Nickeo v. V.I. Tel. Corp.

Opinions of the United
1994 Decisions States Court of Appeals
for the Third Circuit
12-13-1994
Nickeo v. V.I. Tel. Corp.
Precedential or Non-Precedential:
Docket 92-7679
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Recommended Citation
"Nickeo v. V.I. Tel. Corp." (1994). 1994 Decisions. Paper 218.
http://digitalcommons.law.villanova.edu/thirdcircuit_1994/218
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UNITED STATES COURT OF APPEALS FOR THE THIRD CIRCUIT
_______________
NO. 92-7679
_______________
WILLIAM NICKEO
v.
VIRGIN ISLANDS TELEPHONE CORP.,
Appellant
______________
On Appeal from the District Court of the Virgin Islands
(D.C. Civil No. 90-00370)
_______________
Submitted Pursuant to Third Circuit LAR 34.1(a)
December 5, 1994
Before: SLOVITER, Chief Judge, SCIRICA,
and COWEN, Circuit Judges
(Filed December 13, 1994)
_______________
Michael C. Dunston
Law Office of Michael C. Dunston
Charlotte Amalie
St. Thomas, U. S. Virgin Islands 00802
Attorney for Appellant
George M. Miller
Miller & Iverson
Charlotte Amalie
St. Thomas, U. S. Virgin Islands 00802
Attorney for Appellee
OPINION OF THE COURT
SLOVITER, Chief Judge.
This is an interlocutory appeal from an order of the
District Court of the Virgin Islands denying defendant's motion
to dismiss a complaint seeking damages for termination of
plaintiff's employment under 42 U.S.C. § 1981 and the Virgin
Islands Wrongful Discharge Act. The district court held (1) that
the count filed under 42 U.S.C. § 1981 was actionable because the
Civil Rights Act of 1991 applies retroactively to claims pending
on the date of the Act's enactment, and (2) that the count filed
under the Virgin Islands Wrongful Discharge Act was actionable
because that Act does not require exhaustion of administrative
remedies. This court has jurisdiction over this appeal pursuant
to 28 U.S.C. § 1292(b).
I.
FACTS AND PROCEDURAL HISTORY
The appellant Virgin Islands Telephone Company
(hereinafter "VITELCO") is a privately owned utility providing
telephone service to the Virgin Islands under regulation of the
Virgin Islands Public Service Commission, an independent
administrative agency of the Virgin Islands government.
Plaintiff-Appellee William Nickeo was hired by VITELCO in 1972.
On October 23, 1989, Nickeo was terminated from his
position at VITELCO after an altercation with his supervisor.
Pursuant to the collective bargaining agreement between VITELCO
and United Steelworkers of America, Local Union No. 8713, Nickeo
filed a grievance following his dismissal, and the case went to
arbitration. On November 5, 1990, the arbitrator ruled that
Nickeo's dismissal was without proper cause, and Nickeo was
subsequently reinstated with full back pay.
On December 6, 1990, Nickeo filed a four-count
complaint in the District Court of the Virgin Islands seeking
compensatory and punitive damages as well as declaratory and
injunctive relief. Count II of the complaint alleges that
VITELCO's termination of Nickeo's employment violated 42 U.S.C. §
1981. Count IV of the complaint asserts a claim for wrongful
discharge against VITELCO under the Virgin Islands Wrongful
Discharge Act, 24 V.I.C. § 76 et seq.3
VITELCO moved to dismiss Counts II and IV of the
complaint, arguing that Nickeo could not state a claim under
section 1981 because of the decision of Patterson v. McLean
Credit Union, 491 U.S. 164 (1989), holding that section 1981 was
inapplicable to claims such as discriminatory discharge from
employment. VITELCO also argued that Nickeo's claim under the
Wrongful Discharge Act must fail because Nickeo had failed to
exhaust his administrative remedies as required under that Act.
The district court denied VITELCO's motion to dismiss
on April 29, 1992. The court noted that Patterson would have
precluded Nickeo's section 1981 claim, but held that the claim
was valid because section 101(2)(b) of the Civil Rights Act of
1991 amended section 1981 to cover the "performance, modification
and termination of contracts." Pub. L. 102-166, § 101(2)(b), 105
Stat. 1071, codified at 42 U.S.C. § 1981(b) (Supp. III 1991).
