Source: http://fsmlaw.org/fsm/decisions/vol5/5fsm013_028.htm
Timestamp: 2018-01-23 05:30:08
Document Index: 126563395

Matched Legal Cases: ['§ 6', '§ 104', '§ 6', '§ 12', '§ 3', '§ 4', '§ 7']

FSM 5 Intrm. 013-028
Cite as Gimnang v. Yap,
5 FSM Intrm. 13 (App. 1991)
[5 FSM Intrm. 13]
FSM APP. NO. Y1-1990
Argued: August 1, 1990
Decided: February 21, 1991
Hon. Mamoru Nakamura, Designated Justice, FSM Supreme Court*
Hon. Martin Yinug, Designated Justice, FSM Supreme Court**
*Chief Justice, Supreme Court of the Republic of Palau, on this
Court by designation for this case
**Associate Justice, Yap State Court, on this Court by
For the Appellee: Cyprian Manmaw
Brian Tamanaha (Argued)
Jurisdiction - National Law
In the absence of any special limitation, issues that arise under any state or national law within the particular state may fall within the jurisdiction of the state and local courts of that state through state
[5 FSM Intrm. 14]
constitutional and statutory provisions which place the "judicial power of the state" within those courts. Gimnang v. Yap, 5 FSM Intrm. 13, 17 (App. 1991).
Article XI, sections 6(b) and 8 of the FSM Constitution place primary responsibility in the national courts for the kind of cases arising under the constitution or requiring interpretation of the Constitution, national law or treaties; and in disputes between a state and a citizen of another state, between citizens of different states, and between a state or a citizen, a foreign state, citizen, or subject but they do not prohibit state court jurisdiction over issues of national law or cases which arise under national law. Gimnang v. Yap, 5 FSM Intrm. 13, 18 (App. 1991).
Issues that arise under any state or national law within the particular state may fall within the jurisdiction of the state and local courts of that state through state constitutional and statutory provisions which place the "judicial power of the state" within those courts, subject to the possibility that state or local courts may sometimes be barred from exercising jurisdiction in some such cases by the action of Congress, of this Court, or of the state legislature. Gimnang v. Yap, 5 FSM Intrm. 13, 18 (App. 1991).
The national courts, in carrying out their judicial responsibilities, do have inherent power to certify issues, or to abstain partially or completely from exercising jurisdiction in a particular case, in order to permit state decisionmakers to resolve a particular issue or to exercise jurisdiction over part or all of a case. Gimnang v. Yap, 5 FSM Intrm. 13, 19 (App. 1991).
Article XI, section 8 of the FSM constitution does not bar state courts from exercising jurisdiction over cases which arise under national law within the meaning of article XI, section 6(b). Gimnang v. Yap, 5 FSM Intrm. 13, 18 (App. 1991).
Federalism - National/State Power
A national court ordinarily should refrain from deciding a case in which state action is challenged as violating the federal constitution, if unsettled questions of state law may be dispositive and obviate the need for the constitutional determination. Gimnang v. Yap, 5 FSM Intrm. 13, 21 (App. 1991).
A state law provision attempting to place "original and exclusive jurisdiction" in the Yap State Court cannot divest a national court of responsibilities placed upon it by the national constitution, which is the "supreme law of the Federated States of Micronesia." Gimnang v. Yap, 5 FSM Intrm. 13, 23 (App. 1991).
[5 FSM Intrm. 15]
Taxation; Federalism - National/State Power
Under traditional constitutional analysis, taxpayer's efforts to recover tax moneys unlawfully extracted from them by a state may be relegated to state procedures and decisionmakers so long as there is a reasonable procedure under state law whereby the taxpayer may obtain meaningful relief. Gimnang v. Yap, 5 FSM Intrm. 13, 23-24 (App. 1991).
A national court may not abstain from exercising its constitutional jurisdiction when it is directly faced with a constitutional issue and surely may never abstain completely from exercising jurisdiction in a case where there remains to be resolved a substantial issue under the national constitution. Gimnang v. Yap, 5 FSM Intrm. 13, 25 (App. 1991).
This is a case of first impression in two areas. The Court must consider whether, and under what circumstances, the appellate division may overrule a decision of the trial division of the FSM Supreme Court to abstain from deciding a portion of a case which arises under the Constitution and therefore falls within the trial division's jurisdiction under article XI, section 6(b) of the Constitution. We must also determine whether a taxpayer required to pay an unconstitutional state tax has a constitutional right to some reasonable means of redress.
