Ho‘omoana Found. v. Land Use Comm'n

• Decision Date: 23 May 2022
• Docket Number: S. CAAP-17-0000173,CAAP-17-0000181
• Citation: 151 Hawai‘i 166,509 P.3d 1129 (Table)
• Parties: HO‘OMOANA FOUNDATION, Appellant-Appellee, v. LAND USE COMMISSION, State of Hawai‘i, Appellee-Appellee, and Pu‘unoa Homeowners Association, Inc.; and Ross R. Scott, Appellees-Appellants.and Ho‘omoana Foundation, Appellant-Appellee, v. Land Use Commission, State of Hawai‘i, Appellee-Appellant, and Pu‘unoa Homeowners Association, Inc.; and Ross R. Scott, Appellees-Appellees.
• Court: Hawaii Court of Appeals

151 Hawai‘i 166

509 P.3d 1129 (Table)

HO‘OMOANA FOUNDATION, Appellant-Appellee,

v.LAND USE COMMISSION, State of Hawai‘i, Appellee-Appellee,andPu‘unoa Homeowners Association, Inc.; and Ross R. Scott, Appellees-Appellants.

and

Ho‘omoana Foundation, Appellant-Appellee,

v.Land Use Commission, State of Hawai‘i, Appellee-Appellant,andPu‘unoa Homeowners Association, Inc.; and Ross R. Scott, Appellees-Appellees.

NOS. CAAP-17-0000173

CAAP-17-0000181

Intermediate Court of Appeals of Hawai‘i.

May 23, 2022

On the briefs:

Deborah K. Wright, Keith D. Kirschbraun, Douglas R. Wright, for Appellees-Appellants PU‘UNOA HOMEOWNERS ASSOCIATION, INC. and ROSS R. SCOTT.

Robert T. Nakatsuji, Deputy Solicitor General, for Appellee-Appellant LAND USE COMMISSION, STATE OF HAWAI‘I.

James W. Geiger, for Appellant-Appellee HO‘OMOANA FOUNDATION.

(By: Hiraoka, Presiding Judge, Nakasone and McCullen, JJ.)

MEMORANDUM OPINION

Appellees-Appellants Pu‘unoa Homeowners Association, Inc. and Ross R. Scott¹ [collectively Homeowners ], and State of Hawai‘i Land Use Commission (LUC ), appeal from the Circuit Court of the Second Circuit's (circuit court )² January 4, 2017 "Findings of Fact, Conclusions of Law, and Order Vacating [LUC's] Decisions and Orders Entered on March 3, 2016" (Order ) and February 16, 2017 Final Judgment (Judgment ). On appeal, Homeowners and LUC challenge the circuit court's decision vacating LUC's March 3, 2016 Declaratory Order, which ruled as a matter of law that "an overnight campground ... is prohibited by [Hawaii Revised Statutes (HRS )] § 205-4.5(a)(6) and cannot be permitted by a special use permit."

I. Background

Land in Hawai‘i is divided into four use districts - urban, rural, agricultural, and conservation. HRS § 205-2(a) (2001). Agricultural lands are classified from "A" to "E," based on the "soil's general productive capacity," with " ‘A’ denoting the highest level of productivity and ‘E’ the lowest." Neighborhood Bd. No. 24 (Waianae Coast) v. State Land Use Comm'n, 64 Haw. 265, 266 n.2, 639 P.2d 1097, 1099 n.2 (1982). Because lands classified as "A" or "B," i.e. , Prime Lands, are the most suitable for growing crops, they are restricted to certain uses. However, a landowner may apply for a Special Permit to allow "certain unusual and reasonable uses" or may seek a Boundary Amendment to have the land re-classified.

The Ho‘omoana Foundation (Foundation ) has a long-term lease of agricultural class B land, and sought to develop an overnight campground for use by homeless and commercial campers. Homeowners own property adjacent to Foundation's class B Land.

In December 2015, Homeowners petitioned LUC for a Declaratory Order (Petition ) pursuant to HRS § 91-8 (2012) and Hawai‘i Administrative Rules (HAR ) § 15-15-98, to determine whether approval of an overnight camp on class A and B land was obtainable through the Special Permit process or whether a Boundary Amendment was needed.

In February 2016, Foundation filed a "Petition to Intervene and Position Statement" (Intervention Request ), arguing that it could obtain approval to develop its proposed campground through the Special Permit process and need not apply for a Boundary Amendment. The State of Hawai‘i Office of Planning and the Maui Department of Planning also filed position statements agreeing that the proposed campground could be approved through the Special Permit process, and the Maui Department of Planning indicated it was processing Foundation's Special Permit request.

LUC held a public meeting on the Petition, receiving public testimony and argument from Homeowners, the Maui Department of Planning, the Office of Planning, and Foundation. LUC allowed only Homeowners to cross-examine witnesses or rebut arguments.

On March 3, 2016, LUC entered a Declaratory Order granting the Petition (Order Granting Petition ), finding that "the clear prohibition of overnight camps on class A and B rated lands is irreconcilable with the provisions of HRS § 205-6 [(2017)] that permit certain ‘unusual and reasonable uses’ within agricultural districts other than for which the district is classified." To adopt otherwise "would mean that the counties could define away completely any statutory restrictions on agricultural uses" and "results in treating a clear and explicit statutory prohibition as a nullity[.]" LUC concluded that the "only way that overnight camps such as those proposed in the Project can be allowed on the Property is to change its land use classification to one where overnight camps would be permitted." LUC also denied Foundation's Intervention Request as moot.

