Agana Bay Development Co. (Hong Kong) Ltd. v. Supreme Court of Guam

• Decision Date: 14 January 1976
• Docket Number: No. 75--1059,75--1059
• Citation: 529 F.2d 952
• Parties: AGANA BAY DEVELOPMENT COMPANY (HONG KONG) LTD., Petitioner-Appellee, v. SUPREME COURT OF GUAM, Respondent-Appellant, DILLINGHAM CORPORATION OF THE PACIFIC, Real Party in Interest.
• Court: U.S. Court of Appeals — Ninth Circuit

Page 952

529 F.2d 952

AGANA BAY DEVELOPMENT COMPANY (HONG KONG) LTD., Petitioner-Appellee, v. SUPREME COURT OF GUAM, Respondent-Appellant, DILLINGHAM CORPORATION OF THE PACIFIC, Real Party in Interest.

No. 75--1059.

United States Court of Appeals, Ninth Circuit.

Jan. 14, 1976.

Rehearing and Rehearing En Banc

Denied March 3, 1976.

Howard G. Trapp, Esq. (argued), of Trapp, Gayle, Teker, Weeks & Friedman, Agana, Guam, for petitioner-appellee.

David T. Wood, Asst. Atty. Gen. (argued), Government of Guam, Agana, Guam, for respondent-appellant.

OPINION

Before CARTER, GOODWIN and KENNEDY, Circuit Judges.

JAMES M. CARTER, Circuit Judge.

In this case we hold that the Territory of Guam is authorized to eliminate the appellate jurisdiction of the District Court of Guam, pertaining to local, non-federal issues, by transferring that jurisdiction to a court created by the territorial legislature. The Court Reorganization Act, Guam Public Law 12--85 (January 16, 1974), changes the designation of the principal local court created by the Territory from 'Island Court' to 'Superior Court.' The Act also creates a Supreme Court of Guam and provides, effective July 1, 1974, that the supreme court has exclusive jurisdiction of appeals from the superior court. Formerly, all appeals from the Island Court had been taken to an appellate division of the District Court of Guam.

Agana Bay Development Company, a petitioner in this action, was the defendant in a prior suit commenced in the superior court, concerning the validity of certain liens asserted by plaintiff Dillingham Corporation of the Pacific. Partial summary judgment was granted for the defendant Agana Bay, and Dillingham appealed to the Supreme Court of Guam. Agana Bay then filed this action in the District Court of Guam, seeking a Writ of Prohibition directing the supreme court to cease all appellate proceedings in the mechanics lien case. In the district court proceedings the respondent supreme court was represented by the Attorney General of Guam.

The district court issued a peremptory Writ of Prohibition pursuant to 28 U.S.C. § 1651, permanently restraining the Supreme Court of Guam from proceeding further on the appeal of the mechanics lien case. The court also held invalid those portions of the Court Reorganization Act which divested the district court of its appellate jurisdiction and which created the Supreme Court of Guam. The respondent supreme court now appeals to this court, which has jurisdiction of appeals from all final decisions of the District Court of Guam. 28 U.S.C. §§ 1291, 1294(4).

As an unincorporated territory of the United States, Guam is subject to the plenary authority of Congress to provide for its government under article IV, section 3 of the United States Constitution. Guam acquired its present status as an organized territory in 1950 when Congress enacted the Organic Act of Guam. Ch. 512, 64 Stat. 384. That statute established a territorial government with an elected legislature and a governor appointed by the President. In 1968 the Organic Act was amended to provide for local election of the Governor. Pub.L.No. 90--497, 82 Stat. 842. Even in its original form, the Organic Act delegated a large measure of self-government to the people of Guam. It has functioned as a constitution for Guam, outlining the scope of the territorial government's authority. And the territorial government of Guam can act only to the limits of that Organic Act, just as the national government must observe the limits of the Constitution. Bordenelli v. United States, 233 F.2d 120, 122, 16 Alaska 185 (9 Cir. 1956).

The provisions of the Organic Act of 1950 established a judicial system for Guam but also gave the territorial government significant responsibility for adapting that system to its changing needs. Section 22 of the Organic Act established the 'District Court of Guam' as a court of record, with original jurisdiction both in cases arising under federal laws and in all other cases, and appellate jurisdiction as to local, non-federal issues, as determined by the Guam Legislature. The legislature was also given power to create other courts and define their procedure and jurisdiction, and to transfer original jurisdiction from the district court to these other courts, except in cases arising under federal law. Section 23 provided for appeals to the Ninth Circuit and Supreme Court from certain decisions of the District Court of Guam. Section 24 provided for the appointment of the district judge for a limited term and also allowed the assignment of federal judges to the district court when necessary for the proper dispatch of its business.

