caap-16-0000496 27-feb-2017 03:28 pm /2017/nelson_amicus.pdf · state defendants’ motion for...
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NO. CAAP-16-0000496 IN THE INTERMEDIATE COURT OF APPEALS
OF THE STATE OF HAWAI‘I RICHARD NELSON III, KALIKO CHUN, JAMES AKIONA, SR., SHERILYN ADAMS, KELII IOANE, JR., and CHARLES AIPIA,
Plaintiffs-Appellees,
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, MICHAEL P. KAHIKINA, RENWICK V.I. TASSILL, DOREEN NAPUA GOMES, GENE ROSS DAVIS, WALLACE A. ISHIBASHI, and DAVID B. KAAPU, in their official capacities as members of the Hawaiian Homes Commission,
DHHL-Defendants-Appellees,
and
WESLEY MACHIDA, in his official capacity as the State Director of Finance, and the STATE OF HAWAI`I,
State Defendants-Appellants.
CIVIL NO. 07-1-1663-08 JHC ON APPEAL FROM: (1) FIRST AMENDED FINAL JUDGMENT, filed 5/31/2016; (2) FINDINGS OF FACT, CONCLUSIONS OF LAW, AND ORDER, filed 11/27/2015; (3) ORDER AMENDING ORDER ISSUED NOVEMBER 27, 2015, filed 3/8/16; (4) ORDER DENYING IN PART AND GRANTING IN PART THE STATE DEFENDANTS’ MOTION FOR RECONSIDERATION OF, OR TO ALTER OR AMEND, THE JUDGMENT AND ORDER, FILED DECEMBER 21, 2015, filed 3/8/16; (5) ORDER DENYING THE STATE DEFENDANTS’ MOTION FOR SUMMARY JUDGMENT FILED APRIL 17, 2015, filed 6/19/15; (6) ORDER DENYING THE DHHL DEFENDANTS’ MOTION FOR SUMMARY JUDGMENT RE: COUNT II FILED JULY 24, 2014, filed 6/19/15; (7) CLERK’S TAXATION OF COSTS, filed 12/17/15; (8) ORDER GRANTING IN PART AND DENYING IN PART STATE DEFENDANTS’ MOTION SEEKING REDUCTION OF CLERK’S TAXATION OF COSTS, FILED DECEMBER 17, 2015, filed 3/8/16; and (9) CLERK’S TAXATION OF COSTS, filed 5/2/16 (10) FINAL JUDGMENT, filed 12/11/2015
Electronically FiledIntermediate Court of AppealsCAAP-16-000049627-FEB-201703:28 PM
CIRCUIT COURT OF THE FIRST CIRCUIT The Honorable Jeannette H. Castagnetti, Judge
BRIEF OF THE HAWAII STATE LEGISLATURE AS AMICUS CURIAE
EXHIBITS 1-2
CERTIFICATE OF SERVICE
MARK J. BENNETT 2672-0 SPECIAL DEPUTY ATTORNEY GENERAL STARN O’TOOLE MARCUS & FISHER 733 Bishop Street, Suite 1900 Pacific Guardian Center, Makai Tower Honolulu, Hawaii 96813 Telephone: (808) 537-6100 Attorney for HAWAII STATE LEGISLATURE
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Table of Contents
INTRODUCTION ................................................................................................................................ 1 INTEREST OF AMICUS CURIAE ...................................................................................................... 1 ARGUMENT ........................................................................................................................................ 4
I. THE CIRCUIT COURT MISINTERPRETED THE HAWAII SUPREME COURT’S HOLDING IN NELSON I. ........................................................................................................... 4
A. Nelson I did not permit the Circuit Court to Consider Actual DHHL Operating Expenses. 5 B. The Circuit Court Wrongly Decided a Political Question. .................................................... 8
II. TO THE EXTENT THAT THE CIRCUIT COURT ORDERED THE LEGISLATURE TO APPROPRIATE FUNDS, THAT ORDER VIOLATES THE SEPARATION OF POWERS. ................................................................................................................................................... 11
A. The Hawaii Legislature Alone Holds the Power of the Purse. ............................................ 13 B. The Amended Order and Judgment Inappropriately Intrudes into the Legislative Process. ............................................................................................................................................... 16 C. The Amended Order And Judgment Do Not Give Appropriate Deference to the Legislative Process................................................................................................................ 18
CONCLUSION ................................................................................................................................... 20
ii
Table of Authorities
Cases
Alakai Na Keiki, Inc. v. Matayoshi, 127 Hawai`i 263, 277 P.3d 988 (2012) .......................................................................................... 15
Alamida v. Wilson, 53 Haw. 398, 495 P.2d 585 (1972) ................................................................................................. 11
AlohaCare v. Dep’t of Human Servs., 127 Hawai`i 76, 276 P.3d 345 (2012) ............................................................................................ 16
Amfac, Inc. v. Waikiki Beachcomber Inv. Co., 74 Haw. 85, 839 P.2d 10 (1992) ..................................................................................................... 20
Bonner ex rel. Bonner v. Daniels, 907 N.E.2d 516 (Ind. 2009) ............................................................................................................ 15
Campbell Cty. Sch. Dist. v. State, 907 P.2d 1238 (Wyo.), as clarified on denial of reh’g (Dec. 6, 1995) ......................................... 15
Carmichael v. S. Coal & Coke Co., 301 U.S. 495 (1937) ........................................................................................................................ 20
Chun v. Employees’ Ret. Sys. of Hawaii, 73 Haw. 9, 828 P.2d 260 (1992) ..................................................................................................... 20
Cty. of San Diego v. State, 164 Cal. App. 4th 580 ..................................................................................................................... 16
Gannon v. State, 368 P.3d 1024 (Kan. 2016) ............................................................................................................. 15
Guinn v. Legislature of the State of Nevada, 119 Nev. 277, 71 P.3d 1269 (2003)................................................................................................ 14
Hawaii Hous. Auth. v. Lyman, 68 Haw. 55, 704 P.2d 888 (1985) ................................................................................................... 19
In re Beverly Hills Bancorp, 752 F.2d 1334 (9th Cir. 1984) .......................................................................................................... 5
King v. State, 818 N.W.2d 1 (Iowa 2012) ....................................................................................................... 15, 17
Koike v. Bd. of Water Supply, City & Cty. of Honolulu, 44 Haw. 100, 352 P.2d 835 (1960) ........................................................................................... 16, 20
iii
LIMITS v. President of The Senate, 414 Mass. 31, 604 N.E.2d 1307 (1992) ......................................................................................... 14
Nelson v. Hawaiian Homes Commission, 127 Hawai`i 185, 277 P.3d 279 (2012) .................................................................................. passim
Nelson v. Hawaiian Homes Commission, 130 Hawai`i 162, 307 P.3d 142 (2013) ............................................................................................ 9
Pacemaker Diag. Clinic of Am., Inc. v. Instromedix, Inc., 725 F.2d 537 (9th Cir. 1984) .......................................................................................................... 20
Pannell v. Thompson, 91 Wash. 2d 591, 589 P.2d 1235 (Wash. 1979) ............................................................................. 15
Ross v. Stouffer Hotel Co. (Hawai`i) Ltd., 76 Hawai`i 454, 879 P.2d 1037 (1994) .......................................................................................... 10
Sherman v. Sawyer, 63 Haw. 55, 621 P.2d 346 (1980) ..................................................................................................... 1
State v. Bloss, 64 Haw. 148, 637 P.2d 1117 (1981) ............................................................................................... 14
State v. Cotton, 55 Haw. 148, 516 P.2d 715 (1973) ................................................................................................. 13
State v. Kahlbaun, 64 Haw. 197, 638 P.2d 309 (1981) ................................................................................................... 6
State v. Lincoln, 72 Haw. 480, 825 P.2d 64 (1992) ..................................................................................................... 5
Trovillo v. Florida Dept. of Law,Enf't, 762 So.2d 1038 (Fla. Dist. Ct. App. 2000) ..................................................................................... 14
Trustees of Office of Hawaiian Affairs v. Yamasaki, 69 Haw. 154, 737 P.2d 436 cert. denied, 484 U.S. 898 (1987) ............................................... 10, 15
Von Holt v. Izumo Taisha Kyo Mission of Haw., 44 Haw. 147, 355 P.2d 40 (1960) ................................................................................................... 13
Washington v. Fireman's Fund Ins. Cos., 68 Haw. 192, 708 P.2d 129 (1985) ......................................................................................... passim
Statutes
U.S. Const., art. I, § 1 ............................................................................................................................ 1
U.S. Const., art. IV, § 4 ......................................................................................................................... 3
iv
Haw. Const., art. III, § 1 ........................................................................................................................ 1
Haw. Const. art. III, § 4 ......................................................................................................................... 1
Haw. Const., art. III § 14 ....................................................................................................................... 1
Haw. Const., art. III, § 15 ..................................................................................................................... 2
Haw. Const., art. III, § 16 ...................................................................................................................... 2
Haw. Const., art. III, § 17 ..................................................................................................................... 2
Haw. Const., art. III, § 19 .................................................................................................................... 11
Haw. Const., art. VI, § 1 ..................................................................................................................... 11
Haw. Const., art. VII, § 8 ...................................................................................................................... 2
Haw. Const., art. VII, § 9 ...................................................................................................................... 2
Haw. Const., art. VII, § 10 .................................................................................................................... 2
Haw. Const., art. VII, § 11 .................................................................................................................... 2
Haw. Const., art. VII, § 12 .................................................................................................................... 2
Haw. Const., art. VII, § 13 .................................................................................................................... 2
Haw. Const., art. XII, § 1 ............................................................................................................ passim
Rules
Haw. R. Evid. 201(b) .......................................................................................................................... 17
Other Authorities
16A Am. Jur. 2d Constitutional Law § 279........................................................................................ 14 Second Reading, Committee of the Whole Report No. 11, Comm. Prop. No. 11,
2 Proceedings .................................................................................................................................... 7
BRIEF OF THE HAWAII LEGISLATURE AS AMICUS CURIAE IN SUPPORT OF THE DEFENDANTS-APPELLANTS/CROSS-APPELLEES
INTRODUCTION
The Hawaii Legislature files this brief, amicus curiae, because it believes the circuit
court drastically and wrongly overstepped the remand parameters set by the Supreme Court in
Nelson v. Hawaiian Homes Commission, 127 Hawai`i 185, 277 P.3d 279 (2012) (Nelson I). The
Hawaii Legislature believes that the decisions and rulings by the circuit court unconstitutionally
impede and interfere with the constitutional prerogatives of the Legislature and violate the
constitutional principle of separation of powers. The Legislature respectfully asks this Court to
reverse.
INTEREST OF AMICUS CURIAE
The Hawaii Constitution vests the legislative power of this State in a legislature,
and extends that power “to all rightful subjects of legislation not inconsistent with this
constitution or the Constitution of the United States.” Haw. Const. art. III, § 4. “Legislative
power is defined as the power to enact laws and to declare what the law shall be.” Sherman v.
Sawyer, 63 Haw. 55, 57, 621 P.2d 346, 348 (1980).
As the body entrusted by the Constitution with carrying out the legislative
functions of the State, amicus has a significant interest in safeguarding its autonomy against
intrusion by the co-equal branches.
The Hawaii Constitution, like the United States Constitution, first creates the
legislative branch of government providing that “[t]he legislative power shall be vested in the
legislature, which shall consist of two houses, the senate and a house of representatives.”1 After
describing the composition of the Senate and the House of Representatives, the Hawaii
Constitution adopts the fundamental democratic principle that “[e]ach member of the legislature
shall be elected at an election.” Haw. Const., art. III, § 4.
The Hawaii Constitution mandates that “[n]o law shall be passed except by bill.”
