, and May 2019, 

after which the Court appointed the third-party expert to determine the amount of the GVI’s historical under-contributions. 

RSM then issued two reports in 2020, one each for 1991–2009 

and 2010–2018, with attendant opportunities afforded both 

parties to furnish evidence, object to RSM’s methodology, 

examine and cross-examine a representative of RSM, and 
‐25- 

argue related matters of law to the Court. The first factor thus 

strongly favors a determination that the parties litigated the 

issue of the GVI’s under-contributions by implied consent.11 

Nor was there prejudice to the GVI. Though it opposed 

introduction of its legacy under-contributions into the case, the 

GVI fully litigated the issue in the above-mentioned evidentiary hearings, status conferences, and papers across the span 

of nearly two years. The GVI was hardly “denied a fair opportunity to defend and to offer additional evidence on th[e] 

different theory.” Evans Prods. Co. v. W. Am. Ins. Co., 736 

F.2d 920, 924 (3d Cir. 1984) (prejudice where “the [new] the11 Notwithstanding Rule 15’s ostensible requirement of a 

“trial,” pleadings may be deemed amended to conform to the 

evidence presented at hearings before a district judge. For example, in the context of habeas corpus proceedings, the 

Supreme Court of the United States “see[s] no reason why an 

evidentiary hearing should not [equate with a trial for Rule 

15(b) purposes] so long as the [State] gave any sort of consent 

and had a full and fair opportunity to present evidence bearing 

on the claim’s resolution.” Banks v. Dretke, 540 U.S. 668, 

704–05 (2004) (cleaned up). We, too, see no reason why the 

evidentiary hearings preceding the District Court’s entry of 

judgment in this matter should not equate with a “trial” under 

Rule 15(b). Nor, seemingly, did the GVI. After the District 

Court noted that “in an enforcement it’s a breach of a court 

order and it’s a little bit different . . . than a trial on the merits,” 

counsel for the GVI agreed: “when I say a trial [I mean] an 

adversarial proceeding in which after the parties have taken 

discovery we can try the questions that Your Honor has identified.” JA3456–57 (emphasis added). That is what occurred 

below, and no party suggests otherwise. 
‐26- 

ory . . . had not been squarely presented and litigated at any 

stage of the proceedings”); see also Douglas, 50 F.3d at 1236 

(severe prejudice where implied amendment “allowed the jury 

to consider another theory of liability against Griffith without 

Griffith having had the opportunity to defend against this new 

claim”). We cannot conceive of anything the GVI might have 

done differently had its historical missed contributions been litigated in some other fashion. 

We also glean from the extensive record before us no 

prejudice to the GVI’s ability to assert legal defenses. Though 

the GVI could have sought to raise the statute of limitations 

against GERS in a separate action, we think it unlikely that any 

portion of such a case would have been time-barred. To begin 

with, by “continuing” the GVI’s contribution obligations indefinitely, section 734 of the Retirement Code effectively 

defeats any statute-of-limitations defense at least for deficiencies incurred on or after its effective date in 2005.12 At all 

events, Virgin Islands law prescribes a 20-year statute of limitations on actions to enforce a federal court judgment. 5 V.I.C. 

§ 31(1)(B).13 In view of the discovery rule, which we have 

12 We express no opinion on whether section 734 was intended 

to apply retroactively. 

 

13 Other courts have held that enforcement of consent decrees 

is subject only to equitable defenses—not legal defenses such 

as the statute of limitations. See, e.g., Bergmann v. Mich. State 

Transp. Comm’n, 665 F.3d 681, 683–84 (6th Cir. 2011); 

Brennan v. Nassau Cnty., 352 F.3d 60, 62–63 (2d Cir. 2003); 

see also Cook v. City of Chicago, 192 F.3d 693, 695 (7th Cir. 

1999) (Posner, C.J.) (holding that consent decrees are contracts 
‐27- 

applied in Virgin Islands cases “when the injury or its cause is 

not immediately evident to the victim,” Joseph v. Hess Oil, 867 

F.2d 179, 182 (3d Cir. 1989); accord MRL Dev. I, LLC v. 

Whitecap Inv. Corp., 823 F.3d 195, 202 (3d Cir. 2016), GERS 

could have brought a timely separate action for all the 1991–

2018 under-contributions it recovered in these proceedings.14 

The parties agree that GERS did not discover the historical 

from interpretive standpoint but equitable decrees from remedial standpoint “and therefore [are] subject to the usual equitable defenses”). We take Virgin Islands law at face value, without deciding whether to follow these other Circuits’ approach. 

14 The Legislature exercised its power under the 1984 amendments to the Revised Organic Act of 1954, 48 U.S.C. § 1612, 

to vest the territorial courts (now the Virgin Islands Superior 

Court) with “original jurisdiction in all [local] civil actions 

regardless of the amount in controversy.” 4 V.I.C. § 76(a); 

Callwood v. Enos, 230 F.3d 627, 631 (3d Cir. 2000). As the 

GVI concedes, the District Court of the Virgin Islands retained 

jurisdiction to enforce the consent judgment because the original action was “pending before the district court as of October 

1, 1991, the effective date of the Virgin Island[s] Legislature’s 

implementing legislation.” Isidor Paiewonsky Assocs., Inc. v. 

Sharp Props., Inc., 998 F.2d 145, 153 (3d Cir. 1993). Though 

we do not believe any of GERS’s claims “go far beyond the 

Consent Judgment’s scope,” regardless, it would not have been 

“unfair in the extreme to allow GERS to . . . invoke[e] the district court’s long-defunct local jurisdiction” over such claims. 

Appellants’ Br. 48. The GVI makes no argument that a territorial court would have afforded it more procedural or substantive rights, or reached a different conclusion in applying Virgin 

Islands law, than did the District Court. 
‐28- 

under-contributions until it implemented a new computer 

system in March 2012, and the issue was first testified to by a 

witness and taken up by the Court in these proceedings in 

September 2018. Until that time, it appears that the GVI was 

also unaware, and it has not argued that GERS’s failure to 

discover the missed contributions sooner was unreasonable. 

So even if GERS’s motions did not fairly implicate the GVI’s 

legacy under-contributions, conforming the allegations to the 

claims litigated would not deprive the GVI of otherwise available legal defenses. 

 

In sum, the District Court did not clearly err by resolving factbound mixed questions in favor of adjudicating the 

GVI’s historical under-contributions as part of the breach that 

GERS alleged in its enforcement motions. Accordingly, the 

GVI suffered no prejudice from inclusion of that issue in the 

case and, in fact, fully litigated it. 

3. Direct contributions to GERS and the true-up 

process do not offset the award. Next, the GVI urges that the 

District Court’s $18.9 million judgment to GERS should be 

offset by the GVI’s “direct contributions to GERS” of some 

$24 million since the beginning of 2015. Appellants’ Br. 37–

38. Relatedly, the GVI argues for an offset because the parties 

agreed to some sort of “settlement” under which GERS would 

reconcile the GVI’s actual and required contributions for each 

employee upon the employee’s retirement. See Appellants’ 

Reply Br. 5–7, 12–13; see also Appellants’ Br. 16–17, 26–27. 

These arguments miss the mark. 

Evidence the GVI cites as supporting its direct contribution argument shows that amounts are appropriated, in the 

sum of $7 million annually beginning in the fiscal year ending 
‐29- 

September 30, 2013, from the “Internal Revenue Matching 

Fund” to GERS. Act of July 5, 2011, No. 7261, § 13, 2011 

V.I. Sess. Laws 84, 92; JA3108 (discussing Act 7261). This 

annual direct contribution requirement flows from separate 

legislation and does not speak of the GVI’s contributions as 

employer. Nor does it suggest any relationship to the GVI’s 

obligations to GERS under section 718.15 E.g., Act 7261, § 13 

(providing for contribution “[n]otwithstanding any law or provision to the contrary”). The GVI’s partial fulfillment of an 

annual fixed-sum contribution requirement does not entitle it 

to offset distinct contributions it owes GERS as percentages of 

employee compensation.16

Whether the true-up reconciliation process for retiring 

employees conceptually ensures no under-contributions, as the 

GVI argues, is beside the point. For starters, the “settlement 

agreement” to which the GVI attributes the true-up process is 

not in the record. All we can surmise is that, after discovering 

the under-contributions, the parties agreed to reconcile the 

GVI’s actual and required contributions associated with an 

employee upon her retirement.17 We see no evidence that this 

15 For the same reasons, the District Court’s award is not an 

“unlawful sanction,” as the GVI urges. Appellants’ Br. 38–39. 

16 GERS reported on August 11, 2020, that it had “received $42 

million [of the $56 million due] from the Internal Revenue 

Matching Fund under Act No. 7261.” GVI’s Suppl. App. at 5. 

 

17 We have also found oblique references in the record to 

GERS’s unsuccessful attempts as of October 2013 to negotiate 

a settlement agreement for the prior ten months of missing 
‐30- 

arrangement was intended to modify the GVI’s obligations 

under the consent judgment, which would have required court 

approval. See, e.g., United States v. Am. Cyanamid Co., 719 

F.2d 558, 565 (2d Cir. 1983). What’s more, the true-up process 

is a relatively recent phenomenon that could not cure the GVI’s 

under-contributions linked to employees who retired prior to 

its implementation. And RSM’s examination of a “test sample 

population” led it to conclude that “members who had retired” 

under the true-up process “were not part of the GERS Claim 

calc[ulation].”18 JA3733. The true ups sampled were all for 

“employees [who] were not part of the GERS Claim, which 

suggests that they were retired or moved.” JA3752. Nor do 

the equities support GERS forgoing contributions and associated investment returns to which it is entitled until an employee 

retires. As the District Court put it, “I don’t think the [1981] 

Complaint was just talking about people who were applying to 

retire.” JA1914. So the District Court could have reasonably 

concluded that none of the funds paid to reconcile contribuemployer contributions, and to an unexecuted settlement 

agreement dealing with missing employer contributions from 

October 1, 2010 through December 31, 2012. These settlement 

efforts do not support the GVI’s argument and suggest instead 

that out-of-court resolution of GERS’s claims has persistently 

eluded the parties. 

18 In excluding true-up payments, RSM’s 2010–2018 report 

noted that “review of [true-up] information provided to date 

has seemingly all related to employees outside the scope of the 

GERS claim,” though the expert did “not receive[] a complete 

record of payments by the GVI to GERS for end-ofemployment GERS settlements.” JA4048. 
‐31- 

tions associated with employees who retired after institution of 

the true-up arrangement should have been deducted from the 

award to GERS. 

4. The expert reliably calculated the $18.9 million in 

principal. The GVI contends that the portion of RSM’s 

analysis calculating 1991–2009 under-contributions turned on 

unreliable data because NOPAs imperfectly capture total compensation paid to a particular employee. RSM recognized as 

much in declining to rely on NOPAs for the 2010–2018 

period.19 But it did choose to rely on them in part to calculate 

under-contributions from 1991–2009 because of the dearth of 

other competent records. The GVI thus seems to contend that 

this portion of the expert’s analysis flunked the reliability 

prong of Daubert v. Merrell Dow Pharm., Inc., 509 U.S. 579 

(1993)—yet without citing that landmark precedent. 

The GVI made this argument to the District Court, to no 

avail. We agree with the Court’s finding that RSM’s 1991–

2009 methodology, described above in Section I.B.5, mitigated 

the problems of relying exclusively on NOPAs by benchmarking NOPA data against other sources of information, such as 

an employee’s actual gross wages. And based on a sample of 

10 employees with both NOPAs and GERS annual benefit 

summaries, RSM determined that the salary reported on 

GERS’s records was, on average, within four percent of that 

reflected in the GVI’s records. Finally, the GVI’s embrace of 

19 The expert observed two types of inaccuracies associated 

with GERS’s reliance solely on NOPAs to calculate what the 

GVI owed in 2010–2018 under-contributions: “a) employees 

[sic] actual hours worked may differ from hours contemplated 

in NOPAs, and b) employee’s [sic] actual start and end dates 

may differ from dates included within NOPAs.” JA4050–51. 
‐32- 

the true-up process, with its substantial reliance on NOPAs, 

undermines its objection. Particularly when a defendant’s poor 

recordkeeping confounds data inputs, as was the case here, 

“absolute certainty” in expert opinions is not required. Dodge 

v. Cotter Corp., 328 F.3d 1212, 1222 (10th Cir. 2003); see also 

Klein-Becker USA, LLC v. Englert, 711 F.3d 1153, 1163 (10th 

Cir. 2013) (“Although plaintiffs must generally establish damages with specificity, some estimation is acceptable if necessitated in part by the Defendants’ poor record keeping.” (cleaned 

up)); cf. Anderson v. Mt. Clemens Pottery Co., 328 U.S. 680, 

687–88 (1946) (articulating FLSA damages burden-shifting 

framework “where the employer’s records are inaccurate or 

inadequate”); Reich v. Gateway Press, Inc., 13 F.3d 685, 701 

(3d Cir. 1994) (“If the employer fails to produce accurate 

records about the employee’s wages and hours, the court may 

then award damages . . . even though the result may only be 

approximate.” (citing Mt. Clemens, 328 U.S. at 687–88)). 

We thus have no basis to conclude that the District 

Court abused its discretion in admitting the expert testimony. 

See In re Paoli R.R. Yard PCB Litig., 35 F.3d 717, 749 (3d Cir. 

1994). 

* * * 

 Seeing no merit to any of the GVI’s challenges to the 

District Court’s award of principal, we will affirm the judgment insofar as it awards GERS $13.9 million for the 1991–

2009 period and $5 million for the 2010–2018 period. 

B. Award of Fees and Interest to GERS 

The GVI’s second set of arguments goes to the District 

Court’s $49.2 million award of interest and delinquency fees. 
‐33- 

Although there was no statutory authority in 1984 on which 

these enhancements could be based, the consent judgment provided that it “shall be amended” if Virgin Islands law later 

authorized interest on delinquent contributions. JA114. Two 

statutes enacted in 2005 did just that: one imposing a 1.5 percent delinquency fee “for each calendar month or part thereof 

that paid [sic] contributions should have been paid,” 3 V.I.C. 

§ 704(q)–(r), and the other requiring interest “not to exceed the 

rate of 9%” on contributions not timely paid to GERS. Id. 

§ 736(b). The District Court adopted a set of the expert’s 

calculations that applied the two statutes to the GVI’s accumulated arrears as of the statutes’ effective date and to all its 

under-contributions after that date. 

The GVI contends that the District Court improperly 

applied both statutes, and in three ways. First, the GVI argues 

that the statutes apply only to the failure to timely make biweekly contributions and not to the failures responsible for its 

under-contributions. Second, the GVI contends that the District Court applied them retroactively to contributions missed 

before their effective date, without the necessary legislative 

intent. Third, the GVI asserts that interest and fees on most of 

the under-contributions cannot be recovered due to the statute 

of limitations or laches. We address each of these arguments 

in turn, and see merit in only the second. 

1. The statutes are not intended only for willful misconduct. The GVI maintains that the District Court should not 

have enhanced the $18.9 million with interest and delinquency 

fees because the GVI “timely made” employer contributions, 

which only later turned out to be insufficient, and because its 

under-contributions to GERS were not willful. Appellants’ Br. 

44, 48–52. But neither statute carries a scienter requirement; 

each speaks only of the unmodified failure to contribute. See 
‐34- 

3 V.I.C. § 704(q) (imposing delinquency fee when “contributions should have been paid”); id. § 736(b) (triggering interest 

when “employer fails to make timely contributions”). In fact, 

the delinquency-fee statute seems to embrace non-willful 

conduct such as deficient “prior period contributions due to 

incorrect wages.” Id. § 704(q) (emphasis added). The 

scienter-free focus of the two statutes jibes with other relevant 

provisions of the Retirement Code that proscribe both the 

“refus[al] to pay,” which suggests an intentional act, and the 

mere “fail[ure] . . . to pay.” Id. § 736(a). We typically refrain 

from reading into statutes words that plainly aren’t there, 

Romag Fasteners, Inc. v. Fossil, Inc., 140 S. Ct. 1492, 1495 

(2020), and we refuse to do so here. Nor must a party show 

willfulness to enforce a court order. Harley-Davidson, Inc. v. 

Morris, 19 F.3d 142, 148 (3d Cir. 1994). 

At all events, the District Court lacked authority to 

waive the interest and delinquency fees. For its part, the 

delinquency-fee statute applies necessarily (“must be 

charged”), subject only to the GERS administrator’s granting 

a waiver in “exceptional circumstances beyond the employer’s 

control.” Id. § 704(q)–(r). Plainly, no waiver was granted 

here. The GVI cites no case authorizing a court to substitute 

for the GERS administrator in the waiver process, and authority from other contexts weakens that argument. See, e.g.,

United States v. Lauersen, 648 F.3d 115, 116–18 (2d Cir. 2011) 

(per curiam) (holding that district court properly interpreted 18 

U.S.C. § 3612(h) as authorizing only Attorney General, and not 

district courts, to waive all or part of delinquency and default 

penalties), cert. denied, 565 U.S. 959 (2011); 18 U.S.C. 

§ 3612(h) (“The Attorney General may waive all or part of any 

interest or penalty under this section . . . if, as determined by 
‐35- 

the Attorney General, reasonable efforts to collect the interest 

or penalty are not likely to be effective.”). 

The interest statute is also mandatory but, unlike the fee 

statute, provides no mechanism for waiver. Given the limited 

circumstances enumerated for delinquency-fee waivers, the 

interest statute’s conspicuous lack of any comparable provision 

means that no waiver at all will be allowed. In short, a district 

court is not free to waive interest. See Lauersen, 648 F.3d at 

116–17 (concluding that Congress did not implicitly grant 

waiver authority to district courts when, in other subsections of 

statute, it “explicitly detailed the circumstances under 

which . . . penalties could be waived”); cf. Elkins v. Moreno, 

435 U.S. 647, 665–66 (1978) (characterizing absence of 

restriction in one part of statute as “pregnant” when contrasted 

with other parts of statute, which included that restriction). 

The GVI’s conduct was therefore subject to both 

interest and delinquency fees, and the District Court did not err 

in refusing to waive them. 

