Office of the Attorney General of Guam

Eliz,iheth Batn'tt·Andersun Attorney General

Phone: 16'7!} 47S·3324 ext. 5015/ 5030 Fax: 4 77 ··+703

Z Cruz Chi el of Stafl

Administration ext.5010

Phi!lip I Chief Prosecutor Prosecution

ext. 24 l 0

Solicitors.

Kenneth D. Orcutt AG

Civil Litigation

Fred S. Nishihira i\G

Consumer Counsel ext. 3250

Rebecr:i ivl. Perez AC.

Child Support 10

Pa u I itw l lJ ntaia n Administrator

VWAS Unit/ Notar·y Unit 5030

590 S. Marine Corps Dr .. Ste. 706, Tamuning. Guam 96913

August 08, 2016

Honorable Judith T. Won Pat Speaker, Committee on Higher Education, Culture, Public Libraries and Women's Affairs I Mina'trentai Tres Na Liheslaturan Guahan 155 Hesler Place Hag?ltna, Guam 96910

9 3-/~--1q11 Offo:l' oft hl· 'Pl';1J.,cr

Judith I. \\1111 P~ll. Fd.I>

I i Ill l': ----':....::;...;:_.~~t-J-.t;----

R n:l' h uJ B ~ : _ __::;...,t.li_,&.,_.._... __ _

Re: Guam YTK Corporation vs. Port Authority (f Guam, Case No. CV 1170-1 AG File No. 12.0552

Hafa Adai,

Pursuant to your request to be provided with copies of documents filed in the Guam

YTK litigation, please find enclosed the Brief Arnicus Curiae of the AG in Support of

Defendant Port Authority of Guam's Motion to Vacate the Arbitration Award in the

above matter.

Attorney General

Attachment

1914

Phone: (671) 475.3324 • wH·w.guamag.org • tt·ww.guamcse.net

Office of the Attorney General Elizabeth Barrett-Anderson Attorney General of Guam Litigation Division 590 S. Marine Corps Dri\e Tamuning. Guam 909!3 • USA (671)475-3324 • r67IH72-24LJ3 (Fax)

Attorneys for the Gmernment of (;uam

~ ~ t ~" r \ .' ~:, -s r:1 n .. 13 'r

RECEIVED CALVO FISHER & JACOB LLP

oa•~----~o_s_i_os1~··~~~~~L--­tf:'~

Time~-------,-

By: -.----....::~~P ____ _

IN THE SUPERIOR COURT OF GUAJ\1 HAGATNA, GUAJ\11

GUAM 1'TK CORPORATION,

Plaintiff-A ppc llant,

v.

PORT AUTHORITY OF (;(L\l\1,

Defendant -Apjx·Jke.

CIVIL CASE NO. CV1170-J2

BRIEF AiVJICUS CURIAE OF THE \TTOHNEY GENER\L OF <~UAl\I IN

SUPPOH.T OF DEFEND\NT PORT AUTHORITY OF (;UAl\I'S 1\IOTION TO V\('ATE THE ARBffR"\TION AWARD

Comes Now, the Attorney General of Guam. Elizabeth Barrett-Anderson. by and through

Deputy Attorney General Kenneth Orcutt, who submits the following Brief Alllirus Curiae of the

Attorney General of Guam in Support of Defendant Purt Authority of Guam's i\ilotion to Vacate

the ArbJtratton Award.

I I II Tile Law OH!c,>: (lf

.. ~~, r~. ·,. , )ALLO

I II I ·:\· H\·: _&_~t1~--~----·-

Ill! DA'I. ____ ?{}Qr:;LJ!L_ _________ _ TIME:_ 'f-' /0z-{2-lll ______ . __

Brief Anticus Curiae of the Attorney CknerQI of Guam in support of Ddendant Port Authority of Guam's l\lotiun to Vacate the Arbitration A ward Guam !TK CoryJrJration IT Port Authority n/ Guam Super·ior Court Case No. CV I I 70- I 2 Page 1 of 19

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1 Law which can be given effect without the invalid provisions or application,

2 and to this end the provisions of this Law are severable.

