THE  SUPREME COURT OF THE
FEDERATED STATES OF MICRONESIA
TRIAL DIVISION
Cite as Isaac v. Weilbacher ,
8 FSM Intrm. 326 (Pon. 1998)

[8 FSM Intrm. 326]

DANIEL ISAAC,
Plaintiff,

vs.

BERMAN WEILBACHER, KAPILLY CAPELLE and
THE FEDERATED STATES OF MICRONESIA,
Defendants.

CIVIL ACTION NO. 1996-028
 
ORDER

Andon L. Amaraich
Chief Justice

Argued:  September 16, 1997
Decided:  July 7, 1998

APPEARANCES:
For the Plaintiff:            Delson, Ehmes, Sr., Esq.
                  P.O. Box 1018
                  Kolonia, Pohnpei FM 96941

For the Defendants:     Angela Belgrove, Esq.
                  Chief of Litigation
                  FSM Department of Justice
                  P.O. Box PS-105
                  Palikir, Pohnpei FM 96941

*    *    *    *

HEADNOTES
Public Officers and Employees
     A temporarily-promoted employee is compensated at the step in the new pay level which is next above his current pay, and the employee must be informed in advance and must agree in writing that at the end of the temporary promotion, he will be returned to the former salary (grade and step) that he would be receiving had he remained in his former position.  No temporary promotion can exceed one year.  Issac v. Weilbacher, 8 FSM Intrm. 326, 332 (Pon. 1998).

Public Officers and Employees
     A permanent employee has a one year probationary period after a promotion or transfer.  A probationary employee has all of the rights of a permanent employee except the right to appeal from removal from the new position.  Once the probationary period expires, an employee becomes a permanent employee in the new position.  No adverse action (including a demotion) may be taken against a permanent employee except as prescribed by regulations which entitle the employee to notice

[8 FSM Intrm. 327]

of the action taken and a hearing regarding the merits of the action before an ad hoc committee if the employee appeals.  Issac v. Weilbacher, 8 FSM Intrm. 326, 332 (Pon. 1998).

Constitutional Law ) Due Process
     The fundamental concept of procedural due process is that the government may not be permitted to strip citizens of "life, liberty or property" in an unfair, arbitrary manner.  Where such important individual interests are exposed to possible governmental taking or deprivation, the Constitution requires that the government follow procedures calculated to assure a fair and rational decision making process.  Issac v. Weilbacher, 8 FSM Intrm. 326, 333 (Pon. 1998).

Constitutional Law ) Due Process; Public Officers and Employees
     Title 52 F.S.M.C. 151-57 and PSS Regulation 18.4 establish an expectation of continuous employment for nonprobationary national government employees by limiting the permissible grounds, and specifying necessary procedures, for their dismissal.  This is sufficient to establish a "property interest" for the nonprobationary employee which cannot be taken without fair proceedings, or "due process."  Issac v. Weilbacher, 8 FSM Intrm. 326, 333 (Pon. 1998).

Public Officers and Employees
     When there is no applicable FSM precedent on the point, it is helpful to look to U.S. law in order to formulate general principles for use in resolving legal issues bearing upon the rights of public employees and officers because the public employment structures within the FSM are based upon comparable government models existing in the United States.  Issac v. Weilbacher, 8 FSM Intrm. 326, 333 (Pon. 1998).

Public Officers and Employees
     A provisionally or temporarily appointed individual is not ordinarily entitled to a permanent civil service position merely by reason of his or her retention beyond the probation period prescribed for regular appointees.  At least two conditions must be present before a temporary appointment may become permanent, so as to entitle an affected employee to the procedures in the PSS Act and Regulations, regarding adverse action against permanent employees:  1) the employee must have been among the first three on the eligible list at the time of the appointment, so as to be qualified and capable of receiving the appointment, and 2) there must have been a vacancy. Issac v. Weilbacher, 8 FSM Intrm. 326, 334 (Pon. 1998).

Public Officers and Employees
     A court finding that an employee, who held an acting position for four years and was certified as qualified or eligible for the vacant position, had been permanently promoted, does not take away management discretion in hiring and establish for employees a legal right to promotion. Rather, it recognizes the reality of the employee's employment situation, and prevents the government from circumventing the procedural requirements of the PSS Act and Regulations. Issac v. Weilbacher, 8 FSM Intrm. 326, 334 (Pon. 1998).

