Court Opinion

ID: 2812846
Source: CourtListenerOpinion
Date Created: 2015-06-30 02:06:32.081151+00
Date Added: 2024-06-11T12:19:10.079881
License: Public Domain

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                                                              Electronically Filed
                                                              Supreme Court
                                                              SCWC-13-0003857
                                                              29-JUN-2015
                                                              02:46 PM

            IN THE SUPREME COURT OF THE STATE OF HAWAI#I

                                ---o0o---

       POFOLK AVIATION HAWAII, INC., and HALE O#LELE CORP.,
                Petitioners/Plaintiffs-Appellants,

                                    vs.

     DEPARTMENT OF TRANSPORTATION FOR THE STATE OF HAWAI#I,
    GLENN M. OKIMOTO, FORD FUCHIGAMI, and SIDNEY A. HAYAKAWA,
                Respondents/Defendants-Appellees.

                             SCWC-13-0003857

           CERTIORARI TO THE INTERMEDIATE COURT OF APPEALS
               (CAAP-13-0003857; CIV. NO. 13-1-0787-03)

                              JUNE 29, 2015

 RECKTENWALD, C.J., NAKAYAMA, McKENNA, POLLACK, AND WILSON, JJ.

              OPINION OF THE COURT BY RECKTENWALD, C.J.

            This case involves the validity of airport landing fees

imposed by the Department of Transportation Airport Division

(DOT-A).    DOT-A leases Dillingham Airfield on the island of O#ahu

(Dillingham Airfield) from the United States Army.           Since DOT-A
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began leasing the airfield from the Army, DOT-A has imposed

landing fees on commercial users, including Petitioners/

Plaintiffs-Appellants Pofolk Aviation Hawai#i, Inc., and Hale

O#lele Corp. (collectively “Pofolk”).

             In late 2012, DOT-A claimed that Pofolk owed DOT-A a

total of $264,994.99 in unpaid landing fees.            Pofolk paid a

portion of this amount under protest.           Pofolk also filed a

lawsuit and sought temporary and permanent injunctions preventing
DOT-A from imposing additional fees against Pofolk, and a

declaration that an administrative rule of DOT-A was invalid to

the extent it established the rate of landing fees at the

airfield.     Specifically, Pofolk claimed that DOT-A had violated

Hawai#i Revised Statutes (HRS) § 261-12(a), which provided that

“[n]o rule of the director [of transportation] shall apply to

airports . . . owned or operated by the United States.”                The

circuit court denied Pofolk’s request for injunctive relief and

entered a final judgment on the merits in favor of DOT-A, and the

Intermediate Court of Appeals (ICA) affirmed.            For the reasons

set forth below, the judgment of the ICA is affirmed, as

clarified herein.

                               I.   Background1

A.     Dillingham Airfield

             Dillingham Airfield is used primarily for commercial

glider, sky diving, and flight training operations.              DOT-A has

       1
             The facts are undisputed except where stated otherwise.

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operated Dillingham Airfield under a lease from the United States

Army (Army Lease) continually since 1983.         Clause 32 of the Army

Lease, titled “Additional Site Conditions,” provides, in relevant

parts:

           b. That the lessee’s use of Dillingham Airfield shall
           be limited to the construction, operation, repair, and
           maintenance of a public airport facility . . . .

           c. That the use of Dillingham Airfield is subject to
           the following operational provisions:

                 (I) That the primary purpose of the land and
           improvements within the leased area is for the
           operation of a joint-use-airport.
                 . . . .

           DOT-A imposes fees on users of Dillingham Airfield,

including Pofolk.

           Two statutes at the heart of this dispute, HRS §§ 261-

12(a) and 261-7(e), set forth the scope of DOT-A’s authority to

impose such fees.

           At all times pertinent to the instant dispute, HRS

§ 261-12(a) (2007) provided:

           Powers to adopt. The director of transportation may
           perform such acts, issue and amend such orders, adopt
           such reasonable general or special rules and
           procedures, . . . as the director deems necessary to
           carry out this chapter and to perform the duties
           assigned thereunder, all commensurate with and for the
           purpose of protecting and insuring the general public
           interest and safety, the safety of persons operating,
           using, or traveling in aircraft, and the safety of
           persons and property on land or water, and developing
           and promoting aeronautics in the State. No rule of
           the director shall apply to airports or air navigation
           facilities owned or operated by the United States.

