Southern Airways’ bid to dismiss Star Marianas Air’s complaint granted

The U.S. District Court for the NMI has granted Southern Airway Express LLC’s request for dismissal in the lawsuit filed by Star Marianas Air Inc. over an $8-million contract between Marianas Southern Airways and the administration of former governor Ralph DLG Torres.

Last week, District Court for the NMI Chief Judge Ramona granted Southern Airways Express’ motion for dismissal of Star Marianas Air’s suit for failure to join a necessary and indispensable party under Rule (19).

However, the court denied the motion for dismissal pursuant to arguments related to the Sherman Act and Parker Immunity.

During the hearing before Manglona, Michael Iasparro, pro hac vice attorney for defendant Southern Airways, argued in support of the motion to dismiss Counts I and II of the complaint pursuant to Parker Immunity and even submitted a source of authority for the Department of Finance along with the procurement regulation regarding expenditure authority.

For his part, Star Marianas Air’s attorney Mark Scoggins argued in response to Iasparro’s arguments regarding the Sherman Act.

After presenting their arguments before the court, judge Manglona denied Southern Airway Express’s motion to dismiss as to Parker Immunity.

After the hearing, Scoggins was ordered to file an amended complaint no later than Dec. 5, 2024.

Last June, Star Marianas filed a lawsuit against Southern Airways Express and Marianas Pacific Express LLC who were previously operating Marianas Southern Airways until the airline stopped operating last year.

In the lawsuit, there are two counts in filed against Southern Airways, one alleging an attempt to monopolize the airline industry market in the Northern Mariana Islands, in violation of Section 1 of the Sherman Act, and the other alleging that Southern Airways conspired with its co-defendants to unreasonably restrain trade in that market, in violation of Section 2 of the Sherman Act. 15 U.S.C. §§1-2.

Both claims were based upon a sole source contract entered into between the government of the Commonwealth of the Northern Mariana Islands and defendant Marianas Pacific Express LLC doing business as Marianas Southern Airways—a joint venture between defendant Southern Airways and defendant Keith Stewart—an interisland air passenger and cargo service in the Northern Mariana Islands.

Southern Airways, through attorney Sean E. Frink, now argues that dismissal is warranted because both claims against Southern Airways (and all counts and claims against all three private party defendants) pursuant to Rule 12(b)(6) of the Federal Rules of Civil Procedure, as Star Marianas has failed to state any claim upon which relief should be granted.

In addition, Frink argues that the lawsuit should be dismissed because Star Marianas failed to join the Commonwealth of the Northern Mariana Islands, a necessary and indispensable party under Federal Rule of Civil Procedure 19, in the complaint.

“Plaintiff has failed to state a cause of action against Southern Airways (or either of the other two defendants) under the Sherman Act because Parker Immunity prohibits any such claim. Moreover, because the CNMI is a necessary and indispensable party that plaintiff has failed to join, the complaint must be dismissed. As such, the complaint should be dismissed, with prejudice, pursuant to Rules 12(b)(6) and 12(b)(7) of the Federal Rules of Civil Procedure,” said Frink.