Ocwen USVI Services, LLC v. Director, Virgin Islands Bureau of Internal Revenue(ECF No. 262)

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IN THE DISTRICT COURT OF THE VIRGIN ISLANDS

DIVISION OF ST. THOMAS AND ST. JOHN

OCWEN USVI SERVICES, LLC, AS )

SUCCESSOR IN INTEREST TO OCWEN ) CASE NO. 3:24-cv-00014

MORTGAGE SERVICING, INC., )

Petitioner, )

v. )

)

DIRECTOR, VIRGIN ISLANDS BUREAU )

OF INTERNAL REVENUE, )

Respondent. )

MEMORANDUM OPINION and ORDER

Before the Court is Petitioner Ocwen USVI Services, LLC's ("Petitioner" or "Ocwen") motion [ECF 46] for disqualification and its accompanying memorandum in support thereof [ECF 47].¹The motion seeks to disqualify Attorney James N. Mastracchio ("Mastracchio")--an attorney who also engages in the private practice of law--from serving as co-counsel for Respondent Director of the Virgin Islands Bureau of Internal Revenue ("Respondent" or "VIBIR").²As the basis for this disqualification, Ocwen argues that only the Virgin Islands Attorney General ("Attorney General") and those assistant attorney generals appointed pursuant to 3 V.I.C. § 113 may represent VIBIR. VIBIR opposes the motion [ECF 54], with Ocwen having filed a reply [ECF 55]. For the reasons to follow, the motion will be denied.

I. BACKGROUND

On March 7, 2024, Ocwen filed a petition for a redetermination of deficiencies set forth in a notice of deficiency issued by VIBIR on December 14, 2023. [ECF 1].³The petition alleges that

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the notice incorrectly determined a deficiency in Ocwen's income tax in the amount of $12,948,684 for the 2019 tax year. Id. ¶¶ 1.B-3. The petition further alleges that the entire deficiency amount is in dispute and that Ocwen is actually owed a refund of $1,348,518. Id. ¶¶ 3 and 4.C.

On June 10, 2024, Mastracchio entered his appearance as co-counsel for VIBIR. [ECF 43]. Mastracchio is a private attorney who is a member of the New York and Washington, D.C. bars. See [ECF 54-1] at 1-2. Subsequent to his appearance, the Governor of the Virgin Islands ("Governor") and the Attorney General executed a written designation and appointment, wherein Mastracchio was specially appointed as an assistant attorney general. See generally id. Although executed on June 28, 2024, the document provides that Mastracchio's special designation and admission is nunc pro tunc to March 2, 2024.⁴ Id. at 3. According to the appointment, Mastracchio possesses experience, expertise, and knowledge in tax litigation. Id. at 1. The appointment further provides that the Virgin Islands Department of Justice ("VIDOJ") desires to have Mastracchio represent the Virgin Islands Government ("Government") in various cases on a per diem basis, with such representation to include tax matters brought before this Court. Id. at 1-2. By way of authority, the appointment provides that the Governor and/or the Attorney General is/are:

. . . empowered and authorized pursuant to 3 V.I.C Chapter 8 to supervise and administer the Office of the Attorney General; and

. . . authorized to employ, appoint and designate such assistants as needed for the performance of the duties assigned by law; and

. . . statutorily empowered to appear for and represent the executive branch of the Government of the United States Virgin Islands, and all departments, boards, commissions, agencies, instrumentalities or officers thereof, in all legal actions . . . ."

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Id. at 1, 3. It further provides that Mastracchio is to be supervised by VIDOJ's Chief of the Civil Division, with the latter responsible for assigning tax-related cases to Mastracchio and reviewing / approving Mastracchio's drafts before same are filed in any court proceeding. Id. at 2. In moving to disqualify Mastracchio, Ocwen argues that under the Virgin Islands Code, only the Attorney General and/or assistant attorneys general are permitted to represent VIBIR in tax deficiency cases. [ECF 47] at 7-8. It further argues that these assistant attorneys general are prohibited from engaging in the private practice of law. Id. at 8. VIBIR, in turn, challenges Ocwen's standing to even file the motion. [ECF 54] at 3-5. Assuming arguendo that standing does exist, VIBIR counters that Ocwen purposefully misinterprets the Virgin Islands Code sections that it cites, arguing that the plain text of these statutes permits the retention of outside counsel such as Mastracchio. Id. at 3. It further contends there is a "wealth of legal authority" that supports such appointments, as well as policy considerations that justify the Government's "long-held practice"

of hiring outside counsel. Id.

II. DISCUSSION

A. Standing

VIBIR contends that Ocwen lacks standing to seek the disqualification of Mastracchio. [ECF 54] at 3-5. In support thereof, VIBIR argues that Ocwen has failed to establish a concrete and particularized injury resulting from Mastracchio's appointment. Id. at 4. It further maintains that such an injury must be the type that the statutory provisions it invokes are designed to guard against. Id. at 4-5. Ocwen counters that it is subject to "potential" injury, maintaining that "where a party's attorney is unauthorized, that party may use the lack of authorization to overthrow results it does not like." [ECF 55] ¶ 4. In an effort to show that such an injury is not hypothetical, Ocwen states that

[h]istory has shown that there is a substantial risk that the Attorney General for the Virgin Islands may argue lack of authorization to

invalidate a determination adverse to the government. As explained

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in [Ocwen's] Supporting Memorandum, in Gov't of the V.I. v. 0.459 Acres of Land, 40 V.I. 85 (Terr. Ct. V.I. 1999), the Assistant Attorney General representing the government agreed to submit an issue to binding arbitration. 40 V.I. at 86-87. After the arbitration, the Attorney General argued that his Assistant Attorney General had

"exceeded his authority" by doing so. 40 V.I. at 87. The Attorney General was ultimately unsuccessful there. But there is no guarantee he would be unsuccessful here, where a private attorney, rather than an Assistant Attorney General is involved.

