Appeals court reverses ruling in Ramsey’s lawsuit

The U.S. Court of Appeals reversed yesterday the federal court’s ruling in the wrongful termination lawsuit filed by former Commonwealth Health Center medical staff Dr. Gary Ramsey.

Judges of the U.S. Court of Appeals for the Ninth Circuit remanded the case back to the U.S. District Court for the NMI and directed it to grant the Commonwealth’s motion to dismiss, saying the CNMI retained its sovereign immunity with respect to claims arising under Commonwealth law.

“In short, we hold that the Commonwealth may not be sued without its consent on claims arising under its own laws,” according to the Ninth Circuit opinion penned by Judge Paul J. Watford and concurred by judges J. Clifford Walace and Jerome Farris.

The Ninth Circuit judges held that the 9th Circuit ruling in the Fleming v. Department of Public Safety has no effect on Ramsay’s case because the Fleming decision held only that the Commonwealth waived its sovereign immunity with respect to “suits in federal court arising under federal law.”

The judge said if Hawaii and Puerto Rio enjoyed sovereign immunity with respect to claims brought under their own laws, it is even clearer that the Commonwealth enjoys sovereign immunity with respect to claims arising under its own laws.

Ramsey, through counsel Stephen C. Woodruff, alleges in his lawsuit that the Commonwealth and the public corporation that runs CHC wrongfully denied him privileges at the hospital.

Ramsey named as defendants the CNMI government, the Commonwealth Healthcare Corp., CHCC chief executive officer Esther Muña, and several other present and former hospital officials.

On May 29, 2015, U.S. District Court for the NMI magistrate judge Heather L. Kennedy dismissed the CNMI government and CHC from the four claims in Ramsey’s lawsuit.

Kennedy dismissed with prejudice the CNMI government and CHCC from Ramsey’s four claims: declaratory and injunctive relief—unlawful deprivation of property without due process of law, two claims of damages—unlawful deprivation of property without due process of law, and a claim of damages—unlawful deprivation of liberty and property without due process of law. Dismissed with prejudice means Ramsey could not re-file the four claims in the future.

Kennedy also dismissed with prejudice Ramsey’s two other claims: violation of the U.S. Constitution and violation of the CNMI Constitution.

In her order, Kennedy denied the defendants’ motion to dismiss on sovereign immunity grounds, but granted the motion to dismiss with respect to the “persons” argument and the contracts clause claims.

Kennedy’s dismissal left the following causes of action: breach of contract, tortious interference with contract, breach of covenant of good faith and fair dealing, intentional infliction of emotional distress, and liability of the CNMI government.

The CNMI government and co-defendants, through then-solicitor division chief James M. Zarones, appealed to the Ninth Circuit.

Zarones appeared Kennedy’s order, which held that the defendants are not entitled to sovereign immunity.

In reversing Kennedy’s ruling, the Ninth Circuit judges said that in the Fleming case, they held that the Commonwealth does not enjoy sovereign immunity in federal court with respect to claims brought under federal law.

The judges said they reached that conclusion after examining the foundational document that created the Commonwealth, known as the Covenant to establish the CNMI in political union with the United States.

Although the Covenant does not explicitly address sovereign immunity, the judges concluded that a waiver of immunity could be inferred from one of its provisions, Section 501(a). The section states: “To the extent that they are not applicable of their own force, the following provisions of the Constitution of the United States will be applicable within the Northern Marianas as if the Northern Mariana Islands were one of the several States…”

The judges said Section 501(a) then lists roughly two dozen provisions of the U.S. Constitution, but absent from that list is the 11th Amendment, which recognizes states’ immunity from private suits in federal court.

The judges said they held that the omission of the 11th Amendment signaled an intention to waive the Commonwealth’s sovereign immunity in federal court with respect to claims arising under federal law.

The judges said they found confirmation of this implied waiver in the section-by-section analysis of the Covenant, an authoritative source of the Covenant’s legislative history prepared by the Marianas Political Status Commission.

The judges said the section-by-section analysis states that the Covenant provides the people of the NMI with the right to local self-government under a constitution of their own making, thereby ensuring that the “Northern Mariana Islands government will be an independent government, like that of the states.”

As a consequence, the judges pointed out, “the government of the Northern Mariana Islands will have sovereign immunity, so that it cannot be sued on the basis of its own laws without its consent.”

This reference to sovereign immunity, they said, limited to claims arising under the Commonwealth’s own laws, supplied “persuasive evidence” that the drafters of the Covenant intended to waive the Commonwealth’s sovereign immunity with respect to claims arising under federal law.