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Electronically Filed
Supreme Court
SCWC-XX-XXXXXXX
05-SEP-2025
09:50 AM
Dkt. 52 OP
IN THE SUPREME COURT OF THE STATE OF HAWAIʻI
---o0o---SIERRA CLUB,
Petitioner/Appellant-Appellee/Cross-Appellee,
vs.
BOARD OF LAND AND NATURAL RESOURCES,
Respondent/Appellee-Appellee/Cross-Appellee,
and
COUNTY OF MAUI,
Respondent/Appellee-Appellee/Cross-Appellant,
and
ALEXANDER AND BALDWIN, INC.;
and EAST MAUI IRRIGATION COMPANY, LLC,
Respondents/Appellees-Appellants/Cross-Appellees.
(CAAP-XX-XXXXXXX; CASE NO. 1CCV-XX-XXXXXXX)
------------------------------------------------------------SIERRA CLUB,
Petitioner/Appellant-Appellee,
vs.
BOARD OF LAND AND NATURAL RESOURCES,
Respondent/Appellee-Appellant,
and
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ALEXANDER AND BALDWIN, INC.; EAST MAUI
IRRIGATION COMPANY, LLC; and COUNTY OF MAUI,
Respondents/Appellees-Appellees.
(CAAP-XX-XXXXXXX; CASE NO. 1CCV-XX-XXXXXXX)
SCWC-XX-XXXXXXX
CERTIORARI TO THE INTERMEDIATE COURT OF APPEALS
SEPTEMBER 5, 2025
RECKTENWALD, C.J., McKENNA, EDDINS, AND DEVENS, JJ.,
AND CIRCUIT JUDGE MALINAO, IN PLACE OF GINOZA, J., RECUSED
OPINION OF THE COURT BY DEVENS, J.
I. Introduction
Our case law has long reflected our concern about barriers
facing community members seeking meaningful participation in an
agency’s proceedings and determinations on matters affecting the
environment. In this appeal, we consider two main questions:
(1) whether petitioner Sierra Club was wrongfully denied a
contested case hearing before the Board of Land and Natural
Resources (BLNR or Board); and (2) whether the Environmental
Court of the First Circuit (Environmental Court) had
jurisdiction pursuant to Hawaiʻi Revised Statutes (HRS) 91-14(g)
(2012 & Supp. 2019) to review BLNR’s proceedings involving a
decision to renew several permits after the Board denied Sierra
Club a contested case hearing.
We review a November 2020 decision made by BLNR during a
public meeting that granted Alexander and Baldwin, Inc.’s and
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East Maui Irrigation’s (EMI) (collectively, A&B) request to
“continue” (renew) four revocable permits (RPs) for 2021. The
parties do not dispute that before the Board voted to renew the
RPs, Sierra Club properly and timely requested a contested case
hearing. At the November 2020 public meeting, BLNR denied
Sierra Club’s hearing request and voted to renew A&B’s RPs for
2021. Pursuant to HRS § 171-55 (2011), 1 the renewal reauthorized A&B to continue, for another year, its “temporary
occupancy” of state lands and its daily diversion of millions of
gallons of fresh water from East Maui’s streams into Central
Maui.
Sierra Club filed an agency appeal with the Environmental
Court pursuant to HRS § 91-14 challenging BLNR’s final decision
and order. Specifically, Sierra Club challenged the Board’s
decision to renew the four RPs and the Board’s denial of Sierra
Club’s request for a contested case hearing. Sierra Club also
requested attorney fees and costs.
1 HRS § 171-55 provided in relevant part:
the board of land and natural resources may issue permits
for the temporary occupancy of state lands or an interest
therein on a month-to-month basis by direct negotiation
without public auction, under conditions and rent which
will serve the best interests of the State, subject,
however, to those restrictions as may from time to time be
expressly imposed by the board. A permit on a month-tomonth basis may continue for a period not to exceed one
year from the date of its issuance; provided that the board
may allow the permit to continue on a month-to-month basis
for additional one year periods.
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The Environmental Court held that Sierra Club was entitled
to a contested case hearing before BLNR voted to renew the RPs.
The court vacated the invalid RPs and remanded the case to BLNR
for a contested case hearing. Recognizing the potential for
“unintended consequences and chaos” that could result from
vacating the RPs, which authorized the diversion of fresh water
from East Maui’s streams to meet Central Maui’s needs while the
case was on remand, the Environmental Court stayed its vacatur
order. After inviting and receiving input from the parties, the
Environmental Court temporarily modified the permits and allowed
A&B to continue its water diversion but at a reduced rate of up
to 25 million gallons of fresh water per day (mgd) until BLNR
concluded its proceedings on remand. The Environmental Court
also awarded Sierra Club attorney fees and costs pursuant to the
private attorney general doctrine.
A&B and BLNR appealed to the Intermediate Court of Appeals
(ICA), which vacated in part the Environmental Court’s decision
and orders. The ICA (majority and dissent) held that Sierra
Club’s constitutionally protected property interest in a clean
and healthful environment, implicated in BLNR’s renewal of A&B’s
RPs, was defined by laws of environmental quality HRS § 171-55
and HRS Chapter 343 (the Hawaiʻi Environmental Policy Act) but
not by HRS Chapter 205A, the Coastal Zone Management Act (CZMA).
And in a split decision, the ICA majority held that the
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Environmental Court only had subject matter jurisdiction over
part of Sierra Club’s appeal, namely its appeal from BLNR’s
denial of Sierra Club’s request for a contested case hearing.
The ICA majority held that constitutional due process did not
entitle Sierra Club to a contested case under the circumstances
presented. The majority further held that the Environmental
Court did not have jurisdiction over Sierra Club’s appeal from
BLNR’s decision to renew the RPs, and therefore, the
Environmental Court erred in modifying the RPs’ conditions
pending remand. Given the majority’s conclusion that Sierra
Club was not entitled to a contested case hearing and the
Environmental Court lacked jurisdiction to modify the RPs, the
majority vacated the orders awarding attorney fees and costs to
Sierra Club.
On certiorari, Sierra Club raises several primary
contentions. First, it asserts that the ICA erred in finding
that Sierra Club’s constitutionally protected property interest,
implicated in the RPs’ renewal, was not defined by HRS Chapter
205A. Second, Sierra Club argues that BLNR’s decision to renew
the RPs granted legal rights and privileges to A&B, and that
under the facts and circumstances, due process protections
entitled Sierra Club to a contested case hearing. Sierra Club
contends that pursuant to our case law, the Environmental Court
had HRS § 91-14 jurisdiction over Sierra Club’s appeal from
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BLNR’s decision to renew A&B’s RPs. Sierra Club further argues
that the Environmental Court had statutory and equitable
authority to temporarily modify the RPs pending remand to BLNR.
Finally, Sierra Club asserts that the ICA majority erroneously
vacated the award of attorney fees and costs. A&B and BLNR take
the counter position to each of Sierra Club’s contentions, other
than the Environmental Court’s award of attorney fees and costs,
which only A&B and the County of Maui (County) dispute.
We agree with Sierra Club. On this record, we hold that
BLNR’s decision to renew the RPs implicated Sierra Club’s
constitutional right to a clean and healthful environment as
defined by HRS Chapter 205A. We further conclude that
constitutional due process entitled Sierra Club to a contested
case hearing before the Board voted to renew the RPs. We
respectfully disagree with the ICA majority’s analysis of the
Environmental Court’s subject matter jurisdiction, and affirm
that an agency decision made after the wrongful denial of a
contested case hearing, which effectively ends the proceeding,
is a final decision and order within the meaning of HRS § 91-14.
