FSM 4 Intrm. 017-031

In a nation constitutionally committed to attempt to provide legal services for its citizens, the mere fact that an attorney had previously sued the state, without any suggestion that actions taken were frivolous, vexatious, or for purposes of harassment, can not be viewed as reasonable grounds for denying the attorney the opportunity to practice law in that state. Carlos v. FSM, 4 FSM Intrm. 17, 24 (App. 1989).

In reviewing the statutory interpretation of an agency authorized to implement the particular statute, the court should not defer but is under an affirmative duty to make its own determination as to the meaning of the statute when there is no indication that Congress intended the court to defer, when no particular scientific or other expertise is required for administration of the Act, and when the interpretation does not involve mere routine operating decisions, but instead represents a fundamental policy decision having constitutional implications. Carlos v. FSM, 4 FSM Intrm. 17, 25 (App. 1989).

Since Congress used the Trust Territory Investment Act as the overall model in drafting the FSM Foreign Investment Act and adopted language similar to that employed in the Trust Territory statute for describing the activities to be covered in the FSM law, analysis of the new Act must begin with a presumption that Congress intended that the FSM Foreign Investment Act would regulate essentially the same activities as those covered by the Trust Territory Investment Act.Carlos v. FSM, 4 FSM Intrm. 17, 26 (App. 1989).

The Constitution places control over admission of attorneys to practice before the national courts, and regulation of the professional conduct of the attorneys, in the Chief Justice, as the chief administrator of the national judiciary. Carlos v. FSM, 4 FSM Intrm. 17, 27 (App. 1989).

Based on the language and legislative history of the FSM Foreign Investment Act, 32 F.S.M.C. 201-232, and on that law's similarity to its Trust Territory predecessor, there is no indication that Congress intended the Foreign Investment Act to apply to the provision of legal services. Carlos v. FSM, 4 FSM Intrm. 17, 28-29 (App. 1989).

Primary responsibility, perhaps even sole responsibility, for affirmative implementation of the Professional Services Clause, FSM Const. art XIII, § 1, must lie with Congress. Carlos v. FSM, 4 FSM Intrm. 17, 29 (App. 1989).

The Professional Services Clause of the Constitution demands that when any part of the national government contemplates action that may be anticipated to affect the availability of education, health care or legal services, the national officials involved must consider the right of the people to such services and make a reasonable effort to take "every step reasonable and necessary" to avoid unnecessarily reducing the availability of the services. Carlos v. FSM, 4 FSM Intrm. 17, 30 (App. 1989).

Since Congress did not give any consideration to, or make any mention of, the services enumerated in article XIII, section 1 of the FSM Constitution in enacting the Foreign Investment Act, 32 F.S.M.C. 201-232, the avoidance of potential conflict with the Constitution calls for the conclusion that Congress did not intend the Foreign Investment Act to apply to noncitizen attorneys or to any other persons who provide services of the kind described in article XIII, section 1 of the Constitution .Carlos v. FSM, 4 FSM Intrm. 17, 30 (App. 1989).

The primary issue raised by this consolidated appeal is whether the FSM Foreign Investment Act, 32 F.S.M.C. §§ 201-232, gives the national Secretary of the Department of Resources and Development authority to deny the opportunity to practice law to noncitizen attorneys in areas where they have been admitted to practice by national or state judiciaries within the Federated States of Micronesia.

Numerous constitutional and statutory issues have been raised as grounds for setting aside the actions of the Secretary in denying the applications of appellants, attorneys Fredrick L. Ramp and R. Barrie Michelsen, for a national foreign investment business permit covering Truk, and attorney Mariano W. Carlos, for a permit authorizing him to practice law in Yap. We have

concluded that most of those issues need not be addressed in order to resolve this case. Instead, the Court has determined that the pertinent provision in the FSM Foreign Investment Regulations, Part 2.1(g) X (Dec. 1986), requiring noncitizen attorneys to obtain foreign investment permits, is beyond the authority granted to the Secretary of Resources and Development by the FSM Foreign Investment Act, 32 F.S.M.C. §§ 201-232, and is therefore invalid.

