Petition for Writ of Certiorari — Louis Milton Willis, Petitioner v. Territory of the Virgin Islands

NO.

SUPREME COURT OF THE UNITED STATES

OF AMERICA

LOUIS MILTON WILLIS,

Petitioner,

Vv.

PEOPLE OF THE VIRGIN ISLANDS,

Respondent.

ON PETITION FOR WRIT OF CERTIORARI TO THE

SUPREME COURT OF THE VIRGIN ISLANDS

PETITION FOR WRIT OF CERTIORARI

KELECHUKWU CHIDI ONYEJEKWE

Appellate Public Defender

Counsel of Record

Office of the Territorial Public Defender

P.O. Box 6040

St. Thomas, USVI 00804

Telephone: 340774 8181

Facsimile: 340774 3052

Counsel for Petitioner

QUESTION PRESENTED FOR REVIEW

48 U.S.C. § 1397 provides as follows. “The income-tax laws in force in the

United States of America and those which may hereafter be enacted shall be held to

be likewise in force in the Virgin Islands of the United States.” Congress limits the

territorial legislature's power to vest jurisdiction in local courts to those “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).

With specific regard to litigation regarding income tax crimes, 48 U.S.C. §

1612(a) provides that “(t]he 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, except the ancillary laws relating to the

income tax enacted by the legislature of the Virgin Islands.” This Court has declared

repeatedly that the meaning of “income” is expansive, including all accession to

wealth. See Helvering v. Bruun, 309 U.S. 461, 84 L. Ed. 864, 60 S. Ct. 631 (1940).

“Income” for states and governmental entities, as settled by decisions of the Court,

includes revenues obtained from gross receipts taxes. See, e.g., CSX Transp., Inc. v.

Ala. Dep't of Revenue, 562 U.S. 277, 284-85, 131 S. Ct. 1101, 1106 (2011); Aloha

Airlines v. Dir. Of Taxation, 464 U.S. 7 (1983).

Despite these clear jurisdictional provisions and the expansive sense of

income tax declared and settled by the decisions of this Court, the Virgin Islands

Supreme Court concluded that “the territorial gross receipts tax does not constitute

an ‘income tax law applicable to the Virgin Islands’ within the meaning of §

1612(a).” The question presented for this Court’s review is:

Whether the plain language of § 22 of the Revised Organic Act of 1954

[48 U.S.C. § 1612(a)] establishing that “the District Court of the Virgin

Islands shall have exclusive jurisdiction over all criminal

...proceedings in the Virgin Islands with respect to the income tax laws

applicable to the Virgin Islands” also vests the same jurisdiction in the

Superior Court of the Virgin Islands, a local court created by the local

legislature, in the case of gross receipts taxes.

LIST OF PARTIES

All parties to this proceeding are named in the caption of the case.

ii

TABLE OF CONTENTS

Page

TABLE OF CONTENTS

QUESTION PRESENTED FOR REVIEW ..0........cccsssssssssssssssssssssssssesssussssessesesseseavecrnessavecnaceses i

LIST OF PARTIES oon... ccesceessecssssssssssesssssscssesssecssesasssercenserscsssssesssussseseueseurearecarensessessaranueeneesess ii

TABLE OF CONTENTS ...00... oc ccseccesssssssssssesssecsecssscsscssessssssvcssscssessvssasssusssecaveceesensecneesessaeseasense iii

TABLE OF AUTHORITIES ”

OPINIONS BELOW oo... secseessssscssessesssssescsscsssecssesessessnsessusssercssuessasessucsssesenscesavensessaasenserenasense

STATEMENT OF THE BASIS OF THE COURT’S JURISDICTION ..........cccccccssessesecsseneess 2

CONSTITUTIONAL AND STATUTORY PROVISIONS INVOLVED.....

US Const. Art. IV, § 3, C12. Territory or property of the United States. 0.00.0... 4

STATEMENT OF CASE SETTING OUT MATERIAL FACTS o.u.....sccsccccscssccscsscsecseeseeseesenes 6

A. The Revised Organic Act of the Virgin Islands and adoption of federal tax law as a

local territorial tax system ..............sceccecsssssssessessessessesseessessessessessessessesecsersavsavesesavesuecueaueaueaueceed 6

B. The Superior Court of the Virgin Islands..............0..0.ccccccccsssssssssessessssssersssesssesseesssensens 7

C. Virgin Islands Supreme Court.............cccsscccscesssssssssssssssessessessesscserserserentsavensensensensensess 1]

D. Concurring Opinion. ...0.........c.ecccescessesessesssssesssssssssesessessesccsssncesousscsnesecsecueaecarsecarserseees

REASONS FOR ALLOWANCE OF THE WRIT ;

I. IN THE REVISED ORGANIC ACT CONGRESS PLAINLY VESTED

EXCLUSIVE JURISDISCTION IN THE DISTRICT COURT OF THE VIRGIN

ISLANDS .......ssssesssssseesssesssssessssessenssssnsssssuseceansescavessossessnsesssssesssscessasessaseessasecsauecssavessaseesesveese 14

A. Congress explicitly vested jurisdiction over tax crimes in the District Court of

the Virgin Islands in clear lamguage...................ccscscessessssssessessessssessesscsssussrsacsessesseseeneaneanes 14

B. Congress employed “shall” and “all” to make even louder and clearer its clear

command of jurisdiction in the District Court...............ccccccccsccsssssesssscsssessesesssssssesesees 15

C. Since 1920 at the latest, this Court has construed “income” and “tax”

increasingly expansively to include local gross receipts taxes within “income tax laws

applicable to the Virgin Islamds.” .......0.........cccccsssssssessesesssssesessccessesssnecsessesssessussessesssscsscsses 16

