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Hawaii State Bar Association Real Property and Financial Services Section's Real Estate Litigation Update 2019

Every year, the Hawaii State Bar Association's Real Property and Financial Services Sections asks my partner Greg Kugle and me to present a Litigation Update for its members.  We review the recent national and Hawaii court decisions impacting real estate, ranging from land use litigation, real estate closings, foreclosures, CC&R interpretation and more.

Our presentation, moderated by Professor David Callies of the University of Hawaii School of Law is now on YouTube.  Our handout (with links to the cases) is below. 

Links to the cases:

Hawaii Supreme Court

Admin Law:  Thirty Meter Telescope.  Opinion, Concurrence, Dissent. 

Admin Law:  Tax Foundation of Hawaii v. State of Hawaii

Admin Law: Clarabal v. Dep’t of Education (Opinion, Concurrence, Dissent)

Admin Law:  In re HELCO

Admin Law:  City and County of Honolulu v. State of Hawaii

Public Trust:  Ching v. Case

Real Estate Transactions:  Calipjo v. Purdy

 

Intermediate Court of Appeals

Admin Law: Kokua Council for Senior Citizens v. Director, Dep’t of Health

Admin Law:  Keauhou Canoe Club v. DLNR

Boundaries/Plants:  Spittler v. Charbonneau

CC&R Interpretation:  Bruno v. AOAO of Waikiki Marina Condo; Crowe

CC&R Interpretation:  Sandomire v. Brown

Easements:  Ching v. Dung

Fences:  Yin v. Aguiar

Foreclosure:  American Savings Bank v. Chan

Foreclosure:  American Savings Bank v. AOAO of the Hanohano Hale

Foreclosure:  First Hawaiian Bank v. AOAO of Sun Rise, Inc.

Foreclosure:  Malabe v. AOAO Executive Centre  (SCT argument 9/19/19)

Land Court:  In Re Nomura

Land Use:  Dao v. Zoning Board of Appeals

Lease:  Ebbo v. SGG, LLC

Lease:  Kahawaiolaa v. Hawaiian Sun Investments, Inc.

License:  Blake v. Alexander & Baldwin

Liens:  Joslin v. Ota Camp-Makibaka Assn, Inc.

Public Nuisance:  Haynes v. Haas (SCT cert granted)

Quiet Title:  Kualoa Ranch, Inc. v. Mitchell

Real Property Tax:  Auyoung v. Dep’t of Budget and Fiscal Services

Trespass:  Grinpas v. Kulana Prop

Water Rights:  Carmichael v. BLNR

National

Regulatory Takings:  Knick v. Township of Scott

Vacation Rentals:  Homeaway.com v. City of Santa Monica, (9^th Cir. 2019)

Whitesell Revisited - Hawaii Courts Tackle The Neighbor's Tree Issue

Our most viewed post was on the topic of bananas.  Strange fare for a law blog, but yes, there is law on bananas that are on my neighbor's tree but that are on my side of the property line.  Good fences make good neighbors (Mr. Frost may disagree), but free bananas mean banana bread!  

My bananas post discusses the very famous (and short) decision from the brand new Intermediate Court of Appeals in the case of Whitesell v. Houlton.

In Whitesell, the Intermediate Court of Appeals had to opine on the legalities associated with a banyan tree near the property line.  In resolving the case, the court said:

We hold that non-noxious plants ordinarily are not nuisances; that overhanging branches which merely cast shade or drop leaves, flowers, or fruit are not nuisances; that roots which interfere only with other plant life are not nuisances; that overhanging branches or protruding roots constitute a nuisance only when they actually cause, or there is imminent danger of them causing, sensible harm to property other than plant life, in ways other than by casting shade or dropping leaves, flowers, or fruit; that when overhanging branches or protruding roots actually cause, or there is imminent danger of them causing, sensible harm to property other than plant life, in ways other than by casting shade or dropping leaves, flowers, or fruit, the damaged or imminently endangered neighbor may require the owner of the tree to pay for the damages and to cut back the endangering branches or roots and, if such is not done within a reasonable time, the damaged or imminently endangered neighbor may cause the cutback to be done at the tree owner's expense.

However, we also hold that a landowner may always, at his own expense, cut away only to his property line above or below the surface of the ground any part of the adjoining owner's trees or other plant life.

