Nelson v. Hawaiian Homes Commission. ( 2018 )

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Electronically Filed
Supreme Court
SCAP-16-0000496
09-FEB-2018
10:22 AM
IN THE SUPREME COURT OF THE STATE OF HAWAII
---oOo---
________________________________________________________________
RICHARD NELSON III, KALIKO CHUN, JAMES AKIONA, SR.,
SHERILYN ADAMS, KELII IOANE, JR., and CHARLES AIPIA,
Plaintiffs-Appellees-Cross-Appellants,
vs.
HAWAIIAN HOMES COMMISSION, THE DEPARTMENT OF HAWAIIAN HOME
LANDS, JOBIE MASAGATANI, in her official capacity as Chair of
the Hawaiian Homes Commission, WILLIAM K. RICHARDSON,1 MICHAEL P.
KAHIKINA, DOREEN NAPUA GOMES, GENE ROSS DAVIS, WALLACE A.
ISHIBASHI, DAVID B. KAAPU, and WREN WESCOATT, in their official
capacities as members of the Hawaiian Homes Commission,
Defendants-Appellees-Cross-Appellees,
and
WESLEY MACHIDA, in his official capacity as the State Director
of Finance, and the STATE OF HAWAII,
Defendants-Appellants-Cross-Appellees.
________________________________________________________________
SCAP-16-0000496
APPEAL FROM THE CIRCUIT COURT OF THE FIRST CIRCUIT
(CAAP-16-0000496; CIV. NO. 07-1-1663)
FEBRUARY 9, 2018
RECKTENWALD, C.J., NAKAYAMA, McKENNA, AND POLLACK, JJ.,
WITH WILSON, J., DISSENTING
1
Pursuant to Hawaiʻi Rules of Evidence Rule 201 (1980), this court takes
judicial notice that William K. Richardson passed away on November 10, 2017.
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OPINION OF THE COURT BY McKENNA, J.
I. Introduction
This case is on appeal before this court for the second
time. In the first appeal, we determined that the political
question doctrine2 did not bar a judicial interpretation of the
meaning of “sufficient sums” for the Department of Hawaiian Home
Lands’ (“DHHL”) administrative and operating expenses, pursuant
to Article XII, Section 1 of the Hawaii Constitution. Limited
judicially discoverable and manageable standards existed to
interpret the term “sufficient sums,” based on the 1978
Constitutional Convention delegates’ estimate that DHHL’s
administrative and operating costs were $1.3 to 1.6 million at
that time, and, going forward, that figure could be adjusted for
inflation. Nelson v. Hawaiian Homes Comm’n, 127 Hawaiʻi 185, 277
P.3d 279 (2012) (“Nelson I”).
On remand to the Circuit Court of the First Circuit
(“circuit court”),3 the circuit court held a bench trial and
found, however, that DHHL’s actual need for its administrative
and operating expenses was over $28 million. It then concluded
that the legislature was constitutionally obligated to make such
an appropriation to DHHL for fiscal year 2015-16. The circuit
2
Under the political question doctrine, “certain matters are political in
nature and thus inappropriate for judicial review.” Nishitani v. Baker, 82
Hawaiʻi 281, 290, 921 P.2d 1182, 1191 (App. 1996) (citation omitted).
3
The Honorable Jeannette H. Castagnetti presided.
2
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court also enjoined the defendants (the State of Hawaiʻi and its
Director of Finance, collectively the “State Defendants”) from
violating the constitution or breaching their fiduciary duties
to the Hawaiian Homelands trust beneficiaries.
The State Defendants filed a motion for reconsideration,
which the circuit court granted in part and denied in part. The
circuit court granted the motion in part to modify those
portions of the order that (1) called for the over $28 million
appropriation and (2) enjoined the defendants from violating the
constitution or breaching their fiduciary duties to Hawaiian
Homelands trust beneficiaries. In its amended order, the
circuit court simply declared that (1) the State of Hawaii did
not provide sufficient sums to DHHL, and (2) that the defendants
must fulfill their constitutional and trust responsibilities.
This court accepted transfer of this appeal from the
Intermediate Court of Appeals (“ICA”). On appeal, the State
Defendants argue that (1) the circuit court erred in declining
to use the 1978 baseline of $1.3 to 1.6 million, adjusted for
inflation, to calculate “sufficient sums” for DHHL’s
administrative and operating expenses; and (2) the circuit court
erred in ordering the State Defendants to fulfill their
constitutional obligations under Article XII, Section 1. The
Hawaii State Legislature, as amicus curiae, filed a brief in
support of the State Defendants.
3
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We hold that the circuit court erred by engaging in a
comprehensive inquiry into the amount DHHL actually needed for
its administrative and operating expenses. Under Nelson I, the
only judicially discoverable and manageable standard for
determining “sufficient sums” for DHHL’s administrative and
operating budget was established by the delegates of the 1978
Constitutional Convention as $1.3 to 1.6 million, adjusted for
inflation. 127 Hawaiʻi at 202-03, 277 P.3d at 296-97. We
observed that “consideration of [how many lots, loans, and
rehabilitation projects (and their scope)] could provide the
basis for increasing the required administrative funding above
the 1978 baseline identified by the delegates”; however, we
cautioned that such consideration “could also involve the courts
in addressing issues . . . that involve political questions.”
