September 2006

Shoreline and beach issues in Hawaii are a sensitive and often heated topic.  It is natural that in an island state with 1,052 miles of coastline, people get passionate about beaches, especially when the economy relies in large part on images of sandy shores and beautiful ocean. 

But the very things that make Hawaii beautiful, just as naturally, also attract people who want to live near those beaches and ocean.  A recent story in the Honolulu Advertiser, Erosion hasn’t slowed shoreline construction, highlights many of the competing concerns when the desire to protect the shoreline runs into people’s homes: on one hand, the public is concerned about the perceived “loss” of sandy beaches, while on the other, the existing homes of shoreline property owners may be in danger, while other owners may be prevented by restrictive regulations from building upon their undeveloped property. 

That is not a recipe for compromise, or even reasoned discourse.  What I said in the July 2006 ABA Journal — in a story about seawalls and property rights in Florida — is just as true in Hawaii:

“It’s hard to find a middle ground on this,” . . . “Every time someone sneezes on the shoreline, it’s front-page news.”

In Hawaii, all beaches are public up to the “high wash of the waves,” as usually evidenced by the vegetation line.  This differs dramatically from the rule in other states, where the public beach ends at the mean high water mark. 

Several years ago, the Hawaii Supreme Court revisited the long-standing rule and “reinterpreted” a phrase (“ma ke kai“) to mean upper reaches of the wash of the waves, not mean high water mark.  The public-private boundary In Hawaii can therefore be much further mauka (inland) than in other states.  And as shorelines erode, this public-private boundary can move and encroach further on private property. Note: as shorelines accrete, the public-private boundary should, conversely, move further makai (seaward).  However, in 2003 the Hawaii Legislature enacted Act 73, which altered these age-old rules.  For a related post on a circuit court’s striking down of Act 73, go here.

Shoreline legal issues, like the shorelines themselves, are in flux.  The State Board of Land and Natural Resources recently revised its administrative rules regarding the definition of shoreline for certification and setback purposes to conform more closely to the common law definitions established by the courts.  These rules and other proposed regulations have not yet been challenged in the courts. 

My Damon Key colleague Sat Freedman has posted a very good primer on the subject of Shorelines, Setbacks, & Seawalls, detailing the different definitions of “shoreline” (setback vs public-private boundary), how Hawaii’s counties handle the administration of setbacks, and how seawall construction and other property protection measures may be impacted by restrictive regulation. 

In the back-and-forth on the issue, the question of the property rights of the owners of shoreline property should not get pushed aside.  The Fifth Amendment to the U.S. Constitution and article I, section 20 of Hawaii’s Constitution provide that private property may not be taken for public use without just compensation.  Property may be taken by overbearing regulation as well as outright confiscation (also known as a “regulatory taking” or “inverse condemnation” — so yes, you have reached the right blog), and the issue of whether the government has gone too far and crossed the line between permissible regulation and confiscation is sure to arise again.  The public often clamors for expansion of the public beach, with little to no concern shown for the property owners who are called upon to sacrifice their property upon the altar of the “public good” usually with no compensation. 

Those fortunate enough to own beachfront property — whether they are recent purchasers or long-time local residents (the law makes no distinction) — must vigorously protect their rights to insure they alone are not forced to bear the cost of a desired public benefit.Continue Reading ▪ Protecting Property Rights in Beachfront Land

More on Leslie v. Board of Appeals, 109 Haw. 384, 126 P.3d 1071 (2006), discussed previously in this post.

The property owner’s subdivision application included a portion of its parcel within the shoreline Special Management Area (SMA), even though all of the construction was planned outside the SMA.

One of the major purposes of Hawaii’s Coastal Zone Management Act (CZMA) is to encourage development mauka (upland) of the SMA, the land closest to the ocean.  The SMA boundary is the critical line in the sand – a property owner need only seek a SMA permit for “development within the SMA” as required by the CZMA if it plans development makai (oceanward) of this boundary.  It appeared the property owner proposed development as contemplated by the CZMA — all of it was mauka of the SMA line.

The county determined that the subdivision of Kiilae’s land was not “development within the SMA” since no actual construction was proposed within the SMA, and did not require the property owner to apply for a SMA permit.  However, a portion of the property being subdivided was within the SMA, even though no actual construction was planned on that parcel.

