OPINION: Impairing the obligations of contracts is clearly unconstitutional



By Jose S. Dela Cruz


Impairing the obligation of contracts is clearly unconstitutional under both the U.S. Constitution and the NMI constitution. The recent proposal of the CNMI governor to suspend contractual obligations and foreclosures is quite shocking coming from the chief executive. Either he has no comprehension of the NMI constitution which he swore to uphold and defend when he took his oath of office as governor of the Northern Mariana Islands several years ago; or he is now blinded by the power of his office and thinks that he can dispense of certain provisions of our constitution as he sees fit.



Article I, section 1, of the NMI constitution, sets forth in very clear language, as follows:

Section 1: Laws Prohibited
No law shall be made that is a bill of attainder, an ex post facto law, a law impairing the obligation of contracts, or a law prohibiting the traditional art of healing. (Emphasis added)

Just as important, the U.S. Constitution, at article 1, section 10, clause 1, reads (in relevant part) as follows:

Clause 1. No State shall…pass any Bill of Attainder, ex post facto Law, or Law impairing the Obligation of Contracts… (Emphasis added)


Under both the NMI constitution and the U.S. Constitution, therefore, it is very clear that “no law” mean “no law.” In other words, neither the NMI governor nor the CNMI legislature has the power to enact law, promulgate regulations, or issue executive orders that clearly impairs the obligations of contracts. Only dictators, totalitarian governments and monarchies do so in the past (and recently by countries run by “strong-men”). But America is a democracy governed by a constitution that sets forth the specific powers entrusted to each branch of our government. When our leaders read more than what the constitution says, then chaos and uncertainty will reign and our democracy will start to weaken and wither.


The CNMI governor and legislature should think long and hard about passing a law that is clearly unconstitutional on its face and intrudes into the private affairs of businesses and private individuals. For example, if a car buyer becomes delinquent in making his/her monthly payment, the car dealer has the right under the terms of the vehicle purchase contract to repossess the car.


The legislation that the governor is proposing is to essentially allow the car buyer to keep the car and not make any payment, presumably until the Coronavirus pandemic is over. Are we now under martial law? I hope not, but in stressful situations such as the one we are going through, our political leaders get tempted to do things that are either not well thought out, are outright unlawful under the constitution or, worse, simply stupid or reveals the hidden incompetence of our political leaders, especially during times of crises.


A few years ago, there was a legislative proposal to exempt the Commonwealth Casino Commission from complying with or following the CNMI Open Government Act. That idea was for the Commonwealth Casino Commission and the exclusive casino licensee/operator, Imperial Pacific dba Best Sunshine, to have all of their meetings, papers and documents, and casino operations kept in secret so that the general public will not know what is going on with either the casino operator or the commission. Fortunately this sweetheart legislative measure was defeated and never became law. But the fact that it was even proposed was truly scary for the general public.


Yesterday, this truly strange legislative proposal—to allow the impairment of private contractual obligations--reared its ugly head. If this is the best idea that our political leaders have for dealing with the Coronavirus pandemic, I believe that the people of the commonwealth should be more afraid of our political leaders than with the Coronavirus itself.


At least, we know from public health experts, like Dr. Anthony Fauci, the director of the National Institute of Allergy and Infectious Diseases that in order to reduce the spread of this deadly pandemic, each of us must, at a minimum, stay at least six feet apart, wash our hands with soap and water religiously, and stay at home as much as possible.


Jose S. Dela Cruz is the former Chief Justice of the Supreme Court of the Commonwealth of the Mariana Islands, and a resident of As Gonno, Saipan.

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