Pursuant to the authority delegated in the Organic Act, the first Guam Legislature in 1951 adopted implementing legislation for the territorial judicial system, Public Law 17. The provisions of this act remained substantially unchanged through 1973. ¹ Basically, they provided a judicial system with four tiers of courts. Commissioners' courts had original jurisdiction over petty criminal cases under local law. Guam Code Civ.Proc. § 112 (1970). The police court had original jurisdiction of certain misdemeanor criminal cases under local law, and appellate jurisdiction for de novo determination of cases decided by the commissioners' courts. Id. §§ 102, 104. The Island Court was a court of record with original jurisdiction, exclusive of the district court, in specified matters arising under local laws; these causes generally included misdemeanor criminal offenses, domestic relations, probate, and civil cases where less than $5,000 was in controversy. Id. § 82. The Island Court also had appellate jurisdiction over judgments of the police court imposing imprisonment or a fine in excess of $25. Id. § 83. The District Court of Guam retained its original jurisdiction over cases arising under local laws except those over which such jurisdiction was transferred to the Island Court by section 82. The appellate jurisdiction of the district court was defined to include a broad range of decisions of the Island Court in both civil and criminal cases. Id. § 63. ²

At the very outset it appeared Guam did not desire appeals from local courts to be heard by a single district judge. Public Law 17 stated that the District Court of Guam should exercise its appellate jurisdiction in a division consisting of the district judge as presiding judge and two other judges appointed by him from among the judges designated pursuant to section 24 of the Organic Act. ³ This provision was understood as an implementation of section 22(a) of the Organic Act. See Eiban v. Government of Guam, 115 F.Supp. 519, 520--21 (D.Guam, App.Div.1953).

Major changes were made in the Guam judicial system when the Court Reorganization Act was adopted in 1974. The chapter of the Civil Procedure Code dealing with the District Court of Guam was repealed. A new chapter was adopted in its place, establishing a Supreme Court of Guam with essentially the same appellate jurisdiction as previously held by the district court over local, non-federal issues. The Act also created a Superior Court of Guam to replace the former Island, police, and commissioners' courts. The superior court was made a court of general original jurisdiction in all cases arising under the laws of Guam, but not for cases arising under federal law or pertaining to the Guam territorial income tax. ⁴

The intent of the Court Reorganization Act was presumably to establish for Guam a local judicial system independent of the federal courts. The question raised on this appeal is whether Congress has authorized Guam to undertake such a reorganization, when the effect is to divest the District Court of Guam of its appellate jurisdiction as to local, non-federal questions. The language of section 22 of the Organic Act is most pertinent to this inquiry:

'There is created a court of record to be designated the 'District Court of Guam', and the judicial authority of Guam shall be vested in the District Court of Guam and in such court or courts as may have been or may hereafter be established by the laws of Guam. The District Court of Guam shall have the jurisdiction of a district court of the United States in all causes arising under the Constitution, treaties and laws of the United States, regardless of the sum or value of the matter in controversy, shall have original jurisdiction in all other causes in Guam, jurisdiction over which has not been transferred by the legislature to other court or courts established by it, and shall have such appellate jurisdiction as the legislature may determine. The jurisdiction of and the procedure in the courts of Guam other than the District Court of Guam shall be prescribed by the laws of Guam.'

The first sentence of section 22 states that the judicial power in Guam shall reside in a 'district court' and in 'such court or courts as may have been or may hereafter be established by the laws of Guam.' The authority given to the Guam legislature is not limited to creating inferior courts.

The overstuffed sentence which follows has to be read in light of the power Congress has just given the Guam legislature to establish its own courts. When so read, it appears that Congress intended the following: First, with respect to federal cases, it tracked the jurisdiction of the district court to Article Three of the United States Constitution ('The judicial Power shall extend to all Cases, in Law and Equity, arising under this Constitution, the Laws of the United States, and Treaties made . . ..' U.S.Const. art. III, § 2). Second, as to local, non-federal cases, it gave the district court original jurisdiction in all 'other causes' until the Guam Legislature provides otherwise under the power created in the first sentence. Third, it let the district court 'have' such appellate jurisdiction as the legislature may determine. This third clause says that the Legislature can give appellate...