Opinion ID: 3040705
Heading Depth: 2
Heading Rank: 3

Heading: plaintiffs’ standing to challenge the

Text: DHHL/HHC LEASES Plaintiffs claim standing to challenge the DHHL/HHC leases as land trust beneficiaries, and as state taxpayers. We find that neither theory confers standing to challenge the lease requirements or the appropriation of state revenue in support thereof. The district properly dismissed all claims against the DHHL/HHC and the United States. A. Plaintiffs’ Standing as Land Trust Beneficiaries Plaintiffs challenge the public lands trust administered by DHHL/HHC because it prefers native Hawaiians in the lease eligibility criteria for the 200,000 acres set aside in the HHCA and incorporated into the Hawaii Constitution through the Admission Act. The Plaintiffs argue that as members of the class of “native Hawaiians and general public,” HAW. CONST. art. XII, § 4, they are trust beneficiaries, and may sue the trustee when the trustee’s actions violate the law. See RESTATEMENT (SECOND) OF TRUSTS §§ 166, 214. Plaintiffs allege that the trustees—including DHHL/HHC and the United States—have enforced the provisions of the trust in violation of the Fifth and Fourteenth Amendments.
Plaintiffs argue that the trust obligations of the United States arise through two acts, the Newlands Resolution and the Admission Act. Plaintiffs claim the trust was first established in 1898 by the Newlands Resolution with the United States as trustee. Congress, according to Plaintiffs, then violated its duties as trustee by discriminating on the basis of race when it enacted the HHCA in 1921 and again in the 1588 ARAKAKI v. LINGLE Admission Act when it required Hawaii to incorporate the HHCA into its Constitution. Alternatively, Plaintiffs argue that the United States became a trustee as a result of the Admission Act.1 The history of the land trust does not support either of Plaintiffs’ theories. The United States is not currently a trustee of the lands in question by virtue of either the Newlands Resolution or the Admission Act. The Newlands Resolution recited that the Government of the Republic of Hawaii ceded “the absolute fee and ownership of all public Government, or Crown lands.” Newlands Resolution, 30 Stat. 750 (1898). It further provided that existing U.S. laws regarding public lands would not apply to Hawaiian lands, but that Congress “shall enact special laws for their management and disposition: Provided, That all revenue from or proceeds of the same . . . shall be used solely for the benefit of the inhabitants of the Hawaiian Islands for educational and other public purposes.” Id. Although this passage did not specifically use the word “trust,” the Attorney General of the United States subsequently interpreted it “to subject the public lands in Hawaii to a special trust.” Hawaii — Public Lands, 22 Op. Att’y Gen. 574, 576 (1899). Assuming, arguendo, that the Attorney General was right to construe the Newlands Resolution as establishing a trust, and assuming further that the United States became a trustee, the United States’ status as trustee was expressly subject to future revision. The Resolution specifically provides that “the United States shall enact special laws for [the] management 1 The district court concluded that Plaintiffs had waived the Newlands Resolution theory, and addressed only the Admission Act theory. Arakaki II, 299 F. Supp. 2d at 1101. Plaintiffs deny the waiver. However, this court can affirm the district court’s dismissal on any ground supported by the record, even if the district court did not rely on the ground. See, e.g., Livid Holdings Ltd. v. Salomon Smith Barney, Inc., 416 F.3d 940, 950 (9th Cir. 2005). In the interest of being thorough, we therefore address both theories. ARAKAKI v. LINGLE 1589 and disposition” of public lands. The Attorney General construed this provision as “vest[ing] in Congress the exclusive right, by special enactment, to provide for the disposition of public lands in Hawaii.” Id. The Newlands Resolution thus contemplated that Congress would enact subsequent rules to govern the ceded lands. [1] Congress enacted such rules in the HHCA and the Admission Act. Any trust obligation the United States assumed in the Newlands Resolution for the lands at issue here was extinguished by Congress when it created the DHHL/HHC in the HHCA and granted it control of defined “available lands.” Act of July 9, 1921, ch. 42, §§ 202, 204, and 207; see id. § 204(a) (“Upon the passage of this Act, all available lands shall immediately assume the status of Hawaiian home lands and be under the control of the department to be used and disposed of in accordance with the provisions of this Act.”). Any lingering doubt over the United States’ role as trustee was eliminated entirely in the Admission Act when the United States “grant[ed] to the State of Hawaii, effective upon its admission in the Union, the United States’ title to all the public lands and other public property, and to all lands defined as ‘available lands’ by section 203 of the Hawaiian Homes Commission Act . . . title which is held by the United States immediately prior to its admission into the Union.” Pub. L. No. 86-3, § 5(b), 73 Stat. 4. [2] Our discussion here also resolves Plaintiffs’ claim that the Admission Act established the United States’ obligations as a trustee. The Admission Act unambiguously requires that land be held in public trust, but by the State of Hawaii, not the United States. Nothing in the Admission Act suggests that the United States would serve as a co-trustee with the State. Nor does the fact that the United States must consent to changes in the qualifications of lessees under the trust make the United States a co-trustee. See Pub. L. No. 86-3, § 4, 73 Stat. 4. Congress might have made the United States a co-trustee; instead it reserved to the United States the right to bring suit for 1590 ARAKAKI v. LINGLE breach of trust, id. § 5(f), a provision at odds with the suggestion that the United States remains a trustee. We conclude, as we noted in Keaukaha-Penaewa Cmty. Ass’n v. Hawaiian Homes Comm’n, 588 F.2d 1216, 1224 n.7 (9th Cir. 1978), that “[t]he United States has only a somewhat tangential supervisory role of the Admission Act, rather than the role of trustee.”
