Bernardo, Arceo, Diaz, Sanchez, Pinaula, Balbin Anciano, Charfauros, Rama v. Gov Guam

Opinion

. J,. ‘,n C u

1 7 AY 2? 7: fl 2 3 4 5 6 7 $ 9 IN THE SUPERIOR COURT OF GUAM 10 11 LAYLA STORY-BERNARDO, DANIEL CIVIL CASE NO.: CV0733-20 12 BERNARDO, TOMMY ARCEO, BETTY DIAZ, 13 FAYE DORA CRUZ SANCHEZ, NONITO 14 SANCHEZ, JOHN PINUALA, RENE BALBIN, 15 DANIEL ANCIANO, RAYCIA MARIE SAN 16 NICOLAS CHARFAUROS, ROEL RAMA, DECISION AND ORDER 17 Re: Defendants’ Motion to Dismiss 18 Plaintiffs, 19 vs. 20 21 GOVERNMENT OF GUAM, LOURDES 22 LEON GUERERRO, in her official capacity as the 23 GOVERNOR OF GUAM and in her personal 24 capacity, EDWARD BIRN, in his official capacity 25 as Director of the Department of Administration, 26 LILIAN POSADAS in her official and personal 27 capacity as Administrator of the Guam Memorial 28 Hospital, VINCENT P. ARRIOLA, in his official 29 and personal capacity as Director of the Department 30 of Public Works, JON J. P. FERNANDEZ in his 31 official and personal capacity as Superintendent of 32 the Guam Department of Education, JOE 33 CARBULLIDO in his official and personal capacity 34 as Director of the Department of Corrections, 35 LARRY J. GAST in his official and personal 36 Capacity as Manager of the Guam Solid Waste

CV0733-20, Layla Story-Bemardo, et al v. Government of Guam, et al. Page 1 of 25

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1 Authority, DANIEL C. STONE in his official 2 and personal capacity as Chief of the Guam Fire 3 Department, KRISTINA L. BAIRD in her official 4 and personal capacity as Administrator of the 5 Judiciary of Guam, STEPHEN IGNACIO in his 6 official and personal capacity as Chief of Police, 7 THERESA C. ARRIOLA in her official and 8 personal capacity as the Director of the Guam 9 Behavioral Health and Weilness Center, and IKE 10 PEREDO in his official and personal capacity as 11 the Director of the Guam Customs and Quarantine 12 Agency, 13 Defendants. 14 15 INTRODUCTION 16 This matter came before the Honorable Judge Teresa Kim-Tenorio on December 17, 17 2020, upon Defendant Kristina L. Baird’s Motion to Dismiss Pursuant to Guam Rules of 18 Civil Procedure 12(b)(1) and 12(b)(6). The Plaintiffs, Layla Story-Bernardo, et a!., 19 (“Plaintiffs”) are represented by the law firm of Razzano, Walsh, & Torres, P.C. The 20 Defendant, Kristina L. Baird (“Baird”), is represented by Alicia A.G. Limtiaco, Esq., 21 Andrew S. Quenga, Esq., and Daniel Mensching, Esq. Defendants, the Government of 22 Guam, et al. (“Government of Guam”), are represented by Assistant Attorney General 23 Jordan Lawrence Pauluhn. Oral arguments were heard before this Court on April 28, 2021. 24 for the reasons set forth below, having reviewed the moving papers and oral arguments of 25 both parties, the Court GRANTS Defendant’s Motion to Dismiss without prejudice and 26 with leave to amend. 27 28 BACKGROUND 29 On March 14, 2020, the Governor of Guam, Lourdes A. Leon Guerrero, declared a 30 state of emergency in response to the threat caused by the novel coronavirus pandemic. See 31 Exec. Order No. 2020-03, Island of Guam (Mar. 14, 2020). Two days later, on March 16, 32 2020, the Governor issued an Executive Order closing non-essential government offices. 33 See Exec. Order No. 2020-04, Island of Guam (Mar. 16, 2020). Additionally, the United 34 States Congress passed a comprehensive aid package to help combat COVID-19 and assist

CV0733-20, Layla Story-Bernardo, et al v. Government of Guam, et al. Page 2 of 25 1 state, territorial, tribal and local governments to battle its economic impact. See Coronavims 2 Aid, Relief, and Economic Security Act (“CARES Act”). See Pub. L. 116-136 (Mar. 27, 3 2020). Congress created the Coronavims Relief Fund and directly appropriated funds from 4 the Treasury of the United States to state, territorial, tribal, and local governments. See 5 CARES Act § 5001 (amending 42 U.S.C. § 601). 6 The Governor accepted the aid flowing from the CARES Act and used those funds 7 to provide COVID-1 9 testing, purchase personal protective equipment for frontline workers, 8 and procure temporary medical facilities. See Def.’s Mot. to Dismiss (Dec. 29, 2020). The 9 Governor also authorized differential pay up to twenty five percent (25%) for essential 10 employees with variances based on their exposure level to COVID-19. See Exec. Order 11 2020-08 (Apr. 5, 2020). 12 On March 16, 2020, the Supreme Court of Guam (“Supreme Court”) issued two 13 Administrative Orders which closed all Judiciary facilities to five categories of persons. See 14 ADM2O-210 (Mar. 16, 2020); See also ADM2O-206 (Mar. 16, 2020). The Supreme Court 15 also suspended jury trials. See ADM2O-207 (Mar. 16, 2020). However, the courts continued 16 scheduling and hearing certain matters, either in-person or remotely, depending on their 17 urgency. See ADM2O-210 (Mar. 16, 2020). Since March 16, 2020, the Supreme Court has 18 issued several Administrative Orders in response to the fluctuating pandemic conditions of 19 the island. These orders resumed Judiciary operations while complying with the various 20 directives of the Department of Public Health and Social Services.’ 21 On October 6, 2020, Plaintiffs filed a Class Action Complaint seeking an “order 22 commanding the Defendants to cease their due process violations, and pay overtime and 23 double pay as mandated by law and cease requiring employees to work overtime if overtime 24 cannot be paid according to Guam Law.” Class Action Compl. at 30 (Oct. 6, 2020). Plaintiffs 25 further seek “]udgment in favor of Plaintiffs and the class in the amount no less than one 26 hundred million dollars ($100,000,000.00) for all double pay and overtime due to Plaintiffs 27 and the class.” Id. at 31. They also seek to obtain “a judgment in an amount equal to 28 expenditures over $600,000.00 (six hundred thousand dollars) from the CARES Act Fund

See ADM2O-239 (May 4, 2020); ADM2O-254 (May 29, 2020); ADM2O-361 (July 2, 2020); ADM2O-392 (Aug. 14, 2020); ADM2O-403 (Aug. 28, 2020); ADM2O-406 (Sep. 4, 2020); and ADM2O-41 1 (Sep. 25, 2020).