3

Doc. No. 33GL-16-1914

IMINA' BENTE SAIS NA LIHESLATURAN GUAHAN 2001 (FIRST} Regular Session

VOTING SHEET

Bill No. _jj_2_~_ Resolution No. ____ _

' I

CERTIFIED TRUE AND CORRECT:

* 3 Passes = No vote Clerk of the Legislature EA = Excused Absence

Doc. No. 33GL-16-1914

THE OffiCE Of

Senator Felix P. Camacho T>'IHlTY·SJXDl GUAH ltGlllATUn

The Honorable Antonio R Unpingco Soeaker I Vlina' Bente Sais Na Liheslaturan Guahan 155 Hessler Street Hagatnc,, Guam 96910

Dear \1r

The itkc on Tourism_

The Committee votes are as f(J

To Pnss --~----'--~

() ff~ i ;:,; 1 :_-, d

A copy of the CommitteE: inf(lrmation and file

Sinccreiy,

Felix P Camacho

ail

ComrrUctee on Tourism, Trarlsportation

& Economir Da''•iopment

472-35441 451 46 F,:r · t7 472-356\

5. 2001

are

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Doc. No. 33GL-16-1914

COMMITTEE REPORT

ON

BILL NO ll3(COR)

"An act to add to amend Section 10105 of article l, chapter 10 of Title 12, Guam Code Annotated, relative to the Port Authority of Guam's ability to lease real property"

CO\'L\HTTEE Iv1E?v1BERS

Chairman. Fell« P Camacho Vice Chairman Kaleo \Ioylan

10 . Antonio R Unpingco

Larry Kaspcrbauer Joseph Ada l\1ark Forbes

U::'za :J

4 Doc. No. 33GL-16-1914

COMMITTEE REPORT TOURISM, TRANSPORTATION AND ECONOM1C

DEVELOPMENT

BILL NO. 113(COR)

"An act to add to amend Section 10105 of article 1, chapter IO of Title 12, Guam Code Annotated, relative to the Port Authority of Guam's ability to lease real property."

I. PUBLIC HEARING

The Committee on Tourism, Transportation and Economic Development held a public hearing on July 3rd, at 10 a.m. to hear testimony on Bill No. ll3(COR), "An act to add to amend Section 10105 of article I, chapter 10 of Title 12, Guam Code Annotated, relati·;e to the Port Authority of Guam's ability to lease real property."

The hearing v:as called to order by Senator Felix P. Camacho, Chairman of the Committee on Tourism, Transportation and Economic Development. ivfembers present included Senator Ben Pangelinan.

Present to testifv \Vas Mr. Frank Camacho. General Manager of the Port (Juarn_

H. TESTff'(!j)NY Frank Carnacho, Genera! Manager, Port A.uthodty of Guam.

of

Mr. Camacho testified that the Port wholeheartedly supports the bit! and thanks the committee for introducing the measure. He said that currently their leases are on a month­to-month basis due to restrictions in 21 GCA Section 60112. He said the current law restricts the Port from entering into fixed-term leases and as a result, tenants are reluctant to make improvements on the leased spaces. He said Bill 113 will attract more businesses to Port properties. Senator Ben Pangeiinan questioned the sec'tion that allows the leases to be renewed. He said they should not be able to go beyond five years.

III. FINDINGS The Committee finds that Bill No. 113(COR) \Vill give the Port Authority of Guam the qhi!itv to lon~:Jer and will the Port iD collectim' rr>>.lr>.

revenue. Bill f-..Io. 113 also will help encourage investment and help secure Guam's economic future at the Port Authority of Guam.

IV. RECOMMENDATIONS The Committee on Tourism, Transportation and Economic Development hereby reports out Bill No. 113(COR) with the recommendation TO DO PASS.

Doc. No. 33GL-16-1914

:MINA · BENTE sAis NA r-'nr )LATURAN GUAHAN Kc.nniteh:tn Areklamento, Hm:tnao Gubetnamenton Hinir2t, Rifornu yan Rinueba,

van Asuntcm Fidir-.'tt,Taotao fliyong yan I finir2.r

Senadot l,Jark Forbes, Gehil/!

