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Fed judge: ASG is obligated to pay Marisco judgment

Federal court stops ASG from further litigation regarding Interpleader funds
fili@samoanews.com

U.S. District Court Judge Leslie E. Kobayashi last week issued an order enjoining the American Samoa Government, and any of its representatives, including ASG counsel and ASG officials in their official capacity, from litigating any current proceedings challenging the federal court’s orders regarding Interpleader Funds or their equivalent.

This includes two separate lawsuits filed by ASG against BoH pending in the High Court of American Samoa, wrote Kobayashi in her 23-page order, which also states that this order also enjoins ASG from bringing forth any future proceedings of the same subject matter.

Kobayashi’s order grants the injunctive relief motion filed by BoH and supported by Honolulu-based shipyard Marisco Ltd. The federal judge says the “injunction shall remain in effect until dissolved by this Court.”

(See last Friday’s edition on other details of the order as well as background information on this case, which stems from Marisco’s lawsuit in federal court against ASG for failure to pay outstanding invoices of more than $800,000)

The Interpleader Funds involved in Kobayashi’s order, were garnished per a Writ of Execution order of the federal court following a request by Marisco. The garnished money, which has since been deposited in the federal court registry, came from the ASG general fund account at the BoH Utulei branch.

PUBLIC INTEREST

ASG had argued that BoH’s requested injunction is not in the public interest because the people of American Samoa have a fundamental interest in seeing American Samoa laws enforced, and the people of Hawai’i have little or no interest in the issues in cases pending in the High Court.

Kobayashi said this court finds that the public  has the same interest in relying on the validity of court orders that BoH and Marisco have. She acknowledged that the judgment in this case and the amount garnished from ASG’s account represent a significant portion of ASG’s general funds and the use of ASG’s general funds impacts the people of American Samoa.

ASG, however, entered into a contract with Marisco, and both the federal arbitrator and this court have determined that ASG is obligated to pay Marisco the amount reflected in the judgment, said Kobayashi.

Further, ASG has not appealed the judgment; the pending appeals with the Ninth Circuit Court of Appeals only address the manner in which Marisco attempted to collect the judgment.

“Thus, while the public in American Samoa arguably have an interest in having the disputed funds returned to ASG’s BoH account, that interest is not significant for purposes of the injunction analysis,” she said. “This court therefore FINDS that the public interest factor weighs in favor of granting the injunction,” she said.

ABSTENTION

ASG had also argued that, even if the court is inclined to issue the requested injunction, the court  “should decline to do so pursuant to the ‘Younger abstention doctrine’.”

Kobayashi recalled that the Honolulu federal court has stated: Younger abstention “forbids federal courts from unduly interfering with pending state court proceedings that implicate important state interests” — based on a federal case.

Kobayashi said this Court does not take the interference with state court actions lightly, and this court acknowledges that issuing the requested injunction will have the practical effect of enjoining the proceedings in two cases in the High Court.

She says these two cases are ongoing and they do implicate American Samoa’s interest in the applicability of its laws.

“This court, however, finds that these factors do not favor abstention because, as previously noted, ASG submitted itself to the jurisdiction of this [federal] district court and has not appealed from the judgment in this case,” she said.

According to the judge, ASG filed the two cases in High Court after federal court orders were issued in the case, and this court ruled that “American Samoa law does not control as to whether Marisco properly garnished the funds in ASG’s BoH account.”

“...the actions that ASG filed in the High Court are reactionary and seek to undermine the authority of this court’s orders, [and] this Court finds that the proceedings in those cases are not entitled to deference under the Younger abstention doctrine,” she said. “This Court therefore CONCLUDES that Younger abstention is not warranted in the instant case.”

She also says that the court has determined that  Marisco is independently entitled to an injunction against ASG, albeit for many of the same reasons that BOH raised.



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