Court Opinion

ID: 9566740
Source: CourtListenerOpinion
Date Created: 2023-08-21 19:42:40.062648+00
Date Added: 2024-06-11T09:39:11.712567
License: Public Domain

DISSENTING OPINION OF
NAKAMURA, J.
“This appeal,” as the court notes at the outset, “involves a challenge to the validity of the procedures employed by... the City and County of Honolulu .. . when acting upon applications for Special Management Area (SMA) use permits pursuant to the Coastal Zone Management Act (CZMA), Hawaii Revised Statutes (HRS), Chapter 205A.” The dispositive question on appeal, put bluntly and succinctly, is whether procedures essentially “political” in nature satisfy the demands of due process as they apply to administrative proceedings. The court concludes the procedures do so and affirms the judgment of the circuit court. I cannot join my colleagues because their decision and opinion manifest a “talismanic reliance on labels” rather than a “sensitive consideration of the procedures required [in the circumstances] by due process.” Board of Curators v. Horowitz, 435 U.S. 78, 106 (1978) (Marshall, J., dissenting) (footnote omitted).
I.
A.
The Coastal Zone Management Act represents “a comprehensive State regulatory scheme to protect the environment and resources of our shoreline areas.” Mahuiki v. Planning Comm’n, 65 Haw. 506, 517, 654 *383P.2d 874, 881 (1982). And any development of real property in areas designated as special management areas must be consistent with the objectives and policies of the Act. The implementation of its provisions, however, “has been delegated in large part to the counties, and they are responsible for the administration of the special management area use permit procedure and requirements.” Id. “State primacy nevertheless has been retained as HRS §§ 205A-4 and 205A-28 make clear, and the legislature has sought to maintain the integrity of its declared policy by providing guidelines in HRS § 205A-26 to be followed by the counties in reviewing applications for SMA use permits.” Id. at 517-18, 654 P.2d at 881 (footnote omitted).
By virtue of HRS § 205A-26(2) no development in a special management area can be approved unless the county permit-granting authority first finds:
(A) That the development will not have any substantial adverse environmental or ecological effect, except as such adverse effect is minimized to the extent practicable and clearly outweighed by public health, safety, or compelling public interests. Such adverse effects shall include, but not be limited to, the potential cumulative impact of individual developments, each one of which taken in itself might not have a substantial adverse effect, and the elimination of planning options;
(B) That the development is consistent with the objectives, policies, and special management area guidelines of this chapter and any guidelines enacted by the legislature; and
(C) That the development is consistent with the county general plan and zoning.
The City and County of Honolulu’s legislative arm designated itself as the county permit-granting authority pursuant to HRS § 205A-22; it also adopted procedures governing the consideration of special management area use permit applications pursuant to HRS § 205A-29. These procedures are delineated in chapter 33 of the Revised Ordinances of Honolulu. Section 33-5.3 of the relevant ordinance, consistently with HRS § 205A-29, provides for public hearings on permit applications; but *384it is silent on whether the contested-case procedures of the Hawaii Administrative Procedure Act, HRS chapter 91, or other procedures are to be followed. Section 33-9.1 of the ordinance further states that “[a]ppeals shall be in accordance with section 205A-6, Hawaii Revised Statutes!,]” which “affords an interested party an alternative remedy for an agency’s noncompliance with the CZMA by authorizing a civil action in which a circuit court ‘shall have jurisdiction to provide any relief as may be appropriate.’ HRS § 205A-6(c).” Kona Old Hawaiian Trails Group v. Lyman, 69 Haw. _, _, 734 P.2d 161, 169 (1987).
B.
The developer’s application for a permit was received in February of 1986, and the City’s Department of LandUse conducted a hearing thereon in April of 1986.1 The department’s recommendation of approval of the proposed development was forwarded to the City Council shortly thereafter. The Council reviewed the matter on a number of occasions and scheduled a public hearing approximately a year after receiving the department’s recommendation. The hearing was attended by over eighty persons who were allowed to express their objections to or support for the proposed development In format, the hearing was no different from hearings conducted by the Council in considering proposals for legislative action. Further testimony was received at a Council meeting held on April 15,1987 and the development permit was granted on the same day.
