Ho'omoana Foundation v. Land Use Commission

NOT FOR PUBLICATION IN WEST'S HAWAI#I REPORTS AND PACIFIC REPORTER
Electronically Filed
Intermediate Court of Appeals
CAAP-XX-XXXXXXX
23-MAY-2022
08:40 AM
Dkt. 61 MO
NOS. CAAP-XX-XXXXXXX and CAAP-XX-XXXXXXX
IN THE INTERMEDIATE COURT OF APPEALS
OF THE STATE OF HAWAI#I
CAAP-XX-XXXXXXX
HO#OMOANA FOUNDATION, Appellant-Appellee, v.
LAND USE COMMISSION, STATE OF HAWAI#I, Appellee-Appellee, and
PU#UNOA HOMEOWNERS ASSOCIATION, INC.; AND ROSS R. SCOTT,
Appellees-Appellants.
AND
CAAP-XX-XXXXXXX
HO#OMOANA FOUNDATION, Appellant-Appellee, v.
LAND USE COMMISSION, STATE OF HAWAI#I, Appellee-Appellant, and
PU#UNOA HOMEOWNERS ASSOCIATION, INC.; AND ROSS R. SCOTT,
Appellees-Appellees.
APPEAL FROM THE CIRCUIT COURT OF THE SECOND CIRCUIT
(CIVIL NO. 16-1-0160(1))
MEMORANDUM OPINION
(By: Hiraoka, Presiding Judge, Nakasone and McCullen, JJ.)
Appellees-Appellants Pu#unoa Homeowners Association,
Inc. and Ross R. Scott1 [collectively Homeowners], and State of
Hawai#i Land Use Commission (LUC), appeal from the Circuit Court
of the Second Circuit's (circuit court)2 January 4, 2017
"Findings of Fact, Conclusions of Law, and Order Vacating [LUC's]
1
Scott was substituted for Devonne Lane, who was a co-petitioner in
the administrative proceeding and an appellee in the circuit court.
2
The Honorable Rhonda I.L. Loo presided.
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Decisions and Orders Entered on March 3, 2016" (Order) and
February 16, 2017 Final Judgment (Judgment). On appeal,
Homeowners and LUC challenge the circuit court's decision
vacating LUC's March 3, 2016 Declaratory Order, which ruled as a
matter of law that "an overnight campground . . . is prohibited
by [Hawaii Revised Statutes (HRS)] § 205-4.5(a)(6) and cannot be
permitted by a special use permit."
I. Background
Land in Hawai#i is divided into four use districts -
urban, rural, agricultural, and conservation. HRS § 205-2(a)
(2001). Agricultural lands are classified from "A" to "E," based
on the "soil's general productive capacity," with "'A' denoting
the highest level of productivity and 'E' the lowest."
Neighborhood Bd. No. 24 (Waianae Coast) v. State Land Use Comm'n,
64 Haw. 265, 266 n.2, 639 P.2d 1097, 1099 n.2 (1982). Because
lands classified as "A" or "B," i.e., Prime Lands, are the most
suitable for growing crops, they are restricted to certain uses.
However, a landowner may apply for a Special Permit to allow
"certain unusual and reasonable uses" or may seek a Boundary
Amendment to have the land re-classified.
The Ho#omoana Foundation (Foundation) has a long-term
lease of agricultural class B land, and sought to develop an
overnight campground for use by homeless and commercial campers.
Homeowners own property adjacent to Foundation's class B Land.
In December 2015, Homeowners petitioned LUC for a
Declaratory Order (Petition) pursuant to HRS § 91-8 (2012) and
Hawai#i Administrative Rules (HAR) § 15-15-98, to determine
whether approval of an overnight camp on class A and B land was
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obtainable through the Special Permit process or whether a
Boundary Amendment was needed.
In February 2016, Foundation filed a "Petition to
Intervene and Position Statement" (Intervention Request), arguing
that it could obtain approval to develop its proposed campground
through the Special Permit process and need not apply for a
Boundary Amendment. The State of Hawai#i Office of Planning and
the Maui Department of Planning also filed position statements
agreeing that the proposed campground could be approved through
the Special Permit process, and the Maui Department of Planning
indicated it was processing Foundation's Special Permit request.
