Entertainment Devices or Illegal Gambling Machines? Guam’s High Court Tells Lower Court to Decide

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Guam – The Guam Supreme Court has overturned 2 Superior Court decisions dealing with Guam Music’s gaming machines, sending the cases back to the Superiror Court which must now decide whether the they are entertainment devices or illegal gambling machines.

In a consolidated opinion handed down yesterday [Thursday], the High Court reversed the Superior Court’s decisions in both Guam Music, Inc. v. Camacho and Rapadas v. Benito v. Guam Music.

READ the Supreme Court Decision HERE

The cases date back to 2008 when Rev & Tax refused to renew Guam Music’s bid for a renewal of its license to operate the gaming machines.

Guam Music appealed and asked to be allowed to continue operating its gaming machines until the appeal was decided. Rev & Tax then issued the license renewal, under orders from then Governor Felix Camacho.

But then Guam Attorney General Alicia Limtiaco stepped in and demanded DRT revoke the licenses arguing the machines are illegal gambleing devices.

The Superiror Court granted the AG’s request to revoke the licenses, but Guam Music responded with a motion to intervene and to stay the order.

But those requests were denied “on the grounds of mootness”:

* in one case “because the Superior Court found that reissuance of expired licenses would provide Guam Music with no effectual relief.”

* and in the other case the Superior Court also cited mootness “because it held that it was unable to identify any practical relief that the setting aside of the order, judgment and writ would grant GMI.”

The Supreme Court ruled that “the trial court should have provided GMI with the opportunity to present evidence and arguments”  on the issue of mootness and they determiend that the lower court did not consider “administration and enforcement provisions … which apply to the taxes paid”  by Guam Music to operate the gaming machines.

READ the release from the Guam Judiciary in FULL below:

The Supreme Court of Guam today issued a consolidated opinion in the cases of Guam Music, Inc. v. Camacho and Rapadas v. Benito v. Guam Music, Inc., 2011 Guam 28, reversing the trial court’s Decisions and Orders in SP0219-08 and SP0141-08. The Supreme Court remands both matters for determination of what remedies Guam Music, Inc. (“GMI”) is entitled to, including any remedies under Title 11, Chapter 26, Article 1 of the Business Privilege Tax Law.

In 2008, Department of Revenue and Taxation (“DRT”) issued GMI a “License/Registration Non-Renewal Notice” to operate certain amusement devices. GMI appealed and requested its licenses be reissued pending the appeal. After the former Governor of Guam directed DRT to issue new licenses to GMI, DRT complied. Subsequently, then-Attorney General Alicia Limtiaco issued a letter demanding DRT revoke the licenses issued, and filed a
Petition for Writ of Mandamus to compel DRT to so act. The Superior Court granted Limtiaco’s Writ of Mandamus.

After the Writ of Mandamus was issued, GMI, who had not been a named party, filed a Motion to Intervene and a Motion to Stay Enforcement of the Order Entered, both of which were denied by the Superior Court. GMI appealed to the Supreme Court. Before the Supreme Court issued its opinion on the Motion to Intervene and the Motion to Stay Enforcement in SP0219-08, GMI requested the Superior Court issue a Writ of Mandamus compelling DRT to reissue the 2008-2009 licenses.

After the Supreme Court issued its opinion on the Motion to Intervene and the Motion to Stay Enforcement, on remand, GMI filed a Motion to Set Aside, Motion for a New Trial and Motion to Stay Proceedings in SP0141-08.

In SP0219-08, GMI was denied its Writ of Mandamus to compel DRT to reissue the licenses on the ground of mootness because the Superior Court found that reissuance of expired licenses would provide GMI no effectual relief. In SP0141-08, the Superior Court denied GMI’s Motion to Set Aside, Motion for a New Trial and Motion to Stay Proceedings also on the ground of mootness because it held that it was unable to identify any practical relief that the setting aside of the order, judgment and writ would grant GMI.

The Supreme Court reversed the trial court’s finding of mootness in both cases, finding that the trial court did not consider the administration and enforcement provisions found in Title 11, Chapter 26, Article 1, which apply to the taxes paid by GMI to operate the contested amusement devices. Further, the Supreme Court held that the trial court should have provided GMI with the opportunity to present evidence and arguments on the sua sponte finding of mootness.

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