When a Right of Action Derives from the Constitution . . .

County of Hawai'i v. Ala Loop Homeowners et al. (HSC July 9, 2010)

Background. Waiola Waters of Life Charter School, a "new century" charter school pursuant to HRS chapter 302A, acquired a 28-acre farm on Ala Loop Road near Kurtistown on the Big Island. Waiola intended on keeping the farm, but was also going to use it as a campus. Concerned residents formed the Ala Loop Association wrote to the County. The County and the State took the position that HRS § 302A-1184 exempted Waiola from state zoning laws in HRS 205, but did not exempt county zoning laws. Ala Loop argued that a special use permit pursuant to HRS § 205-A, the Land Use Commission rules, and county zoning laws were required. The County filed a complaint for declaratory relief against Ala Loop and Waiola to determine the applicability of state and county zoning laws. Ala Loop filed a counter claim against the County and a cross-claim against Waiola.

Waiola tried to get the Attorney General's Office to represent them, but the AG refused. Waiola, having no funds to defend the lawsuits, requested an extension to file an answer or responsive pleading, which was granted over Ala Loop's objection. The AG still refused to represent Waiola. Waiola then sought a stay of proceedings until the AG represented it. Ala Loop again objected and requested default judgment. The motion for stay was denied and default was entered against Waiola. The AG then agreed to represent Waiola and filed an answer and later a motion to set aside the default judgment. The motion was denied.

The circuit court proceeded with the declaratory judgment action and concluded that Waiola was subject to state land use laws notwithstanding HRS § 302A-1184. The circuit court also enjoined Waiola from several school-related activities absent a special use permit. Waiola, however, could bus students once and week and students could engage in agricultural activities like testing and cultivating crops. Ala Loop sought fees and costs and was awarded $3,878.64 in costs against Waiola. Waiola appealed on the grounds that Ala Loop had no standing to enforce state land use laws. The ICA, relying on Pono v. Molokai Ranch, Ltd., 119 Hawai'i 164, 194 P.3d 1126 (App. 2008). Ala Loop applied for certiorari. Waiola opposed on the grounds that the case was moot.

If it Ain't moot, fix it. "A case is moot if it has lost its character as a present, live controversy of the kind that must exist if courts are to avoid advisory opinions on abstract propositions of law. " Kona Old Hawaiian Trails Group v. Lyman, 69 Haw. 81, 87, 734 P.2d 161, 165 (1987). Put differently, "[a] case is moot if the reviewing court can no longer grant effective relief." Kaho'ohanohano v. State, 114 Hawai'i 302, 332, 162 P.3d 696, 726 (2007). Here, the case was not moot. According to the HSC, even though Waiola is not the current owner, it stores computers on the property and it still intends on starting a school somewhere. It is possible that Waiola could obtain permission from the current owner with a lease or some other form to conduct classes on the property.

And even if it was moot, the Public-Interest Exception Applies. Whether the public-interest exception to the mootness doctrine applies hinges on three factors (1) the public or private nature of the question presented, (2) "the desirability of an authoritative determination for future guidance of public officers, and (3) the likelihood of future recurrence of the question." Doe v. Doe, 116 Hawai'i 323, 327, 172 P.3d 1067, 1071 (2007). According to the HSC, all three prongs are met. First, even though the dispute between Waiola and Ala Loop is between two private parties, it is public in nature because the ICA's ruling that there was no private enforcement of HRS chapter 205 "inject[ed] a degree of public concern[.]" Id. Second, the question is whether private parties can enforce state land use laws that certain public agencies are duty-bound to uphold and enforce; answering this question will provide guidance for those public officials. Third, it is likely that this issue--whether private citizens can enforce HRS chapter 205--will come up in the future.

An Interesting Footnote: Right of Action v. Standing. The question here is whether Ala Loop has a private right of action to enforce state land use laws. The HSC, in a footnote, made it clear that a private right of action is not the same thing as standing. "The private of action inquiry focuses on the question of whether any private party can enforce a statute, while the standing inquiry focuses on whether a particular private party is an appropriate plaintiff."

