United States of America v. Territory of The Virgin Islands

DISTRICT COURT OF THE VIRGIN ISLANDS
DIVISION OF ST. CROIX
UNITED STATES OF AMERICA, 	)
)
)
v. 	)
)
) 	Civil Action No. 1986-265
TERRITORY OF THE VIRGIN ISLANDS, 	)
et al., 	)
)
)
Defendants. 	)
__________________________________________)
Attorneys:
Jonathan M. Smith, Esq.,
Laura L. Coon, Esq.,
Sharon I. Brett, Esq.,
Marlysha Myrthil, Esq.,
Washington, D.C.
For the United States
Nathan T. Oswald, Esq.,
Pemberville, OH
Aquannette Y. Chinnery, Esq.,
Carol Thomas-Jacobs, Esq.,
St. Thomas, U.S.V.I.
Kenrick E. Robertson, Esq.
St. Croix, U.S.V.I.
For the Defendants
MEMORANDUM OPINION
THIS MATTER comes before the Court on Monitor Kenneth A. Ray’s request that “the
Court order an escrow account to ensure prompt payment of monthly invoices” (Dkt. No. 813 at
1–2), Defendants’ Response thereto (Dkt. No. 817), and the telephonic status conference held on
May 27, 2014. For the reasons that follow, the Court will deny the Monitor’s request for an
Order 	establishing an 	escrow 	account. 	Instead, 	the Court 	will 	enter 	an 	Order 	requiring
Defendants to pay the Monitor’s monthly invoices within thirty days of receipt—in accordance
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with the Defendants’ contract with the Monitor, executed pursuant to the Court’s May 14, 2013
Order adopting the parties’ Settlement Agreement—or be subject to sanctions.
I. 	B ACKGROUND
A. 	Settlement Agreement
This litigation began in 1986 when the United States filed a Complaint seeking to enjoin
the Virgin Islands Government from depriving inmates at Golden Grove Adult Correctional
Facility (“Golden Grove”) of the rights, privileges and immunities provided and secured by the
United States Constitution. (Dkt. No. 1).1 On May 14, 2013, the Court accepted the parties’
Settlement Agreement (Dkt. No. 689-1), and entered it as an Order of the Court (Dkt. No. 742).
In the same Order, the Court adopted the United States’ unopposed “Proposed Findings of Fact
and Conclusions of Law in Support of Settlement Agreement” (Dkt. No. 716), and found that
“Defendants are violating the Eighth Amendment rights of prisoners at Golden Grove[.]” (Dkt.
No. 742 at 2).
In the Settlement Agreement, the parties agreed to a broad plan to “remedy the ongoing
constitutional violations” at Golden Grove. (Dkt. No. 689-1). The parties further agreed to
“jointly select a person to serve as the Monitor to oversee the implementation” of the Settlement
Agreement. (Id. at Part X.A.1). By Order entered on June 19, 2013, the Court approved the
parties’ joint selection of Kenneth A. Ray to serve as the Monitor. (Dkt. No. 750). By the terms
of the Settlement Agreement, “[t]he cost for the Monitor’s fees and expenses [is] borne by
Defendants.” (Dkt. No. 689-1 at Part X.C.1).
1 During the course of the litigation, the parties previously entered into a Consent Decree, a Plan
of Compliance, and a Stipulated Agreement (all of which were entered as Orders of the Court) to
remedy the constitutional violations at Golden Grove. By Order entered on February 8, 2012,
this Court found that the earlier Orders did not comply with the Prison Litigation Reform Act.
The ensuing litigation resulted in a May 14, 2013 Order of the Court adopting the parties’
Settlement Agreement.
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B. 	Defendants’ First Failure to Timely Pay the Monitor
On February 18, 2014, the United States filed a Notice advising the Court that
Defendants had failed to pay the Monitor for any of the work he had completed, and that
Defendants owed the Monitor in excess of $80,000. (Dkt. No. 766). Because Defendants had not
paid the Monitor—even after a reminder from the Monitor which contained a final deadline for
payment—the Monitor suspended his services. (Id. at 1). The United States requested an
emergency telephonic status conference “to address the issue of monitor compensation.” (Id.).
