FSM SUPREME COURT TRIAL DIVISION
Cite as Chuuk Health Care Plan v. FSM Dep't of Justice, 24 FSM R. 400 (Chk. 2023)
CHUUK STATE HEALTH CARE PLAN,
Plaintiff,
vs.
FSM DEPARTMENT OF JUSTICE (Immigration), FSM
PUBLIC DEFENDERS' OFFICE, FSM DEPARTMENT
OF FINANCE AND ADMINISTRATION, and FSM
POSTAL SERVICE,
Defendants.
CIVIL ACTION NO. 2017-1002
(consolidated with Civil Action Nos.
2017-1003; 2017-1004 2017-1006)
ORDER ON PENDING MOTIONS
Dennis L. Belcourt
Associate Justice
Hearing: August 22, 2023
Decided: February 20, 2024
APPEARANCES:
For the Plaintiff:
Johnny Meippen, Esq.
P.O. Box 705
Weno, Chuuk FM 96942
For the Defendant:
Craig D. Reffner, Esq. (motion)
Josephine Leben James, Esq.(brief and argued)
Assistant Attorneys General
FSM Department of Justice
P.O. Box PS-105
Palikir, Pohnpei FM 96941
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A court evaluates a Rule 12(b)(6) motion to dismiss only on whether a plaintiff's claim has been adequately stated in the complaint and does not resolve the facts or merits of the case. A court's review is limited to the complaint's contents and the court must assume the facts alleged therein are true and view them in the light most favorable to the plaintiff. Dismissal can only be granted if it appears to a certainty that no relief could be granted under any facts which could be proven in support of the complaint. Chuuk Health Care Plan v. FSM Dep't of Justice, 24 FSM R. 400, 405 (Chk. 2023).
The Chuuk Health Care Plan automatically covers all Chuuk residents, employed or not, except noncitizens who are not employed and are not dependents of enrollees. The class of persons who are automatically enrolled includes persons stationed on Chuuk who are employed by a national government entity. And the law allows coverage to be extended, by agreement with the FSM government or other entities, to otherwise ineligible persons, such as non-Chuukese who are not present on an ongoing basis (and thus aren't Chuuk residents) or non-citizen residents who are not employed, such as retirees. Chuuk Health Care Plan v. FSM Dep't of Justice, 24 FSM R. 400, 405 (Chk. 2023).
The Chuuk Health Care Plan provides for automatic enrollment of FSM Government employees. Chuuk Health Care Plan v. FSM Dep't of Justice, 24 FSM R. 400, 405 (Chk. 2023).
The financing of essential care of all enrollees in the Chuuk Health Care Plan must be spelled out in regulation. Chuuk Health Care Plan v. FSM Dep't of Justice, 24 FSM R. 400, 406 (Chk. 2023).
Financing of the essential level of health insurance coverage under the Chuuk Health Care Plan should be pursuant to a proposal submitted by the Board to the legislature, and the Plan will be operative only on the enactment of the financing system for the essential level of health insurance mandated by the law. Chuuk Health Care Plan v. FSM Dep't of Justice, 24 FSM R. 400, 406 (Chk. 2023).
The Chuuk Health Care Plan Regulations impose a "medical security tax" on the gross wages of all employed residents of Chuuk, payable by employers and employees with the funds received from the tax to be deposited in the a Trust Fund. The 2001 Regulation, by its express terms, only impose this fee on private sector employers and employees and the Chuuk state government and its employees and not on FSM entities or their employees. Chuuk Health Care Plan v. FSM Dep't of Justice, 24 FSM R. 400, 406 (Chk. 2023).
The Chuuk Constitution does not speak to who pays for the health care program it requires to be established, only that the program must be provided to all employed residents present in Chuuk and funds received must be kept separate. Chuuk Health Care Plan v. FSM Dep't of Justice, 24 FSM R. 400, 407 (Chk. 2023).
Provisions that set certain requirements for billing for premiums for additional Chuuk health care coverages, do not apply to assessments for the Chuuk Health Care Plan's essential level coverage. Chuuk Health Care Plan v. FSM Dep't of Justice, 24 FSM R. 400, 407 (Chk. 2023).
A court is not justified in rewriting a regulation to reach beyond what its plain meaning provides. Courts apply the plain meaning whenever possible in interpreting regulations. Chuuk Health Care Plan v. FSM Dep't of Justice, 24 FSM R. 400, 407 (Chk. 2023).
