“What more due process do you want?” Hawaiʻi Supreme Court Justice Todd Eddins asked David Kimo Frankel last month.
Frankel is the attorney representing the Sierra Club of Hawaiʻi in a lawsuit over the state Board of Land and Natural Resources’ approval in 2020 of revocable permits for the continued diversion of East Maui streams through 2021, as well as the board’s denial of the group’s request for a contested case hearing on those permits.
The group has argued that the amount of water that the Land Board has allowed to be diverted is excessive and deprives a dozen East Maui streams of water for most of the year.
When the Land Board approved those permits at its meeting in November of that year, Frankel testified to the Land Board for 18 minutes about the Sierra Club’s concerns with them. The Land Board added conditions to its approval to address some of those concerns. And just two months earlier, a trial before the Environmental Court over similar objections the Sierra Club had to the same permits issued for 2019 and 2020 had concluded.
“On this record, we hold that BLNR’s rules and procedures for its November 13, 2020 meeting, Sierra Club’s participation in the 2020 trial of the 2019 Sierra Club lawsuit, and the short duration of the permit continuations provided reasonable protection from the risk of an erroneous deprivation of Sierra Club’s members’ protected interest in a clean and healthful environment,” the Intermediate Court of Appeals stated in its April decision vacating rulings by the Environmental Court in 2021 and 2022 that modified the diversion permits granted to Alexander & Baldwin, Inc., and East Maui Irrigation Co., LLC. Those modifications included significantly reducing the amount of water the Land Board had allowed to be diverted under the permits.
The ICA found that then-Environmental Court Judge Jeffrey Crabtree had improperly determined that the Sierra Club was entitled to a contested case hearing and exceeded his authority in modifying the permits. As result, the Sierra Club was not entitled to attorney’s fees, it found.
The ICA’s ruling, however, was not unanimous. Judge Karen Nakasone dissented. In her dissent, she stated that she did not agree that the Sierra Club’s participation in the trial was “an adequate alternative procedural safeguard, where the Environmental Court judge, who was the same judge that presided over the 2020 trial,
specifically found otherwise. The Environmental Court found that this case involved ‘some significantly different facts’ from the 2020 trial; that ‘the permits at issue covered the year after the trial’ and ‘[t]hings change with time’; that Sierra Club had ‘new evidence on the permit renewals — information and issues which apparently arose after the trial’; and that ‘[t]he new information and issues are relevant and are not insignificant.’”
“Here, the specter of floodgates of contested case hearings creating annual fiscal and administrative burdens for every future water permit continuation is speculative and premature, since we cannot presume that a contested case hearing will be requested in every similar case, or that BLNR would be required by due process to grant such in every case,” she wrote.
On November 21, the state Supreme Court heard oral arguments over whether the ICA got it wrong.
Opposing Positions
In the application to be heard before the Supreme Court, Frankel listed a number of factors that differentiated the circumstances surrounding the permits granted for 2021 from those of previous years.
He noted that after the trial in 2020, the Department of Land and Natural Resources’ Division of Aquatic Resources “determined for the first time that four streams from which A&B has been authorized to divert one hundred percent of the baseflow should be a high priority for stream restoration.”
Also, he continued, a new quarterly report on water use by the companies showed that “much less water was needed than previously estimated.” What’s more, a settlement agreement EMI co-owner Mahi Pono had entered into with regard to a contested case hearing before the Water Commission over diverted stream water from Na Wai ʻEhā was not included in the 2020 trial, but “demonstrated that it is reasonable to require the lining of reservoirs,” Frankel argued. (Na Wai `Ehā refers to the four streams that drain into central Maui.)
“Moreover, the permits are for a different year,” he continued. “A&B proposed to take 38 percent more water from east Maui streams in 2021 than it had been taking in 2020. Finally, DLNR’s staff recommended a new definition of ‘waste’ that would exclude system losses and evaporation. The recommendation was inconsistent with [the Commission on Water Resource Management’s] approach. The Sierra Club highlighted the Orwellian definition. Even the results of trials can be set aside when ‘newly discovered evidence which by due diligence could not have been discovered in time’ becomes available.
