78 Hawai'i 192, Aged Hawaiians v. Hawaiian Homes Com'n

• Decision Date: 14 March 1995
• Docket Number: No. 16974,16974
• Citation: 891 P.2d 279
• Court: Hawaii Supreme Court
• Parties: 78 Hawai'i 192 The AGED HAWAIIANS, an unincorporated association, Plaintiffs-Appellants, v. HAWAIIAN HOMES COMMISSION; Kali Watson, in his capacity as Chairman-designate of the Hawaiian Homes Commission; 1 Andrew Apana, Nani Brandt, Rockne Freitas, Dennis Kauahi, Llewellyn Kumalae, Ann Nathaniel and Patricia Sheehan, in their capacities as members of the Hawaiian Homes Commission; and The Department of Hawaiian Home Lands, Defendants-Appellees.

Page 279

891 P.2d 279

78 Hawai'i 192

The AGED HAWAIIANS, an unincorporated association Plaintiffs-Appellants, v. HAWAIIAN HOMES COMMISSION; Kali Watson, in his capacity as Chairman-designate of the Hawaiian Homes Commission;¹ Andrew Apana, Nani Brandt, Rockne Freitas Dennis Kauahi, Llewellyn Kumalae, Ann Nathaniel and Patricia Sheehan, in their capacities as members of the Hawaiian Homes Commission; and The Department of Hawaiian Home Lands, Defendants-Appellees No. 16974.

Supreme Court of Hawai'i.

March 14, 1995.

Paul Nahoa Lucas (Alan T. Murakami with him on the briefs of the Native Hawaiian Legal Corp.), Honolulu, for plaintiffs-appellants.

Steven S. Michaels (Girard D. Lau, Clayton Lee Crowell, Sonia Faust and George K.K. Kaeo, Jr., with him on the brief), Deputy Attys. Gen., Honolulu, for defendants-appellees.

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

KLEIN, Justice.

The Aged Hawaiians, an unincorporated association that includes native Hawaiian beneficiaries under the Hawaiian Homes Commission Act (HHCA), ² appeal from the third circuit court's order granting in part and denying in part a motion by the Hawaiian Homes Commission (Commission), the individually named members of the Commission, and the Department of Hawaiian Home Lands (DHHL) (collectively the Appellees) to dismiss the Aged Hawaiians' Second Amended Complaint, or alternatively, for summary judgment. Although the factual and procedural elements presented in this appeal are complex, the fundamental issue is whether the circuit court properly dismissed the Aged Hawaiians' federal claims under 42 U.S.C. § 1983.

I. BACKGROUND

At the inception of the Hawaiian homelands program, the Commission was given control over approximately 200,000 acres of land from which it was to create homesteads for native Hawaiian beneficiaries. The HHCA created three categories of homestead lots: agricultural, pastoral, and residential. See 1 Haw.Rev.Stat. 167, 182 (1985) (HHCA, 1920, § 207(a)). This case focuses on the Commission's administration of homelands in the pastoral category.

In 1952, the Commission withdrew 18,000 acres of pastoral land, including portions of Pu'ukapu on the Big Island of Hawai'i, from general leasing (i.e., leases to non-beneficiaries under HHCA § 204) for homesteading. The Commission then selected 187 out of 427 original applicants as the "best qualified" potential pastoral lessees (i.e., those with the maximum chance of success at commercial ranching) and placed them on a waiting list. Forty-eight pastoral homestead lots ranging in size from 200 to 300 acres were awarded to those at the top of that waiting list. The Commission decided not to award lots on the remaining portions of the Pu'ukapu homestead lands "until it [could] be determined whether the rainfall in the vicinity [could] support individual small ranches." While many native Hawaiian beneficiaries remained on the waiting lists for homestead lots, much of the acreage was instead used for general leasing, ostensibly in order to raise revenue to prepare the land for homesteading. ³

Eventually, as part of its 1987 Raw Lands Acceleration Program, the Commission adopted a policy to award pastoral lots of no more than 100 acres based on a "subsistence ranching" concept designed to enable native Hawaiian homesteaders to supplement their family needs. Although no awards were made under this subsistence ranching policy, which formally expired at the end of 1987, the Commission continued to analyze possible future pastoral awards based on this policy.

