FSM SUPREME COURT TRIAL DIVISION
Cite as Pt. Alorinda Shipping v. Alorinda 251, 21 FSM R. 318 (Yap 2017)
PT. ALORINDA SHIPPING,
Plaintiff,
vs.
ALORINDA 251, her tackle, machinery,
equipment and appurtenances, etc.,
In Rem Defendant,
FEDERATED STATES OF MICRONESIA, LUKNER
WEILBACHER in his capacity as Secretary of the
Department of Transportation, Communication &
Infrastructure, YAP STATE GOVERNMENT,
TONY GANNGIYAN in his capacity as Governor
of Yap State, YAP FISHING AUTHORITY, and
WAAB TRANSPORTATION COMPANY,
In Personam Defendants.
CIVIL ACTION NO. 2017-3000
ORDER DISPOSING OF MOTIONS
Larry Wentworth
Associate Justice
Hearing: May 28, 2017
Decided: July 26, 2017
APPEARANCES:
For the Plaintiff:
Michael J. Sipos, Esq.
P.O. Box 2069
Kolonia, Pohnpei FM 96941
For the Defendant: Rachelle Bergeron, Esq.
(Yap, Ganngiyan, &
Assistant Attorney General
Yap Fishing Auth.)
Office of the Yap Attorney General
P.O. Box 435
Colonia, Yap FM 96943
For the Defendant: Minh Nguyen, Esq.
(FSM & Weilbacher)
Assistant Attorney General
FSM Department of Justice
P.O. Box PS-105
Palikir, Pohnpei FM 96941
* * * *
When interrogatories are served by mail, the 30-day response date is extended by six days. Pt. Alorinda Shipping v. Alorinda 251, 21 FSM R. 318, 322 (Yap 2017).
The court may allow a shorter or longer time than the time frame the rule sets for interrogatory responses. Pt. Alorinda Shipping v. Alorinda 251, 21 FSM R. 318, 322 (Yap 2017).
Each interrogatory must be answered separately and fully in writing under oath, unless it is objected to, but a declaration that the answers were made "under the penalty of perjury," while it may be an acceptable practice in the United States, does not meet FSM requirements for being "under oath." Pt. Alorinda Shipping v. Alorinda 251, 21 FSM R. 318, 322 (Yap 2017).
In the FSM, an unsworn declaration, even when the declarant avers or asserts that it is made "under the penalty of perjury," is not the equivalent of an affidavit required by the rules. This is not a matter of interpreting a procedural rule similar to a U.S. rule, but is rather a matter of not applying a foreign statute that has no FSM counterpart. Pt. Alorinda Shipping v. Alorinda 251, 21 FSM R. 318, 322 (Yap 2017).
Since an interrogatory otherwise proper is not necessarily objectionable merely because an answer to the interrogatory involves an opinion or contention that relates to fact or the application of law to fact, objections to interrogatories on the ground that the answer would call for a legal conclusion are thus incomplete. An incomplete answer is to be treated as a failure to answer. Pt. Alorinda Shipping v. Alorinda 251, 21 FSM R. 318, 323 (Yap 2017).
A party that provides discovery responses after a motion to compel discovery responses has been filed and served, does not, by virtue of providing responses, make moot the motion to compel, thereby precluding the award of sanctions. Pt. Alorinda Shipping v. Alorinda 251, 21 FSM R. 318, 323 (Yap 2017).
A tardy response to interrogatories does not relieve a party of the consequences of Rule 37(a)(4). Pt. Alorinda Shipping v. Alorinda 251, 21 FSM R. 318, 323 (Yap 2017).
A motion to compel discovery will be granted when there was not only a "failure to answer" interrogatories under oath due to incomplete replies, but also since answering interrogatories after a motion to compel their answer has been filed does not preclude sanctions. Pt. Alorinda Shipping v. Alorinda 251, 21 FSM R. 318, 324 (Yap 2017).
