US court asked to suspend labor provisions of federalization law

The Fitial administration has asked a court to stop the U.S. government from applying the labor provisions of the new Northern Marianas immigration act, saying the new law will cause immediate and lasting damage to the Commonwealth.

The U.S.-based law firm Jenner & Block and Howard Willens, special legal counsel to Gov. Benigno R. Fitial, filed the motion for preliminary injunction on behalf of the CNMI government in the U.S. District Court for the District of Columbia on Friday, Nov. 7, 2008.

In the motion, the CNMI government asks that the U.S. Department of Homeland Security and the U.S. Department of Labor be ordered to stop from taking over the Commonwealth’s labor system. The government reiterates arguments stated in the original lawsuit that the labor provisions of the law, which President Bush signed earlier this year, will violate the promises of self-government and economic development detailed in the Covenant.

A 45-page memorandum submitted in support of the motion argues that the Commonwealth has met all the requirements for a preliminary injunction to be issued—namely, the CNMI is likely to win the lawsuit it previously filed against the U.S. government; the CNMI will “suffer immediate and irreparable harm” if the injunction is not issued; an injunction will cause no harm to the U.S. government; and an injunction is in the public interest.

“Without preliminary injunctive relief, the Commonwealth will suffer devastating and irreparable effects to its economy and the well-being of its people,” says the memorandum. “The challenged provisions of the Act violate rights of autonomy, self-governance, and economic development that lie at the heart of a unique and judicially enforceable Covenant, pursuant to which the people of the Commonwealth affiliated with the United States.”

According to the memorandum, the U.S. Congress overstepped its authority to impose federal immigration laws on the Commonwealth when it enacted Public Law 110-229, which the memorandum described as “a wholesale federal assault upon and takeover of the Commonwealth’s fragile economy.”

The memorandum cites provisions appropriating the labor processing fees to the federal government, requiring all foreign workers to possess a federal immigration visa or special temporary federal work permit two years after the effective date of the law, and granting the DHS authority to decide which employers, in which industries, will be allowed to hire workers during the transition period. Most significantly, the memorandum takes issue with the elimination of temporary work permits after the transition period—in 2014 at the earliest—and the reduction of foreign workers to zero, unless they qualify for a federal immigration visa.

“Most of the foreign workers presently in the Commonwealth…do not qualify for a visa under any existing federal immigration classification. Thus, P.L. 110-229 mandates the removal of two-thirds of the Commonwealth’s existing private sector workforce, many of whom have lived in the islands for years and have U.S. citizen children,” the memorandum says.

“It does not take an economist to recognize that the elimination of two-thirds of the private sector workforce of a small island economy will devastate that economy and the people who are dependent on it,” the memorandum adds, before referring to a recent study commissioned by the Fitial administration using U.S. Department of the Interior funds on the impact of the new immigration law.

The study concludes that under a “federalized” immigration system, the Commonwealth stands to lose approximately 44 percent of its gross domestic product, 60 percent of its jobs, and 45 percent of its personal income by 2015.

Fitial, in a press conference yesterday, said he is now reviewing the economic report, which covers the impact not only of the new immigration law, but of recent federal policies on the Commonwealth. He said he has shared the report with members of the Legislature, Delegate-elect Gregorio Kilili Sablan, and members of the local business community, including the Saipan Chamber of Commerce and the Hotel Association of the Northern Mariana Islands.

Fitial said he will review the report with his Strategic Economic Development Council next week. He will also ask the private sector to pay for the cost of bringing the authors of the report, economists Malcolm D. McPhee and Richard S. Conway, to the CNMI to present the report’s finding to local leaders and the CNMI community.

“This is an important study by credible professionals regarding the Commonwealth’s economic decline, and I encourage everyone to review this study,” said Fitial. He added that his administration will work with the Interior Department, other federal agencies, and the U.S. Congress to seek financial assistance in dealing with the challenges outlined in the economic report.

Fitial also praised what he described as the objectivity of the study and the professionalism of economists who prepared the report.

The Cabinet official primarily responsible for seeking funding and facilitating data for the economic study yesterday sought to refute suggestions that the report was commissioned to back the governor’s much-criticized lawsuit against the U.S. government.

“I offered this to the Governor and SEDC in the spring of 2006. It was not meant to produce evidence for any litigation that did not exist at that time,” said Richard A. Pierce, the governor’s special assistant for economic affairs and trade relations.

According to Pierce, the purpose of study is “to provide a comprehensive and detailed analysis of the current CNMI economy, what changes in circumstances affecting the CNMI’s economic development have done in the past decade, evidence the current depression the CNMI is experiencing, and examine new federal laws implemented as they would affect the CNMI’s ability to produce jobs, revenue and a private sector tax base.”

The economists were also asked to offer recommendations and suggestions that could be considered by CNMI officials in working with the federal government to economically arrest the current depressive trends.

“If anything, it was meant to demonstrate by withdrawing any economic incentives the CNMI prospered from between 1984 and 2000, the exact opposite should be expected to occur. If some wage, labor and trade incentives built a booming economy on small Pacific island in a matter of years, like gravity, the elimination of those incentives for development has sent an economy in exactly the opposite direction by virtue of their disappearance,” Pierce said.

He added, “It doesn’t mean you can’t have an economy through some other means, it’s just the math I’d like everyone to appreciate.”