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Civil Beat Law Center for Public Interest, Inc. v. City And County of Honolulu

Supreme Court of Hawaii

June 27, 2019

CIVIL BEAT LAW CENTER FOR THE PUBLIC INTEREST, INC., Plaintiff-Appellant,
v.
CITY AND COUNTY OF HONOLULU and HONOLULU POLICE COMMISSION, Defendants-Appellees.

          APPEAL FROM THE CIRCUIT COURT OF THE FIRST CIRCUIT (CAAP-17-0000899; CIV. NO. 1CC17-1-000142)

          Robert Brian Black for appellant

          Duane W.H. Pang (Jessica Y.K. Wong with him on the brief) for appellees

          RECKTENWALD, C.J., McKENNA, POLLACK, AND WILSON, JJ., AND CIRCUIT JUDGE EDDINS, IN PLACE OF NAKAYAMA, J., RECUSED

          AMENDED OPINION

          RECKTENWALD, C.J. [1]

         I. INTRODUCTION

         The issues in this case arise from three closed meetings the Honolulu Police Commission held in January 2017 concerning then-Chief of Police Louis Kealoha, who had received notice that he was the target of a federal criminal investigation. The Police Commission cited the need to protect Kealoha's privacy and to confer with its attorney when closing the meetings to the public. At the end of the third meeting, the Commission approved an agreement for Kealoha's retirement.

         Several days later, Plaintiff-Appellant Civil Beat Law Center for the Public Interest, Inc. (Civil Beat) filed a complaint against the Honolulu Police Commission and the City and County of Honolulu (collectively, the Appellees) in the Circuit Court of the First Circuit (circuit court). Civil Beat pled six counts, seeking declaratory rulings interpreting Hawai'i's Sunshine Law, and finding violations of the Sunshine Law. In addition to declaratory relief, Civil Beat sought an order requiring the Appellees to attend Sunshine Law training, releasing the Commission's executive meeting minutes for the three closed meetings, and invalidating the Commission's retirement agreement with Kealoha. Civil Beat did not join Kealoha as a party to the action.

         The Appellees filed a motion to dismiss, which the circuit court granted on all counts. Civil Beat appealed to the Intermediate Court of Appeals (ICA), and we accepted transfer of this case to resolve matters of first impression concerning the meaning and scope of the Sunshine Law's open meeting requirement, personnel-privacy exception, and attorney-client exception, and the extent to which closed meetings must conform with these exceptions.

         We hold that the circuit court erred in dismissing Civil Beat's complaint. The Sunshine Law does not require that meetings related to personnel matters be closed to the public; rather, that decision is discretionary, provided that certain statutory requirements are met. Nor does the Sunshine Law subject board members to criminal penalties for holding an open meeting. We resolve these and other questions of law in this appeal, and remand Civil Beat's claims regarding alleged violations of the Sunshine Law, with instructions to order that Kealoha be made a party, or, if he cannot be so joined, the court shall determine whether in equity and good conscience the action should proceed in any form among Civil Beat and the Appellees, or whether it must be dismissed.

         II. BACKGROUND

         A. Factual Background

         Because we are reviewing the circuit court's order on a motion to dismiss, our review is "strictly limited to the allegations of the complaint, and we must deem those allegations to be true." In re Estate of Rogers, 103 Hawai'i 275, 280-81, 81 P.3d 1190, 1195-96 (2003) (quoting Blair v. Ing, 95 Hawai'i 247, 252, 21 P.3d 452, 457 (2001)).

         1. The Target Letter

         In December 2016, Kealoha received an FBI Target Letter from the U.S. Attorney's Office notifying him that he was the target of a federal grand jury investigation. In response to the Target Letter, Kealoha voluntarily placed himself on temporary restricted duty. The same day, the Chair of the Police Commission acknowledged the Target Letter and confirmed that Kealoha placed himself on leave. The Chair said that the Commission would consider the issue at its next meeting on January 4, 2017.

         2. The Commission Discusses the "Status of the Chief of Police" in Executive Session

         The Commission's January 4, 2017, meeting agenda indicated that the "Status of the Chief of Police" would be discussed in an executive session, closed to the public, pursuant to HRS § 92-5(a)(2) and (4), respectively, for the Commission to consider personnel actions "where consideration of matters affecting privacy will be involved" and to consult with the Commission's attorneys. During the public portion of the Commission's January 4 meeting, the Chair stated that "because of Hawai'i Revised Statute on personnel matters, we have to discuss [the Police Chief] in executive session."

