GUAM POLICE DEPARTMENT MAJOR FRED M. CHARGUALAF, Petitioner-Appellant, v. GOVERNMENT OF GUAM RETIREMENT FUND, Respondent-Appellee.
Supreme Court Case No.: CVA19-019
IN THE SUPREME COURT OF GUAM
November 30, 2021
2021 Guam 17
Superior Court Case No.: SP0007-18; Appeal from the Superior Court of Guam; Argued and submitted on February 12, 2021; Via Zoom video conference
Joshua D. Walsh, Esq.
Razzano Walsh & Torres, P.C.
139 Murray Blvd., Ste. 100
Hagåtña, GU 96910
Appearing for Respondent-Appellee:
Joanne L. Grimes, Esq.
Carlsmith Ball LLP
1001 Bishop Street, Ste. 2100
Honolulu, HI 96813
Vincent C. Camacho, Esq.
Camacho Calvo Law Group LLC
356 E. Marine Corps Dr., Ste. 201
Hagåtña, GU 96910
CARBULLIDO, C.J.:
[1] Petitioner-Appellant Major Fred M. Chargualaf of the Guam Police Department appeals a decision of the Superior Court upholding a Declaratory Ruling by the Government of Guam Retirement Fund, which declined to adopt Major Chargualaf‘s interpretation of statutes relating to the definition of “average annual salary” for the computation of pension annuities. Major Chargualaf appeals on the grounds that the trial court‘s interpretation of the relevant statutes is incorrect and that his due process rights were violated when he was denied a hearing by the Government of Guam Retirement Fund and discovery by the Superior Court. We disagree and affirm the judgment of the trial court.
I. FACTUAL AND PROCEDURAL BACKGROUND
[2] The primary facts are not disputed. Fred M. Chargualaf has been employed by the Guam Police Department (GPD) since 1984 and holds the rank of Major. He is enrolled in the Government of Guam Retirement Fund (GGRF) Defined Benefit Plan. While Major Chargualaf was employed by GPD, the Guam Legislature enacted certain pay increases for which Major Chargualaf was later awarded several lump-sum payments as retroactive compensation. In 2013, he received $22,848.63 “that was attributable to services he performed in, and credited to, the years 2000–2008.” Recоrd on Appeal (“RA“), tab 11 (Decl. Joshua D. Walsh, Aug. 31, 2018), Ex. B (Bd. Dirs.’ Dec., Dec. 27, 2017). Major Chargualaf also received $23,886.28 in 2013, $23,886.28 in 2014, and $2,894.38 in 2015 “that was attributable to Law Enforcement Officer (“LEO“) services performed over, and credited to, the years 2009–2013.” Id. Those lump-sum amounts were not tied to any credited service performed in the years he received those amounts. The
[3] In contemplation of future retirement, Major Chargualaf “asked the Fund to provide him with an estimate of the annuity benefits he would receive upon his retirement, computed as of an assumed future retirement date.” RA, tab 5 at 2 (V. Answer to Pet., Apr. 17, 2018). As part of its calculations and under its interpretation of the requirements of
[4] Major Chargualaf disagreed, believing that the relevant statutes required his annuity to be calculated using his W-2GUs, to include the retroactive amounts paid to him in 2013, 2014, and 2015 as part of the “salaries” of the years in which they were received. RA, tab 39 at 2 (Dec. & Order, Aug. 27, 2019). He submitted a Verified Petition for Declaratory Ruling to GGRF under
[5] Major Chargualaf filed a Verified Petition for Writ of Mandate, asking the Superior Court to overturn the decision of GGRF and adopt an interpretation of the relevant statutes that would include lump-sum payments in the salary of the years in which they were received. During a scheduling hearing, Major Chargualaf asked the court to entertain a motion for discovery, which GGRF opposed because there was no factual dispute but merely a legal question of statutory interpretation. The court asked Major Chargualaf to brief the discovery issue alongside his brief on the merits, but ultimately the court did not address the request for discovery in its Decision and Order denying the petition. This appeal followed.
II. JURISDICTION
[6] This court has jurisdiction over an appeal from a final judgment of the Superior Court of Guam under
III. STANDARD OF REVIEW
[7] Issues of statutory interpretation are reviewed de novo, including an agency‘s interpretation of a statute. Ada v. Guam Tel. Auth., 1999 Guam 10 ¶ 10. We generally review the denial of a petition for writ of mandate for an abuse of discretion. Agana Beach, 2015 Guam 35 ¶ 12. “But where there are no facts in dispute and the questions presented for review are strictly questions of law[,] the court‘s review is de novo.” Guam Election Comm‘n v. Responsible Choices for All Adults Coal., 2007 Guam 20 ¶ 23 (citing Guam Fed‘n of Teachers ex rel. Rector v. Perez, 2005 Guam 25 ¶ 13).