This litigation was initiated in Yap in the trial division of the FSM Supreme Court by plaintiff Basil Limed Gimnang, a resident and taxpayer of Yap and a citizen of the Federated States of Micronesia. Mr. Gimnang alleged that as a businessman engaged in importing goods into Yap, he had been subjected to taxes imposed by the state upon goods he imported into the state.
Contending that the Yap State excise tax 1 is an unconstitutional import tax, he asked this Court's trial division in Yap to declare the tax unconstitutional, to enjoin its enforcement and to require refund of the approximately $155,000 he alleged he had improperly been required to pay to the state under that law from January 1982 through 1988.
Noting that Y.S.L. 1-104 "was the pattern" for the Truk tax law found to be unconstitutional in Innocenti v. Wainit, 2 FSM Intrm. 173 (App. 1986), the trial court issued a declaratory judgment holding that the Yap State excise tax law is an import tax and violates article IX, section 2(d) of the
[5 FSM Intrm. 16]
FSM Constitution. Gimnang v. Yap, 4 FSM Intrm. 212 (Yap 1990). The trial court further held that Y.S.L. 1-219, amending the law effective November 6, 1986, did not remedy the defects of the Yap state excise tax law. Id. at 215. The state does not challenge those holdings on appeal.
However, the trial court did not rule on plaintiff's claim for recovery of the taxes, but instead abstained on that issue in order to permit a decision by the Yap State Court trial division. Id. Plaintiff Gimnang appeals from this decision to abstain. For the reasons explained here, we affirm the decision to abstain, but remand the case for clarification of the order to assure that the trial court will retain jurisdiction to assure observance of Mr. Gimnang's rights of due process under the FSM Constitution.
A. Jurisdiction of state courts to decide issues of national law
Gimnang contends that the decision of the trial court in this case to abstain was improper because the case was one which arose under the Constitution. He argues that only national courts have legal authorization to make rulings in such a case. He bases this argument upon the pertinent jurisdictional language of the Constitution, because it makes no reference to state courts, and upon article XI, section 8 of the Constitution, because it requires a state court in a case involving a "substantial question requiring the interpretation of the Constitution, national law, or treaty", to certify the question to the appellate division of the Supreme Court.
1. The jurisdictional grant - It is true that the language of the Constitution concerning jurisdiction over cases arising under national law makes no mention of state courts:
The national courts, including the trial division of the Supreme Court, have concurrent original jurisdiction in cases arising under this Constitution; national law or treaties; and in disputes between a state and a citizen of another state, between citizens of different states, and between a state or a citizen thereof, and a foreign state, citizen, or subject.
FSM Const. art. XI, § 6(b).
In Bank of Guam v. Semes, 3 FSM Intrm. 370 (Pon. 1988), the Court's trial division reviewed this language and its constitutional history noting that, in response to a last-minute amendment, the Micronesian Constitutional Convention amended article XI, section 6(b) to delete state and local courts from that provision's grant of jurisdiction. Thus, the court concluded, and we agree, that only national courts are given jurisdiction by article XI, section 6(b) of the Constitution.
[5 FSM Intrm. 17]
This however does not require a conclusion that state courts are deprived of power ever to exercise jurisdiction in the types of cases described in article XI, section 6(b). The Semes court said:
[S]tate courts do not normally look to the national Constitution as a source of jurisdictional authority. Instead they typically rely upon state constitutions and state law for their authorization to act . . . .
The presumption is that a state court has jurisdiction to act on any case which arises within that state. Given this understanding the. . . . proper question is not whether the national Constitution authorizes, but whether it bars state court jurisdiction . . . . Had the framers intended the concurrent jurisdiction of national courts to be exclusive of state court jurisdiction for such cases, presumably they would have said so, as they did in article XI, section 6(a), which vests in this Court exclusive jurisdiction over the cases mentioned there . . . . Yet, nothing in the amendment and nothing now in article XI, section 6(b) of the Constitution may be read as absolutely preventing state courts from exercising jurisdiction over those kinds of cases.
3 FSM Intrm. at 376-77.
Even in the absence of direct constitutional prohibition, it is of course possible that state or local courts may sometimes be barred from exercising jurisdiction in some such cases by the actions of Congress, of this Court, or of the state legislature. Except insofar as jurisdiction is conveyed directly by the national Constitution, Congress clearly has power to limit the exercise of jurisdiction over national law. Moreover, as the Court in Semes recognized, national courts are required to play the "primary role" in handling the kinds of cases identified in article XI, section 6(b). Id. at 377. There may be instances where the exercise of this national court responsibility will preclude state court involvement in a particular case or kind of case. Of course, state legislatures also have power to affect the jurisdictional reach of state courts.
