FSM SUPREME COURT TRIAL DIVISION

CIVIL ACTION NO. 2011-3002

PEOPLE OF THE MUNICIPALITY OF EAURIPIK, YAP, by and through SANTUS SARONGELFEG, JOHN HAGLELGAM, and MOSES MOGLIG,
Plaintiffs,

vs.

F/V TERAKA NO. 168, F/V YUH YOW 127, F/V FU KUAN 606, their engines, masts, bowsprits, boats, anchors, chains, cables, rigging, apparel, furniture, and all necessaries thereunto pertaining,
In Rem Defendants,

YUH YOW FISHERY COMPANY, LTD., MARIN MARAWA, LTD., MASANAGA SHIMAZU, MALAYAN TOWAGE AND SALVAGE CORPORATION, HSIN HORNG FISHERY COMPANY, LTD., EDGAR R. PELEAZ, and CITY PRO MANAGEMENT, LTD.,
In Personam Defendants.

--------------------------------------------------

FEDERATED STATES OF MICRONESIA,
Plaintiff in Intervention,

vs.

F/V TERAKA NO. 168, its engines, masts, bowsprits, boats, anchors, chains, cables, rigging, apparel, furniture, and all necessaries thereunto pertaining,
In Rem Defendant,

YUH YOW FISHERY COMPANY, LTD., MARIN MARAWA, LTD., and MASANAGA SHIMAZU,
In Personam Defendants.
_______________________________________________
MEMORANDUM AND ORDER ENLARGING TIME TO SERVE F/V YUH YOW 127 AND DISMISSING F/V FU KUAN 606

Martin G. Yinug
Chief Justice

Decided: December 20, 2012

APPEARANCES:

For the Plaintiffs: Joseph C. Razzano, Esq. (pro hac vice)
Joshua D. Walsh, Esq. (pro hac vice)
 Civille & Tang, PLLC
330 Hernan Cortez Avenue, Suite 200
Hagatna, Guam 96910

For the Defendants: David Ledger, Esq. (pro hac vice)
Cabot Mantanona LLP
929 South Marine Corps Drive
Tamuning, Guam 96913

* * * *

HEADNOTES

Admiralty; Civil Procedure
The FSM Rules of Civil Procedure apply in in rem admiralty cases except to the extent they are inconsistent with the FSM Supplemental Rules for Certain Admiralty and Maritime Claims, in which case the supplemental rules govern. People of Eauripik ex rel. Sarongelfeg v. F/V Teraka No. 168, 18 FSM Intrm. 461, 464 n.2 (Yap 2012).

Civil Procedure - Dismissal; Civil Procedure - Service
Civil Rule 4(j) authorizes the dismissal without prejudice of any defendant not served with process within 120 days. People of Eauripik ex rel. Sarongelfeg v. F/V Teraka No. 168, 18 FSM Intrm. 461, 464 (Yap 2012).

Admiralty - Ships; Civil Procedure - Service
Service of process on a defendant vessel is usually effected by the vessel's arrest unless a substitute security, such as a letter of undertaking, has been arranged. People of Eauripik ex rel. Sarongelfeg v. F/V Teraka No. 168, 18 FSM Intrm. 461, 465 (Yap 2012).

Admiralty - Ships; Civil Procedure - Service
When a vessel has been abandoned and is situated such that the taking of actual possession is impracticable, the FSM national police must execute the process by affixing a copy thereof to the property in a conspicuous place and by leaving a copy of the complaint and process with the person having possession or the person's agent. People of Eauripik ex rel. Sarongelfeg v. F/V Teraka No. 168, 18 FSM Intrm. 461, 465 n.3 (Yap 2012).

Civil Procedure - Dismissal; Civil Procedure - Motions; Civil Procedure - Service
A motion to stay the dismissal of a defendant for lack of service is considered a motion to enlarge time to serve process on that defendant. People of Eauripik ex rel. Sarongelfeg v. F/V Teraka No. 168, 18 FSM Intrm. 461, 465 (Yap 2012).

