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Monday, June 16, 2014
Supreme Court Briefs in Bridge Aina Lea: Takings, Reclassification, and Orders to Show Cause
By Robert Thomas @ 7:26 PM :: 5583 Views :: Honolulu County, Development, Land Use

HAWSCT Briefs In Bridge Aina Lea: Takings, State Land Reclassification, And Orders To Show Cause

by Robert Thomas, Inverse Condemnation, June 16, 2014

Here are the merits briefs in an important case set for argument later this month in the Hawaii Supreme Court.

The litigation is a series of two lawsuits that originated in state court in the Third Circuit (Big Island), one an original jurisdiction civil rights lawsuit, the other an administrative appeal. The essence of the plaintiff's allegations is that the State Land Use Commission wrongfully amended the land use boundaries from urban to agriculture. Many years earlier, the LUC had amended the boundary to urban on the condition that the owner provide a certain number of affordable units by 2006. In 2008, the developer had not done so and the LUC ordered it to show cause why the land classification should not revert to agricultural. 

The State removed the civil rights lawsuit to U.S. District Court in Honolulu and promptly moved to dismiss, and this is the matter now before the Ninth Circuit. In the administrative appeal, the state court smacked the LUC pretty hard, and issued issued an order vacating the LUC's reclassification. The court concluded the LUC exceeded its statutory authority, and violated the developers' due process, fifth amendment, and equal protection rights. That's the ruling now on appeal in the Hawaii Supreme Court. More background on the case here

This appeal was transferred from the Intermediate Court of Appeals (hence the ICA caption on the briefs). Under Hawaii's appellate rules, after the briefs are filed, a party may ask that the appeal be moved from the ICA to the Supreme Court, thus skipping one level.

Here is the summary of the issues to be argued, from the Judiciary web site:

This appeal arises out of a dispute over the classification of approximately 1,060 acres of land in Waikoloa on Hawai`i Island. In 1989, the land was reclassified from the agricultural land use district to the urban land use district in order to allow for the development of a residential community. The land was reclassified subject to the condition that at least sixty percent of the units be for affordable housing. Over time, the land changed hands several times and the Land Use Commission (LUC) amended the affordable housing condition.

By 2005, the condition required Bridge Aina Le`a (Bridge) to construct no fewer than 385 affordable housing units, provide certificates of occupancy for all of these units by November 17, 2010, and submit a joint venture agreement and mass grading contract no later than November 17, 2006. In December 2008, the LUC issued an order to show cause why the land should not revert to the former agricultural land use classification. The LUC stated that it had reason to believe that Bridge and its predecessors in interest had “failed to perform according to the conditions imposed and to the representations and commitments made to [the LUC] in obtaining reclassification of the Subject Area and in obtaining amendments to conditions of reclassification.” The LUC specifically cited the affordable housing condition in the order, among others. Early in 2009, Bridge informed the LUC that it intended to assign its interest in the land to DW Aina Leʻa Development (DW) through an installment sale. After proceedings over the course of several years, the LUC issued an order reverting the land to the agricultural use district. Bridge and DW each appealed and their cases were consolidated.

The Circuit Court of the Third Circuit issued findings of fact, conclusions of law, and an order reversing and vacating the LUC’s order. The circuit court concluded that the LUC: (1) exceeded its statutory authority and violated HRS chapter 205; (2) violated HRS §§ 205-4(h), 205-17, and 205-4(g); (3) violated HRS chapters 91 and 205 and HAR chapter 15; and (4) violated Bridge’s and DW’s due process and equal protection rights.

On appeal, the LUC raises the following three points of error. First, the LUC asks whether the circuit court erred in equating the reclassification process set forth in HRS § 205-4(a) (Supp. 2012) with the reversion process set forth in HRS § 205-4(g) (2001). Second, the LUC asks whether the circuit court erred in considering matters not part of the record in violation of HRS § 91-14(g) (2012) and HRS § 91-9(e) (2012). Third, the LUC asks whether the circuit court erred in determining in an agency appeal that the LUC and individual commissioners violated Bridge’s and DW’s constitutional rights to equal protection and due process.

We've been covering the briefs and oral arguments in the related Ninth Circuit appeal (including the panel's request for supplemental briefing about Williamson County ripeness), and last week, just two days after arguments in that appeal, the panel said that it would wait for the outcome in the Hawaii court. What makes this interesting is that during arguments, one of the Ninth Circuit judges noted that the Hawaii Supreme Court has "the more interesting case," and "that I have to say, as I read Judge Strance's decision [the Hawaii trial judge], you guys [the plaintiffs] were right about ten ways from Sunday. If you lose this case, I'll be astounded." Oral Argument recording at 28:45. 

We'll have a better idea in a couple of weeks whether the Hawaii Supreme Court agrees. Stay tuned.

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