D. Two circuit courts of appeals have held that the same plain language in two

Revised Organic Acts vests jurisdiction in the District Court. The Opinion of the

Virgin Islands Supreme Court is in conflict with them................00..cccccccssessesssesssectseseeeees 21

E. The Supreme Court of the Virgin Islands erred in utilizing inadequate

legislative history, unsupported by broad congressional tax policy towards the Virgin

iii

Il. THE CONVENANT TO ESTABLISH A COMMONWEALTH OF NORTHERN

MARIANAS ISLANDS, 48 U.S.C. § 1801, DOES NOT VEST EXCLUSIVE

JURISDICTION OVER TAX CRIMES IN THE DISTRICT COURT, PROVIDES FOR

IMPOSITION OF TAXES BY LOCAL LAW. WHEN CONGRESS WANTS TO VEST

JURISDICTION IN LOCAL COURTS, IT KNOWS HOW TO DO SO............cccceecee 28

III. THE CRIMES CHARGED IN THIS CASE MIRROR VIOLATIONS OF THE

INCOME TAX PROVISIONS SET FORTH IN THE INTERNAL REVENUE CODE

FURTHER DEMONSTRATING THE DISTRICT COURT'S CLEAR EXCLUSIVE

JURISDICTION .........csccssccsssesssesssecssscescsusessousessenscasesssnsesssusrssvensscescsuessessensonsessssesseaseneaeneseess 29

IV. THIS COURT HAS HELD REPEATEDLY THAT A TERRITORIAL COURT

MUST OBSERVE SETTLED CONSTITUTIONAL AND STATUTORY NORMS.......34

CONCLUSION ...0....eseccescssssssssseressesceeersorsseressceseersersnssessereesenseauencessorsaseneseesessencessaceasessnesseseeneee

PROOF OF SERVICE

iv

TABLE OF AUTHORITIES

Page(s)

Cases

Aloha Airlines v. Dir. Of Taxation, 464 U.S. 7 (1983) ..cccccscssssssscssssscsssessessssssesscece 20

Aloha Airlines v. Dir. of Taxation, 464 U.S. 7, 11, 104 S. Ct. 291, 294 (1983).....20

Aloha Airlines v. Dir. of Taxation, 464 U.S. 7, 13-14, 104 S. Ct. 291, 295 (1983)

seeneaeveessseesecencnersssssseacasecenesessnssuqessssonsesssenensessasssssenuscesesssssessssesnsecsssesssssasseavecrers 20, 21

Appalachian States Low-Level Radioactive Waste Comm'n v. O'Leary, 93 F.3d

103, 109 1.6 (3d Cir. 1996)......ceessessessessscssecscsscssessssssssesssssssessssssseneresareceseeeeseeaes 16

Barnard v. Thorstenn, 489 U.S. 546, 558-59, 109 S. Ct. 1294, 1302-03 (1989) ... 34

Birdman v. Office of the Governor, 677 F.3d 167, 176 (3d Cir. 2012) .....s.ccsesse-e 22

Cannon v. Univ. of Chi., 441 U.S. 677, 699, 99 S. Ct. 1946, 1958 (1979)............. 17

Comm'r of Internal Revenue v. Glenshaw Glass Co., 348 U.S. 426, 99 L. Ed. 483,

75S. Ct. 473 (1955)... eceesecscsscesssseseescsessessssssessssssssssscsusssscscessusesarsususstsessecnensaces 17

CSX Transp., Inc. v. Ala. Dep't of Revenue, 562 U.S. 277, 284-85, 131 S. Ct. 1101,

1106 (2OLD) ose ecesesessesssscstsssscssssssesssscsssscsececsssusessesusursesecnenscnsatsesaeaecusaeeessess

Eisner v. Macomber, 252 U.S. 189, 207, 40 S. Ct. 189, 193 (1920) .............. .

Food Mktg. Inst. v. Argus Leader Media, 139 S. Ct. 2356, 2364 (2019)

Forbes v. Maddox, 339 F.2d 387 (1964)......ccccccsccccsssssssesssescssecseee

Forbes v. Maddox, 339 F.2d 387, 388 (Oth Cir. 1964). .....cssscssssssscsssseseseeseseseseees 24

Gov't of Guam v. Superior Court of Guam, 998 F.2d 754, 755 (9th Cir. 1993) .... 23

Guam v. Olsen, 431 U.S. 195, 201, 97 S. Ct. 1774, 1778 (1977) ...c.ccscsscsesseceseeseees 34

Gulf Offshore Co., Div. of Pool Co. v. Mobil Oil Corp., 453 U.S. 473, 478, 101 S.

Ct. 2870, 2875 (1981)... eeeescsessesssesscsssscsesessesssessessssvsssesscsssassucessesesesessessenveataaeesers 15

Helvering v. Bruun, 309 U.S. 461, 84 L. Ed. 864, 60 S. Ct. 631 (1940)... 17

Hennepin Cty. v. Fannie Mae, 742 F.3d 818, 822 (8th Cir. 2014) 0... eeeeeeeeeeeee 16

Hughes Aircraft Co. v. Jacobson, 525 U.S. 432, 438 (1999) oc cccesssssseceeeeseeeeee 14

Kepner v. United States, 195 U.S. 100, 133, 24 S. Ct. 797, 806 (1904)... 33

Knott v. McDonald's Corp., 147 F.3d 1065, 1067 (9th Cir. 1998)... .eeseseseeeeeeee 16

Lopez v. Davis, 531 U.S. 230, 241, 121 S. Ct. 714, 148 L. Ed. 2d 635 (2001)... 15

People of the VI. v. Willis, 61 V.1. 60, 70 (Super. Ct. 2014)........c.csccscsssessesseeseeees

Rosemond y. United States, 134 S. Ct. 1240, 1248 (2014) ween we

Serra v. Mortiga, 204 U.S. 470, 474, 27 S. Ct. 343, 345 (1907)

