\u201cWe ended up on the short end of this opinion…. Minds immeasurably superior to ours will have to do the analysis on this one, at least for now,\u201d wrote Honolulu attorney Robert Thomas in a recent post on his blog, inversecondemnation.com.<\/p>\n
After a decade of bottling mountain spring water in Koloa, Thomas\u2019 client, Kaua`i Springs, Inc., lost its fight for the Use, Special, and Class IV Zoning permits it needs to operate.<\/p>\n
On February 28, in a 107-page decision, the Hawai`i Supreme Court found that the Kaua`i Planning Commission had properly denied the permits in January 2007. However, the court directed the commission to clarify the findings and conclusions of its Decision and Order so they are consistent with the court\u2019s decisions regarding the protection of public trust resources.<\/p>\n
Like its 2006 decision in\u00a0Kelly v. 1250 Oceanside Partners,<\/i>\u00a0which involved marine pollution caused by excessive grading, the court\u2019s Kaua`i Springs decision reaffirms that the public trust doctrine requires state and county agencies \u2013 not just the Commission on Water Resource Management \u2013 to \u201ctake the initiative in considering, protecting, and advancing public rights in [trust resources] at every stage of the planning and decision-making process.\u201d<\/p>\n
Furthermore, the court found, agencies must determine whether proposed water uses are reasonable and beneficial, and applicants carry the burden to prove the proposed use won\u2019t affect a protected use. (Protected uses include the traditional and customary Hawaiian practices, the maintenance of waters in their natural state, and municipal drinking water, among other things.)<\/p>\n
How does the ruling affect future decisions by government agencies that deal, even in small, tangential ways, with water?<\/p>\n
For now, Thomas is mum on the subject, and with regard to how it affects his client, he also has little to say.<\/p>\n
\u201cIn cases that aren\u2019t finally resolved, I try not to say too much. If the court resolved it, I might have more to say,\u201d he says. \u201cObviously, we\u2019re disappointed. … It was not to be.\u201d<\/p>\n
Whether or not he agrees with the decision, it\u2019s the law now, he says.<\/p>\n
Throughout the appeals process, Kaua`i Springs has continued to bottle water under an injunction against the county ordered by 5th Circuit Judge Kathleen Watanabe.<\/p>\n
How the Supreme Court\u2019s decision affects the operation is unclear.<\/p>\n
\u201cWe\u2019ll have to figure that out with the Planning Commission,\u201d Thomas says. \u201cThis has gone on so long now … a lot of people who were on the county side may not be there.\u201d<\/p>\n
In an email, Kaua`i County public information officer Beth Tokioka states that the Kaua`i Planning Department is still reviewing how the decision affects the continued operation of Kaua`i Springs.<\/p>\n
She adds, however, that the Supreme Court\u2019s decision \u201cmakes it clear that all state and county agencies that make decisions that affect water and its uses must proceed through a public trust analysis so as to ensure that such uses protect the public trust resource and are reasonable and beneficial\u2026.<\/p>\n
\u201cAs outlined in the [decision], the county took its public trust duties very seriously in this case as it does in all cases. The county is highly aware of its public trust duties and obligations under the law and \u2026 remains committed to ensure that any decision it makes regarding water and its uses complies with its obligation under the public trust.\u201d<\/p>\n
Water Commission director William Tam predicts that the Supreme Court\u2019s decision may lead to some \u201cdifficult procedural issues.\u201d<\/p>\n
With counties now apparently having to analyze things like alternative soruces of water and determining what reasonable and beneficial uses are when reviewing things like zoning permits, counties may start asking the Water Commission for advice, he says.<\/p>\n
\u201cIt will heighten the water-land relationship,\u201d he says.<\/p>\n
The Water Commission was scheduled to discuss the Kaua`i Springs case at its March 21 meeting.<\/p>\n
Background<\/i><\/b>
\nIn 2003, Kaua`i Springs obtained building and zoning permits from the county for a 1,600-square-foot \u201cwatershed.\u201d A year later, the state Department of Health granted it a permit to bottle water.\u00a0The Garden Island<\/i>\u00a0newspaper shortly thereafter ran a feature story on Kaua`i Springs, a new entry in the local water bottling market that until then had been dominated by O`ahu-based water bottlers.<\/p>\n
Under a licensing agreement with the EAK Knudsen Trust, Kaua`i Springs takes water from a spring in Kahili mountain that has been diverted miles away to a tank owned by Grove Farm Company. The trust owns the land surrounding the spring as well as the transmission system that delivers the water. Grove Farm operates the system, and its water tank serves Kaua`i Springs as well as dozens of residences.<\/p>\n
Water that is not used overflows the tank into Waihohonu Stream.<\/p>\n
