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Settlement Fund asks federal court to step into PSS lawsuit

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THE Settlement Fund has asked the District Court for the NMI  to issue an order stating that the Public School System is not entitled to the appropriations for the settlement agreement payments.

PSS has sued the CNMI government for not providing the school system the constitutionally required 25% of the general government revenues in fiscal year 2020.

But according to the CNMI government, PSS was allotted 25.3% of the total local revenue and resources available for appropriation in FY 2020.

For its part, the Settlement Fund, through attorney Nicole M. Torres-Ripple, has filed a motion requesting the federal court to issue an order declaring that: (1) PSS is not entitled to 25% of the Settlement Fund Revolving Fund and the amounts appropriated for the 25% benefit payments appropriated under 4 CMC § 1803 because these amounts are constitutionally and contractually obligated payments under Article III, Section 20(a) of the CNMI Constitution and the settlement agreement; and (2) the actions of PSS in seeking payment from amounts appropriated to the Settlement Fund violate the settlement agreement.

Torres-Ripple also requested a hearing to be scheduled for the motion.

The basis of the PSS lawsuit against the CNMI government is the CNMI Supreme Court slip opinion on Jan. 14, 2020, which states that some of the special revenues in the government budget are actually part of the general revenues, and that therefore, PSS is also entitled to 25% of those revenues.

But Torres-Ripple said PSS misconstrues the scope of the CNMI Supreme Court opinion, which, she added, “does not render any statutory appropriation laws unconstitutional, and therefore does not support invalidation of previous enacted legislation (P.L. 20-33 or 4 CMC § 1803).”

PSS was also a party to the settlement agreement, Torres-Ripple said.

As a party to the settlement agreement, she said PSS is bound by that agreement and cannot now seek to invalidate the funds appropriated for such purpose.

Torres-Ripple said the District Court for the NMI has exclusive jurisdiction to interpret, effectuate, and enforce the payment obligations of the CNMI government to the Settlement Fund pursuant to the settlement agreement, which necessarily includes challenges to the funding source for those payment obligations as raised in the PSS complaint in the local Superior Court.

“Should those appropriation and budget laws be invalidated, the government will risk default under the terms of the settlement agreement, an issue within the exclusive jurisdiction of [the federal] court,” the lawyer added.

Torres-Ripple said the Settlement Fund seeks to intervene in the Superior Court litigation between PSS and the CNMI government regarding Commonwealth general revenues.

She said the NMI Settlement Fund filed an ex parte emergency motion for temporary stay of proceedings and request for hearing, and an ex parte motion to shorten time for a hearing on the ex parte motion for a temporary stay in  Superior Court, which has scheduled a status conference for  June 23.

In 2009, retiree Betty Johnson sued the CNMI government for its failure to pay the amounts that it was required by law to pay to the Retirement Fund since 2005.

Johnson said the Fund would run out of money by June 2014 and would no longer be able to pay retirement benefits.

In Sept. 2013, the parties agreed to settle the lawsuit and the federal court approved a $779 million consent judgment in case the CNMI government does not meet its obligations to the Settlement Fund.

The Settlement Fund was created by the federal court as part of the settlement between the CNMI government and its retirees.

 

 

 

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