Admiralty - Ships; Jurisdiction - In Rem
The FSM Supreme Court cannot exercise jurisdiction over any vessel unless that in rem defendant has been validly arrested in the FSM and brought under the court's actual control or under its constructive control through the provision of a substitute security. People of Eauripik ex rel. Sarongelfeg v. F/V Teraka No. 168, 18 FSM Intrm. 461, 465 (Yap 2012).

Civil Procedure - Service; Jurisdiction - In Rem
Unlike in personam defendants, who may under certain circumstances be validly served process in foreign countries, valid service of process on an in rem defendant can only be made within the court's territorial jurisdiction. People of Eauripik ex rel. Sarongelfeg v. F/V Teraka No. 168, 18 FSM Intrm. 461, 465 (Yap 2012).

Civil Procedure - Service; Jurisdiction - In Rem
A court cannot order an in personam defendant to bring a vessel into the jurisdiction so that a plaintiff may then have it arrested and brought within the court's jurisdiction and made a separate defendant in rem because a court's authority to exercise in rem jurisdiction does not carry with it a concomitant derivative power to enter in personam orders. People of Eauripik ex rel. Sarongelfeg v. F/V Teraka No. 168, 18 FSM Intrm. 461, 465 (Yap 2012).

Civil Procedure - Motions; Civil Procedure - Service
Rule 4(j) sets a time frame of 120 days from when a complaint is filed for process to be served on the defendant. This time limit, like other time limits in the FSM Civil Procedure Rules, may be enlarged by the court for "cause shown" if request therefor was made before the expiration of the period originally prescribed or, on motion made after the expiration of the specified period if the failure to act was the result of "excusable neglect." People of Eauripik ex rel. Sarongelfeg v. F/V Teraka No. 168, 18 FSM Intrm. 461, 465-66 (Yap 2012).

Civil Procedure - Motions
The Rule 6(b)(1) "cause shown" standard is a lower standard than the "good cause shown" standard. People of Eauripik ex rel. Sarongelfeg v. F/V Teraka No. 168, 18 FSM Intrm. 461, 466 n.4 (Yap 2012).

Civil Procedure - Motions
For the court to grant an enlargement under Rule 6(b)(1) for cause shown, a party must demonstrate some justification for the issuance of the enlargement order. However, an application for the enlargement of time under Rule 6(b)(1) will normally be granted in the absence of bad faith on the part of the party seeking relief or prejudice to the adverse party. People of Eauripik ex rel. Sarongelfeg v. F/V Teraka No. 168, 18 FSM Intrm. 461, 466 (Yap 2012).

Civil Procedure - Motions
Although the court must first look to FSM sources of law rather than begin with a review of foreign sources when the FSM court has not previously construed the standard to determine "cause shown" under Rule 6(b)(1), an FSM civil procedure rule which is identical or similar to a U.S. counterpart, it may look to U.S. sources for guidance in interpreting the rule. People of Eauripik ex rel. Sarongelfeg v. F/V Teraka No. 168, 18 FSM Intrm. 461, 466 n.5 (Yap 2012).

Civil Procedure - Service
The plaintiffs have shown more than ample cause for an enlargement of time for process to be served on a defendant vessel and they cannot be said to be acting in bad faith when they have presented some justification to enlarge time to serve process on the vessel because no effort by them would have succeeded in effecting a valid arrest of the vessel since the vessel is not in the FSM and since the plaintiffs have no control over the vessel's movements while it is absent from FSM waters, and when no prejudice to the adverse party, the vessel, from the added time to serve it process is apparent because its owners and operators are already in personam defendants and they have actual notice of the civil action against the vessel. People of Eauripik ex rel. Sarongelfeg v. F/V Teraka No. 168, 18 FSM Intrm. 461, 466 (Yap 2012).

Civil Procedure - Dismissal; Civil Procedure - Service; Jurisdiction - In Rem
An in rem defendant ought not to be able to have the complaint against it dismissed for lack of service merely by keeping the res out of the court's jurisdiction for 120 days. People of Eauripik ex rel. Sarongelfeg v. F/V Teraka No. 168, 18 FSM Intrm. 461, 466 (Yap 2012).

Civil Procedure - Service; Jurisdiction - In Rem
The time for the plaintiffs to serve process on an in rem defendant vessel may be enlarged so as to allow the plaintiffs to perfect service in rem on the vessel if, at any time before the in personam action goes to trial, the vessel may be found and arrested within the court's jurisdiction. People of Eauripik ex rel. Sarongelfeg v. F/V Teraka No. 168, 18 FSM Intrm. 461, 466 (Yap 2012).