CV0733-20, Layla Story-Bemardo, et al v. Government of Guam, et al. Page 3 of 25 1 against Defendants Governor of Guam and Birn, in their personal capacities, for expending 2 CARES Act funds without appropriation and proper authority.” Id. 3 On December 17, 2020, Defendant Kristina L. Baird, in her official and personal 4 capacity of Administrator of the Courts, filed a motion to dismiss Counts III through VIII. 5 See Mem. in Support of Def.’s Mot. to Dismiss (Dec. 17, 2020). The Office of the Attorney 6 General filed a Memorandum in Support of Motion to Dismiss on December 29, 2020. See 7 Mem. in Support of Mot. to Dismiss (Dec. 29, 2020). Plaintiffs filed their oppositions to the 8 Motion to Dismiss on January 14, 2021, and January 25, 2021, respectively. Defendant 9 Baird filed a reply brief on January 28, 2021. Finally, afier the Court granted a stipulation 10 extending time to reply, the Office of the Attorney General filed their reply brief on March 11 5, 2021. The Court heard oral arguments on April 28, 2021, and subsequently took this 12 matter under advisement. 13 14 DISCUSSION 15 Standing is a component of subject matter jurisdiction. See Taitano v. Lujan, 2005 16 Guam 26 ¶ 15 (citing Guam Imaging Consultants, Inc. v. Guam Memorial Hospital Auth., 17 2004 Guam 15 ¶ 17). Thus, “[i]f a party does not have standing to bring a claim, a court has 18 no subject matter jurisdiction to hear the claim.” Id. A dismissal pursuant to Rule 12(b)(6) 19 addresses only a plaintiffs failure to properly frame and raise claims, whereas Rule 12(b)(1) 20 specifically addresses the issue of lack of subject matter jurisdiction. See Arbaugh v. Y&H 21 Corp., 546 U.S. 500, 510-13 (2006). The United States Supreme Court has lamented that 22 courts have routinely failed to distinguish between the two, stating, “[o]n the subject matter 23 jurisdictionlingredient-of-claim-for-relief dichotomy, this court and others have been less 24 than meticulous.” Id. at 511. The court further characterized dispositions which fail to 25 consider the difference as “unrefined” and “drive-by jurisdictional rulings.” Id. (quoting 26 Steel Co. v. Citizens for a Better Environment, 523 U.S. 83, 91(1998). 27 Both forms of dismissals are requested by the Defendants, and this Court, in line 28 with the advice of the Supreme Court, will proceed meticulously and keep their analyses 29 separate. See Mem. in Support of Def.’s Mot. to Dismiss (Dec. 17, 2020); See also Mem. in 30 Support of Mot. to Dismiss (Dec. 29, 2020). Further, the court must address a challenge 31 made under Rule 12(b)(1), questioning subject matter jurisdiction, before any other 32 challenges, since the court must find jurisdiction before determining the validity of the

CV0733-20, Layla Story-Bemardo, et al v. Government of Guam, et al. Page 4 of 25 1 claim. See Belt v. Hood, 327 U.S. 678, 682 (1946); See also Jones v. Georgia, 725 F.2d 622, 2 623 (11th Cir. 1984). 3 4 I. All Plaintiffs In The Class Lack Standing As TaxDayers. 5 Plaintiffs allege in Count I of the class action complaint that “Defendants Governor 6 Leon Guerrero and Birn have violated 10 GCA § 1903(c)(2) by spending funds they may 7 not spend without legislative approval. Defendants Governor of Guam and Birn have 8 expended CARES Act funds without proper appropriation and without proper authority.” 9 Class Action Compl. ¶ 106 (Oct. 6, 2020). Plaintiffs continue, alleging as to Count II, 10 “Defendants Governor Leon Guerrero and Birn are clearly spending monies in violation of 11 the law, and thus Plaintiffs are entitled to enjoin their illegal spending.” Class Action Comp. 12 ¶ 112 (Oct. 6, 2020). Thus, in Count I, Plaintiffs are alleging a violation of the Proper 13 Government Spending Act; in Count II, Plaintiffs are seeking a preliminary injunction to 14 halt the allegedly unlawful spending; and in Count IX, Plaintiffs are seeking the imposition 15 of a constructive trust over Defendants holding of CARES Act funds. See generalty Class 16 Action Compl. (Oct. 6, 2020). 17 Plaintiffs claim they have standing pursuant to the Guam Enforcement of Proper 18 Government Spending Act, which states, “[ajny taxpayer who is a resident of Guam shall 19 have standing to sue the Government of Guam. . . for the purpose of enjoining . . . the 20 Government of Guam from expending money without proper appropriation, without proper 21 authority, illegally, or contrary to law. . . .“ 5 G.C.A. § 7103. “Taxpayer standing statutes 22 traditionally enable ‘taxpayers’ to challenge governmental acts that may otherwise go 23 unchallenged because of standing requirements.” Attorney Gen. of Guam v. Gutierrez, 2011 24 Guam 10 ¶J 27. However, “the requirement of injury in fact is a hard floor of Article III 25 jurisdiction that caimot be removed by statute.” In re A.B. Won Pat International Airport 26 Authority, Guam, 2019 Guam 6 ¶ 19. Therefore, Plaintiffs still need to show a concrete 27 injury in order to have standing. See e.g. Leon-Guerrero v. Gov. of Guam, CV1OY9-19, at 6 28 (Super. Ct. Guam Mar. 3, 2020) (“[t]he Guam Taxpayer law cannot abolish the requirement 29 that plaintiff suffer a concrete injury”). 30 A. The CARES Act Fund Is A Purely Federal Appropriation 31 The Guam Organic Act of Guam provides, “[a]ppropriations, except as otherwise 32 provided in this chapter, and except such appropriations as shall be made from time to time

CV0733-20, Layla Story-Bemardo, eta! v. Government of Guam, et al. Page 5 of 25 1 by the Congress of the United States, shall be made by the legislature.” 4$ U.S.C. § 1423j(a). 2 Thus, in Guam, there exists two different types of appropriations: (1) local appropriations 3 subject to approval by the Guam Legislature, and (2) direct federal appropriations subject 4 to the terms set by the Congress of the United States. Defendants rely on the case of Wong 5 v. Comma for the proposition that Congressional appropriations directly to the Government 6 of Guam require no further action by the Guam Legislature. See Def.’s Mot. to Dismiss, at 7 4 (Dec. 29, 2020). According to Wong: 8 9 “Section 1423j of Title 48, United States Code is paramount to local legislation and 10 provides that the United States Congress can make appropriations directly to the 11 government of Guam. Where these appropriations or grants completely fund a 12 specific purpose without the need of local funding, and where the appropriation or 13 grant does not provide for local legislative control, there is no authority for the Guam 14 Legislature to assume the responsibility for reappropriating these funds.” 15 16 Wong v. Comma, 2 Guam R. 132 (D. Guam 1978). 17

18 Defendants thus argue that the CARES Act is a federal appropriation which 19 completely funds a specific purpose, namely, expenditures for “actions taken to respond to 20 the public health emergency.” See Mot. to Dismiss (Dec. 29, 2020). According to the 21 CARES Act, the funds are subject to certain limitations and uses which are as follows: (1) 22 necessary expenditures incurred due to the public health emergency with respect to the 23 Coronavirus Disease 2019; (2) were not accounted for in the budget most recently approved 24 as of the date of enactment if this section for the State or government; and (3) were incurred 25 during the period that begins on March 1, 2020, and ends on December 30, 2020.” CARES 26 Act § 5001(d). further, the oversight of the funds is dedicated to the Inspector General of 27 the Department of the Treasury, and any funds spent in contravention of the CARES Act 28 will be “booked as debt. . . owed to the federal Government.” Id. at §5001(f)(1) and (0(2) 29 Plaintiffs respond by arguing that: (1) Wong involves a specific grant, for a specific 30 program, at a specific agency, and is thus distinguishable from the CARES Act. The CARES 31 Act, by contrast is very broad, allowing much deference to individual states, tribes, and 32 territories, and is likewise not a grant; (2) the Guam Legislature enacted a spending

