Birdman v. Office of the Governor

PRECEDENTIAL

UNITED STATES COURT OF APPEALS

FOR THE THIRD CIRCUIT

_______________

No. 10-4189

_______________

HARVEY BIRDMAN; DIANE BIRDMAN; HERBERT

HIRSCH; BONITA HIRSCH; BARCLAY ASSOCIATES,

INC.; KINGSBRIDGE ASSOCIATES, INC.

Appellants

v.

OFFICE OF THE GOVERNOR;

BUREAU OF INTERNAL REVENUE;

UNITED STATES OF AMERICA

_______________

No. 11-1462

_______________

In re: HARVEY BIRDMAN; DIANE BIRDMAN;

HERBERT HIRSCH; BONITA HIRSCH,

Petitioners

_______________

On Appeal from the District Court of the Virgin Islands

Division of St. Thomas and St. Thomas

(D.C. Civil Action No. 3-09-cv-00055)

District Judge: Honorable Curtis V. Gómez

_______________

Argued January 26, 2012

_______________

Before: AMBRO, CHAGARES and

HARDIMAN, Circuit Judges

(Opinion filed: April 12, 2012)

Joseph A. DiRuzzo, III, Esquire (Argued)

Mitchell S. Fuerst, Esquire

Fuerst Ittleman, PL

1001 Brickell Bay Drive, Suite 3200

Miami, FL 33131

Counsel for Appellants/Petitioners

Vincent F. Frazer

Attorney General

Bernard Van Sluytman

Solicitor General

Pamela R. Tepper (Argued)

Assistant Attorney General

Tamika M. Archer, Esquire

Office of Attorney General of Virgin Islands

Department of Justice

34-38 Kronprindsens Gade

GERS Complex, 2nd Floor

2

Charlotte Amalie, St. Thomas, VI 00802

Kenneth L. Greene, Esquire

Jennifer M. Rubin, Esquire (Argued)

United States Department of Justice

Tax Division

950 Pennsylvania Avenue, N.W.

P.O. Box 502

Washington, DC 20044

Joycelyn Hewlett, Esquire

Office of United States Attorney

5500 Veterans Building, Suite 260

United States Courthouse, Room 260

Charlotte Amalie, St. Thomas, VI 00802

Dashiell C. Shapiro, Esquire

United States Department of Justice

Tax Division

P.O. Box 227

Ben Franklin Station

Washington, DE 20044

Counsel for Appellees/Respondents

_______________

OPINION OF THE COURT

_______________

AMBRO, Circuit Judge

These consolidated cases stem from a single lawsuit

3

by two married couples and their affiliated entities. They

sued the Virgin Islands and its tax agency seeking a

determination of the source of certain income, and the United

States seeking tax refunds. The United States District Court

of the Virgin Islands (the “V. I. District Court” or simply the

“District Court”) dismissed their claim against the Virgin

Islands and transferred their claims against the United States

to the United States District Court for the Southern District of

Florida. The plaintiffs have directly appealed the District

Court‟s dismissal of their claim against the Virgin Islands,

and they have filed a petition for a writ of mandamus

concerning their claims against the United States.1 For the

reasons that follow, we affirm the holding of the District

Court and deny the mandamus petition.

I. Background and Procedural History

Harvey and Diane Birdman formed a Virgin Islands

corporation, Barclay Associates, Inc. (“Barclay”). Herbert

and Bonita Hirsch also formed a Virgin Islands corporation,

Kingsbridge Associates, Inc. (“Kingsbridge”). During the

relevant time period, tax year 2006, Barclay and Kingsbridge

were among the limited partners in a Virgin Islands limited

liability limited partnership, Four Points Management LLLP

(“Four Points”). Barclay and Kingsbridge derived all of their

income from their stakes in Four Points.

The Birdmans and the Hirsches assert that they were

not “bona fide residents” of the Virgin Islands in 2006. See

I.R.C. § 937(a). However, they claim that a portion of their

income was “derived from sources within the Virgin Islands.”

