THE SUPREME COURT OF THE
FEDERATED STATES OF MICRONESIA
Cite as Sauder v. Chuuk State Legislature,
7 FSM Intrm. 358 (Chk. S. Ct. Tr. 1995)

[7 FSM Intrm. 358]

AURELIO SAUDER,
Plaintiff,

vs.

CHUUK STATE LEGISLATURE and
DIRECTOR OF FINANCE,
Defendants.

CA NO. 5-95

DECISION GRANTING SUMMARY JUDGMENT
 
Soukichi Fritz
Chief Justice

Hearing:  December 13, 1995
Decided:  December 27, 1995

APPEARANCES:
For the Plaintiff:          Manny Otoko, Trial Counselor
                                     P.O. Box EX
                                     Weno, Chuuk FM 96942

For the Defendant:     Daniel Furrh, Esq.
(Legislature)               P.O. Box EX
                                     Weno, Chuuk FM 96942

For the Defendant:     Wesley Simina, Esq.
(Finance Director)      Attorney General
                                     Office of the Chuuk Attorney General
                                     P.O. Box 189
                                     Weno, Chuuk FM 96942

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HEADNOTES
Civil Procedure ) Summary Procedure
     Summary judgment is appropriate if there is no genuine issue as to any material fact and the moving party is entitled to a judgment as a matter of law.  Issues of statutory and constitutional construction and interpretation are not issues of material fact but matters of law.  Sauder v. Chuuk State Legislature, 7 FSM Intrm. 358, 360, 363 (Chk. S. Ct. Tr. 1995).

Constitutional Law ) Chuuk ) Judicial Powers
     It is the duty of the court in the proper case to determine whether an act of the government, including acts of the Legislature, is in conformance with the supreme law of the state.  Any such act

[7 FSM Intrm. 359]

that violates the Chuuk Constitution violates the supreme law of Chuuk and must be treated as null and void.  Sauder v. Chuuk State Legislature, 7 FSM Intrm. 358, 361 (Chk. S. Ct. Tr. 1995).

Constitutional Law ) Chuuk ) Legislative Powers
     Once the First Chuuk Legislature has set the salaries of it members by statute, no increase in their salaries is effective until after approval by the voters in a referendum.  Sauder v. Chuuk State Legislature, 7 FSM Intrm. 358, 361 (Chk. S. Ct. Tr. 1995).

Constitutional Law ) Chuuk ) Legislative Powers
     Expense allowances for a member of the Chuuk Legislature may not exceed 20% of his salary.  Sauder v. Chuuk State Legislature, 7 FSM Intrm. 358, 362 (Chk. S. Ct. Tr. 1995).

Constitutional Law ) Chuuk ) Legislative Powers
     Salary and expense allowances for members of the Chuuk Legislature cannot exceed of the equivalent the Governor is entitled to.  Sauder v. Chuuk State Legislature, 7 FSM Intrm. 358, 362-63 (Chk. S. Ct. Tr. 1995).

Constitutional Law ) Chuuk ) Legislative Powers
     Any form of legislative remuneration, compensation or reimbursement for Chuuk legislators is limited to 1/5 of a legislator's salary.  An unrestricted "representation allowance" is an unconstitutional form of compensation.  Sauder v. Chuuk State Legislature, 7 FSM Intrm. 358, 364 (Chk. S. Ct. Tr. 1995).

*    *    *    *

COURT'S OPINION
SOUKICHI FRITZ, Chief Justice:
     On December 13, 1995, this matter came before the court for a hearing on Plaintiff's motion for summary judgment.  The plaintiff was represented by Mr. Manny Otoko, Trial Counselor.  The defendants, Chuuk State Legislature [Legislators], were represented by Mr. Daniel Furrh, Legislative Counsel, and the defendant, Director of Finance [Director], was represented by Mr. Wesley Simina, the Attorney General, Chuuk State.

     This action was instituted by the plaintiff as a private Attorney General pursuant to the Chuuk State Financial Management Act.  Truk S.L. 5-44, 10.1 The complaint alleged that the funds appropriated as "representation allowance"2 by the Legislature for the members of both houses violated

[7 FSM Intrm. 360]

Article V, Section 8 of the Chuuk State Constitution.

