THE SUPREME COURT OF THE
FEDERATED STATES OF MICRONESIA
 TRIAL DIVISION
Cite as FSM v. Ting Hong Oceanic Enterprises ,
8 FSM Intrm. 79 (Pon. 1997)

[8 FSM Intrm. 79]

THE FEDERATED STATES OF MICRONESIA,
Plaintiff,
 
vs.

TING HONG OCEANIC ENTERPRISES CO., LTD.,
Defendant
 
CIVIL ACTION NO. 1995-147

ORDER GRANTING MOTION FOR SUMMARY JUDGMENT

Andon L. Amaraich
Chief Justice

Hearing:  May 17, 1996
Decided:  June 9, 1997

APPEARANCES:
For the Plaintiff:          Carole Rafferty, Esq.
                       Assistant Attorney General
                       Office of the FSM Attorney General
                       P.O. Box PS-105
                       Palikir, Pohnpei FM 96941

For the Defendant:     Douglas Parkinson, Esq.
                       Law Offices of R. Barrie Michelsen
                       P.O. Box 1450
                       Kolonia, Pohnpei FM 96941

*    *    *    *

HEADNOTES
Civil Procedure ) Summary Judgment
     A motion for summary judgment shall be granted if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law.  FSM v. Ting Hong Oceanic Enterprises, 8 FSM Intrm. 79, 81 (Pon. 1997).

Civil Procedure ) Summary Judgment
     Once the party moving for summary judgment presents a prima facia case of entitlement to summary judgment, the burden shifts to the non-moving party to produce evidence showing that a genuine issue of material fact remains for resolution.  The non-moving party may not rely on unsubstantiated denials of liability to carry its burden.  It must present some competent evidence that would be admissible at trial to demonstrate that there is a genuine issue of fact, and that there is enough evidence supporting its position to justify a decision upholding its claim by a reasonable trier

[8 FSM Intrm. 80]

of fact.  FSM v. Ting Hong Oceanic Enterprises, 8 FSM Intrm. 79, 82 (Pon. 1997).

Fishing
     Section 404 of Title 24 sets forth certain minimum terms that all foreign fishing agreements must contain.  FSM v. Ting Hong Oceanic Enterprises, 8 FSM Intrm. 79, 84 (Pon. 1997).

Contracts ) Interpretation
     Contracts are not interpreted on the basis of subjective uncommunicated views, or secret hopes of one of the parties, but on an objective basis.  FSM v. Ting Hong Oceanic Enterprises, 8 FSM Intrm. 79, 86 (Pon. 1997).

Fishing
     A party's failure to "ensure" its vessel's compliance with FSM law constitutes a breach of its foreign fishing agreement.  FSM v. Ting Hong Oceanic Enterprises, 8 FSM Intrm. 79, 86 (Pon. 1997).

Contracts ) Indemnification; Fishing
     A contract between a foreign fishing agreement party and the owner of vessels permitted under that agreement that the vessels' owner will be responsible for criminal and civil charges for fishing violations merely provides the foreign fishing agreement party with a contractual right of indemnity against the vessels' owner and does not bar the government's imposition of penalties for fishing agreement violations on the foreign fishing agreement party.  FSM v. Ting Hong Oceanic Enterprises, 8 FSM Intrm. 79, 89 (Pon. 1997).

Fishing; Statutes ) Construction
     When the fishing statute sets forth a list of prohibited acts in the disjunctive, commission of any one of the listed acts is unlawful, and the government may pursue separate civil penalties for each.  FSM v. Ting Hong Oceanic Enterprises, 8 FSM Intrm. 79, 90 (Pon. 1997).

Agency
     When a fishing boat captain knows that he has caught fish and retained possession of fish while he had not maintained the required daily catch log in English that knowledge is attributable, under agency law principles, to the foreign fishing agreement party through which the boat was authorized.  FSM v. Ting Hong Oceanic Enterprises, 8 FSM Intrm. 79, 91 (Pon. 1997).

Agency
     A principal is bound by, and liable for, the acts of its agent done with or within the actual or apparent authority from the principal and within the scope of the agent's employment.  Agency relationships are based upon consent by one person that another shall act in his behalf and be subject to his control.  FSM v. Ting Hong Oceanic Enterprises, 8 FSM Intrm. 79, 91-92 (Pon. 1997).

Administrative Law; Fishing
     While MMA is authorized to issue, deny, cancel, suspend or impose restrictions on FSM fishing permits for fishing law violations, this is not the government's exclusive remedy because the FSM Attorney General is separately authorized to enforce violations of the foreign fishing agreement, Title 24 or the permit through court proceedings for civil and criminal penalties and forfeitures.  FSM v. Ting Hong Oceanic Enterprises, 8 FSM Intrm. 79, 92-93 (Pon. 1997).

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[8 FSM Intrm. 81]

COURT'S OPINION
ANDON L. AMARAICH, Chief Justice:

INTRODUCTION
     This case comes before the Court on the parties' cross-motions for summary judgment.

     Plaintiff alleges that the Zhong Yuan Yu No. 907, a foreign fishing vessel, has violated the conditions of its FSM fishing permit and applicable FSM law.  Based on these violations, plaintiff seeks civil penalties under Title 24 against Defendant Ting Hong, the signatory to the Foreign Fishing Agreement with the Micronesian Maritime Authority under which the Zhong Yuan Yu No. 907 received its permit to conduct fishing operations in the FSM.  Plaintiff argues that Ting Hong agreed to ensure that all of its permitted fishing vessels would comply with the conditions of their fishing permits and with FSM law, under its agreement with the Micronesian Maritime Authority.  Based on Ting Hong's alleged breach of the terms of that agreement, plaintiff asks the Court to find Ting Hong directly liable for the vessel's violations under Title 24.

