The Hawai\u2018i Supreme Court has rendered a decision that closes a chapter in the ongoing litigation over the planned \u2018Aina Le\u2018a development.<\/p>\n\n\n\n
On December 17, the court ruled that the statute of limitations under a \u201ccatch-all\u201d provision in state law is six years \u2013 a ruling that allows a 2017 lawsuit brought by DW \u2018Aina Le\u2018a Development, LLC, against the state to move forward.<\/p>\n\n\n\n
DW \u2018Aina Le\u2018a (DWAL) is the predecessor owner of most of the thousand-plus acres of land in the South Kohala district of the Big Island where a large urban development has been proposed since the late 1980s. Despite the longevity of entitlements, for the most part, the land still looks much like it did at the time the\u00a0state Land Use Commission first placed\u00a0it into the state Urban land use district. About the only difference is the presence of several buildings in the more mauka part of the tract erected a decade ago in\u00a0a rush to fulfill a condition set by the\u00a0LUC to show the landowner\u2019s sincere intent to comply with affordable housing requirements.<\/p>\n\n\n\n
When the LUC determined that DWAL had not met that condition, it voted to revert the land use classification to Agricultural. Bridge \u2018Aina Le\u2018a, the company that owned most of the land at that time, appealed, arguing the LUC did not follow its own statutes and rules for redistricting. The judge hearing the case in 3rd Circuit Court, Elizabeth Strance, determined that the reversion was invalid. On appeal, the state Supreme Court disagreed with part of Strance\u2019s findings, but upheld it on the key issue, and the land was returned to the Urban district.<\/p>\n\n\n\n
Notwithstanding the fact that the land it was intending to develop was back in the Urban district, in 2017, DWAL sued the LUC, claiming damages of $200 million. The reclassification, it argued, increased the purchase price of the property DWAL was required to pay to Bridge, destroyed its \u201csophisticated funding arrangement\u201d with Asian investors for developing the property, and caused the company to have other increased costs and lost business opportunities.<\/p>\n\n\n\n
The state removed the lawsuit to federal court, where Judge Susan Oki Mollway determined that the lawsuit was untimely, since it was filed more than two years after the alleged injury.<\/p>\n\n\n\n
Mollway\u2019s decision relied upon a prior decision of the state\u2019s Intermediate Court of Appeals, Maunalua Bay Beach Ohana 28 v. State. <\/em>On appeal to the 9th Circuit, however, the appellate court found that the Maunalua case <\/em>was contradicted by the state Supreme Court\u2019s ruling in Kaho\u2018ohanohano v. State.<\/em><\/p>\n\n\n\n Before making any determination on the merits of the case before it, the appellate court decided, on March 7, 2019, to have the state Supreme Court weigh in on the subject of what statute of limitations should govern.<\/p>\n\n\n\n The state pressed its case for the two-year statute of limitations, based on HRS \u00a7661-5 and \u00a7657-7. DWAL argued for six years, relying on a \u201ccatch-all\u201d provision for claims not governed by other statutes, HRS \u00a7657-1(4). And an amicus, the Owners Counsel of America, suggested the limit should be 20 years, relying on the state\u2019s law on adverse possession (HRS \u00a7657-31).<\/p>\n\n\n\n In its December ruling, the court found that DWAL\u2019s claims were based on Article 1, Section 20 of the Hawai\u2018i Constitution, which states: \u201cPrivate property shall not be taken or damaged for public use without just compensation.\u201d Because this clause does not contain the phrase that it applies \u201cas provided by law,\u201d the court\u2019s ruling states, the clause is therefore self-executing \u201cand needs no further legislation to facilitate a private right of action.\u201d<\/p>\n\n\n\n In conclusion, all five Supreme Court justices agreed: \u201cthe statute of limitations for a takings claim under the Hawai\u2018i Constitution is six years pursuant to HRS \u00a7657-1(4).\u201d<\/p>\n\n\n\n What next?<\/p>\n\n\n\n The case now returns to the 9th Circuit and then probably back to federal court in Honolulu. But, as one of the sources close to the litigation said, \u201cWhat exactly happens depends on a couple of decision points by those courts.