Opinion ID: 6493113
Heading Depth: 1
Heading Rank: 4

Heading: jurisdiction

Text: Before the court can consider the parties’ points of error, it must first resolve a jurisdictional argument. Kernan v. Tanaka, 75 Haw. 1, 15, 856 P.2d 1207, 1215 (1993) (cert. denied, 510 U.S. 1119, 114 S.Ct. 1070, 127 L.Ed.2d 389 (1994)) (“Appellate courts have an obligation to insure they have jurisdiction to hear and determine each case.”) The Commission, HC & S, and WWC argue that Hui/MTF and OHA do not have a right of appeal, and therefore the court has no jurisdiction in this matter. Hui/MTF and OHA both contend that the court’s opinion in Waiahole I resolves the issue and clearly establishes that the court has jurisdiction over appeals of IIFS determinations. As explained below, the court holds that it has jurisdiction in this case, and takes this opportunity to elaborate on the jurisdictional analysis from Waiahole I. The water code provides that “[¿judicial review of rules and orders of the commission under this chapter shall be governed by chapter 91.” HRS § 174C-12. HRS § 91-14, the portion of chapter 91 relating to judicial review, states that, “[ajny person aggrieved by a final decision and order in a contested case ... is entitled to judicial review thereof under this chapter.” HRS § 91-14(a) (1993). In previous eases interpreting this provision, the court has defined “contested ease” as “an agency hearing that 1) is required by law and 2) determines the rights, duties, or privileges of specific parties.” Pele Defense Fund v. Puna Geothermal Venture, 71 Hawai'i 64, 67-68, 881 P.2d 1210, 1213-14 (1994). Further, the court determined that a hearing is “required by law” if it is required by statute, by administrative rule, or by constitutional due process. Id. at 68, 881 P.2d at 1214. In this ease, neither statute nor administrative rule mandates a hearing to establish an IIFS. HRS § 174C-71 10 governs the Commission’s actions vis-a-vis the state’s In-stream Use Protection Program, and nothing in that statute requires the Commission to hold a hearing before establishing or amending an IIFS. In fact, the code indicates that the Commission need not hold a hearing; the Code defines the IIFS as “a temporary in-stream flow standard of immediate applicability, adopted by the commission without the necessity of a public hearing, and terminating upon the establishment of an instream flow standard.” HRS § 174C-3. The Commission’s administrative rules are identical to the water code in relevant regard, so there is no rule-based requirement to hold a hearing. 11 This does not foreclose judicial review of the Commission’s actions, as there remains a third route whereby a hearing may be “required by law”: there may be a constitutional due process requirement. In determining whether a party has a due process right to an administrative hearing, the court must first resolve whether the party’s asserted interest is “ ‘property’ within the meaning of the due process clauses of the federal and state constitutions.” Sandy Beach Defense Fund v. City Council of City and Cnty. of Honolulu, 70 Haw. 361, 376, 773 P.2d 250, 260 (1989) (citing Aguiar v. Hawai'i Housing Auth., 55 Haw. 478, 495, 522 P.2d 1255, 1266 (1974)). “To have a property interest in a benefit, a person clearly must have more than an abstract need or desire for it. He must have more than a unilateral expectation of it. He must, instead, have a legitimate claim of entitlement to it.” Id. (quoting Bd. of Regents v. Roth, 408 U.S. 564, 577, 92 S.Ct. 2701, 33 L.Ed.2d 548 (1972)). The court has had several opportunities to interpret due process property interests as affected by the water code. In the ease most similar to the current case, Waiáhole I, this court considered new and existing WUPA and IIFS for the Waiáhole ditch system, a water system that provides water from Oahu’s windward side to the island’s leeward side. Waiáhole I, 94 Hawai'i at 110, 9 P.3d at 422. Waiáhole I contains extensive analysis and interpretation of the water code, and will be discussed in subsequent sections of this opinion. Regarding jurisdiction, however, the opinion provides only brief analysis. First, the court explained that it had jurisdiction over the appeal of the existing WUPA because both the HRS and the administrative rules required a hearing as part of the WUPA process. Waiáhole I, 94 Hawai'i at 119-20 n. 15, 9 P.3d at 431-32 n. 15. Second, with regard to the petitions to amend the IIFS and the new WUPA, the court