Case Title: Whiteys Boat Cruises, Inc. v. Napali-Kauai Boat Charters, Inc. S.Ct. Order of Correction, filed 04/25/2006 [pdf].

Citation: 110 Haw. 302

Docket Number: 

State: hawaii

Court: Hawaii Supreme Court

Date: 2006-04-18T00:00:00Z

Document:
*** FOR PUBLICATION ***

 

IN THE SUPREME COURT OF THE STATE OF HAWAT'T

---000--~

 

WHITEY’S BOAT CRUISES, INC.; ROBERT F. BUTLER, JR.,
dba CAPTAIN SUNDOWN ENTERPRISES; and RALPH YOUNG,
DBA HANALEI SPORT FISHING & TOURS, Plaintiffs-Appellants,

NAPALI-KAUAI BOAT CHARTERS, INC., dba HANALEI SEA TOURS;
JOE PASKAL; CLANCY GREEP, dba CAPT. ZODIAC RAFT EXPEDITIONS-

NAPALI ZODIAC; CATAMARAN KAHANU, a Hawaii Limited
Partnership; WILLIAM T. K. SWAIN; BYRON FEARS, DAVE
LAMEDIN; JUSDOIT, INC.; RESORT MARKETING INTERNATIONAL -
HAWAII, INC., aka EMBASSY VACATION RESOR’

G. F. HUTTON’ PROPERTIES, dba CLIFFS RESORT ACTIVITIES;
CAP MANAGEMENT CORP., dba THE CLIFFS CLUBS ACTIVITIES;
HAWAII CALLS ACTIVITIES, INC., CHARLES CLIPNER;
SWAIN LIMITED PARTNERSHIP, dba HAWAIIAN STYLE TOURS AND

ACTIVITIES; HYATT CORPORATION; KVRA ACTIVITIES,

KAUAI SANDS, INC. SHELL DEVELOPMENT CORP. -LAWAI, ‘da LAWAL
BEACH RESORT; AOAO OF LAWAI BEACH RESORT; PAHIO VACATION
OWNERSHIP, INC.; DAVID 8. WALTER; PLEASANT TRAVEL SERVICE,
INC., dba PLEASANT HAWAIIAN HOLIDAYS; H&S PUBLISHING,

a Hawaii Partnership, dba KAUAI MAGAZINE; DREW R. HOUGHTON;
HAWATIAN WORLD NAPALI, INC.; MARRIOTT HOTEL SERVICES, INC. ;

HANALEI LAND COMPANY, LTD.; MICHAEL GUARD SHEEHAN, JR. ;
PARADISE ADVENTURE CRUISES, INC.; MTI VACATIONS, ‘INC. ;
NAPALI COAST TOURS, INC.; R.A.T., INC.; NA PALT OCEAN
VENTURES, INC.; RAMBLIN’ ROSE CHARTERS, INC.; ANCIENT MARINER,
INC.; AMERICAN EXPRESS TRAVEL RELATED SERVICES COMPANY, INC.
MICHAEL GUARD SHEEHAN, SR.,; PATRICIA WILCOX SHEEHAN,
HANALEI RIVER ENTERPRISES, INC.; PATRICIA WILCOX SHEEHAN TRUST;
‘AND JOHN DORS 19-100," Uefendants-Appellees.

 

 

INC. ;

 

  

 

  

wo. 26334 Bo:
a ot
APPEAL FROM THE PIPTH CIRCUIT COURT > ©
(crv. NO, 97-0139) z
2
APRIL 18, 2006 -

 

MOON, C.J., LEVINSON, NAKAYAMA, ACOBA, AND DUFFY, JJ.

 
eee

opINTON OF THE COURT BY MOON, C-9
the instant case involves an OnOSSS dispute among
commercial tour boat operators and FONE poat promoters in the

area of Hanalei and the neighboring Ne pali coast of the island

 

wawai't, Plaintiffe-apperlante Waitey’® Boat Cruises,

 

of Kawa’

gpa captain Sundown Enterprises, snd

 

ine., Robert F. sutlery

 

gaiph Young dba Hanaled Sport Fishing & Tours hereinafter,

collectively, Appellants] are commercial tour boat operators whe

tiled a complaint against « nunber of other tour boat operators

cing claims of, inkex alia, coamon 15H unfair

 

and promoters, assel

competition, tortious interference with prospective business

advantage, and unjust enrichment asentially, Appellants claim

that certain tour boat operator® conducted tours in the area of

wanaiei and along the Na Pali coast without the requisite county

tn violation of county and state rules and

 

and state perm:

 

regulations, to the financiat detriment of Appellants

appellants appeal from the CAFUSE court of the Fifth
circuit's December 17, 2003 judgnent! entered pursuant to orders

ranting sumary judgment in favor of, inter alia, defendants-

 

appellees (1) Napali Kauai Boat charters, Inc., Napali Coast

ours, Inc., RA.T., Tne-, Napals Cee ventures, Inc., Ramblin’

_
Tue uonorable George X. Hasuoka presided over SNS underlying

proceeding?

 
Rose Charters, Inc., Ancient Mariner, Inc., and Joe Paskal?

thereinafter, collectively, Napali Appellees] and (2) Michi

 

Sheehan, Sr. (Sheehan, Sr.) and Hanalei River Enterprii

 

 

thereinafter, collectively, Sheehan Appellees] .’ On appeal,
Appellants claim that the circuit court erred in granting summary

judgment in favor of Napali Appellees and Sheehan Appellee!

 

specifically, Appellants contend that the circuit court erred in
dismissing their claims of common law unfair competition,
tortious interference with prospective business advantage, and
unjust enrichment.

Por the reasons discussed more fully infra, we hold
that Appellants are precluded from asserting @ private right of
action for damages pursuant to the county and state regulations
at issue in the instant case. Accordingly, we affirm the circuit
court's December 17, 2003 judgment.

1. BACKGROUND
A. Eactual Background
on November 29, 1975, the County of Kaua'i (the County)

   

approved a special management ar-2 (SMA) in Hanalei, located on
the north shore of Kaua'i, to protect a substantial portion of

the Hanalei River, the river mouth, and surrounding lands. The

 

> at all tines relevant to the instant case, Paskal was the owner,
president, and operator of Wapsli-rauai Boat Charters, Tnc. and ite
Prseigiaries, ive, Nepali Coset Tours, Inc-, RA.T., Inc., Napali Ocean
Guntures, ing. Rawblin’ Rose Charters, Tnc., and Ancient Mariner
foregoing companies were all businesses conducting tour Boat ope

 

 

      

 

> ag discussed more fully infra, Sheehan Appellees ope
in Hanale! thet allegedly served as a base of operations for tour boat
Sferatora to conduct toure without the requisite permits. Appellants
characterize Sheehan Appellees ae “promoters.”

   

 
County then issued SMA Minor Permit SMA (M)-87-27 to the state of
Hawai'i (State) Department of Transportation (DOT). SNA Minor
Permit SMA (M)-87-27 (the DOT Permit) was in effect from 1976

through 1988. The DOT Permit authorized the DOT to issue permite

 

to commercial tour boat operators to conduct their tour
activities within the Hanalei SMA during the effective life of
the Dor Permit.

The DOT Permit expired on September 30, 1988, and the
county apparently did not extend or renew the DOT Permit.
Instead, the County decided to establish a permitting process to
directly regulate commercial tour boat operations in the Hanalei
SMA. During the time that the County was formulating and

drafting its permitting procedures (i.e., between 1986 and 1993),

 

tour boat operators were not allowed to conduct their tour
activities in the Hanalei SMA. Tour boat operators were also not
allowed to conduct their tours in the Hanalei SYA during the
pendency of their permit applications with the county.

