Filed: Feb. 07, 1996
Latest Update: Mar. 02, 2020
Summary: Opinions of the United 1996 Decisions States Court of Appeals for the Third Circuit 2-7-1996 Brown v. Francis Precedential or Non-Precedential: Docket 95-7273 Follow this and additional works at: http://digitalcommons.law.villanova.edu/thirdcircuit_1996 Recommended Citation "Brown v. Francis" (1996). 1996 Decisions. Paper 230. http://digitalcommons.law.villanova.edu/thirdcircuit_1996/230 This decision is brought to you for free and open access by the Opinions of the United States Court of Appeal
Summary: Opinions of the United 1996 Decisions States Court of Appeals for the Third Circuit 2-7-1996 Brown v. Francis Precedential or Non-Precedential: Docket 95-7273 Follow this and additional works at: http://digitalcommons.law.villanova.edu/thirdcircuit_1996 Recommended Citation "Brown v. Francis" (1996). 1996 Decisions. Paper 230. http://digitalcommons.law.villanova.edu/thirdcircuit_1996/230 This decision is brought to you for free and open access by the Opinions of the United States Court of Appeals..
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Opinions of the United
1996 Decisions States Court of Appeals
for the Third Circuit
2-7-1996
Brown v. Francis
Precedential or Non-Precedential:
Docket 95-7273
Follow this and additional works at: http://digitalcommons.law.villanova.edu/thirdcircuit_1996
Recommended Citation
"Brown v. Francis" (1996). 1996 Decisions. Paper 230.
http://digitalcommons.law.villanova.edu/thirdcircuit_1996/230
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UNITED STATES COURT OF APPEALS
FOR THE THIRD CIRCUIT
_________________
NO. 95-7273
_________________
BARRY BROWN; JOLIE STAHL, AS THEY ARE TRUSTEES OF THE LONG
BAY TRUST
v.
LEO FRANCIS, AS HE IS THE COMMISSIONER OF THE DEPARTMENT
OF PUBLIC WORKS; DELMA G. HODGE, AS SHE IS THE COMMISSIONER
OF THE DEPARTMENT OF PROPERTY AND PROCUREMENT OF THE
GOVERNMENT OF THE VIRGIN ISLANDS; GOVERNMENT OF THE VIRGIN
ISLANDS OF THE UNITED STATES OF AMERICA
(D.C. No. 92-cv-00081)
________________
GOVERNMENT OF THE VIRGIN ISLANDS
v.
0.459 ACRES OF LAND CONSISTING OF FOLLOWING: PARCEL NO.
6A ESTATE THOMAS KINGS QUARTER AND PARCEL NO. 9A ESTATE
THOMAS, VIRGIN ISLANDS; LONG BAY TRUST
(D.C. No. 93-cv-00059)
LEO FRANCIS, AS HE IS THE COMMISSIONER OF THE DEPARTMENT OF
PUBLIC WORKS; DELMA G. HODGE, AS SHE IS THE COMMISSIONER
OF THE GOVERNMENT OF THE VIRGIN ISLANDS; GOVERNMENT OF
THE VIRGIN ISLANDS OF THE UNITED STATES OF AMERICA
_________________
On Appeal from the District Court of the
Virgin Islands
(Division of St. Thomas and St. John)
(D.C. Civil Action Nos. 92-00081 and 93-00059)
_________________
Argued December 4, 1995
BEFORE: GREENBERG and MCKEE, CIRCUIT JUDGES, and
ACKERMAN, DISTRICT JUDGE1
1
Honorable Harold A. Ackerman, Senior Judge of the United States
District Court for the District of New Jersey, sitting by
designation.