* * * *

COURT'S OPINION

MARTIN G. YINUG, Chief Justice:

This comes before the court on 1) Plaintiffs' Motion to Stay Clerk's Notice Filed November 1, 2012, which was filed on November 20, 2012; on 2) Defendant City Pro Management Ltd.'s Opposition to Plaintiffs' Motion to Stay Clerk's Notice Filed November 1, 2012, which was filed on November 30, 2012; and on 3) the Plaintiffs' Reply to Defendant City Pro Management Ltd.'s Opposition to Plaintiffs' Motion to Stay Clerk's Notice, filed December 11, 2012. The motion is granted for the F/V Yuh Yow 127. The reasons follow.

I. Background

On November 1, 2012, the clerk issued a notice that in rem defendants F/V Yuh Yow 6061and F/V Fu Kuan 606 had not been served the Verified Second Amended Complaint filed on July 23, 2012 or any other complaint, and that if service was not effected on those two defendants by November 21, 2012, the case against them was, under FSM Civil Procedure Rule 4(j),2 subject to dismissal for the lack of service. Civil Rule 4(j) authorizes the dismissal without prejudice of any defendant not served with process within 120 days. Over 120 days have elapsed since the Second Verified Amended Complaint was filed and neither the F/V Yuh Yow 127 nor the F/V Fu Kuan 606 have been served the complaint and summons. Service of process on a vessel is usually effected by the arrest3 of the vessel, FSM Mar. R. C(3), unless a substitute security, such as a letter of undertaking has been arranged, see, e.g., People of Gilman ex rel. Tamagken v. M/V Easternline I, 17 FSM Intrm. 81, 84 (Yap 2010); People of Rull ex rel. Ruepong v. M/V Kyowa Violet, 14 FSM Intrm. 403, 414 (Yap 2006).

The class plaintiffs ("Eauripik") move to stay the dismissal of the F/V Yuh Yow 127. The F/V Yuh Yow 127 is an FSM-flagged vessel home-ported in Pohnpei. Eauripik asks and they should be allowed 90 days after the F/V Yuh Yow 127 has returned to the FSM to serve process on it - to have it arrested - if the vessel can be found in the FSM at any time before the start of trial or, alternatively, to order defendant City Pro Management Ltd. ("City Pro") to return the vessel to the FSM so that it can be subjected to arrest, bonding, and release. City Pro contends that since the vessel has left the FSM, the vessel cannot be made an in rem defendant unless it has been validly seized, it should be dismissed. City Pro also contends that the court lacks jurisdiction to order that it be sailed into the FSM to be seized.

The court considers Eauripik's motion to be one to enlarge time to serve process on in rem defendant F/V Yuh Yow 127. Eauripik does not ask that the dismissal of the F/V Fu Kuan 606 be stayed. The F/V Fu Kuan 606 is accordingly dismissed as a party defendant.

II. Discussion

Defendant City Pro is correct that the court cannot exercise jurisdiction over the F/V Yuh Yow 127 (or any other vessel) unless that in rem defendant has been validly arrested in the FSM and brought under the court's actual control, Moses v. M.V. Sea Chase, 10 FSM Intrm. 45, 51-52 (Chk. 2001); Kosrae v. M/V Voea Lomipeau, 9 FSM Intrm. 366, 370 (Kos. 2000); In re Kuang Hsing No. 127, 7 FSM Intrm. 81, 82 (Chk. 1995), or under its constructive control through the provision of a substitute security, M/V Kyowa Violet, 14 FSM Intrm. at 414; FSM v. Kana Maru No. 1, 14 FSM Intrm. 300, 302 (Chk. 2006). And, unlike in personam defendants, who may under certain circumstances be validly served process in foreign countries, 4 F.S.M.C. 204, valid service of process on an in rem defendant can only be made within the court's territorial jurisdiction. SeeM/V Easternline I, 17 FSM Intrm. at 84; Kana Maru No. 1, 14 FSM Intrm. at 302; FSM Dev. Bank v. Ifraim, 10 FSM Intrm. 107, 110 (Chk. 2001); M.V. Sea Chase, 10 FSM Intrm. at 51; M/V Voea Lomipeau, 9 FSM Intrm. at 370; In re Kuang Hsing No. 127, 7 FSM Intrm. at 82.

