Erbey Holding Corporation John R. Erbey Family Limited Partnership v. Blackrock Financial Management, Inc. Blackrock Investment Management, LLC

• Court: Superior Court of The Virgin Islands
• Decided: February 26, 2024
• Docket: SX-2018-CV-146
• Status: Published

Opinion

SUPERIOR COURT OF THE VIRGIN ISLANDS DIVISION OF ST CROIX

ERBEY HOLDING CORPORATION JOHN R CASE NO SX 2018 CV 00146 ERBEY FAMILY LIMITED PARTNERSHIP BY ITS GENERAL PARTNER JLPITER CAPITAL INC SALT Complex Litigation Division POM) HOLDINGS,LLC MDNUS,L P CARISMA TRUST BY ITS TRUSTEE VEMA LLC TRIBLE Action for Damages LIMITED PARTN ERSHIP AM) ALTISOURCE ASSET MAVAGEMEM CORPORATION Jury Trial Demanded

PLAINTIFFS

V

BLACKROCK FINANCIAL MANAGEMENT, INC BLACKROCK INVESTMENT MAVAGEMENT, LLC BLACKROCK IWESTMENTS, LLC BLACKROCK CAPITAL MANAGEMENT, IN: ; PACIFIC INVESTMENT MANAGEMENT COMPAVY, LLC PIMCO INVESTMENTS LLC AND JOHN AM) JAM: DOESl 10,

DEFENDANTS

Cite as 2024 VI Super 10

Appearances

JOEL H HOLT ESQ Law Offices ofJoeI H Holt P C Christiansted V100820 For Plazntgfj‘s

GORDON RHEA ESQ Law Offices of Gordon Rhea, P C St Thomas V1 00803 For Pl(zzz1fg[fi9

PAUL A KOCHES ESQ (p10 [lac \zce) Farragut Law PLLC Naples FL 34103 For Plaml‘zfls Elbe} Holdmg Cam (t al \ BlackRocL Fm Mgm/ Inc (I (1/ Case No SX 2018 CV 00146 2024 V1 Super 10 Memorandum Opinion and Order Page 2 of 15

NICHOLAS CUTAIA ESQ (pm [me nee) CHARLES R JACOB, III ESQ (pro hac \zce) ADAM J SAFER ESQ (p10 [161C nee) ISABEL P SUKHOLITSKY ESQ (pro hac \zce) JOEL E ANTWI ESQ (pro haC wee) MATTHEW P HORVITZ ESQ (p10 Izac nee) KIMAN KOUR ESQ (p10 Izac \ Ice) Goulston & Storrs New York NY 10022 For Plazm‘szs

MARIA TANKENSON HODGE ESQ Hodge & Hodge St Thomas V100802 F01 the BlackRock Defendants

MARK A KIRSCH ESQ (p10 hac nee) King & Spalding LLP New York NY 10036 F01 the BlackRock Defendants

CHRISTOPHER M JORALEMON ESQ (pro hac uce) JEFFERSON E BELL ESQ ([910 [261C \166) Gibson Dunn & Crutchex, LLP New York NY 10166 For the BlackRock Defendants

KEVIN F D AMOUR ESQ GAYLIN VOGEL ESQ Barnes, D’Amour & Vogel St Thomas V1 00801 For the PIMCO Defendants

JOHN C ERTMAN ESQ (pm [me nee) Ropes & Gray LLP New York NY 10036 For {he PIMC0 Defendants

MEMORANDUM OPINION AND ORDER

WILLOCKS Adnumstratlve Judge

111 BEFORE THE COURT is a motion filed jointly by BlackRock Financial Management Inc

BlackRock Investment Management LLC, BlackRock Investments, LLC and BlaekRock Capital Elbe) Holding C011) Ll a] 1 Blac/tRoc/t Fm Mgmt Inc et (1/ Case No SX 2018 CV 00146 2024 VI Super 10 Memorandum Opinion and Order Page 3 of 15

Management Inc (hereinafter ‘ BlackRock Defendants ) and Pacific Investment Management Company

