Friday, May 30, 2008

Can we get that in writing!?

State v. Shannon (HSC May 29, 2008)

Background. Shannon pleaded guilty to criminal trespass in the second degree and moved for a deferred acceptance of a guilty plea on February 11, 2005. The district court granted the motion and deferred for a period of one year. After entering the DAG, Shannon was arrested in an unrelated incident in violation of one of the many conditions imposed during the deferral period. The State orally moved to revoke the acceptance of the DAG plea on January 27, 2006. After continuing the hearing twice, the district court rejected all of Shannon's arguments--including the argument that he successfully completed the deferral period as of February 11, 2006 because the State failed to toll the period by filing a written motion to revoke--and revoked Shannon's motion to defer.

The ICA reversed because the State was required to give Shannon written notice of the terms and conditions of the DAG. Judge Nakamura dissented and would have adopted the federal courts' application of actual notice. The State appealed to the HSC.

Probation's Kissing Cousin--the DAG plea. As with probation, the State's motion to set aside a DAG plea tolls the deferral period and the sentencing court may grant the motion even after the deferral period ended. State v. Kaufman, 92 Hawai'i 222, 323, 991 P.2d 832, 833 (2000). This is because a DAG plea is "closely analogous" to probation. Id. at 328, 991 P.2d at 838. The HSC observed that a probationer must "be given a written copy of any requirements imposed . . . to enable the [probationer] to guide [himself or herself] accordingly." HRS § 706-624(3). Another reason for the written copy is to ensure that the probationer does not forget the terms and conditions. Commentary to HRS § 706-624(3). This rationale for probation, according to the HSC, is equally applicable to the DAG plea. The HSC thus held that the defendant under a DAG plea must be given a written copy of the terms and conditions of the deferral period as would any probationer.

Written Notice Leaves no room for "Actual Notice." The HSC moved on to reject the State's claim that "actual notice" of the terms and conditions without receiving written notice sufficed. "Actual notice" is permitted by federal courts regardless of the statutory requirement that a defendant be afforded written notice. U.S. v. Arbizu, 431 F.3d 169 (5th Cir. 2005). The probationer "shall be given a written copy" of the terms and conditions of the probation. HRS § 706-624(3). The HSC noted that generally, "shall" indicates the legislature's intention to make a provision mandatory rather than discretionary. Gray v. Admin. Dir. of the Court, 84 Hawai'i 130, 150 n. 17, 931 P.2d 580, 592 n. 17 (1997). Thus, the adoption of the "actual notice" rule runs afoul with the clear and unambiguous statute requiring a written copy.

When does "Shall" mean Shall? But "shall" does not always mean must. It may be considered discretionary if (1) the statute's purpose confutes the probability of a compulsory statutory design; (2) "unjust consequences" result if the statute is mandatory; and (3) no advantage is lost, no right destroyed, nor benefit sacrificed. Leslie v. Bd. of Appeals of County of Hawaii, 109 Hawai'i 384, 394, 126 P.3d 1071, 1081 (2006) (citing Perry v. Planning Com'n of Hawaii County, 62 Haw. 666, 619 P.2d 95 (1980)). The HSC applied the Perry test to determine if the "shall" in HRS § 706-624(3) was indeed mandatory. First, nothing in HRS chapter 706 part II and HRS chapter 853 disputes the conclusion that HRS § 706-624(3) is compulsory. In fact, according to the HSC, because the purpose is rehabilitation while remaining conviction-free, "shall" appears to be mandatory duty upon the court. Second, "unjust consequences" would result if some defendants are given written conditions while others may only be apprised orally. This disparate enforcement would be unfair. It is important to note that the "unjust consequences" are viewed in the abstract rather than to the underlying facts. Finally, the HSC held that leaving written copies to the discretion of the court would deprive individual defendants and society as a whole the benefits of the DAG plea.

Motions to Revoke must be in Writing too. The HSC further noted that HRS § 706-627(1) tolls the probation period when the motion to revoke is filed. Thus, according to the HSC, a motion to revoke must "be filed," which means that it must be in writing. Oral motions simply won't do because due process protections require the defendant to be apprised of the State's intention to revoke and allow time to contest that revocation. Because probation is "closely analogous" to the DAG plea, the State's motion to set aside a DAG plea must also be in writing. The State here failed to do that so that too was in error.

