THE SUPREME COURT OF THE
FEDERATED STATES OF MICRONESIA
APPELLATE DIVISION
Cite as FSM v. Louis, 9 FSM Intrm. 474 (App. 2000)

[9 FSM Intrm. 474]

FEDERATED STATES OF MICRONESIA,
Appellant,

vs.

SIKBERT LOUIS, as Personal Representative
of the Estates of Jeffrey and Jimmy Louis,
Appellees.

APPEAL CASE NO. C3-1998

OPINION

Argued:  April 30, 1999
Decided:  August 15, 2000

BEFORE:
Hon. Andon L. Amaraich, Chief Justice, FSM Supreme Court
Hon. Richard H. Benson, Associate Justice, FSM Supreme Court
Hon. Judah C. Johnny, Temporary Justice, FSM Supreme Court*

*Chief Justice, Pohnpei Supreme Court, Kolonia, Pohnpei

APPEARANCES:
For the Appellant:     Julia Fries, Esq. (brief)
              Amy J. Fitzpatrick, Esq. (argued; supplemental brief)
                                    Assistant Attorney General
                                    FSM Department of Justice
              P.O. Box PS-105
              Palikir, Pohnpei FM 96942

[9 FSM Intrm. 475]

For the Appellee:      Midasy Aisek, Esq. (brief)
                                    Frank Casiano (brief)
              Micronesian Legal Services Corporation
                                    P.O. Box D
              Weno, Chuuk FM 96942
 
                                     and
 
                                    Andrew Sprenger, Esq. (argued; supplemental brief)
                                    Micronesian Legal Services Corporation
                                    P.O. Box 129
                                    Kolonia, Pohnpei FM 96941

*    *    *    *

HEADNOTES
Debtors' and Creditors' Rights
     The national government is not subject to writ of garnishment or other judicial process to apply funds or other assets it owes to a state to satisfy the state's obligation to a third person.  FSM v. Louis, 9 FSM Intrm. 474, 479 (App. 2000).

Constitutional Law ) Case or Dispute
     Our Constitution's "case or dispute" clause, FSM Const. art. XI, 6, mirrors the U.S. Constitution's "case or controversy" clause.  FSM v. Louis, 9 FSM Intrm. 474, 481 (App. 2000).

Constitutional Law ) Case or Dispute
     Article XI, section 6 of the Constitution restricts the FSM Supreme Court's jurisdiction to cases and disputes and the court is thereby precluded from making policy pronouncements on the basis of hypothetical or academic issues.  FSM v. Louis, 9 FSM Intrm. 474, 481 (App. 2000).

Constitutional Law ) Case or Dispute; Constitutional Law ) Interpretation
     While our Constitution's wording is otherwise similar to that in article III, section 2, clause 1 of the U.S. Constitution, the FSM national courts have jurisdiction over "cases" and "disputes" while the U.S. federal courts have jurisdiction over "cases" and "controversies," but no significance can be attached to the difference between  controversies and disputes.  The FSM Constitution's case or dispute clause is thus similar to the U.S. Constitution's case or controversy clause.  FSM v. Louis, 9 FSM Intrm. 474, 482 (App. 2000).

Constitutional Law ) Case or Dispute; Constitutional Law ) Case or Dispute ) Mootness
     A case must be one appropriate for judicial determination, that is, a justiciable controversy, as distinguished from a difference or dispute of a hypothetical or abstract character, or one that is academic or moot.  The controversy must be definite and concrete, touching the legal relations of parties having adverse legal interests.  FSM v. Louis, 9 FSM Intrm. 474, 482 (App. 2000).

Constitutional Law ) Case or Dispute; Jurisdiction
     The Constitution does not authorize the FSM Supreme Court to declare the law anytime a justice feels moved to do so or authorize the court to respond to every request for a legal ruling directed to it by citizens.  Instead, Article XI, section 6 of the Constitution grants jurisdiction, and the power to exercise judicial powers, only in five specific kinds of "disputes" and five types of "cases."  FSM v. Louis, 9 FSM Intrm. 474, 482 (App. 2000).