Foundation appealed, and the circuit court vacated LUC's Order Granting Petition. The circuit court held that the proposed campground could be approved by Special Permit and did not require a Boundary Amendment. In doing so, the circuit court explained that HRS § 205-4.5(a)(6) (Supp. 2015) "did not ‘expressly prohibit’ overnight camps within the agricultural district" and LUC's conclusion to the contrary was incorrect. The circuit court also explained that "uses not expressly permitted in subsection (a) of HRS § 205-4.5 are prohibited unless permitted as provided in HRS § 205-6 (2017), which is the special use permit statute, and HRS § 205-8 which is the non-conforming use statute."³ The circuit court noted that it was persuaded by the Hawai‘i Supreme Court's reasoning in Maha‘ulepu v. Land Use Comm'n, 71 Haw. 332, 790 P.2d 906 (1990), and vacated LUC's Order Granting Petition. The circuit court also reversed the Order Denying Intervention, and remanded the matter to LUC for further proceedings. This appeal followed.

II. Standards of Review

"In a secondary appeal, this court applies the standards of HRS § 91-14(g) [(2012)] to determine whether the circuit court decision was right or wrong." Mauna Kea Anaina Hou v. Bd. of Land & Nat. Res., 136 Hawai‘i 376, 388, 363 P.3d 224, 236 (2015). However, a challenge that "LUC exceeded the scope of their authority under HRS Chapter 205, [ ] raises an issue of statutory interpretation." Maha‘ulepu, 71 Haw. at 335-36, 730 P.2d at 908.

Generally, questions of statutory interpretation are reviewed de novo, "but in the case of ambiguous statutory language, the applicable standard of review regarding an agency's interpretation of its own governing statute requires this court to defer to the agency's expertise and to follow the agency's construction of the statute unless that construction is palpably erroneous." Gillan v. Gov't Emps. Ins. Co., 119 Hawai‘i 109, 114, 194 P.3d 1071, 1076 (2008) (cleaned up and emphasis added).

III. Discussion

The gist of LUC's and Homeowners' appeal is that the circuit court erred in determining that Foundation's overnight camping project may be addressed through a Special Permit rather than a Boundary Amendment. In addition, Homeowners separately argue that the circuit court erred by relying on Maha‘ulepu, and LUC argues that the circuit court erred by determining that Foundation did not waive its Maha‘ulepu argument. Finally, LUC argues that the circuit court erred by reversing the denial of Foundation's motion to intervene.

A. Legal Landscape

1. Hawai‘i Constitution

Our constitution requires that the State "conserve and protect agricultural lands, promote diversified agriculture, increase agricultural self-sufficiency and assure the availability of agriculturally suitable lands" and that the legislature "provide standards and criteria to accomplish" these mandates. Article XI, section 3 of the Hawai‘i State Constitution. "Lands identified by the State as important agricultural lands needed to fulfill the purposes above shall not be reclassified by the State or rezoned by its political subdivisions without meeting the standards and criteria established by the legislature ...." Id.

2. HRS Chapter 205

(a) Purposes

After a close reading of HRS chapter 205, it appears that the legislature enacted a comprehensive scheme to manage land use in Hawai‘i, and to preserve important agricultural land in particular. "In the establishment of the boundaries of agricultural districts, the greatest possible protection shall be given to those lands with a high capacity for intensive cultivation[.]" HRS § 205-2(a)(3). Declaring that "the people of Hawaii have a substantial interest in the health and sustainability of agriculture as an industry in the State[,]" the legislature also affirmed a compelling interest in preserving agricultural lands:

There is a compelling state interest in conserving the State's agricultural land resource base and assuring the long-term availability of agricultural lands for agricultural use to achieve the purposes of:

(1) Conserving and protecting agricultural lands;

(2) Promoting diversified agriculture;

(3) Increasing agricultural self-sufficiency; and

(4) Assuring the availability of agriculturally suitable lands,

pursuant to article XI, section 3, of the Hawaii State Constitution.

HRS § 205-41 (2017).

One important objective in identifying important agricultural lands was to "increase agricultural self-sufficiency for current and future generations." HRS § 205-42(b) (2017). Policies, plans, ordinances, and rules "shall promote the long-term viability of agricultural use of important agricultural lands" and shall "[d]iscourage the fragmentation of important agricultural lands and the conversion of these lands to nonagricultural uses." HRS § 205-43(2) (2017).

(b) Permitted and Prohibited Uses

In subsection (a) of HRS § 205-4.5, the legislature restricted agricultural districts with a "productivity rating class A or B" to 23 permissible uses. HRS § 205-4.5(a). One such permissible use is "[p]ublic and private open area types of recreational uses, including day camps, picnic grounds, parks, and riding stables, but not including dragstrips, airports, drive-in theaters, golf courses, golf driving ranges, country clubs, and overnight camps." HRS § 205-4.5(a)(6) (emphases added).

In subsection (b) of HRS § 205-4.5, the legislature mandated that any use not...