Settlement Expected Between USEPA, CNMI, Utility Corp.

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Government hopes to avoid Federal receivership

By Haidee V. Eugenio

SAIPAN, CNMI (Saipan Tribune, Sept. 23, 2014) – The U.S. Environmental Protection Agency, the Commonwealth Utilities Corp., and the CNMI government drafted yesterday a proposed settlement agreement that is intended to resolve the receivership matter that EPA had requested.

This developed as U.S. District Court for the NMI designated judge David O. Carter gave the parties more time to negotiate and allowed them to submit the proposed settlement agreement by Thursday at 11am.

If no settlement agreement is reached, all parties are required to appear in court on Sunday, Sept. 28, at 12pm, and the receivership matter will be heard on Monday, Sept. 29.

CUC and the CNMI government were given until Friday to file their opposition to EPA’s motion for receivership. EPA was allowed to reply by Sunday.

U.S. Department of Justice Environmental Enforcement Section senior attorney Bradley R. O’Brien, as counsel for EPA, told the court that they have a proposed settlement deal but he needs an extra day to get it to the highest level for approval.

EPA had asked the court to hold CUC in contempt, breach, and appoint a receiver to oversee the oil pipeline project, Tank 102 construction, and other court-ordered projects.

At a session Sunday night, O’Brien disclosed that EPA, CUC, and the CNMI government have made substantial progress after their meeting earlier that noon. O’Brien then stated that the parties are now engaged in "sensitive settlement discussions."

At a hearing yesterday at 2pm, CUC legal counsel James Sirok argued that they should be given more time to provide a briefing about the receivership matter.

O’Brien disagreed and explained why the court should grant their request for an expedited hearing on their motion.

Acting attorney general Gilbert Birnbrich joined Sirok’s position that they should be given "meaningful opportunity" to submit their brief and opposition.

Birnbrich said there are extensive documents involved and that they need a couple of days to review them.

Carter then intervened: "Are we going to resolve this on Wednesday or no?"

Carter reminded the parties that they were the one who approached and told him on Sunday that they’re engaged in "sensitive settlement discussions."

O’Brien said that he had put together a complete settlement agreement but when the judge pointed out that he has not seen a draft of it yet, O’Brien admitted that he has not spoken with the "highest level" at DOJ about the proposed settlement deal.

Carter ordered the parties to continue discussions and return at 4pm yesterday.

"I think we’ve taken enough time now," said the judge as he stood up.

Shortly after Carter left the courtroom, O’Brien, Sirok, Birnbrich, Office of the Attorney General Civil Division chief Reena Patel, and EPA assistant regional counsel Janet Magnuson huddled up for a private discussion inside the courtroom.

Carter returned to the courtroom at 4:25pm and explained the dates for the parties to file their respective briefs under the rules.

Carter also pointed out how departure from the rules is appropriate in this case. He said he and the parties have already held 58 status conferences on the issues and everyone is acquainted with all the non-compliance with orders and deadlines.

Sirok said CUC’s position is that they’re in line with the settlement.

At 6:03pm, Carter returned to the courtroom and asked if any progress has been made between CUC and Smithbridge Guam Inc., the terminated contractor for the oil pipeline project. Sirok replied that they feel that they will reach a resolution.

Smithbridge counsel Mark Hanson, who was with a Smithbridge official, said they agree with Sirok.

Carter then set the dates for filing the proposed settlement agreement and the dates of hearing if no deal is reached.

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