DISTRICT Court for the NMI Designated Judge Frances M. Tydingco-Gatewood has denied the Settlement Fund’s request to enforce the final judgment approving the Betty Johnson class action settlement agreement against the CNMI Public School System.
The Settlement Fund has requested 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 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.
In its lawsuit against the CNMI government in the Superior Court, PSS alleged violations of the CNMI Constitution based on eight statutory appropriations identified as expenditures in the fiscal year 2020 budget set forth in Public Law 21-8, including the appropriations for payments under the Settlement Agreement: (1) the appropriation for the Settlement Fund Revolving Account created under Section 2 of P.L. 20-33 (codified as 1 CMC § 25301) to pay the minimum annual payment or MAP and (2) the appropriation under 4 CMC § 1803 to pay the 25% benefit payments.
PSS in its lawsuit stated that P.L 21-8 is unconstitutional, the appropriations in P.L. 21-8 are invalid, and that it is entitled to 25% of the revenue appropriated for the Settlement Fund payments immediately and retroactively.
In her order, the judge said the Settlement Fund is arguing that that the PSS suit before the CNMI Superior Court seeks to invalidate the public laws establishing the source of funding for payments to the Settlement Fund, thus impairing or diminishing the payments required under the Settlement Agreement.
According to the Commonwealth government and PSS, however, the Superior Court action will not affect the CNMI’s obligation to make annual payments to the Settlement Fund as required by the Settlement Agreement.
PSS asserts that it has not “tried to disturb, reduce, stop, or curtail payments” to the Settlement Fund. PSS also argues that “even if the laws at issue were invalidated, the Commonwealth’s obligation to pay the minimum annual payments each year remains unaffected.”
The judge said she agrees with the Commonwealth and PSS.
She said the issues presented in the PSS lawsuit are matters of state law and public policy, which do not affect the amounts owed to the Settlement Fund.
Accordingly, she said, the court finds no basis to grant the relief requested by the Settlement Fund.
In her order, Tydingco-Gatewood stated: PSS’s suit in the Superior Court does not concern the enforcement of the Settlement Agreement.
She also noted that the “Commonwealth continues to pay the MAP,” and no breach of the Settlement Agreement.
The Settlement Agreement, she added, “simply required the Commonwealth to make the agreed upon minimum payments, which the Commonwealth has done and continues to do.”
Moreover, based on the record before the court, “it appears to the court that PSS does not seek to terminate the Commonwealth’s payments to the Settlement Fund or to take 25% of any funds earmarked for the Settlement Fund.”
In November 2020, the Board of Education directed PSS to voluntary dismiss its lawsuit against the CNMI government in Superior Court.
Associate Judge Joseph N. Camacho granted the dismissal without prejudice, which means that PSS can still file the same lawsuit in the future.
The lawyers of the Settlement Fund, Joyce Tang and Nicole Torres-Ripple, did not sign the motion for voluntary dismissal.
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 September 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 retirees.