CV0780-13, Leevin Camacho, AG v. Dafne Shimizu, DRT, Lourdes Leon Guerrero, Gov, Atlas Amusement, Ent. Darryl Styles dba D&D Games, Guam Music, Inc. and Does 1-10

Opinion

. FILED 2020 1 K!IR

2 SUPERIOR CC URT 3 IN THE SUPERIOR COURT OF GUAM 0 F C U A M

4 LEEYIN TAITANO CAMACHO, Attorney CWJL CASE NO. CV0780-13 General of Guam, 6 Plaintiff, 7 vs. 8

DAFNE M. SHIMIZU, Director, Guam Department of Revenue and Taxation; 10 LOURDES A. LEON GUERRERO, Governor of Guam; ATLAS AMUSEMENT 11 ENTERPRISES, INC.; DARRYL R. 12 STYLES dlbla D&D GAMES; GUAM MUSIC, INC.; and DOES 1-10, 13 Defendants. 14 15 DARRYL R. STYLES dfbla D&D GAMES, DECISION AND ORDER 16

17 Cross-Plaintiff,

is vs. 19 GOVERNMENT OF GUAM, 20 Cross-Defendant. 21

PACIFIC AMUSEMENT, INC., 23 Cross-Plaintiff, 24 vs. 25

26 DAFNE M. SHIMIZU, Director, Guam Department of Revenue and Taxation, 27 Cross-Defendant. 28 Decision and Order Civil Case No. CV0780-13; Camacho v. Shimizu, et at. . INTRODUCTION 2 This matter came before the Honorable Arthur R. Barcinas on December 5, 2019, upon 3 the Plaintiffs Motion for Summary Judgment Pursuant to Civil Rule 56 (“Plaintiffs Motion for 4 Summary Judgment”) filed December 19, 2016. Assistant Attorney Generals Marianne 5 Woloschuk and James Canto represented the Plaintiff Leevin Taitano Camacho, Attorney 6 General of Guam. Attorney Sophia S. Diaz of the Office of the Governor of Guam represented 7 the public Defendants Dafne M. Shimizu, the Director of Guam Department of Revenue and 8 Taxation, and Lourdes A. Leon Guerrero, Governor of Guam. Attorney Seth Forman represents 9 the Defendant Atlas Amusement Enterprises, Inc. Attorney Curtis C. Van de veld represents the 10 Defendant and Cross-Plaintiff Darryl R. Styles dfb/a D&D Games. Attorney F. Randall Cunliffe 11 represents the Defendant Guam Music, Inc. Attorney Daniel J. Berman represents the Intervenor 12 and Cross-Plaintiff Pacific Amusement, Inc. Having reviewed the pleadings and legal 13 authorities, and having heard oral arguments in this matter, the Court issues the following 14 Decision and Order. 15 BACKGROUND 16 This case arises from a prolonged dispute between the Attorney General of Guam, the 17 executive branch, and owners of electronic gaming devices, regarding the legality of the 18 licensing and operation of such gaming devices in Guam. Both the procedural history and facts

19 of this case have been thoroughly outlined in the various pleadings, orders, and appeals in the

20 record. Thus, the following facts are only those pertinent to the instant Motion for Summary 21 Judgment. 22 Leonardo M. Rapadas, in his official capacity as the Attorney General of Guam, filed a 23 Complaint for Declaratory Judgment on June 14, 2013, and a First Amended Complaint for 24 Declaratory Judgment on August 15, 2015, seeking declaratory relief against John P. Camacho,

25 the Director of the Department of Revenue and Taxation (“DRT”), and Eddie Baza Calvo, the 26 Governor of Guam, both in their official capacities (“Defendants”). Mr. Rapadas has since been

27 succeeded as the Attorney General by Leevin T. Camacho (“Plaintiff’), Mr. John Camacho has

28 since been succeeded as the Director of the DRT by Dafne M. Shimizu, and Governor Calvo

Page 2 of 12 Decision and Order Civil Case No. CVO78O-13; Carnacho v. Shimizu, et cii.