     Defendant argues that it cannot be held directly liable as a matter of law, and seeks summary judgment in its own favor.

     For the reasons set out below, the Court grants summary judgment in favor of plaintiff.

BACKGROUND
     Ting Hong entered into a Foreign Fishing Agreement (the "Agreement") with Micronesian Maritime Authority ("MMA") on April 16, 1994.  Pursuant to that Agreement, MMA issued a foreign fishing permit (the "Permit") to the Zhong Yuan Yu No. 907 (the "No. 907").  Under the terms of the Agreement, the conditions of the Permit, and 24 F.S.M.C. 116(1), the No. 907 was required to maintain daily catch logs in English and to make these logs available for inspection on demand by FSM authorized enforcement officials.

     On May 25, 1995, the No. 907 was engaged in fishing within the FSM Exclusive Economic Zone under its valid Permit when the FSM National Police boarded it for a routine inspection.  When the FSM enforcement officials asked the master of the No. 907 to produce the vessel's daily catch log in English, he was unable to do so.

     These essential facts are not in dispute.  However, the parties disagree as to whether Ting Hong, as the "foreign party" to the Agreement with MMA, can be held directly liable under Title 24 for the No. 907's admitted violation of 24 F.S.M.C. 116(1), and its consequent alleged violation of 24 F.S.M.C. 501(1)(l), which prohibits the knowing transportation, custody, control or possession of fish retained in violation of Title 24.

DISCUSSION
I.  Applicable Legal Standard
     Under FSM Civil Rule 56, a motion for summary judgment shall be granted "if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law." FSM Civ. R. 56(c); Kyowa Shipping Co. v. Wade, 7 FSM Intrm. 93, 95

[8 FSM Intrm. 82]

(Pon. 1995); Kihara Real Estate, Inc. v. Estate of Nanpei, 6 FSM Intrm. 48, 52 (Pon. 1993).  Once the party moving for summary judgment presents a prima facia case of entitlement to summary judgment, the burden shifts to the non-moving party to produce evidence showing that a genuine issue of material fact remains for resolution.  Urban v. Salvador, 7 FSM Intrm. 29, 31 (Pon. 1995); Kyowa Shipping Co., 7 FSM Intrm. at 95; FSM v. Ponape Builders Constr., Inc., 2 FSM Intrm. 48, 52 (Pon. 1985).  The non-moving party may not rely on unsubstantiated denials of liability to carry its burden.  Urban, 7 FSM Intrm. at 31.  It must present some competent evidence that would be admissible at trial to demonstrate that there is a genuine issue of fact, and that there is enough evidence supporting its position to justify a decision upholding its claim by a reasonable trier of fact.  Id.; Alik v. Kosrae Hotel Corp., 5 FSM Intrm. 294, 295 (Kos. 1992).

II.  Plaintiff's Arguments in Favor of Summary Judgment
     Plaintiff's complaint seeks civil penalties against Ting Hong directly for two separate violations of 24 F.S.M.C. 501(1)(a) and (c).  Plaintiff first alleges that Ting Hong is liable under section 501(1) for the No. 907's failure to maintain a daily catch record on board the vessel in English as required by 24 F.S.M.C. 116(1), the Agreement and the Permit.  Second, plaintiff alleges that defendant is also liable under that section for the vessel's having custody, control or possession of fish retained on the vessel in violation of 24 F.S.M.C. 501(1)(l), the Agreement, and/or the Permit.  Compl. paras. 11, 13; FSM Opp. to Cross-Motion and Reply to Motion for Summary Judgment (hereinafter "FSM Opp'n Br.") at 3 & n.1.1

     Plaintiff asserts that in entering into the Agreement and obtaining a permit for the No. 907, Ting Hong undertook to "ensure" that the No. 907, as an "Authorized Vessel" under the Agreement, complied with the terms of that Agreement and all applicable laws and regulations.  The No. 907 failed to maintain a catch log in English, in violation of 24 F.S.M.C. 116(1), and the conditions of its Permit.  Once the No. 907 was operating in violation of 24 F.S.M.C. 116(1), it was fishing illegally, and therefore all fish on board were retained in violation of 24 F.S.M.C. 501(1)(l), which prohibits the knowing custody, control or possession of fish retained in violation of Title 24, the Agreement, and/or the Permit.  Plaintiff argues that by failing to ensure the No. 907's compliance with applicable law, Ting Hong breached its Agreement with MMA.  Plaintiff contends that this contractual breach in turn resulted in Ting Hong's direct violation of 24 F.S.M.C. 501(1)(a) and 501(1)(c).2  These subsections provide that

it is unlawful for any person:

(a) to violate any provision of this title or of any regulation or permit issued pursuant to this title; . . . [or]

(c) to violate any provision of, or regulation under, an applicable domestic-based or foreign fishing agreement entered into pursuant to sections 401 and 404 through 406 of

[8 FSM Intrm. 83]

this title or any term or condition of any permit issued in accordance with this title and any regulations made under this title.

Id. (emphasis added).

     In support, plaintiff supplies a copy of the 1994 Foreign Fishing Agreement; a copy of the No. 907's Permit, issued on April 1, 1995; an Affidavit from Lola Wang, an employee of Ting Hong, dated September 30, 1994; excerpts from a direct examination of Ms. Wang in a prior criminal proceeding; an Affidavit from Eugene Pangelinan, Deputy Director and Acting Executive Director of MMA, dated April 18, 1996; a copy of an MMA Foreign Fishing Agreement Questionnaire which was provided to Ting Hong, together with Ting Hong's answers to that questionnaire; and a Supplemental Affidavit from Mr. Pangelinan, dated May 9, 1996.  Plaintiff argues that these documents establish that there is no genuine issue of fact with regard to Ting Hong's assumption of responsibility for the violations of its authorized vessels or to Ting Hong's liability for civil penalties. Consequently, plaintiff is entitled to judgment as a matter of law.

