Wortel v Bickett [2003] FMSC 55; 12 FSM Intrm. 223 (Kos. 2003) (18 November 2003)

FEDERATED STATES OF MICRONESIA
SUPREME COURT TRIAL DIVISION
Cite as Wortel v. Bickett, [2003] FMSC 55; 12 FSM Intrm. 223 (Kos. 2003)

[2003] FMSC 55; [12 FSM Intrm. 223]

OLIVIER L. WORTEL,
Plaintiff,

vs.

RONALD BICKETT, personally and in the
official capacity as Kosrae state attorney
general, and THE STATE OF KOSRAE,
Defendants.

CIVIL ACTION NO. 2002-2008

ORDER AND MEMORANDUM

Martin Yinug
Associate Justice

Decided: November 18, 2003

APPEARANCES:

For the Plaintiff:
Sean Patrick Lynch, Esq.
Micronesian Legal Services Corporation
P.O. Box 129
Kolonia, Pohnpei FM 96941

For the Defendant:
Ronald Bickett, pro se
Tofol, Kosrae FM 96944

For the Defendants:
Danny Clearman, Esq. (Atty Gen’l & state)
Attorney General
Office of the Kosrae Attorney General
P.O. Box 870
Tofol, Kosrae FM 96944

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HEADNOTES

Civil Rights; Criminal Law and Procedure
A person commits an offense if he willfully, whether or not acting under color of law, deprives another of, or injures, oppresses, threatens, or intimidates another in the free exercise or enjoyment of, or because of his having so exercised any right, privilege, or immunity secured to him by the FSM Constitution or laws. Section 701(3) provides for civil liability, including attorney’s fees, against any person engaging in the proscribed conduct. "Person" includes state governments. Wortel v. Bickett, [2003] FMSC 55; 12 FSM Intrm. 223, 225 (Kos. 2003).

[12 FSM Intrm. 224]

Civil Procedure - Summary Judgment
Summary judgment is appropriate where, viewing the facts in a light most favorable to the non-moving party, there is no genuine issue of material fact, and the moving party is entitled to judgment as a matter of law. Summary judgment may be granted on the issue of liability alone. Wortel v. Bickett, [2003] FMSC 55; 12 FSM Intrm. 223, 225 (Kos. 2003).

Civil Rights; Foreign Investment Laws
The unilateral cancellation of a foreign investment permit in derogation of the procedures provided for under Kos. S.C. § 15.308(10) is arbitrary and grossly incorrect, and as such constitutes a violation of the national civil rights statute. Wortel v. Bickett, [2003] FMSC 55; 12 FSM Intrm. 223, 226 (Kos. 2003).

Foreign Investment Laws
The Kosrae State Code provides that a state foreign investment permit may be temporarily suspended only if the permit holder a) begins operation in a different economic sector from the one(s) for which the permit was issued, or b) alters, changes, modifies or transfers the amount of the ownership interest which the non-citizen retains. Wortel v. Bickett, [2003] FMSC 55; 12 FSM Intrm. 223, 226 (Kos. 2003).

Administrative Law - Judicial Review; Civil Rights; Foreign Investment Laws
When a canceled foreign investment permit was ultimately reinstated, it renders moot the cancellation itself and leaves no administrative remedy for the permit holder to pursue. What then remains as a live court issue is the arbitrary and grossly incorrect manner in which the permit was originally canceled. This conduct constitutes a violation of 11 F.S.M.C. 701 et seq., and entitles the plaintiff to a summary judgment. Wortel v. Bickett, [2003] FMSC 55; 12 FSM Intrm. 223, 226 (Kos. 2003).

Civil Rights
The Kosrae Office of the Attorney General enforces state penal laws, delegating enforcement to a department in its discretion. Thus the Kosrae attorney general is an individual with responsibility for determining final policy with regard to the matters committed to that office, and as such is liable on a personal basis if he violates a person’s constitutional rights through making a deliberate choice to follow a course of action from among various alternatives. Wortel v. Bickett, [2003] FMSC 55; 12 FSM Intrm. 223, 226-27 (Kos. 2003).

