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'O Haleakala v. Board of Land & Natural Resources

Supreme Court of Hawaii

December 13, 2013

KILAKILA 'O HALEAKALA, Petitioner/Appellant-Appellant,
v.
BOARD OF LAND AND NATURAL RESOURCES, THE DEPARTMENT OF LAND AND NATURAL RESOURCES, AND WILLIAM AILA, IN HIS OFFICIAL CAPACITY AS CHAIRPERSON OF THE BOARD OF LAND AND NATURAL RESOURCES, UNIVERSITY OF HAWAII, AND THOMAS M. APPLE, IN HIS OFFICIAL CAPACITY AS CHANCELLOR OF THE UNIVERSITY OF HAWAI'I AT MANOA, Respondents/Appellees-Appellees.

CERTIORARI TO THE INTERMEDIATE COURT OF APPEALS (CAAP-11-0000353; CIV. NO. 10-1-2651)

David Kimo Frankel (Sharla Ann Manley and Camille Kaima2lie Kalama with him on the briefs) for petitioner

Linda L.W. Chow (Donna H. Kalama and Julie H. China with her on the briefs) for respondents Board of Land and Natural Resources, Department of Land and Natural Resources, and William Aila, in his official capacity as Chairperson of the Board of Land and Natural Resources Lisa Woods Munger (Bruce Y. Matsui, Randall K. Ishikawa, Lisa A. Bail and Adam K. Robinson with her on the briefs) for respondents University of Hawai'i and Thomas M. Apple, in his official capacity as Chancellor of the University of Hawai'i at Manoa

RECKTENWALD, C.J., NAKAYAMA, McKENNA, AND POLLACK, JJ., WITH ACOBA, J.

OPINION

NAKAYAMA, J.

It is well established that under Hawai'i Revised Statutes (HRS) § 91-14(a), "[a]ny person aggrieved by a final decision and order in a contested case ... is entitled to judicial review thereof under this chapter[.]" In Kaleikini v. Thielen, 124 Hawai'i 1, 26, 237 P.3d 1067, 1092 (2010), this court most recently reaffirmed the principle that a denial of a request for a contested case hearing (or a request to intervene and participate in one) also constitutes a "final decision and order" of an administrative agency from which the aggrieved party may appeal pursuant to HRS § 91-14. In this case, we must consider whether a circuit court has jurisdiction over an HRS § 91-14 appeal when an agency makes a final decision on a given matter -- in this case, an application for a conservation district use permit -- without either granting or denying an interested party's request for a contested case hearing on the matter.

This case concerns a proposed project of Respondent/Appellee-Appellee University of Hawai'i (UH) to construct an advanced solar telescope, observatory, and associated facilities near the summit of Haleakala on Maui. Petitioner/Appellant-Appellant Kilakila 'O Haleakala (KOH), "an organization dedicated to the protection of the sacredness of the summit of Haleakala[, ]" opposed UH's conservation district use application (CDUA or application) to Respondent/Appellee-Appellee Department of Land and Natural Resources (DLNR or the department) for a conservation district use permit (CDUP or permit) to build on the project site. KOH also requested and formally petitioned DLNR for a contested case hearing on the application in order for Respondent/Appellee-Appellee Board of Land and Natural Resources (BLNR or the board) to make a decision on the application after having considered evidence on the record, including exhibits and witness testimony. Without either granting or denying KOH's petition, BLNR considered UH's application as an agenda item at a regularly scheduled public board meeting and proceeded to vote to grant the permit. KOH orally renewed its request for a contested case hearing immediately after the vote and submitted another formal written petition the next day. KOH also filed an agency appeal in the Circuit Court of the First Circuit[1] seeking remand to BLNR for a contested case hearing, a stay of the permit, and reversal of the permit. The circuit court dismissed the agency appeal for lack of jurisdiction because there had been no contested case hearing. The circuit court also concluded that KOH's appeal was mooted by the fact that BLNR had subsequently granted KOH's request for a contested case hearing subject to a preliminary hearing on KOH's standing. KOH appealed the circuit court's decision to the ICA, and the ICA affirmed on the ground that, under HRS § 91-14, the circuit court did not have jurisdiction because no contested case hearing had been held.