In 1988, the County sought injunctive relief against
Napali Appellees and other tour boat operators for allegedly
failing to comply with the County’s prohibition against
conducting commercial tours. The circuit court issued a

preliminary injunction on April 5, 1988. According to Napali

 

Appellees, no permanent injunction has ever been issued, and the
County’s action is still pending.
In 1992, the County enacted section 19 of the County's

SMA Rules and Regulations, also known

 

the Hanalei Estuary

 
Management Plan (HEMP), setting forth the procedures to be

 

followed in proce

 

ing SMA permit applications for commercial
boating within the Hanalei Estuary.‘ Pursuant to HEMP, the
county issued a limited number of permite (SMA permite) to
Appellants and other tour boat operators in 1993.°

In addition to HEMP, the commercial tour boat industry
on the north shore of Kaua'i is also regulated by Hawai’
Administrative Rules (HAR) chapter 256, entitled ‘Ocean

Recreation Management Rules and Areas” (ORMRA). The specific

 

purpose of ORMRA “is to reduce conflicts anong ocean water ua
especially in areas of high activity.” HAR § 13-256-1(a).
commercial tour boat operators conducting tours off the
adjoining Na Pali coast were required to have state comercial
boating licenses (state permits) issued by the State Department
of Land and Natural Resources (DLNR). The conmercial tour boat
operators, therefore, were required to have SMA permits and state
permits in order to conduct tours in the Hanalei SMA and along
the Na Pali coast, According to Appellants, the SMA permits set
forth limitations on the number of tours (generally, no more than
two trips per day), the number of passengers (generally, no more

than fifteen persons per trip), the days of operation (daily,

+ section 19.2 of HEMP defines “Hanalei Estuary” as “those lands and

katers thet constitute the Hanalei River and any lands within two hundred
250) eect of ste banke that fall within the County of Kaua'i (S¥A)."

 

 

+ tm addition to Appellants, Hanalei Sailing School, Bluewater sailing,
Kauai/a Pal! outfitters, and Luana of Hawai'i were algo granted SMA permits
TSaodi ee operate in the Hanalei SA. ‘These companies are not parties to the

 

 
except Sundays and county holidays), and the hours of operation
(generally, departures no earlier than 7:00 a.m. and arrivals no
later than 7:30 p.m.).

As previously stated, Appellants have the requisite SMA

 

permits and, thus, are legally entitled to operate tour boats in
the Hanalei SMA, Appellants claim chat Napali Appellees and
other tour boat operators, however, conducted tours in the
Hanalei SMA and along the Na Pali coast without the required SMa
permit and the state permit. Specifically, Appellants allege
that, when the County prohibited tour boat operators from
conducting tour activities in the Hanalei SMA between 1988 and
1993, certain tour boat operators, as later named in Appellants’
first amended complaint, continued to do #0. Consequently,
Appellants claim that these tour boat operators “gained
substantial income and name recognition in the business,

; + escapiish[ed) and capitalize {d] on economies of scale in
Light of the lack of competition, and made lasting business
relations with the various companies engaged in tour boat
promctions[.]* Once Appellants received their SMA permits in
1993, they allege that they “substantially complied” with the
Limitations in the SMA permits. Appellants maintain that,
inasmuch as other tour boat operators continued to engage in
tours without the SMA permit, these tour boat operators were not
constrained by the limitations in the SA permit. Thus,
Appellants claim that “unpermitted" tour boat operators made

unlimited trips, carried unlimited passengers, and were

 

 
unrestricted with respect to the time of day or the days of
operation (i.e., disregarding the Sunday and holiday

prohibition). As euch, Appellants allege that these tour boat

 

operators “gained significant and unfair competition advanta
over [Appellants,] who were acting legally and pursuant to their
Hanalei SMA permite... .*

Moreover, Appellante claim that certain tour boat

promoters, as later named in their first amended complaint,

 

“provided material assistance” to these illegally operating tour
boat operators by promoting, advertising, and referring

activities on behalf of these operators. Furthermore, Appellants

 

allege that these tour boat promoters failed to promote their
legitimate tour boat activities on the same level as the
illegally operating tour boat operations.
B. Procedural History
i. The Original Complaint
on May 8, 1997, Appellants filed a complaint against
Napali-Kauai Boat Charters, Inc., Paskal, other tour boat

operators,‘ and numerous tour boat promoters.’ Therein,

 

* appellants’ complaint algo named the following tour boat operators as
defendants: (2) Clancy Greft dba Capt. Zodiac Raft Expeditions-Wapali Zodiac
(Gape. Zodiac); (2) Catamaran Kahana; (3) Milliam 7.x. Swain (ower and
operator of Catanaran Xahanu); (4) Byron Pears dba Paradise Adventure and
Cruises; and (5) Dave Lambdin dba curassic Teland Voyagers

 

  

 

 

° specifically, Appellante’ complaint named the following tour boat
provoters a2 defendants: (1) Byron Pears dba Byron Fears Activity Desk & Tour
Boats, (a) Activities Unlimited, Inc.) (3) Gervis K, Lovell (ower and

Operator of Activities Unlimited, Inc.); (4) Activity Pipeline, inc-7 (5)
Samie V. Montegna (co-owner and Co-operator of Activity Pipeline, tac.); (6)
Danny D. Perez (co-owner and co-operator of Activity Pipeline, rhc.); (7)

Suedoit, Tne. dba Activity Warehouse; (8) Resort Marketing International-
(eone ined...)
Appellants alleged the following clains against the tour boat
operators: (1) violation of HRS § 480-2 (1993)" (relating to
unfair methods of competition); (2) conmon law unfair
competition; and (3) unjust enrichrent/accounting. Appellants
alleged the following claims against the tour boat promoters:

(2) aiding and abetting (a) violation of HRS § 480-2 and

(b) common law unfair methods of competition; and (2) conspiracy.
Finally, Appellants requested injunctive relief against both sete
of defendants. Specifically, Appellants claimed that they were
“entitled to an injunction prohibiting all commercial boat tour
operations operating in and out of the Hanalei SMA without a
Hanalei SMA [plermit. In addition, Appellants alleged that they
were entitled to an order enjoining the tour boat promoters’
conduct of promoting the tour boat operators’ illegal activities.
Appellants also claimed that they were entitled to an order
enjoining the tour boat promoters’ refusal to promote their

legally operating tour boats.

(continued)
Hawai'i, “ic. aka Eubass

 

  

Vacation Resort; (8) G.F. Hutton Properties dba
Cliffe Resort Activities; (10) CAP Maniagenent Corp. dba The Cliffe Clube
Activities; (12) Hawai'l calls Activities, Ine.; (12) Charl

‘and operator of Hawai'i Calle Activities, tne.); (13) Hawas
Convention Bureau (HVCS); (14) Swain Limited Partnership dba Hawaii
‘Tours and Activities; (15) Hyatt Corporation dba Hyatt Hotels Hawai'i; (16)
KWRA, Ine. aka Kaual Vacation « Recreation Activities, Ince; (17) kauas Sande,
ine.} (16) Kikiaola Land Company, utd-; (19) shel] Developrent Corp. Laval dba
Lawal Beach Resort; (20) KORO of Lawai Beach Resort; (21) Pahio Vacation
Ownership, Inc-; (22) David B. Walter (owner and operator of Pahio Vacation
Ownership, Ine.); (23) Pleasant Travel Service, Tne, dba Pleasant Hawaiian
Holidays; and (24) M&S Publishing dba Kava! Magazine.

 

 

   
    

 

   

 

+ was § 480-2(a) states chat *[ulntair methods of competition and
unlawful or deceptive acte or practices in the conduct of any trade oF
Commerce are unlawtul.-

 

 
2. The Firet Amended Complaint
on March 30, 1998, Appellants filed an ox parte motion
to certify fourteen additional individuals and/or companies as
defendants.’ On November 20, 1998, Appellants moved to file a
first amended complaint, Therein, Appellants sought to amend the
complaint *to make technical changes, to modify the legal
theories asserted, to join clains and parties{,] and to add
certain factual allegations against [the dlefendants." One of
the technical changes proposed by Appellants was to delete the
parties that had been properly dismissed to date from the instant
action.! In addition, Appellants sought to add the following
parties as defendante: (1) Sheehan, Sr.; (2) Patricia Wilcox
Sheehan; (3) Patricia Wilcox Sheehan Trust; and (4) Hanalei River
Enterprises, Inc. [hereinafter, collectively, Sheehan, Sr.
defendants}. Appellants alleged that Sheehan, Sr. defendants,

Sheehan, Jr., and Hanalei Land Company, Ltd. (characterizing them

+ speciticatiy, these additional defendants were: (2) Drew R
Houghton; "G2} Hawaiian Worla Napali Tne.7 (3) Marriott Hotel Services, tne;
(Gy tesuth Seas Tours Corporation; (5) Hanalei Land Company, Ltd.; (6) wichsel
oo eeeeen eae. “UEheehans Je.)s, (7) Paradise Adventure Cruises, Inc.) (8) ¥2T
Gacations, Tne.; (3) Napali Coagt Toure, Inc.; (30) R.A.T., Tnc.; (11) Napali
OeSan Gentures, tness (3) Ramblin’ Rose Chatere, Inc.) (13) Ancient Mariner,
sect? Sha’ (is) american Express Travel Related Services Company, Inc.

