Opinion ID: 1179958
Heading Depth: 2
Heading Rank: 2

Heading: Other Breach of Trust Claims

Text: In addition to its § 1983 claims, PDF asserts breach of trust claims under Hawaii law. PDF correctly argues that the State of Hawaii has acknowledged its fiduciary duties and obligations as trustee of the public lands trust in article XII, § 4 of the Hawaii Constitution. Article XVI, § 7 of the constitution mandates that the § 5(f) trust provisions shall be complied with by appropriate legislation. The decision of this court will not render these provisions meaningless and will not leave the people of Hawaii without the means to hold their government to these promises. Therefore, we hold that PDF has a right to bring suit under the Hawaii Constitution to prospectively enjoin the State from violating the terms of the ceded lands trust. We further hold that PDF is not seeking to prospectively enjoin a constitutional violation in this case, but would have us turn back the clock and examine actions already taken by the State. The doctrine of sovereign immunity deters judges from this course in state as well as federal court.
The State argues that, because the Ninth Circuit ruled that the Admission Act creates no private implied right of action, there can be no private right of action to enforce the terms of the § 5(f) trust under Hawaii law. See Keaukaha I, 588 F.2d 1216 (1978). We disagree. We have held, in a variety of contexts, that this court is not precluded from finding that the Hawaii Constitution affords greater protection than required by similar federal constitutional or statutory provisions. See, e.g., State v. Kam, 69 Haw. 483, 748 P.2d 372 (1988); Hawaii Housing Authority v. Lyman, 68 Haw. 55, 704 P.2d 888 (1985); State v. Tanaka, 67 Haw. 658, 701 P.2d 1274 (1985); and State v. Russo, 67 Haw. 126, 681 P.2d 553 (1984), appeal after remand, 69 Haw. 72, 734 P.2d 156 (1987). First, we review the grounds for the Ninth Circuit's ruling in Keaukaha I. In reaching its conclusion that the Admission Act does not imply a private cause of action, the court analyzed the United States Supreme Court's interpretation of the Rail Passenger Service Act which permits suits by the United States Attorney General, or in some cases, railroad employees. Keaukaha I, 588 F.2d at 1220-21 (citing, inter alia, National Railroad Passenger Corp. v. National Ass'n of Railroad Passengers, 414 U.S. 453, 94 S.Ct. 690, 38 L.Ed.2d 646 (1974)). The Supreme Court held that because the Rail Act creates only a public cause of action and a narrow private cause of action, the legislature intended these to provide the exclusive remedies. Id. This presumption of an exclusive remedy, known as the expressio unius principle, yields to both legislative intent and the effectuation of the purposes of a statute. Id. at 1221 (citations omitted). The Ninth Circuit also applied the four factors articulated in Cort v. Ash, 422 U.S. 66, 95 S.Ct. 2080, 45 L.Ed.2d 26 (1975), to the Admission Act. The first element, that plaintiff is a member of the `class for whose especial benefit the statute was enacted,' was met. Id. at 1223. The second element, an indication of explicit or implicit legislative intent, was found to be lacking  the court applied the expressio unius presumption [16] and noted the unusual use of a state's admission act to create a right to sue. Id. at 1223. The third element, consistency with the underlying statutory scheme, was thought to be a close question, but was found not to support a private cause of action because the court saw no federal purpose to be served by reading a private cause of action into the Admission Act. Id. at 1224. The fourth element, whether the cause of action is one traditionally relegated to the States, in an area basically the concern of the States, was easily concluded to militate against implying a private right to sue. Id. at 1222, 1224. As we noted earlier, the court found that action to be a matter of state concern and held it to be most appropriate for Hawaii's laws and judicial system to deal with it. Id. at 1224. We are of the view that, while these reasons were compelling in the context of the enforceability of a federal statute, they do not support a similar finding with respect to the enforcement of article XII, § 4 of the Hawaii Constitution. Cf. Huihui v. Shimoda, 64 Haw. 527, 531, 644 P.2d 968, 971 (1982) ([I]t is our obligation to interpret and enforce the state constitution as the highest