Gange v. Gov Guam

Opinion

i' - j .. .... r;~.'i I ;' lJ:, .-Ci o L1 2

5 IN THE SUPERIOR COURT OF GUAM 6

7 MARIA A. GANGE, JESUS CRUZ CHARFAURAOS, ANA A. CHARGUALAF, 8 JESUS G. AGUIGUI, for themselves and on 9 behalf of all others situated,

10 Plaintiffs, CIVIL CASE NO. CV 1461-10 11 v. 12 DECISION AND ORDER GOVERNMENT OF GUAM, GUAM 13 ANCESTRAL LANDS COMMISSION by 14 and through its individual Commissioners (for injunctive relief only to prevent a transfer) and 15 DOES One (1) through Three Hundred (300), inclusive 16

17 Defendant.

20 INTRODUCTION

21 This matter came before the Honorable Arthur R. Barcinas on the 5th day ofNovember, 22 2014, for hearing on four motions: the Plaintiffs' Motion for Class Certification, the Plaintiffs' 23 Motion to Award Attorney's Fees, the Plaintiffs' Motion to Award the Named Plaintiffs a 24 Service Fee of $30,000 Each, and the Defendants' Motion for Clarification. Attorney Curtis C. 25

26 Van de veld represented the Plaintiffs, and Assistant Attorney General Kathy A. Fokas

27 represented the Defendants. For the reasons set forth below, the Plaintiffs' Motion for Class 28 Certification is DENIED, the Plaintiffs' Motion to Award the Named Plaintiffs a Service Fee of

ORIGINAL Decision and Order CV 1461-10; Gange eta!. v. Government ofGuam, eta!.

$30,000 Each is DENIED, the Plaintiffs' Motion to Award Attorney's Fees is GRANTED in

2 part and DENIED in part, and the Court CLARIFIES the status of the case.

3 FACTUAL AND PROCEDURAL HISTORY 4 In 1999, I Liheslaturan Guahan (the Legislature) passed Guam Public Law 25-045, the 5 Guam Ancestral Lands Act, ("the Act"), codified at 21 GCA Chapter 80. The Act established a 6 Commission that would accept and adjudicate claims to lands that had been taken from a 7

8 claimant's ancestors, applying to takings that occurred as long ago as 1930. The purpose was to

9 restore lands taken by the United States federal government in the twentieth century to the 10 descendants of the persons the lands were taken from. The United States Congress had recently 11 transferred some of the ancestral lands in question from the United States armed forces to the 12

13 Government of Guam. The transferred lands included, among others, Lot Naval Radio Station,

14 of about 581 acres, and Lot Andersen South, of about 395 acres. These two lots total 15 approximately 976 acres in total. 16 The Act also recognized that certain lands the federal government took during the 17 twentieth century could not be returned to private ownership, because those lands were still in 18

19 public use, either by the federal government or the Government of Guam. The most notable

20 example of this unreturnable taken land that is in the Government of Guam' control is the land 21 upon which Antonio Won B. Pat International Airport stands. 22 Accordingly, the Act authorized the creation of the Land Bank Trust, in which the 23 Commissioners of the Ancestral Lands Commission would take legal title to certain lands as 24

25 trustees. The Land Bank's assets included former Spanish Crown lands. These were not

26 ancestral lands, but former Spanish government lands that Spain ceded to the United States in 27 the Treaty of Paris of 1898, some of which the federal government had conveyed to the 28

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Government of Guam. The Act also specified that any other non-ancestral lands conveyed by

2 the federal government to the Government of Guam in the future would be placed in the Land

3 Bank Trust. The trust beneficiaries were dispossessed ancestral landowners, and the trust was to 4 be managed so as to pay out income to those dispossessed ancestral landowners. 5 Shortly before and on July 13, 2010, the Legislature passed and Acting Governor Mike 6 Cruz signed Bill No. 278-30, which became Guam Public Law 30-158. This Act required the 7

8 Ancestral Lands Commission to deed Lot Naval Radio Station and Lot Anderson South to the

9 descendants of landowners whose ancestors owned lands that now constitute Antonio Won B. 10 Pat International Airport. This was to the exclusion of dispossessed ancestral landowners whose ll ancestral lands were elsewhere than the airport. 12

l3 A group of the excluded Trust beneficiaries sued to enjoin the Commission from

14 transferring the lands. In the alternative, they pleaded for a payment of just compensation. The 15 Court granted a temporary restraining order on September 8, 2010. 16 After a great deal of further proceedings, on February 15, 2013 the Court heard oral 17 argument on the Plaintiffs Motion for Partial Summary Judgment. The Court granted the 18

19 motion in a Decision and Order of August 16, 2013, concluding that Public Law 30-158

20 constituted an attempted taking of the Plaintiffs' private property, without a legitimate public 21 purpose, and without rendering just compensation. Accordingly, the Court granted the 22 Plaintiffs requested permanent injunction. On August 30, a formal Judgment was issued 23 enjoining the Defendants from transferring Lot Naval Radio Station and Lot Anderson South. 24

25 Ten days later, on September 9, 2013, the Defendants filed a motion titled GRCP Rule

26 59 Motion for the Court to Alter or Amend its August 30, 2013, Judgment. The Plaintiffs filed 27 an Opposition to this motion on October 21, 2013, and the Defendants filed a Reply in support 28

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on November 13, 2013. The Plaintiffs filed a Motion to Correct an Omission in the Rule 54(b)

2 Judgment or Alternatively to Amend the Judgment by Certifying the Class and Awarding

3 Attorney's Fees Therein on October 2, which the Defendants opposed on October 25, and the 4 Plaintiffs replied to the opposition on November 13. Meanwhile, Vicente P. Crawford had 5 appealed the Order of July 29, 2013 denying his motion to intervene. The Supreme Court 6 granted Mr. Crawford's Motion for Dismissal of Appeal, without prejudice, on February 7, 7

