385 F.3d 801 | 3rd Cir. | 2004
FOR THE THIRD CIRCUIT District Judge: Honorable Raymond L.
____________ Finch Nos: 02-2695/3762 _____________ Argued on April 30, 2003
WYATT, VIRGIN ISLANDS, INC.
Before: ROTH, MCKEE and COWEN HOVENSA, LLC, Circuit Judges Intervenor-Plaintiff in District Court (Opinion filed: October 12, 2004) v. Iver A. Stridiron Attorney General GOVERNMENT OF THE VIRGIN
ISLANDS BY AND THROUGH THE
Elliott M. Davis
VIRGIN ISLANDS DEPARTMENT OF
Solicitor General LABOR; CECIL BENJAMIN,
IN HIS OFFICIAL CAPACITY AS
Douglas J. Juergens (Argued) COMM ISSIONER OF THE VIRGIN Maureen Phelan
ISLANDS DEPARTMENT OF LABOR Richard S. Davis Assistant Attorney General VIRGINIE GEORGE; MALCOLM Department of Justice MACCOW; EDGAR BARRIOS; 48B-50C Kronprindsens Gade
CLAUDE GAINE
GERS Building, 2 nd Floor St. Thomas, VI 00802 Intervenors-Defendants in District Court K. Glenda Cameron (Argued) Lee J. Rohn Government of the Virgin Islands, Law Office Lee J. Rohn 1101 King Street, Suite 2 Appellant in 02-2695 Christiansted St. Croix, USVI, 00820
Virginie George, Malcolm M accows, Counsel for Appellants Edgar Barrios and Claude Gaines, Appellants in 02-3762 Charles E. Engeman (Argued) DRA is enforceable and (2) an injunction Ogletree, Deakins, Nash, Smoak & to prohibit the Commissioner of the Stewart Department of Labor from interfering with 1336 Beltjen Road their use of the DRA. The District Court Suite 202 granted declaratory relief in plaintiffs’ Charlotte Amalie, St. Thomas, VI 00802 favor. Although the defendants raise many
grounds on appeal, the only issue we need W. Carl Jordan address is whether the plaintiffs’ action for Tara Porterfield (Argued) declaratory and injunctive relief is ripe for Vinson & Elkins L.L.P.
judicial review. For the reasons we state 2300 First City Tower below, we conclude that, under Public 1001 Fannin Street Service Commission v. Wycoff Co., Inc., Houston, TX 77002-6760
344 U.S. 237 (1952), there is no “case of actual controversy” here as is required by
George H. T. Dudley 28 U.S.C. § 2201(a). Thus, plaintiffs’ Micol L. Morgan cause of action is not ripe for review. Dudley, Topper and Feuerzeig, LLP I. BACKGROUND Law House, 1A Frederiksberg Gade In 2001, HOVENSA awarded Charlotte Amalie, St. Thomas Wyatt a contract to provide maintenance U.S. Virgin Islands 00802 and other services at HOVENSA’s oil
refinery in St. Croix, Virgin Islands. In November 2001, Wyatt began accepting
Counsel for Appellees 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
O P I N I O N
claims arising from the applicant’s candidacy for employment or the terms and co nd itio ns of an y offer of
ROTH, Circuit Judge e m p l o y m e n t . [1] W y a t t ’ s p a r e n t Plaintiffs, Wyatt V.I., Inc., and HOVENSA, L.L.C., brought an action for declaratory and injunctive relief in the [1] The Dispute Resolution Agreement District Court of the Virgin Islands. The
provides in relevant part: dispute arose from the requirement Wyatt imposed on prospective employees that
NOTICE TO ALL APPLICANTS
they sign a Dispute Resolution Agreement (DRA) as a condition of employment.
