KOSRAE STATE COURT TRIAL DIVISION
Cite as Abraham v. Kosrae, 9 FSM Intrm. 57
(Kosrae. S. Ct. Tr. 1999)

[9 FSM Intrm. 57]

SEPE P. ABRAHAM,
Plaintiff,

vs.

STATE OF KOSRAE,
Defendant.

CIVIL ACTION NO. 12-98

RULING ON FAILURE TO
EXHAUST ADMINISTRATIVE REMEDIES

Aliksa B. Aliksa
Acting Chief Justice

Hearing:  February 1, 1999
Decided:  February 25, 1999

APPEARANCES:
For the Plaintiff:          Canney Palsis
                                     Micronesian Legal Services Corporation
                                     P.O. Box 38
                                     Lelu, Kosrae FM 96944

For the Defendant:     Debra S. Blum, Esq.
                                     Assistant Attorney General
                                     Office of the Kosrae Attorney General
                                     P.O. Box 870
                                     Tofol, Kosrae FM 96944

*    *    *    *

HEADNOTES
Civil Procedure; Jurisdiction
     Whether a court has subject matter jurisdiction is an issue that may be raised at any time.  Abraham v. Kosrae, 9 FSM Intrm. 57, 59 (Kos. S. Ct. Tr. 1999).

Administrative Law ) Judicial Review
     Administrative procedures, where applicable and valid, must be followed before seeking judicial disposition of matter.  It is incumbent on parties to follow administrative procedures concerning their disputes as designated by applicable state law before coming to court unless and until the state law is judged invalid.Abraham v. Kosrae, 9 FSM Intrm. 57, 60 (Kos. S. Ct. Tr. 1999).

Administrative Law ) Judicial Review; Public Officers and Employees ) Kosrae
     When the administrative steps essential for court review of employment terminations have not yet been completed, the court cannot review the termination.Abraham v. Kosrae, 9 FSM Intrm. 57,

[9 FSM Intrm. 58]

60 (Kos. S. Ct. Tr. 1999).

Administrative Law
     Generally, the validity of a regulation depends on whether the administrative agency had the power to adopt the particular regulation.  The regulation must be within the matter covered by the enabling statute.  Abraham v. Kosrae, 9 FSM Intrm. 57, 60 (Kos. S. Ct. Tr. 1999).

Administrative Law
     A regulation, valid when promulgated, becomes invalid upon the later enactment of another statute which is in conflict with the regulation.  However, an administrative regulation will not be considered as having been impliedly invalidated by a subsequent act of the legislature unless the regulation and the later law are irreconcilable, clearly repugnant and inconsistent that they cannot have concurrent operation.  Abraham v. Kosrae, 9 FSM Intrm. 57, 60 (Kos. S. Ct. Tr. 1999).

Administrative Law
     Administrative regulations that are inconsistent or out of harmony with the statute or that conflict with the statute are invalid or void, and the court not only may, but it is their obligation to strike down such regulations.  Abraham v. Kosrae, 9 FSM Intrm. 57, 60 (Kos. S. Ct. Tr. 1999).

Administrative Law; Constitutional Law ) Due Process
     From June 1997 when Kos. S.L. No. 6-131 became law to February 1998 when new PSS regulations were adopted, there was no administrative appeals process for grievances, which void raises substantial due process concerns under the FSM and Kosrae Constitutions.  Abraham v. Kosrae, 9 FSM Intrm. 57, 60 (Kos. S. Ct. Tr. 1999).

Administrative Law ) Judicial Review
     Since no appeal process for grievances existed from June 1997 to February 1998, during which time the complaint was filed, it would have been futile for the plaintiff to follow administrative procedures regarding her grievance.  Exhaustion of administrative remedies before suing in court is not required when it would be futile for a plaintiff to pursue an administrative remedy.  Abraham v. Kosrae, 9 FSM Intrm. 57, 60-61 (Kos. S. Ct. Tr. 1999).

Public Officers and Employees ) Kosrae
     Under Kosrae state law, a "grievance" is an employee action to present and resolve a difficulty or dispute arising in the performance of his duties and not from a disciplinary action.  Abraham v. Kosrae, 9 FSM Intrm. 57, 61 (Kos. S. Ct. Tr. 1999).

Administrative Law ) Judicial Review; Public Officers and Employees ) Kosrae
     There are no provisions in Title 18 that prohibit an the filing of a civil action by non-employee for a grievance based upon facts which occurred during his or her employment with the Kosrae state government.  For employees, Title 18 provides that an administrative procedure must be followed first, as prescribed by their branch heads.  Abraham v. Kosrae, 9 FSM Intrm. 57, 61 (Kos. S. Ct. Tr. 1999).

