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NO. CAAP-18-0000594 

IN THE INTERMEDIATE COURT OF APPEALS 

OF THE STATE OF HAWAI‘I 

IN THE MATTER OF ISLANDS HOSPICE, INC., Appellant-Appellant, 

v. 

MALAMA OLA HEALTH SERVICES LLC; STATE HEALTH PLANNING AND 

DEVELOPMENT AGENCY, Appellees-Appellees, 

and 

JOHN DOES 1-10, JANE DOES 1-10, DOE GOVERNMENTAL UNITS 1-10, AND 

DOE ENTITIES 1-10, Appellees 

APPEAL FROM THE CIRCUIT COURT OF THE FIRST CIRCUIT 

(CIVIL NO. 17-1-2117) 

SUMMARY DISPOSITION ORDER 

(By: Nakasone, Presiding Judge, McCullen, J., and Circuit Court 

Judge Kawashima, in place of Leonard, Acting Chief Judge, 

Hiraoka, Wadsworth and Guidry, JJ., recused) 

 This secondary appeal arises out of a challenge 

brought by an existing hospice care provider, AppellantAppellant Islands Hospice, Inc. (Islands Hospice), against the 

Appellee-Appellee State Health Planning and Development Agency's 

(Agency) approval of a new hospice care provider, AppelleeElectronically Filed

Intermediate Court of Appeals

CAAP-18-0000594

20-JUN-2024

08:14 AM

Dkt. 108 SO
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Appellee Malama Ola Health Services LLC's (Malama Ola) 

application for a Certificate of Need to provide services.1 

Islands Hospice appeals from the July 23, 2018 "Order; 

Notice of Entry" (Order) and September 21, 2018 "Final Judgment"

(Judgment) filed and entered by the Circuit Court of the First 

Circuit (Circuit Court).2

On appeal, Islands Hospice contends the Circuit Court 

erred in affirming the Agency's October 10, 2017 "Decision on 

the Merits" (Decision) approving Malama Ola's Certificate of 

Need application because: (1) the Agency violated HRS § 91-93 by 

1 Under Hawaii Revised Statutes (HRS) Chapter 323D, entitled 

"Health Planning and Resources Development and Health Care Cost Control," the

Agency is charged with promoting accessibility to "quality health care 

services at reasonable cost." HRS § 323D-12(a)(1) (2010). The Agency

reviews applications for Certificates of Need, which are required for any 

entity seeking to, inter alia, "develop" or "initiate" health care services. 

HRS § 323D-43(a)(1) (2010). 

2 The Honorable Keith K. Hiraoka presided.

3 HRS § 91-9 (2012), entitled "Contested cases; notice; hearing; 

records," applies to contested case hearings, and provides in pertinent part: 

(a) Subject to section 91-8.5, in any contested case, all 

parties shall be afforded an opportunity for hearing after 

reasonable notice.

(b) [(setting forth required contents for the hearing 

notice)]

. . . .

(e) For the purpose of agency decisions, the record shall 

include:

(1) All pleadings, motions, intermediate rulings;

(2) Evidence received or considered, including oral 

testimony, exhibits, and a statement of matters 

officially noticed;

(3) Offers of proof and rulings thereon;

(4) Proposed findings and exceptions;

(5) Report of the officer who presided at the 

hearing;
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considering "off-record evidence" and failing to "create a 

record of the evidence received and considered"; (2) Malama 

Ola's application improperly relied "on speculation regarding 

the need for Supportive Care," which is not a health care 

service requiring a Certificate of Need under Hawai‘i 

Administrative Rules (HAR) § 11-186-5;4 (3) the Agency violated 

HRS § 323D-43 (2010)5 because it did not rely upon "actual 

(6) Staff memoranda submitted to members of the 

agency in connection with their consideration 

of the case. 

(f) It shall not be necessary to transcribe the record 

unless requested for purposes of rehearing or court review.

