Kallop v Pohnpei Government [2011] FMSC 60; 18 FSM Intrm. 130 (Pon. 2011) (28 December 2011)

FSM SUPREME COURT TRIAL DIVISION

CIVIL ACTION NO. 2009-060

VINCENT KALLOP and VITUS SUSAIA,
Plaintiffs,

vs.

POHNPEI GOVERNMENT,
Defendant.
__________________________________________ )

ORDER DENYING DECLARATORY JUDGMENT

Dennis K. Yamase
Associate Justice

Hearing: May 21, 2010
Decided: December 28, 2011

APPEARANCES:

For the Plaintiffs: Salomon M. Saimon, Esq.

Micronesian Legal Services Corporation

P.O. Box 129

Kolonia, Pohnpei FM 96941

For the Defendant: Scott G. Garvey, Esq.

Pohnpei Attorney General

Pohnpei Department of Justice

P.O. Box 1555

Kolonia, Pohnpei FM 96941

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HEADNOTES

Civil Procedure - Declaratory Relief
The power to issue declaratory judgments is within the FSM Supreme Court's judicial power pursuant to FSM Const. art. XI, § 1, and the court may ise juse jurisdiction over an action seeking a declaratory judgment so long as there is a case within the meaning of FSM Const. art. XI, § 6(b). Kallop hnpei, /u>[2011] FMSC 60; , 18 FSM Intrm. 130, 133 (Pon. 2011).

Constitutional Law - Ex Post Facto Laws
Ex post facto laws are laws passed after the occurrence of a fact or the commi of an act, which thereby ceby changes the legal consequences of the fact or act. An ex post facto law seeks to impose punishment on individuals for past acts. Kallop v. Pohnpei, [2011] FMSC 60; 18 FSM Intrm. 130, 133 (Pon. 2011).

Constitutional Law - Case or Dispute - Standing
Standing and justiciability are threshold issues going to the FSM Supreme Court's subject matter jurisdiction and thus are addressed first. Kallop v. Pohnpei, [2011] FMSC 60; 18 FSM Intrm. 130, 133 (Pon. 2011).

Civil Procedure - Dismissal; Constitutional Law - Case or Dispute - Standing
Standing must be found for each count of a complaint or that count will be dismissed. Kallop v. Pohnpei, [2011] FMSC 60; 18 FSM Intrm. 130, 133 (Pon. 2011).

Constitutional Law - Case or Dispute - Ripeness
Ripeness is also a threshold justiciability issue. For the FSM Supreme Court to exercise its jurisdiction, the issue raised must be ripe for adjudication. A matter is ripe when there is an actual, present controversy not merely a hypothetical or speculative conflict. Kallop v. Pohnpei, [2011] FMSC 60; 18 FSM Intrm. 130, 133 (Pon. 2011).

Constitutional Law - Case or Dispute - Ripeness
When the plaintiffs allege a possible, theoretical injury, but have asserted no real injury to them and when they have also not alleged a threatened injury, they have not alleged any actual harm to them under the aforementioned circumstances, and therefore as to this contention, the matter is not ripe for adjudication. Kallop v. Pohnpei, [2011] FMSC 60; 18 FSM Intrm. 130, 133 (Pon. 2011).

Constitutional Law - Due Process
The fundamental concept of procedural due process proscribes the government from stripping its citizens of property in an unfair or arbitrary manner. Kallop v. Pohnpei, [2011] FMSC 60; 18 FSM Intrm. 130, 134 (Pon. 2011).

Constitutional Law - Equal Protection
The FSM Constitutional guarantees of equal protection apply if the discrimination is based on the individual's membership in one of the classes enumerated in the FSM Const. art. IV, § 4, or if the discrimon affe affects a "fundamental right." The law is then subject to a strict scrutiny review, under which it will be upheld only if the government can demonstrate the classification upon which that law is based bears a cl a close rational relationship to some compelling governmental interest. But if the law does not concern an enumerated class or a fundamental right, the question becomes whether the classification is rationally related to a legitimate governmental purpose. Kallop v. Pohnpei, [2011] FMSC 60; 18 FSM Intrm. 130, 134 (Pon. 2011).

