Agana Bay Development Company (Hong Kong) Ltd. v. Supreme Court of Guam, Dillingham Corporation of the Pacific, Real Party in Interest

ANTHONY M. KENNEDY, Circuit Judge

(dissenting).

In my view the Organic Act of Guam does not authorize the territorial legislature to transfer the appellate jurisdiction of the District Court of Guam to a locally-created court. Thus I would affirm the judgment of the district court.

*959This case presents a difficult question of statutory interpretation, primarily involving the following convoluted sentence in section 22(a) of the Organic Act:

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.

48 U.S.C. § 1424(a). By this language the Act vests in the district court original jurisdiction of federal question cases and all local matters in Guam. It also provides that the territorial legislature can divest the district court of some or all of its original jurisdiction over local matters by transferring that jurisdiction to locally-created courts, thereby allowing the local judicial system to expand its capability as litigation increases. The district court would then have appellate jurisdiction over such cases as determined by the legislature.

My brothers acknowledged that section 22(a) does not explicitly authorize Guam to transfer the district court’s appellate jurisdiction to a local court. However, they find such a transfer included within the legislature’s power to “determine,” and thus to extinguish, the appellate jurisdiction of the district court. Moreover, section 22(a) literally empowers the territorial government to establish a “court or courts” in addition to the district court and to prescribe the jurisdiction and procedure of these other courts; this power is not expressly limited to “inferior” courts or courts of original jurisdiction.

However, the Organic Act must be construed to give force and effect to all its provisions, and no language should be taken out of context and construed without reference to the whole territorial system established by Congress. See Carter v. Gear, 197 U.S. 348, 25 S.Ct. 491, 49 L.Ed. 787 (1905). I think Congress would have spoken more directly had it intended to enable the territorial legislature to substitute a local appellate court for the appellate division of the district court. Unlike the majority, I find it significant that section 22(a) says nothing about the transfer of appellate jurisdiction to local courts, while it expressly authorizes such a transfer of the district court’s original jurisdiction. I would conclude that such a transfer of appellate jurisdiction was not authorized by Congress.

I also do not agree with the majority that the power to “determine” the appellate jurisdiction of the district court necessarily includes the power to abolish it. I think it was more likely intended to permit the local legislature to decide what cases were serious enough to be appealable. This power may be compared to that of Congress under article III to regulate the appellate jurisdiction of the Supreme Court. Congress has never tried wholly to eliminate the Court’s appellate jurisdiction, and thus we cannot tell how far this .power extends. Professor Hart has suggested it would not permit Congress to “destroy the essential role of the Supreme Court in the constitutional plan.” Hart, The Power of Congress to Limit the Jurisdiction of Federal Courts: An Exercise in Dialectic, 66 Harv.L.Rev. 1362, 1365 (1953). Similarly, I would conclude that the power of Guam to determine the appellate jurisdiction of the district court would not allow that jurisdiction to be entirely extinguished. Moreover, for Guam to abolish all appellate jurisdiction would be a wholly irresponsible legislative act, raising serious constitutional questions. It is unlikely that Congress intended to give the Guam legislature the power to commit such an act, and such intent should not be assumed in the absence of express language to that effect. To rest the validity of the Court Reorganization Act, as the majority does, on the assumption that such power *960validly exists, is to place the Act on a most infirm foundation.

My conclusion that Congress did not intend to authorize such a transfer of jurisdiction is supported by subsequent legislative history. In 1951, Congress amended the Organic Act to expand the Ninth Circuit’s appellate jurisdiction to all final decisions of the district court, rather than the limited categories contained in the original section 23.1 In 1958 Congress added a paragraph to section 22(a) of the Organic Act, giving explicit authorization for the three-judge appellate court procedure that had been implemented by Guam Public Law 17.2 These amendments indicate a congressional purpose to sanction a prescribed system for federal court review of local court decisions. Every word of the second paragraph of the amended section 22(a) would become superfluous if Guam could remove the appellate jurisdiction of the district court. This pattern of congressional approval and acceptance cannot now be made completely moot by the Court Reorganization Act.

The Court Reorganization Act makes sweeping changes in the judicial system developed in Guam over the previous 23 years. Prior to 1974, virtually all significant matters were within either the original or appellate jurisdiction of the district court, and reviewable by this court and the United States Supreme Court. Under the new system, only cases “arising under” federal law or involving the territorial income tax remain within the federal court jurisdiction; as to other matters there is no appeal beyond the Supreme Court of Guam. Important federal issues can be presented in cases which do not “arise under” federal law. See 13 C. Wright, A. Miller, & E. Cooper, Federal Practice and Procedure § 3562 (1975). It seems unlikely to me that Congress intended to confer on the territorial legislature the power to eliminate review in the federal court system of all claims raised in the territorial courts.3

*961There is no evidence in the legislative history of the Organic Act of 1950 that Congress intended section 22(a) to give the territorial legislature the option of creating a local supreme court having the power of ultimate review. Earlier versions of the Organic Act included provisions for a congressionally-created supreme court for Guam; these were eliminated in favor of a federal district court.4 The district court was established for the purpose of providing litigants in the Western Pacific with direct access to the federal court system.5 Because of concern that there would not be sufficient federal question litigation to justify a separate district court in Guam, the court was given original jurisdiction in local matters. It was also envisioned that the district court would serve as an appellate body once local courts were established.6 The apparent reason for eliminating the provision for a local supreme court was to avoid duplicative judicial machinery, rather than to allow local authorities to put certain controversies beyond review by the federal court system.