1 has since been succeeded as the Governor of Guam by Lourdes A. Leon Guerrero. Three private 2 parties, Atlas Amusement Enterprises, Inc. (“Atlas”), Darryl R. Styles dlb/a D&D Games 3 (“Styles”), and Guam Music, Inc. (“Guam Music”), were also named as defendants. A fourth 4 private party, Pacific Amusement, Inc. (“Pacific Amusement”), intervened on the grounds that 5 an adverse decision by this Court would deny it from obtaining licenses in the future. 6 On October 17, 2001, Public Law No. 26-52 (“P.L. 26-52”), entitled “An Act to Repeal 7 and Reenact § 64.40 of Title 9, and § 39110 of Title 22, All of the Guam Code Annotated, 8 Relative to Illegal Cockfight” was enacted. P.L. 26-52 granted certain rulemaking authorities to 9 the Department of Revenue and Taxation (“DRT”), providing in part: 10 . . Section 4. Promulgation of Rules. Notwithstanding any other provisions of law, .

the Cockpit License Board, together with the Department of Revenue and Taxation, is hereby authorized to promulgate necessary rules and regulations to 12 create a comprehensive regulatory scheme to regulate all gaming activities on Guam; provided, that the rules and regulations shall restrict gaming activities to 13 those authorized and licensed on Guam as of August 1, 2001. 14 See Guam Pub. L. 26-52:4 (Oct. 17, 2001). 15 Pursuant to P.L. 26-52, DRT submitted its proposed gaming rules and regulations with 16 the Legislative Secretary of the Guam Legislature on January 3, 2003.1 These proposed 17 regulations authorized limited gaming activities in Guam, including “[e]lectronic gaming 18 devices that have been registered, or were at any time previously registered, by [DRT] pursuant 19 to 11 Guam Code Annotated, Chapter 22, Article 2, prior to August 1st 2001.” 3 GAR § 20 71 l4(a)(5). Pursuant to these regulations, DRT issued and renewed hundreds of licenses to 21 owners of such electronic gaming devices for several years.2 22 On July 9, 2013, Public Law No. 32-060 (“P.L. 32-060”), entitled “An Act to Add New 23 § 5201 to 5205 to Chapter 5 of Title 11, Guam Code Annotated, Relative to Gaming. . .“ was 24

25 DRT’s proposed rules and regulations were subsequently codified in Title 3 Chapter 7 of the Guam 26 Administrative Rules and Regulations (“GAR”). S 3 GAR § 7101 et seq. However, these rules and regulations were not posted on the Guam Compiler of Laws website until 2012. 27 2 Since the issuing of such gaming licenses, several years of litigation ensued, including multiple appeals to the 28 Supreme Court of Guam and remands to the trial court. See Limtiaco v. Camacho, 2009 Guam 7 (appeal from Superior Court Case No. SPO141-08); see also Rapadas v. Benito, 2011 Guam 28.

Page 3 of 12 Decision and Order Civil Case No. CV0780-13; Camacho v. Shimizu, et al.

i enacted. P.L. 32-060 enacted Title 11 GCA § 5205 which authorized the following limited 2 gaming activities: 1) non-profit bingo or lottery, 2) licensed cockfighting, 3) carnival or 3 Liberation Day gaming, and 4) all other limited gaming activities as authorized pursuant statute. 4 11 GCA § 5205(a). Section 1 of P.L. 32-060, Legislative Findings and Intent, also referenced 5 P.L. 26-32:4 and DRT’s gaming regulations, stating that it was the legislature’s intent “to place 6 in statute the policy of regulating gaming activities allowed by law [and] collecting fees and 7 taxes that would be due from duly licensed operators.” P.L. 32-060:1. 8 On August 15, 2013, the Plaintiff filed a First Amended Complaint for Declaratory 9 Judgment, seeking a judgment declaring, inter atia, that: 1) DRT’s gaming regulations in 3 10 GAR § 71 14(a)(5) are void and lack any force and effect; 2) P.L. 32-060 did not make DRT’s 11 regulations valid; and 3) Guam law continued to prohibit the licensing of electronic gaming 12 devices. Thus, the Plaintiff seeks a declaratory judgment that the electronic gaming licenses 13 issued pursuant to DRT’s regulations are void and therefore, must be revoked and no new 14 licenses should be issued. 15 On April 11, 2016, Defendant Styles filed a Motion for Summary Judgment asserting 16 that P.L. 32-060 violates equal protection and due process rights. Intervenor Pacific Amusement 17 joined in Defendant Styles’ motion on April 15, 2016. On May 9, 2016, the Plaintiff filed an 18 Opposition. Thereafter, the Court heard oral arguments on Defendant Styles’ Motion for

