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Kauai Springs Zoning Permit Appeal

Today we filed the Opening Brief in Kauai Springs' appeal from the January 2007 decision by the Kauai Planning Commission to deny three zoning permits to the small, Kauai-family-owned water bottling company.

The case is an appeal from an agency decision under the Hawaii Administrative Procedures Act (a procedure known in other jurisdictions as a petition for a writ of administrative mandate or a petition for a writ of mandamus).  I won't go into the details of the case in this post, since the brief spells out the facts and the arguments in support.   

For more information about the case, here are some links to earlier media coverage:

• A May 2006 story about the case from the Honolulu Star-Bulletin

• A story from the Kauai newspaper about the TRO that halted the County's attempt to shut the business down while the appeal was being considered.

• Another story about the preliminary injunction that allowed Kauai Springs to stay open.

• "Kauai Springs: Still Open for Business" from Hawaii Reporter.

The Opening Brief is posted here (2.5mb pdf).

Comprehensive Eminent Domain Plan: If You Don't Have One, The Court Will Make One Up

In Aspen Creek Estates, Ltd. v. Town of Brookhaven, 2007 NY Slip Op 09583 (Dec. 4, 2007), the Appellate Division of the New York Supreme Court approved a taking of private property to preserve it as farmland.  The court's majority held that the goal of preserving farmland generally qualifies as a public use/purpose, and that there was no evidence of pretext in the record demonstrating that the presumption of public use should be questioned, even though the property owner asserted that the land would eventually be leased or sold to another private owner.  The facts of the case are set out in the opinion, and by Professor Patty Salkin in her analysis of the decision, so I won't repeat them in detail here.  Two points, however, merit discussion.

First, the property owner asserted that because the taking was not part of a plan, it did not deserve judicial deference.  Recall that in  Kelo v. City of New London, 545 U.S. 469 (2005), the majority took great pains to establish that the taking of Mrs. Kelo's house was part of a "'carefully considered' development plan," and was therefore entitled to judicial deference.  Kelo reviewed the decision to take property by eminent domain in much the same fashion that the courts review police power zoning decisions under due process analysis: courts wash their hands for the most part as long as the zoning is enacted "in accordance with a comprehensive plan."  This aspect of the Kelo decision has received some attention, but little traction so far.  See, e.g., MiPro Homes, L.L.C. v. Mount Laurel Township, 878 A.2d 38 (N.J. Super. 2005), aff'd 910 A.2d 617 (N.J.) (per curiam), cert. denied, ___ U.S. ___ (2007); Western Seafood Co. v. United States, No 04-41196 (5th Cir., Oct. 11, 2006). 

The Aspen Creek court wasn't bothered at all by the utter lack of a formal (or even an informal) plan, Kelo's "carefully considered" language notwithstanding.  The court simply implied one:

In any event, while it does not appear from the record that the precise boundaries of the Manorville Farmland Protection Area [the alleged "plan"] have been carefully considered by the Town, it is clear from the comments made by various speakers at the hearing that the desirability of preserving farmland in Manorville has indeed been recognized by civic associations and public officials.  A plan prepared by the Manorville Taxpayers Association in 1993 set preservation of the remaining farms in the hamlet as a goal. . . .

Slip op. at 6.  So let's see if I get this straight.  There was no plan to preserve farmland, but since someone "commented" at a public hearing that preserving farmland is desirable, the court is free to imply that a plan not only exists, but that it is "carefully considered" and therefore due judicial deference?  Is is highly doubtful that a plan by civic groups gleaned from comments at a public hearing is the kind of comprehensive action the majority had in mind in Kelo.  The fact that a condemnation takes place within the context of a comprehensive plan is, in theory, designed to give the courts confidence in the result, but if an action takes place without a plan, courts should be more willing to give it a hard look, as in cases of "spot zoning," for example. 

