THE SUPREME COURT OF THE
FEDERATED STATES OF MICRONESIA
TRIAL DIVISION - STATE OF POHNPEI
Cite as Aisek v. Foreign Investment Board,
2 FSM Intrm. 95 (Pon. 1985)
[2 FSM Intrm. 95]
KIMIUO AISEK d/b/a BLUE LAGOON DIVE SHOP
and CHINEINA GRAHAM d/b/a MICRONESIA AQUATICS,
FOREIGN INVESTMENT BOARD,
INC., and ELIAS H. THOMAS,
Before Edward C. King
October 4, 1985
For the Plaintiffs: George Butler
P.0. Box GZ
Agony, Guam 96910
For the Defendants: Jack Warndof
(Foreign Investment Assistant Attorney General
Board/Elias H. Thomas) Office of the Attorney General
Kolonia, Pohnpei 96941
For the Defendants: R. Barrie Michelsen
Seaward Holdings/ Attorney-at-Law
Micronesia, Inc.) Stovall, Spradlin, Ramp,
Armstrong & Israel
Kolonia, Pohnpei 96941
[2 FSM Intrm. 96]
Though the words used in Article XI, Section 6 of the FSM Constitution, including the case or dispute requirements, are based on the similar case and controversy provisions set out in Article III of the United States Constitution, courts within the F.S.M. are not to consider themselves bound by the details and minute points of decisions of United States courts attempting to ferret out the precise meaning of Article III. Aisek v. Foreign Inv. Bd., 2 FSM Intrm. 95, 98 (Pon. 1985).
Many provisions of this Constitution are derived from the United States Constitution and the framers intended that interpretation of the words adopted would be influenced by United States decisions in existence when this Constitution was adopted in October 1975 and ratified on July 12, 1978. Yet the framers also surely intended that courts here would not place undue importance on decisions of United States courts but would employ the words and concepts used in the United States Constitution to develop a jurisprudence appropriate and applicable to the circumstances of the Federated States of Micronesia. Article XI, Section 11 of the Constitution. Aisek v. Foreign Inv. Bd., 2 FSM Intrm. 95, 98 (Pon. 1985).
Constitutional Law-case or dispute
Standing to sue was an unsettled area of United States law when the FSM Constitution was ratified and the issue of standing to sue within the FSM is one that calls for independent analysis rather than rigid adherence to the decisions of United States courts construing that Constitution.Aisek v. Foreign Inv. Bd., 2 FSM Intrm. 95, 98-99 (Pon. 1985).
Constitutional Law-case or dispute
In deciding who may litigate in the FSM Supreme Court, the goal is to develop principles consistent with the language of the Constitution and calculated to meet the needs of the people and institutions within the Federated States of Micronesia. Aisek v. Foreign Inv. Bd., 2 FSM Intrm. 95, 99 (Pon. 1985).
Constitutional Law-case or dispute
Where dive shop operators allege actual or threatened economic injury as a result of increased competition flowing from business activities of a pleasure cruise ship providing diving opportunities in the same geographical area where the plaintiffs operate, and where they have placed before the court information sufficient to establish the reasonableness of their fear of economic injury, their law suit challenging the legality of the issuance of a foreign investment permit to a cruise ship may not be dismissed for lack of standing. Aisek v. Foreign Inv. Bd., 2 FSM Intrm. 95, 100 (Pon. 1985).
Constitutional Law-case or dispute
Where plaintiffs seek to challenge issuance to a third party of a permit
[2 FSM Intrm. 97]
which plaintiffs reasonably allege will cause them harm, and where they allege that the actions of a national senator were crucial to issuance of the permit, those plaintiffs have standing to be heard on the question of whether the senator's membership on the board is violative of the "incompatibility clause." Article IX, Section 13 of the FSM Constitution. Aisek v. Foreign Inv. Bd., 2 FSM Intrm.
95, 101 (Pon. 1985).
Constitutional law-case or dispute
There is in the F.S.M. no separate requirement for that there be a "nexus," that is, a logical connection between persons threatened by injury from the actions of an administrative agency and the statutory provisions under which the agency is operating. Aisek v. Foreign Inv. Bd., 2 FSM Intrm. 95, 102 (Pon. 1985).
* * * *
EDWARD C. KING, Chief Justice,
Defendants' motions to dismiss for lack of standing present the question of whether business people who reasonably believe they will be exposed to increased competition by the business activities of one granted a foreign-investment permit may be heard to challenge the legality of the administrative decision granting the permit. I conclude that courts should be open to the claims of such persons.