         The Commission continued the January 4 meeting regarding the "Status of the Chief of Police" to January 6, 2017, and on that day met solely in executive session. After the January 6 executive session, the Commission publicly announced that it had come to "an agreement in principle on [the Chief of Police's] retirement."

         3. The City Council is Denied a Briefing on the Retirement Agreement

         On January 12, 2017, the Honolulu City Council requested a briefing from the Commission on the retirement agreement. The next day, the Chair of the Commission declined the Council's request, stating that according to the Sunshine Law, "only the individual [employee] concerned may request an open meeting" when personnel matters involving the hire, evaluation, dismissal, or discipline of that employee are discussed. The Chair stated that "without the consent of Chief Kealoha, the Commission cannot discuss this personnel matter in open session." The Chair indicated that the Commission members may be subject to criminal penalties if personnel matters were discussed in open session.[2]

         4. The Commission Approves a Retirement Agreement with Kealoha in Executive Session

         The Commission's agenda for its next meeting on January 18, 2017 stated again that the "Status of the Chief of Police" would be discussed in executive session pursuant to HRS § 92-5(a)(2) and (4) for the Commission to consider personnel actions "where consideration of matters affecting privacy will be involved" and to consult with the Commission's attorneys. At the January 18 meeting, the Commission voted in executive session to approve a retirement agreement with Kealoha.

         B. Circuit Court Proceedings

         1. Civil Beat's Complaint

         On January 26, 2017, Civil Beat filed a complaint in circuit court against the Appellees.[3] Civil Beat sought declaratory and injunctive relief, including voiding final action taken by the Commission. Civil Beat asserted six claims:

Count 1: Sunshine Law does not require closed meetings;
Count 2: Board members cannot be criminally prosecuted for holding an open Sunshine Law meeting;
Count 3: Not all personnel actions may be discussed in closed session;
Count 4: Personnel evaluations of a police chief must be discussed in open session;
Count 5: The City and the Commission violated the Sunshine Law on January 4 and 6, 2017.
Count 6: The City and the Commission violated the Sunshine Law on January 18, 2017.

         a. Counts 1 and 2

         In Counts 1 and 2, Civil Beat sought declaratory relief interpreting the Sunshine Law's open meeting requirement, HRS § 92-3, and criminal penalties provision, HRS § 92-13.

         In Count 1, Civil Beat alleged that the Commission misinterpreted the Sunshine Law's open meeting requirement and that Commission members incorrectly believed that they were required to enter into an executive session to discuss the Chief of Police. Civil Beat asserted that when voting to enter executive session, members of the Commission "did not believe that they had the option to vote for an open session - stating that 'without the consent of Chief Kealoha, the Commission cannot discuss this personnel matter in open session.'" Civil Beat sought an order "declaring that the Sunshine Law does not require boards to enter into executive session[.]"

         In Count 2, Civil Beat asserted that the Commission misinterpreted the Sunshine Law's criminal penalties provision because Commission members "believed that they were subject to criminal prosecution if they discussed the matter in open session." Civil Beat sought "an order declaring that the Sunshine Law does not subject Sunshine board members to criminal prosecution under HRS § 92-13 for holding an open meeting[.]"

         b. Counts 3 and 4

         In Counts 3 and 4, Civil Beat sought declaratory relief interpreting the Sunshine Law's personnel-privacy exception, HRS § 92-5(a)(2), and applying this interpretation to require the "Status of the Chief of Police" to be discussed in open meetings in all circumstances as a matter of law.

         In Count 3, Civil Beat alleged that Commission members misinterpreted the personnel-privacy exception to permit an executive session "for any discussion that involved 'the hire, evaluation, dismissal, or discipline of an officer or employee or of charges brought against the officer or employee' . . . regardless whether 'consideration of matters affecting privacy will be involved.'" Civil Beat contended that HRS § 92-5(a)(2) "requires an analysis of whether the personnel discussion involves private matters and a balancing of the privacy interests against the public interests in disclosure."