Civil Procedure - Summary Judgment
Summary judgment will not be granted when the documentary evidence does not resolve the fact issues relative to that defendant’s precise role in the cancellation of the plaintiff’s permit. Wortel v. Bickett, [2003] FMSC 55; 12 FSM Intrm. 223, 227 (Kos. 2003).

Civil Procedure - Summary Judgment
If summary judgment is not rendered upon the whole case or for all the relief asked and a trial is necessary, the court must if practicable ascertain what material facts exist without substantial controversy and what material facts are actually and in good faith controverted. But when the material facts center on what the defendants actually believed at the relevant times, not to mention disputed questions about who said what to whom and when, and since the determination of these facts will turn on credibility, it is not practicable within the meaning of Rule 56(d) for the court to make a finding on what material facts exist without substantial controversy. This determination must await trial. Wortel v. Bickett, [2003] FMSC 55; 12 FSM Intrm. 223, 227-28 (Kos. 2003).

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[12 FSM Intrm. 225]

COURT’S OPINION

MARTIN YINUG, Associate Justice:

The motion for summary judgment of the plaintiff Olivier Wortel ("Wortel") is granted against the defendant State of Kosrae ("Kosrae") on the complaint’s first cause of action on liability. Damages remain an issue for trial on the first cause of action. Summary judgment against the defendant Ronald Bickett ("Bickett") on the first cause of action is denied because questions of fact exist. Summary judgment on Wortel’s second and third causes of action are also denied because of the existence of fact issues that preclude summary judgment. FSM Civ. R. 56. In light of the disposition of Wortel’s motion, the defendants’ cross-motion for summary judgment is denied.

MEMORANDUM

The complaint in this case alleges three claims under the FSM civil rights statute, 11 F.S.M.C. 701 et seq. Section 701(1) provides in pertinent part that

[a] person commits an offense if he willfully, whether or not acting under color of law, deprives another of, or injures, oppresses, threatens, or intimidates another in the free exercise or enjoyment of, or because of his having so exercised any right, privilege, or immunity secured to him by the Constitution or laws of the Federated States of Micronesia.

Section 701(3) provides for civil liability, including attorney’s fees, against any person engaging in the proscribed conduct. "Person" includes state governments. Plais v. Panuelo, [1991] FMSC 25; 5 FSM Intrm. 179, 205 (Pon. 1991).

Wortel’s first cause of action alleges that the defendants violated his civil rights by the unilateral cancellation of his foreign investment permit without any of the procedural safeguards provided by § 15.308(10) of the Kosrae State Code. Those safeguards include a hearing and an opportunity to be heard prior to cancellation of the permit. Wortel’s second cause of action alleges that the defendants violated his civil rights by attempting to coerce Wortel into providing perjured testimony about the drug activities of Tim Hill, an American Peace Corps volunteer who was living in Kosrae at relevant times. Wortel’s third cause of action alleges that the defendants retaliated against him by canceling his foreign investment permit because Wortel insisted on providing only truthful information to the defendants about Tim Hill.

Summary judgment is appropriate where, viewing the facts in a light most favorable to the non-moving party, there is no genuine issue of material fact, and the moving party is entitled to judgment as a matter of law. Bank of Guam v. Island Hardware, Inc., [1986] FMSC 22; 2 FSM Intrm. 281, 284 (Pon. 1986). Summary judgment may be granted on the issue of liability alone. Id.

