Pohnpei Port Authority v Pohnpei [2008] FMSC 29; 15 FSM Intrm. 563 (Pon. 2008) (7 April 2008)

FSM SUPREME COURT TRIAL DIVISION
CIVIL ACTION NO. 2008-013

POHNPEI PORT AUTHORITY, PPA'S BOARD OF DIRECTORS, IESKE IEHSI, in his official capacity as PPA's General Manager, and MICHAEL J. SIPOS, individually, and as PPA's General Counsel,
Plaintiffs,

vs.

POHNPEI STATE GOVERNMENT, JOHN EHSA, in his official capacity as Governor of Pohnpei State, and LORRIE JOHNSON-ASHER, in her official capacity as Acting Attorney General for Pohnpei State,
Defendants.
__________________________________________________

SUPPLEMENTAL TEMPORARY RESTRAINING ORDER DENIED; MEMORANDUM

Dennis K. Yamase
Associate Justice

Hearing: March 21, 2008
Decided: April 7, 2008

APPEARANCES:

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

For the Defendants: Lorrie Johnson-Asher, Esq.
L.M. Bacalando, Esq.
Assistant Attorneys General
Pohnpei Department of Justice
P.O. Box 1555
Kolonia, Pohnpei FM 96941

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HEADNOTES

Civil Procedure  Injunctions

When considering whether to afford an applicant the remedy of a temporary restraining order, the court considers four factors: 1) the possibility of immediate and irreparable injury in the event the TRO is not issued; 2) the balance of potential injury to the parties; 3) the likelihood of success on the merits; and 4) the impact of the requested action on the public. Pohnpei Port Auth. v. Pohnpei, [2008] FMSC 29; 15 FSM Intrm. 563, 565 (Pon. 2008).

Civil Procedure  Injunctions

When, if the Governor should remove any Pohnpei Port Authority board member without cause, that member would have recourse in the courts and thus the injury in that case would not necessarily be irreparable; when the Governor does not have authority to terminate PPA's general manager or general counsel because the authority to terminate PPA's general manager rests by law with the PPA Board and the authority to terminate PPA's general counsel rests by law with the PPA general manager; and when, if the Governor demands that the PPA Board do this, those with the legal authority to take such actions may simply refuse to do so, the threatened injuries  the Governor forcing the PPA Board to summarily remove the PPA general manager and general counsel and/or forcing the Board to resign under threat of removing the Board and in retaliation of being sued, thereby disrupting PPA's operations  are not immediate, concrete or irreparable, especially since the PPA Board has decided that they will not submit their resignations and they will not take any action toward terminating the general manager and the general counsel. Pohnpei Port Auth. v. Pohnpei, [2008] FMSC 29; 15 FSM Intrm. 563, 566 (Pon. 2008).

Civil Procedure  Injunctions

When the threatened injuries set forth in the plaintiff's supplement are not sufficiently certain, immediate, and irreparable to justify the injunctive relief requested and the other three factors for a TRO do not sufficiently support the issuance of any further injunctive relief in addition to the TRO already issued and extended, further injunctive relief pursuant to the supplement will be denied. Pohnpei Port Auth. v. Pohnpei, [2008] FMSC 29; 15 FSM Intrm. 563, 567 (Pon. 2008).

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COURT'S OPINION

DENNIS K. YAMASE, Associate Justice:

I. Background and Preliminary Matters

On March 24, 2008, the court entered a Temporary Restraining Order (TRO) in this matter enjoining the operation of Executive Directive No. 01-2008, with relation to the plaintiffs. The executive directive provided that all legal representation of Pohnpei State and its executive agencies shall be undertaken by the Pohnpei Attorney General's Office. It was determined that the executive directive, if enforced as to the plaintiffs, would be in conflict with 32 Pon. C. § 1-111, which vests auty fory for engaging counsel to represent the Pohnpei Port Authority ("PPA") with the PPA's general manager. The general manager is in turn appointed by PPA's Boo serve at the Board's pleasure. 32 Pon. C. § 1-10;1-109.

Prior toor to the court's issuance of the TRO on March 24, 2008, the plaintiffs on March 20, 2008, filed a supplement to its original March 12, 2008, application for a temporary restrainrder and injunctive relief lief that sought additional injunctive relief based on events allegedly occurring on March 19, 2008. These allegations were further supported by the testimony of Mr. Diaz Lorrin, who is the Chairman of the PPA Board of Directors, at the March 21, 2008 hearing on PPA's motions for a TRO.

At that hearing, the court heard both testimony and argument relating to the March 12 and 20, 2008, applications for injunctive relief. The court advised the parties at the March 21, 2008 hearing that the court would first rule on the March 12, 2008, TRO application, which it did on March 24, 2008, and that the defendants would have until Thursday, March 27, 2008, to file any written response to the plaintiff's supplementary request for injunctive relief. The defendants filed a Motion for Enlargement of Time and a Supplemental Opposition to Motion for Temporary Restraining Order and Preliminary Injunction on March 28, 2008. There being no showing of excusable neglect, the court denied the defendants' motion for enlargement on April 1, 2008.

The plaintiffs filed a Motion to Extend Application of Temporary Restraining Order Pending Hearing on Motion for Preliminary Injunctive Relief; Submission of Affidavit Supporting Supplemental TRO Request on March 28, 2008. The extension was sought for the TRO issued by the court on March 24, 2008. The court having determined that good cause exists and with consultation and no opposition by the defendants, granted this motion on April 1, 2008, with the TRO extended to April 21, 2008.

