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AHPW, Inc v Federated States of Micronesia [2003] FMSC 50; 12 FSM Intrm. 164 (Pon. 2003) (10 October 2003)

FEDERATED STATES OF MICRONESIA
SUPREME COURT TRIAL DIVISION
Cite as AHPW, Inc. v. FSM, [2003] FMSC 50; 12 FSM Intrm. 164 (Pon. 2003)

[2003] FMSC 50; [12 FSM Intrm. 164]

AHPW, INC.,
Plaintiff,

vs.

GOVERNMENT OF THE FEDERATED STATES OF
MICRONESIA and GOVERNMENT OF THE
STATE OF POHNPEI,
Defendants.

CIVIL ACTION NO. 1999-053

ORDER AND MEMORANDUM

Martin Yinug
Associate Justice

Decided: October 10, 2003

APPEARANCES:

For the Plaintiff:
Douglas F. Cushnie, Esq.
P.O. Box 949
Saipan, MP 96950

For the Defendant (FSM):
R. Anthony Welch, Esq.
Assistant Attorney General
FSM Department of Justice
P.O. Box PS-105
Palikir, Pohnpei FM 96941

For the Defendant:
Marstella Jack, Esq (Pohnpei) .
Assistant Attorney General
Pohnpei Department of Justice
P.O. Box 1555
Kolonia, Pohnpei FM 96941

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[12 FSM Intrm. 165]

HEADNOTES

Foreign Investment Laws
The national government guarantees that there will be no compulsory acquisition or expropriation of the property of any foreign investment as to which a Foreign Investment Certificate has been issued. AHPW, Inc. v. FSM, [2003] FMSC 50; 12 FSM Intrm. 164, 166 (Pon. 2003).

Statutes - Construction
Basing legal analysis on dictionary definitions can be an uncertain proposition. Not the least of such concerns is that a comprehensive dictionary aims at setting out all meanings of a word, while a court must determine the precise intended meaning of a word or phrase in a specified context. AHPW, Inc. v. FSM, [2003] FMSC 50; 12 FSM Intrm. 164, 166 (Pon. 2003).

Foreign Investment Laws
When a party has not alleged that the state has dispossessed it of any property, and that property is now in the possession of the state or its designee, the party has not stated a cause of action for expropriation under the FSM foreign investment statutes. AHPW, Inc. v. FSM, [2003] FMSC 50; 12 FSM Intrm. 164, 167 (Pon. 2003).

Statutes - Construction; Torts - Governmental Liability
Even where a litigant may have concerns over its ability to realize on a judgment against the state defendant, that concern alone does not serve to enlarge the scope of a statute to create liability for the national government, against which a judgment may be more collectible. Such issues are for the legislature. AHPW, Inc. v. FSM, [2003] FMSC 50; 12 FSM Intrm. 164, 167 (Pon. 2003).

Foreign Investment Laws; Torts - Governmental Liability
While § 219 of the Foreign Investment Laws admits of a cause of action for prospective, injunctive relief against the FSM, it does not permit an action for damages. Chapter 3 provides a remedy for damages, but notwithstanding the fact that the remedy is against Pohnpei, and not the FSM, it is nevertheless a remedy. If the plaintiff prevails, the conduct alleged will not go unsanctioned. AHPW, Inc. v. FSM, [2003] FMSC 50; 12 FSM Intrm. 164, 167 (Pon. 2003).

Foreign Investment Laws; Statutes - Construction
There is no meaningful distinction between the terms "compulsory acquisition" and "expropriation." AHPW, Inc. v. FSM, [2003] FMSC 50; 12 FSM Intrm. 164, 167 (Pon. 2003).

Statutes - Construction
The court cannot read words into a statute that are not there. AHPW, Inc. v. FSM, [2003] FMSC 50; 12 FSM Intrm. 164, 167-68 (Pon. 2003).

Civil Procedure - Dismissal
Causes of action are dismissed when no relief could be granted on the allegations pled even if those allegations were proven. AHPW, Inc. v. FSM, [2003] FMSC 50; 12 FSM Intrm. 164, 168 (Pon. 2003).

Civil Procedure - Summary Judgment
Civil Rule 56(d) provides that when summary judgment has been denied such that trial is necessary, the court shall, if practicable, ascertain what material facts exist without substantial controversy and what material facts are actually and in good faith controverted. AHPW, Inc. v. FSM, [2003] FMSC 50; 12 FSM Intrm. 164, 168 (Pon. 2003).