Willis v. People of the V.1., 2019 V.I. Supreme LEXIS 38, at *19 (July 11, 2019) 25

Willis v. People of the V.1., 2019 V.I. Supreme LEXIS 38, at *19-20 (July 11,

v

2019). ececcccccescsscssecsscsscssessssessessessescsscssesssacsessessesssscsaesacsessesseesseeecesesesesecsensenseess 12

Willis v. People of the V.I.,2019 V.I. Supreme LEXIS 38, at *31 (July 11, 2019) 13

Willis v. People of the V.I., 2019 V.I. Supreme LEXIS 38, at *3-4 (July 11, 2019) 9

Willis v. People of the Virgin Islands, 2019 VI 25, 2019 V.I. Supreme LEXIS 38,

at *1, 2019 WL 3291616. ..... ce cececseceesesseessscecsesssessesaceaseoscaseasesacsceeesseesceseaeeacees 3

Statutes

AB U.S.C. § 1801 woe cceessesscsecsscsscsssesesscssececsecseeseseecsscesesscsecseeeensesssesnsceseesencesaees

§ 22 of the Revised Organic of 1954

14 VLC. § LL cee eeccscsescessceeceevescescsenessesseseses

14 V.LC. § 551

14 V.LC. §11........

18 U.S.C. § 371

18 U.S.C. § 371 (1948) ..... ce cecececsscscestesncentessesssesscsseeeeesssaseesseeseessenseres

26 U.S.C. § 7201

26 U.S.C. § 7202

26 U.S.C. § 7206 wees

26 U.S.C. § 931 (note)... eee ceceeeseceeceseceeeseeeseceeeeneesessasenseneessessessassaseeeseessecnseees

26 U.S.C.S. § 7201

26 U.S.C.S. § 7202

26 U.S.C.S. § 7206

28 U.S.C. § 1421i(h)(2)

33 V.LC § 1523 wocccececccceeeeseeees

33 V.LC. § 1522

33 V.LC. § 1523

33 V.LC. § 1525

33 V.LC. § 1525(2)

33 V.LC. §1523............

33 V.LC. §1525(2)

AB U.S.C. § 1397 ooceeccecscsssssecsecseessssnssssesscssssscsassascoecesesssensesnsenseseeseeeaeeesens

48 U.S.C. § 1421]i.........

48 U.S.C. § 1421i(h)....

48 U.S.C. § 1424(a)......

48 U.S.C. § 1611(b)......

48 U.S.C. § 1612..........

AB U.S.C. § 1612(a).... ce ceecccsecseessessessesscsscescesasseccssonecessoeseeseesecseeeesceseerenseeeeaoes

AB ULS.C. § 1801 oo. cccccccccsseseccesecessecsscesececsecsnsesseessscesseesseeenesenneeseeees

48 U.S.C. § 1801 (note).........cccccscessceesensescesssescceccessesscsssaseneesnseseseesseseeeesersereeseusas

vi

48 U.S.C. § 1822......

48 U.S.C. § 734........

48 U.S.C. § 1421i

AB ULS.C. § 1801 woe cc ccceccecensessenesecsnesesssececessessesenseecsassnesessecseensotseeeseneersessaness

48 USC §1612 oo eccsccsssessesscsscesceccessesessseesenscnsseecsressecssssseeseaseseaseaceneeeseoesonsens

49 U.S.C. § 1513 (a).....0....

49 U.S.C. § 11501(b) (4)

Haw. Rev. Stat. § 239-6 oo... cescscecssscesssecesseecessecesseeeesensesceeensseeeescseseesseeeseseeesaee

Other Authorities

130 Cong. Rec. $23, 789 (daily ed. Aug. 10,1984) occ eeessseesessseceseessenesseanere 33

U.S. Congress, Senate, REVISION OF THE ORGANIC ACT OF THE VIRGIN

ISLANDS, Committee on Interior and Insular Affairs, Report No. 1271 (to

Accompany S. 3378), 83d Cong., 2d sess., 1954, S. Rep. 1271, 4-5. wee 26

Constitutional Provisions

Const. Art. IV, § 3, C12 o...ccecccccscsessssesesssseececceeseesereseeneaceesasenseaseeesseersasseseseeans 4

Vii

IN THE

SUPREME COURT OF THE UNITED STATES

OF AMERICA

PETITION FOR WRIT OF CERTIORARI

Petitioner respectfully prays that a writ of certiorari issues to review the

judgment below.

OPINIONS BELOW

The Supreme Court of the Virgin Islands filed its Order and Opinion on July 11,

2019. It is published officially and unofficially as Willis v. People of the Virgin

Islands, 2019 VI 25, 2019 V.I. Supreme LEXIS 38, at *1, 2019 WL 3291616. The

Opinion appears in Appendix A. The Superior (trial) Court's October 1, 2015

Judgment and Commitment appears in Appendix B. It is not published. The

Amended Information appears in Appendix C. The trial court’s instructions to the

jury appear in Appendix D.

STATEMENT OF THE BASIS OF THE COURT’S JURISDICTION

The jurisdiction of this Court is invoked pursuant to 28 U.S.C. § 1260 and

Rules 10(b) & (c) of this Court. The Opinion of the Supreme Court of the Virgin

Islands was entered on July 11, 2019. That territorial court decided an important

federal question in a manner which conflicts with the decisions of two courts of

appeals and in a manner which conflicts with relevant decisions of this Court by

declaring that a territorial gross receipts tax is not an “income tax law applicable to

the Virgin Islands” within the meaning of the Revised Organic Act of the Virgin

Islands. 48 U.S.C. § 1541 et seg. An important federal question is presented where

a territory limits the powers of federal court. See, e.g., Guam v. Olsen, 431 U.S. 195,

196, 97 S. Ct. 1774, 1776 (1977) (“Whether the provision of § 22 of the 1950

Organic Act of Guam that the District Court of Guam...authorizes the Legislature of

Guam to divest the appellate jurisdiction of the District Court under the Act to hear

appeals from local Guam courts, and to transfer that jurisdiction.”); Cf Taylor v.

