Story-Bernardo v. Gov Guam

• Court: Superior Court of Guam
• Decided: May 2, 2022
• Docket: CV0733-20
• Status: Unknown

Opinion

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IN THE SUPERIOR COURT OF GUAM BY:_

LAYLA STORY-BERNARDO, et a!., Superior Court Case No.: CV0733-20

Plaintiffs. DECISION AND ORIER GRANTING VS• DEFENDANTS’ MOTION TO DISMISS GOVERNMENT Of GUAM. et al.. PLAINTIFFS AMENDED CLASS ACTION COMPLAINT Defendants.

In this class action seeking enforcement of employment benefits under a Guam

Department of Administration personnel rule. the Court considers whether the government has

waived its sovereign immunity. Upon reviewing the record and relevant facts. the Court

determines that there has been no such waiver. Accordingly, the Court GRANTS Defendant

Government of Guam’s Motion to Dismiss and dismisses all claims stated in the Amended Class

Action Complaint.

I. PROCEDURAL BACKGROUND

Plaintiffs, who are government employees, initiated this class action proceeding against

the Governor of Guam and various Government of Guam agencies. Class Action Compl. (Oct.

6, 2020). Plaintiffs allege Rule 8.406 of DOA’s Personnel Rules and Regulations entitles them to

double pay and/or overtime during a public health emergency, but that Defendants denied them

such benefits. Class Action Compl. ¶ 36 Am. Class Action Compl. ¶J 33. 36, 82 (Sep. 16,

2021). Plaintiffs seek ajudgment of no less $100,000.000.00 for all double pay owed to

Plaintiffs and the class. Am. Class Action Compl. at 22. They also seek a declaratory judgment

and estoppel. . . CV0733-20 DECISION AND ORDER GRANTING DEFENDANTS’ MOTION Page 2 TO DISMISS PLAINTIFFS’ AMENDED CLASS ACTION COMPLAINT

Most, if not all, Plaintiffs have elected to bypass the administrative review process. They

allege that “any attempt to exhaust applicable administrative remedies would be futile” because

Governor Lourdes Leon Guerrero, the DOA director, Edward Birn, and the Attorney General

have declared Plaintiffs are not entitled to double pay. Am. Class Action Compl. ¶ 89-90.

Plaintiffs also point to the closure of government agencies to hear grievances as demonstrating

the futility of exhausting administrative remedies. Am. Class Action Compi. ¶ 91.

This Court. under Judge Pro Tempore Teresa Kim-Tenorio. granted a motion to dismiss

Plaintiffs’ original complaint with leave to amend. Relevant to the present motion to dismiss, the

Court ruled that the government waived sovereign immunity as it was futile for Plaintiffs to

exhaust their administrative remedies. Dec. and Order at 16 (May 27, 2021).

Plaintiffs then amended their Complaint, and this matter was reassigned to this Judge.

Am. Class Action Compl.; Not. Judge Assignment (Nov. 22, 2021).’ The Government again

moved to dismiss. Defs.’ Mot. Dismiss (Nov. 19. 2021). The Court heard the government’s

Motion on February 21, 2022.

II. LAW AND DISCUSSION

A. Count 1 (Violation of Double Pay for Emergency Conditions is barred by the doctrine of sovereign immunity.

Defendants seek dismissal on grounds that the Government has not waived its sovereign

immunity from suit. Sovereign immunity is a component of subject matter jurisdiction. Ehiert v.

University of Guam. 2019 Guam 27 ¶ 11. Jurisdiction is a threshold question and the plaintiffs

have the burden to prove jurisdiction exists. Id.

In its earlier Decision and Order, the Court cited the Ehiert holding that government of

Guam employees may pursue two different methods for overcoming sovereign immunity: they

‘On February 21. 2022, the Court issued a Form Three Disqualification Notice of Potentially -

Disqualifying Facts which supplemented its earlier October 27, 2020 Form One -

Disqualification. No party has presented objections to this Judge presiding over this case. . CV0733-20 DECISION AND ORDER GRANTING DEFENDANTS’ MOTION Page 3 TO DISMISS PLAINTIFFS’ AMENDED CLASS ACTION COMPLMNT

can seek judicial review of a final adverse action or they can pursue potential remedies under the

Government Claims Act (‘Claims Act”). Dec. and Order at 15. Without identifying which route

these Plaintiffs selected, the Court concluded that the government somehow waived sovereign

immunity because it was futile for Plaintiffs to exhaust administrative remedies. Dec. and Order

at 15-16.

