Luen Thai Fishing Venture, Ltd. v State of Pohnpei [2013] FMSC 13; 18 FSM Intrm. 573 (Pon. 2013) (18 February 2013)

FSM SUPREME COURT TRIAL DIVISION

CIVIL ACTION NO. 2013-001

LUEN THAI FISHING VENTURE, LTD. and LIANCHENG OVERSEAS FISHERY (FSM) CO., LTD.,
Plaintiffs,

vs.

STATE OF POHNPEI, JOHN EHSA in his capacity as Governor, OFFICE OF FISHERIES AND AQUACULTURE, and MIJU MULSAN COMPANY, LTD.,
Defendants.
__________________________________________

ORDER DENYING MOTION TO DISMISS

Martin G. Yinug
Chief Justice

Decided: February 15, 2013
Amended: February 18, 2013

APPEARANCES:

For the Plaintiffs: Stephen V. Finnen, Esq.

P.O. Box 1450

Kolonia, Pohnpei FM 96941

For the Defendant: Joseph S. Phillip, Esq.

(Miju Mulsan Co.) P.O. Box 464

Kolonia, Pohnpei FM 96941

* * * *

HEADNOTES

Civil Procedure - Dismissal - Before Responsive Pleading
A court will understand a defendant's assertion in its motion to dismiss that the plaintiffs do not make any specific allegations against it to mean that the plaintiffs fail to state a claim against that defendant for which the plaintiffs may be granted relief and therefore the complaint against it ought to be dismissed under Civil Procedure Rule 12(b)(6). Luen Thai Fishing Venture, Ltd. v. Pohnpei, [2013] FMSC 13; 18 FSM Intrm. 573, 574 (Pon. 2013).

Civil Procedure - Dismissal - Before Responsive Pleading
A court must accept the facts as alleged in the plaintiffs' complaint as true when it considers a Rule 12(b)(6) motion to dismiss. Luen Thai Fishing Venture, Ltd. v. Pohnpei, [2013] FMSC 13; 18 FSM Intrm. 573, 575 (Pon. 2013).

Civil Procedure - Dismissal - Before Responsive Pleading
Allegations that the process leading to the Miju Mulsan lease was invalid and that therefore Miju Mulsan does not have any rightful interest in the leasehold or any rights under the lease do state a claim for which the court may grant the plaintiffs relief. Luen Thai Fishing Venture, Ltd. v. Pohnpei, [2013] FMSC 13; 18 FSM Intrm. 573, 575 (Pon. 2013).

Civil Procedure - Parties; Constitutional Law - Due Process - Notice and Hearing
A plaintiff, who challenges another's right to an interest in land and seeks to exercise an interest in land that excludes that other's supposed rights to the land, ought to, as a matter of due process, name that other as a party defendant. Otherwise that other party will be deprived of its interest without notice and an opportunity to be heard. Luen Thai Fishing Venture, Ltd. v. Pohnpei, [2013] FMSC 13; 18 FSM Intrm. 573, 575 (Pon. 2013).

Civil Procedure - Parties
A party that believes that it has a leasehold interest in a site is a necessary and very probably an indispensable party to the lawsuit when, if the plaintiffs are successful in the lawsuit, the party will not have any leasehold interest in the site. Luen Thai Fishing Venture, Ltd. v. Pohnpei, [2013] FMSC 13; 18 FSM Intrm. 573, 575 (Pon. 2013).

Civil Procedure - Parties; Public Contracts
The successful bidder on a public contract is a necessary and indispensable party to litigation by an unsuccessful bidder that challenges the public bidding process. Luen Thai Fishing Venture, Ltd. v. Pohnpei, [2013] FMSC 13; 18 FSM Intrm. 573, 575 (Pon. 2013).

* * * *

COURT'S OPINION

MARTIN G. YINUG, Chief Justice:

This comes before the court on defendant Miju Mulsan Company's Motion to Dismiss, filed on February 1, 2013, and on the plaintiffs' Opposition to Motion to Dismiss, filed February 4, 2013. The other defendants did not file anything. Miju Mulsan's motion is denied. The reasons follow.