LLC and PIMCO Investments LLC (hereinafter ‘ PIMCO Defendants ) (together ‘Defendants ) for a

temporary stay of a11 proceedings in the Superior Court of the Virgin Islands until the Supreme Couit 0f

the Virgin Islands decides whether to grant their petition for interlocutory appeal This Court certified a

controlling question 0f1aw to the Virgin Islands Supreme Court pursuant to Title 4 Section 33(0) of the

Virgin Islands Code See generally Elbe); Holdmg C011) \ BIackRock Fm Mgmt Inc , 2023 VI Super

75 Virgin Islands law provides that ‘ application for an appeal may not stay proceedings[] in the

Superior Court unless the Superior Court judge or the Supreme Court or a Justice thereof orders a stay of

the proceedings ’ 4 V I C § 33(0) The Defendants jointly moved for a stay The Plaintiffs oppose The

Court heard oral argument and took the matter under advisement For the reasons stated below, the

Defendants Joint motion will be denied

I BACKGROUND

{[2 The Ccurt summaiized the factual and procedural backgreund of this case in its prior opinion See

Eibey Holdzng Com , 2023 V1 Super 75 at 1111 4 1 1 That background is incorporated herein as it has not

changed What is important for the purposes of this Opinion, however, is to note is that discovery has been

stayed since this case was commenced in 2018 Along with motions to dismiss for lack of personal

Jurisdiction, for failure to state a claim for relief, and for f0; um non contenzens, the Defendants had also

filed a motion to stay discovery on August 7 2018 which remained pending after this case was designated

complex and transferred to the Complex Litigation Division that same month The motion to stay

discovery remained pending and discovery remained under a de facto stay until this Court formally

granted the Defendants motion on February 16 2023 Even though the Virgin Islands Rules of Civil

Procedure does not permit discovery to he stayed simply upon the filing of a motion, see V 1 R Civ P

26(d)(4), the Defendants have been unwilling to engage in any discovery, even initial disclosures As a Elba Holdmg Com a a] \ BlackRock Fm XVIng Inc (111/ Case No SX 2018 CV 00146 2024 VI Super 10 Memorandum Opinion and Order Page 4 of 15

result, nearly six years have passed since this case was filed and no discovery has been conducted, largely

based on the Defendants’ challenge to the Superior Court’s juiisdiction

113 This Court initially granted the Defendants’ August 7, 2018 motion to stay discovery because out

of concern that forcing parties to engage in discovery might contravene due process if the court lacks

peisonal jurisdiction over that party In its December 4 2023 Opinion this Court adopted the

Recommendation of the Staff Master, with a modification not relevant to the instant motion, and

concluded that the Superior Court can exercise personal jurisdiction over all Defendants except one

BlackRock, Inc The Court granted the motion to dismiss BlackRock for lack of personal Jurisdiction and

certified the dismissal of BlackRock as final under Rule 54(b) of the Virgin Islands Rules of Civil

Procedure The Plaintiffs later appealed that dismissal t0 the Virgin Islands Supreme Court, which remains

pending The Court also denied the motion to dismiss the remaining Defendants, finding that consented

to personal jurisdiction in the Virgin Islands because they registered to do business in the Territory as

either broker dealers or investment advisers The Court also agreed with the Staff Master’s

recommendation, and granted the Defendants motion, ‘ to cettify to the Supreme Court of the Virgin

Islands the question whether submitting forms to the Lieutenant Governor’s office to register as a b10ker

dealer (Form BD) 01 an investment adviser (Form ADV) constitutes consent to personal jurisdiction in

the courts ofthe Virgin Islands E1 bev Holdzng C0lp 2023 VI Super 75 at 11 3 (citing Malia; V1 Naifolk

S RV C0 143 S Ct 2028 (2023))

114 All Defendants (except BlackRock who was dismissed) petitioned the Virgin Islands Supreme

Court to accept jurisdiction and decide the certified question To date, the Supieme Coult has not ruled on

the petition In the interim, the Defendants jointly moved this Court for ‘ a temporary stay of the

proceedings in the Superior Court until the Virgin Islands Supreme Court decides whether to take the

appeal and, if so, until the appeal is decided is in the interests of justice (Defs Jt Mot to Stay Proc E1 bu Ho/u’mg C011) (ta! \ B][lC/\R()Cl\ Fm Mgmt Inc Lia] Case No SX 2018 CV 00146 2024 V1 Super 10 Memorandum Opinion and Order Page 5 0f 15