(g) No matters outside the record shall be considered by 

the agency in making its decision except as provided 

herein.

4 HAR Chapter 11-186, entitled "Certificate of Need Program," 

contains the pertinent agency rules. HAR § 11-186-5, which sets forth

"[s]tandard categories of health care services," does not list "Supportive 

Care"; but pertinently lists "[h]ospice" within the "Special Services" 

category under subsection (4)(H).

5 HRS § 323D-43 (2010), entitled "Certificates of need," provides 

in pertinent part:

(b) No certificate of need shall be issued unless the 

state agency has determined that:

(1) There is a public need for the facility or the 

service; and

(2) The cost of the facility or service will not be 

unreasonable in the light of the benefits it will 

provide and its impact on health care costs.

(c) The state agency may adopt criteria for certificate 

of need review which are consistent with this section. 

Such criteria may include but are not limited to need, 

cost, quality, accessibility, availability, and 

acceptability.

Each decision of the state agency to issue a 

certificate of need shall . . . be consistent with the 

state health services and facilities plan [(State Plan)] in 

effect under section 323D-15. . . .
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utilization data or a need methodology that is reliable, 

probative, and substantial, as required by the State Plan"; and 

(4) the Agency clearly erred in determining "there was no good 

cause for reconsideration of the Decision." 

Upon careful review of the record and the briefs 

submitted by the parties and having given due consideration to 

the arguments advanced and the issues raised, we resolve Islands 

Hospice's contentions as follows, and affirm.

On May 4, 2017, Malama Ola filed a Certificate of Need

application under HRS § 323D-44,6 seeking to establish hospice 

services on O‘ahu. In this case, the multi-layered agency review 

process for Certificates of Need set forth in HRS § 323D-45(a)7

6 HRS § 323D-44 (2010), entitled "Applications for certificates of 

need," sets forth a 90-day period of agency review for Certificate of Need 

applications as follows:

(a) An applicant for a certificate of need shall file an 

application with the state agency. . . .

Each application shall include a statement evaluating 

the facility's or service's probable impact on health care 

costs and providing additional data as required by rule. 

The statement shall include cost projections for at least 

the first and third years after its approval.

. . . When the state agency determines that the application 

is complete, the period for agency review described in 

subsection (b) shall begin, and the state agency shall 

transmit the completed application to the appropriate 

subarea councils, the review panel, the statewide council, 

appropriate individuals, and appropriate public agencies. . 

. .

(b) The state agency shall issue a decision on the 

application within ninety days after the beginning of the 

period for agency review . . . . 

7 HRS § 323D-45 (2010) is entitled "Subarea council, review panel, 

and statewide council recommendations for issuance or denial of certificates 

of need." This section contains the review process for Certificates of Need 

by the subarea council, review panel, and statewide council, which consists 

of hearing argument and evidence at public meetings, making a recommendation 

to the Agency, and keeping "a record of the meeting," as follows:
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was conducted through public meetings by the Oahuwide 

Certificate of Need Review Committee as the "subarea council" 

set forth in the statute; the "CON Review Panel" (Certificate of 

Need Review Panel) as the statutory "review panel"; and the 

Statewide Health Coordinating Council (Statewide Council). 

 On July 7, 2017, the Oahuwide Certificate of Need 

Review Committee reviewed Malama Ola's application at a public 

meeting and recommended disapproval of the Certificate of Need 

because Malama Ola met only four out of the six Certificate of 

Need criteria.8 

(a) Except for an administrative review as provided in 

section 323D-44.5, . . . the state agency shall refer every 

application for a certificate of need to the appropriate 

subarea council or councils, the review panel, and the 

statewide council. The subarea council and the review 

panel shall consider all relevant data and information

submitted by the state agency, subarea councils, other 

areawide or local bodies, and the applicant, and may 

request from them additional data and information. The 

review panel shall consider each application at a public 

meeting and shall submit its recommendations with findings 

to the statewide council. The statewide council shall 

consider the recommendation of the review panel at a public 

meeting and shall submit its recommendations to the state 

agency within such time as the state agency prescribes. 

