Posts categorized "▪ Property tax"

April 30, 2008

New Article Published: "Because They Can: Judicially Excising the People from the Definition of 'County' in the Hawaii Constitution"

Slgn_frontpage The ABA Section on State & Local Government has published my article "Because They Can: Judicially Excising the People from the Definition of “County” in the Hawaii Constitution" in the State & Local Government Law News (Spring 2008). 

The article is a summary and analysis of County of Kauai ex rel. Nakazawa v. Baptiste, 165 P.3d 916 (Haw. 2007), the 3-2 decision in which the Hawaii Supreme Court creatively overcame justiciability problems to hold that the term "the counties" in the Hawaii Constitution's provisions regarding property taxes means "county councils."  In doing so, the court invalidated a voter-enacted Kauai charter amendment that would have rolled back property taxes to 1998 levels, and set a yearly cap on increases.  The dissenting justices accused the majority of "subverting the judicial process," and would have dismissed the case for lack of standing. 

For those of you who are not section members and don't receive a copy in the mail, the article is reposted here.  More on the case, including the majority and dissenting opinions, a Wall St. Journal story about the decision, and the briefs and oral arguments, is posted here.   

January 04, 2008

Commentary on Kauai Real Property Tax Charter Amendment Decision

California's Flash Report posted my op-ed "Hawaii Government Sues Itself to Quash Property Tax Relief -- And Wins" about the Kauai real property tax charter amendment appeal

January 02, 2008

2007 in Review: Hawaii Supreme Court Rewrites the Constitution

In August, by a 3-2 vote, the Hawaii Supreme Court determined that the term "county" in article VIII, section 3 of the Hawaii Constitution means "county councils."  The majority held that only county councils may establish property tax policies, and that voters of the county have no power to do so directly by amending their county charter. 

The majority first determined that it was perfectly acceptable for government officials to be both the plaintiffs and the defendants, and sue each other in a friendly lawsuit in which the County Attorney represented both sides.  The majority also approved of the county council hiring a private law firm to prosecute the case in which it was a defendant, with $250,000 of public funds.

The dissenting justices accused the majority of "subverting the judicial process" by ignoring standing and justiciability requirements by rearranging the parties after oral arguments, and by attributing the arguments of the defendants to the plaintiff.  Disclosure: I had a dog in this hunt, as I was counsel for the homeowners/intervenors who challenged the collusive lawsuit. 

Here are all the inversecondemnation.com posts on the case: opinion, briefs, oral argument transcripts, commentary, and the Wall Street Journal's take on the case.

October 28, 2007

▪ SLAPP Suits, Ballot Measures, and Curbing Eminent Domain Abuse

A "SLAPP suit" is a "strategic lawsuit against public participation," and many states have statutes designed to thwart retaliatory lawsuits to protect the public's willingness to exercise First Amendment rights.  For example, California's statute defines SLAPP suits as:

lawsuits brought primarily to chill the valid exercise of the constitutional rights of freedom of speech and petition for the redress of grievances.

Cal. Code. Civ. Proc. § 425.16 (emphasis added).  Hawaii's anti-SLAPP statute is codified at Haw. Rev. Stat. ch. 634F, and defines a SLAPP suit somewhat differently than California:

"SLAPP" means a strategic lawsuit against public participation and refers to a lawsuit that lacks substantial justification or is interposed for delay or harassment and that is solely based on the party's public participation before a governmental body.

Haw. Rev. Stat. § 634F-1 (emphasis added).

In City of Riverside v. Stansbury, Nos. E040125 & E040973 (Cal. Ct. App. Oct. 12, 2007), the California Fourth District Court of Appeals held that a lawsuit by a local government against the proponents of an initiative was not an anti-SLAPP suit.  The court held that the lawsuit, which sought a declaratory judgment that an initiative designed to curb eminent domain abuse was not a proper subject for voters.  The lawsuit was not a SLAPP because it was "directed not at protected conduct, as required under the anti-SLAPP statute, but rather, at the validity of the proposed initiative." 

After citizens placed an initiative on the local ballot that would have curtailed the city's eminent domain power, the city sued the proponents of the measure.  The initiative was apparently in reaction to the US Supreme Court's decision in Kelo v. City of New London, 545 U.S. 469 (2005), which held that the use of eminent domain for "economic development" did not always violate the Fifth Amendment's Public Use Clause. The measure mandated that "neither this City nor any of its subdivisions shall use eminent domain to take private property without the consent of the owners to be used for economic development."  It also limited how the City could dispose of property taken by eminent domain, and prohibited the City from undertaking "a contractual obligation to use its powers of eminent domain."  More on the case and some interesting background from Eminent Domain Watch here.