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(Emphasis added).2

            HRS § 261-7(e) (Supp. 2013) provides, in relevant

parts:

            The department may fix and regulate, from time to
            time, reasonable landing fees for aircraft, including
            the imposition of landing surcharges or differential
            landing fees, and other reasonable charges for the use
            and enjoyment of the airports and the services and
            facilities furnished by the department in connection
            therewith, including the establishment of a statewide
            system of airports landing fees . . . for the purpose
            of meeting the expenditures of the statewide system of
            airports . . . .

            . . .

            If the director has not entered into contracts,
            leases, licenses, and other agreements with any or
            fewer than all of the aeronautical users of the
            statewide system of airports prior to the expiration
            of an existing contract, lease, license, or agreement,
            the director shall set and impose rates, rentals,
            fees, and charges pursuant to this subsection without
            regard to the requirements of chapter 91; provided
            that a public informational hearing shall be held on
            the rates, rentals, fees, and charges. . . .

            The director shall develop rates, rentals, fees, and
            charges in accordance with a residual methodology so
            that the statewide system of airports shall be, and
            always remain, self sustaining. . . .

(Emphasis added).

            DOT-A imposes fees on users of Dillingham Airfield

through DOT-A Procedure 4.5.04 § E, which provides, in relevant

part:

      2
            On July 1, 2015, an amendment to HRS § 261-12(a) will take effect.
The amendment repeals the last sentence, which states, “[n]o rule of the
director shall apply to airports or air navigation facilities owned or
operated by the United States.” Act 024 (May 4, 2015). However, we apply the
2007 version of the statute to the instant dispute.

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             Any aircraft operator who is not a party to an
             Airport-Airline Lease, landing at a state airport
             shall pay airports system fees and charges as
             established by Hawai#i Administrative Rules of the
             Department of Transportation.

             Although this procedure directs airport users to pay

fees for landing, the rates of such fees are specified in HAR

§ 19-16.1-3, which has been adopted pursuant to chapter 91:

             There shall be imposed an airports system landing fee
             under this chapter for the purpose of recovering costs
             attributable to the airfield activity center; this fee
             shall be based on landings at an airport in the
             airports system. The airports system landing fee for
             an overseas landing at an airport in the airports
             system shall be $2.980 per one thousand pounds of
             approved maximum landed weight. The airports system
             landing fee for an interisland landing at an airport
             in the airports system shall be $0.954 per one
             thousand pounds of approved maximum landed weight.

B.     Pofolk’s Unpaid Landing Fees

             Pofolk is a Hawai#i corporation whose commercial sky

diving and parachuting operations are based out of Dillingham

Airfield.     Pofolk is a “non-signatory carrier,” i.e., it is not

party to an Airport-Airline Lease that specifies rates and fees

for its activities at Dillingham Airfield.            In late 2012, a

dispute arose between DOT-A and Pofolk over Pofolk’s unpaid

landing fees.

             By letter dated December 17, 2012, Pofolk, through

counsel, agreed to file all required reports and pay all past and

future landing fees that were lawfully owed subject to an

agreement that the fees would be paid under protest.              Pofolk also

stated that if DOT-A would resolve Pofolk’s outstanding permit

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issues, allow it to construct a hangar at Dillingham Airfield,

and allow it to use Hana Airport, Pofolk would continue paying

the landing fees and not pursue litigation.

             In a letter dated February 20, 2013, DOT-A claimed that

Pofolk had not reported any landings since the end of November

2012.    DOT-A also informed Pofolk that it owed DOT-A a total of

$264,994.99, and demanded payment for the full amount owed.

             On February 28, 2013, Pofolk sent $50,837.99 “as
partial payment for the disputed landing fees.”             Pofolk stated

that the payment was being made “under protest and without

prejudice to [Pofolk’s] contentions that [it] is exempt and

should not be required to pay any amount of landing fees.”

