Bridge Aina Le'a, LLC v. State, CIVIL NO. 11–00414 SOM/BMK

• Decision Date: 25 August 2015
• Docket Number: CIVIL NO. 11–00414 SOM/BMK
• Parties: Bridge Aina Le'a, LLC, Plaintiff, v. State of Hawaii Land Use Commission; Vladimir P. Devens; Kyle Chock; Thomas Contrades; Lisa M. Judge ; Normand R. Lezy; Nicholas W. Teves; Ronald I. Heller; Edmund Aczon, in his official capacity; Chad McDonald, in his official capacity; Jonathan Scheuer, in his official capacity; Kent Hiranaga, in his official capacity; Brandon Ahakuelo, in his official capacity; Neil Clendeninn, in his official capacity; Aaron Mahi, in his official capacity; Sandra Song, in her official capacity; Arnold Wong, in his official capacity; John Does 1-10; Jane Does 1-10; Doe Partnerships 1-10; Doe Corporations 1-10; Doe Entities 2-10 and Doe, Defendants.
• Court: U.S. District Court — District of Hawaii

125 F.Supp.3d 1051

Bridge Aina Le'a, LLC, Plaintiff,

v.State of Hawaii Land Use Commission; Vladimir P. Devens; Kyle Chock; Thomas Contrades; Lisa M. Judge ; Normand R. Lezy; Nicholas W. Teves; Ronald I. Heller; Edmund Aczon, in his official capacity; Chad McDonald, in his official capacity; Jonathan Scheuer, in his official capacity; Kent Hiranaga, in his official capacity; Brandon Ahakuelo, in his official capacity; Neil Clendeninn, in his official capacity; Aaron Mahi, in his official capacity; Sandra Song, in her official capacity; Arnold Wong, in his official capacity; John Does 1-10; Jane Does 1-10; Doe Partnerships 1-10; Doe Corporations 1-10; Doe Entities 2-10 and Doe, Defendants.

CIVIL NO. 11–00414 SOM/BMK

United States District Court, D. Hawai'i.

Signed August 25, 2015

Bruce D. Voss, Matthew C. Shannon, Michael C. Carroll, Bays Deaver Lung Rose & Holma, Honolulu, HI, for Plaintiff.

E. Diane Erickson, William J. Wynhoff, Office of the Attorney General, Honolulu, HI, for Defendant.

ORDER GRANTING REVISED MOTION TO DISMISS

Susan Oki Mollway, Chief United States District Judge

I. INTRODUCTION.

This case arises out of a decision by Defendant State of Hawaii Land Use Commission (the "Commission") to reclassify a parcel of land from urban use to agricultural use. Plaintiff Bridge Aina Le'a, LLC ("Bridge"), the owner of the parcel, claims that, in reclassifying the land, the Commission and certain commissioners violated Bridge's rights under the United States Constitution, the Hawaii constitution, and various Hawaii laws. The Hawaii Supreme Court has upheld the state trial court's invalidation of the Commission's reclassification ruling.

Defendants Vladimir P. Devens, Kyle Chock, Thomas Contrades, Lisa M. Judge, Normand R. Lezy, Nicholas W. Teves, and Ronald I. Heller (collectively, "Individual Capacity Commissioners"), sued in their individual capacities, were commissioners at the time of the events underlying Bridge's suit. The former commissioners have been removed from this case as Official Capacity Commissioners, and the current commissioners—Edmund Aczon, Chad McDonald, Jonathan Scheuer, Kent Hiranaga, Linda Estes, Aaron Mahi, Nancy Cabral, and Arnold Wong—have been substituted as Defendants in their official capacities pursuant to Rule 25(d) of the Federal Rules of Civil Procedure.¹

On March 30, 2012, this court stayed the entirety of the present action pending resolution of Bridge's administrative appeal of the Commission's decision in state court. Defendants appealed the stay, and Bridge filed a cross-appeal challenging this court's denial of its motion seeking a remand of all or part of this removed action to state court. After the Hawaii Supreme Court affirmed the state trial court in the administrative appeal, the Ninth Circuit ruled, "While this case originally met Pullman's requirements, abstention is no longer necessary." ECF 64, PageID # 662. The stay was dissolved, and the case is back on remand before this court, which now considers the merits of Defendants' motion to dismiss. The motion is granted in all respects now being moved on by Defendants.

II. BACKGROUND.

A. Factual Background.

The subject parcel of land consists of 1,060 acres in South Kohala, on the island of Hawaii. See ECF No. 1–2, PageID # 15. On November 25, 1987, Signal Puako Corporation, the then-owner of the parcel, petitioned for reclassification of the land from "agricultural use" to "urban use" to allow development of a large residential community. See id. On January 17, 1989, the Commission issued its Findings of Fact, Conclusions of Law, and Decision and Order approving the petition on condition that 60 percent of the units built be "affordable" units. See id. at PageID # 16.

On May 4, 1990, Signal Puako Corporation transferred the property to Puako Hawaii Properties ("PHP"). See id. at PageID # 16.

