Pichardo v. V.I. Comm'r Of Labor

• Decision Date: 08 July 2010
• Docket Number: No. 08-4259.,08-4259.
• Citation: 613 F.3d 87
• Parties: Elizabeth PICHARDO, Petitioner v. VIRGIN ISLANDS COMMISSIONER OF LABOR; Cool It, Inc. d/b/a Agave Terrace Restaurant, Respondents.
• Court: U.S. Court of Appeals — Third Circuit

613 F.3d 87

Elizabeth PICHARDO, Petitioner

v.VIRGIN ISLANDS COMMISSIONER OF LABOR; Cool It, Inc. d/b/a Agave Terrace Restaurant, Respondents.

No. 08-4259.

United States Court of Appeals,Third Circuit.

Argued Dec. 2, 2009.

Opinion Filed July 8, 2010.

COPYRIGHT MATERIAL OMITTED.

Joel H. Holt, Esq. (Argued), Christiansted, St. Croix, United States Virgin Islands, for Petitioner Elizabeth Pichardo.

Vincent F. Frazer, Esq., Elliott M. Davis, Esq., Richard S. Davis, Esq. (Argued), Department of Justice, St. Thomas, United States Virgin Islands, for Respondent Government of the Virgin Islands.

BEFORE: Chief Judge FUENTES, and NYGAARD, Circuit Judges.

OPINION OF THE COURT

FUENTES, Circuit Judge:

Elizabeth Pichardo was terminated from her employment at Agave Terrace Restaurant in St. Thomas after violating a series of workplace rules and committing an act of insubordination. She filed a complaint with the Virgin Islands Department of Labor (“DOL”) under the territory's Wrongful Discharge Act. The DOL found that Pichardo was fired for cause and denied her claim. The Superior Court of the Virgin Islands upheld the DOL's decision and rejected Pichardo's due process claims. Pichardo appealed the denial of her due process claims to the newly-created Supreme Court of the Virgin Islands, which affirmed. In this, the first case in which we have granted certiorari to review a decision of the Virgin Islands Supreme Court, we set forth our standard of review and hold that we shall defer to decisions of the Supreme Court of the Virgin Islands on matters of local law unless we find them to be manifestly erroneous. Applying this standard to Pichardo's case, we will affirm the decision of the Virgin Islands Supreme Court.

I.

Pichardo began work as a server and cashier at Agave Terrace Restaurant on August 12, 1998. Between November 1998 and March 1999, she received four disciplinary write-ups. Pichardo was subsequently fired in April 1999. The reasons for these write-ups included: smoking around the restaurant's laundry area and leaving cigarette butts on the ground, failing to properly clean her station at the end of work, failing to report for a scheduled shift, and refusing to set tables. Following the third write-up, Pichardo was suspended for two shifts. Pichardo then received another disciplinary notice and was suspended for allegedly threatening to sue her employer. The write-up stated that she was spreading ill will and “causing more problems with service throughout the restaurant.” (J.A. at 125.)

During the subsequent period between this suspension and her termination, Pichardo did not return to work. She did, however, write four separate memos to Agave, each dated April 7, 1999, responding to the disciplinary write-ups. Each of these memos proffered explanations for the behavior cited in the write-ups. Agave, in its written closing statement at the DOL hearing regarding Pichardo's termination, claimed that it did not receive any of these responses until the date of the hearing. The responses were also not in Pichardo's personnel file. Agave contended that they were “conjured up” long after the incidents. (J.A. at 144.)

Pichardo was discharged on April 10, 1999 and filed a complaint with the DOL, pursuant to the Virgin Islands Wrongful Discharge Act, V.I.Code Ann. tit. 24, §§ 76-79, on April 12, 1999. The complaint asserts that the reasons Agave gave to Pichardo for her termination “were ‘hearsay’ that I had stated I was going to sue the restaurant, which I totally disagree with this reasons [sic].” ( Id. at 101.) At the time of her complaint, a preliminary injunction order in a separate matter prohibited the DOL from holding hearings. It was lifted on June 30, 2000, but the Administrative Law Judge (the “ALJ”) did not hold a hearing until January 14, 2002.

Both parties submitted exhibits and, though they both had the opportunity to call witnesses, Pichardo presented only her own testimony at the hearing. No transcript exists, but according to the ALJ's decision, Agave called five witnesses: four Agave employees and the restaurant's owner. All these witnesses, according to the ALJ, testified about Pichardo's poor work performance, negative attitude, threats to co-workers, and the writing of improper order tickets. They also recounted numerous warnings given to her about her behavior. Pichardo testified and, according to the ALJ, claimed that Agave's witnesses were lying. A ruling was issued nearly two years after the one-day hearing, on December 16, 2003. Pichardo had written the Commissioner of Labor on October 6, 2003 complaining about this delay.

