Supreme Court Orders Water Commission to Revisit Decision on West Maui Streams

posted in: September 2012, Water | 0

The losing streak continues for the state Commission on Water Resource Management. And the environmentalists, farmers, and native Hawaiian cultural practitioners seeking to restore stream flow in West Maui couldn’t be happier.

On August 15, the Hawai`i Supreme Court vacated the commission’s June 2010 decision to amend the interim instream flow standards (IIFS) for only two of four streams in West Maui that native Hawaiian and environmental groups sought to restore.

The court issued its decision shortly after 9 a.m.

“I didn’t have my cell phone on and the Earthjustice attorneys were calling me,” says taro farmer John Duey, president of Hui o Na Wai `Eha. “I got an email at 10 and started reading [the decision] right away. I started pounding on the desk, ‘Hooray! Hooray! Hooray!’”

In 2004, the Hui — which includes West Maui residents, many of them kuleana landowners — joined the Maui Tomorrow Foundation in petitioning the Water Commission to amend the IIFS for `Iao, Waikapu and Wai`ehu streams and Waihe`e River, which are collectively known as Na Wai `Eha (the four great waters).

At the time, the groups were concerned that the Wailuku Water Company (WWC) was selling, or possibly even wasting, unallocated diverted water rather than returning it to the streams. WWC is a remnant of the Wailuku sugar company and controls most of the plantation-era ditches that divert tens of millions of gallons of water a day from Na Wai `Eha.

After the ensuing contested case hearing concluded in 2009, the majority of the commission decided to restore about 13 million gallons of water a day (mgd) to Wai`ehu Stream and Waihe`e River and none to `Iao and Waikapu streams. That left WWC and Hawaiian Commercial & Sugar (HC&S) free to divert more than 54 mgd via their ditch systems.

Contested case hearing officer and then-commissioner Lawrence Miike vigorously dissented, and Hui o Na Wai `Eha and the Maui Tomorrow Foundation (Hui/MTF), quickly appealed. The groups were later joined by the Office of Hawaiian Affairs (OHA).

In its decision last month, the Supreme Court found that the commission had failed to properly address the effect the amended IIFS would have on traditional and customary native Hawaiian practices and the feasibility of protecting any affected practices. The commission had also “violated the public trust” when it failed to fully consider all instream uses to which witnesses testified during the hearings and erred in its evaluation of alternative water sources, HC&S’s acreage, and system losses.

The court directed the commission to do the following:

  • Reconsider the effect the IIFS amendments have on native Hawaiian practices and the feasibility of protecting affected practices.
  • Consider evidence that `Iao and Waikapu streams can support various instream uses.
  • Reevaluate the determination that HC&S may use Na Wai `Eha water to irrigate two sandy, porous fields (921 and 922).
  • Reasonably estimate system losses, keeping in mind the commission’s duty to protect instream uses to the extent practicable.
  • Revisit the analysis of a once heavily used well (Well No. 7) and recycled water as alternative water sources.

“When I look at ‘Iao and Waikapu streams, they’re bone-dry, nothing but skeletal remains. The Supreme Court’s decision restores my hope that the law stands for something, and that each of Na Wai ʻEhaʻs four streams will flow like justice from mauka (mountain) to makai (ocean),” said John’s wife, Rose Marie Hoʻoululahui Lindsey Duey, in a press release issued by Earthjustice, the law firm that has represented Hui/MTF throughout the proceedings.

Maui Tomorrow Foundation executive director Irene Bowie called the decision an “historic victory upholding Hawai‘i’s public trust doctrine.”

The decision marks the fourth time the Supreme Court has rejected a Water Commission decision (or the fifth, if one counts the court’s two decisions regarding the Waiahole Irrigation System — a.k.a. Waiahole I and Waiahole II — separately).

“They’ve been reversed every time,” says Alan Murakami, a Native Hawaiian Legal Corporation attorney who represents parties appealing a similar case in East Maui.

The Water Commission had no comment on the court ruling as of press time.

“This is a very complex issue and commission members have not yet had time to review it in detail,” wrote Deborah Ward, information specialist with the state Department of Land and Natural Resources, in an email to Environment Hawai`i.