2. The District Court erred by applying the statutes 

retroactively. The GVI next contends that the District Court 

should not have imposed interest and delinquency fees on 

under-contributions that the GVI accumulated before the 

interest and fee statutes’ effective date: November 2, 2005.20 

20 Although in 1984 it could not “compel the payment of the 

legal rate of interest . . . on deliqneunt [sic] employee and employer contributions,” the consent judgment provided that “if 

an act is established by the Legislature, authorizing the payment of interest, this Consent Judgment shall be amended to 

reflect such change.” JA114. One might ask whether GERS’s 
‐36- 

failure to seek modification of the consent judgment in the 

wake of the new interest and delinquency-fee statutes forecloses its recovery of interest and fees. A cursory Reply brief 

mention aside, the GVI developed no argument for why the 

“shall be amended” language obligated GERS to file a motion 

to modify the consent judgment. The GVI’s lone acknowledgment that “the Consent Judgment never was amended to 

include interest,” Appellants’ Reply Br. 10, suggests that the 

GVI forfeited this argument. See, e.g., N.J. Dep’t of Env’t 

Prot. v. Am. Thermoplastics Corp., 974 F.3d 486, 492 n.2 (3d 

Cir. 2020) (holding that “argument . . . vaguely presented without legal or factual support . . . is forfeited”); Barna v. Bd. of 

Sch. Dirs., 877 F.3d 136, 146 (3d Cir. 2017) (noting that we 

will not “reach arguments raised for the first time in a reply 

brief or at oral argument”); In re Wettach, 811 F.3d 99, 115 (3d 

Cir. 2016) (“[B]ecause they fail to develop either argument in 

their opening brief, the Court holds that the Wettachs have forfeited these claims.” (citation omitted)). Recall that GERS 

sought interest on the GVI’s delinquent contributions in 1981, 

and the issuing court, by including the anticipatory provision 

about interest, ostensibly sought to impose it in the event and 

to the extent that Virgin Islands law later permitted. And after 

the District Court found that the GVI breached the consent 

judgment by intentionally withholding contributions from 

GERS beginning in late 2016, the GVI willingly repaid those 

amounts with interest and delinquency fees. So whether GERS 

needed to file what seemingly would have been a pro forma 

motion is neither an “exceptional circumstance” that favors 

reaching this unpreserved issue, Brown v. Philip Morris Inc., 

250 F.3d 789, 799 (3d Cir. 2001), nor a matter of “public 

importance” whose non-resolution could lead to a “miscarriage 
‐37- 

The District Court rejected the GVI’s argument that this would 

retroactively enhance its liability, and applied both statutes to 

the GVI’s balance of missed contributions as of November 2, 

2005—not just to contributions missed on or after that date. 

Neither the delinquency-fee provision nor the interest statute 

contains any express indication that the legislature intended 

retroactive application. And the GVI asserts, with no contrary 

indications from GERS, that “[t]here is no legislative history 

reflecting legislative intent to apply retroactively 3 V.I.C. 

§§ 704 and 736.” GVI’s Nov. 16, 2020 Legis. Hist. Ltr., Dkt. 

No. 57, at 2. The District Court also recognized as much. So 

the question is whether the statutes increase the GVI’s liability 

for past actions. See Landgraf v. USI Film Prods., 511 U.S. 

244, 280–81 (1994); Atkinson v. Att’y Gen., 479 F.3d 222, 231 

(3d Cir. 2007). If so, they have retroactive effect and cannot 

be applied to conduct antedating their effective date. 

We agree with the GVI that the statutes have retroactive 

effect, and thus that the District Court impermissibly applied 

them retroactively. Before November 2, 2005, the GVI’s liability for all its past under-contributions was fixed at their principal amount. By subjecting that principal to interest and fees 

under the statutes at issue, the District Court “increase[d] [the 

GVI’s] liability for past conduct” and “attache[d] new legal 

of justice.” Bagot v. Ashcroft, 398 F.3d 252, 256 (3d Cir. 2005) 

(quoting Loretangeli v. Critelli, 853 F.2d 186, 189–190 n.5 (3d 

Cir. 1988)). Further, the 1994 modification to the consent 

judgment directed the GVI to remit to GERS “interest and all 

other monies received of every kind and description belonging 

to [GERS].” JA316. This language provides an alternative basis for allowing GERS to recover interest under the consent 

judgment once permitted by Virgin Islands law. 
‐38- 

consequences to events completed before [their] enactment.” 

See Landgraf, 511 U.S. at 266, 269–70, 281. 

The District Court looked to an Eleventh Circuit case 

that addressed postjudgment interest to support applying the 

statutes to the GVI’s pre-existing balance. Yet it is prejudgment interest that provides the better guide. In Shook & 

Fletcher Insulation Co. v. Cent. Rigging & Contracting Corp., 

684 F.2d 1383 (11th Cir. 1982), the Eleventh Circuit held that 

a new state law increasing the postjudgment interest rate 

applied to an unsatisfied judgment secured under a prior version of the law that had imposed a lower interest rate. Id. at 

1388–89. Here, however, the 1984 consent judgment was not 

a money judgment, nor did it in any way determine the amount 

of the GVI’s liability. And postjudgment interest does not 

relate to the substantive conduct underlying the judgment. By 

contrast, the District Court’s application of interest and fees 

increased the GVI’s liability for the very same conduct to 

which GERS sought to attach liability in the enforcement 

proceedings. For that reason and others,21 we look for 

guidance to prejudgment interest cases such as F.D.I.C. v. 

UMIC, Inc., 136 F.3d 1375 (10th Cir. 1998). In that decision, 

21 For one, a judgment represents the fixed starting point of a 

judicially determined obligation, one of which the obligor is 

actually or constructively aware. Increasing the GVI’s liability 

for past conduct of which it was unaware, on amounts that had 

not yet been subjected to judicial determination, would work a 

significant extension of postjudgment interest doctrine. For 

another, the statutes amplify the GVI’s liability for past events 

far more than was the case in Shook & Fletcher, because the 

GVI’s conduct was previously subject to no interest at all, not 

merely a lower rate. 
‐39- 

the Tenth Circuit held that a federal statute’s prejudgment 

interest provision could not be applied to conduct giving rise 

to prejudgment interest liability that occurred before its 

passage. Id. at 1385–87. “A prejudgment interest award not 

only substantially increases monetary liability for proscribed 

conduct, but it is also very closely tied to the amount of harm 

done by that conduct. It has all the indicia of a substantive rule 

that cannot be applied retroactively without an instruction from 

Congress . . . .” Id.; see also Trout v. Sec’y of Navy, 317 F.3d 

286, 291–92 (D.C. Cir. 2003) (reversing district court’s award 

of prejudgment interest on backpay and attorneys’ fees for 

periods before effective date of interest statute, based in part 

on Landgraf, because “conduct underlying the complaint, 

rather than the procedural posture of the litigation, has 

significance”). Likewise, application of delinquency fees and 

interest is closely tied to the amount of harm for which GERS 

sought recovery in court—missed employer contributions and 

associated lost investment income—and increases the GVI’s 

liability for that conduct. 

The facts here do not convince us that these applications 

of Landgraf are inapt. First, while the District Court rightly 

noted that the GVI’s under-contributions were not “complete” 

at the time of the statutes’ enactment, JA40–41 (citing 

Landgraf, 511 U.S. at 280), the retroactivity inquiry is more 

granular. It requires us to “determine the ‘important event’ to 

which the statute allegedly attaches new legal consequences.” 

Deweese v. Nat’l R.R. Pass. Corp. (Amtrak), 590 F.3d 239, 251 

(3d Cir. 2009) (quoting Atkinson, 479 F.3d at 230) (emphasis 

added). The Retirement Code makes clear that this event is the 

discrete occurrence of under-contributing to GERS for a particular payroll period. Even if the GVI’s obligations to GERS 

spanned decades and are “continuing,” 3 V.I.C. § 734, the 
‐40- 

“event” of any single under-contribution was complete—and 

the delinquency incurred—once the applicable time after a 

payroll period passed without the GVI contributing the full 

amount required by the contribution rate in effect for that particular period. 

Second, though our retroactivity analysis is “guided by 

considerations” of “reasonable reliance” and “settled expectations,” Atkinson, 479 F.3d at 231, the GVI’s lack of contemporaneous knowledge of the under-contributions—and thus its 

lack of actual reliance on the prior state of the law—does not 

remove the taint. As we stated in Atkinson, “[i]mpermissible 

retroactivity . . . does not require that those affected by the 

change in law have relied on the prior state of the law.” Id. at 

229 (citation omitted). And consider Landgraf. There, the 

Supreme Court “did not base its decision on the specific conduct of Landgraf’s employer or on any reliance that either 

Landgraf or her employer may have had on the state of the 

law.” Id. at 228 (citing Landgraf, 511 U.S. at 282–84). Rather, 

the Court “made a general analysis of the impact of the amendment” and found “retroactivity improper because the amendment instituted a legal change that attached a new legal burden 

to the proscribed conduct.” Id. Likewise, in Hughes Aircraft 

Co. v. Schumer, 520 U.S. 939 (1997), “[i]t was the new legal 

burden imposed on events past, rather than the reliance on the 

former law by the person affected, which was the basis for 

holding” that the amendment at issue should not have been 

applied retroactively. Atkinson, 479 F.3d at 228–29 (citing 

Schumer, 520 U.S. at 943–45, 948). The GVI’s lack of reliance 

might have colored the District Court’s application of the statutes, but it is the new legal burden attached to GERS’s past 

conduct that is dispositive. 
‐41- 

Finally, GERS contends that applying the statutes only 

prospectively would frustrate their remedial purpose. But that 

is “frequently . . . true” yet “not sufficient to rebut the presumption against retroactivity.” Landgraf, 511 U.S. at 285. Here, 

the text of the statutes suggests no remedial purpose—and the 

parties agree that there is no relevant legislative history. Without more, the fact that, before the statutes’ enactment in 2005, 

GERS had unsuccessfully sued the GVI for under-contributing 

to a discrete early retirement incentive program does not suggest that the Legislature viewed the unavailability of interest 

and fees on all delinquent contributions as “failing [the Retirement Code’s] purpose.” Cf. Silverlight v. Huggins, 488 F.2d 

107, 108–10 (3d Cir. 1973) (holding that statute waiving Virgin Islands tort immunity, after prior practice of passing special 

waiver legislation on individual basis was held unconstitutional, applied retroactively to causes of action accruing before 

its enactment given “sincere[] concern[] that . . . damaged citizens not remain uncompensated” and “reasons given for the 

introduction of the bill”). And the facts belie GERS’s assertion 

at oral argument that the GVI passed the 2005 statutes to remedy GERS’s lost investment income on then-existing § 718(g) 

deficiencies. Neither GERS nor the GVI knew of missing 

fixed-percentage contributions until 2012, seven years later.22

Absent a clear statement of retroactive application in the 

statutes’ text or discernible express legislative intent to apply 

them retroactively, they cannot impose interest and penalties 

on contributions that the GVI missed before their effective 

22 The consent judgment lacks any suggestion that the GVI 

agreed to subject itself to retroactive operation of a statute that 

would otherwise only apply prospectively. 
‐42- 

date. We will vacate that portion of the District Court’s 

judgment awarding $43.1 million to GERS in interest and fees 

for the 1991–2009 period, and remand with instructions to 

reduce those enhancements accordingly.23 

 

3. GERS’s action was timely. Finally, the GVI argues 

that the vast majority of its under-contributions are not subject 

to interest or fees because the payments were made outside the 

two-year statute of limitations applicable to an “action upon a 

statute for a forfeiture or penalty.” 5 V.I.C. § 31(5)(B). The 

GVI also maintains that GERS is barred by laches from recovering the enhancements awarded by the District Court. We are 

unpersuaded and conclude that GERS’s recovery of interest 

and fees is timely. Even were we to disagree with the decisions 

of other Circuits holding that enforcement of consent decrees 

is subject only to equitable defenses, see, e.g., Bergmann, 665 

F.3d at 683–84; Brennan, 352 F.3d at 62–63; see also Cook, 

192 F.3d at 695, and even assuming GERS’s enforcement 

motions are subject to statutes of limitations,24 the applicable 

limitations period would not bar GERS’s recovery. 

23 In the set of calculations pertinent to the District Court’s 

$13.9 million award of principal for the 1991–2009 period, 

RSM figured the total amount of interest and fees for undercontributions on or after November 2, 2005 at $6,804,260: 

$5,542,163 in delinquency fees and $1,262,096 in interest. 

24 The Virgin Islands’ limitations periods apply to the “[t]ime 

for commencement” of new actions. 5 V.I.C. § 31 (“Civil 

actions shall only be commenced within the periods prescribed 

below.”). GERS’s enforcement motions did not commence a 

new action but were filed in an existing one. 
‐43- 

Contrary to the GVI’s position, the award of interest and 

fees to GERS—both in form and substance—did not stem from 

an action “upon a statute for a forfeiture or penalty,” but 

motions to enforce “a judgment or decree of any court of the 

United States . . . or Territory.” 5 V.I.C. § 31(1)(B), (5)(B). 

So if any limitations period applies, it would be the 20-year 

statute of limitations discussed above rather than the two-year 

statute of limitations that the GVI invokes. Id. Just as GERS’s 

proceedings to enforce the consent judgment against the GVI’s 

under-contributions discovered in 2012 would be timely under 

the 20-year statute of limitations, so too its recovery of interest 

and fees on those deficiencies. 

Nor does laches bar GERS’s recovery here, though the 

District Court may have short-circuited some of the analysis by 

concluding that GERS is a “sovereign” immune from laches. 

JA30–35. We are not convinced that GERS is entitled to sovereign status and, for the reasons set forth below, conclude that 

the GVI’s laches defense nevertheless fails on the merits. 

A creature of statute, GERS was established as an 

“independent and separate agency” of the GVI with the “powers and privileges of a corporation.” 3 V.I.C. §§ 715(a), 

701(c). But unlike “all other semi-autonomous instrumentalities” of the GVI, the V.I. Legislature failed to recognize GERS 

as a tax-exempt entity when the system was created. V.I. 26th 

Legis., Bill No. 26-0071, Bill Summary, Section 1. Hence the 

provision in the 2005 amendments to the Retirement Act granting tax-exempt status to GERS. See 3 V.I.C. § 701(f). 

Endowed by statute with corporate powers and privileges, and 

taxed as a corporation rather than treated as an exempt government agency, GERS at its inception lacked some of the hallmarks of a sovereign government unit. 
‐44- 

Likewise, endowing a government agency with the right 

to “sue and be sued” is persuasive evidence that the Legislature 

waived the agency’s immunity from timeliness defenses such 

as laches and the statute of limitations.25 See, e.g., U.S.V.I. 

Econ. Dev. Auth. v. Hypolite, No. ST-16-CV-268, 2019 WL 

451370, at *3 (V.I. Super. Ct. Jan. 28, 2019) (collecting Virgin 

Islands cases). This the Legislature did, granting the GERS 

board the power to “sue and be sued” in the GERS name and 

requiring that GERS assets be held in its own name and segregated from those of the GVI. 3 V.I.C. §§ 701(c), 715(b)(6). 

Territorial courts have held that a semi-autonomous agency 

chartered as a “public corporation,” with its own assets and 

legal existence, that could “sue and be sued” lacked sovereign 

immunity from the statute of limitations. Hypolite, 2019 WL 

451370, at *3. That conclusion may obtain for timeliness 

defenses involving GERS as well. 

25 Courts analyze immunity from the statute of limitations in 

tandem with immunity from equitable timeliness defenses, 

such as laches. See, e.g., Guar. Tr. Co. of N.Y. v. United States, 

304 U.S. 126, 132 (1938) (discussing purpose of exempting 

sovereigns from defense of laches and operation of statutes of 

limitations); Dole v. Local 427, Int’l Union of Elec., Radio & 

Mach. Workers, AFL-CIO, 894 F.2d 607, 612 (3d Cir. 1990); 

In re Hooper’s Estate, 359 F.2d 569, 578 (3d Cir. 1966) 

(“[T]he general principle that claims of the sovereign are not 

subject to the defenses of laches and the statute of limitations, 

is applicable to the Territory [of the Virgin Islands], unless 

expressly waived, and is implied in all its enactments.” (citing 

Bd. of Cnty. Comm’rs v. United States, 308 U.S. 343, 351 

(1939))). 
‐45- 

What’s more, Virgin Islands law suggests that “public 

corporations” generally, and GERS specifically, are subject to 

certain statutes of limitations—something inconsistent with the 

recognized exclusion of sovereigns from timeliness defenses 

where they sue in their own name or for their constituents’ benefit. See, e.g., Hooper’s Estate, 359 F.2d at 578 (“[I]mmunity 

is based upon the public policy of protecting the citizens from 

damage to or loss of their public rights and property through 

the negligence of public officers.” (citing Guar. Trust Co. of 

N.Y., 304 U.S. at 132)). For example, ordinary limitations 

periods “shall apply to actions brought in the name of any public corporation in the Virgin Islands, or for its benefit, in the 

same manner as to actions by private parties.” 5 V.I.C. § 34 

(emphasis added). And a provision of the Retirement Code 

suspends operation of the statute of limitations as against 

GERS for certain obligations. See 3 V.I.C. § 740 (“Notwithstanding title 5 Virgin Islands Code, chapter 3, any payment 

due the retirement system for services, repayment of loans or 

mortgages, or for the repayment of any amounts due to error or 

overpayment are not extinguished by the statute of limitations . . . .”). Such a carve-out suggests that GERS may otherwise remain subject to statutes of limitations and not constitute a “sovereign” immune from timeliness defenses. 

We do not decide whether GERS is a private, public, or 

quasi-public corporation or, for that matter, whether its status 

renders it immune from laches. All we decide in this regard is 

that GERS’s immunity is too dubious a basis for rejecting the 

GVI’s argument. That said, the GVI’s laches argument fails 

on the merits. A party asserting laches as a defense must 

establish (1) an inexcusable delay in bringing the action and 

(2) prejudice. See, e.g., U.S. Fire Ins. Co. v. Asbestospray, Inc., 

182 F.3d 201, 208 (3d Cir. 1999). The crux of the GVI’s case 
‐46- 

for laches is that GERS delayed too long “in seeking delinquency fees and interest,” which prejudiced the GVI because 

the expert had “difficulty in locating and making use of old 

records and data entries.” Appellants’ Br. 54. Neither assertion holds water. 

First, GERS’s delay in bringing the enforcement proceedings that led to the award of interest and fees was excusable. After suing the GVI in 1981 and obtaining the consent 

judgment in 1984, GERS was in court to modify it in 1994. 

Then, in 2001, GERS sued the GVI for under-contributing to a 

separate early retirement incentive program. GERS appealed 

dismissal of that suit in 2005, and we affirmed for lack of ripeness because it was too soon to say that “GERS members have 

been denied, or are about to be denied retirement benefits.” 