The regulation purports to extend general foreign investment coverage beyond its traditional range, to those who provide the kinds of professional services identified in article XIII, section 1 of the Constitution of the Federated States of Micronesia. That section of the Constitution commits the national government to "take every step reasonable and necessary" to provide education, health care and legal services to the people of the Federated States of Micronesia. The Secretary's interpretation of the Act as reaching those professional services is unacceptable because there is no showing that article XIII, section 1 was taken into consideration either by Congress in enacting the Foreign Investment Act or by the Secretary in adopting the regulation.

Appellant Mariano Carlos resides in the Republic of Palau. He is a citizen of the Trust Territory of the Pacific Islands, which formerly included the Federated States of Micronesia. Mr. Carlos was certified to practice law as an attorney before the FSM Supreme Court on November 21, 1981, and began practicing law in Yap about that time. The personal financial statement filed by Mr. Carlos with the Secretary shows an office address in Yap and annual rental expenses, and he apparently has been maintaining a law office in Yap.

Because Mr. Carlos was a citizen of the Trust Territory of the Pacific Islands, which at that time included Yap and the entire area that is now the Federated States of Micronesia, nobody suggested originally that there was any need for him to obtain a foreign investment permit. However, after November 3, 1986, when the United States and United Nations Trusteeship Agreement for the Former Japanese Mandated Islands was declared terminated as to the Federated States of Micronesia by President Nakayama of the Federated States of Micronesia and by President Reagan of the United States, an amendment to the FSM Foreign Investment Act brought Trust Territory citizens within the Act's coverage. 1

by the FSM Department of Resources and Development on November 2, 1987. 2 It was then forwarded to the office of the Governor of Yap for comment. On February 23, 1988, Governor Petrus Tun wrote to Secretary Actouka recommending against approval of the application.

Some of Governor Tun's charges merely relate to the quality of responses by Mr. Carlos in filling out the form and do not merit discussion here. The letter also made several serious charges against Mr. Carlos which now appear unwarranted. For example, there was a claim that Mr. Carlos was "under investigation for violations of various FSM and state laws." It now appears that the state had been incorrect in telling national officials that Mr. Carlos had not been paying FSM gross revenue taxes. The letter also erroneously asserts that Mr. Carlos had not obtained a Yap State business license.

The State and its traditional leaders see most non-citizen attorneys practicing law in Yap interfering a great deal with the traditional methods of resolving disputes. This has also contributed to social disorder in Yap State. The adversarial nature of the system dwelled upon by some noncitizen lawyers are in many ways contrary to the customs and traditions in Yap.

Consequently, it will not be in the best interest of the State and its people to add to the problem, especially at a time when the State and its traditional leaders and traditional concepts of resolving disputes as suitable to Yap's small and unique community.

No action was taken by the Secretary upon receipt of the February 23rd letter. Mr. Carlos did not receive a copy of the letter from either Governor Tun or from the Secretary, and never learned of its existence until after he filed his appellant's brief in this appeal. Eventually, on April 4, 1988, Mr. Carlos wrote to the department requesting information about his application.

By letter dated April 21, 1988, Secretary Actouka responded, advising Mr. Carlos that Yap State authorities had recommended against approval of his application "for a FSM Foreign Investment Permit to practice law" and that this disapproval was binding because his request had related only to Yap State. See 32 F.S.M.C. § 213. Mr. Carlos filed a timely appeal from that decision with the trial division of the FSM Supreme Court in Yap.

The law firm which is now Ramp and Michelsen was established in 1984, and received an FSM foreign investment permit to do business at that time. On April 6, 1988, the office of the Secretary of the FSM Department of Resources and Development received the firm's application for a permit renewal requesting authority to conduct business in all four states of the Federated States of Micronesia.

Although communications by the Secretary to state officials are not included within the record submitted to this Court, it is apparent that at least Pohnpei and Truk were asked to comment. By letter dated May 16, 1988, Governor Resio Moses of Pohnpei wrote to Secretary Actouka fully endorsing renewal based upon the firm's "past assistance to its legal clients" and its "good performance." On May 17, Governor Gideon Doone of Truk requested more time to make his comments, saying he was awaiting "final recommendation of the state foreign investment board." Three months later, on August 18, 1988, he wrote stating that he would "not support such application nor allow the granting of said firm to practice law in the State of Truk." The reason given was that "the Ramp and Michelsen Law Firm has done nothing to the State except to satisfy its selfish interest in actively involving itself in sueing [sic] the government of Truk State."