Haw. Const., art. III § 14. In recognition that exercise of the legislative power is reserved for the
1 Compare Haw. Const., art. III, § 1 with U.S. Const., art. I, § 1 (“All legislative powers herein granted shall be vested in a Congress of the United States, which shall consist of a Senate and House of Representatives.”)
2
most representative branch of government, the Hawaii Constitution provides a delicate and
complex set of checks and balances on such power, including (i) that every bill must pass “three
readings in each house on separate days” before becoming law, Haw. Const., art. III, § 15, (ii) that
printed copies of bills be made available to legislature for at least forty-eight hours before the final
reading, id., (iii) a process for sending bills and amendments between the houses, id., (iv) a process
for carrying-over and enacting bills between legislative sessions, id., (v) a process for the approval
or veto of bills by the governor, id., art. III, § 16, a process for the governor to send bills to the
legislature for reconsideration after the adjournment of the legislature, id., and (vi) a process for the
legislature to override an executive veto, id., art. III, § 17.
The Hawaii Constitution also contains an article exclusively devoted to taxation and
finance. Id., art. VII. In this respect, the Hawaii Constitution contemplates that “prior to the
opening of each regular session in an odd-numbered year as may be provided by law, the governor
shall submit to the legislature a budget in a form provided by law setting forth a complete plan of
proposed expenditures of the executive branch.” Id., art. VII, § 8. In turn, “[i]n each regular session
in an odd-numbered year, the legislature shall transmit to the governor an appropriation bill or bills
providing for the anticipated total expenditures of the State for the ensuing fiscal biennium.” Id.,
art. VII, § 9. The Hawaii Constitution also includes various provisions concerning (i) the
amendment of appropriation bills, id., (ii) a general fund expenditure ceiling, id., (iii) the audit of
all departments, offices and agencies of the State by an auditor appointed by the legislature, id., art.
VII, § 10, (iv) the lapsing of appropriations, id., art. VII, § 11, (v) the issuance of indebtedness by
the State, id., art. VII, § 12, and (v) the debt limit, id., art. VII, § 13.
These are just some of the constitutionally mandated procedures for the passage of
bills, the preparation of the State budget, and the appropriation of funds.
In addition, the Hawaii Legislature has passed various laws concerning the
legislative branch of government and the budgeting process, including laws concerning
(i) legislative hearings and procedures, HRS2 §§ 21:1-19, (ii) legislative fiscal and budget analysis,
HRS §§ 21F:1-4, (iii) public access to legislative records, HRS §§ 21G:1-3, (iv) audits of state
departments, offices, and agencies, HRS §§ 23:1-67, and (v) the preparation and review of the
State budget, HRS §§ 37:31-113.1, among various other provisions.
2 “HRS” refers to the Hawaii Revised Statutes.
3
This array of constitutional provisions and statutory sections is not only the manner
provided by law for the appropriation of funds but also constitutes the design for a republican form
of government in Hawaii guaranteed by the U.S. Constitution.3 In explaining the role of the “power
of the purse” in such design, James Madison wrote in The Federalist No. 58:
The House … cannot only refuse, but they alone can propose, the supplies requisite for the support of government. They, in a word, hold the purse that powerful instrument …. This power over the purse may, in fact, be regarded as the most complete and effectual weapon with which any constitution can arm the immediate representatives of the people, for obtaining a redress of every grievance, and for carrying into effect every just and salutary measure.
The Hawaii Legislature has a strong interest in protecting its constitutional powers as one of the
essential elements of the separation of powers and Hawaii’s republican form of government.
In the Legislature’s view, the circuit court drastically overstepped the mandate of
the Hawaii Supreme Court in Nelson I. The court’s task upon remand was merely to determine
the present value of the $1.3 to $1.6 million discussed by the delegates to the 1978 Hawaii
Constitutional Convention. The circuit court erred when it attempted to determine the actual
administrative and operating expenses of the Department of Hawaiian Home Lands (“DHHL”),
thereby essentially usurping the function of the Legislature.
Further, by appearing to essentially order an appropriation of funds (or hold out
the possibility of punishing the State for the Legislature’s “failure” to follow the circuit court’s
“appropriation findings”), the circuit court’s Amended Order and Judgment4 impinges on the
legislative prerogative over the passage of laws and the power to appropriate. The Amended
Order and Judgment bypasses the legislative branch and process and orders (or at least arguably
orders) the appropriation of funds to the DHHL for its administrative and operating budget (or
holds out the possibility of punishing the State for “failures” by the Legislature). The Hawaii
3 U.S. Const., art. IV, § 4 (“The United States shall guarantee to every state in this union a republican form of government.”). 4 The judgment under review in this appeal encompasses the circuit court’s Findings of Fact, Conclusions of Law, and Order, entered November 27, 2015 (ICA 87 at PDF 498-537), as amended by the court’s Order Amending Order Issued November 27, 2015, which was itself entered on March 8, 2016 (ICA 91 at PDF 34-36), and the First Amended Final Judgment, which was entered on the circuit court’s docket on May 15, 2016 (ICA 91 at PDF 683-85). For simplicity’s sake, we refer to these filings collectively as the “Amended Order and Judgment.”
4
Legislature files this brief in order to apprise the Court of the important constitutional concerns
implicated by the Amended Order and Judgment. The Hawaii Legislature respectfully submits
that neither this Court, nor any judge or justice, has the power to either determine the amount of
any appropriation, order any appropriation, or impose any penalty should the Hawaii Legislature,
in fulfilling its constitutional role, decide how much to appropriate (or not appropriate) to
DHHL. The Legislature respectfully asks that this Court reverse the circuit court, and make it
clear in its opinion that the circuit court drastically and wrongly overstepped the remand the
Supreme Court mandated in Nelson I and unconstitutionally intruded on the constitutional
prerogatives of the Legislature. The Legislature respectfully submits that such an opinion from
the Court is necessary in order to make clear that the necessary constitutional paradigm of the
separation of powers—which requires that each branch of government respect the other co-equal
branches of government—is still the law in Hawaii.
ARGUMENT I. THE CIRCUIT COURT MISINTERPRETED THE HAWAII SUPREME COURT’S
HOLDING IN NELSON I. In its Amended Order and Judgment, the circuit court concluded that “DHHL needs
more than $28 million annually for its administrative and operating budget for fiscal year 2015-16,”
and ordered the State of Hawaii to “fulfill [its] constitutional dut[y].” ICA 87 at PDF 511; ICA 91 at
PDF 35. But the circuit court’s findings of fact and legal conclusions are based on a demonstrably
incorrect premise: that the Hawaii Supreme Court’s opinion in Nelson I permitted the circuit court,
on remand, to undertake extensive judicial fact-finding to resolve the question of what constitutes
the actual “administrative and operating expenses” of the DHHL. Nelson I said no such thing. When
read properly, Nelson I cabins the scope of the circuit court’s task on remand to determining the
present value of the $1.3 to $1.6 million described as “sufficient” by the delegates to the 1978
Constitutional Convention. By wading into the factual thicket of what constitutes actual sufficient
operating funds for the DHHL, the circuit court engaged in precisely the sort of “initial policy
determinations [that are] of a kind clearly for nonjudicial discretion.” Nelson I, 127 Hawai`i at 203,
277 P.2d at 297. Because the circuit court engaged in fact-finding to determine the actual operating
expenses of the DHHL, it dramatically exceeded Nelson I’s mandate and violated core separation of
powers principles.
5
A. Nelson I did not permit the Circuit Court to Consider Actual DHHL Operating Expenses. “It is the duty of the trial court, on remand, to comply strictly with the mandate of
the appellate court according to its true intent and meaning, as determined by the directions given
by the reviewing court.” State v. Lincoln, 72 Haw. 480, 485, 825 P.2d 64, 68 (1992) (quoting 5
Am. Jur. 2d Appeal and Error § 991 (1962 & Supp. 1991)). Accordingly, “when acting under an
appellate court’s mandate, an inferior court cannot vary it, or examine it for any other purpose than
execution, or give any other or further relief … further than to settle so much as has been
remanded.” Lincoln, 72 Haw. at 486, 825 P.2d at 68 (quoting In re Beverly Hills Bancorp, 752
F.2d 1334, 1337 (9th Cir. 1984)). Because the circuit court exceeded the scope of the Supreme
Court’s Nelson I mandate, this Court should reverse.5
In their First Amended Complaint, Plaintiffs “sought injunctive relief,” Nelson I,
127 Hawai`i at 191, 277 P.3d at 285, in the form of an order by the court that the Legislature
appropriate sufficient funds for four enumerated purposes: “(1) development of home, agriculture,
farm and ranch lots; (2) home, agriculture, aquaculture, farm and ranch loans; (3) rehabilitation
projects … [and] (4) the administration and operating budget of the department of Hawaiian home
lands.” ICA 79 at PDF 65.6 The circuit court initially concluded that Plaintiffs’ claims presented a
political question beyond the court’s authority to answer. ICA 81 at PDF 483-84.
The Supreme Court ultimately took up the question of whether the political
question doctrine barred Plaintiffs’ claims, and answered it largely in the affirmative, holding that,
with respect to three out of the four types of appropriations sought by Plaintiffs, the Hawaii
Constitution and its history “provide no judicially discoverable and manageable standards for
determining sufficient sums for these three purposes without initial policy determinations of a kind
clearly for nonjudicial discretion.” Nelson I, 127 Hawai`i at 205, 277 P.3d at 299 (internal
5 The Legislature believes the Court, should it order a further remand, should only remand for the purpose of determining the value of the $1.3 to $1.6 million in today’s dollars described as “sufficient” by the delegates to the 1978 Constitutional Convention. However, given the history of this case, the Legislature believes the Court could, in its discretion, and mindful of separation of powers principles, explicitly state that “sufficient” means the “present” value of the $1.3 to $1.6 million described as “sufficient” by the delegates to the 1978 Constitutional Convention, and, in light of the 2016 DHHL appropriation (which exceeds that sum), simply terminate this case without remand. 6 Plaintiffs’ demand for appropriations mirrors the four funding purposes articulated in Article XII, Section 1 of the Hawaii Constitution.
6
quotation marks omitted). In other words, the courts lacked power to award Plaintiffs the vast
majority of the relief they sought.
The sole funding purpose on which the Constitution was not silent, the Court
opined, was the “administration and operating budget” of the DHHL. And on that point, the Court
concluded that the history of the 1978 Constitutional Convention provided “judicially discoverable
and manageable standards, as well as initial policy determinations, as to what constitutes ‘sufficient
sums’ for DHHL’s administrative and operating expenses only.” 127 Hawai`i at 188, 277 P.3d at
282. Conversely, where the Constitution and constitutional convention do not resolve the
“uncertainty with regard to what constitutes ‘sufficient sums,’” judicial review of that issue is a
political question. Id. at 205, 277 P.3d at 299.
In order to hold that the issue of funding the administrative and operating expenses
was not a political question, the Court had to precisely identify the “judicially discoverable and
manageable standards” that would permit the circuit court to quantify the relief owed to Plaintiffs
without making policy decisions of a sort traditionally committed to the Legislature. Observing
that the text of Article XII, Section 1 offered little guidance on the question of what constitutes
“sufficient sums,” the Court next looked to the “debates, proceedings, and committee reports” of
the 1978 Constitutional Convention. Nelson I, 127 Hawai`i at 198, 277 P.3d at 292 (quoting State
v. Kahlbaun, 64 Haw. 197, 204, 638 P.2d 309, 316 (1981)).
As the Court explained, the delegates to the convention “ultimately arrived at $1.2
to $1.6 million as a ‘sufficient sum,’ and that figure related only to administrative and operating
expenses.” Nelson I, 127 Hawai`i at 202. 277 P.3d at 296.
