9 FSM Intrm.366-374

THE SUPREME COURT OF THE

FEDERATED STATES OF MICRONESIA

Cite as Kosrae v. M/V Voea Lomipeau,

9 FSM Intrm. 366 (Kosrae 2000)

[9 FSM Intrm. 366]

STATE OF KOSRAE,

M/V VOEA LOMIPEAU, THE GOVERNMENT OF

THE KINGDOM OF TONGA (TONGA DEFENCE

SERVICES), and CAPTAIN P.F. MATOTO,

CIVIL ACTION NO. 1999-2002

ORDER AND MEMORANDUM

Decided: April 6, 2000

Modified: April 7, 2000

[9 FSM Intrm. 367]

For the Plaintiff: Ronald P. Bickett

Assistant Attorney General

Office of the Kosrae Attorney General

Tofol, Kosrae FM 96944

For the Defendant: Salomon Saimon, Esq.

Law Offices of Saimon & Associates

Kolonia, Pohnpei FM 96941

Admiralty; Jurisdiction

Generally, to complete a court's jurisdiction in an in rem action, the res must be seized and be under the court's control. In other words, jurisdiction of the res is obtained by a seizure under process of the court, whereby it is held to abide such order as the court may make concerning it.Kosrae v. M/V Voea Lomipeau, 9 FSM Intrm. 366, 370 (Kos. 2000).

Admiralty; Civil Procedure ) Dismissal

When a vessel has not been seized and is not in the FSM, the court has not obtained jurisdiction over it and the complaint as to the vessel must be dismissed.Kosrae v. M/V Voea Lomipeau, 9 FSM Intrm. 366, 370 (Kos. 2000).

Jurisdiction ) Personal

Except as provided in 4 F.S.M.C. 204, the FSM Supreme Court may exercise personal jurisdiction in civil cases only over persons residing or found in the Federated States of Micronesia or who have been duly summoned and voluntarily appear. Kosrae v. M/V Voea Lomipeau, 9 FSM Intrm. 366, 370 (Kos. 2000).

Civil Procedure ) Service

Under 4 F.S.M.C. 204, service of process may be made upon any person subject to the Supreme Court's jurisdiction by personally serving the summons upon the defendant outside the Federated States of Micronesia and service of summons under 4 F.S.M.C. 204 must be made in like manner as service within the Federated States of Micronesia by any officer or person authorized to make service of summons in the state or jurisdiction where the defendant is served.Kosrae v. M/V Voea Lomipeau, 9 FSM Intrm. 366, 370-71 (Kos. 2000).

A foreign government is an entity over whom the FSM Supreme Court may exercise jurisdiction if it engages in certain acts. Kosrae v. M/V Voea Lomipeau, 9 FSM Intrm. 366, 371 n.1 (Kos. 2000).

Civil Procedure ) Service

Since a summons and complaint must be served together, "process" in 4 F.S.M.C. 204(2) necessarily means both the complaint and the summons. Kosrae v. M/V Voea Lomipeau, 9 FSM Intrm. 366, 371 (Kos. 2000).

[9 FSM Intrm. 368]

Civil Procedure ) Service

If a plaintiff opts for personal service on a defendant outside the FSM, it must be accomplished by a person authorized to do so under 4 F.S.M.C. 204. Kosrae v. M/V Voea Lomipeau, 9 FSM Intrm. 366, 371 (Kos. 2000).

Civil Procedure ) Service

Nothing contained in 4 F.S.M.C. 204 limits or affects the right to serve any process in any other manner now or hereafter provided by law, such as by registered mail with a signed receipt as provided for in FSM Civil Procedure Rule 4(i). Kosrae v. M/V Voea Lomipeau, 9 FSM Intrm. 366, 371 (Kos. 2000).

Civil Procedure; Courts

Rules of court properly promulgated, and not exceeding the limitation of the court's rulemaking power, have the force of law. Kosrae v. M/V Voea Lomipeau, 9 FSM Intrm. 366, 371 (Kos. 2000).

Civil Procedure ) Service

The FSM Civil Procedures Rules do not specifically address the question of service upon a foreign government or its agents. Kosrae v. M/V Voea Lomipeau, 9 FSM Intrm. 366, 371-72 (Kos. 2000).

Civil Procedure ) Service; Sovereign Immunity

The question of proper service is different from the question of the validity of an immunity defense. The issue of sovereign immunity does not involve a jurisdictional defect in the same sense as does improper service of process. Rather, the sovereign immunity defense technically comes into consideration only after jurisdiction is acquired and simply provides a ground for relinquishing jurisdiction previously acquired. Kosrae v. M/V Voea Lomipeau, 9 FSM Intrm. 366, 372 n.2 (Kos. 2000).