C.     Circuit Court Proceedings

             On March 14, 2013, Pofolk filed a complaint in the

Circuit Court of the First Circuit of Hawai#i (circuit court)

against DOT-A.3      Pofolk prayed for the following relief:          (1) the

return of landing fees of $50,837.99 paid under protest, and

interest on that sum; (2) a declaration that HAR § 19-16.1-3 is

invalid to the extent that DOT-A seeks to impose landing fees for

flights landing at Dillingham Airfield, because such fees

conflict with DOT-A’s limited statutory authority in HRS § 261-

12(a) to promulgate and enact rules, and that Pofolk has been and

       3
            Pofolk named as defendants in their official capacities Glenn M.
Okimoto, the Director of DOT, Ford Fuchigami, the Deputy Director of DOT-A,
and Sidney A. Hayakawa, the Staff Services Branch Administrative Officer for
DOT-A.

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is exempt from all such landing fees; and (3) injunctive relief

preventing and prohibiting DOT-A from imposing any further

landing fees against Pofolk and/or taking further actions to

coerce Pofolk to pay these fees, including, but not limited to,

evicting Pofolk from Dillingham Airfield.

           On April 8, 2013, DOT-A filed an answer and

counterclaim, alleging that the imposition of landing fees is

lawful and authorized by DOT-A procedure, and Pofolk’s landing
fees are immediately due.      Also on April 8, 2013, Pofolk moved

for a preliminary and permanent injunction to prevent DOT-A from

imposing “illegal and unauthorized” landing fees for landings at

Dillingham Airfield and/or taking any actions to collect,

enforce, or otherwise execute upon any such purportedly

outstanding fees.

           On May 9, 2013, at the conclusion of a hearing on

Pofolk’s motion for preliminary and permanent injunctions, the

circuit court4 orally concluded that Pofolk had not shown any

irreparable injury because it could be compensated financially

(i.e., it could cover the fees through charging customers to

their commercial sky diving operation, or recover them later from

DOT-A), and that the public interest weighed in favor of not

granting an injunction because the public would be better served

by having the airfield available, and taxpayers would be burdened

if DOT-A could not collect landing fees.

     4
           The Honorable Edwin C. Nacino presided.

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            On August 1, 2013, the circuit court entered an order

denying Pofolk’s motion.       The circuit court concluded that

pursuant to HRS § 261-7(e), which authorizes DOT-A to impose fees

“without regard to the requirements of chapter 91,” DOT-A is not

required to establish landing fees through the HAR rule-making

process.    The circuit court also concluded that DOT-A’s

“requirement for aeronautical users . . . to pay landing fees at

Dillingham Airfield is established by . . . DOT-A’s procedures,”
and as such, although the rates of the fee are determined by

reference to the HAR, DOT-A has the power to impose landing fees

through its procedures.

            Pursuant to a stipulation and order of the parties

approved by the trial court on September 20, 2013, the trial

court entered an order on September 23, 2013:           (1) ruling that

the hearing already held shall be considered a hearing on the

merits of Pofolk’s cause of action for a permanent injunction,

and based on the reasoning of the August 1, 2013 Order, Pofolk’s

claim for a permanent injunction was denied; and (2) dismissing

all other claims, counterclaims, and defenses of the parties

without prejudice.5     Accordingly, on September 23, 2013, the

trial court entered judgment for DOT-A denying Pofolk’s claims

for relief.

      5
            Because the trial court entered final judgment on the merits based
on stipulation of the parties that the circuit court’s hearing would be
considered a consolidated trial on the merits, on certiorari, we do not
address Pofolk’s claim for temporary injunctive relief; rather, we decide this
case on the merits.

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D.     ICA Proceedings

             On October 24, 2014, the ICA affirmed the circuit

court’s denial of Pofolk’s motion for temporary and permanent

injunctions.     Pofolk Aviation Hawai#i, Inc. v. Dep’t of Transp.

for the State of Hawai#i, 134 Hawai#i 255, 339 P.3d 1056 (App.

2014).    The ICA relied almost exclusively on DOT-A’s construction

of HRS § 261-12(a):

             In the instant case, the DOT’s employee, Hayakawa,
             declared HRS § 261–12(a) empowered the DOT to “adopt
             such reasonable general or special rules and
             procedures . . . as the director deems necessary to
             carry out this chapter and to perform duties assigned
             thereunder[.]” Hayakawa represented that at
             Dillingham Airfield, revenues generated from landing
             fees and other charges from aircraft operators,
             pursuant to the DOT procedures, are part of a
             calculation of rates and fees in compliance “with the
             statutory mandate that the statewide system of
             airports be financially self-sustaining.”[]

             The DOT interpreted the limitation of HRS § 261–12(a)
             (2007 Repl.) on the DOT’s authority to apply its rules
             to a federally owned airport as inapposite to DOT’s
             authority to impose landing fees at Dillingham
             Airfield pursuant to the DOT procedures. Hayakawa
             declared the DOT had established its written
             procedures “[s]eparate and apart from creating rules
             pursuant to [HRS] Chapter 91” and HRS § 261–12 “has
             never been interpreted by [the DOT] as prohibiting
             [the DOT] from operating it as a state airport
             facility, collecting fees, charges and rents imposed
             by its Procedures. . . .”

