Opinion ID: 2629221
Heading Depth: 3
Heading Rank: 3

Heading: Reservations of water constitute a public trust purpose, which the commission has a duty to protect in balancing the competing interests for a water use permit application.

Text: The appellants assert that the Commission's decision violated the State's constitutional public trust duty to honor and carry out the terms and conditions of the HHCA. The appellants essentially contend that DHHL has an absolute or first call priority to all government-owned waters. More specifically, the appellants argue (1) that DHHL's priority water rights stem from HHCA §§ 220 and 221, the Hawai`i Constitution, which adopted the HHCA as a provision of the state Constitution, and HRS §§ 174C-49, 174C-101, and 174C-31 (1993) and (2) that the legislature intended to insure that Hawaiian homelands (a) received adequate water for future uses, (b) not be prejudiced by DHHL's delay in developing infrastructure for Hawaiian homestead lands, and (c) not be prejudiced by other private land owners' attempts to exploit water resources without regard to the present and future needs of DHHL. Put simply, the appellants maintain that the Commission is subject to a duty to set aside adequate reservations of water to meet DHHL's current and future needs and to insure that other users do not interfere with DHHL's reservations of water, all of which takes priority over other government and private interests. As we mentioned supra in section III.A.2, the appellants posit that MR-Wai'ola's proposed well would adversely affect DHHL's section 221 first call rights to water from government lands and DHHL's ability to exercise its 2.905 mgd reservation in the Kualapu'u aquifer system in light of the fact that the Commission had previously rejected DHHL's request to pump additional water from its existing wells in Kualapu'u due to rising salinity, which, in turn, would inevitably require DHHL to drill a new well in close proximity to MR-Wai`ola's proposed well site in Kamiloloa. The appellants argue that if DHHL were subject to the impairment of its ability to withdraw water from its reservation by virtue of intervening water use permits granted prior to DHHL obtaining its own water use permit, then DHHL's reservation would be completely illusory, affording no rights beyond those already enjoyed by persons without existing reservations. [28] The Commission counters that its decision upholds the public trust doctrine, the Commission having evaluated the water available, evaluated the competing interests, and... accommodate[d] all interests in the Kamiloloa aquifer. In particular, the Commission maintains that its decision accommodated all of the parties' interests by allocating only one-half of the quantity of water that MR-Wai'ola had requested and keeping all allocations from the Kamiloloa aquifer system significantly below the sustainable yield without adversely affecting the nearshore environment. The Commission asserts that it considered DHHL's argument that it needed more water from the Kualapu'u aquifer and recognized that DHHL had a reservation in Kualapu'u for 2.905 mgd. The Commission, however, argues that DHHL was unable to demonstrate additional future needs of water distinct from its reservation in Kualapu`u and that there was evidence that DHHL could secure other sources of water for future development if necessary. As such, the Commission contends that, inasmuch as DHHL's evidence regarding its future needs was speculative, it correctly found that DHHL was able to use its reservation in the Kualapu'u aquifer and that the proposed use would not interfere with DHHL's reservation rights protected by the HHCA.
In Waiahole, this court held that the public trust doctrine applied to all water resources, unlimited by any surface-ground distinction. 94 Hawai`i at 133-35, 9 P.3d at 445-47 (affirming Robinson, 65 Haw. at 674, 658 P.2d at 310, wherein the court stated that a public trust was imposed upon all the waters of the kingdom). In so doing, this court traced the historical development of the public trust doctrine in Hawai`i and reasoned therefrom that article XI, sections 1 and 7 of the Hawai`i Constitution, see supra note 3, adopted the public trust doctrine as a fundamental principle of constitutional law in Hawai`i and that the legislature, pursuant to the constitutional mandate of article XI, section 7, incorporated public trust principles into the Code. Id. at 130-32, 9 P.3d at 443-45. Moreover, in holding that the Code does not supplant the protections of the public trust doctrine, this court recognized that [e]ven with the enactment and any future development of the Code, the doctrine continues to inform the Code's interpretation, define its permissible `outer limits,' and justify its existence. Id. at 133, 9 P.3d at 445. In addressing the substance of the state water resources trust, this court identified three valid trust purposes, which the Commission was duty-bound to protect against competing interests in the State's water resources: (1) water resource protection, which includes the maintenance of waters in their natural state as a distinct use and disposes of any portrayal of retention of waters in their natural state as `waste'; (2) domestic use protection, particularly drinking water; and (3) the exercise of native Hawaiian and traditional and customary rights. Id. at 136-38, 9 P.3d