[24 FSM R. 475]

CIVIL ACTION NO. 2013-3001

Trial: April 25, 2024
Decided: May 9, 2024

APPEARANCES:

For the Plaintiff:              Jeffrey S. Tilfas, Esq.
                                       Assistant FSM Attorney General
                                       P.O. Box PS-105
                                       Palikir, Pohnpei FM 96941

For the Defendant:         Stephen V. Finnen, Esq.
                                       P.O. Box 1450
                                       Kolonia, Pohnpei FM 96941

HEADNOTES

Admiralty – Jurisdiction and Extent; Jurisdiction – In Rem

When neither the arrested vessel nor its cash bond substitute is any longer in the jurisdiction or under the court's control, the vessel can no longer be a party to the case. FSM v. Hung Yao Chang, 24 FSM R. 475, 476 n.1 (Yap 2024).

Marine Resources – Regulation of

FSM-licensed fishing vessels are required to install and maintain in good working order an approved transponder (also referred to as an automatic location communicator or ALC) that continuously, accurately, and effectively transmits data to FSM authorities about the vessel's position, fishing, and such other activities of the vessel as might be required. FSM v. Hung Yao Chang, 24 FSM R. 475, 478 (Yap 2024).

Marine Resources – Regulation of; Statutes – Construction

An established canon of statutory construction states that exceptions are not to be implied. An exception cannot be created by construction. FSM v. Hung Yao Chang, 24 FSM R. 475, 479 (Yap 2024).

Marine Resources – Regulation of; Statutes – Construction

A court may presume a legislature intended an exception or qualification where interpretation otherwise points toward a manifest contradiction of a law's apparent purpose or a literal interpretation produces an absurd result. FSM v. Hung Yao Chang, 24 FSM R. 475, 479 (Yap 2024).

Marine Resources – Regulation of – Penalties; Statutes – Construction

When neither interpretation does not otherwise point toward a manifest contradiction of a law's apparent purpose and a literal interpretation does not produce an absurd result, the court cannot construe an exception to the ¶ 611(5) penalty provisions or conclude that Congress intended or implied an exception to ¶ 611(5). FSM v. Hung Yao Chang, 24 FSM R. 475, 479 (Yap 2024).

Marine Resources – Regulation of – Penalties

When the defendants' violations of 24 F.S.M.C. 611(1), a strict liability statute, appear unintentional, the court may impose the minimum penalty allowed. FSM v. Hung Yao Chang, 24 FSM R. 475, 479 (Yap 2024).

COURT'S OPINION

LARRY WENTWORTH, Associate Justice:

This fishing violation case is before the court in the following

PROCEDURAL POSTURE

On May 7, 2013, the FSM filed this civil suit, alleging that the defendants¹ failed to maintain the Kuo Rong 113's transponder in working order and failed to ensure that the transponder transmitted the required information continuously, accurately, and effectively. It sought the imposition of penalties for multiple violations for each of the four days that the Kuo Rong 113 had been fishing in the FSM's exclusive economic zone ("EEZ") without a effective, working transponder.

The trial court granted partial summary judgment that the defendants were jointly and severally liable for four violations (one each day) punishable under 24 F.S.M.C. 611(5), for failure to ensure effective transmission of required information from the Kuo Rong 113's transponder on each day between April 27, 2013 and April 30, 2013, inclusive, FSM v. Kuo Rong 113, 20 FSM R. 27, 35 (Yap 2015). It later imposed a total sanction of $175,000 under 24 F.S.M.C. 920. Both sides appealed.

The appellate court affirmed the imposition of a separate penalty for each of the four days involved but vacated the penalty award and judgment, ruling that the trial court should have penalized violations of 24 F.S.M.C. 611(1) that were also violations of 24 F.S.M.C. 906(1) as one violation under 24 F.S.M.C. 611(5) and that civil penalties should, pursuant to section 24 F.S.M.C. 901(1), be assessed on a daily basis. FSM v. Kuo Rong 113, 22 FSM R. 515, 524, reh'g denied, 23 FSM R. 8, 11 (App. 2020). The matter was remanded for further trial court proceedings.