Justice Nakayama's Dissent. Justice Nakayama took issue with the incorporation of HRS § 706-624(3) as a "condition" for a DAG plea. She noted that under the DAG statute, "proceedings may be deferred upon any of the conditions specified by section 706-624." HRS § 853-1(b). That a probationer must receive written terms and conditions of probation is not in itself a "condition" and thus, according to Justice Nakayama, HRS § 853-1(b) as it applies here is ambiguous. Because it is ambiguous, Justice Nakayama examined the legislative history and concluded that the DAG plea is not a right or privilege, but rather an "act of legislative grace." Furthermore, because HRS § 706-624(3) is not a "condition" the DAG statute is silent on the issue of whether a person moving for a DAG plea must receive written terms and conditions of the deferral period. In answering this silence, Justice Nakayama finds the federal precedent persuasive and would have adopted the "actual notice" in this case. Justice Nakayama also believed that HRS § 706-627(1) does not expressly require the State to file a written motion to revoke and thus that too was in error. Justice Nakayama also examined the other issues raised by the Shannon and found none of them persuasive. She would have reversed the ICA.

Conditional Discharge--the new Hybrid model. So if probation is "closely analogous" to the DAG or DANC plea, then what about a conditional discharge? When a person pleads or is found guilty to promoting a certain drugs, "the court, without entering a judgment of guilt and with the consent of the accused, may defer further proceedings and place the accused on probation upon terms and conditions. Upon violation of a term or condition, the court may enter an adjudication of guilt and proceed as otherwise provided." HRS § 712-1255. A conditional discharge appears to be a hybrid of the DAG plea and probation. In some ways, it's like a DAG because the court defers the acceptance of a guilty plea for a period of time. However, unlike the DAG plea, the court definitively places the person on probation rather than incorporates the probation statute. So is a conditional discharge just as "closely analogous" to probation? Better yet, is a conditional discharge really probation without a conviction?

For the majority, there is no need to answer this question. Be it probation or a DAG plea, the court still has to provide written terms and conditions of the conditional discharge and the State would still have to file a motion to revoke or set aside the conditional discharge. But the distinction may be relevant to Justice Nakayama. If the incorporating clause under the DAG statute is ambiguous for her, then what about HRS § 712-1255? It allows the court to "place the accused on probation upon terms and conditions" rather than incorporating the mere "conditions" of the probation statute. Does a statute directing the court to place a person on probation mean more than the conditions of probation but the procedural requirements of probation too? If this case is any indicator, then perhaps a majority would agree and Justice Nakayama would concur. It is, however, unknown for now.

Sunday, May 25, 2008

"Action"-packed Algae not Covered by old EIS.

Ohana Pale Ke Ao v. Board of Agriculture (ICA May 21, 2008)

Background. Mera Pharmaceuticals has been a tenant on a science and technology park owned by the State just outside of Kailua-Kona on the Big Island since 1995. The park itself was subject to an environmental impact statement (EIS) in 1976 to address the "support facilities" of the park and again in 1985, which recommended aquaculture products, including the housing of algae. In 2004 and 2005, Mera requested from the Board of Agriculture a permit to import genetically-modified strains of an micro-algae primarily to determine if the algae would have therapeutic value (algae often is the basis for antibiotics). Mera was required to get a permit from the Board for this particular kind of algae. HAR § 4-71A-22. The Board approved the permit without preparing an environmental assessment. Environmentalist organizations filed a lawsuit seeking declaratory judgment and injunctive relief on the grounds that the approval by the Board violated the Hawai'i Environmental Protection Act (HEPA). The circuit court affirmed; the Board appealed.

Exclusive Authority v. Unlimited Authority. When an "action" proposing the use of state or county lands requires agency approval, that agency must prepare an environmental assessment first. HRS § 343-5. The Board is such an agency and Mera is such an applicant. The ICA also concluded, over the Board's contention, that importation of genetically-modified algae was such an "action." The ICA held that even though HRS chapter 150A and the Board's importation rules vest the Board with exclusive authority to approve the permit, the plain language of the HEPA provision still required the Board to prepare an environmental assessment before exercising that authority. In other words, the Board's argument is a non sequitur. Just because an agency has exclusive authority to do something does not mean that it can exercise that authority without limitation. Even though the Board is the only agency that can give Mera the permit, it still has to comply with HEPA before approving the permit.

