Seven and a half years ago, on February 24, 2017, the then-chairperson of the Board of Land and Natural Resources, Suzanne Case, signed off on an exemption notification. This memorialized her agreement with Department of Land and Natural Resources’ staff that the issuance of a new revocable permit to Syngenta Hawaiʻi, LLC, for use of around 61 acres of state land on Kauaʻi would not trigger a requirement that an environmental assessment or environmental impact statement be prepared.
The notice stated that the action was exempt since it fell into one of the categories of action – Exemption Class No. 1 – for which no further compliance with Hawaiʻi’s environmental policy law, Chapter 343 of Hawaiʻi Revised Statutes, would be required. Exemption Class 1 covers the BLNR’s issuance of permits, licenses, registrations and rights-of-entry “involving negligible impacts beyond that previously existing.”
The new occupant was going to be continue growing the same crop – seed corn – that the previous permittee, Syngenta Seeds, LLC, had been cultivating for years. “As such,” the exemption statement read, “staff believes that the proposed issuance of a revocable permit for the same use to a new entity would involve negligible or no expansion or change in use of the subject area beyond that previously existing.” In addition, the area covered by the RP would be expanded from 43 acres to 61.
The board’s action was challenged in court by five groups: Ke Kauhulu o Mana, Hawaiʻi Alliance for Progressive Action, Surfrider Foundation, Kohola Leo, and Punohu Kekaualua III. Their complaint was that the board’s approval of the revocable permit violated Chapter 343. In addition to the Land Board, Syngenta Seeds and Syngenta Hawaiʻi were named as defendants.
The Environmental Court issued summary judgment against them, a ruling that was then appealed to the Intermediate Court of Appeals.
It took a few years, but on April 30, the ICA finally issued its decision. It found that the lower court erred in its analysis of the BLNR’s decision in light of the Supreme Court’s decision in Umberger v. Department of Land and Natural Resources. Umberger holds that an environmental assessment is required if three conditions are satisfied: first, that the activity meets the HEPA definition of action; second, that the proposed action involves at least one of the nine categories of land use or administrative acts listed in HEPA; and third, the action falls outside the exempt uses in the department’s approved list of exempt activities. The environmental court had determined that conditions 2 and 3 of Umberger weren’t met, and for that reason, it granted the motion for summary judgment sought by Syngenta.
In faulting the lower court’s analysis of the Umberger conditions, the ICA found that there was indeed a material factual dispute, thus precluding the issuance of a summary judgment. What’s more, it found that the record before the court was “insufficient to support the 2017 Exemption Notification’s determination that there was ‘no expansion or change in use of the subject area beyond that previously existing.’”
“Appellants” – the community groups – “presented evidence of what they claimed were environmental impacts from Syngenta’s seed research operation, which included, inter alia, harm to marine life, insects and native plants, soil, and an increase in certain types of illnesses from Syngenta’s use of pesticides. That evidence created genuine issues of material fact which should have precluded summary judgment,” the ICA held.
The issue was then remanded to the Environmental Court of the 5th Circuit (Kauaʻi) “for further proceedings in accordance” with this opinion.
While the ICA decision was obviously not the outcome preferred by Syngenta and the state, neither did it find favor with the plaintiffs. On May 20, they asked the state Supreme Court to review the case and find that the ICA “gravely erred by holding a genuine issue of material fact existed,” thus preventing them from “obtaining summary judgment on the validity of the 2017 exemption and the board’s obligation to prepare environmental documents.”
On July 30, the Supreme Court granted cert.
History
The history of the Syngenta revocable permit goes back more than four decades.
In 1981, Kekaha Sugar applied for a Conservation District Use Permit for agricultural purposes on 61 acres of land in the Limited subzone that lay just mauka of a racetrack and which had been at one point considered as a potential landfill site by Kauaʻi County.
The state Office of Environmental Quality Control Bulletin published notice of the application, stating: “The applicant proposes to clear brush from the land and improve the sandy soil for the purpose of raising sugar cane. This would be done by incorporating mud press, settling basin mud and cane trash.” At the time, a negative declaration was issued for the use – a finding that the proposed activity would have no significant environmental effects.
