Case Title: Maui Tomorrow v. State.

Citation: 110 Haw. 234

Docket Number: 

State: hawaii

Court: Hawaii Supreme Court

Date: 2006-04-05T00:00:00Z

Document:
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IN THE SUPREME COURT OF THE STATE OF HAWAI'I
---000:
formally known as MAUI TOMORROM

MAUI TOMORROW,
FOUNDATION, INC., and its supporters, Appellant

 

STATE OF HAWAI'I, BOARD OF LAND AND NATURAL RESOURCES of the
‘State of Hawai'i; DEPARTMENT OF LAND AND NATURAL RESOURCES
of the State of Hawai'i; PETER T. YOUNG, in his official
capacity as Chairperson of the Board of Land and Natural
Resources and the Director of the Department of Land and
Natural Resources; ALEXANDER & BALDWIN, INC.7 EAST MAUL
IRRIGATION CO.} MAUI LAND & PINEAPPLE CO., INC.; COUNTY OF
MAUI, DEPARTMENT OF WATER SUPPLY; HAWAII FARM BUREAU FEDERATION,
Appellees

(crv. NO. 03-1-0289)

   

 

NA MOKU ‘AUPUNI © KO'OLAU HUI; BEATRICE KEKAHU
MARJORIE WALLETT; ELIZABETH LAPENIA,
Appellant s-Appellants

and

    

802 Hd S- yay sony
qa

MAUI TOMORROW, Appellant-Appellee

STATE OF HAWAT'I, BOARD OF LAND AND NATURAL RESOURCES of the
‘State of Hawai'i? DEPARTMENT OF LAND AND NATURAL RESOURCES
of the State of Hawai'i; PETER T. YOUNG, in his official
capacity as Chairperson of the Board of Land and Natural
Resources and the Director of the Department of Land and
ALEXANDER & BALDWIN, INC.; EAST MAUL

INC. ; COUNTY OF

Natural Resources;
MAUI LAND & PINEAPPLE CO.,
HAWAII FARM BUREAU FEDERATION,

IRRIGATION CO.
DEPARTMENT OF WATER SUPPLY:
Appellees-Appel lees

avr,
(io. 26404; CIV. NO. 03-1-0292)
MAUI TOMORROW, formally known as MAUT TOMORROW FOUNDATION, INC.,

and its supporters, Appellant,

 
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STATE. OF HAWAT'T
State of Hawai'i;

 

BOARD OF LAND AND NATURAL RESOURCES of the
DEPARTMENT OF LAND AND NATURAL RESOURCES of the
State of Hawai'i; PETER T. YOUNG, in his official capacity as
Chairperson of the Board of Land’and Natural Resources and the
Director of the Department of Land and Natural Resources;
ALEXANDER & BALDWIN, INC.; EAST MAUI IRRIGATION CO.; MAUI LAND &
PINEAPPLE CO., INC.} COUNTY OF MAUI, DEPARTMENT OF WATER SUPPLY;
HAWAII FARM BUREAU FEDERATION, Appellees.
(CIV. NO. 03-1-0289)

 

 

NA MOKU ‘AUPUNI © KO'OLAU HUI; BEATRICE KEKAHUN

 

MARJORIE
WALLETT; ELIZABETH LAPENIA, and MAUI TOMORROW,

Appellants-Appellees,

ALEXANDER & BALOWIN, INC., and EAST MAUI IRRIGATION COMPANY,
LIMITED, Appellees~Appellants,

and

STATE OF HAWAT'T; BOARD OF LAND AND NATURAL RESOURCES of the
State of Hawai'i; DEPARTMENT OF LAND AND NATURAL RESOURCES of the
State of Hawai'i;

PETER T. YOUNG, in his official capacity as
Chairperson of the Board of Land and Natural Resources and the

Dixector of the Department of Land and Natural Resources; MAUI
LAND & PINEAPPLE CO., INC.; COUNTY OF MAUI,

DEPARTMENT OF WATER
SUPPLY; HANAII FARM BUREAU FEDERATION, Appellees-Appellees.

 

 

NATIVE HAWAIIAN LEGAL CORPORATION,

Party In Interest-Appellee.
(NO. 26623; CIV. NO. 0371-0292)

no, 26404

APPEALS FROM THE FIRST CIRCUIT COURT
(CIV. NOS. 03-1-0289 AND 03-1-0292)

APRIL 5, 2006

MOON, C.J., LEVINSON, NAKAYAMA, ACOBA, AND DUFFY, JJ.
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OPINION OF THE COURT BY DUFFY, J

This case arises out of the request for a contested
case hearing made by Na Moku ‘Aupuni 0 Ko'olau Hui, Beatrice
Kekahuna, Marjorie Wallett, and Elizabeth Lapenia (hereinafter,
collectively, Na Moku), contesting the application of Alexander &
Baldwin (AGB) and East Maui Irrigation Company (EMI)
[hereinafter, collectively, AsB/EMI) to the State of Hawai'i,
Board of Land and Natural Resources (BLNR) for a long-term lease
to continue to use water sourced in streams in East Maui on
State-owned land and transport it through AGB/EMI’s privately

built and maintained irrigation system to various agricultural

 

and domestic water uses across Maui. After the BLNR issued its
“piret Amended Findings of Fact and Conclusions of Law and Order”
in favor of AGB/EMI, Na Moku initiated an agency appeal. The
First Circuit Court? affirmed in part and reversed in part. The
circuit court then (1) denied the motion of Na Moku and its
counsel, Native Hawaiian Legal Corporation (hereinafter, NHLC},
for attorneys’ fees, costs and expenses, and (2) denied AGB/EMI’s
subsequent motions for (a) Hawai'i Rules of Civil Procedure
(RCP) Rule 11 (2000) sanctions against Na Moku and NHLC’s
counsel and (2) attorneys’ fees.

on February 13, 2004, Na Moku filed a notice of appeal

from the circuit court's January 16, 2004 order denying the

 

+ the Honorable Eden Elizabeth Hifo presided over these matters.