Indulgent Dictum? The ICA also pointed out that, based on the policy statement in HRS § 343-1, the legislature intended to "monitor human activity that poses a threat to the quality of the environment, upon which we depend for our collective well-being." This quick foray into legislative intent was sheer indulgence. The ICA noted that it "need not consider it, given the plain language" of the operative statute. This only further suggests that if the language is plain (and the result not absurd), the analysis is over.

When no Conflict, BOTH Apply. The Board also argued that the legislature intended the comprehensive controlling statutes in HRS chapter 150A to constitute an "exclusive mechanism" for importing the algae. When a general statute and a more specific one covering the same subject matter create a "plainly irreconcilable" conflict, the general statute must yield. In re Doe, 109 Hawai'i 399, 409, 126 P.3d 1086, 1096 (2006). However, when the statutes simply overlap in application, effect will be given to both whenever possible, "as repeal by implication is disfavored." Id. According to the ICA, nothing in HRS chapter 150A conflicts with chapter 343; they do not conflict and both can be given effect. The Board, therefore, must prepare the environmental assessment before acting on Mera's permit.

The ICA invoked a rule of statutory interpretation that seeks to give effect to all statutes in order to avoid a "repeal by implication." This must be a rarely-invoked rule. How often do statutes that cover the same ground conflict at all (let alone "plainly and irreconcilably" conflict)? In this case, the statutes do not even remotely conflict. The fact that an agency has exclusive authority to conduct an action does not mean that it can exercise that authority without limitation. Here, the limitation is the HEPA.

Reviewing the EIS. The ICA also rejected the Board's claim that that approval of the algae importation permit was addressed by the two prior EISs. Specifically, the Board argued that the 1985 EIS acknowledged that the state facilities would be used for algae and microalgae production and the permit for genetically-modified algae instead of non-modified algae is an irrelevant distinction. The ICA reviewed both EISs and disagreed. The 1976 EIS focused on the construction of the support facilities and infrastructure needed to start developing the technology park for energy research and other projects. At the time, the tenants of the park were unknown and it even indicated that "[f]uture projects of significance will each require an EIS." The 1985 EIS did discuss algae production, but it did not examine the large-scale production of micro-algae in reactor tubes, ponds, or other facilities on the park. Both EISs, according to the ICA, indicate that as the nature and details of individual projects became clearer, further HEPA review was expected. Whether a prior EIS covers an action triggering HEPA review is a seldom-raised issue. That would make the ICA's review of the two EISs quite significant.

Tuesday, May 13, 2008

A Stance on Standing

Indymac Bank v. Miguel (ICA May 9, 2008)

Background. The Miguels executed and delivered a note to Alliance Bancorp on December 1, 1994, but it was signed the next day. The note was secured by a mortgage on the Miguels' house on December 1, 1994. The note and mortgage was also assigned to the Bank of New York on December 1, 1994, but it was notarized the next day. The mortgage was recorded in the Land Court. The note and mortgage was assigned to the Bank of New York on December 1, 1994, but it was recorded on October 17, 1996. Because of a TILA action brought in the United State District Court, the Miguels stopped paying the mortgage. On April 4, 2003, Indymac sued the Miguels seeking a foreclosure sale based on default and determine the amount owed to them. It was not until June 6, 2003, however, when Bank of New York's interest was assigned to Indymac; Indymac soon recorded the assignment.

Courts are for the Injured Only. For a party to bring a lawsuit, it must have standing-- a "personal stake in the outcome" of the case. Baker v. Carr, 369 U.S. 186 (1962). Without standing the court has no jurisdicition. In re: Application of Matson Navigation Co. v. Fed. Deposit Ins. Corp., 81 Hawai'i 270, 275, 916 P.2d 680, 685 (1996). Standing arises when (1) the plaintiff suffered an actual or threatened injury as a result of defendant's wrongful conduct; (2) the injury is fairly traceable to the defendant's action; and (3) a favorable decision would likely provide relief for a plaintiff's injury. Bush v. Watson, 81 Hawai'i 474, 479, 918 P.2d 1130, 1135 (1996). To show the first prong, the plaintiff must show a "distinct and palpable injury" rather than an "abstract, conjectural, or merely hypothetical" one. Mottl v. Miyahira, 95 Hawai'i 381, 389, 23 P.3d 716, 724 (2001).