Following publication in the OEQC Bulletin, Pride Company, a division of the seed corn giant Northrup King Company, was added as a co-applicant. When the Land Board voted to approve the CDUP in April 1982, it specified that Kekaha Sugar was to use 17 acres for growing seed cane, while Pride was going to be using the remaining 43 acres “for growing of research seed stock, such as corn seed, sunflower, and soybean seed.”
On December 3, 1982, the Land Board approved issuance of revocable permits to Kekaha Sugar and Pride, with the monthly rents reflecting the portions of the total 61 acres each company occupied ($117 per month and $290 per month, respectively, or around $6.80 per acre).
In 1993, the Land Board consented to the assignment of the Pride revocable permit, RP 5983, to Northrup King, its parent company. According to the history of the RP prepared by DLNR staff, Northrup changed its name to Novartis Seeds in December 1997.
In 2000, Kekaha Sugar’s parent company, Amfac, announced its Kauaʻi operations would be ceasing as of November 17. On October 27, the Land Board approved issuance of two revocable permits to a coalition of entities that would be taking over some of the state lands that the sugar company had occupied and the irrigation system that it had managed. Novartis was among the parties participating in these coalitions – but the properties identified as now being encumbered by revocable permits to these groups did not include the 43-acre RP to Novartis.
Two months later, the board was asked to change the name of the permittee participating in the management of land and irrigation infrastructure surrendered by Kekaha – the subject of the October 2000 action – from Novartis to Syngenta Seeds, Inc. In the staff history given to the Land Board in 2017, this action is presented as though it related to RP 5983, although in fact it had nothing to do with that revocable permit.
Nor, in fact, was it merely a name change. In November 2000, Novartis merged with AstraZeneca to form an entirely new company, Syngenta.
Other than the name change registered in that 2000 action relating to irrigation, the board seems never to have consented to or been made aware of the transfer of the revocable permit to Syngenta.
On December 31, 2015, Syngenta Seeds, Inc., effected a corporate reorganization, converting from a Delaware corporation to a Delaware LLC to be known as Syngenta Seeds, LLC. It then spun off Syngenta Hawaiʻi, LLC, as a wholly owned subsidiary. A footnote in the DLNR staff report says that this change would not require any board consent since “board consent is not expressly required for stock or membership interest transfers of a permittee.”
At some point, Syngenta expanded its operations onto the adjoining 17 acres that had been part of Kekaha Sugar’s operations under RP 5966. This wasn’t known to DLNR staff, apparently, until staff began to prepare the February 2017 report to the board. As that report states, “in preparing this submittal, staff realized that SSL has been using a larger area … than is indicated on RP 5983. The permit authorizes the use of 43.6 acres. However, since December 4, 2007, SSL has utilized a total of 61.2 acres.”
Exactly how the Land Division staff was able to pin down the exact date Syngenta’s occupancy of the additional 17 acres commenced isn’t explained. But the report does refer to an executive order from 2003, which was to set aside to the state Agribusiness Development Corporation more than 12,000 acres of land that had been part of the Kekaha Sugar operations. After Kekaha Sugar surrendered its RP 5966 in February 2001, the staff report states, “the Agribusiness Development Corporation, who thought it had control over the 17.6 acres pursuant to Executive Order No. 4007 … entered into the license with [Syngenta] for agricultural purposes. ADC believes but has yet to verify that SSL has paid approximately $16,991 in rent for the 17.6 acres from December 2007 through January 2017, or approximately $8.77/acre per month.” (The ADC rental rate amounts to roughly half of the DLNR rental rate.)
The Land Board approved the staff recommendation to transfer the permit to Syngenta Hawaiʻi and also to expand the area included in the RP to 61 acres. No one testified in person against this. Gary Hooser, who has been fighting Syngenta’s use of pesticides for years, did submit written testimony in opposition, however.
In the staff report, mention is made of a Land Board decision the previous October that approved properties on Kauaʻi to be set aside to the Department of Agriculture. The 43 acres that were then under RP to Syngenta Seeds were among the properties listed.