Chuuk adheres to the provisions of Title 17 of the Trust Territory Code as its "Administrative Procedures Act." Chuuk Health Care Plan v. FSM Dep't of Justice, 24 FSM R. 400, 408 (Chk. 2023).
The burden is on the challenging party to establish the rules' invalidity by demonstrating that the rule-making agency adopted the rules in an unconstitutional manner, or exceeded its statutory authority, or otherwise acted in manner contrary to the statutory requirements. Chuuk Health Care Plan v. FSM Dep't of Justice, 24 FSM R. 400, 408 (Chk. 2023).
Chuuk statutorily requires that notice of intent to adopt the regulation be posted in convenient places in the district centers and in local government offices in the district, and, by district, the statute means the State of Chuuk, and by "local government" the statute means town or municipality, not a state government office. Chuuk Health Care Plan v. FSM Dep't of Justice, 24 FSM R. 400, 408 (Chk. 2023).
The only form of local government identified in the Chuuk Constitution is the municipality. Chuuk Health Care Plan v. FSM Dep't of Justice, 24 FSM R. 400, 408 (Chk. 2023).
No regulation is valid unless adopted in substantial compliance with the statutory requirements. By implication, a regulation adopted in substantial compliance with the statute will not be invalidated for reason of noncompliance with some part of the formal statutory requirements. "Substantial compliance" occurs when the statute has been followed sufficiently so as to carry out the intent for which it was adopted, and substantial compliance with respect to a notice provision occurs when notice is given that is equivalent to what is prescribed in statute. Chuuk Health Care Plan v. FSM Dep't of Justice, 24 FSM R. 400, 409 (Chk. 2023).
When the movant has not accomplished its intended purpose of establishing to a certainty that it could not be liable for assessments or premiums under the health care statute and related regulations on the facts as alleged in the complaint, the motion to dismiss for failure to state a claim for relief must be denied. Chuuk Health Care Plan v. FSM Dep't of Justice, 24 FSM R. 400, 409 (Chk. 2023).
Even when there is no opposition, the court will decline to grant a motion in the absence of good grounds for the motion. Chuuk Health Care Plan v. FSM Dep't of Justice, 24 FSM R. 400, 409 (Chk. 2023).
Motions must contain the movant's certification that a reasonable effort has been made to obtain the opposing party's agreement or acquiescence and that no such agreement has been forthcoming. Motions without such certification may be denied without prejudice on that basis alone. Chuuk Health Care Plan v. FSM Dep't of Justice, 24 FSM R. 400, 409 (Chk. 2023).
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DENNIS L. BELCOURT, Associate Justice:
This is a consolidation of a collections action in which Plaintiff, Chuuk State Health Care Plan ("CSHCP") is seeking to obtain payment of health insurance taxes starting October 2010 from the FSM Department of Justice, Divisions of Immigration and Labor, National Police, Department of Finance and Administration, FSM Office of the Public Defender, and the FSM Postal Service System (collectively, the FSM Government), under Chuuk State Law No. 2-94-06 ("the Act").
This consolidated matter comes before this Court on the following motions: (1)the motion to dismiss under Rule 12(b)(6) of the FSM Rules of Civil Procedure, filed April 17, 2017; (2) a Renewed Motion to Dismiss, filed on March 19, 2019; and (3) Plaintiff's Renewed Motion for Partial Summary Judgment, dated November 17, 2022.
For reasons stated below, I deny all motions.
CSHCP brought the actions on February 20, 2017. They were consolidated by this Court on June 27, 2017. In the complaints, CSHCP asserts that the FSM Government is, collectively, an employer under the Act of at least thirty-eight (38) persons who are residents of Chuuk, and is liable to CSHCP for premium contribution shares of both employer and those employees "in the same way that an employer is liable to the FSM Social Security Administration for both the shares of employees and employers under the FSM Social Security Administration Act." CSHCP asserts that in 2010, the Chuuk State Attorney General issued a reminder to employers "within the contemplation of" the Act, including FSMSSA, that enrollment in CSHCP is mandatory for all employed residents of Chuuk. It further alleges that the National FSM Government Defendants have not paid any premiums to CSHCP from the letter to the date of filing, owing all together approximately $67,000 for the period from October 1, 2010 to December 31, 2016. The complaints demand payment of that amount plus running amounts accrued thereafter biweekly.
