FSM SUPREME COURT TRIAL DIVISION

CIVIL ACTION NO. 2011-1000

AMANTO MARSOLO, in his official capacity as the Mayor of Tolensom Municipality, TOLENSOM MUNICIPALITY, JOHNSON ELIMO, in his official capacity as Governor of Chuuk State, and STATE OF CHUUK,
Plaintiffs,

vs.

KISAUO ESA, LORENSO FARAWEY, MARCELINO ELIAS ROSE NAKANAGA, individually and in her official capacity as the Acting Secretary of the FSM Department of Finance & Administration, MANNY MORI, in his official capacity as President of the FSM, MAKETO ROBERT, individually and in his official capacity as the Secretary of the Department of Justice, LEONITO BACALANDO, JR., individually and in his official capacity as Assistant Attorney General of the Department of Justice, FABIAN NIMEA, individually and in his official capacity as the Director of the Office of Statistics, Budget and Economic Management, FSM NATIONAL GOVERNMENT, FSM DEPARTMENT OF FINANCE AND ADMINISTRATION, FSM DEPARTMENT OF JUSTICE, and FSM OFFICE OF STATISTICS, BUDGET AND ECONOMIC MANAGEMENT,
Defendants.

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KISAUO ESA, in his official capacity as Mayor of Tolensom, and TOLENSOM MUNICIPALITY,
Counter claimants,

vs.

JOHNSON ELIMO, in his official capacity as Chuuk State Governor, CHUUK STATE, AMANTO MARSOLO, as an individual, and FEDERATED STATES OF MICRONESIA,
Counter defendants and Cross-defendant.

_____________________________________________________

ORDER GRANTING IN PART MOTION TO DISMISS

Dennis K. Yamase
Associate Justice

Hearing: September 7, 2011
Decided: October 13, 2011

APPEARANCES:

For the Plaintiffs: Joses R. Gallen, Esq.
(Gov. Elimo & Chuuk) Attorney General
Office of the Chuuk Attorney General
P.O. Box 1050
Weno, Chuuk FM 96942

For the Defendants: Stephen V. Finnen, Esq.
(Esa, Farawey, & Elias) P.O. Box 1450
Kolonia, Pohnpei FM 96941

For the Defendants: Johnson Asher, Esq.
(all FSM agencies & officials) Lorrie Johnson-Asher, Esq.
Assistant Attorneys General
FSM Department of Justice
P.O. Box PS-105
Palikir, Pohnpei FM 96941

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HEADNOTES

Civil Procedure - Parties - Substitution of

A successor in the Governor's office will be automatically substituted as a party for the former Governor. Marsolo v. Esa, 18 FSM Intrm. 59, 62 n.1 (Chk. 2011).

Civil Procedure - Dismissal; Civil Procedure - Joinder, Misjoinder and Severance

A motion to dismiss for failure to join indispensable parties will be denied when the court has not been shown that it cannot accord complete relief between the parties already present in the action without the joinder of others. Marsolo v. Esa, 18 FSM Intrm. 59, 63 (Chk. 2011).

Civil Procedure - Dismissal; Civil Procedure - Joinder, Misjoinder, and Severance; Civil Procedure – Parties

A Rule 12(b)(7) motion to dismiss for failure to join an indispensable party under Rule 19 is a defense that is, by rule, specifically preserved and may be raised as late in the proceedings as at the trial on the merits. A motion to dismiss for failure to join necessary parties is accordingly denied without prejudice and may be renewed if the circumstances warrant. Marsolo v. Esa, 18 FSM Intrm. 59, 63 (Chk. 2011).

Civil Procedure - Dismissal - Before Responsive Pleading

A court must take the plaintiffs' allegations as true when considering a Rule 12(b) motion to dismiss. Marsolo v. Esa, 18 FSM Intrm. 59, 64 (Chk. 2011).