Id. ¶ 10.

Additionally, Ocwen argues it has sustained and continues to sustain injury as VIBIR is in violation of 33 V.I.C. § 1532. Id. ¶ 13. Pursuant to that statute, it is unlawful for any officer or employee of the Virgin Islands Government to divulge or make known in any manner whatsoever not provided by law to any person the amount or source of income, profits, losses, expenditures, or any particular thereof, set forth or disclosed in any . . . tax return or attachment thereto. Id. According to Ocwen, since the Attorney General is precluded from designating and appointing Mastracchio as a special assistant attorney general, VIBIR (and/or VIDOJ) is in violation of section 1532 by allowing Mastracchio to have access to Ocwen's tax records/returns. Id. ¶¶ 14, 16-47. It further argues that the penalties provided under the statute, including possible imprisonment, establish that injury is not speculative. Id. ¶ 14.

"[T]he irreducible constitutional minimum of standing contains three elements." Lujan v. Defenders of Wildlife, 504 U.S. 555, 560 (1992).

First, the [petitioner] must have suffered an "injury in fact"—an invasion of a legally protected interest which is (a) concrete and particularized and (b) "actual or imminent, not 'conjectural' or 'hypothetical,'" Second, there must be a causal connection between the injury and the conduct complained of—the injury has to be

"fairly ... trace[able] to the challenged action of the [respondent], and not ... th[e] result [of] the independent action of some third party not before the court." Third, it must be "likely," as opposed to merely "speculative," that the injury will be "redressed by a favorable decision."

Lujan, 504 U.S. 560-61 (internal citations omitted).

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Turning first to the contention that were VIBIR to receive an adverse ruling in this matter it might seek a reversal on the basis that its special assistant attorney general (Mastracchio) was unauthorized to serve in said capacity, the Court finds this argument conjectural notwithstanding Ocwen's reliance on Gov't of the Virgin Islands v. 0.459 Acres of Land, 1999 WL 359185 (Terr. V.I. Feb. 23, 1999).⁵Simply stated, the Court finds that VIBIR would be estopped from making such an argument, at least in good faith. As for the statutory basis for standing that Ocwen asserts under section 1532, this presents a more complex question that ordinarily would require extensive deliberation. However, the standing issue will necessarily be moot should the Court determine VIDOJ possesses the authority to designate and appoint special assistant attorneys general. As such a determination is made infra, the Court need not delve into the issue of standing any further.

B. Statutory Authority

Title 3, Chapter 8 of the Virgin Islands Code establishes the VIDOJ and outlines the powers and duties of the Attorney General. Section 112 of Title 3 provides that the Attorney General shall be the head of the VIDOJ, with the Attorney General to be appointed by the Governor. Section 113(a) of Title 3, in turn, provides that the VIDOJ shall include such assistant attorneys general as the Governor deems necessary for the proper administration of the VIDOJ, with these attorneys to be appointed by the Governor. This statute further provides that any assistant attorneys general appointed "under this section" shall perform such duties as the Attorney General prescribes. V.I. C ODE ANN. tit. 3, § 113(b). Finally, section 117 of Title 3 prohibits the Attorney General and assistant attorneys general from engaging in private practice or associating "directly or indirectly with any attorney in private practice."

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Section 114 of Title 3 sets forth the statutory powers and duties that the Attorney General

"shall have." These include the powers and duties

. . . to appear for and represent the executive branch of the Government of the Virgin Islands before the courts in all civil proceedings in which the said Government, or any executive department, board, commission, agency, instrumentality or officer thereof is interested

. . .

. . . to employ such skilled experts, scientists, technicians, or other specially qualified persons as he deems necessary to aid him in the preparation or trial of actions or proceedings

V.I. CODE ANN. tit. 3, § 114(a)(1) and (5). Under Title 33, section 1732 of the Virgin Islands Code, the United States Attorney is to represent the Director of VIBIR in all proceedings before this Court which are authorized by the Virgin Islands income tax law. Section 114(a)(6) of Title 3, however, transfers this power and duty to the Attorney General. In pertinent part, this section provides that

[a]ll duties and functions with respect to the Government of the

Virgin Islands, or any department, board, commission, agency,

instrumentality or officer thereof, heretofore assigned to the United States attorney solely by virtue of laws of the Virgin Islands are

hereby transferred to the Attorney General

V.I. CODE ANN. tit. 3, § 114(a)(6).

(1) Title 3, Sections 113 and 114 of the Virgin Islands Code

Confronting the Court is the issue of whether Virgin Islands statutory law prohibits the appointment and/or designation of special assistant attorneys general to serve as co-counsel to the VIDOJ in its representation of the VIBIR and/or its director in tax law cases. Ocwen contends that it does, maintaining that the Virgin Islands Code is clear on this point. Specifically, Ocwen asserts that:

[t]he Attorney General is required to represent Respondent in all

deficiency cases. This case is an action for redetermination of

deficiency, authorized by 33 V.I.C. §§ 943(a) and 944. The statute

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provides that "[i]n all proceedings before the district court which are authorized by [33 V.I.C. 680-1966] or by the Virgin Islands income tax law, the Director shall be represented by the United States attorney . . . ." 33 V.I.C. § 1732 (emphasis added). And, under 3 V.I.C. § 114(a)(6), that duty was "transferred to the Attorney General."

