THE SUPREME COURT OF THE
FEDERATED STATES OF MICRONESIA
Cite as Ponape Transfer and Storage v. Federated Shipping Co.,
4 FSM Intrm. 37 (Pohnpei 1989)
PONAPE TRANSFER AND STORAGE, INC.
FEDERATED SHIPPING CO., LTD;
STATE OF POHNPEI DIVISION OF MANAGEMENT
AND ADMINISTRATION OF PUBLIC LANDS
FSM CIV. NO. 1989-002
Before Edward C.
Inc.) Pohnpei, FSM 96941
For the Defendant: R. Barrie Michelsen
(Federated Shipping Attorney-at-Law
Co., Ltd.) P.O. Box 1480
Pohnpei, FSM 96941
For the Defendant: Randy Boyer
(State of Pohnpei State Attorney
Division of Pohnpei, FSM 96941
For Intervenor: Maketo Robert
(Martin Enterprises) Attorney-at-Law
Pohnpei, FSM 96941
* * * *
A cautious, reasoned use of the doctrine of abstention is not a violation of the FSM Supreme Court's duty to exercise diversity jurisdiction, or of the litigants' constitutional rights, under article XI, section 6(b) of the FSM Constitution. Ponape Transfer & Storage v. Federated Shipping Co., 4 FSM Intrm. 37, 39 (Pon. 1989).
Federalism - Abstention and Certification;
The FSM Supreme Court may and should abstain in a case where land use rights are at issue, where the state is attempting to develop a coherent policy concerning the disposition of public lands, where there is a similar litigation already pending in state court, where the state requests abstentions defendant in an action which may expose it to monetary damages, where Congress has not asserted any national interests which may be affected by the outcome of the litigation, and where abstention will not result in delay or injustice to the parties. Ponape Transfer & Storage v. Federated Shipping Co., 4 FSM Intrm. 37, 39 (Pon. 1989).
Constitutional Law - Interpretation;
Because the jurisdiction provisions of the FSM Constitution are substantially similar to those of the United States but the words themselves provide no definite interpretation and no party has pointed either to constitutional history or to other matters, such as custom or tradition, calling for a particular interpretation or for departure from the accepted meaning in the United States, it is appropriate to look to United States precedents for possible guidance in determining what the framers intended in adopting the provisions that now appear in the Constitution. Ponape Transfer & Storage v. Federated Shipping Co., 4 FSM Intrm. 37, 41 (Pon. 1989).
Federalism - Abstention and Certification;
Jurisdiction - Diversity
While the FSM Constitution provides initial access to the FSM Supreme Court for any party in article XI, section 6(b) litigation, the Court may, having familiarized itself with the issues, invoke the doctrine of abstention and permit the case to proceed in a state court, since the power to grant abstention is inherent in the jurisdiction of the FSM Supreme Court, and nothing in the FSM Constitution precludes the Court from abstaining in cases which fall within its jurisdiction under article XI, section 6(b). Ponape Transfer & Storage v. Federated Shipping Co., 4 FSM Intrm. 37, 42-43 (Pon. 1989).
Federalism - Abstention and Certification;
Property - Public Lands
Abstention by national courts is desirable in a case affecting state efforts to establish a coherent policy concerning how private persons may obtain rights to use land currently held by the state government. Ponape
Transfer & Storage v. Federated Shipping Co., 4 FSM Intrm. 37, 44 (Pon. 1989).
Federalism - Abstention and
In a case brought before the FSM Supreme Court where similar litigation involving the same parties and issues is already pending before a state court, and a decision by the state court in the litigation would resolve all controversies among the parties, the risk of costly, duplicative litigation is one factor to be considered by the national court in determining whether to abstain. Ponape Transfer & Storage v. Federated Shipping Co., 4 FSM Intrm. 37, 44 (Pon. 1989).
