DFS, Guam v. Lotte Duty Free Guam, LLC

Opinion

FILED SUVRIQR ceuaa* GF GUAM l 2020 APR -2 PH IZ 19 2 cL£xx or count 3 Q 4 I

5 IN THE SUPERIOR COURT OF GUAM 6

7 DFS GUAM L.P._ CIVIL CASE no. CV0943 14-01 CIVIL CASE no. CV0094- 15-01 8 plaintiff, (Consolidated)

9 vs. 10 DECISION AND ORDER LOTTE DUTY FREE GUAM, LLC, 11

12 Defendant.

14 INTRODUCTION

15 This matter came before the Honorable Arthur R. Barcinas on December 20, 2019, upon

16 the Defendant's Motion for Reconsideration of the Court's Decision and Order on DFS' Motion

17 Pursuant to the Citizen Participation in Government Act ("Motion for Reconsideration") filed

18 September 6, 2018. Plaintiff DFS Guam L.P. ("DFS") was represented by Attorneys G. Patrick

19 Civille and Daniel Weiss. Defendant Lotte Duty Free Guam, LLC ("Lotte") was represented by

20 Attorneys Cesar C. Cabot, Steven Maddison, and Young-Hee Kim. Having reviewed all briefs

21 and oral arguments in this matter, the Court issues the following Decision and Order.

22 BACKGROUND

23 This matter arises from a procurement dispute between DFS and Lotte. Both Lhe

24 procedural history and facts of this matter have been thoroughly outlined in the various

25 pleadings, orders, and appeals in the record. Thus, the following facts are only those pertinent to

26 the instant Motion for Reconsideration.

27 Lotte's Motion for Reconsideration asks the Court to reconsider its July 30, 2018

28 Decision and Order granting DFS' Motion Pursuant to the Citizen Participation in Government Decision and Order Civil Case Nos.: CV0943-i4-0l and CV0094-15-01, DFS Guam LP. vs. Lorre Duty Free Guam LLC

1 Act ("CPGA") to Disntiss Lotte's Counterclaims ("DFS' CPGA Motiorl"), on the bases that the

2 Court failed to consider material facts in the record, and that new material facts have emerged

3 since the Court's decision. The Court's decision determined that Lotte violated the CPGA by

4 bringing its three counterclaims against DFS for engaging in conduct protected by the CPGA'.

5 Thus, the Court granted DFS' CPGA Motion, Request for Attorneys' Fees, and Request for

6 Sanctions, thereby disMissing all three of Lotte's counterclaims with prejudice.

7 Specifically, Lone argues that the Court failed to consider the CPGA Supplement in the

8 record. On March 23, 2017, Lotte filed a Motion to Supplement the Record regarding its

9 Opposition to DFS' CPGA Motion with an accompanying Declaration of Counsel ("CPGA

10 Supplement") requesting that the Court consider declarations submitted by the A.B, Won Pat

1 I International Airport Authority ("GIAA") in the Procurement Action; See DFS v. GIAA, Civil

12 Case No. CV0943-14 (consolidated with Civil Case Nos CV0094-15 and CV0198-15) (Guam

13 Super. Ct.). In both the Motion to Supplement and the instant Motion for Reconsideration, Lotte

14 argues that the GIAA Declarations submitted in the Procurement Action contain substantial

15 evidence demonstrating that DFS did not engage in legitimate petitioning activity that entitled it

16 to seek refuge under the CPGA. On March 15, 2018, DFS filed an Opposition to Lotte's Motion

17 to Supplement asserting that none of the documents contained in the GIAA Declarations had

IS any bearing on the relevant issues presented in DFS' CPGA Motion. Lotte filed a Reply to

19 DFS' Opposition to Lotte's Motion to Supplement on March 23, 2018.

to

Z1 | On October 24, 2016, Lotte Tiled its Answer and Counterclalm to DFS' complaints. Lotte asserted three ZN counterclaims against DAS: i) malicious prosecution, 2) malicious abuse of process, and 3) Intentional interference with contract. On November 14, 2016, Lotte filed a First Amended Answer to Complaints and Counterclaim 23 asserting the same three counterclaims .

24 2 On September 18, 2015, the Court dismissed the Procurement Law causes of action against Lotte. See DFS Guam, L.P. v. The A.B. Won Pat Int'l Airport, Guam, Civil Case Nu. CV0943-14, Decision and Order (Sept. 18, 25 2015). On June 6, 2016, the Court severed the remaining tort claim from the procurement law claims against GIAA, and created a new ease for DFS' intentional interference with prospective economic advantage claim 26 against Lotte. See DFS Guam, L.P. v The A.B. Won Pat Int'l Airport, Guam: Lotte Duty Free Guam, LLC, et at., Civil Case No. CV0094-15, Decision and Order (June 6, 2016). 27 3 On April 6, 2017, the Court stayed the instant proceeding pending disposition of the Procurement Action. The 28 Court lifted the stay on February 6, 2018.

