Kelly v. 1250 Oceanside Partners
| Decision Date | 28 July 2006 |
| Docket Number | No. 26813.,26813. |
| Citation | 140 P.3d 985 |
| Parties | Walter John KELLY, Charles Ross Flaherty, Jr., Patrick M. Cunningham, and Michele Constans Wilkins, Plaintiffs-Appellees/Cross-Appellants and Protect Keopuka Ohana, a Hawai`i non-profit corporation, Plaintiff-Appellee/Cross-Appellant v. 1250 OCEANSIDE PARTNERS, a Hawai`i Limited Partnership, Defendant-Appellant/Cross-Appellant/Cross-Appellee and State of Hawai`i, Department of Health, and Chiyome Fukino,<SMALL><SUP>1</SUP></SMALL> in her official capacity as the director of the State of Hawai`i Department of Health, Defendants-Appellants/Cross-Appellees and Department of Land and Natural Resources, and Peter Young, in his official capacity as the Director of the State of Hawai`i Department of Land and Natural Resources, Defendants-Appellees and Land Use Commission, Defendant and County of Hawai`i, Christopher Yuen in his official capacity as the Planning Director for the County of Hawaii, Dennis Lee, in his official capacity as the Chief Engineer, County of Hawaii, Defendants-Appellants/Appellees/Cross-Appellees and John Does 1-10, Jane Does 1-10, Doe Corporations, Partnerships, Governmental Units or Other Entities 2-20, Defendants (Nos. 26813 & 27864). |
| Court | Hawaii Supreme Court |
Ivan M. Torigoe, Deputy Corporation Counsel, County of Hawai`i, on the briefs, for Defendants-Appellants/Cross-Appellees County of Hawai`i, Chrostopher Yuen, in his official capacity as the Planning Director for the County of Hawai`i, and Dennis Lee, in his official capacity as the Chief Engineer, County of Hawai`i.
Russell Suzuki and Adina Kobayashi Cunningham, Deputy Attorneys General, on the briefs, for Defendants-Appellees/Cross-Appellants State of Hawai`i Department of Health and Chiyome Fukino.
Alan T. Murakami and Moses K.N. Haia III (Native Hawaiian Legal Corporation), on the briefs, Honolulu, for Plaintiff-Appellee/Cross-Appellant Protect Keopuka `Ohana.
David Kimo Frankel, on the briefs, for Amicus Curiae Sierra Club.
We hold in this consolidated appeal from the March 14, 2006 Fourth Amended Final Judgment (final judgment) of the third circuit court (the court),2 that (1) Defendant-Appellant/Cross-Appellee County of Hawai`i (the County), by and through Defendant-Appellant/Cross-Appellee Christopher Yuen, in his official capacity as the Planning Director for the County of Hawai`i, and Defendant-Appellant/Cross-Appellee Dennis Lee (Lee), in his official capacity as Chief Engineer for the County of Hawai`i [collectively, the County Defendants], have an affirmative duty to protect the waters adjacent to the master planned project known as "Hokuli`a" (the Property) being developed by Defendant-Appellant/Cross-Appellant/Cross-Appellee 1250 Oceanside Partners (Oceanside) under the public trust doctrine,3 (2) Plaintiffs-Appellees/Cross-Appellants Protect Keopuka Ohana (PKO),4 Walter John Kelly, Charles Ross Flaherty, Jr., Patrick M. Cunningham, and Michelle Constans Wilkins (Kelly Plaintiffs) [collectively, Plaintiffs] failed to establish that the County breached its public trust duties with respect to water pollution that occurred in "Class AA" waters abutting the Property, (3) the court was correct in concluding that Defendant-Appellee-Cross-Appellant State of Hawai`i, Department of Health (DOH), by and through Dr. Chiyome Fukino, in her official capacity as the Director of Health, has a duty under the public trust doctrine enunciated in In re Water Use Permit Applications, 94 Hawai`i 97, 9 P.3d 409 (2000) [hereinafter, Waiahole I], to protect the waters adjacent to the Property, but (4) PKO failed to sustain its burden of proving that DOH violated its public trust duties as alleged under Count II of the Fifth Amended Complaint (the Complaint) in relation to construction activities on the Property.
In the early 1990s, Oceanside planned a large-scale residential, recreational, and agricultural development of approximately 1,540 acres on the Property, which was situated between Kailua-Kona and Kealakekua on the island of Hawai`i. The proposed development included 730 residential lots, an 18-hole golf course, an 80-unit members' lodge, a golf clubhouse, beach lodge, and shoreline park.