The statewide council and the review panel may join 

together to hear or consider simultaneously information 

related to an application for a certificate of need.

(b) At a public meeting in which a subarea council or the 

review panel considers an application for a certificate of 

need, any person shall have the right to be represented by 

counsel and to present oral or written arguments and 

evidence relevant to the application; any person directly 

affected by the application may conduct reasonable 

questioning of persons who make factual allegations 

relevant to the application; any staff member of the state 

agency may conduct reasonable questioning of persons who 

make factual allegations relevant to the application; and a 

record of the meeting shall be kept. 

(Emphases added.) 

8 The Oahuwide Certificate Review Committee set forth the six 

Certificate of Need criteria as: (1) Relation to the State Health Services 

and Facilities Plan; (2) Need and Accessibility; (3) Quality of Service/Care; 

(4) Cost and Finances; (5) Relation to the Existing Health Care System; 
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 On July 27, 2017, the Statewide Council reviewed 

Malama Ola's application at a public meeting, and recommended 

conditional approval pending submission of a line-of-credit 

verification from the bank, and cash flow projections for the 

first three years. 

 The Agency's Decision noted that on August 31, 2017, 

Malama Ola submitted "additional information/ 

modifications to its application[.]" 

 On September 8, 2017, the Certificate of Need Review 

Panel conducted its review of Malama Ola's application and 

recommended approval on October 4, 2017, finding that all six 

criteria were met. 

 On October 10, 2017, the Agency issued the Decision 

approving Malama Ola's Certificate of Need application to 

provide hospice services on Oahu. 

 On October 24, 2017, Islands Hospice and other 

existing hospice providers requested a "public hearing" for 

reconsideration of the Decision.

 On December 8, 2017, the Agency's Reconsideration 

Committee held a public meeting to determine whether good cause 

had been shown to convene a "public hearing" for reconsideration 

of the Decision under HAR § 11-186-82.9 

(6) Availability of Resources. This committee concluded that "Need and 

Accessibility" was not met because "[t]he applicant has not demonstrated that 

there is a current deficit in the supply of hospice services in the service 

area nor has it demonstrated that there is likely to be a deficit in the near 

future." It also concluded that "Cost and Finances" were not met because 

"[t]he applicant has not demonstrated that sufficient working capital will be 

available to ensure the project's financial feasibility until Medicare 

certification is obtained."

9 HAR § 11-186-82(b) states:

(b) A request for a public hearing shall be deemed by the 

committee to have shown good cause, if: 

(1) It presents significant relevant information not 

previously considered by the agency which, with 
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 On December 22, 2017, the Reconsideration Committee 

denied Islands Hospice's request, issuing a "Written Explanation 

for Denial of Requests for Reconsideration Hearing" (Denial of

Reconsideration). 

 On December 28, 2017, Islands Hospice appealed the 

Decision and Denial of Reconsideration to the Circuit Court. 

The Circuit Court entered the July 23, 2018 Order (7/23/18 

Order) remanding the matter to the Agency under HRS § 91-14(g) 

to clarify whether it accepted or rejected the Statewide 

Council's "line of credit recommendation[,]" but affirming the 

Decision in all other respects. 

 On September 18, 2018, the Agency issued a Conditional 

Certification to Malama Ola pursuant to the 7/23/18 Order. The 

Circuit Court entered the September 21, 2018 Final Judgment, 

from which Islands Hospice timely appealed.

 (1) Islands Hospice argues that the Agency violated 

HRS Chapter 91 (the Hawai‘i Administrative Procedure Act (HAPA)), 

by "wrongly consider[ing] off-the-record evidence in violation 

of HRS § 91-9(g)[,]" and by "fail[ing] to maintain a whole 

record of the [Certificate of Need] application review 

proceedings for appellate review" under HRS §§ 91-9(e) and (f). 

