Court Opinion

ID: 6343143
Source: CourtListenerOpinion
Date Created: 2022-05-23 20:03:03.323434+00
Date Added: 2024-06-11T14:21:44.054374
License: Public Domain

NOT FOR PUBLICATION IN WEST'S HAWAI#I REPORTS AND PACIFIC REPORTER

                                                    Electronically Filed
                                                    Intermediate Court of Appeals
                                                    CAAP-XX-XXXXXXX
                                                    23-MAY-2022
                                                    08:40 AM
                                                    Dkt. 61 MO

                NOS. CAAP-XX-XXXXXXX and CAAP-XX-XXXXXXX

                  IN THE INTERMEDIATE COURT OF APPEALS

                          OF THE STATE OF HAWAI#I

                           CAAP-XX-XXXXXXX
            HO#OMOANA FOUNDATION, Appellant-Appellee, v.
  LAND USE COMMISSION, STATE OF HAWAI#I, Appellee-Appellee, and
     PU#UNOA HOMEOWNERS ASSOCIATION, INC.; AND ROSS R. SCOTT,
                        Appellees-Appellants.

                                      AND
                           CAAP-XX-XXXXXXX
            HO#OMOANA FOUNDATION, Appellant-Appellee, v.
  LAND USE COMMISSION, STATE OF HAWAI#I, Appellee-Appellant, and
     PU#UNOA HOMEOWNERS ASSOCIATION, INC.; AND ROSS R. SCOTT,
                        Appellees-Appellees.

          APPEAL FROM THE CIRCUIT COURT OF THE SECOND CIRCUIT
                        (CIVIL NO. 16-1-0160(1))

                           MEMORANDUM OPINION
   (By:     Hiraoka, Presiding Judge, Nakasone and McCullen, JJ.)

             Appellees-Appellants Pu#unoa Homeowners Association,

Inc. and Ross R. Scott1 [collectively Homeowners], and State of

Hawai#i Land Use Commission (LUC), appeal from the Circuit Court

of the Second Circuit's (circuit court)2 January 4, 2017

"Findings of Fact, Conclusions of Law, and Order Vacating [LUC's]

      1
         Scott was substituted for Devonne Lane, who was a co-petitioner in
the administrative proceeding and an appellee in the circuit court.
      2
          The Honorable Rhonda I.L. Loo presided.
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Decisions and Orders Entered on March 3, 2016" (Order) and

February 16, 2017 Final Judgment (Judgment).     On appeal,

Homeowners and LUC challenge the circuit court's decision

vacating LUC's March 3, 2016 Declaratory Order, which ruled as a

matter of law that "an overnight campground . . . is prohibited

by [Hawaii Revised Statutes (HRS)] § 205-4.5(a)(6) and cannot be

permitted by a special use permit."
                           I. Background

          Land in Hawai#i is divided into four use districts -

urban, rural, agricultural, and conservation.     HRS § 205-2(a)

(2001).   Agricultural lands are classified from "A" to "E," based

on the "soil's general productive capacity," with "'A' denoting

the highest level of productivity and 'E' the lowest."

Neighborhood Bd. No. 24 (Waianae Coast) v. State Land Use Comm'n,

64 Haw. 265, 266 n.2, 639 P.2d 1097, 1099 n.2 (1982).      Because

lands classified as "A" or "B," i.e., Prime Lands, are the most

suitable for growing crops, they are restricted to certain uses.

However, a landowner may apply for a Special Permit to allow

"certain unusual and reasonable uses" or may seek a Boundary

Amendment to have the land re-classified.

          The Ho#omoana Foundation (Foundation) has a long-term

lease of agricultural class B land, and sought to develop an

overnight campground for use by homeless and commercial campers.

Homeowners own property adjacent to Foundation's class B Land.

          In December 2015, Homeowners petitioned LUC for a

Declaratory Order (Petition) pursuant to HRS § 91-8 (2012) and

Hawai#i Administrative Rules (HAR) § 15-15-98, to determine

whether approval of an overnight camp on class A and B land was

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obtainable through the Special Permit process or whether a

Boundary Amendment was needed.

