Above photo: Interior of Aliʻiolani HaleCredit: King Kamehameha V Judiciary History Center
Over the last month, rulings from the state Supreme Court have changed the regulatory landscape for a variety of activities. The consequences of the decisions range from sea level (the Hu Honua biomass power project on the Hamakua Coast) to mountain top (two decisions addressing controversies over management of the summit area of Mauna Kea).
Here are our brief synopses of the decisions – and, where applicable, the dissents, starting at the top and working down.
Mauna Kea Rules
In a decision that was praised by the plaintiffs’ attorneys, the majority of justices approved (by a hair) the argument of the plaintiffs that when government agencies adopt rules, it falls to those agencies to demonstrate that the rules provide constitutional protections to Native Hawaiians, as provided in Article III, Section 7 of the state Constitution.
What came before the court was a “reserved question” from the 3rd Circuit, which was considering a case brought by the Flores-Case Ohana that challenged rules adopted by the University of Hawaiʻi Board of Regents governing access to the summit of Mauna Kea.
The question forwarded to the court was this: “In a challenge to the constitutionality of administrative rules based on a violation of Article XII, Section 7 of the Hawaiʻi State Constitution, does the burden of proof shift to the government defendant to prove that the rules are reasonable and do not unduly limit the constitutional rights conferred in Article XII, Section 7? If so, what standards govern its application?”
Chief Justice Mark Recktenwald reformulated the question “so that a negative answer to the first question will not preclude us from answering the second.” Recktenwald’s two reformulated questions are these: “In a challenge to the constitutionality of administrative rules” based on the constitutional rights of Native Hawaiians, “does the burden of proof shift to the government defendant?” And “what standard governs a challenge to the constitutionality” of a rule alleged to violate those rights?
In answer to the first question, Recktenwald finds that the burden “remains with the challenging party. … In general, the party challenging the constitutionality of an administrative rule bears the burden of proof.”
As to the second question, he writes that in adopting rules, agencies need to conduct a Ka Paʻakai analysis, referring to the Supreme Court decision in Ka Paʻakai o Ka ʻAina v. Land Use Commission. That is the landmark ruling from 2000 that “places an affirmative duty on the state and its agencies to preserve and protect traditional and customary native Hawaiian rights” during contested case hearings.
In so doing, Recktenwald broadens the scope of Ka Paʻakai beyond contested case hearings, which are a quasi-judicial function of state boards and commissions, to the legislative functions – rule-making – of those same agencies. “[C]onsistent with the Ka Paʻakai framework, we hold that agencies must engage in a contemporaneous analysis of the relevant factors prior to adopting a rule,” he writes. “That analysis should identify Native Hawaiian traditional and customary rights or practices affected by the proposed rule, if any, consider the scope and extent to which those rights or practices will be impaired, and explain how the proposed rule reasonably protects those rights and practices as balanced with the state’s own regulatory right.”
After reviewing other landmark rulings by the court, including PASH and Kalipi, Recktenwald writes: “None of our cases suggest that agencies are bound by these protections only in contested case hearings.” On the contrary, quoting from Pele Defense Fund, he states that Article XII, Section 7 protects “the broadest possible spectrum of native rights” and was not intended to be narrowly construed.
Recktenwald asserts that the burden of proof in constitutional challenges arising from Article XII, Section 7 remains with the challenger. However, he agrees with the Flores-Case ʻOhana that the protections afforded Native Hawaiians “are flexible and must be adapted to the particular context or situation where they are implicated, whether during administrative adjudications, like contested case hearings, or administrative rulemaking. … There is no principled basis to exempt agency rulemaking from the state’s constitutional obligations.”
The “appropriate analytical framework” involves agencies considering the identity and scope of Native Hawaiian traditional and customary rights affected by the rule, the extent to which these rights will be affected by the rule, and whether the rules reasonably protect those rights.