See id. § 932(a)(1)(A)(ii). Specifically, Harvey Birdman‟s

1

Though in the first instance they are appellants and the

second petitioners, for convenience we define them below as

“Appellants.”

4

2006 tax return indicates that 85.7% of his income was

derived from the Virgin Islands; for Herbert Hirsch, it was

81.47%. The men, who filed jointly with their wives, claimed

that all of their Virgin Islands income came from Barclay and

Kingsbridge, respectively.

Taxpayers situated like the Birdmans and the

Hirsches—that is, taxpayers who are not “bona fide residents”

but claim to have derived some income from the Virgin

Islands—must file two tax returns. Id. § 932(a)(2). Their

Virgin Islands tax return should include taxes payable on all

income “derived from sources within the Virgin Islands.” Id.

§ 932(b)(1), (b)(2)(B). Their United States tax return should

include taxes payable on the remaining income. Id.

§ 932(a)(3), (b)(3).

Both couples in our case filed the proper 2006 tax

returns, one with the United States and one with the Virgin

Islands. But they each made only one payment. Rather than

paying the Virgin Islands its share, as § 932 requires, both

couples paid both their United States taxes and their Virgin

Islands taxes to the United States. The taxpayers allege that

they did so “with the good faith belief that the [United States]

IRS would pay the amount[s] due to the [Virgin Islands] to

the [Virgin Islands Bureau of Internal Revenue (“VIBIR”)],

or, alternatively, that the VIBIR would obtain the amounts

from the IRS.” Compl. ¶¶ 49, 52. The United States, though,

has neither paid those sums to the Virgin Islands nor refunded

them to the taxpayers. Nor has the Virgin Islands sought to

claim those sums from the United States. Caught between

Scylla and Charybdis, the Birdmans and the Hirsches

complain that they owe debts to the Virgin Islands that equal

their overpayments to the United States.

The Birdmans, the Hirsches, Barclay, and Kingsbridge

(collectively, the “Appellants”) brought this suit in 2009 in

5

the District Court. They named both the Virgin Islands

(including its agency, the VIBIR) and the United States as

defendants but sought different relief from each. Against the

Virgin Islands, they requested a “negative injunction” that

would compel the VIBIR to declare whether the income in

question was “derived from sources within the Virgin

Islands.”2 (They claim that the income was so derived, but

the United States IRS has challenged that claim in other

proceedings.) Against the United States, they requested

refunds of the amounts they contend they initially should

have paid to the Virgin Islands.

The Virgin Islands moved to dismiss Appellants‟ claim

against it pursuant to Rules 12(b)(1) (lack of subject matter

jurisdiction) and 12(b)(6) (failure to state a claim) of the

Federal Rules of Civil Procedure. The District Court granted

its motion to dismiss, holding that Appellants had failed to

state a claim against the Virgin Islands. In the alternative, the

Court held that Appellants‟ claim against the Virgin Islands

was not ripe for decision. This dismissal is before us on

direct appeal as case 10-4189.

The United States moved to dismiss Appellants‟

claims against it pursuant to Rule 12(b)(3), asserting that

venue was improper. In the alternative, it moved to sever

2

Because the proposed injunction “commands that acts be

done rather than not done,” it is a mandatory (or affirmative)

injunction, not a negative injunction. United States v. Apex

Oil Co., 579 F.3d 734, 739 (7th Cir. 2009); see also 11A

Charles Alan Wright et al., Federal Practice and Procedure

§ 2942 & n.37 (2d ed. 1995 & Supp. 2011). We retain the

“negative” label because Appellants used it in their arguments

to the District Court. See infra section III.A.

6

those claims and transfer them to the District Court for the

Southern District of Florida, where the Birdmans and the

Hirsches live. The V. I. District Court granted the United

States‟ alternative motion, transferring this part of the case to

the Florida venue pursuant to 28 U.S.C. § 1406(a). Before

the Court entered its transfer order, Appellants moved it to

certify an interlocutory appeal of that order to our Court

under 28 U.S.C. § 1292(b).3 They maintained that, under

48 U.S.C. § 1612(a), jurisdiction (and thus venue) is proper

only in the V. I. District Court. The District Court for the

Southern District of Florida stayed the case but re-transferred

it to the V. I. District Court for the limited purpose of ruling

on Appellants‟ motion to certify an interlocutory appeal. The

V. I. District Court then denied that motion. Appellants,

however, petitioned us for a writ of mandamus to compel the

V. I. District Court to accept jurisdiction and venue. That

petition is before us as case 11-1462.

