And the drama continues over at Caneel Bay…
Robert A. Malloy, the federal judge who has been presiding over the federal Caneel Bay case that was filed in June 2022, has been replaced. Cheryl Ann Krause, a federal judge on the United States Court of Appeals for the 3rd Circuit, replaced Judge Malloy without explanation late last month. The case will decide whether the National Park Service will retain ownership of the 150-acre parcel or if a private equity firm will instead.
What makes this move odd is that it comes with zero explanation as to why a judge who is physically outside of the Territory would be assigned to this case or why Judge Malloy was replaced. Judge Krause is based in Pennsylvania. The docket simply stated:
ORDER (RAM) REASSIGNING CASE. This case is reassigned to the Honorable Cheryl Ann Krause for all further proceedings. Chief Judge Robert A. Molloy is no longer assigned to this case.
The United States Court of Appeals for the Third Circuit serves the areas of Pennsylvania, New Jersey, Delaware, and the US Virgin Islands, so we clearly fall under its jurisdiction. I just find it odd that Judge Krause will travel to the island to hear this case. It is common for judges to get reassigned to cases, but there is usually a clear explanation for it.
I reached out to a repeat tour guest Monday, who happens to serve as a state judge in Georgia, and asked her thoughts on the matter.
“I would not call it common, but it is not unusual, particularly in a smaller jurisdiction,” she told me.
Judge Krause joined the court in 2014 after being nominated by President Barack Obama. According to Alliance for Justice, Judge Krause “has substantial experience litigating complex financial fraud cases.”
“Krause led the prosecution and investigation of a $65 million food stamp fraud conspiracy,” according to Alliance for Justice. “The investigation spanned two years and resulted in more than 60 pleas and convictions, including of several bank officers. It also led to a second wave of prosecutions for an international narcotics money laundering conspiracy, which Krause also handled.”
As you may recall, Judge Malloy postponed the case’s bench trial indefinitely last September, writing “…due to the Court’s calendar and criminal trials taking precedence, the trial in this matter cannot go forward as scheduled.” Perhaps this is why Judge Krause was assigned the case…
An in-person status conference with Judge Krause is scheduled for next Wednesday, January 17th in St. Thomas. Hopefully, we will get more answers then. In the meantime, you can click this link to get the entire backstory on the debacle that the Caneel Bay Resort has become.
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