“Although formal findings of fact and conclusions of law are not required, agencies must prepare a written statement summarizing the above analysis prior to adopting a proposed rule and make that analysis available to the public,” the decision states. This would not “unduly burden” agencies, because “agencies must already be prepared to provide justifications for their proposed rules. Our holding today only requires agencies to show that they met their obligation under the constitution so that the public can evaluate an agency’s decision, and courts have a basis to review that decision if subsequently challenged in court.”
Nonetheless, Recktenwald concludes, “the burden of showing the agency failed to adequately consider or reasonably protect Native Hawaiian traditional and customary rights or practices remains with the plaintiff…. It is the plaintiff’s burden to show the rule is unconstitutional.”
As mentioned earlier, Recktenwald’s opinion became the majority ruling by the narrowest of margins. Signing onto it fully was just one of the four associate justices, Michael Wilson. Associate Justice Sabrina McKenna concurred in part and dissented in part. McKenna agreed that agencies should consider Native Hawaiian rights when adopting rules. However, requiring agencies to prepare a written statement “violates separation of powers principles.” Chapter 91 of Hawaiʻi Revised Statutes describes the rulemaking procedures agencies must follow and also how those rules are to be challenged. It also provides for those agencies to issue declaratory actions when the validity of those rules are challenged, as the Flores-Case ʻOhana has done. “The Chapter 91 statutory scheme does not require agencies to issue written statements summarizing how it considered Native Hawaiian or other constitutional rights when promulgating rules. Therefore, I believe judicial imposition of such a requirement would violate separation of powers principles,” she wrote.
Associate Justice Todd W. Eddins wrote the minority opinion, with the full concurrence of Associate Justice Paula A. Nakayama and partial concurrence of Associate Justice McKenna.
Eddins’ dissenting opinion argued that “Ka Paʻakai does not fit the rulemaking context. Ka Paʻakai’s strong protections facilitate rigorous fact findings and legal conclusions based on a full evidentiary record, fleshed out by adversarial parties. By its nature, rulemaking cannot achieve this specificity and rigor. Also, frontloading Ka Paʻakai to the general rulemaking context risks weakening the protections for Native Hawaiians in contested case hearings and criminal prosecutions.”
Eddins notes that this does not mean agencies need not consider Native Hawaiian rights when adopting rules. When those rules are challenged, “the government must explain why its regulation is reasonable and the customary usage unreasonable, and the challenger must explain why their customary usage is reasonable and the government’s regulation unreasonable. It is the court’s ultimate duty to balance these competing viewpoints and arrive at a reasoned decision.”
As McKenna observed, the Legislature “has provided a comprehensive statutory structure for agency rulemaking,” Eddins writes. “I decline to depart from [it]. And refuse to tuck Ka Paʻakai into Hawaiʻi Revised Statutes Chapter 91’s rulemaking regime.”
“Applying Ka Paʻakai to the general rulemaking context risks diluting its strong protections. Even more worrying, it threatens the due process rights of parties who, unlike Flores-Case ʻOhana, actually want a contested case hearing; same for persons who get charged with violating a rule. If the Ka Paʻakai analysis – even a Ka Paʻakai-lite version – fast forwards to the general rulemaking stage, individuals with specific claims to adjudicate may find their cases prejudged or weakened.”
Eddins cites to a previous decision, In re Hawaiian Elec. Co., in noting that the court has recognized “that rule-making is essentially legislative in nature because it operates in the future.” Adjudication, on the other hand “operates concretely upon individuals in their individual capacity.”
“The difference is straightforward. Adjudications handle the past or current rights of specific people; rulemakings make law for everyone, for the future.”
In his closing remarks he summarizes the problem as he sees it: “The agency’s findings [under Recktenwald’s scheme] or fuzzy ‘adequate considerations’ will not go unnoticed. Contested case hearings or prosecutions held afterwards may either violate due process, because the result had been pre-decided, or the existence of a general Ka Paʻakai rulemaking may nullify or undermine the rights of individuals who seek or have contested case hearings. Neither result is promising for the protection of Native Hawaiian rights.”
