HSC Defines Outliers of Attorney General's Investigatory Powers
In re: Investigation of KAHEA (HSC September 21, 2021)
Background. The construction of the Thirty Meter Telescope on the summit of Mauna Kea sparked a protest movement. KAHEA: The Hawaiian Environmental Alliance, is a community-based, tax-exempt, charitable organization, opposes TMT construction. KAHEA operates the Aloha ‘Aina Support Fund. It affords logistical support to TMT protestors and in some cases provides bail when appropriate. KAHEA also challenged the Board of Land and Natural Resources through lawsuits and appeals.
The State’s Attorney General investigated KAHEA. In 2019, the AG served on First Hawaiian Bank a subpoena overing KAHEA’s bank records generated over an approximately two-year period. The AG demanded disclosure of financial records: monthly statements, signature/account cards, debit card assignments, powers of attorney, deposit tickets, cancelled checks, debit and credit memos, loan applications, notice of adverse actions against account holders, other subpoenas requesting records, materials relating to wire transfers, tax records, cashier’s check records, and even “[b]ank surveillance photos to include those from ATM machines.” The subpoena claimed to have been issued in accordance with HRS § 28-2.5(a).
KAHEA filed a motion to quash the subpoena. KAHEA argued this was not in the public interest and amounted to retaliation and harassment for KAHEA’s political position on TMT and Mauna Kea. The AG opposed the motion and asserted it was investigating potential law violations. Ultimately, the circuit court, the Hon. Judge James H. Ashford presiding, denied the motion on the grounds that the AG has responsibility to investigate if KAHEA is violating the law and improperly claiming its tax-exempt status. The circuit court struck half of the categories of requested financial documents and allowed production to the AG of documents showing who contributed to the Aloha ‘Aina Fund. KAHEA appealed to the ICA and applied for a direct transfer to the HSC, which was granted.
Law Enforcement’s Power to Investigate. The Attorney General represents “the public interest in the protection of charitable assets” and “shall investigate alleged violations of the law . . .when the attorney general determines that an investigation would be in the public interest.” HRS § 28-2.5(a). The AG “when conducting a civil, administrative, or criminal investigation . . . may . . . require the production of any books, papers, documents, or other objects designated therein or any other record however maintained, including those electronically stored, which are relevant or material to the investigation” HRS § 28-2.5(b).
Courts Won’t Review the Executive Branch’s Discretion to Investigate. The HSC rejected KAHEA’s argument that the AG’s investigation was not in the public interest. The HSC succinctly stated:
The determination of whether an investigation is “in the public interest” rests squarely with the Attorney General. Not with KAHEA. And not with this court.
In a footnote, the HSC explained that the decision to investigate and issue a subpoena furthering that investigation is akin to “a prosecutor’s decision to prosecute or not prosecute a charge[.]” And like the prosecutor’s decision, it is “ill-suited for judicial review. See Wayte v. United States, 470 U.S. 598, 607 (1985) (observing that “[s]uch factors as the strength of the case, the prosecution’s general deterrence value, the Government’s enforcement priorities, and the case’s relationship to the Government’s overall enforcement plan are not readily susceptible to the kind of analysis the courts are competent to undertake.”).”
. . . but it will Examine how it Investigates. The HSC then moved on to the scope of the investigation and subpoena. While the HSC refused to apply any judicial review to the AG’s decision investigate something in the public interest, the HSC held that courts must determine how the AG investigates. It noted that the AG’s power to investigate potential violations “in the public interest” is not unlimited. When compliance with a subpoena is “unreasonable or oppressive or [would] violate any privilege the witness may be entitled to exercise in a court proceeding,” a party can move to quash or modify it pursuant to HRS § 28-2.5(e).
The HSC examined the circuit court’s order limiting the scope of the AG’s subpoena. It held that disclosure of materials showing the monies going out of the Aloha ‘Aina Fund were reasonable and consistent with the AG’s investigation. Materials showing the monies going into the account and its donors, however, were unreasonable and oppressive.
The HSC explained that the AG’s investigation centers on whether KAHEA was claiming its tax-exempt status to advance an unlawful purpose. That does not call for inquiring about the donors. According to the HSC, where KAHEA got the money does not matter when the inquiry involves KAHEA’s use of those funds. The HSC, therefore, reversed the circuit court’s order allowing production of documents about the source of KAHEA’s funds.