McKeithen, 407 U.S. 191, 194, 92 S. Ct. 1980, 1982 (1972)(“this petition would

present an important federal question of the extent to which the broad equitable

powers of a federal court....are limited....””).

This Petition is timely. It is filed prior to the expiration of the ninety (90) day

period allowed by Rule 13 of this Court. The Petition was filed on October 9, 2019.

The Virgin Islands legislature’s power to vest jurisdiction in a local court

extends only to “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). But §1612(a) provides that “[t]he 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.” How does the Superior Court, a local court created by the local legislature,

exercise jurisdiction over criminal tax charges against Petitioner, when § 1612(a)

explicitly vests jurisdiction in the District Court?

The Virgin Islands Supreme Court concluded that because gross receipts taxes

are not “tax laws applicable to the Virgin Islands,” jurisdiction over tax crimes is

vested in the Superior Court of the Virgin Islands. Willis v. People of the Virgin

Islands, 2019 VI 25, 2019 V.J. Supreme LEXIS 38, at *1, 2019 WL 3291616. This

calls into question the validity of the plain language of section 22 of the Revised

Organic Act, 48 U.S.C. § 1612, which plainly vests in the District Court “exclusive

jurisdiction over all criminal and civil proceedings...with respect to the income tax

laws applicable to the Virgin Islands.”

CONSTITUTIONAL AND STATUTORY PROVISIONS INVOLVED

US Const. Art. IV, §3, C12. Territory or property of the United States.

The Congress shall have Power to dispose of and make all needful Rules and

Regulations respecting the Territory or other Property belonging to the United

States; and nothing in this Constitution shall be so construed as to Prejudice

any Claims of the United States, or of any particular State.

US Const. Art. IV, § 3, C12

The federal statute interpreted by the Supreme Court of the Virgin Islands is

section 22 of the Revised Organic Act of 1954, involving primarily 48 U.S.C. §

1611-12.

48 U.S.C.S. § 1397. Income tax laws of the United States in force; payment of

proceeds; levy of surtax on all taxpayers

The income-tax laws in force in the United States of America and those which

may hereafter be enacted shall be held to be likewise in force in the Virgin

Islands of the United States, except that the proceeds of such taxes shall be paid

into the treasuries of said islands: Provided further, That, notwithstanding any

other provision of law, the Legislature of the Virgin Islands is authorized to

levy a surtax on all taxpayers in an amount not to exceed 10 per centum of their

annual income tax obligation to the government of the Virgin Islands.

48 U.S.C. § 1397

48 U.S.C. § 1611. District Court of the Virgin Islands; local courts; jurisdiction;

practice and procedure

(a) District Court of the Virgin Islands; local courts. The judicial

power of the Virgin Islands shall be vested in a court of record

designated the “District Court of the Virgin Islands” established by

Congress, and in such appellate court and lower local courts as may

have been or may hereafter be established by local law.

(b) Jurisdiction. The legislature of the Virgin Islands may vest in the

courts of the Virgin Islands established by local law 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. Such jurisdiction shall be subject to the concurrent

jurisdiction conferred on the District Court of the Virgin Islands by

section 22(a) and (c) of this Act [48 U.S.C. § 1612(a) and (c)].

(c) Practice and procedure. The rules governing the practice and

procedure of the courts established by local law and those prescribing

the qualifications and duties of the judges and officers thereof, oaths

and bonds, and the times and places of holding court shall be governed

by local law or the rules promulgated by those courts.

48 U.S.C. § 1611

48 U.S.C. § 1612. Jurisdiction of District Court

(a) Jurisdiction. 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 diversity jurisdiction provided for in section 1332 of title 28, United

States Code, 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, except the ancillary laws relating to the income tax

enacted by the legislature of the Virgin Islands. Any act or failure to act with

respect to the income tax laws applicable to the Virgin Islands which would

constitute a criminal offense described in chapter 75 of subtitle F of the Internal

Revenue Code of 1954 [1986] [26 U.S.C. §§ 7201 et seq.] shall constitute an

offense against the government of the Virgin Islands and may be prosecuted in

the name of the government of the Virgin Islands by the appropriate officers

thereof in the District Court of the Virgin Islands without the request or consent

of the United States attorney for the Virgin Islands, notwithstanding the

provisions of section 27 of this Act [48 U.S.C. § 1617].

48 U.S.C. § 1612

STATEMENT OF CASE SETTING OUT MATERIAL FACTS

A. The Revised Organic Act of the Virgin Islands and adoption of federal

tax law as a local territorial tax system

Article IV, section 3 of the United States Constitution gives to Congress the

plenary power over territories. The Revised Organic Act (“ROA”) of the Virgin

Islands as amended (48 U.S.C. §§ 1541-1645) establishes a system of government

for the Virgin Islands. 48 U.S.C. § 1611(a) provides that the “judicial power of the

Virgin Islands shall be vested in a court of record designated the District Court of

the Virgin Islands established by Congress, and in such appellate court and lower

local courts as may have been or may hereafter be established by local law.”

Further, 48 U.S.C. § 1611(b) provides that the “legislature of the Virgin Islands

may vest in the courts of the Virgin Islands established by local law 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.”