             In assessing the DOT’s construction of HRS §
             261–12(a), we note that “[a]lthough not controlling,
             the uniform practical construction of a statute by
             those charged with carrying out the statute is
             entitled to much weight.” Chun v. Employees’ Ret.
             Sys., 61 Haw. 596, 602, 607 P.2d 415, 419 (1980)
             (citing Keller v. Thompson, 56 Haw. 183, 532 P.2d 664
             (1975); Territory v. Honolulu Rapid Transit & Land
             Co., 23 Haw. 387 (1916)); see also Fratinardo v.
             Employees’ Ret. Sys. of State of Hawai#i, 129 Hawai#i

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           107, 115–16, 295 P.3d 977, 985–86 (App. 2013).

           Our assessment of the DOT’s practices is further
           informed by Hayakawa’s declarations that the DOT “has
           always exercised control” over Dillingham Airfield
           operations, users, and tenants; its users “regularly
           paid the assessed landing fees[;]” and “[t]his
           litigation is the first time Plaintiffs, or anyone
           else has claimed that they are not obligated to pay
           such fees because the Airfield is owned by the federal
           government.” Hayakawa’s declaration constituted
           evidence of the DOT’s consistent and generally
           unchallenged practice of assessing landing fees and
           charges against users of Dillingham Airfield. Hawai#i
           courts will not overturn administrative agency
           practices that have been

                 consistent and generally unchallenged
                 . . . except for very cogent reasons if
                 the scope of the command is indefinite and
                 doubtful. . . . The practice has peculiar
                 weight when it involves a contemporaneous
                 construction of a statute by the men
                 charged with the responsibility of setting
                 its machinery in motion, of making the
                 parts work efficiently and smoothly while
                 they are yet untried and new.

           Treloar v. Swinerton & Walberg Co., 65 Haw. 415, 424,
           653 P.2d 420, 426 (1982) (quoting Norwegian Nitrogen
           Products Co. v. U.S., 288 U.S. 294, 315, 53 S. Ct. 350,
           77 L. Ed. 796 (1933)).

           According much weight to the DOT’s construction of HRS
           § 261–12(a) and in light of their consistent practice
           of assessing landing fees at Dillingham Airfield, we
           conclude Plaintiffs’ contention does not establish the
           DOT’s interpretation was palpably erroneous and the
           circuit court did not err by determining that the
           DOT’s assessment of landing fees at Dillingham
           Airfield against Plaintiffs did not constitute a
           violation of HRS § 261–12(a)’s prohibition against
           applying the DOT “rules” to federally owned or
           operated airports.

134 Hawai#i at 262-63, 339 P.3d at 1063-64 (footnote omitted

noting DOT-A’s reference to and quoting HRS § 261-7(e)).

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                         II.    Standard of Review

            Hawai#i appellate courts

            generally review[] questions of statutory interpretation 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) (internal quotations and citation marks

omitted).

            When interpreting two different statutes that relate to

the same subject matter, this court has adopted the following

standards:

            First, legislative enactments are presumptively valid
            and should be interpreted in such a manner as to give
            them effect. Second, laws in pari materia, or upon
            the same subject matter, shall be construed with
            reference to each other. What is clear in one statute
            may be called in aid to explain what is doubtful in
            another. Third, where there is a plainly
            irreconcilable conflict between a general and a
            specific statute concerning the same subject matter,
            the specific will be favored. However, where the
            statutes simply overlap in their application, effect
            will be given to both if possible, as repeal by
            implication is disfavored.

Id. (alterations, quotation marks, and citations omitted).