[9 FSM Intrm. 476]

Constitutional Law ) Case or Dispute ) Mootness
     The FSM Supreme Court's lack of jurisdiction over, or inability to decide, a moot case is firmly rooted in the FSM Constitution's requirement that there be a case or a dispute.  A case or dispute becomes moot when the parties lack a legally cognizable interest in the outcome.  FSM v. Louis, 9 FSM Intrm. 474, 482 (App. 2000).

Constitutional Law ) Case or Dispute ) Mootness
     If an appellate court finds that any relief it could grant would be ineffectual, it must treat the case as moot.  FSM v. Louis, 9 FSM Intrm. 474, 482 (App. 2000).

Appeal and Certiorari ) Decisions Reviewable; Constitutional Law ) Case or Dispute ) Mootness
     When even if the court reversed the garnishment order, any relief it could grant the FSM on the sovereign immunity issue would be ineffectual since 6 F.S.M.C. 707 makes the FSM no longer subject to garnishment of funds it owes to a state, and when, although the general rule is that the payment of a judgment does not make an appeal moot, the FSM has stated that it will not seek repayment of the funds that it paid the plaintiff, the FSM would have no interest in the case's outcome and the issues it raised on appeal are moot.  FSM v. Louis, 9 FSM Intrm. 474, 482-83 (App. 2000).

Constitutional Law ) Case or Dispute ) Mootness
     An exception to the mootness doctrine exists when there is a situation in which an otherwise moot case may have a continuing effect on future events, including future litigation.  FSM v. Louis, 9 FSM Intrm. 474, 483 (App. 2000).

Appeal and Certiorari ) Decisions Reviewable; Constitutional Law ) Case or Dispute ) Mootness; Sovereign Immunity
     When other trial division cases recognize the principle of sovereign immunity and the trial court decision appealed from only observed that in the absence of a specific expression by the legislature, sovereign immunity would not prevent the court from garnishing property held by the FSM for a state, when the constitutionality of the FSM's sovereign immunity statute was not before the court, and when the FSM served only as a mere garnishee in a situation which Congress has prevented from recurring by the enactment of 6 F.S.M.C. 707, the trial court decision will not effect future litigation involving the FSM and the FSM's appeal is thus moot.  FSM v. Louis, 9 FSM Intrm. 474, 483-84 (App. 2000).

*    *    *    *

COURT'S OPINION
ANDON L. AMARAICH, Chief Justice:
     This appeal arises from a trial court's order garnishing funds that the Federated States of Micronesia (the "FSM") held for the State of Chuuk.  For the reasons set forth below, this appeal is hereby dismissed as moot.

Procedural History
     On June 7, 1995, the FSM Supreme Court's Chuuk State Trial Division (the "trial court") entered a judgment in favor of the plaintiff Sikbert Louis and against the defendant State of Chuuk in the amount of $150,000.  The judgment was entered based upon the parties' stipulated compromise and settlement, which provided, inter alia, that the State of Chuuk, in settlement of the plaintiff's civil rights claims, would pay the plaintiff the sum of $150,000.

     After Chuuk State failed to satisfy the judgment, the plaintiff, in September 1996, moved for an  

[9 FSM Intrm. 477]

Order in Aid of Judgment.  See 6 F.S.M.C. 1401 et seq.  The defendant did not oppose the motion.  On November 17, 1997, the trial court issued an Order in Aid of Judgment, in which it directed the FSM Secretary of Finance to withhold from the funds it was holding for Chuuk State, the full amount of the judgment, plus accrued interest. Louis v. Kutta, 8 FSM Intrm. 208 (Chk. 1997). The Order further required to the FSM Secretary of Finance to pay these funds to the plaintiff. 1

     Although the State of Chuuk did not oppose the trial court's November 17, 1997 Order, the FSM did.  The FSM filed a motion captioned as Request for Stay and Reconsideration of the Court's November 17, 1997 Order.  In its motion, the FSM argued that there was no authority for garnishment in the FSM and that even if there were, it would not permit the garnishment of funds that the FSM held for the State of Chuuk, or any other state.  The FSM further argued that most of the funds it held for Chuuk State were earmarked for special projects, pursuant to the Compact of Free Association.  As such, any disbursement of those funds for any other purpose would result in a violation of the various treaties that the FSM was a party to.  The FSM also objected to the manner in which the trial court had proceeded, including the lack of notice and an opportunity to be heard before any such order of garnishment was issued.  The FSM requested permission to file a more comprehensive brief on the issues set forth in its Motion for Reconsideration.

