Revised Motions Made In CNMI Power Agreement Lawsuit

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AG’s office moves to substitute government for Fitial

By Ferdie de la Torre

SAIPAN, CNMI (Saipan Tribune, March 7, 2013) – Superior Court Associate Judge David A. Wiseman heard yesterday the Office of the Attorney General's (OAG) motion to substitute the Commonwealth of the Northern Mariana Islands government for former governor Benigno R. Fitial in the lawsuit filed against him by Rep. Janet U. Maratita (IR-Saipan) and others over the signing of the $190.8-million power purchase agreement (PPA).

Wiseman also heard Fitial's motion to dismiss him from the lawsuit. The other motion was Saipan Development LLC's (SDLLC) motion to lift the court's preliminary injunction. The Delaware-based Saipan Development is the PPA contractor.

After listening to the counsels' arguments, the judge placed the motions under advisement.

On Aug. 31, 2012, Wiseman granted Maratita's and co-plaintiffs' request to issue a preliminary injunction that bars Fitial and co-defendants from "continuing, pursuing, and/or performing on the power purchase agreement."

Fitial's counsel, assistant attorney general David Lochabay, asked the court to substitute the CNMI government for the former governor and dismiss the latter from the lawsuit.

Lochabay cited Public Law 15-22, the Government Liability Act, which provides for the mandatory substitution of the CNMI in cases where Commonwealth employees are being sued in their individual capacities for actions taken within the scope of their employment.

Ramon Quichocho, counsel for the Senate, Maratita, and Sen. Ray A. Yumul (IR-Saipan), argued that since the Act specifically exempts a constitutional taxpayers' "civil action" from the exclusive remedy rule, Fitial's motion to substitute must be denied.

In an interview after the hearing, Lochabay said Public Law 15-22 requires that the government be substituted as a defendant when a government employee is sued for actions that were taken within the scope of his employment.

"If you didn't have a law like that nobody would run for work in the government. Certainly, nobody will run in hot positions in the government because they're going to be personally liable for everything that they can do," Lochabay said.

Quichocho pointed out that the Act does not apply to those who violate the CNMI Constitution so Fitial is a proper party in the case.

On the issue of the preliminary injunction's relevance, Quichocho said there is still a PPA that is a live contract.

"So that's the very thing we're trying to have the court declare void. Of course it's relevant. The effects of it against the people of the CNMI are still very real if the preliminary injunction is lifted. Thankfully, there is a preliminary injunction at this point," Quichocho said.

Saipan Development LLC counsel William Fitzgerald said the injunction is pretty much irrelevant at this point since the CNMI government has informed his client that they're not intending to go forward with the PPA contract.

"So there is nothing really to enjoin because there's not going to be a contract," Fitzgerald said.

When asked if Saipan Development is thinking of suing Fitial and the CNMI government, Fitzgerald said there is a potential for breach of contract but whether or not they will do it remains to be seen.

"How many unpaid judgments are pending against the CNMI government? So even if you got a judgment, will they pay it?" Fitzgerald asked.

The plaintiffs want the court to declare the 25-year PPA "unconstitutional, illegal, unconscionable, and unjust, and therefore, cancelled."

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