Labor: Court order may impede ability to collect $416K in damages

The CNMI Department of Labor is worried that the federal court’s recent order to the owner of Tinian Dynasty Hotel and Casino to refrain from selling or transferring any of its property or assets, except in the normal course of business, could impede Labor’s ability to collect the remaining $416,241.37 in judgment for liquidated damages against Tinian Dynasty for non-payment of wages to its employees.

Labor Secretary Edith DeLeon Guerrero has requested the U.S. District Court for the NMI to allow Labor to intervene in the lawsuit of two plane crash survivors for the limited purpose of ensuring that it can enforce Labor’s interest, and that of the unpaid Tinian Dynasty employees.

Assistant attorney general Michael Witry, counsel for Labor, filed in federal court on Friday a notice of motion and motion for limited intervention.

Witry said Labor should be allowed to intervene for the limited purpose of modifying the court’s order to allow Hong Kong Entertainment (Overseas) Investment Ltd., owner of Tinian Dynasty, to pay liquidated damages to its employees.

Witry said Labor’s judgment required HKE to make payments to Tinian Dynasty’s employees $1,321,637.09 in back wages and $416,241.37 in liquidated damages, or for a total of $1,737,878.46.

Witry said HKE made timely payment of the first $619,734.18 in back wages, which was due on Feb. 23, 2016.

Witry said HKE paid the remaining $701,902.91 in back wages on March 15, 2016, but did not pay the liquidated damages.

Witry said the court’s order, which prevents HKE from making payments other than those in the ordinary course of business, stands in the way of Labor’s duty to ensure that the workers are paid for their work.

Witry said the federal court should permit Labor to intervene in this action to prevent protect its interest in enforcing the Commonwealth labor laws.

He said HKE simply cannot make a timely payment to the employees so long as the court is preventing them from doing so.

Witry said there is even a possibility that this action could result in HKE running out of funds, leaving it entirely unable to pay the penalty for forcing its employees to work unpaid.

“Because the order restricting HKE’s ability to spend money conflicts with Labor’s order requiring the payment of liquidated damages, Labor’s interest is directly impeded,” Witry said. In her declaration in support of Labor’s motion to intervene, DeLeon Guerrero said Labor’s judgment on Feb. 23, 2016, arose because HKE failed to pay its employees for several months, but forced them to continue working.

DeLeon Guerrero said HKE made its first payment of $619,734.18 for back wages on Feb. 23, 2016, and the second payment of $701,902.91 for back wages on March 15, 2016. pursuant to the judgment.

Deleon Guerrero said HKE did not make the payment of liquidated damages in the amount of $416,241.37 on the due date of March 15, 2016.

Plane crash survivors Dr. Jun Takimoto and Mr. Tomoyuki moved the court to enforce terms of their settlement agreement and the court’s order.

The survivors, through counsel Richard Pierce, claimed that HKE owes them at least $1.3 million for breaching their settlement agreements.

Takimoto and Nagata moved the court to issue an order prohibiting HKE from the sale or transfer of its personal property, except in the normal course of business, such as in sale of food items to customers.

Pierce said his clients believe that the better way to proceed is through a freeze on sale/transfer and then hearing as soon as possible on how best the judgment may be paid.

U.S. District Court for the NMI Chief Judge Ramona V. Manglona granted the survivors’ request last March 10. Takimoto and Nagata were among the seven passengers of a Piper Cherokee aircraft that crashed on a farm in Upper Dandan en route to Tinian on Aug. 11, 2006. HKE settled the lawsuits filed by the survivors, including one filed by Takimoto and his family and Nagata.