# Appendix — Smith v. Virgin Islands > Briefs, arguments, decisions, and more. URL: https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40385601_1708%3A3 ## Record - **Collection:** Supreme Court brief - **Document type:** Appendix - **Published:** January 1, 1964 - **Citation:** 377 U.S. 979 ## Text A-l Judgment 8 NITED STATES COU RT OF APPEALS Ion THY Troirp Ciecir aaa Sth | ; No. 14,585 NokMAND Satire amd “Nawey L. Sarr. : ae ants s, o vials Govensmess or THe Viner ial AND? S — afd = te ee ee Havin Agvitesea “UIncopporated and " Hlanvis Aue UMINA Vancty sls anps, INc., Intervenors, (Civil Action N6. 105-1962) eee a. ee. se No. 14.536 ; - ee °. - 3 ee - . " \ Harry NevMann, - “Appellant, GOVERNMENT ore THE Virgin [s_anps, Harvey Avtauna Vireix Iscanos, Ine. and? Harvey. ALuMinem (Incorporated) (Civil Action No.. 106-1962) “Appeals from the Division’ 6% St: Crom, Christiansted Jurisdiction. Present; . °° : _ : wt These causes cime on to be heard on the the Distriet Court of-the Virgin Islands, Division of St. District Court of the Virggn Islands, “ WaLopNeER, Stacey and Sarru, Circait. Judges. records trons . an A-2 a = Judament were argued bs “Croix, Christiatisted Jurisdiction, and ° “S4 . counsel. ' - “On consideration: whereof, it is now here ordered and adjudged by this Court that the order of the said District Court. tiled July 10, 1963, dismissing the qilaintiff f oo i : ° ° b ; -A-6 , - _— } Opinion fe nate hing funds payable Hin the U nited States ‘to Govern-— ment with the proviso, that if alloy ttions from the match- ‘ing funds proved insuflicient thi Harvey could secure reimbursement from Government's ‘“unoblig rated non-tax revenues “and if the latter were insufficient, Harvey could “offset” unpaid balaygees against itx “obligation “to pay a be applicable to construction equipment of such contractors and sul> contractors. ; “(B) Harvey and such -of its affihates as are engaged in the business of constructing, Gwoing and/or operating, in whole or in. part, the Plant and Related Facilities siall, except to the extent that Federal statute may otherwise provide, recetve a non-taxable sub- sidy measured by the following taxes, except to the extent thai Harvey and tts Aftiliate sare éxenypted trom such taxes pursuant to the terms of this Agreenieni, In afl amount eqital to : “(h) seventvifive percent ¢75°° ) of the income taxes in re- spect of a period of sixteen (10) vears from the date of comple- “tien Of construction’ of the Pant (other than in re ‘spect of income detived from sources wi.hint any of the States of the’ United States ) actually paid ‘into. the Treasury of the Virgin Islands ; and . ’ . “(i1) one » handed percent (100% 5 ‘of the import duties and other taxes on-raw material brought into the Virgw I:lands for consumption or processing at the Plant and ‘Related Facilities, ~ and on building materials, furnishings and equipment imported into ‘the Virgin Islands. for use in the construction and’ expansion | of the Piant and Related Facilities, actually paid into the Treas- ury of the Virgin Islands in respect of 2 poe of sixteen (16), years from the Approval Date; and : ? pe : iii ) the entire amount of any taxes actually. paid into ‘the Treasury of the Virgin kslands that are attributable to or are im- posed directly or indirectly as a result of one or more of (1) the subsidy and qtier 4 avments, conveyances of property, ‘and /or other actions by the Government in compliance ‘with this Section (including this’subdivision (iti) hereef} or any of the other pro- visions of this Agreement, (2) any sale, convey ranee, exchange or transfer at anytime within the period of sixteen (16) wears from. the Approval Date of all or any portion of, or interest in, the ° Government e.g and/or properties then comprising the Sites between regeeid s Affiliates, or any two or more of them, of 43) any sal, Convevance, exchange of transfer at any time Within the period sh sixteen (16) vears from ‘the Approval Date 2: of all or any portion of, or interest in, the Government Properties ~ 2 7s ; a 8 Opinion > Govermuent taxes ether than income taxes:’ and (4) to ; — yaintain the channel and its: tu¥aabout area free from obstructions and dredged -to their completed dimensions: . | e : - and/or properties then comprising the Site, by Harvey, its Affilié ates or any of them to or with one or-more other persons, firms or corporations for the purpose of acquiring real property (or interests pertaiuing thereto) in the Virgin Islands to be included in the Site or for the purpose of acquiring cash or propefty which, within thrée years of such acquisition, is