Golden v. Government of the Virgin Islands , 38 F. App'x 832 ( 2002 )

Opinions of the United
2002 Decisions States Court of Appeals
for the Third Circuit
7-19-2002
Golden v. Govt of VI
Precedential or Non-Precedential: Non-Precedential
Docket No. 02-1069
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"Golden v. Govt of VI" (2002). 2002 Decisions. Paper 414.
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NOT PRECEDENTIAL
UNITED STATES COURT OF APPEALS
FOR THE THIRD CIRCUIT
No. 02-1069
ANNE GOLDEN, ON BEHALF OF HERSELF AND ALL OTHER TAXPAYERS
SIMILARLY SITUATED
v.
GOVERNMENT OF THE VIRGIN ISLANDS, BUREAU OF INTERNAL REVENUE;
CHARLES TURNBULL, IN HIS OFFICIAL CAPACITY AS GOVERNOR OF
THE U.S. VIRGIN ISLANDS;
LOUIS WILLIS, IN HIS OFFICIAL CAPACITY AS DIRECTOR OF THE
VIRGIN ISLANDS BUREAU OF INTERNAL REVENUE,
Appe
Appeal from the District Court of the Virgin Islands
Division of St. Thomas
(D.C. Civil Action No. 01-cv-00162)
District Judge: Honorable Thomas K. Moore
Argued May 13, 2002
Before: AMBRO, FUENTES and GARTH, Circuit Judges
(Opinion filed: July 19, 2002)
Julio A. Brady, Esquire (Argued)
3009 Orange Grove, Suite 9
Christiansted, St. Croix
USVI, 00820
Attorney for Appellee
Iver A. Stridiron
Attorney General
Elliott McIver Davis
Solicitor General
Joanne E. Bozzuto (Argued)
Special Assistant Attorney General
Office of Attorney General of Virg
Department of Justice
48B-50C Kronprindsens Gade,
GERS Building, 2nd Floor
Charlotte Amalie, St. Thomas
USVI, 00802
Richard M. Prendergast
Office of Attorney General of Virg
6040 Castle Coakley
Christiansted, St. Croix
USVI, 00820
Attorneys for Appellants
OPINION
AMBRO, Circuit Judge
In this case, the District Court of the Virgin Islands erred by allowing the parties
to stipulate as to Plaintiff’s standing. Accordingly, we reverse and remand for further
factual findings on this jurisdictional prerequisite.
I.
The Economic Growth and Tax Relief Reconciliation Act of 2001, Pub. L. No.
107-16, 115 Stat. 38 (codified as amended in scattered sections of 26 U.S.C.) (the "Act"),
lowered the tax rate from fifteen to ten percent for the first $6,000, $10,000, and $12,000
of taxable income for singles, heads of households, and married couples filing jointly,
respectively. Signed into law on June 7, 2001, the Act made the new ten percent tax
bracket retroactive to January 1, 2001. However, in lieu of receiving the benefit of the
ten percent rate for tax year 2001, the Act authorized a five percent tax credit paid to
most taxpayers through an advance refund check representing the difference between the
fifteen and ten percent rates. 26 U.S.C. 6428(a). In an effort to stimulate the economy,
the Act provided that taxpayers should receive these refunds "as rapidly as possible, and
to the extent practicable, before October 1 of 2001." 26 U.S.C. 6428(e)(3). Because
the Act provided for the payment of refunds prior to the filing of tax year 2001 returns,
taxpayers received refunds based on information reported on their tax year 2000 returns.
Finally, the Act provided that no refunds would occur after December 31, 2001. 26
U.S.C. 6428(e)(4). If a taxpayer did not receive her full refund or received no refund
at all before that date, she could claim a "rate reduction credit" on her tax year 2001
returns. See H.R. Conf. Rep. No. 107-84, at 126-27 (2001) (describing the rate reduction
credit and advance refund mechanisms).
48 U.S.C. 1397 made the Act’s provisions applicable to the Virgin Islands and
its taxpayers. Soon after the Act’s passage, the Virgin Islands Bureau of Internal
Revenue (the "VIBIR") announced that, due to budgetary and administrative constraints,
it could not process the refunds prior to the December 31st deadline.
On September 5, 2001, Leo D. Goubourn and Anne Golden, purportedly on
behalf of themselves and all other similarly situated Virgin Islands taxpayers, filed a
complaint in the District Court challenging the VIBIR’s decision. The complaint sought
(1) an injunction compelling the VIBIR to issue the refunds in compliance with the Act,
and (2) a declaration that the VIBIR’s decision was in violation of the Act and 1397.
Six days later, Golden amended the complaint to specify herself as the sole named
plaintiff. On October 10th, Golden filed her motion for a preliminary injunction, and
the VIBIR responded with its motion to dismiss or, in the alternative, for summary
judgment. The District Court held a consolidated hearing for both motions on November
26, 2001. That same day, it issued findings of fact and conclusions of law in which it
awarded Golden declaratory relief but granted the VIBIR’s motion for summary
judgment as to the injunctive relief claim. A final order followed on November 30th,
and the VIBIR filed a timely notice of appeal limited to the District Court’s grant of
declaratory relief on December 27th.
II.
On appeal, we need only address the threshold jurisdictional issue of Golden’s
standing. To qualify for an advance refund, and thereby show standing to challenge the
VIBIR’s decision, Golden must establish that she filed a return for tax year 2000 and was
otherwise fully eligible for an advance refund. Before the District Court both parties
stipulated that Golden had filed these returns. Without further factual inquiry the
District Court held that Golden had standing based on this stipulation alone.
This stipulation could not confer standing on Golden. Because "standing is an
Article III requirement for jurisdiction, the parties do not have the power to confer such
jurisdiction upon the Court by conceding the standing of certain plaintiffs." Barhold v.
Rodriguez, 863 F.2d 233, 234 (2d Cir. 1988); see Wilson v. Glenwood Intermountain
Properties, 98 F.3d 590, 593 (10th Cir. 1996) (rejecting "[t]he district court’s finding that
defendants conceded plaintiffs had standing" because "parties cannot confer subject
matter jurisdiction on the courts by agreement").
Further, there is no record evidence from which we can independently evaluate
Golden’s standing. We recognize that this absence of evidence would normally be fatal
to her complaint. Lujan v. Defenders of Wildlife, 504 U.S. 555, 561 (1992) (stating that
"[t]he party invoking federal jurisdiction bears the burden" of proving standing); Joint
Stock Society v. UDV North America, Inc., 266 F.3d 164, 175 (3d Cir. 2001).
Nevertheless, we have recognized our right to remand, rather than dismiss, litigation
where further development of the record will assist our review of a district court’s
standing determination. New Jersey Coalition of Rooming and Boarding House Owners
v. Mayor and Council of the City of Asbury Park, 152 F.3d 217, 220 (3d Cir. 1998)
(remanding because "the district court made insufficient factual findings for us to review
its standing determination."). We find the exercise of that power most appropriate here,
particularly because the record illustrates that, but for the stipulation, Golden was willing
to introduce testimony and evidence on this issue.
III.
For the foregoing reasons, we vacate the District Court’s judgment and remand for
further development of the record on the issue of Golden’s standing.
TO THE CLERK:
Please file the foregoing Opinion.
By the Court,
/s/ Thomas L. Ambro
Circuit Judge