Yap statutory provisions that no attorney representing a party against the State or public entity can charge, demand, receive or collect attorney's fees from the State or public entity and that an attorney, in suits against Yap, cannot, unless a court orders otherwise, charge, demand, receive or collect" fees higher than 30% of any judgment rendered or any award, compromise, or settlement, are clearly intended to protect both the people who, under the Yap Constitution and statute, have a right to sue Yap for redress and compensation and Yap from unscrupulous or avaricious attorneys and impose criminal penalties of a fine up to $2,000, or imprisonment for not more than one year, or both on an attorney for violating these provisions. Pt. Alorinda Shipping v. Alorinda 251, 21 FSM R. 318, 324 (Yap 2017).
A sanction award, even when calculated by determining a party's reasonable attorney's fees, is not the payment of that attorney's fees or a payment of fees to that attorney. An attorney fee award is not an award to an attorney because a fee award is the client's, not the attorney's. Pt. Alorinda Shipping v. Alorinda 251, 21 FSM R. 318, 324 (Yap 2017).
Yap has specifically extended its sovereign immunity waiver to include set-offs. Pt. Alorinda Shipping v. Alorinda 251, 21 FSM R. 318, 325 n.6 (Yap 2017).
The court has the power to regulate and control the litigation and the litigants before it, and this includes the power to impose sanctions, however calculated, on the parties legitimately before it. Pt. Alorinda Shipping v. Alorinda 251, 21 FSM R. 318, 325 n.6 (Yap 2017).
When a court has jurisdiction over a case, it therefore also has the power to impose sanctions for discovery misconduct by any party to the case. Pt. Alorinda Shipping v. Alorinda 251, 21 FSM R. 318, 325 (Yap 2017).
"Special compensation" may be paid to a salvor who has carried out salvage operations on a vessel which threatened damage to the environment in FSM waters. Pt. Alorinda Shipping v. Alorinda 251, 21 FSM R. 318, 325 (Yap 2017).
A salvor is entitled to an award for the salvor's "out-of-pocket expenses reasonably incurred in the salvage operation and a fair rate for equipment and personnel actually and reasonably used in the salvage operation, and when the salvor by his salvage operations has prevented or minimized damage to the environment, the special compensation payable by the owner to the salvor may be increased up to a maximum of 30% of the salvor's actual, audited expenses incurred. A claim for depreciation in value of a vessel that was engaged in the salvage operation will be disregard since salvage awards are based on actual expenses, and depreciation is not an actual expense. Pt. Alorinda Shipping v. Alorinda 251, 21 FSM R. 318, 325 (Yap 2017).
A bond for a barge cannot exceed the barge's actual value. Pt. Alorinda Shipping v. Alorinda 251, 21 FSM R. 318, 325-26 & n.7 (Yap 2017).
* * * *
LARRY WENTWORTH, Associate Justice:
This comes before the court on 1) Motion to Compel Compliance with Discovery and Motion for Order Allowing Plaintiff to Post Bond to Secure Return of Vessel, filed March 20, 2017, by the plaintiff, Pt. Alorinda Shipping ("Pt. Alorinda"); 2) Response to Plaintiff's Motion to Compel Compliance with Discovery and Motion for Order Allowing Plaintiff to Post Bond to Secure Return of Vessel, filed April 19, 2017 by defendants Yap State Government, Tony Ganngiyan as Governor of Yap State, and Yap Fishing Authority (collectively "Yap" or "Yap Defendants"); 3) Plaintiff's Reply to Yap's Response to Motion to Compel and Motion for Order to Post Bond to Secure Return of Vessel, filed April 29, 2017; 4) Pt. Alorinda's Request for Ruling on Plaintiff's Motions to Compel and for Permission to Post Bond to Secure Vessel Release, filed May 15, 2017; 5) Defendants' Brief on Assessment of Attorney's Fees Against Defendants, filed June 1, 2017; and 6) Plaintiff's Reply to Yap's Brief on Award of Fees as a Sanction under Civil Rule 37(a)(4) for Failure to Make Discovery, filed June 8, 2017.