Constitutional Law - Case or Dispute – Standing

A trustee, guardian, or custodian of funds has standing to sue to obtain control of or to prevent the loss of funds that it should be holding in trust, guarding, or having custody of, so it could discharge its legal duties and responsibilities toward the party for whose benefit it was holding those funds. Marsolo v. Esa, 18 FSM Intrm. 59, 64 (Chk. 2011).

Sovereign Immunity

The FSM has waived its sovereign immunity for suits seeking to prevent the improper administration of FSM statutes and for injunctions to prevent that improper administration. Marsolo v. Esa, 18 FSM Intrm. 59, 64 (Chk. 2011).

Public Officers and Employees; Sovereign Immunity; Torts – Immunity

Sovereign immunity should not be confused with official immunity for public officers. Government officials who are performing their official duties are generally shielded from civil damages, and the court has previously recognized that some government workers have been held partially or completely immune from tort liability on grounds that they are public officers. This immunity, intended to serve the purpose of encouraging fearless and independent public service, has been bestowed upon prosecutors as well as other public officials. Marsolo v. Esa, 18 FSM Intrm. 59, 64 (Chk. 2011).

Civil Procedure - Dismissal; Separation of Powers; Torts – Immunity

The President has absolute immunity from damages liability for his official acts. Furthermore, the court does not have the jurisdiction to enjoin the President in the performance of his official duties such as enforcing a Congressionally enacted statute. Since suits contesting the actions of the executive branch should be brought against the President's subordinates, not against the President himself, a motion to dismiss the President will therefore be granted. Marsolo v. Esa, 18 FSM Intrm. 59, 65 (Chk. 2011).

Civil Procedure – Injunctions

Since the court does not have the jurisdiction to enjoin the President in the performance of his official duties such as enforcing a statute, a preliminary injunction granted earlier by the court will be dissolved only as directed against the President and remain in effect against the other public officials. Marsolo v. Esa, 18 FSM Intrm. 59, 65 (Chk. 2011).

Public Officers and Employees; Torts – Immunity

A qualified official immunity applies to public officials. An official who simply enforces a presumptively valid statute will rarely thereby lose his or her immunity from suit. Absent extraordinary circumstances, liability will not attach for executing the statutory duties one was appointed to perform. Marsolo v. Esa, 18 FSM Intrm. 59, 65 (Chk. 2011).

Civil Procedure - Dismissal; Civil Procedure - Injunctions; Public Officers and Employees

When no extraordinary circumstances are present in a suit over the enforcement of a statute, public officers, in their individual capacities, will be dismissed from the suit, but since injunctive relief can be had against them in their official capacities, they will not be dismissed in their official capacities. Marsolo v. Esa, 18 FSM Intrm. 59, 65 (Chk. 2011).

Civil Procedure - Dismissal; Civil Procedure – Venue

Although the rule permits dismissal if a case is filed in an improper venue, a more likely remedy, particularly when the litigation has progressed beyond its early stages, is not to dismiss the case but for the court to, on its own motion or otherwise, transfer it to any venue in which the matter might properly have been brought. Marsolo v. Esa, 18 FSM Intrm. 59, 65 (Chk. 2011).

Civil Procedure – Parties

A suit against an official in his or her official capacity is a suit against that official's office. Marsolo v. Esa, 18 FSM Intrm. 59, 66 (Chk. 2011).

Civil Procedure - Venue; Domicile and Residence; Public Officers and Employees

Since a suit against an official in his or her official capacity is a suit against that official's office and since a national government office with nationwide scope and authority must be "found" or be "present" in some form in each state in the nation regardless of whether it has an actual year-round physical presence there, for the purpose of the venue statute, none of the defendant national government officials "reside" on Pohnpei. Marsolo v. Esa, 18 FSM Intrm. 59, 66 (Chk. 2011).