1
(Filed: February 7, 1996)
Robert W. Bornholt
Pamela Tepper (argued)
Department of Justice
48B-50C Kronprindsens Gade
GERS Bldg., 2d Floor
St. Thomas, USVI 00802
Attorneys for Appellants
Morris M. Goldings (argued)
Ellen S. Shapiro
Mahoney, Hawkes & Goldings
The Heritage on the Garden
75 Park Plaza
Boston, Massachusetts 02116
Attorneys for Appellees
______________
OPINION OF THE COURT
______________
HAROLD A. ACKERMAN, Senior District Judge
On this appeal, we are faced with several interrelated
jurisdictional issues arising out of appellant Long Bay Trust's
inverse condemnation action filed in the District Court of the
Virgin Islands and the Government of the Virgin Islands'
("government") parallel eminent domain action filed in the
Territorial Court of the Virgin Islands. Both cases involved the
same parcels of land.
First, we must determine whether the government's eminent
domain case was properly removed from Territorial Court to the
district court. Second, we must assess the impact, if any, of
the district court's order consolidating the eminent domain and
2
inverse condemnation cases following the removal from the
Territorial Court, and the parties' subsequent submission of
their claims to binding arbitration.
For the following reasons, we conclude that the district
court did not have subject matter jurisdiction over the
government's eminent domain case and that the case was therefore
improperly removed to the district court. Ultimately, this lack
of jurisdiction requires us to vacate the district court's order
confirming the arbitration award. The eminent domain and inverse
condemnation cases will be remanded to the district court with
instructions to remand the eminent domain case to the territorial
court. Finally, for the reasons we set forth below, the district
court is to consider abstaining from deciding the inverse
condemnation case.
I. FACTUAL BACKGROUND AND PROCEDURAL HISTORY
A. Introduction
This appeal involves a dispute that arose out of the Virgin
Island Government's plans to condemn a portion of privately-owned
commercial property located in the Virgin Islands. Sometime
prior to 1988, the government began planning to improve traffic
circulation on or about Long Bay Road and Route 313 in the Virgin
Islands. The project, which was to be 100% U.S. federally
funded, and was known as the "Long Bay Road Highway Improvement
Project" required the use of additional land. Accordingly, the
Virgin Islands government commenced negotiations for the "taking"
of private land that would be needed for the project.
3
Specifically, the government required approximately 2.64
acres of land known as Parcels No. 6 and No. 9, located in Estate
Thomas, Kings Quarter, St. Thomas. The property was commercially
zoned and several buildings were situated upon the land. During
December 1988 or January 1989, the government commenced
negotiations with the owners of the property, Millad Associates,
for the acquisition of the property.
Before a deal could be ironed out with the government,
Millad Associates sold the property to Jolie Stahl and Barry
Brown, as co-trustees ("trustees") of the Long Bay Trust. The
purchasers paid $3.25 million for both the property and the
buildings situated upon the property. A deed to the property was
executed by the parties on May 9, 1989, and the deed was recorded
on May 31, 1989. At the time of purchase, the trustees were
aware of the government's plans to "take" a portion of the
property.
B. The Litigation
Three years after the trustees purchased the subject
property, the trustees filed an inverse condemnation action in
the District Court of the Virgin Islands against the government,
alleging that the government had unreasonably delayed in taking
portions of the trust property. According to the trustees, the
government had deprived the trust of the highest and best value
of its property by unreasonably delaying in the condemnation of
Lots 6 and 9, while at the same time condemning property across
the street from the two lots. The trustees contended that this
4
sequence of events allowed a competitor to get a head-start on
business, to the detriment of the trust. Moreover, the trustees
alleged that they could not secure financing or tenants while the
government's proposed taking was pending.2
The government responded to the trustees' federal court
action on August 13, 1992, by filing an eminent domain action,
pursuant to V.I. Code Ann. tit. 28, § 411 (1957 & Supp. 1994), in
the Virgin Islands Territorial Court. The government alleged in
its complaint that the property was worth approximately $1.2
million. Furthermore, the government submitted a Declaration of
Taking and an Order Vesting Title. The order vesting title was
signed by Judge Ive Arlington Swan on September 1, 1992.
