Arakaki v. Cayetano, Civil No. 02-00139 SOM/KSC.

• Citation: 299 F.Supp.2d 1090
• Decision Date: 08 May 2002
• Docket Number: Civil No. 02-00139 SOM/KSC.
• Parties: Earl F. ARAKAKI, et al., Plaintiffs, v. Benjamin J. CAYETANO in his official capacity as Governor of the State of Hawaii, et al., Defendants.
• Court: U.S. District Court — District of Hawaii

299 F.Supp.2d 1090

Earl F. ARAKAKI, et al., Plaintiffs, v. Benjamin J. CAYETANO in his official capacity as Governor of the State of Hawaii, et al., Defendants.

Civil No. 02-00139 SOM/KSC.

United States District Court, D. Hawai`i.

May 8, 2002.

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H. William Burgess, argued, Patrick W. Hanifin, argued, Im Hanifin Parsons, LLLC, Honolulu, HI, for Plaintiffs.

Gerard D. Lau, argued, State of Hawaii, Attorney General, Honolulu, HI, for Benjamin Cayetano, State Officials, Hawaiian Homes Commissioners.

Sherry P. Broder, argued, Honolulu, HI, for Trustees of the Office of Hawaiian Affairs.

Robert G. Klein, argued, McCorriston Miller Mukai MacKinnon, Honolulu, HI, for Defendant-Intervenor SCHHA.

ORDER GRANTING IN PART AND DENYING IN PART MOTIONS TO DISMISS ON STANDING GROUNDS; ORDER DENYING MOTION TO DISMISS (OR RECONSIDER PRIOR ORDER FINDING TAXPAYER STANDING) ON POLITICAL QUESTION GROUNDS

MOLLWAY, District Judge.

I. INTRODUCTION.

Plaintiffs, some of whom are of Hawaiian ancestry, seek to stop Defendants' provision of benefits to only persons of Hawaiian or native Hawaiian ancestry.¹ Plaintiffs identify themselves as individual taxpayers in Hawaii and beneficiaries of a public land trust.

Defendants have moved in three separate motions to dismiss this case. Defendants State of Hawaii ("State" or "Hawaii"), the Hawaiian Homes Commission ("HHC"), and the Department of Hawaiian Home Lands ("DHHL") have moved to dismiss based on an alleged lack of standing.² Defendant Office of Hawaiian Affairs ("OHA") has also moved to dismiss this action based on an alleged lack of standing. OHA additionally argues that this case should be dismissed (or alternatively that the court should reconsider its previous standing determination) because the case allegedly involves a nonjusticiable political question.

This court is bound by the Ninth Circuit's decision in Hoohuli v. Ariyoshi, 741 F.2d 1169 (9th Cir.1984). Applying Hoohuli, the court concludes that Plaintiffs have taxpayer standing to assert their Equal Protection claims. To the extent Plaintiffs assert claims that are not premised on actual expenditures of tax funds, however, those claims are dismissed.

Plaintiffs lack standing to assert claims as alleged beneficiaries of a public land trust created by the Admissions Act in 1959. Accordingly, the court dismisses Plaintiffs' breach of public land trust claims.

Because OHA has not here demonstrated that the claims against it should be dismissed as involving a nonjusticiable political question, the court denies OHA's motion to dismiss on that ground and declines to reconsider the court's previous denial of a request for a temporary restraining order.

II. FACTUAL BACKGROUND.

The factual background was set forth in this court's previous Order Denying Plaintiffs' Motion for Temporary Restraining Order. Arakaki v. Cayetano, 2002 WL 654084 (D.Haw., March 18, 2002).³ That factual background is incorporated by reference.

III. STANDARD OF REVIEW.

A motion to dismiss for lack of subject matter jurisdiction under Rule 12(b)(1) may either attack the allegations of the complaint as insufficient to confer subject matter jurisdiction on the court, or attack the existence of subject matter jurisdiction in fact. Thornhill Publ'g Co. v. General Tel. & Elecs. Corp., 594 F.2d 730, 733 (9th Cir.1979). When the motion to dismiss attacks the allegations of the complaint as insufficient to confer subject matter jurisdiction, all allegations of material fact are taken as true and construed in the light most favorable to the nonmoving party. Federation of African Amer. Contractors v. City of Oakland, 96 F.3d 1204, 1207 (9th Cir.1996). When the motion to dismiss is a factual attack on subject matter jurisdiction, however, no presumptive truthfulness attaches to the plaintiff's allegations, and the existence of disputed material facts will not preclude the trial court from evaluating for itself the existence of subject matter jurisdiction in fact. Thornhill, 594 F.2d at 733. The present motions involve both facial and factual attacks.

Plaintiffs have the burden of proving that jurisdiction does in fact exist. Thornhill, 594 F.2d at 733. Conclusory allegations of law and unwarranted inferences are insufficient to defeat a motion to dismiss. In re Syntex Corp. Securities Lit., 95 F.3d 922, 926 (9th Cir.1996).

