Udot Municipality v Federated States of Micronesia [2002] FMSC 2; 10 FSM Intrm. 498 (Chk. 2002) (6 February 2002)

FEDERATED STATES OF MICRONESIA
SUPREME COURT TRIAL DIVISION

Cite as Udot Municipality v. FSM,
[2002] FMSC 2; 10 FSM Intrm. 498 (Chk. 2002)

[2002] FMSC 2; [10 FSM Intrm. 498]

UDOT MUNICIPALITY,
Plaintiff,

vs.

FEDERATED STATES OF MICRONESIA,
DEPARTMENT OF FINANCE AND ADMINISTRATION
FOR THE FEDERATED STATES OF MICRONESIA,
MAYOR LIWIS OS, in his capacity as Mayor of Polle
Municipality, TOLENSOM AUTHORITY, JAMES
FRITZ, in his capacity as Executive Director of
Chuuk State Committee on Improvement Projects,
Defendants.

CIVIL ACTION NO. 2000-1018

ORDER FIXING FEES AND COSTS

Richard H. Benson
Specially Assigned Justice

Decided: February 6, 2002

APPEARANCES:

For the Plaintiff:
Stephen V. Finnen, Esq.
Law Offices of Saimon & Associates
P.O. Box 1450
Kolonia, Pohnpei FM 96941

For the Defendants:
(FSM & Finance Dep't)
Kim Elisabeth Greene, Esq.
Assistant Attorney General
FSM Department of Justice
P.O. Box PS-105
Palikir, Pohnpei FM 96941

[10 FSM Intrm. 499]

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HEADNOTES

Attorney, Trial Counselor and Client - Fees
In fashioning a fee award, it has always been the court's function to determine what attorney's fees are reasonable and to award no more than that. When necessary, the court will reduce an attorney fee request to an amount it determines reasonable instead of denying any fee recovery at all. Udot Municipality v. FSM, [2002] FMSC 2; 10 FSM Intrm. 498, 500 (Chk. 2002).

Attorney, Trial Counselor and Client - Fees
An attorneys' fee award of $120 per hour is reasonable when there have been other fee awards of $120 per hour in the FSM, when the attorneys' work was of high quality, the case was a difficult one, and novel issues were presented and the relief sought was ultimately achieved. Udot Municipality v. FSM, [2002] FMSC 2; 10 FSM Intrm. 498, 500 (Chk. 2002).

Civil Procedure - Service; Costs
Service costs are always allowable to the prevailing party. Udot Municipality v. FSM, [2002] FMSC 2; 10 FSM Intrm. 498, 501 (Chk. 2002).

Costs
Transcript and copying expenses are allowable costs when they represent payments to others for that service. Udot Municipality v. FSM, [2002] FMSC 2; 10 FSM Intrm. 498, 501 (Chk. 2002).

Costs
An attorney's reasonable travel expenses are allowable as costs when there is a showing that no attorney is available on the island where the litigation is taking place, especially when the attorneys' travel expenses were reasonable and the actual expenses pro-rated proportionally with other clients on whose behalf they also traveled. Udot Municipality v. FSM, [2002] FMSC 2; 10 FSM Intrm. 498, 501 (Chk. 2002).

Costs
If, for a telephone hearing, a party's counsel initiated the call and bore that expense as a telephone charge then that party, if the prevailing party, would be entitled to tax those telephone charges as a cost, but when it is impossible to tell from the submitted expense billings, which, if any, those telephone charges were, no charges will be allowed. Udot Municipality v. FSM, [2002] FMSC 2; 10 FSM Intrm. 498, 501 (Chk. 2002).

Costs
While costs are allowed as of course to a prevailing party, costs against the FSM, its officers, and agencies are imposed only when authorized by statute. Udot Municipality v. FSM, [2002] FMSC 2; 10 FSM Intrm. 498, 501, 502 (Chk. 2002).

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COURT'S OPINION

RICHARD H. BENSON, Specially Assigned Justice:

This comes before the court on Udot Municipality's Motion for Costs and Attorneys' Fees, filed on August 17, 2001. The motion was brought to fix the amount of fees and costs to be awarded the plaintiff, Udot Municipality. These fees and costs were awarded as part of the court's Declaratory

[10 FSM Intrm. 500]

Judgment and Memorandum of Decision issued July 27, 2001. Udot Municipality v. FSM, [2001] FMSC 29; 10 FSM Intrm. 354, 361-62 (Chk. 2001).

