NOT FOR PUBLICATION FILED UNITED STATES COURT OF APPEALS JUN 25 2025 MOLLY C. DWYER, CLERK U.S. COURT OF APPEALS FOR THE NINTH CIRCUIT
JOHN RYAN, No. 24-4522 D.C. No. Plaintiff - Appellee, 1:23-cv-00015 v. MEMORANDUM* DAFNE MANSAPIT-SHIMIZU, in her official and individual capacities as the Director of the Guam Department of Revenue and Taxation; MARIE LIZAMA, in her official and individual capacities as the Deputy Director of the Guam Department of Revenue and Taxation,
Defendants - Appellants,
and
EVELYN VILLAPANDO, in her official capacity and individual capacities, JOHN DOES, 1-15,
Defendants.
Appeal from the District Court of Guam Ramona V. Manglona, Chief District Judge, Presiding
Argued and Submitted June 4, 2025 Honolulu, Hawaii
* This disposition is not appropriate for publication and is not precedent except as provided by Ninth Circuit Rule 36-3. Before: W. FLETCHER, CHRISTEN, and DESAI, Circuit Judges.
Defendants Dafne Mansapit-Shimizu and Marie Lizama, officials of the
Guam Department of Revenue and Taxation (“DRT”), appeal the district court’s
order denying their motion to dismiss on qualified immunity grounds. The district
court held that plaintiff John Ryan plausibly alleged that defendants violated his
clearly established due process rights by secretly settling his qui tam action without
giving him notice or an opportunity to be heard, and thus defendants were not
entitled to qualified immunity. We have jurisdiction under 28 U.S.C. § 1291. We
reverse in part and affirm in part. 1
We review the denial of a motion to dismiss based on qualified immunity de
novo, considering only the “purely legal question” of whether, “accept[ing] as true
all well-pleaded allegations of material fact, and constru[ing] them in the light most
favorable to the non-moving party,” defendants are entitled to qualified immunity.
Hernandez v. City of San Jose, 897 F.3d 1125, 1131–32 (9th Cir. 2018) (quotations
omitted). To defeat qualified immunity, Ryan must plausibly allege that:
(1) defendants “violated a statutory or constitutional right;” and (2) the right “was
clearly established at the time of the challenged conduct.” DePaul Indus. v. Miller,
14 F.4th 1021, 1026 (9th Cir. 2021) (quotation omitted). We “may address these two
1 We grant the parties’ motions for judicial notice, Dkts. 8, 18. Fed. R. Evid. 201(b).
2 24-4522 prongs in either order.” Evans v. Skolnik, 997 F.3d 1060, 1064 (9th Cir. 2021)
(quotation omitted).
To establish a violation of procedural due process, Ryan must allege “the
existence of (1) a liberty or property interest protected by the Constitution; (2) a
deprivation of the interest by the government; and (3) lack of process.” Shanks v.
Dressel, 540 F.3d 1082, 1090 (9th Cir. 2008) (cleaned up). A state law creates a
constitutionally protected property interest when it has “(1) substantive predicates
governing official decision making, and (2) explicitly mandatory language
specifying the outcome that must be reached if the substantive predicates have been
met.” James v. Rowlands, 606 F.3d 646, 656 (9th Cir. 2010) (quotation omitted).
Ryan argues that Guam’s False Claims and Whistleblower Act (the
“Whistleblower Act”) gives him two property interests that trigger due process
protection: (1) a property interest in the qui tam action itself, and (2) a property
interest in the proceeds recovered from the settlement. He alleges that defendants
deprived him of these property interests without due process when they secretly
settled his qui tam suit without providing him notice or an opportunity to be heard,
and then refused to give him his portion of the proceeds.
1. We do not reach whether Ryan has a property interest in the qui tam
action itself because any such property interest was not “clearly established” at the
time the defendants acted. Although the Supreme Court has held that the federal
3 24-4522 False Claims Act “gives the relator himself an interest in the lawsuit, and not merely
the right to retain a fee out of the recovery,” Vt. Agency of Nat. Res. v. United States
ex rel. Stevens, 529 U.S. 765, 772 (2000), it has declined to address whether a
relator’s interest in such a suit constitutes a protected property interest that triggers
due process, see United States, ex rel. Polansky v. Exec. Health Res., 599 U.S. 419,
436 n.4 (2023). No court has held that a relator has a constitutionally protected
property interest in a qui tam action brought pursuant to Guam’s statutory scheme,
and the Whistleblower Act does not “unambiguously create the property interest that
[Ryan] claims.” DePaul Indus., 14 F.4th at 1027; Schwenk v. Hartford, 204 F.3d
1187, 1205 (9th Cir. 2000) (“[A] statute itself, standing alone, may provide sufficient
evidence that the law was clearly established at the time of the conduct.”). Although
the Whistleblower Act clearly gives Ryan the right to pursue a qui tam action if the
government declines to intervene, it expressly reserves for the government the right
to pursue any alternate remedy, which may include settlement with the delinquent
taxpayer. 5 Guam Code Ann. § 37203(e); see also United States ex rel. Barajas v.
