Groups Ask Court to Declare Prohibition On East Maui Water Lease to Private Party
“Climate change and variability in weather patterns makes it impossible for [the Board of Land and Natural Resources] to guarantee that anyone will be able to take a particular amount of water from East Maui streams for delivery to Central Maui.”
That’s according to a complaint filed March 18 in Environmental Court by the nonprofit groups Nā Moku Aupuni O Koʻolau Hui and the Sierra Club of Hawaiʻi. In it, they ask the court to declare — pursuant to Hawaiʻi Revised Statutes Chapter 632-1 governing “actual controversies” — that the Land Board is “prohibited from entering into a long-term disposition of water from East Maui with a private party.”
In May 2001, East Maui Irrigation Company and its then-parent company, Alexander & Baldwin, Inc., applied to the Land Board for a 30-year lease to continue their diversion of East Maui water for sugarcane fields in Central Maui. The companies had for decades diverted dozens of East Maui streams under annually renewed revocable permits covering four watershed license areas.
A&B and EMI completed a final environmental impact statement for the proposed lease in 2021. By this time, sugarcane cultivation had ended and Mahi Pono, LLC, which purchased the former cane fields from A&B, had begun growing diversified crops on the land.
Mahi Pono took over ownership of EMI last year. Today, the companies divert tens of millions of gallons of water a day under a single revocable permit allowing use of the irrigation system, over which the state holds an easement.
Nā Moku — a nonprofit organization representing native Hawaiian taro farmers and practitioners of traditional and customary practices in East Maui — and the Sierra Club have long fought the board’s renewal of the companies’ permits, as well as the board’s consistent, seemingly automatic denial of the groups’ contested case hearing requests.
Last November, anticipating more controversy with the impending expiration of the revocable permit for 2025, Department of Land and Natural Resources director Dawn Chang proposed that the Land Board initiate a contested case hearing on a long-term disposition of rights to divert water from East Maui.
The scope of the hearing would encompass both the possible issuance of a long-term lease via a public auction and a possible set-aside of the Land Board’s management authority over the system to the county. (In 2022, Maui voters approved the establishment of an East Maui Water Authority to take over the collection and distribution of East Maui water for the public benefit.)
After the county asked the Land Board for more time to devise a solution and members of the public noted that such a hearing was only warranted for a disposition to the companies, not for a set-aside to the county, the board voted on November 14 to defer a decision on Chang’s proposal for six months.
Earlier in the year, the Commission on Water Resource Management heard a briefing from its staff on drought conditions in East Maui streams that raised serious questions about how both instream and offstream uses would be met in the future.
Hawaiʻi Revised Statutes Chapter 171-58 allows for the short-term, one-year disposition of water rights through revocable permits from the Land Board, as well as the long-term disposition of water rights via a public auction.
However, in their recent complaint, Nā Moku and the Sierra Club argue, “A long-term disposition of water from East Maui to a private party would adversely affect Nā Moku Aupuni O Ko‘olau Hui and the Sierra Club.”
Not only can the Land Board not guarantee what the weather will be over the next three decades, they continue, it “cannot create barriers impeding meaningful community participation in an agencyʻs proceedings and determinations on matters affecting the environment.
“Typically, a lease provides the lessee with some form of vested rights. The public trust doctrine bars providing private parties vested rights to water. …
“Because a long-term lessee would have no recourse if BLNR decided to reduce or eliminate the amount of water allocated to the lessee, a long-term lease cannot provide any sort of assurance or guaranty or stability to the lessee. A long-term lease would, however, preclude community members from meaningful participation in discussions about the use of public trust resources for decades following execution of a lease.”
Currently, both groups have active cases in Circuit Court over past decisions by the Land Board to approve revocable permits and deny contested case hearing requests regarding the diversion of East Maui water.
A Partial Stay
On March 6, 1st Circuit Judge Lisa W. Cataldo issued an order staying part of the Land Board’s decision last December that approved a revocable permit for the diversion of 41.72 million gallons of water a day from East Maui streams and that denied the Sierra Club’s contested case hearing request on it.
The Sierra Club appealed, then asked the court to stay the board’s allocation of 35.22 mgd to Mahi Pono and EMI, leaving in place the allocation of 6.5 mgd to Maui County.
