Federated States of Micronesia v Jonas (II) [1983] FMSC 9; 1 FSM Intrm. 306 (Pon.1983) (18 August 1983)

SUPREME COURT OF THE
FEDERATED STATES OF MICRONESIA
Cite as FSM v. Jonas (II), [1983] FMSC 9; 1 FSM Intrm. 306 (Pon.1983)

TRIAL DIVISION-STATE OF PONAPE

FEDERATED STATES OF MICRONESIA,
Plaintiff,

vs.

BILLY JONAS et al.,
Defendants.

CRIMINAL ACTION NO. 1982-525

OPINION AND ORDER

Before the Honorable Edward C. King
Chief Justice
August 18, 1983
Ponape, Caroline Islands 96941

APPEARANCES:

For the Plaintiff: David Nevitt
Chief Litigator
Office of the Attorney General
Federated States of Micronesia
Ponape, Caroline Islands 96941

For the Defendants:

Billy Jonas: John K. Rechucher
Attorney-at-Law
P.O. Box 445
Koror, Palau District 96940

Ahm Fred: Phillip A. Okney
Chief Public Defender
P.O. Box 88

Majuro, Marshall Islands 96960

[1983] FMSC 9; [1 FSM Intrm. 306]

When this trial began and throughout presentation of the government's case-in-chief, 74 separate counts against four different defendants were at issue. The Appellate Division subsequently found the bulk of those charges outside of this Court's jurisdiction. All charges against two of the defendants, Iakopus Obet and Songko Bridge, have been dismissed.

The remaining defendants, Billy Jonas and Ahm Fred, assert that much of the evidence introduced by the government under the counts now excluded is irrelevant to the remaining counts and is unfairly prejudicial to them for' purposes of the remaining counts.

Defendant Fred has moved for evidence concerning those earlier counts to be stricken. Both defendants have also filed motions asking that I declare a mistrial and disqualify myself from all further proceedings.

For reasons discussed in this opinion, the motions are denied.

Factual Background

Until the last half of 1982, the defendants were employees of Mobil Oil Micronesia, Inc. They are charged with using their positions to enhance their wealth illegally, at Mobil's expense. The thrust of the government's case is that, while numerous illegal transactions were alleged, each was similar or identical to the other, and all were part of one pattern or scheme of activities. The government

[1 FSM Intrm. 307]

introduced evidence that each defendant participated in a practice referred to as "altering ICR's."

"Altering" consisted of modifying information on Mobil's invoice and cash receipt forms ("ICR's") so that the first copy, the one signed and received by the customer, reflected an actual sales transaction but the carbon copies retained by Mobil showed a different, smaller sale. The difference between the two amounts allegedly was retained by the employees.

The government contends that all ICR's were altered in essentially the following manner. First, the incorrect. information to be reflected on Mobil's copies was typed. This was accomplished by placing a thin sheet of transparent paper over the original and typing. This caused carbon imprints to show on the lower copies but left the original, customer copy unmarked. The original copy was then removed from the ICR set and the correct information was typed on it. The customer copy was replaced over the carbons before presentation to the customer.

When the customer and Mobil employees signed the original copy accurately reflecting the transaction, carbon imprints of their signatures also appeared on the lower, altered copies. The copy accurately reflecting the transactions was torn off and given to the customer. The altered carbon copies were retained for distribution and filing within Mobil's offices.

[1 FSM Intrm. 308]

For example, government exhibit 3 is the customer copy of a Mobil ICR showing a January 12, 1982 sale to PAMI of 400 gallons of kerosene for $589.60, and 600 gallons of gasoline for $780. Only the $780 gasoline sale is shown on government exhibit 3A, the copy for Mobil's offices. Thus, Mobil headquarters learned only of the gasoline sale and received proceeds only for the gasoline. The government contends that the $589.60 for- kerosene was illegally retained by employees.