The second point is also spurred by the above quote.  If the plan to take property to preserve farmland has been in existence since 1993, then the just compensation awarded to the property owner should take into account the rise in value from that date to the time of the taking, since the so-called "plan" has blighted the property since 1993.

ICA Oral Arguments in GMO Algae / EA Appeal

I sat in on today's oral arguments in the Hawaii Intermediate Court of Appeals (the nondiscretionary appeals court of first resort) in an interesting case, Ohana Pale Ke Ao v. Bd. of Agriculture, State of Hawaii, No. 27855.  From the arguments and a quick review of the briefs, the primary issue in the case is whether the Board of Agriculture was required to undertake an Environmental Assessment pursuant to Haw. Rev. Stat. ch. 343 prior to granting a permit for the importation of genetically-modified algae into Hawaii by the tenant of a State-owned facility on the Big Island of Hawaii.

The recording of the arguments can be downloaded here (63mb mp3).

Several "community groups" filed suit against the Board, claiming that an EA was required because the imported GMO algae would be used in the state-owned facility, and therefore "[p]ropose[d] the use of state or county lands," a triggering event under Haw. Rev. Stat. § 343-5.  In December 2005, the Third Circuit Court granted the community groups' motion for summary judgment, holding that the Board should have undertaken an EA as a matter of law.

On appeal, the Board argued that there was no new "use" of state-owned land because the state's facility was already being used for growing and studying algae, just not the particular GMO algae at issue; indeed, the GMO algae would result in less use of the facility, not more.  The Board also argued that the permit procedures in Haw. Rev. Stat. ch. 150A, which were enacted after chapter 343 and contain a detailed process, worked an implied repeal of the EA requirement.  Today's questions from the three-judge panel (Foley, Watanabe, and Nakamura) focused on two issues. 

First, whether the continuation of an existing use of state land -- although processing a new product in lesser quantities -- qualified as a "use" of state land within the meaning of § 343-5.  The plaintiffs' counsel stressed that "use" means use, and it is undisputed that the imported GMO algae would be using the state-owned facility, and therefore would be using state lands.  The Board argued that no new "use" was proposed, just a different product, and that under the plaintiffs' theory of what defines "use," the act of driving a car on state-owned streets could be considered a "use of state lands" that would trigger an EA.  After prompting by Judge Nakamura, the plaintiffs' counsel countered that argument, suggesting an overly broad reading of "use" could be limited by asking whether the activity (in this case the importation) was an "integral part of the project."  Judge Nakamura extracted a concession from the plaintiff's counsel who admitted that if the GMO algae was imported to be used in a privately-owned facility rather than one owned by the state, there would be no issue of an EA at all. 

The second thread of questioning was whether by enacting chapter 150A, the Legislature intended to limit chapter 343's applicability.  Section 150A-6.3 contains detailed standards, and the Board has promulgated administrative rules with a fairly stringent process to consider import permit applications.  Judge Foley asked whether this statute was the primary protection for the environment and public health.  Judge Foley, joined by Judge Nakamura, then asked the plaintiffs' counsel whether the Legislature's intent to "streamline" the import permit process by enacting chapter 150A would be rendered meaningless if the court did not hold that the EA triggers were not applicable.  If the Legislature did not intend to streamline the permit process by elimination of an EA, how is the process streamlined?

Finally, Judge Watanabe raised an interesting issue, the question of whether the state law  requiring agencies to adopt rules to process permits within a definite time, or they are deemed approved, would by impacted by the requirement of an EA/EIS, and whether outside vendors would have to be solicited by the Board.  Haw. Rev. Stat. § 91-13.5.  Counsel for the plaintiffs responded by suggesting that an EA/EIS would not add significantly to the processing time, and could be accomplished "in house" by the Board.

Although I am loathe to attempt a prediction in this case, the Hawaii Supreme Court (as evidenced by the recent "Superferry" opinion and a string of cases preceding it) has demonstrated it is more than receptive to arguments for a very low threshold for claims that a particular activity triggers a chapter 343 EA/EIS.  What the Supreme Court has not done is articulate any meaningful limitations on those triggers.  Will the ICA in this case?  Stay tuned. 