On April 17, 2017, prior to consolidation, the FSM National Defendants respectively brought motions to dismiss under Rule 12(b)(6) of the FSM Rules of Civil Procedure, contending that under the Act, absent the FSM Government's agreement, the existence of which is not alleged in the complaints, its employees were not subject to the Act's mandatory enrollment provision, and that the regulations adopted under the Act, which established the tax on employers, did not apply to FSM Government employers or employees.
On July 16, 2017, CSHCP filed its response to the motion to dismiss, noting that the delay in its response was due to it not previously having received the motion to dismiss. CSHCP argues that as a matter of law the Act imposes liability on all employers with eligible employees physically present in Chuuk. This is so, according to CSHCP, "even though Part 1.3.8 (the regulation setting the tax) does not fully enumerate or otherwise specify or distinguish what employers are meant to be subject to it and what are not."
At a hearing on the FSM Government's motion to dismiss, CSHCP disclosed that there was an amendment to the original regulations in 2013. In an order dated August 8, 2017, this Court ordered the hearing on the motion to dismiss be held in abeyance pending delivery by CSHCP of the 2013 regulation amendment and briefing by the FSM Government on whether the amendment to the regulation was properly promulgated pursuant to the Chuuk State Administrative Procedures Act. That order permitted the FSM Government to renew the motion to dismiss by September 21, 2017.
At a hearing on March 29, 2018, argument was heard on a renewed motion to dismiss filed on September 15, 2017.1 While contending that there is a constitutional issue regarding a state's authority to tax employees of the FSM Government, the FSM Government nevertheless did not advance that argument as a basis for dismissing the Complaint, instead urging the argument that the amended regulations were not properly promulgated. CSHCP stated that there is nothing in its records regarding the promulgation of the regulations, but only the official copy of the regulations themselves. The Court ordered that CSHCP be given until May 1, 2018 to file further supporting documentation that the amendment to the regulation was properly promulgated pursuant to the Chuuk State Administrative Procedures Act. Order to Submit Additional Supporting Documentation (Apr. 2, 2018).
On April 27, 2018, CSHCP filed an affidavit of Karsom Enlet, Executive Director of Chuuk Health Care Plan. On March 19, 2019, the FSM Government filed a document entitled "Notice to Court of Plaintiff's Non-Compliance; Renewed Motion to Dismiss," which stated that the Court had on February 21, 2019 issued an order directing CSHCP to file a copy of its most recently promulgated regulations along with documentation to show that the regulations were promulgated in compliance with the Chuuk State Administrative Procedures Act.2 The document further states that CSHCP had not filed any pleading or other document in response to the order.
As a preliminary point in its renewed motion to dismiss, the FSM Government noted possible constitutional infirmities with the Act as interpreted by CSHCP, such as that it would have a state agency imposing a financial obligation on the FSM Government. The FSM Government nevertheless declined to raise the constitutional issues, arguing that the regulations were clearly invalid for failure to comply with the Chuuk State Administrative Procedures Act, which require that the agency give at least 30 days' notice to the public followed by a period for interest persons to submit their views. The FSM Government contends that there is no record that this has ever happened. Based on the lack of documentation from CSHCP, the FSM Government moves to dismiss pursuant to Rule 41 of the FSM Rules of Civil Procedure.
On March 25, 2019, CSHCP submitted a response to the February 21, 2019 order, attaching the following: a copy of the amended regulation and "Public Notice/Invitation for Comments." CSHCP further argued that the alleged noncompliance with the Chuuk State Administrative Procedures Act was untimely, as it needed to be raised within one year. Moreover, CSHCP contends that the burden should be on the FSM Government to prove noncompliance.
On October 21, 2019, the Court issued an order for a hearing on November 6, 2019, noting that it was "still not satisfied with the evidence submitted as to the proper promulgation of the purported amended regulation." On January 17, 2020, this Court issued an order setting an evidentiary hearing for April 8, 2020 on compliance with the promulgation requirements and taking the pending motion to dismiss under advisement. That hearing was cancelled due to COVID-19 travel restrictions, but was eventually held on August 22, 2023.
A. Bases for the Motions to Dismiss
The FSM Government's bases for contending that the Complaint must be dismissed is that(1) the Act by its terms (section 3-2) only applies to FSM Government employees if the FSM Government enters into an agreement with CSHCP to cover them, (2) the 2001 regulation imposing a tax on employers did not by its terms apply to the FSM Government, and (3) the 2012 regulations were not promulgated in conformity with the Chuuk Administrative Procedures Act.
