Ehsa v Pohnpei Port Authority [2006] FMSC 36; 14 FSM Intrm. 505 (Pon. 2006) (14 December 2006)

FEDERATED STATES OF MICRONESIA
SUPREME COURT TRIAL DIVISION
Cite as Ehsa v. Pohnpei Port Authority., [2006] FMSC 36; 14 FSM Intrm. 505 (Pon. 2006)

TIMAKIO EHSA d/b/a POHNPEI MARINE SERVICES,
Plaintiff,

vs.

POHNPEI PORT AUTHORITY [PPA], IESKE IEHSI,

individually and as General Manager of POHNPEI PORT

AUTHORITY, and BOARD OF DIRECTORS OF PPA,
Defendants.

CIVIL ACTION NO. 2006-031

ORDER DENYING VARIOUS MOTIONS BY PLAINTIFF

Andon L. Amaraich
Chief Justice

Decided: December 14, 2006

APPEARANCES:

For the Plaintiff:
Joseph S. Phillip, Esq.
P.O. Box 464
Kolonia, Pohnpei FM 96941

For the Defendants:
Michael J. Sipos, Esq.
Sipos & Berman
P.O. Box 2069
Kolonia, Pohnpei FM 96941

* * * *

HEADNOTES

[2006] FMSC 36; [14 FSM Intrm. 505]

Admiralty; Jurisdiction - Exclusive FSM Supreme Court
The FSM Supreme Court trial division has original and exclusive jurisdiction in admiralty or maritime cases but the exact scope of admiralty and maritime jurisdiction is not defined in the Constitution or elsewhere. Ehsa v. Pohnpei Port Auth., [2006] FMSC 36; 14 FSM Intrm. 505, 507-08 (Pon. 2006).

Admiralty; Jurisdiction - Exclusive FSM Supreme Court
The article XI, section 6(a) maritime jurisdiction extends to all cases which are maritime in nature. Since a maritime cause of action is one arising on the sea, ocean, great lakes, or navigable rivers, or from some act or contract concerning the commerce and navigation thereof, and when, although the plaintiffs attempt to characterize the issue as one of state law, they are essentially complaining about loss of business as a result of the penalties imposed by the port authority on the vessels resulting from the port authority's maritime-related activities, it is a maritime case and will not be remanded to state court. Ehsa v. Pohnpei Port Auth., [2006] FMSC 36; 14 FSM Intrm. 505, 508 (Pon. 2006).

Civil Procedure - Motions
An opposition to declaratory judgment motion will not be stricken because it is based on Rule 56 (summary judgment) whereas the motion is grounded in Rule 57 (declaratory judgments) when the arguments incorporated into the opposition are relevant. Ehsa v. Pohnpei Port Auth., [2006] FMSC 36; 14 FSM Intrm. 505, 508 (Pon. 2006).

Attorney and Client - Disqualification of Counsel
Disqualification of a party’s counsel is not warranted because that counsel approved for legal sufficiency the notice of intent to adopt a regulation that included, unaltered from a previous regulation, the regulatory provision at issue in the action. Ehsa v. Pohnpei Port Auth., [2006] FMSC 36; 14 FSM Intrm. 505, 508-09 (Pon. 2006).

Civil Procedure - Injunctions
When the plaintiffs, having filed multiple motions - including the motion to disqualify, which, if granted, would prolong resolution of this matter - have effectively conceded the absence of an emergency warranting a temporary restraining order, their motion for a temporary restraining order will be denied as moot. Ehsa v. Pohnpei Port Auth., [2006] FMSC 36; 14 FSM Intrm. 505, 509 (Pon. 2006).

* * * *

COURT’S OPINION

ANDON L. AMARAICH, Chief Justice:

I. Introduction

Before the Court are multiple motions by the parties. Plaintiffs have moved for (1) temporary injunctive relief, and (2) "a declaratory judgment order," and to (3) remand this matter to the Pohnpei Supreme Court, (4) disqualify Defendants' counsel, and (5) strike Defendants' opposition to Plaintiffs' motion for declaratory judgment order. Defendants have moved to dismiss and seek double sanctions pursuant to Rule 11 of this Court's Rules of Civil Procedure. The Court hereby denies Plaintiffs' motions to remand, disqualify opposing counsel, and strike Defendants' opposition and directs briefing by Defendants in response to Plaintiffs' pending motion for injunctive relief.