Pending Interloc App 1, filed Dec 22, 2023 (hereinafter Mot ) )The Plaintiffs responded in opposition

to staying discovery further The Staff Master, during a regularly scheduled hearing heard from the parties

and informally reported to the Court that they wished to argue the motion to stay The Court scheduled

oral argument heard from the parties, and took the matter under advisement

II LEGAL STANDARD AND DISCUSSION

115 Section 33(0) of Title 4 0f the Virgin Islands Code provides that if a Superior Court judge ‘ is of

the opinion that [an] order involves a controlling question of law as to which there is substantial ground

for difference of opinion and that an immediate appeal may materially advance the u1timate termination

of litigation the judge shall so state in the order 4 V I C § 33(0) Superior Court judges have discretion

whether to certify a controlling question to the Supreme Court See In 1e Le Blane, 49 V I 508, 529

(Cabret, J , concurring) 1f the Superior C ourt certifies a controlling question and if the parties timely

apply to the Supreme Court to permit the appeal, the Superior CCurt may stay proceedings pending appeal

See 4 V I C § 33(0) (‘ The Supreme Court of the Virgin Islands may thereupon, in its discxetion, permit

an appeal to be taken from the order, if application is made to it within ten days after the entry of the Oidei;

except that application f01 an appeal hereunder may not stay pioceedings[] in the Superior Court unless

the Superior Court judge 01 the Supreme Court or a justice thereoforders a stay of the proceedings ) The

Viigin Islands Supreme Court has not decided what a party must show to obtain a stay pending appeal 01

a controlling question, and no Superior Court judge has addressed this question either

1% The Defendants correctly note that this is an issue of first impression in the Virgin Islands (See

Mot 5 (‘ Section 33(0) does not provide guidance on the standard for issuance of such a stay, and there is

no Virgin Islands precedent establishing a standard ) ) The Plaintiffs concur (See P15 Opp n to Defs Jt

Mot to Stay Pr00 Pending Interloc App 5 filed Jan 9 2024 (heleinafter Opp n ) (‘ While the Virgin

Islands Supreme CQuit has not directly addressed the standard for stays pending an mterlocutory appeal E1120 Holdmg Corp (ta! 1 31214130211 Fm Mgmt 1m eta] Case No sx 2018 CV 00146 2024 VI Super 10 Memorandum Opinion and Order Page 6 of 15

under Section 33(0), it has directed courts to consider the following factors in stays pending an appeal

from an order or judgment (1) whether the movant has made a strong showing that he is likely to succeed

on the merits; (2) whether the movant will be irreparany injured absent a stay; (3) whether granting the

stay will substantia11y injure the other parties interested in the proceedings; and (4) where the public

interestlies (citing Rajam T110/M0/l01tIdCaSE11telS Inc ,8 Ct CiV No 2008 071,2009 WL 321347

*2 (V1 Jan 22 2009) (pe; cmzam) Yusufx Hamed 59 VI 841 848 n 3 (2013)) ) The Defendants a1so

rely on the four factor test announced in Roms (See Mot 12 (Citing R0](lS)) But they first point to

persuasive authority where courts have considered a stay because ‘ ‘[t]he entire case is essentially involved

in the appeal Id at 5 (internal quotation marks omitted) (quoting Combase Inc 1 Bzelskz, 143 S Ct

1915 1919 20 (2023)) Since Section 33(0) ofTitle 4 ofthe Virgin Islands Code is modeled after 28 USC

1292, the Defendants cite Combase as persuasive The Plaintiffs wholeheartedly disagree Lastly, the

Defendants cite the general authority of courts to manage their cases, which includes the inherent authority

to impose a stay See Id at 4 n 4 (citing, Inter (Illa, Landzs \ N Am C0 , 299 U S 248, 254 (1936)) The

