Government of Guam, et al. v. Leon Guerrero, et al.

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THE DISTRICT COURT OF GUAM
GOVERNMENT OF GUAM and
DOUGLAS B. MOYLAN, in his official
capacity as the Attorney General of Guam,
Plaintiffs,
vs.
LOURDES A. LEON GUERRERO, in her
official capacity as the Governor of Guam and
GUAM HOUSING AND URBAN RENEWAL
AUTHORITY, a Public Body Corporate and
Politic,
Defendants.
CIVIL CASE NO. 24-00029
REPORT & RECOMMENDATION
1. 	to Grant Defendants’ Motion to Dismiss
(ECF No. 5),1
2. 	to Deny Plaintiffs’ Motion for Leave to
File an Amended Complaint (ECF
No. 20),
3. 	to Deny Plaintiffs’ Motions to
Consolidate Cases (ECF Nos. 21 and 35),
and
4. 	to Deny Defendants’ Motion to Strike as
Moot (ECF No. 5)
This is an action involving the obligation and expenditure of funds allocated by the federal
government to the Government of Guam pursuant to the American Rescue Plan Act of 2021
(“ARPA” or the “Act”). The Plaintiffs challenge the Defendants’ obligation or use of said funds and
contend that the Defendants’ actions violate various federal and local laws and regulations,
including the Organic Act of Guam (‘the “Organic Act”).
Now pending before the court are the following motions: (1) Defendants’ Joint Motion to
Strike and to Dismiss, (2) 	Plaintiffs’ Motion for Leave to File an Amended Complaint, and
(3) Plaintiffs’ two Motions to Consolidate Cases.2 See ECF Nos. 5, 20, 21 and 35. The motions
1 The ECF citations in this Report and Recommendation refer to the docket sheet in the
instant action (24-CV-00029) unless otherwise specified.
2 Plaintiff Attorney General of Guam (the “Attorney General”) requested that the instant
action be consolidated with two other cases which he removed to this court. See Guam Power
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Government of Guam and Douglas B. Moylan v. Lourdes A. Leon Guerrero and GHURA Civil Case No. 24-00029
Report and Recommendation 	page 2 of 31
have been referred to the below-signed Magistrate Judge. See Order re Referral, ECF No. 39. The
motions have been fully briefed, and oral argument will not aid the court in reaching a decision on
the pending matters. Having reviewed the case file and based on relevant authority, the court now
issues this Report and Recommendation to grant the Defendants’ Motion to Dismiss, to deny all of
the Plaintiffs’ motions, and to deny the Defendants’ Motion to Strike as moot.
I. 	BACKGROUND
The facts are generally not disputed. 3 Rather, the issue is whether the Defendants’
obligation of ARPA funds toward the Mangilao Medical Campus Project (the “MMC Project”)
violate the Organic Act, various federal statutes and regulations governing the use of ARPA funds,
and other Guam laws.
A. 	ARPA Funds and the SLFRF Program
In March 2021, Congress enacted ARPA to provide additional relief to address the
continued impact of the COVID-19 pandemic. Pub. L. 117-2, 135 Stat. 4 (2021). Section 9901 of
the ARPA amended Title VI of the Social Security Act to establish the Coronavirus State and Local
Fiscal Recovery Funds (“SLFRF”) (codified as 42 U.S.C. §§ 802-803) for state, local, territorial and
tribal governments to cover pandemic-related costs and losses. Sections 602 and 603 of the Act
provided the following list of four permissible uses for SLFRF:
(A) to respond to the public health emergency with respect to the Coronavirus
Disease 2019 (COVID–19) or its negative economic impacts, including assistance
to households, small businesses, and nonprofits, or aid to impacted industries such
as tourism, travel, and hospitality;
(B) to respond to workers performing essential work during the COVID–19 public
health emergency by providing premium pay to eligible workers . . . that are
performing such essential work, or by providing grants to eligible employers that
have eligible workers who perform essential work;
(C) for the provision of government services up to [$10 million for] . . . the
reduction in revenue . . . due to the COVID–19 public health emergency relative to
revenues collected . . . ; or
(D) to make necessary investments in water, sewer, or broadband infrastructure.
Authority v. Attorney General of Guam, 25-CV-00029, and In re: Request of Lourdes A. Leon
Guerrero, I Maga ‘Hagan Guahan, Governor of Guam, Relative to the Authority of the Attorney
General of Guam to Approve Autonomous Agency Contracts, 25-CV-00041.
3 See Compl. at ¶ 18, ECF No. 1 (“This case . . . presents pure questions of law that do not
require any additional factual development.”).
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42 U.S.C. §§ 802(c)(1) and 803(c)(1).
In January 2022, the U.S. Department of Treasury published a Final Rule, effective April 1,
2022, with regard to SLFRF, requiring that all funds must be obligated by December 31, 2024, and
spent by December 31, 2026. Coronavirus SLFRF, 87 Fed. Reg. 4338, 4340 (Jan. 27, 2022). The
Final Rule also reminded all recipients that “federal, state, and local laws and regulations, outside
of SLFRF program requirements, also apply, including for example, environmental laws and federal
civil rights and non discrimination requirements[.]” Id.
B. 	Filing of Complaint re Guam’s Receipt and Use of SLFRF
Under the ARPA, Guam was allocated approximately $604 million in SLFRF. Defs.’ Joint
Opp’n to Pls.’ Mot. Leave File Am. Compl. at 1, ECF No. 25. 4 As of December 20, 2024, the date
the Complaint herein was filed, over $450 million in ARPA funds had been obligated. 	Mem.
P. & A. Supp. Defs.’ Joint Mot. Strike and Dismiss at 1, ECF No. 6.
The Complaint asserts that on May 28, 2024, defendant Guam Housing and Urban Renewal
Authority (“GHURA”) “‘accepted’ a loan from the Governor [of Guam (the “Governor”)] for up
to $10 million for ‘community development projects[,]’” and an additional $2.5 million on
November 26, 2024, for the same purpose. Compl. at ¶ 7, ECF No. 1. The Plaintiffs believe that
“some or all of this $12.5 million originated from ARPA/SLFRF funds.” Id. The Plaintiffs further
believe that GHURA purchased property in Mangilao and will construct a hospital on the land or
will transfer the land to another government agency for purposes of constructing a hospital. Id. at
¶¶ 10-11.
The Plaintiffs thus brought the instant action for injunctive and declaratory relief, asserting
this court has jurisdiction pursuant to 28 U.S.C. §§ 1331 and 1367. Id. at ¶¶ 1-2. The Complaint
asserts nine causes of action, including violations of the Organic Act, the ARPA/SLFRF and various
laws of Guam. Among other things, the Plaintiffs ask the court for “injunctive relief to prohibit the
4 See also Compl. at ¶ 5, ECF No. 1 (“The federal government, pursuant to ARPA, has
allocated the Government of Guam over five hundred million dollars ($500,000,000) under
SLFRF[.]”).
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Government of Guam and Douglas B. Moylan v. Lourdes A. Leon Guerrero and GHURA Civil Case No. 24-00029
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Governor from using any ARPA/SLFRF without appropriation by the Legislature or unless pursuant
to a pre-existing program for which the Guam Legislature has already appropriated funds,” and to
“expressly prohibit GHURA from using or transferring the land it has purchased to date until
authorized by the Legislature[.]” Id. at 20.
In lieu of filing an answer, on January 13, 2025, the Defendants filed a Joint Motion to
Strike and to Dismiss. See ECF No. 5.
C. 	Request to File Amended Complaint
On or about December 27, 2024, the Guam Department of Administration (“DOA”) entered
into an Interagency Grant Agreement (“IGA”) with the Guam Economic Development Agency
(“GEDA”) for the administration and disbursement of approximately $104.8 million in SLFRF.
See IGA, Ex. 1 to Decl. Leslie A. Travis (“Travis Decl.”), ECF No. 25-1. The stated purpose of the
IGA was “to fund the completion of the initial phase of the [MMC] project, including design and
construction of primary utility infrastructure (electrical power, water and sewer), and completion
of sampling and analysis of environmental, archaeological, physical, geology and other site
characteristics.” Id., Cover Page. In turn, on or about March 2, 2025, and April 1, 2025, GEDA
entered into subgrant agreements with the Guam Power Authority (“GPA”) and the Guam
Waterworks Authority (“GWA”). 	See Travis Decl., Exs. 2 and 3. 	These agreements were
subsequently approved by the Consolidated Commission on Utilities (“CCU”). Joint Opp’n to Pls.’
Mot. Leave File Am. Compl. at 2, ECF No. 25.
