76 Hawai'i 128, Bush v. Hawaiian Homes Com'n

• Decision Date: 05 April 1994
• Docket Number: No. 16840,16840
• Citation: 870 P.2d 1272,76 Hawaii 128
• Parties: 76 Hawai'i 128 Leiff Koa BUSH and Martin D.L. Kahae, on behalf of themselves and others similarly situated, Appellants-Appellants, v. HAWAIIAN HOMES COMMISSION; Hoaliku Drake, in her official capacity as Chairperson of the Hawaiian Homes Commission; Andrew Apana, Nani Brandt, Dennis Kauahi, Edison Keomaka, Ann Nathaniel, Alvina Park, George Robertson, and Walter Smith, Jr., in their official capacities as members of the Hawaiian Homes Commission, Appellees-Appellees.
• Court: Hawaii Supreme Court

Page 1272

870 P.2d 1272

76 Hawai'i 128

Leiff Koa BUSH and Martin D.L. Kahae, on behalf of themselves and others similarly situated Appellants-Appellants, v. HAWAIIAN HOMES COMMISSION; Hoaliku Drake, in her official capacity as Chairperson of the Hawaiian Homes Commission Andrew Apana, Nani Brandt, Dennis Kauahi, Edison Keomaka Ann Nathaniel, Alvina Park, George Robertson, and Walter Smith, Jr., in their official capacities as members of the Hawaiian Homes Commission, Appellees-Appellees.

No. 16840.

Supreme Court of Hawai'i.

April 5, 1994.

As Amended May 3, 1994.

Syllabus by the Court

1. Unless jurisdiction of the court over the subject matter exists, any judgment rendered is invalid.

2. All state and county boards, commissions, departments or offices must conform to the requirements of the Hawai'i Administrative Procedure Act when acting in the adjudication of a contested case.

3. Under the Hawai'i Administrative Procedure Act, a person aggrieved by a final decision or order of an administrative agency in a contested case is entitled to judicial review of such decision or order. Hawai'i Revised Statutes § 91-14(a).

4. Standing to invoke judicial review under the Hawai'i Administrative Procedure Act is contingent upon, not only a showing that a party has been aggrieved by agency action, but also that the party has participated in a contested case hearing before an administrative agency.

5. A "contested case" is defined as "a proceeding in which the legal rights, duties, or privileges of specific parties are required by law to be determined after an opportunity for agency hearing." Hawai'i Revised Statutes § 91-1(5).

6. If the statute or rule governing the activity in question does not mandate a hearing prior to the administrative agency's decision-making, the actions of the administrative agency do not amount to "a final decision or order in a contested case" from which an appeal to the circuit court is possible. When no hearing is mandated by statute or rule, there is no contested case.

7. The adjudicatory procedures of the Hawaii Administrative Procedure Act apply to hearings which an agency is constitutionally required to provide.

8. In order to assert a right to procedural due process, the complainant must possess an interest that qualifies as "property" within the meaning of the constitution. This property interest is not limited to the traditional right/privilege distinction in that a benefit which one is entitled to receive by statute constitutes a constitutionally protected property interest. However, to have a property interest in a benefit, a person clearly must have more than an abstract need or desire for it. He or she must have more than a unilateral expectation of it. He or she must, instead, have a legitimate claim of entitlement to it.

9. If a contested case hearing has not been held, the appropriate mechanism to contest the validity of an administrative agency's decision is not Hawai'i Revised Statutes (HRS) § 91-14(a), which provides judicial review of a contested case. HRS § 91-14(a), however, does not bar alternative forms of redress. "[N]othing in this section [91-14] shall be deemed to prevent resort to other means of review, redress, relief, or trial de novo, including the right of trial by jury, provided by law." HRS § 91-14(a) (1985) (emphasis added).

Paul F.N. Lucas (Alan T. Murakami, Carl C. Christensen and Arnold Lum, with him on the briefs; Native Hawaiian Legal Corp.), Honolulu, for appellants.

Steven S. Michaels (Girard D. Lau, George K.K. Kaeo, Jr., Clayton Lee Crowell, Kumu B. Vasconcellos, with him on the briefs), Deputy Attys. Gen., Honolulu, for appellees.

Before MOON, C.J., and KLEIN, LEVINSON, NAKAYAMA and RAMIL, JJ.

NAKAYAMA, Justice.

Ho'olehua, Moloka'i residents Leiff Koa Bush and Martin D.L. Kahae (Appellants) appeal from a denial of their request for judicial review of the Hawaiian Homes Commission's (Commission) approval of third party agreements between non-Hawaiian farmers and native Hawaiian lessees pursuant to the Hawaiian Homes Commission Act. The dispositive question is whether the circuit court had jurisdiction to review an agency appeal brought under Hawai'i Revised Statutes (HRS), chapter 91, the Hawai'i Administrative Procedures Act (HAPA), pursuant to HRS § 91-14(a) (1985). Because a contested case hearing did not precede Appellants' appeal, we affirm the circuit court's order dismissing the appeal.

