Limtiaco v. Camacho

Background

In 2003 Guam’s Legislature authorized approximately $400 million in bonds because the territory lacked local revenues. Guam’s attorney general refused to approve the contracts, citing the Organic Act’s 10 percent limit on public debt based on “aggregate tax valuation.” The Governor asked Guam’s highest court to declare the bonds lawful, and that court held the limit used appraised (market) values. The attorney general appealed; Congress later removed Ninth Circuit jurisdiction and the Ninth Circuit dismissed the appeal, after which the case reached the U.S. Supreme Court.

Reasoning

The Supreme Court first decided jurisdiction. It held the Ninth Circuit’s grant of review suspended finality until that court dismissed the appeal, so the Supreme Court could hear the case. On the merits the Court said “tax valuation” most naturally means assessed valuation—the value used to compute property taxes—not appraised or market value, and reversed the Guam Supreme Court.

Real world impact

Because Guam assesses property at 35 percent of market value, using assessed valuation for the 10 percent cap yields a much lower debt ceiling than using appraised value. This makes it harder for Guam officials to borrow based on higher market appraisals. The Court also limited its timing holding to the unusual procedural facts here.

Dissents or concurrances

Justice Souter, joined by three Justices, agreed the petition was timely but disagreed on valuation. He argued “tax valuation” could mean appraised value and that Congress likely intended market value, warning that assessed-value caps could be manipulated by local officials.