The supplement presents three issues, all of which are based on events that allegedly occurred on March 19, 2008. According to both the recitation presented in the supplement, and the testimony of Chairman Lorrin, the Governor called a meeting with PPA for March 19, 2008, the ostensible purpose of which, was to discuss the PPA's budget. At the meeting the Governor announced that the PPA Board was to immediately terminate both its general manager and its general counsel. In the event that this did not occur, all PPA Board members were to submit their resignations to the Governor by Monday, March 24, 2008. Further, in the event that the PPA Board members did not submit their resignations as requested, the Governor indicated that all members would be removed from the Board. The alleged reason given for the Governor's demands was that PPA had sued him.

Following the meeting with the Governor, the PPA Board met and decided that they would not take action toward the termination of the general manager and the general counsel, and that they would not submit their resignations. The testimony taken also disclosed that the terms of the Board members have already passed.

Plaintiffs challenge three of the Governor's actions in its supplemental request for injunctive relief: 1) his demand that the PPA Board discharge its general manager; 2) his demand that the Board discharge its general counsel; and 3) his demand that all Board members resign if they did not discharge these two individuals.

II. Analysis for Four Factors for TRO

The court considers four factors when considering whether to afford an applicant the remedy of a TRO. Those four factors are: 1) the possibility of immediate and irreparable injury in the event the TRO is not issued; 2) the balance of potential injury to the parties; 3) the likelihood of success on the merits; and 4) the impact of the requested action on the public. Ambros & Co. v. Board of Trustees, [2003] FMSC 65; 12 FSM Intrm. 124, 127 (Pon. 2003).

A. Immediate and Irreparable Injury

The plaintiffs assert that they will be immediately and irreparably injured if the Governor forces the PPA Board to summarily remove the PPA general manager and general counsel and/or forces the Board to resign under threat of removing the Board and in retaliation of being sued by the plaintiffs, thereby disrupting PPA's operations. At the March 21, 2008 hearing there was a showing that the alleged demands were made by the Governor.

The removal of the general manager is governed by section 1-109 of Title 32 of the Pohnpei Code that provides that PPA's general manager "serve[s] at the pleasure of the Board." Thus, the decision of whether or not to discharge the general manager rests with the PPA Board by law.

With regard to the Governor's demand that the PPA Board discharge the general counsel. The PPA's choice of legal counsel is one that the PPA's general manager makes pursuant to 32 Pon. C. § 1-111. That section states in pertinent part that: "The general manager shall, upon consultation with the Board, appoint a comptroller and general counsel, both of whom shall serve and may be removed for good cause by the gl manager . . ." The TRO prRO previously entered on March 24, 2008 already forecloses the defendants from interfering with the contractual relationship between PPA and its general counsel.

The Governor demanded that all of the PPA Board members resign if they do not discharge the general manager and general counsel, and if they do not resign they will be removed. According to PPA's submissions and the testimony taken, the PPA Board members have no intention of taking any action toward terminating the general manager and general counsel, nor of resigning their Board positions.

The Governor may not remove PPA Board members unless he has cause to do so. 32 Pon. C. § 1-1ovides in pertinent part part that "[a] Board member may only be removed for cause either by the governor or by two-thirds vote of the remaining members of the Board." At this point, there is dication that the members oers of the PPA Board intend to resign in the light of the Governor's demand or have been removed in violation of applicable law.

Further, if the Governor should remove any PPA Board member without cause, that member would have recourse in the courts and thus the injury in that case would not necessarily be irreparable. The possible disruption to the operations of the PPA is a possibility, but the effects of any transition in PPA Board membership is a situation faced with any entity when board membership is in a state of transition and does not necessarily constitute the type of injury justifying injunctive relief.

Where the authority to terminate the general manager rests by law with the PPA Board and where the authority to terminate the general counsel rests by law with the PPA general manager, the Governor does not have authority to terminate the general manager or general counsel. If the Governor demands that the PPA Board does this, those with the legal authority to take such actions may simply refuse to do so. With regard to the PPA Board, the Governor may remove them only for cause.

Under these circumstances, the injuries here are not immediate, concrete or irreparable, especially where the PPA Board has decided that they will not take any action toward terminating the general manager and the general counsel, and will not submit their resignations.

B. Balance of Injuries to Parties

The potential injury to the plaintiffs run to the possible wrongful removal of the PPA Board and subsequent disruption of PPA operations, but the Governor may only remove the PPA Board members for cause. No apparent injury flows to the defendants.

C. Possible Success on the Merits

The possible success on the merits for the allegations in the supplement are difficult to determine and evaluate at this stage of the proceedings and thus favors neither party.

D. Public Interest

The overall public interest is for the adherence to the law governing the PPA's operations and there is further public interest to assure that the operations of the PPA are not disrupted. There is also a public interest in respecting the Governor's authority under the law to remove the Board members for cause.

III. Decision on Temporary Restraining Order

The injuries alleged by the plaintiffs to justify the issuance of a TRO as set forth in their March 20, 2008 Supplement to Motion for Temporary Restraining Order and Preliminary Injunctive Relief and from Chairman Lorrin's testimony heard at the March 21, 2008 TRO hearing, are not sufficiently certain, immediate, and irreparable to justify the injunctive relief requested. The overall circumstances and the other three factors for the TRO do not sufficiently support the issuance of any further injunctive relief in addition to the TRO issued on March 24, 2008 and extended on April 1, 2008. Further injunctive relief pursuant to the supplement is therefore denied.

The hearing on plaintiffs motion for a preliminary injunction on the first TRO is hereby set for Friday, April 18, 2008 at 9:30 a.m.

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