On October 10, 1988, the Secretary of Resources and Development issued a permit to the firm authorizing it to "engage in a full range of legal services" in Pohnpei, Yap, and Kosrae, but not in Truk. This appeal from the denial of permission to practice in Truk followed.

In analyzing the claims of the appellants, we have searched for the possibility that the FSM foreign investment regulations might have been intended to apply to lawyers not for the purpose of regulating them directly in their practice of law but only insofar as they engage in other kinds of business activities, such as renting buildings or office space, purchasing materials, storing supplies, operating equipment or hiring of employees.

Plainly however, there was no intent to limit the regulations to the ancillary business aspects of the professions. Instead, the regulations purport to give the Secretary of Resources and Development the power to regulate the professions themselves. It is the "providing of professional services as an attorney" that has triggered application of the regulations to the appellants. Foreign Investment Regs. Part 2.1(g)(x).

The August 18, 1988 letter of the Governor of Truk spoke of the Ramp and Michelsen firm's application as one for "continuing practicing law." The governor said he would not allow the firm to "practice law in the State of Truk."

Similarly, the February 23, 1988 letter of Yap Governor Tun complained exclusively of the activities of Mr. Carlos in practicing law, not of any other kind of business activity. The sole substantive complaint was that the professional conduct of "most non-citizen attorneys practicing law in Yap" interferes with traditional methods of resolving disputes.

The Secretary also understood himself to be determining whether the applicants would be permitted to engage in the practice of law. The permit issued to Ramp and Michelsen authorized the licensee "to engage in a full range of legal services including litigation; collections; land cases; domestic relations; employment disputes and general litigation." Further, in advising Mr. Carlos on April 21, 1988, that he would not receive a permit, Secretary Actouka wrote that "Yap State authorities have negatively recommended against approval of your application for a FSM Foreign Investment Permit to practice law in the State of Yap." (Emphasis added.)

The administrative interpretation of the Foreign Investment Act as applicable to providers of professional services, and the actions taken in pursuance of that interpretation, would inevitably reduce substantially the availability of legal services in the Federated States of Micronesia.

1. General effect - The Act requires noncitizens subject to its provisions to pay an application fee of $250; to provide considerable information about their proposed activities; and then to submit the proposal to regulation, and possible denial, by the Secretary of Resources and Development. Even if administered liberally, these requirements could discourage potential practitioners from attempting to provide legal services within the Federated States of Micronesia.

The inevitable negative impact has been compounded, however, by the manner in which the Act has been applied to attorneys, reflecting no understanding of the role of an attorney and no commitment whatever to assuring the availability of legal services in the Federated States of Micronesia.

In a nation trying to provide legal services for its people, a charge that a lawyer has provided this standard kind of legal service can hardly be viewed as reasonable grounds for denying the attorney the right to practice law.

Governor Tun's point was that "most noncitizen attorneys" are seen by Yap leaders as interfering with traditional methods of resolving disputes. The letter did not even say whether Mr. Carlos, who himself comes from a small atoll in the southwest islands of Palau, was guilty of such interference.

Yet the Secretary readily accepted these bare allegations as sufficient grounds for preventing the appellants from providing legal services in Truk and Yap. The Secretary did not give the attorneys an opportunity to respond nor did he himself in any way investigate the authenticity of the charges.

These administrative actions denying attorneys the opportunity to practice law in a state because the governor objects to being sued would have a profound and chilling effect upon the willingness of counsel throughout the FSM to represent citizens against powerful adversaries.

There are no residents of Truk who engage in full time private practice of law in Truk. This Court has adjusted its rulings concerning costs in an attempt to enhance the availability of legal services there. Ray v. Electrical Contracting Corp., 2 FSM Intrm. 21, 26 (App. 1985). Denial of this request of the Ramp and Michelsen firm would deprive the people of Truk of the services of the only private law firm that has shown a substantial interest in practicing law there on a significant and continuing basis.

The situation is similar in Yap. The Court takes judicial notice that the only private practitioner with an office in Yap, aside from Mr. Carlos, is affiliated with the Yap attorney general's office on a part time basis. If Mr. Carlos is denied the right to practice there, that could make it quite difficult, if not impossible, for citizens of Yap to obtain representation in their dealings with the state of Yap.