Federalism - Abstention and Certification;
Foreign and Interstate Commerce
Although foreign and interstate commerce and shipping involve profound national interests, where Congress has not seen fit to assert those interests and there is no national regulation or law to enforce, the fact that a case affects interstate and foreign commerce and shipping is not sufficient to deny abstention if other strong grounds for abstention exist. Ponape Transfer & Storage v. Federated Shipping Co., 4 FSM Intrm. 37, 47 (Pon. 1989).
* * * *
EDWARD C. KING, Chief
The abstention motion filed by the State of Pohnpei Division of Management and Administration of Public Lands (DMAPL) requires a determination as to whether the Court may ever abstain from exercising jurisdiction, in order to permit state courts to resolve issues, in a case in which one of the parties in the litigation invokes this Court's jurisdiction under article XI, section 6(b) of the Constitution of the Federated States of Micronesia.
The Court concludes that cautious, reasoned use of the doctrine of abstention is not a violation of this Court's duty, or of litigants' constitutional rights, under article XI, section 6(b) of the Constitution. The Court further holds that it may and should abstain in this case, because: (1) land use rights are at issue; (2) the particular decision under challenge is part of a state attempt to develop a coherent policy concerning disposition for private use of lands held by the state government; (3) there is already pending in a state court similar litigation involving essentially the same parties, and issues, and action is needed to avoid duplicative litigation; (4) the State, as defendant in an action which may expose it to monetary damages, requests abstention; (5) Congress has taken no action to assert the only apparent national interests, foreign and interstate commerce, and shipping, which may be affected by the outcome of this litigation; and (6) there are no indications that abstention will result in delay or injustice to the parties.
This is the latest
chapter in the long struggle waged between Pohnpei
Transfer and Storage, Inc. (PT&S) and Federated Shipping Co., Ltd. (FSCO) over rights to conduct stevedore and terminal operations at the Taketik Island port terminal area in Pohnpei. 1
During June, 1987, the Pohnpei Public Lands Authority (PPLA) declared the prior lease terminated and initiated steps looking toward issuance of a new lease. 2 Among others, PT&S, FSCO, and Martin Enterprises applied. DMAPL announced on December 2, 1988, that the terminal operators' contract and lease were awarded to FSCO. PT&S filed this lawsuit on January 23, 1989, to challenge that award.
Under consideration in this opinion is the motion of DMAPL, supported by FSCO, asking this Court to abstain from deciding the case so that the Pohnpei State Supreme Court may resolve these issues. PT&S, with the support of Martin Enterprises, contends that this Court should retain jurisdiction and decide the case.
II. LEGAL ANALYSIS
This Court has
held that parties in a case such as this, where there is diversity of
citizenship among the litigants, have a constitutional right to invoke national
jurisdiction and may not be barred from access to a national court.
PT&S argues that these principles, enunciated in Bank of Guam v.
Semes, 3 FSM Intrm. 370 (Pon. 1988), preclude any possibility of national
court abstention in favor of state court decision making in cases arising
under article XI, section 6(b) of the Constitution, unless all parties
PT&S has filed this lawsuit in this Court and there is diversity of citizenship among the parties. Jurisdiction therefore exists under article XI, section 6(b), and this Court has a "solemn obligation" to uphold the constitutional rights of PT&S to invoke that jurisdiction. U Corp. v. Salik, 3 FSM Intrm. 389, 392 (Pon. 1988). The question now presented for the first time is whether use by this Court of the doctrine of abstention is violative of the constitutional rights of a party seeking this Court's exercise of jurisdiction under article XI, section 6(b).
This Court has
noted on numerous occasions that the jurisdictional provisions of the FSM
Constitution contain language quite similar to comparable provisions in the
United States Constitution. Federated Shipping
Co. v. Ponape Transfer & Storage, 3 FSM Intrm. 256, 258 (Pon. 1987). That similarity has not led to the conclusion that we must follow unfailingly the rulings of United States courts in determining the extent of our own jurisdiction. We have departed from United States decisions without hesitation where there has appeared a sound reason for doing so.