IV. ANALYSIS.

A. Plaintiffs Have Standing to Assert Some of Their Equal Protection Claims.

As the court noted in denying Plaintiffs' earlier motion for a TRO, Plaintiffs are claiming that the provision of benefits exclusively to Hawaiians and/or native Hawaiians by OHA, HHC, and DHHL violates the Equal Protection Clause of the Fourteenth Amendment. Defendants now move to dismiss these claims based on an alleged lack of standing.

1. Plaintiffs Have State Taxpayer Standing.

Article III, section 2, of the Constitution confines federal courts to deciding cases or controversies. A plaintiff in a federal case must show that an actual controversy exists at all stages of the case. Arizonans for Official English v. Arizona, 520 U.S. 43, 63, 117 S.Ct. 1055, 137 L.Ed.2d 170 (1997). No case or controversy exists if a plaintiff lacks standing to make the claims asserted. See White v. Lee, 227 F.3d 1214, 1242 (9th Cir.2000) (stating that standing pertains to a federal court's subject matter jurisdiction).

Plaintiffs must demonstrate: 1) an injury in fact — an invasion of a legally protected interest that is concrete and particularized, as well as actual or imminent, not conjectural or hypothetical; 2) a causal relationship between the injury and the challenged conduct — an injury that is fairly traceable to the challenged action of the defendant, and not the result of the independent action of some third party not before the court; and 3) a likelihood, not mere speculation, that the injury will be redressed by a favorable decision. See Lujan v. Defenders of Wildlife, 504 U.S. 555, 560-61, 112 S.Ct. 2130, 119 L.Ed.2d 351 (1992); San Diego County Gun Rights Comm. v. Reno, 98 F.3d 1121, 1126 (9th Cir.1996).

Plaintiffs argue that they have been injured as Hawaii taxpayers. They claim to have state taxpayer standing to bring Equal Protection claims.⁴ Historically, taxpayers of a municipality were allowed to maintain an action against a city to enjoin the illegal use of the municipality's money. See Frothingham v. Mellon, 262 U.S. 447, 486, 43 S.Ct. 597, 67 L.Ed. 1078 (1923). Frothingham noted that municipal taxpayers were allowed to maintain these suits because their interests in the expenditure of municipal funds was "direct and immediate." Id. The Court has treated federal taxpayers differently.

The interests of federal taxpayers in moneys of the United States treasury "is shared with millions of others" and "is comparatively minute and indeterminable." Id. at 487, 43 S.Ct. 597. As the expenditure of federal tax funds is more of a "public" than an "individual" concern, Frothingham concluded that, absent a "direct injury suffered or threatened," no case based on federal taxpayer standing may be maintained. Id. at 487-88, 43 S.Ct. 597. It is not enough that a federal taxpayer "suffers in some indefinite way in common with people generally." Id. at 488, 43 S.Ct. 597.

In Flast v. Cohen, 392 U.S. 83, 92, 88 S.Ct. 1942, 20 L.Ed.2d 947 (1968), the court noted that Frothingham had been "the source of some confusion." Flast attempted to end that confusion. Under Flast, whether an individual has federal taxpayer standing to maintain an action turns on whether the plaintiff "can demonstrate the necessary stake as taxpayers in the outcome of the litigation to satisfy Article III requirements." Id. Flast stated:

The nexus demanded of federal taxpayers has two aspects to it. First, the taxpayer must establish a logical link between that status and the type of legislative enactment attacked. Thus, a taxpayer will be a proper party to allege the unconstitutionality only of exercises of congressional power under the taxing and spending clause of Art. I, § 8, of the Constitution. It will not be sufficient to allege an incidental expenditure of tax funds in the administration of an essentially regulatory statute.... Secondly, the taxpayer must establish a nexus between that status and the precise nature of the constitutional infringement alleged. Under this requirement, the taxpayer must show that the challenged enactment exceeds specific constitutional limitations imposed upon the exercise of the congressional taxing and spending power and not simply that the enactment is generally beyond the powers delegated to Congress by Art. I, § 8. When both nexuses are established, the litigant will have shown a taxpayer's stake in the outcome of the controversy and will be a proper and appropriate party to invoke a federal court's jurisdiction.

Flast, 392 U.S. at 102-03, 88 S.Ct. 1942.

Flast stated that the Establishment Clause of the First Amendment specifically limits the taxing and spending power of Congress.⁵ Id. at 105, 88 S.Ct. 1942. Accordingly, taxpayers asserting violations of the Establishment Clause satisfy the second prong of Flast's test.

The Court subsequently recognized that Flast created a "narrow exception" to the general rule against taxpayer standing established in Frothingham. See Bowen v. Kendrick, 487 U.S. 589, 618, 108 S.Ct. 2562, 101 L.Ed.2d 520 (1988). Some courts have gone further, interpreting Flast as applying "only to cases in which a federal taxpayer challenges a congressional appropriation ... that allegedly violates the Establishment Clause." See, e.g., Colorado Taxpayers Union, Inc. v. Romer, 963 F.2d 1394, 1399 (10th Cir.1992), cert. denied, 507 U.S. 949, 113 S.Ct. 1360, 122 L.Ed.2d 739 (1993).

This case is not premised on either municipal taxpayer or federal taxpayer standing. Instead, it is based on state taxpayer standing, which the Ninth Circuit treats more like municipal...