March 7, 2011

By Bill Jaynes
The Kaselehlie Press

March 1, 2011 Pohnpei, FSM-On February 18 and 19, FSM Supreme Court Justice Dennis K. Yamase heard pre-trial arguments regarding the issuance of a preliminary injunction at the Chuuk State Trial Division of the Supreme Court of the Federated States of Micronesia in the matter of Chuuk State parties versus the FSM national government, some of its officials, and Tolensom (Tol) Chuuk parties (2011-1000).

Chuuk State parties filed the lawsuit because the National Government bypassed the Governor's Office and distributed Compact Infrastructure Program funds directly to Chuuk municipalities. The suit, which contains 39 counts also contends that Amanto Marsolo is the rightful Mayor of Tolensom rather than Kisauo Esa. The National Government gave Tolensom's share of the CIP funds to Kisauo Esa.

In a February 21 ruling Justice Yamase ordered that the lengthy list of defendants in the case are enjoined from any other expenditure of the Tolensom CIP funds which totaled $115,183.14 and was remitted from the FSM national government as a deposit into a Bank of Guam account, "probably at its Pohnpei Branch."

Plaintiffs are also arguing in their fi ling that the deposit of Tolensom funds in a bank not located in Chuuk is contrary to the Chuuk State Constitution.

That issue among others has not been decided and will not likely be decided for several months. Until then Justice Yamase has additionally ordered the freezing of any account opened for the benefi t of Tolensom Municipality in terms of disputed CIP funds.

Yamase's explanation of his ruling says, "All parties agree that these funds (the CIP funds) are the property of the respective municipalities and not the property of the Chuuk State government or of the FSM national government."

"The plaintiff's complaint, although it contains 39 counts, raises two broad claims. First, the plaintiffs allege that the national government does not have the power or the legal authority to remit the residual Chuuk municipal CIP funds directly to the municipal governments but must remit those funds to the Chuuk State government for it to distribute those funds to the respective municipalities. Second, they allege that regardless of whether the national government must remit the former CIP funds to the Chuuk State government, a purported Tolensom municipal government headed by purported Mayor Kisauo Esa is not the proper and lawful Tolensom entity and mayor who are entitled to receive and appropriate those funds but rather that the Tolensom municipal government headed (by) purported Mayor Amanto Marsolo is. To further confuse matters, defendant Kisauo Esa and Tolensom Municipality (as a defendant-counterclaimantcross- claimant) have counterclaimed against plaintiffs Amanto Marsolo, Governor Wesley Simina, and State of Chuuk and cross-claimed against defendant Federated States of Micronesia," Yamase wrote in his ruling granting in part the plaintiffs' application for preliminary injunction.

Defendants Kisauo Esa and the version of the Tol government that includes him as mayor have in fact filed a counterclaim and cross claims against Governor Wesley Simina, Chuuk State, Amanto Marsolo and the Federated States of Micronesia along with their response to the lawsuit.

Their response to the Marsolo and Chuuk law suit claims nine affirmative defenses including the fact that "issues have already been determined against the plaintiff or real party in interest in other cases, yet the plaintiff seeks to relitigate these issues. Additionally, the Chuuk State Supreme Court in Civil Action Number 114-2010, has determined that it is inappropriate for the Offi ce of the Chuuk State Attorney General to represent Amanto Marsolo, in his claim to be Mayor of Tolensom Municipality, and other State of Chuuk institutions."

Another of the affirmative defenses to the Chuuk law suit says that the Chuuk State Supreme Court has already issued orders invalidating Governor Simina's executive order of September 20, 2010, and determined that the presence of the Chuuk State Election Commission in Tol election was not authorized by law. It says that the plaintiffs in the FSM Supreme Court matter are seeking to re-litigate issues that have already been decided against them in another forum.

The response further argues that the plaintiffs have "unclean hands in their pursuit of this matter" and should be stopped from pursuing relief in their complaint. It goes further alleging that the "plaintiffs have engaged in a six year scheme or plan to defraud the named defendants of their rightful positions."

Esa and Tol are asking for an accounting of CIP funds to determine why only $2.3 million of just over $5.9 million owed to Chuuk municipalities was available to be paid out. Particularly they want an accounting of why, of the original $278,407 owed to Tol only $108,475.80 plus interest was available to be paid out.