used for said nee "- purpose. - it gilt ; ec os “During the period of sixteen (16) years from-thedate of comple- tion of construction of the Plant, any stockholders of any such cor- porations whorare resents of the Virgin Islands shail receive a non-taxable subsidy in an amount equal to seventy-five percent (75%,) of thy income taxes actually paid by them into the Treasury ‘ of thé Virgin Islands of) income derived hy them as stockholders from activities in respect of the Plant and Related Facilities to which t% foregoingexemptions and subsidies relate. . ¥ * ‘° * * - * : : a “* * *°All transfers of real property (or interests pertaining : thereto) to and from the Government pursuant to the terms of this Agreement, transfers of real property (or interests pertaining thereto) bi and between Harvey. and any one or more of its Affiti- ates, or by and betaveen any two or more such Affiliates, and any, transfers of real property (or-interesté. pertaining thereto) contem-_ plated by subdivision 9(B) (iti) and any other provision of this Agreement, shall be exempt from all taxation by the Government.” In Paragraph 4+ of Annex C to the Agreement there were. these farther tax exemptions and supsidy provisions: . *, “(A) Harvey and its Affiliates: shall have’ the fight to use the above-mentioned channel and turnabout area free of any taxes, excises, duties, fees, charges, imposts, or exactions imposed by or with the consent of the Government or any subdivision, agency or lfistrumetitality thereof, for a period of sixteen (16) vears from the date of first ‘comimercial use thereof, which shall be deemed for purposes hereof to be the first anniversary of the Commencement Date ; provided that Harvey and its Affiliates shall not thereafter he subject to any such taxes, excises. duties, fees. charges, imposts or exactions except ds a part of a general law applicable to the use of navigational facilities subject to. the jurisdiction of ‘the Govern- ment.” 7. The provisions as to reimbursement appear in Paragraph 4 of Annex C; : Ns ‘s ' (A) ** ® Subject to the.terms and conditions set forth herein. the Government agrees to reimburse Harvey for the costs of the Opinion : - The Agreement prefaced its Covenanting provisions with ~ / this stateme ne ot poliey: . alleviate under-cmpioyinent in the Virgin Tslands, t improye the quality of cmplovinent through the ee eee. Swe = ies CAD (Channel Project. directly or indiftetly ineurred by Harves on behali of the-Gevernment for the dredging and .conmpletion of the channel and’ turnabout area, .inclading in the computation of such costs a reasonable allocation ot overhead and other indirect costs, all as determined in accordance with good accounting practices. ‘Lhe Government's unde rtaking herem to make reimbursement to _ Harvey as aferesaid shal! in no event be considered to be a gener l obligation of the ‘Government and shall not bear-interest. * Such _reimbursement to Harvey shall not exceed 33,000,000 in the aggre-’ gate i etther the Channel Project was c4structed accordyng. to ” e design submitted bi Harvgv or Elarvey failed to submit a desig within eighteen (18) months after Ne Approval Date. °, “(Ba WwW ithyn thirty (30) davs after thetend of Harver's tisca! vear, Harvey's Ciief Financial Officer shill certity in reasonable detatl to. the. Government the aggregate amount rembursable bur unremmbursed to barves heretncde tT. as at the end of such tises! year, in respect of Channel Project costs meurred im that and Any “preceding fiscal year, and within thirty (30) dats after the-com- mencement of the Government's next steeceding fiscal vear, the Government shall remburs” to Harvey the lesser of such amount and S3G0,.000. “(Cs The Government agrees. to use its best effort®Pto o" tig. th sha extent that aomiav lawfully de ‘so, tor — PUTpose ot Matha and to the extent necessary te make the reimbursement referred to above, all momes transferred and to be uransterred to the Govert- ment pursuant io Section 7032 of the United States Internal Rev- enue Code of 1954, as amended, and the separate fund in which such momes are to be deposited pursuit te said Section. Hand to the extent stich monies and tind be msutticrent for such purpose in amv fiscal vear, the Govertenent undertakes, to the extent thet namay lawfully do so. twobligate tor the purpose af making and to thle extent wecessary to make such rembursement, all oe unabl: gated pon "tax revenues of the Gove Trent. li and ¢ © extent that said monies, fund ov l revenues-be itsuthicie: a tor peli 9 purpose * ; r “Waent sk. it is the poliey of the Government. to Opinion offering of