[8] Generally, “[the trial] court‘s legal conclusion that [an appellant‘s] due process rights were not violated by аn unfair administrative hearing is reviewed de novo.” Perez v. Civil Serv. Comm‘n (Guam Dep‘t of Educ.), 2018 Guam 25 ¶ 26 (second alteration in original) (quoting Sule v. Guam Bd. of Dental Exam‘rs, 2008 Guam 20 ¶ 11). Although no administrative hearing was conducted, the question of whether GGRF‘s determination violated the due process rights of Major Chargualaf is likewise reviewed de novo. See Responsible Choices, 2007 Guam 20 ¶ 24 (“Whether a constitutional right has been violated is considered de novo.“).
IV. ANALYSIS
A. The Trial Court Did Not Err in Upholding GGRF‘s Interpretation of the Relevant Statutes on the Calculation of Average Annual Salary in Relation to Retirement Benefits
[9] The primary issue is the correct interpretation of
[10] Upon de novo review, we affirm the decision of the Superior Court because (1) GGRF‘s determination is not entitled to Chevron deference; (2) the court was not limited to the rationale forwarded by GGRF; (3) the plain language of the statute is ambiguous; and (4) the ambiguity can be resolved through the absurdity doctrine and legislative intent.
1. No deference due to GGRF‘s determination
[11] Although the theory was advanced before the Superior Court, GGRF does not challenge in its appellate brief the Superior Court‘s finding that Chevron deference does not apply. See Chevron, U.S.A., Inc. v. Nat. Res. Def. Council, Inc., 467 U.S. 837 (1984). The Chevron doctrine applies “only where the legislature ‘understood that the ambiguity would be resolved, first and foremost, by the agency, and desired the agency (rather than the courts) to possess whatever degree of discretion the ambiguity allows.‘” Port Auth. of Guam v. Civil Serv. Comm‘n (Javelosa), 2018 Guam 9 ¶ 8 (quoting City of Arlington, Tex. v. FCC, 569 U.S. 290, 296 (2013)). In other words, ”Chevron deference will apply only where the legislature expressly or implicitly intended it to apply,” and “interpretive rules” generally do not enjoy such deference. Id. As the trial court explained,
[12] We agree that Chevron deference does not apply. The definitions do not contemplate ambiguities that should be resolved by GGRF; rather, they are intended as a complete exрression by the legislature. The definitions of words and phrases in section 8104 apply “unless a different meaning is clearly indicated by the context.”
2. The Trial Court Was Not Limited to the Rationale Forwarded by the Agency for Upholding Its Interpretation of a Statute
[13] Major Chargualaf cites Perez v. Civil Service Commission (Guam Department of Educаtion), 2018 Guam 25, to argue that the trial court was limited to a “binary choice” between “accept[ing] the agency‘s determination based upon the articulated rationale from the agency, or reject[ing] the agency determination because the agency‘s determination is flawed.” Appellant‘s Br. at 23 (Jan. 13, 2020). Accordingly, Major Chargualaf argues it was error for the trial court to
[14] However, this argument results from a misreading of a quote from Perez that a reviewing court “may not substitute its views for those of the [agency], but instead must acсept the [agency‘s] findings unless they are contrary to law, irrational, or unsupported by substantial evidence.” Perez, 2018 Guam 25 ¶ 9 (alterations in original) (quoting Fagan v. Dell‘Isola, 2006 Guam 11 ¶ 11). When the quote is followed to its source in Fagan, and indeed to the Ninth Circuit case which Fagan adopted, it is clear that the “findings” referenced were merely findings of fact; the full quote from Fagan makes clear that an agency‘s conclusions of law are reviewed by the trial court de novo, meaning that the trial court would not be limited to the agency‘s interpretation:
The trial court was required to review de novo the Commission‘s conclusions of law. The trial court was also required to affirm the Commission‘s findings of fact, and any conclusions resulting therefrom, if supported by substantial evidence. This is because a reviewing body “may not substitute its views for those of the [agency], but instead must accept the [agency‘s] findings unless they are contrary to law, irrational, or unsupported by substantial evidencе.”
