Esso Virgin Islands, Inc. v. Gov't of the U.S. Virgin Islands By & Through the Virgin Islands Dep't of Licensing & Consumer Affairs & Andrew Rutnick

• Decision Date: 30 June 2008
• Docket Number: No. CIV.2004–175.,CIV.2004–175.
• Citation: 49 V.I. 1105
• Parties: ESSO VIRGIN ISLANDS, INC., Plaintiff, v. GOVERNMENT OF the UNITED STATES VIRGIN ISLANDS BY AND THROUGH the VIRGIN ISLANDS DEPARTMENT OF LICENSING AND CONSUMER AFFAIRS and Andrew Rutnick, in his Official Capacity as Commissioner of the Virgin Islands Department of Licensing and Consumer Affairs, Defendants.
• Court: U.S. District Court — Virgin Islands

49 V.I. 1105

ESSO VIRGIN ISLANDS, INC., Plaintiff,

v.GOVERNMENT OF the UNITED STATES VIRGIN ISLANDS BY AND THROUGH the VIRGIN ISLANDS DEPARTMENT OF LICENSING AND CONSUMER AFFAIRS and Andrew Rutnick, in his Official Capacity as Commissioner of the Virgin Islands Department of Licensing and Consumer Affairs, Defendants.

No. CIV.2004–175.

District Court of the Virgin Islands, Division of St. Thomas and St. John.

June 30, 2008.

Adriane J. Dudley, Esq., G. Alan Teague, Esq., St. Thomas, U.S.V.I., for plaintiff.

Carol Thomas–Jacobs, Esq., St. Thomas, U.S.V.I., for defendants.

MEMORANDUM OPINION

GÓMEZ, Chief Judge.

Before the Court is the motion of the defendants, Government of the United States Virgin Islands by and through the Virgin Islands Department of Licensing and Consumer Affairs and Andrew Rutnick, in his official capacity as Commissioner of the Virgin Islands Department of Licensing and Consumer Affairs (collectively referred to as the “Defendants”), to dismiss the complaint of the plaintiff, Esso Virgin Islands, Inc. (“Esso”).

I. FACTUAL AND PROCEDURAL BACKGROUND

In June, 2004, the Virgin Islands Department of Licensing and Consumer Affairs (the “DLCA”) completed a study of the Virgin Islands fuel market. Based on that study, on December 15, 2004, the DLCA issued an order (the “2004 Order”) that limited the gross profit margin of Virgin Islands gasoline and diesel fuel wholesalers to no more than thirty cents per gallon on the sale of their fuel products.

Thereafter, Esso, a gasoline and diesel fuel wholesaler in the Virgin Islands, commenced this six-count action. In Count I, Esso seeks a declaration from this Court that the 2004 Order is invalid on several grounds. In Count II, Esso alleges that Andrew Rutnick, in his official capacity as Commissioner of the Virgin Islands DLCA (“the Commissioner”), violated 42 U.S.C. § 1983 by taking Esso's private property. In Count III, Esso alleges that the Commissioner exceeded his statutory authority under Virgin Islands law by failing to promulgate rules and regulations as required by the Virgin Islands Code. Count IV asserts that the Commissioner violated 42 U.S .C. § 1983 by depriving Esso of due process. Count V asserts that the DLCA deprived Esso of its equal protection rights in violation of 42 U.S.C. § 1983. Finally, in Count VI, Esso seeks an injunction to prevent the Defendants from implementing the 2004 Order.

On March 17, 2005, the DLCA rescinded the 2004 Order.

The Defendants now seek to dismiss Esso's complaint, primarily on grounds of mootness.¹ Esso has filed an opposition.

II. DISCUSSION

A mootness analysis “traditionally begins with ‘the requirement of Article III of the Constitution under which the exercise of judicial power depends upon the existence of a case or controversy.’ “ Intn'l Bhd. of Boilermakers v. Kelly, 815 F.2d 912, 914 (3d Cir.1987) (quoting North Carolina v. Rice, 404 U.S. 244, 246 (1971)). The existence of a case or controversy requires “ ‘(1) a legal controversy that is real and not hypothetical, (2) a legal controversy that affects an individual in a concrete manner so as to provide the factual predicate for reasoned adjudication, and (3) a legal controversy with sufficiently adverse parties so as to sharpen the issues for judicial resolution.’ “ Id. at 915 (quoting Dow Chem. Co. v. EPA, 605 F.2d 673, 678 (3d Cir.1979)). “The central question of all mootness problems is whether changes in circumstances that prevailed at the beginning of the litigation have forestalled any occasion for meaningful relief.” In re Surrick, 338 F.3d 224, 230 (3d Cir.2003).

“Moreover, it does not matter when the case becomes moot.” The requirement that a case or controversy be ‘actual [and] ongoing’ extends throughout all stages of federal judicial proceedings, including appellate review.” Rendell v. Rumsfeld, 484 F.3d 236, 240–41 (3d Cir.2007) (quoting Khodara Envtl., Inc. v. Beckman, 237 F.3d 186, 193 (3d Cir.2001)). “Hence, if a case becomes moot after the [trial court] enters judgment, an appellate court no longer has jurisdiction to review the matter on appeal.” Id. at 241 (citing Mills v. Green, 159 U.S. 651, 653 (1895)).

The defendant bears a “heavy burden” to establish mootness. Thompson v. United States Dep't of Labor, 813 F.2d 48, 51 (3d Cir.1987) (quoting Iron Arrow Honor Society v. Heckler, 464 U.S. 67, 72 (1983)).

