Supreme Court of Hawai'i.
In the Matter of the WATER USE PERMIT
APPLICATIONS, Petitions for Interim
Instream Flow Standard Amendments,
and Petitions for Water Reservations for the
Waiāhole Ditch Combined Contested
Reconsideration Denied Sept. 17, 2000.
As Amended Nov. 29, 2000.
*108 Gilbert D. Butson of Reinwald O'Connor & Playdon, on the briefs, for Appellee/Cross-Appellant
Stephen K.C. Mau and Cheryl A. Nakamura of
Rush, Moore, Craven, Sutton, Morry & Beh, on the briefs, for Appellee/Cross-Appellant
The Robinson Estate.
Margery S. Bronster, Attorney General of Hawai'i, Heidi M. Rian, Haunani Burns and Marjorie Lau, Deputy
Attorneys General, on the briefs, for Appellees/Cross-Appellants State of
Hawai'i Department of Agriculture and Department of Land and Natural Resources.
Benjamin A. Kudo, Wesley M. Fujimoto and
Stacy E. Uehara of Dwyer, Imanaka, Schraff,
Kudo, Meyer & Fujimoto, on the briefs, for Applicant/Petitioner-Appellant *109 Kamehameha Schools Bernice Pauahi Bishop Estate.
David Z. Arakawa, Corporation Counsel and Mark K. Morita, Randall K. Ishikawa, Duane
W.H. Pang and Reid M. Yamashiro, Deputies Corporation
Counsel, on the briefs, for Appellants City and County of Honolulu Planning
Department and Board of Water Supply.
Michael W. Gibson, Douglas S. Appleton and Keith M. Yonamine of Ashford &
Wriston, on the briefs, for Applicant-Appellee/Cross-Appellant The Estate
of James Campbell.
Paul H. Achitoff and David L. Henkin of Earthjustice Legal Defense Fund for
Petitioners/Appellants Waiāhole-Waikāne Community Association, Hakipu'u'Ohana
and Ka Lahui Hawai'i and Alan T. Murakami
and Carl C. Christensen of the Native Hawaiian
Legal Corporation, on the briefs, for Petitioners/Appellants Waiāhole-Waikāne
Community Association and Hakipu'u'Ohana .
Gino L. Gabrio, Patrick W. Hanifin and Laurie A. Kuribayashi of Cades, Schutte, Fleming & Wright and Orlando R. Davidson
and David L. Callies, on the briefs, for Appellee/Cross-Appellant Land Use
Gary M. Slovin, Margaret Jenkins Leong and Lisa Bail of Goodsill, Anderson, Quinn & Stifel, on the briefs,
for Applicant-Appellee/Cross-Appellant Dole Food Company, Inc./Castle &
James T. Paul, Pamela W. Bunn and Jessica
Trenholme of Paul, Johnson, Park & Niles for Intervenor/Appellant Hawaii's
Frank D. Padgett, on
the briefs, for Appellant Commission on Water Resource Management.
James K. Mee of Pacific Legal Foundation and Cary T. Tanaka of Matsumoto, LaFountaine & Chow, on the briefs, for
Appellee Hawaii Farm Bureau.
Jon T. Yamamura and
Kevin E. Moore of Carlsmith Ball, on the briefs, for Applicant/Appellee
Nihonkai Lease Co., Ltd.
Lois J. Schiffer, Assistant
Attorney General, Robert Klarquist and Andrew C. Mergen, Attorneys, Appellate Section Environment & Natural Resources
Division, Department of Justice and Cheryl Connett and Paul M. Sullivan, Attorneys,
Pacific Division, Naval Facilities Engineering Command, on the briefs, for
Appellee United States Department of the Navy.
Alan M. Oshima of Oshima Chun Fong & Chung for Appellee/Cross-Appellant
The Estate of James Campbell.
Naomi U. Kuwaye of Dwyer
Imanaka Schraff Kudo Meyer and Fujimoto for Applicant/ Petitioner-Appellant
Kamehameha Schools Bishop Estate.
I. BACKGROUND ...........................................................
INTRODUCTION .................................................... 423
PROCEDURAL HISTORY .............................................. 423
FINAL DECISION .................................................. 425
II. STANDARD OF REVIEW
III. DISCUSSION ...........................................................
PROCEDURAL DUE PROCESS .......................................... 431
1. Dual Status of the Commission Chairperson
2. Improper Influence by the Attorney
General and Governor .... 435
PUBLIC TRUST DOCTRINE ........................................... 439
1. History and Development ....................................
2. Relationship to the State Water
Code ....................... 442
3. State Water Resources Trust ................................
a. Scope of the Trust
b. Substance of the Trust
i. Purposes of the Trust ............................ 448
ii. Powers and Duties of the State Under the Trust ... 450
c.. Standard of Review under the Trust ..................... 455
INTERPRETATION OF THE STATE WATER CODE .......................... 456
1. Basic Principles of Statutory Construction
2. Water Code Declaration of Policy
INSTREAM FLOW STANDARDS ......................................... 458
1. Overview of the Statutory Framework
for Instream Use
Protection ............................................... 459
2. Procedural Objections to the WIIFS
Amendment ............... 462
3. Substantive Objections to Instream
Allocations ............. 464
4. Interim Standard for Waikāne
Stream ....................... 469
INTERIM BALANCING OF INSTREAM AND OFFSTREAM USES ................ 470
WATER USE PERMITS ............................................... 472
1. Permit Applicants' Burden of Proof
2. Diversified Agriculture, Generally,
and the Allocation of
2,500 Gallons per Acre per Day ........................... 474
3. Campbell Estate's Permits ..................................
a. Field Nos. 146, 166
(ICI Seeds) ........................ 476
b. Field Nos. 115, 116,
145, 161 (Gentry/Cozzens) ......... 476
c. Alternative Ground
Water Sources ....................... 476
4. PMI's Permit ...............................................
a. "Existing Use"
Use" ..................................... 479
c. Distinctive Treatment
of "Nonagricultural Uses" ........ 480
d. Application of the Commission's Standards
5. 12-Month Moving Average ....................................
USE OF KAHANA SURFACE WATER TO COMPENSATE FOR DITCH "SYSTEM
KSBE'S POINTS OF ERROR .......................................... 485
1. Zoning Requirement .........................................
2. Unified Regulation of the Ditch
System ..................... 486
3. "Ali'i Rights" .............................................
4. Correlative Rights .........................................
5. KSBE's Takings Claim .......................................
6. Ankersmit's Testimony ......................................
REQUIREMENT TO FUND STUDIES ..................................... 495
DOA/DLNR'S MISCELLANEOUS OBJECTIONS ............................. 498
THE CITY'S MISCELLANEOUS OBJECTIONS ............................. 499
IV. CONCLUSION ...........................................................
*110 MOON, C.J.,
LEVINSON, NAKAYAMA, RAMIL, JJ. and Circuit Judge IBARRA, in Place of KLEIN,
Opinion of the Court
by NAKAYAMA, J.
The present appeal arises
from an extended dispute over the water distributed by the Waiāhole Ditch
System, a major irrigation infrastructure on the island of O'ahu supplying
the island's leeward side with water diverted from its windward side.
In 1995, this dispute culminated in a contested case hearing of heretofore
unprecedented size, duration, and complexity before appellee Commission on
Water Resource Management (the Commission).
At the hearing, the Commission considered petitions to amend the interim
instream flow standards for windward streams affected by the ditch, water
use permit applications for various leeward offstream purposes, and water
reservation petitions for both instream and offstream uses. The Commission issued its final
findings of fact (FOFs), conclusions of law (COLs), decision and order (D
& O) (collectively, final decision or decision) on December 24, 1997.
Parties on appeal include:
the Commission; appellee/cross-appellant Estate of James
Campbell (Campbell Estate); appellants
City and County of Honolulu Planning Department and Board of Water Supply(collectively,
the City); appellees/cross-appellants Department of Agriculture (DOA) and
Department of Land and Natural Resources (DLNR), State of Hawai'i (collectively,
DOA/DLNR); appellee/cross-appellant Dole Food Company, Inc./Castle & Cooke,
Inc. (Castle); appellee Hawaii
Farm Bureau (HFB); appellant
Hawaii's Thousand Friends (HTF); appellant Kamehameha Schools Bernice Pauahi Bishop Estate (KSBE);
appellee/cross appellant Land Use Research Foundation (LURF); appellee
Nihonkai Lease Co., Inc. (Nihonkai);
appellee/cross-appellant Pu'u Makakilo, Inc. (PMI);
appellee/cross-appellant Robinson Estate (Robinson); appellants Waiāhole-Waikāne
Community Association, Hakipu'u 'Ohana, and Ka Lāhui Hawai'i (collectively,
WWCA); and appellee United
*111 States Department
of the Navy (USN). We have
carefully reviewed their arguments in light of the entire breadth of this
state's legal mandates and practical demands. For the reasons fully explained
below, we affirm in part and vacate in part the Commission's decision and
remand for further proceedings consistent with this opinion.
The Waiāhole Ditch
System collects fresh surface water and dike-impounded ground water [FN1] from the
Ko'olau mountain range on the windward side of the island of O'ahu and delivers
it to the island's central plain.
Beginning in Kahana Valley, the collection portion of the system proceeds
along the windward side of the Ko'olaus, then passes under the Ko'olau crest
to the leeward side at the North Portal. The section of the system known as the Waiāhole
Main Bore or Tunnel extends from the North Portal to the Tunnel's leeward
exit, South Portal Adit 8 (Adit 8).
The delivery portion of the system begins at Adit 8 and winds through
the plain of Central O'ahu. Measured at Adit 8, the system develops approximately
27 million gallons a day (mgd).
FN1. See generally
Reppun v. Board of Water Supply, 65 Haw. 531, 533, 656
P.2d 57, 60 (1982) ("The geological structure
of the Koolau mountains of Oahu enables parts thereof to act as natural reservoirs
of fresh water; these natural
storage compartments are called dike complexes or systems.").
The ditch system was
built in significant part from 1913 to 1916 to irrigate a sugar plantation
owned and operated by Oahu Sugar Company, Ltd. (OSCo). Until the plantation ceased operations
in 1995, OSCo used much of the ditch's flow, in addition to a substantial
supply of ground water pumped from the Pearl Harbor aquifer. At the time of this appeal, various
leeward parties still retained, but were not using, well permits to pump approximately
53 mgd of leeward ground water.
Diversions by the ditch
system reduced the flows in several windward streams, specifically, Waiāhole,
Waianu, Waikāne, and Kahana streams, affecting the natural environment
and human communities dependent upon them. Diminished flows impaired native
stream life and may have contributed to the decline in the greater Kane'ohe
Bay ecosystem, including the offshore fisheries. The impacts of stream diversion,
however, went largely unacknowledged until, in the early 1990s, the sugar
industry on O'ahu came to a close.
On July 15, 1992, the
Commission designated the five aquifer systems of Windward O'ahu as ground
water management areas, effectively requiring existing users of Waiāhole
Ditch water to apply for water use permits within one year of that date. [FN2] In June 1993,
the Waiāhole Irrigation Company (WIC), the operator of the ditch system,
filed a combined water use permit application for the existing users of ditch
water. In August 1993,
OSCo announced that it would end its sugar operations, signaling the imminent
availability of the ditch water used by OSCo and raising the question of its
FN2. See Hawai'i Revised Statutes (HRS) ch. 174C, pt. IV (1993 & Supp.1999) ("Regulation
Of Water Use"). HRS § 174C-41(a)
When it can be reasonably determined,
after conducting scientific investigations and research, that the water resources
in an area may be threatened by existing or proposed withdrawals or diversions
of water, the commission shall designate the area for the purpose of establishing
administrative control over the withdrawals and diversions of ground and surface
waters in the area to ensure reasonable-beneficial use of the water resources
in the public interest.