Yet, the general proposition remains that the laws applicable within a state include national as well as state laws. In the absence of any special limitation, issues that arise under any state or national law within the particular state may fall within the jurisdiction of the state and local courts of that state through state constitutional and statutory provisions which place the "judicial power of the state" within those courts.
2. The certification requirement - Article XI, section 8 of the Constitution does not alter anything said thus far. That section provides:
[5 FSM Intrm. 18]
When a case in a state or local court involves a substantial question requiring the interpretation of the Constitution, national law, or a treaty on application of a party or on its own motion the court shall certify the question to the appellate division of the Supreme Court. The appellate division of the Supreme Court may decide the case or remand it for further proceedings.
Gimnang notes that this language does not say directly, or even necessarily imply, that state or local courts may exercise jurisdiction over cases which arise under the Constitution, national law, or a treaty. Gimnang also correctly points out that there inevitably will be occasions, in cases arising under state law, where issues of national law may be presented, and that article XI, section 8 will apply in such a situation.
On the other hand, article XI, section 8 cannot be seen as barring state courts from exercising jurisdiction over cases which arise under national law within the meaning of article XI, section 6(b). The provision plainly is sufficiently broad to reach those cases and provides a rule for the eventuality that such cases might fall within the jurisdiction of a state court.
Thus, we affirm the analysis of the trial division in Semes. Article XI, sections 6(b) and 8 of the FSM Constitution place primary responsibility in the national courts for the kinds of cases and issues identified there. Those provisions vest the national courts with the tools necessary to control such litigation, but do not prohibit state court jurisdiction over issues of national law or cases which arise under national law.
Gimnang also contends that even if a state court may be permitted to decide some part or all of a case which arose under the Constitution and was instituted in the national court, the trial court should not have abstained in this case. This objection requires consideration of two separate, although related, aspects: (1) Do national courts have authority ever to abstain from deciding issues in cases which fall within the constitutional jurisdiction of national courts? (2) If national courts do have such authority to abstain, what standards should be employed in deciding whether to abstain in a particular case?
1. Power to abstain - The existence of at least some limited national court power to abstain from exercising jurisdiction available to it is suggested by historical considerations and the structure of the Constitution.
Although the United States Constitution says nothing directly about abstention and the precise origins of the power of federal courts to refrain from exercising jurisdiction consigned them by the Constitution or statutes are rather murky, the authority to abstain has long been asserted and employed by United States federal courts. C. Wright, Law of Federal Courts 302-30 (4th
[5 FSM Intrm. 19]
ed. 1983).
The constitutional frameworks in the Federated States of Micronesia for federalism and separation of powers are based primarily on the United States model. Had the framers considered directly whether the national judiciary should have the power to abstain from deciding some issues within its jurisdiction in order to respond to interests of federalism and judicial harmony, they presumably would have looked to United States practices for guidance.
Similarly, the overall structure of the Constitution may be seen as requiring the national judiciary to exercise restraint so as to avoid friction within the federal system. In the United States it has been suggested that Congress, in enacting legislation calling for the exercise of federal court jurisdiction, has by implication delegated to the courts authority to modify or limit the exercise of that jurisdiction in order to avoid friction within the federal system. "Congress cannot foresee all conceivable federalism tensions that might arise in specific exercises of federal jurisdiction, the argument would proceed, and therefore it is reasonable to assume that Congress would allow the federal courts to modify or limit their jurisdiction when they find such dangers". M. Redish, Abstention, Separation of Powers, and the Limits of the Judicial Function, 94 Yale L. J. 71, 80 (1984). In the case of the Federated States of Micronesia this constitutional implication is far stronger than in the United States since the Constitution here directly vests jurisdiction in the national courts while federal court jurisdiction under the United States constitutional system is considerably more contingent upon congressional action.
We conclude that the national courts, in carrying out their judicial responsibilities, do have inherent power to certify issues, or to abstain partially or completely from exercising jurisdiction in a particular case, in order to permit state decisionmakers to resolve a particular issue or to exercise jurisdiction over part or all of a case.
We emphasize however, that these powers of certification and abstention must be exercised carefully and sparingly. This is so because a court addressing the possibility of certification or abstention must necessarily bring into the balance large policy issues, especially considerations of federalism.