In Whitesell, the ICA did not define what it meant by "noxious", but just last week, the ICA went back to Whitesell to do just that. 

The case is Spittler v. Charbonneau and arises from Kapoho on the Island of Hawaii.  In this case, the boundary between the neighbor's properties was disputed.  One owner had planted several trees on the wrong side of the property line.  The trees were ubiquitous in Hawaii:  the Ironwood, the Loulu Palm and the Coconut Palm. After a tree branch fell and caused property damage, the neighbor relationship failed and litigation ensued.

First, the Ironwood (pictured below):

The complaint led to a counterclaim with claims of trespassing, killing trees, loud music, gunfire and profanities exchanged on the disputed border.  Ultimately, all the claims were settled except for the trespass claim and the nuisance claim.  

Under Whitesell, non-noxious plants were not nuisances, so the appeals court had to decide whether the Ironwood was noxious.  Without a definition, the ICA turned to Old Mr. Webster, the Hawaii Administrative Rules, the Hawaii Pacific Weed Risk Assessment website.  The Ironwood is not listed as a "noxious weed" in the Hawaii Administrative Rules.  But, the failing of the term "noxious" is that it didn't accurately label the problem:  risk to humans.  So, the ICA said:  

Our use of the word "non-noxious" in Whitesell was superfluous. A noxious plant - i.e., one that is "physically harmful or destructive to living beings" - is one that actually causes, or that could pose an imminent danger of causing, material harm to persons or to property other than plant life; conversely, a plant that actually causes, or that poses an imminent danger of causing, material harm to persons or property other than plant life may be considered noxious. We note that certain plants, such as coconut palms, are capable of causing material injury to persons or to property other than plant life just by dropping fronds or nuts. We also note that tree roots can, under some circumstances, pose imminent trip hazards without damaging property other than plant life. We therefore modify our holding in Whitesell for when a plant can be considered a nuisance. Plants whose overhanging branches cast shade or drop leaves, flowers, or fruit, or whose roots interfere only with other plant life, are not nuisances. Overhanging branches or protruding roots constitute a nuisance when they actually cause, or there is imminent danger of them causing, material harm to a person or to property other than plant life. When overhanging branches or protruding roots actually cause, or there is imminent danger of them causing, harm to a person or to property other than plant life, the damaged or imminently endangered neighbor may require the tree's owner to pay for the damage and to cutback the endangering branches or roots and, if that is not done within a reasonable time, the damaged or imminently endangered neighbor may cause the cutback to be done at the tree owner's expense. And as we stated in Whitesell, "a landowner may always, at [their] own expense, cut away only to [their] property line above or below the surface of the ground any part of the adjoining owner's trees or other plant life." 2 Haw. App. at 368, 632 P.2d at 1079.

So, a nuisance (which carries the remedial power of injunction) can flow from an overhanging plant when there is actual harm to body or property or imminent danger of the harm.

So, what to do about that pesky ironwood.

[Photo courtesy of Professor Gerald Carr]

On trespass, the court began with an acknowledgement that no Hawaii appellate court had ever adopted the elements of the tort of trespass, so, after referencing the Restatement, it did so.  Under Hawaii law (now):

Restatement§ 158 states: One is subject to liability to another for trespass, irrespective of whether [they] thereby cause[] harm to any legally protected interest of the other, if [they] intentionally

(a) enter land in the possession of the other, or cause[] a thing or a third person to do so, or

(b) remain on the land, or

(c) fail to remove from the land a thing which [they are] under a duty to remove.

Restatement§ 161 states:

(1) A trespass may be committed by the continued presence on the land of a structure, chattel, or other thing which the actor has tortiously placed there, whether or not the  actor has the ability to remove it.

(2) A trespass may be committed by the continued presence on the land of a structure, chattel, or other thing which the actor's predecessor in legal interest therein has tortiously placed there, if the actor, having acquired [their] legal interest in the thing with knowledge of such tortious conduct or having thereafter learned of it, fails to remove the thing.

Restatement§ 6 (Am. Law Inst. 1965) states:

The word "tortious" is used throughout the Restatement of this Subject to denote the fact that conduct whether of act or omission is of such a character as to subject the actor to liability under the principles of the law of Torts.