Spurred by a complaint, allegedly from an employee of an O`ahu water bottler, the Kaua`i Planning Department in 2006 issued a cease and desist letter to Kaua`i Springs\u2019 landlord, Makana Properties, charging that industrial processing and packaging were occurring on the property, which lies in the state Agricultural District, without the necessary permits.<\/p>\n
After some initial resistance, Kaua`i Springs applied to the county for a Use permit, a Special permit, and a Class IV zoning permit.<\/p>\n
During the commission\u2019s hearings on the permits, Kaua`i Springs owner Jim Satterfield testified that he planned to increase production from 2,500 gallons a week to 35,000 gallons a week. He went on to say that there was no limit on how much water he could extract.<\/p>\n
The Planning Commission asked the state Water Commission and the Public Utilities Commission whether either of those agencies would require Kaua`i Springs to apply for permits for its operation. The Water Commission said it might require permits under certain circumstances, such as if the source of the water had been modified (as it apparently had been). The PUC said Grove Farm might be required to obtain authorization to sell water as a public utility, but Kaua`i Springs would probably not.<\/p>\n
As the Planning Commission continued to seek more information from Kaua`i Springs, the deadlines to decide on the Use permit and the Class IV Zoning permit passed. The commission planned to decide on all three permits by the Special permit\u2019s approval deadline, January 31, 2007.<\/p>\n
Given the PUC\u2019s and Water Commission\u2019s advice, and the limited information provided by Kaua`i Springs, the Planning Commission denied the permits on January 23 of that year.<\/p>\n
In its Decision and Order, the commission wrote that the land use permit process should \u201cinsure 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.\u201d<\/p>\n
The Planning Commission found that Kaua`i Springs failed to provide any substantive evidence that it had the authority to extract and sell the water.<\/p>\n
Satterfield appealed to the 5th Circuit Court, which on April 30, 2007, found in his favor and granted him a preliminary injunction against the county. Circuit Judge Watanabe ordered the Planning Commission to issue the permits.<\/p>\n
A year ago, the Intermediate Court of Appeals vacated Watanabe\u2019s decision, but still found that the Planning Commission\u2019s decision was \u201carbitrary and capricious.\u201d The ICA remanded the case with instructions on how to better review the permits in light of the Planning Commission\u2019s duty to protect public trust resources.<\/p>\n
\u201c[T]he 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 found.<\/p>\n
Despite standards set forth in the Kaua`i General Plan, zoning ordinances and the state\u2019s land use law requiring the protection of water, however, the Planning Commission failed to apply them, the ICA found. The Planning Commission merely focused on whether Kaua`i Springs\u2019 water use was \u201clegal and met all potentially applicable regulatory requirements,\u201d it stated in its decision.<\/p>\n
Automatic Approvals<\/i><\/b><\/i>
\nLast November, the Supreme Court heard oral arguments in the case. In its final decision, the majority of the Supreme Court supported some of the ICA\u2019s findings and disagreed with others.<\/p>\n
The court\u2019s decision first addressed whether the Use and Class IV Zoning permits had been automatically approved when the Planning Commission failed to decide on them in time. Kaua`i Springs argued that they had been approved. The ICA and the Supreme Court, however, found that Kaua`i Springs had, by its actions and behavior, assented to a time extension.<\/p>\n
The ICA had focused on the fact that the company and its representatives had continued to negotiate on permit terms, and that Kaua`i Springs had even amended its permit application, then retracted the amendment, after approval deadlines had passed. The Supreme Court, however, found that the ICA erred when it used Kaua`i Springs\u2019 post-deadline behavior as evidence of assent.<\/p>\n
Assent must occur\u00a0before<\/i>\u00a0an automatic approval deadline, and in this case, Kaua`i Springs had assented to an extension before the deadlines for the Use and Class IV Zoning permits, the court found.<\/p>\n
\u201c[B]oth Kaua`i Springs and the Planning Commission treated the application for the three permits as comprising a consolidated application request. In accordance with this understanding, the parties agreed, as repeatedly evidenced by their conduct, that the Planning Commission would be required to render a decision on the consolidated application by January 31, 2007, which was the latest deadline possible for the Special Permit,\u201d wrote Justice Richard Pollack in the majority decision.<\/p>\n
Kaua`i Springs needed both the Special permit and the Use permit to operate in the Agriculture District. Thus, \u201c[f]rom the Planning Commission\u2019s position, it would have been illogical and impractical to decide separately upon the Use Permit and Special Permit, given the similarity of the permits\u2019 requirements,\u201d he wrote.<\/p>\n