Page 2 of 8 Decision and Order Civll Case Nos.: CV0943-14-0] and CV0094-15-0l, DFS Guam L.P. vs. Lotte Duty Free Guam, LLC

1 Further, Lone argues that reconsideration is proper because the "Statement of

2 Indictment" tiled in South Korea on July 19, 2018 ("Korea Indictment"), against a former Lotte

3 employee, constitutes a new material fact demonstrating that DFS did not engage in legitimate

4 petitioning activity. Lotte argues that the Korean government's recent indictment of a former

5 Lotte employee alleging that a former employee disclosed Lotte's trade secrets at the behest of

6 DFS, is a newly emerged material fact that further demonstrates that DFS cannot seek refuge

7 under the CPGA. DFS, on the other hand, contends that the Korea Indictment does not contain

8 any new material facts as the indictment neither names DFS as a defendant nor alleges any

9 wrongdoing on the part of DFS. DFS also asserts that none of the allegations against the former

10 Lotte employee have any bearing on whether DFS' actions upon which Lotte's counterclaims

ll are based were a sham or constituted illegitimate petitioning activity. Thus, DFS argues that the

12 Korea Indictment is not a new material fact sufficient to warrant the Court's reconsideration of

13 its July 30, 2018 Decision and Order.

14 The Court heard oral arguments on Lotte's Motion for Reconsideration on December 20,

la 2019 At the conclusion of the hearing, the Court took the matter under advisement.

16 DISCUSSION

17 Courts have the inherent authority to reconsider its own decisions. People of Guam v.

us Gutierrez, 2005 Guam 19 'll 26 (citing Guam Haas. and Urban Renewal Auth. V. Pay. Superior

19 Enter. Corp., 2001 Guam 8 '][ 13 (holding that "[i]nterlocuLory orders are subject to

ZN reconsideration by the court at any time"). Motions for reconsideration of a Court's prior order

21 are governed by Rule 7.l(i) of the Local Rules of the Superior Court of Guam. Civil Rule 7.1(i)

22 provides in relevant part:

23 A motion for reconsideration of a decision on any motion may be made only on 24 the grounds of (1) a material difference in fact or law from that presented to the Court before 25 such decision that in the exercise of reasonable diligence could not have been Known to the party moving for reconsideration at the time of such decision, or, 26 (2) the emergence of new material facts or a change of law occurring after the 27 time of such decision, or, (3) a manifest showing of a failure to consider material facts presented to the 28 Court before such decision.

Page 3 of 8 Decision and Order Civil Case Nos.: CV0943-14-01 and CV0094-I 5-01,DFS Guam LP. vs. Lotte Duty Free Guam L L C

l The Supreme Court of Guam has explained that motions for reconsideration are

2 appropriate where the trial court: "(1) is presented with new evidence, (2) committed clear error

3 or the decision was manifestly unjust, or (3) if there is an intervening change in the controlling

4 law." Petition of Quitugua v. Flores, 2004 Guam 19 'l 38 (citing Ward v. Reyes, 1998 Guam 1 iI

5 10 (reviewing the grant of reconsideration pursuant to GRCP 59(e)), Rang Chang Co., Ltd., Inc.

6 v. M2P, Inc., 2012 Guam l 'JI i8 (holding that the standard of review is identical under both

7 GRCP 59(e) and GRCP 60(b)), Stare v. Fitzsimmons, 668 A.2d 453, 456 (NJ. Super. 1995)

8 (motions for reconsideration are not avenues to re-argue motions already decided, but to allow

9 the unfavorable party to make a statement regarding the matters or controlling decisions which

10 the party believes the court has overlooked or as to which it has erred). Further, "[n]o motion

I1 for reconsideration shall in any manner repeat any oral or written argument made in support of

12 or in opposition to the original motion." CVR 7. l(i).

la 1. The Court did not fail to consider material facts in the record.

14 Lotte asserts that it is entitled to reconsideration of the Court's July 30, 2018 Decision

15 and Order granting DFS' CPGA Motion pursuant ro Local Rule CVR 7.l(i)(3) because the

16 Court failed to consider the declarations and documents attached to Lotte's Motion to

17 Supplement. Lotte however, must make a "manifest showing of a failure [by the Court] to

18 consider material facts." CVR 7.1(i)(3) (emphases added). First, despite Lotte's contention that

19 the Court did not consider GIAA's declarations in its Motion to Supplement, the Court assures

20 the parties that it reviewed and considered all material facts and evidence in the record before

21 rendering its decision on DFS' CPGA Motion. This included GiAA's declarations and the

ZN documents attached to Lotte's Motion to Supplement. Although previously filed in the