ROA also contains provisions that govern the adoption of an income tax

system for the Virgin Islands. 48 U.S.C. § 1397 provides that the “income-tax

laws in force in the United States of America and those which may hereafter be

enacted shall be held to be likewise in force in the Virgin Islands of the United

States.” § 1397’s provision that the Virgin Islands shall adopt the United States tax

laws as a local territorial income tax constitutes what is commonly referred to as a

"mirror code” system. Congress has described such systems, which are implemented

in several insular areas, including Guam, and Puerto Rico, as "the provisions of law

. .. Which make the provisions of the income tax laws of the United States .. . in

effect in a possession of the United States." 26 U.S.C. § 931 (note); see 48 U.S.C. §

1421i (Guam); 48 U.S.C. § 1397 (Virgin Islands); 48 U.S.C. § 734 (Puerto Rico).

To implement § 1397, the Virgin Islands legislature enacted in Subchapter II, title

33 of the Virgin Islands Code, a comprehensive plan for procedure and

administration of the mirror image income tax system. It is derived from Subtitle F

of the Internal Revenue Code of 1954. It provides for judicial review in the district

court of the Virgin Islands of asserted deficiencies, 33 V.ILC. §§ 942, 943, 944,

and 1931(1). This appears to mirror review in the United States Tax Court. 26 U.S.C.

§§ 6212, 6213. It permits refund suits in 33 V.I.C. § 1692, appearing to mirror 26

U.S.C. § 7422. Nowhere does the Virgin Islands legislature vest jurisdiction over

income tax matters or crimes in the local courts created by the Virgin Islands

legislature. 33 V.ILC. passim.

B. The Superior Court of the Virgin Islands

From 2000 to 2006, Louis Milton Willis (“Petitioner”) served as the Director

of the Virgin Islands Bureau of Internal Revenue (“BIR”). From 2002 to 2008,

during his tenure as Director, and shortly after his term ended —Petitioner furnished

false tax clearance letters to the owner of Balbo Construction, Inc., a Willis’ friend.

Balbo’s owner was not in fact current on his payment of gross receipts taxes. The

purpose of BIR’s tax clearance letter is to ensure that only tax-paying businesses

qualify for a business license issued by the Virgin Islands Department of Licensing.

Petitioner’s motion to dismiss at the Superior Court contending that the court

lacked subject matter jurisdiction over the case and over the parties was denied.

Section 22 of the Revised Organic Act of 1954 [section 1612(a) of title 48 of the

United States Code], he argued, vests exclusive jurisdiction over tax crimes in the

Congressionally-created District Court of the Virgin Islands. The Superior Court

denied his motion to dismiss in a November 10, 2014 order. People of the V.I. v.

Willis, 61 V.I. 60, 70 (Super. Ct. 2014).

The government of the Virgin Islands charged Willis with: Count I,

conspiracy to evade or defeat tax in violation of 33 V.I.C. § 1522; Count II, aiding

and abetting the willful failure to collect or pay over tax in violation of 33 V.ILC.

§1523 and 14 V.LC. §11; Count III, fraud and false statements in violation of 33

V.L.-C. §1525(2). These crimes mirror the following United States tax crimes: 26

U.S.C. § 7201, Attempt to evade or defeat tax (the local charge is conspiracy to

evade or defeat tax, otherwise the language is identical); 26 U.S.C. § 7202, Willful

failure to collect or pay over tax; and 26 U.S.C. § 7206, Fraud and false statements.

The jury found Petitioner guilty of conspiracy to defeat or evade tax in

violation of 33 V.IL-C. § 1522 (Count I) and aiding and abetting willful failure to

collect or pay over tax pursuant to 14 V.LC. § 11 and 33 V.LC § 1523 (Count 2). As

to Count 3, fraud and false statements in violation of 33 V.I.C. § 1525(2), the jury

returned a “not guilty” verdict. In an October 1, 2015, judgment and commitment,

the Superior Court of the Virgin Islands imposed a sentence of two years in prison.

Willis v. People of the V.I., 2019 V.I. Supreme LEXIS 38, at *3-4 (July 11, 2019).

The United States Department of the Interior, Office of the Inspector General,

published its audit titled COLLECTION OF OUTSTANDING TAXES AND FEES

GOVERNMENT OF THE VIRGIN ISLANDS, REPORT NO. V-IN-VIS-011-2006

(2008). The Department of Interior found that if Petitioner did not issue the tax

clearance letters, the Department of licensing would nevertheless issue the business

licenses, allowing the business to operate lawfully in the Virgin Islands. Here are the

key findings of the Inspector General’s report:

Twenty-two years after the Virgin Islands legislature passed legislation

to prevent tax evasion, we discovered the circumvention of this

legislation and the abuse of power by an official charged with

enforcement of law. DLCA’s issuance of business licenses without tax

clearance letters and BIR’s issuance of clearance letters when

delinquent taxes were owed rendered the tax evasion legislation

ineffective and further undermined the integrity of GVI’s tax collection

efforts.

(Id. at 18.) The audit continues:

We are told that DCLA, acting alone and contrary to law, established

an internal policy that allows only 15 working days for receipt of a tax

clearance letter before DCLA will issue a license anyway. This practice

creates an environment that at best fails to prevent tax evasion and at

worst encourages and abets it.

We found eight instances where taxpayers obtained current business

licenses without obtaining a tax clearance letter from BIR and three

additional instances, where despite unfavorable tax clearance letters

from BIR, taxpayers were granted current business licenses. In one of

these instances, the applicant received a business license after receiving

an unfavorable letter from BIR for $3.5 million in unpaid gross receipts

and withholding taxes.

(Id. at 19.) Nobody testified--and no documentary evidence exists--that Petitioner

knew or had reason to know that it is criminal to issue a tax clearance letter or that

issuing one could possibly defeat any tax. The federal audit accused him of “abuse

of power” but not criminal conduct. Id. at 19. With the false tax clearance letters but

without consideration of materiality based on the federal audit, Petitioner was

charged and convicted.