127 Hawaiʻi at 203, 277 P.3d at 297.
In this case, the circuit court exceeded our mandate in
Nelson I when it determined the amount DHHL actually needed for
its administrative and operating expenses. Accordingly, we
vacate the circuit court’s First Amended Final Judgment, Final
Judgment, and underlying orders, and remand this case to the
circuit court to determine the current value of $1.3 to 1.6
million (in 1978 dollars), adjusted for inflation.
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II. Background
A. Nelson I
In Nelson I, six individual plaintiffs (Richard Nelson III;
Kaliko Chun; James Akiona, Sr.; Sherilyn Adams; Kelii Ioane,
Jr.; and Charles Aipia; collectively, “the Plaintiffs”) filed a
first amended complaint alleging that the State Defendants and
DHHL had violated Article XII, Section 1 of the Hawaiʻi State
Constitution. That constitutional provision states the
following:
The legislature shall make sufficient sums available for
the following purposes: (1) development of home,
agriculture, farm and ranch lots; (2) home, agriculture,
aquaculture, farm and ranch loans; (3) rehabilitation
projects to include, but not limited to, educational,
economic, political, social and cultural processes by which
the general welfare and conditions of native Hawaiians are
thereby improved; (4) the administration and operating
budget of the department of Hawaiian home lands; in
furtherance of (1), (2), (3) and (4) herein, by
appropriating the same in the manner provided by law.
Hawaiʻi State Constitution, Article XII, Section 1. In Count 1,
the Plaintiffs alleged that the State had failed to make
sufficient sums available to DHHL for the four purposes
enumerated above. In Count 2, the Plaintiffs alleged that DHHL
breached its trust duties to its beneficiaries by failing to
request sufficient sums from the State. In Count 3, the
Plaintiffs alleged that the DHHL Defendants breached their trust
obligation to beneficiaries by leasing DHHL lands for commercial
purposes to raise funds. Lastly, in Count 4, the Plaintiffs
alleged that the DHHL Defendants breached their obligation to
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trust beneficiaries by failing to ascertain whether trust lands
were necessary for general homestead purposes before offering
them for commercial lease. The parties stipulated to dismiss
Counts 3 and 4 without and with prejudice, respectively.
The circuit court granted the State Defendants’ motion for
summary judgment (in which the DHHL Defendants joined),
concluding that Counts 1 and 2 raised non-justiciable political
questions. The circuit court concluded that there were “no
judicially discoverable and manageable standards for resolving
the dispute over the definition and determination of ‘sufficient
sums’” under the Hawaiʻi Constitution “without making initial
policy determinations of a kind clearly for nonjudicial
discretion.” In other words, the circuit court declined to rule
on the Plaintiffs’ claims, leaving their resolution to the
political process. See Nelson I, 127 Hawaiʻi at 194, 277 P.3d at
288.
On initial appeal to the ICA, an ICA majority concluded
Plaintiffs’ claims were not barred by the political question
doctrine. Nelson v. Hawaiian Homes Comm’n, 124 Hawaii 437, 246
P.3d 369 (App. 2011). Chief Judge Nakamura concurred with the
majority’s holding that the political doctrine question did not
preclude the justiciability of the dispute over whether the
legislature provided DHHL with “sufficient sums.” 124 Hawaiʻi at
447, 246 P.3d at 379 (Nakamura, C.J., concurring). In his
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opinion, the “pre-1978 levels and the framers’ intent, including
their concern with the DHHL’s leasing of lands to the general
public” provided the court with “judicially discoverable and
manageable standards for evaluating whether the Legislature has
satisfied the ‘sufficient sums’ requirement of Article XII,
Section 1 without resort to nonjudicial policy determinations.”
124 Hawaiʻi at 452, 246 P.3d at 384 (Nakamura, C.J., concurring).
On certiorari, this court first traced the development of
our political question jurisprudence. We observed that the
“political question doctrine is often considered the most
amorphous aspect of justiciability.’” Nelson I, 127 Hawaiʻi at
194, 277 P.3d at 288 (quoting Nishitani, 82 Hawaiʻi at 299, 921
P.2d at 1191) (brackets omitted). We stated, “The doctrine is
the result of the balance courts must strike in preserving
separation of powers yet providing a check upon the other two
branches of government.” Nelson I, 127 Hawaiʻi at 194, 277 P.3d
at 288 (citing Trustees of the Office of Hawaiian Affairs v.
Yamasaki, 69 Haw. 154, 737 P.2d 446 (1987)). In Yamasaki, this
court adopted the test set forth by the United States Supreme
Court in Baker v. Carr, 369 U.S. 186 (1962), which states
Prominent on the surface of any case held to involve a
political question is found: (1) a textually demonstrable
constitutional commitment of the issue to a coordinate
political department; or (2) a lack of judicially
discoverable and manageable standards for resolving it; or
(3) the impossibility of deciding without an initial policy
determination of a kind clearly for nonjudicial discretion;
or (4) the impossibility of a court’s undertaking
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independent resolution without expressing lack of respect
due coordinate branches of government; or (5) an unusual
need for unquestioning adherence to a political decision
already made; or (6) the potentiality of embarrassment from
multifarious pronouncements by various departments on one
question.
Nelson I, 127 Hawaiʻi at 194, 277 P.3d at 288 (citing Yamasaki,
69 Haw. at 170, 737 P.2d at 455 (quoting Baker, 369 U.S. at
217)) (brackets omitted). In Nelson I, the issue was whether
the determination of “sufficient sums” under Article XII,
Section 1 presented a nonjusticiable political question due to
“a lack of judicially discoverable and manageable standards” for
resolving the issue and/or “the impossibility of deciding
without an initial policy determination of a kind clearly for
nonjudicial discretion.” Nelson I, 127 Hawaiʻi at 193-94, 277
P.3d at 287-88.
We ultimately “affirm[ed] the ICA’s judgment, but only on
the narrower ground that the determination of what constitutes
‘sufficient sums’ for administrative and operating expenses
under the Hawaiʻi Constitution’s Article XII, Section 1 is
justiciable and not barred as a political question.” 127 Hawaiʻi
at 206, 277 P.3d at 300. We held judicially discoverable and
manageable standards existed to determine “sufficient sums” for
DHHL’s administrative and operating expenses, based on the 1978
Constitutional Convention delegates’ estimate that those costs
were $1.3 to 1.6 million at that time. Nelson I, 127 Hawaii
185, 277 P.3d 279. This court did not judicially determine what
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“sufficient sums” would be, and we imposed no funding
requirements upon the legislature. We held only that the
political question doctrine did not bar justiciability of the
case.
In arriving at this holding, we turned to the 1978
Constitutional Convention history. We quoted the spirited
discussion among the delegates who were trying to “pin down a
numerical figure” for DHHL’s funding generally. 127 Hawaii at
202, 277 P.3d at 296. We reproduced Delegates Burgess, De Soto,
and Sutton’s dialogue, through which they “ultimately arrived at
$1.3 to 1.6 million as a ‘sufficient sum’ . . . [as] to
administrative and operating expenses” specifically, as follows:
Delegate Burgess: [W]hat would be the estimated cost of
these programs which are mandated?
....
Delegate De Soto: What we propose with respect to “shall
fund” is the administrative and costs of running the
Hawaiian homes program, which would amount to operating and
administrating approximately $1.3 to $1.6 million, taking
into consideration inflation, collective bargaining
agreements that go into inflation with the pay.
....
Delegate Burgess: I would ask — is the $1.3 to $1.6 million
that was mentioned the total cost of the programs which are
mandated to the legislature? Does that amount include the
development of home, agriculture, farm and ranch lots, and
the other aims that are cited on page 2 of the proposal?
....
Delegate Burgess: Does the $1.3 to $1.6 million figure that
was mentioned just a few minutes ago include the costs of
the home developments, the loans and the other
rehabilitation projects which are referred to on page 2? —
in other words, the development of home, agriculture, farm
and ranch lots; the home, agriculture, aquaculture, ranch
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and farms loans; and all of those programs. Are all of
those included in the total estimate of the $1.3 million to
fund this program, or is the total cost to the State
different from that?
....
Delegate Sutton: The $1.3 to $1.6 million is for
administrative costs at present. Their need is more. The
way the State itself can fund all the rest of the projects
— and directly answering your question, delegate, is no, is
not only $1.3 to $1.6 million — the way the State can find
the funds is through mutual agreement with different parts
of the government here in Hawaii; and that is, for the poor
people who qualify, that is for HHA or Hawaiian Homes
Commission Act properties, that there are similar needs and
requirements for those to get the land — that is, under
$10,000 net assets. The State may fund these projects and
come out with considerably more for the people at less of
an expense, simply because the Hawaiian homes commission
has land and does not need to condemn and purchase other
land to fit the needy at that level.
Id. (citation omitted). Synthesizing these discussions, we
concluded
Thus, by the end of the Committee on the Whole Debates,
what was certain was that the $1.3 to $1.6 [million] figure
represented “sufficient sums” for administrative and
operating expenses only. As to that purpose under Article
XII, then, the 1978 Constitutional Convention history does
provide judicially discoverable and manageable standards
that do not involve initial policy determinations of a kind
clearly for nonjudicial discretion. At a minimum, funding
at or above the $1.3 to $1.6 million envisioned in 1978
would be required.8 Therefore, the determination of what
constitutes “sufficient sums” for administrative and
operating expenses is not barred by the political question
doctrine.
8
Presumably, this figure could be adjusted to reflect the
impact of factors such as inflation or increased collective
bargaining costs, both of which were acknowledged by
Delegate De Soto as factors that could appropriately be
taken into account in determining the required
contribution.
127 Hawaii at 202-03, 277 P.3d at 296-97 (citation omitted).
This court thus ruled that judicially discoverable and
manageable standards existed with respect to “sufficient sums”
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for administrative and operating expenses, i.e., $1.3 to 1.6
million in 1978 dollars, adjusted for inflation. 127 Hawaiʻi at
202-03, 203 n.8, 277 P.3d at 296-97, 297 n.8. We also stated
that Delegate Sutton’s statement (“Their need is more”) referred
only to DHHL’s need for more money for another enumerated
purpose under Article XII, Section 1. 127 Hawaii at 203, 277
P.3d at 297 (interpreting “Their need is more” to refer to more
money for the development of home, agriculture, farm, and ranch
lots, not for administrative and operating expenses.)
We held, “Article XII, Section 1 and its constitutional
history, however, do not shed light on what would constitute
‘sufficient sums’ for the other three enumerated purposes,” lot
development, loans, and rehabilitation projects. 127 Hawaiʻi at
206, 277 P.3d at 300. Thus, “the political question doctrine
bars judicial determination of what would constitute ‘sufficient
sums’ for those purposes, and the ICA erred in concluding
otherwise.” Id. We noted that consideration of the other three
purposes “could provide the basis for increasing the required
administrative funding beyond the 1978 baseline identified by
the delegates, but could also involve the courts in addressing
issues (the development of lots, loans, and rehabilitation
projects) that involve political questions.” Id. We rejected,
however, the State’s argument that “challenges associated with
determining the upper limit of the required administrative
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funding render the calculation of the minimum required
contribution nonjusticiable.” Id. We stated, “It is clear that
the constitutional delegates intended to require appropriation
of ‘sufficient sums’ to relieve DHHL of the burden of general
leasing its lands to generate administrative and operating
funds, and to that end, they identified the minimum funding
necessary for such expenses.” Id. (footnote omitted).
Prior to the entry of this court’s judgment, the Plaintiffs
requested an award of attorneys’ fees and costs under the
private attorney general doctrine. Nelson v. Hawaiian Homes
Comm’n, 130 Hawaii 162, 307 P.3d 142 (2013). In analyzing and
ultimately denying the request, this court nonetheless
recognized that the Plantiffs’ litigation produced the following
result: “DHHL will be able to shift the funds it was spending
on administrative and operating expenses towards fulfilling its
trust duties to its beneficiaries.” 130 Hawaii at 167, 307 P.3d
at 147. Once this court resolved the fees and costs request and
issued its judgment, the case returned to the circuit court for
further proceedings.
B. Remand Proceedings before the Circuit Court
1. The Parties’ Motions for Summary Judgment (“MSJ”)
a. Plaintiffs’ MSJ
On remand to the circuit court, the Plaintiffs filed a MSJ,
arguing that there were no genuine issues of material fact, and
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that the Plaintiffs were entitled to an order declaring that the
State had failed to sufficiently fund DHHL, and that DHHL had
breached its trust duty to vigorously seek sufficient funding.
The Plaintiffs argued that DHHL requested from the State, and
the State appropriated to DHHL, sums for administrative and
operating expenses that were far less than DHHL’s actual need.
In opposition to the Plaintiff’s MSJ, the State Defendants
argued that “sufficient sums” should be calculated based on the
$1.3 million figure4, drawn from the 1978 constitutional history
of Article XII, Section 1, adjusted for inflation.
b. DHHL’s MSJ
The DHHL Defendants also filed a MSJ, asking for Count II
of the first amended complaint to be dismissed, on the basis
that no genuine issue of material fact existed as to whether
DHHL had requested sufficient funds for its administrative and
operating expenses from the legislature for the 2013-2015 fiscal
biennium. The DHHL Defendants stated that they requested $25
million per year for the 2013-2015 fiscal biennium for
administrative and operating expenses, and were appropriated
around $9 million per year by the legislature. Therefore, they
argued, they demonstrated that they fulfilled their trust duty
4
Before the circuit court, the State Defendants asserted that the $1.3
million figure, adjusted for inflation, represented “sufficient sums.”
Before this court, however, the State Defendants assert that the $1.3 to 1.6
million figure, adjusted for inflation, represents “sufficient sums.”
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to seek sufficient sums for administrative and operating
expenses from the State. The State Defendants again counter-
argued that “sufficient sums” for DHHL was $1.3 million5,
adjusted for inflation.
c. The State Defendants’ MSJ
The State Defendants also filed a MSJ. They argued that
Article XII, Section 1 requires the legislature to make
“sufficient sums” available for DHHL’s administrative and
operating budget “in the manner provided by law.” According to
the State Defendants, the “manner provided by law” was through
the legislature’s appropriation process, described in Article
VII, Sections 5, 7, 8, and 9 of the Hawaii Constitution, and
Section 213(f) of the Hawaiian Homes Commission Act, which
governs the Hawaiian home administration account.
d. The Circuit Court’s Orders Denying All Parties’
MSJs
The circuit court denied all of the parties’ MSJs. In its
order denying the Plaintiffs’ and DHHL’s MSJs, the circuit court
explained that it required a “fuller development of the facts”
in order to determine whether the State violated its
constitutional duty to make sufficient sums available to DHHL
for its administrative and operating budget, and whether DHHL
5
Again, before the circuit court, the State Defendants asserted that the
$1.3 million figure, adjusted for inflation, represented “sufficient sums.”
Before this court, however, the State Defendants assert that the $1.3 to 1.6
million figure, adjusted for inflation, represents “sufficient sums.”
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breached its fiduciary duty to its beneficiaries by failing to
request sufficient sums from the legislature. The circuit court
then issued an order summarily denying the State Defendants’
MSJ.
2. Bench Trial
The case then proceeded to an eight-day bench trial. DHHL
relied principally upon Hawaiian Homes Commission Chair Jobie
Masagatani and DHHL administrative services officer Rodney Lau
to establish the $28 million figure as “sufficient sums” for
DHHL’s administrative and operating budget for the 2015-2016
fiscal year. These witnesses testified that DHHL arrived at the
$28 million figure by starting with a base budget of moneys
already appropriated for DHHL’s administrative and operating
budget in prior years. From there, DHHL determined how many
more administrative positions it needed to deliver quality
services to its beneficiaries and meet its mission. To that
subtotal, DHHL added a 5% inflation factor, estimating that it
needed $28.1 – 28.2 for its administrative and operating
expenses.
The State Defendants relied upon Department of Budget and
Finance administrator Neil Miyahira to testify that “sufficient
sums” needed to be determined through the typical legislative
appropriation process. Miyahira testified that he was familiar
with the $1.3 to 1.6 million figure established at the 1978
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Constitutional Convention as “sufficient sums.” Nevertheless,
he testified that the Department of Budget and Finance evaluates
DHHL’s budget requests in the normal course, as it does with any
other State department, without regard to the mandate contained
in Article XII, Section 1. He also testified that he considered
“administrative and operating expenses” to include only
“salaries and operating expenses for [DHHL’s] offices.”