Thus, by the end of the Committee on the Whole Debates, what was certain was that the $1.3 to $1.6 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.
Id. at 202-03, 277 P.3d at 296-97 (footnote omitted).7 In other words, the only “judicially
discoverable and manageable standard” found to resolve the question of what constitutes
7 In their answering brief, Plaintiffs assert that “$1.6 million (plus inflation) would not have solved DHHL’s ‘monumental and eternal dilemma in funding’ in 1978.” Plas. Ans. Br. at 24. But Plaintiffs ignore Nelson I’s holding, that in 1978, “the $1.3 to $1.6 figure represented ‘sufficient
7
“sufficient sums” for the operating and administrative expenses of DHHL is the $1.3 to $1.6
million dollar amount.8 Any judicial attempt to resolve the question of actual operating expenses
(beyond the “adjusted” $1.3 to $1.6 million amount) exceeds the authority of the judiciary because
that issue—like the funding of the other three purposes identified in Article XII, Section 1—is not
tied to any standard found in the text or legislative history of the Constitution. Where there is no
“judicially discoverable and manageable standard,” the issue presents “uncertainties surrounding
the subject matter that have been clearly committed to another branch of government to resolve.”
Id. at 197, 277 P.3d at 291.
Although the text of Nelson I clearly mandates that the circuit court do no more
than determine the “present” or “adjusted” value of the $1.3 to $1.6 million discussed in the
convention debates, that conclusion is amply supported by the delegates’ comments in the debates
themselves. As the Nelson I Court explained, the proposed funding mandate in Article XII, Section
1 troubled a number of delegates, one of whom expressed the concern that “I don’t know whether
this Convention realizes the extent to which it is mandating the State to guarantee funds.” Nelson I,
127 Hawai`i at 202, 277 P.3d at 296 (quoting Second Reading, Committee of the Whole Report
No. 11, Comm. Prop. No. 11, 2 Proceedings, at 272). Other delegates were apparently alarmed that
the DHHL’s General Plan in 1976 called for a sum of $250 million in funding, and worried that the
proposed text of Article XII, Section 1 would force the state to meet that level of funding. Id. To
allay those concerns, Delegate De Soto made it clear that the proposed constitutional mandate
would only require the state to fund $1.3 to $1.6 million: the administrative and operating costs of
DHHL. “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.” Nelson I, 127 Hawai`i at 202, 277 P.3d at 296; see also id. (noting that
“the General Plan did not frame [the delegates’] discussion”).
In attempting to determine the actual operating expenses of the DHHL, and
mandating the State to pay the same, the circuit court did exactly what some delegates were afraid
sums’ for administrative and operating expenses only.” Nelson I, 127 Hawai`i at 202-03, 277 P.3d at 296-97. 8 The Court assumed that the $1.3 to $1.6 million figure could be adjusted for inflation. See Nelson I, 127 Hawai`i at 203 n.8, 277 P.3d at 297 n.8.
8
of, and exactly what Delegate De Soto promised would not happen. And, as discussed below, the
circuit court wrongly intruded in the constitutional prerogative of a co-equal branch of government.
In attempting to justify the circuit court’s disregard of the Supreme Court’s
mandate, Plaintiffs and DHHL assert in their respective answering briefs in this Court that the $1.3
to $1.6 million figure discussed in Nelson I did not represent the judicially manageable standard
because the delegates themselves supposedly recognized that the DHHL needed more than that
amount to fund its administrative and operating expenses. DHHL’s Answering Br. at 18; Plaintiffs’
Answering Br. at 23-24. Plaintiffs and DHHL rely on Delegate Sutton’s statement that DHHL’s
“need is more” than $1.3 to $1.6 million, to support their strained interpretation of the debates. But
Plaintiffs and DHHL misread Nelson I and the debates. The Court made clear that the “more”
mentioned by Delegate Sutton was a reference to the other three enumerated purposes under
Article XII, Section 1, not operating expenses. Beneath the discussion of the other three purposes,
the Court observed that “although ‘more’ than $1.3 to $1.6 million is mentioned, no further details
were provided as to how much more.” 127 Hawai`i at 203-04, 277 P.3d at 298-99. Accordingly,
the court could not determine how much “more” was needed by DHHL without answering a
political question.
B. The Circuit Court Wrongly Decided a Political Question. The circuit court, echoing Plaintiffs’ arguments, held below, “[t]he State’s position
that Article XII, section 1 only requires funding of $1.3-$1.6 million plus inflation would lead to
absurd results” because “$1.3-$1.6 million was plainly insufficient for DHHL to pay all of the
employees for the work it was doing in 1978.” ICA 87 at PDF 341. But that assertion ignores the
difference between the funding that is (in the court’s view) actually sufficient for DHHL, and the
funding that the circuit court was authorized to review under the Nelson I holding. The issue before
the circuit court was not whether, as a matter of fact, $1.3 to $1.6 million (“adjusted”) is
“sufficient” (in the court’s view) to fund the DHHL’s administrative and operating expenses. The
issue was whether the Constitution and Constitutional Convention provided any “judicially
discoverable and manageable standards” beyond $1.3 to $1.6 million “adjusted” such that the court
could permissibly measure DHHL’s funding against that benchmark. Nelson I answered that
9
question in the negative. The Legislature notes that any other answer would violate the
Constitution.9
If Plaintiffs and the circuit court were correct that Nelson I permitted the court to
determine DHHL’s actual operating and administrative expenses, then the Supreme Court’s
discussion of the $1.3 to $1.6 million figure in Nelson I was entirely superfluous. The Court would
have simply said that “the circuit court is authorized to determine the actual operating expenses of
the DHHL.” But instead, the Court held that “funding at or above the $1.3 to $1.6 million
envisioned in 1978 would be required.” Nelson I, 127 Hawai`i at 203, 277 P.3d at 297. And the
only indication the Court gave as to what would be required above the $1.3 to $1.6 million amount
was “the impact of factors such as inflation or increased collective bargaining costs.” Id. at 203,
277 P.3d at 297 n.8. Indeed, the Court itself observed that if the circuit court were to consider
“such factors [that] could provide the basis for increasing the required administrative funding
above the 1978 baseline identified by the delegates,” it could be “addressing issues … that
involved political questions.” Id. at 203, 277 P.3d at 297.10
Indeed, “addressing issues … that involved political questions” is exactly what the
circuit court did when it concluded that “DHHL needs more than $28 million annually for its
administrative and operating budget for fiscal year 2015-16, not including repairs.” ICA 87 at 511.
The Nelson I court clearly explained that the judiciary has the power to answer constitutional
questions “as long as there do not exist uncertainties surrounding the subject matter that have been
clearly committed to another branch of government to resolve.” 127 Hawai`i at 197, 277 P.3d at
291. Nelson I was equally clear that $1.3 to $1.6 million represented the “judicially discoverable
and manageable standards” that permitted the courts to consider Plaintiffs’ claim that DHHL’s
operating and administrative budget was underfunded. Beyond that amount, though, the actual
amount of DHHL’s funding needs represents the “uncertainties … that have been clearly
committed to another branch of government to resolve.” Id. Here, it is the Legislature’s function
9 The Legislature, out of respect for a co-equal branch of government, will not argue herein that Nelson I itself went too far, even as the Legislature reads Nelson I. 10 Although the Court in Nelson v. Hawaiian Homes Commission, 130 Hawai`i 162, 167, 307 P.3d 142, 147 (2013) (Nelson II) remarked in dicta that “the State must now fund DHHL’s administrative and operating expenses,” the issue of the scope of the Nelson I remand was not before the Court, was not briefed by the parties, and indeed, had not even been decided by the circuit court at the time Nelson II was decided.
10
“to determine policies and make laws to carry them out.” Ross v. Stouffer Hotel Co. (Hawai`i) Ltd.,
76 Hawai`i 454, 467, 879 P.2d 1037, 1050 (1994); see also Trustees of Office of Hawaiian Affairs
v. Yamasaki, 69 Haw. 154, 737 P.2d 436 cert. denied, 484 U.S. 898 (1987).11
The Court’s treatment of the other three purposes discussed in Article XII, Section
1 is illustrative. The Court held that judicial resolution of what constitutes sufficient funding for
those three purposes constituted a political question because “the delegates … did not discuss what
‘sufficient sums’ would be” as to those purposes. Nelson I, 127 Hawai`i at 204, 277 P.3d at 298.
Just as it did here, the circuit court could have easily held a trial to determine how much money
DHHL requires for “development of home, agriculture, farm and ranch lots,” “home, agriculture,
aquaculture, farm and ranch loans,” and “rehabilitation projects,” but the Nelson I Court concluded
that such judicial action is improper because of the lack of any discussion in the constitutional
debates about the cost of funding those purposes. The Court’s message was clear: any attempt to
stray from the $1.3 to $1.6 million benchmark discussed in the debates would be an attempt to
answer a political question.
It is, in the Legislature’s view, very important for this Court to consider the
practical and constitutional consequences if the circuit court were correct. Potentially every single
year, the Legislature would appropriate, and the circuit court could sit in review, and determine
what was “really sufficient.” As set forth herein, that is DHHL’s view as to what should happen
with the 2016 appropriation. It is hardly far-fetched to see that happening every year, were the
circuit court’s view correct. Such an unseemly process does (and would) unconstitutionally intrude
upon the sole constitutional prerogatives of a co-equal branch of government. Our system of
government works because each branch is charged with respecting the prerogatives of the other
two co-equal branches of government. The role the circuit court took on is inconsistent with that
basic principle envisioned by Hawaii’s framers (which vision was based on the vision and works of
our nation’s framers).
Because the circuit court vastly exceeded the Supreme Court’s mandate, and
because the circuit court improperly answered a political question, the Amended Order and
Judgment should be reversed.
11 The Court, in Yamasaki, was particularly sensitive to and cognizant of the political question doctrine.
11
II. TO THE EXTENT THAT THE CIRCUIT COURT ORDERED THE LEGISLATURE TO APPROPRIATE FUNDS, THAT ORDER VIOLATES THE SEPARATION OF POWERS.
The Hawaii Constitution vests “[t]he judicial power of the State . . . in one supreme
court, one intermediate court, circuit courts, district courts, and in such other courts as the
legislature may from time to time establish.” Haw. Const., art. VI, § 1. In elaborating on this
power, the Hawaii Supreme Court has held that “[t]he judicial power is an aspect of the power of a
sovereign over a certain geographic territory; it derives from a generally recognized duty of the
sovereign to regulate the relationship of individuals to the sovereign and the relationship of
individuals inter se.” Alamida v. Wilson, 53 Haw. 398, 400, 495 P.2d 585, 588 (1972). With
limited exceptions,12 however, the Hawaii Constitution does not contemplate that the judiciary may
regulate the relationship between different branches of the sovereign. The Hawaii Constitution also
does not contemplate that Hawaii courts should play any role in the passage of bills or the
appropriation process. In line with these limitations, there appear to be no Hawaii cases in which a
court has ordered the State of Hawaii or the Legislature to appropriate funds for any purpose, as the
Amended Order and Judgment arguably do.
We note at the outset that whether the circuit court in fact ordered the Legislature to
appropriate funds is not entirely clear from the record. The court’s original order stated that “the
sufficient sums that the legislature is constitutionally obligated to appropriate in general funds for
DHHL’s administrative and operating budget … is more than $28 million,” and included an order
that the State “shall prospectively fulfill [its] constitutional duties” and is “enjoined from violating
these obligations.” ICA 87 at PDF 536. In partially granting the State Defendants’ motion for
reconsideration, the court struck the language regarding the minimum funds the Legislature is
required to appropriate, saying instead that
the amount of general funds appropriated to DHHL for its administrative and operating budget for fiscal year 2015-2016 … is not sufficient. The State 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.