[12 FSM Intrm. 166]

Commerce
Title 32, chapter 3 of the FSM Code prohibits anticompetitive conduct, not competition. AHPW, Inc. v. FSM, [2003] FMSC 50; 12 FSM Intrm. 164, 168 (Pon. 2003).

Evidence - Burden of Proof
All relevant documents are not necessarily those required to prove a party's case by the preponderance of the evidence. AHPW, Inc. v. FSM, [2003] FMSC 50; 12 FSM Intrm. 164, 168 (Pon. 2003).

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COURT'S OPINION

MARTIN YINUG, Associate Justice:

By order of September 29, 2003, the court requested supplemental briefing from the plaintiff AHPW, Inc. (AHPW) on whether it had stated a claim against either of the defendants under Chapter 2 of Title 32 of the FSM Code. [AHPW, Inc. v. FSM, [2003] FMSC 48; 12 FSM Intrm. 114, 117 (Pon. 2003).] The court received the supplement on October 6, 2003. The court considers in turn the points raised by AHPW.

a. The 32 F.S.M.C. 216 issues

Section 216(1) of Chapter 32 provides in pertinent part that "[t]he National Government guarantees that there shall be no compulsory acquisition or expropriation of the property of any foreign investment as to which a Foreign Investment Certificate has been issued." The statute itself does not provide a definition for either compulsory acquisition or expropriation. However, relying on dictionary definitions, AHPW contends that there is a difference between these two terms. It asserts that expropriation, and not compulsory acquisition, occurred here, and that there need be no showing that Pohnpei is now in possession of property formerly owned or in the possession of AHPW in order to state a cause of action for expropriation. As noted in this court's order of September 29, 2003, all of the instances of compulsory acquisition or expropriation cited by AHPW involved situations where identifiable property was taken from the possession of the alien person or corporation and transferred to the expropriating state or its designee.

"Basing legal analysis on dictionary definitions can be an uncertain proposition." FSM Social Sec. Admin. v. Kingtex (FSM) Inc., [1997] FMSC 27; 8 FSM Intrm. 129, 132 n.2 (App. 1997). Not the least of such concerns is that a comprehensive dictionary aims at setting out all meanings of a word (see, e.g., the multi-thousand-word entry under "take" in Webster's Third New International Dictionary 2329-31 (1965)), while a court must determine the precise intended meaning of a word or phrase in a specified context. With that in mind, the court is unable to detect a meaningful distinction between the dictionary definitions of "compulsory acquisition" and "expropriation" as those terms are used in 32 F.S.M.C. 216(1) and (4). "Compulsory" may mean "coercive"; "acquisition" may mean "the act of acquiring." "Acquire" may mean "to come into possession . . . of." Webster's Third New International Dictionary 468, 19, 18 (1965). "Expropriation" may mean "the action of the state in taking . . . the property rights of an individual"; "take" may mean "to get into one's hands or possession." Id. at 803, 2329 (meaning 1). More significantly, however, AHPW does not point in its supplement to a case or other example cited by a commentator where the type of anticompetitive conduct alleged in its complaint has been found to constitute either compulsory acquisition or expropriation of the property of an alien.

AHPW gives two additional justifications for alleging claims under Chapter 2 of Title 32 along with a claim under Chapter 3 of that same Title - this as opposed to proceeding under Chapter 3 alone.

[12 FSM Intrm. 167]

It asserts that "AHPW is writing on essentially a clean slate in this jurisdiction," and that taking this into account AHPW "must present to the court, based upon the facts as known, every reasonable legal theory that might be available which may afford it relief." The state of FSM law in this area, however, does not obviate the necessity on AHPW's part of stating a cause of action under Chapter 2 in the first instance. AHPW has not alleged that Pohnpei has dispossessed it of any property, and that property is now in the possession of Pohnpei or its designee. Looking to the applicable authorities available to it, the court is unable to conclude that AHPW has stated a cause of action.

AHPW's second reason for proceeding under both Chapters 2 and 3 is that if it proceeds under Chapter 3 only, and the FSM is not found liable, then it will have a judgment only against Pohnpei, and AHPW assesses chances of recovery against Pohnpei as "minimal." AHPW's Memo. [] at 5 (Oct. 6, 2003). On the other hand, AHPW asserts, if it prevails under Chapter 2, then it will have a judgment against the FSM, the collectibility of which it assesses as being "far greater." Id. It goes without saying that a responsible government entity will pay valid final judgments against it in as expeditious a fashion as possible. But even where a litigant may have concerns over its ability to realize on a judgment, that concern alone does not serve to enlarge the scope of a statute. Such issues are for the legislature.

