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Supreme Court of the Federated States of Micronesia |
FEDERATED STATES OF MICRONESIA
SUPREME COURT APPELLATE DIVISION
Cite case as Pohnpei v. AHPW, Inc.[2006] FMSC 1; , 14 FSM Intrm. 1 (App. 2006)
STATE OF POHNPEI,
Appellant/Cross-Appellee,
vs.
AHPW, INC.,
Appellee/Cross-Appellant,
vs.
FEDERATED STATES OF MICRONESIA,
Cross-Appellee.
APPEAL CASE NO. P4-2004
BEFORE:
Hon. Dennis K. Yamase, Associate Justice, FSM Supreme Court
Hon. Yosiwo P. George, Specially Assigned Justice, FSM Supreme Court*
Hon. Benjamin Rodriguez, Specially Assigned Justice, FSM Supreme Court**
*Chief Justice, Kosrae State Court, Tofol, Kosrae
**Associate Justice, Pohnpei Supreme Court, Kolonia, Pohnpei
OPINION
Argued: August 22, 2005
Decided: January 16, 2006
APPEARANCES:
For the Appellant (Pohnpei):
Leonito M. Bacalando, Jr., Esq.
Assistant Attorney General
Pohnpei Department of Justice
P.O. Box 1555
Kolonia, Pohnpei FM 96941
For the Appellee (AHPW, Inc.):
Douglas F. Cushnie, Esq.
P.O. Box 500949
Saipan MP 96950
For the Cross-Appellee (FSM):
Anthony Welch, Esq. (briefed)
Keith J. Peterson (argued)
Assistant Attorneys General
FSM Department of Justice
P.O. Box PS-105
[2006] FMSC 1; [14 FSM Intrm. 1]
* * * *
HEADNOTES
Appellate Review - Motions
A single Supreme Court appellate division article XI, section 3 justice may entertain and may grant or deny any request for relief
which under the appellate rules may properly be sought by motion, although a single justice may not dismiss or otherwise determine
an appeal, except upon stipulation of all parties, or upon a party’s failure to comply with the appellate rules’ timing
requirements. A single justice’s action may be reviewed by the court. Pohnpei v. AHPW, Inc., [2006] FMSC 1; 14 FSM Intrm. 1, 11 (App. 2006).
Appellate Review - Motions
Appellate Rule 27(c)’s use of the word "may" indicates that the review by the full appellate panel of all single justice orders
is not mandatory. The word "may" instead of "shall" indicates some discretion. It does not, however, indicate that the discretion
lies with the court. Pohnpei v. AHPW, Inc., [2006] FMSC 1; 14 FSM Intrm. 1, 11 (App. 2006).
Appellate Review
While it is true in construction of rules that the word "may" as opposed to "shall" is indicative of discretion or a choice between
two or more alternatives, the context in which the word appears must be the controlling factor. Pohnpei v. AHPW, Inc., [2006] FMSC 1; 14 FSM Intrm. 1, 11 (App. 2006).
Appellate Review - Motions
Rule 27(c) generally restricts a single justice to issuing procedural orders and (with two exceptions) from dismissing appeals. Any
action that a single justice takes can be reviewed by the court, on motion by the aggrieved party. Even when the Appellate Rules
authorize single appellate judges to entertain requests for relief, the single appellate judge’s decisions remain subject to
correction by the appellate court. Pohnpei v. AHPW, Inc., [2006] FMSC 1; 14 FSM Intrm. 1, 12 (App. 2006).
Appellate Review
The court must first look to FSM sources of law, but when the court has not previously construed an FSM appellate rule which is identical
or similar to a U.S. rule, it may look to U.S. sources for guidance in interpreting and applying the rule. Pohnpei v. AHPW, Inc., [2006] FMSC 1; 14 FSM Intrm. 1, 12 n.1 (App. 2006).
Appellate Review - Dismissal; Appellate Review - Motions
A single appellate judge’s order denying a motion to dismiss an appeal is a procedural order requiring the appeal to be briefed
and put on the calendar; it is not a determination having preclusive effect on the appeal’s validity. Pohnpei v. AHPW, Inc., [2006] FMSC 1; 14 FSM Intrm. 1, 12 (App. 2006).
Appellate Review - Motions
The discretion indicated by the word "may" in Rule 27(c) lies primarily with the parties and makes it mandatory for the full appellate
panel to review a single justice order when an aggrieved party asks it to. It is not mandatory that the full appellate panel review
every order made by the single justice. Pohnpei v. AHPW, Inc., [2006] FMSC 1; 14 FSM Intrm. 1, 12 (App. 2006).
Appellate Review - Motions
The full panel’s review of a single appellate judge’s order can be on the papers and the decision announced beforehand either in writing or orally at the start of oral argument on the merits; or the panel can chose to permit the parties a short time to argue and then take a short recess and then announce its decision and then proceed to the main argument on the merits. Pohnpei v. AHPW, Inc., [2006] FMSC 1; 14 FSM Intrm. 1, 12 (App. 2006).
Appellate Review - Briefs and Record
When a full trial transcript is included in appellant’s appendix, there is no reason why the cross-appellant should be required
to also file an identical trial transcript. One complete trial transcript in the appellate file is sufficient. Two would be a waste
of resources. Pohnpei v. AHPW, Inc., [2006] FMSC 1; 14 FSM Intrm. 1, 13 (App. 2006).
Appellate Review - Decisions Reviewable; Appellate Review - Notice of Appeal
When no separate notice of appeal from a post-judgment order awarding attorneys’ fees is filed, the appellate court lacks jurisdiction
to review the order. Pohnpei v. AHPW, Inc., [2006] FMSC 1; 14 FSM Intrm. 1, 13 (App. 2006).
Appellate Review - Standard of Review - Civil Cases
Those issues which are questions of law are reviewed de novo. Pohnpei v. AHPW, Inc., [2006] FMSC 1; 14 FSM Intrm. 1, 14 (App. 2006).
Appellate Review - Standard of Review - Civil Cases
For those issues challenging a trial court’s factual findings the standard of review is whether those findings are clearly erroneous,
and in determining whether a factual finding is clearly erroneous, the appellate court must view the evidence in the light most favorable
to the appellee. Pohnpei v. AHPW, Inc., [2006] FMSC 1; 14 FSM Intrm. 1, 14 (App. 2006).
Torts - Anticompetitive Practices
A state is a person under the FSM anticompetitive practices statute when it acts as a participant or competitor in commerce but not
when it acts as a regulator of commerce. Pohnpei v. AHPW, Inc., [2006] FMSC 1; 14 FSM Intrm. 1, 15 (App. 2006).
Commerce; Constitutional Law - Due Process
The usual cause of action when a governmental entity has exercised its regulatory powers improperly is a constitutional due process
claim. Pohnpei v. AHPW, Inc., [2006] FMSC 1; 14 FSM Intrm. 1, 15 (App. 2006).
Constitutional Law - Interstate and Foreign Commerce
When trochus was harvested to be sold for the export market and pepper was grown and processed for the export trade, that is foreign
commerce. That Pohnpei arranged its affairs so that its purchases and sales were all in state does not take it out of the stream
of foreign commerce. Pohnpei v. AHPW, Inc., [2006] FMSC 1; 14 FSM Intrm. 1, 15-16 (App. 2006).
Constitutional Law - Interstate and Foreign Commerce
The national government is expressly delegated the power to regulate foreign and interstate commerce. Title 32 is a valid exercise
of that power and the anticompetitive practices statute in Title 32 creates a statutory tort. Pohnpei v. AHPW, Inc., [2006] FMSC 1; 14 FSM Intrm. 1, 16 (App. 2006).
Torts
A tort is any civil cause of action not based on contract. Pohnpei v. AHPW, Inc., [2006] FMSC 1; 14 FSM Intrm. 1, 16 (App. 2006).
Torts
While tort law, especially common law torts like negligence, is primarily a state responsibility, the national government may create
tort law when legislating in an area that the Constitution has expressly delegated to Congress the power to legislate. Pohnpei v. AHPW, Inc., [2006] FMSC 1; 14 FSM Intrm. 1, 16 (App. 2006).
Choice of Law; Jurisdiction - Arising under National Law; Jurisdiction - Exclusive FSM Supreme Court
A case that came before the court based on the court’s exclusive jurisdiction over cases when the national government is a party
and where the plaintiff’s asserted claims primarily arose under national law, is not a diversity case where state law provides
the rules of decision. Pohnpei v. AHPW, Inc., [2006] FMSC 1; 14 FSM Intrm. 1, 16 (App. 2006).
Federalism - National/State Power; Torts - Anticompetitive Practices
A Pohnpei state law exempting it from anticompetitive practices liability does not apply to a case brought under the national anticompetitive
practices statute since the lawsuit is based on a cause of action created by the national, not the state, statute covering an activity
- foreign and interstate commerce - over which the national government may legislate. It would, of course, apply to an action brought
under the state anticompetitive practices statute. Pohnpei v. AHPW, Inc., [2006] FMSC 1; 14 FSM Intrm. 1, 16 (App. 2006).
Federalism - National/State Power
A state cannot nullify a valid exercise of national power by enacting a state statute. Pohnpei v. AHPW, Inc., [2006] FMSC 1; 14 FSM Intrm. 1, 16 (App. 2006).
Constitutional Law - Case or Dispute
When there is in the Constitution a textually demonstrable commitment of an issue to a coordinate branch of government, such as Congress
being the sole judge of the elections of its members, it is a nonjusticable political question not to be decided by a court because
of the separation of powers provided for in the Constitution. Pohnpei v. AHPW, Inc., [2006] FMSC 1; 14 FSM Intrm. 1, 16-17 (App. 2006).
Constitutional Law - Case or Dispute
When there is no textually demonstrable constitutional commitment that declaring a trochus harvest is reserved solely to one branch
of government without the involvement of any other branch or that the power to engage in commercial activity is reserved solely to
one branch of government, the political question doctrine does not apply. Pohnpei v. AHPW, Inc., [2006] FMSC 1; 14 FSM Intrm. 1, 17 (App. 2006).
Commerce
A state must abide by the same rules as anyone else engaging in business or in the market. Pohnpei v. AHPW, Inc., [2006] FMSC 1; 14 FSM Intrm. 1, 17 (App. 2006).