Public Officers and Employees
     The PSS Act's purpose is to provide employees with just opportunities for promotion, reasonable job security (including the right to appeal), and tenure in positions.  52 F.S.M.C. 113, 115.  If the national government is allowed to "temporarily" promote employees for indefinite periods of time and subsequently return them to their previous positions, the government can effectively circumvent all of the Act's merit and tenure principles.  Issac v. Weilbacher, 8 FSM Intrm. 326, 334-35 (Pon. 1998).

Public Officers and Employees
     Under the PSS Act and Regulations, a permanent employee after a promotion or transfer is a

[8 FSM Intrm. 328]

probationary employee who becomes permanent and non-probationary at the end of a maximum one year probationary period.  Thereafter, an action returning the employee to his previous pay level is a demotion, an adverse action.  Issac v. Weilbacher, 8 FSM Intrm. 326, 335 (Pon. 1998).

Public Officers and Employees
     The protections afforded a permanent employee include:  1) notification of the adverse action, containing a full and detailed statement of the reasons for the action; 2) notification of his right to appeal the adverse action; 3) the right to appeal the adverse action and have his appeal heard publicly by an ad hoc committee; and 4) the right to receive a written report from the ad hoc committee containing findings of fact and written recommendations concerning the adverse action.  Issac v. Weilbacher, 8 FSM Intrm. 326, 335, 337 (Pon. 1998).

Public Officers and Employees
     An employee receiving a temporary promotion must be informed in advance and must agree in writing that at the expiration of the temporary promotion, he will be returned to the former salary (grade and step) that he would be receiving had he remained in his former position.  But such a written agreement has no effect if the promotion has become permanent.  Issac v. Weilbacher, 8 FSM Intrm. 326, 335 (Pon. 1998).

Constitutional Law ) Due Process; Public Officers and Employees
     A permanent employee cannot be demoted to his former position based on a regulation which, by its terms, only applies to a temporary promotion.  A permanent employee's constitutional right to due process is violated by the national government when it has thus demoted him.  Issac v. Weilbacher, 8 FSM Intrm. 326, 335 (Pon. 1998).

Civil Rights
     Chapter 7 of Title 11 of the FSM Code creates a statutory cause of action for individuals whose constitutional rights have been violated, and imposes civil liability, including costs and attorney fees, on a person who deprives another of any right or privilege protected under that Section.  The national government is a "person" to whom such civil liability may attach under this statute.  Issac v. Weilbacher, 8 FSM Intrm. 326, 335 (Pon. 1998).

Civil Procedure ) Summary Judgment; Constitutional Law ) Equal Protection
     Article IV, section 4 is designed to guarantee that similarly situated individuals are not treated differently due to some sort of invidious discrimination, but where there is no admissible competent evidence of any such intentional discrimination, a court will grant summary judgment against an equal protection claim.  Issac v. Weilbacher, 8 FSM Intrm. 326, 336 (Pon. 1998).

Public Officers and Employees
     Every permanent and probationary employee is to receive an annual written rating of performance.  Employees who receive "Satisfactory" or "Exceptional" ratings are eligible for step increases within their pay level.  Employees who receive "Less than Satisfactory" ratings are not eligible.  The absence of a performance evaluation gives rise to the presumption that the individual was performing at a "Less than Satisfactory" level.  Pay and step increases are discretionary. Issac v. Weilbacher, 8 FSM Intrm. 326, 336-37 (Pon. 1998).

Public Officers and Employees
     A person whose temporary promotion became permanent has the right to be discharged only for cause, and is entitled to all of the other protections afforded a permanent employee.  Issac v. Weilbacher, 8 FSM Intrm. 326, 337 (Pon. 1998).

[8 FSM Intrm. 329]

Civil Procedure ) Summary Judgment
     Cross motions for summary judgment on an exemplary damages claim will both be denied when neither motion has presented any evidence on the claim.  Issac v. Weilbacher, 8 FSM Intrm. 326, 337 (Pon. 1998).

*    *    *    *

COURT'S OPINION
ANDON L. AMARAICH, Chief Justice:
     This case came before the Court for hearing on plaintiff's motion for summary judgment, and defendants' cross-motion for summary judgment, on September 16, 1997 at 10:00 a.m.

I.  Background
     Plaintiff filed his original Complaint in this action on April 15, 1996.  On June 20, 1997 plaintiff filed a Motion to Amend his Complaint.  The Court granted plaintiff's motion on July 7, 1997, and plaintiff filed his Amended Complaint on the same day.  Plaintiff filed a Motion for Partial Summary Judgment ("Pl. Mot.") on July 28, 1997.  Defendants filed their Opposition to Plaintiff's Motion and Defendants' Cross Motion for Summary Judgment ("Def. Opp'n") on August 18, 1997.  Plaintiff responded to defendants' cross-motion on September 12, 1997.

