SUP1OR COURT GUAM 2
CL.RK Or C URT 4 IN THE SUPERIOR COURT OF GUAM BY
DEPARTMENT OF REVENUE AND Civil Case No. CV112J-19 6 TAXATION, GOVERNMENT OF GUAM,
7 Plaintiff, v. 8 TEN (10) BOTTLES OF 2015 CHATEAU STE MICHELLE INDIAN WELLS CABERNET DECISION AND ORDER 10 SAUVIGNON COLUMBIA VALLEY, TWO (2) DENYING REAL PARTY IN BOTTLES OF PEWSEY VALE EDEN INTEREST’S MOTION TO DISMISS VALLEY DRY RIESLING VINTAGE 2017, 12 ONE (1) BOTTLE OF THOMAS GOSS 2014 MCLAREN VALE CABERNET SAUVIGNON, 13 ONE (1) BOTTLE OF OONAWARRA CABERNET SAUVIGNON PHOENIX 14 PENLEY ESTATE; ONE (1) BOTTLE OF FRANCISCAN ESTATE NAPA VALLEY 15 MAGNIFICATE 2014; ONE (1) BOTTLE OF 16 TYRELL’S WINE HUNTER VALLEY BROKEN BACK SHIRAZ 2009, ONE (1) 17 BOTTLE OF GARZON CABERNET FRANC RESERVE 2015, ONE (1) BOTTLE OF 18 CHATEAU DE CHAMBRUN LALANDE DE 19 POMEROL 2012, ONE (1) BOTTLE OF DUCKHORN VINEYARD NAPA VALLEY 20 CHARDONAY MERLOT, ONE (1) BOTTLE Of DUCKHORN VINEYARDS 2015 STOUT 21 VINEYARD MERLOT, TWO (2) BOTTLES 2 Of SALVESTRIN 2016 RETAGGIO, TWO (2) BOTTLES OF VESSE FELIX MARGARET 23 RIVER CABERNET SAUVIGNON, TWO (2) BOTTLES OF TWO RANGE NAPA VALLEY 24 RED WINE, TWO (2) BOTTLES OF PENFOLDS BIN 28 KALIMA SHIRAZ, and 25 TWO (2) BOTTLES OF SALVESTRIN 2017 26 SAUVIGNON BLANC,
27 Defendants. 28
Decision and Order Denying Real Party in Interest’s Motion to Dismiss CVI 121-19, DRT v. Ten (10) Bottles of 2015 Cliateit STE Michelle Indian Welts Cabernet et at. Page 1 of 4 1 INTRODUCTION 2 This matter came before the Honorable Alberto C. Lamorena, III upon submission of Real
3 Party in Interest Rodney Webb’s (“RPI’s”) Motion to Dismiss (“Motion”). Deputy Attorney
4 General James L. Canto II represents Plaintiff Department of Revenue and Taxation, Government
5 of Guam (“DRT”), and Attorney James M. Maher represents RPL Having duly considered the
6 parties’ briefs, oral arguments, and the applicable law, the Court now issues the following Decision
7 and Order and DENIES RPI’s Motion.
8 BACKGROUND 9 DRT filed a Petition for Forfeiture of Alcoholic Beverages (“Petition”) on September 17,
10 2019, alleging that RPI illegally important Defendants without possession of a wholesaler’s license.
11 RPI filed his Answer to Petition for Forfeiture of Alcoholic Beverages (“Answer”) on December
12 11,2019.
13 RPI subsequently filed his Motion, arguing the Petition violates the Dormant Commerce
14 Clause of the United States Constitution. Mot. at 2-4 (feb. 19, 2020). DRT opposed, arguing (1) the
15 Commerce Clause does not apply to Guam, (2) RPI lacks prudential standing to claim a violation of
16 the Dormant Coimmerce Clause, and (3) the importation law in question does not violate the
17 Dormant Commerce Clause. Opp’n to Mot. (“Opposition”) at 2-6 (Mar. 10, 2020). RPI did not file
18 a reply.
19 The Court held a hearing on June 19, 2020, at which the parties informed the Court that the
20 parties were discussing settlement. The Court subsequently set a hearing for July 27, 2020 to
21 determine the status of said settlement. Prior to the hearing, the parties indicated they wished to
22 submit their arguments on the briefs. The Court then took the matter under advisement.