“Similarly, a contested case hearing was required despite the August 2020 trial because of the newly available evidence and because it was a new decision for a new year.”
In contrast, attorneys for the Land Board argued in support of the ICA’s decision, stating the Sierra Club received ample due process on its opposition to the permits “during a weeks-long bench trial … between identical parties, in which Sierra Club raised nearly identical issues and sought to vindicate nearly identical interests.
“And despite the opportunity, Sierra Club failed to advance meaningfully different arguments than it had at trial in both its petition for a contested case hearing and its public testimony at the Board’s November 13, 2020, public meeting on the RPs’ 2020 continuation.”
The Sierra Club had argued that under Hawaiʻi Revised Statutes Chapter 205A, also known as the Coastal Zone Management Act, the Land Board should have considered the effects the stream diversions would have on ecological values. Because of the board’s duties under the act (in addition to state laws regarding land dispositions and environmental reviews), the group argued that it was entitled to a contested case hearing. The state, and the ICA, disagreed.
The act “did not define Sierra Club’s alleged right to a clean and healthful environment here. And any risk of erroneous deprivation of Sierra Club’s alleged interest in the absence of additional trial-like proceedings on the 2021 RPs was outweighed by the governmental interest in avoiding duplicative and burdensome proceedings. The environmental court thus erred by granting Sierra Club’s … appeal from the Board’s denial of its Petition. The court also exceeded its appellate jurisdiction by prejudging the outcome of the contested case and modifying the RP conditions based on Sierra Club’s preferences rather than remanding to the Board for further proceedings. …
“Sierra Club’s self-described right to ‘cross-examine’ DLNR staff and scientific evidence the staff collects, interprets, and reports finds no support in the law and would have been inappropriate under these facts. First, none of the cases cited in the Application support Sierra Club’s self-proclaimed right in this case. And second, ‘[m]any courts and commentators have concluded that cross-examination of scientific witnesses’ such as staff of the CWRM or DAR, ‘is often, if not always, an exercise in futility.’ … Thus, even if a property interest was established, the lack of possible value to be gained from cross-examination weighed against granting the Petition and supports the ICA’s decision affirming the Board,” the board’s attorneys wrote.
Court Questions
During Justice Eddins’ questioning last month about due process, he told Frankel, “They’re making the point you just had a trial two months before … You actually argue for about 18 minutes, they say. I argue that was pretty effective.”
Frankel countered that a contested case hearing would have enabled the Land Board to ascertain “the truth of the matter,” including “new evidence” that arose after the trial, such as the findings by DAR about the natural resource value of some of the diverted streams.
Eddins then noted that the Land Board had considered that new evidence when it approved the permits for 2021.
Frankel argued that the Sierra Club should have had the opportunity to ask DAR whether there was any value in restoring flows to certain streams. “That’s the kind of thing, with evidence taken under oath, all parties cross-examining, the truth can come out.”
“Evidence showed A&B, they needed less water than they claimed,” he added.
In response to similar questions from Justice Vladimir Devens, Frankel explained how the Sierra Club did not have time to line up scientific experts to address the new information before the Land Board voted on the 2021 permits. The group also did not have the opportunity to question A&B, he said.
Chief Justice Mark Recktenwald asked about the appellate court’s position that the Coastal Zone Management Act did not affect the Land Board’s ability to renew the water permits. “I guess they’re trying to argue issues addressed in the context of mountain streams were tangential and did not give rise to a contested case hearing,” he said.
Frankel replied that the CZMA applies to all land in the state.
“It applies to the board. The ICA said, essentially, only Part 3 [of the act] is applicable, when things are very near the shoreline, in the [special management area] or shoreline setback area,” he said, adding that Ch. 205A-2A, which lists the objectives and policies of the act, “shall apply to all parts, not just Part 3.” (One of the objectives of the CZMA is to “[p]rotect valuable coastal ecosystems, including reefs, from disruption and minimize adverse impacts on all coastal ecosystems.”)