Plaintiffs are two dive shops located in Moen, Truk, and their owners. They here seek to challenge the actions of the FSM Foreign Investment Board in granting a foreign investment permit to Seaward Holdings/Micronesia, Inc., an FSM corporation partially owned by individuals who are not FSM citizens. Pursuant to the permit, issued in January, 1985, Seaward conducts pleasure cruises on the ship, "S.S. Thorfinn," emphasizing diving opportunities in the waters surrounding Pohnpei and Truk. Plaintiffs seek a declaration that the foreign-investment permit issued to Seaward by the FSM Foreign Investment Board was issued contrary to law and is therefore of no effect. In support of this argument they contend, among other things, that the presence of FSM Senator Elias H. Thomas on the Board violates the constitutional prohibition against a member of Congress holding "another public office or employment," FSM Const. art. IX, § 13, and renders the actions of the Board invalid.
All defendants have filed motions to dismiss asserting that plaintiffs lack standing to sue and that the complaint fails to state a cause of action upon which relief can be granted.
The motions were originally filed in response to plaintiffs' first
[2 FSM Intrm. 98]
amended complaint filed on February 12, 1985. In their motions, defendants insisted that plaintiffs were seeking to sue merely on the basis that they are citizens and taxpayers of the Federated States of Micronesia and that the complaint should be dismissed because plaintiffs lacked the kind of particularized interest in the subject matter of the lawsuit necessary to enable them to invoke the jurisdiction of this Court.
At a hearing held on June 14 plaintiffs were granted two weeks to file a second amended complaint. All parties were allotted an additional ten days thereafter to file any further briefs concerning the motions to dismiss. Plaintiff's second amended complaint has now been filed, followed by briefs of defendants reasserting their position that, even with the second amended complaint, there is no showing that plaintiffs have standing to sue.
Perhaps something should be said at the outset about analysis to be used in approaching claims of lack of standing. There can be no doubt that the words used in Article XI, Section 6 of the Constitution, including the case or dispute requirement, are based on the similar case and controversy provisions set out in Article III of the United States Constitution. In re Estate of Nahnsen, 1 FSM Intrm. 97, 102 (Pon. 1982). But that does not mean that we are required, or even permitted, to consider ourselves bound by the details and minute points of decisions of United States courts attempting to ferret out the precise meaning of Article III.
A constitution is primarily a statement of basic principles and values, intended to permit sufficient flexibility to the government established and the people protected and governed by it, to respond to their own unique and changing circumstances. Many provisions of this Constitution are derived from the United States Constitution and the framers surely intended that interpretation of the words adopted would be influenced by United States decisions in existence when this Constitution was adopted, in October 1975, and ratified on July 12, 1978. Yet it was just as surely recognized and intended that this Court would not place undue importance on decisions of United States courts but would employ the words and concepts used in this Constitution to develop a jurisprudence to serve the people of the Federated States of Micronesia. The Judicial Guidance Provision, Article XI, Section 11 of the Constitution, makes this mandate clear. Alaphonso v. FSM, 1 FSM Intrm. 209, 213 (App. 1982).
The United States courts were not hesitant to adopt precisely this kind of independent approach in determining their . case or controversy" jurisdiction under Article III of that Constitution. One leading commentator has observed that the restriction of United States federal court jurisdiction to cases and controversies was presumably intended by the framers of the United States Constitution to mean that "the business of than courts should be the kind of judicial business with which they were familiar in the English courts." C. Wright, Law of Federal Courts 56 (4th ed. 1983). Yet, the same author notes, "the oldest and most consistent thread in the federal law of
[2 FSM Intrm. 99]
justiciability is that the federal courts will not give advisory opinions, though at least by 1770 the power of the English judges to give advisory opinions was well recognized." Id. at 57.
In United States legal lexicon, defendants in this case are saying that plaintiffs do not have "standing to sue." This kind of issue is one especially calling for independent analysis rather than rigid adherence to the decisions of United States courts construing the Constitution upon which this one is based. This is so because standing to sue was a particularly unsettled area of United States law when the FSM Constitution was drafted and ratified.
