The decision of Superior Court Associate Judge David A. Wiseman to declare as void ab initio (from the beginning) the power purchase agreement then-governor Benigno R. Fitial inked with Saipan Development LLC should preclude SDLLC\u2019s lawsuit in federal court, according to the Commonwealth Utilities Corp.
\nCUC counsel Deborah E. Fisher noted since CUC filed its motion to dismiss SDLLC\u2019s lawsuit in federal court, Wiseman issued a decision on Feb. 4, 2014, ruling that the agreement was facially invalid and the subsequent PPA at issue was void from the start.<\/p>\n
Fisher cited Wiseman\u2019s order in CUC\u2019s reply to SDLLC\u2019s opposition to CUC\u2019s motion to dismiss SDLLC\u2019s lawsuit in federal court.<\/p>\n
SDLLC, the Delaware-based contractor of the controversial $190.8-million PPA, filed a lawsuit in federal court against CUC over the voided agreement.<\/p>\n
The CNMI Senate, Rep. Janet U. Maratita (IR-Saipan), and Sen. Ray A. Yumul (IR-Saipan) sued Fitial, Attorney General Joey San Nicolas, CUC, and SDLLC in Superior Court over the PPA and sought a preliminary injunction to stop it.<\/p>\n
In CUC\u2019s reply to SDLLC\u2019s opposition to the motion to dismiss, Fisher cited precedent that states \u201cfederal courts have consistently accorded preclusive effect to issues decided by state court, thereby promoting comity between state and federal courts.\u201d<\/p>\n
Fisher said the U.S. District Court for the NMI should apply principles of issue preclusion and comity, and consider Wiseman\u2019s order preclusive.<\/p>\n
Citing the Rooker-Feldman doctrine, Fisher said that if \u201cclaims raised in a federal court action are \u2018inextricably intertwined\u2019 with the state court\u2019s decision such that the adjudication of the federal claims would undercut the state ruling or require the district court to interpret the application of state laws or procedural rules, then the federal complaint must be dismissed for lack of subject matter jurisdiction.\u201d<\/p>\n
Fisher said any ruling awarding damages on a void-from-the-start contract would violate not only the theories of issue preclusion and comity, but the Rooker-Feldman doctrine.<\/p>\n
The CUC counsel also stated that even if the federal court did not consider the Superior Court\u2019s decision, the contract was void from the beginning, and cannot be a basis to amend the complaint.<\/p>\n
Fisher also pointed out that SDLLC\u2019s claim that Fitial signed the PPA as part of a state of emergency pursuant to an executive order fails to address the fact that the EO provided no authority for the former governor to violate CUC\u2019s or the CNMI\u2019s procurement regulations.<\/p>\n
Fisher said the contract did violate procurement regulations, as Wiseman found.<\/p>\n
Even if it could be argued that Fitial could suspend procurement regulations by an executive order, he did not do so with the EO, Fisher said. She pointed out that the EO only allows for CUC to enter into renewable energy contracts and possibly take other actions without oversight from the Commonwealth Public Utilities Commission.<\/p>\n
\u201cIn no way, however, did the EO suspend the underlying procurement laws and regulations,\u201d she asserted.<\/p>\n
In addition, Fisher said, the EO indicates that Fitial assumed the powers of the board of directors and executive director of CUC.<\/p>\n
\u201cBut, neither the board nor the executive director has the power to ignore procurement regulations or CNMI laws\u2014and therefore neither did the governor,\u201d she added.<\/p>\n
In SDLLC\u2019s opposition to the motion to dismiss, SDLLC counsel William Fitzgerald said that Fitial\u2019s EO excuses CUC from complying with procurement regulations and that this means that the PPA was valid.<\/p>\n","protected":false},"excerpt":{"rendered":"
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