Poker machines owner, operator re-file suit vs govt

The owner and operator of poker machines re-filed on Monday their lawsuit against the CNMI government and Commonwealth Zoning Board chair Diego C. Blanco to stop them from enforcing a Saipan local law that shuts down poker parlors in residential villages.

Sin Ho Nam, Winnerslife Inc., and Dan Bi Choi LLC, through counsel Robert T. Torres, added Finance Secretary Larrisa Larson as a co-defendant in the lawsuit in Superior Court.

Nam, Winnerslife, and Dan Bi Choi LLC are suing for violation of due process.

They want the court to stop the government from enforcing Saipan Local Law 18-5, known as the Saipan Adult Machine Business Zoning Law of 2013, and a declaration that enforcing the law interferes with and will deprive them of protected interests.

They also asked the court to prohibit the enforcement of the Saipan Zoning Law against all of them and the imposition of any fines until they are heard and the case is closed.

In the event they are unable to operate their businesses, they want the court to declare them entitled to the unused portion of their license fees.

Nam is a Korean national who has had a business certificate in the CNMI since 2008. He changed the corporate name of his Sin Ho Development Inc. to Winnerslife Inc.

Dan Bin Choi LLC currently operates a number of poker machines owned by Nam and Winnerslife. Choi LLC was described as manager for Winnerslife.

The lawsuit was originally filed in Superior Court last year but the CNMI government and Blanco had the court action moved to the federal court.

Last December, the federal court denied their request for a preliminary injunction to stop the CNMI government and Blanco from enforcing the law.

U.S. District Court for the NMI Chief Judge Ramona V. Manglona also ruled that because the claims of plaintiffs are not ripe, their lawsuit is dismissed without prejudice, which means the plaintiffs can re-file the case.

Manglona said the claim that zoning laws deprive the plaintiffs of their constitutionally protected property is unripe.

Winnerslife owns 19 poker machines that are licensed to operate in the CNMI. For each license, Winnerslife pays the Commonwealth an annual licensing fee of $12,000.

In the re-filed lawsuit in the Superior Court, Torres said that, following the federal court’s dismissal of the lawsuit, the Zoning board presented plaintiffs with a form (developed on Nov. 20, 2017) to once again apply for an extension of time to relocate.

Torres said the Zoning board insisted that the form be completed in 48 hours, complete with documents, and presented for a hearing on Jan. 18, 2018.

Torres said the plaintiffs submitted their new form as required, attaching a binder of documents as evidence that they satisfied the form’s criteria.

Torres said that, at a hotly contested meeting attended by several legislators, a number of business owners as well as community members, the Zoning board denied every request of owners and operators of poker arcades for more time to relocate.

He said the Zoning administrator took the position that, if requests for extension were submitted after April 2017, the request for extension would not be granted.

Following protests from members of the Legislature, members of the community, and business owners impacted by the board’s decision, Torres said the board reversed itself to allow plaintiffs and others similarly situated to present more documents and an analysis showing that they were unable to recoup their investments within the time given by law.

Torres said the board failed to specify precisely what additional documentation it needed.

He said the board failed to specify what documents would be required to show the business was not a public nuisance, and failed to specify what factors it was considering in determining whether a business had “recouped its investments.”

Torres said the board further declined to specify the criteria and rationale it would use in requiring a business owner to “amortize” its investments.

Prior to the Feb. 21, 2018, hearing, Torres said, plaintiffs nevertheless submitted documentation to the board to establish that they were lawful entities.

Prior to the Feb. 21 hearing, Torres said, plaintiffs retained financial consultant Antonio S. Muna to review and analyze their business records and prepare a report explaining that as of Dec. 31, 2017, they had yet to recover the basis of their investments and detailing why more time was needed to do so.

Torres said that, although Muna attended the hearing, no board member bothered to raise a concern or ask for more information.

The board issued an agenda for the Feb. 21, 2018 meeting indicating it would take up 14 applications for extension of the deadline.

He said the board had prepared a proposed order before the meeting that was not on the agenda.

At the Feb. 21, 2018, meeting, Torres said, the board announced that it was going into executive session and asked all attendees to vacate the premises.

Torres said no announcement of any statutorily excepted reason was provided for the executive session.

Torres said ignoring documents provided to the board prior to its January hearing, including business licenses and business gross receipt tax records and other documents reflecting the nature and amount of plaintiffs’ investments, the Zoning board summarily denied plaintiffs’ application for an extension.

He said the board denied the application on grounds that it was not timely.

Torres said he objected to the proposed order, questioning whether the board had bothered to review Muńa’s analysis. He said the board responded that the application was untimely.

Following its summary denial of the application, Torres said, the board referred the matter to the attorney general to enjoin any continued operation of the poker operations and to collect civil fines of $1,000 per day for violations since Oct. 25, 2017 unless plaintiff certified that all gaming operations outside of the “permitted zone” ceased.

Torres said plaintiffs also submitted testimony pointing out their efforts to seek alternative locations for operating their business.

This testimony, he said, as well as the report of Muńa, explained why relocation was not feasible even if suitable properties could be located.

In addition, the lawyer said, Winnerslife pointed out that if their businesses were forced to shut down, they would lose unexpired machine license fees totaling $108,558 as well as income from continued operation through the term of Dan Bi Choi LLC’s business license.