Thus, we hold the Environmental Court had HRS § 91-14
jurisdiction over not only BLNR’s denial of Sierra Club’s
request for a contested case hearing, but also BLNR’s subsequent
decision to renew the RPs. We further hold that having
jurisdiction over the matter, the Environmental Court had
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statutory and equitable authority to modify the RPs. The
Environmental Court properly exercised its statutory and
equitable powers to temporarily modify the maximum cap on water
diversion pending resolution of BLNR’s proceedings on remand.
We also affirm the Environmental Court’s award of attorney fees
and costs to Sierra Club.
II. Background
A. Factual Background
For over a century, under various arrangements with the
Territory and then the State, A&B has diverted water from East
Maui’s streams for use in sugar plantation and other operations
in Central Maui.
In 1999, BLNR issued four RPs, numbers S-7263, S-7264,
S-7265, and S-7266 pursuant to HRS § 171-55 (1993), that were
effective July 1, 2000 and continued on a month-to-month basis
for a period not to exceed one year unless the Board allowed the
permit to continue for additional one year periods. HRS §
171-55. The RPs gave A&B the “[r]ight, privilege, and authority
for the development, diversion, and use of water” from the
Honomanū, Huelo, Keʻanae, and Nāhiku watersheds in East Maui.
The Honomanū, Huelo, and Keʻanae RPs were first assigned to A&B,
with the Nāhiku RP assigned to EMI.
In May 2001, A&B applied to BLNR for a thirty-year water
lease to divert water from the East Maui watersheds. At a
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May 25, 2001 public meeting, BLNR considered the water lease
request, which included a request to continue the issuance of
the RPs pending the lease application outcome, and received
testimony. At the meeting, a Maui community group requested and
was granted a contested case hearing. 2 BLNR deferred its
decision on the long-term lease but granted the RPs for the
year.
In May 2002, BLNR renewed A&B’s four RPs for the East Maui
stream diversions and affirmed “its intention to preserve the
status quo until the resolution of the contested case” on A&B’s
long-term lease application.
BLNR has renewed those four “temporary” RPs continuously
since 2002. 3 The RPs have allowed A&B and EMI to utilize
approximately 33,000 acres of state forest reserve land and
divert millions of gallons of fresh water per day from East
Maui’s streams. BLNR’s repeated renewal of A&B’s RPs have, as a
matter of course, been granted each year for over twenty years. 4
BLNR’s annual renewals of the temporary permits appear to have
given A&B a de facto two-decade lease.
2 See Maui Tomorrow v. State, Bd. of Land & Nat. Res., 110 Hawaiʻi 234, 237, 131 P.3d 517, 520 (2006).
3 See Carmichael v. Bd. of Land & Nat. Res., 150 Hawaiʻi 547, 555, 506 P.3d 211, 219 (2022).
4 Id. at 554-55, 506 P.3d at 218-19.
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B. BLNR Proceedings for A&B’s 2019 and 2020 RPs
At a November 2018 public meeting held by BLNR, A&B’s four
RPs came up again for renewal for 2019. As part of the
proceedings, Sierra Club requested a contested case hearing
before BLNR made a decision on the RPs. The Board denied Sierra
Club’s hearing request and proceeded to vote to renew the four
RPs for 2019.
Subsequently, at an October 2019 public meeting, A&B’s
request to renew the four RPs for 2020 was again on BLNR’s
agenda. BLNR accepted public comments pertaining to the renewal
request. Sierra Club once again requested a contested case
hearing, which the Board denied and then voted to approve the
RPs for 2020.
We take judicial notice that Sierra Club initiated a
separate action in circuit court against BLNR, A&B, and the
County relating to BLNR’s renewal of A&B’s RPs for 2019 and
2020, which sought declaratory and injunctive relief. 5 A bench
trial was held in that case.
C. BLNR Proceedings for A&B’s 2021 RPs
In October 2020, A&B requested another renewal of the same
four RPs for 2021.
5 See JEFS No. 1CC191000019, the Honorable Jeffrey P. Crabtree presiding. This case was appealed to the ICA; see CAAP-XX-XXXXXXX.
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On November 13, 2020, BLNR held a public meeting on A&B’s
renewal request. The agency’s staff recommended new conditions
be applied to the RPs for 2021, in addition to continuing the
conditions from the 2020 RPs. Pursuant to the 2020 conditions,
A&B had provided BLNR with quarterly data on actual water usage.
Before the public meeting, Sierra Club submitted a written
petition requesting a contested case hearing on A&B’s renewal
request. During the meeting, BLNR considered Sierra Club’s
hearing request, but after a closed-door Executive Session, the
Board reconvened and denied Sierra Club a contested case
hearing. The Board then took public comment and subsequently
voted to renew the RPs for 2021. The Board’s renewal of the RPs
included continuing the conditions from the 2020 RPs but also
added several new conditions for 2021.
D. Environmental Court Proceedings
Pursuant to HRS § 91-14(g), Sierra Club appealed BLNR’s
decision renewing A&B’s RPs for 2021 and BLNR’s denial of Sierra
Club’s request for a contested case hearing to the Environmental
Court. 6 Sierra Club argued that a contested case hearing was
required on the 2021 RPs’ conditions because there was new
evidence and changed circumstances, including data provided by
A&B on actual rather than estimated water use. Further, Sierra
6 The Honorable Jeffrey P. Crabtree presided.
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Club cited to the new conditions BLNR imposed on the 2021 RPs,
including a redefinition of water waste as excluding evaporation
and system losses, and a daily water diversion rate of 45 mgd.
Sierra Club contended these and other RP conditions required
further examination and scrutiny in a contested case hearing
prior to BLNR’s decision to renew the RPs. The County
intervened in opposition to Sierra Club.
As to the issue of whether a contested case hearing was
required by law, Sierra Club asserted a constitutionally
protected property interest in a clean and healthful environment
as defined by HRS § 171-55, HRS Chapter 205A, HRS Chapter 343,
and the public trust in fresh water, implicated in BLNR’s
renewal of A&B’s RPs. It argued that a contested case hearing
was required by law prior to BLNR’s renewal of the RPs, and
because BLNR decided to renew the RPs after violating Sierra
Club’s due process rights, the RPs should be vacated.
A&B countered that Sierra Club did not have a
constitutionally protected property interest implicated by the
RP renewals. And even if it did, Sierra Club’s administrative
challenge to the 2021 RPs was substantially similar to their
previous challenge of BLNR’s renewal of the RPs for 2019 and
2020 in the bench trial before the circuit court. While the
risk of erroneous deprivation of Sierra Club’s property interest
was low, A&B asserted, the burden on the government of a
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duplicative procedure would be significant. Therefore, a
contested case was not required by law as there was no due
process violation.
BLNR similarly argued that a contested case hearing was not
required by statute, rule, or constitutional due process. BLNR
contended that its authority to continue the permits for oneyear periods arose from HRS § 171-55 which was a “statute
relating to land management, not environmental quality.” But
assuming Sierra Club did have a constitutionally protected
property interest in BLNR’s renewal of the RPs, BLNR argued, due
process did not require a contested case hearing, as the bench
trial on the 2019 and 2020 RPs, as well as Sierra Club’s
participation in the November 2020 public meeting, sufficiently
safeguarded that interest. Further, BLNR asserted that it had
an interest in avoiding duplicative proceedings.
The County joined in A&B and BLNR’s arguments, and also
asserted that suspending water diversion rates and conditions
during a contested case hearing would burden government by
jeopardizing the protection of water resources for domestic use.
In reply to appellees, Sierra Club reiterated arguments made in
its opening brief.
