cite as Kosrae Federation vs. Tilfas, Kosrae St.(1989)
[Kos.Ct pge 01]




Civil Action No. 34-87


     On February 23, 1989, a hearing was held in response to defendants' motion to-Dismiss for Lack of Jurisdiction. Plaintiff was represented by its counsel, Sidney Skilling. Defendant was represented by his 'counsel, Canney Palsis.

     Defendant alleges in a Memorandum filed 10/14/88 that the plaintiff is a business owned by citizens of Pohnpei State with its home office in Pohnpei State. PFCA is also doing business ire the State of Kosrae. Defendant Penno Tilfas, at all relevant time a resident and citizen of the State of Kosrae."

     Defendant argues that pursuant to Article XI, Section 6(b) of the FSM Constitution and Bank of Guam v. Semes, 3 FSM Intrm. 370 (Pon. 1988), there is a diversity of citizenship between plaintiff and defendant and therefore, the FSM Supreme Court has exclusive jurisdiction over this case.

     Article XI, Section 6(b) of the FSM Constitution provides:

[Kos.Ct pge 02]

"The national courts, including the trial division of the Supreme Court, have concurrent original jurisdiction in cases arising ...in disputes ...between citizens of different states ...."

     At page 377 of the Bank of Guam case, supra, the Court construes Section 6(b) and states:

"Section 6(b) says only that national courts shall have concurrent jurisdiction. Nothing is said about state courts. Had the framers intended the concurrent jurisdiction of national courts to be exclusive of state court jurisdiction for such cases, presumably they would have said so, as they did in article XI, section 6(a), which vests in this Court exclusive jurisdiction over the cases mentioned there. Deletion of state and local courts from section 6(b) reveals that national courts are to play the primary role in handling the kinds of cases identified in that section. Yet, nothing in the amendment and nothing now in article XI, section 6(b) of the Constitution may be read as absolutely preventing state courts from exercising jurisdiction over those kinds of cases." "Emphasis added"

     Also at page 377 of the Bank of Guam case, the Court further noted:

"The presumption is that a state court has jurisdiction to act on any case which arises within that state. Given this understanding the fact that the national Constitution does not place jurisdiction in the state courts is not enough to warrant a conclusion that state courts are without jurisdiction to act in such a case. The proper question is not whether the national Constitution authorizes, but whether it bars state court jurisdiction." "Emphasis added"

[Kos.Ct pge 03]

In Section 6 of Article VI of the Kosrae Constitution, it provides that:

"The State Court has original jurisdiction in all cases, except cases within the exclusive and original jurisdiction of inferior courts."

     Since the Kosraean language is very broad with respect to the original jurisdiction of the State Court and since the Bank of Guam case clearly states that Article XI, Section 6(b) does not prevent state courts from exercising jurisdiction over diversity of citizenship cases like the one currently before this Court, this Court concludes that it has jurisdiction over this case and therefore, the defendants motion to dismiss for lack of jurisdiction should be denied.

     The Court would like to further note for the record that it has not been presented with a petition seeking to remove this case to the FSM Supreme Court.


     ORDERED that the defendant's motion to Dismiss for Lack of Jurisdiction is denied.

     SO ORDERED this 23rd day of February, 1989.

                                        Harry H. Skilling
                                        Chief Justice

[Kos.Ct pge 04]

     Entered this 27th day of February, 1989.

                                        Richard Sigrah
                                        Chief of Clerk, Kosrae