DFS suit dismissed - KUAM.com-KUAM News: On Air. Online. On Demand.

DFS suit dismissed

by Ken Quintanilla

Guam - With the clock ticking until Lotte Duty Free officially takes over the concessionaire space at the Guam International Airport Authority, Superior Court Judge Michael Bordallo gave his ruling this afternoon on DFS's request for a temporary restraining order to prevent Lotte from moving in this weekend.

Following a hearing Wednesday, Ex-Parte Judge Michael Bordallo dismissed DFS's requests for a TRO clearing the way for Lotte to continue with its move into the GIAA.

However according to Lotte's attorney Cesar Cabot Judge Bordallo not only dismissed the TRO, he dismissed the entire lawsuit all together.

According to his decision and order, Bordallo dismisses DFS's action based upon its lack of subject matter jurisdiction along with DFS having failed to exhaust its administrative remedies prior to commencing its action.

Aside from the TRO's dismissal, the original complaint filed on May 30 was also dismissed. According to Cabot, in today's order, the court found that DFS's May complaint did not comply with Guam rules and procedures and Guam law. He further states the court found that the pleadings by DFS were legally deficient as they did not comply with the requirements of Guam law and therefore because the original complaint was legally inadequate the court lacks subject matter jurisdiction. He ultimately says therefore everything stemming from the complaint is legally procedurally incorrect including the application for TRO.

Cabot says what was surprising was that along with the court rejecting the TRO, it went beyond that and dismissed the whole case without prejudice.

DFS had filed the TRO on Monday - just two days after DFS and Lotte had already started the transition over the weekend.

Under the contract with Lotte, the airport is guaranteed rental revenues to increase from the current $4.5 million to $15.4 million with the potential for further increased revenues based on percentage rent.  In addition, Lotte has also agreed to improve the airport's retail concession space by investing a minimum of $23 million in capital improvements as well as renovating the airport food court and restroom facilities at no additional cost to the airport. Lotte has already hired 125 people.

Lotte meanwhile is expected to fully takeover on Sunday at 12:01am and is set to start operating within four hours thereafter.

Judge Bordallo dismissed the request for a TRO without prejudice which means the plaintiffs can still bring suit at a later time. DFS attorney Bill Blair refrained from commenting as he is still consulting his client but says this is definitely not over. It was earlier this week when he told KUAM that even if the TRO was not granted, DFS would intend to continue to pursue remedies saying "the battle will go on." Lotte attorney Cesar Cabot meanwhile says he's naturally elated adding he believes the court made the right decision and further confirmed what Lotte has been arguing all along that the contract is legal and entered into accordance with Guam law. He says Lotte can now concentrate on the task at hand and begin the long standing relationship with the airport and the people of Guam to provide first class facilities to our island.

The Guam International Airport also issued a comment about the judge's decision. GIAA executive manager Charles Ada says their pleased the court not only refused to grant DFS' TRO but also dismissed its lawsuit. Ada added, "the procurement process for the concession was conducted in a lawful manner and fair to all of the proposers, including DFS".

DFS meanwhile said they are "truly are truly disappointed that the TRO was not granted."  They issued the following comment following the ruling:

"There was no decision as to the fundamental factual issues of DFS's Complaint. The Court's decision was based solely upon procedural grounds. We are fully prepared to continue with our litigation and will continue to seek to redress our rights. DFS and the People of Guam have the right to expect integrity in the procurement process. DFS will continue to defend its trusted reputation in Guam and worldwide among its partners, suppliers, and other airports. Regardless of our efforts to hold Lotte and the Airport accountable for their conduct, DFS has been fully cooperative through the transition period and will continue to cooperate with the move out on a timely schedule. Over the next few days, we will fully consider our options as to how best to ensure that the procurement process remains a fair and lawful one."

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