Civil Procedure ) Service

Because the Supreme Court has the power to make rules and orders, and do all acts, not inconsistent with law or with the rules of procedure as may be necessary for the due administration of justice, it may, in a case, prescribe the manner in which service may be had on the foreign government of Tonga and its agents. Kosrae v. M/V Voea Lomipeau, 9 FSM Intrm. 366, 372 (Kos. 2000).

Civil Procedure ) Service

Fax service is not a method recognized by FSM Civil Procedure Rule 4. Kosrae v. M/V Voea Lomipeau, 9 FSM Intrm. 366, 372 (Kos. 2000).

Judgments ) Default Judgments

Where the defendant is outside the FSM, no default can be entered until the expiration of at least 30 days after service. Kosrae v. M/V Voea Lomipeau, 9 FSM Intrm. 366, 373 n.3 (Kos. 2000).

Civil Procedure ) Service; Judgments ) Default Judgments

A court may find service upon a foreign government sufficient when the plaintiff sent it the complaint and summons by registered mail and the foreign government had actual notice of the complaint, since it filed a motion to dismiss, but the court will deny an entry of default when the plaintiffs cannot offer a formal proof of service, such as registered mail return receipt, because they cannot confirm service on the foreign government before it filed its motion to dismiss.Kosrae v. M/V Voea Lomipeau, 9 FSM Intrm. 366, 373 (Kos. 2000).

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International Law; Separation of Powers; Sovereign Immunity

The determination of whether Tonga and its agents are immune from suit is a decision that is better made by the FSM government's executive branch because the FSM Constitution expressly delegates the power to conduct foreign affairs to the President and because whether a party claiming immunity from suit has the status of a foreign sovereign is a matter for the executive branch's determination and is outside the competence of the courts. Kosrae v. M/V Voea Lomipeau, 9 FSM Intrm. 366, 373 (Kos. 2000).

International Law; Sovereign Immunity

International organizations, their property, and their assets wherever located, and by whomsoever held, are accorded the same immunity from suit and every form of judicial process by the Federated States of Micronesia government that it accords to foreign governments, but the nature of the immunity the FSM affords foreign governments is still an open question. Kosrae v. M/V Voea Lomipeau, 9 FSM Intrm. 366, 373 n.5 (Kos. 2000).

Civil Procedure; Sovereign Immunity

Proceedings in a suit against a foreign government may be postponed in order to give the FSM Department of Foreign Affairs the opportunity to decide whether the court should recognize the foreign government's sovereign state immunity from suit. Kosrae v. M/V Voea Lomipeau, 9 FSM Intrm. 366, 373-74 (Kos. 2000).

MARTIN G. YINUG, Associate Justice:

For the reasons below, Kosrae's motion for entry of default is denied. The motion to dismiss as to the Motor Vessel Voea Lomipeau is granted. Further action in this case is stayed for 60 days, in order to provide the Department of Foreign Affairs of the executive branch the opportunity determine whether the Federated States of Micronesia recognizes Tonga's sovereign immunity for purposes of this suit. Given the disposition of the motion to dismiss, defendants' motion for summary judgment is denied as premature.

The court has received and considered the following:

1) Motion to Appear for a Particular Case filed on February 23, 2000 by Ronald Bickett, attorney for Kosrae. The motion is granted.

2) Plaintiff's Motion for Entry of Judgment; Memorandum of Points and Authorities; Declaration of Ronald P. Bickett; Declaration of Bruce Howell filed by state of Kosrae ("Kosrae") on February 23, 2000;

3) Motion to Dismiss Pursuant to Rule 12(b) of the FSM Rules of Civil Procedure, Rule 4 of the FSM Rules of Civil Procedure, Rule 56 of the FSM Rules of Civil Procedure and 4 F.S.M.C. filed on March 14, 2000. (Defendants' motion to file the foregoing by fax, dated March 10, 2000, is denied, as the court has a copy of the original filed on March 14, 2000.)

4) Plaintiff's Response and Opposition to Defendants' Motion to Dismiss; Memorandum of Points and Authorities; Declaration of Betty Phillip, filed by Kosrae on March 22, 2000.

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5) Response to Plaintiff's Opposition to Defendants' Motion to Dismiss, submitted by fax to the court's office in Yap on March 30, 2000. Defendants also submit a motion to file by fax with this motion, which is granted.

