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Sound v. State, Dept. of Human Services

Intermediate Court of Appeals of Hawai‘i

September 13, 2013

Manuel D. SOUND and Thompson Phillip, on behalf of themselves and all similarly situated persons, Plaintiffs-Appellants,
v.
STATE of Hawai‘i, DEPARTMENT OF HUMAN SERVICES, Lillian B. Koller, in her capacity as Director of Human Services, State of Hawai‘i, Department of Human Services, Med-Quest Division, Dr. Kenneth Fink, in his capacity as State of Hawai’, Department of Human Services, Med-Quest Division, Administrator, Defendants-Appellees.

Editorial Note:

This decision has been designated as "Unpublished disposition." in the Pacific Reporter. See HI R RAP RULE 35

Appeal from the Circuit Court of the First Circuit (Civil No. 09-1-2022-08).

Victor Geminiani, Lawyers for Equal Justice J. Blaine Rogers, Zachary A. McNish, (Alston Hunt Floyd & Ing), on the briefs, for Plaintiffs-Appellants.

Heidi M. Rian, John F. Molay, Lee-Ann Brewer, Deputy Attorneys General, on the briefs, for Defendants-Appellees.

NAKAMURA, Chief Judge, FUJISE and LEONARD, JJ.

SUMMARY DISPOSITION ORDER

In an action challenging the validity of certain administrative rules (2009 COFA Rules), Plaintiffs/Appellants Manuel D. Sound and Thompson Phillip (Plaintiffs) appeal from a Circuit Court of the First Circuit (Circuit Court) post-judgment " Order Denying Plaintiffs' Motion for Attorneys' Fees and Costs" filed on July 27, 2010 (Order Denying Fees).[1]

On August 31, 2009, Plaintiffs filed a Complaint seeking declaratory and injunctive relief against Defendants-Appellees State of Hawai‘i, Department of Human Services (DHS), Lillian B. Koller, and Dr. Kenneth Fink (collectively, the State),[2] to prevent the State from implementing the 2009 COFA Rules under two theories: (1) that the State's actions violated Article I, Sections 2 and 5 of the Hawai‘i State Constitution; and (2) the 2009 COFA rules were promulgated in violation of the Hawai‘i Administrative Procedure Act (HAPA), Hawaii Revised Statutes (HRS) § 91-3.[3] On January 26, 2010, the Circuit Court granted partial summary judgment in favor of Plaintiffs on the second of these grounds, declaring that the 2009 COFA Rules were not adopted in conformity with HAPA and were, therefore, invalid. The constitutional claim was thereafter dismissed as moot. The Circuit Court entered Final Judgment on April 19, 2010. The Circuit Court entered the Order Denying Fees on July 27, 2010, without stating its reasoning for doing so. A notice of appeal was timely filed.

On appeal, Plaintiffs argue that their request for attorneys' fees was improperly denied, raising two points of error: (1) the Circuit Court erred in denying Plaintiffs' request for attorneys' fees under the common fund doctrine; and (2) the Circuit Court erred in denying Plaintiffs' request for attorneys' fees under the private attorney general doctrine.

In conjunction with its other arguments, the State contends that Plaintiffs' request for attorneys' fees " is simply a request for monetary damages against the State" and should not be allowed. Although poorly presented and supported in the State's answering brief, this sovereign immunity argument has merit. [4] As the Hawai‘i Supreme Court recently reaffirmed:

