The Supreme Court held that the Superior Court exceeded its constitutional and statutory authority when it awarded Marine Revitalization Corp. roughly six million dollars worth of assignable tax credits, other funds and income streams.
The Supreme Court upheld the portions of the Superior Court’s order that required the government to pay Marine Revitalization any money already appropriated for the payment of judgments, as well as the requirement that DLNR report to the court on a regular basis concerning its efforts to satisfy the judgment.
In 1995, the Legislature enacted the Marine Revitalization Corporation Submerged Lands Lease Act, commonly referred to as Public Law 9-46.
Public Law 9-46 authorized a contract between DLNR and Marine Revitalization for the construction of Outer Cove Marina.
The contract provided that Marine Revitalization would construct a marina for the government, and the government would then lease the marina to Marine Revitalization for a period of fifteen years, during which time Marine Revitalization would receive fees and profits from its operation.
Public Law 9-46 required that all commercial boats utilize the new marina and that the usage fees collected would belong to Marine Revitalization.
Public Law 9-46 provided for binding arbitration in the event of a dispute, and that the decision of the arbitrators would be enforceable in the commonwealth courts.
After the construction of the marina, Marine Revitalization claimed that DLNR breached the contract by failing to require commercial boats to use the Outer Cove marina.
The parties submitted the dispute to arbitration.
In December 2004, the arbitrators unanimously ruled in favor of Marine Revitalization, finding not only that DLNR failed to require commercial boats to use Outer Cove Marina, but that DLNR also engaged in active competition against Marine Revitalization by soliciting commercial boaters for its marina at Smiling Cove in direct contravention of Public Law 9-46.
The arbitration panel ultimately awarded Marine Revitalization more than five million dollars.
Following the issuance of the arbitration award, both Marine Revitalization and DLNR agreed with the arbitrator’s decision and stipulated to the entry of a judgment in the Superior Court.
The Superior Court entered judgment in the amount of $5,919,849.99 in favor of Marine Revitalization.
Since the issuance of the arbitration award and the entry of the stipulated judgment, the government has not paid a penny of the judgment.
Marine Revitalization went to the Superior Court on numerous occasions in an attempt to force the government to honor the judgment.
Eventually, the Superior Court issued assignable tax credits to Marine Revitalization, and at this point, DLNR appealed the decision on the grounds that the Superior Court exceeded its constitutional and statutory authority in its attempt to force the government to pay the stipulated judgment.
The Supreme Court concluded that a commonwealth court possesses the constitutional authority to adjudicate Marine Revitalization’s rights against the commonwealth government, find the government liable, and enter a binding judgment against the government that will only expire when it receives full payment.
The judiciary cannot, however, direct the appropriation of funds or interfere with the collection of taxes to satisfy that judgment because of the separation of powers doctrine.
The doctrine is enshrined in the Covenant and the CNMI Constitution, forms the cornerstone of the commonwealth’s government, and guards against governmental tyranny.
In this case, however, the doctrine prevents the judiciary from taking any further action to satisfy the judgment.
While the Supreme Court was tempted to vindicate its judicial authority by holding otherwise, it refrained from doing so out of respect for the rule of law.
The government’s inaction in satisfying the judgment is a grave injustice that unfortunately only the political process can remedy.
The high court, nevertheless, reiterated its belief that it trusts that the Legislature will fulfill its constitutional duties, and appropriate the funds necessary to satisfy Marine Revitalization’s judgment.
The Supreme Court’s full opinion is Marine Revitalization Corporation, et al. v. Department of Land and Natural Resources, 2010 MP 18, and can be found at http://www.justice.gov.mp/.
