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Bridge Aina Le'a, LLC v. State of Hawaii Land USE Commission

United States District Court, D. Hawaii

February 29, 2016

BRIDGE AINA LE’A, LLC, Plaintiff,
v.
STATE OF HAWAII LAND USE COMMISSION; VLADIMIR P. DEVENS, in his individual and official capacity; KYLE CHOCK, in his individual and official capacity; THOMAS CONTRADES, in his individual and official capacity; LISA M. JUDGE, in his individual and official capacity; NORMAND R. LEZY, in his individual and official capacity; NICHOLAS W. TEVES, in his individual and official capacity; RONALD I. HELLER, in his official capacity; DUANE KANUHA, in his official capacity; CHARLES JENCKS, in his official capacity; JOHN DOES 1-10; JANE DOES 1-10; DOE PARTNERSHIPS 1-10; DOE CORPORATIONS 1-10; DOE ENTITIES 2-10 and DOE, Defendants.

ORDER GRANTING IN PART AND DENYING IN PART MOTION FOR SUMMARY JUDGMENT

Susan Oki Mollway United States District Judge

I. INTRODUCTION.

This case arises out of a decision by Defendant State of Hawaii Land Use Commission (the “LUC”) to reclassify a parcel of land from urban use to agricultural use. Plaintiff Bridge Aina Le’a, LLC, the owner of the parcel, claims that, in reclassifying the land, the LUC and certain commissioners violated Bridge’s rights under the United States Constitution, the Hawaii constitution, and various Hawaii laws. The Hawaii Supreme Court has upheld the state trial court’s invalidation of the LUC’s reclassification ruling.

Defendants now move for summary judgment as to Bridge’s takings claims for just compensation in Counts I, II, and VIII, and Bridge’s vested-rights claim in Count IV. The motion is granted with respect to Counts IV and VIII, but denied with respect to Counts I and II.

II. BACKGROUND.

The subject parcel of land consists of 1, 060 acres in South Kohala, on the island of Hawaii. ECF No. 1, PageID # 15. On November 25, 1987, the parcel was purchased by a private company that sought to develop a large residential community. Id. Toward that end, the purchaser petitioned to reclassify the land from “agricultural use” to “urban use.” Id. The LUC approved the petition on condition that 60 percent of the homes built would be “affordable” units. Id.

During the next two decades, the property changed ownership. Eventually, Bridge became the owner. Id., PageID #s 16-17. When Bridge acquired the property, it was classified for “urban use” and subject to an amended affordable housing condition that still required sixty percent of the homes to be affordable, but that also set a minimum of 1, 000 affordable homes. Id., PageID # 17.

After various proceedings, including proceedings that resulted in amendments to the condition, see id., PageID #s 20-28, the LUC, in September 2009, ordered Bridge and DW Aina Le’a Development (“DW”), the company to which Bridge intended to assign the project, to complete sixteen affordable units by March 31, 2010, id., PageID # 29. The sixteen units, as well as other work on the project, were allegedly completed by June 2010. Id., PageID # 30. However, allegedly because the affordable homes were not completed by the deadline of March 31, 2010, the LUC determined that Bridge and DW had not satisfied the applicable condition. Id., PageID # 76. In January 2011, the LUC voted to reclassify the land back to agricultural use. Id., PageID # 37.

Bridge filed two actions challenging the LUC’s decision to reclassify the land to agricultural use. Bridge not only sought judicial review of the LUC’s decision through an administrative appeal, Bridge also filed a separate action in state court. See ECF No. 1-2. It is that separate action that was removed to this court on June 27, 2011. See ECF No. 1.

This case has a long history that includes a stay while the appeal from the LUC decision made its way through the state courts, and an appeal to the Ninth Circuit challenging this court’s stay. Upon completion of proceedings in the Hawaii Supreme Court in connection with the appeal from the LUC decision, the Ninth Circuit, while approving this court’s earlier stay, found the reason for the stay no longer in issue, vacated the stay, and remanded the case to this court. Bridge Aina Le’a, LLC v. Chock, 590 Fed.Appx. 705 (9th Cir. 2014). Following proceedings on remand, this court is left with only Bridge’s takings claims for just compensation in Counts I, II, and VIII, to the extent asserted against the LUC and Official Capacity Commissioners, and Count IV, to the extent seeking damages against the LUC and Official Capacity Commissioners. See ECF No. 93.

On December 31, 2015, Defendants filed the present motion seeking summary judgment as to Bridge’s remaining claims. See ECF No. 105.

III. STANDARD.

The burden initially falls on the moving party to identify for the court those “portions of the materials on file that it believes demonstrate the absence of any genuine issue of material fact.” T.W. Elec. Serv., Inc. v. Pac. Elec. Contractors Ass’n, 809 F.2d 626, 630 (9th Cir. 1987) (citing Celotex Corp., 477 U.S. at 323). “When the moving party has carried its burden under Rule 56(c), its opponent must do more than simply show that there is some metaphysical doubt as to the material facts.” Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 586 (1986) (footnote omitted).

