SUPERIOR Court Associate Judge Joseph N. Camacho has denied the Commonwealth Ports Authority’s motion to dismiss the complaint of Star Marianas Air Inc. which alleges nine claims of breach of the airline user agreement.
In April 2009, Star Marianas and CPA entered into an airline use agreement and lease of premises through which Star Marianas acquired certain premises, facilities, rights, and privileges in airport properties owned and operated by CPA.
On Dec. 14, 2020, Star Marianas, through attorney Mark Scoggins, sued CPA and alleged nine violations of the airline use agreement or AUA and lease of premises.
Star Marianas in its complaint claims that CPA failed, and continues to fail on an annual basis, to adjust the fees and charges as required by the AUA.
CPA has failed, and continues to fail on an annual basis, to properly calculate the fees and charges, to provide an annual proposed budget, to consider comments as required by the AUA, the lawsuit stated.
Star Marianas also claims that CPA failed and continues to fail on an annual basis to give notice of annual fee and charge rates as required by the AUA.
The AUA provides that in the event CPA does not timely give annual notice of the rates for fees and charges, adjustments for overpayment and underpayment shall be made after the calculations are properly made and notice properly given, Star Marianas’ lawsuit stated.
It also claims that CPA, in breach of the AUA, has failed to repair Star Marianas’ preferential use premises on Saipan that were damaged during Typhoon Yutu.
“As a result of CPA’s failures and breach, Star Marianas has been forced to conduct operations on Saipan out of shipping containers and with no running water or restroom facilities,” the lawsuit stated.
It added that CPA has failed to reduce the fees and charges as a result of the damaged facilities in breach of the AUA.
Star Marianas also claimed that “it has endured substantial damages as a result of CPA’s multiple breaches of the AUA, including excessive costs, loss of profits, and hindered operations.”
In his ruling issued on Feb. 25, 2022, Judge Camacho noted that as CPA did not challenge Star Marianas Air’s second, third, and ninth claims in its motion to dismiss, “these three claims will proceed with litigation.”
As to the plaintiff’s first, fourth, fifth, sixth, seventh and eighth claims, Judge Camacho found that Star Marianas has alleged enough facts to sufficiently provide CPA with fair notice of the nature of the claims.
CPA, represented by attorney Joseph Hallahan, asked the court to dismiss Star Marianas’ complaint.
He said “(1) Star Marianas’ first through seventh claims should be dismissed because it has not pled facts sufficient to show that these claims were brought within the applicable statute of limitations; (2) Star Marianas’ first, fourth, fifth, sixth, and eighth claims should be dismissed because it failed to directly or indirectly provide allegations in the complaint that Star Marianas’ damages were a result of CPA’s breaches of the AUA; and (3) Star Marianas’ first, fourth, fifth, sixth, and eighth claims should be dismissed because its claims of excess costs and lost profits are speculative and unsupported by facts.”
In June 2018, District Court for the NMI Designated Judge Frances M. Tydingco-Gatewood dismissed a similar lawsuit filed by Star Marianas against CPA.
Star Marianas Air sued CPA for breach of contract, and violation of the Anti-Head Tax Act or AHTA.
In her ruling, Judge Tydingco-Gatewood said Star Marianas had no private right of action under the AHTA.
She also noted that Star Marianas had not exhausted its administrative remedies.
Judge Tydingco-Gatewood also dismissed Star Marianas’ claim of breach of contract on the ground that without the AHTA claim the federal court lacked jurisdiction.
Joseph N. Camacho