Although the United States cannot be sued on Plaintiffs’ trust beneficiary theory, Plaintiffs nevertheless argue that they may at least sue the state defendants on the same theory. Plaintiffs point to several cases in which we have held that native Hawaiians, as trust beneficiaries, could bring suit under 42 U.S.C. § 1983 against the State to enforce the terms of the trust. E.g., Price v. Akaka, 928 F.2d 824 (9th Cir. 1990); Keaukaha-Panaewa Cmty. Ass’n v. Hawaiian Homes Comm’n, 739 F.2d 1467 (9th Cir. 1984); see also Price v. Akaka, 3 F.3d 1220, 1223-25 (9th Cir. 1993). Those cases involved claims that the state was improperly administering the trust and sought to enforce the trust’s terms. We believe that this argument is disposed of easily. Those cases differ from the present challenge in a fundamental way: although those previous § 1983 cases have involved suits to enforce the express terms of the trust, this suit, by contrast, asks the court to prohibit the enforcement of a trust provision. That is, Plaintiffs now raise a § 1983 claim that is unique in that it does not seek to enforce the substantive terms of the trust, but instead challenges at least one of those terms as constitutionally unenforceable. [3] We have recently held that in any challenge to the enforceability of the lease eligibility requirements, the United States is an indispensable party. In Carroll v. Nakatani, 342 F.3d 934 (9th Cir. 2003), a non-native Hawaiian citizen challenged the homestead lease program administered by DHHL/ ARAKAKI v. LINGLE 1591 HHC. The plaintiff sued the relevant state actors, but failed to sue the United States. We held that Section 4 of the Admissions Act “expressly reserves to the United States that no changes in the qualifications of the lessees may be made without its consent.” Carroll, 342 F.3d at 944. We reasoned that because the qualifications for the DHHL/HHC leases cannot be modified without the United States’ approval, the United States is an indispensable party to any lawsuit challenging the DHHL/HHC leases, and the Plaintiff’s failure to sue the United States meant that his injury was not redressable. Id. at 944. [4] Here, unlike in Carroll, Plaintiffs properly named the United States as a party. Carroll’s logic nonetheless applies. Plaintiffs lack standing to sue the United States, but the United States is an indispensable party to any challenge to the lease eligibility requirements. Plaintiffs therefore cannot maintain their challenge to the lease eligibility requirements against the State. Accordingly, the district court properly dismissed the Plaintiffs’ trust beneficiary claim against the state defendants. B. Plaintiffs’ Standing As State Taxpayers Plaintiffs also challenge the DHHL/HHC lease eligibility programs in their capacity as state taxpayers. The question is whether our decision in Carroll bars Plaintiffs’ equal protection challenge in their capacity as taxpayers, just as it barred Plaintiffs’ suit in their capacity as trust beneficiaries. In particular, we must decide whether Plaintiffs have standing to challenge Hawaii’s spending of tax revenues on the lease program.2 This is a more complicated question. 2 Plaintiffs do not limit their challenge to the expenditure of state tax revenues; instead, they challenge all state spending on the lease program, whether funded by taxes, bonds, the proceeds of a settlement, or other non-tax revenues. The district court held that, if Plaintiffs could bring their equal protection claims against DHHL/HHC based on their taxpayer status 1592 ARAKAKI v. LINGLE The standing doctrine, like other Article III doctrines concerning justiciability, ensures that a plaintiff’s claims arise in a “concrete factual context” appropriate to judicial resolution. Valley Forge Christian Coll. v. Ams. United For Separation of Church & State, Inc., 454 U.S. 464, 472 (1982). Standing ensures that, no matter the academic merits of the claim, the suit has been brought by a proper party. The “ ‘irreducible constitutional minimum of standing’ ” requires that a plaintiff allege that he has suffered concrete injury, that there is a causal connection between his injury and the conduct complained of, and that the injury will likely be redressed by a favorable decision. United States v. Hays, 515 U.S. 737, 74243 (1995) (quoting Lujan v. Defenders of Wildlife, 504 U.S. 555, 560-61 (1992)). Plaintiffs have alleged that Hawaii has supported the lease program through tax revenues, a point that Hawaii does not dispute. Arakaki II, 299 F. Supp. 2d at 1098. Hawaii’s taxing and spending in support of the lease program is not mandated by the Admission Act or any other federal law. The Admission Act requires Hawaii to adopt the HHCA and forbids Hawaii to change the lease eligibility requirement without the consent of the United States; but neither the Admission Act nor the HHCA, as incorporated by the Hawaii Constitution, mandates the expenditure of state