[ECF 47] ¶ 11. Ocwen further argues that the Attorney General is statutorily prohibited under Title 3, sections 113(b) and 117 from delegating this representation to any outside attorney and instead, may only delegate duties to assistant attorneys general, none of whom are permitted to engage in the private practice of law. Id. ¶ 14. Ocwen then points to several statutes in the Virgin Islands Code that do allow for the retention of outside counsel.⁶Id. ¶ 15. According to Ocwen, these statutes are the exceptions to the general rules of sections 113 and 114 of Title 3 and without such express statutory authority, the Government is not authorized to hire private counsel, including doing so in tax litigation such as the present lawsuit. Id. ¶¶ 15-17. It argues that any other interpretation would result in those statutes that do expressly carve out the exception to be entirely redundant. Id. ¶ 15. Ocwen points to the negative-implication canon--expression unius est exclusion alterius--which provides that the legislature's explicit expression of one thing indicates its intention to exclude other exceptions. Id. ¶ 13 and n. 8; citing Hartford Underwriters Ins. Co.

v. Union Planters Bank, 530 U.S. 1 (2000) and Keeley v. Loomis Fargo & Co., 183 F.3d 257, 265- 66 (3d Cir. 1999).

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VIBIR counters that sections 113 and 114 contain no language barring the Attorney General from "contracting with private counsel as a part of its legal operations."^{7, 8}[ECF 54] at 6. It further argues that section 114 is written in such an "open-ended way" to allow the Attorney General the latitude to determine how best to fulfill his or her duties. Id. at 6-7. Given that there is no statutory

7 In its opposition, VIBIR commences its statutory authority argument by pointing to section 2(b) of the Revised Organic Act of 1954 as being the source of the Government's "explicit right and capacity to actively participate in litigation." [ECF 54] at 6. In doing so, VIBIR asserts that the VIDOJ has historically interpreted section 2(b) as authorizing the appointment of outside counsel. Section 2(b) of the Revised Organic Act provides:

The government of the Virgin Islands shall have the powers set forth in this Act and shall have the right to sue by such name and in cases arising out of contract, to be sued: Provided, That no tort action shall be brought against the government of the Virgin Islands or against any officer or employee thereof in his official capacity without the consent of the legislature constituted by this Act. The capital and seat of government of the Virgin Islands shall be located at the city of

Charlotte Amalie, in the island of Saint Thomas.

VIBIR provides no further elaboration on how section 2(b) purportedly grants VIDOJ the authority to appoint specialized private counsel. See [ECF 54] at 6. Instead, it merely cites to two cases in footnote 13 of its opposition as support for its assertion that "the Department has read § 2(b) to sanction the appointment of counsel to represent its legal interest." (citing People of Virgin Islands v. Brodhurst, 148 F.2d 636, 637 (3d Cir. 1945) and H.I. Hettinger & Co v. Mun. of St Thomas & St John, 187 F.2d 774, 774 (3d Cir. 1951)). Id. at 6, n. 13. Although the cited cases show the appearance of an Assistant U.S. Attorney on behalf of the Government, neither case explicitly mentions section 2(b) of the 1954 Revised Organic Act. Nor does VIBIR attempt to explain to the Court how the cases interpret or can be analogized to the powers provided under section 2(b). See generally id. It is not this Court's duty to do VIBIR's heavy lifting for it, so to speak, and the Court chooses not to entertain VIBIR's lackluster argument on this point in the Court's present order.

8 VIBIR also argues that Executive Orders Nos. 9 and 287-1987 "reinforce" the government's authority to hire private counsel. [ECF 54] at 8-9. According to VIBIR, section 11 of Executive Order No. 9 established a legal department (i.e., the VIDOJ) to provide legal services to the Governor and government of the Virgin Islands. [ECF 54] at 8-9; see also [ECF 54-2] at 24-25. This was purportedly codified in the former section 1 of Title 3 and can now be found in sections 111 and et seq. of Title 3. [ECF 54] at 9; see also V.I. CODE ANN. tit. 3, § 1 (history). As for Executive Order No. 287-1987, it purportedly empowers the Governor to hire and appoint private counsel for government purposes and "dovetails" the broad language of sections 113 and 114 of Title 3. [ECF 54] at 9. The section relied upon by VIBIR--section 6(a)--reads as follows

[t]here shall be a Counsel to the Attorney General appointed by the Governor. The

Counsel shall perform such duties as the Attorney General may prescribe. The

Counsel shall serve in a confidential capacity to the Attorney General and shall be

in the unclassified service.

[ECF 54-3] at 4. The reported purpose of Executive Order No. 287-1987 was to reorganize the VIDOJ. Id. at 1. The Court does not find that either Executive Order stands for the proposition extended by VIBIR. Executive Order No. 9 is now encapsulated in sections 111 and et seq. of Title 3; thus those statutes control. Executive Order No. 287-1987 speaks of "a" counsel, in the singular, as opposed to the multitude of special assistant attorneys general who are designated and appointed by the Attorney General and/or the Governor at various times. It further provides that "there shall be a Counsel to the Attorney General," which reflects that such counsel represents the Attorney General and its office, as opposed to being designated and appointed to serve as co-counsel with the Attorney General in the representation of a government body/head. (emphasis added).

