Court Opinion

ID: 9962093
Source: CourtListenerOpinion
Date Created: 2024-04-22 18:03:07.246265+00
Date Added: 2024-06-11T08:19:49.969120
License: Public Domain

NOT FOR PUBLICATION IN WEST'S HAWAI‘I REPORTS AND PACIFIC REPORTER

                                                   Electronically Filed
                                                   Intermediate Court of Appeals
                                                   CAAP-XX-XXXXXXX
                                                   22-APR-2024
                                                   07:56 AM
                                                   Dkt. 81 SO

                            NO. CAAP-XX-XXXXXXX

                  IN THE INTERMEDIATE COURT OF APPEALS

                          OF THE STATE OF HAWAI‘I

              COMMITTEE FOR RESPONSIBLE LIQUOR CONTROL and
                 MADGE SCHAEFER, Plaintiffs-Appellants,
                                   v.
               LIQUOR CONTROL COMMISSION; DIRECTOR OF THE
         DEPARTMENT OF LIQUOR CONTROL; and the COUNTY OF MAUI,
                          Defendants-Appellees

          APPEAL FROM THE CIRCUIT COURT OF THE SECOND CIRCUIT
                        (CASE NO. 2CC171000185)

                       SUMMARY DISPOSITION ORDER
   (By:     Wadsworth, Presiding Judge, McCullen and Guidry, JJ.)

             Plaintiffs-Appellants, Committee for Responsible

Liquor Control and Madge Schaefer (collectively, Appellants),

appeal from the Final Judgment, filed October 17, 2017, by the

Circuit Court of the Second Circuit (circuit court).1             The Final

Judgment was entered pursuant to the circuit court's Order

     1
             The Honorable Rhonda I.L. Loo presided.
  NOT FOR PUBLICATION IN WEST'S HAWAI‘I REPORTS AND PACIFIC REPORTER

Denying Plaintiffs' Motion for Summary Judgment and Granting

Defendants' Motion for Judgment on the Pleadings (Order Granting

Motion), filed September 19, 2017.

          In this case, Appellants challenge the adoption of

amendments to the Rules Governing the Manufacture and Sale of

Intoxicating Liquor of the County of Maui (Commission Rules) in

2017, by Defendants-Appellees Liquor Control Commission

(Commission), Director of the Department of Liquor Control

(Director), and the County of Maui (County) (collectively,

Appellees).   Appellants' Amended Complaint contends that the

Commission violated the Sunshine Law notice requirements set

forth in Hawaii Revised Statutes (HRS) § 92-7 (2012 and 2015

Supp.), and the Hawaiʻi Administrative Procedure Act rule making

requirements set forth in HRS chapter 91.

          On appeal, Appellants contend that the circuit court

erred in concluding: (1) the Commission gave sufficient notice

of a public meeting, pursuant to HRS § 92-7, to review proposed

rule amendments; (2) Appellants claims were mooted by the

Commission's repeal of the challenged rule amendments; (3) the

County was not "engaging in rulemaking" by implementing "full

criminal background checks before issuing Class Ten special

licenses"; and (4) therefore, Appellees were entitled to

judgment on the pleadings, and Appellants were not entitled to

summary judgment.

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            Upon careful review of the record and relevant legal

authorities, and having given due consideration to the arguments

advanced and the issues raised by the parties, we resolve

Appellants' points of error as follows:

            (1) We first address the issue of mootness.2          In their

Amended Complaint, Appellants contended that the Commission's

notice of its February 8, 2017 meeting (February meeting) was

not sufficient to comply with HRS § 92-7.          The circuit court

determined that this issue was moot because Appellants were

challenging three specific rule amendments that were subject to

controversy and later repealed by the Commission.3

            Appellants contend the circuit court misunderstood

their complaint as only challenging the three controversial

rules when they actually sought to invalidate "all the

improperly adopted rule changes" on the February meeting agenda.

We agree.    Because Appellants' Amended Complaint appears to

challenge all of the rule changes, including those rule changes

that were not repealed, this issue is not moot.

     2      We review Appellants' points of error nos. 1 and 2 out of order
to first address the circuit court's mootness ruling.

      3     At the outset, we note that mootness is an issue of
justiciability. State v. Hewitt, 153 Hawai‘i 33, 42, 526 P.3d 558, 567
(2023), as corrected (May 18, 2023), recon. denied, No. SCWC-XX-XXXXXXX, 2023
WL 2706695 (Haw. Mar. 30, 2023).