Turnbull, 134 F. App’x at 501. Having pursued its rights in 

court for decades, and following this defeat, GERS might have 

reasonably been wary of instituting further litigation when in 

2012 it discovered the GVI’s under-contributions. Instead, it 

waited to again sue the GVI until the pension system was just 

a few years from the brink. And in the interim, GERS tried to 

work with the Virgin Islands governor and the Legislature on 

pension funding solutions, even proposing remedial legislation.26 The length of the delay in absolute terms was fairly 

26 The GVI maintains that we cannot consider facts about 

GERS’s out-of-court efforts because they lie outside the record. But many of them can be found in this case’s extensive 

record, and those that cannot are appropriate for judicial notice. 

See, e.g., Benak ex rel. Alliance Premier Growth Fund v. 

Alliance Capital Mgmt. L.P., 435 F.3d 396, 401 & n.15 (3d Cir. 

2006) (judicially noticing a New York Times article on content 

of settlement); United States v. Pozsgai, 999 F.2d 719, 731 (3d 
‐47- 

modest, especially given the Virgin Islands’ 20-year statute of 

limitations on enforcement of federal-court judgments and, as 

further context, the territory’s six-year statute of limitations on 

actions to recover under a contract or “upon a liability created 

by statute.” 5 V.I.C. § 31(1)(B), (3)(A)–(B). As noted above, 

GERS waited four years after discovering the missing fixedpercentage contributions to launch the proceedings that yielded 

the District Court’s interest and fee award. See, e.g., Evergreen 

Safety Council v. RSA Network Inc., 697 F.3d 1221, 1226 (9th 

Cir. 2012) (noting that laches clock starts “when the plaintiff 

knew (or should have known) of the allegedly infringing conduct” and stops when “the lawsuit in which the defendant seeks 

to invoke the laches defense” is begun). That’s well within the 

realm of reasonable delay, as shown by Marshak v. Treadwell, 

595 F.3d 478 (3d Cir. 2009). There, we held that it was not 

inordinate delay to wait five years after entry of a judgment or 

injunction to initiate contempt proceedings. See id. at 496–97 

(distinguishing Univ. of Pitt. v. Champion Prods., Inc., 686 

F.2d 1040 (3d Cir. 1982), where plaintiff waited 50 years to 

sue and there was no previously imposed injunction). 

Second, the GVI’s prejudice argument lacks the necessary predicate showings. The GVI appears to claim that 

GERS’s delay exacerbated the lacunae in the pre-2010 records, 

which lie at the heart of the GVI’s unsuccessful challenge to 

RSM’s methodology. But the GVI does not explain how the 

state of those records would have benefitted had GERS sued 

nearer to 2012. In fact, according to RSM, the unavailability 

of detailed pre-2010 data was chiefly attributable to the GVI’s 

institution of new payroll software at the end of 2009 without 

migrating the historical records or later performing mainteCir. 1993) (appellate court may take judicial notice of matter 

not before district court). 
‐48- 

nance on the decommissioned server. Even if records somehow would have been more robust had GERS sued earlier, any 

prejudice was shared by both parties. RSM did not structure 

its methodology with a thumb on the scale in favor of GERS 

because of evidentiary gaps. It examined the existing records 

provided by both parties and, with 95 percent confidence, 

calculated an interval into which the GVI’s 1991–2009 undercontributions fell. Nor did the District Court, in adopting the 

statistical midpoint of that range, punish the GVI for having 

incomplete records. In arguing laches below, the GVI articulated no cognizable prejudice attributable to the passage of 

decades since entry of the consent judgment. Its argument here 

founders on even shallower shoals. 

 Finally, even if the requisites for laches were met, we 

would balk at applying the doctrine to bar GERS’s recovery of 

interest and fees. To begin with, for many months after GERS 

began these proceedings in 2016, the GVI intentionally withheld from GERS all of its employees’, and its own, fixedpercentage contributions. The GVI has claimed only that it 

“fell behind” due to unspecified “exigent circumstances.”27 

Appellants’ Reply Br. 12. But the record reveals nothing exigent that would sufficiently excuse this conduct. On the contrary, the GVI’s Commissioner of Finance testified that these 

27 The parties have attributed much of the interregna in the District Court proceedings to the damage wrought by Hurricane 

Irma and Hurricane Maria, both of which occurred in September 2017. But the hurricanes cannot excuse the GVI’s misconduct; the chronology doesn’t fit. The GVI began withholding 

fixed-percentage contributions from GERS beginning in late 

2016 and for months thereafter. And GERS brought its emergency enforcement motion as to these withheld funds in March 

2017. 
‐49- 

contributions were intentionally withheld because of garden 

variety capital concerns that led the GVI to de-prioritize its 

commitments to GERS—cash flow problems he could scarcely 

differentiate from those faced by the GVI after it resumed contributions. Unconvinced, the District Court held that the GVI’s 

conduct breached the consent judgment, and the GVI ultimately handed over some $36 million in principal and 

enhancements for these withheld contributions. “Any willful 

act concerning the cause of action which rightfully can be said 

to transgress equitable standards of conduct is sufficient cause 

for” a court to “refus[e] to aid the unclean litigant.” Monsanto 

Co. v. Rohm & Haas Co., 456 F.2d 592, 598 (3d Cir. 1972). 

The GVI can hardly invoke laches now after intentionally 

breaching a court order, rendering its hands unclean with 

respect to part of GERS’s action. 

Nor need we apply the equitable remedy of laches if 

doing so would undermine the public’s interests in resolution 

of the affected claim. See, e.g., Virginian Ry. v. Sys. 

Federation No. 40, 300 U.S. 515, 550 (1937) (“Courts of 

equity may, and frequently do, go much farther both to give 

and withhold relief in furtherance of the public interest than 

they are accustomed to go when only private interests are 

involved.” (citations omitted)); Md.-Nat’l Capital Park & 

Planning Comm’n v. U.S. Postal Serv., 487 F.2d 1029, 1042 

(D.C. Cir. 1973) (“Equitable remedies depend not only on a 

determination of legal rights and wrongs, but on such matters 

as laches, good (or bad) faith, and most important an appraisal 

of the public interest.” (emphasis added) (citation omitted)). 

The economic health of the Virgin Islands rests to a large 

degree on the soundness of its public-pension system. It cannot 

be over-emphasized that the central government is the Islands’ 

largest employer. GERS represents about 30 percent of the 
‐50- 

Islands’ gross domestic product. It “covers approximately 

20% of the entire population of the Virgin Islands.” JA3958–

59. At oral argument, GERS estimated that about a third of the 

Islands’ population contributes to GERS or depends on it for 

income. The system’s receipt of tens of millions of dollars in 

interest and fees is of the highest public importance. We would 

decline to resolve the weighty issue of GERS’s entitlement to 

those funds on grounds of laches even if the defense would 

otherwise seem to apply. 

We therefore conclude that the GVI’s timeliness 

defenses do not bar any component of the District Court’s 

award of interest and fees to GERS. 

* * * 

The consent judgment and applicable law require mathematical compliance, so the GVI’s failures to contribute what 

was required by statutorily fixed percentages, even if inadvertent, breached the consent judgment. In proceedings that first 

centered on the GVI’s failure to remit fixed-percentage contributions beginning in late 2016, the District Court later widened 

the lens—assisted by an appointed expert—and found a breach 

reaching back as far as 1991, when the GVI began shorting the 

percentage contributions to which GERS was entitled. We will 

not disturb that approach because the Court’s factbound conclusion about the extent of the asserted breaches was not 

clearly erroneous and, at all events, because GERS’s original 

pleadings and allegations in its enforcement motions may be 

deemed amended as necessary to encompass that recovery. 

Neither the GVI’s direct contributions to GERS under separate 

funding legislation nor its compliance with a recent process 

designed to reconcile contributions paid and owed for a retiring 

employee demands an offset. And we perceive no abuse of 
‐51- 

discretion in the District Court’s reliance on the expert’s methodology for calculating the 1991–2009 under-contributions. 

We will affirm the District Court’s award to GERS of $18.9 

million in principal. 

GERS brought enforcement proceedings within about 

four years of discovering these under-contributions, so its 

recovery of interest and fees on those debts is timely. In fact, 

the District Court had no discretion to waive the interest and 

fees. But nothing suggests that the Legislature intended to 

apply the late-arriving interest and fee statutes retroactively. 

We will vacate the District Court’s award to GERS of $43.1 

million in enhancements for the GVI’s 1991–2009 arrears and 

remand for imposition of a lesser award excluding interest and 

fees on contribution deficiencies that the GVI incurred before 

the statutes’ effective date. Because there are no retroactivity 

problems associated with the District Court’s award of $6.1 

million in interest and fees for the 2010–2018 period, we will 

affirm that portion of the judgment. 

IV. GERS’S CROSS-APPEAL

Even a judgment of tens of millions of dollars only postpones GERS’s day of reckoning by a matter of months. So 

GERS appeals the District Court’s separate ruling that the consent judgment does not obligate the GVI to contribute billions 

to actuarially equalize GERS’s assets and its liabilities to pensioners. GERS derives this sweeping “ADEC” (short for 

“actuarially determined employer contribution”) obligation 

from section 718(f), which requires the GVI to “make 

contributions which together with the members’ contributions 

and the income of the system will be sufficient to provide 

adequate actuarially determined reserve for the annuities, 

benefits and administration of the System herein prescribed.” 
‐52- 

3 V.I.C. § 718(f). GERS interprets this provision to require the 

GVI to make GERS actuarially sound should the fixedpercentage contributions of the GVI and its employees, along 

with GERS’s investment income, fail to do so. For its part, the 

GVI maintains that section 718(f) merely announces the Legislature’s intent that the fixed-percentage contributions from 

both the GVI and its employees, as well as GERS’s investment 

income, together yield an actuarially sound reserve for pension 

benefits.28 The District Court rejected GERS’s argument, reasoning that the employer contributions contemplated by the 

consent judgment and section 718 trace to payroll periods—

something irreconcilable with the proposed ADEC’s dependency on an annual actuarial accounting. 

28 At a hearing before the District Court, counsel for the GVI 

conceded that “[t]here is an obligation to pay” the ADEC but 

argued that it is “an obligation that is not part of this consent 

decree.” JA1786–88 (“we’re not disputing that” the GVI is 

statutorily obligated “to make the actuarially determined 

employer contribution”). Counsel for the GVI sought to walk 

back this statement in subsequent briefing and, before us, 

maintains that there is no such ADEC obligation. We will not 

tether our prediction of how the Virgin Islands Supreme Court 

would decide this issue to counsel’s (apparently inadvertent) 

oral statement. It is not a binding “judicial admission” because 

whether the GVI is obligated under Virgin Islands law to make 

the ADEC contribution to GERS is an issue of law, not a fact 

susceptible of admission. See, e.g., Swift & Co. v. Hocking 

Valley Ry., 243 U.S. 281, 289–90 (1916) (putative admissions 

about “legal effect” are “inoperative”); accord New 

Amsterdam Cas. Co. v. Waller, 323 F.2d 20, 24 (4th Cir. 1963), 

cert. denied, 376 U.S. 963 (1964). 
‐53- 

We conclude that the Virgin Islands Supreme Court 

would refuse to read GERS’s proffered ADEC requirement 

into section 718(f). The text of the statute and GERS’s cited 

authorities do not support imposing an obligation solely on the 

GVI to fund GERS to the point of actuarial soundness. And 

although there is scarce legislative history relevant to the 

meaning of the provision, testimony of GERS representatives 

to the Legislature reveals that the GVI’s employer contributions under section 718 have been understood for decades as 

limited to fixed percentages of employee compensation. The 

statutes are best read to require that the fixed-percentage 

contributions of employees and employers be calibrated to 

account for the changing actuarial needs of the system. But 

those same statutes do not provide a mechanism for keeping 

GERS actuarially funded if that fixed-rate funding structure 

comes up short—whether because of proliferating unfunded 

legislative mandates, GERS’s own mismanagement, flawed 

actuarial projections, or the like.29 We will therefore affirm the 

District Court’s judgment on this issue. 

29 In dissent, our colleague attributes to us a reading of section 

718(f) that “preclude[s] what Section 718 otherwise requires” 

and “bak[es] a funding shortfall into the statute.” Dissenting 

Op. at 18. We have trouble understanding the recipe. To begin 

with, our dissenting colleague recognizes, as do we, that section 718(g) “has never had a [] rate increase cap” comparable 

to that on employee contributions. Dissenting Op. at 23. So 

his assertion that our reading of section 718 assumes the 

Legislature’s “self-sabotage” in erecting “a hard-cappedcontribution system,” Dissenting Op. at 18, does not even survive to the end of the dissenting opinion. At all events, the 

Legislature’s choice of an actuarially calibrated fixed-
‐54- 

A. GERS’s Textual Arguments 

 GERS’s central statutory argument for imposing the 

ADEC obligation on the GVI is that not doing so would render 

section 718(f) superfluous. If all section 718(f) does, GERS 

protests, is announce the Legislature’s sanguine intention that 

the schedule of percentages suffice to fund the system, then 

section 718(f) has no independent content. But GERS never 

explains why it is superfluous, particularly given the statute’s 

amendment history, to interpret section 718(f) as requiring that 

the employer contribution percentages first spelled out in subsection (g) in 1968 not be fixed but dynamic over time in proportion to the evolving actuarial needs of the system. It may 

well be that those percentages have not been accurately calibrated to the actuarial needs of the system, for whatever reason, 

but that provides no justification for a supervening ADEC 

obligation that would render superfluous the statute’s percentage contribution mechanism. 

percentage structure to meet the system’s evolving needs does 

not ensure a shortfall. The Retirement Code has often been 

amended to, for example, increase the contribution rates, 

change how those rates are set, and allocate responsibility for 

funding various pension entitlements—such as the costs of the 

special early retirement incentive program and the costs of 

administering the system, both of which are borne by the 

GVI. That fixed-percentage contributions may well have been 

meeting the system’s needs until the 1990s makes the charge 

of “self-sabotage” sound a bit overstated. See Dissenting Op. 

at 18. And, of course, GERS always had—indeed, has availed 

itself of—recourse to separate legislation to attempt to address 

underfunding, such as the $7 million lump-sum annual payments from the GVI that it secured. See supra Section III.A.3. 
‐55- 

To begin with, saddling the GVI alone with the obligation to fund GERS to the point of actuarial soundness is, at best, 

inconsistent with the text of section 718. And, at worst, imposing such an obligation contradicts the import of the statutory 

language. While section 718(f) requires the “employer [to] 

make contributions” that “will be sufficient to provide 

adequate actuarially determined reserve” for benefits to pensioners, the linkage between those phrases is “which together 

with the members’ [i.e., employees’] contributions and the 

income of the system.” 3 V.I.C. § 718(f). A more natural reading of section 718(f), then, is that actuarial soundness is a function of all of the following: the GVI’s contributions as 

employer, its employees’ contributions, and GERS’s investment income earned through prudent financial decisions.30 

30 Our dissenting colleague tries to wield the last antecedent 

rule against our reading of section 718, applying the rule to 

section 718(f) to assert that “the limiting phrase ‘shall make 

contributions’ modifies the noun it immediately follows: 

‘employer.’” Dissenting Op. at 19–22. To start, we doubt that 

the last antecedent rule even applies here. The purported limiting language is only preceded by one antecedent: “The 

employer shall make contributions.” That means there is no 

potential ambiguity for the interpretive canon to resolve, since 

the other candidates follow after that so-called limiting language. At all events, our point is simply that section 718(f) 

lacks the clarity needed to support a supervening obligation 

borne solely by the GVI to make GERS actuarially sound. So 

we look to, among other related provisions of the Retirement 

Code, an earlier subsection. Cf. New Prime Inc. v. Oliveira, 

139 S. Ct. 532, 538 (2019) (“We’ve long stressed the significance of the statute’s sequencing.” (citations omitted)); Pac. 
‐56- 

Even if this provision—by naming the GVI first and then, in a 

subsidiary clause, mentioning employees and investment 

income—could somehow be read to elevate the GVI’s responsibility, a preceding subsection vitiates that reading by equalizing the input of all stakeholders to the actuarial soundness of 

the system: “The various obligations of the System shall be 

financed in accordance with actuarial reserve requirements 

from contributions by members, contributions by the 

employer, interest income, and other income accruing to the 

System.” Id. § 718(a). Granted, the first sentence of subsection (a) may be redundant of subsection (f). But GERS seeks 

to give content to the latter that would seemingly contradict the 

former. Such an approach finds no support in canons of statutory construction. See United States v. Bass, 404 U.S. 336, 344 

(1971) (recognizing that “courts should interpret a statute with 

Emplrs. Ins. Co. v. Global Reinsurance Corp. of Am., 693 F.3d 

417, 430 (3d Cir. 2012) (highlighting importance of “a bigpicture look at the [provision’s] place in the [statute’s] overall 

structure,” with attention to how “structure” and “sequen[ce]” 

“create an obligation”). Section 718(a) independently supplies 

that “[t]he various obligations of the System shall be financed 

in accordance with actuarial reserve requirements from contributions by members, contributions by the employer, interest 

income, and other income accruing to the System,” with the 

Board able to periodically “actuarially determine the rate of 

contribution for members and employers of the System.” 3 

V.I.C. § 718(a) (emphasis added). There is no antecedent confusion here either, just the Legislature’s clear indication that 

pension entitlements be financed according to actuarial reserve 

requirements from inputs by all stakeholders and that the 

GERS Board actuarially determine both employee and 

employer contribution rates. 
‐57- 

an eye to the surrounding statutory landscape and an ear for 

harmonizing potentially discordant provisions”). 

 With the text of the statute offering little or no support 

for GERS’s position, we ask why, if the Legislature sought to 

impose on the GVI a supervening obligation to fund GERS to 

actuarial soundness, it would have promulgated (and routinely 

amended) a detailed schedule of employee compensation percentages for the GVI to contribute? See 3 V.I.C. § 718(g). 