                               III.   Discussion

            On certiorari, Pofolk presents the following question:

            Whether the ICA erred in stretching HRS § 261-12(a)
            beyond its plain meaning in concluding that the
            DOT-A’s setting and imposition of landing fees at
            Dillingham Airfield, which is owned by the United

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            States, does not constitute a violation of HRS § 261-
            12(a).

(Emphasis in original).

            Thus, we must determine whether the last sentence of

HRS § 261-12(a), which states, “[n]o rule of the director shall

apply to airports or air navigation facilities owned or operated

by the United States,” precludes DOT-A from setting and imposing

landing fees at Dillingham Airfield through a DOT-A procedure
that references the HAR for the landing fee rates.            We conclude

that DOT-A’s authority to impose landing fees by reference to HAR

§ 19-16.1-3 does not conflict with HRS § 261-12(a).

            Pofolk explicitly acknowledges that DOT-A has the

authority to impose landing fees at Dillingham Airfield.             Based

on HRS §§ 261-12(a) and 261-7(e), we agree.           HRS § 261-12(a)

provides:

            The director of transportation may perform such acts,
            issue and amend such orders, adopt such reasonable
            general or special rules and procedures, and establish
            such minimum standards, consistent with this chapter,
            as the director deems necessary to carry out this
            chapter and to perform the duties assigned thereunder,
            all commensurate with and for the purpose of
            protecting and insuring the general public interest
            and safety, the safety of persons operating, using, or
            traveling in aircraft, and the safety of persons and
            property on land or water, and developing and
            promoting aeronautics in the State. No rule of the
            director shall apply to airports or air navigation
            facilities owned or operated by the United States.

(Emphasis added).

            HRS § 261-7(e) (Supp. 2013) provides, “the director

shall set and impose rates, rentals, fees, and charges pursuant

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to this subsection without regard to the requirements of chapter

91.”   Thus, HRS § 261-7(e) grants DOT-A the authority to impose

landing fees without following the rule-making requirements of

HRS chapter 91.

           Pofolk argues that the reference in DOT-A Procedure

4.5.04 § E to “fees and charges as established by Hawai#i

Administrative Rules of [DOT-A]” constitutes an application of a

‘rule of the director’ to an airport ‘owned or operated by the
United States,’ in violation of the last sentence of HRS § 261-

12(a).   Pofolk argues that DOT-A must impose the landing fees

“without reference to rules adopted by the DOT pursuant to

chapter 91.”

           Pofolk further argues that HRS § 261-7(e) and HRS

§ 261-12(a), as laws on the same subject matter, should be

construed together, and that because there is a “plainly

irreconcilable conflict,” the more specific statute, HRS § 261-

7(e), should be favored over the more general statute, HRS § 261-

12(a).   Thus, according to Pofolk, when considered in pari

materia, HRS § 261-7(e) and HRS § 261-12(a) authorize and require

DOT-A to establish landing fees, and further require DOT-A to do

so “without reference to rules” adopted pursuant to chapter 91.

           However, HRS § 261-7(e) does not provide that DOT-A

shall impose landing fees “without reference to rules” adopted by

DOT-A pursuant to chapter 91; rather, the statute provides that

DOT shall impose landing fees “without regard to the requirements

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of chapter 91.”    (Emphasis added).      Thus, DOT-A does not need to

satisfy the rule-making requirements in chapter 91 when imposing

landing fees.

           Nevertheless, Pofolk’s claim does reveal an ambiguity.

The reference to “rules” in HRS § 261-12(a) is ambiguous because

a DOT-A procedure that requires aircraft operators to pay the

fees does not directly set forth the landing fee rates; rather,

it refers to a rule which sets forth the rates.           Thus, it is
unclear whether a DOT-A procedure incorporating by reference a

rule setting landing fee rates equates to a “rule” under HRS

§ 261-12(a).

           “Statutory analysis begins by examining the plain

language of the statute at issue.”        Chung Mi Ahn v. Libery Mut.

Fire Ins. Co., 126 Hawai#i 1, 11, 265 P.3d 470, 480 (2011)

(citations omitted).     “When there is doubt, doubleness of

meaning, or indistinctiveness or uncertainty of an expression

used in a statute, an ambiguity exists.”         Gillan, 119 Hawai#i at

117, 194 P.3d at 1079 (quotation marks and citations omitted).