Finally, Restatement§ 166 (Am. Law Inst. 1965) states:

Except where the actor is engaged in an abnormally dangerous activity, an unintentional and non-negligent entry on land in the possession of another, or causing a thing or third person to enter the land, does not subject the actor to liability to the possessor, even though the entry causes harm to the possessor or to a thing or third person in whose security the possessor has a legally protected interest.

Applying this law to the facts of this case, the court held:

Accordingly, we hold that a person whose plant, located on the person's property, drops leaves, flowers, or fruit onto neighboring property, or whose plant's roots interfere only with other plant life on neighboring property, is not liable to the neighboring property owner for trespass.

So, leaves, flowers and fruit falling onto your neighbor's property is NOT common law trespass.  If they cause damage to person or property on the way down, the court noted that you could be liable in "tort". 

American Bar Assn's Section of Litigation Real Estate, Condemnation, and Trust Litigation Roundtable Materials

Thanks to Professor Shelley Saxer, Anthony Della Pelle, Esq. and Kristen Renfro, Esq. for presenting at the American Bar Assn's Section of Litigation Real Estate, Condemnation, and Trust Litigation Roundtable on Property Damage Claims After Disasters.

The cases mentioned on the call are linked below:

• City of Oroville v. The Superior Court of Butte County, California Supreme Court, August 15, 2019.
• Miller v. Schoene, 276 U.S. 272 (1928)
• Russo Farms v. Vineland Bd. of Educ., 675 A.2d 177 (N.J. 1996)
• Bureau of Harvey Cedars v. Karan, 70 A.3d 524 (N.J. 2013)
• In re Stockton, Ninth Circuit Court of Appeals (Dec. 2018)

On the issue of statutes of limitation for inverse condemnation claims, our amicus brief is here. You can find more information about that case (and others) at www.inversecondemnation.com.  

Thanks to our speakers and we look forward to future ABA Section of Litigation Roundtables.

Upcoming Free Webinar: When the Floods and Fires Come: Landowner's Property Damage Claims

Fires, superstorms, cataclysmic floods seem to abound across the nation. Property damage claims abound, but how should claims against public utility or governmental actors be handled? Are there strategic implications for bringing claims against the utility? What are the practical issues?

Answers to these questions and more will be provided on a free webinar (conference call really) provided by the American Bar Association's Section on Litigation's Real Estate, Condemnation and Trust Litigation Committee.

We will hear from Professor Shelley Saxer of Pepperdine Law School, Anthony Della Pelle, Esq. of New Jersey and Kristen Renfro, Esq. of California.  Professor Saxer will provide the current trends in legal theories nationally and Mr. Della Pelle and Ms. Renfro will provide their insights as practitioners.

And its free.  Registration information is here.  August 22 at 2 p.m. Eastern. In the immortal words of Steve MacGarrett, be there.

More on Hawaii's Three Judge Panel Reviewing Governor's TMT Proclamation

As it often the case in the law, when you peel back one layer of an onion, you get more and more and more.

In this case, after writing yesterday's post on the three judge panel reviewing Governor Ige's Emergency Proclamation for TMT, we wondered what other three judge panels exist in Hawaii law.

We couldn't find any others and think that the old three judge panel from Haw. Rev. Stat. 127 flowed from the Three Judge Panel Act of 1910.  This federal statute was designed to protect statutes from "hasty invalidation from federal judges", see The Three-Judge Court Act of 1910: Purpose, Procedure and Alternatives (available here).  After the U.S. Supreme Court's decision in Ex Parte Young, which allowed for such invalidation by a single judge, Congress limited the power of a single judge to invalidate a statute by passing the Three Judge Panel Act of 1910.

Since Haw. Rev. Stat. 127 was passed in the territorial era, it makes sense for the local statute to follow that federal form.

