Law Offices of

Timothy H. Bellas, LLC

A LIMITED LIABILITY COMPANY

_________________________________________________________________________________________________________

Cactus & Botones St., Garapan Telephone No. (670) 323-2115

P.O. Box 502845 Facsimile No. (670) 323-2116

Saipan, MP 96950 Email: tim@bellaslaw.net

February 1, 2012

Ms. Lauralyn J. Remo

Chief, Air Carrier Fitness Division

Office of Aviation Analysis

Department of Transportation

Washington D.C. 20590

Re: Response to Your Letter of January 3. 2012, Docket DOT-OST-2010-0235, Star 

Marianas Air, Inc. Application.

Dear Ms. Remo:

In response to your first letter of September 16th, 2011 ("September letter") and in an effort to 

resolve this matter as expeditiously as possible, Star Marianas, Air, Inc. ("SMA") adopted a very 

conciliatory posture. Thus, in deference to your comments that without a written agreement in 

place, undue influence could be inferred over SMA. Therefore, at some expense to SMA, an Air 

Charter Agreement ("ACA") was drafted between it and the Tinian Dynasty Hotel and Casino 

("TDHC"). The ACA was supplied to you once it was executed by the representatives of both 

parties. In response to that document we have received your latest letter, dated January 3, 2012 

("January letter").

This process began when SMA filed its application for commuter authority and in compliance 

with 49 U.S.C. § 40102(a)(15) stated that the ownership and control of SMA was vested in U.S. 

citizens or entities. 

More specifically, SMA has affirmatively represented that: (1) it is a corporation organized 

under the laws of the Commonwealth of the Northern Mariana Islands; (2) that the president and 

all of the members of the board of directors are citizens of the United States and that (3) 100% of 

the SMA’s stock is owned and controlled by United States citizens.

The above referenced subsection of § 40102 defines a citizen of the United States as "(1) an 

individual who is a citizen of the United States; (2) a partnership each of whose partners is an 

individual who is a citizen of the United States; or (3) a corporation or association organized 

under the laws of the United States or a state, the District of Columbia, or a territory or 

possession of the United States, of which the president and at least two-thirds of the board of 

directors and other managing officers are citizens of the United States, which is under the actual 

control of citizens of the United States, and in which at least 75 percent of the voting interest is 

owned and controlled by persons that are citizens of the United States.”
DOT Response Letter-Ms. Remo

February 1, 2012

Page 2

Furthermore, SMA declared that it has no debt or other obligation, owed to a foreign person or 

entity. There are no other owners, officers, directors, or other persons who have the power to 

influence SMA, whether through ownership, debt, position held, or any other interest, that are 

foreign.

Therefore, the affirmative representations of SMA in its application and subsequent submissions to 

DOT meet and exceed the requirements of the statutory definition.

Your initial response was to challenge the relationship between SMA and TDHC. Apparently, 

the basis of such challenge being that former employees of another entity owned by TDHC may 

have been employed by SMA or that TDHC's business relationship, as major customer of SMA, 

results in some influence or control over SMA, unless there is written ACA.

It is within this historical context that we have received your January letter which purports to 

criticize the ACA and to render opinions on legal issues encompassed by the ACA. It is unclear 

whether your criticisms of the ACA are based on your personal considered opinion of the 

contract law applicable to the CNMI or whether you have obtained an opinion from an outside 

source to support your comments. In either event, I address each issue raised in the January 

letter.

I. SMA Is Not Free to Provide Air Charters to Other Customers.

Apparently, this comment implies that because SMA's right to provide services to other 

customers is not specifically stated in the ACA, it can only provide air charter services to TDHC. 

The general purpose of a contract is to define the affirmative promises of each of the parties 

based on its terms and provisions. While such promises may include a promise to refrain from 

doing some action, such a provision would still need to be affirmatively stated in the contract and 

not simply implied from the mere absence of the term. The January letter suggests that SMA has 

agreed to restrict its freedom to contract with all other customers because the ACA does not 

provide an affirmative term ensuring SMA's freedom to do so. In view of the substantial 

detrimental economic effect on SMA, such an interpretation of the ACA is not reasonable. For 

this to be true, the ACA contain a term providing for such exclusive air services to TDHC. The 

generally accepted interpretation of these circumstances would be that in the absence of such an 

express restrictive provision, SMA is free to deal with any other party.

