Banks v. International Rental & Leasing Corp.
2011 V.I. Supreme LEXIS 46
Supreme Court of The Virgin Is...2011Background
- Virgin Islands Supreme Court certified a question from the Third Circuit on whether VI law allows strict liability of a lessor for injuries from a defective product.
- Court accepted jurisdiction and answered in the affirmative; question concerns VI Code tit. 1 § 4 and the impact of Restatements on local law.
- The opinion addresses the meaning of “local law” to include binding local judicial precedents and conflicts between Second and Third Restatements.
- Historical notes show VI law was intended to be shaped by judicial precedent rather than automatically applying Restatement provisions as statutes.
- Court emphasizes it has inherent power to shape common law and may decline to follow Pynes (Second Restatement) in favor of the Third Restatement’s sections 1 and 20.
- Court ultimately holds that lessors may be held strictly liable for injuries from defective products under VI law.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Virgin Islands law permits strict liability of a lessor for defective products. | Banks urges adopting the Third Restatement rule (strict liability). | Defendants argue following the Second Restatement’s approach. | Yes; VI law permits strict liability for lessors. |
| Whether the Court may deviate from the Second Restatement when shaping VI common law. | Court should adopt the majority Third Restatement approach. | ||
| Restatement approach should control per Section 4; Pynes should govern. | Court may depart from Pynes and adopt the Third Restatement sections 1 and 20. |
Key Cases Cited
- Pichardo v. V.I. Comm’r of Labor, 613 F.3d 87 (3d Cir. 2010) (deference to VI Supreme Court on local law unless manifestly erroneous)
- Gov’t of the V.I. v. Lewis, 620 F.3d 359 (3d Cir. 2010) (local law precedents bind unless reversed on certiorari)
- In re People of the V.I., 51 V.I. 374 (V.I. 2009) (binding on Superior Court; local law precedents control)
- Pynes v. Am. Motors Corp., 19 V.I. 278 (D.V.I. 1982) (Second Restatement strict liability for lessors; minority rule at the time)
- Island Insteel Sys., Inc. v. Waters, 296 F.3d 200 (3d Cir. 2002) (majority endorsement of strict liability for lessors; Restatement influence)
- Robles v. HOVENSA, L.L.C., 49 V.I. 491 (V.I. 2008) (recognizes role of Restatements and local law considerations)