12 See, e.g., Haw. Const., art. III, § 19 (when sitting for the purpose of the impeachment of the governor or the lieutenant governor, the house of representatives has the sole power of impeachment and the senate has the sole power to try such impeachment with the chief justice presiding over the impeachment process).
12
ICA 91 at PDF 35. The court also removed any reference to an injunction from paragraph 5 of its
order, saying instead that “The defendants must fulfill their constitutional duty and trust
responsibilities.” Id.
The circuit court explained in its amending order that the court was “not ordering
an appropriation,” but rather “ordering that the State of Hawai`i must comply with its
constitutional duty to make sufficient sums available to DHHL for its administrative and operating
budget.” ICA 91 at PDF 32. The distinction, though, between ordering the Legislature to
appropriate funds, on the one hand, and ordering the State to “make sufficient funds available” on
the other, is at best, a subtle one, and at worst, a non-existent one. Findings that the amounts
appropriated are not constitutionally sufficient, combined with an order that the State comply with
its constitutional obligations, are inconsistent with the Constitution (even if they do not amount to
an explicit order to appropriate).
As a textual matter, the Constitution assigns the duty to fund DHHL to the
Legislature, and state funding could only come from a legislative appropriation. The circuit court
acknowledged as much when it held that in determining whether the legislature has fulfilled its
constitutional obligation “the State cannot rely on … money that is not actually appropriated.” ICA
87 at PDF 155. “Requir[ing]” “[t]he State [to] … fund DHHL’s administrative and operating
expenses” is tantamount to ordering a legislative appropriation, notwithstanding the circuit court’s
insistence that it was not doing so. ICA 91 at PDF 35. DHHL, for its part, reads the Amended
Order and Judgment as compelling legislative action; it has already sought to enforce the circuit
court’s Amended Order and Judgment by filing a motion for sanctions against the State
Defendants.13 That motion seeks $100,000 per day until the State Defendants “provide DHHL with
‘sufficient sums’” for DHHL’s operating budget.14 See DHHL’s Mot. for Sanctions (attached as
Exhibit 1), at 14.15
Regardless of the result of the sanctions motion, the fact that it was filed illustrates
the damage to the separation of powers caused by the circuit court’s decisions. The Legislature
determined the amount it would appropriate (which far exceeded $1.3 to $1.6 million adjusted for
13 The Motion was filed August 9, 2016. Preliminary hearings were held on October 14, 2016 and December 23, 2016. There have been approximately five pleadings relating to the motion filed by the various parties. The motion was not summarily rejected by the circuit court. 14 The hearing on DHHL’s motion for sanctions is scheduled for March 24, 2017. 15 DHHL’s Motion for Sanctions is found in the record at ICA 91 at PDF 742-761.
13
inflation), and DHHL decided to try to hold the State to answer, before a judge of the State, based
on that decision. Again, if the circuit court is correct, that type of trial, that type of attempting to
hold the State to answer for the budget decisions of the Legislature, could (and likely will) occur
every year.
Regardless, though, of whether the circuit court did or did not order the Legislature
to (directly or indirectly) appropriate state funds to fund DHHL, the circuit court’s actions in
subjecting the legislative process to a trial to determine the constitutional sufficiency of an
appropriation is a violation of the separation of powers.
A. The Hawaii Legislature Alone Holds the Power of the Purse. On several occasions, the Hawaii Supreme Court has ruled that “the enactment of
laws is the prerogative of the legislature and it is not for the judiciary to second-guess the
legislature or substitute its judgment for that of the legislature.” Washington v. Fireman's Fund Ins.
Cos., 68 Haw. 192, 202, 708 P.2d 129, 136 (1985) (quoting State v. Cotton, 55 Haw. 148, 151, 516
P.2d 715, 718 (1973)). Mindful of such prerogative and “the constitutional constraint on [its]
powers,” the Hawaii Supreme Court has also held that “[t]he legislative branch of government
alone holds the purse strings to the public treasury.” Von Holt v. Izumo Taisha Kyo Mission of
Haw., 44 Haw. 147, 368, 355 P.2d 40, 46 (1960) (emphasis added). The Amended Order and
Judgment exceeds the judicial prerogative.
There is also no merit to any suggestion that Article XII, Section 1 of the
Constitution redistributes the traditional balance between legislative and judicial power. That
provision recognizes that it is the role of the Legislature to appropriate funds for executive
departments by explicitly providing that the sums available to the DHHL for the various purposes,
including DHHL’s administrative and operating budget, be made “by appropriating the same in the
manner provided by law.” Haw. Const., art. XII, § 1 (emphasis added). The “manner provided by
law,” of course, is the normal appropriation process outlined by the Hawaii Constitution and
statutes, in which the judicial branch does not play any role.
In holding that the issue of the minimum funding for DHHL’s administrative and operating budget was justiciable, the Hawaii Supreme Court did not interpret Section 1 of Article XII as empowering the courts to order the appropriation of funds for the DHHL. Amicus has found no cases in Hawaii in which the remedy of ordering the enactment of a bill has
been ordered. As the Hawaii Supreme Court has noted: “It is not the role of the courts to rewrite
14
statutes or ordinances in order to cure constitutional defects. That would be an unconstitutional
exercise of legislative power.” State v. Bloss, 64 Haw. 148, 166, 637 P.2d 1117, 1130 (1981).
To the extent that the circuit court ordered the Legislature to make an appropriation
or otherwise legislate in a certain manner, the court’s Amended Order and Judgment is akin to a
writ of mandamus. See supra pp. 11-13. Courts in other jurisdictions have recognized that
mandamus is not available to force a state legislature to act. See, e.g., LIMITS v. President of The
Senate, 414 Mass. 31, 35, 604 N.E.2d 1307, 1309 (1992) (“The courts should be most hesitant in
instructing the General Court when and how to perform its constitutional duties. Mandamus is not
available against the Legislature.”); Trovillo v. Florida Dept. of Law Enf't, 762 So.2d 1038, 1039
(Fla. Dist. Ct. App. 2000) (“Mandamus is not the vehicle to litigate whether the statute is
unconstitutional.”). This is so, primarily, because the judicial branch lacks the ability to order the
legislative branch to act in a particular way. It is black letter law that while “courts are authorized
to interpret and declare the law, the judicial branch has no authority to direct a legislative body to
enact legislation.” 16A Am. Jur. 2d Constitutional Law § 279. Courts can declare statutes
unconstitutional, like legislatures can define the jurisdiction of courts. But, just as legislatures
cannot mandate that courts decide particular cases in particular ways, courts cannot mandate that
legislatures pass particular statutes. That is at the heart of the separation of powers.
Neither Section 1 of Article XII of the Hawaii Constitution nor the Nelson I
decision authorized the circuit court to mandate the Hawaii Legislature to appropriate any funds for
DHHL, or otherwise sit in judgment of the legitimate policy determinations made by the
Legislature. Instead, Section 1 of Article XII of the Hawaii Constitution expressly contemplates
that appropriations to DHHL be made “in the manner provided by law,” which is through the
appropriation process. The Hawaii Legislature respectfully requests that the Court hold that, to the
extent that the circuit court’s Amended Order and Judgment imposes an obligation—directly or
indirectly—on the Legislature to appropriate funds to DHHL, the circuit court’s order violates the
separation of powers and should be vacated.
The out-of-state cases identified by Plaintiffs and DHHL do not compel a contrary
outcome. Guinn v. Legislature of the State of Nevada, on which both rely extensively (see DHHL
Ans. Br. at 15, Plaintiff’s Ans. Br. at 28-29), explicitly states the opposite of Plaintiffs’ and
DHHL’s position: “Clearly, this court has no authority to … make appropriations.” Guinn, 71 P.3d
1269, 1274 (Nev. 2003). Rather, the case was about a constitutional procedural mechanism that
15
had the practical effect of undermining a constitutional spending mandate. The court ruled that the
former must give way to the latter.
Pannell v. Thompson, 91 Wash. 2d 591, 589 P.2d 1235 (Wash. 1979) (en banc)
likewise offers no support to Plaintiffs or DHHL. There, the court remarked, in dicta, that it “will
not direct the Legislature to act … unless creation of a program and/or the funding thereof is
constitutionally mandated. Such is not the case here.” Pannell, 589 P.2d at 599 (emphasis added).
The court therefore had no occasion to address a separation of powers crisis similar to the one that
the circuit court’s Amended Order and Judgment created here. Similarly, Gannon v. State, 368
P.3d 1024 (Kan. 2016) (discussed at pp. 30-31 of the Plaintiff’s Answering Brief) offers only dicta
in support of Plaintiffs’ and DHHL’s position. Although the Gannon court posited that it might be
proper for a court to order the Kansas legislature to make certain educational funding
appropriations, the court, possibly out of a desire to defer to the legislature, declined to enforce a
remedy until the legislature had the opportunity to act. The Wyoming Supreme Court did the same
in Campbell Cty. Sch. Dist. v. State, 907 P.2d 1238 (Wyo.), as clarified on denial of reh’g (Dec. 6,
1995).
Plaintiffs’ and DHHL’s briefs also ignore the cases in which state supreme courts
have concluded that the issue of educational funding should be left solely to the political branches.
In King v. State, 818 N.W.2d 1 (Iowa 2012), for example, the Iowa Supreme Court held that issues
surrounding school funding under the Iowa constitution’s “education clause” likely presented a
non-justiciable political question. See King, 818 N.W.2d at 16-17; accord, e.g., Bonner ex rel.
Bonner v. Daniels, 907 N.E.2d 516, 522 (Ind. 2009) (declining to create a cause of action for
plaintiffs under the Indiana constitution’s “education clause”).
Finally, DHHL is simply wrong to argue that “the federal constitution and federal
separation of powers principles are irrelevant to understanding the separation of powers pursuant to
the Hawai`i Constitution.” DHHL Ans. Br. at 13 n.7. The Hawaii Supreme Court routinely relies
on federal constitutional analysis when analyzing separation of powers issues that arise under
Hawaii law. In Yamasaki, for example, the Court reviewed and relied upon the allocation of
powers among the three branches of the federal government in resolving an intra-branch dispute
arising under Hawaii law. See Yamasaki, 69 Haw. at 170-71, 737 P.2d at 456 (“Like the federal
government, ours is one in which the sovereign power is divided and allocated among the three co-
equal branches.”); see also, e.g., Alakai Na Keiki, Inc. v. Matayoshi, 127 Hawai`i 263, 273, 277
16
P.3d 988, 998 (2012) (relying on federal separation-of-powers authority to resolve judicial-power
delegation issue arising under Hawaii law); AlohaCare v. Dep’t of Human Servs., 127 Hawai`i 76,
86-87, 276 P.3d 345, 655-56 (2012) (similar). For reasons that we have explained, it is clear that
judicial intervention in the legislative process would run afoul of the Hawaii Constitution and
principles embodied in the federal constitution.16
B. The Amended Order and Judgment Inappropriately Intrudes into the Legislative Process. The actions of the circuit court, if affirmed by this Court, represent a significant
intrusion into an area reserved by the Constitution for the Legislature. At the request of private
litigants and with the tacit consent of an agency of the State, the circuit court held a nine day bench
trial to determine whether the policy and funding priorities of the Legislature accorded with the court’s judgment of what constitutes “sufficient” funds for DHHL. Ultimately, though, “the power
to decide what the policy of the law shall be resides with the legislature, and if it has intimated its
will, that will should be recognized and obeyed.” Washington v. Fireman’s Fund Ins. Cos., 68
Haw. 192, 200-201, 708 P.2d 129, 135 (1985).
Practically speaking, the circuit court has all but seized the reins of the DHHL
funding process from the Legislature and converted a legislative task into primarily a judicial one.
