IPI Files Lawsuit Against CCC Over Suspected Breach of Contract

Imperial Pacific International (IPI) has filed a civil complaint against the Commonwealth Casino Commission (CCC) in federal court. The casino operator is alleging that the CCC violated the terms of their casino license agreement (CLA), leading to a breach of contract and unreasonable impairment of their rights.

IPI’s attorneys, Stephen Nutting and Michael Chen, are seeking a jury trial and are asking that the District Court for the Northern Mariana Islands (NMI) be exempt from regulatory fees. They are also challenging the constitutionality of the regulatory fee statute, arguing that it constitutes an unconstitutional impairment of the CLA.

In addition to these claims, IPI is seeking to have all regulatory fees previously paid to the CCC refunded. They are also asking for the cancellation and repayment of all administrative decisions related to these fees, including penalties and fees resulting from non-payment, as well as the suspension of their license.

The lawsuit alleges that the CCC deprived IPI of its rights under a contractual agreement by imposing additional fees for doing business in the CNMI. The company argues that these fees exceed the real costs of operating the casino and were introduced as a way to gain a financial advantage.

The history of the fees dates back to 2014, when the casino agreement was first signed, and IPI was required to pay an annual fee of $15 million. Subsequently, in December 2015, an additional regulatory fee of $3 million was introduced, which IPI has been paying until 2019.

IPI had initially been allowed to use a nonrefundable credit against taxes to pay the regulatory fees but this was later dismissed, leading to the company’s inability to pay the fees from October 2020 onwards. The CCC has requested a payment of $17.625 million to reinstate IPI’s license and allow them to resume operations in the CNMI, which has prompted the lawsuit.

Overall, IPI’s complaint revolves around the alleged violation of their contractual agreement with the CCC and the imposition of what they deem to be unreasonable and unconstitutional regulatory fees. The outcome of the lawsuit will have significant implications for IPI’s operations in the CNMI and could set a precedent for other casino operators in the region.