II.  Undisputed Facts
     On July 24, 1991 the former FSM National Planner, John A. Mangefel, designated Daniel Isaac to be the Acting Administrator for the Division of Construction in the Office of Planning and Statistics ("Acting Administrator").  Def. Opp'n, Affidavit of Angela Belgrove ("Bel. Aff.") Ex. A.  At the time Mr. Isaac was designated to be Acting Administrator, he was a permanent employee of the FSM National Government with the salary grade of PL-30/4.  Def. Opp'n at 2; Pl. Mot. at 2.  On October 31, 1991 the then-acting National Planner, James Mormad, transmitted a Personnel Action form regarding Mr. Isaac's designation as Acting Administrator to Onlino Lawrence, the Acting Director of the Office of Administrative Services ("OAS").  Def. Opp'n, Bel. Aff. Ex. B.  Mr. Lawrence determined that Mr. Isaac was lacking two years of work experience to fully qualify him for the position of Administrator, and recommended that Mr. Isaac be placed at an intermediate level of PL-36. Def. Opp'n, Bel. Aff. Ex. C.

     On January 17, 1992, OAS approved a personnel action making Mr. Isaac the Acting Administrator.  Def. Opp'n, Bel. Aff. Ex. D.  The Personnel Action form, contains a statement, signed by Mr. Isaac, which states:

Action is initiated to temporarily promote incumbent to Acting Administrator for Division of Construction Review until this position is permanently filled.  Incumbent has served in this capacity for more than ninety (90) days and is to be compensated as stated under part 7.7 and 7.8 of the PSSR.  The incumbent will be returned to his former position with the same pay level as though he has never been promoted.

Id..  On or about May 15, 1995, OAS processed and approved a personnel action to adjust Mr. Isaac's compensation level from PL-36/1 to the salary grade for the Administrator position, PL-40/1, retroactive to April 12, 1994.  Def. Opp'n, Bel. Aff. Ex. E.  Also on April 12, 1994, Mr. Isaac was placed on the certification list as a candidate qualified for the Administrator position.  Def. Opp'n, Affidavit of Kapilly Capelle ("Cap. Aff.") Ex. A.; Pl. Mot. at 8.

[8 FSM Intrm. 330]

     On February 5, 1996, defendant Bermin Weilbacher, the National Planner, designated Phillip Joseph the Acting Administrator.  Def. Opp'n, Affidavit of Bermin Weilbacher ("Weil. Aff.") Ex. A.  Defendant Weilbacher and defendant Kapilly Capelle, the Director of OAS, approved a personnel action returning Mr. Isaac to the pay level of PL-30/5 as of February 12, 1996.  Def. Opp'n, Cap. Aff. Ex. B.  On February 20, 1996, Mr. Isaac's counsel wrote to Mr. Capelle to formally appeal the personnel action and request an ad hoc hearing pursuant to 52 F.S.M.C. 154.  By letter dated February 29, 1996, Mr. Capelle stated to Mr. Isaac's counsel that he believed that the personnel action was in compliance with the Public Service System ("PSS") Regulations and that Mr. Isaac should reapply for other supervisory positions.  Def. Opp'n, Cap. Aff. Ex. D.

III.  Plaintiff's Amended Complaint
     Plaintiff asserts seven causes of action against each of the defendants.1  The claims as asserted by plaintiff contain allegations which can be summarized as follows:

A.  Due Process Claims
     Plaintiff claims in Count II that he was denied due process when defendants demoted him to the PL-30/5 pay level without adequate notice and without a hearing, and that this conduct violated 11 F.S.M.C. 701.

B.  Equal Protection Claims
     Plaintiff claims in Count III that he was denied equal protection under the law when defendants replaced him as Acting Administrator without any reasonable basis for doing so, and that this conduct violated 11 F.S.M.C. 701.

C.  Statutory Claims
     Plaintiff claims in Count I that defendants violated the PSS Act and Regulations when they returned him to the PL-30/5 pay level after four years, without adjusting that level to reflect any performance increases to which he would have been entitled had he remained in his original position.

     In Count VI, plaintiff claims that defendants' conduct violated the Public Service System Act and Regulations, 52 F.S.M.C. 111 et seq., and that the defendants' actions were arbitrary and capricious.

     In Count VII, plaintiff claims that defendants' conduct violated the Public Service System Act and Regulations, 52 F.S.M.C. 111 et seq., and that the defendants' actions were thus unauthorized and ultra vires.

D.  Exemplary Damages
     In Count IV, plaintiff claims that defendants' actions constituted wanton, reckless, and intentional disregard of plaintiff's statutory and constitutional rights, and that he is therefore entitled to exemplary damages.

