Court Opinion

ID: 871236
Source: CourtListenerOpinion
Date Created: 2013-05-25 02:15:11.242939+00
Date Added: 2024-06-11T15:36:42.437173
License: Public Domain

***FOR PUBLICATION IN WEST’S HAWAI#I REPORTS AND PACIFIC REPORTER***

          IN THE SUPREME COURT OF THE STATE OF HAWAI#I
                                                    Electronically Filed
                            ---o0o---               Supreme Court
                                                    30049
                        T.A. NO. 07-0086            27-APR-2011
                                                    08:02 AM
JOHN M. CORBOY and STEPHEN GARO AGHJAYAN, Plaintiffs-Appellants,

                                     vs.

   DAVID M. LOUIE,1 in his official capacity as Acting Attorney
 General, State of Hawai#i; COUNTY OF MAUI; and COUNTY OF KAUAI,
                       Defendants-Appellees.
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                          T.A. NO. 07-0099
    GARRY P. SMITH and EARL F. ARAKAKI, Plaintiffs-Appellants,

                                     vs.

   DAVID M. LOUIE, in his official capacity as Acting Attorney
   General, State of Hawai#i; and CITY AND COUNTY OF HONOLULU,
                       Defendants-Appellees.
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                          T.A. NO. 07-0102
             J. WILLIAM SANBORN, Plaintiff-Appellant,

                                     vs.

   DAVID M. LOUIE, in his official capacity as Acting Attorney
   General, State of Hawai#i; and COUNTY OF HAWAII, Defendants-
                            Appellees.
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                         T.A. NO. 08-0039
    In the Matter of the Tax Appeal of STEPHEN GARO AGHJAYAN,
                       Appellant-Appellant,

                                     and

             STATE OF HAWAI#I, Intervenor-Appellee.
----------------------------------------------------------------
                        T.A. NO. 08-0040
       In the Matter of the Tax Appeal of JOHN M. CORBOY,
                      Appellant-Appellant,

      1
            During the pendency of this action, David M. Louie (Louie)
succeeded Mark J. Bennett as Attorney General. Thus, pursuant to Hawai#i
Rules of Appellate Procedure Rule 43(c)(1) (2010), Louie has been substituted
automatically for Bennett in this case.
    ***FOR PUBLICATION IN WEST’S HAWAI#I REPORTS AND PACIFIC REPORTER***

                                    and

              STATE OF HAWAI#I, Intervenor-Appellee.
-----------------------------------------------------------------
                         T.A. NO. 08-0041
       In the Matter of the Tax Appeal of GARRY P. SMITH,
                       Appellant-Appellant,

                                    and

              STATE OF HAWAI#I, Intervenor-Appellee.
 ---------------------------------------------------------------
                         T.A. NO. 08-0042
     In the Matter of the Tax Appeal of WILLIAM J. SANBORN,
                       Appellant-Appellant,

                                    and

              STATE OF HAWAI#I, Intervenor-Appellee.
-----------------------------------------------------------------
                         T.A. NO. 08-0043
       In the Matter of the Tax Appeal of EARL F. ARAKAKI,
                       Appellant-Appellant,

                                    and

               STATE OF HAWAI#I, Intervenor-Appellee.

                                NO. 30049

                 APPEAL FROM THE TAX APPEAL COURT
(Tax Appeal Case No. 07-0086 (Consolidated Nos. 07-0086, 07-0099,
     07-0102, 08-0039, 08-0040, 08-0041, 08-0042, 08-0043))

                             APRIL 27, 2011

    RECKTENWALD, C.J., NAKAYAMA, AND DUFFY, JJ., AND CIRCUIT
       JUDGE NISHIMURA, ASSIGNED IN PLACE OF MOON, C.J.,
   RECUSED AND RETIRED, WITH ACOBA, J., CONCURRING SEPARATELY

             OPINION OF THE COURT BY RECKTENWALD, C.J.

          Plaintiffs-appellants are real property owners and

taxpayers who brought claims in the Tax Appeal Court against

various state and county defendants-appellants, seeking an

exemption from real property taxes equal to the exemption granted

                                    -2-
     ***FOR PUBLICATION IN WEST’S HAWAI#I REPORTS AND PACIFIC REPORTER***

to Hawaiian homestead lessees under the Hawaiian Homes Commission

Act (HHCA) and their respective county codes.2

           Taxpayers, who are not native Hawaiian, argued that the

tax exemptions for homestead lessees involve discrimination on

the basis of race in violation of the Fifth and Fourteenth

Amendments to the United States Constitution and federal civil

rights laws because only native Hawaiians are eligible to become

homestead lessees under the HHCA.          They accordingly sought a

refund of real property taxes paid in excess of what they would

have been assessed had each of them been granted a tax exemption;

a declaration that the HHCA, § 4 of the Admission Act, and

article XII, sections 1-3 of the Hawai#i Constitution are

invalid; and an injunction barring implementation of any real

property tax exemption given exclusively to Hawaiian homestead

lessees.

           The State filed a motion for summary judgment on the

ground that the disputed tax exemptions did not violate the equal

protection clause because they did not involve a suspect

classification.     Specifically, the State argued that “the tax

exemptions are not based upon whether a taxpayer is native

Hawaiian or not, but rather whether the taxpayer is a homestead

     2
            Plaintiff-appellants John M. Corboy, Stephen Garo Aghjayan,
Gary P. Smith, Earl F. Arakaki, and J. William Sanborn are hereinafter
referred to collectively as “Taxpayers.” Defendants-appellees David M. Louie,
in his official capacity as Acting Attorney General, State of Hawai#i; the
County of Maui; the County of Kaua#i; the City and County of Honolulu; the
County of Hawai#i; and the State of Hawai#i are hereinafter referred to
collectively as “State.”

                                     -3-
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lessee of HHCA land.”      (Emphasis in original).       The State further

argued that Taxpayers lacked standing to challenge the tax

exemption on the ground that only native Hawaiians are eligible

to become homestead lessees because Taxpayers had not established

that they were interested in participating in the homestead lease

program.    The tax appeal court granted the State’s motion for

summary judgment on the ground that the tax exemption did not

involve a suspect classification.3         On appeal, Taxpayers

challenge the tax appeal court’s judgment in favor of the State.

            We hold that Taxpayers lack standing to pursue their

challenges to the constitutionality of the tax exemption and the

HHCA, generally.4     As set forth below, the record does not

establish that Taxpayers are interested in participating in the

homestead lease program, and Taxpayers have accordingly not

established an injury-in-fact sufficient to confer standing and

to warrant the exercise of the tax appeal court’s jurisdiction in

this case.    We therefore vacate the tax appeal court’s judgment

and remand with instructions to dismiss Taxpayers’ complaints for

lack of jurisdiction.      Cf. Office of Hawaiian Affairs v. Hous. &

Cmty. Dev. Corp. of Hawai#i, 121 Hawai#i 324, 339, 219 P.3d 1111,

1126 (2009) (vacating and remanding for an entry of judgment

dismissing claims, where the plaintiff’s claims were not ripe for

      3
            The Honorable Gary W.B. Chang presided.

      4
            As discussed further infra, the remaining issues raised in
Taxpayers’ appeal are waived or were otherwise not properly preserved.

                                     -4-
     ***FOR PUBLICATION IN WEST’S HAWAI#I REPORTS AND PACIFIC REPORTER***

adjudication).
                               I. BACKGROUND

A.   Historical Background

           Taxpayers raise numerous challenges to State action

with regard to the ceded lands and the Hawaiian home lands.                 To

analyze the claims set forth in this appeal, it is necessary to

present the historical context in which this case arises.

     1.    Ceded Lands

           “[F]rom 1826 to 1893, the United States recognized the

independence of the Kingdom of Hawaii, extended full and complete

diplomatic recognition to the Hawaiian Government, and entered

into treaties and conventions with the Hawaiian monarchs to

govern commerce and navigation[.]”         Apology Resolution, Pub. L.

No. 103-150, 107 Stat. 1510, 1510 (1993) (hereinafter Apology

Resolution).    In 1893, “the United States Minister assigned to

the sovereign and independent Kingdom of Hawaii conspired with a

small group of non-Hawaiian residents of the Kingdom of Hawaii,

including citizens of the United States, to overthrow the

indigenous and lawful Government of Hawaii[.]”           Id.   The group

that overthrew the Kingdom established a provisional government

and, after a failed attempt at annexation with the United States,

declared itself the Republic of Hawai#i.         Id. at 1511-12.

           Approximately five years later, the United States

annexed Hawai#i with the passage of the Newlands Joint

                                     -5-
     ***FOR PUBLICATION IN WEST’S HAWAI#I REPORTS AND PACIFIC REPORTER***

Resolution.     Joint Resolution To provide for annexing the

Hawaiian Islands to the United States (Newlands Resolution), No.

55, 30 Stat. 750 (1898); see also Apology Resolution at 1512.

Upon annexation, the Republic of Hawai#i “ceded 1,800,000 acres

of crown, government and public lands of the Kingdom of Hawaii

[to the United States], without the consent of or compensation to

the Native Hawaiian people of Hawaii or their sovereign

government.”5    Apology Resolution at 1512.        This court has

recognized that the Republic “ced[ed] and transfer[red] to the

United States the absolute fee and ownership of all public,

Government, or Crown lands . . . belonging to the Government of

the Hawaiian Islands, together with every right and appurtenance

thereunto appertaining[.]”       Trs. of the Office of Hawaiian

Affairs v. Yamasaki, 69 Haw. 154, 159, 737 P.2d 446, 449 (1987)

(brackets in original) (citing Newlands Resolution at 750).

Under the Newlands Resolution, the revenue and proceeds from

these “ceded lands” were to “be used solely for the benefit of

the inhabitants of the Hawaiian Islands for educational and other

public purposes.”6     Newlands Resolution at 750.

      5
            Although “[t]he public debt of the Republic of Hawaii . . . [was]
assumed by the government of the United States[,]” with the exception that
“the liability of the United States in this regard shall in no case exceed
four million dollars[,]” Newlands Resolution at 751 (emphasis added), no
compensation was made to the Kingdom of Hawai#i, see Apology Resolution at
1512.