stated that “constitutional due process mandates a hearing in both instances because of the individual instream and offstream ‘rights, duties, and privileges’ at stake.” Id. (quoting Puna Geothermal, 77 Hawai'i at 68, 881 P.2d at 1214). The parties dispute the import of the above-quoted sentence. Hui/MTF argues that this “holding” from Waiáhole I “made clear that [the court] had independent jurisdiction over IIFS petitions.” The Commission, HC & S, and WWC argue that the Waiáhole I court’s citation to Puna Geothermal indicates that the court had jurisdiction over the IIFS in that case only because the appeal also challenged the Commission’s resolution of WUPA; they argue that because no party appealed from the WUPA in the present case, Waiáhole I is distinguishable and the court, therefore, lacks jurisdiction. First, a review of Puna Geothermal. There, the court considered whether it had jurisdiction over an appeal following the Department of Health’s (“DOH”) resolution of Puna Geothermal Ventures’s (“PGV”) applications for permits to build a well field and a power plant. 77 Hawai'i at 66, 881 P.2d at 1212. The DOH held two “public informational hearings,” denied PGV’s request for a CCH, and ultimately granted PGV’s permit applications. Id. When the Pele Defense Fund (“PDF”) sought judicial review of the DOH’s actions, PGV filed a motion to dismiss, arguing that the court lacked jurisdiction because there had been no contested case. Id. On appeal, this court concluded that PDF had a constitutional due process right to a hearing before the DOH. Id. at 68, 881 P.2d at 1214. The court held, as a matter of constitutional due process, an agency hearing is also required where the issuance of a permit implicating an applicant’s property rights adversely affects the constitutionally protected rights of other interested persons who have followed the agency’s rules governing participation in contested cases. Id. (emphasis added). The court concluded that the hearings in that case satisfied the “contested case” requirement for purposes of judicial review under HRS § 91-14. Id. at 71, 881 P.2d at 1217. The Commission, WWC, and HC & S argue that the Waiáhole I court’s citation to Puna Geothermal indicates that the court exercised jurisdiction over the appeal of the IIFS only because the parties also appealed the Commission’s resolution of permit applications. Hui/MTF reads Waiáhole I as holding that the court has independent jurisdiction to review IIFS. The court concludes that the jurisdictional language from Waiáhole I is susceptible to both interpretations. However, the court’s due process cases indicate that the court has jurisdiction to hear Hui/ MTF’s appeal because the IIFS, independent of any WUPA, affects property interests of Hui/MTF’s members. John Duey, President of Hui O Ná Wai ‘Ehá, testified that the Hui’s members “live, work, and play in the areas of Ná Wai ‘Ehá,” and that the Hui is “committed to restoring these streams’ natural and cultural values and protecting Maui’s quality of life for present and future generations.” Tao Stream runs through the property owned by Duey and his wife, Marie Ho'oululáhui Lindsey Duey. Marie is native Hawaiian; she gave their property her Hawaiian name: Ho'oul-uláhui. Ho'oululáhui contains at least seventeen ancient lo'i 12 , but the Dueys currently cultivate only two small lo'i with stream water, which they take directly from, and return to, ‘lao Stream. John testified that he would like to restore the remaining lo'i on his land, but that “[t]he only limiting factor is the availability of water.” Ron Sturtz, President of the Board of Directors of Maui Tomorrow Foundation, Inc., submitted a letter stating that the organization’s supporters engage in traditional and customary gathering practices. One such supporter, Roselle Keli'ihonipua Bailey, a kuma hula and native Hawaiian practitioner, submitted written testimony explaining the gathering practices she would like to practice in ‘lao Stream and its nearshore waters, and testifying that the lack of flowing water makes her practices impossible. Kalo 13 farmer and Hui O Ná Wai ‘Ehá member Hóküao Pellegrino testified that his 2.175-acre farm, Noho'ana, contains several restored ancient lo'i, ready to be cultivated. The Noho'ana lo'i are irrigated via a traditional ‘auwai 14 that diverts water from Wai-kapü Stream, and the water that leaves the lo'i returns to the Stream. Pellegrino testified that he is only able to cultivate two of his lo'i at a time because