[8 FSM Intrm. 331]

IV.  Analysis
     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); Adams v. Etscheit, 6 FSM Intrm. 580, 582 (App. 1994); Kyowa Shipping Co. v. Wade, 7 FSM Intrm. 93, 95 (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 facie 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.  Kyowa Shipping Co., 7 FSM Intrm. at 95; Urban v. Salvador, 7 FSM Intrm. 29, 31 (Pon. 1995); 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).

     Plaintiff makes a motion for partial summary judgment, asking that the Court find as a matter of law that defendants have violated the PSS Act, 52 F.S.M.C. 111 et seq., and PSS Regulations, and that plaintiff has been deprived of his constitutional rights as a result.  Plaintiff also asks the Court to find as a matter of law that Mr. Isaac was "promoted" to the position of Administrator during the relevant time period, as that term is used in the PSS Act and Regulations.

     Defendants oppose plaintiff's motion and cross-move for summary judgment on the Amended Complaint in its entirety.

     First, defendants assert that, because plaintiff was never provisionally appointed to the position of Administrator under 52 F.S.M.C. 137, he was never entitled to serve in the position permanently.  Rather, defendants claim that plaintiff's temporary promotion was a salary adjustment rather than a promotion under the relevant PSS Regulations, and that this temporary promotion did not change plaintiff's permanent employment status as an Engineer at pay level PL-30/5.  Thus, since defendant explicitly agreed to be returned to his former salary, he should be bound by that agreement.

     Defendant asserts that plaintiff was not entitled to notice under 52 F.S.M.C. 152 or a hearing under 52 F.S.M.C. 154-55, because plaintiff was never "promoted" to the position of Administrator or "demoted" from that position within the meaning of the PSS Act.

     Defendants admit that plaintiff's continued temporary appointment was improper because it lasted for four years rather than the one year maximum permissible under the PSS Regulations.  See Def. Opp'n at 16, 18.

A.  PSS Act and Regulations
     PSS Regulation 7.7 relates to an "Acting" Assignment within the FSM National Public Service System.  Under Regulation 7.7, an Acting Assignment is a designation of an employee to act for a supervisor for a period of up to 30 days, which is repeated until the supervisor returns to his position.  If the Acting Assignment exceeds 90 days, the employee "shall be temporarily promoted if he meets the qualifications standards of the position."  FSM Pub. Serv. Reg. 7.7.  If the employee does not meet the qualifications standards of the position, he "may be temporarily promoted to an intermediate grade if one exists and he meets the qualifications requirements."  FSM Pub. Serv. Reg. 7.7.

[8 FSM Intrm. 332]

     PSS Regulation 7.8 relates to Temporary Promotions under the PSS Act.  The Regulation states that an employee who is temporarily promoted "shall be compensated at the step in the new pay level which is next above his current pay." FSM Pub. Serv. Reg. 7.8.  The Regulation also states that the employee "must be informed in advance and must agree in writing that at the expiration of the temporary promotion, he will be returned to the former salary (grade and step) that he would be receiving had he remained in his former position."  FSM Pub. Serv. Reg. 7.8.  Finally, the Regulation states that "[n]o temporary promotion shall exceed a period of one year."  FSM Pub. Serv. Reg. 7.8.

     Regulation 5.12 provides for up to a one year probationary period for a permanent employee after a promotion or transfer.  If the Court determines that Mr. Isaac was promoted from Engineer to Acting Administrator, the probation period for Mr. Isaac would have begun on the date that the Court determines that the promotion took effect.  FSM Pub. Serv. Reg. 5.12.  A probationary employee has all of the rights of a permanent employee except the right to appeal from removal from the new position.  FSM Pub. Serv. Reg. 5.12.  Once the probationary period expires, an employee becomes a permanent employee in the new position.  FSM Pub. Serv. Reg. 5.12.  If an employee is permanent, no adverse action (including a demotion) may be taken against that employee except as prescribed under PSS Regulations 18.2-18.4.  These Regulations entitle the employee against whom adverse action is being taken to notice of the action taken and a hearing regarding the merits of the action before an ad hoc committee if the employee appeals.  FSM Pub. Serv. Reg. 18.4-18.8.