      6
            Taxpayers assert that “[t]he Newlands Resolution established the
Ceded Lands Trust[.]” As discussed further infra in part III(B), this court
need not decide whether a trust was created by the Newlands Resolution because
Taxpayers did not properly preserve this point in the tax appeal court.

                                     -6-
     ***FOR PUBLICATION IN WEST’S HAWAI#I REPORTS AND PACIFIC REPORTER***

            Congress then passed the Organic Act, Act of April 30,

1900, c. 339, 31 Stat. 141 (1900), reprinted in 1 Hawai#i Revised

Statutes (HRS) 86 (2009), which “provided a government for the

territory of Hawaii and defined the political structure and

powers of the newly established Territorial Government[.]”

Apology Resolution, at 1512.        The Organic Act stated, in relevant

part:
            That the public property ceded and transferred to the
            United States by the Republic of Hawaii under the
            joint resolution of annexation . . . shall be and
            remain in the possession, use, and control of the
            government of the Territory of Hawaii, and shall be
            maintained, managed, and cared for by it, at its own
            expense, until otherwise provided for by Congress, or
            taken for the uses and purposes of the United States
            by direction of the President or of the governor of
            Hawaii.

Organic Act, § 91.

      2.    Hawaiian Home Lands

            Congress later enacted the Hawaiian Homes Commission

Act, 1920, Act of July 9, 1921 (HHCA), Pub. L. 67-34, 42 Stat.

108, reprinted in 1 HRS 261 (2009), which mandated that

approximately 200,000 acres of the ceded lands be held in trust

for the benefit of native Hawaiians.7         See Bush v. Watson, 81

Hawai#i 474, 477 n.3, 918 P.2d 1130, 1133 n.3 (1996).               Congress

enacted the HHCA after holding hearings and determining that

Hawaiians were a “dying race,” with the number of “full-blooded

Hawaiians” dropping from 142,650 in 1826 to 22,600 in 1919.                 H.R.

      7
            The term “native Hawaiian” is defined in the HHCA as “any
descendent of not less than one-half part of the blood of the races inhabiting
the Hawaiian Islands previous to 1778.” HHCA § 201(a).

                                     -7-
    ***FOR PUBLICATION IN WEST’S HAWAI#I REPORTS AND PACIFIC REPORTER***

Rep. No. 66-839, at 2 (1920).       The report of the Committee on the

Territories quoted Territorial Senator John H. Wise, an architect

of the HHCA, in discussing “the reasons for the decline of the

Hawaiian race” and the need for such legislation:
          The Hawaiian people are a farming people and
          fishermen, out-of-door people, and when they were
          frozen out of their lands and driven into the cities
          they had to live in the cheapest places, tenements.
          That is one of the big reasons why the Hawaiian people
          are dying. Now, the only way to save them, I contend,
          is to take them back to the lands and give them the
          mode of living that their ancestors were accustomed to
          and in that way rehabilitate them.

Id. at 1-4 (quoting Hearings before the Committee on the

Territories, House of Representatives, 66th Cong., 2d Sess., on

Proposed Amendments to the Organic Act of the Territory of

Hawai#i, Feb. 3, 4, 5, 7 and 10, 1920, at 39-40 (statement of

Sen. John H. Wise)).

     3.   Admission Act

          In 1959, Congress passed the Hawai#i Admission Act

(Admission Act), Pub. L. No. 86-3, 73 Stat. 4 (1959), reprinted

in 1 HRS 135 (2009), which made Hawai#i a state of the Union.              As

a condition of admission, “the State of Hawai#i agreed to hold

certain lands granted to the State by the United States in a

public land trust,” subject to the trust provisions set forth in

§ 5(f) of the Admission Act.8      Office of Hawaiian Affairs v.

     8
          Section 5(f) provides:

          The lands granted to the State of Hawaii by subsection
          (b) of this section and public lands retained by the
          United States under subsections (c) and (d) and later
          conveyed to the State under subsection (e), together
                                                               (continued...)

                                    -8-
    ***FOR PUBLICATION IN WEST’S HAWAI#I REPORTS AND PACIFIC REPORTER***

State, 96 Hawai#i 388, 390, 31 P.3d 901, 903 (2001); see

Admission Act § 5.     Section 5(b) of the Admission Act granted to

the newly established state the United States’ title to “all the

public lands and other public property, and to all lands defined

as ‘available lands’ by section 203 of the [HHCA], within the

boundaries of the State of Hawaii[.]”        The Admission Act stated

in relevant part: “lands granted to the State of Hawaii by

subsection (b) . . . together with the proceeds from the sale or

other disposition of any such lands and the income therefrom,

shall be held by said State as a public trust[.]”           Admission Act

§ 5(f).

           Section 4 of the Admission Act further required the

State of Hawai#i to adopt the HHCA as part of its Constitution

and barred changes in the qualifications of the lessees without

the consent of the United States.9        The United States and the

     8
      (...continued)
           with the proceeds from the sale or disposition of any
           such lands and the income therefrom, shall be held by
           said State as a public trust for the support of the
           public schools and other public educational
           institutions, for the betterment of the conditions of
           native Hawaiians, as defined in the Hawaiian Homes
           Commission Act, 1920, as amended, for the development
           of farm and home ownership on as widespread a basis as
           possible for the making of public improvements, and
           for the provision of lands for public use. Such lands,
           proceeds, and income shall be managed and disposed of
           for one or more of the foregoing purposes in such
           manner as the constitution and laws of said State may
           provide, and their use for any other object shall
           constitute a breach of trust for which suit may be
           brought by the United States.

     9
           Section 4 provides:

           As a compact with the United States relating to the
                                                                 (continued...)

                                    -9-
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State thus entered a compact under which the State would assume

the management and disposition of the Hawaiian home lands.              See

Haw. Const. art. XI, § 2 (1959) (renumbered art. XII, §§ 1-2

(1978)).    This court has noted that “the federal government set

aside certain public lands to be considered Hawaiian home lands

to be utilized in the rehabilitation of native Hawaiians, thereby

undertaking a trust obligation benefiting [sic] the aboriginal

people” and “the State of Hawaii assumed this fiduciary

obligation upon being admitted into the Union as a state.”              Ahuna

v. Dep’t of Hawaiian Home Lands, 64 Haw. 327, 338, 640 P.2d 1161,

1168 (1982).

B.    Taxpayers’ Complaints

            On August 2, 2007, Maui County homeowner John M. Corboy

(Corboy) paid under protest his real property taxes of $1,023.10

      9
      (...continued)
           management and disposition of the Hawaiian home lands,
           the Hawaiian Homes Commission Act, 1920, as amended,
           shall be adopted as a provision of the Constitution of
           said State, as provided in section 7, subsection (b)
           of this Act, subject to amendment or repeal only with
           the consent of the United States, and in no other
           manner: Provided, That (1) sections 202, 213, 219,
           220, 222, 224 and 225 and other provisions relating to
           administration, and paragraph (2) of section 204,
           sections 206 and 212, and other provisions relating to
           the powers and duties of officers other than those
           charged with the administration of said Act, may be
           amended in the constitution, or in the manner required
           for State legislation, . . . (2) that any amendment to
           increase the benefits to lessees of Hawaiian home
           lands may be made in the constitution, or in the
           manner required for State legislation, but the
           qualifications of lessees shall not be changed except
           with the consent of the United States; . . . .

(Some emphasis in original and some added.)

                                    -10-
     ***FOR PUBLICATION IN WEST’S HAWAI#I REPORTS AND PACIFIC REPORTER***

for the first half of tax year 2007-2008.10          He asserted that he

was entitled to an exemption from real property taxes equal to

the exemption granted to Hawaiian homestead lessees.11               He argued

that the tax exemption for Hawaiian homestead lessees violated

      10
            HRS § 40-35(a) (1993) provides that “[a]ny disputed portion of
moneys representing a claim in favor of the State may be paid under protest to
a public accountant of the department, board, bureau, commission, or other
agency of the State with which the claimant has the dispute.”

      11
            Although not cited by Corboy, original lessees on Hawaiian home
lands in Maui County are entitled to an exemption from real property taxes
under HHCA § 208 and Maui County Code (MCC) § 3.48.555. HHCA § 208 provides,
in pertinent part:

                  Conditions of leases. Each lease made under the
            authority granted the department by section 207 of
            this Act, and the tract in respect to which the lease
            is made, shall be deemed subject to the following
            conditions, whether or not stipulated in the lease:
                  (1)   The original lessee shall be a native
                        Hawaiian, not less than eighteen years of
                        age. . . .
                  . . . .
                  (7)   The lessee shall pay all taxes assessed
                        upon the tract and improvements
                        thereon. . . .
                  (8)   The lessee shall perform such other
                        conditions, not in conflict with any
                        provision of this Act, as the department
                        may stipulate in the lease; provided that
                        an original lessee shall be exempt from
                        all taxes for the first seven years after
                        commencement of the term of the lease.

(Emphasis added).

            MCC § 3.48.555 provides, in pertinent part:

                  Exemptions from real property taxes as set forth
            in . . . section 208 of the Hawaiian Homes Commission
            Act, 1920, . . . shall remain in effect and be
            recognized by this County in its administration of the
            real property tax system; provided, that real property
            leased under homestead and not general leases pursuant
            to the authority granted the department of Hawaiian
            home lands by section 207 of the Hawaiian Homes
            Commission Act, 1920, shall be exempt from real
            property taxes, the seven-year limitation on the
            exemption afforded by section 208 of the Hawaiian
            Homes Commission Act, 1920, notwithstanding.

(Emphasis added).

                                    -11-
     ***FOR PUBLICATION IN WEST’S HAWAI#I REPORTS AND PACIFIC REPORTER***

his rights, as a non-native Hawaiian, to equal protection of the

law as guaranteed by the Fourteenth Amendment to the United

States Constitution and federal civil rights laws.             On August 14,

2007, the Maui County Department of Finance advised Corboy that:
            Property taxes applied to the Department of Hawaiian
            Home Lands (DHHL) are governed by [MCC] 3.48.555 and
            authorized under the Hawaii State Constitution and
            [HRS].

            Your property does not fall under either provision and
            is, therefore, not appropriate for an exemption under
            the MCC or the HRS.