1
. Apparently the other two counts remain pending.
The court interpreted the 1991 Act to apply retroactively to
section 1981 claims pending on the date of the Act's enactment.
Although Nickeo had concededly not exhausted the administrative
procedures available under the Virgin Islands Wrongful Discharge
Act, the court held that the Act does not require exhaustion of
administrative remedies prior to seeking judicial relief.
On VITELCO's motion, the district court amended its
order and certified the following two issues for appeal pursuant
to 28 U.S.C. § 1292(b):
1. Whether the Virgin Islands Wrongful
Discharge Act, 24 V.I.C. [§] 76 et seq.,
requires exhaustion of administrative
remedies prior to seeking judicial relief,
and
2. Whether the Civil Rights Act of 1991
applies retroactively to 42 U.S.C. [§] 1981
claims pending on the date of the Act's
enactment.
VITELCO filed a petition for permission to appeal which
this court granted. VITELCO promptly filed an appeal with this
court addressing these two issues. Both issues present pure
questions of law and this court's review is therefore plenary.
D.P. Enterprises, Inc. v. Bucks County Community College, 725
F.2d 943, 944 (3d Cir. 1984).
II.
DISCUSSION
A. Retroactivity of the Civil Rights Act of 1991
The issue involving the retroactivity of section 101 of
the Civil Rights Act of 1991 was unresolved in this circuit at
the time this appeal was filed. The Supreme Court, however,
recently addressed this precise issue in Rivers v. Roadway
Express, Inc., 114 S. Ct. 1510 (1994). In Rivers, the Court held
that section 101 of the 1991 Act, which defines the scope of
section 1981 actions to include all phases of a contractual
relationship including termination, does not apply to cases
pending on the date the Act was passed. The Court rejected the
retroactive application of that section because it "increas[ed]
liability . . . [and] also . . . establish[ed] a new standard of
conduct." Id. at 1515. In the companion case of Landgraf v. USI
Film Products, 114 S. Ct. 1483 (1994), the Court held that
section 102 of the Civil Rights Act of 1991 granting a jury trial
to plaintiffs who seek compensatory or punitive damages also does
not apply retroactively.
The Rivers decision is controlling in this case. There
is no dispute that Nickeo's section 1981 claim, which was filed
on December 6, 1990, was pending on November 21, 1991, the date
the Civil Rights Act of 1991 was passed. Nickeo concedes that
recent relevant caselaw precludes retroactive application of 42
U.S.C. § 1981 to his claim. See Rivers, 114 S. Ct. at 1515; see
also Hook v. Ernst & Young, 28 F.3d 366, 371-73 (3d Cir. 1994)
(refusing to apply retroactively the expansive causation standard
of section 107 of the 1991 Act).
It follows that Count II is barred under the Supreme
Court's decision in Patterson, 491 U.S. at 171, because the
alleged discrimination arose well after the formation of the
contract between Nickeo and VITELCO and did not interfere with
Nickeo's right to enforce established provisions of the contract.
Therefore, the district court's denial of VITELCO's
motion to dismiss Count II of Nickeo's complaint must be
reversed.
B. Exhaustion of Administrative Remedies under the
Virgin Islands Wrongful Discharge Act
VITELCO also challenges the district court's conclusion
that the Virgin Islands Wrongful Discharge Act, 24 V.I.C. §§ 76-
79, does not require Nickeo to exhaust his administrative
remedies prior to seeking judicial relief. As discussed below,
we find no merit in VITELCO's arguments and therefore affirm the
district court's denial of VITELCO's motion to dismiss Nickeo's
claim under the Wrongful Discharge Act.4
Section 76(a) of that Act includes a list of
permissible bases for the dismissal of an employee. See 24
V.I.C. § 76(a). The Act then provides that "[a]ny employee
discharged for reasons other than those stated in subsection (a)
of this section shall be considered to have been wrongfully
discharged." Id. § 76(c). Section 77 of the Act states that
"[a]ny employee discharged for any reason other than those
contained in section 76 of this chapter may . . . file a written
complaint with the Commissioner." Id. § 77(a) (emphasis added).
