Ge Seaco Services, Ltd v Federated Shipping Co [2006] FMSC 10; 14 FSM Intrm. 159 (Pon. 2006) (29 March 2006)

FEDERATED STATES OF MICRONESIA
SUPREME COURT TRIAL DIVISION
Cite as GE Seaco Servs., Ltd. v. Federated Shipping Co.[2006] FMSC 10; , 14 FSM Intrm. 159 (Pon. 2006)

GE SEACO SERVICES, LTD.,
Plaintiff,

vs.

FEDERATED SHIPPING CO., LTD.,
Defendant.

CIVIL ACTION NO. 2006-007

OPINION AND ORDER DENYING MOTION FOR TEMPORARY RESTRAINING ORDER

Andon L. Amaraich
Chief Justice

Decided: March 29, 2006

APPEARANCES:

For the Plaintiff:
Craig D. Reffner, Esq.
Law Office of Fredrick L. Ramp
P.O. Box 1480
Kolonia, Pohnpei FM 96941

For the Defendant:
Andrea S. Hillyer, Esq.
P.O. Drawer D
Kolonia, Pohnpei FM 96941

[2006] FMSC 12; [14 FSM Intrm. 164]

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HEADNOTES

Civil Procedure – Injunctions
In ruling upon a motion for a temporary restraining order, the court must consider and weigh four factors: 1) the possibility of irreparable harm to the moving party; 2) the balance of injuries between the parties; 3) the likelihood of the movant’s success on the merits; and 4) any impact on the public interest. GE Seaco Servs., Ltd. v. Federated Shipping Co., [2006] FMSC 10; 14 FSM Intrm. 159, 162 (Pon. 2006).

Civil Procedure - Injunctions
Irreparable harm is the single most dispositive factor in determining whether injunctive relief should be granted. Irreparable harm is harm that cannot be remedied in any way except by the rather drastic measure of a restraining order. Stated another way, irreparable injury is that for which there is no adequate alternative remedy. GE Seaco Servs., Ltd. v. Federated Shipping Co., [2006] FMSC 10; 14 FSM Intrm. 159, 162 (Pon. 2006).

Civil Procedure - Injunctions
An injury cannot accurately be deemed irreparable when the court concludes that money damages would fully compensate the plaintiff for any loss it has sustained since the claimed loss is neither uncertain nor impossible to calculate because the containers rent for $1.25 per day and, even if all of the containers have rusted to the extent they are no longer usable, the amount of damages would still be easily calculable since each container has a replacement value. GE Seaco Servs., Ltd. v. Federated Shipping Co., [2006] FMSC 10; 14 FSM Intrm. 159, 162 (Pon. 2006).

Civil Procedure - Injunctions
In evaluating the balance-of-injuries factor, the court must compare the threatened harm to each party if injunctive relief is granted or denied. GE Seaco Servs., Ltd. v. Federated Shipping Co., [2006] FMSC 10; 14 FSM Intrm. 159, 163 (Pon. 2006).

Civil Procedure - Injunctions
When a plaintiff’s complaint appears serious and non-frivolous, and when because there is no contract between the plaintiff and the defendant, the plaintiff has a very good chance of succeeding on the merits. GE Seaco Servs., Ltd. v. Federated Shipping Co., [2006] FMSC 10; 14 FSM Intrm. 159, 163 (Pon. 2006).

Civil Procedure - Injunctions
When the matter does not directly affect the public and any impact on the public interest, whether injunctive relief is granted or denied, would be negligible, the public-interest factor does not warrant extraordinary relief. GE Seaco Servs., Ltd. v. Federated Shipping Co., [2006] FMSC 10; 14 FSM Intrm. 159, 163-64 (Pon. 2006).

Civil Procedure - Injunctions
A temporary restraining order is a drastic remedy. A court cannot, in good conscience, grant such relief when the plaintiff has failed to make a showing of irreparable harm and only one of the four factors - likelihood of success on the merits - weighs in its favor. GE Seaco Servs., Ltd. v. Federated Shipping Co., [2006] FMSC 10; 14 FSM Intrm. 159, 164 (Pon. 2006).

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COURT’S OPINION

ANDON L. AMARAICH, Chief Justice:

[14 FSM Intrm. 165]

I.

On March 24, 2006, this Court entered an order denying Plaintiff’s motion for a temporary restraining order. The Court denied the motion on the ground that Plaintiff had failed to make a showing of irreparable harm. This memorandum opinion sets forth in detail the Court’s reasoning. A scheduling order issues herewith.

