Truk Trading Co (Pohnpei) Inc v Department of Treasury and the Administration of the State of Pohnpei [2003] FMSC 41; 12 FSM Intrm. 1 (Pon. 2003) (16 July 2003)

FEDERATED STATES OF MICRONESIA
SUPREME COURT TRIAL DIVISION
Cite as Truk Trading Co. (Pohnpei) v. Department of Treasury, [2003] FMSC 41; 12 FSM Intrm. 1 (Pon. 2003)

[2003] FMSC 41; [12 FSM Intrm. 1]

TRUK TRADING CO. (POHNPEI), INC.,
Plaintiff,

vs.

DEPARTMENT OF TREASURY AND ADMINISTRATION
OF THE STATE OF POHNPEI and JOHN EHSA in his
capacity as SECRETARY OF THE DEPARTMENT OF
FINANCE AND ADMINISTRATION OF THE
FEDERATED STATES OF MICRONESIA,
Defendants.

CIVIL ACTION NO. 2003-005

ORDER GRANTING LEAVE TO FILE AMENDED COMPLAINT

Andon L. Amaraich
Chief Justice

Decided: July 16, 2003

APPEARANCES:

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

For the Defendant (Pohnpei Treasury):
Emeka Akamigbo, Esq.
Assistant Attorney General
Pohnpei Department of Justice
P.O. Box 1555
Kolonia, Pohnpei FM 96941

For the Defendant (Ehsa):
Harry Seymour, Esq.
Assistant Attorney General
FSM Department of Justice
P.O. Box PS-105
Palikir, Pohnpei FM 96941

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HEADNOTES

Civil Procedure - Pleadings
A party may amend its pleading once as a matter of course at any time before a responsive pleading is served. Otherwise a party may amend the its pleading only by leave of court or by written consent of the adverse party; and leave shall be freely given when justice so requires. Truk Trading

[12 FSM Intrm. 2]

Co. (Pohnpei) v. Department of Treasury, [2003] FMSC 41; 12 FSM Intrm. 1, 2 (Pon. 2003).

Civil Procedure - Pleadings
A party must plead in response to an amended pleading within the time remaining for response to the original pleading or within 10 days after service of the amended pleading, whichever period may be the longer, unless the court otherwise orders. Truk Trading Co. (Pohnpei) v. Department of Treasury, [2003] FMSC 41; 12 FSM Intrm. 1, 2 (Pon. 2003).

Administrative Law - Judicial Review; Civil Procedure - Pleadings
A motion to amend a complaint to add the FSM as a party will be granted when the original complaint was an appeal of a Pohnpei state administrative decision and when a related FSM administrative decision involving the plaintiff’s related tax matters was recently issued since, as the plaintiff asserts that Pohnpei and the FSM are inconsistently interpreting tax laws, it seeks to add the FSM as a defendant so that both Pohnpei and the FSM will be required to tax it uniformly, without potentially subjecting it to double tax liability. Judicial economy weighs in favor of permitting plaintiff to file its amended complaint and consolidate the appeals of inconsistent Pohnpei and FSM administrative decisions. Truk Trading Co. (Pohnpei) v. Department of Treasury, [2003] FMSC 41; 12 FSM Intrm. 1, 2-3 (Pon. 2003).

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COURT’S OPINION

ANDON L. AMARAICH, Chief Justice:

Plaintiff filed a motion for leave to file an amended complaint in this case on June 24, 2003. The Department of Treasury and Finance of the State of Pohnpei ("Pohnpei State") filed a non-opposition to this motion on June 25, 2003.

Rule 15 of the FSM Rules of Civil Procedure states in relevant part that:

A party may amend the party’s pleading once as a matter of course at any time before a responsive pleading is served .... Otherwise a party may amend the party’s pleading only by leave of court or by written consent of the adverse party; and leave shall be freely given when justice so requires. A party shall plead in response to an amended pleading within the time remaining for response to the original pleading or within 10 days after service of the amended pleading, whichever period may be the longer, unless the court otherwise orders.

FSM Civ. R. 15(a). Plaintiff filed its complaint against Pohnpei State on February 25, 2003. The original complaint was an appeal of an administrative decision of Pohnpei State. A related administrative decision, involving related tax matters between plaintiff and the Department of Finance and Administration of the Federated States of Micronesia ("FSM"), was recently issued on June 9, 2003. In summary, plaintiff claims that this case involves the FSM’s refusal to pay Pohnpei State sales tax to plaintiff, Pohnpei State’s assessment of liability for that tax against plaintiff, and the FSM’s assessment of liability against plaintiff for failure to pay gross revenue tax on the amount that plaintiff has paid under protest to Pohnpei State. Plaintiff seeks to add the FSM as a defendant to this case, as it asserts that Pohnpei State and the FSM are inconsistently interpreting tax laws, and so that both Pohnpei State and the FSM will be required to tax plaintiff uniformly, without plaintiff potentially being subjected to double tax liability.

[2003] FMSC 59; [12 FSM Intrm. 3]

Judicial economy weighs in favor of permitting plaintiff to file its amended complaint and consolidate the appeals of the inconsistent administrative decisions of Pohnpei State and the FSM. Accordingly, plaintiff’s motion for leave to file its amended complaint, attached to its motion as Exhibit A, is HEREBY GRANTED. The Clerk of Courts is HEREBY ORDERED to file plaintiff’s amended complaint. Defendants shall have 20 days from the date of service of the amended complaint to file any answer.

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