Previously, on April 14, 2001, Udot moved against defendants Liwis Os and Tolensom Authority for the costs and attorney's fees which had been granted by court order of April 4, 2001, for Os's and Tolensom Authority's failure to comply with discovery. That motion sought fees of $900 (7½ hours at $120 per hour) and costs of $254.36 ($20 for service; $234.36) (total $1,154.36). By separate order, entered February 6, 2002, that motion was granted and those sums awarded.

The current motion seeks $15,930 in attorneys' fees on the basis of 132¾ hours work at $120 per hour. In addition, it asks for costs of $2,940.40, consisting of $250 in transcript expenses, $144.20 for service, $421.01 for telephone and fax expenses, $303.41 for copying expenses (at 8¢ a page in Pohnpei and 20¢ in Chuuk), and $1,821.78 in travel expenses. The current motion includes those fees and costs sought in the April 14, 2001 motion. Because those fees and costs were the subject of a separate order, they will not be considered or duplicated in this order.

The Defendant FSM's Opposition to Plaintiff's Motion for Costs and Attorneys' Fees was filed on September 3, 2001. No other opposition was filed.

I. Fees

The FSM contends that Udot has failed to show that the $120 hourly rate requested is reasonable and that since this rate is excessive and unreasonable the motion for attorney's fees must therefore be denied. The FSM contends that $120 per hour is excessive and unreasonable because "the prevailing rate outside of Pohnpei is in the range of $100-110 per hour." For this, it relies on Tolenoa v. Kosrae, [1987] FMSC 15; 3 FSM Intrm. 167, 173 (App. 1987) ($100 hourly rate reasonable for Kosrae) and Bank of Guam v. O'Sonis, [1999] FMSC 26; 9 FSM Intrm. 106, 110 (Chk. 1999) ($110 hourly rate reasonable in Chuuk).

In reply, Udot provides copies of three recent unpublished orders in which the FSM Supreme Court has awarded $120 per hour as reasonable attorney fees in cases in Chuuk or that are related to Chuuk. Udot also asks that a further 1½ hours at $120 ($180) be added to the award as the fees it incurred for the reply memorandum's preparation.

The FSM gives no authority for its contention that, instead of reducing Udot's claim from $120 per hour to $110 per hour, the court should award Udot nothing since its fee request is "excessive" because it is $10 higher than what the FSM regards as the maximum prevailing rate. In fashioning a fee award, it has always been the court's function to determine what attorney's fees are reasonable and to award no more than that. See Senda v. Creditors of Mid-Pacific Constr. Co., [1996] FMSC 18; 7 FSM Intrm. 664, 673 (App. 1996) (abuse of discretion for court to award attorney's fees without first determining if they are reasonable); Mobil Oil Micronesia, Inc. v. Benjamin, [2001] FMSC 62; 10 FSM Intrm. 100, 103 (Kos. 2001); Bank of the FSM v. Bartolome, 4 FSM Intrm. 182, 184 (Pon. 1990). When necessary, the court will reduce an attorney fee request to an amount it determines reasonable instead of denying any fee recovery at all. See, e.g., Bank of Hawaii v. Jack, [1990] FMSC 7; 4 FSM Intrm. 216, 221-22 (Pon. 1990) (fee request reduced to 15% of the outstanding judgment debt because under circumstances a fee award of over that was not reasonable).

Nevertheless, in the present case, $120 per hour is reasonable. There have been, as noted by Udot in its reply memorandum, other fee awards of $120 per hour in the Federated States of Micronesia. The attorneys' work in the present case was of high quality. The case was a difficult one. Novel issues were presented and the relief sought was ultimately achieved. Udot is therefore awarded $120 per hour.

[10 FSM Intrm. 501]

Udot claims fees for 132¾ hours. From those hours, the 7½ hours that, as mentioned above, is the subject of the discovery sanction award against Liwis Os and Tolensom Authority is subtracted and the 1½ hours for preparation of the reply memorandum is added. This now totals 126¾ hours, for which $15,210 is awarded. All defendants are jointly and severally liable for this sum.

II. Costs

Udot also asks for costs of $2,940.40, consisting of $250 in transcript expenses, $144.20 for service costs, $421.01 for telephone and fax expenses, $303.41 for copying expenses (at 8¢ a page in Pohnpei and 20¢ in Chuuk), and $1,821.78 in travel expenses. No party questioned or opposed any specific cost.