          In February 2016, Foundation filed a "Petition to

Intervene and Position Statement" (Intervention Request), arguing

that it could obtain approval to develop its proposed campground

through the Special Permit process and need not apply for a

Boundary Amendment.   The State of Hawai#i Office of Planning and

the Maui Department of Planning also filed position statements

agreeing that the proposed campground could be approved through

the Special Permit process, and the Maui Department of Planning

indicated it was processing Foundation's Special Permit request.

          LUC held a public meeting on the Petition, receiving

public testimony and argument from Homeowners, the Maui

Department of Planning, the Office of Planning, and Foundation.

LUC allowed only Homeowners to cross-examine witnesses or rebut

arguments.

          On March 3, 2016, LUC entered a Declaratory Order

granting the Petition (Order Granting Petition), finding that

"the clear prohibition of overnight camps on class A and B rated
lands is irreconcilable with the provisions of HRS §205-6

[(2017)] that permit certain 'unusual and reasonable uses' within

agricultural districts other than for which the district is

classified."   To adopt otherwise "would mean that the counties

could define away completely any statutory restrictions on

agricultural uses" and "results in treating a clear and explicit

statutory prohibition as a nullity[.]"     LUC concluded that the

"only way that overnight camps such as those proposed in the

Project can be allowed on the Property is to change its land use

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classification to one where overnight camps would be permitted."

LUC also denied Foundation's Intervention Request as moot.

            Foundation appealed, and the circuit court vacated

LUC's Order Granting Petition.        The circuit court held that the

proposed campground could be approved by Special Permit and did

not require a Boundary Amendment.         In doing so, the circuit court

explained that HRS § 205-4.5(a)(6) (Supp. 2015) "did not

'expressly prohibit' overnight camps within the agricultural

district" and LUC's conclusion to the contrary was incorrect.
The circuit court also explained that "uses not expressly

permitted in subsection (a) of HRS §205-4.5 are prohibited unless

permitted as provided in HRS §205-6 (2017), which is the special

use permit statute, and HRS §205-8 which is the non-conforming

use statute."3     The circuit court noted that it was persuaded by

the Hawai#i Supreme Court's reasoning in Maha#ulepu v. Land Use

Comm'n, 71 Haw. 332, 790 P.2d 906 (1990), and vacated LUC's Order

Granting Petition.      The circuit court also reversed the Order

Denying Intervention, and remanded the matter to LUC for further

proceedings.     This appeal followed.
                         II.   Standards of Review

            "In a secondary appeal, this court applies the

standards of HRS § 91-14(g) [(2012)] to determine whether the

circuit court decision was right or wrong."            Mauna Kea Anaina Hou

v. Bd. of Land & Nat. Res., 136 Hawai#i 376, 388, 363 P.3d 224,

236 (2015).     However, a challenge that "LUC exceeded the scope of

     3
         HRS § 205-8 is not applicable in this case.

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their authority under HRS Chapter 205, [] raises an issue of

statutory interpretation."       Maha#ulepu, 71 Haw. at 335-36, 730

P.2d at 908.

             Generally, questions of statutory interpretation are

reviewed de novo, "but in the case of ambiguous statutory

language, the applicable standard of review regarding an agency's

interpretation of its own governing statute requires this court

to defer to the agency's expertise and to follow the agency's

construction of the statute unless that construction is palpably
erroneous."       Gillan v. Gov't Emps. Ins. Co., 119 Hawai#i 109,

114, 194 P.3d 1071, 1076 (2008) (cleaned up and emphasis added).
                             III.   Discussion

             The gist of LUC's and Homeowners' appeal is that the

circuit court erred in determining that Foundation's overnight

camping project may be addressed through a Special Permit rather

than a Boundary Amendment.       In addition, Homeowners separately

argue that the circuit court erred by relying on Maha#ulepu, and

LUC argues that the circuit court erred by determining that

Foundation did not waive its Maha#ulepu argument.        Finally, LUC
argues that the circuit court erred by reversing the denial of

Foundation's motion to intervene.
A.      Legal Landscape

             1.     Hawai#i Constitution

             Our constitution requires that the State "conserve and

protect agricultural lands, promote diversified agriculture,

increase agricultural self-sufficiency and assure the

availability of agriculturally suitable lands" and that the

legislature "provide standards and criteria to accomplish" these

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mandates.    Article XI, section 3 of the Hawai#i State

