Camacho, et al v. Moylan Document 1: ?

Court of Appeals for the Ninth Circuit
Case No. 03-72836
Filed August 1, 2003

FILED PETITION FOR WRIT OF CERTIORARI FROM SUPREME COURT OF GUAM, DOCKETED CAUSE AND ENTERDED APPEARANCES OF COUNSEL. NOTIFIED RESPONDENT OF FILING. (MOATT) [03-72836] (WWP)

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Page 2 C E R T IF IC A T IO N O F C O M P L IA N C E .
Pursuant to Rule 6-2(d)(2)(ii) o f the Federal Rules o f Appellate Procedures
fo r the U nited States Court o f Appeals for the N inth C ircuit, I certify that the
petition fo r w rit o f certiorari conforms to the form at noted in Rule 6 -2 (d )(l) and to
the word count noted at Rule 6-2(d)(2)(i).
Respectfully submitted this 30* day o f July, 2003.
OFFICE OF THE ATTORNEY GENERAL
D ouglas B. M oylan , Attorney General of Guam
D ougl^ B. Moylan
Attorney General
28
Page 3 Revised F O R M C E R TIF IC A T E OF C O M PLIA N C E
PURSUANT TO C IR C U IT RULE 32-Case No.
(see next page)
Form Must Be Signed by Attorney or Unrepresented
Litigant and Attached to the Back o f Each Copy o f the Brief
I certify that: (check appropriate options)
Oversize Briefs:
The court granted permission to exceed the length limitations set forth at Fed. R.
App. P. 32(a)(7) by an order dated___________________
or
An enlargement o f brief size is permissible under Ninth Circuit Rule 28-4.
The brief is
^
Proportionately spaced, has a typeface o f 14 points or more and
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i n c h a n d c o n t a i n s _____ w o r d s o r ________ l i n e s o f
te x t
or IS
In conformance w ith the type specifications set forth at Fed. R. App.
P. 32(a)(5) and does not exceed_______pages
29
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type volume limitations set forth at Circuit Rule 32-4 and is (check the applicable
option):
Proportionately spaced, has a typeface o f 14 points or more and
contains_________words (opening, answering and the second and
third briefs filed in cross-appeals must not exceed 21,000 words, reply
briefs must not exceed 9,800 words)
or IS
M onospaced, has 1 0 .5 o r fe w e r c h a r a c te r s p e r
i n c h a n d c o n t a i n s _____ w o r d s o r ________ l i n e s o f
te x t
(o p e n in g , a n s w e rin g and th e second and
t h i r d b r ie f s f i l e d in c ro s s -a p p e a ls must n o t
exceed 2 1 ,0 0 0 w ords o r 1 ,9 5 0 l i n e s o f t e x t ,
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In conformance with the type specifications set forth at Fed. R. App.
P. 32(a)(5) and does not exceed_______pages (opening, answering
and the second and third briefs filed in cross-appeals must not exceed
75 pages; reply briefs shall not exceed 35 pages)
Signature o f Attorney or
Pro Se Litigant
30
Page 5 D E C L A R A T IO N O F S E R V IC E .
I,
D O U G LAS B. M O Y LA N , hereby certify that I caused one (1) copies o f
Petitioner’ s Petition fo r W rit o f Certiorari in IN RE: REQUEST OF GOVERNOR
F E L IX
P.
C AM C H O
R E LA T IV E
TO
THE
IN TER PR ETATIO N
AND
A P P LIC A T IO N OF SECTION 11 OF THE O RG ANIC A C T OF G U AM , C.A.
Case No.
(Supreme Court o f Guam Case Number
C R Q 03-00I), to be served upon counsel fo r Respondents Governor and A rnold E.
Davis, Jr. (amicus curiae) on July 30, 2003, as follow s:
A rthu r B. Clark, Esq.
L A W OFFICES OF C A LV O & C LA R K
Suite 202, First Savings & Loan Bldg.
655 S. Marine D rive
Tamuning, Guam Telephone: (671)646-Facsimile: (671)646-Arnold E. Davis, Jr.
Telephone: (671) 653-
I declare under penalty o f perjury that the foregoing is true and correct.
Executed on the 30* day o f July, 2003.
DOKJGLAS B. M O Y L A N
31
Page 6 APPENDIX
1
Page 7 FILED
r
E G E I'^ '
IN T H E SUPR EM E C O U R T O F G U A M
IN R E : R EQ U EST O F G O V E R N O R F E L IX P. C A M A C H O
R E L A T IV E T O T H E IN T E R P R E T A T IO N A N D A P P L IC A T IO N
O F S E C T IO N 11 O F T H E O R G A N IC A C T O F G U A M
G overnor F elix P, Camacho,
Petitioner
Douglas B. M oylan, O ffice o f the A tto rn e y General,
Party in Interest
Supreme Court Case No. CRQ03-
O P IN IO N
Cite as: 2003 Guam
Request fo r Declaratory Judgment pursuant to
section 4104 o f T itle 7 o f the Guam Code Annotated
Argued and submitted on July 9, Hagatna, Guam
Appearing for the Petitioner Governor Felix P. Camacho:
A rthur Clark, Esq.
Calvo & Clark, LLP
Attorneys at Law
655 S. Marine D r., Ste. Tamuning, GU
/ ij
u
Appearing for the Party in Interest ■
O ffice o f the Attorney General:
Elizabeth J. Greenberg
Assistant Attorney General
O ffice o f the Attorney General
Suite 2-200E, Judicial Ctr. Bldg
120 West O ’Brien Drive
Hagatna, Guam 96910
Page 8 R eq u ester D ec la rato ry Judgment, CRQ03-
Page 2 o f
BEFORE: F. P H IL IP CARBULLIDO, C hie f Justice, B E N JA M IN J. F. CRUZ, Justice Pro Tempore;
and RICHARD H . BENSON, Justice Era Tempore.
C A R B U L L ID O , C .J.:
[ 1]
The G o ve rn or o f Guam, Felix P. Camacho (“ Governor” ), filed a Request for Declaratory
Judgment pursuant to T itle 7 GCA § 4104 requesting that this court determine w hether the issuance
o f bonds authorized by Public Law 27-19 (“ P.L. 27-19” ) w ould violate Section 11 o f the Organic
A ct o f Guam, (c o d ifie d at 48 U.S.C. § 1423a) (“ Section 11” ), which lim its p u b lic indebtedness to
10% o f the aggregate tax valuation o f the property on Guam. Related to that determ ination, the
Governor asks th e court to interpret the phrase “ aggregate tax valuation o f the property on Guam
as used in Section 11, and to provide guidance on how the government is to ascertain the aggregate
tax valuation” w hen determining whether the debt lim ita tio n has been exceeded. We find that the
allowable public indebtedness under Section 11 is to be ascertained with reference to the appraised
value o f the property on Guam, as reflected on the certified tax ro ll in effect at th e time the debt is
incurred. We fu rth e r find that the 2002 tax ro ll was the product o f a fair and reasonable valuation
system, and thus can be used to determine the current debt lim it. From these findings, and
considermg the government’s current outstanding public indebtedness, we conclude that the issuance
o f the bonds authorized by P.L. 27-19 w ould not violate the debt-lim itation clause contained in
Section 11 o f the Organic Act.
[2]
Public Law 27-19, enacted on A p ril 28,2003, was proposed upon the Le gislatu re ’s finding
that “ the current revenues available in the General Fund [are] . . . in s u ffic ie n t to pay certain
obligations o f the General Fund and that a mechanism is needed to provide necessary cash to the
General Fund to pay such obligations . . . . ” See Guam Pub. L. 27-19, § 1 (A pr. 2 8 , 2003). P.L. 27-
Page 9 Request f o r D e c la ra to ry Judgment, CRQ03-
Page 3 of
19 authorizes th e Governor o f Guam to issue new bonds o f up to $418,309,857 for that purpose
w ithout further le g isla tive approval.' O f that amount, $218,309,857 maybe used to pay incom e tax
refunds, u tility paym ents to the Guam Power Authority, retirem ent fund payments, w ithholding tax
payments, general fund vendor payables, and public school repairs.^ The rem aining $200 m illio n
may be used to “ fu n d an escrow to pay debt service on all or a portion o f the Government o f Guam
General O b lig a tio n Bonds, 1993 Series A at matched m aturity.” Guam Pub. L. 27-19, § 2 (A p r. 28,
2003). Pursuant to the authority granted by P.L. 27-19, the Governor intends to fa cilita te the
issuance o f approxim ately $393 m illion in bonds.
[3]
Under T itle 5 GCA §22601, government contracts may be entered into o n ly upon execution
o f the Governor, “ after approval o f the Attorney General.” T itle 5 GCA § 22601 (1996). The
Attorney General, Douglas B. Moylan (“ A G ” ), in a letter to the Governor and Speaker o f the 27th
Guam Legislature, Vicente C. Pangelinan, dated M ay 14, 2003, indicated his refusal to sign any
contract for the issuance o f the bonds claim ing that the issuance o f the bonds w o u ld violate the debtlim ita tio n provision o f Section 11 o f the Organic Act o f Guam. Recj. Decl. J., E x h ib it A (AG Letter).
The A G ’s conclusion was based on his opinion that the government’s m axim um debt lim it allowed
under Section 11 is to be based on the assessed value o f property on Guam, and that, in any event,
the current tax lis t could not be used to determine the debt lim it because it is inaccurate due to the
fact that the valuation o f property on Guam, required to be performed every th re e years under GCA § 24306, was last conducted in 1993.
[4]
Presumably in response to the A G ’ s concerns, on June 25, 2003, the G o ve rn or signed into
law Public Law 27-21 (“ P.L. 27-21” ), w hich amends sections o f the real p ro p e rty tax law in tw o
' The law also authorizes the issuance o f an additional $50 m illion o f bonds o n ly upon fu rth e r
approval o f the Legislature.
^ Guam Pub .L. 27-19, § 2 (Apr. 2 8 ,2 0 0 3 ).
Page 10 Page 4 o f
Request fo r D e c la ra to ry Judgment, CRQ03-
regards. First, T itle 11 GCA § 243 06 was amended to provide that ifth e triennial property valuations
in Guam are n o t conducted by the tax assessor as required under that section, “ then th e last
completed va lu a tio n as supplemented by the annual adjustments provided for in §24307 shall be the
property tax va lu a tio n used under the Chapter.” Guam Pub .L. 27-21 § 1 (June 25, 2003). Second,
the law added subsection (1) to Title 11 GCA § 24102, to provide that the “ aggregate tax valuation”
under Section 11 o f the Organic A ct was to be “ certified as being one hundred percent (100% ) of
the appraised va lu e o f the property on Guam based on the last completed valuation conducted
pursuant to [T itle 11 GCA] § 24306, as supplemented by the annual adjustments provided fo r in
§24307.” Guam Pub. L. 27-21, § 2 (June 25, 2003).
[5]
On July 1, 2003, the Governor filed the instant Request for Declaratory Judgment in this
court. The court thereafter permitted the Attorney General to intervene in the proceeding.
II.
[6]
This court has jurisdiction to issue declaratory judgments upon the request o f the Governor
under Title 7 G C A § 4104. See T itle 7 GCA § 4104 (as amended by P.L. 24-61, Sept. 17, 1997).
Our authority extends to providing “ the interpretation o f any law, federal or local, lying w ith in the
jurisd ictio n o f the courts o f Guam to decide” or answering “ any question affecting the powers and
duties o f the Governor and the operation o f the Executive Branch . . . .” Id. We find that the
Governor’s Request satisfies the jurisdictional standards set forth in Title 7 G CA §4104. The issues
presented require an inteipretation o f local and federal law, and relate to the Governor’s a b ility to
la w fu lly execute bonds allowed by the Legislature under P.L. 27-19, as necessary to manage the
executive branch.
Page 11 Page 5 o f
Request fo r D e c la ra to ry Judgment, CRQ03-
III.
A. Issues
[7]
The G overnor seeks a declaratory judgment on the follow ing three questions;
(1 ) Whether the public indebtedness o f Guam, after the contemplated
issuance o f bonds authorized by [P.L.] 27-19, w ill be w ithin 10% o f
th e aggregate tax valuation o f the property in Guam, the m axim um
perm itted by Section 11 o f the Organic A ct o f Guam; and
(2 ) Whether “ aggregate tax valuation o f the property on Guam” as
th a t phrase is used in Section 11 o f the Organic A ct o f Guam means
one hundred percent (100%) o f the appraised value o f the taxable
p ro pe rty on Guam; and
(3 ) Whether even i f one or more o f the trierm ial valuations required
b y 11 G.C.A. § 24306 has not been conducted, the Government m ay
conclusively presume that the “ aggregate tax valuation o f the
property in Guam” as used in Section 11 o f the Organic Act o f G uam
is not less than the aggregate appraised value ascertained b y the
D ire cto r o f the Department o f Revenue and Taxation (“ D RT” ), as
assessor, pursuant to the last completed valuation conducted pursuant
to 11 G.C.A. § 24306 as supplemented by the annual adjustments
provided for in 11 GCA § 24307.
Req. Deck J., p. 4 (July 1, 2003). The answers to these questions require a determination o f the
fo llo w ing issues; (1) the meaning o f the terms
aggregate tax valuation,
property,
and
“ indebtedness” in Section 11 o f the Organic Act; (2) the sufficiency o f th e 2002 tax r o ll in
determining the current debt lim it; and (3) Guam’s current level o f indebtedness based o n the
interpretation o f the relevant terms in Section 11 w ith reference to the 2002 ta x roll.
B. S tandard o f Review
[8]
This case is brought pursuant to our original, rather than appellate, jurisdiction; th u s, all
issues are determined herein in the firs t instance. See In re Request o f Governor C a rl T. C. Gutierrez,
2002 Guam 1 ,^ 8 . The questions presented fo r the court’ s determination re q u ire the interpretation
o f federal and local statues applicable to Guam. The interpretation o f these statutes is a legal
question w ith in this court’s authority to decide. See Pangelinan v. Gutierrez, 2000 Guam 11, H 26
Page 12 Request fo r D e c la ra to ry Judgment, CRQ03-
Page 6 o f
(“ Federal court decisions do not prevent this court from determining the co rrect interpretation o f
provisions o f th e Organic Act, Guam’s constitution.” ), a ff’d by Gutierrez v. Pangelinan, 276 F.3d
539 (9th Cir. 2 0 0 2 ); Government o f Guam v. 221 Slot Machines, 2002 Guam 22, ^ 4 (“ Issues o f
statutory interpretation are questions o f law that are reviewed de novo.” ) (c ita tio n and internal
brackets om itted).
C. D iscussion
[9]
The p rim a ry issue presented to the court is whether the issuance o f one o r more series o f
bonds in the aggregate amount not to exceed $418,309,857, as allowed by P.L. 27-19, would vio la te
Section 11 o f the Organic Act.
1. Section 11 D eb t-Lim ita tion P rovision
[10]
Section 11 o f the Organic A ct contains a statutory lim itation upon government borrow ing,
commonly referred to as a debt-lim itation provision. See 15 MCQUILLIN, THE L A W OFMUNICIPAL
C O R P O R A T IO N S
§ 41.01 (3d Ed. 1949).^ Section 11 provides in relevant part:
Taxes and assessments on property, internal revenues, sales, license
fees, and royalties for franchises, privileges, and concessions m a y be
imposed fo r the purposes o f the government o f Guam as m a y be
u n ifo rm ly provided by the Legislature o f Guam, and when necessary
to anticipate taxes and revenues, bonds and other obligations m a y be
issued by the government o f Guam: Provided, however, T h a t no
p u blic indebtedness o f Guam shall be authorized o r allowed in excess
o f 10 p e r centum o f the aggregate tax valuation o f the p ro p e rty in
Guam. Bonds or other obligations o f the government o f G uam
payable solely from revenues derived from any public im provem ent
or undertaking shall not be considered public indebtedness o f G uam
w ith in the meaning o f this section.
48 U.S.C.A. § 1423a (emphasis added).
^ Most states and local municipalities have constitutional or statutory limitations o n borrowing.
S ee
M C Q U IL L IN , supra, §41.01 (“A majority o f the states have constitutional or statutory lim itation s upon borrowing by
local governments.”); Guam Telephone Authority v. Rivera, 416 F. Supp. 283, 285 (D. G u a m 1976) (“Section 11 is
similar to sections included in the Constitutions o f most states.”).
Page 13 Request fo r D e c la ra to ry Judgment, CRQ03-
[11]
Page 7 o f
The purposes o f the debt-lim itation provision in Section 11 have never been articulated by
this court. H ow ever, it is widely recognized that debt-lim itation provisions “ serve as a lim it to
taxation and as a protection to taxpayers; to m aintain . . . solvency, both governmental and
proprietary; and to keep [local] . . . residents from abusing their credit, and to protect them from
oppressive taxation.” 15 M cQ U ILLIN , supra, § 41.01 (footnotes omitted); see also Tracy N icholas
Eddy, The Referendum Requirement: A Constitutional Limitation on Local Government D eb t in
Florida, 38 U. M IA M I L. R e v . 677,679 (1984) (“ The prim ary objectives o f the debt restrictions are
preventing corruption, discouraging extravagance, and promoting sound fis c a l policy fo r local
governments.” ); see also City o f H artford v. Kirley, 493 N.W .2d 45, 51 (W is. 1992) (“ A rtic le X I,
sec. 3(2), is intended to prevent the creation o f excessive municipal debt and to protect taxpayers
from the consequent oppression o f burdensome, i f not ruinous, taxation.” ).
Furthermore, their
purpose is to “ prevent the current legislature from binding a future legislature, and to prevent
legislators from m aking future taxpayers pay today’s b ills .” 15 M cQ uiLLIN , supra, § 41.01; K e lle r
V.
City o f Scranton, 49 A. 781, 782 (Pa. 1901) (“ The constitutional provision i[s ] intended . . . to
prevent m unicipalities from loading the future w ith obligations to pay for things the present desires,
but cannot ju s tly afford, and, in short, to establish the principle that, beyond the defined lim its , they
must pay as they go.” ); see also City o f Hartford, 493 N .W .2d at 51 (“ It seeks to impose the burden
o f debt repayment upon those who create the obligations, not upon future generations.” ).
2. “ Aggregate Tax V alua tio n o f the P ro p e rty in Guam”
[12]
Under Section 11, the public indebtedness o f Guam carmot exceed “ 10 per centum o f the
aggregate tax valuation o f the property in Guam.” 48 U.S.C.A. § 1423a (emphasis added). The
phrase “ aggregate tax valuation” is not defined in the Organic Act.
[13]
The Governor argues that the phrase “ aggregate tax valuation” means th e appraised value,
as distinguished from assessed value, o f the property on Guam. By contrast, th e Attorney General
Page 14 Request fo r D e c la ra to ry Judgment, CRQ03-
Page 8 o f
argues that the te rm “ valuation” in Section 11 is the same as the term “ va lu e ” in local statutes
governing Guam real property taxes, Chapter 24 o f D ivision 2, Title 11 G C A . Under 11 G C A §
24102, the term “ value” is defined as “ thirty-five per cent (35%) o f the appraised value. . .
T itle
11 GCA § 2 4 1 0 2 (f) (1996). “ Appraised value” is defined in the same section as “ the am ount at
w hich property w o u ld be taken in payment o f a just debt from a solvent debtor.” Id.
a. Barrett-Anderson v. Crisostomo.
[14]
Only one local court has defined the phrase “ aggregate tax valuation” found in the O rganic
A ct. See Barrett-Anderson v. Crisostomo, CV0651-89 (Super. Ct. Guam N o v. 21, 1989). In
Barrett-Anderson, GEDA authorized the issue o f lim ite d obligation infrastructure improvement
bonds and w ater system revenue bonds. Id. at p. 1. The then-legislative counsel issued a memo
opining that the issuance o f the bonds w ould violate the debt-lim itation p ro visio n contained in
Section 11 o f the Organic Act. Id. at p. 2. His opinion was based on his conclusion that the term
“ aggregate tax valuation o f the property in Guam,” as used in Section 11, referred to the assessed
value o f taxable property, and not the appraised or market value o f the property. Then Superior
Court Judge Janet Healy Weeks disagreed.^ She concluded, instead, that the phrase “ aggregate tax
valuation” means the “ appraised value o f the taxable property on Guam.” Id . a t p. 14. In reaching
this conclusion. Justice Weeks started w ith the principle that the interpretation o f a statute should
be gleaned from the legislative intent. M atp. 12. She found that because the concept o f “ assessed
value” as used in relation to the assessment o f property taxes was made part o f local law a fte r the
enactment o f Section 11, and because these later-enacted local statutes governing real property tax
assessments did not employ the same language as that used in Section 11 or otherwise reference the
debt lim itation in Section 11, those statutes, which premise tax assessments on 35% ofthe appraised
Judge Weeks was subsequently appointed Associate Justice o f the Guam Suprem e Court. She has since
retired.
Page 15 Request fo r D e c la ra to ry Judgment, CRQ03-
Page 9 o f
vsluc o f taxable p ro pe rty, could not logically be used in interpreting Section 11 o f the Organic Act.
M oreover, Justice Weeks found that using the assessed value as the base to calculate the debt lim it
w ould “ set G u a m ’s debt-ceiling at a far lower level then those m unicipalities that have
proportionately greater property tax bases.” /J .a tp . 13. She concluded that “ [t]h e re is no indication
that Congress, in enacting the Organic Act, sought to stifle economic growth on Guam by setting
the debt ceiling re s tric tiv e ly low .” Id.
b. Public Law 27-21 § 2.
[15]
Public L a w 27-21 § 2, enacted on June 25,2003, added a new subsection (1) to Title 11 GCA
§ 24102 to define the phrase “ aggregate tax valuation” in Section 11 as “ one hundred percent (100% )
o f the appraised value o f the property on Guam,” thus codifying Justice Weeks’ holding in B arrettAnderson. Guam Pub. L. 27-21 § 2 (June 25,2003). This legislative determ ination, however, is not
controlling on th is court’s interpretation o f the phrase as used in Section 11. The Guam Legislature
cannot, through legislation, redefine the provisions o f the Organic Act. See 15 M C Q U IL L IN , supra,
§ 41.05 (“ [W Jith respect to territories, debt lim its may be prescribed by act o f Congress.” ). “ [A ]
constitutional debt-lim itation provision is self-executing and the legislature caimot authorize a
m in cu r a greater debt than that fixed by the constitution.
§41.05.
15 M c Q u iL L IN , supra,
Thus, the Organic A ct lim its the legislature’s power w ith regard to government
indebtedness. See Breslow v. School District, 182 A .2d 501, 504-05 (Pa. 1962) (holding that a
statute which defined the term “ assessed value” in the constitution’s d e bt-lim it provision to mean
^ W hile the Organic Act is a federal statute, it is, for all intents and purposes here, the equivalent o f a
constitution. See Haeuser v. D e p ’t o f Law, 97 F.3d 1152, 1156 (9th Cir. 1996) (“The Organic A c t serves the function
o f a constitution for Guam.”). This is underscored by the well-established principle in this jurisdiction that the Guam
Legislature carmot enact laws which are in derogation o f the provisions o f the Organic Act. 4 8 U.S.C.A. 1423a ( The
legislative power o f Guam shall extend to all rightful subjects o f legislation o f [local application] not inconsistent with
this chapter and the law o f the United States applicable to Guam.” ) (emphasis added); see In r e Request o f Governor,
2002 Guam 1, T136 {“ [TJhe legislature may not enact a law encroaching upon the Governor's authority and powers which
are mandated by the Organic Act.”) (citation omitted).
Page 16 Request fo r D e c la ra to ry Judgment, CRQ03-
Page 10 o f
m arket value w a s unconstitutional because it contradicted the plain language o f the constitution
requiring the d e b t lim it to be based on assessed value); see also City Water Supply Co. v. City o f
Ottumwa, 120 F. 309,314 (S.D. Iowa 1903) (stating that the constitutional d ebt-lim itation provision
could not be circum vented by statute upon consent o f the voters because i f that were so, “ then we
have no use fo r th e constitution” ); cf. City o f Hartford, 493 N.W.2d at 50 (“ N otw ithstanding the
legislature’s re c ita l that TIF bonds do not constitute a debt w ithin the meaning o f the constitution,
the court must exam ine the substance o f the obligations to ascertain their effect under art. X I, sec.
3 The legislature ’ s eharacterization o f the bonds is not controlling on this court s determ ination o f
the constitutional issue.” ). The problem inherent in allow ing the legislature to define the terms o f
the Organic A ct is plain: “ a ll that any Legislature w ould have to do, in order to circum vent the
Constitution is to pass an A ct defining or redefining any term or any language used in the
Constitution to s u it its purpose or objective.” Breslow, 182 A.2d at 505. Such circum vention
through local legislation would n u llify the debt-lim itation provision which Congress imposed. Id.
at 504-05 (concluding that the legislature cannot pass statutes which “ attem pt to circumvent the
Constitution and double or triple the borrowing eapacity o f m unicipalities” ).
[16]
Finally, w e are m indful that our interpretation o f Section 11 must be guided by the rules o f
interpretation and precedent. The court may not “perm it a distortion o f principles and time-honored
precedents m erely to satisfy the lust o f a greedy and overindulgent, benevolent governm ent----- ”
Allen V. Van Buren Township o f Madison County, 184 N.E.2d 25, 31 (Ind. 1962).
[17]
“ In cases involving statutory constmction, the p la in language o f a statute m ust be the starting
point.” SeeAguon v. Gutierrez, 2002 Guam 14, H 6 (citations omitted). “ [0 ]u r d u ty is to interpret
statutes in lig h t o f their terms and legislative intent.” Carlson v. Guam Tel. A uth., 2002 Guam 15,
T146 n.7; see also In re Request o f Gutierrez, 2002 Guam 1, H 17 (“ When in te rp re tin g a statute, the
court’s task is to determine the intent o f the legislature and give the statute m eaning w ithout altering
Page 17 Request fo r D e c la ra to ry Judgment, CRQ03-
Page 11 o f
or amending the statute’s scope.” ). “ Undefined terms in a statute are generally ascribed th e ir
common ordinary meaning.” Carlson, 2002 Guam 15 a t l 34. “ Moreover, in determ ining legislative
intent, a statute should be read as a whole,” and therefore, we are to “ constme each section in
conjunction w ith other sections.” Sumitomo v. Gov’t o f Guam, 2001 Guam 23, T| 17; Gutierrez v.
Ada, 528 U.S. 2 5 0, 255, 120 S. Ct. 740, 744 (2000) (“ [WJords and people are known b y their
companions.” ). “ [T]he language o f the statute cannot be read in isolation, and m ust be exam ined
w ith in its context___A statute’s context includes looking at other provisions o f the same statute and
other related statutes.” Aguon, 2002 Guam 14 at H 9. Finally, “ questions o f statutory interpretation
may be aided b y reference to the prevailing interpretation o f other statutes th a t share the same
language and e ith er have the same general purpose or deal w ith the same general subject as the
statute under consideration.” Aguon, 2002 Guam 14 at T[ 11 (citation omitted).
[18]
A fter review ing the language o f Section 11, we disagree w ith the A G ’ s contention that
valuation in Section 11 be interpreted as value under T itle 11 GCA § 24102 (f).^ First, the two
phrases are d ifferent; the term value is distinct from the term valuation. See Barrett-Anderson,
CV0651-89, pp. 12-13. Second, the definition in the local statute cannot reasonably be view ed as
the definition Congress intended for the phrase “ tax valuation” in Section 11 because the two statutes
were enacted by com pletely different legislative bodies, and, moreover, as acknowledged by Justice
Weeks \n Barrett-Anderson v. Crisostomo, Section 11 was enacted prior to 11 G C A § 24102(f). See
Barrett-Anderson, CV0651-89,pp. 12-13; Slaven v. BP America, In c .,913 F.2d 1468,1475 (9 th C ir.
1992) (determ ining that actions by a later legislature have little relevance in interpreting a p rio r
legislature’ s actions).
Finally, and most im portantly, the plain language o f Section 11 does not
^ As indicated earlier, value is defined as “thirty-five (3 5 % ) o f the appraised value; appraised value means the
amount at which property would be taken in payment of a just debt from a solvent debtor.”
(emphasis added).
11 GCA § 2 4 1 0 2 (f)
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Request fo r D e c la ra to ry Judgment, CRQ03-
support the A G ’ s argument that the assessed value o f property should be used to calculate G uam ’ s
debt lim it.
[19]
Reference to the Organic A ct o f the V irgin Islands underscores th is point. The debt-
lim ita tio n p ro visio n in the Organic Act o f the V irg in Islands, codified at 48 U.S.C. § 1403, was
enacted by the same Congress which enacted Section 11. The V irg in Island’s provision was enacted
a mere 10 m onths prior to the enactment o f Section 11. T itle 48 U.S.C. § 1403 provides th a t “ no
public indebtedness o f the government o f the V irg in Islands shall be incurred in excess o f 10 per
centum o f the aggregate assessed valuation o f the taxable real property in the islands.” 48 U. S.C .A.
§ 1403 (emphasis added). Congress provided that the governmental debt o f the V irgin Islands be
determined by the assessed valuation o f the taxable property. In contrast, the same Congress in
enacting the Organic A ct o f Guam did not provide that the debt lim it o f the government o f Guam
be based on the assessed values o f the property on Guam. 48 U.S.C.A. § 1423a. Rather, the debt
lim it under Section 11 is to be determined by the tax valuation o f the property on Guam. Id . This
difference in the statutory language demonstrates that under the plain language o f Section 11, the
debt lim it is not to be based on the assessed valuation o f property.
[20]
In fact, in other jurisdictions where courts have interpreted their debt-lim itation provisions
as requiring the lim it to be based on assessed values, their constitutional debt lim itation provisions
specifically provided that assessed values be used.
See e.g. Breslow, 182 A.2d at 503-
(invalidating as unconstitutional a local law which redefined the term “ assessed value” to mean
“ market value” fo r purposes o f the debt-lim itation provision where the C onstitution provided that
“ [t]he debt o f any . . . school d is tric t. . .shall never exceed seven (7) per centum upon the assessed
value o f the taxable p ro p e rty ___ ” ) (citation omitted) (emphasis added); A lle n , 184 N.E.2d at (holding that because, under the constitutional language, the “ value o f taxable property” was to be
ascertained “ by the last assessment,"" the debt lim ita tio n was to be based on the assessed va lu e )
Page 19 Request fo r D ec la rato ry Judgment, CRQ03-
Page 13 o f
(c itin g Article 1 3 , § 1 o f the Indiana Constitution which provided that “ [n]o p o litic a l or m unicipal
corporation in th is State shall ever become indebted in any manner or for any piupose to an am ount
aggregate exceeding two percent o f the value o f the taxable property w ith in such corpom tion,
to be ascertained b y the last assessment for State and county taxes, previous to the incurring o f such
indebtedness” ); Phelps v. City o f Minneapolis, 219 N.W . 872, 873-74 (M inn. 1928) (holding that
the debt lim it w a s to be based on the assessed, as opposed to actual, value o f the taxable property
in lig h t o f the constitu tio na l language lim itin g the net indebtedness o f the c ity to 10% “ o f the last
assessed \ 2\xxQ o f a ll taxable property therein” ) (emphasis added); City o f Chicago v. Fishbum, N E. 791,792-93 (HI- 1901) (determining that the constitutional provision lim itin g the debt lim it to
5% o f the value o f taxable property as o f the last assessment referred to the assessed value and not
actual value, especially in lig h t o f the common understanding that the te rm “ assessment, in
connection w ith taxation” means “ an o fficia l valuation o f property for the purpose of fix in g the
proportion o f taxes which each one shall pay,” and the com m only known fact th a t “ property was not
assessed at fu ll value” ); Baisden v. City o f Greenville, 111 So. 2, 4-5 (Ala. 1927) (holding th a t the
constitutional debt-lim itation provision which lim ited the m unicipality’s indebtedness to a fixe d
percent o f “ the assessed value o f the property therein,” means “ the assessed value o f the property
as fixed for state taxation” ) (internal quotations om itted) (emphasis added).
[21]
V iew ing Section 11, there is sim ply no requirement that the debt lim it be based on assessed
values. Had Congress wished to lim it Guam’ s indebtedness to a percentage o f assessed values, it
could have included that language in Section 11 as they did w ith the V irgin Islands, and as was done
by the framers o f the constitutions o f several states.
[22]
The debt lim it under Section 11 is to be based on the “ tax valuation” o f property.
U.S.C.A. § 1423a. We interpret the phrase “ tax valuation” to mean the appraised value o f property
on Guam, and not the assessed value, because all taxes on property must necessarily be based, in the
Page 20 Request for D e c la ra to ry Judgment, CRQ03-
Page 14 o f
firs t instance, u p o n appraised values o f the property. See 11 GCA §24102(f) (defining value for
purposes o f tax le vie s as “ thirty-five percent (35%) o f the appraised value'') (emphasis added);
Hansen v. City o fH o q u ia m , 163 P. 391, 392 (Wash. 1917) (recognizing that w h ile a state statute
required that p ro p e rty be assessed at a rate not exceeding 50% o f actual va lu e , because this
assessment rate w as necessarily based on the actual value, then logically in e v e ry assessment the
^ppj-gjgg^ yglug o f thc property was ascertained). N4oreover, there is nothing in the Organic A ct
lim itin g the levy o f property taxes to a certain percentage o f actual or market va lu e . Thus, it cannot
be presumed th a t Congress meant to restrict the debt lim it to a particular assessment rate to be
determined by th e local legislature. The better reading o f the phrase “ tax va lu a tio n ” is the value
w hich Congress contemplated the taxes would be based, which, considering the absence o f a
lim itation regarding assessment rates, could only rationally be the appraised m arket value o f the
property.
[23]
Further, o u r interpretation is consistent w ith the maximum power to tax granted by Congress.
Congress granted the local legislature the power to tax property. 48 U.S.C.A. § 1423a. Congress
also intended that the government o f Guam be able to incur debt in the constitutional sense. A n y
bonds or other obligations which are not issued upon the pledge o f governmental taxes and revenues
are not “ debt” in the constitutional sense, and are thus not generally subject to a constitutional debtlim itation provision. City o f Hartford, 493 N.W .2d at 51 n. 13 debt in a constitutional sense “ m ust
be an undertaking enforceable by the creditor against the municipality or its assets) (citation o m itte d
and emphasis added). Because Section 11 contains a lim ita tio n on indebtedness, Congress c le a rly
granted the government the authority to incur “ debt,” that is, the power to incur obligations payable
out o f the general revenues o f the government. The power to incur “ debt” is c le a rly tied to the po w e r
to tax, because in incurring debt, the government pledges its credit, i. e., its ta x in g power. See Id . at
55-56. Thus, the lim ita tio n on incurring debt in Section 11 must be interpreted consistently w ith the
Page 21 Request fo r D e c la ra to ry Judgment, CRQ03-
Page 15 o f
pow er to tax. Because Congress did not impose an assessment rate in the O rganic Act, Congress
clea rly granted th e legislature the power to impose taxes on the fu ll market value o f property. We
thus can only in te rp re t the debt lim itation in Section 11 consistently w ith the maximum grant o f
pow er to tax a llo w e d by Congress. It follow s that the congressionally im posed lim ita tio n on
government indebtedness under Section 11 is based on the fu ll market value o f property, and not
anything less. W hether the legislature chooses to levy based upon assessed values which are low er
than actual values, or whether the legislature declines to tax the property at a rate necessary to satisfy
the underlying obligations, are matters o f policy and fiscal management w hich this court caim ot
dictate. Nor are w e called to pass upon those questions. The issue before us relates to the object
upon which the debt lim it in Section 11 is based, and basing it on appraised values is e n tire ly
consistent w ith the taxing authority granted to the legislature under the Organic Act.
3. M eaning o f “ P roperty.”
[24]
The next relevant issue pertains to the property upon which the debt lim it is to be calculated.
Under Section 11, the government’s indebtedness shall not exceed 10% o f the tax valuation o f the
“ property on Guam.” The Governor argues that all property on Guam is to be considered, re a l and
personal, and w itho u t regard to whether the property is exempt from taxation. The AG argues that
because only real property has been assessed for taxation purposes, only real property is to be
considered in determ ining the allowable indebtedness. The AG further argues that property w h ic h
is exempted from taxation should not be considered.
[25]
Again, w ith this issue, we look first to the language o f Section 11, and draw comparison to
the debt-lim itation provision contained in the Organic A ct o f the V irg in Islands. Under 48 U .S .C .
§ 1403, the V irg in Islands’ total indebtedness is a percentage o f the value o f “ real property.” U S C A . § 1403. The same Congress in enacting Section 11 lim ited Guam’s debt to a percentage
o f “ property.” Because the word “ property” in Section 11 is not further m odified or c la rifie d , it
Page 22 Request fo r D eclara t o r y Judgment, CRQ 03-
Page 16 o f
could only m ean that all property on Guam, whether real or personal, be p o te n tia lly included in
calculating the d e b t lim it. Property clearly includes both real and personal property. See M
c QUILLIN,
s u p ra , § 41.08 (“ The valuation [o f property used to calculate the d e bt lim it] is usually
based on the .. . v a lu e o f personal as well as real property, but in some ju risd ictio n s the . . . value
o f real estate is th e basis.” ); see McLeland v. Marshall County, 201 N.W. 401, 409 (Iowa 1924)
(fin d in g that the term “ property” in the constitutional debt lim itation p ro visio n means real and
personal p ro p e rty); 5awc/?v. CityofCabool, 148 S.W. 1003,1006(M o.Ct. A pp. 1912) (holding that
stock o f m erchants are included in determining tax valuation o f “ property” in the debt-lim itation
provision).
[26]
Further, u n lik e the V irgin Islands’ Organic Act, where the debt lim it is based on the ‘ta x a b le
property in th e islands,” the debt lim it in Guam’s Organic A ct is to be based on the “property on
Guam.” C o m p are 4SC.S.C. § 1403, wit/z 48 U.S.C. § 1423a. One conclusion fro m this comparison
is that Congress d id not intend to base Guam’s debt lim it on taxable property, or in other w ords,
property currently taxed^. This conclusion is conceivable; however, such interpretation disregards
7 -We note that the Governor argues that “taxable property” in the Virgin Islands’ O rganic Act refers to property
which may be taxed, as distinguished from property that is being taxed. See Governor s Op>ening Brief, p. 30 n. 14 (July
7 2003) The Governor argues that Section 11 should be interpreted the same way, as including in the debt lim it all
property which is capable o f being taxed, i.e., is taxable. The Governor’s contention that both Organic Acts should be
interpreted in a sim ilar manner ignores the fact that the two provisions employ different language. If the G o v e rn o r’s
interpretation o f the V irg in Islands’ Organic Act were accepted, then this would mean that by deleting the phrase “taxable
property” in Section 11, then all property on Guam, whether taxable or not {i.e., capable o f b ein g taxed or not), can be
used to determine the debt lim it. This is untenable because i f interpreted in that manner, then w e could include property
on Guam owned by the United States in calculating the debt lim it. W e do not think the Congress intended th a t U.S.
owned property be included. Overall, we think that the phrase “taxable property” in the V irg in Island’s Organic A c t is
better interpreted to mean property which is actually taxed, as distinguished from property w h ic h is merely capable o f
being taxed. See Campbell v. Red Bud Consol. Sch. Dist., 198 S.E. 225, 229 (Ga. 1938) (concluding that the v a lu e o f
personal property exempted from taxation should not be included in determining the debt lim it o f 7% of the assessed
value o f all taxable property). In fact, it appears from the Virgins Islands’ Five-Year Plan fo r Fiscal Recovery th a t the
debt lim it is based on property that is actually being taxed. See 5 Y e a r Plan for Fiscal Recovery, www.usvi.org (July
23 2003). In the report it was stated that in 1999, the Virgin Island’ s debt lim it was $731 m illio n , which is ten percent
o f the
“ ta x a b le
p ro p e rty
in
th e
V ir g in
Is la n d s ”
v a lu e d
at
$ 7 .3 b illio n .
See
httpV/www usvi org/oit/5yrplan/section%20viii%20plan%20of%20finance_pages l-25.htm (J u ly 23,2003). In th a t same
year, the government collected $55,382,513 in real property tax. See http://www.usvi.org/oit/5yrplan/part%20i%20-
Page 23 Request fo r D e c la ra to ry Judgment, CRQ03-
Page 17 o f
language o f Section 11 and the policies underlying debt lim itation provisions.
[27]
Section 1 1 provides that the debt lim it be based on the “ tax valuation” o f property in Guam.
Congress must h a v e meant something when it used the word “ tax” in the first part o f the clause. By
using the tenn t a x valuation, it is clear that the debt lim it is to be based on the value o f property
being taxed. B y specifying that the tax valuation is to be used, there would be no need to then say
that the debt lim it is to be based on the taxable property. I f so, the clause w o u ld read: “ aggregate
tax valuation o f th e taxable property on Guam.” Because “ tax” is used in the firs t part of the clause,
it would be superfluous to then say that the debt lim it is to be based on the taxable property.
Moreover, it is im prudent to base the debt lim it on non-taxed property because such property is not
revenue generating. “ Debt” in the constitutional sense is secured by taxes and revenues fro m the
general fund. T h e object o f the lim it is to place a cap on debt which is to be satisfied fro m the
general revenues o f the government. Property which is not taxed does not contribute to the general
revenue o f the governm ent, and thus should not be used to determine the debt lim it. See State ex rel.
Village o f Oak H i l l v. Brown, 180 N.E. 707, 709 (O hio 1932) (finding that because bonds were
secured by taxable property, and because the indebtedness was therefore calculated based upon
taxable property, the 1930 list, which included non-taxable property, could not be used in
determining the c ity ’s debt lim it) (emphasis added)*.^ I f the government decides to tax currently
%20section% 20i_exhibit%20i-30,%20pages%20i-30%20and% 20i-31,htm(July 23, 2003). Because real property tax
is levied at 1.25% o f 60% o f the actual value o f real property, a simple calculation reveals that a tax on $7.31 b illio n
would yield approximately the same amount as the tax actually collected fo r that year.
See
http://www.usvi.org/oit/5yiplan/part%20i%20-%20section%20ijgeneral%20fund_pages%20i-l%20through%20i-40.htm
(July 23, 2003) Thus, it appears that the $7.31 billion which the government based its debt lim it on included the value
o f property which was actually taxed, and not exempt property. Id . (noting that 46% o f all real property in the V irg in
Islands is exempt from real property taxes by virtue o f both the local law and the Virgin Island’s Organic Act).
® See also Employees’ Retirement System v. Ho, 352 P.2d 861, 886-87 (1960), where the dissenting ju stices
provided a good explanation o f the rationale for tying the debt lim it to the property values, stating:
It has been argued that the use o f a percentage o f assessed value as a measure o f the
State debt lim it is without significance, since the real property tax is a county
Page 24 R e q u e s te r D e c la ra to ry Judgment, CRQ03-
Page 18 o f
exempt property in the future, then its debt lim it may be increased accordingly at that later p o in t in
tim e.
[28]
A c c o rd in g ly; under Section 11, property which is not taxed at the present time, in clu d in g
personal p ro p e rty and exempt real property, is not included in determining the debt limit.
4.
[29]
C alculating the Debt lim it: S ufficiency o f 2002 Tax R olls
Having determ ined that under Section 11, the debt lim it is to be based on the appraised value
o f a ll taxed p ro p e rty on Guam, the next logical question is where or how to ascertain the appraised
value o f property. The language o f Section 11 does not answer the question.
[30]
Unlike th e debt-lim itation provisions in other jurisdictions. Section 11 does not specify the
particular in te rv a l o f time when the debt lim it computation is to be determined. Cf. Allen, N E 2d at 27 (“ N o po litica l or municipal corporation in this State shall ever become indebted in any
marmer or for a n y purpose to an amount in the aggregate exceeding two percent o f the value o f the
revenue. However, as explained by the Chairman o f the Committee on Taxation
and Finance during debate. . . upon consideration o f the debt lim it provisions, June
1 9 ,1 9 5 0 : the people that buy the bonds are interested in the ratio o f your debts to
y o u r assessed value because while all o f the tax revenues of the State or the counties
naturally are available for the payment o f the debt, it s been customary for
bondholders to look to the real property tax as their real collateral.
It is noteworthy that the power to impose a real property tax is reserved to the State
by Article V II, section 3, so that this customary collateral may be looked to when
the general faith and credit o f the State are pledged as is done in the case o f general
obligation bonds, even though there be no real possibility that resort to the real
property tax may be necessary.
Employees' Retirement System, 352 P.2d at 886-87.
^ This interpretation is not inconsistent with our previous determination that the appraised value of property be
used to determine the government’s debt limit. It is one thing to base the debt lim it on a valuation consistent w ith the
legislature’ s maximum authority to tax property, because it is the taxes on property which secures the debt. So lo n g as
the legislature can tax property at its full appraised valuation, there is adequate security underlying the debt. T h is is
especially so in light o f the fact that the legislature may increase the tax rate (i.e., the levy), to satisfy the governm ent’ s
debt It is a different thing altogether to say that the government can incur debt based on property it has chosen not to
tax at all. Such exempt property cannot possibly generate revenue, thus does not secure the debt, and therefore should
not be included in the determining the debt lim it at the present tim e.
Page 25 Request fo r D e c la ra to ry Judgment, CRQ03-
Page 19 o f
taxable property w ith in such corporation, to be ascertained by the last assessment fo r State and
county taxes, p re v io u s to the incurring o f such indebtedness . . . .” ) (quoting A rtic le 13, § 1 o f the
Indiana C onstitution) (partial emphasis added). Notwithstanding such om ission in Section 11, we
conclude that the value o f property must necessarily be based on the tax ro ll in e ffe c t at the tim e the
debt is incurred. D e b t lim its are generally calculated based on the value o f property listed at the time
the governmental debt is incurred. State v. Spring City, 260 P.2d at 527,529 (U tah 1953) ( It is true
that the validity o f an indebtedness should be determined as o f the tune when it is incurred. . . . If,
therefore, the bonds in question were valid when issued, they do not become in v a lid because o f the
fact that the defendant Spring C ity ended the year 1948 w ith a deficit.” ). Thus, it is at that tim e that
the debt lim it should be determined.
[31]
Under G uam law, the tax assessor is required to make a new tax lis t each year. Title 11 G C A
§ 24305 (1996) (“ A im ually, on or before the first day o f September, the assessor shall ascertain all
the taxable property in Guam and shall assess it to the persons owning or cla im in g it on the firs t
M onday in M arch o f that year at the value as determined in accordance w ith §24306.” ); T itle GCA § 24320 (1996) (“ The assessor shall prepare an assessment ro ll in w hich shall be liste d all
property which it is the duty o f the assessor, to assess.” ). The annual tax ro ll is to be certified b y the
Secretary o f the Board o f Equalization by October 31st o f each year. See T itle 11 GCA § (1996). These armual lists contain the property valuations for property on Guam. See D ecl. o f
Artem io B. Hagan, Vi 19-23 (July 7, 2003). Exempt property is also noted on the annual ro ll. See
Decl. o f Artem io B. Hagan, V 19-23 (July 7, 2003). Thus, the most recent tax ro ll, which contains
the most recent tax valuations, should be used to determine the government’ s debt lim it.
[32]
Therefore, in determining the government’ s current debt lim it, we use the appraised
valuations o f property as certified in the 2002 tax ro ll. In so doing, we reject the A G ’s contention
that the 2002 tax list cannot be relied upon because it was computed in violation o f 11 GCA § 24306,
Page 26 Request for D eclaratory Judgment, CRQ03-
Page 2 0 o f
w h ich provides th a t property on Guam be revalued every three years. As emphasized by the A G ,
the last triennial va luation required under 11 GCA § 24306 was conducted in 1993, and became
effective in 1995 - The AG argues that because a valuation has not been conducted since then, and
because there is evidence that the property values on Guam have severely depreciated since that
tim e, the 2002 ta x lis t cannot be relied upon in determining the govenunent s current debt lim it. We
disagree.
[33]
T itle ll G C A §24306asitexistedpriortoam endm entbyP .L.27-21,(hereinafter“ l l G C A
§ 24306 (1996)” )? provided in relevant part;
Commencing w ith the first Monday in March o f 1978 and continuing every three (3)
years thereafter the assessor shall reascertain the value o f all property in Guam and
such va lu a tio n shall be used as the basis fo r assessment during the annual
adjustments fo r property which has been either improved or suffered loss, as
provided b y §24307.
11 GCA § 24306 (1996). Under 11 GCA § 24307, the tax valuations for the years intervening the
triennial valuations are to be based on the last triennial valuation as updated pursuant to section
24307. S pecifically, section 24307 requires the tax assessor to ascertain the value of all p ro p e rty
w hich has become taxable since the last valuation, such as new improvements to real p ro pe rty, or
has changed in value due to a change in use, destruction, or other loss. T itle 11 GCA § (1996).
[34]
On June 25,2003, P.L. 27-21 was enacted, w hich amended 11 GCA § 24306 to provide that
i f the tax assessor fails to conduct the triennial valuations o f property in Guam as required under that
section, then the 'fa s t completed valuation as supplemented by the annual adjustments provided fo r
in §24307 shall be the property tax valuation used under this Chapter.” Guam Pub. L. 27-21, § (June 25, 2003). Essentially, P.L. 27-21 identifies the manner in which the armual assessments are
to be generated i f the required triennial valuation is not conducted.
Page 27 Request fo r D e c la ra to ry Judgment, CRQ03-
[35]
Page 21 o f
N otw ithstanding the recent amendment to section 24306, for purposes o f determ ining the
debt lim it we are constrained to determining the sufficiency o f the 2002 lis t w ith regard to the law
at the time the lis t was certified. The amendment to section 24306 pursuant to P.L. 27-21 is not
relevant here because it was not in effect at the time the 2002 tax ro ll was ce rtifie d. The procedure
fo r establishing armual tax valuations announced in section 24306 as amended cannot w o rk to
retroactively a ffe c t the valuations contained in the 2002 tax ro ll.
[36]
A t the outset, we agree w ith the A G that the fact that the Organic A c t does not include a
requirement that ta x valuations be conducted at a particular frequency indicates that the Congress
gave the legislature the authority to determine the frequency o f valuations fo r assessment purposes.
The legislature’ s intent as to when tax valuations were to be conducted was evident at the tim e the
2002 tax ro ll was certified. Specifically, the legislature required, by statute, that property valuations
be conducted every three years. 11 GCA § 24306 (1996).
[37]
However, we do not find that the failure to undertake the triennial valuation required b y
GCA § 24306 (1996) rendered the 2002 tax ro ll, and the valuations contained therein, in v a lid fo r
purposes o f ascertaining the debt lim it. The reason is evident in the statutory language. T itle GCA § 24306 (1996) specifically provides that the triennial valuations “ shall be used as the basis
fo r assessment. . . .”
11 GCA § 24306 (1996). Thus, w hile the fact that the required trie n n ia l
valuations were not conducted may affect the va lid ity or accuracy o f individual tax assessments, an
issue we do not decide here, these triennial valuations are sim ply not required for purposes o f
determining the debt lim it. W ith regard to the debt lim it, we have already stated that the calculation
is to be based on the most recent tax valuation as certified by the responsible government o ffic e r at
the time the debt is incurred.
Page 28 Request fo r D e c la ra to ry Judgment, CRQ03-
[38]
Page 2 2 o f
We fu rth e r emphasize that it is unnecessary to address the AG ’s contention that the 2002 tax
lis t cannot be u s e d for taxation purposes because o f the alleged decline in values o f property on
Guam. Such an in q u iry concerning the accuracy o f the tax lis t is more relevant in a case brought for
the purposes o f challenging the propriety o f tax assessments, and in any event, necessarily requires
the benefit o f th e fact-finding process and the mechanisms available in such proceedings.
For
purposes here, w h e re the question is whether the 2002 tax lis t can be relied upon in calculating the
debt lim it, all th a t is required is a determination o f whether the 2002 tax lis t was developed in
accordance w ith the sufficient procedures provided under the law. To the extent that s u ffic ie n t
procedures existed to ensure a fair and reasonable valuation, we are satisfied that the current ta x lis t
may be used to calculate the debt lim it.'”
[39]
A p a rticu la r method o f property tax valuation must be sustained unless the assessor ’ s actions
are “ discrim inatory or so unreasonable that property is substantially overvalued and thus in ju stice
and ille g ality re s u lt. . . .” Uniroyal, Inc. v. Board o f Tax Review, 438 A.2d 782, 789 n.8 (C onn.
1981). The test fo r unreasonableness must be judged in the first instance by reference to the lim its
on the taxing pow er set forth under applicable law.
[40]
The only lim it to the legislature’s taxing power in the Organic A ct is the requirement in
Section 11 that taxes be uniform. 48 U.S.C.A. § 1423a. (“ Taxes and assessments on property . . .
may be imposed fo r the purposes o f the government o f Guam as may be uniform ly provided b y the
Legislature o f Guam.” ). The fact that the 2002 tax ro ll was based on a 1993 appraisal does not
appear to violate the requirement o f uniform ity in the Organic Act, nor does it render the valuations
in the 2002 lis t unacceptably discrim inatory or unreasonable. In fact, other courts have found tax
valuations spanning this length o f time to be acceptable. See Uniroyal, In c., 438 A.2d at
This is not to foreclose the A G from challenging, in accordance with Guam law, the preparation of the 2 0 0 tax roll list.
Page 29 Request fo r D e c la ra to ry Judgment, CRQ03-
Page 23 o f
(confirm ing the legislature’s authority to determine that tax assessment valuations be conducted
every ten years) (**The remedy o f revaluation was established by the legislature and it was the
judgm ent o f the legislature that the remedy need only be available once each decade.” ); c f Allen, N .E.2d at 27 (q u o tin g an Indiana statute, Chapter 316 o f the Acts o f 1959, as providing fo r the
pQj“ taxation purposes, o f a ll real estate and improvements made thereon in 1961 and
every eight years thereafter").
[41]
M oreover, there are mechanisms w hich exist in the statutory scheme to ensure the fairness
o f the valuations in the 2002 list. Under 11 GCA § 24307, the assessor is required to update the tax
ro ll annually w ith inform ation regarding new properties and the destruction o f o ld properties. G C A § 24307 (requiring the tax assessor, during the years between the trie n n ia l assessment, to
“ ascertain the value o f a ll property . . . w hich shall have become taxable since the last valuation,
including new improvements or additions to old im provem ents. . . and in the case o f destruction or
in ju ry . . . the value o f which shall have been included in the former valuation o f the property, the
assessor shall determine the value o f such loss and reduce the valuation accordingly. ). Furthermore,
property owners w ho claim a reduction in valuation based on the change in use o f their property, or
because o f destruction or in ju ry to the property, are required to file a report w ith the tax assessor by
M arch 1st o f the year in which the reduction is sought. T itle 11 GCA § 24310 (1996). S im ila rly ,
regard to reduction in appraisal values due to market forces, the law provides a mechanism to
challenge an annual assessment. See T itle 11 GCA § 24509 (1996) (“ [A ]n y person assessed, o r his
agent, may file w ith the Board [o f Equalization] on or before September 15 [u n til October 15], a
w ritten application for equalization o f his assessment or correction o f the ro ll. ), and T itle 11 §
24511 (1996) (“ The Board, upon a showing o f unreasonableness, may increase or reduce any
assessment . . . throughout Guam.” ) (emphasis added). Thus, the law provides mechanisms to
protect taxpayers from being taxed on an inaccurate assessment. A failure to file a report w ith the
Page 30 Request fo r D e c la ra to ry Judgment, CRQ03-
Page 2 4 o f
tax assessor c la im in g a devaluation based on change in use or destruction o r in ju ry to property
results in the w a iv e r o f “ o f any right to such reduction in the valuation.”
11 GCA § 24310.
S im ilarly, a fa ilu re to file an application for equalization on or before October 15 fo r the alteration
o f the roll o f a n y year bars a claim for alteration o f the ro ll fo r that year. T itle 11 GCA § (1996). Thus, th e law forces property owners to challenge the last tax lis t and the valuations
contained therein. Presumably, taxpayers act in accordance w ith their rights and w ith the interest
in not being subjected to higher taxes." Because the tax lists are composed o f property valuations
w hich reflect va lu e s based on the last assessment in lig h t o f taxpayer challenges to property values,
the valuations contained in the 2002 tax ro ll possess an indicia o f reliability.
[42]
From our record, it appears that adequate procedures existed for arriving at the valuations in
the 2002 tax ro ll. Furthermore, property owners have not been unduly deprived o f their statutory
rights to challenge assessments. Thus, we find that the 2002 tax ro ll was the product of a fa ir and
reasonable valuation system. Accordingly, the 2002 tax lis t may be relied upon to determine the
current debt lim it under Section 11.
[43]
Although this is not a contested suit in the traditional sense, we adopt the standard fo r such
cases that the burden to show that a tax valuation system and the methodology employed therein is
unreasonable rests w ith the person challenging them. See T itle 11 GCA § 24511 (1996) (providing
" In fact, there have been many appeals made to the Board o f Equalization. W e do note that there are over
approximately 300 pending assessment appeals currently before the Board, several of w h ic h represent appeals by
condominium or m ulti-fam ily residences. See Decl. o f Artemio B. Hagan, U 18 (July 7, 2 0 0 3 ). These represent the
appeals outstanding since 2000. This is indeed problematic to us. However, we do not fin d this detrimental to the
analysis herein because o f the representation that the Governor has appointed members to the Board who are aw aiting
confirmation. W e can only presume that the Board members, when appointed, w ill act expeditiously in carrying out th e ir
duties as set forth under the law. W e also find that most o f the outstanding appeals were file d in 2001 and 2002, thus
the backlog is for recent years. To the extent there becomes a backlog for a significant num ber o f years, then we m a y
have a clearer case that the valuation system is failing. Moreover, until those appeals are concluded, the presumption
is that the assessments are correct. See F M C Corp. (Peroxygen Chems. D iv.) v. Unmack, 677 N .Y .S .2 d 269,272 ( N . Y .
1998) (“Our analysis begins with the recognition that a property valuation by the tax assessor is presumptively v a lid .
.”). Additionally, the numbers o f appeals are not high in relation to the total number o f land and building parcels on
Guam, which, according to the record, exceeded 50,000.
Page 31 Request fo r D e c la ra to ry Judgment, CRQ03-
Page 25 o f
that the Board o f Equalization may increase or reduce an assessment “ u p on a showing o f
unreasonableness” ); Uniroyal, Inc., 438 A.2d at 789 n.8. Here, the AG has n o t shown th a t the
statutory procedures governing the establishment o f the 2002 tax ro ll are inadequate for purposes
o f arriving at the current valuation. Accordingly, and in lig h t o f the fact that the 2002 tax lis t has
not been invalidated by a court o f competent jurisdiction in the appropriate case, we conclude that
the 2002 list m a y be considered in calculating the government’s current debt lim it.
[44]
A ccording to the documents in the record, the appraised values o f the real property on Guam
and structures thereon as certified on the 2002 tax ro ll is $11.333 billion. See D ecl. o f A rtem io B.
Hagan, 1 22 (Ju ly 7,2003). Approxim ately $183.7 m illio n o f the total represents exempt property.
Decl. o f Artem io B . Hagan, Tf 23 (July 7, 2003). Thus, the appraised value o f non-exempt property
is $11.1493 b illio n . In accordance w ith the 2002 list, the government’s debt lim it, calculated at 10%
o f the appraised value, is $1.11493 b illio n .
5. “ Indebtedness”
[45]
The fin a l issue before the court is whether the issuance o f the bonds authorized under P.L.
27-19 would viola te the Organic Act in lig h t o f our interpretation o f Section 11. In calculating the
debt lim it pursuant to a constitutional debt-lim itation statute, the court must: (1) determine the
“ aggregate tax value o f property in Guam;” (2) calculate the amount which is 10% o f that am ount;
(3) determine the outstanding “ public indebtedness;” and (4) determine whether the indebtedness
contemplated under P.L. 27-19, when added to the outstanding “public indebtedness,” would exceed
the 10% figure. See M ille r v. City o f Glenwood, 176 N .W . 373, 376 (Iowa 1920) (“ An observance
o f . .. [the constitutional debt-lim it] provision involves: First, an inspection o fth e tax list to ascertain
the amount o f taxable property in value in the city; and, second, avoidance o f debt beyond the lim it
o f 5 per cent, o f such value.” ). Having discussed the firs t two issues relevant to the calculation, the
remaining issues relate to the outstanding public indebtedness, and the indebtedness which m a y be
Page 32 Request for D eclarato ry Judgment, CRQ03-
Page 2 6 o f
created upon the issuance o f the bonds.
[4 6 ]
Section 1 1 imposes a lim it on “ public indebtedness.” 48 U.S.C.A. § 1423a. Thus, in
determining the am ount o f current governmental debt, we must interpret the te rm “ indebtedness.”
[47]
Courts agree that the terms “ debt” and “ indebtedness” in the constitutional sense are not
technical terms; b u t rather, should be viewed “ in th e ir broad, general meaning, o f all contractual
obligations to p a y in the future for considerations received in the present.” K e lle r, 49 A. at 782; see
also City o f H a rtfo rd , 493 N.W.2d at 51 (“ [T]here is nothing technical about the meaning o f debt
in its constitutional sense.” ); Knowlton v. Ripley County Mem ’IHasp., 743 S .W .2d 132,136 (M o.
Ct. App. 1988) (“ A debt is understood to mean an unconditional promise to pay a fixed sum at some
specified time, an d is quite different from a contract to be performed in the fu tu re , depending upon
a condition precedent, which may never be performed, and which cannot rip e n into a debt u n til
performed.” ) (c ita tio n omitted). Sim ilarly, debt, in a constitutional sense, has been characterized as
an obligation in w h ich the debtor is obliged to pay and the creditor has a right to receive and enforce
payment. City o f H artford, 493 N.W.2d at 51 n. 12; State ex rel. Capitol A d d itio n Bldg. Comm ’n v.
Connelly, 46 P.2d 1097, 1100 (N.M . 1935) (“ The idea o f a ‘debt’ in the constitutional sense is that
an obligation has arisen out o f contract, express or im plied, which entitles the c re d ito r
unconditionally to receive from the debtor a sum o f money, which the debtor is under a le g a l,
equitable, or m oral duty to pay w ithout regard to any future contingency.” ) (citation o m itted).
Furthermore, debt only arises out o f an obligation to pay money from funds to be provided in the
future, as distinguished from funds presently on hand. See City o f Hartford, 493 N.W.2d at 51; see
also Hodges v. Crowley, 57 N.E. 889, 892 (111. 1900) (fin d in g that debt in the constitutional sense
is something payable in the future because an obligation payable out o f present funds is characterized
as “ one thing sim ply given and accepted in exchange fo r another” ) (citation omitted). A n o th e r
recognized proposition is that constitutional debt lim itations “ comprehend[ ] a debt pledging fo r its
Page 33 Request fo r D eclarato ry Judgment, CRQ03-
Page 2 7 o f
repayment the general faith and credit o f the state or m unicipality . . . and contem plating the levy
o f a general p ro p e rty tax as the source o f funds w ith w hich to retire the same.” State ex rel. C apitol
Addition Bldg. Comm n, 46 P.2d at 1101. Finally, to constitute debt, the o b lig a tio n “ must be an
absolute undertaking; i f the m unicipality may avoid its obligation or i f there rem ain conditions
precedent to it, there is no indebtedness.” City o f H artford, 493 N. W.2d at 51 n. 13 (citation om itted).
Thus, “ executory and contingent contracts which are to be performed in futuro do n o t constitute an
indebtedness against the municipal or quasi m unicipal corporation, in the sense o f the constitutional
inhibition, until such contracts have been performed.” ’^ Knowlton, 743 S.W.2d at 137 (recognizing
that installment lease w ith the option for annual renewal were not debts) (cita tio n omitted).
[48]
As shown above, courts scmtinize the term “ debt” in constitutional debt-lim itation provisions
w ith regard to bo th the nature o f the obligation its e lf and the source o f paym ent securing the
obligation. From these principles, courts have recognized various types o f obligations which are not
included in the d e fin itio n o f “ debt.” Section 11 specifically excludes certain obligations fro m the
debt calculation. Section 11 provides that “ [bjonds or other obligations o f the government o f Guam
payable solely fro m revenues derived from any public improvement or undertaking shall n o t be
considered public indebtedness ofGuam w ith in the meaning o f this subsection.” 48 U.S.C.A. 1423a.
We do not believe that the exclusion in Section 11 precludes us from otherwise interpreting the term
“ indebtedness” as used in Section 11. The most that can be said is that Congress intended that there
be no question that certain obligations are not to be included in determining the amount o f p u b lic
indebtedness for debt-lim itation purposes. Accordingly, we w ill interpret “ indebtedness” in Section
11 w ith reference to the definition o f “ debt,” which necessarily encompasses exclusions, recognized
by other courts.
Because contingent obligations are not “ debt” in the constitutional sense, the so-called “ unfunded lia b ility ”
obligations o f the Retirement Fund are not “debt.” This liability is contingent in nature.
Page 34 Page 28 o f
Request fo r D e c la ra to ry Judgment, CRQ03-
[49]
Whether certain governmental obligations constitute debts in the constitutional sense, and
are thus to be inclu d ed in the debt lim it calculation, is a highly litigated issue. F or purposes here,
we w ill contain the analysis to the outstanding obligations evidenced in the record. The fo llo w in g
is a lis t o f outstanding obligations o f the government o f Guam as o f December 31, 2002, set forth
in the Declaration o f Edward Untalan, the Finance and Economic Director o f the Guam Econom ic
Development and Commerce Authority:
1. Note to Farm ers Home Adm inistration (“ Superior Court Note” )
secured by the Judicial Building Center and court fees
2. Government o f Guam General Obligation Bonds, 1993 Series A
secured by the F u ll Faith and Credit o f the Government o f Guam
3. Government o f Guam General Obligation Bonds, 1995 Series A
secured by the F u ll Faith and Credit o f the Government o f Guam
4. Government o f Guam $10 m illio n loan as per P.L. 26-84 secured by
the pledge o f Federal Government Section 30 monies and the Full Faith
and Credit o f the Government o f Guam
5. Government o f Guam Lim ited O bligation Infrastmcture Improvement
Bonds, 1997 Series A, secured by Hotel Taxes
6. Government o f Guam Lim ited O bligation Highway Refunding Bonds,
2001 Series A , secured by Liquid Fuel Taxes, Vehicle Registration and
License Fees, etc.
7. GEDA Tobacco Settlement Asset-Backed Bonds, Series 2001A ,
secured by Tobacco Settlement Receipts
8. GEDA Tobacco Settlement Asset-Backed Bonds, Series 2001B,
secured by Tobacco Settlement Receipts
9. Government o f Guam Lim ited O bligation (Series 30) Bonds,
Series 2001A , secured by the pledge o f Federal Govermnent Section monies and the F u ll Faitti and Credit o f the Government o f Guam
10. Revenue Bonds secured by the revenues generated by a government
agency or instrum entality’^
$
6,678,
$
135,235,
$
50,020,
$
10,000,
$
64.195.
$
47.875.
$10,702,980.$13,494,478.$
70,675,
$
774,360,
See Deck o f Edward Untalan, E xhibit A (July 7, 2003).
[50]
The total amount o f these debts rounded upwards to the nearest dollar amounts to
$1,183,236,250. O f that amount, the Revenue Bonds (Item 10) are not considered “ debt” because
they are fu lly payable and secured only b y the revenue generated from p u blic improvements or