Court will tum to the Defendants last argument first

117 Inheient authority is a valid source of authority Cf In 16 McRae, 74 V I 620, 634 (2021); see

also Olson v V] Watei & Pow e1, 2023 VI Super 64, 11 24 (“ Virgin Islands courts have the inherent

authority to economically manage their dockets to best promote the fair and efficient resolution of the

dispute between the parties ’” (citation omitted» But ‘ courts across the country have maintained that

inherent authority should be recognized and yet employed rarely[ ] State 1 Jess, 184 P 3d 133, 164 (Haw

2008) (‘ ‘[C]ourts across the country have maintained that inherent authority should be recognized and yet

employed rare1y[ ] (brackets and ellipsis omitted) (quoting Wynn 1 State 879 A 2d 1097 1104 (Md

2005)) accom’ Commorm ealth 1 Wzdizck 467 N E 2d 1353 1355 56 (Mass 1984) ( Ajudge s inherent

auth01ity should be summoned only in the absence of statutory authority ’) In this instance, statutory E) be; Holding C0113 uni 1 B][IL/\ROCl\ Fm Mgmt Inc era] Case No SX 2018 CV 00146 2024 V1 Super 10 Memorandum Opinion and Order Page 7 of 15

authority authorizes stays pending application for an appeal of a controlling question of law See 4 V I C

§ 33(0) Thus, statutory authority, and not inherent authority, is what govems here

118 The question remains, however, what standard should govern the exercise of this Court 5 statutOIy

authority Of course, when interpreting statutes, courts look first to the statute s plain meaning See 6 g ,

Gumbs v People, 59 V I 784, 798 (2013) The Defendants are correct that the Virgin Islands statute is

similar to the federa1 statute ' But the Virgin Islands statute differs in one respect, a respect that may be

controlling The Virgin Islands statute provides that the case ‘ may not be stayed unless the judge or a

justice orders it stayed, whereas the federal statute provides that the case shall not be stayed ‘ Typically

shall is meant to impose a duty (e g , you shall file your taxes by Apiil 15) But when followed by not,

shall often instead means may (i e , you shall not means you may not) ” Young Conservanves of Tet

Found 1 Smartesk 73 F4th 304 312 (5th Cir 2023) (citing Words of Authority Bryan A Garner

Ga} 118} ’s chtzonary ofLegal Usage (3d ed 2011)) The problem is ‘ that ‘shall can bear five to eight

senses even in a single document[ ] ’ Id (quoting Gamer) Many courts equate ‘ shall not ’ with may not ’

even though may is permissive and shall is mandatory Cf. Commonwealth i Dalton, 5 N E 3d 1206, 1209

(Mass 2014) ( [W]e see no distinction between the words ‘shall not and ‘may not in terms of their

practical consequence Neither allows the exercise of discretion Where the Legislature grants discretion

’ Compale 4 V I C § 33(c) ( Whenever the Superior Court Judge in making a civil action or order not otherwise appealable under this section, is of the opinion that the order involves a controlling question of law as to which there is substantial ground for difference of opinion and that an immediate appeal from the order may materially advance the ultimate termination of litigation the Judge shall so state in the order The Supreme Court of the Virgin Islands may thereupon in its discretion permit an appeal to be taken from the order if application is made to it within ten days after the entry of the order except that application for an appeal hereunder may not stay proceedings in the Superior Court unless the Superior Court judge or the Supreme Court or a Justice thereof orders a stay of the proceedings ) ml}: 28 U S C § 1292(b) (‘ When a district Judge in making in a civil action an order not otherwise appealable under this section, shall be of the opinion that such order involves a controlling question of law as to which there is substantial ground for difference of opinion and that an immediate appeal from the ordei may materially advance the ultimate temiination of the litigation, he shall so state in writing in such order The Court of Appeals which would have jurisdiction of an appeal of such action may thereupon in its discretion permit an appeal to be taken from such order if application is made to it within ten days after the entry of the order PIOHde [1011(161 That application for an appeal hereunder shall not stay proceedings in the district court unless the district judge or the Court of Appeals or a judge thereof shall so order ) EIbU Holdmg C01}? Lia] 1 BlczcltRoclt Pm Mgmr Inc (I [1/ Case No SX 2018 CV 00146 2024 V1 Super 10 Memorandum Opinion and Order Page 8 of 15

in some Circumstances and denies it in others, the use of the w01d ‘may’ contrasted with the words ‘may

not’ simply clarifies where discretion is granted and where it is forbidden more effectively than the WOIdS