LUC held a public meeting on the Petition, receiving
public testimony and argument from Homeowners, the Maui
Department of Planning, the Office of Planning, and Foundation.
LUC allowed only Homeowners to cross-examine witnesses or rebut
arguments.
On March 3, 2016, LUC entered a Declaratory Order
granting the Petition (Order Granting Petition), finding that
"the clear prohibition of overnight camps on class A and B rated
lands is irreconcilable with the provisions of HRS §205-6
[(2017)] that permit certain 'unusual and reasonable uses' within
agricultural districts other than for which the district is
classified." To adopt otherwise "would mean that the counties
could define away completely any statutory restrictions on
agricultural uses" and "results in treating a clear and explicit
statutory prohibition as a nullity[.]" LUC concluded that the
"only way that overnight camps such as those proposed in the
Project can be allowed on the Property is to change its land use
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classification to one where overnight camps would be permitted."
LUC also denied Foundation's Intervention Request as moot.
Foundation appealed, and the circuit court vacated
LUC's Order Granting Petition. The circuit court held that the
proposed campground could be approved by Special Permit and did
not require a Boundary Amendment. In doing so, the circuit court
explained that HRS § 205-4.5(a)(6) (Supp. 2015) "did not
'expressly prohibit' overnight camps within the agricultural
district" and LUC's conclusion to the contrary was incorrect.
The circuit court also explained that "uses not expressly
permitted in subsection (a) of HRS §205-4.5 are prohibited unless
permitted as provided in HRS §205-6 (2017), which is the special
use permit statute, and HRS §205-8 which is the non-conforming
use statute."3 The circuit court noted that it was persuaded by
the Hawai#i Supreme Court's reasoning in Maha#ulepu v. Land Use
Comm'n, 71 Haw. 332, 790 P.2d 906 (1990), and vacated LUC's Order
Granting Petition. The circuit court also reversed the Order
Denying Intervention, and remanded the matter to LUC for further
proceedings. This appeal followed.
II. Standards of Review
"In a secondary appeal, this court applies the
standards of HRS § 91-14(g) [(2012)] to determine whether the
circuit court decision was right or wrong." Mauna Kea Anaina Hou
v. Bd. of Land & Nat. Res., 136 Hawai#i 376, 388, 363 P.3d 224,
236 (2015). However, a challenge that "LUC exceeded the scope of
3
HRS § 205-8 is not applicable in this case.
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their authority under HRS Chapter 205, [] raises an issue of
statutory interpretation." Maha#ulepu, 71 Haw. at 335-36, 730
P.2d at 908.
Generally, questions of statutory interpretation are
reviewed de novo, "but in the case of ambiguous statutory
language, the applicable standard of review regarding an agency's
interpretation of its own governing statute requires this court
to defer to the agency's expertise and to follow the agency's
construction of the statute unless that construction is palpably
erroneous." Gillan v. Gov't Emps. Ins. Co., 119 Hawai#i 109,
114, 194 P.3d 1071, 1076 (2008) (cleaned up and emphasis added).
III. Discussion
The gist of LUC's and Homeowners' appeal is that the
circuit court erred in determining that Foundation's overnight
camping project may be addressed through a Special Permit rather
than a Boundary Amendment. In addition, Homeowners separately
argue that the circuit court erred by relying on Maha#ulepu, and
LUC argues that the circuit court erred by determining that
Foundation did not waive its Maha#ulepu argument. Finally, LUC
argues that the circuit court erred by reversing the denial of
Foundation's motion to intervene.
A. Legal Landscape
1. Hawai#i Constitution
Our constitution requires that the State "conserve and
protect agricultural lands, promote diversified agriculture,
increase agricultural self-sufficiency and assure the
availability of agriculturally suitable lands" and that the
legislature "provide standards and criteria to accomplish" these
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mandates. Article XI, section 3 of the Hawai#i State
Constitution. "Lands identified by the State as important
agricultural lands needed to fulfill the purposes above shall not
be reclassified by the State or rezoned by its political
subdivisions without meeting the standards and criteria
established by the legislature . . . ." Id.
