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Federal judge: ASG attempting to undermine federal court authority in Marisco case

In granting Bank of Hawai’i’ injunctive relief motion, a Honolulu federal judge maintains that BoH and Marisco Limited are suffering irreparable harm because the American Samoa Government is attempting to undermine the authority of the federal court’s orders, upon which Marisco and BOH both relied.

Kobayashi’s comments were made in her latest order, issued Wednesday after a motion filed last month by BoH seeking injunctive relief enjoying ASG and its representatives from litigating proceedings that would challenge the federal court’s orders regarding the “interpleader funds” of more than $800,000 now deposited with the federal court’s clerk.

This entire case stems from the civil suit filed by Marisco over ASG’s unpaid invoices. The case ended up in federal arbitration, which ruled in favor of Marisco.

Marisco then sought and was granted a Writ of Execution, which garnished some $811,000 in ASG funds held at the local BoH branch.

While ASG appealed the garnishment order, or Writ of Execution, ASG also filed in the local High Court a separate case for BoH to return the money back to the ASG account. But fear of violating the federal court Writ, BoH sought and received federal court approval to deposit the Interpleader Funds in the federal court registry — and thereafter ASG file another appeal, focusing on the interpleader funds.

Two weeks ago, ASG filed a new but separate lawsuit accusing BoH of among other things, violating American Samoa laws by garnishing the money without prior approval of the governor and the Fono.

Samoa News has reported extensively on the details of BoH’s motion for injunctive relief as well as ASG’s opposition response in the federal court.


Irreparable Harm

Typically, monetary harm does not constitute irreparable harm, said Kobayashi in her 23-page order, adding that this is so  “because the injury can later be remedied by a damage award.”

Thus, insofar as it is likely that the High Court will require BoH to restore an amount equal to the Interpleader Funds to ASG’s account, that is a monetary harm which does not constitute irreparable harm for purposes of an injunction, she said.

BoH had argued that its monetary harm would be irreparable because, even if it were to obtain a judgment against ASG, it is doubtful that BoH would be able to collect, in light of ASG’s failure to pay a 2009 judgment in an unrelated case.

“BoH’s argument, however, is speculative, and “[s]peculative injury cannot be the basis for a finding of irreparable harm”,” said Kobayashi. “BoH’s likely monetary harm therefore does not constitute irreparable harm for purposes of an injunction.”

As to BoH’s claim that the Samoa News articles about this case, which are allegedly “highly critical” of the bank and are “injurious” to its goodwill and trust of its customers, Kobayashi says that BOH has not presented any evidence of an actual or imminent loss of good will or business reputation.

Kobayashi says the bank’s conclusory allegations of harm due to the newspaper articles does not support a finding of irreparable harm for purposes of an injunction.

“This court, however, notes that both BoH and Marisco acted in reliance on and in compliance with this court’s orders,” the judges said.

Further, ASG’s two legal proceedings in the High Court against the bank, “essentially challenge this court’s rulings outside the scope of the Ninth Circuit appeals that ASG has already filed.”

“The High Court cases threaten to undermine both the authorityof this Court as well as BoH’s and Marisco’s reliance on this court’s orders,” she said. “As this court has repeatedly noted, ASG voluntarily submitted itself to the jurisdiction of this...court in this action.”

“Marisco and BoH were entitled to rely on the validity of the orders entered in this action with the full participation of ASG,” she said.

If parties that do not prevail in a federal court action can simultaneously appeal the decision and, without the presence of the prevailing party, file actions in other jurisdictions to challenge the original decision, it would strip the original decision and the original proceedings of any authority or validity, she explained.

“In short, such actions attack and seek to undermine the fundamental reliability and credibility of court orders,” she said. “This court therefore FINDS that both Marisco and BoH are currently suffering irreparable harm to their justifiable reliance on the validity of the proceedings and court orders in this action.”

Likelihood of Success

As to the requirement that the party seeking an injunction establish a likelihood of success on the merits, Kobayashi said the issue is not whether ASG is likely to prevail on the issues of American Samoa law raised in the two cases with the High Court.

“This Court has already rejected the argument that American Samoa statutes govern the issue of whether Marisco properly garnished ASG’s funds pursuant to the Writ of Execution,” she explained.

In the instant motion, the issue is whether the Ninth Circuit [of appeals] will affirm this court’s orders in ASG’s pending appeals, she pointed out.

According to the judge, this court stands behind its rulings and analysis in the Disbursement Order and the Interpleader Order, and therefore this court FINDS that BoH and Marisco are likely to succeed on the merits of the Ninth Circuit appeals.

Balance of the Equities

She pointed out that Marisco and BoH are suffering irreparable harm because ASG is attempting to undermine the authority of this court’s orders, upon which Marisco and BoH justifiably relied.

Further, BoH will be forced to continue to spend its time and resources to defend against the additional proceedings ASG has, and may bring in the future, in the High Court.

“BoH and Marisco will continue to suffer these harms if this court denies the [instant] Motion,” she said. “In contrast, ASG will suffer minimal harm if this court grants the Motion and issues the injunction.”

“Even if this Court were to deny the instant Motion and the High Court were to require BoH to reinstate an amount equal to the Interpleader Funds to ASG’s account, that would not extinguish ASG’s obligation to pay the judgment in favor of Marisco. This Court therefore FINDS that the balance of the equities factor weighs in favor of issuing the injunction,” she said.

In Monday’s edition, is the judge’s views on other issues — such as public interest -—raised by both BoH and ASG, as well as her final ruling.