New Tokyo Medical College v Kephas [2020] FMSC 19; 22 FSM R. 625 (Pon. 2020) (24 July 2020)

FSM SUPREME COURT TRIAL DIVISION
CIVIL ACTION NO. 2018-017

NEW TOKYO MEDICAL COLLEGE,
Plaintiff,

vs.

KALWIN KEPHAS, in his official capacity as Secretary of the FSM Department of Education and in his personal capacity, the FSM DEPARTMENT OF EDUCATION, and the FSM GOVERNMENT,

Defendants.
__________________________________________

ORDER RE DISMISSAL

Beauleen Carl-Worswick
Associate Justice

Decided: July 24, 2020

APPEARANCES:

For the Plaintiff: Marstella E. Jack, Esq.
P.O. Box 2210
Kolonia, Pohnpei FM 96941

For the Defendants: Josephine Leben James, Esq.
Assistant Attorney General
FSM Department of Justice
P.O. Box PS-105
Palikir, Pohnpei FM 96941

* * * *

HEADNOTES

Civil Procedure - Declaratory Relief; Constitutional Law - Case or Dispute - Mootness

An action for declaratory relief is moot when the government has rescinded the orders that the plaintiff sought to have declared unlawful. New Tokyo Medical College v. Kephas, 22 FSM R. 625, 630 (Pon. 2020).

Torts
In FSM case law, there is no tort or cause of action denominated as harassment although there are causes of action that include harassment as a significant component, and there is no tort of "intimidation" and the court will not create one. New Tokyo Medical College v. Kephas, 22 FSM R. 625, 630 & n.2 (Pon. 2020).

Public Officers and Employees; Torts - Governmental Immunity
Public officials are generally entitled to qualified official immunity so that government officials who are performing their official duties are generally shielded from civil damages. New Tokyo Medical College v. Kephas, 22 FSM R. 625, 630-31 (Pon. 2020).

Public Officers and Employees; Torts - Governmental Immunity
The objective test to determine whether public officials are shielded from liability for damages is that government officials performing discretionary functions generally are shielded from liability for civil damages insofar as their conduct does not violate clearly established statutory or constitutional rights of which a reasonable person would have known. New Tokyo Medical College v. Kephas, 22 FSM R. 625, 631 (Pon. 2020).

Public Officers and Employees; Torts - Governmental Immunity
More than bare allegations of malice are required to deny public officials’ qualified immunity for acts conducted in the course of official duties. New Tokyo Medical College v. Kephas, 22 FSM R. 625, 631 n.4 (Pon. 2020).

Public Officers and Employees; Torts - Governmental Immunity
A government official is not personally liable when the official was not in a situation where the official could be expected to know that certain conduct would violate statutory or constitutional rights or when the tone or content of the official’s letters to the plaintiff was not threatening and there was no evidence that the motive for these letters was personal vengeance. New Tokyo Medical College v. Kephas, 22 FSM R. 625, 632 (Pon. 2020).

Constitutional Law - Due Process; Constitutional Law - Taking of Property
The fundamental concept of procedural due process is that the government may not be permitted to strip citizens of life, liberty, or property in an unfair, arbitrary manner, and when such important individual interests are exposed to possible governmental taking or deprivation, the Constitution requires that the government follow procedures calculated to assure a fair and rational decision making process. New Tokyo Medical College v. Kephas, 22 FSM R. 625, 633 (Pon. 2020).

Constitutional Law - Due Process - Notice and Hearing
Notice and opportunity to be heard are the core requirements of due process and fundamental fairness, and, although specific requirements of due process may vary depending on the nature of decisions to be made and the circumstances, the right to be heard is at the core. New Tokyo Medical College v. Kephas, 22 FSM R. 625, 633 (Pon. 2020).

Constitutional Law - Due Process; Constitutional Law - Equal Protection
The constitutional guarantees of due process and equal protection extend to aliens. New Tokyo Medical College v. Kephas, 22 FSM R. 625, 633 n.8 (Pon. 2020).