23 DISCUSSION 24 The Commerce Clause of the U.S. Constitution vests within Congress the power “[t]o
25 regulate Commerce . . . among the several States.” U.S. Const. art I, § 8, cl. 3. The negative
26 implications of the Commerce Clause, also referred to as the Dormant Commerce Clause, have
27 been interpreted “as an implicit restraint on state authority.” United Haulers Ass ‘n, Inc. v. Oneida-
28 Herkirner Solid Waste Mgmt. Auth., 550 U.S. 330, 338 (2007). RPI asks the Court to find that 11
Decision and Order Denying Real Party in Interest’s Motion to Dismiss CV1 12 1-19, DRTv. Ten (10) Bottles of 2015 Chatett STE Michelle Indian Welts cabernet et at. Page 2 of 4 . 1 G.C.A. § 3605, which outlines the requirement that imported alcoholic beverages be consigned to a
2 licensed wholesaler, violates the Dormant Commerce Clause. The Court declines to do so.
3 The Commerce Clause, and the resulting negative implications, restrains states from
4 regulating interstate commerce. The Ninth Circuit has held that the Commerce Clause does not
5 limit the Government of Guam, given its status as a territory as opposed to a state: “. . . the 6 limitations which the commerce clause places upon the power of state governments to burden
7 commerce do not apply to the Government of Guam because Guam is not a state.” Sakamoto v.
$ Duty Free Shoppers, Ltd., 764 f.2d 1285, 1286 (9th Cir. 1985). The Guam Supreme Court has
9 recognized the same:
10 It is true that federal power to regulate the territories is not constrained by the usual “interstate” limitations applicable in the several states; this is because “[territories 11 are] wholly a creature of the treaty-making power of the President and the legislative autonomy of Congress under Article IV, unrestrained by the Commerce Clause. 12 \
13 Rong Chang Co., Ltd., Inc. v. M2P, Inc., 2012 Guam 1 ¶ 34 (quoting United States v. Libttrd, 291 14 F. Supp. 2d 383, 385-86 (D.V.I. 2003) and citing Sakamoto, 764 F.2d 1285). The precedent makes
15 clear that Guam is not restrained by the Commerce Clause.
16 RPI asks the Court reconsider the Ninth Circuit’s holding in Sakamoto, arguing the Ninth
17 Circuit “failed to consider that Commerce Clause principles were implicit in the Territorial
18 Clause.”1 Mot. at 2. The Court acknowledges that the Third Circuit has held that the Commerce
19 Clause restraints applicable to the states are also applicable to the U.S. Virgin Islands through
20 implication within the Territorial Clause. See JDS Realty Corp. v. Goe ‘t of Virgin Islands, 824 F.2d
21 256 (3d Cir. 1987); Polychrome Intern. Corp. v. Krigger, 5 F.3d 1522 (3d Cir. 1993). The Court,
22 however, sees no reason to divert from Ninth Circuit and Guam precedent, especially in light of the
23 fact that the Commerce Clause, nor its negative implications, have not been extended to Guam via
24 the Organic Act under 48 U.S.C. 142 lb(u). See Sakamoto t’. Duty Free Shoppers, Ltd., 613 F. Supp.
25 381, 393 n.3 (D. Guam 1983) (listing the provisions and amendments of the U.S. Constitution
27 “The Congress shall have Power to dispose of and make all needful Rules and Regulations respecting the Territory or 28 other Property belonging to the United States; and nothing in this Constitution shall be so construed as to Prejudice any Claims of the United States, or of any particular State.” U.S. Cont. art. IV, § 3, ci. 4.
Decision and Order Denying Real Party in Interest’s Motion to Dismiss CV!! 21-19, DRT v. Ten (10) Bottles of 2015 Chateu STE Michelle Indian Wells Cabernet et al. Page 3 of 4 1 which have been extended to Guam and noting that the Commerce Clause is missing from this
2 extension).
3 Therefore, the Commerce Clause does not restrain the Government of Guam in regulating
4 commerce. Section 3605 cannot be found to be violative of the Commerce Clause. In light of this,
5 the Court declines to further comment on whether Section 3605 is impermissibly discriminatory or
6 whether RPI lacks prudential standing to claim a violation of the Commerce Clause as such analysis
7 is unnecessary.
