Chuuk Health Care Plan v Chuuk Public Utility Corporation [2012] FMSC 35; 18 FSM Intrm. 409 (Chk. 2012) (14 September 2012)

FSM SUPREME COURT TRIAL DIVISION

CIVIL ACTION NO. 2012-1030

CHUUK HEALTH CARE PLAN,
Plaintiff,

vs.

CHUUK PUBLIC UTILITY CORPORATION,
Defendant.
__________________________________________

MEMORANDUM AND ORDER DISMISSING CASE

Martin G. Yinug
Chief Justice

Decided: September 14, 2012

APPEARANCES:

For the Plaintiff: Johnny Meippen, Esq.

P.O. Box 705

Weno, Chuuk FM 96942

For the Defendant: Kasio Mida, Jr., Esq.

Ramp & Mida Law Firm

P.O. Box 1480

Kolonia, Pohnpei FM 96941

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HEADNOTES

Civil Procedure - Motions
By rule, the court deems failure to oppose a motion as consent to the motion, but even then the court still needs good grounds before it can grant an unopposed motion. Chuuk Health Care Plan v. Chuuk Public Utility Corp., [2012] FMSC 35; 18 FSM Intrm. 409, 410-11 (Chk. 2012).

Insurance
Under the Chuuk Health Care Act of 1994, it is the employer who is liable to the Health Care Plan for all health insurance premiums including the employee's contribution. Liability is not imposed on the employee. The Act also imposes sanctions on the employer for non-payment of the premiums. Chuuk Health Care Plan v. Chuuk Public Utility Corp., [2012] FMSC 35; 18 FSM Intrm. 409, 411 (Chk. 2012).

Insurance
In order to collect overdue premiums or any amount imposed or authorized under the Chuuk Health Care Act of 1994, the Act authorizes civil actions against any person liable to pay any amount under the Act, that is, against the employer because under the Act that is who is liable. Chuuk Health Care Plan v. Chuuk Public Utility Corp., [2012] FMSC 35; 18 FSM Intrm. 409, 411 (Chk. 2012).

Insurance
Non-citizen employees who reside in Chuuk are covered by the Chuuk Health Care Plan and required to make health insurance premium contributions. Chuuk Health Care Plan v. Chuuk Public Utility Corp., [2012] FMSC 35; 18 FSM Intrm. 409, 411 n.1 (Chk. 2012).

Jurisdiction - Diversity
A Chuukese plaintiff in a suit against a Chuukese business or other Chuukese entity cannot create jurisdiction in the FSM Supreme Court merely by adding the defendant's non-citizen employees as co-defendants when the plaintiff's claims are only against the employer. Chuuk Health Care Plan v. Chuuk Public Utility Corp., [2012] FMSC 35; 18 FSM Intrm. 409, 411 (Chk. 2012).

Civil Procedure - Pleadings - Amendment; Jurisdiction - Diversity
Even though a court must exercise its discretion liberally to grant leave to amend a complaint, the court should deny a motion to amend when it would be futile to amend the complaint to add diverse parties from whom no relief can be obtained since they are not statutorily liable to plaintiff. Chuuk Health Care Plan v. Chuuk Public Utility Corp., [2012] FMSC 35; 18 FSM Intrm. 409, 411 (Chk. 2012).

Civil Procedure - Dismissal - Lack of Jurisdiction
When the FSM Supreme Court does not have any subject-matter jurisdiction over the case, it will dismissed without prejudice to any adjudication in the state court. Chuuk Health Care Plan v. Chuuk Public Utility Corp., [2012] FMSC 35; 18 FSM Intrm. 409, 411 (Chk. 2012).

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COURT'S OPINION

MARTIN G. YINUG, Chief Justice:

The court, in its July 18, 2012 Scheduling Order, asked whether the FSM Supreme Court had subject-matter jurisdiction over this case when the plaintiff, Chuuk Health Care Plan, asserts that the court's jurisdiction is based on diversity of citizenship and when both parties appear to be citizens of Chuuk. The court requested briefs on this point.