Administrative Law - Administrative Procedure Act; Constitutional Law - Due Process - Notice and Hearing
The right to appeal a decision under the Education Code is set forth in 40 F.S.M.C. 114, which provides for administrative appeals under 17 F.S.M.C. 108-113. The statutes do not require that applicants for administrative relief be given notice of their right to appeal an adverse decision, but personal notice is required of all hearings after a petition for administrative review is filed. New Tokyo Medical College v. Kephas, 22 FSM R. 625, 633 (Pon. 2020).

Administrative Law - Administrative Procedure Act; Constitutional Law - Due Process - Notice and Hearing
A letter seeking clarification about the criteria used to assess a college’s faculty and curriculum, the constituents and qualifications of the evaluation taskforce, and the legality of certain agreements, and that offered to discuss the report and findings, does not constitute a petition for a review hearing, which would trigger the requirement of personal notice of hearings. Nor does a telephone call asking "Why are you doing this?" constitute such a petition. New Tokyo Medical College v. Kephas, 22 FSM R. 625, 634 (Pon. 2020).

Administrative Law; Administrative Law - Judicial Review; Attorney’s Fees - Court-Awarded
When, because the court referred the matter for administrative review, the plaintiff had an opportunity to vindicate its rights and the Secretary reevaluated his previous decisions and reversed himself, the error was corrected through the administrative review process, which is consistent with the procedure’s purpose. The court thus cannot find a reason to award the plaintiff damages or attorney’s fees, especially when the plaintiff waited a year before exercising its rights under the statute, which greatly increased its attorney’s fees due to the need to obtain injunctive relief. New Tokyo Medical College v. Kephas, 22 FSM R. 625, 634-35 (Pon. 2020).

Civil Rights; Civil Rights - Remedies and Damages
A prevailing party is one who has succeeded on any significant claim affording it some of the relief sought. At a minimum, to be considered a prevailing party within the meaning of the civil rights fee-shifting statute, the plaintiff must be able to point to a resolution of the dispute which changes the legal relationship between itself and the defendant. Beyond this absolute limitation, a technical victory may be so insignificant as to be insufficient to support prevailing party status. New Tokyo Medical College v. Kephas, 22 FSM R. 625, 635 (Pon. 2020).

Civil Rights; Civil Rights - Remedies and Damages
In any civil rights action, the court may award costs and reasonable attorney’s fees to the prevailing party. A plaintiff in a civil rights action, who is awarded nominal damages, is a prevailing party, and as a prevailing party, that plaintiff is entitled to its fees and costs. New Tokyo Medical College v. Kephas, 22 FSM R. 625, 635 (Pon. 2020).

Civil Rights; Civil Rights - Remedies and Damages
When the plaintiff was not the prevailing party in the court action and was therefore not awarded nominal damages because it had prevailed in administrative review, the plaintiff is not entitled to civil rights damages even though the FSM withdrew its letters closing the plaintiff. New Tokyo Medical College v. Kephas, 22 FSM R. 625, 635 (Pon. 2020).

Attorney’s Fees - Court-Awarded; Civil Rights; Civil Rights - Remedies and Damages

The civil rights statute, 11 F.S.M.C. 701(3), does not authorize the award of attorney’s fees for administrative proceedings, even for administrative proceedings that were a prerequisite to a later court action (the exhaustion of administrative remedies requirement) because the statute only authorizes an attorney’s fee award for actions (court cases) brought under 11 F.S.M.C. 701(3). New Tokyo Medical College v. Kephas, 22 FSM R. 625, 635 (Pon. 2020).

* * * *

COURT’S OPINION

BEAULEEN CARL-WORSWICK, Associate Justice:

BACKGROUND

Plaintiff New Tokyo Medical College ("Medical College" or "NTMC") filed its Verified Complaint for Injunctive Relief, Declaratory Judgment and Damages on August 7, 2018. The Medical College’s causes of action are for Declaratory Relief, Harassment and Intimidation, and Due Process Violation.