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            (2) Appellants contend the circuit court erred by

determining that the Commission's notice of its February meeting

was sufficient under HRS § 92-7.          The record reflects that, on

January 6, 2017, the Commission published a Notice of Public

Hearing (January notice) in The Maui News to "amend[] certain

sections and subsections of the [Commission Rules]" at the

February meeting.     On February 1, 2017, the Commission published

an agenda for the February meeting (February agenda).

            A meeting agenda simultaneously satisfies HRS § 92-7's

written notice requirement if it describes the proposed rules,

and states where the proposed rules can be found pursuant to

HRS § 91-2.6 (2012).      HRS § 92-7.4     When interpreting a statute,

      4     HRS § 92-7 states, in pertinent part,

            (a) The board shall give written public notice of any
            regular, special, or rescheduled meeting, or any executive
            meeting when anticipated in advance. The notice shall
            include an agenda which lists all of the items to be
            considered at the forthcoming meeting, the date, time, and
            place of the meeting[.] . . . If an item to be considered
            is the proposed adoption, amendment, or repeal of
            administrative rules, an agenda meets the requirements for
            public notice pursuant to this section if it contains a
            statement on the topic of the proposed rules or a general
            description of the subjects involved, as described in
            section 91-3(a)(1)(A), and a statement of when and where
            the proposed rules may be viewed in person and on the
            Internet as provided in section 91-2.6. The means
            specified by this section shall be the only means required
            for giving notice under this part notwithstanding any law
            to the contrary.

            (b) The board shall file the notice in the office of the
            lieutenant governor or the appropriate county clerk's
            office, and in the board's office for public inspection, at
            least six calendar days before the meeting.

(Emphasis added).

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"[o]ur foremost obligation is to ascertain and give effect to

the intention of the legislature, which is to be obtained

primarily from the language contained in the statute itself."

Castro v. Melchor, 142 Hawaiʻi 1, 11, 414 P.3d 53, 63 (2018)

(citations omitted).

          On this record, we conclude that the February agenda

failed to provide a "statement of when and where the proposed

rules may be viewed in person and on the Internet as provided in

section 91-2.6."   Thus, the February agenda did not satisfy

HRS § 92-7's notice requirement.       Further, the January notice

did not provide sufficient notice because it neither included an

agenda nor was it filed with the county clerk.      Therefore, the

circuit court erred in concluding that notice for the February

meeting complied with HRS § 92-7.

          In light of our conclusion that Appellants' Amended

Complaint challenged all the rule amendments adopted at the

Commission's February 8, 2017 meeting, including those that were

not repealed, and our determination that the Commission did not

satisfy notice requirements pursuant to HRS § 92-7, we remand

the case for the circuit court to address the validity of these

rule amendments.

          (3) Appellants contend that the circuit court erred in

concluding that "the County's implementation of full criminal

background checks before issuing Class Ten special licenses is

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within its authority under HRS §281-53.5(a); and the County was

not engaging in rulemaking governed under HRS § 91-3 and subject

to Sunshine Law notice requirements, 'but rather determining

methods of enforcing a preexisting agency rule.'"5              Appellants

further contend that "[t]he circuit court clearly erred because

it is precisely because the County has the discretion to require

criminal background checks for Class 10 Special License that its

new policy was [a rule.]"         (Emphasis in original).       Appellants

request that this court "invalidate the new [2017] practices and

policies that interpret and implement the application process

and licensing process for Class 10 Special Licenses[.]"

              In July 2018, after the opening and answering briefs

were filed, two statutory amendments, to HRS §§ 281-31(j)6 and

      5     Appellants assert that, prior to 2017, the Commission did not
require applicants of Class 10 special licenses "for the sale of liquor for a
period not to exceed three days[,]" and "for the purpose of fundraising
events by nonprofit organizations[,]" to comply with criminal background
checks pursuant to HRS § 281-53.5(a) (2007). HRS § 281-31 (2017 Supp.).
Thus, Appellants allege that the Commission's implementation, in 2017, of
criminal background checks with regard to Class 10 license applicants
constitutes an invalid rule amendment under HRS chapter 91.

      6       HRS § 281-31(j) was renumbered and amended to add subsection (2)
as follows,

              (j) Class 10. Special license.

                    . . . .