Administrative Law ) Judicial Review; Public Officers and Employees ) Kosrae
     Disciplinary actions, suspensions, demotions and dismissals, taken in conformance with Title 18 are in no case subject to review in the courts until the administrative remedies have been exhausted.  Grievances are not disciplinary actions.  Title 18 does not provide any limitations on the court. s review of grievances or grievance appeals.  There is no limitation of judicial review with respect to grievances.  Abraham v. Kosrae, 9 FSM Intrm. 57, 61 (Kos. S. Ct. Tr. 1999).

[9 FSM Intrm. 59]

Administrative Law ) Judicial Review; Public Officers and Employees ) Kosrae
     Under Title 18, there is no limitation on the court's jurisdiction to hear claims based upon a grievance filed by a former employee of the Executive Branch.Abraham v. Kosrae, 9 FSM Intrm. 57, 61 (Kos. S. Ct. Tr. 1999).

*    *    *    *

COURT'S OPINION
ALIKSA B. ALIKSA, Acting Chief Justice:
     In October 1998, this Court requested briefing from the parties on the Defendant's defense of Plaintiff. s failure to exhaust administrative remedies.  A hearing was held on February 1, 1999 on the issue of whether Plaintiff is required to exhaust administrative remedies prior to filing suit in this Court for alleged violations of the former Title 5, Kosrae State Code.  Plaintiff was represented by Canney Palsis, MLSC.  Debra Blum appeared for the Defendant.  The Court notes that this hearing was the first to take place in the Kosrae State Court Courtroom in the new FSM-Kosrae State Judiciary Building, which had been recently dedicated on January 29, 1999.

     The resolution of this issue goes directly to this Court's subject matter jurisdiction to hear this case.  If exhaustion of administrative remedies is a valid affirmative defense, then this Court must dismiss this case for lack of jurisdiction.  If however, the exhaustion of administrative remedies by the Plaintiff is not required, then Kosrae State Court retains jurisdiction over this matter.  Whether a court has subject matter jurisdiction is an issue that may be raised at any time.  Hartman v. FSM, 6 FSM Intrm. 293, 296 (App. 1993).

I.  Background.
     Plaintiff claims that at the time that the Complaint was filed, no existing regulations governing employees of the Executive Branch were in place, therefore no administrative remedies existed.  Plaintiff claims that the enactment of S.L. No. 6-131 effectively repealed Regulation 11.  Defendant claims that Regulation 11, adopted under the authority of Kosrae State Code, Title 5 in 1987, was still effective in January 1998 and applied to Plaintiff. s claims.

     Plaintiff was employed as an administrative assistant for the Department of Health Services.  At various times from July 1995 to May 1997, Plaintiff was appointed to work as Acting Administrator.  Plaintiff took early retirement on October 1, 1997.  Plaintiff filed her Complaint on January 29, 1998.  At the time Plaintiff filed her Complaint, she was no longer an employee of the State Government.

II.  Issues Presented.
     In reviewing the briefs and hearing the arguments of counsel, two issues must be resolved in order to determine the validity of the Defendant's affirmative defense.
 
  1.     Whether the repeal of Kosrae State Code, Title 5 by S.L. No. 6-131 also effectively repealed Regulation 11, because the authority to issue those regulations was given in Title 5?

  2.     Whether a non-employee is required to follow the administrative procedures prescribed in Title 5 or Title 18?

[9 FSM Intrm. 60]

III.  Discussion.
1.  Status of Regulation 11 following the Effective Date of S.L. No. 6-131.
     Administrative procedures, where applicable and valid, must be followed before seeking judicial disposition of matter.  It is incumbent on parties to follow administrative procedures concerning their disputes as designated by applicable state law before coming to court unless and until the state law is judged invalid.Abraham v. Lusangulira, 6 FSM Intrm. 423, 426 (Pon. 1994).  For example, where the administrative steps essential for review by the court of employment terminations have not yet been completed, the Court cannot review the termination.  Suldan v. FSM (I), 1 FSM Intrm. 201, 202 (Pon. 1982).  Therefore, if Regulation 11 is valid and applicable to the Plaintiff, it must be followed before our Court can hear her claims.

     Generally, the validity of a regulation depends on whether the administrative agency had the power to adopt the particular regulation.  The regulation must be within the matter covered by the enabling statute, which was Kosrae State Code, Title 5 (repealed).  See 2 Am. Jur. 2d Administrative Law 225, at 240 (1994).

     A regulation, valid when promulgated, becomes invalid upon the later enactment of another statute which is in conflict with the regulation.  However, an administrative regulation will not be considered as having been impliedly invalidated by a subsequent act of the legislature unless the regulation and the later law are irreconcilable, clearly repugnant and inconsistent that they cannot have concurrent operation.  Id. 227, at 244.  Therefore, we must look at Regulation 11 and State Law No. 6-131 and consider whether they are irreconcilable, repugnant or inconsistent so that they cannot operate concurrently.