Frankel also noted in his filings that Part 4 of the CZMA provides: “(a) In implementing the objectives of the coastal zone management program, the agencies shall give full consideration to ecological, cultural, historic, esthetic, recreational, scenic, and open space values, and coastal hazards, as well as to needs for economic development,” and “(b) The objectives and policies of this chapter and any guidelines enacted by the legislature shall be binding upon actions within the coastal zone management area by all agencies, within the scope of their authority.”
“That’s sort of a mauka-makai concept incorporated in 205A. … The streams connect mauka to makai,” Devens said.
“Exactly. Yes, your honor,” Frankel replied.
When Eddins pointed out that “due process is not a fixed concept” that necessitates a contested case hearing, Frankel replied, “When property interests are implicated, you have a right to a hearing.”
Judge Clarissa Malinao, sitting in for recused Justice Lisa Ginoza, asked whether the Land Board’s decision on the 2021 permits redefining water waste was a constitutional violation.
“It is inconsistent with their public trust obligations. There is a public trust duty to ensure water goes to public trust purposes. When it’s wasted, it’s not fulfilling that mandate,” Frankel replied. If all system losses are not considered waste, “then there’s nothing else left in the definition of waste and that is extremely problematic and this is one of the issues we wish to explore in the context of a contest case hearing,” he added.
He argued that in modifying the permits to maintain diversions at the status quo, Judge Crabtree “crafted a remedy in light of BLNR’s denial of the Sierra Club’s constitutional rights.”
Frankel added that A&B and the Land Board cannot complain about the modifications, since they themselves asked Crabtree to modify the permit expiration dates.
“It was in A&B’s interest for the court to modify BLNR’s decision because
if it had not, if the court had invalidated the permits, A&B would not have been entitled to any water whatsoever. It’s really hypocritical of them to condemn the court for modifying,” Frankel said.
“What about their argument [about] the court substituting its judgment for that of the BLNR? They should have just remanded, sent it back?” Devens asked.
“In that case, the constitutional violation would have gone unabated. A&B would have been allowed to take even more water and we would have been in the same situation of Na Moku back in 2001: asking for a contested case hearing, not having it, and them taking more and more water,” Frankel replied, referring to the group Na Moku Aupuni O Koʻolau Hui, which decades ago asked for a contested case hearing on the diversions from East Maui, but never got one.
“That’s the problem. What the court did, which was genius, it preserved the status quo. It didn’t use those words, but basically, it looked at what Mahi Pono, A&B, EMI had been taking and said, ‘OK, you can use a little bit more, but no more.’ … It preserved the status quo until a contested case hearing was completed,” he said.
Counterpoint
Deputy attorney general Melissa Goldman’s oral argument focused on two key points:
1) that the Sierra Club was not constitutionally entitled to a contested case hearing, and 2) that even if it were, the Environmental Court exceeded its jurisdiction by “modifying permit terms that were not before it based on an undeveloped record to advanced one party’s interest over inclusive policies reflecting public input and agency expertise.”
“Due process, as Justice Eddins just recounted, is not a fixed concept,” she said. The Sierra Club had ample opportunity to be heard and there was “no showing that additional procedures would be meaningful,” she said.
Justice Devens said, “It’s one thing to express views. It’s another to be cross-examined,” adding that the Sierra Club wanted its opportunity to be heard to be meaningful.
He raised the issues of the new treatment of system losses and the four diverted streams that DAR had identified as high priority streams.
Goldman conceded that the DAR information was new but said that the Sierra Club mischaracterized what it was.
“Doesn’t that really support their argument? You’re fighting over what this meant or that meant,” Devens said. He added that the Sierra Club learned of DAR’s opinions through a report to the Land Board issued less than a week earlier. “They have five to six days to get an expert. That’s not practical,” he said.
Goldman noted that the Hawaiʻi Supreme Court has held that the public meeting process can be sufficient even though the public is given limited speaking time and there are no cross-examinations.
“What matters is if there was erroneous deprivation,” she said.
Justices Recktenwald and Eddins pressed Goldman about the DLNR’s and Land Board’s decision to not characterize system losses as waste for the 2021 permits.
Goldman replied that the DLNR’s position had always been that system losses were reasonable. During the trial, “we argued reasonable system losses do not constitute waste and then [DLNR] staff defined the term waste in its subsequent staff submittal.”