We have consolidated case 10-4189 with case

11-1462, so all counts of Appellants‟ complaint are involved

in this case. But the issues are distinct. We must decide,

first, whether Appellants have stated a claim against the

Virgin Islands, and second, what the proper venue is for

Appellants‟ claims against the United States. The latter

question requires that we determine which courts have

jurisdiction over Virgin Islands tax matters under 48 U.S.C.

§ 1612(a).

3

As an order to transfer venue is not a final order, Appellants

could not appeal as of right at this stage. See In re Federal-

Mogul Global, Inc., 300 F.3d 368, 378 (3d Cir. 2002) (“It is a

well-established rule in this circuit (and generally) that

„orders transferring venue are not immediately appealable.‟”

(citation omitted)).

7

II. Jurisdiction and Standard of Review

The V. I. District Court had jurisdiction over

Appellants‟ claim against the Virgin Islands under 48 U.S.C.

§ 1612(a). We have jurisdiction under 28 U.S.C. §§ 1291 and

1294(3). Our review of the District Court‟s order granting the

Virgin Islands‟ motion to dismiss is plenary. McGovern v.

City of Phila., 554 F.3d 114, 115 (3d Cir. 2009). “We accept

all well-pleaded allegations in the complaint as true and draw

all reasonable inferences in [Appellants‟] favor.” Id. (citation

omitted). “To survive a motion to dismiss, a complaint must

contain sufficient factual matter, accepted as true, to „state a

claim to relief that is plausible on its face.‟” Ashcroft v.

Iqbal, 129 S. Ct. 1937, 1949 (2009) (quoting Bell Atl. Corp.

v. Twombly, 550 U.S. 544, 570 (2007)); see also Fed. R. Civ.

P. 8(a)(2) (“A pleading that states a claim for relief must

contain . . . a short and plain statement of the claim showing

that the pleader is entitled to relief.”).

We have jurisdiction over Appellants‟ mandamus

petition under the All Writs Act, 28 U.S.C. § 1651. That Act

“gives appellate courts the power to issue a writ of mandamus

„in exceptional cases where the traditional bases for

jurisdiction do not apply.‟” United States v. Higdon, 638

F.3d 233, 245 (3d Cir. 2011) (quoting In re Pasquariello, 16

F.3d 525, 528 (3d Cir. 1994)).

III. Discussion

A. Claim Against the Virgin Islands

Appellants have asked the District Court to “compel

the [Virgin Islands] and the VIBIR to issue a determination of

the source of income for tax year 2006 as to Barclay and

Kingsbridge.” Compl. ¶ 61. In support of this request, they

8

cite delays by the United States IRS in its challenge to their

source of income for 2006 and other tax years. Id.

The Virgin Islands moved the District Court to dismiss

this count of the complaint for failure to state a claim. In

response to its motion, Appellants stated that they “relie[d]

upon [that] Court‟s equitable powers to issue a negative

injunction against the VIBIR for a determination of source of

income pursuant to 26 U.S.C. §§ 861-865.” Chief Judge

Gomez of the District Court at oral argument attempted to

clarify Appellants‟ position. He asked Appellants‟ counsel

four times to state their cause of action. J.A. at 303-05. Each

time, counsel responded that it was a “negative injunction.”

When Chief Judge Gomez reminded counsel that an

injunction is a remedy, not a cause of action, and that

plaintiffs must have a cause of action to seek a remedy,

counsel nonetheless responded: “Injunctive relief is a remedy.

And under the law where it‟s at it‟s also a cause of action.”

Id. at 305.