     The undisputed facts demonstrate that Mr. Isaac was temporarily promoted from an Engineer at the PL-30/4 level to the position of Acting Administrator, at an intermediate pay level of PL-36/1, on January 17, 1992, in accordance with the PSS Regulations.  The facts also indicate that plaintiff was informed in advance that he would be returned to his former salary grade and step, and that he agreed to this in writing as the Regulations require.2  Def. Opp'n, Bel. Aff. Ex. D. However, the requirement in the Regulations that no temporary promotion exceed a period of one year clearly was violated.  The issue is what effect, if any, this violation of the Regulations had upon plaintiff's employment status and his agreement to be returned to his previous salary and position.

     The PSS Act and Regulations are silent regarding the consequences for an employee if his temporary promotion is improperly extended beyond the one year maximum period.  If the Court determines that Mr. Isaac was effectively promoted because his temporary promotion was improperly extended beyond the one year maximum period, the PSS Act and Regulations which detail the effects of a promotion or transfer are applicable.  Thus, he would be entitled to all of the protections afforded to a permanent Administrator, including the right to notice and appeal of any adverse action against him.

B.  Due Process Claim
     Plaintiff claims that his right to procedural due process was violated when he was "demoted" without cause and without a hearing.  The process which plaintiff claims was due to him is grounded in the PSS Act and Regulations, and the procedures set out in the Act and Regulations determine the scope of the defendants' duty to provide Mr. Isaac due process consistent with the FSM Constitution:

[8 FSM Intrm. 333]

The fundamental concept of procedural due process is that the government may not be permitted to strip citizens of "life, liberty or property" in an unfair, arbitrary manner.  Where such important individual interests are exposed to possible governmental taking or deprivation, the Constitution requires that the government follow procedures calculated to assure a fair and rational decision making process.

Suldan v. FSM (II), 1 FSM Intrm. 339, 354-55 (Pon. 1983).  Title 52 F.S.M.C. 151-57 and PSS Regulation 18.4 establish an expectation of continuous employment for nonprobationary national government employees by limiting the permissible grounds, and specifying necessary procedures, for their dismissal.  Suldan (II), 1 FSM Intrm. at 351-54.  The Court has determined that this is sufficient to establish a "property interest" for the nonprobationary employee which cannot be taken without fair proceedings, or "due process."  Semes v. FSM, 4 FSM Intrm. 66, 73 (App. 1989).3

     In order to determine whether Mr. Isaac was entitled to due process, the Court first must determine whether Mr. Isaac was a "nonprobationary" employee.  One FSM case was found in which a public employee attempted to retroactively gain compensation for performing duties of a higher position.  However, the Court finds that this case is not directly on point.

     In Sohl v. FSM, 4 FSM Intrm. 186 (Pon. 1990), the Court found that a public employee who was designated "Acting Director" of the Office of Planning and Statistics ("OPS") for sixty days, but who actually performed the duties of the Director for over three years, was not entitled to compensation for that position, even though he was eventually appointed as Director.  In that case, plaintiff grounded his claims in contract law, and asserted that the government was unjustly enriched by his performance of the duties of Director when he was not compensated at that level.

     In Sohl, the Court found that there was no implied contract between plaintiff and the government, and that the plaintiff was not entitled to compensation as the Director because he was not duly appointed as the Director at the time in question.  Id. at 194.  The Court noted that plaintiff never claimed that he legally was the Director, and also specifically found that the plaintiff was only the Acting Director for sixty days.  Id. at 194-95.  Also, the Sohl case presented constitutional issues regarding checks and balances between branches of the national government, because the position of Director of OPS, a position in the Executive branch, is one which also requires the approval of Congress.  Id. at 196-97.  This case is completely different.

     Here, Mr. Isaac claims that he was "promoted" to Administrator of the Division of Construction as a matter of law because the FSM improperly kept him in that position "temporarily" for four years.  Also, Mr. Isaac's claims are based upon constitutional violations as a result of his "demotion" without notice or a hearing, not upon an alleged breach of an implied contract.  Finally, appointment to the position of Administrator of the Division of Construction did not require Congress' approval.  Thus, the Court finds that no FSM cases are directly on point.

     Finding no applicable FSM precedent on this point, the Court will look to the law of other nations for guidance.  Semens v. Continental Air Lines, Inc., 2 FSM Intrm. 131, 139-40 (Pon. 1985).  Because the structures of public employment within the FSM are based upon comparable government models existing in the United States, it is helpful to look to U.S. law in order to formulate general principles for use in resolving legal issues bearing upon the rights of public employees and officers.  Sohl, 4 FSM

[8 FSM Intrm. 334]

Intrm. at 191.