“In this appeal, the state and companies [WWC and HC&S] not only defended the restoration of minimal or no flows, but even argued that the court had no jurisdiction, and the public had no right, to enforce the public trust. The court flatly rejected that argument,” Earthjustice stated in its press release.

Indeed, the issue of whether or not courts have jurisdiction to hear appeals regarding IIFS took up a significant portion of the court’s 88-page decision.

In its filings in the case, Earthjustice cited a footnote in the court’s 2000 decision regarding waters diverted by the Waiahole Ditch from Windward to Central O`ahu (Waiahole I), which states that while statutes and rules don’t require a contested case hearing on petitions to amend IIFS or on water use permit applications [WUPA] for new uses, constitutional due process mandates one because of the individual instream and offstream rights, duties, and privileges at stake. If a contested case hearing is required by law, it can be appealed in court.

The Water Commission, WWC, and HC&S argued that the Waiahole I footnote indicates that the court heard the appeal of the IIFS in that case only because permit applications were also being appealed. Earthjustice argued the footnote gave the court jurisdiction to review IIFS alone.

The court found that the jurisdictional language from Waiahole I was “susceptible to both interpretations.” However, in reviewing its other cases regarding due process, the court concluded that it had jurisdiction to hear Hui/MTF’s appeal because “the IIFS, independent of any WUPA, affects property interests of Hui/MTF’s members.”

The court cited testimony from Hui and Maui Tomorrow members whose property rights appeared to be affected by the lack of water in Na Wai `Eha.

For example, `Iao Stream runs through property owned by the Dueys. John testified that he wants to restore the 17 or so lo`i on their land that require water from the stream, but are limited to farming two of them because there isn’t enough water. Taro farmer Hokuao Pellegrino also has the same problem with his efforts to restore ancient lo`i using water from Waikapu Stream.

The court also noted that Maui Tomorrow supporter and kumu hula Roselle Keli`ihonipua Bailey submitted testimony stating that the lack of flowing water makes her gathering practices impossible.

“[D]ozens of others testified about their similar interests,” the court wrote. “The question before the court today, a question we answer in the affirmative, is whether these interests constitute ‘property interests’ for the purpose of due process analysis.”

In response to the state’s and HC&S’s arguments that traditional and customary rights and appurtenant rights do not rise to the level of property interests, the court pointed out that in this case, “affected parties own or live on land in the area and rely on the water to exercise traditional and customary rights, including kalo farming. What’s more, the water code supports their entitlement to water for kalo farming. …

“When the Commission issued a [decision and order] retaining the existing IIFS for `Iao and Waikapu streams, it necessarily affected the Dueys’ and Pellegrino’s access to water because it endorsed the upstream diversions that remove water from `Iao and Waikapu streams, apparently finding that the ‘importance’ of those diversions outweighed the importance of downstream uses.”

In addition to affecting property rights, the setting of IIFS is in general a complex process requiring significant analysis and fact-finding, the court found.

“Unlike establishing a WMA [water management area], the analysis supporting a determination of an IIFS requires more than a yes/no decision, but rather requires the commission to weigh serious and significant concerns, including: ‘the need to protect and conserve beneficial instream uses of water,’ ‘the importance of the present or potential instream values,’ ‘the importance of the present or potential uses for noninstream purposes.’ and ‘the economic impact of restricting such uses.’ Indeed, in Waiahole I, the Commission itself advocated for due process rights in proceedings to determine IIFS,” the court wrote.

A kuleana landowner cannot, in the middle of the permitting process, ask the commission to raise the IIFS to accommodate his or her needs, the court pointed out.

“[T]he ramifications of an erroneous IIFS could offend the public trust, and is simply too important to deprive parties of due process and judicial review,” it stated.

“In short, the IIFS matter. They have both immediate and lasting impacts on individual water users,” the court wrote.

Native Rights

The commission’s decisions regarding the Na Wai `Eha IIFS were based largely on the needs of amphidromous species, which require mauka to makai stream flow to complete their life cycles. They include hihiwai (snails), `opae (shrimp), and several fish species known as `o`opu.