II.

Plaintiff is a London-based corporation engaged in the business of leasing sea containers, which are used to ship cargo on ocean going vessels. Defendant is an FSM based corporation that provides stevedoring and terminal services for all vessels entering Pohnpei’s port. Defendant is the only such agent in the area.

On March 8, 2006, Plaintiff filed a complaint for in rem jurisdiction, declaratory judgment, and civil damages. The complaint asserted that, in July 2004, Plaintiff leased more than 110 containers to a company called Philippines, Micronesia & Orient Navigation Company (PM&O), which formerly provided cargo services throughout the Pacific region. PM&O entered into an agreement with Defendant, whereby PM&O would pay Defendant for stevedoring fees in connection with the loading and unloading of the containers. PM&O also contracted with Defendant for storage fees. It was customary for PM&O to leave the loaded containers at various ports in the FSM and collect them at a later date, after they were emptied.

Sometime in 2005, PM&O went out of business, leaving numerous empty containers at ports in the FSM. Plaintiff believes that 43 containers were left at Defendant’s storage facility.

Defendant has not yet filed an answer to the complaint.

On March 20,2006, Plaintiff filed a motion for a temporary restraining order, seeking to enjoin Defendant from interfering with its loading of the containers onto a vessel, the Kyowa Salvia, which was scheduled to arrive in Pohnpei sometime between March 24th and 26th. Plaintiff also requested that the Court order Defendant to provide the necessary stevedoring services, for which Plaintiff agreed to reimburse Defendant. Plaintiff stated that, as of December 2005, PM&O owed Defendant approximately $32,000 for storage fees. Defendant refused to return the containers to Plaintiff unless Plaintiff agreed to pay all of PM&O’s outstanding fees.

Defendant filed its brief in opposition on March 23, 2006. Defendant stated that it has possession of only 42 of the 43 containers and that one container is full of merchandise.

[14 FSM Intrm.166]

III.

In ruling upon a motion for a temporary restraining order, this Court must consider and weigh four factors: (1) the possibility of irreparable harm to the moving party; (2) the balance of injuries between the parties; (3) the likelihood of the movant’s success on the merits; and (4) any impact on the public interest. Ambros & Co. v. Board of Trustees, [2003] FMSC 65; 12 FSM Intrm. 124, 127 (Pon. 2003).

A. Irreparable Harm

This is the single most dispositive factor in determining whether injunctive relief should be granted. See Kony v. Mori, 6 FSM Intrm. 28, 29 (Chk. 2003) ("The essential thing that must be shown [before a temporary restraining order will issue], is that there is a clear showing that immediate and irreparable injury or loss or damage would occur if the temporary restraining order is not granted."). Irreparable harm is harm that "cannot be remedied in any way except by the rather drastic measure of a restraining order." Wiliander v. Siales, [1995] FMSC 12; 7 FSM Intrm. 77, 80 (Chk. 1995). Stated another way, irreparable injury is "that for which there is no adequate alternative remedy." Palik v. Henry, [1999] FMKSC 9; 9 FSM Intrm. 267, 269 (Kos. S. Ct. Tr. 1999).

Plaintiff asserts that the extreme temperatures on this island pose a threat of irreparable harm (i.e., rust) to the containers if they remain here for too long. Additionally, for every day the containers stay in Defendant’s storage, Plaintiff is deprived of a source of revenue. Further, because the containers are in Defendant’s possession, Plaintiff has no way to determine the extent of damage already sustained. Thus, it is impossible at this time to calculate damages.

Defendant points out that the containers have been in storage for six months, and that there is no real exigency, particularly since vessels arrive on Pohnpei on a bi-monthly basis. Defendant argues that any harm to the containers would constitute an economic loss, and economic loss is not irreparable. Further, temporary restraining orders expire in 14 days. At that point, the containers would be gone, and a preliminary injunction hearing would essentially be a moot point.

This Court has found irreparable harm where, for example, the plaintiffs were denied access to their lands by threats of physical violence, Carlos Etscheit Soap Co. v. Epina, [1997] FMSC 5; 8 FSM Intrm. 155, 162 (Pon. 1997), and where a plaintiff alleged loss of goodwill and potential customers, Yang v. Western Sales Trading Co., [2003] FMSC 83; 11 FSM Intrm. 607, 615 (Pon. 2003). Other courts have found irreparable harm where, for example, the plaintiff alleged injury which threatened to destroy an estate, Sigrah v. Kosrae, [2004] FMKSC 17; 12 FSM Intrm. 513, 520 (Kos. S. Ct. Tr. 2004).