8 2014. 9 This Court heard the Defendants' motion to alter or amend on April 4, 2014. Later that 10 day, the Plaintiffs filed a supplemental memorandum in favor of class certification, and the 11 Defendants filed a Motion for Clarification. The Court denied the Motion to Alter or Amend in 12

13 a Decision and Order issued April 16, 2014. The Plaintiffs filed a Motion to Award Attorney's

14 Fees, and a Motion to Award the Named Plaintiffs a Service Fee of $30,000 Each, on April21. 15 The outstanding motions were heard at a hearing on November 5, 2014, whereupon the Court 16 took the motions under advisement. 17 DISCUSSION 18

19 I. Class Certification

20 The Plaintiffs have moved to certify a class. Pls.' Mot., Dec. 9, 2010; see Pls.' Supp. 21 Mem., Apr. 4, 2014. The parties dispute whether Rule 23 requires or enables an analysis of the 22 "need" for class certification to provide for the remedy sought. Contrast Pls.' Supp. Mem. 2-4, 23 Apr. 4, 2014, with Defs.' Consolidated Opp'n 10-15, May 16, 2014. 24

25 Class certification under Rule 23 requires both that all the "[p]rerequisites to a class

26 action," of Rule 23(a)(l)-(4) be met, and also that the facts meet at least one of the specific 27 types of class actions in Rule 23(b)(1 )-(3). See Guam Rule of Civil Procedure 23; see Wal-Mart 28

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Stores, Inc. v. Dukes et al., 131 S.Ct. 2541 (2011) (applying the analogous federal rule). Rule

2 23(b)(2) provides for class actions if: "the party opposing the class has acted or refused to act on

3 grounds generally applicable to the class, thereby making appropriate final injunctive relief or 4 corresponding declaratory relief with respect to the class as a whole ... " Guam Rule of Civil 5 Procedure 23(b)(2). In contrast, claims for individualized relief do not satisfy Rule 23(b)(2), 6 because Rule 23(b)(2) classes are appropriate if a single injunction or declaratory judgment 7

8 would provide relief to each member of the class. Wal-Mart Stores, Inc. v. Dukes et al., 131 9 S.Ct. at 2557. 10 Of the three types of class actions in Rule 23, if any are applicable, it is a b(2) class 11 action. The Plaintiffs sought, as their preferred remedy, injunctive relief enjoining and 12

13 restraining the Commissioners of the Ancestral Land Commission from deeding or transferring

14 Lot Naval Radio Station and Lot Anderson South, and declaratory relief declaring that Public 15 Law 30-158 is unconstitutional and inorganic. Pls.' Compl. 9, Aug. 25, 2010. The Plaintiffs also 16 prayed for just compensation in a condemnation action, but only as an alternative remedy to the 17 requested injunction and declaration. Id. at 9-10. The Defendants vigorously dispute the 18

19 allegation that Public Law 30-158 constitutes a taking, but agree that if it is a taking, then the

20 proper remedy is an injunction rather than payment of just compensation, and argue that it was 21 never the intent of the Legislature to take any private property. Gov't's Position on the Issues 22 the Ct. Ordered Briefed on Nov. 20, 2012 2-3, Feb. 1, 2013. The Court has ruled that the public 23 law is a taking of private property without a legitimate public purpose, and accordingly enjoined ~ 24 ' the transfer of the two lots. Gange et al. v. Government of Guam et al., CV 1461-10, Decision 25

26 and Order 8 (Super. Ct. Guam, Aug. 16, 2013), Judgment (Aug. 30, 2013); see, ~ Hawaii 27 Hous. Auth. v. Midkiff, 467 U.S. 229, 245 (1984) ("the Constitution forbids even a 28

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compensated taking when executed for no reason other than to confer a private benefit on a

2 particular private party."). ,., 3 The other two types of class actions, (b)(1) and (b)(3) class actions, are not applicable to 4 the facts of the case. This is not a Rule 23(b)(1) case, because multiple adjudications would 5 neither establish incompatible standards of conduct for the Commissioners, nor would multiple 6 suits dispose of the interests of the other members. See Guam Rule of Civil Procedure 23(b)(1 ). 7

8 Had there been multiple inconsistent and varying adjudications, with multiple sets of plaintiffs

9 suing to enjoin the transfer of the lots, and if one action was successful and the other 10 unsuccessful, the Commissioners could comply with the action in which the plaintiffs were 11 victorious without falling afoul of any court order in the other action. Nor would one 12

13 adjudication dispose of the rights of other plaintiffs, who would not be bound by litigation they

14 were not party to. See Guam Rule of Civil Procedure 23(b)(l); see Zahnen v. Limtiaco, 2008 15 Guam 5 ~ 10 (requiring an identity of parties or privies in a prior suit and the current suit for a 16 claim to be precluded by previous litigation). Individualized money damages, or any sort of 17 money damages, are not at issue, making application of Rule 23(b)(3) inappropriate. See Dukes, 18

19 131 S.Ct. at 2558 (concluding that the increased procedural protections and right to opt out

20 provided to putative class members by Rule 23(b)(3) are required because (b)(3) classes are 21 those which deal with money damages claims where the class members may prefer to 22 individually control a separate action, and not actions for injunctive or declaratory remedies 23 where individual actions would be unworkable or superfluous). 24

25 The dispute between the parties over class certification is, in essence, over whether it is

26 proper for a court to review the necessity of certifying a Rule 23(b )(2) class if the Plaintiff's 27 victory would secure the rights of the absent class members. See Pls.' Supp. Mem. 2, Apr. 4, 28

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2014 ("There is currently a division between the Circuits as to whether a 'necessity' review is

2 required when ruling on a motion to certify a class."); see Defs.' Consolidated Opp'n 10-11,

3 May 16, 2014 ("The clear majority rule is that 'need' is a proper consideration ... and that class 4 certification may be properly denied where a class is unnecessary to obtain the full measure of 5 relief sought..."). The Plaintiffs rely on Ollier v. Sweetwater Union High School Dist., 251 6 F.R.D. 564 (S.D. Cal. 2008), for two propositions: first, that the Ninth Circuit does not 7