2. HRS Chapter 205
(a) Purposes
After a close reading of HRS chapter 205, it appears
that the legislature enacted a comprehensive scheme to manage
land use in Hawai#i, and to preserve important agricultural land
in particular. "In the establishment of the boundaries of
agricultural districts, the greatest possible protection shall be
given to those lands with a high capacity for intensive
cultivation[.]" HRS § 205-2(a)(3). Declaring that "the people
of Hawaii have a substantial interest in the health and
sustainability of agriculture as an industry in the State[,]" the
legislature also affirmed a compelling interest in preserving
agricultural lands:
There is a compelling state interest in conserving the
State's agricultural land resource base and assuring the
long-term availability of agricultural lands for
agricultural use to achieve the purposes of:
(1) Conserving and protecting agricultural lands;
(2) Promoting diversified agriculture;
(3) Increasing agricultural self-sufficiency; and
(4) Assuring the availability of agriculturally
suitable lands,
pursuant to article XI, section 3, of the Hawaii State
Constitution.
HRS § 205-41 (2017).
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One important objective in identifying important
agricultural lands was to "increase agricultural self-sufficiency
for current and future generations." HRS § 205-42(b) (2017).
Policies, plans, ordinances, and rules "shall promote the long-
term viability of agricultural use of important agricultural
lands" and shall "[d]iscourage the fragmentation of important
agricultural lands and the conversion of these lands to
nonagricultural uses." HRS § 205-43(2) (2017).
(b) Permitted and Prohibited Uses
In subsection (a) of HRS § 205-4.5, the legislature
restricted agricultural districts with a "productivity rating
class A or B" to 23 permissible uses. HRS § 205-4.5(a). One
such permissible use is "[p]ublic and private open area types of
recreational uses, including day camps, picnic grounds, parks,
and riding stables, but not including dragstrips, airports,
drive-in theaters, golf courses, golf driving ranges, country
clubs, and overnight camps." HRS § 205-4.5(a)(6) (emphases
added).
In subsection (b) of HRS § 205-4.5, the legislature
mandated that any use not expressly permitted in subsection (a)
was prohibited except as permitted by Special Permit pursuant to
HRS § 205-6:
Uses not expressly permitted in subsection (a) shall
be prohibited, except the uses permitted as provided in
sections 205-6 and 205-8 . . . . Any other law to the
contrary notwithstanding, no subdivision of land within the
agricultural district with soil classified by the land study
bureau's detailed land classification as over (master)
productivity rating class A or B shall be approved by a
county unless those A and B lands within the subdivision are
made subject to the restriction on uses as prescribed in
this section and to the condition that the uses shall be
primarily in pursuit of an agricultural activity.
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Any deed, lease, agreement of sale, mortgage, or other
instrument of conveyance covering any land within the
agricultural subdivision shall expressly contain the
restriction on uses and the condition, as prescribed in this
section that these restrictions and conditions shall be
encumbrances running with the land until such time that the
land is reclassified to a land use district other than
agricultural district.
HRS § 205-4.5(b) (emphases added).
(c) Special Permit and District Boundary Amendment
As referenced above, the Special Permit process of HRS
§ 205-6 allows the county planning commission to "permit certain
unusual and reasonable uses within agricultural and rural
districts other than those for which the district is classified"
"but only when the use would promote the effectiveness and
objectives of this chapter; provided that a use proposed for
designated important agricultural lands shall not conflict with
any part of this chapter." HRS § 205-6(a) and (c); Waianae
Coast, 64 Haw. at 269-70, 639 P.2d at 1101.
