Carmichael v. Bd. of Land & Natural Res.
| Citation | 150 Hawai‘i 547,506 P.3d 211 |
| Decision Date | 03 March 2022 |
| Docket Number | SCWC-16-0000071 |
| Parties | Healoha CARMICHAEL, Lezley Jacintho, and Na Moku Aupuni O Ko‘olau Hui, Petitioners/Plaintiffs-Appellees/Cross-Appellees/Cross-Appellants, v. BOARD OF LAND AND NATURAL RESOURCES, Suzanne Case, in her official capacity as Chairperson of the Board of Land and Natural Resources, the Department of Land and Natural Resources, Respondents/Defendants-Appellees/Cross-Appellees/Cross-Appellants, and Alexander & Baldwin, Inc., East Maui Irrigation Co., Ltd., and Hawaiian Commercial and Sugar Co., Respondents/Defendants-Appellants/Cross-Appellees, and County of Maui, Department of Water Supply, Respondent/Defendant-Appellee/Cross-Appellant/Cross-Appellee. |
| Court | Supreme Court of Hawai'i |
David Kauila Kopper for petitioners Healoha Carmichael, Lezley Jacintho, and Na Moku Aupuni O Ko‘olau Hui
Linda L.W. Chow (William J. Wynhoff, Honolulu, on the briefs) for respondents BLNR, Suzanne Case in her official capacity as Chairman of BLNR, and DLNR
David Schulmeister (Trisha H.S.T. Akagi, Honolulu, on the briefs) for respondents Alexander & Baldwin, Inc. and East Maui Irrigation Co., Ltd.
Caleb P. Rowe (Kristin K. Tarnstrom on the briefs) for respondent County of Maui, Department of Water Supply
Since 1986, the water rights for 33,000 acres of ceded lands in the Ko‘olau Forest Reserve and Hanawi Natural Area Reserve have been governed by four revocable permits issued by Respondent/Defendant-Appellant/Cross-Appellee/Cross-Appellant the Board of Land and Natural Resources ("BLNR") to for-profit corporate entities, Respondents/Defendants-Appellants/Cross-Appellees Alexander & Baldwin, Inc. ("A&B") and East Maui Irrigation Co., Ltd. ("EMI"). In this case, we consider whether BLNR's authorization of these four permits during the past decade to divert more than 100 million gallons of water per day from east Maui streams required an environmental assessment ("EA") pursuant to the Hawai‘i Environmental Policy Act ("HEPA"), Hawai‘i Revised Statutes ("HRS") chapter 343.
Given the significant environmental impact of the permitted action, the BLNR's authority to issue revocable permits is subject to the environmental review requirements of HEPA. The Intermediate Court of Appeals’ ("ICA") July 31, 2019 judgment on appeal pursuant to its June 18, 2019 memorandum opinion is therefore vacated, and this case is remanded to the Circuit Court of the First Circuit ("circuit court") for proceedings consistent with this opinion.
In 1985, the BLNR approved the public-auction sale of a thirty-year water license that would have consolidated four license areas—the Honomanu license area, the Huelo license area, the Ke‘anae license area, and the Nahiku license area (collectively, the "license areas")—spanning approximately 33,000 acres of ceded lands in the Ko‘olau Forest Reserve and Hanawi Natural Area Reserve under a single license.2 However, issuance of the thirty-year license was suspended at the request of the Department of the Attorney General pending the settlement of a separate water case. Water rights for the license areas came to be governed thereafter by annual revocable water permits issued for each fiscal year.
On May 26, 2000, the BLNR approved the issuance of four annual revocable water permits to A&B and EMI,3 effective July 1, 2000 and expiring on June 30, 2001. Each of the permits—S-7263 (Honomanu), S-7264 (Huelo), S-7265 (Ke‘anae), and S-7266 (Nahiku) (collectively, the "revocable permits")—gave the permittee4 the "[r]ight, privilege, and authority for the development, diversion, and use of water" from the relevant license area, "pursuant to the terms and conditions" in the relevant expired general leases. These permits authorized EMI to divert more than 100 million gallons of water per day from east Maui streams for sugar-cane irrigation by Hawaiian Commercial and Sugar Co. ("HC&S"), another subsidiary of A&B, in central Maui. The permits also authorized the delivery of approximately 8.6 million gallons of water per day from east Maui streams to Maui County water treatment facilities that provided the majority of water to a population of approximately 35,000 people in upcountry Maui. Each of the revocable permits stated that they were issued pursuant to HRS § 171-58 (1993).5 The BLNR added, as a condition to the issuance of the revocable permits, that the Department of the Attorney General issue an opinion regarding compliance with HEPA as it related to these leases.6
On May 14, 2001, A&B and EMI filed an application requesting that the BLNR (1) consolidate the four license areas under one thirty-year lease and sell the lease at public auction and (2) authorize "temporary continuation" of the four revocable permits pending issuance of the long-term lease ("proposed long-term lease"). On May 23, 2001, Petitioner/Plaintiff-Appellee/Cross-Appellee/Cross-Appellant Na Moku Aupuni O Ko‘olau Hui ("Na Moku"), a Native Hawaiian non-profit organization, along with three Native Hawaiian individuals, petitioned the BLNR, pursuant to HRS chapter 91, for a contested case hearing on the proposed long-term lease for the license areas. The contested case proceedings—which concerned the same activity as, but do not form the basis for, this appeal—continued for nearly six years. Those proceedings included an appeal to and remand from the circuit court, as well as the publication of several orders containing findings of fact and conclusions of law by the BLNR.