B. Legal Standard
A court evaluates a Rule 12(b)(6) motion to dismiss only on whether a plaintiff's claim has been adequately stated in the complaint and does not resolve the facts or merits of the case. A court's review is limited to the complaint's contents and the court must assume the facts alleged therein are true and view them in the light most favorable to the plaintiff. Dismissal can only be granted if it appears to a certainty that no relief could be granted under any facts which could be proven in support of the complaint. Ambros & Co. v. Board of Trustees, 11 FSM R. 17, 24 (Pon. 2002).
C. Application of Legal Standard
A motion to dismiss should be granted if it appears to a certainty that the FSM Government could not be liable for assessments or premiums under the Act and related regulations on the facts as alleged in the complaint.
1. As to the first basis for dismissal, whether the FSM Government could be liable given that there is no allegation in the Complaint that it entered into an agreement under Section 3-2, I analyze the text of the Act.
Health Care Coverage under the Act
To put the Act in context, we look first to the Chuuk State Constitution. Section 7 of Article X of the Chuuk State Constitution, which took effect in 1989, reads as follows:
The State Government shall provide for the establishment and administration of a comprehensive system of medical or health insurance which is mandatory for all employed residents of the State of Chuuk while present in the State. All revenues received under this system of medical or health insurance, and all other revenues received by the Health Department as payment for medicine and medical services, shall be separated from any general fund established by the Legislature and used only for medical purposes.
The Chuuk State Legislature enacted Chuuk State Law No. 2-94-06 (the "Chuuk Health Care Act of 1994" ("the Act")) to
improve the provision and quality of health to residents of the State of Chuuk, to establish a financial system to provide universal coverage of an essential level of health care for all eligible enrollees and to create a means for collection of health care premiums for additional coverage.
Chk. S.L. No. 2-94-06, § 1-2.
Section 3-1 of the Act mandates coverage for residents of Chuuk as follows:
Every resident of Chuuk shall be enrolled in and shall be eligible to receive benefits as provided under this Act, except that unemployed noncitizens residing in the State who are not dependents of enrollees are not eligible, except as provided in Section 3-2 of this Act.
Section 3-2 of the Act, in pertinent part as follows, permits CSHCP, through its Board, to enter into agreements to cover persons who in Chuuk but are not employed Chuuk residents, as follows: "The Board is authorized to enter into agreements with the National FSM Government, international organizations, or other entities to extend the benefits of this Act to persons within Chuuk not otherwise eligible therefor."
The plain meaning of Section 3-1 and 3-2 of the Act, read together, is that CSHCP automatically covers all Chuuk residents, employed or not, except noncitizens who are not employed and are not dependents of enrollees. Chuuk Health Care Plan v. Department of Educ., 18 FSM R. 491, 496 (Chk. 2013). According to the clear terms of those provisions, the class of persons who are automatically enrolled includes persons stationed on Chuuk who are employed by a National Government entity, such as the defendants herein. Section 3-2 does not apply to resident employees of FSM entities who are already covered by operation of section 3-1. Contrary to the FSM Government's position, section 3-2 is in the law to allow coverage to be extended, by agreement with the FSM Government or other entities, to otherwise ineligible persons, such as non-Chuukese who are not present on an ongoing basis (and thus aren't Chuuk residents) or non-citizen residents who are not employed, such as retirees.
In conclusion, the Act provides for automatic enrollment of FSM Government employees.
2. As to the second basis for dismissal, that the 2001 Regulations of CSHCP did not apply to the FSM Government and its employees, CSHCP strenuously contends that the Act in-and-of-itself applies the tax to the FSM Government and its employees. However, CSHCP's contention is based on a misreading of the Act. Under the Act, financing of essential care of all enrollees must be spelled out in regulation. As discussed in the following analysis, the application of the tax in that regulation to only Chuuk State, its employees, and private sector employers and employees in Chuuk meant that the FSM Government and its employees are not subject to the tax.