If you wish to be considered Plaintiffs sought (1) a declaration that the for employment with Wyatt V.I., corporation, Wyatt Field Services Co., doe s not requ ire app licants for employment on the mainland United States
Inc. (“Wyatt”), you must read and to sign a DRA. sign the fo llowing Dispute Prospective employees complained Resolution Agreement. Your to the Virgin Islands Department of Labor application will not be considered about the DRA. As a result of these until you h ave s igned the complaints, the Commissioner of the Agreement. If you desire to do so, Department of Labor sent two letters to you may take this document with Wyatt requesting that Wyatt “cease and you to review. You must, however, desist” its use of the DRA. In the first return a signed copy of the letter, dated December 20, 2001, the Agreement with your application if Commissioner wrote to Todd Reidlinger, you wish to continue the a manager at Wyatt in the Virgin Islands, application process. “[t]he agreement is improper and illegal; it does not serve as a portrayal of reasonable
Dispute Resolution Agreement and fair labor/management relations.” The C o m m i s s i o n e r a l s o asse rte d th e Department of Labor’s belief that the DRA
I recognize that differences violated the Virgin Islands Wrongful may arise between Wyatt and me in Discharge Act (WDA), 24 V.I.C. § 76. relation to my application for Then in a February 1, 2002, letter, sent to employment. Both Wyatt and I Carmelo Rivera, a human resources agree to resolve any and all claims, disputes or controversies arising out of or relating to my application or candidacy for employment or the or harassment on the basis of age, terms and conditions of any offer of race, religion, disability, national employment exclusively by final origin or other basis prohibited by and binding arbitration before a state, federal, or territorial law; or neutral arbitrator pursuant to the c la im s fo r breach of any American Arbitration Association’s e m p l o ym e n t a g r e e m e n t o r National Rules for the Resolution of promises; and any claims for Employment Disputes , a copy of personal injury or property damage. which is available at www.adr.org This agreement extends to disputes or from Wyatt. By way of example with or claims against Wyatt V.I., only, some of the types of claims Inc., HOVENSA, L.L.C., and any subject to final and binding of their related or affiliated arbitration include claims for an companies, entities, employees or alleged wrongful decision not to individuals (as intended third party hire me; claims for discrimination beneficiaries to this agreement). consultant for Wyatt, the Commissioner declaratory relief, and we stated: shall proceed to seek such
We will do whatever is relief on behalf of the necessary to ensure that the Department of Labor and Virgin Islands’ workforce the prospective employees receive every ‘employment of Wyatt. We expect to protection’ guaranteed to gather affidavits to support them under our labor laws. suc h an ac tion fro m You are hereby advised that prospective employees who a willful violation of 24 were told they had to sign V.I.C. § 76 will be reported these agreements if they to Office of the Attorney wanted to be considered for General for prosecution. employment with Wyatt, Please cease and desist from and felt coerced into signing this p r a c tice. Y o u r the agreements. cooperation is expected.
* * * Wyatt nevertheless continued to use The pre-employment dispute the DRA as a condition of employment. [2] r e s o l u t i o n a g r e e m e n t The Department of Labor then requested required by Wyatt, Inc. for an opinion from the Office of the Attorney prospective employees is in General of the Virgin Islands regarding violation of 24 V.I.C. 76, Wyatt’s use of the DRA. On March 1, and is unco nscionable , 2002, the Attorney General issued an coercive, a n a dhesio n opinion letter, stating: contract, and is contrary to
We find that this case is ripe an important public policy f o r i n j u n c t iv e a n d / o r in the Virgin Islands which
recognizes the employment r e a l i t y o f a n i s la n d economy. [2] In an apparent effort to reconcile the dispute over the use of the DRA, the
