IPI names Palacios in lawsuit vs. CCC

Imperial Pacific International (CNMI) LLC has filed an amended complaint against the Commonwealth Casino Commission and has named Gov. Arnold I. Palacios as a defendant.

IPI, which is suing the CCC over allegations it is depriving the casino investor of its constitutional rights by requiring it to pay “excessive and unlawful fees,” filed yesterday an amended complaint with the U.S. District Court for the NMI.

In it, IPI names Palacios as one of the defendants. The other named defendants are CCC chair Edward C. Deleon Guerrero, CCC vice chair Rafael S. Demapan, CCC commissioners Mariano Taitano, Martin Mendiola, Ramon M. Dela Cruz, and CCC executive director Andrew Yeom.

IPI claims that, acting under the color of Commonwealth law, the defendants have caused it to suffer a substantial deprivation of its contract rights, in violation of the U.S. and Commonwealth constitutions.

“The regulatory fee statute imposed additional fees for doing business in the CNMI, which constitutes a substantial and unconstitutional impairment of the Casino License Agreement. IPI was and is still required to pay the $3-million annual regulatory fee as a prerequisite to exercising its existing contractual and property rights set forth explicitly in the CLA, rights for which it already has compensated [the] CNMI. In essence, defendants are double-charging IPI. The annual regulatory fees are substantial, and the impairment to the express and implied terms of the CLA is direct. The later imposed regulatory fees, Commission Order 2021-002, and the most recent demand for immediate payment by defendants effectively nullify the explicit terms of the CLA and impose completely unexpected and new liabilities and limitations on the operation of IPI. IPI has incurred and will continue to incur attorney’s fees and costs because of these proceedings, in amounts that cannot yet be ascertained,” IPI argues.

As relief, IPI wants the court to issue a declaration stating that IPI is exempt or excepted from, or not subject to, the terms of the regulatory fee.

IPI also wants the court to issue an injunction against the defendants preventing the enforcement of the regulatory fee statute and collection of the annual regulatory fee against IPI, or mandating that defendants to exempt or except IPI from the annual regulatory fee.

IPI also seeks a declaration stating that the regulatory fee statute, as applied to IPI, is unconstitutional, and for the court to order the defendants to pay restitution for all regulatory fees paid by IPI in the past;

The casino investor also asks the court to order the defendants to vacate, nullify any and all adverse administrative decisions against IPI that were based upon the annual regulatory fee statute, including the imposition of fees, interests and penalties for failure to pay the annual regulatory fees; as well as the suspension of its license based upon the annual regulatory fee statute.

Gov. Arnold I. Palacios