     The trial court, on January 15, 1998, issued an Order staying the enforcement of its previously issued Order of November 17, 1997.  Louis v. Kutta, 8 FSM Intrm. 228 (Chk. 1998).  In doing so, however, the trial court, noting the FSM's assertion that most of the money it held for Chuuk State was earmarked, found that the use of those funds not otherwise earmarked would not result in a violation of any treaty, a result that it sought to avoid.  The trial court ordered the FSM to set such funds aside until the issues in this case had been resolved and to also identify the amount of such funds that it had set aside when it submitted the more comprehensive brief on the issues presented in its Motion for Reconsideration.  In addition, the trial court added the FSM as a party to the litigation, thereby ensuring that the FSM would be afforded notice as to all future proceedings in the case, and directed all of the parties to submit briefs on the issues raised by the FSM in its motion for the trial court to reconsider its Order of November 17, 1997.

     After the parties submitted their briefs, the trial court, on May 15, 1998, held a hearing on the plaintiff's motion for an Order in Aid of Judgment.  At that hearing, the trial court heard from the parties, including the FSM, as to whether the funds that the FSM held for Chuuk State could be garnished to satisfy the judgment in the case. The Court also heard testimony from the Directress of the Chuuk State Treasury as to Chuuk's ability to satisfy the judgment and the fastest manner that that action could be accomplished, including the use of funds held by the FSM for Chuuk State.

[9 FSM Intrm. 478]

     Following the hearing, the trial court entered an Order on July 6, 1998.  Louis v. Kutta, 8 FSM Intrm. 312 (Chk. 1998).  In it, the trial court stated that it was modifying its previously entered Order in Aid of Judgment.  The trial court ruled that, based upon the May 15, 1998, hearing, it had determined that the state of Chuuk had the ability to satisfy the $150,000 judgment in question, which, on July 3, 1998, totaled some $183,250.07, with accrued interest.  The trial court further found that the fastest manner for the State of Chuuk to do so was for the FSM Secretary of Finance to pay to the plaintiff, the sum of $150,000, which was the principal amount of the judgment, along with an additional $33,250.07, which was the amount of post-judgment interest that had accrued up to July 3, 1998.  The trial court also noted that additional post judgment interest would accrue at the rate of nine percent per annum for each day that the judgment went unsatisfied.

     In rendering its decision, the trial court considered and rejected the four arguments presented by the FSM.  First, the trial court stated that it disagreed with the FSM that it was acting as an advocate, rather than impartial trier of fact, when it ordered a remedy . garnishment . that had not been requested by the plaintiff. According to the trial court, it had an interest in ensuring that its Orders were complied with.  Louis, 8 FSM Intrm. at 138.

     Second, the trial court, citing to Bank of Guam v. Elwise, 4 FSM Intrm. 150, 152 (Pon. 1989), determined that garnishment did exist in the FSM.  Louis, 8 FSM Intrm. at 319.  In Elwise , the Court determined that "garnishment of wages is within the power of the Court and is an acceptable means for enforcing a judgment."Elwise, 4 FSM Intrm. at 152.

     Third, the trial court ruled that principals of sovereign immunity did not make the FSM immune from garnishment.  Louis, 8 FSM Intrm. at 319-21.  The trial court's Order acknowledged that the provisions of 6 F.S.M.C. 701 et seq., allow for certain actions against the FSM, but found that there was no provision in the FSM Constitution that recognized sovereign immunity.  The trial court, citing to Panuelo v. Pohnpei, 2 FSM Intrm. 150 (Pon. 1986), stated that common law, as it exists today, furnishes no basis for courts to infer that sovereign immunity exists.  As such, in the absence of a constitutional provision specifically providing for sovereign immunity, the trial court would not create one.  Louis, 8 FSM Intrm. at 321.

     Lastly, the trial court held that any concerns the FSM had about the efficient administration of government would not overshadow the Court's efforts to satisfy the judgment in the case through the garnishment of funds.  Louis, 8 FSM Intrm. at 322.