On January 31, 2025, William Lyle Stamps, Acting Deputy of the Government Corruption
Division of the Office of the Attorney General of Guam, wrote a letter to GWA’s General Manager
stating that the Attorney General had issued two formal legal opinions which concluded that “the
Governor’s attempt to build a Mangilao medical facility with GHURA violated Guam law.” Ex. D
to Pet. Writ of Mandate, ECF No. 1-2 in GPA v. Attorney General of Guam, 25-CV-00029.5 The
5 Pursuant to Rule 201 of the Federal Rules of Evidence, the court sua sponte takes judicial
notice of the facts set forth in the filings in 25-CV-00029, which the Attorney General requested
be consolidated with the instant action. See Att’y General’s Mot. Consolidate and Mem. Law, ECF
No. 21. The facts contained in said filings are largely undisputed.
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Government of Guam and Douglas B. Moylan v. Lourdes A. Leon Guerrero and GHURA Civil Case No. 24-00029
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letter requested that the GWA General Manager “not take any actions to authorize the expenditure
of ratepayer/taxpayer monies in furtherance of [the] Mangilao medical complex” because the “CCU
authorization to proceed with expending funds [is] illegal, and is now under criminal investigation.”
Id.
GPA prepared three invitations for bid for the MMC Project, which required the Attorney
General’s legal advice and review because each procurement exceeded the $500,000 threshold
established in Guam Procurement Law, 5 GCA § 5150. 6 See Pet. Writ of Mandate at ¶ 12, ECF
No. 1-2 in 25-CV-00029. Based on the Attorney General’s stated opinion as to the alleged illegality
of the MMC Project, on March 7, 2025, GPA wrote to the Attorney General requesting the
assignment of conflict-free counsel to conduct the Section 5150 procurement review. Id. at ¶ 13.
On March 13, 2025, the Attorney General responded to GPA’s letter and asked GPA to
produce certain information before he could make a final decision on GPA’s request for conflict-
free counsel. Id. at ¶ 14 and Ex. F thereto.
On March 31, 2025, GPA wrote to the Attorney General, reiterating its request for
“independent counsel to conduct a review” of the procurement and “a copy of the documents
establishing an ethical screening wall[.]” Id. at ¶ 15 and Ex. G thereto. GPA believed that the
Attorney General had a “concurrent conflict of interest that prevent[ed him] from working on a
potential criminal matter on behalf of the People of Guam against GPA and its officers on the one
hand, and representing GPA in the civil matter of [Section 5150] review on the other.” Ex. G at 2.
6 In pertinent part, this statute provides:
Whenever . . . the head of any executive branch agency, autonomous agency,
instrumentality or public corporation of the government of Guam conducts any
solicitation or procurement which is estimated to result in an award of Five
Hundred Thousand Dollars ($500,000) or more, the Attorney General or his
designees . . . shall act as legal advisor during all phases of the solicitation or
procurement process. The Attorney General, or his designee, . . . shall, in addition,
when he approves contracts, determine not only the correctness of their form, but
their legality.
5 GCA § 5150.
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Government of Guam and Douglas B. Moylan v. Lourdes A. Leon Guerrero and GHURA Civil Case No. 24-00029
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GPA’s letter further stated:
In our request of March 7, 2025, for independent, conflict-free counsel, GPA is not
seeking to recuse the entire [Office of the Attorney General] from reviewing the
MMC infrastructure procurement. Rather, GPA is asking you to assign your staff
in a way that affords GPA independent legal counsel and representation, entirely
separate from your proposed prosecution. In other words, GPA is asking you, the
Attorney General, specifically, to recuse yourself, based on your statements in the
media and letters to GWA officials and testimony before the Legislature, opining
that criminal action has taken place or is about to take place regarding the utility
infrastructure projects in Mangilao.
Id. at 2-3.
On April 9, 2025, the Attorney General replied, informing GPA that it should direct the
procurement reviews to the attorneys in the Solicitors Division of his office. 	See Pet. Writ of
Mandate at ¶ 16, ECF No. 1-2 in 25-CV-00029, and Ex. H thereto. The letter did not provide
documents regarding the establishment of an ethical screening wall as requested by GPA. Id.
On April 10, 2025, GPA wrote to the Attorney General, repeating its request for a copy of
ethical screening documents. Id. at ¶ 17, and Ex. I thereto.
The Attorney General did not respond to GPA’s April 10th letter. Id. at ¶ 18.
On June 12, 2025, GPA filed a Verified Petition for Writ of Mandate in the Superior Court
of Guam (the “GPA Superior Court Action”), requesting said court to compel the Attorney General
“to assign conflict-free counsel to GPA’s procurement review and to erect an ethical wall in his
office screening off all conflicted attorneys, including himself, and provide documentation thereof
to . . . GPA[.]” Id. at 7.
On June 17, 2025, the Attorney General removed the GPA Superior Court Action to this
court. See Notice of Removal, ECF No. 1 in 25-CV-00029.
On July 22, 2025, the Plaintiffs filed a Motion for Leave to File an Amended Complaint,
with the proposed amended complaint (“PAC”) appended thereto.7 See ECF No. 20. The PAC
7 The PAC incorporates by reference a total of nine various exhibits, but the Attorney
General failed to include said exhibits when he filed the PAC. See PAC, ECF No. 20-1. 	For
example, paragraph 12, footnote 1 asserts that “[a] copy of the Interagency Grant Agreement which
contains the certification and costs [sic] estimates is attached hereto as Exhibit 1.” Id. at ¶ 12, n.1.
The PAC further states that “[a] copy of the initial public records request and response is attached
as Exhibit 6, with the supplemental response attached as Exhibit 7.” Id. at ¶ 32. Exhibits 6 and 7,
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sought to add GPA, GWA, GEDA and the CCU as defendants in the instant action. The Plaintiffs
asserted that the instant lawsuit and the GPA Superior Court Action share “[c]ommon questions of
law and fact” such that the new defendants should be added to this action. Id. at 2.
II. 	ANALYSIS
The court will address the various motions in the order they were filed.
A. 	Motion to Strike8
The Defendants move to strike the Government of Guam as a plaintiff in this action
pursuant to Rule 219 of the Federal Rules of Civil Procedure. 	The Defendants assert that the
Governor, as the chief executive officer of Guam, holds the executive power of the Government of
Guam, not the Attorney General. The Defendants argue that the “Attorney General’s authority to
direct and control litigation on behalf of the Government of Guam . . . is necessarily limited by the
Governor’s supreme executive power and duty to ensure faithful execution of the law under the
Organic Act.” Mem. P. & A. Supp. Defs.’ Joint Mot. Strike and Dismiss at 5, ECF No. 6. The
Attorney General opposes the motion and maintains that the Government of Guam is properly
named as a plaintiff in this action because he has the authority under common law and Guam law
to bring this action on behalf of the Government of Guam without the express consent of the
Governor.
If joinder is improper, Rule 21 provides that “[o]n motion or on its own, the court may at
however, were not attached to the PAC.
8 In part II.B. of this Report and Recommendation, the below-signed judge finds that this
court lacks subject matter jurisdiction over the action and recommends dismissal pursuant to Rule
Rule 12(b)(1). If the Chief Judge agrees with said finding and recommendation, then there is no
need to address the merits of the Motion to Strike, and it should be denied as moot.
9 The Defendants also rely on Rule 12(f) in seeking to strike the Government of Guam as
a party. This rule provides that “[t]he court may strike from a pleading an insufficient defense or
any redundant, immaterial, impertinent, or scandalous matter.” Fed. R. Civ. P. 12(f). Reliance on
this rule is misplaced since Rule 12(f) “is the appropriate remedy for the elimination of redundant,
immaterial, impertinent, or scandalous matter in any pleading, and is the primary procedure for
objecting to an insufficient defense.” 5C C HARLES ALAN W RIGHT & ARTHUR R. M ILLER, FEDERAL
P RACTICE AND P ROCEDURE § 1380 (3d ed.). 	The court finds that this rule is not relevant for
purposes of striking a misjoined party.
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Government of Guam and Douglas B. Moylan v. Lourdes A. Leon Guerrero and GHURA Civil Case No. 24-00029
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any time, on just terms, add or drop a party.” Fed. R. Civ. P. 21. Because Rule 21 does not provide
any standard for determining whether a party is inappropriately joined, courts often “incorporate
standards to be found elsewhere,” including Rules 19 and 20. Pan Am World Airways, Inc. v. U.S.
Dist. Ct. for Cent. Dist. Cal., 523 F.2d 1073, 1079 (9th Cir. 1975). Rule 19 provides that joinder
of a party is required if, among other requirements, (1) “the court cannot accord complete relief
among existing parties” without the party’s presence, or (2) disposing of the action in the party’s
absence may “impair or impede the person’s ability to protect their interest” or “leave an existing
party subject to a substantial risk of incurring double, multiple, or otherwise inconsistent
obligations.” Fed. R. Civ. P. 19(a). Rule 20 permits persons to join as plaintiffs in a single action
if they assert claims arising out of the same occurrence and if those claims share a common question
of law or fact. Fed. R. Civ. P. 20(a)(1).