Free access — add to your briefcase to read the full text and ask questions with AI
SUP1OR COURT GUAM 2
CL.RK Or C URT 4 IN THE SUPERIOR COURT OF GUAM BY
DEPARTMENT OF REVENUE AND Civil Case No. CV112J-19 6 TAXATION, GOVERNMENT OF GUAM,
7 Plaintiff, v. 8 TEN (10) BOTTLES OF 2015 CHATEAU STE MICHELLE INDIAN WELLS CABERNET DECISION AND ORDER 10 SAUVIGNON COLUMBIA VALLEY, TWO (2) DENYING REAL PARTY IN BOTTLES OF PEWSEY VALE EDEN INTEREST’S MOTION TO DISMISS VALLEY DRY RIESLING VINTAGE 2017, 12 ONE (1) BOTTLE OF THOMAS GOSS 2014 MCLAREN VALE CABERNET SAUVIGNON, 13 ONE (1) BOTTLE OF OONAWARRA CABERNET SAUVIGNON PHOENIX 14 PENLEY ESTATE; ONE (1) BOTTLE OF FRANCISCAN ESTATE NAPA VALLEY 15 MAGNIFICATE 2014; ONE (1) BOTTLE OF 16 TYRELL’S WINE HUNTER VALLEY BROKEN BACK SHIRAZ 2009, ONE (1) 17 BOTTLE OF GARZON CABERNET FRANC RESERVE 2015, ONE (1) BOTTLE OF 18 CHATEAU DE CHAMBRUN LALANDE DE 19 POMEROL 2012, ONE (1) BOTTLE OF DUCKHORN VINEYARD NAPA VALLEY 20 CHARDONAY MERLOT, ONE (1) BOTTLE Of DUCKHORN VINEYARDS 2015 STOUT 21 VINEYARD MERLOT, TWO (2) BOTTLES 2 Of SALVESTRIN 2016 RETAGGIO, TWO (2) BOTTLES OF VESSE FELIX MARGARET 23 RIVER CABERNET SAUVIGNON, TWO (2) BOTTLES OF TWO RANGE NAPA VALLEY 24 RED WINE, TWO (2) BOTTLES OF PENFOLDS BIN 28 KALIMA SHIRAZ, and 25 TWO (2) BOTTLES OF SALVESTRIN 2017 26 SAUVIGNON BLANC,
27 Defendants. 28
Decision and Order Denying Real Party in Interest’s Motion to Dismiss CVI 121-19, DRT v. Ten (10) Bottles of 2015 Cliateit STE Michelle Indian Welts Cabernet et at. Page 1 of 4 1 INTRODUCTION 2 This matter came before the Honorable Alberto C. Lamorena, III upon submission of Real
3 Party in Interest Rodney Webb’s (“RPI’s”) Motion to Dismiss (“Motion”). Deputy Attorney
4 General James L. Canto II represents Plaintiff Department of Revenue and Taxation, Government
5 of Guam (“DRT”), and Attorney James M. Maher represents RPL Having duly considered the
6 parties’ briefs, oral arguments, and the applicable law, the Court now issues the following Decision
7 and Order and DENIES RPI’s Motion.
8 BACKGROUND 9 DRT filed a Petition for Forfeiture of Alcoholic Beverages (“Petition”) on September 17,
10 2019, alleging that RPI illegally important Defendants without possession of a wholesaler’s license.
11 RPI filed his Answer to Petition for Forfeiture of Alcoholic Beverages (“Answer”) on December
12 11,2019.
13 RPI subsequently filed his Motion, arguing the Petition violates the Dormant Commerce
14 Clause of the United States Constitution. Mot. at 2-4 (feb. 19, 2020). DRT opposed, arguing (1) the
15 Commerce Clause does not apply to Guam, (2) RPI lacks prudential standing to claim a violation of
16 the Dormant Coimmerce Clause, and (3) the importation law in question does not violate the
17 Dormant Commerce Clause. Opp’n to Mot. (“Opposition”) at 2-6 (Mar. 10, 2020). RPI did not file
18 a reply.
19 The Court held a hearing on June 19, 2020, at which the parties informed the Court that the
20 parties were discussing settlement. The Court subsequently set a hearing for July 27, 2020 to
21 determine the status of said settlement. Prior to the hearing, the parties indicated they wished to
22 submit their arguments on the briefs. The Court then took the matter under advisement.
23 DISCUSSION 24 The Commerce Clause of the U.S. Constitution vests within Congress the power “[t]o
25 regulate Commerce . . . among the several States.” U.S. Const. art I, § 8, cl. 3. The negative
26 implications of the Commerce Clause, also referred to as the Dormant Commerce Clause, have
27 been interpreted “as an implicit restraint on state authority.” United Haulers Ass ‘n, Inc. v. Oneida-
28 Herkirner Solid Waste Mgmt. Auth., 550 U.S. 330, 338 (2007). RPI asks the Court to find that 11
Decision and Order Denying Real Party in Interest’s Motion to Dismiss CV1 12 1-19, DRTv. Ten (10) Bottles of 2015 Chatett STE Michelle Indian Welts cabernet et at. Page 2 of 4 . 1 G.C.A. § 3605, which outlines the requirement that imported alcoholic beverages be consigned to a
2 licensed wholesaler, violates the Dormant Commerce Clause. The Court declines to do so.
