Iii v. Hawaiian Homes Comm'n

• Decision Date: 12 January 2011
• Docket Number: No. 30110.,30110.
• Parties: Richard NELSON III; Kaliko Chun; James Akiona, Sr.; Sherilyn Adams; Kelii Ioane, Jr.; and Charles Aipia, Plaintiffs–Appellants,v.HAWAIIAN HOMES COMMISSION; The Department of Hawaiian Home Lands; Kaulana H.R. Park,1 in his official capacity as Chair of the Hawaiian Homes Commission; Perry Artates, Alapaki Nahale-a, Donald S.M. Chang, Stuart Hanchett, Malia Kamaka, Francis Lum, Trish Morikawa, and Henry K. Tancayo, 2 in their official capacities as members of the Hawaiian Homes Commission; Kalbert K. Young,3 in his official capacity as the State Director of Finance; and The State of Hawaii, Defendants–Appellees.
• Court: Hawaii Court of Appeals

124 Hawai'i 437

246 P.3d 369

Richard NELSON III; Kaliko Chun; James Akiona, Sr.; Sherilyn Adams; Kelii Ioane, Jr.; and Charles Aipia, Plaintiffs–Appellants,

v.HAWAIIAN HOMES COMMISSION; The Department of Hawaiian Home Lands; Kaulana H.R. Park,1 in his official capacity as Chair of the Hawaiian Homes Commission; Perry Artates, Alapaki Nahale-a, Donald S.M. Chang, Stuart Hanchett, Malia Kamaka, Francis Lum, Trish Morikawa, and Henry K. Tancayo, 2 in their official capacities as members of the Hawaiian Homes Commission; Kalbert K. Young,3 in his official capacity as the State Director of Finance; and The State of Hawaii, Defendants–Appellees.

No. 30110.

Intermediate Court of Appeals of Hawai‘i.

Jan. 12, 2011.

David Kimo Frankel (Alan T. Murakami with him on the briefs) (Native Hawaiian Legal Corporation), for Plaintiffs–Appellants.Girard D. Lau, First Deputy Solicitor General (Charleen M. Aina, Deputy Attorney General, with him on the brief), for Defendants–Appellees State of Hawai‘i and Kalbert K. Young, in his official capacity as the State Director of Finance.Brian A. Kang (Emi L.M. Kaimuloa with him on the brief) (Watanabe Ing LLP), for Defendants–Appellees Hawaiian Homes Commission, The Department of Hawaiian Home Lands; Kaulana H.R. Park, in his official capacity as Chair of the Hawaiian Homes Commission; Perry Artates, Alapaki Nahale-a, Donald S.M. Chang, Stuart Hanchett, Malia Kamaka, Francis Lum, Trish Morikawa, and Henry K. Tancayo, in their official capacities as members of the Hawaiian Homes Commission.FOLEY and FUJISE, JJ.; NAKAMURA, C.J., concurring separately.Opinion of the Court by FOLEY, J.

Plaintiffs–Appellants Richard Nelson III; Kaliko Chun; James Akiona, Sr.; Sherilyn Adams; Kelii Ioane, Jr.; and Charles Aipia⁴ (Plaintiffs) appeal from the Final Judgment filed on September 23, 2009 in the Circuit Court of the First Circuit ⁵ (circuit court).

I.

Plaintiffs sought declaratory and injunctive relief in the circuit court, claiming that (1) Defendants–Appellees Hawaiian Homes Commission; The Department of Hawaiian Home Lands (DHHL); Micah A. Kane, in his official capacity as Chair of the Hawaiian Homes Commission (Chair); Perry Artates, Billie Baclig, Donald S.M. Chang, Stuart Hanchett, Malia Kamaka, Francis Lum, Trish Morikawa, and Milton Pa, in their official capacities as members of the Hawaiian Homes Commission (the Chair and the members are collectively referred to as commissioners); Georgina K. Kawamura, in her official capacity as the State Director of Finance; and the State of Hawaii (the State) (collectively, Defendants) were obligated by Article XII (Hawaiian Homes Commission Act, 1920 (HHCA)), Sections 1 and 2 of the Constitution of the State of Hawaii (Hawai‘i Constitution) to provide particular levels of funding to the DHHL and (2) the State failed in the past to provide sufficient funds to DHHL.

In their October 19, 2007 First Amended Complaint for Declaratory and Injunctive Relief, Plaintiffs alleged, in relevant part:

FACTUAL ALLEGATIONS

23. As of May 1983, there were 7,901 eligible beneficiaries on the waiting lists for Hawaiian homesteads.

24. There are currently over 20,000 people on the Hawaiian Home Lands waitlist.

25. Hundreds of native Hawaiians have been on the [DHHL's] waiting list for over three decades.

26. Until 1987, the State failed to appropriate a single dollar of general fund revenues, generated from its various general and special tax revenue sources, to pay for the operations and programs of the [DHHL] and its homesteading programs.

27. In 1987, the State [L]egislature [ (the Legislature) ], for the first time, appropriated general funds from state revenues to the operating budget of the [DHHL].

28. General revenue appropriations for the [DHHL] peaked at over $4.2 million per year in fiscal year 1992.

29. In 1994, the Legislature enacted Act 14 to compensate the [DHHL] for breaches of the [HCCA] trust committed by the [S]tate between 1959 and 1988 that deprived the trust of assets and income improperly.