III. ANALYSIS

Each of the Defendants' several arguments in support of their motion to dismiss will be addressed in turn.

A. Mootness

The Defendants first assert that Esso's complaint must be dismissed on grounds of mootness because the 2004 Order has been rescinded. In opposition, Esso maintains that its claims are either not moot or capable of repetition.

On March 17, 2005, the DLCA rescinded the 2004 Order. As a consequence, Esso's challenge of that order, as a practical matter, is moot. See, e.g., Utah Shared Access Alliance v. Carpenter, 463 F.3d 1125, 1134–35 (10th Cir.2006) (finding a lawsuit relating to Bureau of Land Management orders moot where those orders had been superseded by subsequent orders), cert. denied,127 S.Ct. 2100 (2007); Greenpeace Action v. Franklin, 14 F.3d 1324, 1329 (9th Cir.1992) (noting that the court could not technically grant the appellant “effective relief on its claim that” a rescinded administrative order had been unlawfully approved); Halvonik v. Reagan, 457 F.2d 311, 313–14 (9th Cir.1972) (finding a lawsuit challenging loitering and assembly regulations moot after the regulations were rescinded). However, even if rescission of the 2004 Order weighs in favor of the Defendants' mootness argument, Esso's claims may still be heard in this Court.

Under the “capable of repetition” exception, “a court may exercise its jurisdiction and consider the merits of a case that would otherwise be deemed moot when ‘(1) the challenged action is, in its duration, too short to be fully litigated prior to cessation or expiration, and (2) there is a reasonable expectation that the same complaining party will be subject to the same action again.’ “ Rendell, 484 F.3d at 241 (quoting Spencer v. Kemna, 523 U.S. 1, 17 (1998)). “The exception from the mootness doctrine for cases that are technically moot but ‘capable of repetition, yet evading review’ is narrow and available ‘only in exceptional situations.’ “ Id. (citing City of Los Angeles v. Lyons, 461 U.S. 95, 109 (1983); Weinstein v. Bradford, 423 U.S. 147, 148–49 (1975)).

With respect to the first prong of the capable of repetition exception, the Court must determine whether the life span of the 2004 Order was too short to be fully litigated before it was rescinded.

In Greenpeace Action v. Franklin, the plaintiffs brought suit to challenge the Pacific Fishery Management Council's (the “PFMC”) total allowable catch (“TAC”) regulation for the 1991 fishing season. The PFMC argued that the plaintiffs' claims were moot because the 1991 fishing season had ended, the 1991 TAC had expired, and a new TAC was in effect. Id. at 1329. The Court of Appeals for the Ninth Circuit disagreed, reasoning that the PFMC's actions came within the capable of repetition exception. The court found, inter alia, that the challenged regulation was in effect for less than one year, making it difficult to obtain effective judicial review. Id. at 3129–30.

Similarly, the 2004 Order was in effect for only three months. That period of time is simply insufficient for Esso to obtain effective judicial review, including appellate review. See, e.g., Alaska Fish & Wildlife Fed'n v. Dunkle, 829 F.2d 933, 939 (9th Cir .1987), cert. denied,485 U.S. 988 (1988) (holding that a lawsuit was not moot where the “regulation challenged was in effect for less than one year, making it difficult to obtain effective judicial review”); Maryland People's Counsel v. Federal Energy Regulatory Com., 761 F.2d 768, 773 (D.C.Cir.1985) (finding that the first prong of the exception was met where the regulatory orders the plaintiff challenged “remained in force for slightly less than one year, not enough time to allow their validity to be fully litigated”); Or. Natural Desert Ass'n v. Lohn, 485 F.Supp.2d 1190, 1197 (D.Or.2007) (finding the exception applicable where the defendant regulatory agency's 2006 opinions “were in effect for less than one year, making it nearly impossible to obtain effective judicial review”). Accordingly, the first prong of the capable of repetition exception is satisfied.

The Court must next inquire whether the challenged action is susceptible of being repeated. The Supreme Court has defined this prong as requiring “a ‘ reasonable expectation ’ or a demonstrated probability that the same controversy will occur involving the same complaining party.'' Murphy v. Hunt, 455 U.S. 478, 482 (1982) (per curiam) (citation omitted) (emphasis supplied). The Court has further explained that it has “never held that a mere physical or theoretical possibility was sufficient to satisfy the [capable of repetition] test.... If this were true, virtually any matter of short duration would be reviewable.” Id.

Courts have recognized that “the mere amendment or repeal of a challenged ordinance does not automatically moot a challenge to that ordinance.” Am. Legion Post 7 of Durham v. City of Durham, 239 F.3d 601, 605 (4th Cir.2001) (citing City of Mesquite v. Aladdin's Castle, Inc., 455 U.S. 283, 289 (1982)); see also Lillbask ex rel. Mauclaire v. Conn. Dep't of Educ., 397 F.3d 77, 92 (2d Cir.2005) (stating that the “ ‘repeal of a challenged provision [of law] that obviates the plaintiff's claims' will be held to ‘moot a litigation, absent evidence that the defendant intends to reinstate the challenged statute after the litigation is dismissed, or that the [defendant] does not believe that the [repeal] renders the case moot’ ”) (quoting Lamar Adver. of Penn., LLC v. Town of Orchard Park, 356 F.3d 365, 377 (2d Cir.2004)). Rather, the inquiry must focus on whether the entity that issued the rule or...