This Item represents 13 separate bond issuances w ith outstanding amounts due. A ll o f these bonds are
payable directly from the revenues of the government entity.
Page 35 Request fo r D e c la ra to ry Judgment, CRQ03-
Page 29 o f
undertakings. S e e 48 U.S.C.A. § 1423a (“ Bonds or other obligations o f the government o f Guam
payable solely fro m revenues derived from any public improvement or undertaking shall not be
considered p u b lic indebtedness o f Guam w ithin the meaning o f this subsection.” ).
[51]
S im ilarly, the Superior Court Note (Item 1), w hich is secured by court fees and a mortgage
on the judicial ce n te r building, is sim ilarly not “ debt” because the obligation is secured by a pledge
o fth e fees payable to the court which are revenues from a public undertaking. Id . A d d itio n a lly, the
fact that the b u ild in g is used to secure the note does not render the note a debt because there is no
pledge ofthe general revenue fo r its payment. See Lerch v. Md. Port Auth. ,2 1 4 A .2 d 7 6 1 ,7 7 2 (M d.
1965). In Lerch v. Maryland Port Authority, the court recognized the m a jo rity view that “ the
acquisition o f p ro p e rty by a m unicipality under an agreement whereby the cost thereof is to be paid
out ofth e revenue from the property its e lf does not give rise to a debt. . . w ith in the meaning o f a
constitutional o r statutory lim itation o f indebtedness, although the property so acquired is
encumbered by a mortgage or lien to secure the payment o f the cost thereof, where the encumbrance
does not attach to any other property o f the m u n ic ip a lity---- ” Id. (citation om itted). Although the
court there considered a debt-lim itation provision significantly different from ours, we agree w ith
the rationale that the pledge o f a structure to secure the payment o f bonds or other obligation issued
to finance its construction is not “ debf ’ because “the m unicipality can walk away fro m the obligation
none the poorer. From the point o f view o f assets and revenues available for expenditure it is in the
same position after entering into these obligations as it was before.” Id. at 774 (citation om itted)
(distinguishing obligations secured by previously existing property from obligations secured by
property which is to be constructed w ith the bond proceeds, the latter o f w hich is not “ debt” ); City
o f Hartford, 493 N.W .2d at 52 (“ According to the pre-existing asset doctrine, an obligation is not
debt in the constitutional sense i f it is neither 1) a general obligation o f the m u n icip a lity entitling the
creditor to look to the m unicipality’s revenue for repayment nor 2) secured by any asset owned by
Page 36 Request fo r D e c la ra to ry Judgment, CRQ03-
Page 3 0 o f
the m unicipality p r io r to its incurring the obligation.") (emphasis added).
[52]
Furtherm ore, the bonds secured by the tobacco settlement money (Item s 7 and 8) are not
considered “ d e bts” because they are secured by a “ special fund’ which is n o t funded by revenue
derived from ta xa tio n , and the obligation does not now, or cannot in the future, burden the general
fund. Bd. o f State Harbor Comm’rs v. Dean, 258 P.2d 590, 592 (Cal. Dist. C t. App. 1953). “ [A ]
lim ita tio n upon m unicipal indebtedness is not violated by an obligation w hich is payable o u t o f a
special fund, i f th e m unicipality is not liable to pay the same out o f its general funds should the
special fund p ro ve to be insufficient, and the transaction by which the indebtedness is incurred
cannot in any event deplete the resources o f the m unicipality." Id. (emphasis added) (c ita tio n
om itted).
[53]
We do fin d , however, that the bonds secured by other taxes such as hotel tax and fu e l tax
(Item s 5 and 6), w hich are part o f the general fund, constitute “ debts” fo r purposes o f the debtlim ita tio n provision.
These bonds are not secured by “ the revenues derived from a p u b lic
improvement or undertaking” and thus do fa ll w ithin the obligations excluded from indebtedness
in Section 11. Furthermore, these bonds do not fa ll w ith in the special fund doctrine. We agree w ith
the jurisdictions w hich hold that “ an obligation to be funded from general tax revenues, whether they
be ad valorem or excise taxes, is a ‘debt’ w ith in the meaning o f the debt-lim itation provision. ” State
ex rel. Lesmeister v. Olson, 354 N.W .2d 690, 697 (N .D . 1984). By accepting the argument th a t “ a
pledge o f any specific tax revenues would be sufficient to invoke the special fund doctrine, the
constitutional debt lim itation would be largely n u llifie d , since the legislature could exempt alm ost
any obligation from its strictures merely by identifying a specific tax from w hich the o b lig a tio n
could be paid.” Id. at 698 (citation omitted). “ Under this contention the Legislature... could d ivid e
the public revenue into numerous subdivisions, calling one the ‘road fund,’ another the ‘ school
fund ’ . . . and others almost w ithout lim it. Debts could then be contracted in unlim ited amounts and
Page 37 Request fo r D e c la ra to ry Judgment, CRQ03-
Page 31 o f
payable in the fa r distant future, and s till be immune from attack as v io la tin g constitutional
pj-QYisions lim itir ig indebtedness . . . . A mere statement o f the proposition carries w ith it, it seems
to us, its own re fu ta tio n .” Id. (citation omitted).'"’
[54]
A ll other item s listed above pledge the fu ll fa ith and credit o f the government, and are thus
“ debts” in the constitutional sense and are to be added to the overall government indebtedness. State
ex rel. Capitol A d d itio n Bldg. Comm’n, 46 P.2d at 1101 (debt is an obligation “ pledging fo r its
repayment the general faith and credit o f the state or m unicipality . . . and contem plating the levy
o f a general p ro p e rty tax as the source o f funds w ith w hich to retire the same. ).
[55]
The G overnor also admits that in addition to the bond obligations lis te d above, there is
currently an estim ated deficit o f $ 10,642,709. The Governor argues that these amounts are not debts
under Section 11 because they are obligations made in anticipation o f revenues fo r the fiscal year.
We agree. O bligations which are part o f current expenses, and are expected to be paid from current
revenues, are not debt. See City ofWaycross v. Tomberlin, 91 S.E. 560, 561 (Ga. 1917); Wilkes
County V. M ayor and Council o f Washington, 145 S.E. 47, 53 (Ga. 1928) (“ B efore a lia b ility fo r a
legitim ate current expense can be incurred by a m unicipality w ithout creating a d e b t... there must,
at the time o f incurring the lia b ility , be a sufficient sum in the treasury which can be la w fu lly used
to pay the lia b ility incurred, or there must be authority and ability to raise a sufficient sum to
discharge the lia b ility by taxation during the current year . . . .” ) (citation om itted). The current
obligations identified are not “ debts” because they are not payable in the future from taxes to be
collected beyond the fiscal year.
W e note that the court in Olson discussed the meaning o f “debt” under a significantly different debt-lim itation
provision, however, again, we find that court’s logic to be compelling for application with regard to the limit contained
in Section 11.
Page 38 Request fo r D e c la ra to ry Judgment, C R Q 03-
[56]
Page 32 o f
In his O pening B rief, the AG identifies several other obligations, not treated above, w h ich
he believes sh o uld be included in the calculation o f the current outstanding debt. These in clu d e :
1. U tility Payments to GPA
2. Payments to th e Retirement Fund
3. Vendor Payables
4. W ithholding T a x Payments from 5. Past Due Incom e Tax Refunds
6. Past Due O bligations for the current year
7. Receivables through May 30,2003 due to the Gov’t o f Guam Retirement Fund
8. D e p a r tm e n t o f E d u c a tio n D e b t
[57]
$ 30,400,$ 25,300,$ 5,300,$ 15,400,$139,200,$ 80,000,$130,500,$ 21,000,
We do n o t find that any o f these items are “ debt” under Section 11. These items appear to
have been incurred w ith the purpose o f payment out o f revenues for the years that th e y were
incurred. Thus, a t the time they were incurred they were current obligations, and they have not
changed in form m erely because they were not paid as contemplated during the fiscal years in w hich
they became due.
[58]
A ccordingly, in lig h t o f the foregoing, the total amount o f “ p u b lic indebtedness” is
$378,000,000. A s stated earlier, according to the 2002 tax list, the appraised value o f th e real
property on Guam and structures thereon is $11.333 b illio n . See Decl. o f A rtem io B. Hagan, ^ (July 7, 2003). Approxim ately $183.7 m illio n o f the total represents exempt property. D e cl. o f
Artem io B. Hagan, t 23 (July 7, 2003). Thus, the appraised value o f non-exempt p ro p e rty is
$11.1493 b illio n , rendering the government’ s debt lim it, calculated at 10% o f the appraised value,
to be $1.11493 b illio n .
[59]
The fin a l rem aining issue is whether the issuance o f the bonds as authorized by P .L. 27-
w ill cause the government to exceed the debt lim it. We fin d that it would not. Even assuming the
total amount o f bonds authorized (totaling $418,309,857) are issued, and assuming that a ll bonds
issued under P.L. 27-19 are considered “ new” debt to be added to the government’ s current
Page 39 Request fo r Declaratory Judgment, CRQ03-
Page 33 o f
indebtedness o f $378,000,000, the debt lim it o f $1.11493 b illio n would not be exceeded.*^
IV .
[60]
Section 11 o f the Organic A ct lim its the public indebtedness o f Guam to 10% o f the
“ aggregate tax valuation o f the property on Guam.”
This debt lim it is to be calculated on the
appraised value o f the real or personal property currently subject to taxation. The appraised values
o f such property should be taken from the tax ro ll in effect at the time the debt is incurred. We fin d
that the 2002 tax lis t is appropriate for use in calculating the government’s current debt lim it
notwithstanding that the last valuation o f the property on Guam was conducted in 1993. Based on
the valuations provided in the 2002 tax lis t, and considering the current outstanding debt o f the
government o f Guam, the issuance o f bonds authorized under P.L. 27-19 w ould not violate Section
11 o f the Organic Act.
Richard H . Benson
Benjamin J.F. Crux
R IC H A R D H. BENSON
Justice Pro Tempore
F* P h ilip C arbu IIid o
F. PH ILIP C AR BU LLID O
C hief Justice
BEN JAM IN J.F. CRUZ
Justice P ro Tempore
cer.ify Is1full iruc and eorrce. eop) ' ' '"e
orlelnal on r.lc in .he <>mtcof ihe
clerk of .he 'iupremc
of Guam
Dal«f at lla^aiua, (ii.an'
JUL 1 3 h ndda S. T)uenqiL
V'Vr.'J,- i-'CA'...- ---------- '

It is w orthy o f mention that the bonds under P.L. 27-19 which may be used to fund an escrow to pay debt
service on the 1993 Series A bonds are not “debt.” See Keeney v. Kanawha County Court, 175 S.E. 60, 61 (W . Va.
1934). “[Tjhere is . . . overwhelming authority to the effect that the issuance o f refunding bonds is not the creation o f
a new debt, but is sim ply a change in the form o f the old and in the evidence representing it.” Id.
Page 40 APPENDIX
2
Page 41 FILED
SUPREK^E COURT
nr

IN TH E SUPREME C O URT OF G U A M
JuL Z8 3 14 flh ’
In Re: Request o f Goveraor.Felix P.
Camacho Relative to the Interpretation
and Application o f Section 11 o f the
Organic A ct o f Guam,


Douglas B.Moylan, Office o f the Attorney )
General,
)
Party in Interest.
)
_____________________________________)
TO:

N O T IC E O F E N T R Y
ONDOCKET
Governor Felix P. Camacho,
Petitioner

Supreme Court Case No.CRQ03-
A rthur Clark
655 S. Marine Dr. St. Tamuning, Guam
Elizabeth J. Greenberg
Ste. 2-200 E, Judicial Center
120 West O ’Brien Dr.
Hagatna Guam
On July 28, 2003, the Opinion filed on July 23, 2003, was entered on the docket in the above-

entitled matter.

Dated this 28“' day o f July, 2003.

SIRENA S. PEREZ
Clerk o f Court

DECLARA T W N O F M A IL IN G

On the 28“’ day o f J u ly , 2003, I enclosed and sealed a copy o f the NOTICE OF ENTRY ON
D O C KET in an envelope addressed to the individuals in said notice. I caused the same envelopes
w ith postage affixed to be placed in the U.S. M ail.

I declare under penalty o f perjury that the foregoing is true and correct.
Dated this 28“’ day o f July, 2003.
IMELTDA B. DUENAS
Declarant

2 0 032 1 0 1
Page 42 APPENDIX
3
Page 43 R E G I|I\^ E D
oAi ( j / t f / t f l AL’S OFFICE
I M IN A 'B E N T E S IE T E N A L IH E S L A T U R A N G U A H A N
2003 (F IR S T ) R e g u lar Session
C E R T IF IC A T IO N O F P A S S A G E O F A N A C T T O I M A G A 'L A H E N G U A h A N
This is to certify that B ill N o . 47 (C O R ), ''A N A C T T O A D D §1520 T O T IT L E 5,
GUAM
C O D E A N N O T A T E D , R E L A T IV E T O A U T H O R IZ IN G
THE
GOVERNOR
OF G U A M , I
M A G A 'L A H E N
GUAHAN, TO
ISSU E
G O V E R N M E N T O F G U A M B O N D S A N D B O N D A N T IC IP A T IO N N O T E S
F O R T H E PUR PO SE O F P A Y IN G C E R T A IN G O V E R N M E N T O F G U A M
EXPEN SES; A N D T O A M E N D F O R R E L A T E D PUR PO SES C E R T A IN
R E L A T E D P R O V IS IO N S O F L A W ," was on the 16'‘" day of A p ril, 2003, duly
and re g u larly passed.
vicente (ben) c. p an gelin an
Speaker
una-Barnes
T in a
Senator and Legislative Secretary
This A c t w as received h y I Maga'lahen Guahan th is
day o f A p ril, 2003, at ^ ^ l^ 'c lo c k
Assistant Staff O fficer
Maga'lahi's O ffice
APPROVED:
It U
F E L IX P. C A M A C H O
I Maga'lahen Guahan
Date:
A pril 28,
Public L aw N o .
27-19
Page 44 M IN A ’B EN TE S IE T E N A L IH E S L A T U R A N G U A H A N
2003 (F IR S T ) R e g u lar Session
B ill N o . 47 (C O R )
A s am ended b y th e C o m m itte e on
E co no m ic D e v e lo p m e n t, R etirem e nt,
In ve stm e n ts, P u b lic W o rks & R e g u la to ry
F u n c tio n s , and as am ended in the
C o m m itte e o f th e W h o le .
Introduced by:
Com m ittee
on
Economic
D evelopm ent,
Retirem ent,
Investm ents, Public W orks &
Regulatory Functions_________
By request of I Maga'lahen
Guahan, the G overnor of Guam ,
in accordance w ith the Organic
A ct of G uam , as amended
A N A C T T O A D D §1520 T O T IT L E 5, G U A M C O D E
A N N O T A T E D , R E L A T IV E T O A U T H O R IZ IN G T H E
G O V E R N O R O F G U A M , I M A G A 'L A H E N G U A H A N ,
T O IS S U E G O V E R N M E N T O F G U A M B O N D S A N D
B O N D A N T IC IP A T IO N N O T E S FO R T H E PUR PO SE
O F P A Y IN G C E R T A IN G O V E R N M E N T O F G U A M
EXPENSES; A N D
TO
AMEND
FO R RELATED
PURPOSES C E R T A IN R E L A T E D P R O V IS IO N S OF
LAW .

BE IT E N A C T E D BY T H E PEO PLE O F G U A M :

Section 1.
L eg islative F in din gs and In te n t.
I Liheslaturan Guahan

hereby finds that the accum ulated G eneral Fund deficit w ill result in current

revenues available in the G eneral Fund being insufficient to psy certain

obligations of the General Fun d and th at a m echanism is needed to provide
1
Page 45
the necessary cash to the General Fun d to p ay such obligations u n til a surplus

of current revenues over current expenditures can retire the deficit. I

Liheslaturan Gudhan hereby also finds th at through the issuance of bond

anticipation notes and bonds as p ro v id e d herein the governm ent can fu n d its

current needs w hile retiring the d eficit over tim e.

therefore hereby authorizes the issuance of bond anticipation notes and bonds

as p ro vid ed herein, provides fo r said notes and bonds to be used to finance

the deficit so that it m ay be retired over tim e, and amends certain related

provisions o f law .

I Liheslaturan Gudhan
S ection 2. A new Section 1520 is hereby added to T itle 5, G uam Code
A nnotated, to read as follows:
"§1520. A u th o riza tio n to Issue Bonds fo r D e fic it Financing.
(a)

A u th o riza tio n o f Issuance o f Bonds. The G overnor of

G uam , I Maga'lahen Gudhan, is authorized to issue one or m ore

series of bonds of the governm ent of G uam as p ro vid ed in this

Section, in an aggregate p rin c ip a l am oim t not to exceed the

am oim t necessary to p ro v id e T w o H u n dred Eighteen M illio n

Three

D ollars ($218,309,857) fo r the paym ent of the G eneral Fund

expenses listed in subsection (m ) (other than subsection (m )(v ii) of

this Section) and in an aggregate principal am ount necessary to

p ro vid e Tw o H u n d re d M illio n D ollars ($200,000,000) fo r the

paym ent of the G eneral F u n d expenses listed in subsection

(m )(v ii), and in each case to fu n d necessary reserves and to pay
H undred
N in e
Thousand
Eight H u n d red
Fifty-Seven
Page 46
expenses incurred in connection w ith the issuance of such bonds

n o t already included in an existing appropriation fo r or the

regu lar budget of any governm ent agency or instru m entality or

p ub lic corporation p ro vid in g any service in connection w ith the

issuance of such bonds; p ro v id e d , how ever, that bonds m ay not

be issued in an am ount th at w o u ld cause a violation of the debt

lim ita tio n provisions of 48 U SC 1423a (§11 of the O rganic A ct of

G uam ).

(b) A u th o riza tio n o f Issuance o f Bond A n tic ip a tio n Notes.

The G overnor, I Maga 'lahen Gudhan, is also authorized to issue one

or m ore series of bond an ticipation notes of the governm ent of

G uam as provided in this Section, in an aggregate p rincip al

am ount not to exceed the am ount necessary to provide F ifty

M illio n D ollars ($50,000,000) fo r any of the purposes for w h ich the

bonds described in subsection (a) of this Section are authorized.

Unless otherwise expressly p ro vid e d , the term "bonds" as used in

this Section shall include the notes, but the term "notes" shall be

lim ite d to the bond an ticipation notes. Participation of banks

doing business on G uam shall n ot be restricted. The authorization

in this subsection (b) fo r the issuance of the Bond A n ticipatio n

Notes shall be effective w h en the financing is approved b y
Liheslaturan Gudhan for the bonds authorized in subsection (a) of

this Section 1520.
3
Page 47
(c)
Term s and C o n ditio n s D eterm in ed b y C ertificate or

In d e n tu re . The terms and conditions of the bonds shall be as

determ ined by I Maga'lahen

certificate or indenture au th o rizin g the issuance of the bonds upon

or p rio r to the issuance of the bonds; pro vided, how ever, that such

term s and conditions shall be consistent w ith this Section, and th at

the bonds shall m ature not la te r than the year 2024, and shall bear

interest at such rates and be sold fo r such price or prices as shall

result in a yield to the bondholders not exceeding six and one-half

Gudhan by the execution of a
percent (6.5% ) per annum .
(d) V a lid and B in d in g L im ite d O bligatio n s.
Except as

m ay be determ ined by I Maga'lahen Gudhan in accordance w ith

this subsection (d), any bonds authorized by this Section shall

constitute the v a lid and leg ally b in din g lim ite d obligations of the

governm ent of G uam payable fro m and secured by a pledge of the

revenues described in subsection (e) of this Section. A n y notes

au th orized b y this Section m a y also be payable from and secured

by a pledge of the proceeds of the bonds authorized by this

Section. As determ ined b y I Maga'lahen Gudhan, any bonds

au th orized b y this Section m a y constitute the va lid and b in din g

general obligations of the governm ent of Guam . To the extent I

Maga'lahen Gudhan makes such a determ ination (i) the governm ent

of G uam pledges its fu ll fa ith and credit fo r the punctual paym ent

of both p rin cip al of and interest on the bonds and covenants th at
Page 48
there shall be collected an n u ally in the same m anner and at the

same tim e as governm ent revenue for other purposes is collected,

such sum as is required to p a y the principal of and interest on the

bonds, (ii) such pledge shall be valid and bin din g from the tim e

the pledge is m ade, and (iii) there are hereby appropriated from

the General Fund such sums as w ill equal in each year the am ount

o f m oney necessary to p a y the principal and interest on such

bonds. A ll officers charged b y la w w ith any d u ty in the collection

o f the revenues of the governm ent from w hich debt service on the

bonds w ill be payable shall do every la w fu l thing necessary to

collect such sum. The v a lid ity of any such bonds shall not be

affected by the v a lid ity or re g u larity of any proceedings for the

paym ent of the G eneral F u n d expenses funded by the bonds.

(e)
Source o f and S ecu rity fo r Paym ent. Except as m ay be

determ ined by I Maga'lahen Guahan in accordance w ith subsection

(d) of this Section, the bonds shall be m ade payable solely from ,

and shall be secured solely by a pledge of, any or all of the

revenues derived by the governm ent of G uam from taxes against

persons on account of th e ir businesses and other activities in

G uam w hether now

governm ent pursuant to Section 26201 of C hapter 26 of D ivision
of T itle 11, G uam Code A n n otated or any other provision of law

(collectively, the "Revenues") and shall not be payable from or

secured by any other source or sources of revenue except as m ay

be authorized by statute, except that the notes m ay also be
or hereafter im posed or levied by the
5
Page 49
payable from and secured b y a pledge of the proceeds of the

bonds.

binding from the tim e the pledge is made. The revenues pledged

and thereafter received by the governm ent o f G uam or by any

trustee, depository or custodian shall be deposited in a separate

account and shall be im m ed iately subject to the lien of such

pledge w ith o u t any physical delivery thereof or fu rth er act, and

the lien of such pledge shall be valid and b in d in g against all

parties having claim s of any k in d in tort, contract or otherwise

against the governm ent of G uam or such trustee, depository or

custodian, irrespective of w heth er the parties have notice thereof.

The indenture or certificate b y w hich such pledge is created need

n ot be recorded. A n y such pledge m ay be m ade subordinate to the

use of Revenues to p ay existing general obligation debts of the

governm ent of G uam .

(f)
A n y such pledge m ade hereunder shall be valid and
A p p ro p ria tio n o f Revenues. A ll Revenues are hereby

appropriated for the purposes of paying the p rin cip al and interest

on the bonds issued p ursu an t to this Section and the obligations

incurred by the governm ent pursuant to subsections (j) and (k) of

this Section. Revenues released from the lien of the indenture or

certificate pursuant to w h ich the bonds are issued shall be

available fo r ap p ro priatio n b y I Liheslaturan Gudhan fo r any other

la w fu l purpose.

(g) A d d itio n a l Bonds. N o th in g in this Section shall be

construed to prevent the governm ent of G uam fro m issuing, after
6
Page 50
appropriate

governm ent secured by revenues on a p arity w ith or subordinate

to the bonds authorized by this Section on such term s as m ay be

p ro vid ed by the indenture or certificate pursuant to w hich the

bonds are issued. N o th in g in this Section shall be construed to

p reven t the governm ent of G uam from issuing, after appropriate

enabling legislation, other obligations of the governm ent secured

b y the general obligation o f the governm ent on a p a rity w ith or

subordinate to the bonds au th o rized by this Section on such terms

as m ay be provided by the indenture or certificate pursuant to

w h ich the bonds are issued.

enabling
(h) W aive r
of
legislation,
Im m u n ity ;
other
obligations
Subm ission
to
of
the
Jurisdiction.

N o tw ith stand in g any substantive or procedural provision of

C hapter 6 of Title 5, G uam Code Annotated, the governm ent of

G uam w aives im m u n ity fro m any suit or action in contract on the

bonds, but does not w aive sovereign im m u n ity as to the personal

lia b ility of elected officials and employees of the governm ent of

G uam . The governm ent hereby submits to jurisdiction of the

Federal D istrict C ourt for the D is tric t of G uam for purposes of any

such suit or action in contract on the bonds.

(i)
N o Personal L ia b ility . N o em ployee or elected official

of the governm ent of G uam shall be in d iv id u a lly or personally

liab le for the paym ent of any am ounts due on any bonds issued

u nd er this Section, or fo r any other lia b ility arising in connection

w ith the bonds; p ro vided, h o w ever, that nothing in this Section
7
Page 51
shall
relieve

perform ance of any m in isterial d u ty required by law .
(j)

any
Form
em ployee
of
or
Bonds;
elected
official
Covenants;
from
A p p o in tm e n t
the
of

Fiduciaries. The technical fo rm

including

registration, paying agency, lost or m utilated bonds, negotiability,

cancellation and other term s or conditions not inconsistent w ith

this Section, including covenants relating to the collection of

revenues, shall be as specified in the certificate or indenture

executed by the G overnor, I Maga'lahen Gudhan, auth orizin g the

issuance of the bonds. The certificate or indenture shall appoint

one or m ore trustees, co-trustees or other fiduciaries authorized to

receive and hold in trust the proceeds of the bonds and moneys

relating thereto, to protect the rights of bondholders and to

p erfo rm such other duties as m ay be specified in the indenture.

The G overnor, 1 Maga 'lahen Gudhan, is also authorized to execute,

on

agreements, certificates or other instrum ents relating to the bonds

and the sale of bonds.

behalf
(k)
provisions
of
the
fo r
and language of the bonds,
execution,
governm ent
of
exchange,
G uam ,
any
transfer,
appropriate
A u th o riza tio n fo r C re d it Enhancem ent. The G overnor,

I Maga'lahen Gudhan, is au th o rized to enter into such contracts or

agreements w ith

financial institutions as he determ ines are necessary or desirable

to im prove the security and m arketab ility of the bonds issued
such banks, insurance companies or other
8
Page 52
under this Section. Such contracts or agreements m ay contain an

obligation to reim burse, w ith interest, any such banks, insurance

companies or other financial institutions fo r advances used to p ay

p rin cip al of or interest on the bonds and to indem nify any such

banks, insurance companies or other financial institutions fo r costs

and expenses incurred in connection w ith any such advance. A n y

such reim bursem ent obligation and any other obligations of the

governm ent under such contracts or agreements shall be payable

solely from , and secured solely b y a pledge of, revenues or in the

case of any such obligations related to bonds determ ined b y I

Maga'lahen Guahan to be general obligations of the governm ent of

G uam in accordance w ith subsection (d) of this Section, m ay be

general obligations of the governm ent of G uam as determ ined b y
Maga'lahen Guahan, and any such advance, if necessary, shall be

treated fo r O rganic A ct purposes as creating an obligation issued

to refun d the bonds.

(1)
Use o f Proceeds fro m the Sale of the Bonds. The

proceeds from the sale of the bonds shall be used to (i) to retire

any previously issued notes authorized under Subsection (b) of

this §5102, (ii) p ay the G eneral Fund expenses described in

subsection (m ) of this §5102 and w hich are otherwise appropriated

b y the Legislature, I Liheslaturan Guahan, (iii) establish necessary

reserves, (iv) p ay expenses relatin g to the authorization, sale and

issuance of the bonds, in clu d in g , w ith o u t lim itatio n , p rin tin g
Page 53
costs, costs of reproducing docum ents, credit enhancement fees,

u n d erw ritin g , legal, financial advisory and accounting fees and

charges, fees

p ro vid in g credit enhancement, costs of credit ratings and other

costs, charges and fees in connection w ith the issuance, sale and

d elivery of the bonds, and (v) fu n d capitalized interest on the

bonds fo r a period ending n ot later than th irty (30) months.

(m )
paid
to
banks
or
other
financial institutions
G en eral Fund Expenses. The General Fund expenses
authorized to be paid w ith the proceeds of the bonds are as

follow s:

(i)

2001 individual income tax refund $39,500,000; 2000 and prior

years estimated individual income tax refund $2,700,000 and

estimated

individual and corporate tax refund $72,000,000;

(ii)

payments

payments owed by Department of Public Works $13,324,650;

payments

$1,841,950* (*denotes amounts to be offset against monies owed

for the Medically Indigent Program to G M H );

(iii)

payments owed by the General Fund for Supplemental Annuities

$5,086,734; payments owed by the General Fund for retirement
incom e tax re fu n d paym ents
corporate
refund
$139,200,
$25,000,000;

u tility paym ents to G uam Pow er A u th o rity
owed
owed
hy Department
by
Guam
$30,450,
of Education $15,284,200;
Memorial
re tirem en t fu n d paym ents
estimated
Hospital
Authority
$25,285,
10
Page 54
contributions for line agency employees $10,088,437; payments

owed by the General Fund for retirement contributions for DO E

$10,109,886;

(iv)

2002 payroll obligations fo r line agencies

(v)

payments owed by line agencies for vendor payables $2,519,750;

payments

MIP/Medicaid
w ith h o ld in g tax paym ents
$15,398,
G en eral Fund V e n d o r payables th ru 09/30/02 $5,263,
owed
by
vendors
Department
of
Administration
$2,219,524; payments
to
owed by the

Department of Education fo r vendor payables $524,335;

(vi)

Southern

$1,000,000; Jose Rios Middle School earthquake repair $164,000;

school repairs $1,547,628;

T o tal

(v ii) to fu n d an escrow to pay debt service on all or a

portion of the G overnm ent of G uam G eneral O bligation

Bonds, 1993 Series A at a m atched m a tu rity .

(v iii) The paym ents authorized in this subsection (m ) shall,

w hen p aid, ap p ly to any existing app ro priatio n for the same

items in the FY2003 or p rio r year A pp ro priatio ns Acts, and

shall not constitute double appropriations.

The net proceeds fro m the sale o f the notes (after the

paym ent of the item s described in subsections (1) (iii) and (iv) of
p u b lic school repairs
High
School
air-conditioning
$2,711,system
replacement
$218,309,
11
Page 55
this Section and the fu n d in g of any capitalized interest on the

notes) shall be used first, to m ake past due u tility paym ents to the

G uam Pow er A u th o rity in an am ount up to Ten M illio n Dollars

($10,000,000), second, to m ake income tax refun d paym ents.

(n) Perm itted Investm ents. The proceeds o f the bonds, and

any revenues relating to such bonds, m ay be invested in, b ut only

in , the types of investm ents perm itted b y the certificate or

indenture pursuant to w h ich such bonds are issued.

(o) A p p ro val
by
G uam
Economic
D evelo p m ent
and

Commerce A u th o rity . §50103(k). T itle 12, G uam Gode Annotated,

provides that agencies and instrum entalities of the governm ent of

G uam shall issue bonds and other obligations only by means of

and through the agency of the G uam Economic Developm ent and

Com m erce A u th o rity ("G E D C A "). N o issue of bonds authorized

b y this Section shall be sold u n til the board of directors of G E D C A

has adopted a resolution ap p ro ving the sale of such issue.

(p) A p p ro val of V oters N o t R equired. N otw ithstanding

Sections 17311 and 17312 of A rticle 3, C hapter 17 of Title 3 of the

G uam Gode A nnotated, the issuance of the bonds authorized by

this Section shall n ot be requ ired to be subject to the approval of,

or placed before, the voters o f G uam ."

Section 3. Local Sales o f Bonds. The G overnor, I Maga'lahen Guahan,

shall undertake his best efforts to cause a portion of any bonds issued

pursuant to Section 2 of this A ct (§1520, T itle 5, G uam Code A nnotated), to be
12
Page 56
offered fo r sale to residents of G uam , as w ell as to residents of other

jurisdictions, if and to the extent that such offer and any sales resulting from

such offer do not increase the costs to the governm ent of G uam o f issuing and

repaying such bonds.

Section 4. A p p ro val o f Bonds and Bond A n ticip a tio n Notes. The

Legislature, I Liheslaturan Guahan, p ursu an t to §50103(k). T itle 12, G uam Code

A rm otated, hereby approves the issuance and sale by the governm ent of

G uam of bonds (not including any bond anticipation notes au th orized under

Section 2 of this A ct) for the purposes and in the principal am oim ts not to

exceed the purpose and lim its set fo rth in Section 2 of this Act; p ro vid ed that

the conditions to the issuance of such bonds shall have been m et, such bonds

have a fin a l m a tu rity not later than the year 2024, bear interest at such rate

and are sold for such price or prices as shall result in a yield to the

bondholders not exceeding six and o ne-half percent (6.5%) p er annum , and

are issued and sold in the m anner, fo r the purposes and subject to the

requirem ents

Arm otated.
and lim itations p ro vid ed
in
§1520, T itle
5, G uam
Code

The Legislature, 1 Liheslaturan Guahan, pursuant to §50103(k). T itle 12,

G uam Code A nnotated, hereby also approves the issuance and sale b y the

governm ent o f G uam of lim ite d obligation bond anticipation notes authorized

under Section 2 of this A ct in a p rin cip al am ount not to exceed F ifty M illio n

D ollars ($50,000,000); pro vided that the conditions to the issuance of such

bonds shall have been m et, such bonds have a final m atu rity n o t later than the

year 2024, bear interest at such rate and are sold for such price or prices as

shall result in a yield to the bondholders not exceeding six and one-half
13
Page 57
percent (6.5% ) per annum , and are issued and sold in the m anner, for the

purposes and subject to the requirem ents and lim itations p ro vided in §1520,

T itle 5, G uam Code Annotated.

The approvals set fo rth in this Section are subject to the subsequent

approval b y the Legislature, I

substantially fin a l form of the certificate or indenture described in subsection

(c) of §1520, added by this A ct to T itle 5, G uam Code Annotated.

Section 5,
Liheslaturan
Guahan, by statute, of the
Section 26208, A rticle 2, Chapter 26, T itle 11, G uam Code
A nnotated, is hereby amended to read as follow s:

"§26208. Creation of School O perations Fund. There is hereby created,

separate and apart from other funds o f the governm ent of G uam , a fund

kn o w n as the 'School O perations F u n d '. This Fim d shall not be com m ingled

w ith the G eneral Fund and shall be kep t in a separate bank account.

m onies in the School O perations Fund shall be used to cover the operational

expenses of the G uam D epartm ent of E ducation and all schools in the Guam

Public School System adm inistered b y th at D epartm ent as w e ll as any use

associated w ith the G uam Public School System, as determ ined by the law s of

G uam . The D epartm ent of A d m in is tra tio n shall deposit funds, at such times

and in such amounts as m ay be specified b y I Liheslaturan Guahan, in the

School O perations Fund.

appropriations from the School O perations Fund to the D epartm en t of

Education shall be subject to the ap p ro val of I Liheslaturan Guahan."

Section 6.
The
Beginning w ith the Fiscal Year 2000 budget, all
G E D C A charges and fees in connection w ith the funding,
issuance, sale and delivery of the debts o r bonds pursuant to this A ct shall be
14
Page 58
lim ited to the first One H u n d red Thousand Dollars ($100,000.00) o f such

charges and fees, and any am oim t from fees and charges over One H u n d re d

Thousand D ollars ($100,000.00) is hereby appropriated to the D epartm ent o f

Education (D O E ) to be used exclusively to m eet the m atching requirem ents o f

the Federal Em ergency M anagem ent A gency (F E M A ) grants for the rep air of

D O E facilities. G E D C A 's share of said charges and fees shall not be used fo r

paym ents o f any contracts related to lobbying services.

Section 7. The proceeds of the bonds authorized to pay G eneral Fund

expenses pursuant to §1520(m )(i) of T itle 5, G uam Code A nnotated, shall be

deposited d irectly into the Incom e Tax R efund Efficiency Paym ent Trust

Fund, as established by Public L aw 26-74.

Section 8.
The proceeds of bond anticipation notes and bonds as

p rovided in this A ct shall not be subject to any transfer au th ority of I

Maga'lahen Guahan.
15
Page 59 APPENDIX
4
Page 60 Page
C ita tio n /T itle
GU ST T . 5 , S e c .
22601,
E x e c u tio n
of

C o n tra c ts .
*2 1 3 7 5 G .C .A . §
G U A M CODE A N N O TA TE D
T IT L E 5. G O V E R N M E N T O PER ATIO N S
D IV IS IO N 2. A D M IN IS T R A T IO N OF T H E G O V E R N M E N T
C H A P T E R 22. G E N E R A L F IS C A L P O LIC IE S AN D C O N TR O LS
A R T IC L E 6. CO N TR ACTS
Current through P.L. 26-72 (2001)
§ 22601. E xecution o f C ontracts.
A ll contracts shall, after approval o f the Attorney General, be submitted to the Governor for his signature. A ll contracts o f
whatever nature shall be executed upon the approval o f the Governor.
SOURCE: G C § 6107.
N O T E S , R E F E R E N C E S , A N D A N N O T A T IO N S
CROSS-REFERENCES: Eor execution o f contracts made pursuant to the Procurement Law, see 5 GCA § 5121.
C o p y rig h t
(c)
W est
G roup

No
c la im
to
o rig in a l
U .S .
G o vt,
w orks
Page 61 APPENDIX
5
Page 62 Page
:ita tio n /T itle
ST T . 1 1 , S e c .
jU
24305,
Same:

V a lu a tio n .
8876 11 G.C.A. § Guam Code Annotated
T IT L E 11. FIN A N C E & T A X A T IO N .
D IV IS IO N 2. TAXES
C H APTER 24. R E A L PR O PER TY T A X
A R T IC L E 3.TA X ASSESSOR
Current through P.L. 26-
>24306. Same: V aluation.
For the calendar year 1977 the valuation o f all property shall be the 1978 valuation as shown on the assessment roll o f the
’;ovemment for 1976, provided, however, that in instances where property has been either improved or suffered loss in 1977 the
ssessor shall take into consideration such improvement or loss and adjust the assessment roll for such property accordingly.
Commencing w ith the first M onday in M arch o f 1978 and continuing every three (3) years thereafter the assessor shall reascertain the
mlue o f all property in Guam and such valuation shall be used as the basis for assessment during the annual adjustments for property
v'hich has been either improved or suffered loss, as provided by § 24307.
OURCE: GC § 19312.1, R/R by P .L 12-53, R/R by P.L. 14-107.
C o p y rig h t
(c)
W est
G roup

No
c la im
to
o rig in a l
U.S.
G o vt,
w orks
Page 63 APPENDIX
6
Page 64 Page

C ita tio n /T itle
GU S T T .
7,
Sec.
4104,
G o v e rn o r
and
L e g is la tu r e
m ay R e q u e s t
D e c la r a to r y
J u d g m e n t.
*3681 7 G .C .A . §
GUAM CODE ANNOTATED
T IT L E 7. C IV IL PROCEDURE
D IV IS IO N 1. COURTS AND JU D IC IA L OFFICERS
CHAPTER 4. SUPERIOR COURT
A R TIC LE 1. GENERAL PROVISIONS
Current through P.L. 26-72 (2001)
§ 4104. Governor and Legislature may Request Declaratory Judgment.
The Governor, in writing, or the Guam Legislature, by resolution, may request declaratory judgments from the Supreme Court
as to the interpretation of any law, federal or local, lying within the jurisdiction of the courts of Guam to decide, and upon any
question affecting the powers and duties of the Governor and the operation of the Executive Branch, or the Guam Legislature,
respectively. The declaratory judgments may be issued only where it is a matter of great public interest and the normal process of law
would cause undue delay. Such declaratory judgments shall not be available to private parties. The Supreme Court shall, pursuant to
its rules and procedure, permit interested parties to be heard on the questions presented and shall render its written judgment thereon.
Upon a writing, or resolution in the case of the Guam Legislature, by the party submitting the request for the declaratory judgment
that the party wishes the Supreme Court to dismiss its petition for declaratory judgment, the Supreme Court shall no longer have
jurisdiction and shall dismiss without prejudice the declaratory judgment case, provided that the request is filed with the Supreme
Court at any time before the Court renders its written decision.
SOURCE: Repealed and reenacted by P.L. 24-61:
N O TES, R EFE R E N C E S , A N D A N N O T A T IO N S
1985 Source: Article 4(c) Constitution o f Florida, as modified by Massachusetts Constitution, Article o f Amendment No. 85 amending Art. 2 o f
Ch. 3 o f the Mass, Constitution.
1985 Comment: Several states permit the governor, and Massachusetts permits the Governor, Legislature and Council, to seek opinions from
their respective Supreme Courts on matters respecting the duties o f the Governor and Legislature. It has been this drafter's experience that such a grant o f
jurisdiction would have solved many serious questions which have arisen, but which have lacked a forum for decision,
*3682 Under the usual rule, no case may be brought until it has ripened into a "case or controversy". This section w ill permit important issues
to be decided before that time and w ill avoid the necessity o f creating harm to some party in order to have a decision. Thus, a Massachusetts Opinion o f the
Justices determined certain powers of the Legislature and Governor before any employees had to be laid off. This Section would permit a better resolution of
serious questions than occurred in the 1978 District Court decision o f Wong v. Catnina wherein the Court decided a question relating to federal grants. No
defendant was forthcoming, so the case was decided essentially on a default. This Section would perrmt a fu ll hearing in such cases and decisions rendered under
this Section would be binding.
Note that the language permits the Governor to request opinions as the operation o f the Executive Branch, including questions involving
separation o f powers, and the Legislature to request opinions on the operation o f that Branch, but does not permit one Branch to request opinions as to the
operation o f the other where that operation does not impinge on the requesting branch's operations. The purpose o f this lim itation is to avoid one branch trying to
regulate the other through the courts.
C o p y r ig h t
(c )
West
G ro u p

No
c la im
to
o r ig in a l
U.S.
Govt,
w o rk s
Page 65 APPENDIX
7
Page 66 I M IN A 'B E N T E S IE T E N A L IH E S L A T U R A N G U A H A N
2003 (F IR S T ) R eg u lar Session
C E R T IF IC A T IO N OF PA SSA G E O F A N A C T T O I M AG A'LAHEN GUAHAN
This is to certify that B ill N o . 118 (C O R ), " A N A C T T O A M E N D §24306 O F
T IT L E
11, G U A M
CODE
ANNO TATED,
R E L A T IV E
TO
TH
V A L U A T IO N O F R EA L P R O P E R T Y IN G U A M A N D T O A D D A N E W
§24102(1) T O T IT L E 11, G U A M C O D E A N N O T A T E D , R E L A T IV E T O
C E R T IF IC A T IO N O F T H E A G G R E G A T E T A X V A L U A T IO N O F T H E
P R O P E R T Y IN G U A M ," was on the 2 5 * day of June, 2003, d uly and
re g u larly passed.
V ic e n te
c. p a n g e l i n a n
Jpeaker
T in a Rose M una-B arnes
S enator and Legislative Secretary
A c t was received by I hAugu'lcihcTi Gudhun this
F
day of June, 2003, at
-M.
Assistant S taff O fficer
Maga'lahi's O ffice
APPROVED:

F E LIX P. C A M A C H O
1 Maga'lahen Guahan
Date:
P u b lic L aw N o .
27-
o clock
Page 67 M IN A 'B E N T E S IE T E N A L IH E S L A T U R A N G U A H A N
2003 (First) R e g u la r Session
B ill N o . 118 (C O R )
Introduced by:
Committee on Economic
Development, Retirement,
Investments, Public Works &
Regulatory Functions________
By request of I Maga'lahen
Gudhan, the G overnor of G uam ,
in accordance w ith the Organic
A ct o f G uam , as amended
A N A C T T O A M E N D §24306 O F T IT L E 11, G U A M C O D E
A N N O T A T E D , R E L A T IV E T O T H E V A L U A T IO N OF
R E A L P R O P E R TY IN G U A M A N D T O A D D A N E W
§24102(1) T O T IT L E 11, G U A M C O D E A N N O T A T E D ,
R E L A T IV E T O C E R T IF IC A T IO N O F T H E A G G R E G A T E
T A X V A L U A T IO N O F T H E P R O P E R TY I N G U A M .

BE IT E N A C T E D BY T H E PEO PLE O F G U A M :

Section 1. §24306 o f A rticle 3, T itle 11, G uam Code Annotated, is

hereby amended to read as follow s:

"§24306. Same: V a lu a tio n .
For the calendar year

1977, the valu atio n of aU p ro p erty shall be the
valu atio n as show n on the assessment ro ll of the

governm ent fo r 1976, p ro vid ed , h o w ever, that in

instances w here property has been either unproved or
Page 68
suffered loss in 1977, the assessor shall take into

consideration such im p ro vem en t or loss and adjust the

assessment

Com m encing w ith the first M o n d a y in M arch of
and continuing every three (3) years thereafter, the

assessor shall reascertain the valu e of all p ro p erty in

G uam and such valuatio n shall be used as the basis for

assessment

p ro p erty w hich has been eith er im proved or suffered
ro ll
fo r
during
such
the
p ro p erty
an n ual
accordingly.
adjustments
for

loss, as provided b y §24307.

other provision of la w , if the va lu a tio n p rovided fo r in

this §24306 is not reascertained every three (3) years as

rec2u ired
by
this
Section,
N o tw ith stan d in g any
then
the
lust coiriplctcd

valu atio n as supplem ented b y the annual adjustments

p ro vid ed for in §24307 shall be the p ro perty tax

valu atio n used rm der this C hapter.

Section 2. A new §24102(1) is hereby added to T itle 11 of the G uam
Code A nnotated:
2g
"(1)
Aggregate tax valu atio n .
In
the event that

certification of the aggregate tax valuation o f the

p ro p erty in G uam , as set fo rth in §11 of the O rganic

A c t of G uam (48 U.S.C. §1423a), is required, then the

aggregate tax valuatio n of the p ro p e rty in G uam shall

be certified as beiag one h u n d red percent (100% ) of the

appraised value of the p ro p erty on G uam based on the
Page 69
last completed valu atio n conducted pursuant to §24306,

T itle 11, G uam Code A nnotated, as supplem ented by

the annual adjustm ents p ro vid ed fo r in §24307, T itle

11, G uam Code A n n otated ."

Section 3. E ffective D ate. The provisions of this A ct do not constitute

a change in la w , are declaratory o f existing la w , and shall ap p ly retrospectively

and shall be effective as of the date of the last completed valuation conducted

under A rticle 3, T itle 11, G uam Code A nnotated.