Being confronted again with the issue ofjurisdiction in this second motion to dismiss

which was filed in response to the filing of the Amended ComplainL2 the Court explores the

existence of sovereign immunity under either of the two routes that Plaintiffs can use to establish

jurisdiction. As a preliminary matter, the Amended Complaint does not assert any remedy under

the Claims Act, and it is unclear whether any Plaintiff possesses a contract that entitles him or

her to relief under the Claims Act. Even further, when the Court asked cotinsel at oral argument

what administrative process applies to their claim under DOA Rule 8.406, counsel responded

that typically they would file a grievance. This calls into question whether any Plaintiffs qualify

under the Claims Act. Plaintiffs have the burden of establishing subject matter jurisdiction. but

they facially and procedurally fail to place their claims under the Claims Act. Because they did

not plead the applicability of the Claims Act or took the Claims Act”s administrative procedure

route, and because they conceded it was more appropriate to file a grievance, the Court here

finds that any claims under the Claims Act have not been alleged. In other words, as regards any

claims under the Claims Act, Plaintiffs fail to establish either jurisdiction or a waiver of

sovereign immunity.

2 Jurisdiction can be raised at any time. Guam Mem ‘1 Hosp. v. Super Ct., 2012 Guam 17 ¶ 8. The parties had litigated whether the earlier Decision and Order formed the law of the case. The Court declines to review the law of the case arguments and instead focuses on the presence or absence ofjurisdiction. . CV0733-20 DECISION AND ORDER GRANTING DEFENDANTS MOTION Page 4 TO DISMISS PLAfl\TTIFFS’ AMENDED CLASS ACTION COMPLAINT

Because at oral argument Plaintiffs instead point to a potential employment grievance

procedure (for which they also allege exhaustion was futile), the Court now examines whether

sovereign immunity has been waived under that route. Plaintiffs rely on Lirntiaco Gttam fire

Dep , 2007 Guam 10, in which a government employee brought a mandamus action to enforce a

settlement agreement over back pay reached between himself and the Civil Service Commission

(“CSC”). The government sought dismissal on sovereign immunity grounds and for failure to

file an action under the Claims Act. The court ruled that sovereign immunity did not apply to

awards given by the CSC in a grievance proceeding.

While Plaintiffs point to Limtiaco for proof that sovereign immunity has been “waived,”

a closer reading of Limtiaco reveals that the court found not waiver, but an inapplicability of the

doctrine of sovcreign immunity to “back pay awards owing by the Government of Guam.” Id. ¶

33 (emphasis added). Citing Guam Power Authority, 967 f.2d 586 (9th Cir. 1992), Limtiaco

reinforced the Ninth Circuit’s holding that when a back pay award is given by the CSC,

sovereign immunity does not apply because the award is not rendered by a court.” 2007 Guam

10 ¶ 34. Unlike the Plaintiffs here, Limtiaco endured the CSC process and obtained a settlement,

which the court considered to be an award. It is the appeal from an award of a CSC grievance

procedure that Guam courts have found to pass (or bypass) jurisdictional concerns.

Here, Plaintiffs argued that some Plaintiffs initiated CSC grievances but have not

received decisions from the government. Other Plaintiffs believe the administrative process is

futile given the government’s stalled handling of these grievances and because of the Governor’s

pronouncements that the government will not pay double pay. But in eliminating the crucial step

of following and completing this administrative process, Plaintiffs also eliminated the means by

which they can overcome sovereign immunity concerns. Absent a CSC award, Plaintiffs still

need to establish jurisdiction. CV0733-20 DECISION AND ORDER GRANTING DEFENDANTS’ MOTION Page 5 TO DISMISS PLAINTIFFS’ AMENDED CLASS ACTION COMPLAINT

Moreover, they cannot establish jurisdiction just by claiming futility inherent in pursuing

their administrative grievances. The Guam Supreme Court has made clear that any waiver of

sovereign immunity must be express. Gange i Govt of Guam. 2017 Guam 2 ¶ 15 C’[iJf

sovereign immunity is applicable and would otherwise act to deprive the courts of subject matter

jurisdiction, only duly enacted legislation can waive this immunity, and any waiver must be

express.”). Inferring a waiver through inaction by the government fails to meet the standard of

express waiver.

