FSM SUPREME COURT APPELLATE DIVISION
Cite as People of Eauripik ex rel. Sarongelfeg v. Ospre Underwriting Agency, Ltd., 21 FSM R. 214 (App. 2017)
THE PEOPLE OF THE MUNICIPALITY OF EAURIPIK,
YAP, by and through SANTUS SARONGELFEG,
JOHN HAGLELGAM, and MOSES MOGLIG, as
assignees of MARIN MARAWA, LTD.'s causes of
action,
Prospective Appellants-Plaintiffs,
vs.
OSPREY UNDERWRITING AGENCY, LTD.,
Prospective Appellee-Defendant.
APPEAL CASE NO. Y1-2015
ORDER DENYING PETITION FOR PERMISSION TO APPEAL AN INTERLOCUTORY ORDER
Decided: April 3, 2017
BEFORE:
Hon. Beauleen Carl-Worswick, Associate Justice, FSM Supreme Court
Hon. Camillo Noket, Specially Assigned Justice, FSM Supreme Court*
Hon. Cyprian Manmaw, Specially Assigned Justice, FSM Supreme Court**
* Chief Justice, Chuuk State Supreme Court, Weno, Chuuk
** Chief Justice, Yap State Court, Kolonia, Yap
APPEARANCES:
For the Prospective Appellants: Daniel J. Berman, Esq.
Berman O'Connor & Mann
111 Chalan Santo Papa, Suite 503
Hagatna, Guam 96910
For the Prospective Appellee: Seth Forman, Esq.
Dooley Roberts & Fowler LLP
865 South Marine Corps Drive, Suite 201
Tamuning, Guam 96913
* * * *
The general rule is that only final judgments can be appealed. Thus, in the absence of a final judgment there must be some other source of jurisdiction in order for an appellate court to be able to hear an appeal. People of Eauripik ex rel. Sarongelfeg v. Osprey Underwriting Agency, Ltd., 21 FSM R. 214, 224 (App. 2017).
Appellate Rule 5(a) is a discretionary rule. Under it, the Article XI, § 3 justices "may permit an appeal" from an interlocutory order if application for permission is made within 10 days of the entry of the interlocutory order. People of Eauripik ex rel. Sarongelfeg v. Osprey Underwriting Agency, Ltd., 21 FSM R. 214, 224 (App. 2017).
Once a trial judge has certified an interlocutory order for appeal, the appellate court may, in its discretion, permit an appeal to be taken from the certified order. The final decision to accept or reject an interlocutory appeal rests within the appellate court's total discretion. People of Eauripik ex rel. Sarongelfeg v. Osprey Underwriting Agency, Ltd., 21 FSM R. 214, 224 (App. 2017).
When an order in question disposes of all the claims against one of several parties, it clearly has the requisite finality to be appealable under Civil Procedure Rule 54(b) if the trial court has made a proper certification under that rule. People of Eauripik ex rel. Sarongelfeg v. Osprey Underwriting Agency, Ltd., 21 FSM R. 214, 224 (App. 2017).
While an appellate court may exercise broad discretion in granting permission for interlocutory appeal, it has no discretion to refuse to hear an appeal as a matter of right. People of Eauripik ex rel. Sarongelfeg v. Osprey Underwriting Agency, Ltd., 21 FSM R. 214, 224 n.3 (App. 2017).
The appellate division may hear an appeal of an order that the trial court certified for an Appellate Rule 5(a) interlocutory appeal that it could have certified as a Civil Procedure Rule 54(b) final judgment but did not, and it need not convert the appeal to an appeal as of right under Rule 54(b) or remand it to the trial court for certification under Rule 54(b). People of Eauripik ex rel. Sarongelfeg v. Osprey Underwriting Agency, Ltd., 21 FSM R. 214, 224 (App. 2017).
When it is an issue of first impression in interpreting an FSM Appellate Rule and the Rule's language is nearly identical to its United States' counterpart, it is appropriate for the court to look to the United States federal courts for guidance in interpreting the rule. People of Eauripik ex rel. Sarongelfeg v. Osprey Underwriting Agency, Ltd., 21 FSM R. 214, 224, 229 n.5 (App. 2017).
The FSM Supreme Court need not dwell on apparent conflicts between two lines of cases in the U.S., but should search for reconciling principles which will serve as a guide to FSM courts. People of Eauripik ex rel. Sarongelfeg v. Osprey Underwriting Agency, Ltd., 21 FSM R. 214, 226 (App. 2017).
A permissive appeal taken under Appellate Rule 5(a) affords appellate jurisdiction over the matter and, in that light, the appellate court should advance its disposition being mindful that practical, not technical, considerations are applicable rather than exalting formalism over substance in order to convert or dismiss the appeal. People of Eauripik ex rel. Sarongelfeg v. Osprey Underwriting Agency, Ltd., 21 FSM R. 214, 226 (App. 2017).
When an appeal was certified under Appellate Procedure Rule 5(a) rather than Civil Procedure, Rule 54(b), no appeal as of right is available. People of Eauripik ex rel. Sarongelfeg v. Osprey
Underwriting Agency, Ltd., 21 FSM R. 214, 226 (App. 2017).
No good purpose would be served by sending a case back to the trial judge to make a Rule 54(b) certification when the trial judge has already certified the appeal pursuant to Appellate Rule 5(a), especially when the trial judge already had the chance to consider certification under Rule 54(b) and did not do so. This is consistent with the FSM Supreme Court's policy to preserve judicial economy and its limited resources. People of Eauripik ex rel. Sarongelfeg v. Osprey Underwriting Agency, Ltd., 21 FSM R. 214, 226 (App. 2017).
For the appellate court to sua sponte convert a permissive appeal into an appeal by right would effectively usurp the trial court's discretionary power of certification when it is in the best position to determine whether an appeal is appropriate under the case's particular set of circumstances. People of Eauripik ex rel. Sarongelfeg v. Osprey Underwriting Agency, Ltd., 21 FSM R. 214, 226 (App. 2017).
The Appellate Rule 5(a) requirement that the order be interlocutory, may be met by reason of the very absence of a Civil Rule 54(b) certification. People of Eauripik ex rel. Sarongelfeg v. Osprey Underwriting Agency, Ltd., 21 FSM R. 214, 226 (App. 2017).
If the pleading shows that both admiralty and another basis of subject matter jurisdiction exist, the suit will be treated as an admiralty claim for purposes of the special admiralty procedures and remedies only if the pleading or count setting forth the matter contains a statement identifying the claim as an admiralty claim. People of Eauripik ex rel. Sarongelfeg v. Osprey Underwriting Agency, Ltd., 21 FSM R. 214, 227 (App. 2017).
Rule 4(a)(1)(D) permitting interlocutory appeals from a trial division order determining the rights and liabilities of the parties in admiralty cases is inapplicable when, even assuming that the plaintiffs effectively pled the matter as an admiralty claim under Civil Rule 9(h), the order appealed from does not determine the rights and liabilities of the parties because it only determined that the court had no jurisdiction over one of multiple defendants. People of Eauripik ex rel. Sarongelfeg v. Osprey Underwriting Agency, Ltd., 21 FSM R. 214, 227 (App. 2017).
The appellate division, in exercising its discretion about whether to permit an Appellate Rule 5(a) appeal in a case that more appropriately would before it under Civil Procedure Rule 54(b), but which the trial court certified under the more restrictive Appellate Rule 5(a), will appropriately (and more importantly it is jurisdictionally sound to) allow the appeal if the requisite factors for a permissive appeal are met. People of Eauripik ex rel. Sarongelfeg v. Osprey Underwriting Agency, Ltd., 21 FSM R. 214, 227 (App. 2017).
The well–established general rule is that only final decisions may be appealed. A final decision generally is one which ends the litigation on the merits and leaves nothing for the court to do but execute judgment. Final orders and judgments are final decisions. People of Eauripik ex rel. Sarongelfeg v. Osprey Underwriting Agency, Ltd., 21 FSM R. 214, 228 (App. 2017).
Appeals are not permitted when the appeal is over issues involving steps moving towards a final order into which the interlocutory orders will merge. The purpose of limiting appeals to those from final decisions is to combine in one appellate review all stages of the proceeding if and when a final judgment or order results. This advances the policy of judicial economy which dictates against piecemeal appeals from the same civil action. People of Eauripik ex rel. Sarongelfeg v. Osprey Underwriting Agency, Ltd., 21 FSM R. 214, 228 (App. 2017).
Generally, the only interlocutory appeals allowed are those for which permission has been sought and granted, or those from certain orders concerning injunctions, or concerning receivers or receiverships, or from decrees determining parties' rights and liabilities in admiralty cases. People of Eauripik ex rel. Sarongelfeg v. Osprey Underwriting Agency, Ltd., 21 FSM R. 214, 228 (App. 2017).