HRS § 174C-48(a) (1993) provides that:
"No person shall make any withdrawal, diversion, impoundment,
or consumptive use of water in any designated water management area without
first obtaining a permit from the commission."
"Existing uses," however, may continue pending application
for a water use permit. See id. HRS
§ 174C-50(c) (1993) requires that permit applications for "existing uses"
be made within one year from the effective date of water management area designation.
Conflict ensued. On November 4, 1993, DOA filed a
petition to reserve [FN3] the ditch
*112 flow for agricultural uses. The Office of Hawaiian Affairs (OHA), WWCA, KSBE, and
the Department of Hawaiian Homelands also filed petitions to reserve water.
On December 7, 1993, WWCA petitioned to amend upward the interim instream
flow standards for the Windward O'ahu streams affected by the ditch (WIIFS);
[FN4] OHA filed a similar petition on February
28, 1995. KSBE and Castle
also filed separate water use permit applications specifically requesting
water drawn by the ditch system from lands they owned. The petitions to amend the WIIFS
and the permit applications collectively exceeded the entire flow of the ditch.
§ 174C-49(d) (1993) states:
The commission, by rule, may
reserve water in such locations and quantities and for such seasons of the
year as in its judgment may be necessary.
Such reservations shall be subject to periodic review and revision
in the light of changed conditions;
provided that all presently existing legal uses of water shall be protected.
FN4. See HRS ch. 174, pt. VI, § 174C-71
(1993) ("Instream Uses Of Water").
HRS § 174C-71
reads in relevant part:
Protection of instream uses.
shall establish and administer a statewide instream use protection program....
In the performance of its duties the commission shall:
(1) Establish instream flow
standards on a stream-by-stream basis whenever necessary to protect the public
interest in waters of the State;
(2) Establish interim instream
(A) Any person with the proper
standing may petition the commission to adopt an interim instream flow standard
for streams in order to protect the public interest pending the establishment
of a permanent instream flow standard;
(B) Any interim instream flow
standard adopted under this section shall terminate upon the establishment
of a permanent instream flow standard for the stream on which the interim
standards were adopted;
(C) A petition to adopt an interim
instream flow standard under this section shall set forth data and information
concerning the need to protect and conserve beneficial instream uses of water
and any other relevant and reasonable information required by the commission;
(D) In considering a petition
to adopt an interim instream flow standard, the commission shall weigh the
importance of the present or potential instream values with the importance
of the present or potential uses of water for noninstream purposes, including
the economic impact of restricting such uses;
(E) The commission shall grant
or reject a petition to adopt an interim instream flow standard under this
section within one hundred eighty days of the date the petition is filed.
The one hundred eighty days may be extended a maximum of one hundred
eighty days at the request of the petitioner and subject to the approval of
(F) Interim instream flow standards
may be adopted on a stream-by-stream basis or may consist of a general instream
flow standard applicable to all streams within a specified area;
(3) Protect stream channels
from alteration whenever practicable to provide for fishery, wildlife, recreational,
aesthetic, scenic, and other beneficial instream uses;
(4) Establish an instream flow
program to protect, enhance, and reestablish, where practicable, beneficial
instream uses of water. The
commission shall conduct investigations and collect instream flow data including
fishing, wildlife, aesthetic, recreational, water quality, and ecological
information and basic streamflow characteristics necessary for determining
instream flow requirements.
The commission shall implement
its instream flow standards when disposing of water from state watersheds,
including that removed by wells or tunnels where they may affect stream flow,
and when regulating use of lands and waters within the state conservation
district, including water development.
In May 1994, the Commission
received complaints that, with the close of OSCo's sugar operations, WIC was
discharging unused ditch water into Central O'ahu gulches. After holding an investigation and
several meetings and considering an order to show cause regarding WIC's continuing
waste of water, the Commission requested the parties involved to enter into
mediation. The mediation
agreement and the Commission's subsequent order dated December 19, 1994 provided
that WIC would continue to supply 8 mgd to the ditch, as measured at the North
Portal, and release the surplus into the windward streams.
The interim restoration
of windward stream flows had an immediate apparent positive effect on the
stream ecology. The higher
flows flushed out exotic fish species that were harming native species by
carrying parasites and disease, competing for food and space, and interfering
with spawning rituals. Experts saw excellent potential for the repopulation
of native stream life such as 'o'opu (goby), *113 'ōpae (shrimp), and hīhīwai
FN5. See Mary Kawena Pukui & Samuel H. Elbert, Hawaiian Dictionary
68, 290-91 (rev. ed.1986)
On January 25, 1995,
the Commission ordered a combined contested case hearing on the permit applications,
reservation petitions, and petitions to amend the WIIFS. At a public hearing on April 18,
1995, the Commission received public testimony and requests to participate
in the consolidated hearing. The
Commission admitted a final total of twenty-five parties.
On July 14, 1995, the
Commission's staff submitted a proposed order to bifurcate the contested case
hearing. The proposed order
recommended that the Commission decide in a separate proceeding the allocation
of ground water drawn from KSBE's Waiawa lands in the Pearl Harbor aquifer
sector on the leeward side of the Ko'olaus. On August 7, 1995, the Commission issued an order denying
the proposed bifurcation order on the grounds that the interrelated nature
of the applications for Waiāhole Ditch water favored the consolidated
The Commission also
held hearings to determine the "existing uses" as of July 15, 1992,
the date of the designation of Windward O'ahu as a ground water management
area, that would be allowed to continue pending a decision on the permit applications,
see supra note 2. On August 15, 1995, the Commission issued
"Order Number 8," identifying the existing uses and their respective
interim allocations. "Order
Number 10," dated October 16, 1995, amended and clarified Order Number
8, allowing 9.3698 mgd, as measured at the North Portal, to flow into the
ditch until further order of the Commission.
The contested case hearing
commenced on November 9, 1995. Opening statements and presentation of evidence continued
until August 21, 1996, spanning fifty- two hearing days and four evening sessions.
The Commission received written testimony from 161 witnesses, 140 of
whom also testified orally, and admitted 567 exhibits into evidence. The parties presented closing arguments
from September 18 to 20, 1996.
On July 15, 1997, the
Commission released its proposed decision, to which the parties submitted
written and oral exceptions. While
the Commission was considering its final decision, the state governor and
attorney general publicly criticized the proposed decision as inadequately
providing for leeward interests. At about the same time, the deputy attorney general representing
the Commission was summarily dismissed. The Commission issued its final decision on December
24, 1997. The final decision
differed from the proposed decision in various respects, most notably in its
increasing the amount of water allocated to leeward permittees by 3.79 mgd.
The Commission's final
decision consisted of 1,109 FOFs, an extensive legal discussion section styled
as COLs, and a D & O explaining at length the Commission's disposition.
The following summary highlights the prominent elements of the Commission's
analysis and decision; specifically
contested FOFs and COLs appear in the relevant discussion sections of this
In its COLs, the Commission
surveyed the law of water in Hawai'i, as established in the Hawai'i Constitution,
State Water Code (the Code), and common law, focusing particularly on the
"public trust doctrine." As a preface to its determination
of the WIIFS, the Commission concluded that:
Under the State Constitution
and the public trust doctrine, the State's first duty is to protect the fresh
water resources (surface and ground) which are part of the public trust res.
Haw. Const. Art. XI, § 7; Robinson v. Ariyoshi, 65 Haw. [641,] 674[, 658
P.2d 287, 310 (1982) ]. The duty to protect public water resources is a categorical
imperative and the precondition to all subsequent considerations, for without
such underlying protection the natural environment could, at some point, be
irrevocably harmed and the "duty to maintain the purity and flow of our
waters for future generations and to assure that the waters of our land are
put to reasonable and beneficial uses" could be endangered. Id. However, the
duty to protect does not *114 necessarily
or in every case mean that all offstream uses must cease, that no new offstream
uses may be made, or that all waters must be returned to a state of nature
before even the first Hawaiians arrived in these islands and diverted stream
water to grow taro. The
particular level of protection may vary with circumstances and from time to
time; but the primary duty itself remains.
COLs at 11. The Commission identified Windward
O'ahu ground water and streams and Kane'ohe bAy as "part of the public
trust res ... subject to review under the State's public trust responsibility
as expressed in the State Water Code." Id. at 31.
The Commission acknowledged
its duty under the Code to establish instream flow standards in instituting
a program for instream use protection, see supra note 4. The
Commission found that the interim restoration of windward stream flows had
a "positive effect," FOFs at 17-18, and that "generally, the
higher the volume of instream flow and closer the stream flow approaches its
natural pre- diversion levels, the greater the support for biological processes
in the stream and its ecosystem," COLs at 32. Thus, according to the Commission, "in general,
it is expected that additional flows to the streams would increase the native
biota habitat." FOFs
A more conclusive determination
of the necessary instream flows, however, remained elusive. The Commission explained:
The Commission has found it
difficult to quantify an instream flow that corresponds to a biological condition
for a given flora or fauna. As a result, the methods used on the continental United
States to determine an appropriate instream flow have proven unsuitable in
The Water Code provides for
the establishment and modification of both interim and permanent instream
flow standards on the assumption that scientific data will eventually provide
firm knowledge about streams upon which to reach some permanent solution. Haw.Rev.Stat. § 174C-71. Unfortunately, such firm knowledge will require considerably
more work and is years away. Until that scientific knowledge is available, stream
management decisions will require a methodology that recognizes the preliminary
and incomplete nature of existing evidence.
Given the long term work needed
to define an ecologically necessary flow in a particular stream, the Commission
will need to amend "interim" instream flow standards periodically
until permanent standards can be adopted....
From the long term vantage point
of science, the biological and environmental evidence regarding streams is
preliminary. The data collection
is just beginning. The
conclusions are tentative. In some areas, experts are even hesitant to offer opinions.
For the foreseeable future, it will be necessary to manage and protect
streams through a system of working presumptions rather than on the basis
of firm scientific knowledge.
COLs at 16. The Commission nonetheless maintained:
Where scientific evidence is
preliminary and not yet conclusive regarding the management of fresh water
resources which are part of the public trust, it is prudent to adopt "precautionary
principles " in protecting the resource. That is, where there are present or potential threats
of serious damage, lack of full scientific certainty should not be a basis
for postponing effective measures to prevent environmental degradation.... In addition, where uncertainty exists,
a trustee's duty to protect the resource mitigates in favor of choosing presumptions
that also protect the resource.
Id. at 33 (emphasis
The Commission also
reviewed the legal requirements for issuance of water use permits under the
[FN6] Although the various
*115 requests for water collectively
exceeded the flow of the ditch, the Commission concluded that, "[a]t
least for the near term, water quantities in excess of the amended interim
instream flow standard and subject to the conditions affecting supplemental
flows[ [FN7]] are available at the present
time to satisfy water use permit applicants for those existing and future
offstream uses identified in the [D & O]...." Id. at 23. Based
on this conclusion, the Commission further ruled that the statutory requirement
of "reasonable- beneficial use" [FN8] could be
fulfilled, particularly with respect to agricultural uses, by a "prima
facie showing" of reasonableness and consistency with the public interest. Id. at 24-25. The
§ 174C-49(a) (1993) mandates:
To obtain a permit pursuant
to this part, the applicant shall establish that the proposed use of water:
(1) Can be accommodated with
the available water source;
(2) Is a reasonable-beneficial
use as defined in section 174C-3; (3) Will
not interfere with any existing legal use of water;
(4) Is consistent with the public
(5) Is consistent with state
and county general plans and land use designations;
(6) Is consistent with county
land use plans and policies; and
(7) Will not interfere with
the rights of the department of Hawaiian home lands as provided in section
221 of the Hawaiian Homes Commission Act.
FN7. As explained
below, the Commission created a "buffer" of unallocated water for
initial release in the streams and future allocation for offstream use.
