Sierra Club v. Department of Transp., No. 27407.

• Court: Supreme Court of Hawai'i
• Writing for the Court: Duffy
• Citation: 167 P.3d 292
• Parties: The SIERRA CLUB, a California non-profit corporation registered to do business in the State of Hawai`i; Maui Tomorrow, Inc., a Hawai`i non-profit corporation; and the Kahului Harbor Coalition, an unincorporated association, Plaintiffs-Appellants v. The DEPARTMENT OF TRANSPORTATION of the State of Hawai`i; Barry Fukunaga, in his capacity as Director of the Department of Transportation of the State of Hawai`i; Michael Formby in his capacity as Deputy Director for Harbors of the Department of Transportation of the State of Hawai`i;<SMALL><SUP>1</SUP></SMALL> and Hawai`i Superferry, Inc., Defendants-Appellees.
• Docket Number: No. 27407.
• Decision Date: 31 August 2007

167 P.3d 292 The SIERRA CLUB, a California non-profit corporation registered to do business in the State of Hawai`i; Maui Tomorrow, Inc., a Hawai`i non-profit corporation; and the Kahului Harbor Coalition, an unincorporated association, Plaintiffs-Appellants
v.
The DEPARTMENT OF TRANSPORTATION of the State of Hawai`i; Barry Fukunaga, in his capacity as Director of the Department of Transportation of the State of Hawai`i; Michael Formby in his capacity as Deputy Director for Harbors of the Department of Transportation of the State of Hawai`i;<sup>1</sup> and Hawai`i Superferry, Inc., Defendants-Appellees. No. 27407. Supreme Court of Hawai`i. August 31, 2007. As Corrected October 1, 2007.

[167 P.3d 297]

Isaac Hall, Wailuku, on the briefs, for plaintiffs-appellants The Sierra Club, Maui Tomorrow, Inc., and the Kahului Harbor Coalition.

William J. Wynhoff, Deputy Attorney General, on the briefs, for defendants-appellees The Department of Transportation of the State of Hawai`i; Barry Fukunaga, in his capacity as Director of the Department of Transportation of the State of Hawai`i; Michael Formby, in his capacity as Deputy Director for Harbors of the Department of Transportation of the State of Hawai`i.

Lisa Woods Munger, Lisa A. Bail, and Jill Murakami Baldemor (of Goodsill Anderson Quinn & Stifel), Honolulu, on the briefs, for defendant-appellee Hawai`i Superferry, Inc.

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

Opinion of the Court by DUFFY, J.

Plaintiffs-Appellants the Sierra Club, Maui Tomorrow, Inc., and the Kahului Harbor Coalition² appeal from the July 12, 2005 final judgment of the circuit court of the second circuit,³ ruling in favor of Defendants-Appellees State of Hawai`i Department of Transportation (DOT or HDOT); Rodney Haraga, in his capacity as Director of DOT (substituted by Barry Fukunaga, see supra note 1); Barry Fukunaga, in his capacity as Deputy Director for Harbors of DOT (substituted by Michael Formby, see supra note 1); and Hawai`i Superferry Inc. The underlying dispute in this litigation is whether DOT was required to perform an environmental assessment (EA), under Hawai`i Revised Statutes (HRS) chapter 343 (1993 & Supp.2004), commonly referred to as the Hawai`i Environmental Policy Act (HEPA),⁴ before approving various harbor improvements and permits associated with the Hawaii Superferry project, or whether its determination that the project was exempt from chapter 343 requirements was proper.

The circuit court granted the separate motions of the State and Superferry to dismiss or, in the alternative, for summary judgment, ruling that: (1) Plaintiffs lack standing; (2) DOT's actions complied with HRS chapter 343; (3) Plaintiffs' claim relating to the Draft EA for the Kahului Commercial Harbor Improvements was premature; and (4) Plaintiffs' request for a continuance to permit discovery was insufficient under Hawai`i Rules of Civil Procedure (HRCP) Rule 56(f).

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On appeal, Appellants argue that: (1) the circuit court erred in dismissing Appellants' claim on the basis of standing because Appellants are among those injured by potential adverse impacts caused by the Hawaii Superferry project, and also because they suffer a procedural injury; (2) the circuit court erred in granting summary judgment in favor of Appellees by ruling that they complied with HEPA, because the exemptions were illegal and did not apply; (3) the circuit court erred in dismissing, as premature, Appellants' claim that the Hawaii Superferry project must be incorporated into the ongoing EA for Kahului Harbor Improvements, because the harbor exemptions were unlawfully segmented from the already initiated but incomplete EA; and (4) the circuit court erred in refusing to continue the hearing to permit further discovery because there was a factual dispute as to what was before DOT in making its exemption determination.

On August 23, 2007, we issued an order reversing the July 12, 2005 circuit court judgment, holding that DOT's determination that the improvements to the Kahului Harbor are exempt from the requirements of HRS chapter 343 was erroneous as a matter of law, and instructing the circuit court to enter summary judgment in favor of Appellants on their claim as to the request for an EA. We maintained concurrent jurisdiction to issue this opinion.