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motion for attorneys’ fees, costs and expenses, which was
docketed as SC No. 26404. On June 14, 2004, AGB/EMI filed a
notice of appeal from the circuit court’s (1) May 14, 2004 order
denying A&B/EMI’s motion for sanctions under ERCP Rule 11 and (2)
May 14, 2004 order denying ASB/EMI’s motion for attorneys’ fees,
which was docketed as SC No. 26623. On February 7, 2006, the two
appeals were consolidated under SC No. 26404.

Based on the following, we affirm the January 16, 2004
and May 14, 2004 orders of the circuit court.

T. BACKGROUND

For the past 120 years, EMI, a subsidiary of AGB, has
owned and operated a ditch system that diverts surface water
emanating in part from State lands in East Maui, and transports
At to Central and Upcountry Maui for agricultural, domestic, and
other purposes. A&B/EMI have obtained the water from the State
lands pursuant to water leases at four license areas, identified
as Hononanu, Huelo, Ke'anae, and Nahiku, which were issued by the
State and its predecessors, Since the expiration of the original
lease term for these four license areas, the State of Hawai'i,
through the BLNR, the Department of Land and Natural Resources
(DLNR), and Peter 7, Young, in his official capacity as
Chaizperson of the BLNR and the DLNR (hereinafter, collectively,
the State], has issued year-to-year revocable permits to A&B and

EMI.
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on May 14, 2001, A6B/EMI filed an application with the
BLNR (hereinafter, Application] seeking a thixty-year lease to
continue to use water sourced in streams in East Maui and
transport it through its irrigation system to various water uses
across Maui. AGB/EMI also requested in the Application that the
State continue to issue ASB and EMI yearly revocable permits
pending issuance of the long-term lease.

Na Moku and Mavi Tomorrow both requested @ contested
case hearing to challenge the legality of the Application’ s
proposed disposition of public lands and resources. On June 22,
2001, the BLNR granted Na Moku’s and Maui Tonorrow’s requests.
The following entities were granted standing to participate in
the contested case proceedings: AGB/EMI; Maui Tonorrow; Na Mokus
the County of Maui, Department of Water Supply: Maui Land 6
Pineapple Co., Inc. (hereinafter, NLP], which intervened to
protect its use of water for farming operations; and Hawaii Farm
Bureau Federation (hereinafter, HFBF], a not-for-profit
organization, which intervened to represent the interests of Maui
small and family farmers who are end users of a portion of the
water from the AGB/EMI irrigation systen.

In its written petition for a contested case, Na Moku
raised eight issues:

1) Whether out of watershed transfers of water in a non-
Sesignates water management area and/or without ¢
fon on Mater Renource

ing such use is prohibited.

 
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2
Siolate thete ra
Section sit) of the Hawaii Aduission Act, Section
‘ZLLGI St the Wiwaten Hones Conmlanion Act, —and their
Satutons duty eursusnt to [Gawaii Reviees Sestutes
Tings. Heelies Re aithaut
Fr i ised fate 5

3) Whether the Board of Land and Natural Resources has
‘Gonplied with the requivenants set forth in HRS § 171-
Sere)

4) Whether che Department of Land and Natural Resources:
has complied with the requirenents set forth in HAS §
21-583)

5) Whether the Board of Land and Naturel Resources mst

Comply with the requirenents of HRS Chapter § 343-5(b)
Sno prepare and elveulate for public review and
Comment. an Environmental Assessment end an
Envionsental Impact Statement. prior to any
Glsposition of water from streams within the Honomant,
Huels, Ke'anae, and Nahiky License areas

6) Whether che
within che sonomenu Suelo, feanse and Manan
ghee that inclode, ut are not Linstea toy the

Gathering of native strean fauna dependent upon the
protection of instream flows.

Whetner appurtensnt water rights are abridged by the
Giversion of water from certain East Mavi streams

 

 

SERIE the’ fonceanes Helos Kefanoes and Nahi
Tidtnue eres

©) hethor the Boars of Land and Natusal Resources bas a
Nee eT eT ad custonar
Ra Ea aS tuto, eetanse, and wont

 

License areas before it may allow water to be diverted
from streane within these ar

 

(Emphases added.) .
Based on the written submissions of the parties and
oral argument presented on October 21, 2002, the BLNR hearing

officer issued his “Proposed Findings of Fact, Conclusions of
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Law, and Recommended Order dated Novenber 8, 2002. On
Novenber 15, 2002, the BLNR heard oral arguments on the hearing
officer's recommended order and issued its “Findings of Facts and
Conclusions of Law and Order” on January 13, 2003, and its “First
Amended Findings of Facts and Conclusions of Law and Order” on
January 24, 2003 (hereinafter, collectively, BLNR Decision and
Order], which adopted the hearing officer's “Proposed Findings of
Fact, Conclusions of Law, and Recommended Order.”