The defendants ("FSM") filed their Answer on August 27, 2018, asserting the Affirmative Defense that the Medical College failed to exhaust its administrative remedies. On September 18, 2018, the court granted the Medical College injunctive relief pending the outcome of Administrative Review.

On April 22, 2019, the FSM filed its Report Regarding Administrative Review and requested that the court dismiss the matter because the FSM Department of Education ("FSM DOE") rescinded its letters of September 1, 2016 and October 17, 2017, which ordered the Medical College to close. The FSM filed a Status Report on January 30, 2020, again requesting that the matter be dismissed "as all administrative remedies has [sic] been exhausted, and there is no longer a case in controversy."

The Medical College filed its Opposition to Defendant’s Motion for Dismissal; Motion for an Order for an Award of Attorney’s Fees and Costs ("Opposition and Motion for Attorney’s Fees and Costs") on February 12, 2020. On February 21, 2020, the FSM filed a Motion to Strike the Medical College’s Opposition and Motion for Attorney’s Fees and Costs.

On April 30, 2020, the court entered its Order denying the FSM’s Motion for Dismissal and Motion to Strike. The court further ordered that the FSM file and serve a Response to the Medical College’s Opposition to Defendant’s Motion for Dismissal; Motion for an Award for Attorney’s Fees and Costs, and that the Medical College "may" file and serve a Reply no later than May 25, 2020. The FSM filed its Response on May 15, 2020. The Medical College has not filed a Reply.

FACTS

On August 21, 2012, the State of Pohnpei granted the Medical College a Charter of Incorporation as a Nonprofit Corporation. The Charter provides for corporate status without reference to the educational activities of the Medical College. Compl. Ex. A.

The FSM DOE granted the Medical College a three year Non-Public School Charter on July 10, 2010 to operate the Medical College on Chuuk. The charter states that the Medical College has met the "educational requirements of the Department of Education." Id.

On March 7, 2014, the FSM DOE issued a letter granting the Medical College a temporary charter for another three (3) years. The letter states that the "temporary charter" was granted based on a survey by "NDOE staff who reported favorable results" and scheduled follow-up monitoring activities and conditions-March 31, 2014, review copies of lease agreements and review copies and validation of staff/faculty employment contracts and May 30, 2014 2nd Year Annual Report. The letter states, "You may submit these documents prior to these given dates above and request for earlier follow-up should that suitably fit your busy schedule." Id. The separate charter stated it was valid until July 10, 2016.^[1] Id.

On September 1, 2016, the FSM DOE issued a two (2) page letter denying the Medical College’s application to renew its charter. The letter states it is based on a review of various functions of the Medical College that it found deficient, including Admissions, Curriculum, Faculty, Affiliations and MOU. Compl. Ex. B.

On October 17, 2017, the FSM DOE issued its final notice ordering the closure of the Medical College. According to the letter, the Medical College "does not have the proper facilities and equipment to support a medical school. There is no existing science laboratory that will train medical students that enables them [to] advance in their field of study among other reasons for denial." The letter further states, "This decision to deny your application has not changed since no additional fact or information or justification has been provided to us to reconsider our decision." Compl. Ex. C.

On October 26, 2017, FSM Immigration & Labor revoked the work and entry permits for Mary Joy Ann Santos and Kazuhide Okada, per Immigration Regulation 2.11, which provides for revocation of entry permits at any time if the contract or relationship on which an entry permit was issued is terminated. The letter gave these employees fifteen (15) days to depart the FSM. Compl. Ex. B.

