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Judge to 11 defunct garment firms: Explain failure to prosecute tax suit
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Posted on Dec 31 2011
By Ferdie de la Torre
Reporter
Reporter
U.S. District Court for the NMI Chief Judge Ramona V. Manglona has ordered the owners of 11 defunct garment manufacturers that sued the U.S. government to recover millions of dollars of allegedly wrongfully assessed taxes to explain why the court should not dismiss their lawsuit for lack of prosecution.
In her show-cause order issued Thursday, Manglona gave the former garment manufacturers until Jan. 12, 2012 to respond.
The judge noted that the case has been pending for more than a year without any action taken by the parties in that period.
“If a proceeding has been pending for more than six months without any action taken by the parties during that period upon notice to the parties, the court may dismiss the proceeding for lack of prosecution,” Manglona said, citing the Local Rules of Civil Procedure.
The 11 former garment factories filed the lawsuit in July 2010, through counsels Gregory J. Koebel and Alexis Fallon. The factories are seeking to recover allegedly wrongfully assessed Social Security and Medicare taxes (collectively called FICA) that were erroneously paid between 2004 and 2007.
Koebel and Fallon alleged in the complaint that the factories erroneously withheld the taxes from the wages of their then employees and paid to the U.S. government. The lawyers asked the court to order the U.S. government to reimburse their clients of the employers’ share of FICA taxes.
The former garment factories are the American Pacific Textile Inc., Grace International Inc., Handsome Textiles (Saipan) Corp., Hansae (Saipan) Inc., Marianas Garment Manufacturing Inc., Michigan Inc., Neo Fasheon Inc., Sam Kwang Saipan Corp. Top Fashion Corp., Uno Moda Corp., and U.S. CNMI Development Corp.
Tinian Dynasty Hotel and Casino, as well as the former Concorde Garment Manufacturing Corp. and numerous Chinese nationals formerly employed by Concorde and its affiliated companies, also filed last year separate but similar lawsuits against the U.S. government.