   

 

 

 

‘the parties dismissed were: (1) Activities Pipeline, mne.; (2)
wontegnay (3) Peres; (4) Lovell; (S) HVCB; (6) Kikiaola Land Company, Ltd.
Mes Activities Unlimited, Inc. South Seas Tours Corporation was’ also
BNinteweds however, it had Deen identified as a ‘doe” defendant and,
Cherefore, was not naned in the original complaint.

 

     

 

 
as “tour boat promoters") acted in violation of an SMA permit
held by Sheehan, Sr. and Patricia Wilcox Sheehan by allowing tour
boat operators, without the requisite permits, to use their
boatyard to conduct conmercial activity. See gupra note 3.

Specifically, Appellants alleged that Sheehan, Sr. “allowed non-

 

permitted boat tour operators to launch their vessela from his

 

boatyard and provided parking facilities for their customers

Finally, Appellants sought to add a claim for violation of HRS

 

§ 480-2 as against tour boat promoters. On February 3, 1999, the
circuit court entered an order granting Appellanta’ motion for
leave to file a first amended complaint, and, consequently, on
the same day, Appellants filed the first amended complaint.

3. Dismissal of Claims Based on HRS § 480-2 and the Second
Amended Complaint

 

On September 13, 1999, Swain, Catamaran Kahanu, and

 

Swain Limited Partnership dba Hawaiian style Toure and Activitic
{hereinafter, collectively, Swain defendants], who are tour boat

operators and promoters, moved for partial summary judgment on

 

Appellants’ claims based on HRS § 480-2 (relating to unfair
methods of competition). Therein, Swain defendants argued that
Appellants lacked standing to bring the instant action inasmuch

this court’s recent decision in Robert's Hawai'i School sus,
nc. Laupahoehoe Transportation Co., 91 Hawai'i 224, 982 P.2d

853 (1999), held that there is no private claim for relief under

 

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HRS § 420-13 (1993)" for unfair methods of competition in
violation of HRS § 480-2.

On Septenber 20, 1999, Appellants moved to file a
jecond amended complaint. Therein, Appellants sought to amend

the first amended complaint ‘to delete those parties that have

 

been dismiseed, ("] to modify the legal theories asserted[,]

: to delete three claims of relief [,] and to join two clains
of relief against [dJefendants.” Appellants sought to delete the
following three claime: (1) violation of HRS § 480-2 against
tour boat operators; (2) violation of HRS § 480-2 against tour
boat promoters; and (3) aiding and abetting violation of HRS

§ 480-2 againet tour boat promoters. Appellants proposed to
delete the foregoing three claims in light of this court's
holding in Robert’s Hawai'i, as articulated in Swain defendants’

motion for partial summary judgment. In addition, Appellants

Mums § 480-13 states in relevant part:

(®) Any consumer who i¢ injured by any unfair or
deceptive act oF practice forbidden or declared unlawful by
section 480°2:

ix)" May eue for danages sustained by the

Cotauner, and, 1f the judgment 1s for the
plainesfé, the plainciff shall be awarded
{2 sum not ‘less than $1,000 or threefold
Ganages by the plaintife sustained,

 

 

 

Peasonaé!
the costs of suit; and

(2) May bring proceedings to enjoin the
unlawful practices, and if the decree is
for the plaintiff, ‘the plaintiff shall be
Awarded Feaconable attorneys fees together
Sith the cost of suit.

 

% the additional parties disniesed were: (1) Hawaii Calle Activities,
ime.; (2) Clipser; (3) Kauai Sands, Inc.; (4) AOAO of Lavai Beach Resort; (3)
Danio vacation Ownership, Inc.; (6) Walver; and (7) HeS Publishing dba xauai
Magazine.

 

-1n-
requested that they be allowed to add two claims and to modify
two existing claims. Specifically, Appellants proposed to add
the following two claims: (1) common law unfair competition and

aiding and abetting common law unfair competition against tour

 

boat promoters; and (2) interference with prospective business
advantage against all defendants. Appellants sought to modify
their claims of conspiracy and injunction in order to delete any
reference to HRS chapter 480 and to add references to common law
unfair competition and tortious interference with prospective
business advantage.

on September 30, 1999, Sheehan, Jr. and Hanalei Land
Company, Ltd. moved for partial summary judgment on Appellants’
three claims based on HRS § 480-2 in their first amended
complaint. Therein, Sheehan, Jr. and Hanalei Land Company, Ltd.
reiterated Swain defendants’ arguments that, pursuant to Robert's
Hawai'i, Appellants could not pursue claims for relief under HRS
§ 480-13 for unfair methods of competition in violation of HRS
§ 480-2.

On November 8, 1999, the circuit court entered an order
granting Sheehan, Jr. and Hanalei Land Company, Ltd.’s motion for
partial summary judgment. Therein, the following three claims
asserted by Appellants in their first amended complaint were

Gismissed: (1) violation of HRS § 480-2 against tour boat

 

% qt ie unclear why Appellants proposed to add a claim for aiding and
abetting common law untair competition against tour boat promoters inasmuch as
ie appears that such a claim was already asserted in Appellants’ original
complaint:

 

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operators; (2) violation of HRS § 480-2 against tour boat

and (3) aiding and abetting (a) violation of HRS

 

promoter:

§ 490-2 and (b) unfair methods of competition against tour boat

 

motion for

 

promoters. The order also granted Swain defendant:

 

partial summary judgment “to the extent that such motion is
consistent with [Sheehan, Jr. and Hanalei tand Company, Ltd.'s]
{motion for [plartial (s]unmary [3] udgment [.]*

on November 12, 1999, the circuit court entered an
order granting in part and denying in part Appellants’ motion for
leave to £1le a second amended complaint. Therein, the circuit
court denied Appellants’ request to delete their three claims
arising under HRS § 480-2 inasmuch as those claims were the
subject of the November 8, 1999 order granting Swain defendants’
motion for partial summary judgment. The circuit court granted
Appellants’ request in all other respects.

on November 12, 1999, Appellants filed their second
amended complaint. The following table lists the six claims

asserted in Appellants’ second amended complaint:

 

Me ip unclear why the circuit court dismissed Appellants’ cla:
aiding and abetting unfal? competition inasmuch as this claim did not arise
Gnéer HRS § 480-2 but Father appeared to be Dased on common law unfair
competition

 

 

  

ie note that, in 2002, the legislature passed Senate Bill 1320, which
was signed into lav ag Act 225, amending ERS § 480-2 by adding subsection (e) ,
hich provides: “Any person may bring an action based on unfair methods of
Goepeticion declared unlawful by this section.” Act 229, § 6 stated that the
Ret sehall take effect upon approval.” Act 229 was approved on June 28, 2002,
2oca Haw. ene. L, Act 229 at 910)

 

 

-13-
 

CLAIM AGAINET

 

 

 

 

‘count I comon law unfair tour boat operators
competition

Count If ging and abet etna tour boat promoters
competition

Count TT interference with ‘tour boat operators and
prospective business | promoters
Savantage

Count IV conspiracy (with respect | tour boat operators and

fo (1) common law unfair | promoters
Competition and (2)

Gncerference with
prospective busines

   

 

 

aavantage)

count V ‘unjust enrichneat 7 ‘our boat operators
accounting

‘Count Vr injunctive relief ‘our boat operators and

 

 

 

promoters

 

 

With respect to their common law unfair competition claim (Count

1), Appellants alleged in their second amended complaint:

 

Defendant (e’, Lee., tour boat operatore’} conduct ae
alleged herein, including but not limited to, thelr conduct
Of comercial Goat tour operations in and out of the Nanalel
SWA without a Hanalei SMA (plermit from and after September
30, 1988 and/or for conduct of tour boat activities within
Ma'pall coast ocean waters not in compliance with applicable
state law or state permit requirements constitutes common
Law unfair competition.