On September 14, 1992, the trustees filed a notice of
removal seeking to remove the government's territorial court
eminent domain action to the District Court of the Virgin
Islands. App. 10-13. The government thereafter moved to dismiss
the removal petition, arguing that removal was improper because
the district court did not have subject matter jurisdiction over
2
See App. 215 (Appellees' Inverse Condemnation Complaint
(D.V.I.)). The government filed a motion to dismiss the inverse
condemnation suit on May 29, 1992. The government argued that
the action should be dismissed for failure to state a claim
because the government's failure to act on the condemnation at
issue was not amenable to court scrutiny. Furthermore, the
government alleged that the district court lacked jurisdiction to
hear the inverse condemnation case. See App. 231-57 (containing
filings pertinent to the motion to dismiss). The district court
denied the government's motion in its entirety on March 11, 1993.
App. 256-57.
5
the eminent domain claim.3 The district court denied the motion
to dismiss.
According to the court, diversity of citizenship
jurisdiction supported removal of the eminent domain case to
federal court. The court reasoned that complete diversity of
citizenship existed between the Government of the Virgin Islands
and the trustees. Furthermore, the court found that the
trustees' tenants were merely nominal parties to the action whose
citizenship could be disregarded for purposes of establishing
diversity jurisdiction. The district court therefore found that
it had subject matter jurisdiction over the government's eminent
domain case and the court denied the government's motion to
dismiss the removal petition.
The government renewed its jurisdictional argument in a
motion for reconsideration. According to the government, the
trustees erroneously relied upon the citizenship of the Territory
of the Virgin Islands in invoking the diversity of citizenship
jurisdiction of the district court. The government argued that
because the citizenship of the territory could not be relied upon
for purposes of establishing diversity jurisdiction, the district
3
The government filed its motion to dismiss pursuant to Federal
Rule of Civil Procedure 12(h). It appears, however, that the
government's motion should have been filed as a motion to remand
pursuant to 28 U.S.C. § 1447(c), which states that "[i]f at any
time before final judgment it appears that the district court
lacks subject matter jurisdiction, the case shall be remanded."
Whether the government labeled its motion as motion to dismiss or
as a motion to remand, does not, however, have any impact on the
outcome of this case.
6
court did not have diversity jurisdiction over the eminent domain
case. The government argued that removal was therefore improper.
The district court denied the motion for reconsideration,
without discussion, in an order dated December 6, 1993.
C. The Arbitration
Following the trustees' successful removal of the eminent
domain case, two actions involving lots 6 and 9 were left pending
in the District Court of the Virgin Islands. Eventually, the two
actions were consolidated for both discovery purposes and for
trial without a jury. See Appellee's Brief, at 7. Thereafter,
the government and the trustees entered into a joint stipulation
to refer their controversies to binding arbitration. App. 125.
The stipulation specified that the parties would abide by the
award rendered, and that the district court could enter judgement
on the arbitration award. App. 126.
An arbitration hearing was held on October 5 and 6, 1994.
Alex Gonzalez, Esq., served as the arbitrator. App. 126. The
arbitrator issued his findings on October 24, 1994. App. 128.
The trustees of the Long Bay Trust were awarded a total of
$2,891,158.00. App. 134.
D. Post Arbitration Litigation
The Government of the Virgin Islands filed a motion to
dismiss the arbitration award on December 7, 1994. App. 104. The
government claimed that its agents had acted without statutory
authority when they had signed the arbitration agreement.
7
Furthermore, the government argued that the district court was
without statutory jurisdiction under the Federal Arbitration Act
("FAA") to confirm the arbitration award. App. 104-105. The
trustees moved to confirm the arbitration award on February 13,
1995.
The district court denied the government's motion to dismiss
and granted the trustees' motion to confirm the arbitration award
in a memorandum opinion and order dated March 31, 1995. App.
161-167. According to the court, both the government and the
trustees signed the arbitration agreement voluntarily. This in
itself constituted an enforceable contract under the FAA, the
court reasoned, which the court could enforce. Despite the
government's obfuscation, the court noted, the proceeding was
governed by the FAA, and the trustees could seek entry of
judgment on the arbitration award.