The government maintains that defendants Billy Jonas and Ahm Fred, as Ponape Bulk Plant Supervisor and Assistant. Supervisor, respectively, initiated and participated in the transactions and received money from them.

When the case went to trial on March 3, 1983, there were 74 counts of theft, forgery, embezzlement and conspiracy spanning from November 1, 1979 through October 15, 1982. After the trial was well underway, the Trust Territory High Court issued its decision in Otokichy v. Appellate Division, 8 TTR 295 (App. 1983), disagreeing with an earlier opinion of this Court's Appellate Division, In re Otokichy, [1982] FMSC 16; 1 FSM Intrm. 183 (1982). The High Court held that this new Court has no jurisdiction over criminal cases involving crimes alleged to have occurred before July 12, 1981, the effective date of the National Criminal Code. 11 F.S.M.C. 101 et seq.

Thereafter the defendants moved this Court for

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dismissal of the 59 counts involving actions claimed to have occurred before July 12, 1981. That motion was denied. However, the night after completion of the government's case, Mr. Nevitt, the government attorney, was severely injured in a motorcycle accident. The trial was recessed enabling consideration of the petition for writ of prohibition filed by defendants with this Court's Appellate Division.

On May 24, the Appellate Division held that this Court has no original trial jurisdiction over charges in this case relating to alleged wrongdoing before July 12, 1981. In compliance with that decision, this Court has dismissed the counts relating to events before July 12, 1981. Thus only two defendants, and 15 of the original 74 counts, remain before the Court.

Motion to Strike Evidence

Defendant Fred asks that evidence relating to exhibits reflecting transactions before July 12, 1981, and to the plea agreement of one of the previous defendants, be stricken.

Since propriety of the evidence already introduced is also crucial to the motions for disqualification and for mistrial, I have made a general review of the evidence and my comments here are not limited to the evidence designated in Mr. Fred's motion.

Most previously introduced evidence is unquestionably related to counts still before the Court. For example,

[1 FSM Intrm. 310]

Mobil officials from Guam testified as to the nature of the duties of various employees at Mobil's Ponape Bulk Plant. While this discussion concerned duties prior to July 12, 1981, as well as thereafter, the description of the duties before and after did not vary significantly between the periods. That testimony is clearly relevant for indicating positions of persons within the company who might have had the opportunity to carry out and benefit from the alleged actions.

In addition, Mr. Belmas, a Mobil auditor, discussed how Mobil learned of the scheme. Although Mr. Belmas' auditing activities uncovered illegal transactions both before and after July 12, 1981, his testimony focused on methods employed by Mobil in determining that improper transactions had taken place. I find all of his testimony relevant to the remaining counts.

Another category is conversations of various Mobil employees prior to July 12, 1981. These related to the existence of a pattern of conduct and planning and carrying out illegal transactions. Such conversations are relevant as to whether a conspiracy existed after July 12, 1981. Moreover, to the extent those earlier conversations reflected knowledge that currently named defendants were aware of and participated in illegal transactions prior to July 12, 1981, they lend themselves to an inference that the same defendants may have been involved in

[1 FSM Intrm. 311]

similar transactions thereafter.

Mr. Fred's motion focuses on testimony concerning individual ICR alterations before July 12, 1981. That evidence too is related to the counts now before this Court.

Our rules define "relevant evidence" as evidence "having any tendency to make the existence of any fact that is of consequence to the determination of the action more probable or less probable than it would be without the evidence." FSM Evid. R. 401.

The government contends that a particular type of illegal activity was initiated in 1979 and that the same activity, involving some of the same people, continued into 1982. Defendant Billy Jonas, alleged initiator of the scheme, is accused of having been involved throughout. Proof that a person engaged in a particular transaction before July 12, 1981, surely makes the claim that he played a parallel role in similar transactions after July 12, 1981, "more probable." This is particularly true since the defendants' titles, responsibilities and relationships to the clerks who altered the invoices, were similar both before
and after July 12, 1981.

