Molloy v. Monsanto
| Decision Date | 09 June 1994 |
| Docket Number | Civil No. 1994-30 |
| Citation | 30 V.I. 164 |
| Parties | CLAUDE A. MOLLOY, SR., MARIEL WILLIAM FREDERICKS, ELVIN H. DONOVAN, and ORLANDO BARTHLETT, Plaintiffs, v. ALDA MONSANTO, JUREEN TODMAN, GLEN BYRON, JUNE ADAMS, DALE BASTIAN, RUDOLPH KRIGGER, GOVERNMENT OF THE VIRGIN ISLANDS, and THE GOVERNMENT EMPLOYEES RETIREMENT SYSTEM OF THE GOVERNMENT OF THE VIRGIN ISLANDS, Defendants |
| Court | U.S. District Court — Virgin Islands |
Motions and cross-motions in an action by retired employees alleging mismanagement of Government Employees Retirement System. The District Court, Moore, J., denied plaintiff's motion for a temporary restraining order, a preliminary injunction, and class certification, and granted defendant's motions to dismiss with the exception of one claim.
[Headnotes classified to Virgin Islands Digest]
SAMUEL H. HALL, (SAMUEL H. HALL), for Plaintiffs
FREDERICK G. WATTS, (WATTS, STREIBICH & BENHAM), for fureen Tod-man
HENRY L. FEUERZEIG, (DUDLEY, TOPPER & FEUERZEIG), for Alda Monsanto, Glen Byron and June Adams
Like many public and private employers, the Government of the Virgin Islands has established a retirement plan for its employees. The original legislation declared that:
The purpose of such system is to encourage qualified personnel to enter and remain in the service of the Government of the Virgin Islands by establishing an orderly means whereby those who become superannuated or otherwise incapacitated as the result of age or disability, may be retired from service without prejudice and without inflicting a hardship upon the em-ployees retired, and to enable such employees to accumulate reserves for themselves, their dependents and their beneficiaries, to provide for old age, death, disability and termination of employment, thus promoting economy and efficiency in the administration of government.
V.I. Code Ann. tit. 3, § 701(b) (1967). In accordance with local legislation, the plan is administered by the Government Employees Retirement System of the Government of the Virgin Islands ("GERS," "the Retirement System," or "the System") and a seven-member Board of Trustees ("Board"). See id. § 715(a).
Over time, the realities of administering the GERS evidently have failed to keep pace with the lofty objectives of the System. Approximately one year ago, in June 1993, the GERS hired Claude A. Molloy, Sr. ("Molloy") to serve as the Administrator of the System. In due course, the Legislature of the Virgin Islands confirmed Molloy. However, the Board apparently grew dissatisfied with Molloy's performance and, on November 15, 1993, the Board voted to terminate him.
On March 16, 1994,1 Molloy instituted the instant action in his capacity as a member of the Retirement System.2 Joined by three other retirees,3 Molloy contends that the Government of the Virgin Islands has failed to make, and the GERS and its board members have refused to demand, timely payment of employer and employee contributions, thereby depriving past, present, and future government employees of benefits to which they are entitled under law. Count One alleges that each of the named defendants4 hasdeprived plaintiffs of property without due process of law in violation of the Fourteenth Amendment. Count Two alleges that the Government of the Virgin Islands has taken plaintiffs' property without payment of just compensation in violation of the Fifth Amendment to the Constitution. Count Three alleges that the individual defendants have deprived plaintiffs of property without due process of law in violation of 42 U.S.C. § 1983. Counts Four and Five seek recovery from the GERS and its named board members for breach of fiduciary duty and mismanagement and waste.
Not surprisingly, this litigation has generated a plethora of motions in the relatively short period since its inception.5 Plaintiffs have asked this Court to issue either a temporary restraining order or a preliminary injunction. They have also made a request for class certification. Finally, plaintiffs have filed a motion to enforce a consent judgment entered by this Court in 1984.6 The Government of the Virgin Islands and the GERS have each filed motions to dismiss this litigation on the ground that this Court lacks subject matter jurisdiction because plaintiffs have failed to state a claim upon which relief may be granted. The individual defendants have filed motions to dismiss in which they also contend that plaintiffs have failed to state a claim under federal law and that this Court accordingly lacks subject matter jurisdiction.
