[00:00:00] Speaker 01: Half a day may please the court. [00:00:02] Speaker 01: My name is Jordan Pauloon and I'm joined by my co-counsel Sandra Cruz Miller who was on the brief for this case as well. [00:00:08] Speaker 01: I will reserve about four minutes for rebuttal. [00:00:11] Speaker 01: The district court's denial of qualified immunity for former director Daphne Shimizu and now director and former deputy director Marie Lozama must be reversed. [00:00:23] Speaker 01: First, the district court misconstrued the facts that were pled in plaintiff's complaint [00:00:27] Speaker 01: in prescribing the taxpayers' actions to DRT when it came to certain settlement actions. [00:00:33] Speaker 02: Can I interrupt you for a minute? [00:00:34] Speaker 01: Yes. [00:00:34] Speaker 02: How much is left of this case given the decision with respect to Titan in the Guam courts? [00:00:41] Speaker 01: I don't think that there's much left of this case given the decision from Titan, which was actually done by the Superior Court of Guam in response to a partial lift of the automatic stay in bankruptcy, because Titan entered into bankruptcy [00:00:57] Speaker 01: and then the award in the superior court was actually done at the direction of the bankruptcy court who said go and file a motion for award over the money that was in bankruptcy. [00:01:06] Speaker 05: Can I ask a follow-up question? [00:01:08] Speaker 05: The Superior Court, I think it's a judgment entered in the Superior Court, is that right? [00:01:11] Speaker 01: The judgment in the Titan case. [00:01:13] Speaker 05: Right, for $600,000. [00:01:15] Speaker 05: Is there to be more or is that, does that resolve that claim? [00:01:20] Speaker 01: I don't think that there was a $600,000 judgment from the Superior Court because what happened is there were proceedings ongoing and Titan [00:01:27] Speaker 01: declared bankruptcy. [00:01:28] Speaker 01: So what you get is a judgment. [00:01:29] Speaker 05: That's the part we know. [00:01:30] Speaker 05: Can you just tell us, going back to Judge Fletcher's question, what's left? [00:01:35] Speaker 05: Where are they now? [00:01:36] Speaker 01: What's left is they've been discharged from bankruptcy, and there's no further proceedings in the Superior Court of Guam to determine the rights of the parties. [00:01:43] Speaker 01: The whistleblower in that case was awarded 30% of the proceeds, which is the maximum allowable under this bill. [00:01:50] Speaker 05: Is it 30% of 600,000? [00:01:51] Speaker 01: 30% of 600,000 because it's 30% of sums collected. [00:01:54] Speaker 05: That answers that question. [00:01:55] Speaker 05: Yes. [00:01:57] Speaker 05: that he was concerned about, and what's the, well, we'll ask opposing counsel, too, but what's remaining of the request for injunctive relief? [00:02:05] Speaker 01: The request for injunctive relief, I think, is just broadly as to all of his pending claims, which I think is one of the issues here related to injunctive relief and the interpretations of the statute. [00:02:16] Speaker 01: I think he has at least two cases ongoing still in the Superior Court of Guam. [00:02:20] Speaker 05: related to those two things in which he may still be seeking injunctive relief as to the... You're understanding that there's a request for injunctive relief to prevent the state from doing in those cases what it did in this case? [00:02:31] Speaker 05: Is that your understanding? [00:02:33] Speaker 01: As best as I can discern it, yes, that's my understanding. [00:02:35] Speaker 04: Okay. [00:02:36] Speaker 04: Thanks. [00:02:36] Speaker 04: I think you started by answering Judge Fletcher's question as there's not much left in this case, but I think going directly to the focus order that was issued by this court, is this case moot? [00:02:50] Speaker 04: What is your position on that question? [00:02:53] Speaker 01: I actually never think that the federal court should have had this case in the first place. [00:03:00] Speaker 04: That's not really my question. [00:03:01] Speaker 01: But on the mootness, I think by and large it's moot because if the district court found that there was a case because of an inadequate state remedy and we can see that he has gone to the Superior Court of Guam and gotten a remedy, it's not inadequate. [00:03:16] Speaker 04: I think the question is, isn't there still a claim, if he has a due process claim, and in fact DRT [00:03:28] Speaker 04: failed to provide notice of its settlement and the collection of certain proceeds that it didn't pay until and unless there was an order filed by the bankruptcy court and the superior court, isn't there still some part of that due process claim that is before us properly and that is not moot? [00:03:47] Speaker 01: Potentially on the injunctive relief, not on the qualified immunity question, because what this appeal really is over is over the denial of qualified immunity to [00:03:55] Speaker 01: the two individual directors. [00:03:59] Speaker 04: Well, qualified immunity is not relevant unless there is an underlying claim for a constitutional violation, which is a due process. [00:04:06] Speaker 01: Yes, and I agree. [00:04:07] Speaker 01: And I actually don't think that there's a due process violation, whether or not there's a judgment down there. [00:04:13] Speaker 04: You're arguing that on the merits, so that's not your position with respect to the case being moved. [00:04:17] Speaker 01: As to the case being moved, I think there are strong arguments for it, but I do think he has other ongoing proceedings in which he is seeking the district court's intervention in the Carson case and the Per March case that I believe are still ongoing in the Superior Court. [00:04:30] Speaker 05: And I think those are the two cases that you were referring to a minute ago in which you said your understanding is that what he wants is an order, conjunctive relief, [00:04:41] Speaker 05: that prevents the state or Guam from doing in those cases what it did in this case. [00:04:45] Speaker 05: That's your understanding. [00:04:46] Speaker 01: That's my understanding of his argument. [00:04:50] Speaker 01: That said, when it comes to the actual statute, I think the actual whistle, when it comes to the qualified immunity question and ultimately the underlying merits of the constitutional claim, the whistleblower