The law of standing has experienced rapid and repeated change in the years since 1968. The Court has vacillated on whether it is desirable to relax the requirement of standing, although in general the recent cases have been more restrictive than those earlier in that period. About all that is certain on the subject is that the last word has not yet been written. In a 1982 decision, Valley Forge Christian College v. Americans United for Separation of Church and State, Inc., almost the only noncontroversial statement the Court made was: "We need not mince words when we say that the concept of `Art. III standing' has not been defined with complete consistency in all of the various cases decided by this Court which have discussed it, nor when we say that this very fact is probable proof that the concept cannot be reduced to a one-sentence or one-paragraph definition."
C. Wright, supra, at 60.
For these reasons, it appears best to proceed on a case by case basis in deciding who may litigate in this Court. The emphasis should be on our own legal authorities. The goal is to develop principles consistent with the language of the Constitution and calculated to meet the needs of people and institutions within the Federated States of Micronesia.
A. Adversaries - In essence the defendants are urging that the Court does not have jurisdiction over this matter because plaintiffs do not present a "case" or "dispute" as required by Article XI, Section 6 of the Constitution of the Federated States of Micronesia. This limitation of the Court's jurisdiction is designed to enhance the workings of the judicial system itself and to maintain the proper relationships among the branches of government.
It is thought that the judicial power to declare the law will more likely be exercised in an enlightened fashion if it is employed only where the court is exposed to the differing points of view of adversaries. Thus judicial decision-making power is typically exercised by a court which has heard the competing contentions of adversaries having sufficient interests in the outcome to thoroughly
[2 FSM Intrm. 100]
consider, research and argue the points at issue. Even then, a court's declaration of law should be limited to those rulings necessary to resolve the dispute before it.
Jurisdictional limitations upon the judicial power also reflect the specialized and limited role of judiciaries within government. While the Judiciary must resolve disputes legitimately placed before it, it may not usurp legislative functions by making declarations of policy or law beyond those necessary to resolve disputes nor undertake administrative functions of the kind normally consigned to the Executive Branch where this is not necessary to carry out the judicial function.
In re Sproat, 2 FSM Intrm.
1, 4 (Pon. 1985).
A difference of a hypothetical or abstract character, or one that is academic or moot is not a case or dispute under our Constitution. Instead, the controversy must be "definite and concrete, touching the legal relations of parties having adverse legal, interests." Ponape Chamber of Commerce v. Nett Municipal Government, 1 FSM Intrm. 389, 401 (Pon. 1984). When the requirements of the doctrine are not satisfied, this Court is without power to proceed, regardless of the wishes of the parties. In re Sproat, 2 FSM Intrm. 1 (Pon.
Here however those requirements are met. Plaintiffs allege that as dive shop operators in and around Moen Island they will be subjected to increased competition, and lost business and profits, by the activities of Seaward-under the foreign investment permit challenged here. Their amended complaint includes allegations that their own former clients have taken cruises on the ship, the "S.S. Thorfinn," operated by Seaward in Micronesia, that travel agents with whom the plaintiffs have worked have booked clients on such cruises, that travel agents who have discussed booking dive tours with the plaintiffs have subsequently booked their clients on the Thorfinn cruises, and that divers and travel agents specializing in dive tours who have recently done business with plaintiffs have been contacted by Seaward or have seen advertising of the S.S. Thorfinn cruise and plan to use those services.
It is true, as the defendants emphasize, that the impact of these facts upon plaintiffs is not quantified. Yet I can not agree with defendants that the existence of real or threatened injury to plaintiffs from Seaward's activities is so remote or speculative that plaintiffs should be barred from asserting their claims that Seaward's permit was issued unlawfully. There is no apparent governmental interest in preventing citizens who believe they will be affected by governmental action from questioning the validity of that action, so long as their fear of injury is reasonable. The allegations show that the plaintiffs and Seaward are vying for some of the same clients and working with some of the same travel agencies, in the same geographic area. This I find sufficient to establish the reasonableness of plaintiffs' claims that Seaward's activities pose a threat of economic injury to plaintiffs.
[2 FSM Intrm. 101]
The opposing parties have adverse interests and the interests of all will be affected by the outcome of the litigation. All defendants have a stake in upholding the validity of the permit. It is evident here that the Court will be exposed to the "differing points of view" and "competing contentions" of "adversaries having sufficient interests in the outcome to thoroughly consider, research and argue the points at issue." In re Sproat, 2 FSM Intrm. at
B. Incompatibility Clause - I also find no merit in the
government's claim that no person may have standing to object to a violation of
Incompatibility and Ineligibility Clause, which provides as follows:
A member of Congress may not hold another public office or employment. During the term for which he is elected and 3 years thereafter, a member may not be elected or appointed to a public office or employment created by national statute during his term. A member may not engage, in any activity which conflicts with the proper discharge of his duties. The Congress may prescribe further restrictions.