III.  Defendant's Arguments in Favor of Summary Judgment
     In response to plaintiff's motion for summary judgment, Defendant Ting Hong makes its own cross motion for summary judgment, based on the relevant statutory language and on the Agreement.

     First, Ting Hong urges the Court to find that although it undertook to ensure its authorized vessels' compliance with applicable law, the "shall ensure" language contained in paragraph 23 of the Agreement does not constitute a guarantee of compliance, or constitute an agreement to be financially or legally liable for violations caused by individual authorized vessels.  Rather, Ting Hong agreed to use "best efforts" to ensure the vessels' compliance.  See Ting Hong Opp'n Br. at 21.  To the extent the Court finds language of the Agreement to be ambiguous in this regard, defendant asks the Court to interpret that language in the context of the relationship between the parties.  Ting Hong argues that it did everything it could to ensure the No. 907's compliance with the relevant provisions of the Agreement, the Permit, and all applicable laws.  Therefore, it has not breached its Agreement with MMA.  Id. at 27.

     Second, Ting Hong contends that it cannot be held liable for a violation of 24 F.S.M.C. 116(1) because that section is not, by its terms, applicable to Ting Hong. Section 116(1) requires the vessel "master" to maintain the daily catch log in English.  Ting Hong argues that it cannot be held liable for the vessel master's failure to follow the law, when the vessel is in control of the means of compliance.3 It argues that if the Court accepts plaintiff's interpretation, Ting Hong would implicitly be required to place a representative or observer aboard each vessel licensed under the Agreement to "ensure" compliance.

     Third, Ting Hong asserts that civil penalties are not available against Ting Hong for breach of the Agreement; cancellation of the Agreement is MMA's sole recourse against Ting Hong for violations committed by authorized vessels.
 
     Fourth, and finally, Ting Hong argues that the government cannot seek separate penalties for

[8 FSM Intrm. 84]

violations of 24 F.S.M.C. 116(1) and 24 F.S.M.C. 501(1)(l), when the vessel committed only a single wrongful act ) failure to maintain a catch log in English. Id. at 29-32.  It also cannot be held liable under 24 F.S.M.C. 501(1)(l) even if the vessel did "knowingly" have custody, control or possession of fish retained in violation of Title 24, because the vessel's knowledge cannot be imputed to Ting Hong. Id. at 33-35.

     In support of its cross-motion for summary judgment, defendant presents an Affidavit from Johnson Chuang, Regional Manager for Ting Hong, and a Cooperation Agreement entered into by Ning-Bo Fishery Co., Ltd ("Ning-Bo") as the vessel's owner, and Ting Hong.  Ting Hong argues that these documents clearly show that the owner of the vessel or the vessel itself is liable for any civil penalties arising out of violations of applicable law, the Agreement or the Permit.

IV.  Applicable Law and the Foreign Fishing Agreement
     Section 404 of Title 24 sets forth certain minimum terms that all foreign fishing agreements entered into between MMA and foreign parties must contain:

Section 404.  Foreign fishing agreements - Terms.  All foreign fishing agreements shall have the following minimum terms:

*   *   *

     (2)  the foreign party or the owner or operator of any fishing vessel fishing, as appropriate, pursuant to such agreement shall:
 
          (a) comply with the requirements of this title, all regulations issued pursuant to this title and all other applicable laws and regulations;

*   *   *

     (3) foreign parties will:
 
     (a) apply . . . for any required permits;
 
     (b) deliver promptly to the owner or operator of the appropriate fishing vessel any permit which is issued under that section for such vessel; and
 
     (c) abide by the requirement that no foreign fishing will be permitted in the [EEZ] without a valid and applicable permit, except as provided by foreign fishing agreements concluded pursuant to this chapter, and that all conditions and restrictions of the permit, or any applicable foreign fishing agreement, are complied with.

(emphasis added).  Section 116(1) of Title 24 provides:

     (1)  The master of each foreign fishing vessel issued a permit or which is permitted to fish pursuant to a treaty or any agreement or arrangement referred to in section 106 shall at all times while the vessel is in the fishery waters, cause to be maintained in the English language a fishing log in a form supplied or approved by the Authority, and shall enter the following information relating to the activities of the vessel on a daily basis. . .

     The Foreign Fishing Agreement between MMA and Ting Hong (as "the Company") incorporates section 404's minimum terms, as well as section 116(1)'s reporting requirements:

   2.     The Company agrees to abide by all applicable laws, rules and regulations of the FSM

[8 FSM Intrm. 85]

and its States, including but not limited to, Titles 18 and 24 of the Code of the Federated States of Micronesia.  The Company agrees to comply with the Harmonized Minimum Terms and Conditions for Foreign Fishing Vessel Access . . . .

   3.     The Authority agrees to permit fishing only by the Company's longline fishing vessels in good standing . . . up to a maximum of two hundred seventy (270) vessels within the EEZ in accordance with provisions of this Agreement and all applicable laws . . . .