Kabisiyon JHay11rdt

MEMORANDUM

TO:

/ ~--\ '"., /j

- ' r·.; ' . C::h amn an C"' " I ·r · ·r ~ 1 c ~ ~ D 1 vn~utt,e ounsm, ransportat10n a.nc u..,ononuc eve opment

FROM:

SUBJECT:

Chai ' · i ~ \ -........_[~

S,.:.e1mmttee pn'R)..tles, General Govemmental Operations, Reorganization " and Reforf, rmdlic1Je"'I,Foreign and General Affeirs

Principe'.! Referral- Bill No. 113

bill is referred to vour C:ormnittee as Principal Committee, in •1-. s . . . l 1 .. (-' . 1 ~:.ue tanctmg i{lJ&::e-. _omrrntlee is tne C:ornrnittcc:

z:uthorized to the public heari...ng on this bill and to amend or substitute bilL as well as report tTte bill out to the Body. It is recomrnended Lhat you schedule a public hearing at your earliest convenience.

:\L\RK FORBES

Attachment

155 Hesler Street, "'2} ~,Guam 96910 Telephone: 671-472-3407/408/512 ·F_a_cs_im_i_t -477-5036 ·Email: senforbes@hotmaiLcom II -~~- -

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1 years. Any initial lease agreements longer than five (5) years would remam

2 subject to the approval of I Lilzeslaturan Guahan.

4 Section 2. A new Subsection (i) is added to Section 10105 of Article 1, J Chapter 10 of Title 12 of the Guarn Code Annotated which is hereby amended 6 to read as follows: 7 8 9

"Section 10105. Same: Powers. The Board may:

10 (i) otvo;ithstanding ;:m~-,r other provision of law make, negotiate and enu.·r into a

commercial lease or issue a Dermit or license for the use of its real ' . . and

facilities Cor· rerm nm to e "

14

15 Secdon 3. Severability. rr ll'c1UU!1

'',F !--,1 ,--.;-) ~- J

JOilS Lnv are

2

Doc. No. 33GL-16-1914

l '.-; ~ c1; r 1ct

Senator Felix P. Camacho lWtNlT'·SLXfH GU~H l£G!~lAH!~f

Public f-Iearing 10:00 a.n1. Tuesday, July 3, 2001

AGENDA

l. Cnll to Order

II. /\nnmmcement ;md In ·tion of !vkmbcrs

Ill. tclc 1 of

l V. 0. ll i'

chapter l 0 Title 12, Guam relative tc• Authority of Gumn's ability to lecE\'.~ real property

V. Bill No. 26 relating to the Tomist Attraction Fund and the University of (]uam

VL Bill No. 38

VIII. Remarks

IX. Adjournment

Credit Protection

Commttre-e on Tourism, Tramporution

& Economic Development

-.-.'+' '· ;_ .•• ,-

Doc. No. 33GL-16-1914

s~~~~~o; \/ -~~~\rtl Felix P.. Camacho COMMITTEE ON TOUR1Sfv1, TRANSPORTATION

AND ECONOMIC DEVELOPMENT TWENTY-SIXTH GUAM LEG!SLA TURE Suite 158 • 777 Route 4 • Sa>ajana, Guam 9()926 • Pnones 1.671 472-3544 I 45 I 46 • Fax 1 6!1 472-3534

Bill No. 113 An act to add to amend Section 10105 of article 1, chapter 10 of Title 12, Gua1n Code

Annotated, relative to the Port Authority of Guan1 • s ability to lease real property

HAJ'1E :

CONTACT:

I ORGANIZATION : i

' ----r - --------- --- ----------+ - ~--------------~--- --

i MAILING ADDRESS :

i -----·--·-~~--~~-==-=--=--«--•--e===-+-----------------------------------NAME: I ORGANIZATIOll:

! !

COJHACT: .. -~ i·iAlt,NG Aool<ESS ;

.. ~_,-,~ ; .. . .. . luRGN-HiAflON:

CONTACT-:-- ~--- --~--~~--------------- MAillNG ADDRES--5~----~-----------------------

NAME: ORGANIZATION :

CONTACT: MAILING ADDRESS :

IC

Doc. No. 33GL-16-1914

•

Cad T C. Gutierrez Gmernor of Guam

i\1adeleine Z. Bonlallu Licutellant (io·..:crnor

PORT AUTHORITY OF GUAM ATURIDAT I PUETTON GUAHAN

GOVERNMENT OF GUAM 1026 Cabras Hrghw.TJ

Surle 201 Piti, Guam 96925

Testimony on Bill Number 113

PORT AUTHORrTY OF GUAM

re·!;;;.~~:~one (671) 477-5931r35

(6?1) 477~2583.'85

(721) 6689 Pr\GC~UU~

"An Act to amend subsection 10105 of Article 1, Chapter 10 ofTitle 12, Guam Code Annotated, relative to the Port Authority ofGuam 's abifit;' to

lease real property" By Francisco P. Camacho, General Manager

Before the Committee on Tourism, Transportation and Economic Development July 3, 2001

