Wiseman denies Fitial’s motion to dismiss himself from PPA lawsuit

Superior Court Associate Judge David A. Wiseman yesterday issued an order denying former governor Benigno R. Fitial’s motion to dismiss himself as a party to a lawsuit filed by Rep. Janet U. Maratita (IR-Saipan) and others over the controversial $190.8-million power purchase agreement. 
Wiseman ruled that Fitial is not entitled to qualified immunity in this case.

Qualified immunity is an affirmative defense available to government officials who incur liability for some wrong committed within the scope of their employment, and operates to shield them from being held personally liable as a result of their wrongdoing.

Wiseman said Fitial’s alleged conduct and reliance on the undocumented advice of then-attorney general Edward T. Buckingham was unreasonable where there exists clear and unambiguous provisions of the CNMI constitution which explicitly proscribe his alleged conduct.

“The alleged facts, taken together as a totality of the circumstances, suggest that Fitial knew or should have known that his conduct violated the laws and constitution of the CNMI,” said the judge in a 13-page order.

Maratita, the CNMI Senate, and Sen. Ray A. Yumul (IR-Saipan) sued Fitial, Buckingham (then replaced with Attorney General Joey San Nicolas), the Commonwealth Utilities Corp., and Saipan Development LLC over the PPA and sought a preliminary injunction to stop it.

Last Feb. 4, 2014, Wiseman issued a decision, ruling that the agreement was facially invalid and the subsequent PPA at issue was void from the beginning.

On Feb. 8, 2013, Fitial, through assistant attorney general David Lochabay, moved to dismiss himself, individually, as a party from the case. In the alternative, he moved to substitute the CNMI in his place.

Fitial claimed he is entitled to qualified immunity as to the three counts of plaintiffs’ complaint.

In Fitial’s alternative request to substitute the CNMI in his place, Lochaby cited Public Law 15-22 and the Government Liability Act as the grounds for substitution.

Included in Fitial’s motion to substitute was a certification of the Attorney General that Fitial was acting within the scope of his employment when he took the actions alleged in the complaint.

In plaintiffs’ opposition to Fitial’s motion to dismiss, attorney Ramon K. Quichocho asserted that “no rational governor could read the constitutional provisions at issue and believe that he was not restrained from committing the CUC and the CNMI to a no-bid, $190-million diesel power plant contract without the approval of the Northern Marianas Commonwealth Legislature, the CNMI Department of Finance, and CUC, without following procurement laws/regulations.”

Quichocho claimed that, “the Government Liability Act specifically exempts a constitutional taxpayers’ civil action from the exclusive remedy rule.”

In denying Fitial’s motion, Wiseman determined that even a cursory examination of the PPA would reveal that a plethora of appropriations of public money were to be made, both directly or indirectly, as part of the agreement.

Wiseman said as the PPA was illegal and thus void from the start, the court finds that the appropriations of money cannot be for a public purpose.

Fitial argued that the PPA consists of a “build-operate-transfer” project, where SDLLC is solely responsible for all construction costs and associated financing, and the sole obligation of the CNMI is to purchase the electricity generated from the power plant constructed pursuant to the contract.

However, Wiseman said, after a close examination of the terms of the PPA, the court recognizes the multitude of direct and indirect costs the CNMI government is subject to under the contract.

“Thus, these costs constitute a public debt as envisioned by the legislature in crafting the public debt authorization section of Article X,” Wiseman said.

Accordingly, he said, as the obligations of the CNMI pursuant to the terms of the PPA are deemed a “public debt” and it is undisputed that the PPA was executed without the authorization of the legislature, “the court finds that Fitial’s alleged conduct, when construed in light most favorable to the plaintiffs, constitutes a violation of NMI Const. Art. X, Section 3.”

Wiseman said construing the facts alleged in the complaint in a light most favorable to the plaintiffs, the court finds that Fitial’s alleged conduct in authorizing the PPA without complying with the requirements constitutes a violation of section 4 of Article X.

Wiseman said the court finds that the constitutional provisions proscribing Fitial’s alleged conduct are clearly established such that he should have known his actions violated the CNMI Constitution.

Wiseman said as Buckingham did not issue an AG opinion detailing the reasons that the PPA and underlying agreements were valid and legal as to form and capacity, but rather provided counsel to Fitial on a private basis during the preparation and execution of the contracts, Fitial cannot be said to have relief on his advice in good faith.

Wiseman said if Fitial was uncertain as to whether his emergency declaration provided him with the sole authority to enter into the PPA and appropriate public money without the authorization of the necessary parties, he may have reasonably relied upon the advice of retained private counsel in addition to the AG’s certifications.

However, he said, Fitial did not seek a written opinion from Buckingham or advice from private counsel to ensure his compliance with the laws and constitution of the CNMI.

Wiseman said despite the uncertainty and ambiguity he alleges as to controlling law, Fitial chose instead to rely on the bare certifications of Buckingham without any official written opinion detailing the legal issues presented by the PPA and Fitial’s purported authority to enter into the contract and the underlying agreements.