On August 10, 2012, the defendant, Chuuk Public Utility Corporation ("CPUC"), filed its brief about whether the FSM Supreme Court has subject-matter jurisdiction over this matter and the Health Care Plan filed a motion to amend its complaint and a motion for further time to brief the court's subject-matter jurisdiction. The Health Care Plan seeks to amend the complaint to add as defendants three foreign citizen employees and one Pohnpei citizen employee of CPUC. Although the court asked CPUC to file and serve its response to the motion to amend by August 24, 2012, and gave the Health Care Plan until August 27, 2012, to file and serve its brief about the court's subject-matter jurisdiction, there were no further filings.

The Health Care Plan is a Chuuk state government instrumentality and CPUC is also a Chuuk state government instrumentality. They are thus both citizens of Chuuk. There is no diversity of citizenship present. Nor does this case arise under the national Constitution or national law. The Health Care Plan's claims are based on the Chuuk Health Care Act of 1994, Chk. S.L. No. 2-94-06, a state statute.

The Health Care Plan, in an apparent attempt to assure or create diversity jurisdiction, moves to amend the complaint to add as defendants CPUC employees that are not Chuuk citizens. No opposition was filed. By rule, the court deems failure to oppose a motion as consent to the motion, FSM Civ. R. 6(d), but even then the court still needs good grounds before it can grant an unopposed motion. Senda v. Mid-Pacific Constr. Co., [1994] FMSC 20; 6 FSM Intrm. 440, 442 (App. 1994).

Under the Chuuk Health Care Act of 1994, it is the employer who is liable to the Health Care Plan for all health insurance premiums, Chk. S.L. No. 2-94-06, § 5-4, including mployee's co's contribution, id.§ 5-4(2). Liability t imposedposed on the employee. The Act also imposes sanctions on the employer for non-payment of the premiums. Id.&&#160 More importantlyantly, in order "to collect overdue premiums or any amount imposed or auth authorized under th[e] Act," id.§ 5-8(1), the Act authorcivilcivil actions against "any person liable to pay any amount under th[e] Act," id.§ 5-8, that is, against the employer because under the Act that is who is liable. These new non-citizen employee defendants would thus be nominal parties against whom no relief could be obtained even though, if the Health Care Plan prevails, CPUC would be required to withhold the employee contribution share of the health insurance premiums from their wages or salaries.[1]

In Hauk v. Mijares, [2012] FMSC 9; 18 FSM Intrm. 185, 187 (Chk. 2012), the court held that it could not exercise diversity jurisdiction over every credit dispute between a Chuukese customer and a Chuukese business merely because that business had a foreign accountant (or manager) who the plaintiff also named as a diverse, but nominal, defendant. The court therefore dismissed the nominal defendant in that case and then dismissed the case for the lack of subject-matter jurisdiction even though the plaintiff had originally named the foreign-citizen manager as a co-defendant. Id. at 188. Thus, a Chuukese plaintiff in a suit against a Chuukese business or other Chuukese entity is not to be able to create jurisdiction in the FSM Supreme Court merely by adding the defendant's non-citizen employees as co-defendants when the plaintiff's claims are only against the employer.

It would thus be futile to amend the complaint to add the diverse parties because no relief can be obtained from them since they are not statutorily liable to plaintiff Health Care Plan. Although a court must exercise its discretion liberally to grant leave to amend a complaint, when a proposed amendment to a complaint would be futile, the court should deny the motion to amend. Primo v. Pohnpei Transp. Auth., [2000] FMSC 35; 9 FSM Intrm. 407, 413 (App. 2000); Tom v. Pohnpei Utilities Corp., [1999] FMSC 25; 9 FSM Intrm. 82, 87 (App. 1999). Accordingly, the motion to amend the complaint is denied.

The Health Care Plan did not file a brief on subject-matter jurisdiction. It apparently concedes that, without the diverse non-citizen employees as co-defendants, the court lacks subject-matter jurisdiction. Since the court does not have any subject-matter jurisdiction over this case, it is dismissed, FSM Civ. R. 12(h)(3), without prejudice to any adjudication in the state court.

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^[1] The court has already decided that non-citizen employees who reside in Chuuk are covered by the Chuuk Health Care Plan and required to make health insurance premium contributions. Chuuk Health Care Plan v. Pacific Int’l, Inc.[2011] FMSC 33; , 17 FSM Intrm. 617, 620 (Chk. 2011).