SDLLC elevates its case over voided PPA to appeals court

Saipan Development LLC is appealing to the U.S. Court of Appeals for the Ninth Circuit U.S. District Court for the NMI Chief Judge Ramona V. Manglona’s order that dismissed its lawsuit against the Commonwealth Utilities Corp. over the voided power purchase agreement.

SDLLC, through counsel William M. Fitzgerald, informed the federal court yesterday that it has elevated Manglona’s order last June 24 to the Ninth Circuit.

SDLLC is appealing to reverse Manglona’s order. Fitzgerald did not indicate SDLLC’s grounds for appeal in the notice.

In the June 24 order, Manglona abstained from hearing SDLLC’s lawsuit and granted CUC’s motion to dismiss the lawsuit with prejudice. Dismissal with prejudice means SDLLC cannot re-open the case.

SDLLC is the Delaware-based contractor of the controversial $190.8-million power purchase agreement that then-governor Benigno R. Fitial and then-attorney general Edward T. Buckingham inked on behalf of CUC.

Manglona said the fact that a lawsuit filed in Superior Court preceded this federal case for over a year; that the CNMI court had already resolved a crucial substantive issue; and that SDLLC received adequate protection through its full participation in the CNMI court action provides enough bases and clear justifications to abstain from hearing the case.

According to court records, SDLLC entered into a contract with CUC in 2012 to build a new power plant. Fitial and Buckingham signed the contract on behalf of CUC.

That same year, Rep. Janet Maratita (IR-Saipan) and several others brought a taxpayers lawsuit in local courts against SDLLC and CUC, seeking to declare the contract invalid.

In January 2013, Buckingham’s successor as AG informed SDLLC that the contract was legally invalid and void from the beginning.

Eleven months later, SDLLC filed a breach of contract lawsuit against CUC in federal court.

CUC, through counsel Deborah E. Fisher, sought to have SDLLC’s lawsuit dismissed, arguing that the decision of Superior Court Associate Judge David A. Wiseman to declare the PPA as void from the beginning should preclude SDLLC’s lawsuit in federal court.

In SDLLC’s opposition to CUC’s motion, Fitzgerald, asserted that Fitial’s executive order excuses CUC from complying with procurement regulations and that this means that the PPA was valid.