On Wortel’s first cause of action, no genuine issue of fact exists. Without notice, the Kosrae Department of Commerce and Industry canceled Wortel’s foreign investment permit. By letter of November 27, 2002 (exhibit "A" to Wortel’s motion), the Kosrae Department of Commerce and Industry, which is one of Kosrae’s statutorily created executive departments, Kos. S.C. § 5.201(2), notified the FSM Division of Immigration and Labor in Kosrae that the "cancellation of the above permit [is] effective today, November 27, 2002, at 12:00 noon." The letter further provided that Wortel "will be notified of this action by copy hereof and will be directed to surrender such permit for our proper disposition." The letter is signed by Singkitchy P. George, the Director of the Kosrae Department of Commerce and Industry. By subsequent letter of December 2, 2002, to Wortel, Singkitchy George

[12 FSM Intrm. 226]

advised Wortel that the November 27, 2002 letter "was in error where it made reference to ‘cancellation’ of your permit. Your Foreign Investment Permit has been suspended, not cancelled pending a final hearing on the matter" (emphasis in original). After a hearing on December 30, 2002, the permit was reinstated.

The unilateral cancellation of Wortel’s permit in derogation of the procedures provided for under Kos. S.C. § 15.308(10) was "arbitrary, [and] grossly incorrect," and as such constituted a violation of our national civil rights statute, 11 F.S.M.C. 701. Simon v. Pohnpei, [1994] FMSC 49; 6 FSM Intrm. 314, 316 1994). Assuming that the cancellation was a mistake, the cthe correction effected by the December 2, 2002 letter does not alter the undisputed fact of the cancellation. Nor does the fact that the permit was later reinstated change this conclusion. As Wortel points out, the reinstatement goes to the issue of the damages that flow from the cancellation, not to the question whether the permit was canceled in the first instance.

The defendants urge that the Kosrae statute permits the temporary suspension of a permit pending the cancellation procedures. Because the statute permits this, they characterize the unequivocal language of the November 27, 2002 letter as a temporary suspension. This disingenuous contention is at odds with the language of the November 27, 2002 letter itself, which states that the permit was canceled as of 12:00 noon on November 27, 2002. Further, a temporary suspension has no application to the facts before the court. Section 15.308(10) of the Kosrae State Code provides that

[i]f it appears to the Director that one or more of the grounds for cancellation of a Kosrae State Foreign Investment Permit, as enumerated in Section 15.308(7) above, may exist, the Director may temporarily suspend the validity of that Kosrae State Foreign Investment Permit and shall commence the following procedures leading to cancellation.

(emphasis added). The grounds specified in Section 15.308(7) are two: the permit holder "(a) begins operation in a different economic sector from the one(s) for which the Kosrae State Foreign Investment Permit was issued, or (b) alters, changes, modifies or transfers the amount of the ownership interest which the non-citizen retains." Neither of these two bases for temporary suspension of the permit applies here. Thus Kosrae’s contention that the November 27, 2002 letter was a temporary suspension has no merit.

Defendants also have pled the affirmative defense of failure to exhaust administrative remedies, but the court is unable to divine how this applies to the facts before the court. Ultimately, Wortel’s foreign investment permit was reinstated, which renders moot the cancellation itself and leaves no issue for Wortel to pursue in this regard by either administrative or judicial means. What remains a live issue is the arbitrary and grossly incorrect manner in which the permit was originally canceled. This conduct constitutes a violation of 11 F.S.M.C. 701 et seq., and Wortel is entitled to summary judgment on his first cause of action.

Accordingly, summary judgment is granted in Wortel’s favor and against Kosrae on the complaint’s first cause of action. The November 27, 2002 letter is signed in an official capacity by a director of one of Kosrae’s statutorily constituted administrative departments, and Kosrae is liable for the cancellation effected by that letter.