CV0733-20, Layla Story-Bernardo, et al v. Government of Guam, et al. Page 6 of 25 1 restriction statute years afier the Wong decision was handed down which renders it 2 inapplicable to the current situation; and (3) a ruling in favor of the Government would 3 directly contradict the Guam legislature’s oversight of Section 30 funds. See Opp’n to 4 Def.’s Mot. to Dismiss (Jan. 25, 2021). 5 As to the first argument, Wong involves the Consumer Counsel, a local 6 governmental entity, which applied for and was awarded a 100 percent federally funded 7 grant in order to establish a Guam Office of Consumer Services. See Wong v. Camina, 2 8 Guam R. 132 (D. Guam 1978). The Bureau of Budget and Management Research refused 9 to release the money claiming that Guam Law prohibited the expenditure of federal funds 10 without an appropriation by the Guam Legislature. Id. The court held the grant was “for a 11 specific purpose and fully funds that purpose without the need for local funding or local 12 legislative control” and therefore, the Bureau of Budget and Management Research must 13 release the funds. Id. Thus, Plaintiffs argue that Wong is distinct from the current case 14 because the CARES Act gives a broad directive and is not a specific grant. However, nothing 15 in Wong limits that decision to grants alone, in fact, it states, “the United States Congress 16 can make appropriations directly to the Government of Guam. Where these appropriations 17 or grants completely fund a specific purpose . . . there is no authority for the Guam 18 Legislature to assume the responsibility of appropriating these funds.” Id. (emphasis added). 19 Thus, any nominal distinction between the status of the funds as a grant or an appropriation 20 is immaterial. 21 The second and third arguments forwarded by Plaintiffs are related. The first 22 argument centers around Guam law, 10 GCA § 19803(a), enacted in 2003, which states the 23 Governor of Guam, “may transfer from the General Fund up to One Hundred Thousand 24 Dollars ($100,000.00) monthly as an emergency appropriation upon the declaration of a 25 public health emergency, and upon notification to the United States Centers for 26 Disease Control (‘CDC’) to address, mitigate or abate any catastrophic disease control 27 situations relating to the spread or outbreak of communicable disease.” 10 GCA § 19803(a). 28 Further, “the aggregate amount of all expenses incurred pursuant to this Section shall not 29 exceed Six Hundred Thousand Dollars ($600,000.00) for any fiscal year. Any amounts in 30 excess are subject to [the Guam Legislature’s] appropriation.” 10 GCA § 19803(c)(2). Thus, 31 Plaintiffs argue that the later law should control, and the Wong case has been substantially 32 reversed by 10 GCA §19803 in the current pandemic situation. Therefore, any

CV0733-20, Layla Story-Bernardo, et al v. Government of Guam, et al. Page 7 of 25 1 appropriations in excess of Six Hundred Thousand Dollars need the approval and allocation 2 of the Guam Legislature. 3 Relatedly, Plaintiffs argue that the CARES Act fund is akin to the General Fund, and 4 any decision in the favor of Defendants would necessarily alter the appropriations process 5 of the General Fund. The General Fund is mostly derived from federal income taxes 6 collected by the federal government and paid by military personnel and other federal 7 employees working in Guam. See United States v. Government, 2013 WL 4496917 at n. 9 8 (D. Guam 2013). Further, according to Plaintiffs, the General Fund, like the CARES Act, is 9 coupled with a broad purpose. See 48 U.S.C. § l421h (“all. . . fees collected in Guam shall 10 be covered into the treasury of Guam and shall be expended for the benefit and government 11 of Guam in accordance with its annual budget”). Thus, as these funds are directed to Guam 12 through congressional act, the General Fund acts as a recurring appropriation from the 13 Federal Government. Therefore, any decision finding the CARES Act to be untethered from 14 legislative oversight as a purely federal appropriation will also implicate the General Fund, 15 which historically, has operated under legislative oversight and allocation. 16 The Court disagrees with these assertions. First, the CARES Act was issued with a 17 specific directive, stating, “[t]he requirement that expenditures be incurred ‘due to’ the 18 public health emergency means that expenditures must be used for actions taken to respond 19 to the public health emergency.” See Coronavints Relief Fund for States, Tribal 20 Governments, and Certain Eligible Local Governments, $6 fed. Reg. 10, 4184 (Jan. 15, 21 2021). The Department of the Treasury guidance, as codified in the federal register, provides 22 a “nonexciusive” list of twenty examples of eligible expenditures. Id. While there is a fair 23 amount of discretion involved in spending the CARES Act funds, it is clear that there is a 24 specific purpose attached to the funds. Thus, this Court is convinced that the CARES Act 25 funds are “for a specific purpose and fully funds that purpose without the need for local 26 funding or local legislative control.” Wong v. Camina, 2 Guam R. 132 (D. Guam 197$). 27 Therefore, Plaintiffs are incorrect in asserting that the Guam Legislature should have 28 appropriation control of CARES Act funds. 29 Next, Plaintiffs cite 10 GCA § 19803 for the proposition that the legislature enacted 30 a law to curb the reach of Wong in the current disease outbreak and pandemic situation. 31 However, the law allows the governor to “transfer from the General Fund up to One 32 Hundred Thousand Dollars ($100,000.00) monthly as an emergency appropriation upon

CV0733-20, Layla Story-Bemardo, et al v. Government of Guam, et al. Page $ of 25 1 the declaration of a public health emergency. . . .“ 10 GCA § 19803 (emphasis added). 2 The General Fund, as the name connotes, is a general source of funds and the CARES Act, 3 as discussed above, is a purely federal appropriation for a specific purpose. Thus, 10 GCA 4 § 19803 and Wong are consistent with each other because 10 GCA § 19803 involves 5 spending from the General Fund, over which the Guam Legislature has appropriation 6 control, and Wong, by contrast, involves spending from a a purely federal appropriation for 7 a specific purpose. Further, “the legislature is presumed to know the state of the law, $ including case law, at the time it enacts a statute.” State v. Jones, 298 N.W.2d 296, 298 9 (Iowa 1980). There is no evidence that the legislature intended to limit the Wong decision 10 when they passed 10 GCA § 19803. The General Fund has no specific purpose, but rather 11 exists “for the benefit and government of Guam in accordance with its annual budget.” 48 12 U.S.C. § 1421h. While the CARES Act does have a specific purpose, and therefore, any 13 decision this Court renders will have no effect on the appropriation process as it relates to 14 the General Fund. 15 Other courts have reached the same conclusion. A New Hampshire Court held, 16 during a case in which state legislators brought an action against the Governor for failing to 17 allow oversight of CARES Act funds from the state legislative branch fiscal Committee, 18 that the Plaintiffs lacked standing because “[t]he CARES Act funds are entirely federal, and 19 plaintiffs have not articulated how their expenditure by [the] Governor. . . will cause any 20 harm, direct or indirect, to any individual who pays state taxes.” Waliner v Sununu, 21 Docket No. 216-2020-CV-00342 (N.H. Super. Ct., Apr. 22, 2020). The Court later granted 22 a Motion for Reconsideration on the grounds that the Plaintiffs “narrowed their focus and 23 now argue they have standing because the Governor’s actions are nullifying their statutory 24 right to vote as members of the Fiscal Committee.” Id. (June 5, 2020). However the Court 25 reaffirmed that the legislative members lack standing, absent a concrete injury, as taxpayers. 26 Id. The same is true on Guam. See In re A.B. Won Fat International Airport Authority, 27 Guam, 2019 Guam 6 ¶ 19. 28 B. Plaintiffs Have No Nexus Between Their Status As Guam Taxpayers 29 And The Miegedly Illegal Use of Federal Funds. 30 In the context of taxpayer standing, there is an additional requirement that there 31 exists a “nexus between their status [as taxpayers] and the challenged [conduct].” Hinrichs 32 v. Speaker of House of Representatives of Indiana General Assembly, 506 F.3d 584, 597

