‘Johnson settlement didn’t resolve CUC’s $4.4M liabilities to Fund’

The NMI Settlement Fund trustee insists that the 2013 settlement in the Betty Johnson class action did not extinguish the Commonwealth Utilities Corp.’s $4.4 million liability with the Retirement Fund.

Nicole M. Torres-Ripple, counsel for the NMI Settlement Fund, disclosed that CUC asked the Superior Court last May 8 to dismiss the Retirement Fund’s pending lawsuit against CUC.

Torres-Ripple said the CNMI government joined in the motion to dismiss, arguing for the first time that the settlement agreement in Johnson’s class action resolved CUC’s liabilities in the Superior Court lawsuit.

Because of this, the Settlement Fund filed a motion Saturday, asking the U.S. District Court for the NMI to issue an order enforcing the Johnson settlement agreement and finding that the claims asserted in the Superior Court case were not resolved by that settlement deal.

The then-NMI Retirement Fund sued CUC in 2011 for alleged failure to pay a total of $4.4 million in employer contributions, penalties, and economic damages. The federal court remanded the case to the Superior Court in August 2012.

In 2013, the U.S. District Court for the NMI gave final approval to the global settlement agreement in Johnson’s class action against the CNMI government and the NMI Retirement Fund.

With the final approval, all Retirement Fund assets were transferred to the Settlement Fund, administered by a court-appointed trustee.

In the Settlement Fund trustee’s motion to enforce final judgment, Torres-Ripple said that in August 2017, the Retirement Fund, CUC, CNMI, and the Settlement Fund agreed to substitute the Settlement Fund as the plaintiff in the Superior Court action.

Torres-Ripple said the substitution was based on the Retirement Fund’s assignment and transfer of all rights, title, and interest in and to the claims in this matter to the Settlement Fund pursuant to the Johnson’s settlement agreement.

The Superior Court approved the substitution on Aug. 16, 2017.

Torres-Ripple pointed out that, by the express terms of the Johnson settlement agreement, the District Court has exclusive jurisdiction over all matters arising under that settlement deal, including its interpretation.

Torres-Ripple said the plain language of the settlement agreement specifically excludes the assignment of rights to collect deficient employer contributions relating to the rights and liabilities in the Superior Court action from the CNMI.