Now before this court, KOH maintains that BLNR's decision to grant the permit was "a final decision and order in a contested case" pursuant to HRS § 91-14; as a result, a separate contested case hearing was not required for it to appeal and for the circuit court to have jurisdiction over the appeal pursuant to HRS § 91-14. Although BLNR did grant KOH's request for a contested case hearing subsequent to the board meeting at which it issued the permit, BLNR has not ever stayed or vacated the permit. Thus, KOH's position is that it may still seek those remedies and therefore that this appeal is not moot. Based on the discussion herein, we agree that the case is not moot, that a contested case hearing should have been held prior to the vote, and that the circuit court erred in dismissing KOH's appeal. Because BLNR voted to grant the permit without having held a contested case hearing as requested by KOH prior to taking that vote, BLNR effectively rendered a final decision and order within the meaning of HRS § 91-14, and KOH at that point had the right to appeal to circuit court.

I. BACKGROUND

A. Factual and Procedural Background

On March 10, 2010, UH submitted an application to DLNR for its Advanced Technology Solar Telescope (ATST or telescope) project at Haleakala on the island of Maui. The telescope project "involves the construction, installation and operation of a solar telescope and associated infrastructure near the summit of Haleakala." KOH, which "is an organization dedicated to the protection of the sacredness of the summit of Haleakala[, ]" submitted a written petition to DLNR on May 24, 2010 for a contested case hearing on the application. "On June 10, 2010, Sam Lemmo of DLNR rejected the petition for a contested case hearing, stating that a hearing was not required by law[.]" Subsequently, on July 8, 2010, KOH "re-submitted its petition for a contested case hearing on the ATST project because Mr. Lemmo did not have authority to reject the petition." DLNR did not take any action on the July 8 resubmission. On August 26, 2010, DLNR held a public hearing on the application in Pukalani, Maui, KOH "testified in opposition to the project, citing its impacts on resources in the conservation district, and orally requested a contested case hearing." DLNR persisted in taking no action on KOH's requests for a contested case hearing.

On November 22, 2010, at a regularly scheduled board meeting, BLNR considered UH' s application for the telescope project but deferred any decisions on the application until the next scheduled meeting. At the next regularly scheduled board meeting on December 1, 2010, BLNR again considered UH's application; at that meeting, BLNR voted to grant the application and thereafter issued a permit to UH. Immediately after the vote, KOH, through counsel, again orally requested a contested case hearing. The next day, December 2, 2010, KOH again submitted a written petition for a contested case hearing pursuant to Hawai'i Administrative Rules (HAR) § 13-1-29.[2]

On December 13, 2010, KOH filed an appeal in circuit court, pursuant to HRS § 91-14, [3] "from the final decision of BLNR on December 1, 2010 (1) effectively denying the timely request of [KOH] for a contested case hearing and (2) granting [UH]'s conservation district use application (CDUA MA 3542)."[4] In its statement of the case filed with the notice of appeal, KOH indicated that it was asking the circuit court to:

A. Remand the case with instructions to the Chairperson, BLNR and DLNR to:
(i) properly apply the criteria set forth in HAR § 13-5-30;
(ii) provide [KOH] with a contested case hearing with all the procedural protections provided in HAR §§ 13-1-28 [to] 13-1-39 and HRS §[§] 91-9 [to] 91-13.
B. Stay the decision granting the conservation district use permit.
C. Reverse the decision granting the conservation district use permit.

On January 4, 2011, UH filed a motion to dismiss KOH's notice of appeal in the circuit court. In support of the motion, UH argued that the appeal had to be dismissed for lack of jurisdiction and on ripeness grounds because no contested case hearing had been held, and further that KOH's request for such a hearing had not yet been decided. On January 11, 2011, BLNR filed a joinder to UH's motion to dismiss.