CV0733-20, Layla Stoiy-Bemardo, et al v. Government of Guam, et al. Page 9 of 25 1 (7th Cir. 2007). Further, “state taxpayers are held to the same standing requirements as 2 federal taxpayers.” Id. The same holds true for Guam taxpayers. See Guam Mem ‘1 Hosp. 3 Auth. v. Superior Court, 2012 Guam 17 ¶ 9 (“We have nonetheless adopted traditional 4 standing requirements.”). Moreover, “{ijn the Ninth Circuit, taxpayers have standing to file 5 a taxpayer suit if their complaint sets forth a sufficient nexus between taxpayer, tax dollars, 6 and the allegedly illegal government activity.” Rice v. Cayetano, 941 F.Supp. 1529, 1538 7 (D. Hawaii 1996). 8 Here, there exists no nexus between Plaintiffs status as Guam taxpayers, and the 9 alleged misuse of entirely Federal funds. The Plaintiffs are bringing suit as local territorial 10 taxpayers, pursuant to the Enforcement ofProper Government Spending Act, while the tax 11 dollars used in the allegedly illegal government activity are entirely federal. Thus, Plaintiffs 12 camiot have standing to challenge the use of federal funds as Guam taxpayers. See TABOR 13 Foundation v. Colorado Department of Health Care Policy and Financing, 2020 WL 14 6495072 *4 (finding Plaintiffs lack standing when “[t]here is no evidence in the record that 15 individual tax payer dollars are used by the programs in any way.”). See also Hotaling v. 16 Hickenlooper, 275 P.3d 723, 727 (Cob. App. 2011) (finding no standing where Plaintiff 17 “challenges an expenditure of federal funds — to which he has no connection as a Colorado 18 taxpayer.”). 19 Finally, other jurisdictions have agreed with this Court, finding “a governmental 20 subdivision use of funds not derived from state taxpayer monies is not subject to a challenge 21 for unlawful disbursement.” Chapman v. Bevilacqua, 42 S.W.3d 378, 384 (Ark. 2001). See 22 also Matthaei v. Housing Authority of Baltimore City, 9 A.2d 835, 838 (Md. 1939) 23 (“[M]isuse of Federal funds would not cause injury to the complainants as state and city 24 taxpayers, and support a suit by them.”). All Plaintiffs in the class lack standing as taxpayers 25 to challenge the Governor’s use of CARES Act Funds, and therefore all claims alleging an 26 illegal expenditure of CARES Act Funds, including Counts I, II, and IX, must be dismissed 27 for lack of taxpayer standing. 28 29 II. Plaintiff Rene Balbin Lacks Constitutional Standing. 30 Plaintiff Rene Balbin is the only named plaintiff who works as a member of the 31 Judicial Branch and not the Executive Branch. See Class Action Compl. ¶J 6-18. As above, 32 the traditional standing requirements as expressed in Article III of the United States

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I Constitution apply to Guam’s courts. See In re A.B. Won Fat International Airport 2 Authority, Guam, 2019 Guam 6 ¶ 16. See also Gitam Memorial Hospital Authority v. 3 Superior Court, 2012 Guam 17 ¶ 9. Constitutional standing requires: (1) an injury-in-fact; 4 (2) that the injury can be fairly traced to the challenged action by Defendant; and (3) it is 5 likely beyond mere speculation that a favorable decision will remedy the injury sustained. 6 A.3. Won Pat, at ¶ 17. An injury-in-fact needs to be both “concrete and particularized” and 7 “actual and imminent, not conjectural or hypothetical.” Lijan v. Defenders of Wildlfe, 504 $ U.S. 555, 560 (1992) (internal citations omitted). 9 A. Plaintiff Rene Balbin Has Failed to Allege an Injury In Fact As To 10 Counts HI, IV, VU, and VIII. 11 A motion for dismissal due to lack of personal jurisdiction can be “either on the face 12 of the pleadings or by presenting extrinsic evidence for the Court’s consideration.” Atesom 13 v. Guam Memorial Hospital, 2016 WL 5724790 (D. Guam 2016). See also Thornhill Pub. 14 Co., Inc. v. General Tel. & Electronics Corp. 594 F.2d 730, 733 (9th Cir. 1979) (“A motion 15 to dismiss for lack of subject matter jurisdiction may either attack the allegations of the 16 complaint or may be made as a “speaking motion” attacking the existence of subject matter 17 jurisdiction in fact.”). A facial attack is one which “asserts that the allegations contained in 18 a complaint are insufficient on their face to invoke. . . jurisdiction.” Safe Airfor Everyone 19 v. Meyer, 373 F.3d 1035, 1039 (9th Cir. 2004). In a facial attack, the court “must accept all 20 of the factual allegations in the complaint as true.” Lacano Investments, LLC v. Balash, 765 21 f.3d 1068, 1071 (9th Cir. 2014). 22 In contrast, a factual attack “disputes the truth of the allegations that, by themselves, 23 would otherwise invoke.. jurisdiction.” Safe Airfor Everyone, at 1039 (9th Cir. 2004). A .

24 court resolving a factual attack on jurisdiction may review evidence beyond the complaint 25 without converting the motion to dismiss into a motion for summary judgment. Id. (citing 26 Savage v. Glendale Union High School, 343 F.3d 1036, 1039 n. 2 (9th Cir. 2003)). Further, 27 “no presumptive truthfulness attaches to plaintiffs allegations, and the existence of disputed 28 material facts will not preclude the trial court from evaluating for itself the merits of the 29 jurisdictional claims,” and finally, “the plaintiff will have the burden of proof that 30 jurisdiction does in fact exist.” Mortensen v. First Federal Say. And Loan Ass ‘n, 549 F.2d 31 884, 891 (3rd Cir. 1977).

CV0733-20, Layla Story-Bemardo, et al v. Government of Guam, et al. Page 11 of 25 1 Here, Defendant Baird has presented a factual attack on jurisdiction, as she is arguing 2 against the factual basis for the allegation and not the form, or the specific elements pled. 3 See generally Mem. in Support of Mot. to Dismiss (Dec. 27, 2020). Thus, the Court may 4 consider extrinsic evidence including “matters of public record.” Atsom, at * 4 (D. Guam 5 2016). Plaintiff Rene Balbin, as to Counts III and IV (as well as Counts VII, and VIII as they 6 relate to DOA Rule 2.406(C)(2) and any due process or equal protection cause of action), 7 relies on the allegation that the Judiciary was closed to the public. See Class Action Compl. 8 ¶J 61-68, 77, 117, 123, 127, 191, 193. However, after reviewing the public record, it is clear 9 to this Court that the Judiciary was never closed. Pursuant to Administrative Orders by the 10 Supreme Court of Guam, the Judiciary was “deemed open for filing any proper paper, issuing 11 and returning process, making a motion, and entering an order.” ADM2O-210 at ¶ 5 (Mar. 12 16, 2020). further, a list of urgent matters “shall continue to be scheduled and heard 13 either in person or remotely by video conferencing or telephonic appearance. . . .“ Id. ¶ 2. 14 The Class Action Complaint was filed on October 6, 2020, and the Judiciary, at that 15 point, was filly open to six groups of people.2 Thus, at most, the Judiciary was only ever 16 partially closed to the public. Therefore, Plaintiff Balbin cannot assert an injury-in-fact to all 17 claims that require the closure of the Judiciary as a prerequisite because there was no closure 18 and as such, no actual injury. Plaintiff Balbin lacks standing as to Counts III and IV. 19 However, contrary to Defendant Baird’s assertions, Counts V and VI do not require the 20 closure of the agency at issue, and thus are not implicated in the above analysis. 21 B. Additionally And Alternatively, Plaintiff Balbin Has Failed To 22 Exhaust Administrative Remedies. 23 ‘Where a statute requires exhaustion of administrative remedies, a party’s failure to do 24 so deprives this Court of subject matter jurisdiction. Carison v. Perez, 2007 Guam 6, ¶ 66, 25 69; Puga v: Chertoff 482 f.3d 812, 815 (9th Cir. 2007). The exhaustion requirement 26 “prevents piecemeal application for judicial relief and unwarranted interference by the

2 (1) essential court operations which could not be resolved remotely continued at the Guam Judicial Center in Hagatha; (2) the Northern Court Satellite in Dededo was open to the public from 10 a.m. to 3 p.m., Monday to friday; (3) the following transactions were allowed at the Guam Judicial Center by appointment only: payment of traffic citations, payment of case-related obligations (including bail, restitution, and fines and fees), and requests for traffic and court clearances; (4) non-essential matters as scheduled by the court which cannot be resolved remotely (starting on October 5, 2020); (5) certain in-person appointments with the Probation Services Division; and (6) certain in-person appointments with the Client Services and family Counseling Division.

CV0733-20, Layla Story-Bemardo, et al v. Government of Guam, et al. Page 12 of 25 1 judiciary in the administrative process.” Horrell v. Dep 1 ofAdmin., 861 P.2d 1194, 1197 2 (Cob. 1993). Otherjurisdictions have regularly concluded that agencies “possess[] exclusive 3 jurisdiction over State personnel mailers until the available administrative remedies have 4 been exhausted.” Glover v. State, 860 P.2d 1169, 1172 (Wyo. 1993). See also Janssen v. 5 Denver Career Service 3d., 998 P.2d 9 (Cob. App. 1999). Further, “[a]n administrative 6 remedy is not appropriate when the claimant challenges the validity of a statute authorizing 7 or requiring administrative action and does not seek a particular analysis or application of a 8 statute.” Bruns v. Munictpalily of Anchorage, Anchorage Water & Wastewater Utility, 32 9 P.3d 362, 370 (Alaska 2001). Finally, [tjhe decision to decline jurisdiction because a party 10 failed to exhaust his administrative remedies is vested in the sound discretion of the trial 11 court.” Glover, at 1172 (Wyo. 1993). 12 However, administrative exhaustion can be avoided if deemed futile. See Barrett- 13 Anderson v. Camacho, 2015 Guam 20, ¶ 32. “Ordinarily, futility refers to the inability of an 14 administrative process to provide appropriate relief.. and the burden of proving that any .

