Plaintiff,

Education, in their official capacities,

Defendants.

CIVIL ACTION NO. 126-04

For the Plaintiff:   Canney L. Palsis, Esq.

                                 Micronesian Legal Services Corporation

                                 P.O. Box 38

                                 Tofol, Kosrae   FM   96944

For the Defendants:   Arthur Buck, Esq.

                                         Acting Attorney General

                                         Office of the Kosrae Attorney General

                                         P.O. Box 870

                                         Tofol, Kosrae   FM   96944

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HEADNOTES

     The standard for granting summary judgment is that the judgment sought must be granted if the pleadings, discovery responses under oath, and affidavits show that there is no genuine issue to any material fact and that the moving party is entitled to a judgment as a matter of law. In considering a summary judgment motion, the court must view the facts and inferences in a light that is most favorable to the party opposing the motion. The burden of showing a lack of triable issues of fact belongs to the moving party. Allen v. Kosrae, 13 FSM Intrm. 325, 327-28 (Kos. S. Ct. Tr. 2005).

     Argument alone cannot create a disputed fact. The nonmoving party has the burden to show by competent evidence that there is a triable issue of fact. Allen v. Kosrae, 13 FSM Intrm. 325, 329 (Kos. S. Ct. Tr. 2005).

     The Kosrae State Public Service System establishes a state-wide public service system applicable to all branches of government and is governed by Kosrae State Code, Title 18. The PSS applies to all Kosrae state employees and positions except for those employees and positions which are specifically exempted. Specific exemptions include "contract employees." Allen v. Kosrae, 13 FSM Intrm. 325, 329-30 (Kos. S. Ct. Tr. 2005).

     There are no limitations on the "contract employees" exemption: all contract employees are exempt from application of the Public Service System under Kosrae State Code, Title 18. There are no limitations imposed through any other state law upon the hiring of state government employees pursuant to ungraded, PSS exempt contracts. The State is permitted to hire ungraded, PSS exempt employees by contract, in its discretion, subject only to funding and budgetary limitations. Allen v. Kosrae, 13 FSM Intrm. 325, 331 (Kos. S. Ct. Tr. 2005).

     There are no provisions in state law which prohibit the state government from hiring employees by contract for positions which are also classified under the Public Service System classification plan. Allen v. Kosrae, 13 FSM Intrm. 325, 331 (Kos. S. Ct. Tr. 2005).

     Kosrae State Code, § 18.104, which provides a preference to FSM citizens and Kosrae state residents in making appointments to positions within the PSS is not applicable to the contract position of Chief of Secondary Education. Allen v. Kosrae, 13 FSM Intrm. 325, 331 (Kos. S. Ct. Tr. 2005).

     Kosrae State Code, section 18.302, which provides that the position classification plan must classify all positions subject to the provisions of the State Public Service System according to their duties and responsibilities, is not applicable to the contract position of Chief of Secondary Education since that position was not one classified within the PSS at the time of the contract hiring. Allen v. Kosrae, 13 FSM Intrm. 325, 331 (Kos. S. Ct. Tr. 2005).

     Regardless of the reason for a Public Service System position vacancy or the length of time for the position vacancy, there is no statutory or constitutional requirement for the State to fill any vacancies of Public Service System positions. Allen v. Kosrae, 13 FSM Intrm. 325, 332 (Kos. S. Ct. Tr. 2005).

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     Defendants filed a Motion for Summary Judgment on April 28, 2005. Plaintiff filed an Opposition on May 13, 2005, and Defendants filed a Reply Brief on May 17, 2005. A hearing on the Motion was held on May 24, 2005. After hearing from the parties, consideration of the record and application of the law, I granted the Defendants’ Motion for Summary Judgment.

     The Defendants’ Motion for Summary Judgment seeks judgment on both causes of action stated in the Complaint: illegal contract in violation of Kosrae State Code, Section 18.302 and statutory violation of Kosrae State Code, Section 18.104.

     The standard for the granting of summary judgment is established by the KRCP, Rule 56(c) as follows:

Rule 56(c) SUMMARY JUDGMENT

      Summary judgment must be granted if the pleading, discovery responses under oath, and affidavits show that there is no genuine issue to any material fact and that the moving party is entitled to a judgment as a matter of law. In considering a summary judgment motion, this Court must view the facts and inferences in a light that is most favorable to the party opposing the motion. Sigrah v.