8 recognize a "need" requirement for an injunction in determining class certification, and second,

9 that even if a necessity analysis is required, dangers of mootness, settlement, and potential 10 running of a statute of limitations provides for need for class certification. Pls.' Supp. Mem. 3, 11 Apr. 4, 2014. 12

13 In contrast, the Defendants point to M.R. v. Board of School Com'rs of Mobile County,

14 286 F.R.D. 510 (S.D. Ala. 2012). Defs.' Consolidated Opp'n 11-13, May 16, 2014. In Mobile 15 County, the court engaged in a thorough review of federal case law on the need for a class-wide 16 injunction before certifying a class, concluding that the weight of authority favored considering 17 need. See Mobile County, 286 F.R.D. at 518 n.ll (quoting, among other cases, Kansas Health 18

19 Care Ass'n v. Kansas Dep't of Social and Rehabilitation Serv., 31 F.3d 1536, 1548 (lOth Cir.

20 1994) (" ... a class certification is unnecessary if all the class members will benefit from an 21 injunction issued on behalf of the named plaintiffs ... "), and Dionne v. Bouley, 757 F.2d 1344, 22 1356 (1st Cir. 1985) ("when the same relief can be obtained without certifying a class, a court 23 may be justified in concluding that class relief is not appropriate.")); see also 7A Charles Alan 24

25 Wright et al., Federal Practice and Procedure § 1785.2 (3d ed.) ("the need requirement now

26 seems well-accepted as an appropriate consideration when certifying a Rule 23(b)(2) action."). 27 The Defendants also argue that the exceptions of Ollier v. Sweetwater Union High School Dist. 28

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are not applicable, considering the current procedural posture of the case. Defs.' Consolidated

2 Opp'n 14-15, May 16, 2014.

3 The Court is persuaded by the Defendants' argument. The remedy sought by the 4 Plaintiffs and imposed by the Court is an injunction: "The Government of Guam and the Guam 5 Ancestral Lands Commission and the individual Commissioners thereof are ENJOINED from 6 transferring Lot Naval Radio Station and Lot Andersen South, Public Law 30-158 7

8 notwithstanding." Gange et al. v. Government of Guam et al., CV 1461-10, Judgment (Aug. 30,

9 2013). By preventing transfer of the lands, the injunction does not apply only to the specific 10 named plaintiffs' interests in future Land Bank Trust income, but benefits and applies to the 11 interests of all the absent trust beneficiaries. The injunction is the exact same remedy as would 12

13 have been granted to a class, and by not certifying the class additional unnecessary expense and

14 delay is avoided. Also, considering the current procedural posture, where the Court withheld 15 consideration of certification until after the merits decision was made, and that determination is 16 in place and can only be disturbed by appellate reversal, there is no need for the absent 17 beneficiaries to litigate themselves, either as part of a class or separately. Concerns that their 18

19 latent causes of action may become mooted or barred by the statute of limitations are

20 inapplicable, because the substantive relief any further litigation could provide them has been 21 provided already. 22 The Court regards Guam Rule of Civil Procedure 23(b)(l) and 23(b)(3) as inapplicable 23 to the present dispute, such that any class certification would be a Rule 23(b)(2) class. Because 24

25 it is unnecessary to certify a 23(b )(2) class to provide the absent putative class members with

26 relief, the Plaintiffs' Motion to Certify Class is DENIED. 27 II. Service Fee 28

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The Plaintiffs also move to award a $30,000 service fee to each of the four named

2 plaintiffs, or to their heirs or beneficiaries, relying on VanVranken v. Atlantic Richfield Co.,

3 901 F.Supp. 294, 299 (N.D. Cal. 1995). Pl.'s Mot. 2-4, Apr. 22, 2014. In exercising its 4 discretion to award the named class representative, the Van Vranken court addressed five 5 factors: "1) the risk to the class representative in commencing suit, both financial and otherwise; 6 2) the notoriety and personal difficulties encountered by the class representative; 3) the amount 7

8 of time and effort spent by the class representative; 4) the duration of the litigation; and 5) the

9 personal benefit (or lack thereof) enjoyed by the class representative as a result of the 10 litigation." VanVranken, 901 F.Supp. at 299. The Plaintiffs argue that in the case at bar, with a 11 recovery of $75 million worth of real estate which would produce an income stream estimated 12

l3 to be $2.45 billion, fees of $30,000 to each of the four named plaintiffs, totaling $120,000, is

14 reasonable under the VanVranken factors. Pl.'s Mot. 2-4, Apr. 22, 2014. 15 The Defendants disagree on two bases. First, the Defendants also oppose granting class 16 certification, and argue that there is no case authority for an award of a service fee to named 17 plaintiffs in the absence of class certification. Defs.' Consolidated Opp'n 23, May 16, 2014. But 18

19 even if the court should undergo an analysis of whether the named plaintiffs should receive a

20 fee, the Defendants argue that, "there must be some evidence in the record demonstrating that 21 the representative plaintiffs were involved." Id. at 24 (quoting In re Heartland Payment 22 Systems, Inc. Customer Data Sec. Breach Litigation, 851 F.Supp.2d 1040 (S.D. Tex. 2012). 23 The Plaintiffs' cited case, VanVranken v. Atlantic Richfield Co., was indeed a case in 24

25 which the court had granted class certification, which this Court has not done. See Van

26 Vranken, 901 F.Supp. at 295. The Defendants state they have not been able to find any case in 27

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which service fees were given despite class certification being denied. Defs.' Consolidated

2 Opp'n 23, May 16, 2014. Neither has the Court.

3 But even if the VanVranken test or a similar one applied, the Plaintiffs have not met its 4 elements. First, the motion is not accompanied by any declarations or affidavits from the named 5 plaintiffs, or anyone else with personal knowledge of the relevant facts, to prove that the 6 requisite elements have been met. All the court has to work with are unsworn statements by 7

8 Attorney Van de veld in the motion memorandum itself. Second, even among these unsworn,

9 conclusory statements, there is nothing that says the named plaintiffs have expended any time 10 and effort on the litigation above and beyond hiring counsel, certainly nothing adequate to 11 persuade the Court that the named plaintiffs have expended so much time and effort that it 12

13 would be just for the Court to award them a cash bounty in addition to the injunction.

