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Nelson v. Hawaiian Homes Commission

Supreme Court of Hawaii

February 9, 2018

RICHARD NELSON III, KALIKO CHUN, JAMES AKIONA, SR., SHERILYN ADAMS, KELII IOANE, JR., and CHARLES AIPIA, Plaintiffs-Appellees-Cross-Appellants,
v.
HAWAIIAN HOMES COMMISSION, THE DEPARTMENT OF HAWAIIAN HOME LANDS, JOBIE MASAGATANI, in her official capacity as Chair of the Hawaiian Homes Commission, WILLIAM K. RICHARDSON, [1] MICHAEL P. KAHIKINA, DOREEN NAPUA GOMES, GENE ROSS DAVIS, WALLACE A.ISHIBASHI, DAVID B. KAAPU, and WREN WESCOATT, in their official capacities as members of the Hawaiian Homes Commission, Defendants- Appellees-Cross-Appellees, and WESLEY MACHIDA, in his official capacity as the State Director of Finance, and the STATE OF HAWAI'I, Defendants-Appellants-Cross-Appellees.

         APPEAL FROM THE CIRCUIT COURT OF THE FIRST CIRCUIT (CAAP-16-0000496; CIV. NO. 07-1-1663)

          Sharla Ann Manley and Summer L.H. Sylva for plaintiffs-appellees/cross-appellants

          Charleen M. Aina for defendants-appellants/cross-appellees

          Melvyn M. Miyagi, Brian A. Kang, and Ross T. Shinyama for defendants-appellees/cross-appellees

          Mark J. Bennett for amicus curiae Hawaiʻi State Legislature

          RECKTENWALD, C.J., NAKAYAMA, McKENNA, AND POLLACK, JJ. WITH WILSON, J., DISSENTING

          OPINION

          McKENNA, J.

         I. Introduction

         This case is on appeal before this court for the second time. In the first appeal, we determined that the political question doctrine[2] did not bar a judicial interpretation of the meaning of "sufficient sums" for the Department of Hawaiian Home Lands' ("DHHL") administrative and operating expenses, pursuant to Article XII, Section 1 of the Hawai'i Constitution. Limited judicially discoverable and manageable standards existed to interpret the term "sufficient sums, " based on the 1978 Constitutional Convention delegates' estimate that DHHL's administrative and operating costs were $1.3 to 1.6 million at that time, and, going forward, that figure could be adjusted for inflation. Nelson v. Hawaiian Homes Comm'n, 127 Hawai'i 185, 277 P.3d 279 (2012) ("Nelson I") .

         On remand to the Circuit Court of the First Circuit ("circuit court"), [3] the circuit court held a bench trial and found, however, that DHHL's actual need for its administrative and operating expenses was over $28 million. It then concluded that the legislature was constitutionally obligated to make such an appropriation to DHHL for fiscal year 2015-16. The circuit court also enjoined the defendants (the State of Hawai'i and its Director of Finance, collectively the "State Defendants") from violating the constitution or breaching their fiduciary duties to the Hawaiian Homelands trust beneficiaries.

         The State Defendants filed a motion for reconsideration, which the circuit court granted in part and denied in part. The circuit court granted the motion in part to modify those portions of the order that (1) called for the over $28 million appropriation and (2) enjoined the defendants from violating the constitution or breaching their fiduciary duties to Hawaiian Homelands trust beneficiaries. In its amended order, the circuit court simply declared that (1) the State of Hawai'i did not provide sufficient sums to DHHL, and (2) that the defendants must fulfill their constitutional and trust responsibilities.

         This court accepted transfer of this appeal from the Intermediate Court of Appeals ("ICA"). On appeal, the State Defendants argue that (1) the circuit court erred in declining to use the 1978 baseline of $1.3 to 1.6 million, adjusted for inflation, to calculate "sufficient sums" for DHHL's administrative and operating expenses; and (2) the circuit court erred in ordering the State Defendants to fulfill their constitutional obligations under Article XII, Section 1. The Hawai'i State Legislature, as amicus curiae, filed a brief in support of the State Defendants.

         We hold that the circuit court erred by engaging in a comprehensive inquiry into the amount DHHL actually needed for its administrative and operating expenses. Under Nelson I, the only judicially discoverable and manageable standard for determining "sufficient sums" for DHHL's administrative and operating budget was established by the delegates of the 1978 Constitutional Convention as $1.3 to 1.6 million, adjusted for inflation. 127 Hawai'i at 202-03, 277 P.3d at 296-97. We observed that "consideration of [how many lots, loans, and rehabilitation projects (and their scope)] could provide the basis for increasing the required administrative funding above the 1978 baseline identified by the delegates"; however, we cautioned that such consideration "could also involve the courts in addressing issues . . . that involve political questions." 127 Hawai'i at 203, 277 P.3d at 297.