▪ Superferry EIS Case Summary pt. II: Throwing Open The Barn Door After the Horses Have Been Let Out

When does a person or organization have enough legal interest in an issue such that it can be a plaintiff in lawsuit?  Are there any systematic checks in place to keep the courts from being co-opted for political ends?  These were key issues raised by the Hawaii Supreme Court's opinion in the "Hawaii Superferry EIS case," Sierra Club v. State of Hawaii Dep't of Trans., No. 27407 (Aug. 31, 2007).  This post looks at the procedural issue of "standing," an issue that took up a majority of the court's 104-page opinion. 

An earlier post focuses on the substantive issue of whether the State DOT erred when it determined that improvements to Maui's Kahului Harbor necessary to the Superferry's Maui operation were within the categorical administrative exemptions to the Hawaii Environmental Policy Act, Haw. Rev. Stat. ch. 343, and therefore no Environmental Assessment was necessary.

▪ Superferry EIS Case Summary pt. I: Do Statutory Exemptions Mean Anything?

What purpose is served by the Legislature providing for an environmental assessment "exemption" if there are always exceptions to the exemption? 

That is the question raised by the Hawaii Supreme Court's opinion in the "Hawaii Superferry EIS case," Sierra Club v. State of Hawaii Dep't of Trans., No. 27407 (Aug. 31, 2007).

This post looks at the substantive issue in the case -- whether DOT erred when it determined that improvements to Maui's Kahului Harbor were within the categorical administrative exemptions to the Hawaii Environmental Policy Act, Haw. Rev. Stat. ch. 343, and therefore no Environmental Assessment was necessary. The Hawaii Supreme Court held DOT was wrong, and the improvements were not exempt.  The issue of "standing" took up a majority of the court's opinion, and I deal with that issue in this post.

I won't go into a blow-by-blow outline of the court's reasoning, which you can read for yourself, but will hit some key points that seem to have been overlooked so far in the analysis of the opinion.

I.  EA Needed, Unless Exempt

For certain triggering events, the government is required to produce an Environmental Assessment, unless the action has been declared "exempt."  As the court noted:

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 [for the Hawaii State Environmental Review Process], supra, at 9. If a triggering event occurs, an EA must be prepared, unless the program or project is declared exempt.

Slip op. at 7 (emphasis added).  There was no dispute that the improvements to the State's Kahului, Maui, harbor facility necessary for the Superferry's Maui service were a "trigger" to an EA, and the only question was whether the State DOT was correct when it declared the improvements fell within a categorical exemption. 

II.  Administrative Exemption Rulemaking

In chapter 343, the Legislature delegated to the State of Hawaii Environmental Council the authority to create rules for the processing of EA's and EIS's, and the authority to establish a process by which certain actions may be declared exempt because they will "probably" have little environmental effect:

(a)  After consultation with the affected agencies, the council shall adopt, amend, or repeal necessary rules for the purposes of this chapter in accordance with chapter 91 including, but not limited to, rules which shall:

. . . .

     (7)  Establish 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;

Haw. Rev. Stat. § 343-6(a)(7).  These rules are set forth in Haw. Admin. R. § 11-200-1 et seq. and are published here.  Those rules provide categorical exemptions for certain "classes of action," set forth in detail in Haw. Admin. R. § 11-200-8(A).

III.  Agency Determinations of Categorical Exemption & Standards of Review

The very existence of a statutory exemption regime implies that the Legislature contemplated there are circumstances when an agency can determine there is no need for an EA.  The common meaning of the word exemption suggests some form of immunity or release from some duty.  Thus, it would have made little sense for the Legislature to have empowered the council to create an exemption process were it not understood that whatever actions determined to be exempt would be, for the most part, immune from full-blown judicial review each and every time a third party complained that the categorical exemption was applied in error. 