Constitutional Law - Pohnpei - Due Process
Under the Pohnpei Constitution, substantive due process relates to the constitutional guarantee that no person shall be deprived of his life, liberty, or property for arbitrary reasons. Such a deprivation is supportable constitutionally only if the conduct from which the deprivation flows is prescribed by reasonable legislation. The legislation must be enacted within the scope of legislative authority and be reasonably applied for a purpose consonant with the purpose for which it is enacted. Kallop v. Pohnpei, [2011] FMSC 60; 18 FSM Intrm. 130, 134 (Pon. 2011).

Constitutional Law - Equal Protection
The rational basis standard will be applied to an analysis of a plaintiff's equal protection claims about the regulation of alcohol sales. A rational basis analysis requires statutes restricting alcohol to have a legitimate, reasonable purpose, to not be arbitrary, and the legislation carries out the purposes prescribed. Kallop v. Pohnpei, [2011] FMSC 60; 18 FSM Intrm. 130, 134 (Pon. 2011).

Constitutional Law - Due Process; Constitutional Law - Equal Protection
A statute that restricts the sale of alcohol during the Christmas and New Year's holidays serves legitimate governmental purposes in the areas of the public health and welfare and the allowance of on-sale alcohol purchases during these holidays also support the operations of the hotels and cabarets who have a demand for such sales from its customers during the holidays. This legislation carries out the purposes for which the statute was amended by further regulating the sale of alcohol in a manner which promotes the State's legitimate governmental objectives. This statute regulating and restricting alcohol is within the scope of legislative authority, has a reasonable purpose, is not arbitrary, and carries out the purposes prescribed and is thus not unconstitutional. Kallop v. Pohnpei, [2011] FMSC 60; 18 FSM Intrm. 130, 135-36 (Pon. 2011).

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COURT'S OPINION

DENNIS K. YAMASE, Associate Justice:

I. Background

On May 11, 2010, the Plaintiffs Vincent Kallop and Vitus Susaia (Kallop et al.) filed a Petitioners' Brief seeking a declaratory judgment. The Defendant Pohnpei Government (Pohnpei) filed a Defendant's Declaratory Judgment Brief on May 19, 2010. On May 21, 2010, the Court convened a hearing and heard arguments from the parties. The Plaintiffs Kallop et al. are represented by Salomon Saimon, Esq. of the Micronesian Legal Services Corporation and the Defendant Pohnpei Government is represented by Pohnpei Attorney General, Scott G. Garvey, Esq. The Court has reviewed and considered the filings and arguments, and issues the following order.

On October 9, 2009, the Pohnpei Legislature passed into law S.L. No. 7L-47-09. It amended 66 Pon. C. § 2-116 (part of the Pohnpei Alcoholic Beverages Control Act) which regulates when and how alcohol is purchased on Pohnpei.[1] The amended law differentiates the on-sale establishments and the off-sale establishments in four ways:

1) On-sale establishments may sell alcohol until 12:00 a.m. on weekdays and 1:00 a.m. on the weekends. Id.

2) Cabaret sale style establishments may sell alcohol until 3:00 a.m. Id.

3) Off-sale establishments cannot sell alcohol past 10:00 p.m. Id.

4) On-sale establishments may sell alcohol on December 24, 25, 31, and January 1. Off sale establishments are barred from the sale of alcohol on those days. Id.

As consumers and sellers of alcohol, the Plaintiffs, Kallop et al., assert that the subject law violates their civil rights and is unconstitutional.[2]

II. Analysis

Kallop et al. argue that the amended law is an ex post facto law and violates due process and the equal protection clauses of both the FSM and Pohnpei Constitutions. At the hearing, Kallop et al. abandoned their previous argument regarding the local options for municipal governments.