Kosrae moves for a default judgment against the defendants on the basis that service upon the defendants was completed no later than sometime in December 1999, and that as of February 23, 2000, the defendants had not answered the complaint. In response to the motion for default, defendants have filed a motion to dismiss in which they raise three issues. They contend that service of the complaint and summons was insufficient; that the doctrine of sovereign immunity renders them immune from suit; and that in any event they have no liability on the underlying allegations of the complaint, because at the time of the alleged collision resulting in damage to the Kosrae dock, the vessel was under charter to a third party.

As an initial matter, the court agrees with the defendants that the court does not have jurisdiction over the vessel, the M/V Voea Lomipeau. As the court reads the complaint, the claim against the M/V Voea Lomipeau is in rem. However, it appears from the papers that the vessel is not now within the FSM, nor was the vessel ever seized. In an in rem action, "[g]enerally, to complete the court's jurisdiction, the res must be seized and be under the control of the court. In other words, jurisdiction of the res is obtained by a seizure under process of the court, whereby it is held to abide such order as the court may make concerning it." 2 Am. Jur. 2d Admiralty § 96, at 776-77 (1962) (footnote omitted). Since the vessel has not been seized and is not now in the FSM, the court has not obtained jurisdiction over it. The complaint as to the vessel is dismissed.

The in personam claims remain. The court first considers the service issue, then the immunity issue. Because of the disposition of the immunity issue, consideration of defendants' summary judgment motion is premature, and the motion for summary judgment is accordingly denied.

The service issue in this case presents an interesting question. Defendants cite Alik v. Moses, 8 FSM Intrm. 148, 149-50 (Pon. 1997), a case from the FSM trial division in Pohnpei, for the proposition that under the FSM long-arm statute, 4 F.S.M.C. 204, the court may obtain jurisdiction over persons outside the FSM only as provided in that statute. Defendants contend that under the long-arm statute, only personal service is sufficient in order for the court to acquire personal jurisdiction.

The section immediately before 4 F.S.M.C. 204, or 203, provides that "[t]he Supreme Court may exercise personal jurisdiction in civil cases only over persons residing or found in the Federated States of Micronesia or who have been duly summoned and voluntarily appear, except as provided in section 204 of this chapter." Section 204(1) then follows, and provides that

[a]ny person, corporation, or legal entity, whether or not a citizen or resident of the Federated States of Micronesia, who in person or though an agent does any of the acts enumerated in this section, thereby submits himself or its personal representative to the personal jurisdiction of the Supreme Court of the Federated States of Micronesia.

Section 204(2) provides that "[s]ervice of process may be made upon any person subject to the jurisdiction of the Supreme Court under this section by personally serving the summons upon the

[9 FSM Intrm. 371]

defendant outside the Federated States of Micronesia." (emphasis added).1 Section 204(3) goes on to state that "[s]ervice of summons shall be made under this section in like manner as service within the Federated States of Micronesia by any officer or person authorized to make service of summons in the State or jurisdiction where the defendant is served." Hence, § 204(2) uses the permissive "may," while § 204(2) uses the mandatory "shall."

Since Rule 4(d) of the FSM Rules of Civil Procedure provides that "[t]he summons and complaint shall be served together," "process" in § 204(2) necessarily means both the complaint and the summons. The permissive language used in § 204(2) means that a plaintiff may elect to serve the summons and complaint by personal service. If the plaintiff makes this election, then the mandatory language of § 204(3) comes into play. This language is directed not at the type of service, but to the individual who must make the personal service: "[s]ervice of summons shall be made . . . by any officer or person authorized to make service of summons and complaint." In short, if a plaintiff opts for personal service, it must be accomplished by the person authorized to do so under the statute.

Such a reading of §§ 204(2) and (3) is consistent with § 204(4), which provides that "[n]othing contained in this section limits or affects the right to serve any process in any other manner now or hereafter provided by law." Taken altogether, the court reads the FSM long-arm statute to mean that the personal service provided for therein is optional, since a plaintiff also, under § 204(4), may utilize any other procedure provided by law. To that extent § 204(4) implicates Rule 4(i) of the FSM Rules of Civil Procedure, styled "Alternative Provisions for Service in a Foreign Country." Kosrae asserts that it served the defendants by registered mail and fax, and in light of that contention, Rule 4(i)(1) provides in pertinent part as follows:

When the national law . . . authorizes service upon a party not an inhabitant of or found within the state in which the court is held, and service is to be effected upon the party in a foreign county, it is also sufficient if service of the summons and complaint is made: . . . (D) by any form of mail, requiring a signed receipt, to be addressed and dispatched by the clerk of the court to the party to be served; or (E) as directed by order of the court.