 

 

With respect to their interference with prospective busine!

advantage claim (Count ITI), Appellants alleged:

Defendant(s’, L.e., tour boat operators’) conduct as
alleged herein, including but not limited to, their conduct
Of comercial boat tour operations in and out of the Hanales
Sua without a Hanalei sia [pJermit from and after Septenber
30, 1988 and/or for conduct of tour boat activities within

 

   

 

 

Na pail (eloast ocean waters not in compliance with
applicable state law or state permit requirements
Constitutes tortious interference with prospective business
aevantage.

Defendant(s’, i.e., tour boat promoters’) conduct of
referring passengers and providing material assistance to
Glefendant (s, ive., “unpermitted” tour beat operators) who
were engaged in common law unfair competition through their
promotion, advertising and referral activities on behalf of
(alefendant (sunpermitted” tour boat operatore], and/or
through allowing their property to be used for auch purposes

 

  

a

 
constitutes tortious interference with prospective busine
savantage

Defendant(s’, ings, tour boat pronoters*) further
conduct of failing of refusing to promote the permitted tour
activities of [Appellants] on par with their pronotions of
Talefendant [ulnperaiteed (bloat (tlour (olperators and/or
Hiiling or refusing to inform custoners that certain boat
tour operators were unpernitted and the existence of
permitted tour boats constitutes tortious interference with
Prospective business advantage.

Defendants [Sheehan, S¥- defendants, sheehan, Jr., and
Hanalei iand company, Led.) have acted in’ violation of
Sheehan, Sr. and Patricia Sheehan's SMA permit and/or
without required permits and/or otherwise in violation of
Gpplicable law to (Appellante’] economic detriment by
SHiowing unpermitvea boat tour operators to use ite facility
fo conduct comercial activity without the required Hanalei.
SHA permite and/or state permits and/or otherwise not in
Compliance with applicable law and court orders and have
therefore tortiously interfered with [Appellants’)
prospective business advantage.

 

 

 

And, with respect to their unjust enrichment/accounting claim

 

against the tour boat operators (Count V), Appellants allege

Ae a result of the conduct as alleged herein,
[defendants {tour boat operators) have been unjustly
Inriched. Defendant Unperaitted Boat Tour operators have
been enriched for deliberately failing and refusing to
Conduct their activities in accord with the SMA Rules and
Regulations and/or other applicable state and county rules,
Tepulations, ordinances, lava and court ordera while
[ippellantel conducted their activieies in compliance with
fei roles and regulations. The result has been chat
[ippellantel conferred a benefit upon the Unperaitted Boat
‘Tour Operators by reducing the competition for tour boat
Operations in the Hanalei Sta and allowing (djefendant
Uhpermicted Boat Tour Operators to continue in business.

 

 

 

4. Dismissal of Counts I Through IV of the Second Amended
Complaint

on March 6, 2000, Napali Appellees moved for partial
sumary judgment with respect to Counts I (common law unfair
competition), III (interference with prospective business
advantage), and IV (conspiracy). Therein, Napali Appellees
contended that, inasmuch as Appellants’ purported business tort
clains are wholly dependent on Na Pali Appellees’ alleged

violations of HEMP (the county rules and regulations relating to

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SMA permits) and ORMRA (the state rules and regulations relating
to state permite), and neither HEMP nor ORMRA confers a private
right of action on private parties, Appellants lack standing to
enforce these regulations. As such, Napali Appellees argued that
Appellants’ claims of conmon law unfair competition and
interference with prospective business advantage were not
cognizable. Napali Appellees also contended that Appellants’
conspiracy claim must fail as a matter of law because it was
derivative of Appellants’ underlying claims of common law unfair
competition and interference with prospective business advantage.

on March 30, 2000, G.F. Hutton Properties dba Cliffs
Resort Activities and CAP Management Corp. dba The Cliffs Clubs
Activities (hereinafter, collectively, Cliffs defendants], who
are, inter alia, tour boat promoters, filed a joinder in Napali
‘Appellees’ notion for partial summary judgment. cliffs
defendants further moved that the circuit court sumarily disniss
counts 11 (aiding and abetting common law unfair competition) and
vi (injunctive relief) as to them. Cliffs defendants contended
that, inasmuch as Counts II and VI are “entirely derivative" of
count 1 (conmon law unfair competition) and Appellants lacked
standing to sue Napali Appellees for common law unfair
competition, Counts IT and VI should be dismissed.

A hearing was held on April 13, 2000 with respect to
Napali Appellees’ motion for partial summary judgment. At the
hearing, the circuit court orally ruled that Appellants’ clains

4 inasmuch as HRS

 

of common law unfair competition were dismisi

n16-
§ 480-2 “ip the exclusive renedy."* The circuit court took the
Appellante’ other claims raised in Napali Appellees’ motion for
partial summary judgment under advisement.

on May 23, 2000, the circuit court entered its written

 

order granting in part and deferring in part Napali Appelle
motion for partial summary judgment. Therein, the circuit court
dismissed Count I (common law unfair competition against tour
boat operators) as to all defendants. The circuit court
partially dismissed Count IV (conspiracy), dismissing Appellants’
conspiracy to commit conmon law unfair competition claim. The
circuit court deferred on ruling on Count ITT (interference with
prospective business advantage) and ordered the parties to submit
supplemental memoranda in support of their positions. Although
not clear from the circuit court's order, it appeared that the
circuit court would rule on Appellants’ conspiracy to commit
interference with prospective business advantage claim when it
ruled on Appellants’ interference with prospective business

advantage claim.

& We note that, on appeal, Appellants raise 2s error the circuit
court's ruling that HRS § 490-2 “ie the exclusive renedy.” This court ha
previously ruled that, "where the circuit court's decision is correct, ite
Conclusion will not be disturbed on the ground that it gave the wrong’ reason
for ite ruling.*” eves v, Kubovama, 76 Hawai'i 137, 140, 870 P.2d 1203, 1284
(i304) (citations omitted): Ae such, "(e]his court may affirm a grant of
Sommary Judgment, on any ground appearing in the record, even if the circuit
Court didnot rely on it." Id. (eitations omitted). Here, as discussed more
folly infra, alehough the cirevit court's decision vas correct, it gave the
Wrong igasen for its ruling. Specifically, MRS § 480-2 does not provide a
Yenedy for Appellants because, ae fobert"g Hawaii held, there is no private
Claim for reliet under ARE § 480-13 for unfair methods of coupetition in
Giolation of HBS § 480-2. Moreover, we note that the common law tort of
Untalr competition waa ast "preempted" by HRS § 480-2 as suggested by the
cireuie court's ruling. See Weriai: e,_inc, v. First

308 Hawaii 36, 122 P34 i253 (App.)y gerk, denied, 109 Hawaii 2
05s (2005)

 

   

1 125 Baad

 

-17-
on July 26, 2000, the circuit court entered a
supplemental order, dismissing Count IT (common law unfair
competition against tour boat promoters) as to all defendants
On August 30, 2000, the circuit court entered an order granting

Napali Appellees’ motion for partial summary judgment with

 

respect to Count III (interference with prospective business
advantage) as to all defendants. The circuit court aleo

dismissed the remainder of Count IV (conspiracy), dismissing

 

Appellants’ conspiracy to commit interference with prospective
business advantage claim as to all defendants. In its August 30,

2000 order, the circuit court stated:

that the test set forth by the United
States Suprene Court in Cort v. Ash, 422 U.S. 66 (1375)
controls in this case, and that (appellants) “do not have a
private right of action to bring tort clains based on
Alleged Violations of permitting regulations ana
environmental statutes governing the Hanalei [SMA] and the
Napali coastal region.