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language in these sections that prohibits the appointment of special assistant attorneys general, VIBIR asserts that the sections, in effect, codify the longstanding tradition of the VIDOJ in engaging "private attorneys to assist in legal representation when needed."⁹Id. at 6. Finally, VIBIR points out that it is, in fact, being represented by the Attorney General in this matter as required under the statute, with its outside counsel (Mastracchio) serving as co-counsel. Id. at 13-20. The Court turns first to the fourteen statutes cited by Ocwen that expressly permit various government bodies/heads to retain outside counsel.¹⁰By way of example, section 51 of Title 18 provides that the "Joint Board of Elections shall have the discretion to retain the Attorney General of the Virgin Islands to serve as counsel for each board of elections, or to retain an independent Counsel." Section 1223(a) of Title 3 provides that "[n]otwithstanding 3 V.I.C., 114(6), the Director of the Virgin Islands Bureau of Narcotics and Dangerous Drugs Control may employ attorneys, or contract with attorneys, as needed." Section 3(j) of Title 27 provides in pertinent part that "[The Virgin Islands Board of Medical Examiners] shall also be assigned adequate legal counsel by the Office of the Attorney General and may employ private counsel or its own full-time attorney." And finally, section 408(d) of Title 32 provides in pertinent part that "[n]otwithstanding the provisions of any other law to the contrary, the [Casino Control] Commission may employ legal counsel who shall represent the Commission in any proceeding to which it is a party, and who shall render legal advice to the Commission upon its request. The Commission may contract for the services of other

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professional, technical and operational personnel and consultants as may be necessary to the performance of its responsibilities under this chapter."

The above statutes, as well as the other ten statutes cited by Ocwen, share a commonality. Each contains language that grants a specific executive branch agency, officer, or commissioner discretion as to the retention of counsel. As Ocwen correctly notes, no such discretion rests with VIBIR under section 1732 of Title 33, as read in conjunction with section 114(a)(6) of Title 3. In furtherance of its argument that this lack of discretion warrants disqualification in the present matter, Ocwen cites to Moses v. Fawkes, 2017 WL 729443 (V.I. 2017) and V.I. Daily News v. Gov't of Virgin Islands, 2002 WL 31956031, at *1 (Terr. V.I. Dec. 19, 2002). [ECF 47] ¶¶ 22-26, for the proposition that the courts have already spoken on the issue.

In Moses, members of the St. Thomas/St. John and St. Croix District Board of Elections brought suit against the supervisor of elections. Moses, 2017 WL 729443 at *1. As a byproduct of their suit, the members sought to disqualify the VIDOJ from representing the supervisor of elections. Id. at 470-71. They argued that only the board is authorized to retain the Attorney General under 18 V.I.C. § 51, as opposed to the supervisor. Id. at 470. Relying on 3 V.I.C. 114(a)(1) and (6), the Virgin Islands Supreme Court ("V.I. Supreme Court") held that the Attorney General has a general duty to represent the executive branch, as well as all boards, commissions, agencies, and officers of the government, with this necessarily including representation of the supervisor of elections. Id. at 471. It further held that section 114 of Title 3 could easily be harmonized with section 51 of Title 18, as the latter statute simply provides an exception to the Attorney General's duty and permits the board to forgo such representation and hire independent counsel. Id. at 470-

71.

In VI Daily News, a private attorney filed a notice of special appearance on behalf of the Public Services Commission ("PSC") subsequent to the Attorney General having appeared on

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behalf of the PSC. V.I. Daily News, 2002 WL 31956031, at *1. In disallowing the private attorney's appearance, the Virgin Islands Territorial Court¹¹held

. . . that section 114 of Title 3 of the Virgin Islands Code requires that the Attorney General represent the PSC and its officers acting in their official capacity before the courts in all civil proceedings. Further, the Court finds that neither the PSC nor any officer of the PSC can discharge the office of the Attorney General and retain private counsel to represent them in such litigation. Finally, the Court finds that section 18 of Title 30 of the Virgin Islands Code does not apply to the office of the Attorney General's exclusive representation of the PSC and its officers in civil court proceedings. Id. at *5.

What is clear from chapter 8 of Title 3, is that special assistant attorneys general are not assistant attorneys general under section 113 of Title 3, the latter of whom are prohibited from engaging in the private practice of law. See V.I. CODE ANN. tit. 3, § 117. The Court likewise finds there not to be express statutory authority under section 114 for the Attorney General to designate and/or appoint special assistant attorneys general. This includes under section 114(a)(5), as will be addressed in further detail by the Court infra.

Again, the various statutes cited by Ocwen for the other government bodies/heads, see [ECF 47] ⁋ 10, bestow on each the discretionary authority to retain outside counsel. In other words, these government bodies/heads have the option to choose whether to be represented by the Attorney General. And, as previously stated above, this Court agrees that VIBIR has no such option. See V.I. C ODE ANN. tit. 33, § 1732. But what must be remembered, however, is that it is not VIBIR¹²who has retained Mastracchio as its private co-counsel in this matter. Thus, there has

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been no discretion--statutory or otherwise--exercised by VIBIR. Moreover, this is also not an instance where VIBIR is being represented solely by outside counsel. VIBIR has and continues to be represented by the Attorney General, as is the latter's statutory duty. Finally, it is the Attorney General and/or the Governor who has chosen to specially designate and appoint outside counsel (Mastracchio) as the Attorney General's co-counsel. See [ECF 54-1].