Resolution of sensitive issues through such a balancing of interests is essentially a political endeavor. The judiciary, intended as it is to be insulated from many of the political forces to which the other two coordinate branches are expected to be most sensitive, is not well suited to perform this kind of essentially political policy-making function.
FSM v. Oliver, 3 FSM Intrm. 469, 480 (Pon. 1988). See also In re Cantero, 3 FSM Intrm. 481, 484 (Pon. 1988):
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Decisionmaking concerning allocation of functions as state and national roles falls most squarely within the role of Congress, for Congress is the most political branch of the nation's government and is best suited to resolve policy issues.
Free use of these powers of abstention and certification, although employed in attempts to be open and generous with state decisionmakers, and to uphold the Court's notions of federalism, could be seen as a presumptuous arrogation of policy-making powers by this Court in violation of basic principles of separation of powers, and as an abdication of this Court's responsibility to uphold the rights of parties under the law, including their constitutional right to seek the protection of this Court.See M. Redish, supra.
2. Standards - Mr. Gimnang has sought to invoke national court jurisdiction and is appealing from the trial court's decision to abstain from exercising that jurisdiction. The FSM Supreme Court has a "solemn obligation" to consider the interests of litigants who wish to invoke the constitutional jurisdiction of national courts. Ponape Transfer & Storage v. Federated Shipping Co., 4 FSM Intrm. 37, 49 (Pon. 1989); U Corp. v. Salik, 3 FSM Intrm. 389, 392 (Pon. 1988). The interests necessarily call for standards which will protect the rights of such litigants. It is the duty of the appellate division to develop such standards and to review carefully trial court decisions to abstain from deciding issues in cases which fall within the constitutional jurisdiction of the national courts.
While more precise standards must necessarily be developed on a case-by-case basis, a few general guidelines perhaps may usefully be offered at this time as we consider this first appeal from a decision to abstain.
First, although the national courts have primary responsibility to exercise control over all article XI, section 6(b) litigation, distinctions may be made between the kinds of cases described there.
As a general proposition, cases which arise under national law are distinguishable from diversity cases because the former involve issues: (1) of more direct national impact than in diversity cases; (2) concerning which the national courts have direct responsibilities and should have special expertise; and (3) over which the litigants may justly expect the national
[5 FSM Intrm. 21]
courts to exercise jurisdiction. In such a case arising under national law, the reluctance of the Court to abstain from deciding any issue should be commensurately increased.
Of course, even cases which arise under the national Constitution sometimes call for deference to state courts. For example, courts generally strive to avoid addressing unnecessarily or prematurely issues of national constitutional law. See, e.g., Suldan v. FSM(II) , 1 FSM Intrm. 339, 357 (Pon. 1983). A national court ordinarily should refrain from deciding a case in which state action is challenged as violating the federal Constitution, if unsettled questions of state law may be dispositive and obviate the need for the constitutional determination.Panuelo v. Pohnpei, 2 FSM Intrm. 150, 154 (Pon. 1986), citing Railroad Commission of Texas v. Pullman Co. , 312 U.S. 496, 500-01, 61 S. Ct. 643, 645-46, 85 L. Ed. 971 (1941). Under such circumstances, the national court may appropriately give the state court the opportunity to provide a definitive ruling as to state law. This can be accomplished through partial abstention, or certification of the issue to the state court, and need not preclude national court adjudication of the remaining issues.See England v. Louisiana State Bd. of Medical Examiners, 375 U.S. 411, 418, 84 S. Ct. 461, 466, 11 L. Ed. 2d. 440, 446 (1964).
National court abstention or certification of issues may also be justified on occasion by a desire to avoid unsettling a delicate balance in national-state relationships. Where the national courts are asked to rule on areas of the law which fall within state powers and in which there are identifiable, particularly strong, state interests, consideration of abstention or certification of issues may be called for. Land issues furnish one example. The Court's trial division has recognized that "the framers of the Constitution anticipated that states, including state courts, would play the primary role in setting policy and deciding legal issues concerning ownership and interests in land." Bank of Guam v. Semes, 3 FSM Intrm. at 382. See also Ponape Transfer & Storage v. Federated Shipping Co., 4 FSM Intrm. 37, 43 (Pon. 1989); In re Nahnsen, 1 FSM Intrm. 97, 107 (Pon. 1982); Etpison v. Perman, 1 FSM Intrm. 405, 429 (Pon. 1984).