     Under U.S. law related to civil service and competitive merit employment, an individual provisionally or temporarily appointed to a position without having taken a competitive examination is not ordinarily entitled to a permanent position merely by reason of his or her retention beyond the period of probation prescribed for regular appointees from the eligible lists.  15A Am. Jur. 2d Civil Service 35, at 46 (1976).  At least two conditions must be present before a temporary appointment may become a permanent appointment, so as to entitle an affected employee to the procedures in civil service acts, like the PSS Act and Regulations, regarding adverse action against permanent employees:  (1) the employee must have been among the first three on the eligible list at the time of the appointment, so as to be qualified and capable of receiving the appointment, and (2) there must have been a vacancy.  Id. at 47.

     The undisputed facts show that both of these conditions were met by Mr. Isaac as of April 12, 1994.  The letter dated April 12, 1994 from the Director of OAS to the National Planner establishes that (1) after a competitive examination, Mr. Isaac was certified by OAS as the only qualified, eligible applicant for the position of Administrator, Division of Construction, as of April 12, 1994; and (2) the position of Administrator, Division of Construction was vacant as of that date. Def. Opp'n, Bel. Aff., Ex. H.  Based upon this evidence, the Court must conclude that Mr. Isaac's appointment was "temporary" from January 17, 1992 until April 12, 1994, because Mr. Isaac was not certified as qualified or eligible for the position of Administrator, Division of Construction.  However, the Court determines that this temporary appointment became a permanent, probationary promotion to the position of Administrator, Division of Construction, at a pay level of PL-40/1, as of April 12, 1994:  Mr. Isaac was qualified, a vacancy existed, and the FSM clearly was in violation of the PSS Act and Regulations regarding temporary appointments.

     Defendants argue that a finding by the Court that Mr. Isaac was promoted takes away the discretion of management in hiring, and establishes for employees a legal right to promotion.  This is not the case.  Rather, the Court believes it is necessary to recognize the reality of Mr. Isaac's employment situation, and prevent the defendants from circumventing the procedural requirements of the PSS Act and Regulations.

     In McGillicuddy v. Civil Serv. Comm'n, 24 P.2d 942 (133 Cal. Dist. Ct. App. 1933), the court found that, where there was a civil service rule in effect restricting temporary positions to a maximum of six months, employees who were given a number of successive six month temporary positions achieved the status of "permanent" employees under the civil service rules.  In that case, the court found that such a practice violated the purposes of the civil service act, stating that:

the appointing power could absolutely prevent eligibles from acquiring a permanent status merely by following the procedure adopted in the present case.  Regardless of the true nature of the position or the length of time the appointee had served, such appointee could be removed at will . . . without cause, and without a hearing, merely because he had been appointed to a position designated "temporary."

Id. at 950.  Like the employer in the McGillicuddy case, here the national government kept Mr. Isaac in a "temporary" position for much longer than the civil service law allows.  While this Court's decision recognizes that Mr. Isaac was "promoted" even though he was never officially appointed to Administrator, Division of Construction, to hold otherwise would allow the national government to completely disregard the merit system of employment.  The purpose of the PSS Act is to provide employees with just opportunities for promotion, reasonable job security (including the right to appeal), and tenure in positions.  52 F.S.M.C. 113, 115.  If the national government is allowed to "temporarily"

[8 FSM Intrm. 335]

promote employees for indefinite periods of time and subsequently return them to their previous positions, the national government can effectively circumvent all of the merit and tenure principles of the Act.

     Since the Court finds that Mr. Isaac became a probationary employee on April 12, 1994, then, under the PSS Act and Regulations, Mr. Isaac's position as Administrator, Division of Construction became permanent and non-probationary as of April 12, 1995.  See FSM Pub. Serv. Reg. 5.12 (providing for a maximum one year probationary period for a permanent employee after a promotion or transfer).  Thus, the Court finds, as a matter of law, that the action taken by the FSM, returning Mr. Isaac to the pay level of PL-30/5 as of February 12, 1996, was a demotion, an "adverse action" under PSS Regulation 18.1.  Accordingly, Mr. Isaac was entitled to the protections afforded a permanent employee, including: (1) notification of the adverse action, containing a full and detailed statement of the reasons for the action, 52 F.S.M.C. 152; FSM Pub. Serv. Reg. 18.5; (2) notification of his right to appeal the adverse action, FSM Pub. Serv. Reg. 18.5-6; (3) the right to appeal the adverse action and have his appeal heard publicly by an ad hoc committee, 52 F.S.M.C. 154-155; FSM Pub. Serv. Reg. 18.8, 18.13; and (4) the right to receive a written report from the ad hoc committee containing findings of fact and written recommendations concerning the adverse action, FSM Pub. Serv. Reg. 18.14.