The standards under Rules 19 and 20, however, are not quite applicable to the issue before
the court. The court is not being asked to determine whether the Government of Guam’s presence
as a plaintiff is required or permissive. Rather, the Defendants argue that the Attorney General has
no authority, statutory or otherwise, to bring the instant action on behalf of the Government of
Guam against the Governor.
The court begins its analysis with a review of the Organic Act, 48 U.S.C. § 1421 et seq. ,
which “serves the function of a constitution for Guam.” Haeuser v. Dep’t of L., Gov’t of Guam,
97 F.3d 1152, 1156 (9th Cir. 1996). The Organic Act states that “[t]he government of Guam shall
consist of three branches, executive, legislative, and judicial[.]” 48 U.S.C. § 1421a. With regard
to the executive branch, the Organic Act provides in relevant part that “[t]he executive power of
Guam shall be vested in an executive officer whose official title shall be the ‘Governor of Guam’.”
48 U.S.C. § 1422. “The Governor shall have general supervision and control of all the departments,
bureaus, agencies, and other instrumentalities of the executive branch of the government of Guam”
and “shall be responsible for the faithful execution of the laws of Guam and the laws of the United
States applicable in Guam.” Id.
In contrast, the Organic Act simply states that “[t]he Attorney General of Guam shall be the
Chief Legal Officer of the Government of Guam.” 48 U.S.C. § 1421g(d). Aside from this general
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statement and providing options for appointing, electing and removing an Attorney General,
however, the Organic Act is silent as to the Attorney General’s powers and duties. In A.B. Won Pat
Guam Int’l Airport Auth. ex rel. Bd. of Directors v. Moylan, 10 the Supreme Court of Guam held that
“the Attorney General, as Chief Legal Officer, is charged with all the powers and duties pertaining
to the office at common law, except insofar as they have been expressly restricted or modified by
statute.” 2005 Guam 5, ¶ 67 (Guam Feb. 8, 2005).
Based on a plain reading of the Organic Act, “the Governor is the executive officer of the
territory and has authority over the Attorney General.” Santos v. Camacho, No. 04-CV-00006,
2006 WL 581251, at *5 (D. Guam Mar. 10, 2006).11 The Governor is vested with the responsibility
for the faithful execution of the laws of Guam, so she – not the Attorney General – has the ultimate
authority to speak on behalf of and make policy decisions for the Government of Guam. “The
Attorney General is [merely] the attorney representing his client, the Government of Guam[;]” he
“should not replace the Governor in setting policy whenever he disagrees with the Governor’s
positions.” Id. The Santos decision is consistent with the Supreme Court of Guam’s recent ruling
in In re Leon Guerrero, 2024 Guam 18 (Guam Dec. 31, 2024), where that court stated that “in the
10 In Moylan, the Guam International Airport Authority (“GIAA”) executed a legal services
contract with a private law firm and sent the contract to the Attorney General for his approval as
to legality and form as required under Guam law. 2005 Guam 5, ¶ 2 (Guam Feb. 8, 2005). When
the Attorney General refused, GIAA filed a Petition for Writ of Mandamus in the Superior Court
of Guam, which was granted by the trial court. Id. The appeal followed, and the Supreme Court
of Guam held that although the Attorney General was “charged with the common-law powers and
duties pertaining to the office,” such power and duties are “subject to increase, alteration, or
abridgment by the legislature[.]” Id. at ¶ 62 (quoting 7 AM. J UR. 2D Attorney General § 8 (2004)).
Accordingly, the Supreme Court of Guam found that Section 1108(a) and (c) of Title 12, Guam
Code Annotated, and Section 30109 of Title 5, Guam Code Annotated, were “valid exercises of
the Legislature’s power to remove the common law power” of the Attorney General to act as legal
counsel for GIAA. Id. at ¶ 63.
11 In Santos, a taxpayer brought suit against the then governor of Guam and other
government officials concerning Guam’s Earned Income Tax Credit (“EIC”). The issue before
the court was “whether the Governor of Guam or Guam’s Attorney General represents the
‘Government of Guam’ and which of the two, the Governor or the Attorney General, has final
settlement authority” over the matter. Id. at *1. The court ultimately found that the Governor had
“the final authority to both be the representative of the Government of Guam and to settle the issues
involved” with the Guam EIC. Id. at *7.
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event of a conflict of interest or disagreement over the public interest with a [client] line agency,
the Attorney General is required to appoint a special assistant attorney general to represent the
agency through his common law power.” Id. at ¶ 29.
The Attorney General contends that his common law powers and authority provided by
Guam law permit him to bring this legal action on behalf of the Government of Guam without the
express consent of the Governor. In support of this contention, the Attorney General first cites to
Section 30103, which provides in pertinent part that he “shall have . . . those common law powers
which include, but are not limited to, the right to bring suit to challenge laws which he believes to
be unconstitutional and to bring action on behalf of Guam representing the citizens as a whole for
redress of grievances which the citizens individually cannot achieve, unless expressly limited by
any law of Guam to the contrary.” 5 GCA § 30103.
The Attorney General’s reliance on Section 30103 is misplaced. 	While Guam law
recognizes the Attorney General’s power to bring an action on behalf of Guam representing the
citizens as a whole, Section 30103 does not expressly authorize suit on behalf of the Government
of Guam. This conclusion is consistent with the ruling in Santos, where the court recognized the
distinction between “representing the ‘Government’ as a distinct legal entity and interest” versus
“representing the people of Guam or a generalized ‘public’ interest.” Santos, 2006 WL 581251, at
*5. Section 30103 permits the Attorney General to sue on behalf of a generalized public interest,
not on behalf of the Government of Guam.
The Attorney General next cites to the case of State of Fla. ex rel. Shevin v. Exxon Corp.,
526 F.2d 266 (5th Cir. 1976), to support his argument that he has the common law power to bring
an action on behalf of the Government of Guam. In that case, the state attorney general initiated
an antitrust action against major oil companies to recover damages sustained by departments,
agencies, and political subdivisions of the state which had not affirmatively authorized the suit. Id.
at 267. The district court dismissed the action as beyond the attorney general’s authority, but the
Fifth Circuit determined that the attorney general retained his common law powers to initiate “suits
under federal law without specific authorization of the individual government entities who allegedly
have sustained the legal injuries asserted.” Id. at 274.
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As noted by the Defendants, however, Shevin is distinguishable from the case at bar. That
case involved a lawsuit initiated by the state attorney general against third parties where the interests
of the attorney general and the executive branch agencies were aligned. Id. at 273 (“[T]here is no
evidence in the record before us of any objection on the part of the government bodies which
allegedly have been injured by the defendants’ business practices.”). Here, however, the Attorney
General brought the instant action against the Governor of Guam on behalf of the Government of
Guam, over which she is vested with the power to control and supervise all executive branch
agencies, departments and instrumentalities. 	More importantly, the Governor objects to the
Attorney General’s actions and the legal position he has taken in this litigation purportedly on
behalf of the Government of Guam. Thus, the court finds that the Shevin decision does not bolster
the Attorney General’s assertion that he may bring suit on behalf of the Government of Guam even
when the Governor does not consent to such action.
Finally, the Attorney General relies on Att’y Gen. of Guam v. Gutierrez, 2011 Guam 10.12
There, the Supreme Court of Guam stated that “[s]ince the [Attorney General] pursuant to its
common law powers may institute, conduct and maintain prosecution to protect public interests,
it has standing to bring this suit to enforce proper spending by officers or employees of the
Executive Branch of the Government of Guam.” Id. at ¶ 40. The court notes, however, that while
the Attorney General brought that action for the return of public money, he did so in his own name;
the Government of Guam was not a party to that enforcement action.
This court recognizes that the Attorney General, as the Chief Legal Officer for the
Government of Guam, has common law powers that include initiating action on behalf of the people
and the public’s interest as provided for under Section 30103. Nonetheless, the Governor is vested
12 In Gutierrez, the Attorney General filed an action pursuant to the Enforcement of Proper
Government Spending Act, 5 GCA § 7101 et seq., against the former governor, an Executive
Branch employee and others involved in the settlement of a purported claim against the Guam
Memorial Hospital Authority. 2011 Guam 10 ¶¶ 1, 4-11. After dismissing the claims against most
of the defendants, the trial court found that the two remaining defendants violated their fiduciary
duties as officers or employees of the Executive Branch and spent money without proper authority
under Guam law, and the defendants appealed, arguing, among other things, that the Attorney
General did not have standing to file the lawsuit under Guam law. Id. at ¶¶ 13-15, 19.