This is the second occasion upon which the Court has been asked to review administrative contentions that the FSM Foreign Investment Act requires a noncitizen lawyer to obtain a national foreign investment permit in order to engage in the private practice of law within the Federated States of Micronesia or any state.

In the first case, the Court's trial division held only that a noncitizen need not individually obtain a foreign investment permit before acquiring an interest in a business already operating within the Federated States of Micronesia under a national foreign investment permit. Michelsen v. FSM, 3 FSM Intrm. 416 (Pon. 1988). There was no necessity at that time for reviewing the administrative interpretation of the Foreign Investment Act as covering the practice of law. Here, however, that question must be addressed.

Courts sometimes defer to statutory interpretations of an agency authorized to implement the particular statute. Deference is appropriate when the statute says the courts should defer, or when it is clear from the general context that Congress intended that reliance be placed on the expertise of the administrators, or where the interpretation involves merely routine procedural details designed to implement policies spelled out in the statute. Olter v. National Election Commissioner, 3 FSM Intrm. 123, 133 (App. 1987).

None of these criteria apply to this administrative interpretation. Neither the Foreign Investment Act nor its legislative history contain any direct statement that Congress intended the Court to defer to interpretations of the administrators.Michelsen v. FSM, 3 FSM Intrm. at 421. It also does not appear that particular scientific, technological, or other expertise is required for administration of the act. Finally, and perhaps most importantly, this interpretation does not involve merely routine operating decisions, but instead represents a fundamental policy decision having constitutional implications because of its potential effect upon the availability of legal services in the Federated States of Micronesia. Accordingly, the Court may not simply accept the interpretation of the FSM Foreign Investment Board but instead is under a duty to make its own independent determination as to whether this administrative interpretation is in accordance with law.

The FSM Foreign Investment Act prohibits any noncitizen of the Federated States of Micronesia from engaging in any business within the Federated States of Micronesia without first obtaining a foreign investment permit. 32 F.S.M.C. § 203. "Business" is defined as "any sole proprietorship, partnership, corporation, or any other association engaged in commerce." 32 F.S.M.C. 202(1).

The regulations adopted in December, 1986, by the former FSM Foreign Investment Board and by the Secretary of Resources and Development interpret the term "engaged in commerce" as including "the providing of professional services as an attorney, physician, dentist...or other professional providing services for a fee." FSM Foreign Investment Regulations Part 2.1.(g)(x)(Dec. 1986).

The FSM Foreign Investment Act is the successor to, and modeled upon, the former Trust Territory Investment Act, which was codified at 33 T.T.C. 1 et seq. (1980). See Michelsen v. FSM, 3 FSM Intrm. at 421 n.4. Both Acts established five-person foreign investment boards, and required that non-citizen attorneys seeking to do business within those jurisdictions apply for a permit. The factors to be considered by both boards in deciding whether to grant a permit were nearly identical. Compare 33 T.T.C. 7(3)(a)-(g) (1980) and 32 F.S.M.C. 210(1)-(8). Each act also provided for different procedures depending on whether the proposed business would be limited to one location or would extend throughout the entire jurisdiction. See 32 F.S.M.C. §§ 206 and 213, and 33 T.T.C. § 8 (1980).

Moreover, the operative words for determining the kinds of activities within the reach of each act are similar. Both acts prohibit noncitizens from engaging in "business" without a permit. 32 F.S.M.C. 203, 33 T.T.C. 3. The Trust Territory Act contained no definition of business but included within its definition of "noncitizen", "any company, corporation, or association in which a person not a Trust Territory citizen...owns any interest". 33 T.T.C. 2(4). The Federated States of Micronesia statute employs similar language in defining business: "Business means any sole proprietorship, partnership, corporation, or any other association engaged in commerce". 32 F.S.M.C. 202(1).