With respect to Na Moku’s first issue, the BLNR,
Decision and Order stated, in pertinent part:

Upon determination that it would be in the best
Anterest of the State, SLM nay enter into # lease of water
emanating from State lands for transfer 0)

Watershed of origin provided that such let
Secordance with the procedures set forth in HRS Chapter 171
Gnd provides that all diversions of stream water shall
Heaaln susject to the interim Instresm Flow Standards
(STIFS"} set by CWHM, and to any Judgment of a court of
Cpetent Jurisdiction establishing eppurtenant oF riparian
Fights in favor of downstream users

 

 
  

 

With respect to Na Moku’s fifth issue, the BLNE
determined that an environmental assessment was not required
prior to its granting of 2 long-term lease.

With respect to Na Moku's sixth, seventh, and eighth
issues, the BLNR stated, in relevant part:

4, The jurisdictional power to adjudicate claims to
appurtenant rights lies wth the circuit courts and with the
Chiat, ‘but not with the BLE

 

5, The State of Hawaii has duty to protect the
reasonable euercise of customarily and traditionally
Guereised rights of Hauslians to the extent feasible
pursuant to Article X12, Section 7 of the Hawaii
Constitution.

 

 
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6. In the specific case of determining the minimum
instrean flow standards necessary to protect, to the extent
feasible, traditional and custoaary practices of native
Hawaiians, the CWiut is the appropriate agency to fulfill the
State's daty.

 

8. 50 long as the proposed disposition of water by

the BM 1a °made subject to the instrean flow standards

established by the Cla, the BINR has no duty to perform its
eigation with regard to the

aras necessary to protect,

feasible, traditional and customary practices

Hawaiians

   

The BLNR’s Decision and Order did not decide Na Noku’s
second, third, and fourth issues regarding whether section 5(f)
of the Admission Act, section 213(i) of the Hawaiian Hones
Commission Act (HCA), or HRS chapter 171 were violated.

on February 7, 2003, Na Moku filed an agency appeal of
the BLNR’s Decision and Order in the Circuit Court of the First
Circuit (Civil No. 03-1-0292).? Specifically, Na Moku asserted,

in relevant part:

Tr]he BLN action deprived Appelients Na oko, ot
1! of their rights to procedural due process.

‘Second Claim tor Relief: Unsanctioned Out of
Motershed Diversions’

46. The only lawful means to divert and transport
water outside of its watershed of origin is via a water use
Permit issued by CRM, MRS 174C-45(c). Before that may

Secur, the relevant watersheds must be designated water
management areas pursuant to HRS 1/4C=41.

 

 

49, Since there has been no designation, there can be
no permit authorizing AGB's and EMI’s out of ustershed
Giversione where the diversion would be contrary to the
public trust doctrine and the restriction on transporting
Meter associated with appurtenant rights. AsB's and EMI's

 

! the appeal was consolidated with Maui Tomorrow's agency appeal of the
‘seme BLMR oxder (Civil Ne. 03-1-0289)
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out of watershed transfers are, therefore, unsanctioned.
Dnsanctioned transfers say be enjoined. Rebinson v.
Ariyoshi, 65 law. SU, 648 (1982)

50, Under Article XII, section 7 of the Hawai'i
constitution,

‘me State reaffizas and shall protect ll rights,
Custonarily ond traditionally exercised for
Subsistence, cultural and religious purposes and
fossessea by shupua'a tenante who are descendants of
Pative Hevalsane who inhabited the Navaiian Islands
Prior to 1776, subject to the right of the State to
Feguiate such’ rights.

 

 

51, This provision places an affirmative duty on the
State and its agencies to preserve and protect traditional
and customary native Hewaisan rights, and confers upon the
State and its agencies “the power to protect these rights
and to prevent any interference with the exercise of these
Tights.” ka Ba‘akes v, land Use Cosmiazion, 394 Hawlat‘s) 3,
45,7 2.34 1068, 1082 (2000) ("Ha Fe'akes"), citing Stand.
Goam. Rep. No. $7, in 1 Proceedings of the Constitutional
Convention of 1978, at 639 (1960). See a1so Bublic Access,
‘Shotelice Hawaii vi County of Kauais, 79 Haw/ai't) 425,457,
50s bead i246, 1250, (995) (hereafter, "BASH")) URS $$ 1-1
and 7-2 (providing two additional sources from which
Gathering rights are derived)

 

 

52, These diversions have severely affected
Appellants Na ueks, et al.'s constitutionally protected
Tights to exercise traditional and customary native Hawaii
Gathering and cther rights associated with streans and
seresnélow.

 

 

 

53. The SLNR’s approval of unsanctioned out of
watershed diversions violates Applicants Na Moki, et al.'s
constitutionally protected Fights.

third Claim for Relief; vielation of HsB.S. chapter
mt es =

 

cers

cs +. RAR § 11-200-8(b) applies and renders an
exemption inder HAR § 11-200-8(a}" inapplicable.

Accordingly, the BLNR is required to prepare an
Cnvizonnental asgessnent for the subject diversions pursuant
fo HRS, § 343-5(a) +

 

 

 

Fou 5 m Analvsis
pf Native Hawaiian Biahis
65, While the State's power to regulate the exercise

 

of Havaiien rights =. . ; necessarily allows the state to
permit development thet interferes with such rights in

Rertain circumstances « -- - (nJevertheless, the state is
Sbligated to protect the reasonable exercise of custonacily

 

 
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and teaditionally exercised rights of Hawaiians to the
Gxtent feasible.” BASH, 79 Haw(ai's] at 450 n.43, 903 P.24
Se 1271 n43 (emphasis added). Therefore, state agencies,
Including the BLUR, "say not act without independently
considering the effect of their actions on Hawaiian
traditions and practices. 94 Hawai] at 46, 7
P.dd at 1083, citing BASH, 79 Hawai) at 437, 903 P.2d at
1258." (emphasis added.)