The power to issue declaratory judgments is within the judicial power of this Court pursuant to FSM Const. art. XI, § 1. This Cmay exercise jurisjurisdiction over an action seeking a declaratory judgment so long as there is a case within the meaning of FSM Const. art. XI, § 6(b). [1984] FMSC 2; , 1 FSM Intrm. 389, 400 (Pon. 1984).

A. Ex Post Facto Law

Ex post facto laws are laws passed after the occurrence fact or the commission of a of an act, which thereby changes the legal consequences of the fact or act. Black's Law Dictionary 580 (6th ed. 1990). Ex post facto laws are illegal in the FSM and in Pohnpei. FSM Const. art. IV, § 11; Pon. Const. a, §C 7. An ex post f/i> law slaw seeks to impose punishment on individuals for past acts. Robert v. MoriSM Intrm. 394, 401 (App. 1994).

Kallop et al. argue that because the effective tive date of the amendment was before the date the amendment was signed into law, it is possible that they might be punished for subsequently prohibited acts which fall between the two dates. Pls.' Br. at 5.

Standing and justiciability are threshold issues going to the Court's subject matter jurisdiction and thus are addressed first. Eighth Kosrae Legislature v. FSM Dev. Bank, [2003] FMSC 27; 11 FSM Intrm. 491, 496 (Kos. 2003). Standing must be found for each count of a complaint or that count will be dismissed. Ripeness is also a threshold justiciability issue. For the Court to exercise its jurisdiction, the issue raised must be ripe for adjudication. A matter is ripe when there is an actual, present controversy not merely a hypothetical or speculative conflict. Sipos v. Crabtree, [2005] FMSC 37; 13 FSM Intrm. 355, 366 (Pon. 2005).

Kallop et al. allege a possible, theoretical injury, but have asserted no real injury to them. They have also not alleged a threatened injury. Pohnpei State asserts that they have made efforts to assure the public that no prosecutions will be made under the circumstances identified by Kallop et al.

In 1997, an Oregon court did not make a decision regarding whether a law requiring previously convicted sex offenders to relocate was an ex post facto law, due to the fact that the plaintiff had suffered no harm and had not been forced to move; the court deciding that the issue was not ripe. Gress v. Board of Parole & Post-Prison Supervision, 924 P.2d 329 (Or. Ct. App. 1997), as cited in Noble v. Board of Parole & Post-Prison Supervision, 964 P.2d 990 (Or. 1998). Similarly, in this matter, Kallop et al. have not alleged any actual harm to them under the aforementioned circumstances, and therefore as to this contention, the matter is not ripe for adjudication.
B. Due Process and Equal Protection Challenges

The due process clause of the FSM Constitution provides, "a person may not be deprived of life, liberty or property without due process of law . . . ." FSM Const. IV, § 3. The due proclause of thef the Pohnpei Constitution provides, "No person may be deprived of life, liberr property without due process of law." Pon. Const. art. 4, § 4.

The >The equal pral protection clause of the FSM Constitution provides, "Equal protection of the laws may not be denied or impaired on account of sex, race, ancestry, national origin, age, or social status." FSM" FSM Const. art. IV, § 4.

The equal protectotection clause of the Pohnpei Constitution provides, "No law or other government action may deny or impair the equal rights of all persons on account of gender, race, ancesnational origin, religion, ion, language, or social status. No person may be denied the equal protection of the law." Pon. Const. art. 4, § 3.

undamental ctal concept of procedural due process proscribes the government from stripping its citizens of property in an unfair or arbitrary manner. Suldan v. FSM (II), [1983] FMSC 14; 1 FSM Intrm. 339, 354-55 (Pon. 1983). While Kallop et al. asserted that the changes made by the challenged statute were enacted without public hearing, there is no specific allegation that the law was enacted in violation of the Pohnpei constitutional or statutory requirements. Pls.' Br. at 3.