As ordered by the Court, Defendants filed a Response to the United States’ Notice. (Dkt.
No. 768). In their Response, Defendants advised the Court that “[i]n September 2013 the
Monitor and the Defendants agreed to a monitoring budget for the first year of the monitorship.”
(Id. at 1). Defendants further explained that they executed a contract with the Monitor containing
“terms . . . consistent with the provisions of the settlement agreement” on December 12, 2013,
and that “[b]etween December 12, 2013 and February 13, 2014, the contract obtained the
approval of different agencies as required by law.” (Id.). According to Defendants, “[s]ome of
the approvals required back-and-forth discussion to resolve concerns about the contract.” (Id.).
Defendants stated that “[t]hey ha[d] accomplished what was required”; that “[t]he contract was
finally approved on February 13, 2014”; and that they were able to issue a check to the Monitor
for his outstanding invoices on February 19, 2014. (Id. at 1–2). Defendants concluded their
Response by stating that they did not “anticipate this kind of delay in making payments going
forward.” (Id. at 2).
C. 	February 20, 2014 Telephonic Status Conference
At a telephonic status conference held on February 20, 2014, Defendants informed the
Court that they had issued a check to the Monitor for $87,946 the previous day, and had sent it to
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him the morning of the status conference. The parties informed the Court that, under the
provisions of the contract between the Monitor and Defendants, Defendants were to pay the
Monitor within thirty days of receipt of an invoice.
Defendants fervently asserted that the delay in payment was caused solely by the process
of developing and executing the contract with the Monitor and having it approved internally.
There was no dispute regarding the invoice. Defendants’ counsel assured the Court that there
was no reason why the process for payment of invoices going forward would take more than
three days, and thus, there would be no issue in the future with payments beyond the thirty days
allowed.
The Court stressed to the parties the urgency of remedying the constitutional violations
found to exist at Golden Grove, particularly given that the case has been pending since 1986. The
Court expressed its concern that Defendants—based on their actions—did not appear to share the
Court’s sense of urgency. The Court emphasized the “integral and essential” function of the
Monitor, his consultants, and their work, to the Settlement Agreement, which “the parties
entered, and which has been incorporated as an order of the Court.” The Court concluded the
discussion of monitor compensation by expressing the Court’s expectation that “individuals will
move with dispatch with regard to the activities that are necessary to implement the Agreement,
and the Court’s Order in connection therewith.”
D. 	Defendants’ Second Failure to Timely Pay the Monitor
Approximately two-and-a-half months later, on May 8, 2014, the United States filed a
“Notice and Request for Emergency Telephonic Status Conference,” on the Monitor’s behalf.
(Dkt. No. 813). The Notice advised the Court that the Monitor, after submitting his March 2014
invoice to the parties via email on April 2, 2014, and not receiving payment, emailed the parties
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on May 5, 2014 stating that if he was not paid by May 7, 2014, “he would once again suspend
monitoring and seek court involvement.” (Id. at 1). According to the Notice, “[a]s of close of
business on May 7, 2014, Mr. Ray had still not received payment for the March invoice.” (Id.).
The Monitor requested that the Court set an emergency status conference “to address the issue of
monitor compensation,” and that “the Court order an escrow account to ensure prompt payment
of monthly invoices.” (Id. at 1–2).
The 	Court 	ordered 	Defendants 	to 	file 	a 	Response 	to 	the 	United 	States’ 	Notice
“explain[ing] with specificity the reason for their failure to timely pay the Monitor for the March
2014 invoice, including an identification of any agency or agencies, or any individual or
individuals, that contributed to the delay of the payment.” In their Response, Defendants
explained that “[t]here was an oversight regarding the payment of the March 2014 invoice”; that
“the March 2014 invoice was sent both to Attorney Robertson and [Bureau of Corrections]
Director Julius Wilson”; and that “Director Wilson takes responsibility for this oversight
regarding the payment not having been made.” (Dkt. No. 817 at 2). Defendants argued that an
escrow account was unnecessary, and that a viable solution would be to have the Monitor send
invoices directly to the BOC business office. (Id.).