3. The Circuit Court’s Findings of Fact, Conclusions of
Law, and Order
After trial, the circuit court issued its Findings of Fact,
Conclusions of Law, and Order (“FOFs, COLs, and Order”). Key to
this appeal, the circuit court’s Finding of Fact (“FOF”) 44
states, “DHHL needs more than $28 million annually for its
administrative and operating budget for fiscal year 2015-16, not
including repairs.” The circuit court then declared and ordered
the following:
1. The State of Hawaii has failed to provide sufficient
funds to the Department of Hawaiian Home Lands for its
administrative and operating budget in violation of the
State’s constitutional duty to do so under article XII,
section 1 of the Hawaii Constitution.
2. The State of Hawaii must fulfill its constitutional
duty by appropriating sufficient general funds to the
Department of Hawaiian Home Lands for its administrative
and operating budget so that the Department does not need
to use or rely on revenue directly or indirectly from
general leases to pay for these expenses.
3. Although what is “sufficient” will change over the
years, the sufficient sums that the legislature is
constitutionally obligated to appropriate in general funds
for DHHL’s administrative and operating budget (not
including significant repairs) is more than $28 million for
fiscal year 2015-2016.
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4. Prior to 2012, the DHHL Defendants breached their trust
duties by failing to take all reasonable efforts –
including filing suit – to obtain all the funding it needs
for its administrative and operating budget.
5. The defendants shall prospectively fulfill their
constitutional duties and trust responsibilities. They are
enjoined from violating these obligations.
6. Judgment on Counts 1 and 2 shall be entered in favor of
Plaintiffs and against the State Defendants (as to Count 1)
and the DHHL Defendants (as to Count 2).
The circuit court then entered Final Judgment.
4. The State Defendants’ Motion for Reconsideration
Ten days later, the State Defendants filed a motion for
reconsideration. The State Defendants argued that insufficient
evidence supported the $28 million figure. Consequently, they
asked the circuit court to eliminate paragraph 3 in its order.
The State Defendants also argued that paragraph 5 violated the
constitutional principle of separation of powers. Specifically,
the State Defendants asserted, “[F]or reasons provided in the
State Defendants’ motion for summary judgment, filed 4/17/15,
‘sufficiency’ within the meaning of art. XII, Section 1, is to
be determined by the legislature, through its usual budgeting
process, not by the courts.” (Emphasis in original.) The State
Defendants argued that the separation of powers doctrine
prohibited the court from compelling the legislature to
appropriate any particular amount of money. Consequently, they
asked the circuit court to eliminate paragraph 5 in its order.
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The legislature, as amicus curiae, was granted leave to
file a memorandum in support of the State Defendants’ motion for
reconsideration. The legislature argued that the circuit
court’s ruling usurped the legislature’s power to appropriate
public funds. The legislature asked the circuit court to amend
its judgment and order to make it clear that the circuit court
was not ordering an appropriation.
The court held a hearing on the motion for reconsideration,
then reconvened the parties for its oral ruling three days
later. The circuit court first orally ruled that substantial
evidence supported its finding that over $28 million constituted
sufficient sums for DHHL’s administrative and operating expenses
for fiscal year 2015-2016. The circuit court next addressed the
State Defendants’ argument that the circuit court violated the
separation of powers doctrine by ordering the legislature to
appropriate funds, and that the circuit court’s authority was
limited to providing declaratory relief only. The circuit court
orally ruled as follows:
[W]hen the courts determine that the State has not met its
constitutional duty to act and has not complied with the
Constitution because the amount appropriated, as determined
through the budgetary process, is insufficient and does not
pass constitutional muster, the remedy can and should be
compliance with the requirement to make sufficient sums
available for DHHL’s administrative and operating budget.
Otherwise, there is no effective remedy for the State’s
violation of its constitutional duty to fund.
The circuit court then concluded that “declaratory relief alone
is not a sufficient remedy to the years of underfunding of the
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Department of Hawaiian Homelands that it has suffered and that a
form of injunctive relief is appropriate and necessary for the
State to comply with its constitutional mandate under Article
XII, section 1.”
The circuit court’s written order granted in part and
denied in part the State Defendants’ motion for reconsideration.
The circuit court denied the motion in part, declining to
reconsider its finding that over $28 million constituted
“sufficient sums” for DHHL’s administrative and operating
expenses for fiscal year 2015-2016. The circuit court granted
the motion in part, modifying paragraphs 3 and 5 so that the
order would not be “construed in any form as an order for the
Legislature to appropriate funds.” Paragraph 3 was modified to
eliminate language obligating the legislature to appropriate a
sum certain to DHHL for its administrative and operating
expenses, concluding instead that the legislature’s current
appropriation was insufficient:
Although what is sufficient will change over the years, the
amount of general funds appropriated to DHHL for its
administrative and operating budget for fiscal year 2015-
2016 ($9,632,000) is not sufficient. The State of Hawaii
is required to comply with the Hawaii Constitution and must
fund DHHL’s administrative and operating expenses by making
sufficient general funds available to DHHL for its
administrative and operating budget for fiscal year 2015-
2016.