§ 174C-3 (1993 & Supp.1999) defines "reasonable- beneficial use" as "the
use of water in such a quantity as is necessary for economic and efficient
utilization, for a purpose and in a manner which is both reasonable and consistent
with the state and county land use plans and the public interest."
[I]n this case, a variety of
management and legal factors postpone the need to fully analyze the affirmative
"public interest" tests in the context of deciding "reasonable
beneficial use." Among
these factors are: 1) the obligation
not to waste; 2) the release
into windward streams of permitted, but not used, ground water; 3) the release into windward streams of
unallocated ground water; 4)
the ditch operation and management plan;
5) conservation measures; 6)
the availability of alternative sources (ground water and reusable wastewater);[ [FN9]] 7) the four
year non-use provisions of the Code (Haw.Rev.Stat. § 174C-58);[
compliance review (Haw.Rev.Stat. § 174C-58 [sic] );[ [FN11]] and 9) low
near term demand. Thus,
careful management may defer the need to consider a higher level of scrutiny
in analyzing the "public interest" test until the time when there
is inadequate water for competing demands.
FN9. The Commission
acknowledged that various leeward parties had access to leeward ground water.
Campbell Estate, for example, still held 35 mgd in well permits, FOF
788, and Del Monte was profitably using its own ground water wells to irrigate
lands for which it sought ditch water, FOFs 793-94.
The Commission also noted the limited use of reclaimed water for irrigation,
but concluded that reclaimed water was not presently available, in view of
concerns regarding use of reclaimed water over potable aquifers and health
regulations limiting such use to certain kinds of crops. FOFs 677-786; D & O at 8. The Commission, nevertheless,
stated that it would "revisit and, if appropriate, reduce existing ground-water
permits if reclaimed water becomes available and is allowable, subject to
economic and health considerations." D & O at 8.
§ 174C-58 (1993) provides in relevant part:
Revocation of permits. After a hearing, the commission
may suspend or revoke a permit for:
(4) Partial or total nonuse,
for reasons other than conservation, of the water allowed by the permit for
a period of four continuous years or more.
§ 174C-56 (1993) states in relevant part: "At least once every twenty years, the commission shall
conduct a comprehensive study of all permits issued under this chapter to
determine whether the conditions on such permits are being complied with."
Where, finally, there is inadequate
supply for competing needs, both the "public interest" test and
the examination of "reasonableness" will require more than a prima
facie showing. As competition
for water resources increases, the analysis of both the public interest and
of reasonableness must become both more rigorous and affirmative.
The counties will be required to articulate their land use priorities
with greater specificity. For
example, even at the present time, there is more land zoned for various uses
than available water to supply those proposed uses. Thus, it is not sufficient to merely conclude that a
particular parcel of land is properly zoned and that the use is "beneficial." That minimal *116 conclusion may be inadequate to resolve
situations in which competitive demand exceeds supply. Further analysis of
public interest criteria relevant to water (e.g., conservation, alternative
uses, comparative public costs and benefits) will be needed.[ [FN12] ]
in its decision, the Commission maintained that its determination of current
water availability did not necessarily "mean that the [City's] projected
growth demands [could] be satisfied from Waiahole Ditch water; rather, the [City's] projected needs will
require even greater analysis." Id. at 23.
Agricultural uses, the
Commission concluded, were "generally" consistent with the public
interest "where adequate water [wa]s available." Id. at 26. In times of scarcity and competition,
however, "the standard of review [would] be higher." Id. at 26-27.
Existing golf course and other nonagricultural uses were "already
subject to this higher standard, in light of higher uses for windward surface
water, including retaining the water in the streams." Id. at 27. The Commission subjected all permits to "conditions
providing for stream restoration if the Commission determines that additional
water should be returned to the streams." D & O at 30.
The Commission recognized
its statutory duty, when considering competing water use permit applications,
to approve the application that "best serves the public interest."
[FN13] In the Commission's view, an inherent
conflict existed between the permit applications, reservation petitions, and
petitions to amend the WIIFS, but "[a]fter the evidence was weighed and
reasonable beneficial uses evaluated, the scope of competition narrowed significantly."
COLs at 28. The Commission,
however, did indicate certain general priorities between types of uses.
For example, because use of brackish water or treated effluent over
the 'Ewa Plain would not harm the underlying caprock aquifer, and transporting
water across the island "further reduces the protection afforded the
stream ecosystem by keeping water in its area of origin," use of ditch
water over the 'Ewa Plain caprock for new nonagricultural uses was "presumptively
disfavored." Id. The Commission also stated:
§ 174C-54 (1993) states:
Competing applications. If two or more applications which
otherwise comply with section
174C-49 are pending for a quantity of water that
is inadequate for both or all, or which for any other reason are in conflict,
the commission shall first, seek to allocate water in such a manner as to
accommodate both applications if possible;
second, if mutual sharing is not possible, then the commission shall
approve that application which best serves the public interest.
Other non-agricultural uses
in leeward Oahu for golf course and landscaping uses which could utilize available
ground water or treated effluent also carry a heavy burden to show why stream
water should be diverted out of its watershed of origin, even though central
Oahu is closer to windward Oahu than the Ewa Plain. In the short term, uncertainty regarding
the use of treated effluent over a potable aquifer, existing infrastructure
to move Waiahole Ditch system water, and the need to study instream flow needs
all mitigate in favor of continuing the use of Waiahole water for 1992 uses.
Likewise, the continued use
of Waiahole Ditch water through the existing ditch system to preserve agriculture
in central Oahu on lands in sugar production in 1992 ("footprint"
lands) as well as on other lands in central Oahu suitable for agriculture
has important value. If and until treated effluent or ground water is available,
the State has a strong interest in retaining agriculture on these lands.
Where instream flow values may be protected and offstream agricultural
uses maintained, both "uses" are accommodated in the manner promoted
by Haw.Rev.Stat. § 174C-54.
Having discussed the
legal grounds for its decision, the Commission apportioned the Waiāhole
Ditch water as follows. The
Commission granted in part and denied in part WWCA's and OHA's petitions to
amend the WIIFS, deeming it "practicable" to restore a total of
6.0 mgd to windward streams, id. at 19, *117 "more than 25% of the average
total Waiahole Ditch flow measured at the North Portal (23.3 mgd)," id. at 33. Specifically, the Commission added
4.0 mgd to the 3.9 mgd "Q90 base flow" [FN14] of Waiāhole
Stream and 2.0 mgd to the 0.5 mgd Q90 base flow of Waianu Stream, a tributary
of Waiāhole Stream. D & O at 3. The Commission thus increased the combined
base flow of Waiāhole and Waianu Streams to 10.4 mgd. Id. The Commission neither mentioned, nor made any provision
for, the instream flow of Waikāne Stream.
FN14. The "Q90
base flow" represents the minimum flow of a stream equaled or exceeded
at least 90 percent of the time.
D & O at 2. The Commission's use of the Q90 base flow stems from
its observation that "[r]unoff dominates stream flow in Hawaii and is
responsible for highly variable stream flows.... In Hawaii, streams exceed average flow just 10% of the time."
COLs at 16.
The Commission set aside
a total of 13.51 mgd for leeward offstream uses: 12.22 mgd for "agricultural"
uses and 1.29 for "other" uses. Id. at 6-7, 22. Leeward water uses would be measured
according to average use over a twelve-month period, or the "twelve month
moving average" (12-MAV).
Id. at 12. The 12-MAV,
the Commission elaborated, "allows for seasonal fluctuation, and is generally
used for all water use reporting requirements by the Commission."
In calculating the 12.22
mgd "agricultural allowance," the Commission preliminarily found
that "2,500 gallons per acre per day (gad) is a reasonable duty of water
for diversified agriculture." Id. at 6. The Commission left the gad
figure open to future evaluation and adjustment, noting that it tended towards
"the lower end of the range of estimates" due to the incipient state
of diversified agriculture operations and "a lack of data on actual uses."
Id. "There was evidence for both higher and lower quantities,"
the Commission stated, but "the flexibility in operational requirements
and the duty not to waste should provide the appropriate safeguards in either
direction." COLs at 25.
The 12.22 mgd agricultural
allowance consisted of 10.0 mgd for former OSCo sugarcane lands currently
used for diversified agriculture (approximately 4,000 acres supplied at 2,500
gad), and 2.22 mgd for Castle's agricultural lands (approximately 1,552 acres
supplied at the lesser of 2,500 gad or the amount requested). D & O at 6-7. Of the 12.22 mgd total, the Commission
allocated 10.64 mgd in water use permits, calculated by multiplying the 4,915
acres in "existing use" under Orders Number 8 and 10 by the lesser
of 2,500 gad or the amount requested. Id. at 7. The remaining 1.58 mgd was designated
a "proposed agricultural reserve," which would become available
for agricultural use permits if confirmed through the requisite rulemaking
procedures, see supra note 3. D & O at 7. The Commission
expressly prohibited unauthorized "double counting" of water allocations,
or the use of Pearl Harbor ground water on the same lands to which permits
to use Waiāhole Ditch water applied, and noted that it could suspend
or revoke permits for ground water from the Waipahu- Waiawa aquifer system
after four years of partial or total nonuse, see supra note 10.
D & O at 8.
Nonagricultural or "other"
uses, including uses by a state prison, a cemetery, and two golf courses,
PMI and Mililani Golf Club, received 1.29 mgd in permit allocations.
The Commission, however, granted PMI's use of 0.75 mgd "subject
to special requirements including a duty to seek alternative sources where
they are reasonably available in the near future."
COLs at 25. The
Commission likewise imposed on Mililani Golf Course the duty to use alternative
sources when they became reasonably available. Id.
The Commission also
created a "non-permitted ground water buffer" of 5.39 mgd, intended
for initial release in the windward streams, but available for offstream uses
as a secondary source after the 1.58 mgd proposed reserve. Id. at 33-34.
Applicants for the buffer water would not be required to petition to
amend the WIIFS. D & O at 11. The Commission, however, would take
a " 'hard look' at the best available scientific and stream flow data
and decide whether an amendment to the [WIIFS] is needed" before approving
any application and would issue all permits subject to "conditions providing
for stream restoration if the Commission determines *118 that additional water should be returned
to the stream." COLs
the Commission released into windward streams, in addition to the 6.0 mgd
added to the WIIFS, a "supplemental flow" of 6.97 mgd or more, consisting
of the 5.39 mgd buffer, the 1.58 mgd proposed reserve, and any water authorized
for use in water use permits but not actually used, which the Commission mandated
would remain in windward streams "to avoid unlawful waste."
Id. The Commission
explained that "[t]hese supplemental flows will provide a field test
to monitor and scientifically study the streams. As these supplemental flows may be permitted for offstream
uses and the actual stream flow reduced from present levels, scientific studies
will be conducted to examine the impact of reducing stream flows."
The Commission announced
its plan to establish technical advisory committees, representing a cross-section
of interests, to undertake tasks such as assessing the implementation of the
final decision, determining the feasibility of using treated wastewater over
potable aquifers, and recommending studies, conservation measures, and monitoring
plans. D & O 4-5. Parties receiving permits to use Waiāhole Ditch
water on their lands would be required to "prepare, or contract for,
a portion of the studies and monitoring activities resulting from this order,"
contributing funds on a pro rata basis according to the amount of water used.
Id. at 10. The Commission would establish a
committee "to recommend a reasonable amount for the funding and coordinate
and set up the mechanism for the collection, accounting, and distribution
of the funds." Id.
Several of the Commission's
denials of water use requests are relevant to the present appeal.
The Commission rejected DOA's 0.75 mgd permit application for a planned
agricultural park "without prejudice to [reapplication] when DOA can
demonstrate that actual use will commence within a reasonable time frame."