Constitutional Law - Case or Dispute
An argument that the political question doctrine bars the court from becoming involved in a case because a state law gives a state
regulatory body the power followed to its logical conclusion would mean that no court could ever rule an executive action illegal
because some law empowers the executive to make that decision. In other words, the principle of judicial review, enshrined in both
the FSM and Pohnpei Constitutions, would be overthrown and the government’s actions could never be questioned or reviewed in
any court. That cannot be so. Pohnpei v. AHPW, Inc., [2006] FMSC 1; 14 FSM Intrm. 1, 17 (App. 2006).
Statutes of Limitation
The continuing tort principle dictates that when there is an ongoing pattern of tortious activity where no single incident may be
fairly identified as the cause of the harm suffered, then it is appropriate to regard the total effect of the conduct as actionable,
and the statute of limitations does not begin to run until the conduct has ceased. Pohnpei v. AHPW, Inc., [2006] FMSC 1; 14 FSM Intrm. 1, 17 (App. 2006).
Statutes of Limitation
A defendant’s wrongful conduct may toll or suspend the running of the statute of limitations as a form of estoppel - a defendant
is estopped from raising the defense of statute of limitations because by his wrongful conduct he induced the plaintiff not to sue
until the statute of limitations had run out. Pohnpei v. AHPW, Inc., [2006] FMSC 1; 14 FSM Intrm. 1, 18 n.3 (App. 2006).
Equity - Laches; Statutes of Limitation
Laches has two elements - the passage of a nonspecific amount of time during which the plaintiff engages in inexcusable delay or lack
of diligence in bringing suit, and resulting prejudice to the defendant. Laches is always applied separate from and irrespective
of the statute of limitations. Pohnpei v. AHPW, Inc., [2006] FMSC 1; 14 FSM Intrm. 1, 18 (App. 2006).
Equity - Laches
When a party has not shown why the delay was inexcusable or how it was prejudiced by the delay, its assertions of laches and estoppel
are without merit. Pohnpei v. AHPW, Inc., [2006] FMSC 1; 14 FSM Intrm. 1, 18 (App. 2006).
Appellate Review - Decisions Reviewable
When the appellant introduced no evidence of customary law at anytime before the appeal, it is deemed to have waived the issue. Pohnpei v. AHPW, Inc., [2006] FMSC 1; 14 FSM Intrm. 1, 18 (App. 2006).
Torts - Anticompetitive Practices
When the anticompetitive practices statute requires that one or more persons create or use an existing combination of capital, skill,
or acts the effect of which is anticompetitive and when the trial court made findings that would show a combination, since the statute
is clear that only one "person" can provide the needed "combination," a contention that the trial court had to, and failed to, find
that the defendant acted in combination with someone else has no merit. Pohnpei v. AHPW, Inc., [2006] FMSC 1; 14 FSM Intrm. 1, 19 (App. 2006).
Civil Procedure - Depositions; Evidence - Witnesses
Civil Rule 32(a)(3) permits any party to use a witness’s deposition for any purpose if the court finds that the witness is off
of the island at which the trial or hearing is being held, unless it appears that the witness’s absence was procured by the
party offering the deposition. Pohnpei v. AHPW, Inc., [2006] FMSC 1; 14 FSM Intrm. 1, 19 (App. 2006).
Evidence - Witnesses
The use of a witness’s deposition at trial because the witness was off-island was proper when the witness’s current job
meant he no longer traveled to the Pacific and that he did not expect to be in Pohnpei in the next six months and that, since he
was in Texas, an FSM Supreme Court subpoena could not compel him to appear. Pohnpei v. AHPW, Inc., [2006] FMSC 1; 14 FSM Intrm. 1, 19 (App. 2006).
Evidence - Witnesses
A subpoena directed to someone in a foreign country is considered valid and enforceable only if the person it is directed to is an
FSM national or resident. Pohnpei v. AHPW, Inc., [2006] FMSC 1; 14 FSM Intrm. 1, 19 n.4 (App. 2006).
Civil Procedure - Depositions
If objections in the manner of taking deposition, including disqualification of the officer taking the deposition, are not made so
that they may be promptly cured, the objection is waived. Pohnpei v. AHPW, Inc., [2006] FMSC 1; 14 FSM Intrm. 1, 19 (App. 2006).
Appellate Review - Decisions Reviewable; Evidence
An objection to the admission of evidence not made at trial is not preserved for appeal because in the absence of an objection in
the trial court an issue cannot properly come before the appellate division for review and the appellate division will refuse to
consider the issue. Pohnpei v. AHPW, Inc., [2006] FMSC 1; 14 FSM Intrm. 1, 19 (App. 2006).
Evidence
A duplicate is admissible to the same extent as an original unless a genuine question is raised as to the original’s authenticity
or in the circumstances it would be unfair to admit the duplicate in lieu of the original. Since an original is not required, other
evidence of a writing’s contents is admissible if at a time when an original was under the control of the party against whom
offered, the party was put on notice that the contents would be a subject of proof at the hearing, and the party does not produce
the original at the hearing. When the party had the originals and did not produce them, it has no ground to complain. Pohnpei v. AHPW, Inc., [2006] FMSC 1; 14 FSM Intrm. 1, 19 (App. 2006).
Evidence - Expert Opinion
A Certified Public Accountant’s testimony based on his compilation of financial records and some computations that a layman
could have done and drawing conclusions from them is something an accountant does based on his technical knowledge, skill, experience,
and education and he would therefore qualify as an expert witness. Pohnpei v. AHPW, Inc., [2006] FMSC 1; 14 FSM Intrm. 1, 19-20 (App. 2006).
Evidence - Expert Opinion
Expert testimony based on ideal conditions and not reality would not make the testimony irrelevant; it would only bear on the weight
it would be given. Pohnpei v. AHPW, Inc., [2006] FMSC 1; 14 FSM Intrm. 1, 20 (App. 2006).
Evidence - Hearsay
When there was testimony concerning the world price for pepper and its relation to Pohnpei’s price; when the trial court only
determined that Pohnpei set its price without any regard to the world price, not that it bore a certain relationship to the world
price; and when someone in the pepper export business would be expected to have first-hand knowledge concerning world prices, the
trial court finding that Pohnpei set its buying price without regard to the world price or to the sustainability of the pepper processing
facility as a profit-making venture is not error. Pohnpei v. AHPW, Inc., [2006] FMSC 1; 14 FSM Intrm. 1, 20 (App. 2006).
Torts - Anticompetitive Practices; Torts - Damages
Generally, statutes authorizing multiple damages are remedial and nonpunitive, particularly in anti-trust cases. Pohnpei v. AHPW, Inc., [2006] FMSC 1; 14 FSM Intrm. 1, 20 (App. 2006).
Torts - Anticompetitive Practices; Torts - Damages
The treble damages clause in the FSM Anti-competitive practices statute is remedial and not punitive. The multiple portion of the
damages - that part in excess of the lost profits the trial court determined as actually proven - is imposed by a national statute
enacted in an area in which the national government may legislate. Since this is not a state law tort case in which state law applies
and this is a statutory tort created by a national statute, the national, not the state, statute therefore controls. Pohnpei v. AHPW, Inc., [2006] FMSC 1; 14 FSM Intrm. 1, 20 (App. 2006).
Commerce; Sovereign Immunity; Torts - Anticompetitive Practices
Even under national law, sovereigns, any sovereign, have sovereign immunity. But sovereigns are generally considered to have waived
that immunity when the sovereign has acted as a participant in commerce instead of as a sovereign. It would seem unfair if a state,
as a competitor in a commercial enterprise, could not be held liable and assessed the same damages that another commercial competitor,
who committed the same acts, would be assessed. Pohnpei v. AHPW, Inc., [2006] FMSC 1; 14 FSM Intrm. 1, 20 n.5 (App. 2006).
Statutes - Construction
While it is true in construction of statutes that the word "may" as opposed to "shall" is indicative of discretion or a choice between
two or more alternatives, the context in which the word appears must be the controlling factor. Pohnpei v. AHPW, Inc., [2006] FMSC 1; 14 FSM Intrm. 1, 20-21 (App. 2006).
Torts - Anticompetitive Practices; Torts - Damages
The trial court should state some reason for trebling damages other than just stating the anticompetitive practices statute allows
it. Compelling justification is not needed or required. Pohnpei v. AHPW, Inc., [2006] FMSC 1; 14 FSM Intrm. 1, 21 (App. 2006).
Evidence - Witnesses
The trial court did not commit error when it denied the defendant’s request during trial to permit the State Auditor to be called
as a witness when the State Auditor was not on the state’s witness list; he had not been subpoenaed; and the plaintiff had
no prior notice that this witness would be called. Pohnpei v. AHPW, Inc., [2006] FMSC 1; 14 FSM Intrm. 1, 21 (App. 2006).
Attorneys’ Fees; Torts - Anticompetitive Practices; Torts - Damages
The anticompetitive practices statute itself provides the basis for the plaintiff to recover damages together with reasonable attorneys’
fees and the costs of suit. Pohnpei v. AHPW, Inc., [2006] FMSC 1; 14 FSM Intrm. 1, 21 (App. 2006).
Attorneys’ Fees; Judgments - Relief from Judgment
A trial court’s request for clarification of the attorneys’ fee request documentation was not a grant of relief from judgment
or analogous to relief from judgment, and a trial court’s permitting the submission of the attorney fee request one day late
was within its discretion. Pohnpei v. AHPW, Inc., [2006] FMSC 1; 14 FSM Intrm. 1, 22 (App. 2006).
Appellate Review - Decisions Reviewable
When the issue of custom was not raised before the trial court, it can be disregarded on appeal on that ground alone. Pohnpei v. AHPW, Inc., [2006] FMSC 1; 14 FSM Intrm. 1, 22 n.6 (App. 2006).
Custom and Tradition
An obligation to give aid to someone in need does not mean that it may be done in an illegal manner. Pohnpei v. AHPW, Inc., [2006] FMSC 1; 14 FSM Intrm. 1, 22 & n.7 (App. 2006).
Foreign Investment Law
By statute, 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. Pohnpei v. AHPW, Inc., [2006] FMSC 1; 14 FSM Intrm. 1, 23 (App. 2006).