A trial court's failure to specify the controlling question(s) of law it had in mind when certifying the case for interlocutory appeal, is one of several factors the appellate division may consider in deciding whether to exercise its discretionary power to review the matter. The power to review, however, is wholly separate from prudence in the exercise of it. People of Eauripik ex rel. Sarongelfeg v. Osprey Underwriting Agency, Ltd., 21 FSM R. 214, 228 n.4 (App. 2017).
In deciding whether to entertain an Appellate Rule 5(a) appeal, the appellate court is not bound by the trial court's belief that the question merits immediate review. Instead, the appellate court is vested with its own broad discretion whether or not to permit the appeal to proceed, and its discretion is so broad that it is difficult to imagine any controlling limit. People of Eauripik ex rel. Sarongelfeg v. Osprey Underwriting Agency, Ltd., 21 FSM R. 214, 228-29 (App. 2017).
The appellate court, despite its unconstrained freedom of discretion in deciding whether to accept an Appellate Rule 5(a) appeal, should give deference to the opinion of the experienced trial judge who has dealt in depth with the litigation for several years. People of Eauripik ex rel. Sarongelfeg v. Osprey Underwriting Agency, Ltd., 21 FSM R. 214, 229 (App. 2017).
In exercising its discretion to determine whether to grant or deny leave to appeal, the appellate court must consider the policy against piecemeal appeals. Thus, permission to appeal should be granted sparingly and with discrimination, and the appellate court should determine whether an appeal would delay rather than advance the case's ultimate disposition. People of Eauripik ex rel. Sarongelfeg v. Osprey Underwriting Agency, Ltd., 21 FSM R. 214, 229-30 (App. 2017).
Before the FSM Supreme Court appellate division decides whether or not to exercise its discretion to grant permission for an interlocutory appeal, the court should weigh the advantages and disadvantages of an immediate appeal. People of Eauripik ex rel. Sarongelfeg v. Osprey Underwriting Agency, Ltd., 21 FSM R. 214, 230 (App. 2017).
An immediate appeal's advantages increase with the probabilities of prompt reversal, the length of the court proceedings saved by reversal of an erroneous ruling, and the substantiality of the burdens imposed on the parties by a wrong ruling. An immediate appeal's disadvantages increase with the
probabilities that lengthy appellate consideration will be required, that the order will be affirmed, that continued court proceedings without appeal might moot the issue, that reversal would not substantially alter the course of court proceedings, and that the parties will not be relieved of any significant burden by reversal. People of Eauripik ex rel. Sarongelfeg v. Osprey Underwriting Agency, Ltd., 21 FSM R. 214, 230 (App. 2017).
A petition for permission to appeal an interlocutory order must contain a statement of the facts necessary to an understanding of the controlling question of law determined by the trial court order; a statement of the question itself; and a statement of the reasons why a substantial basis exists for a difference of opinion on the question and why an immediate appeal may materially advance the litigation's termination. People of Eauripik ex rel. Sarongelfeg v. Osprey Underwriting Agency, Ltd., 21 FSM R. 214, 230 (App. 2017).
A non-final order may be properly certified for interlocutory appeal when three factors are present – the non-final order 1) involves a controlling question of law, 2) about which there is a substantial ground for difference of opinion, and 3) when an immediate appeal from the order may materially advance the litigation's ultimate termination. People of Eauripik ex rel. Sarongelfeg v. Osprey Underwriting Agency, Ltd., 21 FSM R. 214, 230 (App. 2017).
The petitioner for certification for an interlocutory appeal bears the burden of showing that exceptional circumstances justify a departure from the basic judicial policy of postponing appellate review until after a final judgment is entered. People of Eauripik ex rel. Sarongelfeg v. Osprey Underwriting Agency, Ltd., 21 FSM R. 214, 230 (App. 2017).
An appellate court, before deciding whether it should exercise its discretion to grant permission to appeal, must first determine whether the trial court properly found that the requisite Appellate Rule 5(a) factors have been properly met. People of Eauripik ex rel. Sarongelfeg v. Osprey Underwriting Agency, Ltd., 21 FSM R. 214, 232 (App. 2017).
To establish that the interlocutory trial court decision contains a controlling question of law, the petitioner must show that reversal of the court's order would terminate the action or that the determination of the issue on appeal would otherwise materially affect the litigation's outcome. People of Eauripik ex rel. Sarongelfeg v. Osprey Underwriting Agency, Ltd., 21 FSM R. 214, 232 (App. 2017).
Generally, an order granting or denying discovery is a non-appealable interlocutory order reviewable only through an appeal of the final judgment since an order denying or granting discovery ordinarily does not present a controlling question of law so as to allow immediate appeal under Appellate Rule 5(a). People of Eauripik ex rel. Sarongelfeg v. Osprey Underwriting Agency, Ltd., 21 FSM R. 214, 232 (App. 2017).
The general rule is that an issue not raised below will not be considered for the first time on appeal. People of Eauripik ex rel. Sarongelfeg v. Osprey Underwriting Agency, Ltd., 21 FSM R. 214, 232 (App. 2017).
A defendant, who has properly asserted lack of personal jurisdiction over it, may move for the issue's determination as a preliminary matter. People of Eauripik ex rel. Sarongelfeg v. Osprey Underwriting Agency, Ltd., 21 FSM R. 214, 233 (App. 2017).
When neither the plaintiffs nor the court sought discovery about the court's personal jurisdiction over a defendant, that the trial court erred in not allowing the plaintiffs to conduct discovery before considering and granting a motion to dismiss for lack of personal jurisdiction, is not a controlling question of law properly certified for interlocutory review. People of Eauripik ex rel. Sarongelfeg v. Osprey Underwriting Agency, Ltd., 21 FSM R. 214, 233 (App. 2017).
No substantial basis for difference of opinion exists about a defendant's right to move before trial for dismissal based on lack of personal jurisdiction. People of Eauripik ex rel. Sarongelfeg v. Osprey Underwriting Agency, Ltd., 21 FSM R. 214, 233 (App. 2017).
The issue is well settled that affidavits and other evidence may be submitted in support of or opposition to a Rule 12(b)(2) motion to dismiss for lack of personal jurisdiction. People of Eauripik ex rel. Sarongelfeg v. Osprey Underwriting Agency, Ltd., 21 FSM R. 214, 233 (App. 2017).
The standard that a motion to dismiss should be denied unless it appears to a certainty that no relief could be granted is routinely applied to motions to dismiss under Civil Rule 12(b)(6) for failure to state a claim upon which relief can be granted, but this rule of interpretation has no bearing on a motion to dismiss under Civil Rule 12(b)(2), where the burden is on the plaintiff to prove a prima facie showing of personal jurisdiction. People of Eauripik ex rel. Sarongelfeg v. Osprey Underwriting Agency, Ltd., 21 FSM R. 214, 233-34 (App. 2017).
One of the most fundamental questions of law is whether a court has jurisdiction to preside over a given case or has personal jurisdiction over a particular party. The need for minimum contacts is a matter of personal jurisdiction, and whether a court has personal jurisdiction over a particular defendant is reviewed de novo when appealed. Thus, a question of personal jurisdiction is a "question of law." People of Eauripik ex rel. Sarongelfeg v. Osprey Underwriting Agency, Ltd., 21 FSM R. 214, 234 (App. 2017).
For the FSM Supreme Court to properly exercise jurisdiction under the FSM long-arm statute, a defendant must have certain minimum contacts with an FSM forum such that maintenance of the suit does not offend traditional notions of fair play and substantial justice. People of Eauripik ex rel. Sarongelfeg v. Osprey Underwriting Agency, Ltd., 21 FSM R. 214, 234 (App. 2017).
Whether a defendant's conduct amounts to the requisite minimum contacts necessary for the court to exercise personal jurisdiction over it, requires the court to undertake a particularized inquiry about the extent to which the defendant purposefully availed itself of the benefits of FSM laws. This
"particularized inquiry" is a necessarily fact-intensive investigation into the alleged facts that constitute the conduct by which the defendant established minimum contacts. Since it would be impossible for the appellate court to determine the trial court's jurisdiction over a defendant without reference to the trial court record, personal jurisdiction cannot be seen as a "pure" question of law, and because the issue is not a pure question of law, it cannot be properly certified for interlocutory appeal. People of Eauripik ex rel. Sarongelfeg v. Osprey Underwriting Agency, Ltd., 21 FSM R. 214, 234-35 (App. 2017).
When, if the appellate court were to reverse the trial court, it would only serve to prolong, rather than advance, the matter's termination, the more appropriate procedure is to await the matter's termination below and, after final judgment, hear an appeal on all issues presented below. People of Eauripik ex rel. Sarongelfeg v. Osprey Underwriting Agency, Ltd., 21 FSM R. 214, 235 (App. 2017).