     The plaintiff moved for summary judgment asserting that he was entitled to judgment as a matter of law.  The Legislators opposed the motion asserting there were material issues of fact yet to be determined.  The defendant Director took no position.

Issues
     The first issue is:  Whether or not summary judgment is appropriate pursuant to Rule 56.  If the answer to that question is in the affirmative, then, the second issue is:  Whether or not the funds appropriated as "representation allowance" are constitutional.

     This second issue is one of first impression and if reached requires an interpretation of the meaning of Article V, 8 of the Chuuk State Constitution.  This court is the ultimate interpreter of the Constitution.  Chk. Const. art. VII, 3(a) ["The trial division of the State Supreme Court has original and exclusive jurisdiction over disputes . . . arising under this Constitution."  (emphasis added)].

I.  Summary Judgment
     Rule 56 of the Rules of Civil Procedure states that summary judgment is appropriate if there is "no genuine issue as to any material fact" and the moving party "is entitled to a judgment as a matter of law."  Chk. Civ. R. 56(c).

     The plaintiff argues that Section 8 limits the amount of public funds that a member of the Legislature may receive.  He asserts that Article V, 8 restricts members of the Legislature to only their salary and an expense allowance. Therefore, the "representation allowance" must fall into one of these categories. Thus, the plaintiff contends that there is no genuine issue of material fact since the issue of the legality of the "representation allowance" may be determined by reference to the constitution and law.

     The Legislators have opposed the motion by claiming there are issues of fact that require a trial.  The Legislators assert that the manner in which each individual member of the Legislature spends the "representation allowance" is an issue of fact that is material to the determination of the question before the court.3  The Legislators also claim that since the maximum amount each member of the Legislature is entitled to under Section 8(a) can be no greater than of "the equivalent to which the Governor is entitled by law" a second issue of material fact is created as to that amount.

[7 FSM Intrm. 361]

     The court agrees with the plaintiff that there are no material issues of fact and the question may be decided as a matter of law.  The issue before the court is a matter of statutory and constitutional construction and interpretation.  The specific reasoning that underlies this determination is set forth in the following discussion.

II.   Article V , 8
     The court begins the analysis of this constitutional provision by recognizing that the Constitution is "the supreme law of the State of Chuuk."  Chk. Const. art. II, 1. Any "act of government in conflict with" the Constitution "is invalid to the extent of conflict."  Id.  Consequently, it is the duty of the court in the proper case to determine whether an act of the government, including acts of the Legislature, is in conformance with the supreme law of the State.  Chk. Const. art. VII, 3(a).  Any such act that violates the Constitution violates the supreme law and must be treated as null and void.  Chk. Const. art. II, 1.

II A.   Article V , 8(a) Salary of Members of the Legislature
     This section of the constitution strictly proscribes the compensation that any member of the Legislature may receive.  The  section states that "No member [of the Legislature] may receive as salary and expense allowance a total amount greater than 3/4 of the equivalent to which the Governor is entitled by law."  Chk. Const. art. V, 8(a).  Another requirement of Article V, 8(a) is that the salaries of the members of the Legislature be set by statute.  Chk. Const. art. V, 8(a) ["Except as limited by this Constitution, members of the Legislature shall receive annual salaries as prescribed by statute."].  The court takes judicial notice that there is no specific statute independent of the budget acts that sets the annual salary of the members of the Legislature.  Nonetheless, the First Chuuk Legislature that came into existence after the effective date of the Constitution set the annual salaries of the members of the Legislature.  Chk. S.L. 190-10.  This was the FY-91 Budget Act that took effect on October 1, 1990.4

     This initial budget act set the annual salary for the Speaker of the House and the President of the Senate at $24,000.00 annually.  This same act set the salary of remaining members of the Legislature at $21,600.00 each.  Once the salaries were set by this statutory enactment, the provisions of the Article V, 8(c) decree that there may not be an increase in these salaries unless the matter is submitted to the voters in a general election.  Chk. Const. art. V, 8(c).