19 Summary Judgment on [date]. 20 On December 19, 2016, the Plaintiff filed their competing Motion for Summary 21 Judgment on the grounds that there is no genuine dispute as to any material fact and that 22 Plaintiff is entitled to declaratory judgment as a matter of law. The Defendants filed four 23 opposition memoranda and accompanying joinders3. The Plaintiff submitted a Reply on 24

25 Defendant Styles filed an Opposition to the Plaintiffs Motion for Summary Judgment on January 24, 2017, and joined in all opposition memoranda tiled by all other Defendants. Guam Music also filed an Opposition to the 26 Plaintiff’s Motion for Summary Judgment on January 24. 2017 and joined in opposition memoranda filed by the public Defendants and Atlas. Atlas filed an Opposition to the Plaintiffs Motion for Summary Judgment on January 27 17, 2017, joined in Guam Music’s Opposition, and partially joined in Defendant Styles’ Opposition. finally, the Governor of Guam and DRT Director filed their Opposition to Plaintiffs Motion for Summary Judgment and 28 Cross-Motion for Summary Judgment on January 17, 2017. and joined in both Guam Music and Defendant Styles’ respective oppositions.

Page 4 of 12 Decision and Order Civil Case No. CVO7$0-13; Camacho v. Shimizu, et at. e 1 February 14, 2017. The Court heard oral arguments from all parties on December 5, 2019. At 2 the conclusion of the hearing, the Court took the matter under advisement. 3 DISCUSSION 4 Summary judgment is proper “if the pleadings, depositions, answers to interrogatories, 5 and admissions on file, together with the affidavits, if any, show that there is no genuine issue as 6 to any material fact and that the moving party is entitled to judgment as a matter of law.” Guam 7 R. Civ. P. 56(c); see also Celotex Corp. v. Catrett, 477 U.S. 317 (1986). Rule 56(c) of the 8 GRCP further mandates summary judgment against a party, “who fails to make a showing 9 sufficient to establish the existence of an element essential to that party’s case, on which that 10 party will bear the burden of proof at trial.” Celotex, 477 U.S. at 322. A genuine issue of ii material fact exists if there is sufficient evidence which establishes a factual dispute requiring 12 resolution by a fact-finder. Guam Pac. Enter., Inc. v. Guam Poresia Corp. et al., 2007 Guam 22. 13 n. 8 (citing lizuka Corp. v. Kawasho Int’l (Guam). Inc., 1997 Guam 10 ¶ 7). The factual dispute 14 must also concern a fact “that is relevant to an element of a claim or defense and whose 15 existence might affect the outcome of the suit.” Id. 16 If the movant demonstrates a lack of a genuine issue of material fact, “the non-movant 17 cannot merely rely on allegations contained in the complaint, but must produce at least some is significant probative evidence tending to support the complaint.” Edwards v. Pacific Fin. Corp. 19 et al., 2000 Guam 27 n. 7 (citations omitted). Thus, the ultimate inquiry for the Court is 20 “whether the ‘specific fact’ set forth by the nonmoving party, coupled with undisputed 21 background or contextual facts, are such that a rational or reasonable jury might return a verdict 22 in its favor based on that evidence.” Bank of Guam v. flores, 2004 Guam 25 n. 7. In 23 determining a motion for summary judgment, “the court must draw inferences and view the 24 evidence in a light most favorable to the non-moving party. 25 The Plaintiff directs its Motion for Summary Judgment at all the causes of action set 26 forth in the first Amended Complaint for Declaratory Judgment. In their Motion, the Plaintiff

27 requests that the Court grant summary judgment in its favor on the grounds that DRT’s gaming 28 regulations are invalid because: 1) they were submitted to the Guam legislature without

Page 5 of 12 Decision and Order . Civil Case No. CVO78O-13; Camacho V. Shirnizu, et at.