2
. In resolving the legal issue of whether exhaustion of
administrative remedies is required under §§ 76-79, we note that
VITELCO also argues that Nickeo's wrongful discharge claim was
not cognizable because the collective bargaining agreement
"modified by contract" Nickeo's rights within the meaning of 24
V.I.C. § 76(a). We express no opinion on that issue which was
not reached by the district court.
The Commissioner is empowered to hold a hearing on the matter,
issue findings, and, if appropriate, serve upon the employer an
order requiring that the employee be reinstated with back pay.
Id. § 77(b)-(c). The Commissioner may request the Territorial
Court to enforce the order. Id. § 78.
Section 79, at issue here, provides, in part:
In addition to the remedies provided by
sections 77 and 78 of this chapter, any
wrongfully discharged employee may bring an
action for compensatory and punitive damages
in any court of competent jurisdiction
against any employer who has violated the
provisions of section 76 of this chapter.
Id. § 79 (emphasis added).
Both parties concede that no language in the Wrongful
Discharge Act explicitly states that the administrative procedure
outlined in section 77 is a prerequisite to filing an action
under section 79. Despite the apparently permissive wording of
the Act, VITELCO bases its argument that administrative
exhaustion is required before the initiation of a lawsuit on the
fact that the statute provides that the administrative remedy is
available to "[a]ny employee", see 24 V.I.C § 77(a), whereas the
judicial remedy by contrast is available to "any wrongfully
discharged employee." 24 V.I.C. § 79. This difference, VITELCO
reasons, implies that an administrative determination of the
wrongfulness of the discharge must be made prior to the filing of
the lawsuit.
VITELCO also argues that the references in section 79
to compensatory and punitive damages are designed to refer to
remedies "additional" to those to which the "wrongfully
discharged employee" could be entitled upon administrative
exhaustion, such as reinstatement with back pay.
Notwithstanding the ingenuity of VITELCO's argument, we
conclude that it is unpersuasive in light of the plain language
of the statute, which must always be the starting point in
interpreting a statute. See Barnes v. Cohen, 749 F.2d 1009, 1013
(3d Cir. 1984), cert. denied, 471 U.S. 1061 (1985). We find no
support in the plain language for VITELCO's contention that
exhaustion is required. First, and most significantly, the
statute explicitly uses the permissive term "may" with reference
to both the filing of an administrative action and the filing of
a complaint. Second, section 79 provides that the judicial
remedy is available "[i]n addition to the remedies provided by
sections 77 and 78." 24 V.I.C. § 79 (emphasis added). There is
nothing to suggest that the judicial remedy is only available
after the plaintiff has filed and pursued a claim pursuant to
section 77. Thus, while the sequential nature of the provisions
advocated by VITELCO might have been a reasonable approach for
the Virgin Islands legislature to adopt, the statute simply
contains no language that adopts it.5
3
. In most of the Third Circuit cases cited by VITELCO in which
we required exhaustion, the administrative procedures had already
been invoked. See Babcock and Wilcox Co. v. Marshall, 610 F.2d
1128 (3d Cir. 1979); First Jersey Securities, Inc. v. Bergen, 605
F.2d 690 (3d Cir. 1979), cert. denied, 444 U.S. 1074 (1980); see
also Daniel v. St. Thomas Dairies, Inc., 27 V.I. 120 (Terr. Ct.
1992). In contrast, we did not require exhaustion where
administrative remedies had not been invoked. See, e.g., Cerro
Metal Products v. Marshall, 620 F.2d 964 (3d Cir. 1980). In the
only other case cited invoking exhaustion, the statutory language
VITELCO next cites Virgin Islands cases interpreting
the term "may" in a manner that, if employed here, would require
exhaustion of administrative remedies prior to the filing of a
complaint in the district court. These examples are
unconvincing. In Heywood v. Cruzan Motors, 792 F.2d 367 (3d Cir.