After the Attorney General issued the Commissioner and Wyatt’s attorney opinion, the Commissioner notified Wyatt conferred by telephone before the of his intent to bring charges if Wyatt Commissioner sent the first letter. Wyatt continued to use the DRA. agreed to remove objectionable language The Government, however, never from the DRA concerning employment at filed suit against Wyatt. Instead, on March will but continued to use essentially the 20, 2002, Wyatt instituted an action for same DRA. The two also met after the declaratory and injunctive relief against Commissioner sent the first letter but did the Government. In Count I, Wyatt sought not resolve the dispute. a declaration under the Federa l granted Wyatt. The motion was granted. Declaratory Judgment Act, 28 U.S.C. § HOVENSA’s complaint in intervention 2201(a ), and the Virgin Islands alleged the same counts as Wyatt’s, Declaratory Judgment Act, 5 V.I.C. §1261, excluding the request for injunctive relief. that 1) by agreeing to arbitrate, an After the suit had commenced applicant or employee does not forego Virginie George, Malcolm Maccow, Edgar substantive rights, but instead agrees to Berrios, and Claud Gaines, prospective resolution of all disputes in an arbitral employees whom Wyatt would not forum; 2) the Federal Arbitration Act consider for employment because of their (FAA), 9 U.S.C. §§ 1 - 16, governs the refusal to sign the DRA, moved to enforceability of arbitration agreements intervene as defendants. That motion was also granted. [3] covering employment disputes; 3) the DRA is protected by and enforceable The District Court became under the FAA; 4) the DRA does not concerned about its jurisdiction to hear the violate the WDA; 5) the DRA is not case and ordered the parties to address that unconscionable; 6) the DRA is not issue. In its Memorandum Opinion dated contrary to the public policy of the Virgin June 5, 2002, the District Court concluded Islands; 7) even if the DRA violates the that it did not have subject matter WDA, the WDA is preempted by the jurisdiction based on the alleged violation FAA; and 8) the Commissioner’s “cease of 42 U.S.C. §1983. The District Court and desist” letters are unenforceable to the held, however, that it did have federal extent they purport to require Wyatt to question jurisdiction pursuant to 18 U.S.C. abandon its use of the DRA. In Count II, § 1331, based on Wyatt’s claim that the Wyatt claimed a violation of the federal FAA provides a substantive right to enter civil rights statute, 42 U.S.C. § 1983, and into an arbitration agreement and that any alleged that the Commissioner was local law in conflict with the FAA is attempting to deprive Wyatt of its liberty preempted by virtue of the Supremacy interest in entering into lawful contracts. In Clause of the United States Constitution. Count III, Wyatt sought injunctive relief Wyatt, V.I., Inc. v. Government of the against the Commissioner. Wyatt named, as defendants, the Government of the Virgin Islands by and through the Virgin [3] The prospective employees also Islands Department of Labor and Cecil moved to reopen the evidence to allow Benjamin, in his Official Capacity as presentation of evidence of “coercion, Commissioner of the Virgin Islands duress, lack of ability to apply for jobs Department of Labor. elsewhere, the illegality of the provision HOVENSA moved to intervene as and the public policy of the Virgin a third party beneficiary to Wyatt’s DRA Islands.” The District Court denied the because the DRA granted HOVENSA the prospective employees’ motion to reopen same right to demand arbitration as it the evidence. Virgin Islands, 2002 WL 31599790, * 2 violative of public policy, 369 F.3d at 274, (D.V.I. June 5, 2002). and we affirmed an order compelling
The District Court ruled that arbitration pursuant to the DRA. 369 F.3d declaratory relief was an appropriate at 275. remedy in the case because Wyatt was II. JURISDICTION AND facing “a threat of liability if it continues STANDARD OF REVIEW The District Court purported to to use the Dispute Resolution Agreement without a determination of its legality.” In exercise jurisdiction pursuant to the granting declaratory relief in Wyatt’s general federal question statute, 28 U.S.C. § 1331. favor, the court first noted that there was no preemption issue because there is no We have jurisdiction over this Virgin Islands law or policy directly in appeal pursuant to 28 U.S.C. § 1291, which gives the courts of appeals conflict with enforcement of the DRA under the FAA. The District Court next jurisdiction over appeals from all final concluded that the DRA is enforceable decisions of the district courts. We under the FAA because it is not exercise plenary review over whether a unconscionable, coercive, or contrary to cause of action is ripe. See Doe v. County public policy. Finally, the District Court of Centre, PA, 242 F.3d 437, 452 (3d Cir. denied Wyatt’s request for injunctive 2001). relief. The court reasoned that any further III. DISCUSSION Government action would be unlikely as a As one ground of appeal, the result of the declaratory judgment entered prospective employee defendants have in Wyatt’s favor. challenged the District Court’s decision to