The Trouble with Pono. In Pono, the ICA applied a test to determine whether there was a private right of action for enforcing HRS chapter 205. The test was comprised of three questions:

First, is the plaintiff one of the class for whose especial benefit the statute was enacted--that is, does the statute create a right in favor of the plaintiff? Second, is there any indication of legislative intent, explicit or implicit, either to create such a remedy or to deny one? Third, is it consistent with the underlying purposes of the legislative scheme to imply such a remedy for the plaintiff?

Pono, 119 Hawai'i at 185, 194 P.3d at 1147 (emphasis, citations, brackets, ellipsis, and quotation marks omitted.). This test derives from Cort v. Ash, 422 U.S. 66 (1975), Reliable Collection Agency v. Cole, 59 Haw. 503, 584 P.2d 107 (1978), and Rees v. Carlisle, 113 Hawai'i 446, 153 P.3d 1131 (2007), and is known as the Rees/Reliable test.

The HSC held that the Rees/Reliable "is not applicable when the state constitution creates the private right of action." The HSC noted that Reliable examined whether the legislature created a private cause of action when it enacted statutes related to the unauthorized practice of law. Reliable, 59 Haw. at 506, 584 P.2d at 109. In Rees, the issue was whether a county ordinance created a private right of action. Rees, 113 Hawai'i at 456-459, 153 P.3d 1141-1144. This is not the proper test for determining whether a party has a private cause of action pursuant to the state constitution. The HSC also held that the ICA erred in applying the Rees/Reliable test in this case and in Pono. A different analysis applies.

Introducing the test for Determining when the Constitution Confers a Private Right to Enforce Statutes. The Hawai'i Constitution affords people the right to a clean and healthful environment:

Each person has the right to a clean and healthful environment . . . . Any person may enforce this right against any party, public or private, through appropriate legal proceedings, subject to reasonable limitations and regulation as provided by law.

Haw. Const. Art. XI, Sec. 9. In order to determine whether this provision confers a private right of action to enforce HRS chapter 205, the HSC posed three questions: (1) Is the law the party seeks to enforce (e.g. HRS chapter 205) a law "relating to environmental quality"? (2) Is the constitutional provision self-executing (i.e. does the legislature need to promulgate enabling statutes before the ability to enforce this right be realized)? (3) If it is self-executing, has the legislature imposed "reasonable limitations and regulation" that would prevent a party from enforcing the right?

Is this a test? Are these three "questions" a true test? How would it look in other cases? First, the HSC appears to determine if the law the party seeks to enforce falls within the scope of the constitutionally-granted right to enforce. Second, is whether the constitutional provision is self-executing. This raises an interesting point. What if it was not self-executing, but the legislature promulgated enabling legislation? Would that put us in the Ala Loop scenario or would we have to work off of the enabling legislation--thereby putting us back in the Rees/Reliable test? Who knows. Third, if it is self-executing, are there "reasonable limitations and regulation"? That seems to come from the language of the constitutional provision itself in this case and--if this is a test at all--it's unclear whether that last question would apply to other constitutional provisions. All of this is new and we will have to wait for future cases to clear this up.

Applying the new test (or, if it's not a test, Answering the Questions). First, the HSC held that HRS chapter 205 relates to the conservation, protection, and enhancement of natural resources and is an environmental quality law "within the scope [of] the enforcement right established" by the constitutional provision. The HSC based its conclusion by examining the legislative history of HRS chapter 205, reviewing the stated purposes of the laws, and examining the language of the statutes themselves and HRS § 607-25, which allows private parties to seek attorneys fees and costs for parties who develop without obtaining their required permits or approvals.

Second, Haw. Const. Art. XI, Sec. 9 is self-executing. A provision is self-executing when "it supplies a sufficient rule by means of which the right may be enjoyed and protected, or the duty imposed may be enforced[.]" State v. Rodrigues, 63 Haw. 412, 414, 629 P.2d 1111, 1113 (1981). It is "not self-executing when it merely indicates principles, without laying down rules by means of which those principles may be given the force of law." Id. The HSC, after reviewing a survey of cases and concluded that when determining whether the provision is self-executing, the court examines the language of the provision to see if enabling legislation is necessary; the phrase "as provided by law" is not dispositive. It cuts either way. See Rodrigues, 63 Haw. at 415, 629 P.2d at 1114; United Public Workers, AFSCME, Local 646, AFL-CIO v. Yogi, 101 Hawai'i 46, 51-53, 62 P.3d 189, 194-96 (2002). The court also reviews the history of the provision to determine if the framer's intent confirms the plain language analysis.

Third, because it was self-executing, the next issue was whether there were any "reasonable limitations and regulation" against potential litigants like Ala Loop. The HSC held there were none. The HSC rejected Waiola's argument that HRS § 205-12 precluded a private right of action by delegating the enforcement of the land use laws to the counties. The HSC explained that the limitation and regulation must be "reasonable" and cannot completely abolish the private right of action. The HSC did not delve further into the matter and had no opinion as to whether Ala Loop exhausted its administrative remedies.

Default Judgment Should have been set Aside. "For good cause shown the court may set aside an entry of default and, if a judgment by default has been entered, may likewise set it aside[.]" HRCP Rule 55(c). Defaults "are not favored[.]" Rearden Family Trust v. Wisenbaker, 101 Hawai'i 237, 254, 65 P.3d 1029, 1046 (2003). A motion to set aside a default should be set aside when "the court finds (1) that the nonfaulting party will not be prejudiced by the reopening, (2) that the defaulting party has a meritorious defense, and (3) that the default was not the result of inexcusable neglect or a wilful act." BDM, Inc. v. Sageco, Inc., 57 Haw. 73, 76, 549 P.2d 1147, 1150 (1976). The HSC also noted that there is a distinction between motions to set aside default entries, which courts have more flexibility in granting, than motions to set aside default judgments, which call for the requirements of HRCP Rule 60. Id.

According to the HSC, this was not a typical case where relief from default is denied. Waiola wanted to defend in the cross-claim, "tendered the defense to the AG within a few days of being served, and continued to aggressively pursue representation by the AG thereafter, culminating in the filing of the petition for writ of mandamus." The record also showed that Waiola was under a lot of pressure to find an attorney and could not afford one. Ultimately, the HSC held that the circuit court abused its discretion in denying Waiola's motion to set aside the entry of default.

Justice Acoba's Concurrence and Dissent. Justice Acoba agreed that Ala Loop had a right to enforce this particular statute, but did not agree with the majority's analysis. He simply would have held that Ala Loop had standing to enforce HRS chapter 205. There was no need, according to Justice Acoba, to examine whether Ala Loop had a private right of action and, even if it did have to, the majority was wrong. Justice Acoba believed that while section 9 of Article XI affords people with the "right to a clean and healthful environment," that right is "defined by laws relating to environmental quality" and are "subject to reasonable limitations and regulation as provided by law." Justice Acoba wrote that the majority's construction of the provision was contrary to the framers' intent and that there was no indication that the provision was self-executing. Justice Acoba also took issue with the majority's reliance on legislative reports written after the 1978 constitutional convention which created Art. XI, Sec. 9. See United States v. Texas, 507 U.S. 529, 535 (1993) ("subsequent legislative history is a hazardous basis for inferring the intent of an earlier Congress.").

According to Justice Acoba, Ala Loop have a right to enforce HRS § 205-6 as adjoining landowners. Mahuiki v. Planning Comm'n, 65 Haw. 506, 515, 654 P.2d 874, 880 (1982); E. Diamond Head Ass'n v. Zoning Bd. of Appeals of City and County of Honolulu, 52 Haw. 518, 521-22, 479 P.2d 796, 798 (1971); Dalton v. City and County of Honolulu, 51 Haw. 400, 403, 462 P.2d 199, 202 (1969); and Town v. Land Use Comm'n, 55 Haw. 538, 543-44, 524 P.2d 84, 88 (1974). They also had standing to bring a declaratory judgment action.

Justice Acoba also disagreed that the circuit court abused its discretion in denying Waiola's motion to set aside the default entry.