If the Amended Order and Judgment are permitted to stand, in all future years, private plaintiffs
and the DHHL itself will have been given license to judicially challenge the Legislature’s
judgment regarding what constitutes “sufficient funds” for DHHL’s operating expenses.
Supplementing (and in many respects, superseding) the appropriations process discussed supra, the
court will act as a sort of Super Legislature, reviewing the DHHL’s funding demands against the
amount of money actually appropriated to determine whether, in the court’s judgment, the amount
16 Plaintiffs and DHHL are also wrong to assert that the “flexibility” of the separation-of-powers doctrine discussed in Koike v. Bd. of Water Supply, City & Cty. of Honolulu, 44 Haw. 100, 114, 352 P.2d 835, 843 (1960), permits the judiciary to order a legislative appropriation. Cf. Plaintiffs’ Ans. Br. at 17-18; DHHL Ans. Br. at 14. As the Koike court acknowledged, under the Hawaii Constitution, the co-ordinate branches “may not exercise powers not so constitutionally granted … unless such powers are properly incidental to the performance of it by its own appropriate functions.” 44 Haw. at 114, 352 P.2d at 843. It is well established, though, that “a judicially compelled enactment of legislation is not an incidental overlap; it is the very exercise of legislative power itself.” Cty. of San Diego v. State, 164 Cal. App. 4th 580. 79 Cal. Rptr. 3d 489, 501 (2008).
17
is sufficient. Legislative hearings and debate will be functionally replaced by an annual trial in the
circuit court.
Equally troubling, for separation-of-powers purposes, is the method by which the
circuit court arrived at the dollar amount it concluded was “sufficient.” It appears from the record
that the circuit court arrived at the $28 million amount solely by reference to the DHHL’s own
estimation of what constitutes “sufficient funding.” See ICA 87 at PDF 510-11 (concluding that
“DHHL’s determinations as to its administrative and operating needs were made with care,
expertise, and sound judgment”). In the normal course, the agency presents its budget proposals to
the Governor for the Governor’s review, and this executive branch review includes a review by the
Department of Budget and Finance. Thus, only after these initial vettings by the executive branch
does the agency, in the normal course, present its request to the Legislature. The Legislature would
then consider the amount requested and arrive at its own policy-based judgment as to what amount
of funding to provide. Here, the circuit court has injected itself in a funding dispute between the co-
ordinate branches, and taken the side of the agency’s demand, at the expense of legislative
prerogative.
Lest Plaintiff-Appellees argue we are being alarmist, the circuit court has already
indicated its intention to continuously review and second-guess the Legislature’s judgment of
what constitutes “sufficient” funding for DHHL. At a preliminary hearing on DHHL’s motion for
sanctions (discussed supra pp. 12-13), the court acknowledged that the Legislature had
appropriated approximately $17 million to DHHL, which the court characterized as “funding that
had not previously been made available … for [DHHL’s] administrative and operating expenses.”
Transcript of Hearing at 6, Nelson v. Hawaiian Homes Commission, No. 07-1-1663 (Oct. 14, 2016)
(attached as Exhibit 2).17 The court went on, though, to question “why the State believes
appropriating the additional funds that it did, meets [the State’s] Constitutional mandate under
Article 12 [sic] Section 1,” id., and sought “additional briefing or explanation” from counsel for the
State to answer that question. Confirming its permanent supervisory position over the Legislature,
the court then asked for, “from this point forward, what policy determinations or what the State
17 The Legislature respectfully requests that the Court take judicial notice of the transcript of the hearing on DHHL’s Motion for Sanctions. See Haw. R. Evid. 201(b) (permitting courts to take judicial notice of facts “capable of accurate and ready determination by resort to sources whose accuracy cannot reasonably be questioned”).
18
plans to do … to comply with the Constitutional mandate to make sufficient sums available.” Id.
(emphasis added). In other words, the court foresaw the possibility of periodic (perhaps annual)
judicial review of the Legislature’s “justifications” for its policy and spending decisions. The
Legislature is particularly concerned that a constitutional crisis could result if this were to occur.
While the delegates to the Constitutional Convention may have intended to remove
a small degree of legislative discretion from the decision to fund DHHL, there is no indication in
the text of the Constitution or the debates at the convention that the delegates intended to turn the
roles of the respective branches of government on their heads, and replace the traditional function
of the Legislature with an unprecedented level of judicial intervention in legislative affairs.
C. The Amended Order And Judgment Do Not Give Appropriate Deference to the Legislative Process.18 The Hawaii Supreme Court in Nelson I held that in accordance with the political
question doctrine, the circuit court could only review “the minimum required contribution”
appropriated to DHHL for administrative and operating purposes without taking into account non-
justiciable considerations such as “how many lots, loans, and rehabilitation projects (and their
scope) DHHL must provide.”127 Hawai`i at 202-03, 277 P.2d at 296-97. While the Court found
that “[a]t a minimum, funding at or above the $1.3 to $1.6 million envisioned in 1978 would be
required” (adjusted to reflect the impact of inflation or increased bargaining costs), the Court did
not specify the standard of review that the circuit court should use in deciding whether a specific
appropriation was sufficient or not. Id. The Legislature has appropriated to DHHL $9,632,000 per year for administrative
and operating purposes in fiscal years 2013-14, 2014-15, and 2015-16. This constitutes over sixty-
five percent more than the “$1.6 million envisioned in 1978,” adjusted for inflation.19 Yet the
circuit court rejected the inflation plus rationale behind the $9.6 million appropriation as “absurd,”
rejected the independent auditors’ category of “administrative and support services” as inaccurate,
and heavily relied on the testimony of two witnesses in determining DHHL administrative and
18 The Legislature believes the Court need not reach the standard of review question, if it rules in favor of the State on points set forth above. The Legislature believes the circuit court should not be reviewing the budget decisions of the Legislature at all, except arguably in the very limited area set forth above. 19 Using the Consumer Price Index (“CPI”) inflation calculator in the U.S. Bureau of Labor Statistics website, $1.6 million in 1978 has the same buying power as $5.8 million in 2015. See CPI Inflation Calculator, available at http://data.bls.gov/cgi-bin/cpicalc.pl.
19
operating needs post 2012. ICA 87 at PDF 510-11. This is inconsistent with both the Nelson I
decision’s holding that only the minimum amount of funding for administrative and operating
expenses was justiciable (as opposed to a higher amount) and the level of deference generally
given to legislative acts. The justiciability of an issue does not entail that courts may simply
substitute their judgment for that of the Legislature on the issue.
The general rule is that unless “fundamental rights or suspect classifications are
involved, the rational basis standard is used” to determine whether a statute passes constitutional
muster or not. Washington, 68 Haw. at 202, 708 P.2d at 136. Even in the takings context, “[c]ourts
will not substitute their judgment for the legislature’s judgment as to what constitutes a public use
unless the use be palpably without reasonable foundation.” Hawaii Hous. Auth. v. Lyman, 68 Haw.
55, 68, 704 P.2d 888, 896 (1985) (quotation marks and citations omitted). As the Hawaii Supreme
Court has explained
“[T]he power of courts to declare a statute unconstitutional is subject to two guiding principles of decision which ought never to be absent from judicial consciousness. One is that courts are concerned only with the power to enact statutes, not with their wisdom. The other is that while unconstitutional exercise of power by the executive and legislative branches of the government is subject to judicial restraint, the only check upon our own exercise of power is our own sense of self-restraint. For the removal of unwise laws from the statute books appeal lies, not to the courts, but to the ballot and to the processes of democratic government.’ This doctrine of judicial self-restraint became the beacon by which the Supreme Court steered its way through the troubled waters of questioned legislation. ‘This restriction upon the judicial function, in passing on the constitutionality of statutes, is not artificial or irrational. A state legislature, in the enactment of laws, has the widest possible latitude within the limits of the Constitution. In the nature of the case it cannot record a complete catalogue of the considerations which move its members to enact laws. In the absence of such a record courts cannot assume that its action is capricious, or that, with its informed acquaintance with local conditions to which the legislation is to be applied, it was not aware of facts which afford reasonable basis for its action. Only by faithful adherence to this guiding principle of judicial review of legislation is it possible to preserve to the legislative branch its rightful independence and its ability to function.”
. . . .
20
The duty of the courts is restricted to the determination of the constitutionality of appropriations; which in practice amounts to this—the courts will give the determination of the legislature the benefit of any doubt.
Koike v. Bd. of Water Supply, City & Cnty. of Honolulu, 44 Haw. 100, 103-04, 107, 352 P.2d 835,
838, 840 (1960) (quoting Carmichael v. S. Coal & Coke Co., 301 U.S. 495, 510 (1937)). While the
Hawaii Supreme Court in Nelson I did not have an opportunity to address the issue of the standard
of review applicable to a determination by the Legislature that it has appropriated sufficient funds
for DHHL’s administrative and operating budget, separation of powers requires deference to a co-
equal branch of government’s factual and policy findings in this respect. Here, the Amended Order
and Judgment gives no deference to the legislative process and leaves no room for the Legislature
to make factual and policy determinations of its own as to the sums that should be appropriated to
DHHL under Section 1 of Article XII of the Hawaii Constitution.20
CONCLUSION
For all of the foregoing reasons, the Hawaii Legislature respectfully requests that
this Court reverse the Amended Order and Judgment.
DATED: Honolulu, Hawaii, February 27, 2017. /s/ Mark J. Bennett MARK J. BENNETT Attorney for HAWAII STATE LEGISLATURE
20 Plaintiffs have filed a cross-appeal of aspects of the Amended Order and Judgment; particularly the circuit court’s partial grant of the State Defendants’ Motion for Reconsideration. The cross-appeal raises two points of error, neither of which is meritorious. Plaintiffs first assert that the State Defendants’ motion was improperly repetitive of arguments already rejected by the circuit court. But the trial court’s authority to grant a motion for reconsideration is reviewed “according to the abuse of discretion standard.” Amfac, Inc. v. Waikiki Beachcomber Inv. Co., 74 Haw. 85, 114, 839 P.2d 10, 26 (1992). “To constitute an abuse of discretion a court must have clearly exceeded the bounds of reason or disregarded rules or principles of law or practice to the substantial detriment of a party litigant.” Id. (emphasis added). As Plaintiffs never identify how they were prejudiced by the circuit court’s purported abuse of discretion, they do not come close to meeting this demanding standard. As for the second issue in the cross-appeal—that the State Defendants waived their objection to the circuit court’s grant of injunctive relief—the State Defendants’ argument is that the circuit’s original order and judgment violated the separation of powers, and therefore exceeded the court’s jurisdiction. “Lack of subject matter jurisdiction can never be waived by any party at any time.” Chun v. Employees’ Ret. Sys. of Hawaii, 73 Haw. 9, 13, 828 P.2d 260, 263 (1992); see also, e.g., Pacemaker Diag. Clinic of Am., Inc. v. Instromedix, Inc., 725 F.2d 537, 544 (9th Cir. 1984) (“The component of the separation of powers rule that protects the integrity of the constitutional structure … cannot be waived.”).
516888.1 WATANABE ING LLP
MEL VYN M. MIY AGI BRIAN A. KANG ROSS T. SHINYAMA First Hawaiian Center
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999 Bishop Street, 23rd Floor Honolulu, HI 96813
OR\G\NAL #1624-0 #6495-0 #8830-0
Telephone No.: (808) 544-8300
Attorneys for Defendants
FIRST CfRCUIT COURT STATE OF HAWAII
FILED
20/6 3: 1,8
F. DrAKE CLERK
HA WAIIAN HOMES COMMISSION, THE DEPARTMENT OF HAWAIIAN HOME LANDS, JOBIE MASAGATANI, in her official capacity as Chair of the Hawaiian Homes Commission, WILLIAM K. RICHARDSON, 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 ....... =
en --(./
) --IN THE CIRCUIT COURT OF THE FIRST CIRCUIT ::::-c: G)
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STATE OF HAWAII I (; ,
RICHARD NELSON 1lI, et al.