The Environmental Court filed an Interim Decision on Appeal
in May 2021, concluding that BLNR’s denial of Sierra Club’s
request for a contested case hearing violated Sierra Club’s due
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process rights. Pursuant to HRS § 91-14, the court vacated the
RPs, but stayed its order, and reserved jurisdiction to modify
the RPs pending remand of the case to BLNR. Recognizing the
potential chaos immediate vacatur of the invalid RPs could bring
to Central Maui water users, the court invited the parties to
provide input on whether and how the court might modify the RPs’
conditions to mitigate such potential risks. The court also
ordered BLNR to hold a contested case hearing on the RPs as soon
as practicable. 7
Subsequently, after receiving input from the parties and
reiterating that BLNR “violated Sierra Club’s constitutional
rights by refusing to hold a contested case hearing on those
permits[,]” the Environmental Court issued its July 30, 2021
Order Modifying Permits. Pursuant to its authority under HRS §
91-14, HRS § 604A-2(b) (2016), and the state constitution, the
court modified the RPs for 2021, allowing them to remain in
effect, but limiting A&B’s water diversion to no more than 25
mgd (averaged monthly) until the conclusion of the contested
case hearing.
7 We take judicial notice that a contested case hearing on the renewals of A&B’s RPs for 2021 and 2022 was subsequently conducted primarily in December 2021 by then-DLNR-Chair, Suzanne Case (Case), who appointed herself as the hearing officer. See DLNR CCH-LD-21-01. At the end of June 2022, Case issued BLNR’s Findings of Fact, Conclusions of Law, and Decision and Order. After primary and secondary appeal of that contested case Decision and Order, the case is on remand to the Environmental Court for further proceedings. We take judicial notice of JEFS No. 1CCV-XX-XXXXXXX; CAAP-24-82; and SCWC-24-82 (cert. rejected).
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On August 23, 2021, the Environmental Court entered its
Findings of Fact, Conclusions of Law and Order. Relevant here
and consistent with its interim rulings, the court found that
Sierra Club and its members had demonstrated a constitutional
right to a clean and healthful environment as defined by HRS
Chapter 205A, in addition to HRS § 171-55 and HRS Chapter 343,
which was adversely affected by BLNR’s renewal of A&B’s RPs for
2021, authorizing stream diversions of 45 mgd with “inadequate
permit conditions.” Further, the Environmental Court determined
that Sierra Club’s constitutional due process rights were
violated, as a contested case hearing was required before BLNR
voted to renew the RPs. The court stayed its Interim Decision
vacating the RPs, and invoking its equitable powers, the court
temporarily limited the total amount of water diverted to 25 mgd
(averaged monthly), pending BLNR’s completion of the contested
case hearing on A&B’s renewal request or further court order.
The Environmental Court also retained limited jurisdiction
to further modify the RPs if necessary. Upon request by A&B in
November 2021, the Environmental Court extended the end date of
the 2021 RPs to May 1, 2022, or the date on which BLNR rendered
a decision on the continuation of the RPs for 2022, or on
further order of the court.
The Environmental Court also awarded Sierra Club attorney
fees and costs pursuant to the private attorney general
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doctrine.
On July 27, 2022, final judgment was entered.
E. ICA Proceedings
A&B and BLNR appealed the Environmental Court’s decision
and orders to the ICA. 8
A&B, BLNR, and the County argued that the Environmental
Court abused its discretion in finding a contested case hearing
was required before BLNR renewed the RPs. First, A&B reasserted
that Sierra Club had no constitutionally protected property
interest in the matter before BLNR. Second, even if it did, A&B
and BLNR contended that Sierra Club had received sufficient
procedure in the bench trial on the 2019 and 2020 RPs and the
November 2020 public meeting on the 2021 RPs. BLNR further
challenged the Environmental Court’s order and authority
remanding the case to BLNR for a contested case hearing while
also allowing the RPs to remain in effect with the modifications
made by the court. Finally, A&B and the County argued that the
Environmental Court abused its discretion when it awarded Sierra
Club attorney fees and costs. 9
In response, Sierra Club repeated the contentions it made
8 The ICA consolidated the appeals.
9 In its cross-appeal, the County also argued that if Sierra Club was entitled to attorney fees and costs, the Environmental Court abused its discretion in ordering the County to pay 5% of the total attorney fees. This issue is not before this court on certiorari.
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to the Environmental Court regarding its due process right to a
contested case hearing before the Board voted to renew the RPs.
Sierra Club further argued that the Environmental Court properly
exercised its statutory and equitable authority in ordering BLNR
to hold a contested case hearing and in modifying the RPs
pending resolution of BLNR’s proceedings on remand. Sierra Club
also asserted that the Environmental Court did not abuse its
discretion in awarding attorney fees and costs.
The ICA held oral argument and published its opinion.
Sierra Club v. Bd. of Land & Nat. Res. (Sierra Club I), 154
Hawaiʻi 264, 550 P.3d 230 (App. 2024). First, the ICA concluded
that the issues presented on appeal, despite the temporary
nature of the permits, were not moot, as the “capable of
repetition, yet evading review” and “public interest” exceptions
to the mootness doctrine applied. 10 Id. at 276, 550 P.3d at 242.
The ICA further determined that Sierra Club had a
constitutionally protected property interest in a clean and
healthful environment based on our state’s constitution, article
XI, section 9, as defined by environmental quality laws HRS §
171-55 and HRS Chapter 343, but not by HRS Chapter 205A. 11 Id.
10 Carmichael was published in March 2022, after BLNRʻs November 2020 RP renewal. Here, the ICA acknowledged Carmichael’s mootness analysis and exceptions. See 150 Hawaiʻi at 560-62, 506 P.3d at 224-26.
11 The ICA also alluded to but did not affirmatively decide Sierra Club’s contention that it had a property interest arising from article XI, section 1 of the state constitution and the public trust doctrine. This is consistent
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at 278-80, 550 P.3d at 244-46. Instead, the ICA held that HRS
Chapter 205A “did not effect [sic] BLNR’s authority to continue
the Permits, and thus did not define Sierra Club’s members’
constitutional right to a clean and healthful environment in the
matter before BLNR.” Id. at 279, 550 P.3d at 245.
In a split opinion on the remaining issues, the ICA
majority concluded that the Environmental Court erred in
deciding that a contested case hearing was required by law. Id.
at 285, 550 P.3d at 251. Under the circumstances of this case,
balancing the minimal procedural protections of Sierra Club’s
property interest provided by a contested case hearing against
the burdens on state and county governments imposed by such a
hearing, the majority held that Sierra Club was not denied
constitutional due process by BLNR’s denial of a contested case
hearing. Id. at 283, 550 P.3d at 249.
The majority then held that because the Board’s decision to
renew the RPs was not made in a contested case hearing, and due
process did not require a contested case hearing, the
Environmental Court did not have HRS § 91-14(g) appellate
jurisdiction over Sierra Club’s appeal of BLNR’s renewal of the
RPs. Id. The majority reasoned that the Environmental Court’s
with the Environmental Court’s decision not to assess Sierra Club’s public trust claim given the “straightforward” nature of an article XI, section 9 constitutional basis for a contested case hearing on the RPs’ renewal. On this record, we do not reach Sierra Club’s public trust claim.
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“exclusive jurisdiction” is over appeals from BLNR HRS § 171-55
decisions rendered in contested cases; but here, BLNR’s decision
to renew the RPs was made during a public meeting, not a
contested case hearing. Id. Thus, the majority concluded that
because the Environmental Court did not have HRS § 91-14
jurisdiction over the Board’s renewal of the RPs, the
Environmental Court did not have equitable power to modify the
RPs. Id. The majority went further, adding that “[e]ven if the
Environmental Court had jurisdiction under HRS § 91-14, the
procedure it used to modify BLNR’s conditions exceeded its
statutory authority” because of the separation of powers and a
circuit court’s deference to agency fact finding in HRS § 91-14
appellate review. Id. at 283-84, 550 P.3d at 249-50.
