Federated States of Micronesia v Skico Ltd (II) [1996] FMSC 28; 7 FSM Intrm. 555 (Chk. 1996) (22 August 1996)

FEDERATED STATES OF MICRONESIA
SUPREME COURT TRIAL DIVISION
Cite case as Federated States of Micronesia v Skico Ltd (II), [1996] FMSC 28; 7 FSM Intrm. 555 (Chk. 1996)

FEDERATED STATES OF MICRONESIA,
Plaintiff,

vs.

SKICO LIMITED and CHUUK MULTI-
PURPOSE STORAGE COMPANY,
Defendants.

__________________________________________

CIVIL ACTION NO. 1995-1012

ORDERS

Richard H. Benson
Associate Justice

Hearing: July 10, 1996
Decided: August 22, 1996

APPEARANCES:

For the Plaintiff:
Teresa K. Zintgraff, Esq.
Assistant Attorney General
Office of the FSM Attorney General
P.O. Box PS-105
Palikir, Pohnpei FM 96941

For the Defendant (Skico):
Ron Moroni, Esq.
P.O. Box 1618
Kolonia, Pohnpei FM 96941

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HEADNOTES

Search and Seizure
A vessel arrested pursuant to a warrant has, upon request, a right to a post-seizure hearing to contest the warrant and any deficiency in the arrest proceeding. FSM v. Skico, Ltd. (II), [1996] FMSC 28; 7 FSM Intrm. 555, 556 (Chk. 1996).

Constitutional Law Due Process; Constitutional Law Interpretation
The FSM Constitution due process provision is derived from the United States Constitution and thus United States cases may be consulted for guidance in interpretation, emphasizing cases in effect at the times of the framing (1975) and the ratification (1978) of the FSM Constitution. FSM v. Skico, Ltd. (II), [1996] FMSC 28; 7 FSM Intrm. 555, 556-57 (Chk. 1996).

Constitutional Law Due Process Notice and Hearing; Search and Seizure
The Due Process Clause does not require an immediate post-seizure probable cause hearing in advance of a civil forfeiture trial. It only requires that the government begin the forfeiture action within a reasonable time of the seizure. FSM v. Skico, Ltd. (II), [1996] FMSC 28; 7 FSM Intrm. 555, 557 (Chk. 1996).

Constitutional Law Due Process Notice and Hearing; Search and Seizure
A civil forfeiture statute is not unconstitutional in failing to set out a requirement for a post-seizure hearing and a notice of that right; nor is the government constitutionally required to inform the defendant of such notice and a right to a hearing. FSM v. Skico, Ltd. (II), [1996] FMSC 28; 7 FSM Intrm. 555, 557 (Chk. 1996).

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COURT'S OPINION

RICHARD H. BENSON, Associate Justice:

This matter came before me on Skico's Motion to Dismiss filed March 14, 1996. After oral argument on March 25, 1996 the motion was taken under advisement. I conclude that the motion should be denied.

Skico makes two contentions. First, that Section 502 of Title 24 is unconstitutional in that it imposes penalties which are punitive and criminal in nature in civil actions. A similar contention was made by Skico in its Response to Discovery Request, filed February 29, 1996, and in its Reply to Opposition to Motion for Summary Judgment and Motion to Compel Discovery, filed February 29, 1996. In those memorandums Skico contended that since the action is actually criminal the Rules of Civil Procedure do not apply. This contention was overruled in my order filed April 4, 1996.

The contention is again considered in this motion. This case seeks civil penalties and forfeiture. Both actions are clearly identified in Title 24 as civil proceedings. 24 F.S.M.C. 502, 504(3). I will not disturb Congress's characterization. The motion to dismiss on this ground must be denied.

Skico's second contention is that the forfeiture provisions of Title 24, sections 504-509 are unconstitutional because they fail to provide for a prompt post-seizure hearing and for a notice to the owner of its right to such a hearing.

In this case there was a judicial determination of probable cause which resulted in a warrant for the arrest of the vessel, its stores and cargo. The warrant was issued on July 5, 1995. On the same day the government filed civil forfeiture proceedings. Upon the request of the vessel a post-seizure hearing was held. I decided on July 17, 1995 that it had a right to such a hearing to contest the warrant and any deficiency in the arrest proceeding. See FSM v. M.T. HL Achiever (II), [1995] FMSC 43; 7 FSM Intrm. 256, 257 (Chk. 1995). Skico, the cargo owner, is aware of that holding, and that a post-seizure hearing would have been held upon its request. Its contention is limited to the constitutional issue of the absence in the statute itself of a provision requiring notice and a hearing.