b. The 32 F.S.M.C. 219 issues

The court also expressed concerns in its September 29, 2003, order that while § 219 of Chapter 2 admits of a cause of action for prospective, injunctive relief against the FSM, it does not permit an action for damages. [AHPW, Inc., 12 FSM Intrm. at 122.] In contrast with § 216(4), which provides that "the National Government shall be responsible for the prompt and adequate compensation of any injured noncitizen," § 219 provides in its entirety that

[s]ubject to the provisions of this chapter and regulations promulgated hereunder, the National Government shall not take action, or permit any State to take action, that would result in a foreign investor being given treatment that is less favorable than the treatment given to citizens, or business entities wholly owned by citizens, engaging in business in the FSM.

In response to this concern, AHPW acknowledges that § 219 does not specifically provide for compensatory relief. But AHPW further contends that where the national government fails to step in to prevent discriminatory conduct against a foreign investor, that conduct will go unsanctioned in the absence of a cause of action for compensatory damages. However, this fails to acknowledge the fact that Chapter 3 provides a remedy for damages resulting from the type of conduct alleged in the complaint. Notwithstanding the fact that the remedy is against Pohnpei, and not the FSM, it is nevertheless a remedy. If AHPW prevails, the conduct alleged will not go unsanctioned. But even if AHPW did not have a remedy under Chapter 3, the court would still be exceedingly reluctant to find that § 219 permits an action for damages in the absence of language creating such a cause of action.

AHPW raises one final point. It urges that "Congress, if it chose to be precise in Section 219 in granting only prospective relief, must be concluded to have been equally precise in Section 216 in distinguishing between acquisition and expropriation." AHPW's Memo. [] at 6 (Oct. 6, 2003). This contention, however, adopts the premise that there is a meaningful distinction between "compulsory acquisition" and "expropriation." As previously discussed, the court can discern none. In contrast to the lack of meaningful difference with respect to these two terms, §§ 216(4) and 219 by their express terms chart separate paths. Section 216(4) provides that "the National Government shall be responsible for the prompt and adequate compensation of any injured noncitizen [as a result of compulsory acquisition or expropriation of property]" while § 219 is silent in this regard. The court cannot read

[12 FSM Intrm. 168]

words into § 219 that are not there.

Accordingly, for reasons stated herein, as well as those set out in the September 29, 2003, order, count two of both of AHPW's causes of action are dismissed. No relief could be granted under Chapter 2 of Title 32 of the FSM Code on the allegations pled even if those allegations were proven. Nahnken of Nett v. United States, [1996] FMSC 9; 7 FSM Intrm. 581, 586 (App. 1996). Given this disposition, the court does not reach the FSM's issues 2, 5, and 6 in its July 23, 2003, motion for summary judgment.

c. Undisputed facts

AHPW has also requested that the court enter findings of fact on the summary judgment motions. FSM Civil Rule 56(d) provides that where summary judgment has been denied such that trial is necessary, the court "shall if practicable ascertain what material facts exist without substantial controversy and what material facts are actually and in good faith controverted." On July 21, 2003, as part of its motions for partial summary judgment against Pohnpei and the FSM, AHPW filed a statement of uncontested facts. These total forty-one, and Pohnpei contests seven of them: nos. 17, 27, 32, 34, 37, 40, and 41. In addition, no. 21 states that "[t]he state was aware through its officials that it should not be in competition with a private pepper processor." Whether or not Pohnpei "should be" in competition with a private pepper processor is, to the extent that it relies on a construction of Chapter 3 of Title 32 of the FSM Code, a conclusion of law, not a statement of fact. That chapter prohibits anticompetitive conduct, not competition. Statement 21 may be used at trial to show what Pohnpei officials were aware of, but it may not be used to establish a legal conclusion.

The following statements of fact from AHPW's July 21, 2003, statement are uncontested: 1-16, 18-20, 22-26, 28-31, 33, 35, 36, 38-40. The court also adopts as uncontested statement no. 21 to the extent it shows what Pohnpei officials were aware of.

The court also notes that AHPW references in its October 6, 2003, supplement "literally hundreds" of documents in this case which may be introduced into evidence. However, all relevant documents are not necessarily those required to prove a party's case by the preponderance of the evidence. With the goal being the efficient flow of trial, and not with the intent of limiting the parties' presentation of their respective cases in any way, the court would encourage the parties to present only such documents. The court has allotted three days for the trial of this matter.

The parties may file their pre-trial statements no later than Friday, October 17, 2003.

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