The court held a telephonic hearing on May 28, 2017, at which time it set dates for further briefing on whether it can assess Rule 37(a)(4) sanctions, including attorney's fees, against the Yap state defendants when they assert immunity as a defense to those fees. The court thus considered this matter submitted for its decision once the last required briefing was due and was filed on June 8, 2017. And the court also considered statements in Pt. Alorinda's June 26, 2017 filing that asked for, among other things, the court to rule on the pending motions.
In its motion, Pt. Alorinda seeks full compliance with its January 17 and 19, 2017 discovery requests and also asks that a bond amount be set for the barge Alorinda 251 so that it can post bond for the barge in order that it can be released from the Yap state government's possession.
The court, in its January 23, 2017 Scheduling Order, gave the parties until April 5, 2017 to make all of their discovery request and until May 1, 2017 to complete all discovery.
With their April 19, 2017 response to Pt. Alorinda's motion, the Yap defendants provided a number of discovery responses and then contended that those responses made Pt. Alorinda's motion to compel moot. Yap concurs that a bond amount can be set for the barge, but seeks a bond much higher than the $50,000 that Pt. Alorinda suggests is appropriate to cover any possible salvage award to the Yap defendants. Although the Yap defendants have asserted a salvage claim much higher, Yap stated, during the telephonic hearing that it would be satisfied with a bond of $350,000, an amount that represents the barge's current full value.
On January 17, 2017, Pt. Alorinda served interrogatories on defendants Yap state government and Governor Ganngiyan by mail, and on January 19, 2017, it served interrogatories by mail on defendant Yap Fishing Authority. In its March 20, 2017 motion, Pt. Alorinda seeks to compel answers to these interrogatories.
A. Interrogatory Responses
Civil Procedure Rule 33(a) makes interrogatory responses due "within 30 days after the service of the interrogatories." Since Pt. Alorinda served the interrogatories by mail, the due dates were extended six days. FSM Civ. R. 6(e). The responses were thus due on February 22, and on February 24, 2017, respectively. None were filed or served by those dates. Nor did any party seek further time to respond. Pt. Alorinda then filed and served its motion to compel on March 20, 2017.
The Yap defendants, in their counsel's February 16, 2017 e-mail to plaintiff's counsel, took the position that they did not have to respond to Pt. Alorinda's discovery requests until May 1, 2017, the discovery completion deadline set in the court's scheduling order. That position was unjustified. There is no support for such a position in either the procedural rules or in the court's order.
"The court may allow a shorter or longer time" than the time frame the rule sets for interrogatory responses. FSM Civ. R. 33(a). No Yap defendant sought a longer time to respond to discovery. The 36-day deadline therefore applied. On April 19, 2017, the Yap defendants filed a response to the two March 20th motions and included a request that the court accept the response's late filing.1
Simultaneously, the Yap defendants also filed several discovery responses. These responses included answers to the January interrogatories. Pt. Alorinda contends that these answers are deficient because some answers were incomplete or did not provide the information sought or had improper objections and because the interrogatory answers were "not sworn under notarized affidavit." Attached to those answers were declarations or affirmations in which the signer stated that he "solemnly declare[d] and affirme[d] under the penalty of perjury that the foregoing Responses to Interrogatories are true and correct . . . ."
Pt. Alorinda is correct that, despite these declarations, the responses "are not sworn." "Each interrogatory shall be answered separately and fully in writing under oath, unless it is objected to . . . ." FSM Civ. R. 33(a). But a declaration "under the penalty of perjury," while it may be an acceptable practice in the United States, does not meet FSM requirements for being "under oath." People of Eauripik ex rel. Sarongelfeg v. F/V Teraka No. 168, 18 FSM R. 297, 300 & n.1 (Yap 2012). In the U.S., such declarations are acceptable because a U.S. statute, 28 U.S.C. § 1746, authorizes them. F/V Teraka No. 168, 18 FSM R. at 300. But there is no similar FSM statute. Therefore,
the court must conclude that in the FSM an unsworn declaration, even when the declarant avers or asserts that it is made "under the penalty of perjury," is not the equivalent of an affidavit required by the rules. This is not a matter of interpreting a procedural rule similar to a U.S. rule, but is rather a matter of not applying a foreign statute that has no FSM counterpart.