Furthermore, the court noted that the joint stipulation
stated that the government would abide by and perform any award
rendered by the arbitrator. Even if the parties mistakenly
referred to irrelevant statutes in the stipulation (which the
government contended deprived the district court of
jurisdiction), the court found that the parties' intention to
arbitrate their dispute was clearly evidenced by the stipulation.
The court therefore denied the government's motion to dismiss the
arbitration award and granted the trustees' motion to confirm the
arbitration award. App. 167.
Finally, the court also took issue with the government's
written submissions in support of its motion to dismiss.
8
According to the court, the government's brief did not contain
one citation to precedent. Furthermore, the court noted that
"[c]onsidered as a whole, the Government's motion papers are
inexcusably opaque and insufficiently supported by case law."
App. 167. Accordingly, the court determined that the government
would be sanctioned. The court ordered the Government to pay all
costs and attorneys' fees associated with the motion. The
Government was, however, given an opportunity to show cause why
it had not violated Rule 11 of the Federal Rules of Civil
Procedure by filing the motion. The Trustees were directed to
file an affidavit of costs and attorney fees. App. 163-67. At
the present time, the district court has not rendered its
decision on the sanctions issue.
II. DISCUSSION
The government filed a timely notice of appeal from the
district court's final order and judgment confirming the
arbitrator's award. This order was final within the meaning of
28 U.S.C. § 1291 and we may therefore exercise jurisdiction over
the government's appeal from that order.4
4
The district court also ordered the government to show cause by
April 14, 1995, why it should not be sanctioned for its written
submissions on the motion to dismiss the arbitration award. The
government argues on appeal that the district court abused its
discretion in imposing sanctions. At the same time, however, the
government concedes that the district court has not yet issued a
final order quantifying or even definitively imposing sanctions.
A court of appeals clearly does not have jurisdiction to
review an order which has not yet been issued. The court is
therefore without jurisdiction to review the sanctions which may
be imposed upon the government. We hasten to add, however, that
our lack of jurisdiction over the sanctions issue does not
9
Proper appellate jurisdiction does not, however, relieve us
from inquiring into the propriety of the district court's
exercise of jurisdiction in this case. Employers Ins. of Wausau
v. Crown Cork & Seal Co., 905 F.2d 42, 45 (3d Cir. 1990) (citing
Bender v. Williamsport Area Sch. Dist.,
475 U.S. 534, 541, 106 S.
Ct. 1326, 1331,
89 L. Ed. 2d 501 (1986)). We exercise plenary
review in determining whether the district court was vested with
subject matter jurisdiction. Bumberger v. Insurance Co. of North
America,
952 F.2d 764, 766 (3d Cir. 1991).
A. The Eminent Domain Case Was Improvidently Removed From
Territorial Court
The Federal Rules of Civil Procedure permit a defendant in a
state court action to remove that action to a federal forum. See
28 U.S.C. § 1441, applicable in the Virgin Islands under 48 U.S.
C. § 1613. As § 1441(a)'s language indicates, removal under
that section is proper only if the federal district court would
have had original jurisdiction if the case was filed in federal
court. This jurisdictional prerequisite to removal is an
absolute, non-waivable requirement. See Allbritton
Communications Co. v. NLRB,
766 F.2d 812, 820 (3d Cir. 1985),
cert. denied,
474 U.S. 1081,
106 S. Ct. 850,
88 L. Ed. 2d 891
deprive us of jurisdiction over the larger, substantive issues
out of which the sanctions issue arose. See McDonnell v. United
States,
4 F.3d 1227 (3d Cir. 1993) (finding that unresolved
attorney fee issues in case does not deprive court of appeals
from exercising jurisdiction over appeal from underlying
controversy) (citing Budinich v. Becton Dickinson & Co.,
486 U.S.
196, 198-202,
108 S. Ct. 1717, 1719-22,
100 L. Ed. 2d 178 (1988)
(other citations omitted)); see also Confer v. Custom Eng'g Co.,
952 F.2d 41, 44 (3d Cir. 1991).
10
(1986). "Because lack of jurisdiction would make any decree in
the case void and the continuation of the litigation in federal
court futile, the removal statute should be strictly construed
and all doubts resolved in favor of remand." Abels v. State Farm
Fire & Cas. Co., 770 F.2d 26, 29 (3d Cir. 1985) (citations
omitted). If there is any doubt as to the propriety of removal,
that case should not be removed to federal court. See Boyer v.