The nonmoving party must set forth specific facts showing that there is a genuine issue for trial. T.W. Elec. Serv., Inc., 809 F.2d at 630. At least some “‘significant probative evidence tending to support the complaint’” must be produced. Id. (quoting First Nat’l Bank of Ariz. v. Cities Serv. Co., 391 U.S. 253, 290 (1968)). See Addisu, 198 F.3d at 1134 (“A scintilla of evidence or evidence that is merely colorable or not significantly probative does not present a genuine issue of material fact.”). “[I]f the factual context makes the non-moving party’s claim implausible, that party must come forward with more persuasive evidence than would otherwise be necessary to show that there is a genuine issue for trial.” Cal. Arch’l Bldg. Prods., Inc. v. Franciscan Ceramics, Inc., 818 F.2d 1466, 1468 (9th Cir. 1987) (citing Matsushita Elec. Indus. Co., 475 U.S. at 587). Accord Addisu, 198 F.3d at 1134 (“There must be enough doubt for a ‘reasonable trier of fact’ to find for plaintiffs in order to defeat the summary judgment motion.”).

All evidence and inferences must be construed in the light most favorable to the nonmoving party. T.W. Elec. Serv., Inc., 809 F.2d at 631. Inferences may be drawn from underlying facts not in dispute, as well as from disputed facts that the judge is required to resolve in favor of the nonmoving party. Id. When “direct evidence” produced by the moving party conflicts with “direct evidence” produced by the party opposing summary judgment, “the judge must assume the truth of the evidence set forth by the nonmoving party with respect to that fact.” Id.

IV.ANALYSIS.

Defendants move for summary judgment as to Bridge’s takings claims in Count I (Denial of Due Process of Law), Count II (Inverse Condemnation), and Count VIII (Unconstitutional Land Development Conditions), and Bridge’s vested-rights claim in Count IV. See ECF Nos. 105, 116.

A. Bridge’s Takings Claims.

“The Takings Clause of the Fifth Amendment, made applicable to the States through the Fourteenth, provides that private property shall not ‘be taken for public use, without just compensation.’” Lingle v. Chevron U.S.A. Inc., 544 U.S. 528, 536-37 (2005) (citing Chicago, B. & Q.R. Co. v. Chicago, 166 U.S. 226 (1897)). The Takings Clause “does not prohibit the taking of private property, but instead places a condition on the exercise of that power.” First English Evangelical Lutheran Church of Glendale v. Cnty. of Los Angeles, 482 U.S. 304, 314 (1987). The Takings Clause “is designed not to limit the governmental interference with property rights per se, but rather to secure compensation in the event of otherwise proper interference amounting to a taking.” Id. at 315.

Prior to Pennsylvania Coal Co. v. Mahon, 260 U.S. 393 (1922), “the Takings Clause was understood to provide protection only against a direct appropriation of property--personal or real.” Horne v. Dep’t of Agric., 135 S.Ct. 2419, 2427 (2015). “Beginning with Mahon, however, the Court recognized that government regulation of private property may, in some instances, be so onerous that its effect is tantamount to a direct appropriation or ouster--and that such ‘regulatory takings’ may be compensable under the Fifth Amendment” if the “‘regulation goes too far.’” Lingle, 544 U.S. at 537 (quoting Mahon, 260 U.S. at 415).

Supreme Court precedent identifies two categories of regulatory action that will be deemed per se takings under the Fifth Amendment:

First, where government requires an owner to suffer a permanent physical invasion of her property--however minor--it must provide just compensation. See Loretto v. Teleprompter Manhattan CATV Corp., 458 U.S. 419 (1982) (state law requiring landlords to permit cable companies to install cable facilities in apartment buildings effected a taking). A second categorical rule applies to regulations that completely deprive an owner of “all economically beneficial us[e]” of her property. [Lucas v. S. Carolina Coastal Council, 505 U.S. 1003, 1019 (1992).] We held in Lucas that the government must pay just compensation for such “total regulatory takings, ” except to the extent that “background principles of nuisance and property law” independently restrict the owner’s intended use of the property. Id., at 1026-1032.

Lingle, 544 U.S. at 538.

“Outside these two relatively narrow categories . . . regulatory takings challenges are governed by the standards set forth in Penn Central Transp. Co. v. New York City, 438 U.S. 104 (1978).” Lingle, 544 U.S. at 538. The Court in Penn Central identified several factors of significance. 438 U.S. at 124. Those factors include the “economic impact of the regulation on the claimant and, particularly, the extent to which the regulation has interfered with distinct investment-backed expectations.” Id. An additional factor is the “character of the governmental action.” For example, “[a] ‘taking’ may more readily be found when the interference with property can be characterized as a physical invasion by government than when interference arises from some public program adjusting the benefits and burdens of economic life to promote the common good.” Id. (citation omitted).

Defendants argue that Bridge’s takings claims fail for three reasons: (1) the LUC’s imposition of an affordable housing condition does not constitute an unconstitutional condition as a matter of law; (2) Bridge’s takings claims are time-barred; and (3) Bridge’s failure to obtain a valid environmental impact statement independently precludes its takings claims, pursuant to Lucas, 505 U.S. at 1026-32. See ECF No. 116, PageID # 3014.

1. Unconstitutional Condition.

a. Issue Preclusion Bars Relitigation of Count VIII.

Defendants are entitled to summary judgment as to Count VIII because issue preclusion bars relitigation of whether the affordable housing condition was unconstitutional.

Issue preclusion, a doctrine distinct from the doctrine of claim preclusion, “applies to a subsequent suit between the parties or their privies on a different cause of action and prevents the parties or their privies from relitigating any issue that was actually litigated and finally decided in the earlier action.” Brem ...


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