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Tuesday, December 27, 2016
Beachfront Property: Hawaii Supreme Court Considers Wipeout Regulatory Taking
By Robert Thomas @ 11:19 PM :: 1560 Views :: Land Use

HAWSCT Considering Wipeout Regulatory Takings: What Is An Economically Beneficial Use?

by Robert Thomas, InverseCondemnation, December 27, 2016

Heads up for a case to watch being argued next week in the Hawaii Supreme Court.

This is a regulatory takings case that's been up to the Hawaii appellate courts before (see here). In that opinion, the court of appeals correctly held that a property owner raising a regulatory takings case has no obligation to change the law to ripen her claims. [Note: we filed an amicus brief in that appeal in support of the property owner.] The court vacated the trial court's dismissal, and remanded the case for trial.

The backstory to that case is long and complex.It involves beachfront property, the relationship between planning and zoning, and what exactly "economically beneficial use" means under the U.S. Supreme Court's Lucas test for wipeout takings, especially in the context of what instructions that juries are given. [Another note: we represented a neighboring property owner in a similar case that ended successfully.]

Rather than recount that long story, we've copied the preview of the arguments from the Hawaii Judiciary's web site, and have posted the briefs below:

No. SCAP-15-0000599, Thursday, January 5, 2017, 11:15 a.m.

DOUGLAS LEONE and PATRICIA A. PERKINS-LEONE, as Trustees under that certain unrecorded Leone-Perkins Family Trust Dated August 26, 1999, as amended, Respondents/Plaintiffs-Appellants/Cross-Appellees, vs. COUNTY OF MAUI, a political subdivision of the State of Hawai i; WILLIAM SPENCE, in his capacity as Director of the Department of Planning of the County of Maui, Petitioners/Defendants-Appellees/Cross-Appellants.

The above-captioned case has been set for argument on the merits at:

Supreme Court Courtroom
Ali`iolani Hale, 2nd Floor
417 South King Street
Honolulu, HI 96813

Attorneys for Petitioners:

Brian A. Bilberry and Thomas W. Kolbe, Deputy Corporation Counsels

Attorneys for Respondents:

Andrew V. Beaman, Leroy E. Colombe, and Daniel J. Cheng

NOTE: Order granting Application for Transfer, filed 06/29/16.

COURT: MER, CJ; PAN, SSM, RWP, and MDW, JJ.

Brief Description:

Petitioners/Defendants-Appellees County of Maui and William Spence, in his capacity as Director of the Department of Planning of the County of Maui (collectively “the County”) applied for transfer of this case from the Intermediate Court of Appeals (ICA), which this court accepted on June 29, 2016.

In 2000, Respondents/Plaintiffs-Appellants Douglas Leone and Patricia A. Perkins-Leone (collectively “the Leones”) bought an oceanfront lot at Palau`ea Beach in Makena, Maui. The lot was subject to a number of restrictions and designations, including: 1) the 1998 Kihei-Makena Community Plan (Community Plan), which designated the beach lots as “park” land and prohibited the construction of single-family residences, and 2) a Special Management Area (SMA) designation, which prohibits any development that has a cumulative impact or a significant environmental or ecological effect on the area.

In 2007, the Leones sought a permit to build a single-family residence on the lot and submitted a SMA assessment application with County’s Department of Planning. The Department of Planning declined to process the SMA application, explaining that the property was designated “park” on the Community Plan, that the proposed single-family dwelling was inconsistent with the Community Plan, and that an application for a Community Plan amendment was not submitted concurrent with the SMA application. The Department of Planning noted that the Leones would need to file a new application consistent with the Community Plan in order to proceed.

The Leones filed a lawsuit against the County with the Circuit Court of the Second Circuit (circuit court), alleging that the County’s actions left the Leones with no economically viable use of their property. The circuit court determined that the Leones had failed to exhaust their administrative remedies and dismissed the Leones’ suit. The ICA, in a memorandum opinion (ICA opinion), reversed and remanded the case back to the circuit court, holding that the Leones’ claims were ripe for adjudication.

A jury trial was held and on May 5, 2015, the jury found in favor of the County, answering “no” to the question of whether the County had deprived the Leones of economically beneficial use of their land. The circuit court subsequently denied the Leones’ renewed motion for judgment as a matter of law or, in the alternative, motion for a new trial, and awarded the County $40,522.72 in costs.

The Leones appealed to the ICA and argued that the circuit court erred in: 1) concluding that the Leones were not entitled to judgment as a matter of law on the inverse condemnation claims, and that the Leones were not entitled to just compensation, 2) permitting testimony that “investment use” is an “economically beneficial use” of land, 3) modifying or refusing certain jury instructions requested by the Leones, and 4) awarding costs to the County.

The County cross-appealed and argued that the circuit court erred in: 1) allowing the identification and introduction of the ICA opinion to the jury, 2) taking judicial notice of the ICA opinion as the “law-of-the-case”, 3) allowing testimony about the “value of loss” attributed to the Leones’ undeveloped property, 4) not allowing the County’s expert to testify as to the value of the Leones’ lot, 5) modifying or refusing certain jury instructions requested by the County, and 6) using an improper special verdict form for the jury.

Here are the briefs for the property owner's principal appeal:

Here are the briefs on the County's cross appeal:

Stay tuned. We'll bring you more after the arguments.

PDF: Plaintiffs/Appellants' Opening Brief, Leone v. County of Maui, No. SCAP-15-0000599 (Apr. 13, 2016)

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