Financing under the Act
While requiring near-universal coverage, the Act leaves it up to the Board, through regulations, as to from whom and how much it requires payment. For purposes of financing, the Act divides coverage into two levels: (1) universal coverage for essential care, as provided for by regulation, for which CSHCP Board assesses the requisite amounts and sources and receives payments, and (2) additional levels of coverage, for which the Board determines the premium amounts to be charged by CSHCP, bills and receives payments thereon. Chk. S.L. No. 2-94-06, §§ 4-7; 5-1; 5-2. The assessment and determination of premium amounts to be charged are done by regulation. Id The Act contemplates that financing of the essential level of health insurance coverage would be pursuant to a proposal submitted by the Board to the legislature. Id. § 8-2. The Act further provides that "no level of coverage may be extended, no mandatory premiums may be imposed, nor obligation to provide benefits deriving therefrom may be undertaken prior to the enactment of a financing system for coverage of persons under the essential level of care pursuant to Title VII3 of this act." Id § 10-1. In other words, CSHCP is to be operative only on the enactment of the financing system for the essential level of health insurance mandated by the law.
Financing Provisions in the 2001 Regulations
On May 16, 2001, the Governor of the State of Chuuk signed regulations approved by the Plan Board,4 which included a provision taxing private sector employers, private sector employees, Chuuk State, and Chuuk State employees on the employees' gross wages at the rate of 2.5% for the employer's share and 2.5% for the employee's share. This financing mechanism is in Chapter III, part 1.3.8 of Chuuk State Health Care Plan Regulations ("the 2001 Regulations"). It imposes a "medical security tax" (pursuant to section 8.10 of the Act, as amended) on the gross wages of all employed residents of the State of Chuuk, payable by employers and employees in accordance with the following:
| Chuuk State government | 2.5% |
| Chuuk State government employee | 2.5% |
| Private Sector Employer | 2.5% |
| Private Sector Employee | 2.5% |
The funds received from the tax are to be deposited in the Trust Fund established by the Act. Part 1.3.3 of the Regulations and the Act, section 6-1(1) and (2). In the 2001 Regulations, the Board, with the Governor's approval, also set premiums for additional coverage. Pt. 2.0.3(3).
The financing mechanism in Chapter III, Part 1.3.8 of the 2001 Regulations, by its express terms, is only imposed on private sector employers and employees and Chuuk State Government and its employees. By its terms, that provision fails to impose charges on FSM entities or their employees.5 As the FSM Government is not a state or private entity, the provision does not apply to it.
The question for this Court is whether it should read Chapter III, Part 1.3.8 of the 2001 Regulations to apply the tax to all employers and employees, noting the intent of Article X, section 7 of the Chuuk Constitution and the Act to provide universal coverage to Chuuk employees and their dependents.
Article X, section 7 of the Chuuk Constitution does not speak to who pays for the program it requires to be established, only that the program must be provided to all employed residents present in Chuuk and funds received must be kept separate:
The State Government shall provide for the establishment and administration of a comprehensive system of medical or health insurance which is mandatory for all employed residents of the State of Chuuk while present in the State. All revenues received under this system of medical or health insurance, and all other revenues received by the Health Department as payment for medicine and medical services, shall be separated from any general fund established by the Legislature and used only for medical purposes.
Id
In sections 5-1 and 5-2, the Act sets certain requirements for billing for premiums for additional coverages, which premiums are provided for in Chapter III, Part 2.0.3 of the Regulations. Given the precise wording of the Act and its differentiation between assessments for the essential level of coverage and premiums for additional coverage, I find that the references to premiums in sections 5.1 and 5.2 do not apply to assessments for the essential level coverage.6
On the other hand, there are requirements that the amount necessary to fund the essential level coverage be assessed by regulation and that "[t]he aggregate of all universal coverage payments and premium amounts, along with other sources of income for CSHCP, shall be sufficient to pay all costs of benefits under CSHCP, the costs of administering CSHCP and unexpected demands on CSHCP for payment and other purposes." Chk. S.L. No. 2-94-06, § 5-1(1).
These requirements do not justify this Court in rewriting Chapter III, Part 1.3.8 of the 2001 Regulations to reach beyond what its plain meaning provides. Courts apply the plain meaning whenever possible to the interpretation of statutes. Rodriguez v. Bank of the FSM, 11 FSM R. 367, 378 (App. 2003); FSM v. Wainit, 12 FSM R. 105, 111 (Chk. 2003) (when the statute's language is plain and unambiguous, it declares its own meaning and there is no room for construction). So it is with regulations as well. FSM v. Nifon, 14 FSM R. 309, 313 (Chk. 2006). Unable to construe Chapter III, Part 1.3.8 of the 2001 Regulations to apply to the FSM Government and its employees in Chuuk, I find that CSHCP is not entitled to hold FSM Government liable under the Complaint for the period in which the 2001 Regulations were and are in effect without amendment.
