The state Commission on Water Resource Management would seem to have a hard time getting things right. Twice the Supreme Court has remanded back to the commission its decisions on the Waiahole ditch contested case, and a third appeal in that case is pending before the court. In 2004, the court rebuffed the commission in a decision it made over a well-drilling permit on Moloka`i. Then late last year, the Supreme Court tossed back to the commission its decision on a contested case that gave water use permits to Kukui Moloka`i, Inc., for resort development.
The history of reversals is clearly on view in the court’s most recent ruling, which liberally quotes from its past decisions overturning Water Commission actions. As Isaac Moriwake, an attorney with Earthjustice, said, “writing the decisions now is kind of like making sausage for the court. Anymore, they just have to cut and paste from their previous decisions.”
The most recent case decided by the Supreme Court goes back all the way to December 15, 1993, when KMI submitted an application to use 2 million gallons of water a day (mgd) at Kualapu`u and Kaluako`i resort. The water was to be taken from a well (Well 17) on land that KMI had acquired in October of that year.
In 1992, the commission had designated the entire island of Moloka`i as a water management area, which meant that applications for water use had to be filed within a 12-month period – or by July 15, 1993. After extensive discussions of the matter, in
1995, the commission authorized an “interim use” of 871,420 gallons per day. KMI’s appeal of the matter was dismissed.
A year later, KMI sought to increase the authorized amount to 1.169 mgd, but the commission disagreed. Hearings officer Peter Adler then presided over a contested case, which included not only KMI as a party, but also the Department of Hawaiian Home Lands, the Office of Hawaiian Affairs, two Hawaiians, Georgina Kuahuia and Judy Caparida, and others.
On December 19, 2001, the commission awarded KMI an existing use permit for 936,000 gallons a day, plus a permit for proposed uses of 82,000 gallons a day, subject to conditions intended to protect the Kualapu`u aquifer from saltwater intrusion.
Within a month, DHHL, OHA, and Caparida and Kuahuia had filed appeals to the Supreme Court, which hears appeals of Water Commission decisions.
DHHL’s Reservations
One of the issues on appeal was how much deference the commission should have given to the Department of Hawaiian Home Lands’ reservation of 2.905 million gallons a day of water from the Kualapu`u aquifer. Under the state constitution, the DHHL has the right to reserve sufficient water to serve its lands, and the parties opposed to KMI had argued that this should be regarded by the commission as an existing legal use. The court basically agreed with the commission on this point, saying that it is “by no means categorically precluded from approving uses which may compromise DHHL’s reservation,” if the decision is made with openness, diligence, and foresight “commensurate with the high priority these rights command.”
Yet the court agreed with the DHHL that the commission did not give “even minimal scrutiny” to KMI’s request to divert water for private commercial use. The court’s opinion, authored by Justice Paula Nakayama, notes that the commission’s own staff recommended against awarding KMI the 82,000 increment for new uses on the basis that it would concentrate pumpage in one area of the aquifer and risk increasing levels of salinity. DHHL had had its own request to increase pumpage denied for this reason.
“Inasmuch as KMI’s well is … contributing to the concentrated pumpage, we are compelled to wonder why the commission did not similarly toll KMI’s request for new use,” the court wrote. “We do not suggest that the commission did not have a valid reason for its conclusion or that the commission was absolutely barred from reaching its result. Rather, the commission has simply failed to explain the rationale behind the disparate treatment.” Thus, the court remanded this issue “for additional findings of fact and conclusions of law.”
No Alternatives
Another point raised by DHHL was the failure of the commission to consider the feasibility of alternative sources of water for KMI’s requested uses. “The record confirms DHHL’s allegation, and that omission requires us to vacate KMI’s permits,” the court found.
“Here, the commission entered no FOFs [findings of fact] or COLs [conclusions of law] as to the existence or feasibility of any alternative sources of water whatsoever,” the court said. “Indeed, the commission appears to have reserved consideration of feasible alternative sources of water until after the permit has been granted.” One of the conditions of approval was that within two years of the permits being issued, KMI was to prepare a study of the feasibility of using non-potable water for golf-course irrigation.