GERS tries to save the fixed-percentage scheme from superfluity by characterizing it as the employer’s perennial default 

and the ADEC as the conditional obligation, triggered only 

when the fixed percentages underserve the system. Set aside 

the reality that the so-called conditional would have swallowed 

the default in each of the last 30-odd years—and thus that 

GERS’s reading, like the GVI’s, still casts the Legislature as 

Pollyanna. At bottom, GERS’s conception conflicts with the 

statute’s history. Recall that the 1959 legislation creating 

GERS established a fixed-percentage employee contribution 

but, though using similar actuarial reserve language, did not 

attach a percentage to the employer’s contribution. From the 

beginning, “[t]he amount of contributions by the employer for 

the various purposes of the system shall be determined by 

applying a percentage rate to the aggregate compensation of 

the members for each regular payroll period.” Act of June 24, 

1959, No. 479, § 718, 1959 V.I. Sess. Laws 92, 111 (emphases 

added). Unsurprisingly, the Legislature amended the statute to 

announce just such a schedule of percentages that the GVI 

would need to contribute as employer. Act of Feb. 8, 1968, 

No. 2098, § 718(g), 1968 V.I. Sess. Laws, Pt. I, 9, 9 (defining 

first employer contribution window as “pay periods starting: 

before July 1, 1968”). The historical progression suggests that 

the Legislature enacted the fixed-percentage employer contri-
‐58- 

butions to instantiate the actuarial soundness requirement.31 

Nothing suggests that it ever sought to upend this consistent 

structure sub silentio by imposing a second, separate ADEC 

obligation. 

 GERS next argues that the consent judgment and, by 

implication, the Legislature could have used words such as 

“fixed” if it wished to cabin the employer’s obligation to fixedpercentage contributions. But the establishment of a detailed 

schedule of percentages, without a comparable articulation of 

the GVI’s potentially limitless mandate to fully fund GERS, 

militates against inferring any legislative intent to create the 

ADEC. Legislatures do not hide elephants in mouseholes. 

Whitman v. Am. Trucking Assocs., 531 U.S. 457, 468 (2001). 

There is no provision for “actuarially determined employer 

contributions” in the statute—only sources of contributions 

that, “together,” must provide an “actuarially determined 

reserve.” See, e.g., Bates v. United States, 522 U.S. 23, 29 

(1997) (noting that courts “ordinarily resist reading words or 

elements into a statute that do not appear on its face”). In view 

of subsection (f) and the surrounding statutory landscape, any 

31 Unlike our dissenting colleague, we think it unremarkable 

that the Legislature struck from the 1968 version of section 718 

the original provision that “the amount of contributions by the 

employer for the various purposes of the system shall be determined by applying a percentage rate to the aggregate compensation of the members.” See Dissenting Op. at 26 & 

n.28. After all, in those same 1968 amendments, the Legislature for the first time fixed the employer’s percentage rate to 

be applied to employees’ aggregate compensation. Retaining 

the vestigial clause may well have caused confusion, or even 

engendered litigation, about whether there was an additional 

percentage that the GVI needed to contribute. 
‐59- 

suggestion that judges or legislators should have added clarifying language to exclude reading in an ADEC obligation 

strikes us as fanciful. 

 To support postulating the ADEC, GERS points finally 

to section 718a, a provision enacted in 2006 to govern how 

GERS informs the GVI of needed appropriations. Section 

718a provides for transmittal to the Legislature of the “actuarial valuation and appraisal” required by section 718, along with 

an “itemized estimate of the amounts necessary to be appropriated by the government to [GERS].” 3 V.I.C. § 718a(a). But 

the lack of an ADEC obligation does not mean that “Section 

718a would have no reason to exist in the first place.” CrossAppellant’s Reply Br. 8. Even to pay the biweekly contributions, the GVI needs to know approximately how much to 

appropriate annually for its GERS commitments. And missing 

from the detailed enumeration of elements required to be 

included in the appropriations estimate, see 3 V.I.C. § 718a(a)–

(e), is any clear call for the information most critical to GERS’s 

proffered ADEC: its projected commitments to pensioners for 

the fiscal year. We think it natural for the Legislature—one 

year after authorizing the GERS Board to determine and 

(apparently within limits) increase contribution rates—to enact 

a statute requiring detailed support for GERS’s appropriations 

requests. All the more so given our plain reading of section 

718(f), under which all stakeholders must ensure the pension 

system’s actuarial soundness and rates must be calibrated to 

actuarial needs. 

B. GERS’s Authorities 

Nor do the cases GERS cites move the needle. Applying them here would assume the answer to the question presented: whether GERS’s proffered ADEC obligation flows 
‐60- 

from the text of section 718 or should somehow be implied 

based on the relevant milieu. 

Start with GERS’s leading case, Louisiana Municipal 

Association v. State, 893 So. 2d 809 (La. 2005). It dealt with 

statutes that unequivocally provide for both an employer contribution rate and an actuarially required employer contribution. See id. at 837–38; La. Stat. Ann. § 11:103(B)(1)–(3). By 

contrast, GERS’s appeal requires us to determine whether the 

GVI has any such second obligation independent of the fixedrate contributions set by statute. 

GERS’s other authorities involve pension regimes 

under which employees have percentage-based contribution 

obligations, but the contributions of the employer (i.e., a state 

and its counties) are actuarially determined.32 See, e.g., Hall v. 

Elected Officials’ Ret. Plan, 383 P.3d 1107, 1110–11 (Ariz. 

2016) (“The employee contribution rate was set by statute initially at 6%, with the employer being responsible for contributing the remaining amount necessary to fund a defined benefit 

upon retirement.” (citing Ariz. Rev. Stat. Ann. § 38-810(A) 

(1985))); Kaho‘ohanohano v. State, 162 P.3d 696, 706 (Haw. 

2007) (“Trustees engage an actuary to determine the employers’ normal cost and accrued liability contributions for each 

fiscal year.” (citations omitted)); Haw. Rev. Stat. Ann. § 88-45 

(setting forth schedule of fixed-percentage contributions for 

employees); Bd. of Trustees of Town of Lake Park Firefighters’ 

Pension Plan v. Town of Lake Park, 966 So.2d 448, 450 (Fla. 

Dist. Ct. App. 2007) (noting “mandatory five percent contribu32 These cases, and most others that GERS relies on, decided 

constitutional challenges to legislation that effectively reduced 

the status quo of pension benefits. The posture of these cases 

limits their relevance to GERS’s claim in this appeal. 
‐61- 

tion or payment by each firefighter” and “a mandatory payment 

by the municipality of ‘a sum equal to the normal cost of and 

the amount required to fund any actuarial deficiency shown by 

an actuarial valuation as provided in part VII of chapter 112’” 

(quoting Fla. Stat. § 175.091(1)(g)); see also Wayne Cnty. 

Emps. Ret. Sys. v. Wayne Charter Cnty., 859 N.W.2d 678, 679 

(Mich. 2014) (“Each year, the county is required by Const. 

1963 art. 9, § 24, to make an ‘annual required contribution’ 

(ARC). An annual actuarial valuation determines the ARC 

amount.” (citation omitted)); Mich. Compl. Laws Ann. 

§ 38.1140m(1) (“The required employer contribution is the 

actuarially determined contribution amount.”). These cases do 

not help us reconcile the “together” clause of section 718(f)—

not to mention the first sentence of section 718(a)—with 

GERS’s argument that, in fact, the actuarial funding 

responsibility lies solely with the GVI.33

Still other cases relate to state statutes that explicitly 

place the obligation on the employer to make up any shortfall. 

See, e.g., Booth v. Sims, 456 S.E.2d 167 (W. Va. 1994); W. Va. 

Code § 5-10-31(b) (“[T]he participating public employers’ 

33 The statutes at issue in one case that GERS invokes, Hall, 

383 P.3d at 1110–11, arguably support our plain reading of 

section 718 in which the fixed-percentage contribution rates 

are themselves intended to be calibrated for actuarial soundness. See Ariz. Rev. Stat. Ann. § 38-810(C) (“[E]ach employer 

shall make contributions on a level percent of compensation 

basis for all employees . . . sufficient under the actuarial valuation to meet both the normal cost plus the actuarially determined amount required to amortize the unfunded accrued 

liability over a closed period . . . that is established by the board 

taking into account the recommendation of the plan’s actuary . . . .”). 
‐62- 

contributions . . . shall be a percent of the members’ total 

annual compensation . . . . equal to an amount which, if paid 

annually by the participating public employers, will be sufficient to provide for the total normal cost of the benefits 

expected to become payable to all members and to amortize 

any unfunded liability found by application of the actuarial 

funding method[.]” (emphasis added)). And ERISA’s “defined 

benefit plan” addresses a statutorily defined “asset pool” in 

which “the employer typically bears the entire investment risk 

and . . . must cover any underfunding as a result of a shortfall 

that may occur from the plan’s investments.” Hughes Aircraft 

Co. v. Jacobson, 525 U.S. 432, 439–40 (1999). 

At best, the cases that GERS relies on take us no closer 

to answering whether section 718(f) obligates the GVI to fund 

GERS to actuarial soundness. In fact, the specificity with 

which the regimes addressed in those cases articulate an 

employer’s actuarially determined contribution or shortfall 

liability renders problematic the less concrete language in section 718(f). 

C. The Parties’ Historical Understanding 

Though there is no formal legislative history contemporaneous with the 1959 or 1968 laws enacting and amending the 

Retirement Code, subsequent testimony of GERS representatives to the Legislature undermines GERS’s argument for the 

ADEC. In an October 8, 1997 meeting of the Committee on 

Government Operations about a bill on allocating GERS’s 

administrative expense, a representative of GERS testified to 

the Legislature that: 

[W]hat would happen in the future is that based 

on our requirement in the statute that the funding 
‐63- 

of the system be computed on the actuarial 

reserve basis, we would then need to come back 

to the Legislature and report our latest findings 

in term[s] of the actuarial report and recommend 

that some adjustment be made in the employer 

contribution and/or the employee contribution. 

That is basically the only way that the system can 

begin to address the underfunding. . . . [T]he latest actuarial evaluation . . . determined that an 

additional contribution totaling five—approximately, five and-a-half percent would be needed 

to be added to the current contribution rate formula that we have in place. 

Oct. 8, 1997 Gov’t Ops. Comm. Hrg. Tr. 128:22–130:2 

(emphases added). Increasing the fixed-percentage contributions of employees and employers was thus understood as “the 

only way that the system can begin to address” underfunding.34 

Eight years later, in a September 12, 2005 session of the 

same committee, then-Acting Administrator and CFO of 

GERS, Willis Todmann, testified at a hearing on the 2005 

amendments to identify “specific areas . . . where the most 

immediate action is needed.” Hrg. Tr. 12:12–14. Also present 

34 Legislators appear to have shared this understanding. Trying 

to explain how GERS works, in the lead-up to passage of the 

2005 bill, Senator Barshinger stated during debate that “[y]ou 

pay in and interests [sic] is made on the money you give in, and 

in fact the government throws in an additional percentage, and 

that creates a pool of money for you.” Sept. 26, 2005 Reg. 

Sess. (Part II) Hrg. Tr. 46:2–6 (emphasis added). 
‐64- 

were a member of GERS’s Board of Trustees and the Assistant 

GERS Administrator. Todmann told the Committee: 

The System requires full autonomy to incrementally set and adjust the contribution rates for the 

employer and employees as may be determined 

from the annual actuarial valuations. . . . The 

various obligations of the System . . . are required 

to be financed in accordance with the actuarial 

reserve requirements from the contribution by 

members, contributions by the employer, interest 

income, and other income accruing to the System, but in reality, this does not occur because 

executive and the Legislature randomly determine when contributions are to be increased and 

how much those contributions should be. Whenever a shortfall occurs in the income from investments and the contributions from the employer 

and employee, the shortfall must be made up by 

the Plan Sponsor and member contributions to 

keep pace with the actuarial determinations for 

the payment of future pension obligations. . . . 

Although the statute does not provide for the 

proper actuarial funding of the System, the 

G.E.R.S. has repeatedly requested that the Legislature enact such corrective measures. . . . The 

enabling Act failed to incorporate a proper funding plan because it was the intention of the Legislature that the income generated from the 

investments and the contributions from the 

employer and employees will meet the funding 

needs to pay the future pension benefit obligations. . . . [W]hat is most needed to financially 
‐65- 

reform the System is a corrective funding plan to 

provide for the annual actuarial funding of the 

shortfall in the cost of the System. . . . The annual 

funding of the G.E.R.S. must be made a “statutory debt” through legislation. 

Sept. 12, 2005 Gov’t Ops. Comm. Hrg. Tr. 13:14–17, 14:3–18, 

15:3–6, 16:3–8, 17:11–20 (emphases added). Todmann’s testimony shows that GERS understood the following: (a) shortfalls “must be made up by” the GVI and employees—rather 

than just the GVI via a supervening ADEC obligation; (b) the 

language in section 718(f) reflects the Legislature’s “intention” 

that the fixed contribution rates would be adjusted to provide 

actuarial soundness; and (c) annual, actuarially required funding of GERS was not a “statutory debt” of the GVI. As Todmann and others advocated, the 2005 amendments recognized 

that “[t]he GERS Board of Trustees is the entity best suited to 

determine the actuarial level and to fix appropriate contribution rates, commensurate with the future pension benefit obligations of the system.” V.I. 26th Legis., Bill No. 26-0071, Bill 

Summary, Section 14 (emphasis added); see 3 V.I.C. § 718(a). 

But the 2005 bill neither altered the scope of the GVI’s 

employer contributions in section 718 nor changed any of the 

language that GERS now invokes to charge the GVI with the 

ADEC obligation. Nor did its reforms address GERS’s 

“unfunded liability.” See generally Sept. 22, 2005 Hrg., V.I. 

Legislature, Committee on Rules and Judiciary. 

Though legislative history contemporaneous with the 

public-pension system’s enactment is unavailable, hearing 

transcripts from the 1990s and 2000s show that both GERS and 

the Legislature understood the GVI’s employer contribution 

obligation as limited to fixed percentages of employee compensation. Motivating GERS’s appeals to the Legislature was 
‐66- 

a recognition that nothing imposed an additional statutory 

responsibility on the GVI to assure actuarially sound funding 

of GERS. 

* * * 

 Approaching a fiscal cliff, GERS now protests that it 

will devolve into a pay-as-you-go system by 2023 unless the 

GVI funds it in accordance with the ADEC (or somehow 

increases its current contribution rate of 20.5 percent to 68 percent). But these are fiscal policy arguments we cannot entertain. If new pension legislation is needed, as it may well be, 

such arguments should be made in an appeal to the Legislature. 

There is simply no compelling interpretation of the statute or 

any extrinsic evidence that can support reading into Virgin 

Islands law GERS’s proffered ADEC obligation. We will thus 

affirm the District Court’s entry of judgment to the GVI in 

GERS’s cross-appeal. 

V. CONCLUSION

Court battles, a consent judgment, settlement efforts, 

piecemeal legislative fixes, and entreaties to elected officials 

have animated GERS’s 40-year campaign to secure actuarial 

soundness. But its successes have been qualified in large part 

by the limitations of the territorial law establishing the publicpension system. And so it goes in this appeal. Our ruling preserves an award of $18.9 million in principal, $6.1 million in 

interest and fees, and what will be additional millions in 

enhancements for GERS. But we take off the table tens of millions of dollars in enhancements that were awarded to GERS 

under an unsupportable retroactive application of Virgin 

Islands law. We have no doubt that GERS needs more—

possibly billions more—to fend off insolvency. But as mem-
‐67- 

bers of the Third Branch, we can neither write legislation nor 

levy taxes. And we are powerless to re-write imperfect but 

unambiguous statutes even if doing so would make them better 

serve the needs of their intended beneficiaries. 

Respecting the judiciary’s role in our Republic, we in 

turn expect the GVI to satisfy the judgment of the District 

Court.35 We are optimistic that all stakeholders will cooperate 

35 Our colleague, concurring in part, takes care to emphasize 

that, in affirming in part the April 3, 2020 order of the District 

Court, we hold only “that the GVI is liable for the obligations 

in the Consent Judgment” and do not “order[] the GVI to disburse monies from the Virgin Islands’ treasury.” Concurring 

Op. at 9. And who would disagree that the Legislature’s power 

of the purse is a pillar of the separation of powers and that the 

judiciary must respect the Legislature’s chosen mechanisms 

for making appropriations? See generally 33 V.I.C. §§ 3101 

(prohibiting GVI officers and employees from entering into 

contracts and obligations on behalf of GVI without an appropriation in advance “unless such contract or obligation is 

authorized by law”), 3106(a) (allowing designated officers of 

the GVI to exempt certain funds from apportionment); Act of 

Sept. 29, 2020, No. 8365 (appropriating $350,000 in fiscal year 

2021 for judgments greater than $25,000). Yet we must bear 

in mind that the GVI did not challenge the underlying order—

the 1984 consent judgment—as invalid for lack of an appropriation prior to appealing the District Court’s enforcement 

order. See United States v. Gov’t of V.I., 363 F.3d 276, 291–

92 (3d Cir. 2004) (affirming in part enforcement order against 

GVI, despite argument that district court lacked power to enter 

underlying order obligating GVI to pay funds without an 

appropriation, because GVI never challenged propriety of 

underlying order). 
‐68- 

in good faith to avert the looming insolvency of GERS. No 

opinion of ours could make, or even make easier, the hard 

choices that now confront the United States Virgin Islands and 

GERS. But our decision definitively underscores the need for 

pension reform and adequate funding legislation. Hopefully, 

greater accountability in the shared interests of protecting the 

deferred compensation of pensioners and the economy of the 

Islands will carry the day. 
1 

Government Employees Retirement System of the Virgin 

Islands v. Government of the Virgin Islands, Nos. 20-1749 & 

20-1766 

MATEY, Circuit Judge, concurring in part and dissenting in 

part. 

 Much about this appeal is a familiar story. Like many of 

our institutions, public pensions date to the Roman Empire, 

arriving in our new Republic as a comforting promise to 

injured patriots fighting in the Revolution.1

 Military pensions 

paved the way for civilian plans, with Massachusetts creating 

the first public employee retirement system in 1911.2

 Other 

states joined the rush3

 and, soon enough, state and local 

1 See Robert L. Clark, Lee A. Craig & Jack Wilson, A 

History of Public Sector Pensions in the United States, at 1–3 

(2003). In 1832, Revolutionary War pensions extended to 

those with at least six months of wartime service. See Theodore 

J. Crackel, Revolutionary War Pension Records and Patterns 

of American Mobility, 1780–1830, 16 Prologue 3 (Fall 1984), 

https://www.archives.gov/publications/prologue/1984/fall/pen

sion-mobility.html. 

2

 Clark et al., supra note 1, at 4. 

3

 There are currently over 3,400 state and local pension 

systems in the United States, covering more than 27 million 

members and beneficiaries. U.S. Gov’t Accountability Office, 

GAO-12-322, State and Local Government Pension Plans: 

Economic Downturn Spurs Efforts to Address Costs and 

Sustainability 4 (2012), 

https://www.gao.gov/assets/590/589043.pdf. 
2 

pensions became an entitlement of public service.4 But like 

many entitlements, pension promises prove hard to keep as 

lessons hard learned in antiquity5 are ignored or, perhaps, 

wished away.6

 Pensions, of course, are guarantees of future 

income. Funding the benefits due tomorrow means taking 

prudent fiscal steps today, and every year, for as long as those 

generous sums remain due. 