1 complying with Guam law, and 2) they exceeded the authority of DRT to enact such rules and 2 regulations. Thus, the Plaintiff seeks relief declaring that DRT’s regulations purporting to 3 regulate electronic gaming devices in Guam are void and that all electronic gaming devices 4 licenses issued by DRT are to be revoked and no new licenses are to be issued. On the other 5 hand, the Defendants argue that the Plaintiff’s arguments are either meritless as a matter of law 6 or that they depend upon issues over which there is a genuine dispute of material facts. 7 I. DRT did not comply with the AAL’s Rule-Making Procedure. 8 Guam’s Administrative Adjudication Law (“AAL”) provides the procedures government 9 agencies must follow when drafting and submitting proposed rules and regulations. $ 5 GCA 10 § 9300 et seq. These rule-making procedures were enacted by the Guam Legislature to establish ii “a uniform method of making, adopting, promulgating, filing and publishing rules by all 12 agencies of this Territory, to permit public participation therein and provide a method of making 13 rules readily accessible to the public.” 5 GCA § 9300. 14 First, before any rule is adopted, amended, rescinded or repealed, an agency must 15 provide notice by publishing such notice in a newspaper of general circulation in Guam, at least 16 ten (10) days prior to the date set for public hearing. See 5 GCA § 9301(a) (“Said notice shall 17 include a statement of the time and place of said hearing, a reference to the subject matter of the 18 proposed rule or rules, and refer to the fact that a copy of said proposed rule or rules is on file at 19 the office of said agency, where it may be examined.”). Second, the AAL requires a public 20 hearing wherein any interested party may participate in the formulation of the proposed rules 21 through the presentation of facts or argument or the submission of written date or views. 5 GCA 22 § 9301(b). Further, prior to the public hearing, the agency must include, as part of the 23 promulgation of such rules or regulations, an economic impact statement. 5 GCA § 9301(d); see 24 also 5 GCA § 930 1(e) (“No proposed rule or regulation shall be transmitted to [the Legislature] 25 without an economic impact statement. . .“). finally, only when an agency has complied with 26 all mandatory requirements, may the agency then submit the proposed rules to the Legislature, 27 the Governor of Guam, and the Attorney General, for approval. 5 GCA § 9303(a)(2), (3), and 28 (4).

Page 6 of 12 Decision and Order Civil Case No. CV0780-13; Camacho v. Shiinizu, et at. . 1 Here, DRT’s gaming regulations are invalid because DRT failed to comply with the 2 AAL. First, DRT failed to provide notice and conduct public hearings. Both DRT and the 3 Legislature are unable to locate any record or evidence confirming that notice was published or 4 that a public hearing was held by the agency. Second, DRT failed to conduct and submit an 5 economic impact study. Again, neither DRT or the Legislature can confirm that an economic 6 impact study was conducted or submitted by DRT. Consequently, a substantial failure by DRT 7 to follow the rule-making procedures mandated by the AAL renders such rules invalid. See 5 8 GCA § 9303(c) (“No rule shall be effective ttntit after compliance with the provisions of this 9 Section and ninety (90) calendar days have elapsed from the date of filing with the [Legislative 10 Secretary].”) (emphasis added); see e.g., Faircloth v. Family Indep. Agency, 232 Mich. App. ii 391 (failure to follow administrative procedures renders nile or regulation invalid). 12 Defendant Atlas, on the other hand, argues that the mere possibility such records could 13 have existed, but may have been lost, is sufficient to defeat summary judgment. Defendant 14 Atlas asserts that the inability of DRT and the Legislature to locate any records supporting its 15 position that the rules were properly promulgated pursuant to the AAL, is merely evidence that 16 those records might have never existed but, it is not proof sufficient to overcome the 17 presumption of correctness. $ Wade v. Taitano, 2002 Guam 16 ¶ $ (the presumption of 18 correctness applies to agency actions if a regulation is challenged on the basis that it is in 19 contravention of the unambiguous expressed intent of the legislature). Here, both DRT and the 20 Legislature’s inability to locate and proffer such records is highly persuasive evidence that the 21 AAL procedures were not adhered to. See 5 GCA § 9303(d) (mandating the Legislative 22 Secretary to keep and maintain a complete record of all proposed rules and regulations). The 23 failure of DRT, the agency responsible for maintaining tax and licensing records, as well as the 24 Legislature, to possess such records is compelling evidence that these records never existed. 25 As aforementioned, in order to succeed on a motion for summary judgment, the moving 26 party must demonstrate that there is no genuine issue as to any material fact. Celotex Corp., 477 27 U.S. 317, 323 (1986). Atlas, the opposing party, must set forth specific facts showing there is a 28 genuine dispute of facts and cannot rest upon mere statements and allegations set forth in the