On July 25, 1988, James Akiona submitted a petition to the Commission seeking a contested case hearing. ⁴ He hoped to (1) "present evidence of [his] desire and capability to engage in commercial ranching activities at Pu'ukapu" and (2) challenge the potential issuance of subsistence ranching leases because such awards would be inconsistent with HHCA §§ 207 and 219.1. ⁵ On December 20, 1988, while Akiona's request was pending, the Commission adopted "ten premises" or guidelines for its pastoral development program. ⁶

On February 21, 1989, the Commission notified Akiona that it had denied his contested case hearing request. The Commission determined that there was no basis for granting the request because (1) the Commission had not yet initiated any action on Akiona's application for a pastoral homestead lease, (2) there was no substance to support the petition, and (3) a contested case hearing would be inappropriate. Later, the Commission proposed to offer 195 lots (ranging in size from five to twenty acres) on 3,000 acres of Pu'ukapu lands, which were to be awarded in early summer 1989 in accordance with the Commission's "ten premises" rule. ⁷

On July 17, 1989, Akiona and the Aged Hawaiians filed a complaint for declaratory and injunctive relief in the third circuit court. On August 31, 1989, Akiona and the Aged Hawaiians moved for partial summary judgment on their claim that the "premises" were rules requiring compliance with the official notice-and-comment provisions of HRS chapter 91. The motion was granted on October 4, 1989, and the trial court issued an order enjoining future pastoral lot awards until the Commission complied with chapter 91. On January 30, 1990, the circuit court denied a motion by Akiona and the Aged Hawaiians dated December 26, 1989, in which they sought summary judgment and a permanent injunction with respect to their remaining claims. On the same day, the circuit court also denied their December 28, 1989 motion seeking certification as a class action on behalf of all qualified beneficiaries "who seek a pastoral homestead lot large enough to allow them to become economically self-sufficient by ranching."

Notwithstanding what the Appellees characterize as "serious deficiencies" in the circuit court's October 4, 1989 decision, the Commission and DHHL formally adopted a rule containing the ten premises on May 22, 1990. See HAR § 10-3-29, supra note 6. At the public hearings held by the Commission prior to this rule-making action, the Aged Hawaiians submitted an alternative procedural proposal for awarding pastoral homestead lots. The Commission declined to adopt the Aged Hawaiians' proposal, but voted unanimously: "[to] address the concerns of those native Hawaiians who have the capability to commercial ranch [sic]; that these native Hawaiians be given the opportunity to do so; and, that [DHHL] present to [the Commission] a proposal to effectuate commercial ranching." However, the Commission did not suspend the awarding of lots until the DHHL could prepare a proposal, and the record does not indicate that the DHHL has ever presented such a proposal.

On July 31, 1990, a mere ten days after HAR § 10-3-29 was approved by the Governor, the Commission adopted its 1990 pastoral lot size plan (1990 Plan). The Commission took this action without consulting the Aged Hawaiians or Akiona, despite their repeated requests for information and attempts to secure an opportunity to comment. The only substantive change from the 1990 Plan's predecessor was the addition of eight 100 acre and eight 200 acre lots at Pu'ukapu, plus twenty-two unimproved homestead lots at Ka'u (seventeen lots at twenty-five acres each) and Humu'ula (five lots at 100 acres each). ⁸ The larger lots were not created as "economic units," see supra note 6, but as "good faith responses" to the desires of those beneficiaries who sought commercial ranching opportunities.

On August 23, 1990, Akiona and the Aged Hawaiians filed two motions: (1) seeking a preliminary injunction to prevent DHHL from awarding subsistence pastoral lots under the 1990 Plan, and (2) seeking to amend their complaint. In denying the motion for preliminary injunction, the circuit court held that the Aged Hawaiians' members would

not be irreparably harmed [because] their priority status [assures] that they will be offered lots and they will still be able to litigate the remaining issues in this case. The issue of whether [the Aged Hawaiians] are likely to prevail on the merits is a close question; the public interest favors the awarding of the lots to the beneficiaries.

"Order Denying Motion for Preliminary Injunction; Order Granting Motion to Amend Complaint," dated September 4, 1990. (Emphasis added.) ⁹ The Aged Hawaiians' first amended complaint, which was dated September 21, 1990, addressed the changed circumstances accompanying adoption and subsequent implementation of the 1990 Plan, and also asserted jurisdiction under HRS § 91-14. On September 15, 1990, those on the waiting list selected all of the available lots, with the first twenty-one applicants (including Akiona) allowed a right of first refusal upon the 100 and 200 acre lots.

On September 18, 1990, Akiona and the Aged Hawaiians filed their third motion for summary judgment, which included a request for permanent injunctive relief. The Commission's Chairperson, Hoaliku Drake, responded by sending a letter dated September 21, 1990 to the awardees notifying them of the pending litigation. This letter informed the awardees that the lawsuit by Akiona and the Aged Hawaiians sought "to prohibit the department from issuing you your pastoral lease ... and challeng[es the Commission's] July 31, 1990[ ] action authorizing the award of the pastoral lots selected on September 15, 1990[.]" One week after Drake wrote her letter, Akiona withdrew from the litigation by stipulation of the parties. ¹⁰ Although a hearing on the motion for summary judgment was scheduled to take place on September 28, 1990, the record does not indicate that any action was taken. Evidently, the remaining parties instead entered into consensual mediation in an unsuccessful effort to settle the suit.

In the ensuing months, the Aged Hawaiians amended their complaint once again, ¹¹ requested answers to interrogatories, and sought the production of documents by the Appellees. Thereafter, on January 15, 1992, the Aged...