'shall not ’) In 16 Hope Coal , 977 N W 2d 651 658 (Minn 2022) (‘ Other state legislatures have

adopted this exact approach and defined ‘may not as synonymous with ‘shall not, even after defining

‘may’ as permissive and ‘shall as mandatory ”) These courts reason that while ‘ ‘may’ undoubtably

signals permission the plain meaning of ‘may not’ revokes or negates that permission ” 1d Some courts

have found “that the change from ‘shall not’ to ‘may not rendered the [use] discretionary ” Walz‘eis

i Nada]! 751 N W 2d 431 434 (Mich 2008) But see 10’ ( The Court of Appeals erred in its conclusion

that the amendment rendered the tolling provision discretionary ’)

119 One way to interpret the differences between Section 33(0) of Title 4 of the Virgin Islands Code

and Section 1292(b) of Title 28 of the United States Code is to view them as stylistic The fedeial statute

uses more formal language, even archaic, whereas the Virgin Islands statute is simplei The federal statute

refeis to the judge as ‘ he”' the Virgin Islands statute repeats “the judge” rather than use a pronoun The

fedei a1 statute provides that the application for appeal shall not stay proceedings unless the judge so orders

wheieas the Virgin Islands statute provides that the application for appeal may not stay the case

proceedings unless the Judge so orders Viewing the differences as stylistic only would address the

distinctions between the statutes But, regardless of the differences, it is clear that the Virgin Islands statute

did change the word shall to may and provide that the application for appeal may not stay proceedings

unless the Judge so orders In this context, the use of the word may even though negated, coupled with

unless an application for appeal may not stay proceedings unless does read as if the Legislatme

intended to relax the mandatory nature of the federal statute The Legislature could have borrowed the

shall not unless ’ language used by the federal statute Instead they changed it This change cannot

be meaningless because courts must ascribe meaning to all words in a statute and to differences in Elba Holding Corp am i BIHCAROClt Fm Mgml Inc (I (1/ Case No SX 2018 CV 00146 2024 VI Super 10 Memorandum Opinion and Order Page 9 of 15

borrowed legislation Absent evidence to the contrary it is reasonable to conclude that the Legislature

intended that Section 33(c) of Title 4 of the Virgin Islands Code would grant the Judge broader discretion

to stay proceedings pending resolution of a controlling question of law After all if the question truly is

controlling it could to ‘the ultimate temzznatzon of litigation 4 V I C § 33(0) (emphasis added) If the

litigation will terminate, imposing a stay would be prudent

1110 The Court is not convinced that this litigation will terminate In one sense, the Defendants

invocation of Combase’s reasoning is on point The entire case must be involved in the appeal, otherwise

the litigation could not terminate and certification would be improper But if the question were solely

whether the entire case was involved in the appeal the Legislature (and Congress by analogy) would have

provided that the application for appeal shall stay proceedings unless the Judge orders otherwise Again

certification of a controlling question must according to the plain text of the statute, have the potential to

terminate the entire litigation, not an aspect of the case So, the entire case will always be involved in an

interlocutory appeal of a controlling question Instead the diSCIetion to stay proceedings pending appeal

was phrased in the negative that a stay should not be imposed unless the Judge believes that it is

appropriate Thus Combase is distinguishable and more importantly, not binding

111 1 It is for this reason that the Court also does not believe that the four factor test that governs other

stays pending appeal, such as the stay of a judgment or of a preliminary injunction, is appropriate in

analyzing whether to impose a stay pending resolution of a controlling question First like Section

1292(b), appeals under Section 33(0) are ‘ intended, and should be reserved, for situations in which the