Setting aside the lack of express waiver of sovereign immunity, the Court has found no

case or doctrine which states that if the pursuit of administrative remedies--from which an appeal

would alleviate sovereign immunity concerns--is deemed futile, then sovereign immunity still no

longer applies. Plaintiffs even cite 5 GCA § 9240 for support that “various legal structures have

been established to allow Government employees to seek the pay due to them.” Opp. at 3 (Jan.

7. 2022). But section 9240 permits judicial review after agency decisions, thereby still requiring

a level of administrative review. Overcoming sovereign immunity on the grievance route

requires an award or a CSC ruling at the least, and Plaintiffs have not alleged or obtained that.

And unlike the Claims Act, in the grievance context, there is no statutory provision that waives

or disavows sovereign immunity and allows a direct route to the court in the event of

administrative futility.

F or that reason, the Court finds that Plaintiffs fail to establish either a waiver or an

inapplicability of sovereign immunity, and therefore fail to establish subject matter jurisdiction.

If any Plaintiff’s claim falls under the Government Claims Act, he or she must pursue that route

administratively or plead the applicability of the Claims Act so that the Court can make the

appropriate determination of waiver. If any Plaintiff’s claim falls under the grievance route, they

must pursue that procedure in order to overcome sovereign immunity concerns. Because . CV0733-20 DECISION AND ORDER GRANTING DEFENDANTS’ MOTION Page 6 TO DISMISS PLAINTIFFS’ AMENDED CLASS ACTION COMPLAINT

Plaintiffs fail to demonstrate that they have taken these steps, the Court lacks jurisdiction to

adjudicate their claims.3

B. Count 2 (Declaratory Judgment) is barred b sovereign immunity.

While the Court has determined that Count 1, as pled, is barred by the doctrine of

sovereign immunity, the Court now examines whether sovereign immunity also precludes the

remaining counts which seek declaratory judgment relief and estoppel.

In Count 2, Plaintiffs seek a declaration as to the rights of the parties and the meaning of

the regulations and statutes governing Plaintiffs’ pay. Am. Class Action Compl. ¶ 140.

Plaintiffs’ Complaint does not cite a specific statutory source for seeking a declaratory judgment;

however, Plaintiffs’ Opposition clarifies that they seek a declaratory judgment under Guam’s

declaratory judgment statute, 7 GCA § 26$0l. Plaintiffs also claim that California law supports

the extension ofjurisdiction over declaratory relief actions.

Plaintiffs’ cited authority, however, supports the opposite proposition. For example,

Plaintiffs cite Viner v Civil Serv. Comm ‘n of City and Clv of San francisco, 139 P.2d 88 (Cal.

Ct. App. 1945), for its reference to a holding in Hoyt i Board of Civ. Serv. Comm ‘rs, 132 P.2d

$04 (Cal. 1942), that a declaratory relief action may be maintained against a state. While Hoyt

indeed recognizes that declaratory relief actions can be raised against a state, Hoyt discusses in

detail that there are limitations. “It has been held repeatedly that actions for declaratory relief

involve matters of practice and procedure only and are not intended in any way to enlarge the

jurisdiction of court over parties and subject-matter. . . . Declaratory judgment statutes do not

Another holding of Limtiaco is that compensation for employment with the government of Guam is a due process right. Whether sovereign immunity applies to due process claims was not briefed by either party.