Foreign Investment Law
By statute, the national government will not take action, or permit action, or permit action to be taken by any state or other entity
within the FSM, that although not formally designated or acknowledged as
compulsory acquisition or expropriation, indirectly has the same injurious effect ("creeping expropriation"), and that if such action takes place, the national government will be responsible for the prompt and adequate compensation of any injured noncitizen. Pohnpei v. AHPW, Inc., [2006] FMSC 1; 14 FSM Intrm. 1, 23 (App. 2006).
Foreign Investment Law
By statute, the national government will 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. Pohnpei v. AHPW, Inc., [2006] FMSC 1; 14 FSM Intrm. 1, 23 (App. 2006).
Statute - Construction
When a public law itself provides that it will be prospective rather than retroactive because it provides that the act will be effective
on the first day of the first month which begins no less than ninety(90) days after the act becomes law, no one can be held liable
under that law for anything that occurred before that effective date. Only acts (or omissions) after that date would give rise to
liability under that Law. Pohnpei v. AHPW, Inc., [2006] FMSC 1; 14 FSM Intrm. 1, 23-24 (App. 2006).
Common Law
Although the FSM Code permits the restatements to be used when applying rules of common law in the absence of written law, the court
can give the Restatement no such weight when interpreting written law - a congressionally-enacted statute. Pohnpei v. AHPW, Inc., [2006] FMSC 1; 14 FSM Intrm. 1, 24 (App. 2006).
Foreign Investment Law
A state would have to actually acquire the property in some fashion for there to be an expropriation, and 32 F.S.M.C. 219 only authorizes
injunctive relief and does not create a cause of action for damages. Pohnpei v. AHPW, Inc., [2006] FMSC 1; 14 FSM Intrm. 1, 24 (App. 2006).
Appellate Review - Standard of Review - Civil Cases
The standard of review for findings of fact is whether the trial court’s findings are clearly erroneous. A finding is clearly
erroneous when the appellate court, after reviewing the entire body of the evidence and construing the evidence in the light most
favorable to the appellee, is left with the definite and firm conviction that a mistake has been committed. Pohnpei v. AHPW, Inc., [2006] FMSC 1; 14 FSM Intrm. 1, 24 (App. 2006).
Torts - Damages - Mitigation of
Under the general principle of mitigation of damages, a plaintiff should not be encouraged to maximize his recovery by sitting on
his rights. Pohnpei v. AHPW, Inc., [2006] FMSC 1; 14 FSM Intrm. 1, 24 (App. 2006).
Torts - Anticompetitive Practices; Torts - Damages
Fifteen years’ worth of "damages" of lost profits is obviously too long for any reasonably certain future projections. Too many
unexpected possible variables could occur. The trial court thus did not abuse its discretion by limiting the damage award to four
years of lost profits. Pohnpei v. AHPW, Inc., [2006] FMSC 1; 14 FSM Intrm. 1, 24-25 (App. 2006).
Nominal damages are usually $1. Pohnpei v. AHPW, Inc., [2006] FMSC 1; 14 FSM Intrm. 1, 25 n.8 (App. 2006).
[14 FSM Intrm.8]
Appellate Review - Standard of Review - Civil Cases
When the trial court’s finding that the trochus business was generally not profitable was not clearly erroneous, that finding
must stand. Pohnpei v. AHPW, Inc., [2006] FMSC 1; 14 FSM Intrm. 1, 25 (App. 2006).
Constitutional Law - Interpretation
Once a plaintiff’s claim fails on its statutory grounds then the court should have considered either the plaintiff’s common
law ground or its constitutional grounds. On the general principle that constitutional adjudication should be avoided unless necessary,
the trial court should first consider any non-constitutional grounds that might resolve the issue. Pohnpei v. AHPW, Inc., [2006] FMSC 1; 14 FSM Intrm. 1, 25-26 (App. 2006).
Civil Procedure - Pleadings; Judgments
If a detrimental reliance cause of action was pled and tried, or tried by the parties’ express or implied consent, the plaintiff
is entitled to have the trial court rule on this cause of action when the plaintiff’s judgment is reversed for the statutory
claim. Pohnpei v. AHPW, Inc., [2006] FMSC 1; 14 FSM Intrm. 1, 26 (App. 2006).
Civil Procedure - Pleadings; Judgments
If a complaint shows that the plaintiff is entitled to any relief which the court can grant, regardless of whether the complaint asks
for the proper relief, the complaint is sufficient, and since, (except as to a party against whom a judgment is entered by default),
every final judgment must grant the relief to which the party in whose favor it is rendered is entitled, even if the party has not
demanded such relief in the party’s pleadings, the trial court should consider whether to find liability and award damages
on a cause of action not specifically named in the complaint but for which evidence was presented at trial. Pohnpei v. AHPW, Inc., [2006] FMSC 1; 14 FSM Intrm. 1, 26 (App. 2006).
* * * *
COURT’S OPINION
DENNIS K. YAMASE, Associate Justice:
This is an appeal by the State of Pohnpei and a cross-appeal by AHPW, Inc. from an FSM Supreme Court trial division decision holding the State of Pohnpei liable to AHPW, Inc. under the FSM Anti-Competitive Practices statute for the demise of its pepper-processing and export business, for which AHPW was awarded treble damages totaling $676,344, and for the demise of its trochus shell button business, for which "nominal" treble damages of $30 were awarded. AHPW, Inc. v. FSM, [2004] FMSC 56; 12 FSM Intrm. 544, 555-56 (Pon. 2004). AHPW was also awarded attorney fees. AHPW’s claims against the FSM national government were earlier dismissed. AHPW, Inc. v. FSM, [2003] FMSC 48; 12 FSM Intrm. 114, 118-19 (Pon. 2003); AHPW, Inc. v. FSM, [2003] FMSC 50; 12 FSM Intrm. 164, 166-68 (Pon. 2003). AHPW also appeals that dismissal.
We affirm the dismissal of the FSM national government and affirm in part and vacate in part AHPW’s judgment against Pohnpei. AHPW’s case against Pohnpei is remanded to the trial court for further proceedings concerning the trebling of damages and AHPW’s claims over its trochus shell button business. Our reasons and our instructions follow.
I. Background
AHPW, Inc., engaged in two business activities, processing and marketing black pepper, primarily for export, and manufacturing for export buttons from trochus shells. The pepper business operated under the trade name Island Traders. The button business used the name AHPW. Island Traders used mature pepper berries to create a premium, high quality product and would not buy pepper that did not meet its quality standards.
Pohnpei pepper farmers complained that Island Traders was not buying all of their pepper. In response, the State of Pohnpei, using funds appropriated by the Legislature for that purpose, established a pepper processing facility that began buying pepper in mid-1995. It used state funds to buy raw pepper from Pohnpei pepper farmers. Pohnpei paid the pepper farmers $1 a pound, which was ten cents more per pound than Island Traders’ price. The trial court found that Pohnpei arrived at this price without regard to the world market price of pepper or the sustainability of the pepper processing facility as a profit-making venture. AHPW, Inc., 12 FSM Intrm. at 548. Pohnpei bought all the pepper offered to it, regardless of quality and including immature berries and stems.
In order to make a profit and stay in business, the maximum that Island Traders could pay was 90 cents per pound of pepper. Since Pohnpei was offering ten cents more per pound than was Island Traders, and since Pohnpei bought all the pepper offered to it regardless of quality, the farmers began selling all of their pepper to the state. Although Island Traders repeatedly communicated its concerns to Pohnpei about its loss of pepper supply, Pohnpei did not change its pepper buying pattern.
Pohnpei’s intervention in the Pohnpei pepper market deprived Island Traders of its source of supply for its pepper processing operation. In an attempt to remain in operation, Island Traders bought the finished product from Pohnpei’s plant and reprocessed it to meet its own quality standards, but the amount that it could recover was too low to make a profit, and it discontinued this practice. In June, 1998, Island Traders discharged its workers and closed its doors. The trial court found that Pohnpei’s pepper processing facility was never intended to be a self-sustaining, profit-making operation, and ultimately failed and went out of business. AHPW, Inc., 12 FSM Intrm. at 548.
AHPW began manufacturing shell buttons in 1985, and a steady, reliable supply of trochus shell was an on-going concern. When AHPW had no trochus shell to process, Island Traders "carried" AHPW by paying AHPW’s expenses. AHPW sold all of the trochus products it manufactured to foreign buyers. The button business made a profit in only one year. Id. at 549, 550.
Whether to hold a trochus harvest was a decision made exclusively by the State of Pohnpei. From 1969 to 1994, a trochus harvest was held each year except for 1971, 1974, 1980, 1983, 1985, 1987, 1989, and 1993. The average annual harvest for this entire period, including the years for which no harvest was held, was 77 metric tons. AHPW needed 60 metric tons of trochus annually to have adequate trochus to supply its button factory. From 1969 to 1994, there were never two years in a row in which there was no harvest. After 1994, the next harvest was not until 1999, by which time AHPW had gone out of business.
When trochus harvests were held in the early nineties, AHPW was not able to buy all the trochus that it needed since the procedure in place was for the buyers to wait for individual harvesters to bring their shells to AHPW or another buyer for purchase. Since all the buyers had to pay the same price, whether AHPW got enough trochus depended on the harvesters’ subjective choice to bring their shells to AHPW.
Starting in 1995, Pohnpei made repeated representations to AHPW that it would hold an annual trochus harvest. AHPW, apparently relying on Pohnpei’s representations, continued in operation until 1998. After the trochus harvests ended, AHPW could no longer make commitments to its customers since it had no assurance that it would have a source of supply for trochus shell. Because it could not make commitments, it lost customers. AHPW closed its trochus shell button operation in 1998.
On August 26, 1999, AHPW, Inc. filed suit against the Federated States of Micronesia and the State of Pohnpei alleging that they violated Title 32 of the FSM Code and the Due Process and Equal Protection Clauses of the FSM and Pohnpei Constitutions and thus caused the demise of its pepper business and its trochus shell button business. AHPW’s claims against the Federated States of Micronesia were dismissed in 2003, AHPW, Inc. v. FSM, [2003] FMSC 48; 12 FSM Intrm. 114, 118-19 (Pon. 2003); AHPW, Inc. v. FSM, 12 FSM Intrm
164, 166-68 (Pon. 2003), as were AHPW’s claims under FSM Code Title 32, chapter 2, AHPW, Inc., 12 FSM Intrm. at 119-22; AHPW, Inc., 12 FSM Intrm. at 166-68.