Despite the fact that some, or even all, of the requisite factors for properly permitting interlocutory review under Appellate Rule 5(a) are met, the appellate division may otherwise decline to grant a petition for permission to appeal an interlocutory order for other reasons, or no reason at all. People of Eauripik ex rel. Sarongelfeg v. Osprey Underwriting Agency, Ltd., 21 FSM R. 214, 235 n.7 (App. 2017).
* * * *
BEAULEEN CARL-WORSWICK, Associate Justice:
This request for permission to appeal under Rule 5(a) of the FSM Rules of Appellate Procedure arises from a civil suit filed by the People of the Municipality of Eauripik, Yap, by and through Santus Sarongelfeg, John Haglelgam, and Moses Moglig, as assignees of Marin Marawa, Ltd.'s causes of action (collectively, "the People of Eauripik") against Osprey Underwriting Agency, Ltd. ("Osprey"), Tanya Rose, Christian Kelly, Levent Atay Osman, and Guy Richard John Pierpoint (collectively, "individual defendants"). On April 14, 2015, the defendant Osprey filed a motion to dismiss for lack of personal jurisdiction. The motion was granted by order of the trial judge entered on October 9, 2015. [People of Eauripik ex rel. Sarongelfeg v. Osprey Underwriting Agency, Ltd., 20 FSM R. 205 (Yap 2015).] The trial court concluded that the FSM long-arm statute did not authorize in personam jurisdiction over Osprey and that Osprey did not have minimum contacts with the FSM necessary to require it to litigate in the FSM without offending traditional notions of fair play and substantial justice.
In section three of the order, the trial judge stated that the court realized the importance of the interlocutory order and, in light of that fact, the court was willing to entertain a motion that the court make a statement required by Rule 5(a) of the FSM Rules of Appellate Procedure that would permit a party to request permission from the appellate division to make an immediate interlocutory appeal. On October 13, 2015, the People of Eauripik filed such a motion, which the court granted on October 21, 2015, amending the order entered on October 9, 2015 to include the language required by Appellate Rule 5(a). [Id. at 213-14.] On November 2, 2015, the People of Eauripik timely filed their petition for permission to appeal in the appellate division.
On August 19, 2016, this court issued an Order for Further Briefing, requesting that the parties brief the issue of whether the Appellate Court can and, if so, whether it should convert the request for
a permissive interlocutory appeal pursuant to Rule 5(a) of the FSM Rules of Appellate Procedure into a final review of a decision under Rule 54(b) of the FSM Rules of Civil Procedure that directs the entry of a final judgment as to one or more but fewer than all of the claims or parties, as well as the possible existence of an appeal by right under another rule. Both parties filed their responsive briefs on September 19, 2016.
A. Whether we can and should convert a certified appeal by permission under Rule 5(a) of the FSM Rules of Appellate Procedure into an appeal by right of a final judgment under Rule 54(b) of the FSM Rules of Civil Procedure and hear the matter without further delay where the trial court expressly certified the appeal to the appellate division pursuant to Appellate Rule 5(a).
B. Whether we, in our unreviewable discretion, should grant the People of Eauripik's Petition for Permission to Appeal an Interlocutory Order.
A. Permissive Appeal vs. Appeal by Right
Rule 4 of the FSM Rules of Appellate Procedure provides for what the court describes as appeals as of right, meaning neither the trial nor appellate division have any discretion in choosing to entertain the appeal. The rule provides, inter alia:
(1) In civil cases, by the filing of a notice of appeal as provided in Rule 3 within forty-two (42) days after the date of the entry of the judgment or order appealed from, appeals may be taken:
(A) from all final decisions of the trial divisions of the Federated States of Micronesia Supreme Court and the Kosrae State Court and of the Chuuk State Supreme Court appellate division; from the highest state courts in Yap and Pohnpei if the cases require interpretation of the national Constitution, national law, or a treaty; and in other cases where appeals to this Court from final decisions of the highest states courts are permitted under the Constitution of those states;
(B) from interlocutory orders of the Federated States of Micronesia Supreme Court trial division granting, continuing, modifying, refusing, or dissolving injunctions, or refusing to dissolve or modify injunctions;
(C) from interlocutory orders of the Federated States of Micronesia Supreme Court trial division appointing receivers, or refusing orders to wind up receiverships or to take steps to accomplish the purposes thereof, such as directing sales or other disposals of property;
(D) from interlocutory decrees of the Federated States of Micronesia Supreme Court trial division determining the rights and liabilities in admiralty cases; and
(E) in any other civil case in which an appeal to the FSM Supreme Court appellate division is permitted as a matter of law.
FSM App. R. 4(a)(1) (emphasis added).
Rule 5, on the other hand, provides for an appeal by permission, by which both the trial and appellate divisions are given rather broad discretion in determining whether an interlocutory order not otherwise appealable should nonetheless be heard immediately in the appellate division. That rule states, inter alia:
When a justice of the Federated States of Micronesia Supreme Court trial division, in making in a civil action an order not otherwise appealable under Rule 4(a), shall be of the opinion that such order involves a controlling question of law as to which there is substantial ground for difference of opinion and that an immediate appeal from the order may materially advance the ultimate termination of the litigation, the justice shall so state in writing in such order. The remaining article XI, section 3 justice(s) of the Federated States of Micronesia Supreme Court, acting as the appellate division, may permit an appeal to be taken from such order, if application is made to the appellate division within 10 days after the entry of the order with proof of service on all other parties to the action in the court from which the appeal is being taken.
FSM App. R. 5(a).
The People of Eauripik filed their Petition for Permission to Appeal an Interlocutory Order on November 2, 2015 pursuant to Appellate Rule 5. Osprey filed its opposition to the petition on November 11, 2015. This court then issued an Order for Further Briefing on August 19, 2016, noting that the People of Eauripik's request raised what is known as the rule 54 dilemma. In that order, this court stated that, at its core, the dilemma is whether the appellate division can or should convert a certified appeal by permission into an appeal by right of a final judgment and hear the matter without further delay. It also noted that this issue was a case of first impression for us because the appellate division has never converted a request for permission to appeal into an appeal by right and that other jurisdictions, including U.S. District Courts, are divided on the appropriateness of such an action. Thus, this court ordered the parties to provide further briefing on the propriety of converting the request for a permissive appeal into a final review of a decision that directs the entry of a final judgment as to one or more but fewer than all of the claims or parties, as well as the possible existence of an appeal by right under another rule. The parties filed their briefs and the issue is currently pending before us.
i. The People of Eauripik's Position
The People of Eauripik contend that we should grant permission for the appeal to go forward for the exact reasons stated by the trial division in this matter. Appellant's Br. Re: Jurisdiction & Authorization for FSM R. App. Pro. 5(a) ("Appellants' Br.") at 3.
First, they direct the court to Etscheit v. Adams, 6 FSM R. 580 (App. 1994), in which the trial court and appellate division both granted permission to appeal a partial summary judgment. Appellants' Br. at 3-4. While we acknowledge that the FSM Supreme Court appellate division has, in the past, granted Rule 5(a) permissive appeals, it does not appear that the Etscheit case involved facts which presented the aforementioned Rule 54 dilemma and is therefore distinguishable if the dilemma in fact exists in this matter.
Second, the People of Eauripik cite to DeMelo v. Woolsey Marine Industries, Inc., 677 F.2d 1030 (5th Cir. 1982), a United States case nearly identical to this matter, wherein the trial court granted the respondents' motion to dismiss, finding that one co-defendant did not have minimal contacts with the forum to accord the suit the benefit of due process. Appellants' Br. at 4-5. The trial court certified to
the court of appeals for the fifth circuit " 'pursuant to 28 U.S.C. Section 1292(b)' 1 the question of its 'personal jurisdiction . . . over Woolsey,' reciting in its order the appropriate findings called for by section 1292(b)." DeMelo, 677 F.2d at 1031. Ultimately, the Fifth Circuit Court of Appeals ruled, even though the order appealed from clearly had the requisite finality to be appealable as of right had the district court made certification under Rule 54(b) of the U.S. Federal Rules of Civil Procedure, 2 that it had the authority to permit the § 1292(b) appeal. Id. at 1034-35.
The People of Eauripik contend that, for the same analysis and reasons set forth in the DeMelo case, we should deem the appeal authorized and exercise appellate jurisdiction. Appellants' Br. at 5.
ii. Osprey's Position
Osprey agrees that the we should not convert this permissive appeal into an appeal of a final order as if the trial court had made a Rule 54 determination pursuant to the FSM Rules of Civil Procedure. It contends, inter alia, that this is especially true in this matter, where the trial court has received briefing on possible Rule 54(b) certification and has declined to act further on any such certification. Osprey's Response to August 19, 2016 Order for Further Briefing at 2.