Kosrae State Land Comm’n, 11 FSM Intrm. 169 (Kos. S. Ct. Tr. 2002).

     The burden of showing a lack of triable issues of fact belongs to the moving party. Kihara Real Estate, Inc. v. Estate of Nanpei (I), 6 FSM Intrm. 48 (Pon. 1993). Based upon the submissions of the parties and the competent evidence present in the record of this matter, I find the following undisputed facts.

     The Public Service System position of principal for Kosrae High School ("KHS") was rendered vacant by the retirement of Tulensa Sigrah during the summer of 2004. The position of KHS principal was advertised as a Public Service System position through examination number 2004-010, beginning on June 3, 2004. After the vacancy announcement was closed, the list of certified applicants was completed on July 29, 2004. Both Plaintiff and Defendant Paul Hadik ("Hadik") were listed as certified applicants for the KHS principal position. Hadik was the first choice for the KHS principal position of every member of the hiring committee. The KHS principal position was never filled through the PSS appointment process and remains vacant today.

     Defendant Hadik is a contract employee of Kosrae State Government, Department of Education. Hadik was hired as Chief of Secondary Education on a Special Personnel Services Contract by Defendant Kosrae State on August 19, 2004. The position of "Chief of Secondary Education" was a newly created position. The term of Hadik’s Contract is August 16, 2004 through September 30, 2007. Hadik is not a permanent employee. Hadik’s duties as Chief of Secondary Education includes duties as principal of Kosrae High School, as well as other curriculum and administrative duties. Hadik’s contract states that he is exempt from the Public Service System, Kosrae State Code, Title 18 and its implementing regulations. Hadik is a citizen of the United States and has resided in the State of Kosrae for approximately eleven years.

     At the time of Hadik’s hire as Chief of Secondary Education, Hadik was already employed by the Department of Education as an educational consultant, under a different PSS exempt, ungraded contract. When Hadik was hired as Chief of Secondary Education, his work week hours were increased from 32 to 40 hours, and the duties of supervising and managing KHS were added without any additional compensation.

     The State of Kosrae, Department of Education, has hired many teachers on ungraded, PSS exempt contracts. Some of the contract teachers are new hires. The remaining contract teachers have converted from PSS status to ungraded, PSS exempt contract status. The conversion of PSS teachers to ungraded, PSS exempt contract positions is completed with the approval of the Governor. The PSS and PSS exempt teachers all work together. The major differences between PSS and PSS exempt contract teachers are their leave and salary provisions.

     Based upon the Kosrae State Government Proposed Budget for Fiscal Year 2005, of which I take judicial notice, all three branches of the State of Kosrae, as well as agencies, have hired employees on an ungraded, PSS exempt, contract basis. These contract positions include secretaries, special assistants, teachers, physicians, medical officers, nurses, economists, laborers and attorneys.

     Before 1992, the position of Chief of Elementary and Secondary Education existed in the Executive Service Position Classification Plan. In approximately 1992, the position of Chief of Elementary and Secondary Education was eliminated, and the duties of the position were transferred to the position of Administrator of the Division of Instruction. At the time of hiring Hadik, there was no PSS classified position entitled Chief of Secondary Education.

      The Plaintiff, in his argument, disputes whether Hadik is actually serving as KHS Principal or as Chief of Secondary Education. However, Plaintiff did not submit any affidavits or other admissible evidence to support this alleged factual dispute. Argument alone cannot create a disputed fact. Nahnken of Nett v. United States, 7 FSM Intrm. 581, 586 (App. 1996). The nonmoving party, here the Plaintiff, has the burden to show by competent evidence that there is a triable issue of fact. FSM Dev. Bank v. Bruton, 7 FSM Intrm. 246 (Chk. 1995). Plaintiff’s argument has failed to create an issue of fact, as Plaintiff failed to present competent evidence thereof.

     Defendants move for summary judgment on both causes of action stated in the Complaint: Kosrae State Code, Sections 18.104 and 18.302. Defendants make three arguments in their Motion. First, that Hadik’s hiring and contract was made on an ungraded, PSS exempt basis, and therefore the requirements of Kosrae State Code, Title 18, the PSS Act, do not apply. Second, Defendants argue in the alternative, that if the PSS Act does apply, then the preference provision, Kosrae State Code, Section 18.104, applies equally to FSM citizens and residents alike, and that Hadik, an eleven year resident, is entitled to equal preference for hiring as FSM citizens. Defendants further argue that the merit principles stated in Kosrae State Code, Section 18.103 prohibit discrimination based upon race and national origin. Defendants argue that if Kosrae State Code, Section 18.104 does require preference to be given to persons who are both FSM citizens and Kosrae residents, then the statute violates the equal protection guaranteed under both the FSM and Kosrae State Constitutions. Finally, Defendants argue that under the newly amended Compact of Free Association between the United States and the FSM, United States citizens are entitled to freely work in the FSM, including PSS employment for the State Government.