Petitioner filed a timely notice of appeal. No issue of Petitioner’s conviction

is raised in this Petition, except as follows. First, the texts of the local crimes under

the Virgin Islands Code are presented along with those of the United States Code.

10

The Court may notice that they mirror one another. The instructions to the jury,

Appendix D, speaks for itself. Second, “as the sources we are aware of demonstrate,

the common law could not have conceived of ‘fraud’ without proof of materiality,”

this Court wrote. Neder v. United States, 527 U.S. 1, 22, 119 S. Ct. 1827, 1840

(1999). From the instructions, the Court may observe that Petitioner was charged

with crimes involving fraud without considerations of materiality. The Court may

further observe that, in conflict with Rosemond v. United States, 572 U.S. 65, 67,

134 S. Ct. 1240, 1243 (2014), Petitioner was charged with aiding and abetting a

crime, but no crime was first committed by another.

C. Virgin Islands Supreme Court

Are territorial gross receipts tax laws “income tax laws applicable to the Virgin

Islands” within the meaning of § 1612(a), prosecutions for which must be

commenced at the District Court of Virgin Islands? The Supreme Court decided that

gross receipt taxes are local tax laws not “income tax laws applicable to the Virgin

Islands” within the meaning of § 1612(a). Therefore, the Supreme Court decided that

the Superior Court had jurisdiction over this case. In reaching this conclusion, the

court relied on the legislative history because of “the long and complicated history

of taxation in the Virgin Islands.” Further, the Court relied primarily on Senator

Lowell Weicker's statements as “dispositive of the question presented.” The Senator

i

stated, “the income tax laws applicable to the Virgin Islands are the provisions of

the Internal Revenue Code...” The Court concludes:

Considering these remarks — (1) that the “income tax laws applicable to the

Virgin Islands” are the provisions of the Internal Revenue Code; (2) that the

purpose of the exclusive jurisdiction provision is to maintain uniformity of

interpretation of those provisions of the Internal Revenue Code; and (3) that

§1612(a) was intended to function “in analogy” to its counterpart in the

Organic Act of Guam-in their proper historical context as described in the

previous decisions of this Court and the Third Circuit, we are compelled to

conclude that in using the phrase “income tax laws applicable to the Virgin

Islands” in §1612(a), Congress intended to refer specifically to the provisions

of the Internal Revenue Code that apply to the Virgin Islands through the

mirror tax system. This conclusion harmonizes the statutory language with

both the stated intentions of Congress in amending §1612(a), and with

Congress' overarching purpose in enacting the 1984 amendments generally:

to give local courts jurisdiction over local law.

Willis v. People of the V.I., 2019 V.I. Supreme LEXIS 38, at *19-20 (July 11,

2019).

D. The Concurring Opinion

The concurring opinion disagrees with the majority’s extensive reliance on

legislative history at the expense of statutory language:

I contend that the majority, while claiming to rely upon the “plain

language” of the statute in question, ignores the actual words of

subsection 22(a) in its analysis and places the focus, instead, almost

exclusively on case law interpretations and on the legislative history, as

if these are the primary means by which the plain meaning of the

statutory language is determined-as opposed to using the legislative

history as providing the context necessary to clarify ambiguous

language in the statute that may be open to interpretation. See Crandon

v. United States, 494 U.S. 152, 158, 110 S. Ct. 997, 108 L. Ed. 2d 132

12

(1990) (recognizing that the entire process of statutory interpretation is

controlled by the presumption that the ordinary meaning of the chosen

words manifests the legislative intent); e.g., In re Sherman, 49 V.I. 452,

456 (V.I. 2008) (noting that, where the plain language of a statute

discloses the legislative intent, the interpretive inquiry is over); see also

United States v. Lanier, 520 U.S. 259, 265 n.5, 117 S. Ct. 1219, 137 L.

Ed. 2d 432 (1997).

Willis v. People of the V.I., 2019 V.I. Supreme LEXIS 38, at *31 (July 11,

2019)(Justice Ive Arlington Swan, concurring).

13

REASONS FOR ALLOWANCE OF THE WRIT

I. IN THE REVISED ORGANIC ACT CONGRESS PLAINLY

VESTED EXCLUSIVE JURISDISCTION IN THE DISTRICT

COURT OF THE VIRGIN ISLANDS

A. Congress explicitly vested jurisdiction over tax crimes in the District

Court of the Virgin Islands in clear language

Under 48 U.S.C. § 1612(a), “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 the District Court

of the Virgin Islands.” The Court's analysis "begins with the language of the

statute," and when "the statutory language provides a clear answer, it ends there as

well." Hughes Aircraft Co. v. Jacobson, 525 U.S. 432, 438 (1999) (quotation

omitted). The “court’s proper starting point lies in a careful examination of the

ordinary meaning and structure of the law itself.” Food Mktg. Inst. v. Argus Leader

Media, 139 S. Ct. 2356, 2364 (2019). “Where, as here, that examination yields a

clear answer, judges must stop.” Jd. “Even those of us who sometimes consult

legislative history will never allow it to be used to “muddy” the meaning of “clear

statutory language.” /d.

The statute’s text and structure are simple. First, under § 1611(b), Congress

bars the local legislature from vesting jurisdiction in a local court unless a court

14

established by Congress, such as the District Court, “does not have exclusive

Jurisdiction.” Second, in § 1612(a), Congress explicitly vests exclusive jurisdiction

in the District Court: “over all criminal and civil proceedings... with respect to the

income tax laws applicable to the Virgin Islands.” The very clear answer is that the

ordinary meaning of “exclusive” vests “exclusive jurisdiction” in the District Court.