4

 Clark et al., supra note 1, at 5. See also Terrance 

O’Reilly, A Public Pensions Bailout: Economics and Law, 48 

U. Mich. J. L. Reform 183, 184 (2014) (“The traditional 

compensation for [a career as a public school teacher, police 

officer, or firefighter] includes . . . relatively comfortable 

retirement benefits.”). 

5 See Clark et al., supra note 1, at 1 (observing that “the 

fall of the Roman republic and the rise of the empire were 

inextricably linked to the payment, or rather nonpayment, of 

military pensions”). 

6

 Thinking dominated by “overoptimistic investment 

return assumptions” cannot meet the “the rising cost of state 

and local government employee retirement plans.” Andrew 

Biggs, Can States Afford Rising Public Pension Debts?, Forbes 

(Jul. 28, 2020), 

https://www.forbes.com/sites/andrewbiggs/2020/07/28/canstates-afford-rising-public-pension-debts/?sh=697c744b97ee; 

see also Mary Williams Walsh & Danny Hakim, Public 

Pensions Faulted for Bets on Rosy Returns, N.Y. Times (May 

27, 2012), 

https://www.nytimes.com/2012/05/28/nyregion/fragilecalculus-in-plans-to-fix-pension-systems.html (explaining the 

effects of overestimating projected rates of return). 
3 

 But across the country, this has not happened. 

Economists glumly estimate that state pensions combined hold 

unfunded liabilities between $700 billion and $4.6 trillion.7

Like a game of dominos, substantial benefits8

 connect to ever 

7

 T. Leigh Anenson, Alex Slabaugh & Karen Eilers 

Lahey, Reforming Public Pensions, 33 Yale L. & Pol’y Rev. 1, 

5 (2014). Underfunding for public school pensions alone tops 

$900 billion. Id. 8

 James Farrell and Daniel Shoag, Risky Choices: 

Simulating Public Funding Stress with Realistic Shocks, 

Brookings Inst. (Nov. 30, 2017), 

https://www.brookings.edu/research/risky-choicessimulating-public-pension-funding-stress-with-realisticshocks/ (“Another shortcoming with the existing debate is that 

models used by both academics and practitioners generally 

assume that state and local governments will indeed fund the 

promises they make. In practice, of course, governments often 

fail to come up with the money they ‘should’ contribute 

according to their funding laws.”); Rachel Greszler, TooGood-to-be-True Pensions Face Massive Shortfall, Heritage 

Found. (May 30, 2017), 

https://www.heritage.org/taxes/commentary/too-good-betrue-pensions-face-massive-shortfall (“For many Americans, 

defined benefit pensions have been a dream come true. After a 

few decades of labor, they’ve retired in their 50s or early 60s 

with a comfortable pension income for life. But that dream 

come true is too good to last.”); Andrew G. Biggs, Not So 

Modest: Pension Benefits for Full-Career State Government 

Employees, Am. Enter. Inst. 3 (Mar. 2014), 

https://www.aei.org/wp-content/uploads/2014/03/-aeieconomic-perspective-march-
4 

more funding from public coffers already spread too thin on a 

host of other priorities.9

 So even when hindsight highlights the 

obvious dilemma, it is nearly impossible to get back into the 

2014_160053300510.pdf?x91208 (“[M]any state retirement 

systems produce what might be called ‘pension millionaires’—

that is, employees who will receive more than $1 million in 

lifetime retirement benefits.”). 

9

 Naturally, the pull of pension costs necessarily “can 

squeeze out other important parts of state and local budgets.” 

Andrew G. Biggs, Have Public Employee Pensions Become 

More Generous, or less?, Forbes (Aug. 15, 2018), 

https://www.forbes.com/sites/andrewbiggs/2018/08/14/havepublic-employee-pensions-become-more-generous-orless/?sh=633e4df11e20. 
5 

black.10 Small wonder scholars have called the public pension 

crisis a “ticking time bomb.”11

10 See Monahan, supra note 7, at 123 (“A plan that has 

an unfunded liability must eventually make up that funding 

shortfall if it is to pay promised benefits. And the larger a 

plan’s unfunded liability the larger its annually required 

contributions will be.”); O’Reilly, supra note 4, at 186 (“Once 

a pension plan exhausts its reserves, it faces the same dilemma 

year after year simply to stay even: attempting to fund current 

retiree benefits out of cash flow while still setting aside 

adequate funds for the accruing benefits of current 

employees.”); see also O. Emre Ergungor, When States 

Default: Lessons from Law and History, 2017-16 Economic 

Commentary, at 1 (Fed. Reserve Bank of Cleveland, Oct. 

2017), https://www.clevelandfed.org/newsroom-and-events 

/publications/economic-commentary/2017-economiccommentaries/ec-201716-pensions-when-states-default.aspx 

(“The dire state of public pensions increases the likelihood 

that, at some point in the future, retirees may find themselves 

competing with other stakeholders for the same tax dollars in 

the appropriations process. Bondholders will also insist on 

being repaid, and residents will still need roads, sewers, water, 

and education.”). 

11 Anenson et al., supra note 7, at 11 n.45. Other dire 

forecasts warn of the “coming pension implosion” resulting 

from pension plans that were “built on a vision of corporate 

America where unchanging industries [had] lifetime 

employees” and established by laws that “are not only 

anachronistic, but unstable.” David John, Rea Hederman & 

Tim Kane, Are Pensions the Next Fiscal Crisis?, Heritage 
6 

All this to say, the facts underlying this case are not 

unique. This is not a problem specific to the Virgin Islands and 

GERS. Some cite the aspirational qualities of these promises, 

questioning how strained governmental budgets can bear 

lavish subsidies for retirees.12 Others blame the ballooning 

Found. (June 7, 2005), https://www.heritage.org/socialsecurity/report/are-pensions-the-next-fiscal-crisis. See also 

Erick M. Elder & Gary Wagner, Can Public Pensions Fulfill 

Their Promises?, at 3 (George Mason Univ. Mercatus Ctr., 

Working Paper, Apr. 2015), 

https://www.mercatus.org/system/files/Elder-PA-PublicPensions.pdf (referring to the pension funding situation in 

Pennsylvania as a “time bomb”); William G. Gale and Aaron 

Krupkin, Financing State and Local Pension Obligations: 

Issues and Options, Brookings Inst., at 1 (Jul. 2016), 

https://www.brookings.edu/wpcontent/uploads/2016/07/Financing-State-and-Local-PensionObligations-Gale-Krupkin-1.pdf (“Many states and 

municipalities are struggling to fund defined benefit pension 

plans for their employees. . . [A]lmost every state [has] 

implemented some combination of lower benefit accruals and 

higher employer or employee contributions.”). The 

coronavirus pandemic has exacerbated the public pension 

crisis. Mary Williams Walsh, Coronavirus is Making the 

Public Pension Crisis Even Worse, N.Y. Times (Apr. 2, 2020), 

https://www.nytimes.com/2020/04/02/business/coronaviruspublic-pension.html. 

12 In 2018, state and local pensions incurred new 

liabilities and servicing costs of $345 billion, while receiving 

only $151 billion of public funding. Andrew G. Biggs, Can 

States Afford Rising Public Pension Debts?, Forbes (Jul. 28, 
7 

costs of all entitlements.13 Several have reflected on how 

elected officials choose to offer ever-greater benefits and then, 

“maddeningly, [] choose not to fund public pensions as they 

are required.”14 But none have suggested an Article III court 

can resolve the issue. Nor have any courts tried, until today. 

2020), 

https://www.forbes.com/sites/andrewbiggs/2020/07/28/canstates-afford-rising-public-pension-debts/?sh=4e5c612897ee. 

13 See Brian M. Riedl, Deficit Reduction Requires Major 

Entitlement Reform, Heritage Found. (May 18, 2011), 

https://www.heritage.org/budget-and-spending 

/commentary/deficit-reduction-requires-major-entitlementreform (“Driven by entitlement costs, the national debt is set to 

reach cataclysmic levels.”); Robert E. Moffit, Price rises every 

day without entitlement reform, Heritage Found. (June 14, 

2006), https://www.heritage.org/health-carereform/commentary/price-rises-every-day-withoutentitlement-reform (observing that we are in “a time when 

entitlement costs already are growing much more rapidly than 

the tax receipts that are supposed to pay for them”). 

14 Paul M. Secunda, Litigating for the Future of Public 

Pensions, 2014 Mich. St. L. Rev. 1353, 1374 (2014); see also 

Frederick M. Hess & Juliet P. Squire, “But the Pension Fund 

Was Just Sitting There. . .” The Politics of Teacher Retirement 

Plans, 5:4 Education Finance and Policy 587, 588 (MIT Press, 

2010) (“For public pension funds, including those that cover 

teachers, the primary safeguard is the self-discipline of public 

officials and the hope that they will not be unduly tempted by 

short-term electoral considerations and influential 

constituencies. Given the state of public pension funds, these 

safeguards hardly seem adequate.”). 
8 

I am skeptical. In one sense, the dispute unfolds like a 

common law contract problem, asking the Court to merely 

determine the best meaning of an agreement. Viewed through 

that lens, I agree with much of the Court’s reasoning in Part 

III.A holding the Consent Judgment obligates the GVI for 

outstanding contributions under Section 718(g). Likewise, I 

agree with the analysis in Part III.B reasoning that interest and 

penalties cannot be read into the Consent Judgment 

retroactively.15 Indeed, as a matter of interpretation, I would go 

15 I do not see a need to consult the lack of legislative 

history to resolve “whether the statutory text . . . manifests an 

intent” to apply retroactively. Landgraf v. USI Film Prods., 

511 U.S. 244, 257 (1994) (emphasis added); see also I.N.S. v. 

St. Cyr, 533 U.S. 289, 316 (2001) (“The standard for finding [ 

] unambiguous direction” in the first Landgraf step “is a 

demanding one”), superseded by statute, REAL ID Act of 

2005, Pub. L. No. 109–13, 119 Stat. 310, as recognized in

Nasrallah v. Barr, 140 S. Ct. 1693 (2020); Gordon v. Pete’s 

Auto Serv. of Denbigh, Inc., 637 F.3d 454, 459 (4th Cir. 2011) 

(interpreting the “demanding” first Landgraf step as “requiring 

prescription that is truly express and unequivocal”) (citing St. 

Cyr, 533 U.S. at 316) (internal citation omitted). I recognize 

that when the statute is silent on retroactivity, courts have 

sometimes looked to legislative history. But “[w]hen the 

express terms of a statute give us one answer and extratextual 

considerations suggest another, it’s no contest. Only the 

written word is the law, and all persons are entitled to its 

benefit.” Bostock v. Clayton Cnty., Ga., 140 S. Ct. 1731, 1737 

(2020). As a result, “legislative history can never defeat 

unambiguous statutory text,” particularly when it does not 

exist. Id. at 1750; see also Arevalo v. Ashcroft, 344 F.3d 1, 12 
9 

further and conclude the Consent Judgment imposes additional

obligations on the GVI under Title 3 V.I.C. § 718(f), because 

GVI’s responsibility to pay “employer contributions” in 

Section 718 includes the “employer contributions” required by 

Section 718(f). If that were the scope of our decision, if this 

were just two parties asking a court to figure out who owes 

what, few would find the opinion today noteworthy. 

But we are writing on a far bigger stage, one that, I fear, 

will rightly draw the attention of governors and the governed 

across the country. If they interpret our decision to mean that 

the Article III judicial power comprehends a monetary award 

to pay a general statutory obligation, whether or not the 

separate sovereign has appropriated funds, a new and 

dangerous chapter in the pension wars will open. 

So I write separately to emphasize the narrower scope 

of the Court’s holding affirming only that the GVI is liable for 

the obligations in the Consent Judgment. But in doing so, the 

Court is not ordering the GVI to disburse monies from the 

Virgin Islands’ treasury. And that is because the federal courts 

almost always lack that authority. We stand, it seems, 

dangerously close to the Constitutional precipice. The parties 

need not return and ask us to step off. 

I. THE CONSENT JUDGMENT 

(1st Cir. 2003) (“At most, legislative histories of this type tell 

us that while Congress may have thought retroactivity to be an 

important topic, it could not muster a clear consensus on the 

subject.”) (citing Rivers v. Roadway Exp., Inc., 511 U.S. 298, 

309 (1994)). For that reason, I see no need to note its absence 

here.
10 

 GERS’s cross-appeal requires examining the ordinary 

understandings of an agreement. I begin with the small dispute 

over the best reading of the Consent Judgment. And the 

principles guiding that analysis—defining the words using 

their common meaning when drafted—informs the larger 

dispute over the best reading of Article III. It is a puzzle with 

only two pieces, both turning on the same questions of 

interpretation. 

A. The Consent Judgment Encompasses Section 718(f) 

 Start with the consent judgment, an instrument with 

“attributes of both contracts and injunctions.” E.O.H.C. v. 

Sec’y United States Dep’t of Homeland Sec., 950 F.3d 177, 192 

(3d Cir. 2020). Sometimes a consent decree imposes a 

correction, coercing compliance, handing out punishment, 

prohibiting future wrongs. That side of the coin matches the 

power of an injunction. Id. But “when a party seeks not to 

punish but to enforce the other party’s commitments,” like 

GERS here, the consent judgment “works more like a 

contract.” Id. So the Consent Judgment “is to be construed 

basically as a contract,” United States v. ITT Cont’l Baking 

Co., 420 U.S. 223, 238 (1975), with traditional principles of 

interpretation informing the terms. Flemming ex rel. Estate of 

Flemming v. Air Sunshine, Inc., 311 F.3d 282, 289 (3d Cir. 

2002). 

 Interpretation of any text turns, of course, on the text. 

Tamarind Resort Assocs. v. Gov’t of Virgin Islands, 138 F.3d 

107, 110 (3d Cir. 1998) (“It is axiomatic that where the 

language of a contract is clear and unambiguous, it must be 

given its plain meaning.”) (citing Restatement (Second) of 

Contracts § 202(3)(a) (1981)); see also In re Diet Drugs 

(Phentermine/Fenfluramine/Dexfenfluramine) Prod. Liab. 
11 

Litig., 706 F.3d 217, 223 (3d Cir. 2013) (“When the terms of a 

contract are clear and unambiguous, its meaning must be 

determined from the four corners of the contract.” (internal 

citation and quotation marks omitted)). If needed, we can aid 

that effort by looking at documents “expressly incorporated in 

the decree.” ITT Cont’l, 420 U.S. at 238. These principles lead 

me to conclude that the Consent Judgment includes the GVI’s 

obligations under Title 3 V.I.C. § 718(f), what GERS calls the 

“actuarially determined employer contribution” or “ADEC.” 

Appellee’s Br. at 53. 

 Here is why. The Consent Judgment tells the GVI to 

timely pay “the total amount due of . . . employer contributions 

as defined in Title 3, Section 718.” JA113–14. Naturally, that 

includes all of Section 718, from (a) to (g). So if Section 718(f) 

is an “employer contribution,” the GVI pays that amount. 

Section 718 does not explicitly spell out what is, or is not, an 

“employer contribution.” Indeed, that phrase does not appear 

anywhere in Section 718. But we have plenty of other help. 

 Section 718(a) explains who funds GERS: its members, 

the “employer,” and “interest income.” Section 718 also details 

what “contributions” the “employer” makes. For example, 

Section 718(g) says the “employer shall contribute” a fixed 

percentage of GVI employee salaries. Likewise, Section 

718(k) says the “employer shall . . . contribute to the System” 

costs of “any special early retirement program.” 3 V.I.C. § 

718(k) (1995).16 All of which inform the best reading of the 

16 As is often the case in a decades-old dispute, the 

locations of these provisions have moved around. Codification 

of the quoted version of Section 718(k) occurred in 1994. Act 
12 

similar wording in Section 718(f) that the “employer shall 

make contributions” to finance the fund’s actuarially 

determined reserve. 

 Taken together, there is nothing in Section 718 

suggesting that one particular subsection defines “employer 

contributions,” or that Section 718(f) does not. Or, as we have 

noted, the same words or phrases in different parts of the same 

statute have the same meaning unless there is “such variation 

in the connection in which the words are used as reasonably to 

warrant the conclusion that they were employed in different 

parts of the act with different intent.” Cf. Official Comm. of 

Unsecured Creditors of Cybergenics Corp. ex rel. Cybergenics 

Corp. v. Chinery, 330 F.3d 548, 559 (3d Cir. 2003) (en banc) 

(quoting Atlantic Cleaners & Dyers, Inc. v. United States, 286 

U.S. 427, 433 (1932)). The Consent Judgment reflects that 

structure, incorporating all of the “employer contributions . . . 

defined in Title 3, Section 718” and thus the “employer . . . 

contribution” in Section 718(f) as well as the “employer . . . 

contribut[ions]” in Section 718(g). That excludes a reading that 

places Section 718(g), but not Section 718(f), into the Consent 

Decree. See 11 Williston on Contracts § 30:25 (4th ed. 2020) 

(“When a writing refers to another document, that other 

document, or the portion to which reference is made, becomes 

constructively a part of the writing, and . . . [t]he incorporated 

of Aug. 26, 1994, No. 6007, § 8(c), 1994 V.I. Sess. Laws 150, 

158. A later reorganization moved this section into the current 

Section 718(j), 3 V.I.C. § 718(j) (2021), and Section 718(k) 

now addresses the timing and prioritization of the employer’s 

funding of early retirement programs. See V.I.C. § 718(k) 

(2021); Act of Nov. 2, 2005, No. 6794, § 14.4, 2005 V.I. Sess. 

Laws 380, 396. 
13 

matter is to be interpreted as part of the writing.”); see also

Antonin Scalia & Bryan Garner, Reading Law: The 

Interpretation of Legal Texts 101 (2012) (stating general terms 

“are to be accorded their full and fair scope” and “are not to be 

arbitrarily limited”). 

The District Court saw a flaw in this design. At the time 

of the Consent Judgment, the ADEC obligation flowed from 

an annual calculation. See § 718(e) (1968).17 In contrast, the 

Consent Judgment requires payments every pay period. That, 

the District Court held, makes an ADEC obligation under 

Section 718(f) impossible. But two obstacles hinder that 

reading. First, that is not what the Consent Judgment says. And 

we are not free to reorganize, rewrite, or restate the parties’ 

clearly expressed intentions. 