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with ultimate responsibility for overseeing the executive branch and the responsibility for the
faithful execution of the laws of Guam and federal laws applicable to Guam. Accordingly, the
Governor holds the supreme executive power for the Government of Guam, and in the event of a
conflict or disagreement with the Attorney General over the Government of Guam’s interest, the
Attorney General must yield control over litigation involving the Government of Guam to the
Governor. Having reviewed the parties’ argument and relevant authority, the below-signed judge
recommends that the court grant the Defendant’s Motion to Strike the Government of Guam as a
plaintiff in this action. 13
B. 	Motion to Dismiss
The next motion before the court is the Defendants’ Motion to Dismiss this action. The
Defendants argue that dismissal is warranted under Rule 12(b)(1) because this court lacks subject
matter jurisdiction. Additionally, the Defendants seek dismissal pursuant to Rule 12(b)(6), asserting
that the various counts in the Complaint fail to state a claim upon which relief can be granted.
Because the court has an obligation to assure itself of its jurisdiction, the court will first address
dismissal under Rule 12(b)(1) before addressing the merits of the Defendants’ request for dismissal
under Rule 12(b)(6).
1. 	Federal Subject Matter Jurisdiction
Under Rule 12(b)(1), a party may move to dismiss based on the court’s lack of subject
matter jurisdiction. See Fed. R. Civ. P. 12(b)(1). “It is a fundamental principle that federal courts
are courts of limited jurisdiction.” 	Owen Equip. & Erection Co. v. Kroger, 437 U.S. 365, 374
(1978). 	A court must presume lack of jurisdiction until the plaintiff establishes otherwise.
Kokkonen v. Guardian Life Ins. Co. of America, 511 U.S. 375 (1994).
Here, the Complaint asserts that this court has jurisdiction “pursuant to 218 U.S.C.[]
§§ 1331 and 1367.” Compl. at ¶ 2, ECF No. 1. Section 1331 provides that “[t]he district courts
shall have original jurisdiction of all civil actions arising under the Constitution, laws, or treaties
13 If the Chief Judge agrees with the Report and Recommendation’s finding that this court
lacks subject matter jurisdiction as discussed infra, then there is no need to address the merits of
the Motion to Strike, which should then be deemed moot.
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of the United States.” 28 U.S.C. § 1331. A case “arises under” federal law either where federal law
creates the cause of action or where plaintiff’s right to relief necessarily depends on resolution of
a substantial question of federal law. Empire Healthchoice Assurance, Inc. v. McVeigh, 547 U.S.
677, 689-90 (2006). The supplemental jurisdiction statute provides in pertinent part that
in any civil action of which the district courts have original jurisdiction, the district
courts shall have supplemental jurisdiction over all other claims that are so related
to claims in the action within such original jurisdiction that they form part of the
same case or controversy under Article III of the United States Constitution.
28 U.S.C. § 1367(a). Supplemental jurisdiction cannot exist without original jurisdiction. Herman
Family Revocable Tr. v. Teddy Bear, 254 F .3d 802, 805 (9th Cir. 2001).
Thus, in order to determine whether there is federal question jurisdiction, the court must
examine the Complaint to determine whether “federal law creates the cause[s] of action” asserted
or whether the Attorney General’s “right to relief necessarily depends on the resolution of a
substantial question of federal law.”
2. 	Count I - Alleged Violation of Organic Act
Count I of the Complaint purports to allege a violation of the Organic Act. Count I asserts
that “the Governor will continue to unlawfully spend funds form the ARPA/SLFRF account in
violation of the separation of powers doctrine enshrined in the Congressionally-adopted Organic
Act in violation of the Legislature’s power to appropriate public money granted to the state by the
federal government.” 	Compl. at ¶ 17, ECF No. 1. 	The Complaint alleges “the Governor has
exercised the Legislature’s appropriation authority unlawfully with respect to these ARPA funds,
and that the Governor will continue to do so unless enjoined by this court.” Id. at ¶ 20. Count I
asks the court to resolve “the fundamental question as to whether the Governor has the power and
and authority to ignore the express requirements of the Organic Act.” Id.
In asserting that Count I fails to raise a federal question, the Defendants rely on this court’s
decision in L. Offs. of Phillips & Bordallo, P.C. v. Leon Guerrero, No. 22-CV-0020, 2023 WL
5075374 (D. Guam Aug. 9, 2023), where the court examined whether references to specific
provisions of the Organic Act in a petition formed the basis for federal question jurisdiction. In
discussing federal question jurisdiction, this court stated:
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Congress passed the Organic Act of Guam pursuant to the second clause of
Article IV, Section 3 of the Constitution, which is known as “the Territorial Clause.”
In determining whether laws passed by Congress pursuant to the Territorial Clause
are laws “of the United States,” courts have taken different approaches. 	The
Supreme Court of the Virgin Islands found that the Bill of Rights of its respective
Organic Act was not a law “of the United States” because it was enacted pursuant
to Article IV instead of Article I of the Constitution.
[I]t is well-established in the precedents of the Supreme Court of the
United States and the federal courts of appeal that whether Congress
enacts legislation pursuant to its Article I or Article IV powers is of
important constitutional significance, for while laws enacted by
Congress in its capacity as a national legislature pursuant to its
Article I powers are considered “laws of the United States,” laws
enacted by Congress through invocation of its Article IV powers are
not, but rather serve as laws of the territory, with Congress standing
in place of a state government.
Balboni v. Ranger Am. of the V.I., Inc., 70 V.I. 1048, 1071-72 (V.I. 2019). The
Supreme Court of the Virgin Islands explained further, “The Bill of Rights
provisions in the Revised Organic Act are local law rather than federal law, in that
though enacted by Congress, the protections apply only within the borders of the
Virgin Islands and were never designed to have general protection throughout the
United States.” Id. at 1090.
When Hawaii was still a territory and governed by its own Organic Act, the
federal district court for Hawaii found that a section of its Organic Act was not a law
“of the United States” because it concerned local policy and because it did not
concern “fundamental rights[.]”
. . . The cases agree that laws concerning local policy are not laws “of the United
States.”
Phillips & Bordallo, 2023 WL 5075374, at *4.
“[T]he Organic Act of Guam is a federal statute concerning only Guam.” Guam Soc. of
Obstetricians & Gynecologists v. Ada, 776 F. Supp. 1422, 1427 (D. Guam 1990) (emphasis in
original), aff’d, 962 F.2d 1366 (9th Cir. 1992), as amended (June 8, 1992), cert. denied, 506 U.S.
1011 (1992). Thus, although the Organic Act was passed by Congress, a provision of the Organic
Act which addresses a matter of purely local concern will be construed as local law and not a law
“of the United States” that would give rise to federal question jurisdiction. Phillips & Bordallo,
2023 WL 5075374, at *4-5.
Here, the Defendants argue that the Organic Act’s “provisions 	relating to local
appropriations are matters of local concern[.]” Mem. P. & A. Supp. Defs.’ Joint Mot. Strike and
Dismiss at 8, ECF No. 6. The court concurs. The specific provision of the Organic Act at issue
here provides: “Appropriations, except as otherwise provided in this chapter, and except such
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appropriations as shall be made from time to time by the Congress of the United States, shall be
made by the legislature.” 48 U.S.C. § 1423j(a). Whether the Governor violated this provision by
expending funds without the Guam Legislature first appropriating said funds is a matter of purely
local concern. Because Section 1423j(a) does not have general application throughout the United
States and concerns a matter of local policy, the court finds that this specific provision of the
Organic Act is not a law “of the United States” and cannot form the basis for federal question
jurisdiction.
The court notes that the Attorney General’s Opposition 14 fails to address the Defendants’
argument that Count I does not arise under federal law. The Attorney General never even discusses
the Phillips & Bordallo case. Based on his failure to address the argument, the court concludes that
the Attorney General has conceded this issue. See Pac. Dawn LLC v. Pritzker, 831 F.3d 1166, 1178
n.7 (9th Cir. 2016) (“But the plaintiffs did not raise that argument to the district court in their ...
opposition to the defendants’ motion for summary judgment, so the argument was waived.”); In re
Point Ctr. Fin., Inc., No. SACV 16-1336 DSF, 2016 WL 11723668, at *2 n.1 (C.D. Cal. Aug. 30,
2016) (“A party can waive an argument by failing to raise it in their opposition to a motion to
dismiss.”). Accordingly, the court finds that Count I fails to assert a claim that arises under federal
law.15
14 See Pls.’Mem. P. & A. Supp. of Resp. to Joint Mot. Strike and Dismiss, ECF No. 17.
This document shall be referred to as the “Attorney General’s Opposition.”
