CUC skirts contempt citation on a technicality

The Commonwealth Utilities Corp. has eluded being held in contempt of court because of a technicality.

In an order issued yesterday, Superior Court judge David Wiseman said CUC’s actions concerning its pending lawsuit with the CNMI government are “highly suspect and dangerously close to the imposition” of sanctions for contempt of court.

But Wiseman said he has no basis for imposing the sanctions, as nothing in the order issued by the court last August prohibited CUC from continuing to litigate the case.

Wiseman recalled that last Aug. 11, CUC and the CNMI government signed a stipulation that both parties would negotiate in good faith until Dec. 1, 2004. The stipulation also allowed for the extension of a court order restraining CUC from disconnecting electric service to the government agencies over unpaid bills.

The judge quoted the stipulation as stating that: “In the period between the execution of this stipulation and Dec. 1, 2004, the parties further agree to negotiate in good faith and to take steps both mutually and independently to resolve all contested matters without further litigation.”

However, Wiseman noted, the order submitted by the parties to the court did not mirror the wording of the stipulation. In particular, the order omits the phrase “the parties agree…without further litigation.”

“As such, the court does not have the basis for holding CUC in contempt for violating a court order [when it filed a motion to dismiss the government’s lawsuit],” Wiseman said.

On Oct. 6, CUC asked the court to dismiss the Department of Finance’s lawsuit on the grounds that the negotiations have been fruitless.

On Oct. 14, the Attorney General’s Office asked the Superior Court to make CUC explain why it should not be held in contempt for filing the motion to dismiss.

The AGO maintained that CUC violated their agreement by filing the motion “unilaterally and without warning.” The government lawyers also denied CUC’s claim that the negotiations have not been fruitful and the parties are at an impasse.

In his order, Wiseman said CUC should be sanctioned for misleading the court.

“At the order-to-show-cause hearing, CUC represented that the parties had not met since July 2004 and negotiations were fruitless. Given the August 2004 stipulation between the parties, CUC’s representations are suspect and mitigate CUC’s credibility. At this point the court would be hard pressed to find that CUC has acted in good faith,” Wiseman said.

Nevertheless, he urged both parties to continue negotiations to resolve the matter “in a fair and appropriate manner that will benefit all parties involved, and more importantly, the public.”