23 Procurement Action, the Court nonetheless conducted another review of GIAA's declarations in

24 light of the issues relevant to DFS' CPGA Motion upon the tiling of Lotte's Motion to

25 Supplement. Second, although the Court did not explicitly rule on Lotte's Motion to 26 Supplement, the Court expressly stated in its decision that it reviewed ail briefs and oral

27 arguments. On May 3, 2018, at the hearing on DFS' CPGA Motion, Lotte argued that DFS had 28 engaged in anti-competitive conduct, citing specifically to the declarations contained in Lotte's

Page 4 of 8 Decision and Order Civil Case Nos.: CV0943-14-01 and CV0094-15-01; DFS Guam L.P. vs. Lorre Duty Free Guam, LLC

l Motion to Supplement. In fact, Lotte read in to the record one of the documents contained in

2 GIAA's declarations filed in the Procurement Action. Consequently, at the conclusion of the

3 hearing, not only did the Court go back and review the oral arguments made by the parties -

4 which included arguments made by Lotte regarding those GIAA declarations - the Court also

5 examined all written briefs, including Lotte's Motion to Supplement

6 Moreover, none of the declarations or documents attached to Lotte's Motion to

7 Supplement are necessarily material to the issues specific to DFS' CPGA Motion. In other

8 words, none of GIAA's declarations or the documents attached demonstrate that DFS' actions

<1 upon which Lotte's counterclaims are based - DFS' submission of procurement protests, filing

10 of litigation, DFS' communications with GIAA regarding its procurement protests, and its

I 1 public statements regarding GIAA's and Lotte's misconduct - were a sham or illegitimate

12 petitioning activity. Even if the Court were to consider GIAA's declarations in the context of

IN DFS' CPGA Motion in this Interference Action, none of those documents would tend to prove

14 whether or not DFS' conduct alleged in Lotte's counterclaims was genuinely aimed at procuring

la favorable government action. Guam Greyhound, Inc. v. Brizihl, 2008 Guam 13 'JI 39.

16 Accordingly, the Court finds that Lotte has not made a manue5tshowing that the Court failed to

17 consider the material facts presented to it and therefore, declines to reconsider its decision on

18 this basis.

19 Additionally, Lotte argues that the Court failed to consider facts in Lotte's Verified

20 Counterclaims, which Lotte maintains should have been treated as an affidavit. Specifically,

21 Lotte cites to paragraph 48 of its Counterclaims which it asserts further demonstrates why DFS

22 should not be allowed to seek refuge under the CPGA.* DFS however, argues that the Court was

23 not required to rely on Lotte's statements in its pleadings as Motions to Dismiss pursuant to the

24 CPGA are "treated as one for summary judgment." 'if' GCA § l?l06(a). The Court agrees.

26 4 Paragraph 48 of Lottes Counterclaims states: "Further evidencing DFS' malice and anti-competitive conduct, on information and belief, in mid-2015, DFS threatened to halt a tourist shuttles access to DFS' T-Galleria in Tum of 27 if that shuttle continued displaying advertisements for Lotte." Lotte's Am. Answer & Coutltercl. at 'I 48 (emphasis added). 28

Page 5 ol a Decision and Order Civil Case Nos.: CVU943-14-0] and CV0094-15-0l, DFS Guam L.P. vs. Loire Duly Free Guam LLC

I In its July 30, 2018 Decision and Order, the Court discussed in great detail the summary

2 judgment standard applicable to CPGA motions. Ultimately, the Court found that the CPGA did

3 not conflict with the Guam Rules of Civil Procedure, and held that the Legislature properly

4 exercised it authority to create a defense to a cause of action that would adhere to summary

5 judgment standards, but with a higher level of scrutiny.5 Thus, the rules for summary judgment

6 were applicable to DFS' CPGA Motion. See Guam R. Cid. P. 56.

7 A 1 L ho ug h S e c tio n 1 7 1 0 6 o f the C P G A states "the court shall make its determination

8 based on the facts. contained in pleadings and affidavits filed," Rule 56(e) of the Guam Rules of

9 Civil Procedure also provides in relevant part:

10 When a motion for summary judgment is made and supported ... an adverse I I party may not rest upon the mere allegations or denials of the adverse parris pleadings, but the adverse party's response, by affidavits or otherwise provided in 12 this rule, must set forth specific facts showing that there is a genuine issue for trial. I3

GRCP Rule 56(e) (emphasis added). In other words, if the movant demonstrates a lack of a [4 genuine issue of material fact, "the non-movant cannot merely rely on allegations contained in la the complaint, but must produce at least some significant probative evidence tending to support 16 the complaint." Edwards v. Pacwc Fin. Corp. Er al., 2000 Guam 27 n. T (citations omitted). 17