court of this sovereign state `not in total disregard of federal interpretations..., but with reference to the wisdom of adopting these interpretations for our state.'). Article XII, § 4 was added to the Hawaii Constitution to expressly recognize the trust purposes and trust beneficiaries of the § 5(f) trust, clarifying that the State's trust obligations extend beyond the Hawaiian Homes Land Trust. See Stand.Comm.Rep. No. 59, Constitutional Convention of 1978, 2-3. And, despite the Ninth Circuit's findings that no purpose would be served by allowing private enforcement of the ceded land trust in federal court, we find that protecting the res of the public lands trust, thereby enforcing the mandates of our constitution, is appropriate in our state courts. This consideration undermines the argument that access to an enforcement remedy for breach of trust should be held exclusively by the United States Attorney General. We are also guided by our earlier decisions concerning lands held in public trust. In Kapiolani Park Preservation Society v. City & County of Honolulu, 69 Haw. 569, 751 P.2d 1022 (1989), we held that members of the public, as trust beneficiaries, could sue to prevent the trustee, a government agency, from disposing of trust lands through leases or deeds in contravention of the terms of a charitable trust. [17] In Kapiolani Park, the court found that: (1) a government agency (the City) was the trustee of a public charitable trust; (2) the trustee did not file periodic accountings; (3) the trustee would not seek instructions of the court as to its duties; (4) a genuine controversy existed as to the trustee's power to enter into the lease transaction; and (5) the attorney general, as parens patriae, chose to support the City's actions, abandoning the defense of the possible rights of the public. Id. at 572, 751 P.2d at 1025. Under those circumstances, we held that unless members of the public could bring the matter to the attention of the court, the citizens of this State would be left without protection, or a remedy ... [and] the City, with the concurrence of the attorney general, would be free to dispose, by lease or deed, of all, or part of, the trust comprising Kapiolani Park, as it chose, without the citizens of the City and State having any recourse to the courts. Id. Although the case before us involves the ceded lands trust, rather than a charitable trust, the parallels are unmistakable. [18] Here, we have a situation where the agency charged with the administration of a trust held for the benefit of native Hawaiians and members of the public has purportedly disposed of trust assets in violation of trust provisions and, if we were to adopt the position of the State, no one in the State of Hawaii would have the right to bring the matter before Hawaii's courts. As we said in Kapiolani Park, [s]uch a result is contrary to all principles of equity and shocking to the conscience of the court. Id. at 573, 751 P.2d at 1025. Leaving aside for the moment the question of whether we can now review the State's consummated acts, we are of the firm conviction that our courts must be available to the citizens of Hawaii to avert such a purported breach of public trust. We find that the actions of state officials, acting in their official capacities, should not be invulnerable to constitutional scrutiny. Article XII, § 4 imposes a fiduciary duty on Hawaii's officials to hold ceded lands in accordance with the § 5(f) trust provisions, and the citizens of the state must have a means to mandate compliance. This is not to say, however, that article XII, § 4 creates a waiver of sovereign immunity such that money damages are available. See Figueroa v. State, 61 Haw. 369, 604 P.2d 1198 (1979) (although a constitutional provision establishes enforceable rights or duties, it does not necessarily create a waiver of sovereign immunity). Nevertheless, as discussed in the following section, sovereign immunity may not always provide a defense for state officials when their actions are attacked as being unconstitutional. See, e.g., W.H. Greenwell, Ltd. v. Department of Land and Natural Resources, 50 Haw. 207, 209, 436 P.2d 527 (1968). Thus, we hold that PDF, whose members are beneficiaries of the trust, may bring suit for the limited purpose of enjoining state officials' breach of trust by disposal of trust assets in violation of the Hawaii constitutional and statutory provisions governing the public lands trust.
