After an emergency meeting yesterday morning, Gov. Eloy S. Inos and the Legislature came up with a unified position vigorously opposing the over $30 million in proposed fees and costs filed by Betty Johnson’s attorneys. At the same time they called on retirees not to opt out of the tentatively approved NMI Retirement Fund settlement agreement.
The governor, in an interview with Saipan Tribune, maintains that the Fund settlement deal is still the best the government can enter into, but it is only the proposed attorneys’ fees that they are concerned about.
A $30-million lawyers’ fee is the estimated equivalent of a two-year deferred 25 percent retirees’ pension.
Inos acknowledged that the government will be the one to pay the plaintiffs’ attorneys’ fees and costs.
But those would still have to be approved by a judge, whom the governor hopes will consider the government’s position.
“We’ve taken a position that the amount of fees being requested by the plaintiff’s attorneys was just beyond reach, especially under the circumstance. We struck a settlement agreement because we couldn’t afford to pay a lot of these things and now we have to pick up another $30 million; it’s just unsustainable,” Inos said in an interview.
The governor said he would like to impart this message to those who are encouraging members to opt out of the settlement deal: Propose a better alternative.
“We just can’t walk away and say ‘opt out’ and then what? They better have something [to offer] because if they [members] opt out and this settlement goes through, what do they have for these people who opted out and who would not be part of the settlement?”
He said the decision to opt out rests with Fund members.
“While the decision would have to be exercised by each and every individual retiree, I think it is irresponsible for any person who would come out and say ‘you opt out’ and not offer alternative,” Inos said.
During Wednesday’s sessions and again yesterday, some lawmakers described Johnson’s lawyers as “sharks,” “bloodsuckers,” “vampires” and “ambulance chasers,” owing to what lawmakers believe are “exorbitant” and “ridiculous” attorneys’ billings when the CNMI and the Fund are hardly surviving financially.
The governor said that in yesterday’s closed-door meeting, some lawmakers remember the statements made by some of the plaintiff’s attorneys, that they are going to provide services pro bono, or free of charge.
Inos said he does not remember attorneys saying this, but just the same, the issue is the proposed fees are beyond the CNMI government’s reach.
“This is not just about arithmetic. It is about our ability to pay,” the governor added.
Hours after the governor met with lawmakers, House Speaker Joseph Deleon Guerrero (Ind-Saipan) and all other House members introduced a joint resolution requesting Inos “to object to the request for attorneys’ fees made by the attorneys for the plaintiff in the case of Betty Johnson vs. Inos.
House Joint Resolution 18-9 was introduced during the House’s afternoon session and didn’t meet the 24-hour public notice so the House could not adopt it.
The speaker, however, said the joint resolution will be acted on in the next session, tentatively set for Monday.
Deleon Guerrero said HJR 18-9 basically asks three things.
One, for the governor to “strongly oppose” Johnson’s requested attorneys’ fees.
Two, require plaintiff’s counsel to prove to the court their entitlement to attorneys’ fees.
Three, encourage the governor “to negotiate a reasonable amount of attorney’s fees and payment terms with plaintiff’s counsel.”
Senate President Ralph Torres (R-Saipan) said the Senate supports the settlement agreement, but not the proposed plaintiff attorney’s fees and costs.
Rep. John Paul Sablan (Cov-Saipan) said that, had officials known beforehand that lawyers’ fees would rack up to over $30 million, the settlement agreement may have been decided differently by parties involved, including the government who will be the one to pay for these costs.
Any court-approved plaintiff attorneys’ fees and costs will be paid by the CNMI government, and not the Fund.
Inos said the money that will be set aside for plaintiff’s attorneys’ costs and fees will be separate from the money that the government will appropriate for remittance to the Fund, and the account to pay back the 25 percent deferred pension at a time when the CNMI government’s budget for fiscal year 2014 is $123.4 million.
“The retirees are not the ones to pay but it’s just ironic that we will reduce their pension by as much as 25 percent because we just don’t have the resource and then yet on the next page, we’ll be agreeing to pay another $30 million outside of that. It just doesn’t make sense,” Inos said.
He understands plaintiff’s attorneys are entitled to certain fees, but not the amount proposed.
“So we will oppose that [proposed fee] vigorously. We are reviewing the individual [lawyers’] billings right now,” Inos added.
House floor leader Ralph Demapan (Cov-Saipan) and other lawmakers reiterated their reservation about the proposed attorneys’ fees but maintained their support for the settlement agreement.
Lawmakers, just like the governor, said the CNMI government and the Fund entered into a settlement to help prolong the Fun’s lifespan and to guarantee at least a 75 percent pension for retirees, but if a big chunk of money will only go to lawyers, then that would defeat the very reason for a settlement.
Sen. Pete Reyes (Ind-Saipan) and Senate vice president Victor Hocog (R-Rota) called on retirees during Wednesday’s session to opt out of the settlement agreement because of the exorbitant fees proposed by the plaintiff’s attorneys.
Yesterday, Reyes said he wants to clarify his statement.
“It is true that I’ve raised the idea to encourage retirees to circulate a petition to express their desire not to be part of the class action lawsuit as opposed to having active members withdrawing their contribution. However, legislation needs to be in place to provide protection for those who opt out of the settlement agreement. Toward that end, I am leaving the decision to each active member of the Retirement Fund to make their own choice whether to stay with the settlement agreement or opt out and withdraw their contribution,” he said.