As an initial matter, plaintiffs request that this Court issue a temporary restraining order or a preliminary injunction requiring defendants to cease their alleged wrongdoing. Plaintiffs charge that the GERS has failed to demand that the government transfer employer and employee contributions to the GERS in a timely manner even though the GERS has been aware of the government's failure to do so since at least 1981 when it initiated a lawsuit against the government. Plaintiffs further note that the government's failure to remit GERS monies promptly violates the terms of the December 1984 consent judgment.
[1] Having determined that the requirements for a temporary restraining order were not satisfied,7 the Court denied plaintiffs' motion for such extraordinary relief8 from the bench on March 25, 1994. We likewise decline to issue a preliminary injunction because we do not find that plaintiffs have successfully demonstrated that the requirements for such relief are met in this case. See West Indian Co. v. Government of the Virgin Islands, 643 F. Supp. 869, 873 (D.V.I. 1986), aff'd, 812 F.2d 134 (3d Cir. 1987). In particular, although this Court does not seek to minimize the gravity of plaintiffs' allegations of financial mismanagement, precedent clearly teaches that a preliminary injunction should not be issued in the absence of irreparable harm. Plaintiffs themselves acknowledge that much of the wrongdoing about which they complain began more than a decade ago and this fact alone strongly militates against a finding of irreparable immediate injury. See, e.g., Citibank, N.A. v. Citytrust, 756 E2d 273, 275-77 (2d Cir. 1985).9 Accordingly, we will now turn to the remaining motions.
Plaintiffs have requested that this Court certify a class consisting of all living past, present, and future employees of the Government of the Virgin Islands who have paid, are paying, or will pay retirement contributions to the GERS and who are or will become members of the System. Plaintiffs must accordingly demonstrate that they fulfill the mandatory requirements of Fed. R. Civ. P. 23(a), see Perez v. Government of the Virgin Islands, 22 V.I. 206, 210 (D.V.I. 1986),10 and that the criteria set forth in Fed. R. Civ. P. 23(b) are met.11
Plaintiffs assert that the requirements described in the Federal Rules are easily met in this case. The class consists of more than 12,000 individuals. In addition, factual issues concerning whether defendants have failed to manage adequately the monies belonging to the GERS and legal issues concerning whether these acts constitute a violation of the plaintiffs' constitutional and common law rights are common to the entire class. Finally, the claims of the named plaintiffs are typical of the claims that could be raised by each member of the proposed class, and the named representatives, particularly Molloy, have first-hand knowledge of the irregularities in the administration of the System and the wrongdoing of the defendants.
Defendants do not challenge plaintiffs' assertions that they satisfy the numerosity, commonality, and typicality requirements of Rule 23(a). However, they argue that Molloy cannot adequately represent that proposed class because his prior role as Administrator of the GERS may render him potentially liable to other members of the proposed class for breach of fiduciary duty claims, his termination from that position by the GERS Board renders him ill-suited to serve as a class representative, and his filing of other legal proceedings against these same defendants demonstrates that his interests diverge from those of the members of the class that he seeks to represent.
[2] Although defendants have raised weighty concerns regarding the adequacy of representation issue, we do not believe that it is necessary to resolve them or to determine whether the other named plaintiffs could fulfill this requirement.12 Because plaintiffs primarily seek injunctive relief, a judgment in their favor concerning the administration of the GERS would necessarily enure to the benefit of all members of the proposed class. Other courts have recognized that, under such circumstances, a district court may exercise its discretion to deny class certification. See, e.g., Ray v. United States Department of Justice, 908 F.2d 1549, 1558 (11th Cir. 1990) (), rev'd on other grounds, 112 S. Ct. 541 (1991); United Farmworkers of Florida Housing Project, Inc. v. City of Delray Beach, 493 F.2d 799, 812 (5th Cir. 1974) ().13 We do not believethat the GERS...
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Jackson v. W. Indian Co.
...may not be taken away absent due process. Board of Regents v. Roth, 408 U.S. 564, 92 S.Ct. 2701, 33 L.Ed.2d 548 (1972); Molloy v. Monsanto, 30 V.I. 164, 173 (D.V.I.1994). Whether a benefit constitutes a property interest is a question of state or local law. 408 U.S. at 577, 92 S.Ct. at 2709......