The groups wanted the court set a cap of 23 mgd on the companies’ diversions in 2026.
“While the law allows the Sierra Club to stay the entirety of BLNR’s December 2025 decision, the Sierra Club has no wish to deprive Upcountry residents of water or to bankrupt Mahi Pono. Instead, it seeks a reasonable, balanced, and equitable approach. It seeks to prevent more water than was taken in 2025 from being taken until this court rules on the merits. A stay may affect Mahi Pono’s expansion plans and its commercial operations, but a delay in commercial expansion is not irreparable harm. …
“A cap of 23 mgd can help ensure that too much water is not taken from streams. It serves to (a) prevent the harm to our streams from being exacerbated; (b) encourage EMI to expeditiously modify the diversion structures that CWRM ordered years ago; (c) create an incentive for Mahi Pono to reduce system losses and use water more efficiently; and (d) keep more water in east Maui streams,” the group stated in its January 26 motion for a partial stay.
(Last October, Judge Cataldo issued an opinion in a case brought by the Sierra Club over water diversion permits the board issued for 2022. In it, she instructed that for any future water permits, the board was to 1) require practical mitigation measures to reduce system losses, 2) ensure that the Water Commission’s IIFS are fully implemented before allowing more water to be taken from East Maui streams, and 3) render necessary findings regarding traditional and customary practices. The Land Board and Mahi Pono/EMI appealed her decision to the Intermediate Court of Appeals on February 27.)
In the Land Board’s memorandum in opposition, deputy attorney general Miranda Steed countered, “BLNR can demonstrate through testimony during the [December] meeting and from the declaration of Ayron M. Strauch, a hydrologist with the Commission on Water Resource Management who has directly monitored East Maui streams as part of CWRM’s East Maui monitoring program, that: (1) substantial progress has been made in restoring flows to East Maui streams; (2) the traditional and customary practice areas Sierra Club references are not experiencing dry stream conditions as a result of diversion; (3) a system-wide numerical cap bears no direct relationship to stream-specific instream flow conditions; and (4) Sierra Club’s characterization of ongoing harm is materially inaccurate.”
In her order, Judge Cataldo noted that Strauch’s declaration “reflects EMI’s overall progress toward compliance with CWRM’s 2022 [interim instream flow standards] modification orders. Dr. Strauch also confirms, however, that some of the ordered modifications remain unsatisfied, with some diversions in the [revocable permit] area still awaiting permits more than three years later.”
She added in a footnote, “The court takes Dr. Strauch’s statements at face value, but for a number of reasons, it cannot accept representations that a water permittee is ‘voluntarily’ restricting non-compliant diversion activity ‘to the extent practicable’ as a substitute for actual completion of the ordered modifications. First, no representative of EMI or Mahi Pono submitted a similar declaration. Second, on this motion, the court must determine irreparable harm to Sierra Club’s instream uses, and in that context, Dr. Strauch does not explain what ‘voluntarily’ allowing water flow ‘to the extent practicable’ actually means in terms of water usage and eliminating irreparable harm.”
The Sierra Club had filed a motion to strike declarations and exhibits — including Strauch’s declaration — submitted by the Land Board and EMI/Mahi Pono that were not part of the case record.
In her March order granting the partial stay, Cataldo denied the motion to strike, writing, “this court’s review on the merits of this agency appeal will be confined to the agency decision record. … In the limited context of considering Sierra Club’s motion for a stay, the court concludes it should consider the most updated information possible when evaluating irreparable harm.”
In granting the stay, Cataldo chose to cap Mahi Pono’s and EMI’s allocation at 30 mgd, rather than 23 mgd.
She found, among other things, that the December recommendation by the Department of Land and Natural Resources’ Land Division to approve the permit failed to account for more than 10 mgd of surface and groundwater available to meet the companies’ needs.
She pointed out that the record shows that the Water Commission and Strauch “have consistently taken the position that 7 mgd of pumped groundwater represents ‘sustainable yield’ for the aquifer, at least in the short term.”
