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IN CUC’S 2013 LAWSUIT VS CNMI GOVT OVER $1.2M DEBT
Govt, CUC enter confidential settlement
The CNMI government has entered a confidential settlement agreement with the Commonwealth Utilities Corp. to resolve CUC’s lawsuit against the government over the non-payment of its $1.2 million debt.
With the settlement, Superior Court Associate Judge Joseph N. Camacho dismissed CUC’s lawsuit yesterday with prejudice. That means CUC can no longer re-file the case.
The settlement resolves the lawsuit effective Jan. 1, 2017, according to assistant attorney general Charles Brasington, counsel for the government, and CUC counsel Michael A. White. The case was dropped.
Both parties held settlement discussions after Camacho issued an order last August, stating that the Office of the Attorney General does not understand the difference between the concepts of “creature of the state” and “arm of the state.”
Camacho discussed the two doctrines in his order denying the government’s motion for summary judgment and an order denying the Commonwealth’s motion for reconsideration in connection with CUC’s lawsuit.
CUC filed the lawsuit in December 2013, alleging that the government owed the utility company $1.24 million, together with pre-judgment interest. CUC alleged that the government breached its utility contract.
The government moved to dismiss the complaint. At the time, the government argued that CUC, a public utility corporation, lacked capacity to sue the state.
In his order on Sept. 3, 2014, Camacho denied the government’s motion, noting that the Commonwealth Code explicitly and unambiguously imposed liability on government utility consumers for breach of contract claims.
Camacho also noted that upon review of all state of emergency executive orders issued by the governor, none of the executive orders suspended CUC’s statutory ability to bill government utility consumers.
The government petitioned the NMI Supreme Court for a writ of mandamus seeking to overturn the court’s order.
The NMI Supreme Court denied the government’s petition.
The high court upheld Camacho’s ruling that CUC can sue the government.