I. BACKGROUND

The State of Hawai'i and the Congress of the United States enacted the Hawaiian Homes Commission Act (HHCA) to "enable native Hawaiians ¹ to return to their lands in order to fully support self-sufficiency." HHCA, 1920; Act of July 9, 1921, c. 42, 42 Stat. 108 (codified as amended at 48 U.S.C. note prec. § 491 (1988) and Haw. Const. art. XII, § 1), reprinted in 1 Haw.Rev.Stat. 39 (1992 Supp.) (HHCA, 1920, § 101) (hereafter, the HHCA will be cited as reprinted in Haw.Rev.Stat.). The task of implementing this policy has been delegated, pursuant to the HHCA § 222 entitled "Administration," to the Department of Hawaiian Home Lands (DHHL), headed by the Commission. Section 222 of the HHCA provides that the DHHL "shall adopt rules and regulations and policies in accordance with chapter 91, Hawai'i Revised Statutes." 1 Haw.Rev.Stat. 39, 227 (1992 Supp.) (HHCA, 1920, § 222). Consequently, Title 10, entitled "Department of Hawaiian Home Lands," of the Hawai'i Administrative Rules (HAR) was promulgated to establish the parameters of the DHHL's and Commission's powers.

A principal purpose of the HHCA includes "[p]lacing native Hawaiians on the lands set aside under this Act in a prompt and efficient manner and assuring long-term tenancy to beneficiaries of this Act and their successors." 1 Haw.Rev.Stat. 39 (1992 Supp.) (HHCA, 1920, § 101). This purpose is effectuated, in part, by the leasing of state land, deemed "Hawaiian home lands," in plots not to exceed forty acres, to native Hawaiians for use as a home and to cultivate as a farm at the minimal price of one dollar per year for a period of ninety-nine years.

Appellants are native Hawaiians and beneficiaries of the HHCA in Ho'olehua on the island of Moloka'i. Appellant Bush currently holds a one acre houselot with a seven and one-half acre agriculture homestead lot upon which he cultivates crops. He is also farming his grandmother's thirty-five to forty acre Hawaiian homestead agriculture lot. Appellant Kahae leases a forty acre agricultural homestead lot upon which he cultivates crops and also raises goats.

From 1980-1992, Larry Jefts (Jefts) and other non-Hawaiian farmers entered into third party agreements (TPAs) with a number of native Hawaiian lessees on Moloka'i whereby the non-Hawaiian third parties contracted to use the lessees' crop acres for farming or pastoral purposes. The native Hawaiian lessees in turn received compensation in the form of monthly payments ranging from $120.00 to $200.00. Jefts and other third party non-Hawaiian farmers thereby contracted for the use of a number of leaseholds, accumulating considerable acreage upon which to facilitate large scale agribusiness. By the time Appellants petitioned the Commission to protest these agreements, Jefts had amassed close to 495 acres, which included approximately thirteen different leaseholds.

On December 18, 1987, Appellant Kahae and his family appeared before the Commission to contest the validity of the TPAs as violative of the HHCA provision prohibiting transfer of the native Hawaiian lessees' interest in the land. The Commission determined that the TPAs, when properly executed, did not violate the provisions of the HHCA and would provide "economic benefits" to the Moloka'i homesteaders. The Commission then had the DHHL notify all lessees by letter dated December 3, 1992 that if they intended to enter into a TPA, they must obtain written approval from the Commission in accordance with HAR § 10-3-35, entitled "Contracts covering lease lands."

Twenty-one homestead lessees from Ho'olehua, Moloka'i responded to the above notification by submitting written requests to the Commission for approval of their TPAs. The Commission planned to consider these petitions at its next regularly scheduled monthly public meeting on April 28, 1992 in Honolulu.

Four days before this meeting, Appellants, in accordance with HAR § 10-5-31, petitioned for a "contested case hearing," as defined in HRS § 91-1 (1985). This petition involved requesting a formal hearing in which Appellants' legal rights, duties, or privileges would be determined in relation to the TPAs prior to the Commission taking final action on the TPAs. On April 28, 1992, Appellants' counsel appeared before the Commission to formally request a contested case hearing and to reiterate Appellants' position against the validation of the TPAs. The Commission voted to defer action on the TPAs until its next regularly scheduled meeting set for May 19, 1992 on Kauai so as to allow the DHHL time for further investigation of the issue and a chance to formulate a recommendation.

Thereafter, Appellants made a request to postpone the consideration of the TPAs because Appellants' attorney would not be able to attend the May 19, 1992 meeting. The Commission denied this request. At the May meeting, the Commission voted to approve the twenty-three TPAs submitted by homestead lessees (twenty-two from Moloka'i and one from the island of Hawai'i) and also denied Appellants' request for a contested case hearing. Appellants appealed both agency decisions to the circuit court under HAPA, pursuant to HRS § 91-14(a). Upon motion by the Commission, the circuit court dismissed the appeal based on a lack of subject matter jurisdiction. This timely appeal followed.

II. DISCUSSION

If a court lacks jurisdiction over the subject matter of a proceeding, any judgment rendered in that proceeding is invalid. Therefore, " '[s]uch a question is valid at any stage of the case, and though a...