The post-hoc review of alternative sources, the court said, “is fundamentally at odds with the commission’s public trust duties. The feasibility of a new source of non-potable water … should have been considered prior to the granting of KMI’s permit, not after the fact. The commission cannot fairly balance competing interests in a scarce public trust resource if it renders its decision prior to evaluating the availability of alternative sources of water. Thus, KMI’s failure to demonstrate the absence of practicable alternatives should have terminated the inquiry.”
Untimely Application
As mentioned earlier, the KMI application was submitted five months after the deadline for water use applications had passed. Although the commission had determined that there was just cause for the late filing, DHHL argued that it was unlawful for it to do so. According to the DHHL, the determination was barred for two reasons. First, the December 15, 1993 filing, couldn’t be for an existing use, since the application did not amend an earlier, timely application. Second, the DHHL argued, as of May 27, 1993, seven months before the KMI filing, the commission lost its ability to accept late applications for “just cause.” (By statute, the court explained in a footnote, the commission cannot accept late applications “more than five years after the effective date of rules” implementing the law. Since the rules took effect May 27, 1988, late applications became inadmissible after May 27, 1993.)
The court agreed with the DHHL, stating that “the commission should have strictly applied the statutory deadline for existing use permit applications,” just as it did in the earlier Waiahole case. “Therefore, we vacate the commission’s decision and order to the extent that it grants KMI a permit for existing uses,” the court said. “If, on remand, KMI wishes to ‘revive’ this expired uses, it must apply for a [new] permit… as the uses are now presumed abandoned.”
Unconsidered Closure
About 440,000 gallons of the existing-use permit and 24,000 gallons of the permit for proposed uses were to be used, KMI said, on the Kaluako`i golf course and hotel, both closed for some years now.
OHA, Caparida and Kuahuia argued that the commission should have taken this closure into account, asserting “that a hotel and golf course that has been closed for many months with no announced reopening date does not present a reasonable-beneficial use,” as is required under the state Water Code. The commission argued, on the other hand, that its role was limited to determining what its past water use was, as of July 15, 1992, rather than at the time the contested case hearing occurred. In addition, the commission and KMI said that because the permits give KMI four years to put the water to the stated use, there was no error.
In addressing this point, Nakayama quoted from the court’s decision in the first Waiahole case: “the commission must not relegate itself to the role of a mere umpire passively calling balls and strikes for the adversaries appearing before it, but instead must take the initiative in considering, protecting, and advancing public rights in the resource at every stage of the planning and decision-making process.” The commission failed to do so in this case, prompting the court to vacate the commission’s decision and remand the permit for proposed uses.
Burden of Proof
Caparida and Kuahuia raised the argument that the commission improperly put the burden of showing harm to native rights and practitioners onto the Hawaiians, relieving KMI from any burden of proof. In the contested case hearing, the two had raised concerns that pumping Well 17 could harm the nearshore marine environment and thus affect their gathering rights. The commission concluded, however, that there was no evidence to suggest that the KMI allocation would “in any way diminish access for traditional and customary native Hawaiian practices in the project area, shoreline, or nearshore areas.”
That conclusion, however, “erroneously shifted the burden of proof to Caparida and Kuahuia,” the court found. “Accordingly, we hold that the commission failed to adhere to the proper burden of proof standard to maintain the protection of native Hawaiians traditional and customary gathering rights in discharging its public trust obligation.”
Rejected Claims
Although the overall effect of the court’s ruling was what the challengers had hoped for, along the way, the court tossed out some of their arguments.
First to be dismissed was DHHL’s claim that the sustainable yield used by the commission in its deliberations was in error. The commission used a figure of 5.0 million gallons a day of sustainable yield for the Kualapu`u aquifer. The DHHL argued that the figure could be as low as 3.2 mgd. The court, however, agreed with KMI and the commission: “[T]he sustainable yield was set by rulemaking procedure, and …any challenge to the accuracy of the sustainable yield must be made by a petition to amend or modify the sustainable yield… [I]t would be inappropriate for the commission to reevaluate the sustainable yield in a permit application proceeding.”
The court also rejected DHHL’s claim that the commission should have taken into account evidence that KMI had violated the state’s safe drinking water law. “Despite evidence in the record that KMI failed to comply with the SDWA [Safe Drinking Water Act], we hold that neither the [Water] Code nor the public trust preclude the commission from allocating water to KMI.”