When the statutory language is drawn from another jurisdiction, the presumption is that the borrowing legislature expects the new statute to have the same meaning as the original one. FSM v. Oliver, 3 FSM Intrm. 469, 478 (Pon. 1988). Andohn v. FSM, 1 FSM Intrm. 433, 441 (App. 1984). Here also, since Congress has used the Trust Territory Investment Act as the overall model for regulating foreign investment and has adopted language similar to that employed in the Trust Territory Act for describing the activities to be covered, analysis of the FSM Foreign Investment Act must begin with a presumption that Congress intended that the FSM Foreign Investment Act would regulate essentially the same activities that were within the scope of the Trust Territory Investment Act.

[The Trust Territory Foreign Investment Act] does not, and was not intended to, extend to attorneys at law inasmuch as Section 2(2) of Title 5 of the Trust Territory Code provides, in part, that the High Court may admit qualified persons as attorneys at law to practice in all the courts of the Trust Territory. Thus, it is this office's opinion that this section of Title 5 was intended to cover, in toto, any licensing requirements with respect to attorneys at law.

Further, it is this office's opinion that [the Act] does not apply to doctors, dentists or nurses who are non-Trust Territory citizens. As with attorneys, the Code has a separate provision, namely Section 152 of Title 63, which authorizes the Director of Health Services to establish standards for licensing of persons to practice medicine, surgery, dentistry and nursing.

The same types of overall regulatory schemes pointed to in the Trust Territory opinion apply in the Federated States of Micronesia today. The Medical Health Care Licensing Act of 1986 establishes the Federated States of Micronesia Medical Health Care Licensing Board, which is authorized to issue licenses to practice medical health care. 41 F.S.M.C. §§ 201-212 (1987 Supp.).

The Constitution places control over admission of attorneys to practice before the national courts, and regulation of the professional conduct of the attorneys, in the chief justice, as the chief administrator of the national judiciary. FSM Const. art. XI, § 9.

Thus, the same factors relied upon by the Trust Territory attorney general as showing that the Trust Territory Investment Act did not apply to legal or health care practitioners exist now in the Federated States of Micronesia. The implication from the similarity in structure of the two acts, and the similar contexts covering regulation of lawyers and doctors, is that the FSM Foreign Investment Act was not intended by Congress to apply to legal or health care practitioners. 4

A careful review of the legislative history of the FSM Foreign Investment Act reveals no intention of any member of Congress to extend the breadth of the FSM foreign investment law from that of its Trust Territory predecessor. See SCREP No. 1-301, J. of 1st Cong., 4th Reg. Sess. 167-69 (1980); J. of 1st Cong., 4th Reg. Sess. 213-15, 304; SCREP No. 2-3, J. of 2nd Cong., 1st Reg. Sess. 174 (1981); and J. of 2nd Cong., 1st Reg. Sess. 69-73, 101-06, 141-44.

The only language which might conceivably be pointed to as revealing congressional intent to depart from the Trust Territory model concerning scope of coverage is the insertion of the words "engaged in commerce" in the definition of business. 32 F.S.M.C. 202(1). Indeed, it is these words which the regulations invoke as embracing the "providing of professional services...for a fee." 5 Foreign Investment Regs. Part 2.1(g) X. However, there is no apparent basis for this administrative view that the phrase "engaged in commerce" represents a congressional intention to expand the scope of investment regulation to reach professional activities. One may search in vain through standard English language dictionaries for a hint that the words "engaged in commerce" have broader application than the undefined term "business," which was used in the Trust Territory Investment Act to identify the activities covered by that statute. There simply is no indication in the FSM Foreign Investment Act or in the legislative history that Congress

Beyond these principles of statutory construction and the implications of legislative history, constitutional considerations caution against reading the FSM Foreign Investment Act as applying to attorneys, medical practitioners or educators. The Constitution says, "The national government of the Federated States of Micronesia recognizes the right of the people to education, health care, and legal services and shall take every step reasonable and necessary to provide these services." FSM Const. art. XIII, § 1.

The precise meaning of this section is far from clear. The Journal of the Micronesian Constitutional Convention of 1975 indicates that many members of the convention viewed the provision as a commitment by the national government directly to provide education, health care, and legal services. In recommending the provision, the convention's Committee on Civil Liberties stated that it wished to "establish a national policy of providing the services contained in this proposal as the new nation acquires the revenue necessary to implement this policy." SCREP No. 52, II J. of Micro. Con. Con. 881, 882.