Paragraph 5 was modified to eliminate language enjoining the
defendants from violating their constitutional duties or
breaching their trust responsibilities; as amended, paragraph 5
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reads, “The Defendants must fulfill their constitutional and
trust responsibilities.”
The circuit court then entered an “Order Amending Order
Issued November 27, 2015” reflecting the changes to paragraphs 3
and 5 in its order.
The Plaintiffs filed a motion for reconsideration of that
order. They asked the circuit court to again modify its order
to explicitly state, “Sufficient sums for DHHL’s administrative
and operating budget (not including significant repairs) is more
than $28 million for fiscal year 2015-16.” The circuit court
summarily denied the motion.
The circuit court then entered a First Amended Final
Judgment. The State Defendants appealed.6 This court accepted
transfer of this case from the ICA.
C. Points of Error on Appeal
On appeal, the State Defendants raise the following points
of error:
1. The circuit court erred, as a matter of law, when,
notwithstanding firmly established principles of
constitutional construction, it construed the provisions of
the amendment the delegates to the 1978 Constitutional
Convention made to article XII, section 1 of the Hawaii
Constitution and concluded that
a. The term “administration and operating budget”
includes and is the budget for all of DHHL’s
administrative and operating expenses, including
6
The Plaintiffs also cross-appealed. For reasons described in greater
detail in n.8, we find the Plaintiffs’ points of error on appeal
unpersuasive.
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“actual administrative and operating expenses,”
“programmatic costs,” and “operating costs” as that
term is defined in section 37-62, Hawaii Revised
Statutes (HRS).
. . . .
b. Despite the availability of federal funds, and
express authority in the HHCA to pay particular
operating expenses with funds other than receipts
from DHHL’s general leasing and other dispositions of
“available land,” all of DHHL’s administration and
operating budget must be funded by general funds.
. . . .
c. DHHL Defendants have the first and last word as
to which expenses and how much funding is needed for
its annual administrative and operating expenses, and
neither the director of finance, governor, nor the
legislature may reduce or eliminate an expense DHHL
includes in its administration and operating budget.7
. . . .
2. The circuit court erred in finding and concluding and
declaring that the State of Hawaii failed to provide
sufficient funds to DHHL for its administrative and
operating budget, and rejecting State Defendants’ position
that article XII, section 1 of the Hawaii Constitution only
requires funding for DHHL’s administration and operating
budget of $1.3-$1.6 million (the 1978 Baseline).
. . . .
3. The circuit court erred in concluding that injunctive
relief in favor of Plaintiffs and against State Defendants,
particularly the legislature, is appropriate, and enjoining
State Defendants, particularly the legislature, from
violating their constitutional duties and trust
responsibilities. . . .
In short, the State Defendants challenge (1) whether the circuit
court erred in declining to use the 1978 baseline of $1.3 to 1.6
million, adjusted for inflation, to calculate “sufficient sums”;
and (2) whether the circuit court erred in ordering the State
7
The State Defendants provide no argument on the first point of error
and its three subparts. These points are deemed waived. See Hawaiʻi Rules of
Appellate Procedure (“HRAP”) Rule 28(b)(7) (2015) (requiring the appellant’s
opening brief to include “[t]he argument, containing the contentions of the
appellant on the points presented and the reasons therefor, with citations to
the authorities, statutes and parts of the record relied on,” and stating,
“Points not argued may be deemed waived.”) Furthermore, as to point of error
1.c, the circuit court did not actually conclude that DHHL has “the first and
last word as to which expenses and how much funding is needed for its annual
administrative and operating expenses. . . .” There is no such conclusion of
law so stating.
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Defendants to fulfill their constitutional obligations under
Article XII, Section 1.8
III. Standard of Review
The appellate court reviews “questions of constitutional
law de novo, under the right/wrong standard.” Jou v. Dai-Tokyo
Royal State Ins. Co., 116 Hawaii 159, 164-65, 172 P.3d 471, 476-
77 (2007) (citation omitted).
8
On cross-appeal, the Plaintiffs raise the following points of error:
(1) “[t]he State Defendants’ motion for reconsideration was based on
arguments that could have been, or were argued earlier”; and (2) “[t]he State
Defendants waived their objections to the injunctive relief requested by
[Plaintiffs].” We find these points of error unpersuasive. First, the
Plaintiffs argue that the State Defendants raised their separation of powers
argument initially in their MSJ and, therefore, could not raise that argument
again in their motion for reconsideration. See, e.g., Sousaris v. Miller, 92
Hawaiʻi 505, 513, 993 P.2d 539, 547 (2000) (“Reconsideration is not a device
to relitigate old matters or to raise arguments or evidence that could and
should have been brought during an earlier proceeding.”) (footnote omitted).
The State Defendants did raise the separation of powers argument in their
MSJ, but that was for the purpose of preventing a judicial determination of
“sufficient sums” altogether. When the State Defendants raised the
separation of powers argument again in their motion for reconsideration, it
was in direct response to the circuit court’s order affirmatively obligating
the State to fund over $28 million in administrative and operating expenses
to DHHL. The State Defendants assert, and we agree, that the separation of
powers argument raised in response to the circuit court’s order served a
different purpose than the separation of powers argument raised in the State
Defendants’ MSJ. Therefore, the State Defendants could not have raised (and
did not raise) the argument earlier. The circuit court, therefore, did not
err in granting, in part, the State Defendants’ motion for reconsideration.
Further, in granting, in part, the State Defendants’ motion for
reconsideration, the circuit court also properly modified its order so that
it would not be “construed in any form as an order for the Legislature to
appropriate funds.”