In its February 10, 2011 memorandum in opposition to the motion to dismiss, KOH argued that Hawai'i case law does not require a formal contested case hearing as a necessary condition precedent to a chapter 91 appeal when the appellant has done all it can to participate in the agency proceedings and preserve its right to appeal; accordingly, in this case, KOH argued that the circuit court had jurisdiction to determine whether the permit was properly granted even in the absence of a formal contested case hearing. KOH therefore argued that the appeal was ripe because even without a formal contested case hearing, BLNR's decision to grant the permit at the December 1, 2010 meeting constituted final agency action that was therefore appealable. KOH further argued that BLNR's granting of the permit had the mark of finality because once granted, a permit can only be revoked if BLNR is ordered to do so by a court or if the permit applicant fails to comply with a condition of the permit. KOH also noted that a contested case hearing on a matter, when such a hearing is required, must take place before an agency's decision on that matter; in this case, therefore, "[t]he granting of a permit to develop in the face of a [pending] request for a contested case hearing effectively denies the request for the hearing." Furthermore, as KOH argued, "[n]othing in BLNR's rules would allow it to: first, grant a conservation district use permit; second, conduct a formal contested case hearing; and then revoke the conservation district use permit if the party challenging the conservation district use application prevailed."

Meanwhile, on February 11, 2011, BLNR granted KOH's request for a contested case hearing and authorized the appointment of a hearing officer to conduct all hearings regarding UH's application, subject to a preliminary hearing to determine whether KOH had standing to participate in a contested case hearing. On February 15, 2011, UH replied to KOH's memo in opposition, arguing that KOH's appeal was now moot because BLNR's February 11 grant of KOH's contested case hearing request afforded KOH the relief it was seeking from the circuit court.

On February 18, 2011, the circuit court held a hearing on the motion to dismiss. Before ruling, the court expressed concerns regarding the implementation of the permit in light of the pending contested case hearing. BLNR's counsel asserted that the contested case hearing would be the appropriate venue for pursuing a possible stay of the permit. The circuit court then granted the motion to dismiss, but it encouraged BLNR to stay the permit until the contested case hearing concluded. KOH timely appealed to the ICA.

B. The ICA's June 28, 2012 Memorandum Opinion

On appeal to the ICA, KOH raised one general point of error: that the circuit court erred in dismissing its agency appeal for lack of jurisdiction. In support of that point of error, KOH argued, adhering to its position in circuit court, that a party can appeal pursuant to HRS chapter 91 even when a formal contested case hearing has not been held, and that the circuit court had jurisdiction to rule on whether BLNR properly granted the permit even in the absence of a formal contested case hearing; that the case was ripe and not moot; that KOH had exhausted the administrative remedies that were available to it; and that BLNR could not grant a permit before holding a contested case hearing.

In response, UH argued that the circuit court did lack jurisdiction because KOH was not a "person aggrieved by a final decision and order in a contested case" pursuant to HRS § 91-14. Specifically, UH noted that "[a]mong its prerequisites, [HRS § 91-14(a)] requires that a contested case must have occurred before appellate jurisdiction may be exercised." UH also argued that the agency appeal was moot because a contested case hearing was in fact granted. Similarly, UH argued that the appeal was not ripe because at the time of its filing, no contested case hearing had been held; moreover, because a contested case hearing had been granted, the appeal would remain unripe until BLNR issued a final decision and order from which KOH could then appeal.

In a memorandum opinion, the ICA affirmed the final judgment of the circuit court dismissing KOH's agency appeal for lack of jurisdiction. The ICA's brief analysis focused on the following passage explaining the requirements that an appellant must meet in an HRS § 91-14 appeal from an agency to the circuit court:

first, the proceeding that resulted in the unfavorable agency action must have been a contested case hearing -- i.e., a hearing that was (1) required by law and (2) determined the rights, duties, and privileges of specific parties; second, the agency's action must represent a final decision and order, or a preliminary ruling such that deferral of review would deprive the claimant of adequate relief; third, the claimant must have followed the applicable agency rules and, therefore, have been involved in the contested case; and finally, the claimant's legal interests must have been injured -- i.e., the claimant must have standing to appeal.