14 The Plaintiffs' Motion to Award the Named Plaintiffs a Service Fee of $30,000 Each is 15 DENIED. 16 III. Attorney's Fees 17 A. The Common Fund Doctrine 18

19 As stated above, the Court determines that class certification is unnecessary in the

20 present dispute. As no class has been certified, the Court cannot award attorney's fees on a class 21 action basis. 22 As a default, under the "American Rule," followed by Guam, each side bears its own 23 litigation expenses, including attorney's fees. Fleming v. Quigley, 2003 Guam 4 ~ 7; see also 24

25 Guam Radio Servs. v. GEDA, 2000 Guam 23 ~ 9 ("Traditionally, a court did not have the

26 power to grant the prevailing party attorney's fees unless lawmakers specifically provided them 27 with such authority in a statute.") However, there are exceptions to the American Rule, allowing 28

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for fee-shifting where authorized by statute, by contract, or in judicially established equitable

2 circumstances. Fleming, 2003 Guam 4 at~ 7 (citing Young v. Redman, 128 Cal. Rptr. 86, 91

3 (Cal. Ct. App. 1976)). Citing California case law, the Guam Supreme Court has recognized the 4 following equitable circumstances as exceptions: common fund, substantial benefit, private 5 attorney general, third-party tort, and bad faith. Fleming, 2003 Guam 4 at ~ 7 n.3 (citing Trope 6

7 v. Katz, 902 P.2d 259,263, 45 Cal. Rptr. 2d 241, 245 (Cal. 1995), and Young, 128 Cal. Rprt. at

8 92). The common fund doctrine is at issue in the case at bar. Pls.' Mot. to Award Att'y Fees 4-6, 9 Apr. 21, 2014; Defs.' Consolidated Opp'n 19-21, May 16, 2014. 10 The common fund doctrine is a long-standing principle of equity, one which the U.S. 11 Supreme Court recognized and applied in the late nineteenth century. See Trustees etc. v. 12

13 Greenough, 105 U.S. 527 (1881) (" .. .it has been the common practice, as well in the courts of

14 the United States as those of the States, to make fair and just allowances for expenses and 15 counsel fees to the trustees, or other parties, promoting the litigation and securing the due 16 application of the property to the trusts and charges to which it was subject."). To qualify for an 17 award of attorney's fees under the common fund or common benefit doctrines, the victorious 18

19 litigant must: 1) impart a substantial nonmonetary benefit or preserve a common fund, 2) the

20 class of beneficiaries must be sufficiently identifiable, 3) the benefits must be able to be 21 accurately traced, and 4) the fee must be able to be shifted with some degree of exactitude. 22 Southeast Legal Defense Group v. Adams, 657 F.2d 1118 (9th Cir. 1981); see Alyeska Pipeline 23 Serv. Co. v. Wilderness Soc'y, 421 U.S. 240, 265 n.39 (1975). 24

25 The remedy won by Attorney Van de veld's efforts and awarded to the Plaintiffs was an 26 injunction rather than money damages. Gange et al. v. Government of Guam et al., CV 1461-10, 27 Decision and Order 8 (Super. Ct. Guam, Aug. 16, 2013). The Court granted the injunction on 28

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the basis that the transfer of Lot Naval Radio Station and Lot Anderson South would be a taking

2 of private property, without a public purpose, and with no payment of just compensation. Id. at

3 3-7. The parties did not dispute the issue ofmonetary compensation, and the Plaintiffs preferred 4 the injunctive remedy. Id. at 7. There was no money judgment or pool of liquid assets that may 5 easily be disbursed to the Plaintiffs as cash. 6 However, the fact that the remedy was injunctive and the asset that was preserved is 7

8 illiquid does not necessarily mean that no fund was protected, such that the common fund

9 doctrine is inapplicable. In contrast, in Simon v. City of Omaha, the Omaha City Council had 10 labeled the plaintiffs' real estate as "blighted and substandard," which the plaintiffs feared was 11 the first step toward an eminent domain taking. Simon v. City of Omaha, 677 N.W.2d 129, 132- 12

13 33 (Neb. 2004). In response to a lawsuit the city council amended its redevelopment plan to

14 remove the plaintiffs' real estate, but the trial court still denied the plaintiffs' request for 15 attorney's fees. Simon, 677 N.S.2d at 133. On appeal, the Nebraska Supreme Court likewise 16 denied attorney's fees under the common fund doctrine, reasoning that the common fund 17 doctrine "presupposes the existence of a fund," and that the only fund plaintiffs could refer to, 18

19 saving taxpayer dollars, did not qualify. Simon at 138.

20 But courts do not regard injunctive relief as valueless in a common fund case, and 21 indeed recognize that an injunction or consent decree may be the most valuable part of a 22 judgment or settlement to the plaintiffs, and must be considered when determining the 23 appropriate attorney fee. See Staton v. Boeing Co., 327 F.3d 938, 974 (9th Cir. 2003) (stating 24

25 that where obtaining injunctive relief accounted for a significant percentage of the fees

26 expended, courts may use the common fund version of the lodestar method); see also Saccoccio 27 v. JP Morgan Chase Bank, N.A., 297 F.R.D. 683, 695 (S.D. Fla. 2014) (considering injunctive '. :~ 28

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relief valued at over $650 million alongside monetary relief of $300 million in determining

2 appropriate attorney's fees).

