Monday, December 31, 2007

Hawaii’s Intermediate Court of Appeals (“ICA”) Expands Administrative Review Powers under HRS § 91-14

In E & J Lounge Operating Co. v. Liquor Comm’n of the City & County of Honolulu, Haw. App. (Civ. No. 05-1-1464) (Dec. 24, 2007), the ICA held that courts have jurisdiction under HRS § 91-14 to review denials of liquor licenses even if county liquor commissions are not governed by HRS chapter 91.

Pursuant to HRS § 91-14(a),

[a]ny person aggrieved by a final decision and order in a contested case or by a preliminary ruling of the nature that deferral of review pending entry of a subsequent final decision would deprive appellant of adequate relief is entitled to judicial review thereof under this chapter; but nothing in this section shall be deemed to prevent resort to other means of review, redress, relief, or trial de novo, including the right of trial by jury, provided by law.
Prior to the instant case, Hawaii courts strained to find a contested case before it granted standing. See, e.g., Mahuiki v. Planning Comm'n, 65 Haw. 506 (1982) (opining that "a public hearing, conducted pursuant to public notice, has been deemed a 'contested case' within the meaning of HRS § 91-1”). Similarly, the dissenting opinion in the instant case noted that in Singleton v. Liquor Comm'n, County of Haw., 111 Haw. 234 (2006), the court implicitly determined that a contested-case hearing was held in deciding a liquor license application so that it had a basis for assuming jurisdiction under HRS § 91-14(a).

Without the “contest case” hook to hang jurisdiction on, appeals of administrative decisions seem wide open so long as an agency hearing is required by law and determines the rights, duties, or privileges of specific parties. This new approach is most clearly stated in the Court’s citation in footnote 35 to a Washington opinion as follows:

In Prestige Stations, Inc. v. Wash. Liquor Control Bd., 657 P.2d 322 (Wash. Ct. App. 1982), the Washington Court of Appeals held that although judicial review under the Washington APA was not available for denial of an initial application for a liquor license since such a proceeding was not a contested case, judicial review was available under the court's "inherent power of review" for "administrative action that is arbitrary, capricious or contrary to law since the fundamental right referred to is simply the right to be free from such action." Id. at 324. The supreme court therefore reversed the superior court's order dismissing the case for lack of jurisdiction and remanded the case "for further proceedings under the court's inherent power of review[.]" Id. at 327.

(Emphasis added.)

A court's "inherent power of review" is as broad as it can be argued; consequently, this decision may provide more flexibility for challenging government land use decisions in the circuit court.


Unknown said...

Good thoughts, Jesse.

What is left unstated in the opinion is that while an administrative appeal pursuant to chapter 91 isn't available if the agency didn't hold a "contested case," there may be other avenues for judicial review, such as filing an original jurisdiction lawsuit, or a claim for declaratory judgment.

You're right that the courts have strained in the past to find that an agency hearing was a "contested case," such that a circuit court could exercise appellate jurisdiction. I think the reason is that in those days, the standing doctrine was a substantial limitation on the circuit court's ability to entertain an original jurisdiction lawsuit, and when the plaintiffs were not the permit applicants or the property owners, but instead were your classic agency "intervenors," the court rightly believed these folks would have a harder time establishing standing if they could not rely on participation in a contested case.

Those standing barriers did not exist in agency appeals; as long as a person participated in an agency hearing in some fashion and could deemed to have been "aggrieved" by the result, they were entitled by HAPA to invoke the circuit court's appellate jurisdiction.

But HAWSCT's late reformation of its standing jurisprudence has made that distinction largely irrelevant. Today, standing in circuit courts is very nearly a pleading formality, and serves no real gatekeeping function.

Hawaii Land Use Law and Policy said...

I agree, but I go one step further.

Granted, whether to grant an appeal is in the bailiwick of the courts, and the right to an appeal is generally not a constitutional or statutory guarantee. However, at least in the case of administrative appeals, HAPA appears to hem in the nature of agency appeals by requiring the contested case and narrowing the appellate court's standard of review.

Contradistinctively, the ICA opinion has swallowed Chapter 91 HRS and relegated the "contested case" question to history. It appears now that Hawaii courts will revert to fundamental questions of standing, which complicates rather than clarifies this point of law.