Otherwise, if every exemption determination was subject to an in-depth de novo legal challenge on the basis that the agency was merely incorrect, then there would be as a practical matter no "exemption" at all.  Such an interpretation would instead represent only a shift in the forum from the agency to a court, and a shift in the players from the public to self-appointed litigants.

Thus, it seems like the issue posed by the case was not whether the Superferry merited its exemption because it probably would or would not have environmental effects, but whether DOT exceeded its authority when it determined Superferry fell within one of the categorical exemptions.  But that is not the way the issue was framed by the opinion.  In other words, the case was essentially decided on the standard of review.

The federal courts, in challenges to a federal agency's decision to declare a proposed activity exempt (also known as a Categorical Exclusion, or a "CATEX") from an EA under the National Environmental Policy Act, rely upon a fairly deferential standard of review: the decision may only be set aside if it is "arbitrary and capricious."  See, e.g., Marsh v. Oregon Natural Resources Council, 490 U.S. 360 (1989); Alaska Center for the Environment v. U.S. Forest Service, 189 F.3d 851 (9th Cir. 1999).  A deferential standard permits agencies, not courts, to make exemption decisions, and keeps the policy and technical discussions in the Legislature's intended fora (the agencies), with a court intervening only when it appears the agency has exceeded its authority or its discretion.

In contrast, the Hawaii Supreme Court's treatment of the standard of review -- refusing to recognize agency discretion in the determination of whether a proposed class of actions will "probably have minimal or no significant effects on the environment" -- has, in effect, transferred the legislative delegation of power to determine categorical exemptions from agencies to whomever can demonstrate "standing" in a lawsuit.  And, as we all know, the Hawaii Supreme Court's standing criteria are notoriously low and notoriously flexible, permitting practically anyone claiming "environmental" or "recreational" injury to sue; it is more of a technical hurdle for plaintiffs' lawyers to plead around than a realistic gatekeeping device.  More on the standing issue here.

IV.  Exempt...Unless Not Exempt?

The non-deferential standard of review applied by the Hawaii Supreme Court means that there is little standing in the way of a lawsuit whenever it can be alleged that the agency is merely incorrect.  An action that has been determined to be within a categorical exemption can be challenged when, in a paraphrase of the statute, it "probably will [not] have minimal or no significant effects on the environment."  But if  a categorical exemption can be easily challenged, is there really an exemption as the term is commonly used? 

In that vein, however, the Superferry opinion may simply be the terminus of a road the court started down long ago.  As the opinion itself referenced, the court has in earlier cases taken on the role of "qualitative" judge of exemption determinations.  See Kahana Sunset Owners Ass'n v. County of Maui, 86 Haw. 66, 947 P.2d 378 (1997).  In that case, the court held that an exemption was inconsistent with "the letter and the spirit" of chapter 343, which impliedly required agencies to not only generate classes of exempt activities, but to make a determination in every case that the proposed activity will "probably have minimal or no significant effects on the environment." 

What the Superferry opinion adds on top of that is a non-deferential standard of review virtually assuring that judges may in any case micromanage an exemption determination, with the decision as to whether to hold up an exempted action turned over to anyone who meets the court's low threshold of standing to sue.   

The end result of the Superferry opinion seems to be that the Legislature's exemptions don't appear, in the court's view, to exempt much of anything.

* * * * *

Sidebar: A commenter asks a good question --

wasn't the issue not that the DOT was wrong, per se, but that it didn't follow the proper exemption process and consider secondary impacts? that would probably have been suspect even under the federal court standard.

One of the problems is contained in the language of the exemption rules themselves.  That language is an "exception to the exceptions," and provides that actions which have been declared exempt "because [usually] they will probably have minimal or no significant effects on the environment" can be declared not exempt because they may nonetheless have significant impact in a particular case:

    All exemptions under the classes in this section are inapplicable 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 particularly sensitive environment.

Haw. Admin. R. § 11-200-8(B). This process is similar to federal agency treatment of categorical exemptions under NEPA, so it should not impact the deference level of the standard of review.   