The issue before the supreme court was whether the subdivision of a parcel, a portion of which is within the SMA, requires a SMA permit.  The court held that because the owner sought subdivision of the entire parcel — its application included a portion of that parcel which was within the SMA — the impact of the entire proposed subdivision must be taken into account when determining whether a permit must be sought. 

This result, like the subdivision issue, was based on the language of the statute.  The property owner’s subdivision application included property within the SMA, and the statutory definition of “development” includes subdivision.  Once that fact was established, the result was consistent with the court’s reliance on plain stautory language.  It would have been another matter entirely, however, if the SMA portion of the property had first been subdivided out, and no part of the subdivided property was within the SMA, even if the act of subdivision were to have some effects on property within the SMA.

Thus, the second lesson that can be taken from the Leslie case is that a property owner must pay close attention to what property is included in an application, because it will be held to it. 

Disclosure: I filed an amicus brief in this appeal, supporting the position of the property owner and the county.

   Continue Reading ▪ SMA: The Line in the Sand

“When all else fails, read the instructions.” 

That old adage is the first lesson to be taken from the Supreme Court of Hawaii’s decision earlier this year in Leslie v. Board of Appeals, 109 Haw. 384, 126 P.3d 1071 (2006). Disclosure: I filed an amicus brief in that case, supporting one the arguments of the property owner and the county on a different issue. 

The case began when Kiilae Estates asked the County of Hawaii to approve a subdivision of its land.  The county subdivision code contains a long list of information that “shall” be submitted with preliminary subdivision plats.  The long-standing practice of the county Planning Department, however, was to defer submission of these materials until after the review of the preliminary subdivision plans.  It made more sense, the Department claimed, to wait until later in the process when the developer’s plans are more complete, and thus the information would be more useful to planners.    Continue Reading ▪ Court to Government: Read the Statute

What happens when a religious institution claims that local land use regulations impermissibly burden its First Amendment rights to freedom of religion?  A recent case decided by the Ninth Circuit, Guru Nanak Sikh Society of Yuba City v. County of Sutter, 456 F.3d 978 (9th Cir. 2006) (Aug. 1, 2006), illustrates the conflict. 

After its proposal to develop a temple on one parcel was denied, a Sikh group sought a conditional use permit (CUP) from Sutter County, California, to construct a temple on another parcel designated for agricultural use.  The County planning department recommended approval, with a series of conditions designed to mitigate the proposed temple’s impact, such as limiting the number of people attending the temple to 75, and several design modifications to the building.  The Sikhs accepted the conditions. 

After a public hearing at which members of the public opposed the CUP, mainly on the basis of noise, traffic, interference with neighboring agriculture operations, and predicted lowering of property values in the area, the county planning commission narrowly approved the application, subject to the conditions.  Several neighbors appealed to the county Board of Supervisors which denied the CUP. 

The Ninth Circuit first held that the denial of the CUP was a “substantial burden” on the temple’s free exercise of religion.  The Religious Land Use and Institutionalized Persons Act of 2000 (RLUIPA) thus applied, and required the government to show that the burden on religion was outweighed by a “compelling governmental interest.”  In other words, before the government may deny a religious institution a specific land use permission, it must have a very good reason, and be able to prove it.  In this instance, the court found that the County’s denial of the temple’s first request, combined with the County’s denial of the CUP even after conditions to mitigate impacts had been accepted by the Sikhs, was a substantial burden on their religious freedom:

Because the County’s actions have to a significantly great extent lessened the prospect of Guru Nanak being able to construct a temple in the future, the County has imposed a substantial burden on Guru Nanak’s religious exercise. 

The County did not offer any countervailing “compelling interests,” and did not even attempt to meet the burden of persuasion imposed on it by RLUIPA.  The Ninth Circuit also determined that RLUIPA was a valid exercise of Congress’ power to enforce the Fourteenth Amendment, and its power to enforce the Free Exercise Clause of the First Amendment. 

This case shows that RLUIPA continues to be a powerful tool to prevent land use authorities from undue interference with a religious use of property.

    

   Continue Reading ▪ Religious Land Use Trumps Local Permit Denials

The Hawaii Supreme Court recently decided a case that provides some guidance to those who practice in the often ill-defined space between executive agencies and the courts, a place land use lawyers and their clients frequently find themselves.