An Urbanized Summit?
The court issued another Mauna Kea-related decision last month, this one involving the direct appeal of a declaratory ruling of the Land Use Commission. The LUC had been asked by two Hawaiians – Kuʻulei Higashi Kanahele and Ahiena Kanahele – to find that the collection of telescopes existing on the summit of Mauna Kea effectively constituted a use of the land that should require the summit to be placed in the Urban land use district. As things stand, the summit is in the state Conservation District, with the telescopes having been granted Conservation District Use Permits by the state Board of Land and Natural Resources, which has jurisdiction in the Conservation District.
The LUC denied the petition in 2019, explaining that it lacked jurisdiction “to use the declaratory ruling procedure to undermine decisions already made and to regulate land uses in the Astronomy Precinct, because the Legislature granted such authority to the Department of Land and Natural Resources. The Supreme Court upheld the LUC ruling.
The majority decision was another squeaker. Associate Justice Paula Nakayama authored the decision, in which Chief Justice Recktenwald and Circuit Judge Lisa W. Cataldo joined. (Cataldo was filling a vacancy on the bench.) Issuing the dissent were Associate Justices McKenna and Wilson, who authored the dissent.
“The Kanaheles seek to use the Commission’s declaratory ruling authority (1) to challenge past decisions that astronomy facilities are permissible within conservation districts and (2) to contravene the Department’s power to regulate conservation district uses,” Associate Justice Nakayama writes in the majority opinion. “Contrary to the Kanaheles’ claim that the commission may restrict land uses through Hawaiʻi Revised Statutes § 205-2(3), the statute merely identifies uses that are permitted within conservation districts. The statute does not authorize the commission to exclude or enforce certain land uses within conservation districts.”
The Kanaheles were not wanting to have the commission reclassify the Astronomy Precinct, where the telescopes were built, they said. Rather, they were merely asking that the commission give them the opportunity to say they did not want the rezoning that had already occurred.
Their attorney explained to the LUC that they were merely asking the commission to say that “the concentration of industrial research facilities on Mauna Kea … are appropriate within the Urban District … and not the Conservation District.” They were not “seeking enforcement of anything except for [HRS chapter] 205.”
“When asked about the practical result of the Kanaheles’ petition, the Kanaheles’ attorney acknowledged that ‘in order to keep things as they are,’ ‘the legal effect of [the Kanaheles’] petition is to … force the state of Hawaiʻi or whoever might be considered the landowner of the land on which the telescopes sit to have to file a request for a [district] boundary amendment.”
In denying the petition for declaratory ruling, the LUC stated: “[t]he Petitioners have requested a ruling on a statutory provision not administered by the commission and a matter that is not otherwise within the jurisdiction of the commission.”
While the Kanaheles insisted they were not wanting to have the commission issue an order requiring a district boundary amendment be obtained for the summit, “the plain language of the Kanaheles’ petition requested a declaratory order that explicitly required a district boundary amendment,” the majority ruling states.
The Kanaheles also challenged the commission’s finding that they were requesting a ruling on a statute that it did not administer.
But in fact, the majority opinion states, they were asking the commission “to determine what constitutes prohibited land uses within a Conservation District,” a prerogative that the Legislature gave only to the Department of Land and Natural Resources.
The majority concludes: “This court’s role is to interpret the statutory scheme as enacted by the Legislature. The dissent contends this opinion ‘eliminat[ed] … the commission’s jurisdiction over conservation land bearing CDUPs granted by the department.’ Not so. This court has faithfully interpreted the relevant statutes and concluded the statutory scheme does not permit the commission to enforce uses within a Conservation District. … While the dissent appears to question the efficacy of the statutory scheme to protect conservation district land, it is the Legislature’s role, not ours, to amend existing law.”