            Kaua#i County homeowner Stephen Garo Aghjayan

(Aghjayan), City and County of Honolulu homeowners Gary P. Smith

(Smith) and Earl F. Arakaki (Arakaki), and Hawai#i County

homeowner J. William Sanborn (Sanborn) likewise paid under

protest their real property taxes for 2007-2008 by claiming an

exemption equal to the exemption granted to Hawaiian homestead

lessees under the HHCA and their respective county laws.12              Smith

       12
             Taxpayers did not specify which county codes they were
challenging. However, Revised Ordinances of Honolulu (ROH) § 8-10.23 and
Kaua#i County Code (KCC) § 5A-11.23(a) are nearly identical to MCC § 3.48.555,
quoted supra note 11, and provide that “real property leased under homestead
and not general leases . . . shall be exempt from real property taxes, the
seven year limitation on the exemption . . . notwithstanding.” (Emphasis
added). Accordingly, the counties of Maui, Honolulu and Kaua#i extend the tax
exemption for Hawaiian homestead lessees beyond the seven year period mandated
by HHCA § 208(8). However, it appears that the County of Hawai#i requires
that Hawaiian homestead lessees pay a “minimum tax” of between $25 and $100
after the seven-year exemption period expires:

            Hawaiian home lands, as defined in section 201,
            Hawaiian Homes Commission Act, 1920, as amended, real
            property, exclusive of buildings, leased and used as a
            homestead (houselots, farm lots, and pastoral lots),
            pursuant to section 207(a) and subject to the
            conditions of sections 208 and 216 of the Hawaiian
            Homes Commission Act, 1920, shall be exempt from real
            property taxes, except for the minimum tax, and as
            provided for by this section. Disposition of Hawaiian
                                                                 (continued...)

                                     -12-
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and Arakaki also pursued their protested payments by filing

Notices of Real Property Assessment Appeal with the Board of

Review for the City and County of Honolulu.13

               On August 31, 2007, Corboy and Aghjayan pursued their

claims for a real property tax exemption by filing a complaint in

the tax appeal court (TX No. 07-0086) pursuant to HRS § 40-

35(b).14      On April 14, 2008, Corboy and Aghjayan filed an Amended

Complaint for Refund of Real Property Taxes Paid Under Protest

Pursuant to HRS § 40-35 and for Declaratory and Injunctive Relief

(amended complaint), naming as defendants the Attorney General,

      12
           (...continued)
                home lands for other than homestead purposes is deemed
                fully taxable and will not qualify for the exemption
                granted by this section. The respective homestead
                lessee of Hawaiian home lands shall continue to
                qualify and receive other personal exemptions,
                provided that claims for the exemptions are timely
                filed, including the seven-year limitation on the
                exemption afforded by section 208 of the Hawaiian
                Homes Commission Act, 1920.

Hawai#i County Code (HCC) § 19-89 (emphasis added); see also HCC § 19-90(e)
(providing that “there shall be levied upon each individual parcel of real
property taxable under this chapter, a minimum real property tax of $100 per
year,” except under certain conditions where the minimum tax is lower).

      13
            The record does not reflect the result of Smith’s and Arakaki’s
appeals to the Board of Review. The record does, however, reflect that Smith
and Arakaki previously appealed their assessments for tax year 2006 to the
Board of Review, and that the Board of Review determined that “[t]he assessed
value of the property as determined by the director is correct.” In their
Complaint, Smith and Arakaki assert that “the Board denied the appeals of both
[Smith and Arakaki in 2006] without deciding or even mentioning the
constitutional questions raised.” The Complaint does not, however, directly
allege that Smith’s and Arakaki’s real property taxes from tax year 2006-2007
are at issue in the instant case.

      14
            HRS § 40-35(b) provides, in pertinent part, that “[a]ny action to
recover payment of taxes under protest shall be commenced in the tax appeal
court.”

                                        -13-
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State of Hawai#i; the County of Maui; and the County of Kaua#i.15

In their amended complaint, Corboy and Aghjayan alleged, in

pertinent part, as follows:

                  1. This action is brought under HRS §§ 40-35
            and 232-3[ 16] and Rules 1 and 2(a)(4) of the Tax
            Appeal Court of the State of Hawaii for refund of real
            property taxes paid to the Counties of Maui and Kauai
            under protest. Plaintiffs seek, under the Constitution
            and civil rights laws of the United States, exemption
            from real property taxes equal to the exemptions given
            respectively, by the County of Maui and County of
            Kauai to Hawaiian homestead lessees; and demand, among
            other relief, an equivalent exemption and refund of
            any amounts greater than would have been payable if
            they (each Plaintiff respectively) had that same or
            equivalent exemption.

                  . . . .

            CLEAR AND CONCISE STATEMENT OF BASIS FOR APPEAL (HRS
            § 232-3)
                  6. The County of Maui and its officials, and
            the County of Kauai and its officials, acting in
            concert with the State of Hawaii and its officials and
            the United States and its officials and the other
            counties and their officials, by exempting Hawaiian
            homestead lessees from some or all real property taxes
            but denying an equivalent exemption to other property
            owners in their respective counties, deprive

      15
             The parties later stipulated to the intervention of the State of
Hawai#i as a defendant.

      16
            HRS § 232-3 (2001), concerning tax appeals provides:

                  Grounds of appeal, real property taxes. In the
            case of a real property tax appeal, no taxpayer or
            county shall be deemed aggrieved by an assessment, nor
            shall an assessment be lowered or an exemption
            allowed, unless there is shown:
            . . . .
            (2)   Lack of uniformity or inequality, brought about
                  by illegality of the methods used or error in
                  the application of the methods to the property
                  involved, or
            (3)   Denial of an exemption to which the taxpayer is
                  entitled and for which the taxpayer has
                  qualified, or
            (4)   Illegality, on any ground arising under the
                  Constitution or laws of the United States or the
                  laws of the State (in addition to the ground of
                  illegality of the methods used, mentioned in
                  clause (2)).

                                     -14-
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            Plaintiffs, and other real property owners similarly
            situated in each of their counties, of equal
            protection, privileges and immunities under the law in
            violation of the Equal Protection Clauses of the Fifth
            and Fourteenth Amendments and Federal civil rights
            laws. Plaintiffs and others similarly situated,
            solely because they are not “any descendant of not
            less than one-half part of the blood of the races
            inhabiting the Hawaiian islands previous to 1778” can
            never become Hawaiian homestead lessees; and their
            ownership of an interest in real property in the
            counties of Maui and Kauai, respectively, therefore,
            can never qualify for the exemption. Because
            thousands of Hawaiian homestead lessees pay reduced or
            no real property taxes in the counties of Maui and
            Kauai, but still receive the benefit of municipal
            services including some or all of the following:
            police and fire protection; emergency medical care
            services; culture and recreation; planning, zoning and
            permitting; sewage and solid waste collection and
            disposal; public mass transportation; human services;
            traffic safety and control; and construction and
            maintenance of public streets, roads, bridges,
            walkways and drainage and flood control systems and
            other county infrastructure and services, Plaintiffs
            and all property owners similarly situated in each of
            those counties each pay proportionately more twice
            each year to carry them. Every six months these
            citizens of the United States are each forced to pay
            extra dollars to their respective counties of Maui and
            Kauai to support a group selected not by need or merit
            but because of their racial ancestry. Refund alone
            will not provide adequate relief because, unless
            declaratory and injunctive relief is granted, a
            multiplicity of suits year after year by Plaintiffs
            and others similarly situated will be necessary.
                  7. Since this action draws into question the
            constitutionality of State of Hawaii and Federal laws
            (including § 4 of the 1959 Admission Act which
            required as a condition of statehood that the State of
            Hawaii adopt the [HHCA,] still mandates that the State
            continue to carry out the HHCA and forbids repeal or
            amendment without the consent of the United States),
            Plaintiffs will promptly serve this complaint and the
            attached Notice of Constitutional Question on the
            Attorney General of the United States and the United
            States Attorney for the District of Hawaii and on the
            Attorney General of the State of Hawaii.[ 17]

            Accordingly, Corboy and Aghjayan sought the following

relief:

      17
            Although a copy of the complaint was served on the Attorney
General of the United States and the United States Attorney for the District
of Hawaii, the United States was not made a party to this action.

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                A.    Find and Declare:
                      1. As to real property tax exemptions, in
          the absence of equivalent exemptions for Plaintiffs
          and other real property owners similarly situated in
          each of the Counties of Maui and Kauai, the special
          exemptions from real property taxes given to Hawaiian
          homestead lessees by each of those Counties violate
          the Fourteenth Amendment of the United States
          Constitution and 42 U.S.C. §§ 1981, 1983, 1985(3),
          1986 and 2000d et. seq. and/or other statutory and
          common law and are invalid;
                      2. As to the HHCA, the Compact in § 4 of
          the 1959 Admission Act, and Art. XII of the Hawaii
          Constitution, in the absence of equivalent homestead
          leases and benefits for every Hawaii citizen without
          regard to race or ancestry, the HHCA, the Compact in §
          4 of the Admission Act of March 18, 1959, and Article
          XII, §§ 1-3 of the Constitution of the State of
          Hawaii, mandate, encourage, aid, abet or act in
          concert with the counties of Maui and Kauai (and other
          counties) in the deprivation of the equal protection
          of the laws and equal privileges and immunities under
          the laws of Plaintiffs and others similarly situated,
          violate the Fifth and Fourteenth Amendments and/or 42
          U.S.C. §§ 1981, 1983, 1985(3), 1986 and 2000d et. seq.
          or other federal statutory and common law, and are
          invalid;
                B. Enter judgment for refund to each Plaintiff
          by the applicable County of Maui and County of Kauai
          of all amounts paid under protest for real property
          taxes greater than would have been payable if each
          Plaintiff had an exemption equivalent to that for
          Hawaiian homestead lessees;
                C. Enjoin Defendants. Permanently enjoin each
          of the Defendants and all persons acting in concert
          with them, from further implementation of any real
          property tax exemptions given exclusively to Hawaiian
          homestead lessees and from any further or other
          discrimination between taxpayers on the basis of race,
          ancestry or status as Hawaiian homestead lessees in
          the assessment, levy and collection of taxes. This
          injunction should also provide that, for as long as
          HHCA § 208(8) and the compact in Admission Act § 4
          remain in effect, and any Hawaiian homestead lessee
          enjoys exemption from all taxes during the first 7
          years after the commencement of the term of the lease,
          Plaintiffs and all other taxpayers similarly situated
          in the County of Maui and the County of Kauai “shall”
          also “be exempt from all taxes.”
                D. Costs, attorneys fees, other relief. Allow
          Plaintiffs their costs, reasonable attorneys’ fees,
          and such other further relief as is just.