“[I]n construing an ambiguous statute, the meaning of the

ambiguous words may be sought by examining the context, with

which the ambiguous words, phrases, and sentences may be

compared, in order to ascertain their true meaning.”            Kewalo

Ocean Activities v. Ching, 124 Hawai#i 313, 317, 243 P.3d 273,

277 (2010).

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            Furthermore, “[d]eparture from the literal construction

of a statute is justified if such a construction yields an absurd

and unjust result obviously inconsistent with the purposes and

policies of the statute.”       Schmidt v. HSC, Inc., 131 Hawai#i 497,

508, 379 P.3d 416, 427 (2014) (internal quotation marks and

citation omitted).

            According to DOT-A’s interpretation, HRS § 261-12(a)

does not prohibit DOT-A from imposing landing fees at Dillingham
Airfield because fees are imposed through DOT-A procedure, not a

rule.   DOT-A argues that HAR § 19-16.1-3, an administrative rule,

merely specifies the landing fee rate, but does not provide the

authority to actually impose the fee.6

            The ICA, “[a]ccording much weight to the DOT’s

construction of HRS § 261-12(a) and in light of [DOT-A’s]

consistent practice of assessing landing fees at Dillingham

Airfield,” concluded that DOT-A’s interpretation of HRS § 261-

12(a) is not palpably erroneous.        Thus, the ICA concluded that

the statute does not negate DOT-A’s authority to impose fees

under HRS § 261-7(e).      In doing so, the ICA quoted Chun v.

Employees’ Retirement System, 61 Haw. 596, 602, 607 P.2d 415, 419

(1980), which states, “[a]lthough not controlling, the uniform
      6
            DOT-A also argues that the word “or” in the last sentence of HRS
§ 261-12(a) should be read as “and” pursuant to HRS § 1-18. HRS § 1-18
provides that “[e]ach of the terms ‘or’ and ‘and’, has the meaning of the
other or of both.” Under this reading, the last sentence of HRS § 261-12(a)
would read, “[n]o rule of the director shall apply to airports or air
navigation facilities owned and operated by the United States.” (Emphasis
added). However, because this is an alternative argument, we do not address
it here.

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practical construction of a statute by those charged with

carrying out the statute is entitled to much weight.”

           While we agree with the ICA that the administrative

agency’s interpretation is entitled to deference when we construe

an ambiguous statute that the agency is charged with

administering, nevertheless, we emphasize that the court must

still independently analyze the ambiguous statute to determine

whether the agency’s interpretation is palpably erroneous.             See
Chun, 61 Haw. at 600-02, 607 P.2d at 419 (the court first

analyzes the plain language of the statute, and then notes that

“our reading of the statute is also consistent with past

administrative practice of the” agency) (emphasis added)

(citations omitted).

           A comparison of HRS § 261-12(a) and HRS § 261-7(e) and

their apparent underlying policies, as well as a consideration of

the provisions in chapter 261 as a whole, and the legislative

history of HRS § 261-12(a), indicates that the legislature did

not intend for DOT-A to be precluded from setting landing fees at

Dillingham Airfield by referring to the rates set forth in the

HAR.

           HRS § 261-12 provides DOT-A with general rule-making

authority.   DOT-A may adopt rules “commensurate with and for the

purpose of protecting and insuring the general public interest

and safety, the safety of persons operating, using, or traveling

in aircraft, and the safety of persons and property on land or

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water, and developing and promoting aeronautics in the State.”

HRS § 261-12(a).    HRS § 261-12 does not mention rules relating to

imposing or setting the rate of landing fees.

           Indeed, there is also no mention whatsoever of “rules”

in HRS § 261-7(e)’s grant of authority for DOT-A to impose

landing fees.    There is also no prohibition in HRS § 261-7(e)

against imposing the landing fees at airports owned or operated

by the United States.     As the statute itself explains, the
purpose behind granting DOT-A the authority to impose landing

fees and other fees and charges is so that the “statewide system

of airports” is “self-sustaining.”        HRS § 261-7(e).      Thus, DOT-A

is granted the authority to set fees, and to do so at a rate such

that the fees are “at least sufficient to meet the expenditures

of the statewide system of airports.”         Id.   This is consistent

with the policy behind chapter 261 and the public interest in

having DOT-A “encourage, foster, and assist in the development of

aeronautics in the State and encourage the establishment of

airports and air navigation facilities.”         HRS § 261-2 (2007).