Id. The Commission
denied KSBE's requested allocation for golf-course and landscaping uses in
connection with its planned Waiawa by Gentry residential development, stating
that "[KSBE] may apply for additional water ... [upon receiving] the
proper land use classification, development plan approvals, and zoning changes
and [demonstrating] that actual use of water will commence within a reasonable
time frame for a proposed project." COLs at 27.
The Commission also
declined to grant WIC's request for 2.0 mgd to compensate for the "operational
losses" of the ditch system due to factors such as evaporation and leakage.
D & O at 11. The
Commission nonetheless observed that, until it designated the Kahana watershed
as a surface water management area, the 2.1 mgd of "non-regulated"
Kahana surface water drawn by the ditch would approximately cover such losses.
Id. at 12. The Commission proffered that, after
designating Kahana as a surface water management area and receiving water
use permit applications for the water, it "may consider deducting the
operational losses from the non-permitted ground water." Id.
In all, of the 27 mgd
total flow of the ditch, as measured at Adit 8, the Commission assigned 14.03
mgd to permitted leeward agricultural and nonagricultural uses and "system
losses." For the near
term, the Commission released 12.97 mgd in windward streams. However, 6.97 mgdof this 12.97 mgd
remained available for offstream leeward uses as a "proposed agricultural
reserve" or "non-permitted ground water buffer."
The present appeal followed.
Hawai'i Revised Statutes
§ 174C-12 (1993) provides: "Judicial
review of rules and orders of the commission under this chapter shall be governed
by [HRS] chapter 91 [the Hawai'i Administrative Procedures Act, or HAPA].
Trial de novo is not allowed on review of commission actions under this chapter."
Regarding appeals from agency decisions generally, this court has stated:
This court's review is ... qualified
by the principle that the agency's decision carries a presumption of validity
and appellant has the heavy burden of making a convincing showing that the
decision is invalid because it is unjust and *119 unreasonable in its consequences. Konno v. County of Hawai'i, 85 Hawai'i 61, 77, 937
P.2d 397, 413 (1997) (citations omitted).
HRS § 91-14(g) (1993) enumerates the standards
of review applicable to an agency appeal and provides: Upon review of the record the court may
affirm the decision of the agency or remand the case with instructions for
further proceedings; or it may
reverse or modify the decision and order if the substantial rights of the
petitioners may have been prejudiced because the administrative findings,
conclusions, decisions, or orders are:
(1) In violation of constitutional
or statutory provisions; or
(2) In excess of the statutory
authority or jurisdiction of the agency; or
(3) Made upon unlawful procedure;
(4) Affected by other error
of law; or
(5) Clearly erroneous in view
of the reliable, probative, and substantial evidence on the whole record; or
(6) Arbitrary, or capricious,
or characterized by abuse of discretion or clearly unwarranted exercise of
GATRI v. Blane, 88 Hawai'i 108, 112, 962
P.2d 367, 371 (1998) (citing Poe v. Hawai'i
Labor Relations Board, 87 Hawai'i 191, 194-95, 953 P.2d 569, 572-73 (1998)).
[FOFs] are reviewable under
the clearly erroneous standard to determine if the agency decision was clearly
erroneous in view of reliable, probative, and substantial evidence on the
whole record. Alvarez v. Liberty House,
85 Hawai'i 275, 277, 942 P.2d 539, 541 (1997); HRS § 91-14(g)(5).
[COLs] are freely reviewable
to determine if the agency's decision was in violation of constitutional or
statutory provisions, in excess of statutory authority or jurisdiction of
agency, or affected by other error of law. Hardin v. Akiba, 84 Hawai'i 305, 310, 933
P.2d 1339, 1344 (1997) (citations omitted); HRS § § 91-14(g)(1), (2), and (4).
"A COL that presents mixed
questions of fact and law is reviewed under the clearly erroneous standard
because the conclusion is dependent upon the facts and circumstances of the
particular case." Price v. Zoning Bd.
of Appeals of City and County of Honolulu, 77 Hawai'i 168, 172, 883 P.2d 629, 633
(1994). When mixed questions of law and fact are
presented, an appellate court must give deference to the agency's expertise
and experience in the particular field.
Dole Hawaii Division-Castle & Cooke, Inc. v. Ramil, 71 Haw. 419, 424, 794
P.2d 1115, 1118 (1990). "[T]he court should not substitute its own judgment for
that of the agency." Id. (citing Camara v. Agsalud, 67 Haw. 212, 216, 685
P.2d 794, 797 (1984)).
Poe, 87 Hawai'i at 197, 953 P.2d at 573.
Curtis v. Board of Appeals,
90 Hawai'i 384, 392-93, 978 P.2d 822, 830-31 (1999).
An FOF or a mixed determination
of law and fact is clearly erroneous when (1) the record lacks substantial
evidence to support the finding or determination, or (2) despite substantial
evidence to support the finding or determination, the appellate court is left
with the definite and firm conviction that a mistake has been made.
See Leslie v. Estate of
91 Hawai'i 394, 399, 984 P.2d 1220, 1225 (1999). "We have defined 'substantial evidence'
as credible evidence which is of sufficient quality and probative value to
enable a person of reasonable caution to support a conclusion." Id. (quoting State v. Kotis, 91 Hawai'i 319, 328, 984
P.2d 78, 87 (1999)).
FN15. As a threshold
matter, we note that we have jurisdiction to entertain this appeal.
See generally Peterson v. Hawaii Elec. Light Co., 85 Hawai'i 322, 326, 944 P.2d 1265, 1269 (1997) (recognizing the "obligation of appellate courts to
insure that they have jurisdiction to hear and determine each case" (quoting
Housing Fin. & Dev. Corp. v. Castle, 79 Hawai'i 64, 76, 898
P.2d 576, 588 (1995))). Pursuant to HRS § 174C-12, HRS chapter 91 governs our
review of the Commission's decision. See also HRS
§ 174C-60 (1993) ("Contested cases") ("Chapter 91 shall apply
except where it conflicts with this chapter."). HRS § 91-14(a) (1993)
allows judicial review of a "final decision and order in a contested
case." "A contested
case is an agency hearing that 1) is required by law and 2) determines the
rights, duties, or privileges of specific parties." Pele Defense Fund v. Puna Geothermal Venture, 77 Hawai'i 64, 67, 881
P.2d 1210, 1213 (1994); see HRS §
91- 1(5) (1993).
In this case, the parties appeal
the Commission's decision regarding permit applications for "existing"
and "new" uses and petitions to amend interim instream flow standards.
As to existing use applications, HRS § 174C- 50(b)
(1993) and Hawai'i Administrative Rules (HAR)
§ 13-171- 14(b) (1988) require a hearing where, as here, the quantity of water applied
for exceeds 25,000 gallons per month and an objection to the application is
filed by a person having standing to object. Furthermore, while the statutes
and rules do not require a hearing with respect to petitions to amend interim
instream flow standards, see HRS
(definition of interim standard); HAR
§ 13-169-40(e) (1988), or "new" use applications, see HRS § 174C-53
(1993); HAR § § 13-171-12,
- 13, -16 to -19 (1988), constitutional due process mandates a hearing in
both instances because of the individual instream and offstream "rights,
duties, and privileges" at stake.
See Puna Geothermal,
77 Hawai'i at 68, 881 P.2d at 1214.
HRS § 174C-60 states in relevant part:
"Any other law to the contrary notwithstanding, including chapter
91, any contested case hearing under this section shall be appealed upon the
record directly to the supreme court for final decision."
See also HAR § § 13-167-65(b),
13-171-26 (1988). Although the referent of "this section" is
unclear, see Ko'olau Agric. Co. v. Commission on Water Resource
83 Hawai'i 484, 492, 927 P.2d 1367, 1375 (1996)
(noting the "inartful drafting" of the Water Code's review provisions),
we discern no sound basis for demarcating decisions on certain matters for
initial appeal to the circuit court under HRS § 91-14(a), particularly
in cases such as this one, where the Commission consolidates various matters
in a single hearing. Accordingly, we read HRS § 174C-60 to provide
for direct appeal to the supreme court from the instant combined contested
case in its entirety. But
cf. Peterson, 85 Hawai'i at 331, 944
P.2d at 1274 (holding, pursuant to HRS § 269-16(f) (1993), that direct appeal from order of Public Utilities Commission lies to
this court only when order pertains to "regulation of utility rates"
or "ratemaking procedures").
A. PROCEDURAL DUE
As its first point
on appeal, WWCA alleges a violation of its constitutional right *120 to procedural
due process, specifically, its right to a fair tribunal. In Sussel v. City & County of Honolulu
Civil Service Commission, 71 Haw. 101, 107, 784 P.2d 867, 870 (1989), we recognized:
"There are certain fundamentals
of just procedure which are the same for every type of tribunal and every
type of proceeding." R.
Pound, Administrative Law 75 (1942). "Concededly, a 'fair trial in a fair
tribunal is a basic requirement of due process.' In
349 U.S. 133, 136, 75 S.Ct. 623, 99 L.Ed. 942 (1955). This applies to administrative agencies
which adjudicate as well as to courts. Gibson v. Berryhill, 411 U.S. 564, 579, 93
S.Ct. 1689, 36 L.Ed.2d 488 (1973)." Withrow v. Larkin, 421 U.S. 35, 46-47, 95
S.Ct. 1456, 43 L.Ed.2d 712 (1975).
WWCA raises several
grounds for its allegation of a denial of due process. We address each in turn.
1. Dual Status of
the Commission Chairperson
WWCA accuses the chairperson
of the Commission, Michael Wilson (Wilson), of having a "conflict of
interest" due to his concurrent status as chairperson of the state Department
of Land and Natural Resources (DLNR), an adverse party to WWCA in the instant
contested case hearing before the Commission. [FN16] We note at the
outset that the positions of chairperson of the Commission and chairperson
of the DLNR are not incompatible per se. The common law doctrine of incompatible offices prohibits
an individual from serving in dual capacity "[i]f one office is subordinate
to the other or the functions of the offices are inherently inconsistent and
repugnant to each other." State v. Villeza, 85 Hawai'i 258, 270, 942
P.2d 522, 534 (1997); see also Woods v. Treadway, 31 Haw. 792, 794 (1931). The legislature
may nevertheless override this rule as it deems appropriate or necessary.
See Schulman v. O'Reilly-Lando,
226 N.J.Super. 626, 545 A.2d 241, 243 (1988); American Canyon Fire Protection
Dist. v. County of Napa, 141 Cal.App.3d 100, 190 Cal.Rptr. 189, 192 (1983). In this
case, the legislature has expressly decreed that "[t]he *121 chairperson of the board of land and natural resources shall
be the chairperson of the commission."
HRS § 174C-7(b)
(1993). The legislature
has thus deemed it appropriate for one person to serve in both capacities.
FN16. DLNR joined
in the leeward parties' joint application for a water use permit and in many
of their motions during the hearing.
We must still decide,
however, whether any impermissible conflicts of interest prevented Wilson
from presiding over the instant proceeding. See Coyne v. State ex rel. Thomas, 595 P.2d 970, 973 (Wyo.1979)
(distinguishing incompatibility of offices and conflict of interest).
In arguing the negative, the Commission cites its own rule of disqualification,
Hawai'i Administrative Rules (HAR) § 13-167-61 (1988), which states in relevant part:
"No commission member shall sit in any proceeding in which the
member has any pecuniary or business interest in the proceeding or who is
related within the first degree by blood or marriage to any party to the proceeding."
It is undisputed that
Wilson had no personal financial or familial interest in this proceeding. WWCA nonetheless analogizes this
case to the line of precedent relating to disqualification for "institutional"
or "structural" bias. See Tumey v. Ohio, 273 U.S. 510, 47 S.Ct.