          Corboy and Aghjayan’s amended complaint was filed by

attorney H. William Burgess (Burgess), who filed nearly identical

complaints with the tax appeal court concerning real property

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taxes paid under protest for tax year 2007-2008 on behalf of

Smith and Arakaki (TX No. 07-0099), and Sanborn (TX No. 07-0102).

Burgess also appealed Taxpayers’ real property tax assessments

for tax year 2008-2009 by filing Notices of Appeal directly with

the tax appeal court (TX Nos. 08-0039, 08-0040, 08-0041, 08-0042,

and 08-0043) pursuant to HRS § 232-16 (Supp. 2007).18            The

appeals in TX Nos. 08-0039, 08-0040, 08-0041, 08-0042, and 08-

0043, and Burgess’s three tax appeal court complaints in TX Nos.

07-0086, 07-0099 and 07-0102, were consolidated under Corboy and

Aghjayan’s case in TX No. 07-0086.

C.    Summary Judgment Motions

            On April 20, 2009, the Attorney General and the State

of Hawai#i filed a motion for summary judgment, in which the

defendant counties joined.19       In its Memorandum in Support of

State of Hawaii’s and Attorney General’s Motion for Summary

      18
            HRS § 232-16, concerning appeals from assessments, provides in
pertinent part:

                  Appeal to tax appeal court. A taxpayer or
            county, in all cases, may appeal directly to the tax
            appeal court without appealing to a state board of
            review, or any equivalent administrative body
            established by county ordinance. An appeal to the tax
            appeal court is properly commenced by filing, on or
            before the date fixed by law for the taking of the
            appeal, a written notice of appeal in the office of
            the tax appeal court and by service of the notice of
            appeal on the director of taxation and, in the case of
            an appeal from a decision involving the county as a
            party, the real property assessment division of the
            county involved. An appealing taxpayer shall also pay
            the costs in the amount fixed by section 232-22.

      19
            The County of Kaua#i also filed a motion to dismiss on April 30,
2009, which it later withdrew.

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Judgment, the State sought:
            judgment in full for the State, and against
            [Taxpayers] on the ground that the alleged
            discriminatory tax exemption is based upon the
            indisputably non-suspect classification of whether one
            is a homestead lessee (pursuant to [the HHCA]) or not.
            Assuming this court accepts that premise, this case
            will be very simple, as the State will need only to
            demonstrate a conceivable rational basis for the tax
            exemption. The State demonstrates in this motion that
            many such conceivable rational bases exist to uphold
            the tax exemption. The State also shows that
            Taxpayers’ federal civil rights claims are without
            merit.
                   In the unlikely . . . event this [c]ourt decides
            that the tax exemption involves an ostensibly racial
            classification that [T]axpayers have standing to
            attack, then this [c]ourt would likely deny this
            motion for summary judgment. In that unlikely event,
            the State will file a subsequent and different summary
            judgment motion . . . arguing that even if the
            classification generating the differential tax
            treatment is deemed to be based upon whether the
            taxpayer is native Hawaiian or not, Taxpayers’ Equal
            Protection challenge is still not subject to strict
            scrutiny, but rather to the deferential Morton v.
            Mancari “tied rationally” standard of review
            applicable to native peoples. See Morton v. Mancari,
            417 U.S. 535, 555 (1974).[ 20] The State would then
            demonstrate that the tax exemptions satisfy that
            Mancari standard. . . .

(Footnote omitted).

            The State argued that “[n]o suspect classification is

involved in the HHCA homestead real property tax exemption”

      20
            In Mancari, the United States Supreme Court upheld a statutory
employment preference for American Indians in the Bureau of Indian Affairs
against a challenge brought pursuant to the Equal Employment Opportunity Act
of 1972, 86 Stat. 103, 42 U.S.C. § 2000e et seq. (1970 ed., Supp. II), and the
due process clause of the Fifth Amendment to the United States Constitution.
417 U.S. at 537, 551, 555. The Court’s conclusion that the preference did not
constitute invidious racial discrimination was based in part on the “unique
legal status of Indian tribes under federal law and upon the plenary power of
Congress . . . to legislate on behalf of [them].” Id. at 551. The Court
analogized the preference to “the constitutional requirement that a United
States Senator, when elected, be ‘an Inhabitant of that State for which he
shall be chosen,’” id. at 554 (citation omitted), and concluded that “the
preference is political rather than racial in nature[,]” id. at 554 n.24.
Thus, the Court concluded that “[a]s long as the special treatment can be tied
rationally to the fulfillment of Congress’ unique obligation toward the
Indians, such legislative judgments will not be disturbed.” Id. at 555.

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“because the tax exemptions are not based upon whether a taxpayer

is native Hawaiian or not, but rather whether the taxpayer is a

homestead lessee of HHCA land.”       (Some formatting altered)

(emphasis in original).     The State asserted that “native

Hawaiians who are not homestead lessees of HHCA land also do not

receive the tax exemption[.]”       (Emphasis in original).       The State

further argued that “[b]ecause the status of being a homestead

lessee versus not being one is plainly not a suspect

classification, the tax exemptions are not subject to strict

scrutiny, but rather to the rational basis test.”           (Citation

omitted).

            The State, relying on San Antonio Independent School

District v. Rodriguez, 411 U.S. 1, 19 (1973), also argued that

Taxpayers’ argument that a suspect classification is involved

“because only native Hawaiians can become homestead lessees of

HHCA land” failed because “[e]qual [p]rotection analysis

requires, first ‘delineation of the disfavored class,’ which in

this case are those taxpayers who are not homestead lessees of

HHCA land -- a group that includes most native Hawaiians.”

(Emphasis in original).

            The State further argued that Taxpayers lacked standing

to challenge the HHCA on the ground that only native Hawaiians

are eligible to become homestead lessees of HHCA lands because

“there is no allegation, much less evidence, that Taxpayers

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actually desire to become homestead lessees of HHCA lands.”21

Accordingly, the State argued, “eliminating the native Hawaiian

qualification to become a HHCA homestead lessee would have no

effect upon Taxpayers as they would still not become HHCA

homesteaders.”     (Emphasis in original).

            Having argued that the classification is subject to

rational basis review, the State asserted that “[t]here are many

conceivable rational bases to uphold the tax exemption for HHCA

homestead lessees,” including that the HHCA imposes “severe

restrictions” on alienation of a lessee’s interest, “severely

limits who may succeed to a homestead lease upon the lessee’s

death[,]” and that “HHCA homestead lessee households have below-

average household income.”       (Some formatting altered).

            The State also argued that “Taxpayers’ federal civil

rights claims fail because the tax exemptions are not based upon

any ostensibly racial criteria, but rather upon whether one is a

HHCA homesteader or not,” and because the “federally mandated

[HHCA] expressly authorizes the county tax exemptions.”

(Formatting altered) (emphasis in original).           The State further

      21
            In their Reply Brief to this court, Taxpayers assert that “[t]he
State’s assertion that [Taxpayers] do not ‘want’ a homestead lease is
incorrect.” However, Taxpayers do not point to any evidence in the record to
indicate that they desire to become homestead lessees. To the contrary, in
their Memorandum in Opposition to State’s Motion for Summary Judgment,
Taxpayers asserted that “[n]one of the [Taxpayers] in these eight consolidated
cases ask for award of a homestead lease. Rather each of these citizens comes
to this Court for redress of the assessment of his real property taxes without
the benefit of an exemption equivalent to that given to Hawaiian homestead
lessees.” Accordingly, as discussed further infra in part III(A), the record
does not establish that Taxpayers are interested in participating in the
homestead lease program.

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argued that “[b]ecause the HHCA . . . is a federally mandated

law, . . . it cannot itself violate another more general federal

law.        That is because a specific statute like HHCA § 208(8)

cannot be invalidated by a far more general statute, which the

federal civil rights statutes certainly are.”              (Emphasis in

original).

               Taxpayers filed a Memorandum in Opposition to State’s

Motion for Summary Judgment on May 1, 2009.              Taxpayers argued

that in Rice v. Cayetano, 528 U.S. 495, 514 (2000), the United

States Supreme Court rejected an argument similar to that set

forth by the State in the instant case, that the real property

tax exemption does not involve a suspect classification.22

Taxpayers further asserted that:
               the “special” exemption from real property taxes at
               issue in this case is not based merely on being a
               lessee of Hawaiian home lands. It is limited to DHHL
               homestead leases for which only one class of persons
               selected using a racial classification is eligible;
               and the HHCA only requires the exemption for the first

       22
            In Rice, the United States Supreme Court struck down a provision
of the Hawai#i Constitution that limited the right to vote for trustees of the
Office of Hawaiian Affairs (OHA) to “qualified voters who are Hawaiians, as
provided by law.” 528 U.S. at 498-99, 509. The Court rejected the State’s
argument that the restriction did not involve a racial category “but instead a
classification limited to those whose ancestors were in Hawaii at a particular
time, regardless of their race.” Id. at 514. The Court also noted that,
“[s]imply because a class defined by ancestry does not include all members of
the race does not suffice to make the classification race-neutral.” Id. at
516-17. The Court concluded that, in the context of the voting restriction,
ancestry functioned as a proxy for race and the restriction therefore violated
the Fifteenth Amendment to the United States Constitution, which provides that
“[t]he right of citizens of the United States to vote shall not be denied or
abridged . . . on account of race, color, or previous condition of servitude.”
Id. at 514-17; U.S. Const. amend. XI, § 1. Rice did not address whether such
a classification would violate the Fourteenth Amendment. 528 U.S. at 522
(“The question before us is not the one-person, one-vote requirement of the
Fourteenth Amendment, but the race neutrality command of the Fifteenth
Amendment.”).

