{"id":301,"date":"2014-04-01T22:28:29","date_gmt":"2014-04-01T22:28:29","guid":{"rendered":"http:\/\/localhost:8888\/EH\/?p=301"},"modified":"2014-04-01T22:28:29","modified_gmt":"2014-04-01T22:28:29","slug":"appellate-court-overturns-judges-ruling-allowing-kauai-water-bottler-to-operate","status":"publish","type":"post","link":"https:\/\/environment-hawaii.org\/?p=301","title":{"rendered":"Appellate Court Overturns Judge\u2019s Ruling Allowing Kaua`i Water Bottler to Operate"},"content":{"rendered":"
\n

In a recent decision regarding the Kaua`i Planning Commission\u2019s denial of a Koloa water bottler\u2019s use and zoning permits, the Intermediate Court of Appeals has reaffirmed that county agencies are bound by the state Constitution to protect the public trust and that statements in general plans and zoning codes requiring the protection of water resources aren\u2019t just platitudes.<\/p>\n<\/div>\n

\n

On April 30, the ICA vacated a 2008 ruling by the 5th Circuit Court, which had found that two of the three permits Kaua`i Springs, Inc., sought from the Planning Commission should have been automatically approved. The higher court also vacated the lower court order that the third permit be issued, as well.<\/p>\n

The issue was remanded back to the Planning Commission, with instructions that it make appropriate assessments and require reasonable measures to protect water resources.<\/p>\n

\u201c[B]ecause Kaua`i Springs seeks to use the water for economic gain, this case requires that the Planning Commission give the permit application a higher level of scrutiny and, although Kaua`i Springs\u2019 use of the water is not illegal or improper\u00a0per se<\/i>, Kaua`i Springs carries the burden to justify the use of the water in light of the purposes protected by the public trust,\u201d the court wrote.<\/p>\n

The ICA had not finalized its ruling by press time. Once a final judgment is issued, Kaua`i Springs has 30 days to appeal to the Supreme Court. Attorney Robert Thomas, who represents the company, said it had not yet decided whether to appeal.<\/p>\n

\u201cWe were obviously disappointed. We think the appeals court got it wrong,\u201d he told\u00a0Environment Hawai`i<\/i>.<\/p>\n

In the meantime, Kaua`i Springs continues to operate under an injunction against the county imposed by the 5th Circuit Court, which the county did not oppose.<\/p>\n

Big Plans<\/i><\/b><\/p>\n

Kaua`i Springs owner James Satterfield first got the idea to bottle the island\u2019s water in 1992 after hurricane Iniki caused a massive power outage. He noticed a line of cars parked at Kahili mountain in Koloa, where a spring, tapped more than a century ago for sugar and now owned by Grove Farm, supplies about 50 to 60 customers with fresh water.<\/p>\n

\u201cThey were loading up until pumps were back up. That\u2019s when I said, we gotta bottle this. We gotta be bottling our own water,\u201d says Satterfield, who once ran a water bottling company in Alaska.<\/p>\n

In 2003, with a 15-year license from Makana Properties, LLC, for land with access to the eight-inch pipeline that taps the Kahili spring, Satterfield applied for and received a building permit and Class IV zoning permit from the county to build a 1,600-square-foot \u201cwatershed,\u201d which consisted mainly of two shipping containers connected by a roof.<\/p>\n

The county planner who processed the applications testified later that the shed \u201clooked … like any other ag building at the time.\u201d<\/p>\n

\u201cHowever, the \u2018watershed\u2019 was actually a semi-automated water-bottling facility capable of filling at least 1,000 five-gallon bottles per day,\u201d the county wrote in its opening brief to the ICA.<\/p>\n

Once the state Department of Health issued Kaua`i Springs a permit to bottle water in July 2004, Satterfield, his wife, and their five sons began operations.<\/p>\n