With this clear answer, the judges of the Superior Court and of the Supreme Court

of the Virgin Islands should have stopped. “Congress may confine jurisdiction to the

federal courts either explicitly or implicitly.” Gulf Offshore Co., Div. of Pool Co. v.

Mobil Oil Corp., 453 U.S. 473, 478, 101 S. Ct. 2870, 2875 (1981). In this case,

Congress confined jurisdiction to the District Court explicitly.

B. Congress employed “shall” and “all” to make even louder and clearer

its clear command of jurisdiction in the District Court

Congress clearly commands jurisdiction in the District Court by using “shall”

and “all.” §1612(a)’s use of "shall" makes mandatory what follows--- “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.” See Lopez v.

Davis, 531 U.S. 230, 241, 121 S. Ct. 714, 148 L. Ed. 2d 635 (2001) (noting Congress’

“use of a mandatory 'shall' . . . to impose discretionless obligations"). To make its

clear command even louder and clearer, Congress employed “all.” § 1612(a)’s

15

“all” in “over all criminal and civil proceedings in the Virgin Islands...,” means

exactly what it says. When “all” is used before a plural noun such as “all criminal

proceedings with respect to the income tax laws applicable to the Virgin Islands,”

every criminal proceeding with respect to every income tax law applicable to the

Virgin Islands is included. See, e.g., Hennepin Cty. v. Fannie Mae, 742 F.3d 818,

822 (8th Cir. 2014)(“We have determined that the use of "shall" in a statute makes

what follows mandatory ... and that "‘all’ means all.”); Appalachian States Low-

Level Radioactive Waste Comm'n v. O'Leary, 93 F.3d 103, 109 n.6 (3d Cir. 1996)

(“It seems enough that the statute says ‘all’ waste. ‘All’ means ‘all.’”); Knott v.

McDonald's Corp., 147 F.3d 1065, 1067 (9th Cir. 1998) (“In short, "all" means all.”’).

This obvious plain interpretation is further bolstered by contemporary tax decisions

of this Court.

C. Since 1920 at the latest, this Court has construed “income” and “tax”

increasingly expansively to include local gross receipts taxes within

‘4ncome tax laws applicable to the Virgin Islands.”

Since 1920 at the latest, Congress has used, and this Court has construed,

“income” and “tax” expansively to include all accessions to wealth by individuals,

corporation, and states or other governmental entities. See, e.g., Eisner v. Macomber,

252 U.S. 189, 207, 40 S. Ct. 189, 193 (1920). In the Revised Organic Act “income-

tax laws in force in the United States of America ...shall be held to be likewise in

16

force in the Virgin Islands of the United States,” 48 U.S.C. § 1397. Congress was no

doubt aware of the expansive meaning of "income" when it enacted §1612 and

§1397. See Cannon v. Univ. of Chi., 441 U.S. 677, 699, 99 S. Ct. 1946, 1958 (1979)

(“it is not only appropriate but also realistic to presume that Congress was

thoroughly familiar with these unusually important precedents from this and other

federal courts and that it expected its enactment to be interpreted in conformity with

them.”). Hence, there can be no question that gross receipts taxes form part of

§1612’s “income tax laws applicable to the Virgin Islands.”

In Eisner, the Court defined income as “the gain derived from capital, from

labor, or from both combined.” 252 U.S. at 207. Several decades later, the Court

explained that Eisner's definition was not exhaustive, and that other forms of gain

counted as income. Helvering v. Bruun, 309 U.S. 461, 84 L. Ed. 864, 60 S. Ct. 631

(1940). Over another decade later, in Comm'r of Internal Revenue v. Glenshaw

Glass Co., 348 U.S. 426, 99 L. Ed. 483, 75 S. Ct. 473 (1955), the Court adopted a

sweeping definition of income as including all "undeniable accessions to wealth,

clearly realized, and over which the [subject has] complete dominion.” Jd. This

prevailing definition means that all revenues are taxable income, unless specifically

excluded by a rule or statute. Two decisions of this Court further demonstrate that

17

gross receipts taxes customarily come within the income tax laws applicable to a

state or municipality.

In CSX Transp., Inc. v. Ala. Dep't of Revenue, 562 U.S. 277, 284-85, 131 S.

Ct. 1101, 1106 (2011), the Court specifically identifies gross receipts tax as a form

of revenue or income by the state or other governmental entity. This Court explained

why a gross receipts tax plainly means "another tax" within the meaning of a federal

statute, 49 U.S.C. § 11501(b) (4). Alabama imposed a sales tax on the gross receipts

of retail businesses and a use tax on the storage, use, or consumption of tangible

personal property. But §11501(b)(4) provides that a State may not “[i]mpose another

tax that discriminates against a rail carrier.” Alabama's gross receipts tax and use

taxes on diesel fuel applied to rail carriers, but not to motor or water carriers.

Therefore, CSX Transp., Inc. challenged Alabama’s taxes as unlawful.

"Is CSX challenging ‘another tax’ within the meaning of the statute?”, this

Court asked. 562 U.S. at 284. Yes, it answered, a sales tax on the gross receipts of

retail businesses is another tax after considering the expansive ordinary meaning of

“tax” which is undefined and unlimited by the statute. Jd. Here is the Court's

explanation:

An excise tax, like Alabama's sales [gross receipts] and use tax,

is “another tax” under subsection (b)(4). The 4-R Act does not define

“tax”; nor does the statute otherwise place any matters within, or

18

exclude any matters from, the term's ambit. In these circumstances, we

look to the word's ordinary definition, Asgrow Seed Co. v. Winterboer,

513 U.S. 179, 187, 115 S. Ct. 788, 130 L. Ed. 2d 682 (1995), and we

note what taxpayers have long since discovered--that the meaning of

“tax” is expansive. A State (or other governmental entity) seeking to

raise revenue may choose among multiple forms of taxation on

property, income, transactions, or activities. ‘[A]nother tax,’ as used

in subsection (b)(4), is best understood to refer to all of these--more

precisely, to encompass any form of tax a State might impose, on any

asset or transaction, except the taxes on property previously addressed

in subsections (b)(1)-(3). See Burlington Northern R. Co. v. Superior,

932 F.2d 1185, 1186 (CA7 1991) (Subsection (b)(4) includes “an

income tax, a gross-receipts tax, a use tax, an occupation tax... --

whatever”). The phrase “another tax” is a catch-all.