3. In applying the Cort v. Ash test to this case, the
[cloure specifically finds as follows:

(iy) The various permitting regulations and
environmental statutes upon which (Appellants)
base their tore claims were not enactes for the
benefit of comercial boatert, but for the
general public.

(41) There is'no indication of « legiplative intent

2. the [clourt tinal

 

 

 

 

 

 

the
these lawe were public enjoyment of coast
regions and environmental protection.

(is) Specifically, MRS § 205A-6("] was enacted to
provide the general public vith a cause of
Sction when the objectives, rules, and
Fegulations governing [SWAs) are Violated. In
this regard, ‘the Court finds as compelling the
1977 Senate’ Comittee Report 179, relating to
the purpose behind HRS [eJnapter 205A.

 

 

MRS chapter 205A is the enabling statute of HEMP (the county rules
and regulations Felating to SMA peraite)

-18-
(iv) ALiowing (Appeliants] to pursue a claim of
interference vith prospective business advantage
based on alleged violations of the objectives,
Yules, and regulations governing the ianalel
[sa] ‘would net advance the underlying purpose
and legislative scheme of Rs [eJhapter 205A.

 

Consequently, Appellants’ surviving claims were Counts V (unjust

enrichnent/accounting against tour boat operators) and VI

 

(injunctive relief against tour boat operators and promoters

cond Amended

 

5. Dismissal of Counts V and VI of the
Complaint

on October 16, 2000, Cliffs defendants moved for

 

partial summary judgment with respect to Count Vi (injunctive
relief). Therein, Cliffs defendants argued that Appellants’
claim for injunctive relief was based on the defendants’ alleged
(1) unfair competition in violation of common law and

(2) tortious interference with prospective business advantage.
Inasmuch as the circuit court had earlier dismissed Appellants’
claims of conmon law unfair competition and interference with

prospective business advantage, Cliffs defendants maintained that

 

Appellants were thue precluded from seeking injunctive relief.

on October 20, 2000, Swain defendants moved for partial
summary judgment with respect to Counts V (unjust enrichment) and
VI (injunctive relief). Therein, Swain defendants argued that

unjust enrichment “is a remedy and not a cause of action or

© In addition, the following defendants were disnissed prior to the
eicuie court's August 30, 2000 order granting partial summary judgment:
(2) Hyatt. Corporation dba’ Hyatt Hotels Hawai't; (2) Anerican Express Travel
Related Services, Company, inc.; (3) Resort Marketing International-Hawal't,
Inc, dba Embassy Vacation Resort; (4) Marriott Hotel Services, Inc.
(5) uanbain; (6) Patricia Wileox Sheehan (7) Patricia Wilcox Sheehan Trust;
(@) Sheenan, Jr.; and (3) Hanalei Land Company, Ltd. Furthermore, appellants
had filed a request to the clerk for entry of defauit with respect to Hawaiian
World Napali, ines, which was granted.

 

   

 

 

-19-
claim.” Specifically, they contended that “a claim for an
accounting and unjust enrichment is a claim for damages, not the
basis or justification for the claim.” Thus, Swain defendants

maintained that, inasmuch as Appellants’ claims of common law

 

unfair competition and interference with prospective busine
advantage had been dismissed, “there can be no claina for a
remedy of either injunctive relief or ite further remedy of an
accounting and/or unjust enrichment." Moreover, Swain defendants
contended that, because they had ceased all operations and
promotions of tour boats in Hanalei by 1998, Appellants’ “prayer
for injunctive relief had actually and effectively [been
satisfied) in 1998."

A hearing was held on November 21, 2000 with respect to
the separate motions for partial summary judgnent filed by Cliffs
defendants and Swain defendants. With respect to Appellants’
claim for injunctive relief, the circuit court stated:

(Winder the law as the (clourt sees it, [Appellants) must,
ow s clearly ascertainable right in order to have a
fanding to seek equitable -- the equitable relief of
Enjunction. [Appellants] must aleo show that cheir claim
for injunctive relief does not depend on the existence of a

private renedy.
‘Under the circumstances, the [clourt does not feel
that [Appellante] can do this. (Appellante’] main argument
po matter what (Appellante] aay(] is that [Appellantel got
Burt because defendants violated [HRS clhapter 205A and that
defendants(") violations ~~ the violations of the wrongful
conduct regardiess of what (Appellants) say(), (Appellants)
cannot use [HRS c]hmspter 205A. as the basis for injunctive
Pellet oF equitable relief under the circunat. ‘They 0
not have a private right of action under [aks c)hapter 205A.
‘Under the circumstances, with reference to the
injunction, the (eJourt will grant the motion for partial

sunmary judgment

 

   

 

 

 

 

 

‘The circuit court took under advisement Appellants’ remaining
claim of unjust enrichment/accounting. Tr. 11/21/00 at 8.

-20-
on December 7, 2000, the circuit court entered its
written order granting Cliffs defendants’ motion for partial
summary judgment with respect to Count VI (injunctive relief),
dismissing Appellanta’ claim for injunctive relief as to all
defendants, On February 21, 2001, the circuit court entered an
order granting Swain defendante’ motion for partial summary

judgment with respect to Count V (unjust enrichment /accounting) ,

 

dismissing Appellants’ claim for unjust enrichment /accounting

to all defendants. The circuit court further found “that the

 

remedy of unjust enrichment is not practical and would not serve
the public good."
6. Judgment and Appeal

on November 7, 2003, the parties filed a conditional
stipulation of dismissal as to all claims by Appellants and all
counterclaims by defendants." The stipulation preserved
Appellants’ right to appeal from any final judgment entered by
the circuit court with respect to their claims against (1) Napali
Appellees, (2) Sheehan Appellees, and (3) Capt. Zodiac. As part
of the stipulation, Appellants could challenge only the circuit
court’s orders granting summary judgment with respect to the six

claims set forth in Appellants’ second amended complaint.

* clipner, Napali Appellees, Sheehan, Sr., and Capt. Zodiac had filed
counterclaims against Appellants. As part of the stipulation, all
Counterclains were dismissed. RA, Vol. 27 at 158.

wane
on December 17, 2003, final judgment was entered in

and

 

favor of, inter alia, Napali Appellees, Sheehan Appell
capt. Zodiac. Appellants timely appealed on January 14, 2004.
IT. STANDARD OF REVIEW

A. Motion for Summary Judament

‘This court reviews the circuit court’s grant of summary
judgment de novo. O'ahu Transit Serve., inc, v. Northfield Ina.
Gon, 107 Hawai'i 231, 234, 112 P.3d 717, 720 (2005) (citing
Hawai'i Cnty, Fed. Credit Union v. Keka, 94 Hawai'i 213, 221, 11
P.3d 1, 9 (2000)). ‘The standard for granting a motion for

summary judgment is well settled:

  

(Slunmary judgnent {8 appropriate it the pleadin
Geporitions, answers to interrogatories, snd sdnisaions on
file, together with the affidavits, if any, show that chere
Seno genuine issue as to any material fact and that the
moving party ia entitled to judgment as amatter of law. A
fect ie material if proof of chat fact would have the effect
of establishing or refuting one of the essential elenents of
Svcause of action or defense asserted by the parties. The
evidence must be viewed in the light most favorable to the
hnon-moving party. In other words, we must view all of the
Cvidence and the inferences drawn therefrom in the 1isht
most. favorable co the party opposing the motion.

Price v. AIG Hawai'i Ing. Co., 107 Hawai'i 106, 110, 111 P.3d1, 5
(2005) (citation omitted) (brackets in original).
B. Statutory Interpretation

Statutory interpretation is reviewed de novo by this

 

 

   

 

court. Blair v. Ing, 95 Hawai'i 247, 253, 21 P.3d 452, 458
(2001) (citations omitted) .
HIT. DISCUSSION
As previously stated, Appellants challenge the circuit

court’s ordera granting summary judgment in favor of Napali

<aa-
Appellees and Sheehan Appellees” with respect to their clains of
common law unfair competition, tortious interference with
prospective business advantage, and unjust enrichment. However,
we note that Appellants’ three claina are entirely dependent upon
Napalé Appellees’ alleged violations of HEMP (the county rules
and regulations relating to SMA permits) and ORMRA (the state
rules and regulations relating to state permits). Specifically,
all three claims for relief in the second amended complaint
incorporate the central allegation that Napali Appellees operated
their tour boat activities in violation of county permitting
rules and regulations (i.e., HEMP) and state permitting rules and
regulations (ie., ORMRA). As such, we first address the
threshold issue of whether HEMP and ORMRA afford a private right
of action in the instant case.