The Wai`ola Decision
Many of the same parties and issues were involved in the case that came before the Supreme Court appealing the commission’s decision, in December 1998, on an application of Moloka`i Ranch, Ltd., and a subsidiary, Wai`ola o Moloka`i, Inc., a water utility, to drill a well and take some 1.25 million gallons of water a day from the Kamiloloa aquifer. One million gallons of that was to accommodate future development, including a small industrial park and what was described as low-impact tourism. Bringing the appeal were the DHHL, OHA, a group of seven Hawaiians (including Caparida), called the Kahae intervenors, which claimed an interest in the land within the Kamiloloa aquifer system, and a group of three Hawaiians, collectively the Ritte intervenors, who claimed an interest in traditional gathering rights.
The DHHL argued that the allotment of water to Wai`ola impacted its water reservations in the Kualapu`u aquifer, but the commission held that the reservations did not warrant the same level of protection as an existing use and, moreover, were “aquifer specific” – that is, only applications for water from the Kualapu`u aquifer could impact the DHHL water reservations.
“Although we agree that [the commission’s Hawai`i Administrative Rules] denominate aquifer-specific reservations of water to DHHL,” the court found, “we hold that such a limitation for purposes of water resource management does not divest DHHL of its right to protect its reservation interests from interfering water uses in adjacent aquifers. … To hold otherwise would cripple DHHL’s ability to contest proposed uses in adjacent aquifers that could significantly diminish its ability to utilize its reservations in the future simply because the proposed use was outside the Kualapu`u aquifer; such an interpretation defies not only legal but scientific logic.”
The court did not agree that a reservation was equivalent to existing legal use. Yet, foreshadowing its decision in the Kukui Moloka`i case, it did underscore the need for the commission to give serious consideration to the impact of its decisions on DHHL reservations. Quoting its own decision in the first Waiahole appeal, the court found that the “reservation of water is an essential mechanism by which to effectuate the state’s public trust duty ‘to ensure the continued availability and existence of its water resources for present and future generations.’”
Since the commission did not address the DHHL’s concerns in its findings of fact and conclusions of law, “it violated its public trust duty to protect DHHL’s reservation rights.”
Shifting Burdens
As in the Kukui Moloka`i case, one of the issues involved where the burden should lie in producing evidence of an impact, or lack of impact, to the public trust or other rights that would result from the permit. DHHL and the Ritte appellants claimed that the burden lies with the applicant, and that the commission failed to require it to fulfill that burden.
The court agreed. The commission’s findings “supporting its conclusion that the proposed use would not interfere with DHHL’s rights… failed to address whether MR-Wai`ola had adduced sufficient evidence with respect to the impact of the proposed use on DHHL’s reservation in Kualapu`u,” the court found, adding that, in fact, the commission seemed to have foisted the burden onto DHHL, “which is contrary to this court’s well-settled interpretation of an applicant’s burden.”
Unprotected Rights
OHA and the Hawaiian intervenors argued that the commission failed to give due consideration to potential harm that the Wai`ola withdrawals would have on their customary rights by reducing the amount of freshwater flowing into the nearshore area. Among other things, they argued, they were not given the opportunity to impeach one of the key witnesses for Wai`ola, Steve Dollar, by confronting him with contradictory testimony he had presented in another contested case.
In its decision, the commission had determined that “no evidence was presented that the drilling of the well would affect the exercise of traditional and customary native Hawaiian rights.”
But the court disagreed, finding that that conclusion “was unsupported by any clearly articulated [finding of fact].” The court went on to find that the commission’s designated hearings officer erred by not allowing Dollar to be confronted with statements he had made that could have impeached his credibility.
“Accordingly, the commission having failed adequately to discharge its public trust obligation to protect native Hawaiians’ traditional and customary gathering rights, we have no choice but to vacate the commission’s decision and to remand for further proceedings.”
The Water Commission has not acted on the court’s remand order yet. According to an attorney involved in the case, the DHHL has been attempting to work out a settlement with Wai`ola and other parties.
— Patricia Tummons
Volume 18, Number 8 February 2008
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