[appellate] court can rule on a pure controlling question of law without having to delve beyond the

surface of the record in order to determine the facts McFaI 1m \ Conseco Sens , 381 F 3d 1251, 1259

(11th Cir 2004) (emphasis added) As the United States Court of Appeals for the Eleventh Circuit

explained, 1‘:le Holdmg Cal]? LI (1] 1 B](lC]\ROC/\ Fm Mgml [m (I a] Case No SX 2018 CV 00146 2024 V1 Super 10 Memorandum Opinion and Order Page 10 of 15

The legal question must he stated at a high enough level of abstraction to lift the question out of the details of the evidence or facts of a paxticular case and give it general relevance to other cases in the same area of law And the answer to that question must substantially reduce the amount of litigation left in the case Id

This Court was satisfied that the question that was certified met this high 1eve1 of abstraction Otherwise

the Court would have denied the request to certify the question for interlocutory appeal The facts of the

case, generally have little bearing on the abstract legal question being considered on appeal Instead an

interlocutory appeal of a control1ing question typically only brings the question to the appellate court for

determination

1112 Second and more importantly the first of the four factor test asks about the plaintiff‘s likelihood

of success on the merits See Suzd 1 Law Office of Karm A Bentz, 2021 VI 1U, 11 2 ( To determine

whether a litigant is entitled to a stay pending appeal, this Court considers (1) whether the litigant has

made a strong showing that he is likely to succeed on the merits (2) whether the litigant will be irreparany

injured absent a stay; (3) whether issuance of the stay will substantially injure the other parties interested

in the proceedings; and (4) where the public interest lies (quoting [11 re Najawa, S Ct Crim Nos

2008 0098 etseq 2009 VI Supreme LEXIS 2 *5 6 (V 1 Jan 8 2009)) ) And the first ofthese factors

is ordinarily the most important ’ Id (brackets omitted) (quoting Rajas, 2009 V 1 Supreme LEXIS 6 at

*5)) By concluding that a controlling question is at issue, and that an answer to that question could

terminate the litigation the trial court has by definition, determined whether that the plaintiff is or is not

1ike1y to succeed on the merits It is for this reason that the Court will deny the Defendants motion

1113 The Plaintiffs commenced this action on April 12 2018 The Clerk s Office landomly assigned

the case to a general jurisdiction judge (Brady 1 ) who presided over the case briefly until the former

Presiding Judge (Dunston J) designated the case as complex and transferred it to the then newly

established Complex Litigation Division in an Order dated August 14, 2018, and enteIed August 21, 2018

The Judge assigned at that time to the Complex Litigation Division (Molloy, J ) heard 0131 argument E11381 Hala'mg C0119 era] 1 B]llC/\R()Cl\ Fm ng1111 Inc ()1 a! Case No SX 2018 CV 00146 2024 V1 Super 10 Memorandum Opinion and Order Page 11 of 15

approximately six months later on Maich 27 2019 and concluded that personal jurisdiction should he

addressed before discovery (Cf Hr g Tr 171 4 14 (Mai 27 2019) ( We have the motion to stay

discovery and we also have Plaintiff‘s request for a scheduling order Because Plaintiffs are not requesting

jurisdictional discovery, Im going to first rule on the personal Jurisdiction issues before I issue a

scheduling order And then after that, if necessary we’re going to proceed with a scheduling 01de1 ”

(paragraph break omitted») The prim judge 3 term concluded before personal jurisdiction could be

addressed Further delay resulting in part from the COVID 19 pandemic and its impacts on the courts

meant that this case was not formally reassigned to this Court, and personal jurisdiction not decided, until

several years later

1114 If however the Plaintiffs had been able to force the Defendants to proceed with merits discovery

over the prior six years, it very well might have risen to the level of a due process violation Acc01d

Matthemm Brookslone States Inc 431 F Supp 2d 1219 1227 (S D Ala 2006) (rejectingiequest tor

melits discovery but allowing jurisdictional discovery) (‘ If, in fact personal jurisdiction is

lacking then it offends bedrock notions of due process to continue forcing [the defendant] to participate

in this litigation ’); V1010; za’s Sea at Stores BI and Mgmt 1 Bob’s StOIGS LLC, N0 2 13 CV 1261, 2014