This Court's trial division has also recognized that the strong state interests in fiscal autonomy militate in favor of abstention, or certification of issues, in lawsuits against the state for monetary damages. Panuelo v. Pohnpei, 2 FSM Intrm. 150, 156 (Pon. 1985); Ponape Transfer & Storage v. Federated Shipping Co., 4 FSM Intrm. at 45.
Drawing on law as it has developed in the United States, the Court has also recognized that where a state is attempting to establish a coherent administrative policy in a complex field in which there is substantial public concern, state decisionmakers often are more likely to be familiar with the administrative framework and needs. When this is so, national courts may properly consider abstention or certification in order to give state courts or other state decisionmakers the opportunity to provide guidance. Ponape Transfer & Storage, 4 FSM Intrm. at 44, citing Burford v. Sun Oil Co., 319 U.S. 315, 333-34, 62 S. Ct. 1098, 1107, 87 L. Ed. 1424 (1943).
[5 FSM Intrm. 22]
Armed with these principles, we may now move to their application in Mr. Gimnang's case. The complaint alleged that the Yap excise tax "is violative of article IX, section 2(d) of the Constitution of the Federated States of Micronesia." This then was a case arising under national law within the meaning of article XI, section 6(b) of the Constitution. Analysis must begin with an especially strong presumption against full abstention. 2
However, there are also strong factors calling for consideration of deference to state decisionmakers. This is both a lawsuit for monetary damages, and a broad challenge to Yap state's system of taxation. States have a special interest in governing and administering their system of taxation and the national courts should be loath to interfere with such activities. 3
A. Taxes Paid On or After November 25, 1986.
In abstaining as to Gimnang's claim for recovery of the state taxes which the court had already ruled were unconstitutionally assessed, the court apparently believed that decisions concerning repayment of unlawfully collected state taxes should be made pursuant to state law.
As a general proposition, we agree. Specifically, we affirm the trial court's decision and actions as to taxes paid on or after November 25, 1986, the effective date of the Yap Government Liability Act, which authorizes "recovery of any tax alleged to have been erroneously or illegally collected." 31 Y.S.C. 104(a).
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The Yap Liability Act names the Trial Division of the State Court of Yap as the forum with original and exclusive jurisdiction over such claims. Id. § 104. As we have already emphasized in this opinion, the Constitution places upon national courts primary responsibilities for deciding issues of national law. FSM Const. art. XI, § 6(b). Mr. Gimnang's complaint put squarely before the FSM Supreme Court trial division the question of whether the Yap State excise tax violates article IX, section 2(d) of the Constitution. The issue was a ripe one. The need to address it was immediate, not contingent in any way on resolution of any issues of state law.
Thus, the trial court was required as a matter of national constitutional law to accept jurisdiction over, and to address, the issue of the constitutionality of the Yap state tax. 4 The state law provision attempting to place "original and exclusive jurisdiction" in the Yap State Court of course cannot divest a national court of responsibilities placed upon it by the national Constitution, which is the "supreme law of the Federated States of Micronesia." FSM Const. art. II.
The trial court fulfilled that jurisdictional responsibility, holding the tax to be violative of the Constitution. That having been done, no further issue of national law remained immediately before the Court.
It is apparent that the trial court did not believe the question of Gimnang's right to recover the money to be a constitutional issue or issue of national law. As to the taxes paid after the Yap Liability Act became effective, we agree. While article IX, section 2(d) cedes exclusive constitutional power to the national government to tax imports and therefore is a sufficient basis to support the declaratory and injunctive relief granted by the trial court, Gimnang suggests to us, and we perceive, no substantial argument that article IX, section 2(d) directly requires states to repay money unconstitutionally extracted from citizens.
Under traditional constitutional analysis, taxpayers' efforts to recover tax moneys unlawfully extracted from them by a state may be relegated to state procedures and decisionmakers so long as there is a reasonable procedure under
[5 FSM Intrm. 24]
state law whereby the taxpayer may obtain meaningful relief. 5
The Yap Liability Act does provide a means for recovery of taxes alleged to have been illegally collected, and it is not claimed that the means of redress provided by the Act are less than reasonable. As to taxes paid on or after November 25, 1986, then, the trial court had before it an area of law closely linked to important state interests and one in which there necessarily must be state efforts to establish a coherent policy. The remaining issues to be decided concerning the post-November 25, 1986 taxes reasonably could be expected to be resolved entirely through application of state law. The interests sought to be guarded through the jurisdictional provisions of the Constitution were well protected. 6 Under these circumstances, the trial court reasonably could heed the state's preference announced by the Yap Liability Act as to the proper forum for claims against the state.