A comparison of Guam’s judicial system with those established in other territories provides no support for the majority’s view. Although there are many differences, there are indications that the system established in Guam was intended to be similar to those of the other territories.7 Congress assured that there would be review by article III courts of all cases in the former territories of Hawaii and Alaska and still maintains that policy for the Virgin Islands. Cases in the local courts of the Virgin Islands may be transferred or appealed to the District Court of the Virgin Islands, 48 U.S.C. § 1612, and subsequent review is authorized by Congress on the same basis as for other district courts. 28 U.S.C. §§ 1252, 1291, 1292, 1294. Congress has provided for United States Supreme Court review of decisions by the Supreme Court of Puerto Rico on virtually the same terms as for state court decisions. Compare id. § 1257 with id. § 1258. I do not think Congress intended to give Guam, of all its territories, the unchecked power to transfer appellate jurisdiction to its local courts and by the same stroke to deny review by any article III tribunal.

For the reasons set forth above I think that the Guam legislature’s action in setting up the Supreme Court of Guam was beyond the scope of its powers under the Organic Act.

Accordingly, I respectfully dissent.

. Section 23 of the Organic Act originally provided for appeal to the Ninth Circuit from final decisions of the district court involving federal law, habeas corpus, and civil cases with $5,000 in controversy; direct appeals to the Supreme Court were allowed as in 28 U.S.C. § 1252. The 1951 amendment repealed § 23, and decisions of the District Court of Guam were made reviewable in precisely the same manner as those of United States district courts under 28 U.S.C. §§ 1252, 1291-92, & 1294. Ch. 655, § 55-56, 65 Stat. 728-30.

. The amendment added the following paragraph to section 22(a):

Appeals to the District Court of Guam shall be heard and determined by an appellate division of the court consisting of three judges, of whom two shall constitute a quorum. The judge appointed for the court by the President shall be the presiding judge of the appellate division and shall preside therein unless disqualified or otherwise unable to act. The other judges who are to sit in the appellate division at any session shall be designated by the presiding judge from among the judges assigned to the court from time to time pursuant to section 1424b(a) of this title. The concurrence of two judges shall be necessary to any decision by. the District Court of Guam on the merits of an appeal but the presiding judge alone may make any appropriate orders with respect to an appeal prior to the hearing and determination thereof on the merits and may dismiss an appeal for want of jurisdiction or failure to take or prosecute it in accordance with the applicable law or rules of procedure.

Pub.L.No. 85-444, 72 Stat. 178.

This amendment was described as “an additional paragraph recognizing and making suitable procedural provisions for the appellate division of the district court as it now exists under the local law.” S.Rep.No.1582, 85th Cong., 2d Sess., 2 U.S.Code Cong. & Admin. News 2623 (1958). It was thought that this addition would “eliminate any doubt as to the status of the appellate division.” Id. at 2629.

.My concern is particularly acute for residents of Guam who are subject to the personal jurisdiction of the local courts. Persons born in Guam are United States citizens, 8 U.S.C. § 1407, and may have important federal claims in defending actions which do not “arise under” federal law.

The majority opinion seeks to limit its holding to approve the transfer of appellate jurisdiction only for local, nonfederal cases. Such a distinction has no support in the language of section 22. The federal question wording there is a grant of original jurisdiction to the district court, and Guam is authorized to transfer original jurisdiction in “other” cases to the local courts. This restriction does not modify the clause empowering the legislature *961to “determine” the district court’s appellate jurisdiction.

Indeed, the majority refuses to limit the potential jurisdiction of the Guam courts to non-federal matters transferred from the district court’s original jurisdiction. Their rationale would thus allow the legislature to give the local courts concurrent jurisdiction of federal questions as well. Such cases could not be removed to the federal district court, since the local courts of Guam are not state courts. 28 U.S.C. § 1441; cf. id. § 1451 (defining District of Columbia Superior Court as a “state court” for removal purposes); 48 U.S.C. § 864 (authorizing removal from courts of Puerto Rico as if they were state courts). And, as noted, no appeal is possible from the Supreme Court of Guam.

.The Interior Department’s first proposal for the Guam Organic Act would have authorized both a supreme court and inferior courts in the Territory. The decisions of the supreme court would have been reviewable by the federal district court in Hawaii. See H.Rep.No.1677, 81st Cong., 2d Sess., 2 U.S.Code Cong.Serv. 2840, 2847 (1950). H.R. 7273, 81st Cong., 2d Sess. (1950), would have provided Ninth Circuit review of decisions by the Supreme Court of Guam, and the Northern District of California would have been extended to include Guam. See also S. 1892, 81st Cong., 2d Sess. (companion bill). See generally 96 Cong.Rec. 7576-77, 11078-82 (1950). An earlier bill set up a District Court of Guam and provided only for additional courts of inferior jurisdiction. S.185, 81st Cong., 2d Sess. (1950).

. See 2 U.S.Code Cong.Serv. 2840, 2843 (1950).

. The text of these amendments was suggested to the Senate Committee by Judge Albert B. Maris, who acted as judicial advisor to the Territory of Guam. See id. at 2852-53.

. See Letter of Judge Maris, id. at 2852 (analogizing judicial system for Guam to that adopted for Virgin Islands); Letter of J. A. Krug, Secretary of the Interior, id. at 2846 (original proposal for Organic Act modeled upon those of the other territories).