Opinion ID: 506204
Heading Depth: 1
Heading Rank: 2

Heading: facts and statement of the case

Text: 3 The Territorial Court was notified by the Inspector General and Regional Audit Manager of the United States Department of the Interior (together the Department of the Interior) that the Territorial Court was scheduled for a direct audit by the Department of the Interior. In response, officials of the Territorial Court met with several auditors of the Department of the Interior. The court officials expressed concerns about the audit and criticized some of the alleged activities of the Department of the Interior in prior indirect audits. The parties were unable to resolve their differences. 4 Subsequently, the Territorial Court brought an action in the district court against the Department of the Interior seeking a declaratory judgment that the Revised Organic Act of 1954, as amended (Organic Act), vests the authority to audit the Territorial Court in the Administrative Office of the United States Courts (AO) and not in the Inspector General of the Department of the Interior. The Territorial Court also sought injunctive relief relating to the proposed audit. 5 The same day that the complaint was filed, the Department of the Interior served a subpoena duces tecum for specified financial documents on the Clerk of the Territorial Court. The Territorial Court filed a motion to quash, stay enforcement of and/or limit the scope of the subpoena and a motion to consolidate and for a protective order. While the motions were pending, the parties entered into a stipulation, which stated in part: 6 plaintiff will not be required to turn over any documents sought by the subpoena issued by the Inspector General of the Department of Interior until the District Court of the Virgin Islands has rendered its final decision in the above-entitled case. However, it is understood that in order to properly join the issues in the above-entitled case, defendants may file appropriate pleadings seeking enforcement of said subpoena. 7 Finally, it is stipulated that all proceedings relating to Plaintiff's Motion to Quash and Defendants' motion to enforce the subpoena if applicable be joined with Plaintiff's declaratory judgment action, previously filed and that all pleadings be filed in accordance with the time requirements in the declaratory judgment action. 8 After filing an answer, which included a counterclaim seeking enforcement of the subpoena, the Department of the Interior filed a motion for summary enforcement of the subpoena. 9 Following a hearing, the district court found that there was no constitutional impediment to enforcement of the subpoena and that nothing in the Organic Act or the Insular Areas Act of 1982 (1982 Act) precluded the proposed audit. Indeed, the district court found ample statutory authority for the proposed audit. Furthermore, after stating that it was not alleged that the subpoena was overbroad, burdensome or that it sought irrelevant material, the district court concluded that summary enforcement of the subpoena was appropriate. Accordingly, the district court granted the Department of the Interior's motion for summary enforcement. Additionally, it dismissed the Territorial Court's complaint with prejudice for lack of jurisdiction. 673 F.Supp. 152. 10 On appeal the Territorial Court asks that we: 1) reverse the district court's grant of summary enforcement; 2) reverse the district court's order dismissing with prejudice the Territorial Court's complaint for declaratory judgment and injunctive relief; 3) direct the district court to permanently enjoin the Department of the Interior from exercising any audit authority over the Territorial Court; 4) vacate the district court's denial of the Territorial Court's motion for sanctions; and 5) indemnify the Territorial Court for its costs, including attorney's fees.