For example, the Court has recognized that the Constitution directly vests this Court with jurisdiction while the trial jurisdiction of United States federal district courts is determined by statute. FSM Dev. Bank v. Estate of Nanpei, 2 FSM Intrm. 217, 219 n.1 (Pon. 1986). Thus, in determining the scope of diversity jurisdiction, the focus has been on constitutional language rather than upon the statutory interpretations which have prevailed in the United States. This has led to rejection of the United States statutory rule that there must be complete diversity among the parties before national court diversity jurisdiction may be invoked. In re Nahnsen, 1 FSM Intrm. 97, 102 (Pon. 1982).
The Court has also recognized that the historical peculiarities which led United States courts to decline jurisdiction in probate and domestic relation cases were not present when the FSM Constitution was adopted. Therefore, this Court has accepted jurisdiction in those kinds of cases. In re Nahnsen, 1 FSM Intrm. at 102 (probate); Mongkeya v. Brackett, 2 FSM Intrm. 291 (Kos. 1986)(domestic relations). Moreover, the tests established by statute in the United States to determine the citizenship of a corporation have been rejected here in favor of the established meaning of the "foreign corporation" concept that existed within the Federated States of Micronesia when the Constitution was drafted. Federated Shipping Co. v. Ponape Transfer & Storage, 3 FSM Intrm. 256 (Pon. 1987).
Yet, the fact remains that the jurisdictional provisions in the two Constitutions are substantially similar. In re Nahnsen, 1 FSM Intrm. at 102 n. 3. In a case such as this where the words themselves provide no definite answer, and no party has pointed either to constitutional history or to other matters, such as custom or tradition, calling for a particular interpretation or for departure from the accepted meaning in the United States, it is appropriate to look to United States precedents for possible guidance in determining what the framers intended in adopting the jurisdictional provisions that now appear in the Constitution.
Of particular importance for this purpose are United States decisions rendered before July 12, 1975, when the Micronesian Constitutional Convention convened.Lonno v. Trust Territory, 1 FSM Intrm. 53, 69 (Kos. 1982). In reviewing the pre-1975 law in the United States concerning federal court jurisdiction over cases of the kind described in article XI, section 6(b) of the FSM Constitution, we find jurisdictional statutes roughly parallel to article XI, section 6(b).
Like article XI, section 6(b) of the Constitution, these United States statutes on their face seem to establish unconditional rights of parties to invoke federal court jurisdiction. For example, 28 U.S.C. § 1331, which provides jurisdiction over cases arising under national law, employs the
following unconditional language: "The district courts shall have original jurisdiction of all civil actions arising under the Constitution, laws or treaties of the United States." (Emphasis added.) Despite the apparently unequivocal nature of that consignment of jurisdiction, federal district courts sometimes employ the abstention doctrine, staying their own proceedings to permit state court decisions on designated matters. City of Meridian v. Southern Bell Telephone & Telegraph Co., 358 U.S. 819, 79 S. Ct. 455, 3 L. Ed. 2d 562 (1959). Federal court authority to abstain from deciding a federal question in order to avoid a possibly unnecessary decision on a constitutional issue has been upheld even in cases brought under 28 U.S.C. § 1343, to challenge a deprivation of civil rights. Harrison v. NAACP, 300 U.S. 168, 79 S. Ct. 1025, 3 L. Ed. 2d 1152 (1959).
The United States statute providing for federal court jurisdiction in cases where there is diversity of citizenship between the parties is also drawn in unequivocal, unconditional terms: "The district courts shall have original jurisdiction of all civil actions...between...citizens of different States...." 28 U.S.C. § 1332. Nonetheless, federal courts have often abstained to permit state courts to decide such cases. Burford v. Sun Oil Co., 319 U.S. 315, 63 S. Ct. 1098, 87 L. Ed. 1424 (1943).