It is true, as defendants contend, that persons who have no particularized personal stake or relationship to the issue, suing as citizens, have been prevented from mounting Incompatibility and Ineligibility Clause claims under the United States Constitution. But in those cases the fact that the petitioners were unable to show any kind of special injury as a result of the alleged violations was crucial. Ex parte Levitt, 302 U.S. 633, 634, 58 S. Ct. 1, 1, 82 L. Ed. 493, 493 (1937) ("The motion papers disclose no interest upon the part of the petitioner other than that of a citizen and a member of the bar of this Court. That is insufficient.... [T]o entitle a private individual to invoke the judicial power to determine the validity of executive or legislative action he must show that he has sustained, or is immediately in danger of sustaining, a direct injury as a result of that action..."); Schlesinger v. Reservists Committee To Stop The War, 418 U.S. 208, 220, 94 S. Ct. 2925, 2932, 41 L. Ed. 2d 706, 718 (1974) ("standing to sue may not be predicated upon an interest of the kind alleged here which is held in common by all members of the public, because of the necessarily abstract nature of the injury all citizens share.")
Those cases are readily distinguishable from this one. Here plaintiffs claim that Senator Thomas' actions, as Chairman of the Foreign Investment Board and as a member whose presence was essential to the quorum when the Board acted, were crucial to issuance of the permit which affects them. This case then is comparable to Glidden Co. v. Zdanok, 370 U.S. 530, 82 S. Ct. 1459, 8 L. Ed. 2d 671 (1962). There, litigants affected by decisions of Federal Court of Appeals panels sought to challenge the constitutional status of judges sitting on those panels. The court did not question the standing of the parties but went directly to the merits. Here too the plaintiffs have been directly affected by the actions of Senator Thomas at issue here.
[2 FSM Intrm. 102]
Accordingly, there is assurance here of the "concrete adverseness which sharpens the presentation of issues upon which the court so largely depends for illumination of difficult constitutional issues." Baker v. Carr, 369 U.S. 186, 204, 82 S. Ct. 691, 703, 7 L. Ed. 2d 663, 678 (1962).
C. Nexus - The defendants also contend that in addition to the requirements already discussed, that a plaintiff must allege actual or threatened injury flowing from the actions under challenge, he must also demonstrate a "nexus" between his status and the rights he seeks to enforce. No extended analysis is necessary to demonstrate the logical connection between persons already engaged in a business within the Federated States of Micronesia, and actions of an administrative agency Reconsidering whether others should be engaged in competing business ventures in the same area.
Moreover, I find no separate "nexus" requirement for a case as this where the plaintiffs rely upon their special status as persons injured by the challenged action, to justify their assertion of claims. In United States constitutional law, the requirement that there be a nexus, or logical connection, between the actual or threatened injury of the potential plaintiff and the legal rights to be asserted by the plaintiff is a prudential one, applied from time to time by courts "to help limit the business of federal courts to questions presented in an adversary context and in a form historically viewed as capable of resolution through the judicial process.'" L. Tribe, American Constitutional Law 99 (1978), quoting Flast v. Cohen, 392 U.S. 83, 95, 88 S. Ct. 1942, 1950, 20 L. Ed. 2d 947, 958 (1968). Such nexus is not a jurisdictional requirement under American constitutional law. L. Tribe, supra, at 97 n.2. moreover, at the time the FSM Constitution was ratified the nexus requirement was held to apply only to taxpayer suits. Duke Power Co. v. Carolina Environmental Study Group, Inc., 438 U.S. 59, 98 S. Ct. 2620, 57 L. Ed. 2d 595 (1978). Thus ratification of the Constitution can not be seen as indicating an intention by the framers or the people of the Federated States of Micronesia that this additional obstacle to court access be adopted.
Legitimate arguments have been mounted against the establishment of a nexus requirement. See generally L. Tribe, American Constitutional Law 12 (1979 Supp.) ("The `nexus' requirement was from the start misguided: productive of unfortunate results and still less fortunate rationales"). This Court declines to adopt that requirement here.
The motions to dismiss for lack of standing are denied.
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