Finally, the majority determined that because Sierra Club
was not the prevailing party, it had not established the
elements for an award of attorney fees and costs pursuant to the
private attorney general doctrine. Id. at 285, 550 P.3d at 251.
The ICA dissent disagreed with the majority in noting that
due process entitled Sierra Club to a contested case hearing. 12
Id. at 285-87, 550 P.3d at 251-53. The dissent would have also
held that the Environmental Court had HRS § 91-14(g)
jurisdiction over BLNR’s decision to renew the RPs and did not
12 The Honorable Karen T. Nakasone dissented.
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exceed its statutory and equitable authority when it modified
the RPs. Id. at 287-89, 550 P.3d at 253-55. On this basis, the
dissent would have affirmed the Environmental Court’s award of
attorney fees and costs to Sierra Club. Id. at 286, 550 P.3d at
252.
We accepted Sierra Club’s application for certiorari
review.
III. Standards of Review
A. Subject Matter Jurisdiction
“The existence of subject matter jurisdiction is a question
of law that is reviewable de novo under the right/wrong
standard.” Kilakila ʻO Haleakala v. Bd. of Land & Nat. Res., 131
Hawaiʻi 193, 199, 317 P.3d 27, 33 (2013) (quoting Kaniakapupu v.
Land Use Comm’n, 111 Hawaiʻi 124, 131, 139 P.3d 712, 719 (2006)).
B. Appeals from an Agency Decision
In this secondary appeal, this court applies the
standards of HRS § 91–14(g) to determine whether the
circuit court decision was right or wrong. HRS § 91–14(g)
(Supp. 2015) provides:
Upon review of the record the court may affirm
the decision of the agency or remand the case
with instructions for further proceedings; or
it may reverse or modify the decision and order
if the substantial rights of the petitioners
may have been prejudiced because the
administrative findings, conclusions,
decisions, or orders are:
(1) In violation of constitutional or statutory
provisions; or
(2) In excess of the statutory authority or
jurisdiction of the agency; or
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(3) Made upon unlawful procedure; or
(4) Affected by other error of law; or
(5) Clearly erroneous in view of the reliable,
probative, and substantial evidence on the
whole record; or
(6) Arbitrary, or capricious, or characterized
by abuse of discretion or clearly unwarranted
exercise of discretion.
Further, under HRS § 91–14(g), conclusions of law are
reviewable under subsections (1), (2), and (4); questions
regarding procedural defects are reviewable under
subsection (3); findings of fact are reviewable under
subsection (5); and an agency’s exercise of discretion is
reviewable under subsection (6).
Mauna Kea Anaina Hou v. Bd. of Land & Nat. Res., 136 Hawaiʻi 376,
388, 363 P.3d 224, 236 (2015) (cleaned up).
C. Statutory Interpretation
The interpretation of a statute is a question of law;
review is de novo, and the standard of review is right/wrong.
Kimura v. Kamalo, 106 Hawaiʻi 501, 507, 107 P.3d 430, 436 (2005);
Sugarman v. Kapu, 104 Hawaiʻi 119, 123, 85 P.3d 644, 648 (2004).
D. Constitutional Law
Questions of constitutional law are reviewed de novo, under
the right/wrong standard. Carmichael, 150 Hawaiʻi at 560, 506
P.3d at 224 (citation and quotation marks omitted).
E. Award of Attorney Fees and Costs
We review a court’s award of attorney fees and costs under
the abuse of discretion standard. Goo v. Arakawa, 132 Hawaiʻi
304, 318, 321 P.3d 655, 669 (2014). Abuse of discretion occurs
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when a trial court clearly exceeds the bounds of reason or
disregards rules or principles of law or practice to the
substantial detriment of a party. Maui Tomorrow, 110 Hawaiʻi at
242, 131 P.3d at 25. We review de novo whether a trial court
abused its discretion in determining whether a party has
satisfied the three factors of the private attorney general
doctrine. Goo, 132 Hawaiʻi at 318, 321 P.3d at 669.
IV. Discussion
A. Sierra Club was entitled to a contested case hearing before
BLNR voted to renew A&B’s RPs for 2021.
The Environmental Court concluded that a contested case
hearing was required by Sierra Club’s constitutionally protected
right to a clean and healthful environment as defined, inter
alia, by HRS Chapter 205A. See Haw. Const., art. XI, § 9; HRS §
171-55; HRS Chapter 205A; HRS Chapter 343; HRS § 91-1 (2012 &
Supp. 2017), and HRS § 91-14(a) (2012).
The ICA disagreed, holding that while HRS Chapter 205A was
a law relating to environmental quality, it “did not provide
authority for BLNR’s continuation of [the RPs]”; and because
Chapter 205A “did not effect [sic] BLNR’s authority to continue
the [RPs], [it] thus did not define Sierra Club’s members’
constitutional right to a clean and healthful environment in the
matter before BLNR.” Sierra Club I, 154 Hawaiʻi at 279, 550 P.3d
at 245. The ICA majority then held that while Sierra Club had a
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constitutionally protected property interest defined by HRS §
171-55 and HRS Chapter 343, under the circumstances of this
case, constitutional due process did not require a contested
case hearing. Id. at 280, 285, 550 P.3d at 246, 251.
In this secondary appeal, we apply the standards of HRS §
91-14(g) in reviewing BLNR’s decision and to determine whether
the Environmental Court’s decision was right or wrong. Mauna
Kea Anaina Hou, 136 Hawaiʻi at 388, 363 P.3d at 236. We affirm
the ICA’s conclusion that Sierra Club had a property interest in
a clean and healthful environment as defined by HRS § 171-55 and
HRS Chapter 343, but we hold that the ICA erred in reversing the
Environmental Court’s determination that HRS Chapter 205A also
defined Sierra Club’s constitutionally protected property
interest in the matter before the Board. Further, we hold that
the ICA majority erred in determining that constitutional due
process did not entitle Sierra Club to a contested case hearing
before the Board decided to renew the 2021 RPs, and we affirm
the Environmental Court on this issue.
1. Sierra Club’s constitutionally protected property
right in a clean and healthful environment was defined
by HRS Chapter 205A.
Whether a constitutional due process right to a contested
case hearing exists is determined through application of a twostep analysis. Flores v. Bd. of Land & Nat. Res., 143 Hawaiʻi
114, 125, 424 P.3d 469, 480 (2018). First, we consider if the
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particular interest that the claimant seeks to protect by a
hearing is “property” within the meaning of the due process
clauses of the federal and state constitutions. Aguiar v.
Hawaii Hous. Auth., 55 Haw. 478, 495, 522 P.2d 1255, 1266
(1974). Second, if the interest is “property,” we determine
what specific procedures are required to protect that interest.
Id.
Here, Sierra Club argues that its constitutionally
protected property interest at issue in BLNR’s renewal of A&B’s
RPs arises from article XI, section 9 of our state constitution
as defined by laws of environmental quality, including HRS
Chapter 205A.
Article XI, section 9 of the Hawaiʻi Constitution provides,
in part, that “[e]ach person has the right to a clean and
healthful environment, as defined by laws relating to
environmental quality, including control of pollution and
conservation, protection and enhancement of natural resources.”
Haw. Const., Art. XI, § 9. In analyzing HRS § 171-55 as a law
related to environmental quality defining Sierra Club’s
constitutionally protected property interest in BLNR’s decision
to renew the RPs, the ICA correctly noted that HRS § 171-55
requires the Board to permit temporary occupancy and use of
state lands “under conditions and rent which will serve the best
interests of the State[.]” The previous RP conditions that
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continued with the renewal of A&B’s RPs for 2021 directly
related to conservation and protection of our state’s fresh
water resources.
