THE Commonwealth Casino Commission’s decision to suspend indefinitely Imperial Pacific International LLC’s exclusive casino license was not arbitrary, capricious, an abuse of discretion, and/or not in accordance with the law, Superior Court Associate Judge Wesley Bogdan said in a 32-page ruling issued on Tuesday.
Judge Bogdan affirmed the casino commission’s suspension of IPI’s exclusive casino license and monetary penalties.
Last year, IPI petitioned the local court to conduct a judicial review of the casino commission’s decision to suspend its casino license.
IPI wanted the court to set aside the casino commission’s issued Commonwealth Order No. 2021-002.
The commission, in its issued order on April 22, required IPI to pay penalties totaling $6.6 million. The commission also indefinitely suspended IPI’s gaming license, and ordered IPI to pay a total of $18.6 million due under the casino license agreement and applicable regulation. In addition, the commission directed IPI to comply with previous orders issued by the regulatory agency.
IPI wanted the court to determine whether the pandemic constitutes a natural disaster or force majeure.
IPI, in its petition for judicial review, stated that the commission’s order was “arbitrary, capricious, an abuse of discretion and not in accordance with the law, as the CCC did not consider, determine or reasonably base that order upon the appropriate application of principles of force majeure under Commonwealth law.”
IPI said the suspension of its license was unwarranted.
It added that the proceedings on which the CCC based the order were held without observance of procedure required by law, “as the CCC in making its findings improperly relied on material not in the evidentiary record, including without limitation the 2020 annual report of IPI’s indirect parent company.”
“Petitioner did not have an opportunity to challenge, examine or rebut the conclusions drawn from the CCC’s consideration of such evidence,” IPI added.
But Judge Bogdan noted in his ruling that during the April 22, 2021 casino commission hearing, the members of the commission lawfully voted unanimously to adopt Commission Order 2021-002 suspending IPI’s exclusive casino license for a minimum duration of six months and also requiring IPI to pay certain penalties and make various declarations regarding IPI’s operations within six months.
The vote was recorded and made upon clear and convincing evidence and the list of violations were well-itemized and accurately set out in Enforcement Actions 2020-001, 2020-002, 2020-003, 2020- 004 and 2020-005, the judge said.
For whatever reasons, the judge said, IPI did not actually contest or challenge (i.e., did not present any witnesses or submit evidence in support of its case before the casino commission) during either of the Feb. 25, 2021 or March 2, 2021 evidentiary hearings.
“Ultimately, the Casino Commission’s decision with respect to these violations is not connected to the force majeure defense Petitioner raised before the Casino Commission. Therefore, in short, the Casino Commission’s decision was not arbitrary, capricious, an abuse of discretion or, not in accordance with law. This conclusion finds support aside from nonpayment of the Community Benefit Fund and Annual License Fee payments, as there were equally critical determinations made on the record — which Petitioner did not contest — concerning Petitioner’s viability as an on-going business and the very real question of whether the unfinished gambling facility in Garapan will ever be completed,” Judge Bogdan said.
To be absolutely clear, he added, IPI initially offered the force majeure defense with respect to its nonpayment of the Community Benefit Fund requirements as set out in Enforcement Action 2020-001.
“It now suggests it also applies to the nonpayment of Casino License Fees,” the judge said. “Therefore, even assuming arguendo that the Casino Commission erred in its decision concerning the applicability and application of the force majeure defense, that would not mean that the Casino Commission’s suspension of the Exclusive Casino License for: (i) Petitioner’s nonpayment of the Casino Regulatory Fees; (ii) nonpayment of accounts payable; (iii) failure to make the required corporate and banking certifications; (iv) failure to maintain the required amount of cash in a CNMI (or, U.S.) banking institution; (v) failure to maintain the minimum capital requirements; or (vi) for its corporate executive’s failure to detail the means by which the company would comply with all these requirements — was in error.”