Islands Hospice specifically argues that: the Agency's Decision 

stated that it "expressly considered the oral testimony 

submitted by the applicant and other affected persons"; the 

reasonable diligence, could not have been presented 

before the agency made its decision; 

 . . . .

(5) The decision of the administrator differs from the 

recommendation of the statewide council.

(Emphases added.) HRS § 323D-47 provides that "good cause" is "shown" if, 

inter alia, the request for a public hearing "presents significant, relevant 

information not previously considered by the state agency[.]" 
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"oral testimony is entirely absent from the record" because the 

Agency "failed to transcribe any of the proceedings"; the 

Agency's "consideration of [such] oral testimony violates the 

HAPA's requirement that agency decisions be made on record 

evidence" under HRS § 91-9(g); and the lack of a "whole record" 

"prejudices an appealing party in its ability to challenge an 

agency decision." (Cleaned up.) 

 Malama Ola and the Agency argue that HRS Chapter 91 

does not apply because: the Certificate of Need "application 

review process is not a 'contested case' proceeding" subject to 

HRS § 91-9; the Agency "did not conduct an 'agency hearing'" 

under HRS Chapter 91 before issuing its Decision; the "public 

meetings" by the advisory councils and panel "were not 'agency 

hearings' as defined by HRS Chapter 91"; and thus, the Agency 

"was not required to create or maintain a transcript of the oral 

testimonies submitted to the advisory councils/panels" that 

"merely made non-binding recommendations[.]" (Emphasis 

omitted.) These arguments have merit. 

 To determine whether HRS Chapter 91 and HRS § 91-9 

apply requires statutory interpretation, which we review de 

novo. Keep the North Shore Country v. Bd. of Land & Nat. Res. 

(North Shore), 150 Hawai‘i 486, 503, 506 P.3d 150, 167 (2022). 

"[W]here the statutory language is plain and unambiguous, our 

sole duty is to give effect to its plain and obvious meaning." 

Ocean Resort Villas Vacation Owners Ass'n v. Cnty. of Maui, 

147 Hawai‘i 544, 553, 465 P.3d 991, 1000 (2020) (citation 

omitted). 

 "Agency" is defined as a "state or county board, 

commission, department, or officer authorized by law to make 

rules or to adjudicate contested cases . . . ." HRS § 91-1 

(2012 & 2017 Supp.). An "agency hearing" is a "hearing held by 
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an agency immediately prior to a judicial review of a contested 

case as provided in section 91-14." Id. A "contested case" is 

a "proceeding in which the legal rights, duties, or privileges 

of specific parties are required by law to be determined after 

an opportunity for agency hearing." Id. 

 Here, the Oahuwide Certificate of Need Review 

Committee, the Statewide Council and the Certificate of Need 

Review Panel do not fall under the definition of "agency" 

pursuant to HRS § 91-1 because they do not "make rules" or 

"adjudicate contested cases." These entities are not agencies 

that hold "agency hearing[s]" under HRS Chapter 91, but rather, 

conduct "public meetings" prescribed by HRS § 323D-45 and make 

"recommendations" to the Agency. HRS § 323D-45 requires that "a 

record of the meeting shall be kept[,]" and the Agency did so 

here.10 Thus, the HRS § 91-9 record-keeping requirements for HRS 

Chapter 91 hearings did not apply to the public meetings in this 

case. 

 (2) and (3) Islands Hospice argues that the Agency's 

Decision erroneously concluded that Malama Ola met the "Need and 

Accessibility" criterion because the Agency's finding "was not 

based on actual utilization data or a need methodology that is 

reliable, probative, and substantial, as required by the State 

Plan"; and was "clearly erroneous given the overwhelming data 

and studies evidencing no need for an additional hospice 

provider in Honolulu." 

