Case Title: Ka Waihona O Ka Naauao v. State of Hawaii, Board of Education

Citation: 

Docket Number: 

State: hawaii

Court: Hawaii Supreme Court

Date: 2007-12-13T00:00:00Z

Document:
=

{#4* NOT_FOR PUBLICATION IN WEST'S HAWAM REPORTS AND PACIFIC REPORTER *
No. 26666 2
gS 2
TW THE SUPREME COURT OF THE STATE OF HAWAT'T)? = mj
Dixie

a
KA WAIHONA 0 KA NR'AUAO, Ho'opio DeCanbra, Poka Laenui, Jeanatte
d of directors

Ka'uluwehi, Kenneth Ka'uluwehi, Stella’ Pihana-Young,
adello, Mona Bernardino, Ku'tlei Weathington, and Leimana
rs

 

 

individually and as members of the

 

Kahikina,
of Ka Waihona 0 Ka Na‘auao, Cherienne Akau, and Kim Ha'upu
individually and as menbers-elect to the board of directors of Ka
Waihona 0 Ka Na‘auao, Mauna‘ala Burgess, Carl ‘Imiola Young, Jody
Pihana, Puanani Burgess, Judy Opunui, Will Joseph Weathington,
‘and Cameron-Joseph Auhoon, Plaintiffs-Appellants,
STATE OF HAWAII BOARD OF EDUCATION, through its Chairman Herbert
Watanabe, STATE OF HAWAII DEPARTMENT OF EDUCATION, through its
Superintendent of Education, Patricia Hamamoto, Alvin Parker,
Glenn Philhower, Chrissy Pilila'au, Fran Villareal, Wayne
Hirakawa, Opu Seminavage, Zana Hughes, and Bill Sutkus,
Defendants-Appellees.
(CIV. NO, 03-1-0800)
Hotopio
Ku'uled

KA WATHONA © KA NA'AUAO, a 21% Century Charter School
Poka Laenui, Jeannette Ka'uluvehi, Kenneth Ka‘uluwehi,
Dixie Padello, Mona Bernardino,

 

 

DeCanbra,
Stella Pihana-Young,

Weathington, and Leimana Kahikina, individually and as members of
the local school board of Ka Waihona 0 Ka Na‘auao, a 21" Century
Charter School; Cherienne Akau, and Kim Ha‘upu, individually and

as menbers-elect to the local school board of Ka Waihona 0 Ka
Mauna'ala Burgess, Carl

Na‘auao, a 21% Century Charter Schoo:

“Imicla Young, Jody Pihana, Puanani Burgess, Judy Opunui, Will
Joseph Weathington, and Cameron-Joseph Auhoon,

Plaintiffs-Appellants,
ALVIN PARKER, GLENN PHILHOWER, CHRISTINA PILILR'AU, FRANCES
VILLAREAL, WAYNE HIRAKAWA, EUGENE SEMINAVAGE, ZANA HUGHES, and
BILL SUTKUS, Defendants-Appellees,
and
DOE CORPORATIONS 1-50; and

JOHN DOES 1-50; DOE PARTNERSHIPS 1-50;
DOE ENTITIES 1-50, Defendants.
(crv. No. 0341-1137)

 
   

HAWAII REPORTS AND PACIFIC REPORTER

APPEAL FROM THE FIRST CIRCUIT COURT
(CIV. NOS. 3-1-0800 and 03-1-1137)

SUMMARY DI:
(By: Moon, C.J., Levinson, Nakayama, Acoba, and Duffy, JJ.)

Plaintiffs-Appellants Ka Waihona © Ka Na'auao (“Ka
Waihona Corp."), Poka Laenui (“Laenui”), Ho'opio DeCambra
("Decambra”), Jeanette Ka'uluwehi, Kenneth Ka'uluwehi, Stella

 

Pihana-Young, Dixie Padello, Mona Bernardino, Ku'vlei
Weathington, and Leimana Kahikina, individually and as members of
the board of directors of Ka Waihona Corp., Cherienne Akau, and
Kim Ha'upu individually and as members-elect to the board of
directors of Ka Waihona 0 Ka Na‘auao, Mauna‘ala Burgess, Carl
‘Imiola Young, Jody Pihana, Puanani Burgess, Judy Opunus, William
Joseph Weathington, and Cameron-Joseph Auhoon; and Plaintiffs-
Appellants Ka Waihona 0 Ka Ne‘avac, A 2ist Century Charter School
("21st Century Charter School”); DeCambra, Laenui, Jeanette
Ka'uluwehi, Kenneth Ka'uluvehi, Stella Pihana-Young, Dixie
Padello, Mona Bernardino, Ku'ulei Weathington, and Leimana
Kehikina, individually and as menbers of the board of directors
of 2ist Century Charter School; Cherienne Akau, and Kim Ha‘upu
individually and as menbers-elect to the board of directors of