Attached hereto as Exhibit 1, is a listing of the total flights flown by SMA for the fourth quarter 

of 2011. These statistics have previously been reported to the Commonwealth Ports Authority 

and were, therefore, not compiled solely for purposes of this letter. As you can see over 40% of 

the flights flown by SMA are for customers other than TDHC. Therefore, SMA does in fact 

exercise the freedom and autonomy to provide air charter services to customers other than 

TDHC.

///
DOT Response Letter-Ms. Remo

February 1, 2012

Page 3

II. Adjustable Terms of Payment in the ACA.

The next comment concerns the provision in the ACA, that SMA has the right to adjust the 

charter rate to be paid by TDHC for the air charter services. First, it should be remembered that 

SMA did not have a written agreement in its relationship with TDHC because there are various 

factors, such as cost of fuel, port fees and local taxes which affect the cost of services provided 

by SMA. The increase in those costs are beyond the control of SMA and therefore allowing the 

parties to negotiate changes in charter prices was the norm and this position is still preserved by 

the terms of the ACA. Second, the ACA contemplates that TDHC will essentially agree to the 

increase which is based on a set of cost factors which will have changed and therefore justify the 

change. Otherwise, SMA has the unilateral right to terminate the ACA. Under this scenario, if 

the business relationship is to continue, between the two entities, a new agreement would be 

necessary and the parties would then have to mutually consent to the new charter price. 

Lastly, the inclusion of this term in the ACA is detrimental to TDHC and favorable to SMA. If 

the ultimate position of DOT were correct, that TDHC exercises some influence or control over 

SMA, then logic would dictate that TDHC would coerce SMA to accept terms which were 

beneficial only to TDHC, not the other way around.

III. Continuation of Service Even If Payments Delinquent.

The January letter also raises concerns about provisions in the ACA under which SMA may 

continue to provide air charter services when payments for past services are delinquent and that 

services can be reinstated by simply bringing unpaid accounts current, as being possible 

indications of undue influence or control over SMA by TDHC. 

As previously stated in SMA's response, Tinian has a very limited resident population and the 

operations of SMA are geared toward the customers of TDHC who are predominantly 

international passengers arriving in Saipan and thereafter in need of transportation to Tinian.1

SMA believes all businesses which derive their income from the tourist industry have a 

responsibility to maintain and support Tinian as a viable destination where tourists may gamble, 

dine and enjoy Tinian's other tourist attractions. Yet a tourist would be hard pressed to return to 

or recommend such a destination to another traveler if that person were stranded there and 

missed their return flight to their country of origin. For this reason, the ACA reserves the option 

to SMA to return such individuals back to Saipan so that they can return to their homes.

However, the ACA does impose sanctions on TDHC, when there are delinquencies. First, SMA 

will not fly any further flights from Saipan to Tinian for TDHC to bring in new customers in. 

Second, when it elects to return the potentially "stranded" passengers to Saipan, TDHC is billed 

at the higher rate of $250 per flight, rather than the normal $175 charge. (See Attachment1 of the 

ACA) 

 

1

 There is no public transportation between Saipan and Tinian, the only option is by private air service.
DOT Response Letter-Ms. Remo

February 1, 2012

Page 4

IV. Language Translation Provision.

The January letter then discusses a boiler plate provision in the concluding paragraphs of the 

ACA regarding translation of the document. Those paragraphs state:

FURTHERMORE, EACH PARTY IS SOLELY RESPONSIBLE FOR TRANSLATING 

THIS DOCUMENT INTO ANY OTHER LANGUAGE AND THE FAILURE TO DO SO 

WILL NOT BE A DEFENSE TO THE ENFORCEABILITY OF THIS DOCUMENT. 

IF THE DOCUMENT IS SO TRANSLATED IT IS AGREED THAT THE ENGLISH 

VERSION SHALL BE BINDING ON THE PARTIES IF THERE IS ANY CONFLICT 

BETWEEN IT AND ANY TRANSLATION.