437, 71 L.Ed. 749 (1927) (reversing a conviction
rendered by a mayor concurrently serving as village chief executive and judge,
where the fines collected in the mayor's court provided a substantial part
of his salary and the village's finances); Alpha Epsilon Phi Tau
Chapter Hous. Ass'n v. City of Berkeley, 114 F.3d 840, 844-47 (9th Cir.1997) (discussing the standards established by Tumey and its progeny).
Unlike those cases, the procedural infirmity here lies less in the
potential for incidental institutional benefit to either the Commission or
DLNR than in DLNR's institutional interest, as a party directly involved in
this case, in a favorable decision by the Commission. In our view, therefore, the matter before us draws closer
comparisons to precedent invalidating procedures whereby judges presided over
nonsummary contempt proceedings that they played an instrumental role in bringing
e.g., Murchison, supra (finding a due process violation where
a judge who served as "one-man grand jury" also presided over the
trial); Brown, supra (ruling that
a judge indirectly responsible for the institution of a contempt charge for
conduct of which he had no personal knowledge could not preside over trial);
see also White
v. Board of Educ.,
54 Haw. 10, 16, 501 P.2d 358, 363 (1972) (holding
that, although the superintendent of education was the secretary of the decisionmaking
board, he should have recused himself from a hearing regarding disciplinary
action that he imposed). Here, Wilson similarly presided over a proceeding in
which he, by direct association, [FN18] assumed an active partisan
role. He sat in judgment,
on the one hand, of legal claims and factual representations he advanced,
on the other.
FN17. Other cases
cited by DOA/DLNR, rejecting due process objections where the decisionmaker
performed both investigative and adjudicative functions, see Withrow, 421 U.S. at 47-55, 95
S.Ct. 1456 previously expressed a position on a
policy issue related to the dispute, see Hortonville Joint
School Dist. v. Hortonville Educ. Ass'n, 426 U.S. 482, 493, 96 S.Ct. 2308, 49 L.Ed.2d 1
(1976), or shared a common employer with a party,
see McDonald v. Cline, 193 W.Va. 189, 455 S.E.2d 558, 560 (1995), are similarly inapposite.
FN18. We do not
join DOA/DLNR in speculating as to how much authority the DLNR chairperson
actually wields over DLNR. See HRS
§ 26-15 (1993) (designating the board of land and natural resources as the
head of DLNR and allowing the board to delegate powers to the chairperson).
Whether the DLNR chairperson is the leader or subordinate of the board, or
something in between, the result is the same.
Aside from any actual
institutional bias on Wilson's part in this case,
"no one would argue seriously
that the disqualification of [decision-makers] on grounds of actual bias ...
prevents unfairness in all cases." State
70 Haw. 459, 467, 776 P.2d 1182, 1187 (1989). So "our system of [justice]
has always endeavored to prevent even the probability of unfairness." In re Murchison, supra.
The Supreme Court teaches us
too that justice can "perform its high function in the best way [only
if it satisfies] 'the appearance of justice.' Offutt
v. United States,
348 U.S. 11, 14, 75 S.Ct. 11, 99 L.Ed. 11 [ (1954) ]." In re Murchison, supra. For in a popular government, "
'justice must not only be done but manifestly be seen to be done....'
Rex v. Justices of *122 Bodmin,  1 K.B.
321, 325." Joint Anti-Fascist Refugee
Comm. v. McGrath, 341 U.S. 123, 172 n. 19, 71 S.Ct. 624, 95 L.Ed. 817 (Frankfurter,
J., concurring) (1951)
Sussel, 71 Haw. at 107-08, 784
P.2d at 870 (brackets in original). See also State
89 Hawai'i 371, 379, 974 P.2d 11, 19 (1998) ("[A]side
from the technical absence of bias or conflict of interest, certain situations
may give rise to such uncertainty concerning the ability of the [adjudicator]
to rule impartially that disqualification becomes necessary.").
We have held that "the
test for disqualification due to the 'appearance of impropriety' is an objective
one, based not on the beliefs of the petitioner or [adjudicator], but on the
assessment of a reasonable impartial onlooker apprised of all the facts."
Ross, 89 Hawai'i at 380, 974
P.2d at 20. From this objective viewpoint, we fail to see how Wilson's
dual status as adjudicator and litigant could not have reasonably cast doubt on his ability to rule with absolute
[h]aving been a part of [the
advocacy] process a[n adjudicator] cannot be, in the very nature of things,
wholly disinterested in [the result]. While he [or she] would not likely have all the zeal
of a [party], it can certainly not be said that he [or she] would have none
of that zeal.
Murchison, 349 U.S. at 137, 75 S.Ct.
can be a judge in his [or her] own case...." Brown, 70 Haw. at 466, 776 P.2d at 1187
(citing Murchison, 349 U.S. at 136, 75 S.Ct. 623). Wilson served in that exact capacity with respect to DLNR
in the instant proceeding. We
thus hold that, where DLNR was a party in the contested case before the Commission,
the basic constitutional mandate that a tribunal be impartial and that "justice
must satisfy the appearance of justice," id. at 467, 776 P.2d at 1188 (citing
Offutt, 348 U.S. at 14, 75 S.Ct.
11), precluded the joint chairperson of the Commission
and DLNR from presiding over the hearing.
The appropriate remedy
for any bias, conflict of interest, or appearance of impropriety is the recusal
or disqualification of the tainted adjudicator. See Ross, 89 Hawai'i at 376-77,
974 P.2d at 16-17; 2 Charles H. Koch, Jr., Administrative Law & Practice § 6.10, at 306
(1997). Nonetheless, although WWCA objected early to Wilson's dual status,
at no point during the proceedings did it seek Wilson's disqualification. It instead filed a motion seeking
to dismiss DLNR from the instant proceeding. WWCA has not cited, nor have we discovered, any precedent
for such a measure. [FN19] WWCA's course
of action suggests that it objects less to the chairperson's dual status than
to the nature of DLNR's participation in this case. [FN20]
FN19. Even on
appeal, WWCA does not seek the usual remedy of rehearing or reconsideration
without the chairperson, see, e.g., White, 54 Haw. at 16, 501 P.2d
at 363 (remanding for rehearing), but simply asks
this court to set aside the Commission's final decision, see infra note 24.
FN20. As WWCA
points out, HAR § § 13-169-32
and -33 (1988) require DLNR to assist the Commission in investigating streams
and developing instream flow standards.
A party asserting grounds
for disqualification must timely present the objection, either before the
commencement of the proceeding or as soon as the disqualifying facts become
known. See, e.g., Honolulu Roofing Co.
49 Haw. 578, 615-16, 426 P.2d 298, 322 (1967); Yorita v. Okumoto, 3 Haw.App. 148, 152, 643
P.2d 820, 824 (1982); Capitol Transp. Inc. v. United States, 612 F.2d 1312, 1325 (1st
Cir.1979) ("Contentions of bias should be raised
as soon as practicable after a party has reasonable cause to believe that
grounds for disqualification exist."). The unjustified failure to properly raise the issue of
disqualification before the agency forecloses any subsequent challenges to
the decisionmakers' qualifications on appeal. See Power v.
Federal Labor Relations Auth., 146 F.3d 995, 1002 (D.C.Cir.1998)
( "[I]t will not do for a claimant to suppress his misgivings regarding
bias while waiting anxiously to see whether the decision goes in his favor."
(citation and brackets omitted)); In re Duffy, 78 Wash.App. 579, 897 P.2d 1279, 1281 (1995) ("A litigant's
assertion of the right to disqualify a judge, whether based upon statute or
due process *123 considerations, must be timely or the objection is waived.").
Despite its awareness
of Wilson's dual status, WWCA, apparently as a matter of deliberate and strategic
choice, never sought Wilson's disqualification. WWCA cannot now raise the matter
as grounds for overturning the Commission's decision.
if WWCA had moved to disqualify Wilson, the long-recognized "rule of
necessity" not only allows, but requires a decisionmaker to "act
in a proceeding, when he [or she] would otherwise be disqualified, if jurisdiction
is exclusive and no provision exists for substitution." Yamada v. Natural Disaster Claims Comm'n, 54 Haw. 621, 628, 513
P.2d 1001, 1006 (1973). See also Schwab v. Ariyoshi, 57 Haw. 348, 350, 555
P.2d 1329, 1331 (1976) ("[D]isqualification
will not be permitted to destroy the only tribunal with power in the premises."
(quoting Brinkley v. Hassig, 83 F.2d 351, 357 (10th Cir.1936)).
HAR § 13-167-6 (1988)
provides: "Four members
of the commission shall constitute a quorum to transact business and the concurrence
of a simple majority of the members of the commission shall be necessary to
approve any action of the commission." No procedure exists for the appointment
of substitute commissioners. [FN21] In this case, two commissioners withdrew
from the case at the outset, reducing the six-member Commission charged with
"exclusive jurisdiction and final authority in all matters relating to
the implementation and administration of the state water code," HRS
§ 174C-7(a), to the four-member quorum required to conduct business.
Consequently, where Wilson's disqualification would have prevented
the Commission from acting on this case, the "rule of necessity"
demanded that Wilson preside over the instant proceeding.
Wilson's dual status as chairperson of the Commission and the DLNR,
therefore, did not constitute a reversible due process violation under the
facts of this case.
§ 13-167-56(c) (1988) provides: "The
chairperson of the commission shall be the presiding officer.
However, the chairperson may designate another commission member, an
appointed representative, or a master to be presiding officer unless prohibited
by law." As explained
in HAR § 13-167-56(b), the "presiding officer" performs mere administrative
functions, such as giving notice of the hearing, administering oaths, issuing
subpoenas, ruling on objections or motions, and "dispos[ing] of other
matters that normally and properly arise in the course of a hearing authorized
by law that are necessary for the orderly and just conduct of a hearing."
HAR § 13-167-56 does not allow the grant of any ultimate decisionmaking authority
to an alternate presiding officer. To the contrary, the Code mandates that the six-member
Commission "shall have exclusive jurisdiction and final authority,"
HRS § 174C-7(a), and that "[t]he final decision on any matter shall be made by the
commission," HRS § 174C-10
2. Improper Influence
by the Governor and Attorney General
WWCA also argues that
the state governor and attorney general exerted improper influence on the
Commission during the period of deliberation between the proposed and final
decisions. WWCA specifically
refers to the governor's public criticism of the proposed decision, the attorney
general's personal appearance before the Commission in order to argue DLNR/DOA's
exceptions to the proposed decision, and the dismissal of the deputy attorney
general assigned to the Commission.
Where an agency performs
its judicial function, external political pressure can violate the parties'
right to procedural due process, thereby invalidating the agency's decision.
See generally Sokaogon Chippewa Comm.
Ass'n v. Babbitt, 929 F.Supp. 1165, 1173-80 (D.Wis.1996) (consolidating the case law); Koch, supra, at §
6.13. Such improper influence may issue from the legislature, see,
e.g., ATX, Inc. v. United States Dept. of Transp., 41 F.3d 1522, 1527 (D.C.Cir.1994); Pillsbury Co. v. Federal Trade
354 F.2d 952, 963-64 (5th Cir.1966), as well as
from sources within the executive branch, see, e.g., Portland
Audubon Soc'y v. Endangered Species Comm., 984 F.2d 1534, 1543-48 (9th Cir.1993); Jarrott
225 F.Supp. 827 (D.D.C.1964). As the United States Court of Appeals
for the D.C. Circuit explained in ATX:
[External political] interference
in the administrative process is of heightened concern in a quasi-judicial
proceeding, *124 which is guided
by two principles. First,
"the appearance of bias or pressure may be no less
objectionable than the reality."
of Columbia Fed'n of Civic Ass'ns v. ]volpe, 459 F.2d [1231,] 1246-47 [ (D.C.Cir.), cert. denied, 405
U.S. 1030, 92 S.Ct. 1290, 31 L.Ed.2d 489 (1972)
] (emphasis added); see also Koniag, Inc. v. Andrus, 580 F.2d 601, 610 (D.C.Cir.),
cert. denied, 439 U.S. 1052, 99 S.Ct. 733, 58 L.Ed.2d 712 (1978) (Koniag) (congressional letter
"compromised the appearance of the Secretary's impartiality").