The remaining claims were tried on October 20-23, 2003. On July 8, 2004, the trial court found Pohnpei liable to AHPW on AHPW’s Title 32, chapter 3 anticompetitive practices claims for damages and attorneys’ fees under that statute and thus did not reach AHPW’s constitutional claims. AHPW, Inc., 12 FSM Intrm. at 551. That decision awarded AHPW $225,448 in damages for the pepper business’s lost profits, trebled to $676,344, id. at 556, and $10 "nominal damages," trebled to $30, for its trochus business because it could not find that the trochus business would have been profitable, id. at 555. Both Pohnpei and AHPW timely appealed that decision. On November 9, 2004, the trial court issued an order calculating and awarding attorneys’ fees to AHPW. AHPW, Inc. v. FSM, [2004] FMSC 33; 13 FSM Intrm. 36 (Pon. 2004). On February 28, 2005, a single appellate justice, on Pohnpei’s motion, dismissed AHPW’s cross-appeal of the attorneys’ fee award, but denied the dismissal of the rest of AHPW’s cross appeal. Pohnpei v. AHPW, Inc., [2005] FMSC 6; 13 FSM Intrm. 159 (App. 2005).
II. Review of Single Justice Orders
Both Pohnpei and AHPW, Inc. asked that the full panel reconsider that ruling. Pohnpei asked the full appellate panel to review the ruling denying the dismissal of AHPW’s entire cross-appeal and denying dismissal of AHPW’s argument based on the principle of detrimental reliance. Id. at 161. Cross-appellant AHPW asked the full appellate panel to reconsider the single justice’s ruling that dismissed its appeal of the trial court’s calculation of attorneys’ fees awarded AHPW. Id.
A. Reviewability of a Single Justice Order
The pertinent appellate procedure rule provides that:
a single article XI, section 3 justice of the Supreme Court appellate division may entertain and may grant or deny any request for relief which under these rules may properly be sought by motion, although a single justice may not dismiss or otherwise determine an appeal, except upon stipulation of all parties, or upon failure of a party to comply with the timing requirements of these rules. . . . The action of a e nglticestice may be reviewed by the court.
FSM App. R. 27(c). The use of the word "may" in Appellate Rule 27(c) ines the review by the full appellate panel of all single justice orders is not mandatordatory. Thy. The word "may" instead of "shall" indicates some discretion. It does not, however, indicate that the discretion lies with the court. If the word "shall" replaced the word "may" then a full appellate panel would have to review every single justice order - an absurd result because most single justice orders are purely procedural and of no further interest to anyone by the time the full panel meets. As an example, there were six single justice orders issued in this case before August 19, 2005, five of which concerned nothing more than requests to enlarge time for filings, and it is only the other order that the two parties want reviewed.
"While it is true in construction of . . . rulat thd d ‘may6;may’ as opposed to ‘shall’ is indicative of discretion or a choice between two or more alternatives, the context in which the word appears must be the controlling factor." Kama v. Chuuk, [2002] FMCSC 5; 10 FSM Intrm. 593, 599 (Chk. S. Ct. App. 2002). In Panuelo v. Amayo, [2002] FMSC 37; 11 FSM Intrm. 205, 209 (App. 2002) the full appellate panel, while noting that review was discretionary, declined to revisit a series of single justice orders which concerned approval of a supersedeas bond and which did not concern the appeal’s merits or dismissal of any of the appellant’s claims because the appeal was fully briefed and ready to be heard on its merits and because the full court found that the single justice’s orders directing distribution of a portion of the cash supersedeas bond was sufficient to protect the appellees
The full appellate panel in Panuelo did review the previous orders and the motion seeking their review, but declined to hear oral argument on the subject before denying the motion. The movant in Panuelo was heard on the papers.
The single justice order that the parties seek reviewed here involves dismissal of one of AHPW’s claims in its cross-appeal and the denial of Pohnpei’s motion to dismiss the rest of AHPW’s cross-appeal. These are substantive issues for which the context of Appellate Rule 27 indicates that the full appellate panel must review if asked. Rule 27(c) generally restricts a single justice to issuing procedural orders and from dismissing appeals (with two exceptions). "Any action that a single judge takes can be reviewed by the court, on motion by the aggrieved party." 16A Charles Alan Wright, Arthur R. Miller, & Edward H. Cooper, Federal Practice and Procedure § 3973.3, at 485 (1999) (dsinussing identical provision in U.S. Federal Rules of Appellate Procedure).[1] Even whe Appellate Rules authorize single appellate judges to entertain requests for relief, the the single appellate judge’s decisions remain subject to correction by the appellate court. Hohn v. United States, [1998] USSC 69; 524 U.S. 236, 244-45[1998] USSC 69; , 118 S. Ct. 1969, 1974, 141 L. Ed. 2d 242, 254 (1998). A single appellate judge’s order denying a motion to dismiss an appeal is a procedural order requiring the appeal to be briefed and put on the calendar; it is not a determination having preclusive effect on the appeal’s validity. Pioneer Properties, Inc. v. Martin, [1985] USCA10 289; 776 F.2d 888, 890 (10th Cir. 1985). See also Wainit v. Weno, [2002] FMCSC 21; 10 FSM Intrm. 601 (Chk. S. Ct. App. 2002) (single justice’s denial of motion to vacate dismissal reviewed by full appellate panel); cf. Damarlane v. Pohnpei, [1999] FMSC 27; 9 FSM Intrm. 114, 119 (App. 1999) (notice of appeal filed in the FSM Supreme Court ineffective while a motion to reconsider single justice ruling is pending before the full Pohnpei Supreme Court appellate panel). Thus the discretion indicated by the word "may" lies primarily with the parties and makes it mandatory for the full appellate panel to review a single justice order when an aggrieved party asks it to. It is not mandatory that the full appellate panel review every order made by the single justice.
In this case, the single justice order denied dismissal of AHPW’s cross-appeal, but granted dismissal of one of AHPW’s claims on its cross-appeal. It was thus subject to review, and possible correction, upon an aggrieved party’s motion. AHPW and Pohnpei both made such motions. We, therefore, reviewed the single justice order. We could have done this review on the papers and announced our decision beforehand either in writing (as was done in Panuelo) or orally at the start of oral argument on the merits. Instead, we chose to permit the parties a short time to argue and then took a short recess.[2] We then announced our decision confirming the single justice order dismissing AHPW’s attorney fees cross-appeal, and denying Pohnpei’s motion to dismiss the rest of AHPW’s cross-appeal, and then proceeded to the main argument on the merits. This part of the opinion memorializes that oral confirmation.
B. Pohnpei’s Renewed Motion to Dismiss
Pohnpei’s original motion asserted that AHPW’s opening brief failed to make proper citations to the record as required
by the appellate rules; included extraneous matters (the issues of detrimental reliance and of AHPW’s attorney fees); and had
an inadequate appendix and urged that AHPW’s cross appeal is without merit on its face and that these alleged deficiencies
were grounds to dismiss AHPW’s cross-appeal without review by a full appellate panel since such a review would be a waste of
judicial resources. The single justice order denied the motion (except for the attorneys’ fee issue discussed below) because
the alleged deficiencies in AHPW’s brief, would, if true, adversely affect AHPW’s power to persuade the full appellate
panel that the trial court erred so no further relief was necessary and concluded that the parts of the brief arguing detrimental
reliance would not be stricken because it was AHPW’s burden to persuade the full
appellate panel that the issue was raised below or is properly before the appellate division.
Pohnpei renewed its contention that AHPW’s appeal should be dismissed on the ground that AHPW’s appendix did not include the transcript to which AHPW’s brief cites. However, the full trial transcript is included in appellant Pohnpei’s appendix. We see no reason why the cross-appellant should be required to also file an identical trial transcript. One complete trial transcript in the appellate file is sufficient. Two would be a waste of resources. We therefore confirmed the single justice order denying dismissal.
C. AHPW’s request concerning its attorneys’ fees
The trial court issued its decision on July 8, 2004, AHPW, Inc. v. FSM, [2004] FMSC 56; 12 FSM Intrm. 544 (Pon. 2004), and entered judgment for AHPW against Pohnpei on July 8, 2004 and judgment in favor of the FSM against AHPW on August 27, 2004. AHPW filed notices of appeal on August 16, 17, and 30, 2004. On November 9, 2004, the trial court issued an order determining the amount of attorneys’ fees to be awarded AHPW. AHPW, Inc. v. FSM, [2004] FMSC 33; 13 FSM Intrm. 36 (Pon. 2004). AHPW did not file a further notice of appeal. Pohnpei moved to dismiss AHPW’s attorney fee award appeal and strike the part of AHPW’s brief that argued it. The single justice order granted that motion. Pohnpei v. AHPW, Inc., [2005] FMSC 6; 13 FSM Intrm. 159, 161 (App. 2005). AHPW asked that the full panel reconsider this.
AHPW contended that the award of attorneys’ fees is properly on appeal because it was part of the July 8, 2004 judgment. AHPW’s right to receive a fee award was part of that judgment, but the method of calculating the fee award and the amount awarded was not. That did not became an issue until the trial court issued its November 9, 2004 order, AHPW, Inc. v. FSM, [2004] FMSC 33; 13 FSM Intrm. 36 (Pon. 2004). No notice of appeal was filed from that order. At oral argument, AHPW conceded that the majority rule in U.S. jurisdictions is that a separate notice of appeal is required to appeal a post-judgment fee award, but urged the court to adopt the minority rule.
We concluded, however, that since it was the method of calculation of attorney fees and the amount awarded that AHPW contended was in error and should be considered by the appellate court, a new notice of appeal was required for that post-judgment order. See Felix v. Adams, [2004] FMSC 57; 13 FSM Intrm. 28, 29 (App. 2004). "Where no notice of appeal from a post-judgment order awarding attorneys’ fees is filed, the [appellate court] lacks jurisdiction to review the order." Culinary & Serv. Employees Union v. Hawaii Employee Benefit Admin., Inc., [1982] USCA9 1684; 688 F.2d 1228, 1232 (9th Cir. 1982) (trial court made fee award after judgment appealed; no notice of appeal filed from award; appellate court was without jurisdiction to determine if trial court abused discretion under a fee award statute). Therefore, since no notice of appeal was ever filed from the November 9, 2004 post-judgment attorneys’ fee award, the appellate division lacked jurisdiction over it, and, upon review, we confirmed the single justice’s order dismissing AHPW’s attorney fee appeal on that ground.