We review the interpretation of a statute de novo. Based
on a plain reading of HRS Chapter 205A, as well as insights from
the legislature’s 1993 amendment to the CZMA, we reverse the ICA
and affirm the Environmental Court in concluding that Chapter
205A applies in defining Sierra Club’s due process right
implicated in BLNR’s renewal of these land use and water
diversion RPs.
HRS § 205A-4(b) (2017) provides: “The objectives and
policies of this chapter and any guidelines enacted by the
legislature shall be binding upon actions within the coastal
zone management area by all agencies, within the scope of their
authority.” Importantly, HRS § 205A-1 (2017) clearly defines
the “coastal zone management area” as “all lands of the State
and the area extending seaward from the shoreline to the limit
of the State’s police power and management authority, including
the United States territorial sea.” HRS § 205A-1 (emphasis
added).
In 1993, our legislature recognized the “unique” problems
of maintaining the environmental quality of our coastal areas,
making it “difficult to distinguish coastal from noncoastal
activities.” 1993 Haw. Sess. Laws Act 91, § 1 at 123.
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Therefore, our legislature amended its definition of the
“coastal zone management area”--removing the law’s prior
exclusion of state forest reserves from this area--for the
following reasons:
The legislature finds that the problems of maintaining the
quality of Hawaii’s coastal areas are unique. Because the
State is made up of small islands, it is difficult to
distinguish coastal from noncoastal activities. Human and
nonhuman activities conducted in inland forest reserves can
result in erosion of public lands, nonpoint source water
pollution, and siltation in coastal areas.
The legislature finds that there is an urgent need to
develop a comprehensive approach to protecting Hawaii’s
coastal areas from nonpoint source pollution, siltation,
and erosion. Extending the inland boundaries by removing
the existing exclusion of state forest reserves from the
coastal zone management area would allow for greater
control over these impacts.
1993 Haw. Sess. Laws Act 91, § 1 at 123 (emphases added).
This “mauka to makai” connection of authorized upland
actions with coastal consequences is created by the sweep of our
islands’ streams. Our legislature recognized this in its redefinition of HRS § 205A-4(b)’s “coastal zone management area”
as including “all lands of the State.” The mauka to makai
interconnection is further supported by HRS § 205A-2 (2017),
which sets forth the objectives and policies applicable to “all
parts of this chapter.” HRS § 205A-2(a). One of these policies
directs agencies to “[e]xercise an overall conservation ethic”
and “[m]inimize disruption or degradation of coastal water
ecosystems by effective regulation of stream diversions,
channelization, and similar land and water uses, recognizing
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competing water needs[.]” HRS § 205A-2(c)(4)(A), (D). Further,
the statute describes coastal ecosystem policy as promoting
“water quantity and quality planning and management practices
that reflect the tolerance of fresh water and marine ecosystems
and maintain and enhance water quality[.]” HRS § 205A2(c)(4)(E).
BLNR and the agency’s staff repeatedly recognized our
islands’ mauka to makai hydrological systems in their review of
the Commission on Water Resource Management’s (CWRM) research on
streamflow and biological ecosystems in the East Maui watershed.
The record on appeal here includes CWRM’s reports from 2008,
2009, and 2020 on East Maui stream complexes affected by water
diversions permitted by BLNR. In its submittal of comments for
the November 2020 BLNR public meeting, Department of Land and
Natural Resources’ (DLNR) Division of Aquatic Resources staff
ranked at least one stream within the Huelo RP area as a “high”
priority for restoration.
The ICA correctly noted that HRS § 205A-4(b) binds
agencies, including BLNR, to the objectives and policies of HRS
Chapter 205A. But it is clear that the subject RPs which BLNR
renewed pursuant to its HRS § 171-55 authority were for inland
forest diversion of fresh water out of East Maui’s streams,
potentially affecting the hydrological systems and ecological
quality of coastal environs. Therefore, while we affirm the
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ICA’s holding that Sierra Club’s constitutionally protected
property interest in the matter before BLNR was defined by HRS §
171-55 and HRS Chapter 343, we reverse the ICA’s exclusion of
HRS Chapter 205A as a basis for that property interest. We hold
that HRS Chapter 205A also defined Sierra Club’s
constitutionally protected property interest in a clean and
healthful environment in the matter before BLNR.
2. Sierra Club was entitled to a contested case hearing.
Sierra Club argues that the ICA majority erred in holding a
contested case hearing was not required by law before BLNR voted
to renew A&B’s RPs for 2021.
“We have long recognized that constitutional due process
protections mandate a hearing whenever the claimant seeks to
protect a property interest, in other words, a benefit to which
the claimant is legitimately entitled.” In re Application of
Maui Elec. Co., Ltd. (MECO), 141 Hawaiʻi 249, 260, 408 P.3d 1, 12
(2017) (cleaned up). See also Pele Def. Fund v. Puna Geothermal
Venture, 77 Hawaiʻi 64, 68, 881 P.2d 1210, 1214 (1994). If a
party demonstrates a constitutionally protected property
interest affected by a government agency’s decision, that party
has a due process right to notice and an opportunity to be heard
at a meaningful time and in a meaningful manner. Sandy Beach
Def. Fund v. City Council of City & Cnty. of Honolulu, 70 Haw.
361, 378, 773 P.2d 250, 261 (1989).
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A contested case is a proceeding in which the legal rights,
duties, or privileges of specific parties are required by law to
be determined after an opportunity for an agency hearing. HRS §
91-1. A contested case hearing may be required by rule,
statute, or constitutional due process. Mauna Kea Anaina Hou,
136 Hawaiʻi at 390, 363 P.3d at 238. As Sierra Club has not
asserted a right to a hearing required by rule or statute, we
review de novo the constitutional issue relating to the
deprivation of due process under the right/wrong standard.
In Sandy Beach, this court reiterated that determining what
specific procedures are required to protect a party’s due
process rights involves the balancing of three factors: (1) the
private interest affected; (2) the risk of erroneous deprivation
of that interest through the procedures actually used and the
protective value of additional or alternative procedures; and
(3) the government’s interest, which includes the burden created
by more procedure than what was given. 70 Haw. at 378, 773 P.2d
at 261.
As discussed above, and affirmed by the ICA, Sierra Club
had a property interest protected by constitutional due process.
In balancing the remaining two factors, we affirm the
Environmental Court’s conclusion that Sierra Club’s due process
rights were prejudiced with BLNR’s renewal of the RPs without a
contested case hearing.
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a. The bench trial on the 2019 and 2020 RPs and
BLNR’s November 2020 public meeting on the RPs
did not provide a sufficient safeguard and
procedural protection of Sierra Club’s
constitutionally protected property interest from
erroneous deprivation.
For due process to be satisfied, an entitled party must
have notice and a meaningful opportunity to be heard. Sandy
Beach, 70 Haw. at 378, 773 P.3d at 261.
As BLNR and A&B correctly point out, this court has held
that due process is not “fixed” but is “flexible and calls for
such procedural protections as the particular situation
demands.” Id. And in this particular situation, they argue,
Sierra Club’s participation in the trial challenging BLNR’s
renewal of the RPs for 2019 and 2020, as well as their
participation in the general public commentary at the
November 13, 2020 public meeting provided sufficient procedure
to safeguard Sierra Club’s property interest from erroneous
deprivation. The ICA majority held that, under these
circumstances, a contested case hearing was not required by law
because such a hearing would have provided “minimal additional
protection” of Sierra Club’s constitutionally protected property
interest. Sierra Club I, 154 Hawaiʻi at 283, 550 P.3d at 249.