The District Court granted the Virgin Islands‟ motion

to dismiss on the basis that Appellants had not satisfied the

administrative requisites for a redetermination of their Virgin

Islands tax liability. It held in the alternative that any claim

Appellants might have against the Virgin Islands was not

ripe.

On appeal, Appellants urge that the V. I. District Court

misconstrued the nature of their claim. “[A]t no point did the

Appellants attempt to litigate their respective income tax

liabilities. . . . The Appellants‟ complaint . . . stated in no

uncertain terms that they were seeking a negative injunction.”

Appellants Br. at 40. They based no part of their appeal on

the cause of action that the District Court ascribed to them.

Yet Appellants now recognize that they must have a cause of

9

action to merit an injunction. They proffer two on appeal:

breach of contract and quasi-contract.

Appellants did not present these contract-based causes

of action to the District Court. Nowhere in their complaint or

trial memoranda on this issue does the word “contract”

appear, nor did they mention it in responding to Chief Judge

Gomez‟s repeated questioning. Those sources likewise do

not suggest how the Virgin Islands might be in breach (as the

operative paragraph of the complaint lists grievances only

against the IRS), or how it might have been unjustly enriched

(as Appellants paid the IRS, not the Virgin Islands, for the

year in question). If Appellants intended to make a contract

claim, their pleadings do not “„give the defendant[s] fair

notice of what the . . . claim is.‟” Twombly, 550 U.S. at 555

(2007) (quoting Conley v. Gibson, 355 U.S. 41, 47 (1957)).

Rather, “the pleading must contain something more by way of

a claim for relief than . . . a statement of facts that merely

creates a suspicion that the pleader might have a legally

cognizable right of action.” 5 Charles Alan Wright et al.,

Federal Practice and Procedure § 1216 (3d ed. 2004 & Supp.

2011).

“It is axiomatic that „arguments asserted for the first

time on appeal are deemed to be waived and consequently are

not susceptible to review in this Court absent exceptional

circumstances.‟” Tri-M Grp., LLC v. Sharp, 638 F.3d 406,

416 (3d Cir. 2011) (quoting United States v. Petersen, 622

F.3d 196, 202 n.4 (3d Cir. 2010)). The only causes of action

that Appellants present for our review were not argued before

the District Court. Thus, they have waived any ground on

which they might state a claim against the Virgin Islands.4

4

Appellants insist that “special circumstances” exist here that

justify a departure from our well-settled rule. However, they

10

We also agree with the District Court that any claim

Appellants might have against the Virgin Islands is not ripe to

decide. “[F]ederal courts are only empowered to decide cases

and controversies” as our Article III jurisprudence defines

them. Felmeister v. Office of Att’y Ethics, 856 F.2d 529, 535

(3d Cir. 1988). Ripeness is among the requirements for a

case or controversy to exist. Id. To determine whether a

dispute is ripe, we must evaluate “the fitness of the issues for

judicial decision” and “the hardship to the parties of

withholding court consideration.” Abbott Labs. v. Gardner,

387 U.S. 136, 149 (1967), abrogated on other grounds by

Califano v. Sanders, 430 U.S. 99 (1977).

Ripeness questions often arise when an agency has

announced a decision to take a certain action, but that action

remains tentative at the time of suit. The seminal cases of

Abbott Laboratories, cited above, and Toilet Goods Ass’n v.

Gardner, 387 U.S. 158 (1967), presented such facts. A

dispute generally is not ripe if the agency‟s “action „reflect[s]

the tentative nature of [its] conclusion,‟ in which the [the

agency] „expressly reserve[s] the possibility that [its] opinion

. . . might change.‟” Natural Res. Def. Council v. FAA, 292

F.3d 875, 883 (D.C. Cir. 2002) (quoting N.Y. Stock Exch.,

Inc. v. Bloom, 562 F.2d 736, 741 (D.C. Cir. 1977)). For

example, we held that a proposal to audit a hospital was not

fit for decision, and thus not ripe, because “„[a]n

investigation, even one conducted with an eye to

enforcement, is quintessentially non-final as a form of agency

action.‟” Univ. of Med. & Dentistry of N.J. v. Corrigan, 347

F.3d 57, 69 (3d Cir. 2003) (quoting Ass’n of Am. Med. Colls.

v. United States, 217 F.3d 770, 781 (9th Cir. 2000)). This is

do so on the basis of evidence outside the record, which we

decline to consider. See Fed. R. App. P. 10(a).