So no Judicial Review on whether to Investigate and Deferential Review on Scope of that Investigation? The HSC’s interpretation of HRS § 28-2.5 limits judicial review. In fact, it affords no judicial review over the AG’s decision to investigate an organization in the “public interest.” In doing so, the AG is free to conduct an investigation on any charitable organization so long as it declares that it is in the “public interest” the court’s won’t examine it.
The HSC does afford judicial review to the AG’s scope of the declared investigation under HRS § 28-5.2(e). And it reviewed it here to find that there was no need for the AG to find out who contributed to KAHEA’s fund. So what is to stop the AG from declaring a new investigation? A new investigation in the name of “public interest” that is now free from judicial review? Where does it end? If the courts examine the scope of an extremely broad declaration, isn’t that another way of examining the decision to do something in itself?
KAHEA isn’t the NAACP. The HSC rejected KAHEA’s constitutional claims. KAHEA posited that the AG’s subpoena is akin to a law proscribing or punishing KAHEA’s political opinion on TMT and Mauna Kea. The HSC distinguished the famous line of SCOTUS cases relating to the National Association for the Advancement of Colored People (NAACP). In NAACP v. Button, 371 U.S. 415 (1963), the SCOTUS struck down a Virginia statute that criminalized meetings in which folks could sign documents authorizing NAACP lawyers to represent them. According to the HSC, that’s not the case here. The AG’s subpoena is not a law prohibiting KAHEA from “doing, saying, funding, or supporting anything.” The HSC noted that “a governmental investigation triggered in response to constitutionally-protected speech is not the same thing as a law criminalizing that speech.”
The HSC also distinguished KAHEA’s position from NAACP v. State of Ala. Ex rel. Patterson, 357 U.S. 449 (1958), which concerned the First Amendment’s protection of the freedom of association—not the freedom of speech. The HSC expressly held “no opinion about the viability of any First Amendment freedom of association claims KAHEA could have asserted on behalf of its members.”
No First Amendment Retaliation Claim Either. The HSC also rejected KAHEA’s First Amendment retaliation claim. “[T]he First Amendment prohibits government officials from subjecting an individual to retaliatory actions . . . for speaking out.” Hartman v. Moore, 547 U.S. 250, 256 (2006). A First Amendment retaliation claim requires proof that (1) the plaintiff was “engaged in a constitutionally protected activity, (2) [the government’s] actions would chill a person of ordinary firmness from continuing to engage in the protected activity and (3) the protected activity was a substantial or motivating factor in” the government action. O’Brien v. Welty, 818 F.3d 920, 932 (9th Cir. 2016). Once the showing is made, the burden shifts to the government to show that it would have taken the same action regardless of the protected conduct. See Mt. Healthy City Sch. Dist. Bd. of Educ. v. Doyle, 429 U.S. 274, 287 (1977).
The HSC held that KAHEA showed the first two elements—opposing the TMT is a constitutionally protected activity and the subpoena indeed has a chilling effect—but failed to show that the protected activity was a “substantial or motivating factor” in the AG’s subpoena.
KAHEA Didn’t Raise a Violation of the State Constitution. “No law shall be enacted respecting an establishment of religion, or prohibiting the free exercise thereof, or abridging the freedom of press or of the press or the right of the people peaceably to assemble and to petition the government for a redress of grievances.” Haw. Const. Art. I, Sec. 4. The free speech protections guaranteed under the Hawai'i Constitution are “at least as expansive as those provided by the United States Constitution.” State v. Russo, 141 Hawai'i 181, 190, 407 P.3d 137, 146 (2017). The HSC held that KAHEA in its opening brief recognized that Art. I, Sec. 4 of the Hawai'i Constitution provides “at least as expansive” rights under the First Amendment but did not advance a “precise” argument about the State Constitution. And so, KAHEA waived any arguments that the State Constitution could provide stronger protections than the First Amendment.
The Future of First Amendment (and Art. I, Sec. 4) Challenges. The HSC left open two fruitful areas for constitutional challenges. This opinion expressly leaves open claims that government action and investigation can violate an organization’s members’ freedom of association. It also leaves open free speech protections under the Hawai'i Constitution. The HSC left no clues as to how it would handle those claims. And at the end of the day, for KAHEA, it seems that the subpoena is quashed—for now.