Civil Procedure – Venue

Any action, other than one involving real estate, in which one of the parties is an FSM resident shall be brought in the state in which one of the parties thereto lives or has his usual place of business or employment or, if the action is based upon a wrong not connected with a contract, it may be brought in the state in which the cause of action arose. Marsolo v. Esa, 18 FSM Intrm. 59, 66 & n.5 (Chk. 2011).

Statutes – Construction

Generally, when the word "district" appears in an FSM Code provision carried over from the Trust Territory Code by virtue of the Constitution's Transition Clause, "state" will be read in its place. Likewise, "Trust Territory" should be read as "Federated States of Micronesia." Marsolo v. Esa, 18 FSM Intrm. 59, 66 n.5 (Chk. 2011).

Civil Procedure – Venue

When the matter being litigated is of great interest only to the public in Chuuk, the interests of justice would permit it to be heard in Chuuk. Marsolo v. Esa, 18 FSM Intrm. 59, 66 (Chk. 2011).

Civil Procedure - Dismissal - Before Responsive Pleading; Civil Procedure - Summary Judgment

While the court may permit matter outside the pleadings to be considered, thus converting a Rule 12(b)(6) motion to dismiss for failure to state a claim to a Rule 56 summary judgment motion, the motion will be denied when that does not seem advisable until after the relevant matters have been put before the court and the record properly developed. When that has been done, any party is free to move for summary judgment on any or all claims still outstanding. Marsolo v. Esa, 18 FSM Intrm. 59, 66-67 (Chk. 2011).

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COURT'S OPINION

DENNIS K. YAMASE, Associate Justice:

I. The Motions Before the Court

On September 7, 2011, this came before the court for hearing the Motion to Dismiss Plaintiffs' Complaint, filed on April 18, 2011, by defendants Acting Secretary Rose Nakanaga, President Manny Mori, Secretary Maketo Robert, Assistant Attorney General Leonito Bacalando, Jr., Director Fabian Nimea, FSM national government, FSM Department of Finance and Administration, FSM Department of Justice, and the FSM Office of Statistics, Budget and Economic Management ("the FSM movants"); the Non-Opposition to Motion to Dismiss; Joinder in Motion to the Extent Applicable, filed on April 20, 2011, by defendants Kisauo Esa, Lorenso Farawey, and Marcelino Elias ("the joining movants"); the Opposition to Motion to Dismiss, filed on June 6, 2011, by plaintiffs Governor Wesley W. Simina1 and Chuuk State (collectively "Chuuk"); and the joining movants' Reply in Support of Motion to Dismiss, Joinder in Motion to the Extent Applicable, filed on June 22, 2011.

The FSM movants contend that the complaint against them must be dismissed since, in their view, the plaintiffs lack standing to sue them because the President has immunity from suit and because the other FSM public officers are also immune from suit. They further contend that the Chuuk plaintiffs and Amanto Marsolo lack standing to sue because (as the plaintiffs acknowledge) the funds at issue are not Chuuk's property and because (a matter the plaintiffs dispute) Marsolo is not the duly elected mayor of Tolensom. They also contend that the facts alleged generally fail to state a claim for which relief can be granted for each of the 39 causes of action in the complaint for a variety of reasons. The movants further contend that Chuuk is an improper venue because most of the defendants (and all the individual movants) reside on Pohnpei. And lastly, they contend that the complaint should have also named as parties all those Chuuk municipalities that have excess pre-2002 Capital Improvement Project (CIP) Compact funds that the national government was holding since, in the movants' view, they are indispensable parties.2

II. Indispensable Parties

The FSM movants and joining movants contend that this case should be dismissed under Civil Procedure Rule 12(b)(7) for the failure to join parties deemed indispensable under Rule 19 - all the other municipalities in Chuuk besides Tolensom. They contend that a decision in this case will affect the rights of the other municipalities by depriving them of their unused pre-2002 lapsed Compact CIP funds.