But, in 1976, Congress acted again to pull back from the use of these special courts.  As noted by Justice Antonin Scalia:

Rare today, three-judge district courts were more common in the decades before 1976, when they were required for various adjudications, including the grant of an “interlocutory or permanent injunction restraining the enforcement, operation or execution of any State statute . . . upon the ground of the unconstitutionality of such statute.” 28
U. S. C. §2281 (1970 ed.), repealed, Pub. L. 94–381, §1, 90 Stat. 1119. See Currie, The Three-Judge District Court in Constitutional Litigation, 32 U. Chi. L. Rev. 1, 3–12
(1964). Decisions of three-judge courts could, then as now, be appealed as of right directly to this Court. 28 U. S. C. §1253. In 1976, Congress substantially curtailed the circumstances under which a three-judge court is required. It was no longer required for the grant of an injunction against state statutes, see Pub. L. 94–381, §1, 90 Stat. 1119 (repealing 28 U. S. C. §2281), but was mandated for “an action . . . challenging the constitutionality of the apportionment of congressional districts or the apportionment of any statewide legislative body.” Id., §3, now codified at 28 U. S. C. §2284(a).

Shapiro v. McManus, 136 S. Ct. 450 (2015).  

We haven't heard from our latest three judge panel yet, but will post when we do.

Three Judge Panels? Super Circuit Courts and Emergency Proclamations

While we are slowly migrating this blog as part of a rebranding, we could not pass up the opportunity to delve into one of the legal aspects of the ongoing discourse over the Thirty Meter Telescope (artistic rendering below).

Our friends at Civil Beat published an article about a TMT-related hearing on Monday, July 22, 2019, before three Honolulu based circuit judges. Star-Advertiser also had an article (paywall).  Now, many readers continued past that lede, but I stopped and said, Huh?

First, this is the legal challenge to the Governor's emergency proclamation which can be found here.

Now, three judge panels at the trial court level are very, VERY rare.  Reapportionment challenges can be heard by a panel of three Federal judges in the first instance with a direct appeal to the U.S. Supreme Court.  28 U.S.C. 2284 (providing for three judge panels for challenges to reapportionment or when Congress directs).

[Author's Note:  Our experience with Hawaii's 2010 reapportionment and a three judge panel can be found here.]

So, inquiring minds want to know, a Hawaii state court, three judge panel?  Read on and learn.

In 2014, Hawaii enacted Ch. 127A in order to update Hawaii's civil defense statutory framework following the end of the, ahem, Cold War.  The bill, committee reports and testimony can be found here.

The purpose of which was:

Policy and purpose.  (a)  Because of the existing and increasing possibility of the occurrence of disasters or emergencies of unprecedented size and destructiveness resulting from natural or man-made hazards, and in order to ensure that the preparations of this State will be adequate to deal with such disasters or emergencies; to ensure the administration of state and federal programs providing disaster relief to individuals; and generally to protect the public health, safety, and welfare and to preserve the lives and property of the people of the State, it is hereby found and declared to be necessary:

     (1)  To provide for emergency management by the State, and to authorize the creation of local organizations for emergency management in the counties of the State;

     (2)  To confer upon the governor and upon the mayors of the counties of the State the emergency powers necessary to prepare for and respond to emergencies or disasters;

     (3)  To provide for the rendering of mutual aid among the counties of the State and with other states and in cooperation with the federal government with respect to the carrying out of emergency management functions; and

     (4)  To provide programs, in cooperation with other governmental agencies, the private sector, and nonprofit organizations, to educate and train the public to be prepared for emergencies and disasters.

     (b)  It is further declared to be the purpose of this chapter and the policy of the State that all emergency management functions of this State and its counties be coordinated to the maximum extent with the comparable functions of the federal government, including its various departments, and agencies of other states and localities, and with private-sector and nonprofit organizations, to the end that the most effective preparation and use may be made of the nation's personnel, resources, and facilities for dealing with any emergency or disaster that may occur.

     (c)  It is the intent of the legislature to provide for and confer comprehensive powers for the purposes stated herein.  This chapter shall be liberally construed to effectuate its purposes; provided that this chapter shall not be construed as conferring any power or permitting any action which is inconsistent with the Constitution and laws of the United States, but, in so construing this chapter, due consideration shall be given to the circumstances as they exist from time to time.  This chapter shall not be deemed to have been amended by any act hereafter enacted at the same or any other session of the legislature, unless this chapter is amended by express reference.

Property owners take note:  governmental actions which take property can be compensated explicitly by this statute.  Haw. Rev. Stat. 127A-22 provides for governmental determination of fair market value of the property lost and if the landowner disagrees with the value, they can take 75% of the government's offer and sue for the balance.

But, back to the judges THREE.