PDF argues that sovereign immunity is not a bar to suit for injunctive relief when state officials acting in their official capacities act ultra vires of state and federal law. While we agree with this legal proposition, we disagree with PDF's further argument that the Ninth Circuit's rulings on the strictures of the eleventh amendment are not relevant to our own principles of sovereign immunity. On the contrary, the eleventh amendment is the federal constitutional embracement of the common law doctrine of sovereign immunity; [19] it makes the doctrine applicable to the federal courts. See, e.g., Will v. Michigan Dept. of State Police, 491 U.S. 58, 67, 109 S.Ct. 2304, 2309, 105 L.Ed.2d 45 (1989) (citations omitted) (In discussing whether Congress intended to abrogate eleventh amendment immunities in § 1983 actions, the Court stated that members of the 42d Congress were familiar with common-law principles ... [and t]he doctrine of sovereign immunity was a familiar doctrine at common law.); Green v. Mansour, 474 U.S. 64, 68, 106 S.Ct. 423, 425, 88 L.Ed.2d 371 (1985) (citations omitted) (The Eleventh Amendment confirms that `fundamental principle of sovereign immunity limits the grant of judicial authority in Art. III.'). In W.H. Greenwell, Ltd. v. Department of Land and Natural Resources, 50 Haw. 207, 436 P.2d 527 (1968), we discussed Hawaii's sovereign immunity doctrine in a suit to enjoin DLNR's planned release of axis deer on the Big Island, allegedly in violation of the plaintiff's rights under the state and federal constitutions. The court held that: It is the unquestioned rule that the State cannot be sued without its consent or waiver of its immunity in matters involving the enforcement of contracts, treasury liability for tort, and the adjudication of interest [sic] in property which has come unsullied by tort into the bosom of government. ... [However,] sovereign immunity may not be invoked as a defense by state officials who comprise an executive department of government when their action is attacked as being unconstitutional. Id. at 208-09, 436 P.2d at 528 (citations omitted). Nor will sovereign immunity bar suits to enjoin state officials from violating state statutes. See, e.g., Natatorium Preservation Committee v. Edelstein, 55 Haw. 55, 515 P.2d 621 (1973). Subsequent decisions have further illustrated that the sovereign State is immune from suit for money damages, except where there has been a clear relinquishment of immunity and the State has consented to be sued. See Washington v. Fireman's Fund Ins. Co., 68 Haw. 192, 198, 708 P.2d 129, 134 (1985), cert. denied, 476 U.S. 1169, 106 S.Ct. 2890, 90 L.Ed.2d 977 (1986) (Acknowledging its earlier ruling in Greenwell, the court held that sovereign immunity was a bar to plaintiff's action because it does not involve an action seeking only to enjoin state officials from acting unconstitutionally. (citations omitted)); Big Island Small Ranchers Ass'n v. State, 60 Haw. 228, 236, 588 P.2d 430, 436 (1978) (Plaintiffs' chapter 480 damages claims were held to be barred by sovereign immunity, because the legislature has not made Chapter 480 explicitly applicable to the State, and since none of the allegations in the complaint claim that the State has consented to be sued upon this chapter, appellants can claim no relief under this theory.) Makanui v. Department of Educ., 6 Haw.App. 397, 405-07, 721 P.2d 165, 171-72 (1986) (The ICA held that Hawaii had not waived its sovereign immunity from § 1983 damages liability, and those claims against the state and state officials in their official capacities were therefore barred). [20] See also HRS chs. 661, 662, 673 and 674 (waiving the State's sovereign immunity in certain cases). This court has not previously tested the scope of the exception to the sovereign immunity doctrine recognized in Greenwell. We must do so in this case because, on its face, PDF's complaint requests only injunctive and declaratory relief, and not damages, against state officials acting in their official capacities. The Greenwell exception has its genesis in Ex parte Young, 209 U.S. 123, 28 S.Ct. 441, 52 L.Ed. 714 (1908), which first held that the eleventh amendment does not bar a suit to enjoin as unconstitutional a state official's actions. See Greenwell, 50 Haw. at 209, 436 P.2d at 528. Young has been the subject of many subsequent decisions to which we turn for guidance. The rule in Young, which we adopt, makes an important distinction between prospective and retrospective relief. [21] If the relief sought against a state official is prospective in nature, then the relief may be allowed regardless of the state's sovereign immunity. See, e.g., Papasan v. Allain, 478 U.S. 265, 278, 106 S.Ct. 2932, 2940, 92 L.Ed.2d 209 (1985); Green v. Mansour, 474 U.S. 64, 68, 106 S.Ct. 423, 426, 88 L.Ed.2d 371 (1985). This is true even though accompanied by a substantial ancillary effect on the state treasury. Papasan, 478 U.S. at 278, 106 S.Ct. at 2940 (citations omitted). [22] However, relief that is tantamount to an award of damages for a past violation of ... law, even though styled as something else, is barred by sovereign immunity. Id. As the Ninth Circuit observed in Ulaleo, [s]imply asking for injunctive relief and not damages does not clear the path for suit. The Supreme Court has recognized that the difference between retrospective