To address your two questions. 

First, my read of the opinion wasn't that it was limited to process analysis, as it would have been under a deferential standard of review.  The court dealt with the qualitative validity of the DOT's decision, not just whether it followed procedures. The arbitrary and capricious standard means that a court doesn't really inquire whether an agency is correct or not, just whether it is in the ballpark and has otherwise remained within its legal constraints.  Statutes like HEPA are "study and disclose" regimes, not "zero tolerance" laws; they are risk measurement tools, not guarantees against environmental harm.  So the issue under a deferential standard of review is not necessarily the risk involved, but whether the agency has been provided enough information to analyze the risk before it makes its decision. 

The court's treatment of the issue begins on page 83 of the slip opinion, and focuses on the question of the scope of the exempted action: whether it was simply minor improvements to Kahului Harbor, or whether the exemption determination also was required to look at the bigger picture, the Superferry project (either in whole, or as it relates to Maui service).  The court avoided ruling that the project needed to be considered as a whole, relying instead on "secondary impacts," holding, as you note, that the record did not indicate that DOT considered secondary impacts.  See slip op at 90 - 101.  Would it have made any difference to the court if the record did show that DOT considered, but rejected, alleged secondary impacts? 

This goes to the second part of your comment, and you may be right that even under a deferential standard of review, DOT's exemption may have been insufficient.  We don't know, of course, how the Hawaii Supreme Court would apply an "arbitrary and capricious" standard to the record in the Superferry case and whether that would be enough to alter the outcome. 

 

▪ Links for "Progress in Protecting Property Rights Post-Kelo"

To my colleagues at the LINC conference in D.C., thank you for the opportunity to present the topic.  Here are links to the cases discussed:

• Applying Kennedy’s Kelo concurring opinion – 49 Wb, LLC v. Village of Haverstraw, 2007 NY Slip Op. 05506 (Jun. 19, 2007) (New York)
• Blight slight – Mint Properties v. Centene Plaza Redev. Corp. (SC88487, Jun. 12, 2007), (Missouri)
• How to plead Kelo – Goldstein v. Pataki, 488 F.Supp.2d 254 (E.D.N.Y. 2007), appeal filed (2d Cir. 2007)
• Blight slight, part II – Gallenthin Realty Dev., Inc. v. Borough of Paulsboro, 924 A.2d 447 (2007) (New Jersey) – blight means more than “not fully productive”
• Public use challenges not subject to Williamson County ripeness rules – Rumber v. District of Columbia, No. 06-7004 (D.C. Cir., May 25, 2007)
• Kelo applied to Euclidean taking – Western Seafood Co. v. United States, No 04-41196 (5th Cir., Oct. 11, 2006)
• Statutory limitations – Cowlitz County v. Martin, No. 34943-4-II (Aug. 14, 2007) (Washington) – county’s taking for “fish passage” not authorized by statute
• Procedural due process in eminent domain – Brody v. Village of Port Chester, No. 00 Ci. 7481 (HB) (S.D.N.Y., July 18, 2007), on remand from 434 F.3d 121 (2d Cir. 2005)
• Notice in eminent domain – Divine v. Town of Nantucket, 449 Mass. 499, ___ N.E.2d ___ (July 19, 2007)
• Kelo pretext SCOTUS cert petition – MiPro Homes, LLC v. Mount Laurel Township (No. 06-1345) (cert. petition filed - conference on 9/24)
• Is the statute of limitations in Tucker Act claims jurisdictional – John R. Sand & Gravel Co. v. United States (No. 06-1164) (cert. granted May 29, 2007)

▪ Planet Kauai Blogs the Kauai Superferry TRO Hearing

Charley Foster at Planet Kauai has written up the details of the Superferry TRO hearing on Kauai.  Check it out.

