Wyatt v. Gov't of Virgin Islands, 02-2695.

Citation385 F.3d 801
Decision Date12 October 2004
Docket NumberNo. 02-3762.,No. 02-2695.,02-2695.,02-3762.
PartiesWYATT, VIRGIN ISLANDS, INC., Hovensa, LLC, Intervenor-Plaintiff in District Court v. GOVERNMENT OF THE VIRGIN ISLANDS BY AND THROUGH THE VIRGIN ISLANDS DEPARTMENT OF LABOR; Cecil Benjamin, in His Official Capacity as Commissioner of the Virgin Islands Department of Labor Virginie George; Malcolm Maccow; Edgar Barrios; Claude Gaine Intervenors-Defendants in District Court Government of the Virgin Islands, Appellant Virginie George, Malcolm Maccow, Edgar Barrios and Claude Gaines, Appellants.
CourtUnited States Courts of Appeals. United States Court of Appeals (3rd Circuit)

Iver A. Stridiron, Attorney General, Elliott M. Davis, Solicitor General, Douglas J. Juergens (Argued), Maureen Phelan, Richard S. Davis, Assistant Attorney General Department of Justice, St. Thomas, VI, K. Glenda Cameron (Argued), Lee J. Rohn, Law Office Lee J. Rohn, Christiansted, St. Croix, USVI, for Appellants.

Charles E. Engeman (Argued), Ogletree, Deakins, Nash, Smoak & Stewart, Charlotte Amalie, St. Thomas, VI, W. Carl Jordan, Tara Porterfield (Argued), Vinson & Elkins L.L.P., Houston, TX, George H.T. Dudley, Micol L. Morgan, Dudley, Topper and Feuerzeig, LLP, Charlotte Amalie, St. Thomas, USVI, for Appellees.

Before ROTH, McKEE and COWEN, Circuit Judges.

ROTH, Circuit Judge.

Plaintiffs, Wyatt V.I., Inc., and HOVENSA, L.L.C., brought an action for declaratory and injunctive relief in the District Court of the Virgin Islands. The dispute arose from the requirement Wyatt imposed on prospective employees that they sign a Dispute Resolution Agreement (DRA) as a condition of employment. Plaintiffs sought (1) a declaration that the DRA is enforceable and (2) an injunction to prohibit the Commissioner of the Department of Labor from interfering with their use of the DRA. The District Court granted declaratory relief in plaintiffs' favor. Although the defendants raise many grounds on appeal, the only issue we need address is whether the plaintiffs' action for declaratory and injunctive relief is ripe for judicial review. For the reasons we state below, we conclude that, under Public Service Commission v. Wycoff Co., Inc., 344 U.S. 237, 73 S.Ct. 236, 97 L.Ed. 291 (1952), there is no "case of actual controversy" here as is required by 28 U.S.C. § 2201(a). Thus, plaintiffs' cause of action is not ripe for review.

I. BACKGROUND

In 2001, HOVENSA awarded Wyatt a contract to provide maintenance and other services at HOVENSA's oil refinery in St. Croix, Virgin Islands. In November 2001, Wyatt began accepting employment applications in the Virgin Islands. As a condition of employment, Wyatt required all applicants to sign the DRA. Under the DRA, each applicant agreed to submit to binding arbitration all claims arising from the applicant's candidacy for employment or the terms and conditions of any offer of employment.1 Wyatt's parent corporation Wyatt Field Services Co., does not require applicants for employment on the mainland United States to sign a DRA.

Prospective employees complained to the Virgin Islands Department of Labor about the DRA. As a result of these complaints, the Commissioner of the Department of Labor sent two letters to Wyatt requesting that Wyatt "cease and desist" its use of the DRA. In the first letter, dated December 20, 2001, the Commissioner wrote to Todd Reidlinger, a manager at Wyatt in the Virgin Islands, "[t]he agreement is improper and illegal; it does not serve as a portrayal of reasonable and fair labor/management relations." The Commissioner also asserted the Department of Labor's belief that the DRA violated the Virgin Islands Wrongful Discharge Act (WDA), 24 V.I.C. § 76. Then in a February 1, 2002, letter, sent to Carmelo Rivera, a human resources consultant for Wyatt, the Commissioner stated:

We will do whatever is necessary to ensure that the Virgin Islands' workforce receive every `employment protection' guaranteed to them under our labor laws. You are hereby advised that a willful violation of 24 V.I.C. § 76 will be reported to Office of the Attorney General for prosecution. Please cease and desist from this practice. Your cooperation is expected.

Wyatt nevertheless continued to use the DRA as a condition of employment.2 The Department of Labor then requested an opinion from the Office of the Attorney General of the Virgin Islands regarding Wyatt's use of the DRA. On March 1, 2002, the Attorney General issued an opinion letter, stating:

We find that this case is ripe for injunctive and/or declaratory relief, and we shall proceed to seek such relief on behalf of the Department of Labor and the prospective employees of Wyatt. We expect to gather affidavits to support such an action from prospective employees who were told they had to sign these agreements if they wanted to be considered for employment with Wyatt, and felt coerced into signing the agreements.