Snap-On Tools Corp.,
913 F.2d 108, 111 (3d Cir. 1990), cert.
denied,
498 U.S. 1085,
111 S. Ct. 959,
112 L. Ed. 2d 1046 (1991);
Abels, 770 F.2d at 29.
Diversity of citizenship subject matter jurisdiction falls
within the original jurisdiction of the district court and a
state court case that implicates diversity jurisdiction may
therefore be removed to federal court. Abels, 770 F.2d at 29.
Diversity jurisdiction is properly invoked in cases where there
is complete diversity of citizenship between plaintiffs and
defendants and where the amount in controversy exceeds $50,000.
28 U.S.C. § 1332. See Development Fin. Corp. v. Alpha Housing &
Health Care, Inc.,
54 F.3d 156, 158 (3d Cir. 1995) ("It is
axiomatic that the federal judiciary's diversity jurisdiction
depends on complete diversity between all plaintiffs and all
defendants.") (citing Strawbridge v. Curtiss, 7 U.S. (3 Cranch)
267, 2 L. Ed. 435 (1806)). For purposes of determining whether
the complete diversity requirement has been met, the citizenship
of nominal parties to the litigation may be disregarded.
Abels,
770 F.2d at 29.
11
The district court ruled that the Virgin Islands Government
could be considered a citizen for purposes of establishing
diversity of citizenship jurisdiction. We disagree with the
district court's conclusion. More than one hundred years ago,
the United States Supreme Court ruled that a state cannot be
considered a citizen for purposes of establishing diversity of
citizenship jurisdiction in federal court. Postal Telegraph
Cable Co. v. State of Alabama, 155 U.S. 482, 487,
15 S. Ct. 192,
194 (1894). See Ramada Inns, Inc. v. Rosemount Memorial Park
Assoc.,
598 F.2d 1303, 1306 (3d Cir. 1979) ("[I]t is well settled
that a state is not a citizen within the meaning of the diversity
statute.") (citations omitted); see also Gable v. Commonwealth of
Pennsylvania, 521 F. Supp. 43, 43-44 (E.D. Pa. 1981) ("The rule
that a state is not a `citizen' for diversity purposes is a long-
standing one; it enjoys a history of acceptance, which remains
undiluted by the passage of time.") (citations omitted).
In this case, the district court relied upon the citizenship
of the Territory of the Virgin Islands in finding that diversity
of citizenship jurisdiction supported removal of the trustees'
eminent domain case to federal court. Thus, the question is
whether the Government of the Virgin Islands constitutes a
"state" for purposes of establishing diversity of citizenship
jurisdiction. The trustees argue that the Virgin Islands is not
a State, but a Territory of the United States and that the
policies which preclude sovereign immunity for territories in
federal court similarly preclude a Territory from being
12
considered a "state" for purposes of establishing diversity
jurisdiction. We are not persuaded by these arguments.
Section 1332 of Title 28 of the United States Code
specifies, in pertinent part, that "district courts shall have
original jurisdiction of all civil actions" between "citizens of
different States." 28 U.S.C. § 1332(a). According to § 1332(d),
the "word `States,' as used in this section, includes the
Territories, the District of Columbia, and the Commonwealth of
Puerto Rico." Accordingly, the Territory of the Virgin Islands,
a United States Territory, qualifies as a "state" for purposes of
the diversity jurisdiction statute.