Osprey adds that we should also not convert this appeal into an admiralty appeal because the plaintiffs have not pled the matter as an admiralty case pursuant to Rule 9(h) of the FSM Rules of Civil Procedure and that, even if they had, the order from which they seek to appeal was not a decree determining the "rights and liabilities of the parties," and therefore not appealable pursuant to Rule 4(a)(1)(D) of the FSM Rules of Appellate Procedure. Id.
iii. Analysis: Civil Rule 54(b) Appeal as of Right vs. Appellate Rule 5(a) Appeal by Permission
"The general rule is that only final judgments can be appealed." Iriarte v. Etscheit, 8 FSM R. 231, 235 (App. 1998) (citing Kosrae v. Melander, 6 FSM R. 257 (App. 1993)); FSM App. R. 4(a); see also In re Main, 4 FSM R. 255, 257 (App. 1990) (general rule is that appeals from ruling of trial judge may only be taken upon issuance of final judgment). Thus, "[i]n the absence of a final judgment there must be some other source of jurisdiction in order for us to be able to hear this appeal." Iriarte, 8 FSM R. at 235. The People of Eauripik contend that Rule 5(a) of the FSM Rules of Appellate Procedure provides this alternative source of jurisdiction to allow us to hear this appeal.
The language of Rule 5(a) of the FSM Rules of Appellate Procedure indicates that it is a discretionary rule. The Article XI, § 3 justices "may permit an appeal" from an interlocutory order if application for permission is made within 10 days of the entry of the interlocutory order. FSM App. R. 5(a). After a trial judge has certified an interlocutory order for appeal, the appellate court may, in its discretion, permit an appeal to be taken from the certified order. The final decision to accept or reject an interlocutory appeal rests within the total discretion of the appellate court, akin to that exercised by the Supreme Court on petitions for certiorari, and that discretion is not limited by any specific criteria. 4 AM. JUR. 2D Appellate Review § 130, at 757 (2d ed. 1995).
However, because the order in question disposed of all the claims against Osprey, it clearly had the requisite finality to be appealable under Rule 54(b) of the FSM Rules of Civil Procedure had the trial court made a proper certification under that rule. FSM Civ. R. 54(b); 10 CHARLES ALAN WRIGHT & ARTHUR R. MILLER, FEDERAL PRACTICE AND PROCEDURE § 2656, at 43 (1973). 3 Indeed, if not for the presence of the other defendants, the order would have been immediately appealable. However, the trial court in this matter did not make such a determination and rather certified the appeal to this court pursuant to Rule 5(a). The question before us, therefore, is whether, as it relates to our jurisdiction, we may hear the appeal under these circumstances or whether we should convert the appeal to an appeal as of right under Rule 54(b) of the FSM Rules of Civil Procedure or, alternatively, remand it to the trial court to make such certification. We hold that we may hear this appeal under Rule 5(a) and need not convert the appeal nor remand to the trial court for certification under Rule 54(b) for the following reasons.
Because this is an issue of first impression and the language of Rule 5(a) of the FSM Rules of Appellate Procedure is nearly identical to its United States' counterpart, it is appropriate for us to look to the United States federal courts for guidance in interpreting the rule. Jano v. King, 5 FSM R. 326, 329 (App. 1992).
The view that a potential Rule 54(b) order may not be made the subject of a Rule 5(a) appeal is
articulated in 10 CHARLES ALAN WRIGHT & ARTHUR R. MILLER, FEDERAL PRACTICE AND PROCEDURE § 2658, at 62 (1973):
[Rule 5(a)] and Rule 54(b) are mutually exclusive. The former applies only to orders that would be considered interlocutory even if presented in a simple single-claim, two-party case. Rule 54(b) . . . only applies to adjudications that would be final under [Rule 4(a) of the FSM Rules of Appellate Procedure] if they occurred in an action having the same limited dimensions. Therefore, if an order is final under [Rule 4(a) of the FSM Rules of Appellate Procedure, Rule 5(a)] cannot apply and resort must be had to Rule 54(b) in the multiple-party or multiple-claim situation.
(footnote omitted). A somewhat similar articulation is espoused in the Advisory Committee's Note accompanying the proposed 1961 amendments to Rule 54(b), to wit:
There has been some recent indication that interlocutory appeal under the provisions of [Rule 5(a)] may now be available for the multiple-party cases here considered. See Jaftex Corp. v. Randolph Mills, Inc., 282 F.2d 508 (2d Cir. 1960). The Rule 54(b) procedure seems preferable for those cases, and [Rule 5(a)] should be held inapplicable to them when the rule is enlarged as here proposed. See Luckenbach Steamship Co., Inc. v. H. Muehlstein & Co., Inc. 280 F.2d 755, 757 (2d Cir. 1960).
The contrary rationale, often referred to as an "expansion" of Appellate Rule 5, is well articulated as follows:
Civil Rule 54(b) provides that no judgment disposing of less than all the claims as to all of the parties is final, unless the [trial] court explicitly determines there is no just reason for delay and expressly orders entry of judgment. Since the rule itself provides that absent such entry of judgment, any order disposing of less than all the claims or parties is not final, [Appellate Rule 5(a)] should be available to permit certification and appeal.
16 CHARLES ALAN WRIGHT ET AL., FEDERAL PRACTICE AND PROCEDURE § 3929, at 147 (1977) (footnote omitted). Another leading treatise similarly agrees that "even though the adjudication is 'final' and within the coverage of Rule 54(b), if the district court does not make the express determination and express direction, the order remains interlocutory and, if not appealable as of right, then literally is should be reviewable under [Appellate Rule 5(a)] if the order meets the criteria of that [rule]." 6 JAMES WM. MOORE ET AL., MOORE'S FEDERAL PRACTICE ¶ 54.30[2.-2], at 465-66 (2d ed. 1976). Various United States federal courts seem to prefer the analysis that the possibility of potential certification under Rule 54(b) does not preclude resort to a permissive appeal under Appellate Rule 5(a). See DeMelo, 677 F.2d at 1033; Local P-171, Amalgamated Meat Cutters of N. Am. v. Thompson Farms Co., 642 F.2d 1065, 1069 n.4 (7th Cir. 1981) ("[S]urely if the court would have been prepared to review a judgment under Rule 54(b), it achieves little to deny § 1292(b) review and compel entry of judgment.") (citing 16 CHARLES ALAN WRIGHT ET AL., FEDERAL PRACTICE AND PROCEDURE § 3929, at 149 (1977)); Ford Motor Credit Co. v. S.E. Barnhart & Sons, Inc., 664 F.2d 377, 380 (3d Cir. 1981) (declining to dismiss an appeal certified under § 1292(b), although finding that certification under Rule 54(b) would have been more appropriate); Willmar Poultry Co. v. Morton-Norwish Prods., Inc., 520 F.2d 289 (8th Cir. 1975) (granting interlocutory appeal review pursuant to 28 U.S.C. 1292(b)), cert. denied, 424 U.S. 915 (1976); Benada Aluminum Prods. Co. v. Home Ins. Co., 380 F.2d 1001 (5th Cir. 1966) (where the appellate court's order dismissing the appeal appears to assume that availability of certification under Rule 54(b) or § 1292(b) is not mutually exclusive); Jaftex Corp. v. Randolph Mills, Inc., 282 F.2d 508 (2d Cir. 1960); but see In re Heddendorf, 263 F.2d 887, 891 (1st Cir. 1959) (where the petitioners asked, in the alternative, that the appellate court declare the order below as final and therefore
appealable as of right, refusing to decide the difficult question of whether the order sought to be reviewed was a final decision, but stating that permissive appeals and appeals by right are mutually exclusive).
The FSM Supreme Court need not dwell on these apparent conflicts between two lines of cases in the United States concerning the propriety of converting a permissive appeal into an appeal as of right or otherwise remanding to the trial court with directions to make a Rule 54(b) certification, but should search for reconciling principles which will serve as a guide to courts within the Federated States of Micronesia when reviewing Rule 5(a) appeals. See Olter v. National Election Comm'r, 3 FSM R. 123, 132 (App. 1987). In light of this, we believe the latter conflicting analysis is preferable because the most important controlling issue that needs to be considered under this analysis is whether we have jurisdiction to hear this appellate matter. There is no doubt that this permissive appeal taken pursuant to Rule 5(a) of the FSM Rules of Appellate Procedure affords us appellate jurisdiction over the matter and, in light of that fact, we should advance its disposition being mindful that practical, not technical, considerations are applicable rather than exalting formalism over substance in order to convert or dismiss this appeal. See Sass v. District of Columbia, 316 F.2d 366 (D.C. Cir. 1963) (recognizing that the district court could have allowed the appeal under Rule 54(b), stating that "the better practice" was to follow Rule 54(b), and expressing its agreement with Advisory Committee's Note accompanying the 1961 amendments to the rule, but nevertheless finding that it had no doubt of its power to accept jurisdiction over the appeal under § 1292(b), and did so); Lear Siegler, Inc. v. Adkins, 330 F.2d 595, 598 (9th Cir. 1964) (certifying the appeal under § 1292(b), finding it unnecessary to decide the question of whether it was appealable as a matter of right because the court otherwise had jurisdiction); PPG Indus. Inc. v. Continental Oil Co., 478 F.2d 674, 676 n.1 (5th Cir. 1973) ("Since we conclude 28 U.S.C.A. § 1292 (b) supplies appellate jurisdiction here, we need not consider whether § 1292(a) (1) provides an independent jurisdictional basis.").