After they had been bottling water for about two years, the county received a complaint — allegedly from an employee from an O`ahu water bottler — that Kaua`i Springs was illegally operating an industrial facility on agricultural land. Satterfield argued to the county Planning Department that water bottling was an agricultural use. The county disagreed and required him to apply for a special use permit to operate a bottling facility in the Agriculture District. Because the property is zoned for agriculture and open space, he also had to apply for a county use permit and a Class IV zoning permit.<\/p>\n

On May 15, 2006, the Planning Department issued a cease-and-desist letter to Makana Properties, stating that unpermitted industrial processing and packaging was occurring on the property.<\/p>\n

Faced with being shut down, Kaua`i Springs eventually submitted the required permit applications on July 5, 2006. Satterfield later testified before the Planning Commission that he planned to increase his production substantially, from about 2,500 gallons a week to 35,000 gallons a week.<\/p>\n

The commission first took up the matter of Kaua`i Springs\u2019 permits at its August 8, 2006, meeting. As it struggled to get some basic scope-of-operations information, as well as answers to complex water-related legal issues, the commission delayed decision making meeting after meeting.<\/p>\n

\u201cAt this point there is no limit on how much water I can extract that I know of in any document that we have written out,\u201d Satterfield told the commission at one point. He added that he did not plan to ship any water off Kaua`i \u201cuntil we have saturated the island.\u201d<\/p>\n

In written testimony opposing the permits, Maka`ala Ka`aumoana, vice chair of Hui Ho`omalu I Ka `Aina, pointed out that Kaua`i Springs receives its water from Grove Farm, which is not authorized by the state Public Utilities Commission to purvey water.<\/p>\n

In response to an inquiry from the Planning Department, the PUC stated that, given what little information it had on the case, it was unlikely that Kaua`i Springs would need PUC regulation, although Grove Farm, on the other hand, might.<\/p>\n

Ka`aumoana also stated that the counties, as subdivisions of the state, have an obligation to conserve and protect Hawai`i\u2019s natural resources, including water. And her sentiments were supported by the Hawai`i Supreme Court. A little more than a week before the Planning Commission began deliberations on the permits, the Hawai`i Supreme Court ruled in\u00a0Kelly v. 1250 Oceanside Partners<\/i>\u00a0that counties, as subdivisions of the state, have public trust duties with regard to water.<\/p>\n

To determine what, if any, water-related permits Kaua`i Springs needed, the Planning Department consulted with the state Commission on Water Resource Management. The Water Commission is responsible for generating the state\u2019s Water Plan and allocating waters within designated management areas. Since Kaua`i has no such areas, Kaua`i Springs would not need a permit from the Water Commission unless the operation induced more water to flow from the spring or modified the source of the water, the commission\u2019s Dean Nakano stated in a letter to the Planning Department. Nakano also stated that \u201cground-water withdrawals from this project may affect stream flows, which may require an instream flow standard amendment.\u201d<\/p>\n

To appease some of the concern over his expansion plans, Satterfield offered to limit his water use to 1,000 gallons a day, which would still allow him to more than double his output at the time.<\/p>\n

Over the course of the Planning Commission\u2019s deliberations throughout the latter half of 2006, the deadlines to decide on two of the permits — the county use permit and the Class IV zoning permit — came and went. Without assent from Kaua`i Springs to extend those deadlines, the permits would have been automatically approved.<\/p>\n

The automatic approval deadline for the special use permit was January 31, 2007.<\/p>\n

With equivocal advice from the PUC and the Water Commission about Kaua`i Springs\u2019 operation, an automatic approval deadline looming, and little to no experience dealing with water issues, the Planning Commission voted on January 23, 2007 to deny all three permits.<\/p>\n

In its Decision and Order, the commission wrote, \u201cIn view of comments received from CWRM and PUC, the land use permit process should insure that all applicable requirements and regulatory processes relating to water rights, usage, and sale are satisfactorily complied with prior to taking action on the subject permits. The applicant … should also carry the burden of proof that the proposed use and sale of the water does not violate any applicable law administered by CWRM, the PUC or any other applicable regulatory agency.<\/p>\n

