The long-running dispute over what activities are permitted on the Big Island’s agricultural land is as far from being resolved as it ever has been.
Last year, the 3rd Circuit Court found that the state Land Use Commission was wrong when it determined that the rental of houses in the state Agricultural land use district as short-term vacation rentals was not allowed. By law, the LUC had ruled, any house on Ag land is presumed to be a farm house, and farm dwellings can be used for no purpose other than that of supporting agricultural uses.
But 3rd Circuit Judge Wendy DeWeese overruled the LUC in her May decision. Nothing prevents a farm dwelling from also being rented out as a short-term vacation rental, she found. And nothing in state law sets a minimum length of time for which a farm dwelling may be rented.
The LUC decision was in the form of a declaratory ruling, which had been sought by both the County of Hawaiʻi, on the one hand, and, on the other, a number of landowners who had been asking the county to allow them to continue using homes on their Agricultural land as vacation rentals. The county Planning Department had denied the requested permits, in keeping with an ordinance passed by the County Council in 2019.
That ordinance disallowed the short-term – 30 days or less – rental of homes on lots in the state Agricultural district if those homes were on lots of record established after June 4, 1976. That was the date a law took effect that specified the uses allowed on land in the state Agricultural District.
The landowners asked the county Board of Appeals to overturn the Planning Department’s ruling. However, both the county and the landowners agreed to withdraw that action and seek a declaratory ruling on the subject from the Land Use Commission instead.
Following the LUC’s ruling, issued in August 2020, that was adverse to the landowners, they appealed to the 3rd Circuit Court.
To the ICA
Following Judge DeWeese’s ruling, the Land Use Commission was the sole party to appeal to the Intermediate Court of Appeals.
In its opening brief, filed October 22, the LUC notes that state law limits dwellings on land in the Agricultural District to only those single-family homes that are an accessory use to a bona fide agricultural service. As such, it argues, there is no need for any rule limiting the length of time that such homes may be used as vacation rentals. “Meeting the definition of farm dwelling,” the LUC argued, “would come first and foremost before appellants’ duration question could even be entertained.” (The team of attorneys representing the LUC includes deputy attorneys general Holly Shikada and Julie China, but also two “special deputy attorneys general,” former state attorney general Douglas Chin and Eric Robinson.)
The state went on to list deficiencies in the landowners’ petitions to the county for permits as non-conforming uses, given that their properties were used as short-term rentals before the county ordinance limiting them on Ag lands took effect.
Those landowners, known collectively as the Rosehill petitioners, had asked the county for non-conforming use certificates for short-term rentals based on their use as such before the county ordinance took effect in 2019. As the LUC showed, however, the county records demonstrated that none of the petitioners’ lots was in existence prior to the 1976 cut-off date.
Aside from the factual evidence supporting the LUC’s decision, the state argued, the Circuit Court should have given deference to the LUC’s own interpretation of its rules.
The county’s filing with the ICA made many of the same points. It also noted that the Circuit Court “appears to have improperly required the LUC to make express findings whether petitioners are entitled to declaratory rulings both when the LUC denies a petition and when the LUC grants a petition.” State law requires agencies to give reasons only when their decisions are adverse to a party, the county argued. “There was no dispute as to whether or not the county’s factual basis was sufficient for the LUC to issue a declaratory ruling as to the county’s petition,” it stated. “However, as to the Rosehill petitioners’ petition, the LUC explained why it was denying the petition because to not do so, i.e., to deny relief with no explanation, would have been arbitrary and capricious.”
Further, the county stated, “In focusing solely upon whether [Hawaiʻi Revised Statutes] Chapter 205 did or did not prescribe a minimum rental period for ‘farm dwellings,’ the Circuit Court relied upon an overly simplistic analysis that missed the point as to why the Agricultural District was created in the first place. The permitting safeguards thoughtfully implemented by the county were to ensure that agricultural lands remain in agricultural use and are not transformed into commercial vacation-rental properties. The intended use and purpose of a farm dwelling is to support and serve as an accessory to the agricultural activities from which the single family exclusively occupying that dwelling obtains income. While a farm dwelling’s primary purpose is to be a bona find agricultural service and use which supports and is accessory to agricultural activities, the purpose and use of a short-term vacation rental is merely to provide transient accommodations. These uses are completely incongruent to one another.”
A Motion to Strike
Whether the county’s brief will be considered by the Intermediate Court of Appeals was an open question at press time. On January 13, the Rosehill petitioners challenged the county’s effort to involve itself in the appeal, asking the court to strike it.
“Only appellant State Land Use Commission (the LUC) appealed the Circuit Court’s reversal of the LUC’s decision,” the motion stated. “Appellee County of Hawaiʻi (the County) did not appeal.” The county’s brief, writes attorney Christopher Goodin, one of several Cades Schutte attorneys representing the Rosehill petitioners, is not an “answering brief,” as the county titled it, but rather “an opening brief.”
The county’s brief “should be stricken,” he goes on to argue, citing to a rule of the appellate court that requires an appellee who supports the position of the appellant “shall meet the time schedule for filing documents that is provided for the appellant.”
“The purpose of the rule is to ‘ensure … that the ‘real’ appellees are able to respond to the arguments for reversal – which they can’t if the ‘appealing appellee’ files with the ‘defending appellee,’” Goodin writes, adding that if the county supports the LUC’s position, as its brief sets forth, then it should have met the time schedule imposed on appellants.
County deputy corporation counsel Mark Disher answered the Rosehill motion on January 18. The county’s position diverges from that of the Land Use Commission, he argues, and therefore should be considered by the appellate court.
