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Thursday, April 24, 2014

Wiseman denies SDLLC’s bid to dismiss PPA case

Rep. Janet U. Maratita (IR-Saipan) and other plaintiffs in the ongoing lawsuit on the $190.8-million power purchase agreement scored anew yesterday after Superior Court associate judge David A. Wiseman denied Saipan Development LLC’s request to dismiss the case.

SDLLC asked for the case’s dismissal on the grounds that the complaint’s request for declaratory and injunctive reliefs—counts 4 and 5—fails to state a cause of action upon which relief can be granted. SDLLC also argued that the court lacks jurisdiction on the matter as the case involves a political question.

SDLLC cited Baker v. Carr, where the U.S. Supreme Court outlines a test to determine whether an issue concerns a political matter. Although the Baker test contains six factors, SDLLC claims that any one factor may be enough for the court to determine whether the doctrine should apply, and that multiple factors weigh more heavily in its application. SDLLC claims that the PPA falls within at least the first three factors in Baker’s test.

Maratita argued, however, that the CNMI Constitution specifically grants taxpayers the right to maintain an action to stop the misspending of public funds. The plaintiffs argue that the court may interfere in this case because the PPA and related agreements are for a nonpublic purpose and the facts of the case allegedly show fraud and malfeasance.

According to Wiseman, although both plaintiffs and defendant are correct in their restatement of the holding that declaratory relief is only available in a taxpayer action under Article 10, Section 9 of the NMI Constitution, this also authorizes both declaratory and injunctive relief.

The declaratory and injunctive relief requested in this case, according to the plaintiffs, rest on allegations of illegal expenditure of public funds and breaches of trust and fiduciary duty. In this case, they added, the alleged misspending of public funds by a public official is not a non-justiciable political question.

Wiseman said that although the plaintiffs’ allegations did not explicitly cite Article 10 Section 9 as a legal basis for injunctive relief, the allegations did include facts that, assuming their truth and construed in a light most favorable to the non-moving party, constitute a cognizable legal theory for injunctive relief.

“Because plaintiffs have standing under Article 10 Section 9, and because this court finds plaintiffs’ claim for injunctive relief is sufficiently pled, the defendant’s motion to dismiss brought pursuant to NMI Rule of Civil Procedure 12(b)(6) is hereby denied,” states the order.

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