Pernet v Woodruff [2001] FMSC 9; 10 FSM Intrm. 239 (App. 2001) (12 June 2001)

FEDERATED STATES OF MICRONESIA
SUPREME COURT APPELLATE DIVISION

Cite as Pernet v. Woodruff,
[2001] FMSC 9; 10 FSM Intrm. 239 (App. 2001)

[2001] FMSC 9; [10 FSM Intrm. 239]

LORINA PERNET,
Plaintiff,

vs.

James Woodruff,
Defendant.

CERT. NO. 2000-1
PCA NO. 197-98

BEFORE:

Hon. Andon L. Amaraich, Chief Justice, FSM Supreme Court
Hon. Richard H. Benson, Associate Justice, FSM Supreme Court
Hon. Martin G. Yinug, Associate Justice, FSM Supreme Court

RESPONSE TO CERTIFIED QUESTIONS

Submitted: November 7, 2000
Decided: June 12, 2001

[10 FSM Intrm. 240]

APPEARANCE:

For the Defendant:
James Woodruff, Esq., pro se
P.O. Box 145
Kolonia, Pohnpei FM 96941

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HEADNOTES

Constitutional Law; Certification of Issues
Certified questions narrowly framed and not capable of varying resolutions may be accepted by the FSM Supreme Court appellate division when a greater service would be provided by answering the questions posed. Pernet v. Woodruff, [2001] FMSC 9; 10 FSM Intrm. 239, 241 (App. 2001).

Jurisdiction; Diversity
The FSM Constitution grants the FSM Supreme Court jurisdiction over disputes between a citizen of an FSM state and a citizen of a foreign state. Pernet v. Woodruff, [2001] FMSC 9; 10 FSM Intrm. 239, 242 (App. 2001).

Jurisdiction; Diversity
No jurisdiction is conferred on state courts by article XI, section 6(b) but neither does section 6(b) diversity jurisdiction preclude state courts from acting under state law, unless or until a party to the litigation invokes national court jurisdiction. Pernet v. Woodruff, [2001] FMSC 9; 10 FSM Intrm. 239, 242 (App. 2001).

Jurisdiction; Diversity
Both a state court and a national court may have jurisdiction over a case where, absent diversity considerations, the case is otherwise properly before the state court. Pernet v. Woodruff, [2001] FMSC 9; 10 FSM Intrm. 239, 242 (App. 2001).

Courts; Jurisdiction
The Pohnpei Supreme Court is a court of general jurisdiction, which has subject matter jurisdiction over a landlord/tenant dispute. Pernet v. Woodruff, [2001] FMSC 9; 10 FSM Intrm. 239, 242 (App. 2001).

Jurisdiction; Diversity; Jurisdiction; Removal
In a diversity case, a plaintiff, as the party initiating suit, can file her action in either state or national court, and if she files in state court, the defendant has two alternatives, either to litigate on the merits in state court or to remove the matter to national court. Pernet v. Woodruff, [2001] FMSC 9; 10 FSM Intrm. 239, 242-43 (App. 2001).

Jurisdiction; Diversity
The benefit the Constitution secures to diverse parties is the right to litigate in national court. Pernet v. Woodruff, [2001] FMSC 9; 10 FSM Intrm. 239, 243 (App. 2001).

[10 FSM Intrm. 241]

Jurisdiction; Diversity; Jurisdiction; Removal
The fact of the parties' diversity, without more, does not preclude a suit in state court because to invoke national court jurisdiction so as to divest a state court of jurisdiction means to remove the action to national court. Pernet v. Woodruff, [2001] FMSC 9; 10 FSM Intrm. 239, 243 (App. 2001).

Jurisdiction; Diversity
A motion to dismiss a state court case because of diversity neither divests the state court of jurisdiction nor invokes the FSM Supreme Court's diversity jurisdiction. Pernet v. Woodruff, [2001] FMSC 9; 10 FSM Intrm. 239, 243 (App. 2001).

Jurisdiction; Removal
The procedure for removal of state court cases to the FSM Supreme Court is controlled by General Court Order 1992-2, adopted pursuant to Article XI, section 9(d) of the Constitution. Pernet v. Woodruff, [2001] FMSC 9; 10 FSM Intrm. 239, 243 (App. 2001).

Jurisdiction ; Diversity; Jurisdiction ; Removal
To invoke national court jurisdiction in a diversity case in state court, a removal petition must be filed within 60 days of a party's receipt of papers from which his right to remove the case may first be ascertained. Pernet v. Woodruff, [2001] FMSC 9; 10 FSM Intrm. 239, 243 (App. 2001).

Jurisdiction; Removal
Failure to file a removal petition within the time requirements of FSM General Court Order 1992-2 constitutes a waiver of the right to invoke national court jurisdiction in cases involving parties of diverse citizenship. Pernet v. Woodruff, [2001] FMSC 9; 10 FSM Intrm. 239, 243 (App. 2001).

Jurisdiction; Removal
In diversity cases, state courts otherwise having jurisdiction pursuant to state law are not divested of jurisdiction unless or until a removal petition is timely filed, prompt written notice of such filing is served upon all parties, and a copy of the petition is filed with the state court clerk. Pernet v. Woodruff, [2001] FMSC 9; 10 FSM Intrm. 239, 243 (App. 2001).

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COURT'S OPINION

PER CURIAM:

On its own motion filed September 14, 2000, the trial division of the Pohnpei Supreme Court (Johnny, C.J.) certified to this Court two questions concerning jurisdiction in cases involving parties of diverse citizenship as described in the FSM Constitution, Article XI, Section 6(b). On September 22, 2000, we issued an order acknowledging receipt of the certified questions and by order entered October 5, 2000, the parties were requested to file briefs on the issue of whether this court should consider the certified questions or should instead remand them to the Pohnpei Supreme Court.