at 448-50. This court held, however, that, while the state water resources trust acknowledges that private use for `economic development' may produce important public benefits and that such benefits must figure into any balancing of competing interests in water, private commercial use is not a public trust purpose. Id. at 138, 9 P.3d at 450. This court opined that if the public trust is to retain any meaning and effect, it must recognize enduring public rights in trust resources separate from, and superior to, the prevailing private interests in the resources at any given time. Id. (Emphasis added.) Consequently, this court affirmed the Commission's conclusion that the public trust doctrine effectively prescribes a `higher level of scrutiny' for private commercial uses ... [and] that the burden ultimately lies with those seeking or approving such uses to justify them in light of the purposes protected by the trust. Id. at 142, 9 P.3d at 454. This court has described the public trust relating to water resources as the authority and duty to maintain the purity and flow of our waters for future generations and to assure that the waters of our land are put to reasonable and beneficial uses. Id. at 674, 658 P.2d at 310 (emphases added). Similarly, article XI, section 1 of the Hawai`i Constitution requires the state both to protect natural resources and to promote their use and development. The state water resources trust thus embodies a dual mandate of 1) protection and 2) maximum reasonable and beneficial use. The mandate of protection coincides with the traditional notion of the public trust developed with respect to navigable and tidal waters. As commonly understood, the trust protects public waters and submerged lands against irrevocable transfer to private parties, see, e.g., Illinois Central [Railroad Co. v. Illinois], [146 U.S. 387, 452-53, 13 S.Ct. 110, 36 L.Ed. 1018 (1892),] [ ] or substantial impairment, whether for private or public purposes, see, e.g., State v. Public Serv. Comm'n, [275 Wis. 112, 81 N.W.2d 71, 74 (1957) ] [ ]. In this jurisdiction, our decisions in McBryde [ Sugar Co., Ltd. v. Robinson, 54 Haw. 174, 504 P.2d 1330 (1973) ] and its progeny and the plain meaning and history of the term protection [footnote omitted] in article XI, section 1 and article XI, section 7 establish that the state has a comparable duty to ensure the continued availability and existence of its water resources for present and future generations. Id. at 138-39, 9 P.3d at 450-51. In Hawai`i, the water resources trust also encompasses a duty to promote the reasonable and beneficial use of water resources in order to maximize their social and economic benefits to the people of this state. Id.; see also article XI, section 1 of the Hawai`i Constitution, supra note 3 (For the benefit of present and future generations, the State ... shall promote the development and utilization of these [water] resources in a manner consistent with their conservation and in furtherance of the self-sufficiency of the State.). As we have mentioned, however, maximizing the water resource's social and economic benefits includes the protection of the resource in its natural state. Thus, unlike other jurisdictions, this court noted that the object is not maximum consumptive use, but rather the most equitable, reasonable, and beneficial allocation of state water resources, with full recognition that resource protection also constitutes `use.' Id. at 140, 9 P.3d at 452. Finally, with respect to balancing the foregoing mandates of the state water resources trust, this court held that the trust embodies the following fundamental principles. Id. at 141-43, 9 P.3d at 453-55. First, the state has both the authority and duty to preserve the rights of present and future generations in the waters of the state, which, in effect, precludes any grant or assertion of vested rights to use water to the detriment of a public trust purpose. Id. This authority empowers the state to revisit prior diversions and allocations, even those made with due consideration of their effect on the public trust. Id. at 141, 9 P.3d at 453. Second, [t]he state [ ] bears an `affirmative duty to take the public trust into account in the planning and allocation of water resources, and to protect public trust uses whenever feasible.' Id. at 141, 9 P.3d at 453 (quoting National Audubon Society v. Superior Court of Alpine County, 33 Cal.3d 419, 189 Cal.Rptr. 346, 658 P.2d 709, 728, cert. denied, 464 U.S. 977, 104 S.Ct. 413, 78 L.Ed.2d 351 (U.S.Cal.1983)) (emphasis in original) (footnote omitted). Third, there are no absolute priorities between broad categories of [trust] uses under the water resources trust, precisely because all public trust purposes must be protected; thus, the Commission must weigh competing public and private water uses on a case-by-case basis[.] Id. at 142, 9 P.3d at 454. That being the case, the Commission, as the primary guardian of public rights under the trust, must take the initiative in considering, protecting, and advancing public rights in the resource at every stage of the planning and decisionmaking process. Id. at 143, 9 P.3d at 455. In sum, the state may compromise public rights in the resource pursuant only to a decision made with a level of openness, diligence, and foresight commensurate with the high priority these rights command under the laws of our state. Id.
