Title: State, ex rel, Knapp v. The Aes Corporation

State: hawaii

Issuer: Hawaii Supreme Court

Document:

*** NOTFOR PUBLICATION ***

 

No. 26151

IN THE SUPREME COURT OF THE STATE OF HAWAI'T

 

STATE OF HAWAI'I, ex rel, BRUCE R. KNAPP,
Qui Tam Plaintiff /Cross-Appell

   

and
BEVERLY J. PERRY, on behalf of herself and all
others similarly situated, Class Action Plainbiff-
Appellant /Cross-Appelee,

 
  

gawd

‘THE AES CORPORATION and AES HAWAII, INC 3
Defendant s-Appellees/Cross-Appellants,

geo Nd LE AVR SOUL

and

HAWAIIAN ELECTRIC COMPANY, INC. and HAWATIAN
ELECTRIC INDUSTRIES, INC., Defendants-
‘Appellees /Cross -Appel lees.

 

APPEAL FROM THE FIRST CIRCUIT COURT
(cIv. NO. 01-1-3487-22)
SUMMARY DISPOSITION ORDER

Levingon, Acoba, and Duffy, JJ.; Circuit
Judge’ Cardoza, in place of Nakayama, J., recused)

(By: Moon, C.J.,

‘The instant case arises out of the alleged misconduct
between a regulated public utility supplying electricity and an
independent electric power producer that resulted in the

construction of an “unnecessary” and “costly” electricity

generating plant. As a result of the construction of the

electricity generating plant, consumers on the island of O'ahu,
including the State of Hawai'i (state), allegedly pay

‘unneceseary” and “inflated” prices for electricity, A complaint

 
mE

waa Eiled by Bruce R. Knapp,’ as a gui tam plaintiff, asserting a

claim for violations of the State False Claims Act, HRS § 661-21,

et nea., against defendants-appellees Hawaiian Electric Company,

tne, (HBCO) and Hawaiian Electric Industries, Inc- (apr) and

detendants-appeliees/cross-appeliants ABS Hawaii, Tne (ags-HI)

and The AES Corporation (ABS) [hereinafter, collectively,

appellees). Subsequentiy, plaints tf-appeliant Beverly J. Perry,

a consuner of electricity, on behalf of herself and all others

similarly eituated, along with Knapp, filed first amended

complaint against Appeliees. Therein, Perry asserted the

following three claima: (1) violations of HRS § 450-2 (1993)

(relating to unfair and deceptive acts and practices); (2) unjust

enrichment /restitution; and (3) fraud. Sometime thereafter, HECO

and usr filed a motion to dismiss the first amended complaint

ot Circuit, the Honorable Eden

 

qhe Circuit Court of the

piizabeth Hifo presiding, entered an order, dieniesing Perry's

three elaine on the basis that they were barred by the applicable

statutes of limitations.

perry appeals from the cizeuit court’s September 27+

2003 judgnent entered in favor of Appeliecs, OF appeal, Perry

argues that the circuit court erred in dismissing the first

amended complaint based on the stature of Limiratione and the

aoctrine of primary jurisdiction. AES and AFS-HE cross-appeal,
challenging the cireuit court's denial of their motion £0 diemios

_

 

not a party to the instai

 

» Knapp

 
the firet amended complaint. Eesentially, AES and AES-HI contend
that there are two additional bases to affirm the circuit court's
judgment .

upon carefully reviewing the record and the briefs
submitted and having given due consideration to the arguments
advanced and the issues raised by the parties, we resolve the
parties’ contentions as follows.

(a) Perry contends that the circuit court erred in
dismissing her HRS § 480-2 claim based on the applicable statute
of limitations.’ Perry argues -- allegedly for the first time on
appeal -- that the circuit court failed to consider the policies
underlying an HRS § 480-2 claim. Perry also asserts that the
circuit court erred in not applying “the clear language, context,
and intent” of HRS §§ 480-2, -3.1 (1993), and -24(a).
Specifically, Perry apparently “argues” that both HRS §§ 480-3.1
and -24(a) contain essentially similar language, ie., that
violation of HRS § 480-2 continues daily until corrected.”

HECO and HET point out that Perry's contention that the
circuit court should have considered the policies underlying an
ERS § 460-2 claim is raised for the first time on appeal.”
Nevertheless, HECO and HET argue that “the plain and unambiguous
statute of limitations provisions in HRS § 480-24(a) cannot be
@isregarded in favor of policy considerations underlying an HRS

2 on appeal, Perry does not challenge the circuit court's dismissal of
her unjust enrichnent/restitution and fraud cl

 

> on March 19, 2004, AKS-HI and ARS filed a joiner in MECO and HEI'®
opening briet

 
   

§ 480-2 claim." In addition, HECO and HEI contend that Perry
reliance on HRS § 480-3.1 -- also raised for the first time on
appeal -- is misplaced because section 480-3.1 governs the “civil
penalty" that may only be imposed “in a civil action brought by
the attorney general or the director of the office of consumer
Protection on behalf of the state." As such, HECO and HET argue
that Perry “lacks standing to enforce the remedies provided in
HRS § 480-3.1."