\u201cThere is no substantive evidence that the applicant has any legal standing and authority to extract and sell the water on a commercial basis.\u201d<\/p>\n

Satterfield asked the commission to reconsider its decision, but the commission denied his request at its February 15 meeting. He sought an appeal from the county and in March was again denied. So he turned to the 5th Circuit Court. On May 15, 2007, Circuit Judge Kathleen Watanabe granted him a preliminary injunction against the county.<\/p>\n

The Appeal<\/i><\/b><\/p>\n

\u201cUnder the pressure of a looming deadline when the last of three zoning permit applications submitted by Kaua`i Springs, Inc., would be automatically approved by operation of law, the Kaua`i Planning Commission cobbled together a hasty denial,\u201d wrote Thomas and Mark Murakami, attorneys for Kaua`i Springs, in their April 2008 appeal of the Planning Commission action to the 5th Circuit Court.<\/p>\n

\u201c[The Planning Commission] … based its denial on criteria wholly outside of its jurisdiction and competence, and wrongly concluded it had the authority to deny the zoning permits because it believed Kaua`i Springs \u2018extracts and sells\u2019 water,\u201d they wrote. The commission should have limited its deliberations to whether or not Kaua`i Springs\u2019 operation was in \u201charmony with its neighbors on land zoned \u2018Agriculture\u2019 and \u2018Open,\u2019\u201d they argued.<\/p>\n

In any case, they wrote, the county use permit and Class IV zoning permit were automatically approved on October 18, 2006, and November 2, 2006, respectively.<\/p>\n

They also argued that the letters to the Planning Commission from the PUC and Water Commission proved that both agencies \u201cdisclaimed any interest in Kaua`i Springs.\u201d<\/p>\n

Judge Watanabe agreed with them on all points.<\/p>\n

With regard to automatic approvals, Kaua`i Springs\u2019 attendance at and participation in all of the Planning Commission hearings did not constitute a waiver of any deadlines, she wrote in her September 17, 2008, order.<\/p>\n

\u201c[T]he record in this case is devoid of any evidence that Kaua`i Springs\u2019 existing or proposed uses might affect water resources subject to the public trust,\u201d she continued, adding that no evidence was presented that the company didn\u2019t carry its burden to show it was entitled to its permits.<\/p>\n

She ordered the commission to issue all three permits immediately and made the preliminary injunction permanent.<\/p>\n

ICA Appeal<\/i><\/b><\/p>\n

On October 30, 2008, the Planning Commission filed a notice of appeal with the ICA.<\/p>\n

\u201cIn this case, the court must decide whether a county agency may deny land-use permits for an activity involving the commercial exploitation of an unregulated ground-water resource, when the permit applicant fails to establish a legal right to remove and distribute waters subject to the public trust. Appellee, an ambitious water-bottling company with big aspirations to profit from Kaua`i\u2019s limited fresh-water resources, is attempting to circumvent the constitutional, statutory and common-law requirements standing in its way,\u201d the county\u2019s attorneys wrote in their opening brief. To assist in this case, the county retained David Minkin and Christopher Bayne from the firm of McCorriston Miller Mukai MacKinnon, LLP.<\/p>\n

\u201cThe Planning Commission attempted to reconcile its duty to both evaluate appellee\u2019s land-use application and protect Hawai`i\u2019s water resources by seeking input from other state agencies tasked with water regulation. After carefully evaluating appellee\u2019s application, the Planning Commission concluded that appellee failed to meet its burden of proof that the use of water was legal,\u201d they wrote.<\/p>\n

During the course of its deliberations, the Planning Commission was unable to get definitive answers from Kaua`i Springs or the Knudsen Trust, which owns the cave where the spring is located, on how much water is diverted. The scope of Kaua`i Springs\u2019 operation also remained unclear, with Satterfield twice amending his proposed operating capacity at the commission\u2019s meetings.<\/p>\n

\u201cAs late as the November 14 and 28, 2006, hearings, commission members were still uncertain about the number of hours appellee intended to operate in its facility on a daily basis and whether the water used was subject to chlorination,\u201d the county\u2019s attorneys wrote.<\/p>\n