15 If the Chief Judge finds that Count I arises under federal law, the below-signed judge
would nonetheless find that dismissal is warranted under Rule 12(b)(6) for failure to state a claim.
“Dismissal for failure to state a claim is appropriate only if it appears beyond doubt that the
non-moving party can prove no set of facts in support of his claim which would entitle him to
relief.” Vasquez v. L.A. Cnty., 487 F.3d 1246, 1249 (9th Cir. 2007) (internal citations omitted).
Here, the ARPA funds at issue were funds from the U.S. Treasury given to Guam through an
appropriation of Congress for a specific purpose. “Where these appropriations or grants completely
fund a specific purpose without the need for local funding, and where the appropriation or grant
does not provide for local legislative control, there is no authority for the Guam Legislature to
assume the responsibility for reappropriating these funds.” Wong v. Camina, 2 Guam R. 132, 133
(D. Guam 1978). See also Story-Bernardo v. Gov’t of Guam, 2023 Guam 27 ¶ 46 (“The CARES
Act funding was a federal appropriation for a specific purpose, outside the control of the Guam
Legislature.”). Additionally, the Attorney General’s Opposition fails to address this argument, and
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3. 	Count II - Alleged Violation of ARPA
The subheading of Count II of the Complaint alleges a “[v]iolation of ARPA/SLFRF.”
Compl. at 7, ECF No. 1. 	But aside from quoting and referencing various regulations and
requirements, Count II does not contain any new factual allegations, 16 nor does it set forth any claim
for relief. Nevertheless, the Defendants seek dismissal of Count II and argue that ARPA does not
confer the Attorney General with a private right of action. Mem. P. & A. Supp. Defs.’ Joint Mot.
Strike and Dismiss at 11-12, ECF No. 6.
Essentially, the Defendants are arguing that the Attorney General lacks standing to assert
a claim under ARPA. The Ninth Circuit has held that a lack of statutory standing requires dismissal
for failure to state a claim under Rule 12(b)(6), but a lack of Article III standing requires dismissal
for lack of subject matter jurisdiction Rule 12(b)(1). Maya v. Centex Corp., 658 F.3d 1060, 1067
(9th Cir. 2011).
With regard to statutory standing, the Defendants have cited to a number of decisions
throughout the country which found that ARPA does not confer a private right of action. See Mem.
P. & A. Supp. Defs.’ Joint Mot. Strike and Dismiss at 11-12, ECF No. 6. The Ninth Circuit has not
directly addressed the issue, but the District of Oregon has stated that “ARPA does not provide a
private right of action.” Johnson v. HAF, No. 6:24-CV-01141-AA, 2024 WL 4057520, at *4 (D.
Or. Sept. 5, 2024) (citing Yaritz v. Internal Revenue Service, Case No. 23-cv-452 (PJS/LIB), 2023
WL 5756462, at *3 (D. Minn. April 26, 2023) (“[F]ederal district courts have interpreted that
neither the CARES Act, nor the CAA, nor the ARPA as providing for a private right of action.”
(collecting cases))). The Attorney General fails to address this argument in his Opposition, and
similar to the other issues which he failed to address, the court deems this issue to be waived. The
court finds that the Attorney General has failed to provide this court with any authority that ARPA
provides him with a private right of action. Accordingly, the court finds that the Attorney General
thus the court deems he has waived the issue. 	Accordingly, there can be no violation of the
Organic Act of Guam as alleged in Count I.
16 Paragraph 25 in Count II simply “re-allege[s] and incorporate[s]” paragraphs 1-24 of the
Complaint. Compl. at ¶ 25, ECF No. 1.
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lacks statutory standing to pursue Count II.
“Article III, § 2, of the Constitution restricts the federal ‘judicial Power’ to the resolution
of ‘Cases’ and ‘Controversies.’ That case-or-controversy requirement is satisfied only where a
plaintiff has standing.” Sprint Communications Co., L.P. v. APCC Servs., Inc., 554 U.S. 269, 273
(2008). “[T]o satisfy Article III’s standing requirements, a plaintiff must show (1) it has suffered
an ‘injury in fact’ that is (a) concrete and particularized and (b) actual or imminent, not conjectural
or hypothetical; (2) the injury is fairly traceable to the challenged action of the defendant; and (3)
it is likely, as opposed to merely speculative, that the injury will be redressed by a favorable
decision.” Friends of the Earth, Inc. v. Laidlaw Envtl. Servs., Inc., 528 U.S. 167, 180-81 (2000)
(citing Lujan v. Defenders of Wildlife, 504 U.S. 555, 560-61 (1992)). A failure to meet any one of
these three criteria constitutes a lack of Article III standing and requires dismissal for lack of subject
matter jurisdiction. Maya, 658 F.3d at 1067.
The court first examines whether the Attorney General has suffered an “injury in fact” that
is “concrete and particularized” and “actual or imminent.” Friends of Earth, 528 U.S. 180. With
regard to this issue, Supreme Court cases “have permitted pre-enforcement review under
circumstances that render the threatened enforcement sufficiently imminent.” Susan B. Anthony
List v. Driehaus, 573 U.S. 149, 159 (2014). The Supreme Court has “held that a plaintiff satisfies
the injury-in-fact requirement where he alleges ‘an intention to engage in a course of conduct
arguably affected with a constitutional interest, but proscribed by a statute, and there exists a
credible threat of prosecution thereunder.’” Id. (quoting Babbitt v. Farm Workers, 442 U.S. 289,
298 (1979)).
Here, the Attorney General asserts that he is bringing
a pre-enforcement challenge against the Governor and GHURA for their failure to
properly meet the requirements for the use of ARPA funds. Defendants’ failure to
meet those requirements put the Government of Guam at significant risk of an
enforcement action by the Federal Government for recoupment of ARPA funds
inappropriately appropriated and spent by Defendants.
Att’y General’s Opp’n at 11-12,17 ECF No. 17.
17 The internal page numbers in the Attorney General’s Opposition were positioned so low
on the page that they were obscured by the CM/ECF-generated footer. The corresponding pages
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The court finds that the Attorney General fails to satisfy the requirements to bring a pre-
enforcement challenge. First, the Attorney General has not alleged that he “intends to engage in a
course of conduct arguably affected with a constitutional interest.” Susan B. Anthony List, 573 U.S.
at 161. Rather, he alleges that the Defendants have used and intend to use ARPA funds for the
purpose of purchasing land and building a hospital. See Compl. at ¶¶ 5-11, ECF No. 1, and Att’y
General’s Opp’n at 12, ECF No. 17. The Attorney General challenges the Defendants’ course of
conduct – not his own intended future actions – as being in violation of the Organic Act, ARPA
and Guam laws. Accordingly, the Attorney General fails to satisfy the first requirement for a pre-
enforcement challenge.
The second requirement for a pre-enforcement challenge is for a plaintiff to show that his
intended future conduct is “arguably . . . proscribed by [the] statute” he intends to challenge.
Babbitt, 442 U.S. at 298. The Attorney General fails to satisfy this requirement. Again, he is not
challenging ARPA as applied to him or alleging that ARPA somehow impinges on his
constitutional rights. 	Instead, the Attorney General asserts that the Defendants’ use of funds
received through ARPA or the SLFRF program is proscribed by federal statutes and/or regulations
and that such actions by the Defendants may lead to enforcement actions by the U.S. Department
of Treasury. Even if the court were to accept as true the allegations in the Complaint, the court is
having difficulty concluding that the Complaint alleges the existence of any statute that proscribes
the Attorney General’s conduct or intended future conduct. Accordingly, the court finds that the
Attorney General failed to satisfy the second requirement for a pre-enforcement challenge.
Finally, the third requirement for a pre-enforcement challenge requires the plaintiff to
establish that “the threat of future enforcement of the . . . [proscribed] statute is substantial.” Susan
B. Anthony List, 573 U.S. at 164. Here, the Complaint fails to allege that the Defendants have
threatened to prosecute or bring an enforcement action against the Attorney General. The U.S.
Department of Treasury is vested with enforcing compliance with ARPA and its ensuing regulations
– not the Attorney General. Accordingly, the Attorney General has failed to establish the third
on the CM/ECF footer are pages 16-17.
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element for a pre-enforcement challenge.
The court finds that the Attorney General has failed to satisfy the injury-in-fact requirement
for Article III standing, and the court need not address the remaining two elements. A failure to
meet any one of the three criteria constitutes a lack of Article III standing and requires dismissal for
lack of subject matter jurisdiction. Maya, 658 F.3d at 1067. Assuming that Count II alleges a
violation of ARPA, a federal law, the court nonetheless finds that the Attorney General has failed
to establish that he has Article III standing to bring the purported pre-enforcement challenge.