[14 FSM Intrm. 506]

II. Facts and Procedural History

This case is the fifth in a series of cases - all having similar facts and issues - filed by Plaintiffs against Defendant in less than two years. Plaintiff PMS is the agent for approximately eighty commercial fishing vessels that enter Pohnpei's port. Pursuant to an "FSM Access Arrangement," PMS provides all necessary services to the fishing vessels that call on Pohnpei’s port. These services include, but are not limited to, the processing of payment for port fees and charges incurred by the owners of the vessels and the provision of supplies and cash advances. Defendant Pohnpei Port Authority (PPA) is a statutorily created entity with sole authority over the Pohnpei port.

On September 25, 2006, Plaintiffs filed, in the Pohnpei Supreme Court, a "complaint for declaratory judgment," alleging that Defendants had begun assessing fees and denying port entry to vessels having accounts more than thirty days past due. Plaintiffs further alleged that Defendants exceeded the scope of their statutorily prescribed rulemaking authority by promulgating the regulation (PPA Seaport Division Regulation 10.1001) that gave Defendants authority to assess the penalties. Plaintiffs also filed a motion for temporary restraining order and preliminary injunction.

On October 6, 2006, Defendants filed a petition for removal, on the ground that the issues raised in the complaint directly relate to maritime matters and therefore fall within this Court's exclusive admiralty jurisdiction. See FSM Const. art.§ 6(a). PlainPlaintiffs mov r to remand, arguing that the sole issue presented - the legality of Regulation 10.1001 - matter of state law and not a maritime matter.

On October 16,2006, Defendants fnts filed a Rule 12(b)(6) motion to dismiss, arguing that the scope of rule making authority granted PPA pursuant to 2L-224-91 encompasses promulgating rules for the collection of fees and assessment of penalties. On October 23, 2006, Plaintiffs filed a "motion for a declaratory judgment order." This motion seeks the same relief sought in the complaint (a declaration that Regulation 10.1001 is ultra vires or unlawful) but is in the form of an emergency motion for summary relief.

Defendants responded to Plaintiffs’ motion for declaratory judgment order on November 2, 2006. In Plaintiffs' reply, filed on November 13, 2006, Plaintiffs moved to strike Defendants' opposition on the ground that it had been improperly made. On November 17, 2006, Defendants filed a combined opposition to Plaintiffs' motion to strike and motion for fee sanctions under Rule 11.

On November 27, 2006, Plaintiffs moved to disqualify PPA's counsel Michael Sipos, Esquire, on the ground that Sipos assisted in drafting the Seaport Regulations and is a material witness. In their November 30, 2006, response, Defendants filed a second motion for Rule 11 sanctions, based on the filing of the motion to disqualify.

III. Discussion

A. Plaintiffs' Motion to Remand

Plaintiffs move to remand this matter to State court on the ground that the issue presented - the legality of Regulation 10.1001 - is one of State law. In other words, PMS contends that PPA, in promulgating the regulation, exceeded its authority under S.L. No. 2L-224-91. PPA responds that, regardless of characterization, this is a maritime matter.

Article XI, section 6(a) of the FSM Constitution provides that the trial division of this Court "has original and exclusive jurisdiction in . . . admiraltmaritime cases." es." As the Court previously noted, the exact scope of admiralty and maritime jurisdiction is not defined in the Constitution or elsewhere.

[14 FSM Intrm. 507]

Weilbacher v. Kosrae, [1988] FMKSC 10; 3 FSM Intrm. 320, 323 (Kos. S. Ct. Tr. 1988). This Court has held, for example, that the following types of claims fall within the purview of article XI, section 6(a): a seaman's contract claim against the owner of the vessel on which he served, Lonno v. Trust Territory (I), 1 FSM Intrm. 53, 68-71 (Kos. 1982); a dispute arising from injury to a passenger on a vessel that was thirty miles from Kosrae, Weilbacher, 3 FSM Intrm. at 323; and the question of enforceability of ship mortgages, Federal Bus. Dev. Bank v. S.S. Thorfinn, [1990] FMSC 20; 4 FSM Intrm. 367, 376 (App. 1990). Thus far, the Court has not had occasion to render a decision on whether the issue presented here invokes the Court's admiralty jurisdiction.