III. Issues
A. Presented by Appellant State of Pohnpei
Pohnpei contends that the trial court erred (1) by ruling that Pohnpei was a "person" under the Anti-competitive Practices statute; (2) by applying that statute to tort matters and purely intrastate affairs; (3) by disregarding applicable state statutes and relevant case law; (4) by not deferring a political question to the non-judicial branches of government; (5) by not dismissing the complaint on statute of limitations, laches, or estoppel grounds; (6) by adopting the foreign concept of continuing tort without independent analysis of whether it was consistent with FSM law and customary practice; (7) by finding Pohnpei liable despite the lack
of showing of all elements of the purported statutory violation; (8) by admitting irrelevant documents into evidence and by admitting the deposition transcript of Richard T. Koskella; (9) by awarding treble damages in the absence of a specific finding justifying the award, or by automatically trebling the damages without justification to support the same, or by awarding punitive damages; (10) by depriving Pohnpei of the opportunity to present relevant and important evidence at trial; (11) by awarding attorneys’ fees to AHPW without any basis to do so and despite AHPW’s violation of rules and court directives; (12) by awarding damages to AHPW although AHPW was not held liable on a loan in a separate case; and (13) by ignoring the Judicial Guidance Clause.
B. Presented by the Cross-Appellant AHPW, Inc.
In its cross-appeal, AHPW, Inc. contends that the trial court erred (1) when it failed to hold defendant Federated States of Micronesia liable under Public Law No. 10-49; (2) by failing to compensate AHPW for its full loss in its pepper business; (3) by failing to award AHPW compensatory damages for its losses in its trochus business; (4) by not deciding whether Pohnpei was liable to AHPW for violations of the constitutional protections of due process and equal protection; and (5) by failing to decide whether Pohnpei was liable to AHPW based upon detrimental reliance. AHPW’s sixth assignment of error - that AHPW was not awarded the full amount of the attorneys’ fees it asked for - was earlier dismissed. See supra II.C.
C. Standard of Review
We review de novo those issues which are questions of law. George v. Nena, [2004] FMSC 9; 12 FSM Intrm. 310, 313 (App. 2004). For those issues challenging a trial court’s factual findings the standard of review is whether those findings are clearly erroneous, and in determining whether a factual finding is clearly erroneous, we must view the evidence in the light most favorable to the appellee. Id.
IV. Pohnpei’s Appeal
Pohnpei asks the appellate court to vacate the trial court judgment, that any matters remanded to the trial court be presided over by another judge, and that the parties be allowed to gather evidence, including through discovery, and present that evidence at a further trial. It bases this request on the following grounds.
A. Is Pohnpei a "Person" under 32 F.S.M.C. 301 et seq.?
Pohnpei contends that it is not a "person" under Title 32 and therefore cannot be held liable under that title. It relies on its reading that 32 F.S.M.C. 301 does not encompass it. "As used in this chapter, ‘person or persons’ includes an individual or individuals, corporations, firms, partnerships or any other association existing under or authorized by the laws of the Trust Territory." 32 F.S.M.C. 301.
The trial court concluded that Pohnpei was a person under 32 F.S.M.C. 301 et seq. partly because § 306(2) provided that "TrustTrust Territory and any of its political subdivisions and public agencies shall be deemed a person within the meaning of this section’ (emphasded), meaning § 306, and suion (1) obviousliouslyously is part of § 306." AHPW, IncFSM, /u>[2000] FMSC 2; , 9 FSM Intrm. 301, 305 (Pon. 2000) (quoting 32 F.S.M.C. 306(2)). Subsection 306(1) reads: "Any person who violates section 302 or 303 of this chapt guilty of a misdemeanor, and upon conviction thereof shallshall be punished by a fine of not less than $50 nor more than $5,000."
Pohnpei argues that 32 F.S.M.C. 306(2) only authorizes Pohnpei to prosecute or sue for anticompetitive practices that violate the rights of others, not to be sued itself. Pohnpei also cites a number of U.S. Supreme Court cases which held that the U.S. anti-trust statutes, from which the FSM anticompetitive practices statute is said to be derived, do not apply to U.S. states.
However, in each of those cases, the state was acting as a regulator of commerce, not as a competitor or participant in commerce. In this case, Pohnpei was AHPW’s competitor, and a participant in, the pepper buying and processing business. Only in relation to the trochus business did Pohnpei act as a regulator. It did not buy, or process, or sell trochus. It regulated its harvest and sale.
Pohnpei states that it decided to engage in commercial activity and there is no law preventing it from doing so. That is true. But it would only be fair that if Pohnpei decides to engage in commercial activity that it should be subject to the same rules as any other participant. We cannot see why Pohnpei should not, when acting as a commercial enterprise, qualify as a person since all other commercial enterprises qualify as persons and since Pohnpei is an association existing under FSM (reading FSM for Trust Territory) law - a state is an entity that exists under the supreme FSM law - the Constitution. We are thus persuaded by the trial court’s reasoning.
We affirm the trial court’s holding that Pohnpei was subject to 32 F.S.M.C. 301 et seq. and a person under that statute for the purpose of AHPW’s claims for its pepper business. We, however, reverse the trial court holding that Pohnpei was liable under 32 F.S.M.C. 301 et seq. for its actions in relation to the trochus harvest since Pohnpei acted solely in its sovereign regulatory capacity. The usual cause of action when a governmental entity has exercised its regulatory powers improperly is a constitutional due process claim. AHPW made such a claim, but the trial court did not rule on it, and AHPW has raised the issue in its cross-appeal. Since Pohnpei’s liability under 32 F.S.M.C. 301 et seq. for AHPW’s trochus business is reversed, the trial court judgment on that claim is vacated and, on remand, the trial court will proceed to rule on AHPW’s detrimental reliance, and perhaps its constitutional, claims. See infra V.D. and E.
B. Interstate and Foreign or Intrastate Commerce and Tort?
Pohnpei asserts that the trial court should not have applied Title 32 to what Pohnpei describes as tort matters and intrastate commerce. It asserts that Pohnpei was only engaged in intrastate commerce and that Title 32 cannot be applied to it because national statutes can only regulate interstate commerce.
Pohnpei mischaracterizes the nature of the commerce involved. Trochus was harvested to be sold for the export market. Pepper was grown and processed for the export trade. That is foreign commerce. That Pohnpei arranged its affairs so that its purchases and sales were all in state does not take it out of the stream of foreign commerce. The primary market for pepper was not on Pohnpei, but overseas. Pohnpei bought pepper in competition with buyers for export and Pohnpei processed pepper which it sold to exporters (for instance, AHPW for awhile).
The national government is expressly delegated the power to regulate foreign and interstate commerce. FSM Const. art. IX, § 2(g). Title a valid exercixercise of that power. The anticompetitive practices statute in Title 32 creates a statutory tort. (A tort is any civil cause of action not based on contract.) While tort lspecicommon law torts orts like like negligence, is primarily a state responsibility, the national government may create tort law when legislating in an area that the Constitution has expressly delegated to Congress the power to legislate. Pohnpei cannot rely on this ground.
C. State Statutes and Relevant Case Law
Pohnpei asserts that the trial court further violated the federalism principle by disregarding applicable state statutes that provide that the anticompetitive practices statute does not apply to the State of Pohnpei and case law that says the court will not lightly assume that Congress intends to encroach upon state powers. Pohnpei also contends that the court should have deferred to state law in this diversity case.
Pohnpei’s argument is misplaced. This case did not come before the FSM Supreme Court based on diversity jurisdiction. It came before the court based on the court’s exclusive jurisdiction over cases where the national government is a party. FSM Const. art. XI, ҈6(a). Also,Also, AHPW’s asserted claims primarily arose under national law - Title 32 of the FSM Code and provisions of the national constitution. The FSM Supreme Court may also exerjurisdiction over cases aris arising under the FSM Constitution or national law. FSM Const. art.§ 6(b). This This is not a siversity case where state law provides the rules of decision.
As stated above, the national government is expr dele the power to regulate foreign and interstate come commerce, FSM Const. art. IX, §§), (g), and Title 32 is a valid exercise of that power. While Pohnpei’s own state statute prohibiting anticompetitive practices excluded its application tnpei itself, the national statute does not exclude states ftes from its coverage, although Congress could easily have exempted them from the statute’s operation. This lawsuit, and the trial court’s decision, are based on a cause of action created by the national, not the state, statute covering an activity - foreign and interstate commerce - over which the national government may legislate. A state cannot nullify a valid exercise of national power by enacting a state statute. Pohnpei state law exempting it from anticompetitive practices liability does not apply to a case brought under the national anticompetitive practices statute. It would, of course, apply to an action brought under the state anticompetitive practices statute.
D. Political Question
Pohnpei contends that the question of whether it should have declared a trochus harvest is a political question that the court cannot become involved in because Pohnpei state law gives that power to a state regulatory body. Pohnpei also contends that the trial court decision would dictate to the state how it should engage in (presumably pepper) business or in the market.
When there is in the Constitution a textually demonstrable commitment of an issue to a coordinate branch of government, such as Congress being the sole judge of the elections of its members, it is a nonjusticable political question not to be decided by a court because of the separation of powers provided for in the Constitution. Aten v. National Election Comm’r (III)[1993] FMSC 28; , 6 FSM Intrm. 143, 145 (App. 1993). There is no textually demonstrable constitutional commitment that declaring a trochus harvest is reserved solely to one branch of government without the involvement of any other branch or that the power to engage in commercial activity is reserved solely to one branch of government. The political question doctrine does not apply here. Although Pohnpei contends that the trial court decision would dictate to it how it should engage in business or in the market, all the trial court decision says in that regard is that the state must abide by the same rules as anyone else engaging in business or in the market.
To follow Pohnpei’s political question argument to its logical conclusion would mean that no court could ever rule an executive action illegal because some law empowers the executive to make that decision. In other words, the principle of judicial review, enshrined in both the FSM and Pohnpei Constitutions, would be overthrown and the government’s actions could never be questioned or reviewed in any court. That cannot be so.