3 In the case at bar, no money is being made immediately available to the Plaintiffs and no 4 money judgment was granted, the remedy was entirely injunctive. But that does not mean that 5 no fund was preserved or no benefit bestowed. The Court has previously stated that the nature 6 of the Plaintiffs' property is not the land itself, but instead is income to be paid out from a trust: 7

8 "The Plaintiffs clearly do not own the Tiyan lots in fee simple. Rather, they are the beneficiaries

9 of a unique trust, born out of an acknowledgment of past and ongoing injustices committed 10 against their ancestors, this trust holds the lots for their benefit." Gange et al. v. Government of 11 Guam et al., CV 1461-10, Decision and Order 3 (Super. Ct. Guam, Aug. 16, 2013); see also 21 12

13 GCA § 80104(e) (2005) (requiring the Ancestral Lands Commission to administer all assets and

14 revenues of the Land Bank, manage the lands, develop them to their highest and best use, and 15 provide just compensation to the dispossessed ancestral landowners with the resulting income). 16 The present case is distinguishable from Simon v. City of Omaha. In Simon, the 17 plaintiffs could identify no fund to which they held title as only taxpayers funds were involved, 18

19 and the only interests of the plaintiffs that was potentially threatened were interests in real

20 estate. Simon, 677 N.S.2d at 729. In the case at bar, the fund that this litigation protected and 21 preserved is the stream of income to be paid out to the trust beneficiaries in the future. 22 The Defendants do not argue that the second and third requirements of the common fund 23 doctrine, that the class of beneficiaries must be sufficiently identifiable, and the benefits must be 24

25 able to be accurately traced, are not present in this case. See Defs.' Consolidated Opp'n. 19-21,

26 May 16, 2014. However, the Defendants do argue against the fourth requirement of a common 27 fund, that the fee must be able to be shifted with some degree of exactitude. Id. at 20-21. The 28

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Defendants direct the Court's attention to Southeast Legal Defense Group v. Adams, and where

2 the Ninth Circuit found that the fee could not be shifted with exactitude, and argue this case is

3 similar, because the benefit of the injunction to each beneficiary depends on a careful case-by 4 case analysis ofthe appraised value ofthe land originally taken. Defs.' Consolidated Opp'n. 20- 5 21, May 16, 2014; see Southeast Legal Defense Group v. Adams, 657 F.2d 1118, 1125 (9th Cir. 6 1981 ). 7

8 In Adams, the plaintiffs argued that the relevant fund was the Oregon State Highway

9 Fund, which the litigation had prevented from being diverted to other uses, and the beneficiaries 10 of the litigation included the Oregon Transportation Commission, the State of Oregon, the 11 residents of Oregon, and the taxpayers of Oregon. Adams, 657 F.2d at 1123. The Ninth Circuit 12

13 noted that "sophisticated economic analysis would be required to gauge the extent to which the

14 general public, the supposed beneficiary, as distinguished from selected elements of it, would 15 bear the costs." Adams at 1123 (quoting Alyeska Pipeline Serv. Co. v. Wilderness Soc'y, 421 16 U.S. 240, 265 n.39 (1975)). Because determining which beneficiary bears what costs and 17 distributing it in proportion to the benefits received was impossible, the common fund 18

19 doctrine's elements were not met. Adams at 1123.

20 Adams is significantly different from the case at bar. Rather than the entire general 21 public being the beneficiary of the litigation, in this case the beneficiaries are a much more 22 limited group: the Land Bank Trust beneficiaries whose interests in the trust income would have 23 been effectively extinguished had the land transfer been executed. And while the Defendants 24

25 cite Adams for the proposition that pro rata methods of conferring benefits cannot be done in a

26 common fund, at the page cited the Ninth Circuit was determining the proper allocation of costs 27 of fees between the state defendants and immune federal defendants. Adams at 1125. 28

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It is entirely appropriate to apply an attorney's fees awardprior to determining exactly

2 how much each beneficiary is entitled to, and such a determination does not negate the

3 exactitude requirement: "Although the full value of the benefit to each absentee member cannot 4 be determined until he presents his claim, a fee awarded against the entire judgment fund will 5 shift the costs of litigation to each absentee in the exact proportion that the value of his claim 6

7 bears to the total recovery." Boeing Corp. v. Van Gernert, 444 U.S. 472, 479 (1980). In contrast

8 to the impossible task of gauging and allocating benefits and costs across the entire population 9 of Oregon in Adams, valuing the particular parcels of ancestral land that cannot be returned, and 10 paying out trust income as just compensation accordingly, is already a statutory duty of the 11 Ancestral Lands Commission. See 21 GCA § 80104(e) (requiring the Commission to use Land 12

13 Bank Trust income to provide just compensation to ancestral landowners who cannot regain

14 possession or title to their ancestral lands due to the lands' continued government or public use). 15 B. Percentage of Recovery and Lodestar Methods of Determining Attorney's Fees 16 There are two main approaches to valuing the attorney's fees in a common fund case, 17 percentage of recovery and lodestar, the latter meaning hours of work times an hourly rate. In 18

19 McDaniel v. County of Schenectady, the Second Circuit discussed the relative merits and

20 demerits of both at length. McDaniel v. County of Schenectady, 595 F.3d 411, 418-19 (2d Cir. 21 201 0). While the percentage of recovery method aligns the interest of attorney and client in that 22 they both benefit from upside risk, it can also encourage the lawyer to settle a case quickly 23 rather than forego alternative opportunities, and in cases of very large recoveries the fee award 24

25 may be well out of proportion to the work performed. McDaniel v. County of Schenectady, 595

26 F.3d at 418-19. The lodestar method is especially appropriate in cases with little contingency 27 risk, but can encourage overbilling and make work. McDaniel, 595 F.3d at 418. 28

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The theory behind a percentage of recovery approach is market-mimicking, awarding

2 the lawyer a fee award in line to what he might have received through negotiation with all the

3 absent beneficiaries. See Goldberger v. Integrated Resources, Inc., 209 F.3d 43, 51 (2d Cir. 4 2000). However, "we cannot know precisely what fees common fund plaintiffs in an efficient 5 market for legal services would agree to, given an understanding of the particular case and the 6 ability to engage in collective arm's-length negotiation with counsel." Goldberger v. Integrated 7