11

so because “the possibility that no enforcement action may be

taken is real for several reasons, not least of which is that the

[agency] may change [its] mind on one or more issues along

the way.” Id.

In our case, Appellants‟ claim is not ripe because the

Virgin Islands has taken no action whose legality we can

resolve. The 2006 Virgin Islands tax returns of the Birdmans

and the Hirsches indicate that they owe certain taxes. The

Virgin Islands has sent those taxpayers automated notices

reflecting their own assertion that the taxes are due.

However, it has made no formal determination of the amounts

that are in fact owed; indeed, that determination is the relief

that Appellants seek. Much less has it begun any

enforcement action. At oral argument, counsel for the Virgin

Islands indicated that the VIBIR has declined to take action

pending the outcome of this and other lawsuits. Oral Arg. Tr.

23, 28. Hence, the record presents us with a real possibility

that the Virgin Islands will never seek to collect the disputed

taxes.5

The causes of action that Appellants have pressed

against the Virgin Islands in our Court are waived, and in any

5

Our law in two related contexts bolsters our conclusion that

Appellants‟ claim is not ripe. Under the Administrative

Procedure Act, 5 U.S.C. § 500 et seq., courts generally cannot

compel an agency to enforce laws that Congress has charged

it with enforcing. See Heckler v. Chaney, 470 U.S. 821, 832

(1985) (“[A]n agency‟s decision not to take enforcement

action should be presumed immune from judicial review

. . . .”). And, under the Tax Anti-Injunction Act, courts

generally cannot enjoin the collection of disputed taxes. See

I.R.C. § 7421(a).

12

event their claim is not ripe in the unique context of this case.

We therefore affirm the District Court‟s dismissal of

Appellants‟ claim against the Virgin Islands.

B. Mandamus Petition Concerning Jurisdiction

over Virgin Islands Tax Matters

We also must determine the appropriate forum for

Appellants‟ claims against the United States. To repeat, the

District Court held that those claims “fall within the category

of claims” defined by 28 U.S.C. § 1346(a), which governs

certain claims against the United States. Appellants do not

challenge that conclusion. The proper venue for § 1346(a)

claims is, with exceptions not relevant, “in the judicial district

where the plaintiff resides.” Id. § 1402(a). The District Court

therefore transferred these claims to the District Court for the

Southern District of Florida, where the Birdmans and the

Hirsches live. See id. § 1406(a) (permitting district courts to

transfer cases to the proper venue). It denied Appellants‟

motion to certify an interlocutory appeal of this venue transfer

order pursuant to 28 U.S.C. § 1292(b).

Appellants petition us for a writ of mandamus to

compel the V. I. District Court to decide these claims. Under

48 U.S.C. § 1612(a), they maintain, no other trial court has

subject matter jurisdiction.

“The writ of mandamus is a drastic remedy that a court

should grant only in extraordinary circumstances in response

to an act „amounting to a judicial usurpation of power.‟”

Hahnemann Univ. Hosp. v. Edgar, 74 F.3d 456, 461 (3d Cir.

1996) (quoting Will v. United States, 389 U.S. 90, 95 (1967)).

For the writ to issue, the petitioner must have no other

adequate means to attain the relief sought, and the right to the

writ must be clear and indisputable. United States v. Higdon,

638 F.3d at 245 (citing Cheney v. United States Dist. Court

13

for D.C., 542 U.S. 367, 380-81 (2004)). “Even when these

prerequisites are met, however, the issuance of a writ is

„largely discretionary.‟” Id. (quoting Hahnemann Univ.

Hosp., 74 F.3d at 461).

We have established that “a writ of mandamus may

issue to compel a district court to vacate an order transferring

a case to another district.” In re United States, 273 F.3d 380,

385 (3d Cir. 2001) (issuing writ and citing three prior cases in

which we issued the writ for that purpose). Thus,

“„[m]andamus is . . . the appropriate mechanism for

reviewing an allegedly improper transfer order.‟” Id.