The City sued the person who submitted the measure as well as the group that backed it, claiming that the initiative was beyond the power of the city's voters, since in California initiatives are limited to matters of local concern, and eminent domain is a matter of statewide concern.  In response, the defendant filed an anti-SLAPP motion, which the trial court granted. 

The court of appeals reversed, holding that the lawsuit went to the validity of the initiative, and did not arise out of protected first amendment activity:

By its declaratory relief action, the City was simply asking for guidance as to the constitutionality of the proposed initiative. Indeed, the City did nothing to limit respondents’ activities in connection with the initiative, nor did the City, by its action, otherwise impact respondents’ First Amendment rights.  Moreover, it was proper for the City to initiate its declaratory relief action as a means of
disputing, in a preelection challenge, the validity of the initiative.

Slip op. at 11.  Anti-SLAPP statutes are designed to prevent lawsuits against citizens that are meant to chill expression of first amendment rights, and it certainly seems like the City's lawsuit would have that effect -- it would take a very committed citizen to propose an initiative if she knew that by doing so, she would be subject to being named as a defendant.  The court held that the lawsuit did not implicate Stansbury's petition rights because "there is no constitutional right to place an invalid initiative on the ballot.  Slip op. at 13 (emphasis original).  This seems like circular logic because it assumes the initiative is invalid, the very cause of action that forms the basis for the City's complaint. 

What appears to have driven the court's result is its belief that if the lawsuit were to be barred by the anti-SLAPP statute, local governments would not be able to bring pre-election lawsuits challenging the constitutionality of initiatives.  Slip op. at 2 ("if the trial court’s ruling is allowed to stand, no one could ever challenge an initiative’s constitutionality prior to the election").  Why this is a bad thing is not explained.      

Maybe they should just move to Hawaii: the Stansbury case is reminiscent of the recent "Ohana Kauai" property tax charter amendment case, County of Kauai ex rel. Nakazawa v. Baptiste, 115 Haw. 15, 165 P.3d 916 (2007).  In that case, when county officials claimed to doubt the constitutionality of a voter-approved charter amendment capping property taxes, they didn't sue the proponents of the measure as in Stansbury.  Instead, they sued themselves.  When government officials sue each other to strike down a law they disagree with, of course no one is going to raise an anti-SLAPP defense.  The County Attorney (Nakazawa) sued the Mayor (Baptiste), the County Council and the County Finance Director, seeking a declaratory judgment that the charter amendment was beyond the power of county voters.  The Hawaii Constitution delegates property tax power to "the counties," and the county officials argued that term meant "county councils."  The Hawaii Supreme Court agreed after first holding that the "county vs. county" lawsuit was procedurally proper. 

Hat tip to the California Public Law Blog for bringing the Stansbury case to our attention.  Tom Caso adds his thoughts about the decision in his blog post "City’s pre-election challenge to initiative not a SLAPP."

September 27, 2007

▪ Court Strikes Delegation of Eminent Domain and Reimbursement to Private Party

You can read the court's Findings of Fact, Conclusions of Law, and Order here.

I won't be commenting on this decision since my colleagues Ken Kupchak, Mark Murakami and I are the attorneys for the property owner, but the statement of the family that owns the land is below.

# # # #

Circuit Judge Ronald Ibarra has decided in favor of a local Kona family, ruling that the County of Hawaii illegally sold its power of eminent domain to Scottsdale, Arizona-based luxury developer Hokulia.  In the County-Hokulia Development Agreement, the County allowed Hokulia to control what property would be seized, permitted Hokulia's lawyers to threaten the Richards Family and its neighbors, and forced the County to bring lawsuits against its own citizens to take their property. 

The court ruled that the County-Hokulia Development Agreement violated state law because it illegally transferred the County's power to take the property by eminent domain to Hokulia.  The Richards Family's property was targeted by the developer for its "Hokulia Bypass," a road connecting the "luxury golf course real estate development project" to Mamalahoa Highway. 
 
The court struck down the first of the County's multiple attempts to take a portion of the Richards Family's property for the Bypass because the County "did not have a proper public purpose."  The court found "[i]f the government attempts to delegate its power of eminent domain to a private party in an agreement whereby the developer controls what property is taken and pays for all expenses, and the private party is able to demand the government institute eminent domain proceedings against other private property owners, then the attempted delegation is illegal and void." 
 
The court also invalided the portion of the County-Hokulia agreement that would have required the Richards Family and their Onouli neighbors to reimburse Hokulia for the cost of the road. 
 
Under the judge's ruling, however, the County will be able to build the Bypass since a second attempt to take the property did not suffer the same legal defects as the first.  The court awarded the Richards Family over $200,000 in compensation for the taking of their land.
 
"These cases were never about whether another road is needed in Kona," said Richards Family spokesman Charles Coupe.  "Our family fought for our rights and the rights of our neighbors because we couldn't believe that the County could sell governmental powers to the highest bidder.  It didn't seem right that the County could agree to allow Hokulia to take our property for Hokulia's road, and then pass back the cost of the road to us." 
 