We have consistently recognized the heightened duty of care owed to the native Hawaiians. See PASH, 79 Hawai`i at 451, 903 P.2d at 1272 (holding that the Hawai`i Planning Commission must protect the reasonable exercise of customary and traditional rights of the native Hawaiians); Pele Defense Fund v. Paty, 73 Haw. 578, 620-21, 837 P.2d 1247, 1272 (1992) (holding that native Hawaiian rights protected by article XII, section 7 may extend beyond the ahupua`a in which a native Hawaiian resides); Kalipi v. Hawaiian Trust Company, Ltd., 66 Haw. 1, 7-8, 656 P.2d 745, 749 (1982) (interpreting HRS § 7-1 to assure that lawful occupants of an ahupua[`]a may, for the purposes of practicing native Hawaiian customs and traditions, enter undeveloped lands within the ahupua[`]a to gather those items enumerated in the statute); Ahuna v. Department of Hawaiian Home Lands, 64 Haw. 327, 338, 640 P.2d 1161, 1168 (1982) (holding that DHHL assumed the obligation to implement the state's fiduciary duty under the HHCA on behalf of eligible native Hawaiians). Native Hawaiians' water rights are no exception. Waiahole, 94 Hawai`i at 137, 9 P.3d at 449 (upholding the exercise of native Hawaiian and traditional and customary rights as a public trust purpose). Our analysis in Waiahole, however, begs the question whether a reservation of water constitutes a public trust purpose with respect to the state's continuing trust obligation to ensure the continued availability and existence of its water resources for present and future generations. 94 Hawai`i at 139, 9 P.3d at 451. We answer the foregoing in the affirmative and hold that, pursuant to article XI, sections 1 and 7 of the Hawai`i Constitution, HHCA § 220(d), and HRS § 174C-101(a), a reservation of water constitutes a public trust purpose. As discussed supra in section III.A.3.a, the Commission bears a duty to protect the continued availability of water resources in balancing the competing interests for a water use permit. In addition, HHCA § 220(d), see supra note 2, expressly requires that sufficient water shall be reserved for current and foreseeable domestic, stock water, aquaculture, and irrigation activities on tracts leased to native Hawaiians.... Moreover, HRS § 174C-101(a) states in relevant part that [d]ecisions of the commission on water resource management relating to the planning for, regulation, management, and conservation of water resources in the State shall ... incorporate and protect adequate reserves of water for current and foreseeable development and use of Hawaiian home lands as set forth in section 221 of [HHCA]. (Emphasis added.) See also HRS § 174C-49(e), supra note 1 (All permits issued by the commission shall be subject to the rights of the [DHHL] as provided in section 221 of the [HHCA], whether or not the condition is explicitly stated in the permit.). Inasmuch as a reservation of water is an essential mechanism by which to effectuate the State's public trust duty to ensure the continued availability and existence of its water resources for present and future generations, see Waiahole, 94 Hawai`i at 139, 9 P.3d at 451, we hold that DHHL's reservations of water throughout the State are entitled to the full panoply of constitutional protections afforded the other public trust purposes enunciated by this court in Waiahole. To hold otherwise would undermine the public trust doctrine, which is a state constitutional doctrine, and the relevant policy declarations set forth in the Code. See HRS § 174C-101(a), supra note 4 (Traditional and customary rights of ahupua'a tenants ... shall not be abridged or denied by this chapter.); HRS § 174C-2(c), supra note 21 ([A]dequate provision shall be made for ... the protection and procreation of fish and wildlife, the maintenance of proper ecological balance and scenic beauty, and the preservation and enhancement of waters of the State for municipal uses, public recreation, public water supply, agriculture, and navigation....). [29] (c) Although the Commission discharged its public trust duty to protect DHHL's existing legal uses in the Kualapu'u aquifer, it failed adequately to discharge its duty to protect DHHL's reservation in the Kualapu'u aquifer. In light of the foregoing, we now address whether the Commission discharged its duty to protect DHHL's reservation rights in the Kualapu'u aquifer system against competing interests in the state's water resources trust. To begin, we recognize that, generally, agency decisions affecting public trust resources carry a presumption of validity. Wai&amacr;hole, 94 Hawai`i at 143, 9 P.3d at 455. Moreover, [t]he presumption is particularly significant where the applicant challenges a substantial decision within the agency's expertise as `clearly erroneous,' HRS § 91-14(g)(5), `arbitrary,capricious,' or an `abuse of discretion,' HRS § 91-14(g)(6). Id. However, the foregoing presumption of validity presupposes that the agency has grounded its decision in reasonably clear FOFs and COLs. In the present matter, the record is void of a single FOF regarding whether MR-Wai`ola established that the proposed use would interfere with DHHL's reservation in the Kualapu'u aquifer as mandated by the Code. The Commission concluded that, because (1) HAR § 13-171-63 granted DHHL an aquifer-specific reservation in the Kualapu`u aquifer and (2) the proposed use was located in the Kamiloloa aquifer, MR-Wai'ola