Article XI, section 9(c) of the FSM Constitution provides that the "Chief Justice [of the FSM Supreme Court] . . . may: (c) establish rules of procedure and evidence." "Rules of court properly promulgated, and not exceeding the limitation of the court's rulemaking power, have the force of law." 20 Am. Jur. 2d Courts § 85 (1965). Since this rule has the force of law, then it follows that plaintiff may utilize any of the methods of service listed therein, including mail service requiring a signed receipt, if the rule applies.

However, although Rule 4(i)(1) of the FSM Rules of Civil Procedure specifically speaks to service upon a "party in a foreign country," neither in Rule 4(i)(1) nor any place else in the rule is there mention of service upon a foreign government. Rule 4 of the United States Federal Rules of Civil Procedure is materially identical to Rule 4 of the FSM Rules of Civil Procedure for all purposes presently under discussion. Specifically, Federal Rule 4 (i)(1) is the same verbatim as Rule 4(i)(1) of the FSM Rules )

[9 FSM Intrm. 372]

neither addresses the question of service upon a foreign government or its agents.

In the United States, Congress addressed this state of affairs in 1976 by enacting the Foreign Sovereign Immunities Act, which makes specific provision for service upon foreign governments. 4A Charles Alan Wright & Arthur R. Miller, Federal Practice and Procedure § 1111, at 209 (2d ed. 1987). However, prior to the enactment of the Foreign Sovereign Immunities Act, the fact that Federal Rule 4 did not address service on a foreign government or its agents did not mean that these entities were not subject to service.2 As the court in Petrol Shipping Corp. v. Kingdom of Greece, 360 F.2d 103, 108 (2d Cir. 1965) noted, "the fact that Rule 4 does not provide a method for service on respondent [an agent of a foreign government] does not mean that no service could be effective." The Petrol Shipping court found that Rule 83 of the Federal Rules of Civil Procedure, which permits the court to "make and amend rules governing its practice not inconsistent with these rules," and which provides that "in all cases not provided for by rule, the district courts may regulate their practice in any manner not inconsistent with these rules," conferred adequate authority on the district court to prescribe an appropriate method of service. Id. The court held that service by ordinary mail on an agency of the Greek government to be adequate. Id. at 109.

The FSM Supreme Court has not adopted the equivalent of Rule 83 of the Federal Rules of Civil Procedure ) Rule 83 in the FSM Rules of Civil Procedure is designated as "vacant." However, the FSM Congress has enacted 4 F.S.M.C. 117, which contains language similar to that provided in Rule 83 of the Federal Rules of Civil Procedure, and provides that "[t]he Supreme Court . . . shall have the power to . . . make rules and orders, and do all acts, not inconsistent with law or with the rules of procedure . . . as may be necessary for the due administration of justice." Under this statutory provision, this court may prescribe the manner in which service may be had on Tonga and its agents in this case.

The complaint in this case was filed on March 31, 1999. The Certificate of Service dated September 23, 1999, and signed by Kosrae's counsel provides that the defendants were "were properly served by mail and fax." Fax service, obviously, is not a method recognized by Rule 4 of the FSM Rules of Civil Procedure. The staff person assisting plaintiff's counsel in her March 22, 2000, affidavit indicates that she served the defendants by "registered US Mail." Although she does not specify the date when this occurred, she further avows that she "forgot to request return receipts for mailings." The court reads this latter assertion to mean that she forgot to request return receipts from the recipients themselves, since attached to the motion for default are two "Receipts for Registered Mail." One shows mailing to the Chief Secretary and Secretary to the Cabinet, Prime Minister's Office, P.O. Box 62, Nuku'alofa, Tonga, and the other to Secretary for Foreign Affairs, also at the Prime Minister's Office. Both receipts bear a Kosrae postmark of sometime in November, 1999 ) the day in November is not clear on the copy. Kosrae's counsel, in his affidavit attached to Kosrae's response to the motion to dismiss, avows that in mid-December, defendants' counsel contacted him, and advised that he was considering representation of the defendants. Kosrae's counsel further avows that Tonga's Crown Legal Department contacted him shortly thereafter and advised that they would be filing something with the court. By Kosrae's calculation in its motion for entry of default, defendants acknowledged receipt of service sometime in mid-December. Kosrae applied for a default on February 23, 2000, alleging that

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at least 60 days had passed since the acknowledgment of the receipt of service.3 On March 14, 2000, defendants filed their motion to dismiss.