Constitution.     "Lands identified by the State as important

agricultural lands needed to fulfill the purposes above shall not

be reclassified by the State or rezoned by its political

subdivisions without meeting the standards and criteria

established by the legislature . . . ."          Id.
            2.    HRS Chapter 205

                  (a) Purposes

            After a close reading of HRS chapter 205, it appears

that the legislature enacted a comprehensive scheme to manage

land use in Hawai#i, and to preserve important agricultural land

in particular.     "In the establishment of the boundaries of

agricultural districts, the greatest possible protection shall be

given to those lands with a high capacity for intensive

cultivation[.]"     HRS § 205-2(a)(3).      Declaring that "the people

of Hawaii have a substantial interest in the health and

sustainability of agriculture as an industry in the State[,]" the

legislature also affirmed a compelling interest in preserving

agricultural lands:
            There is a compelling state interest in conserving the
            State's agricultural land resource base and assuring the
            long-term availability of agricultural lands for
            agricultural use to achieve the purposes of:
                  (1)   Conserving and protecting agricultural lands;
                  (2)   Promoting diversified agriculture;

                  (3)   Increasing agricultural self-sufficiency; and
                  (4)   Assuring the availability of agriculturally
                        suitable lands,
            pursuant to article XI, section 3, of the Hawaii State
            Constitution.

HRS § 205-41 (2017).

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          One important objective in identifying important

agricultural lands was to "increase agricultural self-sufficiency

for current and future generations."       HRS § 205-42(b) (2017).

Policies, plans, ordinances, and rules "shall promote the long-

term viability of agricultural use of important agricultural

lands" and shall "[d]iscourage the fragmentation of important

agricultural lands and the conversion of these lands to

nonagricultural uses."    HRS § 205-43(2) (2017).
                (b) Permitted and Prohibited Uses

          In subsection (a) of HRS § 205-4.5, the legislature

restricted agricultural districts with a "productivity rating

class A or B" to 23 permissible uses.       HRS § 205-4.5(a).      One

such permissible use is "[p]ublic and private open area types of

recreational uses, including day camps, picnic grounds, parks,

and riding stables, but not including dragstrips, airports,

drive-in theaters, golf courses, golf driving ranges, country

clubs, and overnight camps."      HRS § 205-4.5(a)(6) (emphases

added).

          In subsection (b) of HRS § 205-4.5, the legislature
mandated that any use not expressly permitted in subsection (a)

was prohibited except as permitted by Special Permit pursuant to

HRS § 205-6:
                Uses not expressly permitted in subsection (a) shall
          be prohibited, except the uses permitted as provided in
          sections 205-6 and 205-8 . . . . Any other law to the
          contrary notwithstanding, no subdivision of land within the
          agricultural district with soil classified by the land study
          bureau's detailed land classification as over (master)
          productivity rating class A or B shall be approved by a
          county unless those A and B lands within the subdivision are
          made subject to the restriction on uses as prescribed in
          this section and to the condition that the uses shall be
          primarily in pursuit of an agricultural activity.

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                Any deed, lease, agreement of sale, mortgage, or other
          instrument of conveyance covering any land within the
          agricultural subdivision shall expressly contain the
          restriction on uses and the condition, as prescribed in this
          section that these restrictions and conditions shall be
          encumbrances running with the land until such time that the
          land is reclassified to a land use district other than
          agricultural district.

HRS § 205-4.5(b) (emphases added).
                (c) Special Permit and District Boundary Amendment

          As referenced above, the Special Permit process of HRS

§ 205-6 allows the county planning commission to "permit certain

unusual and reasonable uses within agricultural and rural

districts other than those for which the district is classified"

"but only when the use would promote the effectiveness and

objectives of this chapter; provided that a use proposed for

designated important agricultural lands shall not conflict with

any part of this chapter."     HRS § 205-6(a) and (c); Waianae

Coast, 64 Haw. at 269-70, 639 P.2d at 1101.