Although it is a close case, fact questions exist with respect to the liability of Bickett for the violation of Wortel’s constitutional rights under the first cause of action. Bickett was Kosrae’s attorney general at relevant times. Like the Department of Commerce and Industry, the Office of the Attorney General is one of Kosrae’s statutorily created departments under the executive branch. Kos. S.C. § 5.201(7). That office, which is headed by the attorney general, "enforces State penal laws,

[12 FSM Intrm. 227]

delegating enforcement to a department in its discretion." Kos. S.C. § 5.202(7)(a) (emphasis added). Thus the Kosrae attorney general is an individual with responsibility for determining final policy with regard to the matters committed to that office, and as such is liable on a personal basis if he violated Wortel’s constitutional rights through making "a deliberate choice to follow a course of action ... from among various alternatives." Plais, 5 FSM Intrm. at 206.

Wortel has attached to his motion as exhibit "E" a draft of a letter which provides in pertinent part that "we are withdrawing the Foreign Investment Permit for the above referenced individual. This withdrawal is effective immediately." Wortel points out that this letter was produced by the defendants through discovery, and was styled by them as an "[u]nsigned and undated draft letter prepared by Ronald Bickett to be signed by Singkitchy George." This statement was retracted by Bickett in his September 29, 2003, sworn declaration, and in this respect Bickett’s truthfulness becomes an issue for resolution at trial. Apart from that concern, however, on the record before the court there is a genuine issue of fact whether Singkitchy George acted directly at Bickett’s behest in canceling the permit. This is to say that the link between the draft and the letter sent out by the Department of Commerce and Industry is not sufficient such that there is no genuine issue of material fact as to Bickett’s liability. For instance, the November 27, 2002 letter is not a mirror image of Bickett’s purported draft. The draft letter uses the word "withdraw," whereas the word of import appearing in the November 27, 2002 letter for purposes of Kos. S.C. § 15.308(10) is "cancellation." Thus fact issues remain about the genesis of the November 27, 2002 letter and Bickett’s role in its creation.

Wortel also points to yet another letter - a November 18, 2002 letter (exhibit "B" to Wortel’s motion) from Bickett to the Kosrae office of the FSM Division of Immigration and Labor - in support of his contention that the defendants willfully sought to bring about the cancellation of his permit. The letter states in pertinent part that "the State of Kosrae ... does not support the continued presence of Mr. Wortel in Kosrae or the FSM." This letter, however, does not resolve the fact issues relative to Bickett’s precise role in the cancellation of the permit.

Accordingly, Wortel’s motion for summary judgment for summary judgment against defendant Bickett on his first cause of action is denied.

With respect to Wortel’s two remaining causes of action, the court finds that questions of fact exist that preclude the grant of summary judgment. A material allegation of these causes of action is that the defendants attempted to coerce Wortel into making false statements regarding the drug activities of Tim Hill. Wortel urges at length that the defendants engaged in various illegal activities designed to force Wortel to provide untruthful information about Hill, and that they had no reasonable basis for concluding that Wortel had any knowledge about Tim Hill’s drug activities. Because defendants could not have had a reasonable belief that Wortel was withholding information, Wortel asserts that their efforts necessarily constituted attempts to elicit false information from him. On the other hand, the defendants contend that their repeated efforts to elicit information from Wortel reflected their belief that he was withholding information. What the defendants in fact subjectively believed, whether reasonably or not, will hinge on witness credibility and cannot be decided on a motion for summary judgment. Accordingly, Wortel’s motion for summary judgment on the second and third causes of action of the complaint is denied. The defendants’ cross-motion for summary judgment is also denied.

Wortel requests pursuant to Rule 56(d) that the court make a finding regarding the facts that are without substantial controversy. Rule 56(d) provides in pertinent part that if "judgment is not rendered upon the whole case or for all the relief asked and a trial is necessary, the court ... shall if practicable ascertain what material facts exist without substantial controversy and what material facts are actually and in good faith controverted." As noted, the material facts here center on what the defendants

[2003] FMSC 56; [12 FSM Intrm. 228]

actually believed at the relevant times, not to mention disputed questions about who said what to whom and when. Since the determination of these facts will turn on credibility, it is not practicable within the meaning of Rule 56(d) for the court to make a finding on what material facts exist without substantial controversy. This determination must await trial.

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