However, the committee acknowledged that it would be impossible to provide all of such services that might conceivably be available and understood that it would fall primarily to the legislature to determine how to implement the provision. "Inevitably, some services will be provided before others, with the priority to be determined by the national legislature." Id. at 882. To date, nobody has presented to this Court, nor apparently to the Congress, a contention that Congress is bound in all circumstances to provide all education, health care or legal services that might be desirable to a person. Obviously, a great deal of discretion must be exercised in affirmatively implementing this provision. There can be no question that primary, perhaps even sole, responsibility for affirmative implementation of that provision must lie with the Congress. 6

In this case, however, we are not being asked to review affirmative governmental action aimed at enhancing availability of the professional services referred to in article XIII, section 1. Instead, we are presented with an executive branch interpretation of the Foreign Investment Act which threatens to reduce availability of article XIII, section 1 services.

94 (Kos. 1985). This is especially so when the document under consideration is a national constitution. Tammow v. FSM, 2 FSM Intrm. 53, 57 (App. 1985). Leaving aside for now the question of whether article XIII, section 1 places on the national government any affirmative obligation to create or expand the availability of the services mentioned, we conclude that the provision at a minimum demands that Congress and other parts of the national government, including this Court, give special consideration to these services and assure that their availability is not unreasonably or unnecessarily diminished by any action taken by the national government.

We conclude specifically that when any part of the national government contemplates action that may be anticipated to affect the availability of education, health care or legal services, the Constitution demands that the national officials involved must consider the right of the people to such services and make a reasonable effort to take "every step reasonable and necessary" to avoid unnecessarily infringing upon that right or reducing the availability of the article XIII, section 1 services.

We proceed now to apply those principles to the case at hand. As the Constitutional Convention's Committee on Civil Liberties recognized, Congress must play the principal role in determining how the national government will implement this provision and has broad discretion in making that determination.

Yet, as already pointed out, there is no indication that Congress gave any thought whatever to the FSM Foreign Investment Act having any impact upon the availability of education, health care, and legal services. There is no mention in the legislation itself, or in the legislative history, of education, health care or legal services, nor is there reference to article XIII, section 1 of the Constitution.

If, without any mention ofarticle XIII, section 1, and with no effort to respond to the policies embodied there, Congress were to enact legislation explicitly authorizing administrative action which would discourage or hinder provision of article XIII, section 1 services, this would pose troubling constitutional issues. However, courts should interpret statutes so as to avoid raising constitutional issues. In re Otokichy, 1 FSM Intrm. 183, 190 (App. 1982). If a statute is ambiguous and one interpretation would place the statute into possible conflict with the Constitution, but a second reasonable interpretation would avoid the potential conflict, the Court should adopt the second interpretation. Ishizawa v. Pohnpei, 2 FSM Intrm. 67, 76 (Pon. 1985).

Here, since Congress did not give any consideration to, or make any mention of, article XIII, section 1 services in enacting the Foreign Investment Act, this principle of constitutional interpretation calls for the conclusion that Congress did not intend for the Foreign Investment Act to apply to noncitizen attorneys or any other persons who provide services of the kind described in article XIII, section 1 of the Constitution.

of the Federated States of Micronesia. As the Governor of Yap pointed out in his letter to Secretary Actouka, the adversarial system itself may sometimes undermine more appropriate traditional dispute resolution procedures. Similarly, reliance on medicines and medical knowledge produced elsewhere may undermine the self-reliance of the people of Micronesia, erode their confidence in trusted and skilled local practitioners of medicine, and tend to encourage citizens here to look to the outside, rather than to their own resources and those of Micronesia, as the primary source of physical well-being. Education which merely emphasizes the knowledge and values of other social systems may cause young people here to become fascinated with "outside" ideas and to lose interest in developing the traditional skills which their elders know are necessary for life in Micronesia.

Although the framers of the Constitution presumably were aware that these services can be something other than an unmixed blessing, article XIII, section 1 of the Constitution represents a national commitment to the encouragement, not discouragement, of such services. This does not deprive the national government of its ability to regulate article XIII, section 1 services. The government retains the necessary power reasonably to protect the people and cultures of the Federated States of Micronesia from the incompetent or destructive application of these services, and to try to guard against the harmful aspects of the services themselves. At a minimum the judicial guidance clause of the Constitution makes this clear. FSM Const. art XI, § 11. The professional services provision of the Constitution merely requires that actions of the national government reflect a commitment to the availability of these services in the Federated States of Micronesia. Clearly, however, actions likely to diminish substantially the availability of such services taken without prior consideration of that impact, are prohibited.

