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Star Marianas sues CPA

STAR Marianas Air is suing the Commonwealth Ports Association and other unidentified individuals in the District Court for the NMI for breach of contract, violation of the Anti-Head-Tax Act, and charging unreasonable fees.

Timothy Bellas, Star Marianas attorney, is asking the federal court for a declaratory judgment in the alternative.

Star Marianas is a U.S-based air carrier operating commercial flights for transportation of passengers and cargo between Tinian, Rota, Saipan and Guam.

In the complaint filed on Tuesday, Bellas said Star Marianas does not know the true names and capacities of the other defendants, so they were sued as Does I through V. He said they will amend the complaint when their true names and capacities are ascertained.

Star Marianas alleges that it suffered damages in the form of excessive airport and terminal user fees which are greater than the reasonable fees that they should have been assessed or required to pay.

Star Marianas accuses CPA of not complying with the requirements of the airport-use agreement.

It is CPA that promulgates rules and regulations for use of the local airports and commuter terminals.

On April 24, 2009, Star Marianas signed a mandated airline-use agreement which CPA signed on April 27, 2009.

Star Marianas said it has made numerous payments of user fees to the CPA pursuant to the airline-use agreement.

In 2015, the lawsuit said CPA sought to assess Star Marianas $325,706 for use of the three island terminals.

Star Marianas alleged that CPA breached the airport-use agreement when it did not provide the air carrier with a copy of its proposed annual budget.

The air carrier stated that CPA never solicited or took into consideration any comments from them on proposed fees or the annual budget.

Star Marianas said CPA has never adjusted annually the fees charged to them in order to recover legitimate operational costs as mandated by CPA’s own rules and regulations.

The lawsuit alleged that Star Marianas has made several requests to CPA for production of audited cost-recovery records, but CPA has not complied.

Believing that it was being assessed fees which exceeded those specified in the agreement, Star Marianas paid the fees with the words “under protest” written conspicuously on the payment instruments.

Despite the payments under protest, said Bellas, CPA continues to breach the agreement by not providing deliverables mandated by the regulations.

Bellas said for these reasons, Star Marianas has failed to make payments for the last two years prior to the filing of the complaint.

Star Marianas estimates that based on its accounting records, the amount in fees which have either been paid or which the CPA claims assessed but unpaid by the air carrier are in the hundreds of thousands of dollars.

The exact amount will be proven at trial, Bellas said.

According to the lawsuit, CPA violated the Anti-Head-Tax Act, when it charged Star Marianas fees based not on the costs of operation of commuter terminals or services rendered, but solely on the number of the air carrier’s passenger passing through commuter terminals.

Such a methodology, Bellas said is a head tax and a violation of the Anti-Head-Tax Act

He said in 2011, the air carrier entered into a lease of space at the Rota Commuter Terminal with CPA for $302 per month, including the cost of utilities. At that time, Star Marianas was operating a cargo service only.

When Star Marianas expanded its operation to provide passenger service to Rota, CPA assessed and demanded that the carrier pay an additional user fee of $4.95 per passenger for that exact same office space — an amount based solely on the number of passenger emplaned, the lawsuit stated. It added that the user fee averaged an additional $3,200 per month, more than 10 times the amount specified in the space lease.

Bellas is asking the federal court to declare that the methodology which CPA used to compute the user fees of Star Marianas not only violates the express terms of the airport-use agreement, but the Anti-Head-Tax Act as well.

The rates charged to Star Marianas are unreasonable for the use of the amount of space provided, Bellas added.

Variety was unable to get a comment from CPA.

Source: Marianas Variety : http://www.mvariety.com/cnmi/cnmi-news/local/97378-star-marianas-sues-cpa

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