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          seven years after commencement of the term of each
          original homestead lessee. Each county is free of any
          federal mandate and can eliminate the discriminatory
          assessments after the first seven years of the
          original lease of each tract by simply enacting an
          ordinance.

(Emphasis in original).

          Taxpayers also argued that “there can be no genuine

dispute that any native Hawaiian citizen of Hawaii is more

favored than [Taxpayers], simply because he or she is eligible to

compete on an equal basis for the exemption in question.”

(Emphasis in original).     With regard to standing, Taxpayers

asserted that:
                 Each of the [Taxpayers] is affected personally
          by the challenged exemption because, if he was
          accorded the equal privileges and immunities to which
          he is entitled, i.e., exemption equivalent to that for
          homesteaders, his real property taxes would be no more
          than $100 per year and he would be entitled to a
          refund for the two or three most recent years at
          issue.
                 None of these five [Taxpayers] in these eight
          consolidated cases ask for award of a homestead lease.
          Rather each of these citizens comes to this Court for
          redress of the assessment of his real property taxes
          without the benefit of an exemption equivalent to that
          given to Hawaiian homestead lessees.

          Taxpayers also argued that Mancari does not apply to

the HHCA tax exemption, but rather “applies only to federally

recognized Indian tribes, their members, and regulation of Indian

tribes and members by the Bureau of Indian Affairs[.]”             Taxpayers

also argued that, “[i]n Rice, the [United States] Supreme Court

rejected the Mancari defense[,]” and there is therefore “no need

to reach the issues of ‘indigenous’ status and ‘special

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relationships.’”23

            In addition, Taxpayers argued that (1) “Congress’

exercise of its power under the Admission Clause to admit Hawaii

as a State of the Union does not immunize the challenged programs

from judicial review[;]” (2) “[t]he Equal Footing Doctrine and

the rule that Congress cannot authorize a state to violate the

Equal Protection Clause lead to the conclusion that a

congressional admission act could not put a new state on an

unequal footing by authorizing it to deny on account of race the

right to receive public benefits[;]” (3) “Congress [cannot]

immunize governmental conduct from judicial review by declaring a

trust or making an unconstitutional contract[;]” and (4)

“[c]laims to Hawaiian home lands raise grave constitutional

concerns” because “[t]he HHCA clearly ‘purports’ to cloud the

title now held by the State of Hawaii[.]”          (Some formatting

altered).

            On May 1, 2009, Taxpayers filed a Counter-Motion for

Summary Judgment.     In their Memorandum in Support of Counter-

Motion for Summary Judgment, Taxpayers alleged the following

      23
            In Rice, the Court determined that the Mancari analysis did not
extend to a voting provision that, the Court concluded, classified on the
basis of race and therefore violated the Fifteenth Amendment. 528 U.S. at
520-22; see supra note 22. The Court, however, declined to address whether
“native Hawaiians have a status like that of Indians in organized tribes[.]”
Id. at 518-19. Thus, the Court did not reject Mancari in its entirety.
Rather, the Court determined that, even assuming arguendo that Mancari can be
extended to native Hawaiians, it nevertheless “does not follow from Mancari
. . . that Congress may authorize a State to establish a voting scheme that
limits the electorate for its public officials to a class of tribal Indians,
to the exclusion of all non-Indian citizens.” Id. at 520.

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“[k]ey facts”:
          1.     All four counties of the State of Hawaii provide
                 special exemptions from real property taxes for
                 lessees of DHHL homestead lots.
          2.     Under the HHCA, only “native Hawaiians” are
                 eligible for award of DHHL homestead leases.
          3.     The definition of “native Hawaiian” which is the
                 foundation and only reason for the existence of
                 HHC-DHHL is a racial classification.
          4.     Use of a racial classification by any
                 governmental actor, federal, state or local, is
                 subject to strict scrutiny.
          5.     The counties’ special exemptions for homestead
                 lessees have a racial purpose and a racial
                 effect.
          6.     The counties’ exemptions cannot pass strict
                 scrutiny because the counties, like the federal
                 and state governments, have no compelling
                 interest in discriminating between home owners
                 on the basis of racial ancestry.

(Footnote omitted).

          Taxpayers argued that “the definitions of ‘Hawaiian’

and ‘native Hawaiian’ are racial classifications,” and that “no

compelling interest requires the State or its counties to

discriminate between citizens or homeowners on the basis of

race.” (Emphasis in the original).

          The court held a hearing on the State’s summary

judgment motion on May 11, 2009.       During the hearing, the State

argued that Taxpayers did not have “standing to [] challenge the

fact that only native [H]awaiians can become homesteaders.”                The

State explained its standing argument as follows:
                [Deputy Attorney General (DAG):] What we’re
          saying is because they do not want a homestead,
          they’ve affirmatively stated in their declaration in
          their opposition that they do not want a homestead
          that they have to [sic] right to then no standing to
          then challenge the fact that only native [H]awaiians
          can become homesteaders. And, so, because they don’t
          want a homestead there’s no reason for them to
          challenge any qualification for becoming a

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          homesteader, therefore, they can’t raise or challenge
          the qualifi -- any of the qualifications for becoming
          a homesteader including the native Hawaiian -- native
          [H]awaiian qualification, therefore, there’s no basis
          at all for them to suggest that there’s any suspect
          classification involved in this particular tax appeal.
                THE COURT: So, you’re saying a non[-H]awaiian
          non lessee can never have standing. The only possible
          class of persons that can challenge the homestead
          exemption is a [H]awaiian non lessee.
                [DAG:] Well, again, they have the general
          standing to challenge the homestead exemption. What
          we’re saying is they can’t try and raise the fact that
          only native [H]awaiians can become homesteaders. They
          can’t raise that aspect unless they want to be a
          homesteader. And, so, therefore, if they’re only
          allowed -- because they don’t want a homestead they
          can’t challenge the aspect of becoming a homesteader
          any aspect or any qualification of becoming a
          homesteader including the native [H]awaiian
          qualification. And, it’s that native [H]awaiian
          qualification that’s the key to their attempt to try
          and create a suspect classification or try and claim
          that this tax exemption somehow discriminates on the
          basis of the suspect classification and because they
          don’t want homestead they have no right and standing
          to challenge the qualification any qualification for
          becoming a homesteader including the native [H]awaiian
          qualification.

          The State asserted that “[Taxpayers] have general

standing to challenge the fact that a homesteader gets the

exemption and the non homesteader doesn’t.         That classification

is clearly a non suspect one. . . . they have a general standing

to challenge the fact that they don’t get the tax exemption and

other people do[.]”

          The tax appeal court stated:
                This is an equal protection challenge and the
          court does not view this case as raising a suspect
          classification. The court does believe that this is a
          rationale [sic] basis situation and that is the
          standard this court is applying to this matter. There
          is no suspect class involved. And, therefore, the
          court is inclined to conclude that there is a
          rationale [sic] basis for the classification involved
          in this case.
                And, for that and any other good cause on the
          record, the court is inclined to grant the motion.

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            The tax appeal court then asked Burgess, counsel for

Taxpayers, “if [he] wish[ed] to make any further argument or

record at this time.”      Burgess argued that the classifications

presented in the HHCA and, specifically in § 208, are racial

classifications, and asked the court to analyze the

classifications under strict scrutiny.          The tax appeal court then

asked Burgess whether Rice was distinguishable because “in the

case at bar you have a situation where within the [H]awaiian race

you have lessees and non lessees[.]”         Burgess argued that
            it’s not a valid distinction because if every -- if
            everyone leasing Hawaiian home lands, for example, was
            exempt from the taxes, there would be no problem. But
            that’s not the case. The [HHCA] itself specifically
            says that like other lessees of home lands are taxed
            just like everyone else.[ 24]

            The tax appeal court granted the State’s motion for

summary judgment, concluding that there was no evidence in the

record to refute the rational bases offered by the State.

            The tax appeal court held a hearing on Taxpayers’

counter-motion for summary judgment on June 8, 2009.             Taxpayers

advised the tax appeal court that they intended to appeal the

prior summary judgment decision, and stated that “perhaps it

would be appropriate to present the arguments for this motion at

this time for the record.”       Taxpayers’ subsequent argument to the

tax appeal court is somewhat unclear.         Taxpayers discussed their

      24
            It is not clear which “other lessees” Burgess was referring to.
However, under HHCA § 208, only “an original lessee” is exempted from real
property taxes, and “[t]he original lessee shall be a native Hawaiian.”

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theory that the Newlands Resolution created a Ceded Lands Trust,

and asserted that the United States, in requiring that the State

of Hawai#i adopt the HHCA, was in violation “not only of the

trust but also of the constitution, the equal protection

component of the Fifth Amendment, the trust law, the basic trust

law, and also the equal footing doctrine.”         Taxpayers also

appeared to argue that, in adopting the Hawai#i Constitution, the

State of Hawaii “violated its duty as trustee.”           Taxpayers

further argued that the counties’ extension of the real property

tax exemption “to Hawaiian homestead lessees for the full term of

the lease to some extent” “violates . . . the basic trust law[.]”

            Taxpayers also asserted that “any use of a racial

classification by any governmental actor” is reviewed under

strict scrutiny, and that “the definition of [n]ative Hawaiian

. . . and Hawaiian . . . is a racial classification.”            Taxpayers

also asserted that the tax exemption is “illegal” because it

violates trust law.

            In response, the State argued that the tax appeal

court’s previous ruling “would necessarily preclude summary

judgment for [Taxpayers].”      The tax appeal court denied

Taxpayers’ motion for summary judgment, noting that “the court

will maintain its consistency with its ruling at the prior

hearing.”

            On June 26, 2009, the tax appeal court filed its Order

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Granting State of Hawaii’s and Attorney General’s Motion for

Summary Judgment.     On July 29, 2009, the tax appeal court filed

its Order Denying [Taxpayers’] Counter-Motion for Summary

Judgment.    On August 7, 2009, the tax appeal court entered its

final judgment “in favor of the State of Hawaii, the Attorney

General, and in favor of each of the Counties in each case in

which the respective county is a Defendant-Appellee.”