Both Moses and VI Daily News are distinguishable from the issue at hand. Neither case addresses whether the Attorney General and/or Governor possesses the authority--statutory or otherwise--to specially designate and appoint outside counsel to serve as co-counsel with the Attorney General. Instead, the cases address statutes that govern certain government bodies/heads to determine whether these bodies/heads may forgo representation by the Attorney General and hire independent counsel. The Court finds the various statutes cited by Ocwen to likewise be distinguishable. Each provides discretionary opt-out language of the requirement that the government body/head be represented by the Attorney General. Section 114 of Title 3, in turn, provides the default standard; namely that barring the exercise of a statutory opt-out, the Attorney General is to appear for and represent government bodies/heads such as the VIBIR. That is exactly what is occurring in the present matter; the Attorney General is representing VIBIR. The designation and appointment of outside co-counsel is not an opt-out. The Court is further not persuaded that the absence of language providing for the designation/appointment of outside co- counsel is tantamount to a legislative intent to prohibit such an action. Instead, the Court finds that common law will govern the issue. Given the arguments that have been raised as to section 114(a)(5), however, the Court will first address that subsection before moving on to its analysis of the common law.

(2) Title 3, Section 114(a)(5)

Under Title 3, Section 114(a)(5), the Attorney General shall have power

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to employ such skilled experts, scientists, technicians, or other specially qualified persons as he deems necessary to aid him in the preparation or trial of actions or proceedings

V.I. CODE ANN. tit. 3, § 114(a)(5) (emphasis added). According to Ocwen, the omission of attorneys from the illustrative list in the above section was intentional. [ECF 47] ⁋⁋ 18-21. In support of its position, Ocwen compares section 114(a)(5) to section 104(d) of Title 22, with this latter statute expressly identifying attorneys in its illustrative list of persons that the insurance commissioner (i.e., the government head) may retain.¹³Id. ⁋ 19. Ocwen further argues that a broad interpretation of section 114(a)(5) that includes attorneys will contravene with sections 113(a) and 117 of the same title. Id. ⁋ 21. Finally, Ocwen contends that the residual phrase "or other specially qualified persons" is a general statement not intended to include attorneys, noting that experts, scientists, and technicians are persons who assist attorneys in litigation, as opposed to those who actually litigate the matter. Id. ⁋ 20 citing Circuit City Stores, Inc. v. Adams, 532 U.S. 105, 109, 114-15 (2001); McBoyle v. United States, 283 U.S. 25, 26-27 (1931). Conversely, VIBIR cites section 114(a)(5) as one of the provisions that expressly authorizes the VIDOJ to retain private practitioners with specialized expertise not found within the government's regular legal ranks. [ECF 54] at 7.

Interpretation of any statute begins with its plain meaning. Thomas v. People, 2018 WL 6047702, at *5 (V.I. 2018) (citing Markovski v. Gonzales, 486 F.3d 108, 110 (4th Cir. 2007)). The Court begins and ends its inquiry with the text, giving each word its "ordinary, contemporary, common meaning." Id. (citing Star Athletica, L.L.C. v. Varsity Brands, Inc., 580 U.S. 405, 414 (2017). It is a "fundamental canon of statutory construction that the words of a statute must be read

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in their context and with a view to its place in the overall statutory scheme." Food and Drug Admin.

v. Brown & Williamson Tobacco Corp., 529 U.S. 120, 133 (2000)¹⁴(citing Davis v. Michigan Dept. of Treasury, 489 U.S. 803, 809 (1989)). In considering the specific context in which language is used and the broader context of the statute as a whole, "interpretations of a statute which would produce absurd results are to be avoided if alternative interpretations consistent with the legislative purpose are available." Vooys v. Bentley, 901 F.3d 172, 192 (3d Cir. 2018) (quoting Griffin v. Oceanic Cont., Inc., 458 U.S. 564, 575 (1982)). "An absurd interpretation is one that 'defies rationality or renders the statute nonsensical and superfluous.'" Encompass Ins. Co. v. Stone Mansion Rest. Inc., 902 F.3d 147, 152 (3d Cir. 2018) (citing United States v. Moreno, 727 F.3d 255, 259 (3d Cir. 2013) (quoting United States v. Fontaine, 697 F.3d 221, 228 (3d Cir. 2012)). As previously discussed, chapter 8 of Title 3 is devoid of any express language that authorizes the Attorney General to designate and appoint special assistant attorneys general. Moreover, the residual clause or phrase "other specially qualified persons" set forth in 3 V.I.C. § 114(a)(5) is neither explicitly defined in chapter 8, nor elsewhere in the Virgin Islands Code. Given the context in which the clause is found, the Court does not find its plain meaning to be unambiguous. Resolving this issue thus requires the Court to determine how the residual clause is linked to its "surrounding words." Fischer v. United States, 603 U.S. 480, 486 (2024). To do so, the Court turns to the canons of statutory construction for further guidance. Under the canon of ejusdem generis, "a 'general or collective term' at the end of a list of specific items" is typically

"'controlled and defined by reference to' the specific classes ... that precede it." Fischer, 603 U.S. at 487 (citations omitted). A similarly applicable canon, known as noscitur a sociis, provides that

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a word is "given more precise content by the neighboring words with which it is associated." Id. (citing United States v. Williams, 553 U.S. 285, 294 (2008)).