 

2ist Century Charter School, Mauna‘ala Burgess, Carl ‘Imicla
Young, Jody Pihana, Puanani Burgess, Judy Opunui, William Joseph
Weathington, and Caneron-Joseph Auhoon, appeal from the first
circuit court’s' June 10, 2004 judgment in favor of all the
defendants, State of Hawai'i Board of Education (“BOE”), through
its Chairman Herbert Watanabe, State of Hawai'i Department of
Education ("DOE"), through its Superintendent of Education,

Patricia Hamamoto, Alvin Parker ("Parker”), Glenn Philhower,

* the Honorable Sabrina S. McKenna presided.

2
 

‘NOT FOR PUBLICATION IN WEST'S HAWAII REPORTS AND PACIFIC REPORTER ***

chrissy Pilile’au, Frances Villareal, Wayne Hirakawa, Opu
Seminavage, Zana Hughes, and Bill sutkus, and against all the
plaintiffs on all claims in Civil Nos. 03-1-0800 and 03-21-1137.

‘two cases, which have been consolidated, arose after
the BOE allegedly interfered with 21st Century Charter School by
directing an election (*DOE-run election”) for its Local School
Board. In the first case, Ka Waihona Corp. et al., which
contracted with the BOE to establish 2 charter school, sued the
befendants-Appellees for breach of contract, fraud, and
collusion. In the second case, 2ist Century Charter School et
al. sought a cease and desist order against the individuals
elected in the DOE-run election to prevent them from sitting on
2ist Century Charter School’s Local School Board.

on appeal, Plaintiffs-Appellants argue that the circuit
court erred by concluding that: (1) the charter was issued to a
local school board and not to a non-profit corporation, even
though Ka Waihona Corp., a non-profit corporation, submitted the
Detailed Implementation Plan (“Contract”), and thereby received
the charter and therefore has standing to bring its breach of
contract claim against the BOE; (2) Ka Waihona Corp. did not
comply with the Contract to run the charter school and was not
“organizationally viable,” despite its subsidiary, 21st Century
charter School, establishing an eleven-member Local School Board:
(3) “(Hawai'i Revised Statutes) [$] [302A-]1186(b)? did not

HRS § 302A-1186(b) (Supp. 2002) provides in pertinent part that,
the BOE must:

 

 

initiate an independent evaluation of each nev (charter_gcveet]
ann to assure organizational viability and compliance
Sith appuicabie state Tavs, statewise stodent convent and
perfornence standards, and’ fiscal accountability: « Upon a
Setermination by the bord that student achievenent within &
[charter school] does not meet the student performance standards
(continued.

 

 

   
 

NOT FOR PUBLICATION IN WEST'S HAWAII REPORTS AND PACIFIC REPORTER

prohibit the [08] from doing something less than revoking the
charter,” although this level of authority contradicts the
purpose of autonomous charter schools; (4) the BOE-directed
election for 21st Century Charter School's Local School Board was
consistent with state law governing charter schools, inasmuch as
it breached the Contract and thereby violated state statutes
governing charter schools; (5) the individuals elected in the
Dog-run election are menbers of the 2ist Century Charter School’ s
Local School Board, although the election was illegals and (6)
2ist Century Charter School did not contract with Parker although
the Chairman of 21st Century Charter School's Board of Directors
signed the contract.

upon carefully reviewing the record and the briefs
submitted by the parties and having given due consideration to
the argunents advanced and the issues raised, we hold that:

(1) The charter school’s charter was issued to the
local school board of Ka Waihona 0 Ka Na'auao, inasmuch as the
charter states that the BOE granted “the duly organized local
school board of Ka Waihona 0 Ka Na'auao” responsibility “to
operate as a public charter school”;

(2) Nevertheless, Ka Waihona Corp., a non-profit

 

-continuea)
‘Of that the (charter school) 1s not f1scally responesbl
charter senoel] shell be placed on probatinary status and shall
have one year to bring student performance into compliance mith
statewide standards and improve the school's fiscal
accountability. Tf a [charter schocl] fails to neet ite

 

 

probationary Pequirenents, or £ wieb ans
reouirenents of this section, the board, upon a two-thirds
ajority vote,
zehool]”

(Exphases added.)