D.    Taxpayers’ appeal

            A timely appeal followed.       Upon Taxpayers’ motion, this

court accepted transfer of the case on December 29, 2009.25             In

their Opening Brief, Taxpayers present the following points of

error:26

                  A. Legality of HHCA adopted by Congress in
            1921. Whether the [HHCA] violated and still violates
            the Equal Protection component of the Fifth Amendment
            and the fiduciary duty of the United States as Trustee
            of the Ceded Lands Trust created in 1898 by the
            Annexation Act.
                  . . .
                  B. Imposition of HHCA compact on the new State
            of Hawaii in 1959. Whether the United States, by § 4
            of the Admission Act of March 18, 1959, Pub L 86-3, 73
            Stat. 4, (which required, as a condition of statehood
            and as a compact with the United States, that the new
            State of Hawaii adopt the HHCA and continue to carry
            it out) also violated the Fifth Amendment and the
            fiduciary duty of the United States as Trustee of the

      25
            We subsequently denied Taxpayers’ request for an injunction
pending appeal. On April 14, 2010, Taxpayers filed a petition for a writ of
certiorari with the United States Supreme Court, seeking review of this
court’s order denying an injunction pending appeal. See Docket of the Supreme
Court of the United States in No. 09-1256, available at
http://www.supremecourt.gov/docket/docket.aspx. The Court denied Taxpayers’
petition on June 21, 2010. Orders List at 7, available at
http://www.supremecourt.gov/orders/courtorders/062110zor.pdf.

      26
            In their Opening Brief, Taxpayers identify their points of error
as “Questions Presented.”

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          Ceded Lands Trust as well as the Equal Footing
          Doctrine;
                 . . .
                 C. Adoption of HHCA by State in 1959 and
          continuing to implement it. Whether the State of
          Hawaii, by agreeing to the compact and adopting the
          HHCA, incorporating it into Hawaii’s Constitution and
          continuing to implement it, violates the Fourteenth
          Amendment, federal civil rights laws, and the State’s
          fiduciary duty as Trustee of the federal Ceded Lands
          Trust;
                 . . .
                 D. The counties’ special exemptions for
          Hawaiian homestead lessees. Whether each of the four
          counties of the State of Hawaii, by giving Hawaiian
          homestead lessees special exemption from real property
          taxes and depriving Appellants and other homeowners
          similarly situated of the same exemption, violates the
          Fourteenth Amendment and other provisions of the
          Constitution and laws of the United States as well as
          each of the county’s fiduciary duties as political
          subdivisions of the State of Hawaii, Trustee of the
          Ceded Lands Trust.
                 . . .
                 E. The Tax Appeal Court’s final judgment and
          several orders. Whether the Tax Appeal Court erred in
          granting the State’s motion for summary judgment and
          the counties’ joinders in that motion; and in denying
          Appellants’ counter-motion for summary judgment.

          With regard to the tax exemptions, Taxpayers argue

that, because only native Hawaiians can become homestead lessees,

the State and counties violate the Fourteenth Amendment by

providing real property tax exemptions to homestead lessees and

not to Taxpayers and others similarly situated.

          In their Answering Brief, the State argues that the

challenged tax exemptions do not involve a racial classification,

but instead classify on the basis of HHCA homesteader status, and

therefore are not subject to strict scrutiny.          The State further

argues that “Taxpayers’ argument that only native Hawaiians can

become homestead lessees of HHCA land is irrelevant for two

independent reasons.”     First, the State argues that “the

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disfavored class,” i.e., those who are not homestead lessees and

cannot receive the tax exemptions, includes both native Hawaiians

and non-native Hawaiians.      Accordingly, the State argues, “there

is no racial classification, and strict scrutiny is

inapplicable.”

           Alternatively, the State argues that Taxpayers do not

have standing to challenge the tax exemptions on the ground that

only native Hawaiians can become homestead lessees, because

Taxpayers have not established a desire to become homestead

lessees.   Accordingly, the State argues, Taxpayers do not have

standing to argue that the native Hawaiian qualification turns

the classification of homesteader vs. non-homesteader into a

suspect classification.     The State asserts that Taxpayers may

therefore only challenge the tax exemption “in general -- i.e.,

to challenge the fact that homesteaders receive the tax

exemption, while non-homesteaders do not.”

                        II. STANDARD OF REVIEW

           We first consider whether Taxpayers have standing to

bring their claims.     “Whether the circuit court has jurisdiction

to hear the plaintiffs’ complaint presents a question of law,

reviewable de novo.     A plaintiff without standing is not entitled

to invoke a court’s jurisdiction.         Thus, the issue of standing is

reviewed de novo on appeal.”       Hawaii Medical Ass’n v. Hawaii Med.

Serv. Ass’n, Inc., 113 Hawai#i 77, 90, 148 P.3d 1179, 1192 (2006)

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(citing Mottl v. Miyahira, 95 Hawai#i 381, 388, 23 P.3d 716, 723

(2001)).

                              III. DISCUSSION

            Taxpayers seek review of the tax appeal court’s

August 7, 2009 judgment, entered pursuant to its June 26, 2009

Order Granting State of Hawaii’s and Attorney General’s Motion

for Summary Judgment.      Accordingly, we focus our analysis on the

claim alleged in Taxpayers’ amended complaint and upon which the

tax appeal court’s judgment was granted, i.e., Taxpayers’ claim

that the HHCA tax exemption and the HHCA, generally, violate the

equal protection components of the Fifth27 and Fourteenth

Amendments.28

            We note that Taxpayers’ challenge to the HHCA tax

exemption is, in essence, a challenge to the HHCA’s native

      27
            “The Fifth Amendment . . . does not contain an equal protection
clause as does the Fourteenth Amendment which applies only to the states.”
Bolling v. Sharpe, 347 U.S. 497, 499 (1954). Nevertheless, the United States
Supreme Court has held that the guarantee of equal protection applies to the
federal government through the due process clause of the Fifth Amendment. Id.
at 500. Because no federal defendants have been named in the instant case,
and because “[e]qual protection analysis in the Fifth Amendment area is the
same as that under the Fourteenth Amendment,” Buckley v. Valeo, 424 U.S. 1, 93
(1976) (citation omitted), we do not discuss the Fifth Amendment further.

      28
            In their Opening Brief, Taxpayers also assert that the HHCA
violates federal civil rights laws, and direct this court’s attention to their
respective complaints, wherein they asserted that the HHCA, Admission Act § 4,
and article XII, sections 1-3 of the Hawai#i Constitution violate 42 U.S.C.
§§ 1981, 1983, 1985(3), 1986 and 2000d et seq. However, Taxpayers’ Opening
Brief does not provide any argument concerning federal civil rights laws.
This point of error may accordingly be deemed waived, Hawai#i Rules of
Appellate Procedure (HRAP) Rule 28(b)(7), and will not be further addressed.
            In addition, although Taxpayers’ “Questions Presented” raise
challenges based on the equal footing doctrine and Taxpayers’ theory that the
Newlands Resolution created a land trust, these claims were not properly
preserved or may otherwise be disregarded. See infra, part III(B).

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Hawaiian qualification for homestead lessees.           In the tax appeal

court and on appeal, Taxpayers have alleged that the tax

exemption violates equal protection principles because only

native Hawaiians are eligible to receive it.           However, the tax

exemption provision of the HHCA provides a tax exemption for

“original lessee[s]” and not specifically to native Hawaiians.

It is HHCA §§ 207(a) and 208(1), governing homestead lease

eligibility requirements, which provide that lessees must be

native Hawaiian.     Accordingly, Taxpayers’ allegations concerning

the constitutionality of the tax exemption challenge those

provisions of the HHCA that set forth the lease eligibility

requirements.     We therefore construe Taxpayers’ challenge to the

tax exemption afforded to homestead lessees as a challenge to

those lease eligibility provisions.29

A.    Taxpayers do not have standing to bring their constitutional
      challenges to the HHCA because they have not established an
      injury-in-fact sufficient to confer standing

            As set forth below, Taxpayers have failed to allege an

      29
            Similarly, the respective county codes provide that “real property
leased under homestead and not general leases pursuant to the authority
granted the department of Hawaiian home lands by section 207 of the [HHCA],
shall be exempt from real property taxes, the seven-year limitation on the
exemption . . . notwithstanding.” MCC § 3.48.555 (emphasis added); see also
ROH § 8-10.23 (same); KCC § 5A-11.23 (same); HCC § 19-89 (providing an
exemption for “Hawaiian home lands . . . leased and used as a homestead . . .
pursuant to section 207(a) and subject to the conditions of sections 208 and
216 of the [HHCA]”). The county tax exemptions are therefore granted based on
the same criteria as the HHCA tax exemption, i.e., they are granted to
homestead lessees who meet the eligibility requirements set forth in HHCA
§ 207. Accordingly, we similarly construe Taxpayers’ challenge to the
respective county codes that effectuate the HHCA tax exemption, i.e., MCC
§ 3.48.555, ROH § 8-10.23, KCC § 5A-11.23, HCC § 19-89, as a challenge to the
lease eligibility provisions.

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injury-in-fact with regard to the HHCA’s native Hawaiian ancestry

qualification for homestead lessees.         Accordingly, Taxpayers do

not have standing to bring their challenges to the

constitutionality of the tax exemptions for homestead lessees, or

the HHCA, generally.

            This court has stated that:
            Though the courts of Hawaii are not subject to a
            “cases or controversies” limitation like that imposed
            upon the federal judiciary by Article III, § 2 of the
            United States Constitution, we nevertheless believe
            judicial power to resolve public disputes in a system
            of government where there is a separation of powers
            should be limited to those questions capable of
            judicial resolution and presented in an adversary
            context. . . . In short, judicial intervention in a
            dispute is normally contingent upon the presence of a
            “justiciable” controversy.

Sierra Club v. Dep’t of Transp. (Superferry I), 115 Hawai#i 299,

319, 167 P.3d 292, 312 (2007) (emphasis added) (citations

omitted).

            This court has further explained that:
            Standing is that aspect of justiciability focusing on
            the party seeking a forum rather than on the issues he
            wants adjudicated. And the crucial inquiry in its
            determination is whether the plaintiff has alleged
            such a personal stake in the outcome of the
            controversy as to warrant his invocation of the
            court’s jurisdiction and to justify the exercise of
            the court's remedial powers on his behalf.