*   *   *

   10.     The Company shall complete and transmit to the Authority voyage catch reports in the form set forth in Appendix B in the English language . . . the Company and each Authorized Vessel Master shall ensure that all the records are accurate for the entire given trip.  The catch report shall be dispatched to the Authority within ten (10) days of the completion of a voyage.  Any Authorized Vessel which fails to submit its catch report in compliance with this paragraph shall pay a penalty fine of USD 250 to the Authority for each such failure.  The Company shall ensure that the requirements of this paragraph are met.  The Authority reserves the right to cancel issued permit(s) for non-compliance.

   11.     Each Authorized Vessel shall maintain a catch log in English on board the vessel and make such log available for inspection by officers authorized by the Authority.

*   *   *
 
   23.     The Company shall ensure that its Authorized Vessels comply with the provisions of this Agreement and all applicable laws and regulations.  If an Authorized Vessel engages in activities in contravention of this Agreement, Titles 18 or 24 of the Code of the Federated States of Micronesia or any other applicable law, rule or regulation of the Federated States of Micronesia or any of its States, the Authority may cancel or withdraw the permit . . . .

(emphasis added).  The No. 907's Permit then incorporates the terms of the Agreement by reference:

fishing operations shall be conducted in strict accordance with the Foreign Fishing Agreement under which this Permit was issued (including the Minimum Terms and Conditions for Access), and the laws and regulations of the Federated States of Micronesia and its States, including without limitation Titles 18, 19 and 24 of the Code of the FSM.

. . . The Approved Catch Report shall be maintained and shall be produced to an authorized inspector of the Federated States of Micronesia when required.

. . .  The vessel shall strictly comply with the Fishing Agreement and with the laws, rules, and regulations of the FSM and its States.  Failure to strictly comply may result in substantial fines and other civil and criminal penalties, including without limitation, cancellation of the Fishing Agreement and its Permit.

Permit No. F941-TWHll-32770, Permit Operating Conditions, paras. 1, 4, 8.

[8 FSM Intrm. 86]

V.  Liability for Violation of 24 F.S.M.C. 116(1)
     Plaintiff's Complaint seeks civil penalties against Ting Hong directly for the No. 907's failure to maintain a daily catch record on board the Vessel in the English language, as required by 24 F.S.M.C. 116(1), the Agreement and the Permit. Compl. paras. 9, 11.  Plaintiff essentially contends that Ting Hong agreed to assume full responsibility for the unlawful actions of all fishing vessels permitted under its Agreement with MMA when it entered into that Agreement.  Defendant responds that although it did agree to ensure that the No. 907 complied with the provisions of the Agreement and all applicable laws and regulations, it did not agree to assume liability for civil penalties for violations committed by that vessel. The language "shall ensure" actually means "shall use best efforts to ensure," in the context of the Agreement.4 Ting Hong claims that its actions met this standard. See Ting Hong Opp'n Br. at 18.5

     Contracts are not interpreted on the basis of subjective uncommunicated views, or secret hopes of one of the parties, but on an objective basis.  Kihara v. Nanpei, 5 FSM Intrm. 342, 345 (Pon. 1992).  The Court finds that the language of the Agreement is not ambiguous.  Under the plain language of paragraph 23, Ting Hong warranted that its authorized vessels, including the No. 907, would comply with all applicable laws.  Webster's New Collegiate Dictionary (1980) at page 376 defines "ensure" as follows:  "en" sure \ . . . to make sure, certain or safe: GUARANTEE syn ENSURE, INSURE, ASSURE, SECURE shared meaning element : to make an outcome sure."  There is no dispute that the No. 907 violated 24 F.S.M.C. 116(1) by failing to maintain a daily catch log in English.  The Court finds that Ting Hong's failure to ensure the No. 907's compliance with FSM law constitutes a breach of Ting Hong's Agreement with MMA.

     24 F.S.M.C. 501(1)(c) makes it unlawful for any person "to violate any provision of, or regulation under, an applicable domestic-based or foreign fishing agreement entered into pursuant to [Title 24] or any condition of any permit issued in accordance with [Title 24] and any regulations made under [Title 24]." Hence Ting Hong has violated 24 F.S.M.C. 501(c).  24 F.S.M.C. 502(1), in turn, specifically provides that "any person found by the Supreme Court of the Federated States of Micronesia in a civil proceeding to have committed an act prohibited by section 501 of this chapter shall be liable to the Federated States of Micronesia for a civil penalty."  Accordingly, the Court finds Ting Hong directly liable for civil penalties under 24 F.S.M.C. 501(1)(c) and 502(1) based on its breach of the plain language of its Agreement with MMA.

     Even if the Court were to have found that paragraph 11 of the Agreement was ambiguous,

[8 FSM Intrm. 87]

which it did not, the documentary and affidavit evidence provided by both parties confirms that Ting Hong agreed to accept responsibility for violations committed by its permitted fishing vessels.  The Court will briefly review this evidence.

     A.  Pangelinan Affidavit
     In his May 13, 1996 Supplemental Affidavit, Eugene Pangelinan, Deputy Director and Acting Executive Director of MMA, attests that he personally participated in the negotiation of the Foreign Fishing Agreement between MMA and Ting Hong.  He states that

[d]uring the negotiation of the Agreement, we specifically raised the issue of requiring Ting Hong to be responsible for the actions of each vessel licensed under the Agreement.  Ting Hong acknowledged that it was responsible for the vessels licensed under the Agreement.  At no time did Ting Hong indicate that it would not accept responsibility for any vessels other than those it owns.  There would not have been an Agreement with Ting Hong if Ting Hong had not agreed to be responsible for the vessels licensed under the Agreement.

Pangelinan Supp. Aff. para. 3.  His affidavit goes on to state that

[d]uring the negotiation we also specifically advised and reminded Ting Hong that catch report forms must be filled out on a daily basis. We also stressed to Ting Hong, as we do to every foreign party to a foreign fishing agreement, that it is their responsibility to ensure that all vessels licensed under their agreement comply with the reporting requirements and that it is Ting Hong's responsibility to make sure that the vessels follow through with those requirements.