8 Resources, Inc., 209 F.3d at 52. Moreover, "it is not ten times as difficult to prepare, and try or

9 settle a 10 million dollar case as it is to try a 1 million dollar case." In reUnion Carbide Corp. 10 Consumer Products Business Securities Litigation, 724 F.Supp. 160, 166 (S.D.N.Y. 1989). 11 Attorney Van de veld has directed the Court's attention to Guam Ancestral Lands 12

13 Commission and Guam Economic Development and Commerce Authority Request for

14 Proposals RFP-07-003, referring to Lot Naval Radio Station, and RFP-08-007, referring to Lot 15 Andersen South. Decl. of Van de veld, Exs. 2, 3, Apr. 21, 2014. RFP-07-003 values Lot Naval 16 Radio Station at $55 million, and RFP-08-007 values Lot Andersen South at $19,186,524.00. 17 Id. Accepting these figures gives a total value of $74,186,524.00 for the two properties. Ague 18

19 Point Development Corp. estimated the value of the income stream resulting from lease of Lot

20 Naval Radio Station to be $1.8 billion. Decl. of Van de veld, Exs. 4-6, Apr. 21, 2014. 21 Extrapolating from the fact that the value of Lot Anderson South is approximately 36% of the 22 value of Lot Naval Radio Station, Mr. Van de veld estimates Lot Anderson South to yield an 23 income stream of about $650 million. Pls.'s Mot. 3, Apr. 21, 2014. Attorney Van de veld 24

25 proposes an award of 15% of the protected fund as his fee. Id. at 4. Accepting the estimated

26 value ofthe two lots of land at $74,186,524, and treating that number as the size ofthe common 27 fund, yields a requested fee award of$11,127,978.60. 28

Page 16 of24 Decision and Order CV 1461-10; Gange eta/. v. Government ofGuam, eta!.

The fee motion argues that 15% is reasonable, on account of the size of the fund, the

2 excellence of the results and diligence of prosecution, risks of litigation, non-monetary benefits

3 of the litigation, and significant financial and personal burdens incurred in prosecuting the case. 4 Id. at 6-12. The Court commends Mr. Van de veld on his advocacy in the case thus far and 5 sympathizes with the personal difficulties he has undergone, but nonetheless finds an award of 6 $11,127,978.60 to be unreasonably large. The case is one of applying fairly well-settled law to 7

8 essentially uncontroverted facts. It has not required the efforts of small armies of associate

9 attorneys performing large amounts of discovery. Mr. Van de veld, a sole practitioner, has been 10 able to successfully prosecute the case while maintaining an active practice. "The percentage 11 method holds the potential to result in attorneys' fees many times greater than those that would 12

13 have been earned under the lodestar of hourly rate multiplied by hours worked." McDaniel v.

14 County of Schenectady, 595 F.3d 411, 418 (2d Cir. 2010). On the facts of this case, an eleven 15 million dollar award would be an unjustified windfall. Therefore, the Court determines that the 16 common fund method is inappropriate, and instead shall use the lodestar method. 17 The first step in determining the fee amount to be awarded under a lodestar approach is 18

19 to multiply the reasonable hours worked by a reasonable hourly rate. !h&_, Bowles v. Dep't of

20 Ret. Sys., 847 P.2d 440, 450 (Wash. 1993). This initial number is then "adjusted upward or 21 downward based on additional factors." Bowles, 847 P.2d at 450. 22 Many of the federal circuit courts have adopted lists of factors for trial courts to 23 consider, making attorney's fees awards amenable to appellate review. A seminal case from the 24

25 federal Fifth Circuit, Johnson v. Georgia Highway Express, Inc., has a list of twelve factors for

26 courts to consider: time and labor required, novelty and difficulty of the questions, the skill 27 requisite to perform the legal service properly, the preclusion of other employment by the 28

Page 17 of24 Decision and Order CV 1461-10; Gange eta!. v. Government ofGuam, eta!.

attorney due to acceptance of the case, the customary fee, whether the fee is fixed or contingent,

time limitations imposed by the client or the circumstances, the amount involved and the results .. 2

3 obtained, the experience, reputation, and ability of the attorneys, the "undesirability" of the 4 case, the length and nature of the professional relationship with the client, and awards in similar 5 cases. Johnson v. Georgia Highway Express, Inc., 488 F.2d 714, 717-19 (5th Cir. 1974). 6

However, Johnson and similar lists of factors have been criticized for offering little 7

8 guidance so long as they do not come along with an analytic framework for application. See

9 Copeland v. Marshall, 641 F.2d 880, 890 (D.C. Cir. 1980). In Copeland, the D.C. Circuit noted 10 that the customary hourly fee is likely to be influenced by a host of other factors, such as 11 required attorney skill, fixed versus contingent fees, time limitations, amount to be obtained, 12

13 reputation of attorneys, and undesirability of the case. Copeland, 641 F.2d at 890. The most

14 widely accepted analytic framework, thought to reduce the ambiguity and redundancy of the 15 Johnson factors, is that of Lindy Bros. Builders, Inc. v. American Radiator & Standard Sanitary 16 Corp., 487 F.2d 161 (3rd Cir. 1973), also known as Lindy I, and its successor Lindy II, 540 F.2d 17 102 (3rd Cir. 1976). The Lindy cases reduced the relevant factors for determining the multiplier 18

19 rate to: 1) the contingent nature of success in the case and 2) the quality of representation. See

20 Copeland at 892-93. When determining the first factor, a court must be sure whether the hourly 21 rate does not already build in a premium for risk contingency. Id. at 893. The second factor, 22 quality of representation, should only result in an adjustment if the work is unusually good or 23 bad. Id. at 293. That means that a further deviation should only occur if the lawyer discharged 24

25 his duties with a degree of skill appreciably above or below the skill reflected in the hourly rate.

26 Id. at 294; Lindy II, 540 F.2d 102, 117-118. 27

Page 18 of24 Decision and Order CV 1461-10; Gange et al. v. Government ofGuam, et al.