County of Kaua#i ex rel. Nakazawa v. Baptiste, 115 Hawai#i 15, 26,

165 P.3d 916, 927 (2007) (quotation marks omitted) (emphasis

added) (quoting Life of the Land v. Land Use Comm’n, 63 Haw. 166,

172, 623 P.2d 431, 438 (1981)).

            We determine whether a plaintiff has alleged a

“personal stake in the outcome of the controversy” sufficient to

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confer standing by asking:      “(1) has the plaintiff suffered an

actual or threatened injury . . . ; (2) is the injury fairly

traceable to the defendant’s actions; and (3) would a favorable

decision likely provide relief for plaintiff’s injury.”

Superferry I, 115 Hawai#i at 319, 167 P.3d at 312 (footnote and

citation omitted) (ellipses in original).

           “With respect to the first prong of this test, the

plaintiff must show a ‘distinct and palpable injury to himself

[or herself]’” as opposed to an alleged injury that is “abstract,

conjectural or merely hypothetical.”        Mottl v. Miyahira, 95

Hawai#i 381, 389, 23 P.3d 716, 724 (2001) (brackets in original)

(citations and some quotation marks omitted) (quoting Life of the

Land, 63 Haw. at 173 n.6, 623 P.2d at 446 n.6; Doyle v. Okla. Bar

Ass’n, 998 F.2d 1559, 1566 (10th Cir. 1993)).          Moreover, a

plaintiff must demonstrate “that they have suffered an injury to

a recognized interest, as opposed to ‘merely airing a political

or intellectual grievance.’”       Id. at 395, 23 P.3d at 730 (quoting

Akau v. Olohana Corp., 65 Haw. 383, 390, 652 P.2d 1130, 1135

(1982)).

           Because this court is not bound by the same “cases or

controversies” limitation as the federal courts, see Superferry

I, 115 Hawai#i at 319, 167 P.3d at 312, federal cases concerning

standing are not dispositive on this issue.          Nevertheless, the

Ninth Circuit Court of Appeals’ analysis in Carroll v. Nakatani,

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342 F.3d 934 (9th Cir. 2003), is persuasive.          In Carroll, the

court affirmed the district court’s grant of summary judgment in

favor of the State and state defendants, on the ground that the

plaintiffs lacked standing to raise equal protection challenges

to various state programs.      Id. at 948.

           Specifically, plaintiff Carroll alleged injury from,

inter alia, “[the Office of Hawaiian Affairs’ (OHA)] allocation

of benefits to native Hawaiians and Hawaiians.”           Id. at 947.

Carroll asserted “that OHA discriminates against him on the basis

of race through the operation of the OHA program[,]” but

“offer[ed] no evidence that he [was] ‘able and ready’ to compete

for, or receive, an OHA benefit” and “[did] not even identif[y] a

program that he would be interested in receiving.”           Id.

(citations omitted).     Carroll also acknowledged that he had never

applied for any OHA programs.       Id.   Accordingly, the court

concluded that “Carroll lack[ed] standing because he fail[ed] to

show an injury from the allocation of benefits to native

Hawaiians and Hawaiians.      He present[ed] only a generalized

grievance, requesting the State to comply with his interpretation

of the United States Constitution.”        Id.

           Similarly, plaintiff Barrett challenged both OHA’s

business loan program and the HHCA homestead lease program.                Id.

at 938.   Barrett had sought to obtain an OHA loan to open a copy

shop.   Id. at 941.   However, his loan application to OHA was

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incomplete, and he had failed to comply with OHA’s request to

complete the omitted information and return his application.                 Id.

at 941.    In addition, Barrett admitted that he had not prepared a

business plan or determined any of the proposed business’s

operational costs, and that “the only step taken in furtherance

of his business was to speak with a sales clerk at Office Depot.”

Id.   The court concluded that Barrett could not demonstrate he

had been denied equal treatment because he “fail[ed] to

demonstrate he [was] ‘able and ready’ to compete on an equal

basis for an OHA loan, or benefit from OHA’s assistance in

applying for one.”       Id. at 942.    Accordingly, the court concluded

that Barrett “fail[ed] to demonstrate an injury in fact,” and

therefore did not have standing to pursue his equal protection

claim.    Id. at 943.

            With regard to Barrett’s challenge to the HHCA

homestead lease program, the court concluded that “Barrett

adequately demonstrated an injury in fact.”            Id.   The court noted

that, in order to obtain a homestead lease, “a person need only

state a desire to obtain a lease and provide certain personal

information.”     Id. (emphasis added).       Thus, Barrett suffered an

injury in fact from the denial of his homestead lease

application.30     Id.

      30
            The court nevertheless concluded that Barrett did not have
standing to pursue his claim because he had failed to name the United States
as a party and his claim was accordingly not redressable. Id. at 944-45. The
                                                                (continued...)

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            The reasoning of Carroll is consistent with the

decisions of this court, which have required that a plaintiff

demonstrate that he or she has “suffered an actual or threatened

injury as a result of the defendants’ conduct[.]”            See, e.g.,

Mottl, 95 Hawai#i at 391, 23 P.3d at 726 (citation omitted);

Sierra Club v. Hawai#i Tourism Auth., 100 Hawai#i 242, 250, 59

P.3d 877, 885 (2002).      For example, in Mottl, the plaintiffs (the

labor union representing University of Hawai#i faculty and

several individual faculty members) filed a complaint “seeking to

prevent the implementation of the ‘payroll lag act[,]’” which

“would have resulted in a reduction in the University of Hawaii’s

expenditures of approximately $6,163,000.00 in fiscal year 1998.”

95 Hawai#i at 383 & n.4; 23 P.3d at 718 & n.4.           The State

defendants filed a motion for summary judgment and a motion to

dismiss the complaint arguing, inter alia, that the plaintiffs

      30
       (...continued)
court explained:

            [Barrett’s] injury, the inability to compete for
            Hawaiian homestead leases on an equal footing with
            native Hawaiians, requires a change in the
            qualification of the lease program. The native
            Hawaiian classification is both a state and a federal
            requirement. Consequently, any change in the
            qualification requires the participation of the State
            of Hawaii and the United States. Barrett's claim is
            not redressable because he failed to include the
            United States as a party to the action despite notice
            that its participation would be necessary.

Id. at 944 (citation omitted) (emphasis added); see also Arakaki v. Lingle,
477 F.3d 1048, 1061 (9th Cir. 2007) (“[T]he United States remains an
indispensable party to any challenge to the DHHL/HHC lease eligibility
criteria.”).

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“suffered no injury as a result of the conduct of which they

complained.”   Id. at 386, 23 P.3d at 721.        The circuit court

granted judgment in favor of the State on the merits.              Id. at

388, 23 P.3d at 723.

          On appeal, this court concluded that the plaintiffs

lacked standing to assert their claims.         Id. at 395, 23 P.3d 730.

In so doing, we noted:
                [T]he plaintiffs’ allegation that the
          withholding of six million dollars from the University
          of Hawaii’s appropriation resulted in “a loss of
          support for working conditions, teaching programs,
          research programs, discretionary support staff,
          replacement of consumable items, and . . .
          electricity and telephone charges” merely invites this
          court to infer that the plaintiffs, or at least some
          of them, were actually affected. In fact, during oral
          argument, the plaintiffs’ counsel conceded that the
          plaintiffs’ claim to standing in the present matter
          depends on such an inference. However, in the absence
          of evidence in the record establishing what “specific”
          and “personal” interest has been affected, the
          plaintiffs’ argument amounts to speculation.
                Moreover, even if the plaintiffs were to have
          alleged specific examples of changes in their work
          environment that had negatively impacted them, they
          would still have the burden of demonstrating that
          these changes were attributable to the defendants’
          actions. The loss of six million dollars could have
          been offset by the university through a tuition
          increase, a reduction in student services, a freeze of
          administrative-as opposed to teaching-staff salaries,
          or other savings without any discernible effect on the
          faculty members.
                The plaintiffs do not attempt to prove any
          specific and personal injury but, rather, press their
          general proposition that, in any organization, a loss
          of six million dollars from its budget must have some
          negative effect on its operations, ultimately
          affecting all of its employees. Their argument calls
          for assumptions or inferences that are not supported
          by the record or any case law that the plaintiffs
          cite. Accordingly, the injury that the plaintiffs
          assert is “abstract, conjectural, or merely
          hypothetical.” Citizens for Protection of North
          Kohala Coastline [v. County of Hawai#i, 91 Hawai#i 94,
          100, 979 P.2d 1120, 1126 (1999)], does not abrogate
          the “injury in fact” standing requirement in actions
          for declaratory relief affecting a public interest,

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            but merely mandates less demanding standards in
            assessing the plaintiffs’ proof of an “injury in
            fact.” Inasmuch as the plaintiffs have failed to
            demonstrate that they suffered an injury to a
            recognized interest, as opposed to “merely airing a
            political or intellectual grievance,” we hold that the
            plaintiffs lacked standing to pursue the present
            action.

Id. at 394-95, 23 P.3d at 729-30 (emphasis added) (citations

omitted).

            In the instant case, Taxpayers have failed to meet

their burden of establishing that the standing requirements have

been satisfied.     See Sierra Club v. Hawai#i Tourism Authority,

100 Hawai#i 242, 250, 59 P.3d 877, 885 (2002) (“Petitioner must

establish its standing for this court to exercise jurisdiction

over this case.”).      In order to meet the first prong of the

injury-in-fact test, i.e., that they had suffered an actual or

threatened injury, Taxpayers were required to establish their

interest in participating in the homestead lease program.