Second, even if it did, that does not read out the 

obligation of Section 718(f) because nothing prevents a pro 

rata ADEC payment every pay period after calculation. 

Indeed, that is the process used for all employer and employee 

contributions. See 3 V.I.C. § 718(h) (1968) (“[E]mployer and 

employee contributions shall be paid into the system each 

payroll period”), amended, Nov. 2, 2005, No. 6794, § 14.3, 

2005 V.I. Sess. Laws 380, 397 (“[E]mployer and employee 

contributions must be paid to the system within ten days after 

the closing of each payroll period.”); 3 V.I.C. § 718(h) (2021) 

(“[E]mployer and employee contributions shall be paid to the 

System within ten working days after the pay date.”). In other 

words, even if we accept the District Court’s premise that the 

17 Section 718(e) currently requires a “bi-annual[]” 

computation. Act of Oct. 26, 2015, No. 7802, § 2(f), 2015 V.I. 

Sess. Laws 147, 155; see 3 V.I.C. § 718(e) (2021). 
14 

Consent Judgment only encompasses regular pay period 

obligations, that still includes the regular pro rata contributions 

under Section 718(f) each pay period. 

B. Section 718(f) Obligates the GVI to Contribute the 

ADEC 

For these reasons, I read the Consent Judgment to 

include “employer contributions” required by Section 718(f), a 

conclusion the majority shares. We differ only in defining what 

Section 718(f) requires. Here again our task is interpretation, 

not invention. As always, we employ the “fundamental canon 

of statutory construction” requiring that we “interpret the 

words consistent with their ordinary meaning” when enacted. 

Wis. Cent. Ltd. v. United States, 138 S. Ct. 2067, 2070, 2074 

(2018) (internal quotation marks omitted); see also United 

States v. Johnman, 948 F.3d 612, 617 (3d Cir. 2020). “It is a 

focused inquiry and ‘[o]ur analysis begins and ends with the 

text.’” United States v. Smukler, --- F.3d ----, No. 19-2151, 

2021 WL 1056021, at *6 (3d Cir. 2021) (quoting Little Sisters 

of the Poor Saints Peter & Paul Home v. Pennsylvania, 140 S. 

Ct. 2367, 2380 (2020)). We tackle the task of interpretation 

using our “toolkit” with “all the standard tools of 

interpretation” used to “carefully consider the text, structure, 

history, and purpose” of the statute. Kisor v. Wilkie, 139 S. Ct. 

2400, 2414–15 (2019) (cleaned up). With that aim, we seek not 

a perfect answer on meaning, for one does not exist, but to 

“‘reach a conclusion about the best interpretation,’ thereby 

resolving any perceived ambiguity.” Shular v. United States, 

140 S. Ct. 779, 788 (2020) (Kavanaugh, J., concurring) 

(quoting Kisor, 139 S. Ct. at 2448 (Kavanaugh, J., concurring 

in the judgment)). Using that inquiry, I believe the best 

meaning of Section 718(f) obligates a GVI contribution 
15 

separate from its fixed-percentage obligations in Section 

718(g) sufficient to fund an “actuarially determined” reserve.18 

The majority reaches for a different set of tools and, as 

a result, reads Section 718(f) to merely preview the employer’s 

fixed percentage obligation in Section 718(g). An obligation, 

they write, to provide no more than “the fixed-percentage 

contributions of employees and employers to be calibrated to 

account for the changing actuarial needs of the system.” Maj. 

Op. at 53. But those conclusions do not flow from the text of 

the statute. Rather, they emerge first from what the statute does 

not say (based on language deleted in 1968), and second, the 

testimony of GERS representatives in legislative hearings 

decades after the statute’s enactment. Respectfully, I disagree 

with both that reasoning and result. 

1. Section 718 Requires An Adequately Funded 

Actuarial Reserve 

Before explaining why, let me note our broad areas of 

agreement. For one, none dispute that Section 718 requires 

actuarial soundness. That is plain from Section 718(a) 

requiring that the “obligations of the System shall be financed 

in accordance with actuarial reserve requirements[.]” 3 V.I.C. 

§ 718(a). As both commonly and technically19 understood 

when enacted, a pension plan with a “fully funded” “actuarial 

18 To be sure, the question of what the statute requires 

is separate from whether this Court has the power to enforce 

such requirements, a question addressed below. 

19 See Louisiana Pub. Serv. Comm’n v. F.C.C., 476 U.S. 

355, 357 (1986) (explaining “the rule of construction that 

technical terms of art should be interpreted by reference to the 

trade or industry to which they apply”). 
16 

reserve” is one in which the “reserve[’s] assets” have met the 

“actuarially determined obligation accrued.” Dorrance C. 

Bronson, Pension Plans – The Concept of Actuarial 

Soundness, 20-1 J. of the Amer. Ass’n of Univ. Tchrs. of Ins. 

36, 37 (Mar. 1953); see also Actuarially Sound Retirement 

System, Black’s Law Dictionary (11th ed. 2019) (defined since 

1947 as “[a] retirement plan that contains sufficient funds to 

pay future obligations, as by receiving contributions from 

employees and the employer to be invested in accounts to pay 

future benefits”).20 Using that meaning, Section 718(f) requires 

the “actuarially determined reserve” to “provide . . . for the 

annuities and benefits” of the System. 3 V.I.C. § 718(f) (1968). 

And the “actuarial reserve” contemplated by Section 718 is a 

pool of assets sufficient to satisfy its liabilities to future 

retirees. In the parlance of private pensions, this is a “defined 

benefit” plan—a “general pool of assets” entitling beneficiaries 

to “a fixed periodic payment”—rather than a defined 

contribution plan in which “the employer’s contribution is 

20 Accord Newton L. Bowers, Jr., An Approximation to 

the Distribution of Annuity Costs, 19 Transactions of Soc’y of 

Actuaries 295, 306 (1967) (defining a pension plan’s “actuarial 

reserve” as “the expected value of future annuity payments.”); 

James A. Graaskamp, Implications of Vested Benefits in 

Private Pension Plans: Comment, 33 J. of Risk and Ins. 489, 

493 (Sep. 1966) (describing “present actuarial reserve 

formulas” in pension plans as requiring “pay[ing] both vested 

and unvested, earned and unearned benefits”); Phelim Boyle & 

Mary Hardy, Guaranteed Annuity Options, 33 Astin Bulletin 

125, 129 (2003) (describing the “traditional actuarial reserving 

method” as “set[ting] aside additional capital to ensure that the 

liabilities under the guarantee will be covered with a high 

probability”). 
17 

fixed and the employee receives whatever level of benefits the 

amount contributed on his behalf will provide.” Hughes 

Aircraft Co. v. Jacobson, 525 U.S. 432, 440 (1999) (internal 

citations omitted). 

So too, all agree that Section 718(f) demands that 

GERS’s “actuarially determined reserve” receive “adequate” 

funding. No mysterious meaning here. Then, as now, the 

ordinary meaning of “adequate” in a quantitative context 

means “equal to what is required.” Adequate, Black’s Law 

Dictionary (4th ed. 1968); see also “adequate, adj.” OED 

Online, Oxford University Press, March 2021, 

www.oed.com/view/Entry/2299 (last visited April 6, 2021) 

(“Fully satisfying what is required; quite sufficient, suitable, or 

acceptable in quality or quantity.”). In other words, Section 

718(f)’s “adequate” modifier does not disturb what is 

otherwise clear from Section 718: that a particular funding 

quantum must satisfy the System’s future outputs: the 

members’ “annuities” and “benefits.”21 Finally, we reach the 

same conclusion that the fixed-percentage calibrations in 

Section 718(b) and Section 718(g) have not, and will not, 

achieve actuarial soundness. They are not, in other words, 

adequate. As history and math both prove, when the 

“actuarially determined reserve” exceeds the sum of those 

fixed-percentage contributions (plus income), the reserve 

cannot achieve “adequa[cy].” 3 V.I.C. § 718(f). 

21 And, since 1998, administrative costs. See Act No. 

5223, §§ 1–2, 1998 V.I. Sess. Laws 234, 234–35 (deleting then 

Section 718(i) requiring the GVI to fund the system’s 

administrative costs and folding that obligation into Section 

718(f).) 
18 

2. The GVI Must Ensure Adequacy 

Here is where I depart from the majority. Accepting that 

(a) the System must fund an actuarially sound reserve, and (b) 

arithmetic renders that impossible from fixed-percentage 

contributions alone, then something must make up that 

difference. The majority calculates differently, reading Section 

718(f) to preclude what Section 718 otherwise requires, 

thereby baking a funding shortfall into the statute. In a bit of 

self-sabotage, the argument goes, the Legislature really meant 

to incentivize all to do more by creating a hard-capped 

contribution system regularly “[re-]calibrated” to “account for 

the changing actuarial needs of the system.” Maj. Op. at 53.22

And I admit, that seems like a good way to marshal the public 

and political pressure needed to turn aspirations into action. 

Pay as you go, or face a shortfall sure to shorten the terms of 

those tasked with finding needed funds. Except that is not what 

22 The majority recognizes that the fixed-percentage 

contributions in Sections 718(b) & (g) “have not been 

accurately calibrated to the actuarial needs of the system.” Maj. 

Op. at 54. So if the “actuarially determined reserve” exceeds 

the sum of those fixed-percentage contributions (plus interest), 

the reserve cannot achieve “adequa[cy].” 3 V.I.C. § 718(f). 

Even so, the majority asserts that Section 718 does not 

“ensure a shortfall” because the statute can always be 

amended. Maj. Op. at n.29. That seems to summarize the 

problem. For to read a law to require, by design, other 

legislation to accomplish its objective is “so startling” that it is 

unlikely to represent the best reading. City of Columbus v. Ours 

Garage & Wrecker Serv., Inc., 536 U.S. 424, 449 n.4 (2002) 

(Scalia, J., dissenting). 
19 

the statute says, a point, as we will see, the majority does not 

dispute. 

Turn back to the text. As of the Consent Decree, Section 

718(f) read: 

The employer shall make contributions which 

together with the members’ contributions and the 

income of the system will be sufficient to provide 

adequate actuarially determined reserve for the 

annuities and benefits herein prescribed. 

3 V.I.C. § 718(f) (1968).23 As ordinarily understood, it is “the 

employer” who “shall” contribute what is needed for actuarial 

soundness. That is because the rule of last antecedent “provides 

that a limiting clause or phrase should ordinarily be read as 

modifying only the noun or phrase that it immediately 

follows.” Lockhart v. United States, 136 S. Ct. 958, 962–63 

(2016) (internal quotation marks omitted); see also Scalia & 

Garner, Reading Law 144. Here, the limiting phrase “shall 

make contributions” modifies the noun it immediately follows: 

“employer.” 3 V.I.C. § 718(f). 

Section 718(b) confirms that reading, requiring that 

“[e]ach employee who is a member of the system shall 

contribute” a fixed percentage of compensation. 3 V.I.C. § 

23 Later tweaks to this provision did not affect the 

operative language. See 3 V.I.C. §718(f) (2021) (now also 

requiring the “reserve” to cover the System’s “administration” 

costs); see Act No. 5223 §§ 1–2, 1998 V.I. Sess. Laws at 234–

35. 
20 

718(b) (1968)24 (emphasis added). Section 718(b)’s command 

phrase gives meaning to Section 718(f)’s application of the 

“shall contribute” modifier to “employers” but not “members.” 

See Madar v. United States Citizenship & Immigration Servs., 

918 F.3d 120, 123 (3d Cir. 2019) (“Under the interpretive 

canon expressio unius est exclusio alterius, we presume that 

‘[t]he expression of one thing implies the exclusion of 

others.’”) (quoting Scalia & Garner, Reading Law 107). 

The majority agrees this is the natural way to read the 

text, but reasons that because Section 718(f)’s employer 

contributions occur “together with” employee contributions 

and the System’s income, and because Section 718(a) 

“equaliz[es] the input of all stakeholders to the actuarial 

soundness of the system,” Section 718(f) must merely repeat 

Section 718(a) and preview Section 718(g). Maj. Op. at 55–56 

& n.30.25 Not so. 

24 The legislature has amended Section 718(b)’s fixedpercentage contribution provision from time to time, but not 

this obligating phrase. See 3 V.I.C. § 718(b) (2021) (“Each 

employee who is a member of the Government Employees 

Retirement System shall contribute a percentage of 

compensation” at the enumerated rate). 

25 The majority argues that the “structure” and 

“sequen[ce]” of Section 718 are best understood to mean 

Section 718(a) supplies Section 718(f)’s meaning. Maj. Op. at 

n.30, citing Pac. Emplrs. Ins. Co. v. Global Reins. Corp. of 

Am., 693 F.3d 417, 430 (3d Cir. 2012). I do not see how. 

Section 718(a) explains who funds the system; Sections 

718(b)–(d) explain what the members contribute and how; 
21 

First, Section 718(f) forecloses that reading. Accepting 

the majority’s interpretation that all three components—

employer contributions, member contributions, and income—

share Section 718(f)’s burden requires applying “shall make 

contributions” to “words or phrases more remote”—in this 

case, “members’ contributions and income from the system.” 

See Rule of the Last Antecedent, Black’s Law Dictionary (11th 

ed. 2019). That is precisely what the rule of last antecedent 

counsels against. Id.; see also Nearest-Reasonable-Referent 

Canon, Black’s Law Dictionary (a “postpositive modifier” 

including “adverbial or adjectival phrases” will “normally 

appl[y] only to the nearest reasonable referent”); Lockhart, 136 

S. Ct. at 963 (declining to depart from the rule where it would 

Section 718(e) requires the actuarial computation; and Sections 

718(f)–(k) detail the amount and method of the GVI’s 

contributions. See 3 V.I.C. § 718 (2021). If we can glean 

anything from “considering every provision of the [section] 

and how they fit together,” Pac. Emplrs., 693 F.3d at 430, it is 

that Sections 718(a) and (f) play distinct roles in the statutory 

scheme. 

The majority also reads the modifications to Section 

718(a) requiring the GERS Board to “actuarially determine the 

rate of contribution for members and employers,” 3 V.I.C. § 

718(a) (2021), as a “clear indication” that actuarial funding 

comes only from the fixed percentage contributions in Section 

718(b) and (g). Maj. Op. at n.30. Of course, that language was 

not in Section 718(a) as adopted in the Consent Decree in 1984. 

Act of Feb. 8, 1968, No. 2098, § 1, 1968 V.I. Sess. Laws, Pt. I, 

9–10. And it does not change the fact that when those fixed 

percentage contributions fall short “for whatever reason,” Maj. 

Op. at 54, the system suffers a funding gap that only Section 

718(f) can fill. 
22 

be “a heavy lift to carry the modifier” across entire preceding 

list of nouns). Nor does the result—compelling “income from 

the system” to “make contributions” to the systems—flow 

naturally. Applying the rule of the last antecedent avoids that 

trouble, and “reflects the basic intuition that when a modifier 

appears at the end of a list, it is easier to apply that modifier 

only to the item directly before it.” Lockhart, 136 S. Ct. at 963. 

Second, nothing in the broader statutory landscape 

supports an interpretation of Section 718(a) as “equalizing” the 

responsibility for funding the System. Maj. Op. at 56. Section 

718(a) says nothing about the allocation of funding 

responsibilities, much less that it must be equal. Nor does 

Section 718(f)’s directive that the various system inputs must 

“together” provide the actuarial reserve. Just because W + X + 

Y = Z does not mean W = X or W = Y. 

Indeed, if the statute tells us anything about allocation, 

it is that the GVI bears the laboring oar. As first enacted, the 

statute created a fixed “4 per cent” employee contribution and 

a variable employer rate. See 3 V.I.C. § 718 paras. 2, 5 (1959). 

A 1968 amendment added a fixed-percentage employer 

contribution in Section 718(g) exceeding the employee rates in 

Section 718(b). See Act of Feb. 8, 1968, No. 2098, § 1, 1968 

V.I. Sess. Laws, Pt. I, 9–10 (enumerating member and 

employer contribution rates in §§ 718(b) and (g), respectively). 

Since July 1, 1968, the GVI’s contribution required by Section 

718(g) has always exceeded the contemporaneous contribution 

required from members under Section 718(b).26 That lopsided 

26 See Act of Apr. 23, 1970, No. 2700, § 12, 1970 V.I. 

Sess. Laws 73, 82–83; Act of July 8, 1974, No. 3593, § 3, 1974 
23 

responsibility grew in 2005, when another amendment 

prohibited the GERS Trustees from increasing employee 

contribution “rates” more than 3.0% over a five-year period. 

Act of Nov. 2, 2005, No. 6794, § 14.2, 2005 V.I. Sess. Laws 

380, 396–97. Section 718(g), by contrast, has never had a 

comparable rate increase cap. See 3 V.I.C. § 718(g) (2021).27

And the GVI, not the members, has always borne responsibility 

for covering administrative costs. Id. § 718, para. 6 (1959); id.

§ 718(i) (1968); id. § 718(f) (2021). 

This is all to say that there is nothing “contradict[ory]” 

in reading Section 718(f) as elevating the GVI’s financing 

responsibility. Maj. Op. at 56. Quite the contrary. Doing so 

gives meaning, rather than superfluity, to Section 718(f), 

consistent with “the larger statutory landscape[.]” Henson v. 

Santander Consumer USA Inc., 137 S. Ct. 1718, 1722 (2017); 

Scalia & Garner, Reading Law 180 (“[T]here can be no 

justification for needlessly rendering provisions in conflict if 

they can be interpreted harmoniously”). 

3. Section 718(f) Requires the ADEC 

So what is the GVI’s responsibility, exactly? To “make 

contributions” that are “sufficient to provide adequate 

V.I. Sess. Laws 189, 190; Act of March 15, 1990, No. 5522, § 

1(xii)–(xiii), 1990 V.I. Sess. Laws 34, 37–38; Act of Apr. 12, 

2008, No. 6992, §1, 2008 V.I. Sess. Laws 14, 15. 

27 This does not mean that the statute empowers the 

GERS Board to unilaterally increase the GVI’s rates in Section 

718(g) to achieve actuarial soundness. Maj. Op. at n.29. 

Indeed, as the majority observes, it is GERS’s inability to do 

so that arguably makes its cross-appeal justiciable in the first 

place. Maj. Op. at n.4. 
24 

actuarially determined reserve” for the system. 3 V.I.C. § 

718(f). But not, as the majority suggests, exclusively through 

the fixed-percentage contributions enumerated in Section 

718(g). Section 718(f) must require a separate contribution 

from its fixed-percentage contributions in Section 718(g). If we 

are to give effect to Section 718’s unambiguous requirement 

that the system maintain an actuarially sound reserve, Section 

718(f) must cover what the fixed-percentage contributions and 

interest income do not. Otherwise, we would not only need to 

“treat [Section 718(f)] as stray marks on a page—notations that 

[the Legislature] regrettably made but did not really intend.” 

