2021 Guam 17
Guam2021Background
- Major Fred M. Chargualaf, a Guam Police Department Major and member of the Government of Guam Retirement Fund (GGRF) Defined Benefit Plan, received retroactive lump-sum pay in 2013–2015 attributable to earlier years of service.
- Chargualaf asked GGRF for an annuity estimate; GGRF excluded the retroactive lump sums from the years in which they were paid on the ground they were not tied to credited service in those payment years and calculated a lower “average annual salary.”
- Chargualaf filed a Verified Petition for a Declaratory Ruling asking GGRF to treat the lump sums as part of salary in the years received; GGRF denied the petition and he sought judicial review via a writ of mandate in Superior Court.
- The Superior Court upheld GGRF’s interpretation; Chargualaf appealed to the Supreme Court of Guam arguing (1) the statutory interpretation was wrong, (2) Chevron deference was appropriate, and (3) his due process rights (including discovery and an agency hearing) were violated.
- The Supreme Court reviewed statutory interpretation de novo, rejected Chevron deference, found the statutes ambiguous, applied the absurdity/legislative-intent doctrines to affirm GGRF’s interpretation, and held Chargualaf’s due process and discovery claims failed.
Issues
| Issue | Chargualaf's Argument | GGRF's Argument | Held |
|---|---|---|---|
| Whether retroactive lump-sum payments paid in a given year must be included in that year’s "average annual salary" for annuity computation | The statute defines average annual salary as the average of the three highest annual salaries “received” so lump sums received in a year must count for that year | ‘‘Average annual salary’’ should reflect pay tied to credited service in that year; lump sums attributable to earlier service but paid later are not salary for the payment year and should be excluded | Court affirmed GGRF: statute ambiguous; including lump sums by year of receipt would produce absurd/unworkable results and frustrate legislative intent, so exclude such retroactive payments from the payment-year salary calculation |
| Whether Chevron deference applies to GGRF’s statutory interpretation | Chargualaf argued deference appropriate to agency construction (implied) | GGRF sought deference; Superior Court found no legislative delegation to resolve definitional ambiguities | Court held Chevron deference does not apply; legislature did not vest GGRF with primary authority to resolve these definitional ambiguities |
| Whether the trial court was limited to the agency’s articulated rationale when affirming the agency’s decision | Court must accept agency rationale or reject the agency’s action (per Chargualaf’s reading of precedent) | Agency argued statutory interpretation is a legal question and courts may apply legal canons beyond agency rationale | Court held reviewing courts may resolve pure legal questions de novo and may adopt grounds other than the agency’s particular rationale when the agency lacks exclusive interpretive authority |
| Whether Chargualaf’s due process rights (hearing and discovery) were violated by GGRF’s decision-making process | Chargualaf requested discovery and an agency hearing arguing vested pension rights required robust procedural protections | GGRF argued there were no disputed facts, only a question of law; discovery/hearing unnecessary and burdensome | Court held no due process violation: only pure legal question existed, procedural remedies (petition and appeal) were available, discovery would be burdensome and add no probative value; any statutory 90-day response delay caused no prejudice |
Key Cases Cited
- Chevron U.S.A., Inc. v. Natural Resources Defense Council, 467 U.S. 837 (1984) (establishes framework for judicial deference to agency statutory interpretations)
- City of Arlington v. Federal Communications Commission, 569 U.S. 290 (2013) (discusses when courts should defer to agency interpretations based on legislative delegation)
- Motor Vehicle Manufacturers Ass'n v. State Farm Mutual Automobile Insurance Co., 463 U.S. 29 (1983) (agency action must be upheld on the grounds the agency articulated)
- SEC v. Chenery Corp., 318 U.S. 80 (1943) (courts may not supply an agency’s missing justification when the agency has exclusive statutory authority over the issue)
- Firestone Tire & Rubber Co. v. Bruch, 489 U.S. 101 (1989) (trustee’s reasonable interpretation of plan terms may be upheld where legislature grants such authority)
- Mathews v. Eldridge, 424 U.S. 319 (1976) (balancing test for what procedural protections due process requires)
- Stenberg v. Carhart, 530 U.S. 914 (2000) (when a statute includes an explicit definition, courts must follow that definition)
- Alcala v. Director, Office of Workers' Compensation Programs, 141 F.3d 942 (9th Cir. 1998) (discusses de novo review of agency legal conclusions and acceptance of agency findings of fact if supported by substantial evidence)
- Buckingham v. Secretary of U.S. Dep't of Agriculture, 603 F.3d 1073 (9th Cir. 2010) (recites that due process requires an opportunity to be heard "at a meaningful time and in a meaningful manner")