The Go vern men t and th e exercise judicial review of the case on the ground that the case is not yet ripe. [5] First, prospective employees filed their appeals on June 7, 2002, and September 27, 2002, they submit that the Commissioner’s cease respectively. [4] Wyatt does not appeal the
and desist letters were not orders within District Court’s denial of injunctive relief. the meaning of 24 V.I.C. § 68(c). They further urge that, even if the cease and During the pendency of this appeal, desist letters are considered orders, the we have held in Lloyd v. HOVENSA, Commissioner never petitioned the L.L.C., 369 F.3d 263 (3d Cir. 2004), that Territorial Court for enforcement of the Wyatt’s DRA was not unenforceable as orders. They argue that, because the
Territorial Court never entered a decree [4] The prospective employees filed a enforcing the orders, there was no final Ashwander v. Tennessee Valley Auth., administrative or state action; therefore, 297 U.S. 288, 325 (1936). The Act is the case was not ripe for judicial constitutional “so far as it authorizes relief intervention. which is consonant with the exercise of the
Wyatt and HOVENSA contend that judicial function in the determination of the case is ripe for judicial review because controversies to which under the the Commissioner’s “cease and desist” Constitution the judicial power extends.” orders constitute concrete action in the Aetna, 300 U.S. at 240. sense that the orders affect Wyatt’s In order for there to be a “case of primary conduct, namely what contracts actual controversy” in the constitutional Wyatt can utilize in its hiring process. sense, the controversy must be Additionally, Wyatt asserts that it had no one that is appropriate for choice but to bring its action for judicial determination. A declaratory and injunctive relief because it justiciable controversy is thought it would be subject to fines or thus distinguished from a imprisonment under 24 V.I.C. § 75 if it difference or dispute of a continued to ignore the orders of the hypothetical or abstract Commissioner. character; from one that is
We agree with the prospective academic or moot. The employee defendants that this case is not controversy must be definite ripe under the “case of actual controversy” and concrete, touching the requirement of the Declaratory Judgment legal relations of parties Act of 1934, 28 U.S.C.A. § 2201. Because h a v i n g a d v e r s e le g a l we decide the appeal on this basis, we will interests. It must be a real not go on to discuss the other grounds for and substantial controversy appeal. admitting of specific relief
The Declaratory Judgment Act through a decree of a creates a remedy by which federal courts conclusive character, as “may declare the rights and other legal distinguished from an relations of any interested party seeking opinion advising what the such declaration” when there is a “case of law would be upon a actual controversy.” 28 U.S.C. § 2201(a). hypothetical state of facts. The Supreme Court, in upholding the constitutionality of the Act, has interpreted Aetna, 300 U.S. at 240-41 (citations the remedy as limited to cases and omitted). The conflict between the parties controversies in the constitutional sense. must be ripe for judicial intervention; it See Aetna Life Insurance Co. of Hartford, cannot be “nebulous or contingent” but Conn. v. Haworth, 300 U.S. 227, 240 “must have taken on fixed and final shape (1937). A “case of actual controversy” so that a court can see what legal issues it means one of a justiciable nature. is deciding, what effect its decision will have on the adversaries, and some useful of actual controversy” in an action seeking purpose to be achieved in deciding them.” declaratory and injunctive relief, under the Wycoff, 344 U.S. at 244. Federal Declaratory Judgment Act, to