With regard to Watanabe\u2019s conclusion that two of the permits Kaua`i Springs sought were automatically approved, they pointed out that language in the county code requires only assent from the applicant, not a waiver. And by its conduct at the Planning Commission meetings, Kaua`i Springs had, in fact, assented to an extension, they argued.<\/p>\n

\u201c\u2018Assent\u2019 is defined as \u2018verbal and nonverbal conduct reasonably interpreted as willingness,\u201d they wrote, citing Black\u2019s Law Dictionary.<\/p>\n

Not only did Satterfield and his attorney attend and participate in all of the Planning Commission\u2019s hearings, they negotiated conditions for the county use permit more than a month after the approval deadline. Such action \u201ccould only be construed by the Planning Commission as a willingness on the part of appellee to delay a final decision on the matter,\u201d the county\u2019s legal team wrote.<\/p>\n

Amicus Briefs<\/i><\/b><\/p>\n

Given the public trust issues involved, the Office of Hawaiian Affairs and and two environmental groups — Hawai`i\u2019s Thousand Friends and Malama Kaua`i — filed amicus briefs in the case.<\/p>\n

OHA\u2019s attorneys, Ernest Kimoto and John Van Dyke, argued that Kaua`i Springs was not entitled to the permits because the administrative process failed to evaluate the impact of the operation on traditional and customary native Hawaiian rights in accordance with the Hawai`i Supreme Court decision on\u00a0Ka Pa`akai O Ka`aina v. Land Use Commission<\/i>.<\/p>\n

Earthjustice attorney Isaac Moriwake, representing Hawai`i\u2019s Thousand Friends and Malama Kaua`i, added in his brief that simply consulting with other agencies does not fulfill the Planning Commission\u2019s public trust duty to protect water resources.<\/p>\n

\u201cRegardless of the statutory authority granted to other agencies, including CWRM and PUC, [the Kaua`i Planning Commission or KPC] remains subject to the constitutional public trust doctrine.<\/p>\n

\u201cMoreover, in this case, no other state or county agency besides KPC exercised jurisdiction over Kaua`i Springs. KPC sought input from both CWRM and PUC, and both declined to act at the time. Thus, even if\u00a0Kelly<\/i>\u00a0did not already reject the notion that KPC could pass off its public trust duties to other agencies, no other agency was willing to take any responsibility. This compelled KPC all the more to fulfill, and not abandon, its trustee obligations,\u201d Moriwake wrote.<\/p>\n

ICA Opinion<\/b><\/i><\/b><\/p>\n

After hearing oral arguments on March 14, 2012, the ICA issued a 51-page opinion on April 30 largely in favor of the county.<\/p>\n

With regard to the automatic approval issue, the ICA agreed with the county that Kaua`i Springs\u2019 actions could reasonably have been interpreted as assent.<\/p>\n

The ICA noted that the parties in the case don\u2019t dispute that the county has public trust duties, but disagree on the scope of those duties and the applicable standards for the three permits.<\/p>\n

To determine those, the ICA looked to the county zoning code, general plan, and state land use law. With regard to the zoning code, which governs county use and zoning permits, it states that the permits may be granted only if the Planning Commission finds that the permitted activity \u201cwill not cause any substantial harmful environmental consequences on the land of the applicant or on other lands or waters, and will not be inconsistent with the intent of the [zoning ordinance] and the General Plan,\u201d which contains some broad language in its vision statement about the county playing a role in protecting the island\u2019s waters.<\/p>\n

The state\u2019s land use law, Chapter 205, governs special use permits. The purpose of Chapter 205 is, in part, to conserve natural resources, including water, the ICA noted.<\/p>\n

\u201cTherefore, the Planning Commission\u2019s public trust duty under [the state Constitution], coupled with the state\u2019s power to create and delegate duties to the counties, establishes that the Planning Commission had a duty to conserve and protect water resources in considering whether to issue the special permit to Kaua`i Springs,\u201d the ICA wrote.<\/p>\n