Second, judicial evaluation of the pressure must focus on the nexus between the pressure and the actual decision maker. As we have previously observed,
"the proper focus is not on the content of ... communications in the
abstract, but rather upon the relation between the communications and the
adjudicator's decisionmaking process." [Peter ] kiewittt [ Sons' Co. v. United States Army
Corps of Eng'rs],
714 F.2d [163,] 169-70 [ (D.C.Cir.1983) ].
41 F.3d at 1527 (footnote omitted). See also Pillsbury, 354 F.2d at 964 (holding that
external pressure "focus[ing] directly and substantially upon the mental
decisional processes" of an administrator in a pending case "sacrifice[d]
the appearance of impartiality--the sine qua non of American judicial justice").
WWCA first objects
to the governor's public remarks concerning his opinions on the merits of
this case. After the issuance
of the proposed decision, the governor publicly announced his support for
leeward interests, criticizing the Commission's preliminary disposition. [FN22]
FN22. The governor's
comments do not appear in the record. None of the other parties, however, dispute WWCA's rendition
of their general content.
The governor appoints
all of the commissioners, two of whom, the chairperson of DLNR and the director
of the Department of Health, serve in his cabinet. See HRS § 174C-7(b); Haw. Const. art. V., § 6. The governor
thus occupies an obvious position of influence over the Commission.
We do not take lightly the governor's legitimate supervisory interest
and role with respect to the Commission.
At the same time, we cannot emphasize strongly enough that all adjudicative
proceedings conducted by the Commission must conform to the same exacting
standards of fairness, impartiality, and independence of judgment applicable
in any court of law. See
Sussel, 71 Haw. at 107, 784 P.2d
In the instant case,
however, the governor's public remarks fall short of the level of interference
that courts have deemed violative of due process. In the leading case on improper influence, Pillsbury, the adjudicator
was personally subjected to "searching examination as to how and why
he reached his decision in a case still pending before him and ... critici[sm]
for reaching the 'wrong' decision."
F.2d at 964. Other cases involved, at minimum, some sort of direct
contact with the decisionmaker regarding the merits of the dispute. See e.g., Koniag, 580 F.2d at 610; Jarrott, 225 F.Supp. at 831-33; see also
Gulf Oil Corp. v. Federal Power Comm'n, 563 F.2d 588, 611 (3d Cir.1977) (holding that intervention for the purpose of expediting
the disposition, rather than affecting its merits, did not influence the agency);
ATX, 41 F.3d at 1528 (recognizing that
legislative hearings not focusing directly on the decisionmakers and the merits
of the case did not invalidate the agency decision).
Here, the governor made
several general statements about his own views of the case. Although they related directly to
the dispute before the Commission, the comments arose in public forums apart
from the instant proceeding and reached the Commission indirectly, if only
through the windward parties' objections. WWCA provides no evidence of the type of direct and focused
interference seen in the cases cited above. [FN23] In the absence of evidence of direct communication
with the decisionmakers, WWCA fails to *125 demonstrate the requisite "nexus between
the pressure and the actual decision maker." ATX, 41 F.3d at 1527. As a result,
we have no choice but to presume that the Commission upheld its duty to decide
the case without taking the governor's remarks into consideration.
FN23. In its written
objection to the Commission, HTF demanded that the Commission disclose any
ex parte communications between the
governor or others on his behalf and the Commission "so that they can
be dealt with to eliminate or minimize their impact on this case." The Commission apparently did not
respond to this request.
Regarding the complaint against the attorney
general's personal participation in the hearing, we first note that, in contrast
to the cases cited above, the attorney general expressed her objections not
through any ex parte communications,
but during the formal proceedings on the record. More significantly, all the cases
of improper influence cited by WWCA and unearthed by our own research involved
interference by an office having superior status or some control over the
salary or tenure of the decisionmaker. See, e.g., ATX, supra (communications
from members of Congress); Pillsbury,
supra (same); Portland Audubon, supra (alleged interference from president and his staff); Jarrott, supra (high level
state department officials contacted District of Columbia zoning board); Barkey v. Nick, 11 Mich.App. 381, 161
N.W.2d 445, 447 (1968) (city commissioner appeared
before zoning board); Place v. Board of Adjustment, 42 N.J. 324, 200 A.2d
601, 605 (1964) (mayor appeared before zoning board).
Unlike the governor, the attorney general wields no such authority
over the Commission. The attorney general's personal
intervention in the hearing, although direct, does not amount to the type
and degree of political control that would normally violate due process.
WWCA argues that, because the office of
the attorney general simultaneously represented the Commission, the resulting
"conflict of interest" compromised WWCA's right to a fair hearing.
The attorney general has a statutory duty, among others, to provide
legal counsel to state agencies such as the Commission.
See HRS § 26-7 (1993)
(attorney general "shall administer and render state legal services");
HRS § 28-4 (1993)
(attorney general "shall give advice and counsel"). Regarding potential conflicts in
this duty, we have held that the office of the attorney general
may represent a state employee
in civil matters while investigating and prosecuting him in criminal matters,
so long as the staff of the [department of the attorney general] can be assigned
in such a manner as to afford independent legal counsel and representation
in the civil matter, and so long as such representation does not result in
prejudice in the criminal matter to the person represented.
[State v. Klattenhoff, 71 Haw. 598,] 605, 801
P.2d [548,] 552 [ (1990) ]. In other words, "separate
units of a governmental agency, such as the office of attorney general, may
undertake concurrent representation that would otherwise offend [the provisions
of the Hawai'i Rules of Professional Conduct (HRPC) governing conflicts of
interest, including HRPC 1.7 (1995) ], ... so long as no prejudice is suffered
by any of the clients." Comment to HRPC 1.10 (1995) (emphasis added).
Chun v. Board of Trustees
of Employees' Retirement System of State of Hawai'i, 87 Hawai'i 152, 173-74,
952 P.2d 1215, 1236-37 (1998) (some alterations
in original); see also HAR § 13-167-29(b)
(1988) (requiring state agencies appearing before
the Commission as an applicant or in an adjudicative setting to use counsel
independent of the Commission's).
In Klattenhoff, we allowed
separate deputies or divisions of the attorney general's office to represent
conflicting interests. See
id. at 605, 801 P.2d at 552.
In this case, however, the attorney general herself advocated on behalf
of two state agencies, DLNR and DOA, while deputy attorneys general represented
the Commission and another agency, DHHL. HRS § 28- 8(a) (Supp.1999) authorizes the
attorney general to "appoint, and at [her] pleasure remove, a first deputy
and such other deputies .... [who] shall act under [her] direction and shall
perform such duties as [she] may require." Given the attorney general's
plenary authority over her department, we agree with WWCA that the attorney
general's personal representation of DLNR/DOA necessarily prevented her department
from affording independent legal *126 counsel to other
state parties, particularly the Commission.
The question remains, however, whether
this conflict of interest deprived WWCA of its right to a fair hearing. In Chun, we recognized
that the attorney general's obligations as counsel to state agencies may conflict
with her common law duties as representative of the "public interest,"
see HRS § 26-7
(providing that the attorney general "shall ... have such authority as
heretofore provided by common law").
See Chun, 87 Hawai'i at 170, 952
P.2d at 1233.
Indeed, the legislature implicitly
foresaw the likelihood of conflicts "eventuating" in connection
with the Attorney General's multiple roles, duties, and functions when it
in 1995, conferring upon the attorney general the prerogative, "for reasons
deemed ... good and sufficient," to decline "to employ or retain
an attorney" to represent "any department, board, commission, agency,
bureau, or officer of the State" and, in that event, authorizing the
state instrumentality--with the concurrence of the governor--to retain legal
counsel on its own initiative for the purpose of securing such representation.
See HRS § § 28-8.3(a)(16)
Id. at 174, 952 P.2d at 1237
(internal cross-reference omitted). We thus held that, where the attorney
general "perceived herself to be in a conflict of interest with the [agency
she represented], [she] was ethically obligated to recommend the retention
of other counsel to represent the [agency] and to take such other action as,
in her opinion, the circumstances required...." Id. at 176, 952 P.2d at 1239.
Here, in personally
advocating DOA/DLNR's interests, the attorney general evidently decided that
her vision of the "public interest" diverged from the Commission's. At about the same time as her appearance
at the hearing, however, the attorney general "terminated" her representation
of the Commission by summarily dismissing the Commission's attorney.
While the reason for the dismissal is disputed, its practical consequence
was as the Commission described in the cover letter of the final decision: "The decision was rendered without the assistance of counsel
after the Commission's attorney was dismissed." Momentarily setting other questions
of its propriety aside, therefore, we hold that the dismissal effectively
cured the conflict generated by the attorney general's representation of the
WWCA also protests the dismissal as an
impropriety in itself. We
indeed harbor doubts about the manner in which theattorney general withdrew
as the Commission's counsel. HRPC
1.16(d) (1994), for example, requires attorneys, upon termination of representation,
to "take steps to the extent reasonably practicable to protect a client's
interests." The record
affords little evidence of any consideration of the Commission's interests
on the part of the attorney general.
WWCA suggests that the
dismissal both impaired the competence of the Commission and induced the Commission
to change its decision. As
to the first contention, the Code vests final decisionmaking authority and
responsibility in the commissioners, see HRS § 174C-7(a), and
mandates that "[e]ach member shall have substantial experience in the
area of water resource management," HRS § 174C-7(b). As to the second, WWCA fails to
show how the dismissal could have served as an intelligible and effective
means of swaying the Commission on the merits, even assuming that it was so
intended. All told, we
are not convinced that the dismissal impaired the Commission's ability to
decide this case competently and impartially to such an extent that a violation
of WWCA's due process rights occurred.
WWCA argues that the substantial changes
in the final decision, all to WWCA's detriment, establish that external pressure
in fact influenced the Commission. We agree that a sudden reversal in direction or a weakly
supported decision may raise an inference of improper influence. See ATX, 41 F.3d at 1529. Given
the tenuous nexus between the conduct of the governor and attorney general
and the Commission's deliberations, however, we believe that the changes,
though concededly oddly timed, did not amount to an appearance of impropriety
*127 Finally, WWCA
attempts to combine the governor's comments with the attorney general's conduct
as components of a larger concerted effort by the administration to undermine
the Commission. WWCA offers
no concrete proof of this alleged conspiracy. Without more, we have no alternative
but to conclude that the whole does not exceed the sum of the parts. See In re Bouslog, 41 Haw. 270, 277 (1956) (maintaining that allegations of impropriety " must
be based upon facts buttressed by reasons, and not a suppositious cumulative
effect, which is at best a mere conclusion arguendo " (citation and internal quotation marks omitted)).
In sum, based on the
foregoing facts and the relevant precedent, we cannot say that a violation
of constitutional dimensions occurred in this case. This holding does not adequately convey, however, our
serious misgivings regarding the events following the Commission's proposed
decision. The question of timing is key to our concerns. The events in controversy occurred
after months of painstaking hearings and deliberations--during the final stage
between the Commission's proposed and final decisions. In the end, the Commission did in
fact substantially alter its decision, deleting language favorable to the
windward parties and increasing the amount of water allocated to leeward permittees.
These eleventh hour developments, while falling short of a constitutional
violation, strongly suggest that improper considerations tipped the scales
in this difficult and hotly disputed case.