 

 

66. All state agencies, including the BLNR in this
instance, must make specific findings and conclusions as to
the following: (1) the identity and scope of “valued
cultural, historical, or natural resources” in the petition
rea, inciiding the extent to which traditional and
Custemary native Hawaiian rights are exercised in the
Petition area; (2) the extent to which those resource:
Tneluding traditional and customary native Hawaiian rights-—
will be affected or inpaired by the proposed actions and (3)
The feasible action, if any, to be taken by the [agency] to
Feasonabiy protect native Hawaiian rights if they are found
toexist. Kapaiakal, 94 taw(aiis] at 47.

 

  

67. The BLNR, as a state agency, has an independent
constitutional duty’ to identify the practices that could be
affected by the proposed action, assess the inpact of the
proposed action on those practices, and design reasonable
protective measures before it acts’ on this propossl-

 

68. Without this analysis, the BLNR must withhold
granting of any permits to transport water from East Mavs

69. Absent the information resulting from this
analysis, the BLNR has no may of determining whether
approval of ‘either propose! constitutes # breach of ite duty
tb protect the reasonable exercise of traditional and
Customary native Hawaiian rights Because there has not been
f determination of such rights and the amount of water thet
pay be diverted from East Maul streans without abridging
‘such Fights.

10. By deferring any analysis on the impact of the
diversion on traditional and customary native Hawaiian
Eights to sone later determination of those rights by
another agency violates Appellants Na Woks, et al.(*8)
Constitutional rights. To act in the absence of this
Snalyeis is a breach of the BLNR’s duty, se a state agency,
te protect auch rights. Accordingly, the BUNR must on ite)
om! and prior to taking any action on the proposal, identify
the practices thet covid be affected by the proposed action,
assess the inpact of the proposed scticn on those practices,
and’ design reasonable protective measures

 

 

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(Italics and bold in original; some alterations in original and

some adde

 

footnotes omitted.). The circuit court heard oral
azgunents on Septenber 17, 2003.

on October 10, 2003, the circuit court entered its
“order Affixming in Part and Reversing in Part State of Hawaii
Board of Land and Natural Resources’ Findings of Fact and
Conclusions of Law and Order, Dated January 10, 2003; Amended
January 24, 2003 Regarding Petition Contesting Application for
Long Texm Disposition of Water Licenses and Issuance of Interim
Revocable Permits at Honomanu, Keanae, Nahiku, and Huelo, Maui.”

With respect to Na Moku’s first claim that the BLUR
violated Na Moku’s right to due process, the circuit court found

in favor of the BLNR. With respect to Na Moku’s second and

 

fourth claims, the circuit court state:

Bransfers of Water, the Court initially concludes
that the Water Code, HRS chapter 114C, does not prohibit the
Exansfer of water outside the watershed of origin in an ares
that the Commission on Water Resources Managenent has not
nt ares pursuant to aRS § 174C~
the area of East Maui that ie
the subject of the water lease 1s not # water management

 

 

  

Furthermore, there is Little dispute that the transfer
of water out of the watershed of origin 18 not absolutely
Brohibites under the common law of Hawei's- Bobineon v

65 Haw. G41, 658 P.26 267 (1962) ("Robinson")
Hévevers" Robinson allows these transfers only when it can be
Genonstiated that to do so would not be insurious to other
with rights to water.

In addition conclusion of Law No. 3 of the Firat
imendes Findings of Fact and Conclusions of Law (at pace 7)
acknowledges that, upon a satermination thet it would be in
the best interest of the state, the BLAR may enter into a
lease of water emanating from State lands for trans:

outside of the watershed of origin, provided that the lease

 

 

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As iseued in accordance with the procedures set forth in HRS
chapter 171 and a provision that ail diversions of stream
Water shall remain subject to the interim incstream flow
[andards set sy the CHRM and any judgnent of 2 court of
Competent jurisdiction establishing appurtenant oF riparian
Eights in favor of dowstrean users

 

‘This conclusion of law means that the BLUR could meet
and decide whether it iz in the best interest of the state
fe lease. shatever is excess without knowing what is
“excess,” Accordingly, this Court concludes that this
conclusion of law is fatally flawed, and is inconsistent
Sith the common law and with the suggestion thet one could
Sver Getermine the best interest of the state absent data on

 

 

Native Rights and the Public Trust. This Court
concludes that its analysis of tradition[al] and customary
ative Hawaiian practices and appurtenant rights and the
poblic trust obligations

 

Govetaile into
the issue of cut of watershed transfers. Accordingly, this
court also concludes that it was erronesus for the BLNR to
Sonelude that it could begin the process to put out to Lease
fhe water that could affect these rights without first
baking a determination as to whether it would be in the
Gaters best interest in light of the lack of knowledge or
information of what the CHAM will Gltimately determine in
the future, notwithstanding Appellees’ argument thet the
Gaia bas exclusive Jurisdiction over determining what ancunt
Sf water must flow through the streams which all agencies
have a duty to protect,

‘This Court finds no errer in the BLNR conclusion that
tthe BLYR is not required to conduct a parallel
Investigation. Inthe process of determining whether there
ie’ any surplus water wolch would be in che best interest of
the state to lease for 30 years, the BLAIR is entitied to
rely on ang use any detersination of the CARM to establish
instream flow standards, whether ae a result of Appellant Ne
oka Aupuni 0 Ko'olau’s ‘{{ling of 27 petitions to amend
interim instream {low standards, or any other request, or
Pursuant to CHAN'S exercise of its statutory obligations to
frotect riparian rights, native Hawaiian rights, or in the
Elscharge of any of ite other sbligations. However, if
here iz no CHAM Seterninstion to amend

Standards, then any BLIR investigation it could it
ferform oh theses issues would not be parallel to the CHAM.
Ef the BLUR believes it does not have the requisite
expertise to investigate, then it should walt until the CHR
has acted or aske ite on application to establish instream
flows reflecting the diversion it proposes to make, before
authorizing the diversion.