U S Dist LEXIS 34503 *6 (S D Ohio Mar 17 2014) ( Staying merits discoveiy is consistent with the

Court 5 pronouncement above that discovery must not ‘undermine the due process considerations that

personal jurisdiction is designed to protect ’” (quoting In 16 P0156126 Cms N Am Inc , N0 2 11 md

2233 2012 WL 4361430 *2 (S D Ohio Sept 25 2012)» This Court did grant the motion the Defendants

filed to stay discovery until the dispositive motions were ruled on laigely because, Rule 26(d)(4)

notwithstanding, the Court had concerns about the due process implications of ordering parties to go

fmward with mei its discovery (distinguished from jurisdictional discovery) if the trial court 1acks personal

jurisdiction As this Court previously explained, finding the procedural history of this matter illustiative Elbe) Holdmg C011) u‘a/ \ BIUCAROC/x Fm Algmt Inc 61 (1/ Case No SX 2018 CV 00146 7024 V1 Super 10 Memorandum Opinion and Order Page 12 of 15

1f the Court had gianted Plaintiffs iequest in 2018, and denied the Defendants’ motion to stay the result would have been over five years of discovery conducted by the parties and all the expense that would accompany it only for the Court to conclude (assuming only for the sake of discussion) that it lacked personal jurisdiction over the Defendants The Supreme Court of the United States has been clear that it is a denial of due process to require a defendant to litigate in a forum that lacks personal jurisdiction over the defendant Forcing a defendant to conduct full discovery (as Plaintiffs have not asked for limited discovery on one or more narrow issues) would erode the protections offered by the United States Constitution What value is there in being protected from having to litigate in a forum when a defendant is effectively required to litigate the merits of a case only to have the case later dismissed after discovery is complete Costs, time, attorney’s fees and expenses would have already been incurred (Order 8 9, entered Feb 16, 2023 )

Of couise merely challenging personal juiisdiction does not entitle one to a de facto stay See V l R Civ

P 26(d)(4) In fact some courts have concluded that a pending motion to dismiss for lack of personal

jurisdiction presents ex en less mason to stay discovery pending their outcome given that these types of

motions do not go to the merits of the case, but only to the forum in which is proceeds Huey Jzuan

Llang i AWG Remaiketmg Inc No 2 14 CV 00099 2015 U S Dist LEXIS 186313 *5 (S D Ohio July

24 2015) (emphasis added) (quoting Clicmat 1 NMP LLC No 2 09 CV 209 2009 WL 3210379 2

(S D Ohio Sept 30, 2009)) But in this instance, if discovery had gone forwaid, it could have proceeded

for years with personal juiisdiction potentially lacking

1115 All of that is no longer a concern, however, because the Court concluded that the Superior Court

could exercise personal jurisdiction over the remaining Defendants, BlackRock, Inc having been

dismissed The Court does acknowledge that there is substantial ground for difference of opinion as to the

grounds on which personal jurisdiction is being exercised here and, for that reason, granted the Defendants

request to certify the personal jurisdiction question to the Virgin Islands Supreme Court for determination

Although the Supreme Court has not yet ruled on the Defendants petition, this Court does not see any

justification for delaying discovery any further The Supreme Court has discretion to decide whether to

grant the petition, which also means that it can eithei grant it 01 deny it Elbe} Holdmg COIp Lia] \ Bltzthock Fm Mgmt Inc

1116 If the Supreme Court were to deny the Defendants petition, there certainly would be no basis for

staying discovery And even if the Supreme Court grants the petition and accepts jurisdiction 01‘ the

certified question, there is no set time in which that Court must act on it That is, even though interlocutory

appeals must be considered on an expedited basis see V I R App P 6(b) and even though the appeal

generally should be decided within thirty or, at most, sixty days from when it was considered or any

supplemental briefing submitted, see VI S Ct 10 P 5 5 3(a), certified questions can take longer to

resolve Cf. Edwuds \ GEC LLC S Ct 2017 0025 2017 V 1 Supreme LEXIS 46 *1 (V 1 Aug 1