Appellants contend that their claims for common law
unfair competition and tortious interference with prospective
business advantage “are properly based upon [Napali Appellees]
operation of non-permitted and illegal boat tours in the Hanalei
SMA and along the Na Pali Coast to [Appellants’] financial
detriment.” Napali Appellees contend that ‘Appellants cannot
assert tort clains based on alleged violations of a statute when

the statute does not confer a private right of action upon them.”

    

tn theSr opening brief, Appellants state that, “(flor purposes of
the instant appeal, ‘the principal [é]efendante include (1) (Wapali appellees)
fe]. Such statement is also consistent with
Appellate’ civil appeal docketing statenent. Nowever, presumably because
Appeliante preserved thetr right to appeal against capt. Zodiac, on September
Tee" 2008, cape. Zodiac filed a joinder in Sheehan Appellees’ answering brief

 

 

-23-
Specifically, Napali Appellees argue that "Appellants lack
standing to assert their business tort claims because:

(2) Appellante’ tort claims are wholly based on HEMP and ORMRA;

 

(2) those regulations were not enacted to protect Appellants:

business inte)

 

1

 

and (3) those regulations do not provide
Appellants with a private cause of action.” similarly, Sheehan
Appellees contend that “(t]he statutory regulations in question,

including the etate’s permitting requirements, were not

 

established to create an exclusive right to operate tour boats
nor to protect Appellants against competition, but [,] rather, to
protect the environment and benefit the general public."

In Reliable Collection Agency, Ltd. v. Cole, 59 Haw.
503, 564 P.2d 107 (1978), this court stated:

in determining waether a private renedy ie
implicit in a svatute not expressly providing
one, several factors are relevant. First, is
the plaintiff one of the class for whos
{elepecial benerit the statute was enacted;

PStnat is, does the statute creates

Fight in favor of the plaintitt? Second,

ie there any indication of legislative intent,
explicit or implicit, either to create such a
Fenedy or to deny one?» Third, is ie
Consistest with the underlying purposes of the
Jegielative schene to imply such a renedy for
che plaincife?

 

 

 

at 507, 584 P.2d at 109 (quoting Cort v. Ash, 422 U.S. 66, 78

 

(2975), departed from by Transamerica Mortgage Advisors, Inc. v.
Lewis, 444 U.S. 11 (1979), and Touche Ross & Co. v. Redington,

442 U.S. 560 (1979)) (ellipses and brackets in original)

 

(internal quotation marks and emphasis omitted) .

% the United states Court of Appeals for the Ninth Circuit has stated:

 

(continued...)

-24-
Here, as previously mentioned, Appellants’ claims are

 

based on the allegations that Napali Appellees operated without
the requisite SMA permit and state permit, as mandated by HEMP"
and ORMRA,® respectively. A closer look at HEMP and ORMRA,
however, reveals that both regulations were not promulgated with
the objective of protecting business interests or competition but

rather with the objective of protecting and preserving the

environment for the general public, and, thus, it appears that no

 

(continued)
‘Though the Supreme Court never indicated that the four
cort factors [disevesed intra) carried different weight,
Subsequent dacieions have exphasized that the key inquiry is
Ghether Congress intended to provide the plaintift with «

 

 

Drivate right of action. See Californie v. Sierra Club, 451
Sie. 67, 293 (1901); age algo Buraert v. iakeiani Bernice
Paushi Bishop Trust, 200 P-34 661, s6€ (3th Cir. 2000).

Indeed, there has even been soree Suggestion that Cort has
been overruled, Compare Touch cov, eae
Urs. 60, 575-75, (1975) (stating that Cork's first three
factors -- the language and focus of the statute, ite
[egisiative history, and its purpose -- are traditional
Considerations in detersining congressional intent), with
Ghospgon v. Thompson, 464 U.g. 274, 109 (1988) (Scalia, J,
Zoncurring) (suggesting that Touche Ross focuses attention’
Ghvene second Cort factor, denominated "legislative intent,
nd subsunes the others) "
four=tactor es ed

a sar

 

 

 

2 v, Helfer, 226 F.3d 1117, 3121-22 (sth cir. 2000)
(emphasis Tarts fourth factor provides that: *{xIs the cause of
SeBidn'one traditionally relegated to state law, in an area basically the
SGucern of the States, go that it would be inappropriate to infer a cause of
Sction based solely on federal law?" 422 U.S. at 78. Pursuant to First Pac.
Eancorm, we apply Gort‘e first three factors in determining whether a statute
Provides a private right of action though understanding that legislative
Theent appeara to be the determinative factor.

    

 

2 specifically, section 29.3 of HEMP provides that “Inlo person shall
engage in comercial boating in the Hanalei Bstuary nor launch, retrieve,
foots store, fuel, maintain, or repair any boat in the Hanalei Estuary that ie
Seed for comercial Boating without a valid Permit issued by the Planning
Comission.”

» specifically, WAR § 13-256-3 provides in relevant part that *{a]11
operators Sf comercial vessel, water craft or water sports equipment shall
Gbply for a comercial operator persit to be issued by the department. HAR
$'iaa5o-8 defines “department” as the DLNR-

-25-
private right of action is created in favor of Appellants under
the circumstances of this case.
A. HEME

Ae previously stated, the authority behind the
promulgation of HEMP is HRS chapter 205A (referred to as the
“Coastal Zone Management Act"). See gupra note 17. HRS § 205A-
27 (2001), entitled “Designation of special management area
authority,” provides that “{t]he [county planning commission) is
designated the [SMA] authority and is authorized to carry out the
objectives, policies and procedures of this part.“ The policy
behind SMAs is stated in HRS § 205A-21 (2001), which provides:

‘special controle on
the shoreline a

je of valuable resources
‘Options, and to ensure the
ie, by dedication oF other meane, to public
Owned oF used Beaches, recreation areas, and

preserves is provided: The legislatur

thse ie ie the state polley to pres
possible, to rs

Bone of fav's

 

    

  
 
 
 

 

 

 

Although section 19.1 of HEMP states that the purpose
of its rules “is to set forth the procedures to be followed in
processing [SMA] Use Permit applications for commercial boating
within the Hanalei Bstuary(,}* it is clear that HEMP, when placed
in the context of the SMA Rules and Regulations of the County, of
which HEMP is a part, was enacted with environmental concerns in
mind. Thus, HEMP implenents the policies behind SMAs as stated
in HRS § 205A-21. Specifically, section 1.2 of the SMA Rules and
Regulations of the County, which essentially reiterates the

policies outlined in HRS § 205A-21, provides:

-26-
Te {a the state policy to preserve, protect, and where
possible, 20 restore the natural resources of the coastal
Zone of Havai's. Therefore, special controls on developrent
Within an area along the shoreline are necessary to avoid
permanent lose of valvable resources and the foreclosure of
managenent options, and to Insure that adequate public

Access is provided co public-owned or used beaches,
Fecreation areas, and natural reserves, by dedication or
other seane’

 

 

   

 

‘As such, it appears that HEMP was promulgated to create a
permitting system for comercial boating in order to promote the
preservation and protection of the natural resources of the
Hanalei SMA and not to protect commercial boating operators from
competitive injury. Moreover, section 13 of the SMA Rules and
Regulations of the County specifically provides the following

civil penalties:

A. Any person who violates any provision of these Rules
nd Regulations ahall be subject to civil fine not to
tkceed $10,009. in addition to any other penalties,
hy person who performs any development. in violation
oe/ehis"part shall be subject to civil fine not co
Skoeed ¢500 a day for each day in which such violation
perelacs,

2, Rhy person violating any provision of these mules and
Regulations may be enjoined by the Circuit Court of
the state by mandatory or restraining order necessary
OF proper to effectuate the purposes of these Rul
and zegulations in a suit brought by the Agency. [

 