         In this case, the circuit court exceeded our mandate in Nelson I when it determined the amount DHHL actually needed for its administrative and operating expenses. Accordingly, we vacate the circuit court's First Amended Final Judgment, Final Judgment, and underlying orders, and remand this case to the circuit court to determine the current value of $1.3 to 1.6 million (in 1978 dollars), adjusted for inflation.

         II. Background

         A. Nelson I

         In Nelson I, six individual plaintiffs (Richard Nelson III; Kaliko Chun; James Akiona, Sr.; Sherilyn Adams; Kelii Ioane, Jr.; and Charles Aipia; collectively, "the Plaintiffs") filed a first amended complaint alleging that the State Defendants and DHHL had violated Article XII, Section 1 of the Hawai'i State Constitution. That constitutional provision states the following:

The legislature shall make sufficient sums available for the following purposes: (1) development of home, agriculture, farm and ranch lots; (2) home, agriculture, aquaculture, farm and ranch loans; (3) rehabilitation projects to include, but not limited to, educational, economic, political, social and cultural processes by which the general welfare and conditions of native Hawaiians are thereby improved; (4) the administration and operating budget of the department of Hawaiian home lands; in furtherance of (1), (2), (3) and (4) herein, by appropriating the same in the manner provided by law.

         Hawai'i State Constitution, Article XII, Section 1. In Count 1, the Plaintiffs alleged that the State had failed to make sufficient sums available to DHHL for the four purposes enumerated above. In Count 2, the Plaintiffs alleged that DHHL breached its trust duties to its beneficiaries by failing to request sufficient sums from the State. In Count 3, the Plaintiffs alleged that the DHHL Defendants breached their trust obligation to beneficiaries by leasing DHHL lands for commercial purposes to raise funds. Lastly, in Count 4, the Plaintiffs alleged that the DHHL Defendants breached their obligation to trust beneficiaries by failing to ascertain whether trust lands were necessary for general homestead purposes before offering them for commercial lease. The parties stipulated to dismiss Counts 3 and 4 without and with prejudice, respectively.

         The circuit court granted the State Defendants' motion for summary judgment (in which the DHHL Defendants joined), concluding that Counts 1 and 2 raised non-justiciable political questions. The circuit court concluded that there were "no judicially discoverable and manageable standards for resolving the dispute over the definition and determination of 'sufficient sums'" under the Hawai'i Constitution "without making initial policy determinations of a kind clearly for nonjudicial discretion." In other words, the circuit court declined to rule on the Plaintiffs' claims, leaving their resolution to the political process. See Nelson I, 127 Hawai'i at 194, 277 P.3d at 288.

         On initial appeal to the ICA, an ICA majority concluded Plaintiffs' claims were not barred by the political question doctrine. Nelson v. Hawaiian Homes Comm'n, 124 Hawai'i 437, 246 P.3d 369 (App. 2011). Chief Judge Nakamura concurred with the majority's holding that the political doctrine question did not preclude the justiciability of the dispute over whether the legislature provided DHHL with "sufficient sums." 124 Hawai'i at 447, 246 P.3d at 379 (Nakamura, C.J., concurring). In his opinion, the "pre-1978 levels and the framers' intent, including their concern with the DHHL's leasing of lands to the general public" provided the court with "judicially discoverable and manageable standards for evaluating whether the Legislature has satisfied the 'sufficient sums' requirement of Article XII, Section 1 without resort to nonjudicial policy determinations." 124 Hawai'i at 452, 246 P.3d at 384 (Nakamura, C.J., concurring).

         On certiorari, this court first traced the development of our political question jurisprudence. We observed that the "political question doctrine is often considered the most amorphous aspect of justiciability.'" Nelson I, 127 Hawai'i at 194, 277 P.3d at 288 (quoting Nishitani, 82 Hawai'i at 299, 921 P.2d at 1191) (brackets omitted). We stated, "The doctrine is the result of the balance courts must strike in preserving separation of powers yet providing a check upon the other two branches of government." Nelson I, 127 Hawai'i at 194, 277 P.3d at 288 (citing Trustees of the Office of Hawaiian Affairs v. Yamasaki, 69 Haw. 154, 737 P.2d 446 (1987)). In Yamasaki, this court adopted the test set forth by the United States Supreme Court in Baker v. Carr, 369 U.S. 186 (1962), which states

Prominent on the surface of any case held to involve a political question is found: (1) a textually demonstrable constitutional commitment of the issue to a coordinate political department; or (2) a lack of judicially discoverable and manageable standards for resolving it; or (3) the impossibility of deciding without an initial policy determination of a kind clearly for nonjudicial discretion; or (4) the impossibility of a court's undertaking independent resolution without expressing lack of respect due coordinate branches of government; or (5) an unusual need for unquestioning adherence to a political decision already made; or (6) the potentiality of embarrassment from multifarious pronouncements by various departments on one question.