15 particular administrative remedy is futile rests with the litigant seeking to bypass it.” In re 16 Doe, 30 P.3d 878, 893 n. 20 (Haw. 2001). Moreover, “the futility exception is not available 17 for the asking. Reliance on the exception in a given case must be anchored in demonstrable 18 reality.” Portela-Gonzalez v. Secretary of the Navy, 109 F.3d 74, 78 (1st Cir. 1997). Thus, 19 “[u]nsupported and speculative claims of futility do not excuse the claimant’s failure to 20 exhaust his or her administrative remedies.” Midgett v. Washington Group Intern Long Term 21 Disability Plan, 561 F.3d 887, 898 (8th Cir. 2009). 22 Here, Plaintiffs are seeking an application of various statues and regulations 23 including those for overtime and double pay. See generally Class Action Compl. (Oct. 6, 24 2020). Guam statutory law states “[t]he personnel rules adopted for the Judicial Branch by 25 the Judicial Council shall require that the Council hear all classified employee appeals.” See 26. 4 GCA § 4105(c)(1). The Judiciary Personnel Rule 3.30 states, “[ajny mailer covered by the 27 Personnel Law and these rules may be appealed to the Judicial Council.” Thus, Plaintiff 28 Balbin is seeking a specific application of statutory law that requires administrative 29 exhaustion through appeal to the Judicial Council in order for this Court to have jurisdiction 30 over the mailer. 31 Plaintiffs have alleged the futility of administrative exhaustion due to the closure of 32 “various government agencies,” the statements ofthe Governor, and the closure ofthe Guam

CV0733-20, Layla Story-Bernardo, et al v. Government of Guam, et al. Page 13 of 25 1 Civil Service Commission. See Class Action Compl. ¶J 9 1-96. However, none of these 2 allegations affect the appeals process of the Judiciary. The Judiciary is separate and co-equal 3 branch of Government which is not headed by the Governor, and the appeals process flows 4 through the Judicial Council, not the Civil Service Commission. Thus, any alleged 5 Executive Branch policy to deny administrative claims concerning this matter do not affect 6 the Judiciary. Plaintiff attempts to counteract the separation of powers problem inherent in 7 their assertion of futility as directed at the Judiciary of Guam, by postulating that the 8 Judiciary would necessarily follow the statements of the Governor, and would “follow the 9 leader” in upholding the Executive Branch’s alleged stance on this issue. See Mm. Entry at 10 10:08:53 AM (Apr. 28, 2021). However, the Court is not convinced. Further, the burden is 11 on the Plaintiff to show that jurisdiction exists and the Plaintiffs have offered no evidence 12 other than bald assertions that the Judiciary would necessarily find against the Plaintiffs 13 position. See Mortensen v. First Federal Say. And Loan Ass ‘n, 549 F.2d 884, 891 (3rd Cir. 14 1977). Therefore, Plaintiff Balbin has claimed futility in a manner which is “unsupported 15 and speculative” and as such, insufficient. See Midgett at 898 (8th Cir. 2009). 16 Plaintiff Balbin lacks standing to bring suit as to Counts III and IV because he was 17 not injured-in-fact, and jointly or alternatively, lacks standing as to Counts III, IV, V, VI, 18 and VII, because he failed to exhaust his administrative remedies. All claims against the 19 Judiciary of Guam by Plaintiff Rene Balbin must be dismissed for lack of subject matter 20 jurisdiction. 21 22 III. The Remaining Plaintiffs Have Constitutional Standing. 23 As above, Constitutional standing requires: (1) an injury-in-fact; (2) that the injury 24 can be fairly traced to the challenged action by Defendant; and (3) it is likely beyond mere 25 speculation that favorable decision will remedy the injury sustained. A.B. Won Fat, at ¶ 17. 26 An injury-in-fact needs to be both “concrete and particularized” and “actual and imminent, 27 not conjectural or hypothetical.” Lujan v. Defenders of Wildlife, 504 U.S. 555, 560 (1992) 28 (internal citations omitted). 29 A. The Remaining Plaintiffs Have Alleged An Injury-In-Fact. 30 Courts have routinely held that, “{t]ypically, a plaintiffs allegations of financial 31 harm will easily satisfy these components, as financial harm is a classic and paradigmatic 32 form of injury in fact.” Cotrell v. Alcon Laboratories, 874 f.3d 154, 163 (3rd Cir. 2017).

CV0733-20, Layla Story-Bemardo, et al v. Government of Guam, et al. Page 14 of 25 1 See also Equity Lfestyle Properties, Inc. v. County ofSan Luis Obispo, 548 F.3d 1184, 1189 2 (9th Cir. 2008). further, any argument that Plaintiffs lack a property interest in overtime, 3 double pay, and hazard pay is “conflat[ing] standing with the merits of the case.” Booker- 4 El v. Superintendent Indiana State Prison, 668 F.3d 896, 899 (7th Cir. 2012). As long as 5 Plaintiffs have “a colorable claim to a property interest. . .“ than injury in fact is satisfied. 6 Id. 7 Here, Plaintiffs have alleged they are employees of the Government of Guam and 8 their agencies were closed to the public. See Class Action Compl. ¶J 69-84. They allege that 9 the public health emergency triggered pay requirements due to them through agency 10 regulations and Guam law. See Id. ¶J 113-124. Finally, they allege the decision to not pay 11 them as required has violated their equal protection and due process rights, as well as being 12 indirectviolationofGuamlaw.SeeId.f83,84, 113, 117, 118, 120-124, 158. 13 Therefore, the Plaintiffs have sufficiently alleged an injury in fact in the form of 14 pecuniary loss due to interference into a legally protected interest. There is at least a 15 colorable claim that Plaintiffs have a property interest in the money allegedly due to them. 16 The injury is fairly traced to the decision by Defendants to not pay Plaintiffs, and a favorable 17 decision will mend the injury by Plaintiffs receiving the monies allegedly due to them. Thus, 18 the remaining Plaintiffs have satisfied the Constitutional standing test as outlined by the 19 Guam Supreme Court as to Counts III, IV, V, VI, VII, and VIII. 20 B. Sovereign Immunity Has Been Waived Because Administrative 21 Exhaustion Was Futile. 22 “Sovereign immunity implicates a court’s subject matter jurisdiction.” Sumitomo 23 Constr. Co. v. Gov’t of Guam, 2001 Guam 23 ¶ 22. In order for a lawsuit to be maintained 24 against the Government of Guam, “sovereign immunity must be expressly waived by duly 25 enacted legislation.” Bautista v. Agustin, 2015 Guam 23 ¶ 18. See also Gange v.Gov’t of 26 Guam, 2017 Guam 2 ¶ 34 (“Waivers of sovereign immunity must be unequivocally 27 expressed and are strictly construed.”). The Guam Legislature via the Government Claims 28 Act has specifically waived sovereign immunity for tort claims and actions that are 29 contractual in nature. See 5 GCA §6101 et seq. “For employees of the Government of Guam 30 . . . [there exists] two different methods for overcoming sovereign immunity. First 31 employees protected under the merit system can seek judicial review of a final adverse 32 action. Second, employees under contract may pursue potential remedies through the