Several organizations and individuals who voiced objections to the development challenged the Council action by filing two suits in the circuit court on May 12,1987. They invoked the court’s jurisdiction under HRS § 91 — 14(g) in one and under HRS § 205A-6 in the other. The circuit court dismissed the suits on January 29,1988, agreeing with the City and the developer that the sole issue in the case, whether the Council was obliged to conduct a contested case hearing before issuing a development permit, had been decided earlier when the plaintiffs’ motion for summary judgment was denied. The plaintiffs perfected a timely appeal thereafter.
*385II.
A.
In affirming the judgment of the circuit court, this court concludes:
(1) “the City Council, as the legislative branch of the County, is not subject to the procedural requirements of [the Hawaii Administrative Procedure Act] when acting in either a legislative or non-legislative capacity[;]”
(2) “the legislature intended the hearing held by the county authority in conjunction with the application for an SMA use permit [to] be informational in nature in order to permit members of the public to present their views and relevant data as an aid to the administrative decision on the particular application as well as long-term planning policy for the entire coastal area[;]”
(3) the interests Appellants sought to protect did not “rise to the level of ‘property’ within the meaning of the due process clause[;]” and
(4) assuming “that Appellants can demonstrate protectible property interests sufficient to trigger procedural due process protection,” the proceedings before the Council “satisfied the requirements of procedural due process.”
Unlike my colleagues, I conclude:
(1) the exemption of the legislative branch from coverage under the Administrative Procedure Act is of no consequence;
(2) the hearing conducted by the Council could not have been “informational in nature”;
(3) the Appellants have standing to challenge the Council action in court; and
(4) the hearing conducted by the Council did not meet the demands of due process.
The court’s opinion, in my view, exhibits an insensitivity to the objectives and policies of the Coastal Zone Management Act, the public and private interests protected thereby, and the demands of due process. Moreover, the opinion in no way explains how the procedures followed by the Council could possibly meet the requirements of due process in a *386case where a property owner’s permit application is denied after a council “hearing” and he “appeals” from the resolution denying the application “in accordance with section 205A-6, Hawaii Revised Statutes[,]” as directed by section 33-9.1 of the Revised Ordinances of Honolulu.
B.
Inasmuch as the City Council “administered a law already in existence” when it issued the use permit, our concern in this appeal is with administrative law, the branch of the law that “sets forth the powers that may be exercised by administrative agencies, lays down the principles governing the exercise of those powers, and provides legal remedies to those aggrieved by administrative action.” B. Schwartz, Administrative Law § 1.1, at 2 (2d ed. 1984). Among the basic principles that hold administrative action to the rule of law are the following:
(1) government must practice fairness in its dealings with the citizen; and
(2) an administrative agency does not have the last word on any action taken by it.
See B. Schwartz, Fashioning An Administrative Law System, 40 Admin. L. Rev. 415, 419-31 (1988).
“Fundamental fairness” or “due process” is “a flexible concept.” Walters v. National Ass’n of Radiation Survivors, 473 U.S. 305, 320 (1985).
When the courts had to deal with the applicability of procedural due process to administrative agencies, they based their answer upon the distinction between legislative and judicial powers. If the case involved rulemaking, the courts naturally treated the administrative exercise of legislative powers similarly to the direct exercise of power by the legislature. The agency was no more bound by constitutional procedural requirements than the legislature itself when it enacts a statute. If adjudication was involved, the courts had a ready analogy in the judicial process.
B. Schwartz, Administrative Law § 5.6, at 211.
At bottom, in proceedings designed to apply policy-type standards in particular situations, the persons whose protected interests will be affected by the forthcoming administrative action “must be given notice and *387an opportunity to present their side of the case in a full and fair hearing.” B. Schwartz, supra, 40 Admin. L. Rev. at 424; see also Mortensen v. Board of Trustees, 52 Haw. 212, 473 P.2d 866 (1970) (An applicant for disability retirement benefits from the State Employees’ Retirement System is entitled to a trial-type hearing). And the impartial decisionmaker’s ruling must “rest solely on the legal rules and evidence adduced at the hearing.” Goldberg v. Kelly, 397 U.S. 254, 271 (1970).