For the canon ejusdem generis, the Court turns for guidance to the Supreme Court's opinion in Circuit City Stores, Inc. v. Adams, 532 U.S. 105 (2001). In that matter, a store clerk argued his employment contract was exempted under section 1 of the Federal Arbitration Act ("FAA"), which provides an exception for "contract of employment of seamen, railroad employees, or any other class of workers engaged in foreign or interstate commerce." Circuit City, 532 U.S. at 109-10, 114 (citing 9 U.S.C. §1) (emphasis added). The Supreme Court held that under the maxim of ejusdem generis "[T]he residual clause ["any other class of workers engaged in foreign or interstate commerce"] should be read to give effect to the terms "seamen" and "railroad employees," and should itself be controlled and defined by reference to the enumerated categories of workers which are recited just before it. . . ." Id. at 115. In doing so, the Supreme Court found that general employment contracts do not fall under the FAA exemption and that section 1 is limited to the employment contracts of transportation workers.¹⁵Id. at 119.

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Applying Circuit City's holding, the residual phrase "other specially qualified persons" in

3 V.I.C. § 114(a)(5) should therefore be read in the context of the words that precede it. Here, the Court interprets "experts, scientists, and technicians" in Title 3, section 114(a)(5) as a class of non- legal professionals who aid the Attorney General in "preparation or trial of actions or proceedings"

as stated in the statute. Attorneys are neither considered scientists nor technicians, and although an attorney may possess specialized knowledge in an area of the law, the Court does not interpret the word "expert" to mean specialized attorneys based on the class that comes behind it; i.e., "scientists and technicians."

The application of the canon noscitur a sociis produces a similar result. Under this canon, words are to be "given more precise content by the neighboring words with which [they are] associated." Fischer, 603 U.S. at 487 (2024) (citations omitted). Thus, one should "'avoid[s] ascribing to one word a meaning so broad that it is inconsistent with' 'the company it keeps.'" Id.; see also In re Cont'l Airlines, Inc., 932 F.2d 282, 288 (3d Cir. 1991) (clarifying that "noscitur a sociis, like any other tool of statutory construction, is merely an aid in determining the intent of the drafters. It is correctly employed together with other tools, such as legislative history and underlying policy concerns."). With respect to the phrase "other specially qualified persons" in section 114(a)(5), the neighboring words are not only "experts, scientists, technicians," but they also include "to aid [the Attorney General] in the preparation or trial of actions or proceedings."

Again, the Court finds the rational interpretation of the phrase "other specially qualified persons"

--given the neighboring words--to be that of a class of non-legal professionals who aid the Attorney General in "preparation or trial of actions or proceedings."¹⁶

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Thus, for the reasons stated above, the Court does not find that section 114(a)(5) of Title 3 provides the Attorney General with statutory authority to designate and appoint special assistant attorneys general. Just because such express authority is not found in the Virgin Islands Code, however, does not necessarily mean it does not exist.

C. Common Law Authority

Given the lack of statutory authority, the only remaining question posed is whether the Attorney General possesses inherent common law authority to designate and appoint special assistant attorneys general. In the Virgin Islands, the common law has undergone a significant transformation since the V.I. Supreme Court issued its opinion in Banks v. Int'l Rental & Leasing Corp., 2011 WL 6299025 (V.I. 2011). See Merchs. Com. Bank v. Oceanside Vill., Inc., 2015 WL 9855658, *2 (V.I. Super. 2015). In Banks, it was determined that the Virgin Islands no longer derives principles of common law through rote application of the Restatements of the Law. Id. Instead, to the extent the V.I. Supreme Court has yet to do so, all courts addressing issues of Virgin Islands common law are required to engage in a three-factor analysis to determine whether the common law principle is applicable in the territory and, if so, the standard to be adopted. This exercise is known as a "Banks analysis." Id. Such an analysis is conducted by first examining the common law rule Virgin Islands courts have applied in the past; next identifying the rule adopted by a majority of courts of other jurisdictions; and then finally--but most importantly--determining which common law rule is soundest for the Virgin Islands. See Better Bldg. Maint. of the Virgin Islands, Inc. v. Lee, 2014 WL 1491559, *7 (V.I. 2014) (citations omitted). VIBIR contends the Attorney General retains broad common law authority to hire private counsel in the absence of any statutory prohibition. [ECF 54] at 7-8. In support of this proposition, it cites to Landrum v. Commonwealth ex rel. Beshear, 599 S.W.3d 781, 786 (Ky. 2019) ("An attorney general has the authority to appoint special private counsel in actions or proceedings instituted in the attorney general's name, including the authority to hire private counsel in a civil