     The language of Article V, 8(c) is explicit in its declaration that "both of the presiding officers of the Legislature" must make a request of the Election Commission to submit the question of an increase in legislative salaries to the voters.  Chk. Const. art. V, 8(c).  Any increase is effective only "[i]f a majority of the votes cast on this question is in the affirmative . . ."  Id.  After an affirmative vote, "the Legislature may provide for an increase not to exceed $2000 for each officer."  Id.  Any doubt that the intent of the language of this section of the Constitution was to require voter approval in a referendum is completely resolved by reference to the Reports of the Truk Constitutional Convention.

     The Standing Committee on Governmental Structure and Functions in its discussion of 8(c) stated that the "referendum provision leaves to the people the question of salary increases."  Standing Committee Report [SCREP] No. 40 at 4, Truk Con. Con. (1988) [emphasis added].

[7 FSM Intrm. 362]

     The court takes judicial notice that no such referendum on an increase in the salary for the members of the Legislature has ever been submitted to the voters of Chuuk State.  As a result, the court must hold as a matter of constitutional law that the salary of the members of the Chuuk State Legislature may not exceed $21,600.00 per year and the salaries of the Speaker and President may not exceed $24,000.00 per year.  Chk. Const. art. V, 8; Chk. S.L. 190-10.  Of course, the Legislature is free to submit the question of an increase in their salary to the voters in accordance with Article V, 8(c).  Having ascertained the constitutionally permitted salaries of the Legislature, the court must analyze the amount that is allowable as expenses.

II B.  Article V , 8(b) Expense Allowance of Members of the Legislature
     Since the annual salary of the members of the Legislature has been fixed by Chk. S.L. 190-10, the constitution is quite explicit on the amount they may receive for expenses.  "The expense allowance for each member of the Legislature may not exceed 1/5 of the member's annual salary."  Chk. Const. art. V, 8(b) [emphasis added].  Thus, no member may receive an expense allowance that is more than twenty (20%) percent of his salary.  Accordingly, the court must find based on the Constitution that those members whose salary is set at $21,600.00 may receive an expense allowance of up to a maximum of $4320.00.5  Thus, the combined total that a member of the Legislature may annually receive based on the salary set in Chk. S.L. 190-10 and the 8(b) expense limitation is $25,920.00. The Speaker and the President, based on the salary set for them by Chk. S.L. 190-10, may each receive a maximum expense allowance of up to $4800.006 under the formula prescribed in 8(b).  This results in a combined annual total for each of these two members of $28,800.00.  The total of combined salaries and expenses are subject to the 's limitation of 8(a).  The court now turns to the determination of the 8(a) equivalent.

II C.  The Equivalent to Which the Governor is Entitled by Law
     The language of 8(a) specifically provides that "No member may receive as salary and expense allowance a total amount greater the 3/4 of the equivalent to which the Governor is entitled by law."  Chk. Const. art. V, 8(a) [emphasis added].  The Legislators, in opposing motion for summary judgment, claim that this phrase creates an issue of material fact.

     The Legislators contend that the Governor is entitled to his salary of $36,000.007 which is set by statute independent of the budget act.  The Legislators assert that in addition to the statutory salary the Governor may be entitled to other sums.  The other sums the Legislators speculate the Governor may be entitled to are portions of the monies appropriated for operation of the Governor's office.  The thrust of this contention is that since the Legislature has appropriated funds for the operation of the Governor's office he is somehow entitled to at least a portion of those monies "by law."  What portion the Governor is entitled to "by law," the Legislators admit, is not clear from the budget act. Therefore,

[7 FSM Intrm. 363]

a question of fact results.  This contention is erroneous.

     The existence of a law and its interpretation does not create a question of fact . it creates a question of law.  It is a matter of statutory interpretation.  The interpretation or construction of a statute is to be determined from the language of the statute itself.  73 Am. Jur. 2d Statutes 196 (1974).  Nothing in the language of the past or current budget acts is specified as the Governor's "expense allowance" in the sense it is used in 8(a) of the Constitution.

     There is no specific statute independent of the budget act that entitles the Governor to an expense allowance.  The appropriations for the operation of the Governor's office are subject to the legislative will.  Thus, the Governor is not entitled to any specific sum for the operation of his office.  Accordingly, the court must hold that in the absence of any specific statute authorizing an "expense allowance" of a set sum, the only amount the Governor is entitled to by law on an annual basis is his salary.  As a result, the legislative salary and expense allowance combined may not exceed of $36,000.00 or $27,000.00.  Chk. Const. art. V, 8(a).