"The special use or exception evolved as a land use
control device from a recognition of the hardship frequently
visited upon landowners due to the inherent rigidity of the
Euclidean zoning system, and the inapplicability of variance or
boundary amendment procedures to all land use problems." Id. at
270, 639 P.2d at 1101-02. Unlike a district boundary amendment
(reclassifying land) and a variance (permission to use property
in a manner forbidden by law), "a special permit allows the owner
to put his land to a use expressly permitted by ordinance or
statute on proof that certain facts and conditions exist, without
altering the underlying zoning classification." Id. at 270-71,
639 P.2d at 1102 (emphasis added).
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"Its essential purpose, as explained by the state
Attorney General, is to provide landowners relief in exceptional
situations where the use desired would not change the essential
character of the district nor be inconsistent therewith." Id. at
271, 639 P.2d at 1102 (citing 1963 Op. Att'y Gen. 63-37). Unlike
district boundary amendments, Special Permits provide an
"expedited review," which "underscore[s] the necessity for their
proper application to the particular land use problems they were
designed to address." Id. at 272, 639 P.2d at 1102.
"[U]se of the special permit to effectuate essentially
what amounts to a boundary change would undermine the protection
from piecemeal changes to the zoning scheme guaranteed landowners
by the more extensive procedural protections of boundary
amendment statutes." Id. at 272, 639 P.2d at 1102-03 (citations
omitted). The Hawai#i Supreme Court did "not believe that the
legislature envisioned the special use technique to be used as a
method of circumventing district boundary amendment procedures to
allow the ad hoc infusion of major urban uses into agricultural
districts." Id. at 272, 639 P.2d at 1103; Save Sunset Beach
Coalition v. City & Cnty. of Honolulu, 102 Hawai#i 465, 482, 78
P.3d 1, 18 (2003) (observing "that the 'reasonable and unusual'
exception permitted by HRS § 205-6 cannot be utilized to
circumvent the essential purpose of the agricultural district").
In sum, HRS chapter 205 aims to preserve agricultural
land in Hawai#i and promote agricultural self sufficiency for
future generations.
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B. LUC's Decision and Maha#ulepu
As an initial matter, LUC contends that Foundation
waived its Maha#ulepu argument. Foundation, however, does not
appear to have raised a new argument by citing Maha#ulepu.
Instead, Foundation cited Maha#ulepu as new authority to support
its existing argument that it could obtain approval to develop an
overnight camp on class B agricultural lands through the Special
Permit process.
Turning to LUC's and Homeowner's contention that the
circuit court erred by holding overnight camping may be addressed
through a Special Permit, their arguments are well taken as LUC's
decision appears to be supported by canons of statutory
construction. The Special Permit statute, HRS § 205-6, is a
general statute and the exclusion of overnight camps from the
permitted use of "public and private open area type of recreation
uses," HRS § 205-4.5(a)(6), is a specific statute. And where
there is ambiguity, the specific statute must control over the
general statute. Yoshimura v. Kaneshiro, 149 Hawai#i 21, 39, 481
P.3d 28, 46 (2021) ("Under ordinary canons of construction, a
more specific statute controls over a more general statute").
Also, as an exception to the permitted use, the exclusion of
overnight camps should be strictly construed. State v. Russell,
62 Haw. 474, 480, 617 P.2d 84, 88 (1980) ("It is a well settled
rule of statutory construction that exceptions to legislative
enactments must be strictly construed"). Finally, allowing
overnight camps through a Special Permit when overnight camps
were expressly excluded from a particular permitted use appears
to render the express exclusion meaningless, and a statute cannot
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be interpreted so as to render it a nullity. City & Cnty. of
Honolulu v. Hsuing, 109 Hawai#i 159, 173, 124 P.3d 434, 448
(2005) ("[O]ur rules of statutory construction requires us to
reject an interpretation of a statute . . . that renders any part
of the statutory language a nullity").
In addition, LUC's decision appears to perpetuate the
purposes of the constitutional mandate and statutory scheme,
which is to promote the "health and sustainability of
agriculture" and "increase agricultural self-sufficiency for
current and future generations." An overnight camp, as well as a
drag strip, airport, drive-in theater, golf course, golf driving
range, and country club, on class B agricultural land does not on
its face promote the sustainability of agriculture or increase
agricultural self-sufficiency for future generations.