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action on a contingency fee basis, in the absence of a statutory prohibition.") (citations omitted)). Id. at 7, n. 17. Ocwen, in turn, counters that the present lawsuit is not an action at common law but is a redetermination of deficiency action based on statutory law. [ECF 55] ¶ 31. Notwithstanding this position, Ocwen further argues that other jurisdictions' state constitutions expressly grant their attorney generals broad common law authority.¹⁷Id. ¶ 32. In doing so, Ocwen asserts that there is no comparable provision under the Virgin Islands Revised Organic Act of 1954.¹⁸ Id. ¶ 33. The Revised Organic Act of 1954 acts as a "de facto constitution" for the Virgin Islands. Balboni v. Ranger Am. of the V.I., Inc., 2019 WL 2352281, at *9 (V.I. 2019). It serves as "[a] temporary enactment, in that Congress authorized the Legislature of the Virgin Islands to call for a constitutional convention to enact a Virgin Islands Constitution, which once duly-enacted would serve as the new [ ] charter of local government for the Territory and result in the repeal of the Revised Organic Act." Balboni, 2019 WL 2352281, at n. 22. Nonetheless, the de facto nature of the Revised Organic Act of 1954 is not to suggest that the applicable provisions are somehow not effective. Id. at n. 34. Turning to section 16(a) of the Act, it provides that the governor shall … reorganize and consolidate the existing executive departments, bureaus, independent boards, agencies, authorities, commissions, and other governmental instrumentalities, with the head of the department of law to be known as the attorney general of the Virgin Islands. Section 16(c) then provides, in pertinent part, as follows:

The heads of the executive departments created by this Act shall be

appointed by the Governor, with the advice and consent of the

legislature. Each shall hold office during the continuance in office

of the Governor by whom he is appointed and until his successor is

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appointed and qualified, unless sooner removed by the Governor. Each shall have such powers and duties as may be prescribed by the legislature.

Revised Organic Act of 1954, § 16(c); 48 U.S.C. § 1597(c). Under section 11 of the Act, the governor is empowered to appoint and remove all officers and employees of the executive branch, though this power is limited by the laws enacted by the Virgin Islands legislature. See Bryan v. Virgin Islands Water and Power Auth., 2024 WL 4614536, at *18 (V.I. 2024) (citing Revised Organic Act of 1954, § 11; 48 U.S.C. § 1591). As addressed earlier, the Court finds there to be no statutory limitation enacted by the Virgin Islands legislature that expressly precludes the Attorney General from designating and appointing assistant attorneys general. Nor does the Court find the powers and duties of the Attorney General to be as bright-line and/or as limited as Ocwen would have them be under section 114. The Court notes that section 114(a)(6) provides that the Attorney General is to represent all government bodies/heads. As the present lawsuit reflects, such representation will include times when the matters involve niche issues that may be beyond the experience and/or expertise of the rank-and-file assistant attorneys general. To properly represent the various government bodies/heads, the Attorney General necessarily needs the means in which to do so.

The Court likewise believes that a Banks analysis is warranted. Turning to the first factor, the Court has been unable to locate any local opinions which address the scope of the Attorney General's authority as is challenged herein. By way of example, however, the Court is aware of numerous instances where the Attorney General has utilized outside counsel as his or her co- counsel in both territorial and federal civil actions.¹⁹See generally Gov't of the Virgin Islands, ex rel. v. 3M Co., et al., District Court of South Carolina, Case No. 2:26-cv-03871; see generally

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Gov't of the Virgin Islands v. JPMorgan Chase Bank, N.A., District Court for the Southern District of New York, Case No. 1:22-cv-10904; see generally Gov't of the Virgin Islands v. Darren K. Indyke, et al., Superior Court of the Virgin Islands, Case No. ST-2020-cv-00014; see generally Gov't of the Virgin Islands v. Takata Corp., et al., Superior Court of the Virgin Islands, Case No. ST-2016-cv-00286; see generally Comm'r of the Dep't of Planning and Nat. Res., et al. v. Century Alumina Co., LLLP, et al., District Court of the Virgin Islands, Case No. 1:05-cv-00062;²⁰ see generally Virgin Islands Bureau of Internal Revenue v. Chase Manhattan Bank, NA, et al., District Court of the Virgin Islands, Case No. 3:93-cv-93.²¹In spite of these and other instances, it appears the present issue before this Court is one of first impression in the territory. As for the second factor, the Court has located several cases from other jurisdictions that address the issue. In State ex rel. Discover Fin. Servs., Inc. v. Nibert, the petitioners filed two consolidated writs of prohibition challenging a lower court's order denying the disqualification of the special assistant attorneys general. 231 W. Va. 227, 232, 744 S.E.2d 625, 630 (2013).²²In particular, the petitioners asserted that the attorney general lacked authority to appoint special assistant attorneys general because "the Legislature has been given exclusive authority to set out the duties of the Attorney General" pursuant to the West Virginia Constitution. Id. at 242-43.

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Further, petitioners contended that nothing in the West Virginia Code § 5-3-3 expressly authorized the appointment of special assistant attorneys general.²³Id. at 243 (citations omitted). The Supreme Court of Appeals of West Virginia ultimately determined that while the attorney general could not rely on the West Virginia Code to appoint special assistant attorneys general, he was authorized to do so pursuant to his common law authority.²⁴ Id. at 250-51. In arriving at this determination, the court first noted that the West Virginia Constitution does not contain language expressly prohibiting the reliance on common law authority.²⁵Next, in examining the relevant common law, the court pointed to a case in another state (Missouri) as additional support for its finding that attorney general's common law authority likely permitted the appointment of special assistant attorneys general. Id. at 251; See Kinder v. Nixon, 2000 WL 684860 (Mo. Ct. App. May 30, 2000), transferred sub nom. State ex rel. Nixon v. American Tobacco Co., Inc., 34 S.W.3d 122 (Mo. 2000).²⁶Faced with a similar issue in Kinder, the Missouri

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Court of Appeals held "the Attorney General has common law authority to appoint special assistants and nothing in [the statute] either expressly or by reasonable intendment forbids the exercise of that power." Kinder, 2000 WL 684860, at *11.