Fagan, 2006 Guam 11 ¶ 11 (alterations in original) (quoting Alcala v. Dir., Office of Workers Comp. Programs, 141 F.3d 942, 944 (9th Cir. 1998)).
[15] Major Chargualaf also cites to Motor Vehicle Manufacturers Ass‘n of U.S., Inc. v. State Farm Mutual Automobile Insurance Co., 463 U.S. 29 (1983), for the proposition that “an agency‘s action must be upheld, if at all, on the basis articulated by the agency itself.” Appellant‘s Br. at 23 (quoting State Farm, 463 U.S. at 50). However, that case was in the context of agency rulemaking and rescission of existing rules where delegated by the legislature to the discretion of the agency, while this matter is closer to administrative adjudication. See City of Arlington, Tex. v. FCC, 668 F.3d 229, 241 (5th Cir. 2012) (finding that declaratory ruling by FCC establishing
[16] Similarly, Major Chargualaf cites SEC v. Chenery Corp., 318 U.S. 80 (1943), without considering the full context of that decision. See Appellant‘s Br. at 23 (quoting Chenery Corp., 318 U.S. at 87). That case did establish the rule that “[t]he grounds upon which an administrative order must be judged are those uрon which the record discloses that its action was based,” but this only extends to those determinations or actions which the agency alone is authorized to make:
If an order is valid only as a determination of policy or judgment which the agency alone is authorized to make and which it has not made, a judicial judgment cannot be made to do service for an administrative judgment. For purposes of affirming no less than reversing its orders, an appellate court cannot intrude upon the domain which Congress has exclusively entrusted to an administrative agency.
Chenery Corp., 318 U.S. at 87–88. Here, statutory interpretation of any ambiguities has not been exclusively entrusted to the discretion of GGRF, and the trial court—and, consequently, this court—is not limited to the canons of stаtutory interpretation initially advanced by GGRF.
[17] Statutory interpretation should always begin with the plain language of the statute. Data Mgmt. Res., LLC v. Office of Pub. Accountability, 2013 Guam 27 ¶ 17; Aguon v. Gutierrez, 2002 Guam 14 ¶ 6. The Superior Court found that the plain language favored Major Chargualaf‘s interpretation because the language of section 8104(i) defining “[a]verage annual salary” contained “no qualifiers as to amounts that should be excluded, and a plain reading suggests that any and all amounts received in an annum count.” RA, tab 39 at 8 (Dec. & Order, Aug. 27, 2019). Nonetheless, the court ultimately found for GGRF because Major Chargualaf‘s understanding would lead to absurd results and frustrate the intent of the legislature. Id. at 7–11; see infra Part IV.A.4. Major Chargualaf argues that the Superior Court‘s determination of the plain language meaning of
[18]
[19] Major Chargualaf urges us to focus on the word “received” within the definition of average annual salary, Appellant‘s Reply Br. at 17–18 (Mar. 11, 2020), while GGRF places the emphasis on the phrase “during his years of credited service” together with the definition of “service” in section 8104(e) and the requirement that “not more than one (1) year service shall be creditable on account of service rendered during any year.”
[20] The crux of the issue appears to be the definition of “annual salary” and whether it should be read as the compensation or “salary” received within one year by an employee or what is earned within one year. The “received” within the definition of “average annual salary” does not resolve the issue because it refers to “salaries” received by a member during his or her “years of credited service,” but not when such credited service must occur in relation to the salaries to which they are credited. The ordinary meaning of “salary” tends to connote a regular amount to be paid to an
4. Major Chargualaf‘s Interpretation Would Contravene Legislative Intent
[21] “[N]otwithstanding the deference due the plain-meaning of statutory language, . . . such language need not be followed where the result would lead to absurd or impractical consequences, untenable distinctions, or unreasonable results.” Sumitomo Constr., Co. v. Gov‘t of Guam, 2001 Guam 23 ¶ 17 (quoting Bowlby v. Nelson, Civ. No. 83-0096A, 1985 WL 56583, at *2 (D. Guam App. Div. Sept. 5, 1985)). “Absurdity may result when the legislature drafts a statute using language that is broader and more sweeping than that which the legislature intended.” Id. Here, the statutory definition of “salary” is broader than that in Black‘s Law Dictionary and arguably common understanding becausе it is defined as the “amount received by an employee for service” with no reference to a fixed or agreed-upon amount or payments at regular intervals. It would not
[22]
The purpose of the [GGRF] is to provide retirement annuities and other benefits for the employees of the government of Guam . . . with the objective of encouraging qualified personnel to enter and remain in the service of the Government, thus effecting economy and efficiency in the administration of the Government.