The third basis is whether the 2012 Regulation Amendment, which applies the tax in Chapter II, Part 1.3.8 of the regulations to public sector employers and employees, was adopted in conformity with the Chuuk State Administrative Procedures Act.
The 2012 Regulation Amendment
After the complaints were filed, counsel for CSHCP alerted this Court to a regulation amendment purportedly adopted in 2012 that ostensibly changed the applicable law as to whether the FSM Government was liable for the taxes sought by CSHCP to be recovered in this proceeding. The amended version provided for a tax as follows:
A medical care tax pursuant to Sections 5-4 and 5-6 of C.S.L. No. 2-94-06 is hereby imposed on the gross wages of all employed residents of the State of Chuuk which shall be payable by employees in accordance with the following:
| Public Sector Employer | 3.0% |
| Public Sector Empoyee [sic] | 3.0% |
| Private Sector Employer | 3.0% |
| Private Sector Employee | 3.0% |
Insofar as the Act by its clear terms purports to apply to FSM Government employees residing in Chuuk, the 2012 Regulation Amendment by its terms purports to impose a tax on those employees and their employer.
If properly promulgated, such an amendment would be a basis for denying the motion for dismissal, as it would not be a certainty that no relief could be granted to CSHCP on the set of facts it has alleged, for the period in which the amendment was in effect.
Chuuk State adheres to the provisions of Title 17 of the Trust Territory Code as its "Administrative Procedures Act" ("CSAPA"). Chuuk Health Care Plan v. Pacific Int'l. Inc., 17 FSM R. 535, 540 n.1 (Chk. 2011). This Court has previously held that "the burden is on the challenging party to establish the rules' invalidity by demonstrating that the rule-making agency adopted the rules in an unconstitutional manner, or exceeded its statutory authority, or otherwise acted in manner contrary to the statutory requirements." Id at 540.
The statutory requirements of CSAPA include that notice of intent to adopt the regulation be posted "in convenient places in the district centers and in local government offices in the district." By district is meant the State of Chuuk.7 17 TTC § 4(1)(a) (emphasis added). The literal requirement of the statute is that posting be made to more than multiple state offices and local government offices.
On August 22, 2023, an evidentiary hearing on the promulgation of the 2012 Regulation was held in this matter, at which testimony of former CSHCP Executive Director Karsom Enlet and current Executive Director and former Board Chairman Winiplat Bisalen was received concerning the adoption and public notice of the 2012 Regulation Amendment. A decade had passed, but the witnesses, supported with exhibits, were able to recall some details of the steps CSHCP followed.
What was clear from the hearing is that notice was posted on Weno in multiple state offices and in one local government office. According to Exhibit 4, Affidavit of Karsom Enlet, the notice was posted in "local government offices," such as the Department of Education, Department of Administrative Services, Department of Transportation, the Governor's Office, and the Weno Municipal Office.
It is apparent that CSHCP misapprehended the meaning of "local government offices" in Section 4 of the CSAPA. CSHCP thought that Chuuk state offices were local government offices. In its ordinary usage, "local government" means town or municipality, not a state government office. "Local government" is defined as "[c]ity, county or other governing body at a level smaller than a state." BLACK'S LAW DICTIONARY 939 (6th ed. 1990). The only form of local government identified in the Chuuk Constitution is the municipality. Chk. Const. art. XIII.
Weno is a municipality and its municipal office is thus the only local government office among the locations identified by Mr. Enlet. The rest of the locations, state government offices, may constitute "convenient places in the district centers" under Section 4 of the CSAPA, but are not local government offices. With Section 4 requiring posting at multiple local government offices, yet CSHCP only posting at one local government office, I conclude that the FSM Government has met its initial burden of showing noncompliance by CSHCP with the literal statutory requirements of Section 4 of the CSAPA.