Here, because this appeal was certified pursuant to Rule 5(a) of the FSM Rules of Appellate Procedure, rather than Rule 54(b) of the FSM Rules of Civil Procedure, no appeal as of right was available to the People of Eauripik. Iriarte v. Individual Assurance Co., 17 FSM R. 356, 358-59 (App. 2011) ("[T]he trial court never made an express determination that there was no just cause for delay . . . [and therefore the order] is not an appealable final judgment since [i]n the absence of such determination and direction, any order or other form of decision, however designated, which adjudicates fewer than all of the claims or rights and liabilities of fewer than all the parties shall not terminate the action as to any of the claims or parties, and the order or other form of decision is subject to revision at any time before the entry of judgment adjudicating all the claims and the rights and liabilities of all the parties."). Like the DeMelo court, we find that no good purpose would be served by sending the case back to the trial judge to make a Rule 54(b) certification when the trial judge has already certified the appeal pursuant to Appellate Rule 5(a), especially when the trial judge already had the chance to consider certification under Rule 54(b) and did not do so. This line of reasoning is consistent with our policy to preserve judicial economy and the limited resources of the FSM Supreme Court. Moreover, to sua sponte convert the present permissive appeal into an appeal by right would effectively usurp the trial court's discretionary power of certification when, in fact, it is in the best position to determine whether an appeal is appropriate under the particular set of circumstances in any case.
Furthermore, any requirement that the order be interlocutory as required by Appellate Rule 5(a) is met by reason of the very absence of a Civil Rule 54(b) certification. First, as stated supra, the People of Eauripik did not have a means to appeal as of right at the time they submitted their petition. The order appealed from is not a final decision as treated under Appellate Rule 4(a)(1)(A), nor is it an appeal from interlocutory order granting, continuing, modifying, refusing, or dissolving or refusing to dissolve or modify an injunction under Rule 4(a)(1)(B). Similarly, Rules 4(a)(1)(C) and (E) are inapplicable here.
Lastly, Rule 4(a)(1)(D) permitting interlocutory appeals from an order of the trial division determining the rights and liabilities of the parties in admiralty cases is inapplicable. As both parties indicate, and we are inclined to agree, this matter was not pled as an admiralty claim as required under Rule 9(h) of the FSM Rules of Civil Procedure. If the pleading shows that both admiralty and another basis of federal subject matter jurisdiction exist, the suit will be treated as an admiralty claim for purposes of the special admiralty procedures and remedies only if the pleading or count setting forth the matter contains a statement identifying the claim and an admiralty claim. 14A CHARLES ALAN WRIGHT ET AL., FEDERAL PRACTICE AND PROCEDURE § 3672, at 303-04 (3d ed. 1998). Nowhere in the People of Eauripik's Complaint filed in the trial court is a direct "statement identifying the claim as an admiralty or maritime claim for purposes of Rule 14(c)." FSM Civ. R. 9(h). Upon review, the closest thing to such a statement the People of Eauripik made in their Complaint is their claim that the trial court "has jurisdiction of the subject matter of this action under Article XI, Sections 6(a) and 6(b) of the FSM Constitution." Pl.'s Compl. at 2.
Article XI, Section 6(a) of the FSM Constitution provides exclusive jurisdiction to the trial division of the FSM Supreme Court "in cases affecting officials or foreign governments, disputes between states, admiralty or maritime cases, and in cases in which the national government is a party except where an interest in land is at issue." FSM Const. art. XI, § 6(a). Article XI, Section 6(b) of the FSM Constitution provides concurrent jurisdiction to the trial division of the FSM Supreme Court "in cases arising under [the] Constitution; national law or treaties; and in disputes between a state and a citizen of another state, between citizens of different states, and between a state or citizen thereof, and a foreign state, citizen, or subject." FSM Const. art. XI, § 6(b). Thus, it appears that the People of Eauripik's jurisdictional statement could have invoked the trial court's jurisdiction based on both Article XI, Section 6(a)'s admiralty and maritime clause and Article XI, Section 6(b)'s diversity jurisdiction clause. Without pleading further details, however, a general claim of jurisdiction based on the Constitution's admiralty and maritime jurisdictional clause, especially when accompanied by a claim that another independent basis of federal subject matter jurisdiction exists, is insufficient to treat this matter as an admiralty case. It follows therefore, that Appellate Rule 4(a)(1)(D) is inapplicable here.
Even assuming arguendo that the People of Eauripik did, in fact, effectively plead the matter as an admiralty claim under Civil Rule 9(h), the order appealed from does not determine the rights and liabilities of the parties because it only determined that the court had no jurisdiction over one of multiple defendants. See, e.g., Thypin Steel Co. v. Asoma Corp. 215 F.3d 273, 281 (finding that dismissal of the defendant on jurisdictional grounds did not determine its rights or liabilities because the dismissal was not on the merits, did not preclude the appellants from commencing and maintaining an independent action against the dismissed defendant in another forum, and "only affected 'how and where the rights and liabilities would be determined.' ") (quoting Allen v. Okam Holdings, Inc., 116 F.3d 153, 154 (5th Cir. 1997) (per curiam)) (citing Seahorse Barge Corp. v. Jackson Shipyards, Inc., 617 F.2d 396 (5th Cir. 1980) (per curiam)). Therefore, even assuming the People of Eauripik had properly pleaded one or more admiralty claims, Appellate Rule 4(a)(1)(D) would not apply to afford the People of Eauripik an appeal as of right because the trial court's dismissal of Osprey was based on its lack of personal jurisdiction over that defendant, not the merits of the case.
For the reasons set forth above, in exercising our discretion as to whether to permit a Rule 5(a) appeal in a case such as this which might have more appropriately come before us under Rule 54(b), but where the trial court found it more appropriate to certify under the more restrictive Appellate Rule 5(a), it is appropriate, and more importantly jurisdictionally sound, to allow the appeal if the requisite factors for a permissive appeal are met.
B. The People of Eauripik's Petition for Permission to Appeal an Interlocutory Order
As we discussed supra Part II.A.iii., "[t]he well-established general rule is that only final decisions may be appealed. A final decision generally is one which ends the litigation on the merits and leaves nothing for the court to do but execute judgment. Final orders and judgments are final decisions." Heirs of George v. Heirs of Tosie, 15 FSM R. 560, 562 (App. 2008) (citing Chuuk v. Davis, 9 FSM R. 471, 473 (App. 2000); In re Extradition of Jano, 6 FSM R. 23, 24 (App. 1993)).
Appeals are not permitted when the appeal is over issues involving steps moving towards a final order into which the interlocutory orders will merge. The purpose of limiting appeals to those from final decisions is to combine in one appellate review all stages of the proceeding if and when a final judgment or order results. This advances the policy of judicial economy which dictates against piecemeal appeals from the same civil action.
Id. (citing FSM Dev. Bank v. Adams, 12 FSM R. 456, 461 (App. 2004)); accord Damarlane v. United States, 8 FSM R. 14, 17 (App. 1997). However, the FSM Rules of Appellate Procedure do allow for certain interlocutory appeals.
Generally, the only interlocutory appeals allowed are those for which permission has been sought and granted, FSM App. R. 5(a); or those from certain orders concerning injunctions, FSM App. R. 4(a)(1)(B); or concerning receivers or receiverships, FSM App. R. 4(a)(1)(C); or from decrees determining parties' rights and liabilities in admiralty cases, FSM App. R. 4(a)(1)(D).
Adams, 12 FSM R. at 461 (citing Etscheit v. Adams, 6 FSM R. 608, 610 (App. 1994)).
In this matter, we are presented with an interlocutory appeal sought pursuant to Rule 5(a) of the FSM Rules of Appellate Procedure, quoted above supra Part II.A. As we stated before, the trial court entered an Order Granting Motion to Dismiss Osprey Underwriting Agency on October 9, 2015. Appellants' App. No. 8. In that order, the trial judge indicated that it was "willing to entertain a motion that the court make a statement required by Appellate Rule 5(a) that would permit a party to afterward ask the appellate division to make an immediate interlocutory appeal" within fourteen days of entry of that order. Id. at 13. The People of Eauripik filed their request on October 13, 2016 and the trial court granted their request on October 21, 2016, adding the following language to the court's October 9, 2016 order: "This order involves a controlling question of law as to which there is substantial ground for difference of opinion and an immediate appeal from this order may materially advance the litigation's ultimate determination." Appellant's App. No. 9. The trial court, however, did not indicate what question of law in its thirteen-page order was the issue as to which there is a substantial ground for difference of opinion nor how an immediate appeal from that order may materially advance the litigation's ultimate determination. 4
i. Nature of the Rule
The appellate court is not bound by the trial court's belief that the question merits immediate review. 16A CHARLES ALAN WRIGHT ET AL., FEDERAL PRACTICE AND PROCEDURE § 3951, at 278 (3d ed.
