Opinion ID: 6491122
Heading Depth: 1
Heading Rank: 1

Heading: facts

Text: On November 29, 1975, the County of Kaua'i (the County) approved a special management area (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 County then issued SMA Minor Permit SMA (M)-87-27 ■ to the State of Hawaii (State) Department of Transportation (DOT). SMA Minor Permit SMA (M)-87-27 (the DOT Permit) was in effect from 1976 through 1988. The DOT Permit authorized the DOT to issue permits to commercial tour boat operators to conduct their tour activities within the Hanalei SMA during the effective life of the DOT 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 (ie., between 1988 and 1993), tour boat operators were not allowed to conduct their tom- activities in the Hanalei SMA. Tour boat operators were also not allowed to conduct their tours in the Hanalei SMA 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 as the Hanalei Estuary Management Plan (HEMP), setting forth the procedures to be followed in processing SMA permit applications for commercial boating within the Hanalei Estuary. 4 Pursuant to HEMP, the County issued a limited number of permits (SMA permits) to Appellants and other tour boat operators in 1993. 5 In addition to HEMP, the commercial tour boat industry on the north shore of Kaua'i is also regulated by Hawaii Administrative Rules (HAR) chapter 256, entitled “Ocean Recreation Management Rules and Areas” (ORMRA). The specific purpose of ORMRA “is to reduce conflicts among ocean water users, 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 commercial boating licenses (state permits) issued by the State Department of Land and Natural Resources (DLNR). The commercial 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, 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 that 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 so. Consequently, Appellants claim that these tour boat operators “gained substantial income and name recognition in the business, ... established] and capitalize^] on economies of scale in light of the lack of competition, and made lasting business relations with the various companies engaged in tour boat promotions[.]” 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 SMA 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 (ie., disregarding the Sunday and holiday prohibition). As such, Appellants allege that these tour boat operators “gained significant and unfair competition advantages over [Appellants,] who were acting legally and pursuant to their Hanalei SMA permits.... ” Moreover, Appellants 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.