Page 7 of 12 Decision and Order Civil Case No. CV0780-13; Carnacho v. Shimiu, et at. . i pleadings. Bank of Guam v. flores, 2004 Guam 25 n. 7. Here, none of the Defendants have 2 produced any affirmative evidence to rebut the Plaintiff’s evidence that DRT failed to comply 3 with the AAL. Thus, absent any record supporting the Defendants’ position that the rules were 4 properly promulgated pursuant to AAL, the Court finds that DRT did not comply with AAL. 5 Accordingly, a substantial failure by DRT to follow the nile-making procedures mandated by 6 the AAL renders such rules invalid. 7 II. P.L. 26-52:4 did not exempt DRT from complying with the AAL. 8 The Defendants, particularly the Government of Guam Defendants, argue that P.L. 26- 9 52 enabled DRT to promulgate gaming regulations without complying with any other 10 conflicting provision of Guam law, including the AAL. The Defendants rely on the ii “Notwithstanding any other provision of law” language within Section 1 of P.L. 26-52 to 12 support their argument that the Legislature granted it unconditional rule making authority to 13 create “a comprehensive regulatory scheme to regulate alt gaming activities on Guam. . .“). P.L. 14 26-52:4 (emphasis added); see also Background, supra. Specifically, the Defendants argue that 15 as a matter of law, the word “notwithstanding” means that the particular statute supersedes all 16 other laws that may be in conflict with it. The Court disagrees. 17 The Supreme Court of Guam has held, “[tjhat in cases involving statutory construction, 18 the plain language of a statute must be the starting point.” Pangelinan v. Gutierrez, 2000 Guam 19 11 ¶ 23. In determining the plain meaning of a statutory provision, courts will look to the entire

20 statutory scheme containing the provision for guidance. Amerault v. Intelcom Support Servs., 21 Inc., 2004 Guam 23 ¶ 16; see also Sumitomo Constr. Co. v. Gov’t of Guam, 2001 Guam 23 ¶ 17 22 (“In determining legislative intent, a statute should be read as a whole and in conjunction with 23 other sections.”). Thus, the Court’s analysis will be guided with these principles in mind.

24 As a preliminary matter, administrative agencies are creatures of statute and therefore, 25 cannot act beyond its delegated authority. See Wade v. Taitano, 2002 Guam 16 ¶ 7 (“[Am 26 agency cannot create rules, through its own interstitial declaration, that were not contemplated

27 or authorized by the Legislature . . .“) (citations omitted); see also Carlson v. Guam Tel. Auth., 28 2002 Guam 15 ¶ 9 (holding that administrative agencies must buttress the exercise of authority

Page 8 of 12 Decision and Order Civil Case No. CV0780-13; Camacho v. Shimicu, et cii. . 1 with statutory support and their powers are limited to those which “have been conferred upon 2 them by law expressly or by implication.”) (citations omitted). Simply put, an administrative 3 agency cannot create rules or regulations that would be contrary to the intended legislative 4 scheme. Id. Here, there is nothing in the legislative history to support the Defendants’ argument 5 that the Legislature intended to exempt DRT from compliance with the rule-making procedures 6 of the AAL. The Court agrees with the Plaintiff that P.L. 26-52 should be construed together 7 with the AAL, such that DRT has the authority to draft a comprehensive regulatory scheme $ regarding gaming, but must subject that scheme to the administrative rule-making process. 9 Construing the statues together is consistent with the intent of the Legislature as expressed in 10 Title 5 GCA § 9300. See Section I, stipra. 11 Moreover, a statute granting legislative power to an administrative agency will be 12 deemed invalid if the legislature fails to set out intelligible principles to guide an agency’s 13 exercise of such authority. Gundy v. United States, 139 S. Ct. 2116, 2129 (2019) (holding 14 that a delegation of legislative authority is constitutional so long as the legislative body 15 prescribes an intelligible principle to guide the agency). In other words, a delegation of 16 legislative power is permissible if the legislature makes clear the intended legislative objective 17 and the boundaries of the agency’s rule-making authority. RI.; see also Carson Mobilehome 18 Park Owners’ Assn. v. City of Carson, 35 Cal. 3d 184, 190 (1983) (“An unconstitutional 19 delegation of authority occurs only when a legislative body (1) leaves the resolution of

20 fundamental policy issues to others or (2) fails to provide adequate direction for the 21 implementation of that policy.”).