Miju Mulsan moves to dismiss the complaint against it because, in its view, the plaintiffs do not make any specific allegations against it and because Miju Mulsan is neither a necessary nor indispensable party to the case. The court understands Miju Mulsan's assertion that the plaintiffs do not make any specific allegations against it to mean that the plaintiffs fail to state a claim against Miju Mulsan for which the plaintiffs may be granted relief and therefore, under Civil Procedure Rule 12(b)(6), the complaint against it ought to be dismissed.

In this action, the plaintiffs, among other things, challenge the effectiveness of a January 16, 2013 lease between the State of Pohnpei and Miju Mulsan for the fish-processing facilities on the former Pohnpei Fisheries Corporation ("PFC") site. Plaintiff Luen Thai Fishing Venture, Ltd. ("Luen Thai") challenges the State's right to evict it from the PFC site and plaintiff Liancheng Overseas Fishery (FSM) Co., Ltd. ("Liancheng") challenges the award of the PFC lease to Miju Mulsan instead of itself because the bidding process was unfair. The plaintiffs thus seek to prevent Miju Mulsan from acquiring an interest in land - the leasehold of the PFC site - and enjoying the rights to operate the facility there, which rights Miju Mulsan believes it obtained under its January 16, 2013 lease with the State for the PFC site. That site is now occupied by Luen Thai under a claim of right and Liancheng seeks and claims it was unlawfully deprived of the right to lease and occupy that site.
Accepting the facts as alleged in the plaintiffs' complaint as true, which the court must do when considering a Rule 12(b)(6) motion to dismiss, Marsolo v. Esa, [2011] FMSC 41; 18 FSM Intrm. 59, 64 (Chk. 2011); FSM v. Koshin 31[2008] FMSC 71; , 16 FSM Intrm. 15, 18 (Pon. 2008), the plaintiffs' allegations that the process leading to the Miju Mulsan lease was invalid and that therefore Miju Mulsan does not have any rightful interest in the PFC leasehold or any rights under the January 16, 2013 lease do state a claim for which the court may grant the plaintiffs relief.

Furthermore, a plaintiff, who challenges another's right to an interest in land and seeks to exercise an interest in land that excludes that other's supposed rights to the land, ought to, as a matter of due process, name that other as a party defendant. SeeSetik v. Pacific Int'l, Inc., [2010] FMSC 46; 17 FSM Intrm. 304, 306 (Chk. 2010); Marcus v. Truk Trading Corp., [2002] FMSC 31; 11 FSM Intrm. 152, 158 n.4 (Chk. 2002); Ruben v. Hartman, [2007] FMCSC 10; 15 FSM Intrm. 100, 110 (Chk. S. Ct. App. 2007). Otherwise that other party will be deprived of its interest without notice and an opportunity to be heard. In this case, Miju Mulsan believes it has a leasehold interest in the PFC site. If the plaintiffs are successful in this lawsuit, Miju Mulsan will not have any leasehold interest in the PFC site. Miju Mulsan is therefore a necessary and very probably an indispensable party to this lawsuit. Setik, 17 FSM Intrm. at 306.

Furthermore, the successful bidder on a public contract is a necessary and indispensable party to litigation by an unsuccessful bidder that challenged the public bidding process. RAM Eng'g & Constr., Inc. v. University of Louisville, 127 S.W.3d 579, 582-83 (Ky. 2003). Here, Miju Mulsan was the successful bidder and the unsuccessful bidder, plaintiff Liancheng, challenges the public bidding process in this lawsuit. Miju Mulsan is thus a necessary and indispensable party to this case.

Accordingly, Miju Mulsan's motion to dismiss is denied. Miju Mulsan Company shall file and serve its answer within ten days of service of this order. FSM Civ. R. 12(a)(1).

* * * *