The United States statutes which most closely parallel the right of removal applied in U Corp. v. Salik, 3 FSM Intrm. 389, 392 (Pon. 1988), are those establishing the right of litigants in actions initiated in state courts to remove those cases to federal courts. 28 U.S.C. § 1441 et seq. Even under that statutory scheme, specifically designed to prevent litigants from being locked-in to state courts and to assure access to federal courts, United States federal courts employ the abstention doctrine. Louisiana Power & Light Co. v. City of Thibodaux, 360 U.S. 25, 79 S. Ct. 1070, 3 L. Ed. 2d 1058 (1959). See also 28 U.S.C. § 1441(c).
Analysis proceeds, then, with recognition that in the United States federal court system, the model employed by the framers in designing the national courts here, use of the abstention doctrine is viewed as inherently within the powers of United States federal courts and is thought to be fully consistent with the statutes placing jurisdiction in those courts. This leads to a presumption that power to grant abstention is also inherent within the jurisdiction of the FSM Supreme Court.
The Court therefore concludes that while the Constitution provides
initial access to this Court for any party in article XI, section 6(b) litigation the Court may, having familiarized itself with the issues, invoke the doctrine of abstention and permit the case to proceed in a state court.
B. Abstention In This
The Court having
found no bar to the possibility of abstention here, analysis now moves to the
question of whether abstention is appropriate in this particular
1. Factors pointing to abstention - Several factors point toward the desirability of abstention in this case. First, rights to use public land within the State of Pohnpei are involved. Special knowledge and experience in land matters reside within the states rather than in the national government.
[S]tate officials generally should have greater knowledge of use, local custom and expectation concerning land....they should be better equipped than the national government to control and regulate these matters. The framers of the Constitution specifically considered this issue and felt that powers of the sort under consideration here should be state powers. In re Nahnsen, 1 FSM Intrm. at 107. See also Etpison v. Perman, 1 FSM Intrm. at 429.
Accordingly, this Court's decisions concerning the proper forum to decide a case, or a particular question, should be influenced by whether state land use rights are at issue.
[T]he Court should respect, and retains sufficient discretion to respond to, the strong state interests in land matters. Constitutional obligations to play the primary role in making determinations of national law, and to be available for diversity cases, need not preclude national courts from assuring the primacy of the states in land matters. This Court must be sensitive to the fact that the framers of the Constitution anticipated that states, including state courts, would play the primary role in setting policy and deciding legal issues concerning ownership and interests in land. Bank of Guam v. Semes, 3 FSM Intrm. at 382.
A related factor compounding the desirability of abstention in this case is the fact that the lease decision at issue is one of the first public land decisions made by a new state agency established specifically for the purpose of allocating rights to land publicly held by the state.
This Court's most recent decision in civil action No. 1986-085 noted that there had been an "ongoing and fundamental dispute between the state and PPLA over who has the right to grant leases for public land." Federated Shipping Co. v. Ponape Transfer & Storage, 4 FSM Intrm. 3, 7 (Pon. 1989). For some time now, the State of Pohnpei has been struggling to establish a coherent policy concerning how private persons may obtain rights to use land currently held by the state government.
In Micronesian Legal Services Corporation v. Ludwig, 3 FSM Intrm. 241 (Pon. S. Ct. Tr. 1987), the Pohnpei State Supreme Court outlined the efforts of the Pohnpei State Legislature to agree upon a policy concerning the authority of the PPLA to make public lands available to private persons. Now, the DMAPL has been established under new legislation directed toward this end. The granting of this lease is one of the first major acts of the new board.
Land plays a "fundamental and unique role in the lives of Micronesians" and a body such as the DMAPL, mandated to decide who will be permitted to use public land holds "an awesome power indeed." Etpison v. Perman, 1 FSM Intrm. 405, 420 (Pon. 1984). This Court should not "lightly intercede" in this effort of the state to "draw on persons within Pohnpei with special expertise, varied perspectives, and solid judgment in order to establish a just and uniform approach to public land use in Pohnpei." Id. at 429. In Etpison, the Court declined to determine which party should win the leasehold rights at issue but instead remanded the case to the PPLA for decision.
