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BoH wants ASG stopped from claiming disputed funds

Bank of Hawai’i is asking the federal court in Honolulu to prevent the American Samoa Government and its attorneys from seeking claims against the more than $800,000 that is to be deposited at the federal court registry.

BoH’s motion — which also accused Samoa News of publishing stories  that are “highly critical” of the bank in this case — was filed yesterday at federal court and comes days after an Oct. 5 order by US District Court Judge Leslie E. Kobayashi granting BoH interpleader motion to deposit the amount of $824,071.15 in the federal court’s non-interesting bearing account by Oct. 22.

In the new motion, BoH points out that a hearing is set for Oct. 31 in the High Court of American Samoa following a motion last month by ASG to enforce an earlier order of the High Court for the bank to restore to the ASG account at BoH, the $824,071 frozen by the bank per orders of the federal court in the federal case between Marisco Limited and ASG.

Unless enjoined, it appears that ASG will proceed with the Oct. 31 hearing and should ASG continue to litigate this matter before the High Court, a judgment, enforcement order or contempt citation might well be issued in favor of ASG as to the interpleaded funds, according to the BoH motion.

“This is a textbook case for an injunction against competing litigation over the interpleader funds,” said bank attorney Robert A. Marks in his motion.

“The High Court has already ordered BoH to put the interpleader funds back in ASG’s account,” Marks pointed out. “The effect of allowing ASG to proceed with its Expedited Motion to Enforce the foregoing order in the High Court is that BoH, by virtue of its longstanding banking relationship with ASG, will likely have double liability for the interpleader funds.”

“That is, BoH will pay funds to this Court pursuant to the October 5 Order , and may well also be compelled to restore funds in the same amount to ASG’s account pursuant to the High Court’s order. In effect, BoH will be made to pay Marisco’s judgment against ASG,” said Marks. “While BoH agreed to have a banking relationship with ASG, it certainly did not agree to pay ASG’s judgments.”

“This is precisely the sort of double recovery against a neutral stakeholder that historically has received interpleader protection, in cases and statutes,” said Marks, who then alleged that BOH’s “reputation has been under assault for the positions it has taken in this case and the parallel action in the High Court.”

He said a number of articles in the Samoa News, a daily newspaper in American Samoa, have been published about this federal court case and the High Court case.

“Typically, the articles are highly critical of BoH,” he said and pointed out for example, one story “which lambasts BOH’s ‘appalling’ action since the High Court proceedings began, and accuses BOH of ‘manifest[ing] its intent to ignore [American Samoa’s] law and order’.”

Marks included an exhibit — a copy of the story. However, Samoa News notes that Marks failed to tell the federal court the Samoa News story was based on ASG’s motion filed in the High Court and the quotes in the story came from the ASG motion.

Marks did include as another exhibit, a motion by ASG filed in High Court that again accuses BoH of violating territorial law.

“Accusing a bank, whose goodwill is premised on the trust of its customers, of unlawful conduct is clearly injurious. And ASG makes these ludicrous allegations with no sense of irony that BoH is a neutral stakeholder, and that the funds in question represent money lawfully owed by ASG for vessel repairs that ASG commissioned in Hawai’i,” said Marks in his motion.

Moreover, there is genuine doubt about whether a judgment in favor of BoH — even assuming for the sake of argument that BoH could secure a remedy in the High Court — would ever be paid.

Marks then points out that Gov. Togiola Tulafono recently vetoed an appropriation bill that would have allowed payment of two judgments from the High Court, including a 2009 judgment in favor of a child injured at school by an ASG vehicle.

“Payment of judgments must first be approved by the American Samoa legislature (the Fono), and then approved by the Governor,” said Marks. “Given that the governor vetoed an appropriation to pay a three year old judgment in favor of an injured Samoan child, BoH questions whether the Fono and the Governor would appropriate funds to pay a judgment in favor of BoH.”

(Samoa News should point out that Marks failed to state where he got this information about the governor vetoing the bill, which was covered widely by Samoa News and the bank does not have a news reporter based at the Fono building. Marks also failed to explain why the bills were vetoed.)

In his motion, Marks says that the federal court correctly noted that “[t]here is no indication that ASG, or anyone acting on its behalf, will institute other proceedings involving the interpleader funds,” there is no need for ASG to do so, given that it can litigate an inconsistent right to the interpleaded funds in the High Court proceedings it has already initiated.

“ASG has already obtained a preliminary injunction as to the interpleaded funds, and may well obtain an order to enforce that injunction later this month, when the High Court hears ASG’s motion on October 31, 2012,” said Marks, who said the federal court’s new order should be directed to ASG and its attorneys to enjoin continued litigation of the proceedings it has already initiated.

Marks also made it clear that BoH is not asking the federal court to restrain or enjoin the High Court, but rather, to enjoin a party before it in this case which is ASG, and its attorneys.


BoH asks that the court “issue an order restraining or enjoining ASG and its attorneys from continuing its forum-shopped litigation before the High Court,” said Marks. “Most immediately, such an order would restrain them from continuing with their Expedited Motion to Enforce, currently set for hearing on October 31.”

In conclusion, BOH asks that they  grant equitable relief in the form of a restraining order or injunction against ASG and its attorneys from continuing to litigate in the High Court over the disposition of the funds removed from ASG’s account and that will imminently be deposited in the federal court registry.

In addition or alternatively, BoH asks that the court alter, amend, or reconsider its October 5 order. Finally, BoH asks that the court grant it such further relief as it deems appropriate.