In an important decision which will have a wide-ranging impact on Virgin Islands lawyers and their clients, the Supreme Court of the Virgin Islands has definitively ruled that the Restatements of the Law no longer provide the Rules of Decision for Virgin Islands courts.
The Restatements of the Law are a series of legal treatises published by the American Law Institute, an organization of legal academics, judges, and practitioners. As Harvard Law School describes the Restatements, “the ALI’s aim is to distill the ‘black letter law’ from cases, to indicate a trend in common law, and, occasionally, to recommend what a rule of law should be. In essence, they restate existing common law into a series of principles or rules.” The United States has a ‘common law’ legal system, which it carried over from its English forbearers. A common law system relies upon courts to fill in the gaps between legislatively-enacted statutes to determine what the law is and what it means. By the principle of stare decisis, subsequent courts are typically bound to the precedent established in earlier decisions. Most U.S. attorneys and judges see the Restatements as a useful and persuasive guide but in two jurisdictions, the Restatements have been much more than that.
Both the U.S. Virgin Islands and the Commonwealth of the Northern Mariana Islands (CNMI) enacted similar provisions in 1984 which adopted the Restatements as law where there was no local law to the contrary. What the USVI and CNMI did in adopting the Restatement, basically, was to provide for themselves a common law.
In the Virgin Islands, this provision was codified as 1 V.I.C. § 4 and said:
The rules of the common law, as expressed in the restatements of the law approved by the American Law Institute, and to the extent not so expressed, as generally understood and applied in the United States, shall be the rules of decision in the courts of the Virgin Islands in cases to which they apply, in the absence of local laws to the contrary.
For the last thirty years, it has been standard procedure for the attorneys and judges of the Virgin Islands to look immediately to the Restatements and they were regularly cited with approval in legal briefs and court opinions.
Then something began happening in the fall of 2011. The Virgin Islands Supreme Court, which came into being in 2006, made a decision to move away from the Restatement. In Banks v. Int’l Rental & Leasing Corp., the Supreme Court concluded that Legislature -- which crafted both the Restatement provision and the provision which created the Supreme Court as the highest authority on local law – did not intend for the Court to ‘mechanically apply’ the Restatement and that the Supreme Court had “the ability to shape the common law.” In Banks, they noted that CNMI’s Supreme Court had similarly begun to move away from rote application of the Restatements. While these provisions have been restated in subsequent decisions, what started with Banks has now come to fruition with Connor.
In the February 2014 decision of Gov’t of the V.I. vs. Connor, the Supreme Court has closed the door on the Restatement, reasoning that when the Legislature created the Supreme Court it “implicitly repealed 1 V.I.C. § 4.” The Supreme Court held that the “Restatements no longer hold an automatic preferred status is VI law” and that Superior Court erred when automatically applying the Restatement without conducting what it called “a Banks analysis.” Before applying a rule to a case, VI attorneys and judges will now be required to determine (i) whether any VI courts have previously adopted an applicable rule; (ii) the position taken by a majority of courts from other jurisdictions; and (iii) the “best rule” for the VI “based upon the unique characteristics and needs” of these Islands.
So what does this mean for VI businesses, their insurers, and their attorneys? In the short term, it will likely bring more uncertainty as the guiding hand of the Restatements has been removed. While attorneys will have more latitude in crafting their arguments, they will similarly have to respond to more creative arguments. In the long run, as the law develops, the Virgin Islands will have its own organic jurisprudence. It will be up to our legal system, between now and then, to steer the law toward a sounder shore.
If you have any questions about the impact of Connor, please contact Mark Wilczynski at 340-774-4547 or mark@usvilaw.com.