Section 4. S e ve rab ility. I f any provision of this L aw or its application

to any person or circumstance is fo un d to be in v alid or contrary to la w , such

in v a lid ity shall not affect other provisions or applications of this Law w hich

can be given effect w ith o u t the in v a lid provisions or application, and to this

end the provisions of this L aw are severable.
o
o
Page 70 APPENDIX
8
Page 71 received
FILED
SUPHEME COURT
n c n !! *■fj.

fiTTORMEY CEfJERAL'SlOffICE

Ur T, j ii i
j!JL

IN T H E SUPREME C O URT O F G U A M

)
7 IN RE:
REQUEST O F G O VER N O R F E L IX P.
8 C A M A C H O R E L A T IV E T O T H E
IN T E R P R E T A T IO N AND
9 A P P L IC A T IO N OF SEC TIO N 11 OF
TH E O R G A N IC A C T OF G U A M
_______________________
)
)
)
)
)
)
Supreme Court Case No. CRQ03-
ORDER

This matter comes before the court pursuant to a Request for Declaratory Judgment
13 filed by the Governor o f Guam, Felix P. Camacho (“ the Governor” ), in the above-captioned
14 matter on July 1, 2003. The Governor requests that this court issue a declaratory judgment
15 under T itle 7 GCA § 4104, regarding the interpretation o f section 1423a o f the Organic A ct o f
16 Guam (codified at 48 U.S.C. § 1423a).
This court has original jurisdiction to render declaratory judgments pursuant to T itle
18 GCA § 4104. However, in order for this court’ s jurisd ictio n to be properly invoked through
19 section 4104, any request fo r declaratory judgment must satisfy three jurisdictional requirements,
20 articulated in In re Request o f Gutierrez, 2002 Guam 1, T| 9, which follow .
(1) the subject matter o f the inquiry must be appropriate fo r section 4104 review;
(2) the issue raised must be a matter o f ^ e a t public importance; and
(3) the issue must be such that its resolution through the normal process o f law is
inappropriate as it would cause undue delay.
24 See In re Request o f Gutierrez, 2002 Guam 1 at
9 (citing 7 GCA § 4104).
25 A. Subject M atter o f the Inquiry
In re Request o f Guritierrez enumerates the two subject matters appropriate fo r an inquiry
under 7 GCA § 4104. They are (1) questions that require an interpretation o f a federal or local
2
^ ^
8
Page 72 2 law lyin g w ith in the jurisdiction o f Guam courts to decide; and (2) questions that affect the
3 powers and duties o f the Governor and the operation o f the executive branch, or o f the
Legislature. See In re Request o f Guritierrez, 2002 Guam 1 at ^ 9.
According to the request, Public Law 27-19 “ authorizes the Governor to issue government
6 bonds and bond anticipation notes fo r the purpose o f paying certain government o f Guam
7 expenses.” Request for Declaratory Judgment, p.2, Tf 7. However, “ [t]he Attorney General o f
8 Guam has opined that, ‘ [T]he Government o f Guam cannot borrow any money since we are
9 unable to determine whether the Organic A ct maximum ceiling fo r borrowing has in fact been
10 already exceeded.’” Request fo r Declaratory Judgment, p. 4, T[ 12.
A pplying the subject matter jurisdictional requirement to the challenges brought forth by
12 the Governor, the court finds that the questions o f the interpretation o f 48 USC § 1423a, and
13 Public Law 27-19, as w ell questions involving the powers and duties o f the Governor and the
operation o f the executive branch, are properly before this court pursuant to 7 GCA § 4104.
15 B. Great Public Importance

“ [P jublic interest signifies an importance o f the issue to the body p o litic, the community,
in the sense that the operations o f the government may be substantially affected one way or the
other by the issue’s resolution.” Id. at
26-28 . The Governor’s request states that, w ithout the
issuance o f the bonds as mandated by Public Law 27-19, “ the government is lik e ly to face mass
lay-offs, payless paydays and/or the shutdown o f certain government operations.” Request for
21 Declaratory Judgment, p. 3, T| 8.
The court finds that questions o f the interpretation o f 48 USC § 1423a, in lig h t o f Public
Law 27-19, as w ell questions involving the powers and duties o f the Governor and the operation
o f the executive branch are matters o f great public importance. See In re Request o f Gutierrez,
2002 Guam 1 at Tf 28 (holding that any challenge “ related to the Governor’s a b ility to manage the
executive branch, are matters o f ‘great public importance’ as they are ‘o f consequence in terms
Page 2 o f 3
Page 73 1 o f governmental function and resources.’ ” )
C. Norm al Process o f Law Causes Undue Delay


The anticipated delay through the normal processes o f law fnust be
excessive or
inappropriate” as compared to the process o f law through the filin g o f a request for declaratory
judgment under 7 GCA § 4104. Id. at f 29. T itle “ 7 GCA § 4104 was intended to provide a fast
track fo r the initia tio n o f cases before the Supreme Court o f Guam so that ratings could be
obtained on im portant issues o f law w ithout tim e consuming litig a tio n in the inferior court.” Id.
(citation omitted).

The Governor in his request states that “ [ i] f the matter is first brought before the Superior
10 Court o f Guam . . . a decision is unlikely fo r several months. The government’s current financial
11 condition w ill not perm it several months o f delay.” Request for Declaratory Judgment, p. 3 at ^
10.
The court finds that a resolution o f the questions relating to the interpretation o f law and
14 the powers and duties o f the Governor o f Guam require a speedy resolution and thus, the
Governor has satisfied this jurisdictional requirement.
In accordance w ith the foregoing, having determined that the request involves a matter o f
17 great public interest, that the normal processes o f law would cause undue delay, and that the re lie f
18 requested falls w ithin our jurisdiction under 7 GCA § 4104, the court hereby accepts the
19 Governor’s request for declaratory judgment for consideration pursuant to Rule 27 o f the Guam
20 Rules o f Appellate Procedure.
SO O RDERED, this 1st day o f July, 2003.
^
»HILIP C ARBU LLID O
C hief Justice

ceriify
3sjifo’||.(ruc and rtirre c i com nf ihc
RJr in flip o'ffire ol'ihp
ihc Supj-pmp Conr-i nl'Hi.r,?,
ai HayaJon
JUL 0 1 Page 3 o f Dcpn?)’ O c rk , iiupreQie O n in o f 0 ^
Page 74 APPENDIX
9
Page 75 In re Request o f Gov. Carl T.C. Gutierrez, P.L. 26-35 (Budget B ill)
Page 1 o f
IN THE SUPREME COURT OF GUAM
IN RE REQUEST OF GOVERNOR CARL T.C.
GUTIERREZ, RELATIVE TO THE ORGANICITY AND
CONSTITUTIONALITY OF PUBLIC LAW 26-Petitioner.
Supreme Court Case No. CRQ01-
OPINION
Cite as: 2002 Guam Filed: February 7,
Argued and submitted on November 13, Hagatfia, Guam
Aobearino for the Petitioner;
J. Patrick Mason, Esq.
Deputy Attorney General
Office of the Attorney General
Suite 2-200E, Judicial Center Bldg.
120 W. O'Brien Dr.
Hagatha, Guam
Apoearina for the Respondent:
Curtis C. Van de Veld, Esq.
Douglas B. Moylan, Esq.
Office of the Legislative Counsel
55 Hesler Street
Hagatha, Guam
BEFORE: PETER C. SIGUENZA, JR., Chief Justice, JOHN A. MANGLONA, Designated Justice, and RICHARD
H. BENSON, Justice Pro Tempore.
MANGLONA, J.:
[1] Petitioner Governor Carl. T.C. Gutierrez (hereinafter "Governor") filed a request for declaratory judgment
pursuant to Title 7 GCA § 4104 asking this court to declare specific provisions of Public Laws 26-35, 26-36, 2647, 26-49, and Bill No. 205 void under both the Organic Act of Guam and the Constitution of the United States. In
response, / Mina'Bente Sais Na Liheslaturan Guahan (hereinafter "Legislature") asked this court to dismiss the
Governor's petition, or alternatively, find the challenged provisions organic and constitutional in all respects. We
deny the Legislature's motion to dismiss, finding that we are properly vested with the authority under section to render declaratory judgments. However, we find that the Governor's request to declare section 7 of Public Law
26-35 unconstitutional does not fall within our grant of jurisdiction under section 4104, and therefore we decline to
render judgment on that issue. We grant review of the remaining issues presented by the Governor and find
certain challenged provisions to be in violation of the separation of powers doctrine.
http;//w w w . guamsupremecourt.com/op2002Guam01 .htm
7/29/2003
Page 76 In re Request o f Gov. Carl T.C. Gutierrez, P.L. 26-35 (Budget B ill)
Page 2 o f
I.
[2] The Legislature enacted Public Law 26-35 and appendices thereto by legislative override. Public Law 26-is the government of Guam's budget for the fiscal year 2002. Subsequent to passing P.L. 26-35, the Legislature
passed and the Governor signed into law Public Laws 26-36, 26-47, 26-49, and Bill No. 205-(l), the provisions of
which supplement and amend certain portions of the original budget law, P.L. 26-35. In its entirety, these laws
(hereinafter collectively referred to as the "Budget Bill") contain extensive and detailed provisions outlining the
amount of money appropriated to each division of the government and how the appropriated funds shall be spent.
[3] On October 4, 2001, the Governor filed the instant action, requesting that a declaratory judgment be issued
determining the constitutionality of certain provisions of the Budget Bill. The Governor is requesting that this court
invoke its jurisdiction to issue declaratory judgments under 7 GCA § 4104. Section 4104 provides in pertinent
part:
The Governor, in writing, or the Guam Legislature, by resolution, may request declaratory judgments
from the Supreme Court as to the interpretation of any law, federal or local, lying within the
jurisdiction of the courts of Guam to decide, and upon any question affecting the powers and duties
of the Governor and the operation of the Executive Branch, or the Guam Legislature, respectively.
The declaratory judgments may be issued only where it is a matter of great public interest and the
normal process of law would cause undue delay.
Title 7 GCA §4104 (1998).
A.
Motion to Dismiss
[4] The Legislature claims that 7 GCA § 4104 is ultra vires and therefore invalid. Specifically, the Legislature
argues that the Organic Act amendment, 48 U.S.C. § 1424-1 (a), that authorizes the legislature of Guam to create
a Supreme Court, did not authorize the legislature to vest that court with original jurisdiction to consider requests
for declaratory judgment. We reject the Legislature's challenge to the organicity of section 4104 and hold that this
court has jurisdiction to issue declaratory judgments pursuant to that section.-®
[5]
The Organic Act provides for the creation of the Supreme Court in general terms:
Local Courts; Appellate Court Authorized.
(a) Composition; establishment of local appellate court.
The local courts of Guam shall consist of such trial court or courts as may have been
or may hereafter be established by the laws of Guam. On or after the effective date of this Act
[January 5, 1985], the legislature of Guam may in its discretion establish an appellate court.
48 U.S.C. § 1424-1 (a) (1987) (emphasis added). The Legislature argues the Supreme Court's jurisdiction is
limited by the language of the above-referenced section to that of an "appellate" court. However, section 1424-(a) merely states that "the legislature of Guam in its discretion may establish an appellate court." It does not
define appellate court. The Legislature refers to the generic definition of appellate court in Black's Law Dictionary
to support its position that an appellate court does not review matters of first instance and is not a trial court.
However, reliance on the dictionary definition is unsound in light of the provision of the Organic Act which
provides:
Local Court Jurisdiction. The legislature may vest in the local courts jurisdiction over all causes In
Guam over which any court established by the Constitution and laws of the United States does not
have exclusive jurisdiction. Such jurisdiction shall be subject to the exclusive or concurrent
http;//www.guamsupremecourt.com/op2002Guam01.htm
7/29/2003
Page 77 In re Request o f Gov. Carl T.C. Gutierrez, P.L. 26-35 (Budget B ill)
Page 3 o f
jurisdiction conferred on the District Court of Guam by section 1424(b) of this title.
48 U.S.C. § 1424-1 (b) (1987). This section of the Organic Act gives the Legislature broad authority to define the
jurisdiction of local courts. The Legislature attempts to distinguish "local court" as used in section 1424-1 (b) from
"appellate court" as used in section 1424-1 (a). However, section 1424-1 (a) defines "local courts" as "such trial
court or courts as may have been or may hereafter be established by the laws of Guam." Thus, the Supreme
Court of Guam, as a court established by the laws of Guam, is included within the definition of "local court." The
language of section 1424-1 is not ambiguous. Because section 1424-1 gives the Legislature the authority to grant
jurisdiction to local courts, the Legislature may grant jurisdiction to the Supreme Court as it deems fit.-®
Moreover, unlike other state constitutions which define the respective jurisdiction of each court in that state, the
Organic Act does not define or limit the jurisdiction of the Supreme Court of Guam. Cf. State ex rel. Neer v. Indus.
Comm'n, 371 N.E.2d 842, 843 (Ohio 1978) (holding that because the Ohio constitution limited the court of
appeals' original jurisdiction to certain matters not including declaratory judgments, the court of appeals lacked
jurisdiction to render that type of judgment). The only limitation placed on the Legislature's power to grant
jurisdiction is in regards to causes within the exclusive jurisdiction of the federal courts. 48 U.S.C. § 1424-1(b). A
declaratory judgment under section 4104 is not a cause within the exclusive jurisdiction of the federal courts.
Therefore, it is within the Legislature's Organic Act powers to grant this court such original jurisdiction.
Accordingly, we deny the Legislature's motion to dismiss and hold that this court has jurisdiction to consider a
request for declaratory judgment pursuant to section 4104.
B.
Declaratory Judgments are Binding
[6]
Declaratory judgments issued by this court pursuant to section 4104 are binding. Although in substance
section 4104 most closely resembles the advisory opinion statutes in other jurisdictions, the language of section
4104 grants this court the authority to issue "declaratory judgments," and not advisory opinions. See 1 GCA §
4104 cmt. (referring to the advisory opinion clauses in both Florida and Massachusetts as providing the basis of
section 4104); see also Mel A. Topf, The Jurisprudence of the Advisory Opinion Process in Rhode Island, 2 Roger
Williams U. L. Rev. 207, 213, app. (1997) (providing text of all eleven advisory opinion clauses). While
recognizing the non-binding and extra-judicial nature of other advisory opinion clauses, we are restricted by the
plain language of our statute. See Pangelinan v. Gutierrez. 2000 Guam 11, H 23 ("In cases involving statutory
construction, the plain language of a statute must be the starting point"). Declaratory judgments are uniformly
considered binding. See Petition of Kariher, 131 A. 265, 269, 271 (Pa. 1925). Therefore, judgments issued by this
court under section 4104 are likewise binding.
III.
A.
The Governor's Arguments
[7]
The Governor argues that, through certain portions of the Budget Bill, the Legislature has violated the
separation of powers doctrine by either reserving for itself powers specifically given to the Governor in the
Organic Act or interfering with the Governor's ability to perform his constitutional functions. The Governor points to
four specific portions of the Budget Bill as being in violation of the separation of powers doctrine, to wit
1.
Appendix C of Public Law 26-35 and the amendments made thereto, which attempt to set
the staffing pattern of the executive branch;
2.
Section 11 of Legislative Bill 205, which mandates that the Child Support Division of the
Department of Law terminate its current lease and dictates certain terms of a new lease;
3.
Public Law 26-35, chapter IV, section 3(a), which imposes a reporting requirement for
staffing patterns, and Public Law 26-47, section 2(d), which imposes a reporting
requirement for holiday pay; and
4.
Public Law 26-47, section 7(b), which sets a specific date for filling the positions of Chief
Procurement Officer and Controller.
http://www.guamsupremecourt.eom/op2002Guam01.htm
7/29/2003
Page 78 In re Request o f Gov. Carl T.C. Gutierrez, P.L. 26-35 (Budget B ill)
Page 4 o f
The Governor also argues that chapter IV, section 7 of Public Law 26-35, which imposes liability on accountable
officers, is unconstitutionally vague and fails to provide government employees with adequate notice and a
hearing in violation of due process.
[8]
Because this case is brought pursuant to our original rather than appellate jurisdiction, all issues are
decided de novo. Issues of statutory interpretation and the determination of whether legislation is unconstitutional
are questions of law. Ada v. Gutierrez, 2000 Guam 22, H 10 (analyzing an issue of statutory interpretation);
People V. Perez. 1999 Guam 2 ,^ 6 (analyzing the constitutionality of a statute).
[9]
Under section 4104, this court has the power to issue declaratory judgments only at the request of the
Legislature or the Governor. 7 GCA § 4104. Furthermore, to pass jurisdictional muster, a party seeking a
declaratory judgment must satisfy three requirements: (1) the issue raised must be a matter of great public
importance; (2) the issue must be such that its resolution through the normal process of law is inappropriate as it
would cause undue delay; and (3) the subject matter of the inquiry is appropriate for section 4104 review. Id.
There are only two subjects appropriate for section 4104 review: questions that require an interpretation of a
federal or local law lying within the jurisdiction of Guam courts to decide, and questions that affect the powers and
duties of the Governor and the operation of the executive branch, or of the Legislature. Id. Unless a petitioner can
satisfy each of the above requirements, a request for a declaratory judgment must be denied. See In re Request
of Governor Carl T.C. Gutierrez, CRQ96-001, 1996 WL 870740, at * 4 (Guam Oct. 24, 1996) (refusing to issue a
declaratory judgment because the petitioner failed to meet one of the requirements under section 4104); In re
Opinions of the Justices, 49 N.E.2d 252, 255 (Mass. 1943) (citations omitted) (limiting the issuance of advisory
opinions to the strict confines defined in the state's Constitution).
B.
Liability of Accountable Officers
[10]
The Governor requests that this court issue a judgment declaring section 7 of Public Law 26-35, which
holds accountable officers strictly liable for any loss that occurs In their handling of public funds, to be in violation
of due process and thereby unconstitutional. More specifically, the Governor alleges that section 7 is too vague
and indefinite to provide adequate notice of the proscribed conduct and to be appropriately administered.
Additionally, the Governor argues that the automatic set-off provision of section 7 does not provide employees
with sufficient notice and hearing to satisfy procedural due process standards.
[11]
The threshold inquiry for any declaratory judgment request is whether the petitioner's request qualifies for
review under section 4104. The Governor's request must satisfy the three jurisdictional requirements set forth
above. We will turn first to the question of whether the Governor has presented this court with a request whose
subject matter falls within the purview of section 4104. As previously noted, section 4104 only permits the
Governor to ask the Supreme Court for: (1) an interpretation of an existing law that Is within Its jurisdiction to
decide; or (2) an answer to any question affecting his powers and duties as governor and the operation of the
executive branch.
1.
Interpretation
[12]
This court must initially determine whether a request seeking to declare a statute unconstitutional falls
within the meaning of section 4104 as a request for an interpretation of that statute. We find that it does not. While
the line separating constitutionality from interpretation may be fine, it is a desirable line to draw. This court is
primarily a court of appeals, with limited original jurisdiction. See Sorenson v. Swanson, 147 N.W.2d 620, 624-(Neb. 1967) ("This is a court the primary object of which is to review cases . . . . It is an appellate tribunal, and it is
given original jurisdiction in a few limited cases, most of which are extraordinary remedies . ..."). Thus, grants of
original jurisdiction, as over declaratory judgments in section 4104, should be read literally and construed
narrowly. See State ex ref Wieland v. Moore, 561 N.W.2d 230, 236 (Neb. 1997) ("if the drafters of [the article] had
intended to convey original jurisdiction upon this court for actions involving the constitutionality of a statute, the
drafters surely would have Included such actions in [the article].").
[13]
As noted, the substance of section 4104 resembles the advisory opinion laws of other ]urisdictions,
particularly in that the questions presented pursuant to section 4104 may only be brought by the Governor or
Legislature. 7 GCA § 4104. The few appellate courts that are permitted to render advisory opinions express a
reluctance to do so by strictly construing their advisory opinion clauses and refusing requests that do not fall
squarely within their clauses' terms. See In re Opinion of the Justices, 49 N.E.2d at 255; see also In re Advisory
Opinion to the Governor, 113 So. 2d 703, 705 (Fla. 1959) ("The corridor of organic authority for rendering
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advisory opinions is indeed a narrow one . . .
see also Opinion of the Justices, 413 A.2d 1245,1247-48 (Del.
1980); Opinion of the Justices, 105 A.2d 454, 456 (Me. 1952); Opinion to the Governor, 284 A.2d 295, 296 (R.l.
1971). But see In re Advisory Opinion (Chief Justice), 507 A.2d 1316, 1319-20 (R.l. 1986) (issuing an advisory
opinion despite the procedural deficiencies of the petition). The fear is that by involving the courts in a political
struggle between the other two branches, justices may find themselves "participating in a realignment of
governmental power by being compelled by the executive branch to review the work of the legislative branch."
Topf, supra, at 222 (citation omitted). Involvement by the courts also calls into question judicial independence and
invites the legislature and executive to pass on the responsibility of independently assessing the constitutionality
of their acts. Id. at 223.
[14]
Strict construction should be particularly applied with regard to section 4104 because the statute is a
means for parties to bypass the normal processes of law. Issues regarding the constitutionality of a statue,
whenever possible, ought be left to the normal processes of law. As recognized by the Supreme Court of Florida:
This court has many times declined to pass upon the constitutionality of a statute in rendering
advisory opinions, particularly where such a test can best be accomplished in adversary
proceedings appropriately briefed and buttressed by argument of counsel. This policy is the product
of the historical recognition of the presumed constitutionality of an act of the Legislature until such
presumption is set at rest by a court of competent jurisdiction in a proper adversarial proceeding.
In re Advisory Opinion to the Governor, 509 So. 2d at 301 (Fla. 1987); see also Opinion to the House of
Representatives, 264 A.2d 920, 921 (R.l. 1970) ("every reasonable intendment is made in favor of the
constitutionality of a duly enacted statute and that such a statute is presumed to be constitutional until the
contrary is established in appropriate litigation").
[15]
Furthermore, determining matters through a proceeding that bypasses the normal litigation process fails
to represent interests and protect rights as would an interested party in a fully litigated case. See Topf, supra, at
227 (citations omitted) ("A briefing from an interested party in an advisory opinion proceeding 'sometimes is not so
effective or so well-focused as that which follows thorough examination of the issues through the trial process.'");
see also Advisory Opinion, 113 So. 2d at 705 ("This court has many times declined to pass upon the
constitutionality of a statute in rendering advisory opinions, particularly where such a test can best be
accomplished in adversary proceedings appropriately briefed and buttressed by argument of counsel."). The
benefits of leaving matters to be fully litigated by interested parties is demonstrated by the well established "case
or controversy" requirement. Given the above-mentioned policies and in light of the fact that our statute, unlike the
advisory opinion laws of other jurisdictions, permits binding judgments to be issued, section 4104 should be
construed as strictly and narrowly as possible.
[16]
We recognize that there are evils which the issuance of a declaratory judgment pursuant to section can avoid. See 7 GCA § 4104 cmt. Specifically, hearing a matter before it has ripened into a true case or
controversy "avoid[sj the necessity of creating harm to some party in order to have a decision." Id.] see also Note,
Advisory Opinions on the Constitutionality of Statutes, 69 Flarv. L. Rev. 1302, 1304-05 (1956) (discussing how an
advisory opinion can prevent the enactment of an unconstitutional statute, avoiding both the time and expense of
challenging litigation and reliance by the general public). Flowever, we also recognize the dangers inherent in
turning the courtroom into a forum for political debate. This court is not the arena within which the executive and
legislative branches should seek to wage their political battles. Therefore, we approach section 4104 as most
courts have approached their respective advisory opinion laws in the past, cautiously and conservatively. While
we will not turn away from reviewing those issues properly before us, neither will we permit matters that fall
outside the plain language of section 4104 to be brought in on the shoulders of broad interpretation.
[17]
Flere, the Governor is asking the court, not to draw meaning from the language of section 7, but to declare
the provision unconstitutional and thereby void in its entirety. "An unconstitutional act is not a law; it confers no
rights; it imposes no duties; it affords no protection; it creates no office; it is, in legal contemplation, as inoperative
as though it had never been passed." In re Opinion of the Justices, 168 N.E. 536, 538 (Mass. 1929) (quoting
Norton V. Shelby County, 118 U.S. 425, 442, 6 S. Ct. 1121, 1125 (1886)). By contrast, interpretation, in its plain
meaning, is "[tjhe process of determining what something, esp. the law or a legal document, means; the
ascertainment of meaning." Black's Law Dictionary 824 (7th ed. 1999). When interpreting a statute, the court's
task is to determine the intent of the legislature and give the statute meaning without altering or amending the
statute's scope. See In re Advisory Opinion to the Governor, 504 A.2d 456, 459 (R.l. 1986) ("Our task in
construing any statute is to effectuate and establish the intent of the Legislature."). We find that a request
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challenging the constitutionality of a statute does not present the same inquiry as a request seeking the
interpretation of a statute. Thus, the Governor's request for a judgment declaring section 7 unconstitutional does
not qualify as a request for an interpretation of law under section 4104.
2.
Powers and Duties
[18]
Alternatively, the Governor may obtain review of an issue under section 4104 if his request affects his
powers and duties as Governor and the operation of the Executive Branch. See 7 GCA § 4104. Here, the
Governor is challenging the constitutionality of section 7 of Public Law 26-35 in its entirety. The scope of section includes "all government of Guam agencies including the Legislative, Executive and Judicial Branches and all
autonomous and semi-autonomous agencies which are authorized Certifying Officers and Accountable Officers in
General." Petitioner's Exhibit A, vol. 1, p. 44 (Public Law 26-35). The question that emerges from the Governor's
request is whether the Governor has standing to present to this court questions involving other branches of
government or questions on behalf of subordinate agencies within his own branch.
[19]
Section 4104 explicitly requires that the request from the Governor affect his powers and duties as
Governor and his operation of the Executive branch. See 1 GCA § 4104; see also Gutierrez, 1996 WL 870740, at
* 1 (analogizing to the Massachusetts requirement that issues presented "relate to a presently existing
governmental duty borne by the branch of the government that requests the opinion."). Other courts authorized to
issue advisory opinions uniformly impose a similar requirement, requiring that the question posed directly relate to
the duties of the requesting authority presently awaiting performance, and that the action of the requesting
authority depend on the advice rendered by the court. See Opinion of the Justices, 105 A.2d at 456 (finding that a
"solemn occasion" does not exist unless the body making the inquiry has occasion to consider and act upon the
question submitted in its exercise of powers); see also Opinion of the Justices, 238 So. 2d 326, 328 (Ala. 1970)
(holding that the advisory provision does not authorize Justices to give an opinion where no action of the
requesting party is dependent on it); Advisory Opinion (Chief Justice), 507 A.2d at 1319 (requiring that the
question posed for an advisory opinion have some relationship to the official duties of the requesting branch and
bear upon a present constitutional duty awaiting performance).
[20]
The significance of this requirement is that it precludes the Governor from requesting a declaratory
judgment on a question that only concerns another branch of the government or that solely impacts subordinate
executive officers and agencies. See 7 GCA § 4104 cmt. (noting that one branch may not request opinions as to
the operation of another branch where that operation does not impinge on the requesting branch's operations);
see also Opinion of the Justices, 105 A.2d at 456-57 (stating that the Governor does not have authority to seek an
advisory opinions solely on behalf of "subordinate executive officers, agencies, boards, or instrumentalities of the
state . . . ."); Opinion to the Governor, 284 A.2d at 297 (finding that city officials have no standing under the
advisory opinion clause to seek an opinion of the court and cannot circumvent that limitation by seeking an
opinion through the Governor). Moreover, the Governor is precluded from obtaining review of questions under
section 4104 if those questions involve the operation of another branch of government and that operation does
not impinge on the Governor's powers and duties as set forth in the Organic Act.
[21]
In the matter before us, the scope of section 7 is limited on its face to government agencies. Thus, the
Governor's powers and duties, as enumerated in the Organic Act, are not affected nor dependent on the judgment
of this court. See 48 U.S.C. 1422 (1987) (vesting in the Governor general supervisory powers over executive
branch agencies and instrumentalities and the responsibility for the faithful execution of laws); see also Opinion of
the Justices, 105 A.2d at 456-57 (finding that the power of the governor as "supreme executive" or his duty to
faithfully execute the laws does not make questions as to the decisions and actions of subordinate agencies
questions to be acted upon by the governor). In short, section 7 is too narrow for the Governor to claim standing
to challenge the section under 7 GCA § 4104. The Governor's challenge to section 7 simply does not amount to a
question that affects his powers and duties and the operation of the executive branch.
[22]
Accordingly, the Governor's challenge to the constitutionality of section 7 is not a matter appropriate for
section 4104 review. The Governor is neither asking this court for an interpretation of a law nor does his request
affect his powers and duties as Governor and his operation of the executive branch. Therefore, we decline to
address the merits of the Governor's challenge to section 7 as the issue presented is not within this court's
jurisdiction under section 4104.
C.
Separation of Powers
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Jurisdiction
[23]
The Governor raises four separation of powers challenges to the Budget Bill, each of which allege that the
Legislature has either reserved for itself powers specifically given to the Governor in the Organic Act or interfered
with the Governor's abiiity to perform his constitutional functions. A preliminary issue is whether the issues raised
by the Governor qualify for review under section 4104. As stated previously, this court's original jurisdiction under
section 4104 may only be invoked if the three requirements of section 4104 are met.
[24]
One requirement under section 4104 concerns the subject matter before the court. In the instant case, the
question is whether the chailenges asserted by the Governor are the type of challenges that are cognizable under
section 4104. We find that they are, as questions that "affect[j the powers and duties of the Governor and the
operation of the Executive Branch . . . . " 7 GCA § 4104. The Governor alleges that provisions of the Budget Bill
violate the separation of powers doctrine. This issue is undoubtedly the type of matter that can be addressed in a
request for declaratory judgment under section 4104. The comment to 7 GCA§ 4104 provides:
[Tjhe language [of section 4104] permits the Governor to request opinions as the operation of the
Executive Branch, including questions involving separation of powers, and the Legislature to request
opinions on the operation of that Branch, but does not permit one Branch to request opinions as to
the operation of the other where that operation does not impinge on the requesting branch's
operations. The purpose of this limitation is to avoid one branch trying to regulate the other through
the courts.
7 GCA §4104 cmt.
[25]
As recognized in the comment, section 4104 contains limiting language, and the court is only permitted to
address questions that involve allegations that one branch's actions "impinge" on the other branch's operations.
Because the Governor alleges that provisions of the Budget Bill impinge upon the Governor's powers of
appointment, removal, and general management of executive branch, the separation of powers issues fall within
the purview of section 4104. Cf. Opinion of the Justices, 266 A.2d 823, 825 (N.H. 1970) (determining that the
Governor's request for an opinion on whether the legislature has usurped executive functions was a proper
subject for an advisory opinion in that "[tjhe questions concern the executive duties of the Governor. .. and . . .
an opinion will assist in the performance thereof); In re Opinion of the Justices, 532 A.2d 195, 196 (N.H. 1987)
(giving an advisory opinion on whether provisions of the appropriations bill, which require prior legislative approval
of executive contracts as a condition to appropriation, constitute an unconstitutional delegation of executive
powers to the legislative branch).
[26]
A second jurisdictional requirement under section 4104 is that the matter before the court be one of great
public interest. 7 GCA § 4104. "[Pjublic interest. . . signifies an importance of the issue to the body politic, the
community, in the sense that the operations of the government may be substantiaily affected one way or the other
by the issue's resolution." Gutierrez, 1996 WL 870740, at * 1. In /r? re Request of Governor Gutierrez, this court
analogized the section 4104 "great public interest" requirement to the requirement in the Massachusetts advisory
opinion law that the advisory opinions be limited to "important questions of law, and upon solemn occasion." Id.
(citations omitted). Massachusetts courts have construed this requirement to mean that "the issue presented must
be significant in substance and relate to a presently existing governmental duty borne by the branch of
government that requests the opinion." Id.
[27]
In In re Request of Governor Gutierrez, the Governor requested that the court render a declaratory
judgment regarding the constitutionality of a law which established an elected board of education. Id. The
Governor argued that the law usurped the authority of the Governor over education because it would vest the
management of the Department of Education in the hands of an elected board. Id. The court determined that the
issue presented, that is, the organicity of the elected school board law, was a matter of great public interest
because it was "of consequence in terms of governmental functions and resources." Id. at * 2. This conclusion
was based on the court's finding that Department of Education was one of the largest departments in the
government and its mission directly impacted nearly all of the families of Guam. Id.
[28]
In the instant case, the separation of powers issues that the Governor presents involve allegations that
the Legislature has either exceeded its power to appropriate and has usurped the Governor's power to administer
appropriated funds or impermissibly interfered with the operation of the executive branch. The executive branch of
the government employs thousands of employees who are assigned wide-ranging tasks for the ultimate purpose
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of executing the laws of Guam. Similar to the challenge in In re Request of Governor, the instant challenges to the
organicity and constitutionality of provisions of the Budget Bill, as they relate to the Governor's ability to manage
the executive branch, are matters of "great public importance" as they are "of consequence in terms of
governmental function and resources."
Furthermore, the issues relate to a "presently existing governmental
duty borne by the branch of Government requesting the opinion." Id. at * 1. Specifically, the Governor has
standing to assert the issues presented because they directly relate to his authority to administer appropriated
funds for the effective running of the executive branch. Id. at * 2.
[29]
The final jurisdictional requirement under section 4104 is that the "normal process of law would cause
undue delay." 7 GCA § 4104. An analysis of this requirement requires the court to "estimate as a practical matter,
the relative difference in speed for an issue depending on whether it travels the 'normal processes of law' route, or
that provided by . . . [section] 4104." Gutierrez, 1996 WL 870740, at * 2. Specifically, the anticipated delay through
the normal processes of law must be "excessive or inappropriate." Id. We find that the undue delay requirement is
met with regard to the separation of powers issues presently before us. Because the budget for the government of
Guam Is enacted annually, issues regarding the constitutionality of a particular aspect of a budget bill uniquely
require speedy resolution; therefore, it would be inappropriate for such issues to be resolved through the
protracted litigation process. See id. ("7 GCA § 4104 was intended to provide a fast track for the initiation of cases
before the Supreme Court of Guam so that rulings could be obtained on important issues of law without time
consuming litigation in the inferior court.").
[30]
In accordance with the foregoing, we find that all three jurisdictional requirements under section 4104 are
met with regard to the separation of powers issues raised by the Governor. Therefore, we may properly reach the
merits of each issue.
2.
Separation of Powers Doctrine
[31]
As previously discussed, the Governor presents four separation of powers challenges to the Budget Bill:
(1) that Appendix "C" of P.L. 26-35 and Amendments thereto violate the doctrine of separation of powers in that
the legislature has attempted to set the staffing pattern of the executive branch; (2) that section 11 of Bill 205,
which dictates the terms of a lease of office space for Family Division of the Department of Law, violates the
separation of powers doctrine; (3) that the staffing pattern reporting requirements of P.L. 26-35, chapter IV,
section 3(a), and holiday pay reporting requirements of P.L. 26-47, section 2(d), violate the separation of powers
doctrine; and (4) that P.L. 26-47, section 7(b), which sets a specific date for filling the positions of Chief
Procurement Officer and Controller, violates the separation of powers doctrine.
[32]
Each issue enumerated above requires a separate analysis, but turns on the basic principle that, under
the Organic Act, the government of Guam is comprised of three separate but co-equal branches of government.
See 48 U.S.C. § 1421a (1992) ("The government of Guam shall consist of three branches, executive, legislative
and judicial. . . ."). Thus, implicit in the language of the Organic Act is the traditional concept of separation of
powers. See Panaelinan. 2000 Guam 11 at H 31; see also Hamlet v. Charfauros, 1999 Guam 18, i[ 9 ("By its very
language, therefore, the Organic Act requires application of the constitutional doctrine of separation of powers to
government of Guam functions.") (citation omitted).
[33] The separation of powers doctrine exists to "prevent[ ] the abuses that can flow from centralization of
power." Mo. Coalition for Env't v. Joint Comm, on Admin. Rules, 948 S.W.2d 125, 132 (Mo. 1997) (en banc)
(citation omitted); see also Book v. State Office Bldg. Comm’n, 149 N.E.2d 273, 293 (Ind. 1958) (recognizing that
the purpose of separating the powers of each branch is "to preclude a commingling of these essentially different
powers of the government in the same hands") (citation omitted). The concentration of the separately delineated
powers in the hands of one branch "may justly be pronounced the very definition of tyranny." Beckert v. Warren,
439 A.2d 638, 642 (Sup. Ct. Pa. 1981).
[34]
In People v. Perez. 1999 Guam 2, this court adopted the U.S. Supreme Court's standard for determining
whether a separation of powers violation exists. The court provided:
In determining whether the Act disrupts the proper balance between the coordinate branches, the
proper inquiry focuses on the extent to which it prevents the Executive Branch from accomplishing
its constitutionally assigned functions. Only where the potential for disruption is present must we
then determine whether the impact is justified by an overriding need to promote objectives within the
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constitutional authority of Congress.
Perez, 1999 Guam 2 at U 17 (citations omitted). Based on this standard, the court established a two-part test: "(1)
whether the statutory provision prevents the accomplishment of constitutional functions and (2) if so, whether the
disruptive impact is justified by any overriding constitutional need." Id.
[35]
We recognize that, under the separation of powers doctrine, one branch of government is prohibited from
either delegating its enumerated powers to another branch of the government or aggrandizing its powers by
reserving for itself the powers given to another branch. See Santos v. Calvo, Civ. No. 80-0223A, 1982 WL 30790,
at * 3 (D. Guam App. Div. Aug. 11, 1982); Territorial Prosecutor v. Superior Court, Civ. No. 82-0215, 1983 WL
30224, at * 5 (D, Guam App. Div. May 26, 1983); Communications Workers of Am. v. Florio, 617 A.2d 223, (N.J. 1992).-® At least one court has noted that "the taking of power is more prone to abuse and therefore
warrants an especially careful scrutiny." Communication Workers, 617 A.2d at 232 (emphasis added). Even
absent a finding that one branch has usurped a power exclusively reserved for another branch, a separation of
powers violation may be found if "one branch unduly interferes with another branch so that the other branch
cannot effectively exercise its constitutionally assigned powers." Armadillo Bail Bonds v. State, 802 S.W.2d 237,
239 (Tex. Crim. App. 1990) (citations omitted); see Perez. 1999 Guam 2 at H 17.
[36]
As articulated in Territorial Prosecutor v. Superior Court, "the legislature may not enact a law encroaching
upon the Governor's authority and powers which are mandated by the Organic Act." Territorial Prosecutor, WL 30224, at * 5, 6 (invalidating section 7100(b) of the Territorial Prosecutor's Act because it "impermissibly
encroaches upon the Governor's removal powers . . . ."). This limitation on the Legislature's power is specifically
set forth in the Organic Act, which prohibits the Legislature from enacting laws that are "inconsistent with the
provisions of this chapter and the laws of the United States applicable to Guam." 48 U.S.C. § 1423a (1992)
(emphasis added). The "chapter" referred to is the Organic Act; therefore, the Legislature is prohibited from
enacting laws that are inconsistent with the Organic Act, including the Organic Act's grant of power to the other
branches of the government. See id. \ see also Territorial Prosecutor, 1983 WL 30224, at * 5 (discussing a Ninth
Circuit case that held that section 1423a limits the legislative power to enact legislation to subjects not
inconsistent with the Organic Act). The problems inherent in allowing the Legislature to enact laws which
encroach upon the executive's or Governor's powers are evident:
I f . . . [the courts] were to permit the legislature to do so, not only would it render the concept of the
separation of powers meaningless and be inconsistent with mandate of the Organic Act, but it could
possibly result in the Governor being divested of his executive authority and power at the whim of
the legislature.
Territorial Prosecutor, 1983 WL 30224, at * 5.
[37]
Thus, in determining whether the challenged provisions of the Budget Bill violate the separation of powers
doctrine, it is necessary to determine the nature of each branch's respective powers as set forth in the Organic
Act.
[38]
Under the Organic Act, the legislative power is vested in the "Legislature of Guam." 48 U.S.C. § 1423a.
As stated earlier, the Legislature's power to legislate extends "to all rightful subjects of legislation not inconsistent
with the provisions of this chapter and the laws of the United States applicable to Guam." Furthermore, the power
to appropriate money is expressly reserved to the Legislature. 48 U.S.C. § 1423j(a) (1992) ("Appropriations,
except as otherwise provided in this chapter, and except such appropriations as shall be made from time to time
by the Congress of the United States, shall be made by the legislature."). Thus, pursuant to the Organic Act, "the
Legislature has plenary or absolute power over appropriations . . . ." Santos, 1982 WL 30790, at * 3. The
legislative power of appropriation is defined as "the authority to set apart from the public revenue a certain sum of
money fora specified object. . . ." Opinion of the Justices to the Senate, 376 N.E.2d 1217, 1220-21 (Mass. 1978)
(citations and internal quotations omitted). The power of appropriation encompasses the "principle . .. that it is for
the Legislature, and not the executive branch, to determine finally which social objectives or programs are worthy
of pursuit." Id. at 1221.
[39]
The Organic Act provides that the executive power of Guam is vested in the "Governor of Guam." U.S.C. § 1422 (1992). The Governor's powers and duties, as specifically enumerated in the Organic Act include:
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[The] general supervision and control of all the departments, bureaus, agencies, and other
instrumentalities of the executive branch of the government of Guam.. . . He shall appoint, and may
remove, all officers and employees of the executive branch of the government of Guam, except as
otherwise provided in this or any other Act of Congress, or under the laws of Guam, and shall
commission all officers he may be authorized to appoint. He shall be responsible for the faithful
execution of the laws of Guam and the laws of the United States applicable in Guam.
Id. Thus, under the Organic Act, it is the duty of the Governor to enforce the laws as enacted by the Legislature
and Congress, and, in pursuit of the fulfillment of that duty, the Governor has the power to appoint executive
employees and supervise the departments of the executive branch. Id.] see also Santos, 1982 WL 30790, at * 3.
The Governor's duties to supervise and control the executive branch for the purpose of the proper execution of
the laws includes the power of expenditure. See Anderson v. Lamm, 579 P.2d 620, 623 (Colo. 1978) (en banc).
"In order to fulfil this duty to faithfully execute the laws, the executive has the authority to administer the funds
appropriated by the legislature for programs enacted by the legislature." Id. "[T]he activity of spending is
essentially an executive task," Opinion of the Justices to the Senate, 376 N.E.2d at 1222, and "[tjhe nature o f . . .
[the executive] office requires that the Governor have authority to use discretion in applying the energies of the
executive branch and the resources of the . . . [state], as such resources are made available by the Legislature, to
achieve the purposes or objectives of the laws." Id. at 1221.
[40]
Having identified the respective powers of the Governor and Legislature as set forth in the Organic Act,
we nevertheless acknowledge that the powers of each respective branch inevitably overlap to a certain extent.
See Opinion of Justices, 266 A.2d at 826; see also In re Opinion of the Justices, 341 N.E.2d 254, 256 (Mass.
1976) ("Flexibility in the allocation of functions may sometimes be permissible, but only if it creates no interference
by one department with the power of another."). Courts have found it difficult to characterize the exact relationship
of each branch's powers and have resorted to doing so on a case-by-case basis. See Anderson, 579 P.2d at 623;
see also Opinion of Justices, 266 A.2d at 825-26; Commonwealth v. Sutley, 378 A.2d 780, 783 (Pa. 1977) ("[T]
here may be some areas where the dividing lines between the respective responsibilities of the three branches
may be difficult to define."). When a statute is challenged as violating the separation of powers doctrine, "the court
must search for a usurpation by one department of the powers of another department. . . [from] the specific facts
and circumstances presented." State ex rel. Schneider v. Bennet, 547 P.2d 786, 792 (Kan. 1976). Therefore,
each issue the Governor raises in the instant case requires a separate analysis with reference to the nature of the
powers of each respective branch as described above.
[41]
An analysis of each issue raised by the Governor must begin with the general rule that legislative
enactments are presumed to be constitutional. Bd. of Regents of Higher Educ. v. Judge, 543 P.2d 1323, (Mont. 1975); Communications Workers, 617 A.2d at 232; Mo. Coalition, 948 S.W.2d at 132; State ex rel.
Shepherd v. Neb. Equal 0pp. Comm'n, 557 N.W.2d 684, 688 (Neb. 1997). Courts should try to harmonize the
legislature's powers with the powers given to the executive. See Bd. of Regents, 543 P.2d at 1330. Moreover, "he
who alleges the unconstitutionality of an act bears the burden of proof. . . . [and] the validity of acts is to be upheld
if at all possible with all doubt resolved in favor of legality and unconstitutionality will be decreed only when no
other reasonable alternative presents itself. . . ." State ex rel. Assistant Dist. Attorneys Assoc, v. Theriot, 242 So.
2d 49, 51 (La. App. 1971) (citations omitted); see also Shepherd, 557 N.W.2d at 688. However, it is the court's
duty to interpret the laws. Therefore, the court must declare a legislative enactment unconstitutional if an analysis
of the constitutional claim compels such a result. Mo. Coalition, 948 S.W.2d at 132; Common Cause of Penn. v.
Commonwealth, 668 A.2d 190, 202-03 (Pa. 1995)-® ; Alexander v. State ex rel. Main, 441 So. 2d 1329, (Miss. 1983), declined to be followed on other grounds by Dye v. State ex rel. Hale, 507 So. 2d 332 (Miss. 1987).
"[T]he fact that a given law or procedure is efficient, convenient, and useful in facilitating functions of government,
standing alone, will not save it if it is contrary to the Constitution." I.N.S. v. Chadha, 462 U.S. 919, 944, 103 S. Ct.
2764, 2781 (1983).
a.
Whether Appendix "C" of P.L. 26-35 and amendments thereto
violate the doctrine of separation of powers in that the legislature
has attempted to set the staffing pattern of the executive branch.
[42]
Chapter V, section 1(a) of P.L. 26-35 (original law) and Bill 405 provides: "Personnel Services (Regular
Salaries/Other Pay and Benefits) appropriations shall be expended only tor positions contained in APPENDIX C,
corresponding with each Division/Section/Program breakdown contained in APPENDIX B." Petitioner's Brief,
Exhibit A, vol. 1, p. 106 (bold and italics in original). Appendix C lists each government position and the
corresponding salary and benefits for each position. Id., Exhibit E, pp. 28-99.
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[43]
The Governor argues that Appendix C of both P.L. 26-35 (original law) and Bill 405 (fourth amendment)
violate the separation of powers doctrine because it infringes on the Governor's duties to "supervise the
government agencies, including the responsibility to manage the manpower needs of the various departments."
Petitioner's Brief, p. 9. The Governor maintains that "staffing patterns are management tools . . . [and] the
Legislature has attempted to manage the personnel of the Executive Branch by enacting the staffing patterns into
law . . . [thereby]. . . unduly disrupt[ing] and interfer[ing] with the Governor's duty to supervise and control the
operation of the Executive Branch." Id. at 10. "Through Appendix C, the Legislature has exceeded its Organic Act
authority and usurped the authority of the Governor. The problem with Appendix C is the separate listing and
funding of each individual position in every agency. The position listings in Appendix C and the specific
appropriations for each position violate the doctrine of separation of powers." Id. at 16 (emphasis added). We
treat this argument as the gist of the Governor's first challenge to the Budget Bill, and therefore analyze whether
the "position listings" and "specific appropriations" have the effect of usurping the executive's powers derived from
the Organic Act.
[44]
The Legislature's plenary power of appropriation includes the power to impose "conditions upon the
expenditure of appropriated funds." Santos, 1982 WL 30790, at * 3; Schneider, 547 P.2d at 799 ("[T]he
appropriation of money and the setting of limitations on expenditures by state executive agencies constitutes an
exercise of legislative power."). One such condition to an appropriation is the designation of positions within the
government. Communications Workers, 617 A.2d at 235 (The legislature may "appropriate and dictate, if it
desires, the services and positions designated for such appropriation.") (citation omitted). The legislature may
also designate salaries for various positions. Opinion of the Justices, 266 A.2d at 826 ("[l]n the absence of
express legislative authority the Governor and [executive committee]. . . may not fix salaries even of personnel
which the Governor is empowered to appoint."); State ex ret. Meyer v. State Bd. of Equalization & Assessment,
176 N.W.2d 920, 926 (Neb. 1970) ("It is within the power of the Legislature to fix the amount it will appropriate for
personal services in any state department or agency.").
[45]
However, the Legislature may not set limitations or conditions which "purport to reserve to the legislature
powers of close supervision that are essentially executive in character." See Anderson, 579 P.2d at 624 (Colo.
1978). "Staffing decision are at the core of the Governor's day-to-day administration of government."
Communications Workers, 617 A.2d at 234. Accordingly, the legislature may not set conditions to an
appropriation which impinge on the executive's power to "allocate staff and resources" for the proper fulfilment of
its duty to execute the laws. See Anderson, 579 P.2d at 623-24.
[46]
Appendix C of the Budget Bill has two components: first, it lists all positions in the executive branch, and
second, it sets the salaries for each respective position. While the Legislature may set salaries and positions to a
certain extent, the manner in which it has done so in Appendix C can only be viewed as an impermissible
interference with the Governor's ultimate authority to "make[ ] staffing and resource allocation decisions." Id.
While the Legislature may limit the amounts of the total appropriation that can be expended on salaries of a given
agency, as was done in Appendix B, by dictating the staffing structure of each agency as done in Appendix C, the
Legislature crossed the line between attaching a proper and improper condition to a general appropriation.
Several cases support this conclusion.
[47]
For example, in In re Opinion of the Justices to the Governor, 341 N.E.2d 254 (Mass. 1976), the court was
asked to determine whether the legislature's "powers to approve certain schedules and salary expenditures .. .
constitute exercise of executive powers; and, if so, then is it constitutionally permissible for the . . . [legislature] to
grant to . . . [itself] such executive powers." In re Opinion of the Justices, 341 N.E.2d at 256. The bill at issue
made advance approval by a legislative committee a condition to the availability of federal funds received by the
state for "the payment of the salary for any position . . . ," Id. at 257 n.3. Furthermore, the bill provided that such
money could not be appropriated unless they were "based upon a schedule of positions and salary rates
approved by said committees . . . ." Id. The court held that the powers given the legislature in this provision of the
bill was more properly characterized as the executive power of expenditure, and not the legislative power of
appropriation. Id. at 257 (referring to the analysis of the previously discussed issue in coming to its finding).
Therefore, the court opined that it was not constitutionally permissible for the legislature to reserve this power to
approve the salaries and schedules for itself. Id.
[48]
In Anderson v. Lamm, 579 P.2d 620 (Colo. 1978), the court was confronted with the issue of the
constitutionality of provisions of the appropriations bill which allocated "funds based on the number of full-time
employees ("FTEs") which the legislature believed each county should have," and made "certain specifications as
to the number of full-time employees that can be assigned to specific job categories." Anderson, 579 P.2d at 626.
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The Anderson court determined that the executive's power to administer appropriated funds includes "the making
of specific staffing and resource allocation decisions." Id. at 623-24; see also Communications Workers, 617 A.2d
at 232, The Anderson court further ruled that "the legislature may not attach conditions to a general appropriation
bill which purport to reserve to the legislature powers of close supervision that are essentially executive in
character." Anderson, 579 P.2d at 624. Based on these principles, the court held that the conditions regarding the
number of full time employees impermissibly "interfere with the executive authority to allocate staff and resources"
and were therefore a violation of the separation of powers doctrine. Id. at 626.
[49]
An analogous case is State ex rel. Schneider v. Bennet, 547 P.2d 786 (Kan. 1976). In Schneider, the
plaintiff challenged the constitutional validity of the law establishing the powers and duties of the state finance
council ("SFC"). See Schneider, 547 P.2d at 790. The SFC was composed of the governor and eight members of
the legislature. Id. at 794. In accordance with statute, the SFC had various powers, including the powers to: (1)
"fix or approve the compensation paid to state officers and employees," and (2) "approv[e] of assignment of
positions in the civil service to classes . .. assignment of classes to salary ranges, approv[e] of the pay plan
containing a schedule of salary and wage ranges and steps, approv[e] of terms upon which state agencies may
furnish housing, food service and other employee maintenance to state officers and employees in the civil service,
and . . . determin[e] . . . the cost and value of such benefits . . . ." Id. at 797. The court held that these powers
were "essentially executive or administrative in nature" in that they "concern the day-to-day operations of the
department of administration and its various divisions." Id. Accordingly, the court invalidated the statute granting
these powers to the SFC, holding:
The vesting of such powers in the state finance council in our judgment clearly grants to a
legislatively oriented body control over the operation of an executive agency and constitutes a
usurpation of executive power by the legislative department.
Id. The court's holding was pronounced in light of the court's agreement that "the appropriation of money and the
setting of limitations on expenditures by state executive agencies constitutes an exercise of legislative power." Id.
at 799.
[50]
In the instant case, the Legislature's appropriations to "Division/Section/Program" according to Appendix
B are not questioned. The Legislature erred, however, when it then specified that those appropriations be
expended only for positions contained in Appendix C. This prevented the Governor from varying his staffing
pattern and therefore prevented him from accomplishing his constitutional duty to faithfully execute the laws. See
Perez. 1999 Guam 2 at H 17. Furthermore, the Legislature has not articulated any "overriding constitutional need"
to usurp the Governor's powers to make required resource allocations within the executive branch. Id.
Accordingly, Appendix C of the Budget Bill violates the separation of powers doctrine and is therefore inorganic
and unconstitutional.
b.
Whether section 11 of Bill 205, which dictates the terms of a lease
of office space for Family Division of the Department of Law,
violates the separation of powers doctrine.
[51]
Section 11 (c) of Bill 205 dictates that the Attorney General (hereinafter "AG") shall, by December 31,
2001, terminate the current lease of the office space being rented out for the Department of Law's Family Division.
Petitioner's Brief, Exhibit E, pp. 17-18 (Oct. 24, 2001). The section further dictates that a new lease shall be
procured and sets terms of the new lease, including specifications for the leased premises (e.g., square footage).
Id. Finally, when deciding upon on a bid, the AG is required to request a specific appropriation to fund the new
lease for the remainder of the fiscal year 2002. Id. The Governor argues that section 11(c) of the Budget Bill
encroaches on the executive's authority in that it improperly gives the Legislature the authority to manage the
details of and approve the lease entered into by the AG for the Child Support Division. Id., pp. 17-18. We agree.
[52]
The Governor relies on cases which hold that the legislature may not constitutionally require prior
approval of a lease once an appropriation is made. See Alexander, 441 So. 2d at 1342; see also In re Opinion of
the Justices, 532 A.2d at 197. Flowever, in the instant case, the Legislature did not make an appropriation of the
funds for the lease of office space. Section 11 (c) of the Budget Bill merely requires that the AG request funds
once the lease is procured. The Legislature may request information from the executive branch for the purpose of
facilitating how much money should be appropriated in the future. See Mo. Coalition, 948 S.W.2d at 134.
Therefore, requiring that the AG request funds after the lease is procured is not, as the Governor suggests,
tantamount to an attempt to require prior legislative approval of the lease. Rather, it is more properly viewed as an
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attempt by the Legislature to acquire information for the purpose of enabling the Legislature to make an
appropriation adequate to meet the AG's needs.
[53]
The provisions of Budget Bill that dictate terms of the lease are more problematic. In Chaffin v. Ark. Game
& Fish Comm'n, 757 S.W.2d 950 (Ark. 1988), the court was presented with a constitutional challenge to an
appropriations bill. Specifically, the challenged legislation prohibited the Fish and Game Commission from
entering into contracts for professional and consultant services which either extend more than 20 working days, or
exceed $5,000.00, without first seeking the advice of the legislature. Chaffin, 757 S.W.2d at 956. After receiving a
contract, a committee of the Legislative Council reviews the contract and stamps it favorable or unfavorable, id.
Although the stamp of approval or disapproval was not binding on the agency, the court found that "the 'advice'
offered by the [legislative] committee to an agency is tantamount to a legislative order on how to execute a
contract." Id. The court held the requirement that the agency submit its contracts for legislative advice to be in
violation of the separation of powers doctrine, and therefore unconstitutional. Id.
[54]
The instant case is analogous to Chaffin, and supports a finding of a more egregious violation of the
separation of powers doctrine. In the instant case, the Legislature has not merely reserved for itself the power to
give "advice" on the specifics of the contract; rather, the Legislature has dictated the exact terms of the contract.
As Chaffin instructs, it is the executive's function to determine how to execute a contract. See id. at 956-57. The
execution of a contract necessarily includes determining the terms of the contract. By determining the terms of the
lease, the Legislature has engaged in a clear executive function.
[55]
Section 11 (c) of Bill 405 would be constitutionally proper if the "legislative action . . . [was] necessary to
further a statutory scheme requiring cooperation between the two branches, and such action offers no substantial
potential to interfere with exclusive executive functions or alter the statute's purposes . . . ." Communications
Workers, 617 A.2d at 232-33. In the instant case, section 11 (c) provides that the current lease shall terminate for
"lack of funds." Id., Exhibit E, p. 17. The section further provides the maximum amount that can be charged per
square foot leased and the maximum amount of square footage that may be leased. Id., Exhibit E, p. 18. The
section clearly attempts to place a cap on the total amount of money that can be spent by the AG in leasing office
space. Thus, the purpose of section 11 (c) is to further fiscal policy.-® This purpose can be achieved by a direct
appropriation; therefore there is no need, in an effort to effectuate the purpose of the statute, for the Legislature to
dictate specifications for the rental space. Even assuming that the lease specifications were included in the
legislation to serve some non-fiscal purpose that necessitated cooperation with the executive branch, the
Legislature's attempt to specify the terms of the lease substantially encroaches on the executive's power to
determine the terms of its contracts. Accordingly, we hold that Section 11(c) violates the separation of powers
doctrine, and is thus inorganic and unconstitutional. See Communications Workers, 617 A.2d at 232-33; see also
Chaffin, 757 S.W.2d at 956-97.
c.
Whether the staffing pattern reporting requirements of P.L. 26-35,
chapter l\/, section 3(a), and holiday pay reporting requirements of
P.L. 26-47, section 2(d), violate the separation of powers doctrine
[56] Chapter IV, section 3(a) of P.L. 26-35 requires the Governor to submit to the Legislature a monthly report
stating the "current staffing pattern . . . including the name, position, salary and benefits of each employee."
Petitioner's Brief, Exhibit A, vol. 1, pp. 37-38 (Oct. 24, 2001 j. Section 2(d) of P.L. 26-47 requires that certain
departments of the executive branch submit a "labor cost distribution report. . . within five (5) days of each
disbursement detailing the payment o f' Holiday Pay" for each person receiving additional compensation." Id.,
Exhibit C, p. 3.
[57] The Governor argues that the requested reports "relate to supervision and management of the agencies . .
. [and do not] serve a legislative function." Petitioner's Brief, p. 22. We disagree. Compiling reports on the salaries
and compensation of employees is not solely within the executive powers as set forth in the Organic Act. The
legislature may request information which clearly aids in the formulation of legislation. See Opinion of the
Justices, 102 N.E.2d 79, 85 (Mass. 1951) ("If the legislative department were to be shut off in the manner
proposed from access to the papers and records of executive and administrative departments, boards, and
commissions, it could not properly perform its legislative functions."). The information requested in the instant
case, although relating to the expenditure of funds, is of a type that could aid in the formulation of future
appropriations legislation and therefore can be seen as related to a legitimate legislative function.
[58]
Moreover, "[t]he Legislature, in the exercise of its functions, may pass laws calling for action by the
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executive department. . . Opinion of the Justices, 376 N.E.2d 1217, 1225 (Mass. 1978) (opining that the
statute's requirement that the Governor submit to the Legislature revenue raising proposals when a deficiency
occurs was appropriate legislative action and consistent with the overall constitutional scheme for a balanced
budget). The reporting requirements at issue are only invalid under the separation of powers doctrine if they
prevent the Governor from accomplishing his constitutional functions. Perez. 1999 Guam 2, H 17. Here, while It
may be true, as alleged by the Governor, that the requested information relates to the supervision and
management of executive agencies, the Governor simply does not demonstrate that the reporting requirements
prevent him from fulfilling his constitutional duties in operating the executive branch. See Legisiative Research
Comm'n ex rel. Prather v. Brown, 664 S.W.2d 907, 926 (Ky. 1984). The agencies are only required to report the
salary and benefits information once a month and the holiday pay disbursements after each disbursement, which
logically only follows each holiday. Moreover, the information requested is undoubtedly In the possession of the
agencies. The Governor fails to show how reporting that information at the prescribed times imposes a "a
substantial interference or undue burden on department operations." In re interest of J.A., 406 N.W.2d 372, (Wis. 1987).-®
[59] Legislative enactments are presumed to be constitutional. See Bd. of Regents, 543 P.2d at 1330. Absent a
clear showing of unconstitutionality, i.e., a showing that the statute prevents the exercise of the executive's
constitutional functions, we are bound to uphold the challenged provision. We find that the Governor has failed to
meet his burden, and therefore hold that the provisions of the Budget Bill which establish reporting requirements
do not violate the separation of powers doctrine.
d.
Whether P.L. 26-47, section 7(b), which sets a specific date for
filling the positions of Chief Procurement Officer and Controller,
violates the separation of powers doctrine.
[60] Section 7(b) of P.L. 26-47 provides that if the positions of Chief Procurement Officer and Department of
Administration ("DOA") Controller are not filled by January 1, 2002, the money appropriated for these positions
reverts to the General Fund. See Petitioner's Brief, Exhibit C, p. 9 (Oct. 24, 2001). The Governor argues that
section 7(b) violates the separation of powers doctrine because it is an attempt by the Legislature to manage the
hiring of employees.
[61] We first point out that the Governor does not challenge the Legislature's appropriation for the two positions
under Section 7(a); he only challenges the lapse provision contained in Section 7(b) on the ground that it, in
effect, imposes a deadline to fill the positions. We disagree with the Governor's contention that through the
lapsing provision, the Legislature has supervised and controlled the Governor's hiring decisions. To wit, the
condition does not hamper the decisions which are reserved exclusively and specifically for the Governor, such as
which individuals should be hired to fill the particular positions; but rather, sets a time limit on the availability of
funds. We do agree, though, that the lapsing provision does, to some degree, affecf the Governor's hiring
decisions in that the Legislature is limiting the Governor's ability to fill positions when he deems appropriate.
[62] However, the executive's power to hire is inextricably tied to the legislature's power to appropriate because
the executive's ability to hire is dependent upon whether the legislature appropriates the funds. See Flynn v. Dep't
of Admin., 576 N. W.2d 245, 257 (Wis. 1998). The legislature's power of appropriation includes the power to
impose a condition that funds lapse if not used. See Meyer, 176 N.W.2d at 926-27. The limitation to this power is
that the condition imposed must not create such an interference with another branch's functions so as to prevent
that other branch from fulfilling its constitutionally prescribed duties. See Flynn, 576 N.W.2d at 257-58; see also
Perez. 1999 Guam 2 at T] 17 (requiring a showing that a statute prevents the accomplishment of a constitutional
function in order for there to be a separation of powers violation).
[63] In Flynn, a continuing appropriation was made by the legislature to the judiciary to fund a program that
involved the automation of court's information system. Id. at 248. Any unused funds were carried over into the
following year and combined with any additional appropriation. Id. at 249. The legislature subsequently passed a
statute that lapsed a portion of the judiciary's excess appropriation back into the general fund. Id. The court
upheld the statute, finding that "the legislature may lapse . . . funds to the general purpose revenue fund only if
such lapse does not unduly burden or substantially interfere with the judiciary." Id. at 257. The burden rests with
the challenger to prove that the lapsing creates an undue burden or substantial interference in the functioning of
another branch. Id. at 257-58.
[64]
Thus, the issue here is whether the lapsing of funds for the two positions unduly burdens or substantially
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interferes with the operation of the executive branch. See Id. In the instant case, section 7(b) went into effect in
October 2001 and required the positions to be filled by January 2002. We agree with the Governor's assertion that
special expertise is necessary for these positions. The Chief Procurement Officer "must have the qualifications in
the specialized area of public procurement." Title 5 GCA § 5111 cmt. (1996); see Title 5 GCA § 5110 (1996)
(creating the position of Chief Procurement Officer). Similarly, the position of controller within a government
agency requires special expertise in the area of finance and accounting. Therefore, we agree that three months is
an insufficient time period within which to fill positions which require such highly specialized knowledge.
Moreover, the positions at issue are vested with significant responsibilities in key areas of executive operations.
For example, the Chief Procurement Officer is statutorily charged with the duties to:
(i) procure or supervise the procurement of all supplies and services needed by the
Territory;
(ii) exercise general supervision and control over all inventories of supplies
belonging to the Territory; and
(iii) establish and maintain programs for the inspection, testing and acceptance of
supplies and services.
Title 5 GCA § 5113 (c)(1) (1996). The Chief Procurement Officer plays a central role with regard to government
procurement. See Title 5 GCA §§ 5001-5710 (1996) (delineating the Chief Procurement Officer's specific duties).
Similarly, the Controller occupies a top financial position within the Department of Administration, an agency
vested with wide-ranging duties in the executive branch, including employee relations, see Title 4 GCA § (1993), government procurement, see Title 5 GCA §§ 5001, 5110, 5113 (1996), records management, and data
processing, see 5 GCA § 20103 (1996). Therefore, both the Chief Procurement Officer and the DOA Controller
are essential positions in the overall functioning of the executive branch.
[65] "[T]he legislature . . . has clear constitutional authority to appropriate scarce resources." Flynn, N.W.2d at 257. However, because section 7(b) imposes an unreasonable time restriction in hiring individuals to fill
specialized positions integral to the executive department's functions, the condition placed an undue burden and
created a substantial interference in the operation of the executive branch. Accordingly, the section violates the
separation of powers doctrine and is therefore inorganic and unconstitutional.
VI.
[66]
In accordance with the foregoing discussion, we decline to address the merits of the Governor's challenge
to the constitutionality of chapter IV, section 7 of Public Law 26-35 on the ground that it does not fall within our
grant of jurisdiction under section 4104. Further, we find that the reporting requirements set forth in chapter IV,
section 3(a) of P.L. 26-35 and in section 2(d) of P.L. 26^7, do not violate the separation of powers doctrine and
are therefore constitutional. However, we find that the staffing pattern set forth in Appendix C of the Budget Bill
and the lease terms set forth in section 11 of Bill 205 amount to an improper usurpation by the Legislature of the
Governor's Organic Act powers, thereby violating the separation of powers doctrine. Furthermore, we find that
section 7(b) of P.L. 26-47, which sets a specific date for filling the positions of Chief Procurement Officer and
Controller, amounts to an improper legislative interference with executive functions. Therefore, these provisions of
the Budget Bill are inorganic and unconstitutional.
[67] In accordance with the severability clauses contained in chapter V, section 24, of P.L. 26-35; section 18 of
Bill 205; and section 10 of P.L. 26-47, the invalid provisions of the Budget Bill are hereby severed and the
remaining provisions continue to remain in effect. Turning specifically to severance of Appendix C, we note that
Legislature is still bound to make the appropriations as provided for in Appendix B, which is valid and remains in
effect.
RICHARD H. BENSON, CONCURRING AND DISSENTING:
[68]
I concur and join in the court's disposition of the Legislature's Motion to Dismiss, and all issues presented
by the Governor's request for declaratory judgment except one.
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[69]
I respectfully dissent from the court's conclusion that the provision is inorganic which sets a date by which
funds appropriated for the Chief Procurement Officer and the Controller will lapse if the positions are not filled.
[70] As the court correctly notes, the Governor had the burden of proof in his allegation that the provision was
inorganic and unconstitutional. The burden is a heavy one since "the validity of acts is to be upheld If at all
possible with all doubt resolved in favor of legality and unconstitutionality will be decreed only when no other
reasonable alternative presents itself. . . ." Theriot, 242 So. 2d at 51. The Governor seeks to meet that burden In
less than one page of his Opening Brief Without repeating his summary of the lapse provision or his legal
objection to it, he states.
Technical expertise is required for the positions of Chief Procurement Officer and Controller. It Is
unknown how long it might take to recruit and hire a Chief Procurement Officer and a Controller.
Regardless of how long it might take to fill these positions, it is not a legislative function to dictate a
deadline for hiring Executive Branch employees.
Petitioner's Brief p. 22. On its face, it is clear that the Governor has not carried his burden of demonstrating the
unconstitutionality of a provision that provides that the salary appropriation lapses If the positions are not filled
within three months of the Budget Bill becoming law. The Governor acknowledges that no one knows how long it
will take to fill the positions.
[71]
The Legislature did not address this issue at all in its brief, so only the Governor's words are before us.
[72] The court however finds that three months is an "unreasonable time restriction" that "placed an undue
burden and created a substantial interference in the operation of the executive branch." Majority Opinion T| 65.
Since it is not the court's place to make findings of fact, the court must be saying that as a matter of law three
months is p ^ se unreasonabie. This is surprising considering the only reference we have to the matter by either
party is the Governor's statement that the time required is unknown.
[73] All doubt should be resolved In favor of legality. The Chief Procurement Officer position has been in
Guam's statutes since 1982. Public Law 16-124 added Government Code § 6954 which created the General
Services Agency headed by the Chief Procurement Officer. Public Law 25-164, the Budget Bill for Fiscal Year
2001, included a lump sum appropriation for personnel services for the Department of Administration in which the
positions of Chief Procurement Officer and Controller belong. Perhaps they were not filled during that year and
the Legislature desired to have an end to carrying unfilled positions, even though the Chief Procurement Officer is
an element in the legislative scheme it enacted.
[74] The legislature's power of appropriation includes the power to impose a condition that funds lapse If not
used. See Meyer, 176 N.W.2d at 926-27. The limitation to this power is that the condition imposed must not
create such an interference with another branch's functions so as to prevent that other branch from fulfilling its
constitutionally prescribed duties. See Flynn, 576 N.W.2d at 257-58.
[75] The Governor fails to demonstrate such interference. He only says, "Thus, the Legislature is attempting to
manage the hiring of employees by giving a deadline to fill specific positions." Petitioner's Brief, p. 22.
^■Bill Number 205 was passed as Public Law 26-55 by signature of the Governor.
The Legislature's instant challenge to its power to enact section 4104 undermines the presumption that the legislature believed it was acting
specifically within its power both at the time of enactment and subsequent amendment. The legislature has previously brought cases before this court
under section 4104, and we note that the instant attempt to frustrate review on ultra vires grounds is at odds with positions it previously made before
this court. Compare In Re Request of the Twenty-Fourth Guam Legislature, CRQ97-001 (Memorandum of Points and Authorities in Support of Motion
to Withdraw, Sept. 12, 1997) (seeking to withdraw the request for declaratory judgment transmitted to this court on the ground that implicit in the
legislature's grant of jurisdiction in section 4104 was the ability of the legislature to withdraw the request), with IN RE REQUEST OF I MINA' BENTE
SING'KO NA LIHESLATURAN GUAMAN, 2001 Guam 3, H 1 (submitting to this court a request for a declaratory judgment pursuant to 7 GCA § 4104).
The grant of original jurisdiction to issue declaratory judgments to the highest court is not unique to Guam. See State ex ret. Conrad v. Managhan,
485 P.2d 948, 950 (Mont. 1971) (Supreme Court accepting original jurisdiction to issue a declaratory judgment "because of the urgency of the situation
and the need for speedy determination of the controversy"); see also Tuckerv. S.C. Dept, of Highways & Pub. Trans., 424 S.E.2d 468, 469 (S.C. 1992)
http://www.guamsupremecourt.eom/op2002Guam01.htm
7/29/2003
Page 91 In re Request o f Gov. Carl T.C. Gutierrez, P.L. 26-35 (Budget B ill)
Page 17 o f
(Supreme Court determining the constitutionaiity of a statute pursuant to its original jurisdiction).
Massachusetts courts have found this type of separation of povi/ers challenge to be an "important questions of iaw" and the issue has therefore
been accepted for consideration by the Massachusetts courts pursuant to their advisory opinion law. Cf. Opinion of the Justices to the Governor, N.E.2d 254 (Mass. 1976) (agreeing to render an advisory opinion on whether the iegislature's action was an improper usurpation of the executive's
power of expenditure),
"if, in the opinion of the people, the distribution or modification of the constitutional powers be in any particular wrong, let it be corrected by an
amendment in the way which the constitution designates. But let there be no change by usurpation', for, though this, in one instance, may be the
instrument of good, it is the customary weapon by which free governments are destroyed." Book, 149 N.E.2d at 295 (citing George Washington's
Farewell Address) (emphasis added).
"[Cjourts [a]re always loathe to put a construction on legisiation which shows it to be invalid . . . but, if constitutions are to command general
respect and obedience, the people must know that their courts will constantly endeavor to interpret them according to the commoniy accepted
understanding of the words used therein . .,
Common Cause, 668 A.2d at 202 (citation omitted).
The Legislature averred this point during oral argument in this case.
We emphasize that had the Legislature required that the departments and agencies submit reports on a more frequent basis, we may not be
similarly inclined to uphold the statutes. However, separation of powers chalienges must be analyzed on a case by case basis, and the facts of this
case support our holding that the requirement of monthly reports and reports which wiil only be required after each holiday do not impose enough of a
burden on the departments so as to prevent the departments from properly functioning.
http;//www.guamsupremecourt.com/op2002Guam01.htm
7/29/2003
Page 92 APPENDIX
10
Page 93 RECEIVED
FILED

