7 FSM Intrm. 121-123

THE SUPREME COURT OF THE

FEDERATED STATES OF MICRONESIA

Cite as Wainit v. Weno ,

7 FSM Intrm. 121 (Chuuk S. Ct. Tr. 1995)

[7 FSM Intrm. 121]

TADASHI WAINIT d/b/a T & S Mart,

Plaintiff,

vs.

WENO MUNICIPALITY,

Defendant.

CA NO. 122-93

ORDER

Wanis R. Simina

Associate Justice

Decided: April 17, 1995

APPEARANCES:

For the Plaintiff: R. Barrie Michelsen, Esq.

Law Offices of R. Barrie Michelsen

P.O. Box 1450

Kolonia, Pohnpei FM 96941

For the Defendant: Maketo Robert, Esq.

P.O. Box 211

Weno, Chuuk FM 96942

* * * *

HEADNOTES

Civil Procedure ) Dismissal

A motion to dismiss that contains matters outside the pleadings shall be treated as a motion for summary judgment. Wainit v. Weno, 7 FSM Intrm. 121, 122 (Chk. S. Ct. Tr. 1995).

Constitutional Law ) Chuuk

A court begins its analysis with the presumption that all legislative enactments are constitutional. The burden is on the plaintiff to clearly demonstrate to the court that the ordinance is unconstitutional. Wainit v. Weno, 7 FSM Intrm. 121, 122 (Chk. S. Ct. Tr. 1995).

[7 FSM Intrm. 122]

Constitutional Law ) Chuuk; Taxation ) Constitutionality

The general grant of the taxing power to the state, which allows taxing power to be delegated to the municipalities, is not an exclusive grant preventing municipalities from levying taxes. Wainit v. Weno, 7 FSM Intrm. 121, 123 (Chk. S. Ct. Tr. 1995).

Constitutional Law ) Chuuk; Taxation ) Constitutionality

A municipality in Chuuk has the power to tax so long as the state has not preempted the area. Wainit v. Weno, 7 FSM Intrm. 121, 123 (Chk. S. Ct. Tr. 1995).

Transition of Authority

Title 3 of the Trust Territory Code represents interim legislation prior to the time when the former Trust Territory Districts were chartered, and had no continuing existence after the adoption of the Truk Charter in 1977. Wainit v. Weno, 7 FSM Intrm. 121, 123 (Chk. S. Ct. Tr. 1995).

* * * *

COURT'S OPINION

WANIS R. SIMINA, Associate Justice:

This matter last came before the court on defendant's motion to dismiss and plaintiff's motion for summary judgment. All parties were in agreement that this case turns on a question of law and there are no factual matters at issue. The question presented is whether or not Weno Municipal Ordinance 01-01-93, § 3(A) [requirement for a wholesale business license] is constitutional. The court denied both parties' motions for failure to provide the court with a copy of the ordinance under review. The defendant has renewed his motion to dismiss and has attached a copy of the ordinance. This renewed motion was filed September 5, 1994 and a Certificate of Service indicates plaintiff's counsel was served by mail on that same date. Six months have passed and the plaintiff has failed to respond to defendant's renewed motion to dismiss. The court believes that although our rules do not require a specific time frame within which an opponent must file an opposition to such a motion, six months is sufficient time to cause the court to believe that the plaintiff does not intend to file an opposition. Therefore, the court deems this matter submitted and will now decide the merits.

Under our rules, a motion to dismiss that contains matters outside the pleadings shall be treated as a motion for summary judgment. Chk. Civ. R. 12(b). Therefore, defendant's motion to dismiss for failure to state a claim will be treated as a motion for summary judgment on the validity of the ordinance in question. As the court previously noted, neither party has asserted that there are any factual matters at issue in this case.

Question Presented

The question presented is whether or not Weno Municipal Ordinance 01-01-93, § 3(A) is constitutional. The court begins its analysis with the presumption that all legislative enactments are constitutional. The burden is on the plaintiff to clearly demonstrate to the court that the ordinance is unconstitutional.

Analysis

The provision of the ordinance imposes a business license fee on "wholesale stores" located in the municipality of $2,500.00 per year. The plaintiff characterizes this fee as a tax and claims that the municipality is precluded from taxing wholesale businesses. The defendant's counter argument is that

[7 FSM Intrm. 123]

the ordinance does not impose a tax but rather is a fee or license allowed on the municipalities'police power to regulate businesses within its borders.

In examining the ordinance it is clear to the court that the primary purpose of the ordinance is to raise revenue. The ordinance itself states that the purpose of the bill is to raise revenue. There is nothing in the ordinance that even remotely purports to impose any regulation on the business of wholesale store. The court finds that the provision is a licensing fee for revenue purposes. Since there are no regulations attached, this disposes of the plaintiff's contention that this ordinance conflicts the state's power under Article XIII, § 7 to regulate inter-municipal commerce.

