9th Circuit backs CCC

The façade of the Imperial Palace Resort. (MARC A. VENUS)

The U.S. Court of Appeals for the Ninth Circuit denied yesterday Imperial Pacific International (CNMI) LLC’s appeal of a U.S. District Court for the NMI decision to allow the public release of its income tax information.

In an order Monday, Ninth Circuit judges A. Wallace Tashima and Milan D. Smith Jr. denied IPI’s motion to prevent the Commonwealth Casino Commission from disclosing IPI’s unredacted financial statements.

Tashima and Smith ordered that the previously established briefing schedule remains in effect. The judges did not provide other details in their order.

As of press time yesterday, Saipan Tribune was still waiting for comments from IPI.

Tashima and Smith recently temporarily prohibited CCC from disclosing IPI’s confidential income tax information after IPI filed the emergency motion. That motion sought to suspend the U.S. District Court for the NMI’s preliminary injunction order that allowed the Commonwealth Casino Commission to disclose IPI’s confidential income tax information that is subject of a legal dispute.

The Ninth Circuit judges temporarily stayed the order of U.S. District Court for the NMI Chief Judge Ramona V. Manglona that denied the petition of IPI and its two subsidiaries for a preliminary injunction.

In a 25-page decision last Aug. 6, Manglona ruled that IPI and its subsidiaries—Grand Marianas (CNMI) LLC and Imperial Pacific Properties LLC—have not met their burden for a preliminary injunction.

Manglona, however, declined to address the motion to remand IPI’s lawsuit against CCC to the Superior Court that was filed by IPI and its subsidiaries, as the issues of abstention and supplemental jurisdiction raised in the motion will be further briefed and argued.

IPI and its subsidiaries have asked the federal court to prevent the disclosure of unredacted financial statements because, in their view, those statements contain confidential information protected from disclosure by provisions in the CNMI tax code and the Open Government Act, and by guarantees of privacy in the U.S. and Commonwealth constitutions.

In order to obtain such protection, IPI filed a petition for preliminary injunction prohibiting CCC from releasing the unredacted financial statements while this case is pending.

The dispute arises from the Open Government Act request filed with CCC by Rep. Edwin K. Propst (Ind-Saipan) on June 13, 2019.

Propst asked for information regarding 2017 and 2018 audit reports for IPI/Best Sunshine prepared by Ernst & Young; all business gross revenue tax payments made by IPI/Best Sunshine to date, with amounts and date; and all corporate income taxes paid by IPI/Best Sunshine.