The court finds that the service in this case, which falls outside the scope of Rule 4 of the FSM Rules of Civil Procedure, was sufficient. Kosrae mailed the defendants a copy of the complaint and summons, and the defendants had actual notice of the complaint, since they filed their motion to dismiss. At the same time, Kosrae does not offer a formal proof of service, such as a receipt for a summons and complaint signed by the defendants, to confirm service prior to March 14, 2000, which was when the defendants filed their motion to dismiss. Under these circumstances, the court denies Kosrae's application for default.

b. Sovereign Immunity

Defendants contend that because Tonga is a sovereign nation, Tonga and its agents are immune from suit absent its consent to suit. Defendants also contend that Tonga has not consented to being sued.

The determination whether Tonga and its agents are immune from suit is a decision that is better made by the executive branch of the FSM government. Article X, section 2 of the FSM Constitution provides that "[t]he following powers are expressly delegated to the President: . . . (b) . . . to conduct foreign affairs . . . in accordance with national law." Further, "[w]hether a party claiming immunity from suit has the status of a foreign sovereign is a matter for determination by the executive branch of the government and is outside the competence of the courts." 45 Am. Jur. 2d International Law § 55, at 397 (1969) (footnote omitted). In the United States in 1976, the Foreign Sovereign Immunities Act of 1976 eliminated the role of the State Department in determining questions of foreign sovereign immunity. Id. § 55 (Supp. 1992). However, before 1976, the procedure in the United States was for the executive branch, acting by the State Department, to make a determination whether the immunity should be accorded, and the court would thereafter recognize a suggestion to that effect made by the attorney general upon the request of the State Department. Id. § 55, at 397. 4

In this case, the court is aware of no FSM statute which speaks to whether or not the court should recognize Tonga's immunity from suit as a sovereign state.5 The court therefore requests that the executive branch make that determination, and in order to give the FSM Department of Foreign

[9 FSM Intrm. 374]

Affairs the opportunity to make this decision, the court will postpone any further proceedings in this case until 60 days from the date of this order. The clerk of the court is directed to transmit copies of this order to the Secretary of Foreign Affairs and the Secretary of Justice.

Given the foregoing ruling on the sovereign immunity question, it is premature to address the defendants' Rule 56 motion, which is therefore denied.

1. Hence, § 203 speaks in terms of "persons" over whom the Supreme Court may exercise jurisdiction; § 204(1) speaks of "[a]ny person, corporation, or legal entity" who engages in the enumerated acts; and § 204(2) speaks of "persons" who may be personally served. Black's Law Dictionary 532 (6th ed. 1990) provides that "`entity' includes . . . [a] foreign government." Section 204(1) therefore encompasses Tonga. However, because the court ultimately finds that personal service under § 204(2) is not mandatory, the court will not address any implications of the more expansive "person, corporation, or legal entity" of § 204(1) versus the arguably more restrictive "person" used in §§ 203 and 204(2).

2. It also bears mentioning at this point that the question of proper service is different from the question of the validity of the immunity defense: "The issue of sovereign immunity does not involve a jurisdictional defect in the same sense as does improper service of process. Rather, the defense of sovereign immunity technically comes into consideration only after jurisdiction is acquired and simply provides a ground for relinquishing jurisdiction previously acquired." 4A Charles Alan Wright & Arthur R. Miller, Federal Practice and Procedure § 1111, at 199 n.3 (1987) (citing Ex parte Peru, 318 U.S. 578, 587-88, 63 S. Ct. 793, 799, 87 L. Ed. 1014, 1020 (1943)).

3. Section 204(3) of Title 4 of the FSM Code provides that "[n]o default shall be entered until the expiration of at least 30 days after service" where a defendant is outside the FSM. This is different from Rule 12(a) which provides that an answer is to be filed within 20 days of service.

4. Historically in the U.S., prior to the "Tate Letter," which appears to date from about 1952, virtually all actions against a foreign government or agency were barred. However, the Tate Letter expressed a general policy that a foreign government's "sovereign acts" would be accorded immunity, but not its "commercial acts." The purpose of the Foreign Sovereign Immunities Act was to remove some of the State Department's responsibility for such decisions, and place it in the courts. 4A Wright & Miller, supra note 2, § 1111, at 200-02 (1987).

5. Section 203(2) of Title 10 of the FSM Code provides that "[i]nternational organizations, their property, and their assets wherever located, and by whomsoever held, shall be accorded the same immunity from suit and every form of judicial process as is accorded by the Government of the Federated States of Micronesia to foreign governments." Still an open question, however, is the nature of the immunity afforded to foreign governments by the FSM, which this statutory section does not address.