79 Hawai'i 425, Public Access Shoreline Hawaii by Rothstein v. Hawai'i County Planning Com'n by Fujimoto, No. 15460

• Court: Supreme Court of Hawai'i
• Writing for the Court: Before MOON
• Citation: 903 P.2d 1246,79 Hawaii 425
• Decision Date: 31 August 1995
• Docket Number: No. 15460
• Parties: 79 Hawai'i 425 PUBLIC ACCESS SHORELINE HAWAII, by Jerry ROTHSTEIN, its coordinator; and Angel Pilago, Appellants-Appellees-Respondents, v. HAWAI'I COUNTY PLANNING COMMISSION, by Fred Y. FUJIMOTO in his capacity as its chairman; and Nansay Hawaii, Inc., a Hawai'i corporation, Appellees-Appellants-Petitioners.

Page 1246

903 P.2d 1246 79 Hawai'i 425 PUBLIC ACCESS SHORELINE HAWAII, by Jerry ROTHSTEIN, its
coordinator; and Angel Pilago,
Appellants-Appellees-Respondents,
v.
HAWAI'I COUNTY PLANNING COMMISSION, by Fred Y. FUJIMOTO in
his capacity as its chairman; and Nansay Hawaii,
Inc., a Hawai'i corporation,
Appellees-Appellants-Petitioners. No. 15460. Supreme Court of Hawai'i. Aug. 31, 1995.

Page 1249

[79 Hawai'i 428] Roy Vitousek, III (J. Robert Arnett, II, Nani Lee and John P. Powell of Cades, Schutte, Fleming and Wright, with him on the briefs), Honolulu, for Appellee-Petitioner Nansay Hawaii, Inc.

Joseph Kamelamela, Deputy Corporation Counsel (Michael J. Matsukawa with him on the briefs), Hilo, for Appellee-Petitioner Hawai'i County Planning Commission.

Skip Spaulding (Arnold L. Lum, Denise E. Antolini, Eric S. Walters, San Francisco, CA, and Lea O. Hong of Sierra Club Legal Defense Fund, with him on the briefs), Honolulu, for Appellants-Respondents Public Access Shoreline Hawaii and Angel Pilago.

David Kaapu, on the briefs, Kailua Kona, for the Kona Hawaiian Civic Club.

Mililani Trask, Kia'aina, on the briefs, Honolulu, for Ka Lahui Hawai'i.

David L. Callies, Orlando R. Davidson, and Gordon M. Arakaki, on the briefs, Honolulu, for the Land Use Research Foundation.

Carl C. Christensen, Alan T. Murakami, and Paul F.N. Lucas (Native Hawaiian Legal Corporation), on the briefs, Honolulu, for Pele Defense Fund.

Sherry P. Broder and Jon M. Van Dyke, on the briefs, Honolulu, for the Office of Hawaiian Affairs.

Steven S. Michaels and Girard D. Lau, Deputy Attorneys General, on the briefs, Honolulu, for the State of Hawai'i.

Hayden Aluli, on the briefs, Honolulu, for the 'Ohana Council.

Williamson B.C. Chang and David Michael Foulkes, on the briefs, Honolulu, for Protect Kohanaiki 'Ohana, Inc., Kalamaula Homestead Association, and the Native Hawaiian Environmental Defense Fund.

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

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[79 Hawai'i 429] KLEIN, Justice.

We issued a writ of certiorari to review the decision of the Intermediate Court of Appeals (ICA) in this case, which concerns a challenge by Public Access Shoreline Hawaii (PASH) and Angel Pilago to the Hawai'i County Planning Commission's (HPC) decision denying them standing to participate in a contested case hearing on an application by Nansay Hawai'i, Inc. (Nansay) for a Special Management Area (SMA) use permit.

In order to pursue development of a resort complex on land within a SMA on the island of Hawai'i (Big Island), Nansay applied to the HPC for a SMA use permit. PASH, an unincorporated public interest membership organization based in Kailua-Kona, and Pilago opposed the issuance of the permit and requested contested case hearings before the HPC. The HPC denied the requests on the ground that, under its rules, neither PASH nor Pilago had standing to participate in a contested case. The HPC subsequently issued a SMA use permit to Nansay. When the case came before the circuit court, the court essentially vacated the permit by remanding to the HPC with instructions to hold a contested case hearing in which both PASH and Pilago would be allowed to participate. In other words, because the SMA permit was granted pursuant to flawed procedures, the circuit court implicitly concluded that the SMA permit was void. On appeal, the ICA affirmed the circuit court's order with respect to PASH and reversed it with respect to Pilago. For the reasons set forth below, we affirm the ICA's decision and remand the case to the HPC for proceedings consistent with this opinion.

I. BACKGROUND FACTS

The HPC received a SMA use permit application from Nansay for a resort development on the Big Island. Nansay sought approval of its plans to develop a community complex including: two resort hotels with over 1,000 rooms; 330 multiple family residential units; 380 single family homes; a golf course; a health club; restaurants; retail shops; an artisan village; a child care center; and other infrastructure and improvements over a 450 acre shoreline area in the ahupua'a ¹ of Kohanaiki on the Big Island. On September 28, 1990, the HPC held a public hearing on Nansay's permit application, as required by the agency's rules. See County of Hawai'i Planning Commission, Rules of Practice and Procedure (HPC Rules) 9-11(B) (1992). ² At the public hearing, many parties presented testimony, including Pilago and the coordinator of PASH. Various individuals and groups orally requested contested case hearings. ³

On November 8, 1990, after further testimony and discussion, the HPC determined that PASH and Pilago's interests were "not clearly distinguishable from that of the general public" and, therefore, that they did not have standing to participate in a contested case. See HPC Rule 4-2(6)(B). ⁴ The HPC

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[79 Hawai'i 430] then voted to deny the contested case requests and to grant Nansay a SMA use permit.