[23] GGRF argues that adopting Major Chargualaf‘s interpretation of the statutes would be “inconsistent with the purposes and polices of the DB plan” to “be able to provide retirement benefits to all enrolled employees and their families” because it could further exacerbate the “unfunded actuarial liability” of GGRF through “pension spiking.” Id. at 14–18. But this should not affect the court‘s analysis if doing so would contradict legislative intent and usurp the legislative function. The prudence of a particular public policy remains for the sound judgment of
[24] The legislature‘s stated purpose for the Fund is both to effect “economy and efficiency in the administration of the Government” and to incentivize qualified employees to enter the service of the Government by providing for them.
[25] Nonetheless, balancing both legislative objectives supports GGRF‘s interpretation of
[26] Applying retroactive compensation towards the “salary” of the year in which the compensation was earned rather than received keeps retirement annuities linked to the actual value of service rendered by the member during his or her years of employment and the actual income that supported the employee. This interpretation is cоnsistent with the objective to motivate employees by providing for them in retirement or other circumstances without increasing the burden on GGRF‘s resources based on the timing of payments.
B. Discovery Was Not Necessary Because No Factual Dispute Existed
[27] Major Chargualaf urges this court to find that the trial court erred in failing to address his request for discovery in its Decision and Order. Appellant‘s Br. at 29–30. Major Chargualaf does not request a remand with instructions to order discovery in his prayers for relief. See Appellant‘s Br. at 33; Reply Br. at 25. Rather, he asks this court to reverse and direct the trial court to interpret the statute in his favor and grant the writ of mandate. Id. Major Chargualaf contradicts his own contention that there are factual disputes not resolved by the record on appeal: either the record is incomplete, and discovery must be had before a final determination on the merits of his arguments; or there are no factual disputes, and the remaining questions of law may properly be decided by
[28] Major Chargualaf contends he sought discovery “to understand how GGRF came to the conclusion it did in its decision” and ensure it followed the procedures required under Guam‘s Administrative Adjudication Law (“AAL“). Reply Br. at 20; Appellant‘s Br. at 30. He points to a West Virginia case which held that the procedural due process rights of a member of a police pension fund required retained counsel, depositions, the opportunity to argue the case before the board, and a written statement outlining reasons for the denial of benefits. Barron v. Bd. of Trs. of Policemen‘s Pension & Relief Fund, 345 S.E.2d 779, 784 (W. Va. 1985). Major Chargualaf highlights that there was no hearing at the agency level, that GGRF made “specific denials of factual claims he raised in his initial Petition,”5 and that GGRF asserted that its decision to deny the request was “supported by substantial evidence.” Appellant‘s Br. at 30. Major Chargualaf also argues that the inclusion of the affidavit of Paula Blas is a proffer of factual evidence he should be able to test through “the adversarial process or the rigors of discovery.” Id. at 31.
[29] GGRF asserts that “there are no questions of fact at issue in the instant case” and that the issue of how the Fund‘s interpretation of the statute came to be adopted by the Board is “not relevant to the issue at hand.” Appellee‘s Br. at 27–28. GGRF rightly points out that Barron is distinguishable in several ways from this case. Appellee‘s Br. at 26. First, Barron involved a determination of eligibility for disability benefits, whereas there was no dispute here about Major Chargualaf‘s eligibility for the retirement benefit—merely the amount due. Second, the parties in Barron disagreed about the extent of the member‘s disability—a factual determination—while the parties here agree to the basic facts surrounding Major Chargualaf‘s employment and the nature
[30] The record is undeveloped insofar as it is unclear by what process GGRF arrived at its own interpretation of the statute and denied the petition. Yet because we review de novo the merits of the statutory interpretation, an analysis of GGRF‘s own process of interpretation is unnecessary to the disposition of this case.