     Regulation 11 and S.L. No. 6-131 contain several topics that are consistent: recruitment, hiring, promotion, employee rights, and compensation, generally. However, there is one area of S.L. No. 6-131 that is clearly inconsistent with Regulation 11.  This inconsistent area pertains to grievances and disciplinary actions, and their appeal and review.  S.L. No. 6-131 creates an Appeals Panel. Regulation 11 refers to the Executive Service Appeals Board (ESAB).  Therefore, those provisions of Regulation 11 which deal with the ESAB must be considered invalid because they are irreconcilable and inconsistent with S.L. No. 6-131.

     Administrative regulations that are inconsistent or out of harmony with the statute or that conflict with the statute are invalid or void, and the court not only may, but it is their obligation to strike down such regulations. 2 Am. Jur. 2d Administrative Law 228, at 245 (1994).  Thus, Regulation 11, Section 11.2(c) and Regulation 11, Part XV (Appeals) must be considered invalid and void.  The remaining sections of Regulation 11 are not inconsistent with S.L. No. 6-131 and therefore remained valid until superseded by the new Executive Branch PSS Regulations adopted in February 1998.

     The invalidity of Regulation 11, Section 11.2(c), results in no appeal procedure for grievances.  S.L. No. 6-131 prescribes the Appeals Panel for appeal of disciplinary actions, but does not prescribe any specific appeal process for grievances.  Thus, from June 1997 when S.L. No. 6-131 became law to February 1998 when the new PSS regulations were adopted, there was no appeals process for grievances.  This . void. in the administrative process for grievance appeals raises substantial due process concerns under the FSM and Kosrae State Constitutions.
 
     Furthermore, it is not necessary to follow administrative procedures where it would be futile to do so.  Exhaustion of administrative remedies before suing in court is not required when it would be

[9 FSM Intrm. 61]

futile for a plaintiff to pursue an administrative remedy.  Dorval Tankship Pty, Ltd. v. Department of Finance, 8 FSM Intrm. 111, 115 (Chk. 1997); Chuuk v. Secretary of Finance, 7 FSM Intrm. 563, 566 n.4 (Pon. 1996).  Since no appeal process for grievances existed from June 1997 to February 1998, during which time the Complaint was filed, it would have been futile for Plaintiff to follow administrative procedures regarding her grievance.

2.  Applicability of Title 5, Title 18 and Regulation 11 to non-employees.
     Kosrae State Code, Title 5, Section 5.101(8) defined "employee" as "executive employee in a temporary or permanent position in the Executive.  A "grievance" is an employee action to present and resolve a difficulty or dispute arising in the performance of his duties and not from a disciplinary action.  Kos. S.C. 5.101(12).

     Regulation 11, Sections 11.1 and 11.2 addressed the grievance procedure. Section 11 permitted a grievance to be presented by any permanent Executive Service System employee.  Under Regulation 11, Section 11.2, employees were required to follow certain procedures in presenting their grievances.

     The definitions in S.L. No. 6-131, codified at Kosrae State Code, Title 18 are similar.  "Employee" means a person holding a position in the public service, whether permanently or otherwise.  Kos. S.C. 18.201(7).  Title 18, Section 18.404, which addresses grievances, states that:  "The Branch heads shall prescribe a system for hearing the views of employees on their working conditions, status, pay, and related matters, and for hearing and adjudicating grievances of any employee or group of employees."

     Section 18.404 only refers to employees.  There are no provisions in Title 18 that prohibit an the filing of a civil action by non-employee for a grievance based upon facts which occurred during his or her employment with the State Government.  Title 18 provides, that for employees, an administrative procedure must be followed first, as prescribed by their branch heads.

     Kosrae State Code, Section 18.507 provides certain limitations on judicial review.  The provision states:  "Disciplinary actions taken in conformance with this Chapter shall in no case be subject to review in the Courts until the administrative remedies prescribed herein have been exhausted."  Disciplinary actions are described in Sections 18.501 and 18.502 as suspensions, demotions and dismissals.  Grievances are not disciplinary actions.  Section 18.507 does not provide any limitations on the Court's review of grievances or grievance appeals. Therefore, there is no limitation of judicial review in Title 18 with respect to grievances.

     The Court concludes that under Title 18, there is no limitation on this Court. s jurisdiction to hear claims based upon a grievance, filed by a former employee of the Executive Branch.

IV.  Conclusion.
     At the time Plaintiff filed her Complaint, there were no valid administrative procedures under Regulation 11 for appeal of grievances, therefore it would have been futile for Plaintiff to pursue an administrative remedy.  Plaintiff, at the time of filing the complaint, was no longer an employee of the Executive Branch, therefore, the provisions of Regulation 11 and Title 18 do not apply to her.  Finally, Title 18 does not impose any restrictions on this Court's jurisdiction over claims based upon grievances of non-employees.

     The Court concludes that based upon these reasons, and based upon the particular facts of this case regarding the timing of the complaint and the status of the law and regulations, the Defendant's

[9 FSM Intrm. 62]

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