77 Hawai'i 64, Pele Defense Fund v. Puna Geothermal Venture

• Decision Date: 23 September 1994
• Docket Number: No. 16098,16098
• Parties: 77 Hawai'i 64 PELE DEFENSE FUND, a Hawai'i non-profit corporation; Kapoho Community Association, a Hawai'i non-profit corporation; Robert Petricci; Jennifer Perry; Steve Phillips; and Aurora Martinovitch, Appellants-Appellees, v. PUNA GEOTHERMAL VENTURE, a Hawai'i general partnership; John C. Lewin, M.D., in his capacity as Director of Health; State of Hawai'i, Department of Health, Appellees-Appellants.
• Court: Hawaii Supreme Court

Page 1210

881 P.2d 1210

77 Hawai'i 64

PELE DEFENSE FUND, a Hawai'i non-profit corporation; Kapoho

Community Association, a Hawai'i non-profit corporation;

Robert Petricci; Jennifer Perry; Steve Phillips; and Aurora Martinovitch, Appellants-Appellees, v. PUNA GEOTHERMAL VENTURE, a Hawai'i general partnership;

John C. Lewin, M.D., in his capacity as Director

of Health; State of Hawai'i, Department

of Health, Appellees-Appellants.

No. 16098.

Supreme Court of Hawai'i.

Sept. 23, 1994.

Margery Sue Bronster (Gerald A. Sumida, Gilbert S. Coloma-Agaran, Duane R. Fisher of Carlsmith, Ball, Wichman, Murray, Case, Mukai & Ichiki, with her on the briefs), Honolulu, for appellee-appellant Puna Geothermal Venture.

Anthony L. Ranken, Wailuku, Maui, for appellants-appellees.

Before MOON, C.J., KLEIN, NAKAYAMA and RAMIL, JJ., and WALTER M. HEEN, Intermediate Court of Appeals Judge, In Place of LEVINSON, J., Recused.

KLEIN, Justice.

Puna Geothermal Venture (PGV) appeals the third circuit court's order denying PGV's motion to dismiss for lack of subject matter jurisdiction in an agency appeal brought by Pele Defense Fund (PDF) and other named parties ¹ (collectively "Appellees"). PDF's appeal of the Department of Health's (DOH) decision to grant PGV's requested permits was brought pursuant to Hawai'i Revised Statutes (HRS) § 91-14(a) (1985), ² HRS § 603-21.8 (1985), ³ and Hawai'i Rules of Civil Procedure (HRCP) 72. ⁴

I. Facts

PGV applied to the DOH for two Authority to Construct permits pursuant to HRS chapter 342 (1985). ⁵ Respectively, the permits were for (1) a well field containing fourteen geothermal exploratory and developmental wells, and (2) a power plant. By statute and agency rule, the DOH has discretionary authority to hold public hearings on such applications. See HRS § 342-6(c); Hawai'i Administrative Rules (HAR) § 11-60-45(a). ⁶ At two "public informational hearings" held by the DOH, various individuals testified after requesting contested case hearings. The DOH referred these requests to the Attorney General's (AG's) office, and later informed the individuals that the AG's office had determined that there was no legal mandate to grant a contested case hearing. The DOH accordingly denied the contested case hearing requests and later granted PGV's permit application.

Appellees sought judicial review of the DOH decision in the third circuit court pursuant to HRS § 91-14, HRS § 603-21.8 and HRCP Rule 72. PGV moved to dismiss the appeal arguing that the circuit court lacked subject matter jurisdiction. The circuit court denied the motion, and PGV moved for reconsideration. In a hearing on various motions, the circuit court gave the following reasons for its denial of PGV's motion:

[I]f this was a regular agency appeal ... the Court would basically agree with the PGV's position in terms of a contested case[,] ... [b]ut the Court was greatly influenced by ... the [Mahuiki ] case and another case where there was a directive by the [appellate] courts that in environmental issues, that the technical requirements should not bar an appeal.

And I appreciate that there is no Hawaii case that says that where an environmental issues where there are no mandated public hearings, that you can still have a contested case. I appreciate all the contested cases that have been cited ... [a]ll have a statutory requirement for public hearing.

But the Court was influenced by the admonition that in environmental issues that the technical requirements should not be a bar.

The circuit court then denied PGV's motion for reconsideration, granted Appellees' motion to stay the granted permits, and granted PGV's motion for an interlocutory appeal regarding the jurisdictional issue. PGV timely filed a notice of appeal to this court.

II. Discussion

A. Source of Appellate Jurisdiction

The circuit court was correct in identifying our concern about the barriers facing litigants in matters affecting the environment. Accordingly, in Pele Defense Fund v. Paty, 73 Haw. 578, 592, 837 P.2d 1247, 1257 (1992) and Mahuiki v. Planning Comm'n, 65 Haw. 506, 654 P.2d 874 (1982) we approved less restrictive standing requirements to enable courts as well as agencies to hear cases and determine issues based upon the merits. "Where the interests at stake are in the realm of environmental concerns 'we have not been inclined to foreclose challenges to administrative determinations through restrictive applications of standing requirements.' " Mahuiki, 65 Haw. at 512, 654 P.2d at 878 (emphasis added) (citing Life of the Land v. Land Use Comm'n, 63 Haw. 166, 171, 623 P.2d 431, 438 (1981)).