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1 Government Claims Act.” Ehiert v. University of Guam, 2019 Guam 27 11 (internal 2 citations omitted). The Guam Supreme Court has held, “without proper administrative 3 exhaustion, the Legislature has not waived sovereign immunity.” DfS Guam L.P. v. A.B. 4 Won Pat International Airport, 2020 Guam 20 ¶ 60. 5 As above, “[u]nder the futility exception, exhaustion is not required where 6 administrative remedies sought would be futile.” Barrett-Anderson v. Camacho, 2015 Guam 7 20 ¶ 32-34. Defendants present a facial attack on the claims of futility and as such, “the 8 court may not simply assume the allegations supporting standing lack merit and dismiss the 9 case.” Barefoot v. Jennings, 456 P.3d 447, 450 (Cal. 2020). The Guam Supreme Court in 10 Barrett-Anderson, found that administrative exhaustion was futile when the DRT did not 11 answer any letters sent by the Attorney General and continued issuing electronic gaming 12 licenses. See Barret-Anderson, 2015 Guam 20 ¶ 33. It therefore, was DRT’s position that 13 the “issuance of electronic gaming licenses was lawful,” and any attempt to “challenge the 14 regulations’ validity at the agency level would have been futile.” Id. at ¶ 34. 15 Plaintiffs have alleged, “Governor Leon Guerrero and Director Edward Birn of the 16 Department of Administration have declared, without reason, that double pay is not 17 applicable to the Emergency.” See Class Action Compl. ¶ 91. They further allege, “the 18 Attorney General of Guam has also declared that double pay is not applicable to Plaintiffs. 19 . . .“ Id. ¶ 92. Finally, they allege “various Government Agencies that would hear such 20 grievances have been closed,” including the Guam Civil Service Commission. Id. ¶ 93, 95. 21 Thus, as in Barrett-Anderson, the Governor of Guam and the Attorney General both have 22 espoused a position that the regulations did not apply to Plaintiffs and therefore this Court 23 finds that administrative exhaustion would have been futile and sovereign immunity was 24 thereby waived. The remaining Plaintiffs have Constitutional standing as to Counts III, IV, 25 V, VI, VII, and VIII. 26 27 IV. Counts Ill., IV. V VI, VII, and VIII Are Dismissed For Failure To State A 28 Claim Upon Which Relief Can Be Granted. 29 The Guam Rules of Civil Procedure provide, “[a] pleading which sets forth a claim 30 for relief... shall contain.

. .. . a short and plain statement of the claim showing that the 31 pleader is entitled to relief.” GRCP Rule 8(a). The Supreme Court first interpreted Federal 32 Rule of Civil Procedure 8(a)(2), on which Guam Rule of Civil Procedure 8(a) is based, to

CV0733-20, Layla Story-Bernardo, et al v. Government of Guam, et al. Page 16 of 25 1 mean that a valid complaint need only provide, “fair notice of what the plaintiffs claim is 2 and the grounds upon which it rests.” Conley v. Gibson, 355 U.S. 41, 45-47 (1957). The 3 Court further clarified, “a complaint should not be dismissed for failure to state a claim 4 unless it appears beyond doubt that the plaintiff can prove no set of facts in support of his 5 claim which would entitle him to relief.” Id. at 45-46. 6 However, fifty years later, the Supreme Court announced a new heightened pleading 7 standard. The Court held, there is a “need at the pleading stage for allegations plausibly 8 suggesting that the ‘plain statement’ possess enough heft to ‘sho[wj that the pleader is 9 entitled to relief.” Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 557 (2007) (quoting fRCP 10 Rule 8(a)). Therefore, ‘[w]hile a complaint attacked by a. . . . motion to dismiss does not 11 need detailed factual allegation, a plaintiffs obligation to provide the ‘grounds’ of his 12 ‘entitlement to relief requires more than labels and conclusions.” Id. at 555 (citations 13 omitted). The plausibility standard required that plaintiff needed to allege plausible facts 14 connected to his claim for relief. Thus, a plaintiff needs to facially allege sufficient facts to 15 “nudge[] their claims across the line from conceivable to probable.” Id. at 570. This standard 16 was extended to federal civil cases. See Ashcroft v. Iqbal, 556 U.S. 662 (2009). 17 The Supreme Court of Guam rejected applying the plausibility standard to local civil 18 pleadings. See Ukau v. Wang, 2016 Guam 26 ¶ 32 (“Based on the plain language of Rule 19 8(a) and this court’s historical interpretation as imposing only a liberal, notice pleading 20 requirement, we find that the Twombly standard is inapplicable to local civil 21 pleadings.”).Further, the “trial court must construe the pleading in the light most favorable 22 to the non-moving party and resolve all doubts in the non-moving party’s favor.” kL at ¶ 51 23 (citing First Hawaiian Bank v. Manley, 2007 Guam 2 ¶ 9). Therefore, in Guam, “the trial 24 court should []consider each and every claim. . . employing the Conley ‘no set of facts’ 25 language.” Lujan v. 1L.H Trust, 2016 Guam 24 ¶ 15. 26 A. Due Process Claim. 27 Count III of the Complaint alleges a violation of the Due Process Clause and the 28 Guam Organic Act. See Compl. ¶J 113-124. “[S]ubstantive due process.. guarantees that .

29 a state cannot deprive a person of a protected interest for certain reasons.” County of 30 Sacramento v. Lewis, 523 U.S. 833, 846 (1998). In order to succeed in a Substantive Due 31 Process claim, a Plaintiff must show a constitutionally protected interest in property. Gerhart 32 v. Lake Co., Montana, 637 f.3d 1013, 1019 (9th Cir. 2011). In order to constitute a property

CV0733-20, Layla Story-Bernardo, et al v. Government of Guam, et al. Page 17 of 25 1 interest, a person must have a “legitimate claim of entitlement” to the benefit, as opposed to 2 an abstract desire or unilateral expectation. Board ofRegents of State Colleges v. Roth, 408 3 U.S. 564, 577 (1972). Further, “[p]roperty interests, of course, are not created by the 4 Constitution. Rather they are created and their dimensions are defined by existing rules or 5 understandings that stem from an independent source such as state law—rules or 6 understandings that secure certain benefits and that support claims of entitlement to those 7 benefits.” Id. Moreover, “a property interest can be created expressly or may arise through 8 implication from a state agency’s words, actions, rules, or mutually explicit understandings.” 9 Turnquistv. Elliot, 706 F.2d 809, 811 (7th Cir. 1983). 10 Further, “[t]he doctrine of qualified immunity protects government officials ‘from 11 liability for civil damages insofar as their conduct does not violate clearly established 12 statutory or constitutional rights of which a reasonable person would have known.” Pearson 13 v. Callahan, 555 U.S. 223, 231 (2009) (quoting Harlow v. Fitzgerald, 457 U.S. 800, 818 14 (1982)). Qualified immunity is “an immunity from suit rather than a mere defense to liability 15 . . . it is effectively lost if a case is erroneously permitted to go to trial.” Mitchell v. Forsyth, 16 457 U.S. 511, 526 (1985). Accordingly, there is “importance [in] resolving immunity 17 questions at the earliest possible stage of litigation.” Hunter v. Bryant, 502 U.S. 224, 227 18 (1991). However, qualified immunity does not apply to “.