Update: Here's his detailed report.  The critical issues appears to be the 120-day statute of repose to institute challenges under Haw. Rev. Stat. § 343-7(a):

The plaintiffs seemed to view themselves as essentially in the same position as the Sierra Club in its recent successful injunction motion on Maui. However the court expressed its doubts and pointed out that, unlike the plaintiffs here, the Sierra Club filed an objection to the exemption granted Superferry by HDOT two and a half years ago and within the 120-day period required under section 343 of HEPA. Judge Valenciano pointed out that the supreme court's decision made special mention of this fact - explicitly placing the event triggering the clock on this time limitation back to the grant of the exemption - and wondered out loud whether the top court might have done so in order to give guidance to lower court judges on precisely this issue.

This seems like a pretty high hurdle.  Statutes of repose -- as contrasted with statutes of limitation -- are, generally speaking, much more strictly construed.  Missing the deadline usually means no case.  Section 343-7(a) provides:

Any judicial proceeding, the subject of which is the lack of assessment required under section 343-5, shall be initiated within one hundred twenty days of the agency’s decision to carry out or approve the action, or, if a proposed action is undertaken without a formal determination by the agency that a statement is or is not required, a judicial proceeding shall be instituted within one hundred twenty days after the proposed action is started.

Charley also writes: "The Judge postponed making a ruling until tomorrow afternoon. Parties are to brief the court by 11 tomorrow morning on the 120 day statute of limitation under 343-7. I predict plaintiffs won't get their tro. Lots of arguments were made in the 3 hour hearing and I'll be posting about it later on."

▪ More on Kauai Springs Zoning Permit Injunction

Hawaii Reporter posts "Kauai Springs: Still Open for Business," a story about the injunction preventing the County of Kauai from shutting down the island's only drinking water company while its appeal is pending.  Full story here.

▪ Preliminary Injunction in Kauai Zoning Permit Case

A story from today's Garden Island News, about the Kauai Springs case, reporting that the circuit court has granted the company's request for a preliminary injunction, preventing the County from putting Kauai Springs out of business while the appeal is being considered. 

The case is the appeal by Kauai's only bottled water company of the Kauai Planning Commission's denial of a request for a permit to use agriculturally zoned land for a small bottling facility (pictured).  The Planning Commission denied the request because it had "concerns" that the State Commission on Water Resource Managment and State Public Utilities Commission might regulate Kauai Springs, despite the fact that both agencies expressly told the Planning Commisssion that they had no problem at all.

A state judge has verbally approved a preliminary injunction to allow Kaua‘i Springs to continue operating a water-bottling plant in Koloa as it appeals a county decision to shut down the facility.

The island’s only water company that draws from a local spring is appealing a decision by Kaua‘i County Planning Commission in March denying its request for a use permit, a special permit and a Class IV Zoning permit.

* * * *

Robert Thomas, an attorney with Damon Key Leong Kupchak Hastert, representing Kaua‘i Springs, has said the commission doesn’t have the right to decide on water matters, only land matters.

The company requested approval of the commission permits after a competitor complained it conducted an industrial activity on agricultural lands, Thomas said.

Company owner Jim Satterfield said he secured federal, state and county approvals when he opened his business in 2004.

Full story here.

▪ More on Kauai Zoning Permit Case

The Star-Bulletin also reports on the Kauai Springs litigation, a case challenging the Kauai Planning Department's denial of a request to use land zoned "Agriculture" on grounds wholly outside its authority or jurisdiction:

The lawyer for Kauai Springs, however, said that water is a food like any other agricultural product and that closing down an agricultural business for commercially selling its product is ludicrous.

Robert Thomas, an attorney with Pacific Legal Foundation[*] representing Kauai Springs, said last week that the commission made a hasty decision, overstepped its bounds and made a decision on water rights, not land rights.

Both the state Public Utilities Commission and the State Commission on Water Resource Management wrote letters to the county, saying the company had met all their criteria.

Full story here.  [*Note - one correction: I'm representing Kauai Springs in my private capacity, and Pacific Legal Foundation is not presently involved.]