         In Count 4, Civil Beat applied this balancing test to argue that, as a matter of law, the "Status of the Chief of Police" cannot be discussed in executive session due to the public's compelling interest in monitoring the person serving as Chief of Police. Civil Beat argued that "[p]rivacy is not an absolute when it concerns conduct of government officials" and noted that the Chief of Police, "unlike most government employees," performs "a critical function to our community that impacts thousands of people daily." Civil Beat thus argued that the public has a compelling interest "in monitoring both the Chief of Police and the Commission," and that this "outweighs any privacy interests the Chief of Police may have" in discussions regarding the "Status" of this position. "To prevent future violations of the Sunshine Law," Civil Beat requested "an order declaring that discussion of the 'Status of the Chief of Police' is not a matter 'where consideration of matters affecting privacy will be involved' and thus cannot be held in executive session."

         c. Counts 5 and 6

         In Counts 5 and 6, Civil Beat alleged that the Commission's discussions concerning the "Status of the Chief of Police" in the January 4, 6, and 18 executive sessions violated section 92-5(b) of the Sunshine Law because portions of these discussions were not "directly related" to any permissible exception.

         In Count 5, Civil Beat first raised the issue of whether HRS § 92-5(a)(2), the personnel-privacy exception, was permissibly invoked in the specific circumstances here. Unlike in Count 4, Civil Beat's allegations in Count 5 addressed Kealoha's privacy interests, the Target Letter, and the nature of the Commission's deliberations. Civil Beat claimed that the Commission did not discuss "any highly sensitive information" concerning Kealoha in the executive meetings. Rather, "the only development presented to the Commission was the FBI Target Letter that was already public knowledge." Civil Beat argued that "[t]he Commission's deliberations about what it planned to do about the FBI Target Letter, the evaluative criteria it considered, the options it weighed, and how it approached the situation are not private merely because it may affect [Kealoha's] reputation or may be embarrassing." Moreover, according to Civil Beat, any privacy interests were outweighed by the public interest in Kealoha's evaluation.

         As such, Civil Beat claimed, "[o]n information and belief," that "portions of the January 4 executive session, continued on January 6, concerning the 'Status of the Chief of Police' were not Mirectly related' to 'consideration of matters affecting privacy.'" Additionally, Civil Beat alleged that portions of the same January 4 executive session, continued on January 6, "were not Mirectly related' to questions for the Commission's attorney 'pertaining to the board's powers, duties, privileges, immunities, and liabilities.'" Civil Beat thus argued that the closed meetings "exceeded the scope of any permissible [exception]." Civil Beat sought an order declaring that the Commission violated the Sunshine Law, and "requiring disclosure of any audio or other recordings and any meeting minutes or similar record" of the first two executive meetings at issue.

         Count 6 was substantially similar to Count 5, though it focused on matters from the Commission's January 18, 2017, executive meeting, including "the basis for [Kealoha's] retirement, how the Commission evaluated the terms of that retirement, and the reasons that the Commission chose to spend public monies on that retirement[.]" Like in Count 5, Civil Beat alleged that portions of the January 18 executive meeting were not "directly related" to "consideration of matters affecting privacy" or to questions for the Commission's attorney "pertaining to the board's powers, duties, privileges, immunities, and liabilities." As such, Civil Beat argued that the Commission "exceeded the scope of any permissible [exception]."

         In addition to seeking declaratory relief and disclosure of the January 18 executive meeting minutes, Civil Beat sought an order "voiding [the Commission's] approval of the retirement agreement," pursuant to HRS § 92-11.

         2. Dismissal of the Complaint

         On February 16, 2017, the Appellees filed a motion to dismiss the complaint pursuant to Hawai'i Rules of Civil Procedure (HRCP) Rule 12(b)(6) (2000). The Appellees argued that there was no controversy to resolve in Counts 1 and 2, and that Counts 3 to 6 relied on incorrect interpretations of the Sunshine Law. In opposition, Civil Beat argued that the Appellees misconstrued the law and that they "move to dismiss by simply ignoring the facts as alleged." Regarding Counts 5 and 6 in particular, Civil Beat argued that it would be inappropriate to dismiss the matter due to the presence of disputed issues of fact concerning the scope of the Commission's discussions.

         After a hearing on the motion, the circuit court entered a written order dismissing the complaint. The order provided as follows:

1. As to Counts [1] and [2], there is no dispute that Defendant Honolulu Police Commission (the "Commission") followed the required procedures and properly met in executive session pursuant to Hawaii Revised Statutes ("HRS") §§ 92-4, 92-5(a)(2), and 92-5(a)(4) to protect privacy interests of the Honolulu Chief of Police and to preserve the attorney-client privilege between the Commission and its counsel. The Commission had the authority to and did meet in executive session to preserve its attorney-client privilege, even if the Commission was not required to meet in executive session to discuss the status of the Honolulu Chief of Police. Therefore, Counts [1] and [2] are dismissed as moot.
2. As to Counts [3] and [4], HRS Chapter 92 does not require a "balancing of private interest against the public interest in disclosure" in deciding whether a board may properly meet in executive session. The balancing test set forth in HRS Chapter 92F applies to the "disclosure of a government record" and not whether the Commission properly decided to meet in executive session. The Commission properly entered into executive sessions pursuant to HRS §§ 92-4, 92-5 (a) (2), and 92-5 (a) (4). As such, Counts [3] and [4] are dismissed for failure to state a claim upon which relief can be granted.
3. Counts [5] and [6] set forth conclusory, rather than factual, allegations and are therefore dismissed without prejudice for failure to state a claim upon which relief can be granted.