Plaintiffs,
vs.
HA W AllAN HOMES COMMISSION, et aI. ,
Defendants.
CIVIL NO. 07-1-1663
DEFENDANTS HAWAIIAN HOMES COMMISSION, THE DEPARTMENT OF HAWAlJAN HOME LANDS, JOBIE MASAGATANI, IN HER OFFICIAL CAPACITY AS CHAIR OF THE HA W AllAN HOMES COMMISSION, WILLIAM K. RICHARDSON, MICHAEL P. KAHIKlNA, DOREEN NAPUA GOMES, GENE ROSS DAVIS, WALLACE A. ISHIBASHI, DAVID B. KAAPD, AND WRENN WESCOATT'S, IN THEIR OFFICIAL CAPACITIES AS
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HEARING: Date: \4 '2D\b Time: i\,. to 0\.. vb.. The Honorable Jeannette H. Castagnetti
(IJ
Tria l: June 29, 2015:re.D .. :(V'€**-V The Honorable Jednette Castagnetti
ICA 91 at PDF 742EXHIBIT 1
MEMBERS OF THE HAWAIIAN HOMES COMMISSION, MOTION FOR SANCTIONS AGAINST THE STATE DEFENDANTS; MEMORANDUM IN SUPPORT OF MOTION; DECLARATION OF JOBIE MASAGATANI; EXHIBITS "1" AND "2"; DECLARATION OF MELVYN M. MIY AGI, ESQ,; EXHIBITS "3" - "12"; NOTICE OF HEARING AND CERTIFICATE OF SERVICE
DEFENDANTS HAWAIIAN HOMES COMMISSION, THE DEPARTMENT OF HAW AllAN HOME LANDS, JOBIE MASAGATANI, IN HER OFFICIAL CAPACITY
AS CHAIR OF THE HAWAIIAN HOMES COMMISSION, WILLIAM K. RICHARDSON, MICHAEL P. KAHIKINA, DOREEN NAPUA GOMES, GENE ROSS
DAVIS, WALLACE A. ISHIBASHI, DAVID B. KAAPU, AND WRENN WESCOATT'S, IN THEIR OFFICIAL CAPACITIES AS MEMBERS OF THE HAWAIIAN HOMES
COMMISSION, MOTION FOR SANCTIONS AGAINST THE STATE DEFENDANTS
COME NOW Defendants Hawaiian Homes Commission, The Department of Hawaiian
Home Lands, lobie Masagatani, in her official capacity as Chair of the Hawaiian Homes
Commission, William K. Richardson, Michael P. Kahikina, Doreen Napua Gomes, Gene Ross
Davis, Wallace A. Ishibashi, David B. Kaapu, and Wrenn Wescoatt, in their official capacities as
Members of the Hawaiian Homes Commission (collectively, the "DHHL Defendants"), by and
through their undersigned counsel, and hereby move this Court for an award of sanctions against
Defendants State ofHawai 'i and its Director of Finance, in his official capacity as the State
Director of Finance (collectively, the "State Defendants").
For the reasons discussed in the attached Memorandum in Support of Motion, the DHHL
Defendants respectfully request that this Court grant this Motion and issue an order sanctioning
the State Defendants in the amount of ONE HUNDRED THOUSAND AND NOll 00
DOLLARS ($100,000.00) per day until the State Defendants fulfill their constitutional duty
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under article XII, section 1 of the Hawai'i State Constitution ("State Constitution") by providing
DHHL with "sufficient sums" - i.e., "more than $28 million" - for its fiscal year ("FY") 2016
administrative and operating budget.
This Motion is brought pursuant to Rule 7 of the Hawai'i Rules of Civil Procedure, and
Rules 3, 7 and 7.1 of the Rules of the Circuit Courts of the State of Hawai'i, and is based upon
the attached Memorandum in Support of Motion, the attached Declarations, and exhibits attached
thereto, and the entire record and files herein.
DATED: Honolulu, Hawaii, August 5, 2016.
MELVYN BRIAN A. ROSS T. SHIN
Attorneys for Defendants 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, 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
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IN THE CIRCUIT COURT OF THE FIRST CIRCUIT
STATE OF HAWAII
RICHARD NELSON III, et al.
Plaintiffs,
vs.
HAWAIIAN HOMES COMMISSION, et aI.,
Defendants.
CIVIL NO. 07-1-1663 (lHC)
MEMORANDUM IN SUPPORT OF MOTION
MEMORANDUM IN SUPPORT OF MOTION
Defendants Hawaiian Homes Commission, The Department of Hawaiian Home Lands
("DHHL"), 10bie Masagatani, in her official capacity as the Chair of the Hawaiian Homes
Commission, William K. Richardson, Michael P. Kahikina, Doreen Napua Gom,es, Gene Ross
Davis, Wallace A. Ishibashi, David B. Kaapu, and Wrenn Wescoatt, in their official capacities as
Members of the Hawaiian Homes Commission (collectively, the "DHHL Defendants"), by and
through their undersigned counsel, hereby submit their Memorandum in Support of their Motion
for Sanctions against the State Defendants I.
For the reasons discussed infra, the DHHL Defendants respectfully request that this Court
grant the Motion and issue an order sanctioning the State Defendants in the amount of ONE
HUNDRED THOUSAND AND NOll 00 DOLLARS ($100,000.00) per day until the State
Defendants fulfill their constitutional duty under article XII, section 1 of the Hawai'i State
Constitution ("State Constitution") by providing DHHL with "sufficient sums" - i.e., "more than
$28 million" - for its fiscal year ("FY") 2016 administrative and operating budget.
I The "State Defendants" as used herein shall collectively refer to Defendants State of Hawai'i and its Director of Finance, in his official capacity. The "State Defendants" shall also be referred to herein as the "State".
ICA 91 at PDF 745
I. INTRODUCTION
The State has a long and repeated history of failing to fulfill its constitutional duty under
article XII, section 1 ofthe State Constitution to provide DHHL with "sufficient sums" for its
administrative and operating budget. Indeed, as this Court concluded after an eight day non-jury
trial, the State has failed to comply with its constitutional duty in every fiscal year since at least
1992. See Findings of Fact, Conclusions of Law, and Order, dated November 27,2015 ("FOFs,
COLs, and Order") at COL attached as Exhibit "3" to the Declaration of Melvyn M., Esq.
("Miyagi Dec.").
In the midst of the State's ongoing constitutional violations, the Hawai'i Supreme Court
in Nelson v. Hawaiian Homes Comm'n, 127 Hawai'i 185,277 P.3d 279 (2012) ("Nelson I")
instructed this Court to determine what is a "sufficient sum" under article XII, section 1 of the
State Constitution. Following the Hawai'i Supreme Court's instruction, this Court determined
that a "sufficient sum" for DHHL's FY 2016 administrative and operating budget was "more
than $28 million." FOFs, COLs, and Order at FOF This Court ordered the State to "fulfill
its constitutional duty by appropriating sufficient general funds to the [DHHL] for its
administrative and operating budget." id. at Order Moreover, this Court expressly advised
the State that "[t]here is still time for the State ofHawai'i to become in compliance during this
fiscal year." Order Denying in Part and Granting in Part the State Defendants' Motion for
Reconsideration of, or to Alter or Amend, the Judgment and Order, Filed December 21,2015
("Reconsideration Order"), attached as Exhibit "4" to the Miyagi Dec.
Notwithstanding the above, the State did not comply with this Court's order or its
constitutional duty under article XII, section 1 of the State Constitution in the 2016 legislative
session. The State did not provide DHHL with "sufficient sums" - i.e., "more than $28 million"
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- for its FY 2016 administrative and operating budget. Instead, the State only appropriated
$17,144,374 in general funds to DHHL for its FY 2016 administrative and operating budget. To
arrive at this insufficient sum, the State exercised its non-existent discretion to eliminate and/or
reduce certain administrative and operating expenses that DHHL not only had actually incurred
during FY 2016, but that fell under Department of Budget & Finance ("B&F") object codes that
this Court has already found are appropriate administrative and operating expenses.
The State's latest is simply more of the same. It is obvious that the State does not believe
it has to fulfill its constitutional duty under article XII, section 1 of the State Constitution to
provide DHHL with "sufficient sums" for its FY 20 16 (or any fiscal year for that matter)
administrative and operating budget. It is also obvious that the State has no respect for this
Court's order and authority as a co-equal branch of government. Indeed, the State has not, as
this Court had hoped, "take[n] seriously [this Court] stating that the State has not lived up to its
constitutional duties." See infra.
Based on the foregoing, and as discussed more infra, the DHHL Defendants respectfully
submit that this Court must exercise its inherent authority to enforce its orders and sanction the
State in the amount of $1 00,000.00 per day until the State Defendants fulfill their constitutional
duty under article XII, section 1 of the State Constitution, by providing DHHL with "sufficient
sums" - i.e., "more than $28 million" - for its FY 2016 administrative and operating budget.
The requested monetary sanctions are appropriate and necessary to ensure that the State's
ongoing constitutional violations do not go unremedied.
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II. RELEVANT BACKGROUND
1. The State's long history of failing to fulfill its constitutional duty under article XII, section 1 of the State Constitution to provide DHHL with "sufficient sums" for its administrative and operating budget.
Before the Hawai'i Constitutional Convention of 1978 ("1978 Constitutional
Convention"), the State had the discretion to fund (or not fund) the DHHL. See Nelson I, 127
Hawai'i at 189,277 P.3d at 283. The last sentence of the then article XI, section 1 of the State
Constitution, specifically read:
The proceeds and income from Hawaiian home lands shall be used only in accordance with the terms of said Act, and the legislature may, from time to time, make additional sums available for the purposes of said Act by appropriating the same in the manner provided by the law.
Id. (emphasis added).
In 1979, after and as a result of the 1978 Constitutional Convention, the electorate of the
State ofHawai'i voted to amend article XI, section 1 of the State Constitution to remove the
discretionary language above to "mandatory funding language". See Nelson I at 189,277 P.3d
at 283 (emphasis added). The amended constitutional provision, which was also renumbered to
article XII, section 1, read and still reads:
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.
State Constitution, article XII, section 1 (emphases added).
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This amendment was necessary because "the State was not much more successful than
the federal government in fulfilling its constitutional duties." Nelson I at 189,277 P.3d at 283.
Indeed, Delegate De Soto aptly stated during the 1978 Constitutional Convention that DHHL
continues to have "a monumental and eternal dilemma in funding." Debates in the Committee of
the Whole on Hawaiian Affairs Comm. Prop. No. 11, in Proceedings of the Constitutional
Convention of Hawaii of 1978, Volume II (1980) ("2 Proceedings") at 410-411. Delegate Ontai
similarly expressed:
The Hawaiian homes department and the act were and are the most neglected part of the State of Hawaii, the most neglected department. It was woefully lacking in funds at its inception, and for the past 50 years and even today, it lacks funds to run the department properly, lacks funds to construct homes and facilities necessary to service existing and future applicants.
2 Proceedings at 422 (emphasis added).
Notwithstanding the constitutional amendment, the State continued to violate its
constitutional duty to provide sufficient sums to DHHL. The Hawai'i Supreme Court in Nelson I
stated:
The State has failed, by any reasonable measure, under the undisputed facts, to provide sufficient funding to DHHL. The State's track record in supporting DHHL's success is poor as evidenced by the tens of thousands of qualified applicants on the waiting lists and the decades-long wait for homestead lots.
Id. at 205, 277 P.3d at 299 (internal quotation marks, alterations in original, and citation omitted)
(emphasis added)
The Hawai'i Supreme Court observed that "[ w ]ith the benefit of 35-90 years of hindsight,
it is clear that DHHL is underfunded and has not been able to fulfill all of its constitutional
purposes." Id.
