Nov. 17, 2005 –District Court Judge Curtis V. Gomez, faced with a request to recuse himself from three court cases between Innovative Telephone Corporation and its bankers, rendered a split decision, withdrawing from one of the cases, and keeping jurisdiction in two others.
In each instance, ICC‛s bankers, Virginia-based nonprofit lending institution the Rural Telephone Finance Corporation, had asked that the judge remove himself because it argued that: 1) Holland Redfield, an ICC officer who also serves as a Virgin Islands member of the Republican National Committee, had played a major role in the judge's own appointment, and 2) because RTFC had dismissed one of its local lawyers, the judge's wife.
RTFC raised these twin issues in a brief filed with the Third U.S. Circuit Court of Appeals, and the Third Circuit, while not passing judgment on these arguments, had given Judge Gomez 30 days to do so. (See "Prosser's Adversaries Win in Another Mainland Court").
The Third Circuit, located in Philadelphia, announced that it was retaining jurisdiction in the case, so it will be up to it to decide what happens next.
The two court cases that Gomez did not recuse himself from relate to RTFC‛s efforts to get ICC to repay more than half a billion dollars that RTFC lent to ICC over the years on the grounds that ICC had broken loan agreements. ICC has vigorously denied that it violated any valid loan agreements, and has counter-sued RTFC in the U.S.V.I. federal courts accusing the nonprofit of "maliciously using the courts for improper purposes with an agenda of destroying one of its borrowers of good standing . . ." (See "Prosser Strikes Back in New Law Suit").
The case in which the judge did recuse himself was filed against ICC by RTFC because of the floating of some $80 million in Vitelco preferred stock; it is called the "derivative case" in Judge Gomez‛s ruling. RTFC complained that the stock issue, which calls for the payment of $8 million a year in interest, is a needless burden to telephone users in the islands; at least $28 million of the money borrowed from Vitelco‛s stock issue were invested in an effort to gain control of the telephone company in Belize. The Belize investment is, so far, a failure for ICC‛s owner, Jeffrey Prosser. The investment also is the subject of several other judicial actions in Belize, in Miami, and more recently, in the Fourth U.S. Circuit Court of Appeals in Atlanta.
Gomez shrugged aside the suggestion that he might be biased in the case because of the thanks he expressed to Redfield at the judge's investiture, saying "an expression of gratitude could not be a legal basis for which recusal was necessary. At the investiture, this court also thanked many others in attendance . . ."
Gomez did not mention RTFC‛s statement about Redfield‛s membership of the Republican National Committee, nor the key role that the committee members play in judicial appointments in jurisdictions, like the Virgin Islands, where the White House has no local elected Republican officials to consult.
In his decision, Gomez indicated that his wife, while retained by RTFC for other work, was not directly involved in the cases under review. He also used the neutral term "parted company" to describe RTFC's termination of the services of her law firm.
Gomez used a footnote in his decision to praise his spouse, saying "Simone Francis is an extremely talented and highly regarded attorney with the law firm of Ogletree, Deakins, Nash, Smoak & Stuart, LLC (‛Ogletree Deakins‛)."
As to the puzzling question of why, given what appear to be the same set of arguments for and against recusal in all three of these cases, he chose to recuse himself in one, but not in the other two, Gomez had this to say:
"The Court agrees that the derivative action – the only Virgin Islands-initiated action before this court – is a different species in kind, legally and factually from the Virginia-initiated default and guarantee actions. Though the Court has found no objective and verifiable facts that a reasonable person would [use to] question the court's impartiality in the derivative action such that recusal would be required, with an overabundance of caution, the Court will recuse in that separate and distinct matter."
RTFC had argued, in a different context, that there were differences among the cases but had not argued that recusal was more appropriate in one than another. The reference to the Virginia-initiated action related to the fact that RTFC had sued ICC for the half billion-dollar payment originally in the federal courts in that state. That suit (but not another somewhat similar one) was subsequently transferred to the Virgin Islands at the request of ICC.
Gomez had 30 days to make the decision as ordered by the Third Circuit. He made it on day 30.
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