This morning, at 10:00 a.m. HST (3 p.m. EST, noon PST), the Hawaii Intermediate Court of Appeals will hear oral arguments in a case we've been following that involves federal regulatory takings claims, Williamson County ripeness, and the practical effect of the Hawaii Supreme Court's decision in GATRI v. Blane, 88 Haw. 108, 962 P.2d 367 (1998) regarding zoning and planning for land in the Special Management Area.
Leone v. County of Maui, No. 2969 is a case that has U.S. Supreme Court potential if the Hawaii courts don't get it right and is definitely one to watch. In that case, Maui beachfront property owners' federal regulatory takings claims were dismissed by a state trial court because the court concluded the property owners had not exhausted their administrative remedies.
We will be live blogging the arguments starting at about 9:55 a.m. Joining me will be my Damon Key colleagues Mark Murakami and Rebecca Copeland.
Below the live blog window is a summary of the case and links to the briefs and the trial court's order. Disclosure: we filed an amicus brief supporting the property owners in this case, available here.
The factual background and legal context is somewhat complex, but here's the short version:
- The Leones' parcel is zoned "Hotel-Multifamily" which should permit the construction of a single-family home. The applicable Community Plan designation, however, is "Park" which does not allow single-family homes. The parcel is designated as "Park" in the Community Plan because the County earlier wanted to acquire the parcel and neighboring parcels for a public beach park and changed the Community Plan designation, but ran out of money after acquiring only two.
- The entirety of the property is within the Special Management Area, a special zone subject to an additional layer of regulation under the Hawaii Coastal Zone Management Act, Haw. Rev. Stat. § 205A-1, et seq. The CZMA exempts a single-family residence from the definition of "development" for which a SMA permit is needed, unless the home will have a "cumulative impact, or a significant environmental or ecological effect" on the SMA. Haw. Rev. Stat. § 205A-22.
- In GATRI v. Blane, 88 Haw. 108, 962 P.2d 367 (1998), the Hawaii Supreme Court concluded that for land within the SMA, the CZMA (Haw. Rev. Stat. § 205A-26), requires "consistency" between the parcel's zoning and the designation of the parcel on the General or Community Plan before any "development" may be approved by a county.
- Thus under GATRI, because the zoning on the Leones' parcel is not "consistent" with the plan designation, and the County cannot approve any use of the parcel as otherwise would be permitted under the "Hotel-Multifamily" zoning, or the "Park" Community Plan designation (even assuming that the "Park" designation would allow private use).
- The CZMA is administered by the counties, and if a Maui property owner believes a proposed use is exempt, under the local rules she must seek an exemption determination from the county planning department and request a ruling that no SMA permit is required. Under Maui's administrative rules, an application for development cannot be processed unless the zoning is consistent with the Community Plan. Consequently, when the property owner filed a request for a determination that a SMA permit was unnecessary, the county refused to process it.The consequence of GATRI and the zone-plan "inconsistency" means that no permits for economically beneficial uses can be issued.
- When regulations leave a property owner with no economically viable use of her land, the government is per se liable to pay just compensation. Lucas v. S.C. Coastal Council, 505 U.S. 1003 (1992).
- Williamson County Regional Planning Comm'n v. Hamilton Bank of Johnson City, 473 U.S. 172 (1985) requires that property owners initially file their regulatory takings claims in state court, and the Leones did so, asserting the regulations permitted no economically beneficial use of their land.
- The trial court dismissed the complaint, holding that it lacked subject matter jurisdiction because the property owners did not appeal the decision of the Maui Planning Director to not process their application for a Special Management Area permit exemption. The court held the property owners should have appealed this decision to the Maui Planning Commission and thus had not exhausted their administrative remedies prior to filing suit. The court also held that "there are effective remedies still available" such as filing a new application for an exemption, amending the Community Plan, or forego an exemption and seek a SMA permit.
Here are the critical documents: