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Marshall Islands Development Corporation and Leon v Majuro Atoll Local Government (2) [1990] MHSC 8; 1 MILR (Rev) 209 (10 September 1990)

1 MILR (Rev.) 209

IN THE SUPREME COURT
REPUBLIC OF THE MARSHALL ISLANDS

S.Ct. CIVIL NO. 89-07
(High Ct. Civil No. 1989-348)

MARSHALL ISLANDS DEVELOPMENT CORPORATION AND SAM LEON (dba CRYSTAL AMUSEMENT CENTER),
Plaintiffs-Appellees,

-v-

MAJURO ATOLL LOCAL GOVERNMENT,
Defendant-Appellant,

and

REPUBLIC OF THE MARSHALL ISLANDS,
Intervenor-Appellant.

APPEAL FROM THE HIGH COURT

SEPTEMBER 10, 1990

ASHFORD, C.J.
BIRD, A.J., and PHILIPPO, A.J. (sitting by designation)

SUMMARY:

An amusement center challenged a local ordinance outlawing the use and possession of poker machines, asserting that the Republic's Gambling Devices Act and Import Duties Act permitted the machines to be imported and used. The Supreme Court ruled that the Acts relied on by the amusement center had been repealed, so they could not defeat the ordinance.

DIGEST:

1. APPEAL AND ERROR – Questions Reviewable – Cross Appeal: In the absence of a timely filed cross appeal, the Supreme Court will not rule upon a claimed error of the High Court raised in the brief of the Appellee.

2. STATUTES – Repeal – Incorporated Statute: Repeal of a statute that re-enacted, through incorporation by reference, a repealed statute, effects a repeal of the statute incorporated by reference.

OPINION OF THE COURT BY ASHFORD, C.J.

These are appeals from a summary judgment granted by the High Court in favor of Plaintiffs-Appellees. We reverse.

Plaintiffs-Appellees Marshall Islands Development Corporation and Sam Leon (hereinafter, collectively, "MIDC") filed a declaratory judgment action against Defendant-Appellant Majuro Atoll Local Government (hereinafter "MalGov") seeking a judicial determination that MalGov' s Ordinance No. 1989-1, entitled "Gambling Device Ordinance 1989" (a) is unconstitutional, as applied to poker machines, because it is inconsistent with the national Gambling Devices Act, 31 MIRC Ch. 2, or (b), in the alternative, that the regulation of gambling was pre-empted by the Gambling Devices Act, leaving no opportunity for regulation by the local government. Intervenor-Appellant Republic of the Marshall Islands (hereinafter "Republic") intervened in the case to assist in defending the legality of the ordinance. MalGov filed a motion for summary judgment, but all parties agreed and informed the court that the motion should be treated as a motion for judgment on the pleadings by MalGov. The High Court, without explanation, treated it as a motion for summary judgment and gave judgment for MIDC, the nonmoving party. The High Court ruled that the Gambling Devices Act, as interpreted by the Nitijela, permitted the use and possession of poker machines. Based on that conclusion, the High Court found the Gambling Devices Ordinance to be inconsistent with the Gambling Devices Act and, therefore, unconstitutional. See Article IX, § 2(1) of the Constitution. The High Court did not reach MIDC's pre-emption claim.

[1] The appeals present both procedural and substantive issues. We will deal, first, with the procedural issues. One of these is MIDC's complaint that the trial court erred in allowing the Republic to intervene. We will not rule on this point, inasmuch as no cross-appeal from the final judgment was filed by MIDC. The other is the complaint by MalGov and the Republic that the High Court erred in treating the motion as one for summary judgment when the parties had agreed that it should be treated as a motion for judgment on the pleadings. The court is not necessarily bound by the parties' characterization of a pleading, but we have elected to treat the motion in the manner to which the parties agreed.

We now proceed to examination of the substantive issues.