On April 19, 2019, Kalwin Kephas, Secretary of the FSM DOE, issued his administrative review decision. He reasoned that

At this time . . . there are no statutes or regulations governing the establishment and/or minimum standards for post-secondary private schools like NTMC. Although there is a statute that discusses the chartering of private schools, post-secondary schools are not included within the statutory definition of a "private school." Therefore, I conclude that in the absence of established minimum standards, the Secretary of the Department of Education does not have the authority to issue charters of any kind to entities such as NTMC. Since there is no authority to issue charters to such institutions, it stands to reasons [sic] that there is no authority to renew any previously issued charters, which, by all accounts, are without any authority or meaning. . . .

Defs.’ Report Regarding Administrative Review Ex. A at 2.

The court will grant the FSM’s Motion for Dismissal and deny the Medical College’s Motion for Attorney’s Fees and Costs as set forth below.

ANALYSIS

Medical College’s First Cause of Action - Declaratory Relief

The Medical College asserts that FSM Secretary of Education Kalwin Kephas and the FSM government are liable for damages and attorney’s fees because Secretary Kephas closed the Medical College without cause or authority. According to the FSM, the problem is resolved, as Secretary Kephas rescinded his September 1, 2016 and October 17, 2017 letters, which ordered the closure of the Medical College, and acknowledged that he did not have the authority to issue a charter to the Medical College and therefore that he did not have the authority to terminate the Medical College’s charter.

The court finds that the Medical College’s first cause of action for Declaratory Relief is moot because FSM DOE Secretary Kephas withdrew his September 1, 2016 and October 17, 2017 letters and the Medical College may operate now without FSM DOE restrictions.

Medical College’s Second Cause of Action - Harassment and Intimidation, as to Kalwin Kephas, Personally

The Medical College argues that it is entitled to damages because, as an individual,

The Secretary of Education went beyond his authority and used his office to harass and intimidate the Plaintiff by sending threatening letters without cause and without authority. . . . [And] ordered the closure of the school unlawfully as a personal vengeance . . . as soon as he took office, and then conspired with Defendant Division of Immigration to revoke the permits for the Plaintiff’s faculty members.

Compl. at 6.

In FSM case law, "there is no tort or cause of action denominated as ‘harassment.’" FSM v. Kana Maru No. 1, 14 FSM R. 368, 373 (Chk. 2006).^[2]

References to "harassment" in FSM case law regard abuse of the litigation process. McVey v. Etscheit, 14 FSM R. 207, 210 (Pon. 2006) (motions to disqualify opposing counsel can be misused as a technique of harassment); Damarlane v. FSM, 7 FSM R. 383, 384 (Pon. 1996) (Motion for Rule 11 sanctions for filing a reply to the plaintiffs’ opposition to the defendants’ motion for summary judgment without requesting leave to do so, and because the reply contained no new matter); Setik v. Pacific Int’l, Inc., 17 FSM R. 304, 306 (Chk. 2010) (first-filed lawsuit has priority over any other case involving the same parties and issues to protect litigants from the expense and harassment of multiple litigation); FSM v. Fu Yuan Yu 398, 12 FSM R. 487, 491 (Pon. 2004) (whether the dismissal of criminal prosecution in favor of civil penalties involved any harassment of the defendants). The court finds no reference in FSM law to a tort of "intimidation" and declines to create one.

Public Officials: Qualified Official Immunity, Shielded From Damages

Public officials, such as FSM DOE Secretary Kephas, are generally entitled to qualified official immunity.^[3] Marsolo v. Esa, 18 FSM R. 59, 65 (Chk. 2011) (citing Swanson v. Powers, [1991] USCA4 1292; 937 F.2d 965, 969 (4th Cir. 1991) (an official who simply enforces a presumptively valid statute will rarely thereby lose his or her immunity from suit); Lemon v. Kurtzman, [1973] USSC 69; 411 U.S. 192, 207-09[1973] USSC 69; , 93 S. Ct. 1463, 1472-74, 36 L. Ed. 2d 151, 165-66 (1973) (absent extraordinary circumstances, liability will not attach for executing the statutory duties one was appointed to perform)).