Accordingly, the court recommends that Count II be dismissed for lack of subject matter jurisdiction
under Rule 12(b)(1).
4. 	Counts III-VIII - Alleged Violations of ARPA and Guam Laws
In Counts III through VIII of the Complaint, the Attorney General alleges the Defendants
violated ARPA by failing to maintain required records, by failing to do an environmental
assessment, and by failing to comply with various local laws (i.e., Guam law with regard to
condemnation of property, the Open Government Law, Guam contract law and GHURA’s enabling
statute). However, as discussed above in Count II, the Attorney General lacks Article III standing
to bring this pre-enforcement challenge and further lacks statutory standing because ARPA does
not provide him with a private right of action. Accordingly, to the extent that these causes of action
arise under federal law, they should nonetheless be dismissed for lack of subject matter jurisdiction
based on the Attorney General’s lack of standing.
Furthermore, Counts III through VIII only make passing and vague references to ARPA’s
provisions, however the gravamen of the allegations in Counts V through VIII are the purported
violations of Guam law. As this court noted in Phillips and Bordallo,
“[S]tate law claims cannot be alchemized into federal causes of action by incidental
reference” to federal law. 	Sparta Surgical Corp. v. Nat’l Ass’n of Securities
Dealers, Inc., 159 F.3d 1209, 1213 (9th Cir. 1998) (citing Easton v. Crossland
Mortgage Corp., 114 F.3d 979, 982 (9th Cir. 1997) (explaining that “the mere
reference of a federal statute in a pleading will not convert a state law claim into a
federal cause of action if the federal statute is not a necessary element of the state
law claim and no preemption exists.”)).
2003 WL 5075374, at *9.
“[F]ederal jurisdiction over a state law claim will lie if a federal issue is: (1) necessarily
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raised, (2) actually disputed, (3) substantial, and (4) capable of resolution in federal court without
disrupting the federal-state balance approved by Congress.” Gunn v. Minton, 568 U.S. 251, 258
(2013). Jurisdiction is proper “[w]here all four of these requirements are met” because in such a
case, “there is a ‘serious federal interest in claiming the advantages thought to be inherent in a
federal forum,’ which can be vindicated without disrupting Congress’s intended division of labor
between state and federal courts.” Id. (quoting Grable & Sons Metal Prods., Inc. v. Darue Eng’g
& Mfg., 545 U.S. 308, 313 (2005).
In essence, in Counts V through VIII, the Attorney General argues that the violations of
Guam’s laws also constitute a violation of the 2022 Final Rule, which requires compliance with
local laws and regulations. However, resolution of these claims does not necessarily implicate a
federal issue nor is the federal issue “substantial.” The application and interpretation of local law
substantially predominates the claims in the Complaint. These challenges to Guam law are more
appropriately addressed in the Superior Court of Guam because these causes of action address
matters of purely local concern. 	The court finds that Counts V through VIII do not arise under
federal law so as to provide this court with federal question jurisdiction.
5. 	Count IX - Alleged Violation of Guam Law
Finally, Count IX of the Complaint simply incorporates the previous allegations in the
Complaint and asserts the “variety of violations of Guam law . . . invalidate the actions of the
Governor and GHURA.” Compl. at ¶¶ 103-104, ECF No. 1. This cause of action is clearly brought
under Guam law.
Based on the analysis above, the Attorney General has failed to sustain his burden of
showing this court has federal question jurisdiction over Counts I through VIII. Without original
jurisdiction under Section 1331, this court cannot exercise supplemental jurisdiction over Count IX
or any of the other related counts that arise under Guam law. Herman Family Revocable Tr., 254
F.3d at 805 (“The statute’s plain language makes clear that supplemental jurisdiction may only be
invoked when the district court has a hook of original jurisdiction on which to hang it.”).
To the extent that any claims in the Complaint arise under federal law so as to bestow this
court with original jurisdiction, the court would nonetheless recommend that the Chief Judge not
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exercise supplemental jurisdiction over any of the causes of action that allege violations of Guam
law. Pursuant to Section 1367(c),
district courts may decline to exercise supplemental jurisdiction over a claim under
subsection (a) if –
(1) the claim raises a novel or complex issue of State law,
(2) the claim substantially predominates over the claim or claims over which
the district court has original jurisdiction,
(3) the district court has dismissed all claims over which it has original
jurisdiction, or
(4) in exceptional circumstances, there are other compelling reasons for
declining jurisdiction.
28 U.S.C. § 1367(c)(1) and (3).
Here, the court has recommended dismissal of Counts I through IV – the only causes of
action that could possibly confer this court with subject matter jurisdiction – so the court should
decline to exercise supplemental jurisdiction over the remaining claims. 28 U.S.C. §1367(c)(3).
Additionally, the challenges to Guam law, particularly with regard to Guam’s land condemnation
procedures and GHURA’s authority to condemn private property for the MMC Project raise novel
issues of local law, and the local courts of Guam are best-placed to address these statutory issues
dealing with matters of purely local concern. 28 U.S.C. §1367(c)(1). Finally, as discussed above,
the application and interpretation of local law substantially predominate the claims in the
Complaint, 28 U.S.C. § 1367(c)(2), such that this court should decline to exercise supplemental
jurisdiction over Count IX or any of the other related counts that arise under Guam law.
In conclusion, because this court lacks subject matter jurisdiction either because the causes
of action do not arise under federal law or because the Attorney General lacks standing to bring said
claims, the below-signed judge recommends that Motion to Dismiss be granted pursuant to
Rule 12(b)(1).18
C. 	Motion for Leave to Amend Complaint
Pursuant to Rule 15(a)(2) of the Federal Rules of Civil Procedure, the Attorney General
seeks leave to file the PAC, adding GPA, GWA, GEDA and the CCU as defendants in the instant
18 Because the below signed judge recommends dismissal under Rule 12(b)(1), there is no
need to address the merits of the Defendants’ remaining arguments for dismissal under
Rule 12(b)(6).
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action and purportedly bolstering the basis for federal question jurisdiction. Under Rule 15(a)(2)’s
liberal standard, a district court “should freely give leave [to amend] when justice so requires.” Fed.
R. Civ. P. 15(a)(2). A court, however, need not grant such leave where the amendment: (1) unduly
prejudices the opposing party; (2) is sought in bad faith; (3) produces undue delay in litigation; or
(4) is futile. Cafasso, U.S. ex rel. v. Gen. Dynamics C4 Sys., Inc., 637 F.3d 1047, 1058 (9th Cir.
2011) (citing Ascon Props., Inc. v. Mobil Oil Co., 866 F.2d 1149, 1160 (9th Cir.1989)).
Here, Defendants object to the PAC and assert that amendment should be denied for futility.
An amendment is futile “only if no set of facts can be proved under the amendment to the pleadings
that would constitute a valid and sufficient claim or defense.” Barahona v. Union Pac. R.R. Co.,
881 F.3d 1122, 1134 (9th Cir. 2018) (quoting Sweaney v. Ada Cty, 119 F.3d 1385, 1393 (9th Cir.
1997)). The standard for assessing whether a proposed amendment is futile is the same as the
standard imposed under Rule 12(b)(6) of the Federal Rules of Civil Procedure. 	See Miller v.
Rykoff-Sexton, Inc., 845 F.2d 209, 214 (9th Cir. 1988),19 overruled on other grounds by Ashcroft
v. Iqbal, 556 U.S. 662 (2009) (explaining that a motion for leave is futile where the proposed facts
to be included in a pleading would not constitute a valid and sufficient claim or defense).
Thus, the court must examine each cause of action in the PAC to determine whether the
alleged claim is futile.
1. 	PAC Count I - Alleged Violation of Organic Act
Count I of the PAC is similar to Count I of the original Complaint and essentially realleges
that the Governor (and those acting in concert with her) violated the Organic Act by encumbering
or committing ARPA funds for the MMC Project without an appropriation from the Guam
Legislature. Paragraph 56 in the PAC is new and asserts that the approximate $100 million in
ARPA funds “is not sufficient to build the MMC” project and that the Governor “is not legally
allowed to bind any future Governor or the People of Guam to a potential billion-dollar expenditure
19 The Miller case cites to 3 J. Moore, Moore's Federal Practice ¶ 15.08[4] (2d ed. 1974)
(proper test to be applied when determining the legal sufficiency of a proposed amendment is
identical to the one used when considering the sufficiency of a pleading challenged under Rule
12(b)(6)). Miller, 845 F.2d at 214.
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without express and explicit legislative approval and appropriation.” PAC at ¶ 56, ECF No. 20-1.
The paragraph further cites a Supreme Court of Guam case, Pangelinan v. Gutierrez, 2003
Guam 13, 20 to support the assertion that the Governor must obtain legislative approval and
appropriation. Id.