Kilakila 'O Haleakala v. Bd. of Land & Natural Res., No. CAAP-11-0000353, 2012 WL 2476802, at *2 (Haw. App. June 28, 2012) (mem. op.) (emphasis in original) (quoting Kaleikini, 124 Hawai'i at 16-17, 237 P.3d at 1082-83 (quoting Pub. Access Shoreline Haw, v. Haw. Cnty. Planning Comm'n (RASH), 79 Hawai'i 425, 431, 903 P.2d 1246, 1252 (1995))) (internal quotation marks omitted).

The ICA relied solely on the first requirement in its disposition of the case. It stated that "[b]ecause KOH does not meet the first criteria [sic] -- that the agency action stemmed from a contested case hearing -- we look no further and conclude [that the] circuit court did not err when it dismissed the case for lack of jurisdiction." Id. KOH timely filed its application for writ of certiorari on September 27, 2012.

II. STANDARD OF REVIEW A. Jurisdiction

"''The existence of subject matter jurisdiction is a question of law that is reviewable de novo under the right/wrong standard.'" Kaniakapupu v. Land Use Comm'n, 111 Hawai'i 124, 131, 139 P.3d 712, 719 (2006) (quoting Aames Funding Corp. v. Mores, 107 Hawai'i 95, 98, 110 P.3d 1042, 1045 (2005)).

III. DISCUSSION

On certiorari review in this court, KOH makes the same arguments with regard to the jurisdiction of the circuit court to hear its initial HRS § 91-14 agency appeal from BLNR and adds that the ICA has erred in affirming the circuit court's judgment.

Nevertheless, UH maintains in this court that KOH's appeal is moot. Because mootness is a matter of justiciability and implicates the question of whether this court may validly render a decision on appeal, we consider this issue first.

A. This case is not moot

UH argues, as it did below, that because BLNR ultimately granted KOH a contested case hearing, the reviewing court can not grant effective relief. UH submits that "[KOH] asked the [c]ircuit [c]ourt to remand the case with instructions to [BLNR] to provide [KOH] with a contested case hearing." UH thus concluded that because "[KOH] received the relief it requested on February 11, 2011 when [BLNR] granted its request for a contested case hearing . . . the instant appeal falls squarely within the definition of moot."

KOH responds, as it also did below, that the case is not moot. In fact, it responded to UH's argument to this court by noting that it "requested not only that a contested case be provided, but also that the [permit] be stayed and reversed." KOH further notes that ", [a]s long as all of the construction authorized under the . . . permit is not completed, the appeal presents an adversity of interests and possibly affords the appellant an effective remedy.'"

Crucially, BLNR has neither stayed nor revoked the permit, not even when KOH appealed or BLNR granted KOH a contested case hearing on the already-issued permit. Because the permit remains in effect despite BLNR's failure to hold a contested case hearing before voting to grant the permit, UH can still build on Haleakala and KOH can still seek effective relief against UH. Consequently, we agree with KOH's position and conclude that this case is not moot. As a result, we now turn to the substance of KOH's appeal.

B. The circuit court erred in dismissing, and the ICA erred in affirming the dismissal of, KOH's agency appeal based strictly on the absence of a formal contested case hearing

KOH argues to this court that although it requested and petitioned for a contested case hearing prior to BLNR's vote on UH's application and although BLNR did not hold a contested case hearing before conducting the vote at the December 1, 2010 regularly scheduled board meeting, the proceedings that did take place before the BLNR nevertheless did constitute a contested case from which KOH can appeal to the circuit court pursuant to HRS § 91-14. Moreover, KOH maintains that pursuant to HRS chapter 91, as well as PASH and Kaleikini, an appeal may be taken even in the absence of a formal contested case hearing if the appellant has followed the procedures necessary for it to preserve its right to appeal. Indeed, much of KOH's argument follows the test this court has previously applied in PASH and Kaleikini, and it is to that test which we must now turn.