   

‘Thus, based on the foregoing, it appears that a private right of
action for damages under HEMP was not contemplated in favor of
commercial boating operators alleging injury to their business
interests. See Med. Soc'y of New Jersey v. Anerivealth HMO,
Ince, 868 A.2d 1162, 1168 (N.J. Super. Ct. App. Div. 2005)
(stating that the court “generally doles} not infer a private

right of action where the statutory scheme contains civil penalty

 

® Section 1.4 of the SMA Rules and Regulations of the County define
vagency* as the Planning Departeent of the County of Kaua'l

-27-
provisions”) (internal quotation marks and citation omitted);
s! Welle, 818 A.2d 711, 716 (R.T. 2003) (stating that,

a civil

 

where an enforcement provieion in a statute contempla
fine for violations of an act, rather than a private lawsuit for
damages, no private right of action for damages was intended) .
B.  ORMRA

‘The authority behind the promulgation of ORMRA is HRS
chapter 200 (referred to as the “Ocean Recreation and Coastal
Areas Program"). The legislative history behind HRS chapter 200
indicates that the DINR is essentially responsible for, inter
alia, ‘address[ing] the impact an activity may have on the marine
environment when it regulates small boat harbors, boating, and
ocean-based recreation activities." 1991 Haw. Sess. 1. Act 272,
§ 1 at 607 (emphases added). In addition, HRS § 200-21 (1993)
provides the ‘declaration of policy” behind boating law:

beclaration of policy. The legis!
and declares that thie part

 

ture hereby finds
ecesuary to

  

   

and enjoyment of the waters of the

 

Jety of persons and the protection of

property se related to the use of the waters of
The state,

(3) Aireasonable uniformity of laws and rules
Fegarding the use of the waters of the State;
ana.

(a) Conformity with, and inplenentation of, federal
Laws and requirenents.

 

(Bold enphasis in original.)
Although ORMRA’s specific purpose "is to reduce

conflicts anong ocean water users, especially in areas of high

activity,” HAR § 13-256-1, ORNRA was generally promulgated “to

further the public interest and welfare and to promote safety

-28-
within the geographical limits of certain portions of Hawaii’s
ocean waters, navigable streams and beaches[.]* HAR § 13-250-1.
Ae such, it ia clear that the policies and objectives behind
ORMRA ie to promote safety, recreation, and protection and
preservation of the environment rather than protection of
business interests or competition. Furthermore, HAR § 13-252-7,
entitled "penalties," provides: “Any person who is guilty of
violating these rules shall be punished as provided in [HRS

§ 200-25 (1993)]." In turn, HRS § 200-25 states

Fines and Penalties. Any person violating any of the
provisions of this part, or of the rules adopted pursuant to
Efis parts shall be guiity of a misdemeanor; provided that
Gn addicion te, or a8 a condition to the suspension of, the
Eines and penaitios, the court may deprive the offender of
the privilege of operating any vessel, including, but not.
[fsitea to, any thrill craft or vessel engaged in
parasailing, in the waters of the state for a period of not
more than t¥o years. (*)

 

 

 

(Bold emphasis in original.) The HAR also provides the following
enforcement rights to the relevant public authority:

(wap) § 13-252-8 Powers of arrest. Any poli
any euployee, agent, oF Fepresentative of the d
futhorized by the chairperson of the board of land and
fatural resources who observes any violation by any person
Of these rules say forthwith arrest the person without a

   

% We note that, in 1997, the legislature amended HRS § 200-25. 1997
unase 204, $2 at 394. Section 200-25 now provides:

   

Pines and penalties, Any person violating this part,
or any rule adopted pursuant to this part, shall be fined
fot less than #50 and not nore than $1,000 or sentenced to a
Term of dnprisonnent of not more than thirty days, or both,
for each violation; provided that in addition to, or as
condition to the suspension of, the fines and penaltie
Gourt nay deprive the offender of the privilege of operating
Gey veesel, Including but not Limited fo any thrill craft oF
Yeesel engaged in parasailing or water sledding, in the
Watere of the state for a period of not more than thirty
days

  

 

(Bold emphasis in original.)

-28-
liam § 13-252-9 Taking legal custody of property. As
incident to a lawful arrest, ehe arresting authority may,
take legal custody of any personal property which 19 the
fubject of or related to any violation of these rules. The
property my be released only upon approval by the court
hich hap jurisdiction of the

 

   

    

 

 

(ing) § 13-252-10 Attommey genexal. The attorney general
nay bring appropriate proceedings to enjoin the continuance
Of any act or omission in violation of these rules.
(underscored emphases in original.) Thus, based on the
foregoing, it appears that a private right of action for damages
under ORMRA was not contemplated in favor of comercial boating
operators alleging injury to their business interests. See Med.
Soc'y of New Jersey, 868 A.24 at 1168; Stebbing, 818 A.2d at 716.
Noreover, case law in this jurisdiction and other
juriedictions support the conclusion that, when asserting

business tort claims as in the instant case, a private right of

 

action for damages ehould not be inferred from regulations that
were not promulgated with the objective of protecting business

competition. In Robert's Hawai'i, disappointed bidders for
public school bus transportation contracts (the plaintiffe) sued
their competitors, alleging that their competitors (the
defendants) -- acting in concert -- created, operated, and
controlled shell corporations to circumvent the State of Hawai'i
Department of Accounting and General Services’ (DAGS) bidding
rules and specifications. 91 Hawai'i at 230, 982 P.2d at a59.
The plaintiffs’ complaint included claims of, inter alia, unfair
competition in violation of ERS § 480-2, civil conspiracy, and
tortious interference with prospective business adventage. Id.

This court first addressed the issue whether the Hawai'i Public

-30-
Procurement Code and DAGS’ General Conditions afford a private
right of action by a disappointed bidder against a successful
bidder, Id. at 240, 982 P.2d at 869. The defendants alleged

that the foregoing statute and regulations do not provide a

 

private right of action and that, therefore, the plaintiff:

claima were barred. Id, The defendants specifically argued

 

‘that a claim of tortious interference with prospective busine:
advantage cannot be maintained within a state bidding framework.”
Id, at 257 n.39, 982 P.2d at 886 0.39.

However, this court disagreed with the defendants and
held that the plaintiffs were not precluded from bringing their
claims for relief. Id, at 240, 982 P.2d at 869. This court
noted that “DAGS encouraged competition in the instant bidding
process.” Id, at 257 n.39, 962 P.2d at 886 n.39. Specifically,
this court stated:

incorporated into DAGS’s bid solicitations since the

is70e, specification M, entitled “Preveation Against
Monopolizstion of school Bus Routes,” - provided:

Inaamuch as the State is the sole customer of
achool bus services in Hawaii and therefore, school
Bus service seens to be a unique Line of commerce, the

wee will deem it ia best interest to

fearding part of oF the entire bid may substantially

 

(a]ection 2.12(a) of the General conditions provided
that [a] bidder shall be disqualitied and nic bid
automatically rejected for. .  Iplroot of collusion among

fn which case, ali bids involved in the collusive
faction will be rejected and any participant. (in) such
Collusion vill be barred from future bidding until
Feinstared as a qualified bidder.

o31-
Ida at 222, 982 P.2d at 861 (some brackets and some ellipses in
original) (emphases added). In addition, a contract specialist

in DAGS’ etudent transportation branch during the relevant tine

 

period testified at trial thai

Ags included the foregoing provisions (L.e., Specification
Mand section 2-12(a) of the General Conditions) to

 

Ghat DAGS suspected had occurred in the past, to addr

Tngependant.specificaily, (ene contract specialist]
testified that DAGS suspected prior collusive bidding
between (the defendants. We) explained chat
Specification Muss enacted to maximize cometition within
{he industry snd to address potential monopolies, but that,
fo his knowledge, DAGS had never enforced Specification ™.