 

 

 

  

 

In any case, given the provisions of the Hawai'i
Constitution, neither the Sink nor this Court can rubber~
Stanp any determination of the CNM. Rather, the BLUR is

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obligated to make # truly independent investigation as to
iether it’s in the state's best interest to authorize the
Giversion of water from East Maul streans.

Therefore, this Court REVERSES Paragraph{s] 3 and $ of
the Order contained in the BLNR decision and any relaved
Conclusion of lav

(Emphasis added.) .

With respect to Na Moku’s third claim for relief, the
circuit court found that an environmental assessment must be
prepared. The circuit court dismissed with prejudice all other
claims, counterclaims, or cross-claims. Final judgment vas
entered on October 10, 2003, and a “First Amended Final Judgment”
was filed on November 4, 2003. Notably, the circuit court did
not mention the Admission Act or the HHCA.

On November 18, 2003, Na Moku? and NHLC, through their
special counsel, Paul, Johnson, Park & Niles, filed a “Motion for
Attorneys’ Fees, Costs and Expenses” pursuant to 42 U.S.C. § 1988
(2000), asserting that they were “entitled of right to an avard
of reasonable attorneys’ fees and costs in this administrative
appeal and the administrative proceedings below because they have
prevailed on claims grounded on their civil rights under federal

law.” (Bmphasis in original.). In a footnote, they asserted
alternatively that they were entitled to attorneys’ fees under

the private attorney general doctrine. They asked for a total of

> Elizabeth Lapenia was not Listed as a party to this motion.

B
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$241,084.12. On December 16, 2003, the circuit court held
hearing on the motion and orally denied it, stating that “since
it’s . . . clear that the 1983 action was not litigated below and
wasn't discussed in the appeal, I do not believe that this court
has authority to award fees.” The court further denied Na Moku
and NHLC’s request, stating:

I don't think that under [RRCE) Rule 72 and that agency
appeal mechanism that it was contemplated that people most
of whom are pro se are going to heve to pay the costs of the
Sttorneys who are opposing then if they don't prevail or
that they should be able to collect their otherwise minimal
Coste... And, I just think that the better rule for
agency Sppeais is you don’t get fees and costs. You already
have a expedited tailored form (sic) in which to litigate
tnd an expedited cizcuit court limited form (siel under [HRS
s} sine

 

 

 

The court did not mention any basis for denying fees based on the
private attorney general doctrine. On January 16, 2004, the
circuit court entered an order denying Na Moku and NHLC’s motion.
On February 13, 2004, Na Moku filed a timely appeal, docketed as
SC No. 26408.

on February 2, 2004, ASB/EMI filed a Rule 11 motion to
impose sanctions against “counsel for [Na Moku] for bringing Na
Moku and (NHLC]’s Motion for Attorneys’ Fees, Costs and Expenses”
asserting that the motion was “presented for an improper purpose,
land the legal contentions contained therein are utterly
frivolous.” That same day, AsB/EMI also filed a motion for

attorneys’ £4

 

8, asserting that such an award was warranted

pursuant to 42 U.S.C, § 1986 because Na Moku’s civil rights claim

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was “meritless and without foundation|.]" At a hearing on
April 7, 2004, the circuit court orally denied the Rule 11
motion, stating:

«I think the ides of good faith Le not that you
absolutely prevail, but thet you ean make an argument in
Seed faith that would push the decision meker passed (£ic]
the point of corrent Isw or current understanding.

‘So 1 am going to deny this motion because 1 think it
does net mest vnat is the Zeslly high bar for Rule 1

 

 

on May 14, 2004, the circuit court entered two orders denying
both motions. On June 14, 2004, ASB/EMI filed a timely appeal,
docketed as SC No. 26623.
IT. STANDARDS OF REVIEi

A. Award Of Attorneys’ Fees

“This court reviews the denial and granting of
attorney's fees under the abuse of discretion standard.” Chun ws
Bd. of Tes, of Emplovees’ Ret, Svs, of State of Hawai'i, 106
Hawai‘ 416, 431, 106 P.3d 339, 354 (2005) (citations, brackets,
ellipses, and quotation signals omitted) .

“the trial court abuses its discretion if it bases its

ruling on an erroneous view of the law or on a cli

 

rly erroneous
assessment of the evidence.” Canale: v, Bob's Appliance Serv,
Ctr, Inc, 89 Hawai'i 292, 299, 972 P.2d 295, 302 (1999)
(quoting Lepere v, United Pub, Workers, 77 Hawai‘ 471, 473, 667
P.2d 1029, 1031 (1998)) (quotation marks omitted). In other
words, “[a]n abuse of discretion occurs where the trial court has

clearly exceeded the bounds of reason or disregarded rules or

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principles of law or practice to the substantial detriment of 2
party litigant.” Canalez, 69 Hawai‘i at 299, 972 P.2d at 302
(quoting State ex rel. Bronster v. United States Stee] Corp., 82

Hawai'i 32, 54, 919 P.2d 294, 316 (1996)) (quotation marks

 

alteration in original).
B. Rule 11 Sanctions

“ALL aspects of a HRCP Rule 11 determination should be
reviewed under the abuse of discretion standard.” Gap v. Puna
Geothermal Venture, 106 Hawai'i 325, 331, 104 P.34 912, 918
(2004) (citations and quotation marks omitted).