CSHCP having not strictly complied with the literal statutory requirements, the regulation will nevertheless be found valid if CSHCP can show substantial compliance. Section 4(3) of the CSAPA provides in pertinent part that "[n]o regulation adopted is valid unless adopted in substantial compliance with this section." By implication, a regulation adopted in substantial compliance with Section 4 of the CSAPA will not be invalidated for reason of noncompliance with some part of the formal statutory requirements. See also Louis v. FSM Social Sec. Admin., 20 FSM R. 268, 271 (Pon. 2015). As yet undefined in the FSM, "substantial compliance" has been described elsewhere as having occurred when "the statute has been followed sufficiently so as to carry out the intent for which it was adopted." Dorignac v. Louisiana State Racing Comm'n, 436 So.2d 667, 669 (La. 1983).
Substantial compliance thus occurs with respect to a notice provision when notice is given that is equivalent to what is prescribed in statute. The statute herein prescribes at least two locations in Chuuk center and two local government offices. CSHCP posted at four offices at Chuuk center and one local government offices. Based on the evidence presented, I find that the postings identified in the hearings were substantially compliant with the statutory requirements.
The FSM Government's motion to dismiss the complaint based on the alleged 2012 Regulations therefore fails. The motion, in failing to negate the 2012 Regulations, has not accomplished its intended purpose of establishing to a certainty that the FSM Government could not be liable for assessments or premiums under the Act and related regulations on the facts as alleged in the complaint. I therefore deny the FSM Government's motion to dismiss for failure to state a claim for relief.89
On November 17, 2022, CSHCP filed a motion for partial summary judgment,10 arguing that the Act covers all persons employed in the state of Chuuk, that the CSHCP Board was required to charge premiums as to all of them, and that it would be in contravention of the Act to exempt the Government and its employees from the requirement that they pay a percentage of the gross wages as provided by CSHCP's Regulation 1.3.8. The Government did not file an opposition to this motion, which was served on someone at the Department of Justice in Pohnpei who signed for it. Nevertheless, even where there is no opposition, this court will decline to grant a motion in the absence of good grounds for the motion. FSM Social Sec. Admin. v. Chuuk Public Utility Corp., 16 FSM R. 333, 334 (Chk. 2009) (failure to assert meritorious defense as grounds for denial of motion to vacate an entry of default).
The motion fails to comply with Rule 6(d) of the FSM Rules of Civil Procedure. Under that rule, all motions must contain the movant's certification that a reasonable effort has been made to obtain the opposing party's agreement or acquiescence and that no such agreement has been forthcoming. Motions without such certification may be denied without prejudice on that basis alone. Calvary Baptist Church v. Pohnpei Bd. of Land Trustees, 9 FSM R. 238, 239 (Pon. 1999). See also O'Sullivan v. Panuelo, 9 FSM R. 589, 597, 599 (Pon. 2000).
I therefore deny CSHCP's motion for partial summary judgment without prejudice.
The motions discussed herein are denied. The FSM Government shall have twenty (20) days from the date this order is served on it to file and serve its responsive pleading.
_______________________________Footnotes:
1 The renewed motion to dismiss is not showing in the docket or found in the file but is summarized in an April 2, 2018 order.
2 There appears to be no such order entered on the docket.
3 This appears to be a typo, and should instead be Title VIII.
4 The 2001 regulations can be found at http://fsmlaw.org/chuuk/regulations/index.htm.
5 Note that CSHCP claims reimbursement rights as to other coverage of FSM National FSM Government employees residing in Chuuk (such as through MiCare). See 2001 Regs., ch. V, pt. 3.0.1 (coordination of benefits).
6 The Complaint does not assert any liability for unpaid premiums for additional coverage.
7 FSM v. Kansou, 14 FSM R. 136, 138 n.1 (Chk. 2006).
8 I also do not grant the FSM Government's motion to dismiss based on failure to prosecute pursuant to Rule 41(b). I do not find on the part of CSHCP "a clear record of delay or contumacious conduct by the plaintiff, or upon a serious showing of willful default" that would warrant a sanction of dismissal with prejudice. McGillivray v. Bank of the FSM, 7 FSM R. 19, 23 (Pon. 1995).
9 Further, without prejudice, I decline to consider issues raised by the FSM Government in its response to CSHCP's closing argument that were not raised in the motions to dismiss (in fact, as noted above, the FSM Government expressly held back such issues in its motions (e.g., the Constitutionality of a state agency imposing a financial burden on the FSM Government)). I may not consider these issues insofar as they constitutes a reply beyond the scope of the motion. Sipos v. Crabtree, 13 FSM R. 355, 361 (Pon. 2005).
10 The docket in this case does not appear to contain an earlier motion for partial summary judgment, so this Court is treating it as an initial motion.
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