Id. para. 4.  Mr. Pangelinan's affidavit further explains that MMA does not enter into foreign fishing agreements with individual fishing vessels; it "only enters into agreements with companies or associations that agree to accept responsibility for making sure that the vessels licensed under the agreement comply with the terms of the agreement, the permit and FSM law."  Id. para. 6.

     Defendant's brief in opposition to the FSM's Motion for Summary Judgment does not directly refute the contents of Mr. Pangelinan's affidavit.  It does not establish that the referenced discussion did not occur, and it does not establish that MMA misconstrued Ting Hong's representations during negotiation of the Agreement.

     B.  Lola Wang
     Next, plaintiff provides the trial testimony of a Ting Hong employee from an earlier criminal action, Lola Wang, as evidence that Ting Hong has admitted in the past that it is responsible for the actions of its authorized vessels.

     The Court does not give Ms. Wang's testimony any weight in the context of this case, because Ms. Wang admitted in her testimony that she had not taken part in the negotiation of the Agreement and drew her interpretation of the language of the Agreement solely from the text itself.

     C.  Foreign Fishing Questionnaire
     Plaintiff offers Ting Hong's May 2, 1995 responses to MMA's Foreign Fishing Agreement Questionnaire as further evidence that Ting Hong agreed to be responsible for any difficulties caused

[8 FSM Intrm. 88]

by vessels issued permits under the Agreement.

     MMA's questionnaire and Ting Hong's responses to that questionnaire do clarify the parties' views with respect to the burden of responsibility for violations committed by authorized vessels.  MMA's questionnaire asked Ting Hong, as an applicant for a foreign fishing agreement, for extensive information about itself. This information included:  the names of its company officers; Ting Hong's business relationship with the vessels for which it sought permits; written documentation of any lease or charter arrangement between Ting Hong and these vessels; the existence of insurance coverage for the vessels; Ting Hong's willingness to assume joint and several liability for any damage the vessels might cause to property, life or the environment; vessel identification information; the existence of any unpaid, unsatisfied or outstanding civil or criminal penalties or judgments against Ting Hong; and the manner in which Ting Hong would receive compensation from the fishing operation.

     Much of the information sought by MMA's Foreign Fishing Agreement Questionnaire concerns the financial condition and stability of applicants for foreign fishing agreements.6 At the same time, MMA requests little or no information about the financial condition of the vessels' owners or operators, to the extent these parties are not identical to the entity applying for a foreign fishing agreement.  The Court finds that MMA's Foreign Fishing Agreement Questionnaire, and Ting Hong's responses to that questionnaire, are consistent with Mr. Pangelinan's explanation that MMA deliberately enters into agreements with companies or associations that agree to assume financial responsibility for permitted vessels, and that the parties understood that Ting Hong would assume financial responsibility for all vessels permitted under the Agreement.

     In addition, elsewhere in its questionnaire response, Ting Hong expresses its willingness to assume responsibility for fishing vessels licensed through its Agreement, to assume liability for any uninsured vessels for which it seeks permits, and to assume joint and several liability with any offending vessel for any marine or maritime casualty that vessel may cause, if so required by the Agreement.  See Responses to questions 13, 18-19.  These responses indicate that Ting Hong understood that MMA might look to it first if any financial liability resulted from the actions of any of its authorized vessels.

     Ting Hong argues that MMA's questionnaire says nothing explicit about an applicant's liability for civil penalties for fishing violations committed by its vessels. While this is true, at the same time, nothing in Ting Hong's response indicates any intention on Ting Hong's part to carve out liability for civil penalties from its general assumption of responsibility for fishing vessels permitted under the Agreement.

     D.  Cooperation Agreement
     In support of its own cross-motion for summary judgment, Ting Hong supplies an Affidavit from Johnson Chuang, Regional Manager for Ting Hong.  Mr. Chuang attests that Ting Hong obtained the Permit for the No. 907 under the terms of a Cooperation Agreement with Ning-Bo, a mainland Chinese company and the owner of the No. 907.  Chuang Aff. para. 3.  Under the Cooperation Agreement, Ting Hong agreed to provide information regarding all FSM fishing laws and regulations to Ning-Bo.  In exchange, Ning-Bo agreed to be responsible for complying with those laws and regulations and for

[8 FSM Intrm. 89]

paying the consequences of any violations.  Aff. para. 4.

     Ting Hong argues that the provisions of the Cooperation Agreement and the contents of the Instruction Manual it provided to Ning-Bo demonstrate that the vessel or the vessel owner, rather than Ting Hong, is liable for any civil penalties sought through the government's complaint.  Defendant's motion for summary judgment is supported by:  (1) the Cooperation Agreement between Ting Hong and Ning-Bo, in both English and Chinese; (2) the Instruction Manual Ting Hong supplied to Ning-Bo, in both English and Chinese; and (3) copies of the approved fishing log forms in English and Chinese approved by MMA, which Ting Hong also provided to Ning-Bo.

     Under Article 1 of the Cooperation Agreement, Ting Hong agrees to accept responsibility for providing the fishery laws and relevant regulations of the FSM, for assisting Ning-Bo personnel in applying for the necessary entry permits and working permits in accordance with relevant FSM law, and for coordinating and assisting Ning-Bo in handling relevant affairs of the fishing operation.  See Coop. Ag. para. 3.  Ting Hong further agrees to assist vessels in negotiating with FSM government authorities when they violate the regulations or laws of FSM, and to "assist vessels to reduce its (sic) loss in order to resume its fishing operation."  Id. para. 8.