     On August 14, 1998, the FSM filed its Notice of Appeal, in which it raised three issues for appeal.  First, the FSM questioned whether garnishment of public property was an available remedy in the FSM.  Second, the FSM queried the extent to which sovereign immunity exists in the FSM and its relationship to a garnishment proceeding which involved the FSM as a garnishee.  Lastly, the FSM suggested that, in situations when the supremacy clause in the FSM Constitution applies, the FSM Supreme Court ought to address orders directly to a state treasurer instead of issuing an order of garnishment to the FSM, as was the case here.

     Thereafter, on November 17, 1998, the FSM filed its appellant brief.  In its brief, the FSM explained that on November 11, 1998, before filing its brief, it satisfied the judgment in question, in full, from funds that it had previously set aside, as required by the trial court.  The FSM maintains that it paid the judgment under protest.  The appellee then filed its brief on December 28, 1998, and the FSM filed its reply brief on January 29, 1999.  Oral argument was then scheduled for April 30, 1999, at 10:00 a.m.

     Before oral argument occurred, however, the FSM Congress, on April 16, 1999, amended Title

[9 FSM Intrm. 479]

6 of the FSM Code by enacting a new provision at Section 707:

Section 707.  Garnishment of funds or other assets owed by the National Government to a State.  The National Government of the Federated States of Micronesia shall not be subject to writ of garnishment or other judicial process to apply funds or other assets owed by it to a State of the Federated States of Micronesia to satisfy an obligation of the State to a third person.  Nothing herein shall imply that authority exists to issue a writ of garnishment or other process against the National Government in any other circumstance.

Pub. L. No. 10-142 (to be codified at 6 F.S.M.C. 707).

     Because of the apparent effect that this legislation may have had on the matter at hand, coupled with the fact that the FSM had satisfied the judgment, albeit it under protest, this Court, on April 27, 1999, issued a notice inviting the parties to submit supplemental briefs as to whether this appeal should be dismissed as moot.

     On April 28, 1999, the FSM submitted its brief.  On April 30, 1999, shortly before oral arguments had begun, the appellee filed its brief.  At the oral arguments, counsel for the FSM acknowledged that the FSM had paid the plaintiff, thereby satisfying the judgment.  Counsel for the FSM further stated that it was highly unlikely that the FSM would request a return of the funds in the event that the trial court's order was reversed and remanded.  Counsel for Louis stated that there would be no issue on appeal if the FSM was not seeking a refund of the money that it had paid. Counsel also stated that the case was moot based upon the change in the law, which now prevented any garnishment of funds that the FSM holds for any state.

     Following oral arguments, this Court, based upon counsels' desire to further research the issue of mootness, issued a Scheduling Order in which it invited the parties to submit further briefs on the issue of whether the case was moot.  The FSM filed its brief on June 10, 1999 in which it definitively stated that it would not seek a return of the funds.  Louis filed his brief on July 2, 1999.  The FSM did not file a reply.

The Appellant
     In addressing the issue of mootness, the FSM, in its April 28, 1999, brief asserted that the issue of whether funds held by the FSM for a state can be subject to garnishment is not moot because the law in question, 6 F.S.M.C. 707, is not retroactive in its application.  Moreover, the FSM argued that the law could be changed or amended through future legislation.  The FSM also argues that the appeal is not moot because it paid the funds to the plaintiff, under protest.  The FSM further states that even if the issues in the case were deemed moot, the trial court erroneously ruled that sovereign immunity does not exist in the FSM.  The FSM requests this Court to reverse this portion of the trial court order under an exception to the mootness doctrine.

     In its supplemental brief submitted on June 10, 1999, after oral arguments, the FSM maintains that the newly enacted statute, 6 F.S.M.C. 707, prohibiting garnishment of FSM funds owed to a state, is not retroactive in its application.  As such, the FSM argues that the trial court order is now null and void.  In addition, the FSM affirmatively states that it is not seeking a return of the funds that it paid in response to the garnishment order.  From there, the FSM argues that in the United States, when an appeal has been rendered moot by a change of law during the pendency of an appeal, and the reviewing court has determined that there is no longer a live controversy between the parties before it, the practice of the reviewing court is to vacate or reverse the judgment and to remand the case with directions to dismiss.  In support of this assertion, the FSM cites Frank v. Minnesota Newspaper Ass'n,

[9 FSM Intrm. 480]

490 U.S. 225, 109 S. Ct. 1735, 104 L. Ed. 2d 264 (1989) (citing United States v. Munsingwear, Inc., 340 U.S. 36, 71 S. Ct. 104, 96 L. Ed. 36 (1950)).