IIAFA fLDAl CAtdACHO AND Iv1E?v1BERS OF THE CO!v1MITITE. THA!,lK YOU FOR THE OPPORTU[·-JITY TC) TESTIFY THIS MCW.J"'JNG ON BILL NUMBER 113.

AND THANKS

\VAREtiOUSE THIS IS TI lAT

';;

SECTION 60112 RE(_JUlRES THE PORT ;\UTHOf\lTY TO OBTAIN LECJISLATIVE APPROVAL BEFORE IT CAN ENTER JNTO FIXED TERM LEASES. THE STATUTE ~;~fAKES l'JO DISTINCTION AS TO THE LEASE TEfUvf IN V/HICH IT APPLIES.

1 Ai·A SURE YOU CAN APPRECIATE THE UNCERTAINTY AND LENGTH OF TIME IT WILL TAKE TO OBTAIN LEGISLATIVE APPROVAL FOR EACH LEASE ENTERED INTO. THE PORT BELIEVES TIIAT THE INTENT OF THE CURRENT STATUTE WAS INTENDED TO APPLY TO LONG TERM LEASES OF

INTENDED TO APPLY TO EVERY SHORT TER1v1 LEASE ENTERED INTO BY AUTONOMOUS AGENCIES.

1(,

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Lotte pays airport's $2.9M legal tab

The DFS Duty Free store at A.B. \Von Pat Intemational Airport Authority, photographed in May 2013.(Photo: PDN file)

42 CONNECT! . 8 COMMENTEMAILMORE

A major retailer has reimbursed the A.B. Won Pat Guam Intemational Airport Authority more than $2.9 million in legal fees in less than two years to defend a disputed contract, according to invoices and receipts between the Airport, Lotte Duty Free and the Calvo. Fisher and Jacoh law firm.

An announcement from Airport Executive Manager Chuck Ada's office Wednesday said Lotte "at,rreed to indemnify the airport for legal fees incurred in connection with the specialty retail concession."

The Airport's award of a 2013 contract to Lotte remains disputed in the Superior Court by DFS Guam. DFS has alleged procurement and ethical violations in the agency's selection of Lotte, according to court filings.

Lotte attorney Cesar Cabot said Lotte is fulfilling "all of its legal obligations as required under its valid and binding concession agreement with the airport."

Lotte's financial assistance, according to the Airport, has been "a very significant money-saver for the airport, given all the lawsuits initiated by DFS."

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their visit to a Lotte store in South Korea before the bid was awarded to Lotte. The board members returned the gifts, saying they were unaware Lotte was a bidder for an airport contract, and that they didn't know the gifts came from Lotte.

DFS also alleged in its lawsuit that the Airport "secretly entertained offers modified after the deadline for submission of offers ... from just one of the proposers ~ Lotte."

The Airport allowed Lotte to modify its offer from $13 million minimum rent a year to $15.4 million, according to DFS.

The procurement process was "skewed to favor Lotte and Lotte only," according to DFS.

Lotte had responded to DFS' allegations that its offer from $13 million to $15.4 million a year "constitutes a clarification, not a modification of the bid," a January 2015 Airport decision denying DFS' second protest states.

Before filing a lawsuit against the Airport, DFS filed a protest with the Airport.

Airport management notified DFS that it had denied DFS' initial protest after the close of regular office hours on Friday, May 17, 2013, according to DFS. The next day, a Saturday, the Airport entered into a contract with Lotte before DFS had any possible opportunity to appeal GIAA's decision on the protest, according to DFS in court papers.

Lotte reimbursements by fiscal year

• 4 months in 2013: $812,171 e 2014: $1.36M • 2015: $745,447

TOTAL: $2.9 M

Source: Invoices and payments between the Airport, Lotte Duty Free and the law firm Calvo Fisher and Jacob

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• Doc. No. 33GL-16-1914