S U F r- E M E C O U R T
OF GljS;M
attorney glnekal's office

Jui i

ii


IN TH E SUPREME C O URT OF G U A M
IN RE*
REQ UEST O F G O VER N O R
F E L IX P. C A M A C H O R E L A T IV E TO
T H E IN T E R P R E T A T IO N AN D
A P P L IC A T IO N O F SEC TIO N 11 OF
T H E O R G A N IC A C T O F G U A M
Supreme Court Case No.:CRQ03-
N O TIC E

TO:

A rthur B. Clark, Esq.,
Counsel for Governor o f Guam Felix P. Camacho
Hon. Vicente C. Pangelinan,
Speaker o f the Twenty-Seventh Guam Legislature
Therese M . Terlaje, Esq.,
Legislative Counsel fo r the Twenty-Seventh Guam Legislature
Douglas B. Moylan, Esq.,
Attorney General o f Guam

The above-captioned matter w ill be heard before the panel o f C hief Justice F. Philip
Carbullido, and Justices Pro Tempore Benjamin J. F. Cruz and Richard H. Benson. A request for
the disqualification o f any panel member must be filed and served by July 3, 2003, in accordance
w ith T itle 7 GCA § 6107.
A status hearing w ill be conducted before the panel assigned to this case at 10:00 a.m. on
July 2, 2003, in the Monessa G. Lujan Appellate Courtroom.
The court w ill allow the Attorney General and the Twenty-Seventh Guam Legislature to
request to intervene as interested parties to this proceeding. A ny request to intervene shall be
presented orally to the court at the July 2, 2003 status hearing.
D A TE D , this 1st day o f July, 2003.

2 00
Page 94 APPENDIX
11
Page 95 filed
supr em e court
RECEIVED

2 zm

OF GUAM
Jut z
II os 1 '
IN TH E SUPREME COURT OF G U AM
IN RE;

OF GO VERNOR
F E L IX P. C A M A C H O R E L A T IV E TO
TH E IN TE R P R E TA TIO N AND
a p p l ic a t io n o f SECTIO N 11 OF
T H E O R G AN IC A C T OF G U AM
request
\
)
)
)
)
)
Supreme Court Case No.:CRQ03-
ORDER
This matter comes before the court pursuant to determinations made at a hearing held in the
above-captioned matter on July 2, 2003. In accordance w ith the rulings made from the bench,
the Attorney General o f Guam’s request to intervene as an interested party in this matter is

GRANTED. Furthermore, all briefs in this matter shall be filed by 3:00 p.m. on July 7,2003. Any

opposition b rie f shall be filed by 5:00 p.m. on July 8, 2003. Any replies to points raised in an

opposition shall be filed by 10:00 a.m. on July 9,2003. The matter shall be heard at 10:00 a.m. on

July 9, 2003.
Finally, the court requests that the parties address in their briefs certam issues identified by
the court at the July 2, 2003 hearing. A summary o f those issues is attached to this order.
SO ORDERED, this 2nd day o f July, 2003.
1do hereby ccnlfy iliai ibc forcgiiliis
is afull iruf: and corrn«'tropy of llie
orialoal on fiir in “fflrr of itie
clerk of Ihc
f own «( ipwwrn

jni 0 2
i:003]
F. PHILIP CARBULLIDO
C hief Justice
Page 96 IN RE:
REQUEST OF GOVERNOR F E L IX P. CAMACHO RELATIVE
TO THE INTERPRETATION AND APPLICATION OF SECTION
11 OF THE ORGANIC ACT OF GUAM; SUPREME COURT
CASE NO. CRQ03-
ISSUES TO BE BRIEFED
a)
What is the meaning o f the relevant language in § 11 o f the Organic Act.
b)
What is the meaning o f the word “indebtedness”under§l 1 ofthe Organic Act.
c)
What is the current debt amount under the definition advanced. Support the
record by describing how the computation was arrived at.
d)
What is the meaning o f aggregate tax value or tax value when the term is used
in § 11 o f the Organic Act.
(i)
e)
What is the effect o f local statutes and in particular Public Law 27-21 on
the meaning o f aggregate tax value.
Address whether the methodology used by the Department of Revenue and
Taxation in determining 100% o f appraisal value is arbitrary and capricious.
Address the same with respect to the application o f 35% o f assessed value, i.e.
is the methodology used in applying this formula in determining the
“indebtedness” of GovGuam arbitrary and capricious?
Page 97 APPENDIX
12
Page 98 PH,fO
Fr.y: cggt

Office o f the Attorney Genet;
i'i'l
Douglas B. M oylan
Accorney General of Guam
C ivil D ivision
Guam judicial Center, Suite 2-200E
120 West O ’Brien Drive
HagStna, Guam 96910 • U S A

(671) 475-3324 • (671) 472-2493 (Fax)
wvnv.guamattorneygeneral.com • law@mail.justice.gov.gu

Attorneys for the G o vernm ent of Guam

IN T H E SUPREM E C O U R T OF G U A M
HAGATNA, G UAM

IN RE:
)
REQ UEST OF G O VER N O R F E L IX P.
)
C A M C H O R E L A T IV E TO TH E
)
IN T E R P R E T A T IO N AN D A P P L IC A T IO N )
OF SEC TIO N I I O F T H E O R G A N IC A C t )
OF G U A M
)
)
)
_________________________ ____________ )

'iio
Case Number CRQ03-
REQUEST FOR
7 G .C.A. § 6107 D IS Q U A L IF IC A T IO N
Pursuant to Chapter 6 o f Title 7 o f the Guam Code Annotated, Objection to Competency,
Procedure, and the High Court’s July 1, 2003 Order, Respondent Government o f Guam
respectfully requests that Justice Pro Tempore Benjamin J.F. Cruz and Chief Justice F. Philip
Carbullido disqualify themselves from the above entitled action, and i f not that the matter be
decided by the High Court pursuant to the procedures specified in 7 G.C.A. § 6107.
Pursuant to the Justice’s oral instructions at the July 2, 2003 status hearing, this Request

is filed and served upon the High Court’ s Clerk’s Office alone.
The bases for Justice Pro

Tempore Cruz’ s disqualification,
individually or taken cumulatively, are that:
Page Request f o r 7 G.C.A. § 6 107 D is q u a lific a tio n
Supreme Court o f Guam Case No. CRQ03-
2 0 0 3 1 8 2
either considered
Page 99
(1)
Personal Bias & Prejudice, K U A M Interview .
Justice Pro Tempore

Cruz manifests a personal bias against the Attorney General o f which the Justice Pro

Tempore's im partiality might reasonably be questioned. On June 13, 2002 K U A M news

disclosed comments via news television broadcast, and republished on the internet

( E x h i b i t A ) , that the Justice Pro Tempore had spoken out against then Attorney

General candidate Moylan.

candidate M oylan’s chances o f election.

(2)
The interview publicly damaged then Attorney General
Personal Bias & Prejudice, K U A M In te rvie w .
Justice Pro Tempore

Cruz manifests a personal bias against the Attorney General o f which the Justice Pro

Tempore’s im partiality might reasonably be questioned. On June 20, 2002 K U A M news

televised an actual interview given by the Justice Pro Tempore issuing public comments

via public news broadcast and republished on the internet ( E x h i b i t B ) ' wherein the

Justice Pro Tempore spoke out openly against then Attorney General candidate Moylan.

The interview publicly damaged then Attorney General candidate Moylan’ s chances o f

election.

Attorney General’ s alleged improper conduct during the election campaign. The Justice

Pro Tempore accused then Attorney General candidate Moylan o f receiving improper

preferential treatment, despite the allegations never having been proven.

unsubstantiated allegations o f the Justice Pro Tempore manifest a disqualifiable bias o f

the Justice Pro Tempore against the Attorney General, which can reasonably cause the

Justice Pro Tempore’s impartiality to be questioned by the same members o f the public

he addressed in his K U A M interviews.

F.Supp. 629 (D.C.Ark., 1979).
The Justice Pro Tempore appeared on television and openly criticized the
Note Marshall v. Georgia Pac. Com..
' The Exhibit is the text o f the June 20, 2002 broadcast comments and interview by K U A M news.
Page Request f o r 7 G.C.A. § 6 1 0 7 D is q u a lific a lio n
Supreme Court o f Guam Case No, CRQ03-
These
Page 100 (3)
Financial & O ther Interest, Retirem ent Pension.
On information and
belief, the Justice Pro Tempore maintains a pecuniary interest in the outcome o f the
case.
On information and belief, the Justice Pro Tempore is presently receiving a

retirement pension as a retired Justice from the General Fund, which money is now

threatened by the Government o f Guam’ s inability to meet its current financial

obligations, .^fthe borrowing is approved through Public Law Number 27-19, which is

at issue, then the Justice Pro Tempore's judicial retirement benefits have a greater

likelihood o f continuing. Otherwise, Petitioner Governor o f Guam has publicly stated

that a Government shutdown is likely due to lack o f funds in the General Fund. The

Judicial Retirement Fund is funded by the General Fund directly, which is in Jeopardy o f

collapsing i f the bond is not approved. Alternatively, i f the Justice Pro Tempore is part

o f the Government o f Guam Retirement Fund (“ Fund” ), then he has a pecuniary interest

since the Fund is presently slated to receive $25,285,057 from the Bond authorized by

Public Law Number 27-19. ^

does not receive the proceeds, there is a significant possibility that it too w ill fail,

especially i f Government expenditures are not reduced to divert available revenues to

the Fund.

reasonably be questioned.

(4)
P.L. No. 27-19:2, 5 G.C.A. § 1520(m)(iii). ^ th e Fund
Based upon the foregoing the Justice Pro Tempore’s impartiality may
Im p a rtia lity in Question.
On information and belief, the Justice Pro

Tempore maintains a continuing domestic relationship w ith Mr. Johnny P. Applegate

(domestic partner).

The Justice Pro Tempore and M r. Applegate maintained a close,
long term relationship in the past, according to a publicly disseminated magazine.

E x h ib it C .
The undersigned Attorney General is unaware whether they have
discontinued their relationship.
Page Request f o r 7 G.C.A. § 6 107 D is q u a lific a tio n
Supreme Court o f Guam Case No. CRQ03-001
Page 101
M r. Applegate is currently under criminal felony indictment by the Government

o f Guam in Superior Court o f Guam case number CF505-00, and a warrant o f arrest is

outstanding under the same case, captioned The People o f Guam v, Johnny Paul

Applegate. E x h i b i t d I
The Office o f the Attorney General, under General John
F. Tarantino, initiated the prosecution in the year 2000, and a Superior Court o f Guam
grand ju ry returned a true b ill indictment on September 19, 2000. E x h i b i t E .
Guam law provides that any Justice shall disqualify him self or herself in any
proceeding in which his or her impartiality might reasonably be questioned. 7 G.C.A. §

6105(a). I F the Justice Pro Tempore’s relationship continues w ith Mr. Applegate, the

fact that an outstanding warrant o f arrest continues against his domestic partner, can lead

a reasonable person to conclude that the Justice Pro Tempore’s impartiality is in

question since the Attorney General is tasked w ith prosecuting Mr. Applegate. Whether

in actuality the Justice Pro Tempore can be impartial is not the standard under Guam

law (subjective vs. objective distinction). Id.

Noteworthy is that cases have held that a judicial officer should recuse oneself i f

the judicial officer is under investigation. U.S. v. Garrudo, 869 F.Supp. 1574 (1994);
U.S.
V.
Cerceda, 172 F.3d 806 (1999). In this case, although the person under criminal
indictment is clearly not the Justice Pro Tempore, and this ground is not intended to in
any way state nor im ply that the Justice Pro Tempore has in any way inliibited the
execution o f the outstanding bench warrant, on information and belief Mr. Applegate

continues to be a domestic partner o f the Justice Pro Tempore and the Office o f the

' The undersigned Attorney General became aware o f the outstanding warrant o f arrest only recently, after taking
office.
Page Request f o r 7 G.C.A. § 6 107 D is q u a lific a tio n
Supreme Court o f Guam Case No. CRQ03-001
Page 102
Attorney General is representing the People in the prosecution o f that individual, which

may create the appearance to a reasonable person o f partiality against the Attorney

General’s Office.

Noteworthy is that Guam law has recognized the significant relationship between

spouses and judicial officers, and thereby established parameters for judicial officers, or
those acting as judicial officers. This recognition is not only in 7 G.C.A. § 6105 for the
Judicial Branch, but was expanded by the legislature in 4 G.C.A. § 4401(b) for the C ivil
Service Commission members. In questions o f disqualification, persons comprising an
“ immediate fam ily” is defined to include a “ collective body o f persons living together in

one house under one head.” 4 G.C.A. § 4401(b). Additionally, jurisdictions, such as

Hawaii and Vermont, as well as Canada, recognize the ability for same gender persons

(domestic partners) to enter into a marriage.

(Hawaii Cir.Ct. 1996); Baker v. State. 744 A.2d 864 (Vt. 1999). Note also Lawrence v,

Texas, 539 U .S .____ (2003). The key issue in this discussion is the closeness which

See Baehr v. M iike , 1996 W L
apparently exists between spouses as well as domestic partners, regardless o f being the

opposite or same gender, and the consequent question o f impartiality which arises from
that relationship and creates a disqualifiable ground.
Based upon the foregoing reasons, either independently, or cumulatively, the
Justice Pro Tempore's impartiality may reasonably be questioned. 7 G.C.A. § 6105(a).
Page Request f o r 7 G.C.A. § 6 1 0 7 D is q u a lific a tio n
Supreme Court o f Guam Case No. CRQ03-001
Page 103
The reasons for the Chief Justice’ s disqualification are, based in part upon the voluntary
disclosure made by the Chief Justice at the July 2, 2003 hearing, that:

(1)

Financial & O ther Interest, R etirem ent Benefits.
The
Chief
Justice has a pecuniary interest in the outcome o f this action, in which the Chief

Justice’ s im partiality might reasonably be questioned. The Chief Justice’ s spouse has

recently retired from the Department o f Education (“ DOE” ). DOE is a line agency o f

the Government o f Guam. DOE owes the Government o f Guam Retirement Fund about

$20,356,132.44 as o f May 30, 2003 for unpaid employer and employee contributions.

E x h ib it

F.
This figure has accrued since before the C hief Justice spouse’ s
retirement, while she was still employed by the Government o f Guam.

Public Law
Number 27-19, which public law is at issue in this case, provides for part o f the proceeds

o f the bond to pay monies which the Government o f Guam and DOE owe to the

Government o f Guam Retirement Fund. See P.L. No. 27-19:2, 5 G.C.A. § 1520(m)(iii).

Specifically, the bond pays $25,285,057 o f its proceeds to the Fund, $10,109,
directly for DOE debts owed to the Fund.

See P.L. No. 27-19:2, 5 G.C.A. §
1520(m)(iii).

On information and belief, DOE owes money for the Chief Justice’ s spouse to

the Fund, which were not paid while she was employed. This case w ill effect the ability

and timeliness for the Chief Justice’s spouse and household to receive the retirement

monies that the Chief Justice’ s wife is entitled to receive.

Noteworthy is that the lower court recently issued decisions on February 18,

2003 and July 2, 2003, in Bautista, et al. v. Perez, et al.. Superior Court o f Guam Case

Number C V 1848-01, which prohibit the retirement o f government employees until after

their particular department pays all the monies owed to the Government o f Guam

Retirement Fund. E x h i b i t s
Page Request f o r 7 G.C.A. § 6 107 D is q u a lific a tio n
Supreme Court o f Guam Case No. CRQ03-00!
G
and H .
Whether or not the bond is issued w ill
Page 104
directly determine whether or not employees are permitted to retire under the lower

court’s current order. On information and belief the C hief Justice’ s spouse’s pension is

being delayed because o f the before identified court orders, and the Government o f

Guam’s inability to pay the amounts it owes the Fund on behalf o f the employees.

(2)
Financial & O ther Interest, Unpaid Debts from Governm ent Agencies

Effected by B orrow ing Law.

continues to have outstanding financial obligations due from the Government o f Guam

On information
and belief, the Chief Justice
which are being billed through his former law firm for legal work the Chief Justice or his

law firm performed while he was a partner. The information was disclosed during the
Chief Justice’ s August 30, 2000 confirmation hearing before I Liheslaturan Guahan (“ the
Guam Legislature” ). E x h i b i t I is a written summary o f amounts for legal services
billed, paid and outstanding o f government debts to the Chief Justice.

The relevant
financial information o f outstanding government debts owed to the Chief Justice from

the August 30, 2000 committee hearing (public hearing) audio tape are available upon

request as part o f the legislative record.

Public Law Number 27-19:2 (5 G.C.A. § 1520(m)(v)), which is under dispute,

permits payments to vendors owed as o f September 30, 2002 in the amount o f $5,263,609.

On information and belief, some o f this amount constitutes payments to amounts owed by

the University o f Guam and by the Guam Preservation Trust to the Chief Justice’ s former

law firm for prior billings, which the Chief Justice has a financial right to receive. Infra.
On information and belief, the University o f Guam still has not paid the unpaid debt owed
to the Chief Justice and/or his former law firm, which the Chief Justice w ill benefit from
directly or indirectly by being paid pursuant to his separation agreement. Infra.
Page Request f o r 7 G.C.A. § 6 107 D isq u a lific a tio n
Supreme Court o f Guam Case No. CRQ03-001
Page 105
Based upon the Chief Justice’s August 30, 2000 public hearing and committee

report, debts owed by the Government o f Guam to his former law firm were as follows;

(a)
Guam Preservation T ru st
$44,560.
(b)
Guam Inte rn a tio na l A irp o rt A u th o rity
$106,070.
(c)
U niversity o f Guam
$274,821.
(note:
on
8/31/00 Atty.
Lynch
indicates value
actually
$19,913.66)
(d)

P ort A u th o rity o f Guam
$104,483.
E xh ib it I.

The University o f Guam and Guam Preservation Trust derive their funding from

the General Fund, which the bond w ill pay debts owed by the General Fund and the

Government o f Guam. Payment o f other outstanding General Fund debt w ill also free

funds up for other vendor payments that may be owed to the Chief Justice’ s foimer law

firm.

Canon 3C(l)(c) states,

“ (1)
A judge should disqualify himself in a proceeding in which his
impartiality might reasonably be questioned, including but not limited to instances
where;
(c)
he knows that he, individually or as a fiduciary, or his
spouse or minor child residing in his household, has a financial interest in
the subject matter in controversy or in a party to the proceeding, or any
other interest that could be substantially affected by the outcome o f the
proceeding;” (Emphasis added).

See also, 7 G.C.A. § 6105(b)(4) [financial & other interests].

The AB A commentary to Canon 3C(1) states,
“ AB A Com m entary: A lawyer in a governmental agency does not
necessarily have an association with other lawyers employed by that agency within
Page
Request f o r 7 G.C..-I. j-' 6 1 0 7 D is q u a lific a tio n
Supreme Court o f Guam Case No. CRQ03-001
Page 106
the meaning o f this Subsection [3C (l)(b)]; a judge formerly employed by a
governmental aRency, however, should disqualify himself in a proceeding i f his
impartiality might reasonably be questioned because o f such association.”
(Emphasis added). E x h i b i t J .
'■)
J
The C hief Justice’s past involvement in the numerous government agencies, but most

especially the University o f Guam and the Guam Preservation Trust, which, on

information and belief, continues to owe the Chief Justice money through his agreement

with his former law firm , infra, brings his partiality in this case into the standard o f

“ reasonably” being questioned.

The C hief Justice disqualified him self from a previous action involving issues

concerning his financial interest from his continued entitlement to a percentage o f the

collected receivables from his former law firm , and warrant voluntary withdrawal
herein.
This Action is related to decisions issued in the previous Supreme Court o f
Guam case. In Re: Request o f Governor Carl T.C. Gutierrez Relative to the Organicitv
and Constitutionality o f Public Law 26-35. case number CRQO1-001, filed October 16,

2001. Noteworthy is that the October 16, 2001 decision explained that the Chief Justice

is entitled to “ sixty percent (60%) o f the receivables as o f September 30,
subsequently collected^” E x h i b i t K .

income for the Chief Justice (public document) discloses that as o f September 30, 2002,

income was still being derived from his former law firm . The amount disclosed for the

period ending September 30, 2002 is $159,988.00. E x h i b i t L .

’ Page 4 o f October 16, 2001 Decision.
Page
Request f o r 7 G.C..4.
6107 Disqualification
S u p re m e C o u rt o f G u a m C ase N o . C R Q 0 3 -0 0
The Financial Disclosure Act statement o f
Page 107
(3)

F inancial & O ther Interest, Salary.
The Chief Justice has a
pecuniary interest in the outcome o f this action, in which the Chief Justice’s impartiality

might reasonably be questioned. The Chief Justice is a fu ll time salaried employee o f

the Government o f Guam. Petitioner Governor o f Guam has stated that a Government-
wide payless payday is likely i f the bond is not issued. This bond, Public Law Number
27-19, is the subject o f the above captioned case.
Unlike the attorneys in this case,
however, the Chief Justice has the unfortunate task o f deciding the serious issues being
presented, which w ill directly affect whether he receives a salary, and possibly whether a

furlough or ten percent (10%) salary reduction are implemented.

See 27*^ Guam

Legislature B ill 57 (COR). Based upon the foregoing reasons, either independently, or

cumulatively, the Chief Justice’ s impartiality may reasonably be questioned.

The statutory grounds for disqualification are founded within § 6105 o f Title 7 o f the

Guam Code Annotated, and expressly provides,

“ Section 6105.
Grounds o f D isqualification.
(a)
Any Judge shall disqualify him self or herself in any proceeding in
which his o r her im p a rtia lity m ight reasonably be questioned, but if,
follow ing complete disclosure to all parties in the proceeding o f the reasons for
disqualification, all parties agree to having the Judge continue to sit in the
proceedings, he or she need not disqualify him self or herself
(b)
A Judge shall also disqualify him self or herself in the following
circumstances, but if, following complete disclosure to all parties in the
proceeding o f the reasons for his or her disqualification, all parties agree to
having the Judge continue to sit in the proceedings, he or she need not disqualify
him self or herself:
(1)
Where he or she has a personal bias or prejudice
concerning a party, or personal knowledge o f disputed evidentiary faets
concerning the proceeding: ...
(4)
Where he or she knows that he or she, individually or as a
fiduciary, or his or her spouse or minor child residing in his or her
household, has a financial interest in the subject matter in controversy or
is a party to the subject matter in controversy or is a party to the
Page
Request fo r 7 G.C.A. § 6 1 0 7 D isq u a lific a tio n
Supreme Court o f Guam Case No. CRQ03-001
Page 108
proceeding, or in any other interest that could be substan tia lly affected
by the outcome o f the proceeding;” (Emphasis added).

The rule that a decision maker shall be disqualified from a case in which that person is
interested or prejudiced is to insure a fair and impartial hearing o f the issues involved, and to

guarantee that no decision maker shall preside in a case in which she is not w holly free,

disinterested and independent. Litinskv v. Ouerard. 683 P.2d 816 (1984); Dacev v. Cormecticut

Bar Assoc., 441 A .2d 49 (1981).

The before mentioned statutory grounds are founded upon the Canons o f Judicial Ethics
(Code o f Judicial Conduct), however, those provisions are not exhaustive.
Judicial Conduct, Canon 3 C (l).
See 7 G.C.A. § 6103.
A.B.A. Code o f
The situations in which a judicial
officer should grant a motion for recusal are varied and are not limited arbitrarily to cases o f
kinship, personal interest in the litigation or prior representation o f a party; there are areas
beyond these where a judge may not sit in judgment. 46 Am Jur 2d, Judges § 95. Walker v.
State, 358 So.2d 800 (1978). A judicial officer not only has the right, but also has the obligation
to recuse oneself on that person’ s own motion i f the judicial officer is satisfied that there is good

cause for believing that by not doing so, it might preclude a fair and unbiased hearing in

judgment, or might reasonably lead counsel or the parties to believe so. State v. Tucker.
A.2d34(1993).

In this case it is clear that the Justice Pro Terripore harbors strong enough feelings

against the Attorney General to openly and publicly criticize him during the election season and

during his bid for Attorney General, thereby now creating an appearance that a reasonable

person (third party) would conclude that the Justice Pro Tempore’s impartiality might

reasonably be questioned.
Page Request f o r 7 G.C.A. § 6 107 D is q u a lific a tio n
Supreme Court o f Guam Ca.se No. CRQ03-001
Page 109
Unlike an advocate, a judicial officer, or one continuing to serve on a part-time basis as

a judicial officer, must refrain from public criticism and comment so as not to create an

appearance o f bias or prejudice against the parties to a proceeding. Judicial disqualification is

required i f a reasonable person would question the judge’ s impartiality, even though no actual

bias or prejudice has been shown. Gray v. University o f Arkansas at Fayetteville. 883 F.2d

1397-98 (8‘^ Cir. 1989).

against the Attorney General, albeit after his retirement from the Supreme Court o f Guam and

prior to this case, he has now created an “ appearance o f partiality” against the Attorney General

arguably tainting the public’s perception o f the legitimacy o f this proceeding.
Because the Justice Pro Tempore openly and publicly spoke out

Cases have held that a spouse’ s financial interests in the outcome o f a particular case

constitute sufficient reason for disqualification, as well as qualifying under the “ other interest”

prong. See In Re Cement Antitm st Litigation. 688 F.2d 1297 (C.A. Ariz. 1982); In Re Virginia
Elec. & Power Co.. 539 F.2d 357 (4^^ Cir. 1976).
For the foregoing reasons the Government o f Guam respectfully requests that the Justice
Pro Tempore and the C hief Justice recuse themselves from this case.
Each ground, either
considered independently, or taken cumulatively, constitutes sufficient reason to believe that the
Justices’ impartiality might reasonably be questioned by a third party.
Respectfully submitted this 3^^^ day o f July, 2003.

OFFICE OF THE ATTORNEY GENERAL

D o u g las B. M o y l a n , Attorney General of Guam
Douglas B. M oylan
Attorney General of Guam
Page Request f o r 7 G.C.A. § 6 107 D isq u a lific a tio n
Supreme Court o f Guam Case No. CRQ03-001
Page 110
VERIFICATION

The undersigned, being first duly sworn, depose and say: that he is the Attorney General o f

Guam; that he has read said Request fo r 7 G.C.A. § 6107 Disqualification, knows the contents

thereof to be accurate as stated, and is authorized to act on behalf o f the Government o f Guam,
except as to the matters which are therein stated upon information and belief; and as to those
matters, he believes them to be true.
T H E F O R E G O IN G is true and correct to the best o f my knowledge and belief, under
penalty o f perjury o f the laws o f Guam, this declaration being sworn and made in lieu o f an

affidavit pursuant to Title 6 Guam Code Annotated § 4308, at Hagatna, Guam, this 3'“^ day o f
July, 2003.
DOUGLAS B. M O Y L A N
Attorney General of Guam

Page Request f o r 7 G.C.A. § 6107 D is q u a lific a tio n
Supreme Court o f Guam Case No. CRQ03-001
Page 111
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Page 115 Former Chief Justice questions legality o f “ defiling”
By Yanna Person, Thursday, June 20, A week ago K U A M News presented the community w ith a situation involving one o f the
candidates running fo r the first-ever elected Attorney General. While a Superior Court judge
found no merit to allegations that were lodged against him in a civil case, we bring you a closer
look at the issue o f “ defiling” .
The defiling o f a case is a matter so many island attorneys are unwilling to publicly discuss or
officially confirm, m ainly because local attorneys K U A M questioned had never heard o f the
term “defiling” , have ever filed a motion to defile, nor witnessed the practice o f defiling. More
than a handful o f attorneys, while saying they haven't heard o f defiling a case (and some even
indicating they thought there may be something questionable about a case being defiled), all
insisted their names be kept o ff the record, it seems while a majority o f the attorneys we spoke
with agree “ defile” is not an officially recognized legal term, and nearly no one wanted their
name publicly attached to such a statement or opinion.
One person, while not an attorney, was w illing to tell the public what the term defile meant.
Superior Court Administrative Director Tony Sanchez, who actually says defiling a case is
essentially no different than expunging one,” said, “ We treat defiling a case and expungement as
interchangeable. To us, they're the same procedures we follow .”
Sanchez says defiling a case is not a new concept, although it's taken a case involving Douglas
Moylan, a candidate for Attorney General and a court order by a Superior Court judge to bring
the practice to the forefront. “ This case has brought up the term defiling, but by and large there
have been many cases that were expunged over the years across the nation...it's a standard
procedure,” Sanchez said.
KU AM was able to speak with Guam Bar Association Ethics Committee Chairperson Duncan
McCully, who says there's nothing in the rules o f ethics regarding defiling a case, nor is there
any stated guidelines in the rules o f civil procedure or court regulations on defiling. M cCully
tells KU A M he has never heard o f it happening, but does say in juvenile cases such as Moylan's.
There are procedures for sealing those proceedings, but according to McCully because there are
no rules governing defiling, it technically shouldn't happen. However, he says the courts do have
the authority to execute certain procedures as they see fit in order to effectively handle certain
cases.
While the two domestic cases were sealed, a juvenile proceeding involving Moylan's two minor
children was also sealed and defiled, leaving the newsteam (and apparently the local legal
community) wondering what basis would allow for an entire case to be defiled.
Former Chief Justice o f the Supreme Court o f Guam Benjarfiin Gruz gave a voice o f legal
authority to others electing to remain anonymous. Former Chief Justice Cruz told the newsteam
that at a chief justice conference last year, none o f the justices had heard o f the term. Said Cruz,
“ How embarrassed I w'as, because the justices were looking at me, [as i f to say] ‘D id you guys
Page 116 go to American law schools, or did you even go to school period?’, and then questioning whether
or not there was crim inal activity or laws that prohibited such action.”
You'll recall that Justice Frances Tydingco-Gatewood, whose brother, Phil Tydingco is also
running for Attorney General in her written response on the motion to recuse herself from
Moylan’s case stated, “ 1 was shocked and alarmed by the fact that documents in a third case were
returned to counsel who had filed them, all court records were destroyed and all electronic and
audio records o f all hearings were erased.” In an interview with K U A M last week, Moylan
contended defiling is allowed, saying the motion to defile is granted when the judge finds there is
no merit to having the case in existence.
However, to the former chief justice, who has sat on the bench for nearly two decades, the
defiling o f the case hints at preferential treatment, an opinion echoed by Justice TydingcoGatewood in her response to the motion to recuse herself from Moylan's case. It's an allegation
that Moylan in a prio r interview with K U A M News absolutely disagrees.
“ I sat on the bench fo r eighteen years, and in the. eighteen years that F sat oh the bench I know o f
no other party and no other case where the case hadjbeeh defiled, where the tapes had been
erased, the transcfipits destroyed, arid a ll the documentsjjsuppbsedly returried to the parties, .iso
yeah, I guess it s preferential treatmerit, ’ added C inz; The rriatter is so cbncerriirig that Gruz feels
it s now necessary fo r the Judicial Gbuncil arid the U nified Judiciary Gbrnmittee to meet to
decide i f there is such a^thing as defiling arid whether sucHja practice should cbritiniie.
He said, “ Fie was and s till is an employee o f the Gourt as a referee, or at least until recently, and
so it looks bad fo r the court that you treat our employees differently from eve^^^
elsbiTJow
many o f your employees here who haye had a domestic case have had their case defiled? Sqm^
o fyo ri may have sealed it because o f the fact that you: are going through recorieiliafibri - w hich is
a great idea - but it isn't completely thrbym out, I mean destroyed. That is completely shocldng,
and riiost o f the judges at tlie chief j ustice conference were like surely therem ust be a law that
makes it a crim inal act to destroy govefrm ent dbCurnents like that.”
The defiling is an inherent power the court has over its records. Moylan's attorney, Curtis Van de
Veld responded by saying, “ That under Rule 12, there is a procedure by which parties can seek
to have the court strike from the records. It maintains that scandalous or impertinent matter, and
m the proceedings we properly moved to strike - at the appropriate time - certain matter we
found as scandalous and impertinent, and the judge granted a motion to strike.”
Van de Veld added, “ The reasons the Gourt found the content to be scandalous and ordered it to
be struck is because there was serious allegations that were proven to be untrue. These are the
related allegations that Mr. Moylan has been physically abusive to his fam ily.”
In regard to former Ghief Justice Gruz's comments there may have preferential treatment for
Moylan's case. Van de Veld says there have been times the judge overseeing the case has ruled
favorably for Moylan, and times the judge has ruled against him; and when that judge ruled
against Moylan, they've taken the matter to the Supreme Gourt o f Guam. As well. Van de Veld
jii
Page 117 I-
n
o
tells K U A M that neither party in the case chose to appeal the decision by the judge to defile that
case.
Page 118 SEPTEMBER
n
7 LL7C\ H 7 S t;s l
$3.50
Page 119 F e a t u r e s
All in the family

The lies ihot bind, serve Guam's gay communih/
A private affair

G ays on Guam can come out bul ihey keep il in ihe closet
I'm too sexy for ...

1 9 9 5 Miss G a y G uam Pageant conteslanis
F.Y.I.

Factoids obout being gay
The words that won the war

N ovojo w ar veterans return lo Guam
The wooden home

Forging a humble ab o d e with that mosi natural material
GPA power vacuum filled