(quoting Sunbelt Corp. v. Noble, Denton & Assocs., 5 F.3d

28, 30 (3d Cir. 1993)).

Appellants‟ petition for a mandamus writ requires that

we construe the terms of the Revised Organic Act of the

Virgin Islands, 48 U.S.C. § 1541 et seq. It “is the Virgin

Islands‟ equivalent of a constitution, and as such, it is the

body of law that defines the jurisdictional boundaries of the

Virgin Islands courts.” Brow v. Farrelly, 994 F.2d 1027,

1032 (3d Cir. 1993) (citations omitted). In particular, it

defines the jurisdiction of the V. I. District Court, which

Congress established pursuant to Article IV, § 3 of the United

States Constitution. See Callwood v. Enos, 230 F.3d 627, 631

(3d Cir. 2000).

Prior to 1984, the Revised Organic Act provided

considerable overlap between the jurisdictions of the District

Court and the Territorial Court (now the Superior Court) of

the Virgin Islands. “„[W]hen Congress acted to establish the

District Court of the Virgin Islands, it established it as a court

of original and general jurisdiction.‟” Edwards v. HOVENSA,

LLC, 497 F.3d 355, 358 (3d Cir. 2007) (quoting Carty v.

Beech Aircraft Corp., 679 F.2d 1051, 1055 (3d Cir. 1982)).

“Under this jurisdictional framework, the District Court of the

14

Virgin Islands heard the majority of cases brought in the

Virgin Islands, whether those cases were brought under

federal law or local law, civil law or criminal law.”

Callwood, 230 F.3d at 630. Hence, we resolved numerous

disputes about the overlap in jurisdiction between the District

Court and the Territorial Court. See, e.g., Excavation Constr.,

Inc. v. Quinn, 673 F.2d 78, 80-82 (3d Cir. 1982); Pan Am.

World Airways, Inc. v. Duly Authorized Gov’t of V.I., 459

F.2d 387, 390-91 (3d Cir. 1972).

In 1984, Congress amended the Revised Organic Act

and refashioned the jurisdiction of the V. I. District Court.

Pub. L. No. 98-454, 98 Stat. 1732. “By virtue of these

amendments, the District Court now possesses the jurisdiction

of a[n Article III] „District Court of the United States,‟”

though it remains an Article IV Court. Parrott v. Gov’t of

V.I., 230 F.3d 615, 619 (3d Cir. 2000). The District Court

continued to have jurisdiction concurrent with the Territorial

Court. However, the Virgin Islands legislature could now

divest the District Court of jurisdiction over certain local

actions, see Estate of Thomas Mall, Inc. v. Territorial Court

of V.I., 923 F.2d 258, 263-64 (3d Cir. 1991), and did so in

1990, Brow, 994 F.2d at 1034. In effect, the relationship

between the District Court and the Superior (formerly

Territorial) Court, both of which are Article IV courts, now

somewhat resembles the relationship between Article III

federal district courts and state courts. See Edwards, 497

F.3d at 359; Parrott, 230 F.3d at 621.

Congress‟s 1984 amendments included the

jurisdictional language at issue in our case, which has not

been amended since.

The District Court of the Virgin Islands shall

have the jurisdiction of a District Court of the

United States, including, but not limited to, the

15

diversity jurisdiction provided for in section

1332 of Title 28, and that of a bankruptcy court

of the United States. The District Court of the

Virgin Islands shall have exclusive jurisdiction

over all criminal and civil proceedings in the

Virgin Islands with respect to the income tax

laws applicable to the Virgin Islands, regardless

of the degree of the offense or of the amount

involved . . . .

48 U.S.C. § 1612(a) (emphasis added). The parties agree that

this is a “proceeding[] . . . with respect to the income tax laws

applicable to the Virgin Islands.” Id. Appellants thus reason

that the V. I. District Court has “exclusive jurisdiction” over

this case as against all other courts. In particular, they assert,

the District Court for the Southern District of Florida lacks

jurisdiction. The United States, which opposes the

mandamus petition, counters that the “exclusive jurisdiction”

language operates only against Virgin Islands local courts.6

Thus, the District Court for the Southern District of Florida

would have jurisdiction to resolve these claims.