Arbitrary and Capricious<\/b><\/i><\/b>
\nThe Supreme Court majority also disagreed with the ICA\u2019s conclusion that the Planning Commission\u2019s decision was arbitrary and capricious. In the ICA\u2019s view, the Planning Commission\u2019s requirement that Kaua`i Springs prove that its proposed use complies with all applicable laws administered by the Water Commission, the PUC, or other applicable regulatory agencies created \u201can obscure and indefinite burden of proof.\u201d<\/p>\n
Kaua`i Springs had similarly argued that the public trust doctrine doesn\u2019t empower agencies to deny applications based on a simple lack of information that is \u201cwithin its [the agency\u2019s] power to obtain, thus shifting the burden to the applicant.\u201d<\/p>\n
However, the Supreme Court found, \u201ca lack of information from the applicant is exactly the reason an agency is empowered to deny a proposed use of a public trust resource.\u201d And in this case, it stated, Kaua`i Springs failed to prove it had the legal authority to put to commercial use a public trust water resource.<\/p>\n
\u201cThere is also no indication in the record of the substance of any water purchase agreement, nor of the water supplier\u2019s right to make the public trust resource commercially available,\u201d the decision states.<\/p>\n
The Planning Commission had identified specific permits or authorizations Kaua`i Springs might need from the Water Commission and the PUC, the decision continues.<\/p>\n
\u201cThe Planning Commission correctly imposed on Kaua`i Springs the burden to demonstrate the propriety of its proposed use of the public trust resource, which, under the circumstances of this case, required Kaua`i Springs to demonstrate that any necessary permits and applicable regulations from the Water Commission and PUC were complied with,\u201d the decision states.<\/p>\n
Thus, the court concluded, the Planning Commission\u2019s decision was neither arbitrary nor capricious.<\/p>\n
Those seeking a commercial use of water use can\u2019t simply say a use is grandfathered or get some sort of perfunctory response from agencies and that\u2019s the end of it, says Earthjustice attorney Isaac Moriwake. Arguments Moriwake raised in an amicus brief in the case, filed on behalf of Hawai`i\u2019s Thousand Friends and Malama Kaua`i, closely track those made by the Hawai`i Supreme Court.<\/p>\n
\u201cIn so many cases in land development, despite questions, [agencies] just punt, issue a permit subject to conditions that never get enforced and are practically meaningless,\u201d he says.<\/p>\n
In the Kaua`i Springs case, the responses the PUC and Water Commission gave to the Planning Commission were inconclusive, Moriwake says.<\/p>\n
\u201cAt that point do they sweep it under the rug and keep it hanging? \u2026 To the Kaua`i Planning Commission\u2019s great credit, they didn\u2019t just try to sweep this under the rug.\u201d<\/p>\n
In backing the Planning Commission\u2019s denial of Kaua`i Springs\u2019 permits, the Supreme Court\u2019s opinion clarifies that under a trust fiduciary duty, that kidh of business as usual is unacceptable, he says.<\/p>\n
Dissent and a Rebuttal<\/i><\/b><\/i>
\nThe Supreme Court\u2019s decision was not unanimous. Chief Justice Mark Recktenwald issued a 13-page dissent in the case.<\/p>\n
\u201cThis case requires us to address how [the public trust doctrine] should be applied by governmental entities other than the Commission on Water Resource Management, in light of our decision in\u00a0Kelly<\/i>,\u201d Recktenwald wrote.<\/p>\n
He pointed out that the ICA had considered the role of the Kaua`i Planning Commission first, then assessed additional duties imposed by the public trust doctrine.<\/p>\n
The ICA decision directed the Planning Commission to simply make \u201cappropriate assessments and require reasonable measures to protect water resources.\u201d<\/p>\n
\u201cIn contrast,\u201d Recktenwald wrote, \u201cthe majority\u2019s approach requires that the applicant prove that all potentially applicable regulatory requirements, including those applicable to third parties not under the applicant\u2019s control, have been satisfied.\u201d<\/p>\n
The majority\u2019s decision would require Grove Farm \u201cto seek a declaration from the PUC on its status as a utility,\u201d he continued. \u201cIt is unclear … how that additional regulatory review will further the purposes of the public trust doctrine. And, if Grove Farm decides not to pursue it, Kaua`i Springs\u2019 application will be at an end.\u201d<\/p>\n
Recktenwald also pointed out that the Planning Commission did not seek a decision supporting its denial of the permits. Rather, the commission had agreed with the ICA\u2019s decision to remand the matter, and with the court\u2019s directions on how to evaluate the permits.<\/p>\n
\u201c[T]he majority is crafting an outcome that neither party sought,\u201d he wrote.<\/p>\n