Perhaps if this lawsuit, as initiated, had involved only the counts now before the Court, some of the testimony and exhibits pertaining to transactions before July 12, 1981 would have been excluded as needless cumulative evidence causing unnecessary delay or waste of time. FSM Evid. R. 403.

[1 FSM Intrm. 312]

These, however, are considerations of judicial economy, discretionary with the Court. In any event, now that the evidence has been admitted no time would be saved by striking it.

Similarly, evidence of the earlier ICR alterations is not rendered inadmissible on grounds that it relates to "other crimes, wrongs, or acts." FSM Evid. R. 404(b). That a defendant was able to use his position with Mobil to embezzle funds in a particular way prior to July 12, 1981, lends itself to an inference that the same defendant, holding the same Mobil position after July 11, 1981, had the opportunity to carry out the same kind of transaction thereafter. Information concerning pre-July 12, 1981 transactions and activities may also: (1) suggest that defendants who engaged in illegal activities earlier still intended to do so at a later time; (2) indicate preparation for later actions; (3) establish a plan extending beyond July 12, 1981; (4) suggest knowledge of similar later actions; (5) imply identity of people involved in subsequent similar ICR alterations later; and (6) reduce likelihood that ICR alterations after July 12, 1981 occurred by mistake or accident. These legitimate purposes overcome the general prohibition against evidence of prior misconduct merely to show the character of the defendant. FSM Evid. R. 404(b). See also McCormick, Evidence § 190 (2d ed. 1972). II Wigmore, Evidence §§ 303-307 (Chad. ed. 1979).

[1 FSM Intrm. 313]

For the same reasons, the testimony of Iakopus Obet concerning his plea agreement stands as proper evidence. This remains so despite the Appellate Division's subsequent determination that this Court has no jurisdiction to convict Mr. Obet or accept a guilty plea from him for those charges. Mr. Fred points out that Mr, Obet's motive for testifying was greatly diminished by the Appellate Division's decision. That however is not the point. These subsequent events in no way affect the admissibility of the testimony or its credibility.

Disqualification

I shall not disqualify myself, for the following procedural and substantive reasons.

a. Procedural - The Judiciary Act of 1979 sets forth the grounds for disqualification in subsections (1) and (2) of the disqualification section [4 F.S.M.C. 124(1) and (2)] and specifies the proper procedure in subsection (6):

(6) A party may move the disqualify a Supreme Court Justice for one or more of the reasons stated in subsections (1) or (2) of this section. Said motion shall be accompanied by an affidavit stating the reasons for the belief that grounds for disqualification exist, and shall be filed before the trial or hearing unless good cause is shown for filing it at a later time. Upon receipt of such a motion, the Justice shall rule on it before proceeding further in the matter, stating his reasons for granting or denying it on the record.

4 F.S.M.C. 124(6) (emphasis added).

[1 FSM Intrm. 314]

Despite the plain statutory requirement, no affidavit was filed. There are presently but two justices on the FSM Supreme Court. They reside in locations hundreds of miles apart. Disqualification of one justice necessarily means that 50% of the national judiciary will be unavailable for further service in the litigation. Only with substantial expense, effort and disruption can the Court then enable the litigation to proceed. Disqualification also will inevitably entail considerable delay.

This is not to suggest that a justice whose circumstances fall within those described in the Judiciary Act, 4 F.S.M.C. §§ 124(1) and (2), may refuse to disqualify himself. The circumstances here do however highlight the longstanding notion that a judge should disqualify himself "only for the most compelling of reasons." 46 Am. Jur. 2d Judges § 199 (1969).