Obviously too, the decisionmaker cannot have the last word on whether his decision is consistent with the statute that authorized him to act and whether there was fairness in the procedures he followed. “The supremacy of law demands that there shall be opportunity to have some court decide whether an erroneous rule of law was applied; and whether the proceeding in which facts were adjudicated was conducted regularly.” St. Joseph Stock Yards Co. v. United States, 298 U.S. 38, 84 (1936) (Brandeis, J., concurring).
III.
A.
The court recognizes that “the City Council’s approval of Kaiser’s SMA use permit application was a non-legislative act because it administered a law already in existence, the Coastal Zone Management Act.” Relying on “the plain language of HRS § 91-1 and its legislative history,” it nonetheless concludes “the City Council, as the legislative branch of the County, is not subject to the procedural requirements of HAPA when acting in either a legislative or non-legislative capacity.”
Granted, an “agency” within the meaning of the term as defined by HRS § 91-1 does not include “those in the legislative or judicial branches.” But the “exception” from coverage under the Administrative Procedure Act by no means freed the Council from the fundamental requirement that any power it possesses, legislative or administrative, “be exercised in subordination to law.” B. Schwartz, supra, 40 Admin. L. Rev. at 415. It is immaterial whether the Council is subject to the procedural requirements of HAPA or not. The Council acted in a quasi-judicial *388capacity in administering a State law; it therefore was subject to the requirements of due process.
B.
Procedural due process demanded that the Council conduct a full and fair hearing in the judicial sense. The court, however, concludes “die hearing held by the county authority in conjunction with the application for an SMA use permit [was only intended to] be informational in nature.” In its view, this justified the legislative-type hearing conducted by the Council. But protected rights and interests were at stake, and a hearing more in the nature of a judicial, rather than a legislative, hearing was in order.
C.
The court, however, rules a “trial-type adjudicatory hearing” was not necessary. “[I]n order to assert a right to procedural due process,” it states, one “must possess an interest which qualifies as ‘property’ within the meaning of the constitution.” Aesthetic and environmental interests, it holds, do not “rise to the level of ‘property’ within the meaning of the due process clause[.]” Yet as the court observes, “due process is flexible and calls for such procedural protections as the particular situation demands.” Morrissey v. Brewer, 408 U.S. 471, 481 (1972).
The particular situation involved an application for a permit to develop land in an area where the legislature has declared special controls on developments “are necessary to avoid permanent losses of valuable resources and the foreclosure of management options, and to ensure that adequate access... to public owned or used beaches, recreation areas, and natural reserves is provided.” HRS § 205A-21. Implicated in the proceeding in question were the rights and interests of a property owner who owns land in the special management area extending inland from the shoreline, a developer who has contracted to develop the land, owners of nearby property, persons residing in the area of the proposed development, and the general public. The Council action was one “authorizing development, the valuation of which [far] exceeds $65,000 [and] which may have a substantial adverse environmental or ecological effectf.]” HRS § 205A-22(7). It escapes me why Appellants were not entitled to *389invoke procedural protections consistent with due process in the judicial sense.
That the “rights” of the landowner and the developer were subject to protection, of course, is beyond cavil; no one would question that they could “assert a right to procedural due process” in the processing of their permit application. While they have no need to invoke such right under the circumstances, the court’s decision consigns anyone seeking a special management area use permit, as well as anyone objecting to its issuance, to the vagaries of the political process where the decision will not “rest solely on the legal rules and evidence adduced at hearing.” Goldberg v. Kelly, 397 U.S. at 271.
But 1 believe the Appellants also have protected interests that allowed them to invoke procedural due process. These interests are those established and made judicially cognizable by the legislature under the statutory scheme designed “to preserve, protect, and where possible, to restore the natural resources of the coastal zone of Hawaii.” HRS § 205A-21. Among the natural resources designated for preservation, protection, and restoration are “recreational resources,” “historic resources,” “scenic and open space resources,” and “coastal ecosystems.” See HRS § 205A-2. In my view they constitute property “owned” by the public.