Kallop et al. provided no supportable argument or evidence that off-sale alcohol retailers should be considered a suspect class or that selling and buying alcohol is a fundamental constitutional right under either the FSM or Pohnpei constitutions. Pls.' Br. at 1-10. Pohnpei State asserts that purchase, sale, and consumption of alcoholic beverages is a privilege and not a right. Def.'s Br. at 4.

The FSM Constitutional guarantees of equal protection apply if the discrimination is based on the individual's membership in one of the classes enumerated in the FSM Const. art. IV, § 4, orhe discrimination affe affects a "fundamental right." The law is then subject to a strict scrutiny review, under which it will be upheld only if the government emonstrate that the classification upon which that law is b is based bears a close rational relationship to some compelling governmental interest. But if the law does not concern an enumerated class or a fundamental right, the question becomes whether the classification is rationally related to a legitimate governmental purpose. FSM Social Sec. Admin. v. Weilbacher, [1995] FMSC 22; 7 FSM Intrm. 137, 146 (Pon. 1995).

Under the Pohnpei Constitution, substantive due process relates to the constitutional guarantee that no person shall be deprived of his life, liberty, or property for arbitrary reasons. Such a deprivation is supportable constitutionally only if the conduct from which the deprivation flows is prescribed by reasonable legislation. The legislation shall be enacted within the scope of legislative authority and be reasonably applied for a purpose consonant with the purpose for which it is enacted. Paulus v. Pohnpei, [1987] FMPSC 8; 3 FSM Intrm. 208, 221 (Pon. S. Ct. Tr. 1987).

The Court will apply the rational basis standard to an analysis of Kallop et al.'s equal protection claims. Paulus v. Pohnpei, [1987] FMPSC 8; 3 FSM Intrm. 208 (Pon. S. Ct. Tr. 1987). A rational basis analysis requires statutes restricting alcohol to have a legitimate, reasonable purpose, to not be arbitrary, and the legislation carries out the purposes prescribed. Id. at 217.

The purchase and sale of alcohol is a highly restricted activity in the FSM. See Truk Dist. Code, tit. 3, and Truk D.L. No. 24-23; Kos. S.C., tit. 12 (Education and Health), ch. 14 (Alcoholic Drink) (1997); 30 (Alcoholic Beverages) Y.S.C. chs. 1 to 4 (2000); 66 Pon. C. § 2-101 et seq.

The Legislature finds that the purchase, obtaining, use, and consumption of tobacco products, alcoholic beverages, and narcotic drugs are injurious to the health and welfare of the citizens of Pohnpei, are disruptive of the social fabric of our society, and are an unnecessary burden on the limited financial resources of Pohnpeian families.

66 Pon. C. § 1-101 (2

The Pohe Pohnpei State Code permits each local government within Pohnpei to determine whether or not to permit the manufacture, sale, and consumption of alcoholic beverages within its jurisdiction. 66 Pon. C. § 2-103 (2006).

Kallop et al. argue that there is no reasonable State purpose which permits on-sale establishments the ability to sell alcohol on days and at times when off-sale establishments are not permitted to do so. Pls.' Br. at 8-9. Kallop et al. cite case law to support this argument. The Court's review of the cases cited by both parties indicate that the cases cited by Kallop et al. are the minority position in the states of the United States (U.S.) and are mostly from the State of Nebraska.[3] The Court may examine decisions from courts outside the FSM for comparison, but are not bound by such decisions and is required to look to court decisions within the FSM and its states first and primarily. FSM Const. art. XI, § 11 (Judicial nce Clause).