The power authority under new management
About the Superior Court Judge Benjamin J. Crux and
his partner of nine years, Johnny
Applegate
GHRA
Place your voles lor the best eats, sites in town
80
Page 120 Family: Slang (or gay. as in ’Is she family?' when
queslioning a stranger's sexual orientation.
EDITOR'S NOTE: The following
material contains sensitive issues,
graphic descriptions and obscenities
that some readers may fin d offensive.
Neither as defiaritly accepting of
homosexuals as San Francisco nor as
hospitably -welcoming as Vancouver,
Guam nevertlieless shelters its gay com­
munity. Local culture tolerates the sons
and daughters who don’t marry but who
always seem to have many ■‘friends."
"(G ays) are n 't oslraci'/,ed b u t they are
stigm a tized ,’’ says S u p e rio r Court Judge
Page 121 P « iiw '
Benjamin Cruz, perhaps the most visible member of Guam's
gay community. “But here — Ombre, you know. Uncle so-ajidso is 'you know.’ But they wouldn’t say what the 'you know’
was. And you were accepted in the family and everybody kirew
that the other auntie that was living at the house is ‘you know’
and it's her lover. You don’t have to be explicit. .And I think
that’s where my behavior is not ty-pically Chamoni. And I hate
to admit that. The Chamoru culture would have said, 'Do and
be what you are. Just don't announce it.”’
Guam’s unique lifestyle offers advantages and disadvan­
tages for the gays who have grown up here. Two pillars of
Guam’s culture — family and religion are, at the same time, the
source of support and tension for many. Both affect the differ­
ent stages of the “coming out” of a gay person: coming to terms
with your sexuality, coming out to your family, and coming out
to the public.
COMING OUT
Conring to terms with your own sexuality is as individual a
process for gays as it is for heterosexuals on Guam. Some have
always known — and been comfortable — since their first
awareness of other people that they were attracted to those of
the other sex, while others go through a period of denial. For
those who came to terms w ith their sexuality while growing up
here, the hell that adolescents around the
world know as junior high and high school
became a crucible in shaping their characters.
Rio Vizmanos, 31, moved to Guam from
Okinawa when he was 11. He was 13 w’hen he
fell in love with his best friend, who rejected
him after he learned of it. “It really hurt me but
... I believed tliere was nothing really wrong
with it. I knew that it was unusual but because
it was love that I was feeling — I mean thought it was love, I was only 13 — I didn’t see
anything wrong with that.”
Growing up and moving up to high school
— John F. Kennedy — meant more of the
sanre. “I was really into the punk and new wave
movement, which really wasn’t that common
on Guam," says Vizmanos, who sports a shaved
head. “And that somehow related to fags at
verbal and casually physical. Like stuff getting thrown at us
that time, because it v'as so unusual. So me
when we’re walking across the courtyard.”
and my group of friends were known as the
I guess thats where my strength came from, I didn't want
Punk Rock Fags. I resented the mentality but
to be one of those people who were harassing us anjnvays, so
by that time 1 knew that’s the way it was, that
theie was no sadness to being harassed. It wasn't as if I wa.s
there were a lot of nanow-mindcd people out
being kicked out of a club that I wanted to be in. I knew that
there, that there w:is a lot of hara.ssment —
(being gay) -was about love, I knew that there wa.s nolhins;
Page 122 ■'vrorig w ith it.'’
' liiire nem w .James Young, 21, came to lenn.s w ith h im s e lf
sophom ore year a t G eorge W ashington High School,
re a lly scared to go to school. Well, n o t to re a lly go to school,
but to w a lk in ce rta in parts o f it. I t w asn’t com forta ble . I got
called names a lo t, and at the tim e, I d id n ’t lik e that.
ih a t vv;is a p re tty tough sch o o l. I've never to ld anybody th is ...
•'A couple o f tim es, yo u ju s t get so fed up, you Just tu rn
I' 'Va.s scary. In high scho ol 1 had no confidence whatsoever.
around and say', ‘Screw' y o u !’ o r give them the finger. But m ost
i
know, yo u ’re young ... 1 d o n ’t know, maybe confidence is
o f the tim es, you le arn Just to ignore it. A n d som elim es in m y
'' uielhing you gain. .A.nd so 1 d id n ’l rea lly have an.v. and I was
head, you ,just .sit there and go, ’OK, I'm b e tte r Hum those pco-
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After graduating from law sihool in Colifornia, Judge Crui — shown nf former It . Gov. Rudy Sablon's memorial — returned to Guam,
cxperting to 'serve his people' for a couple of years, then perhaps return to the mainland. *1 might not have survived had I not decid-
p ie .’ But th a t’s ju s t to p ro te c t yo u re e lf from getting hurt. You
B u t he and others refuse to rem a in “ in the clo se t” even w ith
pretend lik e i t ’s n o t re a lly ha rm ing you when actually, o f
th e ir fa m ilie s and have made it a p o u il to com e o u t to th e ir par ­
course it ’s gonna h u rt y o u .”
ents and siblings. A n d despite the fa c t th a t fe w fam ilies —
FAMILY MATTERS
A fte r the firs t h u rd le o f c o m in g to ten ns w ith one's se xu a li­
ty comes the even bigger one; com ing out to one’s fam ily. F o r
som e the answ er is to re m a in s ile n t and le t the fam ily fig u re it
^vhether they k n o w o r s im p ly guess — are co m fo rta b le ta lk in g
about a gay son, daughter, b ro th e r o r sister, c u ltu ra l Iradition.s
d icta te yo u stand by them, no m a tte r w hat.
" I t s one o f those things that you have to acceirt,’’ says
out. “ It's typica l o f fa m ily cu ltu re s,’’ say.s Tom Delgado. 28.
D e lga do s b ro th e r .Joe, 3(5. “ H e’s s till m y b ro th e r no m atter
'"Other fam ilies can be Just as un com fortab le about ta lk in g h e t­
w h a t.”
erosexual o rie n ta tio n . I m ean sexual orie n ta tio n in general is
“T h e re ’s a very stro n g u n de rlyin g un de istan din g: They kno w
som ething held in in C h am o ru cu ltu re ... because it's taboo, i t ’s
that 1 love them at\d 1 kn o w that they love me," Vizmaito.s savs.
in the bedroom ."
“ So it's rea lly not som ething that we need to ta lk about — me
Page 124 being gay. Tlicre's so m a n y o th e r tilin g s ab'q& m yse lf o r thcjri.
that’s fa r more im p o rta n t. A n d the m ost im p O T ^ t th in g is thab|
gOfne o u t to som e o f his im m e dia te fam ily.
fS*~''
Stir
i’-rC
“ G ro w in g u p ;^ri Guam, fo r me, because o f the c u ltu ra l pres-
ive k n o w that we lo ve each oth er.
pass.-li--'-
§h|1es,,'^lhe fa n iiiia l pressures, I
it —• bvil it ’s
enough to be, co m fo rta b le w ith w h o I am because I c o u ld n ’t
not a big deal. She c o m p le te ly accepts i l ^ : ^ ^ e f o r e I ’m her
exjiress it," s a j^ ^ liK g Craz. “ So w h e n I w e n t o f f isla n d I w asn’t
gay brother. I ’m ju s t he r b ro th e r.”
a ro un d fa n u ^ . jiiv ^ jie r s ... and I d id n ’t fe e l th a t pressure. So I
-O ne o f my sistere k n o w s — I ta lk to her ab^
re a lly d id n ’t feel capable
Adds Young: “ M y p a re n ts are n o t r e M ^ ^ I ’erbal people,
started to fee l co n tfo rta b le to say, ‘Hey, I ’m gay, th e re ’s no big
they’re more actio n. T h e y c a n ’t re a lly say, ‘1 love yo u ’ b u t the y
deal ab ou t it . ’ That's w hen I was able to see w h a t being gay
show it. The ivo rd s d o n ’t c o m e so easy ... that's ju s t the w ay it
meairs, being able to in co rp o ra te th e w'hole th in g in to m y life.
w orks. There’s n o th in g WTong w ith it ... I mean, som etim es
W hen a person lives in the closet, th e y lead at least tw o lives:
wish, ’cause I can’t ta lk to th e m really. I f I'm having problem s,
w h at people see and w h o the y re a lly are in term s o f expressing
I can’t go, 'M ora ...’ So it ’s a b it d iffic u lt, b u t w e ’re s till grow ing.
them selves.”
I k n o w I ’ll get the re one day w ith them , b u t w e ’re ju s t n o t there
y e t One day i t w ill happ en .”
T lie im m ediate fa m ily a lso m u s t deal w ith the p o.ssibility o f
THE MACHO SOCIETY
W lrile he and others w h o liv e d o f f isla n d ackn ow led ge th a t
the y e n jo y the p riva cy and openness o f b ig citie s on the m a in ­
negative “ta lk ” fro m o th e r re la tiv e s o r friends, w h ic h was a rea­
land, th e y agree th a t a m a jo r tra d e -o ff to liv in g on island is the
son cited by som e w iio d e c lin e d to have th e ir parents o r sib­
re la tiv e safety fo r hom osexuals. N one o f the tho se in te rv ie w e d
lings interview ed. A n o th e r m a jo r aspect o f being gay in th is
c o u ld re c a ll any in c id e n t o f gay bashings o n th e island, even
fam ily-oriented c u ltu re is h o w to deal w ith parents w h o are
tho ugh a fe w g a y-frie n d ly bars and clu b s have p ro v id e d an
counting on a son to ca rry o n th e fa m ily name.
easy ta rg e t f o r w o uld -be bashers. Besides the fa c t th a t any
“ Fathers being fathers, it w’as always, ‘W lien are g e tting m a r­
p o te n tia l v ic tim here co u ld tu rn o u t to be a cousin, there's a
ried ... have a baby, p ro ve y o u r v ir ilit y by giving us a ch ild ? ’”
good chance th a t No. 1, th e y p ro b a b ly g re w up in ju s t as tough
Judge Cmz says w ith a laugh.
a villag e as you rs and No. 2, they have relatives.
The issue is co m p o u n d e d w h en a gay man
Judge Cruz's fam ily, w h o are fro m A gat and
h im s e lf wants a fam ily. M ik e Cruz, 30, grew up
P iti, has been especially p ro te c tiv e , he says.
w ith 11 bro th e rs and sisters. “ F or m yse lf as
“They get re a lly defensive — to the p o in t w here
Chamoru, the b ig th in g (is ) ... the ideals o f hav­
I ’d have to adm onish the m n o t to a tte m p t to
ing a family, passing on the nam e." On the oth er
take som ebody’s face o ff. ... T hey d o n ’t lik e any­
hand , com ing fro m a large fa m ily also has eased
bo dy saying a n ythin g negative ab o u t me. A m ong
the pressure o f having to pass on his fa th e r’s
the fa m ily they can tease me, call me faggot, b u t
n;uup.
d o n ’t y ou dare fro m o u tside say th a t.”
“Those are issues I s till deal w ith . Because
Tom D elgado’s b ro th e r Joe echoes the s e n ti­
even though I am gay, I s till w a n t a fam ily. B u t
m ent: “There was th is one s itu a tio n w h e n w e
fo r a d iffe re n t reason (th a n c o n tin u in g tlie fam ­
w ere g ro w in g up, w e w e re in the choir. One o f
ily name) — I w ant to have one because I w ant
the m em bers o f the ch o ir, in a v o lle yb a ll game
to have one. I t ’s not f o r m y parents to have
he came up to me and asked me. ’Is y o u r b ro th ­
grandchildren anym ore — i t ’s not a cu ltu ra l
e r a gay, o r a faggot?' I ju s t to ld him , ‘C h ill o u t.’
thing, it ’s now' a personal th in g : I s till w a n t c h il­
I f he w o u ld have done a n jih in g to m y b ro th e r,
dren. It's a very d iffe re n t reason."
regardless i f he’s gay o r not, he’s m y b ro th e r.”
F o r many, leaving th e isla n d to live elsew iiere
A dds Tom D elgado ; “ No one can p ro te c t me
has lielp ed ease the p;uns and stnig glcs o f the com ing-out p ro ­
in (Los Angeles) if I'm w a lk in g on the street. 1 c o u ld be w a lk ­
cess, both fo r them selves and th e ir fam ily. M ike C m z lived on
ing the street here on Guam w ith m y b ro th e rs and i f a basher
Guam w ith his fa m ily in Agana Heights before m oving to the
came up to me. 1 mean 1 wovild take care o f him , b u t m y b ro th ­
Stares to get his m aster’s degree. A fte r years o f dating w'omen
ers w o u ld take care o f him too. You can’t do that in L A . o r even
and stu ig g lin g w ith his sexu al id e n tity du rin g his college years,
San F ra n cisco because even ;is g a y-frie n d ly as they are, there
he was able to com e to te im s w ith him self, and eventually to
s till are lio m o p h o b ic people w ho are harsh physically. 1 d o n ’t
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The most extremely negative response to his homosexuality that Judge Cruz says he received was the opposition to his nomination to
the court: "That I somehow would affect children, or something. And that was their biggest concern, the stereotypical one, that I was
going to paw all of the little children. And then they were shocked, because I handled Juvenile Court for eight years, I did very well
with the kids."
th in k that liappens here on Guam, people stop, th e y v e rb a lly
w'ent b a ck to m y car, 1 had 15 fe e t o f telephone w ire ... and I
abuse yo u but so m e th in g done physically, 1 do n't th in k — I
w ra p p e d it around to m ake five fe e t o f w ire .”
hope — it doesn’t happen. And i f it does, I'll be
figh ting ."
The m an then cam e b a ck to the tr u c k w h ere
he was sittin g . “ I lo o ke d at him , I to ld m yself,
A fo rm e r reside nt o f Sinajana w ho has at
T h e re is no w ay he is going to h u rt m e again.’
least one fo rm e r B a n d ito cousin, the b u rly 28-
And he came up to me, he to o k o f f his pants, he
year-old is no stra n g e r to defending him self. On
bent over, spread his cheeks, and he started
one occasion, he was accosted by tw o men; "As
spanking them and asking i f I w anted to fu c k
m y a tte n tio n w as take n by one guy, the oth er
him. I rvas h id in g the w ire belrind m yse lf and he
guy to o k o u t his pe nis and he pissed on me. He
goes, 'You w a nt to fu c k me, you w a n t to fu c k m y
was diT-ink o ff his b u tt. I ran in to the bathroom
ass?’ 1 said, ’No, b u t I ’m going to w h up yo u r ass.’
to w a sli o f f w hat 1 c o u ld hut 1 cou ld n’t change
And I to o k th a t w ire and I w hupped his as.s.
my clothes because I d id n ’t have an e.\tra set. ... 1 w e n t to cer­
“ I fe lt so em pow ered, 1 fe ll like , 'Yes! A in ’t no bo dy gonna
tain frien ds to talk, and they tried to calm me do w n . When I
me.ss w ith me no m ore .” ' .At the same tim e, lie fe lt h u m ilia te d .
Page 126 ■'1 saved face but (m y frie n d s w h o wei'c
w ith me) «nll alw ays re m e m b e r tha t I
s e lf and fam ily.
“ 1 was alw ays to ld be in g gay -vi'as a
s in ,”
got pissed otr.’’
C atholic, b a ck then the pressures fell
says
M ik e
Cruz.
“ Now
the
(C a th o lic ) C h m ch seenrs a litt le m ore
GLASS CEILINGS
religion . T hey made i t h a rd e r fo r m e.”
So those w h o rem a in in th e Church,
1 mean in th e sense th a t no w
w h ethe r i t ’s C a th o lic o r another, often
gays, though, are the in d ire c t repercus­
th e y say h a rin g an o rie n ta tio n is n o t a
m ust m ake th e ir o w n te rm s w ith the re li­
sions on th e ir p ro fe s s io n a l lives. On a
sin, i t ’s acting o u t on it. B u t in general,
gion, c o n tin u in g to p a rtic ip a te in ser­
sm all scale, it c o u ld m ean lo s in g a jo b o r
fo r me, grow’in g up as C h am o ru and
vices and fu n c tio n s w h ile re m a in in g
M ore insidious th a ir o v e rt a tta cks on
le nie nt,
un de r those tw o categories: fa m ily and
a prom otion i f e m p lo yers f in d o u t — in
fact, some o f those in te rv ie w e d declined
to name the ir place o f w o r k f o r fear o f
re tiib u tio n . On a la rg e r scale, i t has
meant the s id e tra c k in g o f a p o litic a l
ciireer.
“1 ran fo r o ffic e in th e L e g is la tu re 78,
‘SO, ‘82 and I'm sure th a t a g o o d p a rt o f
the reason th a t I lo s t w as because i t was
no secret th a t I am gay,” says Judge Cruz.
"It wasn’t th a t I la cke d th e c a p a b ilitie s to
I
I
%
*4^
I
be able to serve in th a t ca p a c ity ; I had
die education, the tra in in g a n d th e expe­
rience to m ake w h a t I th o u g h t w o u ld
have been a good le gislator. B u t I th in k a
loi (if the pe op le d id n ’t th in k 1 w as se ri­
ous.
■‘The ju d ic ia ry was never in m y career
jilans. this was ju s t s o m e th in g th a t came
along and th e n w hen I g o t on the bench
I reasly like d i t ... So Tm e ryo yin g it, b u t
1 retire in fo u r yeare. ... I ’m s t ill lo o kin g
to sec w h ethe r o r n o t I w a n t to com plete
the c areer path th a t I set o u t f o r m yself
when I came b a ck (fro m th e States). Td
like lo be elected. I hope th is disclosure
doe.sn’t u n d e rm in e it to o
greatly. It
undoubtedly w ill cost a co u p le thousand
o f I'otes ... . B ut I d o n 't b e lie ve th a t I ’m
an Idiot, and I believe th a t I have somethhig to o ffe r.”
RELIGION ON M Y TERMS
T urning fro m the p h ysica l to the s p ir­
itua l, hom osexuals here also face the
prospect o f being rejected fro m an insti■u lio n as rev'ered as the fa m ily on Guam;
I he Church. W ith the m a jo rity o f local
fam ilies p ra cticin g C atholics, the Church
often becomes the th ird clo set d o o r after
Judge Cruz soys he w o u ld n 't hesitate to make his nine-year relationship w ith partner Johnny
Applegate legal, but adds tha t same-sex marriages a re n 't allowed under current low. "The
interesting thing would be to see how Guam would react if I came back w ith one from
Copenhagen or from Amsterdam, which does recognize them because Guam recognizes m ar­
riages that ore valid in the place of origin. So that would be the only w ay."
4 1
Page 127 w ith his life style.
“ true to themselves." T hose w h o w a nt to
pro blem s o f gay you th, w ith the focus o f
ii s
“ One th in g people n ris c o n s tn ic about
its e ffo ris ce n te rin g on a planned Gay
being C h iis tia n is I th in k God re a lly puts
and Lesbian Center, a c o m m u n ity center
you in a place to be w h a t y o u w ;m t to be
w h ere there is a s w itc h b o a rd , lik e a hot
lev
“ G oing in to the se n tin a ry w a s s o rt o f
and n o t to ju d g e others. IT ia t’s ho w I
line, Im b a t says.
eni
like an escape,” says T om D e lga do , w h o
to o k w h a t Tom shared w ith m e — ‘So?’
W rile alm ost all are happy to fin a lly see
spent a year as a se m in a ria n o n Guam.
Tom is his o w n pe rson and I d o n ’t judge
the group get stalled , there are fears that it
rot
“A p rie s t couldn’t be in v o lv e d (in a re la ­
him , 1 ju s t d o n ’t necessarily agree w ith
also has given ho m op hob ic people a target
sa;
tio n sh ip ), so I had no excu se to date a
h im all the tim e ,” Ray says. “ I th in k th a t’s
f o r harassment. “ I ’m scai'ed o f bringing
im
g irl o r a guy. I f I becam e a p rie s t. I’d be
w h y I ’m a lo t m ore open. I th in k if I
tliis up. Because Guam rig ht now, it’s
to ta lly neutral, I ju s t w o u ld n ’t date any­
d id n ’t believe in Jesus I th in k I'd be m ore
som ething tlia t’s not re a lly talked about.
body.
ju d g m e n ta l — ‘Hey, y o u ’re w e ird , stay
fu rth e r ser\'e in the C h u rc h as clergy’,
ho w e ver, som e tim es fin d
th e m se lve s
rejectin g their sexual id e n tity .
“ I wanted to get away, see i f I c o u ld
change my o rie n ta tio n . I d id n ’t w a n t to
aw ay fro m m e.” ’
BIRTH OF A MOVEMENT
be a heterosexual, I Just w a n te d to vie w
The level o f acceptance fro m the fa m ­
sexu ality in general as so m e th in g th a t
ily and being able to com e to term s w ith
co u ld n ’t happen."
one’s re lig io n here m ay be th e reason it ’s
In the end, he le ft the s e m in a ry o f his
ow n vo litio n . He had been op en ab ou t
taken so long fo r any s o rt o f gay m ove­
m e n t to coalesce.
his sexual o rie n ta tio n , and ra th e r than
The fo rm a tio n o f the G ay and Ltisbian
re je ctin g him o u trig h t, “ th e y d id n ’t say it
C o m m u n ity o f G uam in June has been
w as ■wrong, the y d id n ’t c o n d e m n .... I ju s t
w e lco m e d am ong m em b ers emd no n ­
pa cked up, ca lle d m y dad
m em bers as a gro up th a t has been long
and said,
in com ing. B o rn o f a desire to u n ify the
’Come p ic k m e u p .’”
lo c a l
co m m u n ity ra th e r than o f v io le n t in c i­
p e o p le have ta ke n the
dents such as the S to n e w a ll R io t th a t
b e st o f o th e r custo m s
spaw ned the n a tio n a l Gay L ib e ra tio n
and b e lie fs an d w o rked
F ronts, the GLG is fo c u s in g its firs t
i t in to th e c u ltu re , re li­
e ffo rts on p ro v id in g s u p p o rt and cou n­
g io n
seling to a d u lt hom osexuals, bisexuals
But
as
m any
a lso
s o u rc e
can
of
be th e
to le ra n ce
and transgenders.
to w a rd gays on Guam.
“I kne w several groups o f frien ds and
Those w h o assume re li­
I com bined the m to g e th e r w ith the m ain
gio n a u to m a tic a lly d is­
purpose o f u n ify in g th e m fir s t to get the
misses th e gay co m m u n i­
group started ,” says fo u n d e r Joe Im bat.
ty w o u ld be su rp rise d to
“T ltere was re a lly n o th in g here on Guam
h e a r th e
sam e values
dealing w ith gay pe op le — you co u ld go
being p re ach ed in favo r
o u t to the clu bs and m eet b u t the re was
o f tolerance.
re a lly no u n ity betw een the m ."
Ray
D e lg a d o ’s
co u sin ,
C h ris tia n
w hat
Tom
A n o th e r im p e tu s in fo rm in g the group
43-year-old
was his ob serva tions o f th e struggles o f
T o rre s,
b e lie v e s
his
gay teens in co m in g to te rm s w ith th e ir
v a lu e s
are
sexual id e n tity. “ I n o tic e d the young peo­
to
ple fo r some reason, I d id n ’t see any
e n a b le
h im
u n c o n d itio n a lly love his
relative despite the fact
th a t
he
d o e s n 't agree
d ire c tio n here on G tia m .”
"riic group, w h ic h cu iT e n tly has about
50 members, is p la n n in g to address the
l,irt
Page 128 il's iicanl of. hut nol talked a b o u t," say.s Im b a jj
H 't'iii, I thin k. ...
Its on tilt' iiid i\id u a l lc>x'l, Ih o u g li. ilia t t l w ^ j i t to educat.t' and
l.ircak down b a n ie rs m tiin ly takes place on
enemy.
kn o w who 1 w'as because they don't kn o w w lio I am. /Vnd if
And on
le\ el. at ietist one jje is o n has hfs o w n battle
i know w ho it vva.s. I wouJd icd
don't k n o w ^ n io o n e , o f course you're going to be scared o f
thenr. B u t i f you gel to kno w me, I’m really notlving to fcai’. And
0 ^
"I was at the cttmivaJ not to o long ago ag[d » fiie o n e th re w a
rock at me .just because lu y h o y fiie n d had’S ^ g f i ^ ' o i m d me,"
mo.st iik r ly you’re going to fin d out I ’m not any diffe re nt from
you.
‘'W e’re all human ... w lte th e r yo u ’re gay o r stixiight that really
says Young. "It was a lin y litt ic ro c k btit soniSsrte threw a ro ck at
s h o u ld n ’t m atter
my neck. iViid 1 was lo o k in g fo r Ilta1 person. I w o u iil have
hum an being.”
a human being .should be treated like a
Judge Cruz balances social life w ith professional and civic duties: "I party more than anybody else, but I also know that when it's o'clock in the morning. I've got to be out there and doing something that is contributing to the well-being of the entire community.”
Page 129 IN
T'HE SUPliiffiSFi^/SoURT OF GUAM
OFFICE 0 - THE
2001 FEB -
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S U P E B iO R C O U R l
2^':______________
BENCH WARRANT
MARSHAL OF THE SU PERIO R COURT OF GUAM OR
ANY PEACE O F F IC E R I N THE ISLAND OF GUAM:
YOU ARE HEREBY COMMANDED TO ARREST JOHNNY P APPLEGATE
tioae a d d re s s i s 1 2 3 MANGA STREET P I T I ___________________________
'a g a t n a ,
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1.
D R IV IN G W H IL E UNDER THE
IN F L U E N C E OF ALC O H O L
c a u s in g b o d il y
IN J U R Y
(A s a 3"'^ D e g r e e F e lo n y )
2.
D R IV IN G W H IL E UNDER THE
IN F L U E N C E OF ALC O H O L
c a u s i n g b o d i l y IN J U R Y
(A s a 3'-‘‘ D e g r e e F e lo n y )
UJ .g
lU
^
3.
D R IV IN G W H IL E UNDER THE
IN FLU E N C E OF ALCOHOL W IT H
(A s a M is d e m e a n o r )
4 .
RECKLESS D R IV IN G
P R O X IM A TE LY C A U S IN G
IN J U R Y
(A s a M is d e m e a n o r )
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D e fe n d a n t,
R ECKLESS D R IV IN G
(A s a P e t t y M is d e m e a n o r )
TNm TCTM ENT
THE S UPER IO R COURT OF GUAM GRAND JURY CHARGES:
F T R .q r CHARGE
on
r
nr
PPLEG R TE,
o p e ra te
d o in g
about th e
w h ile u n d e r t h e
and was i n
so,
S'" d a y
2000,
in
Guam,
I n f l u e n c e o f an a l c o h o l i c
d ro v e
caused b o d ily
H-AINDlCTVRPPI'E.WPPXjbf
M ay,
p h y s ic a l c o n t r o l
n e g lig e n tly
p r o x im a te ly
of
a
of
v e h ic le ,
in ju r y
to
JOHMHTt PROL
b e v e ra g e ,
a a ,n to r v e h i c l e
w h ic h
P e te r M.
act
P e re z ,
C¥IJiSlTI
of
in
and,
d id
when
n e g lig e n c e
v io la tio n
Page 131 .K
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A
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LA
P
P
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G
A
T
E
IiroiCTM
ENT
Page
GPD REPORT NO. 0 0 -0 7 3 3
o f

G .C .A .
§§
(c )
and
18110.
SECOND CHARGE
On
or
about
th e
APPLEG ATE,
w h ile
under
o p e ra te
d o in g
and
so,
was
d id
in
a n o th e r
p ru d e n t,
h a v in g
c o n d itio n
such
of
b o d ily
due
and
c o n tro l
fo r b id d e n
m o re
re g a rd
h ig h w a y
s a id
in ju r y
1 8 1 0 2 (c )
act

and
act
M.
or
APPLEG ATE,
w h ile
about
d id
1 8 1 0 2 (a )
(a s
G uam ,
a m o to r
th a t
th a n
speed
th e
in
d id
v e h ic le
and,
is ,
d e fe n d a n t
th e
w hen
r e a s o n a b le
such
n a tu re
n e g lig e n c e
PAUL
b e v e ra g e ,
was
of
JOHNNY
of
v e h ic le ,
th e
tr a ffic
upon
p r o x im a te ly
v io la tio n
and
of

c a u s in g
GCA
§§§
3320.
3'"'^ d a y
o p e ra te
and
in f lu e n c e
e n a c te d
in
a lc o h o lic
la w ,
and
P e re z ,
th e
u n d e r th e
of
th e
of
T H IR D
On
of
c lo s e ly
s u rfa c e
P e te r
20 0 0 ,
by
fo r
u n la w fu l
to
M ay,
in f lu e n c e
v e h ic le
th e
h ig h w a y ,
th
of
p h y s ic a l
an
fo llo w e d
3'^'^ d a y
of
was
of
CHARGE
M ay,
in
22,
in
p h y s ic a l
a lc o h o l,
on Ju n e
2000,
in
1993,
G uam ,
c o n tro l
v io la t io n
P u b lic
Law
JOHNNY PAUL
of
of
a

v e h ic le
G .C .A .
§
2 2 -2 0 ).
FOURTH CHARGE
On
or
about
APPLEGATE,
w a n to n
d id
d r iv e a
d is r e g a r d
d r iv in g
t h e 3"'^ d a y
fo r
p r o x im a te ly
v io la tio n
of
of
v e h ic le
th e
s a fe ty
caused
or
16 GCA § 9 1 0 7 ( a )
A P P LE G A T E ,
w a n to n
about
d id
d is r e g a r d
H; \ 1NCU CT\APPLE. WPt)\ j b f
t h e 3 “'‘^ d a y
d r iv e a
fo r
of
and
o f
v e h ic le
th e
upon a
b o d ily
F IF T H
On
M ay, 2 0 00 ,
in
G ua m , JOHNNY
h ig h w a y
p e rs o n s
in ju r y
and
to
in
a w illfu l
p ro p e rty ,
P e te r
PAUL
M.
and
and su ch
P e re z ,
in
(b ) .
CHARGE
M ay, 2 0 00 ,
upon a
sa fe ty
of
in
G uam , JOHNNY
h ig h w a y
in
p e rs o n s
and
PAUL
a w illfu l
and
p ro p e rty ,
in
Page 132 N N I PAUL APPLEGATE
GPD REPORT NO. 0 0 -0 7 3 3
IN
D
ICTM
EN
T
v io la tio n
D a te d
of
16 G . C . A .
th is
§ 9107(a).
19*^^ d a y o f
Septem ber,
JOHN F . T A R A N T IN O
A tto r n e y G e n e ra l
R O S E T T A SAN N IC O LA S ROSS
A s s is t a n t A tto r n e y G e n e ra l
H :\IN D IC T \A P P L E .W P C i\jb f
Page
2000.
A TRUE B IL L
FOREM AN
OF
THE
GRAND
JU R Y
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Page 134 /\Q j
G L P rK C J


OF
TEB I
IN TH E SUPERIOR COURT OF G U A M '

K1 2^ “
Ai RHBO M B ( > » C liif f t OF COUFl-

)
O D ILIA B A U T IS T A , et al.
)
)
) DECISION AN D ORDER ON
) DEFENDANT’ S M O TIO N FOR
) SU M M AR Y JUDGEMENT
P la in tiff,

vs.
GERALD S.A. PEREZ, et al..
)
_)
Defendant,

____________
C IV IL C A S E N O .C V 1848-
IN TR O D U C TIO N

On M ay 17, 2002 the Defendant file d this m otion for Summary Judgement The P la in tiff
;lied an opposition to the m otion on June 20, 2002. The reply to the opposition was file d on June
26,2002. V incent I ^ n Guerrero represents the Defendant P hilip Torres represents the
' ^laintifF. This m otion has come before the Honorable Alberto Lamorena III, Presiding Judge, on

uly 3, 2002.

BACKGROUND
P la in tiff are members o f the Defined Benefit Plan (DB) established in 1951. Ms. Bautista
is a current retiree where as M r. Guthrie is an inactive member. Membership in this plan was
mandatory fo r a ll Government o f Guam employees u n til October 1, 1995, when the members
were given a choice o f retirement plans. These employees were required to contribute a
percentage o f their base pay toward the retirem ent plan. 4 GCA §8136. The plan provides fo r a
fixed, determinable, defined benefit, usually paid as an annuity. The form ula to determine the
benefit w hich reflected an employee’ s earnings and years o f service. The government’s cost to
provide this defined benefit is whatever was necessary to provide that benefit. The cost to the
government could be reduced by investment returns, the costs were id tim a td y ^ e respjorisibility
o f the Government. See 4 GCA §8168.
-1-
FEB
r n /C D
-e .
Page 135
In the 1990’ s, the 13^ Guam Legislature created the Defined Contribution Retirem ent

System (DCRS), w h ic h became mandatory fo r substantially all government employees, hired on

or after October 1, 1995, See 4 GCA Chp.8 A it.2 . This plan did not allow a fixed benefit fo r the

employees. The employees were to make a five percent defined contribution o f their salary. The

primary variable o f th is plan is the ultim ate benefit, w hich varies depending on such factors such

as the level o f contribution, the age o f the employees, and the performance o f the investm ent.

Since 1978 benefits including supplemental aim uity benefits were mandated and fu lly

funded b y the General Fund surpluses on an annual or semi-annual basis. Since 1993 these

amounts equaled $4,238.00. The Legislature at times also allowed fo r the ^ p ro p ria tio n o f a
lump sum cost o f liv in g allowance (CO LA).

16.
D ISC USSIO N
A com plaint should not be dismissed unless it appears beyond doubt that the p la in tiffs
can prove no set o f facts in support o f their claim , w hich would entitle them to re lie f. Johnson v.
Knowles, 113 F.3d 1114,1117 (9*^ Cir.1997). When review ing a dismissal fo r failure to state a
claim pursuant to R ule 12(b)(6) all allegations o f m aterial fact are taken as trae and constmed in

the l i ^ t most favorable to the non-moving party. A lliedSienal. Inc, v. C ity o f Phoenix, 182 F.3d
692 (9 * C ir. 1999). See Jensen v. C ity o f Oxnard, 145 F.3d 1078 (9*^ Cir.1998), c e rt Denied,
119 S.Q . 540,142 L.Ed.2d 449 (1998). U nlikelihood o f success does not, by itse lf, ju s tify
dismissal. A lliedS ignal. Inc, v. C ity o f Phoenix, supra, 182 F.3d at 698. Furthermore, the court
when ru lin g on a m otion to dismiss must accept well-pleaded factual allegations as trae, and may
disregard conclusory allegations o f law and unwarranted inferences. Pareto v, FD IC , 139 F.3d
696,699 (9'‘* C ir. 1998). Dismissal w ithout leave to amend is improper unless it is clear that the
complaint could not be saved by any amendment. Chang v. Chen, 80 F.3d 1293, 1296 (9*** C ir.
1996). A ‘judgem ent on the pleadings is properly granted when, taking a ll the allegations in the

pleading as trae, the m oving party is entitled to judgement as a matter o f law .” Ada v. Guam

Telephone A uthority, 1999 Guam 10 (Apr, 3 0 ,1999)(Rule 12(c))
-2-
Page 136
The issue presented by the Defendants in their m otion to dismiss is the legislation

requiring the Trustees to use funds held in trust fo r the Government Retirement Fund D efined
Benefit Plan to pay certain retired government workers additional benefit amounts unrelated to

their age, length o f service, or the dollar amount o f their pensions. Legislation was enacted to

create temporary vested benefits funded by the Retirement Fund. This was done when there was

sufficient funds to p a y the benefits plus the “ pick- up” . The appropriation this year is

insufficient to fund the entire package fo r the Defined Benefit Plan, (DB Plan), at th e ir actual

contribution rate. M any agencies have represented to the Board that they w ill not be able to fund

the additional benefits as mandated.

The Retirem ent Fund is currently using funds held h i trust fo r the benefit o f the DP plan

beneficiaries to pay these additional benefits. The P laintiffe assert that the trustees must refuse to
pay the additional benefits because the statutory contribution rate falls below the actual

contribution rate. A re the Trustees to fo llo w the statue w ithout question and regardless o f the

funding source? O r is the Board authorized to refuse to im plem ent these additional benefits i f

the implementation w ould adversely im pair the government’ s a b ility to provide retirem ent,

disability and survivor annuities. “ The member o f the Board o f Trustees stand in a fiduciary
relationship to the beneficiaries o f the Retirement Fund in regard to the managemmit o f the

Fund.” 4 GCA §8139.1(a). “ The members o f the Board o f Trustees shall discharge their duties

w ith respect to the management o f the Retirement Fund solely in the interest o f the members and

beneficiaries o f the Fund and fo r exclusive purpose o f Providing benefits to the m em bm and

beneficiaries and defraying reasonable expenses o f adm inistering the Fimd.” 4 GCA §8139.1(b).
These additional benefit are also paid out to the members in the D B plan and are the subject o f
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Page 137
this suit as to w hether they are proper beneficiaries under the statute. In October 1995 the

Legislature established a Defined C ontribution Retirement System (DCRS) w hich became

mandatory fo r a ll incom ing employees o f the government. In this plan the employers and the
employees made fibred, defined contribution equaling 5% o f the employee’ s earnings. 4 GCA

§8209. The prim a ry variable in this plan depends on factors such as the level o f contributions,

the employee’s age at entry and at retirem ent, and the performance o f the investments.

Since 1978 many o f the benefits including supplemental aim uity benefits were mandated

and fu lly funded b y an appropriation fo r the General Fund. Subsequent years have seen the
annuities lim ite d to those retiring prior to October 1,1995. The Le^slature also had funded the
COLA firom the General Fund.
In 1999, the legislature could not fund these benefits w ith the General Fund. But,
recognizing that the retirees have “ come to depend on the annual supplemental annuity benefit

and the cost o f H ving adjustment payments.” Pub.L.No.25-72:2(a). Therefore, “ in order to give
fu ll effect to the underlying purposes o f providing supplemental annuity benefits and cost o f

liv in g allowances to preserve the purchasing power o f retirees and beneficiaries during this

period o f economic austerity,” see Id.. The Legislature arrived at a temporary alternative funding

mechanism. They decided that the funding w ould be amortized, paid in installments, over a

twenty-year period. The pertinent language in the statue is:
To be more a prudent means to realize cost sa vin g , rather than extending the am ortization o f the
non-funded lia b ility from its current fifteen year period to no less than th irty years, or having the
Government o f Guam Retirement Fund shoulder the burden o f payment o f the supplemental
annuity benefits and the cost o f liv in g allowances o u trig h t Pub.L.No.23-42;IV:2(a).
As to the health, dental and life insurance premiums and Medicare reimbursement, the
Retirement Fund agreed to the approach taken by the Legislature to treat such benefits as “ fu lly
funded by amounts already remitted by General Frmd appropriation on behalf o f line agency
-4-
Page 138
employers and b y autonomous agency employers during the period from October 1,through February 28, 1999.” Pub.L.No.25-72;IV:2(b).

The Trustees have agreed to the “ pick- up” under two condition:
1)
The Legislature w ould continue to F u lly Fund Existing Benefit Obligations. This was

needed as to not jeopardize the fiscal integrity o f the Retiranent Fund, “ i f the benefits it provides

to its members are not reasonably related and restricted to the resources from w hich said benefits

m aybepaid. 4 G C A §8101.1. The Retirement Fund agreed to the “ p ic k -u p ” o f the new

benefits on the basis that the existing benefits would be fimded at the fioU actuarial rate
established by the Board.

2)

payment o f the “ new” picked- up” b a ie fits on fim ding o f those benefits at the fu ll actuarial rate
The Legislature would fu lly fim d new benefit obligations. The Board conditioned

established by the Board.
These two requirements were in itia lly met and were supposed to revert back to the General
Fund to carry out. C urrently the present deteriorating economy caused the legislature to extend

the “ pick up” date to September 30,2002. The Budget Law identified an increase by 1.2019%

from the p rio r employer contribution rate o f 18.6% fo r a total o f 19.8019% fo r lin e agencies and
at least 21% fo r autonomoxjs agencies,. However the current statutory rate fa lls short o f the
actual fu ll actuarial rate needed to support current and future obfigations: 26.07% fo r line

agencies and 25.14% fo r autonomous agencies, fo r fiscal year 2002. Basically the Defendants

are stating that there is insufficient funding fo r the Retirement Fund to support its existing

benefit obligations, much less to undertake supporting new temporary benefits. The General

Fund is creating a greater debt to the Retirement Fund by not only paying the contributions back
-5-
Page 139
but by paying back at the actuarial rate during the amortization period. The a b ility o f the
members o f the D B plan is impaired on their planning fo r retirement.^

The Trustees w ant to know whether the class o f persons eligible for supplemental benefits
and C O LA are the beneficiaries to whom the Trustees owe exclusive abeyance. The Trustees

seek as w e ll a ru lin g as to whether (a) the provision o f retirement, disability, and survivor

annuities to D B Plan members and beneficiaries ultim ately remains a government obligation,

such that the Retirem ent Fimd does not have discretion to challenge any legislation that may

impair the government’ s a b ility to continue to provide such benefits, and therefore m ust pay a ll

benefits under the D B Plan regardless o f actual tunding, or alternatively (b) the Retirement Fund,

as required b y its duties as a fiduciary, take steps , in its reasonable discretion, to im plem ent the

DB Plan statute in a manner that w ill not severely or adversely im pair the government’s a b ility to

provide retirem ent, d isability and survivor aimuities to D B Plan members and beneficiaries.
15_
Rule 56 o f the GRCP states that summary judgm ent:
Shall be granted fo rth w ith i f the pleadings, depositions, answers to interrogatories, and
admissions on file , together w ith affidavits, i f any, show that there is no genuine issue as to any
material fact and that the m oving party is entitled to judgm ent as a matter o f law.
The Defendant cites to AndCTson v. Liberty Lobby. Inc.. 477 U.S. 242, 249-5-, 106 S .C t
2505, 91 L.Ed.2d 202 (1986), “ There is no issue fo r tria l imless there is sufficient evidence
favoring the nonm oving party fo r a trier o f fact to return a verdict fo r a p a rty... I f the evidence is

merely colorable... or is no significantly probative... summary judgement may be granted.” The

Defendant also-argiies-thattin-cases-such-as-these the court can use a more aggressive manner in

granting a Sxunmary Judgment. “ Where the ultim ate fact in dispute is destined fo r decision by

the court rather than b y a ju ry , there is no reason w hy the court and the parties should go through
the m otion o f a tria l i f the court w ill eventually end up deciding on the same record.”
-6-
Page 140
Transworld A irlin e s . Inc, v. American Coupon Exchange. 913 F.2d 676, 684 (9 * C ir. 1990) In a
non- ju ry tria l case, a court recognizing that a tria l would not enhance its a b ility to draw

inferences and conclusion, may in such situations, where evidentiary facts are otherwise not

disputed, properly grant am otion fo r summary judgm ent Coats & C larlc755 F.2d 1509 (11th
Cir.1985); Nunez. 572 F.2d 1124 (5th C ir. 1978).

Legal Arguments
A ) The Defendant asks fo r an interpretation o f the law as the facts are undisputed. They

cite to G. Bogert & Bogert. Law o f Trusts and Trustees § 559, pp. 169-71 (2d rev. ed. 1980) (the

court has the power to instruct and advise trustees concerning doubts arising from am biguity or

uncertainty o f the la w ); Alaska State Emnlovees Assoc, v. Alaska Public Employees Assoc..
P.2d 451, 454 (Alaska 1991) (recognizing equitable jurisdiction o f courts over trusts).

The Trustees request that the Court fin d that the Fund has no discretion to challenge the
legislation requiring them to pay the benefits regardless o f the funding source. A lternatively the

court can in s tru c t the trustees , that as a requirement o f their fiduciary duties, m ay take steps to

implement the DB plan statute in a manner that w ill not severely or adversely im pair the

government’ s a b ility to provide the retirem ent, disability, and survivor annuities to D B plan
members and beneficiaries, such as:
1.
refusing to pay new benefits i f unfunded to imder funded pursuant to actuarial standards;

2.
challenging legislation o f amendments to the DB Plan that w ould increase benefit levels,

expandm iinim um -eligibiiity Tequirernents,- reduce or-delay funding o f contributions, or otherwise

im pair the a M ity o f the govemmo it to continue to provide retirement, d is a b ility , and survivor
benefits to members and beneficiaries;
-7-
Page 141
3.
detennining, in its reasonable discretion, the p rio rity fo r payment o f benefits among the
various classes o f beneficiaries under circumstances o f unfunded or under fimded em ployer

contributions; and
4.
declining to process retirement, d is a b ility , or survivor benefit applications related to

employment at agencies, w hich have not made employer contributions at the statutory

contribution rate (th is includes unfunded, underfunded, and late contributions).

B. The Government o f Guam is U ltim ately Responsible to Fimd the D B Plan benefit

Obligations.
GCA §8168 states : “ It is the intention o f this Chapter that the payment o f the required
contributions by the Government shall be an obligation o f the government and a ll allowances,
annuities , benefits, and administration, custodial, and audit fees shall be paid by the Fund.” The

Defendant uses th is statute to show that the responsibility to pay fo r aimuities and benefits are
the responsibility o f the Government. This would mean that the Retirement Fund does not have

any discretion to challenge the legislation ordering them to pay the aimuities and benefits,

regardl ess o f the funding source.

C. Payments o f Tem porary “ Pick Up” Benefits C onflicts w ith the Legislature’s 1995 Closure o f
the DB Plan Benefits.
The Defendant states that the Budget Law conflicts w ith legislature’s intent and purpose

for creating the DCRS. The Legislature never added permanent benefits. The relevant portion

of-the-Budget Law-shows an intent-fer-the Retirement-Fund to “ p icku p ”, the temporary diverted

General Fund obligation. The Law also failed to ide n tify an adequate funding source to keep the
Retirement Fxmd funded at the fu ll actuarial rate to preserve the rights o f members to continued
payment o f current and future obligations.
-8-
Page 142
The Retirem ent Fund must balance the interests o f the members o f the DB Plan as a
whole, over the lo n g term, and remain im partial. The payment o f the temporary benefits, w ould

only favor one class o f beneficiaries and disfavor others, by substantially im pairing the D B Plan
member’ s assurances that they w ill ultim ately receive the retirement benefits to w hich they are

entitled.

GCA §3215 states; “ Retirement contributions o f both the employer and the employee
to a retirement fund or plan, including the Government o f Guam retirement Fund, shall be the
property o f the retirem ent fund or plan held in trust fo r the benefit o f the members o f the plan or
fund, and the em ployer retains no rights thereto.”

The Defendant sees this as once the funds are deposited into the retirement fund the
contributions are thus held in trust for the benefits o f its members. These funds are not available
for the Legislature to use fo r any other purpose except fo r w hich it was contributed for. See

Valdes. 139 Ca.App.3d at 788, 189 Cal.Rptr. at 224 (holding that contributions to a public

employees’ retirem ent plan, including employer’s contribution, became part o f the corpus o f the

trust and were not available as state funds).

The Budget Law requires the Retirement Fund to “ pick up” the payment o f tem porary
IS
benefits, to w hich employees have never contributed., at the expense o f dim inishing the

Retirement Fund’s a b ility to provide current and future permanent, vested benefits to w hich

employees have contributed. There is a co n flict when the legislature expresses an intent to

maintain the fiscal inte grity o f the DB plan then enacts legislation that would substantially im pair

the Plan.
D)

Retirees’ Contract Rights

Payment o f Temporary “ pick up’ Benefits and substantially im pair employees’ and
The Defendant argues that the Organic A c t o f Guam specifically provides that “ no b ill o f

attainder, ex post facto law, or law im pairing the obligation o f contracts shall be enacted.”
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Page 143
U.S.C. 1421b0. In Kern v. C ity o f Long Beach. 29 Ca..2d 848, 851-52, 179 P.2d 799, Ca,.1947), the C alifo rn ia Supreme Court stated, “ Sine a pension is an integral portion o f

contemplated com pensation.,. it carmot be destroyed w ithout im pairing a contractual
obligatiorL” The m odem trend is that the public employee’s rights under a public pension or

retirement statute are contract rights. See H ow ell v. Anne Arundel County. 14 F.Supp.2d 752,

754 (D.M d, 1998)(in most states, public employee pension plans embody contractual rights and
S
duties between an employee and the government as employer). This is also prohibited by the \

Organic A ct o f Guam.

The Defendant then cited cases that show that courts consistently refused to im plem ent

legislation w hich attempted to divert assets from pension and retirem ent funds to general funds.

Such a case was Valdes v. Cory, 39 Cal.App. 3d 773, 189 Cal. Rptr. 212 (Cal. C t A pp. 1983),

when the legislature enacted legislation to suspend funding o f PERS by the governm ent The
statute prohibited the payment o f employer contributions, from the general fim d to the PERS, fo r

the months o f A p ril- June 1982. Consolidated mandamus proceedings were brought by PERS

members and employer organizations challenging the va lid ity o f the statute as an

rmconstitutional im pairm ent o f contract. Had the Legislature appropriated the PERS trust funds
fo r purposes unrelated to the benefit o f PERS members, then the court w ould have had no
d iffic u lty in concluding that the legislation m odified the vested interests o f the PERS mranbers.

Valdes.139 Cal.App.3d at 78,189 Cal. Rptr. A t 224. The court observed that even i f the

Legjslatoe.didm Qt .directlyjaidJheEERS. fiind,.and.mereJy directed “ that funds held in tm st fo r

the exclusive benefit o f members and beneficiaries o f PERS be used to satisfy the state’s

contractual obligations to make m onthly contributions to the retirem ent fund so that monies
-10-
Page 144
regularly appropriated fo r that purpose can redirected to balance the state budget, the effect is
precisely the same, i.e., vested rights o f the PERS members are im paired.”

The present case has the Legislature attempting to “ raid” the retirement ftm d in the same
manner as described above. This p ick up o f obligations is thus a g ift o f the gnverpmpnf This

d iv is io n o f ftinds increases the Retirement’s Fxmd’s unfunded accrued actuarial lia b ility , thus

im pairing the soundness o f the fund. This diversion may be against the Organic A c t o f Guam.
The P la in tiffs contend that the Defendants request fo r an “ instruction’ is the inappropriate

re lie f The instruction would not be binding on the Defendants, and w ould not prevent the

Defendants from continuing to pay the C O LA and Supplemental Annuities out o f the fund unless

the court decided that such payment and legislation are inorganic as an im pairm ent o f the

member’ s contractual rights. The Defendants cite to First National Bank o f Chicago v.

Com ptroller, 956 F.2d 1360, 1364 (1992), w hich stated its advisory opinion, “ bank free to go

ahead w ith its restructuring and face consequences o f its defiance.”
The P la in tiff in this case states on their opposition reply, that they do not seek an instruction
but rather seeks judgement, as a m atter o f law, and ju d icia l determination concerning the rights
and duties fo r the parties. The party states many concurring cases that support the idea that an

m teipretation o f a statute is a proper matter fo r declaratory relief.
Declaratory R e lie f as stated in 7 GCA §26801 provides:
A n y person interested im der a deed, w ill, or other w ritten
instrument, or under a contract, or who desires a declaration o f his
rights or duties w ith respect to another, or in respect to, in, over, or
upon property, or w ith respect to the location o f the natural channel
o f water course, may, in cases o f actual controversy relating to the
legal rights and duties o f the respective parties, bring an action in
the court having jurisd ictio n fo r a declaration o f his rights and
duties in the premises, including a determination o f any question o f
instruction or va lid ity arising under such instrument or contract.
He may ask fo r a declaration o f rights or duties, either alone or
-n-
Page 145
w ith re lie f; and the court may make a binding declaration o f such
rights or duties , whether or not further re lie f is or could be claimed
at the tim e. The declaration may be either affirm ative or negative
in fo rm and effect. Such declaration shall have the force o f fin a l
judgem ent Such declaration may be had before there has been any
breach o f the obligation in respect to which said declaration is
sought.

In the Defendant’s reply, to the P la in tiffs opposition, they state, “ the Retirement Fund’s

motion does not seek non-binding “ instructions” from the Court. Rather the R etirem ait Fund’ s

M otion seeks judgm ent, as a matter o f law, and jud icial determination concerning the rights and

duties o f the parties under the Budget Law and DB Plan statute.”
The Court upon review ing the M otions and Opposition see that the parties are requesting
the same type o f declaratory relief, a Declaratory Judgement. This Court further finds that the

Retirement Fund’s request fo r re lie f is consistent w ith its prayer fo r re lie f as set fo rth in its

Answer to F irst Amended Complaint fo r Declaratory and Injunctive R e lie f filed on January 10,

2002, specifically, “ that the court determine whether the applicable legislation is va lid under the

contract clause o f the Organic A ct.”

G C A §8139.1 Fiduciary Duties states: (a) The members o f the Board o f Trustees stand in

a fiduciary relationship to the beneficiaries o f the Retirement Fund in regard to the management

o f the Fund.

(b)
The members o f the Board o f Trustees shall discharge their duties w ith respect to the

management o f the Retirement Fund solely in the iaterest o f the members and

beneficiaries...The members o f the Board o f Trustees shall discharge their duties w ith the care,

s k ill, prudence and diligence under the circmnstances then prevailing that a prudent person

acting in a lik e capacity and fam iliar w ith such matters would use in the conduct o f an enterprise

o f a like character and w ith lik e aims.
-12-
Page 146
The Defendant’ s M otion cites 22 GCA §3215 in part:
Retirement contributions o f both the employer and employee to a retirement fim d, including the
Government o f Guam Retirem ent Fund, shall be the property o f the retirem ent fund or plan held
in trust fo r the benefit o f the members o f the plan or fim d, and the employer retains no rights.

This means that the contributions must be held on trust fo r the benefit o f its members.

The Court agrees w ith the Valdes, 139 Cal.App.3d at 788 189 Cal.Rptr. at 224 (holding that

contributions to a public employee’ s retirem ent plan, including employer’ s contribution, became
part o f the corpus o f the trust and were not available as state funds). These funds are held in

trust fo r the members o f the fund. The employees have earned these funds, so any purpose o f

which they are used w hich is not the puppies o f the fund is an adverse m odification o f the rights

o f the participants. The Budget B ills has required die Retirement fund to “ pick up” the payments

o f temporary benefits o f w hich no employee has ever contributed. Thus the effect is the

dim inishing o f the Fund to the determent o f all who have contributed.
The Defendant’ s M otion also cites to the Organic A ct o f Guam, w hich states, “ no b ill o f

attainder, ex post facto law, or law im pairing the obligation o f contracts shall be enacted.”
U.S.C. 1421 (b)(j). This language recognizes that public employment contains certain

obligations, which are protected b y the Contract Clause, including the rig h t to the payment o f

pensions and retirem ent benefits. Thus the m odifications o f statutes that change the provision o f

the existing retirement fund jeopardizes the rights o f the Retirement Fund beneficiaries. This is

impermissible.

The Court finds that4he-Board o f Trustees o f the Retirement Fund must fo llo w their

fiduciary duties as set forth in the Organic A ct o f Guam. The Board must treat the Fund in a
manner that w ill not im pair the government’ s a b ility to provide permanent, d is a b ility , and
survivor benefits to DB Plan members. The Board o f Trustees is hereby ordered to:
-13-
Page 147
1. refuse to pay new benefits i f unfunded or underfunded pursuant to actuarial standards;
2. challenge legislation amending the D B Plan that would increase benefit levels, expand

minimum e lig ib ility requirements, reduce or delay funding o f contributions, otherwise im pair

the a b ility o f the government to provide retirement, disability, and survivor benefits to
members and beneficiaries;
3. determine, in its reasonable discretioja, the p rio rity fo r payment o f benefits among the various
classes o f beneficiaries im der circumstances o f unfunded or underfunded employer


contributions; and
4. decline to process retirement, d is a b ility , or survivor benefit appUcations related to
employment at agencies w hich have not made employer contributions at the statutory
contribution rate (this includes unfunded, underfunded, and late contributions).

C O N C LU SIO N
Based on the foregoing, the Defendant’s M otion fo r Summary Judgement is GRANTED.
Dated this 18th day o f February,
AlbertcrQ_UaHtorena III
Presiding Judge
Superior Court o f Guam

fr-14-
! 0 ?|,^i
Page 148 .
^ c ^ ^ ^ E I V E D
S U P F in O R C Q I n r
COURT OF G U AM

J'JL -
)
O D ILIA B A U T IS T A , et a l.,

)
O r C iG ;K '^
) DECISION AN D O R D EEf^^N TLA IN TIFF’ S
) M OTION FOR SU M M AR Y JUDGEMENT
P la in tiff,
vs.

A!j II:
C IV IL C A S E N O .C V 1848-
Government o f Guam Retirement Fund, et al., )
)
Defendant,_________________ )

g
IN T R O D U C T IO N

On M ay 16, 2003, the Defendant filed this M otion to C la rify C ourt’s Decision and Order

The P la in tiff file d an Opposition on M ay 28, 2003. The M otion was heard before the Honorable
Alberto C. Lamorena III, Presiding Judge, on June 2, 2003, and the Court took the matter under

advisement.

BAC KG R O U N D

This Court issued its Decision and Order on the Defendant’s M otion fo r Summary
Judgement on February 18,2003. The Defendant now comes before this court fo r a clarification

regarding its Decision and Order, The Defendant asked the Attorney General for an opinion as

to whether the Retirement Fund must accept retirement applications firom employees whose

employer were in arrears w ith their contributions, so long as the employee and employer’ s

retirement contributions were current.
On March 6,2003 the Attorney General released its opinion which concluded that the

Retirement Fund should permit those members who are attempting to retire, to retire, after their

contributions, interest and any penalties are paid by the department o r agency.

The request for clarification concerns item #4 in the Decision w hich states that the Board

was to decline to process retirement, disability, or survivor benefit applications related to
vi I i l I i
-1-
Page 149
employment at agencies w hich have not made employer contributions at the statutory

contribution rate (this includes unfunded, imderfunded, and late contributions).

The Defendant has requested fo r the discretion to decline applications fo r retirement,
disability, and survivor annuities where employer agencies had not made employer contributions

at the statutory rate. This would allow consideration o f applications on a case b y case basis. The

Defendant seeks to clarify whether it must decline to process applications fo r retirem ent i f an

employer agency is in arrears fo r aggregate employer contributions at the statutory rate. Thus all

applications from an employer in arrears would have to be declined.
The Defendant points out that the acceptance o f applications on an individual fiinded
basis m ay lead agencies to fund their contributions on a piecemeal basis. This w ill relieve
pressure to the employer to make contributions at the statutory rate on an aggregate basis which

may allow agencies to balance their budgets b y sim ply funding their contributions on an
individual basis whenever an employee wants to retires. This would place the Fund in a position

where it may not have the funds to invest and allow the Retirement Fund to grow and prosper

and thus jeopardize the v ia b ility o f the fund.

Y e t the individual applicant, upon declining o f the application, w ill be harmed by not

being allowed to receive retirement benefits due to the lack o f contributions by the employer.

The Defendant asks for one o f two possible clarifications: (1) to allow the processing o f

applications for retirement only in cases where an employer has remitted a ll employee

contributions, and all employer contributions at the apphcable statutory rates o f 18%; (2) decline

to process retirement applications only i f employer contributions in the aggregate are in arrears
and allow the Board to process those applications for retirement that are submitted no later than
fo rty five (45) days after the Order, so long as all employer and employee contributions, on an
-2-
Page 150
individual basis, are received by the Retirement Fund no later than fo rty five (45) days after the

Court’ s Order.

The Defendant also requests that the clarification extend to item #1 o f the Decision, the
refusing to pay new benefits i f unfunded or underfunded pursuant to actuarial standards. The

defendant w ould lik e a clarification as to what benefits these are applicable to.
The P la in tiff opposes any clarification to the Order and would like the Decision to stand

as is. The verbs used are “ refuse” in item #1 and “ decline” in item #4. The P la in tiff argues that

the Defendant is not asking fo r a clarification but actually a reconsideration o f the decision
which is not allowed under Rule 52 o f the Guam Rules o f C iv il Procedure. The P la in tiff states

that i f the Board was allowed to use its “ discretion” in the application process then the Board

would be violating their fiduciary duty to the remaining members o f the fund.

DISCUSSION
The Court now issues its Decision on the M otion for C larification. The Court finds that

there is no need to reconsider or to further cla rify its prior decision o f February 18, 2003. The

Board was ordered, in very specific terms, to:

(1) refuse to pay new benefits i f unfunded or underfunded pursuant to actuarial

standards;
(2) challenge legislation amending the DB Plan that would increase benefits levels,

expand minim um e lig ib ility requirements, reduce or delay funding o f contributions,

otherwise im pair the ability o f the government to provide retirement, disability, and

survivor benefits to members and beneficiaries;

-3-
Page 151
(3) determine, in its discretion, the p rio rity for payment o f benefits among the various
classes o f beneficiaries under circumstances o f unfunded or underfunded employer

contributions; and
(4) decline to process retirement, disability, or survivor benefit applications related to

employment at agencies, which have not made employer contributions the statutory

contribution rate (this includes unfunded, underfunded, and late contributions).

I f the Court would agree w ith the Defendant and cla rify the present order, it would be

actually changing the original intent o f the Order. This is not a M otion fo r Reconsideration and

would thus not be allowed under the Rules. The Court agrees that the February 18, 2003 Ordo-

is proper and no clarification is needed.

