Guam Tax Refund Class Action Lawsuit

Gibbs Law Group LLP filed a class action lawsuit on behalf of Guam residents Jeffrey and Rea Paeste, and Sharon and Glenn Zapanta in April 2011, challenging the Government of Guam’s failure to pay tax refunds to its taxpayers on time. The lawsuit also challenges the Government’s “expedited refund” program, which allows some taxpayers to receive their refunds ahead of other taxpayers who have been waiting longer.

Summary Judgment Granted in Guam Tax Refund Lawsuit

On August 21, 2012, the Honorable Consuelo Marshall of the District Court of Guam granted plaintiffs’ motion for summary judgment in the class action lawsuit against the Government of Guam for late payment of income tax refunds.  By granting summary judgment, the Court ruled that judgment for the plaintiffs could be granted as a matter of law, and there was no need for a trial.

Judge Issues Permanent Injunction in Guam Tax Refund Class Action Lawsuit

District Court Judge Consuelo Marshall issued a permanent injunction in the Guam tax refund class action lawsuit.  Gibbs Law Group and their co-counsel at Lujan, Aguigui and Perez represent taxpayers who challenged the government of Guam’s practice of delaying the release of income tax refunds owed to taxpayers, and also the system of paying refunds to certain taxpayers ahead of others.

Under the injunction, the Government of Guam must pay most tax refunds no later than six months after tax returns are due.  And the practice of “expediting” refunds to certain taxpayers has been terminated.  If the Government fails to comply with the new payment timeline or any other part of the injunction, it could potentially face a court-ordered receivership, a remedy often used in litigation as a last resort when an agency fails to implement court orders or obligations.

For the next five years, government officials will need to provide periodic reports to the plaintiffs about their efforts to timely pay income tax refunds.  The deadline for the first report is April 1, 2013.

For more information, please read the Court’s Findings of Fact and Conclusions of Law and Permanent Injunction.

Questions about the lawsuit?

More information about the suit, along with case-related documents, can be found at If you have any questions about the lawsuit, or would like to speak with the attorneys representing the class, please fill out the form to the right or call 1-800-254-9493.

Lawsuit Allowed to Proceed as a Class Action

The Government of Guam filed a motion to dismiss the lawsuit in August 2011. In its motion, the Government asked the Court to throw out the case, and specifically challenged the ability of the Plaintiffs to request improvements to GovGuam’s tax refund practices going forward. The court overruled this argument and allowed the case to move forward.

In May 2012, Judge Marshall ruled that the lawsuit can proceed on behalf of a class of taxpayers defined as:

All persons and entities who have filed or will file a claim for refund of an overpayment of the Guam Territorial Income Tax: (i) which the Government of Guam has processed or will process and deemed valid; (ii) who have met the procedural requirements outlined in 26 U.S.C. §§ 7422(a) and 6532(a); and (iii) who nonetheless have not received or will not receive their refund six months after filing the claim for refund.