     Plaintiff opposes the Defendants’ Motion on several grounds. Plaintiff argues that some of Hadik’s duties are already assigned to the PSS position of Chief of Elementary and Secondary Education. The position of Chief of Elementary and Secondary Education is not filled, instead some of its duties are performed by the Administrator for Instruction. Plaintiff argues that the PSS position of Chief of Elementary and Secondary Education was dissected and the duties relating to secondary education assigned to Defendant Hadik. Plaintiff argues that the position of Chief of Secondary Education must be classified under the PSS system and all hiring be conducted in accordance with the PSS requirements. Plaintiff argues that the State may not hire employees by contract for any positions which are classified under the State PSS position classification plan. Plaintiff further argues that under Kosrae State Code, Section 18.104, the hiring preference must be given to persons who are both FSM citizens and Kosrae residents, and that Hadik as a United States citizen, does not satisfy that requirement. Finally, Plaintiff argues that the amended Compact of Free Association, and it employment related provisions are discretionary, and that Kosrae state law takes precedence over Compact of Free Association provisions.

     Defendants, in their reply, argue that the position classification plan relied upon by the Plaintiff is of 1970s vintage, and that the position of Chief of Elementary and Secondary Education has not been in use since about 1992. Defendants note that the Plaintiff does not challenge any of the Defendant’s statement of uncontested facts, and in conclusion, Defendants argue that Plaintiff has failed to provide any evidence to dispute any material facts, and any authority to support their legal position and interpretation of the provisions of Kosrae State Code, Title 18.

A.  Application of the Kosrae State Public Service System to Hadik.

      The Kosrae State Public Service System ("PSS") establishes a state-wide public service system applicable to all branches of government and is governed by Kosrae State Code, Title 18. The PSS

applies to all employees and positions of Kosrae State, except for those employees and positions which are specifically exempted. Kosrae State Code, Section 18.107, provides the application and specific exemptions from the PSS as follows:

     Kosrae State Code, Section 18.107(9) specifically exempts "contract employees" from the application of the State Public Service System Act, codified at Kosrae State Code, Title 18. The "contract employee" exemption from the PSS was expanded and amended by State Law No. 7-184, in October 2001, and gives the State Government wide discretion in hiring employees on an ungraded, PSS exempt contract basis.

     The employment of individuals through contract by the FSM National and State Governments have long been recognized by the courts. The positions of Chief Litigator and Chief of Finance have filled through contract. See Rauzi v. FSM, 2 FSM Intrm. 8 (Pon. 1985); Heston v. FSM, 2 FSM Intrm. 61 (Pon. 1985). The FSM National, Chuuk and Yap Public Service Systems all contain exemptions for contract employees. See 52 F.S.M.C. 117(11); Truk S.L. No. 3-43, § 8(1)(g); 8 Yap S.C. §§ 141(11) to 141(14). The Yap Public Service System provides further specific exemptions for positions occupied by teachers, nurses, and police officers. 8 Yap S.C. § 141(13). State Government employment in Kosrae by contract has been recognized by this Court for many years. See Cornelius v. Kosrae, 8 FSM Intrm. 345 (Kos. S. Ct. Tr. 1998); Edwin v. Kosrae, 4 FSM Intrm. 292 (Kos. S. Ct. Tr. 1990). This Court has specifically recognized a "group of employees who do not have the specified rights given permanent employees, who serve for a contract term, and whose compensation is determined by those contracts." Cornelius 8 FSM Intrm. at 352.

     In recognition of the substantial employment of ungraded, PSS exempt employees by contract, I take judicial notice of the Kosrae State Government Proposed Budgets for Fiscal Year 2005 and 2006.