2017) (noting in caption appeal argued May 16 2017 and decided August 1, 2017) 1ep0; ted (wthout

(ligament date) at 67 V I 745 (2017); see also (2 g Balbom 1 Range; Am thhe VI Inc , S Ct Civ

No 2018 0022 2019 V 1 Supreme LEXIS 29 *1 (V 1 June 3 2019) (notng in caption appeal aigued

April 10 2018 and decided June 3 2019) I€p01t€d (HlihOllf argument date) at 70 V l 1048 (2019) Even

if the Supreme Court grants the Defendants petition, keeping discovery stayed pending however long it

might be until the Supreme Court answers the certified question since this Court, of course, has no

control over how long that Court might need to make its decision might swing the same pendulum in

the opposite direction and violate the Plaintiffs due process rights

1117 Finally, even if the Supieme Court does grant the Defendants petition and accepts Juiisdiction of

the controlling question, and even if that Court’s decision is handed down fairly quickly after the mattei

is submitted, there is no guarantee that the Defendants will prevail Again by certifying a controlling

question, this Court acknowledged the substantial ground for a difference of opinion If the Supreme Court

disagrees with this Court 5 conclusion it will terminate this litigation But certifying a controlling question

of law for interlocutory review should not be viewed as an indication that the trial court doubts the

correctness of its own decision Instead, it is simply an acknowledgement that the area of law is uncertain

and answering the legal question will provide that certainty Elba Holding C011) eta] \ B/(tc/tRock Fm Mgmt Inc LI (1/ Case No SK 2018 CV 00146 2024 VI Super 10 Memorandum Opinion and Order Page 14 0f15

III CONCLUSION

1118 For the reasons given above, the Court concludes a stay of discovery is not warranted hex e Section

33(0) ofTitle 4 0f the Virgin Islands Code provides that a stay may not be imposed on proceedings pending

application for appeal of a certified question unless the Judge or a justice so orders Although the legal

standard governing stays under Section 33(c) is unsettled this Court believes that the statute governs and

mitten in the negative, it provides that a stay may not be imposed unless That is strong evidence that

stays are ordinarily disfavored The Defendants contend that a stay should be imposed because the entire

case will be at issue in the certified question That is always the case however when a controlling question

01 law is certified that might lead to the ultimate termination of litigation The Virgin Islands Legislature

chose to incorporate language into the statute that a stay may not be imposed unless the judge so orders

Heie a de facto stay has been in place since the Defendants appeared on June 1, 2018, because the prior

judges assigned to this ease did not hold a case management confeience as required by Rule 16 0f the

Virgin Islands Rules of Civil Procedure, nor rule on the August 7, 2018 motion to stay discovery It was

not until this Court on February 16 2023, granted that motion that discovery was formally stayed That

Order provided discovery would remain stayed pending a decision on the motions to dismiss filed by the

Defendants (Order 10, entered Feb 16 2023 ) Since the motions to dismiss have been decided, and

this Court found that exercising personal jurisdiction is proper, staying discovery any longer would be

improper Six years is long enough The Plaintiffs are entitled to at least commence discovery even if this

f01um is not the ultimate form that will hear this matter

Accordingly, it is hereby

ORDERED that the Joint Motion to Stay Proceedings Pending Interlocutory Appeal filed by the

Defendants on December 22 2023 is DENIED It is further Erbey Holding Corp er a] v BlackRock Fm 11/]ng Inc et a] Case No SX 2018 CV 0014 2024 V1 Super 10 Memorandum Opinion and Order Page 15 0f 15

ORDERED that the Staff Master shall PROCEED on an expedited bans t0 HOLD a case

management conference and ISSUE one or more orders to establish and manage discovery L

DONE and SO ORDERED this 2% day of February 2024

HAROLD W L WILLOCKS J Administrative Judge of the Superior Court

ATTEST Tamara Charles Clerk of the Court

By " é Court Clef Dated g {:34 [2.2.2