To Recktenwald, the majority\u2019s decision went too far.<\/p>\n
\u201cThere are a large and diverse array of agencies that might issue permits or approvals that could in some way affect a water resource. Would the Kaua`i building division, in considering a request by Kaua`i Springs for a permit to expand its facility, be obligated to consider Kaua`i Springs\u2019 use of the water that would be processed in the expanded facility? What if Kaua`i Springs sought to add a second floor to its processing facility, and wanted to install an elevator to access it \u2013 would the Boiler and Elevator Inspection Branch of the Department of Occupational Safety and Health be required to consider the impact of granting an elevator installation permit on water use issues? The answers presumably would depend on the extent to which those agencies had a regulatory interest in water use. Thus, starting the analysis with an examination of the agency\u2019s regulatory mandate, as suggested by the ICA, makes sense,\u201d he wrote.<\/p>\n
The seemingly extreme examples Recktenwald posed don\u2019t seem to concern Moriwake.<\/p>\n
\u201cThat\u2019s the job of dissents \u2026. You throw out the parade of horribles [to try to illustrate] that this rule, left to its ultimate conclusion, is going to result in disaster,\u201d he says.<\/p>\n
But the majority opinion simply clarifies what the public trust requires of private companies that wish to use public resources for profit, he argues.<\/p>\n
The Supreme Court concluded that the standards laid out by the ICA incorrectly inverted the public trust doctrine by mandating the evaluation of \u201cappropriate assessments\u201d and \u201creasonable measures\u201d\u00a0before<\/i>\u00a0the propriety of the proposed use has been assessed.<\/p>\n
\u201c[T]he ICA\u2019s proposed test is deficient because it does not provide the degree of protection of the public trust required by the law that our prior holdings recognize,\u201d the majority decision states.<\/p>\n
Moriwake notes that the standard to make \u201cappropriate assessments\u201d and impose \u201creasonable meaures\u201d \u2013 terms drawn from the\u00a0Kelly<\/i>\u00a0case \u2013 comes into play late in the planning process. Had the Supreme Court agreed with the ICA, it would have set a \u201cdiluted and superficial standard,\u201d he says.<\/p>\n
WMA Designation<\/i><\/b>
\nDesignation all of Hawai`i as a water management area (WMA), which is what was originally proposed when the state Water Code was created, would give the Water Commission more authority over water issues statewide. Designation might \u201cmake it clear that there\u2019s a primary agency where the buck stops,\u201d Moriwake suggests. Currently, only Moloka`i, most of O`ahu, and as small part of Maui have been designated.<\/p>\n
But in the absence of statewide designation, \u201cwe\u2019re not going to say it\u2019s a water free for all. The state has a trust duty,\u201d he adds.<\/p>\n
While designation might help centralize decision making with regard to water, it comes with its own problems, according to the Water Commission\u2019s Tam. Once an area is designated, the work required to simply process water use permits is enormous, he says.<\/p>\n
He also warned against letting isolated conflicts drive designation.<\/p>\n
\u201cIn areas not under stress, you don\u2019t need to permit everything right now because of a conflict. There\u2019s always the danger of the tail wagging the dog, of using a water conflict to get the zoning,\u201d he says.<\/p>\n
\u201cWe\u2019ve got a lot on our plate,\u201d he says, referring to three contested case hearings on Maui, management of Central O`ahu water use, a petition to designate an aquifer in Kona, and stream issues on Kaua`i.<\/p>\n
(For more background on this case, see the story published in our June 2013 edition, \u201cKaua`i Water Bottler\u2019s Permit is Vacated by Appellate Court.”)<\/p>\n
<\/p>\n","protected":false},"excerpt":{"rendered":"
“We ended up on the short end of this opinion…. Minds immeasurably superior to ours will have to do the analysis on this one, at least for now,” wrote Honolulu attorney Robert Thomas in a recent post on his blog, … 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":[38,28],"tags":[],"class_list":["post-410","post","type-post","status-publish","format-standard","hentry","category-april-2014","category-water"],"_links":{"self":[{"href":"https:\/\/environment-hawaii.org\/index.php?rest_route=\/wp\/v2\/posts\/410","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=410"}],"version-history":[{"count":0,"href":"https:\/\/environment-hawaii.org\/index.php?rest_route=\/wp\/v2\/posts\/410\/revisions"}],"wp:attachment":[{"href":"https:\/\/environment-hawaii.org\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=410"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/environment-hawaii.org\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=410"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/environment-hawaii.org\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=410"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}