GovGuam Ordered to Pay $2.2M in Legal Fees for Tax Refund Lawsuit

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The Calvo Administration is still fighting the case in the US Supreme Court.

Guam – In addition to a deadline to pay tax refunds, the Calvo Administration has an even closer deadline to pay legal fees to the plaintiffs who filed the class action tax refund lawsuit against them.

April 18. That’s the deadline Federal Judge Consuelo Marshall gave for GovGuam to pay $1.76 million dollars plus interest to the plaintiffs in the case, which is expected to go up to about $2.2 million.

Judge Marshall last Friday lifted a stay on an order for the Calvo Administration to pay the legal fees.

Despite losing the case and being issued a permanent injunction to pay tax refunds with six months, the order for attorneys’ fees was not enforced since the Calvo Administration appealed the judge’s decision with the Ninth Circuit court twice and twice the appeals were denied.

Judge marshall says even if the case is now before the Supreme Court, she doesn’t have the authority to enforce a stay; only the Ninth Circuit or the Supreme Court itself can do that.

In response, Governor Eddie Calvo said in a statement that the reason he fought the case was because he didn’t believed the attorneys deserved to be paid for something that was already being done.

“These attorneys rushed to file a tax refund case knowing full well that we intended to make good on what was owed to the people of Guam,” he says.

You can read the full press release from Adelup below:

The District Court of Guam ordered the Government of Guam to pay attorneys fees in the 2011 tax refund case. The lawsuit was filed the same day the Governor submitted draft legislation for a bond to pay off tax refunds owed to taxpayers as far back as 2006.

 

GovGuam has filed a petition to the U.S. Supreme Court in this case, which is ongoing. Most recently, the Supreme Court ordered the plaintiffs to file a response to the government’s petition for certiorari. That’s due April 25.

 

The administration believes that the Supreme Court, in ordering the plaintiffs to respond, shows the Supreme Court has an interest in the case.

 

“We hoped the District Court would grant a stay on the payment of attorneys’ fees until the Supreme Court addressed the case. If the case does move forward with the Supreme Court and we win, then the attorneys would have to repay this amount,” stated Oyaol Ngirairikl, communications director. “The attorneys rushed to court and that resulted in a flawed complaint, which meant they had to amend their complaint later.”

 

 

Governor Calvo said the administration will continue to pay out tax refunds, which has been a priority since January 2011. In fact, another $3 million in refund checks were mailed out today.

 

“We’ve said this before but I think it bears repeating, I fought this because I don’t think that we should have to pay attorneys for filing a lawsuit on something that was already being remedied,” said Governor Calvo. Another reason for the filing the petition with the Supreme Court was to clarify whether Guam should be treated as a state or as a federal instrumentality for purposes of the application of federal laws.

 

“These attorneys rushed to file a tax refund case knowing full well that we intended to make good on what was owed to the people of Guam — the writing was on the wall.”

 

Additionally, the attorneys were well aware of the situation for years having served as counsel to government agencies, including as Legal Counsel to a previous governor, yet they didn’t raise the question. They took advantage of a situation and now $2.2 million that could go to pay tax refunds to more than 700 people (based on a rough average of $3,000 per refund check).

 

“This administration has been fighting for taxpayers and guarding their interests since taking office in January 2011 — that hasn’t changed and it won’t change now,” the Governor stated. “We’ve been paying tax refunds.  We’ve managed to reduce the wait time to a few months at the longest. We’re working hard to further reduce the time our people have to wait for tax refunds.”

 

The $2.2 million includes $1.7 million in fees, and additional $62,974 in costs and interest.