Our inquiry into the meaning of a statute begins with

its plain language. See Conn. Nat’l Bank v. Germain, 503

U.S. 249, 253-54 (1992). The grant of “exclusive

jurisdiction” here applies to “all criminal and civil

proceedings in the Virgin Islands with respect to the income

tax laws applicable to the Virgin Islands.” 48 U.S.C.

§ 1612(a) (emphasis added). A suit relating to Virgin Islands

income tax pending outside of the Virgin Islands would not

be a “proceeding[] in the Virgin Islands,” and “exclusive

6

“Local courts” include the Superior Court and the Supreme

Court of the Virgin Islands. See V.I. Code Ann. tit. 4, § 2.

16

jurisdiction” would not apply.7 In other words, the phrase “in

the Virgin Islands” provides a geographic limitation on the

grant of exclusive jurisdiction, but the V. I. District Court‟s

jurisdiction is “exclusive” only against other courts “in the

Virgin Islands.” See Thorstenn v. Barnard, 842 F.2d 1393,

1396 (3d Cir. 1987) (en banc) (“[The V. I. District Court] was

created by an act of Congress and exercises exclusive federal

jurisdiction in that Territory under the Revised Organic Act,

48 U.S.C. § 1612.” (emphasis added)).

The presumption against superfluities reinforces this

reading of the statutory language. “[W]hen interpreting a

statute, courts should endeavor to give meaning to every word

which Congress used and therefore should avoid an

interpretation which renders an element of the language

superfluous.” Rosenberg v. XM Ventures, 274 F.3d 137, 141

(3d Cir. 2001). Appellants suggest no use for the phrase “in

the Virgin Islands” beyond its use as a geographic qualifier,

and we can conceive of none. As the District Court

recognized, Appellants‟ construction of § 1612(a) would

7

Other statutes bestowing “exclusive jurisdiction” on a court

lack such language. For example, the United States Supreme

Court has “original and exclusive jurisdiction of all

controversies between two or more States.” 28 U.S.C.

§ 1251(a). Without any limitation on that grant of exclusive

jurisdiction, the Court held that jurisdiction was proper in no

other court. Mississippi v. Louisiana, 506 U.S. 73, 77-78

(1992); see also Pentax Corp. v. Myhra, 72 F.3d 708, 711

(9th Cir. 1995) (affirming that the district court lacked

jurisdiction where the statute provided without geographic

qualification that “the Court of International Trade shall have

exclusive jurisdiction”).

17

contain no geographic qualifier and thus would render part of

the statute superfluous.

Neighboring provisions of the Revised Organic Act

also show that the District Court‟s “exclusive jurisdiction”

over Virgin Islands tax matters is limited to proceedings vis-

à-vis local courts. Sections 1611, 1612, and 1613 of Title 48

each concern the jurisdiction of the V. I. District Court in this

context. In particular, “[t]he legislature of the Virgin Islands

may vest in the [local] courts . . . jurisdiction over all causes

in the Virgin Islands over which any court established by the

Constitution and laws of the United States does not have

exclusive jurisdiction.” 48 U.S.C. § 1611(b).

Correspondingly, without a grant of “exclusive jurisdiction”

in § 1612(a), the Virgin Islands legislature could vest

jurisdiction over Virgin Islands tax matters in local courts.

Cf. Charles Dowd Box Co. v. Courtney, 368 U.S. 502, 507-08

(1962) (“Concurrent jurisdiction has been a common

phenomenon in our judicial history, and exclusive federal

court jurisdiction over cases arising under federal law has

been the exception rather than the rule.”). Moreover, local

court jurisdiction appears to be disfavored insofar as the

Virgin Islands tax code “mirrors” the United States federal

tax code. See Abramson Enters., Inc. v. Gov’t of V.I., 994

F.2d 140, 142 (3d Cir. 1993).