I. BACKGROUND

The Hawaii Superferry project generally involves an inter-island ferry service between the islands of O`ahu, Maui, Kaua`i, and Hawai`i, using harbor facilities on each island. According to a permit application filed with the Public Utilities Commission (PUC) on July 22, 2004,<sup>5</sup> Hawaii Superferry, Inc. has proposed to develop and operate a high-speed roll-on/roll-off ferry service, using two vessels, capable of carrying up to 866 passengers and 282 cars, or 26 trucks or buses and 65 cars per trip. As a result of negotiations between the State and Hawaii Superferry, Inc., DOT concluded that several improvements to Kahului Harbor were necessary to accommodate the Superferry project, including the construction of a removable barge to Pier 2 of the harbor and other improvements to assist in Superferry operations. According to DOT, "[t]he state anticipates the barge will cost as much as $10 million," and the State of Hawai`i has allocated a total of approximately $40,000,000 in state funds for improvements to the four harbors that will be utilized by the Superferry project.

Appellants, consisting of two nonprofits and one unincorporated association, are environmental groups whose members use the area around Kahului harbor in various ways. The Sierra Club is one of the nation's largest environmental organizations, with over 700,000 members, approximately 5,000 of which live in Hawai`i. The Sierra Club has a Hawai`i Chapter and a Maui group, which are involved in educating the public about Hawaii's natural resources through hikes, exploring wild places and natural resources, restoring and preserving eco-systems through service trips, and protecting open space through lobbying and litigation. Maui Tomorrow is described by a member as a "Maui island-wide environmental group which has participated in numerous environmental issues including but not limited to the environmentally sound growth of [] airport and harbor infrastructures." The Kahului Harbor Coalition is "an organization of farmers,

167 P.3d 299

businessmen, recreational users and citizens formed out of concern about the increased risks of alien species introductions through Kahului Harbor."

Appellants challenge, pursuant to HRS § 343-7(a) (1993), DOT's determination that the improvements to Kahului Harbor to accommodate the Superferry project are exempt from the requirements of HEPA, thus obviating the need for an EA.

A. The Hawai`i Environmental Policy Act

HEPA, which was patterned after the National Environmental Policy Act of 1969 (NEPA), 42 U.S.C. § 4321-4370(f) (2000), was passed into law in 1974, 1974 Haw. Sess. L. Act 246, and codified in HRS chapter 343. The law requires that EAs and environmental impact statements (EIS) be prepared for development projects that meet certain criteria. According to A Guidebook for the Hawaii State Environmental Review Process, a publication of the Office of Environmental Quality Control (OEQC),

the law requires that government give systematic consideration to the environmental, social and economic consequences of proposed development projects prior to allowing construction to begin. The law also assures the public the right to participate in planning projects that may affect their community.

Office of Environmental Quality Control, State of Hawai`i, A Guidebook for the Hawaii State Environmental Review Process 6 (2004) [hereinafter Guidebook], available at http://www.state.hi .us/health/oeqc/publications/guidebook.pdf.

The basic framework of HEPA consists of various stages of assessment by the proposing or accepting agency, each of which may entail additional review procedures.

First, it must be determined whether a project or program⁶ is subject to the environmental review process in the first place. Projects are subject to the law if they (1) are either initiated by a government agency ("agency actions") or by a private party who requires government approvals for the project to proceed ("applicant actions"), and (2) propose one or more of nine enumerated land uses or administrative acts, known as "triggers." See HRS § 343-5(a)(1)-(9); Guidebook, supra, at 9. If a triggering event occurs, an EA must be prepared, unless the program or project is declared exempt.

Exemption determinations are governed by HRS § 343-6(7) (1993), which delegates to the Environmental Council⁷ the responsibility to "adopt, amend, or repeal" rules which shall "[e]stablish procedures whereby specific types of actions, because they will probably have minimal or no significant effects on the environment, are declared exempt from the preparation of an assessment." HRS § 343-6(7). The exemption rules provide for ten classes of exempt action, specified in HAR § 11-200-8(A)(1)-(10) (1996), available at htt p://www.state.hi.us/

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health/about/rules/11-200.html.⁸ Agencies are also directed to develop their own lists of specific types of actions that fall within the exempt classes, which are reviewed by the Environmental Council and must be "consistent with both the letter and intent expressed in the exempt classes [of the EIS Rules] and chapter 343." HAR § 11-200-8(D).

An agency may declare an action exempt from the preparation of an EA provided that the agency obtains the advice of "other outside agencies or individuals having jurisdiction or expertise as to the propriety of the exemption." HAR § 11-200-8(A). The exemption classes do not apply when "the cumulative impact of planned successive actions in the same place, over time, is significant, or when an action that is normally insignificant in its impact on the environment may be significant in a...