By Moneth G. Deposa
Variety News Staff

JG SABLAN Rock and Quarry Inc. on Friday filed a complaint against the Department of Public Lands for violating the Administrative Procedures Act when it terminated its permit without going through the legal process.
“This complaint, called a petition because of the nature of the relief sought, asks the court for judicial review,” Michael W. Dotts, the company’s lead counsel, told Variety.
On May 3, DPL terminated JG Sablan’s permit that allowed the mining of pozzolan on Pagan Island. Also challenged in the petition is the decision rendered on Aug. 1 by DPL affirming the order.
“The action of the defendant/respondent in stripping the mining permit violated the Administrative Procedures Act and petitioner seeks to have that action held unlawful and set aside pursuant to 1 CMC §9112(f)(2),” the complaint stated.
The complaint stated that the order was a “sanction” within the meaning of the law. The order did not involve the “granting or a renewal of a license” so the process is required under 1 CMC §9108 before that sanction can be imposed and applied.
It also stated that JG Sablan was entitled to a hearing before the sanction of terminating its permit is imposed.
“DPL’s decision to terminate the permit prior to a hearing violated JG Sablan’s rights of due process as outlined in the APA, including under 1 CMC §9111(b),” the document stated.
John Sablan, president of JG Sablan, said the action was taken on the advice of his lawyers who are confident that they have “good grounds” in filing the complaint.
Sablan and his lawyers also filed their answer to the separation of powers lawsuit filed by the CNMI government last month.
Through the Attorney General’s Office, the government asked the Superior Court to declare that Public Law 15-21, the law reinstating JG Sablan’s permit to mine pozzolan from Pagan Island, violates the CNMI Constitution.
“It is short and does not say much. Basically, the answer denies the allegations and gives notice of some affirmative defenses, such as the defense that the Attorney General’s Office has sued the wrong party,” Dotts said in an email, adding that filing the answer puts the case at issue and now, either side can proceed with motions.
Part of the complaint documents submitted to the court on Friday was a presentation of evidence at an appeal hearing on July 14, 2006 in the form of testimony, exhibits, and a brief that together set forth the history of the Pagan issue.
The complaint stated that Sablan, in showing his commitment to the mining project in the 1990s, purchased a helicopter and a vessel for $1.5 million, not including insurance and repair costs. These early efforts paid off and in 1992, it was awarded a one-year mining permit.
In 1993, the permit was renewed for five years. At the time, John Niemi, a specialist in construction materials, became involved with JG Sablan on the project. Niemi, with his partner Joe Murray, established a California company called Pagan Minerals Ltd., which acted as the marketing arm for the project. Pagan Minerals Ltd. was funded by JG Sablan and the total investment of JG Sablan in the project increased to $2 million and to $2.5 million by the end of 1993.
The 1995 permit
On Sept. 9, 1995, the government entered into a new permit with JG Sablan. This permit gave JG Sablan exclusive mining rights on Pagan for 20 years within JG Sablan’s permitted area. The extension was to allow JG Sablan more time to get outside investment capital, secure markets for pozzolan, and create a stable economy. Accordingly, all parties involved assumed that with this extension, JG Sablan would have the time needed to attract investors and complete the necessary tasks to form a successful market.
The Asian economic crisis affected JG Sablan’s business, resulting in delay in its payment.
JG Sablan entered into a joint venture with Bridgecreek International in December last year, when they paid $20,000 to update the payment of JG Sablan to the government.
In April 2006, DPL Secretary Del Rosario disputed the reach of the 1995 permit. JG Sablan was under the impression that its mining rights covered the entire island, while the DPL secretary insisted that the island had been split into three sections; “A,” “B,” and “C.”
He also informed JG Sablan that DPL was planning on taking JG Sablan to court with respect to parcels “B” and “C.” The disagreement with DPL and the land area covered by the permit remained unresolved, and because of JG Sablan’s depletion of funds, it wanted to avoid going to court. It therefore waived its rights to Parcels “B” and “C.”
Approximately a week later on May 3, 2006, DPL issued an order terminating JG Sablan’s permit to mine pozzolan on Pagan.