statute is anything but clear, obvious, or well settled. [00:05:03] Speaker 01: I think the meaning of the Guam whistleblower statute is subject to ongoing litigation and debate in the same way that the Federal False Claims Act is [00:05:11] Speaker 04: What specifically are you referring to when you say that? [00:05:14] Speaker 01: So one of the things here is that the allegation, one of the allegations in the complaint is that the government defendants had at least entered into settlement negotiations with a key TAM defendant in cases down below. [00:05:29] Speaker 01: And that's part of what he complains about is the secret settlement negotiations. [00:05:32] Speaker 01: In his complaint, it's very tenuous as to whether he even adequately pleads that a settlement has actually been reached. [00:05:38] Speaker 01: What he says is that, [00:05:40] Speaker 01: offering compromise was received from the from the taxpayer the district court actually turns that around and says that [00:05:48] Speaker 01: the Department of Revenue and Taxation gave that. [00:05:51] Speaker 01: But if you actually look at the statute, paragraph B of 5GCA 37203, it actually reserves settlement rights to the government, not to the key time reliever. [00:06:01] Speaker 01: And that paragraph. [00:06:02] Speaker 05: Council, could I jump in here? [00:06:03] Speaker 05: Yes. [00:06:04] Speaker 05: But what about E, the same statute, 37203? [00:06:08] Speaker 05: It seems to me it expressly says, contrary to your position that the statute is vague, it says the government of Guam [00:06:15] Speaker 05: may elect to pursue its claim through any alternate remedy available to the government of Guam. [00:06:20] Speaker 05: And then it says including, and it goes on to the different kinds of proceedings that it can pursue. [00:06:26] Speaker 01: Yeah, so it talks about some of the types of proceedings such as civil monetary penalties. [00:06:30] Speaker 01: So there are four rights in the statute if you look at it. [00:06:33] Speaker 05: It starts by saying the government of Guam may elect to pursue its claim through any alternate remedy available to the government of Guam. [00:06:39] Speaker 05: And then it says including, and it lists some. [00:06:42] Speaker 05: So what's vague about that? [00:06:44] Speaker 01: I don't think that there's any vague about anything vague about that particular sentence. [00:06:48] Speaker 01: What I think happens is when do, when is the key Tamra later entitled to information or participation in the case. [00:06:56] Speaker 01: And that's where I think it's actually quite broad with uncertainty. [00:06:59] Speaker 04: Let me ask you this. [00:07:00] Speaker 04: You're, I think what you're arguing is that it's unclear whether or not there is a property interest that is created by the statute in which [00:07:12] Speaker 04: the taxpayer has a right, okay? [00:07:16] Speaker 04: So let's set that aside for a moment and talk about the right to the proceeds. [00:07:22] Speaker 04: What is your argument with respect to, I think it is very clear that there is a right to the proceeds under the KETAM statute. [00:07:31] Speaker 04: So if we're looking at that as opposed to sort of a property interest in the [00:07:36] Speaker 04: lawsuit itself, what's your what's your best argument as to why that isn't clearly established? [00:07:41] Speaker 01: Yes. [00:07:42] Speaker 01: So I think the first thing is the tax proceeds themselves belong to the government. [00:07:45] Speaker 01: When it comes to the key TAM relators claim, they may eventually have a claim for a proceed for a portion of the proceeds that are actually collected by the government, depending on the circumstances, up to 30%. [00:07:59] Speaker 04: Didn't that happen here? [00:08:01] Speaker 04: Wasn't there a settlement that the government collected? [00:08:05] Speaker 04: from the companies? [00:08:08] Speaker 01: No. [00:08:09] Speaker 01: What happened here was a key tam lawsuit was filed and the government was going through the normal process of [00:08:16] Speaker 01: dealing with taxes. [00:08:18] Speaker 01: The taxpayer actually shows up at the regular collections window and turns over a $600,000 check along with an offer in compromise form filled out. [00:08:28] Speaker 01: That was not solicited by the government. [00:08:30] Speaker 04: I'm not sure that that's what the testimony that I've read in the record indicates. [00:08:35] Speaker 04: As I understand in the bankruptcy proceeding, there was actual testimony from an executive at Titan that indicated that they were approached by DRT [00:08:46] Speaker 04: to engage in settlement negotiations to resolve the outstanding payment of taxes. [00:08:53] Speaker 01: I read the testimony differently looking at what's attached to the complaint, in the sense that they came to DRT first, and then there were some discussions with the DRT workers about how they're going to take a check and maintain it. [00:09:06] Speaker 01: But it was actually in the testimony of Mr. Antonower-Cruz in Exhibit G to the complaint that [00:09:16] Speaker 05: that he had given it to and it hadn't even been accepted by the offering compromise, hadn't even been accepted by the Department of Revenue and Taxation. [00:09:37] Speaker 05: And it seems to be, we can't figure out what's left because he's entitled to the payment. [00:09:42] Speaker 05: That's all been resolved now. [00:09:43] Speaker 01: Yes, and he got the payment. [00:09:45] Speaker 05: Pursuant to the Superior Court order, so what's left of Titan? [00:09:49] Speaker 01: Nothing. [00:09:50] Speaker 01: It's been discharged in bankruptcy, and he got his money. [00:09:53] Speaker 01: I think the only thing that may be left below that's not in the qualified immunity question is maybe his claims for injunctive relief related to the other cases to prevent us from not doing what we did before. [00:10:06] Speaker 01: In further proceedings below, we're gonna get back into abstention and other questions. [00:10:10] Speaker 01: When it comes to the qualified immunity question, I don't think it's clear that- Your time's running, so I wanna make sure I get a question in. [00:10:15] Speaker 02: So let's assume we've got ongoing cases or possibility of claims with respect to Carson and Permarch. [00:10:21] Speaker 02: Those are the other