cimployineht invelving higher skills, te hyve established in the Virgin Fslands self-sustain- Ing business enterprises and to Gueourage the invest- livat of capital in the Virgin Islands, all to the end | that the economy of the Virgin Islands lay rest con a broader base: and Wninias; Harvey and: Harvey Aluminum desire to aequire and operate processing and other facili- ae ae ties for the production of alumina and related — products in the Caribbean area which Harve ‘v anti- cipates wil require/the expenditure of $25,000,006, nore or less, and == (2s reflected | in the project. information previously submitted hy Harvey to the Government and referred to heiow) provide employ. nent to approximately 400 persons: and 0 + — “Wireneas, Harv yoand Harvey Aluminum are will-. Ing to locate such facilities im the Virgin Islands, hot a at the request and with thecauthorization : lei the Government amd in accordance with other te rns ‘and provisions, M1 as set forth below: and “Wises vs. thie Goverment. éGonsiders that) sucli faeiitios. W established, would, promete the public Wl acy fiscal wear. thre verk@on avrees tl } Cover® ttor the ptirpose of e exten? Necessary to make such A portartntmet es (0) Harves and its Athhates mei cotfser any amount rei bare sz to Harves then remruming unrennbursed against any amount other that inmeotee, tine , that Harves and its Affthates may then have “the obligatiot to tev over ta the Government or its desigace ot ©. designees, and city the subsidy payable to Harvey -and it: Atl atessam respect 4f that and succeeding taxable vears pursuant to Section eho cit of the foregoing ae eement shall be imereased STFC i SEVENTV-Pve percens | IO PAD ot hundred pe reent ( Tao", ees of the-neore taxes Cother thiamin re ee of income derived irom J sources wath 1 dita ot the States of the United States} actual] ; pail into the ticanes of the Virgin Islands.” > A te A-10 « ( bpunion interest by assisting’ in the economic development of the Virgin ee and “W HERLAS, the Government atte ‘ro due investigation and consideration has determined that the construc: - tion and operation of such facilities would not he prejudicial to the health or welfare of the inhabi- fants of the Virgin Islands or :to local property owners; and ? Ps é . aa ‘ . a . . \ A it ee eo Cree) 2 a) 2 FY y ; Order Rutere A hy the Distr t.Court of the Virgin Islands, July lo, 1965 sidered the provisions of the Agreement: further, ‘that the “Decod of Release from the € nited States to the Virgin Aslaiids, dated May 16, 16x, =p cifically noted that such — Relyase was to enable Government to convey the land te Harvey as site for its alumina plant. For the rensons stated the Order of the District Court disthhissinie the appellants’ petit ns willbe vacated and te catises remanded with directions to: the District Court to enter stmmagrs judiments saint the ocppellants. — Order Entered by the District Court of the Virgin Islands, July 10, 1963 ORDER Thier ahove captioned citses have heen consolidated Tor the purpese col areuient anid determination of the Rule ivcby--Motion to. Distaiss ter Kailure te State a Claim Upon Which Retief ean Lie Granted. and the Rule 56(b) Motion for Stuminary Judgment, filed therein by thie defendant =. Though somewhat different forms of velit are sought. hoth causes are conect red with. the high!s controversial Cagreement between the Virgin Islands Government mde Harvey Ahuaina Virgiti [xlands. ine. which Legislativ: Act and Agreement contemplates that Harvey will con- trict an alumina plant and dredge a deepwater chanie! thereto on the [sland of St. Croix. In exchange therefor the Virgin [slands Government has gereed among other A-t4 Order-Knter d hing the District Court of th. brain fdands, July 10, 1963 things te Convey some twelve hundred aeres to i: arVvenr, grant tax exe tptions and remniburse ie inves for its chan ‘nel construction eX penscs, The issues presented hy these consolidated ‘ASes have weighed heavily on this c ourt heeause of their far-rene!: ing import and concern te aie Virgin Islands. However. for the followings reasons the T2¢b) Motion attae king the standing of the petitioners to bring these aetions as tay pavers mast be granted, The petitioners have failed to distinguish themselye- dye) trom the controtline enses of Massachis: ffs Vo Mellon, 2a CS, 347 (1923): Doremus v. Board - of Lilucation, D4? i. So) (1952) and (ily vo Gareramont of the Virgin: Islands, Wl “Fed. Supp. 210 C1958)" > Bwen thoagh th. petitioners pay decal and or Federal taxes on income or property, they fave n o shove ti the satisfaction of thi- Court how they ean void