Nelson I, 127 Hawai'i at 194, 277 P.3d at 288 (citing Yamasaki, 69 Haw. at 170, 737 P.2d at 455 (quoting Baker, 369 U.S. at 217)) (brackets omitted). In Nelson I, the issue was whether the determination of "sufficient sums" under Article XII, Section 1 presented a nonjusticiable political question due to "a lack of judicially discoverable and manageable standards" for resolving the issue and/or "the impossibility of deciding without an initial policy determination of a kind clearly for nonjudicial discretion." Nelson I, 127 Hawai'i at 193-94, 277 P.3d at 287-88.

         We ultimately "affirm[ed] the ICA's judgment, but only on the narrower ground that the determination of what constitutes 'sufficient sums' for administrative and operating expenses under the Hawai'i Constitution's Article XII, Section 1 is justiciable and not barred as a political question." 127 Hawai'i at 206, 277 P.3d at 300. We held judicially discoverable and manageable standards existed to determine "sufficient sums" for DHHL's administrative and operating expenses, based on the 1978 Constitutional Convention delegates' estimate that those costs were $1.3 to 1.6 million at that time. Nelson I, 127 Hawai'i 185, 277 P.3d 279. This court did not judicially determine what "sufficient sums" would be, and we imposed no funding requirements upon the legislature. We held only that the political question doctrine did not bar justiciability of the case.

         In arriving at this holding, we turned to the 1978 Constitutional Convention history. We quoted the spirited discussion among the delegates who were trying to "pin down a numerical figure" for DHHL's funding generally. 127 Hawai'i at 202, 277 P.3d at 296. We reproduced Delegates Burgess, De Soto, and Sutton's dialogue, through which they "ultimately arrived at $1.3 to 1.6 million as a 'sufficient sum' . . . [as] to administrative and operating expenses" specifically, as follows:

Delegate Burgess: [W]hat would be the estimated cost of these programs which are mandated?
Delegate De Soto: What we propose with respect to "shall fund" is the administrative and costs of running the Hawaiian homes program, which would amount to operating and administrating approximately $1.3 to $1.6 million, taking into consideration inflation, collective bargaining agreements that go into inflation with the pay.
Delegate Burgess: I would ask - is the $1.3 to $1.6 million that was mentioned the total cost of the programs which are mandated to the legislature? Does that amount include the development of home, agriculture, farm and ranch lots, and the other aims that are cited on page 2 of the proposal?
Delegate Burgess: Does the $1.3 to $1.6 million figure that was mentioned just a few minutes ago include the costs of the home developments, the loans and the other rehabilitation projects which are referred to on page 2? - in other words, the development of home, agriculture, farm and ranch lots; the home, agriculture, aquaculture, ranch and farms loans; and all of those programs. Are all of those included in the total estimate of the $1.3 million to fund this program, or is the total cost to the State different from that?
Delegate Sutton: The $1.3 to $1.6 million is for administrative costs at present. Their need is more. The way the State itself can fund all the rest of the projects - and directly answering your question, delegate, is no, is not only $1.3 to $1.6 million - the way the State can find the funds is through mutual agreement with different parts of the government here in Hawaii; and that is, for the poor people who qualify, that is for HHA or Hawaiian Homes Commission Act properties, that there are similar needs and requirements for those to get the land - that is, under $10, 000 net assets. The State may fund these projects and come out with considerably more for the people at less of an expense, simply because the Hawaiian homes commission has land and does not need to condemn and purchase other land to fit the needy at that level.

Id. (citation omitted). Synthesizing these discussions, we concluded

Thus, by the end of the Committee on the Whole Debates, what was certain was that the $1.3 to $1.6 [million] figure represented "sufficient sums" for administrative and operating expenses only. As to that purpose under Article XII, then, the 1978 Constitutional Convention history does provide judicially discoverable and manageable standards that do not involve initial policy determinations of a kind clearly for nonjudicial discretion. At a minimum, funding at or above the $1.3 to $1.6 million envisioned in 1978 would be required.8 Therefore, the determination of what constitutes "sufficient sums" for administrative and operating expenses is not barred by the political question doctrine.
8 Presumably, this figure could be adjusted to reflect the impact of factors such as inflation or increased collective bargaining costs, both of which were acknowledged by Delegate De Soto as factors that could appropriately be taken ...

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