C O N C LU SIO N
Based on the foregoing, the Defendant’s M otion fo r C larification is D E N IE D .
Dated this 2nd day o f July,

A lb erto C,\Lamojpena ITT
Presiding Juc
Superior Court o f Guam

-4-
Page 152 COMMITTEE REPORT
NOMINATION OF F. PHILLIP CARBULLIDO
AS AN ASSOCIATE JUSTICE TO THE
SUPREME COURT OF GUAM.
John Camacho Salas, Chairman
Committee on Judiciary, Public Safety, Consumer
Protection and Human Resources Development
M i n a ’ B ente S ingko N a L ih e s la tu ra n G u a h a n
EXHIBIT
Page 153 C O M M IT T E E R E P O R T
Confirmation o f F. Philip Carbullido, ESQ.
full-time Juslice, Guam Supreme Court
September 13, I.
N o m in a t io n
,
on
« ^
Carbullido. ESQ. was nominated by G overnor Carl T C Gnitprr ^ 7 in
Court o f Guam. This nomination Was transmitted
r
Gudhan July 12. 2000 and referred by C o m iS «
on Rules to the Committee on Judiciary on July 17, 2000.
II.
^
^
P u b lic C o n fir m a tio n H e a rin g
pxx ■
hearing on the nomination was held on August 30,.2000 at 6
P .M . in the Guam Legislature Session Hall. In attendance were:
John C. Salas, Chairman
Joanne M . S. Brown, Member
M ark Forbes. Member
Alberto “Tony “ Lamorena V, Member
Vice Speaker Larry F. Kasperbauer, Guest
Eddie Baza Calvo, Guest
KaJeo S. Moylan, Vice C hairm an
Frank B . Aguon, Jr., M em ber
C^lotta A. Leon Gucafero, M em ber
Vicente “Ben” Pangeljnan, Guest
Simon A. Sanchez II, Guest
Eulogio "Eloy” C. Bermudes, Guest
P u b lic media notices and the agenda fo r this
m a y be seen in A p p e n d ix 1.
c o n f ir m a tio n h e a rin g
A.
P u b lic T es tim o n y
Chairman Salas proposed the “privilege o f the flood’ be extended to 7 former
.senators and Congressman Under^vood. There were no objections from the panel and
former colleagues were invited to the witness table in groups o f four:
R. Underwood, J. T . San Agustin, P, Lujan, K. B. Aguon
J. Ping Duenas, F. Camacho, D. Shimizu, G. Bamba
J. Rivera, J. Aguon, J. Leon Guerrero
A ll former colleagues testified in support o f Attorney Carbullido and encouraged the
comrmttee to confirm as soon as possible to correct the a shortage of justices on the ^
Supreme Court bench.
■'
f
F o m e r Senator L Pmg Duenas presented the committee with petitions o f support
them f ^ ^ e T c o r d '
Chairman Salas aca^ted these petitions and acknowledged
More than 45 witnesses testified in favor o f Atty. Carbullido during the next 2 support were presented, read and formally acknowledged for these
Mayor's Council of Guam
Young M en ’s League o f Guam
Municipal Council o f Piti
Municipal Council o f Agana Heights
Guam Bar Association Survey
T h e C h a ir im n o u n c c d that 15 le tte rs had been re c e iv e d b y p e rso n a l d e liv e r v at the
c o m m itte e o ffic e . Seven (7 ) le tte rs o f .suppon h a d been re c e iv e d b y fa c s im ile , t w ^ g ) b y
Page 154 witnesses who registered to make personal ceitim ony during
A ppenJ^^"
c o n fir m a tio n h e a rin g is c o n ta in e d in
A lO -m inutc break was announced before proceeding into M r C a ib u llid o ’ s
statements and questions rrom members o f the committee and panel, ’
B .
F. P h ilip C a r b u llid o T e s tim o n y
A tto rn ey Carbullido was invited to the witness table to present his atatemenf^ nn »,•
n om m ation to the Supreme C oun o f Guam. H e emphasized hi? readiness lo r
service after having devoted 22 years o f his life to a private la w practice. H e iS w S t
prepared
ready to assume public life as a justice and continue to contribute to his
c o m m u n ity . H e funhcrm orc annbuted much o f his emotions, attitude and successes to his
fa rm ly u p b n n p n g , his P ^ents, siblings, spouse and chUdren and how much they all meant
to h im as he became w hat he was today. M r , C a rb u lU d o ’ s o p e n in g ita te m e n ty
h is c o n f ir m a t io n a re c o n ta in e d in A p p e n d ix 3.
H
g a ia te m e m s to r
qucstioniug by raising issues w hich had been
reported in the coirmuttce s investigation report;
1.
G o v e r n m e n t o f G u a m C o n tr a c ts
A ttorney C arbu llid o ’ s law firm was currently legal counsel to three
Intem auonal A irp o rt A uthority .
B e m u d e s and Sim on S ^ c h e z . Legal seiwices continue to be provided fo r the U n ive rsity
200a
Senators Bermudes and Sanchez were term inated in
T o ta l law firm fees for services rendered .determined through invmVec vu^c
27i
P a ^ e n ts received by the la w firm during that same
penod was 5 3 ,7 8 1 ,2 4 1 . T h e committee found the nom m ec’s la w firm had received 80 8^ 2.
98 E le c tio n C a m p a ig n C o m m itte e
T here was a total o f $229,344.45 in invoices foe legal services rendered to the election com m ittee. A total o f $16,000 had been paid w ith a balance o f 52^3 3 4 outstanding, 98 Treasurer Tony Sgro testified this amount w ould be satisfied through
continued fundraising efforts o f the election committee. Attorney Carbullido indicated
these amounts would continue to be sought from the 98 Com m ittee and his o ffic e ’s
accounting practices were to assess delinquent and interest charges fo r the unpaid amounts.
3.
D U I In te rfe r e n c e A lle g a tio n
• lo.'
“P
been investigated regarding a D U I
^ o ltn io n and arrest o f his son, Brandon C arbullido, on D ecem ber 19 1999 G P D Case
J ^ 9 -2 2 8 0 8 detailed the D U I Checkpoint incident which invoUeS m A s l i s S .
General,
D^^P^ty C hief o f Police and Attorney Carbullido representing h ij son’ s legal
interests. C arbullido denied allegations he had either influenced law enforcement’s officers
Page 155 orobstnjctedjusticcinany way. The commincc Invcxtizator fom d rhi^
been p liced on the Superior Court cajendur o f
8, 2 0 0 0 L iir E e t e S g
S
ep
tem
b
er
fu rther “ e ' S o r ' " "
4 .
«=ttponse, and asked no
R ule o f P rofessional C onduct
A
rJiis involvement With D o IiT in l
matters, Attorney CarbuIJido stated he had not been involved with anv nnil/iVai^
or issue since his nominatton ,n June. Salas indicacS S s s T o n s o r g ^ i z a u o n
Carbullido had also focused on whether he could e ^ p r a e S a w d,
period, Salas reponed CarbuIJido had been given and opportunity to submit
as to why he should not be prohibited from pmcticing law a lto g e *e ? d m iS h^ ^g^ments
confirmation penod. Committee counsel was requested to also ct.hmii h
this matter with a review by the Chair and a d e d S T s s u e d on U T h ^
k™
Attorney Carbullido could continue to practice law but should refrain f r o ^ n v ° ”
Pdli.icr.1 groups « d or campargo froop, A tto rS ;? ™ ^
voluntanly observed this commitment.
nc naa
,,
C.
C o m m ittee and S en ato rs’ Q uestioning o f the N o m in ee
Each member of the committee and nanel was thm nisr,*,.,
^

nominee questions on legaJ issues, his perceived role of a Supreme C o S r t T s t R f i ' d
responses to various legal issues currently before the cornmudtv
^
continued for the next 1.5 hours and was completed bv
This questioning
approximately .10:30 P.M, with all but?scn7om
Carbullido’s confirmation at the next session.
®
^
D.
H e a rin g G a lle ry S h o w o f S u p p o rt
A„
suggested to the remaining individuals waiting to testify orallv for
Attorney CarfauUido that he would exercise a prerogative o f the Chair and ^
for'their
show o f hands as a show o f support which would be noted in the committee report This
suggestion was accepted by those present and the show of hands i n d ™ d fiiJ S w as
S t ^ r C a ? b u U i d r ' i n d i v i d u a l s ' support for the c o n firL tio n of
III.
In v e s tig a tiv e R ep o rt
C arh n l.id ^
investigation conducted by Greg Hall Investigatiou found M r
Carbullido to have a clear personal character and be without history in his business and
c o ^ u n ic y relationships. His voluntary, unannounced drug test m d urinalysis was found
c
c o n t.i„ ';r iE 'lp p J ^ d fi
IV .
“ ■ P t o ™ n “ «n I" v « llg a tio „
H .p „ , apa
P o s t-H e a rin g Subm ission o f T estim o n y
Chair Salas re-stated the Standing Rules o f IM in a'B en te na t lhf.clafr,rnra
allowed for wntten testimony to be received for 10 S n g dTys a f t i h i
3^
hearing. This deadline would be September 13 where the cormidtte^woufd m ^ e a
decision lo report out
Carbullido’s nomination or request an extension o f time to
examine any outstanding issue or question.
^
extension ot time to
Page 156 \
.
R e c o r n m e n d a tlo n
A fte r having conducted a thorough background investigation and finding the
nom inee to be m et ai] mandatory requirements for his nomination.
T h e J u d ic ia r y C o m m itte e re c o m m e n d s th e G u a m L e g is la tu r e
A P P R O V E th e n o m in a tio n o f F , P h ilip C a r b u U ld o ’ s n o m in a tio n to s e rv e as
a f u l l- t i m e A s so cia te J u s tic e o n th e S u p re m e C o u r t o f G u a m ,
^ h n Camacho Salas, Chairman
y^eptcmber 13, 2000
Page 157 (
■r

w
In R ^f, To 98 C a m p a ig n :
S u p a rfo r C o u rt
Amount
Invoice Date
65055.3/19/42279.4/12/14797.A122JS2262.7/762.4/4/125157.S u p n m a C o u rt o f G uam
Am ount
Invoice Dale
4641.7/27/43.9/24/2683.1/29/7616.2/4/26936.2/4/697.Z12/8277.4/25/50345,

V
V


{

■i
J
J
J
J
J
J
J
I
D is tric t C o u rt
invoice Date
3/19/4/12/4/22/9/24/2J4I
Amount
1 8 0 ^ .3 3324.174.1326.501.23426.
N ln t/i C irc u it C o u rt o f A p p e a ls
InvotcQ Date
Amount
4/1 2j^
1393.4/22/280.7/27/4648.9/24/3940.2/4/4348.15112.U.S S u p re m e C o u rt
invoice Date
Amount
12/15/5143.3/4/363.4/5/00 19296.24802.
T o ta l A m o u n t In v o ic e d (98 C am paign)
50345,64 Suprem e Court of Guam
125157.27 S uperior Court
23426.25 District Court
15112.31 Ninth Court o f Appeals
24802.98 U.S Supreme Court
239344.T o ta l A m o u n t P a id b y 98 C a m p a ig n :
Invoice Date
Amount
4/24/5000.7/25/00 11000.16000.B a la n ce d u e to C arbuU do, B o rd a lllo , B ro o k s a n d L L P :
239344.45 Total due
______16000.00 Am ount paid
223344.45 B a la n ce due
' '''*^''^,3 3 ,
Page 158 G U A M P R ESER VATIO N TRUST
C H E C K S /P A Y M E N TS 6/11/10/16/11/20/
902.3121.4535.
TO TAL
8559.
CHECKS/PAYM ENTS 1/23/6/24/9/22/8/13/12/10/TOTAL
CH E C K S /PA Y M E N TS 2/12/5/6/9/30/6/11/
346,425.7195.2488.
TOTAL
10,455.
T O T A L 2000 ■
14,718.10,455.19,070.8559.
TO TAL
52,803,
T O T A L INVO IC ES
T O T A L PAYM ENTS
97^64.52,803.
R E M A IN IN G B A LA N C E : 44,560.
J
J
J.
J
J
2017.10328.1185.1248J4290.19,070.
CHECKS/PAYMENTS
1/31/4/27/7/28/
4944.6659.3114.
to tal
14,718.08
Page 159 GUAM PRESERVATIO N TRUST
INVO ICES
INVOICES
INVOICES
5/27/7/24/9/23/10/27/11/19/iin e m
902.3973.7094.7976.9884.2017.
TO TA L
31,848.
5/4/6/2/6/2/6/2/6/2/6/2/7/16/7/16/7/16/9/8/
1/25/1/25/1/25/2/2/2/2/2/2/2/2/3/16/3/16/4/12/4/12/4/22/4/22/6/4/9/30/9/30/10/1/10/1/10/1/
936.2137.1216,938.2142.109.1454.5.408.2.5.2.5.2486.809.2886.421.687.718.
TO TA L
17,375.
9/8/11/30/11/30/11/30/TO TA L
2060.343.838.1450.1170.6506.187.296.2855.826.358.936.2137.1216.21,183.
INVOICES 3/2/3/2/3/2/4/10/4/10/4/25/4/25/5/20/5/20/6/12/7/31/7/31/TO TA L
1695.734J828.1773.10999.589.1265.703.3406.117.26,
T O T A L TO TAL
26, 956.17,375.21,183.31,848.97,364.16
Page 160 Guam International Airport Authority
Invoict Dale
1/9/t/S/1/9/1/9«V9/1/9/1/9/i/9ra1/9«1/9/1/9/1/9/1/9/1/9/1/9/1/9/1/9/1/9/5/27/5/27/im m
5«7/5/27/5fi7/5/27/5/27/5/27/5/27/5«7/7/2 5 « 7/25/7/25/7/25/7/25/7/25/7/25/7/25/7/25/7/25/7/7/25/7/25/7/25/7/25/7/25/10/31/io n i/9 KV31/Q10/31/io n i/9 10/31/10/31/10/31/10731/io a i/9 10/31/10/31/10/31/subtotal
G IA A - 1 9 3 7 In v o ic e s
Invoice Date
Amount '
Amount
127J/20179.2250.12/3/249.187,12/3/234.249,12/3/568.1357.12/3/46.156.12/3/3953.109.12/3/2353.2293.1 2 /3 ^ 1785.2652.12/3/1170.390,12/3/78.265.1 2 ^ /9 79.78.12/3/78.1045.12/3/4599.421.12/3/20Z1596.48.1 2 n/78.12/3/4250.670.12/3/109.5846.12/3/468,4495.12/15/10916.33180.12/15/^78.75.12/15^^225.1419.12/15/1689.31.12/15/2196.3
12.12/15/265.330.12/15/187.1350.12/15-^1201.89.12/15/1500.158.12/1VS570.2968.13329.12/15/1216.12/1V3505 ■
12/15/4250.733.11033.12/15/109.12/15/187.1045.12/15 « 249.249.12/15/568.46.12/15/46.3229.1341,12/15/109.12/15/390.858,12/15/78.285,12/15/374.78,3806.12/15/78.22381.64,693.117
- Oc/. jibv. 148.891.Total 233,384.421.109.109.109.173.156.7.312.941.6677.109.75.234.3447,156.15265.148,591.
Invoice Date
1/3CV1/30«1/30/1/30/1/30/1/30/1/30/1/30/1/30/1/30/1/30/1/30/1/30/1/30/1/30/1/30/1/30/1/30/1/30/1/30/1/30/1/30/1/30/2/12
/2/12/2/12/2/12/2/12/2/12/2/12/2/12/2/12/2/12/2/12/2/12/2/12/2/12/2/12/4/17/4/17/4/17/6/19/6/19/6/19/6/19/6/19/5/19/6/19
/1 9 « 6/19/7/16/7/16/7/16/7/16/7/16/7/16/7/16/7/16/7/10/7/16/Subtotal
G IA A - 1 9 9 8 In v o ic e s
Invoice Date
Amount
1218.9/8/9/8/240Z390.9/8/114Z9/8/1388.9/8/9 /8 « 125.1388.9/8/422.9/8/46.9/6/436.9/8/1310.9/8/78.9/9/1279.9/6/18505.9W 1232.9/8/1588.S im a
9/8/1060,9/8/9/8/. 9/8/6899.9/8/29004.9/8/991.9/8/2398.9W 9B
39a 11/9/11/9/1388.ii/9 « a
125.11/9/1388.11/9/421.11/9/46.11/9/438.11/9/1310,11/9/78.11/9/1279.ii/9 « a
18505.11/9/11/20«1588. .11/20/35270.11/20/78.1 1 /2 0 ^967.1l/2tV32051.11/20/82.11/20/15553.11/20/234.11/20/405.11/20/2059.^V 20i9a
4024.11/20/1170.11/20«6506.11/20/11/20/109.11/20/234.18290.ii/2 o ra 1154.Jan. - Ju/. inv.
3717.202.Total
3010.2203.624.2 0 2 285.324.234,018.
Am ount
16821.400.1399.363.2293.2264.3478.6866.6666.1575.1029.237.187.234.721.3236.466.967.969.3026.546.265.2149.14604.46.704.39
6 187.234.1900.10.31.7551.9.204.2121.124.78.31,7 a 5708.187.1029.985.122.536.234,019.356,555.78
Page 161 G uam In te rn a tio n a l A irp o rt A u th o rity
G IA A -
G IA A - 1999 In v o ic e s
Irrvotce Oats
1/25/
^/25/1/25/1/25/1/25/1/25/2/2/2/2/2/2/2/2/2/2/3/15/3/15/3/15/3/15/3/15/V I 5/V I 5/V I 5/V1VV I 5/+/12/4/12/4/12/4/12/4/12/4/12/4/12/4/12/4/12/4/16/4/16/4/16/4/16/4/16/4/16/4/16/4/16/4/16/6/3/6/3/
enrag
6 n /9 5/3/6/3/6/V 6 n /9 6T3/6/3/6 0 /9 6 /3 0 6 0 /9 7/30/7 0 0 /9 7 0 0 /9 7/30/7 0 0 /9 Subtotal
Am ount
10132.5681.2573.11.450.1778.24637.514.1641.2179.602.10158.31.156.1298.1279.31 i O
468.149.1326.62.10294.0.1248.2404.109.281.249.62.40 ■ •
31.9338.827.1341.B58.1374.390.161.3.62.2128.10311.4727.561.174.624.312.269.156.1014.124.19727.0,2028.1294.3931.171.873.1

Invoice Date
6/27/5Di7/
mvs8/27/8/27/8/27/8177/8 7 7 /9 10/5/10/5/10/5/10/5/10/5/10/5/10 /V 9 10/5/10/5/11/10/1 1 /1 0 7 11/10/1 1 /1 0 7 1 1 /1 0 7 1 1 /1 0 7 1 1 /1 0 7 11/10/1 1 /1 0 7 1 in 0 7 1 2 7 3 /9 J a n .-J u t. inv.
7oU l
Am ount
31.124.1029.3323.1825.359.624.1272.764.5070.1716.390.2792.1092.78.3 4 9 7 2 .n
1993.1 5 1796.312.3281.135.328.625.7794.805.303.234.3405.78.3859.3718.5528-625.92 7 4 7 .8 144,080.2 3 6 ,3 2 8 7
Invoice D ate
1 7 7 /0 1 7 7 /0 1 7 7 /0 1 7 7 /0 0 .
1 7 7 /0 1 7 7 /0
2000 In v o ic e s
Amount
382.78.1328.65,3290.3390.
1 7 7 /0 2/1 /2/1 /2/1/2/1 /2/1 /2/1/v \m
2/1/2/1/2/1/2/1/2/1/2/1 /2/1 /2/1 /2/1AM
2/1/3 7 /0 37A3/2/3 7 /0 3 7 /0 3/2 /3 7 /0 3/2 /3/2/3/2/3/2/3/2A3 7 /0 3 7 /0 3 7 /0 4 /1 0/4 /1 0/4/1 0/4/10/4 /1 0 /0 4 /1 0/4 /1 0/4/10/4/1 0/00 ~
4/1 0/4 /1 0 /0 4 /1 0/4/1 0/4 7 5 /0 4 7 5 /0 4 7 5 /0 4 7 5 /0 4 7 5 /0 4 7 5 /0 4 7 5 /0 4 7 5 /0 S ubto tal
500.2632.273.117.3307.117.234.25.12754.226.2875.117.117.3117.835.39.62.84.70 3.234.3328.468.691,39.257.78.953.968.4695.515.78.4648.952.617.2346.312.117.39 .1953.2773.5 39.39.78.78.2579.1604.10 85.9 187.156.703.
Invoice Date
4/25/OD
4/25/Ob
5/20A5/20/OD
5/20/5/2 0/cb
5/20/cb
5/20/5/20/5/20/5/20/5/20/CO
5/20/dO
5/20rtO
5/20AX5/20A:p
5/20/6/12/tXI
6/12/6 / 12 /d o
6/6/12K6/12/6/12 A »
6/12/6/12/d6/12/6/12/6 /1 2 /(^
7/31/7/31/7/3 1/7/31/7/31/7/31/7/31/7/31/7/31/7/31/7/31/7/31/7/31/7/31/7/31/7/31/7/31/7/31/7/31/7/31/7/31/7/31/7/3 1/7/31/7/7/31/7/31/7/31/bo
7/318)7/31/7/31/tO
70,170,Jan. - A p r Inv
T o ta l
A m ount
234.78.234.10232.484.969.39.C375.1359.820.31^52 .
39,1757.2968.1218.3 5 312.7039.1343.1140.664.312.15.7687.1631,1082.6615.46.455.167.167.168.168.168.168.1607.2296.2008.9.865.24.158.171.3109.40
16.990. CLASS="hdiv">Page 162 Guam International Airport Authority
In vo ice

233,384.356.555.236,328.187.7B6.1,014,055.
A m ount Paid
Dale
C heck N um ber
Am ount
7/8/
none available
55,000.64,544.
1/20/1/29/5/4/672/6)29/8/21/9/25/
27,500.58,430.69,897.5.839.44,872.97,970.
10/23)
42,161.
11/10/12/11/12/24/
1,129.24,765.29.111.
2/19/4/19/
55,916.14,834.
4727/
6/24/7/14/8731/9724/none available
11/3/99 ,
12/23/1/31/2/14/3/9/4727/5/11/00 ■■
5726/673 8 6 /6 / 0 6/27/671 5 0 ^
10,433.
29,964.30,690.10,311.9,238.8,589.48,519.33,925.18,559.9,066.27,320.13,160.14,072.6.941.27,455.17,764.'9 0 7 ,9 8 4 .8
In v o ic e S u m m a ry
Total Due
1,014,055.(907 ,9 8 4 .8 0 )
106,070.
Balance Due
T otal Paid
Page 163 ^.liversity of Guam Invoices
U O G - 1 9 9 7 In v o ic e s
A m ount
Invoice Date
1504.5fi!7/506.5/27/624.5/27/668.5/27/144.5/27/464.6/25/1056.6/25/6/25/6/25/6/25/ta s ts i
7/10/7/10/7/10/7/10/7/10/• - 7/1 Qi^9 /2 3«9/25/ta s m
9/25/9/25/9/25/9^25/1 0 m ’/\z r z ii9 ir
la a m i
10/27/11/24« 11/2‘t/9 11/2V 11/24/11/24/11/24/11/24/11/24/11/24/11/24« 12/24/12/24/12/24/12/24/12/24/12G4/12/24/12/24/12/24/12/24« 12/24/12/24/T o ta l
*,
279.64.1249.2208.124J1980.765.83.99.499.1497.908.299.632.166.4576.399.9018.1239.715.218.933.9018.88,
848.64 • .
632.765.1308.1497.732.49.1 2 49.932.1308.1241.1164.732.765.1499.116.9023.1383.
U O G - 1 9 9 8 I n v o ic e s
Invoice D ate
A m ou nt
2/19/1884.2/19/9037.2/19/1250.2/19 « 1416.2/19/816.2/19/1311.2/19/1501.2/19/733.2/19/50.2/19/116.2/19/33.2/19/1244.4 2 3 /9 1923,4/23/9227,4 2 3 i9 1276.4/23/1445.4 2 3 /9 834.4/23/1338.4/23/1532.4/23/749.423^51.423«a
119.423«34.4 2 3 /9 1270J6 2 /9 9465.6 2 /9 6/2/1576.6 2 /9 1464.6 2 /9 845.1656.6 2 /9 1553.6 2 /9 758.51.6 2 /9 120.6 2 /9 34.2208,6 /2 2 1304.7 /1 6 2 2301.7 /1 6 2 10567.1598.7/1 7 /1 6 2 1485.7 /1 6 2 857.2445,7/7 /1 1575.7 /1 769.7 /1 6 2 52 .7 /1 12Z7/1 34.9328.7 /1 6 2 1323.7/2266.9 /6 2 432.416.153.166,4576.9/8 133.9/9/8 2184.11/11/11/11/Total
2974.38 45.4 9875.2184.2974.3845,131,023.
U O G - 1 9 9 9 In v o ic e s
Invoice Dote
AeTTuxjnt
1/25/2224.1/25/249.1/25/3031.1/25/119.3/15/252.3/15/3/15/1896.3/15/57.3/15/12405,4/8/303.4W 254.4/8/1896.4/8/57.4/8/4/19/485.V I 9^255.V I 9/2505.V I 9/V19«143222 4/19/493.V 1 9 /9 259.V I 9/3791.V I 9/9 59.V I 9/9 14866.V I 9/149.1363.7/27/1614.7/27/3.8/27/1777.8627/2861.57Z7I3.8/27/1 1 9/2 V 9 231.16.9 /2 4 « 3.9/24/9/24/99.9/24/423.2308.12/23/12/23/233.12/23/T o t^
103,362.
U O G - 2 0 0 0 In v o ic e s
Invoice Date
A m ou nt
1/29/23 01.5 1/29/2 3 3 .3 V 23/36 23.8 1/29/3164.1/29/99.2/3/27 39.0 3/2/31 56.5 3/2/4965.4/25AX6 4 5 9 .8 1/20A10 453.7/31/3 6 4 .7/31/9 1 .1 7/31/1294,7/31/10 566.7/31/37 73.2 T o ta l
8 3 2 8 6 .1 2
Page 164 U niversity o f Guam
in v o ic e
A m o u n t P aid
D ate
2 0 0
67,289.131,023.1 03,362.9 53,286.1 354,961.
C heck N um ber
A m ount
6725/8/5/8/5/10/14/1/29/
5.532.23,254.9,210.
6 /1 6 /9 9/1 7 /9
31 3 2 5
19,359.5,557.80,139.50 T o ta l Pai«!l
8 , 221.9.004.
In v o ic e S u m m a ry
T o ta l D ue
354,961.(8 0 ,1 3 9 .5 0 )
274,821.
B a la n ce Due
T o ta l Paid
Page 165 l OMHI-TEE
on j u d i c i a r y
ID:£?23J3;
SEP O' '0 0 '
9 ^ 35 No .001 P . ijg
C A R B U L L ID O & B R O O K S , L L P
C &, A B u ild in g , S uite JOl
251 M a r ty r S l r « l
A g an a , G uam T e le c o p ie r; (671) 477-T e le p h o n e : (671) 472-
T K
F. C O P ] E R C O V K R T, F. T T K M
Date:
Tim e: 1;27 PM
TO :
S enator Jo h n C am ach o S aks
1 M in a ’ Benle Singko na Liheslaturan Guahan
777 Sinajana C om m ercial B u ild iu fi, Suite Route Sioajuna, Guam
F ncsiniilcM o.
472-
FR O M :
FR O M :
Facsimile No.
Sandra D . L y n c h , Esq.
477-
M ESSAGE:
Please see attached le tte r dated A u g u s t 3 1,2 00 0 w ith enclosures.
■We w ill be sending the o rig in a l h a n d -d e liv e re d to y o u r o ffic e this a fte rn o o n .
W e arc trattErniUing 4 pages inclu ding th is cover .sheet. I f there is a patblem in uansm ission nlea.se
call 472-6848.
T riu MESSACH IS i m i ' j i o m d n l v r o r m e u se o r n « : in d iv id u a l o » E N rrrv t o w h ic h i t is A D O r jiis ig ) a k . j m a y c o n t a in
^ITOKMATION n lAT I.S rXIVIL£GED, CONI'IW lfTnAl. AND F.XRMrT fXOM DIJCLOSUUn UNDER ArrUCABLL- LAW. IK THB a r j u ^ R
M I3S A C ni5W 077XEl)friH lX0IU iC U ’llit "It^EEMm3YE£0KAGlZNTkF-5rONSIBLEfOllCXiLlViyUNCnUl'idEF<.SAGE7OTlIl:l>miNi>n
NOmHP.DTHAT ANY DISSEMINATION. DIST1UBUT10N CW C U C Y IK l o rT O IJ C O M M I^ T T O N
^ l O f T T O . IT YOU I lAVB WICEIVED THIS COMMUNICATION IN ERXOR. P U A6U NOTIFY US iM M tC W rJ L Y H Y T N ^ ( ^ 1imOWOINAI.MESXAr,ETOU3AT71IL-,VlCV|-: ADDRESS VIA 7 1 IL U ,» .P 0 m i-S E A V lC a . THANK YOU.
W-TOR
Page 166 C G t i n l ' i E c OfJ J U D I C I h RV
D : *1723^
O iia jm
•SEP o:-
9:3.> N o . 001 F . O l
L ^ g is la t iij^ ^ e :
Office o f
Senator John C. Salas
C h a irp e rso n , C o m m itte e on J u d ic ia ry , P u b lic S afety, C onsum er P ro te c tio n
H um an Resources D evelopm ent
F A C S I M I L E T R A N S M T T T A T . SH'TTCT
PRIVATE AND CnNFTnFMTTdT
-s intended for the Named addressee
only
lf yoti
W ^HO UT
R E C E IV E D T H IS C O N tM U N IC A T lO N
W l i H u U J A U T H O R IZ A I IO N F R O M T H E N A M E D A D D R E S S F F P t F A ' I F T F T
R E T U R N T H IS D O C U M E N T T O T H E O m C E
Ot- S E N A T O R J O H N C. S A L A S , C H A IR P E R S O N , O R D IS P O S E O F IT ;
TO :
FAX#;
FR O M :
Gregg- Hall
6i2-:S e n a to r J o h n Solaa
D A TE & T IM E :
Septeirb«- i ,
T O T A L N U M B E R OF PAG lilS IN C L U D IN G C O V E R S H E E T :
«
M ESSAG E:
Pleajse Bee attached docTimcnts aa per our telephone dlacussion.
I f you have any queatJoi-B please do not hesitate to ca ll me at A71-3431/2, Thanks
John
Page 167 L A W O m C E S OF
F. PHILtP CARBULUDO
C a r b u l l id o TELEPHONE: (671) 472-68-
TERRENCE M. BROOKS
C£i_.A B u ild in g , S u ite lO l
TELECOPIER: (671) 477-
CYNTHIA V. ECUBE
SANDR.A D. EYNCH
PHILLIP J. T TD IN G C O
JONATH-\N R. Q UAN
DAVID RIVERA
2 5 1 M a r ty r S treet
H a g itn a , G u a m 9 6 9 1
(571) 477-E -*ta il address; cbbtnaiKglcbbbw.net
August 3 1, Senator John Camacho Salas
I Mina' Bente Singko na Liheslaturan Guahan
777 Sinajana Commercial Building
Suite 5, Route Sinajana, Guam R e : F o llo w - U p I n f o r m a t io n R e la tiv e to F . P l i i l i n C a rb u llid o N o m in a tio n
To T h e G u a m S u p re m e C o u r t
Dear Senator Salas;
Buenas yan Saluda! It was a pleasure watching your Judiciary committee in action last
evening. And, it was equally a pleasure seeing and hearing so many people supporting Phil. ■' ’
We have reviewed our billings based on your questions regarding the University o f Guam,
^ and provide the attached for your further review. The billings which rcraiin outstanding for the
.x-\ University total S I9, 91 j.66. I have also attached a schedule o f the case numbers so that you can
track the matters. It appears that your investigator looked at previous balances, vice the current
billing. We w ill be more than happy to have our accountants show Mr. Hall the breakdown o f each
with the history o f payments i f it would assist in your further evaluation o f the total amounts owed.
DSngkolo na Si Yu’ os Ma’ise’ .
Sincerely,
Sandra D. Byndh, Esq.
Page 168 f
2163-2163-2163-2163-107:
2163-
Angela Blackburn
Vaughan Tyndzik v. UoG (Superior Court)
General File including board matters
Christy Foley v. UoG (Superior Court)
Vaughan Tyndzik v. UoG (Superior Court)
2163-2163-2163-2163-120;
Chnsty Foley v. UoG (2"" Appeal; Superior Court)
Judith Hall v. UoG (Superior Court)
EEOC claims by 14 former employees o f UoG
US Dept o f Labor)
Page 169 (■
^STDUE

Carbullido &. Brooks LLP
Suite 101, C Sc A Professional Building
• .251 Martyr Street
Hagatna, Guam Telephone:
(671) 472-
Fax:
(671) 477-
University o f Guam
As at
Aug 15,
303 University Drive
UOG Station
Mangilao, Guam R E M IN D E R N O T IC E
RE;
UOG-Foley
Bill Date
M a tte r #
Inv #
Billed
Paid
Due
Aug -31-
2163-
16.
0.
16.
> 120 days
Dec -23-
2163-
2,218.
0.
2,218.
> 120 days
Jan -29-
2163-
83.
0.
> 120 days
Feb-04-
2163-
437.
0.
437.
> 120 days
Mar -02-
2163-
401.
0.
401.
> 120 days
Jul -31-
2163-
616.
0.
616.
<=60 days
Aug -31-
2163-
231.
0.
231.
> 120 days
Dec -23-
2163-
233.
0.
233.
> 120 days
May -20-
2163-
91.
0.
91.
<=120 days
Aug -31-
2163-
423.
0.
423.
> 120 days
Dec -23-
2163-
1,885.
0.
1.885.
> 120 days
Jan -29-
2163-
1,315.
0.
1,315.
> 120 days
Mar -02-
2163-
1,341.
0.
1,341.
> 120 days
A p r-10-
2163-
91.
0.
91.
> 120 days
Apr -25-
2163-
1,403.
0.
1,403.
> 120 days
May -20-
2163-
3,993,
0.
3,993.
<=120 days
Jul -31-
2163-
113.
0.
113.
<=60 days
Jan -29-
2163-
3,164.
0.
3,164.
> 120 days
Aug -31-
2163-
99.
0.
99.
> 120 days
\
Aging
Page 170 Aug-31-
2163-
(
3.
Jul-31-
2163-
1,294.
Iul-31-
2163-
91.
Jul-31-
2163-
Totals
B alance D u e a n d O w in g
r 0.0.00-
3.
>
days
1,294,
<=60 days
0.
91.
<=60 days
364.
0.
364.
<=60 days
519,913.
$0,
S19.913.
S19,91i3.66
Page 171 P o rt A u th o rity o f G uam
Port Authority ■1997 In v o ic es
' D ale
i/7 /9 S ri/
Amount
srrm
in m
577/
irrm
577/577/577/577/577/577/577/
tnmi
5,7/7/7/UW7/10/7/10/S7/10/7/10 « 7/10/7/10/7/10/7 /io ra 7/7 /1 0 ^ 9/23/‘>/23/
Bm/9/23/9t23/9/23/9/23/9/23/9/23/9/23/9/23/9723/9/23/9 /2 3 « 9/23/9 /2 3 « 9 /2 3 « 9/23/9/2 V 9 9/23/9/23/9/23/9/23/9/23/9/23/9/23/10/27/0/27/
'W /sr
27/10/27/10/27/SubloLal
997.30.3367.*1032.402.6125.900.32 5 8.490.1905.1377.1545.405.720.900.421.2253.421.709.468.46.1765.8499.782.910.390.390.546.1042.54.401.6730.579.182.156.91.5

10.1642.574.124.364.78.813.528.2620.1703.366.566.8 0 272.
Invoice D ale
1 0 2 7 /9 10/27/10/27/1 0 2 7 /9 1 0 2 7 /9 1 0 2 7 /9 1 0 2 7 /9 1 0 2 7 /9 1 0 2 7 /9 11/19/11/19/11/19/11/19/11/19/11/19/11/19/11/19/11/19/11/19/11/19/11/19/11/19/11/19/11/19/11/19/11/19/11/19/11/19/11/19/
2 2 4 /9 1 2 2 4 /9 1 2 2 4 /9 1 2 2 4 /9 1 2 2 4 /9 1 2 2 4 /9 1 2 2 4 /9 1 2 2 4 /9 1 2 2 4 /9 1224/9 1 2 2 4 /9 1 2 2 4 /9 1 2 2 4 /9 1 2 2 4 /9 1 2 2 4 /9 1 2 2 4 /9 1 2 2 4 /9 12 24/9 1 2 2 4 /9 1224/9 12 24/9 12 24/9 1 2 2 4 /9 12 24/9 M ay - Oct. inv.
Total
P o rt A u th o rity - 1 9 3 & In v o ic e s
/IjTioont
6097.3135.1183.418.639.164.728.364.188.293.965-110.1711.1419.145.65.4887.124.764.127.364.573.91.91.1107.188.0.855.18Z152

Invoice Date
■2/18/2/18/2/18/2/18/2/18/2/18/2/18/2/18/
z/^m a
2/18/2JT8/9S
2/18/2 /1 8 « 2/18/2/18/2/1S/2/18/2/18/2/18/2/18/2/18/2/18/2/18/2/18/4/23/4/23/4/23/4/23/4/23/
*/ 2 z/sa
4/23/4 « 3 /9 4/23/4/23/
4/23/4/23/4/23/4/23/4/23/4/23/4/23/4/23/6/2/6/2/6/2/6/2/6/2/
728.
6/2>^
1016.891.1037.5257-592.455.
538.1274.686.587.62.2766.673.1471.55,349.8 0 272.135,622.
6/2/
6/2/S6/2/6/2/6/2/6/2/6/2/5/2/S ubtotal
A m ount
182.25.364.249.6766.546.655.6370.78.36.
10.2090.910.273.
10.273.2329.273.36.637.514.46.4440.236.5161.582.273.27 3.32 7.954.702.182.91.182.182.91.182.564.54.1770.25.509.23 2.2093.6 182.665.10342.1294.36.910.401.145.366.60,525.
Invoice Dale
6/2//2 ^ 6/2/6/2/
enusa
6/2/6 0 /9 6 /2 0 6 0 /9 6 /2 0 6 0 /9 6/2/6 0 /9 7/16/7/16/7 /1 6 0 7 /1 6 0 7 /1 6 0 7 /1 6 0 7 /1 6 0 7 /1 6 0 7/1 6/7 /1 5 0 7 /1 6 0 7 /1 6 0 7 /1 6 0 7/16/7 /1 6 0 7 /1 6 0 7 /1 6 0 7 /1 6 0 7/16/7 /1 6 0 7 /1 6 0 9 /8 0 9 /5 0 9/8/9 /8 0 9 /6 0 9 /8 0 9 /8 0 8/8/9 /8 0 9 /8 0 9 /8 0 9 /8 0 9 /E 0 9 /8 0 9 /8 0 9/8/9 /8 0 9 /8 0 9 /8 0 9 /8 0 9 /8 0 9 /8 0 9 /6 0 9 /8 0 9/8/9 /8 0 9 /8 0 9/8/9/8/S ubtotal
A m ourjl
691)3 6 5P 182)702|429 p o
1014P 218i35 P 4009p o
78 2 P 7963)2275-t)364 .bo
182.P236.b1365.418.4095,156.91.1484.182.93.273.50.236.273,580.0.236.1974.3121.327.291 i o
222,982.
2222.28.1105.128.5729.1327.9686^1309.46.455.2246.622.2707.364.40.2654.1.228.987.4B
176.2969.76,073.9^
Invoici 0»t«
11/9/11/9/1 1 /9 « 11/9/11/9/11/9/1 1 /9 ^ 11/9/11/9/11/9/11/3/11/3/11/3/11/9/11/9//8 * 11/9/11/9/11/9/11/9/11/9/11/9/11/9/1 1 /9 * 11/9/11/9/11/9/11/3(V1 1 /3 0 * 11/30/11/30/11/30/11/30/1 1 /3 0 * 1 1 /3 0 * 1 1 /3 0 * 1 1 /3 0 * 1 1 /3 0 * 1 1 /3 0 * 1 1 /3 0 * 1 1 /3 0 * 1 1 /3 0 * 11/30/1 1 /3 0 * 1 1 /3 0 * 1 1 /3 0 * 1 1 /3 0 * 1 1 /3 0 * 1 1 /3 0 * 1 1 /3 0 * ■ 1 1 /3 0 * 1 1 /3 0 * 1 1 /3 0 * 1 1 /3 0 * 1 1 /3 0 * 1 1 /3 0 * 11/30/1 1 /3 0 * 1 1 /3 0 *
Feb. ■Jun.inv.
Jun. - Sep. inv.
T o ta l
Amount
126.911.273.5787.54.25.364.182.455.273.459.171.280.230.312.0.468.0.1435.192.1950.1365.
364.273.1246.4 5 5.4 5 5.
5061.1586.1163.327.468.11633.546.0.
12.418.1731.91 .364.63 7.1508.4056.218.288.624.3 2 7.0.54,577.60,525.76 ,073.191,276.88
Page 172 Port Authority of Guam
Invoice D ata
A m ount
Invoice D ate
A m ount
invoice D a le
A m ount
Invoice Oato
Am ount
1/25/
1 8 2 .0
4 /8 /9
5 4 .6
7 /3 0 ra
2 7 3 .0
1/2 5/9 1 /2 5 ^
■120.
1 1 /1 /9
4 /8 /9
748.
5 5 0 7
8 1 9 .0
1 V 1 /9
4 /8 /9
1 8 2 .0
18 -2
5 4 ,6
1/25/
673. 7 /3 0 /9 7 /3 0 /9
1 V 1 /9
4 /8 /9
1 8 2 .0
15 6
7 /3 0 /9
9 3 .6
1 /2 5/9
3 2 7 .6
1 1 /1 /9
4 /8 /9
10568
2 8 0 .8
7 /3 0 /9
3 1 3 0 .4
9 1 .0
1 1 /1 /9
1 /2 5/9 1/2 5/9
3 1 .2
27
7 /3 0 /9
7 8 .0
3 6 5 5 .6
4 /8 /9 4 /8 /9
4 5 3
7 /3 0 /9
1 /2 5/9
5 4 4 7 .3
7 4 8 .8 9 2 2 7 .4
1 1 /1 /9 1 V 1 /9
3 8 2 .8
1/25/
1 1 /1 /9
15211.
7 2 8 .0
1 V 1 /9
1 5 6 .0
1171/
102BA2 0 n fi"}
138 3.2 2 6 2 3 .9
5 2 1 6 .0
4 /8 /9 4 /8 t^
8 2 8 8 .8
1 /2 5 /9
1 8 9 1 .8
4/B /
4 7 1 .2
1 /2 V 9
4 3 4 5 .4
1/2 5/9
1 8 5 6 .4
4/4 /8 t^
1/25/
8 1 9 .3
4 /8 /9
109.
7 /3 0 /9
2 3 4 .0
1 /2 5/9
1 8 2 .1
1171/
4 /8 /9
6 0 5 .6
7 /3 0 /9
7 8 2 .6
1 /2 5/9
4 8 3 .6
0.
1/2 5/9 1/2 5/9 1 /2 5/9
4 1 0 8 .0 1 8 2 ,0 2 2 6 2 .0
4 /8 /9 4 /8 /9
B /27/8 /2 7 /9
9 1 .0 1 8 2 .0
1 1 /1 /9 1 1 /1 /9 1 1 /1 /9
1 /2 5/9 1 /2 5/9
1 8 2 .3 2 7 3 .0 2 1 8 .4
4 /8 /9 4 /8 /9
4 6 0 .0 7 4 8 .8 1 0 0 5 3 .0
4 /1 6 /9
1 8 2 .0
4 /1 6 /9
3 2 7 .6
1/2 5/9 2 /2 /9 2 /2 /9
4 /8 /9 4 /8 /9
7 /3 0 /9 7 /3 0 /9
0.
7 /3 0 /9 7 /3 0 /9
3 6 0 3 .6
1171/
11 0 7.6
7 /3 0 /9
4 0 5 .5
1 1 /1 /9
4 0 5 .6 1 4 1 .0
8 /2 7 /9 8 /2 7 /9 8 /2 7 /9
6 2 .4 3 9 0 .0 4 6 1 2 .7
1 1 /1 /9 1 1 /1 /9
3 1 -2 171 8 1039L.D1 8 9 7 .^ 1895 aa
710S 77<1 3 9 0 6 ,9
7 6 4 .4
4 2 1 .2
8 /2 7 /9 8 /2 7 /9
1 1 /1 /9 1 1 /1 /9
0 .6
1 1 /1 /9
346
0.
8 /2 7 /9
3 1 .2
4 /1 6 /9
4 7 3 .2
2 7 0 4 .0
5 4 6 .8
1 7 0 3 ,0 2 3 4 .0
8 /2 7 /9 8 /2 7 /9
1 1 /1 /9 1 1 /1 /9
1 2 7 .4
1 1 /1 /9
6 3 8 .0
8^27/
1 8 2 ,6 4 6 8 .0
1 1 /1 /9 1 1 /1 /9
9 3 .7 2 3 6 .9
1 2 7 .4
1 1 /1 /9 1 1 /1 /9
1 4 0 .6 6 4 4 2 .7
2 /2 /9
3 1 .2
4 /1 5 /9
2 /2 /9
4 3 6 .8
4 /1 6 /9
2 /2 /9
3 1 .2
4 /1 6 /9
1968 4 6 1 8 2 .2
4 /1 6 /9
6 2 4 .0 3 8 7 6 .6
4 /1 6 /9
3 1 1 7 .4
9 /2 4 /9
2 3 6 .6
2 /2 /9
4 5 5 .0 4 3 0 6 .5
4 /1 5 /9 4 /1 5 /9
9 /2 4 /9 9 /2 4 /9
1 1 /1 /9
1 2 0 9 .0
5 4 .6 1422.
1 4 5 .6
2 /2 /9
1 2 2 .4
8 7 3 .6
1 1 /1 /9
2/2reg
2 /2 /9
4 6 8 .3 7 2 2 .7
4 /1 5 /9 4 /1 6 /9
1 3 8 .5
3 2 1 1 .5 7 2 .8
9 /2 4 /9
3 1 .2 2 9 4 6 .0
1 1 /1 /9
2 /2 /9
2 9 2 7 .2
0 .3 9 8 4 .3
4 /1 5 /9
31 .
2 /2 /9
4 2 9 .0
4 /1 6 /9
1 4 5 .6
2 /2 /9
1 8 2 .0
4 /1 6 /9
2 /2 /9
5 1 4 .8 2 6 0 5 .2
4 /1 6 /9 4 /1 6 /9
1 2 2 2 .0 40 2 8.1
9 /2 4 /9 9 /2 4 /9 9 /2 4 /9
2 6 0 .0
4 /1 6 /9
18 2 .0
2 /2 /9
7 8 .0
2 /2 /9
5 2 2 6 .0
4 /1 6 /9 4 /1 6 /9
1.3 6 4 .0
2 /2 /9 2 /2 /9
4 0 0 .4
6 /3 /9
6 2 4 7 .0
4 0 5 .6
6 /3 /9
1 3 6 5.0
3 /1 5 /9 3 /1 5 j^
3 5 4 ,0
6 /3 /9
8 5 5 .4
3 1 .2
3 /1 5 /9 3 /1 5 /9
1 8 2 .0
6 /3 /9 e n /9
2 2 4 6 ,7 3 9 4 2 .4
3 /1 5 /9 3 /1 5 /9 3 /1 5 /9
6 /3 /9 6 /3 /9
0 .3 0 .3
3 /1 5 /9
1 7 7 8 .7 3 0 9 .4 1 0 9 2 .0 145 1.0
6 n /9 6 /3 /9 6/3 /
3 /1 5 /9
4 5 5 .0
6/3 /
7 3 3 4 .9 5 3 0 .4 3 0 9 .4 5 0 9 .6
2 /2 /9 2 /2 /9
2 /2 /9 2 /2 /9
1 5 6 .0 0 .
3 4 3 .2
6 2 4 .3
3 /1 5 /9
1 4 5 .6
5 /3 /9
i7 2 o :a o
3 /1 5 -^
1 8 2 .3
6 /3 /9
3/
9 1 .0
5 4 .6 2 3 6 .6
3 /1 5 /9
3 1 .2 2 5 9 4 .8
6ra/
5 3 0 .4 309 .4
3 1 5 1 .2 3 6 4 .0
6/3 /
3 6 4 .0 6 7 ,3 7 5 .8
6 /3 /9
7 8 .
6 /3 /9
5 7 4 .6
3 /1 5 /9 3 /1 5 /9 3 /1 5 -W
3 /1 5 /9 Subtotal
6 /3 /9
3 1 .2 3 1 2 .0
8 /2 7 /9 8 /2 7 /9
9 /2 4 /9
9 /2 4 /9 9 /2 4 /9 9 /2 4 /9
3 1 2 .0 1 2 0 1 .2
1 1 /1 /9 1 1 /1 /9
4 1 1 .9
4 6 2 2 .8 7 8 0 .0 1 5 6 .0
1 2 /3 3 /9 1 2 /3 3 /9
4 5 3 .1 9 8 5 .4 3 4 6 .3
1 8 5 .3
1 2 /3 3 /9
9 /2 4 /9
5 3 0 .4
9 /2 4 /9
4 9 9 .2 2 0 0 2 .0
1 2 /3 3 /9 12/ 33/
9 /2 4 /9 9 /2 4 /9 9 /2 4 /9 9 /2 4 /9 9 /2 4 /3 9 .
S ubtotal
3 0 9 .9
1 1 /1 /9 1 1 /1 /9
0 .3
4 1 6 .6 1 8 1 4 .0 1 8 .2
1 1 1 0 .6
1 2 /^ 1 2 /^
7 0 2 .0
12/ 33/
2 7 3 .0
1 2 /^
4 3 8 .1
4 9 1 .4 4 7 ,1 7 7 .4
1 2 /3 3 ^
6 0 1 5 .6 6 0 ,7 0 8 .1
2 9 6 .8 7 1 0 .9
7an. - M a r, /nv.
A/p. - Jun., /nv.
Ju/. - S e p . /nv.
6 7 ,3 7 5 ,8 7 8 ,8 7 7 .7 4 7 ,1 7 7 ,4
T o ta l
2 5 2 ,1 3 9 .2 0
Page 173 Port Authority of Guam
Port Authority - 2000 Invoices
In v o ic * D a te
Am ount
In v o ic a D a te
Am ount
In vo ice D a te
Am ount
1 /2 7 /0
3 6 4 .5
4/107DO
1 2 5 0 .0
6 /1 2 /0
1 /2 7 /0
7 6 5 .6
4 /1 0 /0
3 9 .0
5 /1 2 /0
6 2 .5
1 /2 7 /0
2 .9
4 /1 0 /0
1 5 6 .2
6 /1 2 /0
7 1 4 0 .9 3 8 3 .8
7 2 .9
1 /2 7 /0
2 5 .7
4 /1 0 /tX l
3 3 0 7 .0
6 /1 2 /0
1 /2 7 /0
5 5 4 7 .3
4 /1 0 /0
6 5 6 .2
6 /1 2 /0
7 8 .1
1 /2 7 /0
5 6 5 .1
4 /1 0 /0
2 3 4 .3
6 /1 2 /0
1 0 9 .3 2 3 7 .3
1 /2 7 /0
3 8 2 .8
4 /1 0 /0
1 1 .7
6 /1 2 /0
1/27AX
4 6 8 .7
4 /1 0 /0
7 8 .1
6 /1 2 /0
1 0 9 .3
1 /2 7 /0
4 7 3 9 .5
4 /1 0 /0
5 5 4 .6
6 /1 2 /0
7 9 6 .8
1 /2 7 /0
1 5 2 5 .5
4 /1 0 /0
6 6 4 .0
6 /1 2 /0
1 7 0 0 .5
1 /2 7 /0
1 2 7 .9
4 /1 0 /0
7 6 5 .6
6 /1 2 /0
5 2 2 1 .3
1 /2 7 /0
6 0 9 .3
4 /1 0 /0
2 5 0 0 .0
6 /1 2 /0
2 8 3 .4
1 /2 7 /0
3 1 .2
4 /1 0 /0
3 4 2 6 .1
6 /1 2 /0
1 6 9 5 .3
1 /2 7 /0
2 0 3 1 .2
4 /1 0 /0
8 5 9 .3
6 /1 2 /0
5 7 2 4 .1
1 /2 7 /0
3 1 .2
4 /1 0 /0
3 5 .0
6 /1 2 /0
1 0 0 2 .9
1 /2 7 /0
1 1 0 9 .3
4 /1 0 /0
0 .3
6 /1 2 /0
3 1 2 .8
1 /2 7 /0
1 2 0 .9
4 /1 0 /0
3 2 8 1 .2
6 /1 2 /0
5 8 5 .9
1 /2 7 /0
3 3 0 9 .8
4 /1 0 /0
3 9 0 .6
6 /1 2 A /
2 3 1 5 .1
1 /2 7 /0
2 0 .0
4 /1 0 /0
8 7 6 7 .7
7 /3 1 /0
6 7 9 ,6
1 /2 7 /0
7 5 0 .9
4/10A X
7 2 5 0 .5
7 /3 1 /0
4 8 1 4 ,1
1 /2 7 /0
1 5 6 .2
4 /2 5 /0
1 4 5 .8
7 /3 1 /0
1 7 9 .8
2 /3 /0
6 3 2 .8
4 /2 5 /0
1 0 4 4 1 .6
7 /3 1A )
3 7 5 .0
2/3A X)
6 0 5 8 .7
4 /2 5 /0
7 2 9 .1
7 /3 1 /0
1 5 6 .2
2 ^ )
5 9 9 8 .0
4 /2 5 /0
3 1 2 .5
7 /3 1 /0
4 0 1 .0
2 /3 /0
7 8 .li
4 7 2 5 /0
1 6 5 8 .8
7 /3 1 /0
6 0 9 .3
2>^
3 0 .2
4 /2 5 /0
8 3 5 .9
7 /3 1 /0
2 3 4 ,3
2 /3 /0
1 1 7 .1
4 /2 5 /0
5 4 6 .8
7 /3 1 /0
3 0 .0
2IZ!O
3 4 3 .7
4 /2 5 /0
1 1 7 .1
7 /3 1 /0
0 .3
2 /3 /0
9 1 .4
4 /2 5 /0
2 3 5 4 .7
7 /3 1 /0
3 9 0 .9 5 0 7 .8
2 /3 /0
1 0 .0
4 /2 5 /0
5 3 2 3 .1
7 /3 1 AW
2 /3 /0
4 5 5 .7
4 /2 5 /0
1 8 2 .2
7/31/O Q
5 7 .2
2 /3 /0
3 1 7 .1
4 /2 5 /0
7 8 .1
7 /3 1 /0
2 8 8 5 .1
2 /3 /0
1 1 6 4 .0
4 /2 5 /0
1 5 6 2 .5
7 /3 1 /0
1 2 7 .6
273/
1 0 3 2 7 .1
4 /2 5 /0
7 6 4 8 .6
7 /3 1 /0
9 1 1 .4
V 2 IQ
7 2 .1
5 /2 0 /0
3 9 .0
7 /3 1 /0
9 1 .1
3 /2 /0
1 0 1 5 .6
5 /2 0 /0
9 9 8 7 .5
7 /3 1 /0
0 .3
3 /2 /0
3 1 .2
3 9 0 .6
7 /3 1 /0
1 5 6 8 .1
3 /2 /0
1 2 1 4 0 .5
5 /2 0 /0
4 3 7 5 .0
7 /3 1 /0
1 4 0 .9
3 /2 /0
2 2 7 .5
5 /2 0 /0
5 8 5 .9
7 /3 1 /0
3 9 .6
3 /2 /0
3 9 0 .6
5 /2 0 /0
4 0 6 .5
7 /3 1 /0
3 9 0 .6
V 2J0Q
0 .3
5 /2 0 /0
3 9 0 .6
7 /3 1 /0
1 5 6 .2
3 /2 /0
1 2 5 0 .0
5 /2 0 /0
2 2 6 .5
7 /3 1 /0
8 9 4 9 .2
3 /2 /0
1 1 7 1 .8
5 /2 0 /0
1 7 9 6 .8
7 /3 1 /0
5 9 9 0 .1
3 /2 /0
9 3 .7
5 /2 0 /0
1 9 8 0 0 .1
7 /3 1 /0
3 9 .0
3 /2 /0
3 0 4 6 .8
5 /2 0 /0
1 1 5 8 .8
7 /3 1 /0
2 7 3 .4
Zt2J
1 1 7 .1
5 /2 0 /0
1 2 9 9 .4
7 /3 1 /0
2 7 3 .4
3/
2 3 4 .3
5 /2 0 /0
1 5 6 .2
7 /3 1 /0
3 /2 /0
1 2 6 5 .6
5 /2 0 /0
7 2 6 .5
3 /2 /0
1 5 6 .2
5 /2 0 /0
3 /2 /0
5 4 .6
S u b to ta l
3 /2 /0
4 6 .8
3 /2 /0
2 2 0 8 .4
S ubtotal
7 1 .6 3 4 .9
5 /2 0 /0 0 -
3 5 1 .5 1 0 8 ,3 5 7 .5
5 1 5 .6 5 6 ,6 3 0 .1
Ja n . - M a r. in v .
7 1 ,8 3 4 .9
A p r. - M a y in v .
1 0 8 ,3 5 7 .5
T o ta l
2 3 8 ,8 2 2 .7 0
Page 174 Port A uthority of Guam
Invoice
Year
Amount
135,622.191,276.252,139.238,822.817,860.
Amount Paid
Date
7/31/10/7/2725/4/29/6/8/7/24/8/31/9/10/12/9/1/27/2/10/3/26/4/12/4/30/7/28/8/6/9/10/9/30/11/19/1/14/1/28/2/29/5/8/6/16/6/

Check Number
Amount
17,058.33,058.26,520.16,307.34,956.17,690.18,302.41,123.36,375.33,090.21,354.12,930.27,879.21,809.21,566.20,334.9,743.17
,098.65,494.11,495.22 Total paid
Invoice Summary
Total Due
817,860.(713,377.84)
104,483.
Balance Due
Total Paid
Page 175 Morrison & Foerster LLP
M orrison i F o e rs te r LLP - 1997 In v o ic e s
Inv. Date
lam i
1/31/2/10/3/24/4/7/5/28/7/10/7/31/
e/20/9/18/10/1/10/11/11/14/11/14/11/17/11/17/
Inv. Num.
A m ount
GIAA - 1997 P aid In v o ic e s
Re:

64,496.29,210.44,437.59,170.63,700.
14,346.44,461,
12,187.1,389.
Tarminal Expansion

1,896.
Terminal Expansion

19.226.8,131.
T o ta l
Terminal Expansion
Terminal Expansion
Terminal Expansion
Terminal Expansion
Terminal Expansion
Date
138,145.59.170.63,700.14,346.44.461.
13,576.
T /T a /c 14994 01 8 3
96.137.174,572.606,008.
Terminal Expansion
9/18/
T e rm in il Expansion
10/24/
Terminal Expansion
12/29/12/31/
Harmon Sink Env.
Harmon Sink Env.
39,620.14 3H V. Hatpin
29,159.78 Terminal Expansion
172.601.40 3H V. HanJIn
1,971.44 Tarminal Expansion
606,008.
606,008,(606,008.44)
0.
B a la n ce Due
Am ount
533 5
In v o ic e S u m m a ry
Total Due
Ched< N um ber
3727/4/30/5/30/7/3/8/4/
Total Paid
T /T a /c 14994 0 1 6 3 T o ta l
1,896.64
Page 176 Morrison & Foerster LLP
Morrison 4 Fo«rst»r LLP - 1998 Invoices
Inv. D a le
1 1 /1 7 /9
Inv. N u m .
G IA A - 1 9 9 8 P a id Iliv o ic e s
R e;
Am ount
1 0 ,7 1 8 .1
1 2 /5 /9
5 6 8 .7
1 2 /1 2 /9
2 ,4 4 4 .7
D a te
C heck N um ber
Am ount
Harmon Sink Env.
3 /1 7 /9
R 0«poni« to Au<^or$
4 /2 4 /9
5 l6 0
6 6 ,8 2 2 .9
6 /4 /9
1 5 2 ,6 0 3 .2
H«rmon Sink Env.
T /T a /c 1 4 9 9 4 0 -is 3
3 1 1 ,5 7 9 .4
1 2 /1 7 /9
5 2 5 .5
Terminal Expansion
6 /2 5 /9
1 6 3 ,3 5 5 .2
1 2 /2 2 /9
1 2 1 ,8 0 7 .0
3H V. Han/h
7 /1 6 /9
1 3 1 ,6 4 7 .1 1 2 7 ,4 0 1 .9
1 /2 3 /9
1 0 5 ,3 3 8 .6
3H V. Hanjri
B /1 9 /9
2 /1 9 /9
8 4 ,4 3 3 .7
3H V. Hanjin
9 /1 /9
T /T a /c 1 4 9 9 4 0 1 8 3
4 0 ,0 5 5 .8
3 /2 7 /9
6 6 ,8 2 2 .9
3H V. Hanjin
1 1 /1 9 /9
1 1 1 ,6 4 0 .2
4 /2 9 /9
1 5 2 ,6 0 8 .2
3H V, Hmnfin
1 2 /9 /9
1 7 8 .3 1 1 .6
5 /2 7 /9
1 6 3 .3 5 5 .2
3HV.
T o ta l
1 , 2 8 3 ,4 2 2 .7
3H V. Hanjin
67J0/
1 3 1 ,6 4 7 .1
7 /2 4 /9
1 2 7 ,4 0 1 .9
3H V . Hanjin
8 /1 7 /9
4 0 ,0 5 5 .8
3H V. H a n ^
9 /2 3 /9
1 0 2 ,8 6 0 .8
9 /2 3 /9
8 ,7 7 9 .3
1 0 /2 9 /9
8 0 ,5 5 1 .2
Constru. Claims
1 1 /1 8 /9
8 3 ,5 0 3 .1
Hajki Conatm. Osims
T o ta l
1 ,2 8 3 ,4 2 Z 7
Hajin Constru. Oaims
3H V. H a r ^
Invoice Summary
T o ta l D u e
1 ,2 8 3 .4 2 2 .7 ( 1 .2 8 3 ,4 2 2 .7 9 )
0 .0
B a la n c e D u e
T o ta l P a id
Page 177 Morrison & Foerster LLP
Morrison 4 Foerster LLP - 1999 Invoices
Inv. Date Inv, Num.
Amount
12/11/879.3/2/678009 10,068.4/29/692422 22,919.9/24/830806 19,316.12/11/852518 74,571.1/21/862302 40,763.3/1/872417 17,441.3/10/875318 12,252.4/20/1,177.9/1/7,915.9/14/1,058.Total 208,364.
G IA A - 1999 P a id In v o ic e s
Re;
R e s p o fij* to A uditors
Harmon S ink Env.
Harmon Sink Env.
Harmon Sink Env.
Date
4/9/5/28/6/21/10/28/
H»jin Constru. C l*im »
H»jin Constru. Claims
Hajin C onstni. Claim s
Hajin Constru. Claims
Hajin Constru. Claims
Harmon S ink Env.
Hajin Constru. Claims
In vo ice S u m m a ry
Total Due - ;208,364,(208,364.13)
0.
Balance Due
Total Paid
Check Number
Totat
Amount
145,908.1,177.52,304J8,973.208,364.13
Page 178 Morrison & Foerster LLP
M orrison & F o e rste r LLP - 2000 In v o ic e s
Inv. Dale
11/1/10/29/12j20/3/22/5/11/6/2/6/30/
Inv. Num.
T o ta l
A m ount
16,903.21,759.11,636.08,577.39,147.22,370.13,733.
GIAA - 2000 P a w In v o ic e s
Re:
Harmon Sink Env,
Harmon S ink Env.
Harmon S ink Env.
Harrrxsn Sink Env.
Harmon S ink Env.
Harmon S ink Env.
Date
2/4/3/3/4/7/6/16/7/18AD8/1/
Harmon Sink Env.
214,127.
In vo ice S u m m a ry
Total Due
214,127.
(214,127,55)
0.
B a la n c e Due
Total Paid
C heck N um ber
Am ount