In Thorfinn, this Court held that the maritime jurisdiction granted by article XI, section 6(a) extends to "all cases which are maritime in nature." Thorfinn, 4 FSM Intrm. at 374. A maritime cause of action is one "arising on the sea, ocean, great lakes, or navigable rivers, or from some act or contract concerning the commerce and navigation thereof." Black's Law Dictionary 968 (6th ed. 1990). Although Plaintiffs attempt to characterize the issue as one of State law, Plaintiffs are essentially complaining about alleged injury (loss of business as a result of the penalties imposed by PPA on the vessels) resulting from PPA's maritime-related activities. Thus, the Court must deny Plaintiffs' motion to remand this matter to State court.

B. Plaintiffs' Motion to Strike

In their November 13, 2006, reply brief, Plaintiffs urged the Court to "strike out defendant's opposition and deem[] the motion for declaratory judgment order unopposed." According to Plaintiffs, Defendants opposition to the motion for declaratory judgment order is based on Rule 56 (summary judgment) of this Court's Rules of Civil Procedure, whereas Plaintiffs' motion is grounded in Rule 57 (declaratory judgments). Thus, Defendants' opposition brief is not responsive to Plaintiffs' motion.

Notwithstanding the fact that the parties invoke different rules with regard to the motion for declaratory judgment order, the arguments incorporated into Defendants' opposition are relevant. Thus, the Court will not strike Defendants' opposition brief.

C. Plaintiffs' Motion to Disqualify

Plaintiffs move to disqualify Michael Sipos, who is PPA's General Counsel, on the ground that Sipos was instrumental in the drafting and review of certain amendments to PPA's Seaport Division Rules and Regulations and Sipos will, therefore, be a necessary witness at trial. The proof produced by Plaintiffs of Sipos’s involvement in the drafting and review of the amendments is a March 9, 2005 "Public Notice" issued by PPA. The notice informed of certain amendments to the Seaport Regulations and invited the public to make written comments. Defendant Ieske lehsi, PPA's General Manager, signed the notice. Sipos approved it for legal sufficiency. Plaintiffs' position is that the State Attorney General, and not Sipos, should represent PPA in this matter.

Defendants argue that Sipos neither drafted nor reviewed Regulation 10.1001, which is the only regulation at issue here. Although Sipos approved the March 9, 2005 notice, he did not approve the regulations attached to the notice. Moreover, Regulation 10.1001 was promulgated in 1995, before Sipos arrived in the FSM. Also, the State Attorney General has primary responsibility for drafting and approving the regulations.

Defendants further argue that, even if Sipos had drafted and reviewed the regulation, that would not be grounds for disqualification, since both the attorney-client and work product privileges would be violated if Sipos were called to testify. Additionally, because all of PPA's management personnel and present or former Board members involved are available to testify, Sipos's testimony is not necessary.

[14 FSM Intrm. 508]

The Court is not convinced that disqualification is warranted. Plaintiffs' own exhibits show that the amendments attached to the notice that Sipos approved in March 2005 did not involve Regulation 10.1001. The amendments are underlined, and section 10.1001 has no underlining. Moreover, the Court is not persuaded that Sipos's involvement with the regulation would warrant disqualification. The motion is denied.

IV. Conclusion

In sum, Plaintiffs' motions to remand, strike Defendants' opposition, and disqualify Michael Sipos are denied.

Included in the motions pending before the Court is Plaintiffs' motion for temporary restraining order/preliminary injunction. Plaintiffs, having filed multiple motions - including the motion to disqualify, which, if granted, would prolong resolution of this matter - have effectively conceded the absence of an emergency warranting a temporary restraining order. The motion for temporary restraining order is, therefore, denied as moot. The Court will schedule a hearing on Plaintiffs' motions for preliminary injunction and for a declaratory judgment order, as well as Defendants' motions to dismiss and for Rule 11 sanctions. If Defendant intends to respond in writing to the motion for preliminary injunction, Defendant shall do so within ten (10) days of the date of this order.

* * * *