Second, the Plaintiffs argue that the State Defendants waived any
objection to the circuit court’s imposition of injunctive relief. As this
opinion later notes, however, the circuit court erred in directing a $28
million appropriation in its initial order; its amended order properly
directed the State Defendants simply to fulfill their constitutional
responsibilities. Thus, there is no need to address this point of error.
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IV. Discussion
The State Defendants argue the circuit court erred in the
manner in which it determined “sufficient sums.” On remand for
the determination of what constituted “sufficient sums” under
Article XII, Section 1, the circuit court held a trial to
establish the amount DHHL actually needed for its administrative
and operating expenses for fiscal year 2015-2016. The State
Defendants insisted, on the other hand, that Nelson I required
only that “sufficient sums” be determined with reference to the
$1.3 to 1.6 million figure established at the 1978
Constitutional Convention, adjusted for inflation.
The State Defendants are correct. Our Nelson I opinion
clearly concluded that the only “judicially discoverable and
manageable standard” for determining “sufficient sums” for
DHHL’s administrative and operating expenses was the $1.3 to 1.6
million figure established by the Constitutional Convention
delegates, adjusted for inflation:
Thus, by the end of the Committee on the Whole Debates,
what was certain was that the $1.3 to $1.6 million figure
represented “sufficient sums” for administrative and
operating expenses only. As to that purpose under Article
XII, then, the 1978 Constitutional Convention history does
provide judicially discoverable and manageable standards
that do not involve initial policy determinations of a kind
clearly for nonjudicial discretion. At a minimum, funding
at or above the $1.3 to $1.6 million envisioned in 1978
would be required. Therefore, the determination of what
constitutes “sufficient sums” for administrative and
operating expenses is not barred by the political question
doctrine.
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Nelson I, 127 Hawaii at 202-03, 277 P.3d at 296-97 (footnote
omitted, emphasis added).9
There is no suggestion in Nelson I that what constitutes
“sufficient sums” would be recalculated periodically by the
circuit court as “actual sums,”10 because to do so would involve
the judiciary in “initial policy determinations of a kind
clearly for nonjudicial discretion.” That is what occurred in
this case. Instead, this court determined in Nelson I that the
amount sufficient in 1978 for administrative and operating
expenses ($1.3 to 1.6 million) could be adjusted for inflation.
In other words, in 1978, the delegates established “sufficient
sums” that would not be recalculated in the future, but adjusted
in a manner that could be mathematically determined, not
judicially determined. Further, were “actual sums” the
9
The delegates arrived at this numerical determination after extensive
discussion of the 1976 DHHL General Plan, the increasing number of homestead
applicants, the need for a bigger DHHL staff, and the need for automated
record-keeping systems. Nelson I, 127 Hawaiʻi at 200, 202-03, 277 P.3d at
294, 296-97. Therefore, we respectfully disagree with the Dissent, which
posits that Nelson I leaves open present judicial reconsideration of these
factors. Dissent Sections II.A.3 and II.B.
10
Therefore, we respectfully disagree with the Dissent that the circuit
court was free to “affirmatively” determine, as “sufficient sums,” DHHL’s
“actual” administrative and operational costs. Dissent Section II.C.
Respectfully, the Dissent misreads Nelson I, which concluded only that “a
judicial determination of what affirmatively constitutes ‘sufficient sums’
for the other three constitutional purposes [in Article XII, Section 1] is
nonjusticiable, based on the political question doctrine.” Nelson I, 127
Hawaiʻi at 206, 277 P.3d at 300. The Dissent misinterprets this sentence to
mean that this court expressly held that the circuit court could
“affirmatively” determine “sufficient sums” as “actual” sums for DHHL’s
administrative and operating expenses. Nelson I did not so hold.
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standard, there would be no need for Delegate De Soto to state
that the $1.3 to 1.6 million figure could be adjusted for
inflation, as periodically recalculating actual, present sums
requires no adjustment for inflation.
The State Defendants also argue that the $1.3 to 1.6
million figure did not need to be adjusted for increased
collective bargaining costs in addition to inflation, but
increased collective bargaining costs were included in
inflation. To support this argument, they point to Delegate De
Soto’s comment at the 1978 Constitutional Convention, which was,
“What we propose with respect to ‘shall fund’ is the
administrative and costs of running the Hawaiian homes program,
which would amount to operating and administrating approximately
$1.3 to 1.6 million, taking into consideration inflation,
collective bargaining agreements that go into inflation with the
pay.” Debates in the Committee of the Whole on Hawaiian Affairs
Comm. Prop. No. 11, in 2 Proceedings of the Constitutional
Convention at 421-22. To the State, Delegate De Soto
acknowledged that increased pay due to collective bargaining
agreements is one major contributor to inflation; it is not
separate from inflation, but a key contributor to inflation.
This interpretation appears to be faithful to Delegate De Soto’s
floor speech. In short, the State Defendants conclude that the
State is constitutionally mandated to provide to DHHL, for
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administrative expenses, a level of funding at or above $1.3 to
1.6 million, adjusted for inflation. This amount, they argue,
is consistent with the framers’ intent.
The DHHL Defendants disagree with the State Defendants.