Mr. Gimnang points out that if he is now required to initiate litigation anew in the Yap State Court seeking recovery of its taxes, the two-year statute of limitations may be deemed to have run on the post-November 25, 1986 taxes which he has attempted to recover in litigation before the FSM Supreme Court. Mr. Gimnang presumably was aware of this risk when, despite the existence of state legislation authorizing his claim to be brought in the state court, he instead chose the national forum in which to initiate this litigation.
We hold that the trial court's decision to abstain completely as to the post-November 25, 1986 taxes was well within the permissible discretion of the
[5 FSM Intrm. 25]
B. Pre-November 25, 1986 Taxes.
The situation is radically different however as to the taxes paid before the Yap Government Liability Act of 1986 went into effect. As to those pre-November 25, 1986 taxes, it is the position of the state that any recovery is absolutely barred because article II, section 12 of the Yap Constitution permits only those lawsuits against the state that are "provided by law." The state reasons that since no statute provided for redress prior to November 6, 1986, there is no right of recovery as to taxes paid before that date.
We confess ourselves unable to determine with confidence what was decided below concerning the pre-November 25, 1986 taxes. The court said only, "In the area of sovereign immunity, Yap State has made this claim in its Constitution and its legislation. Yap State Constitution, art. II, § 12, Government Liability Act of 1986 (Y.S.L. 1-220)." 4 FSM Intrm. at 214.
The first impression gained from this language is that the trial court was accepting the position of Yap State that it was immune to suit as to any claims which arose prior to the effective date of the Yap Liability Act and yet was abstaining completely from exercising any further jurisdiction in the case.
If this had been the trial court's meaning, we would be compelled to set aside that aspect of the order of abstention. This is so because a national court may not abstain from exercising its constitutional jurisdiction when it is directly faced with a constitutional issue and surely may never abstain completely from exercising jurisdiction in a case where there remains to be resolved a substantial issue under the national Constitution.
The state's position, that Mr. Gimnang has no means whatever to recover the taxes illegally extracted from him prior to November 25, 1986, is tantamount to saying that, until November 25, 1986, the state was free to take property from its citizens without due process. This court has said, "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." Semens v. FSM, 4 FSM Intrm. 66, 74 (App. 1989), quoting Suldan v. FSM, 1 FSM Intrm. 339, 354 (Pon. 1983). Indisputably, the state's claim of power to tax illegally and then deprive citizens of any possibility of recovery is violative of that "fundamental concept." 7
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Had the trial court accepted the state's interpretation of article II, section 12 of the Yap Constitution and of the Yap Liability Act as producing this result, the trial court's holding would have to be reversed as violative of Mr. Gimnang's rights of due process under the Constitution of the Federated States of Micronesia. FSM Const. art. IV, § 3. However, for the following three reasons we do not interpret the trial court's order as one of complete abstention or as acceptance of the state's assertion of complete sovereign immunity for pre-November 25, 1986 taxes.
First, that interpretation cannot be reconciled with the trial court's actions. If the trial court was indeed upholding the state's claim of sovereign immunity, and did not consider it necessary to determine whether this lack of redress constituted a violation of Mr. Gimnang's constitutional rights of due process, this would have amounted to a final judgment. An acceptance of the state's sovereign immunity claim would have called for a denial of recovery as to the pre-November 25, 1986 taxes and would have left nothing further to be considered. Thus, the trial court's action in abstaining as to the claim for recovery of the pre-November 25, 1986 taxes reflected a view that some claim remained. This cannot be reconciled with a reading of the trial court's opinion as upholding the state's claim of sovereign immunity.
Secondly, our review of the state constitutional language at issue makes us highly skeptical of the proposition that the trial court saw the issue of sovereign immunity as so clearcut that it could be resolved in the one sentence quoted above. The state points to the following language of article II, section 12 of the Yap Constitution as an assertion of sovereignty: "Every person may sue for redress, as provided by law, from the State or public entity in case that person had suffered damage through an illegal act of any public official."
The state contends that this provision means that the state may not be sued unless legislation specifically authorizing suit is enacted.