Not all of the 39 other Chuuk municipalities3 have any pre-2002 unexpended Compact CIP funds. Of those that do, the court cannot presume that the outcome of this suit, regardless of which way it is decided, will affect them, that is, the court cannot presume that the municipalities' full use of their pre-2002 former CIP funds, due them from the national government, will be impaired.

The court has not been shown that it cannot accord complete relief between the parties already present in this action without the joinder of the other Chuuk municipalities. Whether Chuuk has the right to have custody of Tolensom's municipal pre-2002 CIP funds and which of the rival Tolensom municipal governments those funds should be given to, can be decided without the other municipalities' presence in this suit. As the court has previously noted:

a Rule 12(b)(7) motion to dismiss for failure to join an indispensable party under Rule 19 is a defense that is, by rule, specifically preserved and may be raised as late in the proceedings as at the trial on the merits. FSM Civ. R. 12(h)(2). [A] motion to dismiss for failure to join necessary parties is accordingly denied without prejudice. The motion may be renewed if the circumstances warrant.

Moses v. M.V. Sea Chase, 10 FSM Intrm. 45, 49 (Chk. 2001).

III. Standing to Sue

A. Despite Chuuk Not Owning the Funds

The FSM movants and joining movants contend that the plaintiffs do not have standing to sue because the funds involved do not belong to Chuuk and because Marsolo is not the duly elected mayor of Tolensom and that therefore the rival Tolensom municipal government that he heads is not the duly constituted Tolensom municipal government.

Taking the plaintiffs' allegations as true, which a court must do when considering a Rule 12(b) motion to dismiss, the plaintiffs allege Marsolo is the duly elected Tolensom mayor and that, although Chuuk has no claim to own the CIP funds, it has a statutory right and duty to custody and management of the funds. The moving parties do not explain how a party that has a legal right to have custody of funds - in effect, the trustee or custodian of the funds - would not have standing to sue if deprived of its right to custody and management of the funds. It seems that a trustee, guardian, or custodian of funds would always have standing to sue to obtain control of or to prevent the loss of funds that it should be holding in trust, guarding, or having custody of, so it could discharge its legal duties and responsibilities toward the party - in this case Tolensom - for whose benefit it was holding those funds.

That being so, the plaintiffs, based on their well-pled complaint, have sufficient stake in this lawsuit's outcome in order to have standing to sue. The plaintiffs are therefore real parties in interest.

B. Immunity of Individual FSM Defendants

The movants contend that the President and the other FSM Public officials named as defendants in both their individual and official capacities are immune from this suit. The FSM movants contend that they are immune because the acts for which the plaintiffs want to hold them liable were done in the course of implementing a validly enacted statute, FSM Public Law No. 13-51, which mandates payment of the remaining pre-2002 Compact CIP funds directly to the Chuuk municipalities that own them. The plaintiffs respond that the FSM government has no sovereign immunity from suits seeking to prevent the improper administration of FSM statutes and regulations and that the FSM has waived sovereign immunity for injunctions and damages arising from the improper administration of FSM statutes.

The plaintiffs are correct that the FSM has waived its sovereign immunity for suits seeking to prevent the improper administration of FSM statutes and for injunctions to prevent that improper administration. 6 F.S.M.C. 702(2); Udot Municipality v. FSM, 10 FSM Intrm. 354 (Chk. 2001), aff'd, 12 FSM Intrm. 29 (App. 2003); Dorval Tankship Pty, Ltd. v. Department of Finance, 8 FSM Intrm. 111, 115 (Chk. 1997). The plaintiffs, however, confuse sovereign immunity with official immunity for public officers. See generallyProsser and Keeton on Torts§ 132 (5th ed. 1984). Government officials who are performing their official duties are generally shielded from civil damages. Harlow v. Fitzgerald, 457 U.S. 800, 818, 102 S. Ct. 2727, 2738, 73 L. Ed. 2d 396, 410 (1982).