This case was tried on April 25, 2024. The FSM did not call any witnesses. The defendants called Hilo Hsueh, the Luen Thai Fishing Venture, Ltd.'s regional manager when the Kuo Rong 113 was arrested. Admitted exhibits included the deposition transcripts of Ramesh Chand, the Forum Fishing Agency ("FFA") Vessel Monitoring System ("VMS") manager; Patrick McKenzie, the Executive Director of National Oceanic Resource Authority ("NORMA"); Justino Helgen, NORMA's compliance manager; and Thomas Ignacio, a VMS installer and technician located on Pohnpei. Based on the trial testimony and on the admitted exhibits, the court makes the following

FINDINGS OF FACT.

1. The Kuo Rong 113 was a longline fishing vessel duly licensed to fish in the FSM's EEZ. Like all FSM-licensed vessels, it was required to install and maintain in good working order an approved transponder (also referred to as an automatic location communicator or ALC) on the Kuo Rong 113 that continuously, accurately, and effectively transmitted data concerning the Kuo Rong 113's position, fishing, and such other activities of the vessel as NORMA might require to NORMA's designated receiver, the Forum Fishing Agency ("FFA"). The Kuo Rong 113 had an approved transponder installed.

2. The Kuo Rong 113 exited the EEZ and went into dry dock in Taiwan, at which time all electronics, including its transponder, were turned off. Once the Kuo Rong 113 was refitted in dry dock, the transponder was reactivated. The Kuo Rong 113 would not have left Taiwan unless everything seemed to be working properly.

3. The Kuo Rong 113 re-entered the FSM's EEZ and started fishing on April 27, 2013. The Kuo Rong 113's transponder was on and the captain believed that it was working properly and transmitting the required data., but there was no way someone on board the vessel would know for certain whether the transponder was reporting correctly or not unless informed of that by NORMA or the FFA.

4. The Kuo Rong 113 continued fishing in FSM waters until it was boarded and arrested on April 30, 2013, because NORMA and the FFA were not receiving data from the Kuo Rong 113's transponder. When the vessel was boarded by the FSM National Police, the transponder appeared to be on and functioning properly, but it was not transmitting effectively.

5. Kuo Rong 113's agent, Luen Thai Fishing Venture, Ltd., filed notice of the Kuo Rong 113's entry into FSM waters with NORMA.

6. When Thomas Ignacio, the VMS technician, boarded the Kuo Rong 113 after it was brought into Pohnpei port, the transponder was on and looked normal to him. But, after troubleshooting, Ignacio discovered that the transponder's data network identification was not in the right place so that the transponder was not reporting to NORMA or the FFA. The transponder's software needed to be re-downloaded and reprogrammed. At Ignacio's request, the FFA deleted the whole data network identification in the system and downloaded a different one. A day or two after this reconfiguration, the transponder started reporting properly.

7. If the Kuo Rong 113's captain, or if the Kuo Rong 113's agent, Luen Thai Fishing Venture, Ltd., had known, or had been informed, that the Kuo Rong 113's transponder was not functioning properly, its agent would have informed NORMA and would have asked that the Kuo Rong 113 be permitted to report the required data manually every four hours until the Kuo Rong 113 could make port and have its transponder fixed by an authorized transponder technician. NORMA often allowed temporary manual reporting when transponders malfunctioned.

Based on the above facts and cognizant of the case's procedural posture, the court makes the following

CONCLUSIONS OF LAW

in 2013, the relevant statute concerning transponders provided that:

(1) The Authority may require, as a condition of fishing in the exclusive economic zone, that the operator of any vessel:

(a) install on such vessel, at its own expense, a transponder approved by the Authority;

(b) maintain such transponder in good working order at all times while in the fishery waters or such other area as may be agreed or designated; and

(c) ensure that any information or data required by the Authority to be transmitted by the transponder is transmitted continuously, accurately and effectively to the designated receiver.

. . . .

(4) No person shall intentionally, recklessly or unintentionally destroy, damage, render inoperative or otherwise interfere with a machine aboard a vessel which automatically feeds or inputs information or data into a transponder, or intentionally feed or input information or data into a transponder which is not officially required or is meaningless.

