Supreme Court of Guam issues opinion in DFS Guam case against airport

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(PNC file photo)

The Supreme Court of Guam issued an opinion Tuesday, authored by Justice Katherine A. Maraman, and joined by Chief Justice F. Philip Carbullido and Justice Pro Tempore Joseph N. Camacho, decided the appeal in the case of DFS Guam L.P. v. A.B. Won Pat Int’l Airport Auth., 2020 Guam 14. Defendant-Appellant/Cross-Appellee A.B. Won Pat International Airport Authority, Guam (“GIAA”) appealed, and Plaintiff-Appellee/Cross-Appellant DFS Guam L.P. (“DFS”) cross-appealed, from the entry of an amended final judgment in the consolidated case below, which arose out of procurement protests concerning a request for proposal (“RFP”) for concessions at the A.B. Won Pat International Airport.

The court addressed numerous legal issues on appeal. First, the court determined that, in
procurement cases in which the Office of Public Accountability and the Public Auditor have
recused from hearing the matter, the standard of review in the Superior Court is the same standard as set forth in Teleguam Holdings LLC v. Guam, 2018 Guam 5 ¶¶ 23-33. That is, the appeal to the Superior Court should proceed as a “civil action,” with no deference provided to the legal or factual conclusions made by the procuring agency in denying the protest.

Next, the court held that where the Public Auditor and Office of Public Accountability have
recused from hearing a procurement appeal, this recusal satisfies the requirement of administrative exhaustion under the Procurement Code. Additionally, when a case is filed under the Procurement Code, the Superior Court must examine each such claim separately to determine whether it has satisfied the administrative exhaustion requirement. In its first protest complaint filed in the Superior Court, DFS alleged that Lotte Duty Free (“Lotte”), a competing bidder that ultimately was awarded the procurement contract, had improperly paid its consultants a “success fee.” The court determined that the record was sufficiently developed, and it was clear that DFS failed to administratively exhaust those claims related to a “success fee.” Therefore, the Supreme Court directed the trial court to enter judgment in favor of GIAA on two of DFS’s claims in the first protest complaint.

The court then turned to the question of timeliness of claims filed under the Procurement
Code. The court determined that the doctrine of equitable tolling was inapplicable to claims filed under the Procurement Code. Moreover, the court held that the statutory 14-day window to protest a procurement runs from the date a party first becomes aware, or reasonably should be aware, of the facts underlying a protest. In addition to its “success fee” claims, DFS also asserted in its first procurement complaint that members of the GIAA board improperly received gifts from Lotte during the procurement process. On the undisputed facts before the court, the court found that these claims were barred as a matter of law because they were untimely protested. Thus, the court directed the entry of judgment in favor of DFS on those claims. On several other claims filed by DFS, however, the court determined that—when viewed in the light most favorable to DFS, the non-moving party—several of its other claims had been timely filed.

The trial court below awarded DFS summary judgment on its third procurement protest
complaint. But in light of the court’s decision on the questions of administrative exhaustion and timeliness of claims under the Procurement Code, the court vacated this award of summary judgment so that issues of timeliness and administrative exhaustion in the third protest complaint could be considered by the trial court in the first instance.

Turning to the merits of GIAA’s summary judgment motion on DFS’s second procurement
protest complaint, the court held that GIAA had either failed to establish it was entitled to judgment as a matter of law or disputed questions of fact had prevented the award of summary judgment. The court, therefore, affirmed the trial court’s decision to deny GIAA summary judgment on DFS’s third protest complaint.

In each of its three protest complaints, DFS asserted that GIAA had violated the automatic
stay provision of the Procurement Code by entering into a contract with Lotte while litigation was still pending. The court held that these claims were not moot or otherwise barred.

For all of these reasons, the court vacated the entry of the amended final judgment below
and remanded with directions to the trial court for further proceedings not inconsistent with the opinion.

(News Release from the Office of the Attorney General of Guam)

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Full Statement Here:

Supreme Court of Guam Opinion (2020 Guam 14)