two. [00:10:23] Speaker 02: They're mentioned in the complaint, and those two are in slightly different stages. [00:10:26] Speaker 02: I get that. [00:10:27] Speaker 02: I wanna get to the legal question as to what constitutes a property right such as would support a due process claim [00:10:36] Speaker 02: And I'm particularly interested in whether or not [00:10:38] Speaker 02: there is a property right, not just in the statutory award. [00:10:42] Speaker 02: I think that's easy. [00:10:44] Speaker 02: Is there a property right with respect to rights to conduct the action itself? [00:10:50] Speaker 02: And I'm particularly interested in the significance of the sentence written by Justice Scalia in the Vermont case where he says the statute, and I understand this is an analogous statute because it's the federal statute rather than the Guam statute, the statute gives the relator himself an interest in the lawsuit. [00:11:09] Speaker 02: So not just an interest in the outcome of the lawsuit, but an interest in the lawsuit. [00:11:14] Speaker 02: Why is there no property right in the lawsuit? [00:11:18] Speaker 01: Because as the Supreme Court ascribed in Polanski, these things are to vindicate the interests of the government. [00:11:25] Speaker 01: And if you look at the statute, there are four rights that are reserved to the government. [00:11:29] Speaker 01: to settle, approve of any settlements reached by the relator, to dismiss notwithstanding the objections of the relator, and to pursue alternate remedies. [00:11:36] Speaker 01: The ultimate claim here ensued, the main objectives of it belong to the government. [00:11:41] Speaker 04: This is really a private attorney general statute where they- The whistleblower act here, which is different than the federal statute, very explicitly says that if the state does not intervene, the relator has the right to bring the Ketam suit and the government may not later intervene. [00:11:59] Speaker 04: That's a very clear statement. [00:12:01] Speaker 04: So how is this not type of explicitly mandatory language that creates a protected property interest? [00:12:07] Speaker 01: Because if you look at that paragraph B about settlement and dismissal, that is not conditional on whether the government takes the case at the beginning or not. [00:12:14] Speaker 01: The government maintains the right to settle and dismiss irrespective of whether they took the case. [00:12:20] Speaker 05: That goes back to the other statute that we were talking about. [00:12:23] Speaker 05: It doesn't say settle. [00:12:24] Speaker 05: It says it can pursue other avenues specifically. [00:12:27] Speaker 05: But you have a problem because [00:12:29] Speaker 05: To Judge Fletcher's point, we're not dealing with the False Claims Act. [00:12:32] Speaker 05: We're dealing with one that's a little bit different, and as Judge Desai just pointed out, after this 60-day waiting period, the government can't get back in here, and that only makes your problem, I think, more difficult if you consider what Judge Alia's statement about the False Claims Act. [00:12:47] Speaker 01: And I think those are great questions for the Guam courts. [00:12:53] Speaker 01: I don't think it makes a 1983 claim. [00:12:56] Speaker 05: And that's really what it is. [00:13:01] Speaker 05: Yes. [00:13:02] Speaker 05: It does not permit the government to come back in. [00:13:20] Speaker 01: and got paid on the Titan case. [00:13:22] Speaker 04: And perhaps provide notice. [00:13:23] Speaker 04: Sorry. [00:13:24] Speaker 01: Not at all. [00:13:25] Speaker 01: But the notice in the same rights in the settlement, if you look at paragraph B, when dealing with settlement, which is specific to settlement, his same rights vest when a settlement has been achieved. [00:13:33] Speaker 01: And then we have to go and get court approval. [00:13:35] Speaker 01: There's no real allegation that a settlement was achieved here. [00:13:37] Speaker 01: He's just complaining about the ongoing settlement negotiations, which the government can always settle the tax obligation, even if there's a lawsuit ongoing. [00:13:45] Speaker 01: They have the right to settlement. [00:13:48] Speaker 05: We understand that point. [00:13:49] Speaker 05: I think we've taken you to that point a couple of different times and you're pretty much out of time, but what is your strongest argument to Judge Fletcher's response to Judge Fletcher's question, which is I think your position is that he doesn't have a property interest in the claim, only in the proceeds. [00:14:06] Speaker 05: What's your strongest argument that he doesn't have a property interest in the claim? [00:14:10] Speaker 01: in the main claim for taxes, is that always belongs to the government? [00:14:14] Speaker 02: In the claim that's not yet been reduced to judgment? [00:14:16] Speaker 01: If it hasn't been reduced to judgment, then it's quite speculative. [00:14:20] Speaker 01: And he only actually has a right to the 30% proceeds at the time in which it's claimed. [00:14:24] Speaker 02: Well, I understand it's speculative as to whether he's going to get the money. [00:14:27] Speaker 02: But does he have a right to bring the claim? [00:14:29] Speaker 02: And can we characterize it as a property right? [00:14:32] Speaker 02: That's the question. [00:14:33] Speaker 01: And I think that that is an excellent question for the Guam courts to decide on. [00:14:36] Speaker 02: Why is it not a question in front of us? [00:14:39] Speaker 01: Because I think that this is a local statute, and when we're here on qualified immunity, the fact that we're debating this demonstrates that the answer is an obvious repurpose. [00:14:48] Speaker 02: You may be debating it, but if I make up my mind and I disagree with you, we're done. [00:14:52] Speaker 01: Yes, I understand that. [00:14:54] Speaker 01: I'd like to reserve the last couple seconds that I have left. [00:14:59] Speaker 05: Why don't you go back to council table, and when you come back for rebuttal, we'll give you two minutes. [00:15:02] Speaker 01: OK, thanks. [00:15:18] Speaker 00: Good morning, Your Honor. [00:15:19] Speaker 00: Excuse me. [00:15:21] Speaker 00: Good morning, Your Honors. [00:15:21] Speaker 00: May it please the Court. [00:15:23] Speaker 00: My name is Braddock J. Heusman. [00:15:24] Speaker 00: I represent the