(5) Any person who violates subsection (1) or subsection (4) of this section, by failing to install, maintain, or ensure the transmission of information from a transponder as required, is subject to a civil penalty of not less than $100,000 and not more than $500,000.

24 F.S.M.C. 611.²

The defendants argue that, since 24 F.S.M.C. 611(1) required the defendants to perform affirmative acts, and since the defendants, to the best of their knowledge, performed those affirmative acts, the court must construe an exception to the penalties mandated by ¶ 611(5) for the defendants' unknowing violation of ¶ 611(1)(c) or (b), and, having construed an exception, the court should then impose penalties under the catchall penalty provision in 24 F.S.M.C. 920. In 2013, that provision provided that "[a]ny person who commits an act in violation of any provision of this subtitle, for which no civil penalty is otherwise specified in this chapter or the preceding chapters, shall be subject to a civil penalty of not less than $40,000 and not more than $100,000." 24 F.S.M.C. 920 (since amended to eliminate the minimum amount).

An established canon of statutory construction states that "exceptions are not to be implied. An exception cannot be created by construction." 2A NORMAN J. SINGER, SUTHERLAND STATUTORY CONSTRUCTION ¶ 47.11, at 165 (5th ed. 1992); See also Export Group v. Reef Indus., Inc., 54 F.3d 1466, 1473 (9th Cir. 1995). A court may also "presume a legislature intended an exception or qualification where interpretation otherwise points toward a manifest contradiction of a law's apparent purpose or a literal interpretation produces an absurd result," 2A NORMAN J. SINGER, SUTHERLAND STATUTORY CONSTRUCTION ¶ 47.11, (7th ed. 2023) (footnote omitted), but neither condition applies in this case. The court therefore cannot construe an exception to the ¶ 611(5) penalties or conclude that Congress intended or implied an exception to ¶ 611(5).

The appellate court held that "24 F.S.M.C. 611(1) is a strict liability statute." Kuo Rong 113, 22 FSM R. at 526. However, since the defendants' violations of 24 F.S.M.C. 611(1) appear unintentional, the court will impose only the minimum penalty allowed by ¶ 611(5) – $100,000 per day for each of the four days of fishing without a properly working transponder. Since the defendants have already paid $175,000 as a penalty for these violations, that amount is setoff as a credit against the $400,000. The clerk is directed to enter judgment against the defendants for the balance – $225,000.

CONCLUSION

Accordingly, the clerk shall enter judgment in the FSM's favor against the defendants, jointly and severally, in the amount of $225,000.

Footnotes:

¹ Throughout this case, the defendants have been listed as Kuo Rong 113, a long line fishing vessel, Hung Yao Chang, captain of the fishing vessel, Syu Bei-Jing, permit holder, and Luen Thai Fishing Venture, Ltd., (company). It appears from trial testimony that the Kuo Rong 113 may no longer exist, having been sold by its owner. For a court to exercise jurisdiction over a vessel, the vessel or its substitute, such as a posted bond, must be physically present in the jurisdiction and seized by court process and under its control. Moses v. M.V. Sea Chase, 10 FSM R. 45, 51 (Chk. 2001). The court originally obtained jurisdiction over the Kuo Rong 113 when it was arrested. A $185,000 cash bond was later substituted for it. That bond was used to pay the $175,000 civil penalty first imposed by the trial court (with the balance refunded) so neither the Kuo Rong 113 nor its substitute now remain under the court's control or jurisdiction. The in personam defendants remain under the court's jurisdiction. Since the court has lost jurisdiction over the Kuo Rong 113, it is no longer a party. The court has therefore deleted it from the case caption.

² Subsection (5) , the specific transponder penalty provision, has since been repealed by omission, but was in effect in April 2013. See Kuo Rong 113 v. FSM, 22 FSM R. 515, 527-28 (App. 2020) for discussion of the repeal by omission and the appellate division's decision not to rule on the repeal's effect because the issue of Subsection (5)'s repeal had never been raised in the trial division. This issue was not raised on remand.