     The undisputed facts show that Mr. Isaac timely appealed the adverse action to Mr. Capelle and requested an ad hoc hearing on February 20, 1996.  It appears from the affidavits and documents submitted that this request was ignored by Mr. Capelle because he did not believe that the action was a demotion.  Def. Opp'n, Cap. Aff. at 1; Ex. D.  However, because Mr. Isaac's position was not in fact temporary, and he was improperly classified as a temporary employee for four years in violation of the PSS Regulations, the FSM was required to provide Mr. Isaac with the same procedural due process it provides to permanent employees under the PSS Act and Regulations.

     The personnel form which was signed by plaintiff, by which he agreed to be returned to his previous level and step of pay, does not affect this result.  An employee receiving a temporary promotion "must be informed in advance and must agree in writing that at the expiration of the temporary promotion, he will be returned to the former salary (grade and step) that he would be receiving had he remained in his former position."  FSM Pub. Serv. Reg. 7.8.  As of April 12, 1995, Mr. Isaac became a permanent employee at PL-40/1, and could not be demoted to his former position based on a Regulation which, by its terms, only applies to a temporary promotion.

     In conclusion, the Court finds that the pleadings on file, together with the affidavits and documents submitted, show that there is no genuine issue as to any material fact related to Mr. Isaac's claim that his constitutional right to due process was violated by the national government.  The Court finds as a matter of law that Mr. Isaac became a permanent employee at PL-40/1 as of April 12, 1995, and that he was "demoted" on February 5, 1996 without due process.

     Chapter 7 of Title 11 of the FSM Code, entitled Civil Rights, creates a statutory cause of action for individuals whose constitutional rights have been violated. Title 11 F.S.M.C. 701(3) imposes civil liability, including costs and attorney fees, on a person who deprives another of any right or privilege protected under that Section.  See Plais v. Panuelo, 5 FSM Intrm. 179, 203 (Pon. 1991); Tolenoa v. Kosrae, 3 FSM Intrm. 167 (App. 1987).  The Court previously has determined that the National Government is a "person" to whom such civil liability may attach under this statute.  See Plais 5 FSM Intrm. at 204-05.

     Since plaintiff has demonstrated that his right to due process was violated by the national government, he is entitled to an award of costs and attorney fees under 11 F.S.M.C. 701.  Thus, Mr. Isaac

[8 FSM Intrm. 336]

is entitled to a judgment as a matter of law as to liability on Count II of his complaint.  Mr. Isaac will be permitted the opportunity to prove his damages as a result of the national government's denial of due process, and violation of 11 F.S.M.C. 701, at trial.

C.  Equal Protection Claim
     Plaintiff claims in Count III that his constitutional right to equal protection was violated, and that defendants' conduct was in violation of 11 F.S.M.C. 701.  The Court finds that there are no material issues of fact related to this claim, and that defendants are entitled to summary judgment against plaintiff.

     Plaintiff has presented no competent evidence that defendants' conduct was an attempt to violate his constitutional rights under Article IV, section 4, to be accorded the equal protection of the laws.  Plaintiff merely presents the unsubstantiated allegation in his motion for summary judgment that:

Because the conduct of the defendants are blatant violations of the Act and are so callused against the plaintiff without any reasonable basis, or legitimate governmental interest, and therefore are so arbitrary and capricious, one can only conclude that the defendants are discriminating against the plaintiff because of plaintiff's marital status and political preference.

Pl. Mot. at 12.  Defendant cross-moved for summary judgment on this claim, questioning its legal sufficiency.  Article IV, section 4 is designed to guarantee that similarly situated individuals are not treated differently due to some sort of invidious discrimination.  Davis v. Kutta, 7 FSM Intrm. 536, 547 (Chk. 1996). Plaintiff did not respond to defendants' motion with any competent evidence that would be admissible at trial to demonstrate that he suffered any intentional discrimination based upon his marital status or political preference.

     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, 5 FSM Intrm. at 295.  Plaintiff has presented no such evidence, and summary judgment is granted for defendants on Count III.

D.  Alleged Statutory Violations
     1.  Count I
     In Count I, plaintiff claims that defendants violated the PSS Act and Regulations because plaintiff did not receive annual performance reviews or step increases from his original PL 30/4 position while he was temporarily promoted to the Administrator position.  Regulation 9.2 provides that every permanent and probationary employee is to receive an annual written rating of performance. FSM Pub. Serv. Reg. 9.2.  Regulation 9.6 provides that employees who receive ratings of "Satisfactory" or "Exceptional" shall be eligible for step increases within their pay level.  Employees who receive "Less than Satisfactory" ratings shall not be eligible.  FSM Pub. Serv. Reg. 9.6.  Regulation 9.4 states that, "[w]here ratings are not received within the time limits provided by this Part, the employee shall be presumed to have been rated `Less than Satisfactory' by his supervisor . . . until such time as a rating is received."  FSM Pub. Serv. Reg. 9.6.