On April 1, 1991, PHP filed a motion to amend the 1989 Decision and Order, seeking to decrease the total number of units in the project. See id. at PageID # 17. On July 9, 1991, the Commission issued its Amended Findings of Fact, Conclusions of Law, and Decision and Order, which permitted a decrease in the project's density. See id. The 1991 Decision and Order also amended the affordable housing condition by requiring a minimum of 1,000 affordable units, in addition to the earlier 60 percent requirement. See id.

By September 1, 2005, Bridge had become the owner of the property. On that date, Bridge filed a motion to amend certain conditions imposed by the 1991 Decision and Order so that the affordable housing conditions would be "consistent and coincide with County of Hawaii affordable housing requirements." See id at PageID # 20.

On November 25, 2005, the Commission entered its Findings of Fact, Conclusions of Law, and Decision and Order granting in part and denying in part Bridge's motion. See id. at PageID # 21. The Commission stated:

Petitioner shall provide housing opportunities for low, low-moderate, and moderate income residents of the State of Hawaii by offering at least twenty percent (20%) of the Project's residential units at prices determined to be affordable by the County of Hawaii Office of Housing and Community Development, provided, however, in no event shall the gross number of affordable housing units within the Petition Area be less than 385 units. The affordable housing units shall meet or exceed all applicable County of Hawaii affordable housing standards, and shall be completed in substantial compliance with the representations made to the Commission.

See id. at PageID # s 21–22. The Commission also required Bridge to "obtain, and provide copies to the Commission [of] the certificates of occupancy for all of the Project's affordable housing units within five (5) years of November 17, 2005."Id. at PageID # 22.

On December 9, 2008, the Commission issued an order to show cause as to why the property should not revert to its former agricultural classification given Bridge's alleged failure to perform in accordance with the conditions imposed by the Commission and the representations and commitments made to the Commission. See id. at PageID # 24.

On March 20, 2009, Bridge notified the Commission that it intended to assign its interest in the project to DW Aina Le'a Development, LLC ("DW"). See id. at PageID # s 26, 27.

At the end of a hearing on April 30, 2009, the Commission voted unanimously to return the property to agricultural use. See id. at PageID # 27.

On August 19, 2009, Bridge moved for rescission of the Commission's ruling returning the land to agricultural use. Bridge argued that reversion of the land was improper because Bridge had made "substantial commencement of the use of the land" in accordance with section 205–4(g) of Hawaii Revised Statutes. See id. at PageID # 28. On September 28, 2009, the Commission rescinded its order to show cause but imposed a condition that sixteen affordable units be completed by March 31, 2010. See id. at PageID # 29. The Commission also permitted DW to be named as a co-petitioner with Bridge. See id. at PageID # 30.

Bridge alleges that sixteen affordable units were completed by March 31, 2010, as the Commission required. See id. at PageID # 30. The Commission, however, determined by vote that Bridge and DW had not completed the sixteen units by March 31, 2010. See id. at PageID # 33. The Commission also voted to keep in place the earlier order to show cause, to have a further hearing on the matter, and to affirm that the date of November 17, 2010, was the deadline by which 385 affordable units had to be built, not just a goal. See id. The Commission issued a written order to that effect on July 26, 2010. See id. at PageID # 34.

On August 30, 2010, DW moved to amend certain conditions imposed by the Commission. See id. at PageID # 35. Bridge later filed a motion alleging violations of various statutes and administrative rules by the Commission, which Bridge contended rendered action by the Commission invalid. See id.

At a hearing on January 20, 2011, the Commission, by a 5–3 vote, decided to return the property to agricultural use. See id. at 37. The Commission also voted to deny as moot Bridge's motion seeking invalidation of earlier action by the Committee. See id. at 38. The Commission did not at that time rule on DW's motion to amend.

On April 25, 2011, the Commission entered a written order returning the property to agricultural use. See id. at PageID # 44.

On May 13, 2011, the Commission denied DW's motion to amend. See id. at PageID # 45.

B. Procedural Background.

Bridge filed two actions challenging the Commission's decision to reclassify the land to agricultural use. Bridge not only sought judicial review of the Commission's decision through an administrative appeal, Bridge also filed a separate action in state court. See ECF No. 1–2. It is that separate action that was removed to this court on June 27, 2011. See ECF No. 1.

Bridge's Complaint in this action asserts the following claims: (1) denial of due process of law in violation of the federal and state constitutions (Count I); (2) inverse condemnation in violation of the federal and state constitutions (Count II); (3) denial of equal protection of the law under the federal and state constitutions (Count III); (4) deprivation of common law vested rights (Count IV); (5) equitable estoppel (Count V); (6) deprivation of constitutional rights under 42 U.S.C. § 1983 (Count VI); (7) violation of chapters 91, 92, and 205 of Hawaii Revised Statutes and chapter 15–15 of Hawaii Administrative Rules (Count VII); (8) unconstitutional land development conditions in violation of the federal and state constitutions (Count VIII); (9) injunctive and declaratory relief (Count IX); (10) declaratory relief pursuant to section 632–1 of Hawaii Revised Statutes and Rule 57 of the Hawaii Rules of Civil Procedure (Count X); and (11) attorneys' fees and costs pursuant to 42 U.S.C. § 1988 (Count XI). See id.

On July 27, 2011, Defendants filed a motion...