HSC Strikes down Concept of Perpetual EIS

Unite Here! v. City and County of Honolulu (HSC April 8, 2010)

Background. In the 1980s Kuilima proposed to expand its 487-room hotel and 18-hole golf course by constructing three additional hotels, renovating the existing golf course, building another golf course, erecting a condominium unit, a commercial complex, clubhouse, tennis courts, and equestrian center on the North Shore of Oahu. The project called for a new wastewater treatment plant, water wells, reservoirs, water lines, highway improvements, a wildlife preserve, and public and private parks. In 1985, Kuilima prepared and filed an environmental impact statement with the Office of Environmental Quality Center. After public commentary and revisions, the 1985 EIS studied changes and projections going up to the year 2000. No major construction for the project occurred for more than 20 years. In 2005, Kuilima applied at the City and County's Department of Planning and Permitting for a subdivision of 744 acres of the 804-acre property. The DPP took the position that because the initial EIS had no expiration date, any supplemental EIS was unnecessary and approved the application without requiring a supplemental EIS. Various plaintiffs filed lawsuits based on DPP's failure to order a supplemental EIS. The circuit court granted Kuilima's motion for summary judgment on the grounds that there was no evidence of changed circumstances based on the timing of the project. In doing so, the circuit court declined to rule on other motions for summary judgment based on the statute of limitations. The plaintiffs appealed and the ICA affirmed the circuit court. Then-Judge Nakamura dissented.

Administrative Rules Within Scope of Agency's Rulemaking Authority. The HSC took on the threshold issue of whether, in promulgating the rules related to supplemental EISs, the agency--the Environmental Council--exceeded its rulemaking authority. The HSC held that it did not. The State and counties have a duty to conserve and protect "Hawaii's natural beauty and all natural resources" as well as promote the use of these resources in an environmentally responsible way. Haw. Const. Art. XI, section 1. The Hawai'i Environmental Protection Act (HEPA) was enacted to further this constitutional mandate. HRS § 343-1. The legislature then delegated to the Environmental Council the authority to promulgate rules to further the purposes of the HEPA. HRS § 343-6. Nine enumerated categories are authorized by HRS § 343-6, many of which relate to EISs. However, the Environmental Council is "not limited to" these nine categories. Id.

[A]n administrative agency can only wield powers expressly or implicitly granted to it by statute. However, it is well established that an administrative agency's authority includes those implied powers that are reasonably necessary to carry out the powers expressly granted. The reason for implied powers is that, as a practical matter, the legislature cannot foresee all the problems incidental to carrying out the duties and responsibilities of the agency.

Haole v. State, 111 Hawai'i 144, 152, 140 P.3d 377, 385 (2006). The HSC noted that the rule-making statue expressly grants the Environmental Council the power to promulgate rules regarding an EIS. According to the HSC, "to further purpose and intent of the HEPA, the Council . . . clearly contemplated the possibility of changes to the original project that may dictate the need for a further environmental impact assessment, i.e., a SEIS." The HSC, thus, held that the power to require supplemental EISs are within those implied powers that are reasonably necessary to carry out expressly granted powers.

Power to Require a Supplemental EIS Incidental to Rules Regulating the EIS? The Environmental Council is an interesting agency. It has the implicit power to require an additional EIS all together. This power appears to be "incidental to carrying out the duties and responsibilities of the agency." It may be because the Environmental Council is charged with carrying out the lofty purposes of the HEPA and the Hawai'i Constitution. It would then seem that other agencies who may not have such lofty purposes would not enjoy such implicit powers.

Timeliness of the Claims Hinge on the EIS Statute. The HSC also rejected Kuilima's arguments that the plaintiffs' lawsuits were untimely. According to the HSC, the statute of limitations for a regular EIS also applies to supplementals. See HAR §§ 11-200-28 and 11-200-29. Claims related to the agency's determination that an EIS is not required "shall be initiated within thirty days after the public has been informed of such determination pursuant to [HRS §] 343-3." HRS § 343-7(b). HRS § 343-3(b) requires the OEQC to inform the public of notices by the agencies like the DPP that an EIS is not required. To facilitate that, the agency is required to "file such notice with the [OEQC] as early as possible after the determination has been made[.]" HAR § 11-200-11.1. According to the HSC, the DPP failed to file with the OEQC a notice of its determination that a supplemental EIS was not necessary. Its failure to file the notice meant that no statute of limitations was triggered.