1999). 5 Instead, we are vested with our own broad discretion whether or not to permit the appeal to proceed. In fact, "the discretion of the court of appeals is so broad that it is difficult to imagine any controlling limit." 16 CHARLES ALAN WRIGHT ET AL., FEDERAL PRACTICE AND PROCEDURE § 3929 at 446 (3d ed. 2012); see Digital Equip. Corp. v. Desktop Direct, Inc., 511 U.S. 863, 883 n.9, 114 S. Ct. 1992, 2004 n.9, 128 L. Ed. 2d 842, 859 n.9 (1994) (permissive appeal "not a panacea, both because it depends to a degree on the indulgence of the court from which review is sought and because the discretion to decline to hear an appeal is broad. . . . [S]erious docket congestion may be adequate reason to support denial of certified appeal."); Coopers & Lybrand v. Livesay 473 U.S. 463, 475, 98 S. Ct. 2454, 2461, 57 L. Ed. 2d 351, 362 (1978) ("The appellate court may deny the appeal for any reason, including docket congestion.") (citing Hearings on H.R. 6238 and H.R. 7260 before Subcommittee No. 3 of the House Committee on the Judiciary, 85th Cong., 2d Sess. 21 (1958)); Davis v. Hall, 375 F.3d 703, 711 (8th Cir. 2004) (declining permission to appeal under § 1292(b) without further explanation); Gallimore v. Missouri Pac. R.R. Co., 635 F.2d 1165, 1168 & n.4 (5th Cir. 1981) (in explaining the court's denial of the defendant's petition for permission to bring an interlocutory review, the court stated that "denial of such a petition may be for any of a number of reasons largely unrelated to the perceived merits of the order sought to be appealed from"); Kraus v. Board of County Road Comm'rs, 364 F.2d 919, 922 (6th Cir. 1966) ("[I]t is not incumbent upon this court to express our reasons for granting or denying an application for permission to take an interlocutory appeal."); An Act to Amend Section 1292 of Title 28 of the United States Code Relating to Appeals From Interlocutory Orders, S. Rep. No. 85-2324 (1958), reprinted in 1958 U.S.C.C.A.N. 5255, 5257 WL 3723 ("The granting of the appeal is [] discretionary with the court of appeals which may refuse to entertain such an appeal in much the same manner that the [United States] Supreme Court today refuses to entertain application for writs of certiorari.").
Despite such unconstrained freedom of discretion, however, the appellate court should give deference to the opinion of the experienced trial judge who has dealt in depth with this litigation for several years. See 16 CHARLES ALAN WRIGHT ET AL., FEDERAL PRACTICE AND PROCEDURE § 3929 at 448 (3d ed. 2012); see, e.g., In re City of Memphis, 293 F.3d 345, 350 (6th Cir. 2002) (finding jurisdiction to consider the application for permission to appeal, without further explanation, based on the lower court's § 1292(b) certification); Gottesman v. General Motors Corp., 268 F.2d 194, 198 (2d Cir. 1959) (Moore, J., dissenting) ("[A] certification [by the lower court], in my opinion, is entitled to great weight and should not be rejected unless it is apparent on the face that the considerations which prompted the trial court to issue it have no basis in law or fact."); Lerner v. Atlantic Richfield Co., 690 F.2d 203, 209 (Temp. Emer. Ct. App. 1982) ("In exercising its discretion the court of appeals is not bound by the opinion of the district court, though it should give great weight thereto."); In re Heddendorf, 263 F.2d 887, 889 (1st Cir. 1959) (concurring, without further comment, with the lower court's opinion that the proposed appeal presented a difficult central question of law which is not settled by controlling authority, and that a prompt decision by the appellate court at this advanced stage of litigation would serve the cause of justice by accelerating the ultimate termination of the litigation).
In exercising its discretion to determine whether to grant or deny leave to appeal, the appellate court must consider the policy against piecemeal appeals. See Jano v. Fujita, 17 FSM R. 281, 283 (App. 2010) (appellate review of a trial court is generally limited to final orders and judgments because a policy of judicial economy dictates against allowing piecemeal appeals). In light of this policy,
permission to appeal should be granted sparingly and with discrimination, and the appellate court should determine whether an appeal would delay rather than advance the ultimate disposition of the case. 4 AM. JUR. 2D Appellate Review § 130 at 758 (2d ed. 1995); see Jano v. King, 5 FSM R. 326, 329 (App. 1992); In re Heddendorf, 263 F.2d at 889 ("In applying these standards, the court must weigh the asserted need for the proposed interlocutory appeal with the policy in the ordinary case of discouraging 'piecemeal appeals' . . . because piecemeal appeals would result in even greater hardships and tremendous additional burdens on the courts and litigants which would follow from allowing appeals from interlocutory orders on issues that might later become moot.").
The FSM Supreme Court Appellate Division has stated that "before the Court decides whether or not to exercise its discretion to grant permission for the appeal[,] the Court should weigh the advantages and disadvantages of an immediate appeal." Jano, 5 FSM R. at 329; cf. Amayo v. MJ Co., 14 FSM R. 355, 369 (Pon. 2006).
The advantages of immediate appeal increase with the probabilities of prompt reversal, the length of the . . . court proceedings saved by reversal of an erroneous ruling, and the substantiality of the burdens imposed on the parties by a wrong ruling. The disadvantages of immediate appeal increase with the probabilities that lengthy appellate consideration will be required, that the order will be affirmed, that continued . . . court proceedings without appeal might moot the issue, that reversal would not substantially alter the course of . . . court proceedings, and that the parties will not be relieved of any significant burden by reversal.
Jano, 5 FSM R. at 329 (quoting 16 Charles A. Wright et al., Federal Practice and Procedure § 3930, at 156 (1977)).
Rule 5(b) of the FSM Rules of Appellate Procedure provides the framework by which we determine whether or not to grant the petition for permission to appeal an interlocutory order. That rule requires that the petition for permission to appeal contain
a statement of the facts necessary to an understanding of the controlling question of law determined by the order of the Supreme Court trial division; a statement of the question itself; and a statement of the reasons why a substantial basis exists for a difference of opinion on the question and why an immediate appeal may materially advance the termination of the litigation.
FSM App. R. 5(b). Thus, a non-final order may be properly certified for interlocutory appeal where three factors are present: the non-final order (1) involves a controlling question of law (2) as to which there is a substantial ground for difference of opinion, and (3) where an immediate appeal from the order may materially advance the ultimate termination of the litigation. FSM App. R. 5(a); Amayo v. MJ Co., 13 FSM R. 259, 263 (Pon. 2005)
To apply the factors in determining the relative advantages and disadvantages of granting permission for this appeal requires us to review the parties' arguments, keeping in mind that the petitioner for certification for an interlocutory appeal bears the burden of showing that exceptional circumstances justify a departure from the basic judicial policy of postponing appellate review until after the entry of a final judgment.
ii. The People of Eauripik's Petition for Permission to Appeal an Interlocutory Order
The People of Eauripik propose four questions of law that form the basis for their petition for
permission to appeal: whether the trial court erred as a matter of law (1) in finding that Osprey did not have minimum contacts with the FSM; (2) in not applying the principle on a motion to dismiss that the claims sought to be dismissed are taken as true, and the facts and their reasonable inferences must be viewed in the light most favorable to the party opposing the motion to dismiss;(3) in not applying the principle that a motion to dismiss should be denied unless it appears to a certainty that no relief could be granted under any state of facts that can be proved in support of the claim; and (4) in dismissing the complaint without first allowing production of documents in discovery subject to their timely filed motions. Appellants' Pet. for Permission to Appeal an Interlocutory Order at 1-3.
The People of Eauripik contend that a substantial basis exists for a difference of opinion first, because the order appealed from itself admits the uncertainty on the jurisdictional questions and, second, because the order is in error in concluding that Osprey did not conduct business within the FSM sufficient to establish minimum contacts and thus personal jurisdiction under the FSM long-arm statute. Id. at 14-17. In doing so, they make factual distinctions from several of the cases relied upon by the trial court below. Finally, they contend that if the record is insufficient to establish minimum contacts, the court below should have allowed discovery and either denied the motion to dismiss or deferred the hearing and determination thereof until trial, at the close of plaintiff's evidence. Id. at 15.