Deference by a national Court to state efforts to establish a coherent policy on a matter of such substantial public concern as land use is consistent with precedent established by United States federal courts, which, under similar circumstances, have abstained in favor of state decisionmaking. Burford v. Sun Oil Co., 319 U.S. 315, 333-34, 62 S. Ct. 1098, 1107, 87 L. Ed. 1424 (1943).
The risk here of costly, duplicative litigation also points toward abstention. At approximately the same time that PT&S initiated this case, Martin Enterprises instituted similar litigation challenging the granting of the lease in the Pohnpei State Supreme Court. The Court is advised that the same parties and the same issues are, or can be, placed before the state court in that litigation. It is also the understanding of this Court that a decision by the Pohnpei State Supreme Court in the litigation before it would resolve all controversies among the parties before this Court.
This Court has primary responsibility under the Constitution for deciding cases which arise under article XI, section 6(b), and is therefore required to exercise control in such cases unless there appear valid reasons for abstention or certification of issues. Automatic deference by this Court to state courts in article XI, section 6(b) cases would violate this mandate. Thus, duplicative litigation, by itself, is no reason for abstention by this Court. The possibility of duplicative litigation is merely one factor to be considered by this Court in determining whether to abstain.
In this instance, the existence of duplicative litigation in the Pohnpei State Supreme Court, considered together with the other extraordinary circumstances, that is, the fact that the decision at issue is part of a state policymaking effort for land use and that the state, as defendant, may be exposed to monetary damages, furnish compelling grounds for abstention.
A final factor pointed to by the state as calling for abstention is that, when this case was initiated, the plaintiff was seeking monetary damages from the state. The Court has recognized this as a ground for granting abstention. Panuelo v. Pohnpei, 2 FSM Intrm. 150, 156 (Pon. 1985).
In response to the state's motion, and to avoid the effect of the Panuelo rule, PT&S has amended its pleading by deleting its monetary damages claim against the state. The Court finds the other factors already discussed in this opinion entirely sufficient to call for abstention in this case. Therefore it is not necessary here to determine whether the amendment by PT&S of its complaint would be sufficient to prevent this case from being viewed as a lawsuit against the state for monetary damages, for purposes of this motion to abstain. It may be worth noting however that there are several reasons why this amendment would not likely obtain the result PT&S seeks. First, the motion had already been filed and argued before the amendment. It may well be appropriate for a court to consider a motion to abstain in light of the pleadings as they stood when the motion was made, without changes specifically designed to avoid the motion. This could be a proper approach since there generally is nothing to prevent the amending party from again amending the complaint to reinsert the claim for monetary damages against the state after the Court rules on the motion to abstain.
Second, the state points out that PT&S has not dropped its monetary claims against FSCO. The state says that it is quite likely that, if FSCO were held liable, FSCO in turn would seek reimbursement from the state. This possibility, raised in a case when the plaintiff originally sought monetary damages directly from the state, strongly suggests that as a practical matter this still is litigation seeking monetary damages from the state within the meaning of Panuelo.
2. Factors against abstention - In finally determining the propriety of abstention in this case, the Court must weigh the factors already noted as calling for abstention, against any obligations this Court may have to retain jurisdiction in order to prevent delay, injustice, or infringement upon national interests.
Both cases have only recently been filed and in both there are motions for preliminary injunctive relief. The motion for abstention was filed without delay, before this Court had ruled on the motion for preliminary injunction. There is also no suggestion that there generally is, or likely would be in this particular case, substantial delay in obtaining a decision from the Pohnpei State Supreme Court. No party has contended that there is any reason to believe that an injustice would occur if this case is decided in the state court. Thus, there is no reason, based upon this record, to believe
that abstention by this Court would cause either delay or injustice to any of the parties.
