Flint v. Cnty. of Kauai

• Citation: 521 F.Supp.3d 978
• Decision Date: 18 February 2021
• Docket Number: CIV. NO. 19-00521 JMS-WRP
• Court: U.S. District Court — District of Hawaii
• Parties: Susan FLINT and Geoffrey Flint, Plaintiffs, v. COUNTY OF KAUAI, et al., Defendants.

521 F.Supp.3d 978

Susan FLINT and Geoffrey Flint, Plaintiffs,

v.COUNTY OF KAUAI, et al., Defendants.

CIV. NO. 19-00521 JMS-WRP

United States District Court, D. Hawai‘i.

Signed February 18, 2021

Gregory W. Kugle, Joanna C. Zeigler, Damon Key Leong Kupchak Hastert, Honolulu, HI, for Plaintiffs.

David J. Minkin, Kelsey Sachi Yamaguchi, Jesse J.T. Smith, McCorriston Miller Mukai MacKinnon LLP, Honolulu, HI, for Defendants.

ORDER GRANTING DEFENDANT'S MOTION FOR SUMMARY JUDGMENT AND DENYING PLAINTIFFS’ MOTION FOR PARTIAL SUMMARY JUDGMENT

J. Michael Seabright, Chief United States District Judge

I. INTRODUCTION

This case arises out of devastating flooding that occurred on the island of Kauai in 2018. The flooding caused widespread destruction and triggered numerous landslides that damaged the only road into the north shore's Lumahai-Wainiha-Haena area, wholly isolating communities there. In response, the County of Kauai ("County") enacted an Emergency Rule temporarily limiting access to the area to residents and emergency workers until the road could be repaired and normal travel could safely resume. The Rule remained in effect for slightly less than one year.

Plaintiffs Susan and Geoffrey Flint ("Plaintiffs") owned a property in the Lumahai-Wainiha-Haena area, which they used as a transient vacation rental ("TVR"). They were unable to rent the property to vacationers while the rule was in effect. Plaintiffs allege that this temporary prohibition on vacation rentals violated the United States and Hawaii Constitutions by (1) effecting a taking of their property without just compensation; (2) depriving them of their right to substantive and procedural due process; and (3) denying them equal protection of the laws. Plaintiffs also allege that the Rule (4) violated the Contract Clause of the United States Constitution; (5) violated Hawaii Revised Statutes ("HRS") Chapter 127A-21's prohibition on requisition of property without just compensation; and (6) that the County was equitably estopped from interfering with their vested right to use their property as a TVR. ECF No. 1 at PageID ## 10-18.

The County now moves for summary judgment as to each claim and Plaintiffs moves for summary judgment as to the takings, due process, and Contract Clause claims. ECF Nos. 27 & 29. For the reasons set forth below, the County's Motion is GRANTED and Plaintiff's Motion is DENIED.

II. BACKGROUND

From April 13 to 16, 2018, the island of Kauai was subject to heavy rains and devastating flooding. ECF No. 28-15 at PageID # 200. Across the island, flood waters entered buildings, washed homes off their foundations, triggered landslides and sinkholes, and caused widespread electrical and water system disruptions. Id. at PageID ## 201-02. Most severely impacted was the Lumahai-Wainiha-Haena area on Kauai's north shore (the "distressed area"). Id. at PageID # 202; ECF No. 39 at PageID # 474. The flooding triggered more than a dozen landslides along Kuhio Highway—the only road into the distressed area—rendering the highway impassible and completely isolating the communities living there. ECF No. 28-15 at PageID # 202. Because there are no first-responder services located in the distressed area, these isolated communities were left without medical supplies or assistance beyond what was available in their own homes and in lifeguard towers. Id. at PageID # 203.

On April 14, 2018, the mayor of Kauai proclaimed a state of emergency and assumed emergency powers pursuant to HRS Chapter 127 in order to "provide relief for disaster damages, losses, and suffering, and to protect the health, safety, and welfare of the people." ECF No. 28-9 at PageID # 184. More than 400 tourists were airlifted out of the distressed area by the U.S. Army and the Hawaii National Guard and more than 43,000 pounds of food, water, and clothing were delivered by the U.S. Army to trapped residents. ECF No. 28-15 at PageID # 203. The County considered completely evacuating the distressed area but determined that relocating all residents from their homes and housing them for a prolonged period would not be economically or logistically feasible. ECF No. 28-2 at PageID # 167. Thus, the County moved forward with disaster relief with the "primary objective" of "[k]eeping residents in [their] homes while balancing access for employment." Id.