The LUC declaratory order did not uphold the county’s ordinance, he writes, since it did not carve out the exception granted to homes built on lots of record that existed prior to the 1976 cut-off date. Under the LUC’s order, owners of those homes would not be able to receive non-conforming use permits allowing them to be used as short-term rentals – a clear divergence from the county’s ordinance.
“As the LUC did not directly address this issue with specificity in their appeal,” he continues, “it was necessary for the county to seek this distinction by way of its answering brief. Nor would the county necessarily know the LUC’s position until after the filing of their opening brief, thus, to be held to the same scheduling requirements as the LUC would have been impractical in this case.”
Disher raises the prospect of still more litigation to come if the LUC should prevail and its declaratory order affirmed. That, he notes, “would affect those properties … that have already been granted special use permits to continue use as [short-term vacation rentals]. To avoid any further need for litigation on what can arguably be stated as a side issue to the appeal before the court, the county seeks to have this issue addressed here and now.”
The Contrary View
On the same day they challenged the county’s involvement, the landowners also filed their answering brief to the state.
Again, they claim that the only question that matters is whether state law sets a lower limit on the duration of rentals of homes in the state Agricultural District. “The [county] ordinance allows owners of lots that were created before June 4, 1976, to obtain permits to rent their properties for less than 31 days,” writes attorney Molly A. Olds, going on to affirm that all of the lots her clients own were created after that date. That date was selected, she says, because the state’s land use law, Hawaiʻi Revised Statutes Chapter 205, “was amended as of that date to allow ‘farm dwellings’” in the Agricultural District.
“The amendment to Chapter 205 defined ‘farm dwelling’ as ‘a single-family dwelling located on and used in connection with a farm or where agricultural activity provides income to the family occupying the dwelling.’ Nothing in the amendment (or the rest of Chapter 205) set a minimum length of time that a farm dwelling must be occupied,” she continues.
Olds accuses the state of failing to accept the plain language of the law. “On appeal,” she writes, “the LUC works hard to ignore the words used in the Ordinance and Chapter 205. Along the way, however, the LUC hints that its arguments are untethered to the text of those laws. The hints include asserting that the ‘question on appeal is whether transient use akin to short-term vacation rentals in Hawaiʻi County are outside the bounds of “farm dwellings,” ‘… that the ‘purpose of a short-term vacation rental is to provide transient overnight accommodations that will be temporarily rented for periods of 30 days or less by vacationers,’ and that the [ordinance] ‘title alone … shows that it is a rental for vacation use. … When an argument over the text skips the text in favor of references to ‘similarities,’ ‘purposes,’ and ‘titles,’ we know that the advocate has forgotten the first principle of statutory interpretation is that ‘is the language of the statute itself.’”
As to the deference the court should have given to the LUC’s own interpretation of its rules, Olds writes: “The county defined ‘short term vacation rental’ by the length of the rental. The LUC is not entitled to deference in rewriting the county ordinance. The LUC is not entitled to deference in rewriting HRS Chapter 205. … There is nothing ambiguous about the definition of ‘farm dwelling’ in HRS Chapter 205.”
Amicus Requests
As of press time, two parties had requested the ICA for leave to file amicus briefs.
The first request came just three weeks after the state filed its opening brief. It was made by attorney Michael Matsukawa on behalf of Maile David, a former member of the County Council who voted in support of the ordinance limiting short-term rentals on most Agricultural land, and the unincorporated group Ka Paʻakai o ka ʻAina. In his filing, Matsukawa argued that the state had neglected to raise critical issues in its appeal having to do with exactly what government agency is charged with enforcing what part of Chapter 205. The county’s role, he maintained, was pre-eminent in the case of prime agricultural land.
Despite this, he wrote, the Rosehill petitioners “tried to remove the case from the county Board of Appeals by submitting their petition to the Land Use Commission for a declaratory order, even though the Land Use Commission has no enforcement authority or responsibility to determine whether the proposed use in question is permitted on land that has soil productivity class A or B. It is further not clear why the county of Hawaiʻi … also tried to remove the matter … from the county Board of Appeals to the Land Use Commission as well.”
The Rosehill petitioners were the only parties to the litigation who addressed Matsukawa’s request for amicus status. In his memo to the court in opposition, attorney Christopher Goodin was sharp and brief.
“As a procedural matter, amicus briefs are not supposed to raise new arguments. … No one has argued that the commission’s authority is limited because movants’ argument is meritless,” he wrote.
“As movants raise a new issue that has no merit, there is no reason to let them file a brief,” he concluded.
The ICA agreed.
The second request to the court to allow the filing of an amicus brief came from the City and County of Honolulu Department of Planning and Permitting.
“DPP has a concrete interest in the resolution of this case,” writes deputy corporation counsel Brad Saito. “DPP is responsible for conservation and protection of agricultural lands and the enforcement of HRS Chapter 205. DPP believes that the 3rd Circuit Court’s interpretation … is inimical to the purpose of the state Agricultural zoning district and inconsistent with the ‘accessory use’ doctrine. … DPP believes that the 3rd Circuit Court’s order is inconsistent with the Hawaiʻi State Legislature’s decision to grant administrative agencies the discretion to determine when and how declaratory rulings should be issued.”
Saito also noted that the DPP had conferred with attorneys for the LUC, Hawai`i County, and the Rosehill petitioners. “The LUC and county consent and Rosehill objects,” he wrote.
The Rosehill petitioners have asked the court to deny the DPP standing as an amicus. No decision on the DPP’s motion had been made by press time.
For Further Reading
Environment Hawai`i reported on this in our July 2022 edition, “Farm Dwellings, Overnight Camping at Issue in 2 Court Cases the LUC Votes to Appeal.”
— Patricia Tummons
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