Imperial Pacific Int’l Claims Rights Violations in Fight to Keep Casino License

Posted on: December 12, 2023, 06:42h. 

Last updated on: December 12, 2023, 11:22h.

The long-running battle between Imperial Pacific International (IPI) and the Commonwealth of Northern Mariana Islands (CNMI) is taking a new twist. As the flailing casino operator clings to the hope of keeping its gaming exclusivity for the Imperial Palace casino in Saipan, it now claims that the Commonwealth Casino Commission (CCC) is violating its constitutional rights.

A view of one of the entrances to the Imperial Palace casino in Saipan
A view of one of the entrances to the Imperial Palace casino in Saipan. Imperial Pacific International has claimed that the CNMI is violating its constitutional rights in trying to remove its casino license. (Image: Marianas Variety)

IPI has taken an aggressive stance against the CCC after being given a 30-day ultimatum to settle its bill for $62 million in unpaid fees. The situation has escalated, with IPI now threatening legal action against the regulatory body.

Last week, the CCC issued a warning to IPI, demanding the outstanding payment within 30 days, or face the revocation of its gaming license. In its latest attempt to fight back, IPI has accused the CCC of multiple violations and breaches that allegedly undermine its core freedoms.

IPI Claims No Due Process

According to reports from Marianas Variety, IPI’s legal strategy is multifaceted. The embattled company claims that the CCC has violated the terms of the licensing agreement, and has allegedly infringed upon IPI’s fundamental rights protected by both the U.S. Constitution and the CNMI Constitution.

IPI argues that the CCC’s actions are tantamount to a violation of due process. This, it asserts, is a right guaranteed by the U.S. Constitution.

This legal showdown comes on the heels of IPI repeatedly trying to defend itself in various court proceedings against allegations of misconduct related to its gaming license. One even involved an appearance before the U.S. Court of Appeals for the Ninth Circuit.

IPI is seeking to nullify all outstanding license fees, citing the CCC’s alleged violations as the basis for this measure. The company is demanding a jury trial, urging the District Court for the Northern Mariana Islands to declare that it is exempt from, or not subject to, the regulatory fees outlined in the casino license agreement.

Additionally, IPI is seeking an injunction to halt the collection of any annual regulatory fees, arguing that these payments are unconstitutional. Moreover, the company is pushing for the CCC to reimburse all past regulatory fees paid.

The legal battle between IPI and the CCC adds a new layer of complexity to the already troubled relationship between the two entities. The casino operator has already appealed to the U.S. Supreme Court to take up its case, claiming constitutional rights violations in an attempt to fortify that request.

Legal Headaches Continue to Pile Up

Even if the U.S. Supreme Court were to rule in IPI’s favor, which is highly unlikely, there’s still the matter of the tens of millions of dollars the company owes from private litigation. A plethora of lawsuits still have outstanding balances, with IPI making no indication that it’s willing to pay them.

This has already led the CNMI courts to agree to the cannibalization of Imperial Palace’s assets. A new case is on the horizon, as a law firm that previously represented IPI is suing for nonpayment of bills.

Hughes Hubbard & Reed LLP (HHR) has filed a civil suit against the company, arguing breach of contract, unjust enrichment, and other claims. It wants more than $8.5 million, as well as any other compensation it might be able to justify.

The law firm was behind several high-profile legal fights for IPI as it faced off (and lost) against Pacific Rim Land Development, USA Fanter, Joshua Gray, CCC, and more. IPI initially agreed to give the firm $200K a month from December 2021 through November 2023, according to the lawsuit.

The figure was later bumped to $250K a month, in addition to a payment of $150K at the beginning of this year. HHR asserts that it has never received any payment.

If the lawsuit stands, based on the current data, it will mean that IPI owes greatly more than $80 million in unpaid regulatory fees and legal claims. The company hasn’t given any indication that it is willing to pay even a fraction of the mounting debt, which could give the CNMI some leverage to finally bring the battle to an end.