     Under the same Article, Ning-Bo undertakes "To abide (sic) the relevant rules and regulations of FSM and coordinate with the arrangement of Ting Hong in accordance with implementation of said FSM laws.  If any dispute or violation convicted (sic) by vessels, all cost and fine shall be responsible by Ning-Bo." (emphasis added).  The Cooperation Agreement specifically addresses the maintenance of catch reports.  Article 7 provides that "Ning-Bo vessels have responsibility to fill out catch report daily and inform its catch volume to Ting Hong base management."  The Instruction Manual Ting Hong provided to Ning-Bo states that "[a]ny vessel violates the laws, rules, and regulations of the FSM shall be canceled (sic) its fishing permit and shall be responsible for criminal and civil charges."  Id. paras. 13, 22.

     The Court finds that these provisions merely allocate risk between the parties to the Cooperation Agreement and that these provisions are not inconsistent with the imposition of civil penalties on Ting Hong under Title 24.  The Cooperation Agreement expressly provides Ting Hong with a contractual right of indemnity against Ning-Bo, if Ting Hong is held liable for civil penalties.  Ting Hong also conceded at oral argument that if it were held liable for civil penalties in this action, the terms of its agreement with Ning-Bo would authorize it to recover these penalties from Ning-Bo.

     The Court's finding, that in signing the Agreement Ting Hong agreed to assume responsibility for violations committed by its authorized vessels, is consistent with a reasonable apportionment of the risks undertaken by both MMA and Ting Hong in entering into a foreign fishing agreement in the FSM.  It is also consistent with the respective responsibilities of Ting Hong and Ning-Bo under the Cooperation Agreement.

VI.  Liability for Violation of 24 F.S.M.C. 501(1)(l)
     Plaintiff's complaint next seeks civil penalties against Ting Hong under 24 F.S.M.C. 501(l)(l), based on the No. 907's violation of 24 F.S.M.C. 116(1). Section 501(1)(l) provides that
 
it is unlawful for any person:

*   *   *

(l) to knowingly ship, transport, offer for sale, sell, purchase, import, export, or have

[8 FSM Intrm. 90]

custody, control, or possession of any fish taken or retained in violation of this title or any regional fishing treaty, regulation, permit, foreign or domestic-based fishing agreement or any applicable law.

24 F.S.M.C. 501(1)(l).  "Person" is further defined as "any individual, corporation, partnership, association, or other entity."  24 F.S.M.C. 102(34).
 
     Defendant presents two main arguments in opposition to the government's claim for additional penalties under this section.  First, defendant contends that the government cannot seek penalties under both 24 F.S.M.C. 116(1) and 24 F.S.M.C. 501(1)(l) for what is essentially a single violation of the law ) failure to maintain the catch report in English.  Second, defendant asserts that the word "knowingly" in 24 F.S.M.C. 501(1)(l) requires some form of intent on defendant's part, and the Court cannot impute the vessel master's knowledge to Ting Hong. Ting Hong Opp'n Br. at 35.

     With respect to defendant's first argument, the Court notes that section 501(1) of Title 24 sets forth a list of prohibited acts, each in the disjunctive.  Commission of any one of the listed acts is unlawful.  Accordingly, the Court finds that the government may pursue separate civil penalties against Ting Hong under section 501(1)(c), based upon the vessel's alleged violation of 24 F.S.M.C. 116(1), as well as under 24 F.S.M.C. 501(1)(l).

     Having found that the government may lawfully pursue its two separate claims for penalties, the Court now turns to whether the government has established that it is entitled to judgment as a matter of law on its second claim.

     In arguing that it should not be held liable under section 501(1)(l), Ting Hong asserts that the government must prove a knowing violation, and the vessel master's knowledge cannot be imputed to Ting Hong.  In addition, Ting Hong contends that the government may not take advantage of the rebuttable presumption contained in 24 F.S.M.C. 509(2)(a) ) that fish present on a vessel seized in connection with an act prohibited by section 501 are presumed to have been illegally taken ) because that presumption applies only in the context of forfeiture proceedings.

     The Court finds that the pleadings sufficiently establish the elements of a violation of 24 F.S.M.C. 501(1)(l). The contents of defendant's answer, and defendant's own brief in opposition to plaintiff's motion for summary judgment present direct evidence that at least some fish on board the No. 907 when it was apprehended had been retained while the vessel was operating in violation of 24 F.S.M.C. 116(1).  Accordingly, the Court need not determine whether the rebuttable presumption found at 24 F.S.M.C. 509(2)(a) is applicable in this type of proceeding.

     Ting Hong admits that when the No. 907 was stopped and boarded by FSM enforcement officials, it was engaged in fishing and had fish in its hold.  Am. Answer para. 1.  Ting Hong also admits that when the vessel was boarded, the master of the vessel failed to make available a daily catch log maintained in the English language after he was asked to do so.  Id.  Thus, any fish taken while the No. 907 was in violation of section 116(1) were fish retained in violation of Title 24, within the meaning of 24 F.S.M.C. 501(1)(l).