of insufficient water in Waikapü Stream. The interests of the Dueys, Roselle Bailey, and HSküao Pellegrino are selected examples of testimony presented to the Commission, but dozens of others testified about their similar interests. Indeed, in its FOF/COL D & 0, the Commission found that “Cultural experts and community witnesses provided uncontroverted testimony regarding limitations on Native Hawaiians’ ability to exercise traditional and customary rights and practices in the greater Ná Wai ‘Ehá area due to the lack of freshwater flowing in Ná Wai ‘Ehá’s streams and into the nearshore marine waters.” The question before the court today, a question we answer in the affirmative 15 , is whether these interests constitute “property interests” for the purpose of due process analysis. The court has explained that a party has a property interest in the subject of litigation for purposes of due process analysis if the party has “more than an abstract need or desire for it. He must have more than a unilateral expectation of it. He must, instead, have a legitimate claim of entitlement to it.” Sandy Beach Defense Fund, 70 Haw. at 376, 773 P.2d at 260. The court has cited with approval the U.S. Supreme Court’s analysis that: Property interests, of course, are not created by the Constitution. Rather they are created and their dimensions are defined by existing rules or understandings that stem from an independent source such as state law—rules or understandings that secure certain benefits and that support claims of entitlement to those benefits. Int’l Broth. of Painters and Allied Trades v. Befitel, 104 Hawai'i 275, 283, 88 P.3d 647, 655 (2004) (quoting Bd. of Regents v. Roth, 408 U.S. 564, 576, 92 S.Ct. 2701, 33 L.Ed.2d 548 (1972)). See also Aguiar v. Hawai’i Housing Auth., 55 Haw. 478, 496, 522 P.2d 1255, 1267 (1974) (citing federal authority to support the conclusion that “a benefit which one is entitled to receive by statute constitutes a constitutionally-protected property interest”). The interests asserted by Hui/MTF have a statutory basis in the water code. As stated in HRS § 174C-101, (c) Traditional and customary rights of ahupua'a tenants who are descendants of native Hawaiians who inhabited the Hawaiian Islands prior to 1778 shall not be abridged or denied by this chapter. Such traditional and customary rights shall include, but not be limited to, the cultivation or propagation of taro on one’s own kulea-na and the gathering of hihiwai, opae, o'opu, limu, thatch, ti leaf, aho cord, and medicinal plants for subsistence, cultural, and religious purposes. (d) The appurtenant water rights ofkulea-na and taro lands, along with those traditional and customary rights assured in this section, shall not be diminished or extinguished by a failure to apply for or to receive a permit under this chapter. HRS §§ 174C-101(e) and (d) (1993). HRS § 174C-63 is yet another section of the water code that entitles native Hawaiian farmers to their water; it states: “Appurtenant rights are preserved. Nothing in this part shall be construed to deny the exercise of an appurtenant right by the holder thereof at any time.” HRS § 1740-63 (1993). HC & S argues that these interests do not rise to the level of property for due process purposes, citing Sandy Beach Defense Fund, for support that native Hawaiian practices are similar to “aesthetic and environmental interests” which the court has held to be insufficient to establish a property interest. In that case, the City and County of Honolulu issued Special Management Area (“SMA”) use permits for a proposed development. 70 Haw. at 364, 773 P.2d at 253. Area residents and community groups alleged that the County was required to hold a CCH before issuing the permits, expressing concerns “regarding the development’s impact on coastal views, preservation of open space, traffic, potential flooding, and sewage treatment.” Id. The supreme court held that the community groups were not entitled to a CCH because their “aesthetic and environmental” claims did not constitute “legitimate claims of entitlement.” Id. at 376, 773 P.2d at 260. The court also noted that the community groups did not cite authorities to support their argument, and that none of the area residents owned property contiguous to the development. Id. at 377, 773 P.2d at 261. Sandy Beach is readily distinguishable. First, the affected parties before the court today own or reside on land in the area of Ná Wai ‘Ehá, and rely upon that water to exercise traditional and customary rights, including kalo farming. Second, as cited above, there is statutory authority found throughout the water code to support their entitlement to water for kalo farming. HC & S also argues that downstream kalo farmers cannot assert property interests to more water than they currently use because it “would be a grave departure from the principle that ‘the range of interests protected by procedural due process is not infinite.’ ” (quoting Int'l Bd. of Painters & Allied Trades v. Befitel, 104 Hawai'i at 283, 88 P.3d at 655). This argument is rejected for several reasons. First, as both Hui/MTF and OHA argue, the fact that HC & S and WWC have historically deprived downstream users of water does not negate those downstream users’ interest in the water. Second, neither statute quoted above provides for abandonment of appurtenant rights; in fact, the text specifically protects against abandonment by stating that appurtenant rights will “not be diminished or extinguished by a failure to apply for or to receive a permit.” HRS § 174C~101(d). Furthermore, as the court explained in Waiahole I, “The constitution and Code, [ ... ] do not differentiate among ‘protecting,’ ‘enhancing,’ and ‘restoring’ public instream values [like native Hawaiian rights], or between preventing and undoing ‘harm’ thereto.” 94 Hawai'i at 150, 9 P.3d at 462. The court also disagrees with the Commission’s, WWC’s, and HC & S’s argument that setting the IIFS in this case did not determine individual water rights. When the Commission issued a D & O retaining the existing IIFS for Tao and Waikapü Streams, it necessarily affected the Dueys’ and Pelle-grino’s access to water because it endorsed the upstream diversions that remove water from Tao and Waikapü Streams, apparently finding that the “importance” of those diversions outweighed the importance of downstream uses. HRS § 174C-71(2)(D). Though the conclusions above are sufficient to support today’s holding, the analysis of one more ease merits consideration. In Ko'olau Agr. Co., Ltd. v. Comm’n On Water Resource Mgmt. (“Ko’olau Ag.”), an agriculture company unsuccessfully sought review of the Commission’s designation of several 0‘ahu aquifers as Water Management Areas (“WMA”). 83 Hawai'i 484, 486, 927 P.2d 1367, 1369 (1996). The court explained that the company did not have a property interest in whether the aquifers in question received the WMA designation. Id. at 493, 927 P.2d at 1376. In so concluding, the court drew a distinction between WMA designations, which do not require a hearing, and WUPA decisions, which do require hearings. As the court explained, this disparity in procedure is “eminently logical given the difference between the issues presented for decision.” Id. First, the court noted the difference in analysis required before the two resolutions. When considering a WMA designation, the Commission must determine whether “the water resources in the area may be threatened by existing or proposed withdrawals or diversions of water.” Id. (quoting HRS § 174C-41(a)). Contrast a WUPA, where the Commission’s analysis is much more robust; the Commission must consider several factors when granting a WUPA, including whether the water use is “a reasonable-beneficial use as defined in [the Code];” whether the use is “consistent with the public interest;” and whether it is consistent with governmental land use plans. Id. at 492, 927 P.2d at 1375 (quoting HRS § 174C-48). Second, the court considered the necessity of judicial review. The court recognized that “the consequences of an erroneous [WMA] designation decision by the Commission do not indicate a need for judicial review because the rights of individual water users are fully protected in the permitting process.” Id. at 493, 927 P.2d at 1376. And third, the court noted that WMA designations do not affect the interests of any potential water users; the impact of such a designation is only that the user’s water source is subject to the Commission’s regulation, which does not, in and of itself, affect the user’s water rights. Id. Contrast a WUPA, where the outcome is a permit directly specifying a user’s rights to water. Id. All parties cite Ko’olau Ag. for assistance on the question of whether there is a property interest at stake in this case. The Commission, HC & S, and WWC argue that an IIFS determination is similar to designating a WMA because neither directly determines property rights. The court concludes that each of the factors listed above