Senate: Proposed annual budget doesn’t include payments for judgments

The law does not mandate the governor’s proposed annual budget to include the payments of courts’ judgments owed by the government, according to Senate legal counsel Jose A. Bermudes.

Bermudes said it is also equally true that the Planning and Budget Act does not provide that the courts’ judgment payments be included in the government’s annual budget.

The Senate issued in negative in response to Superior Court’s question whether a CNMI annual budget is unconstitutionally unbalanced if it does not specifically name the judgments owed by the government.

Bermudes submitted on Friday in Superior Court the Senate’s briefs on the annual budget-related issues after Superior Court Associate Judge Joseph N. Camacho last December invited the CNMI Legislature, the Office of the Governor-Office of Management and Budget, and the Department of Finance to submit briefs or declarations over the government’s failure to pay a judgment of $35,000 that was entered in 2013 as a settlement of a wrongful death lawsuit.

Camacho expressed concern about the far reaching ramifications of the issues raised in the wrongful death lawsuit filed by couple Timothy Cruz and Jotonia B. Aguon, especially as the plaintiffs call into question issues related to the repeated non-payment of court-ordered judgments in the CNMI, as well as whether the 2016 budget is unconstitutionally unbalanced, which could result in a government shutdown of all non-essential government functions.

Cruz and Aguon are holding a judgment against the government in the amount of $35,000 as a settlement of their lawsuit that they filed in 2012 over the death of their child during delivery at the Commonwealth Health Center.

Cruz and Aguon, through counsel Michael Dotts, filed a motion for an order in aid of judgment that asked the court to direct the government to pay them the final judgment.

According to Dotts, the government has not ever made even a partial payment despite agreed to a settlement.

Dotts said with the Appropriation and Budget Act of 2016, the court has the power to aid Aguon and Cruz. He asserted, among other things, that the Act vests the governor with “reprogramming authority within the Executive Branch.”

The Office of the Attorney General opposed the motion. Assistant attorney general David Lochabay asserted that the motion is not supported by any authority and should be denied on that ground alone.

Lochabay also asserted that a CNMI Supreme Court previous ruling forbids courts from directly or indirectly ordering payment of judgments for which the Legislature has not appropriated funds.

Camacho heard the motion last Nov. 17. The judge then invited the Legislature, the Office of Management and Budget, and Finance to file an amicus curiae brief.

Amicus curiae (Friend of the court) refers to a brief filed in court by an entity who is not a party to the case.

On the unconstitutionally unbalanced budget issue, Bermudes said the governor’s proposed annual budget must contain, among many other things, a detailed estimate of anticipated financial resources to include revenues and Covenant funds, uncollected tax, previous year unobligated balances, grants, loans, and monies due the government.

In response to Camacho’s other questions, Bermudes said an order in aid of judgment would not be the proper legal mechanism with which to rule that the 2016 budget is unconstitutionally unbalanced.

Bermudes said there is other mechanism for the plaintiff to seek payment of their judgment against the government, in light of the repeated failure of the legislature to appropriate for court ordered judgments.

The Senate counsel said the court ordering a payment of a judgment out of the $8,000 highlighted in the 2016 budget, or in the alternative ordering the governor to reprogram funds for the payment of these judgments, is not distinguishable from the NMI Supreme Court’s ruling in the Marine Revitalization Corp. lawsuit against the Department of Lands and Natural Resources.

Bermudes said for the court to declare the 2016 budget unconstitutional and issues a stay order to allow the Legislature to pass a supplemental budget, would be in violation of Article 2 Section 1.

On the aid of judgment issue, Bermudes said to rule that the 2016 Budget Act is unconstitutionally unbalanced based on 7 CMC Section 4205, application for orders in aid of judgment, would be an improper mechanism.

Bermudes said nothing under Section 4205 even remotely suggests that it can be a mechanism to render a budget act unconstitutionally balanced.

“The provision is enacted specifically for the purpose of providing orders in aid of judgments, and not a mechanism to rule on the constitutionally of the government’s annual budget,” he said.

On any other mechanism issue, Bermudes said the 18th Legislature introduced an identical bill and was enacted into law as Public Law 18-38.

The 18th Legislature acknowledged that 17 judgments totaling over $27 million have not been paid.

Bermudes said based on the yearly decrease in revenues, the Legislature reasoned that to satisfy all the judgments pursuant to an appropriation item in a Fiscal year budget is not foreseeable.

As such, Bermudes said, the 18th Legislature sought a different mechanism to satisfy judgments by enacting Public Law 18-38, codified under Section 7207(b).

Bermudes said the plaintiff can use Section 7207(b) in negotiating the payment of the judgment.

In the alternative, he said the plaintiff can lobby the administration to include the judgment payment in the governor’s proposed budget for Fiscal Year 2017.

If this fails, Bermudes said, the lobbying should be done at the House of Representatives and the Senate.

He said the Legislature does have to follow the governor’s proposed budget spending.

He said the Legislature is only obligated that the total spending amount does not exceed the total revenue sources identified in the governor’s budget submission.

“It is up to the Legislature whether or not to include or exclude any appropriation for government judgments, subject to the governor’s veto power and ultimately the legislative power to override the veto,” Bermudes said.

With respect to the question whether it is distinguishable from Marine Revitalization Corp.’s case, Bermudes said if the $8,000 appropriated in the 2016 budget for judgment payment is available, the Superior Court can order the governor to pay the $8,000 to the plaintiff.

However, Bermudes said, in the event the $8,000 is no longer available, then the governor cannot follow the court’s order.

Similarly, he pointed out, the court cannot order the governor to reprogram funds appropriated to the Executive Branch for its operations and activities even with the governor’s 100 percent reprogramming authority.