The addition of this new paragraph does not cure the infirmities discussed supra. As pled,
Count II of the PAC still only involves a matter of local concern or policy and does not allege a
cause of action that arises under federal law. Thus, Count I of the PAC does not confer this court
with federal question jurisdiction.
2. 	PAC Count II- Alleged Violation of ARPA/SLFRF
Count II of the PAC is basically identical to the original Count II but with the addition of
three new paragraphs. See PAC at ¶¶ 71-73, ECF No. 20-1. Most notably, paragraph 71 refers to
and quotes from a notice published by the U.S. Department of Treasury on March 25, 2025,
informing recipients of SLFRF awards that the agency “is committed to recouping funds that
recipient obligated or expended impermissibly, as well as to recapturing funds that they did not
obligate by the deadline.” PAC at ¶ 71, ECF No. 20-1. The notice further asserts that the U.S.
Department of Treasury will “follow standard debt collection policy and procedures” if the recipient
does not repay the amount owed by a specified date, with interest and penalties to accrue. 	Id.
Count II of the PAC further alleges that the IGA between DOA and GEDA requires compliance
with federal and local laws and that “GHURA violated several local laws, which in turn are
violations of ARPA and SLFRF.” Id. at ¶¶ 72-73.
These three additional paragraphs will not cure the defects discussed above with regard to
Count II of the original Complaint. The Attorney General still has not cited to any authority that
provides him with a private right of action under ARPA. Proposed Count II still fails to state a
claim under federal law and does not seek any relief. More importantly, Count II of the PAC fails
20 In this case, the Supreme Court of Guam found that a contract entered into by the then
governor violated the Organic Act, 48 U.S.C. § 1423j, and Guam law (5 GCA § 22401).
Pangelinan v. Gutierrez, 2003 Guam 13, ¶ 1 (Guam June 27, 2003), opinion vacated in part on
reh’g, 2004 Guam 16 (Guam Sept. 9, 2004).
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to establish the necessary elements for Article III standing. Thus, amended Count II would still be
subject to dismissal as discussed supra.
3. 	PAC Count III - Alleged Violation of ARPA/SLFRF
Proposed Count III is identical to Count III in the Complaint. Proposed Count III still only
makes passing and vague references to records compliance provisions of ARPA as “required by
Title 2 of the Code of Federal Regulations.” PAC at ¶ 75, ECF No. 20-1. For the same reasons
discussed above, the Attorney General lacks statutory and Article III standing to assert a cause of
action under ARPA, and Count III, as pled, is subject to dismissal.
4. 	PAC Count IV- Alleged Violation of ARPA/SLFRF
Count IV in the PAC mirrors the original Count IV but adds a new paragraph alleging that
“the Governor and the conspirator defendants knew or should have known of the environmental
requirements to proceed with the MMC” as evidenced by the inclusion of almost $5.5 million in
“civil engineering” costs for environmental studies and review contained in the IGA. PAC at ¶ 84,
ECF No. 20-1.
But as already discussed, proposed Count IV fails for the same reasons set forth supra with
regard to the original Count IV. Despite the proposed amendment, the Attorney General still lacks
statutory and Article III standing to assert a cause of action under ARPA, and Count III is subject
to dismissal for lack of subject matter jurisdiction.
5. 	PAC Count V- Alleged Violation of ARPA/SLFRF and HCDA
Count V of the PAC is a new cause of action. Therein, the Attorney General asserts that
GHURA has failed to provide him with any records to ensure that it is compliant with ARPA and
the Housing and Community Development Act of 1974 (the “HCDA”). PAC at ¶ 86, ECF No. 20-
1. 	Proposed Count V further alleges that “Title I projects are required to supplement and not
support other . . . government funds,” and because the Governor has not sought “an appropriation
from the Guam Legislature” to fund the MMC Project, said project is one that is “wholly funded
by the U.S. Government thereby violating the supplement and not supplant requirements for Title
I projects.” Id. at ¶¶ 87-90.
///
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Even if the court accepted these assertions as true,21 the Attorney General still has not shown
that he has standing to enforce any alleged violation of ARPA, as discussed previously by the court,
or the HCDA. Federal law provides that in the event the Secretary of the Department of Housing
and Urban Development (“HUD”) “finds . . . that a recipient of assistance . . . has failed to comply
substantially with any provision [of the community development program],” the Secretary has the
option of terminating, reducing or limiting payments to the recipient. 42 U.S.C. § 5311(a). The law
further provides that the Secretary of HUD may “refer the matter to the Attorney General of the
United States with a recommendation that an appropriate civil action be instituted.” 42 U.S.C.
§ 5311(b)(1) (emphasis added). Based on a plain reading of the statute, the Attorney General is not
authorized to bring an enforcement action on behalf of HUD against the Defendants. The Attorney
General failed to address the issue of lack of standing under the HCDA in his Reply to the
Defendants’ opposition, and thus the issue is waived.22
Because the Attorney General lacks standing, this court lacks subject matter jurisdiction
over the claim and proposed Count V would be subject to dismissal.
6. 	PAC Count VI- Alleged Violation of ARPA and Guam Law
Proposed Count VI is similar to Count V of the Complaint, but Proposed Count VI includes
additional paragraphs alleging among other things that (1) the MMC Project “does not qualify as
a ‘housing project’” under Guam law, (2) Guam law requires GHURA to submit a report of suitable
housing projects to the Guam Legislature, (3) while the Guam Legislature passed a law for the
21 The Defendants contest these allegations and further argue that the claim is not ripe for
review. There is no need to address these arguments since the court finds that the Attorney General
lacks standing to bring this claim.
22 The Attorney General complains that he “did not have an adequate opportunity to
respond” to the arguments raised in the Defendants’ opposition to his Motion for Leave to File an
Amended Complaint because the court denied his request for a two-week extension to file his
reply. See Att’y General’s Reply to Defs.’ Opp’n to Mot. Leave to File Am. Compl. at 4, ECF
No. 32 (the “Attorney General’s Reply”). The court finds no merit to this argument. Many of the
arguments raised in the Defendants’ opposition to the Motion for Leave to File an Amended
Complaint simply incorporated by reference their prior arguments raised in the Motion to Dismiss.
Thus, the Attorney General was well aware of the bases for the Defendants’ objections to his
asserted claims. Despite this, the Attorney General’s Reply failed to address the issue of standing.
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building of a new hospital, said law “[did] not plan or provide for any condemnation or
development by GHURA” but instead provided “for the leasing of land and development of land
for the public hospital,” and (4) GHURA exceed its statutory authority under Guam law to condemn
property for the MMC Project. PAC at ¶¶ 101-110, ECF No. 20-1.
Based on a plain reading of proposed Count VI, the Attorney General asserts that GHURA’s
alleged violations of various Guam laws also form the basis for an ARPA violation because ARPA
requires that recipients comply with local laws. But as was already discussed above, ARPA does
not create a private right of action, and the Attorney General has no standing to enforce any alleged
violation of ARPA. Even if the Attorney General were to overcome the standing issue, proposed
Count VI still does not arise under federal law, and the scant reference to ARPA in proposed Count
VI does not convert it to a federal cause of action. At the core of this claim are various alleged
violations of Guam law, not federal law. The resolution of this claim primarily requires application
and interpretation of local law, which should be resolved in the Superior Court of Guam.
Accordingly, the court finds that proposed Count VI fails to provide this court with subject matter
jurisdiction.
7. 	PAC Count VII - Alleged Violation of ARPA and Open Government Law
Proposed Count VII is identical to the original Count VI alleged in the Complaint. The
PAC’s Count VII generally asserts that GHURA failed to comply with Guam’s Open Government
Law when its board met to consider a resolution authorizing GHURA to accept a loan from the
Governor for up to $10 million for community development projects. As discussed above, ARPA
does not vest the Attorney General with a private right of action. Additionally, this cause of action,
as pled, does not implicate a federal issue. Rather, the crux of the claim predominately involves
application and interpretation of Guam laws, which are more appropriately addressed in the
Superior Court of Guam, not this court, which is a court of limited jurisdiction. Consistent with the
discussion above, the court finds that proposed Count VII does not arise under federal law, and the
court lacks subject matter jurisdiction over the claim.