She added in footnotes, “To the extent Mahi Pono submitted evidence regarding the adverse effects of ‘excessive’ or ‘sustained’ groundwater usage on specific crops, … these are long-term concerns and any stay ordered by this court is intended to be short in duration. …
“While all appellees voiced concerns regarding groundwater usage in opposition to the motion — none of them seemed to take issue with Mahi Pono pumping
groundwater well in excess of the aquifer’s sustainable yield during a drought year [2025], or that EMI’s 2021 EIS requested issuance of a long-term lease that anticipated groundwater pumping at more than twice the sustainable yield.
“In any case, if any party perceives an issue with unregulated, non-sustainable use of groundwater to the detriment of the relevant aquifer, that party may avail itself of the appropriate regulatory mechanisms for establishment of a groundwater management area.”
She also pointed out that EMI’s water use report for October 2025 shows that an average of 1.6 mgd is available from surface waters “gained from the area between Honopou and Maliko.”
And then there’s the water diverted for, but not used by, Maui County. The Department of Water Supply and the county’s Kula agricultural park used an average of 3.98 mgd, according to the Land Division staff submittal on the revocable permit.
“For the 2026 RP, the total amount allocated to the County of Maui is 6.25 mgd, meaning that on average, Mahi Pono will have access to roughly 2.27 mgd of water not used by the County. Based on the foregoing, even if a stay is ordered, Mahi Pono will have access to
multiple alternative sources of water for irrigation, amounting to an average of 10.87 mgd,” Cataldo wrote.
Certiorari Granted
On May 26, the Hawaiʻi Supreme Court will hear arguments over whether the Intermediate Court of Appeals improperly dismissed a case brought by the Sierra Club over the granting of water diversion permits to A&B and EMI for 2019 and 2020 and the denial of the groups’ contested case hearing requests on those permits.
The ICA, citing the Hawaiʻi Supreme Court’s decision last year in a case regarding development on Maui (Maui Lani Neighbors, Inc. v. State ), ruled that the Sierra Club had failed to exhaust its administrative remedies, including a court appeal filed under HRS Chapter 91 (which deals with contested cases).
The Sierra Club had filed its complaint regarding the permits for 2019 as an original action, not a Chapter 91 appeal. The group complained that the Land Board had violated the state environmental review law, HRS Chapter 343, breached its trust duties, and violated the state coastal zone management law, HRS Chapter 205A.
In its January 12 application for a writ of certiorari, which the Supreme Court granted last month, the Sierra Club wrote that the ICA “gravely erred when it held that the Environmental Court lacked jurisdiction to decide whether the Board of Land and Natural Resources breached its trust duties and violated HRS Chapter 205A when BLNR authorized Alexander & Baldwin, Inc., and East Maui Irrigation Company to take all the baseflow from a dozen East Maui streams – dewatering them completely 70 to 80 percent of the time. This ‘jurisdictional’ issue was (a) not litigated in the Environmental Court, (b) not raised by any party for more than six years after this case was filed and five years after a lengthy trial, and (c) wrongly decided by the ICA.
“The ICA misread Maui Lani Neighbors, Inc. v. State to suggest that the exclusive means of challenging an agency decision is via an HRS § 91-14 appeal – even when the agency rejected a request to participate in a contested case hearing.”
In an amicus brief on behalf of Hui Ho‘opulapula Nā Wai o Puna and Conservation Council for Hawaiʻi, Earthjustice attorney Isaac Moriwake added, “When BLNR rejected Sierra Club’s [contested case hearing] requests and issued diversion permits in violation of Sierra Club’s constitutional rights and BLNR’s constitutional duties, there were no remedies left to exhaust since BLNR is not qualified to judge the legality of its own actions, and Sierra Club lacks further recourse from the agency that violated its rights.
“Further, no effective remedies exist where BLNR has committed to the same unlawful course through years of repetition, while stonewalling any opportunity to contest these violations before the agency. Such obstruction forces community members to expend time and resources to challenge the denial of a [contested case hearing], then litigate the [hearing] before the agency that already prejudged the case and denied due process to begin with. Meanwhile, the agency and diverter benefit from the delays. By the time Sierra Club labors through that ‘process’ and seeks judicial relief, the time for the next year’s permit has already arrived or passed, starting the loop all over again. Such a Kafkaesque runaround is no remedy at all, much less an effective remedy.”
— Teresa Dawson