No Camping On Productive Ag Lands
In a case that goes back more than seven years, the Supreme Court determined that a proposed camp on highly productive land in the state Agricultural District could not be blessed by a Special Use Permit granted by Maui County.
At issue was the proposal of the Hoʻomoana Foundation to develop a campground near Lahaina on “class B” agricultural land. Guests would be both commercial campers as well as homeless people.
The case before the court was brought by the Land Use Commission and the Puʻunoa Homeowners Association, as well as several of its members (they changed over time). They were appealing the decision of the Intermediate Court of Appeals last year that found that a prior Supreme Court decision, Mahaʻulepu v. Land Use Commission, decided in 1990, did allow camping to be authorized by Special Use Permit.
Since then, the Legislature has amended Chapter 205 to exclude overnight camps from the list of permitted uses, which, Associate Justice Nakayama writes in the majority opinion, “means that the public and private recreational use of overnight camps is not permitted in class A and B land in agricultural districts and cannot be permitted by Special Use Permit.”
“In addition,” she continues, “Mahaʻulepu v. Land Use Commission … is overruled because it was incorrectly decided. Because the foundation’s proposed campground project includes a public or private recreational overnight camp use, the project requires a district boundary amendment.”
Joining Nakayama in the majority were Associate Justices Wilson and Eddins. Chief Justice Recktenwald and Associate Justice McKenna dissented.
The basis for the dissent is the principle of stare decisis, McKenna writes. The majority “avoids our own stare decisis jurisprudence,” she states. “Mahaʻulepu was decided more than thirty years ago. Whether or not we agree with its reasoning, we have repeatedly held that where the Legislature fails to act in response to our statutory interpretation, that statutory interpretation must be considered to have the Legislature’s tacit approval.”
McKenna disagreed with the majority that amendments since Mahaʻulepu had addressed the issue. “[N]one of the amendments rejected Mahaʻulepu’s statutory interpretation that the list of uses expressly excluded from permitted open area recreational uses in HRS § 205-4.5(a)(6) could be authorized through a Special Use Permit. Thus, although legislative inaction can be a poor barometer of legislative intent, in this case, the nature and sheer number of post-Mahaʻulepu legislative amendments buttress the Legislature’s tacit approval of this court’s statutory interpretation.”
McKenna concludes: “Today, the majority overrules Mahaʻulepu while ignoring important stare decisis principles. It does so in a case involving a proposed overnight campground development for unsheltered people in our community brought by adjoining homeowners, some of whom asserted ‘not in my backyard’ concerns. Respectfully, in my view, our resolution of this case should be guided by the motto enshrined in the Constitution of the State of Hawaiʻi: ‘Ua ma uke ea o ka ʻaina I ka pono.’”
(For additional background, see the article in the July 2022 edition of Environment Hawaiʻi, “Farm Dwellings, Overnight Camps at Issue in 2 Court Cases the LUC Votes to Appeal.”)
Ruling Leaves Few Options For Hu Honua Plant
In an almost folksy voice, Associate Justice Todd W. Eddins put paid to the years-long controversy over whether the Hu Honua biomass plant on the Hamakua Coast, a few miles north of Hilo, should be allowed to feed power into the island-wide grid of the Hawaiʻi Electric Light Co., or HELCO.
“Over ten years ago, energy company Hu Honua had a brainwave,” Eddins writes for the court. “It could produce renewable energy by burning trees. The company sought regulatory approval to supply energy to Hawaiʻi Island using a biomass power plant. Last summer, approval for that energy deal was denied. Hu Honua appeals the denial, arguing that the Public Utilities Commission misunderstood its mandate and held Hu Honua to an unfair standard.
“We disagree.”
Eddins recaps the history of PUC decisions, appeals, and remands, and then gives the background for the instant case.