\u201d<\/p>\n\n\n\n County Added to Lawsuit<\/strong><\/p>\n\n\n\n Meanwhile, \u2018Aina Le\u2018a, Inc., the successor to DWAL as the parent company developing the property, is being sued by Iron Horse Credit, LLC. That\u2019s the company whose $5 million loan in 2019 allowed \u2018Aina Le\u2018a to emerge from bankruptcy. Since June, Iron Horse claims in the lawsuit it filed in 3rd Circuit Court on October 13, \u2018Aina Le\u2018a has been in default. Iron Horse is seeking an order allowing it to foreclose on \u2018Aina Le\u2018a\u2019s property, which it pledged as collateral.<\/p>\n\n\n\n In its reply, filed November 29, \u2018Aina Le\u2018a deflected blame for its inability to perform on the loan to the County of Hawai\u2018i and its planning director, who has insisted that \u2018Aina Le\u2018a prepare a new environmental impact statement for its proposed development.<\/p>\n\n\n\n The next day, Mike Matsukawa, \u2018Aina\u00a0Le\u2018a\u2019s attorney in this case, filed with the\u00a0court a third-party complaint against the county and then-Planning Director Mike Yee.<\/p>\n\n\n\n That complaint argues that \u2018Aina Le\u2018a should never have been required to prepare a supplemental EIS for its project.<\/p>\n\n\n\n What\u2019s more, the very fact that \u2018Aina Le\u2018a had to enter bankruptcy is placed on the county\u2019s shoulders. In 2017, the planning director issued a stop-work order after discovering that \u2018Aina Le\u2018a\u2019s contractors were on site and working on the affordable housing site. That stop-work order, Matsukawa writes, \u201ccaused the third-party plaintiff, \u2018Aina Le\u2018a, Inc., to seek bankruptcy protection.\u201d<\/p>\n\n\n\n Many of the same arguments had been brought by \u2018Aina Le\u2018a in a lawsuit filed against the county last March. As Environment Hawai\u2018i <\/em>reported last month, there had been no new filings in that case following the ruling by Judge Robert Kim against \u2018Aina Le\u2018a\u2019s motion for partial summary judgment.<\/p>\n\n\n\n But on December 11, four days after Mayor Mitch Roth was sworn in, the county and Lulana Gardens, the subsidiary of \u2018Aina Le\u2018a that filed the complaint, filed a stipulation with the court.<\/p>\n\n\n\n \u201cThe parties plan on starting settlement negotiations, which could lead to the resolution of this case,\u201d they stipulated. They then asked the court to postpone any ruling on the county\u2019s motion to dismiss \u201cuntil the parties file a second stipulation which will either resolve the case or ask the court to issue a ruling on the county\u2019s motion to dismiss.\u201d<\/p>\n\n\n\n As reported elsewhere in this issue, Robert Wessels, CEO of \u2018Aina Le\u2018a, donated $3,000 to Roth\u2019s campaign, while \u2018Aina Le\u2018a donated $1,000.<\/p>\n\n\n\n \u2014 Patricia Tummons<\/strong><\/p>\n","protected":false},"excerpt":{"rendered":" The Hawai‘i Supreme Court has rendered a decision that closes a chapter in the ongoing litigation over the planned ‘Aina Le‘a development. On December 17, the court ruled that the statute of limitations under a “catch-all” provision in state law … Continued<\/a><\/p>\n","protected":false},"author":1,"featured_media":7162,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[478],"tags":[7],"class_list":["post-13207","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-january-2021","tag-patricia-tummons"],"_links":{"self":[{"href":"https:\/\/environment-hawaii.org\/index.php?rest_route=\/wp\/v2\/posts\/13207","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/environment-hawaii.org\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/environment-hawaii.org\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/environment-hawaii.org\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/environment-hawaii.org\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=13207"}],"version-history":[{"count":0,"href":"https:\/\/environment-hawaii.org\/index.php?rest_route=\/wp\/v2\/posts\/13207\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/environment-hawaii.org\/index.php?rest_route=\/wp\/v2\/media\/7162"}],"wp:attachment":[{"href":"https:\/\/environment-hawaii.org\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=13207"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/environment-hawaii.org\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=13207"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/environment-hawaii.org\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=13207"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}