As noted above, a state cannot be considered a citizen for
purposes of establishing diversity of citizenship jurisdiction
subject matter jurisdiction in federal court. Therefore, it
follows that a Territory of the United States, which is
considered a state pursuant to § 1332(d), also cannot be
considered a citizen for purposes of establishing diversity of
citizenship jurisdiction. The Territory of the Virgin Islands
should not have been considered a citizen for purposes of
establishing diversity jurisdiction in the court below. Cf. Mann
v. District of Columbia, 742 F.2d 750, 752 (3d Cir. 1984)
(concluding that District of Columbia did not qualify as a
citizen for purposes of diversity of citizenship jurisdiction
because § 1332(d) specified that the District of Columbia (like
the territory of the Virgin Islands) was to be construed as a
"state" for purposes of the diversity statute).
13
Therefore, the district court did not have subject matter
jurisdiction over the eminent domain case and the case was
improvidently removed from the Territorial Court.5
B. The District Court's Post-Removal Actions
We have concluded that the government's eminent domain case
was improvidently removed to federal court. In the ordinary
case, this conclusion would lead us to remand the action to the
district court with instructions to remand the case to the state
court. See Abels, 770 F.2d at 27. This case does not, however,
fit within the mold of a garden variety improvidently removed
case.
The district court engaged in actions subsequent to the
removal of the government's case which served to integrate the
jurisdictionally improper eminent domain case with the trustees'
jurisdictionally proper inverse condemnation case. Following
removal of the eminent domain case, the eminent domain and
inverse condemnation cases were consolidated for discovery
purposes and for trial without a jury. Thereafter, the parties
entered into a stipulation to submit all of their claims to an
arbitrator. Finally, the parties' claims were reduced to one
award from the arbitrator and the court entered an order and
judgment confirming that award.
5
In view of this conclusion, there is no need for us to address
the question of whether the trustees' tenants were nominal
parties in the eminent domain proceeding.
14
We must determine whether the district court's merger of the
inverse condemnation case with the substantively similar, but
jurisdictionally deficient eminent domain case precluded the
district court from exercising its jurisdiction over the inverse
condemnation case. For the reasons set forth below, we have
determined that the district court could not properly exercise
its jurisdiction over the inverse condemnation case.
It is clear in this case that due to the similarity of the
issues in the two cases, the district court's post-consolidation
exercise of jurisdiction over the jurisdictionally proper inverse
condemnation case also constituted an exercise of authority over
the government's jurisdictionally improper eminent domain case. A
court may not, however exercise authority over a case for which
it does not have subject matter jurisdiction. See Bender v.
Williamsport Area Sch. Dist., 475 U.S. 534, 541,
106 S. Ct. 1326,
1331,
89 L. Ed. 2d 501 (1986)). Neither consolidation with a
jurisdictionally proper case nor an agreement by the parties can
cure a case's jurisdictional infirmities. See McKenzie v. United
States,
678 F.2d 571, 574 (5th Cir. 1982) (consolidation of
jurisdictionally deficient claim with jurisdictionally proper
claim does not cure jurisdictional defects) (citations omitted);
Reich v. Local 30, IBT,
6 F.3d 978, 982 n.5 (3d Cir. 1993)
(parties to action cannot waive subject matter jurisdiction
requirements by consenting to court's jurisdiction) (citations
omitted). Nonetheless, the district court's consolidation of the
cases and the parties' subsequent arbitration agreement had the
practical effect of permitting the district court to exercise
15
authority over a case for which it did not have subject matter
jurisdiction. We are unwilling to approve of this result.
The district court could not exercise jurisdiction without
exercising jurisdiction over the improperly removed eminent
domain case. The actions by the court and the parties to this
action allowed the jurisdictional infirmity of the eminent domain
case to taint the court's attempts to exercise its subject matter
jurisdiction over the inverse condemnation case. It follows that
we must vacate any orders entered by the district court that were
entered after the eminent domain case was removed to the district
court and in which the district court purported to exercise
jurisdiction over both the eminent domain and inverse
condemnation case.