The Property spans approximately 1.9 miles of coastline. The State of Hawai`i classifies the ocean waters off this coastline, Kealakekua Bay, as Class AA, which is the most protective classification for marine waters, and requires that the waters remain pristine, or in "wilderness" condition. Hawai`i Administrative Rules (HAR) §§ 11-54-3(c)(1) (2004),5 11-54-6(a)(2)(A) & (b)(2)(A) (2004).6 Under Hawai`i County Code (HCC) chapter 10 (2005), entitled "Erosion and Sedimentation Control," Oceanside was required to obtain permits from the County for grading and grubbing for construction activities and for erosion control. In addition, Oceanside was required to obtain a permit from DOH to control water pollution pursuant to Hawai`i Revised Statutes (HRS) § 342D-6 (1993 & Supp.2005)7 and HAR chapters 11-54 (2004)8 and 11-55 (2005).9
After several public hearings and meetings commencing in 1993, Oceanside received county zoning approvals in 1994, 1996, and 1997, and various administrative approvals, including subdivision approvals. In April 1998, the County entered into a development agreement with Oceanside under HRS § 46-123 (1993),10 ensuring Oceanside's right to proceed and requiring certain public benefits, including a five-mile highway and a 140-acre shoreline park. Oceanside began actual construction in January 1999 pursuant to these final discretionary approvals.
In July 1999, Oceanside applied to DOH for a general permit under the State's National Pollutant Discharge Elimination System (the NPDES) permit program.11 The application, if approved, would permit Oceanside to perform erosion control measures to ensure that no discharge to the ocean occurred. The application required the submission of a Notice of Intent (NOI) to DOH for coverage under the construction general permit under HAR chapter 11-55. According to DOH, the NPDES is modeled on federal law, and authorized discharges of storm water associated with construction activity "that result in the disturbances of five acres or more of total land area." HAR Chapter 11-55. The NPDES also prohibits any pollution of Class AA waters. HAR § 11-54-4.
Among other requirements, the NPDES permit system directs that an applicant implement construction site best management practices, or "BMPs," "to ensure that storm water discharges associated with construction activities will not cause or contribute to a violation of applicable state water quality standards." HAR chapter 11-55 (emphasis added). In its NOI, Oceanside did not propose to discharge storm water to Class AA waters. Rather, it proposed on-site runoff and erosion control measures that included erecting silt fences and discharging storm water into eight dry gulches on the Property to ensure that in the event of a storm, no water would be discharged into Class AA waters.
On October 11, 1999, after several comments by DOH, DOH approved a Notice of General Permit Coverage (the Permit) that allowed Oceanside to "discharge storm water associated with construction activity from the [Property] to the receiving waters of unnamed dry gulches . . . at the discharge points' latitudes and longitudes specified in the site-specific plans for each phase of the construction." The Permit required that Oceanside comply with the NPDES and other administrative rules, and with "County approved sediment and erosion control plan(s) [hereinafter, ECP]." In particular, the Permit provided that Oceanside must comply with HAR § 11-54-4(a),12 which prohibits the discharge of substances to Class AA waters. DOH claims in its opening brief that the Permit was the only permit issued by DOH to Oceanside.
Pursuant to HCC chapter 10, entitled "Erosion and Sedimentation Control," Oceanside was obligated to submit its ECP to the County for review. According to Joseph Vierra (Vierra), one of the principals of Belt Collins, Oceanside's contractor, the ECP "was designed to control erosion and to prevent soil and sediment from leaving [the Property] and entering the ocean" and was designed to withstand what he terms a "10-year storm." Vierra clarified that a "10-year storm" meant "a storm that drops 1.75 inches of precipitation in one hour." On September 10, 1999, the County reviewed and subsequently approved Oceanside's ECP.
On September 8 and 9, 2000, heavy rainstorms hit Kona. Oceanside's erosion control measures failed, in part because Oceanside did not complete all of its BMPs or the erosion control measures that it specified in its NOI. The storm caused flooding throughout the Property and runoff into the surrounding Class AA waters.
On September 12, 2000, a DOH inspector investigated reports of water pollution at the Property. On September 19, 2000, three DOH inspectors conducted a Compliance Evaluation Inspection at the Property. Oceanside represented that "additional erosion control measures are being implemented to prevent a recurrence of the discharge of sediment into the ocean from the [Property]." DOH continued to investigate the matter. County inspectors also visited the site and opined that Oceanside's erosion control measures failed because, in part, the County's ECP used by Oceanside was designed for a "10-year storm," but the September rainfall exceeded the County's ten-year storm standards. The report also noted that Oceanside did not complete all of its erosion control measures. Oceanside states that following the storm in September 2000, it revised its ECP incorporating new information from the September 9, 2000 storm and comments from the County and various State agencies.
On October 30, 2000, the Kelly Plaintiffs filed a complaint against DOH and Oceanside with the...
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