We acknowledge the prerogative of public
officials to advocate according to their views of the "public interest"
and to voice their views on public policy in public forums. Yet public officials must also be
mindful of the broader public interest in the fairness and integrity of the
adjudicatory process. Along
these lines, it is safe to say that the conduct of the public officials in
this case did nothing to improve public confidence in government and the administration
of justice in this state.
feeling of unease regarding the circumstances under which the Commission rendered
its final decision, our assessment of the totality of the circumstances prevents
us from concluding that the aforementioned conduct constitutes a violation
of WWCA's due process rights. Furthermore, in reviewing the merits of this case, we
have identified substantial problems with the Commission's decision that require
further attention. Thus,
for the reasons articulated below, we vacate and remand the decision for further
proceedings. In so doing,
we are confident that the intervening years, along with the changes in the
Commission's personnel, have sufficiently removed any taint of impropriety
created by the conflicts and political pressures present in the prior proceeding.
See Pillsbury, 354 F.2d at 965; Koniag, 580 F.2d at 611. [FN24]
FN24. In raising
its various due process objections, WWCA specifically seeks the remedy of
reinstatement of the Commission's proposed decision. In most cases, however, a remand
for reconsideration or further proceedings will suffice to purge the taint
of improper influence. But
see Koniag v. Kleppe, 405 F.Supp. 1360, 1372-73 (D.D.C.1975) (reinstating the last untainted authoritative ruling because
the effect of the external pressure had not yet dissipated); Jarrott, 225 F.Supp. at 836 (remanding for rehearing by a specially constituted board).
B. THE PUBLIC TRUST
arises from the Commission's discussion of the "public trust doctrine"
in its decision. Before
addressing the parties' arguments, we survey the historical development of
the doctrine in this jurisdiction.
1. History and Development
The United States Supreme
Court advanced the seminal modern expression of the public trust doctrine
in Illinois Central Railroad
Co. v. Illinois, 146 U.S. 387, 13 S.Ct. 110, 36 L.Ed. 1018 (1892). [FN25] The case arose
from a disputed conveyance of land submerged under the navigable waters of
Lake Michigan by the state legislature to private *128 interests. The Court characterized the state's
interest in such lands as
FN25. The doctrine
traces its origins to the English common law and ancient Roman law.
See Lynda L. Butler, The Commons Concept: A Historical Concept with Modern Relevance,
23 Wm. & Mary L.Rev. 835, 846-67 (1982).
title different in character
from that which the State holds in lands intended for sale.... It is a title held in trust for the
people of the State that they may enjoy the navigation of the waters, carry on commerce
over them, and have liberty of fishing therein freed from the obstruction
or interference of private parties.
Id. at 452, 13 S.Ct. 110 (emphasis added). "The
control of the state for purposes of the trust," the Court continued,
can never be lost, except as
to such parcels as are used in promoting the interests of the public therein, or can be disposed of without any substantial impairment of the
public interest in the lands and waters remaining. ... The State can no more abdicate its
trust over property in which the whole people are interested, like navigable
waters and soils under them, so as to leave them entirely under the use and
control of private parties, ... than it can abdicate its police powers in
the administration of government and the preservation of the peace. In the administration of government
the use of such powers may for a limited period be delegated to a municipality
or other body, but there always remains with the State the right to revoke
those powers and exercise them in a more direct manner, and one more conformable
to its wishes. So with
trusts connected with public property, or property of a special character,
like lands under navigable waters, they cannot be placed entirely beyond the
direction and control of the State.
Id. at 453-54, 13 S.Ct. 110 (emphases added). [FN26] Because the wholesale surrender of state
authority over the lands in question was "not consistent with the exercise
of that trust which requires the government of the State to preserve such
waters for the uses of the public," id. at 453, 13 S.Ct. 110 the disputed grant was "necessarily revocable, and the
exercise of the trust by which the property was held by the State can be resumed
at any time," id. at 455, 13 S.Ct. 110.
FN26. Courts and
commentators have identified up to three separate interests in trust resources:
the jus privatum, or private property right, the jus regium, otherwise known as the police power, and the jus publicum,
the public trust. See, e.g., id. at 456-58; Butler, supra, at 861- 62.
This court endorsed
the public trust doctrine in King v. Oahu Railway & Land
11 Haw. 717 (1899). Quoting extensively from Illinois Central, we agreed
that "[t]he people of Hawaii hold the absolute rights to all its navigable
waters and the soils under them for their own common use. The lands under the navigable waters
in and around the territory of the Hawaiian Government are held in trust for
the public uses of navigation."
Id. at 725 (citation omitted). Later decisions confirmed our embrace of the public trust
doctrine. See County
of Hawaii v. Sotomura, 55 Haw. 176, 183-84, 517 P.2d 57, 63 (1973) ("Land below the high water mark ... is a natural resource
owned by the state subject to, but in some sense in trust for, the enjoyment
of certain public rights." (citation and internal quotation marks omitted)),
cert. denied, 419 U.S. 872,
95 S.Ct. 132, 42 L.Ed.2d 111 (1974); In re Sanborn, 57 Haw. 585, 593-94, 562
P.2d 771, 776 (1977) (observing that any purported
land court registration of lands below the high water mark was ineffective
under the public trust doctrine); State v. Zimring, 58 Haw. 106, 121, 566
P.2d 725, 735 (1977) (holding that lava extensions
"vest when created in the people of Hawaii, held in public trust by the
government for the benefit, use and enjoyment of all the people.").
In McBryde Sugar Co. v.
54 Haw. 174, 504 P.2d 1330, aff'd on reh'g, 55 Haw. 260, 517 P.2d 26 (1973), appeal dismissed and cert. denied, 417 U.S. 962, 94 S.Ct. 3164, 41 L.Ed.2d 1135 (1974), we contemplated the public interest in water resources.
Consulting the prior laws and practices of this jurisdiction, we observed
that, in granting land ownership interests in the Māhele, [FN27] the Hawaiian Kingdom expressly reserved its sovereign prerogatives
"[t]o encourage *129 and even to enforce the usufruct of lands
for the common good." See
id. at 184-86, 94 S.Ct. 3164 504 P.2d at 1337-39 (quoting Principles
Adopted By The Board of Commissioners To Quiet Land Titles In Their Adjudication
Of Claims Presented To Them, 2 Statute Laws of His Majesty Kamehameha III(SLH)
81, 85 (1847), reprinted in 2 Revised Laws of Hawaii (RLH) 2124, 2128 (1925) [hereinafter
Land Commission Principles] ). "The right to water," we explained,
FN27. The Māhele
and the subsequent Kuleana Act instituted the concept of private property
in the Hawaiian Kingdom. For
an overview of its operation, see id. at 184-85, 504 P.2d at
J. Chinen, The Great Mahele (1958); Lilikalā Kame'eleihiwa, Native Lands and Foreign Desires
is one of the most important
usufruct of lands, and it appears clear to us that by the foregoing limitation
the right to water was specifically and definitely reserved for the people
of Hawaii for their common good in all of the land grants.
Thus by the Mahele and subsequent
Land Commission Award and issuance of Royal Patent right to water was not
intended to be, could not be, and was not transferred to the awardee, and
the ownership of water in natural watercourses and rivers remained in the
people of Hawaii for their common good.
Id. at 186-87, 504 P.2d at
1338-39 (footnote omitted) (emphases added). In Robinson v. Ariyoshi, 65 Haw. 641, 658 P.2d
287 (1982), we elaborated on our McBryde decision,
comparing the retained sovereign "prerogatives, powers and duties"
concerning water to a "public trust":
[W]e believe that by [the sovereign
reservation], a public trust was imposed upon all the waters of the kingdom. That is, we find
the public interest in the waters of the kingdom was understood to necessitate
a retention of authority and the imposition of a concomitant duty to maintain
the purity and flow of our waters for future generations and to assure that
the waters of our land are put to reasonable and beneficial uses. This is not ownership
in the corporeal sense where the State may do with the property as it pleases;
rather, we comprehend the nature of the State's ownership as a retention of
such authority to assure the continued existence and beneficial application
of the resource for the common good.
Id. at 674, 658 P.2d at 310 (emphases added).
In the footnote accompanying
this passage, we added:
The State unquestionably has
the power to accomplish much of this through its police powers. Hudson County Water Co. v. McCarter, 209 U.S. 349, 28 S.Ct. 529, 52 L.Ed. 828 (1908). We believe however that the king's
reservation of his sovereign prerogatives respecting water constituted
much more than restatement of police powers, rather we find that it retained
on behalf of the people an interest in the waters of the kingdom which the
State has an obligation to enforce and
which necessarily limited the creation of certain private interests in waters. See, Sax, The Public Trust Doctrine in Natural Resource Law:
Effective Judicial Intervention,
68 Mich. L.Rev. 471 (1970); Maloney,
Ausness & Morris, A Model Water Code,
[ ]at 81 (1972).
Id. at 674 n. 31, 658 P.2d
at 310 n. 31 (emphasis added). The trust over the water resources
of this state, we observed, was "akin to the title held by all states
in navigable waterways which was recognized in [Illinois Central ]." Robinson, 65 Haw. at 674, 658 P.2d
at 310. Insofar as the two trusts differ in origin [FN28] and concern, however, we recognized that "the extent
of the state's trust obligation of course would not be identical to that which
applies to navigable waterways."
at 675, 658 P.2d at 310.
the navigable waters trust, the United States Supreme Court has explained:
At common law, the title and
dominion in lands flowed by the tide water were in the King for the benefit
of the nation.... Upon the American
Revolution, these rights, charged with a like trust, were vested in the original
States within their respective borders, subject to the rights surrendered
by the Constitution of the United States.
The new States admitted into
the Union since the adoption of the Constitution have the same rights as the
original States in the tide waters, and in the lands under them, within their
Phillips Petroleum Co. v. Mississippi, 484 U.S. 469, 473-74,
108 S.Ct. 791, 98 L.Ed.2d 877 (1988) (quoting Shively
152 U.S. 1, 57, 14 S.Ct. 548, 38 L.Ed. 331 (1894)).
In 1978, this state
added several provisions to its constitution specifically relating to water
*130 resources. Article
XI, section 1 of the Hawai'i Constitution states:
CONSERVATION AND DEVELOPMENT
Section 1. For the benefit of present and future
generations, the State and its political
subdivisions shall conserve and protect Hawaii's natural beauty and all natural resources, including
land, water, air, minerals and energy sources, and shall promote the
development and utilization of these resources in a manner consistent with
their conservation and in furtherance
of the self-sufficiency of the State.
All public natural resources
are held in trust by the State for the benefit of the people.
Article XI, section 7 further provides:
Section 7. The State has an obligation to protect,
control and regulate the use of Hawaii's water resources for the benefit of
The legislature shall provide
for a water resources agency which, as provided by law, shall set overall
water conservation, quality and use polices;
define beneficial and reasonable uses; protect ground and surface water resources, watersheds and
natural stream environments; establish
criteria for water use priorities while assuring appurtenant rights and existing
correlative and riparian uses and establish procedures for regulating all
uses of Hawaii's water resources.
In 1987, pursuant to the constitutional mandate of
article XI, section 7, the legislature enacted the State Water Code, HRS chapter
2. Relationship to
the State Water Code
Several parties, most
notably LURF, contend that the Commission erred by relying upon the public
trust doctrine as a legal authority in addition to the State Water Code. According
to LURF, the Code "subsumes and supplants whatever common law doctrine
of public trust may previously have existed in Hawai'i." By invoking
the public trust, LURF argues, the Commission improperly expanded its statutory
powers, upsetting the Code's "balance of interests."
The public trust
in the water resources of this state, like the navigable waters trust, has
its genesis in the common law.
See generally HRS § 1-1 (1993); Housing Fin. & Dev. Corp.
91 Hawai'i 81, 89-90, 979 P.2d 1107, 1115-16 (1999)
(recognizing that "[t]he common law ... includes the entire wealth of
received tradition and usage"). The legislature may, subject to the constitution,
modify or abrogate common law rules by statute. See Fujioka v. Kam, 55 Haw. 7, 10, 514 P.2d
568, 570 (1973). Statutes in derogation of the common law, however, must
be strictly construed. Burns
Int'l Sec. Servs., Inc. v. Department of Transp., 66 Haw. 607, 611, 671
P.2d 446, 449 (1983). "Where it does not appear there was legislative purpose
in superseding the common law, the common law will be followed." Id.; see also Watson v. Brown, 67 Haw. 252, 256, 686
P.2d 12, 15 (1984) (holding that a statutory remedy
is "merely cumulative and does not abolish an existing common law remedy
unless so declared in express terms or by necessary implication"). The Code does not evince any legislative
intent to abolish the common law public trust doctrine. To the contrary, as discussed in
Part III.C.2, infra, the legislature
appears to have engrafted the doctrine wholesale in the Code.
As LURF points out, statutes establishing
comprehensive regulatory schemes form an exception to the rule of strict construction.
See Department of Transp. v. Transportation Comm'n, 111 Wis.2d 80, 330 N.W.2d 159, 164-65 (1983); Norman J. Singer,
3 Sutherland Statutory Construction § 61.03, at
190 (rev. 5th ed.1999). The
Code certainly displaces common law rules of water use where effective. See Ko'olau Agric.
Co., Ltd. v. Commission on Water Resource Management, 83 Hawai'i 484, 491, 927
P.2d 1367, 1374 (1996) ("In [water management
areas], the permitting provisions of the Code prevail; water rights in non-designated areas are
governed by the common law."). The further suggestion that such a statute could extinguish
the public trust, however, contradicts the doctrine's basic premise, that
the state has certain powers and duties which it *131 cannot legislatively
abdicate. See Illinois Central, 146 U.S. at 453-54, 13
S.Ct. 110. This court has held that the doctrine would invalidate
such measures, sanctioned by statute but violative of the public trust, as:
the use of delegated eminent domain powers by a private party to condemn
a public harbor, see Oahu Railway, supra; the land court's registration
of tidelands below the high water mark, see Sanborn, supra; and a sale of lava extensions that did
not promote a "valid public purpose," see Zimring, supra. Regarding water resources in particular,
history and precedent have established the public trust as an inherent attribute
of sovereign authority that the government "ought not, and ergo, ...
cannot surrender." See McBryde, 54 Haw. at 186, 504 P.2d at 1338 (quoting Land Commission Principles); cf. Illinois Central, 146 U.S. at 455, 13 S.Ct.
110 ("[S]uch property is held by the State,
by virtue of its sovereignty, in trust for the public.").
Most importantly, the
people of this state have elevated the public trust doctrine to the level
of a constitutional mandate. In
interpreting constitutional provisions:
"[W]e have long recognized
that the Hawai'i Constitution must be construed with due regard to the intent
of the framers and the people adopting it, and the fundamental principle in
interpreting a constitutional provision is to give effect to that intent."
Hirono v. Peabody, 81 Hawai'i 230, 232, 915
P.2d 704, 706 (1996) (citation omitted). "This intent is to be found in the
instrument itself." State
64 Haw. 197, 201, 638 P.2d 309, 314 (1981).
As we recently reiterated in
State of Hawai'i, ex
rel. Bronster v. Yoshina, 84 Hawai'i 179, 932 P.2d 316 (1997),
"[t]he general rule is that, if the words used in a constitutional provision
... are clear and unambiguous, they are to be construed as they are written."
Id. [at 186], 932 P.2d at
323 (quoting Blair [v. Cayetano], 73 Haw. [536,] 543, 836
P.2d [1066,] 1070 [ (1992) ] (citation omitted)).
"In this regard, the settled rule is that in the construction
of a constitutional provision the words are presumed to be used in their natural
sense unless the context furnishes someground to control, qualify, or enlarge
them." Pray v. Judicial Selection Comm'n,
75 Haw. 333, 342, 861 P.2d 723, 727 (1993) (citation, internal quotation marks, brackets, and ellipses
Moreover, "a constitutional
provision must be construed in connection with other provisions of the instrument,
and also in the light of the circumstances under which it was adopted and
the history which preceded it[.]" Carter v. Gear, 16 Haw. 242, 244 (1904), affirmed, 197
U.S. 348, 25 S.Ct. 491, 49 L.Ed. 787 (1905).
Hawaii State AFL-CIO
84 Hawai'i 374, 376, 935 P.2d 89, 91 (1997).
Article XI, section 1 of the Hawai'i Constitution mandates that, "[f]or the benefit of present
and future generations, the State and
its political subdivisions shall protect and conserve ... all natural resources, including ... water ... and shall
promote the development and utilization of these resources ... in a manner
consistent with their conservation
" and further declares that "[a]ll public natural resources are
held in trust for the benefit of the people." (Emphases added.) Article XI, section 7 reiterates the State's "obligation to protect, control
and regulate the use of Hawaii's water
resources for the benefit of its people." (Emphases
added.) The plain reading of these provisions manifests the framers' intent
to incorporate the notion of the public trust into our constitution.
The intensive deliberations on the subject in the convention record
substantiate this interpretation.
See Debates in Committee of the Whole on Conservation, Control
and Development of Resources [hereinafter Debates], in 2 Proceedings of the
Constitutional Convention of Hawaii of 1978, at 855-81 (1980) [hereinafter
Proceedings]. [FN29] We *132 therefore hold that article XI, section 1 and article XI, section 7 [FN30] adopt
the public trust doctrine as a fundamental principle of constitutional law
in Hawai'i. See Payne
468 Pa. 226, 361 A.2d 263, 272 (1976) ("There
can be no question that the [constitution] declares and creates a public trust
of public natural resources for the benefit of all people (including future
generations as yet unborn)....");
State v. Bleck,
114 Wis.2d 454, 338 N.W.2d 492, 497 (1983) (grounding
the public trust doctrine in the state constitution); Save Ourselves
v. Louisiana Env't Control Comm'n, 452 So.2d 1152, 1154 (La. 1984) (recognizing a public trust based on the state constitution);
Owsichek v. State, Guide Licensing and Control Bd., 763 P.2d 488, 493-96 (Alaska
1988) (holding that the constitutional "common
use" clause adopted common law trust principles in relation to fish,
wildlife, and water resources).
FN29. The delegates discussed at length the proposal that produced the final version of
article XI, section 7. Some notable comments
include: "[T]he amendment and committee proposal
go beyond the mere power to regulate--which is generally known as the police
power of the State--and impose a duty upon the State to regulate and protect,"
id. at 857 (statement by Delegate
Fukunaga); "[W]hat the amendment
attempts to do, as I read it, is to define what "public trust" means
... [;] it's an attempt to clarify and put it in the Constitution," id.
at 859 (statement by Delegate Waihee);
"[T]his amendment recognizes ... that water is a resource in Hawaii
that needs to be protected for the use of all people," id. at 860 (statement by Delegate De Soto); "[The amendment] maintains the intent
of the committee to establish a public trust doctrine for the State of Hawaii
to protect the total water resources for the benefit of the people of Hawaii,"
id. (statement by Delegate Hoe);
"I urge the passage of this amendment establishing a state water
agency to act as trustee of all the water resources of Hawaii for the benefit
of the people," id. (statement by Delegate Chong); "[T]he committee proposal as amended would make the State
of Hawaii the trustee of the water of Hawaii for the benefit of the people
of Hawaii," id. at 866 (statement
by Delegate Hornick); "[T]his trust concept means that you go for the
benefit of the people, and that's different from just mere regulation,"
id. at 876 (statement by Delegate
Hanaike). See also id. at 862-68 (rejecting a proposed amendment stating merely
that "[t]he State shall regulate and control all water"). The delegates
deleted an express reference to the "public trust" in article
XI, section 7 because of "[s]ome confusion
generated by the [thought that] ... 'trust' implies ownership." Comm. Whole Rep. No. 18, in 1 Proceedings,
at 1026. Public rights
under the trust do not constitute state "ownership." See Illinois Central, 146 U.S. at 452, 13 S.Ct.
110; Robinson, 65 Haw. at 674, 658 P.2d at 310. In any event, the delegates explained
that they had used "public trust" to describe "the duty of
the State to actively and affirmatively protect, control and regulate water
resources" and, in place of that term, "substituted language [that
they] believe[d] fully convey[ed] the theory of 'public trust.' " Comm.
Whole Rep. No. 18, in 1 Proceedings, at 1026 (emphasis added).
article XI, section 7 also mandates the creation
of an agency to regulate water use "as provided by law," LURF and
HFB argue that it is not self-executing.
See State v. Rodrigues, 63 Haw. 412, 629 P.2d 1111 (1981) (holding that the creation of the independent grand jury
counsel position in article I, section 11 was not self-executing). Whereas
review of the history of article I, section 11 in Rodrigues evidenced
the intent to require further legislative action, the same inquiry here reveals
that the framers intended to invoke the public trust in article XI, section 7. See supra note 29.
Article XI, section 7 is thus self-executing
to the extent that it adopts the public trust doctrine. See Debates,
in 2 Proceedings at 863 (statement by Delegate Waihee) ("What the [amendment]
attempts to do is, first of all, create a fiduciary duty to regulate and control
the water. The second thing
that it does is establish a coordinating agency to regulate all water.");
Haw. Const. art XVI § 16 ("The
provisions of this constitution shall be self-executing to the fullest extent
that their respective natures permit."); cf. Payne
468 Pa. 226, 361 A.2d 263, 272 (1976) ("No
implementing legislation is needed to enunciate these broad purposes and establish
these relationships; the amendment
does so by its own ipse dixit.").
Other state courts,
without the benefit of such constitutional provisions, have decided that the
public trust doctrine exists independently of any statutory protections supplied
by the legislature. See,
Audubon Soc'y v. Superior Ct. Of Alpine Cty., 33 Cal.3d 419, 189 Cal.Rptr. 346, 658 P.2d
709, 728 n. 27 (1983.) ("Aside from the possibility
that statutory protections can be repealed, the noncodified public trust doctrine
remains important both to confirm the state's sovereign supervision and to
require consideration of public trust uses in cases filed directly in the
courts ...."), cert. denied, 464 U.S. 977, 104 S.Ct. 413, 78 L.Ed.2d 351 (1983); Kootenai
Envtl. Alliance v. Panhandle
Yacht Club, Inc.,
105 Idaho 622, 671 P.2d 1085, 1095 (1983) ("[M]ere
compliance by [agencies] with their legislative authority is not sufficient
to determine if their actions comport with the requirements of the public
trust doctrine. The public
trust doctrine at all times forms the outer boundaries of permissible government
action with respect to public trust resources."). This view is all the more compelling
here, in light of our state's constitutional public trust mandate.
See San Carlos Apache Tribe v. Superior Court ex rel.
Maricopa County, 193 Ariz. 195, 972 P.2d
179, 199 (1999) *133 ("The public trust doctrine is a
constitutional limitation on legislative power.... The Legislature cannot order the courts to make the doctrine
inapplicable to these or any proceedings."). To the extent that other courts have held otherwise,
their decisions are neither controlling nor, for the reasons stated above,
applicable in this state. See,
e.g., R.D. Merrill Co. v. State of Wash. Pollution Control Hearings
137 Wash.2d 118, 969 P.2d 458 (1999).
The Code and its implementing agency, the
Commission, do not override the public trust doctrine or render it superfluous.
Even with the enactment and any future development of the Code, the
doctrine continues to inform the Code's interpretation, define its permissible
"outer limits," and justify its existence. To this end, although we regard the public trust and
Code as sharing similar core principles, we hold that the Code does not supplant
the protections of the public trust doctrine.