E. 	May 27, 2014 Telephonic Status Conference
During the May 27, 2014 status conference, Director Wilson and counsel for Defendants
explained again that the failure to timely pay the Monitor’s March 2014 invoice was an
oversight, largely caused by Attorney Robertson’s emergency absences for much of April and
part of May, 2 as well as Director Wilson’s misunderstanding of his role in the payment process.
As with the first failure to timely pay the Monitor, there was no dispute regarding the invoice.
2 Defendants informed the Court in their Response that Attorney Robertson was away from the
office on bereavement leave for an immediate family member’s funeral. (Dkt. No. 817 at 2).
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Counsel and Director Wilson explained that the money to pay the Monitor was already in the
Bureau of Corrections’ budget and therefore, there was no issue in getting the money from the
Government of the Virgin Islands to pay the Monitor’s monthly invoices.
The Monitor explained at the status conference that his request was for the Court itself to
establish and maintain an escrow account—funded by Defendants—for the purpose of making
the payments due on the Monitor’s invoices.
F. 	Payment of the Monitor
As noted, Defendants are obligated under the Settlement Agreement to pay the Monitor’s
fees and expenses. (Dkt. No. 689-1 at Part X.C.1). The Settlement Agreement provides that
“Defendants will provide the Monitor with a budget sufficient to allow the Monitor to carry out
the responsibilities described in this Agreement.” (Id. at Part X.C.2). The Monitor is to “submit
detailed monthly statements of fees and expenses to the parties.” (Id. at Part X.C.1). By the terms
of the contract entered into by Defendants and the Monitor, “[t]he Government shall, within
THIRTY (30) DAYS of the receipt of an invoice, pay the invoice in full or, if it contests any
charge or charges on the invoice and fails to resolve the dispute by agreement, submit the dispute
to the Court and the Court will determine the appropriate amount to be paid.” (Dkt. No. 817-1 at
42). Defendants informed the Court at the February 20, 2014 status conference that, under the
contract, Defendants are permitted to raise objections and to bring unresolved disputes to the
Court. Defendants and the Monitor expressed the mutual understanding at the same status
conference that the contract required the Monitor to be paid within thirty days of receipt of an
invoice, even if a dispute was unresolved, and that the resolution of any dispute would lead to an
adjustment of future invoices, as appropriate.
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II. APPLICABLE L EGAL PRINCIPLES
As a court order, a consent decree, “by its very nature, vests the court with equitable
discretion to enforce the obligations imposed on the parties.” United States v. Local 359, United
Seafood Workers, 55 F.3d 64, 68–69 (3d Cir. 1995) (citing EEOC v. Local 580, Int’l Ass’n of
Bridge, Structural & Ornamental Ironworkers, 925 F.2d 588, 593 (2d Cir. 1991) (“Though a
court cannot randomly expand or contract the terms agreed upon in a consent decree, judicial
discretion in flexing its supervisory and enforcement muscles is broad.”); Berger v. Heckler, 771
F.2d 1556, 1567–68 (2d Cir. 1985) (consent decrees are “hybrid” in the sense that, though
construed as contracts, “they are . . . enforced as orders”)). District courts have “the inherent
power to enforce a consent decree in response to a party’s non-compliance, and to modify a
consent decree in response to changed conditions.” Holland v. N.J. Dep’t of Corrections, 246
F.3d 267, 270 (3d Cir. 2001). A court does not have to hold a party in contempt in order to
exercise these powers. Id. at 283 n.14.
The compliance enforcement power is “not unlimited,” and may be exercised “only if
such compliance enforcement is essential to remedy the violation and thus provide the parties
with the relief originally bargained for in the consent order.” Id. at 283 (internal citation and
quotation marks omitted). “The court’s interest in protecting the integrity of . . . a [consent]
decree ‘justifies any reasonable action taken by the court to secure compliance.’” United Seafood
Workers, 55 F.3d at 69 (quoting Berger, 771 F.2d at 1568).