The ALJ found that Agave had met its burden and had demonstrated by a preponderance of the evidence that Pichardo was fired for cause under V.I.Code Ann. tit. 24, § 76(a). The ALJ found that the evidence satisfied § 76(a)(4), allowing discharge of an employee “who willfully and intentionally disobeys reasonable and lawful rules, orders, and instructions of the employer,” as well as § 76(a)(9), which applies to an employee “whose conduct is such that it leads to the refusal, reluctance or inability of other employees to work with him.” V.I.Code Ann. tit. 24, § 76(a)(4) & (9). The Commissioner upheld the ALJ's decision.

Pichardo filed pro se for review before the Superior Court of the Virgin Islands on February 24, 2004. ¹ Pichardo v. Benjamin, Civ. No. 85-2004 (V.I.Super.Ct. Mar. 30, 2007). She invoked the Superior Court's jurisdiction pursuant to V.I.Code Ann. tit. 5, § 1421, which provides for judicial review of administrative decisions. The Superior Court ordered the DOL to produce a transcript of its hearing. The DOL instead filed a Response to Order to Provide Record of Proceedings, which stated that “the tape made of the proceeding in this matter is not transcribable and therefore cannot be provided for the Court.” (J.A. at 51.) ²

Pichardo, represented by counsel, filed a motion on September 28, 2004 to remand her case to the DOL for a new evidentiary hearing. Agave opposed the motion, arguing both that it would be prejudiced given the passage of time and that the documentary evidence in the record was sufficient for the court to review the DOL's decision. The Superior Court did not expressly rule on the motion to remand, but it stated in a briefing order that it was “in receipt of the record of proceeding from the Department of Labor.” ( Id. at 61.) Pichardo filed a counseled brief with the Superior Court and presented three issues for review: (1) whether her due process rights were violated by the DOL's delay in rendering a decision; (2) whether her due process rights were violated by the DOL's failure to maintain the “tapes of the transcript of the proceedings” and its production of only the administrative file as the record of the proceedings; and (3) whether Agave failed to meet its burden under the Virgin Islands Wrongful Discharge Act, V.I.Code Ann. tit. 24, § 76, et seq.

The Superior Court affirmed the DOL's decision. First, it acknowledged that “[the] case has been plagued by unexplained delays,” but it determined that “a writ of review is not the proper method to address such complaints.” (J.A. at 37.) Such delays, the court found, have little to do with whether Agave had cause to terminate Pichardo. Second, the court declared that it would resolve the transcript issue by assuming all objections had been timely raised, “affording Petitioner protection of claims that she may have lost due to the absence of said transcript.” ( Id.) Third, the court upheld the ALJ's determination that Agave did not violate the Wrongful Discharge Act, because it had grounds to terminate Pichardo for disobeying her employer's instructions. While the court noted that Agave presented witnesses who testified to this effect, it did not explain how it reviewed this testimony in the absence of a transcript. Its analysis focused on Pichardo's contention that the witnesses, who worked for Agave, were interested witnesses. The court concluded that it was not error for the ALJ to rely on the testimony of an interested witness and that the ALJ's credibility determination must be accepted unless “contrary to sound reason.” ( Id. at 39.) The court further noted that Pichardo had conceded that Agave “offered evidence of small infractions.” ( Id.) The accumulation of these infractions, the court found, “was the basis for the termination.” ( Id. at 39-40.) Therefore, it concluded, the ALJ's decision was “supported by reasonable evidence.” ( Id. at 40.)

Pichardo appealed to the Virgin Islands Supreme Court. Pichardo v. Benjamin, Civ. No.2007-061, 2008 WL 6054386 (V.I.Sup.Ct. Apr. 16, 2008). She challenged the Superior Court's refusal to consider her due process claims, but did not challenge the ruling on the merits. The Supreme Court held that it could not address Pichardo's argument that she was denied due process due to the delays before the DOL. Relying on V.I.Code Ann. tit. 24, § 70, which provides for judicial review of DOL decisions, the Supreme Court held that both it and the Superior Court were limited to considering issues raised before the Department of Labor. Section 70 provides that:

(a) Any person aggrieved by a final order of the Commissioner granting or denying in whole or in part the relief sought may obtain a review of such order by filing in the Superior Court or the District Court, within 30 days of its issuance, a written petition praying that such decision of the Commissioner be modified or set aside.

(b) No objection that has not been urged before the Commissioner shall be considered by the Court unless the failure or neglect to urge such objection is excused because of extraordinary circumstances. The findings of the Commissioner as to the facts, if supported by substantial evidence, shall be conclusive.

Focusing on § 70(b), the Supreme Court found that the issue of delay had not been raised as an objection before the DOL, nor was there evidence Pichardo ...