          "The special use or exception evolved as a land use

control device from a recognition of the hardship frequently

visited upon landowners due to the inherent rigidity of the

Euclidean zoning system, and the inapplicability of variance or

boundary amendment procedures to all land use problems."           Id. at

270, 639 P.2d at 1101-02.     Unlike a district boundary amendment

(reclassifying land) and a variance (permission to use property

in a manner forbidden by law), "a special permit allows the owner

to put his land to a use expressly permitted by ordinance or

statute on proof that certain facts and conditions exist, without

altering the underlying zoning classification."         Id. at 270-71,

639 P.2d at 1102 (emphasis added).

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            "Its essential purpose, as explained by the state

Attorney General, is to provide landowners relief in exceptional

situations where the use desired would not change the essential

character of the district nor be inconsistent therewith."      Id. at

271, 639 P.2d at 1102 (citing 1963 Op. Att'y Gen. 63-37).      Unlike

district boundary amendments, Special Permits provide an

"expedited review," which "underscore[s] the necessity for their

proper application to the particular land use problems they were

designed to address."    Id. at 272, 639 P.2d at 1102.
            "[U]se of the special permit to effectuate essentially

what amounts to a boundary change would undermine the protection

from piecemeal changes to the zoning scheme guaranteed landowners

by the more extensive procedural protections of boundary

amendment statutes."    Id. at 272, 639 P.2d at 1102-03 (citations

omitted).   The Hawai#i Supreme Court did "not believe that the

legislature envisioned the special use technique to be used as a

method of circumventing district boundary amendment procedures to

allow the ad hoc infusion of major urban uses into agricultural

districts."    Id. at 272, 639 P.2d at 1103; Save Sunset Beach
Coalition v. City & Cnty. of Honolulu, 102 Hawai#i 465, 482, 78

P.3d 1, 18 (2003) (observing "that the 'reasonable and unusual'

exception permitted by HRS § 205-6 cannot be utilized to

circumvent the essential purpose of the agricultural district").

            In sum, HRS chapter 205 aims to preserve agricultural

land in Hawai#i and promote agricultural self sufficiency for

future generations.

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B.      LUC's Decision and Maha#ulepu

             As an initial matter, LUC contends that Foundation

waived its Maha#ulepu argument.      Foundation, however, does not

appear to have raised a new argument by citing Maha#ulepu.

Instead, Foundation cited Maha#ulepu as new authority to support

its existing argument that it could obtain approval to develop an

overnight camp on class B agricultural lands through the Special

Permit process.

             Turning to LUC's and Homeowner's contention that the

circuit court erred by holding overnight camping may be addressed

through a Special Permit, their arguments are well taken as LUC's

decision appears to be supported by canons of statutory

construction.      The Special Permit statute, HRS § 205-6, is a

general statute and the exclusion of overnight camps from the

permitted use of "public and private open area type of recreation

uses," HRS § 205-4.5(a)(6), is a specific statute.         And where

there is ambiguity, the specific statute must control over the

general statute.      Yoshimura v. Kaneshiro, 149 Hawai#i 21, 39, 481

P.3d 28, 46 (2021) ("Under ordinary canons of construction, a
more specific statute controls over a more general statute").

Also, as an exception to the permitted use, the exclusion of

overnight camps should be strictly construed.        State v. Russell,

62 Haw. 474, 480, 617 P.2d 84, 88 (1980) ("It is a well settled

rule of statutory construction that exceptions to legislative

enactments must be strictly construed").        Finally, allowing

overnight camps through a Special Permit when overnight camps

were expressly excluded from a particular permitted use appears

to render the express exclusion meaningless, and a statute cannot

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be interpreted so as to render it a nullity.     City & Cnty. of

Honolulu v. Hsuing, 109 Hawai#i 159, 173, 124 P.3d 434, 448

(2005) ("[O]ur rules of statutory construction requires us to

reject an interpretation of a statute . . . that renders any part

of the statutory language a nullity").

            In addition, LUC's decision appears to perpetuate the

purposes of the constitutional mandate and statutory scheme,

which is to promote the "health and sustainability of

agriculture" and "increase agricultural self-sufficiency for
current and future generations."      An overnight camp, as well as a

drag strip, airport, drive-in theater, golf course, golf driving

range, and country club, on class B agricultural land does not on

its face promote the sustainability of agriculture or increase

agricultural self-sufficiency for future generations.