For temporary restraining orders or preliminary injunctions, Ch. 127A provides for a very unique trial:

 [§127A-27]  Preliminary or interlocutory injunctions and temporary restraining orders.  Notwithstanding any other law to the contrary, no preliminary or interlocutory injunction, or temporary restraining order, suspending, enjoining, or restraining the enforcement, operation, or execution of, or setting aside, in whole or in part, on the ground of unconstitutionality or for any other reason or reasons, any provision of this chapter or any proclamation, order, or rule prescribed, made, or issued under the authority of this chapter, shall be issued or granted by any court of the State, or by any judge thereof, unless the application for the same is presented to a circuit judge, is heard and determined by the circuit judge sitting with two other circuit judges, and a majority of the judges concur in granting the application.  When the application is presented to a judge, the judge shall immediately notify the chief justice of the supreme court of the State, or the senior associate justice in the event of the chief justice's absence or incapacity or a vacancy in the office, who shall forthwith assign two other circuit judges to sit with the circuit judge in hearing and determining the application.

     The application shall not be heard or determined before at least five days' notice of the hearing has been given to the governor and the attorney general, or to the mayor and the county corporation counsel, as applicable, and to such other persons as may be defendants or respondents in the suits.  In cases in which immediate irreparable damage would otherwise ensue to the petitioner, the circuit judge to whom the application is made may, after giving notice to the governor and the attorney general, or the mayor and the county corporation counsel, as applicable, and allowing them an opportunity to appear, grant a temporary stay or suspension, in whole or in part, of the operation of the statutory provision, proclamation, order, or rule.  The temporary stay or suspension shall remain in force only until the hearing and determination of the application for a preliminary or interlocutory injunction, and in any event for not more than ten days from the date of the order of the judge.  If the two additional circuit judges have been assigned to the case, no temporary stay or suspension shall be ordered unless a majority of the three circuit judges shall concur.

     In a case of the stay or suspension, the order of the judge or judges shall contain a finding or findings, based upon evidence submitted to the judge or judges and incorporated in the order by reference thereto, that irreparable damage would result to the petitioner, and specifying the nature of the damage and why it is immediate and irreparable.  The three circuit judges assigned to sit in the case may, upon a like finding and for good cause shown, appearing from reasons entered of record, continue the temporary stay or suspension for an additional ten-day period, but for only one such period unless the party against whom the order is directed consents that it may be extended for a longer period.  The hearing upon an application for a preliminary or interlocutory injunction shall be given precedence and shall be in every way expedited and be assigned for hearing at the earliest practicable day.

     If a temporary stay or suspension has been allowed, the application for a preliminary or interlocutory injunction shall be set for hearing within five days after the granting of the stay or suspension.  When the matter comes on for hearing, the party who obtained the temporary stay or suspension shall proceed with the application for a preliminary or interlocutory injunction.  Otherwise the temporary order shall be dissolved forthwith.  No extension of time shall be granted without the approval of at least two of the three judges.  Upon the final hearing of any such suit, the same requirement as to judges and the same procedure as to expedition shall apply. [L 2014, c 111, pt of §2]

So, why would we do it this way?  Circuit court judges, acting alone, have unsurpassed power to issue life sentences, to jail before trial, to sanction, etc., so why three?

This provision of Ch. 127A was in the Cold War era statute, Haw. Rev. Stat. 127-29.  HRS 127-29 dates back to the 1950's, before Hawaii had an Intermediate Court of Appeals (with three judges). 

This statute is for temporary restraining orders or preliminary injunctions to enjoin emergency proclamations which are necessarily very quick, harried court reviews of a case's circumstances.  I think there are a couple of policy reasons for this regime:

First, practical:  getting three circuit court judges in a courtroom can be done quickly while allowing for normal judicial review to the Hawaii Supreme Court (and now Intermediate Court of Appeals).   Easy on Oahu with over 20 circuit (or acting circuit) judges.  Maui only has three circuit judges.  Hawaii has four (two on each side).  Kauai has two.  

Second, judicial practicality:  in the legal world, the more judges who sign on to a decision, the more weight that decision has.  In the immortal words of Justice Robert Jackson, "We are not final because we are infallible, but we are infallible only because we are final."  Brown v. Allen, 344 U.S. 443, 540 (1953).  With three judges, convening in a post-nuclear war, there is greater legitimacy to judicial injunction of a governor than a single judge acting alone.