Pursuant to the doctrine of sovereign immunity, the sovereign State is immune from suit for money damages, except where there has been a clear relinquishment of immunity and the State has consented to be sued. Bush v. Watson, 81 Hawai‘i 474, 481, 918 P.2d 1130, 1137 (1996) (citations and internal quotation marks omitted). This court has recognized that an award of costs and fees to a prevailing party is inherently in the nature of a daraacre award. Sierra Club v. Dept. of Trans. (Superferry II), 120 Hawai‘i 181, 226, 202 P.3d 1226, 1271 (2009) (quotation marks omitted) (quoting Fought & Co. v. Steel Eng'q & Erection, Inc., 87 Hawai‘i 37, 51, 951 P.2d 487, 501 (1998)). Accordingly, to properly award attorney's fees and costs against the State, there must be ‘ a clear relinquishment’ of the State's immunity[.] Id. (quoting Bush v. Watson, 81 Hawai‘i 474, 481, 918 P.2d 1130, 1137 (1996)....
This court has noted that the State has waived immunity to suit only to the extent as specified in HRS chapters 661 and 662. Taylor-Rice v. State, 105 Hawai‘i 104, 110, 94 P.3d 659, 665 (2004) (citations omitted). HRS § 661-1(1) contains a limited waiver of sovereign immunity for claims against the State of Hawai‘i that are founded upon a statute[.] Garner v. State, Dep't of Educ., 122 Hawai‘i 150, 160, 223 P.3d 215, 225 (App.2009). In determining the extent of the State's waiver of sovereign immunity, this court relies on the following principles derived from federal law:
(1) a waiver of the Government's sovereign immunity will be strictly construed, in terms of its scope, in favor of the sovereign; (2) a waiver of sovereign immunity must be unequivocally expressed in statutory text; (3) a statute's legislative history cannot supply a waiver that does not appear clearly in any statutory text; (4) it is not a court's right to extend the waiver of sovereign immunity more broadly than has been directed by the [the legislature]; and (5) sovereign immunity is not to be waived by policy arguments[.]
Taylor-Rice, 105 Hawai‘i at 110, 94 P.3d at 665 (citations, internal quotation marks, and brackets omitted).
Kaleikini v. Yoshika, 304 P.3d 252

In the instant case, Plaintiffs sought declaratory and injunctive relief pursuant to HAPA's judicial review statute, HRS § 91-7. As discussed below, HRS § 91-7 does not waive the State's sovereign immunity.

In Sierra Club II, the Hawai‘i Supreme Court concluded that the State waived its sovereign immunity pursuant to HRS § 343-7. 120 Hawai‘i at 226-28, 202 P.3d at 1271-73. In Kaleikini, however, the Hawai‘i Supreme Court found that HRS § 6E-13(b) (2009) [5] was distinguishable from HRS § 343-7 because HRS § 6E-13(b) " allows suit to be brought only for a restraining order or injunctive relief," and therefore, a waiver of the State's sovereign immunity could not be similarly implied.[6] Kaleikini, at *11. The Kaleikini Court explained:

It is well settled that a provision allowing for declaratory or injunctive relief is not a waiver of the State's sovereign immunity, but rather an exception to the sovereign immunity doctrine for which no waiver is necessary. [ Sierra Club II ], 120 Hawai‘i at 229 n. 30, 202 P.3d at 1274 n. 30. (" Where a party seeks only injunctive relief, the ability to sue the state does not stem from a waiver of sovereign immunity, but from the fact that sovereign immunity does not bar the suit in the first place." ). Indeed, [ Sierra Club II ] expressly recognized the distinction between a claim brought pursuant to HRS § 343-7 and one seeking only injunctive relief. Id. (noting that the case relied on by the dissent in [ Sierra Club II ], Taomae v. Lingle, 110 Hawai‘i 327, 132 P.3d 1238 (2006), was distinguishable because it involved a suit for injunctive relief and therefore involved " no statutory waiver of sovereign immunity for the underlying action" ).
Id. Id.

Similar to Kaleikini, here, Plaintiffs sought declaratory and injunctive relief pursuant to HAPA's judicial review statute, HRS § 91-7, which provides:

Declaratory judgment on validity of rules. (a) Any interested person may obtain a judicial declaration as to the validity of an agency rule as provided in subsection (b) herein by bringing an action against the agency in the circuit court of the county in which petitioner resides or has its principal place of business. The action may be maintained whether or not petitioner has first requested the agency to pass upon the validity of the rule in question.
(b) The court shall declare the rule invalid if it finds that it violates constitutional or statutory provisions, or exceeds the statutory authority of the agency, or was adopted without compliance with statutory rulemaking procedures.

HRS § 91-7 (2012) (emphasis added). According to its plain language, HRS § 91-7 allows suit to be brought only for declaratory relief, and is therefore distinguishable from HRS § 343-7 and Sierra Club II. Instead, similar to Kaleikini, a waiver of the State's sovereign immunity cannot be implied from HRS § 91-7. See Kaleikini, at *11 (citing Sierra Club II, 120 Hawai‘i at 229 n. 30, 202 P.3d at 1274 n. 30) (" It is well settled that a provision allowing for declaratory or injunctive relief is not a waiver of the State's sovereign immunity, but rather an exception to the sovereign immunity doctrine for which no waiver is necessary." ). Accordingly, HRS § 91-7 does not waive the State's sovereign immunity and, thus, the State's immunity bars Plaintiffs' request for attorney's fees.

For these reasons, the Circuit Court's July 27, 2010 Order Denying Fees is affirmed.


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