In the U.S., alcohol laws vary greatly from state to state and county to county within a state. In many states on-sale establishments, i.e. restaurants and bars, and off-sale establishments, i.e. grocery stores and small markets, are not considered similarly situated entities and are regulated separately. Wine & Spirit Retailers, Inc. v. Rhode Island, [2005] USCA1 252; 418 F.3d 36 (1st Cir. 2005); People against Section 561, 501, Inc. v. Department of Business Reg., 587 So.2d 644 (Fla. Dist. Ct. App. 1991) (Florida appeals court held that there are differences between on-sale and off-sale establishments and they may be taxed differently.)

At an off-sale establishment, alcohol can be bought in large quantities and its consumption is not controlled by the establishment; restricting its purchase late at night and on days when alcohol consumption is high meets legitimate governmental purposes as outlined in 66 Pon. C. § 1-101 (2006). ei State cone contends and the Court concurs, that the restrictions on the sale of alcohol during the Christmas and New Year's hys serves legitimate governmental purposes in the areas of the public health and welfare. Tre. The allowance of on-sale alcohol purchases during these holidays also support the operations of the hotels and cabarets who have a demand for such sales from its customers during the holidays.

On-sale and off-sale establishments are two different kinds of businesses. An on-sale establishment is often in the hospitality business, where as the off-sale establishment operates more as a commercial retail business. Both types of businesses often operate at different times, cater to different customers, serve different purposes in the community, and do not typically compete against each other for business. In order to promote the health and welfare of the people within its territory and to assist the hospitality businesses it is reasonable for Pohnpei State to regulate the sale of alcohol from these two types of businesses independently and differently.

Pohnpei State further contends that there are significant public safety and economic development of the hospitality and tourist industry governmental objectives for the statute. Def.'s Br. at 4. The Court finds that these are also important and legitimate governmental objectives for the statute, as amended. The Court finds that the legislation carries out the purposes for which the statute was amended by further regulating the sale of alcohol in a manner which promotes Pohnpei State's legitimate governmental objectives.

The Court determines that the challenged statute further regulating and restricting alcohol to be within the scope of legislative authority, to have a reasonable purpose, is not arbitrary, and that the legislation carries out the purposes prescribed.

III. Conclusion

For all of the aforementioned reasons, Kallop et al.'s petition for declaratory judgment to declare the challenged Pohnpei State statute unconstitutional is hereby denied. In light of the Court's decision, both parties are hereby ordered to inform the Court of their position on what further proceedings, if any, need to be undertaken in this matter. The parties shall file their respective positions by Friday, January 27, 2012.

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^[1] Previously, on-sale establishments, establishments where alcohol is bought and consumed on the premises, and off-sale establishments, establishments where alcohol is bought but not consumed on the premises, had the same restrictions in the sale of alcohol. 66 Pon. C. § 2-116.

^[2] As part of this matter, the Plaintiffs had also filed for a Temporary Restraining Order (TRO) on December 23, 2009. An opposition to the TRO was filed by Pohnpei State on December 29, 2009. Following a hearing, the TRO was denied on December 31, 2009.

^[3] Casey’s General Stores Inc. v. Nebraska Liquor Control Comm’n, 369 N.W.2d. 85 (Nebr.1985) (A law that only allowed a person to have only two alcoholic beverage licenses with exceptions for certain businesses, was declared unconstitutional by the Nebraska Supreme Court due to the number of exceptions that had been added to the law.); Gas ‘N Shop Inc. v. Nebraska Liquor Control Comm’n, 427 N.W.2d 784 (Nebr. 1988) (Nebraska court found that dual businesses must be treated the same in regards to issuing liquor licenses); Bergmann v. City of Melrose, 420 N.W.2d 663 (Nebr. 1988) (Court upheld the denial of Plaintiff’s application to renew his liquor license because of unpaid real estate taxes and because the holder had failed to meet a condition of the license); Hy-Vee Food Stores, Inc. v. Nebraska Liquor Control Comm’n, 497 N.W.2d 647 (Nebr. 1993) (Nebraska Supreme Court ruled that a grocery store chain had been improperly denied off-sale liquor licenses).