Despite having clear standards, the Planning Commission failed to apply them, the ICA found.<\/p>\n

\u201cThe Planning Commission essentially required Kaua`i Springs to prove that its water usage — and the sale of the water by the Knudsen Trust and Grove Farm\u2019s operation of the water system — were legal and met all potentially applicable regulatory requirements. No concerns are articulated in the Planning Commission Order related per se to Kaua`i Springs\u2019 water bottling operation or its particular use of the water,\u201d the ICA wrote.<\/p>\n

Raising the Bar<\/i><\/b><\/p>\n

Although the company hasn\u2019t decided whether to appeal the ICA decision to the state Supreme Court, for now, the ruling is seen by some as a victory for the state\u2019s water resources.<\/p>\n

\u201cI think it\u2019s significant in raising the bar for planning agencies across the state. Now everyone\u2019s on notice you can\u2019t put blinders on towards the effect of these planning agencies\u2019 actions on the environment, [and] in this particular case, water,\u201d Moriwake said of the decision.<\/p>\n

\u201cAs far as water bottling goes, that\u2019s a large issue that remains unresolved. It seems like the issue of can a company stick a straw in the ground and start selling the water is problematic on various levels — the environmental protection aspect [and] … selling a public resource as well. This case really didn\u2019t resolve that,\u201d he added.<\/p>\n

For Satterfield, who says he is currently operating at his proposed capacity of 1,000 gallons per day, the case has been a waste of tax dollars, as well as his own.<\/p>\n

\u201cWe\u2019ve been operating the business for 10 years without complaint … and no quantity-of-water issues,\u201d he says. Throughout the appeals process, he added, \u201cwe have been suppressed. If they [his competition] wanted to stifle us, they did a good job.\u201d<\/p>\n

Kaua`i county officials did not respond to questions by press time.<\/p>\n

Whether counties or the state will ever develop a policy on water bottling remains to be seen.<\/p>\n

\u201cThe Water Commission itself has not faced this issue,\u201d says commission director William Tam.<\/p>\n

In 2008, then-state Rep. Mina Morita introduced a bill that would have taxed water bottlers, with the proceeds going toward invasive species control. The bill morphed into one that instead would have funded water protection and planning efforts by the state and counties, but eventually died.<\/p>\n

Last year, then-state Sen. Shan Tsutsui and six other senators introduced a bill to prevent taking and bottling water from any local source for export without a permit from the Water Commission. Currently, the commission only issues permits for withdrawals within designated water management areas.<\/p>\n

The bill passed first reading, but went nowhere and received no written testimony.<\/p>\n

That\u2019s just as well, says Tam.<\/p>\n

\u201cThere wouldn\u2019t be a basis for a permit unless it was a designated area. It would be an awkward way to handle things,\u201d he told\u00a0Environment Hawai`i<\/i>.<\/p>\n<\/div>\n

 <\/p>\n

Volume 23, Number 12 June 2013<\/div>\n","protected":false},"excerpt":{"rendered":"

In a recent decision regarding the Kaua`i Planning Commission’s denial of a Koloa water bottler’s use and zoning permits, the Intermediate Court of Appeals has reaffirmed that county agencies are bound by the state Constitution to protect the public trust … Continued<\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[35,28],"tags":[3],"class_list":["post-301","post","type-post","status-publish","format-standard","hentry","category-june-2013","category-water","tag-teresa-dawson"],"_links":{"self":[{"href":"https:\/\/environment-hawaii.org\/index.php?rest_route=\/wp\/v2\/posts\/301","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=301"}],"version-history":[{"count":0,"href":"https:\/\/environment-hawaii.org\/index.php?rest_route=\/wp\/v2\/posts\/301\/revisions"}],"wp:attachment":[{"href":"https:\/\/environment-hawaii.org\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=301"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/environment-hawaii.org\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=301"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/environment-hawaii.org\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=301"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}