The Miguels argued that Indymac had no injury to meet the first prong of the standing requirements because it did not obtain an interest in the mortgaged property until after it sued them. The jurisdiction of the court depends on the state of things existing at the time the suit was brought. Minneapolis & St. L. R. Co. v. Peoria & P.U. Ry. Co., 270 U.S. 580, 586 (1926). The ICA agreed that there is nothing showing that Indymac suffered an injury, but it declared that the issue of whether the perfection of an interest that would cure standing before judgment rendered would cure the "unnoticed defect in standing" was one of first-impression.

The Self-Imposed Shield of Justiciability Includes Standing. The ICA observed a "core difference" between federal jurisdictions and Hawai'i. Unlike the federal courts, where standing has a constitutional dimension--Art. III of the fed. constitution limits jurisdiction to "cases and controversies" and standing ensures that--Hawai'i's standing doctrine is but one aspect of the self-imposed doctrines known as justiciability, a nonsense word outside the law. Thus, standing requirements in Hawai'i may be relaxed in order to meet "the needs of justice." Life of the Land v. Land Use Comm'n, 63 Haw. 166, 171, 623 P.2d 431, 438 (1981). The Hawai'i courts appear to put all of those doctrines--mootness, ripeness, standing, political questions, etc.--under justiciability. So if that is the case, then does this mean that all doctrines are subject to the same flexibility? Perhaps we are dealing with branches stemming from the same tree. If standing can be relaxed to meet "the needs of justice," then can mootness requirements be relaxed for the same reason? Political questions too?

Not-so Dramatic Holding? The ICA ultimately allowed a retroactive cure to standing. This cure did not risk additional litigation because those who cannot show an interest in the litigation before judgment are still without jurisdiction. Moreover, the ICA stated that finding no jurisdiction would only cause needless expense and delay and be a matter of form over substance since Indymac could always sue them with the interest in hand. In the end, it seemed that "the needs of justice" called for the relaxing of the standing requirements. And why not? Standing has been more or less relaxed in environmental suits and contested case hearings. After all, if the "needs of justice" afforded standing to plaintiffs who were aesthetically injured, Bremner v. C&C of HNL, 96 Hawai'i 134, 140, 28 P.3d 350, 356 (App. 2001), or plaintiffs who did not have to wait for the injury before bringing the lawsuit, Kaho'ohanohano v. State, 114 Hawai'i 302, 312, 162 P.3d 696, 715 (2007), then this is in step with the past after all.

Relating Back. In footnote four, the ICA pointed out that had the defect in standing been identified before judgment, the plaintiff could have amended its pleadings to "relate back" to the day it was originally filed and include the Bank of New York as a party. HRCP Rule 15. If Bank of New York did not want to join, the plaintiff could still have forced it to under HRCP Rule 19 because "complete relief cannot be accorded among those already parties[.]" Finally, the plaintiffs could have sued them again now that it had the interest and, thus, the injury. This is crucial to the ICA's ultimate resolution of the issue in holding that a retroactive cure is necessary to avoid waste.

Other Issues. The ICA resolved other issues raised by the Miguels, but they did not prevail. These issues related to challenges the assignments of the interest among the banks, collateral estoppels, summary judgment actions, and lis pendens matters.

Sunday, May 4, 2008

Personal rights and Parsimonious Probation

State v. Schaefer (ICA April 30, 2008)

Background. Steven and April Schaefer were charged with various misdemeanors on Kauai. They came to substantially the same plea agreement with the State. In exchange for deferred acceptance of no contest pleas, the Schaefers would pay restitution and "a [pre-sentence investigation (PSI)] will be completed prior to sentencing." Probation prepared a "partial PSI report," which included the names of the judge and attorneys in the case, the original and final charges, "identifying data" (e.g. name, SSN, DOB), criminal records, statements of the victims, sentencing alternatives, and letters of character. The partial PSIs were submitted to the judge and parties months in advance of the sentencing hearing. At the hearing, the defendants requested the district court to order a full-blown PSI. The request was refused. Just before imposing the sentences, the district court asked the Schaefers' counsels if their clients wanted to make a statement. Both attorneys said that their clients did not. The district court sentenced the Schaefers to one year imprisonment and ordered restitution, pursuant to their agreements.