The mandate to the counties is that in implementing the foregoing objectives of the coastal zone management program “full consideration shall be given to ecological, cultural, historic, and esthetic values as well as to needs for economic development.” HRS § 205A-4. And “any person or agency” is given a right to “commence a civil action” seeking to remedy an agency’s failure to comply with the Coastal Zone Management Act HRS§205A-6. I can only conclude this vested concerned members of the public with protectible interests related to the natural resources of the coastal zone of Hawaii.
The court acknowledges that “we have recognized the importance of aesthetic and environmental interests in determining an individual’s standing to contest the issue[.]” But since “we have not found that such interests rise to the level of ‘property’ within the meaning of the due process clause,” it implies the Appellants were not subjected to deprivation they can complain about. Still, we are expounding legislatively created *390interests in natural resources deemed worthy of protection through judicial processes invocable by “any person or agency.”
D.
Though it finds no grounds for the assertion by Appellants of a right to due process, the court gratuitously concludes “the proceedings conducted by the City Council in acting upon Kaiser’s SMA use permit application satisfied the requirements of procedural due process.” What the Council did was aptly described by the circuit court when it said:
They’re acting as a legislature; they have legislative hearings. People are given notice, they’re allowed to show up and be heard, and then the politics decide the issue, whichever way they go.
This court characterizes the hearing before the Council as being “informational in nature in order to permit members of the public to present their views and relevant data as an aid to the administrative decision on the particular application as well as long-term planning policy for the entire coastal area.”
But as we observed, a legislative or informational hearing does not satisfy the requirements of due process where legal rights and interests are to be determined by “the administrative decision on the particular application” of a statute enacted by the legislature. A particular application of the guidelines the Council was bound by law to follow turned on facts. “[W]here important decisions turn on questions of fact, due process requires an opportunity to confront and cross-examine adverse witnesses.” Goldberg v. Kelly, 397 U.S. at 269 (citation omitted). Just being “allowed to show up and be heard” is not enough.
Due process further requires that the evidence proving an opponent’s case be “disclosed to the individual so that he has an opportunity to show .. .it is untrue.” Greene v. McElroy, 360 U.S. 474, 496 (1959). “A hearing is not judicial, at least in any adequate sense, unless the evidence can be known.” West Ohio Gas Co. v. Public Util. Comm’n (No. 1), 294 U.S. 63, 69 (1935). It was conceded at oral argument that there were ex parte contacts between members of the Council and persons interested in the outcome of the proceeding. If the Council were acting in its customary role, this would have posed no problem; but it was not.
*391Ex parte contacts breach a fundamental principle of administrative law, “exclusiveness of the record.” Thereunder, the “decisionmaker’s conclusion must rest solely on the evidence adduced at the hearing.” B. Schwartz, Administrative Law § 7.13, at 367 (footnote omitted).
The exclusiveness principle and its foundation were well stated by Chief Justice Vanderbilt: ‘“Where á hearing is prescribed by statute, nothing must be taken into account by the administrative tribunal in arriving at its determination that has not been introduced in some manner into the record of the hearing.’... Unless the principle is observed, the right to a hearing itself becomes meaningless. Of what real worth is the right to present evidence and to argue its significance at a formal hearing, if the one who decides the case may stray at will from the record in reaching his decision? Or consult another’s findings of fact, or conclusions of law, or recommendations ... ?”
Id. at 367-68 (footnote omitted).
Prevention of ex parte contacts, however, is not the only purpose served by the principle. There are other sound reasons why it is followed in administrative law:
First, it helps ensure that the agency does not make decisions without an adequate basis in fact; second, it gives opposing parties the opportunity to challenge the agency’s reasoning process and the correctness of its decision; and third, it affords reviewing courts full opportunity to evaluate the decision.
Id. at 368 (footnote omitted).
Since the Appellants were not afforded due process, I would vacate the judgment and remand the case to the circuit court with instructions to void the permit issued to Kaiser Development Company.

 The department’s role in the processing of permit applications is merely advisory. Thus, the hearing it conducted was not a contested-case hearing within the meaning of the Hawaii Administrative Procedure Act. See HRS § 91-1(5).