E. Statute of Limitations, Laches, or Estoppel
Pohnpei asserts that the trial court abused its discretion by not dismissing the complaint on the grounds of statute of limitations, laches, or estoppel. Pohnpei contends that the limitations period of two years in the Pohnpei Government Liability Act of 1991, Pon. S.L. No. 2L-192-91, § 4, applies and that AHPW&;s217;s cause of action accrued in 1995 when Pohnpei went into the pepper business in competition with
[14 FSM In16]
AHPW so that when the suit was filed in 1999 it was time-barred. Pohnpeohnpei also asserts that the case should have been dismissed on the ground that AHPW slept on its rights (laches).
The trial court assumed that the two-year limitations period in the Pohnpei Government Liability Act of 1991, Pon. S.L. No. 2L-192-91, § 4, applied because both es ties proceeded under that assumption.
Both parties have proceeded on the basis that under Pohnpei State Law No. 2-91, the applicable statute of limitations is two years. No applicable limitations period iiod is specified in the national statute under which AHPW has proceeded, and in such a case the court will apply the most closely analogous state law limitations period so long as doing so does not frustrate or interfere with national policy.
AHPW, Inc., 12 FSM Intrm. at 553. The trial court then adopted the continuing tort principle that
dictates that when there is an ongoing pattern of tortious activity where no single incident may be fairly identified as the cause of the harm suffered, then it is appropriate to regard the total effect of the conduct as actionable, and the statute of limitations does not begin to run until the conduct has ceased.
Id. The trial court concluded that since the case was filed on August 26, 1999, it was well within two years of Pohnpei’s ongoing tortious conduct and that therefore the two-year statute of limitations did not foreclose the lawsuit. Pohnpei concedes that its actions continued to within two years of this suit’s filing.
The trial court did not consider whether the catch-all six-year limitations period in the FSM Code, 6 F.S.M.C. 805, would apply since a national statute cause of action was being tried. We will not consider it now because we find the trial court’s continuing tort reasoning persuasive. When the "tortious conduct" starts, a potential plaintiff might be lulled into thinking it will not last, or he will survive it, or the tortfeasor will change its behavior. In this case, Pohnpei evidently told AHPW on several occasions, just wait, things would change.[2]
Pohnpei barely argues laches in its brief and only just mentions estoppel. Laches has two elements - the passage of a nonspecific amount of time during which the plaintiff engages in inexcusable delay or lack of diligence in bringing suit, and resulting prejudice to the defendant. Laches is always applied separate from and irrespective of the statute of limitations. Nahnken of Nett v. Pohnpei, [1996] FMSC 3; 7 FSM Intrm. 485, 489 (App. 1996). Pohnpei has not shown why the delay was inexcusable or how it was prejudiced by the delay. Pohnpei’s assertions of laches and estoppel are without merit.
F. Adoption of the Continuing Tort Concept
Pohnpei further contends that the continuing tort concept is contrary to Pohnpeian customary practice to resolve disputes as quickly as possible. We think that the continuing tort concept is more in line with Micronesian customary practice than the concept of statute of limitations is. Furthermore, Pohnpei introduced no evidence of customary law at anytime before the appeal so Pohnpei is deemed to have waived the issue. Paul v. Celestine, [1990] FMSC 2; 4 FSM Intrm. 205, 210 (App. 1990) (issue generally must first be raised in the trial court before an appellate court can consider it). The statute of limitations may be said to be the statutory embodiment of encouragement of prompt resolution of disputes. The statute of limitations issue was left to trial and Pohnpei had its opportunity to argue how it should be applied both during trial and in its closing brief filed December 8, 2003. This contention is thus without merit.
G. Showing of All Elements of the Statute
Pohnpei contends that the trial court did not find all the elements required for liability under 32 F.S.M.C. 301 et seq. It contends that the trial court did not find the required "combination." Pohnpei contends that for it to be liable the court had to find that it acted in combination with some other person or persons. AHPW contends that Pohnpei did act in combination with the pepper farmers.
The statute requires "one or more persons to create or use an existing combination of capital, skill, or acts the effect of which is . . .ق F.S 302. 302. The tThe trial court made findings that would show a combination. It found that the Pohnpei Legislature provided capital and the Pohnpei pepper buyers committed certain acts (buying pepper at $1 a pound including immature berries and stems regardless of quality). More examples could be shown if needed. Since the statute is clear that only one "person" can provide the needed "combination," Pohnpei’s contention that the trial court had to, and failed to, find that Pohnpei acted in combination with someone else has no merit.
H. Admission of "Irrelevant" Documents and of Koskella Deposition Transcript
Pohnpei contends that the deposition of Richard T. Koskella should not have been admitted because it was double hearsay, because Koskella was not unavailable for trial and because it was unfairly prejudicial; that copies of certain letters should not have been admitted because they violated the "best evidence" rule; that since George Kim’s testimony concerning AHPW’s financial records was based on his compilation of AHPW’s records it was not expert testimony and should have been excluded as a lay opinion; and that any reference to Pohnpei’s price of $1 a pound being higher than the world market price was hearsay to be excluded.
Koskella’s deposition was admitted by the trial court on the ground that Koskella was in Texas and unavailable for trial. Civil Rule 32(a)(3) permits a witness’s deposition to "be used by any party for any purpose if the court finds: . . . (B) that the witness isofff of the island at which the trial or hearing is being held, unless it appears that the absence of the witness was procured by the party offering the deion."ella, in his deposition stated that, because of h of his cuis current job he no longer traveled to the Pacific and that he did not expect to be in Pohnpei in the next six months. Since he was in Texas, an FSM Supreme Court subpoena could not compel him to appear.[3] Use of Koskella’s deposition because he was off-island was therefore proper.
The double-hearsay objection to Koskella’s deposition is based on the fact that the person who certified it as true and accurate was not in court to authenticate the certification. No motion to strike or suppress the deposition was made before trial. But
[e]rrors and irregularities in the manner in which the testimony is transcribed or the deposition is prepared, signed, certified, sealed, indorsed, transmitted, filed, or otherwise dealt with by the officer under Rules 30 and 31 are waived unless a motion to suppress the deposition or some part thereof is made with reasonable promptness after such defect is, or with due diligence might have been, ascertained.
FSM Civ. R. 32(b)(4). If objections in the manner of taking deposition, including disqualification of the officer taking the deposition, are not made so that they may be promptly cured, the objection is waived. FSM v. Skico, Ltd. (IV), [1996] FMSC 33; 7 FSM Intrm. 628, 630 (Chk. 1996). Pohnpei therefore waived this objection by not raising it before trial when it had ample opportunity to do so.
Pohnpei contends that the Koskella deposition testimony was unfairly prejudicial. This objection was not made at trial. An objection not made at trial is not preserved for appeal because in the absence of an objection in the trial court an issue cannot properly come before the appellate division for review and the appellate division will refuse to consider the issue. Loney v. FSM, [1987] FMSC 8; 3 FSM Intrm. 151, 154 (App. 1987). Furthermore, having reviewed the deposition, we do not think it can be characterized as unfairly prejudicial.
Pohnpei contends that various exhibits, which were unsigned copies of letters, should not have been admitted but that instead the originals had to be offered. Those letters were sent by AHPW’s President to Pohnpei state officials. The originals would have been in Pohnpei’s hands.
"A duplicate is admissible to the same extent as an original unless (1) a genuine question is raised as to the authenticity of the original or (2) in the circumstances it would be unfair to admit the duplicate in lieu of the original." FSM Evid. R. 1003. The originals were in Pohnpei’s hands. An original is not required, and other evidence of the contents of a writing is admissible if "[a]t a time when an original was under the control of the party against whom offered, he was put on notice, by the pleadings or otherwise, that the contents would be a subject of proof at the hearing, and he does not produce the original at the hearing." FSM Evid. R. 1004(3). Pohnpei had the originals and did not produce them. Pohnpei thus has no ground to complain.
Pohnpei contends that George Kim’s testimony about AHPW’s financial records was based on his compilation of AHPW’s financial records and some computations that a layman could have done, and that therefore it was not expert testimony and should have been excluded as a lay opinion. Since Kim was a Certified Public Accountant and compilation of financial records and drawing conclusions from them is something an accountant does based on his technical knowledge, skill, experience, and education, he would qualify as an expert witness. Pohnpei also argues that some of Kim’s testimony was irrelevant because it was based on ideal conditions and not reality. This would not make the testimony irrelevant, it would only bear on the weight it would be given.
Pohnpei asserts that any reference to its price of $1 a pound as being higher than the world market price was hearsay to be excluded and that the world price was never established. This is groundless. A particular world price might never have been established since it would have varied over time. There was testimony by AHPW’s witness concerning the world price for pepper and its relation to Pohnpei’s price. The trial court only determined that Pohnpei set its price without any regard to the world price, not that it bore a certain relationship to the world price. Also, someone in the pepper export business would be expected to have first-hand knowledge concerning world prices. The finding that the trial court made was that Pohnpei set its buying price without regard to the world price or to the sustainability of the pepper processing facility as a profit-making venture. Pohnpei cannot show error here.
I. Treble Damages Award and Punitive Damages
Pohnpei contends that treble damages were improperly awarded in the first place, that treble damages are a form of punitive damages, and that punitive damages cannot be awarded against the state because a state statute bars punitive damages against the state. Pohnpei also contends the treble damage award was improper because there must be compelling justification for treble damages and the trial court did not make a specific finding to support such severe sanctions, but seemed to assume that the law automatically trebled the damages.
Generally, statutes authorizing multiple damages are remedial and nonpunitive, particularly in anti-trust cases. See, e.g., American Soc’y of Mechanical Eng’rs, Inc. v. Hydrolevel Corp., [1982] USSC 145; 456 U.S. 556, 575[1982] USSC 145; , 102 S. Ct. 1935, 1947, 72 L. Ed. 2d 330, 345-46 (1982) (private antitrust action); Brunswick Corp. v. Pueblo Bowl-O-Mat, Inc., [1977] USSC 14; 429 U.S. 477, 485-86[1977] USSC 14; , 97 S. Ct. 690, 696[1977] USSC 14; , 50 L. Ed. 2d 701, 710 (1977) (a "treble-damages provision, which makes awards available only to injured parties, and measures the award by a multiple of the injury actually proved, is designed primarily as a remedy") and cases cited therein. The treble damages clause in the FSM Anti-competitive practices statute is thus remedial and not punitive. Furthermore, the multiple portion of the damages - that part in excess of the lost profits the trial court determined as actually proven - is imposed by a national statute enacted in an area in which the national government may legislate. This is not a state law tort case in which state law applies. This is a statutory tort created by a national statute.[4] The national, not the state, statute therefore controls.
