Cowgirl Bebop, LLLP v. Oriol

2021 VI Super 28U

COWGIRL BEBOP, LLLP, Plaintiff, v. JEAN-PIERRE L. ORIOL, COMMISSIONER OF THEDEPARTMENT OF PLANNING AND NATURAL RESOURCES, in his official Capacity,and THE COASTAL ZONE MANAGEMENT DIVISION Defendants.

CASE NO. ST-2019-CV-00582

SUPERIOR COURT OF THE VIRGIN ISLANDS DIVISION OF ST. THOMAS AND ST. JOHN

March 8, 2021

March 5, 2021

ACTION FOR WRIT OF MANDAMUS AND SUIT FOR DAMAGES

JURY TRIAL DEMANDED

MEMORANDUM OPINION AND ORDER

¶1 THIS MATTER is before the Court on the following:

1. Plaintiff's Motion For Judgment On The Pleadings ("Motion For Judgment"), filed February 27, 2020;

2. Plaintiff's Motion For Preliminary Injunction ("Motion For Injunction"), filed February 27, 2020;

3. Defendants' Motion To Dismiss For Failure To Exhaust Administrative Remedies ("Motion To Dismiss"), filed December 30, 2020;

4. Defendants' Memorandum In Support of Motion To Dismiss For Failure To Exhaust Administrative Remedies, filed December 30, 2020;

5. Defendants' Motion To Stay Proceeding Pending Resolution Of Motion To Dismiss ("Motion To Stay"), filed December 31, 2020;

6. Plaintiff's Response In Opposition To The Defendants' Motion To Dismiss ("Opposition To Motion To Dismiss"), filed January 20, 2021; 7. Plaintiff's Response In Opposition To The Defendants' Motion To Stay ("Opposition To Motion To Stay"), filed January 20, 2021;

8. Plaintiff's Motion For Immediate Ruling In Plaintiff's Favor On Plaintiff's Motion For Judgment On The Pleadings ("Motion For Ruling"), filed January 25, 2021;

9. Defendants' Reply In Support Of Motion To Dismiss For Failure To Exhaust Administrative Remedies ("Reply Motion To Dismiss"); filed February 3, 2021; and

10. Defendants' Reply In Support Of Motion To Stay Proceedings ("Reply Motion To Stay"), filed February 4, 2021.

¶2 For the reasons stated below, the minor permit was granted by an automatic application of law; the appropriate remedy is not a preliminary injunction, rather it is the writ of mandamus; dismissal or a stay of proceedings is not proper here;; and there was no improper regulatory taking in this case.

I. INTRODUCTION

¶3 Plaintiff Cowgirl Bebop, LLLP ("Plaintiff") initiated suit on October 16, 2019. At issue is a minor coastal zone permit Plaintiff claims it is due because the Coastal Zone Management Commission ("CZM") did not either issue or deny the permit in the period of time required by law.¹ Defendants Jean-Pierre L. Oriol, Commissioner of the Department of Planning and Natural Resources, in his official capacity, and CZM ("Defendants") filed their Answer and Affirmative Defenses on February 20, 2020.

¶4 On June 21, 2019, Plaintiff submitted their minor coastal zone permit application.² On September 13, 2019, Plaintiff gave notice to Defendants that if the permit was not issued Plaintiff would file suit within thirty (30) days.³ On October 16, 2019, Plaintiff filed suit seeking a writ of mandamus, declaratory judgment, attorneys' fees, and damages for an improper regulatory taking.⁴ On February 28, 2020, Defendants determined that Plaintiff's minor permit was insufficient, and Plaintiff would instead need to apply for a major permit.⁵ Plaintiff then applied for a major permit on May 8, 2020.⁶ The CZM denied this new permit application on September 24, 2020.⁷ Plaintiffappealed the denial of the major permit application on October 16, 2020.⁸ On January 27, 2021, the Board of Land Use Appeals ("BLUA") issued a scheduling order whereby Plaintiff must file its brief by February 10, 2021; Defendants must respond by February 24, 2021; and Plaintiff must reply by March 1, 2021.⁹

¶5 In its Motion For Injunction, Plaintiff requests that the Court "enter a preliminary injunction requiring that the Commissioner issue the permit sought by the Plaintiff in the Permit Application."¹⁰ Plaintiff in its Motion For Judgment requests the Court to issue a writ of mandamus "directing the Commissioner to issue the permit applied for in the Permit Application" as well as a ruling that Plaintiff "is entitled to a declaratory judgment that the Permit Application has been deemed approved by operation of law."¹¹