1986), the statute that we construed to require exhaustion prior
to the filing of a complaint in court identified the eligible
class of persons who could sue as those "aggrieved by the
decision of [the agency]." Id. at 370 n.1 (quoting 12A V.I.C. §
7(b), repealed June 24, 1987, No. 5265, § 707(h). Sess. L. 1987.
p. 81). Thus, the language of that statute explicitly limited
the cause of action to cases where an administrative remedy had
been pursued.
Similarly, VITELCO's reliance on unreported cases such
as Wynter v. Dowson Holding Co., Civ. No. 86-105 (D.V.I. Feb. 11,
1991), and Theodore v. L.S. Holding, Inc., Civ. No. 1987/47
(D.V.I. Oct. 19, 1988), which addressed the Virgin Islands
employment discrimination statute, 24 V.I.C. § 451 et seq., is
unpersuasive. That statute not only limits judicial review to
"person[s] aggrieved by a final order of the [agency]," see id. §
457(a), but also states that "[n]o objection that has not been
(..continued)
clearly suggested such a requirement. See Lyons v. U.S.
Marshals, 840 F.2d 202, 205-07 (3d Cir. 1988) (remanding for a
determination of whether an exception to the exhaustion
requirement applied). Because we find that the statutory
language at issue in this case suggests that exhaustion is not
required, we decline to exercise whatever "sound judicial
discretion" we may have to impose such a requirement. Cerro, 620
F.2d at 970.
urged before the . . . [agency] shall be considered by the court
unless the failure or neglect to urge such objection is excused
because of extraordinary circumstances." Id. § 457(b). Thus,
unlike the Wrongful Discharge Act, the employment discrimination
law explicitly requires that the administrative procedure be
completed prior to obtaining judicial review.
Indeed, the examples cited by VITELCO demonstrate that
the Virgin Islands legislature was well aware how to impose an
exhaustion requirement prior to judicial review if it so
intended, leading us to the inference that the legislature did
not intend to impose a requirement of exhaustion.6
Finally, we note that the courts of the Virgin Islands
have uniformly declined to impose a requirement that plaintiffs
exhaust their administrative remedies prior to filing actions
brought under section 79. See, e.g., Diaz v. Pueblo Int'l, Inc.,
23 V.I. 346, 351-52 (Terr. Ct. 1988) (legislative history of the
Wrongful Discharge Act fails to support conclusion that
legislature intended exhaustion doctrine to apply); Ravariere v.
4
. VITELCO's reliance upon the statement of legislative purpose
of the chapter in which §§ 76-79 are found is also unconvincing.
That statement provides that "[t]he purpose of this chapter is to
encourage the friendly adjustment of employer-employee disputes
through the practice and procedure of collective bargaining." 24
V.I.C. § 61. VITELCO reasons that this language manifests a
legislative preference for the more flexible procedures available
in the administrative process. Although the Virgin Islands
legislature may well have intended to encourage resolution of
employer-employee disputes, there is no indication how the
legislature sought to achieve that goal. Indeed, the legislature
may have determined that an additional judicial remedy was needed
for employees in order to balance possible power disparities
between employees and employers.
ADT Security Systems of the V.I., Inc., Civ. No. 1991-136 (D.V.I.
Oct. 4, 1991) (same); see also Daniel v. St. Thomas Dairies,
Inc., 27 V.I. 120, 123-24 (Terr. Ct. 1992) (noting that the
Wrongful Discharge Act does not require exhaustion of
administrative remedies, but holding that once a plaintiff has
elected the administrative remedy available under section 77,
exhaustion is required); General Offshore Corp. v. Farrelly, 743
F. Supp. 1177, 1181 (D.V.I. 1990) (suggesting that a plaintiff may
file an action under section 79 or "[i]nstead, or in addition"
may file for administrative review). While these decisions are
not binding on this court, they lend further support to the
district court's conclusion that the plain language of the
Wrongful Discharge Act does not impose an exhaustion requirement
as a condition for actions brought under section 79.
III.
CONCLUSION
For the foregoing reasons, we will reverse the district
court's denial of VITELCO's motion to dismiss Nickeo's section
1981 claim, affirm the district court's denial of VITELCO's
motion to dismiss Nickeo's claim under the Virgin Islands
Wrongful Discharge Act, and remand for further proceedings
consistent with this opinion.