Because `Iao Stream has a large channelized section in its lower reaches that includes a 20-foot drop, and because it was debatable whether Waikapu Stream ever reached the sea, the commission found they had little potential to support amphidromous species. Thus, it chose not to require any restoration of flow to those streams.

The Hui/MTF and OHA argued that the commission’s decision failed to protect native Hawaiian traditional and customary rights. And the court agreed.

Although the commission’s decision documents various native Hawaiian practices in the area, including taro farming, “nothing in the decision indicates that the majority even considered the feasibility of protecting those traditional and customary rights,” it wrote.

First, the decision not to restore `Iao and Waikapu effectively denies kuleana landowners who take water directly from those streams what they need to grow taro, the court found. The decision doesn’t even mention the kuleana diversion systems off `Iao and Waikapu streams, the court noted.

With regard to gathering rights, the court found that the commission provided no analysis of its decision’s effect on them.

The state, in its oral arguments, suggested that providing flows sufficient to support amphidromous species (which are collected by native Hawaiians) in Waihe`e River and Wai`ehu adequately protected traditional and customary practices. The court, however, noted that the commission’s own decision stated that gathering rights encompass several species other than amphidromous ones.

“[T]he commission does not explain its focus on amphidromous species above the evidence of other instream uses. Even if the `Iao and Waikapu streams may not support amphidromous species, evidence that they can support other instream uses must be weighed against non-instream uses,” the court wrote.

Public Trust Violations

“The commission violated the public trust in its treatment of diversions,” wrote the court, which found several errors in the commission’s decision that seemed to allow millions of gallons a day of Na Wai `Eha water to be wasted on porous fields and lost in WWC’s and HC&S’s vast, unlined irrigation systems while alternative water sources went underused.

Acreage: First, the commission erred when it included HC&S fields 921 and 922 in the acreage that relies on Na Wai `Eha water. That decision, the court found, was based on speculation that HC&S was soon going to lose wastewater provided by Maui Land and Pineapple (MLP) that it used to irrigate fields 921 and 922. Those two fields are “scrub land” that HC&S began cultivating only after reaching an agreement with MLP in the mid-1990s, under which MLP delivered wastewater from its cannery to them.

After the close of the evidentiary portion of the contested case hearing, newspaper articles reported that MLP was going to cease its pineapple operations and its successor planned to farm truck crops. Although Hawai`i Rules of Evidence allow the commission to take note of facts reported in newspapers, the commission did much more than that, the court found.

“[I]t predicted the impact of those facts on HC&S’s water supply,” the court wrote, adding that evidence rules don’t allow the commission to “take judicial notice of a possible effect of a change in ownership in the pineapple cannery. … [T]he prediction that wastewater will no longer be available is purely speculative. In fact, one of the commission’s [findings of fact] contradicts this speculation, stating that ‘due to the shutdown of MLP’s cannery operation, MLP wastewater will only be able to supply approximately half of the irrigation requirements of Fields 921 and 922 in the future.’”

What’s more, the commission failed to explain why it included fields 921 and 922 in HC&S’s acreage, while it excluded a similarly porous field, 920, because it consumed too much water.

“The record does not contain sufficient analysis to support the conclusion that fields 921 and 922 should be treated differently from field 920,” the court wrote.

System Losses: The commission estimated that between 13 and 16 mgd are lost from irrigation systems in the Na Wai `Eha area. “Briefly stated, losses in the water system of Na Wai `Eha are massive,” the court wrote.

The commission concluded that WWC and HC&S could halve their system losses, but the court found that the commission provided no explanation of how it arrived at that estimate.

“In choosing a number that appears to be arbitrary, the commission could have significantly over- or under-estimated the potential for mitigation of losses in HC&S’s and WWC’s water systems,” the court wrote.

Well No. 7: One of the biggest points of contention has been the commission’s finding that only 9.5 mgd from HC&S’s Well No. 7 could be considered a practicable alternative to diverted water. Historically, HC&S pumped an average of more than 20 mgd from Well No. 7, but the company has minimized its use over the past 25 years.