In Hui Kakoo Aina Hoopulapula v. Board of Land and Natural Resources (Sep. 21, 2006), the court confirmed that in order to properly demand a “contested case” (a trial-like administrative hearing) and thus preserve a right to judicial review of agency action, the party demanding the hearing must follow the agency’s rules to request it, even if it appears futile to do so.

In that case, the electric company asked the State Board of Land and Natural Resources for a long-term lease of brackish water from a Big Island aquifer for “industrial use and fire suppression” for a generating plant. 

Parties who have long objected to the generating plant objected to the proposed lease and orally asked the Board for a contested case at a public hearing the Board scheduled on the electric company’s request.  The Board rejected the oral request for a contested case and issued the lease after a public auction.  The objectors did not file a written request for a contested case with the Board, as required by the Board’s rules of procedure.

The objectors then sought judicial review in circuit court of the issuance of the lease, and the denial of the contested case.  Circuit court review of administrative agency action is limited to appellate review of the administrative record produced after a contested case.  Thus, if no contested case is held in the agency, the circuit courts lack subject matter jurisdiction. 

The circuit court, finding that no contested case was conducted by the Board, determined it lacked jurisdiction, and the supreme court affirmed, never reaching the substantive issues raised by the objectors.  Lack of jurisdiction prevented the courts from considering the case at all.

The key holding of the case is that a proper written demand for a contested case is a jurisdictional prerequisite to judicial review.  Even when the agency has denied an oral demand.  The court held that the agency’s “no” may not have really meant “no,” and the objectors may have been able to change the agency’s mind with a written demand for a contested case. 

No demand for a contested case means no contested case is conducted, and no contested case means that a party disappointed with the result of agency action cannot run to court and seek reversal.

    Continue Reading ▪ Contesting Contested Cases

At a recent conference I attended, one of the speakers, an eminent scholar of constitutional law and frequent US Supreme Court advocate, suggested that the Court’s decision in Kelo was the correct result because it allows the decision on whether a taking of private property is “for public use” to be made in the fora where it should be made, state legislatures and state courts. 

In Kelo, as you may recall, a bare majority of the Court held that the “for public use” language in the Fifth Amendment’s Takings Clause does not permit the federal courts to review the substantive validity of an exercise of eminent domain.  In other words, the reasons advanced by the condemning authority are nearly immune from federal judicial review. 

The resulting firestorm in state legislatures and local governments, and the state court decisions in Hathcock and City of Norwood, the argument goes, are the natural result of the US Supreme Court avoiding injecting itself into an area the federal courts have no business being.  Thus, Kelo shows that the system works the way it should. 

While that proposition is not entirely disagreeable (and I agree it seems to have been the impetus for the Court’s majority), it does not appear to be consistent with the Court’s approach to other rights secured by the Bill of Rights. 

For example, would it be surprising if a US District Judge declined to hear a challenge that a local ordinance violated the First Amendment’s Free Speech clause, holding that such decisions should be made in state courts, or local legislatures?  You bet it would.

However, property owners who claim that state or local action violates the Takings Clause receive just that sort of treatment. 

Whether it is the bizarre “ripeness” doctrine from the Williamson County case (which tells a property owner that she must seek redress for state claims in state courts first, but that if she loses there, she is barred from asserting her federal claims in federal court); or the Kelo decision in which the federal courts have washed their hands of the “for public use” language in the Fifth Amendment, it seems strange and inconsistent for certain constitutional rights to have priority status, and the federal courthouse door thrown wide open for those, but slammed shut for others.

   Continue Reading ▪ Isn’t Property a Constitutional Right?

A Hawaii circuit (trial) court, as reported here, has declared that “Act 73,” (codifed here and here) which determined that certain land “accreted” on Hawaii’s shorelines is “public land,” is an “uncompensated taking” of private property. 

The court held that the Act was a “sudden change in the common law,” and prevented the littoral owner from registering the property or quieting title.

The common law doctrines of accretion and erosion were generally uniform, and the littoral property owner took the bitter (erosion) with the sweet (accretion): if her property naturally washed away, she lost it; but, conversely, if land naturally accreted on her property, it was hers.  One of the incidentals of owning property next to the ocean or stream.