         On November 30, 2017, the circuit court entered final judgment "in favor of Defendants City and County of Honolulu and Honolulu Police Commission on all claims for relief" in Civil Beat's complaint.

         C. Appellate Proceedings

         Civil Beat timely appealed the circuit court's judgment to the ICA, and we later accepted transfer of this case.

         Civil Beat raises three issues on appeal:

[1]. Whether the public is entitled to declaratory relief to prevent violations of the Sunshine Law by correcting a government board's erroneous understanding that its vote to enter executive session was meaningless because the Sunshine Law required a closed meeting and permitted criminal prosecution of the board members for holding an open meeting (Counts [1] and [2]).
2. Whether the circuit court erred in holding that the Sunshine Law personnel privacy exception broadly applies to all discussion of personnel matters concerning the chief of police regardless whether "consideration of matters affecting privacy will be involved" (Counts [3] and [4]).
[3]. Whether a complainant alleging that a government board exceeded the scope of permissible exceptions to the Sunshine Law during a closed meeting (Counts [5] and [6]) may be dismissed as a matter of law for failure to state a cause of action under HRS § 92-12.

         III. STANDARDS OF REVIEW

         A. Motion To Dismiss

         A circuit court order granting a motion to dismiss is reviewed de novo. Hungate v. Law Office of David B. Rosen, 139 Hawai'i 394, 401, 391 P.3d 1, 8 (2017). "A complaint should not be dismissed for failure to state a claim unless it appears beyond doubt that the plaintiff can prove no set of facts in support of his or her claim that would entitle him or her to relief." In re Estate of Rogers, 103 Hawai'i 275, 280, 81 P.3d 1190, 1195 (2003) (quoting Blair v. Inq, 95 Hawai'i 247, 252, 21 P.3d 452, 457 (2001)). Our review is "strictly limited to the allegations of the complaint," which we view in the light most favorable to the plaintiff and deem to be true. Id. at 280-81, 81 P.3d at 1135-36 (quoting Blair, 95 Hawai'i at 252, 21 P.3d at 457). However, "the court is not required to accept conclusory allegations on the legal effect of the events alleged." Hungate, 139 Hawai'i at 401, 391 P.3d at 8.

         B. Statutory Interpretation

         "Questions of statutory interpretation are questions of law to be reviewed de. novo under the right/wrong standard." Nakamoto v. Kawauchi, 142 Hawai'i 259, 268, 418 P.3d 600, 609 (2018) .

         C. Indispensable Parties

         "[W]here the trial court has made a determination as to a party's indispensability, appellate courts must review the trial court's decision for an abuse of discretion." Marvin v. Pflueger, 127 Hawai'i 490, 503, 280 P.3d 88, 101 (2012) (citations omitted). However, "where the appellate court raises the issue [of indispensable parties] itself for the first time on appeal, it follows that the appellate court must perform a de novo Rule 19 analysis, there being no analysis from the trial court to review." Id.

         IV. DISCUSSION

         We resolve Counts 1 to 4 in the present appeal based purely on principles of statutory interpretation. The circuit court erred in dismissing Counts 1 and 2 as moot, and we resolve these counts by declaring that the Sunshine Law does not require closed meetings, and that the Sunshine Law does not subject board members to criminal prosecution under HRS § 92-13 for holding an open meeting. We resolve Counts 3 and 4 by declaring that the Sunshine Law's personnel-privacy exception does not include a balancing test, but requires the person at issue to have a legitimate privacy interest in the matters discussed.

         We vacate and remand Counts 5 and 6. The circuit court improperly applied a heightened pleading standard to dismiss these counts, which sufficiently alleged violations of the Sunshine Law. We remand Counts 5 and 6 with instructions to order that Kealoha be made a party, or, if he cannot be so joined, the circuit court shall determine whether in equity and good conscience the action should proceed in any form among Civil Beat and the Appellees, or whether it must be dismissed.

         A. ...


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