3 The Commerce Clause, and the resulting negative implications, restrains states from
4 regulating interstate commerce. The Ninth Circuit has held that the Commerce Clause does not
5 limit the Government of Guam, given its status as a territory as opposed to a state: “. . . the 6 limitations which the commerce clause places upon the power of state governments to burden
7 commerce do not apply to the Government of Guam because Guam is not a state.” Sakamoto v.
$ Duty Free Shoppers, Ltd., 764 f.2d 1285, 1286 (9th Cir. 1985). The Guam Supreme Court has
9 recognized the same:
10 It is true that federal power to regulate the territories is not constrained by the usual “interstate” limitations applicable in the several states; this is because “[territories 11 are] wholly a creature of the treaty-making power of the President and the legislative autonomy of Congress under Article IV, unrestrained by the Commerce Clause. 12 \
13 Rong Chang Co., Ltd., Inc. v. M2P, Inc., 2012 Guam 1 ¶ 34 (quoting United States v. Libttrd, 291 14 F. Supp. 2d 383, 385-86 (D.V.I. 2003) and citing Sakamoto, 764 F.2d 1285). The precedent makes
15 clear that Guam is not restrained by the Commerce Clause.
16 RPI asks the Court reconsider the Ninth Circuit’s holding in Sakamoto, arguing the Ninth
17 Circuit “failed to consider that Commerce Clause principles were implicit in the Territorial
18 Clause.”1 Mot. at 2. The Court acknowledges that the Third Circuit has held that the Commerce
19 Clause restraints applicable to the states are also applicable to the U.S. Virgin Islands through
20 implication within the Territorial Clause. See JDS Realty Corp. v. Goe ‘t of Virgin Islands, 824 F.2d
21 256 (3d Cir. 1987); Polychrome Intern. Corp. v. Krigger, 5 F.3d 1522 (3d Cir. 1993). The Court,
22 however, sees no reason to divert from Ninth Circuit and Guam precedent, especially in light of the
23 fact that the Commerce Clause, nor its negative implications, have not been extended to Guam via
24 the Organic Act under 48 U.S.C. 142 lb(u). See Sakamoto t’. Duty Free Shoppers, Ltd., 613 F. Supp.
25 381, 393 n.3 (D. Guam 1983) (listing the provisions and amendments of the U.S. Constitution
27 “The Congress shall have Power to dispose of and make all needful Rules and Regulations respecting the Territory or 28 other Property belonging to the United States; and nothing in this Constitution shall be so construed as to Prejudice any Claims of the United States, or of any particular State.” U.S. Cont. art. IV, § 3, ci. 4.
Decision and Order Denying Real Party in Interest’s Motion to Dismiss CV!! 21-19, DRT v. Ten (10) Bottles of 2015 Chateu STE Michelle Indian Wells Cabernet et al. Page 3 of 4 1 which have been extended to Guam and noting that the Commerce Clause is missing from this
2 extension).
3 Therefore, the Commerce Clause does not restrain the Government of Guam in regulating
4 commerce. Section 3605 cannot be found to be violative of the Commerce Clause. In light of this,
5 the Court declines to further comment on whether Section 3605 is impermissibly discriminatory or
6 whether RPI lacks prudential standing to claim a violation of the Commerce Clause as such analysis
7 is unnecessary.
8 CONCLUSION 9 For the reasons stated above, the Court DENIES RPI’s Motion to Dismiss on the grounds
10 that the Court follows Ninth Circuit and Guam Supreme Court precedent holding that the
11 Commerce Clause does not restrain Guam from regulating commerce. The Court shall hold a pre
12 trial conference on September 21, 2020 at 9:20am.
14 IT IS SO ORDERED this 8th day of September, 2020.
18 HONORABLE ALBERTO C. LAMORENA, III Presiding Judge, Superior Court of Guam 19
Decision and Order Denying Real Party in Interests Motion to Dismiss CVI! 2 1-19. DRT v. Ten (10) Bottles of 2015 Chateau STE Michelle Indian Welts Cabernet et at. Page 4 of 4