Before evidentiary hearings began before the PUC in March 2022, Eddins writes, “Hu Honua brought several motions centered on Act 82, … the primary statute governing the PUC’s evaluation of energy projects… It requires the PUC to engage in ‘public interest-minded balancing.’”
But Hu Honua argued to the PUC that it could only consider greenhouse-gas emissions from fossil fuels: “Emissions from other sources, such as biomass burned to produce renewable energy, had to be kept out of the equation,” Eddins writes.
The PUC rejected the argument. Still, Hu Honua and HELCO said the proposed power purchase agreement did serve the public interest, despite the project producing massive carbon emissions.
“But Hu Honua made a promise,” Eddins writes. “[T]he project would ultimately be carbon neutral. Hu Honua intended to offset its emissions by planting trees. … That would zero out the project’s projected eight million metric ton carbon price tag.” The bulk of the tree-planting, it claimed, would occur on land it leased on Hawaiʻi Island. The PUC found the claims not credible, given that Hu Honua presented no evidence that it had secured leases that lasted as long as the power purchase agreement.
The PUC also found that the power purchase agreement would increase ratepayer costs. “Overall,” Eddins writes, “the PUC found that the project would increase the typical consumer bill by an average of $10.97 a month throughout the full 30-year term. The PUC deemed this a significant bill impact.”
When Hu Honua appealed the PUC’s decision to the Supreme Court, it argued the PUC erred in three respects. First, it should not have considered the plant’s impact on ratepayers. Second, it should have compared Hu Honua emissions only to emissions from fossil-fuel plants. Third, the PUC “violated Hu Honua’s due process rights by finding facts not in the record, applying a wrong evidentiary standard, and subjecting Hu Honua to a carbon neutrality requirement.”
The court rejected all three points.
“We have said that an agency ‘must perform its statutory function in a manner that fulfills the state’s affirmative constitutional obligations,’” Eddins writes, “and that ‘Article XI, Section 9’s clean and healthful environment right … subsumes a right to a life-sustaining climate system.’ The right to a life-sustaining climate system is not just affirmative; it is constantly evolving.”
He concludes: “The reality is that yesterday’s good enough has become today’s unacceptable. The PUC was under no obligation to evaluate an energy project conceived of in 2012 the same way in 2022. Indeed, doing so would have betrayed its constitutional duty.”
‘Fees on Fees’ Approved In Haleakala Trail Case
Just how should fees be paid in a case brought under the private attorney general doctrine?
That was the question before the Supreme Court in a case brought by attorneys Peter Martin and Tom Pierce, who were appealing an Intermediate Court of Appeals decision that severely limited their recovery of fees incurred in protracted litigation over fees. Martin and Pierce had represented plaintiffs who had sued more than a decade ago to have the state declared the owner of the Haleakala Trail. The plaintiffs – Public Access Trails Hawaiʻi, David Brown, Joe Bertram III, and Ken Schmitt – prevailed in 2014, when a jury brought a ruling in their favor. The state, which had opposed their original lawsuit, had joined with the plaintiffs by the time the jury trial was held, even though it continued to try to negotiate a land exchange with Haleakala Ranch, without notice to the plaintiffs, after the joint prosecution agreement had been executed.
Despite the state’s participation, the heavy lifting in the litigation was done by the plaintiffs’ attorneys, who sought attorneys’ fees of more than $1 million and costs amounting to nearly $25,000 from Haleakala Ranch.
The ranch vigorously opposed the award of fees. As noted in the court’s decision, authored by Associate Justice Wilson, Haleakala Ranch Corporation (HRC) “argued that the state’s initial opposition to petitioner’s complaint stemmed from the fact that the state believed that petitioners did not have a say in how the state should expend its resources or resolve disputes.” Should the court find that the petitioners’ efforts were necessary, HRC argued, it would amount “to a finding that a private party can substitute its judgment and interest for that of the state.”
