Environment Hawai’i reprints here excerpts from the opinion of the Hawai’i Supreme Court on the matter of the Department of Health’s issuance of geothermal drilling permits to True Geothermal Energy Company in the absence of rules to regulate emission of hydrogen sulfide. Legal citations have been omitted.
The case at issue was an appeal of the Health Department’s actions by Noa Emmett Aluli, Karl Kirkendall, Michael LaPlante, Robert Petricci, Steven Moser, and the Pele Defense Fund. The appellants were asking the Supreme Court to overturn a lower ruling by Third Circuit Judge Shunichi Kimura. The Supreme Court opinion was written by Justice James Wakatsuki.
Opinion of the Court
The appellants filed a complaint in the circuit court seeking declaratory and injunctive relief. Essentially, appellants sought cessation of construction and operations of geothermal wells along a segment of the Kilauea Middle East Rift Zone. The complaint was brought against True/Mid-Pacific Geothermal Venture which was developing the wells and against the State Department of Health which issued an air pollution permit authorizing the construction and operation of the wells.
Among other things, appellants contended that DOH erred in issuing the permit when there were no rules promulgated in accordance with the Hawai’i Administrative Procedures Act. Chapter 95, Hawaii Revised Statutes, governing the issuance of such permits. The circuit court ruled that such administrative rules were unnecessary and denied appellants’ claim for relief. We reverse.
I.
It is undisputed that geothermal wells emit hydrogen sulfide (H2S) into the air Pursuant to HRS 342B-32. True submitted an application to DOH for issuance of an air pollution permit in conjunction with the construction and operation of twelve geothermal exploratory and developmental wells along a segment of the Kilauea Middle East Rift Zone.
On September 20, 1989, an Authority to Construct (ATC) permit was issued to True by DOH. At that time, DOH had no rules governing the emission of H2S into the air nor had the federal government adopted state ambient air quality standards for H2S DOH had been in the process of developing proposed rules governing H2S but none had been adopted. It is obvious that both True and DOH believed that emission of H2S from the geothermal wells may result in air pollution since a permit was sought and issued.
Finding itself in the anomalous situation of needing to regulate the construction and operation of geothermal wells, but having no regulatory guidelines, DOH’s response to True’s application was to issue a permit subject to 26 special conditions. Six of these conditions regulated the emission of H2S. In essence, these were the “rules” and ambient air quality standards for H2S. Such “rulemaking” is clearly not in compliance with the Hawai’i Administrative Procedures Act.
DOH argues that rulemaking requirements are not applicable because the conditions only apply to True’s permit, and that the conditions donor affect any future applications for air pollution permits. DOH’s argument logically means that it can set different rules and standards for each permit application and that it has an unbridled discretion in issuing permits.
II.
Setting emission standards for air pollutants does not involve merely a scientific assessment, but a balancing of interests. Air quality is an integral part of the quality of life and the public should have input in the matter. The language of HRS 342B-32 provides for permit issuance in accordance with rules which indicates that the Legislature envisioned public input into these matters.
Issuance of the permit which allowed True to emit certain amounts of H2S into the air had “a prospective and public impact that transcend[ed] the immediate interests of the actual parties whose rights were purportedly adjudicated in [the permit] proceedings.”
When an agency is accorded unbridled discretion in issuing permits as here, “the affected public cannot fairly anticipate or address the procedure as there is no specific provision in the statute or regulations which describe the determination process. The public and interested parties are without any firm knowledge of the factors that the agency would deem relevant and influential in its ultimate decision. The public has been afforded no meaningful opportunity to shape these criteria which affect their interest.
The fact that the appellants in this case had an opportunity to present their views before the circuit court at trial is clearly not an adequate substitute for the rulemaking process required under HRS 342B-32. The appellants comprise a small portion of the public. Others may have been interested in providing input in the matter but may not have been able to intervene in this lawsuit due to a lack of notice or resources. Moreover, fairness to the public and potential applicants for air pollution permits dictates that the rules adopted by DOH be known beforehand.
The circuit court in this case, sitting as the trier of fact, listened to the litigants’ evidence of what effect various amounts of H2S would have on air quality. It then determined that the amounts established by the conditional permit issued to True were sufficiently protective of the environment. In doing this, the trial judge imposed his personal standards of what the air quality should be. This is not the role of the trial court.
III.
This case was initiated by public activists; therefore, the focus is on the lack of input by the general public in a matter of public concern. However, the unbridled discretion exhibited by DOH also raises the issue of fairness and possibly constitutional due process rights with regard to future applicants for air pollution permits regarding H2S emission into the air.
Future applicants will have no official source to turn to for guidance. There will be no avenue to predict DOH’s actions in permit application procedures. Without established written standards by rules, no one can know whether permit applications will be revised fairly and consistently and whether considerations to grant or deny a permit will serve the purpose of the statute or are unlawful.
There will be no public confidence in such a system. As the U.S Supreme Court recognized: “[W]here there are no standards governing the exercise of discretion granted … the scheme permits and encourages an arbitrary and discriminatory enforcement of the law.”
IV.
HRS 342B-32 authorizes issuance of a permit in accordance with rules. Rules are necessary to ensure fairness and to minimize unbridled use of discretion of an agency.
In the absence of rules governing the standards of emissions of H2S into the air, DOH was required to refuse the issuance of the ATC permit to True pursuant to HRS 342B-32.
The order of the circuit court is reversed and this case is remanded for the issuance of injunctive relief ordering True to stop any action based on the ATC permit which allows construction that would emit H2S into the air, and for the issuance of an order requiring DOH to promulgate rules consistent with this opinion governing H2S emissions into the air.
Volume 2, Number 10 April 1992