On May 8, 1997, Appellants filed a complaint against Napali-Kauai Boat Charters, Inc., Paskal, other tour boat operators, 6 and numerous tour boat promoters. 7 Therein, Appellants alleged the following claims against the tour boat operators: (1) violation of HRS § 480-2 (1993) 8 (relating to unfair methods of competition); (2) common law unfair competition; and (3) unjust enriehment/accounting. Appellants alleged the following claims against the tour boat promoters: (1) 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 sets 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. [pjermit.” 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.
On March 30, 1998, Appellants filed an ex parte motion to certify fourteen additional individuals and/or companies as defendants. 9 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 claims and parties[,] and to add certain factual allegations against [the defendants.” One of the technical changes proposed by Appellants was to delete the parties that had been properly dismissed to date from the instant action. 10 In addition, Appellants sought to add the following parties as defendants: (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 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 commercial activity. See swpra note 3. Specifically, Appellants alleged that Shee-han, Sr. “allowed non-permitted boat tour operators to launch their vessels 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 Appellants’ motion for leave to file a first amended complaint, and, consequently, on the same day, Appellants filed the first amended complaint.
On September 13, 1999, Swain, Catamaran Kahanu, and Swain Limited Partnership dba Hawaiian Style Tours and Activities [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 as this court’s recent decision in Robert’s Hawai‘i School Bus, Inc. v. Laupahoehoe Transportation Co., 91 Hawai'i 224, 982 P.2d 853 (1999), held that there is no private claim for relief under HRS § 480-13 (1993) 11 for unfair methods of competition in violation of HRS § 480-2. On September 20, 1999, Appellants moved to file a second amended complaint. Therein, Appellants sought to amend the first amended complaint “to delete those parties that have been dismissed, [12 ] to modify the legal theories asserted!,] ... to delete three claims of relief!,] and to join two claims of relief against !d]efendants.” Appellants sought to delete the following three claims: (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 against 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 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; 13 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 dismissed: (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 (a) violation of HRS § 480-2 and (b) unfair methods of competition against tour boat promoters. 14 The order also granted Swain defendants’ motion for partial summary judgment “to the extent that such motion is consistent with [Sheehan, Jr. and Hanalei Land Company, Ltd.’s] [m]otion for [p]artial [s]ummary [j]udgment[.]” On November 12, 1999, the circuit court entered an order granting in part and denying in part Appellants’ motion for leave to file 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: CLAIM AGAINST Count I common law unfair competition tom boat operators Count II aiding and abetting common law unfair competition tour boat promoter's Count III interference with prospective business advantage tour boat operators and promoters Count IV conspiracy (with respect to (1) common law unfair competition and (2) interference with prospective business advantage) tour boat operators and promoters Count V unjust enrichment / accounting tour boat operators Count VI injunctive relief tour boat operators and promoters With respect to their common law unfair competition claim (Count I), Appellants alleged in their second amended complaint: Defendants’, ie., tour boat operators’] conduct as alleged herein, including but not limited to, their conduct of commercial boat tour operations in and out of the Hanalei SMA without a Hanalei SMA [pjermit from and after September 30, 1988 and/or for conduct of tour boat activities within Na Pali 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 business advantage claim (Count III), Appellants alleged: Defendant[s’, ie., tour boat operators’] conduct as alleged herein, including but not limited to, their conduct of commercial boat tour operations in and out of the Hanalei SMA without a Hanalei SMA [p]ermit from and after September 30, 1988 and/or for conduct of tour boat activities within Na Pali [c]oast ocean waters not in compliance with applicable state law or state permit requirements constitutes tortious interference with prospective business advantage. [[Image here]] Defendant[s’, ie., tour boat promoters’] conduct of referring passengers and providing material assistance to [d]efendant[s, ie., “unpermitted” tour boat operators] who were engaged in common law unfair competition through their promotion, advertising and referral activities on behalf of [defendant [“unpermitted” tour boat operators], and/or through allowing their property to be used for such purposes constitutes tortious interference with prospective business advantage. Defendants’, ie., tour boat promoters’] further conduct of failing or refusing to promote the permitted tour activities of [Appellants] on par with their promotions of [defendant [u]npermitted [b]oat [t]our [o]perators and/or failing or refusing to inform customers that certain boat tour operators were unpermitted and the existence of permitted tour boats constitutes tortious interference with prospective business advantage. Defendants [Sheehan, Sr. defendants, Sheehan, Jr., and Hanalei Land Company, Ltd.] have acted in violation of Sheehan, Sr. and Patricia Sheehan’s SMA permit and/or without required permits and/or otherwise in violation of applicable law to [Appellants’] economic detriment by allowing unpermitted boat tour operators to use its facility to conduct commercial activity without the required Hanalei SMA permits 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 alleged: As a result of the conduct as alleged herein, [defendants [tour boat operators] have been unjustly enriched. Defendant Unpermitted 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, regulations, ordinances, laws and court orders while [Appellants] conducted their activities in compliance with said rules and regulations. The result has been that [Appellants] conferred a benefit upon the Unpermitted Boat Tour Operators by reducing the competition for tour boat operations in the Hanalei SMA and allowing [defendant Unpermitted Boat Tour Operators to continue in business.
On March 6, 2000, Napali Appellees moved for partial summary 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 claims are wholly dependent on Napali 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), 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 common 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’ motion for partial summary judgment. Cliffs defendants further moved that the circuit court summarily dismiss Counts II (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 I (common law unfair competition) and Appellants lacked standing to sue Napali Appellees for common law unfair competition, Counts II 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’ claims of common law unfair competition were dismissed inasmuch as HRS § 480-2 “is the exclusive remedy.” 15 The circuit court took the Appellants’ 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 Appellees’ 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 common law unfair competition claim. The circuit court deferred on ruling on Count III (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. On July 26, 2000, the circuit court entered a supplemental order, dismissing Count II (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 also 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: 2. The [cjourt finds that the test set forth by the United States Supreme Court in Cort v. Ash, 422 U.S. 66, 95 S.Ct. 2080, 45 L.Ed.2d 26 (1975) controls in this case, and that [Appellants] do not have a private right of action to bring tort claims based on alleged violations of permitting regulations and environmental statutes governing the Hanalei [SMA] and the Napali coastal region. 3. In applying the Cort v. Ash test to this case, the [c]ourt specifically finds as follows: (i) The various permitting regulations and environmental statutes upon which [Appellants] base their tort claims were not enacted for the benefit of commercial boaters, but for the general public. (ii) There is no indication of a legislative intent to create private remedies for [Appellants] within these regulations and statutes, because the primary concerns behind the enactment of these laws were public enjoyment of coastal regions and environmental protection. (iii) Specifically, HRS § 205A-6 [16] was enacted to provide the general public with a cause of action when the objectives, rules, and regulations governing [SMAs] are violated. In this regard, the Court finds as compelling the 1977 Senate Committee Report 779, relating to the purpose behind HRS [chapter 205A. (iv) Allowing [Appellants] to pursue a claim of interference with prospective business advantage based on alleged violations of the objectives, rules, and regulations governing the Hanalei [SMA] would not advance the underlying purpose and legislative scheme of HRS [c]hapter 205A. Consequently, Appellants’ surviving claims were Counts V (unjust enrichmenVaccount-ing against tom’ boat operators) and VI (in-junctive relief against tour boat operators and promoters). 17
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) tor-tious interference with prospective business advantage. Inasmuch as the circuit court had earlier dismissed Appellants’ claims of common law unfair competition and interference with prospective business advantage, Cliffs defendants maintained that Appellants were thus 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 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 business advantage had been dismissed, “there can be no claims for a remedy of either injunctive relief or its 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 judgment filed by Cliffs defendants and Swain defendants. With respect to Appellants’ claim for injunctive relief, the circuit court stated: [U]nder the law as the [cjourt sees it, [Appellants] must show a clearly ascertainable right in order to have a standing to seek equitable—the equitable relief of injunction. [Appellants] must also show that their claim for injunctive relief does not depend on the existence of a private remedy- Under the circumstances, the [c]ourt does not feel that [Appellants] can do this. [Appellants’] main argument no matter what [Appellants] say[ ] is that [Appellants] got hurt because defendants violated [HRS c]hapter 205A and that defendants^] violations—the violations of the wrongful conduct regardless of what [Appellants] say[ ], [Appellants] cannot use [HRS c]hapter 205A as the basis for injunctive relief or equitable relief under the circumstances. They do not have a private right of action under [HRS c]hapter 205A. Under the circumstances, with reference to the injunction, the [c]ourt will grant the motion for partial summary judgment. The circuit court took under advisement Appellants’ remaining claim of unjust enrichment/accounting. 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 Appellants’ claim for in-junctive relief as to all defendants. On February 21, 2001, the circuit court entered an order granting Swain defendants’ motion for partial summary judgment with respect to Count V (unjust enrichment/accounting), dismissing Appellants’ claim for unjust enrichment/accounting as to all defendants. The circuit court further found “that the remedy of unjust enrichment is not practical and would not serve the public good.”
On November 7, 2003, the parties filed a conditional stipulation of dismissal as to all claims by Appellants and all counterclaims by defendants. 18 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. On December 17, 2003, final judgment was entered in favor of, inter alia, Napali Appel-lees, Sheehan Appellees, and Capt. Zodiac. Appellants timely appealed on January 14, 2004.