The legislative history of the 1984 amendments to the

Revised Organic Act further bolsters our interpretation of

§ 1612(a). The Senate record reiterates that “the income tax

laws applicable to the Virgin Islands are the provisions of the

Internal Revenue Code.” 130 Cong. Rec. 23,782, 23,789

(daily ed. Aug. 10, 1984). Thus, “uniformity of interpretation

requires that questions involving the interpretation of those

laws be litigated only in the Federal courts,” plural. Id. That

Congress meant “Federal courts” as opposed to local courts is

apparent in what follows: “This provision appears to be

18

necessary in view of the characterization of the income tax

laws of the Virgin Islands as a local Territorial tax which is

reviewable in the district court only by virtue of local

legislation.” Id. (citing Dudley v. Comm’r, 258 F.2d 182 (3d

Cir. 1958)). The Virgin Islands income tax is analogous to a

federal tax; thus, the Virgin Islands local courts lack

jurisdiction.8

For these reasons, we hold that the District Court of

the Virgin Islands has “exclusive jurisdiction” over

proceedings “with respect to the income tax laws applicable

to the Virgin Islands” only as against local courts in the

Virgin Islands. 48 U.S.C. § 1612(a). The contested language

is a division of jurisdiction in favor of the federal courts, in

contrast to local courts, with respect to Virgin Islands tax

cases. Because the clause “proceedings in the Virgin Islands”

has this meaning when read in its full context, it permits the

transfer of cases brought in the Virgin Islands to other federal

courts.

Appellants do not dispute the conclusion that if the

District Court for the Southern District of Florida has

jurisdiction, then the general venue rule of 28 U.S.C.

§ 1402(a) applies. See 48 U.S.C. § 1614(b) (“Where

appropriate, the provisions of . . . Title 28 . . . shall apply to

the [V.I.] district court . . . .”). Under § 1402(a), the only

8

The same legislative history states that Congress patterned

the tax provision of § 1612(a) after a similar provision in the

Organic Act of Guam. See 48 U.S.C. § 1421i(h)(1); Gov’t of

Guam v. Superior Court of Guam, 998 F.2d 754, 755 (9th Cir.

1993). It appears that no court has determined whether

district courts outside of Guam have jurisdiction over Guam

tax disputes.

19

proper venue for this action is the Southern District of

Florida. The District Court‟s transfer of this dispute to that

District thus was not “a judicial usurpation of power, or a

clear abuse of discretion,” so mandamus should not issue.

Cheney, 542 U.S. at 380 (citations and internal quotation

marks omitted). Accordingly, we deny Appellants‟ petition

for a writ of mandamus.

It is possible that the multiple courts possessing

jurisdiction over Virgin Islands tax law may reach conflicting

conclusions. The same possibility inheres in the current

jurisdictional structure of federal tax law. In that context,

courts “temper the independence of the analysis in which

[they] engage by according great weight to the decisions of

the other circuits on the same question.” Wash. Energy Co. v.

United States, 94 F.3d 1557, 1561 (Fed. Cir. 1996). They do

so because “the need for uniformity of decision applies with

special force in tax matters.” Id. We presume that our sister

courts will exercise the same restraint in addressing questions

of Virgin Islands tax law.

IV. Conclusion

Appellants stated no cause of action against the Virgin

Islands in the District Court, so the causes of action they

allege on appeal are waived. In the alternative, any such

claim is not ripe, as the Virgin Islands has taken no

administrative action against Appellants regarding the tax

year 2006, tentative or otherwise.

The District Court of the Virgin Islands has “exclusive

jurisdiction” over V.I. tax cases only vis-à-vis V.I. local

courts. Thus, it may transfer those cases to other United

States district courts, provided that the other requirements of

jurisdiction and venue are satisfied.

20

We therefore affirm the order of the District Court

dismissing Appellants‟ claim against the Virgin Islands and

transferring venue of Appellants‟ claims against the United

States to the District Court for the Southern District of

Florida. We deny Appellants‟ petition for a writ of

mandamus.

21