Act 73 radically altered that balance, determining as a matter of legislative fiat that the State owned accreted land, while not disturbing the usual rules of erosion.  Under Act 73, the littoral owner could not secure title to accreted land, yet continued to lose title to eroded land. 

In other words, “heads the State wins, tails you lose.”   

     Continue Reading ▪ Regulatory Taking of Accreted Beachfront Land

I have recently completed the Hawaii chapter in a compendium on the eminent domain laws of each of the fifty states entitled (not surprisingly): Law and Procedure of Eminent Domain in the 50 States.

Each chapter of this publication is devoted to a summary of a single state’s eminent domain laws, and provides the basic tools for understanding each jurisdiction’s condemnation law, including who has the power to take, sources for condemnation authority, the rules of just compensation, and the procedural aspects of eminent domain litigation.

The compendium is sponsored and published by the ABA Section on Litigation (Committee on Condemnation, Zoning and Land Use). 

The individual state chapters, mine included, are posted for download for ABA members here. 

    Continue Reading ▪ Eminent Domain Compendium Published

The University of Hawaii Law Review has published an article on vested rights and development agreements, authored by me and my Damon Key colleagues Ken Kupchak and Greg Kugle.

“Vested rights” is a body of law designed to protect property owners who rely upon government assurances — often in the form of development permits — if the government subsequently attempts to change its mind, or revoke the issued permits.

The title of the article is Arrow of Time: Vested Rights, Zoning Estoppel, and Development Agreements in Hawaii, and the citation is 27 U. Haw. L. Rev. 17 (2004).

Although the article carries a date of 2004, it was published in February 2006, since the U.H. Law Review was a tad behind schedule.

Here’s a summary of the article, from its Introduction:

The modern land regulation and development process is a complex, lengthy, expensive, and very often uncertain undertaking.  The uncertainty is compounded by the ability of the government to change the regulations applicable to property after the owner has begun planning or building but has not completed construction.

Attempting to balance these competing interests, the courts have responded by creating the doctrines of vested rights and zoning estoppel. These closely-related principles permit the government to retain flexibility in land use planning only if a property owner has not proceeded sufficiently along the development path that it would be unconstitutional or unfair to prevent it from completion.

Once an owner’s rights have “vested,” the owner possesses development rights…if the government is estopped, it is prevented from applying any future incompatible, albeit legal, regulations to the property.  Vested rights and zoning estoppel thus counterbalance the government’s unfettered ability to use its police power to regulate land uses, providing some insulation of the land development process from shifting political winds.

This Article details the development of the doctrines by the Hawai’i courts and the application of vested rights and zoning estoppel in Hawai’i land use litigation. It also discusses remedies, and analyzes alternatives to vested rights and zoning estoppel litigation such as development agreements, land swaps, and transferred development rights.

It is a fairly comprehensive treatment of vested rights and zoning estoppel law in Hawaii, and compares our courts’ approach with that of fellow jurisdictions.  It also suggests some areas where the law can be filled out more fully in Hawaii. 

Finally, it deals with the interplay between development agreements and vested rights.  You can’t understand one without understanding the other.   

If you’d like a reprint of the complete article, drop me an e-mail.

    Continue Reading ▪ Law Review Article on Vested Rights and Development Agreements

I’m on the faculty of a legal education seminar titled “Eminent Domain: Legal Update and Practical Tips” scheduled for Octber 12, 2006.  Details here.  Download the brochure here.

Also on the faculty are some stellar individuals in the property law and condemnation business: Professor David Callies, valuation expert Jan Medusky, and attorney James K. Mee. 

I will be addressing three subjects:

  • How Recent Case Law and Legislative Developments in Eminent Domain Law Will Impact You (with Prof. Callies)
  • Understanding Just Compensation (with Jan Medusky)
  • The Debate Between Government Rights and Property Owner Rights (with Jim Mee).

We will be dealing, among other topics, with the impact of Kelo and the legislative reaction to the opinion (unfortunately, none so far in Hawaii).  While a background knowlege of eminent domain concepts is helpful, it will not be necessary in order for an attendee to get a lot out of these sessions.

Update – October 12, 2006: materials from this seminar posted here.

   Continue Reading ▪ Eminent Domain seminar – October 12