     In Frank, both parties challenged the applicability of a law prohibiting the publication of certain advertisements related to lotteries and prize lists.  The appellant challenged a portion of the trial court ruling on the applicability of the statute to prize lists and the appellee cross-appealed, challenging the portion of the trial court ruling related to advertisements.  Following the trial court ruling, however, the United States Congress passed legislation to allow for the publication of certain advertisements of prize lists that previously were unpublishable.  Because this change in legislation was favorable to the appellee, it stated that it would forgo any claim to the declaratory and equitable relief sought in its complaint.  The United States Supreme Court found that there was no longer any live controversy and that the appeal was moot.  The United States Supreme Court, citing United States v. Munsingwear, Inc., 340 U.S. 36, 71 S. Ct. 104, 95 L. Ed. 36 (1950) vacated the trial court order and remanded the case with instructions to dismiss the portions of the complaint remaining on appeal.  Frank, 490 U.S. at 227, 109 S. Ct. at 1738, 104 L. Ed. 2d at 266.

     Arguing in the alternative, the FSM states that if the Court does not vacate the trial court order, then the Court should reverse that portion of the trial court ruling which purportedly concluded that sovereign immunity does not exist in the FSM. The FSM maintains that the trial court ruling was clearly erroneous given the existence of the Sovereign Immunity Act, 6 F.S.M.C. 701 et seq., as recognized in Chuuk v. Secretary of Finance, 7 FSM Intrm. 563, 568 (Pon. 1996) (national government waived its sovereign immunity in certain cases), aff'd on other grounds, 9 FSM Intrm. 424 (App. 2000); Dorval Tankship, Pty, Ltd. v. Department of Finance, 8 FSM Intrm. 111, 114-15 (Chk. 1997) (case is properly brought under the government's waiver of sovereign immunity).

     The FSM maintains that while Article III of the United States Constitution would prohibit a reviewing court from deciding such an issue under the circumstances presented here, there is no such prohibition in the FSM Constitution prohibiting this Court from addressing the issue.  The FSM explains that Article III of the United States Constitution extends the power of the judiciary to cases or controversies.  In contrast to that provision of the United States Constitution, the FSM contends that the FSM Constitution does not contain a "`case or controversy'" clause.  The FSM claims that the only case in the FSM addressing the mootness doctrine, Berman v. FSM Supreme Court (II), 7 FSM Intrm. 11, 16 (App. 1995), did not address the basis for applying the United States' rationale for adopting the case or controversy requirement.

     Moreover, the FSM argues that even if the case or controversy requirement of the United States Constitution is applied in the FSM, that doctrine has exceptions which would apply in this case.  The FSM states that the courts in the United States will address otherwise moot issues when they involve cases capable of repetition.  See Murphy v. Hunt, 455 U.S. 478, 102 S. Ct. 1181, 91 L. Ed. 2d 353 (1982) ("`capable of repetition, yet evading review'" exception to the mootness doctrine exists when the challenged action was too short in its duration to be fully litigated and the complaining party can reasonably expect to be subject to the same action); Roe v. Wade, 410 U.S. 113, 93 S. Ct. 705, 35 L. Ed. 2d 147 (1973) (claim by pregnant woman who comes to term challenging constitutionality of abortion statute is not moot under the "`capable of repetition, yet evading review doctrine'").

