The governor’s office filed an emergency application for a stay pending certiorari.
Guam – The governor’s office is taking the tax refund lawsuit all the up to the US Supreme Court. Yesterday they filed an emergency application for a stay pending certiorari or pending a higher court’s review of a lower court’s decision.
The case dates back to 2011 when local residents filed a class action lawsuit in the District Court of Guam for timely payments of their tax refunds.
The District Court ruled in favor of the plaintiffs and issued a permanent injunction and awarded them about $2 million in legal fees.
But the governor’s office appealed that decision in the Ninth Circuit, noting that on the issue of legal fees, Guam cannot be held liable because they are essentially a federal instrumentality because of their political status and therefore is subject to federal immunity.
The 9th circuit denied GovGuam’s appeal and then denied it a second time when the Calvo Administration sought a rehearing of the appeal en banc.
Governor Eddie Calvo says they’re taking the case up to the US Supreme Court because it will bring some clarity to Guam’s sovereignty and will help define the island’s federal-territorial relationship with the US.
The governor’s office says they are also being represented by a world renowned law firm, pro bono, that is also representing other US Territories in similar federal territorial relationship cases.
You can read the governor’s press release below:
The Governor’s Office filed with the U.S. Supreme Court an Emergency Application for Stay Pending Certiorari in the Paeste vs. The Government of Guam case.
The application was filed yesterday by the Governor’s legal counsel, local firm Calvo Fisher & Jacob and stateside co-counsel Kirkland & Ellis. Kirkland & Ellis is a global law firm with more than 1,500 attorneys and law offices in cities throughout the world, including Washington D.C., San Francisco, New York, London, Munich and Hong Kong.
“This is an important step in defining our federal-territorial relationship with the United States,” said Governor’s Chief Policy Advisor Arthur Clark.
“It is very significant that a major law firm like Kirkland & Ellis contacted us, expressing interest in taking our case before the U.S. Supreme Court. They currently represent other U.S. territories, such as Puerto Rico and American Samoa, in similar federal-territorial relationship cases.”
“They feel, as does the Governor, that this case could resolve inconsistent interpretations by the Ninth Circuit on Guam’s relationship with the United States. They are also doing this pro bono, meaning without cost to the government of Guam,” Clark added.
Original case filed AFTER Governor announced intention
The case was originally filed in the Guam District Court seeking relief from the government’s decades long practice of withholding taxpayer refunds for years — a practice ended by the Calvo Tenorio administration.
The lawsuit was filed on the same day that Governor Calvo sent a bill down to the Guam Legislature to authorize a bond to pay off all outstanding tax refunds.
The District Court decision came out months after the bond was issued and all tax refunds were paid. The decision stopped GovGuam from prioritizing tax refunds based on hardship and it imposed a six-month deadline for the payment of tax refunds. It also awarded $1.7 million to the plaintiffs’ attorneys. An appeal to the Ninth Circuit was denied.
Instead of the money going to opportunistic lawyers, the administration would much rather see it go to tax refunds or the Guam Memorial Hospital.
‘Neither fish nor fowl’
“The federal court ordered us to pay $1.7 million to the plaintiffs’ lawyers based upon a federal law that the U.S. Supreme Court and even the Ninth Circuit previously ruled did not apply to Guam because of our sovereignty. Later decisions by the Ninth Circuit have eroded those earlier decisions. It seems that in the eyes of the Ninth Circuit courts Guam is neither fish nor fowl, or it is sometimes fish and sometimes fowl,” said Governor Calvo.
“We expect this case to re-establish Guam’s sovereignty, or at least provide some clarity on the issue — an important step in Guam’s quest for self-determination. This could also be our opportunity to focus national attention on the injustice of the Insular Cases.”
The Insular Cases are a series of federal court decisions, including decisions by the U.S. Supreme Court, in the early 1900’s that created the colonial concept of “unincorporated territories,” wherein the inhabitants, although U.S. citizens, are not entitled to full constitutional rights based on territorial location and race.
The U.S. Supreme Court panel on the Insular Cases also issued the decision in Plessy vs. Ferguson that legitimized segregation in the South between different races based on the “separate but equal” doctrine.
Although the “separate but equal” doctrine of Plessy vs. Ferguson was reversed by the U.S. Supreme in 1954, the Insular Cases are still applied in full force by the federal courts.