“Didn’t CWRM have concerns? Didn’t CWRM say that systems losses exceeded 20 percent and that didn’t comport with best practices?” Eddins asked.
“I think we’re getting a little bit lost in the weeds. The bigger picture is it’s under CWRM’s jurisdiction to address those kinds of issues, not the board,” Goldman replied.
Eddins replied that he understood the distinction she was making but suggested that a new definition of water waste seems like the kind of information that the board might need to “turn it over, shake it up, to see what it really means. I know you made 27 new conditions, some addressed Sierra Club’s concerns. When you look at that water waste issue … it seems that is sort of significant new evidence to take a look at.”
To this, Goldman said, “Courts have generally recognized that cross-examination of scientific facts is often an exercise in futility.”
“Really?” Recktenwald interjected. “I just – cross-examining experts about scientific facts is, I’m sorry, an exercise in futility?”
Goldman explained that she was merely quoting a case she had cited in her briefs.
“I suppose it depends on the skills of the cross examiner,” Eddins said.
“I’m trying to understand what I did for all those years in private practice, I guess,” Recktenwald added.
He continued, “It can be frustrating. It can be slow. There can be ambiguity. There can be different points of view. But in the end, that’s exactly why you have a test of cross-examination. So the finder of fact can come to a determination. If anything, that cuts in favor of a contested case hearing.”
Goldman, however, argued that the burden of duplicative proceedings outweighed any possible benefit of a contested case hearing. She later added that cross-examination is not required by due process.
Eddins recounted how the permits for the East Maui stream diversions had not ever been fully examined in a contested case hearing before the Land Board.
“When you’re looking at what procedures are necessary to satisfy the Sierra Club’s due process rights, is it appropriate to look at [them] in the context of 20 years of annual RPs?” he asked.
Goldman replied, “I think the larger context about this entire dispute we could talk about for hours. … Sierra Club had already had full process through a trial to explore many of those issues and had … a Sunshine meeting.”
She concluded that the Environmental Court exceeded its jurisdiction by modifying the permits “without finding board error or abuse of discretion. … It made findings on an undeveloped record and it substituted its judgment for that of the agency.”
Trisha Akagi, the attorney representing A&B and EMI, made similar arguments that a contested case hearing was not necessary to deal with the new evidence.
The exclusion of system losses from the definition of waste, for example, “was thoroughly discussed at the August 2020 trial,” she said, noting that the Land Board’s decision to incorporate that new definition into is permit approval was merely an attempt to clarify that not all system losses are waste.
Even so, Justice Sabrina McKenna argued that the new issue of defining waste to exclude system losses and evaporation was worth taking another look at.
“I respectfully disagree that cross-examination of expert witnesses is a waste of time,” she said.
She added that even though it is the Water Commission’s exclusive jurisdiction to set the amount of water that needs to stay in streams, the Land Board “also has an obligation to try to save our water as much as possible.”
Akagi argued that the Environmental Court “would have needed to at least to have made a predicate finding of clear error to modify a factual determination by BLNR. Specifically, in order to modify the cap, the Environmental Court would have had to make a determination that the BLNR’s cap was clearly erroneous.”
On this point, McKenna later argued that “perhaps it didn’t use the words ‘clearly erroneous,’ but it did find that there was an error not to have a contested case hearing because constitutional rights were being violated. Sounds like clear error.”
“Exactly,” Frankel replied.
Recktenwald then asked Frankel for his take on the concern over “an endless parade of contested case hearings, year after year after year, that really are not accomplishing much especially as that body of work grows?”
Frankel cited other issues where similar worries were raised (geothermal, Red Hill) and no endless parade of contested cases followed. He then added, “If the BLNR properly fulfills its public trust duties, there’s not going to be request for contested case hearings. That’s what this is all about. The board has abdicated its duties for decades. The Sierra Club is asking the board to do what it needs to do. … It needs to make sure that important questions are answered, that water is not wasted whether using terms like ‘system loss.’”
The court did not rule on the case by press time. The Land Board is expected to vote on permits for 2025 this month. It denied a recommendation from its chair last month to enter into a contested case on a proposed long-term disposition for the water.
— Teresa Dawson
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