In arguing the third prong has been met, the People of Eauripik contend that an immediate appeal will materially advance the termination of litigation for four reasons. First, because the trial court's certification states as such. Second, because there is a foreseeable protracted delay with respect to the pending litigation below against the four remaining individual defendants. Third, because if the Motion to Dismiss is affirmed, then the litigation against Osprey will immediately end. Fourth, because if the Motion to Dismiss is reversed, then litigation can expeditiously return to the trial court for trial as soon as possible. Id. at 17.
iii. Osprey's Opposition to the People of Eauripik's Petition for Interlocutory Review
First, Osprey contends that the People of Eauripik have not identified a controlling question of law as required by Rule 5(a). It argues that, instead of presenting a pure question of law that we can expeditiously decide without having to study the record, the People of Eauripik have asked us to review a mixed question of fact and law as to whether the trial court properly applied the law to numerous facts. Appellee's Opp'n to Pl.'s Pet. for Permission to Appeal an Interlocutory Order at 2-3.
Second, Osprey argues that, to the extent questions of law can be inferred from the People of Eauripik's petition, there is no substantial ground for difference of opinion because the controlling questions of law are well settled in the FSM.
It rephrases the People of Eauripik's questions of law as abstract pure questions of law and argues that there is no substantial basis for difference of opinion for each of them. Osprey rephrases the jurisdictional question as whether minimum contacts are required for assertion of personal jurisdiction by the FSM Courts and answers in the affirmative. It reiterates that that the People of Eauripik's multi-page recitation of facts is "far from a pure and abstract question of law." Id. at 4. Osprey rewrites the People of Eauripik's second question of law as whether all facts alleged in the complaint not otherwise denied by a responsive pleading are taken as true on a Civil Rule 12(b)(2) motion to dismiss for lack of personal jurisdiction. Osprey argues that the answer to the question is no, distinguishes the cases relied upon by the opposing party, and concludes that particular legal principle does not apply here. Id. at 4-5. Osprey recasts the People of Eauripik's third purported question of law as whether a motion to dismiss for lack of personal jurisdiction shall be denied unless it is certain that no possible set of facts exist for a claim and answers in the negative. It argues that the People of Eauripik's reliance on Nahnken of Nett v. United States, 7 FSM R. 581 (App. 2006) is
misplaced because that case involved a Rule 12(b)(6) motion to dismiss for failure to state a claim, not a Rule 12(b)(2) motion to dismiss for lack of in personam jurisdiction. Id. at 5. Osprey expresses the opposing party's final question of law as whether a court may grant a Rule 12(b)(2) motion to dismiss without first allowing jurisdictional discovery where the non-moving party had not propounded discovery on the party sought to be dismissed and opposed the motion based on information already in their possession. It answers "no" and directs our attention to the fact that, despite the representations made in their petition, the People of Eauripik had not requested jurisdictional discovery as to Osprey, only the individual defendants. Id. at 5-6.
In regard to the last factor to be applied in determining whether to certify the appeal, Osprey expresses that it is unclear if, or how, immediate appeal would materially advance the ultimate termination of the action. In support of its argument, Osprey contends that a pending motion to dismiss filed by the individual defendants will likely be granted in the near future because of either the corporate shield doctrine or the fact that "the separate actions of each individual, being less than the collective whole, will most likely be found to be insufficient to sustain personal jurisdiction over that individual." Id. at 6. Osprey contends that it would make more sense to wait for a ruling upon the individual defendants' motion to dismiss because if it is granted, final judgment would be entered and the appellate court would then be given the opportunity to address all personal jurisdiction issues in a single appeal. Id.
Osprey concludes that because none of the factors for granting permission for an interlocutory appeal are satisfied, the petition should be denied.
iv. Analysis
Before deciding whether we should exercise our discretion to grant permission to appeal, we must first determine whether the trial court properly found that the requisite factors under Appellate Rule 5(a) have been properly met.
To establish that the interlocutory trial court decision contains a controlling question of law, the petitioner must show that reversal of the court's order would terminate the action or determination of the issue on appeal would otherwise materially affect the outcome of the litigation. Klinghoffer v. S.N.C. Achille Lauro Ed Altri-Gestione Motonave Achille Lauro in Amministrazione Straordinaria, 921 F.2d 21, 23–25 (2d Cir. 1990). We will consider each proposed controlling question of law in the reverse order as presented to us in the People of Eauripik's petition.
Generally, an order granting or denying discovery is a non-appealable interlocutory order reviewable only through an appeal of the final judgment in the underlying action. Adams v. Island Home Constr., Inc., 10 FSM R. 466, 470 (Pon. 2001). The court has stated that an order denying or granting discovery ordinarily does not present a controlling question of law so as to allow immediate appeal under Appellate Rule 5(a). Amayo, 13 FSM R. at 263 (citing McCann v. Communication Design Corp., 775 F. Supp. 1506, 1533, reconsideration denied, 1991 WL 336760 (D. Conn. 1991)). Here, however, there was no request for discovery made to Osprey, only to the individual defendants, and thus no order granting or denying such ever issued. The People of Eauripik do not provide any discovery requests directed to Osprey in the court below, only motions to compel production of documents and depositions directed at the individual defendants. The general rule is that an issue not raised below will not be considered for the first time on appeal. Pohnpei v. AHPW, Inc., 13 FSM R. 159, 161 (App. 2005).
Notwithstanding, it appears that the People of Eauripik contend that the motion to dismiss for lack of jurisdiction was improvidently granted before they had an opportunity to prepare their discovery
requests. A defendant, however, who has properly asserted lack of personal jurisdiction over it may move for the issue's determination as a preliminary matter. 6 In view of the liberal discovery rules and procedures available, the People of Eauripik implicitly admitted, by filing their opposition to Osprey's motion to dismiss without propounding discovery before or even during the pendency thereof, that no discovery was desired or necessary at that juncture and therefore cannot have been prejudiced by a lack of opportunity for discovery as to Osprey. Furthermore, the trial court itself could have ordered further discovery on the issue in aid of deciding the motion, but did not. Thus, the People of Eauripik's position that the trial court erred in not allowing it to conduct discovery before considering and granting a motion to dismiss based on lack of personal jurisdiction is not a controlling question of law properly certified for interlocutory review. Even if it was, it is unlikely they would prevail on the issue because no substantial basis for difference of opinion exists as to a defendant's right to move before trial for dismissal based on lack of personal jurisdiction. Jano v. King, 5 FSM R. 326, 329 (App. 1992) ("The less likely the success of the plaintiff's arguments, the less likely permission should be granted for an appeal under FSM App. R. 5 (a).").
Questions II and III, as presented in the People of Eauripik's petition, similarly do not meet the requirement that there exist a substantial basis for difference of opinion on the issues. First, as to whether, on a Civil Rule 12(b)(2) motion to dismiss, the opposing party's pleadings are taken as true and allegations of the moving party that have been denied are taken as false. This overreaching statement is only partly true. The rule itself sheds light on the issue, which states, inter alia:
If on a motion asserting the defense numbered (6) to dismiss for failure of the pleading to state a claim upon which relief can be granted, matters outside the pleading are presented to and not excluded by the court, the motion shall be treated as one for summary judgment and disposed of as provided in Rule 56.
FSM Civ. R. 12(b). Here, however, the motion to dismiss was brought pursuant to Civil Rule 12(b)(2) and the issue is well settled in the FSM, as well as similar jurisdictions, that affidavits and other evidence may be submitted in support of or opposition to a motion to dismiss for lack of personal jurisdiction. See National Fisheries Corp. v. New Quick Co., 9 FSM R. 120, 127 (Pon. 1999) (citing Turnock v. Cope, 816 F.2d 332, 333 (7th Cir. 1987)) ("For the purposes of the motion to dismiss, the plaintiff has the burden of showing a prima facie case of personal jurisdiction, and the allegation in the complaint are taken as true except where controverted by affidavit, in which case any conflicts are construed in the non-moving party's favor."); see, e.g., Theunissen v. Matthews, 935 F.2d 1454, 1459 (6th Cir. 1991) (pleadings and affidavits submitted on motion to dismiss for lack of personal jurisdiction are received in the light most favorable to plaintiff, but, in sharp contrast to summary judgment procedure, the court does not weigh controverting assertions of the party seeking dismissal); Carney v. Horion Invs. Ltd., 107 F. Supp. 3d 216, 222 (D. Conn. 2015) ("When deciding a motion to dismiss for lack of personal jurisdiction, the court may consider affidavits and other evidence submitted by the parties.").
Second, the People of Eauripik claim that a motion to dismiss for lack of personal jurisdiction should be denied unless it appears to a certainty that no relief could be granted under any state of facts that can be proved in support of the claim is also misplaced. The FSM Supreme Court routinely applies this standard, but in the context of motions to dismiss pursuant to Civil Rule 12(b)(6) for failure to state a claim upon which relief can be granted. See, e.g., FSM Dev. Bank v. Tropical Waters Kosrae, Inc.,
18 FSM R. 378, 379 (Kos. 2012); Moses v. M.V. Sea Chase, 10 FSM R. 45, 52 (Chk. 2001); Damarlane v. FSM, 8 FSM R. 119, 121 (Pon. 1997); Faw v. FSM, 6 FSM R. 33, 37 (Yap 1993). That rule of interpretation has no bearing on a motion to dismiss pursuant to Civil Rule 12(b)(2) where the burden is on the plaintiff to prove a prima facie showing of personal jurisdiction. National Fisheries Corp., 9 FSM R. at 127; OMI Holdings, Inc. v. Royal Ins. Co. of Canada, 149 F.3d 1086, 1091 (10th Cir. 1998) (" 'The plaintiff bears the burden of establishing personal jurisdiction over the defendant.' . . . The plaintiff may make this prima facie showing by demonstrating, via affidavit, or other written materials, facts that if true would support jurisdiction over the defendant.").