TTI. Discussion

‘ornevs’ Fees eu -and NHLC.

1, Na Moku is Not Entitled to Attorneys’ Fees Under 42
U.8.c. § 19

   

Na Moku asserts that the circuit court abused its
discretion by denying Na Moku’s motion for fees, costs and
expenses because Na Moku is entitled of right to reasonable
attorneys’ fees and costs pursuant to 42 U.S.C. § 1988 for its
successful appeal of the BLNR’s Decision and Order. We
disagree.

Section 198@(b) provides, in relevant part, that “{iJn
any action or proceeding to enforce a provision of sectionl] . -

. 1983. . . of this title, . . . the court, in its discretion,

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may allow the prevailing party, other than the United States, a
reasonable attorney's fee as part of the costs[.)”*

This court has recognized that claims to enforce
section S(f) of the Admission Act and the HHCA (via the Admission
Act) are section 1983 claims. Aged Hawaiians v. Hawaiian Homes
Comm’n, 78 Hawai" 192, 205-07, 891 P.2 279, 292-94 (1995). See
also, Price v, State, 764 F.2d 623, 628 (Sth Cir. 1985) ("We have
recently held that § $(£) of the Admission Act creates a federal
‘right’ enforceable under 42 U.S.C. § 1983." (Citing Keaukaha-
Eanaewa Cnty, Ass'n v. Hawaiian Homes Comm'n, [hereinafter,
Keaukaha II), 739 F.2¢ 1467, 1472 (Sth Cir. 1984).)). Na Moku,
however, did not assert a claim for relief in the circuit court
to enforce either section 5(f) or the HHCA.

Section $(f) of the Admission Act provides:

The lands granted to the State of Hawsii by subsection
(e) of this section and public lands retained by the United

 
 

together with the proceeds
tion of eny”such lands and the

income therefrom, shal be held by said State asa cublic
Tost 1i)) tor the sustort of the gublie schools and-cther
fubLic educational institutions, (i211 for the betterment of

+ «2 v.s.c. § 1983 (2996), entitied “Civil action for deprivation of

rights” provides, in relevant part:

 

Every person who, under color of any statute,
ordinance, regulation, ‘custom, or usage, of any State or
Territory of the District of Columbis, subjects, or causes
fe be subjected, any citizen of the United States or other
person within she jurisdiction thereof co the deprivation of
any Fights, privileges, or immunities secured by the
Constitution and 1sws, shall be liable to the party injured
Sean action at law, suit in equity, or ether proper
proceeding for redress

 

 

 

 

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vs Hamaiians, as defined in the

basis a2 -poasiolel for the making of public

dnprsuanents. and (CVT for the provision of lands for
EubLicuse, “Such lands, proceeds, and incone shall be
Banaged. and disposed of

Eurpgses in such manner as the constitution ond laws of sad
Este nay provide, and their use for any other object shall)
constitute a breach of trust for which sult may be brought
by the United States.

(Emphases added.). In sum, section 5(£) prohibits the State from
using the land or proceeds and income from the lease of water
rights to such land for a purpose other than those five
enunerated above.

certainly, as the circuit court found, the BLNR
breached its duty to analyze “tradition[al) and customary native
Hawaiian practices and appurtenant rights and the public trust
obligations emanating from the Hawai'i Constitution and case
decisions construing it.

 

However, nothing in Na Moku’s appeal
to the circuit court could be construed as alleging that any of
the Appellees used the land or proceeds and income therefrom for
@ purpose other than the five enumerated above, thereby breaching
the trust obligation under the Admission Act; nor could anything
in the circuit court's opinion be construed as finding any such
breach, Therefore, Na Moku did not assert a claim to enforce
section 5(f) of the Admission Act in the circuit court.

Na Moku also contends that it asserted a claim based on

the HHCR. ‘The only section of the HHCA that Na Moku has ever

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asserted that the BLNR breached is section 213(i). This section
provides, in relevant part:

(4) Native Hawaiian rehabilitation fund. Pursuant to
Article KIT, Section 1, of the State Constitution, thirty
Per cent of the state receipts, derived from lands
Previously cultivated as sugarcane lands under any cther
Provision of law and fron water Licenses, shall be deposited
{nea this fund. The department shall use this money solely
for the Fehabsiteation of native ts

Snelude, But not be linited to,
political, social, and cultural pre
General welfare and conditsone of native Hawaiians are
thereby improved and perpetuates.

 

 

      
 

Na Moku fails to explain how the BLNR could have
violated this section, inasmuch as Na Moku conceded in its
opening brief to the circuit court that one of the “issues that
remain for disposition in this contested case include .

whether the members of the BLNR violate their fiduciary duties
pursuant to the public trust doctrine, Section 5(f) of the
Hawas‘i Admission Act (and) Section 213(i) of the (HHCA.]”
Because these isaues “remain{ed) for disposition” by the BLNR,
they were not before the circuit court and the circuit court
could therefore not decide such issues in favor of Na Moku.
Assuming, arauendo, that such issues were before the circuit
court, Na Moku fails to point to any finding of the circuit court
that could support its contention that any of the Appellees

breached the HHCA such that Na Moku is the “prevailing” party.

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Accordingly, Na Moku has not asserted, nor prevailed
on, @ section 1983 claim such that it and NHLC are entitled to
seek an award of attorneys’ fees pursuant to section 1988.

2. Na Moku is Not Entitled to Attorneys’ Fees, Costs,

and Expenses Under the Private Attorney General
Doctrine.