22 Here, to accept the Defendants’ argument that P.L. 26-52 authorized DRT to violate or 23 ignore any applicable laws or procedures relevant to gaming and the promulgation of gaming 24 regulations in Guam, would be an improper delegation of legislative responsibilities to a

25 government agency. first, the power to enact, amend, and repeal legislation vests in the 26 legislature, not the administrative agency. See In re Reciuest of Calvo, 2017 Guam 14 ¶ 44

27 (citing Atlas v. Bd. Of Auditors, 275 N.W. 507, 509 (1937). The Legislature cannot simply

28 delegate its authority and allow DRT to ignore any applicable laws that are inconsistent with the

Page 9 of 12 Decision and Order Civil Case No. CV0780-13: Camacho v. Shimizu, et al. . i gaming regulations proposed by DRT. The Legislature may however, after declaring a policy 2 and fixing a primary standard, confer upon administrative officers the “power to fill up the 3 details” by prescribing administrative rules and regulations to promote the purpose of the 4 legislation and to carry it into effect. Kugler v. Yocum, 69 Cal.2d 371, 376 (1968) (citing First 5 Industrial Loan Co. v. Daugherty, 26 Cal. 2d 545, 549 (1945). Thus, having considered the 6 relevant provisions and the legislative scheme, the Court finds that P.L. 26-52 granted DRT the 7 narrow authority to create a comprehensive regulatory scheme to regulate all gaming activities 8 in Guam “notwithstanding any other provision of law” that may prohibit it from developing 9 such a scheme. P.L. 26-52 did not grant DRT the authority to evade the rule-making procedures 10 of the AAL. Accordingly, as determined above, a substantial failure by DRT to follow the rule 11 making procedures mandated by the AAL renders such rules invalid. 12 III. P.L. 32-060 did not validate DRT’s proposed gaming regulations. 13 On July 9, 2013, P.L. 32-060, entitled “An Act to Add New § 5201 to 5205 to Chapter 14 5 of Title 11, Guam Code Annotated, Relative to Gaming . . .“ was enacted. P.L. 32-060 15 enacted Title 11 GCA § 5205 which authorized the following limited gaming activities: 1) non- 16 profit bingo or lottery, 2) licensed cockfighting, 3) carnival or Liberation Day gaming, and 4) all 17 other limited gaming activities as authorized pursuant statute. 11 GCA § 5205(a) (emphasis 18 added). Section 1 of P.L. 32-060, Legislative Findings and Intent, also referenced P.L. 26-52:4 19 and DRT’s gaming regulations, stating that it was the legislature’s intent “to place in statute the 20 policy of regulating gaming activities allowed by law [and] collecting fees and taxes that would 21 be due from duly licensed operators.” P.L. 32-060:1 (emphasis added). 22 Defendant Styles argues that P.L. 32-060 retroactively validated the acts of DRT by 23 recognizing the validity of the rules. This is incorrect. Although P1. 32-060 references P.L. 26- 24 52, and notes that DRT filed its proposed gaming regulations on January 3, 2003, it does not 25 explicitly state that such regulations were actually approved by the Legislature.4 Instead, P.L. 26

‘ 27 The Original Bill 19-32 (COR) stated that DRT’s gaming regulations had been approved by the Legislature. However, the final version of Bill 19-32 (COR) which became P.L. 32-060 eliminated this sentence entirely. The 28 Legislative Findings and Intent Section of the Original Bill 19-32 (COR) provided in relevant part: “These regulations were subsequently approved, but since the rule-making authority did not allow for the repeal and re