They claim that $3.6 million that was in the possession of the FSM was already allotted to Chuuk State but that money was never distributed to the individual municipalities and that Governor Wesley Simina and Chuuk State converted the sum of $169,524.42 that was due to Tol and used it for their own ends and purposes.

The counter claim also points out that Tol loaned Chuuk State $460,365 in September of 2002 for an airport project and demands repayment of that loan plus interest at 5% which by September of 2005 had accrued to $59,054.75 and had additionally accrued to $123,982.71 beyond that figure by February 18 for a total of $183,037.46. Interest on that loan is accruing at the rate of $63.06 per day. "The State of Chuuk is having enormous financial difficulties, and may be unable to pay all of its debts. Tolensom Municipality seeks to be repaid now, so that it can receive repayment from current Chuuk State funds," the counter claim says.

None of the counter or cross claims have yet been considered by the FSM Supreme Court.

In its February 21 ruling, the FSM Supreme court stopped well short of issuing an injunction that would enjoin the national government or its officers from releasing municipal CIP funds to the various Chuuk municipalities since no other municipality other than Tolensom is a party to 2011-100. Further since plaintiffs do not claim that the national government still holds any Tolensom CIP funds but claim that the entire $115,183.14 has already been paid into a Tolensom held bank account there does not appear to be any possible future direct payments of CIP funds to Tolensom to restrain.

Where previous court rulings have ruled against granting an injunction if money damages could reverse harm done to a plaintiff, when the CIP funds in question are gone there are no other funds to replace them. "Irreparable harm would occur if these funds were spent and it later turned out that those expenditures were not made to satisfy the Tolensom municipal government's rightful obligations but were spent by an entity purporting to be the Tolensom municipal government for purposes not authorized by the proper Tolensom municipal government," the ruling said.

The question of "irreparable harm" is one of the benchmarks a court considers before it rules in favor of an injunction. "Public Interest" is another, and Justice Yamase ruled that public interest would strongly favor that Tol public funds be spent only for Tol public purposes.

"Balance of injuries" to the parties is another benchmark. Yamase reasoned that if the funds were frozen there would be no injury to the national government since they have already released the funds. He ruled that injury to Esa, Farawey, and Elias as officers in the purported Tolensom government that currently has those funds is not onerous since as purported municipal officials it is their duty to preserve municipal funds from unwarranted claims, and since, at worst, it may only delay payment of some Tolensom municipal obligations.

The fourth benchmark for a preliminary injunction is the plaintiffs' likelihood of success on the merits of their claims. Yamase said that since the other three factors weigh strongly in favor of a preliminary injunction the plaintiffs' likelihood of success on the merits "does not need to be great in order for the injunction to issue." Therefore the court needed only to decide if there is some likelihood of success.

Justice Yamase said in his ruling that though the court doesn't know the details of the Chuuk State Supreme Court proceeding it "can perceive that there is a possibility that it could result in Marsolo being the Tolensom mayor (or even as a remote possibility, that neither Marsolo nor Esa end up mayor because the State court orders a new election and some unexpected third person is chosen mayor by the electorate.)"

The Chuuk State Supreme Court issued a ruling on preliminary matters on the case numbered 114-2010 on February 4, 2011, in which Amanto Marsolo, who the Chuuk State Executive Branch recognizes as the Mayor of Tol is challenging Kisauo Esa's claim to be the actual, legal mayor of Tol.

In that case, the plaintiffs have fi led for an interlocutory appeal of its rulings in the pre-trial findings of fact and conclusions of law.

An interlocutory appeal (or interim appeal) is an appeal of a ruling by a trial court that is made before the trial itself has concluded. Essentially, if the court allows for an interlocutory appeal, as it will do only on "rare" occasions when an interim ruling is particularly prejudicial to the rights of one of the parties, nothing further is done on the main case until a third party judge rules on the validity of the ruling called into question.

The Chuuk State Supreme Court ruling that is the subject of the plaintiffs filing of a motion for an interlocutory appeal mentioned by Justice Yamase says:

FSM Supreme Court Chuuk State Trial Division Civil Action No. 2011-1000 is only at the stage of very early preliminary hearings. It will be several months before the actual trial on the matter can begin.