30. Act 14 (SLH 1994, Special Sess.) authorized the payment of $30 million per year for 20 years to compensate the trust for these trust breaches, provided that this sum not count toward the current fiscal obligations of the State to the [HCCA] trust.

31. During her 2002 election campaign Governor Linda Lingle pledged to eliminate the [DHHL] waiting list in 5 years.

32. In 2007 the [Legislature] appropriated less than $1.5 million in general revenue appropriations to the [DHHL].

33. Since 1987, the Legislature appropriated annual general revenue funds for the administration and operating budgets of the [DHHL] without regard to whether

[124 Hawai'i 440 , 246 P.3d 372]

the funding reflected the amounts actually needed by the department to fully implement and administer all programs to assure that the spirit of the [HHCA] was effectively carried out.

34. Between 1989 through 2007, the [S]tate's general fund appropriation to the [DHHL] for its administration and operating budget never exceeded 0.5% of the total general fund budget for any given fiscal year.

35. Simultaneously, since 1979, the Legislature appropriated major general fund revenues for other purposes which were not mandated by the Hawai‘i Constitution and for items of no constitutional priority.

36. Over the past decade, state funding for the Hawaii Tourism Authority, which is not constitutionally mandated, has increased from zero to over eighty seven million dollars a year, increasing by $22 million in the past fiscal year alone.

37. Over the past four fiscal years, the [DHHL] has awarded an average of fewer than six hundred leases to native Hawaiians annually.

38. The length of the Hawaiian Homes waiting list has remained virtually unchanged since 2002.

....

COUNT 1

(Violation of the Constitutional Duty to Sufficiently Fund the [DHHL] )

....

61. In 1979, the voters of Hawai‘i ratified an amendment passed by the 1978 Hawai‘i Constitutional Convention delegates which specifically required the Legislature to provide the [DHHL] “sufficient sums” to pay for its trust programs and operating budget.

62. Under [Hawai‘i Constitution] Article XII, [Section] 1, the [L] egislature must make sufficient sums available for the following purposes: (1) development of home, agriculture, farm and ranch lots; (2) home, agriculture, aquaculture, farm and ranch loans; (3) rehabilitation projects to include, but not limited to, educational, economic, political, social and cultural processes by which the general welfare and conditions of native Hawaiians are thereby improved; (4) the administration and operating budget of the [DHHL]; in furtherance of (1), (2), (3) and (4) herein, by appropriating the same in the manner provided by law.

63. Furthermore, under the [HHCA] [Section] 219.1, the Defendants are obligated to assist the lessees in obtaining maximum use of their leased lands, including taking any steps necessary to develop these lands for their highest and best use commensurate with the purposes for which the land is being leased, and assisting the lessees in all phases of farming, ranching, and aquaculture operations and the marketing of their agricultural or aquacultural produce and livestock.

64. Hawaiian homestead beneficiaries cannot achieve the lofty aims of the [HHCA] unless they are awarded homesteads timely and provided sufficient assistance to maximize their utilization of those lands for the purposes set out in the [HHCA].

65. Payments made pursuant to Act 14, 1995 Special Session, do not diminish funds that the [DHHL] is entitled to pursuant to Article XII, [S]ection 1 of the [Hawai‘i Constitution].

66. Accordingly, the compensation for past breaches of trust by the State under Act 14 is exclusive of the “sufficient sums” to which the DHHL is entitled pursuant to Article XII, [S]ection 1 of the [Hawai‘i Constitution].

67. The infrastructure cost to develop Hawaiian Home Land lots on average is approximately $100,000 per lot.

68. According to [the] Hawaiian Homes Commission Chair ..., “The model is there, the projects are there, the momentum is there. Now, it's just an issue of money.”

69. According to [the] Hawaiian Homes Commission Chair ..., a conservative estimate of the funding necessary for infrastructure to place one thousand homesteaders each on homestead lands each year is $100,000,000 annually.

[246 P.3d 373 , 124 Hawai'i 441]

70. In contrast, other than the funding provided pursuant to Act 14, the [DHHL] received less than one and a half million dollars in general revenue funds from the [L]egislature for fiscal year 2007.

71. Simultaneously, since 1994, the [State] has not floated nor issued any capital improvement bond financing to support the need for additional DHHL infrastructure.

72. The [DHHL] does not currently receive sufficient funding to develop house lots for all applicants on the waiting list.

73. The [DHHL] does not currently receive sufficient funding to reduce the waiting list by ninety percent over the next decade.

74. The [DHHL] does not currently receive sufficient funding to pay for the development of homesteads for applicants on the waiting list within a reasonable time frame.

75. The [DHHL] does not currently receive sufficient funds for the following purposes: (1) development of home, agriculture, farm and ranch lots; (2) home, agriculture, aquaculture, farm and ranch loans; (3) rehabilitation projects to include, but not limited to, educational, economic, political, social and cultural processes by which the general welfare and conditions of native Hawaiians are thereby improved; (4) the administration and operating budget of the [DHHL]; in furtherance of (1), (2), (3) and (4) herein.

76. The [S]tate administration fails to annually request “sufficient sums” for the administration and operating budget of the [DHHL] to assure that all the programs of the department prescribed under Article XII, [Section] 1 are adequately funded.

77. Accordingly, Pl...