The FSM Foreign Investment Act has no application to the appellants, or their actions related to the practice of law in the Federated States of Micronesia. The Secretary's denials of their right to practice are void and of no effect. The appellants remain entitled to practice law in the Federated States of Micronesia pursuant to any authorization they have received from any judiciaries, state or national, within the Federated States of Micronesia.

1. Prior to termination of the trusteeship, "noncitizen" was defined in the FSM Foreign Investment Act as "any person who is not a Trust Territory citizen." 32 F.S.M.C. 202(4)(a) (1982 ed.). However, effective January 1, 1988, the definition was amended to mean "any person who is not a citizen of the Federated States of Micronesia." Pub. L. No. 5-21, § 4 (5th Cong., 2d Reg. Sess. 1987).

2. The Act in its original form was administered by a foreign investment board, with the assistance of the Secretary of the Department of Resources and Development. 32 F.S.M.C. 228 (1982). Subsequently, the three provisions providing for establishment of the Board, 32 F.S.M.C. §§ 206-208, were repealed, and the Secretary of Resources and Development became administrator. Pub. L. No. 5-21, § 14 (5th Cong., 2d Reg. Sess. 1987).

3. The objection was not about the kinds of lawsuits brought (e.g., that substantive claims brought were frivolous or factual assertions groundless), the style in which they were conducted (e.g., that delaying and other vexatious tactics were employed to wear down the opposition), or their underlying purpose (e.g. , brought only to harass the opponent). The record suggests that neither the governor nor the secretary was distinguishing between acceptable and unacceptable forms of litigation.

4. That Congress would distinguish the practice of law from other businesses and investments being subjected to general statutory regulation and would insulate the practice of law from supervision by officials outside the judiciary, is consistent with well-established governmental principles of separation of powers and judicial administration. Traditionally, control over attorney admissions and disciplinary matters is a judicial function, an inherent power of the courts. See Application of Kaufman, 206 P.2d 528 (Ida. 1949): Denver Bar Association v. Public Utilities Commissions, 391 P.2d 467 (Colo. 1964). As far back as 1292 A.D., when King Edward I of England established the Court of Common Pleas, and placed in the chief justice the power to determine who could serve as advocates before that court, determinations as to who is eligible to practice law have been regarded as within the province of judiciaries. Annot., 144 A.L.R. 150, 157 (1943).

Legislative efforts to delegate control over the practice of law to nonjudicial officials regularly have been held invalid. Harlen v. City of Helena, 676 P.2d 191 (Mont. 1984)(ordinances requiring attorneys to acquire business licenses, although perhaps enacted merely to raise revenue or to protect the public, nonetheless condition an attorney's right to practice law upon adherence to such ordinances and constitute an undue intrusion upon the judiciary's authority); Archer v. Ogden, 600 P.2d 1223 (Okla. 1979) (legislature may not require nonresident attorneys licensed in Oklahoma to associate with local counsel); Kyle v. Beco Corp., 707 P.2d 378, 383 (Ida. 1985)("The legislature could not have delegated to the Industrial Commission the power - which the legislature itself lacks - to allow laypersons to represent parties who appear in adjudicative proceedings."). (Back to opinion)

5. United States courts have held that attorneys in the private practice of law may be said to be engaged in commerce. Goldfarb v. Virginia State Bar, 421 U.S. 773, 787, 95 S. Ct. 2004, 2012, 44 L. Ed. 2d 572, 585 (1975). Of course, the sale of legal services for a fee also literally comes within the term "business." Yet, under the Trust Territory Act that word was not held to reach the practice of law or medicine.

6. The Pohnpei Supreme Court has held that a similar provision in the Pohnpei Constitution is merely a statement of general policy, is not self-executing, and does not vest individuals with legal rights that they may assert in the courts. Panuelo v. Pohnpei, 3 FSM Intrm. 76, 82 (Pon. S. Ct. App. 1987).