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ASG files new lawsuit against BoH

Accuses bank of violating local laws in ongoing Marisco battle
fili@samoanews.com

The federal court in Honolulu has threatened to sanction the American Samoa Government if it does not stay or delay its legal action against the Bank of Hawai’i in the High Court of American Samoa, according to ASG’s new court filings with the local court.

On Tuesday this week, ASG asked the High Court for a temporary stay in local court procedures in its first case against BoH while a separate legal action was filed against the bank, which is being accused of — among other things — embezzlement and theft of ASG property as well as violating territorial laws.

The two separate filings by ASG on Tuesday were served on the bank, whose Hawai’i attorneys informed the federal court in Honolulu to take judicial notice of the latest development in its legal battle with ASG, who has initiated a “new lawsuit” against the bank in the local court.

BoH was dragged into the legal battle between ASG and Marisco over the more than $800,000 that BoH garnished from an ASG bank account as per a writ of execution ordered by the federal court. The writ was based on the request of Marisco Ltd., who claims ASG owes them this money for unpaid services.

NEW LAWSUIT

In its new 15-page complaint, Assistant Attorney General Eleasalo V. Ale said ASG “is forced to commence” this separate lawsuit against the bank to preserve its rights as a territory to enforce its duly enacted laws.

For example, he said, American Samoa law prohibits the garnishment or attachment of ASG property without prior approval of the territory’s governor, and local law also prohibits expenditure of ASG funds without prior appropriation by the Fono.

According to ASG, the bank’s first violation of local laws was in June of this year when BoH withdrew close to $1 million out of ASG’s bank account without the governor’s approval, which was based on a writ of execution issued by the Honolulu federal court. (The money withdrawn — or frozen by the bank — was later reduced to $824,071).

The second violation, according to ASG, was when the bank on Oct. 23 this year deposited this money into the federal court registry.

(BoH requested —and the federal court granted — the motion to deposit this money into the court’s registry while this matter is pending with the federal Ninth Circuit Court of Appeals)

When ASG funds were first withdrawn or frozen by the bank, it prompted ASG’s first complaint, asking the High Court for an injunction to order the bank to restore this money and refrain from taking such action in the future. The local court granted a preliminary injunctive relief and instructed BoH to restore the funds.

Ale contends that ASG’s ability to enforce the injunction order by the local court and to proceed with the injunction to enforce its laws “has been severely hampered” by the federal court, who “has refused to grant full faith and credit to American Samoa laws as required by the United States Constitution and has encouraged BoH to violate those laws through its rules.”

He said the federal court “has even threatened to enjoin ASG, and its attorney general , for any attempt to enforce” the High Court’s injunction order.

He pointed out that during an Oct. 26 hearing on a BoH motion, the federal court “gave ASG two unacceptable choices to avoid injunction and sanctions: delay enforcement of the Injunction Order [in High Court] until the Ninth Circuit Court of Appeals rules on ASG’s appeal” or continue the Oct. 31 hearing with the High Court on ASG’s motion to enforce the injunction order.

Last week the federal court was informed that ASG has requested, and the High Court has delayed, the hearing from Oct. 31 to next month.

In its claims for relief, ASG also accused BoH of “breach of contract” by freezing the ASG money and then depositing such funds into the federal court registry without ASG permission.

ASG said these actions constitute a “breach of the covenant of good faith and fair dealing”; theft of ASG property; and embezzlement, or misappropriation of ASG’s money.

ASG went on to argue that the bank’s action demonstrates that BoH has no intention of honoring local laws.

“As a result, there is a real and continuing risk that millions of dollars of ASG’s money deposited in its General Funds Account with BoH will be garnished and appropriated by BoH in the future without approval by the governor or appropriated by the Fono, in violation of American Samoa law,” said Ale.

Therefore, ASG seeks an order “permanently enjoying” BOH in the future from similar actions such as garnishment, removing funds from ASG’s bank account or allowing another entity or person to take any such actions in violation of local laws, said Ale.

ASG also requests an order requiring BoH to first seek the local court’s approval before taking any such actions against ASG’s bank deposits or property in future cases. Additionally, ASG seeks a declaratory judgement against BoH for failing to abide with local laws.

Moreover, ASG  seeks monetary and punitive damages to be determine at trial and award any and all relief the court deem proper.

TEMPORARY STAY OF PROCEEDINGS

Ale also filed an “ex parte request for a temporary stay of proceedings” in the local court over ASG’s first complaint against the bank. He said a stay is needed as the federal court has threatened to sanction ASG, if it pursues an enforcement action against the bank in American Samoa.

Although this action is clearly separate and distinct from the federal case, “ASG is filing this request in an overabundance of caution” to comply with the federal court’s direction and avoid a violation of any future injunctions issued in the federal case, said Ale.



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