Interrelated to our discussion of establish that certain film products were what constitutes a “case of actual being transported in interstate commerce. controversy” in the constitutional sense is The Utah Public Service Commission had the ripeness doctrine. The purpose of the denied the plaintiff’s application for ripeness doctrine is to “prevent the courts, authorization to carry film commodities throug h av o ida nc e o f p rem atu re within the state. The plaintiff commenced adjudication, from entangling themselves an action in federal court, seeking both a i n a b s t ra c t d is a g r e e m e n t s o v er declaratory judgment that its carriage of administrative policies, and also to protect motion picture film and newsreels between the agencies from judicial interference points in Utah constituted interstate until an administrative decision has been commerce and an injunction from formalized and its effects felt in a concrete interfering with this transportation. way by the challenging parties.” Abbott Wycoff, 344 U.S. at 239. Laboratories v. Gardner, 387 U.S. 136, The Court decided that the case was 148-49 (1967), overruled on other not ripe for judicial review. First, the grounds, Califano v. Sanders, 430 U.S. 99, Court noted that the dispute had not 105 (1977). In determining whether a matured to a point where the Court could dispute has matured to a point to require see what controversy w as going to judicial adjudication, courts must consider develop. Id. at 245. It was not enough “the fitness of the issues for judicial tha t the pl a i n ti f f fe a re d f uture decision and the hardship to the parties of administrative or judicial action by the withholding court consideration.” Id. at commission. Id. 149. A dispute is not ripe for judicial Second, the Court noted that the determination “‘if it rests upon contingent declaratory proceeding, as it was invoked future events that may not occur as by the plaintiffs, not only “foreclos[ed] an anticipated, or indeed may not occur at a d m i n i s tr a t i v e b o d y , ” b u t w a s all.’” Doe v. County of Centre, PA, 242 “incompatible with a proper federal-state F.3d 437, 453 (3d Cir. 2001) (quoting relationship.” Id. at 247. The Court Texas v. United States, 523 U.S. 296, 300 stated: (1998)). “Claims based merely upon Declaratory proceedings in ‘assumed potential invasions’ of rights are the federal courts against not enou gh to wa rrant jud icia l state officials must be intervention.” Ashwander, 297 U.S. at decided with regard for the 325 (quoting Arizona v. California, 283 implications of our federal U.S. 423, 462 (1931)). system. State administrative
In Wycoff, the Supreme Court bodies have the initial right faced the issue whether there was a “case to reduce the general policies of state regulatory $500 or imprisoned statutes into concrete orders not more than 3 and the primary right to take months, or both. evidence and make findings of fact. It is the state courts (emphasis added). We note first which have the first and the that Wyatt does not mention last word as to the meaning potential prosecution under § 75 in of state statutes and whether its complaint requesting declaratory a particular order is within relief. Nor is § 75 mentioned at the the legislative terms of District Court hearing on April 4, reference so as to make it 2002, or in the District Court’s the action of the State. Memorandum Opinion of June 5,
2002, granting declaratory relief to Id.; Cf. Topp-Cola Co. v. Coca-Cola Co., Wyatt. In fact, at the April 5 314 F.2d 124, 126 (2d Cir. 1963) (holding hearing, the Assistant Attorney that, under Wycoff, District Court erred in G e n e r a l , r e p r e se n t i n g t h e exercising jurisdiction over the plaintiff’s Government, stated: action for declaratory relief because, just With respect as federal “interference” with state to enforcement of a administrative agencies and interpretation cease and desist of state law is “condemned,” plaintiff’s order, I believe that federal action seeking relief from there is no single territorial administration of Puerto Rican way in which cease trademark law is similarly condemned). and desist orders are
The dispute presented in the case to be enforced. before us is Wyatt’s claim that it was facing prosecution under 24 V.I.C. § 75 T h e and the possibility of the imposition of government has at its fines. Section 75 provides: arsenal more than
Whoever wilfully o n e t e c h n i q u e , resists, prev ents , including the seeking impedes or interferes o f d e c l a r a t o r y w i t h t h e judgment, which was Commissioner or his the intention in this d u l y a u t h o r iz e d matter and which, to representative, in the some extent, appears performance of his to be the direction in duties pursuant to which it’s going. this chapter, shall be fined not more than We believe that by getting a follow up the initial letters and the opinion court to adjudicate letter of the Attorney General is the dispute we would demonstrated by the statement, which we be resolving the quote above, of the Assistant Attorney issues raised by the General at the April 5 District Court cease and d esist hearing. order, and that’s it. As in Wycoff, the plaintiffs merely