 

Na Moku next asserts that the circuit court abused its
discretion in determining that they are not entitled to
reasonable attorneys’ fees and costs pursuant to the private
attorney general doctrine, We disagree.

We first considered the private attorney general
doctrine in In re Water Use Permit Applications, 96 Hawai'i 27,
25 P.3d 802 (2001) [hereinafter, Waiahole II). Waiahole Ii arose
from a contested hearing related to the Waiahole Ditch System in
which the CWRM considered petitions to amend interim instream
flow standards, water use permit applications for various leeward
offstream purposes, and water reservation petitions for both
instream and offstream uses. In e Permit
Applications, 94 Hawai'i 97, 110, 9 P.3d 409, 422 (2000)
(hereinafter, Waiahole I). ‘The CWRM entered an order
apportioning water for various agricultural, leeward offstream,

and nonagricultural uses, established a non-permitted ground

+ secause we hold that Na Moku is not entitled to seek fees under
section 1996 for the foregoing reasons, we Need not address Appellees”
additional argunents that they are not persons acting under color of state law
for purposes of section 1983.

 

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water buffer, and denied various water use permits. Id, at 116-
17, 9 P.3d at 428-29. We affirmed in part and reversed in part,
id. at 189-90, 9 P.3d at 501-02, and soon thereafter, some of the
parties, referred to as the Windward Parties, filed motions for
attorneys’ fees under the private attorney general doctrine.
Haiahole II, 96 Hawai'i at 28, 25 P.3d at 803.

We stated, in Waiahole I, that the private attorney
general doctrine

Ae an equitable rule that allows courts in their discretion

to amard attorneys’ fees to plaintiffs who have vindicated

Important public rights. Courts applying this doctrine

Consider three basic factors: {1} the serength of societal

policy vindicated by the

Tfeigation, (2) the necessity for private enforcement and

the magnitude of the resultant burden on the pisintett, (3)
the number of people standing to benefit from the decision

 

 

 

Id. at 29, 25 P.3d at 804 (citations and quotation marks
omitted). We held that the doctrine did not apply under the
facts of that case, but did not foreclose application of the
doctrine in a future case. Id. at 32, 25 P.3d at 807. Although
Na Moku asserts that this is such a case, we disagree.

In Waiahole II, we stated that although the first and
third prongs of the test were satisfied, the second prong, “the
necessity for private enforcement and the magnitude of the
resultant burden on the plaintiff," was “less convincing,”
thereby preventing the doctrine from being applicable. Id. at
31, 25 P.3d at 806. We explained:

an other cages, the plaintiffs served as the sole
feprasentative of the vindicated public interest.

 

 

the

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government either abandoned, or actively opposed, the
Plaintiff's couse.” Here, the Windward Parties represented
one of mony competing public and private interests in an
adversarial proceeding before the governmental Body
Gesignated by constitution and atacute as the primary
representative of the people with respect to water
resources, the Comission on Water Resources Management. .
Th sum, unlike other cases, in which the plaintifes
single-handedly challenged a previously established
Government law of policy, in this case, the Windward Parties
Challenged the decision of a tribunal in an adversarial
proceeding fot contesting any action oF policy of the
he Windward Parties cite no case in which
rial proceeding
against s tribunal ang the losing parties and in favor of
the prevailing party, based on the reversal of the
tribunal's decision on appeal. Nor does such a rule appear
rodent from a policy standpoint, where public tribunals in
reariol settings mast invariably consider and weigh
various “public interests.”

 

 

 

     

 

  

Id. at 31-32, 25 P.3d at 806-07 (internal citations omitted) .

The instant case is distinguishable fron Waiahole II in
one aspect inasmuch as, in Waiahole Il, the CWRM apportioned
water rights between various public and private interests, and
the Windward Parties were contesting the apportionment and not
any policy of the government. In the present case, on the other
hand, Na Moku was not contesting apportionment, but was
contesting a policy of the BLNR to lease water rights without
performing the required analysis. As such, that point of the
Waiahole II analysis is in favor of Na Moku. The other points,
however, are not.

First, we agree with the State that it did not
“abandon” or “actively oppose” Na Moku’s cause. Rather, the BLNR
recognized the State’s “duty to protect the reasonable exercise

of customarily and traditionally exercised rights of Hawaiians to

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the extent feasible pursuant to Article XII, Section 7 of the
Hawaii Constitution(,]” but stated that the CWRM, rather than
itself, was the appropriate agency to fulfill the State's duty.
The BLNR recognized that “the proposed disposition of water by
the BLNR is made subject to the instream flow standards
established by the CWRM[.]” Thus, the State was not abandoning
its duty; rather, the SINR was under the impression, although
erroneous, that the duty was to be carried out by another agency.

Additionally, the instant case, as in Haiahole 1,
involves an appeal from the decision of @ tribunal in an
adversarial proceeding, and the circuit court “made no rulings
regarding the ultimate disposition of water resources, but simply
remanded the matter . . . for further findings and conclusions.”
Waiahole II, 96 Hawai"i at 32, 25 P.3d at 807. Like the Windward
Parties, Na Moku cites no cases in which fees were awarded
against a tribunal and the losing parties based on the reversal
of the tribunal’s decision on appeal.

Thus, the circuit court did not clearly exceed the
bounds of reason or disregard rules or principles of law or
practice to the substantial detriment of a party litigant in
refusing to grant Na Moku and NHLC's motion for attorneys’ fees,

costs, and expenses.

 

+ Because we hold that the circuit court did not abuse its discretion
in refusing to averd fees, We need not address Na Moku's second point on
(eont inued...)