Still, other jurisdictions have arrived at similar determinations as those above. In State v. Lead Indus., Ass'n, Inc., the Rhode Island Supreme Court rejected a challenge to the attorney general's decision to contract with private counsel on a contingent fee basis in a public nuisance action. State v. Lead Indus., Ass'n, Inc., 951 A.2d 428, 475 (R.I. 2008). In so holding, the Rhode Island Supreme Court nonetheless clarified that the attorney general shall retain "absolute and total control over all critical decision-making in any case in which such agreements have been entered into."²⁷Id. (citations omitted); see also Merck Sharp & Dohme Corp. v. Conway, 947 F. Supp. 2d 733, 739-40 (E.D. Ky. 2013).

With respect to the third factor, the Court must determine whether the adoption of this common law rule is in the best interest of the Virgin Islands based on the unique characteristics and needs of the territory. See Gov't of the Virgin Islands v. Connor, 2014 WL 702639, at * 3 (V.I. 2014). The Court recognizes the impracticality were the VIDOJ be limited to a "one-size-fits-all"

approach when faced with complex and vastly different legal issues. Indeed, as the exemples above reflect, there are times when the VIDOJ will need to initiate or defend against civil matters outside the territory, further necessitating the need to designate and appoint special assistant attorneys general. In addition to these challenges, VIBIR states there may be instances when the VIDOJ might be conflicted.²⁸[ECF 54] at 16. Lastly, VIBIR argues that the territory's relatively small size

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(i.e., population) requires the assistance of outside counsel from time-to-time, as the size of the population has a direct impact on the size of the Attorney General's office/staff.²⁹[ECF 54] at 16. The Court agrees.

The Court finds the best rule for the Virgin Islands is to adopt and recognize the common law authority of the Attorney General to designate and appoint special assistant attorneys general. To find otherwise would result in an unintentional disadvantage to the VIDOJ in those matters involving complex and/or specialized litigation that often call for attorneys whose practice is concentrated in such areas. Likewise, it may well cripple the Attorney General's ability to perform all of his or her duties during times when the needs outweigh the means. While it is always easy to say that in such instances more assistant attorneys general can be hired, such an ill-considered statement simply ignores realities, such as when the needs may be immediate. Taking all of the Banks factors into consideration, the Court finds the common law authority of attorney generals to designate and appoint special assistant attorneys general is applicable in the territory.

D. Judicial Authority

In addition to the above, VIBIR also contends that the VIDOJ derives authority to appoint Mastracchio as a special assistant attorney general pursuant to Local Rule of Civil Procedure ("LRCi") 83.1(b)(3). [ECF 54] at 10. In doing so, VIBIR notes that it was under this provision that the Court already vetted and approved of Mastracchio's admission. Id. Ocwen, in turn, argues that LRCI 83.1 fails to "provide a basis for the Attorney General to delegate his duties in tax deficiency attorneys general brought suit against the Government of the Virgin Islands. As previously disclosed to the parties, undersigned--many years before taking the bench--was designated and appointed as a special assistant attorney general to represent the Government in said matter. That prior designation/appointment, however, has had no impact on the Court's ruling herein other than to serve as another exemplar of VIDOJ's historical use of outside counsel.

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cases to attorneys in private practice." [ECF 55] at 14-15. It further argues that "a valid delegation of authority cannot cure an invalid authorization to practice, and a valid authorization to practice cannot cure an invalid delegation of authority." Id. at 15 (citing In Re Campbell, 2013 WL 5200473, at *3-4 (V.I. 2013)).

With respect to special admissions, LRCi 83.1(3) provides for such admissions if … the Court determines the applicant meets the qualifications of a regular admission except for having passed the Virgin Islands Bar examination; and

(i) the applicant is admitted to practice in the highest court of a state, the District of Columbia or a commonwealth, territory, or possession of the United States;

(ii) the applicant is otherwise professionally, morally, and ethically qualified for admission to the bar of the Court;

(iii) there is good cause for the admission of such person and the applicant's admission would be in the best interest of the Court; and

(iv) the applicant is either: an attorney representing the Government of the Virgin Islands, its branches, departments, agencies, and instrumentalities; an attorney representing a public interest group; or, an attorney representing a party on a pro bono basis. LRCi 83.1(b)(3)(A)(i)-(iv) (emphasis added). It is the language in subpart (iv) of LRCi 83.1(b)(3) that VIBIR hangs its proverbial hat. [ECF 54] at 10.

The Court finds, however, that LRCi 83.1 is not a source of statutory or common law authority for the Attorney General to designate and appoint special assistant attorneys general. Pursuant to Rule 83 of the Federal Rules of Civil Procedure, this Court has adopted (and amended/revised over the years) local rules that govern its practice. See Fed.R.Civ.P. 83(a)(1). These rules must be consistent with--while not duplicating--federal statutes and the Federal Rules of Civil Procedure. Id. With respect to LRCi 83.1, it provides the means by which this Court controls the admission to its bar, including by special admission. Thus, for instance, where the Virgin Islands Government and/or one of its bodies/heads seek the special admission of an attorney