 The Agency made the following pertinent findings and 

conclusions on the "Need and Accessibility" criterion: 

35. The Agency finds that the anticipated growth in demand 

for [Hawaii Medical Service Association]'s supportive care 

10 The Agency record contains the minutes of the three public 

meetings summarizing what transpired, retaining a list of those who 

testified, and recording the votes of the committee members who recommended 

approval or recommended disapproval of Malama Ola's application. 
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services will likely impair the current Hospice providers' 

ability to meet the need for Hospice services on Oahu.

36. The Agency finds that an additional Hospice provider is 

necessary to ensure that the need for Hospice services will 

be met. 

37. The Agency finds that there is a need for the Proposal.

38. The Agency finds that the need and accessibility 

criteria have been met. 

. . . .

The applicant has met the requisite burden of proof 

and has shown by a preponderance of the evidence that the 

Proposal meets the criteria established in Section 11-186-

15, HAR. 

Accordingly, the Agency hereby determines that, 

pursuant to Chapter 323D-43(b), HRS:

(1) There is a public need for this service; and

(2) The cost of the service will not be 

unreasonable in light of the benefits it will 

provide and its impact on health care costs.

 An appellate court must determine "whether the circuit 

court was right or wrong in its decision by applying the 

standards set forth in HRS § 91-14(g)11 to the agency's 

decision." North Shore, 150 Hawai‘i at 502-03, 506 P.3d at 166-

67 (footnote added) (citation omitted). We review the record of 

an agency's decision to determine whether, inter alia, the 

agency's findings are "[c]learly erroneous in view of the 

11 Here, even though no contested case hearing was held, the denial 

of the reconsideration hearing is reviewed as the appealable "final decision 

and order" under HRS § 91-14, which provides for "[j]udicial review of 

contested cases." See Kaleikini v. Thielen, 124 Hawai‘i 1, 26, 237 P.3d 1067, 

1092 (2010) (holding that the denial of a request for a contested case 

hearing "constituted a 'final decision and order'" qualifying for judicial 

review under Chapter 91). HRS § 323D-48(a) (2010) provides for "[j]udicial 

review of state agency decisions," and states that: "[a]ny person adversely 

affected by a final decision of the [Agency] with respect to a certificate of 

need . . . may appeal in the manner provided by chapter 91 to the circuit 

court . . . ." A "decision on the merits" on a Certificate of Need 

application "shall become final after there is an opportunity for any person 

to request a public hearing for reconsideration . . . ." HAR § 11-186-70(c).
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reliable, probative, and substantial evidence on the whole 

record[.]" Id. (quoting HRS § 91-14(g)(5)). Appellate review 

on a secondary appeal "is further qualified by the principle 

that the agency's decision carries a presumption of validity and 

appellant has the heavy burden of making a convincing showing 

that the decision is invalid." Id. at 503, 506 P.3d at 167 

(cleaned up). "Courts review agency conclusions on mixed 

questions of law and fact under the clear error standard." Id. 

[A] mixed determination of law and fact is clearly 

erroneous when (1) the record lacks substantial evidence to 

support the finding or determination, or (2) despite 

substantial evidence to support the finding or 

determination, the appellate court is left with the 

definite and firm conviction that a mistake has been made. 

Id. at 503, 506 P.3d at 167 (citation omitted). 

 Here, the Agency detailed its findings necessary to 

support its mixed factual and legal conclusion that the need 

criterion was met by the applicable preponderance of the 

evidence standard of proof. This conclusion was not clear 

error. See id. Islands Hospice does not point to any statute, 

rule, or any language in the State Plan that requires the Agency 

to base its decision on "actual utilization data" or "a need 

methodology that is reliable, probative, and substantial[.]" 

