Opinion ID: 151537
Heading Depth: 1
Heading Rank: 4

Heading: Hawaii's Alternative Argument in Support of Summary Judgment

Text: We also do not reach the State of Hawaii's alternative argument in support of summary judgment, except insofar as it raises a jurisdictional issue. To the extent Hawaii contends that plaintiffs lack standing under its theory of the case, we disagree. Hawaii points out that the state spends far more each year on public educationone of the enumerated trust purposesthan it receives from the trust, and argues that this deprives any trust beneficiary of standing to bring a claim for breach of trust for lack of injury. In short, Hawaii contends that no beneficiary of the § 5(f) trust can claim to be injured so long as the federally mandated purposes collectively are receiving more from the state than the § 5(f) trust produces. This argument fails because, as we have previously held, the § 5(f) obligations bind OHA trustees even after funds have been directed to OHA by the state. See Akaka I, 928 F.2d at 827 (So long as § 5(f) trust income remained in the hands of the state, as it did when transferred from the § 5(f) corpus to the OHA corpus, the § 5(f) obligations applied.); cf. Akaka II, 3 F.3d at 1222 ([T]he issue here is whether the [OHA] trustees breached their fiduciary duties under the Admission Act by expending trust funds for purposes other than those set out in § 5(f).). How Hawaii spends other, nontrust money on trust purposes is irrelevant. Although § 5(f) gives Hawaii considerable flexibility to choose the manner in which it shall manage the trust, it cannot ignore the fundamental principle of trust law that a trustee's obligations (however broad or narrow they may be) apply with respect to the particular property or money in the corpus. Those obligations generally cannot be discharged through the use of property or money outside the corpus. Cf. Akaka I, 928 F.2d at 826 (Because the OHA share of `public trust' income at issue in this case derives directly from the § 5(b) lands, § 5(f)'s limitation on uses applies to that income.  (emphasis added)); Restatement (Third) of Trusts § 2 (Definition of Trust) (A trust, as the term is used in this Restatement ... is a fiduciary relationship with respect to property ... subjecting the person who holds title to the property to duties to deal with it for the benefit of charity or for one or more persons, at least one of whom is not the sole trustee. (emphasis added)).
We hold that, although § 5(f) permits Hawaii to impose further rules and restrictions on management of the § 5(f) trust, it does not require the state and its agents to abide by those rules and restrictions as a matter of federal law. Those alleged violations are actionable under state law, if at all. We therefore affirm the district court's summary judgment in favor of the OHA trustees. The trustees have established as a matter of law that each of the challenged expenditures constitutes a use for one or more of the [§ 5(f)] purposes and that is sufficient to defeat plaintiffs' § 1983 claim under federal law for breach of the § 5(f) trust. AFFIRMED.