The affidavit is the primary instrument for stating and considering grounds for recusal. Without affidavits detailing the precise basis for the motions, the Court is deprived of the necessary information. Failure of defendants to comply with the procedures specified in the statute concerning disqualifications renders the motions insufficient.

b. Substantive - Even without sufficient motions seeking disqualification a judge may always disqualify himself if he believes sufficient grounds exist. At the same time, this power must be exercised conscientiously,

[1 FSM Intrm. 315]

not used by the judge to avoid difficult or controversial cases. I have reviewed the disqualification provisions and considered whether grounds for disqualification may exist here. They do not.

The Judiciary Act says:

(1) A Supreme Court Justice shall disqualify himself in any proceeding in which his impartiality might reasonably be questioned.

4 F.S.M.C. 124(1). There is no suggestion that I have done or said anything either in or out of court indicating partiality to one side or the other in this case. I am aware of no contention that I have any personal interest or knowledge gained outside of court that might affect my partiality. The fact is that I had no knowledge of these defendants before the onset of this litigation and I have no partiality toward either side. My only interest throughout has been, and remains, to assure that the proceedings are conducted fairly and expeditiously and that we reach a just result.

There exist no proper grounds for reasonable questioning of my impartiality.

Defendant Fred's motion indicates a belief that I may now be prejudiced "because of events during the trial." Although the motion cites no statutory provision, I assume he is relying upon 4 F.S.M.C. 124(2)(a), which says:

(2) A Supreme Court Justice shall also disqualify himself in the following circumstances:

[1 FSM Intrm. 316]

(a) where he has a personal bias or prejudice concerning a party or his counsel, or personal knowledge of disputed evidentiary facts concerning the

proceeding.

Defendant Fred's reliance upon prejudice arising from "events during the trial" as a basis for disqualification is misplaced. Judges are typically exposed to information in the course of trials which lead them to lean toward one side or the other as litigation draws to a conclusion. This indeed is a primary objective of parties in litigation. It would be a fundamental contradiction in terms to hold that information obtained by a judge in the course of a trial could be used as a basis for disqualifying the judge from rendering a decision in the case because he has now become "prejudiced" or "biased."

Although I have concluded that all the evidence introduced in the trial thus far is properly admitted for purpose of the counts still at issue, my conclusion as to disqualification would not be altered even if some of the evidence had been irrelevant to the counts and prejudicial to the defendants. As already pointed out, the judicial adjustments, expense and delay flowing from a judicial disqualification in Micronesia are substantial indeed. The problem is compounded by the reality that it is not uncommon here for a particular individual to appear before the same judge in more than one case. If we were to consider information received by a judge in judicial proceedings in

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determining whether that judge is "prejudiced" so as to be disqualified, serious disruption could occur.

Recognition that the determination of bias, prejudice or partiality should be made on the basis of conduct which is extrajudicial in nature is not simply a homemade idea fashioned to fit the exigencies of life in the Federated States of Micronesia. It is a common sense rule long established and honored in other court systems. The United States Supreme Court has said:

The alleged bias and prejudice to be disqualifying must stem from an extrajudicial source and result in an opinion on the merits on some basis other than what the judge learned from his participation in the case.

United States v. Grinnell Corp., [1966] USSC 122; 384 U.S. 563, 583[1966] USSC 122; , 86 S. Ct. 1968, 1710, 16 L. Ed. 2d 778, 793 (1966).

Properly admitted evidence in the trial is not the only judicially received information excluded from consideration on the question of disqualification. The point was well stated in United States v. Cowden, [1976] USCA1 270; 545 F.2d 257, 265-66 (1st Cir.), cert. denied, 430 U.S. 909 (1977):

Insofar as the judge's presiding over the prior trials of Cowden's codefendants may have resulted in his learning about facts damaging to Cowden, the situation is not much different from when a presiding judge learns about evidence, later excluded, damaging to a defendant at a voir-dire or bench conference in the same proceeding. While judges attempt to shield themselves from needless exposure to matters outside the record, they are necessarily exposed to them in the course of ruling on the admission of evidence; and the judicial system could not function if judges

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could deal but once in their lifetime with a given defendant, or had to withdraw from a case whenever they had presided in a related or companion case or in a separate trial in the same case ...