Barrett-Anderson v. Camacho, 2015 Guam 20, directs that if a specific source for declaratory relief exists, that particular provision, rather than section 26801, governs the matter. However, Plaintiffs here fail to argue that any of the provisions under Guam’s Administrative Adjudication Law (which the Supreme Court found applicable in Barrett-Anderson) apply. e CV0733-20 DECISION AND ORDER GRANTING DEFENDANTS’ MOTION Page 7 TO DISMISS PLAINTIFFS’ AMENDED CLASS ACTION CONIPLAINT

authorize a determination of liability against the sovereign outside the terms of statutory

provisions accepting liability and subjection to suit.” H at 206. When it specifically comes to

sovereign immunity concerns, Hoyt approves of declaratory judgment actions only if they are not

otherwise barred due to immunity. Id.

Beyond Hoyt, Plaintiffs raise two other California cases, neither of which discussed

declaratory relief in the context of sovereign immunity. See Opp. at 16 (citing Bachis v State

farm Mitt. Auto. Ins. Co., 71 Cal. Rptr. 486 (Ct. App. 196$) and Independent Laundry v.

Railroad Comm’n. 161 P.2d $27 (Cal. Ct. App. 1945)). Finally. Plaintiffs cite Reinboldv. City of

Santa Monica, 133 Cal. Rptr. $74 (Ct. App. 1976), which also did not discuss sovereign

immunity and was a mandamus action--not a civil case like the present.5

A final dispositive point on the issue of declaratory relief lies in the language of the

relevant statute itself. Section 26801 states, “any person . . . who desires a declaration of his

rights or duties with respect to another . . . may, in cases of actttal controversy relating to the

legal rights and duties of the respective parties. bring an action in the court havingjurisdiction

for a declaration of his rights and duties in the premises, including a determination of any

question of construction or validity arising under such instrument or contract.” (Emphases

added.) As stated. section 26801 actions may be pursued in a court having jurisdiction. Absent a

waiver of sovereign immunity, this Court lacks the necessary statutory prerequisite of subject

matter jurisdiction. furthermore. Plaintiffs’ claims do not rise to the level of an actual

controversy until the Government waives its immunity from suit.

Topasna v Gov of Guam, 2021 Guam 23, involved a mandamus action also seeking the enforcement of Rule 8.406 during the COVID-19 pandemic. The Guam Supreme Court held that the petitioner was not entitled to release from work duties or additional pay as he did not demonstrate his work facility was closed. Topasna did not review sovereign immunity issues. CV0733-20 DECISION AND ORDER GRANTING DEFENDANTS’ MOTION Page $ TO DISMISS PLAINTIFFS’ AMENDED CLASS ACTION COMPLAINT

Because sovereign immunity also precludes Plaintiffs’ declaratory relief claim, it must

similarly be dismissed.

C. Count 3 (Estoppel) is barred by the doctrine of sovereign immunity and it also is not a proper claim.

Lastly, in Count 3, Plaintiffs seek to estop Defendants from declaring they are not

required to pay double pay. Am. ClassAction Compi. ¶J 141-150. The Court’s earlier Decision

and Order dismissed a prior articulation of Plaintiffs estoppel claim on grounds that they had not

alleged affirmative misrepresentations or affirmative concealment. Dec. and Order at 23.

Plaintiffs claim that their Amended Class Action Complaint now makes those allegations and

should survive dismissal. However. Defendants move to dismiss the estoppel claim on the basis

that Plaintiffs have still failed to allege sufficient facts.

Plaintiffs respond by asking the Court to match their allegations against the estoppel

statute and caselaw. Plaintiffs cite as the legal authority for estoppel Guam’s evidence code

governing presumptions, 5 GCA § 5106(3). That section states the following presumption is

conclusive: Whenever a party has, by his own declaration, act or omission, intentionally and

deliberately led another to believe a particular thing true, and to act upon such belief he cannot,

in any litigation arising out of such declaration, act or omission be permitted to falsify it.” 6

GCA § 5 106(3). Carefully read, however, section 5106 describes certain presumptions and

prohibits misrepresentations made in the course of a litigation; it does not provide an avenue for

affirmative relief. Section 5106 therefore fails to provide a basis for an estoppel claim.