     As attachments to its brief in opposition to plaintiff's motion for summary judgment, and in support of its cross motion for summary judgment, defendant has provided a series of exhibits previously submitted to the Court in related Criminal Case No. 1995-1500.  See Ting Hong Opp'n Br. at 5.  These exhibits include affidavits from enforcement officials who boarded the No. 907 on May 25, 1995, and a statement from the captain of the No. 907, given on the same day.  In his statement, the captain, also the master of the No. 907, informed the boarding party that the fresh fish found in the

[8 FSM Intrm. 91]

hold had been caught on May 22nd, 23rd, 24th and 25th.  See id., Ex. C at 14 of 14.  See also id., Ex. C at 3 of 14 (Report of Officer Ericson Peter, dated June 8, 1995, stating that he personally observed the No. 907 fishing on May 25, 1995). The No. 907's daily Log Book and Catch Report contains no entries for these days.  Id., Ex. B at 2-30 of 41.  Defendant's brief presents no specific facts to suggest that the fish found in the No. 907's hold on May 25, 1995 were not actually caught while the vessel was in violation of 24 F.S.M.C. 116(1).  FSM Civ. R. 56(e). Accordingly, the Court finds that the No. 907 had custody, control or possession of fish retained in violation of Title 24.

     The pleadings also establish the requisite intent under section 501(1)(l).  From the exhibits submitted by defendant, it appears that the captain may have mistakenly believed that it was acceptable for the No. 907 to maintain an unapproved log book in Chinese, and then submit that log to the Ting Hong office at the end of the voyage for Ting Hong to complete the vessel's proper catch record in English.  See id. at 5, Ex. B at 31-39 of 41, and Ex. C at 5-6, 11 and 14 of 14.  This raises the issue of whether it is sufficient for a "person" charged with a violation of 501(1)(l) to have had knowledge of merely the acts constituting the violation, or also knowledge that those acts constituted a violation of the law.  The Court is unaware of any prior civil cases addressing this distinction in the context of section 501(1)(l).7  The Court need not reach this issue, however, because the vessel master knew he had not maintained the approved catch report in English,8 and knew the No. 907 was in custody and possession of fish retained while the log had not been maintained.  This knowledge is attributable to Ting Hong on agency law principles, and Ting Hong was well aware of the legal requirements imposed by 24 F.S.M.C. 116(1).  See Ting Hong Opp'n Br., Attach. to Chuang Aff. at 13 of 17 ("Instruction Manual for Fishing in FSM").
 
     This Court has held that a principal is bound by, and liable for, the acts of its agent done with or within the actual or apparent authority from the principal and within the scope of the agent's employment.  Bank of the FSM v. O'Sonis, 8 FSM Intrm. 67, 69 (Chk. 1997) (citing Black Micro Corp. v. Santos, 7 FSM Intrm. 311, 315-16 (Pon. 1995)).  The No. 907 acted as Ting Hong's agent in maintaining the approved daily catch report in English.

[8 FSM Intrm. 92]

     Agency relationships are based upon consent by one person that another shall act in his behalf and be subject to his control.  O'Sonis, 8 FSM Intrm. at 69.  The Foreign Fishing Agreement between MMA and Ting Hong established what the parties believed to be "reasonable terms and conditions" for Ting Hong's "utilization of fisheries resources" within the EEZ.  That Agreement contemplated that Ting Hong would utilize these resources through the efforts of "the Company's longline fishing vessels," defined in the Agreement as Ting Hong's "authorized vessels."  Paragraph 11 of the Agreement requires each authorized vessel to maintain a daily catch log in English on board.  In paragraph 23 of the Agreement, Ting Hong agreed to ensure that its authorized vessels complied with this requirement and all other applicable legal requirements.  Therefore, maintenance of the daily catch log in English was squarely within the scope of the No. 907's duties as Ting Hong's agent under the Agreement, and the vessel's failure to maintain that log is an act of Ting Hong's agent, for which Ting Hong is directly liable.  See Black Micro Corp., 7 FSM Intrm. at 315-16.

     It is unfortunate that the vessel master was not properly instructed on how to comply with section 116(1)'s requirements.  Responsibility for this failure must rest with Ting Hong.  The Court finds Ting Hong directly liable for civil penalties under 24 F.S.M.C. 501(1)(l).  See Riss & Co. v. United States, 262 F.2d 245 (8th Cir. 1958) (motor carrier found guilty of "knowingly and willfully" violating maximum driving hours regulations where its drivers' daily log books failed to disclose excess hours they had driven; even though carrier had conducted a program designed to ensure its drivers' compliance with these regulations and carrier claimed to have no knowledge that its drivers' documents had been falsified, carrier could have detected its drivers' violations); Steere Tank Lines, Inc. v. United States, 330 F.2d 719, 722 (5th Cir. 1963) (corporation cannot be shielded from imputed knowledge in prosecution for knowingly and wilfully violating regulation on the ground that an employee in doing his regular work for the company violated an instruction by the company).  Although defendant insists that this case does not raise agency issues, See Ting Hong Opp'n Br. at 10, the significant facts are undisputed, and plaintiff is entitled to judgment as a matter of law based on the record before the Court.

VII.  Revocation as Exclusive Remedy
     Finally, Ting Hong argues that revocation of the No. 907's permit is the exclusive remedy for the violations alleged in plaintiff's complaint.  In support, Ting Hong cites paragraph 23 of the Agreement, which states

The Company shall ensure that its Authorized Vessels comply with the provisions of this Agreement and all applicable laws and regulations.  If an Authorized Vessel engages in activities in contravention of this Agreement, Titles 18 or 24 of the Code of the Federated States of Micronesia or any other applicable law, rule or regulation of the Federated States of Micronesia or any of its States, the Authority may cancel or withdraw the permit. . . .

Plaintiff responds that only MMA is authorized to issue, deny, cancel, suspend or impose restrictions on FSM fishing permits, and for this reason, paragraph 23 speaks only to specific actions the Authority may take.  See 24 F.S.M.C. 109-112. However, the FSM Attorney General is separately authorized to enforce violations of the Agreement, Title 24 or the Permit through court proceedings for civil and criminal penalties and forfeitures.

