IMPERIAL Pacific International (IPI) has taken legal action against the Commonwealth Casino Commission (CCC) at the Northern Mariana Islands by filing a civil complaint in federal court. The lawsuit revolves around the alleged violation of the casino license agreement (CLA) by the Commission. According to IPI, this violation resulted in the unconstitutional impairment of the contract and the breach of various clauses.
The primary issue in contention is the regulatory fees imposed by the CCC. IPI’s attorneys on the case, Stephen Nutting and Michael Chen, are seeking a jury trial. One of their key demands is that the District Court for the NMI should not be subject to regulatory fees, as the terms were established prior to the annual regulatory fee statute. Additionally, they are calling for the declaration of the regulatory fee as unconstitutional.
Furthermore, IPI is seeking a refund of all regulatory fees that it has previously paid. They are also requesting the cancellation and repayment of all other administrative decisions related to the fees, including penalties and the suspension of their license, which occurred due to non-payment of the regulatory fees. The lawsuit alleges that IPI, as one of the parties to a contractual agreement, was deprived of its rights to operate in the CNMI casino in exchange for paying the fees.
The casino agreement in question was signed in 2014, and IPI paid the annual fee of $15 million between 2014 and 2019. However, in December 2015, an additional casino regulatory fee of $3 million was issued. IPI claims that the fees are unreasonable and exceed the actual costs of casino operation. The company argues that the fees were designed to gain a financial advantage by circumventing established terms of the CLA.
IPI was initially allowed to use a nonrefundable credit to offset the regulatory fees against taxes on earned revenue, but this option was quickly dismissed. As a result, the company was unable to pay the regulatory fee from October 2020. CCC subsequently requested a payment of $17.625 million in debt to reinstate IPI’s license and allow it to resume operations in the CNMI, leading to the filing of the lawsuit.