Ordinarily, “failure to raise or properly preserve

issues at the trial level would be deemed waived.” av. AIG
Hawai'i Ine. Co., 109 Hawai'i $37, 546, 128 P.3d 850, 859 (2006)

(internal quotation marks and citation omitted). As previously
stated, HECO and HEI maintain that Perry never raised her “HRS

§ 480-2 policy argument” and “HRS § 480-3.1 argument” at the
trial level. In opposition to HECO and HEI’s motion to dismiss,
Perry primarily argued that the “continuing violation exception?
contained in HRS § 480-24 applies to the facts of this case.
Perry also contended that *[wlell-established and fully-juetified
public policy will not permit claims arising from [Appellees’]
Continuous unlawful conduct to be time-barred." Perry does not

a her

 

respond to HECO and HEI’s contention that she rail
arguments for the first time on appeal.

It is clear that Perry did not raise her ‘HRS § 480-2
policy argument” and “HRS § 480-3.1 argument” at the trial level.
However, we have previously stated that, “[a]lthough we are not

required to consider [an appellant's] contention made for the
first tine on appeal, we will briefly address this issue to
negate any belief that a meritorious claim existe against [the
appellee]." Coll v. McCarthy, 72 Haw. 20, 26, 804 P.2d 981, #86
(2992), As such, we briefly address Perry's contentions to
negate any belief that a meritorious argunent existe.

-2(b), the

 

Perry contends that, “pursuant to HRS §
appellate courts are directed to give due consideration to
decisions of the federal courte in interpreting HRS § 480-2."
Perry cites to Eederal Trade Commission v. Algoma Lumber Co., 291
U.S. 67 (1934), for the proposition that, in interpreting the
federal counterpart to HRS § 480-2, i.e., 15 U.S.C. § 45,
Congress intended that proceedings in the public interest be
” HEC

 

actionable “without regard to any statute of limitation:

 

and HEI contend that Perry “fails to note that 15 U.S.C. § 45,
the federal counterpart to HRS § 480-2, does not contain a
statute of limitations provieion similar to that found in HRS
§ 480-24(a).* In response, Perry concedes that *[t]he FICA [(15
U.S.C. § 45)] does not have a statute of limitation provision
comparable to HRS § 480-24(a)(.]* Consequently, inasmuch as
“there is no federal counterpart to section 480-24(a)," Anzai v
Chevron Corp., 168 FP. Supp. 24 1180, 1185 (D. Haw. 2001), Perry's
reliance on Algona Lumber Co. is misplaced. Thus, Perry’s “HRS
§ 480-2 policy argunent” is without merit.

Perry appears to argue that, pursuant to the latter
part of HRS § 480-3.1, ise,, “[elach day that a violation of

section 480-2 occurs shall be a separate violation[,]* the
statute of limitations was tolled under the circumstances of this
case. By ite plain language, HRS § 480-3.1 governs the civil
penalty that “shall be collected in a civil action brought by the
attorney general or the director of the office of consumer
Protection on behalf of the state.” Inasmuch as Perry is not the
attorney general nor the director of the office of consumer
Protection, section 480-3.1 is simply inapplicable to Perry. As
such, Perry's “HRS § 480-3.1 argument’ ie without merit.

Because Perry faile to present any other argument with

pect to the circuit court’s dismissal of her HRS § 480-2

 

claim,‘ we hold that the circuit court did not err in dismissing
Perry's HRS § 480-2 based on the four-year statute of limitations

contained in HRS § 480-24(a).

(2) Perzy next contends that the circuit court erred
in dismissing the claims contained in the first amended complaint

based on the doctrine of primary jurisdiction. Perry argues that

 

+ Perry fails to present any argument with respect to the eireuit
8 rejection of the applicability of the “continuing violation” exception
Contained in WRS § 480-24(a) and the connon law continuing tort doctrine to
Chis cage. "As such, Perry's contention with respect to the continuing
violation exception contained in HRS § 480-24{a) and the commen lew continuing
tort doctrine iv Geened waived.” ge HRAP Rule 28(5)(7) (2003) (*Podnee not
argued may be deemed waived.") |

 

 

 