¶6 In a status conference on December 1, 2020, the Court ordered the Defendants to respond to Plaintiff's Motion For Judgment and that Defendants had thirty (30) days to file their response.¹² The Defendants responded with their Motion To Dismiss instead. Defendants did not explicitly state which of the seven defenses by motion authorized under the Virgin Islands Rules of Civil Procedure they based their Motion To Dismiss on, although the title to their Motion To Dismiss features the phrase "failure to exhaust administrative remedies."¹³ Further, Defendants state that "this Court should dismiss for lack of jurisdiction for Cowgirl's failure to exhaust administrative remedies."¹⁴ In their Reply Motion To Dismiss, Defendants clarify they are indeed seeking action pursuant to V.I. R. CIV. P. 12(b)(1).¹⁵ Defendants argue that "[a]ny applicant is entitled to appeal an adverse decision" and then argue that "Cowgirl must exhaust its appeal rights premised on the alleged action approving its minor application by default."¹⁶ Defendants have also filed a concurrent motion requesting the Court to stay the proceeding pending the Court ruling on the Motion To Dismiss. The Court will address all the issues presented by the above-named motions as their resolution all revolve around the granting of the permit.

II. LEGAL STANDARD

A. 12(b)(1) and Administrative Exhaustion

¶7 Rule 12(b)(1) motions that challenge a court's subject-matter jurisdiction "may be treated either as facial or factual. The Virgin Islands District Court has characterized this difference by saying that a facial challenge, 'attack[s] the complaint on its face,' while a factual challenge 'attack[s] the existence of subject matter jurisdiction in fact, quite apart from any pleadings.'"¹⁷ The Third Circuit in Virgin Islands Conservation Society v. Virgin Islands Board of Land Use Appeals¹⁸ affirmed the logic set forth in the Eight Circuit decision Winter v. ICC¹⁹ that the same party may not "simultaneously seek both judicial and administrative review" and that a pending appeal renders an administrative decision not final.²⁰

¶8 In the District Court case of La Vallee Northside Civic Association v. Virgin Islands Coastal Zone Management Commission,²¹ the District Court dismissed the action for failure to exhaust administrative remedies because the appellants, residents who opposed a permit CZM had granted, had failed to appeal CZM's decision to the Board of Land Use Appeals ("BLUA").²² The District Court further stated that "it is clear to us that the administrative appeals process is intended to be the means of review of actions taken by CZM with regard to the granting or denial of a permit."²³ Notably, the case involved an aggrieved party that was disputing the granting of a permit to another party.²⁴

¶9 The case was appealed to the Third Circuit, where the Third Circuit, taking up several consolidated appeals, decided whether administrative exhaustion was appropriate.²⁵ While deciding that administrative exhaustion was appropriate in that case, the Third Circuit also recognized that while "[j]udicial forbearance shows a proper respect for administrative autonomy,allowing the agency to function more efficiently and responsibly . . . there are occasions for pragmatic exceptions designed to promote efficiency."²⁶ These exceptions include "when the challenged agency action constitutes a clear and unambiguous violation of statutory or constitutional rights, when reliance on administrative procedures is clearly and demonstrably inadequate to prevent irreparable injury, and when exhaustion is futile."²⁷

¶10 Lastly, the Virgin Islands Supreme Court case Virgin Islands Conservation Society v. Golden Resorts, LLLP²⁸ involved an outside conservation group challenging a permit granted to a resort.²⁹ The resort had been granted a permit by default, which CZM recognized and then later rescinded.³⁰ The resort appealed this recission which was then affirmed by BLUA.³¹ The Court held there can be no administrative exhaustion when there is nothing for the administrative agency to do:

We hold that the Superior Court should not have declined to exercise jurisdiction pursuant to section 913(b)(1) under either the rule requiring exhaustion of administrative remedies or the primary jurisdiction doctrine. As a threshold matter, while the CZMA provides for the BLUA to hear appeals of CZM Committee decisions, there is no administrative agency that possesses jurisdiction to review BLUA decisions. Thus, since "'[e]xhaustion' applies where a claim is cognizable in the first instance by an administrative agency alone," the Superior Court erred in holding that VICS had failed to exhaust its administrative remedies, since there remained nothing for any administrative agency to do at this point.³²

B. Equitable Remedies

1. Preliminary Injunction

¶11 Black's Law Dictionary defines a preliminary injunction as "[a] temporary injunction issued before or during trial to prevent an irreparable injury from occurring before the court has a chance to decide the case. A preliminary injunction will be issued only after the defendant receives notice and an opportunity to be heard."³³ Black's Law Dictionary defines enjoin as: "1. To legally prohibit or restrain by injunction . 2. Toprescribe, mandate, or strongly encourage ."³⁴

¶12 Preliminary injunctions are initially governed by Virgin Island Rule of Civil Procedure 65(a),³⁵ however subsection (e) of Rule 65 states: "Nothing in this Rule shall supersede the provisions of any statute of the Virgin Islands relating to injunctions."³⁶ Under the Coastal Zone Permit statute, "[a]ny person may maintain an action for declaratory and equitable relief to restrain any violation" of the coastal zone management laws.³⁷ A preliminary injunction is equitable relief and thus the statutory provisions of § 913(b) supersede Rule 65. The statute establishes...