need not meet its burden with respect to DHHL's reservation. As discussed supra in section III.A.1, the aquifer-specific nature of DHHL's reservation, as set forth in the HAR, does not eliminate MR-Wai`ola's burden under HRS § 174C-49(a)(7), and, consequently, the Commission was duty bound to hold MR-Wai`ola to its burden. Inasmuch as the Commission failed to render the requisite FOFs and COLs with respect to whether MR-Wai`ola had satisfied its burden as mandated by the Code, it violated its public trust duty to protect DHHL's reservation rights under the HHCA, the Code, the Hawai`i Constitution, and the public trust doctrine in balancing the various competing interests in the state water resources trust. Accordingly, we vacate and remand for the entry of further FOFs and COLs on the matter. Notwithstanding the foregoing violation of the public trust doctrine, we believe that the Commission upheld its public trust obligation to protect DHHL's existing legal uses in Kualapu'u i.e., DHHL's existing wellsagainst the competing private commercial use proposed by MR-Wai'ola. As this court observed in Waiahole with respect to offstream uses, article XI, section 1 of the Hawai`i Constitution mandates that all water uses, public or private, promote the best economic and social interests of the people of this state. 94 Hawai`i at 141, 9 P.3d at 453. Moreover, as discussed supra in section III.A.3.a, private commercial use for economic development, although not a cognizable trust objective, may produce important public benefits and ... must figure into any balancing of competing interests of water. Id. at 138, 9 P.3d at 450. Unquestionably, our decision in Waiahole does not preclude the controlled development of water resources for private commercial use. Id. at 141, 9 P.3d at 453 (The public has a definite interest in the development and use of water resources for various reasonable and beneficial public and private offstream purposes[.] (Emphasis added.)). Instead, Waiahole ensures (1) that any balancing between public and private purposes begin with a presumption in favor of public use, access, and enjoyment, id. at 142, 9 P.3d at 454, and (2) that the planning and allocation of water resources for purposes of economic development must account for the public trust and protect public trust uses to the extent feasible. Id. (recognizing that the public trust establishes use consistent with trust purposes as the norm or `default' condition). Consequently, we stated that reason and necessity dictate that the public trust may have to accommodate offstream diversions inconsistent with the mandate of protection, to the unavoidable impairment of public instream uses and values. Id. at 141, 9 P.3d at 453. The Commission, however, owes a duty to consider the cumulative impact of existing and proposed diversions on trust purposes and to implement reasonable measures to mitigate this impact, including the use of alternative sources. Id. at 143, 9 P.3d at 455. In the present matter, the Commission clearly addressed the potential impact of MR-Wai'ola's proposed water use in the Kamiloloa aquifer system on DHHL's existing wells in the Kualapu'u aquifer system. First, the Commission considered two hydrological studies in rendering its FOFs and COLS. In particular, the McNulty Model (proffered by MR-Wai`ola) predicted that the impact of pumping 1.25 mgd from the proposed well in Kamiloloa will result in water level declines of 0.17 to 0.32 feet at the existing Kualapu'u well field with [t]he largest impact ... at the nearest well in Kakalahale. Accordingly, the Commission found that the [w]ater level declines at the levels predicted by the McNulty Model would have no measurable effect on the quality or quantity of water drawn from existing wells  in Kualapu`u. (Emphasis added.) The USGS Model, the study proffered by DHHL, predicted that pumping 1.326 mgd from the proposed well in Kamiloloa (0.076 mgd more than the amount requested by MR-Wai'ola) would result in a drawdown greater than 0.1 feet and less than 0.5 feet and that [s]uch change is likely to be less than normal seasonal fluctuations of the groundwater level and of the same order of magnitude of normal semi-diurnal water level fluctuations created by varying barometric pressure. In other words, the impact is relatively small.  (Emphasis added.) Second, the Commission granted MR-Wai`ola a water use permit for only 655,928 gpd, approximately one-half of the requested quantity, thereby diminishing the foregoing predictions with respect to water-level declines in Kualapu'u, and only for the proposed future uses that were consistent with state and county general plans and land use designations and county land use plans and policies. Finally, in recognition of the importance and need for long-range planning for the efficient and effective use of water, the Commission's decision proposed a municipal reservation in the Kamiloloa aquifer system, which would not be limited to any one user but would be set up for municipal uses as defined in the Water Code. Thus, to the extent that the Commission's decision compromised DHHL's existing wells in the Kualapu'u aquifer system, we believe that the Commission did so with a level of openness, diligence, and foresight commensurate with the high priority these rights command under the laws of our state. Waiahole, 94 Hawai`i at 143, 9 P.3d at 455.