United States, 258 F.3d 1004, 1011–12 (9th Cir. 2001).
There is thus no “controlling authority or [] robust consensus . . . of persuasive
authority” establishing a relator’s constitutionally protected property interest in a qui
tam action, DePaul Indus., 14 F.4th at 1026, and defendants are entitled to qualified
4 24-4522 immunity for any alleged due process violations arising from Ryan’s interest in the
action itself.
2. Ryan does, however, have a “clearly established” protected property
interest in proceeds recovered from the qui tam action. The Whistleblower Act states
that if the government declines to intervene in a relator’s qui tam action, the
government “shall award not less than thirty percent (30%) of the collected proceeds
. . . resulting from the action (including any related actions) or from any settlement
in response to such action.” 5 Guam Code Ann. § 37103(b)(7). Under Guam’s
statute, when the government pursues an alternate remedy, the relator “shall have
the same rights in such proceeding as [] [he] would have had if the [qui tam] action
had continued.” Id. § 37203(e). The government has no discretion in awarding the
proceeds: if the government declines to intervene, but later settles the suit, it must
award the relator his portion of the proceeds. Id.; see also Barajas, 258 F.3d at 1010.
The Whistleblower Act therefore creates a protected property interest in recovered
proceeds, and the Act’s unequivocal language is “clear enough that every reasonable
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NOT FOR PUBLICATION FILED UNITED STATES COURT OF APPEALS JUN 25 2025 MOLLY C. DWYER, CLERK U.S. COURT OF APPEALS FOR THE NINTH CIRCUIT
JOHN RYAN, No. 24-4522 D.C. No. Plaintiff - Appellee, 1:23-cv-00015 v. MEMORANDUM* DAFNE MANSAPIT-SHIMIZU, in her official and individual capacities as the Director of the Guam Department of Revenue and Taxation; MARIE LIZAMA, in her official and individual capacities as the Deputy Director of the Guam Department of Revenue and Taxation,
Defendants - Appellants,
and
EVELYN VILLAPANDO, in her official capacity and individual capacities, JOHN DOES, 1-15,
Defendants.
Appeal from the District Court of Guam Ramona V. Manglona, Chief District Judge, Presiding
Argued and Submitted June 4, 2025 Honolulu, Hawaii
* This disposition is not appropriate for publication and is not precedent except as provided by Ninth Circuit Rule 36-3. Before: W. FLETCHER, CHRISTEN, and DESAI, Circuit Judges.
Defendants Dafne Mansapit-Shimizu and Marie Lizama, officials of the
Guam Department of Revenue and Taxation (“DRT”), appeal the district court’s
order denying their motion to dismiss on qualified immunity grounds. The district
court held that plaintiff John Ryan plausibly alleged that defendants violated his
clearly established due process rights by secretly settling his qui tam action without
giving him notice or an opportunity to be heard, and thus defendants were not
entitled to qualified immunity. We have jurisdiction under 28 U.S.C. § 1291. We
reverse in part and affirm in part. 1
We review the denial of a motion to dismiss based on qualified immunity de
novo, considering only the “purely legal question” of whether, “accept[ing] as true
all well-pleaded allegations of material fact, and constru[ing] them in the light most
favorable to the non-moving party,” defendants are entitled to qualified immunity.
Hernandez v. City of San Jose, 897 F.3d 1125, 1131–32 (9th Cir. 2018) (quotations
omitted). To defeat qualified immunity, Ryan must plausibly allege that:
(1) defendants “violated a statutory or constitutional right;” and (2) the right “was
clearly established at the time of the challenged conduct.” DePaul Indus. v. Miller,
14 F.4th 1021, 1026 (9th Cir. 2021) (quotation omitted). We “may address these two
1 We grant the parties’ motions for judicial notice, Dkts. 8, 18. Fed. R. Evid. 201(b).
2 24-4522 prongs in either order.” Evans v. Skolnik, 997 F.3d 1060, 1064 (9th Cir. 2021)
(quotation omitted).
To establish a violation of procedural due process, Ryan must allege “the
existence of (1) a liberty or property interest protected by the Constitution; (2) a
deprivation of the interest by the government; and (3) lack of process.” Shanks v.
Dressel, 540 F.3d 1082, 1090 (9th Cir. 2008) (cleaned up). A state law creates a
constitutionally protected property interest when it has “(1) substantive predicates
governing official decision making, and (2) explicitly mandatory language
specifying the outcome that must be reached if the substantive predicates have been
met.” James v. Rowlands, 606 F.3d 646, 656 (9th Cir. 2010) (quotation omitted).