Have your say in Court . . . "Before imposing or suspending sentence, the court shall address the defendant personally and afford a fair opportunity to the defendant and defendant's counsel, if any, to make a statement and present any information in mitigation of punishment." HRPP Rule 32(a). According to the ICA, the court does not "address the defendant personally" when it asks his or her counsel if the defendant wishes to make a statement. Thus, the district court plainly erred in violation of HRPP Rule 32(a) when it did not address the defendant.

Strict compliance with HRPP Rule 32(a) is supported by a constitutional personal right to allocution, or a right to give a statement, guaranteed under the due process clause in Article I, section 5 of the Hawai'i Constitution. State v. Chow, 77 Hawai'i 241, 247, 883 P.2d 663, 669 (App. 1994). This means the sentencing court needs to ask the defendant, not counsel, if he or she has anything to say before imposing sentence. The remedy for violating the right to allocution is resentencing under a different judge. Schutter v. Soong, 76 Hawai'i 187, 208, 873 P.2d 66, 87 (1994).

. . . Even if There's Nothing to say. The ICA held that the district court plainly erred when it did not ask the Schaefers if they had anything to say. The fact that the Schaefers had nothing to say was not part of the ICA's analysis. It was still plain error. This reveals something about the right to allocution. It seems entirely irrelevant (and not harmless error) when the defendant has nothing to say. The burden falls on the sentencing court to make the inquiry.

The Partial PSI. The Schaefers also challenged the adequacy of the partial PSIs prepared before sentencing. A PSI is required when (1) a defendant is convicted of a felony; or (2) the defendant is less than 22 years old and is convicted of any crime. HRS § 706-601(1). The Schaefers were both older than 22 and were not convicted of felonies. Thus, PSIs were not mandated by statute. But for the plea agreement asking for a PSI, the inquiry might have ended here and anything prepared by probation might have been, well, adequate.

So was a partial PSI enough? The Schaefers pointed out that their partial PSIs did not include their mental histories and history of delinquency. They also failed to include any evaluation of the factors for probation enumerated in HRS § 706-621. The ICA concluded that, at a minimum, a full PSI must include the information required in HRS § 706-602(1). This means that "the practice of probation officers to evaluate factors listed in HRS § 706-621 (pertaining to probation)" is not required by statute. The ICA noted that the Schaefer PSIs complied with HRS §§ 706-602(1)(a),(c)(d), and (e), but failed to include their "mental condition, family situation and background, economic status and capacity to make restitution or to make reparation to the victim or victims of [their] crimes for loss or damage caused thereby, education, occupation, and personal habits[.]" HRS § 706-602(1)(b). According to the ICA, it was unclear if the plea agreements called for a partial PSI or nothing less than a full PSI in compliance with HRS § 706-602(1) and remanded the case back to Kauai to determine the meaning of the plea agreement.

Can Probation Partially Comply with PSI Requirements when not Required by Statute? The ICA held that the Schaefers were not entitled to a full PSI by statute, but because the plea agreement called for a PSI, it remanded to see if a partial PSI materially breached the plea agreements. Given that the missing information included the capacity to make restitution and the fact that the plea agreement included restitution payments and the fact that PSIs are not normally requested in district court, there may be an argument for the Schaefers that this missing information was fatal to the partial PSI and breached the plea agreement. But a bigger question arises.

Does this mean that when a PSI is not required by statute, but is part of an agreement, probation need not fully comply with the PSI requirements? If that's the case, then parties in drafting the agreement should make it clear that they intend on having a full-blown PSI rather than a partial one. Or, to formulate it differently, if the defendant is required by statute for a full-blown PSI, can the State request a partial one pursuant to an agreement? Apparently so.

Striking Back. The ICA rejected the Schaefers' claim that the district court erred in refusing to strike a paragraph in the PSI reports that said they "preyed" upon Kauaians by telling their church followers that they would discharge their debts. The Schaefers wanted police reports backing up this paragraph, but that, according to the ICA, was not required by HRS § 706-602. Additionally, the Schaefers had the PSI report for months and was free to submit rebutting information and arguments to this paragraph. Thus, there was no due process violation either.