Here, Lotte cannot simply rely on the statements made in its Counterclaims, including those 18

made on information and belief, to satisfy its burden by clear and convincing evidence, that the 19 activity in question was either illegitimate activity or a sham. Thus, because the Court was not 20 required to rely on those statements made in Lotte's Counterclaims, the Court did not fail to Z1

consider them. Accordingly, the Court finds that Lotte has not made a manifest showing that the 22 Court failed to consider the material facts presented to it and therefore, declines to reconsider its 23 decision on this basis. ZN

26 5 The CPGA instructs the Court to view such motions as a summary judgment motion If the Court finds that a motion is brought over activity protected by the CPGA the burden of proof shifts to the responding party to show 27 clear and convincing evidence (as supposed to a preponderance of the evidence) that the activity in question was either non-immunized activity or a sham. The Court must grant the motion if the responding party cannot meet 28 their burden.

Page 6 ot8 Decision and Order Civil Case Nos.: CV0943-14-01 and CV0094-15-0l; DFS Guam LP. vs. Loire Duty Free Guam, LLC

1 11. The Korea Indictment is not a new material fact.

2 Finally, Lotte argues that reconsideration of the Court's July 30, 2018 Decision and

3 Order granting DFS' CPGA Motion pursuant to L/ocal Rule CVR 77l(i)(2) is warranted because

4 a new material fact has since emerged Specifically, Lotte assets that the Korea Indictment filed

5 against a former Lotte employee, constitutes a new material fact demonstrating that DFS did not

6 engage in legitimate petitioning activity. The Court disagrees. A review of the Korea Indictment

7 reveals that DFS is neither named as a defendant nor specifically alleged to have engaged in any

8 wrongdoing. Although the Korea Indictment alleges that the former Lotte employee gave DFS

9 certain information regarding Lotte's GIAA proposal, it does not specifically implicate DFS as

10 Lotte suggests. Furthermore, the indictment, in and of itself, does not constitute a new material

fact. See Hemfani v. Hemlani, 2015 Guam 16 *][ 12 ("A 'material' fact is one that is relevant to

12 an element of a claim or defense and whose existence might affect the outcome of the suit.").

la The Korea Indictment and the allegations contained therein are not necessarily material to the

14 issues specific to DFS' CPGA Motion. In other words, like the GIAA declarations attached to

15 Lotte's Motion to Supplement, the indictment does not demonstrate, by clear and convincing

16 evidence, that DFS' actions upon which Lotte's counterclaims are based DFS' submission of

17 procurement protests, filing of litigation, DFS' communications with GIAA regarding its

IS procurement protests, and its public statements regarding GIAA's and Lottes misconduct

19 were a sham or illegitimate petitioning activity. Thus, the Korean Indictment does not constitute

20 a new material fact warranting reconsideration of the Court's July 30, 2018 Decision and Order.

21 Accordingly, the Court declines to reconsider its decision on this basis.

22 III. Remedies Available to DFS.

23 The Guam Legislature contemplated the imposition of sanctions on violators of the

24 CPGA. The relevant section, Title 7 GCA § 17106(g), states:

25 [T]he court shall award a moving parry who is dismissed, without regards to any 26 limit under Guam law : (1) costs of litigation, including reasonable attorney and expert witness fees, 27 incurred in connection with the motion, and 28

Page '7 0l8 Decision and Order Civil Case Nos.: CV0943-14-0! and CV0094-15-01, DFS Guam L.P. vs. Lone Duty Free Guam, LLC

(2) such additional sanctions upon the responding party, its attorneys or law firms 1 as it determines will be sufficient to deter repetition of such conduct and 2 comparable conduct by others similarly situated.

3 7 GCA § l7l06(g). The "[u]se of the word 'shall' within the statute makes clear that both the $1

4 imposition of sanctions and the award of attorney's fees is mandatory, rather than permissive.

5 Enriquez v. Smith, 2015 Guam 29 'll 26.

5 Here, DFS requests the Court to award its attorneys' fees in connection with opposing

7 Lo tte's Mo tio n f o r Reco n s id er atio n . Th e Co u r t, h av in g f o u n d th at all th r ee o f Lo tte's

S counterclaims violate the CPGA, and having denied Lotte's Motion for Reconsideration of the

9 Co L1rt's Ju ly 30, 2018 gran tin g DFS' CPGA Mo tio n , mu st award DFS its atto rn eys' fees.

10 Accordingly, the Court AWARDS DFS th e atto r n eys' f ees in cu r r ed in co n n ectio n w ith

opposing Lotte's Motion for Reconsideration.

12 CONCLUSION

I3 For the reasons set forth above, the Court D EN IES Lottels Motion for Reconsideration

14 of the CourTs Decision and Order granting DFS' Motion Pursuant to the Citizen Participation in

15 Government Act

17 IT is SO ORDERED yr; 02 2020 18

21 \

ZN /6 23 HONORABLE ARTHUR R. BARCINAS Judge, Superior Court of Guam 24

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