Lanai Co., Inc. v. Land Use Com'n

Decision Date17 September 2004
Docket NumberNo. 22564.,22564.
Citation105 Haw. 296,97 P.3d 372
PartiesLANAI COMPANY, INC., Appellant-Appellee, v. LAND USE COMMISSION and Lanaians for Sensible Growth, Appellees-Appellants and Office of State Planning and County of Maui Planning Department, Appellees-Appellees.
CourtHawaii Supreme Court

Russell A. Suzuki and James J.S. Chang, Deputy Attorneys General, on the briefs, for appellee-appellant Land Use Commission.

Alan T. Murakami and Carl C. Christensen (Native Hawaiian Legal Corporation), on the briefs, Honolulu, for appellee-appellant Lanaians for Sensible Growth.

Gary W. Zakian, Deputy Corporation Counsel, County of Maui, on the briefs, for appellee-appellee County of Maui.

Bruce L. Lamon and Ellen Cirangel (Goodsill Anderson Quinn & Stifel), on the briefs, Honolulu, for appellant-appellee Lanai Company, Inc.

MOON, C.J., LEVINSON, NAKAYAMA, ACOBA, and DUFFY, JJ.

Opinion of the Court by ACOBA, J.

In this appeal, Appellees-Appellants Land Use Commission (the LUC) and Lanaians for Sensible Growth (Sensible Growth) contest the April 26, 1997 order of the Circuit Court of the Second Circuit (the court)1 reversing the LUC's May 17, 1996 order (1996 Order) which, inter alia, required Appellant-Appellee Lanai Company, Inc. (LCI)(1) to immediately cease and desist any use of water from the high level aquifer for irrigation of the Manele golf course on the island of Lanai pursuant to Condition 10 of its April 6, 1991 Order (1991 Order) and (2) to file a detailed plan with the LUC within sixty days, specifying how it will comply with the LUC's 1991 Order requiring water use from alternative non-potable water sources outside of the high level aquifer. For the reasons set forth herein, we (1) hold that Hawai'i Rules of Civil Procedure (HRCP) Rule 52(a) does not apply to a circuit court's review in an appeal from an agency decision; (2) affirm the court's conclusion that the LUC's 1996 Order was clearly erroneous to the extent it interpreted Condition No. 10 of its 1991 Order as precluding the use by LCI of "any" or all water from the high level aquifer; and (3) remand the case to the court, with instructions that the court remand this case to the LUC for clarification of its findings, or for further hearings if necessary, on the issue of whether LCI used potable water from the high level aquifer in violation of Condition No. 10.

I.

On November 29, 1989, LCI's predecessor in interest, Lanai Resort Partners,2 petitioned the LUC to amend the land use district boundary at Manele, on the island of Lanai, from rural and agricultural districts to an urban district.3 LCI planned to develop an eighteen-hole golf course as an amenity of the Manele Bay Hotel. On October 10, 1990, Sensible Growth, the Office of Hawaiian Affairs (OHA), and LCI signed a memorandum of agreement (the Agreement).4 It appears from the record that the Agreement was included as Appendix K of the Manele Golf Course and Golf Residential Project Environmental Impact Statement (Environmental Impact Statement or EIS), "accepted by the Maui Planning Commission as an accurate environmental disclosure document."5 The Agreement provided in relevant part that LCI, in "consideration of the mutual promises and agreements" between the parties, agreed to "[e]nsure that no high level ground water aquifer [[6] will be used for golf course maintenance or operation (other than as water for human consumption) and that all irrigation of the golf course shall be through alternative non-potable water sources."

Sensible Growth and LCI submitted proposed findings of fact (findings), conclusions of law (conclusions), and orders, in February of 1991.7 Sensible Growth's proposed order recommended that the LUC impose a condition that "no high level ground water aquifer will be used for golf course maintenance or operation (other than water for human consumption) and that all irrigation of the golf course shall be through alternative non-potable water sources."