The other argument, according to the HSC, was absurd. When the agency determines that a proposed action doers not require an EIS, the complaint must be filed within 120 days after the proposed action is started. HRS § 343-7(a). The HSC held that because it was addressing a supplemental EIS, the action is the 2005 subdivision application, not the proposal for the entire expansion originating in the 1980s. According to the HSC, any other interpretation would be absurd. The complaint was brought well within the 120-day period.

Time is on the Plaintiffs' Side (yes it is). Once an EIS is accepted, no additional one is usually necessary:

[N]o other statement for that proposed action shall be required, to the extent that the action has not changed substantively in size, scope, intensity, use, location, or timing, among other things. If there is any change in any of these characteristics which may have a significant effect, the original statement that was changed shall no longer be valid because an essentially different action would be under consideration and a supplemental statement shall be prepared . . . . As long as there is not a change in a proposed action resulting in individual or cumulative impacts not originally disclosed, the statement associated with that action shall be deemed to comply with this chapter.

HAR § 11-200-26. The HSC held that every EIS is inherently limited to a particular time frame. Here, the 1985 EIS was based on projected data going onto the year 2000. The HSC held that because twenty years passed since the approval of the EIS; the evidence shows that the environmental impacts were examined only through the year 2000; and because the project is not finished, the project has evolved into "essentially a different action" and a supplemental EIS may be required if the change in timing "may have a significant effect." The phrase "may have a significant effect" means "whether the proposed action 'will likely' have a significant effect on the environment." Kapo'o v. Kane, 106 Hawai'i 270, 289, 103 P.3d 939, 958 (2005). According to the HSC, the plaintiffs presented evidence that was not considered when the 1985 EIS was made; particularly evidence showing that the beaches are currently a favorite spot of the endangered Hawaiian Monk Seal and green sea turtles as well as new traffic conditions. Allowing the 1985 EIS to stand in perpetuity would be absurd and would thwart the overarching purposes of the HEPA in HRS § 343-1.

The Agency's Review of the Application wasn't much of a "hard look." The HSC also took up the plaintiffs' argument that the DPP did not adequately review Kuilima's subdivision application. "[T]he court must ensure that the agency has taken a 'hard look' at environmental factors. If the agency has followed the proper procedures, its action will only be set aside if the court finds the action to be 'arbitrary and capricious,' given the known environmental factors." Price v. Obayashi Hawaii Corp., 81 Hawai'i 171, 182 n. 12, 914 P.2d 1364, 1375 n. 12 (1996). In determining that a supplemental EIS was unnecessary, the DPP concluded that the timing or phasing of the project was irrelevant. However, according to the HSC, there was evidence that a change in timing morphed the project into an "essentially different action" and the DPP ignored the most obvious fact that the 1985 EIS was operating on information as current of the mid-1980s. So "[g]iven the unreasonable and seemingly cursory consideration of whether a SEIS was warranted, we hold that the DPP's decision that one was not required was 'arbitrary and capricious.'" The HSC also adopted the standard of review in assessing the sufficiency of an EIS (the "rule of reason" standard) as the standard in assessing the sufficiency of supplemental EISs. See Price, 81 Hawai'i at 182, 914 P.2d at 1375.

Justice Acoba's Concurrence. Justice Acoba agreed that the ICA's decision should be vacated. Justice Acoba also believed that summary judgment should be granted to the plaintiffs and that Kuilima should be required to undergo a supplemental EIS. He wrote separately to point out that any other construction of the rules and statutes would undermine the very purpose of the HEPA. Justice Acoba's concurrence is more or less harmonious with the majority. However, he alone wrote that the DPP "had a duty to make an independent determination as to whether the EIS contained sufficient information" to decide on the 2005 subdivision application. The failure to acquire new information and to passively base its decision on decades-old "previously accepted" data is insufficient. Justice Acoba also agreed with the majority's adoption of the "rule of reason" for supplemental EISs, but wrote separately to point out that this standard is analogous to the abuse-of-discretion standard. See Williams v. Aona, 121 Hawai'i 1, 7, 210 P.3d 501, 507 (2009).