Pohakuloa Ruling Spurs Motion For Reconsideration in Kahala Case

posted in: October 2019 | 0

UPDATE: The judge has denied the motion for reconsideration. SEE OUR EH-XTRA ITEM.

On October 1, 1st Circuit Judge Jeffrey Crabtree was scheduled to hear arguments on David Kimo Frankel’s latest motion in his fight against a revocable permit the Board of Land and Natural Resources issued in November 2018 to ResortTrust Hawai‘i, LLC for use of a beachfront parcel fronting the Kahala Hotel & Resort.

Despite holding a permit that allowed for recreational and maintenance purposes only, the hotel had for years been conducting what most would consider to be commercial uses on the property: renting beach cabanas and other equipment, placing a portion of a restaurant in the area, and hosting weddings.

Last month, Environment Hawai‘i reported on how Judge Crabtree largely rejected Frankel’s arguments that an environmental review would need to be done and a Special Management Area use permit obtained in advance of the Land Board’s award of the permit. The judge also disagreed with Frankel’s claim that the board needed to draft better rules to govern the issuance of its revocable permits.

With regard to Frankel’s claim that the board had breached its public trust duties in issuing the permit — which allowed for the setting and possible renting of cabanas, loungers and other equipment on the parcel — Crabtree stated that the Hawai‘i Supreme Court has only applied the public trust doctrine to water and lands in the Conservation District, which this parcel was not.

“[T]here is no recognition under Hawai‘i law that the public trust doctrine applies to this urban parcel,” Crabtree wrote in a July minute order.

But in its August 23 ruling in a case involving the Land Board’s management of its lease for the Pohakuloa Training Area (PTA) on Hawai‘i island, the state Supreme Court held that under the state constitution, “all public natural resources are held in trust by the state for the common benefit of Hawai‘i’s people and the generations to come. Additionally, the constitution specifies that the public lands ceded to the United States following the overthrow of the Hawaiian Monarchy and returned to Hawai‘i upon its admission to the Union hold a special status under our law. These lands are held by the State in trust for the benefit of Native Hawaiians and the general public. Accordingly, our constitution places upon the State duties with respect to these trusts much like those of a common law trustee, including an obligation to protect and preserve the resources however they are utilized.”

The court also held that the state had a duty to reasonably monitor “a third party’s use of the property, and that this duty exists independent of whether the third party has in fact violated the terms of any agreement governing its use of the land.”

The court’s ruling led Frankel, an attorney for the plaintiffs in the Pohakuloa case, to ask Crabtree to reconsider his ruling regarding the application of the public trust doctrine to the Kahala parcel.

Frankel’s motion for reconsideration, filed September 6, is one of the first motions — if not the first motion — relying on the high court’s decision, which found that the Land Board had breached its trust duty to protect lands leased to the U.S. military as part of the PTA (see related story in this issue).

The area covered by ResortTrust’s revocable permit has been identified by the Department of Land and Natural Resources (DLNR) as ceded land.

“The Supreme Court’s recent decision in the Pohakuloa case demonstrates that the BLNR defendants do in fact have trust duties in managing the beachfront parcel,” Frankel argued.

He pointed out that Russell Tsuji, administrator for the DLNR’s Land Division, stated in a declaration that the Land Board had never authorized commercial use of the permit area. Despite the fact that ResortTrust admitted that at certain times between July 1, 2016, and June 30, 2018, it rented clamshell lounge chairs and cabanas, sold and served food and alcohol, and hosted weddings (for which it charged thousands of dollars), the state’s attorneys refused to concede that commercial use occurred on the property during that time.

The hotel has since removed all cabanas and clamshell loungers and its restaurant from the parcel and no longer holds weddings there. Even so, Frankel argued that the Land Board allowed a “multi-million dollar corporation to illegally profit off of public land with impunity. It was unreasonable, and a breach of its trust duties, for the BLNR defendants to ignore obvious commercial uses of Lot 41 and fail to collect additional rents and fines for the unauthorized uses.”

In light of the Pohakuloa decision, Frankel asked the judge to grant his motion for summary judgment with regard to his claim that the Land Board breached its trust duties. If the motion is granted, the Land Board will either have to initiate an enforcement action or justify to the court why it did not pursue one. —Teresa Dawson

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