[31] There is no factual dispute, and the primary remaining question is a matter of law. Guam Rule of Civil Procedure 26(a)(1)(E)(xx) provides that proceedings for writs are exempt from initial discovery requirements “unless otherwise ordered by the court.” Rule 26(b)(1) provides that the scope of discovery includes “any matter, not privileged, that is relevant to the claim or defense of any party,” but Rule 26(b)(2) provides that the use of discovery “shall be limited by the court if it determines that: . . . (iii) the burden or expense of the proposed discovery outweighs its likely benefit.” Other than vague references to GGRF‘s process, Major Chargualaf does not identify what particular evidence he would request if granted the opportunity. See Reply Br. at 23–24. At the hearing, Major Chargualaf requested discovery “to show actually how the Fund has done these calculations in the pаst, [because] it would be useful for the Court to actually weigh the veracity of the legal contentions of ‘This is how we‘ve always done it.‘” Transcripts (“Tr.“) at 4 (Scheduling Conf., June 26, 2018). If allowed, this could involve extensive discovery of the confidential personnel files of hundreds of Government of Guam employees who are otherwise
[32] We do not remand and order discovery because Major Chargualaf did not request discovery in his prayers for relief, the primary facts are not disputed, the process by which GGRF adopted its interpretation is only minimally relevant, and allowing discovery on previous GGRF calculations would be unduly burdensome compared to any benefit.
C. Major Chargualaf‘s Due Process Rights Were Not Violated When GGRF Issued Its Determination on His Petition for a Declaratory Ruling without Holding a Hearing
[33] Finally, Major Chargualaf asserts that his due process rights were violated by the lack of a hearing at the agency level. Appellant‘s Br. at 3. However, this is not a traditional administrative due process case where the challenged agency decision involves a challenged factual determination along with a legal interpretation. The cases cited by Major Chargualaf all involved disputed facts decided upon by the agency, while the parties here agree to the essential facts of Major Chargualaf‘s employment status, evеntual eligibility for retirement benefits under the DB Plan, the payment he received, and the nature of those payments as retroactive compensation. The only remaining question about the amount of Major Chargualaf‘s retirement benefits was a matter of law.
[34] GGRF does not contest that it is subject to Guam‘s AAL codified in Title 5, Chapter 9 of the Guam Code Annotated, but the procedure of
[35] Major Chargualaf contends that the Superior Court erred in relying on the fact that
[36] Even if the difference in calculated benefits under the disputed interpretations amounted to a vested property interest, due process does not always require an extensive hearing even when property rights are in jeopardy. “The base requirement of the Due Process Clause is that a person deprived of property be given an opportunity to be heard ‘at a meaningful timе and in a meaningful manner.‘” Buckingham v. Sec‘y of U.S. Dep‘t of Agric., 603 F.3d 1073, 1082 (9th Cir. 2010) (quoting Brewster v. Bd. of Educ. of Lynwood Unified Sch. Dist., 149 F.3d 971, 984 (9th Cir. 1998)). In Carlson v. Perez, 2007 Guam 6 ¶¶ 35–37, we adopted the standards established by the U.S. Supreme Court in Mathews v. Eldridge, 424 U.S. 319 (1976), that “resolution of the issue whether the administrative procedures provided . . . are constitutionally sufficient requires analysis of the governmental and private interests that are affected.” Mathews, 424 U.S. at 334. When
[37] Here, Major Chargualaf had a full oрportunity through his petition for a declaratory ruling to submit his legal arguments before GGRF as to why his interpretation should prevail. Because no essential facts were at issue, an evidentiary hearing would not have provided any additional information necessary to resolve the pure question of law, and therefore would have provided no additional safeguard to any property interest. Further,
[38] GGRF was required by
V. CONCLUSION
[39] The trial court did not err because (1) GGRF‘s interpretation of Title 4, Chapter 8 of the Guam Code Annotated is consistent with legislative intent, (2) discovery was unnecessary at the trial court level, and (3) Major Chargualaf was not deprived of due process when GGRF followed the administrative procedures of
/s/
ROBERT J. TORRES
Associate Justice
/s/
ALEXANDRO C. CASTRO
Justice Pro Tempore
/s/
F. PHILIP CARBULLIDO
Chief Justice
Notes
(1) an amount equal to two percent (2.0%) of average annual salary for each of the first ten (10) years of credited service, and two and one-half percent (2.5%) of average annual salary for each year, or part thereof, of credited service over ten (10) years;
(2) in addition, there shall be added to the amount set forth in Subsection (1) an amount equal to Twenty Dollars ($20.00) multiplied by each year of credited service, the total of which shall then be reduced by an amount equal to one hundredth of one percent (.01%) of said total for each One Dollar ($1.00) that a member‘s average annual salary exceeds the amount of Six Thousand Dollars ($6,000.00);
(3) no basic retirement annuity shall exceed eight-five percent (85%) of average annual salary; and
(4) the basic retirement annuity shall not, in any case, be less than One Thousand Two Hundred Dollars ($1,200.00) per year per member.