CSX Transp., Inc. v. Ala. Dep't of Revenue, 562 U.S. 277, 284-85, 131 S. Ct. 1101,

1106 (2011). Correspondingly, Virgin Islands gross receipts tax laws, like Alabama's

gross receipts sales and use tax, would be an income tax, because Virgin Islands

undisputedly increased its wealth and this is “income” as understood by this Court.

48 U.S.C. § 1397 provides: “the income-tax laws in force in the United States of

America and those which may hereafter be enacted shall be held to be likewise in

force in the Virgin Islands. §1612 provides for “exclusive jurisdiction over all

... proceedings in the Virgin Islands with respect to the income tax laws applicable

to the Virgin Islands. Neither §1397 nor §1612 defines “tax.” Nowhere does the

Revised Organic Act of the Virgin Islands place any matters within, or exclude any

matters from, the word's ambit.

19

Applying the plain language in Aloha Airlines v. Dir. Of Taxation, 464 U.S.7

104, S. Ct. 291, 295 (1983), this Court rejected the notion that local gross receipts

taxes are exempt from the reach of federal tax laws. 49 U.S.C. § 1513(a) provides

that "(a) No State . . . shall levy or collect a tax, fee, head charge, or other charge,

directly or indirectly, on persons traveling in air commerce.” But Hawaii’s Haw.

Rev. Stat. § 239-6 requires that “[t]here shall be levied and assessed upon each

airline a tax of four percent of its gross income each year from the airline business.”

This Court concluded that:

The plain language of 49 U.S.C. § 1513(a) would appear to invalidate Haw.

Rev. Stat. § 239-6. Section 1513(a) expressly pre-empts gross receipts taxes on

the sale of air transportation or the carriage of persons traveling in air

commerce, and Haw. Rev. Stat. § 239-6 is a state tax on the gross receipts of

airlines selling air transportation and carrying persons traveling in air

commerce.

Aloha Airlines v. Dir. of Taxation, 464 U.S. 7, 11, 104 S. Ct. 291, 294 (1983). To

resolve this conflict, Hawaii’s Supreme Court “looked beyond” § 1513(a)’s clear

statutory language “to Congress’ purpose in enacting the statute.” Id. Based on this,

the court concluded that Congress passed § 1513(a) “to deal with the proliferation

of local and state head taxes on airline passengers in the early 1970's.” Id. It further

found that “Haw. Rev. Stat. § 239-6 is imposed upon air carriers as opposed to air

travelers.” Id. at 11-12. Therefore, “the Hawaii court reasoned that the provision did

20

not come within the ambit of § 1513(a)'s prohibitions.” /d. at 11-12. This Court made

clear that a gross receipts tax is at least an indirect tax on the income of the taxpayer.

Here is this Court’s plain explanation:

we are unpersuaded by appellee's contention that, because the Hawaii

Legislature styled § 239-6 as a property tax measured by gross receipts

rather than a straightforward gross receipts tax, the provision should

escape pre-emption under § 1513(b)'s exemption for property taxes.

The manner in which the state legislature has described and categorized

§ 239-6 cannot mask the fact that the purpose and effect of the provision

are to impose a levy upon the gross receipts of airlines. Section 1513(a)

expressly prohibits States from taxing "directly or indirectly" gross

receipts derived from air transportation. Beyond question, a property

tax that is measured by gross receipts constitutes at least an “indirect”

tax on the gross receipts of airlines. A state statute that imposes such a

tax is therefore pre-empted.

Aloha Airlines v. Dir. of Taxation, 464 U.S. 7, 13-14, 104 S. Ct. 291, 295 (1983).

The Virgin Islands has done what Hawaii did in Aloha Airlines. But a state or

territory cannot avoid federal income tax laws by labelling its income “local gross

receipts taxes.” Id. The decision of the Virgin Islands Supreme Court is in conflict

with well-established decisions of this Court and those of at least two circuit courts

of appeals decisions interpreting the same statutory language.

D. Two circuit courts of appeals have held that the same plain

language in two Revised Organic Acts vests jurisdiction in the

District Court. The Opinion of the Virgin Islands Supreme Court

is in conflict with them.

Congress explicitly vested jurisdiction in the District Courts of the Virgin Islands

21

and of Guam using the same language. Compare 48 U.S.C. § 1612 (“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. ..”) with 48 U.S.C. § 14211 (“the District Court of Guam shall

have exclusive original jurisdiction over all judicial proceedings in Guam, both

criminal and civil, regardless of the degree of the offense or of the amount involved,

with respect to the Guam Territorial income tax.”). Based on the plain statutory

language, two United States Courts of Appeals conclude that Congress vested

jurisdiction in the District Court in plain language. The decision of the Virgin Islands

Supreme Court is in conflict with both courts’ decisions.

In Birdman v. Office of the Governor, 677 F.3d 167, 176 (3d Cir. 2012), the court

applies 1612(a)’s plain language at the onset.

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, 112 S. Ct.

1146, 117 L. Ed. 2d 391 (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.

Birdman v. Office of the Governor, 677 F.3d 167, 176 (3d Cir. 2012) Although the

court applied other interpretive tools to bolster its plain reading, it relied solely on

the plain language of the statute and not its legislative history. Id. (“The presumption

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