8. 	PAC Count VIII - Alleged Violation of ARPA and Guam Contract Laws
The allegations in proposed Count VIII are substantially identical to Count VII in that both
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allege that the loan contracts between the Governor and GHURA violate Guam law because they
were not submitted to the Attorney General for his approval, as required by Section 22601 of
Title 5, Guam Code Annotated. Proposed Count VIII also includes a conclusory assertion23 that
the loan contracts also violate Section 22602 of Title 5, Guam Code Annotated.24
Consistent with its earlier ruling, to the extent that proposed Count VIII asserts a claim
under ARPA, the Attorney General has failed to establish that he has a private right of action to
assert such claim and also lacks Article III standing. 	Additionally, resolution of proposed
Count VIII does not necessarily implicate a federal issue. The essence of proposed Count VIII are
alleged violations of Guam law, and the Guam local courts are best suited for addressing matters
arising under Guam law. The court finds that proposed Count VIII does not arise under federal law.
9. 	PAC Count IX - Alleged Violation of ARPA and Guam Law
Count IX of the PAC is identical to Count VIII of the original Complaint. 	Proposed
Count IX essentially alleges that GEDA, not GHURA, was vested by the Legislature with authority
to “acquire, construct, and provide for hospital facilities to serve the general public,” that GEDA
cannot transfer such power to GHURA or an autonomous agency, that GHURA has no authority
23 While Paragraph 142 quotes to Section 22602, proposed Count VIII does not contain any
other factual allegation to show how Section 22602 was violated. There is no factual allegation
in the PAC that the Defendants did not submit a copy of the loan contracts to DOA for filing,
recording and registration, nor is there any allegation that DOA failed to enroll said loan contracts
on the public register.
24 In its entirety, Section 22602 provides:
A copy of any contract under which a payment may be made shall be submitted to
the Department of Administration for filing, recording and registration. 	The
Director of Administration shall cause a register to be kept of all such contracts
with subsequent amendments, which register shall be open and available for public
inspection during normal working hours. Certified copies of such contract with
subsequent amendments may be obtained after paying the fee therefor set out in of
this Chapter. No such contracts or amendments thereto shall be deemed valid or
enforceable until 	it 	shall 	have 	been 	so 	submitted 	to 	the 	Department 	of
Administration and enrolled on the public register.
5 GCA § 22602.
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to “acquire, construct, and provide for hospital facilities,” and that GHURA’s actions are therefore
void. 	PAG at ¶¶ 96, 98-99 and 101-102. 	As noted above with regard to original Count VIII,
resolution of proposed Count IX does not implicate a federal issue. 	Instead, application and
interpretation of local laws substantially predominate the allegation in proposed Count IX, which
are more appropriately addressed in the local courts of Guam, not the federal court. Consistent with
its ruling above, the court finds that proposed Count IX does not arise under federal law so as to
confer this court with federal question jurisdiction.
10. PAC Count X - Alleged Violation of Guam Law
The PAC’s Count X is similar to the original Count IX of the Complaint but includes the
addition of six new paragraphs. 	See PAC at ¶¶ 156-61, ECF No. 20-1. 	In essence, proposed
Count X asserts that the Governor and the conspirator defendants were aware that the land for the
MMC Project was acquired in violation of Guam law, id. at ¶¶ 156-57, that in taking actions under
the IGA and subgrant agreements, the conspirator defendants have violated federal and Guam law
with regard to the need for environmental reviews and record keeping, id. at ¶ 158, and that such
action have exposed the Government of Guam to federal clawback proceedings. Id. at ¶¶ 159-160.
The addition of the six new paragraphs do not cure the defects discussed above with regard
to Count IX of the original Complaint. By its very terms, proposed Count X does not arise under
federal law but instead is brought under the laws of Guam. Based on the discussion above, this
court has found that supplemental jurisdiction is lacking because none of the Complaint’s asserted
causes of action arise under federal law, and the same is true with regard to the PAC. To the extent
that the PAC asserts a claim that arises under federal law, the court recommends that the Chief
Judge decline to exercise supplemental jurisdiction for the reasons set forth above.
11. PAC Counts XI and XII -Alleged Violations of Organic Act
Counts XI and XII of the PAC are new. 	Count XI asserts that GPA has sought the
appointment of Special Attorneys General, and the PAC asserts that such appointment would
violate the Organic Act. PAC at ¶¶ 164-65, ECF No. 20-1. In Count XII, the PAC asserts that the
CCU is “an illegal, inorganic and unconstitutional body,” and as such, the CCU “deprives the
Governor of Guam” of her “Organic Act authority to supervise the government and to appoint the
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heads of executive branch agencies as part of the Governor’s cabinet.” Id. at ¶¶ 169-70. Proposed
Count XII further asserts that “the actions taken by the CCU, or by the GPA or the GWA at the
direction or authorization of the CCU, are also illegal, inorganic and void ab initio[,]” including the
obligation and expenditure of ARPA/SLFRF funds as set forth in the subgrant agreements with
GEDA. id. at ¶¶ 171-72.
Proposed Counts XI and XII suffer from the same deficiency discussed supra with regard
to Count I. As pled, these causes of action do not arise under federal law so as to confer this court
with federal question jurisdiction. While the Organic Act is referenced, the claims allege matters
of purely local concern. Construing all facts in favor of the Attorney General, he is using proposed
Count XI to challenge the Supreme Court of Guam’s decision in In re Leon Guerrero, 2024 Guam
18 (Guam Dec. 31, 2024), where that court stated that it was “well settled that the Attorney General
must conform his conduct to that prescribed by the rules of professional ethics,” and that “in the
event of a conflict of interest or disagreement over the public interest with a [client] line agency,
the Attorney General is required to appoint a special assistant attorney general to represent the
agency through his common law power.” Id. at ¶¶ 13 and 29. This appears to be an improper
appeal of the In re Leon Guerrero decision. Whether a conflict of interest exists so as to warrant
the appointment of a Special Attorney General is a matter concerning local issues and policies and
is best left to the local courts to handle.
Count XII, which asks the court to determine whether the Guam law that created the CCU
violates the Governor’s Organic Act powers, also does not arise under federal law because it
involves matters of local concern. The court also has serious concerns about whether the Attorney
General has standing to raise such a challenge on behalf of the Governor, whose authority is
allegedly being usurped.
Because proposed Counts XI and XII do not confer this court with federal question
jurisdiction since they assert only local law claims and would not survive in this court absent the
court’s exercise of supplemental jurisdiction (which the below-signed judge has recommended the
Chief Judge not exercise, see supra), the court finds that addition of these causes of action would
be futile.
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Having reviewed the PAC in its entirety, the court concludes that amendment would be
futile because the PAC still fails to establish that this court has original jurisdiction over any of the
asserted claims or that the Attorney General has standing, both statutory and under Article III, to
assert claims under ARPA or the HCDA. Without original jurisdiction, this court cannot exercise
supplemental jurisdiction over the claims arising under Guam law. Moreover, even if the Chief
Judge found that this court has federal question jurisdiction over one or more claims in the PAC,
the below-signed judge recommends that the court decline to exercise supplemental jurisdiction
over the local law causes of action. Most, if not all, of the revised causes of action in the PAC
primarily involve matters of local concern that require application and interpretation of Guam law,
and where issues of Guam law predominate over any purported federal claim. Accordingly, said
matters should be resolved in the Superior Court of Guam.
D. 	Motions to Consolidate
The last motions before the court are the Attorney General’s two Motions to Consolidate.
See ECF Nos. 21 and 35. The Attorney General requests that 25-CV-00029 and 25-CV-00041 be
consolidated with the instant action, asserting that the three cases involve common questions of law
and fact with regard to the planning and development of the MMC Project.
Because the Attorney General has failed to meet his burden of establishing that the claims
in the Complaint and the PAC arise under federal law, the court finds that it lacks subject matter
jurisdiction over this action and this case should be dismissed. Accordingly, the court recommends
that the Motions to Consolidate this case with 25-CV-00029 and 25-CV-00041 be denied.
III. 	CONCLUSION
Based on the above analysis, the court finds that it lacks subject matter jurisdiction because
federal law does not create the causes of action asserted in the Complaint and the PAC, nor is the
Attorney General’s right to relief necessarily dependent on the resolution of a substantial question
of federal law. 	Additionally, because this court lacks original jurisdiction, it may not exercise
supplemental jurisdiction over the cause of action that arise under purely local law. Accordingly,
///
///
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the court recommends that the Chief Judge (1) grant the Defendants’ Motion to Dismiss, (2) deny
the Attorney General’s Motion for Leave to File an Amended Complaint, (3) deny the Attorney
General’s Motions to Consolidate and (4) deny the Defendants’ Motion to Strike as moot.
IT IS SO RECOMMENDED.
NOTICE
Failure to file written objections to this Report and Recommendation within
fourteen (14) days from the date of its service shall bar an aggrieved party
from attacking such Report and Recommendation before the assigned
United States District Judge. 28 U.S.C. § 636(b)(1)(B).
/s/ 0LFKDHO - %RUGDOOR
U.S. Magistrate Judge
Dated: Apr 07, 2026
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