ASG argues: paying $6MIL Laufou judgement now would be disastrous to economy
Sending off island more than $6 million to pay for a High Court judgement, while an appeal is pending “would be disastrous” to American Samoa Government’s programs that depend on these local revenues, according to the ASG motion asking the court to stay the enforcement of the trial court’s decision on the fire that destroyed the old Laufou Shopping Center in 2002.
ASG, represented by Assistant Attorney General Jay Sayles made the argument in a motion filed with the court, which has since taken the matter under advisement, but it's unclear as to when a decision will be issued.
The decade old case has already gone through one appeal and was remanded back to the lower court, which late last year reaffirmed the judgement. ASG filed a new motion this year while the plaintiff, Progressive Insurance, the insurer of the old Laufou, sought enforcement of the judgement.
In his stay judgement motion, Sayles pointed out that when the court is evaluating whether to stay a judgement pending appeal, it considers: the likelihood of appellant prevailing on appeal; balancing the equities between the parties; and whether the public interest would be affected by a stay.
“Consideration of these factors favors granting a stay on enforcing the judgement in this action,” he said and noted that among the legal arguments by ASG on appeal is the waiver of sovereign immunity, which has been outlined multiple times in ASG’s briefs, “but a favorable ruling on this issue would bar Progressive from collecting on the judgement...”
Sayles said that there has been “substantial recent development in the law of American Samoa regarding sovereign immunity” since the last time the case went to the Appellate division. He cited local court cases from 2009 to this year as examples of new case law.
“The Appellate will have a substantial amount of new case law to apply regarding the sovereign immunity defense provided to ASG,” he said.
BALANCE OF EQUITIES
The court’s review of whether the appellant or appellee would suffer irreparable harm if the stay is granted is often combined into a single analysis that involves a balancing of equities, which is when the court reviews the complexity of the collection process, the time it may take to collect on the judgement if it is affirmed on appeal, the availability of funds to pay the judgement and the ability to pay the judgement, said Sayles, and noted that in this case, the equities favors ASG.
“Progressive Insurance... will suffer no harm as post judgement interest continues to accrue during the appeal,” he argued. “If the judgement is preserved on appeal Progressive will receive the awarded amount including all accrued interest. Progressive cannot show how a stay of judgement will impact its business operations in American Samoa or the world.”
Unlike Progressive, the impact of the judgement on ASG “will be significant” because it represents about 8.8% of local ASG revenues over the past three budget years, said Sayles.
“As local revenue is the only funding available to pay the judgement, this would severely harm ASG’s finances while appellate review continues,” he said.
The court needs to determine if granting or denying the stay will adversely affect the public interest, said Sayles, who contends that the “public interest would be greatly harmed by enforcing the judgement” while the matter is on appeal.
He reminded the court that the judgement represents about 8.8% of ASG’s average local revenue for the last three budget years. “This is a substantial part of ASG’s local revenue. This revenue also funds... Medical Service Authority, Department of Education and Department of Public Safety,” he said.
“Sending this money off island to pay the judgement while the appeal is pending would be disastrous to ASG’s programs that depend on these local revenues to fund them,” stated Sayles. “This would harm public interest by removing funding from programs and services funded by local revenues.”
“Therefore the public interest would be harmed by enforcing this judgement while appeal is ongoing,” he said.
Gov. Togiola Tulafono last month submitted for legislative approval the $6 million plus post judgement on this case, however the bill was automatically defeated when the Fono took no action, as the 4th and final session of the 32nd Legislature officially ended Wednesday.
The proposal could be resurrected if the measure is presented later this month in a special session, should the governor call for one, and include this on the agenda. Otherwise, it will have to be taken up next January when the 33rd Legislature convenes.