See also United States v. Schmidt, [1979] USCA3 631; 604 F.2d 236, 238 (3d Cir. 1979); United States v. Haldeman, 559 F.2d 31, 132 (D.C. Cir. 1976); United States v. Montecalvo, [1976] USCA9 1309; 545 F.2d 684 (9th Cir. 1976); United States v. Boffa, 513 F. Supp. 505 (D. Del. 1981); and Hawaii-Pacific Venture Capital Corp. v. Rothbard, 437 F. Supp. 230, 233 (D. Haw. 1977) ("A judge may not be disqualified for any bias developed during the very trial in which disqualification is sought.")

These rules recognized in the United States excluding judicial proceeding from consideration for purposes of disqualification are appropriate for adoption here. The circumstances in Micronesia outlined in this opinion intensify the common reality that judicial systems must rely on such rules to expedite the administration of justice. I note also that, as a general proposition, the context in which a judge receives information in judicial proceedings reduces the likelihood of unfair impact. Even if the information tendered is incorrect and misleading, in adversarial proceedings another party often has the incentive to set the record straight. The "victim" of the information typically will learn of its existence and have an opportunity to respond. Finally, it seems

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proper to recall that judges by training and professional obligation are restricted in their decisionmaking. Even if a judge has judicially received other information his decision is required to be based on evidence properly admitted in the case.1

Lest we lose perspective, it may bear mentioning that the trial was originally undertaken with the intention that this Court, after hearing evidence on 74 counts, would decide each. This was based on a determination that the counts were related and that the defendants would not be unfairly prejudiced by having all counts and all defendants tried together. If I was originally capable of deciding the post-July 11, 1981 counts fairly after hearing evidence on the other 59 counts, surely nothing that has happened subsequently has deprived me of that capacity.

Finally, I find no merit in defendant Fred's argument that "additional personal feelings" may now "surface" in the "condition of my mind" as a result of the Appellate Division's conclusion that this Court will acquiesce in the High Court's assertion that the FSM Supreme Court has no jurisdiction over pre-July 12, 1981 crimes. It is true

[1 FSM Intrm. 320]

that I expressed strong opinions on the question of jurisdiction. Yet, there is simply no relationship between that jurisdiction issue and the question of whether defendants Fred and Jonas are guilty of the counts remaining before this Court. My views on the question of jurisdiction as between this Court and the Trust Territory High Court, in no way imply any feelings at all concerning the defendants. The motions for disqualification are denied.

MISTRIAL

Both defendants have also moved for declaration of a mistrial, on essentially the same theories as those discussed concerning disqualification. My conclusion that all evidence introduced thus far is relevant to the remaining counts undercuts any claim that the existence of that evidence requires a mistrial.

Another point raised by Mr. Fred as calling for a mistrial is the statement by counsel for the government that additional Mobil losses had been uncovered and that these might result in further prosecution against the defendants. Such a general and unsubstantiated representation surely could have no effect on the determination of the Court in these proceedings. Indeed, the absence of further prosecutorial action since that time may suggest a government determination that no grounds for prosecution exist for those other losses.

[1 FSM Intrm. 321]

For the reasons discussed here, defendant Fred's motion to strike evidence, and both defendants' motions for disqualification and mistrial are denied.

So ordered as of the 18th day of August 1983.

/s/ Edward C. King
Chief Justice
Supreme Court of the Federated
States of Micronesia

Entered this 31st day of August 1983.

/s/ Emiliana J. Kihleng
Chief Clerk of Court

[1 FSM Intrm. 321a]

1. A judge who, at the beginning of a trial, is so influenced by other information that he knows he will not be capable of basing decision solely on the properly admitted evidence in the case is under an ethical obligation to disqualify himself or herself from the litigation. This is so even if that information was received judicially.