The statute under which Pohnpei was found liable authorizes treble damages. "Any person who is injured in his business, personal property, or real property by reason of another’s violation of sections 302 or 303 of this chapter may sue therefor . .nd may recover three tree times the damages sustained by him . .;. ." 32 F.S.M.C. 306. 306(2). "While it is true in coction of statutes . . . that the word16;may’#8217; as opposed to ‘shal;shall’ is indicative of discretion choicween two or more more alternatives, the context in which thch the word appears must be the controlling factor." Kama, 10 FSM Intrm. at 599. We think that the trial court should have stated some reason for trebling damages other than just the statute allows it. We do not think "compelling" justification is needed or required.
The trebling of damages is therefore vacated. It is remanded to the trial court for it to determine whether, based on the facts before it, multiple damages should be awarded, and, if so, to put on the record its reasons for doing so.
J. Pohnpei’s Excluded Evidence
Pohnpei asserts that it was denied due process because it was denied the opportunity to present important evidence to correct the trial record because the trial court denied its request to call the State Auditor as a witness to interpret the financial documents presented by George Kim, the plaintiff’s witness, and to refute Kim’s testimony. The trial court denied Pohnpei’s request during trial to permit the State Auditor to be called as a witness. The State Auditor was not on the state’s witness list. He had not been subpoenaed. The plaintiff had no prior notice that this witness would be called. Pohnpei’s justification for its request was that the FSM had been dismissed as a defendant three weeks before trial and that up until then, Pohnpei and the FSM had expected to call a common expert witness and that Pohnpei had not received the Governor’s permission to call the State Auditor as a witness until the day of trial. AHPW objected on the ground that it had no notice of this witness and that if it had had notice, it would have deposed him before trial.
Pohnpei’s justification does not explain why the State Auditor was not on Pohnpei’s witness list before trial, or why some other "common expert witness" was not on the list or was not subpoenaed to testify, or why, once the FSM had been dismissed as Pohnpei’s co-defendant, Pohnpei did not, at that time, notify AHPW and the court that it would seek to add the State Auditor as a witness. Instead Pohnpei waited until its turn to present evidence at trial before asking to add the State Auditor as its witness.
Given these circumstances, Pohnpei was not deprived of due process. It was Pohnpei’s own failure for it to wait until the middle of trial to propose the State Auditor as its own expert financial witness. In fact, AHPW could have claimed it was denied due process if the State Auditor had been permitted to testify without prior notice to AHPW and without AHPW having been able to depose him, or to prepare to rebut him, before trial. The trial court did not commit error by denying Pohnpei’s request to call the State Auditor as a witness.
K. Attorneys’ Fees Award to AHPW
Pohnpei asserts that there was no legal basis to award AHPW attorneys’ fees in this action. It also contends that the trial court should have refused to grant AHPW any attorneys’ fees because of AHPW’s attorneys’ non-compliance with the court’s orders concerning submission of its fees by filing the request one day late, and because the motion to file late did not contain the required points and authorities. Pohnpei further contends that the court did not have the authority to order AHPW to resubmit its attorneys’ fee request without AHPW first submitting a motion to do so. For this last point, Pohnpei relies on Kama v. Chuuk, [2002] FMCSC 5; 10 FSM Intrm. 593 (Chk. S. Ct. App. 2002).
The statute itself provides the basis for the court to award attorneys’ fees. It provides in pertinent part: "Any person who
is injured in his business, personal property, or real property by reason of another’s violation of sections 302 or 303 of
this chapter may sue therefor . . . and may recover times imes the damages sustained by him together with a reasonable attorney’s
fee and the costs of suit . . . .F.S.M06. 3.
The trial court was not satisfied with the documentation of attorneys’ fees and asked that they be submitted in more detail. We see no problem with this. The attorneys’ fees were a statutory element of damages. The submission was evidence of the amount of damages. The court’s request for greater detail is no different than the court asking a witness a question from the bench to clarify earlier testimony with counsel having the opportunity to ask follow-up questions. Pohnpei was not denied due process since it had a full opportunity to respond to the later detailed attorneys’ fees request before the trial court ruled on it. Pohnpei did not take advantage of this opportunity.
Pohnpei’s reliance on Kama v. Chuuk is misplaced because that case involved a trial court’s sua sponte grant, without notice, of relief from judgment under Rule 60(b) and Rule 60(b) only permits a party or its representative, not the court, to move for relief from judgment. The trial court’s request for clarification of the attorneys’ fee request documentation was not a grant of relief from judgment or analogous to relief from judgment. Additionally, the trial court’s permitting the submission of the attorney fee request one day late was within its discretion. Thus Pohnpei’s contention that AHPW had no right to any attorneys’ fees is groundless.
L. Related Collection Case
Pohnpei contends that AHPW did not sustain compensable damage because in a collection case, FSM Dev. Bank v. Arthur, [2004] FMSC 32; 13 FSM Intrm. 1 (Pon. 2004), AHPW was not held liable for the loan it had taken out to fund its businesses. Pohnpei misreads that case. AHPW was not a party to that collection case. The creditor bank in that case chose not to sue AHPW, but to sue the loan guarantors. That case did not hold that AHPW was not liable on the loan because that issue was never before that court since AHPW was not a party to that case.
Furthermore, FSM Dev. Bank v. Arthur is irrelevant to the issues in this case. That is because the AHPW, Inc. trial court refused to award AHPW damages for, or based on, its loan obligations. AHPW, Inc.
, 12 FSM Intrm. at 556. Since damages were awarded solely based upon its calculations of AHPW’s lost profits, this ground is devoid of merit.
M. The Judicial Guidance Clause
Pohnpei contends that the trial court violated and disregarded the Judicial Guidance Clause by ruling in AHPW’s favor on the pepper business because in Pohnpeian custom one goes to the aid of another when he sees him in need and Pohnpei was only aiding the pepper farmers who were all in need. Pohnpei also contends that the trial court’s ruling was perverse because it assumed that Pohnpei can be forced to part with its limited assets and natural resources (the trochus) that it holds in trust for its people.
Even assuming this alleged Pohnpeian custom[5] would apply in a case based on national statutory law and statutorily-created rights, an obligation to give aid to someone in need
does not mean that it may be done in an illegal manner.[6] Other means of aiding the pepper farmers were possible. We do not conclude that our holding today (or that the trial court’s
holding) will force Pohnpei to part with its natural resources against its will.
N. On Remand
We have vacated the finding of liability for AHPW’s trochus business and the trebling of damages for AHPW’s pepper business. The case is remanded for further proceedings on those issues.
Pohnpei has not presented any authority that would require that the matters remanded to the trial court be presided over by a different judge. There is also no basis shown for the court to permit the parties to conduct further discovery or gather further evidence to present to the trial court. No such orders will issue.
V. AHPW’s Cross-Appeal
AHPW asks that the court vacate the damage award; that it be compensated for what, in its view, constitutes its full losses for both the pepper and trochus businesses; that the Federated States of Micronesia also be held liable for these losses; and that its claims based on due process and equal protection violations and on its detrimental reliance be adjudicated.
A. FSM’s Liability under FSM Public Law No. 10-49
AHPW contends that the trial court should not have dismissed its claims for relief against the FSM national government. It contends that Public Law No. 10-49 (to be codified at 32 F.S.M.C. 201 et seq.) provides a basis for national government liability. It relies on three parts of that statute. First, "[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, except [under circumstances that do not apply here]." 32 F.S.M.C. 216(1). Second,
The National Government shall not take action, or permit action, or permit action to be taken by any State or other entity within the FSM, that although not formally designated or acknowledged as compulsory acquisition or expropriation, indirectly has the
same injurious effect ("creeping expropriation"). If such action nevertheless takes place, the National Government shall be responsible for the prompt and adequate compensation of any injured noncitizen.
32 F.S.M.C. 216(4). And third,
Subject 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.
32 F.S.M.C. 219. The trial court concluded that these statutory provisions required that the property had to pass into the government’s hands for there to be an expropriation, AHPW, Inc., 12 FSM Intrm. at 166-67, and that only "injunctive relief would be available to prospectively enforce § 219," PW, Inc., 12 FSM FSM Intrm. at 122.
Public Law No. 10-49 did not take effect until January 1, 1998. 32 F.S.M.C. 225(2) (act takes effect 90 dayer becoming law). Nothing in Public Law No. 10-49 indicatescates that it is to have retroactive effect. Quite the opposite, the law itself provides that it will be prospective rather than retroactive because it provides that "[t]his act shall be effective on the first day of the first month which begins no less than ninety(90) days after this act becomes law." 32 F.S.M.C. 225(2). The act became law on October 1, 1997. Therefore neither Pohnpei nor the FSM can be held liable under 32 F.S.M.C. 201 et seq. for anything that occurred before January 1, 1998. Only acts (or omissions) after that date would give rise to liability under Public Law No. 10-49.
AHPW relies on the Restatement of Foreign Relations Law of the United States for its assertion that Pohnpei’s actions (and the FSM’s in not stopping them) constitute expropriation under the statute. The FSM Code permits the restatements to be used when applying rules of common law in the absence of written law. 1 F.S.M.C. 203. Here, AHPW asks that we use the Restatement to interpret written law - a congressionally-enacted statute. We can give the Restatement no such weight.
AHPW also asserts that an Organization for Economic Co-operation and Development (OECD) briefing paper supports its interpretation of the term "creeping expropriation" and that that interpretation was, in 1997, part of the international law that the FSM adopted when it enacted 32 F.S.M.C. 216(4), so that Pohnpei’s actions constituted "creeping appropriation." We do not think that the OECD briefing paper inexorably leads to the interpretation that AHPW gives it.