     Based on the holding in the previous sections on the permissible salary and expenses of the members of the Legislature, only the Speaker's and the President's maximum possible combined salary and expenses would exceed the limitation of 8(a).  Consequently, based on their salaries as set in the First Legislature at $24,000.00, they may only receive an "expense allowance" of a maximum of $3000.00, for a combined total of $27,000.00.  Having determined this aspect of the issue before the court, the legality of the "representation allowance" must now be addressed.

II D.  Representation Allowance
     The court first notes again there is no statute independent of the budget act that has been brought to the attention of the court that authorizes a "representation allowance."  Thus, there is no statutory limitation on how or for what these funds may be spent.  As a result, the affidavits of the two members of the Legislature stating how they spent their "representation allowance" are of no consequence to the determination of the legality of this appropriation.  The "representation allowance" funds in the absence of a specific statutory limitation may be spent for any purpose whatsoever.

     Additionally, there is no limitation on the amount that the Legislature may appropriate for its members as "representation allowance."  A review of the budget acts (FY-91 to FY-95) reveals that the Legislature has continually increased this allowance.8

     The result is an appropriation made available to individual members of the Legislature that has no statutorily defined purpose, no statutory restriction as to the amount that may be made available, and no statutory control on how or for what the members may spend the money.  The Legislators have produced no authority, constitutional or statutory, that allows this type of unrestricted funds be made

[7 FSM Intrm. 364]

available to individual members of the Legislature.9  No accountability whatsoever is required.10  It is this exact type of unrestricted and unlimited appropriation made for the benefit of individual members of the Legislature, over and above salaries and expenses, that Article V, 8 of the Constitution was designed by the framers to prevent.

     Any doubt that the intent of 8 was to prevent the Legislature from granting its members unrestricted funds aside from their salary and expenses is completely resolved, once again, by resorting to the reports of the Truk Con. Con.  In SCREP No. 40, the Committee on Governmental Structure and Functions made the intent of this section clear.  "To preserve state resources, Section 8 is intended to place restrictions on the rapid increase in legislative compensation that has occurred in recent years."  SCREP No. 40 at 4, Truk Con. Con. (1988) [emphasis added]. The Report also explained that Section 8 "requires a cap on expense allowances of one-fifth of salary in order to prevent excessive `hidden' salary."  Id. [emphasis added].

     In view of the Committee Report, the conclusion that the intent of 8 was to limit any form of legislative remuneration, compensation or reimbursement to the salaries set by statute and the added twenty (20%) percent of salaries as expenses is inescapable.  Therefore, the court must hold that the "representation allowance" which is provided to individual members of the Legislature is unconstitutional.  The "representation allowance" is in excess of the salaries and the allowable expense limitations of 8 and violates the unequivocal announced intent of the framers of the Constitution to specifically limit this type of "hidden" compensation.

Conclusion
     The court concludes that there are no material issues of fact and the legality of the "representation allowance" may be decided as a matter of law, pursuant to Rule 56.  The court grants summary judgment to the plaintiff on behalf of the people of Chuuk State as follows.

     The salaries of the members of the Legislature were set by the First Legislature in the FY-91 Budget Act.  This statute set the salary of each member of the Legislature at $21,600.00 per year.  The salaries of the Speaker of the House of Representatives and that of the President of the Senate were set at $24,000.00. Article V, 8(c) precludes any increase in this salary absent the assent of the voters.  The expenses of all kinds due any individual legislator are capped at twenty (20%) percent of their annual salary by Article V, 8(b).  Under Article V, 8(a), the combined total of the salary and expenses of any legislator may not exceed 's of what the Governor is entitled to by law.  At present, the only legal entitlement of the Governor is his salary which has been set at $36,000.00.  As a consequence, the combined salary and expenses of any member of the Legislature may not exceed $27,000.00.  Finally, the "representation allowance" is a form of compensation that is given individual members in addition to their salary and expenses and is therefore prohibited by Article V, 8 and is declared unconstitutional.

