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Thursday, April 24, 2014

Bid to dismiss Saipan Air lawsuit vs Swift Air execs denied

The federal court ruled yesterday that it has personal jurisdiction over the $50-million racketeering lawsuit filed by Saipan Air Inc. against three executives of Swift Air LLC, denying a bid to have the lawsuit dismissed.

U.S. District Court for the NMI Chief Judge Ramona V. Manglona denied the motion to dismiss for lack of personal jurisdiction filed by Donald A. Stukes, Jeffrey Conry, and Boris Van Lier.

Manglona said the court has personal jurisdiction over each of the three defendants because they purposefully availed of the privilege of conducting activities in the CNMI and Saipan Air’s fraud claim arises out of those activities.

Furthermore, the judge said, because the court has jurisdiction over defendants on the fraud claim, it may exercise supplemental jurisdiction over them on Saipan Air’s related Racketeer Influenced and Corrupt Organization Act claims.

“The CNMI has an interest in affording its citizens a forum for redress of grievances. The Commonwealth’s economy is almost wholly dependent on tourism and foreign investment, which Saipan Air’s venture held out promise of promoting,” Manglona said.

Saipan Air is suing Stukes, Conry, Van Lier, Hank Robert, and 10 unnamed co-defendants for allegedly conspiring to fraudulently obtain money and other property from Saipan Air Inc. Saipan Air is suing the defendants for fraud, violations of the RICO Act, and unjust enrichment.

Saipan Air counsel Steven Pixley alleged that Saipan Air has been damaged in an amount in excess of $1.27 million.

Swift Air was not named in the lawsuit because of the bankruptcy petition it filed, preventing it from being sued.

Saipan Air is a corporation organized under CNMI laws. Swift Air LLC is a limited liability company organized in Arizona. Conry and Van Lier are residents of North Carolina, while Stukes is a resident of New York.

In denying the defendants’ motion to dismiss, Manglona determined that each of the defendants in this case committed intentional acts.

Manglona said that Conry and Van Lier, at various times over the course of seven months, contacted Saipan Air’s Adam Ferguson by telephone and e-mail. Van Lier even traveled to Saipan and made a presentation to Saipan Air here, she said.

Stukes also contacted Ferguson repeatedly, over the course of about three weeks, in connection with a bridge loan for Swift Air, she said.

“It makes no difference whether the defendants intended to defraud or otherwise harm Saipan Air. It is sufficient that each defendant intended to perform the physical acts themselves,” Manglona said.

Clearly, Manglona said, each of the defendants knew that the outcome of their various negotiations with Saipan Air would be felt in the CNMI.

“Therefore, their acts were expressly aimed,” she added.

Manglona said the CNMI’s interest in adjudicating this dispute is high. Saipan Air, she said, is a CNMI citizen, incorporated and headquartered in the Commonwealth.

Saipan Air entered into an agreement with Swift Air for the charter of two Boeing 757-200 aircraft and one Boeing 737-400 aircraft. The aircraft were to be delivered to Saipan Air by July 1, 2012, for transporting tourists from China and Japan to and from the CNMI.

On June 24, 2012, Saipan Air received a letter from Van Lier dated June 21, 2012, stating that “Swift hereby provides notice to Saipan Air that the agreement is hereby terminated and canceled without further notice or effect.”

On June 27, 2012, Swift Air filed for bankruptcy.

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