            Importantly, a special permit is not a variance to

allow an impermissible use; "a special permit allows the owner to

put his land to a use expressly permitted by ordinance or statute

on proof that certain facts and conditions exist, without

altering the underlying zoning classification."     Waianae Coast,
64 Haw. at 270-71, 639 P.2d at 1102 (emphasis added).      And here,

overnight camping was not "expressly permitted by ordinance or

statute."    Instead, the legislature expressly excluded overnight

camping from an expressly permitted use on class A and B

agricultural land.

            Nonetheless, this Court is bound by legal precedent.

Over thirty years ago, in 1990, the Hawai#i Supreme Court

interpreted the same statute, HRS § 205-4.5(a)(6), as applied to

a golf course.    In that appeal, the supreme court analyzed

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whether the provisions of HRS chapter 205 prohibit the county

planning commission from issuing special use permits for golf

courses on prime agricultural lands classified as Class A or B.

Maha#ulepu, 71 Haw. at 333-34, 790 P.2d at 907.     The supreme

court then held that HRS chapter 205 did indeed provide the

authority for such permits.    Id.

          The supreme court reasoned that, although golf courses

are not permitted on class A and B agricultural lands under HRS

§ 205-4.5(a), subsection (b) "nonetheless allows those uses for
which special permits may be obtained under § 205-6."      Id. at

336, 790 P.2d at 908-09.   The supreme court explained that

"[s]ection 205-6 vests in the planning commissions the authority

to issue special permits for uses that, while not otherwise

permitted within agricultural districts, are nonetheless 'unusual

and reasonable' uses that promote the effectiveness and

objectives of Chapter 205."    Id. at 336-37, 790 P.2d at 909.

          Although the supreme court did not analyze whether a

golf course promoted the effectiveness and objectives of HRS

chapter 205, it noted that "if the legislature had intended
absolute protection from golf course uses for A and B rated

agricultural lands, it would have done so unequivocally by

prohibiting the issuance of permits for golf courses under the

special permit provisions of § 205-4.5(b) or by employing clearly

prohibitory language."   Id. at 338-339, 790 P.2d at 910.

Notably, at the time Maha#ulepu was decided, HRS § 205-2(d)

provided that uses in agricultural districts shall include "open

area recreational facilities, including golf courses and golf

driving ranges, provided that they are not located within

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agricultural district lands with soil classified . . . class A or

B."   HRS § 205-2(d) (Supp. 1990) (emphasis added).

           Fifteen years after Maha#ulepu, in 2005, the

legislature amended HRS § 205-2(d) by specifically prohibiting

golf courses in agricultural districts, subject to a grandfather

clause for golf courses and golf driving ranges approved by a

county before July 1, 2005.    HRS § 205-4.5(d); 2005 Haw. Sess.

Laws Act 205 §§ 2-3 at 670-71.    The statutory amendment mentioned

only "golf courses and golf driving ranges"; it did not mention
any of the other uses excluded by HRS § 205-4.5(a)(6).

           Thus, although the legislature effectively abrogated

Maha#ulepu's specific application to golf courses in 2005, it did

not otherwise address Maha#ulepu's interpretation that HRS

chapter 205 provides authority for issuing special permits

allowing HRS § 205-4.5(a)(6) excluded uses (dragstrips, airports,

drive-in theaters, country clubs, and overnight camps) on class A

and B agricultural land.   LUC is afforded deference in

interpreting its own statute, but the Hawai#i Supreme Court is

the "final arbiter" of Hawai#i statutes.    And this court, like
the circuit court, is bound by the Hawai#i Supreme Court's

interpretation of the HRS § 205-4.5(a)(6) exclusions in

Maha#ulepu.   See Alakai Na Keiki, Inc. v. Matayoshi, 127 Hawai#i

263, 278, 277 P.3d 988, 1003 (2012).     To the extent LUC's

decision is contrary to Maha#ulepu, it was palpably erroneous.