So, we have an old injunction regime designed for the Cold War.  How will it handle the Governor's proclamation here?  Stay tuned.

 

[Courtesy TMT International Observatory]

 

 

Hawaii Aquarium Fish Permit Triggering Environmental Review - Oral Argument

The Hawaii Supreme Court conducted oral arguments last week in the case of Umberger v. Department of Land and Natural Resources.  This is the case asking whether an online commercial fishing permit application triggers environmental review under Hawaii's Environmental Policy Act, Ch. 343.

Several individuals and environmental groups brought suit against the State of Hawaii's Department of Land and Natural Resources (DLNR) seeking a declaration that Hawaii's environmental policy act, Ch. 343, (HEPA) required the preparation of an environmental assessment prior to issuing permits to take aquarium fish.  DLNR is the state agency responsible for managing the State of Hawaii ocean resources, like fish.  My earlier post is here.

The oral argument is available in mp3 format here.  

Or if you'd like to here it here, click on the player below.

SCOA_033017_SCWC-13-2125

 If I was a betting man, I'm thinking DLNR will either need to categorically exclude a lot of permits or Hawaii will need a few more environmental consulting companies. Stay tuned.

Hawaii Real Estate Litigation Update - 2016 - Telescopes, Ag Lands and More

My partner Gregory W. Kugle and I were pleased to present at our fourth annual Hawaii State Bar Association Real Property and Financial Services Section Real Estate Litigation Update for 2016. Greg covered the big cases from 2016, including the Thirty Meter Telescope, the Haleakala Telescope, Koa Ridge and Hoopili.  The topics covered and links to opinions and analysis are below.   

 

 

RPFSS Brown Bag - Litigation Update

By Gregory W. Kugle and Mark M. Murakami

November 18, 2016

Topic	Case	Hyperlink
Important Ag Lands	Sierra Club v. D.R. Horton-Schuler Homes	Opinion, Dissent
Important Ag Lands	Sierra Club v. Castle & Cooke Homes Hawaii, Inc.	Opinion, Dissent
Conservation District Permits	Kilakila ‘o Haleakala v. Bd. Of Land & Natural Res.	Opinion, Concurrence, Wilson Dissent, Pollack Dissent, Analysis
Environmental Policy	Kilakila ‘o Haleakala v. Bd. Of Land & Natural Res.	Opinion
Environmental Policy	Umberger v. Dep’t of Land & Natural Res.	ICA Opinion
Condemnation	County of Kauai v. Hanalei River Holdings, Ltd.	ICA Opinion, Analysis
Land Use	Robert D. Ferris Trust v. Planning Comm'n of the County of Kauai	Opinion, Analysis
Admin Law	Ford v. Leithead-Todd	ICA Opinion
Admin Law	Green Party of Hawaii v. Scott Nago	Opinion, Analysis

 

NATIONAL

 

Topic	Case	Hyperlink
Affordable Housing –Inclusionary Zoning	616 Croft Avenue LLC v. City of West Hollywood	Opinion
Planning and Property Rights	Kirby v. North Carolina Department of Transportation	Opinion
Entry Statutes	Property Reserve, Inc. v. Superior Court	Analysis
Highest and Best Use and Jury vs. Judge	City of Perris v. Stemper	Opinion
Regulatory Takings	Murr v. State of Wisconsin	Analysis

NEXT UP

 

Federal and State Preemption - Ninth Circuit GMO Cases

Hawaii Supreme Court - State Retirees Right to Health Benefits Requires Trial

Deviating from our usual fare of ocean and land related cases, we wade into a constitutional thicket and report on Dannenberg v. State of Hawaii.  The opinion from the Supreme Court is here.  

Judge James Dannenberg (retired) is the lead plaintiff in a class action brought on behalf of:

All employees (and their dependent-beneficiaries) who began working for the Territory of Hawai'i, the State of Hawai'i or the political subdivisions thereof, before July 1, 2003, and
who have accrued or will accrue a right to post-retirement health benefits as a retiree or dependent-beneficiary of such a retiree. This includes: (a) those who have not yet
received any post-retirement health benefits from Defendants as a retiree or dependent beneficiary of such a retiree; and (b) those. who have received any post-retirement health
benefits from Defendants since July 1, 2003 as a retiree or dependent-beneficiary of such a retiree. For purposes of damages only, if any, the class shall also include the estates and heirs of any deceased retiree or deceased dependent-beneficiary of a retiree who is or was a member of the class.