The court has previously recognized that some government workers have been held partially or completely immune from tort liability on grounds that they are public officers. Rauzi v. FSM, 2 FSM Intrm. 8, 16 (Pon. 1985). This immunity, intended to serve the purpose of encouraging fearless and independent public service, has been bestowed upon prosecutors as well as other public officials. Id. For example, prosecutors enjoy absolute immunity from prosecution for their actions which are connected to their role in judicial proceedings, but do not, however, enjoy absolute immunity from prosecution for their role as an administrative or investigative officers, which includes participation in and giving advice regarding the execution of a search warrant. Sipos v. Crabtree, 13 FSM Intrm. 355, 366 (Pon. 2005); Liwi v. Finn, 5 FSM Intrm. 398, 401 (Pon. 1992); Jano v. King, 5 FSM Intrm. 388, 396 (Pon. 1992).

The President has absolute immunity from damages liability for his official acts. SeeNixon v. Fitzgerald, 457 U.S. 731, 757-58, 102 S. Ct. 2690, 2705, 73 L. Ed. 2d 349, 368-69 (1982). Furthermore, the court does not have the jurisdiction to enjoin the President in the performance of his official duties such as enforcing a Congressionally enacted statute. Mississippi v. Johnson, 71 U.S. (4 Wall.) 475, 501, 18 L. Ed. 437, 441 (1866); Newdow v. Roberts, 603 F.3d 1002, 1013 (D.C. Cir. 2010); cf.FSM v. GMP Hawaii, Inc., 16 FSM Intrm. 508, 512 (Pon. 2009) (presidential executive privilege is rooted in the separation of powers doctrine and in the principle that confidentiality in communications between the president and his advisors should enhance the quality of discussion and government decisions). "Suits contesting the actions of the executive branch should be brought against the President's subordinates," Al-Marri v. Rumsfeld, 360 F.3d 707, 708 (7th Cir. 2004) (dismissing sua sponte the U.S. President) (citing Franklin v. Massachusetts, 505 U.S. 788, 803, 112 S. Ct. 2767, 2776-77, 120 L. Ed. 2d 636, 651-52) (1992)), not against the President himself.

Accordingly, the motion to dismiss is granted as to President Mori and the preliminary injunction granted earlier by the court, Marsolo v. Esa, 17 FSM Intrm. 377, 382 (Chk. 2011), is dissolved only as directed against (former) defendant President Mori. It remains in effect otherwise.

For the other named FSM public officials, Acting Secretary of Finance and Administration Nakanaga, Secretary of Justice Robert, Assistant Attorney General Bacalando, and Director of the Office of Statistics, Budget, and Economic Affairs Nimea, a more qualified official immunity applies. An official who simply enforces a presumptively valid statute will rarely thereby lose his or her immunity from suit. See, e.g., Swanson v. Powers, 937 F.2d 965, 969 (4th Cir. 1991). Absent extraordinary circumstances, liability will not attach for executing the statutory duties one was appointed to perform. Lemon v. Kurtzman, 411 U.S. 192, 207-09, 93 S. Ct. 1463, 1472-74, 36 L. Ed. 2d 151, 165-66 (1973). No such extraordinary circumstances are present here.

Accordingly, the complaint against Acting Secretary Nakanaga, Secretary Robert, Assistant Attorney General Bacalando, and Director Nimea, in their individual capacities, is dismissed. Since injunctive relief can be had against these defendants in their official capacities, they will not be dismissed in their official capacities.

IV. Venue

The FSM movants assert that this case should be dismissed because, in their view, it was filed in an improper venue - Chuuk instead of Pohnpei. Although the rule permits dismissal if a case is filed in an improper venue, FSM Civ. R. 12(b)(3), a more likely remedy, particularly when the litigation has progressed as far as it has in this case, is not to dismiss the case but for the court to, "on its own motion or otherwise, transfer it to any court in which the matter might properly have been brought," 6 F.S.M.C. 304(2). With that in mind, the court will consider this motion to be one to transfer venue of this case to Pohnpei.