Appellee, Mr. John Ryan. [00:15:27] Speaker 00: With my time today, I'd like to discuss three points with this Court. [00:15:31] Speaker 00: The first is, in response to the Court's order, I'd like to discuss why the Titan judgment does not affect Mr. Ryan's claims in this case or this Court's jurisdiction. [00:15:43] Speaker 00: My second point I'd like to talk about [00:15:45] Speaker 00: the district court's order and how the district court did not determine any facts. [00:15:53] Speaker 00: And for my third point, I'd like to discuss how the DRT defendants are not entitled to qualified immunity, that they had fair notice that- You start with Judge Fletcher's first question. [00:16:01] Speaker 05: In the Titan claim, what's left? [00:16:04] Speaker 00: So what's left in the Titan claim, the judgment has been issued, but what there is- Hold on. [00:16:11] Speaker 05: That's for 30% of the 600,000? [00:16:13] Speaker 00: So it's not $600,000. [00:16:15] Speaker 05: What is it? [00:16:16] Speaker 00: So the attempted settlement was $600,000. [00:16:19] Speaker 00: The government took that money in. [00:16:21] Speaker 00: Then during the bankruptcy, Mr. Ryan was able to force Titan to pay the total priority tax claim, which is about $1.4 million, inclusive of the $600,000. [00:16:33] Speaker 05: What did the Superior Court enter? [00:16:34] Speaker 00: And then the Superior Court entered a judgment in favor of the government of Guam for, I think, $1.4 million and awarded Mr. Ryan 30 percent. [00:16:44] Speaker 05: Thirty percent of that? [00:16:44] Speaker 00: Of that money, yes. [00:16:45] Speaker 00: Of the larger amount, yes. [00:16:46] Speaker 00: Of the larger amount, yes, Your Honor. [00:16:48] Speaker 05: That's very helpful. [00:16:48] Speaker 05: So that's over. [00:16:49] Speaker 00: That is over. [00:16:50] Speaker 05: What's left of Titan? [00:16:52] Speaker 00: There's nothing left for, there's nothing left in that case to tighten to do, but there are. [00:16:58] Speaker 02: Is there an appeal? [00:16:59] Speaker 00: No, no, that's over, right? [00:17:02] Speaker 00: So what I would say to the court's question is there's still damages that flowed from their decisions to, without notice, try and settle that case out from under. [00:17:12] Speaker 04: And so your argument in this case is twofold, as I understand it. [00:17:19] Speaker 04: You're no longer arguing [00:17:21] Speaker 04: that the fact that your client wasn't paid the proceeds is a deprivation of the property right. [00:17:26] Speaker 04: You are arguing that both the secret settlement negotiations was a deprivation of a property interest, and you're arguing that your client had right to notice at those settlement discussions that he never got, and also that he never got notice of the ultimate payment of the proceeds, and that also gives rise to a separate property interest. [00:17:47] Speaker 00: Yes, Your Honor, and I'm also, and I agree with [00:17:50] Speaker 00: Excuse me, Judge Fletcher, I think that there is a right to control under the statute, the lawsuit, and that right to control means nothing if this court in Henry Schimel's bankruptcy cake from the 90s . [00:18:05] Speaker 00: . [00:18:05] Speaker 00: . [00:18:05] Speaker 05: Wait a minute. [00:18:06] Speaker 05: Before you do that, can you go back to the . [00:18:09] Speaker 05: . [00:18:09] Speaker 05: . [00:18:09] Speaker 05: Judge Fletcher, I think, was making a different point, and this is kind of an important fork in the road, right? [00:18:14] Speaker 05: There's a statute. [00:18:17] Speaker 05: 37203E that expressly allows the government of Guam to go forward and pursue any alternative remedies. [00:18:24] Speaker 00: I don't disagree with that at all. [00:18:25] Speaker 00: They can pursue any alternative remedies. [00:18:26] Speaker 05: What gives you the right to have notice of that happening? [00:18:30] Speaker 00: Well, this is what gives me the right, because my client has the right to pursue the claim. [00:18:35] Speaker 00: And this does go in with Schimel's, in that there is one claim. [00:18:40] Speaker 05: And the government- Right, but they can settle it out from under you, I think, under the Guam statute. [00:18:44] Speaker 05: They just have to pay you. [00:18:45] Speaker 00: Agreed. [00:18:46] Speaker 00: But this is the problem. [00:18:47] Speaker 00: What they did at the time was they did it secretly. [00:18:51] Speaker 00: So they were basically- Well, that hands my question. [00:18:54] Speaker 05: What's wrong with that? [00:18:56] Speaker 00: Oh, without notice? [00:18:57] Speaker 05: Yes, that was the question, sir. [00:18:58] Speaker 00: This is the point, Your Honor. [00:19:00] Speaker 00: This is what I'm trying to make. [00:19:01] Speaker 00: I'm trying to answer your question. [00:19:02] Speaker 05: Okay. [00:19:04] Speaker 00: When you don't give Mr. Ryan notice that you're attempting, excuse me, when the DRT defendants fail to give him notice that they're taking the claim back for an alternate remedy, Mr. Ryan is pursuing the claim. [00:19:15] Speaker 00: He's expending attorney's fees. [00:19:17] Speaker 00: They are going to settle the claim without letting him know they're settling the claim, and he's expending fees for no purpose. [00:19:23] Speaker 04: You're conflating these two issues, and that's sort of giving me some [00:19:28] Speaker 04: difficulty here because even when answering the question that I think Judge Christen is asking you with respect to why your client was entitled to notice, with respect to the ultimate settlement and proceeds, you're talking about the right to notice that settlement negotiations were occurring. [00:19:48] Speaker 04: I think that goes to . [00:19:49] Speaker 04: . [00:19:49] Speaker 04: . [00:19:51] Speaker 04: When I asked my question a few moments ago, you said you have two separate claims [00:19:56] Speaker 04: that arise out of two separate property interests. [00:19:58] Speaker 04: But now you're kind of conflating those things. [00:20:01] Speaker 00: I'm sorry. [00:20:01] Speaker 00: I believe that the right to control the claim, the lawsuit, [00:20:11] Speaker 00: doesn't mean anything if, while he's trying to control the lawsuit, there is this separate settlement going on that he is not aware of. [00:20:19] Speaker 04: Let's assume for purposes of