On October 13, 2000 the defendant filed a memorandum of law stating his position on the merits and urging the court to accept the questions and answer them. Plaintiff did not respond.

Guided by Bernard's Retail Store & Wholesale v. Johnny, 4 FSM Intrm. 33, 35 (App. 1989), we determined that the issues were narrowly framed and not capable of varying resolutions and decided that a greater service would be provided by answering the questions posed. We accepted the questions by order entered November 6, 2000 and allowed the parties to submit additional briefs on

[10 FSM Intrm. 242]

the two questions certified. Neither party chose to do so.

The two questions certified and the response of this court follow.

Certified Questions

1. Is a state court['s] jurisdiction divested in a section 6(b) case [at] the time a party asserts lack of jurisdiction on ground[s] of diversity even though the party does not invoke national court jurisdiction?

2. If the answer to paragraph 1 is in the negative, then at what point is state court jurisdiction divested of section 6(b) jurisdiction?

Answers

1. No. Although a party in a case involving diversity of citizenship has a constitutional right to invoke the jurisdiction of a national court, he must do so in accordance with the removal procedures set forth in FSM General Court Order 1992-2. The FSM Constitution, Article XI, Section 6(b) does not preclude state courts from acting under state law in diversity cases unless or until a party to the litigation timely invokes national court jurisdiction. Failure to timely seek removal results in a waiver of the right to invoke national court jurisdiction.

2. State court jurisdiction is divested upon the filing of a proper petition of removal in accordance with FSM General Court Order 1992-2.

Discussion

Article XI, Section 6(b) of the FSM Constitution grants jurisdiction to this court over disputes between a citizen of any of the four states of the FSM and a citizen of a foreign state. The case at bar involves such a dispute. Defendant contends that this grant of jurisdiction in diversity cases is exclusive to this court, and that the Pohnpei state court lacks subject matter jurisdiction in this case.

Defendant's contentions are at variance with settled law on these points, to which we spoke early in our jurisprudence. In Hawk v. Pohnpei, [1989] FMSC 24; 4 FSM Intrm. 85, 89 (App. 1989), we held that "[n]o jurisdiction is conferred on state courts by article XI, section 6(b) but neither does the diversity jurisdiction of section 6(b) preclude state courts from acting under state law, unless or until a party to the litigation invokes national court jurisdiction." Consistent with Hawk are the subsequent cases Bank of Guam v. Semes, [1988] FMSC 7; 3 FSM Intrm. 370 (Pon. 1988) (holding that "[i]f all parties agree, and if state law permits, a state court may hear and decide the kinds of cases described in article XI, section 6(b) of the Constitution") and U Corporation v. Salik, [1988] FMSC 20; 3 FSM Intrm. 389, 393 (Pon. 1988) (holding that parties are "deemed to have agreed to state court jurisdiction unless desire to invoke national court jurisdiction is manifested promptly"). These cases recognize that both a state court and a national court may have jurisdiction over a case where, absent diversity considerations, the case is otherwise properly before the state court. The Pohnpei Constitution, article 10, section 4(2) provides that "[t]he trial division of the Pohnpei Supreme Court has original jurisdiction over all civil and criminal cases within the jurisdiction of Pohnpei." Thus, as a court of general jurisdiction, the state court of Pohnpei has subject matter jurisdiction over this landlord/tenant dispute. As between the state court and the national court, the pertinent question becomes which court — and under what circumstances — properly exercises that jurisdiction.

Plaintiff, as the party initiating suit, could have filed her action in either state or national court.

[10 FSM Intrm. 243]

She chose the Pohnpei state court. Similarly, defendant was presented with two alternatives, either to litigate on the merits in state court or to remove this matter to national court. Instead, defendant filed his motion to dismiss in state court; alleged that the state court lacked subject matter jurisdiction; and on that basis asked that the state court suit be dismissed without taking any steps to effect removal to this court. The benefit secured to diverse parties under Article XI, Section 6(b) of the FSM Constitution is the right to litigate in national court. The fact of the parties' diversity, without more, does not preclude a suit in state court. Rather, to "invoke[] national court jurisdiction," Hawk, 4 FSM Intrm. at 89, so as to divest the state court of jurisdiction means to remove the action to national court. Hence, in the context of the second certified question, the motion to dismiss neither divested the state court of jurisdiction, nor invoked this court's diversity jurisdiction.

The procedure for removal to this court is controlled by General Court Order 1992-2, issued on May 27, 1992. This order, governing transfer of cases between state and national courts, was adopted pursuant to Article XI, Section 9(d) of the Constitution. As the chief administrator of the national judicial system, the FSM Supreme Court Chief Justice is permitted by the Constitution to make and publish rules for the national courts.

FSM General Court Order 1992-2, section II B provides that, "the petition for removal of any civil action shall be filed within sixty days after the receipt by any party, through service or otherwise, of a copy of an initial or amended pleading, motion, order or other paper from which it may first be ascertained that the case is removable." This rule makes clear that in order to invoke national court jurisdiction in a diversity case a petition for removal must be filed within sixty days of a party ascertaining his right to remove.

We therefore hold that failure to file a petition for removal in accordance with the time requirements of FSM General Court Order 1992-2 constitutes a waiver of the right to invoke national court jurisdiction in cases involving parties of diverse citizenship as provided by Article XI, Section 6(b) of the FSM Constitution. Moreover, in diversity cases state courts otherwise having jurisdiction pursuant to state law are not divested of jurisdiction unless or until a petition of removal is timely filed, prompt written notice of such filing is served upon all parties and a copy of the petition is filed with the clerk of the state court, all in accordance with FSM General Court Order 1992-2, section II D.

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