The FSM movants rely on 6 F.S.M.C. 301(1) for their contention that Pohnpei is the proper venue. That statute provides that "[e]xcept as otherwise provided, a civil action in which one of the defendants lives in the Trust Territory shall be brought in a court within whose jurisdiction the defendant or the largest number of defendants live or have their usual places of business or employment." 6 F.S.M.C. 301(1). The FSM movants contend that because the five FSM government officials all reside on Pohnpei, the greater number of defendants reside there so venue is proper only there. However, by this order, the President has been entirely dismissed from this action and the other four FSM officials have been dismissed in their individual or personal capacities. They remain defendants only in their official capacities. A suit against an official in his or her official capacity is a suit against that official's office. Herman v. Bisalen, 16 FSM Intrm. 293, 295 (Chk. 2009). The national government offices that the defendant officials represent all have some presence in Chuuk. A national government office with nationwide scope and authority must be "found" or be "present" in some form in each state in the nation4 regardless of whether it has an actual year-round physical presence (although the court notes that both the FSM Department of Finance and Administration and the Department of Justice have physical offices in Chuuk). For the purpose of the venue statute, none of the defendants "reside" on Pohnpei. The three joining movants all reside in Chuuk. Accordingly, the court cannot say that 6 F.S.M.C. 301(1) requires that this case be transferred to the Pohnpei venue. Even if the larger number of defendants were resident in Chuuk, 6 F.S.M.C. 303(2), which permits any action, other than one involving real estate,

in which one of the parties is a resident of the Trust Territory shall be brought in the District in which one of the parties thereto lives or has his usual place of business or employment or, if the action is based upon a wrong not connected with a contract, it may be brought in the District in which the cause of action arose.

6 F.S.M.C. 303(2).5 Under 6 F.S.M.C. 303(2), Chuuk would be a proper venue. Furthermore, since the matter being litigated is of great interest only to the public in Chuuk, the interests of justice would permit it to be heard in Chuuk. See 6 F.S.M.C. 304(3); Dorval Tankship, 8 FSM Intrm. at 114. The motion to dismiss or to transfer venue is denied.

V. Individual Counts' Alleged Failure to State a Claim

The movants and joining movants also contend the complaint's allegations do not state claims upon which the court can grant relief. The FSM movants contend generally that the plaintiffs' causes of action fail to state claims because FSM Public Law No. 13-51 authorizes the acts complained of so those acts are not actionable. Also, the FSM movants assert that Marsolo is not the Tolensom mayor. They assert that the count in which the plaintiffs allege a conflict of interest due to Secretary Robert being Esa's former counsel is not actionable because Secretary Robert recused himself from any involvement.

The motion to dismiss with various counts must be denied. The motion, as it is asserted for each of the various counts is more in the nature of a summary judgment motion as it relies on matter outside the pleadings and not in the record - the text of FSM Public Law No. 13-51, in particular, plus other facts as noted - for its resolution. While the court may permit matter outside the pleadings to be considered, thus converting a Rule 12(b)(6) motion to dismiss for failure to state a claim to a Rule 56 summary judgment motion, that does not seem advisable with this motion. The court, taking the facts as alleged as it must for a Rule 12(b)(6) motion, accordingly denies the motion to dismiss for failure to state claims. Any party is free to, at some later stage after the relevant matters have been put before the court and the record properly developed, to move for summary judgment on any or all claims still outstanding.

VI. Conclusion

Accordingly, the Chuuk municipalities are not indispensable parties to this matter; the plaintiffs have standing to maintain this suit; the President is dismissed and the preliminary injunction vacated as to him only; Acting Secretary Nakanaga, Secretary Robert, Assistant Attorney General Bacalando, and Director Nimea, are dismissed in their individual capacities; venue is proper in Chuuk; and the motion to dismiss is otherwise denied.

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