the ippleation of the principles as promouneed ino the above cited taxpaver suits to the effect that: "The funetions of government under our sVster tre apportioned. To the levislative department has been committed the duty oof making jaws: to th executive the duty of executing then: and- to the Judiciary, the duty of interpreting and appivine ‘the tat “in « Cases properly, brought chefore the court. The seneral rule is that neither departyrent may. dnvade the province of the other: and meither piss control direet, or restrain the action of the other. . We are not now speaking of the merely ministers! Ads Order Buter: do hy the District Court of the . Virgin Islands, July 1, 1963 duties of officials. ge We have no power per se to review and annul aets of Congress on the ground that they are umeonstitutional “That Question may bo considered only when the justification for soine direct injury suffered or threatened, presenting 2 justiciable issiie, is iiade to rest upon such am act. Then the power exercised is that of ascertainitiy and declaring the law applicable-to the controverss.. It amounts ti dittheaimere than the nezative power te disresard an unconstitutional enactinent. which otherwise would stand in the way ‘ef the enforce ment of a legaf right. The party who ingge= the power must be able ta show not only that the stat nteas invalid. bat that le das sustained or ts iinitie ajiately in danger of sustaining somue direct mjury as the result ef its enforcement, and not erels that he suffers ino sete indefinite: Way in’ commen With prerertare: creerals. lf a case for preventive relief be presented. the court enjofis. in effeet. mot the exeentjon of The statute, but the aets of the offieral, fire statu: hetwithstanding. © Elere the parties plaimtil! tive hie ste o¢ase — Leokine through doris of words to the substance of then complaint, iis merely that officials of the executive department of the government are exeeuting and will execute: an aet of Congress asserted to) be nneenstitutional: and this we are asked to prevent, To do se would be net to deride a judivial contre versy, but to assume a position of authority over tHe governmental acts Zot another and cereupliil e A-2" i Order Entered Ly the District Court of the Virgin Islands, Juli to, 1905 bd . bi ba e : . department, an authority which plainiv we ao not possess." Massachusetts veo Mellon, supra, Paes: 7 ASN AND "2... because our own jurisdiction is cast in terms of | ‘cane of controversy’, we ¢annot aecept as the basis for review, nor as the basis for conelusive disposition of oan issue of federal «law Without reviewing any procedure whieh does not constitute ssuehs The taxpayer's action can meet this testo bat only chiding ois a good-faith poe kethook aetion” Doremus vy. Board of Kifucation, Spr, Page 424. “... one essential ind fundamental requisite té HINA Ne gt taxpayer's suit, or for-that matter, “the invocation of equitable relief generalby, is that the plaimeat! fave a real interest in the ease bevend fis subjective deSire to see that the law Iseprepe ris entorend.” itt). \. (rote roment of the Virg Islauds. Upre, Abe radi be F Such holdings most certainly appear to be dispositive ef petitioners’ taxpayer gases us presented. However. even if it did not so appear te this Court The petitvoners could net expect to fare anys. better upon a ruling in regard to the Rule S60b)—-Motion for Sununary Puderment——in dreds of the Fecent Supreme Court vase of Morgue con v. Shrape decided: April 22. 1000, appeal from €. S. Distriet Count Tor the Distriet of Witness, No. TL October Term. 15, Advance Sheet, unanitious decision with opinion delivered by J ustic ep; te ‘kK. i The Fergueson ‘case Wits before the Sapreme Court to review the judgment of a) three “judse DF et rics Court Order kntered wi hee Phistin i $ oiurt ‘Of the bargin [slaw Is, July Ji, 1% ; enjotting. as bang im viekition of the Due Process Clause of the Fourteenth Atmeondiment a Wansas statutt niakine io gytdemtanor for ANY Derson | te cngace “ip the busi Cohess of debt adjusting” exeept as an ipeident te the fawful practice of law.in that state. “The Supreme Court refused to VSit a a stpericgisiats ie te we oh the Winder of legix dation™ and they emphaticaliy refused "to go back to the time when courts used the Due-Preesss Chinse to. strike down state laws. regulators of busin ~s and indtistrial conditions, because they inay be unwise, doprovident, or outof harmeus ith a particular sefioe! of theaght.” They also stated that °The criterion of constitutionality ix not Whether: we believe the iuw tocbe for the publie ‘wood. "And. further