Consistent with and pursuant to this authority, DOT-A has

established a procedure that imposes landing fees on certain

users, which are not party to an Airport-Airline Lease, including

Pofolk.   See DOT-A Procedure 4.5.04 § E.

           Furthermore, Pofolk’s literal interpretation would

produce an absurd result that is inconsistent with the purposes

and policies of chapter 261.       See Schmidt, 131 Hawai#i at 508,

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379 P.3d at 427.     Under Pofolk’s interpretation of HRS §§ 261-

7(e) and 261-12(a), DOT-A is authorized to set landing fees

pursuant to HRS § 261-7(e) without meeting the rule-making

requirements of chapter 91, provided that a public hearing is

held, but if DOT-A follows the more stringent chapter 91

requirements and the landing fees are set forth in the HAR, then

those landing fees are invalid as applied to Dillingham

Airfield.7    It would be nonsensical to interpret the statutes as
stating that the exact same landing fee rates would be valid if

set forth in DOT-A’s procedures, but here they are invalid

because DOT-A provided more notice and a greater opportunity for

public input by setting the rates in accordance with chapter 91.

             Pofolk’s interpretation would also be inconsistent with

the policies behind chapter 261.         HRS § 261-2 provides, “[t]he

department of transportation shall have general supervision over

aeronautics within the State.        It shall encourage, foster, and

assist in the development of aeronautics in the State and

encourage the establishment of airports and air navigation

facilities.”     This language indicates a broad intent to allow

DOT-A to have general control over aeronautics.

             Moreover, in considering DOT-A’s broad general rule-

making authority under chapter 261, together with the stated

      7
             Pofolk concedes that the imposition of landing fees would not
violate HRS § 261-12(a) if the language in the HAR establishing the landing
rates had simply been “cut and pasted” into the procedure. See Oral Argument
at 8:10; 14:30, Pofolk Aviation Hawai#i, Inc. v. Dep’t of Transp. of the State
of Hawai#i, No. SCWC-13-0003857, available at
http://state.hi.us/jud/oa/15/SCOA_021915_3857.mp3.

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intent in HRS § 261-2 that DOT-A “encourage, foster, and assist

in the development of aeronautics in the State and encourage the

establishment of airports and air navigation facilities,” it is

apparent that the legislature intended to authorize DOT-A to set

and impose landing fees.

            For example, chapter 261 authorizes DOT-A to adopt

rules regarding, among other things, safety, welfare, aircraft

registration, air traffic, airport security, equipment, and motor
vehicles on the premises.       HRS § 261-13.5 (2007);8 HRS § 261-15.5

(2007);9 HRS § 261-12(b).10      The autority given to DOT-A in these

      8
            HRS § 261-13.5(b) provides, in pertinent parts:

            To the fullest extent possible within the State’s
            authority to act in the area of airport and air
            traffic safety, the department of transportation shall
            be responsible for promoting safe operating conditions
            and alleviating safety hazards due to air traffic
            congestion at airports under its control.

            . . . .

            Pursuant to sections 261-12 and 261-13, the director
            shall adopt such rules and standards which may include
            the assignment of particular runways for particular
            uses, the establishment of the number and types of
            aircraft allowed to use each public airport, and the
            use of similar measures where such actions may
            contribute to the segregation of different types of
            aircraft and to the reduction of peak air traffic
            usage at airports under state control.

(Emphasis added).
      9
            HRS § 261-15.5 provides, in pertinent part: “Unless an aircraft
is exempted by this section, no person shall operate or cause or authorize to
be operated any aircraft at an airport owned or controlled by the department,
unless the aircraft has a certificate of registration issued in accordance
with rules adopted by the department.” (Emphasis added).

      10
         HRS § 261-12(b) provides, in pertinent part: “[N]o tour aircraft
operation shall be permitted in any airport under the State’s control without
having a permit. The director shall adopt rules to regulate tour aircraft
operations by permit . . . .” (Emphasis added).

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statutes to adopt rules at airports under DOT-A’s control assists

in aeronautic development by promoting safety and efficiency.11

Similarly, DOT-A’s authority to impose landing fees also supports

aeronautic development because the landing fees keep the

statewide airport system self-sustaining.