In the months following the approval of the new RP to Syngenta Hawaiʻi, Hartung Brothers purchased the Syngenta assets on Kauaʻi and is continuing with similar agricultural operations. The RP for Hartung Brothers, which included the additional 17 acres, did not take effect until December 1, 2017. The land under the RP is still on the Department of Land and Natural Resources’ inventory of encumbered lands. Annual rent is just shy of $16,000.
Before the Supreme Court
The Intermediate Court of Appeals’ remand of the lower court’s ruling might have seemed to some as vindication.
A press release issued by the plaintiffs on May 6 praised the reversal. Punohu Kekaualua, a Native Hawaiian, stated, “We must stop poisoning our precious resources and lands.” A representative of the Surfrider Foundatio, Staley Prom, added, “Restricted use pesticide application’s clear harm to Kauaʻi’s nearshore waters warranted environmental review. Proper application of Hawaiʻi’s environmental review laws is essential for protecting community health and safety.” And Anne Frederick, executive director of the Hawaiʻi Alliance for Progressive Action, said, “The board should never have allowed Syngenta to use Kauaʻi’s public trust lands without scrutinizing impacts on the lands and our communities.”
Before the month was out, however, the plaintiffs’ attorneys, Lance Collins and Bianca Isaki, had filed their application for a writ of certiorari with the state Supreme Court. Among other things, it argued that the ICA had “gravely erred” in two key issues.
The first of these concerned the ICA’s decision to remand for trial the BLNR’s decision to exempt the proposed award of the revocable permit to Syngenta Hawaiʻi from the need to prepare an environmental assessment or environmental impact statement. Instead of ordering a remand and determining that this was a factual dispute, the ICA should have held that this was “an issue of law properly resolved by summary judgment.”
The second issue also concerned the BLNR’s exemption decision. Because the exemption decision “was procured upon procedural errors,” again the ICA should have held that summary judgment was appropriate.
Both the BLNR and Syngenta filed briefs with the Supreme Court objecting to the plaintiff’s request.
The BLNR suggested that the community groups should have been content with the remand. The board’s attorneys disagreed that the ICA found that the board didn’t follow proper procedures. Instead, they wrote, “the ICA concluded that the Environmental Court, in reviewing the Board’s decision, had failed to consider all of the exemption factors.” Thus, they argued, remand was proper.
Nor did the ICA find that the activity authorized by the RP “may” have significant environmental effects, contrary to the claim of the appellants, the state attorneys contended. Instead, the ICA merely held that the environmental effects of Syngenta’s activities were a question of fact – something, again, that precluded issuance of summary judgment, they argued.
Attorneys for Syngenta made a similar argument. There was no “grave error” here, they wrote. Instead, the ICA “remanded the matter ‘for further proceedings’ to develop the necessary record upon which the factual and legal determinations could be made.”
In response, the appellants basically said that this was precisely their point. It should not be left to the courts to develop the necessary record to justify an exemption.
“BLNR’s exemption can only be sustained if its approval of the Syngenta RP ‘will probably have minimal or no significant effect on the environment,’” the appellants’ attorneys, Lance Collins and Bianca Isaki, wrote, quoting from the state’s rules implementing Chapter 343. “If the action may have more than minimal or any significant impacts, exemption is inapplicable.”
“The ICA gravely erred by ruling a trial is required because where, as here, a plaintiff raised a prima facie case for significant impacts, it is impossible for the agency to have correctly determined there would probably be minimal or significant impacts,” they argued.
“Requiring the circuit court to find facts (i.e., hold a trial) on whether minimal or no significant impacts ‘probably’ exist subverts the legislative scheme of [Hawaiʻi Revised Statutes] Chapter 343… Agencies must require EA preparation for actions. Courts review whether an exemption was proper or an EA should have been prepared. …
“The practical effect of directing circuit courts to find facts about significant impacts is to incentivize agencies to abdicate their obligations to require EA preparation, issue improper exemptions, and wait to see if plaintiff groups seek costly judicial review to challenge exemptions.”
On July 30, the Supreme Court published its order agreeing to hear the case. No argument has been scheduled yet.
— Patricia Tummons
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