     The undisputed facts demonstrate that Mr. Isaac was returned to level PL-30/5, one step up from level PL-30/4 which he had held four years earlier.  Plaintiff complains that he was denied step

[8 FSM Intrm. 337]

increases which he would have received had he remained in his original position. The PSS Regulations do not support this claim based upon the evidence that has been submitted.  The absence of a performance evaluation gives rise to the presumption that the individual was performing at a "Less than Satisfactory" level. Also, as defendants note in their opposition, the pay and step increases were discretionary.  FSM Pub. Serv. Reg. 8.4.  Thus, plaintiff's claims relying upon the differential between his current PL-30/5 level and some hypothetical level he might have reached had he remained an Engineer and received merit and performance increases must fail.

     There being no genuine issues of material fact, plaintiff's motion for summary judgment on this Count I is denied, and defendants' cross-motion is granted.

     2.     Counts VI and VII
     As to Counts VI and VII of plaintiff's complaint, the Court finds as a matter of law that defendants violated the PSS Act and Regulations, 52 F.S.M.C. 111 et seq.  For the reasons discussed above, the Court finds that plaintiff had the right to be discharged only for cause, and was entitled to all of the protections afforded a permanent employee, including: (1) notification of the adverse action, containing a full and detailed statement of the reasons for the action, 52 F.S.M.C. 152; FSM Pub. Serv. Reg. 18.5; (2) notification of his right to appeal the adverse action, FSM Pub. Serv. Reg. 18.5-6; (3) the right to appeal the adverse action and have his appeal heard publicly by an ad hoc committee, 52 F.S.M.C. 154-155; FSM Pub. Serv. Regs. 18.8, 18.13; and (4) the right to receive a written report from the ad hoc committee containing findings of fact and written recommendations concerning the adverse action, FSM Pub. Serv. Reg. 18.14.

     There being no genuine issue as to any material fact on the issue of defendants' violation of the PSS Act and Regulations, the Court finds that plaintiff is entitled to a judgment as a matter of law on that issue in Counts VI and VII of his amended complaint.  Accordingly, plaintiff's motion for summary judgment is granted as to defendants' liability under Counts VI and VII, and defendants' cross-motion is denied.  Mr. Isaac will be permitted the opportunity at trial to prove whether defendants' conduct was ultra vires, or arbitrary and capricious, and what his damages are as a result of the national government's denial of his statutory rights under the PSS Act and Regulations.

E.  Exemplary Damages
     There was no evidence presented by either party in their summary judgment motions as to plaintiff's entitlement to exemplary damages based upon defendants' conduct.  Accordingly, plaintiff's motion for summary judgment, and defendants' cross-motion for summary judgment are both denied as to Count IV of the Amended Complaint.  Plaintiff will be permitted to present evidence at trial in support of his claim that defendants' conduct entitles him to exemplary damages.

Conclusion
     Accordingly, plaintiff's motion for summary judgment is granted as to defendants' liability under Counts I, VI, and VII of plaintiff's Amended Complaint, and denied in all other respects.  Defendants' cross-motion for summary judgment is granted as to Count III of the Amended Complaint, and Count III is hereby dismissed with prejudice.  Defendants' cross-motion for summary judgment is otherwise denied in its entirety.

     This case shall proceed to trial on the issue of Mr. Isaac's damages for the defendants' violation of his constitutional right to due process (Count I) and violations of the PSS Act and Regulations (Counts VI and VII).  Plaintiff also will be permitted to present evidence regarding his legal right to exemplary damages because of defendants' conduct.
 
Footnotes:
 
1.  Plaintiff does not specify in his Complaint whether the individual defendants are being sued in their individual or official capacities.

2.  Plaintiff's counsel, in his motion, makes the unsupported claim that this statement "appears to have been added on later not only because the characters or letters are different, but because it does not follow the reasoning of the remarks."  Since plaintiff provides no competent evidence to support this statement, e.g., a sworn affidavit stating that this statement was not present when he signed the document, the authenticity of this document is accepted based upon defendants' affidavits.

3.  Although the cases discussed deal with termination from national employment rather than demotion, a demotion, like a termination, constitutes an "adverse action" under the PSS Regulations, and an employee is entitled to the same procedural safeguards prior to implementation of any adverse action.
                                                                                                                                                                                                                                                                                                           
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