However broadly we may view a litigant's standing to pursue a legal issue in court or before an agency, every court must nevertheless determine as a threshold matter whether it has jurisdiction to decide the issue presented. Bush v. Hawaiian Homes Comm'n, 76 Hawai'i 128, 133, 870 P.2d 1272, 1277 (Sup.1994) (observing that a judgment rendered without jurisdiction is invalid). "Standing is concerned with whether the parties have the right to bring suit. Subject matter jurisdiction is concerned with whether the court has the power to hear a case." Maryland Waste Coalition v. Maryland Dep't of Educ., 84 Md.App. 544, 581 A.2d 60, 61 (1990). Thus, we must examine the statutes and rules cited by Appellees, as well as constitutional due process considerations, in order to determine whether the circuit court had jurisdiction to entertain their appeal. See Bush, 76 Hawai'i at 134-36, 870 P.2d at 1278-80.

B. Statutory Provisions

1. HRS § 342-13

On appeal, PDF argues that HRS § 342-13 (1985) provides the circuit court with appellate jurisdiction. This section sets forth the following:

If any party is aggrieved by the decision of the director, the party may appeal in the manner provided in chapter 91 to the circuit court of the circuit in which the party resides or has the party's principal place of business or in which the action in question occurred; provided that the operation of a cease and desist order will not be stayed on appeal unless specifically ordered by a court of competent jurisdiction.

HRS § 342-13 (emphasis added).

HRS § 342-13 must be read together with HRS chapter 91, which provides for appeals only from contested cases. See infra subsection II.B.2. Contrary to Appellees' assertions, therefore, HRS § 342-13 itself does not provide a basis for obtaining judicial review.

2. HRS § 91-14

HRS § 91-14(a) provides the means by which judicial review of administrative contested cases can be obtained. Among its prerequisites, the section requires that a contested case must have occurred before appellate jurisdiction may be exercised. Bush, 76 Hawai'i at 133, 870 P.2d at 1277. A contested case is an agency hearing that 1) is required by law and 2) determines the rights, duties, or privileges of specific parties. See HRS § 91-1(5) (1985). ⁷ Appellants seeking judicial review under HRS § 91-14 must also follow agency rules "relating to contested case proceedings ... properly promulgated under HRS Chapter 91[.]" Simpson v. Department of Land & Natural Resources, 8 Haw.App. 16, 24, 791 P.2d 1267, 1273 (1990).

a. Hearing required by law

According to HRS § 91-1(5), a discretionary hearing cannot be a "contested case" because it fails to meet the "required by law" test. See Bush, 76 Hawai'i at 134-35, 870 P.2d at 1278-79. The parties do not dispute that public hearings held by the DOH were not required by statute or agency rule. ⁸ Consequently, the remaining question is whether the hearings were required by constitutional due process. See id. at 135-36, 870 P.2d at 1279-80.

Constitutional due process protections mandate a hearing whenever the claimant seeks to protect a "property interest," in other words, a benefit to which the claimant is legitimately entitled. Id. at 136, 870 P.2d at 1280 (citing Aguiar v. Hawaii Housing Authority, 55 Haw. 478, 495, 522 P.2d 1255, 1267 (1974), and Sandy Beach Defense Fund v. City Council, 70 Haw. 361, 377, 773 P.2d 250, 260 (1989)). ⁹ The dispositive issue, therefore, is whether "[PGV's] interest in [obtaining an ATC permit] ... constitutes a 'property' interest such that the agency hearing was a 'contested case' pursuant to HRS § 91-14(a)." Bush, 76 Hawai'i at 136, 870 P.2d at 1280.

PGV itself asserts that "a [contested case] is required when property interests, such as PGV's use of its project site, are implicated." PGV is correct with respect to the agency's denial of a proposed property use. See supra note 8 (quoting HRS § 342-6(c)). Furthermore, as a matter of constitutional due process, an agency hearing is also required where the issuance of a permit implicating an applicant's property rights adversely affects the constitutionally protected rights of other interested persons who have followed the agency's rules governing participation in contested cases. See infra sections II.B.2.b. and c.; cf. Bush, 76 Hawai'i at 136, 870 P.2d at 1280 (holding that the court does not have jurisdiction to hear the claims of persons aggrieved by a final agency decision involving third party agreements because the subject matter of the hearing did not concern "property interests" under the Hawaiian Homes Commission Act and the HAR).

The public hearings held by the DOH were proceedings in which PGV "sought to have the legal rights, duties or privileges of land in which it held an interest declared over the objections of other landowners and residents of" Puna. Mahuiki v. Planning Comm'n, 65 Haw. 506, 513, 654 P.2d 874, 879 (1982) (concluding that this characteristic is an "obvious" element of a contested case hearing); see also Town v. Land Use Comm'n, 55 Haw. 538, 548, 524 P.2d 84, 91 (1974) (holding that adjacent property owner has a property interest in the amendment of a district boundary). Thus, the DOH hearings were "contested case[s]" because they were "proceeding[s] in which the legal rights, duties or privileges of specific parties were...