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III. DISCUSSION
In exercising its continuing jurisdiction over this matter to enforce the terms of the
Settlement Agreement,3 which was entered as an Order of the Court, the Court will enter an
Order requiring Defendants to pay the Monitor’s monthly invoices within thirty days of
receipt—in accordance with the Defendants’ contract with the Monitor, executed pursuant to the
Court’s May 14, 2013 Order adopting the parties’ Settlement Agreement—or be subject to
sanctions. The Court has been called upon to address Defendants’ failure to timely pay the
Monitor twice in the short span of two-and-a-half months. Both times, the Monitor suspended his
monitoring activities—albeit briefly—until he was paid. For the process contemplated in the
Settlement Agreement to be effectuated, the Monitor must be able to perform his duties as
outlined therein without these types of interruptions. Indeed, the Monitor expressed his concern
at the May 27, 2014 status conference that the ongoing problem with untimely payments
threatens his ability to retain the members of the professional team with whom he works. Thus,
for the Monitor and his team to perform their duties, Defendants must timely pay the Monitor—
as required by the Settlement Agreement and contract between Defendants and the Monitor.
A. 	The Monitor’s Role
As the Court noted at the February 2014 emergency telephonic status conference, the
Monitor’s work is “integral and essential” to the Settlement Agreement. By the terms of the
Settlement Agreement, the Monitor’s duties include: reviewing, modifying, and approving
Defendants’ implementation schedule and training procedures (Dkt. No. 689-1 at Parts VIII.1
and 	IX.2–5); 	advising 	Defendants 	regarding 	substantive 	requirements 	of 	the 	Settlement
3 “The District Court of the Virgin Islands will retain jurisdiction over this matter for the
purposes of enforcing this Settlement Agreement.” (Dkt. No. 689-1 at Part XI.1).
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Agreement (id. at Part X.H); resolving disputes between the parties (id. at Parts IX.2–3, IX.5);
and comprehensively reporting to the Court (id. at Part X.F–G).
It is clear from the terms of the Settlement Agreement that the Monitor’s work is
intimately woven into nearly all aspects of the parties’ plan for remedying the constitutional
violations at Golden Grove. Indeed, the case will not end until the Settlement Agreement
terminates, and the Settlement Agreement cannot terminate until the Monitor advises the Court
that Defendants have maintained compliance with the substantive provisions of the Settlement
Agreement for at least a year. (See id. at Part XI.2). For these reasons, the Court concludes that
the Monitor’s work is “essential to remedy the [constitutional] violation[s]” found to exist at
Golden Grove, and is instrumental to “provid[ing] the parties with the relief originally bargained
for in the consent order.” Holland, 246 F.3d at 283 (internal citation and quotation marks
omitted).
B. 	The Need for Relief
Defendants have now failed to timely pay the Monitor twice. After their first failure,
Defendants placed the blame squarely on the six-month period that it took to develop and
execute the contract with the Monitor, and Defendants’ own two-month internal process for
approving the contract. Defendants explained their second failure—two-and-a-half months after
their first failure—by stating that it was an “oversight.” (Dkt. No. 817 at 2).
Despite Defendants’ failures, it appears to the Court that the establishment of an escrow
account would not be the most effective way to ensure that the Monitor is timely paid. Director
Wilson and counsel for Defendants have represented to the Court that the money to pay the
Monitor is already in the Bureau of Corrections’ budget; therefore, there is no issue with getting
the money from the Government to pay the Monitor’s invoices. By their own explanation, the
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issue is that Defendants have failed to process the Monitor’s monthly invoices in a timely
manner. Moreover, adding another layer to the payment process in which the Court performs a
task that should properly be performed by the Bureau of Corrections—in order to correct a
problem that should be easily addressed by the Bureau of the Corrections—is not, in this Court’s
view, the solution. Accordingly, the Court will deny the Monitor’s request for the establishment
of an escrow account.