At a May 25, 2001 meeting, the BLNR considered an agenda item titled "Discussion on Long-term Dispositions of Water Licenses and Issuance of Interim Revocable Permits to [A&B] and [EMI] for the [License Areas.]" The administrator of the Land Division of the DLNR recommended that the BLNR authorize the issuance of interim revocable permits to EMI and A&B, and "explained that the long-term disposition process [was] subject to discussion, that there [was] going to be a [HEPA] requirement, and that the applicant [would] be required to prepare the necessary environmental documents." An A&B representative requested that the BLNR also approve the proposed long-term lease it had requested in its May 14 letter to the BLNR. However, a Deputy Attorney General "clarified that the only matter before the [BLNR] for action [was] the issuance of the 4 interim revocable permits" and that the proposed long-term lease was "listed on the agenda for discussion only and [could not] be acted on by the Board at [that] time." A Na Moku representative testified that they would be petitioning for a contested case hearing. The BLNR voted to defer action and instead "grant a holdover permit on a month-to-month basis [to EMI and A&B], pending the results of the contested case hearing" ("2001 holdover decision").
Nearly a year later, at the BLNR's February 22, 2002 meeting, the BLNR indicated that it would review the rental rates for the revocable permits. At the BLNR's May 24, 2002 meeting, upon consideration of an agenda item titled "Re-issuance of Interim Revocable Permits to [A&B] and [EMI] for the [License Areas]" BLNR staff recommended that the BLNR "authorize the re-issuance of permits for the subject waters in the interim and pending the outcome of the contested case." The BLNR Chair stated that the BLNR's intention was "to keep the status quo and that [the revocable permits] w[ere] brought back to the Board because of questions raised about authority to holdover permits beyond a year." The BLNR again voted to "defer and grant a holdover of the existing revocable permit on a month-to-month basis pending the results of the contest [sic] case hearing" ("2002 holdover decision").7
After the BLNR's 2002 holdover decision, the revocable permits were annually "continued" by a process in which the BLNR reviewed and voted to approve for continuation a "master listing" of hundreds of revocable permits submitted by the DLNR.8 This process continued the revocable permits included on the master listing on a month-to-month basis for a one-year period. The DLNR's submissions to the BLNR from 2002 to 2004 cite HRS § 171-55 (1993) as its authority for this annual review process.9 The revocable permits issued to A&B and EMI appeared on the master listings dated November 18, 2005; October 27, 2006; November 16, 2007; October 24, 2008; October 23, 2009; November 12, 2010; January 13, 2012; December 14, 2012; January 10, 2014; and December 12, 2014.10
In response to the BLNR's December 12, 2014 decision approving the continuation of the revocable permits ("2014 continuation decision"), on April 10, 2015, Petitioners/ Plaintiffs-Appellees/Cross-Appellees/Cross-Appellants Healoha Carmichael, Lezley Jacintho, and Na Moku (collectively, "Petitioners") filed a complaint for declaratory and injunctive relief against the BLNR, its interim chair, Carty Chang,12 and the DLNR (collectively, "the State Defendants"); A&B, EMI, and HC&S (collectively, "the A&B Defendants"); and the Maui County Department of Water Supply ("the County") in the circuit court.13 Petitioners alleged in their amended complaint that, under HRS § 343-5 (Supp. 2012),14 the "renewal of [the A&B Defendants’] revocable permit[s]" constituted applicant action proposing the use of State land and, as such, required the preparation of an EA pursuant to HEPA. Thus, Petitioners contended that HEPA was violated (1) when the BLNR failed to order an EA before its 2014 continuation decision, and (2) when A&B and EMI continued to divert water without preparing an EA.15 Petitioners asked the circuit court to declare that HEPA had been violated, void the revocable permits, order the...
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... ... adopted the City Bank rule "for application to ... Land Court properties as well as properties administered ... pursuant to ... at 5-10, 193 P.3d at 843-48; see also Carmichael v. Bd ... of Land & Nat. Res., 150 Hawai'i 547, 560, 506 ... ...