However, as set forth supra, the record does not reflect that

Taxpayers have applied for a homestead lease, and does not

otherwise establish that Taxpayers are interested in

participating in the homestead lease program.           To the contrary,

in their memorandum in opposition to the State’s motion for

summary judgment, Taxpayers asserted that “[n]one of the

[Taxpayers] in these eight consolidated cases ask for award of a

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homestead lease.”31

            Accordingly, Taxpayers’ allegations “merely invite[]

this court to infer that the plaintiffs, or at least some of

them, were actually affected.”        See Mottl, 95 Hawai#i at 394, 23

P.3d at 729.     “[I]n the absence of evidence in the record

establishing what ‘specific’ and ‘personal’ interest has been

affected,” Taxpayers’ argument “amounts to speculation.”              See id.

at 395, 23 P.3d at 730.       Without more, Taxpayers are “‘merely

airing a political or intellectual grievance[,]’” see id., which

the tax appeal court lacked jurisdiction to redress.32

      31
            In their Reply Brief to this court, Taxpayers respond that “[t]he
State’s assertion that [Taxpayers] do not ‘want’ a homestead lease is
incorrect. [Taxpayers] have not applied for a homestead lease. To seek equal
treatment in the taxation of their real property, [T]axpayers are not required
to first make futile applications.” (Emphasis in original) (citation and bold
emphasis omitted). Even assuming arguendo that Taxpayers were not required to
“make futile applications” for homestead leases in order to establish standing
under the injury-in-fact test, nevertheless Taxpayers were required to
establish their interest in participating in the homestead lease program in
order to demonstrate that they had suffered an actual or threatened injury.
Despite Taxpayers’ assertions to the contrary in their Reply Brief, Taxpayers
do not identify anywhere in the record where they have established they are
interested in participating in the homestead lease program.

      32
             We decline to reach the issue, raised in the concurring opinion,
of whether Taxpayers have general taxpayer standing to assert their claims.
Although each of the individual plaintiffs allege that they are taxpayers,
they do not expressly claim general taxpayer standing. See Mottl, 95 Hawai#i
at 391 n.13, 23 P.3d at 726 n.13. Accordingly, we need not address this
theory. Id. (concluding that “the circuit court’s exercise of jurisdiction
over [plaintiffs’] complaint may not be justified on the ground that they were
taxpayers[,]” where plaintiffs did not expressly claim general taxpayer
standing or allege any pecuniary loss resulting from the actions of State
officers in relation to the implementation of the payroll lag act); see also
Hawai#i Tourism Authority, 100 Hawai#i at 250, 59 P.3d at 885 (“Petitioner must
establish its standing for this court to exercise jurisdiction over this
case.”). Moreover, although Taxpayers’ Opening Brief to this court asserts
that the lack of an equivalent tax exemption costs non-homestead real property
owners on Oahu an average of $1,717 per year, this assertion was not before
the tax appeal court on the respective motions for summary judgment. HRS
§ 641-2 (2009) (“Every appeal shall be taken on the record and no new evidence
shall be introduced in the supreme court.”). To the contrary, the
                                                                 (continued...)

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            Additionally, because the record does not establish

that Taxpayers have an interest in becoming homestead lessees, it

is not apparent that any change in the homestead lease

qualification would affect Taxpayers’ interests.            Put another

way, there is no indication in the record that Taxpayers would

become homestead lessees if the native Hawaiian qualification

were abolished.

            Accordingly, Taxpayers have not asserted an injury-in-

fact sufficient to confer standing to challenge the HHCA tax

exemption, or the HHCA, generally.33

B.    This court need not address Taxpayers’ remaining claims

      1.    Taxpayers’ claims of breach of trust and fiduciary duty

            In their Opening Brief, Taxpayers assert that (1)

“[t]he Newlands Resolution established the Ceded Lands Trust[;]”

(2) the trust revenue is required to “be used solely for the

benefit of the inhabitants of the Hawaiian Islands for

educational and other purposes;” and (3) in adopting and

      32
       (...continued)
declarations and exhibits offered in support of Taxpayers’ Memorandum in
Opposition to State’s Motion for Summary Judgment and their Counter-Motion for
Summary Judgment do not specify any pecuniary loss.
            Because we conclude that Taxpayers do not have standing, we need
not address the remaining issues raised in the concurring opinion, i.e.,
whether Taxpayers were required to join the United States as a party, and
which level of scrutiny would apply to Taxpayers’ claims.

      33
            Although the State asserts that Taxpayers have standing to
challenge the tax exemption “in general -- i.e., to challenge the fact that
homesteaders receive the tax exemption, while non-homesteaders do not,” we
note that Taxpayers have not raised any such “general” challenge to the tax
exemption. To the contrary, Taxpayers challenge the tax exemption on only one
ground: that only native Hawaiians are eligible to receive it.

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implementing the HHCA, the State violates its fiduciary duties

under the trust that Taxpayers allege was created by the Newlands

Resolution.34

            In response, the State asserts that Taxpayers’ claims

are not properly before this court and, alternatively, are

without merit.     The State further asserts that (1) “[t]here is

serious question . . . whether a true trust was ‘created’ by [the

Newlands Resolution];” (2) assuming arguendo that a trust was

created, that trust was subsequently modified by the settlor

United States to mandate the homesteader tax exemption; (3) even

assuming the trust was not modified, there are “rational reasons

to allow homesteader inhabitants, and not other inhabitants who

are not homesteaders, the tax exemption;” (4) the Newlands

Resolution called for Congress to “enact special laws” for public

lands management and disposition, and the HHCA is such a law; and

(5) non-homesteaders benefit from the remaining ceded lands not

set aside for the HHCA homesteading program.

            Taxpayers’ argument on this point is not clearly

articulated.     Although Taxpayers provide some background

concerning the Newlands Resolution, Taxpayers do not provide any

      34
             In their Opening Brief, Taxpayers also appear to argue a new issue
concerning the Contracts Clause of the United States Constitution. However,
inasmuch as Taxpayers did not raise their Contracts Clause argument in the tax
appeal court, that argument may be deemed waived. See State v. Moses, 102
Hawai#i 449, 456, 77 P.3d 940, 947 (2003) (“As a general rule, if a party does
not raise an argument at trial, that argument will be deemed to have been
waived on appeal; this rule applies in both criminal and civil cases.”)
(citation omitted).

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specific argument as to how the adoption of the HHCA violated the

trust that Taxpayers allege was created by the Newlands

Resolution.    Accordingly, this point of error may be deemed

waived.   See HRAP Rule 28(b)(7) (“Points not argued may be deemed

waived.”).    Moreover, Taxpayers’ claim before the tax appeal

court concerned the equal protection clause, and their amended

complaint cannot be fairly read to articulate any cause of action

based on breach of fiduciary duty or trust law.

          HRS § 232-16 provides that “[a]n appeal to the tax

appeal court shall bring up for review all questions of fact and

all questions of law, including constitutional questions,

necessary to the determination of the objections raised by the

taxpayer or county in the notice of appeal.” (Emphasis added).

In the instant case, it does not appear that Taxpayers’ breach of

trust and fiduciary duty claims were necessary to the

determination of their objections concerning the tax exemption.

Put another way, a determination that the State had breached its

fiduciary duty by adopting the HHCA would have no bearing on the

constitutionality of the tax exemption.         Accordingly, although it

does not appear that the tax appeal court adjudicated any breach

of trust and fiduciary duty claims, it would have lacked

jurisdiction to do so.     See HRS § 232-16.

     2.   Taxpayers’ equal footing doctrine claims

          Taxpayers assert that (1) “a new state can only be

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admitted on equal footing with all others;” and (2) “Congress

cannot condition a prospective new state’s admission on its

agreement to enter the Union on terms different than the original

states did.”   Accordingly, Taxpayers argue, “a congressional

admission act could not put a new state on an unequal footing by

authorizing it to deny on account of race the right to receive

public benefits.”    (Citation omitted).       Taxpayers further argue

that “Congress cannot authorize a State to violate the [e]qual

[p]rotection [c]lause, nor can it immunize an unconstitutional

program from judicial scrutiny.”

          In its Answering Brief, the State argues that

Taxpayers’ equal footing doctrine claim is not properly before

this court and, in any event, Taxpayers “do not have the right to

even assert the Equal Footing doctrine, as the ‘right’ asserted

belongs to the States . . . , not to Taxpayers.”           The State

further argues that “[i]t surely cannot be a violation of the

Equal Footing Doctrine for the United States to give Hawaii title

to home lands subject to certain conditions when the United

States did not have to give Hawaii title to those lands at all.”

(Emphasis in original).

          At the outset, it should be noted that Taxpayers’

points of error allege that “the United States . . . violated

. . . the Equal Footing Doctrine.”        (Emphasis added).      Insofar as

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Taxpayers’ equal footing doctrine claim appears to allege a claim

against the United States, and Taxpayers have not named the

United States as a party to this action, “[t]his court cannot

undertake to hear and determine questions affecting the interests

of these absent persons unless they are made parties and have had

an opportunity to come into court.”        Filipino Fed’n of Am., Inc.

v. Cubico, 46 Haw. 353, 372, 380 P.2d 488, 498-99 (1963)

(citation omitted); cf. Kahala Royal Corp. v. Goodsill, Anderson,

Quinn & Stifel, 113 Hawai#i 251, 277, 151 P.3d 732, 758 (2007)

(“Generally, ‘[i]t is elementary that one is not bound by a

judgment in personam resulting from litigation in which he is not

designated as a party or to which he has not been made a party by

service of process.’”) (brackets in original) (citation omitted).

            Moreover, as with their breach of trust and fiduciary

duty claims, Taxpayers’ amended complaint cannot be fairly read

to articulate any cause of action based on the equal footing

doctrine.   In addition, it does not appear that Taxpayers’ equal

footing doctrine claim was necessary to the determination of

their objections concerning the tax exemption.          Thus, a

determination that the State was admitted on unequal footing

would have no bearing on the constitutionality of the tax

exemption under the Fourteenth Amendment.         Accordingly, although

it does not appear that the tax appeal court adjudicated any

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equal footing doctrine claims, it would have lacked jurisdiction

to do so.    See HRS § 232-16.

                            IV.    CONCLUSION

            We hold that Taxpayers lack standing to bring their

equal protection challenges because they have not established

that they are interested in participating in the homestead lease

program.    Accordingly, we vacate the tax appeal court’s August 7,

2009 judgment and remand with instructions to dismiss Taxpayers’

complaints for lack of jurisdiction.

                                  /s/ Mark E. Recktenwald
H. William Burgess for
plaintiffs-appellants.
                                  /s/ Paula A. Nakayama
Girard D. Lau, Deputy
                                  /s/ James E. Duffy, Jr.
Attorney General, for
defendants/appellees.
                                  /s/ Rhonda A. Nishimura

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