the discussion that we disagree with you and that because there's language in the Whistleblower Act that allows the government to have these alternative remedies and they're going to settle it. [00:20:31] Speaker 04: Explain to us what your claim is for notice [00:20:36] Speaker 04: with respect to the proceeds that are ultimately obtained by the government when they do, in fact, settle the claim out from underneath you. [00:20:44] Speaker 00: Okay, so as soon as the government settles the claim out from under the individual, right, in that case, they've accepted money, right? [00:20:54] Speaker 00: Keetam, the relator, has a statutory entitlement to the award, also has a statutory entitlement to attorney's fees. [00:21:04] Speaker 00: It's unclear what happens in your hypothetical to those attorney's fees. [00:21:08] Speaker 00: Those are still, they were supposed to be awarded, but the government has settled those out from under him. [00:21:14] Speaker 00: And there's no additional mechanism within the statute to get those back because the government doesn't pay the attorney's fees. [00:21:21] Speaker 00: settling party that they settle with does. [00:21:23] Speaker 05: There are other key TAM statutory schemes that allow the government to come back in, seek to intervene. [00:21:29] Speaker 05: Guam doesn't do that. [00:21:30] Speaker 05: No. [00:21:30] Speaker 05: But in those other cases where the government can come back in, the government can control the litigation. [00:21:38] Speaker 05: So I'm trying to figure out how you get to a right to notice given [00:21:44] Speaker 05: or I think you want notice and participation, given 37203E. [00:21:49] Speaker 05: Guam made a different choice, in other words. [00:21:50] Speaker 05: They said after that 60-day period, the government can't come back. [00:21:54] Speaker 05: But it also memorialized that Guam can pursue alternative remedies. [00:21:59] Speaker 00: Right. [00:22:00] Speaker 00: And if you look at 37203E, [00:22:03] Speaker 00: They're supposed to get the same rights in any proceeding in that alternate remedy. [00:22:10] Speaker 00: Excuse me when I say that. [00:22:11] Speaker 05: You're relying on the end of that statute. [00:22:14] Speaker 05: The person initiating the action shall have the same rights. [00:22:17] Speaker 05: in such proceeding as the person would have had if the action had continued under this section. [00:22:21] Speaker 05: So it's not just your entitlement to the bounty. [00:22:25] Speaker 05: You also want other rights which would be if the action had continued under this section. [00:22:31] Speaker 05: If the action had continued under this section, how would the government, your client would have been entitled to all the notice pursuant to the lawsuit. [00:22:40] Speaker 00: Well, and that's the point, Your Honor. [00:22:44] Speaker 00: I don't want to interrupt you. [00:22:44] Speaker 05: No, no, I didn't do a good job. [00:22:46] Speaker 05: I'm just trying to figure out how does this get you where you want to be? [00:22:48] Speaker 00: Well, this is why I think that gets us where we want to be. [00:22:51] Speaker 00: In the lawsuit, I am entitled notice. [00:22:53] Speaker 00: I am entitled to the decisions. [00:22:56] Speaker 00: Every time there's something filed, I'm brought in. [00:22:58] Speaker 00: What I'm saying is, when they decide to settle the case, when they, excuse me, when they exercise an alternate remedy, [00:23:06] Speaker 00: I'm entitled – Mr. Ryan is entitled to the same rights in that alternate – I think I figure out why we're having a disconnect. [00:23:14] Speaker 05: Okay. [00:23:15] Speaker 05: Let me read this to you so you can help me out. [00:23:17] Speaker 05: It says, if such alternate remedy is pursued in another proceeding – so I'm envisioning a different proceeding, an administrative proceeding, one of the enumerated ones, and you'd have all those rights and you'd be entitled to notice. [00:23:31] Speaker 03: Sure. [00:23:31] Speaker 05: I get that. [00:23:32] Speaker 05: I'm trying to figure out specifically [00:23:35] Speaker 05: Since settlement isn't an enumerated alternative proceeding, why your position is at 3702E gives you a right to notice and participate in a settlement proceeding. [00:23:47] Speaker 05: I should have said settlement negotiation, sorry. [00:23:50] Speaker 00: Right. [00:23:51] Speaker 00: And this becomes the point. [00:23:53] Speaker 00: They're the Department of Revenue and Taxation. [00:23:56] Speaker 00: They're a bureaucracy that sets the tax liability here. [00:24:02] Speaker 00: The idea that they are informally setting tax liability makes no sense to Mr. Ryan or to me. [00:24:09] Speaker 00: The idea that the tax liability was set when they determined those numbers, it's not an informal discussion. [00:24:16] Speaker 00: Those aren't the allegations in the thing. [00:24:18] Speaker 00: The allegation in the complaint is that [00:24:21] Speaker 00: They had some kind of administrative determination that this is the amount of tax owed. [00:24:27] Speaker 00: It was 2.4, whatever the actual number became. [00:24:32] Speaker 00: And to arrive at the total amount that Titan owed, [00:24:36] Speaker 00: the government had to engage in some kind of bureaucratic mechanism once they enter into that negotiation I think that's an administrative proceeding I think under the Ninth Circuit case [00:24:52] Speaker 00: I think all those are administrative—I think they're alternate remedies, and I believe when they set the amount, it is—whether it's informal or formal, it's an administrative proceeding. [00:25:02] Speaker 05: I see. [00:25:03] Speaker 00: I get it. [00:25:04] Speaker 05: Thank you. [00:25:06] Speaker 05: I understand your position. [00:25:07] Speaker 05: Thank you for your clarification. [00:25:13] Speaker 04: I think your opposing counsel's view is that— [00:25:17] Speaker 04: what exactly the right that's created by this particular statute, because it is specific to Guam, should be decided in the first instance by the Guam courts. [00:25:29] Speaker 04: What's your position, and I think that amounts to an argument for certifying a question, although I'm not sure exactly what the argument is, but what is your response to that? [00:25:42] Speaker 00: This court has full authority and power to review what is facially