funds, much less the expenditure of state tax revenues. Pub. L. No. 86-3, § 4, 73 Stat. 4. Section 5(f) of the Admission Act does provide that proceeds from the sale or other disposition of the lands shall be paid at all, they could challenge only those avenues of state funding that actually derived from taxes, rather than from other sources. Because we conclude, like the district court, that Carroll precludes Plaintiffs’ challenge to Hawaii’s spending on the lease program regardless of the source of the state’s funds, we need not decide here whether the district court correctly limited the scope of Plaintiffs’ state taxpayer challenges. We limit our discussion to Plaintiffs’ challenge to Hawaii’s spending of tax revenues on the lease program and address the general question regarding the scope of standing as a state taxpayer in Part IV.A.3, infra. ARAKAKI v. LINGLE 1593 into the trust for the identified purposes, but nothing suggests, much less requires, that the State of Hawaii expend tax revenues to support the lease program. Any tax revenues Hawaii has appropriated to DHHL/HHC, then, resulted from decisions by the Hawaii Legislature. Plaintiffs’ taxpayer-based claims might be construed as a limited challenge to the lease program: Plaintiffs challenge the lease program to the extent that Hawaii has—independent of any federal obligation, including the Admission Act— engaged in taxing and spending in support of the DHHL/HHC program. Under this theory, unlike their trust beneficiary theory, Plaintiffs would not challenge the lease eligibility requirements directly, nor would they implicate any substantial rights belonging to the United States. Thus, Plaintiffs might argue, even if they cannot seek to enjoin the native Hawaiians-only rule directly, they can seek to enjoin further state funding of a provision that allegedly violates the Equal Protection Clause. Plaintiffs’ remedy, presumably, would be an injunction against spending state tax revenues, but not an order directing changes in the lease criteria. [5] Plaintiffs’ theory, though game, ultimately fails under Carroll. The only ground Plaintiffs have alleged for enjoining the state from spending is that the spending is for purposes prohibited by the Equal Protection Clause. Any remedy that Plaintiffs seek—for example, an injunction against expenditure of tax revenues for the lease program—demands that the district court decide whether the lease eligibility criteria are constitutional. The lease criteria are found in the HHCA which is adopted by Article XII of the Hawaii Constitution. We held in Carroll, however, that “Article XII of the Hawaiian Constitution cannot be declared unconstitutional without holding [Section 4] of the Admissions Act unconstitutional.” Carroll, 342 F.3d at 944. Our decision in Carroll effectively holds that any challenge to Article XII is a challenge to Section 4 of the Admission Act, and no challenge to the Admis1594 ARAKAKI v. LINGLE sion Act may proceed without the presence of the United States as a defendant. [6] As state taxpayers, Plaintiffs have no basis for suing the United States. They claim no status that would distinguish them from any number of other persons who also do not qualify for the Hawaiian Home Lands leases. The Court has “repeatedly refused to recognize a generalized grievance against allegedly illegal government conduct as sufficient for standing.” Hays, 515 U.S. 743. Moreover, “[t]he rule against generalized grievances applies with as much force in the equal protection context as in any other.” Id.; see Allen v. Wright, 468 U.S. 737, 751 (1984). Federal taxpayer standing which, notably, Plaintiffs do not assert, is simply one instance of the assertion of a generalized grievance. See Frothingham v. Mellon, 262 U.S. 447, 487-88 (1923) (“The administration of any statute, likely to produce additional taxation to be imposed upon a vast number of taxpayers, the extent of whose several liability is indefinite and constantly changing, is essentially a matter of public and not of individual concern.”). [7] We hold that Plaintiffs cannot avoid the implications of Carroll by limiting their claims to state spending in support of the lease program and then alleging their state taxpayer status. Even if Plaintiffs were to have standing as state taxpayers —a possibility we address in Part IV and hold is foreclosed by the Supreme Court’s decision in DaimlerChrysler—that status cannot supply standing against the United States. See, e.g., Frothingham, 262 U.S. at 486-87 (citing Crampton v. Zabriskie, 101 U.S. 601, 609 (1880)); W. Mining Council v. Watt, 643 F.2d 618, 631 (9th Cir. 1981). Accordingly, we conclude that Plaintiffs lack standing to sue the United States, and that the United States remains an indispensable party to any challenge to the DHHL/HHC lease eligibility criteria. We affirm the district court’s dismissal of all claims against the United States and DHHL/HHC. ARAKAKI v. LINGLE 1595