During the contested case hearing, HC&S claimed it would cost millions of dollars to pump more water from the well and that increased pumping would exacerbate the strain on the underlying aquifer. The commission adopted this testimony as fact and decided that aquifer effects, as well as the financial burden HC&S will have to bear to reduce system losses, limit the practical use of Well No. 7 to 9.5 mgd.

The court found that the commission did this without assessing evidence on record contradicting HC&S’s arguments, including a letter to the commission from HC&S itself, which stated that its wells have pumped the Paia and Kahului aquifers for more than 100 years “without any longer term deterioration in water quality.” The commission also set 9.5 mgd as the practicable alternative amount, knowing that it lacked any economic analysis of the impact that pumping more water from Well No. 7 would actually have on HC&S, the court found.

“The commission erred when it made its decision regarding Well No. 7 based on cost while explicitly acknowledging that it did not have the data it needed to truly analyze cost. … When such critical information is missing, the commission must ‘take the initiative’ to obtain the information it needs” the court wrote, adding, “Where the commission’s decision making does not display ‘a level of openness, diligence, and foresight commensurate with the high priority these rights command under the laws of our state,’ the decision cannot stand.”

Recycled wastewater: Finally, the court found that the commission erred when it dismissed 5 mgd of wastewater from the Wailuku/Kahului wastewater treatment plant as an alternative water source for HC&S. The wastewater is currently injected into the ground and because no infrastructure exists to deliver it to HC&S’s fields, the commission chose not consider it as an alternative. This decision also did not display the “level of openness, diligence, and foresight commensurate with the high priority these rights command under the laws of our state,’” the court found. It also pointed out that 5 mgd could nearly satisfy all kuleana users in Na Wai `Eha and “would be a significant contribution to HC&S’s water needs.”

The court ordered the commission to revisit these errors and amend the IIFS accordingly.

MTF’s Bowie says she was heartened by the court’s findings regarding the public trust violations.

“The court called the system losses massive. It was very heartening to hear that. What we’ve said all along is that if HC&S spent any money fixing the irrigation systems over the years, there would be much more water to share,” she says.

When it comes to resetting the IIFS, “I hope we don’t go back to square one,” says John Duey, noting that the Hui has been fighting to restore flows for eight years. “The thing we don’t know is when water will be returned and how much. … It depends on the commissioners and if they go with Miike’s recommendations. They didn’t last time and got slapped around a bit.”

East Maui

The Supreme Court’s decision is a boon for the Native Hawaiian Legal Corporation and its East Maui clients, which include the group Na Moku `Aupuni o Ko`olau Hui, as well as a few individual native Hawaiian taro farmers. They raised nearly the same issues that the Na Wai `Eha parties did in their appeal of the Water Commission’s 2010 decision regarding several East Maui streams diverted by Alexander & Baldwin, Inc. and its subsidiary, East Maui Irrigation Co. (HC&S is also a subsidiary of A&B.)

Na Moku has been trying for more than a decade to restore water to streams in East Maui and petitioned the Water Commission in 2001 to amend the IIFS of about two dozen streams. Not until 2008 did the commission hold public hearings on the petitions. Unlike the Na Wai `Eha case, the commission chose not to amend the IIFS via the contested case hearing process.

In 2008, the commission voted to significantly restore water to six of the streams and none to two others, an action Na Moku did not protest. Na Moku did, however, request a contested case hearing after the commission voted in May 2010 to provide minimal flow during dry times to four others, and maintain the status quo for the rest. The NHLC argued that the commission failed to restore enough water to “adequately protect and promote instream public trust uses of the streams, including Native Hawaiian traditional and customary practices.”

In October 2010, the Water Commission denied Na Moku’s petition for a contested case hearing. The NHLC appealed to the Intermediate Court of Appeals, which ruled last fall that the commission’s action was not appealable because it was not a final decision. The Supreme Court, however, disagreed and remanded the decision back to the ICA.

In its filings, the NHLC also cited the footnote in the Waiahole case that states that constitutional due process mandates a contested case hearing for IIFS.