38,662.11,636.88,577.39,147.2 2 ,370.13.733.
T o ta l
214,127.55
Page 179
Page 180 Page 1 o f Fi'LED
cour^i
Ocr
3 02 m '
IN T H E SUPREM E CO URT OF G U A M
)
REQUEST OF G O VER N O R C A R L
T.C. G U T IE R R E Z R E L A T IV E TO
TH E O R G A N IC IT Y AND
C O N S T IT U T IO N A L IT Y O F PU B LIC
LAW 26-35.
_______________________________
On
O ctober
(hereinafter
12,
2 00 1,
Supreme Court Case N o .: C R Q O l-O O l
)
)
)
)
)
)
)
)
Respondent I
RESPONSE OF ASSO CIATE
JUSTICE F. P H IL IP C A R B U LL ID O
CO NSENTING TO
D IS Q U A L IF IC A T IO N
M in a 'B e n te
S a is
Na
L ih e s la iu ra n
Guahan
Legislature ) file d an Objection to m y participation in the above-captioned case. A
party seeking the disqualification o f a justice must comply w ith the procedures set forth in T itle G C A § 610 7.
In accordance w ith that section, i f a justice does not disqualify h im s e lf from a
proceeding, a p arty thereto m ay file a written statement objecting to the ju s tic e ’s participation.
T itle 7 G C A § 6 1 0 7 (1 9 9 3 ).
disqualification.
Id .
Such statement must set forth all relevant facts that support
W ith in ten days o f the date the statement o f disqualification is filed, a
justice may either file an answer denying the request for disqualification, or a “ consent in w riting
that the action or proceeding continue without him or her.” Id . As required by 7 G C A § 6 1 0 7 ,herein respond to the Legislature’s Objection. See id.
The grounds mandating a justice’s disqualification are set forth in T itle 7 G C A § 6105.
In its Objection, the Legislature argues that I should disqualify m yself from hearing and deciding
this m atter on the ground that m y im partiality can reasonably be questioned.
A lthough the
Legislature did n ot rely on or cite to 7 G C A § 6105 in its Objection, it seems that the Legislature
seeks disqualification under the standard set forth in 7 G C A § 6 1 0 5(a), w hich provides:
20 o n 9 2
COPY
i/t.
iP i
Page 181 Page 2 o f
A n y Judge sh a ll d is q u a lify h im s e lf o r h e rs e lf in any p ro ceedin g in
w h ic h his o r h e r im p a rtia lity m igh t reasonably be questioned, but
if , fo llo w in g c o m p le te disclosure to all p arties in the p ro c e e d iiig o f
th e reasons fo r d is q u a lific a tio n , all parties agree to h a v in g the
Ju dg e co n tin u e to s it in the proceedings, he or she need not
d is q u a lify h im s e lf o r h e rs e lf
T itle 7 G C A § 6 1 0 5 (a ) (1 9 9 3 ).
The
L e g is la tu re
alleges
th e
fo llo w in g
facts
in
support
o f d is q u a lific a tio n :
(1 )
I
represented G o v e rn o r G u tie rre z in the 1 998 E le c tio n C on test cases w h ile I w as a p ra c tic in g
attorney; ( 2 ) p r io r to appiointm ent to this court, I was G o v e rn o r G u tie rre z ’ p o litic a l a d v is o r; (3 ) I
represented the L e g is la tu re , as w e ll as certain Senators, w h ile I w as a p ra c tic in g atto rn ey; and (4 )
m y fo rm e r la w f ir m continues to h ave outstanding fin a n c ia l o blig atio ns d u e fro m G o v e rn o r
G u tie rre z, c e rta in g o v e rn m e n t agencies, and the L eg islatu re, fo r le g a l services in u nrelated
m atters.
B ased
on
th e
facts
a lleg ed
by
the
L egislature,
at issue is w h e th e r m y
p revio u s
representation o f G o v e rn o r G u tie rre z and the L eg islatu re, parties to the in stan t case, co nstitu te
grounds fo r d is q u a lific a tio n u n d e r 7 G C A § 6 1 0 5 (a ). T itle 7 G C A § 6 1 0 5 w as m o d e le d a fte r the
federal recusal statute, 2 8 U S C § 4 5 5 . See T itle 7 G C A § 6 1 0 5 , source an d c m t. ( 1 9 9 3 ) . F ederal
courts in te rp re tin g 2 8 U S C § 4 5 5 h ave held that p rio r representation b y th e ju s tic e o r h is la w
firm in an u n re la te d m a tte r is n o t p e r se or autom atic grounds for recusal u n d e r th e statute. See
N a l 'l A u to B ro k e rs C o rp . v. G e n e ra l M o to rs C o r p , 5 7 2 F .2 d 9 5 3 , 9 5 8 (2 d C ir. 1 9 7 8 ); 5 ce also
R osen b erg v. M e r r i l l L y n c h , P ie rc e , F en n er. & Sm ith, 9 7 6 F .S u p p . 8 4 ( D . M a s s . 1 9 9 7 ); j e e also
C a r r v. F ife , 156 U .S . 4 9 4 , 4 9 8 , 15 S .C t. 4 2 7 , 4 2 8 (1 8 9 5 ); D a rlin g to n v. S tu d e b a k e r-P a c k a rd
C o rp ., 261 F .2 d 9 0 3 , 9 0 6 -0 7 (7 th C ir. 1 9 5 9 ). A s one co urt pointed out, “ [ejases in v o lv in g p rio r
service and p riv a te practice are g enerally u n ifo rm in fin d in g no reason fo r d is q u a lific a tio n .” In
re D o n in to n Investm ents. N .V ., 9 7 B .R . 112, 116 (U .S . B k c y . C t. F la .1 9 8 8 ).
Page 182 Page 3 o f
While disqualification is not automatic where a judge has previously represented a party
in an unrelated matter, disqualification pursuant to section 6105(a) may be necessary i f “ the
charge o f lack o f im partiality is grounded on facts that would create a reasonable doubt
concerning the judge’s im partiality . . . in the mind o f a reasonable person.”
R ico V. The M / Y J O H A N N Y ,
E l F e n ix de P u e rto
36 F.3d 140, n.3 (1st Cir. 1994) (citation omitted); A d a v.
G u tie re z ,
2000 Guam 22, ^ 12. Specifically, the test for disqualification under section 6105(a) is “ whether
the reasonable person, were he to know all o f the circumstances, would harbor doubts about the
Judge’s im partiality.”
E l F e n ix ,
36 F.3d at 140 (citation omitted);
A da,
2000 Guam 22 at ^
(‘‘[A court] should decide what the reasonable person would believe about a judge’s partiality
given all the relevant facts in the controversy.” ) The reasonable person standard is employed to
prevent justice-shopping and to ensure that a Justice does not, “ at the mere sound o f
controversy,” abdicate his duty to preside over all cases assigned to him, including the most
d ifficult cases.
G u tie rre z,
R osen b erg ,
976 F.Supp. at 86 (citing
E l F e lix ,
36 F.3d at 141);
see A d a
v.
2000 Guam 22, ^15-16.
The issues raised in the request for declaratory judgment relate to the powers o f the
Executive and Legislative branches as it pertains to the budget process. Individual interests o f
the Governor and members o f the Legislature are not at issue. None o f facts alleged by the
Legislature, set forth above, concern prior dealings I may have had with either party w ith respect
to the matter in controversy in this case. To the best o f my knowledge and information, the
election contest cases were the only matters in which I represented the Governor. In addition,
my former law firm represented the Governor’s wife and daughter in the defamation lawsuit filed
against Senator Mark Charfauros. M y former law firm was also Legislative Counsel to two
former members o f the 25*’’ Guam Legislature, wherein I advised them in matters completely
Page 183 Page 4 o f
unrelated to the instant case. Furthermore, I have sold my interest in the law firm o f Carbullido
& Brooks.
Pursuant to the sale contract, I am currently receiving fixed monthly installment
payments, and, in addition, I am entitled to 60% o f the receivables as o f September 30, subsequently collected. Neither my prior representation o f either party to this case, nor any
money owing to me as a result o f such representation, involve issues presented in the instant
declaratory judgment action.
Accordingly, because the facts alleged by the Legislature, as well as the facts I now
declare, concern my prior representation o f the parties in matters that are not instantly before the
court, automatic disqualification under 7 GCA § 6105 is not warranted. The fact that a party was
a former client, does not, by itself, justify recusal.
Having disclosed the extent o f my prior relationship with the parties, and that the
relationship concerned matters completely unrelated to the issues raised in the instant case, I
personally feel that I can decide the issues in the instant case impartially aid fairly. However,
my prior role as campaign political advisor to the ’98 Election Team, legal counsel to Governor
Gutierrez in the Election Contest cases, and continued entitlement to a percentage o f the
collected receivables finm my former law firm, support a conclusion that a reasonable person,
viewing these factors in their totality, may question my impartiality. Accordingly, in the interest
o f avoiding an appearance o f impartiality, I hereby recuse myself from hearing and deciding this
matter.
Dated this jig
day o f October, 2001.
Page 184 Jul-D2-
12;DDpin
From-GUAM ELEC COMUISSION
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NAME.: F. PHILIP C AR BU LLID O
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FORM FD A-1 (10/83)
G U AM
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TITLE IV , CHAPTER G O VER N M EN T CODE: OF G UAM
S C H E D U LE 2^E - IN C O M E FR O M BUSINESS INTERESTS
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SC H E D U LE 2-G - IN C O M E FR O M ESTATES AND TRUSTS
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Nature o f Interests
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Page 185 APPENDIX
13
Page 186 r
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ATTORlHt'J uu^M »ni-o u r n
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SL'PRF-iviE COURT
OF UUAf:i
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!! 47 All '

IN THE SUPREME COURT OF G UAM
IN RE:
REQUEST OF GOVERNOR
F E L IX P. C AM AC H O R ELATIVE TO
THE INTERPRETATIO N AN D
A PPLIC ATIO N OF SECTION 11 OF
THE ORGANIC AC T OF GUAM
Supreme Court Case No.: CRQ03-ANSW ER O F C H IE F JU S TIC E
F, P H IL IP C A R B U LLID O TO
7 G .C.A. § 6107 REQ UEST
FO R D IS Q U A L IF IC A T IO N

A.
Introduction

On July 3, 2003, the Attorney General o f Guam (“ the A G ” ) file d a Request fo r 7 GCA §

6107 D isqualification (“ Request” ) to prevent me from further participating in the above-captioned

case.’ The AG requests that I disqualify m yself due to financial and other interests that I have in the

subject matter and outcome o f this proceeding. He alleges the follow ing facts in support o f his

position: (1) this case w ill affect the a b ility and timeliness o f m y household to receive the retirement

monies that m y w ife . Fay Carbullido, is entitled to; (2) m y former law firm continues to have

outstanding financial obligations due from the Government o f Guam for w ork performed while I was

a practicing attomey/partner in the law firm ; and (3) I am a fu ll tim e salaried employee o f the

Government o f Guam.

T itle 7 G CA § 6107 allows a party to file an objection to ajustice’s participation in an action

or proceeding. See 1 GCA § 6107. The w ritten objection must allege “ the facts constituting the

ground o f the disqualification o f such Justice or Judge,” id., and the party who files such objection

bears the burden o f establishing the grounds which warrant disqualification. See Rippo v. State,
P.2d 1017,1023 (Nev. 1997). A request for recusal is not to be considered lig h tly because “ [a] judge

is presumed to be im partial.” Id.; see Schlesinger v. Chemical Bank, 707 So. 2d 868, 869. In fact,

[ i] f judges can be fa ir and im partial, they are under a duty not to recuse” themselves. Id. see TZ

f
'
’ M y w aiver o f the personal service requirement set forth in Long Term Credit Bank o f
Japan v. Superior Court, 2003 Guam 10, was lim ited to any and all recusal motions to be filed in
this matter on July 3, 2003.
2
8 ^ 3
Page 187
Land & Cattle Co. v. Condict, 795 P.2d 1204, 1211 (Wyo. 1990) (holding that w hile judges have

a duty to recuse themselves where appropriate, thus, “ absent a valid reason for recusal, there remains

what has sometimes been referred to as a ‘duty to s it’” ).

Pursuant to 7 GCA § 6107, in response to a party’s objection to a justice’ s participation in

a proceeding, a justice may file a “ w ritten answer adm itting or denying any or all o f the allegations

contained in such statement and setting forth any additional fact or facts material or relevant to the

question o f his or her disqualification.” 7 GCA § 6107.

Upon review o f the A G ’s Request, I herein answer the allegations presented in the A G ’s

Request and conclude that the AG has failed to provide this court w ith proper legal grounds which

mandate my recusal under 7 GCA § 6105. For the reasons discussed below, I deny the request to

disqualify m yself fi-om this proceeding.

B.

The Standard F or D isq u a lifica tio n
The grounds mandating m y disqualification, relevant to the allegations in the A G ’s Request,
are set forth in T itle 7 GCA § 6105. 7 GCA § 6105 states, in part:
(a) A ny Judge shall disqualify him self or herself in any proceeding in which his or her
im partiality m ight reasonably be questioned . . . .
(b) A Judge shall also disqualify him self or herself in the follow ing circumstances . . .
(4) Where he or she knows that he . . . or his .. . spouse . . . has a financial interest
in the subject matter in controversy . . . or any other interest that could be
substantially affected by the outcome o f the proceeding.. . .
Id. (emphasis added.)
As a threshold matter, in assessing the v a lid ity o f the allegations presented by the AG as
grormds fo r my disqualification under 7 GCA § 6105, it is important to articulate the subject matter
in controversy presented by the Governor’s request fo r declaratory judgment. In accordance w ith
such request for declaratory judgment, the subject matter o f this controversy centers around an
interpretation o f Section 11 o f the Organic A ct o f Guam (codified at 48 USC 1423a) and other local
laws. Specifically, the court is asked to clarify the meaning o f the portion o f Section 11 o f the
Organic A ct which reads, “ [pjrovided however, that no public indebtedness o f Guam shall be
authorized or allowed in excess o f 10 per centum o f the aggregate tax valuation o f the property in
Guam.” 48 USCA§ 1423a.
28
Page 188
C.
Response to A G ’ s A llegations

1.
M y w ife ’s retirement benefits.

The firs t reason the AG advances in support o f m y recusal is that I have “ a pecuniary interest

in the outcome o f this action, in which [m y] im partiality m ight reasonably be questioned” because

this case w ill affect “ the a b ility and tim eliness” o f m y “ spouse and household to receive the

retirement monies” that m y w ife, Fay, is entitled to. Request, p. 6.

A sim ilar argument was made in the case o f In re Perkins, 1988 W L 120651, *2 (N.D. 111.

1988), order vacated on other grounds, 902 F.2d 1254 (7th Cir. 1990). The court held that ajudge’s

recusal was not required where the judge’s spouse had an interest in the state teacher retirement

system because “ neither the value nor the terms o f [his spouse’s] interest in [the retirement fund]

were at issue . . . “ and thus, the judge was not required to “ recuse him self on the basis o f his

spouse's ‘financial interest’ . .

Goldberg, 98 B.R. 353, 354, n. 1 (Bankr. N.D. 111. 1989) (finding that judge’s spouse’s interest in

a teacher ’ s pension and annuity fund was not a financial interest in the subj ect matter in controversy

and thus disqualification is not required).
in the subject matter o f the controversy. Id. at *3. See also In re

Sim ilarly, after completing all e lig ib ility requirements, my w ife. Fay, retired from the

Department o f Education on January 31, 2003. Her contractual retirement benefits as a member o f

the Government o f Guam Retirement Fund, including the terms and value o f such benefits, have

vested. Although Fay has yet to receive a retirement check from the retirement fund. Fay’s

retirement benefits are not the subject matter o f the controversy in the instant proceeding, nor are

such rights and benefits contingent upon or conditioned on the issues raised in this case.

Financial interest means “ ownership o f a legal or equitable interest, however sm a ll. . . ” As

stated previously, the subject matter o f the controversy is the interpretation o f Section 11 o f the

Organic A ct as w ell as other local laws by way o f a request for declaratory judgment. It is illogical

to argue that Fay owns a legal or equitable interest in this controversy. A disposition o f the

questions o f law presented w ill not directly affect Fay’s vested retirement benefits. N or w ill such

resolution directly affect the timeliness o f the receipt o f a check from the retirement fund. In fact,

the AG correctly cites Rflufeto, etal. v. Perez, e ta l, Superior Court Case No. C V l 848-01, wherein
Page 189
the lower court has prohibited the processing o f benefit applications related to employees from

agencies which have not made the proper employer contributions to the retirement fund. It is the

low er court ruling, and not the issues raised in this proceeding, which directly affect the timeliness

o f Fay’ s receipt o f her retirem ent check. See In re Virginia Elec. & Power Co., 539 F.2d 357, 367-

68 (4th Cir.1976) (holding that where an interest would not be perfected by any judgment entered

in the litigation, the interest in the subject matter o f the controversy is contingent, remote and

speculative and is not a disqualifying financial interest or otherwise under the recusal statute).

It is speculative to argue that I, or Fay, have a financial interest in the subject matter o f the

controversy or any other interest that would be affected, much less substantially affected by the

outcome o f a proceeding w hich seeks a declaration as to the meaning o f Section 11 o f the Organic

A ct and other local laws. It is even more speculative to assert, should this court find in favor o f the

Governor, that Fay w ill receive her retirement check. See Tramonte v. Chrysler Corp., 136 F.3d

1025, 1029 (5th Cir.1998) (“ A remote, contingent, or speculative interest is not a disqualifying

financial interest... . ” ).

In sum, the AG has failed to establish that either I or m y spouse have a financial interest in

the subject matter o f the controversy, or any other interest that could be substantially affected by the

outcome o f the proceeding or that m y im partiality m ight reasonably be questioned, 7 GCA §
does not mandate m y disqualification. See Blank v. Sullivan and Cromwell, 418 F.Supp, 1,
(S.D.N.Y. 1975) (where “ facts as stated [in an objection] are insufficient as a matter o f law, the judge

shall not be disqualified, fo r there is an equal duty on the part o f the judge not to recuse him self

when there is no occasion to do so as there is for him to do so when there is.”

2.

The second ground proffered by the AG in support o f his request fo r disqualification is that

I “ have outstanding financial obligations due from the Government o f Guam,” billed through my

form er law firm . The AG argues that as a result, I have a financial interest in the subject matter o f

the controversy herein, such interest could be substantially affected by the outcome o f this

proceeding and fin a lly, my im partiality m ight reasonably be questioned .

Money owed to former law firm .
M y former law partner, M r. Terrence M . Brooks, has reviewed the outstanding receivables
4
Page 190
o f the form er law firm o f Carbullido & Brooks, LLP.
According to A ttorney Brooks, two

government agencies s till have outstanding obligations to m y law firm . Specifically, the University

o f Guam has an outstanding obligation in the amount o f $9147.77 and the Guam Preservation Trust

has an outstanding obligation in the amount o f $4273,99. See E xhibit 1, Declaration o f Terrence M.

Brooks.

However, the A G ’s argument s till fails to draw the required nexus between the financial

interest and the subj ect matter in controversy and further fails to show any other interest which w ill

be substantially affected by the outcome o f this proceeding. See 7 GCA § 6105.

First, the obligations owed by the U niversity o f Guam and the Guam Preservation Trust to

m y former law firm are owed as a result o f legal w ork performed through a contract that my former

law firm had w ith such agencies. Whatever financial interests and rights that I have w ith respect to

m y former relationship w ith the U niversity o f Guam and the Guam Preservation Trust are

contractual in nature and any rights that are subject to the law o f contracts. Therefore, the financial

interest I have is grounded in the contracts entered into between m y form er law firm and the specific

agencies and not in any subject matter in controversy in this proceeding. More specifically, the

payments due and owing and m y contractual rights therefi-om are not based on this court’s

interpretation and clarification o f the meaning o f the o f Section 11 o f the Organic A ct and other local

laws.

Second, although the AG cites to P.L. 27-19:2 which permits vendor payments in the amount

o f $5,263,609, the AG provides no reasonable basis from which to conclude that either I or my

form er law firm w ill be the recipients o f the vendor payments. See In re Virginia Elec. & Power Co.,

539 F.2d at 368 (holding that the judge’s interest as a customer o f a party in the litig a tio n was remote

and speculative because “ whether he ever gets any refund benefit w ill not be determined by him nor

by the result o f this litig a tio n ” )

Because the AG has failed to show that I have a financial interest in the subject matter o f the

instant matter and has further failed to show that I have an other interest w hich may be substantially

affected by the outcome o f this proceeding, 7 GCA § 6105(b)(4) does not provide a basis for my

recusal.
Page 191
3.
F u ll time salaried employee.

The third basis presented by the AG in support o f his request for disqualification is that “ the

C hie f Justice has the unfortunate task o f deciding the serious issues being presented, which w ill

directly affect whether he receives a salary . . .

mandate m y disqualification because I have a financial interest in the subject matter o f the

controversy, have an other interest which could be substantially affected by the outcome o f this

proceeding and lastly, m y im partiality m ight reasonably be questioned .
Request, p. 10. The AG asserts that such facts

First, the A G has not adequately shown that i f the bond financing referenced in P.L. 27-
is not completed, that the justices o f the Guam Supreme Court w ill be laid o ff, not paid their salary

or result in the closing o f the courts. The A G ’s assertions are speculative, contingent, and may be

remote. See In re Virginia Elec. & Power Co., 539 F.2d at 368..

Second, 1 do not deny that I am a fu ll tim e salaried employee o f the Government o f Guam.

However, should this fact warrant m y disqualification under 7 GCA § 6105, it log ica lly follow s that

every person who is assigned to sit on the panel for this proceeding must also be disqualified,

whether such justice is a fu ll tim e justice, part tim e justice or justice pro tern. Each person’ s salary

or payment for services w ill be derived fi:om the Government o f Guam.

The AG neglects to recognize the effect o f the w idely recognized rule o f necessity in his

argument presented.

yield to the demands o f necessity. Sim ply stated, the rule o f necessity means that a judge is not

disqualified to sit in a case i f there is no other judge available to hear and decide the case.” 46 Am.

Jur. 2d, Judges, § 91. See Olson v Cory, 636 P2d 532 (finding that the court is qualified to hear the

case when “ [i]t is im m ediately apparent that all C alifornia judges have at least an involuntary

financial interest in this case. To disqualify one would disqualify a l l . . . . ” ). Based on the above, I

deny the request to disqualify m yself on this ground.

D.

Pursuant to the m ajority view , “ the rule o f disqualification o f judges must
Conclusion
The AG has failed to establish that I have a financial interest in the subject matter o f this

controversy or any other interest which w ill be substantially affected by the outcome o f this

proceeding and has further failed to establish that m y im partiality m ight reasonably be questioned.
6
Page 192
Page 193
IN THE SUPREME COURT OF G U AM
IN RE;
REQUEST OF GOVERNOR
FE LIX P. C AM AC H O R E LA TIV E TO
THE INTER PR ETATIO N A N D
APPLIC ATIO N OF SECTION 11 OF
THE ORGANIC A C T OF G U AM
1.
M y name is Terrence M . Brooks. I make this declaration based upon m y personal
herein, I w ould respond as follow s:
I was a partner in the law firm o f Carbullido & Brooks LLP.
3.
I have reviewed Carbullido & Brooks’ lis t o f government agency receivables;
4.
It appears from my review that the Guam International A irp o rt A uthority and the Port
A uthority o f Guam have paid a ll amounts billed by Carbullido & Brooks. A ny amounts outstanding
at this tim e appear to have been billed by the firm Brooks Lynch & Tydingco LLP.
5.
The follow ing government agencies have outstanding obligations for w ork b ille d by
the Carbullido & Brooks law firm :

6.
Name o f Agency
Am ount
U niversity o f Guam
$ 9,147.
Guam Preservation Trust
$ 4,273.
Further declarant sayeth naught.
I declare under penalty o f perjury that the foregoing is true and correct.
E X H IB IT

D E C L A R A T IO N OF
TER R EN C E M . BRO OKS, ESQ.
knowledge and inform ation unless otherwise stated herein. I f called upon to testify to the matter

Supreme Court Case No.: CRQ03-001
Page 194 APPENDIX
14
Page 195 FiLSu
CrU'U
o
' >f*
'
fI /
.
i^ 4 :- n ;r 0
IN THE SUPREME COURT OF G U AM
IN RE:
REQUEST OF GOVERNOR
F E LIX P. C AM AC H O R ELA TIV E TO
THE IN TERPRETATIO N AN D
APPLIC ATIO N OF SECTION I I OF
THE ORGANIC AC T OF GUAM
A.
)
)
)
)
)
)
)
)
)
Supreme Court Case No.: CRQ03-ANSW ER O F
JU S TIC E FHO TEMPORE
B E N JA M IN J.F. C R U Z TO
7 G.C.A. § 6107 REQ UEST
FO R D IS Q U A L IF IC A T IO N
Introduction

On July 3, 2003, the Attorney General o f Guam (“ the A G ” ) filed a Request for 7 GCA §

6107 D isqualification (“ Request” ) to prevent me fi:om further participating in the above-captioned

case.^ The A G requests that I disqualify m yself due to personal bias and prejudice against him,

financial and other interests that I have in the subject matter and outcome o f this proceeding and

because m y im partiality m ight reasonably be questioned. He alleges the fo llo w ing facts in support

o f his position: (1) that I spoke out against him in a K U A M interview, p u blicly damaging his

election campaign; Request, E xhibit A (2) that I p ublicly criticized his alleged im proper conduct

in a K U A M interview ; Request, E xhibit B; (3) that I have financial and other interests in the

outcome o f this proceeding as a Government o f Guam retiree; (4) that m y im partiality m ight

reasonably be questioned because o f a “ domestic relationship” [sic] w ith M r. Applegate, who has

been indicted by the Government.

Pursuant to 7 GCA § 6107, a party may file an objection to a justice’ s participation in an

action or proceeding. See 7 GCA § 6107. The w ritten objection must allege “ the facts constituting

the ground o f the disqualification o f such Justice or Judge,” id., and the party who files such

objection bears the burden o f establishing the grounds which warrant disqualification. See Rippo
O
.
' M y waiver o f the personal service requirement set forth in Long Term Credit Bank o f
Japan v. Superior Court, 2003 Guam 10, was lim ited to any and a ll recusal motions to be filed in
this matter on July 3, 2003.
Page 196 Stale, 946 P.2d 1017, 1023 (Nev. 1997). A request fo r recusal is not to be considered lig h tly

V.

because “ [a] judge is presumed to be im partial.” Id.; see Schlesinger v. Chemical Bank, 707 So. 2d

868, 869. In fact, “ [ i] f judges can be fa ir and im partial, they are under a duty not to recuse”

themselves. Id. see TZ Land & Cattle Co. v. Condict, 795 P.2d 1204, 1211 (Wyo. 1990) (holding

that w hile judges have a duty to recuse themselves where appropriate, thus, “ absent a valid reason

fo r recusal, there remains what has sometimes been referred to as a ‘ duty to sit’” )-

In response to a party’ s objection to a justice’s participation in a proceeding, a justice may

file a “ w ritten answer adm itting or denying any or all o f the allegations contained in such statement

and setting forth any additional fact or facts material or relevant to the question o f his or her

disqualification.” 7 GCA § 6107.
I

herein answer the allegations presented in the A G ’ s Request and conclude that the AG has

failed to provide this court w ith proper legal grounds which mandate m y recusal under 7 GCA §

6105. For the reasons reflected in the follow ing paragraphs, I deny the request to disqualify m yself

from this proceeding.

B.
The grounds mandating m y disqualification are set forth in T itle 7 GCA § 6105. 7 GCA §

The Standard For Disqualification
6105 states, in part:

(l)W here he or she has a personal bias or prejudice concerning a party, or personal
knowledge o f disputed evidentiary facts concerning the proceeding;
(4) Where he or she knows that he . . . or his . . . spouse .. . has a financial interest
in the subject matter in controversy . . . or any other interest that could be
substantially affected by the outcome o f the proceeding. . . .

Id. (emphasis added.)

C.
Response to A G ’s Allegations

1.
Personal Bias and Prejudice. K U A M interview

The firs t allegation set forth by the A G ’ s Request concerns a June 13, 2002 K U A M news

broadcast concerning, among other things, the “ defiling” [sic] order issued in a low er court case to

which M r. M oylan was a party. The news broadcast concerned inform ation I provided the news

reporter articulating that w hile at a chief justice conference, none o f the justices had heard o f the

term “ defile” and actually said it sounded like a crime to destroy and erase files.
Page 197
It is im perative to point out that the A G ’ s allegations concerning bias and prejudice focus on

actions allegedly directed at him personally, p rio r to holding the office as the elected Attorney

General. The AG does not allege that I harbor any bias and prejudice against the intervening party

in this proceeding, his client, the Government o f Guam.

I deny that I harbor any bias or prejudice toward the AG and more im portantly, deny that I

harbor any bias or prejudice toward the intervening party which he represents, the Government o f

Guam. The comment attributed to me in E xhibit A o f the A G ’s Request does not manifest a

personal bias against the “ Attorney General.” Request, E xhibit A. A ll attorneys have a right and

responsibility to make any reasonable motion fo r a court’ s consideration. In the referenced case, M r.

M oylan, who was a party to the action, and his attorney, moved the court to expunge a case file . The

judge is the party responsible for granting the m otion and u tilizin g the word “ defile,” which is not

recognized by any court in the nation as a valid legal procedure. In fact, although the term “ defile”

is defined by the latest edition o f Black’s Law D ictionary, such definition by no means establishes

the legality or va lid ity o f “ defiling” a case file . See Black’s Law D ictionary (7* ed. 1999) (“ defile

(d i-fll), vb. 1. To make d irty; to physically soil. 2. To figuratively tarnish; to dishonor. 3. To make

ceremonially unclean; to desecrate. 4. To m orally corrupt (someone). 5. Archaic. To debauch (a

person); to deprive (a person) o f chastity.” ).

reporter what I thought o f the action, I did not give m y own personal feelings. I related m y concern

that maybe the fact that I had only been a judge fo r seventeen years, and relative to most chief

justices was inexperienced, I thought I would take advantage o f the over fifteen hundred (1500) years

o f combined legal experience o f the chiefjustices (fifty (50) chief justices m ultiplied by an average

o f th irty (30) years experience) to the enlighten me.

response from the ch ie f justices was one o f disbelief bordering on incredulity. None o f them had

ever heard o f any other judge “ defiling” a case by ordering the destruction o f the contents o f the file

and erasing the tapes o f the proceedings. They all thought that there must or should be a local statute

making it a crime to destroy and erase court files. I f M r. M oylan, who at the tim e was only a

candidate fo r the office o f Attorney General, had listened carefully to m y comments, the criticism

was not being leveled against him but rather the judge who granted the order and utilized a non-legal
In lig h t o f the above, when asked by the news

As I stated to the news reporter, the
Page 198
term.

It should be noted that the subject “ defiling” order was issued on M ay 1, 2001. E xhibit A

{Otden, M ay 1 ,2 0 0 1 ).! heard talk in the Judicial Center about the order but made no comment since

it was not appealed to the Supreme Court. As mentioned earlier, I decided to take advantage o f the

combined experience and wisdom o f the chief justices at our summer conference in June 2001.

I came back to Guam and retired soon thereafter w ithout pu blicly disclosing what I learned

from the chiefjustices. Alm ost one year later, it was candidate M oylan who decided to make public

an order that had la id dormant in the files w ithout the lig h t o f the cameras, by filin g a recusal motion

against Justice Frances Tydingco-Gatewood. A public discussion ensued and I made m y comments

exercising the same First Amendment rights M r. M oylan recently espoused.

D aily News, June 18, 2003, p. 3) (“ I did not violate any ethics rules and it was by a private Bar

association that was attempting to intim idate and punish me from exercising m y free speech and due

process rights, M oylan said.” );
E xhibit B (Pacific

For purposes o f attacking the va lid ity o f the A G ’s legal argument, even i f his allegations

were taken as true, courts have “ ruled that ajudge's anim osity and irrita tio n w ith a litigant's attorney

[does] not constitute bias toward a party and therefore [are] not a ground[s] fo r the judge's

disqualification.” 54 A.L.R.5th575, § 3 (1997). The AG fails to allege, much less prove, that I have

any personal bias or prejudice concerning the party he represents - the Government o f Guam.

Indeed, 7 GCA § 6105 unambiguously states that disqualification is required when a justice “ has a

personal bias or prejudice concerning a party.” 1 GCA § 6105 (emphasis added). See also Cintron

V

on the part o f the district court judge against appellant. Personal bias, to require recusal or remand

to a different judge, must be against the party, not against the attorney fo r the party.) Head v. State,

285 S.E.2d 735, 739 (Ga. Ct. App. 1981) (“ It is w ell settled that bias or prejudice o f a tria l court

against a party's attorney is not per se grounds fo r disqualification o f the judge from the case. There

is no allegation or evidence that the tria l judge bore any bias or prejudice towards the appellant.)

(citations omitted). ShaMn v. Board o f Medical Examiners, Cal. App. 2d 102,118-19 (Cal. Ct. App.

1967) ( I f we must presume bias and prejudice toward the client because o f ill-fe e lin g toward the
Union P. R. Co., 813 F2d 917, 921(9* Cir. 1987) (“ The appellant cites no facts suggesting a bias
4
Page 199
attorney, it w ould establish a dangerous rule, by which the attorney, through his own fault could

have his case transferred to another judge by quarreling w ith the court. We prefer to believe that a

judge may, w ith or w ithout cause, cordially dislike and even distrust an attorney, and yet be capable

o f doing exact justice toward his client.') (citations omitted).

2.
Personal bias and prejudice, K U A M interview

The A G ’s second allegation concerns a June 20,2002 K U A M interview , wherein the subject

o f “ defiling” was again discussed. The AG alleges that m y comments demonstrate bias and

prejudice against him and thus, m y disqualification is required under 7 GCA § 6105 is required.

I reiterate that the above cases hold that prejudice or bias toward the attorney is insufficient

fo r disqualification i f such prejudice or bias is not against the party to the action. Notwithstanding

the stature o f those cases however, I herein address the second allegation presented by the AG,

denying the existence o f any prejudice or bias against him and more im portantly, against the party

which he represents - the Government o f Guam.

W ith respect to E xhibit B o f the A G ’s Request, the highlighted sections containing direct

quotes attributed to me underscore what I stated above. Request, E xhibit B. A t the bottom o f the

first page o f the interview , my embarrassment was due to the fact that the other justices were looking

at me as i f to say, “ D id you guys go to American law schools or did you go to school period?” The

“ guys” I was referring to were the judges on Guam, not M r. M oylan because I did not te ll the chief

justices that he was an attorney or a candidate fo r Attorney General. I was only asking the chief

justices i f any o f them knew o f anyone (other judges or justices) who ever issued such an order.

M y embarrassment was due to the fact that six months earlier at the W inter meeting o f the

chief justices I had asked fo r the support o f a Resolution asking the U.S. Congress to support

Congressman Robert Underwood’s Judicial Empowerment Act. I told the chiefjustices about how

our powers were stripped by a sixteen-page rider to a garbage b ill and that no public comment was

allowed. The chief justices could not b e lie f that any legislature could behave and act that way.

Though all the chiefjustices are staunch “ state rights” advocates and oppose any U.S. Congressional

intrusion into a state’s internal affairs, I was able to get their unanimous support because they

believed in the overriding principle o f “ Judicial Independence” as a cornerstone o f a true democracy.
5
Page 200
S ix months later when recounting the story o f the “ defiling” order, many thought I came from a third

w orld country or some lawless, w ild west outpost.

W ith respect to the two paragraphs in the m iddle o f the second page o f E xhibit B o f the A G ’s

Request, except fo r m y comment, “ I guess it ’ s preferential treatment,” most o f m y concern and

criticism was directed at the judge who granted the m otion, not the party receiving the preferential

treatment. Request, E xhibit B.

Since there was no case to appeal to the Supreme Court to make a declaratory ruling on

whether there was such a practice as “ defiling,” I suggested that the matter be brought before the

Judicial Council to decide i f there is such a thing as “ defiling” and whether the practice should

continue.

M ost o f m y concern in the further fu ll paragraph was about it looking bad fo r the court to

treat employees differently from everybody else. M y closing comment was again directed at the

deciding judge, not the m oving party, M r. M oylan.

As demonstrated, I hold no bias or prejudice toward the AG nor do I hold bias or prejudice

against the party represented by the AG, the Government o f Guam. The AG has failed to provide

the court w ith any legal basis fo r my disqualification from this proceeding due to bias or prejudice

under 7 GCA § 6105. For this reason, I deny the A G ’s m otion fo r disqualification.

3.
Financial and other interest, retirement pension

The AG asserts that such facts mandate my disqualification because I have a financial interest

in the subject matter o f the controversy, or other interest w hich could be substantially affected by

the outcome o f this proceeding and lastly, m y im partiality m ight reasonably be questioned.

First, as a retired justice, I do not deny that I do receive a pension from the Government o f

Guam. However, the AG has failed to iterate how m y pension is a financial interest in the subject

matter o f this proceeding. 7 GCA

Governor’s request fo r declaratory judgment centers around the interpretation o f Section 11 o f the

Organic A ct o f Guam (codified at 48 USC 1423a) and other local laws. Specifically, the court is

asked to clarify the meaning o f the portion o f Section 11 o f the Organic A ct which reads, “ [pjrovided

however, that no public indebtedness o f Guam shall be authorized or allowed in excess o f 10 per
§ 6105. The subject matter in controversy presented by the
6
Page 201
centum o f the aggregate tax valuation o f the property in Guam.” 48 USCA § 1423a. The AG has

failed to prove ho'w a disposition o f the questions o f law presented w ill directly affect m y retirement

benefits. Such benefits are vested, contractual rights, not contingent upon any re lie f requested by

the Governor through his request fo r declaratory relief. See In re Virginia Elec. & Power Co. ,
F.2d 357, 367-68 (4th Cir.1976) (holding that where an interest w ould not be perfected by any

judgm ent entered in the litigation, the interest in the subject matter o f the controversy is contingent,

remote and speculative and is not a disqualifying financial interest or otherwise under the recusal

statute).

contingent, or speculative interest is not a disqualifying financial interest__ ” ). See In re Virginia

Elec. & P ow er Co., 539F.2dat368 (holding that the judge’s interest as a customer o f a party in the

litig a tio n was remote and speculative because “ whether he ever gets any refund benefit w ill not be

determined by him nor by the result o f this litig a tio n ” )
See Tramonte v. Chrysler Corp., 136 F.3d 1025, 1029 (5th Cir.1998) (“ A remote,

Second, even i f this fact warranted m y disqualification under 7 GCA § 6105, it logically

follow s that every person who shall be assigned to sit on the panel fo r this proceeding must also be

disqualified, whether such justice is a fu ll tim e justice, part tim e justice or justice pro tern. Each

person’ s salary w ill be derived from the Government o f Guam. In essence, the AG fails to recognize

the effect o f the w idely recognized rule o f necessity in his argument presented.

m ajority view, “ the rule o f disqualification o f judges must yield to the demands o f necessity. Sim ply

stated, the rule o f necessity means that a judge is not disqualified to sit in a case i f there is no other

judge available to hear and decide the case.” 46 Am. Jur. 2d, Judges, § 91. See Olson v Cory,
P2d 532 (finding that the court is qualified to hear the ease when “ [i]t is immediately apparent that

a ll California judges have at least an involuntary financial interest in this case. To disqualify one

would disqualify all . . . .” ). Based on the above, I deny the request to disqualify m yself on this

ground.

4.

Pursuant to the
Im partiality in question
The A G ’ s fourth allegation concerns a “ domestic relationship” between me and M r.
Applegate, in lig h t o f M r. Applegate’s indictm ent in M ay 2000.
M r. Applegate and I m utually decided to terminate our “ domestic relationship” for several
7
Page 202
reasons, most relevant being that I could no longer allow the court to suffer adverse publicity

because o f his arrests, and he should no longer suffer increased public scrutiny because o f our

relationship and m y public position.

Since the “ domestic relationship” has been discontinued, I am under no obligation to respond
to the issue o f whether I should be disqualified under 7 GCA § 6105(a).

In the interest o f fu ll disclosure and in an attempt to show how baseless the A G ’s allegations

are, I would like to lis t a ll the cases I served on since M ay 2000 (the date o f the incident alleged in

the indictment), where the Government was a party and state the case’s final disposition.

(1)
People V. Perez, 2000 Guam 15 (affirm ed two o f three convictions by the Government)

(2)
Wood V. GPA, 2000 Guam 18 (ruled for the Government (GPA))

(3)
Pac. Rock Corp. v. Dep 't ofEduc., 2000 Guam 19 (ruled for the Government (DOE))

(4)
Guam Radio Servs., Inc. v. Guam Econ. Dev. Auth., 2000 Guam 23. (ruled for the
Government (G EDA))
(5)
People V. Guerrero, 2000 Guam 26 (mled against the Government)
(6)
Perez v. Guam Hous. and Urban Renewal Auth. (GHURA), 2000 Guam 33 (mled for the
Government (G HURA))

(7)
People V. Chargualaf, 2001 Guam 1 (dissented against Government search)

(8)
People V. Fisher, 2001 Guam 2 (affirm ed the conviction by the Government)
(9)
In Re Request o f I M in a ' Bente Sing'ko Na Liheslaturan Gudhan Relative to the Application
o f the Earned Income Tax Credit Program to GuamTaxpayers ("The E IC question"), Guam 3 (m led fo r the Legislature)
(10)
People V. San Nicolas, 2001 Guam 4 (affirm ed the conviction and sentence by the
Government)

(11)
People V. Quintanilla, 2001 Guam 12 (affirm ed the conviction by the Government)

(12)
Bank o f Guam v. Michael J. Reidy, as D irector fo r the D ep’t o f Admin., 2001 Guam (mled for the Government (DOA))
(13)
People V. Jung, 2001 Guam 15 (reversed the conviction)
(14)
Angocov. Bitanga,200l Guam 17 (mled against the Government by granting w rit o f habeas
corpus)

(15)
People V. Sangalang, 2001 Guam 18 (affirm ed the conviction by the Government)

(16)
Guam Hous. and Urban Renewal Auth. (GHURA), v. Dongbu Insurance Company, Ltd.,

26
Page 203
2001 Guam 24 (ruled fo r the Government (G EDA))
(17)

As can be seen from this litany, from M ay 2000 u n til my retirem ent in September 2001,
People o f Guam v. Superior Court o f Guam v. Oliver Lintag Laxamana, 2001 Guam (ruled in favor o f the Government’s petition fo r w rit o f prohibition)
participated in seventeen (17) cases wherein the Government o f Guam was a party. O f these cases
were ten (10) crim inal cases o f which I ruled in favor o f the Government six (6) times and ruled
against the Government four (4) times.
O f the four (4) cases in w hich I ruled against the

government, three (3) o f those cases were based upon a unanimous panel decision and in only one

(1) case was I the dissenting justice . O f the six (6) c iv il cases, I m led fo r the Government in five

(5) cases and fo r the Legislature, against the Executive Branch, in one (1) case, in a unanimous panel

decision.
This record shows that I can and have been im partial to the Government’ s position in spite

o f the indictment.

C.
Conclusion

In sum, I deny any and all allegations o f bias and prejudice against the AG and more

significantly, the party whom he represents - the Government o f Guam. Even i f the court finds that

I do harbor bias and prejudice against the AG, such bias and prejudice against the attorney is

insufficient as a matter o f law fo r disqualification under 7 GCA § 6105. The AG has further failed

to show that I have a financial interest in the subject matter in controversy or any other interest in

the outcome o f this proceeding. Finally, the AG has failed to show that my im partiality might

reasonably be questioned. As a result, there is no legal basis w hich mandates m y disqualification

pursuant to 7 GCA § 6105. Accordingly, I deny the A G ’ s request to disqualify m yself from the

above-captioned proceeding.

Dated this
^ _____day o f July, 2003.
Page 204
V E R IFIC ATIO N

The undersigned, in accordance w ith 7 GCA § 6107, declares under penalty o f perjury: I am

a Justice Pro Tempore o f the Supreme Court o f Guam; I have read the foregoing Answer and know

the contents thereof; the matters stated therein are true o f m y own knowledge, except as to those

matters therein stated on inform ation and belief, and as to those matters, I believe them to be true.

Dated this
9 ^ day o f July, 2003.
10
Page 205 v ,
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Page 207 M o ylan ethics case d!§!li§§@ir
By Mark-Alexander
Pieper____________
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Pacific D a ily News
m pieper^guam pdn. com
The Guam Bar Associaticm
ethics committee dismissed a
case against Attorney Geno-al Douglas Moylan alleging
Moylan committed ethical vi­
olations before he became at­
torney gene^.
The case was dismissed
Friday w ith prejudice and by
majority vote, according to a
letter addressed to M oylan
from ethics committee Chair­
man M ikel Schwab. A case
dism issed w ith prejudice
means the charges cannot be
brought again at a lata: time.
Schwab said yesterday he
could not comment on the
case. In the letter, Schwab
states “the committee^ias not
found that you acted in any
way unethical.” BarAssocia­
tion Presidait Jay Arriola yes­
terday said because ethics
complaints are confidential,
the Bar associaticm w ill not
comment on flie matter.
An ad hoc ethics commit­
tee made up o f seven Bar
members and an ethics pros­
ecutor was created to deal
w ith allegations M o y la n
made inappropriate com rnents about a Supreme Court
associate ju stice and. de­
stroyed court reccaxis in the
.DO, rlimtioco@
.i
l>ARrMENTS
j’. Webber, ext. 100,
hpdn.com
ling questions: ext. ing questions: ext. M PDN
)c 477-nonoger (670) 234’0) 234-
A T he G uam Bar Association
ethics committee on Friday d sm issed a case, with prejudice,
against Attorney G eneral Dou­
glas M oylan that alleged he
acted unethically prior to be­
ing elected attorney general.
fanuly^uvenile court •
Moylan said he feels “vin­
dicated” by the dismissal and
that he w ill in turn drop the
petition he filed for w rit of
prchibiticHi with the Supreme
Court o f Guam
Moylan filed the petition
in M ay in an effort to halt the
proceedings, in part because
he contends the ad hoc ethics
committee lacks jurisdiction.
“W hat they alleged was
false ... they were violating
my right to fiee speech and I
was representative o f many
others. You know , i f one
lawyer can be sanctioned or
punished, then all lawyos are
open to that kind o f sanction
and for a Guam Bar Associ­
ation to sanctitm that sort of
punishment, it denigrates our
profession,” he said.
M oylan said he believes
the charges w oe a political
attack becatise the allegations
were made during his bid fw attorney generaL
Last November, the Bar
endorsed attom ^ Phil ly d -
Business ...................................... Oassifiecls ............................... Comics/Horoscope.................. Editorials/lelters ................16, Islondslyle................................. Lilieslyle .................................... T V .............................................Sports ...................................... W ealber...................................... W orld/Nolion .........................
OBITUARIES, ROSARIES
Index to odvertisemenls
THE DISMISSED
CHARGE5 : l i i l i
A O n Dec. 20,2001, Moy­
lan, who w as the legislative
legal counsel, sent a letter
to form er legislative judicia­
ry chairm an Sen. Joseph
Ada about the nomination
of a justice to the Supreme
C ourt M oylan had objec­
tions to that person’s placom ent o n th e h ig h c o u rt
bertoh and allegedly made
inappropriate comm ents.
A M o yla n w a s a lso a c­
cused o f destroying court
records in the fam ily/juvenile c o u rt
ingco as its choice for attor­
ney general.
“Since Day One, fliis case,
to m e, w as im p ro p e rly
brought I did not violate any
ethics rules and it was by a
private B at associaticm that
was attempting to intimidate
and punish me for exercising
m y fre e speech and due
process rights,” Moylan said
“I feel lik e they tried to
posecute me and punish me
ever since I ran fc«- the attor­
ney general positiem and this
is a vindication .^ m a dif­
ferent set o f metribers than
the ones who brought about
these allegations.”
RosariesLuis Nick Torres......................... Antonio 1. Son Nicolas ............Messages of Appreciation
Lorry R. A lvo re z....................... Shizuko Ono B o q a ...................MonueJ F. Duenos..................... Death notices
Maria A Cruz ..........................Manuel Flores Duenas.............. To place a paid obiluary, rosary or
memoriol, coll 477-9711, ext. 219.
For a free news obituary, coll 4779711, ext. 404.
EXHIBIT ”B'
Page 208 APPENDIX
15
Page 209 R E
I VED

S u 3 g F H 'D
IN TH E SUPREME C O URT OF G U A M
In Re: R EQ U EST OF G O VERNO R
F E L IX P. C A M A C H O R E L A T IV E
TO TH E IN T E R P R E T A T IO N AND
A P P L IC A T IO N OF SEC TIO N 11 OF
TH E O R G A N IC A C T OF G U A M
Supreme Court Case No. CRQ03-
ORDER D E N Y IN G REQUEST FO R
7 G .C.A. § 6107 D IS Q U A L IF IC A T IO N
On July 3,2003, the Attorney General o f Guam (“ AG ” ) brought amotion seeking to disqualify
Chief Justice F. Philip Carbullido and Justice Pro Tempore Benjamin J. F. Cruz from the present action
pursuant to T itle 7 GCA §6107.

The AG argues that Justice Carbullido should be disqualified because he has an interest in the
outcome o f the action based on (1) Justice Carbullido’s w ife ’s status as a recent retiree from the
Government o f Guam, (2) outstanding financial obligations the Government o f Guam owes to Justice

Carbullido’s former law firm for work performed while Justice Carbullido was still apartner at the firm , and

(3) Justice C arbullido’s status as a as a fu ll time salaried employee o f the Government o f Guam.
The AG argues that Justice Cruz should be disqualified because (1) Justice Cruz has a personal
bias and prejudice towards the AG, (2) Justice Cruz has a financial interest in the outcome o f the action

based on his status as a retiree from the Government o f Guam, and (3) Justice Cmz’s im partiality m ight

reasonably be questioned based on his relationship w ith a person under indictment in the Superior Court.
Guam’s ju d ic ia l disqualification statute provides in part:
//

//
^ 0 0 3 18 7 I
Page 210
(a) Any Judge shall disqualify him self or herself in any proceeding in which his or
her im partiality might reasonablybe questioned, but if, following complete disclosure to all
parties in the proceeding o f the reasons for disqualification, all parties agree to having the
Judge continue to sit in the proceedings, he or she need not disqualify him self or herself.
(b) A Judge shall also disqualify him self or herselfin the following circumstances,
but if, follow ing complete disclosure to all parties in the proceeding o f the reasons for his
or her disqualification, all parties agree to having the Judge continue to sit in the
proceedings, he or she need not disqualify him self or herself;
(1) Where he or she has a personal bias or prejudice concerning a party, or
personal knowledge o f disputed evidentiary facts concerning the proceeding;
(4) Where he or she knows that he or she, individually or as a fiduciary, or his or
her spouse or minor child residing in his or her household, has a financial interest in the
subj ect matter in controversy or is a party to the subj ect matter in controversy or is aparty
to the proceeding, or in any other interest that could be substantially affected by the
outcome o f the proceeding;
(5) Where he or she or his or her spouse, or a person w ithin the third degree o f
relationship to either o f them, or the spouse o f such person

(iii) is known by the Judge to have an interest that could be substantially
affected by the outcome o f the proceeding....

T itle 7 G CA §6105.
The party asserting the challenge carries the burden o f establishing that disqualification is warranted.
Rippov. State, 946P.2d 1017,1023 (Nev. 1997). “ [I]fjudges can be fair and im partial, they are under
a duty not to recuse.” Schlesinger v. Chemical Bank, 707 So. 2d 868, 869 (Fla. Ct. App. 1998). “ A

judge's duty to hear a case and keep the wheels o f justice rotating is just as strong as his or her duty to

remove him se lf or herself i f a reasonable person would not believe in his or her im partiality.” /fJa v.
Gutierrez, 2000 Guam 22, T115.
A. Justice C a rb u llid o

1. Spouse’s retirem ent fro m G overnm ent o f Guam

The AG argues that Justice Carbullido’s im partiality might reasonably be questioned because his
w ife recently retired fi-om the Department o f Education (“ DOE” ) and has yet to receive retirement money
Page 2 o f 8
Page 211 to which she is entitled. The AG argues that the outcome o f this case w ill affect the timeliness o f the receipt
o f benefits to the Justice’s household. A dditionally, the Superior Court decision in Bautista v. Perez,

C V l 848-01, orders the Board o f Trustees o f the Retirement Fund to “ decline to process retirement,

disability, or survivor benefit applications related to employment at agencies which have not made employer

contributions at the statutory contribution rate (this includes unfunded, imderflinded, and late contributions).”

The AG argues that because this case w ill determine whether payments on behalf o f DOE are made to the

Retirement Fund, the outcome o f this case w ill directly determine whether Justice Carbullido’ s w ife is
permitted to retire, giving her a direct interest in the outcome.
Ajudge shall be disqualified “ in any proceeding in which his or her im partiality might reasonably
be questioned.” 7 GCA §6105(a). Disqualification is also required when ajudge “ knows that he or she,
individually or as a fiduciary, or his or her spouse or m inor child residing in his or her household, has a

financial interest in the subject matter in controversy.” 7 GCA §6105(b)(4). Section6105 defines a financial

interest as “ ownership o f a legal or equitable interest, however small, or a relationship as a director, advisor,
or other active participant in the affairs o f a party.” T itle 7 GCA §6105(d)(4).
The subject matter in controversy here is the definition o f “ aggregate tax valuation” as used in

section 11 o f the Organic Act o f Guam. Depending on the interpretation o f section 11, the government may

be able to borrow money that would enable it to partially repay the Retirement Fund. As o f May 30,2003,
DOE owed the Retirement Fund in excess o f $20.3 m illio n , broken down as follows:
Employee Contributions
Employer Contributions
Int/Penalty
ERIP Employer Contributions
$ 3,729,372.$10,964,927.$ 759,403.$ 4,902,428.
Request for 7 GCA §6107 Disqualification, Exhibit F. Public Law 27-019, which authorizes the issuance

ofbonds, sets aside $ 10,109,866 for payments owed by the General Fund for retirement contributions for
Page 3 o f 8
Page 212 DOE. The amount earmarked toward DOE’s Retirement Fund debt is somewhat les than DOE’ s debt as
an employer. Even i f the lower court’s order were satisfied, there is no indication that the Board o f Tmstees

o f the Retirement Fund would begin paying benefits without receiving the employee contributions, interest

and penalties, and ERJP employer contributions. Thus, any interest that Justice Carbullido’s wife has in the

outcome o f the present action is merely speculative and is insufficient to require Justice C arbullido’s

disqualification. See Langdon v. Town o f Webster, 706N.Y.S.2d 547 (N.Y. App. Div. 2000) (“ Because

the Town, and not the Supreme Court Justice, is vested w ith the authority to control expenditures and/or

refunds o f water-related monies, any economic interest o f the court in the present matter is ‘merely possible

or contingent’ and thus insufficient to warrant recusal.” ) (citations om itted); In re Virginia Elec. And
Power Co. v. Sun Shipbuilding and D ry Dock Co, 539 F.2d 357, 368 (4th Cir. 1976) (holding that a
judge’s interest as a customer who might be entitled to a refund firom one o f the parties was too remote and

speculative to require disqualification because “ whether he ever gets any refund benefit w ill not be

determined by him nor by the result o f this litigation.” ).
2. M oney owed to form er law firm
The AG also argues that Justice Carbullido should be disqualified because the Government o f

Guam owes outstanding financial obligations to Justice Carbullido’s former law firm for work performed

w hile Justice Carbullido was s till a partner at the firm . Although $5,263,609 is set aside in the bond
proposal for “ General Fund Vendor payables through 9/30/02,” this money is for “ payments owed by line
agencies fo r vendor payables $2,519,750; payments owed by Department o f Adm inistration to
MIP/Medicaid vendors $2,219,254; payments owed by the Department o f Education for vendor payables
$524,335.” P.L. 27-019. Justice Carbullido’s former law firm is owed moneyby the University o f Guam
and the Guam Preservation Trust, neither o f which are line agencies. Thus, even i f the bond were issued
Page 4 o f 8
Page 213 ^ as a result o f the present case, P.L. 27-019 contains no indication that Justice Carbullido’s law firm would
be paid out o f any money that the government receives from the bond. Accordingly, the fact that the
3 II
^
government owes money to his former law firm is insufficient to disqualify Justice Carbullido.

