DESIGNATED Federal Judge David O. Carter has denied Imperial Pacific International’s second emergency motion for a temporary restraining order.
IPI, through attorney Michael Chen, requested the District Court for the NMI to issue an order restraining the Commonwealth Casino Commission from deliberating and voting on the charges filed by its executive director to revoke IPI’s casino license.
“This relief is necessary to preserve the status quo pending adjudication of IPI’s important claims (presently pending in this court),” Chen added.
In a 12-page order on Friday, Judge Carter said IPI’s second motion for a TRO has “few new facts from those presented in IPI’s first motion for a TRO that are relevant to this court’s analysis.”
“First, as to [CCC] Chairman [Edward C. Deleon] Guerrero, IPI does not specify what role [he] plays in the deliberation and voting on the revocation hearing and therefore does not support this court restraining him from deliberation and voting on the revocation hearing,” Judge Carter said.
He said IPI states in its second motion for a TRO that Deleon Guerrero did not act at the revocation hearing in a quasi-judicial capacity and only participated as “citizen Guerrero.”
IPI also requested the court to restrain CCC Vice and Acting Chairman Ralph S. Demapan and Commissioners Ramon Dela Cruz, Mariano Taitano and Martin Mendiola from deliberating and voting on the revocation hearing.
“To support IPI’s due process cause of action, IPI makes a series of contradicting arguments regarding possible incentives and biases the … Commissioners may have when they are deciding whether or not to revoke IPI’s casino license for IPI’s failure to pay the regulatory fee,” Judge Carter said.
“On one hand, IPI argues that the Commissioners that will deliberate and vote as to the revocation of IPI’s casino license are biased because the CCC itself is entirely funded from the annual regulatory fee from IPI and its affiliates,” the judge added.
However, IPI admits that it has failed to pay the regulatory fee, along with other fees “for a few years,” the judge said. “This indicates that the CCC is not funded solely on IPI’s payment of the regulatory fee each year as the CCC has continued to exist without IPI’s payments,” the judge added.
IPI contends that based “upon information and belief, CCC is operating on funds borrowed from CNMI treasury.”
But “IPI does not provide any support for this assertion,” Judge Carter said.
Additionally, this assertion contradicts IPI’s first argument for bias by the commissioners because if true, then the CCC may be funded through other means, the judge said.
“Finally, when IPI discusses that public interest is supported by the Court issuing a TRO, IPI argues that the resumption of its business operations will increase CNMI’s tax revenues and allow IPI to pay fees due to the CNMI,” Judge Carter said. “This indicates that IPI is not presently capable of paying fees due to the CNMI unless it were able to resume operation. The Court finds that this contradicts IPI’s assertion that the Commissioners would be incentivized to revoke IPI’s casino license as there would not be means for IPI to pay outstanding fees and penalties without resumption of its operation,” the judge added.
He said IPI is not clear about the roles the commissioners play in the upcoming deliberation and voting on the revocation hearing.
“For example, although IPI seeks the Court to restrain Commissioner Mendiola from deliberating and voting on IPI’s revocation hearing in its second motion for a TRO, later in the same motion, IPI does not include Commissioner Mendiola in its assertion that the four hearing commissioners have direct, substantial, arguably personal pecuniary interest in the outcome of the revocation hearing,” the judge said.
“Instead, IPI includes [former] Commissioner Diego M. Songao who is not a named defendant, nor is IPI asking to enjoin … Songao,” the judge added.
As to IPI’s due process claims, Judge Carter said IPI previously appealed CCC’s decision in Order No. 2021-002 in which CCC suspended IPI’s gaming license, ordered IPI to pay $18.65 million due under IPI’s annual license and regulatory fee, and imposed an additional $6.6 million in penalties.
“The CNMI Supreme Court ruled that the sanctions the CCC imposed against IPI for Complaints 2020-003, 2020-004, and 2020-005 were proper,” Judge Carter said.
He said of particular importance is Complaint 2020-003: “failure to maintain the required cash or cash equivalents in a CNMI or United States bank,” and Complaint 2020-005: “failure to pay the Casino Regulatory Fee.”
“In this prior CNMI case, IPI did not raise a due process claim on the grounds stated in its Complaint in the present case nor in its second motion for a TRO. Instead, IPI claimed [that] CCC violated [IPI’s] due process rights ‘by considering evidence outside the record.’ The CNMI Supreme Court decision constitutes a final judgment on the merits of an action. Further, IPI is the same party that brought the case in the CNMI Supreme Court. Last, IPI could have raised its due process claim it now contends in its Complaint and second motion for a TRO in its earlier action in the CNMI Supreme Court — and IPI did in fact raise a due process claim on other grounds,” the judge said.
He does not find that IPI has met its burden that it will likely be successful on the merits of its due process cause of action because of the res judicata effect under CNMI law.
In law, res judicata, a Latin term meaning “a thing adjudged,” refers to a legal doctrine that prevents the same matter that has been finally decided on its merits from being litigated again between the same parties.
According to Judge Carter, “The Court does not address the likelihood of success on the merits for IPI’s contract impairment cause of action because IPI alleges a new basis for its contract impairment cause of action … and the Court concludes that it is not properly before the court.”
As for IPI contention that public interest will be served through the issuance of a TRO because of judicial economy and job creation, Judge Carter said the court “previously addressed IPI’s argument regarding job creation, [but] IPI has not provided any new support beyond IPI’s speculation and those who work for IPI.”
Regarding IPI’s new argument that issuance of a TRO will support public interest through judicial economy, “the court finds this argument lacks support due to the likelihood of success on the merits of its due process cause of action for which IPI seeks its second TRO,” Judge Carter said.
In the court’s previous decision, Judge Carter said IPI did not meet its burden to demonstrate a likelihood of success on its due process cause of action or that IPI would likely suffer irreparable harm. In addition, the judge said the balancing of equities did not support issuance of a TRO, and the public interest would not be served through the issuance of a TRO.
“Because the Court previously found that IPI would not suffer irreparable harm and no new facts have arisen pertaining to this factor, the Court need not analyze that factor again herein. … The court finds that IPI has again failed to meet its burden of likelihood of success on the merits for its due process cause of action, nor has IPI established that the issuance of this second TRO is in the public’s best interest. Therefore, the Court finds that the balancing of equities again does not support the issuance of a TRO,” Judge Carter’s latest order stated.
Following the second emergency temporary restraining order filed by IPI in federal court, the casino commission rescheduled its deliberation on the revocation of IPI’s exclusive license for April 9, 10 a.m. at the CCC office.