Government officials who are performing their official duties are generally shielded from civil damages. Marsolo v. Esa, 18 FSM R. 59, 64 (Chk. 2011) (citing Harlow v. Fitzgerald, [1982] USSC 138; 457 U.S. 800, 818[1982] USSC 138; , 102 S. Ct. 2727, 2738[1982] USSC 138; , 73 L. Ed. 2d 396, 410 (1982)); FSM v. Wainit, 14 FSM R. 51, 55 (Chk 2006) ("Qualified immunity" partially shields public officials performing discretionary functions from civil liability and damages.) (citing Black’s Law Dictionary 753 (7th ed. 1999); Harlow v. Fitzgerald, 457 U.S. at 818, 102 S. Ct. at 2738, 73 L. Ed. 2d at 410)).

The Harlow Court sets forth an objective test to determine whether public officials are shielded from liability for damages: "[G]overnment officials performing discretionary functions generally are shielded from liability for civil damages insofar as their conduct does not violate clearly established statutory or constitutional rights of which a reasonable person would have known."^[4] Harlow, 457 U.S. at 818, 102 S. Ct. at 2738, 73 L. Ed. 2d at 410.

The Harlow Court further stated that,

Where an official could be expected to know that certain conduct would violate statutory or constitutional rights, he should be made to hesitate; and a person who suffers injury caused by such conduct may have a cause of action. But where an official’s duties legitimately require action in which clearly established rights are not implicated, the public interest may be better served by action taken "with independence and without fear of consequences."

Id. at 819, 102 S. Ct. at 2739, 73 L. Ed. 2d at 411 (footnote omitted).

Here, Secretary Kephas’ final administrative decision, dated April 19, 2019, notes that

[P]ursuant to [Section 2(r) of Article IX of] the [FSM] Constitution, the national government has the authority to set minimum standards for all educational institutions. In addition, the FSM Congress specifically delegated to the Secretary of the Department of Education the authority to: "Promote education by setting minimum standards for educational administration, programs and facilities." See 40 F.S.M.C. § 103(1)(a). Therefore, with respect to post-secondary schools, the FSM national government only has the authority to set minimum standards and provide support for post secondary programs, including enforcing those minimum standards."

Defs.’ Report Regarding Administrative Review Ex. A at 2.

Essentially, Secretary Kephas concluded that he had the authority to enforce minimum educational standards; however, no minimum standards existed for post-secondary private schools like NTMC and without them, he had no authority to regulate such schools.

The Medical College disagrees with Secretary Kephas’ interpretation of the applicable law, as set forth in the following paragraphs of the Complaint:

12. FSM Constitution did not empower the FSM Government with authority to regulate post-secondary education: FSM Const. art. IX, § 2(r) as amended, states as follows:

2. The following powers are expressly delegated to Congress

r. to promote education and health by setting minimum standards, coordinating activities to foreign assistance, providing training and assistance to the states and providing support for post-secondary education programs and projects.

13. Title 40 of the FSM Code defines post-secondary education as, "Post-secondary education means an attendance at an institution of higher education in FSM or abroad".^[5]

14. This definition did not contemplate that the national government would "regulate" the operation of an institution of post-secondary level because it only uses the word attendance, which is consistent with the Constitutional instruction to "provide support" for post-secondary education programs and projects.

17. Furthermore, 40 FSMC 109 applies only to private schools operating grades 1-12, and does not cover post-secondary education.

Based on the above-noted contentions of the parties, the court finds that interpretation of the relevant Constitutional and statutory provisions governing this matter is complicated. The parties draw different conclusions from FSM Constitution article IX, § 2(r) and Title 40 of the FSM Code. Regardless whether Secretary Kephas’ analysis is correct, this is not a situation "[w]here an official could be expected to know that certain conduct would violate statutory or constitutional rights . . . ." Harlow, 457 U.S. at 819, 102 S. Ct. at 2739, 73 L. Ed. 2d at 411.

