ASG to Marisco: Hawaii court has no jurisdiction over ASG funds
The federal court in Honolulu has scheduled for today another settlement conference hearing in the civil action suit by Marisco Ltd., against the American Samoa Government, whose Hawai’i based attorneys have filed a brief on the court order to provide supplemental information regarding the garnishment of close to $1 million in ASG funds.
ASG argued that it is the court in American Samoa which has jurisdiction over the government account at the Bank of Hawai’i in the territory, and not the federal court in Honolulu.
Federal electronic court records show a settlement conference hearing was held two weeks ago before U.S. District Court Judge Barry M. Kurren and a “tentative settlement [was] reached”. No other information was available at the time until new information was released last Thursday which shows that another settlement conference hearing is set for this afternoon.
During a Senate Investigative Committee hearing last Tuesday, the Governor’s Chief Legal Counsel Toetasi Tuiteleleapaga told committee members both sides have agreed “in general to a settlement” and both parties are reviewing it but couldn’t provide additional information at this time.
Last Friday, ASG, through a law firm in Honolulu, filed its supplemental brief focusing on arguments on any controlling case law regarding garnishment of an out-of-district bank account for a bank that is headquartered within Hawai’i.
U.S. District Court Leslie E. Kobayashi had ordered both sides to file such briefings in response to ASG’s objections after the court issued a of Writ of Execution to garnish more than $800,000 from the ASG account at the Bank of Hawai’i in the territory.
Marisco sought the Writ after ASG failed to pay this amount, when both sides had agreed upon it after federal arbitration last December and it was approved this year by the federal court.
Kobayashi had ordered the parties to file supplemental briefings on the issue of the Court’s jurisdiction over ASG’s Bank of Hawaii account in American Samoa. (See Samoa News edition on July 18th for specific details on the court’s order)
The federal court in Hawai’i “does not have jurisdiction over the ASG’s funds,” according to the defense.
Citing a ruling in a federal court case in New York, the ASG defense team argued the court “held [that] an order of garnishment served on a bank in one district was not effective on a branch located in a different district.”
Additionally, the court reviewed several New York cases and found “a consistent line of authority holding that accounts in a foreign branch bank are not subject to attachment or execution by the process of a New York court served in New York on a main office, branch, or agency of the bank.” ASG also points out that the court relied on banking laws for the state of New York in making their decision.
ASG also argued that statutes of Hawaii indicate that Hawaii considers bank branches separate and distinct entities, and “the liability of a bank for action or nonaction with respect to an item handled by it for purposes of presentment, payment, or collection is governed by the law of the place where the bank is located…”
The defense argued, “Given the language of these statutes, in Hawaii, a branch bank is a separate entity from the main branch and other branches, and consequently, bank branches outside the district of the Court are not subject to the Court’s garnishment orders,” and noted that under Federal Rules of Civil Procedures 64, “the propriety of a garnishment of property to satisfy a judgment is governed by state law.”
“If Hawaii law applies, the Hawaii statutes... demonstrate that under Hawaii law, the American Samoa branch of the Bank of Hawaii is a separate entity” and the federal court in Hawai’i “does not have jurisdiction over the American Samoa branch,” the defense stated.
“If American Samoa law applies, the American Samoa branch of Bank of Hawaii is under the jurisdiction of American Samoa courts” and “only courts in American Samoa have jurisdiction over the funds in the American Samoa branch of the Bank of Hawaii. In this case, the situs of the debtor is American Samoa and jurisdiction lies in American Samoa,” it says.
Marisco has until Aug. 3 to file its opposition and response to ASG’s supplemental briefing.