     The Director of Finance is a party to this action and it will be the order of the court that he be

[7 FSM Intrm. 365]
 
enjoined from issuing salary checks on an annual basis to any member of the Legislature that exceeds $21,600.00, excepting the Speaker and the President to whom the Director shall not issue annual salary checks in excess of $24,000.00. The Director will be further enjoined from issuing any expense allowance to any member of the Legislature that exceeds $4,320.00 in a fiscal year, excepting the Speaker and the President to whom the Director shall not issue any expense allowance in excess of $3,000.00 for the same period.

     Finally, the Director will be enjoined from issuing any public funds as a "representation allowance" to any member of the Legislature.

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Footnotes:
 
1.  This provision allows individual citizens acting in place of the Attorney General to challenge the expenditure of public funds as a violation of the law.

2.  The "representation allowance"[in past years termed `members allowance' or `members representation'] in FY-95 when this action was started amounted to $656,000.00.  This equals a "representation allowance" of $17,000.00 for each of the 28 members of the House and $18,000.00 for each of the 10 members of the Senate.  Chk. S.L. 2-94-13, 2(3)(iii) [Others].  The "representation allowance" was in addition to a salary of $21,600.00 which each member of the legislature received [the Speaker and the President each received a salary of $24,000.00]. Additionally, each member of the House and Senate received a expense allowance of approximately $5100.00.  Chk. S.L. 2-94-13, 2(3)(i) [Contractual Services].

3.  In support of its opposition, the Legislature offered affidavits from two of the its thirty-eight members stating that they had not used the representation allowance for salary or office expenses.  One affidavit stated that the member spent the money for "emergency food for my constituents, funerals and weddings, meetings, miscellaneous food items for gatherings and special needs."  The other member stated that he spent the funds on "funerals; I have also purchased caskets twice; meetings; Christmas, New Years, and municipal constitution celebrations; Miscellaneous food items for gatherings and special needs, such as rice, soft drinks, sardines and pigs for roasting.  Each year I give 100 sacks of rice to each of the 4 municipalities I represent."

4.  Chk. S.L. 190-10 increased the salaries over what they had been pre-constitution as passed by the last Truk State Legislature in the FY-90 Budget Act. Article XV, 4 , provides that the First Legislature under the constitution was the begin in May 1990.   Article XV , 10 of the Constitution states that "[n]o change in salary pursuant to this Constitution may take effect until after the general election held in March of 1990.  The Budget Act [Chk. S.L. 190-10] for FY-91 was the first applicable legislation to occur after the First Legislature convened.

5.  Past budget acts reveal that the member's expense allowance maximum of 20% of salary under 8(b) has been exceeded by the legislature in every year from FY-91 through FY-95.

6.  The maximum expense allowance was exceeded for these two officers of the legislature in every year from FY-91 through FY-95 except in FY-91 [the Speaker's allowance was $3000.]

7.  While this issue is not before the court, the court notes that Article XV , 10 set the annual salary of the Governor at $25,000.00.  The First Legislature by separate statute increased this salary to its present level of $36,000.00.  There was no 8(c) referendum held to validate this increase.  Even if a referendum had been successfully held the $11,000.00 increase is beyond that allowed by 8(c).

8.  In FY-91 the "representation allowance" amounted to $5375.00 for each member of the House [except the Speaker $3000.00] and $8500.00 for each member of the Senate.  This appropriation continued to increase and in FY-95 the "representation allowance" had increased 300% to $17,000.00 for each member of the House and more than doubled to $18,000.00 for each member of the Senate.  In the current year (FY-96), the "representation allowance" stands at $14,000.00 for each of the 38 members of the Legislature, a total appropriation of $532,000.00.

9.  The court notes but does not decide that the appropriations for "representation allowance" funds that have no defined public purpose and are made directly available to individual members of the legislature appears to violate Article VIII, 2 of the Constitution . ["No person may be made a direct recipient or beneficiary of public funds, unless pursuant to a public purpose . . . ."].

10.  This appears to be a violation of the Financial Management Act which requires documentary evidence of any obligation against the State.  Truk S.L. 5-44.