On the other hand, the petitioners “argued they were entitled to attorneys’ fees because they were a prevailing party and, pursuant to the [private attorney general] doctrine, ‘were solely responsible for vindicating [the] important public policy’ of protecting Haleakala Trail under the Highways Act, which set an ‘important precedent’ that may be used to ‘protect similar historic trails and roads in Hawaiʻi for the benefit of current and future generations.’”
Just two months after the initial request for attorneys’ fees was filed, the 2nd Circuit Court awarded fees – but only those fees that were incurred before the time the plaintiffs entered into a joint prosecuting agreement (JPA) with the state.
Following that, the plaintiffs requested fees of $396,031 and costs of $24,871, representing their efforts up to March 4, 2013, the date they said the JPA became effective.
Haleakala Ranch disputed that, asking the court to reduce the award to $120,852 in attorneys’ fees and $21,331 in costs.
The Circuit Court split the difference, awarding the petitioners a total of $256,494.53
The petitioners then filed a second motion for attorneys’ fees and costs, requesting additional fees of $71,462.58 and costs of $905.06. They argued the second motion for fees was warranted “considering the time, complexities, and difficulties” involved in litigating the first motion for fees.
That second motion for fees was denied by the Circuit Court in a ruling that was promptly appealed to the ICA. In briefs before the ICA, the petitioners argued that private enforcement “can be necessary, even where other private and public parties join in the litigation, where ‘but for’ the efforts of the plaintiff, there would not have been a vindication of the public’s interest.”
Still, the ICA upheld the lower court finding, prompting the plaintiffs to appeal to the high court, which overturned the two lower courts’ rulings.
“Analysis of the state’s conduct – at least for the time period during which the state negotiated and advocated for the proposed land exchange – makes clear that even after the signing of the JPA, the burden of enforcement fell disproportionately, and at times, solely, on petitioners,” the ruling states. The justices cited to a prior court ruling, Irwin Park II, involving efforts to build a parking structure on land lying between Aloha Tower and Nimitz Highway in Honolulu, in deciding that, “but for petitioners, efforts, the outcome of the litigation – i.e., the state being declared owner of Haleakala Trail – may not have materialized given the state’s efforts to approve the land exchange with” Haleakala Ranch. Although the state claimed that the proposed land exchange didn’t violate the JPA and did not constitute ‘active opposition’ within the meaning of the private attorney general doctrine, “it is clear that by pursuing a deal in which the state agreed to surrender its interest in Haleakala Trail, after it had agreed to jointly prosecute petitioners’ case by asserting an ownership claim against [the ranch], the state was actively opposing or abandoning petitioners’ cause of preserving Haleakala Trail for the purpose of public access.”
“Given the petitioners’ success in the underlying litigation and on their first [attorney fees] motion under the [private attorney general] doctrine, and given the policy goals this court has articulated in adopting and applying the PAG doctrine, we now clarify that petitioners’ attorneys’ fees and costs recoverable … include those reasonably incurred in litigating the initial fee claim,” the ruling states.
The case was remanded to the 2nd Circuit Court.
But wait, there’s more
Although the state’s ownership of the Haleakala Trail was vindicated in court, access continues to be an issue.
In 2022, David Brown and Public Access Trails Hawaiʻi returned to 2nd Circuit Court, this time suing the state and Haleakala Ranch over their failure effectively to take ownership of the trail and accommodate public access. In October 2019, the BLNR approved an agreement with Haleakala Ranch that severely restricted hours of access.
As noted in the complaint, the “New Trail Agreement” fails “to include provisions obligating [the ranch] to protect, preserve, maintain, or otherwise properly manage the trail … to the level required of Defendant State in order to fulfill its obligation under the public trust.”
In the more than three years since the agreement was executed, “no hikes have been scheduled for the trail, the public has no access to the trail, and [the ranch] remains in sole and exclusive possession and use of the trail.”
Litigation in that case is ongoing.
— Patricia Tummons
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