Id. Thus, the court must conclude that the interrogatory answers were not "under oath," and are, as Pt. Alorinda asserts, deficient in that regard.2
Pt. Alorinda also notes that the interrogatory answers did not contain a line item compilation of the Yap defendants' expenses in salvaging the barge and no detailed listing of information, making the answers incomplete and ambiguous. It further asserts that some objections in the answers were unfounded because they refused to provide details on the ground that that would call for a legal conclusion. However, "[a]n interrogatory otherwise proper is not necessarily objectionable merely because an answer to the interrogatory involves an opinion or contention that relates to fact or the application of law to fact . . . ." FSM Civ. R. 33(b). Those answers were thus incomplete. "[A]n evasive or incomplete answer is to be treated as a failure to answer." FSM Civ. R. 37(a)(3). Because of this "failure to answer," Pt. Alorinda is entitled to an order compelling complete and fully responsive answers and that those answers be "under oath."3
B. Rule 37 Sanctions
Pt. Alorinda asks that sanctions be imposed on the Yap defendants because it needed to bring a motion to compel compliance with its discovery requests.
1. Mootness of Motion to Compel
Yap counters that no sanctions should be imposed because the motion should be considered moot once it, after the motion was made, answered the interrogatories. Pt. Alorinda asserts that its motion to compel is not moot, not only because it has not been provided all of the information it requested but also because it is entitled to an award for its expenses, including attorney's fees, for bringing its motion to compel.
The court has previously ruled that a party that provides discovery responses after a motion to compel discovery responses has been filed and served, does not, by virtue of providing responses, make moot the motion to compel, thereby precluding the award of sanctions. Primo v. Semes, 11 FSM R. 603, 605-06 (Pon. 2003). This is consistent with other courts' interpretation of similar rules. See Devaney v. Continental Am. Ins. Co., 989 F.2d 1154, 1163 (11th Cir. 1993) (Rule 37(a) sanctions may be imposed when responses to interrogatories were filed after motion to compel filed and hearing set); Stone Container Corp. v. Owens-Illinois, Inc., 528 F. Supp. 794, 797 (N.D. Ga. 1981) (although sanctions not imposed, court held "an adequate response [to interrogatories], forthcoming only after motion to compel has been filed, does not necessarily prevent the award of fees and expenses"); Buolos v. Cato, 11 Fed. R. Serv. 3d 491, 1988 WL 70292 (S.D.N.Y. 1988) ("Whether or not defendants complied in part with plaintiff's requests after plaintiffs brought their motion [to compel] in no way relieves defendants of the consequences imposed by Rule 37(a)(4)"); Bodie v. Maritime Overseas Corp., 30 Fed. R. Serv. 2d 1284, 1980 WL 324434 (S.D. Ala. 1980) ($40 sanctions imposed even though interrogatory answers were only two weeks late).
The court therefore concludes that the Yap defendants' tardy response to Pt. Alorinda's interrogatories has not relieved them of the consequences of Rule 37(a)(4).
2. Expenses and Attorney's Fees
The court has thus just determined that there was not only a "failure to answer" interrogatories under oath due to incomplete replies, but also that answering interrogatories after a motion to compel their answer has been filed does not preclude sanctions. The motion to compel discovery is accordingly granted. If a motion to compel discovery
is granted, the court shall, after opportunity for hearing, require the party . . . whose conduct necessitated the motion or the party, attorney, or trial counselor advising such conduct or both of them to pay to the moving party the reasonable expenses incurred in obtaining the order, including attorney or trial counselor fees, unless the court finds that the opposition to the motion was substantially justified or that other circumstances make an award of expenses unjust.