This argument goes to the weight of the evidence and Islands 

Hospice's disagreement with how the Agency resolved conflicts in 

testimony and submissions, which we do not second-guess on 

appeal. See Sierra Club v. D.R. Horton-Schuler Homes, LLC, 

136 Hawai‘i 505, 522, 364 P.3d 213, 230 (2015) ("A court 

reviewing an agency's decision cannot 'consider the weight of 

the evidence to ascertain whether it weighs in favor of the 

administrative findings, or review the agency's finding of fact 

by passing upon the credibility of witnesses or conflicts in 

testimony, especially the finding of an expert agency in dealing 
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with a specialized field.'") (citation omitted). Regarding the 

State Plan, HRS § 323D-43 requires the Agency's decision on 

Certificate of Need to "be consistent" with the State Plan. 

Whether the Agency determined the need criterion in a manner 

"consistent" with the State Plan is a mixed question of fact and 

law for which the Agency must be accorded deference, given the 

Agency's "expertise and experience in the particular field[.]" 

See Dole Haw. Div.-Castle & Cooke, Inc. v. Ramil, 71 Haw. 419, 

424, 794 P.2d 1115, 1118 (1990) ("Where both mixed questions of 

fact and law are presented, deference will be given to the 

agency's expertise and experience in the particular field and 

the court should not substitute its own judgment for that of the 

agency.") (citation omitted). 

 We conclude that the Agency's mixed determination of 

law and fact that Malama Ola's Certificate of Need application 

met the "Need and Accessibility" criterion was supported by 

substantial evidence and was not clear error. See North Shore, 

150 Hawai‘i at 503, 506 P.3d at 167. 

 (4) Islands Hospice argues that the December 22, 2017 

Denial of Reconsideration was clearly erroneous because there 

was good cause for reconsideration in light of "significant 

relevant information" that the Agency had not previously 

considered, i.e. a December 8, 2017 study done by Simione 

Healthcare Consultants, LLC (Simione Consultants). This 

argument is unpersuasive. 

 Here, the record reflects that the Reconsideration 

Committee considered the "written requests for reconsideration, 

the written testimony, exhibits, attachments and the 

supplementary material submitted by the persons who made the 

requests, and the oral testifiers at the good cause meeting." 

These submissions were from four healthcare entities, including 
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Islands Hospice and Simione Consultants. The Reconsideration 

Committee concluded, following a December 8, 2017 public meeting 

on the four entities' requests for reconsideration, that there 

was no "good cause" shown under HRS § 323D-47, warranting a 

public hearing for reconsideration. The Reconsideration 

Committee's determination that "there was no significant, 

relevant information presented, not previously considered" by 

the Agency to constitute "good cause" under HRS § 323D-47, is a 

mixed question of fact and law, which must be accorded 

deference, and was not clear error. See Dole Haw. Div.-Castle & 

Cooke, 71 Haw. at 424, 794 P.2d at 1118. 

 We conclude that Islands Hospice's contentions on 

appeal are without merit, and the Circuit Court did not err in 

affirming the Agency's Decision. See North Shore, 150 Hawai‘i at 

502-03, 506 P.3d at 166-67. 

 For the foregoing reasons, we affirm the July 23, 2018 

"Order; Notice of Entry" and the September 21, 2018 "Final 

Judgment," both filed and entered in the Circuit Court of the 

First Circuit. 

 DATED: Honolulu, Hawai‘i, June 20, 2024. 

On the briefs:

Claire Wong Black 

for Appellant-Appellant 

ISLANDS HOSPICE, INC. 

Regan M. Iwao 

for Appellee-Appellee 

MALAMA OLA HEALTH SERVICES, 

LLC 

Angela A. Tokuda 

Deputy Attorney General 

for Appellee-Appellee 

STATE HEALTH PLANNING & 

DEVELOPMENT AGENCY

/s/ Karen T. Nakasone 

Presiding Judge 

/s/ Sonja M.P. McCullen 

Associate Judge 

/s/ James S. Kawashima 

Circuit Court Judge