So, basically, every retired state or county worker.  [Side note:  Judge Dannenberg was an adjunct professor teaching Evidence to a certain blogger].  At issue was whether the State and Counties have impaired the "accrued retirement health benefits" in violation of article XVI, section 2 of the Hawaii Constitution which provides: 

Membership in any employees' retirement system of the State or any political subdivision thereof shall be a contractual relationship, the accrued benefits of which shall not be diminished or impaired.

The class action plaintiffs argued that the State had to maintain parity with current health benefits, lest they impair the benefits of retirees.  The State had changed copays, coverages, deductibles and maximums for the retirees leading to this lawsuit.

The State argued that there was no diminishment of benefits, as a matter of fact.  The case went to the Hawaii Supreme Court by way of summary judgment granted in favor of the State.

The Hawaii Supreme Court (not the usual court, since all justices recused themselves) found that parity with current employees was not the constitutionally required but what the impairment clause protected was "accrued health benefits".  So, a trial was necessary to determine what each employees accrued health benefits actually were:

Instead, we hold that the starting place for a determination of Appellants' accrued health benefits is the retiree health benefits, included in a Health Fund benefits plan,
that were promised to Appellants at the time of their enrollment in the ERS, as these are the benefits that, in the first instance, arise from their membership in the ERS.

Noting that benefits change from time to time, both positively and negatively, the Court stated:

Offsetting advantages and disadvantages must take into account how changes to health benefits impact retirees, as well as the government fisc. See Duncan, 71 P.3d at 891-92. In other words, considering the health benefits included in the health benefits plan offered by the Health Fund as the starting place, the "equivalent value" of accrued retirement health benefits must be viewed from the beneficiaries' viewpoint, and not simply in consideration of the cost to the State. As explained in Duncan, "equivalent value must be proven by a comparison of benefits provided-merely comparing old and new premium costs does not establish equivalency." Duncan, 71 P.3d at 892.

The court remanded the case to circuit court for trial.  Stand by for that one.

Hawaii Appeals Court Says Permit Applications for Aquarium Fish Not "Actions" Triggering Hawaii Env. Policy Act

It is a rare day that this dirt lawyer, with an ocean-related blog, gets to blog about environmental law AND the ocean environment.  Dear readers - today is the day!  In a case certainly bound for the Hawaii Supreme Court, the Intermediate Court of Appeals (ICA) held that aquarium fish permit applications was not sufficient "action" to require the applicants to prepare an Environmental Assessment under Haw. Rev. Stat. Ch. 343.

The case is Umberger v. Dep't of Land and Natural Resources, State of Hawaii and the ICA's opinion can be found here.

This is a straightforward case factually.  Several individuals and environmental groups brought suit against the State of Hawaii's Department of Land and Natural Resources (DLNR) seeking a declaration that Hawaii's environmental policy act, Ch. 343, (HEPA) required the preparation of an environmental assessment prior to issuing permits to take aquarium fish.  DLNR is the state agency responsible for managing the State of Hawaii ocean resources, like fish.  

Under Haw. Rev. Stat. 188-31, the DLNR has permitting authority over the aquarium fish trade:

(a) Except as prohibited by law, the department, upon receipt of a written application, may issue an aquarium fish permit, not longer than one year in duration, to use fine meshed traps, or fine meshed nets other than throw nets, for the taking of marine or freshwater nongame fish and other aquatic life for aquarium purposes.

(b) Except as prohibited by law, the permits shall be issued only to persons who can satisfy the department that they possess facilities to and can maintain fish and other aquatic life alive and in reasonable health.

(c) It shall be illegal to sell or offer for sale any fish and other aquatic life taken under an aquarium fish permit unless those fish and other aquatic life are sold alive for aquarium purposes.

The department may adopt rules pursuant to chapter 91 for the purpose of this section.