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2. This Court concludes that the State has not fulfilled its constitutional duty under article XII, section 1 of the State Constitution to provide DHHL with "sufficient sums" for its administrative and operating budget.
This Court independently found and concluded after an eight day non-jury trial that
"[s]ince 1978, the legislature has not appropriated enough general funds to pay for DHHL's
administrative and operating expense." FOFs, COLs, and Order at FOF This Court also
concluded:
The legislature has failed to appropriate sufficient sums to the Department of Hawaiian Home Lands for its administrative and operating budget in violation of its constitutional duty to do so. This failure includes every fiscal year since at least 1992.
Id. at COL (emphasis added); see also id. at Order ("The State of Hawai'i has failed to
provide sufficient funds to the [DHHL] 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.").
This Court also made several pertinent FOFs and COLs relating to DHHL's
administrative and operating expenses:
• Between fiscal years 2008 and 2014, DHHL's actual administrative and operating budget expenses have ranged between $16 million and $19.6 million. The actual administrative and operating expenses2 calculated by DHHL exclude costs associated with homestead lot development, loans, and expenditures from the Native Hawaiian Rehabilitation Fund. See id. at FOF 3
2 This Court relied upon, inter alia, B&F's own budget instructions to define administrative and operating expenses to "include recurring costs of operating, supporting and maintaining authorized programs, including costs for personnel salaries and wages, employee fringe benefits, lease payments, supplies, materials, equipment, motor vehicles, rent, building expenses, utilities, communications, advertising, general office expenses, travel, insurance, legal fees, consultants and other professional fees, and repair and maintenance." Id. at FOF see also Trial Exhibits B-31 and B-32, attached as Exhibits "5" and "6" to the Miyagi Dec.
3 This Court relied upon Trial Exhibit B-88 to determine DHHL's actual administrative and operating expenses for FYs 2008-2014. See id.; see also Trial Exhibit B-88, attached as Exhibit "7" to the Miyagi Dec. Trial Exhibit B-88 listed all ofDHHL's actual administrative and operating expenses for FY s 2008-2014 by B&F object code and description. See id.
9
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• In fiscal years 2013 and 2014, DHHL's administrative and operating expenses exceeded $18 million annually. See id. at FOF
• For fiscal year 2014-15, DHHL determined that it needed $27,122,825 for its administrative and operating budget, not including repairs. See id. at FOF
• For fiscal year 2015-16, DHHL determined that it needs $28,478,966 for its administrative and operating budget, not including repairs. See id. at FOF
This Court found DHHL's above determinations as to its administrative and operating needs to
be made with care, expertise and sound judgment. See id. at FOF
3. This Court orders the State to fulfill its constitutional duty under article XII, section 1 of the State Constitution by providing DHHL with sufficient sums for its FY 2016 administrative and operating budget.
Pursuant to the Hawai'i Supreme Court's instruction in Nelson I, this Court determined
that a "sufficient sum" for DHHL's FY 2016 administrative and operating budget was "more
than $28 million." Id. at FOF ("DHHL needs more than $28 million annually for its
administrative and operating budget for fiscal years 2015-16, not including repairs."). It then
ordered the State to do the following, in relevant part:
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 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.
* * *
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5. The Defendants must fulfill their constitutional duty and trust responsibilities.
See id. at Order 3, and 5, as amended by Order Amending Order Issued November 27,2015,
filed March 8, 2016 ("Amending Order"), and attached as Exhibit "8" to the Miyagi Dec.
(emphases added).
Though this Court explained that it was not ordering the legislature to appropriate funds,
this Court made it expressly clear in its Reconsideration Order that it was "ordering [] the State
[to] comply with its constitutional duty to make sufficient sums available to DHHL for its
administrative and operating budget." ld. at 3, During its oral ruling on the motion for
reconsideration, this Court rejected the notion that it could only grant declaratory relief in this
case.4 This Court explained that:
when 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 though 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.
Id. at 11 :2-11, Exhibit "9" to the Miyagi Dec. (emphasis added).
This Court also explained during its oral ruling that it "takes seriously a claim of a
constitutional foul or the Court overstepping its bounds by a co-equal branch of government, just
as I would hope that any other co-equal branch of government would take seriously courts
stating that the State has not lived up to its constitutional duties." Id. at 11: 13-18 (emphasis
4 See Transcript of Proceedings re: Motion for Reconsideration, dated February 29,2016 at 7: 10-16 ("Reconsideration Transcript"), attached as Exhibit "9" to the Miyagi Dec. ("Respectfully, the Court does not agree that the only available judicial remedy is declaratory when the duty of the State at issue is a constitutional requirement or an affirmative duty to provide sufficient or adequate funding to a State agency and, in particular, a State agency that is tasked with fiduciary duties and responsibilities to trust beneficiaries.").
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added). This Court advised the State Defendants that "[tlhere is still time for the State of
Hawai'i to become in compliance during this fiscal year." Reconsideration Order at 3,
(emphasis added).
4. The State again fails to provide DHHL with "sufficient sums" for its FY 2016 administrative and operating budget during the 2016 legislative session.
On lune 23, 2016, Governor David Ige signed into law act 124, HB 1700 HD 1 SD1
CD1, relating to the State budget. Pursuant to act 124, the State only appropriated $17,144,374
in general funds to DHHL for its FY 2016 administrative and operating budget. See Gov. Msg.
No. 1225 at 29, dated lune 23, 2016, attached as Exhibit "10" to the Miyagi Dec.; see also id. at
68-69.
Before the enactment of act 124, the DHHL Defendants advised Governor Ige and the
legislature that the $17,144,374 general fund appropriation was insufficient to coverDHHL's
administrative and operating expenses for FY 2016 and contrary to this Court's express order.
See Letter from Chair lobie Masagatani to Governor David Ige, dated 411112016, attached as
Exhibit "1" to the Declaration of lobie Masagatani ("Masagatani Dec."); Letter from Ms.
Masagatani to lill Tokuda, Chair of the Senate Committee on Ways and Means, dated 4115116,
attached as Exhibit "2" to the Masagatani Dec. To arrive at the insufficient sum, the State
Defendants eliminated and/or reduced DHHL's administrative and operating expenses5 from
certain B&F object codes.6 Notably, each B&F object code that the State eliminated and/or
5 The administrative and operating expenses that the State eliminated and/or reduced were actually incurred by DHHL and had to instead be paid for out ofDHHL's special and trust funds. See Masagatani Dec. at
6 The State eliminated and/or reduced administrative and operating expenses from the following B&F object codes: 5000 (Electricity); 5010 (Electricity-Subdivisions); 5200 (Water); 521 0 (Water-Subdivisions); 5825 (Maintenance -Equipment, Buildings, Etc.; 5840
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reduced was identified in Trial Exhibit B-88 and found by this Court to be an appropriate
administrative and operating expense. See Trial Exhibit B-88, Exhibit "7" to the Miyagi Dec.
DHHL explained to Governor Ige and the legislature:
Exclusion of certain budget codes and cost items is contrary to the Court's determination. The Court found those expenditure object codes to be administrative and operating costs. Therefore, it is not necessary to exclude those expenditure codes in the Governor's Message. The Court determined that those items were administrative and operating expenses in determining what the sufficient sums were for FY 2016.
See Exhibit 1 to the Masagatani Dec. at 3.
Despite DHHL's best efforts, the State still eliminated and/or reduced DHHL's
administrative and operating expenses. The State proceeded to appropriate only $17,144,374 in
general funds to DHHL for its FY 2016 administrative and operating budget.
III. DISCUSSION
1. The State violated its constitutional duty by not providing DHHL with "sufficient sums" for its FY 2016 administrative and operating budget. The State also did not comply with this Court's order.
The Hawai'i Supreme Court in Nelson I instructed this Court to determine what is a
"sufficient sum" under article XII, section 1 of the State Constitution for DHHL's administrative
and operating budget. Following the instruction of the Hawai'i Supreme Court, this Court held
an eight-day non-jury trial and meticulously drafted a 40 page, 145 paragraph FOFs, COLs, and
Order on this specific issue. In reviewing past fiscal years, this Court reached the obvious
conclusion:
The legislature has failed to appropriate sufficient sums to the Department of Hawaiian Home Lands for its administrative and
(Maintenance-Unencumbered Land & Other); 5855 (Maintenance-Subdivision); and 7110 (Services on a Fee Basis). See Masagatani Dec. at
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operating budget in violation of its constitutional duty to do so. This failure includes every fiscal year since at least 1992.
FOFs, COLs, and Order at COL 'Il16.
Having determined that the State had violated its constitutional duty under article XII,
section 1 of the State Constitution for at least the past 23 fiscal years, this Court next turned its
attention to the then current FY 2016. This Court determined that a "sufficient sum" for
DHHL's then current FY 2016 administrative and operating budget was "more than $28
million." Id. at FOF 'Il44. This Court explicitly ordered the State to "fulfill its constitutional duty
by appropriating sufficient general funds to the [DHHL] for its administrative and operating
budget." ld. at Order 'Il2; see also supra. Moreover, this Court expressly advised the State that
"[tlhere is still time for the State of Hawai'i to become in compliance during this fiscal
year." Reconsideration Order at 3, 'Il3.
Notwithstanding all of the above, the State did not comply with this Court's order or its
constitutional duty under article XII, section 1 of the State Constitution in the 2016 legislative
session. The State did not provide DHHL with "sufficient sums" - i.e., "more than $28 million"
- for its FY 2016 administrative and operating budget. Instead, the State continued its long and
repeated history of defiance and failures and only appropriated $17,144,374 in general funds to
DHHL for its FY 2016 administrative and operating budget. Simply stated, the State violated
this Court's order and its constitutional duty by failing to provide DHHL with "more than $28
million" for its FY 2016 administrative and operating budget.
The egregiousness of the State's actions, and the complete lack of respect that the State
has for its constitutional duty and this Court's order and authority as a co-equal branch of
government, is demonstrated by the administrative and operating expenses that the State
eliminated and/or reduced to arrive at the insufficient sum of$17,144,374. The people of the
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State of Hawai' i in 1979 stripped the State of any discretion it had to fund DHHL' s
administrative and operating budget under article XII, section 1 of the State Constitution. See
Nelson I, 127 Hawai'i at 189,277 P.3d at 283 ("[T]hrough [the 1979 constitutional] amendment,
the discretionary funding language was changed to mandatory funding language."); Stand.
Comm. Rep. No. 56 in 1 Proceedings of the Constitutional Convention ofHawai'i of 1978
(1980), at 630 ("Your committee proposal makes it expressly clear that the legislature is to fund
DHHL for purposes which reflect the spirit and intent of the act. Your Committee decided to no
longer allow the legislature discretion in this area.").
Consequently, the State did not have the discretion under article XII, section 1 of the
State Constitution to eliminate and/or reduce DHHL's FY 2016 administrative and operating
expenses. It especially did not have the discretion under article XII, section 1 of the State
Constitution to reduce the amount that this Court had already determined was a "sufficient sum."
It also did not have the discretion to eliminate and/or reduce administrative and operating
expenses that this Court had already found were appropriate. 7 Instead, after this Court concluded
that the State had repeatedly violated the State Constitution and determined that a "sufficient
sum" for DHHL's FY 2016 administrative and operating budget was "more than $28 million[,J"
the State was constitutionally required to provide DHHL with "more than $28 million" for its FY
2016 administrative and operating budget. The fact that the State did otherwise not only violated
this Court's order, but also demonstrated a complete lack of respect to this Court and its role to
7 The State's belated and self-serving attempt in the 2016 legislative session to determine a "sufficient sum" for DHHL's FY 2016 administrative and operating budget is specious given that the State admitted during trial that it did not have a definition of "sufficient sums" and that it did not know what was sufficient for DHHL's administrative and operating budget. See Testimony ofN eal Miyahara, Transcript of the July 7, 2015 Trial Proceedings (P .M. Session), at 14:24-15:25, attached as Exhibit "II" to the Miyagi Declaration. Indeed, the State took the position at trial that it was looking to this Court for a definition of "sufficient sum." See id. at 25: 18-22.