Service costs are always allowable to the prevailing party. Therefore $124.20 in service costs is allowed. (The $20 sought in the April 14, 2001 discovery sanction motion is not included.) Transcript and copying expenses are allowable costs when they represent payments to others for that service. See Damarlane v. United States, [1996] FMSC 57; 7 FSM Intrm. 468, 470 (Pon. 1996), aff'd[1997] FMSC 33; , 8 FSM Intrm. 45, 54 (App. 1997). The $250 for the preliminary injunction transcript and the $303.41 for copying expenses are thus allowed. The per page copying costs are within the prevailing rates in those locations. An attorney's reasonable travel expenses are allowable as costs when there is a showing that no attorney is available on the island where the litigation is taking place. Ray v. Electrical Contracting Corp., 2 FSM Intrm. 21, 26 (App. 1985). Udot made such a showing, and its attorneys' travel expenses were reasonable, in part because they were actual expenses and were pro-rated proportionally with other clients on whose behalf they also traveled to Chuuk. Therefore $1,587.42 is awarded as travel costs. (The $234.36 travel expense earlier considered as a discovery sanction is not included.)

Costs for telephone and fax charges are disallowed. No authority is given for assessing these costs. Because there were a number of telephone hearings held in this case, it may be that for one or more of them Udot's counsel initiated the call and Udot bore that expense as a telephone charge. If it did, then Udot, as the prevailing party, would have been entitled to tax those telephone charges as a cost, but it is impossible to tell from the expense billings submitted by Udot, which, if any, those charges were. Therefore no telephone or fax charges are allowed. Allowed costs therefore total $2,265.03.

The FSM, however, opposes the imposition of any costs on it on the ground that it is prohibited by Civil Procedure Rule 54(d). That rule provides that while costs are "allowed as of course" to a prevailing party, "costs against the Federated States of Micronesia, its officers, and agencies shall be imposed only to the extent allowed by law." FSM Civ. R. 54(d).

Udot contends that since it was awarded attorneys' fees and costs under an equitable private attorney general theory, these costs are allowed by law because the purpose of the private attorney general theory is to compensate a party who is forced to use a private attorney to litigate in the public interest. Udot also notes that even if Rule 54(d) bars the imposition of costs against the Federated States of Micronesia, it should not bar imposition of those costs against the allottee defendants, Liwis Os, Tolensom Authority, and James Fritz, which the FSM has contended throughout the litigation are not a part of it.

The court concludes that Rule 54(d) means what it says - costs cannot be imposed on the Federated States of Micronesia. FSM Rule 54(d) is copied from and similar to the United States Federal Rules of Civil Procedure Rule 54(d), which originally prohibited taxing fees and costs against the United States except when expressly authorized by an Act of Congress. But later, after the U.S. Congress had

[2002] FMSC 3; [10 FSM Intrm. 502]

enacted a general provision allowing costs against the United States, that rule was changed to read "costs against the United States, its officers, and agencies shall be imposed only to the extent allowed by law." 10 CHARLES ALAN WRIGHT, ARTHUR R. MILLER & MARY KAY KANE, FEDERAL PRACTICE AND PROCEDURE § 2672, at 236-38 (2d ed. 1983). That changed statute made the United States "liable for such fees and expenses to the same extent that any other party would be liable under the common law or under the terms of any statute specifically provides for for such an award." 28 U.S.C. § 2412(b). The U.S. statute also provided that the prevailing party's costs can be awarded against the United States in any civil action "other than cases sounding in tort." 28 U.S.C. §&#112(d)(1)(A).

No similar statutory provisions exns exist in the FSM. The court therefore concludes that, under Rule 54(d), costs cannot be awarded against the FSM, except when authorized by statute. Thus, Rule 54(d) "allows as of course" costs to the prevailing party against any party other than the Federated States of Micronesia, its officers, and its agencies. The non-FSM defendants are therefore jointly and severally liable for the allowed costs of $2,265.03.

III. Conclusion

Udot Municipality is accordingly awarded $15,210 in attorneys' fees, for which all defendants are jointly and severally liable. The non-FSM defendants are jointly and severally liable for costs of $2,265.03. The FSM defendants are not liable for costs.

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