Importantly, a special permit is not a variance to
allow an impermissible use; "a special permit allows the owner to
put his land to a use expressly permitted by ordinance or statute
on proof that certain facts and conditions exist, without
altering the underlying zoning classification." Waianae Coast,
64 Haw. at 270-71, 639 P.2d at 1102 (emphasis added). And here,
overnight camping was not "expressly permitted by ordinance or
statute." Instead, the legislature expressly excluded overnight
camping from an expressly permitted use on class A and B
agricultural land.
Nonetheless, this Court is bound by legal precedent.
Over thirty years ago, in 1990, the Hawai#i Supreme Court
interpreted the same statute, HRS § 205-4.5(a)(6), as applied to
a golf course. In that appeal, the supreme court analyzed
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whether the provisions of HRS chapter 205 prohibit the county
planning commission from issuing special use permits for golf
courses on prime agricultural lands classified as Class A or B.
Maha#ulepu, 71 Haw. at 333-34, 790 P.2d at 907. The supreme
court then held that HRS chapter 205 did indeed provide the
authority for such permits. Id.The supreme court reasoned that, although golf courses
are not permitted on class A and B agricultural lands under HRS
§ 205-4.5(a), subsection (b) "nonetheless allows those uses for
which special permits may be obtained under § 205-6." Id. at
336, 790 P.2d at 908-09. The supreme court explained that
"[s]ection 205-6 vests in the planning commissions the authority
to issue special permits for uses that, while not otherwise
permitted within agricultural districts, are nonetheless 'unusual
and reasonable' uses that promote the effectiveness and
objectives of Chapter 205." Id. at 336-37, 790 P.2d at 909.
Although the supreme court did not analyze whether a
golf course promoted the effectiveness and objectives of HRS
chapter 205, it noted that "if the legislature had intended
absolute protection from golf course uses for A and B rated
agricultural lands, it would have done so unequivocally by
prohibiting the issuance of permits for golf courses under the
special permit provisions of § 205-4.5(b) or by employing clearly
prohibitory language." Id. at 338-339, 790 P.2d at 910.
Notably, at the time Maha#ulepu was decided, HRS § 205-2(d)
provided that uses in agricultural districts shall include "open
area recreational facilities, including golf courses and golf
driving ranges, provided that they are not located within
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agricultural district lands with soil classified . . . class A or
B." HRS § 205-2(d) (Supp. 1990) (emphasis added).
Fifteen years after Maha#ulepu, in 2005, the
legislature amended HRS § 205-2(d) by specifically prohibiting
golf courses in agricultural districts, subject to a grandfather
clause for golf courses and golf driving ranges approved by a
county before July 1, 2005. HRS § 205-4.5(d); 2005 Haw. Sess.
Laws Act 205 §§ 2-3 at 670-71. The statutory amendment mentioned
only "golf courses and golf driving ranges"; it did not mention
any of the other uses excluded by HRS § 205-4.5(a)(6).
Thus, although the legislature effectively abrogated
Maha#ulepu's specific application to golf courses in 2005, it did
not otherwise address Maha#ulepu's interpretation that HRS
chapter 205 provides authority for issuing special permits
allowing HRS § 205-4.5(a)(6) excluded uses (dragstrips, airports,
drive-in theaters, country clubs, and overnight camps) on class A
and B agricultural land. LUC is afforded deference in
interpreting its own statute, but the Hawai#i Supreme Court is
the "final arbiter" of Hawai#i statutes. And this court, like
the circuit court, is bound by the Hawai#i Supreme Court's
interpretation of the HRS § 205-4.5(a)(6) exclusions in
Maha#ulepu. See Alakai Na Keiki, Inc. v. Matayoshi, 127 Hawai#i
263, 278, 277 P.3d 988, 1003 (2012). To the extent LUC's
decision is contrary to Maha#ulepu, it was palpably erroneous.
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C. Intervention
Finally, LUC contends it properly denied the
Intervention Request as moot because it granted the Petition
without setting a contested case hearing, leaving nothing in
which to intervene. On the other hand, Foundation claims it had
a due process property interest because it leased the Subject
Land "for the sole purpose of using the land for an overnight
camp[,]" and "[b]y taking away [its] ability to engage in that
use under a special use permit, [LUC] impacted [its] property
right."