“We raised nearly identical issues” as Earthjustice, NHLC’s Murakami says, adding that the recent Supreme Court decision will certainly help his case.

The court clarified things — “big things” — that had only been implied in other cases, he says, adding that the import of the Waiahole footnote was the subject of debate up until now.

As it did in the Na Wai `Eha case, the state argued in the proceedings regarding Na Moku’s petition that a contested case hearing was not required because only IIFS were at stake, whereas in the Waiahole case, both water use permits and IIFS amendments were pending.

“We argued, as did [Earthjustice attorney] Isaac Moriwake, there was this independent right [to a contested case hearing to amend an IIFS]. … It was the state’s hope the court would have retreated from declaring an independent right to a contested case hearing,” he told Environment Hawai`i.

In the Na Wai `Eha decision, he says, the court states things that it “may have said for the first time, but implied in other cases,” referring to the finding that traditional and customary rights are, in fact, property rights.

“That’s an important holding because if you have a property right, then you have rights to all kinds of things,” including hearings, he says.

Murakami adds that his office is working on sending a letter to the ICA calling attention to the Na Wai `Eha decision and how it applies to his case. It’s been several months since the Supreme Court remanded the Na Moku case back to the ICA and no hearings had been scheduled as of press time. Now that the Na Wai `Eha decision has come out, he said, he was hopeful that there would be some action on his case.

“I don’t know how they [the ICA] can avoid it,” he says.


Commission Prepares for Disputes

Over Na Wai `Eha Appurtenant Rights

The same day the Supreme Court issued its ruling in the Na Wai `Eha case, the Water Commission voted to allow its chair to appoint a hearing officer in case a dispute arises over claims to appurtenant rights in the area.

A year ago, the commission decided that for parcels of land where Na Wai `Eha water is being used or proposed to be used, it would first determine whether they have appurtenant rights. Once parcels with appurtenant rights are identified, the commission will then determine the amount of water they are entitled to.

The deadline to submit applications for appurtenant rights was February 6. The commission’s Dean Uyeno says his agency will publish a public notice of the complete applications soon.

“Upon the timely receipt of written objections and rebuttals, or if the staff has knowledge of issues which require further investigation or deliberation, a hearing’s officer will hear all legal and material evidence … and make appropriate recommendations to the commission,” an August 15 staff report states.

In no one objects to an application, the commission can act on it within 120 days of it being deemed complete.

Uyeno says a hearing officer has not yet been selected.

For Further Reading

Environment Hawai`i has published several articles that will provide additional background to the dispute over West Maui surface water:

  • “Commission Struggles with Conflicting Claims Surrounding West Maui Stream Diversions,” February 2006;
  • “Commission Orders Contested Case Mediation for Maui Water Disputes,” March 2006;
  • “Finally, a Schedule for Contested Case Over Charge of Wasting Maui Stream Water,” January 2007;
  • “Hearings Begin in Contested Case over Diversion of West Maui Streams,” “USGS Seeks Temporary Releases For Study of Instream Values,” and “Wailuku Water Co. Sells Ditch Water Without Consent of Utilities Commission,” December 2007;
  • “Commission Tightens Grip on Waters of Central Maui,” May 2008;
  • “Wailuku Companies Seek PUC Approval to Serve Existing, Future Water Users,” November 2008;
  • “Hearing Officer Issues Recommendations for Na Wai `Eha Contested Case Hearing,” June 2009;
  • “Parties Conclude Debate over Impacts of Stream Restoration in Central Maui,” November 2009;
  • “Commission’s Order on Na Wai `Eha Baffles Its Most Experienced Member,” “The Water Commission: An Idea Whose Time Has Passed (Editorial),” “Maui Agency Is Sued Over Plan to Have A&B Put Stream Water in Municipal System,” “Environment Hawai`i Questions Miike On Dissent in Na Wai `Eha Decision,” July 2010;
  • “Supreme Court Weighs Jurisdiction In Appeal of Decision on Maui Water,” and “Supreme Court Dissects Arguments In Appeal of Maui Stream Standards,” July 2012.

— Teresa Dawson

Volume 23, Number 3 September 2012