.. § 1923 cases against individuals 19 where injunctive relief is sought instead of or in addition to damages.” Pearson, at 242 (2009) 20 (citing County ofSacramento v. Lewis, 523 U.S. 833, 841 n. 5 (1998)). 21 Finally, “[l]ike territories, states are not ‘persons’ for purposes of Section 1983.” 22 Guam Soc. Of Obstetricians and Gynecologists v. Ada, 962 F.2d 1366, 1371 (9th Cir. 1992) 23 (citing Will v. Michigan Dep ‘t of State Police, 491 U.S. 58, 63-65 (1989)). Therefore, “[i]n 24 addition, state officers, when sued for damages in their official capacities, are likewise not 25 “persons” within the meaning of 1923.” Id. The policy behind this doctrine is clear, a state 26 officer must not be a person and instead a function of the state itself, when “a judgment 27 against a state official in his or her official capacity runs against the state and its treasury.” 28 Id. (citingKentucAyv. Graham, 473 U.S. 159, 166 (1985)). 29 First, Plaintiffs cannot have a “legitimate claim of entitlement” to an allegedly 30 regulatory created property interest when they have failed to plead all the necessary elements 31 of that regulation. See Infra at § IV (C) — (E). Further, Defendants, in their personal capacity 32 are protected from suit through qualified immunity, as to any claims for monetary damages,

CV0733-20, Layla Stoiy-Bernardo, et al v. Government of Guam, et al. Page 18 of 25 1 as the status of double pay and overtime pay as a constitutional right is unclear. See Anderson 2 v. Creighton, 483 U.S. 635, 640 (1987) (“[t]he contours of the right must be sufficiently clear 3 that a reasonable official would understand that what he is doing violates that right.”). 4 Qualified immunity does not apply to prospective injunctive relief. See County of 5 Sacramento v. Lewis, 523 U.S. 833, 841 n. 5 (1998). finally, the Court cannot sustain an 6 action for monetary damages against officials acting in their official capacity because they 7 are not “persons” as required under 42 U.S.C. § 1983 in this mailer, because any judgment 8 in the favor of the Plaintiffs would necessarily be paid out of the Guam treasury. 9 Therefore, the Due Process claim must be dismissed for failure to state a claim 10 because: (1) Plaintiffs failed to allege a “legitimate claim of entitlement” to a property 11 interest in double pay and overtime pay; (2) any monetary claims against officials in their 12 personal capacity are blocked through qualified immunity; and (3) any monetary claims 13 against officials in their official capacities are blocked because the officials are not “persons” 14 as requiredby 42 U.S.C. § 1983. 15 B. Equal Protection Claim 16 An equal protection claim may be established by Plaintiff alleging that: he is a 17 member of a suspect class or “(1) he is a member of an identifiable class; (2) he was 18 intentionally treated differently from others similarly situated; and (3) there is no rational 19 basis for the difference in treatment.” See, Viii. of Willowbrook v. Otech, 528 U.S. 562, 564 20 (2000). “A plaintiff must allege facts, not simpiy conclusions, which show that an individual 21 was personally involved in the deprivation of his civil rights.” Laguana v. Ishizaki, 2006 WL 22 156955 (D. Guam). Further, “a suspect class is one ‘saddled with such disabilities, or 23 subjected to such a history of purposeful unequal treatment, or relegated to such a position 24 of political powerlessness as to command extraordinary protection from the majoritarian 25 political process.” Massachusetts 3d. of Retirement v. Murgia, 427 U.S. 307, 313 (1976) 26 (quoting San Antonio School District v. Rodriguez, 411 U.S. 1, 16(1973)). 27 Here Plaintiffs have simply pled, “the change [in] due process of law in application 28 of the emergency pay regulations have not been applied uniformly to all workers of the 29 Government of Guam, and no rational basis exists for the difference in application.” Compl. 30 ¶ 122. Plaintiffs continue, “[t]his has resulted in some agencies receiving double pay while 31 others are refused double pay based on that agency not being ‘closed.” Compl. ¶ 123. 32 Plaintiffs have not alleged they are a member of a suspect class; therefore, they must be a

CV0733-20, Layla Story-Bemardo, et al v. Government of Guam, et al. Page 19 of 25 1 member of an identifiable class and faced intentional differential treatment with no rational 2 basis in order to sustain an equal protection claim. However, Plaintiffs have also failed to 3 allege that they are a member of an identifiable class, rather they merely state conclusory 4 allegations that an equal protection violation exists. Therefore, even construing the pleading 5 in the light most favorable to the non-movant, Plaintiff can prove no set of facts that would 6 entitle him to relief, and the Equal Protection Claim must be dismissed for failure to state a 7 claim. See Balistreri v. PaclcaPoliceDept., 901 f.2d 696, 699 (9th Cir. 198$) (“[d]ismissal $ can be based on the lack of a cognizable legal theory or the absence of sufficient facts alleged 9 under a cognizable legal theory”). 10 C. Violation of Double Pay For Emergency Conditions 11 In Count W, Plaintiffs have alleged a violation of DOA Rule 8.406(c) which states: 12 “[w]hen the Governor declares a State of Emergency, the appointing authority shall 13 determine whether affected facilities or portions thereof, which are located in the area 14 covered by the Executive Order or proclamation, are to be closed.” DOA Rule 8.406(c). 15 The regulation continues: “Those employees, required to remain on duty to provide essential 16 services, shall be paid at double the regular rate, or granted compensatory leave credits 17 for the hours worked during the period the facility is closed. . . .“ DOA Rule 8.406(c)(2). 18 The plain language of the regulation provides that in order for the double pay 19 provisions to be triggered: (1) the agency must be closed, (2) other employees must be on 20 paid excused leave, and (3) there must be hazardous or unsafe working conditions. See DOA 21 Rule 8.406. Other Superior Court of Guam case law has found, “Rule 8.406 is intended to 22 provide additional compensation to essential employees who are forced to work during a 23 period when similarly situated workers are on excused leave status, thereby rectifying any 24 disparate treatment among employees.” Topsana v. Government of Guam, SP0064-20, at 10 25 (Super. Ct. Guam Jun. 4, 2020). Thus, in order for the double pay provision to be triggered, 26 other employees must have been on excused leave. 27 Plaintiff has failed to allege that other employees were on excused leave status. They 28 simply allege that Plaintiffs were “essential and remained on duty at the instruction of [the 29 agency].” See Class Action Compl. ¶J 130-17 1. Therefore, while the violation of the Double 30 Payfor Emergency Conditions regulation is a cognizable legal theory, it requires that other 31 employees be on paid excused leave, and Plaintiffs have not alleged sufficient facts to 32 support that legal theory. See Balistreri, 901 F.2d 696, 699 (9th Cir. 1988). As such, Plaintiffs

CV0733-20, Layla Story-Bernardo, et al v. Government of Guam, et al. Page 20 of 25 1 can prove no set of facts that would grant them relief, and Count W must be dismissed for 2 failure to state a claim. 3 B. Violation of Overtime Laws 4 Finally, Plaintiffs have alleged a violation of the Minimum Wage and Hour Act 5 which states: 6 7 No employer shall employ any employee in excess of forty (40) hours a week, 8 unless such employee receives compensation for employment in excess of such 9 weekly hours, at a rate not less than one and one-half (1-1/2) times the regular 10 rate at which he is employed, except that the provisions of this Subsection shall 11 not apply to employees covered under Section 207(k) of the Fair Labor Standards 12 Act, Chapter 8 of Title 29 of the United States Code. 13 14 22GCA3107(a). 15 The above allegation works in conjunction with DOA Rule 7.404 which requires that 16 “all employees, whether classified or unclassified, are entitled to overtime pay for all such 17 hours worked during an emergency situation declared by the governor of Guam.” Compl. ¶ 12 181. Thus, Plaintiffs has alleged a violation of both the Minimum Wage and Hour Act, and 19 DOA Rule 7.404 concerning the overtime laws applying to a State of Emergency as declared 20 by the Governor of Guam. See Class Action Compl. ¶J 172-188. 21 However, the Supreme Court of Guam has noted the exceptions to the rule governing 22 overtime compensation, stating: 23 24 While section 3107(a) sets forth a general prohibition, forbidding an employer from 25 requiring employees to work more than forty hours without paying overtime, section 26 3108 then specifically exempts eight classes of employees. See 22 GCA § 3108 27 (2005). In section 3108, the Legislature provides that the maximum hour 28 requirements of the previous section “shall not apply with respect to” those employed 29 by parent, spouse or child (section 3108(a)); administrators, executives and 30 professionals (section 3108(b));.. 31 32 Guerrero, et. al., v. Thomas et. al., 2010 Guam 11 ¶J 16-17.