We respectfully disagree.
Pursuant to HRS § 91-1, a contested case is defined as “a
proceeding in which the legal rights, duties, or privileges of
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specific parties are required by law to be determined after an
opportunity for agency hearing.” As this court has noted:
A contested case hearing is similar in many respects to a
trial before a judge: the parties have the right to present
evidence, testimony is taken under oath, and witnesses are
subject to cross-examination. It provides a high level of
procedural fairness and protections to ensure that
decisions are made based on a factual record that is
developed through a rigorous adversarial process.
Mauna Kea Anaina Hou, 136 Hawaiʻi at 380, 363 P.3d at 228.
According to DLNR’s own rules, a contested case hearing is
an adversarial judicial process, akin to a trial that permits
cross examination. In contrast to a public meeting, it promotes
in-depth challenges of assertions and mere arguments, and it
facilitates the rejection of supposition or conjecture in favor
of presenting data and evidence and testing of its veracity and
methodologies than mere discussion and general commentary
affords. See Hawaiʻi Administrative Rules (HAR) §§ 13-1-32 (eff.
2009) (“Conduct of Hearing”); 13–1–32.3 (eff. 2009)
(“Discovery”); 13-1-33 (eff. 2009) (“Procedure for Witnesses”),
for example; see also DJ v. CJ, 147 Hawaiʻi 2, 19, 464 P.3d 790,
807 (2020) (“Cross-examination is the ‘greatest legal engine
ever invented for the discovery of truth.’”). Such adversarial
testing of evidence and challenging of witnesses simply does not
occur in a public meeting calling for commentary.
We hold that in assessing the second Sandy Beach factor,
the risk of erroneous deprivation of Sierra Club’s property
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interest through the procedures that were used was high.
First, given the importance of the water resources at
issue, and Sierra Club’s property interests at stake, a BLNR
public hearing was an inadequate safeguard and fell short of a
contested case hearing’s meaningful opportunity to be heard.
HAR § 13-1-2(a) (eff. 2009) defines a BLNR “public hearing” as
“a hearing required by law in which members of the public
generally may comment upon the subject matter of the hearing.”
At the November 13, 2020 public meeting, Sierra Club members and
counsel did provide general comment along with DLNR staff, A&B
representatives, and members of the public. However, on this
record, that public hearing did not constitute an opportunity to
be heard in a “meaningful manner.”
Second, the Environmental Court determined that Sierra Club
was persuasive in that changed circumstances and new evidence
arising from the renewal process for the 2021 RPs “[were]
relevant and [were] not insignificant.” The court highlighted
relevant “new evidence,” including the agency’s Division of
Aquatic Resources recommending that “restoring four more of the
streams should be a high priorty[;]” and that recent reports
from A&B showed actual water usage that contrasted with amounts
of estimated water use. Further, the Environmental Court noted
that “[a] new issue of defining ‘waste’ to expressly exclude
system losses and evaporation was also up for consideration with
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the permits at issue.”
The contrast between the continuing condition from the
prior RPs imposed on the 2021 RPs that “[t]here shall be no
waste of water[; and all] water diverted shall be put to
beneficial agricultural use or municipal use,” with BLNR’s new
condition that “[s]ystem losses and evaporation shall not be
considered as a waste of water,” bears examination, as it is
unclear from the record how water waste for 2020 was no longer
considered water waste for 2021. This change in the definition
of water waste alone weighs in favor of additional and
meaningful process subsequent to the bench trial relating to the
2019 and 2020 RPs, in contrast to the procedure actually
afforded Sierra Club at the November 2020 public meeting, which
did not allow for the examination of any of the fourteen
“testifying” witnesses. In addition to the witnesses, the ICA
noted “over 13,000 pages of material” related to the permits was
also received by the Board. Sierra Club further asserts that
the 45 mgd rate of water BLNR approved for A&B to divert with
the 2021 RPs was not commensurate with the actual water use data
submitted by A&B in its quarterly reports to the agency. The
record supports and bears this out.
We agree with the Environmental Court’s assessment that
there were relevant and significant new conditions in the 2021
RPs and changed circumstances affecting Sierra Club’s
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constitutionally protected property interest as implicated in
BLNR’s renewal of A&B’s RPs. The RPs at issue before the Board
were for 2021. The bench trial was for the 2019 and 2020
permits. Based on the record, as the ICA dissent noted,
“[t]here was risk of erroneous deprivation even though the
duration of the [RPs] was short, where the [RPs] had been
continued annually for twenty years with no prior contested case
hearing ever having been conducted on the constitutional
interests Sierra Club sought to protect in this case.” Sierra
Club I, 154 Hawaiʻi at 286, 550 P.3d at 252. A contested case
hearing on this new evidence and new RP conditions subsequent to
the 2019 and 2020 RPs would have provided Sierra Club with a
meaningful opportunity to challenge and clarify the agency’s
fact-finding, reasoning, and conclusions on these matters; to
address pages of submitted material; and to cross-examine
witnesses, thereby reducing the risk of an erroneous deprivation
of its property interest.
In light of the importance of Sierra Club’s asserted
protected property interest, the new conditions, changed
circumstances, and continuation of the RPs for over twenty
years, we conclude that the prior bench trial, short duration of
the RPs, and BLNR’s November 13, 2020 public meeting did not
provide reasonable protection from the risk of an erroneous
deprivation of Sierra Club’s constitutionally protected property
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interest in a clean and healthful environment.
b. The government’s interest and burdens related to
a contested case hearing did not outweigh the
additional protections a hearing could provide to
Sierra Club.
The third Sandy Beach factor relates to the government’s
interest, including the burden additional due process safeguards
would involve. A&B and BLNR argue that the ICA majority
properly determined that the fiscal and administrative burden on
the government would be significant, outweighing the small
benefit (if any) of more procedure in the form of a contested
case hearing. The ICA further noted the potential burden on the
County if a contested case hearing is not concluded before the
RPs expire. Sierra Club I, 154 Hawaiʻi at 281-83, 550 P.3d at
247-49.
The burden of a contested case hearing undoubtedly includes
financial and administrative costs, which the ICA majority
correctly recognized. These burdens include written notice to
parties by registered mail, the requirement that the agency make
findings of fact and conclusions of law, and the right of
parties to file exceptions and present argument to officials
rendering the hearing’s final decision. However, we also note
and agree with the ICA dissent’s observation that an agency
hearing officer has the power to conduct a contested case
hearing in an efficient and judicious manner, appropriate to the
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facts and circumstances of each case. The hearing officer
retains significant control over the evidentiary proceedings
with the discretion “[t]o avoid unnecessary or repetitive
evidence,” and the authority to limit the number of witnesses
and the extent of witness examinations. HAR § 13-1-32(h) (eff.
2009). In this way, the burdens on the government can be
appropriately calibrated and mitigated by the agency and
hearings can be conducted efficiently and expeditiously.
Further, as HRS § 171-55 requires that BLNR articulate how
the RPs’ conditions and the rent charged are in the best
interest of the state, the government’s interest in making that
determination is advanced by a contested case hearing. On this
record, we conclude the burdens on the government of a contested
case hearing for Sierra Club in this matter can be reasonably
mitigated in a contested case hearing and do not outweigh the
additional protections a contested case would provide to Sierra
Club.
Therefore, we hold that the ICA majority’s determination
that balancing the “minimal additional protection” a contested
case hearing would provide against the burden on the government
weighed against Sierra Club was erroneous. On this record, a
contested case hearing was required by law in the matter of
BLNR’s renewal of A&B’s RPs for 2021.
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c. The contested case hearing required by law needed
to be held prior to BLNR’s renewal of A&B’s RPs
for 2021.