clear statutory language and determine whether property rights were created through Guam law. [00:25:55] Speaker 00: And if property rights are created under Guam law, and here they are, there was the use of the shall, this court can determine that they violated those property rights by their actions. [00:26:04] Speaker 02: You know, here's kind of almost a metaphysical question. [00:26:08] Speaker 02: When does a right become a property right as distinct from merely a right? [00:26:13] Speaker 02: So is a right to conduct a litigation not merely a right but a property right? [00:26:18] Speaker 02: At what point do we call it a property right? [00:26:23] Speaker 00: In this case, I would say, well, in the case of a DRT, [00:26:27] Speaker 00: I would say that it's a property right as soon as the government files this declaration, because that triggers— That's after the first 60 days? [00:26:39] Speaker 00: Yes. [00:26:39] Speaker 04: And is that true for any Keetam case, or just one that arises under the Guam statute? [00:26:47] Speaker 00: I would say that it's true for any Quetam case once the government declines. [00:26:53] Speaker 04: Even under the federal statute where they're permitted to intervene at a later date? [00:26:58] Speaker 00: Yes. [00:26:59] Speaker 00: And the reason I say that, Your Honor, is because, and in the Polanski case, it's clear. [00:27:04] Speaker 00: The government doesn't get to intervene like the government tried here. [00:27:07] Speaker 00: The government provides the relator notice and puts it in front of the court and says, this is what we're going to do. [00:27:15] Speaker 05: I think the federal statute of the government is free to seek leave to intervene. [00:27:19] Speaker 00: Yes. [00:27:19] Speaker 05: You can't unilaterally decide they're going to take it. [00:27:21] Speaker 00: Agreed. [00:27:21] Speaker 00: And they have to show good cause to intervene at that. [00:27:23] Speaker 05: Right. [00:27:23] Speaker 05: But Guam doesn't even allow that. [00:27:24] Speaker 00: No. [00:27:25] Speaker 00: No. [00:27:26] Speaker 02: Has the 60 days passed for all three of these losses, the Carson permarch as well? [00:27:30] Speaker 02: Okay. [00:27:31] Speaker 05: Yes. [00:27:31] Speaker 05: What's remaining for your claim? [00:27:32] Speaker 05: Is opposing counsel right in understanding what's left of your request for injunctive relief? [00:27:37] Speaker 00: Basically, because this is the problem, and it's a bit of a moving target. [00:27:44] Speaker 00: But the governor of Guam, they've taken these similar actions in each case. [00:27:49] Speaker 00: And what we're saying is either declare your alternate remedy and step in and do this, or don't, but don't meddle in the cases, don't halfway interfere. [00:28:00] Speaker 05: Council, you just have to be more specific for me, okay? [00:28:02] Speaker 05: Sure. [00:28:02] Speaker 05: We do our best, but it's a full docket this week. [00:28:05] Speaker 05: So you want an order that says the government of Guam [00:28:08] Speaker 05: what must give you notice if they're going to institute negotiations for settlement? [00:28:13] Speaker 00: Yes, Your Honor. [00:28:14] Speaker 05: And is it your position that your client ought to be able to participate in those negotiations? [00:28:19] Speaker 00: Is that part of your request? [00:28:21] Speaker 00: I believe we have the same rights in those. [00:28:24] Speaker 05: Counsel, is it yes or no? [00:28:25] Speaker 00: Yes. [00:28:26] Speaker 05: I just need to know. [00:28:26] Speaker 05: Yes. [00:28:27] Speaker 05: All right. [00:28:27] Speaker 05: So you want notice of any negotiations for these other two cases? [00:28:32] Speaker 05: Yes, Your Honor. [00:28:32] Speaker 05: Those are outstanding. [00:28:33] Speaker 05: Thank you. [00:28:34] Speaker 05: And you think you're entitled to a... [00:28:40] Speaker 00: Participation in that we I'm not saying like, for example, a criminal case would would I think be an alternate remedy. [00:28:47] Speaker 04: Do you have any reason to believe that there is a settlement that's been reached in the other cases? [00:28:53] Speaker 00: No, but I have reason to believe that they have set the value in both those cases. [00:28:56] Speaker 04: And have you received notice of any proceeds collected in which cases? [00:29:02] Speaker 00: And what have you received? [00:29:03] Speaker 00: In Carson, they collected almost immediately in Carson. [00:29:08] Speaker 00: That might have been what my friend from the other side was saying. [00:29:10] Speaker 00: The Carson defendant ran to the court to DRT, made a payment, and they sat on that payment. [00:29:19] Speaker 00: The DRT defendants took that payment from the Carson defendants, set the value of the claim, [00:29:26] Speaker 00: You mean compromise it? [00:29:28] Speaker 05: They'd already said it. [00:29:29] Speaker 05: It was not setting tax liabilities. [00:29:30] Speaker 05: So you're confusing me. [00:29:32] Speaker 05: You mean compromise it at a value? [00:29:33] Speaker 00: No. [00:29:34] Speaker 00: They set the value in that they took Carson's, Carson went in and filed GRTs, the tax returns basically, and set the number of what Carson said it was, paid taxes on that amount, and they set that value when they accepted the money and took it in. [00:29:55] Speaker 00: I think it was around $90,000. [00:29:57] Speaker 05: Did all of that happen after the 60-day period? [00:29:59] Speaker 00: Yes. [00:30:00] Speaker 05: So you're entitled to, under your view of the law, to your bounty? [00:30:04] Speaker 00: Mm-hmm. [00:30:05] Speaker 00: Yes. [00:30:05] Speaker 05: Okay. [00:30:06] Speaker 05: And do you have some reason to think you're not going to get that bounty, or that that's ripe for us? [00:30:09] Speaker 00: Well, not yet. [00:30:10] Speaker 00: Well, for that bounty, no. [00:30:14] Speaker 04: They've... Well, let me... Are those claims part and parcel of this action? [00:30:21] Speaker 00: Yes. [00:30:22] Speaker 00: Because they've taken the same actions. [00:30:23] Speaker 05: In other words . [00:30:24] Speaker 05: . [00:30:24] Speaker 05: . [00:30:24] Speaker 05: We understand that. [00:30:25] Speaker 05: Could you go back to Judge Desai's question, because I think you're slipping right past it. [00:30:31] Speaker 05: He asked you whether they're