 

in 2006, HRS Chapter 302A, part IV, subpart D (HRS $$ 302A-1181 to -
1192) was repealed by 2006 Haw. Sess. L. Act 298, § 3,” The legsalature
simultaneously enacted HRS Chapter 3028 (HRS $§ 3028-i to “16), which 1
entitled "Publis Charter Schools:

 
 

++ NOT FOR PUBLICATION IN WEST'S HAWAII REPORTS AND PACIFIC REPORTER:
corporation, which contracted with the BOE to establish 21st
Century Charter School, has suffered an injury in fact from the
DOE-run election inasmuch as it violated the Contract, and
therefore, it has standing? to assert a breach of contract claim
against the BOE;

(3) 2ist Century Charter School breached the Contract
and was “not organizationally viable” as defined by Hawai'i
Revised Statutes (“HRS”) § 302A-1186(b),* inasmuch as it did not
establish a fifteen-member Local School Board in accordance with
its charter:

(4) HRS § 302A-1186(b) did not prohibit the BOE from
doing something less than revoking the charter:

(5) The BOE was statutorily authorized to direct the
DOE-run election under HRS § 302A-1186(b), inasmuch as it was
“reasonably necessary”* in order for the BOE to ensure that 2ist

+ the United States Supreme Court has stated that in order to

establish standing, “the plaintiff must have suffered an ‘injury in fact'-an
‘hich se (a) concrete. and

Particularized, and (b) ‘actos! or imminent.” Luten v, Defender

Hilalife, 040.8, 555, 560-61 (1992)) (citations omitted) (amphi

 

‘added «
RS § 302K-1186(b) provides in pertinent part:

For the purposes of this subsection, torsanizational viability’
‘eeana that a now century charter achcoli

(1) Has been duly constituted in accordance with its charter;
(2)

ang its charter:
(3) Buploys sufficient faculty and staff to provide the
necessary educationel program and support services and to operate
the facility in accordance with its charter? and

(4) “Maintaine comprehensive records regarding students,
Employees, end complies with federal and state health and safety
Fequirenents.

(Emphases added.)

 

legislature granted the £08 the authority to discontinue
charter schools and act as "reasonably necessary” to assure that the charter
‘School vas organizationally viable. See Hacle v. State, 111 Hawai'i 144, 152,
140.34 377, 365 (2006) (van administrative agency's authority includes those
Inplica powers that are reasonsbly necessary to carry out the pouers expressly,
(continued...)

 
 

+ NOT _FOR PUBLICATION IN WI

 

"'$ HAWAII REPORTS AND PACIFIC REPORTER

 

Century Charter School was “organizationally viable” and
established according to its charters®

(6) Inasmuch as the DOE-run election was “reasonably
necessary” to assure that the Local School Board was established
with fifteen members, the individuals elected in the DOE-run
election are members of the Local School Board; and

(7) 21st Century Charter School was not a party to the
$40,000 contract between Parker and the Local School Board,’ and
therefore does not have standing to claim that Parker breached
the contract. Therefore,

IT IS HEREBY ORDERED that the circuit court's June 10,
2004 final judgment is affirmed.

DATED: Honolulu, Hawai'i, December 13, 2007.

on the beiefe: om

foka Laenui, (Hayden Surgess) :

Holly T. Shikada and Rewe? Deeg.
Selle k. hiss

Deputy Attorneys General
for Defendant s-Appellees Gene Dede

 

24s continued)
granted. "The reason for inplied powers 1s that, as @ practical matter, the
Tegisiature cannot foresee sll the problems incidental to cartying out the
duties and responsibilities of the sgency.")

 

«Although Hawaii's charter schools are uniquely autonomous, the

legisisture intended to require each charter school te se organizarionaily,
viable or risk losing its charter “to engure [charter schools’) ongoing
‘iability.” ‘Sen, Conf. Comm. Rep. No. 136, in 2002 Senate Journal, at 1010-
in

>The Second Local Schoo! Board does not have standing to sue Parker
for breach of the Parker-centract because it evolved into the Pest-election
Local School Board which presently sets se the functioning and permanent Local
School Board, Rather, the presently functioning Local School Beard, the Post™
election Local School ‘Board, hes standing to bring suit against Parker for
breaching the Parker-contract.