Ryan argues that Guam’s False Claims and Whistleblower Act (the
“Whistleblower Act”) gives him two property interests that trigger due process
protection: (1) a property interest in the qui tam action itself, and (2) a property
interest in the proceeds recovered from the settlement. He alleges that defendants
deprived him of these property interests without due process when they secretly
settled his qui tam suit without providing him notice or an opportunity to be heard,
and then refused to give him his portion of the proceeds.
1. We do not reach whether Ryan has a property interest in the qui tam
action itself because any such property interest was not “clearly established” at the
time the defendants acted. Although the Supreme Court has held that the federal
3 24-4522 False Claims Act “gives the relator himself an interest in the lawsuit, and not merely
the right to retain a fee out of the recovery,” Vt. Agency of Nat. Res. v. United States
ex rel. Stevens, 529 U.S. 765, 772 (2000), it has declined to address whether a
relator’s interest in such a suit constitutes a protected property interest that triggers
due process, see United States, ex rel. Polansky v. Exec. Health Res., 599 U.S. 419,
436 n.4 (2023). No court has held that a relator has a constitutionally protected
property interest in a qui tam action brought pursuant to Guam’s statutory scheme,
and the Whistleblower Act does not “unambiguously create the property interest that
[Ryan] claims.” DePaul Indus., 14 F.4th at 1027; Schwenk v. Hartford, 204 F.3d
1187, 1205 (9th Cir. 2000) (“[A] statute itself, standing alone, may provide sufficient
evidence that the law was clearly established at the time of the conduct.”). Although
the Whistleblower Act clearly gives Ryan the right to pursue a qui tam action if the
government declines to intervene, it expressly reserves for the government the right
to pursue any alternate remedy, which may include settlement with the delinquent
taxpayer. 5 Guam Code Ann. § 37203(e); see also United States ex rel. Barajas v.
United States, 258 F.3d 1004, 1011–12 (9th Cir. 2001).
There is thus no “controlling authority or [] robust consensus . . . of persuasive
authority” establishing a relator’s constitutionally protected property interest in a qui
tam action, DePaul Indus., 14 F.4th at 1026, and defendants are entitled to qualified
4 24-4522 immunity for any alleged due process violations arising from Ryan’s interest in the
action itself.
2. Ryan does, however, have a “clearly established” protected property
interest in proceeds recovered from the qui tam action. The Whistleblower Act states
that if the government declines to intervene in a relator’s qui tam action, the
government “shall award not less than thirty percent (30%) of the collected proceeds
. . . resulting from the action (including any related actions) or from any settlement
in response to such action.” 5 Guam Code Ann. § 37103(b)(7). Under Guam’s
statute, when the government pursues an alternate remedy, the relator “shall have
the same rights in such proceeding as [] [he] would have had if the [qui tam] action
had continued.” Id. § 37203(e). The government has no discretion in awarding the
proceeds: if the government declines to intervene, but later settles the suit, it must
award the relator his portion of the proceeds. Id.; see also Barajas, 258 F.3d at 1010.
The Whistleblower Act therefore creates a protected property interest in recovered
proceeds, and the Act’s unequivocal language is “clear enough that every reasonable
official would interpret it to establish” that Ryan has a protected property interest in
the proceeds. DePaul Indus., 14 F.4th at 1026.
“Once it is determined that due process applies, the question remains what
process is due.” Morrissey v. Brewer, 408 U.S. 471, 481 (1972). The relevant inquiry
here is whether Ryan plausibly alleged that “he had a ‘clearly established’ right to
5 24-4522 process more comprehensive than” the process he received. Brewster v. Bd. of Educ.
of Lynwood Unified Sch. Dist., 149 F.3d 971, 984 (9th Cir. 1998).
The most fundamental requirement of due process is notice and an opportunity
to be heard. See Mathews v. Eldridge, 424 U.S. 319, 333, 348 (1976). As such, Ryan
was entitled—at a minimum—to notice that DRT settled his claims upon its receipt
of $600,000 from Titan Imports, Inc. (“Titan”). And given the statute’s clear creation
of a protected property interest in the proceeds and the well-established principle
that government officials may not take property without notice, “every reasonable
official would know” that Ryan was entitled to notice of the settlement. DePaul
Indus., 14 F.4th at 1026.
Defendants did not notify Ryan of their settlement with Titan and withheld
his portion of the settlement proceeds. Ryan has thus plausibly alleged that
defendants violated his due process rights. And because the Whistleblower Act and
our long-standing precedent make clear that Ryan’s property interest entitled him to
a “right to process more comprehensive than” no process at all, defendants are not
entitled to qualified immunity for their failure to provide notice of the settlement.
Brewster, 149 F.3d at 984.
AFFIRM in part and REVERSE in part.
6 24-4522