FSM Civ. R. 37(a)(4). Yap argues that even if Rule 37 sanctions can be imposed for the tardy responses, Yap cannot be required to pay any of those sanctions that include attorney's fees. Yap contends that, based on 31 Y.S.C. § 108, it cannot pay another party's attorney's fees under any circumstances because not only has Yap not waived its sovereign immunity in regard to claims for attorney's fees, but also because it is statutorily barred from paying attorney’s fees for another party. In support, Yap relies on a Yap state statute, 31 Y.S.C. § 108, and on Pezold, Richey, Caruso & Barker v. Cherokee Nation Industries Inc., 18 P.3d 364 (Okla. Civ. App. 2001).
The Yap statute provides that, "[n]o attorney or trial counselor representing a party against the State or public entity shall charge, demand, receive or collect attorney's fees from the State or public entity." 31 Y.S.C. § 108(a). It also provides that, in suits against Yap, counsel cannot, unless a court orders otherwise, "charge, demand, receive or collect" fees higher than 30% of "any judgment rendered or any award, compromise, or settlement." 31 Y.S.C. § 108(b). Criminal penalties of a fine up to $2,000, or imprisonment for not more than one year, or both can be imposed for an attorney's violation of these provisions. 31 Y.S.C. § 108(c).
These provisions are clearly intended to protect both the people who, under the Yap Constitution and statute, have a right to sue Yap for redress and compensation, see 31 Y.S.C. § 102,4 and Yap from unscrupulous or avaricious attorneys. Section 108 punishes double-dealing attorneys – those who are simultaneously receiving compensation from Yap and from a party suing Yap,5 and attorneys overcharging their clients, thus reducing an injured party's recovery. It does not apply to the current situation.
Furthermore, Yap would not be paying Pt. Alorinda's attorney's fees. A sanction award, even when calculated by determining a party's reasonable attorney's fees, is not the payment of that attorney's fees or a payment of fees to that attorney. An attorney fee award is not an award to an attorney because a fee award is the client's, not the attorney's. See Sandy v. Mori, 17 FSM R. 92, 96-97 (Chk. 2010); Bank of the FSM v. Truk Trading Co., 16 FSM R. 467, 471 (Chk. 2009).6
The Oklahoma case that Yap also relies on, Pezold, Richey, Caruso & Barker v. Cherokee Nation Indus. Inc., 18 P.3d 364 (Okla. Civ. App. 2001), offers it no support. In Pezold, a law firm that formerly represented a sovereign Indian nation sued that Indian tribe in an Oklahoma state court and, after that breach of contract case was dismissed for lack of subject-matter jurisdiction because of the tribe's sovereign immunity, the law firm obtained an award for discovery abuse that had occurred in the court. Id. at 365. That award was reversed on appeal because the state court had no inherent power to impose sanctions in a case in which it had no subject-matter jurisdiction whatsoever. Id. at 366.
That is not the case here. Yap does not contend, and the court cannot see any ground for contending, that the court lacks subject-matter jurisdiction. The court has jurisdiction over this case. It therefore also has the power to impose sanctions for discovery misconduct by any party to this case.
Pt. Alorinda asks that the court set a bond amount for the barge so that it can post a security bond and obtain the release of its barge. Yap does not dispute Pt. Alorinda's right to have a bond set or that the barge should be released once the designated bond has been paid into court. It does dispute the bond's amount.
It is undisputed that if the derelict barge had not been secured and taken under tow to Colonia harbor and docked there, it would have run aground on, and thereby damaged, the Yap fringing reef. Yap seeks a salvage award based on 19 F.S.M.C. 920, which allows "special compensation" to be paid to "a salvor who has carried out salvage operations on a vessel which . . . threatened damage to the environment in the waters of the Federated States of Micronesia . . . ." 19 F.S.M.C. 920(1). Under Section 920, a salvor is entitled to an award for its "out-of-pocket expenses reasonably incurred by the salvor in the salvage operation and a fair rate for equipment and personnel actually and reasonably used in the salvage operation . . . ." 19 F.S.M.C. 920(3). When "the salvor by his salvage operations has prevented or minimized damage to the environment, the special compensation payable by the owner to the salvor . . . may be increased up to a maximum of 30% of the actual, audited expenses incurred by the salvor." 19 F.S.M.C. 920(2).