Thus, because no substantial basis for difference of opinion exists for questions II and III of the People of Eauripik's petition, they are not properly certified for interlocutory appeal.
The last remaining question the People of Eauripik ask us to review before final judgment is entered in the court below is whether the trial court erred as a matter of law, in light of the posture of the case below, to find that Osprey lacked the required minimum contacts with the FSM, specifically the state of Yap, to exercise personal jurisdiction over it without offending traditional notions of fair play and substantial justice.
It is undisputed that one of the most fundamental questions of law is whether a court has jurisdiction to preside over a given case or has personal jurisdiction over a particular party. The need for minimum contacts is a matter of personal jurisdiction, see, e.g., DeMelo v. Woolsey Marine Indus., Inc., 677 F.2d 1030 (5th Cir. 1982)(granting application to appeal interlocutory order granting a motion to dismiss on grounds that the defendant never had minimal contact with the forum state to accord the suit the benefit of due process), and whether a court has personal jurisdiction over a particular defendant is reviewed de novo when appealed. Thus, it is clear to us that the jurisdictional question presented is a "question of law."
However, whether it is a "pure" question of law, as presented in the petition, which is suitable for interlocutory review is less than clear.
The term "question of law" does not mean the application of settled law to fact. It does not mean any question the decision of which requires rooting through the record in search of the facts. . . . Instead, what the framers of § 1292(b) had in mind is more of an abstract legal issue or what might be called one of "pure" law, matters the court of appeals 'can decide quickly and cleanly without having to study the record.'
McFarlin v. Conseco Servs., LLC, 381 F.3d 1251, 1258 (11th Cir. 2004) (quoting Ahrenholz v. Board of Trustees of the Univ. of Ill., 219 F.3d 674, 677 (7th Cir. 2000)); see, e.g., Ceasar v. Uman Municipality, 12 FSM R. 354, 357 (Chk. S. Ct. Tr. 2004) (whether a municipality has legal authority to impose license fees or taxes solely as a revenue measure is pure question of law).
Here, the petitioners ask us to apply well-settled law to the facts present in this case. It is undisputable that for us to properly exercise jurisdiction under the FSM long-arm statute, a defendant must have certain minimum contacts with an FSM forum such that maintenance of the suit does not offend traditional notions of fair play and substantial justice. Yap v. M/V Cecilia I, 13 FSM R. 403, 410-11 (Yap 2005). Whether Osprey's conduct in this case amounts to the requisite minimum contacts necessary for us to exercise personal jurisdiction over it requires us to undertake a particularized inquiry as to the extent to which the defendant purposefully availed itself of the benefits of FSM or Yap laws. This "particularized inquiry" is a necessarily fact-intensive investigation into the alleged facts that constitute the conduct by which the People of Eauripik argue Osprey established minimum contacts. It would be impossible for us to determine the trial court's jurisdiction over Osprey without reference
to the trial court record. It, therefore, cannot be categorized as a "pure" question of law. Because the issue is not a pure question of law, it is our belief that it is not properly certified for interlocutory appeal.
Moreover, resolution of the issue at this juncture would not serve to materially advance the ultimate termination of the litigation below. Resolution of whether Osprey established minimum contacts in the FSM would not serve to avoid a trial or otherwise substantially shorten the litigation. If we decline to hear the interlocutory appeal, the case below moves forward as against the individual defendants. If we were to hear this appeal and decided to reverse the trial court, the People of Eauripik would still be required to prove at trial, by a preponderance of evidence, that the court has personal jurisdiction over Osprey. This would presumably require the People of Eauripik to conduct extensive discovery on the issue of whether personal jurisdiction exists over Osprey. It seems that if we were to reverse the trial court, it would only serve to prolong, rather than advance, the termination of the matter. The more appropriate procedure is to await termination of the matter below and hear an appeal on all issues presented below after final judgment.
For these reasons, we exercise our broad unreviewable discretion not to decide the minimum contacts issue.
We determined that this appeal is properly before us based on a petition for permission to appeal an interlocutory order pursuant to Rule 5(a) of the FSM Rules of Appellate Procedure. However, because none of the questions posited by the People of Eauripik are pure controlling questions of law as to which there is a substantial basis for difference of opinion which may materially advance the ultimate termination of the litigation if appealed immediately, we exercise our broad unreviewable discretion to decline the invitation to hear this interlocutory appeal. 7 Therefore, the People of Eauripik's Petition for Permission to Appeal an Interlocutory Order is DENIED.
___________________________Footnotes:
1 28 U.S.C. § 1292(b), which is, in substance, identical to Rule 5(a) of the FSM Rules of Appellate Procedure reads as follows:
(b) When a district judge, in making a civil action order not otherwise appealable under this section, shall be of the opinion that such order involves a controlling question of law as to which there is substantial ground for difference of opinion and that an immediate appeal from the order may materially advance the ultimate termination of the litigation, he shall so state in writing in such order. The Court of Appeals which would have jurisdiction of an appeal of such action may thereupon, in its discretion, permit an appeal to be taken from such order, if application is made to it within ten days after the entry of the order: Provided, however, that such application for an appeal hereunder shall not stay proceedings in the district court unless the district judge or the Court of Appeals or a judge thereof shall so order.
2 Rule 54(b) of the U.S. Federal Rules of Civil Procedure, on which Rule 54(b) of the FSM Rules of Civil Procedure is based, reads nearly identically in form and certainly in substance. For reference, the United States rule 54(b) states as follows:
(b) Judgment on Multiple Claims or Involving Multiple Parties. When an action presented more than one claim for relief-whether as a claim, counterclaim, crossclaim, or third-party claim-or when multiple parties are involved, the court may direct entry of a final judgment as to one or more, but fewer than all, claims or parties only if the court expressly determines that there is no just reason for delay. Otherwise, any order or other decision, however designation, that adjudicates fewer than all the claims or the rights and liabilities of fewer than all the parties does not end the action as to any of the claims or parties and may be revised at any time before the entry of a judgment adjudicating all the claims and all the parties' rights and liabilities.
3 We note that the trial court, after the People of Eauripik filed their petition for interlocutory review, issued an Order Seeking Suggestions inviting the parties to submit their positions on whether it might be advisable 1) for the trial court to issue a Rule 54(b) final judgment for the plaintiffs' claims against Osprey; 2) voluntarily (or stipulate to) dismiss the rest of the case, thus making the October 9, 2015 Order Granting Motion to Dismiss Osprey Underwriting Agency a final, appealable judgment; or 3) stipulate to dismissal without prejudice the plaintiffs' remaining claims with the proviso that if the appellate division orders the claims against Osprey reinstated, the plaintiffs may refile the other claims. Interestingly, neither party requested the trial court to enter a Rule 54(b) final judgment. Had the trial court entered final judgment under Rule 54(b), as it appeared willing to do, a much lesser showing would be required than now, on certification of an interlocutory appeal under Appellate Rule 5(a). While we may exercise our broad discretion in granting permission for interlocutory appeal, we have no discretion to refuse to hear an appeal as a matter of right.
4 The trial court's failure to specify the controlling question(s) of law it had in mind when certifying the case for interlocutory appeal is one of several factors we may consider in deciding if, or how, to exercise our discretionary power to review the matter. The power to review, however, is wholly separate from the prudence in the exercise of it.
5 As we said before, "although the court must first look to FSM sources of law, FSM Const. art. XI, § 11, when an FSM court has not previously construed aspects of an FSM appellate procedure rule which is identical or similar to a U.S. counterpart, the court may look to sources for guidance in interpreting those aspects." Amayo v. MJ Co., 14 FSM R. 355, 362 (Pon. 2006); see, e.g., Jano v. King, 5 FSM R. 326, 329 (App. 1992) (looking to U.S.C. § 1292(b) as guidance to construe FSM App. R. 5(a)).
6 Osprey, in its answer filed below, preserved its personal jurisdiction defense for determination before trial. People of Eauripik ex rel. Sarongelfeg v. F/V Tereka No. 168, 20 FSM R. 205, 209 (Yap 2015).
7 As we said before, despite the fact that some, or even all, of the requisite factors for properly permitting interlocutory review pursuant to Appellate Rule 5(a) are met, we may otherwise decline to grant the petition for permission to appeal an interlocutory order for other reasons, or no reason at all.
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