Secretary Kephas acknowledges that he acted beyond the scope of his official authority in issuing, and therefore in revoking the charter of the Medical College. The Medical College argues that Secretary Kephas lost his qualified official immunity through egregious behavior and he should be held personally liable for the Medical College’s attorney’s fees and costs. The court does not agree.

The court reviewed Secretary Kephas’s letters to the Medical College, dated September 1, 2016 and October 17, 2017.^[6] The September 1, 2016 letter contains factual analysis justifying Secretary Kephas’s directive to close the Medical College. The October 17, 2017 letter directing the Medical College to close is based on the facts stated in the September 1, 2016 letter.

The court does not find the tone or content of the letters "threatening."^[7] The fact that the letters warn and ultimately take action that is subsequently determined to be beyond the scope of the Secretary’s authority does not make them necessarily "threatening." The court notes that there is more than a year between the issuance of the September 1, 2016 letter directing the Medical College to close and the final letter closing the Medical College dated October 17, 2017.

Likewise, the court finds no evidence that the motive for these letters was "personal vengeance." The fact that FSM Immigration & Labor issued its letter to the Medical College’s employees to depart the FSM in fifteen (15) days, nine (9) days after the notice of closure of the Medical College, shows promptness but not necessarily "conspiracy" to force closure of the Medical College, as alleged in the Complaint. Compl. at 6.

Medical College’s Third Cause of Action - Due Process

The Medical College argues that the actions of the FSM were "arbitrary, grossly incorrect and motivated by improper purposes." Compl. at 7.

The fundamental concept of procedural due process is that the government may not be permitted to strip citizens of "life, liberty or property" in an unfair, arbitrary manner. Where such important individual interests are exposed to possible governmental taking or deprivation, the Constitution requires that the government follow procedures calculated to assure a fair and rational decision making process. Isaac v. Weilbacher, 8 FSM R. 326, 333 (Pon. 1998).

Notice and opportunity to be heard are the core requirements of due process and fundamental fairness. Ittu v. Ittu, 20 FSM R. 178, 187 (App. 2015).^[8]

Specific requirements of due process may vary depending on the nature of decisions to be made and the circumstances. At the core however is the right to be heard. Panuelo v. Amayo, 12 FSM R. 365, 374 (App. 2004).

In some circumstances, such as government employment, there is a statutory right to written notice of the employee’s right to appeal. 52 F.S.M.C. 152. However, that is not applicable here.

The right to appeal a decision under the Education Code is set forth in 40 F.S.M.C. 114, which provides for administrative appeals pursuant to 17 F.S.M.C. 108-113. The pertinent statutes do not require notice to applicants for administrative relief of their right to appeal an adverse decision. Personal notice is required of all hearings after a petition for administrative review is filed:

§ 108. Hearings.

(1) Any person aggrieved by agency action is entitled to a hearing before the highest administrative official of the department or office of which the agency is a part. Hearings shall be initiated by the submission of a petition to such administrative official.

(2) Hearings shall be conducted and orders shall be made in accordance with section 109 of this chapter; provided, however, that in the event and to the extent that any other law establishes another procedure for administrative review of the particular matter the provisions of such other law shall be controlling.

§ 109. Conduct of hearings.

(1) All parties and all persons who have an interest in the controversy who are known to the agency or hearing officer, and any person requesting individual notice shall be entitled to personal notice of all hearings. Persons entitled to notice of a hearing shall be timely informed of:

(a) the time, place, and nature of the hearing;

(b) the legal authority and jurisdiction under which the hearing is to be held;

(c) the particular sections of the statutes and regulations involved; and

(d) the issues presented.

(2) If the agency or other party is unable to state the matters in detail at the time the notice is served, the initial notice may be limited to a statement of the issues involved. Thereafter, upon application, a more definite and detailed statement shall be furnished.