Plaintiffs next cite for support the four elements of estoppel outlined in Lirnitaco, 2007

Guam 10, which the Court has already noted for its limited use here. Limtiaco s test derives

from Mobil Oil Guam, Inc. v Lee, 2004 Guam 9. As it sets forth the test for estoppel, however,

Mobil Oil Guam, Inc. also makes clear that estoppel is not a claim but rather a defense. Id. ¶ 24 . CV0733-20 DECISION AND ORDER GRANTING DEFENDANTS’ MOTION Page 9 TO DISMISS PLAINTIFFS’ AMENDED CLASS ACTION COMPLAINT

(“equitable estoppel is available only as a ‘shield’ or defense”); see also Herring v. Volume

Merchandise, Inc.. 113 S.E.2d 814 (N.C. 1960) (estoppel “should not in any case be made the

instruments of gain or profit”); Bair i City of Clearwater, 196 So.3d 577. 584 (Fla. App. 2016)

(equitable estoppel is designed to prevent a loss rather than to aid a party from gaining

something”); Franklin v. St. Paulfire & Marine Ins. Co., 534 S.W.2d 661, 666 (Tenn. App.

1975) (“Estoppel is available to protect a right but not to create one.”).6 Based on Mobil Oil

Guam, Inc. and the prevailing legal standard. it does not appear that Plaintiffs can utilize the

doctrine of estoppel as a claim to seek affirmative relief; they can only use it to defend against

arguments made by Defendants.

finally, even if Plaintiffs can assert estoppel as a claim, the underlying nature of the

estoppel claim again raises concerns about sovereign immunity. As recently announced by the

Guam Supreme Court, “in determining when sovereign immunity applies to a suit against the

government of Guam, we look at the practical effect ofajudgment, not its formal

appellation--analyzing whether the judgment would be indistinguishable to an award of damages

against the state.” San Agustin v Mansapit-Shimizu, 2020 Guam 25 ¶ 11. Estoppel may be

equitable in nature, but the manner in which Plaintiffs here seek to utilize estoppel amounts to a

claim for monetary relief. See Am. Class Action Compi. ¶ 148 (“Plaintiffs relied on the notion

that they would receive double pay by continuing to work during the Emergency, and now they

have been injured by the government of Guam because they will not receive double pay that they

are due.”). This theory implicates the sovereign’s purse, and by extension, sovereign immunity.

If Plaintiffs are entitled to monetary relief under an estoppel theory, there must be an

affirmative waiver of sovereign immunity. Gange, 2017 Guam 2 ¶ 15; San Agztstin, 2020 Guam

6 Based on the doctrine of estoppel, Limtiaco precluded the Government from refusing to pay once it acquired a legitimate excuse not to pay. CV0733-20 DECISION AND ORDER GRANTING DEFENDANTS’ MOTION Page 10 TO DISMISS PLAINTIFFS AMENDED CLASS ACTION COMPLAINT

25 ¶ 25 (only the sovereign can waive immunity). Section 5106 is a rule of evidence and

contains no waiver. Moreover, Plaintiffs point to no other statutory permission for an estoppel

claim against the government. Plaintiffs have therefore failed to demonstrate that the

government has expressly waived its sovereign immunity over estoppel claims involving pay

(again, assuming that estoppel can be used as a claim).

III. CONCLUSION AND ORDER

Because all claims are barred by the doctrine of sovereign immunity, the Motion to

Dismiss is therefore GRANTED.7 Leave is GRANTED to amend the Amended Class Action

Complaint on the narrow basis of including any necessary jurisdictional allegations.

SO ORDERED this 2nd day of May 2022.

HON. ELYZE M. IfflARTE Judge, Superior Court of Guam

SERVICE VIA E-MAIL I acknowledge that an electronic copy of the original was e-mailed to:

Date: c)’1.) 2j—’ .lncph Bambp Jr. Deputy Clerk, Superior Court of Guam

Appearing Parties: Joshua D. Walsh. Esq., Razzano Walsh & Torres, P.C, for Plaintiffs Assistant Attorney General Jordan Lawrence Pauluhn, Office of Attorney General, for Defendants

‘

After finding a lack of subject matter jurisdiction, the Court declines to consider other arguments raised by Defendants.