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supervise the State's legislative activities where constitutional mandates and rights are involved.
See Schwab v. Ariyoshi, 58 Haw. 25, 37, 564 P.2d 135, 143 (1977) (recognizing the courts'
supervisory role where legislative activities involve a "constitutional mandate" or results in "a
deprivation of constitutionally guaranteed rights").
In short, the State continues to violate article XII, section 1 of the State Constitution even
in light of this Court's order requiring its compliance. Unless this Court takes action, the State's
ongoing constitutional violations will continue to go unremedied.
2. This Court must sanction the State for its ongoing constitutional violations and its violation of the Court's order.
This Court has the authority and duty to remedy the ongoing constitutional violations of
the State and its legislature through the enforcement of its orders. See Gannon v. State, 303 Kan.
682, 735 (Kan. 2016) (recognizing the court's "own power and duty to review legislative
enactments for constitutional compliance and to enforce our holdings"). Indeed, relying on
Federalist Paper No. 78 of 1788, the Kansas Supreme Court explained that "courts were created
by the people to stand between the people and the legislature - i.e., to help keep the legislature
within the limits of its authority granted by the people." Id. at 736; see also id. ("Limitations [on
legislative authority] can be preserved in no other way than through the medium of the courts of
justice.") (citation and internal quotation marks omitted, bracketed language in original). The
Kansas Supreme Court explained further:
So the judiciary clearly has the power to review a law and potentially declare it unconstitutional. But this power is not limited solely to review. It also includes the inherent power to enforce our holdings. Without the inherent power to impose remedies and otherwise enforce our holdings, our power to review would be virtually meaningless.
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rd. at 738 (internal citations omitted) (emphasis added); see also Londonberry School Dist. SAU
No. 12 v. State, 907 A.2d 988 (N.H. 2006) ("[T]he judiciary has a responsibility to ensure that
constitutional rights not be hollowed out and, in the absence of action by other branches, a -
judicial remedy is not only appropriate but essential.") (emphasis added).
The above court power was also recognized by the Hawai'i Supreme Court in Schwab v.
Ariyoshi, 58 Haw. 25, 564 P.2d 135 (1977). See id. at 37,564 P.2d at 143 ("[T]he role of the
court in supervising the activity of the legislature is confined to seeing that the actions of the
legislature do not violate any constitutional provision.") (emphasis added); see also id.
(explaining that courts "will not interfere with the conduct of legislative affairs in absence of a
constitutional mandate to do so, or unless the procedure or result constitutes a deprivation
of constitutional guaranteed rights." rd. (emphasis added). 8
This Court therefore has the authority and duty to remedy the ongoing constitutional
violations of the State and its legislature through the enforcement of its orders. Indeed, as a
general rule, this Court has the inherent authority to interpret, implement, and enforce its own
orders and judgments. See State ex reI. Office of Consumer Protection v. Honolulu Univ. of Arts,
Sciences, and Humanities, 110 Hawai'i 504, 514,135 P.3d 113, 123 (2006); see also Haw. Rev.
Stat. § 603-2l.9(6) (providing that courts have the power "[t]o ... do such other acts and take
8 During its oral ruling on the motion for reconsideration, this Court also recognized its authority and duty to act given its determination that "the State has not met its constitutional duty." Reconsideration Transcript at 11 :2-11, Exhibit "9" to the Miyagi Dec. This Court determined that the appropriate remedy, at that time, for the State's clear constitutional violations was to order the State's "compliance with the requirement to make sufficient sums available for DHHL's administrative and operating budget." rd. Indeed, as this Court noted, "[0 ]therwise, there is no effective remedy for the State's violation of its constitutional duty to fund." rd. Given the State's subsequent failure to comply with the Court's order, the appropriate remedy is now to sanction the State as requested by the DHHL Defendants.
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such other steps as may be necessary to carry into full effect the powers which are or shall be
given to them by law or for the promotion of justice in matters pending before them").
This inherent authority includes the power to sanction parties for failures to comply with
court orders and judgments. Kaina v. Gellman, 119 Hawai'i 324,331,197 P.3d 776,
783 (App. 2008) ("Hawai'i courts 'have the inherent power and authority to control the litigation
process before them and to curb abuses and promote fair process including, for example, the
power to impose sanctions for abusive litigation practices. "') (citation omitted); Richardson v.
Sport Shinko (Waikiki Corp.), 76 Hawai'i 494,507-08,880 P.2d 169, 182-83 (1994) (noting that
"courts have inherent equity, supervisory, and administrative powers" that include the ability to
impose the "ultimate sanction of dismissal" and "all reasonable steps short of dismissal").
Moreover, "[wlhen, as here, contempt results in an ongoing constitutional violation,
sanctions are an important of securing the promise that a court order embodies: the
promise that a constitutional violation will not go unremedied." McLeary v. State of
Washington, Supreme Court No. 84362-7, Order at 9, filed 8/1312015, attached as Exhibit "12"
to the Miyagi Dec.9
Simply stated, and as this Court found as fact, the State has continuously violated article
XII, section 1 of the State Constitution since at least 1992. This Court gave the State an
opportunity to remedy its ongoing constitutional violations in the 2016 legislative session by
complying with its constitutional duty for DHHL's FY 2016 administrative and operating
budget. The State did not do so falling well short of the "more than $28 million" that this Court
found constituted a "sufficient sum." This Court must exercise its inherent authority and
9 In McLeary, the Washington Supreme Court sanctioned the State of Washington $100,000 per day until it adopted a plan for complying with the constitutional mandate to fund public education. Id.
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sanction the State for its clear violation of this Court's order and its ongoing constitutional
violations. Indeed, if this Court does not do so, the State's ongoing constitutional violations will
continue to go unremedied. DHHL and its beneficiaries will continue to be deprived of their
constitutionally guaranteed rights. Moreover, "staying the judicial hand in the face of continued
violation of constitutional rights makes the courts vulnerable to becoming complicit actors in the
deprivation of those rights." State v. Campbell Cty. School Dist., 32 P.3d 325 (Wyo. 2001)
(citation omitted).
Based on the foregoing, the DHHL Defendants respectfully submit that this Court must
exercise its inherent authority to enforce its orders and sanction the State in the amount of
$100,000.00 per day until the State Defendants fulfill their constitutional duty under article XII,
section 1 of the State Constitution, by providing DHHL with "sufficient sums" - i.e., "more than
$28 million" - for its FY 2016 administrative and operating budget. Monetary sanctions are
necessary to ensure that the State's ongoing constitutional violations do not go unremedied.
IV. CONCLUSION
Based on the foregoing, and upon further argument to be presented at the hearing of the
Motion, the DHHL Defendants respectfully request that this Court grant the Motion and issue an
order sanctioning the State Defendants in the amount of ONE HUNDRED THOUSAND AND
NOll 00 DOLLARS ($100,000.00) per day until the State Defendants fulfill their constitutional
II
II
II
II
II
19
ICA 91 at PDF 760
duty under article XII, section 1 of the State Constitution to provide DHHL with "sufficient
sums" - i.e., "more than $28 million" - for its FY 2016 administrative and operating budget.
DATED: Honolulu, Hawaii, August 5, 2016.
Attorneys for Defendants HAWAIIAN HOMES COMMISSION, THE DEPARTMENT OF HAW AllAN HOME LANDS, JOBIE MASAGATANI, in her official capacity as Chair of the Hawaiian Homes Commission, WILLIAM K. RICHARDSON, 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
20
ICA 91 at PDF 761
EXHIBIT 2
NO. CAAP-16-0000496
IN THE INTERMEDIATE COURT OF APPEALS
OF THE STATE OF HAWAI‘I
RICHARD NELSON III, KALIKO CHUN, JAMES AKIONA, SR., SHERILYN ADAMS, KELII IOANE, JR., and CHARLES AIPIA,
Plaintiffs-Appellees,
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, MICHAEL P. KAHIKINA, RENWICK V.I. TASSILL, DOREEN NAPUA GOMES, GENE ROSS DAVIS, WALLACE A. ISHIBASHI, and DAVID B. KAAPU, in their official capacities as members of the Hawaiian Homes Commission,
DHHL-Defendants-Appellees,
and
WESLEY MACHIDA, in his official capacity as the State Director of Finance, and the STATE OF HAWAI`I,
State Defendants-Appellants.
CIVIL NO. 07-1-1663-08 JHC ON APPEAL FROM: (1) FIRST AMENDED FINAL JUDGMENT, filed 5/31/2016; (2) FINDINGS OF FACT, CONCLUSIONS OF LAW, AND ORDER, filed 11/27/2015; (3) ORDER AMENDING ORDER ISSUED NOVEMBER 27, 2015, filed 3/8/16; (4) ORDER DENYING IN PART AND GRANTING IN PART THE STATE DEFENDANTS’ MOTION FOR RECONSIDERATION OF, OR TO ALTER OR AMEND, THE JUDGMENT AND ORDER, FILED DECEMBER 21, 2015, filed 3/8/16; (5) ORDER DENYING THE STATE DEFENDANTS’ MOTION FOR SUMMARY JUDGMENT FILED APRIL 17, 2015, filed 6/19/15; (6) ORDER DENYING THE DHHL DEFENDANTS’ MOTION FOR SUMMARY JUDGMENT RE: COUNT II FILED JULY 24, 2014, filed 6/19/15; (7) CLERK’S TAXATION OF COSTS, filed 12/17/15; (8) ORDER GRANTING IN PART AND DENYING IN PART STATE DEFENDANTS’ MOTION SEEKING REDUCTION OF CLERK’S TAXATION OF COSTS, FILED DECEMBER 17, 2015, filed 3/8/16; and (9) CLERK’S TAXATION OF COSTS, filed 5/2/16 (10) FINAL JUDGMENT, filed 12/11/2015 CIRCUIT COURT OF THE FIRST CIRCUIT The Honorable Jeannette H. Castagnetti Judge
CERTIFICATE OF SERVICE
I hereby certify that on the date executed below, a true and correct copy of the foregoing
was duly served on the following party at their last known address VIA ELECTRONIC COURT
FILING (JEFS) and HAND-DELIVERY:
TO: DAVID KIMO FRANKEL, ESQ. SHARLA ANN MANLEY, ESQ. Native Hawaiian Legal Corporation 1164 Bishop Street, Suite 1205 Honolulu, Hawaii 96813 Attorneys for Plaintiffs-Cross-Appellants
MELVYN M. MIYAGI ESQ. ROSS SHINYAMA, ESQ. Watanabe Ing LLP First Hawaiian Center 999 Bishop Street, 23rd Floor Honolulu, Hawaii 96813 Attorneys for DHHL Defendants-Appellees Hawaiian Homes Commission, Department of Hawaiian Home Lands, and the Chair and members of the Hawaiian Homes Commission in their official capacities DOUGLAS S. CHIN Attorney General State of Hawaii CHARLEEN M. AINA Deputy Attorney General 425 Queen Street Honolulu, Hawaii 96813 Attorneys for State Defendants-Appellant State of Hawaii and Wesley Machida, in his official capacity as the State's Director of Finance ("State Defendants")
DATED: Honolulu, Hawaii, February 27, 2017.
/s/ Mark J. Bennett MARK J. BENNETT Attorney for HAWAII STATE LEGISLATURE