Therefore the trial court’s holding that the state would have to actually acquire the property in some fashion for there to be an expropriation is affirmed. Also, the trial court’s holding that 32 F.S.M.C. 219 only authorizes injunctive relief and does not create a cause of action for damages, is affirmed. Furthermore, even if depriving AHPW of its source of supply of pepper by paying a higher price for it regardless of quality and the world price for it could be considered a creeping expropriation, the evidence appears that this loss of supply took place before Public law No. 10-49 took effect on January 1, 1998. The same seems true for the trochus loss. AHPW has not shown how any enforcement of Public Law No. 10-49 after its effective date would have prevented the demise of its businesses. The trial court’s dismissal of the FSM as a defendant is therefore affirmed.
B. Compensation for AHPW’s Pepper Business
AHPW contends that the trial court’s calculation of lost profits as damages failed to compensate it in full for the damage its pepper business sustained. It takes issue with how those profits were calculated, wanting the court to award fifteen years (1995-2010) of lost profits when the court only awarded four (1995-99). The trial court limited it to four because AHPW filed suit in 1999 and the trial court held that AHPW could have obtained injunctive relief at that time. AHPW, Inc., 12 FSM Intrm. at 556. AHPW disagrees, in part, because it considers the statement that it could have obtained injunctive relief at that time to be meaningless because it was out of business by then.
This claim disputes a trial court factual finding concerning damages. The standard of review for findings of fact is whether the trial court’s findings are clearly erroneous. A finding is clearly erroneous when the appellate court, after reviewing the entire body of the evidence and construing the evidence in the light most favorable to the appellee, is left with the definite and firm conviction that a mistake has been committed. Damarlane v. United States, [1997] FMSC 33; 8 FSM Intrm. 45, 53 (App. 1997).
The trial court’s refusal to use fifteen years is not clearly erroneous. Pohnpei’s anti-competitive acts ceased at sometime and its pepper-buying and processing operation is no longer in business. Fifteen years’ worth of "damages" of lost profits is obviously too long for any reasonably certain future projections. Too many unexpected possible variables could occur. Although there does not seem to be any authority cited for the trial court’s concern about injunctive relief, it makes sense under the general principle of mitigation of damages since a plaintiff should not be encouraged to maximize his recovery by sitting on his rights, in effect punishing himself (by reducing his recovery if he enforces his rights promptly). The trial court did not abuse its discretion by limiting the damage award to four years of lost profits.
C. Compensation for AHPW’s Trochus Business
AHPW also contends that the trial court should have awarded compensatory, not nominal damages for its trochus business. Since we have reversed the trial court’s conclusion that Pohnpei was liable to AHPW under 32 F.S.M.C. 301 et seq. for AHPW’s trochus business, the $10 "nominal damages"[7] was vacated.
This is another claim that a trial court factual finding about damages was clearly erroneous. The trial court’s finding that the trochus business was generally not profitable was not clearly erroneous. Therefore that finding must stand. However, since the trochus claim judgment is vacated and remanded for the trial court’s determination of either or both of AHPW’s detrimental reliance and constitutional claims, some other measure of damages other than lost profits may be awardable. Such damages should first be determined in the trial court. See infra D. & E.
D. Due Process and Equal Protection Violations
AHPW contends that the trial court should have ruled on its constitutional claims of violation of equal protection and of due process, including taking of property. Pohnpei asserts in response that those rights were not violated.
The trial court never reached these claims made by AHPW. It did not need to because it determined that AHPW had prevailed on its statutory claims and was awarded damages. However, since AHPW’s judgment under 32 F.S.M.C. 301 et seq. is reversed for the trochus business, the trial court is instructed to
conduct further proceedings on the trochus claims. Once a plaintiff’s claim fails on its statutory grounds then a court must consider either the plaintiff’s common law (detrimental reliance) ground or its constitutional grounds. On the general principle that constitutional adjudication should be avoided unless necessary, Kosrae v. Langu, [1999] FMSC 37; 9 FSM Intrm. 243, 251 (App. 1999); Jonah v. FSM, [1992] FMSC 8; 5 FSM Intrm. 308, 314 (App. 1992), the trial court should first consider any non-constitutional grounds that might resolve the issue. On remand, the trial court may issue further findings of fact and conclusions of law based upon the evidence adduced at trial and the pleadings’ current state and the case’s posture. These are best done first by a trial court rather than an appellate court, especially when factual findings are involved, since fact-finding is the trial court’s province, not the appellate court’s.
E. Detrimental Reliance
AHPW contends that the trial court should have ruled on its detrimental reliance cause of action because it was pled and tried, and that Pohnpei should be estopped from asserting any defense that it is not responsible for damages for its conduct in misleading AHPW to AHPW’s detriment. Pohnpei contends that AHPW never raised detrimental reliance at the trial level.
The trial court never ruled on this claim. Facts constituting detrimental reliance may have been pled and tried. If detrimental reliance was pled and tried, or "tried by express or implied consent of the parties," FSM Civ. R. 15(b), AHPW is entitled to have the trial court rule on this cause of action since AHPW’s judgment is reversed for the trochus business. The trial court is therefore instructed to conduct further proceedings to determine if AHPW proved detrimental reliance at trial and to assess whatever damages flowed from that detrimental reliance.
The term "detrimental reliance" is not mentioned in AHPW’s complaint. That is not fatal to AHPW’s detrimental reliance claim, if the complaint alleges facts from which a defendant may be found liable under a detrimental reliance theory. This is because a plaintiff is not precluded from relief because its lawyer has misconceived the proper legal theory of the claim. If the complaint shows that the plaintiff is entitled to any relief which the court can grant, regardless of whether it asks for the proper relief, the complaint is sufficient. Semwen v. Seaward Holdings, Micronesia, [1995] FMSC 17; 7 FSM Intrm. 111, 114 (Chk. 1995). There was evidence presented at trial from which the trial court might have found detrimental reliance. Furthermore, "[e]xcept as to a party against whom a judgment is entered by default, every final judgment shall grant the relief to which the party in whose favor it is rendered is entitled, even if the party has not demanded such relief in the party’s pleadings." FSM Civ. R. 54(c). Thus the trial court should have considered whether to find liability and award damages on a detrimental reliance basis for AHPW’s trochus business.
The trochus claim having been remanded, the trial court shall consider[8] whether it could grant judgment for AHPW on this basis and make the necessary findings of fact and conclusions of law. We note that detrimental reliance is a state law cause of action. Pohnpei would therefore have available to it all of the state law defenses, unless they are estopped, that the facts and law permit and AHPW would have available to it the measure of damages (reliance damages)[9] that the law permits. If the trial court cannot find AHPW is entitled to relief on a detrimental reliance theory, it shall then consider AHPW’s constitutional claims concerning its trochus business.
VI. Conclusion
The trial court’s dismissal of the Federated States of Micronesia as a defendant is affirmed. The trial court judgment holding Pohnpei liable for AHPW’s pepper business is affirmed, as is the trial court’s finding that AHPW suffered $225,448 in lost profit damages. The trebling of damages is vacated and remanded to the trial court for it to express its reasons, other than merely citing the statute allowing it, for multiplying the award. The trial court may reinstate treble damages, or some lesser amount, after putting its reasoning on the record. The judgment against Pohnpei for AHPW’s trochus business based on 32 F.S.M.C. 301 et seq. is reversed. On remand, the trial court shall determine, from the trial already conducted, whether Pohnpei is liable to AHPW for its trochus business on a detrimental reliance theory, and, if not, on AHPW’s asserted constitutional claims.
* * * *
[1] The court must first look to FSM sources of law, FSM Const. art. XI, § 1t when the court has not pnot previously construed an FSM appellate rule which is identical or similar to a U.S. rule, it may look to U.S. sources for guidance in interpreting and applying the rule, see, e.g., Bualuay v. Rano, [2002] FMSC 30; 11 FSM Intrm. 139, 146 n.1 (App. 2002); Santos v. Bank of Hawaii, [2000] FMSC 28; 9 FSM Intrm. 306, 308 n.1 (App. 2000); Iriarte v. Etscheit, [1998] FMSC 3; 8 FSM Intrm. 231, 235 (App. 1998); Jano v. King, [1992] FMSC 11; 5 FSM Intrm. 326, 329 (App. 1992).
[2]. This procedure was used in Senda v. Creditors of Mid-Pacific Constr. Co., [1996] FMSC 18; 7 FSM Intrm. 664, 669 (App. 1996).
[2] That could also be a ground on which to toll or suspend the running of the statute of limitations as a form of estoppel - a defendant
is estopped from raising the defense of statute of limitations because by his wrongful conduct he induced the plaintiff not to sue
until the statute of limitations had run out. The trial court, however, did not rely on this ground and no party raised it, so we
will not consider it now.
[3] A subpoena directed to someone in a foreign country is considered valid and enforceable only if the person it is directed to is an
FSM national or resident. FSM Civ. R. 45(e)(2).
[4] Even under national law, sovereigns, any sovereign, have sovereign immunity. But sovereigns are generally considered to have waived
that immunity when the sovereign has acted as a participant in commerce instead of as a sovereign. Pohnpei was a commercial actor
when it went into the pepper business. It would seem unfair if Pohnpei, as a competitor in a commercial enterprise, could not be
held liable and assessed the same damages that another commercial competitor, who committed the same acts, would be assessed.
[5] The issue of custom was not raised before the trial court. It can be disregarded on that ground alone. Paul v. Celestine, [1990] FMSC 2; 4 FSM Intrm. 205, 210 (App. 1990) (issue generally must first be raised in the trial court before an appellate court can consider it).
[6] E.g., if someone is in need of money and you want to lend him some, it does not mean that you can steal the money to lend to him.
[7] There is some question whether $10 constitutes nominal damages. Nominal damages are usually $1. See, e.g., Herman v. Municipality of Patta, [2003] FMSC 66; 12 FSM Intrm. 130, 139 (Chk. 2003); Bank of Guam v. O’Sonis, [1999] FMSC 26; 9 FSM Intrm. 106, 113 (Chk. 1999); 22 Am. Jur. 2d Damages § 11 (1988) ("One dollar is the amount usually adjudged where only nominal damages are allowed."). We do not decide this point
at this time.
[8] Since factual findings acessary, the trial court, nrt, not the appellate court, should first consider this.
[9] As a possible example, if AHPW had not relied on Pohnpei’s promise to hold a trochus harvest, it might have laid off its employees
earlier and not paid their wages for that time - those extra payments could constitute detrimental reliance.
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