part of this action, and I'm understanding you to say you said yes, because you wanted a junction that says they can't do in those cases what they did in this case. [00:30:40] Speaker 05: Is that it? [00:30:40] Speaker 00: Yes, Your Honor. [00:30:42] Speaker 02: So in the Carson case, they accepted this $91,400. [00:30:48] Speaker 02: And are you saying that not only you're entitled to your key time portion of that amount, but you're entitled to something beyond that because they settled it for pennies on the dollar? [00:31:00] Speaker 00: no and I don't even know that it was pennies on the dollar but what so their behavior has changed since they've been defendants in federal court and what I had in Carson when we filed this claim two years ago or whenever the 22 what we had in Carson was a [00:31:19] Speaker 00: The government refused to pay the claim, refused to pay the award, denied a government claim, and then entered into filed papers in Carson saying, when we physically collect the money, we don't have to pay an award. [00:31:36] Speaker 00: So it's changed a little bit since they've become defendants. [00:31:39] Speaker 00: Now they've agreed to an order to pay the award, but we're two or three years down the road. [00:31:45] Speaker 04: Are you seeking damages for the lack of notice [00:31:51] Speaker 00: I'm seeking damages that stem from the lack of notice. [00:31:54] Speaker 00: I'm not sure how much the damage is for the absolute lack of notice, just it's a vindication of my right. [00:32:00] Speaker 00: I think there are damages. [00:32:01] Speaker 04: So doesn't that in and of itself sort of make this case not moot if you have even nominal damages? [00:32:06] Speaker 00: Exactly, Your Honor. [00:32:07] Speaker 05: What are your nominal damages from lack of notice if they're agreeing that they owe you 30 percent of what they owe you? [00:32:15] Speaker 00: and you're not, Judge Fletcher, you're not worried about them having settled for pennies on the dollar? [00:32:31] Speaker 05: Oh, because you kept litigating. [00:32:33] Speaker 00: We kept litigating for two years to know . [00:32:36] Speaker 00: . [00:32:36] Speaker 05: . [00:32:36] Speaker 05: Because you didn't know that they had settled? [00:32:37] Speaker 00: Because we did not know that they had entered into these settlement agreements. [00:32:40] Speaker 05: And that's your claim? [00:32:41] Speaker 00: And those are my claim for damages that stem from the . [00:32:44] Speaker 00: . [00:32:44] Speaker 00: . [00:32:44] Speaker 05: In response to Judge Desai's question, that's your claim? [00:32:46] Speaker 00: That's the claim. [00:32:47] Speaker 05: Okay, so could I follow up on one more thing? [00:32:50] Speaker 05: When we asked about your remaining claim for injunctive relief, and we've paraphrased this now a couple of times, and maybe this is our fault, but we've paraphrased it as you want an order that prohibits the government of bomb from doing in these other two cases what they did in Titan, right? [00:33:05] Speaker 05: Do you have a claim for declaratory relief in addition to injunctive relief? [00:33:09] Speaker 05: You want an interpretation of the statute, is that it? [00:33:11] Speaker 00: I believe we've asked for that, I'd have to go back. [00:33:14] Speaker 05: Okay, but at least I'm understanding the gist of what we're, [00:33:16] Speaker 05: That's helpful to me. [00:33:18] Speaker 05: Thank you for your patience. [00:33:33] Speaker 01: Your Honor, for the qualified immunity analysis here, even if notice of settlement negotiations and settlement ultimately is required by the statute, there is nothing on the face of the statute that makes that clear or well settled for the purposes of imposing personal liability against Daphne Shimizu and Marie Lozama. [00:33:50] Speaker 04: That might be true with respect to the property interest in the action itself, maybe, I don't know, but it seems [00:34:00] Speaker 04: It's very hard for me to understand how that argument applies to the proceeds. [00:34:06] Speaker 01: So to the proceeds, they may have a right to the proceeds when it is reduced to a judgment. [00:34:11] Speaker 01: If you look at the statute additionally for settlement, it requires the court approval of any settlement, whether it's a settlement reached by a key TAM relator or by the government over the objections of the key TAM relator. [00:34:22] Speaker 01: So the allegations that there's been some secret settlement would not even be enforceable. [00:34:26] Speaker 04: Is it reduced to a judgment or the collection of? [00:34:29] Speaker 01: Actually, the collection of is what I think it's contingent upon, but I think [00:34:33] Speaker 01: at least some sort of future interest in the collections may be cognizable as a property right if you get it reduced to a judgment. [00:34:42] Speaker 05: Are you disputing that Guam would owe the bounty to, regardless of any alternative remedy that it pursues, after the 60-day period kicks in, right? [00:34:53] Speaker 05: Yes. [00:34:54] Speaker 05: Are you disputing that Guam would owe the bounty, no matter what procedure it uses to resolve the claim? [00:35:00] Speaker 01: I don't think there's any dispute that Guam would owe some amount of a bounty, but depending on the assistance from the taxpayer, it may either be the 30% if it's directly in relation to the issue or the range for administrators. [00:35:11] Speaker 04: The answer to my question is no. [00:35:13] Speaker 01: No. [00:35:13] Speaker 04: Why not just intervene in these cases when given the opportunity? [00:35:18] Speaker 01: So given the opportunity, because some of these cases, I don't know. [00:35:24] Speaker 01: I wasn't involved in the decisions to take them, quite honestly, but at the same time, [00:35:28] Speaker 01: At the end of the day, these are private attorney general statutes that a private individual is acting to vindicate the government's interests. [00:35:36] Speaker 01: And so it's a well-settled thing. [00:35:37] Speaker 04: What's unique about here and what makes these cases, though, is when the government says we don't think there's anything, there's a there there. [00:35:45] Speaker 04: We're not going to expend resources. [00:35:46] Speaker 04: We just won't intervene, and you go on and litigate your key TAM action. [00:35:51] Speaker 04: But