              (2)   Notwithstanding any other section of this chapter to
                    the contrary, the commission shall waive any
                    hearings, fees, notarization of documents, submission
                    of floor plans and other governmental clearances, and
                    other requirements for the issuance of a class 10
                    license. The class 10 license granted under this
                    subsection for a fundraising event shall include the
                                                               (continued . . .)

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281-327 respectively, were signed into law.          These statutory

amendments provide, in relevant part and by their plain

language, that "[n]o criminal history record check under section

281-53.5 or 846-2.7 or any other section of this chapter shall

be required."

     6(...continued)

                 ability to auction off, at a live or silent auction,
                 liquor in sealed or covered glass, ceramic, or metal
                 containers or services that provide liquor. No
                 criminal history record check under section 281-53.5
                 or 846-2.7 or any other section of this chapter shall
                 be required. The commission may require proof of
                 liquor liability insurance for the fundraising event
                 and a current list of officers and directors if the
                 applicant is a nonprofit organization.

2018 Haw. Sess. Laws Act 91, § 1 at 441 (codified as amended at HRS § 281-
31(j) (2020)) (emphasis added).

     7     HRS § 281-32 was amended, in pertinent part, to provide:

                 . . . .

                 (b) Notwithstanding any other law to the contrary,
           the commission shall reduce submission requirements,
           including the waiving of hearings, fees, notarization of
           documents, submission of floor plans, and other
           requirements, to provide for the issuance of temporary
           licenses for the sale of liquor for a period not to exceed
           one day for fundraising events by nonprofit
           organizations. . . . No criminal history record checks
           under section 281-53.5 shall be required; provided that the
           commission may require a background check on the executive
           director of the nonprofit organization.

                 For purposes of this subsection, "nonprofit
           organization" means those charitable organizations
           recognized under state or federal law and exempt from
           federal taxes under section 501(c)(3) of the Internal
           Revenue Code.

                 (c) The commission may adopt rules to implement this
           section.

2018 Haw. Sess. Laws Act 92, § 1 at 442-43 (codified as amended at HRS § 281-
82(b) (2020)) (emphasis added).

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           Moreover, Commission Rule § 08-101-22(j) (2019) was

amended in 2019 to provide, consistent with the above statutory

amendments, that with respect to Class 10 special licenses,

           Notwithstanding any other section of chapter 281, HRS, to
           the contrary, the commission shall waive any hearings,
           fees, notarization of documents, submission of floor plans
           and other requirements for the issuance of a class 10
           license.

                  . . . .

           No background check under section 846-2.7, section 281-
           53.5, HRS, or any other section of chapter 281, HRS shall
           be required. The applicant shall provide a current list of
           officers and directors, if the applicant is a nonprofit
           organization. Unless waived by the commission, proof of
           liquor liability insurance shall be required.

Commission Rule § 08-101-22(j)(5) (emphasis added).

           Given the statutory and rule amendments set forth

above, this court is not able to provide the effective relief

that Appellants request in their opening brief.8           We dismiss

Appellant's point of error no. 3 as moot.          Hamilton ex rel.

Lethem v. Lethem, 119 Hawaiʻi 1, 5, 193 P.3d 839, 843 (2008)

("The [mootness] doctrine seems appropriate where events

subsequent to the judgment of the trial court have so affected

the relations between the parties that the two conditions for

justiciability relevant on appeal——adverse interest and

effective remedy——have been compromised.") (cleaned up).

      8     This Court ordered supplemental briefing as to whether, given the
statutory and rule amendments, which the parties had not previously
addressed, this Court could effectively grant the relief that Appellants seek
with regard to point of error no. 3. Appellees contend that point of error
no. 3 is moot. Appellants disagree. We conclude that point of error no. 3
is moot for the reasons discussed herein.

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          For the foregoing reasons, we dismiss Appellant's

point of error no. 3 as moot, and vacate in part the circuit

court's Order Granting Motion, filed September 19, 2017, and

Final Judgment, entered October 17, 2017.     We remand for further

proceedings consistent with this summary disposition order.

          DATED: Honolulu, Hawaiʻi, April 22, 2024.

On the briefs:
                                      /s/ Clyde J. Wadsworth
Lance D. Collins,                     Presiding Judge
for Plaintiffs-Appellants.
                                      /s/ Sonja M.P. McCullen
Kristin K. Tarnstrom,                 Associate Judge
Deputy Corporation Counsel,
County of Maui,                       /s/ Kimberly T. Guidry
for Defendants-Appellees.             Associate Judge

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