Supreme Court Affirms Inverse Condemnation Claim Against CUC

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Saipan, CNMI – On June 30th, the Supreme Court upheld a Superior Court determination that an inverse condemnation claim against the Commonwealth Utilities Corporation was timely under the statute of limitations. In Sablan v. Commonwealth Utilities Corporation, Conrad M. Sablan alleged that CUC built a water tank and pump station in 1991 on family land in the Sadog Tasi area of Saipan, without paying compensation. The Court held a claim does not accrue until the landowner reasonably should have known of the taking. Sablan did not become aware of the taking until 2013, when a survey revealed that the water tank and related structures were on Sablan’s family land.

The Court addressed seven issues on appeal, affirming four other rulings of the trial court and reversing two. The Court affirmed that CUC is subject to inverse condemnation liability even without its own independent statutory power of eminent domain. The constitutional duty to pay just compensation depends on whether private property was taken for public use, not on whether the particular government entity involved had formal condemnation authority.

Next, the Court held that no separate, compensable taking occurred as to Tract 22654-1, a triangular portion of the property. Sablan argued that the water tank and pump station had blocked access to Tract 22654-1 from the road. However, the triangular parcel was still accessible through the rest of the property until the family made the subdivision. The parcel became landlocked as a result of the family later subdividing the property and not because of government action.

The Court also affirmed the Superior Court’s bifurcation of the trial into liability and damages phases as within its discretion to manage its docket. Finally, the Court found the use of the Moody’s Aaa Corporate Bond Index to calculate prejudgment interest consistent with the objective prudent investor standard. This standard requires rate which reasonably reflects the return of a prudent investor while preserving principal over time.

The Supreme Court reversed two holdings. First, the right to all of the compensation transferred to Sablan through a November 25, 2013 “Confirmation Deed” executed by Maria Sablan, Tito Sablan, and Vicente Sablan conveying “all rights, title, interests, and claims” in the parcels. Contrary to the Superior Court’s ruling, the co-owners did not have any remaining interest in the judgment after the 2013 property subdivision survey and conveyance.

Second, the trial court used the wrong valuation method to calculate the amount of compensation. Compensation must be measured based on the parent tract as it existed at the time of the government’s occupation in 1991, not by valuing a later-created subdivision parcel as if that parcel had been wholly taken. Because the government occupied only part of the original tract, compensation needed to be recalculated using the “before-and-after” method, which compares the value of the entire property before the taking with the value of what remained afterward.

The full opinion is available on the Law Revision Commission website:

https://cnmilaw.gov/pdf/supreme/2026-MP-05.pdf

2026-PR-024

FOR IMMEDIATE RELEASE

July 1, 2026

This press release has been prepared by court staff for the convenience of the public. For further information, contact the Supreme Court at Supreme.Court@NMIJudiciary.gov