The court also denied the motion for default judgment filed by Ramon M. San Nicolas, Vicente C. Aldan, Tarsicio Olopai and Juan M. Deleon Guerrero against Gov. Benigno R Fitial and Department of Public Lands Secretary John S. Del Rosario.
Former Judge Edward Manibusan appeared on behalf of the plaintiffs while Assistant Attorney General Brad Huesman appeared on behalf of the government during the hearing on May 23.
The defendant asked the court to dismiss the plaintiffs’ claims on the basis that the Constitution does not grant the plaintiffs standing to sue and the lawsuit was an improper one because “the plaintiffs seek to second guess the judgment of government officials.”
The defendants also stated that the plaintiffs misrepresented the facts and that the government is entitled to a summary judgment.
Moreover, the government added, the plaintiffs failed to state a claim upon which relief may be granted, and their lawsuit would deprive a party of the lease of due process.
On Nov. 11, 2008, the plaintiffs filed a complaint for injunctive and declaratory relief to challenge the legality of a lease with the government through DPL regarding 1.6 million square meters of land in Kagman for commercial development.
The plaintiffs said the rental rate of the lease was unreasonably low, not commercially reasonable, was contrary to public interest and was in violation of the CNMI Constitution.
They said the Constitution allows “a taxpayer to bring an action against the government or one of its instrumentalities in order to enjoin the expenditure of public funds for other than public purposes or for a breach of fiduciary duty.”
The plaintiffs said the defendants breached their fiduciary duties by renting the public land below market rental value and violated the CNMI Constitution by leasing public land for more than 40 years.
The defendants argued that the lawsuit against them must be dismissed because they are government officials entitled to immunity.
The court stated that “qualified immunity is available to government officials only when they are sued in their personal capacity.”
The defendants said that taxpayers like the plaintiffs may sue only when there is an expenditure of public funds.
Court documents stated that the original lease of the 1,615,053 square meters was assigned to SC Properties Inc. on Oct. 13, 1989, and was assigned to Saipan Laulau Development Inc. on Aug. 5, 1993.
The original lease was assigned to United Micronesia Development Association Inc. on Feb. 15, 2005.
On March 14, 2007, UMDA assigned the lease to Kumho Holdings Co. Ltd.
Kumho and DPL began discussions on a proposed multi-million-dollar investment in Laolao Bay Golf Course Resort in return for a new lease.
The agreement required a $50 million investment to upgrade the Laolao Bay Golf Course Resort.
DPL advertised the notice of its intention to enter into a new lease with Kumho on eight separate occasions in three languages, but the plaintiffs said the notices did not comply with the law because they did not solicit other offers.