     The Court finds that the No. 907's permit operating conditions make clear that revocation is not the exclusive penalty for violations.  Permit Condition No. 8 provides that

[t]he vessel shall strictly comply with the Fishing Agreement and with the laws, rules, and

[8 FSM Intrm. 93]

       regulations of the FSM and its States.  Failure to strictly comply may result in substantial fines and other civil and criminal penalties, including without limitation, immediate cancellation of the Fishing Agreement and its Permit.

(emphasis added).  In entering into its Agreement with MMA, Ting Hong agreed to ensure the No. 907's compliance with its Permit conditions.  Ting Hong was therefore on notice that the penalty for violations could extend beyond revocation of the No. 907's Permit.

CONCLUSION
     Accordingly, plaintiff's Motion for Summary Judgment is granted.  Defendant's Motion for Summary Judgment is denied.  The Court finds Ting Hong directly liable for the No. 907's violations of 24 F.S.M.C. 116(1) and 24 F.S.M.C. 501(1)(l) under 24 F.S.M.C. 501(1)(c) and 502(1).  The Court will set a date for argument on the appropriate penalty for these violations.

*    *    *    *
 
 
Footnotes:
 
1.  Plaintiff's Complaint alleges that Ting Hong is additionally responsible for the vessel's failure to make the required catch log available for inspection by authorized officers.  Plaintiff has since clarified that it does not seek separate penalties for failure to maintain the required catch log in English and failure to produce that log for inspection.  See FSM Opp'n Br. at 3 & n.1.

2.  The FSM alleges violations of 24 F.S.M.C. 501(1)(a), 501(1)(c) and 502(1). FSM's Motion for Summary Judgment at 8.  These were the statutory provisions in effect at the time of the alleged offenses.  24 F.S.M.C. 501 and 502 have since been amended.

3.  Defendant also argues that it is not the "appropriate" entity to comply with section 116(1) under 24 F.S.M.C. 404(2).  The Court notes that section 404(2) establishes only minimum terms and conditions for foreign fishing agreements.  It does not prohibit MMA from negotiating more favorable terms with foreign parties.

4.  At the hearing on the parties' cross-motions, defendant made reference to a foreign fishing agreement between MMA and Japanese fishing interests which defendant claims incorporates "best efforts to ensure" language.  Defendant argued that its own agreement with MMA should be interpreted in the same manner.  The Court simply notes that the agreement defendant references, by defendant's own admission, contains different language from that at issue in this case.  Accordingly, the existence of that agreement, with different terms negotiated between different parties, does not raise a genuine issue of material fact as to the proper interpretation of the Agreement between MMA and Ting Hong.

5.  Ting Hong argues that it sent the proper log forms to Ning-Bo, together with an instruction manual regarding compliance with the FSM fishing laws.  Ting Hong Opp'n Br. at 27.  It also instructed Ning-Bo to provide this material to the master of the vessel, and to fully explain it to him.  The proper log forms were found on the vessel when it was boarded.  Id.  Nevertheless, the master had not filled out the standard forms, but instead had kept a separate log in Chinese, apparently intending to have that information transferred into English on completion of the voyage.  Id. at 27-28.

6.  MMA asked for Ting Hong's latest balance sheet, profit and loss statement, and bank statement, as well as a bank reference.  MMA also asked Ting Hong to state "who is financially responsible for any losses or liabilities the business might incur."  See FSM's Motion for Summary Judgment, Pangelinan Aff., Ex. A, Question 10.  To this Ting Hong responded, "Wu Kai-Nan, Chairman of the [Ting Hong] Board will take responsibility for any losses or liabilities for the Business."

7.  In the United States, courts have treated the issue of whether a "knowing" violation of a statute has occurred as a matter of statutory interpretation.  For some specific offenses, which require a "knowing and willful violation," courts have required proof of evil intent.  For other types of offenses, courts have found that a knowledge requirement is satisfied by proof of knowledge of the facts constituting the violation, whether or not it was known that those acts were unlawful.  See, e.g., United States v. Gris, 247 F.2d 860, 864 (2d Cir. 1957) ("[i]t matters not whether appellant realized his conduct was unlawful.  He knew exactly what he was doing, and what he did was a violation of the Federal Communications Act"); St. Louis & S.F.R.R. v. United States, 169 F. 69, 70 (8th Cir. 1909) (in action to recover statutory penalty for failure to properly handle livestock in transit, "knowingly" means with a knowledge of the facts which taken together constitute the failure to comply with the statute).  Compare United States v. Baytank (Houston), Inc., 934 F.2d 599, 610-13 (5th Cir. 1991); Louis Vuitton S.A. v. Lee, 875 F.2d 584, 590 (7th Cir. 1989); United States v. Custer Channel Wing Corp., 376 F.2d 675, 680-83 (4th Cir.), cert. denied, 389 U.S. 850 (1967); United States v. $831,160.45 U.S. Currency, 607 F. Supp. 1407, 1414 (N.D. Cal. 1985).  See also 45 A.L.R. Fed. 785 4 (under Occupational Safety and Health Act, "knowledge" is knowledge of the physical conditions constituting the violation, and does not require additional knowledge of the requirements of law).

8.  The approved Log Book and Catch Report was found on board the No. 907, and contained the vessel's and captain's name on the front cover.  May 14, 1995 is handwritten on the first page, and additional handwritten notations mark the vessel's position at the time hooks were set on that day, when hooks were hauled, and at noon.  The Court finds that the vessel master was aware of the existence of the approved log book, and knowingly failed to complete that log.
 
                                                                                                                                                                                                                                                                                                           
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