The Court finds, however, that it cannot ignore Defendants’ failures—now twice in the
space of two-and-a-half months—to timely pay the Monitor. Accordingly, the Court will enter an
Order requiring Defendants to pay the Monitor’s invoices within thirty days of receipt—in
accordance with the Settlement Agreement and Defendants’ contract with the Monitor—or be
subject to sanctions. The Court hopes that the threat of sanctions—which the Court will not
hesitate to impose if this problem persists—will result in the appropriate degree of attention
being paid by Defendants to the timely payment of the Monitor’s invoices.
C. 	The Court’s Inherent Power to Order Defendants to Promptly Pay the Monitor
The Court has found that the Monitor’s work is “essential to remedy the [constitutional]
violation[s]” found to exist at Golden Grove, and is instrumental to “provid[ing] the parties with
the relief originally bargained for in the consent order.” Holland, 246 F.3d at 283 (internal
citation 	and 	quotation 	marks 	omitted). 	Because 	the 	Monitor’s 	work 	is 	contingent 	upon
Defendants paying him—as they are obligated to do under the Settlement Agreement—and
because Defendants have now failed to timely pay the Monitor twice, the Court finds that
entering an Order requiring Defendants to pay the Monitor within thirty days of receipt of an
invoice—as required by the contract between Defendants and the Monitor—or be subject to
sanctions, is a “reasonable action taken . . . to secure compliance” and “protect[] the integrity of .
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. . [the] [consent] decree[.]”United Seafood Workers, 55 F.3d at 69 (quoting Berger, 771 F.2d at
1568).4 The Court enters this Order pursuant to its “inherent power to enforce [the Settlement
Agreement].” Holland, 246 F.3d at 270.5
IV. CONCLUSION
For the reasons explained above, the Court will deny the Monitor’s request for the
establishment of an escrow account, and will instead enter an Order requiring Defendants to pay
the Monitor’s monthly invoices within thirty days of receipt—in accordance with the Settlement
Agreement 	and 	Defendants’ 	contract 	with 	the 	Monitor—or 	be 	subject 	to 	sanctions. 	An
appropriate Order accompanies this Memorandum Opinion.
Date: June 6, 2014 	_______/s/________
WILMA A. LEWIS
Chief Judge
4 Counsel for Defendants acknowledged the Court’s power to enter such an Order at the May 27,
2014 status conference.
5 See Holland, 246 F.3d at 286 (noting that district courts “should be clear as to which inherent
power—compliance enforcement or modification—[they] are using[.]”). Here, Defendants are
obligated under the Settlement Agreement to pay the Monitor’s expenses, and Defendants are
obligated under their contract with the Monitor to pay the Monitor’s invoices within thirty days
of receipt. Given that Defendants have now failed to timely pay the Monitor twice in a two-and-
a-half month period, the Court’s Order requiring Defendants to pay the Monitor’s invoices
within thirty days of receipt is not a modification of the Settlement Agreement, but rather a
means of enforcing compliance with its terms. See United States v. Virgin Islands, 363 F.3d 276
(3d Cir. 2004) (holding, in the context of a consent decree, that this Court’s order requiring the
Government of the Virgin Islands to deposit funds into a trust fund the Court established in a
previous order which required the Department of Public Works to “complete certain repairs and
projects by specific deadlines,” was made “to force compliance with the District Court’s earlier
order[.]”); cf. Harris v. Philadelphia, 137 F.3d 209, 210, 212–13 (3d Cir. 1998) (finding that for
purposes of a consent decree under which “[t]he City agreed . . . to develop a management
information services (MIS) plan for tracking inmate population and to fulfill specified aspects of
the plan by certain deadlines,” the court’s order—after the City failed for years to implement the
plan—that the City “meet deadlines for implementation of the MIS plan under penalty of fines,”
was an impermissible modification of the consent decree, because the consent decree contained
no terms requiring the city to actually implement the MIS plan) (emphasis added).
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