feared potential future administrative or The government, however, judicial action and brought this action for has never taken any steps to obtain declaratory relief “to hold in readiness for a declaratory judgment or to invoke use should the Commission[er] at any any other remedy as set out in future time attempt to” use his powers to Chapter 3 of Title 24 of the Virgin issue an order and enforce that order Islands Code. Such remedies through the Territorial Court. See Wycoff, would include a petition for judicial 344 U.S. at 245. In essence, the dispute enforcement of an order, pursuant between the parties is contingent upon to § 69, a petition for judicial events that may not occur at all or may review of an order, pursuant to § occur differently than anticipated. See 70, or an order for reinstatement of Doe v. County of Centre, PA, 242 F.3d at a wrongfully discharged employee, 453. Because Wyatt did not give the pursuant to § 77(c). Because the Commissioner the chance to proceed on its penalties of § 75 are limited to own grounds, the Department of Labor resisting, preventing, impeding or never had the opportunity “to reduce the interfering with the Commissioner general policies of [its] state [statute] into in the performance of his duties, as [a] concrete order,” and the Virgin Islands set out in Chapter 3, it would never had the opportunity to give the “last appear that the Commissioner word” as to the meaning of the WDA and would have to seek further remedial whether the Commissioner’s order was action under Chapter 3, than he has “within the legislative terms of reference done here, before he could invoke so as to make it the action of” the Virgin the penalties of § 75. Wyatt’s fears Islands. Wycoff, 344 U.S. at 247. Wyatt appear then to be premature. has not yet felt the effects of final
The only action that Commissioner administrative or state action in a concrete did take was to write two letters in which way. Abbott Laboratories, 387 U.S. at he requested that Wyatt “cease and desist” 148-49. For the above reasons, we its use of the DRA. Such a letter is not an conclude that this cause of action is not yet “order,” nor was there any evidentiary ripe for review. hearing held prior to the transmittal of The Go vern men t and the either letter. The inconclusiveness of the prospective employees also argue that the Commissioner’s decision on how he would District Court did not have federal question jurisdiction under 28 U.S.C. § IV. Conclusion 1331. They contend that W yatt’s request For the foregoing reasons, we will for a declaration that “even if the reverse the District Court’s grant of Agreement violates the WDA, the WDA is declaratory relief and remand this case to preempted by the FAA” is in reality an the District Court with directions to anticipated federal defense of preemption dismiss it. which, under the well-pleaded complaint rule, does not by itself give the District Court subject matter jurisdiction over Wyatt’s cause of action. In response, Wyatt submits that the District Court did have jurisdiction, notwithstanding the well-pleaded complaint rule, under Shaw v. Delta Airlines, 463 U.S. 86 (1983). Wyatt argues that they presented a federal question over which the District Court had jurisdiction because they sought to enjoin the Commissioner from interfering with their federal right to enter into arbitration agreements on the ground that the WDA is preempted by the FAA. See id. at 96, n.14 (“A plaintiff who seeks injunctive relief from state regulation, on the ground that such regulation is pre-empted by a federal statute, which by virtue of the Supremacy Clause of the Constitution must prevail, thus presents a federal question which the federal courts have jurisdiction under 28 U.S.C. § 1331 to resolve.”).
Because we will dismiss this case on ripeness grounds, we do not need to decide the federal question jurisdiction issue at this time. See Wycoff, 344 U.S. at 248-49 (“Since this case should be dismissed in any event, it is not necessary to determine whether, on this record, the alleged controversy over an action that may be begun in state court would be maintainable under the head of federal- question jurisdiction.”).
NOTES
[5] The prospective employees relied motion to reconsider in the District Court on June 19, 2002, but they withdrew that on a ripeness argument in their brief and motion on September 27, 2002 and filed at oral argument, but the Government did a notice of appeal the same day. not rely on this ground for appeal.