3. F u ll tim e employee o f Governm ent o f Guam

The AG argues that Justice Carbullido has an interest in the outcome o f the litigation because he
is a full time salaried employee o f the Government o f Guam who may not get paid i f the bond is not issued.
^
As discussed above, the subject matter o f the present action is how to define “ aggregate tax valuation” as

used in section 11 ofthe Organic ActofG uam .JusticeCarbullidoarguablyhasaninterestin the subject

matter because depending on the outcome o f the case, “ the government is lik e ly to face mass lay-offs,
payless paydays and/or the shutdown o f certain government operations.” Request for Declaratory
Judgment, p. 3. This interest could lead a reasonable person to question Justice Carbullido’s im partiality.

The interest that Justice Carbullido has in the outcome ofthe litigation is the same interest that eveiyjustice

who could be assigned to the panel would have. Since a panel o f justices who are unaffected by this interest
could not be constituted, the rule o f necessity” applies to prevent the disqualification o f anyjustice on this

ground.
2000 Guam 22, ^14. “ The rule ofnecessityprovides that ajudge is not disqualified from
20 I adjudicating a cause because ofpersonal fmaneial interest i f there is no other judge or court available to
21 II
hear and resolve the cause.” Olson v. Cory, 636 P.2d 532 (Cal. 1980); see also Ada, 2000 Guam 22.
I f Justice Carbullido could be disqualified because he receives a salary from the Government of Guam, then
24 I
same reasoning would serve to disqualify every person appointed to the panel since eachjustice, retired
25 I or not, fu ll time orpro tempore, would derive his salary from the Government o f Guam and thus could be
said to have an “ interesf ’ in the litigation. The rule ofnecessity prevents such aresult, which ifperm itted

Page 5 o f 8
Page 214
would deny the parties the right to have their dispute settled by the court.' Accordingly, the fact that Justice
Carbullido receives a salary from the Government o f Guam is an insufficient basis for his disqualification.

B. Justice C ruz

1. Personal bias and prejudice

The AG argues that Justice Cruz has a personal bias and prejudice against the AG that warrants

the disqualification o f the justice. The allegations o f bias are based on comments that Justice Cruz made

to K U A M News (“ K U A M ” ) in June 2002. Justice Cruz told K U A M that none o f the justices at a chief

justice conference he attended had heard o f defiling a case and that destroying and erasing court files

sounded lik e a crime. Request fo r 7 GCA §6107 D isqualification, E xh ibit B.
“ Personal bias, to require recusal or remand to a different judge, must be against the party, not
against the attorney for the party.” C/ntra«v. Union Pacific R. Co., 813 F.2d917,921 (9th C ir. 1987).

“ Bias against an attorney is not enough to require disqualification... unless petitioners can show that such

a controversy would demonstrate a bias against the party its e lf ” // j re Beard, 811 F.2d 818,830 (4th Cir.
1987). For bias against an attorney to require disqualification, “ it must be o f a continuing and personal
nature and not sim ply bias against the attorney because ofhis conduct.’Vr/. I f alleged bias or prejudice

against a party’ s attorney, rather than the party himself, were per se grounds for disqualification:

an attorney who felt him self to be the object o f such bias would be the livin g embodiment
o f a lim itation on the tria l judge's power and responsibility to hear cases w ithin the
jurisdiction o f the judge's court. I f the attorney and his relationship w ith the judge is
determinative o f whether or not that tria l judge is “ qualified” to hear cases which are
otherwise w ithin his court's jurisdiction, that attorney, depending upon whether or not he
moved to disqualify on these grounds, would have the ultim ate power to confer upon or

’ A lth o u g h th is case could th e o re tic a lly be m ove d outside o f G uam , o r ju s tic e s fro m other ju ris d ic tio n s brought
in , the rule o f necessity is ap plicab le nonetheless because e v e ry ju s tic e ap po inte d on G uam w o u ld be s im ila rly affected.

B o lin V. S to ry , 225 F.3d 1234 ( 1 1th C ir. 2000) ( “ [T ]h e fact that it is po ssib le to convene a panel o f disinterested ju dg es
ou tside the c irc u it does not require transfer o f the case o r preclude the a p p lic a tio n o f the ru le o f necessity.” ); see a ls o

O ls o n , 636 P.2d 532 (h o ld in g that d is q u a lific a tio n was n o t warranted despite a ju d g e ’ s fin a n c ia l interest where “ a ll
C a lifo rn ia ju d g e s have at least an in v o lu n ta ry fin a n c ia l interest in th is case. T o d is q u a lify one w o u ld d is q u a lify a ll. . . . ” ).
Page 6 o f 8
Page 215 deny to the judge this jurisdictional power and authority. I f this were so, in some
circumstances it could be in the attorney’s “ interest” to cultivate the judge’s prejudice so
as to avoid appearance before him. Such an attorney could offer clients not only legal
advice and representation but also their “ choice” o f judges. Obviously this form o f “judge
shopping” is not a power which the bar can exercise over the bench o f this state. The
solution to such a problem is that an attorney who fears that his client may suffer because
o f the judge's prejudice against counsel should decline the employment or should withdraw
from the representation as being in the best interest o f the client.
Mann v. State, 269 S.E.2d 863, 864 (Ga. Ct. App. 1980).
The O ffice o f the Attorney General intervened on behalf o f the Government o f Guam and not as
a party to the present action. Accordingly, even i f Justice Cruz’s statements manifested aprejudice against
Doug Moylan, the current AG, that alone would be insufBcient to warrant disqualification. The AG has not
shown that a bias, i f any, that Justice Cruz has against the AG would prejudice the party the AG represents,

the Government o f Guam.

2. F in a ncia l interest
The AG argues that Justice Cruz is a retired justice receiving apension from the Government o f
Guam that would be threatened i f the Government o f Guam is unable to meet its frnancial obligations. Thus,

the AG argues that Justice Cruz has a financial interest in the outcome o f this case that requires his

disqualification. As discussed above, although Justice Cruz’s im partiality may be questioned on this basis,

the widely recognized ‘ ‘rule o f necessity” prevents the disqualification o f Justice Cruz on the ground that he
receives a pension from the Government o f Guam.
3. Personal relationship to a p a rty under ind ictm e n t
The AG argues that “7F the Justice Pro Tempore s relationship continues with Mr. [Johnny Paul]

Applegate, the fact that an outstanding warrant o f arrest continues ... can lead a reasonable person to

conclude that the Justice Pro Tempore’s im partiality is in question.” Request for 7 GCA §
D isqualification, p. 4. Justice Cruz states in his verified answer that his relationship w ith Applegate has
Page 7 o f 8
Page 216 ended. Thus, the AG fails to show how the indictment o f Applegate results in Justice Cruz’s im partiality,
or the appearance o f im partiality, against the Government o f Guam.

For the reasons set forth above, the motion to disqualily Chief Justice Carbullido and Justice Pro
Tempore Cruz is hereby D ENIED.

RICHARD H. BENSON
Justice Pro Tempore

I (jo hdreljy Cff'Hly jhai ihc forcgoiuju
is ft fu ll iruc and correct copy of ihc
original on l i l r in rlic office of the
clerk of the
Court o f Guam
f>3{ed ftJ
(Juam
JUL 0 6 \ J
f)epufy Clerk, Sujm'.EUc (x)ur1 of Guam

Page 8 o f 8
Page 217 APPENDIX
16
Page 218 Page
GU^S T
T
Sec.
1,
6105,
Grounds
of

d is q u a lific a tio n ,
*3712 7 G.C.A. § GUAM CODE ANNOTATED
T IT L E 7. C IV IL PROCEDURE
D IVISIO N 1. COURTS AND JU D IC IA L OFFICERS
C H A P T E R 6. JU D IC IA L OFFICERS, JUSTICES AND JUDG ES
Current through P.L 26-72 (2001)
§ 6105. Grounds of disqualification.
,
.
.
T
V, 11 riic rm a lifv h im s e lfo rh e rs e lfin any
^
S d t i “f
p r o c e e d in g
'» a ll
A T ri
in
w hich his or h er im p a rtia lity m ig h t reasonably be
p ra w '-iip g « f •>>'
d is q u a lific a tio n , a ll parties agrc
la 11 taicn a is a u a lifv h im self or herself in the fo llo w in g circum stances, but if, fo llo w in g co m p lete disclosure to
a llp a r iS f n S ^ o t lt o f —
proceedings, he or she need n o t d isq u alify h im self or herself.
(1 ) W h e re he or she has a personal bias or prejudice concern ing a p arty, o r personal know ledge o f disputed
e v id e n tia l,
served as a la w y e r in the m atter in co ntro versy, o r a law yer w ith
w hom he or s h e ^ e ^ u s ly p r L .i c e d L sensed during such association as a law yer or e ith e r has been a m aten al witness
concerning the m a t ,^
governm ental em ploym ent and in such c a p a c ity particip ated as counsel,
advisor or m aterial w itn ess concerning the proceeding o r, as such govenim ent em p lo yee, expressed an o ffic ia l opim on
concerning the

1,
u -
[r c o r o v e m y or
u
o r as a fid u ciary, o r h is o r her s ^ n s e o r
p™
cphnld has a financial interest in the subject matter in contro versy or IS a party to the subject matte
p a rty to the proceeding, or in any other interest that could be substan tia lly affected b y the outcom e o f
the proceeding;
^
or the spouse o f such person:
^
d egree o f relationship to either o f them
proceeding, o r an o ffic e r, d irecto r, o r trustee o f a party;
( ii) is acting as a law yer in the proceeding,
r r . j u +i,
(iii) is know n by the Judge to have an interest that c o u ld b e substantially affected b y the
outcom e o f the proceedm g^^^^
know ledge lik e ly to b e a m a te ria l w itness in the proceeding.
(c ) A Judge should in fo n n h im s e lf or h erself about his or her personal and fid u c ia y in terests and that o f his o r her spouse
I
and m ino r children residin g in his o f her household.
(d ) F o r the purpose o f this section the fo llo w in g words or phrases shall have the m eanings in d icated:
fl j P
ro
ceed
in
gin
clu
d
espre-trial, app
ellatereviewor other sta
g
eoflitigation;
J
(2 ) T he degree o f relationship is calculated according to the c iv il law system ;
C o p y rig h t
(c)
West
G roup

No
c la im
to
o rig in a l
U.S.
G ovt,
w orks
Page 219 Page
GU ST T .
7,
Sec.
6105,
Grounds
of

d is q u a lific a tio n .
G") F id u c ia ry includes such relationships as executor, adm inis trator, trustee an d guardian,
(4 ) F in a n c ia l interest means ownership o f a legal or equitable interest, h o w e v e r small, o r a relationship as a
director advisor or other active participant in the affairs o f a p arty, except that:
,
director, adviso
Ownership in a m utual or com m on investm ent fond th a t holds secunties isnot a
finan cial in te re s t in such securities unless the Judge participates in the m anagem ent o f the fond;
.
(ii) A n o ffice in an educational, religious, charitable, fra te rn a l or c iv il organization is not
a finan cial in te re s t in securities held by the organization;
(iii) The proprietary interest o f a policyholder m a m u tu a l insurance eom pany or a
depository in a m u tu al savings association or a sim ilar pro prietary interest, is a fin a n c ia l interest in the orgam zatio
only i f the o u tc o m e o f the proceeding could substantially a ffect the value o f foe in terest;
(iv ) Ownership o f governm ent securities is a fin an cial in te re s t in the issuer only i f the
outcom e o f th e proceeding could substantially affect the value o f the securities.
(5 ) J u d g e means any Justice o f the Supreme C ourt or Judge o f the S u p en o r C o u rt.
M s e J to o l l p a n ^ o o d o ll oj™ . ro
o/
Z S T /Z
m
^ /cZ
o f C o m - liso.m s dosirabU to adopt the US. tow I , this respect. Farther, the latest mtrsloa
P rZ e d a re Is a e ilto M e as a p d d . to Guam heeoas. o f Its maay ameadmeats and references to eoaru tohleh do not erlst an
G u a m .
*3714 NOTES, REFERENCES, A ND ANNOTATIONS
1985 Comment- It should be noted that this Section would disqualify a judge in a proceeding where this judge is a member o f the Board of
1985 Comment. It s
Defender Service Corporation appears as a party to the action, m contrast to where rt appears as
Directors of one
the judge would not be d^qualified. However, it seems that a ju d g e should be disqualified in the former
in' ,he p recedin g, o f ,hp body „ d , , u i « probably. i„ ,he proc.odiogs which f . » . pan o f ,ha d.apa.. ,n
question. Such disqualification is not clearly covered under § 170 of the Guam CCP.
Subsection (e) o f the federal law is omitted here because some attorneys believe that no judge should be automatically disquaMed for any o f
,ha reaaop. . . . I c d f f t S t e L
la ro a d c o all pahies -od all p a » « a g r „ .h a n h o ja d g . ahoald coaiinaa. Soch a a,matron baa
and drajodg.
continued to sit by agreement o f all concerned. This procedure should be allowed to continue.
C o p y rig h t
(c)
West
G roup

No
c la im
to
o rig in a l
U.S.
G ovt,
w orks
Page 220 APPENDIX
17
Page 221 F IL E D
O ffic e 3f th e G o v e r n o r
llb g a l S e c tio n
R e c e iv e d by:^
D a te ; _ _ _ _ _ _ _
T im e:
DATBt,
IN ra E S U ^ R j^ ^pURT O
lOURT, GUAM
CLERK
" ^ TERRITORY OF GUAV

^
Supreme Court Case No. CRQ96-
In re:
REQUEST OF GOVERNOR
CARL T.C . GUTIERREZ FOR
A DECLARATO RY JUDGMENT
AS TO TH E O R G A N IC ITY
OF G U A M PUBLIC LAW 22-
y
ORDER
OCT I
si !
m 'U D L ' i )

On October 7, 1996, the Governor of Guam filed the following request for a Declaratory
Judgment with the Clerk o f the Supreme Court o f Guam:

COMES N O W , Carl T.C. Gutierrez, the governor of Guam, pursuant to
G.C.A. §4104 and Rule 27 of the Rules of Appellate Procedure for the Supreme

Court of Guam, and requests a declaratory judgment from the Supreme Court of

Guam as to the following question of great public interest affecting the powers and

duties of the Governor and the operation of the Executive Branch:

W hether Public Law 22-42, establishing an elected board of education,

violates the Organic Act of Guam in that it usurps the authority of the governor of

his executive branch authority over education?

Dated this 7th day of October, 1996.

/ss/
C A R L T.C. G U T IE R R E Z
GOVERNOR OF G U A M
This request presents the first instance in which 7 GCA §4104 has been invoked. The provision
permits either the Governor or the Legislature to request Declaratory Judgments from this Court in
matters affecting the exercise of their respective authorities. Enacted as part o f the Frank G. Lujan
Memorial Court Reorganization Act of 1992 (P.L. 21-147), §4104 provides for the by-passing of normal
legal processes and the obtaining of immediate consideration by the Guam Supreme Court, but its
-1 -
Page 222 Order / Case No. CRQ96-00 _ .irHe: Request o f Governor Carl T.C. Gutierrez For A Decl.
Judgment As To The Organicity o f Guam P.L, 22-
application is limited to special circumstances: “The Declaratory Judgments may be issued only where

it is a matter of great public interest and the normal processes o f law would cause undue delay.” (7 GCA

§4104).

Rule 27 of the Rules o f Appellate Procedure for the Supreme Court o f Guam reiterates this

requirement and places upon the Chief Justice the duty of determining the threshold issues presented.

The two prongs of the test, great public interest, and undue delay resulting from normal legal processes,

are discussed respectively below.

First, is the question o f the elected school board’s organicity one of great public interest? The

term “public interest” apparently signifies an importance of the issue to the body politic, the community,

in the sense that the operations o f the government may be substantially affected one way or the other by

the issue’s resolution. Cf. In re Opinion of the Justices, 217 Mass. 607, 105 N.E. 440, 441 (1914) and

In re Opinions of the Justices, 314 Mass. 767, 49 N.E.2d 252, 255 (1943), in which the Supreme

Judicial Court o f Massachusetts discusses the requirements o f their somewhat analogous constitutional

provision*. The Massachusetts language requires their high court to provide advisory opinions “upon

important questions of law, and upon solemn occasions.” See 105 N.E. 441 (quoting from Massachusetts

Constitution, Chap. 3, Art. 2). These cases construe that language to mean that the issue presented must

be significant in substance and relate to a presently existing governmental duty borne by the branch of

government that requests the opinion.

Applying that standard to the present query, this Court takes judicial notice o f the fact that the

Department of Education is one of the largest departments in Guam’s Government and has a mission that

'The Massachusetts language, drawn from Art. 2, Chap. 3 of that state’s constitution is analogous to ours
conceptually, if not in its wording, though there are some differences between the two. As noted above, the
Massaehusetts provision requires that state’s highest court to give advisory opinions, whereas our Court is called
upon to render Declaratory Judgments. However, the 1985 Source and Comments notes to 7 GCA §4104 indicate
that Massachusetts is one of the two significant sources for that section and suggests through discussion that the
purpose of section 4104 is to decide the types of issues that Massachusetts has dealt with in this manner.
-

-
Page 223 Order / Case No. CRQ 96-00i / nrRe: Request of Governor Carl T.C. Gutierrez For A Declk.
Judgment As To The Organicity o f Guam P.L. 22-
difsctly impacts on nearly eveiy family on the island, fubiis Law
entrusts management of to t

Department to the elected school board which is placed in issue here. Perhaps more to the point, this

Court is aware o f the extensive governmental resources that were involved in the process o f 22-42’s

evolution. These included the previous creation of an elected school board that was ruled inorganic^,

action by Congress to amend the Organic Act to make specific provision for the Guam’s school system^

the enactment o f Public Law 22-42 itself, and extensive litigation, challenging various aspects o f its

application, in the Superior Court of Guam^

The issue at hand is obviously one o f consequence in terms o f governmental function and

resources. It is also clear that the Governor has standing to seek clarification of 22-42 insofar as it may

impact on his exercise o f authority. Although the concept of “great public interest” does not lend itself

to precisely drawn boundaries, it is clear in this instance that the issue presented falls within it. This is

^Guam Public Law 14-1, in conjunction with former Government Code §5105, created an elected school

board that was held inorganic mNelson & Wolfv. Ada, et al., Guam Superior Court Case No. S.P. 192-87)(Findings

of Fact and Conclusicms of Law of Judge Peter C. Siguenza, dated November 6, 1987), ajfd, 878 F.2d 277 (9th Cir.

1989).

^See 48 U.S.C.A. §1421g(b), which was enacted through Sections 5 and 13(a)(1) of Pub. Law 99-396, Act
of August 27,1986. This provision was not made retroactive and, therefore, regardless what significance is given
the amendment, it could not cure the deficiency in the elected school board created by Guam Public Law 14-1 which
was inorganic at its inception.

“The Superior Court cases involved in these challenges include: Tainatongo vs. Board ofEducation, et al,

SPOl 14-95; Gutierrez v^. BoardofEducation, et al. CV1383-95; Gutierrez vs. Board ofEducation, et al., CV1856-

95 and Board of Education vs. Rivera, SP0024-96. Judge Frances Tydingco-Gatewood entered a consolidated

Judgment, on September 11,1996, in these matters. An Amended Judgment was filed on October 9,1996, which was

made nuncpro tunc to the date of the earlier determination.
-3 -
Page 224 For A Decla
Order/Case
No. C R Q 96^0.
' Judgment As To The Organicity of Guam P.L. 22-
Ae: Request o f Oovemor Carl T.C. Gutierrez
a question o f great public interest.
Turning to the issue o f undue delay, this concept also lacks bright line demarcation. The question
requires one to estimate, as a practical matter, the relative difference in speed for an issue depending on
whether it travels the “normal processes of law” route, or that provided by 7 GCA §4104. This standard
bears the additional requirement that the anticipated delay be undue, that is to say, excessive or
inappropriate.
The present circumstances are unique in framing the issue of delay. 7 GCA §4104 was intended
to provide a fast track for the initiation of cases before the Supreme Court o f Guam so that rulings could
be obtained on important issues of law without time consuming litigation in the inferior court. Ironically,
the issue presented by the Governor’s request has already been litigated and decided in the Superior

Court of Guam. It is available for this Court’s consideration on direct appeal. In fact, at this point, such

appeal is already pending. On October 10, 1996 the Guam Attorney General filed a notice of appeal as

to the Amended Judgment that is referenced in note 4, supra.

While one might argue that the declaratory judgment procedure would be faster than an appeal

from this point forward, the converse may well be true. 7 GCA §4104 and Rule 27 both require that

“interested parties” be noticed and given an opportunity to be heard prior to this Court’s deciding the

issue presented by Governor Gutierrez. There were numerous parties to the related litigation in the

Superior Court and the number of parties, who may claim an interest justifying their participation in the

Section 4104 proceedings, could meet or exceed those figures. Just the process of determining which

parties should be permitted to be heard may be time consuming. Briefing, argument and decision would

follow there as they would in a direct appeal.

Moreover, the Attorney General of Guam can take steps to accelerate the regular appeal process.

Rule 7(j)(2) o f the Rules O f Appellate Procedure for the Supreme Court o f Guam addresses expedited

transcription. And even though this Court has been operational for only a few months, it has already

issued orders expediting briefing and argument in instances where delay might prejudice a party. Any

party can seek the benefit o f expedited processing.

This analysis might be different if the request for a Declaratory Judgment had preceded the trial

judge’s filing of a Judgment on September 11, 1996. It would certainly have changed the equation
-4 -
Page 225 Order / Case No. CRQ96-Ov

.rRe; Request o f Governor Carl T.C. Gutierrez For A Deci.
Judgment As To The Organicity o f Guam P.L. 22-
regarding relative delay.
It is
noteworthy that courts in other jurisdictions have expressed concern generally about

answering requests for opinion from a Governor (or Legislature), when the issue has already been

addressed in actual litigation, even where the request does not arise from a litigated case. See In re

Answer o f the Justices to the House of Representatives, 375 Mass. 790, 374 N.E.2d 1345,
(1978Xnoting that the court’s decision not to answer the question presented, regarding the immunity of

witnesses at legislative hearings, was further supported by the issue’s having been addressed in previous

litigation, apparently because this meant some guidance already existed on the question). See also

Opinion of the Justices, 447 So.2d 1305, 1307-08 (Ala. 1984)(declining to provide an advisory opinion

where the issue raised was addressed in pending litigation) and In re Request ofJanklaw, 530 N.W.2d

367, 369 (S.D. 1995)(identifying several past determinations o f the South Dakota Supreme Court where

requests for advisory opinions were denied because the issue raised was addressed in pending litigation).

It is unnecessary to resolve here whether this Court could appropriately accept jurisdiction, under

7 GCA §4104, o f an issue that has been litigated to judgment in the court below. Such a procedure

threatens a de facto reversal of the trial judge without a review o f the proceedings reversed. This may

have adverse consequences for our legal community. As the Appellate Division of the District Court of

Guam recently observed, “One of the uglier spectacles in any system o f jurisprudence is that o f two or

more courts solemnly deciding questions of law in divergent and inconsistent ways.” Board of Education,

et al vs. Rivera, D C . No. SP0024-96, Order of October 16,1996, p.4, (D.Guam App. Div.). While this

Court obviously has the authority to reverse a decision from the inferior courts of Guam, direct appeal

provides a mechanism that guards, to some extent, against divergence and inconsistency.

The substitution of a section 4104 proceeding for direct appeal in a case already adjudicated can

result in sudden and unexpected changes in the framing of issues and the legal footing o f the parties,

which could prejudice individual litigants. This would weigh against exercise of our authority under

section 4104. C f Opinion of the Justices to the Senate, 396 Mass. 1211, 486 N.E.2d 1109, 1110 (1985),

noting that under their advisory opinion procedure potentially affected persons are not before the court

during the determination o f such issues and that, in fairness, opinions should not be provided where

prejudice may result. While our system provides for interested parties to be heard on the request for
-5-
Page 226 Order / Case No. CRQ96-
Re: Request o f Governor Carl T.C. Gutierrez For A Decla
Judgment As To The Organicity o f Guam P.L. 22^
1 Declaratory Judgment, this does not change the fact that the posture of the case is altered and the non­
prevailing party given a clean slate to draw upon. Sbs also Opinion of the Justices, 431 So. 2d 496 (Ala.

1982), where the Supreme Court of Alabama held that it would not render an advisory opinion to their

governor, where the issue was being litigated in a pending case, even though the case was filed after the

request for opinion -- in large part due to concern for the rights o f the litigants.

While these concerns suggest that this Court should avoid exercising section 4104 jurisdiction

in circumstances like those presented*, this issue is not reached here. Because there is no basis for finding

that significant delay will result firom proceeding through the regular course o f appeal, we are barred from

exercising jurisdiction in this matter, regardless o f other reasons supporting such a refusal.

In summary, this Court does not have the authority to consider the issue presented because one

o f the two exceptional circumstances required by law to activate our consideration o f a Declaratory

Judgment is not present®. The law therefore dictates that this matter be considered as a regular appeal.

Accordingly, consideration o f the question presented for Declaratory Judgment is respectfully

DENIED.
IT IS SO ORDERED this
(A.
day o f October, 1996.

’Obviously, where the issue presented amounts to a crisis, the analysis under the “xmdue delay” prong would

likely be quite different. Cf Answer ofthe Justices, 358 Mass. 833,265 N.E. 2d 590, 592 (1970) (suggesting that,

where a public emergency exists, thejurisdictional constraints of their advisory opinion authority might be excepted.)

’Where thejurisdictional prerequisites of section 4104 are not met, we lack authority to render ajudgment

on the question. Compare In re Advisory Opinion to Governor Request, 388 So.2d 554, 555-56 (Fla. 1980)(so

construing the provisions of Art. IV, Section 1(c) of the Florida Constitution) with 1985 Source and Comment

Notes following 7 GCA §4104 (identifying the preceding Florida provision as the primary source for Guam’s
provision).
-

-
Page 227 APPENDIX
18
Page 228 Page C ita tio n /T itle
GU ST T . 1 1 , S e c .
24102,
D e fin it io n s .
*8853 11 G.C.A. §
Guam Code Annotated
T IT L E 11. FINAN C E & TA X A T IO N .
D IV IS IO N 2. TAXES
CHAPTER 24. R EAL PROPERTY TA X
A R TIC LE 1. GENERAL PROVISIONS.
Current through P.L. 26-
§ 24102. Definitions.
Unless the context otherwise requires, the following provisions shall govern the construction o f this Chapter.
(a) Property means land and improvements on land;
(b) Assessee means the person to whom the property or a tax is assessed;
(c) Lien date means the time when taxes for any year become a lien on the property; this is noon on the first Monday in March
in the year of assessment;
(d) Tax deeded property means property which has been sold to the government for taxes;
(e) Tax sold property means real property which has been sold to the government by operation of law for taxes and from which
the lien of such taxes has not been removed;
(f) Value, full cash value, and cash value mean thirty-five per cent (35% ) of the appraised value; appraised value means the
amount at which property would be taken in payment o f a just debt from a solvent debtor.
(g) The term roll shall mean and include any schedule of assessments on property subject to the payment of tax levied by this
Chapter;
(h) Property shall be described for tax purposes in any manner sufficient to identify it: in the assessment, advertisement and
sale of property for taxes, any abbreviations may be used if an explanation thereof appears on each page of the roll, or m the front of
each book of the roll, or if they are explained in the document in which they appear;
(i) I f any act is required to be performed by this Chapter on or before a certain date and the date falls on a Sunday or holiday,
the act may be performed on the next business day following with the same effect as if performed on the specified date;
(j) No act in any of the proceedings for raising revenue by taxation is illegal by reason of informality or because not completed
within the required time;
(k) Board means Board of Equalization.
C o p y r ig h t
(c )
W e st G ro u p 2003 No c la im
to
o r ig in a l U.S.
G o v t, w o rk s
Page 229 Page
GU ST T .
11,
Sec.
24102,
D e fin itio n s
SOURCE: GC § 19301.
C o p y r ig h t
I
(c)
W e s t G ro u p 2 0 0 3 No c l a i m
to
o r ig in a l U.S.
G o v t,
w o rk s
2
Page 230 APPENDIX
19
Page 231 Property Information: A Guam Case Study^
W. Nicholas Captain, MAI, CRE
USA
' A p r i o r v e r s i o n o f this paper se^ed as the basis fo r a W orkshop Session ^esejhed at fte
ConCTCSs o f Real Estate Appraisers, Valuers and Counselors on October 16, 2002 Kuala Luinpur
M a l^ s ia . The paper was updated and m odified fo r subm ission to The Counselors o f Real Estate periodical
“ Real Estate Issues” and/or related publications.
Ex h i b i t .
C
Page 232 BIOGRAPHY FOR W. NICHOLAS CAPTAIN, MAI, CRE
W Nicholas Captain is the President of The Captain Company, a real estate
service corporation based on Guam.
His firm specializes in providing valuation,
consulting, brokerage and investment services. Mr. Captain is the
'"eal estate
expert in Micronesia to hold the prestigious Counselor of Real Estate, or CRE,
desiqnation He also holds the Appraisal Institute’s MAI designation and is licensed to
appraise real estate in Guam, the CNMI and Hawaii. His background includes seven
years of training at one of Hawaii’s most experienced real estate corisulting fim s. He
currently serves as the Appraisal Institute’s Ambassador to Micronesia, the Philippines
and Indonesia, and he holds a seat on the Institute’s International Relations Com rnitt^.
Mr. Captain recently completed several major international real estate studies including
an analysis of three remote atolls in the Marshall Islands, the appraisal of neaily all
public lands in the Republic of Palau, and the appraisal of the Rainmaker Hotel in
American Samoa. In the early 1990s, Mr. Captain completed the appraisal of all
privately owned real estate on Guam for government property tax purposes. He is the
author of The Captain Company News, host of the Microriesia Real Estate Investrnent
Conference and he periodically instructs seminars and publishes articles on real estate.
SYNOPSIS
Real estate market knowledge (or property information) is the critical asset to real estate
service companies. A thorough understanding of property information by valuers and
consultants can lead to more stabilized and efficient real estate markets. Professior^l
real estate experts continuously strive to gain a better understanding of property
information, typically within selected geographic boundaries. This paper presents a
Guam case study. The Island of Guam, although small in size, presents mariy
interesting examples of the boom and bust cycles experienced in real estate markets. Iri
completing a Guam property information case study, we considered Guam s physical
and demographic characteristics, economic forces, historic market overview, prevailing
market conditions and future expectations. Guam’s current real estate market, as
compared with other great financial disasters, is presented in this paper. Through the
detailed study and investigation of Guam’s real estate market, property information ^ n
be used to support acquisition, disposition, lending, foreclosure, litigation and other
important real estate decisions.
Page 233 Property Information: A Guam Case Study
INTRODUCTION
Information is defined by Webster’s Dictionary as, “...knowledge obtained from
investigation, study, or instruction". Real estate market knowledge (or property
information) is the critical asset to real estate service companies. A thorough
understanding of property information by valuers and consultants can lead to more
stabilized and efficient reai estate markets.
Professional real estate experts
continuously strive to gain a better understanding of property information, typically
within selected geographic boundaries.
The investigation of property data and the study of real estate markets in
isolated locations can be both difficult and rewarding. The island of Guam, an
unincorporated territory of the United States, involves a small, isolated real estate
market which is highly susceptible to regional external forces; particularly from Japan.
Although officially U.S. soil, Guam is “America in Asia” and U.S. economic influence is
generally limited to interest rate policies and military activity.
In completing a Guam property information case study, we considered Guam’s
physical and demographic characteristics, economic forces, historic market overview,
prevailing market conditions and future expectations. Through the detailed study and
investigation of Guam real estate market data, property information can be used to
support acquisition, disposition, lending, foreclosure, litigation and other important reai
estate decisions.
PHYSICAL A N D DEMOGRAPHIC CHARACTERISTICS
Guam is a tropical island located in the Western Pacific, almost due south of
Tokyo and directly east of Manila. Guam is Micronesia’s largest island and its land
area of 213± square miles is roughly the size of Singapore. Guam benefits from
tropical weather, sandy beaches, clear water and clean air. Geographicaily, the
island involves two distinct areas: northern Guam involves a raised corai line plateau
and the fairly level topography allows for intensive development, while southern
Guam is mountainous and relatively rural in character. The island is located within
the typhoon belt and earthquake zones which provides occasional excitement.
^ii^M O N G O LlA
K R e g io n a lM i^
1
Page 234 The island populatton approximates 155,000 and includes a mix of indigenous
Chamorros (4 3 percent), Filipinos (23 percent) and mostly other Asian ethnic groups.
Guam’s average household income in 2000 \was a healthy US$45,091. Ninety-nine
percent of the population speak English.
Turnon Bay, Guam’s primary location of tourist related development, features
warm, protected water and a sandy beach. These factors, along with close proximity
to Japan, have resulted in the development of Guam as a tourist destination. Hyatt,
Hilton, Marriott, Westin, Nikko, Holiday Inn and other brands are found along Turnon
Bay.
Guam also features one of the best deep-draft harbors in the Western Pacific.
As a result of its geographic characteristics, Guam has historically attracted milita^
interest. Most recently, the military presence has grown in importance as Japan’s
economy has waned and terrorist/axis-of-evil-related military activity has grown
significantly.
Guam’s physical locatton characteristics combine to attract tourists ar^
investment from Japan as well as a strong military presence.
The island’s
demographics have allowed for development of both tourism and military industries.
These factors, in extreme cyclical patterns, have shaped Guam’s economic growth
since the mid-1960s.
ECONOMIC FORCES
As an unincorporated territory of the United States, Guam’s economy is
structured under U.S. laws. A history of political stability has allowed for significant
economic growth over the past 20 years. Gross Island Product (“G IP”) for Guam
increased from US$1.73 billion in 1988 (the first year analyzed) to US$3.42 billion in
2000, nearly doubling in 12 years. Since 2000, job losses, deflation and fiscal
mismanagement have contributed to painful economic contraction.
Guam’s physical and demographic characteristics have historically attracted
significant tourism and military related investment. Tourism is the largest private
Page 2
Page 235 sector industry on Guam and reportedly accounts for approximately 35 percent of
GIP. Military (defense services) reportedly accounts for approximately 2 5 percent of
GIP. The remainder of the economy is comprised of local and federal government
activities, services and related sectors. Since the Asian economic crisis in the late
1990s, the economic impact from tourism has declined while the importance of the
military sector has grown sharply.
Less than four hours air-time from Tokyo, Guam benefits from direct airline
service to thirteen cities in Japan and serves as a regional hub for Continental
Airlines. Approximately 3.6 percent of Japanese outbound tourists visit Guam
annually, peaking at nearly 1.05 million during 2000. Annual visitor counts from
Japan typically reflect between 75 and 85 percent of total arrivals. Although the
Korean market has grown in recent years, Guam’s popularity as a Japanese visitor
destination was the critical component of economic development since 1985. Historic
Japanese visitor arrival growth, along with corresponding Yen/US$ exchange rates,
are shown in Table 1.
Table 1: Historic Japanese Visitor Arrivals to Guam and Yen/US$
Bcchange Rates, 1970-______
Year
Percentage Growth
Visitor Arrivais 5-Year 10-Year
From Jaoan Periods Periods
44,
Yen/US$
Rate
%
Chance
-

163,
270%
-

-17.5%

221,
36%
502%

-23.6%

301,
36%
184%

4.8%

637,
111%
287%

-39.1%

996,
56%
330%

-35.2%

1,048,
5%
165%

14.9%
Sources: Guam Visitor’s Bureau, Guam Department of Commerce and Federal Reserve
Bank (S t Louis).________________
In the late 1980s, hotel and golf course development exploded along with the
booming Japanese economy. Guam’s hotel room inventory more than tripled from
2 900 in 1985 to 9,002 rooms by 2000. Several luxury hotels were constructed
between 1988 and 1993, at costs of up to US$400,000 per room. Three high profile
golf courses were developed on Guam during the boom years. As pet projects of
super-rich Japanese, these courses were constructed at costs of up to US$4.0 million
per hole. Nearly 1,000 golf course memberships were sold to Japanese nationals,
mostly in the US $200,000 range (current prices are significantly lower). During
Japan’s boom years, tourism appeared as the economic panacea for Guam.
However, reliance on tourism as a primary component of an economy has
significant risk; particularly when that tourism involves a single market. The combined
effects of the sputtering Japanese economy, the Asian economic crisis, and the
terrorist attacks of September 11 resulted in sharp economic declines in recent years.
As an example, total private sector jobs declined by nearly 18 percent between
Page 3
Page 236 and 2002, with most losses in the construction and retail trade sectors. The economic
impact of the September 11 terrorist attacks on Guam’s tourism industry, projected to
hit $47 million by March 2003, is evident in occupancy and average room rate
statistics summarized in Table 2.
Table 2: Impact of 9/11 Terrorist Attacks on Guam Hotels
Guam’s physical characteristics nave nisioricaiiy auraoieu mmicjiy imcicoi
from the reigning regional powers. Mostly recently, proximity to North Korea, unique
training facilities on strategic U.S. soil, and regional terrorist adiyity have cornbined to
advance militaristic initiatives in the region. Economic activity generated by the
military sector on Guam involves its own set of risks and inherent negative
consequences, but this component of the economy is far more stable than tourism.
Since 1995, annual federal expenditures have ranged from approximately
US$800 million to US$1.0 billion. After a period of decline (there was strong objection
to the military presence on Guam during the economic boom years) in the early to
mid-1990’s, Guam has generally experienced slow, but steady growth from the
military sector.
Most recently, massive supplemental budgets and long-terrn
infrastructure projects allow for further, and potentially significant, personnel and
military hardware increases. Economic forces on Guam, most notably from the
tourism and military sectors, provide the foundation for the local real estate market.
HISTORIC MARKET OVERVIEW
Guam’s modern real estate history dates back to World W ar II. Following the
United States victory, the federal government acquired a substantial portion of the
island for strategic military purposes. The federal government today retains contrd
over approximately 30 percent of the island. The local government owns another percent, leaving approximately 40 percent in the hands of private landowners. Fee
simple ownership prevails and real estate ownership by foreigners is allowed.
Historically, Guam’s real estate market has experienced extreme volatility
resulting from external market forces. Land values remained extremely low from the
period following WWII until the late 1960s (U.S. Navy restrictions on access to the
island were lifted by President Kennedy in 1963). As an outpost for the Vietnam War,
Page 4
Page 237 military activity supported strong economic growth beginning in the late 1960s. In the
early 1970s, foreign investment sparked by political fears in Taiwan (Nixon visits
Beijing), combined with a relative explosion in tourism on Guam from Japan, fueled
an incredible rise in real estate prices. During this period of frantic activity, Guam
experienced its first $1 million land deal, a surge in foreign investment (primarily from
Japan and Taiwan), and an incredible short-term spike in real estate prices.
In 1974, OPEC pulled the global economy into recession through a series of
oil price hikes and Guam’s first major real estate bust began. The market remained
depressed during the early 1980s as U.S. interest rates above 20 percent crippled
economic growth. Between February 1985 and December 1987, the value of the
Japanese yen vs. U.S. $ doubled and Guam real estate prices suddenly looked
cheap. By 1988, real estate prices had increased back to pre-bust levels and
Japanese foreign investment was beginning to fuel another spectacular rise in
property prices on Guam.
During the peak of Guam’s second real estate boom in 1990, the
highest-demand land prices had increased nearly 10 times within a three-year period.
The subsequent contraction of Japan’s economy in the early 1990s started the
longest downward spiral in real estate values in Guam s modem history. By 2002,
numerous properties that sold during the 1989/1990 market peak subsequently resold
at small fractions of original purchase prices. A summary of notable land resales on
Guam during this last cycle is shown in Table 3.
■- ■1Table 3: A nalysisof Land P rice Declines, Island o f Guam
Change from Market Peak
Recent
Trans. Land Area 1989/1990 Peak
%
$
Sale
Price
Sale Price
facres)
No.
Oceanfront
$63,000,24.$10,000,1.$21,008,10.$40,500,20.Primarv Road Frontaae
$ 5,582,0.Interior
$ 3,000,2.$ 3,156,1.$ 2.300,1.$ 2,731,1.$ 7,000,14.Golf Course Potential
$40,000,605.
$7,500,$3,500,$4,201,$2,000,
($55,500,000)
($ 6,500,000)
($16,806,400)
($38,500,000)
-88%
-65%
-80%
-95%
$2,140,
($ 3.442,000)
-62%
$1,087,$ 680,$ 130,$ 500,$ 500,
($
($
($
($
($
1,913,000)
2,476,660)
2,170,000)
2,231,240)
6,500,000)
-64%
-78%
-94%
-82%
-93%
$5,000,
r$35.000.
-88%
($171,039,300)
-81%
Total/Average
In order to analyze the dramatic changes in Guam’s real estate market over a
10-year period, we summarized aggregate market activity including total transactions,
the US$ volume of all transactions, and the same categories for transactioris
reflecting prices over US$ 1.0 million. The data was summarized on an annual basis
Page 5
Page 238 and compared at 10 year intervals for the 1989 to 1991, and 1999 to 2001 time
frames as shovm in Table 4.
Table 4 : Analysis o f Guam Reaf Estate Market Activity By Decade
Year/ltem
% Change
All Transactions
Total $ Volume
No. of
Trans.
$1,1,$ 1.-84%
-24%
Transactions > $1.0 Million
Total $ Volume
No. of
($ millions)
Trans.
$ $
-96%
-93%
% Change
1,1.-37%
$ $ -84%
-90%
$
$
-93%
% Change
1,-39%
$ $ -62%
-81%
$
$
-88%
1989 to Aggregate Totals
4,
$2,
1999 to Aaaregate Totals
% Change
3.-34%
$ -80%
-91%
$1,$
-95%
Sources: Department of Land Management and The Captain Company
To a great extent, as goes Japan, so goes Guam. The combination of close
geographic proximity, tropical weather and U.S. soil has historically attracted
investment from Japan. Guam’s real estate values, to some extent, have tracked
Japan’s since 1985. The correlation between selected Japan and Guam real estate
values (1990 Base Year) is shown in Table 5.
Table 5: Correlation Between Japan and Guam Land Values; Base Year 1990 « 100_____________________ ___________________
-Guam
-Japan
Source: Japan Real Eelale Inelllula (all urban area, commercial land) and Tha Captain Company (Guam. Turnon Interior land)
It appears from the table that the risk associated with changes in real estate
prices on Guam may be half an order of magnitude greater than in Japan. Note that
current identified land values in both Japan and Guam are lower than 1985 levels.
The decline in Guam land values during the 1990s was so severe, it dominates some
of the world’s other great financial disasters as shown in Table 6.
Page 6
Page 239 iTable 6: Historic G lo b a lF in a n c i^ D ls a ^ ^ T
No.
Where
Guam
Holland
U.S.
U.S.
Japan
Financial Disaster
Turnon Land
Tulip Bulbs
Silver
U.S. Stocks
Japanese Stocks
Price
Increase
1,100%
5,900%
700%
500%
3.270%
When
1985-1634-1979-1921-1965-
______ __ ____
Subsequent
Decline
95%
93%
88%
87%
78%
Source: Forbes ASAP and The Captain Company
Guam’s real estate market is highly susceptible to volatility due to external
pressure. The first boom in the early 1970s was fueled by Vietnam W ar activity,
political and tourism-related factors, and ended with the global recession initiated by
the OPEC oil price hikes. The second boom resulted from a spillover of Japanese
economic growth and ended with the slowdown in Japan, the economic crisis in Asia
and the terrorist attacks in the U.S. mainland.
PREVAILING MARKET CONDITIONS
Prevailing real estate market conditions on Guam remain relatively soft. The
devastating impact of Supertyphoon Pongsona in December 2002 severely restricted
economic and real estate market activity through the remainder of the year and into
2003. A summary of aggregate price activity by sector, since 1999, is shown in Table
7.
Table 7:lSuam
Year
SFD
Condominium
Total
millions)
$44.$ 11.$ 4.$ 4.$ 81.$ 21.
Totals:
$168.
C a te q o ry
Land
Commercial
Industrial
Apartment
Total
($ millions)
$42.$ 12.$ 7.$ 4.$ 57.$ 21.$146.

%
Change
-3.8%
15.5%
73.9%
-18.5%
-30.1%
-1.1%
-13.2%
Total
f$ millions)
$23.$ 9.$ 5.$ 2.$ 69.$ 18.$128.
%
Change
-44.8%
-28.9%
-26.3%
-49.0%
22.1%
-13.7%
-12%
Total
($ millions)
$30.$ 6.$ 3.$ 3.$64.$ 15.$122.
S o urce : The Captain C o m p an y
As Japanese property owners continue to dispose of assets and Japan s
economy remains weak, prices are expected to remain low. However, the dramatic
real estate price declines have attracted growing interest from foreign investors
(including some from Japan). Investors from Indonesia recently acquired the Palace
Hotel at a price of less than $10 million, a 90 percent discount off of the reported
$100± million development cost. The $40 million Accion Guam hotel recently sold at
Page
%
Change
29.5%
-29.2%
-45.0%
67.5%
-7.8%
-19.4%
-4.6%
Page 240 under $2 million, and the buyer converted its use to a seminary. The Dai Ichi Guam
hotel also sold recently at a leasehold price of under $8 million and more hotel sales
are pending. Cocos Island Resort and a Saipan shopping center sold to Japanese billionaire Masafumi Miyamoto, developer of the popular Final
Fantasy video game. Many local market players that watched from the sidelines for
over 10 years, are now getting back into the investment game, perhaps signaling a
market bottom.
From a valuation perspective, the dramatic real estate price declines require a
detailed analysis of depreciation, or an abandoning of the cost approach as a reliable
indicator of value. In most cases, support for economic and functional obsolescence
involve esoteric analyses that are appropriate for academic, but not potential investor
due diligence purposes. Sophisticated investors are focused primarily on potential
income and, from our perspective, the cost approach has become temporary
obsolete, even for most recently constructed improvements.
FUTURE EXPECTATIONS
The near-term future of Guam’s real estate market remains unstable and
susceptible to external forces in the region. Although dramatic declines have already
occurred in most sectors, economic support for a market bottom remains elusive.
Economic problems in Japan and a growing trend toward domestic travel could
further contribute to Guam real estate price declines. Most recently, deflationary
forces emanating from China have contributed to further price declines. Global
military conflicts and terrorism increase risk associated with investing in any
substantially tourism-dependent economy. The recapitalization of real estate prices
during a period of declining interest rates has effectively passed and risk associated
with future increases has swelled. However, the fundamentals of Guam’s real estate
market will ultimately lead to recovery. Guam’s market fundamentals, which may
have lost some luster in recent years, include:






U.S. Laws and Currency
Close Proximity to Japan/Asia
Political Stability
Tropical Weather
Adequate Tourist Infrastructure
Strong Military Presence
The recent and proposed increases in military activity will generate badly
needed economic growth. Foreign investment, although at low prices, will also
contribute to the economy through renovation projects and capital infusions. The
combination of Guam's fundamentals, military growth and foreign investment will lead
to the long-term recovery of Guam’s real estate market. W e expect that Guam’s next
boom will occur between 2015 and 2020, as newly rich Chinese look for vacation
properties, and Japanese, Korean and Taiwanese investors return in earnest. As the
century progresses, China will play an increasing role in local economics and real
estate pricing models.
Page 8
Page 241 CONCLUSION
Through the detailed investigation and study of local real estate markets,
property information can be obtained. Property information is the critical asset for real
estate service organizations. Real estate market knowledge, or property information,
provides a foundation for the analysis of real estate problems by valuers and
consultants. Property information, or the knowledge obtained through detailed study
of property data, can be used to support more stabilized and efficient real estate
markets; particularly in isolated locations such as Guam.
Guam’s physical and demographic characteristics have historically attracted
tourism-related and military investment. The local real estate market is highly
susceptible to volatility due to external pressures; particularly from Japan. Guam real
estate values peaked in 1989/1990 and subsequently declined dramatically.
Prevailing market conditions remain weak and recovery remains elusive. However,
the fundamentals of Guam’s real estate market, including military expansion and a
return of foreign investment, will lead to long-term economic growth and real estate
market recovery. Opportunistic investors, armed with this property information,
should consider Guam as an attractive investment option.
Page 9
Page 242 APPENDIX
20
Page 243 BO ARD O F E Q U A L IZ A T IO N
M IN U T E S
October 22,
A Board o f Equalization meeting was held on Thursday, OctobCT 21, Real S o p it y
D ivision, Department of Revenue and Taxation m Tiyan. lE e
fo llo w in g were present:
board
o f
E Q U A L IZ A T IO N
m em bers
Fred Leon Guenrero, Chairman
Fred W . Menchola, V ice Chairman
Joseph R. Ada, Secretary
D EPAR TM EN T OF R EVEN UE AND
T A X A T IO N STAFF
John Gumataotao, SUPERVISOR,
Appraisal Branch
D IS C U S S IO N :
The meeUng was called to order by M r. Fred Leon Guerrero, Chairman at 9 a.m.
The 1999 Board o f Equalization Appeal applications was the topic presented for review
at this tim e.
P rior to the review o f appeals 99-001 through 99-028, M r. G u m a ^ta o
s?yi==^"strrahr23rs
effective age fo r depreciation in w hich the current yeaP was p gg
BOE
J,
j ,
gjat no adjustments were required o f the board due to rnt o u s f c ^ S n nrade to the Land Area and subsequent value adjustment due m a
M ap recording error made by the owner.
’ Ms” Edith Blanlcenfeld, A dm inistrator o f the Estate o f Vicente F.
submitted a request fo r value adjustment based on an appraisal report dated
February 1998. The recommended value based on the appraisal repo i
$318,000.00.
Ex h i b i t
Page 244 M r Gumataotao informed the board that he had adjusted the value based on 25%
! ^ k e t condition that gave an adjusted value o f S318.750.00, M r. Gtmataotao
notedthedifferenceofabom$750.00andnientionedthatlnsvalueswere
™ M v e ly w ith in the cmrent market as o f March 1999.
>,emg tm o^ecU om
on the value, the board agreed to accept M r. Gumataotao s adjusted values.
The chairman recommended that a foim al letter be drafted so tto t the a p p ^a n t or
any other appellant is given the courtesy to agree o f disa^ee w jft any ^ e
W d s d e te ^in a tio n relative to the values submitted b y the Real Property Tax
D ivision.
” ?:2®Beme Straaunan submitted an appeal “ f , I t r
o
or selling price o f a unit w ith in his compound (Las P a lm ^) fo r $136,000. M r.
S traatm i^stated on his application that he suggest the value to be about
$130,000.M r Gumataotao informed the board that an “ M LS” listing is ju s t that, a listing^ It
T e s n rs p e c ific a lly account fo r the market, but rather what a seller would l ie ,
M r Gumataotao further added that although the pnces fo r to w n h o ^e or single
W y T o m e s have dropped, the board should not re ly on data m the form o f an
M LS listing/rqport.
M r. Gumataotao submitted his proposed adjusted
f
land, w hich is a 25% market adjustment, and $102,350.00 fo r the im pr
w hich considers about 11% b uilding depreciation.
M r Gumataotao stated that the overall adjusted property ya lM as submitted b y
S S ' r X S y tax division is relatively f t ir and equitable. There
”»
* b je c tio L , die L a rd approved to accept the department's findm gs and adjusted
values.
’ " C L t a . General Manager o f Towa Reef Hotel (Guam R ^ f)
^ p e a l b ie d on an appraisal report showing a butldm g value o f $42,600,000.00.
M r. Gumataotao provided a property value analysis “ f
■Axrniiip n f *29,‘R99 329 160 00 ™
M r. Gumataotao told the board that a
an adjusted
depreciated building value o f 30/o was given ana uiai me
the hotel was 27 years at 49%. M r. Gumataotao however adjusted the actual age
fo t depreciation b y 19% due to the fact that the im provm ents
F a is a l
separaL buildings b u ilt in 1974and I® *'*'H e noted o n f t e a p p d l ^ ^ ^
r e L r t the amount o f $ 12,000 , 000,00 that was
renovation. M r. Gumataotao infoim ed the board that to s Sl^.OO'l.OOO.W
renovation should not be considered and that the actual appellant value should be
Page 245 $30 600,000.00 He further stated that the appraisal branch does not upgrade or
reassess any real property values based on “interior renovation”.
BOE 99-Coiporation has submitted an appeal for value adjusttnents for land
^ d burldrng rntprovements based on a c e rtifie d ^ a is a l repo“
o l t r “ ‘'
T ,
f
r "
L "l3 “
o“
photographs o f the building s h o tL g their c u Z t
u i~
b 'S e d ^ r S r .i^ ^ l
for a e land
tfiP
-m ■
adjustment with the amount now at $56 1 109 50 As for
fte bmldnrg rt was based on a 26% Depreciated Building v l e a Z t a e n f t r t t
a^e
due to imnrone
G™otaotao stated L t 6% w t p v S S e
remauung 20% were given for the physical condition
mamtenance practices. There being no objec^ns on the
a^u^tnrents as reconrmended by M r. Guntataotao, the board accepteS aLuw
B O E 99-006 & 99-006A
0>n” d in ^ r
' are $13,500,000.00 (land) and $57,039,015.
S T i o r n o 7 ‘‘)’ ' ?
recommend the value o f
3)i4,526,108.00forland whichisbasedona25%marketadiii the
i
consider^ open areas and not taxable. Having been presented’vWth
Sjustom ts“ ° ”™ “ ‘^‘“'™ "
Gemataotao’s
BOE 99-007 none Division error in assigning numbers for appeals.
B O E 99-008 through 99-Apsusento Gardens (228 Units)
appeals are being held in abeyance
pending further documentation from the applicant.
^
Page 246 BO E 99-,
,
E IE Guam Corporation submitted an appeal fo r building value adjustment based
on an appraisal report date October 1999. The requested amount being
$73,709,413.00.
M r. Gumataotao advised the board that an adjustment value o f $75,116,534.was what he recommends. M r. Gumataotao further explained his arrival o f value
based on an 11% Depreciated B u ild ing Value adjustment. M r. Gumataotao also
pointed out that an adjustment to the taxable gross building area was made. He
further stated that the current area taxed was 723,843.00 square feet and that it
was adjusted to 421,753.00 square feet to exclude “ open” areas o f the hotel. He
advised the members to refer to page 37 o f the appraisal report fo r a listin g o f
open areas that are not subject or should not be subject to taxation. The board
elected to accept the recommended adjustments b y M r. Gumataotao.
BO E 99-,
.
,
.
*
M r. Daniel L. Webb submitted an appeal fo r buildm g and land value adjustments
based on an appraisal report dated February 5, 1999. The amounts being
$81,180.00 (land) and $287,820.00(building) as requested by the applicant.
M r. Gumataotao stated to the board that the recommended land value adjustment
be $69,000.00 based on a 50% market adjustment. The adjusted value
recommended for the building be $313,284.00 derived &om an 11% Depreciated
B u ild in g Value adjustment. He also advised them that an adjustment to the
“ taxable” gross building area was made from 2,931.00 to 2,271.00 square feet to
exclude the terrace which was added to the original area o f 2,931.
The being no further business w ith this appeal, the board accepted the
recommended adjustments from M r. Gumataotao.
BOE 99-013,99-014 and 99-Estate o f Antonia & Jose Rios
A representative from the above heirs has submitted an appeal fo r land
adjustments fo r the above applications.
M r. Gumataotao advised that these appeals be held in abeyance pending further
documents from the applicant.
BO E 99-016 through 99-• v + .i
M icronesian Appraisal Associates, Inc representative fo r various companies listed
on applications submitted appeals fo r land value adjustments.
M r. Gumataotao stated that these appeals should also be held in abeyance pending
further documentation from the above representative.
Page 247 The Chairman o f the board M r. Leon Guerrero along
S ^ c re ^ ^ ^ ^ ^
Chairm an M endiola suggested that since all the appeals
the excep
o f appeal numbers 99-008 through 010 and 99-013 through 028 have been
considered and adjusted, the members opted for ^ r . ^ a te o ta o to p r ^
le tte r inform ing the appellants fo r appeal numbers 99-002 through 006A
99011 and 99-012, that the board had made decisions on then respective appe s y
adjusting values based on the departments recommendations and that shodd they
accept or agree to the adjustment, a Letter o f Acceptance should be subrm tted I f
on the other hand the appellant disagrees w ith the board-adjusted values, a letter
o f decline and schedule o f appearance should be made.
M r Gumataotao did advise board members that another meeting is set fo r am on the 2 8 * o f October 1999. There being no other discussion, a m otion to
adjourn was made by M r. Leon Guerrero and second by M r. M endiola.
The 1999 Board of Equalization meeting was adjourned at 11:45 a.m.