Page 10 ot’ 12 Decision and Order Civil Case No. CVO7$0-13; Camacho v. Shimizu, et at. . 1 32-060, placed the authority back to the Legislature to “place in statute a policy of regulating 2 gaming activities allowed by law.” Id. (emphasis added). The statute implemented by the 3 Legislature pursuant to P.L.32-060 does not authorize the licensing of electronic gaming 4 devices. Id.; 11 GCA § 5205(a). 5 There is no Guam statute that authorizes the licensing of electronic gaming devices as 6 specifically allowed in 3 GAR § 71 14(a)(5). As of August 1, 2001, Guam’s gaming statutes 7 were contained in Title 22 GCA, Chapter 39 and Title 11 GCA, Chapter 5. $ç 22 GCA § 8 39101 et seq.; see also 11 GCA § 5101 et seq. More importantly, Guam law prohibits the 9 licensing of gambling devices in Guam. 11 GCA § 22202. Title 9 GCA § 64.20 defines 10 gambling device as “any coin operated device which, when operated, may return winnings 11 (other than free games not redeemable for cash) of value to the user based partially or 12 completely upon chance, by the operation of which a person may become entitled to receive 13 winnings of value.” See 9 GCA § 64.20(b) and (c) (gambling device includes slot and video 14 poker machines). Thus, when construed together, neither P.L. 32-060 nor P.L. 26-52 authorized is the licensing of electronic gaming devices as specifically allowed in 3 GAR § 71 14(a)(5), nor 16 did it alter Guam’s current gaming laws. Accordingly, the Court finds that P.L. 32-060 did not 17 retroactively validate DRT’s proposed gaming regulations nor did it change Guam’s gambling 18 posture set forth in Title 11 GCA, Chapter 5 or Title 22 GCA, Chapter 29, supra. 19 IV. The Plaintiff’s claims are not time barred. 20 Finally, Defendant Atlas argues that the Plaintiff’s claims are untimely pursuant to the 21 four-year statute of limitations set forth in Title 7 GCA, Chapter 1 l. See 7 GCA § 11312 (“An 22 action for relief not otherwise provided for must be commenced within four (4) years after the 23 cause of action shall have accrued.”). Here, neither Defendant Atlas nor any of the named 24

25 enactment of existing statute, the regulations were placed in Chapter 7 of Title 3, Guam Administrative Rules and 26 Regulations.” (emphasis added).

27 Title 5 GCA § 9303(b) provides that, “{t]he court shall declare the rule invalid if it finds that it violates provisions of law, exceeds the statutory authority of the agency or was adopted without compliance with statutory rulemaking 28 procedures.” This statute contains no limitations period. Thus, Plaintiff’s claims that DRT’s regulations are invalid because DRT failed to comply with the AAL are timely.

Page 11 of 12 Decision and Order Civil Case No. CV0780-13; Carnacho v. Shimizu, et al. . 1 Defendants asserted the statute of limitations as an affirmative defense in their respective 2 Answers. See Guam R. Civ. P. 8(c) (A responsive pleading must contain all affirmative 3 defenses); see also M Electric Corp. v. Phil-Gets (Guam) hit’l Trading Corp., 2016 Guam 35 ¶ 4 91 (“Failure to bring a defense at that time results in waiver and precludes a party from 5 asserting it at a later point.”) (citing Hemlani v. Hemlani, 2015 Guam 16 ¶ 23). This matter has 6 been in litigation since 2013. Since then, the Defendants have actively defended their positions 7 and have participated in all aspects of this litigation. Thus, assuming arguendo, that Title 7 8 GCA § 11312 is applicable to the Plaintiffs claim, the Defendants nevertheless have waived 9 any statute of limitations defense it may have had by failing to raise the affirmative defense in 10 their responsive pleadings. 11 CONCLUSION 12 For the reasons set forth above, the Court finds that DRT’s proposed gaming regulations 13 were submitted to the Guam Legislature without complying with Guam law, and that DRT 14 exceeded its authority to enact such rules and regulations purporting to regulate electronic 15 gaming devices in Guam. Accordingly, the Court hereby GRANTS the Plaintiffs Motion for 16 Summary Judgment and thus, GRANTS the Plaintiffs first Amended Complaint for 17 Declaratory Judgment. is Further, having granted Plaintiffs Motion for Summary Judgment, the Court hereby 19 declares Defendant Styles’ competing Motion for Summary Judgment is MOOT. 20

22 IT IS SO ORDERED MAR 132020 23

oaheretOwP HONORABLE ARTHUR R. BARCINAS Judge, Superior Court of Guam

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