Once a contested case hearing is mandated, due process
requires that the petitioner be afforded the hearing at a
meaningful time “before governmental deprivation of a
significant property interest.” Sandy Beach, 70 Haw. at 378,
773 P.3d at 261.
In Mauna Kea Anaina Hou, BLNR voted to approve tentative
permits for the applicant to build a telescope on Mauna Kea then
directed a contested case hearing be held. 136 Hawaiʻi at 380,
363 P.3d at 228. BLNR subsequently held a contested case
hearing on the permits. Id. On appeal, this court observed
that “BLNR put the cart before the horse when it approved the
permit before the contested case hearing was held. Once the
permit was granted, [petitioners] were denied the most basic
element of procedural due process.” Id. at 391, 363 P.3d at
239.
Here, as in Mauna Kea Anaina Hou, BLNR’s utilized procedure
was inconsistent with the statutory definition of a contested
case hearing as defined in our administrative procedure law,
where a contested case is “a proceeding in which the legal
rights, duties, or privileges of specific parties are required
by law to be determined after an opportunity for agency
hearing.” HRS § 91-1.
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We hold that constitutional due process required that
Sierra Club’s contested case hearing should have been held prior
to BLNR’s renewal of the RPs for 2021.
B. The Environmental Court had HRS § 91-14(g) jurisdiction
over the 2021 RPs and did not err in exercising its
statutory and equitable authority to modify their
conditions pending remand to BLNR.
The question of jurisdiction is a matter of law reviewed do
novo. The ICA majority held that “[t]he Environmental Court did
not have [HRS § 91-14] jurisdiction over Sierra Club’s appeal
from BLNR’s decision to continue the Permits for 2021, because
that decision was not made in a contested case and did not need
to be made after a contested case hearing.” Sierra Club I, 154
Hawaiʻi at 283, 550 P.3d at 249. The ICA majority concluded that
absent a formal contested case hearing, the Environmental Court
had no jurisdiction over Sierra Club’s appeal from BLNR’s
approval of the RPs. Id. We respectfully disagree.
HRS § 91-14(a) provides in relevant part that “[a]ny person
aggrieved by a final decision and order in a contested case or
by a preliminary ruling of the nature that deferral of review
pending entry of a subsequent final decision would deprive
appellant of adequate relief is entitled to judicial review
under this chapter[.]” As discussed above, Sierra Club’s
request for a contested case hearing was required by law before
the Board renewed the 2021 RPs. BLNR’s decision-making
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proceedings on the RPs did not end with the denial of Sierra
Club’s request for a contested case hearing, but continued with
the Board voting to renew the RPs, after which there was nothing
further to be accomplished. BLNR’s vote to renew A&B’s RPs was
the consummation of the agency’s decision-making process on the
RP holdovers for 2021. See U.S. Fish & Wildlife Serv. v. Sierra
Club, Inc., 592 U.S. 261, 268-269 (2021). Simply put, BLNR’s
denial of Sierra Club’s hearing request was followed by agency
action that ended the proceedings. 13
In Kilakila, this court reaffirmed that an agency’s
subsequent decision on a given matter in the absence of a
contested case hearing required by due process constitutes a
“final decision and order” from which an aggrieved party may
appeal pursuant to HRS § 91-14. 131 Hawaiʻi at 203, 317 P.3d at
37. In that case, we held that where BLNR voted to grant a
permit without holding a contested case hearing requested by a
party, “BLNR effectively rendered a final decision and order
within the meaning of HRS 91-14,” and that party had the right
to appeal to the circuit court. Id. at 196, 317 P.3d at 30.
In the instant case, BLNR’s vote to renew A&B’s RPs for
13 No party on appeal to the ICA or this court has asserted the case was moot, despite the expiration of the 2021 RPs. We note and would affirm the ICA’s sua sponte analysis that mootness did not bar HRS § 91-14(g) appellate jurisdiction over Sierra Club’s appeal, as both the public interest and “capable of repetition, yet evading review” exceptions applied.
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2021 after denying Sierra Club’s request for a contested case
hearing was properly within the Environmental Court’s
jurisdiction on HRS § 91-14 review. This determination is
consistent with applying the four-prong test for jurisdiction to
the facts of this appeal. See Pub. Access Shoreline Hawaii v.
Hawaiʻi Cnty. Plan. Comm’n, 79 Hawaiʻi 425, 431, 903 P.2d 1246,
1252 (1995). “‘[T]here are four requirements for judicial
review over an agency appeal: a contested case hearing,
finality, compliance with agency rule, and standing.’” Cmty.
Ass’ns of Hualalai, Inc. v. Leeward Plan. Comm’n (Hualalai), 150
Hawaiʻi 241, 255, 500 P.3d 426, 440 (2021) (quoting MECO, 141
Hawaiʻi at 258, 408 P.3d at 10).
Here, BLNR’s decision to renew A&B’s RPs was made in a
contested case within the meaning of HRS § 91-14, where A&B’s
rights, duties and privileges were determined by the Board’s
approval of A&B’s RPs for 2021. See Kilakila, 131 Hawaiʻi at
202, 317 P.3d at 27; see also, Hualalai, 150 Hawaiʻi at 255, 500
P.3d at 440 (“[A]bsence of a formal contested case hearing does
not preclude a finding that the proceeding was a contested
case.”). As to the third and fourth requirements for
HRS § 91-14 appellate jurisdiction, no party disputes that
Sierra Club followed BLNR’s rules in properly and timely
requesting a contested case hearing. Further, the ICA opinion
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recognized that Sierra Club had standing to bring an HRS § 91-14
appeal. Thus, it remains to determine if Sierra Club’s appeal
was taken from a final decision made by the agency.
In Hualalai, this court reiterated that a final decision or
order is one that ends the proceedings, “leaving nothing further
to be accomplished.” 150 Hawaiʻi at 256, 500 P.3d at 441 (citing
Gealon v. Keala, 60 Haw. 513, 520, 591 P.2d 621, 626 (1979)).
As Justice Acoba correctly noted in his concurring opinion in
Kilakila, “[T]his court has taken a functional approach to what
can be considered a contested case hearing for purposes of
judicial review, consistent with the policy of favoring judicial
review of administrative actions.” 131 Hawaiʻi at 214, 317 P.3d
at 48 (Acoba, J. concurring) (internal quotation omitted). We
also take a functional approach to what BLNR’s final decision
was in this case.
Here, BLNR wrongfully denied Sierra Club’s request for a
contested case hearing and then voted to renew A&B’s RPs,
leaving no further agency decision-making to be accomplished on
that matter. The RP renewal consummated the administrative
proceeding, with the contested case hearing denial a preliminary
agency decision along the way to that final decision. We
conclude BLNR’s actions were a final decision and order from
which Sierra Club had the right to appeal BLNR’s decision to
renew the RPs for 2021 and BLNR’s denial of Sierra Club’s
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request for a hearing. See Hualalai, 150 Hawaiʻi at 256, 500
P.3d at 441 (“An agency’s failure to deny or grant a party’s
request for a contested case hearing followed by agency action
that effectively ends the proceeding may also constitute a final
decision.”). Therefore, we hold that the Environmental Court
had HRS § 91-14(g) jurisdiction over the Board’s decision to
renew the RPs for 2021.
We further hold that in addition to its HRS § 91-14
authority over the RPs, the Environmental Court had equitable
authority to temporarily modify the rate of water being diverted
by A&B while the RP requests were pending a decision by BLNR on
remand, which it appropriately and judiciously exercised in this
matter.