The plaintiff asserts that the municipalities have no independent power to tax citing Article VIII, section 7.11 [sic]. Section 7 provides that "[t]he State Government has the power to tax, and may delegate certain taxing powers to the municipal governments by statute." The plaintiff apparently reads this section to restrict all taxing powers solely to the state unless delegated to the municipalities. The court does not view this provision as restrictive. The section does not state that only the state shall have the power to tax.1 The section is a general grant of the taxing power to the state. Further the state may choose to forgo some of its general taxing powers and delegate them to the municipalities. In the absence of any other aids to construction this seems to the court to be a common sense reading of the words of this provision, especially when viewed in light of the provisions Article XIII, § 5.2 Section 5 requires the municipalities to adopt a constitution and makes the "powers and functions of a municipality with respect to its local affairs" superior to statutory law. The court does not believe that the revenue sharing provisions of Article VIII, § 6 alter this analysis in any manner.

Weno's constitution clearly allows the municipality to tax as long as the state has not preempted the area. Weno Const. art. XI, § 6.

The plaintiff claims that the state has in fact preempted this area of taxation, citing 3 TTC 2(6). The plaintiff contends that this code provision is a valid carry over statute given force under the transition article of the constitution. The court does not view this provision as having any continuing existence after the adoption of the Truk Charter in 1977. Title 3 of the Trust Territory Code represents interim legislation prior to the time when the former Trust Territory Districts were chartered. That is clear from the provisions 3 TTC 2. The court finds that 3 TTC 1 et seq. are no longer valid statutory provisions and therefore cannot be the basis of any claim of preemption.

Conclusion

The court finds by the admission of the parties that there is no genuine issue of fact. The court concludes as a matter of law for the reasons expressed that Weno Municipal Ordinance 01-01-93 § 3(A) imposing a wholesale business license fee is not unconstitutional and defendant is entitled to summary judgment. Therefore it is

Ordered that the defendant's Motion to Dismiss construed as a Motion for Summary Judgment is hereby granted, and Weno Ordinance 01-01-93, § 3(A) is valid and enforceable.

* * * *

Footnotes:

1. Compare Chk. Const. art. VIII, § 7 with Truk Charter art. VII, § 3 which states "[t]he taxing power shall be reserved to the State Government, except so much thereof as may be delegated by the Legislature to the municipalities . . . ."

2. While the State Legislature apparently has the right to limit this section by passing enabling legislation, none of the parties have brought any such legislation to the attention of the court.