* * * * * *

The pre-employment dispute resolution agreement required by Wyatt, Inc. for prospective employees is in violation of 24 V.I.C. 76, and is unconscionable, coercive, an adhesion contract, and is contrary to an important public policy in the Virgin Islands which recognizes the employment reality of an island economy.

After the Attorney General issued the opinion, the Commissioner notified Wyatt of his intent to bring charges if Wyatt continued to use the DRA.

The Government, however, never filed suit against Wyatt. Instead, on March 20, 2002, Wyatt instituted an action for declaratory and injunctive relief against the Government. In Count I, Wyatt sought a declaration under the Federal Declaratory Judgment Act, 28 U.S.C. § 2201(a), and the Virgin Islands Declaratory Judgment Act, 5 V.I.C. § 1261, that 1) by agreeing to arbitrate, an applicant or employee does not forego substantive rights, but instead agrees to resolution of all disputes in an arbitral forum; 2) the Federal Arbitration Act (FAA), 9 U.S.C. §§ 1-16, governs the enforceability of arbitration agreements covering employment disputes; 3) the DRA is protected by and enforceable under the FAA; 4) the DRA does not violate the WDA; 5) the DRA is not unconscionable; 6) the DRA is not contrary to the public policy of the Virgin Islands; 7) even if the DRA violates the WDA, the WDA is preempted by the FAA; and 8) the Commissioner's "cease and desist" letters are unenforceable to the extent they purport to require Wyatt to abandon its use of the DRA. In Count II, Wyatt claimed a violation of the federal civil rights statute, 42 U.S.C. § 1983, and alleged that the Commissioner was attempting to deprive Wyatt of its liberty interest in entering into lawful contracts. In Count III, Wyatt sought injunctive relief against the Commissioner. Wyatt named, as defendants, the Government of the Virgin Islands by and through the Virgin Islands Department of Labor and Cecil Benjamin, in his Official Capacity as Commissioner of the Virgin Islands Department of Labor.

HOVENSA moved to intervene as a third party beneficiary to Wyatt's DRA because the DRA granted HOVENSA the same right to demand arbitration as it granted Wyatt. The motion was granted. HOVENSA's complaint in intervention alleged the same counts as Wyatt's, excluding the request for injunctive relief.

After the suit had commenced Virginie George, Malcolm Maccow, Edgar Berrios, and Claude Gaines, prospective employees whom Wyatt would not consider for employment because of their refusal to sign the DRA, moved to intervene as defendants. That motion was also granted.3

The District Court became concerned about its jurisdiction to hear the case and ordered the parties to address that issue. In its Memorandum Opinion dated June 5, 2002, the District Court concluded that it did not have subject matter jurisdiction based on the alleged violation of 42 U.S.C. § 1983. The District Court held, however, that it did have federal question jurisdiction pursuant to 18 U.S.C. § 1331, based on Wyatt's claim that the FAA provides a substantive right to enter into an arbitration agreement and that any local law in conflict with the FAA is preempted by virtue of the Supremacy Clause of the United States Constitution. Wyatt, V.I., Inc. v. Government of the Virgin Islands, 2002 WL 31599790, * 2 (D.Vi. June 5, 2002).

The District Court ruled that declaratory relief was an appropriate remedy in the case because Wyatt was facing "a threat of liability if it continues to use the Dispute Resolution Agreement without a determination of its legality." In granting declaratory relief in Wyatt's favor, the court first noted that there was no preemption issue because there is no Virgin Islands law or policy directly in conflict with enforcement of the DRA under the FAA. The District Court next concluded that the DRA is enforceable under the FAA because it is not unconscionable, coercive, or contrary to public policy. Finally, the District Court denied Wyatt's request for injunctive relief. The court reasoned that any further Government action would be unlikely as a result of the declaratory judgment entered in Wyatt's favor.

The Government and the prospective employees filed their appeals on June 7, 2002, and September 27, 2002, respectively.4 Wyatt does not appeal the District Court's denial of injunctive relief.

During the pendency of this appeal, we have held in Lloyd v. Hovensa, L.L.C., 369 F.3d 263 (3d Cir.2004), that Wyatt's DRA was not unenforceable as violative of public policy, 369 F.3d at 274, and we affirmed an order compelling arbitration pursuant to the DRA. 369 F.3d at 275.

II. JURISDICTION AND STANDARD OF REVIEW

The District Court purported to exercise jurisdiction pursuant to the general federal question statute, 28 U.S.C. § 1331.

We have jurisdiction over this appeal pursuant to 28 U.S.C. § 1291, which gives the courts of appeals jurisdiction over appeals from all final decisions of the...

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