     In addition, the FSM cites an additional exception to the mootness doctrine, in which a decision by a lower court may have continuing effects of future events. Citing Storer v. Brown, 415 U.S. 724, 94 S. Ct. 1274, 39 L. Ed. 2d 714 (1974), the FSM maintains that an appeal from an otherwise moot decision 'in which the appellate court cannot give effectual relief' will be addressed when the trial court ruling may have a continuing effect on future events.  In Storer, candidates seeking a position on a ballot challenged the constitutionality of a state law that prevented their names on an election

[9 FSM Intrm. 481]

ballot.  The United States Supreme Court, in addressing the constitutionality of the statute, held that the fact that the election had occurred during the pendency of the case did not render the would-be candidates' claims as moot.  The construction of the statute, understanding its operation and possible constitutional limitations when applied in a case would have the effect of simplifying future election challenges.  As such, the issues in the case should be addressed.  In this case, the FSM states that the trial court ruling that there is no sovereign immunity in the FSM is, if it is not reviewed and vacated, likely to have continuing effects on future litigation that involves the FSM.

The Appellee
     In its brief, filed on April 30, 1999, Louis requests that this Court dismiss this case as moot.  In support of this request, Louis, citing Berman v. FSM Supreme Court (II), 7 FSM Intrm. 11, 16 (App. 1995), argues that because of the change in law prohibiting the garnishment of funds held by the FSM for a state, there is no longer any controversy in this case.  Louis further maintains that all three of the issues that the FSM raised in its notice of appeal have been satisfied as a result of the enactment of 6 F.S.M.C. 707.  Louis did not, however, provide relevant information as to exactly how the change in law satisfied the issues that the FSM raised in its notice of appeal.

     With regard to the arguments made by the FSM in its April 28, 1999 brief, Louis states that the legislation in question is silent on the issue of its retroactive application.  According to Louis, however, courts are loath to operate a statute retroactively.  Louis therefore concludes that 6 F.S.M.C. 707 must operate prospectively.  Louis concludes, without further explanation, that because this favors the appellant, this appeal is now moot.

     Louis further argues that the FSM has failed to provide any legal authority to support its claim that this appeal is not moot because it paid the underlying judgment under protest.  Louis notes that the benefactor of the garnished funds, Chuuk State, has elected to not file an appearance in this appeal.  This, Louis maintains, resulted in a waiver by Chuuk State to any claim over the garnished funds.

     Lastly, Louis states that FSM has not provided any evidence showing that Congress intends to change or otherwise modify 6 F.S.M.C. 707.  Louis argues that the FSM's claim that the newly enacted law might change is purely speculative.

     Following oral arguments, Louis filed a supplemental brief on July 2, 1999.  In it, Louis states that he resubmits his April 30, 1999 brief, in which he requested this Court to dismiss this appeal as moot.

Discussion
A.  Mootness
     The FSM contends that the FSM Constitution does not have a "case or controversy" clause like the U.S. Constitution and that consequently we may adjudicate an otherwise moot case.  This contention is without merit.

     Our Constitution's "case or dispute" clause, FSM Const. art. XI, 6, mirrors the U.S. Constitution's "case or controversy" clause.  In Innocenti v. Wainit, 2 FSM Intrm. 173, 178 (App. 1986), the appellate division recognized that article XI, section 6 of the Constitution restricted the FSM Supreme Court's jurisdiction to cases and disputes and that the court was "thereby precluded from making policy pronouncements on the basis of hypothetical or academic issues."  In Hawk v. Pohnpei,

[9 FSM Intrm. 482]

4 FSM Intrm. 85, 912 (App. 1989), the appellate division recognized that while our Constitution's wording was otherwise similar to that in article III, section 2, clause 1 of the U.S. Constitution, the FSM national courts had jurisdiction over "cases" and "disputes" while the U.S. federal courts had jurisdiction over "cases" and "controversies."  The Hawk court concluded that no significance could be attached to the difference between controversies and disputes.  Id.  There is thus a case or dispute clause in the FSM Constitution, similar to the case or controversy in the United States Constitution.

     The trial division, when considering the similar jurisdictional language in both the U.S. and FSM Constitution, concluded that:

A case must be one "appropriate for judicial determination," that is, a "justiciable controversy," as distinguished from a "difference or dispute of a hypothetical or abstract character," or one that is "academic or moot."  The controversy must be "definite and concrete, touching the legal relations of parties having adverse legal interests."