Within these Proposed Budget, there are many specified positions which are ungraded, PSS exempt, contract positions. Excluding those positions which are elected and appointed pursuant to State constitutional provisions, and excluding those positions which are specifically exempted by name in Kosrae State Code, Section 18.107, the State has contract employees in virtually every branch, every department and agency, as indicated by the Proposed Budgets. There are more than one hundred positions within Kosrae State Government employment filled by ungraded, PSS-exempt, contract employees in fiscal year 2005, and likewise, more than one hundred ungraded, PSS-exempt contract positions are proposed for Fiscal Year 2006.

     Kosrae State Code, Section 18.107(9) exempts "contract employees" from application of the PSS System. There are no limitations on the exemption: all contract employees are exempt from application of the PSS under Kosrae State Code, Title 18. There are no limitations imposed through any other State Law upon the hiring of State Government employees pursuant to ungraded, PSS exempt contracts. Therefore, the State of Kosrae is permitted to hire ungraded, PSS exempt employees by contract, in their discretion, subject only to funding and budgetary limitations. Furthermore, there are no provisions in State Law which prohibit the State Government from hiring employees by contract for positions which are also classified under the PSS classification plan. Here, the undisputed facts show that the position of Chief of Secondary Education was not a PSS classified position in August 2004, at the time Hadik was hired by contract.

     Based upon the undisputed facts and applicable law, I conclude that the hiring of Hadik by contract to serve as the Chief of Secondary Education was not prohibited by the PSS, and consequently did not violate the Kosrae State Code, Title 18 or any other state law. Hadik’s position of Chief of Secondary Education and his employment contract with the State of Kosrae are exempt from the provisions of the PSS and Kosrae State Code, Title 18. Therefore, based upon Kosrae State Code, Title 18, Section 18.107(9), the State’s hiring of Paul Hadik as a contract employee was authorized and not prohibited by law. The PSS, Kosrae State Code, Section 18.107(9) gives the State broad discretion in hiring of contract employees that are exempt from Title 18. The State utilized this statutory discretion to hire Paul Hadik under contract as the Chief of Secondary Education.

     Kosrae State Code, Section 18.104, which provides a preference to FSM citizens and Kosrae State residents in making appointments to positions within the PSS is not applicable to the Hadik’s contract position of Chief of Secondary Education. Plaintiff has failed to state cause of action based upon Kosrae State Code, Section 18.104. Defendant is entitled to summary judgment on the Defendant’s first cause of action.

     Kosrae State Code, Section 18.302, provides that the position classification plan shall classify all positions subject to the provisions of the State Public Service System according to their duties and responsibilities. Kosrae State Code, Section 18.302 is not applicable to the contract position of Chief of Secondary Education. The position of Chief of Secondary Education was not a position classified within the PSS at the time of Hadik’s hiring by contract and is not subject to Kosrae State Code, Section 18.302.

     The Plaintiff has not provided any authority, and this Court has not found any statutory or constitutional requirement to fill each vacant PSS position. None of the provisions in Kosrae State Code, Title 18 requires the State to fill each vacant PSS position, even after advertisement. There may be many reasons why a PSS position is not filled following the vacancy. Regardless of the reason for a PSS position vacancy or the length of time for the PSS position vacancy, there is no statutory or constitutional requirement for the State to fill any vacancies of PSS positions. Therefore, I conclude that the State did not have any statutory duty to fill the vacant PSS position of principal for Kosrae High School. Accordingly, both of Plaintiff’s causes of actions as stated in the Complaint must fail as a matter of law.

     As the Court grants summary judgment on Defendants’ first argument, the remaining arguments made by both Plaintiff and Defendants are not reached.

     I have considered the facts and arguments in the best light available to the Plaintiff. Based upon the submissions of the parties and the competent evidence in the record of this matter, I conclude that the Plaintiff has failed to produce any competent evidence of any genuine issues of material fact. The Defendants have met their burden to show that there are no genuine issues of material facts remaining for trial.

     Plaintiff has also failed to provide legal authority to support his position that the hiring of Hadik as an ungraded, PSS exempt, contract employee, in the position of Chief of Secondary Education, was contrary to law. Plaintiff has failed to provide legal authority to support his argument that all vacant PSS positions, including the PSS position of KHS Principal, are required to be filled by the State.

     The Defendants, as moving parties, have shown that there are no genuine issues of material fact and that they are entitled to judgment as a matter of law. Defendant’s Motion for Summary Judgment is granted, on both causes of action listed in the Complaint: violation of Kosrae State Code, Sections 18.104 and 18.302. The Complaint is dismissed with prejudice.

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