Carter reviewing CUC, EPA, CNMI settlement deal

U.S. District Court for the NMI designated judge David O. Carter is now reviewing a proposed settlement agreement that the U.S. Environmental Protection Agency, the Commonwealth Utilities Corp., and the CNMI government submitted to settle concerns that EPA raised in connection with CUC’s failure to comply with stipulated court orders and deadlines.

Carter told the parties late afternoon yesterday to return today, Friday, at 10am, because he wants to carefully read the proposed agreement.

EPA, CUC, and the CNMI government, through their respective lawyers, submitted their proposed settlement agreement at 3:20pm yesterday.

U.S. Department of Justice Environmental Enforcement Section senior attorney Bradley O’Brien told Carter that the agreement is good news to the court and to the citizens of the CNMI—that they’ve reached a settlement they believe resolves the receivership matter and allows funding for the stipulated order No. 2 projects, or SO2.

SO2 focuses on oil issues such as repairing and replacing infrastructure, managing tanks and pipelines, and spill prevention and response.

O’Brien asked the court to review the proposed agreement in camera due to some sensitive issues involved. In-camera submission means filed in private.

When Carter returned to the courtroom at 3:50pm after reading the proposed agreement, he lauded the parties for their “tremendous amount of effort.”

Carter then asked, among other things, as to who will be signing on behalf of CUC, EPA, and the CNMI government. He also pointed out some typographical errors.

O’Brien then handed the parties’ stipulation that he believes answers many of the judge’s questions. After reading the stipulation, Carter agreed that the stipulation answered a lot of his questions.

Carter later told the parties of his decision to first read the draft carefully and ordered the counsels to return to court today, Friday.

The parties first appeared before Carter yesterday before noon.

At that time, O’Brien informed the judge that they have been working hard in the past few days to complete the proposed settlement agreement.

O’Brien said 25 minutes ago, they had just incorporated final details of the proposed settlement agreement. He said they need few more hours to go over the details of the proposed agreement. Carter told the parties to return at 3pm yesterday.

Aside from O’Brien, present for the U.S. government in the courtroom were U.S. Environmental Protection Agency assistant regional counsel Janet Magnuson, and EPA’s environmental engineer and on-scene coordinator Michelle Rogow.

James Sirok was present as legal counsel for CUC. He was joined by CUC executive director Alan Fletcher, CUC petroleum and compliance manager Andrew Longworth, and CUC assistant petroleum compliance manager Venugopal Prabhakara.

Office of the Attorney General Civil Division chief Reena Patel appeared for the CNMI government.

EPA asked the court last Sept. 11 to appoint a receiver to implement some CUC projects after expressing disappointment with CUC’s alleged continued violation of court orders and deadlines and the CNMI government’s continued failure to fund CUC.

EPA also asked the court to find the utilities agency in breach of stipulated order and in contempt.

In EPA’s motion, O’Brien said the appointment of a receiver is especially important when serious health and environmental concerns are at stake.

The receiver EPA has been requesting is supposed to be in charge of implementing SO2 projects.

Carter inspected Saturday the stalled oil pipeline project and Power Plants 1 and 2 in Lower Base.

At a session after the inspection, Carter stated he is reluctant to appoint a receiver for CUC. He even complimented CUC for doing “a lot of improvements” at its facilities and operations.