Imperial Pacific International Friday filed two lawsuits in federal court suing the CNMI governor and the members of the Commonwealth Casino Commission, each in their official and personal capacities.
While IPI names Ralph Torres in its factual allegations as the governor who committed alleged breaches against the company while he was the governor, IPI has named Arnold Palacios in both lawsuits, as he is the incumbent. Interesting to note is that the Commonwealth Legislature, which has exclusive jurisdiction over who qualifies for immunity, has not waived sovereign immunity for elected and appointed officials to be sued for civil violations allegedly committed in the line of duty in their personal capacities.
The first lawsuit asks the U.S. District Court for the CNMI to prevent the CCC from having power to interpret the terms of the 2014 Casino License Agreement (CLA, or contract) and to adjudicate any claims arising from it, and to nullify every fine, demand for payment, and suspension of the exclusive casino license.
The second lawsuit asks the federal court to strike down the 2015 law imposing an annual $3 million regulatory fee. That fee funds the operations of the CCC, including the salaries of its commissioners, who are being sued.
IPI victory in either lawsuit would result in the wiping away of IPI’s debts to the Commonwealth government, and would require taxpayers and the sued officials to foot the bill for IPI’s attorneys’ fees.
The underlying premise of both lawsuits is that the Commonwealth government by means of the legislature and the CCC has violated the U.S. Constitution’s contracts clause, IPI’s due process rights, and the Constitution’s prohibition against bills of attainder and ex post facto laws. These violations occurred, according to the lawsuits, when the legislature added the regulatory fee after the execution of the CLA, gave the CCC the revenues from that fee collection for its operations, empowered the CCC as a quasi-judicial body; and when the CCC issued several actions to collect the regulatory fee and revoke the casino license without recognizing force majeure contractual exceptions when the pandemic happened.
IPI on December 27 last year sued the CCC on these grounds in federal court, but agreed to withdraw the lawsuits if the CCC granted an extension on the revocation of the exclusive license matter. CCC granted the extension to its demand for payment of accumulating annual regulatory fees since 2020, and on January 26 both sides agreed to dismiss the lawsuit without prejudice, meaning IPI could bring the suit again. And it did… after the CCC granted the extension.
Among the arguments IPI makes is that its exclusive funding of CCC’s operations creates “arguably personal, pecuniary interest in finding IPI in violation…;” an argument that opponents of the casino ironically have made since the then-republican legislature created the CCC’s funding mechanism. Also ironic: Among those republican legislators – in fact, among the fathers of the laws empowering IPI in Saipan – is Rafael “Ralph” Demapan, who is being sued as well.
2 Comments
Russ Mason
02/24/2024 at 4:58 PM
I well remember the clandestine junket to Hong Kong and Macao by greed-fueled legislators. Don’t recall the year. 2018?
Now it has come to this. Although I am not surprised one whit, I had no idea of the monumental failure of all the parties involved, particularly the CNMI government.
If any citizen even breathes about gambling as a financial solution, the person deserves to be [censored] and often.
oSuRSL2nmf
02/26/2024 at 6:49 AM
1. Marianas Variety News and Views first covered the Hong Kong trip of certain legislators upon their return from that trip. Their trip was “all-expense” paid to/fro as official representatives of the CNMI.