The state's interpretation of article II, section 12 is by no means compelling or even obvious. The interpretation is difficult to reconcile with the affirmative language in the first clause, "Every person may sue for redress," which seems unequivocally to grant every person the right to sue "the State or public entity" in any case in which the plaintiff claims to have "suffered damage through an illegal act of any public official." 8 Moreover,
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the words, "as provided by law," which the state points to as imposing a condition precedent on every other part of the section, could also be seen as having quite a different meaning. The phrase could be seen simply as permitting the state to establish reasonable conditions, such as procedures, time limitations and other requirements for the bringing of any claim authorized by article II, section 12. Under this interpretation, of course, the citizen's right of redress exists by virtue of the constitutional language, and would be unlimited until reasonable restrictions are provided by law.
We do not here attempt to make a final determination as to the meaning of article II, section 12 of the Yap Constitution. Indeed, there is much to be said for employment of the doctrine of abstention so that the Yap State Court appellate division may be given the opportunity to determine the meaning of the section. Here, we say merely that the issues concerning interpretation of this language are not simple and we are not willing to assume that the trial court was attempting to resolve the issues through the one sentence quoted above.
Third, and finally, we emphasize that if the trial court had interpreted article II, section 12 of the Yap Constitution as barring Mr. Gimnang from any possibility of recovering taxes extracted from him prior to enactment of the Yap Government Liability Act of 1986, it would then have been incumbent upon the trial court to consider whether this amounted to a violation of Mr. Gimnang's rights of due process. Under these circumstances, the Court would have been under a duty to retain jurisdiction and abstention would have been inappropriate. See Innocenti v. Wainit, 2 FSM Intrm. 173, 179 (App. 1986) ("[P]aramount within this Court's mission is the responsibility to interpret the Constitution of the Federated States of Micronesia.")
All of these factors lead us to the conclusion that the trial court did not consider itself to be ruling that the Yap Constitution stands as a bar to Mr. Gimnang's recovery of taxes paid prior to November 25, 1986. Instead, we conclude that the trial court was abstaining from deciding that issue and was
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tendering the litigation to the Yap State Court to decide to what extent Yap state law permits recovery by Mr. Gimnang of the pre-November 25, 1986 taxes which the FSM Supreme Court trial division has found to have been assessed against him unconstitutionally.
We agree with the trial court that the unique state interests in administering its own tax system and in determining the meaning of its constitution justify the court's action in tendering to the state court an opportunity to determine the meaning of article II, section 12 of the Yap State Constitution.
However, in light of the state's contention that Gimnang is without any means of redress under Yap State law for the unlawful deprivation of his money, the FSM Supreme Court trial division has a clear responsibility to assure that Mr. Gimnang's rights under the due process clause of the FSM Constitution are upheld. If the state court determines that Yap State law, including the due process clause of the Yap Constitution, does not provide for recovery, the FSM Supreme Court trial division should proceed to consider Mr. Gimnang's rights under article IV, section 3 of the Constitution of Federated Sates of Micronesia, which provides that, "A person may not be deprived of life, liberty, or property without due process of law . . . ."
The decision of the trial court to abstain is affirmed as to the taxes paid after the Yap Government Liability Act of 1986 went into effect. As to the taxes paid by Mr. Gimnang prior to the effective date of that Act, the trial court's abstention for purposes of obtaining a Yap State court appellate division ruling as to whether recovery may be provided under Yap state law is affirmed; however, the case is remanded to the trial court for modification and clarification of the order of abstention so that Mr. Gimnang's access to a national court determination as to the scope of his rights of due process will be assured, if that becomes necessary.
1. Two statutes, Yap State Law No. 1-104, which became effective on October 1, 1981 and Yap State Law No. 1-219, effective November 6, 1986, constitute the Yap state excise tax, which is codified at 13 Y.S.C. 103.
2. Up to this case the presumption against full abstention has never been overcome in an FSM Supreme Court case arising under national law. Instead, more restrictive forms of deference to state decisionmakers have been employed. Hadley v. Kolonia Town Municipality, 3 FSM Intrm. 101 (Pon. 1987) (certification); Dabchur v. Yap, 3 FSM Intrm. 203 (Yap S. Ct. 1987) (certification); and Etpison v. Perman, 1 FSM Intrm. 405 (Pon. 1984) (doctrine of primary jurisdiction).