C. Restoring the Parties to their Pre Removal
Postures; Abstention
We have determined that the district court erroneously
denied the government's motion to dismiss the trustees' removal
petition. Furthermore, we have determined that the district
court acted without jurisdiction when it purported to exercise
authority over the consolidated inverse condemnation and eminent
domain cases. Because any post-removal actions taken by the
court in this case were therefore ineffectual, we have determined
that restoring the parties to the positions that they occupied
prior to the removal is the proper course of action for us to
take on this appeal.
16
Consequently, we will vacate the district court's order
confirming the arbitration award as the district court did not
have jurisdiction to enforce the award in this case. See
Southland Corp. v. Keating, 465 U.S. 1, 15 n.9,
104 S. Ct. 852,
861 n.9 (1984). Furthermore, we will remand the eminent domain
and inverse condemnation actions to the district court. The
district court shall separate the two actions by remanding the
government's condemnation action to the Territorial Court of the
Virgin Islands and by retaining jurisdiction over the trustees'
inverse condemnation action.
This disposition of the appeal will restore the parties to
the positions that they occupied prior to the district court's
improvident removal and improper exercise of jurisdiction. Two
actions involving the same parcels of land will therefore be left
pending in federal court and territorial court. Despite our
resolution of the jurisdictional issues arising from the district
court's improper removal, we are nonetheless concerned about the
possibility of the district court's exercise of jurisdiction in
this case even though the Territorial Court will also be
exercising its jurisdiction over similar issues.
On similar facts, the United States Court of Appeals for the
Eleventh Circuit ordered the district court to exercise its power
of abstention. T.J. Fountain v. Metropolitan Atlanta Rapid
Transit Auth., 678 F.2d 1038, 1046 (11th Cir. 1982). The court
ruled that the district court should abstain from deciding an
inverse condemnation case until such time that it became apparent
that the inverse condemnation plaintiff would not receive the
17
relief it sought in the State of Georgia's previously-filed
condemnation action. According to the court, "[a]s has been
noted many times before, a suit involving state condemnation of
private property is primarily a local matter that is best left to
the state courts." Id. The court further reasoned that although
abstention was not required in all condemnation cases, abstention
was necessary in T.J. Fountain because there was the possibility
of inconsistent state and federal judgments. We agree with the
T.J. Fountain court's analysis.
Like the T.J. Fountain court, we too are concerned about the
problems that may arise from inconsistent judgments in this case.
Unlike the T.J. Fountain court, however, we believe that the
abstention decision is one that should be exercised by the
district court in the first instance. Therefore, instead of
ordering the district court to abstain in this matter, we will
suggest to the district court to consider abstaining in light of
the parallel Territorial Court action. As previously noted, the
Territorial Court had actually entered an order vesting title in
the government prior to the district court's improper removal. In
remanding the case, we leave this fact for the district court's
consideration in its abstention analysis.
III. CONCLUSION
The district court's order and judgment confirming the
arbitration award will be vacated. The trustees' inverse
condemnation action and the government's eminent domain action
18
will be remanded to the District Court of the Virgin Islands with
instructions for the district court to remand the government's
eminent domain case to the Territorial Court for the Virgin
Islands. Finally, in accord with our discussion on T.J.
Fountain, the district court shall consider whether it should
abstain from deciding the trustees' inverse condemnation case.
We must stress the narrowness of our ruling. We have
determined that the district court acted without subject matter
jurisdiction and was therefore without power to enter the post-
removal order specified above. It does not necessarily follow
from this conclusion, however, that the parties' post-removal
agreement to arbitrate is similarly void and without legal
effect. Thus, our opinion does not preclude further litigation
on the point. Indeed, it is possible that if the arbitration
award can be enforced in a jurisdictionally correct proceeding,
this entire controversy may be put to rest without the need for
extensive proceedings on the remand. Nonetheless, we do not
express an opinion on whether the parties' agreement to arbitrate
19
can survive our conclusion that the district court was without
power to enter decisions on that agreement.
_________________________
20