Advocate Health Care Network v. Stapleton, 137 S. Ct. 1652, 

1659 (2017) (internal quotation marks omitted). We would also 

ignore the “presumption against ineffectiveness—the idea that 

Congress presumably does not enact useless laws.” United 

States v. Castleman, 572 U.S. 157, 178 (2014) (Scalia, J., 

concurring). 

Taken together, I cannot adopt an interpretation of the 

“Finance” Section of the GERS statute that does not finance 

GERS. 

4. The Majority’s Reasoning 

The majority offers two responses to this reading. First, 

if Section 718(f) required the GVI to make the ADEC 

contribution, Section 718(g)’s fixed-percentage contribution 

would be superfluous. Maj. Op. at 57. Setting aside that the 

majority’s view makes Section 718(f) redundant twice over—

essentially repeating Sections 718(a) and (g)—I do not see why 

a steady stream of funding every pay period is pointless just 

because more is coming later. 3 V.I.C. § 718(h) (1968) 

(requiring contributions “each payroll period.”). GERS, like 

any “corporation,” must regularly tend to “debts, obligations, 
25 

contracts, . . . expenditures, facilities, and property,” id. § 

701(c), other “administrative expenses,” id. § 718(f), and, 

critically, investments. And all persons, real or legal, 

“[r]emember that Money is of a prolific generating nature. 

Money can beget Money, and its Offspring can beget more, 

and so on. . . . The more there is of it, the more it produces 

every Turning, so that the Profits rise quicker and quicker.” 

Benjamin Franklin, Advice to a Young Tradesman (1748), in 

The Works of Benjamin Franklin, Vol. II 87, 87–88 (Jared 

Sparks ed., Hilliard, Gray & Co. 1840). The ADEC, dependent 

as it is on the Legislature’s response to a once- or twice-annual 

“actuarial reserve” calculation, 3 V.I.C. § 718(e), may not 

satisfy these urgent demands. And even if a robust ADEC 

disbursement leaves Section 718(g)’s regular income stream 

with “little to do, that’s hardly a reason to abandon it,” for it is 

“not our function to rewrite a constitutionally valid statutory 

text under the banner of speculation about what [the 

Legislature] might have intended.” Wis. Cent. Ltd., 138 S. Ct. 

at 2073. If Section 718(g) would then do nothing at all, that is 

not dispositive either. “Sometimes the better overall reading of 

the statute contains some redundancy.” Rimini Street, Inc. v. 

Oracle USA, Inc., 139 S. Ct. 873, 881 (2019). 

The majority next argues that the statutory history 

proves that Section 718(f) merely creates an aspirational goal 

that the Section 718(g) fixed-percentage contributions will 

ensure actuarial soundness. Because the 1959 version of the 

statute also obligated the employer to ensure actuarial 

soundness but defined “the amount of contributions by the 

employer” as “determined by applying a percentage rate to the 

aggregate compensation of the members for each regular 

payroll period,” the “employer contribution” described in the 

amended statute must bear this meaning too. Maj. Op. at 57–
26 

58, quoting Act of June 24, 1959, No. 479, § 718, 1959 V.I. 

Sess. Laws 92, 110. 

I disagree. The majority looks to statutory language28

stricken from the statute in 1968. Act of Feb. 8, 1968, No. 

2098, § 718(f), 1968 V.I. Sess. Laws, Pt. I, 9. The 1968 

amendments also bifurcated the “adequate actuarially 

determined reserve” funding obligation and the fixedpercentage contribution obligation into separate sections, (f) 

and (g), respectively. Id. at 9–10. These revisions are telling. 

After 1968, the employer’s obligation to ensure actuarial 

adequacy remained (new § 718(f)), but “the amount of 

contributions by the employer” (§ 718 para. 5 (1959)) was no 

longer exclusively tethered to employee salaries (new § 

718(f)–(g)). “To my mind, [the Legislature]’s decision to 

remove the only language that could have fairly captured” the 

majority’s reading “cannot be easily ignored.” BNSF Ry. Co. 

v. Loos, 139 S. Ct. 893, 907 (2019) (Gorsuch, J., dissenting). 

Nor does Section 718(g)’s “detailed schedule of 

percentages” transform Section 718(f)’s less-detailed 

description of the ADEC into the always-dreaded “elephant in 

a mousehole.” Maj. Op. at 58. As enacted, the ADEC may not 

have been an elephant. As recently as 1999, the “additional 

required contribution for the year” necessary to achieve 

actuarial adequacy was $24 million. JA127. Each of the next 

two years, the GVI’s actuarially determined contributions fell 

~$21 million short. The GVI’s underfunding snowballed, soon 

28 That “the amount of contributions by the employer 

for the various purposes of the system shall be determined by 

applying a percentage rate to the aggregate compensation of 

the members.” 
27 

requiring GERS to liquidate investments in a futile attempt to 

tame the growing “elephantine mass” of debt. Ortiz v. 

Fiberboard Corp., 527 U.S. 815, 821 (1999). Section 718(f) is 

not an elephant in a mousehole so much as a mouse in a 

mousehole who, neglected by the homeowner, spawned a 

family of mice. In any event, counting how much debt piled up 

over decades of non-compliance does not answer whether the 

GVI must pay that bill. Elevating poor performance to a 

defense against legal duty would make for quite a rodent’s nest 

in which anyone can hide from statutory obligations. 

Finally, the majority looks beyond the statute to the 

testimony of GERS representatives before the Legislature in 

1997 and 2005. To the majority, this proves that GERS 

understood that Section 718(f) does not require the ADEC. 

Maj. Op. at 62–66.29 Respectfully, I am not sure why this 

29 The majority also cites a stray comment from a Virgin 

Islands Senator acknowledging that “the government throws in 

an additional percentage” on top of employee contributions 

“and that creates a pool of money for [GERS].” Maj. Op. at 

n.34, quoting Sept. 26, 2005 Reg. Sess. (Part II) Hrg. Tr. 46:2–

6. The majority suggests this shows that legislators shared 

GERS’s understanding that Section 718 only requires fixedpercentage contributions. At best, this statement describes how 

Section 718(g) works. It says nothing about Section 718(f) nor 

suggests the Legislature did not recognize the ADEC 

obligation. We should not “allow[] ambiguous legislative 

history to muddy clear statutory language.” Milner v. Dep’t of 

the Navy, 562 U.S. 562, 572 (2011). 

Even more to the point, this is a problematic way to 

discern the meaning of Section 718. “State legislatures are 
28 

ancient testimony in a legislative hearing matters, for 

“legislative history is not the law,” Epic Sys. Corp. v. Lewis, 

138 S. Ct. 1612, 1631 (2018), and “‘[p]ost enactment 

legislative history is not a reliable source for guidance’ in 

assessing the ordinary meaning of a statute.” Johnman, 948 

F.3d at 620 n.8 (alterations in original) (quoting Pa. Med. Soc’y 

v. Snider, 29 F.3d 886, 898 (3d Cir. 1994)). The testimony of 

non-legislators is of the least authoritative sort. See William M. 

Eskridge, Jr., Phillip P. Frickey & Elizabeth Garrett, 

Legislation and Statutory Interpretation 317 (2d ed. 2006). If 

the thought is that GERS’s statement is reliable as against its 

own interest, then why would the majority dismiss as irrelevant 

the GVI’s recent admission through counsel that “[t]here is an 

obligation to pay” the ADEC (but the Consent Decree does not 

incorporate it)? Maj. Op. at n.28, citing JA1786–88. If one 

party’s understanding of this text is all but dispositive, the 

other’s is at least relevant. Of course, neither is either of those 

things, because “[o]ral testimony of witnesses . . ., can seldom 

be expected to be as precise as the enacted language itself.” 

Regan v. Wald, 468 U.S. 222, 237 (1984). Determining the 

composed of individuals who often pursue legislation for 

multiple and unexpressed purposes . . . [W]hat percentage of 

the legislature must harbor [this view] before we can impute it 

to the collective institution? . . . And if trying to peer inside 

legislators’ skulls is too fraught an enterprise, shouldn’t we 

limit ourselves to trying to glean legislative purposes from the 

statutory text where we began?” Virginia Uranium, Inc. v. 

Warren, 139 S. Ct. 1894, 1906–07 (2019) (Gorsuch, J., 

plurality opinion). This difficulty is why “[f]loor statements 

from [one] Senator[] cannot amend the clear and unambiguous 

language of a statute.” Barnhart v. Sigmon Coal Co., Inc., 534 

U.S. 438, 457 (2002). 
29 

meaning of a statute “by such colloquies, . . . would open the 

door to the inadvertent, or perhaps even planned, undermining 

of the language actually voted on.” Id.30 

Reading Section 718(f) out of the statute eliminates 

Section 718’s mandate that the System fund an actuarial 

reserve. That is why I respectfully decline to join the majority 

as to Part IV. 

II. ARTICLE III REMEDIES

Beyond the questions of contract and agreement, 

statutes and best meanings, and the decisions that produced this 

particular moment in a longstanding crisis, rests a most 

fundamental problem. The GVI, following the usual course of 

lawmaking, invoked the legislative powers delegated from the 

people to commit a portion of the people’s property to GERS. 

30 This same reasoning should foreclose imbuing the 

text of the Consent Decree with extrinsic evidence such as 

GERS’ testimony or the parties’ conduct. Because we can 

interpret the contract within its “four corners,” including the 

portions of Section 718 “expressly incorporated in the decree,” 

ITT Cont’l, 420 U.S. at 238, our inquiry should end there. No 

matter the extrinsic evidence, “the parties remain bound by the 

appropriate objective definition of the words they use to 

express their intent.” Baldwin v. Univ. of Pittsburgh Med. Ctr.,

636 F.3d 69, 76 (3d Cir. 2011) (citation and quotation marks 

omitted). Accord Restatement (Second) of Contracts § 203(b) 

(1981) (in contract interpretation, “express terms are given 

greater weight than course of performance, course of dealing, 

and usage of trade”). The Consent Judgment includes 

“employer contributions” in Section 718, including those 

required by Section 718(f). 
30 

That is how lawmaking works. Then, repudiating that promise, 

it paid GERS much less. Justly, GERS objects. Insolvent, GVI 

offers regrets and hopes that tomorrow will bring a better 

answer. Options abound within the ample powers of the 

legislative and executive branches. Still more exist in the 

people of the Virgin Islands, to whom both those public bodies 

are accountable. 

But what of the courts established under Article III? Can 

they use the judicial power to simply order a sovereign 

territorial government31 to pay? Respectfully, the original and, 

31 No authority exempts cases arising in the Virgin 

Islands from the scope of the Article III judicial power. See, 

e.g, Birdman v. Office of the Governor, 677 F.3d 167, 173 (3d 

Cir. 2012) (affirming dismissal of claim against Virgin Islands 

as unripe because “[f]ederal courts are only empowered to 

decide cases and controversies as our Article III jurisprudence 

defines them.”) (internal citation and quotation marks 

omitted); United States v. Gov’t of V.I., 363 F.3d 276, 284 n.3 

(3d Cir. 2004) (“The District Court of the Virgin Islands is an 

Article IV court, but is authorized by statute to exercise 

jurisdiction equivalent to an Article III court”) (discussing 48 

U.S.C. § 1612(a)); Edwards v. HOVENSA, LLC, 497 F.3d 355, 

360 (3d Cir. 2007) (citing 48 U.S.C. § 1613). As noted by the 

District Court of the Virgin Islands, the territory is subject to 

the same fundamental separation-of-powers principles that 

apply throughout our Republic. See Bell v. Luis, 528 F. Supp. 

846, 850 (D.V.I. 1981) (invalidating Virgin Islands Governor’s 

order seeking to “redirect territorial funds” without legislative 

authority because the “necessity for ‘checks and balances’ 

forms the basis for our constitutional form of government and 

must be adhered to”). 
31 

indeed, enduring understanding of the Constitution holds they 

may not. 

A. The Judicial Power Holds No Purse 

A summary of foundational principles helps frame my 

concerns. The Appropriations Clause of the U.S. Constitution 

states that “No Money shall be drawn from the Treasury, but 

in Consequence of Appropriations made by Law[.]” U.S. 

Const. art. I, § 9, cl. 7. This clause is not an authorization of 

spending but “a limitation on executive or judicial action rather 

than a grant of any power—which is why it appears in Article 

I, section 9, the portion of the original Constitution that is 

devoted to direct limitations on various federal actors.” Gary 

Lawson & Guy Seidman, The Constitution of Empire 27 

(2004).32 The Founders found, rather than invented, this 

“power of the purse” a new noble privilege that “in the history 

of the British Constitution . . . gradually enlarg[ed] the sphere 

of its activity and importance, and finally reduc[ed], as far as it 

seems to have wished, all the overgrown prerogatives of the 

other branches of the government.” The Federalist No. 58, p. 

350 (Issac Kramnick ed., 1987) (Madison).33 Persuaded by that 

32 The Appropriations Clause “makes appropriations 

statutes a precondition to any federal spending, so that 

presidents and judges cannot spend on their own authority.” 

Lawson & Seidman, The Constitution of Empire 27. It is not 

the source of Congress’s power to spend. That must be found 

elsewhere in the Constitution, such as the Property Clause of 

Article IV. See id.

33 Placing the spending power outside the executive and 

the judiciary was an innovation of colonial America that led to 
32 

experience, the Framers and Ratifiers hoped to give the people 

of the new American Republic the same power “to resist the 

royal tax collectors, to assert their right of being asked for their 

consent to new or exceptional levies . . . to determine the 

expenditures of the government.” Carl Friedrich, 

Constitutional Government and Democracy 281 (1965).34

the rise of the colonial assemblies. See Christine A. Desan, The 

Constitutional Commitment to Legislative Adjudication in the 

Early American Tradition, 111 Harv. L. Rev. 1381, 1391 n.23 

(1998) (gathering sources). In fact, “no provisions appear to 

contemplate suits that would allow recovery for colony 

obligations such as those of contract and taking.” Id. at 1444–

45. The Constitution enshrined that limit, and the record shows 

that even contractual claims against the government required 

an appeal to the legislature, not the court. “[W]hile the right to 

indemnity was understood in contractual terms, the practice of 

securing a determination of the right to indemnity almost 

invariably entailed the submission of a petition to Congress for 

the adoption of private legislation.” James E. Pfander & 

Jonathan L. Hunt, Public Wrongs and Private Bills: 

Indemnification and Government Accountability in the Early 

Republic, 85 N.Y.U. L. Rev. 1862, 1866 (2010). 

34 The commentaries from the first American generation 

share this conclusion. For example, St. George Tucker’s 

influential Blackstone’s Commentaries connects the rights of 

the people to the appropriations approved by the legislature: 

All the expenses of government being paid by the 

people, it is the right of the people, not only, not 

to be taxed without their own consent, or that of 

their representatives freely chosen, but also to be 
33 

Rightly, they viewed the power of the purse “as the most 

complete and effectual weapon with which any constitution 

can arm the immediate representatives of the people, for 

obtaining a redress of every grievance, and for carrying into 

effect every just and salutary measure.” The Federalist No. 58, 

p. 350 (Isaac Kramnick ed., 1987) (Madison). By design, not 

historic accident, “the legislative department alone has access 

to the pockets of the people.” The Federalist No. 48, p. 310 

(Isaac Kramnick ed., 1987) (Madison). Relegating the 

appropriations power to the legislature meant 

“the purse remains, by this Constitution, in the representatives 

of the people. We know very well that they cannot raise one 

shilling but by the consent of the representatives of the people. 

. . . Every appropriation must be by law.” 4 The Debates in the 

Several State Conventions on the Adoption of the Federal 

Constitution 172–73 (Jonathan Elliot ed., 2d ed. 1836) 

actually consulted upon the disposal of the 

money which they have brought into 

the treasury; it is therefore stipulated that no 

money shall be drawn from the treasury, but in 

consequence of appropriations, previously made 

by law: and, that the people may have an 

opportunity of judging not only of the propriety 

of such appropriations, but of seeing whether 

their money has been actually expended only, in 

pursuance of the same... 

St. George Tucker, Blackstone’s Commentaries 1 App. 362–

64, in The Founders’ Constitution, Volume 3, Article 1, 

Section 9, Clause 7, Document 3 (Univ. of Chicago Press), 

http://presspubs.uchicago.edu/founders/documents/a1_9_7s3.html. 
34 

(Maclaine) (responding to Locke’s doubts that the federal 

judiciary would be impartial).35

In contrast, the judicial power is as limited as it is 

independent.36 Even to the staunchest advocates of federal 

35 In that same spirit, the Rhode Island delegates 

expressed their concerns to Gov. William Greene on the need 

to guard spending to guarantee liberty: 

The power of the purse is the touch-stone of 

freedom in all States. If the people command 

their own money they are free; but if their 

Sovereign commands it they are slaves. All other 

strings in government take their tone from the 

mode of raising money. An alteration therefore 

in the mode of raising money is an alteration of 

the Constitution. It is an essential & radical 

change. A change that, on experience, will be felt 

most sensibly. It cannot be an indifferent thing, 

or a matter of small moment. It is like altering 

the center of gravity. It is like transferring the fee 

simple of an estate. It is like putting your weapon 

of defence into another man’s hand. 

Letters of Delegates to Congress: Volume 20 March 12, 1783 

- September 30, 1783, 638 (Sept. 8, 1783), Rhode Island 

Delegates to William Greene, https://memory.loc.gov/cgibin/query/r?ammem/hlaw:@field(DOCID+@lit(dg020542)).

36 “Th[e] belief in the limited nature of the [court’s] 

equity power was consistent with the framers’ broader 

understanding of the judicial power, which was, in Publius’ 
35 

authority, this limitation on the judicial power was necessary 

to affirm Congress’s primacy and the complex role of the 

Executive in faithfully implementing legislative decisions. 