The January letter once again raises "customary contract arrangements" but fails to specify any 

authority for this broad and sweeping statement. Nor does it specify the community to which this 

broad policy is applicable. The CNMI is a jurisdiction with many persons residing here who 

speak several languages other than English. Furthermore, English is only one of the three official 

languages of the CNMI. Therefore, in this legal community it is considered good practice to 

include such a provision in contracts in order to show that any party which may not have English 

as their primary language was afforded ample opportunity to have the English version translated 

into their native language, to avoid a later claim that the contract was signed by a party but the 

party was not fluent in English and did not understand all its terms and should not be fully bound 

by its terms. Secondly, the above language does not state that the ACA was in fact translated into 

any other language; it merely states "IF" such translation occurs then the English version of the 

contract is controlling. This is also normal practice since the party who does not need translation 

should not be held accountable for inaccuracies in any translation done for the other party. Nor 

should inaccuracies give rise to a defense that the contract was not understood when signed.

Conclusion:

As stated above, SMA has made its application for commuter authority and certified that it is 

owned, controlled and operated by U.S. citizens entirely. While it did not see the necessity for a 

air charter contract, it drafted one in response to DOT's suggestion that one was needed to 

establish the independence of SMA from TDHC. The January letter then proceeded to suggest 

that certain provisions of the contract, now establish some vague influence or control of SMA by 

TDHC. This response letter has rebutted all of these innuendos of influence or control. If DOT 

has some evidence other than unfounded suspicions of this influence or control then those facts 

should be placed on the record so that they can be confronted head on.

We emphasize again, that SMA's air service is not exclusively for the benefit of TDHC as it 

provides air service to other customers, including the residents of Tinian. While SMA is not a 

large company by external standards, within the Tinian community, it is a major source of 

commerce and tax revenues for that island. Even without taking into account the loss of 

customers to TDHC and the revenue to the local economy from that source, the denial of the 

commuter authority requested by SMA will represent a major decrease in the public and private 
DOT Response Letter-Ms. Remo

February 1, 2012

Page 5

revenue for the local community as well as the local government. In this time of economic 

decline, this community can ill afford to lose a business with such significant contributions to the 

local economy, especially based on unarticulated suspicions.

 

Because this issue is of such vital economic importance to the community of Tinian, the local 

political leaders of Tinian, as well as our Representative in Washington D.C. have been apprised 

of the status of this matter.

We look forward to your positive decision in this matter because it would be the correct decision. 

However, if you decide otherwise then we are prepared to pursue the matter to the next level.

Sincerely, 

Timothy H. Bellas

cc: Hon. Gregorio C. Sablan, Representative

 U.S. House of Representatives

 Tinian Delegation, House and Senate

 CNMI Legislature

 Hon. Ramon Dela Cruz

 Mayor of Tinian

 Client

 File

ATTESTATION

The factual contents of this letter are true and correct to the best of my knowledge and belief. 

Pursuant to Title 18 United States Code Section 1001, I Shaun Christian, President of Star 

Marianas Air, Inc., in my individual capacity and as the authorized representative of SMA, verify 

that I have not in any manner knowingly and willfully provided any falsified, fictitious, or 

fraudulent statement or knowingly used any documents which contain such statements in 

connection with the preparation, of this letter. I understand that an individual who is found to 

have violated the provisions of the 18 U.S.C. Section 1001 shall be fined or imprisoned for not 

more than five years, or both. 

Dated : 2-2-2012 ____________________________

Shaun Christian, President

Star Marianas Air, Inc.
EXHIBIT 1

Total Flights Flown by SMA in 4th Quarter, 2011, as reported to COMMONWEALTH PORTS AUTHORITY

October 2011 November 2011 December 2011

Total Flights* 2,640 3,119 3,347

TDHC Chartered 1,563 1,742 1,864

Other Flights* 1,077 1,377 1,483

Percentage of TDHC

Chartered 59.2% 55.9% 55.7%

Percentage of Other 

(non-TDHC) Chartered 40.8% 44.1% 44.3%

*Does not include training flights or uncompleted flights due to weather

ATTESTATION

The contents of this exhibit are true and correct to the best of my knowledge and belief. Pursuant to 

Title 18 United States Code Section 1001, I Shaun Christian, President of Star Marianas Air, Inc., in 

my individual capacity and as the authorized representative of SMA, verify that I have 

not in any manner knowingly and willfully provided any falsified, fictitious, or fraudulent statement 

or knowingly used any documents which contain such statements in connection with the preparation, 

of this letter. I understand that an individual who is found to have violated the provisions of the 18 

U.S.C. Section 1001 shall be fined or imprisoned for not more than five years, or both. 

Dated : 02/01/2012 ____________________________ 

Shaun Christian, President 

Star Marianas Air, Inc.