ON APPEAL FROM THE DISTRICT COURT OF THE VIRGIN ISLANDS, DIVISION OF ST. THOMAS AND ST. JOHN
Before: GIBBONS, SLOVITER and BECKER, Circuit Judges
This is an appeal by the Government of the Virgin Islands from an order of the District Court of the Virgin Islands denying the government's motion to preliminarily enjoin alleged violations of Virgin Islands land use and environmental laws.We conclude that the court below employed an improper standard in denying the request for preliminary relief, and therefore remand.
This action was brought by the Government of the Virgin Islands in the District Court of the Virgin Islands against defendants, Virgin Islands Paving, Inc. and St. Thomas Quarries, Inc. The complaint alleged that defendants were conducting quarrying and crushing operations on Haypiece Hill, in a first-tier coastal zone of St. Thomas, in violation of the applicable zoning laws; that defendants had failed to obtain the necessary Air Pollution Control permit required under 12 V.I.R. & Regs. tit. 12, § 206-20 before construction or use of any equipment or contrivance which may cause the issuance of air contaminants; and that defendants had failed to obtain a Coastal Zone Management (CZM) permit required by 12 V.I.C. § 910(a)(1) before performing or undertaking any development in the first-tier of the coastal zone.The complaint sought preliminary and permanent injunctive relief and the imposition of civil fines.
At a hearing on the government's request for a preliminary injunction the defendants conceded the operation but claimed they were excused from the requirements of the statutes on various factual and legal grounds. The district court, holding that these defenses presented complex issues of law and fact, denied the motion for a preliminary injunction on the grounds, inter alia, that the government had failed to demonstrate the threat of irreparable harm, a likelihood of success on the merits, and that it lacked an adequate remedy at law. The government moved for reconsideration, arguing that the court should have determined the issue of preliminary injunctive relief on the basis of the statutory standard contained in the Virgin Islands Coastal Zone Management Act of 1978, § 1, 12 V.I.C. § 913(b)(1), which provides for such relief upon a "prima facie showing of a violation." The court denied the government's motion, and the govenment appeals.
We consider first defendants' contention that this case is now moot. The government concedes that the portion of the complaint claiming that defendants' activities were not permitted uses under the applicable zoning classification is now moot, because the Virgin Islands Legislature has rezoned the property to permit defendants' quarrying and crushing activities. Act of July 27, 1982, No. 4737. However, the validity of defendants' excuses for their failure to obtain the air pollution permit and CZM permit remains in issue. At oral argument, defendants asserted mootness as to the permits as well on the ground that defendants have moved their crushing equipment out of the Virgin Islands and have ceased crushing and quarrying operations on the property.
Obviously this circumstance is not enough to establish mootness of the entire case.If so, any defendant could establish its operation without securing the necessary permits and, if nimble enough to keep a step ahead of the government and affluent enough to tie it up in litigation until it has accomplished its purpose, avoid the consequences. Under the CZM Act, reasonable conditions may be imposed for the grant of a permit. Had defendants applied for the permit, they might have been requested or required to take some action to remedy what the complaint alleges has been their destruction and removal of Haypiece Hill. Were this case moot because defendants are no longer actively violating the statutes, the government would often be powerless to prevent the very harm to which the statutes are directed.*fn1 Mootness of the case is further negated by the fact that the complaint requests that defendants pay the civil fines as authorized by the Coastal Zone Management Act for intentionally and knowingly performing any development in violation of the Act.*fn2
Finally, if defendants' suggestion of mootness is directed only to the preliminary injunction proceedings, we deem it significant, as counsel conceded, that defendants have not surrendered the lease to the property in question, and thus they could resume the challenged operations at any time. Since, therefore, there is "a reasonable likelihood that the parties or those in privity with them will be involved in a suit on the same issues in the future," Washington Steel Corp. v. TW Corp., 602 F.2d 594, 599 (3d Cir. 1979) (quoting American Bible Society v. Blount, 446 F.2d 588, 595 (3d Cir.1971)), neither this case nor this aspect is moot.
We turn to the central question presented in this appeal: whether the district court properly determined the standard for preliminary injunctive relief to be used in actions by the Government of the Virgin Islands to enforce land use and environmental controls under the Coastal Zone Management Act of 1978 and the Air Pollution Control Act. In denying the preliminary injunction, the district court viewed the "prima facie showing" standard for preliminary equitable relief in the CAM Act as irreconcilable with that traditionally applied by federal courts for preliminary injunctive relief under Fed. R. Civ. P. 65(a). Although that rule specifies no particular standard, federal courts have fashioned a standard based on traditional equity practice, as follows:
To support a preliminary injunction, the moving party must demonstrate that irreparable injury will occur if relief is not granted to maintain the status quo until a final adjudication . . . and that there is a reasonable probability of eventual success on the merits. In addition, the court must weigh the possibility of harm to the nonmoving party as well as to any other interested persons and, when relevant, harm to the public.
Continental Group, Inc. v. Amoco Chemicals Corp., 614 F.2d 351, 356-57 (3d Cir. 1980) (footnote omitted).
The district court concluded that this standard, rather than the standard embodied in 12 V.I.C. § 913(b)(1), should govern this action for several reasons. First, it stated that since "it has been held that an important federal policy is involved when a person seeks [a preliminary injunction] in a federal court . . . federal, rather than state law, should apply." Second, it concluded that "[b]ecause the standard for determining whether to grant a preliminary injunction has been traditionally deemed to be procedural, not substantive, the federal standard in controlling." Finally, the court observed that "the application of the federal rule will not impair any "state" interests of the Virgin Islands or impair the goals of any ...