counsel in favor of judicial review in this case. First, the analysis the Commission must undertake in setting an IIFS is complicated. The statute specifies the factors the Commission must consider: In considering a petition to adopt an interim instream flow standard, the commission shall weigh the importance of the present or potential instream values with the importance of the present or potential uses of water for noninstream purposes, including the economic impact of restricting such uses. HRS § 174C-71(2)(D). As the voluminous record in this case readily establishes, each of these factors is complex and involves significant and thorough analysis and factfind-ing. Unlike establishing a WMA, the analysis supporting a determination of an IIFS requires more than a yes/no decision, but rather requires the Commission to weigh serious and significant concerns, including: “the need to protect and conserve beneficial instream uses of water,” “the importance of the present or potential instream values,” “the importance of the present or potential uses of water for noninstream purposes,” and “the economic impact of restricting such uses.” HRS § 174C-71(2)(C) and (D). Indeed, in Waiahole I, the Commission itself advocated for due process rights in proceedings to determine IIFS. One of the Commission’s own Orders, cited in the court’s opinion with approval, states A petition to modify instream flows at ... specific locations is a fact-intensive, individualized determination at each site that may directly affect downstream and off-stream interests.... [I]ndividual claims may need to be examined. The site-specific inquiry required in this ease is not compatible with rale making, but with a method which provides the due process procedures necessary to assess individual interests. 94 Hawai'i at 152, 9 P.3d at 464. Second, the ramifications of an erroneous IIFS could offend the public trust, and is simply too important to deprive parties of due process and judicial review. As the court stated in Waiahole I, “[t]he public trust ... is a state constitutional doctrine. As with other state constitutional guarantees, the ultimate authority to interpret and defend the public trust in Hawai'i rests with the courts of this state.” 94 Hawai'i at 143, 9 P.3d at 455. The courts serve an important function with regard to the water code; as the court noted in Waiahole I, “[t]he cheek and balance of judicial review provides a level of protection against improvident dissipation of an irreplaceable res.” Id. (quoting Arizona Cent. for Law in Pub. Interest v. Hassell, 172 Ariz. 356, 837 P.2d 158, 168-69 (App.1991), review dismissed, 172 Ariz. 356, 837 P.2d 158 (App.1992) (brackets and citation omitted)). Finally, in Ko'olau Ag., the court specified that there was little necessity for judicial review because the permitting process would adequately protect individual rights. 83 Hawai'i at 493, 927 P.2d at 1376. This protection does not exist in today’s case for several reasons. First, as the Commission itself acknowledges, setting an IIFS is a final action and it would be “inappropriate for the Commission to reevaluate the IIFS during the upcoming surface water use permit proceedings.” This argument indicates that downstream users cannot ask the Commission to raise the IIFS to a level that would accommodate a permit to fulfill their kuleana needs. Second, as the court noted in Waiahole I, the water code envisions that “Once the Commission translates the public interest in instream flows into ‘a certain and manageable quantity[, t]he reference to consistency with the public interest in the definition of reasonable beneficial use likewise becomes a reference to that quantity.’” 94 Hawai'i at 149, 9 P.3d at 461 (quoting Douglas W. MaeDougal, Private Hopes and Public Values in the “Reasonable Beneficial Use” of Hawai'i’s Water: Is Balance Possible?, 18 U. Haw. L.Rev. 1, 62 (1996)). In short, the IIFS matter. They have both immediate and lasting impacts on individual water users. They are also an opportunity for the Commission to consider the needs of our state’s water systems. “Under the [Water] Code, [ ... ] instream flow standards serve as the primary mechanism by which the Commission is to discharge its duty to protect and promote the entire range of public trust purposes dependent upon instream flows.” 94 Hawai'i at 148, 9 P.3d at 460. The court therefore holds that Hui/MTF had a due process right to a hearing, and therefore has a right to judicial review, in this case.