and prospective relief `will not in many instances be that between day and night.' Ulaleo, 902 F.2d at 1399 (quoting Edelman v. Jordan, 415 U.S. 651, 667, 94 S.Ct. 1347, 1357, 39 L.Ed.2d 662 (1973)). In the case before us, PDF has styled its prayer for relief as one for declaratory and injunctive relief, yet the question remains whether the effect on the state treasury would be ancillary or would amount to virtual compensation for the past misconduct of state officials. The claims for restoration of the Puna lands, via a constructive trust, are comparable to the claims that the U.S. Supreme Court held to be retrospective in Papasan, in which the plaintiffs argued that the sale of certain school trust lands in the 1850's, and the unwise investment of the proceeds, had violated the trust obligation to hold those lands for the benefit of the area's schoolchildren. 478 U.S. at 274, 106 S.Ct. at 2938. Plaintiffs sought: (1) a declaration that the state legislation implementing the land sales was void and unenforceable; (2) establishment of a fund to be held in trust for plaintiffs' benefit; or, alternatively, (3) other lands of the same value to be made available to the plaintiffs. Id. at 274-75, 106 S.Ct. at 2938. The plaintiffs in Papasan argued that they only sought a prospective, injunctive remedy by requiring the state officials to provide appropriate trust income. Id. at 279, 106 S.Ct. at 2941. The Court held that continuing payment of the income from the lost corpus is essentially equivalent in economic terms to a one-time restoration of the lost corpus and no different than a monetary award, thus violative of the eleventh amendment. Id. at 281, 106 S.Ct. at 2942. In the instant case, PDF's request that the trust status of the exchanged lands be restored by means of a constructive trust is essentially equivalent to a nullification of the exchange and the return of the exchanged lands to the trust res. The effect on the state treasury would be direct and unavoidable, rather than ancillary, because imposing a constructive trust on lands now held by Campbell would require that the State to compensate Campbell for its property. See U.S. Const. amend. V; Haw. Const. art. I, § 20. We therefore hold that PDF's requested relief is, in effect, a request for compensation for the past actions of the BLNR members. All of PDF's claims against the defendant state officials which are based on the alleged illegality of the subject land exchange, on either constitutional or statutory grounds, are barred by the State's sovereign immunity. [23]
In addition to our own conclusion that PDF seeks retrospective relief which is barred by sovereign immunity, we are bound by the Ninth Circuit's adjudication in Ulaleo, in which the Ninth Circuit held: The Complaint is that sometime in the past, the BLNR undertook an action, the land exchange, which allegedly injured the plaintiffs by violating the trust of which the plaintiffs are beneficiaries.... The immediate relief plaintiffs seek would require the state to purchase the lands from its present holder by way of cash or other land. We hold that to grant the requested relief would be a retrospective remedy.... If the trust duty was violated, it happened when the BLNR executed the exchange. Ulaleo, 902 F.2d at 1399-1400. Thus, the judgment of a court of competent jurisdiction has previously determined the retrospective nature of PDF's illegal land exchange claims, and the state courts are precluded from relitigating this issue in the context of PDF's state law claims. See, e.g., Morneau v. Stark Enters., 56 Haw. at 423, 539 P.2d at 475 (collateral estoppel precludes the relitigation of an issue which was decided in a prior suit on a different claim). PDF had a full and fair opportunity to argue that it was in fact seeking prospective relief, and reframing its prayer for relief does not entitle it to reargue claims based on the allegedly illegal land exchange. See Bolte v. Aits, Inc., 60 Haw. 58, 587 P.2d 810; see also Allen v. McCurry, 449 U.S. 90, 101 S.Ct. 411, 66 L.Ed.2d 308 (1980) (holding that a federal court cannot relitigate an issue already decided in state court when the party against whom the earlier decision is asserted had a full and fair opportunity to litigate that issue in the earlier case). [24] In light of our rulings that PDF's breach of trust claims are barred by sovereign immunity and the preclusive effect of Ulaleo, we need not reach the question of whether this court's decision in Dedman v. BLNR, 69 Haw. 255, 740 P.2d 28 (1987), also bars relitigation of claims arising out of the land exchange. [25]
Campbell and True argue that the State is an indispensable party to any claim arising out of the land exchange. We agree. First, as alleged by the defendants, PDF has failed to appeal from the lower court's conclusion of law ruling that the State is an indispensable party to the breach of trust claims against Campbell and True. Issues not properly raised on appeal will be deemed to be waived. Mahiai v. Suwa, 69 Haw. 349, 354, 742 P.2d 359, 364 (1987); Meyer v. City & County of Honolulu, 6 Haw.App. 505, 513-14, 729 P.2d 388, 395 aff'd in part, rev'd in part on other grounds, 69 Haw. 8, 731 P.2d 149 (1986). Additionally, we find that there is no adequate remedy available for the alleged breaches of trust absent the trustee-State's participation.