In statutory fee shifting cases, the federal Supreme Court has disapproved of enhancing

2 lodestar awards above the benchmark of reasonable number of hours worked multiplied by a

3 reasonable hourly rate, especially for enhancements for contingency risk. City of Burlington v. 4 Dague, 505 U.S. 557, 567 (1992). The court reasoned that contingency risk is already reflected 5 in the number of hours or in the hourly rate, and that allowing enhancements for contingency 6

7 risk would incentivize lawyers to bring relatively meritless cases. Dague, 505 U.S. at 562-63.

8 However, these concerns are of lesser import in common fund cases: "the policy consideration 9 in Dague that militate for forbidding risk multiples in statutory fee-shifting cases have little 10 force in common fund cases. Unlike in [statutory] fee-shifting cases, the fee award in a common 11 fund case is ultimately charged against the plaintiffs' fund, rather than directly against the 12

13 defendant. Thus, the defendant's liability is fixed ... " Florin v. Nationsbank of Georgia, N.A., 34

14 F.3d 560, 564 (7th Cir. 1994). Instead, "a risk multiplier is not merely available in a common 15 fund case but mandated, if the court finds that counsel 'had no sure source of compensation for 16 [his or her] services."' Florin, 34 F.3d at 565 (quoting In re Continental Illinois Securities 17 Litigation, 962 F.2d 566, 569 (7th Cir. 1992)). 18

19 The Court concludes that a common fund has been created and the common fund

20 doctrine applies, that the lodestar method is the proper method to determine the amount of 21 attorney's fees, and that liability for the attorney's fees lies with the fund, the Land Bank Trust, 22 which is managed by its trustees the Commissioners of the Ancestral Lands Commission. The 23 Plaintiffs' Motion to Award Attorney's Fees is GRANTED in part and DENIED in part. 24

25 C. Procedure for Determining Amount of Attorney's Fees 26 In determining the proper amount of attorney's fees, in a common fund case, the court 27 must become the fiduciary of the fund beneficiaries. In re Wash. Pub. Power Supply Sys. Sec. 28

Page 19 of24 Decision and Order CV 1461-10; Gange et at. v. Government ofGuam, et at.

Litig., 19 F.3d 1291, 1302 (9th Cir. 1994). Guam Rule of Civil Procedure 54(d)(2) provides the

2 procedure for awards of attorney's fees. It states, in relevant part:

3 (B) Unless otherwise provided by statute or order of the court, the motion must be filed no later than 14 days after entry of judgment; must specify the judgment and 4 the statute, rule, or other grounds entitling the moving party to the award; and 5 must state the amount or provide a fair estimate of the amount sought. If directed by the court, the motion shall also disclose the terms of any agreement with 6 respect to fees to be paid for the services for which claim is made. (C) On request of a party or class member, the court shall afford an opportunity 7 for adversary submissions with respect to the motion in accordance with Rule 8 43(e) or Rule 78. The court may determine issues of liability for fees before receiving submissions bearing on issues of evaluation of services for which 9 liability is imposed by the court. The court shall find the facts and state its 10 conclusions oflaw as provided in Rule 52(a).

11 Guam Rule of Civil Procedure 54(d)(2)(B), (C). 12 The merits Judgment, granting the Plaintiffs' requested injunction, was issued August 13 30,2013. Gange et al. v. Government of Guam et al., CV 1461-10, Judgment (Super. Ct. Guam, 14 Aug. 30, 2013). On October 2, 2013 Attorney Van de veld filed a Motion to Correct an 15

16 Omission in the Rule 54(b) Judgment or Alternatively to Amend the Judgment by Certifying the

17 Class and Awarding Attorneys Fees Therein. Pls.' Mot., Oct. 2, 2013. This motion was not filed 18 within fourteen days of the entry of judgment, as ordinarily required by Rule 54(d)(2)(B). See 19 Guam Rule of Civil Procedure 54(d)(2)(B). However, the Court has previously granted Mr. Van 20 de veld permission to move for attorney's fees, notwithstanding any previously timeliness 21

22 concerns. Gange et al. v. Government of Guam et al., CV 1461-10, R. Log 2 (Super. Ct. Guam,

23 Apr. 4, 2014). 24 The attorney's fee motion filed on April 21, 2014 complied with Rule 54(d)(2)(B) in 25 specifying the grounds under which Mr. Van de veld believes he is entitled to fees, and to the 26

27 amount sought. See Pls.' Mot., Apr. 21, 2014. However, as the Court determines that the

28 lodestar method, and not the percentage of recovery method, is the proper method to calculate

Page 20 of24 Decision and Order '!· CV 1461-10; Gange et al. v. Government ofGuam, et al.

the fee award in this case, the Court is in need of further information and briefing to determine

2 the proper amount.

3 Guam Rule of Civil Procedure 54(d)(2)(B) permits the Court to deviate from the default 4 provision of fourteen days to move for attorney's fees. Considering the importance of the 5 attorney's fees to the parties, to Mr. Van de veld, and to the absent trust beneficiaries, and 6

considering the Court's obligation to act as a fiduciary for the fund beneficiaries, the Court shall 7

8 extend the default timeline, and orders the following. 9 The Court ORDERS Mr. Van de veld, within thirty [30] days of the issuance of this 10 Decision and Order, to file thee documents: 1) a declaration under perjury setting forth an 11 itemized list of the reasonable hours worked on this matter and a reasonable hourly rate to 12

13 provide for the benchmark lodestar figure; 2) a memorandum arguing for the correct multiplier

14 to alter the lodestar benchmark, addressing the contingent nature of success and the quality of 15 representation; and 3) draft findings of fact and conclusions of law setting forth the findings and 16 conclusions that Mr. Van de veld requests that the Court adopt. The memorandum may also 17 address whether or not an award of interest is proper to an attorney's fee award under the 18

19 common fund rule, and if so, the proper interest rate and the date on which the interest began to

20 accrue. The declaration, memorandum and draft findings of fact and conclusions of law shall 21 also be served on the Office of the Attorney General. 22 Pursuant to Rule 54(d)(2)(C), the Court shall permit the Defendants to made adversary 23 submissions with regard to the proper amount of attorney's fees, in accordance with Rule 43(e) 24

25 or Rule 78. See Guam Rule of Civil Procedure 54(d)(2)(C). The Court shall also permit absent

26 fund beneficiaries to make submissions regarding the amount of attorney's fees. Adversary 27 submissions by the Defendants or absent fund beneficiaries, if any, shall be filed within sixty 28

Page 21 of24 Decision and Order ···" CV 1461-10; Gange eta!. v. Government ofGuam, eta!.