Pursuant to the emergency proclamation, the mayor issued "Mayor's Emergency Rule # 1" ("Emergency Rule"), effective May 4, 2018 through March 4, 2019. ECF 28-10 at PageID # 190. The Rule imposed a "prohibition on the operation of Transient Vacation Rentals (TVRs) in the area" and limited access to the distressed area to "[r]esidents (no visitors)" and emergency responders. Id. The purpose of the Emergency Rule was to ensure the safe and efficient repair of Kuhio Highway. ECF No. 28-17 at PageID # 209; ECF No. 28-2 at PageID # 168. Landslides had caused structural damage to the road that required more than "twenty-two major [repair] tasks[,] including the stabilization of the slope at Wainiha Bay and the rebuilding of sections where the embankment below the road was washed away in the disaster" before it would be safe for normal traffic to resume. ECF No. 28-16 at PageID # 206. The prohibition on vacationers and other visitors entering the distressed area was intended to reduce the number of travelers on Kuhio Highway while repairs were ongoing, thereby protecting construction workers and residents who had no choice but to use the unstable road, as well as to reduce wear and tear on the road while critical repairs were ongoing. See ECF No. 28-17 at PageID # 209; ECF No. 28-2 at PageID # 168. Because Kuhio Highway is the only road into the distressed area and emergency response resources in the area were virtually non-existent, the Rule also aimed to "maintain a low number of individuals at risk in the affected area that may have required emergency assistance." ECF No. 28-2 at PageID # 168.

On July 11, 2018, the mayor announced his intention to extend the Emergency Rule "until the roadwork repairs on Kuhio Highway, from Waikoko to Wainiha, are completed and the highway is deemed safe for normal travel." ECF No. 28-18 at PageID # 211. The Rule was ultimately extended from its original effective end date of March 4, 2019 until April 29, 2019. ECF No. 29-1 at PageID # 297; ECF No. 27-1 at PageID # 132. On that date, the prohibition on TVRs was lifted and visitors with verified reservations to stay at a TVR were allowed entry into the area. ECF No. 28-11 at PageID # 191. All told, the prohibition on TVR operations lasted just under a year, from May 4, 2018 to April 29, 2019.

In recognition of the economic hardships facing TVR operators while the Rule was in effect, the County taxed their properties at the residential rate rather than the higher TVR rate for the 2019 tax year. ECF No. 28-4 at PageID # 174. In addition, TVR operators were not required to comply with permitting requirements to maintain their TVR licenses for the year following the expiry of the Emergency Rule.¹ ECF No. 28-13 at PageID # 197.

Plaintiffs are a married couple living in California. ECF No. 30-2 at PageID # 324. On January 17, 2017, they purchased a property in the Lumahai-Wainiha-Haena area for $926,000. ECF No. 28-4 at PageID # 175; ECF No. 30-3 at PageID # 361. The property had a valid nonconforming use TVR license and Plaintiffs intended to "rent [the property] as a TVR, use it for personal use when [they] visited Kauai, and as a long-term investment." ECF No. 30-2 at PageID # 324-25. In March 2017, Plaintiffs purchased an adjacent parcel of land for $371,000. ECF No. 28-5 at PageID # 177; ECF No. 27-1 at PageID # 131. Plaintiffs renewed the TVR license for their property for the year 2018, ECF No. 29-1 at PageID # 294, and rented it out to vacationers until the Emergency Rule came into effect. See ECF No. 30-2 at PageID # 327. Plaintiffs were required to cancel rental reservations as a result of the prohibition on TVR operations and "lost significant rental income." Id. On February 6, 2019, Plaintiffs sold their TVR property for $920,000—$6,000 less than they had paid for it. See ECF No. 28-4 at PageID # 175. In the same transaction, Plaintiffs also sold their adjacent property for $500,000—$129,000 more than they had paid for it. See ECF No. 28-5 at PageID # 177.

On September 26, 2019, Plaintiffs brought suit against the County advancing a variety of federal and state constitutional claims, as well as state statutory and common law claims. See generally ECF No. 1. On October 14, 2020, the County moved for summary judgment on all counts, ECF No. 27. The same day, Plaintiffs filed a cross-motion for summary judgment as to their takings claim, substantive and procedural due process claims, and Contract Clause claim. ECF No. 29-1 at PageID ## 292-93. On December 30, 2020, both parties filed oppositions, ECF Nos. 36 & 39, and on January 6, 2021, both parties filed replies, ECF Nos. 41 & 43. A hearing was conducted by video teleconference on January 20, 2021, ECF No. 49.

III. LEGAL STANDARD

Summary judgment is proper where there is no genuine issue of material fact and the moving party is entitled to judgment as a matter of law. Fed. R. Civ. P. 56(a). Rule 56(a) mandates summary judgment "against a party who fails to make a showing sufficient to establish the existence of an element essential to that party's case, and on which that party will bear the burden of proof at trial." Celotex Corp. v. Catrett , 477 U.S. 317, 322, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986) ; see also Broussard v. Univ. of Cal. at Berkeley , 192 F.3d 1252, 1258 (9th Cir. 1999).

"A party seeking summary judgment bears the initial burden of informing the court of the basis for its motion and of identifying those portions of the pleadings and discovery responses that demonstrate the absence of a genuine issue of material fact." Soremekun v. Thrifty Payless, Inc. , 509 F.3d 978, 984 (9th Cir. 2007) (citing Celotex , 477 U.S....