   

 

Id. (emphases added). Coupled with the fact that DAGS’ General
Conditions and Special Provisions’ enabling statute, former HRS
chapter 103 (1985), “did not limit private remedies{,}" this
court held that the plaintiffs’ claims were viable

In Klinger v, Morrow County Grain Growers, Inc., 794
P.2d 811 (Or. Ct. App. 1990), the plaintiff operated a retail

gasoline station while the defendant operated a “card-lock”

 

service station, where customers are permitted to serve
themselves in making gasoline purchases. The plaintiff contended
that, by allowing self-service, the defendant had violated oregon
Revised Statutes (RS) § 480.330, which prohibited any person,
other than the owner, operator, or employee of a gas station,
from dispensing fuel. Id, at 811-12. The plaintiff claimed that
the defendant had “thereby engaged in ‘unfair competition’ and
ha(d] also intentionally interfered with plaintift’s business
relationships with his customers." id, at 612, The trial court
granted the defendant’s motion to dismiss on the basis that the

232-
plaintiff was not within the class protected by ORS § 480.330 and
that injury to business interests was not among the harms that
the statute was intended to prevent. Idi.

on appeal, the plaintiff

 

legislative objective of ORS (51
{so330 ie safety, that his business interests are not
Within che class that it is intended to protect and that
Yajury co bie business is not a hara that the statute is
intended to prevent. He contends, however, that that is
beside che point, because his claine are for common law
torts, not fer statutory Liability or negligence per se. He
Aeeerte that defendant's violation of ORS (5) 480.330
weiseituces the "improper means" element of the intentional
GReerference claim but ie not the gravanen of the action in
[tecle. “therefore, lehel plaineitf maintains, the protected
Glase/prevented harm test, derived from statutory liability
Gna negligence per ga casee, is inapposite, and he has
Adequately stated chai common law relief

 

  

 

    

Id. The Oregon Court of Appeals, however, was not convinced by

the plaintiff's arguments and stated:

(the pllaintste urges us to conclude that... his
comon law claims are viable independently of the statutory
Glolacion that allegedly also occurred by virtue of (thel
defendant's conduct.

ueonitpader Ithe) plaintife7® ailegatsone, [the]
BeFenaanc’s conduct cannot be improper, unfair(,] Or
Otherwise tortious, unless se violates ORS [8] 480.330.

  

Somon 1aw rates at Tiabi hae
no ou be 2
‘ithe pilaintitt understands that any statutory

violation cen supply the ‘improper meas" elenent for an
Yotentional interference claim. We disagree, rt would make
ho sense for an intentions) interference claim to be
Gaineainabie simply because the defendant violated a statute
That hae no nexus with the business or economic

 

Eelaticnshipe allegedly harmed... AS noted, the atatute
re rere: By

Appellants contend that “awal'i courts have expressly stated that
the viclation of a sestute or rule can be the basis of a tort claim for
[neerference with prospective business advantage." In support of their,
Foregoing contention, Appellants rely on Kutcher v. Zimmerman, 87 Hawai'i 294,
555 Pead1076 (app. 998). Preliminarily, we note that Kutcher involved the
fort of interference with prospective contractual relations, which is aot one
Sf"ine caine Srought by Appeliante in the instant case. In addition to the

(continued.

   

 

 

-33-
Id, at 613 (citation omitted) (some emphases in original, some
omitted, and some added). Consequently, the Oregon Court of
Appeals affirmed the trial court's judgment in favor of the
defendant. Id.; see also Wine Spirits wholesalers of
Massachusetts, Inc. v. Net Contents, Inc., 10 F. Supp. 2d 84 (D.
Mass. 1998) (holding that plaintiff wholesaler had no private
right of action to bring tortious interference with business
relations claim where defendant purveyor of wines sold alcohol

without a valid Liceni

 

or certificate in violation of
Massachusetts law).
As evident in the discussion relating to HEMP and

ORMRA, th

 

county and state regulations and rulee are unlike
the DAGS’ General Conditions and Special Provieions in Robert's

Hawai'i. The purposes and objectives behind the relevant rules

(, . continued)
elements ‘required to establish a claim for tortious interference with
Prospective business advantage, a plaintiff asserting ac
Interference with prospective contractual relations mst also prove that "che
Gefendant acted without proper justification.” Id, at 406, 957 P.ad at 1088,
Kutcher rejected the seven-tactor analyeie under the Restatement (Second) of
‘Torte § 767 (1977) in determining whether a defendant actes without proper
justification and inatead adopted an approach followed by Oregon courts chat
“ilability may arise fron inproper motives or from the use of improper meses.”
Id. at 404,957 P.2d at 1086. (quoting
‘Ang. Go., 582 7.24 1365, 1371 for. 1978) Ten banc)) Tesphasis cnitted)
Hutcher stated that, vas an initial premise, .... a plaintiff may show that
interference was without proper justification where the interference
involved "violations of statutes, regulations, or recogni ted common-law
rules{.J'* Id. at 407, 957 Pad at 1089 (footnote ana cltaion omicted) «
With respect to the foregoing, Kutcher relied on Leigh Furniture and Carpet
657 P.2d 293 (Ueah 1982)

 

     

 

 
  

statutes may include euch acte ae 657
P.2d at 308. As such, we Believe that, ae Napali Appell the
eatutes that are alleged to be violated must have sone nemua £0 Commercial

 

business interests or simply provide . . . private rignte and renesie
Tnaumuch as Appellants in the instant ‘case rely on regulations like MEMP and
ORMEA, which, as stated gupra, were eesentially promigated for the purpose of
preserving the environment and promoting safety and recreation, and the
element of the absence of proper justification is not germane to the instant
case, Appellants’ reliance on futcher ie misplaced

 

 

o34-
promulgated by DAGS were to, inter alia, maximize competition,
prevent collusion, and to insure that bidders were truly
independent. 91 Hawai'i at 232, 982 P.2d at 861. As such,
allowing the plaintiffs in Robert's Hawai'i to pursue their
business tort claims advanced the underlying purposes and
objectives of DAGS’ General Conditions and Special Provisions,

In this case, however, allowing Appellants to pursue their
business tort claims would not advance the underlying purposes
and objectives of HEMP and ORMRA, namely, the preservation and
protection of the natural resources of the Hanalei SMA, safety,
and recreation inasmuch as HEMP and ORMRA have no objective ~~
even incidentally -- of protecting business interests or
competition. Moreover, similar to the plaintiff in Klinger,
Appellants have “simply attached common law labels to allegations
that assert no wrong other than the statutory violation." 794
P.2d at 813 (citation omitted). As such, in light of the
foregoing, we held that no private right of action for damages
exists under HEMP and ORMRA in the instant case. Accordingly, we
believe that the circuit court did not err in granting summary

judgment in favor of Napali Appellees and Sheehan Appellees.”*

 

 

jerted against Sheehan Appellees are
‘against Napali Appeliees, it follows that
jeehan Appellees fail as we

% tnasmuch
derivative to the clains
Appellants’ claims agains!

 

    

 

tn addition, although Appellance state that *[eJhe circuit court erred
in disniseing {thelr} equitable claims for unjust enrichment ang injunctive
Felief,* (emphasis added), Appellants did not assign as error the circuit
Court's dismissal of Appellants’ claim for injunctive relief nor did
Sppeliante present an argunent with respect to their claim for injunctive
Deiicee Ae such, appellants’ contention with respect to injunctive relief is
dcened valved. fgg Hawai'i Rules of Appellate Procedure (HRAP) Rule 28(D)(¢)
jeontimued..)

      

     

o35-
TV. CONCLUSION
Based on the foregoing, we affirm the circuit court’s

December 17, 2003 judgment.

on the brief!

James J. Bickerton and
Scott K. Saiki (of
Bickerton Saunders Dang & ie rhinern

Sullivan), for plaintiffs-

 

 

appellants
Prscntes CS reneiney orm

Jeffrey 8. Portnoy ané

3. Paul Sasaki (of Ca

Schutte LLP), for defendants-

appellees Napali Appellees Qne days

John T. Komesji, R. Scott
Simon, and Karen Y. Arikawa
(of Watanabe Ing Kawashima
& Komeiji LLP), for
Sheehan Appellees

Michael Jay Green, for
defendant-appellee Clarence
H. Greff dba Capt. Zodiac

(continued)
(2003) (*Foints not presented . . . will be disregardea{.]"); HRAP Rule
28(b) (7) (2003) (Points not argued may be deemed waives.”

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