stated that “We have returned to the origiaad constitutional proposition that courts do net sub stitute their social nnd economie beliefs for the judgment levistatiye bodies. whe are eleeted to patss laws.” Certamly, the Virgin’ Pslands Leviskitire’s negotiations nnd agreement with Harvey are in regard to and are destgned te affect ceconom ie conditions im the Virgin I=lands, eid this Court would, therefore, tn tight of these. recent Suprenie Court pronouncenie nts, have mo. cheic but to grant the defendants’ Motion for Sumanary Judi brent. In light of the abeve conclusions, the Government's and Harves’s 12) -Motion*te Disiniss for Fathire to State a Claim upon Which Reef ean be Granted is herehs eranted, with costs and reasonable attorneys’ thes. x os Walter A. Gordon : Judgé of the Distriet Court sy the Court, . Dated: July 10,-1963 OS Stat. HIS. alhie nded., 72 Stat. od. : Title 48° USC 1561 No daw’ shall be enacted in the Virgin dslands whieh shall deprive Gimy persen of dif). liberty. or property with out due process of low of deny to any person ‘therein equal profection of the laws. . In all ertmina! proseeutiois the aeeused shall enjos the right, to bye represented in conmsel for his defemse to be infogmed of the, nature and eause of the accusation, to have a speedy and public trial te be confronted with the Witnesses agaifist bin and te have compulsory process rear obtaining: Withesses in diix faver. ; No petsen shall be held te answer tera cermminal offens« without due process of laws and no person for the saree offense shall be twice put in. jeopardy of “punishment, nor shall be compelled in aay ermumal ease, to give evi dence ‘against himself; nor shalk any person sit as judge mesradl hee en CYA! any | or mnagistrate in any ease in which he as attornes Or prosecuter, \icpersons shall be bailable by suticient sureties in the case of criminal offenses, exeept for first-degree murder or any capital offense when the proof is evident or the’ presumption great. ~Exee-sive bail shail not be required, hop excessive tines iapescd, nor ernet and unustial eae infticted, No lew tupairing the obligation of contracts shall be enacted, . No person shall be imprisoned or shail suiftr forced labor for debt, 4 r : A | A . ; Section 3. Revised Organs “Act of the Virain ‘Islands Ali persons shall have the privilege oof the write! bevbens corpus ane the site ss trall not be suspended except as herem expressly provide | é ‘ Neex post facto lav lor bill or attain of hint bee enacted, Private property hal not be taken for publfe tse excer “Hapeon pad dent at just conimpensation gscertained im thie manner provided by Taw. ° The, right to be secure nedinst wunreasonete searches and seizures shall not be vielated. ; Ne warrant for arrest or semtoh shall Issties Dut rpon , probiible «aise. spported by cath cr aattivanitttiews. a a | parptseularin deserroine the place ter bee senrehed mad tite yr rots cor Chiitiges Ter by Minait the power of the legislature herein pre- vided to enact laws for the protection of life, the pee health, or the pttblic safety, . peak No political or religious: test other than an oath to SuUp)- port the Constitution and the laws of the dnited States applicable to the: Virgin Islands, and the laws cof the Virgin Islands, shall be required as a qualification to any office or public trust under the diovernment of the Virgin Islands. - July 22, 1954, ¢ 508, 53, OS “Stat. 40s, uinended Aug. 28, 1958, Pub. Le 8d-S51. 0 1, 72 Stat. L004. an i in . mye General Territozial Provisions P or Special Laws 2 Stat. 10), Tith 48 U.S . 1471 The lewislatures of the Territories of the United iene now or hereafter to be organized shall not pass logal special laws in any of the following enumemated cases, that is toe sav: Granting divorcees. © Changing the names of persons or places. Laving out, opentinc, alterins, and working roads er highwhs =. 3 . Vaeating reads, town plats, ‘streets, alleys, and publi® grounds . Locating or changing counts seats, - Regulating county and township affairs. Resulating the practice in courts ef justion, Reoulatine the jurisdtetion amd duties of justices of thus pPatce, police iagisteates, and constables Providine. fer elfanges ef venue it einvil and eriminal citees. ; ao v Ineorporating ilies, Towns. OF fillages. or chang ing Or amending the char roof any town, cits. or Village ace | . a thee pormishenient of @rines or iizdemeaners. For the: assessment and collection of taxes for ae rriteri: al, eounty., township. or rend: PUrpeses. Summeniig and iyenpoonnelinice seratrich aon pee tit jrrers Prov dime for ! tie’ Management Of comunen