Ponape Chamber of Commerce v. Nett Municipal Gov't, 1 FSM Intrm. 389, 401 (Pon. 1984), (quoted with approval in In re Sproat , 2 FSM Intrm. 1, 5 (Pon. 1985)).See also In re Sproat, 2 FSM Intrm. at 4 n.2.

The Constitution does not authorize this Court to declare the law anytime a Justice feels moved to do so.  Nor may the Court respond to every request for a legal ruling directed to it by citizens.  Instead, Article XI, Section 6 of the Constitution grants jurisdiction, and the power to exercise judicial powers, only in five specific kinds of "disputes" and five types of "cases."

In re Sproat, 2 FSM Intrm. 1, 5 (Pon. 1985) (footnotes omitted).

     Thus, the FSM Supreme Court's lack of jurisdiction over, or inability to decide, a moot case is firmly rooted in the FSM Constitution's requirement that there be a case or a dispute.  This Court has previously stated that a case or dispute becomes moot when the parties lack a legally cognizable interest in the outcome.Berman v. FSM Supreme Court (II), 7 FSM Intrm. 11, 16 (App. 1996) (citing 32 Am. Jur. 2d Federal Practice and Procedure 332 (1982)).  If an appellate court finds that any relief it could grant would be ineffectual, it must treat the case as moot.  Id.

     In Berman, the plaintiff sued this Court alleging that the Court's admission criteria unconstitutionally discriminated against non-citizens.  The plaintiff also challenged the grading of her bar examination.  While her claim was pending, however, she successfully passed the bar examination.  The trial court, therefore concluded that any assertions she raised about the bar examination criteria and grading employed by the FSM Supreme Court were now moot.  On appeal, this Court concurred noting that by her admission to the FSM bar, any relief that this Court could afford her would be ineffectual.  Berman, 7 FSM Intrm. at 16.

     Like Berman, the issues that the FSM has presented on appeal concerning the garnishment of funds held by the FSM for a state, have become moot.  By enacting 6 F.S.M.C. 707, Congress had made clear that funds held by the national government that are owed to a state may not be subject to garnishment. Thus, and regardless of whether 6 F.S.M.C. 707 is applied retroactively, the trial court

[9 FSM Intrm. 483]

cannot now, on remand, order the garnishment of the same funds held by the FSM. Because the FSM would no longer be subject to garnishment if this case were reversed, any relief that we could grant the FSM on appeal would be ineffectual. Moreover, the enactment of 6 F.S.M.C. 707 prevents any trial court from garnishing funds held by the FSM that are owed to a state, regardless of the trial court's treatment of the issue of sovereign immunity.

     In addition, although the general rule is that the payment of a judgment does not make an appeal moot, see In re Cascade Roads, Inc., 34 F.3d 756, 759-61 (9th Cir. 1994), the FSM has stated that it will not seek a repayment of the funds that it paid to the plaintiff.  Given this position, coupled with the enactment of 6 F.S.M.C. 707, again, we cannot see what interest, if any, the FSM would have in the outcome of this case.  If we were to reverse the trial court order, and the FSM were to affirmatively seek a return of any of the funds that it paid to the plaintiff, our analysis might be different.  That the FSM claims to have paid the funds in question under protest does not change this result.  It is the FSM's subsequent position, that it would not seek a repayment of the funds if the case were remanded, that overshadows any earlier protest made by the FSM at the time it paid the judgment.  Under these circumstances, we find that the issues raised on appeal in this case are moot.

B.  Sovereign Immunity
     The FSM is correct in noting that United States courts have recognized exceptions to the mootness doctrine.  See, e.g., Murphy v. Hunt, 455 U.S. 478, 102 S. Ct. 1182, 71 L. Ed. 2d 353 (1982); Mandel v. Bradley, 432 U.S. 173, 97 S. Ct. 2238, 53 L. Ed. 2d 199 (1976); Storer v. Brown, 415 U.S. 724, 94 S. Ct. 1274, 39 L. Ed. 2d 714 (1974); Roe v. Wade, 410 U.S. 113, 93 S. Ct. 705, 35 L. Ed. 2d 147 (1973).  Although we have not previously addressed these exceptions, we have acknowledged that the exceptions are present.  See Berman v. FSM Supreme Court (II), 7 FSM Intrm. 11, 16 (App. 1996) (exceptions to the mootness doctrine exist, but because they were not raised they were not addressed).

