Federal court throws out lawsuit seeking to halt Guam hospital project

By Mar-Vic Cagurangan

A federal judge on Wednesday dismissed Attorney General Douglas Moylan's lawsuit challenging the governor's plan to build a new hospital on private properties condemned by the Guam Housing and Urban Renewal Authority.

Judge John C. Coughenour of the District Court of Guam adopted Magistrate Judge Michael J. Bordallo's report and recommendation, finding a lack of jurisdiction and thus leaving out discussion of the merits of the case.

The lawsuit filed in December 2024 entailed a patchwork of claims against the legality of GHURA's land acquisition and Gov. Lou Leon Guerrero's move to earmark a portion of the American Rescue Plan funds for her proposed $1.4 billion medical campus.

"Today’s ruling allows us to turn the page. The people of Guam deserve cranes instead of courtrooms, construction instead of conflict, and a government focused on delivering results," the governor's office said in a statement.

"We will continue moving forward with urgency to build the Mangilao medical campus because the need for a world-class hospital did not pause while this lawsuit was pending. If anything, it became even more apparent," the statement reads.

Moylan said he had anticipated Coughenour's ruling, which he plans to elevate to the Ninth Circuit Court.

"We have 30 days to appeal the decision," he said, noting that the federal court's procedural ruling did not touch on the core arguments of the case.

"The decision appears to simply adopt the recommendations by the lower magistrate Judge Bordallo, which were on procedural legal grounds," Moylan said.

"We respectfully disagree and will exercise our right of appeal on behalf of our client to protect us from indebting our people for amounts the Guam legislature did not appropriate," he added.

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The governor's office had argued from the very beginning that the lawsuit was outside of federal court's jurisdiction.

In a 2024 civil action filed in the Superior Court, GHURA listed 169,795 sqm. of land for taking under eminent domain. They are owned by Hong Yi Inc., Dr. Joel Joseph and “other unknown owners."

“The use for which the property is to be taken is for use as a site for a new hospital and medical complex and community development projects,” states GHURA's court filing."

The properties were to be purchased with $12.5 million in ARPA funds the governor loaned to GHURA, in an agreement that Moylan described in his lawsuit as “surreptitious” and riddled with legal anomalies.

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In dismissing the case, Coughenour pointed out that "rather than raise specific objections" to Bordallo’s analysis, the attorney general presented "a variety of procedural arguments." 

Douglas Moylan

Coughenour also dropped "government of Guam" as Moylan's co-plaintiff in the lawsuit, upholding Bordallo's argument that

"the governor holds the supreme executive power for the government of Guam."

In the event of a conflict over the government of Guam’s interest, the attorney general must yield control over litigation to the governor, Bordallo wrote in his earlier report.

"Today’s decision undermines the U.S. Congress’ mandate that the attorney general be the chief legal officer of the government of Guam to protect the people of Guam and government of Guam against illegal and improper spending, especially when the Guam legislature has not authorized $1.4 billion in debt and spending," Moylan said.

"Most disconcerting is that one of the legal errors in the decision includes the attorney general not being able to represent the  government of Guam 

and the People of Guam and to petition the courts in the name of our client," he added.

Moylan cautioned that the court's decision "has lingering and longer-lasting negative impact" on the government's structure and the attorney general's role as a watchdog.

The governor's office, for its part, argued that the lawsuit "had real consequences."

"Every month spent in unnecessary litigation was another month the people of Guam waited for a modern hospital capable of expanding access to care,

strengthening our emergency preparedness, supporting our military and civilian communities and saving lives," it added.

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