	THE SUPREME COURT OF THE FEDERATED STATES OF MICRONESIA Cite as Wainit v. Weno , 7 FSM Intrm. 121 (Chuuk S. Ct. Tr. 1995) [7 FSM Intrm. 121] TADASHI WAINIT d/b/a T & S Mart, Plaintiff, vs. WENO MUNICIPALITY, Defendant. CA NO. 122-93 ORDER Wanis R. Simina Associate Justice Decided: April 17, 1995 APPEARANCES: For the Plaintiff: R. Barrie Michelsen, Esq. Law Offices of R. Barrie Michelsen P.O. Box 1450 Kolonia, Pohnpei FM 96941 For the Defendant: Maketo Robert, Esq. P.O. Box 211 Weno, Chuuk FM 96942 * * * * HEADNOTES Civil Procedure ) Dismissal A motion to dismiss that contains matters outside the pleadings shall be treated as a motion for summary judgment. Wainit v. Weno, 7 FSM Intrm. 121, 122 (Chk. S. Ct. Tr. 1995). Constitutional Law ) Chuuk A court begins its analysis with the presumption that all legislative enactments are constitutional. The burden is on the plaintiff to clearly demonstrate to the court that the ordinance is unconstitutional. Wainit v. Weno, 7 FSM Intrm. 121, 122 (Chk. S. Ct. Tr. 1995). [7 FSM Intrm. 122] Constitutional Law ) Chuuk; Taxation ) Constitutionality The general grant of the taxing power to the state, which allows taxing power to be delegated to the municipalities, is not an exclusive grant preventing municipalities from levying taxes. Wainit v. Weno, 7 FSM Intrm. 121, 123 (Chk. S. Ct. Tr. 1995). Constitutional Law ) Chuuk; Taxation ) Constitutionality A municipality in Chuuk has the power to tax so long as the state has not preempted the area. Wainit v. Weno, 7 FSM Intrm. 121, 123 (Chk. S. Ct. Tr. 1995). Transition of Authority Title 3 of the Trust Territory Code represents interim legislation prior to the time when the former Trust Territory Districts were chartered, and had no continuing existence after the adoption of the Truk Charter in 1977. Wainit v. Weno, 7 FSM Intrm. 121, 123 (Chk. S. Ct. Tr. 1995). * * * * COURT'S OPINION WANIS R. SIMINA, Associate Justice: This matter last came before the court on defendant's motion to dismiss and plaintiff's motion for summary judgment. All parties were in agreement that this case turns on a question of law and there are no factual matters at issue. The question presented is whether or not Weno Municipal Ordinance 01-01-93, § 3(A) [requirement for a wholesale business license] is constitutional. The court denied both parties' motions for failure to provide the court with a copy of the ordinance under review. The defendant has renewed his motion to dismiss and has attached a copy of the ordinance. This renewed motion was filed September 5, 1994 and a Certificate of Service indicates plaintiff's counsel was served by mail on that same date. Six months have passed and the plaintiff has failed to respond to defendant's renewed motion to dismiss. The court believes that although our rules do not require a specific time frame within which an opponent must file an opposition to such a motion, six months is sufficient time to cause the court to believe that the plaintiff does not intend to file an opposition. Therefore, the court deems this matter submitted and will now decide the merits. Under our rules, a motion to dismiss that contains matters outside the pleadings shall be treated as a motion for summary judgment. Chk. Civ. R. 12(b). Therefore, defendant's motion to dismiss for failure to state a claim will be treated as a motion for summary judgment on the validity of the ordinance in question. As the court previously noted, neither party has asserted that there are any factual matters at issue in this case. Question Presented The question presented is whether or not Weno Municipal Ordinance 01-01-93, § 3(A) is constitutional. The court begins its analysis with the presumption that all legislative enactments are constitutional. The burden is on the plaintiff to clearly demonstrate to the court that the ordinance is unconstitutional. Analysis The provision of the ordinance imposes a business license fee on "wholesale stores" located in the municipality of $2,500.00 per year. The plaintiff characterizes this fee as a tax and claims that the municipality is precluded from taxing wholesale businesses. The defendant's counter argument is that [7 FSM Intrm. 123] the ordinance does not impose a tax but rather is a fee or license allowed on the municipalities'police power to regulate businesses within its borders. In examining the ordinance it is clear to the court that the primary purpose of the ordinance is to raise revenue. The ordinance itself states that the purpose of the bill is to raise revenue. There is nothing in the ordinance that even remotely purports to impose any regulation on the business of wholesale store. The court finds that the provision is a licensing fee for revenue purposes. Since there are no regulations attached, this disposes of the plaintiff's contention that this ordinance conflicts the state's power under Article XIII, § 7 to regulate inter-municipal commerce. The plaintiff asserts that the municipalities have no independent power to tax citing Article VIII, section 7.11 [sic]. Section 7 provides that "[t]he State Government has the power to tax, and may delegate certain taxing powers to the municipal governments by statute." The plaintiff apparently reads this section to restrict all taxing powers solely to the state unless delegated to the municipalities. The court does not view this provision as restrictive. The section does not state that only the state shall have the power to tax.1 The section is a general grant of the taxing power to the state. Further the state may choose to forgo some of its general taxing powers and delegate them to the municipalities. In the absence of any other aids to construction this seems to the court to be a common sense reading of the words of this provision, especially when viewed in light of the provisions Article XIII, § 5.2 Section 5 requires the municipalities to adopt a constitution and makes the "powers and functions of a municipality with respect to its local affairs" superior to statutory law. The court does not believe that the revenue sharing provisions of Article VIII, § 6 alter this analysis in any manner. Weno's constitution clearly allows the municipality to tax as long as the state has not preempted the area. Weno Const. art. XI, § 6. The plaintiff claims that the state has in fact preempted this area of taxation, citing 3 TTC 2(6). The plaintiff contends that this code provision is a valid carry over statute given force under the transition article of the constitution. The court does not view this provision as having any continuing existence after the adoption of the Truk Charter in 1977. Title 3 of the Trust Territory Code represents interim legislation prior to the time when the former Trust Territory Districts were chartered. That is clear from the provisions 3 TTC 2. The court finds that 3 TTC 1 et seq. are no longer valid statutory provisions and therefore cannot be the basis of any claim of preemption. Conclusion The court finds by the admission of the parties that there is no genuine issue of fact. The court concludes as a matter of law for the reasons expressed that Weno Municipal Ordinance 01-01-93 § 3(A) imposing a wholesale business license fee is not unconstitutional and defendant is entitled to summary judgment. Therefore it is Ordered that the defendant's Motion to Dismiss construed as a Motion for Summary Judgment is hereby granted, and Weno Ordinance 01-01-93, § 3(A) is valid and enforceable. * * * * Footnotes: 1. Compare Chk. Const. art. VIII, § 7 with Truk Charter art. VII, § 3 which states "[t]he taxing power shall be reserved to the State Government, except so much thereof as may be delegated by the Legislature to the municipalities . . . ." 2. While the State Legislature apparently has the right to limit this section by passing enabling legislation, none of the parties have brought any such legislation to the attention of the court.