Thursday, May 1, 2008

Refusing Recusal

Jou v. Schmidt (ICA April 29, 2008)

Background. Dr. Jou treated Dereas and billed her insurance company, Island Insurance. Island only paid part of the bill. It also asked Dr. Jou for more information before it made anymore payments. Dr. Jou responded in part at an unknown time. Eventually, Dr. Jou sought an administrative hearing before the DCCA, Insurance Division. Dr. Jou claimed that Island owed him interest on the amount it paid as well as the outstanding payment. Island claimed it paid what it fully owed and its obligation is done. The hearings officer ruled in favor of Island. Dr. Jou appealed to the circuit court.

At the circuit court, Dr. Jou's attorney requested that the Judge Sabrina McKenna be disqualified. The attorney argued that Judge McKenna was up for retention before the Judicial Selection Committee, where an Island vice president and two lawyers who often represent Island preside. The motion for disqualification was denied and the administrative decision affirmed.

Appearance of Impropriety not Apparent (nor Presumed). Under Hawai'i law, due process calls for judicial recusal when the circumstances "fairly give rise to an appearance of impropriety and . . . reasonably cast suspicion on [the judge's] impartiality." State v. Brown, 70 Haw. 459,467 n. 3, 776 P.2d 1182, 1188 n. 3 (1989). The test for disqualification is objective and is based on the assessment of the "reasonable impartial onlooker apprised of all the facts." State v. Ross, 89 Hawai'i 371, 380, 974 P.2d 11, 20 (1999). Similarly, the Code of Judicial Conduct requires a judge to avoid the impropriety and the appearance of impropriety in all activities. CJC Canon 2(A). The test under the CJC is also an objective one based on reasonableness.

The ICA noted that Judge McKenna even admitted she was up for retention before the JSC and was then put on notice that Island's attorneys and vice president sat on the JSC. For Judge McKenna (and the ICA), however, this was still not enough to warrant recusal. The ICA turned to the rules governing the JSC. Relying on JSC Rule 5, the ICA held that it must be presumed that a JSC member would disclose to the JSC any matter it has before a judge subject to JSC review and that the conflicted JSC member would remove himself or herself from the JSC proceeding. Thus the burden falls on the JSC member in the JSC proceeding, not the judge in its court proceeding. According to the ICA, even if, as here, the record does not show that the compromised JSC members removed themselves from Judge McKenna's retention proceeding, Dr. Jou failed to overcome the presumption. What the ICA left for another day, however, is how a movant can overcome this presumption.

Disqualification Statutes Construed Strictly. In addition to the constitution, there's HRS § 601-7. "Whenever a party to any suit . . . makes and files an affidavit that the judge . . . has a personal bias or prejudice . . . the judge shall be disqualified from the proceeding therein." HRS § 601-7(b). This affidavit must state the facts and reasons underlying the belief of bias or prejudice. Id. These facts must allow a "sane and reasonable mind" to "fairly infer bias or prejudice." Glover v. Fong, 39 Haw. 308, 314-15 (Terr. 1952). Relying on federal cases interpreting similar statutes, the ICA stated that it is not for the party's counsel, but the actual named party to submit the affidavit. Moreover, assuming it was sufficient for counsel to submit the affidavit, the ICA held that this particular affidavit failed to state facts pertaining to Judge McKenna's upcoming retention proceeding before the JSC. This left nothing more in the affidavit than a "sweeping inference" that Judge McKenna was ipso facto biased or prejudiced by Island's involvement with the JSC.

And we mean Strict! The ICA acknowledged that it was following federal cases in strictly construing statutes calling for a judge's disqualification. How strict? Well, for starters, it takes the language literally. The party must submit the affidavit, not the party's counsel. Furthermore, it appeared that the ICA did not look beyond the four corners of the affidavit even when it points out a few pages later that Judge McKenna herself admits that she was up for retention before the JSC. This is a strict construction of a statute. It reads the statute literally and it does not look to the facts reflected in the record, but is limited to the facts averred in the affidavit. Strict indeed.

Other Issues. The ICA discussed the issues pertaining to notice requirements, if any, under the insurance hearing procedures and whether any interest was owed to Dr. Jou as he claimed. None of these issues had merit to the ICA.