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2 The exception also applies to teachers. See 22 GCA § 3 108(b)(5). The category of 3 “professionals” includes nurses. See Fazekas v. Cleveland Clinic foundation Health Care 4 Ventures, Inc., 204 F.3d 673, 676 (6th Cir. 2000). The statute also specifically exempts 5 employees covered under the Fair Labor Standards Act which specifically deals with 6 “[ejmployment by public agenc{ies] engaged in fire protection or law enforcement.” See 29 7 U.S.C. § 207(k). The class of Plaintiffs includes teachers, nurses, and law enforcement 8 officers. See generally Class Action Compl. (Oct. 6, 2020). Therefore, either Plaintiffs are 9 exempted from Guam Overtime Laws, or alternatively, have not sufficiently pled their non- 10 exempt status. As such, Plaintiffs have failed to plead a sufficient factual basis to obtain relief 11 under the cognizant legal theory presented in the Minimum Wage and Hour Act. Count V 12 must be dismissed for failure to state a claim. 13 Finally, Defendants argue that DOA Rule 7.404 “require[s] prior approval before 14 overtime is required,” and absent approval, “any overtime hours alleged ‘are not considered 15 hours worked.” Def.’s Mot. to Dismiss (Dec. 29, 2020). The regulation states, “overtime 16 work may be authorized by the appointing authority,” and “no person shall be required to 17 work overtime unless the employee has received certification by the appointing authority 18 that funds for overtime are available.” See DOA Rule 7.402(A); See also DOA Rule 19 7.404(E). The plain language of the rule does not require a certification by the appointing 20 authority for overtime to commence, rather it states, “no person shall be required to work 21 overtime,” absent a certification. See DOA Rule 7.404(E). Thus, the rule is instituted for the 22 protection of government employees to ensure that money exists to pay them overtime as 23 they accrue it. It would be contrary to the policy of the rule to require a certification in order 24 for Plaintiffs to proceed in this case. However, the rule does require that “overtime may be 25 authorized by the appointing authority in the case of emergency” See DOA Rule 7.402(A). 26 Plaintiffs have not sufficiently pled that overtime was authorized by the appointing authority 27 as required by the DOA Rules. Plaintiffs offer no facts, nor any statements, that the overtime 2$ allegedly worked was authorized, and thus subject to the time and a half pay rule. Therefore, 29 Count VI must be dismissed for failure to state a claim. 30 E. Estoppel Claim 31 Estoppel claims against the Government are not categorically barred however Courts 32 have consistently held that “estoppel should be used sparingly against the public entities.”

CV0733-20, Layla Story-Bemardo, et al v. Government of Guam, et al. Page 22 of 25 1 Harding County, S.D. v. Firthioj 575 F.3d 767, 777 (8th Cir. 2009). Thus, in addition to the .2 traditional elements, “estoppel against the government must rest upon affirmative 3 misconduct going beyond mere negligence.” Morgan v. Heckler, 779 F.2d 544, 545 (9th Cir. 4 1985) (citing Simon v. California, 593 f.2d 121, 123 (9th Cir. 1979)). Further, “estoppel will 5 apply only where the government’s wrongful act will cause a serious injustice and the public’s 6 interest will not suffer undue damage by imposition of the liability.” IcL Affirmative 7 misconduct requires an “affirmative misrepresentation or affirmative concealment of a 8 material fact by the government that goes beyond mere negligence.” US. v. Bell, 602 f.3d 9 1074, 1082 (9th Cir. 2010). 10 Here, Plaintiffs have alleged that “the Defendants knew that the Plaintiffs would 11 work, and would expect to work under the pay conditions for similar emergency conditions 12 as they had in the past.. [and] [t]he Plaintiffs allege that that the Defendants intended for .

13 the Plaintiffs to continue to work under such an understanding.” Opp’n to Def. ‘s Mot. to 14 Dismiss at 14 (Jan 25. 2021). Thus, Plaintiffs have not alleged an “affirmative 15 misrepresentation or affirmative concealment” but rather have alleged an implicit agreement 16 to work for double pay. These facts are insufficient to support a claim for estoppel against 17 the Government, and therefore, Count VIII must be dismissed for failure to state a claim 1$ upon which relief can be granted. 19 20 V. Leave To Amend Complaint 21 The Guam Rules of Civil Procedure provide, “a party may amend the party’s pleading 22 only by leave of the court or by written consent of the adverse party; and leave shall be freely 23 given when justice so requires” GRCP 15(a). The Guam Supreme Court also instructs that 24 when considering whether to allow an amendment, a court should review whether there has 25 been “undue delay, bad faith or dilatory motive on the part of the movant, repeated failure to 26 cure deficiencies by amendments previously allowed, undue prejudice to the opposing party 27 by virtue of the allowance of the amendment, [or] futility of amendment.” Arashi & Co. v. 28 Nakashima Enter., 2005 Guam 21 ¶ 16. 29 Guam Rules of Civil Procedure, Rule 15(a) was derived from Federal Rule of Civil 30 Procedure 15(a), and thus interpretations of the federal rule are persuasive in interpreting the 31 Guam rule. See MElee. Corp. v. Phil-Gets (Guam) Int’l Trading Corp, 2016 Guam 35 ¶ 40; 32 See also GRCP 15(a), source note. The freedom to amend a pleading “is to be applied with

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1 extreme liberality.” Morongo Band of Mission Indians v. Rose, 893 F.2d 1074, 1079 (9th 2 Cir. 1990). Further, a lengthy delay is “not alone enough to support denial, [but] is 3 nevertheless relevant,” and the fact that “new claims set forth in the amended complaint 4 would have greatly altered the nature of the litigation and would have required defendants to 5 have undertaken, at a late hour, an entirely new course of defense . . . is not fatal to 6 amendment.” Id. finally, the “determination should be performed with all inferences in favor 7 of granting the motion.” Griggs v. Face American Group, Inc., 170 F.3d 877, $80 (9th Cir. 8 1999). 9 Further, the fact that Plaintiffs “did not present [their] request to amend [their] 10 complaint in a separate formal motion is not a bar.” Balistreri v. Pacflca Police Dept. 901 11 F.2d 696, 701(9th Cir. 1988). A request for leave to amend a complaint should be considered 12 even if it “was not contained in a properly captioned motion.” li See also Edwards v. 13 Occidental Chemical Corp., 892 F.2d 1442, 1445 n. 2 (9th Cir.1990) (“request for leave to 14 amend should have been granted even though request appeared in opposition to motion for 15 summary judgment and was not formally tendered”). Moreover, “leave to amend should be 16 granted if it appears at all possible that the plaintiff can correct the defect.” Breier v. Northern 17 Cal. Bowling Proprietors ‘Ass ‘n, 316 F.2d 787, 790 (9th Cir. 1963). 18 However, leave to amend is inappropriate where a court lacks jurisdiction. 19 Jurisdictional limits deprive a court of the power to act. See Dangle v. Opelousas Health 20 Care, Inc., 774 f.2d 1344, 1348 (5th Cir. 1985); Wood v. Guam Power Auth., 2000 Guam 21 18 atJ3,Newbyv. Gov’t of Guam, 2010 Guam4lf 31. “[O]nthe other hand, [if] a plaintiffs 22 complaint fails to state a claim, he may request an opportunity to amend and it will be 23 liberally granted.” Dangle, at 1348 (5th Cir. 1985). Finally, if the complaint is dismissed for 24 lack of jurisdiction, it is dismissed “without prejudice to the plaintiffs claims, and the 25 rejected suitor may reassert his claim in any competent court.” Id. 26 27 CONCLUSION 28 Based on the foregoing, Defendant’s Motion to Dismiss is GRANTED without 29 prejudice and leave to amend. It is hereby ORDERED that Counts I, II, and IX are 30 dismissed for lack ofjurisdiction without prejudice, all Counts against Defendant Baird in 31 her personal and official capacity are dismissed for lack ofjurisdiction without prejudice,

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1 and Counts III, IV, V, VI, VII, and VIII are dismissed for failure to state a claim with 2 leave to amend. 3 4 $0 ORDERED this day of May, 2021. 5

6

7 Honorable Teresa Kirn-Tenorio Judge, Pro Tempore,

8 Sunerior Court of Guam

SERVICE VIA E-MAIL I acknowledge that an electronic copy of the original was e-mailed to: .f&/Ptt’, A. A &iJA %5d Date: 11m: 5/a 7241

Deputy Clerk, Superior Court of Guam

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