Furthermore, Perry does not present any argument with respect to the
Gates utilized by'KECO and MEI in their menorandim in support of their sotion
Eo dismiss in order to conclude that Perry "knew or should have. known of the
operative facts underlying (her) current claims anywhere from 1986 to 1998, oF
(seven to thirteen) years before (she) cormenced the instant action.”
Presumably, the circuit court used these dates in order to rule that the four-
year statute of limitations contained in HRS § 400-24 (a) barred Perty'e HRS
§ 490-2/claim. In her reply Brief, Perry simply conclodes that the *{elireait
{elourt erroneously construed the four year period of limitations from the
vecord and files at thst tine.” However, even in her reply brief, ferry faile
to present any argunent a to why her HRS § 490-2 claim te not barred by the
four-year statute of limitations. Aa such, Perry's contention that the
circuit court “erroneously construed" HRS § 460-2 “from the record and files
fat that time" is deemed waived. Gee HRAP Rule 28 (b) (9)

 

 

 
her HRS § 480-2 claim "is outside the scope of authority and

 

jurisdiction of the PUC.” HECO and HET contend that the circuit
court did not dismiss Perry’s HRS § 480-2 claim based on the
doctrine of primary jurisdiction, but rather, the circuit court

jed her HRS § 480-2 claim, as well as her other claims,

 

diomi:

 

based solely on the applicable statute of limitations, HECO and
HEI point out that the circuit court dismissed only knapp's
remaining gui tam claims based on the doctrine of primary
jurisdiction, and, therefore, Perry was not aggrieved by the
circuit court's ruling. As such, HECO and HET maintain that
Perry lacks standing to challenge the circuit court’s ruling
based on the doctrine of primary jurisdiction.

“Generally, the requirements of standing to appeal are:
(2) the person mst first have been a party to the action; (2)
the person seeking modification of the order or judgment must
have had standing to oppose it in the trial court; and (3) such
person mist be aggrieved by the ruling, i.e., the person must be
one who is affected or prejudiced by the appealable order.”
Kepo'o v. Watson, 87 Hawai'i 91, 95, 952 P.24 379, 383 (1998)
(citing Waikiki Malia Hotel, Inc. v. Kinkai Prop., Ltd. p’ship,
75 Haw. 370, 393, 862 P.24 1048, 1061 (1993)) (internal quotation
marks and brackets omitted) .

In the instant case, although Perry was a party to the
action, she did not have standing in the circuit court to oppose

mining that the doctrine of primary

 

the May 16, 2003 order d

jurisdiction applied to Knapp’s gui tam claims nor was she

 
affected or prejudiced by that order. As previously stated,
Perry asserted only three claims in the firet amended complaint:
(2) violations of HRS § 480-2; (2) unjust enrichment /restitution;
and (3) fraud. On February 20, 2003, the circuit court orally

don the applicable

 

ismissed all three of Perry’a claims bi
statutes of limitations. The circuit court subsequently entered
ite written order on April 22, 2003, dismissing all three of
Perry's claims based on the applicable statutes of limitations
As such, Perry no longer had any viable claims in the instant
action. Approximately one month later, on May 16, 2003, the
circuit court entered an order, ruling that the doctrine of
primary jurisdiction applies to Knapp’s remaining qui tam clains.
Because the circuit court had already dienissed Perry's clains,
Perry did not have standing to oppose the circuit court’s ruling
on May 16, 2003. Moreover, Perry was not aggrieved by the May
16, 2003 ruling inasmuch as the circuit court did not consider
whether the doctrine of primary jurisdiction applied to Perry's
HRS § 480-2 claim. Accordingly, we hold that Perry lacks
standing to challenge the circuit court’s ruling regarding the
doctrine of primary jurisdiction

(3) On cross appeal, AES-HI and AES contend that there
are two additional grounds to affirm the circuit court's
judgment. Specifically, AES-HI and ABS allege that the circuit
court's judgment can also be affirmed on the bases of preemption
and exhaustion, However, ABS-HI and AES state that, *[i]£ the

circuit court’s dismissal based on statute of limitations and

 
 

*** NOTFOR PUB!

appeal is

 

primary jurisdiction is affirmed, then this cros

 

appeal is

 

unnecessary.” Based on the above discussion, the cros

 

essentially moot. We, therefore, need not address the issues

raised in AES-HI and AES’s cross appeal. Therefore,
IT IS HEREBY ORDERED that the circuit court's Septerber
17, 2003 judgment ie affirmed.
DATED: Honolulu, Hawai", may 31, 2006.

on the briefs:
Loyd ¥. Asato, for class
action plaintift-appellant/
crose-appellee Beverly 3. .
Perry, on behalf of herself ite Hillcmson
and ail other similarly
situated Poo

Peter W. Olson (of Cades « .
Schutte) and Rick Richmond, Vere ones:

pro hae vice (of Kirkland
Pintle, ‘ios Angeles, @2), 6. OnLy?
for defendanta-appeliees/ We

cross appellonce the AES

Corporation and AES Hawai,

Shee

James Kawashima, J. Douglas
Ing, Gregory Y.'P. Tom, and
Brian A. Kang (of Watahabe Ing
Kawashima & Komeiji), for
defendant s-appellees/cross-
appellees Hawaiian Electric
Company, Inc. and Hawaiian
Blectrié Industries, Inc.