AG’s office has no standing to oppose Settlement Fund motion, says lawyer

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SETTLEMENT Fund attorney Nicole M. Torres-Ripple says the Office of the Attorney General does not have standing to oppose the Settlement Fund motion to enforce the settlement agreement in the lawsuit filed by the Public School System against Gov. Ralph DLG Torres and Secretary of Finance David DLG Atalig over the PSS budget.

“It is unclear why the Commonwealth has submitted an opposition in this matter,” Torres-Ripple said, referring to the Office of the AG.

“The Commonwealth is not a party to the CNMI Superior Court case filed by PSS, and the defendants in that case (the governor and secretary of Finance) have taken a legal position on the merits congruent with that of the Settlement Fund,” she added.

The lawyer asked the federal court to reject the Office of the AG’s “attack on this court’s jurisdiction to consider the Settlement Fund’s motion, as well as its position that the payments under the settlement agreement are not grounded in the CNMI constitution — a point that even PSS concedes.”

Torres-Ripple reiterated her previous request to enforce the settlement agreement in the PSS lawsuit.

According to Deputy Attorney General Lillian A. Tenorio, the motion by the Settlement Fund to enforce the settlement agreement in the PSS lawsuit has no basis.

Tenorio also opposed the Settlement Fund request that the District Court for the NMI step into the PSS lawsuit.

Tenorio said the issue of the PSS budget is presently being litigated in the CNMI Superior Court, and the payment obligations of the Commonwealth government to the Settlement Fund are not in dispute.

“The [federal] court should not inject itself in the dispute between the government and PSS,” she said.

In her response, Torres-Ripple said the CNMI government is behind on paying the 2017 Alternative Payment of a Greater Amount or APGA balance of $13.39 million.

“This is a significant delinquency, which the government is trying to pay down,” Torres-Ripple said. “Nevertheless, this is a continuing default under the Settlement Agreement, which indisputably establishes the [federal] court’s jurisdiction.”

She said the Settlement Fund is “not seeking to force the government to pay the entire consent judgment amount here, and there is nothing in paragraph 6 of the Settlement Agreement, when read together with the broad exclusive jurisdiction reserved in the settlement agreement and the final judgment, that limits this court’s jurisdiction to determine the issues raised in the Settlement Fund’s motion, namely, PSS’ challenges to the appropriations for the settlement agreement payments.”

In its lawsuit, PSS accused the CNMI government of 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.

Torres-Ripple said PSS also alleges that P.L. 21-8, the FY 2020 budget law, is unconstitutional; the appropriations in P.L. 21-8 are invalid; and PSS is entitled to 25% of the revenue appropriated for the settlement agreement payments immediately and retroactively.

Torres-Ripple said there is nothing speculative or hypothetical about the effect of PSS claims on the Settlement Fund and the obligations of the Commonwealth government under the settlement agreement.

The Settlement Fund wants 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) PSS’ actions in seeking payment from amounts appropriated to the Settlement Fund violates the settlement agreement.

Superior Court Associate Judge Joseph N. Camacho last month approved the motion of the Settlement Fund to intervene in the PSS lawsuit, but denied its motion for stay.

PSS counsel: There was no Settlement Agreement breach

In its opposition to the motion of the Settlement Fund,  PSS, through attorney Tiberius Mocanu stated that the Settlement Fund has not alleged any breach of the settlement agreement.

He said the basis of the Settlement Fund for its motion to enforce is “entirely fabricated and unsupported by fact.”

It is, he added, “the product of a misapprehension and conflation of the procedural posture of the Superior Court case, as well as the facts, arguments, and relief sought by PSS.”

He said the Settlement Fund or SF “essentially argues that should PSS succeed in the Superior Court case, the CNMI would risk default under the terms of the settlement agreement reached with the SF.”

However, Mocanu said, PSS does not seek to take a literal 25% of the earmarked funds due to the SF.

“Nor does it seek to limit, reduce, or stop any payment to the SF. Instead, PSS sought that the CNMI Superior Court finds the earmarks listed in its complaint unconstitutional inasmuch as they do not function to create special revenue and thus shield the same from the calculation of PSS’s constitutional entitlement to 25% of general revenue.”

Mocanu said PSS is not trying to take 25% of what is owed to the SF.

PSS “just wants the forty-three million dollars the SF was paid this year to be declared as paid from the ‘general revenues’ of the Commonwealth [government] and thus to be included in the calculation of the total amount available for appropriation of which PSS is entitled to 25%,” Mocanu said.

He added that the SF does not have an interest in the outcome of the Superior Court case. “PSS has not sought the relief that the SF claims it has. PSS has never had any intention of reducing or stopping any payment legally owed to the SF. To the contrary, PSS considers the SF the rock adjacent to its hard place.”

He said PSS “only asks that the revenue that the CNMI has decided to use to pay it be declared general revenue by the Superior Court and then considered in the calculation of what PSS is owed pursuant to its constitutional guarantee.”

Consequently, Mocanu added, “having no interest whatsoever in the Superior Court case and having alleged no breach of the settlement agreement before this court, the SF’s motion to enforce the settlement agreement should be denied.”

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