Government Employees Retiremen v. Government of the Virgin Islan


PRECEDENTIAL UNITED STATES COURT OF APPEALS FOR THE THIRD CIRCUIT _______________________ Nos. 20-1749 and 20-1766 _______________________ GOVERNMENT EMPLOYEES RETIREMENT SYSTEM OF THE VIRGIN ISLANDS, Appellant in No. 20-1766 v. THE GOVERNMENT OF THE VIRGIN ISLANDS; COMMISSIONER OF FINANCE OF THE GOVERNMENT OF THE VIRGIN ISLANDS, Appellants in No. 20-1749 _______________________ On Appeal from the District Court of the Virgin Islands (D.C. No. 3:81-cv-00005) District Judge: The Honorable Curtis V. Gomez __________________________ Argued December 8, 2020 Before: SMITH, Chief Judge, CHAGARES and MATEY, Circuit Judges (Filed: April 9, 2021) Robert D. Klausner [ARGUED] KLAUSNER, KAUFMAN, JENSEN & LEVINSON 7080 N. W. 4th Street Plantation, FL 33317 Cathy M. Smith GOVERNMENT EMPLOYEES RETIREMENT SYSTEM 3438 Kronprindsens Gade GERS Complex, Suite 1 St. Thomas, VI 00802 Counsel for Government Employees Retirement System Brigid F. Cech Samole Katherine M. Clemente Elliot H. Scherker [ARGUED] GREENBERG TRAURIG, LLP 333 Southeast 2nd Avenue Suite 4400 Miami, FL 33131 Angel Taveras WOMBLE BOND DICKINSON LLP Independence Wharf 470 Atlantic Avenue Suite 600 Boston MA 02110 Carol L. Thomas-Jacobs OFFICE OF ATTORNEY GENERAL OF VIRGIN ISLANDS Department of Justice 34-38 Kronprindsens Gade GERS Complex, 2nd Floor St. Thomas, VI 00802 ‐ii- Counsel for Government of the Virgin Islands and Commissioner of Finance of Government of the Virgin Islands Ian H. Gershengorn JENNER & BLOCK LLP 1099 New York Avenue, N.W. Suite 900 Washington DC 20001 Counsel for Amicus Appellees TABLE OF CONTENTS I. Background and Procedural History _____________ 3 A. Legal Background ____________________________ 3 1. Creation of GERS in 1959 ____________________ 3 2. The 1968 amendments _______________________ 5 3. The 2005 amendments _______________________ 5 B. Procedural History ___________________________ 7 1. The 1981 complaint _________________________ 7 2. The 1984 consent judgment ___________________ 8 3. The 1994 amendment to the consent judgment ____ 8 4. The tangential 2001 action ___________________ 9 5. The 2016 enforcement proceedings ____________ 10 II. Jurisdiction and Standard of Review ____________ 15 III. The GVI’s Appeal____________________________ 16 A. Principal Award to GERS _____________________ 17 1. The historical under-contributions fall within the consent judgment ___________________________ 17 ‐iii- 2. The GVI’s historical under-contributions were properly before the District Court ______________ 19 3. Direct contributions to GERS and the true-up process do not offset the award _______________________ 28 4. The expert reliably calculated the $18.9 million in principal __________________________________ 31 B. Award of Fees and Interest to GERS ____________ 32 1. The statutes are not intended only for willful misconduct ________________________________ 33 2. The District Court erred by applying the statutes retroactively _______________________________ 35 3. GERS’s action was timely ____________________ 42 IV. GERS’s Cross-Appeal ________________________ 51 A. GERS’s Textual Arguments ___________________ 54 B. GERS’s Authorities _________________________ 59 C. The Parties’ Historical Understanding ___________ 62 V. Conclusion __________________________________ 66 ‐iv- __________________________ OPINION OF THE COURT _________________________ SMITH, Chief Judge. The promise of a pension is critical to the retirement se- curity of many of us who work. And retirement security “is often compared to a three-legged stool supported by Social Security, employer-provided pension funds, and private savings.”1 When an employer’s …

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