Introduction

This commentary examines the Supreme Court of the Northern Mariana Islands’ decision in Island Star International, Inc. v. Feng Yu (2025-MP-02), rendered May 23, 2025. The case arises from a commercial dispute over an apartment rental business, in which the parties reached a mediated settlement agreement that one side later sought to rescind. The trial court denied enforcement of the agreement on grounds of misunderstanding, and the appellant, Feng Yu, attempted to pursue an interlocutory appeal. The Supreme Court dismissed that appeal for lack of jurisdiction, holding that an order denying enforcement of a private settlement agreement is not immediately appealable under the collateral order doctrine. This decision clarifies the boundaries of interlocutory review in the Commonwealth and aligns local precedent with U.S. Supreme Court authority.

Summary of the Judgment

Chief Justice Castro, writing for a unanimous panel, identified three threshold requirements for interlocutory appeals under the collateral order doctrine: (1) a conclusive determination of a disputed question, (2) an issue separate from the merits of the underlying claim, and (3) an injury that would be effectively unreviewable on appeal from a final judgment. The Court focused on the third element and held that a private party’s desire to avoid trial by enforcing a settlement agreement does not constitute an injury that is effectively unreviewable after final judgment. Relying principally on Digital Equipment Corp. v. Desktop Direct, Inc. (511 U.S. 863 (1994)), the Court adopted that decision’s reasoning and reaffirmed several Commonwealth precedents in declining to recognize interlocutory appeal rights in this context. Because the order was non-final and did not satisfy the collateral order doctrine, the Court dismissed for lack of jurisdiction.

Analysis

1. Precedents Cited

• Digital Equipment Corp. v. Desktop Direct, Inc. (511 U.S. 863 (1994)): Held that an order denying enforcement of a private settlement agreement does not create a right not to go to trial and is not immediately appealable.
• Clark v. Elza (406 A.2d 922 (Md. 1979)): Allowed interlocutory appeal to preserve avoidance of trial expense, later contrasted with Digital Equipment.
• He v. Commonwealth (2003 MP 3 ¶ 14) and Pacific Amusement, Inc. v. Villanueva (2005 MP 11 ¶ 18): Invoked Digital Equipment to limit collateral order appeals.
• Reyes v. Commonwealth (2024 MP 8 ¶ 5, ¶ 24): Defined the three elements of the collateral order doctrine in CNMI law and rejected sovereign-immunity interlocutory appeals.
• Takasi v. Yoshizawa (2022 MP 1 ¶ 7): Found denial of summary judgment likewise not appealable interlocutorily.
• Federal circuit decisions applying Digital Equipment: Agema v. City of Allegan (6th Cir.), Carolina Power & Light Co. v. U.S. (4th Cir.), In re Deepwater Horizon (5th Cir.), and Cordoza v. Pacific States Steel Corp. (9th Cir.).
• Camacho v. Demapan (2010 MP 3 ¶ 28): Affirmed the requirement to satisfy all three collateral order elements.
• Commonwealth v. Pua (2006 MP 19 ¶ 11) and In re Abraczinskas (2023 MP 12 ¶ 6–7): Outlined the extraordinary nature of mandamus relief.

2. Legal Reasoning

The Court’s reasoning proceeds as follows:

1. Under NMI Const. art. IV, § 3, only final judgments or orders satisfying the collateral order doctrine are immediately appealable.
2. Yu conceded the order was non-final but argued the denial of settlement enforcement was effectively unreviewable post-trial because he risked losing the benefit of the settlement.
3. The Court applied the three-pronged test from Reyes (drawing on Digital Equipment): conclusiveness, separability, and effective unreviewability.
4. Examining the third prong, the Court held that a privately negotiated settlement does not create an immunity or privilege on par with those recognized for interlocutory appeals (e.g., sovereign immunity, double jeopardy, qualified immunity).
5. Accepting Yu’s argument would open the door to interlocutory appeals in every settlement dispute, contravening the final judgment rule and the preference against piecemeal review.
6. The Court reaffirmed that public policy favoring settlements is not overridden by jurisdictional limits on interlocutory appeals.
7. Because Yu did not satisfy effective unreviewability, the Court did not need to address the remaining elements and declined to convert the appeal into a mandamus petition, finding no extraordinary circumstances.

3. Impact

This decision has several important implications:

• Finality Emphasized: It reinforces the Commonwealth’s strong adherence to the final judgment rule and limits interlocutory review to narrow, well-defined categories.
• Settlement Efforts Unaffected: Parties remain incentivized to mediate and settle, secure in the knowledge that any enforcement dispute must be resolved within the normal appellate process.
• Jurisdictional Clarity: Lower courts and litigants now have clear guidance that orders denying settlement enforcement are non-appealable until a final disposition on the merits.
• Alignment with Federal Law: The CNMI Supreme Court aligns its collateral order doctrine with the U.S. Supreme Court’s teaching in Digital Equipment and subsequent circuit decisions.
• Litigation Strategy: Counsel should anticipate that any challenge to settlement enforcement will be deferred until after final judgment, shaping when and how enforcement motions are brought.

Complex Concepts Simplified

• Final Judgment Rule: Generally, only final orders that end litigation on the merits are appealable, to prevent fragmented review and preserve judicial efficiency.
• Collateral Order Doctrine: A narrow exception allowing interlocutory appeals for orders that (1) conclusively decide an issue, (2) involve questions separate from the case’s merits, and (3) would be effectively unreviewable after final judgment.
• Effectively Unreviewable: An injury so substantial that waiting for final judgment would deprive the party of any meaningful appellate remedy (e.g., absolute immunity from suit).
• Mandamus Relief: An extraordinary writ that a court may issue to compel or prohibit certain actions when no other adequate remedy exists—and only if strict criteria are met.

Conclusion

Island Star v. Yu clarifies that private settlement agreements do not confer an interlocutory right to avoid trial and that orders denying enforcement of such agreements fall outside the narrow collateral order doctrine. By adopting the U.S. Supreme Court’s approach in Digital Equipment and reaffirming local precedents, the Northern Mariana Islands Supreme Court underscores the primacy of the final judgment rule while preserving the ordinary appellate pathway for settlement disputes. This decision strengthens jurisdictional predictability and ensures that settlement enforcement questions are resolved in the context of a final judgment, without discouraging parties from pursuing mediation.