In its summary judgment, the High Court correctly noted that the Gambling Devices Act, 31 MIRC Ch. 2, was repealed by the Import Duties Act 1984 (P.L. 1984-3) and re-enacted by the Import Duties (Amendment) Act 1984 (P.L. 1984-28). The repealing act, P.L. 1984-3, imposed an import tax of 25% on "(a)musement machines, including video, pinball, pachinko, and gambling devices." See 11 MIRC Ch. 5, Schedule, item 27. The High Court reasoned that if the National Government taxed the importation of amusement machines, including gambling devices, it could not have intended that use and possession of them be illegal and, therefore, the ordinance's prohibition against possession and use of poker machines for gambling was inconsistent and unconstitutional.

The flaw in the summary judgment was its failure to recognize changes in the national law that became effective prior to the May 29, 1989 effective date of the local ordinance. In 1989, the Nitijela repealed the Import Duties Act 1984 and replaced it with the Import Duties Act 1989, effective May 1, 1989. P.L. 1989-49, §§ 20 and 21. In the 1989 statute, no import duty is imposed on gambling devices and the Gambling Devices Act is not mentioned.

[2] These events require us to determine whether the Gambling Devices Act, upon which MIDC relies, did or did not survive the repeal of the Import Duties Act 1984. Because the revival of the Gambling Devices Act was by an amendment to the Import Duties Act 1984, incorporating the Gambling Devices Act within that statute by reference, we conclude that the repeal of the Import Duties Act 1984 in its entirety effected a repeal, also, of the statute it had incorporated by reference. This conclusion is consistent with accepted rules of statutory construction announced by case law and the leading United States treatise on that subject.

Several venerable United States Supreme Court cases have announced principles of law applicable to incorporating and incorporated statutes that have stood the test of time. It often happens that a legislative body, for simplicity and convenience, will incorporate by reference the provisions of an earlier statute into a later statute. The cases referred to establish that the repeal or amendment of the incorporated statute has no effect upon the incorporating statute, which continues in force the incorporated statute with the same meaning and effect that it had at the time of its adoption by the incorporating statute. Kendall v. United States, [1818] USSC 18; 12 Pet. 522, 9 L. Ed 1181 (1838, U.S.); In Re Heath, [1892] USSC 91; 144 U.S. 92, 36 L.Ed. 358, 12 S.Ct. 615 (1892); Hassett v. Welch, [1938] USSC 52; 303 U.S. 303, 82 L.Ed. 858, 58 S.Ct. 559 (1938). It follows from this that if the statute incorporated by reference owes its efficacy solely to the incorporating statute, repeal of the latter effects a repeal of the former.

The fact that the Gambling Devices Act was revived by amendment to the Import Duties Act 1984 does not require a different result. When an act (here, the Import Duties Act 1989) repeals a statute as amended (here, the Import Duties Act 1984), both the original act and the amendment are repealed unless a legislative intention to the contrary is clearly indicated. Sutherland, Statutory Construction (4th Ed., 1985 Rev.) § 22.38. The repealing language of the Import Duties Act 1989 is simple, direct and admits of no intent to preserve any part of the repealed Act.

Where an express repeal is clearly stated, identifying the affected act with reasonable certainty, the court has no responsibility or authority but to apply the legislative will as expressed. Sutherland, Statutory Construction (4th Ed., 1985 Rev.) § 23.07.

Upon the effective date of the MalGov Gambling Device Ordinance 1989, the Gambling Devices Act having been repealed (for the second time), there was neither an inconsistency with nor a pre-emption by national law to render that ordinance ineffective.

The judgment of the High Court is reversed and the case is remanded with instructions to enter judgment on the pleadings in favor of MalGov.

R. Barrie Michelsen for Defendant-Appellant Majuro Atoll Local Government

Dennis McPhillips, Assistant Attorney General, for Intervenor-Appellant Republic of the Marshall Islands

David M. Strauss for Plaintiffs-Appellees Marshall Islands Development Corporation and Sam Leon