Yap's "actual, audited expenses" are not now before the court. Pt. Alorinda is currently trying to obtain them through discovery and Yap now appears to be cooperating in this regard. Pt. Alorinda contends that, from what it has seen, $50,000 would be more than adequate to cover any possible salvage award. Yap asserts that that amount is grossly insufficient. It asserts that it has a maritime lien on the barge and that its claim under the maritime lien exceeds the barge's current $350,000 value. Yap's claim includes an astonishingly high figure for depreciation in value of a vessel that was engaged in the sixteen-hour operation that secured the barge and towed it into Colonia Harbor and docked it there. Yap's claim also includes, according to counsel's representation during the hearing, about $125,000 in docking fees for the barge since it was docked in Colonia. Nonetheless, Yap, recognizing that a bond for the barge cannot exceed the barge's actual value, is willing to accept a $350,000 bond.7
The court will disregard Yap's depreciation claim since salvage awards are based on "actual . . . expenses," 19 F.S.M.C. 920(2), and depreciation is not an actual expense. The court, however, will not, at this time, decide whether, and to what extent, docking fees are expenses that may be included in a salvage award.
A generous calculation of the largest salvage award possible under 19 F.S.M.C. 919 and 920 and a (probably exceedingly) generous estimate of the largest possible expense amount, including the docking fees and the 30% maximum environmental protection bonus, led the court, in a July 20, 2017 order, to set the bond amount at $227,500.8 Therefore the barge, the Alorinda 251, shall be released to the custody of the plaintiff, Pt. Alorinda Shipping, upon deposit in the court's registry of a $227,500 bond. If the plaintiff deposits a bond in the form of cash, the clerk shall place that money in an interest-bearing account of its own to abide the court's order about its disposition.
Accordingly, the barge Alorinda 251's bond amount was set at $227,500, and Pt. Alorinda Shipping is granted an order requiring the Yap defendants to respond in full, and under oath, to Pt. Alorinda Shipping's interrogatories within twenty-one days of entry of this order. Pt. Alorinda Shipping may, no later than August 4, 2017, file and serve its request for expenses including reasonable attorney's fees, and the Yap defendants shall have until August 14, 2017, to respond.
________________________Footnotes:
1 The court, on April 23, 2017, granted the motion to accept the late filing of the motion response.
2 This deficiency could cause Pt. Alorinda some difficulty if it, as it seems it may intend to, tries to use the interrogatory answers for support to some future summary judgment motion.
3 The court gleans from Pt. Alorinda's later filings, that the Yap defendants have managed to provide more discovery materials to Pt. Alorinda, and might thus have, in Pt. Alorinda's eyes, become more cooperative.
4 31 Y.S.C. § 102 sets forth Yap's policy behind its waiver of its sovereign immunity. A Rule 37(a)(4) sanction award is consistent with the § 102 statement of policy.
5 For example, an assistant attorney general also representing a party with a Title 31 claim against Yap or one of its public agencies, or an attorney representing a party with a claim against Yap, while simultaneously under contract to work for a state agency.
6 The court notes that in this case's unusual posture, any sanction award to the plaintiff would be set off against a judgment amount in Yaps favor and Yap has specifically extended its sovereign immunity waiver to set-offs. See 31 Y.S.C. § 105. But even without this waiver, the court still has the power to regulate and control the litigation and the litigants before it, and this includes the power to impose sanctions, however calculated, on the parties legitimately before it.
7 See, e.g., FSM Mar. R. E(6)(a) ("but the principal sum [of the bond] shall in no event exceed (i) twice the amount of the plaintiff's claim or (ii) the value of the property on due appraisement, whichever is smaller").
8 Here, the court may have leaned on the side of caution to make sure that there would be no likelihood that any possible salvage award would exceed the bond amount.
* * * *