[60] days of the issuance of this Decision and Order. Absent fund beneficiaries may appear and

2 be heard in open court at the hearing to determine the amount of attorney's fees.

3 However, pursuant to Rule 54(d)(2)(C), the Court regards the issue of liability for fees 4 as being adjudicated in this Decision and Order, and per the above analysis the liability falls on 5 the assets of the Land Bank Trust, managed by its trustees the Commissioners of the Ancestral 6 Lands Commission. See Guam Rule of Civil Procedure 54(d)(2)(C); see 21 GCA § 80104(e). 7

8 The briefings and argument on the proper amount of attorney's fees shall not provide an

9 opportunity tore-litigate the liability for the fees. 10 Should the Defendants or any absent trust beneficiaries make adversary submissions, II Mr. Van de veld shall be permitted to file a reply to such submissions within seventy-five [75] I2

13 days ofthe issuance of this Decision and Order.

I4 Upon the Court's eventual issuance of Findings of Fact and Conclusions of Law setting I5 forth the amount of attorney's fees, the Commissioners of the Ancestral Lands Commission, as I6 trustees of the Land Bank Trust, shall have thirty [30] days to submit a proposed plan to pay the I7 attorney's fees. Following the submission of the Commission's payment plan, Mr. Van de veld I8

I9 shall have an additional fifteen [15] days to file any objections.

20 IV. Clarification 2I The Defendants have moved for clarification. Defs.' Mot., Apr. 4, 2014. Accordingly, 22 the Court clarifies the current status of the case. 23 The Court regards the Decision and Order of August 16, 2013 as setting forth its 24

25 determination ofthe merits of the case, and the Judgment of August 30, 2013 as being a partial

26 judgment that left some aspects of the case un-adjudicated. In this current Decision and Order, 27

Page22 of24 Decision and Order CV 1461-10; Gange et at. v. Government ofGuam, et at.

the Court has adjudicated the questions of class certification, service fees, liability for attorney's

2 fees, and method for calculating the fees.

3 Remaining before this Court are the proceedings to determine the proper amount of 4 attorney's fees and the process by which these fees shall be paid to Mr. Van de veld. Unless 5 ordered to the contrary by the Supreme Court, the Court shall first resolve these remaining 6 questions, and then shall issue a final judgment, adjudicating all the claims and the rights and 7

8 liabilities of all the parties. 9 CONCLUSION 10 For the reasons set forth above, the Plaintiffs' Motion for Class Certification is 11 DENIED. The Plaintiffs' Motion to Award the Named Plaintiffs a Service Fee of $30,000 Each 12

13 is DENIED, the Plaintiffs' Motion to Award Attorney's Fees is GRANTED in part and

14 DENIED in part, and the status of the case is CLARIFIED. 15 The Court ORDERS Mr. Van de veld, within thirty [30] days of the issuance of this 16 Decision and Order, to file a declaration under perjury setting forth an itemized list of the 17 reasonable hours worked on this matter and a reasonable hourly rate to provide for the 18

19 benchmark lodestar figure, a memorandum arguing for the correct multiplier to alter the lodestar

20 benchmark, addressing the contingent nature of success and the quality of representation, and 21 draft findings of fact and conclusions of law setting forth the findings and conclusions that Mr. 22 Van de veld requests that the Court adopt. 23 The Court PERMITS adversary submissions by the Defendants and the absent fund 24

25 beneficiaries with regard to the proper amount of attorney's fees, in accordance with Rule 43(e)

26 or Rule 78. Adversary submissions, if any, shall be filed within sixty [60] days of the issuance 27 of this Decision and Order. The adversary submissions may not address liability for attorney's 28

Page 23 of24 Decision and Order CV 1461-10; Gange eta!. v. Government ofGuam, eta!.

fees, but may only address the proper amount of fees. The Court shall also permit absent fund

2 beneficiaries to appear and be heard in open court at the hearing to determine the amount of

3 attorney's fees. 4 Should the Defendants or any absent trust beneficiaries make adversary submissions, the 5 Court PERMITS Mr. Van de veld to file a reply to such submissions within seventy-five [75] 6 days of the issuance ofthis Decision and Order. 7

8 Upon the Court's eventual issuance of Findings of Fact and Conclusions of Law, the

9 Commissioners of the Ancestral Lands Commission, as trustees of the Land Bank Trust, shall IO be ORDERED to submit a proposed plan to pay the attorney's fees within thirty [30] days. Mr. II Van de veld shall be PERMITTED to file any objections to the Commission's payment plan I2

13 within an additional fifteen [15] days.

I4 The hearing to determine the amount of attorney's fees shall be on February 27, 2015 I5 at 11:00 am. I6

I7

I8

I9

20 SERVICe VIA COUh f 8l.u. I acknowledge that a copy of the • 2I original hereto was placed in the r.nurt boxoL THUR R. BARCINAS Judge, Superior Court of Guam '. I-A

J > '

22 • I

·. u 2' - .; 23 Date:12-fifrime:~ A,~ 24 Deputy Clerk, Superior Cour:t of Guaii'i

25 SERVICE VIA COURT BOX 26 I ac~nowiedge that a copy of the orlgmal hereto was placed In the 27 ;;~·=ve.«:..- t¥Hit! 28 AG ~ a VIe.. Dat/ 1-/f.. Time:~ 2 A.s~ Page 24 of24 lieputy Cieik, Superior Court of Guam