(d) For the purposes of this section:

(1) “Aquarium purposes” means to hold salt water fish, freshwater nongame fish, or other aquatic life alive in a state of captivity as pets, for scientific study, or for public exhibition or display, or for sale for these purposes; and

(2) “Aquarium fish permit” means a permit issued by the board for the use of fine mesh nets and traps to take salt water fish, freshwater nongame fish, or other aquatic life for aquarium purposes.

The reef fish trade has been controversial for the past several years.  See media reports: here, here and here.

To trigger the need for an environmental assessment, there must be an "action" which is subject to environmental review.  There are three requirements: First, an "action" is a "any program or project to be initiated by an agency or applicant."

Second, the action must involve an enumerated triggers under Haw. Rev. Stat. 343-5:

(a)  Except as otherwise provided, an environmental assessment shall be required for actions that:

     (1)  Propose the use of state or county lands or the use of state or county funds, other than funds to be used for feasibility or planning studies for possible future programs or projects that the agency has not approved, adopted, or funded, or funds to be used for the acquisition of unimproved real property; provided that the agency shall consider environmental factors and available alternatives in its feasibility or planning studies; provided further that an environmental assessment for proposed uses under section 205-2(d)(11) or 205-4.5(a)(13) shall only be required pursuant to section 205-5(b);

     (2)  Propose any use within any land classified as a conservation district by the state land use commission under chapter 205;

     (3)  Propose any use within a shoreline area as defined in section 205A-41;

     (4)  Propose any use within any historic site as designated in the National Register or Hawaii Register, as provided for in the Historic Preservation Act of 1966, Public Law 89-665, or chapter 6E;

     (5)  Propose any use within the Waikiki area of Oahu, the boundaries of which are delineated in the land use ordinance as amended, establishing the "Waikiki Special District";

     (6)  Propose any amendments to existing county general plans where the amendment would result in designations other than agriculture, conservation, or preservation, except actions proposing any new county general plan or amendments to any existing county general plan initiated by a county;

     (7)  Propose any reclassification of any land classified as a conservation district by the state land use commission under chapter 205;

     (8)  Propose the construction of new or the expansion or modification of existing helicopter facilities within the State, that by way of their activities, may affect:

         (A)  Any land classified as a conservation district by the state land use commission under chapter 205;

         (B)  A shoreline area as defined in section 205A-41; or

         (C)  Any historic site as designated in the National Register or Hawaii Register, as provided for in the Historic Preservation Act of 1966, Public Law 89-665, or chapter 6E; or until the statewide historic places inventory is completed, any historic site that is found by a field reconnaissance of the area affected by the helicopter facility and is under consideration for placement on the National Register or the Hawaii Register of Historic Places; and

     (9)  Propose any:

         (A)  Wastewater treatment unit, except an individual wastewater system or a wastewater treatment unit serving fewer than fifty single-family dwellings or the equivalent;

         (B)  Waste-to-energy facility;

         (C)  Landfill;

         (D)  Oil refinery; or

         (E)  Power-generating facility.

Third, the action must not be exempt under Haw. Rev. Stat. 343-6 (authorizing the Environmental Council to exempt specific types of actions).

In this case, the alleged action was the "directed intentional, large-scale commercial removal under each permit, and collectively under the dozens of permits DLNR issued." Opinion at 11.  The challengers did concede that their interpretation of Haw. Rev. Stat. Ch. 343 would equally apply to recreational aquarium fish permits.

The ICA then turned to the prior cases where Hawaii courts have reviewed "programs" or "projects" and determined them to be "actions."  Think - Koa Ridge, Superferry.  The ICA stated, "The projects or programs described in these cases also exemplify the essential nature of HEPA's intended reach and that the definition of "action" as "any program or project" - as opposed to, for example, "any activity whatsoever" - reflects that not every level of regulated activity is meant to be swept into HEPA's reach.  [Whew - can you imagine having to do an EA before you obtained a driver's license or, as the ICA pointed out, a parent netting one or two fish from a stream for their child's fish tank].

The ICA pointed out the wide array of conservation statutes designed to regulate fishing in Hawaii as well as those permits that regulate activities potentially impacting marine environment - none of which require an environmental assessment.

Summing up, the ICA held, "We conclude that to interpret "program or project" so sweepingly as to require individual aquarium fish permit applicants to undertake the EA process is not a 'rational, sensible and practicable interpretation' of HEPA and would create an unreasonable, impractical and absurd result."

Stay tuned for further appeal.