     The most notable exception for this appeal, and that presented by the FSM in its brief, is a situation in which an otherwise moot case may have a continuing effect on future events, including future litigation.  The FSM opines that the trial court, in issuing its writ of garnishment, concluded that the principle of sovereign immunity did not exist in the FSM.  According to the FSM, not only is this incorrect, but the case law in the FSM from other trial division cases recognizes that there is sovereign immunity in the FSM.  See, e.g., Chuuk v. Secretary of Finance, 7 FSM Intrm. 563 (Pon. 1996), aff'd on other grounds, 9 FSM Intrm. 424 (App. 2000); Dorval Tankship Pty, Ltd. v. Department of Finance, 8 FSM Intrm. 111 (Chk. 1997).  The FSM requests that we reverse that portion of the trial court's Order that it claims erroneously concluded that there is no sovereign immunity in the FSM.

     Upon closer review, however, we do not find that the trial court's Order will have an effect on future events, including any future litigation involving the FSM government.  Indeed, the trial court did not specifically rule that there was no sovereign immunity in the FSM.  Rather, the trial court's Order only observed that in the absence of a specific expression by the legislature, the principle of sovereign immunity would not prevent the Court from garnishing property held by the FSM for a state.  Although the FSM is correct in noting Congress' enactment of a sovereign immunity statute, 6 F.S.M.C. 701 et seq., which limits the types of claims that may be brought against the FSM, that provision of law did not, at the time that the trial court issued its Order, prohibit a court from garnishing funds held by the FSM for a state.

     Moreover, the constitutionality of the FSM's sovereign immunity statute at 6 F.S.M.C. 701 et seq., was not before the Court.  As such, that provision of law remains in effect.  Thus, we see nothing in the trial court's Order that would prevent the FSM from asserting sovereign immunity in future cases.  

[9 FSM Intrm. 484]

Indeed, as the trial court itself acknowledged, sovereign immunity is a principal that places limitations on the manner and amount that the sovereign can be held liable. In this case, the FSM was not found liable and lost no money.  Instead, the FSM was merely subject to a court order that called for the garnishment of funds that it held for Chuuk State, the party who was found liable and who suffered a loss as a result of its liability.  The FSM served only as a mere garnishee in a situation which the FSM Congress has now prevented from recurring due to the enactment of 6 F.S.M.C. 707.  In short, we find that there will be no effect on future events, including future litigation involving the FSM government, as a result of the trial court's decision.

Conclusion
     For the reasons set forth above, we find that the issues in this appeal are moot. Accordingly, we dismiss this appeal with instructions that the plaintiff file a notice of satisfaction of judgment with the trial court, in the event that it has not already done so.
 
 
Footnotes:
 
1.  Before considering the plaintiff's motion for an Order in Aid of Judgment, the trial court required the parties to submit briefs on "the effect of Article VIII, 2 of the Chuuk Constitution, the Judiciary Act of 1990, Chuuk S.L. 190-08, 4, any other applicable law, and the practice of the FSM Supreme Court, Trial Division, Chuuk State, on enforcing a judgment for money against Chuuk State.  The Court did this because the Chuuk Constitution provides that no public funds may be expended absent legislative approval, while the Judiciary Act provides that a Chuuk state court may not levy, either by execution or garnishment, against state property.  After receiving briefs from the parties, the trial court entered its Order in Aid of Judgment, in which it rejected Chuuk State's assertions that any efforts to satisfy the judgment in this matter would violate the Chuuk Constitution or the Chuuk State Judiciary Act.  The trial court explained that in light of the fact that the underlying cause of action in the case involved a violation of the plaintiff's civil rights, as provided for under the FSM Code, see 11 F.S.M.C. 701, the provisions of Chuuk law in question were inapplicable.  In other words, the trial court found that national law superseded state law.  Neither party, however, has challenged this aspect of the trial court's order.

2.  In the Reporter page 91 is inadvertently numbered and printed at page 92, and page 92 is numbered and printed at page 91.  This will, of course, be corrected in future printings of the Reporter.  The citation here is to the correct[ed] page.