3. "It is upon taxation that the several states chiefly rely to obtain the means to carry on their respective governments, and it is of the utmost importance to all of them that the modes adopted to enforce the taxes levied should be interfered with as little as possible. Any delay in the proceedings of the officers upon whom the duty is devolved of collecting the taxes, may derange the operations of government, and thereby cause serious detriment to the public." McKesson Corp. v. Division of Alcoholic Beverages & Tobacco, 496 U.S. 18, 37 n.19, 110 S. Ct. 2238, 2246, n.19, 110 L. Ed. 2d 17, 36 n.19 (1990), quoting Dows v. City of Chicago, 11 Wall. 108, 110 (1871). See also Toomer v. Witsell, 334 U.S. 385, 392, 68 S. Ct. 1156, 1160, 92 L. Ed. 1460 (1948); Great Lakes Dredge & Dock Co. v. Huffman, 319 U.S. 293, 63 S. Ct. 1070, 87 L. Ed. 1407 (1943).
4. As the trial court aptly pointed out, abstention by the national court from deciding whether a state tax violates the national Constitution would be, at best, unacceptably inefficient, for the state court, upon receiving such a substantial constitutional issue from the FSM Supreme Court trial division, would then be required by article XI, section 8 of the Constitution to certify that issue to the FSM Supreme Court appellate division. Such an effort by a trial level national court to avoid exercising jurisdiction over an issue of national law also could be seen as contrary to the purpose of article XI, section 8, which seems to contemplate that only the appellate division will transfer, or "remand," an issue of national law to a state court.
5. Although this issue has not arisen previously in the Federated States of Micronesia, United States decisions, applying constitutional language almost identical with that of the FSM Constitution, have often so held. Great Northern Life Ins. Co. v. Reed, 322 U.S. 47, 54, 64 S. Ct. 873, 876-77, 88 L. Ed. 1121 (1944); Ford Motor Co. v. Department of Treasury, 323 U.S. 459, 465, 65 S. Ct. 347, 351, 89 L. Ed. 389 (1946); but see McKesson Corp. v. Division of Alcoholic Beverages & Tobacco, 496 U.S. 18, 110 S. Ct. 2238, 110 L. Ed. 2d 17 (1990); Ward v. Love County Bd. of Comm'rs, 253 U.S. 17, 40 S. Ct. 419, 64 L. Ed. 751 (1920).
6. As is explained infra the national Constitution's guarantee of due process requires a reasonable procedure whereby a taxpayer who is unlawfully required to pay taxes may recover the amounts paid. If the Yap Government Liability Act of 1986 ultimately is held to bar recovery of the post-November 25, 1986 taxes, the Yap State Court might find this to be violative of the due process clause of the Yap Constitution. Yap Const. art. II, § 4. It also might be necessary for the Yap State Court to proceed to national constitutional due process issues. In that event however the certification requirements of article XI, section 8 would come into play. The taxpayer also could appeal to the FSM Supreme Court appellate division from a final state court decision as to due process under the national Constitution. FSM Const. art. XI, § 7.
7. See also McKesson Corp. v. Division of Alcoholic Beverages and Tobacco, 110 S. Ct. 2238, 2241 (1990) ("[I]f a State penalizes taxpayers for failure to remit their taxes in timely fashion, thus requiring them to pay first and obtain review of the tax's validity in a refund action, the Due Process Clause requires the State to afford taxpayers a meaningful opportunity to secure postpayment relief for taxes already paid pursuant to a tax scheme ultimately found unconstitutional.")
8. The state has cited neither any decision of the Yap State Court interpreting the Constitution nor any contemporary statements of the committees or delegates to the Yap Constitutional Convention supporting its interpretation. Instead, the state cites the policy statement in the Yap Liability Act, which was enacted several years after the convention. 31 Y.S.C. 102. Of course, subsequent statements of state legislators as to the meaning of the constitutional provision are of little or no use in determining the intent of the framers of the Constitution when the provision was adopted. See Lonno v. Trust Territory, 1 FSM Intrm. 53, 61-62 (Kos. 1982); United States v. United Mine Workers of America, 330 U.S. 258, 282, 67 S. Ct. 677, 690, 91 L. Ed. 884 (1947).
We find quite plausible plaintiff's contention that this Yap constitutional section actually reflects a view similar to that expressed by the Committee on Governmental Structure in the Micronesian Constitutional Convention in 1975, which recommended prohibition of sovereign immunity on grounds that sovereign immunity is "outmoded," a "foreign doctrine that has no place in a modern Micronesian governmental system." Comm. Pro. No. 24, SCREP No. 36, II J. Micro. Con. Con. 23, 836. The Court notes that Hilary Tacheliol, who subsequently served as Yap's Lieutenant Governor, was vice chairman of the Committee on Governmental Structure and was chairman of the Committee's Executive Subcommittee.