By the 1991 Order, the LUC granted LCI's petition. The LUC made the following relevant findings, conclusions, and Decision and Order (order), describing, inter alia, the sources of water for golf course irrigation and granting reclassification of the land:

FINDINGS OF FACT
IMPACT UPON RESOURCES OF THE AREA
....
Water Resources
45. Lanai draws its domestic water and pineapple irrigation supply from the high level aquifer which has a sustainable yield of [six million gallons per day (mgd)].
46. The proposed golf course at Manele of which the Property is to be a part, will be irrigated with nonpotable water from sources other than potable water from the high level aquifer.[8]
47. [LCI's] golf course design consultant ... is projecting that 624,000 [gallons per day (gpd)] will be required for irrigation of a "target" golf course,[9] but [LCI] is conservatively projecting 800,000 gpd for irrigation of the golf course.
48. [LCI] proposes to provide alternate sources of water for golf course irrigation by developing the brackish water supply.[10] According to [LCI], Wells Nos. 9 and 12 which have capacities of about 300,000 gpd and 200,000 gpd, respectively, have been tested but are not yet operational. Well No. 10 which has a capacity of approximately 100,000 gpd with a possible potential of 150,000 gpd has also been tested and will be available. Currently available also is brackish water from Well No. 1 which is operational and which has a capacity of about 600,000 gpd.
49. [LCI's] civil, sanitary and environmental engineering consultant, James Kumagai [(Kumagai)], stated that it is only a matter of cost to develop wells for brackish water sources that are already there. The consultant also state [d] that the brackish water sources necessary to supply enough water for golf course irrigation could be developed and be operational within a year.
....
Water Service
89. [LCI] is now in the process of developing the brackish water supply for irrigation of the proposed golf course. According to [LCI], Well No. 1, which is operational and available, and Well Nos. 9, 10 and 12, which have been subjected to full testing, have aggregate brackish source capacity in excess of the projected requirements of 624,000 gpd to 800,000 gpd for the Manele golf course.
....
91. [LCI] intends to irrigate the golf course with nonpotable water, leaving only the clubhouse which will use potable water, the requirement for which should be insignificant.
CONFORMANCE WITH THE HAWAII STATE PLAN
117. [LCI] has stated that the Manele golf course will be irrigated with nonpotable water from sources other than the potable water from the high level aquifer.
....
CONFORMANCE TO STATE LAND USE URBAN DISTRICT STANDARDS
122. The Property is proposed to be developed as a golf course to serve as an amenity of the Manele Bay Hotel.
CONCLUSIONS OF LAW
Pursuant to Chapter 205 of the [HRS] and the [LUC] Rules, the [LUC] finds upon a preponderance of the evidence that the reclassification of the Property ... subject to the conditions in the Order, for a golf course ... is reasonable, nonviolative of Section 205-2, [HRS] ... and is consistent with the Hawaii State Plan ... and conforms to the Hawaii [LUC] Rules.
ORDER
IT IS HEREBY ORDERED that the Property ... for reclassification from the Rural Land Use District to the Urban Land Use District as to 110.243 acres thereof, shall be and is hereby approved, and the District Boundaries are amended accordingly, subject to the following conditions:
....
10. [LCI] shall not utilize the potable water from the high-level groundwater aquifer for golf course irrigation use, and shall instead develop and utilize only alternative non-potable sources of water (e.g., brackish water, reclaimed sewage effluent) for golf course irrigation requirements.
In addition, [LCI] shall comply with the requirements imposed upon [LCI] by the State [of Hawai'i] Commission on Water Resource Management [(the Water Commission)] as outlined in the [Water Commission's] Resubmittal-Petition for Designating the Island of Lanai as a Water Management Area, dated March 29, 1990.[11]
11. [LCI] shall fund the design and construction of all necessary water facility, improvements, including source development and transmission, to provide adequate quantities of potable and non-potable water to service the subject property.
....
18. Non[-]potable water sources shall be used towards all nonconsumptive uses during construction of the project.
....
20. [LCI] shall develop the property in substantial compliance with representations made to the [LUC] in obtaining reclassification of the property. Failure to so develop may result in reclassification of the property to its former land use classification.
....

(Emphases added.)

II.

Subsequent to the reclassification of the land and pursuant to the 1991 Order, the Maui County Council (the County Council), on February 17, 1993, submitted a letter to then-Mayor Linda Crockett Lingle (Mayor Lingle). The County Council noted that "[LCI] ha[d] gone to the [LUC] and stated that water [would] be needed from the high level aquifer, an existing source, which violate[d] the commitment made during the approval process." The County Council explained that "[w]hen the approval was given, it was understood that [LCI] was committed to finding a new source or sources of water to adequately take care of the irrigation needs of the Manele Project." As such, the County Council requested that the Mayor's office direct the Land Use and Codes Division to stop work on the golf course until LCI developed a new source of water.

LCI responded to the County Council's letter in correspondence dated March 4, 1993, addressed to Mayor Lingle. LCI declared that "[b]rackish and treated effluent [would] be used for golf course and landscape irrigation.... These brackish wells for the golf course irrigation are in compliance to [sic] Ordinance No.2066 enacted by the County Council on December 17, 1991."12 Mayor Lingle wrote on March 4, 1993,...

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