After Hokulia directed the County to start eminent domain process in October 2000, the Richards Family called upon Kenneth Kupchak, Robert Thomas, and Mark Murakami, the legal team at Honolulu-based Damon Key Leong Kupchak Hastert (www.hawaiilawyer.com), to protect their rights in court. 
 
"It has been a long fight, but it has been worth it," said Coupe, "Our family knew this wasn't right, and we would stand up for our rights and our neighbors' rights again, if necessary."
 

September 05, 2007

▪ Getting the Government They Deserve — "Ohana Kauai" Solution Proposed

"In a democracy, the people get the government they deserve" states the old dictum.  That pretty much sums up one response to The Wall Street Journal story This Side of Paradise about the "Ohana Kauai" property tax charter amendment case.  A WSJ reader proposes: "It's Simple: Vote Them Out."

The need to restrain local taxation in Kauai may be compelling; but there is another, and undiscussed, option. Vote out the recalcitrant mayor and/or governing council and replace them with officials for whom controlling the level of taxation is a high priority. Who knows? Faced with the broader issues of local government, Ohana Kauai's voters may be able to impel all manner of improvements in local policy and administration.

Full story here

He's got a point, of course.  Removing unresponsive elected officials from their positions, either by voting for the other guy in the next election or by recall (the Kauai Charter provides in Article XXVII for the recall of any elective officer serving a four-year term) theoretically is always an option to the people of Kauai dissatisfied with their representatives' judicial engineering of the Baptiste litigation (with the taxpayers' money, no less).  The theory, however, is far removed from the reality, especially in incumbent-friendly Hawaii, where elected officials possess a distinct advantage and rarely vacate their offices involuntarily. 

Perhaps de Tocqueville's statement that "[a] democratic government is the only one in which those who vote for a tax can escape the obligation to pay it" is more appropriate.

September 01, 2007

▪ National Spotlight on the "Ohana Kauai" Property Tax Charter Amendment Case — Wall Street Journal: "This Side of Paradise"

The Wall Street Journal posts "This Side of Paradise," about the "Ohana Kauai" property tax Charter Amendment case, County of Kauai ex rel. Nakazawa v. Baptiste, No. 27351 (Aug. 6, 2007). 

In that 3-2 decision, the Hawaii Supreme Court over a vociferous dissent, held that friendly government officials have standing to manufacture lawsuits against each other to challenge a charter amendment enacted by a vote of the people, and that the Hawaii Constitution delegates property tax power exclusively to "county councils."

The Pacific Legal Foundation's Robert Thomas stepped in, arguing the case before the Hawaii Supreme Court on Feb. 15, 2007, on behalf of four property owners. Honolulu attorney Gary Slovin, for the county, countered that allowing people to vote on taxes would create "chaos." A few members of the County Council publicly agreed. The Hawaii Government Employees Association, fearing government jobs held by union members might be cut, issued a statement to say that giving residents power over taxes was an "absurd proposition."

Full article here.  One WSJ reader's response here.

August 25, 2007

▪ Article on the Kauai Property Tax Decision

Kauai's newspaper posts "Ohana amendment decision the result of classic Hawaii politics," a commentary by Walter Lewis, one of the Kauai homeowners who intervened in the County vs. County lawsuit, an effort by county officials to strike down a voter-enacted property tax relief charter amendment.

The typical lawsuit involves a real controversy between the plaintiff and the defendant or defendants with actual or threatened injury to the plaintiff. These fundamental conditions did not exist in the Ohana measure case. Ever. The plaintiff and all the defendants wanted the same result and, as we all know, had no dispute among them and prosecuted this lawsuit with over $250,000 of taxpayer money to get political cover. And the County was unable to point to anything in the Ohana measure that was or would be injuring it.

Complete commentary here.  [Note: I represent the homeowners.] 

Sunday update:  Charley Foster's letter to the editor responding to the commentary.

August 22, 2007

▪ Podcast: Radio Interview on Kauai Property Tax Charter Amendment Case (mp3)

My thanks to Sandy Brodie and Karlos deTreaux for having me on their "Kauai Soapbox" program today on KKCR-FM 92.7, where we discussed the "Ohana Kauai" property tax charter amendment case and recent decision by the Hawaii Supreme Court.

Here's a one-hour podcast of the show (52mb mp3).

August 20, 2007

▪ Kauai Property Tax Case: KKCR Radio

Tune in on Tuesday, Aug. 21, at 4 pm Hawaii Standard Time to the "Kauai Soapbox" radio show on radio KKCR (live streaming audio available). 

I'll be a guest, speaking about the "Ohana Kauai" property tax charter amendment case.  Hope you can listen in.

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