 

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‘The Circuit Court Did Not Abuse Its Discretion by Refusing
to Sanction Na Moku and NHLC’s Counsel.

AGB/ENI contend that the circuit court abused its
discretion when it denied AsB/ENT's Rule 11 motion because Na
Moku and NHLC's fee motion argued frivolously that (1) Na Noku
was a prevailing party on a federal claim; (2) Na Moku may

recover fees from private parties such as AGB/EMI under 42 U.S.C.

 

§ 1988; (3) Na Moku may recover fees under the private attorney

general doctrine; and (4) the fee motion was frivolous in seeking

recovery of an excessive amount of fees and costs.’ For the

reasons set forth below, we hold that the circuit court did not

abuse its discretion in refusing to impose Rule 11 sanctions.
HRCP Rule 11 provides in relevant part:

(b) Representations to Court. By presenting to the
court @ pleading, written motion, or other paper, an

jorney .. is certifying that to the best of the
ferson's ingwiedge, information, and beliet, formed after an
[nquiry reasonable under the circumstance

 

 

(1) 4 4s not being presented for any improper
porpose, such a2 to harags cr to cause unnecessary delay or
Feedless increase in the cost of litigation:

(2) the clains, defenses, and other legel contentions
therein ere warranted by existing law or by a nonfrivolous
argument for the extension, modification, or reversal of
Sxisting law of the establishsent of new law:

 

 

“{.--continued)
appeal regarding the “other considerations that cutweigh the circuit court's
Concern for the chilling effect an avard in this case would have on other HRS
$ 51-14 appeais, Nor do we address Appellees’ argunents that the fees
Fequeated were “grossly excessive.”

 

 

> AsB/EMT olternatively argue that if Na Moki asserted a claim onder

section 1983, the claim was meritiess, and thus, the circuit court abused its
Giacretion when st denied AGB/EMI’s metion for fees under section 1986.
Because we hold that Na Moku has not easerted a section 1963 claim, it ts
Unnecessery to address this assertion

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(©) Sanctions. If, after notice and # reasonable
opportunity to respond, the court determines that
Subdivision (b) has been violated, the court may, subject to
the conditions stated below, impose an appropriate sanction
tupon the attorneys, law firms, of parties that have violated
Subdivision (b) a are responsible for the violation.

 

Although, as set forth in Section TII.A., supra, Na
Moku and NHLC are not entitled to attorneys’ fees under section
1986 or the private attorney general doctrine, we hold that the
circuit court did not abuse its discretion in refusing to
sanction them for filing those motions. Na Moku and NHLC’s
argument for an award of fees under the private attorney general
doctrine, although ultimately unsuccessful, was not frivolous
given the Waiahole II Court’s indication that this court could
apply the doctrine in a future case. Additionally, although
their argument for fees under section 1988 was tenuous, circuit
courts are afforded a substantial degree of deference in awarding
Rule 11 sanctions, and there is nothing in the record to indicate
that the circuit court’s refusal to impose sanctions in the
instant case clearly exceeded the bounds of reason or evidenced a
disregard for rules or principles of law or practice to the
parties’ substantial detriment. See In xe Tax Appeal of Hawaiian
Elour Milla, 76 Hawai'i 1, 15, 868 P.2d 419, 433 (1994)

(“Deployed on the front lines of litigation, the trial court ‘is
best acquainted with the local bar’s Litigation practices and

thus best situated to determine when a sanction is warranted to

25
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serve Rule 11's goal of specific and general deterrence.’”

(Citation omitted.)).*

IV. CONCLUSION
Based on the foregoing, we affirm the circuit court’s:
(1) January 16, 2004 order denying Na Moku and NHLC’s motion for
attorneys’ fees, costs and expenses; (2) May 14, 2004 order
denying A6B/EMI"s motion for Rule 11 sanctions; and (3) May 14,

2004 order denying AsB/EMI’s motion for attorneys’ fees.

on the brief!

Man T. Murakami Grr

and Moses Kes Hala 22

(of Native Havaiian .

Legal Corporation) for Bir Be rinna—
Appeltants-Appeliants/

Appellees Beatrice Kekahuna, Pees Lint one

Marjorie Wallett, and Na Noku
‘Aupuni O Ko'olau’ Hui

Linda L.W. Chow, /? S
Deputy Attorney’ General,

for Appellees Appellees Gone. dud
State of Hawai'i, Board sb
of Land and Natural

Resources, Department of

Land and Natural Resources

and Peter T. Young

 

+ Because wo hold that the cirostt court did not abuse ite discretion

in refusing to impose sanctions, it is unnecessary to address Na Moku’s
ateertion that Ach/Emi"e fule 11 claims are flawed in that AgB/EMI failed to
Rane, as party to this sppesl, the sttorney of the law firm of Paul,
Sohnton, Fark & Niles who signed Na Moku and MHLC’s motion for fees.

 

   

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David Schulmeister
and Elijah Yip

(of Cades Schutte LLP)
for Appel lees~Appellees/
Appellants Alexander &
Baldwin, Inc. and

East Maui Irrigation
Company, Limited

Richard Kiefer
and David B. Merchant

(of Kiefer & Merchant LLC)
for Appellee-Appellee
Maui Land & Pineapple Co.,
Inc

Robert H, Thomas
(of Damon Key Leong
Kupchak Hastert) for
Appellee-Appellee Hawaii
Farm Bureau Federation

Isaac Hall
for Appellant-Appellee
Maui Tomorrow

(no brief filed)

vane E. Lovell
Deputy Corporation Counsel
for Appellee-Appellee
County of Maui

(no brief filed)

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