Indeed, “[i]n establishing the system of divided power 

in the Constitution, the Framers considered it essential that ‘the 

judiciary remain[ ] truly distinct from both the legislature and 

the executive.’” Stern v. Marshall, 564 U.S. 462, 483 (2011)

(alteration in original) (quoting The Federalist No. 78, p. 466 

(C. Rossiter ed. 1961) (Hamilton)). So the “[j]udicial power is 

never exercised for the purpose of giving effect to the will of 

the Judge; always for the purpose of giving effect to the will of 

the Legislature; or, in other words, to the will of the 

law.” Gamble v. United States, 139 S. Ct. 1960, 1982 (2019) 

(Thomas, J., concurring) (quoting Osborn v. Bank of United 

States, 9 Wheat. 738, 866 (1824) (Marshall, C.J.)).37

opinion, ‘beyond comparison the weakest of the three 

departments of power.’” John Choon Yoo, Who Measures the 

Chancellor’s Foot? The Inherent Remedial Authority of the 

Federal Courts, 84 Cal. L. Rev. 1121, 1159 (1996) (quoting 

The Federalist No. 78 (Hamilton)). 

37 “Although ‘judicial independence’ is often discussed 

in terms of independence from external threats, the Framers 

understood the concept to also require independence from the 

‘internal threat’ of ‘human will.’” Perez v. Mortg. Bankers 

Ass’n, 575 U.S. 92, 120 (2015) (Thomas, J., concurring) 

(quoting Philip Hamburger, Law and Judicial Duty 507, 508 

(2008)). Judges ought to guard against these internal threats, 

which “might include personal biases,” because 

“[i]ndependent judgment require[s] judges to decide cases in 
36 

Thus it was the Executive, not the Judiciary, that the 

Founders saw as most likely to usurp Congress’s appropriation 

power. Key to that balance is “[t]he separation between the 

Executive and the ability to appropriate funds that was 

frequently cited during the founding era as the premier check 

on the President’s power.” United States House of 

Representatives v. Mnuchin, 976 F.3d 1, 8 (D.C. Cir. 2020). It 

was a promise made to allay the fears of Anti-Federalists that 

the president would soon become a tyrant. See Josh Chafetz, 

Congress’s Constitution, Legislative Authority and the 

Separation of Powers 57 (2017); see also 3 Elliot’s Debates 

367 (Madison) (responding to Anti-Federalist claims that the 

President could make himself king by explaining that “[t]he 

purse is in the hands of the representatives of the people”). This 

is why Madison called the power of the purse “the most 

complete and effectual weapon with which any constitution 

can arm the immediate representatives of the people . . . .” The 

Federalist No. 58, p. 350 (Isaac Kramnick ed., 1987) 

(Madison). And Hamilton persuaded those at the New York 

ratification convention by telling them, “where the purse is 

lodged in one branch, and the sword in another, there can be 

no danger.” 2 Elliot’s Debates 349 (Hamilton). 

The history of the constitutional debates makes clear 

that the purse belongs only to the people who, through a 

conscious delegation of agency, entrust that awesome privilege 

accordance with the law of the land, not in accordance with 

pressures placed upon them through either internal or external 

sources.” Id. at 120–21. 
37 

to the legislature.38 In fact, “the Convention never had in mind 

that the right of appropriation could be exercised by any branch 

other than the legislature. . . . There is no warrant to believe 

that judges had any authority to appropriate money from the 

treasury.” Figley & Tidmarsh at 1252. And “[t]hroughout the 

debates, delegates expressed concern for the ‘purse strings’ or 

the ‘purse’ — always regarding the protection of the people’s 

money as a legislative function. No delegate voiced the 

opinion that the judicial branch would have any say in the 

government’s finances.” Id. at 1253. From our earliest days, 

the judicial power was appropriately limited in proportion to 

its independence as the only branch of government not 

beholden to the people through elections. And so we are 

therefore subject to the “clear restraints” on our authority 

arising from “federalism and the separation of powers, [which] 

derive from the very form of our government.” Missouri v. 

38 A review of the historical literature on the 

appropriations clause gives us both scope and context for these 

sources. Synthesizing Federalist Nos. 48, 58, 78, and 81, Figley 

and Tidmarsh highlight how the power of the purse belongs 

solely to the legislature. “Determining the circumstances under 

which the government was liable for monetary relief was a 

legislative, not a judicial, function.” Paul F. Figley & Jay 

Tidmarsh, The Appropriations Power and Sovereign 

Immunity, 107 Mich. L. Rev. 1207, 1257 (2009). Recounting 

the history of debating states’ debts during Ratification, they 

write, “the shared understanding of both those favoring and 

those opposed to the Constitution was that legislatures, which 

controlled appropriations from the public treasury, controlled 

the award of claims against the sovereign.” Id. at 1258. 
38 

Jenkins, 515 U.S. 70, 131 (1995) (Thomas, J., concurring) 

(“Jenkins II”). 

B. The Historic Protections Against Judicial Spending 

Thanks to the clarity of the text of the Appropriations 

Clause, federal courts have always understood they lack power 

to order money judgments against the coordinate branches of 

government—be they federal, state, or local—absent 

legislative appropriations or, in the rare case, an equivalent and 

explicit legislative funding commitment. Sometimes, it is 

called an “established rule” that “the expenditure of public 

funds is proper only when authorized by Congress.” United 

States v. MacCollom, 426 U.S. 317, 321 (1976) (citing Reeside 

v. Walker, 52 U.S. (11 How.) 272, 291 (1850)). Other times, a 

“historic . . . principle” that “before any expenditure of public 

funds can be made, there must be an act of Congress 

appropriating the funds and defining the purpose for such 

appropriation. Thus, no officer of the Federal Government is 

authorized to pay a debt due from the U.S., whether or not 

reduced to a judgment, unless an appropriation has been made 

for that purpose.” Hughes Aircraft Co. v. United States, 534 

F.2d 889, 906 (Ct. Cl. 1976) (citing Reeside, 52 U.S. (11 How.) 

at 290) (emphasis added). But whatever the characterization, 

the character of the cases is clear: “a treasury, not fenced 

round” and “subjected to any number of description of 

demands” from “the undefined and undefinable discretion of 

the courts” would constitute “an absence of all rule” that would 

create a government “guided by . . . the uncertain, and perhaps 

contradictory action of the courts, in the enforcement of their 

views of private interests.” U.S. ex rel. Goodrich v. Guthrie, 58 

U.S. (17 How.) 284, 303 (1854). 
39 

This limitation connects to the limited nature of the 

judicial power. While the federal courts can decide cases and 

controversies involving the other branches of government, they 

cannot order the payment of a judgment against a sovereign 

absent an appropriation. See, e.g., Office of Pers. Mgmt. v. 

Richmond, 496 U.S. 414, 424–26 (1990) (“Any exercise of a 

power granted by the Constitution to one of the other branches 

of Government is limited by a valid reservation of 

congressional control over funds in the Treasury.”). As a result, 

Congress needed to appropriate funds for judgments against 

the federal government, first annually, e.g., Act of June 25, 

1864, ch. 147, 13 Stat. 145, 148, now with indefinite 

guarantees covering most adverse money judgments against 

the United States. See 31 U.S.C. § 1304. 

1. Open-Ended Money Judgments 

The Appropriations Clause is “a core structural 

protection of the Constitution—a wall, so to speak, between 

the branches of government that prevents encroachment of the 

House’s and Senate’s power of the purse.” Mnuchin, 976 F.3d 

at 8. As with all separation of powers issues, our jurisprudence 

“generally focuses on the danger of one branch’s aggrandizing 

its power at the expense of another branch.” Freytag v. Comm’r 

of Internal Revenue, 501 U.S. 868, 878 (1991). So when there 

is an enforceable obligation—whether by contract or statute—

a money judgment can only apply to a legislative 

appropriation, or a similar statutory mechanism if one exists.39

39 For example, upon finding the Government liable for 

contract damages the Federal Court of Claims observed that 

“where the Appropriations Clause and the Anti-Deficiency Act 
40 

Nor can federal courts compel a government to raise the 

monies needed to satisfy a money judgment. INS v. Pangilinan, 

486 U.S. 875, 883 (1988) (“‘A Court of equity cannot, by 

avowing that there is a right but no remedy known to the law, 

create a remedy in violation of law . . . .’”) (quoting Rees v. 

Watertown, 86 U.S. (19 Wall.) 107, 122 (1873)). The range of 

equitable remedies not “in violation of law” is extremely 

narrow. Article III does not permit the use of equitable powers 

to compel local governments to satisfy judgment debts. Rees, 

86 U.S. (19 Wall.) at 122. In Rees, the Court held that it lacked 

the power to appoint a receiver to levy and collect taxes to pay 

a town’s municipal bond debt. Id. at 108–10, 116. That is 

because the “power to impose burdens and raise money is the 

highest attribute of sovereignty,” a “power of legislative 

authority only. It is a power that has not been extended to the 

judiciary.” Id. at 116–17. 

Similarly, in Meriwether v. Garrett, the Court 

recognized that a writ of mandamus could issue to compel 

municipal authorities to collect taxes, if they had such 

authority. 102 U.S. 472, 501–02 (1880). But “if those [taxing] 

authorities possess no such power, or their offices have been 

abolished and the power withdrawn, the remedy of the 

prohibit payment from the United States Treasury,” the Court 

should instead rely on its power to make an “otherwise valid 

declaration of parties’ rights in a contractual claim against the 

government.” Wetsel-Oviatt Lumber Co., Inc. v. United States, 

38 Fed. Cl. 563, 571 n.9 (1997). Courts must follow the rule 

that “[w]ithout congressional permission, . . . no money may 

be paid by the Treasury.” Am. Fed’n of Gov’t Emps., AFL-CIO, 

Local 1647 v. Fed. Labor Relations Auth., 388 F.3d 405, 409 

(3d Cir. 2004). 
41 

creditors is by an appeal to the legislature, which alone can give 

them relief.” Id. at 518. That is because “[n]o Federal court, 

either on its law or equity side, has any inherent jurisdiction to 

lay a tax for any purpose, or to enforce a tax already levied, 

except through the agencies provided by law.” Id. (further 

noting that the “Federal court . . . cannot seize the power which 

belongs to the legislative department of the State and wield it 

in their behalf”). For dissatisfied creditors, “the remedy is by 

appeal to the legislature.” Id. at 501–02. Thus, as modern 

courts have also found, “where there is no state or municipal 

taxation authority that the federal court may by mandamus 

command the officials to exercise, the court is itself without 

authority to order taxation.” Missouri v. Jenkins, 495 U.S. 33, 

73 (1990) (Kennedy, J., concurring in part) (citing cases). 

2. Correcting Constitutional Harms 

The narrow exception to this rule is that federal courts 

can order a state to remedy constitutional violations and, in so 

doing, require the state to incur costs. That is not the case here, 

as GERS’s rights are statutory and contractual. But even when 

imposing costly remedial schemes on states, federal courts of 

appeals and the Supreme Court recognize the constraints of 

Article III. 

Aware of this limit, GERS relies on Missouri v. Jenkins, 

495 U.S. 33 (1990), a case differing in both degree and kind. 

In Jenkins, the Supreme Court affirmed a district court’s 

desegregation order requiring the Kansas City government to 

pay (along with Missouri) to remedy constitutional violations. 

Id. at 53–54. In doing so, the Court agreed the district court 

could revise its order to enjoin a state prohibition on local tax 

increases and permit Kansas City to levy taxes adequate to 

fund the desegregation plan. Id. at 54–55. The Court stated that 
42 

Article III would not bar that remedy because “a local 

government with taxing authority may be ordered to levy taxes 

in excess of the limit set by state statute where there is reason 

based in the Constitution for not observing the statutory 

limitation.” Id. at 57. But the funds owed to GERS have no 

constitutional nexus. 

More importantly, Jenkins vacated the District Court’s 

order requiring the Kansas City government to raise taxes. Id.

at 50–51. The Court found that was an “intru[sion] on local 

authority” beyond the district court’s equitable powers. Id. at 

51. Under “principles of comity” governing equitable 

remedies, “the District Court was obliged to assure itself that 

no permissible alternative would have accomplished the 

required task” before taking the “drastic step” of imposing the 

tax. Id. at 50–51. Vacating a mandatory tax increase and, 

instead, permitting local authorities to determine whether that 

was necessary on their own, was “more than a matter of form.” 

Id. at 51. Rather, it empowered “local authorities [who] have 

the ‘primary responsibility’” for solving desegregation “to 

devise their own solutions to these problems.” Id. at 51–52 

(citing Brown v. Bd. of Educ., 349 U.S. 294, 299 (1955)). In 

this regard, Jenkins follows Supreme Court precedent 

prohibiting the Court from assuming the legislature’s power to 

tax. 

Our own decisions recognize the same limitations. In 

Evans v. Buchanan, we vacated a district court’s denial of 

Delaware’s request to enjoin a local school board from raising 

taxes to fund a desegregation plan. 582 F.2d 750, 779 (3d Cir. 

1978). We remanded for a new hearing because the district 

court had failed to “extend[] the requisite deference” to 

Delaware’s superseding state tax law “to which legislative 
43 

judgments in the field of taxation are entitled.” Id. at 778. Even 

in the face of Delaware’s egregious failure in desegregation 

efforts, this Court held that if Delaware’s funding proved 

inadequate “legislators will most certainly receive feedback 

from their electors” and these “inherent political safeguards . . 

. should be permitted to run their own course.” Id. at 790. 

That result is significant, showing that even when 

fundamental constitutional rights are at stake, we cannot 

simply order a government to spend money. Instead, we 

require compliance with constitutional obligations, and any 

spending is incidental or even optional. See Milliken v. 

Bradley, 433 U.S. 267, 295 (1977) (Powell, J., concurring) 

(“Ordinarily a federal court’s order that a State pay 

unappropriated funds . . . would raise the gravest constitutional 

issues. But here, . . . the State has been adjudged a participant 

in the constitutional violations, and the State therefore may be 

ordered to participate prospectively in a remedy [to provide 

$5.4 million in funding] otherwise appropriate.”) 

All of this creates a tight passage for an enforcement 

order implicating governmental spending to sail. And rightly 

so, lest we “improperly substitute[] [our] own . . . budgetary 

policy judgments for those of the state and local officials to 

whom such decisions are properly entrusted.” Horne v. Flores, 

557 U.S. 433, 455 (2009) (citing Jenkins II, 515 U.S. at 131 

(Thomas, J., concurring)). Usurping the powers given to the 

legislature not only distorts the principles of agency supporting 

the limited transfer of power from the people to their 

legislature, it unbalances the finely distinguished roles of the 

coordinate branches, transforming the least dangerous branch 

into one not recognized by the Constitution. 

III. CONCLUSION
44 

This case is neither the first nor the last pension 

controversy. Similar state pension fund cases show that these 

same separation-of-powers principles prevent state courts from 

doing what we, as a federal court, dare not. See Ill. Educ. Ass’n 

v. State, 28 Ill. Ct. Cl. 379, 384–89 (1973) (finding that the 

state had breached its contractual obligations to fund two 

pensions as required by implementing statutes but any decision 

to compel the legislature to make appropriations would violate 

the separation of powers); see also Valdes v. Cory, 189 Cal. 

Rptr. 212, 225 (Cal. Ct. App. 1983) (“[A] court of this state is 

powerless to compel the Legislature to appropriate such sums 

or to order payment of the indebtedness”). 

No less restraint applies to this Court40, and we must 

recognize that “[e]xpenditures toward the fulfilment of public 

40 In affirming in part the District Court’s order the 

majority notes that “the GVI did not challenge the underlying 

order––the 1984 consent judgment––as invalid for lack of an 

appropriation prior to appealing the District Court’s 

enforcement order.” Maj. Op. at n.35, citing United States v. 

Gov’t of V.I., 363 F.3d 276, 291–92 (3d Cir. 2004). In Gov’t of 

V.I., we held the GVI’s argument was estopped because it had 

not appealed the December 2001 enforcement order of a 1985 

consent decree. 363 F.3d at 292. But estoppel does not expand 

our jurisdiction into the separate powers of the legislature, 

because “[l]ike the Constitution’s other structural features, 

‘[n]either Congress nor the Executive can agree to waive’ the 

Appropriations Clause.” Keepseagle v. Perdue, 856 F.3d 1039, 

1060 (D.C. Cir. 2017) (Brown, J., dissenting) (quoting Freytag 

v. Comm’r Internal Revenue, 501 U.S. 868, 880 (1991)). The 

Constitution’s limitations on judicial power remain in full 
45 

policy are integral to policymaking itself, and policymaking is 

left to the legislature.” Keepseagle v. Perdue, 856 F.3d 1039, 

1059 (D.C. Cir. 2017) (Brown, J., dissenting) (citing Clinton v. 

City of New York, 524 U.S. 417, 451 (1998) (Kennedy, J., 

concurring)). The Constitution “assure[s] that public funds will 

be spent according to the letter of the difficult judgments 

reached by [legislators] as to the common good and not 

according to the individual favor of Government agents or the 

individual pleas of litigants.” Richmond, 496 U.S. at 428. 

Some will see a flaw in that design.41 Through 

amendment, we might strike a different balance, though “it is 

by no means certain, that evils of an opposite nature might not 

arise, if the debts, judicially ascertained to be due to an 

individual by a regular judgment, were to be paid, of course, 

out of the public treasury. It might give an opportunity for 

collusion and corruption in the management of suits between 

the claimant, and the officers of the government, entrusted with 

the performance of this duty.” Joseph Story, 3 Commentaries 

on the Constitution of the United States § 1343, in The 

force “even if ‘the parties’ before a court ‘cannot be expected 

to protect them.’” Id. (quoting Commodity Futures Trading 

Comm’n v. Schor, 478 U.S. 833, 851 (1986)). 

41 Tucker, for one, thought “the constitution and laws of 

the United States appear, then, to be defective upon this 

subject.” Blackstone’s Commentaries 1 App. 362–64. But that 

criticism did not alter his textual analysis, for “whatever doubt 

there may be upon the subject, under the laws of the state, it 

seems to be altogether without a question, that no claim against 

the United States (by whatever authority it may be established,) 

can be paid, but in consequence of a previous appropriation 

made by law.” Id. 
46 

Founders’ Constitution, Volume 3, Article 1, Section 9, Clause 

7, Document 4 (Univ. of Chicago Press).42 Perhaps Story’s 

prescience nearly nineteen decades ago gives insight into the 

decades of litigation in this matter. One wonders if the 

simplicity of a judicial pronouncement might be thought easier, 

more expedient, than summoning the will to face the options 

for solving the GERS funding problem. Maybe some imagine 

that pointing to the handiwork of the unelected judiciary will 

afford a convenient occasion for handwringing and handing off 

the accountability for the inevitably painful choices about 

limited tax dollars. 

Thankfully, we need not speculate. Because we know, 

with certainty, that a federal court of limited powers and 

limited authority under our Constitution cannot play that role. 

42 http://presspubs.uchicago.edu/founders/documents/a1_9_7s4.html.