City Pro is also correct that the court cannot order an in personam defendant to bring a vessel into the jurisdiction so that a plaintiff may then have it arrested and brought within the court's jurisdiction and made a separate defendant in rem. SeeR.M.S. Titanic, Inc. v. Haver, 943, 957 (4th Cir. 1999) ("court's authority to exercise in rem jurisdiction does not carry with it a concomitant derivative power to enter in personam orders").

Rule 4(j) sets a time frame of 120 days from when a complaint is filed for process to be served on the defendant. This time limit, like other time limits in the FSM Civil Procedure Rules, may be enlarged by the court "for cause shown . . . if request therefor is made before the expiration of the period originally prescribed," FSM Civ. R. 6(b)(1), or "upon motion made after the expiration of the specified period, permit the act to be done where the failure to act was the result of excusable neglect," FSM Civ. R. 6(b)(2). Before the 120-day time period expired on November 21, 2012, Eauripik moved for more time to serve process on the F/V Yuh Yow 127. Eauripik may therefore be granted an enlargement for cause shown.4 For the court to grant an enlargement under Rule 6(b)(1) for cause shown, "a party must demonstrate some justification for the issuance of the enlargement order. However, an application for the enlargement of time under Rule 6(b)(1) normally will be granted in the absence of bad faith on the part of the party seeking relief or prejudice to the adverse party." 4B Charles Alan Wright & Arthur R. Miller, Federal Practice and Procedure§ 1165, at 521-22 (3d ed. 2002).5See alsoStructural Concrete Prods., LLC v. Clarendon Am. Ins. Co., 244 F.R.D. 317, 327 (E.D. Va. 2007).

Although the Eauripik class plaintiffs have not sought an arrest warrant for the F/V Yuh Yow 127, the vessel is not currently in the FSM, having left for dry dock in Taiwan in July 2012 before the Second Verified Amended Complaint was filed. Therefore, even if Eauripik had an arrest warrant for the F/V Yuh Yow 127, no effort by them would have succeeded in effecting a valid arrest of the vessel in FSM jurisdiction. Since Eauripik has no control over the F/V Yuh Yow 127's movements while it is absent from the FSM Supreme Court's jurisdictional waters, Eauripik has presented some justification to enlarge time to serve process on the F/V Yuh Yow 127. Eauripik cannot be said to be acting in bad faith. No prejudice to the adverse party, the F/V Yuh Yow 127, from the added time to serve it process is apparent either. Its owners and operators are already in personam defendants in this class action and they thus have actual notice of the civil action against the vessel. Furthermore, an in rem defendant ought not to be able to have the complaint against it dismissed for lack of service merely by keeping the res out of the court's jurisdiction for 120 days. Itel Container Int'l Corp. v. Atlanttrafik Express Serv., Ltd., 686 F. Supp. 438 444 (S.D.N.Y. 1988).

Eauripik has shown more than ample cause for an enlargement of time for process to be served on the F/V Yuh Yow 127. The time for Eauripik to serve process on the F/V Yuh Yow 127 (for which it must first obtain an arrest warrant) will be enlarged until the start of trial in this matter. Id. at 445; Louisiana v. Kition Shipping Co,, 653 F. Supp. 2d 633, 639 (M.D. La. 2009); cf.M/V Easternline I, 17 FSM Intrm. at 84-85 (defendant vessels that were never served process were dismissed without prejudice after the start of trial).

III. Conclusion

Accordingly, the time for the Eauripik plaintiffs to serve process on the in rem defendant F/V Yuh Yow 127 is enlarged so as to allow the Eauripik plaintiffs to perfect service in rem on it if, at any time before the in personam action goes to trial, the vessel may be found and arrested within the court's jurisdiction. Eauripik not having asked that the time to perfect service in rem on the F/V Fu Kuan 606 be enlarged, party defendant F/V Fu Kuan 606 is therefore dismissed without prejudice.

* * * *