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C.      Intervention

             Finally, LUC contends it properly denied the

Intervention Request as moot because it granted the Petition

without setting a contested case hearing, leaving nothing in

which to intervene.      On the other hand, Foundation claims it had

a due process property interest because it leased the Subject

Land "for the sole purpose of using the land for an overnight

camp[,]" and "[b]y taking away [its] ability to engage in that

use under a special use permit, [LUC] impacted [its] property
right."

             A "contested case" is "an agency hearing that 1) is

required by law and 2) determines the rights, duties, or

privileges of specific parties.       An agency hearing that is

required by law may be required by 1) agency rule, 2) statute, or

3) constitutional due process."       Mauna Kea, 136 Hawai#i at 390,

363 P.3d at 238 (citations, internal quotation marks, and

parentheses omitted).      A "'party' means each person named or

admitted as a party, or properly seeking and entitled as of right

to be admitted as a party, in any court or agency proceeding."
HRS § 91-1 (Supp. 2021).

             But "discretionary hearings are not contested cases

because they are not required by law."        Lingle v. Hawai#i Gov't

Emps. Ass'n, AFSCME, Local 152, AFL-CIO, 107 Hawai#i 178, 184,

111 P.3d 587, 593 (2005).       Where a hearing was discretionary, LUC

was not required by agency rule or statute to set a contested

case hearing on the matter and to admit Foundation as a party.

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          Moreover, "for procedural due process protections to

apply, [the party] must possess an interest which qualifies as

property within the meaning of the constitution. . . .      [A]

protected property interest exists in a benefit — tangible or

otherwise — to which a party has a legitimate claim of

entitlement."   In re Application of Maui Elec. Co., Ltd., 141

Hawai#i 249, 260, 408 P.3d 1, 12 (2017) (citations and internal

quotation marks omitted).    Thus, for Foundation to have a right

to intervene, it must have a protected property interest in
obtaining a Special Permit such that unavailability of the

Special Permit process is a denial of due process.

          LUC has broad discretion to grant or deny a Special

Permit for a non-permitted use, see Waianae Coast, 64 Haw. at

268, 639 P.2d at 1100 (noting that judicial review of LUC

decisions on Special Permit applications are limited only to

errors of law or abuse of discretion), and neither the Hawai#i

nor United States Constitution recognizes entitlement to a

benefit - implicating a due process property interest - where the

reviewing body has "broad discretion" to grant or deny the
benefit, beyond merely determining whether the applicant failed

to meet the statutory terms of eligibility.     See Alejado v. City

& Cnty. of Honolulu, 89 Hawai#i 221, 229, 971 P.2d 310, 318 (App.

1998) (recognizing that a reviewing body's complete discretion to

grant or deny a benefit based on its assessment of "needs"

generally does not create a constitutionally protected property

right); see also Shanks v. Dressel, 540 F.3d 1082, 1091 (9th Cir.

2008) ("Only if the governing statute compels a result upon

compliance with certain criteria, none of which involve the

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exercise of discretion by the reviewing body, does it create a

constitutionally protected property interest." (Internal

quotation marks omitted.)).

          Because Foundation had no constitutional entitlement to

develop the Proposed Campground through a Special Permit, LUC was

not required as a matter of due process to set a contested case

hearing and admit Foundation as a party.       Thus, the circuit court

erred in reversing the Order Denying Intervention.
                           IV. CONCLUSION

          For the above reasons, we vacate in part the circuit

court's February 16, 2017 Final Judgment and January 14, 2017

Order with regard to the reversal of LUC's Order Denying

Intervention, and remand to LUC for further proceedings

consistent with this opinion.

          DATED:   Honolulu, Hawai#i, May 23, 2022.

On the briefs:                         /s/ Keith K. Hiraoka
                                       Presiding Judge
Deborah K. Wright
Keith D. Kirschbraun                   /s/ Karen T. Nakasone
Douglas R. Wright,                     Associate Judge
for Appellees-Appellants
PU#UNOA HOMEOWNERS ASSOCIATION,        /s/ Sonja M.P. McCullen
INC. and ROSS R. SCOTT.                Associate Judge

Robert T. Nakatsuji,
Deputy Solicitor General,
for Appellee-Appellant
LAND USE COMMISSION, STATE OF
HAWAI#I.

James W. Geiger,
for Appellant-Appellee
HO#OMOANA FOUNDATION.

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