(3) Unless precluded by law, disposition without a hearing may be made of any contested matter by stipulation, agreed settlement, consent, order, or default.

Here, the FSM DOE’s September 1, 2016 letter informed the Medical College of its decision not to renew the Medical College’s accreditation, based on issues regarding the Medical College’s Admissions, Curriculum, Faculty and Affiliations and MOU. Compl. Ex. B. The letter did not contain a notice of the Medical College’s right to appeal and none was taken. Instead, Attorney Marstella Jack responded in writing seeking clarification as to the criteria used to assess the college’s faculty and curriculum, the constituents and qualifications of the evaluation Taskforce and the legality of the MOU with GRMU and offering to discuss the report and findings. The court does not find Attorney Jack’s communication to be a "petition" for review hearing, which would trigger the requirement of personal notice of hearings. 17 F.S.M.C. 108(1); 109(1).

Secretary Kephas’s subsequent letter on October 17, 2017, which ordered the Medical College to shut down, summarized the defects noted in the September 1, 2016 letter and stated that the decision to deny the renewal of the application "has not changed since no additional fact, information nor justification has been provided to us to reconsider our decision." The letter did not contain a notice of right to appeal and none was taken. However, at hearing on August 29, 2018, Dr. Hong, President of the Medical College, testified that following the October 17, 2017 letter directing him to shut down the college, he called the Secretary of the FSM Department of Education and asked, "Why are you doing this?" The court does not find Dr. Hong’s call to Secretary Kephas to be a "petition" for review hearing, which would trigger the requirement of personal notice of hearings. Id.

The court notes that the October 26, 2017 letter from FSM Immigration & Labor to the Medical College does not include a notice of right to an administrative appeal^[9]1[0] and yet according to the Complaint, such right was exercised and the appeal was denied, administratively. Compl. paras. 18-19. According to the Answer, "neither the NTMC [n]or any of its workers appealed the Immigration decisions to [the FSM Supreme] Court." Answer para. 19.

The Medical College was afforded an opportunity to vindicate its rights upon court referral of this matter for administrative review before Secretary Kephas. He reevaluated his previous decisions in light of applicable Constitutional and statutory provisions and reversed himself.

It appears that the problem in this case arises from ambiguity in the Education Code. Secretary Kephas stated in his final Report that, in the absence of established minimum standards, the Secretary of the Department of Education does not have the authority to issue charters to entities such as the Medical College; therefore, he had no authority to renew any previously issued charter. Defs.’ Report Regarding Administrative Review Ex. A at 2.

Secretary Kephas corrected his error through the administrative review process, which is consistent with the purpose of the procedure and the court cannot find a reason to award the Medical College damages or attorney’s fees in this circumstance. The court also notes that the Medical College waited a year before exercising its rights under the statute, which greatly increased its attorney’s fees due to the need to obtain injunctive relief.

Civil Rights Damages

The Medical College argues that it should be awarded civil rights damages, as it is the prevailing party in this action.^1[1] The FSM contends that there is no case or controversy and the matter should be dismissed.

"A prevailing party must be one who has succeeded on any significant claim affording it some of the relief sought . . . ." Texas State Teachers Ass’n v. Garland Indep. Sch. Dist.[1989] USSC 55; , 489 U.S. 782, 791[1989] USSC 55; , 109 S. Ct. 1486, 1493, 103 L. Ed. 2d 866, 876 (1989). . . . "[A]t a minimum, to be considered a prevailing party within the meaning of [the civil rights fee-shifting statute], the plaintiff must be able to point to a resolution of the dispute which changes the legal relationship between itself and the defendant. Beyond this absolute limitation, a technical victory may be so insignificant . . . as to be insufficient to support prevailing party status." Id. at 792, 109 S. Ct. at 1493, 103 L. Ed. 2d at 877 (citations omitted).

