Here’s the latest in a case we’ve been following for a long time.

As we previously noted, the Hawaii court of appeals affirmed a trial verdict that the just compensation owed to littoral property owners for the State’s regulatory taking of small portions of accreted beach is zero.

Last week, the Hawaii Supreme Court heard oral arguments. Here’s the video (sorry, can’t embed it here). Worth watching, if only because questions of just compensation and how it is calculated rarely are presented to this court (which is a frequent flyer in regulatory takings cases).

Here’s a description of the case and issues from the Hawaii Judiciary:

Petitioners Maunalua Bay Beach Ohana 28, Maunalua Bay Beach Ohana 29, and Maunalua Bay Beach Ohana 38 brought an inverse condemnation action against the State of Hawai‘i in 2005. At that time, they argued that the State effected a taking of accreted lands via Act 73 of 2005. In 2009, the Intermediate Court of Appeals (ICA) held that Act 73 “effectuated a permanent taking of littoral owners’ ownership rights to existing accretions to the owners’ oceanfront properties that had not been registered or recorded or made the subject of a then-pending quiet-title lawsuit or petition to register the accretions.” Maunalua Bay Beach Ohana 28 v. State, 122 Hawai‘i 34, 57, 222 P.3d 441, 464 (Ct. App. 2009).

On remand from the ICA, Petitioners sought just compensation for the alleged temporary taking of their accreted lands between 2005 and 2012. At trial, the circuit court concluded that $0 was just compensation for the alleged temporary taking of the accreted land and no nominal damages should be awarded to the petitioners. It also determined that the petitioners were not entitled to attorney’s fees.

The ICA affirmed the circuit court’s decision. With regard to attorney’s fees, the ICA held that the petitioners’ “claim for attorneys fees against the State for obtaining declaratory relief is barred by sovereign immunity.” The ICA further held that the Ohanas were not entitled to attorney’s fees under the private attorney general doctrine.

In their application for certiorari, the petitioners argue that the ICA erred in affirming the circuit court’s award of $0 in just compensation with no nominal or severance damages. Petitioners also contend that the ICA erred by concluding that sovereign immunity bars an award of attorney’s fees, and that they would not be entitled to fees under private attorney general doctrine. The State contends that the ICA did not err in affirming the circuit court’s award of $0 in just compensation or declining to award nominal damages to petitioners. It also argues that the ICA correctly held that sovereign immunity bars petitioners’ claim for attorney’s fees, and that even if it did not, petitioners would not be entitled to attorney’s fees under the private attorney general doctrine.

We watched live, and have a couple of thoughts:

• Justice McKenna’s questions indicate she recalls that in an earlier regulatory takings case, the court concluded that even “speculation value” was enough to place a regulatory takings claim outside a Lucas wipeout analysis, an indicator that in this court’s view, property always has value, even if it has no use. Is that enough to say the owners here were entitled to, at the very least, nominal just compensation?
• Does obtaining a decision holding the State to its constitutional obligation (after which the State repeals the unconstitutional statute) qualify the plaintiff for fee recovery from the State under the private attorney general doctrine, even where the adjudicated compensation is zero? We think so, because suing to keep the State in line when it has acted beyond its authority is exactly the kind of thing that the Attorney General should do (but didn’t here, because it has been too busy defending the State’s action). What about the advocate for the State who argued that there was no constitutional wrong here, because of the zero compensation verdict (the notion that the Takings Clause does not prohibit takings, only uncompensated takings)? The fact that the State withdrew the offending statute after the plaintiffs won the takings claim seems to contradict that argument because at the heart of it, the court ruled that the State should have used its eminent domain power to take future accreted land, and not the police power.

Stay tuned. We’ll continue to follow along and will post the court’s opinion when issued.Continue Reading Hawaii Supreme Court Arguments: Is Just Compensation For Even A Small Slice Of A Primo Hawaii Beach Zero?