A "contested case" is "an agency hearing that 1) is
required by law and 2) determines the rights, duties, or
privileges of specific parties. An agency hearing that is
required by law may be required by 1) agency rule, 2) statute, or
3) constitutional due process." Mauna Kea, 136 Hawai#i at 390,
363 P.3d at 238 (citations, internal quotation marks, and
parentheses omitted). A "'party' means each person named or
admitted as a party, or properly seeking and entitled as of right
to be admitted as a party, in any court or agency proceeding."
HRS § 91-1 (Supp. 2021).
But "discretionary hearings are not contested cases
because they are not required by law." Lingle v. Hawai#i Gov't
Emps. Ass'n, AFSCME, Local 152, AFL-CIO, 107 Hawai#i 178, 184,
111 P.3d 587, 593 (2005). Where a hearing was discretionary, LUC
was not required by agency rule or statute to set a contested
case hearing on the matter and to admit Foundation as a party.
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Moreover, "for procedural due process protections to
apply, [the party] must possess an interest which qualifies as
property within the meaning of the constitution. . . . [A]
protected property interest exists in a benefit — tangible or
otherwise — to which a party has a legitimate claim of
entitlement." In re Application of Maui Elec. Co., Ltd., 141
Hawai#i 249, 260, 408 P.3d 1, 12 (2017) (citations and internal
quotation marks omitted). Thus, for Foundation to have a right
to intervene, it must have a protected property interest in
obtaining a Special Permit such that unavailability of the
Special Permit process is a denial of due process.
LUC has broad discretion to grant or deny a Special
Permit for a non-permitted use, see Waianae Coast, 64 Haw. at
268, 639 P.2d at 1100 (noting that judicial review of LUC
decisions on Special Permit applications are limited only to
errors of law or abuse of discretion), and neither the Hawai#i
nor United States Constitution recognizes entitlement to a
benefit - implicating a due process property interest - where the
reviewing body has "broad discretion" to grant or deny the
benefit, beyond merely determining whether the applicant failed
to meet the statutory terms of eligibility. See Alejado v. City
& Cnty. of Honolulu, 89 Hawai#i 221, 229, 971 P.2d 310, 318 (App.
1998) (recognizing that a reviewing body's complete discretion to
grant or deny a benefit based on its assessment of "needs"
generally does not create a constitutionally protected property
right); see also Shanks v. Dressel, 540 F.3d 1082, 1091 (9th Cir.
2008) ("Only if the governing statute compels a result upon
compliance with certain criteria, none of which involve the
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exercise of discretion by the reviewing body, does it create a
constitutionally protected property interest." (Internal
quotation marks omitted.)).
Because Foundation had no constitutional entitlement to
develop the Proposed Campground through a Special Permit, LUC was
not required as a matter of due process to set a contested case
hearing and admit Foundation as a party. Thus, the circuit court
erred in reversing the Order Denying Intervention.
IV. CONCLUSION
For the above reasons, we vacate in part the circuit
court's February 16, 2017 Final Judgment and January 14, 2017
Order with regard to the reversal of LUC's Order Denying
Intervention, and remand to LUC for further proceedings
consistent with this opinion.
DATED: Honolulu, Hawai#i, May 23, 2022.
On the briefs: /s/ Keith K. Hiraoka
Presiding Judge
Deborah K. Wright
Keith D. Kirschbraun /s/ Karen T. Nakasone
Douglas R. Wright, Associate Judge
for Appellees-Appellants
PU#UNOA HOMEOWNERS ASSOCIATION, /s/ Sonja M.P. McCullen
INC. and ROSS R. SCOTT. Associate Judge
Robert T. Nakatsuji,
Deputy Solicitor General,
for Appellee-Appellant
LAND USE COMMISSION, STATE OF
HAWAI#I.
James W. Geiger,
for Appellant-Appellee
HO#OMOANA FOUNDATION.
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