Judge rules against Zoning

Finding that the CNMI Zoning Board did not follow its own rules in rezoning poker businesses on Saipan, the Superior Court has stopped the board and the CNMI government from enforcing the Zoning board order denying the application of the owner of poker machines for an extension to operate in Fina Sisu and Kagman.

In a 116-page order Monday, Associate Judge Joseph N. Camacho granted a motion for preliminary injunction filed by Sin Ho Nam, Winnerslife Inc., and Dan Bi Choi LLC.

Nam, a Korean national who holds an E-2C investor status, is shareholder and director of Winnerslife Inc., which owns 19 poker machines. Dan Bi Choi LLC operates Winnerslife’s poker machines. For each license, Winnerslife pays the Commonwealth a licensing fee of $12,000 each year.

Winnerslife pointed out that, if its businesses were forced to shut down, it would lose unexpired machine license fees totaling $108,558 as well as income.

Nam, Winnerslife, and Dan Bi Choi sued former Zoning Board chair Diego C. Blanco, the Zoning board, the CNMI government, and former Finance secretary Larissa Larson to stop them from enforcing Saipan Local Law 18-5, known as the Saipan Adult Machine Business Zoning Law of 2013, that intends to force poker parlors to move out of residential areas and move to a designated area.

Nam, Winnerslife, and Dan Bi Choi, through counsel Robert T. Torres, asked the court to declare that enforcing Public Law 18-5 will deprive them of legally protected interests.

The plaintiffs also asked the court to stop the enforcement of the Saipan Zoning Law and the imposition of any fines until the end of an evidentiary hearing to address the issues raised in their complaint.

The motion hearing was held in October 2018.

Christopher Timmons, chief of the Office of the Attorney General Civil Division, served as counsel for the CNMI government, Blanco, the Zoning board, and Larson.

In a separate 61-page order Monday, Camacho denied their motion to dismiss the lawsuit. The judge ruled that Nam meets the requirements to seek judicial review of the Zoning board order.

In his preliminary injunction on Monday, Camacho stopped the Zoning board and the CNMI government from enforcing their threat to stop the plaintiffs’ continued operation of poker machines and imposition of fines.

The order also stops Zoning administrator Therese Ogumoro from referring the case to the attorney general or having the Zoning administrator or any other agents of the Zoning board from launching an investigation.

Camacho said that, despite the Saipan Zoning Law, Winnerslife and Dan Bi Choi Inc. are allowed to operate adult gambling machine businesses at their Kagman and Fina Sisu locations during the pendency of the case, so long as they comply with all other laws related to their operations at those locations.

Camacho ordered Winnerslife to inform the court if it finds an alternative location for its use of its 19 licensed poker machines.

Nam, Winnerslife and Dan Bi Choi are not required to pay a security bond.

Camacho said this preliminary injunction does not prohibit Blanco or the subsequent chairman, the Zoning Board, the government, Larson or subsequent Finance secretary, from pursuing their counterclaims.

Camacho said plaintiffs have a strong likelihood of success on the merits of their claims.

Camacho noted that Nam is threatened with irreparable harm to his immigration status while Winnerslife is threatened with irreparable harm to its business opportunities and its idled workforce.

The judge said the impact of an injunction on the public interest tips in favor of granting an injunction because of the potential permanent loss of license revenue and the interest in ensuring the Zoning board follows the law before taking property without compensation.

Lastly, Camacho said, a serious question of law at the heart of the merits of this matter—the extent of the protections provided by NMI Constitution Article 1 Section 5—compels the status quo to be preserved until that question can be addressed by the CNMI courts.

Camacho said that, from the evidence presented, the Zoning board order was the result of an ad hoc process hastily arranged by the Zoning board after making an exhaustion argument before the District Court, rather than the result of a thorough implementation of the Saipan Zoning Law.

He said no education or outreach to impacted adult gambling machine businesses occurred, and no map showing the compliant area was published.

The Zoning board, the judge said, did not decide what the “fatal” date for a Saipan Zoning Law pertaining to license to operate extension application, was until well after that date had passed.

Camacho said the Zoning board did not determine what “information may be required by the board” to support such extension request until well after that date had passed.

He said the Zoning board developed a Saipan Zoning Law pertaining to extension application form only after that date had passed.

The Zoning board, Camacho said, never determined the methodology for amortization that applicants should employ.

Camacho said the Zoning board believed the “fatal” date was truly fatal to plaintiffs’ attempt to receive an extension, and so there was nothing further to discuss before the District Court or before the Zoning board.

Camacho said either the District Court or the Superior Court could have then taken up the sole question of interpreting the language of the Saipan Zoning Law on extension application to determine what “fatal” date is sets for such extension request.

Instead, he said, the Zoning board engaged in consideration of other factors by taking in and considering plaintiffs’ completed extension application forms.

The Zoning board’s financial consultant, Antonio S. Muña, earlier reported that Winnerslife needed additional time to recoup its investments.

If the Zoning board was going to consider other factors, Camacho said, then it needed to consider both the information in Muna’s report and the information he would have presented at the Feb. 21, 2018 Zoning board meeting.

The judge said because the Zoning board had set no amortization methodology, amortization analysis by any methodology would have been informative to the Zoning board.

Camacho said the Zoning board is required to abide by its own laws.

Had Winnerslife, DBC, and Nam been properly educated and informed with the requirement for compliance, they may have been able to move their gambling machine businesses to a compliant area, Camacho said.

If not, they may have been able to properly apply for an extension utilizing a process set up in advance by the Zoning board, he added.