There is no FSM case authority which addresses this issue. The contention is founded on the due process provision of the Constitution. FSM Const. art. IV, § 3. The provision is derivom from the Constitution of the United States and thus United States cases may be consulted for guidance. Interpretation of the provision should emphasize casesffect at the times of the framing (1975) and the ratificatiication (1978) of the FSM Constitution. Paul v. Celestine, [1990] FMSC 2; 4 FSM Intrm. 205, 208 (App. 1990); Alaphonso v. FSM, [1982] FMSC 22; 1 FSM Intrm. 209, 216-17 (App. 1982).

Counsel have not provided any authority in effect in 1975 or 1978 which would guide the resolution of this case, nor have I found any. In United States v. $8,850[1983] USSC 93; , 461 U.S. 555, 562-63[1983] USSC 93; , 103 S. Ct. 2005, 2011, 76 L. Ed. 2d 143, 151 (1983) the court noted: "[W]e have not previously determined when a postseizure delay may become so prolonged that the dispossessed property owner has been deprived of a meaningful hearing at a meaningful time." The issue in that case had been whether a delay in commencement of the civil forfeiture action after seizure had been a denial of due process. There is no intimation in the case of the need of any post-seizure hearing other than the trial of the civil forfeiture.

That issue was raised in United States v. Banco Cafetero Panama, 797 F.2d 1154, 1162-63 (2d Cir. 1986) in which the defendant contended "that the Due Process Clause of the Fifth Amendment requires an immediate post-seizure probable cause hearing in advance of the forfeiture trial." The court held (relying on United States v. $8,850) that due process requires only that the government begin the forfeiture action within a reasonable time of the seizure. Id. at 1163. To the same effect is United States v. One 1985 Mercury[1990] USCA9 997; , 917 F.2d 415 (9th Cir. 1993). "[I]n a civil forfeiture proceeding, due process does not require an immediate post-deprivation hearing, at least where judicial review of the forfeiture is available within a reasonable time." Id. at 420 (citing United States v. One 1971 BMW 4-door Sedan[1981] USCA9 1154; , 652 F.2d 817, 820-21 (9th Cir. 1981)).

I have considered the foregoing United States authorities which interpret the same language, "due process of law," as appears in our Constitution. Skico invites me to disregard them, and adopt a rule of immediate notice to the owner of its right to a post-seizure hearing. I decline to do so.

The motion is denied.

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Skico's Motion to Dismiss Forfeiture for Failure to Provide Due Process Hearing/Alternative Motion for Payment of Expenses, filed March 20, 1996, was heard on July 10, 1996. The matter was then taken under submission.

This motion differs from Skico's motion filed March 14, 1996. In that motion Skico contended that the statute was constitutionally invalid in that it failed to require a prompt post-seizure hearing and notice of that right. In the present motion, Skico states that in this case Skico has not been provided with a post-seizure hearing or any notice of the right, and contends that such failure is a violation of its due process rights justifying dismissal. (In these motions Skico also mentions a lack of a pre-seizure hearing, but, correctly I believe, doesn't press the argument. Both parties rely on Calero-Toledo v. Pearson Yacht Leasing Co., [1974] USSC 126; 416 U.S. 663, 679[1974] USSC 126; , 94 S. Ct. 2080, 2089-90[1974] USSC 126; , 40 L. Ed. 2d 452, 466 (1974) as to this point.)

I denied the earlier motion to dismiss holding that the statute was not unconstitutional in failing to set out a requirement for a post-seizure hearing and a notice of that right. That holding in denying that motion to dismiss governs the disposition of this motion. Both motions are based on alleged violation of due process. Since I denied the earlier motion, this motion must also be denied. I could not on the one hand say that the provision for hearing and notice is not constitutionally required in the statute and on the other require the government to inform the defendant of such notice and a right to a hearing.

For the reasons set out in my other order entered today, denying Skico's March 14th motion, this motion must be denied.

Alternatively, or in addition to dismissal, Skico seeks damages for the lost rents, profits and interest entailed by the seizure. This claim has to be based on a finding of an illegal seizure. I cannot make such a finding. In view of this, I do not reach the merits of the other grounds for denying this alternative motion cited by the government. The alternative motion is denied.