here, you're saying we don't want to intervene, but then pursuing these alternate remedies without any [00:36:00] Speaker 04: notice to the plaintiff who's filing these cases in the first instance, and I'm not even sure that the government would know about it, but for the filing of the Ketam action. [00:36:08] Speaker 01: And so most of the text that's in Guam actually get resolved through the assessment process and assessment and then a challenge to an assessment and other things like that. [00:36:17] Speaker 01: And so if there's a settlement going on related to the assessment process, that's not really a proceeding back to Judge Kristen's question. [00:36:23] Speaker 01: a proceeding really requires an agency hearing, not just the agency's administrative review of records. [00:36:29] Speaker 01: It actually really requires a proceeding. [00:36:32] Speaker 01: But that's really where the, I think where the tension is for purposes of qualified immunity. [00:36:36] Speaker 01: None of that's preeminently clear. [00:36:39] Speaker 01: I think we can [00:36:41] Speaker 01: resolve some of those, flush them out on remand, flush them out in the Superior Court cases, but I really think for the purposes of this qualified immunity appeal, none of that provides fair warning that's beyond debate to the two individuals involved here where they're seeking personal liability. [00:36:55] Speaker 05: Maybe for Titan, but he's requesting injunctive relief and declaratory relief about what happens with these other two cases. [00:37:01] Speaker 01: That's as to the official capacity suit against the government of Guam for injunctive relief. [00:37:06] Speaker 05: It's as to the two outstanding cases and that hasn't been resolved whether they're going to be entitled to a notice of future negotiations so they don't keep burning attorney's fees in their ongoing litigation. [00:37:18] Speaker 01: Yes, but that is subject to a portion of the order that wasn't appealed, because what was appealed here was the denial of qualified immunity, because that's what it's immediately appealed to. [00:37:27] Speaker 02: And I apologize for extending your time. [00:37:29] Speaker 02: Qualified immunity as to what? [00:37:31] Speaker 02: Qualified immunity as to the damages sought for all the attorney's fees they expended because you didn't let them know that you were litigating in a parallel function? [00:37:39] Speaker 02: Is that where the qualified immunity argument is coming in? [00:37:42] Speaker 01: The monetary damages, whatever the damages claimed are, whether they're monetary, whether they're attorney's fees and costs, because even if you look at the statute. [00:37:48] Speaker 05: I want to be sure I don't miss anything. [00:37:52] Speaker 01: So the attorney's fees and costs are maybe one of the parts of the damages that he may seek, but even if you look at the statute, he can get an award against that, against the defendant in the Superior Court. [00:38:03] Speaker 01: at least in Titan, never brought that claim and still has that ability to bring the claim in the Carson and Permarch cases. [00:38:09] Speaker 01: As nominal damages as well, it applies. [00:38:12] Speaker 02: What involvement did your clients have in the decision to pursue the litigation without telling these people? [00:38:20] Speaker 01: Pursue what litigation? [00:38:25] Speaker 02: There's the Hitam litigation that's going forward. [00:38:31] Speaker 02: Then there's the collection that your people were doing in secret. [00:38:38] Speaker 02: What involvement did your clients have with that? [00:38:42] Speaker 01: Based on the allegations of the complaint, that's quite unclear, other than some general allegations of conspiracy and [00:38:50] Speaker 04: I don't know what the factual things they've done [00:39:09] Speaker 01: would trigger liability in the allegations. [00:39:12] Speaker 01: If there are allegations, it's that they talked to the taxpayer. [00:39:16] Speaker 05: The allegation is that they negotiated to summarize, right? [00:39:19] Speaker 01: Yes. [00:39:20] Speaker 01: That's the allegation. [00:39:23] Speaker 01: And maybe they did, but I don't think that that violates the statute or it violates any clear prohibition of the statute when it actually provides the settlement right in part B and the alternative remedy in part E to the government. [00:39:37] Speaker 01: And the relator's rights are only triggered when a proceeding is triggered. [00:39:41] Speaker 05: Yeah, I just have one last question. [00:39:45] Speaker 04: What is your best authority for [00:39:49] Speaker 04: your argument that there is no property interest in the lawsuit itself. [00:39:55] Speaker 04: Because I hear what you're saying is that it's not clearly established. [00:40:00] Speaker 04: We can clearly establish it, even if it were not the case for this case that it was clearly established. [00:40:07] Speaker 04: But do you have any authority that you think strongly indicates there is no property interest in the lawsuit? [00:40:16] Speaker 01: For at least a portion of the lawsuit, the Superior Court of Guam has ruled that the whistleblower statute here is not retroactive, and a good portion of the claims involved here, because the tax debt in Titan, for example, was 2015 to 2019. [00:40:32] Speaker 01: The whistleblower law was enacted in 2018. [00:40:35] Speaker 01: So at least for a portion of the claims, there would actually be no property interest vested for a good portion of the claims here, even if there is a property interest under the statute. [00:40:44] Speaker 01: Additionally, under Polanski, [00:40:46] Speaker 01: decision and the decisions about that, this all comes back to vindicating the government's interest and then you may have a right or even a property right at best if you have reduced it to a judgment and collections because it's really a claim for compensation as a private attorney general. [00:41:03] Speaker 01: And so for those reasons I ask that this court reverse the judgment denying qualified immunity to the individual defendants. [00:41:09] Speaker 05: Thank you for your argument. [00:41:10] Speaker 05: We'll take that case under advisement. [00:41:12] Speaker 05: Thank you. [00:41:13] Speaker 05: I think several people have traveled quite a distance for this argument. [00:41:17] Speaker 05: We appreciate that.