In a HRS § 91-14 appeal of an agency decision, upon
reviewing the record, a circuit court has the statutory
authority to
affirm the decision of the agency or remand the case with
instructions for further proceedings; or it may reverse or modify
the decision and order if the substantial rights of the
petitioners may have been prejudiced because the administrative
findings, conclusions, decisions, or orders are: . . . [m]ade
upon unlawful procedure; or . . . [a]rbitrary, or capricious, or
characterized by abuse of discretion or clearly unwarranted
exercise of discretion.
HRS § 91-14(g)(3), (6) (emphasis added). Further, “[w]here a
court remands a matter to an agency for the purpose of
conducting a contested case hearing, the court may reserve
jurisdiction and appoint a master or monitor to ensure
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compliance with its orders.” HRS § 91-14(i) (2012 & Supp.
2019).
Here, the Environmental Court was faced with RPs that had
been renewed pursuant to a constitutionally unlawful procedure
that had to be vacated. At the same time, it also recognized
that vacating the RPs would create a vacuum and could have
unintended negative consequences on those dependent on A&B’s
diversion of water from East Maui’s streams.
After a lengthy review of a voluminous agency record and
receiving briefing and hearing oral argument from four different
parties, the Environmental Court determined that Sierra Club
“sufficiently demonstrated that it and its members [were]
adversely affected by the continuation of the [RPs], the
diversion of streams, and inadequate permit conditions.” The
Environmental Court thus had authority under HRS § 91-14(g) to
address BLNR’s erroneous decision and to exercise its equitable
powers.
In its Interim Decision, the Environmental Court ordered
the 2021 RPs vacated and then stayed the effective date of that
order. In its subsequent conclusions and order, the
Environmental Court noted it had asked the parties to weigh in
on “whether and how the permits [could] be modified to avoid
chaos” with fresh water delivery to those on Maui who relied on
it.
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The Environmental Court was cognizant of the potential for
unintended consequences or chaos arising from its order vacating
the invalid water RPs that were approved pursuant to an unlawful
procedure. Therefore, in its August 23, 2021 decision and
order, after weighing these risks and the equities, the
Environmental Court temporarily modified the permits instead of
vacating them in toto, thus mitigating the potential risk to the
parties and the dependent communities. The Environmental Court
exercised its equitable authority to temporarily modify the RPs’
stream diversion rate to 25 mgd (averaged monthly) and retained
HRS § 91-14(g) and (i) jurisdiction over the RPs to further
modify them, if necessary or at the request of the parties,
until “further order of the court, or until the contested case
hearing on the permits conclude[d] and a decision or order [was]
issued.”
In addition to its HRS § 91-14(g) powers to review an
agency’s decision, HRS § 604A-2(b) provides in relevant part:
In any case in which it has jurisdiction, the environmental
courts shall exercise general equity powers as authorized
by law. Nothing in this chapter shall be construed to
limit the jurisdiction and authority of any judge,
designated as judge of an environmental court, to matters
within the scope of this chapter.
Further, circuit courts are empowered to “make and issue all
orders and writs necessary or appropriate in aid of their
original or appellate jurisdiction,” as well as to
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make and award such judgments, decrees, orders, and
mandates, issue such executions and other processes, and do
such other acts and take such other steps as may be
necessary to carry into full effect the powers which are or
shall be given to them by law or for the promotion of
justice in matters pending before them.
HRS § 603-21.9(1), (6) (2016).
In Fleming v. Napili Kai, Ltd., this court noted that
equity jurisprudence “is not bound by the strict rules of the
common law, but can mold its decrees to do justice amid all the
vicissitudes and intricacies of life. The principles upon which
it proceeds are eternal; but their application in a changing
world will necessarily change to meet changed situations.” 50
Haw. 66, 70; 430 P.2d 316, 319 (1967) (citations and quotations
omitted).
In the present case, the invalid water diversion RPs raised
exceptionally fraught risks if they were suddenly vacated.
Recognizing that A&B’s delivery of fresh water to Central Maui
served numerous essential needs, the Environmental Court
assessed the RPs’ importance, weighed the risks, and molded its
decree in such form as to conserve the equities of the parties
and protect the interests of the community.
We hold that the Environmental Court did not err. The
court properly exercised its statutory and equitable authority
pursuant to HRS § 91-14(g), (i); HRS § 604A-2(b); and
HRS § 603-21.9.
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C. Sierra Club was entitled to attorney fees and costs under
the private attorney general doctrine.
The ICA majority vacated the Environmental Court’s award of
attorney fees and costs on the premise that Sierra Club was not
entitled to a contested case hearing and that the Environmental
Court did not have jurisdiction over Sierra Club’s appeal from
BLNR’s decision to continue the RPs. Given our prior
discussion, we reverse the ICA majority’s decision on this
issue.
Pursuant to the “American Rule,” each party must pay their
own litigation expenses; but this rule is subject to a number of
exceptions when authorized by statute, rule of court, agreement,
stipulation, or precedent. In re Water Use Permit Applications,
96 Hawaiʻi 27, 29, 25 P.3d 802, 804 (Waiāhole II) (2001).
This court recognizes the equitable rule of the private
attorney general doctrine as the basis for a party’s recovery of
attorney fees under certain circumstances. Sierra Club v. Dep’t
of Transp., 120 Hawaiʻi 181, 218, 202 P.3d 1226, 1263 (2009)
(Superferry II). Specifically, we apply three basic factors in
considering such an award: (1) the strength or societal
importance of the public policy vindicated by the litigation,
(2) the necessity for private enforcement and the magnitude of
the resultant burden on the plaintiffs, and (3) the number of
people standing to benefit from the decision. Id.
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“Although a plaintiff may not sustain his entire claim, if
judgment is rendered for him, he is the prevailing party for
purposes of costs and [attorney] fees.” Id. at 215, 202 P.3d at
1260 (cleaned up). The Environmental Court held that the BLNR
wrongly denied Sierra Club’s contested case petition. It then
vacated the 2021 RPs, and upon stay, modified the maximum rate
of diversion from 45 mgd to 25 mgd.
On this record, we find that Sierra Club has met all three
factors of the private attorney general doctrine and affirm the
Environmental Court’s reasoning. Sierra Club’s appeal
vindicated important public policies, including defense of a due
process right to a contested case hearing before BLNR’s renewal
of A&B’s “temporary” RPs to divert fresh water from East Maui
streams. Private enforcement of these policies was essential,
as no other party sought to test BLNR’s reasoning behind setting
a 45 mgd cap on water diversion and the change in the agency’s
definition of water waste. And Sierra Club’s advocacy on their
members’ behalf could benefit the public generally, for example,
in assessing potential water waste and vindicating procedural
rights.
We conclude that the Environmental Court did not abuse its
discretion in awarding attorney fees and costs to Sierra Club.
We reverse the ICA’s vacating of the Environmental Court’s two
fee orders.
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V. Conclusion
Accordingly, we reverse in relevant part the ICA’s May 13,
2024 Judgment on Appeal. And we affirm the Environmental
Court’s May 28, 2021 Interim Decision on Appeal; July 30, 2021
Order Modifying Permits; August 23, 2021 Findings of Fact,
Conclusions of Law and Order; December 27, 2021 supplemental
order extending the end date for the Permits; and February 2,
2022 and July 12, 2022 orders awarding Sierra Club attorney fees
and costs.
David Kimo Frankel /s/ Mark E. Recktenwald for petitioner Sierra Club
/s/ Sabrina S. McKenna
Julie H. China and
Melissa D. Goldman for /s/ Todd W. Eddins respondent Board of Land
and Natural Resources /s/ Vladimir P. Devens
Calvert G. Chipchase, /s/ Clarissa Y. Malinao Christopher T. Goodin and
Trisha H.S.T. Akagi for
respondents Alexander &
Baldwin, Inc. and East Maui
Irrigation Co., LLC
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