The instant case is easily distinguishable from those in which irreparable injury has been found. Here, the claimed loss is neither uncertain nor impossible to calculate. Defendant points out that, under the terms of the contract between Plaintiff and PM&O, Plaintiff continues to collect $1.25 per day, per container. See Long-Term Lease No. 0216-44. Even if that were not true, Plaintiff’s claim of irreparable injury due to lost revenues would be unavailing, since Plaintiff should easily be able to calculate the amount of money lost while the containers have been in storage. Moreover, even if all of the containers have rusted to the extent they are no longer usable, the amount of damages would be easily calculable, since each container has a replacement value.

The Court concludes that money damages would fully compensate Plaintiff for any loss it has sustained. Therefore, the injury cannot accurately be deemed irreparable. See Palik v. Henry, [1999] FMKSC 9; 9 FSM Intrm. 267 (Kos. S. Ct. Tr. 1999).

[14 FSM Intrm. 167]

B. Balance of Injuries

Plaintiff argues that this factor weighs heaviest in its favor, since it is seeking to protect a property interest, whereas Defendant is simply seeking to recover or "extort" from Plaintiff the monies owed to Defendant by PM&O.

Defendant argues that it would be harmed if the Court issued a temporary restraining order without reviewing all of the underlying issues, particularly since only 42 of the claimed 43 containers are in Defendant’s possession. Moreover, Defendant would be harmed if it did not have the opportunity to join other indispensable parties - such as PM&O - as defendants.

In evaluating this factor, the Court must compare the threatened harm to each party if injunctive relief is granted or denied. Carlos Etscheit Soap Co., 8 FSM Intrm. at 162. The Court concludes that the harm to Defendant, if the restraining order issued, would be greater than the harm to Plaintiff, if the restraining order were denied. If the Court were to grant Plaintiff’s request, the containers would leave this jurisdiction prior to a complete determination on the merits and would likely never return. Should Defendant ultimately prevail, it may not realistically be able to recover the full amount of a judgment, since Plaintiff is a London-based corporation, and the bond would not have been for the full amount owed by PM&O - approximately $32,000. If the motion is denied, the containers simply stay where they are until the dispute has been decided on the merits. Should Plaintiff ultimately prevail, it will be entitled to money damages and will have a more plausible chance of recovering those damages from Defendant, since Defendant is an FSM-based corporation.

C. Likelihood of Success on the Merits

In Plaintiff’s view, this case is very easy: Plaintiff indisputably owns the containers, and there is no contractual relationship between Plaintiff and Defendant. Therefore, Plaintiff cannot be held liable for the storage fees incurred by PM&O.

Defendant’s position is that it has a lien on the containers. Defendant relies on the law of bailment and warehouseman’s law, which, Defendant concedes, is not well developed in FSM jurisprudence.

This is a very early stage in the litigation. However, Plaintiff’s complaint appears serious and non-frivolous, and the Court believes that, because there is no contract between Plaintiff and Defendant, Plaintiff has a very good chance of succeeding on the merits. See Ponape Enterprises v. Bergen, [1993] FMSC 52; 6 FSM Intrm. 286, 289 (Pon. 1993) (likelihood of success shown where movant’s position appears sufficiently sound and raises serious, non-frivolous issues).

D. Impact on Public Interest

Plaintiff contends that members of the public have an interest in enforcing the basic rule of law that recognizes the superior right of property owners to possess their property. Further, the public has an interest in ensuring that entities such as Plaintiff maximize the use of their assets.

Defendant argues that the public has an interest in maintaining a uniform tariff system, such as the one that established the price list for stevedoring and storage charges at the dock. Defendant also argues that frantically granting a temporary restraining order that cannot be undone would contravene the public interest.

This is not a matter directly affecting the public. The Court is of the opinion that any impact on the public interest, whether injunctive relief is granted or denied, would be negligible. In such circumstances,

[14FSM Intrm. 168]

extraordinary relief is not warranted.

IV.

A temporary restraining order is a drastic remedy. This Court cannot, in good conscience, grant such relief when Plaintiff has failed to make a showing of irreparable harm, and only one of the four factors - likelihood of success on the merits - weighs in Plaintiff’s favor. Thus, the motion for a temporary restraining order must be denied.

The Court will place this matter on an expedited track, in accordance with the accompanying scheduling order.

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