Kaminanga v. Chuuk, 18 FSM R. 216, 220 (Chk. 2012).

In any civil rights action the court may award costs and reasonable attorney’s fees to the prevailing party. Bank of Guam v. O’Sonis, 9 FSM R. 106, 113 (Chk. 1999). A plaintiff who is awarded nominal damages is a prevailing party. As prevailing parties in a civil rights action, the plaintiffs are entitled to their fees and costs. Robert v. Simina, 14 FSM R. 438, 444 (Chk. 2006). Here, the court does not find that the Medical College is the prevailing party in the court action and therefore does not award nominal damages.

In addition, the Medical College is not entitled to civil rights damages based on being the prevailing party in the administrative action. The civil rights statute, 11 F.S.M.C. 701(3), does not authorize the award of attorney’s fees for administrative proceedings, even for administrative proceedings that were a prerequisite to a later court action (the exhaustion of administrative remedies requirement). The statute authorizes an attorney’s fee award only for actions (court cases) brought under 11 F.S.M.C. 701(3). Poll v. Victor, 18 FSM R. 402, 405 (Pon. 2012). Accordingly, the Medical College is not entitled to civil rights damages despite the fact that the FSM withdrew its letters closing the College.

CONCLUSION

The Medical College has failed to prevail on any of its causes of action. The court referred the matter for administrative review, at which the FSM DOE determined that it had no authority to issue or revoke the educational charters it granted to the Medical College and withdrew its closure orders. This decision obviated the first cause of action for declaratory relief. The Medical College failed to show entitlement to damages based on its allegation that Kalwin Kephas acted in a threatening or intimidating manner, was motivated by personal vengeance and/or conspired to close the Medical College. The Medical College was provided adequate due process to vindicate its claims and was able to do so. The Medical College is not entitled to an award of civil rights damages because it did not recover damages in tort or under any other legal theory. A case and controversy no longer exists and the matter should be dismissed.

ACCORDINGLY IT IS HEREBY ORDERED that the Verified Complaint for Injunctive Relief, Declaratory Judgment and Damages is DISMISSED as to all defendants with prejudice.

IT IS FURTHER ORDERED that New Tokyo Medical College’s Motion for an Order for an Award of Attorney’s Fees and Costs is DENIED.

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^[1] The Charter was valid for less than the three (3) years stated in the letter.

^[2] The Kana Maru court added that there are other causes of action that include harassment as a significant component but it did not identify them.

^[3] In Marsolo, the court found that qualified official immunity applied to FSM public officials, Acting Secretary of Finance and Administration Nakanaga, Secretary of Justice Robert, Assistant Attorney General Bacalando, and Director of the Office of Statistics, Budget, and Economic Affairs Nimea.

^[4] More than "bare allegations of malice" are required to deny public officials’ qualified immunity for acts conducted in the course of official duties. Harlow, 457 U.S. at 817, 102 S. Ct. at 2738, 73 L. Ed. 2d at 410.

^[5] 40 F.S.M.C. 102(15).

^[6] Compl. Ex. B.

^[7] Threat is defined as, "[a] communicated intent to inflict harm or loss on another or on another’s property, esp. one that might diminish a person’s freedom to act voluntarily or with lawful consent." BLACK’S LAW DICTIONARY 1519 (8th ed. 2004).

^[8] The constitutional guarantees of due process and equal protection extend to aliens. Pohnpei v. M/V Miyo Maru No. 11, 8 FSM R. 281, 295 n.8 (Pon.1998); Berman v. FSM Supreme Court (I), 5 FSM R. 364, 366 (Pon. 1992).

^[9] Compl. Ex. B.

^1[0] 50 F.S.M.C. 116 provides for an appeal according to the administrative procedures set forth in Title 17 of the FSM Code.

^[1]1 Opp’n to Defs.’ Mot. for Dismissal; Mot. for an Order for an award of Att’ys fees and Costs at 3.