The principal countervailing factor here possibly weighing against abstention is the apparent national interest in overseeing foreign and interstate commerce, and shipping. 3 Indeed, in an earlier phase of litigation related to the terminal leasehold rights, this Court refused to abstain, in part because it appeared that national interests involving interstate commerce and shipping were at issue. Federated Shipping Co. v. Ponape Transfer & Storage, 3 FSM Intrm. 256, 261 (Pon. 1987). PT&S points to that decision as precedent requiring refusal to abstain now.
That earlier decision is plainly distinguishable from the facts now at hand. In the prior decision, the Court pointed to three factors which militated against abstention. Two of these factors are not present in this case.
First, the litigation in the previous case had been underway for more than a year and several rulings had been elicited from the Court. Under those circumstances, the Court thought it "very late in the day" to consider abstention. In contrast, the motion for abstention in this case was filed less than a month after the complaint was filed.
A second factor leading to denial of abstention in the earlier litigation was that FSCO's motion seemed to have been prompted by an earlier unfavorable ruling. The Court declined to permit the use of the doctrine for what it perceived to be forum shopping. Here, no rulings had been made when the motion was filed.
Thus, the only parallel between this case and the earlier Federated Shipping Co. decision is the fact that national interests of interstate and foreign commerce, and shipping, may be affected by this litigation. The Court has reviewed this aspect of the case carefully and has concluded for the following reasons that those interests do not justify abstention in this case.
There can be no doubt that activities at the Pohnpei port and terminal can have enormous impact upon the economic well-being not only of the people of Pohnpei but of people throughout the Federated States of Micronesia. Shipping of goods may be encouraged or obstructed, depending upon the competence and attitudes of those performing stevedore and other terminal operations. Since the various states of the Federated States of Micronesia are located in the same general geographical area, and since most outsiders have difficulty distinguishing among the parts of the federal system here, a
carrier who confronts arbitrariness or incompetence at a port in one state may react unfavorably to all of the Federated States of Micronesia.
In addition, as has been evident in earlier aspects of this litigation, the setting of tariff rates can be of significant importance to shippers and consumers as well as to freight carriers.
Finally, certain national functions are inseparably linked with port activities. For example, the influx and departures of large numbers of people and products at the port call for involvement of immigration and tax revenue officials.
Thus, there are profound national interests related to the port terminal operations. There also can be little question that the ability to enact legislation assuring that such operations meet prescribed standards is well within the powers of Congress. If such standards or regulations did exist this Court would be obliged to respond to that congressional recognition of national interests, and could not abstain from presiding over this litigation.
At the present time, however, Congress has not seen fit to exercise its powers or to assert national interests in the operation of ports. Thus, there is no national regulation or law to enforce in this litigation. Moreover, the fact that Congress has not moved to regulate the operation of ports is seen by this Court as a signal that the national interest in port operations is not to be deemed sufficient to overcome the strong grounds for abstention that have been identified in this opinion.
PT&S asks this Court, if it does grant the motion to abstain, to stay rather than dismiss these proceedings. In support of that request, PT&S cites two United States cases, Mahaffey v. Bechtel Associates Professional Corp., 698 F.2d 545 (D.C. Cir. 1983), and Carr v. Grace, 516 F.2d 502 (5th Cir. 1975). Both of those were tort cases where the running of the statute of limitations was an important factor to be considered. Those considerations are not present here and the Court perceives no reason why the interests of any party would be improperly affected by a dismissal without prejudice to refile the case in the event of unanticipated delay.
favor of decision making by the Pohnpei State Supreme Court is granted.
This case shall be dismissed without prejudice to any
So ordered the 7th day of March, 1989.
* * * *
The DMAPL was created as successor to the former Pohnpei Public Lands
Authority by Pohnpei State law 1L-155-87, effective July 29,
Article IX, section 2 of the Constitution provides: "The following
powers are expressly delegated to Congress: ...(g) To regulate...foreign and
interstate commerce...; (h) To regulate navigation and shipping except within
lagoons, lakes, and rivers."