IPI asks court to set aside entry of default

Imperial Pacific International (CNMI) LLC has requested the U.S. District Court for the NMI to set aside its entry of default against IPI in connection with a lawsuit filed by seven former workers now based in China.

IPI, through counsel Michael W. Dotts, said although IPI has made strides in curing the deficiencies in discovery that led to entry of default, it has still been unable to find the funds to pay for sanctions.

Dotts said aggravating this situation is that the U.S. Department of Labor and the Commonwealth Casino Commission have stepped in because of IPI’s failure to make timely payroll.

Dotts said because these agencies have intervened, IPI is forced to find whatever funds in its possession to make payroll.

“If IPI cannot make payroll, it will lose its casino license and cease operations,” he said,

Dotts said if IPI loses its casino license and ceases operations, it will be unable to pay sanctions associated with this litigation short of selling assets.

The lawyer said IPI believes that the court has wide discretion in setting aside entry of default, and that deciding this motion should be liberally construed in favor of setting aside entry of default and deciding on its merits.

Last June 12, Chief Judge Ramona V. Manglona entered default against IPI for failure to comply with discovery orders and sanctions, and set a briefing schedule on damages and a hearing on damages and default judgment for July 24, 2020.

IPI then moved for an extension of 15 days to comply with the court’s order to produce all responsive materials from the approximately 53 boxes of paper documents, which was granted.

Then plaintiffs stipulated to amend the briefing schedule on damages and to reschedule the hearing to early August, which the court granted.

Dotts said since the eve of the entry of default to today, IPI has reviewed page-by-page and tendered over 10,000 documents to correct the events that led to default a month ago.

Dotts added that he has reviewed and produced thousands of bank statements and records.

In entering the default judgment against IPI during a show cause hearing last June 12, Manglona described IPI’s noncompliance and delays in this lawsuit as “mindboggling and “very frustrating.”

In their petition for damages, the seven former workers, through counsels Aaron Halegua and Bruce Berline, are seeking a total of $11.58 million in compensatory damages against IPI in connection with their lawsuit. They also request for a hearing for payment of attorneys’ fees and court costs.

The judge will hold hearings as to how much will be awarded to the plaintiffs (former workers).

The default judgment would determine the amount of damages.

The plaintiffs—Tianming Wang, Dong Han, Yongjun Meng, Liangcai Sun, Youli Wang, Quingchun Xu, and Xiyang Du—are suing IPI, IPI former contractor, MCC International Saipan Ltd. Co., and MCC’s subcontractor Gold Mantis Construction Decoration (CNMI) LLC over the alleged injuries they suffered during accidents at the worksite of IPI’s resort/casino project in Garapan.

The plaintiffs are suing defendants for alleged forced labor in violation of the Trafficking Victims Protection Re-authorization Act, forced labor in violation of the CNMI Anti-Trafficking Act, negligence, and liability for employees of subcontractor.

IPI, MCC and Gold Mantis have denied the plaintiffs’ allegations.