PASH and Pilago sought review in circuit court of both agency decisions (denial of their contested case requests and issuance of the SMA use permit) pursuant to HRS §§ 91-14 and 205A-6 (1985). ⁵ The circuit court determined that the HPC erred in finding that PASH and Pilago did not have interests that were distinguishable from the general public. Accordingly, the court remanded the case with instructions for the HPC to grant PASH and Pilago a contested case hearing pursuant to its rules.

Nansay and the HPC appealed, and the ICA affirmed in part, holding that PASH was entitled to contested case hearing procedures. PASH I, at 253, 900 P.2d at 1317. The ICA's conclusion was based on its determination that the HPC "disregarded the rules regarding the gathering rights of native Hawaiians and its obligation to preserve and protect those rights." Id. In other words, the ICA determined that PASH's "interest in the proceeding was clearly distinguishable from that of the general public[.]" Id. ⁶ However, the ICA reversed the circuit court with respect to Pilago, explaining that his acknowledged "special" interest in the proceeding was not a sufficiently "personal" interest "clearly distinguishable from that of the general public." Id. at 254, 900 P.2d at 1318.

The HPC and Nansay subsequently applied for a writ of certiorari, which we granted on May 7, 1993.

II. THE RIGHTS OF A NON-APPEALING PARTY

Appeals from decisions of the ICA are governed by HRS § 602-59 (1985), which provides for an appeal only by application for writ of certiorari. State v. Bolosan, 78 Hawai'i 86, 88, 890 P.2d 673, 675 (1995). In the instant case, the ICA ruled against the HPC and Nansay with respect to PASH's claims, and against Pilago with respect to his claims. The HPC and Nansay accordingly filed applications for writs of certiorari.

Notwithstanding our October 28, 1993 order permitting Pilago's counsel to withdraw and allowing PASH's representative to appear as counsel for Pilago, Pilago never filed

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[79 Hawai'i 431] an application for writ of certiorari from the decision of the ICA. Accordingly, we decline to address Pilago's asserted rights in this opinion.

III. JURISDICTIONAL REQUIREMENTS

It is well-settled that "every court must ... determine as a threshold matter whether it has jurisdiction to decide the issue[s] presented." Pele Defense Fund v. Puna Geothermal Venture, 77 Hawai'i 64, 67, 881 P.2d 1210, 1213 (1994). Moreover, subject matter jurisdiction may not be waived and can be challenged at any time. Bush v. Hawaiian Homes Comm'n, 76 Hawai'i 128, 133, 870 P.2d 1272, 1277 (1994).

In the instant case, the HPC and Nansay argue that the circuit court lacked jurisdiction to consider PASH's claims. Nansay asserts further that the proper remedy for PASH to pursue was an action for declaratory judgment and/or an injunction, rather than an appeal under HRS § 91-14. PASH contends that the circuit court properly exercised appellate jurisdiction under HRS § 91-14. ⁷

The necessary inquiry in this case, therefore, is whether PASH has met the requirements of HRS § 91-14: first, the proceeding that resulted in the unfavorable agency action must have been a "contested case" hearing--i.e., a hearing that was 1) "required by law" and 2) determined the "rights, duties, and privileges of specific parties"; second, the agency's action must represent "a final decision and order," or "a preliminary ruling" such that deferral of review would deprive the claimant of adequate relief; third, the claimant must have followed the applicable agency rules and, therefore, have been involved "in" the contested case; and finally, the claimant's legal interests must have been injured--i.e., the claimant must have standing to appeal. See generally Puna Geothermal, supra. In the remaining subsections of this part, we shall apply this test to the circumstances presented in this appeal.

A. Contested Case Hearing

In Puna Geothermal, we observed that "a contested case must have occurred before appellate jurisdiction may be exercised. A contested case is an agency hearing that 1) is required by law and 2) determines the rights, duties, or privileges of specific parties." 77 Hawai'i at 67-68, 881 P.2d at 1213-14 (citations and footnote omitted). In order for a hearing to be "required by law," it may be required by statute, agency rule, or constitutional due process. See id. at 68, 881 P.2d at 1214.

In the instant case, we need only look to agency rules promulgated under the authority of HRS § 205A-29 to find the hearing requirement. ⁸ See HPC Rule 9-11(B), supra note 2. In fact, the respective county planning commissions for all the neighbor

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[79 Hawai'i 432] islands are authorized under the Coastal Zone Management Act (CZMA), HRS chapter 205A, and in accordance with the Hawai'i Administrative Procedures Act (HAPA), HRS chapter 91, to establish rules governing the grant or denial of a SMA permit. ⁹ See, e.g., Chang v. Planning Comm'n, 64 Haw. 431, 436, 643 P.2d 55, 60 (1982). In...