To determine whether a circuit court can exercise jurisdiction over an appeal brought pursuant to HRS § 91-14, we consider whether the following requirements have been met:

first, the proceeding that resulted in the unfavorable agency action must have been a contested case hearing -- i.e., a hearing that was (1) required by law and (2) determined the rights, duties, and privileges of specific parties; second, the agency's action must represent a final decision or order, or a preliminary ruling such that deferral of review would deprive the claimant of adequate relief; third, the claimant must have followed the applicable agency rules and, therefore, have been involved in the contested case; and finally, the claimant's legal interests must have been injured -- i.e., the claimant must have standing to appeal.

Kaleikini, 124 Hawaii at 16-17, 237 P.3d at 1082-83 (emphases, brackets, and internal quotation marks omitted) (quoting PASH, 79 Hawai'i at 431, 903 P.2d at 1252) .

1. The BLNR proceedings were a contested case hearing within the meaning of HRS § 91-14

a. "Reguired by law"

In order for an administrative agency hearing to be "''required by law, it may be required by (1) agency rule, (2) statute, or (3) constitutional due process.'" Id. at 17, 237 P.3d at 1083 (quoting Kaniakapupu, 111 Hawai'i at 132, 139 P.3d at 720) (some internal quotation marks omitted).

At the outset, we note that no statute mandates that BLNR conduct public hearings as part of its permitting procedures. See, e.g., HRS § 171-3 (2011); HRS § 171-6 (2011); HRS § 26-15(b) (2009). HRS § 183C-6 (2011), located in the chapter of HRS dealing specifically with conservation district lands, provides, in pertinent part:

(a) The department shall regulate land use in the conservation district by the issuance of permits. (b) The department shall render a decision on a completed application for a permit within one-hundred-eighty days of its acceptance by the department. If within one-hundred-eighty days after acceptance of a completed application for a permit, the department shall fail to give notice, hold a hearing, and render a decision, the owner may automatically put the owner's land to the use or uses requested in the owner's application. When an environmental impact statement is required pursuant to chapter 343, or when a contested case hearing is requested pursuant to chapter 91, the one-hundred-eighty-days may be extended an additional ninety days at the request of the applicant. Any request for additional extensions shall be subject to the approval of the board.

Although HRS § 183C-6(b) does reference the "hold[ing] [of] a hearing" as part of the permitting process for uses in the conservation district, it does not mandate one. The sentence that contains the phrase "hold a hearing" is written as a negative conditional; in other words, if, within 180 days of accepting an application, DLNR does not give notice, does not hold a hearing, and does not render a decision on the application, then the applicant may proceed to use the land in the manner requested. Because some hearings may not be required by law but may nevertheless be held voluntarily, we cannot read the statute to require a hearing for all permit applications in the absence of mandatory language directing the agency to do so.

Indeed, the statutes in HRS chapter 171 governing DLNR and BLNR speak in general terms and delegate rulemaking authority to the agency to devise and promulgate the rules that will govern the agency's procedures in specific situations. We thus next look to those administrative rules for a requirement that a public hearing be held as part of the process of considering an application for a conservation district use permit.

In this particular case, UH seeks through its application to build astronomy facilities near the summit of Haleakala, an area which is classified as being in the general subzone of the conservation district. HAR § 13-5-25, "Identified land uses in the general subzone, " provides, in pertinent part:

(a) In addition to the land uses identified in this section, all identified land uses and their associated permit or site plan approval requirements listed for the protective, limited, and resource subzones also apply to the general subzone, unless otherwise noted.
(c) Identified land uses in the general subzone and their required permits (if applicable), are listed below:
(1) Identified land uses beginning with the letter (A) require no permit from the ...

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