They argue that this court in Nelson I “instructed the Circuit
Court to determine on remand ‘sufficient sums’ for DHHL’s
administration and operating budget without limitation or
restriction.” There is no such remand instruction in the Nelson
I opinion, which simply affirmed the ICA’s judgment. 127 Hawaii
at 206, 277 P.3d at 300. The DHHL Defendants point out that
Nelson I quoted the following 1978 Constitutional Convention
history, which indicates that the $1.3 to 1.6 million figure
identified by the delegates was not the upper limit and was
insufficient even in 1978:
Delegate Sutton: The $1.3 to $1.6 million is for [DHHL’s]
administrative costs at present. Their need is more.
127 Hawaiʻi at 202, 277 P.3d at 296 (emphasis added).
. . . .
“As demands on the department and staff grow, a much bigger
staff will be required . . . Not only is there a demand on
the money for staff, but there is also other administrative
demands that need to be met through funds, especially in
the area of record-keeping.”
127 Hawaii at 200, 277 P.3d at 294 (quoting 1 Proceedings
at 414).
However, as we made clear in Nelson I, the phrase “Their need is
more” did not refer to more money than $1.3 to 1.6 million for
administrative and operating expenses; it referred to more money
for the “development of home, agriculture, farm and ranch lots.”
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127 Hawaii at 203, 277 P.3d at 297. We held that judicially
calculating “sufficient sums” for that purpose was barred by the
political question doctrine. 127 Hawaii at 205, 277 P.3d at
299.
For their part, in support of their understanding that
“sufficient sums” means “actual sums,” the Plaintiffs point to
Nelson I’s quotation of the definition of “sufficient” from
Webster’s Third New International Dictionary as “marked by
quantity, scope, power, or quality to meet with the demands,
wants or needs of a situation or of a proposed use or end. . .
.” Nelson I, 127 Hawaiʻi at 198, 277 P.3d at 292. This court,
however, found these dictionary definitions too unclear to
apply.11 Id. (“Even with these popular definitions in mind, it
is unclear what precisely the constitutional delegates intended
when they used the term ‘sufficient sums.’”) As a result, this
court turned to the 1978 Constitutional Convention history to
interpret the phrase “sufficient sums.” Id. The $1.3 to 1.6
million baseline (adjusted for inflation) set by the 1978
Constitutional Convention delegates was the only justiciable
basis for determining “sufficient sums.” Moreover, if “actual
sums” were the standard, there would have been no need for this
11
Therefore, we respectfully disagree with the Dissent that the
dictionary definition of “sufficient” provides a judicially discoverable and
manageable standard for determining “sufficient sums.” Dissent Section
II.A.3. This court previously rejected that standard in Nelson I.
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court, in Nelson I, to hold nonjusticiable the determination of
sufficient sums for the other three enumerated purposes in
Article XII, Section 1. There would also have been no need for
Delegate De Soto to state that the $1.3 to 1.6 million figure
could be adjusted for inflation, as any present calculation of
“actual sums” would not need to be adjusted for inflation.
Again, the Constitutional Convention history supports that the
only “judicially discoverable and manageable standard” for
determining “sufficient sums” for DHHL’s administrative and
operating expenses in 1978 was the $1.3 to 1.6 million baseline
identified by the delegates, adjusted for inflation.
In short, the Legislature and State Defendants are correct
that the circuit court deviated from Nelson I’s standard for
determining “sufficient sums” for DHHL’s administrative and
operating expenses: the 1978 baseline level of $1.3 to 1.6
million, adjusted for inflation.
Because the circuit court rejected this method of
calculating sufficient sums, it made no finding as to what $1.3
to 1.6 million, adjusted for inflation for the 2015-2016 fiscal
year, would be. We note that, at various points during the
remanded proceedings, the State Defendants calculated $1.3 to
1.6 million adjusted for inflation to be over $4.9 million,
while the legislature calculated it to be $5.8 million.
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This court is not in a position to make the ultimate
factual finding. Rather, “[w]here findings are infirm because
of an erroneous view of the law, a remand is the proper course
unless the record permits only one resolution of the factual
issue.” Wilart Assocs. v. Kapiolani Plaza, Ltd., 7 Haw. App.
354, 360, 766 P.2d 1207, 1211 (1988) (citation omitted). Here,
the record does not permit only one resolution of the factual
issue.
Therefore, we vacate the circuit court’s First Amended
Final Judgment, Final Judgment, and underlying orders. This
case is remanded to the circuit court for further proceedings.
On remand, the circuit court shall determine whether the State
Defendants have provided “sufficient sums” for DHHL’s
administrative and operating budget using the only judicially
discoverable and manageable standard identified in Nelson I:
the 1978 baseline of $1.3 to 1.6 million, adjusted for
inflation.
V. Conclusion
For the foregoing reasons, the circuit court’s First
Amended Final Judgment, Final Judgment, and underlying orders
are vacated, and this case is remanded to the circuit court to
determine whether the State Defendants have provided “sufficient
sums” for DHHL’s administrative and operating budget for the
2015-2016 fiscal year using the only judicially discoverable and
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manageable standard identified in Nelson I: the 1978 baseline
of $1.3 to 1.6 million, adjusted for inflation.
Sharla Ann Manley /s/ Mark E. Recktenwald
and Summer L.H. Sylva
for plaintiffs-appellees/ /s/ Paula A. Nakayama
cross-appellants
/s/ Sabrina S. McKenna
Charleen M. Aina
for defendants-appellants/ /s/ Richard W. Pollack
cross-appellees
Melvyn M. Miyagi, Brian A.
Kang, and Ross T. Shinyama
for defendants-appellees/
cross-appellees
Mark J. Bennett
for amicus curiae
Hawaiʻi State Legislature
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