            As Pofolk acknowledges, the authority granted by HRS

§ 261-7(e) to impose landing fees to make the statewide system of

airports self-sustaining includes imposing landing fees at
Dillingham Airfield.      Pofolk’s interpretation of HRS § 261-12(a),

however, would restrain options for making the statewide system

of airports self-sustaining, and is inconsistent with state

aeronautic development, a goal of DOT-A in HRS § 261-2.

            Furthermore, one apparent rationale of the last

sentence of HRS § 261-12(a) is to prevent state operational rules

from interfering with federal aeronautic operations.             The final

sentence in HRS § 261-12(a) originates in Section 13 of Act 32,

“An Act Relating to Aeronautics . . .” (Act 32), which was

enacted in 1947 by the Legislature of the Territory of Hawai#i.12

      11
            We note also that Pofolk’s literal interpretation of the last
sentence of HRS § 261-12(a) would create a clear conflict between HRS § 261-
12(a) and (b). Subsection (a) provides that “[n]o rule of the director shall
apply to airports or air navigation facilities owned or operated by the United
States,” but subsection (b) grants authority to DOT-A to “adopt rules to
regulate tour aircraft operations by permit” “in any airport under the State’s
control.” (Emphases added).

      12
            Act 32 provided, in pertinent part:

            The commission may perform such acts, issue and amend
            such orders, make promulgate, and amend such
            reasonable general or special rules, regulations and
            procedures and establish such minimum standards,
                                                                 (continued...)

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The act expressly declared that “all territorial airports and air

navigation facilities except those under military jurisdiction

and control” fell under the jurisdiction and control of the newly

created territorial aeronautics commission.           1947 Haw. Sess. Laws

Act 32 § 2 at 166 (emphasis added).            Act 32 further stated that

“by purchase, gift, devise, lease, [or] condemnation[,] . . .

[t]he commission is authorized to acquire rights and interests in

airports owned or controlled by others, for the purpose of
meeting a civilian need,” and “may fix and regulate . . .

reasonable landing fees . . . for the use and enjoyment of the

airports and the services and facilities furnished by the

commission . . . .”      Id. § 6(a) at 170; id. § 8(c) at 172

(emphasis added).

            Thus, through Act 32, the legislature intended to make

users of an airport leased to and operated by the commission–-but

owned by the United States–-subject to reasonable landing fees

“fix[ed] and regulate[d]” by the commission.           Moreover, because

Dillingham Airfield is leased to DOT-A under a lease that allows

      12
       (...continued)
            consistent with the provisions of this chapter, as it
            shall deem necessary to carry out the provisions of
            this chapter and to perform its duties hereunder: all
            commensurate with and for the purpose of protecting
            and insuring the general public interest and safety,
            the safety of persons operating, using or traveling in
            aircraft, and the safety of persons and property on
            land or water, and developing and promoting
            aeronautics in the Territory. No rule or regulation
            of the commission shall apply to airports or air
            navigation facilities owned or operated by the United
            States.

1947 Haw. Sess. Laws Act 32, § 13(a) at 174.

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DOT-A to control and operate Dillingham Airfield as a public

airfield for commercial skydiving and parachuting activities, and

DOT-A is not attempting to impose its rules or fees on any

federal operations, any concern about state operational rules

interfering with federal operations is not implicated here.

           In sum, as Pofolk acknowledges, DOT-A has the authority

to impose and set landing fees at Dillingham Airfield.            HRS

§ 261-12(a) does not preclude DOT-A from doing so through its
procedures, which DOT-A may adopt through less stringent

requirements than rules under chapter 91.         It would be

inconsistent with the policy behind HRS § 261-7(e) to permit

DOT-A to impose landing fees at Dillingham Airfield pursuant to a

procedure and yet invalidate the procedure just because it refers

to the HAR for a method of calculating the fee.           Accordingly, it

is not reasonable to presume that the legislature intended for

DOT-A to be precluded from referring to the HAR for the specific

rates of the landing fees.

                             IV.   Conclusion

           The ICA’s November 21, 2014 judgment on appeal is

affirmed, as clarified by this opinion.

Eric A. Seitz                       /s/ Mark E. Recktenwald
for petitioners
                                    /s/ Paula A. Nakayama
Jack A. Rosenzweig
for respondents                     /s/ Sabrina S. McKenna

                                    /s/ Richard W. Pollack

                                    /s/ Michael D. Wilson

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