Appellate Court Issues Opinion in Turtle Bay EIS Case

The Hawaii Intermediate Court of Appeals ("ICA") recently issued an opinion in favor of Kuilima Resort Company ("Kuilima") the owner and operator of the Turtle Bay Resort in Unite Here! Local 5 v. City and County of Honolulu.

The Project

Kuilima's predecessor prepared an EIS that was accepted by the City's planning department in 1985. The EIS studied the environmental impacts of the proposed project which included approximately 1,450 hotel rooms, a golf course, 2,060 condominium units, a commercial complex, and other amenities. Much of the proposed project was not completed (for various reasons) and lay dormant until 2005 when Kuilima submitted a subdivision application. The Turtle Bay project has been the target of consternation by area residents as discussed here and here.

The Circuit Court

The primary parties include Keep the North Shore Country and the Sierra Club (the "Plaintiffs") on one side and the City and County of Honolulu ("City") and Kuilima on the other.

In 2006, the City granted preliminary subdivision approval so that Kuilima could proceed with components of the project studied in the 1985 EIS. Upon subdivision approval, the Plaintiffs sought declaratory and injunctive relief to stop the project in circuit court. The Plaintiffs argued that a supplemental EIS ("SEIS") should have been prepared prior to consideration of the subdivision application by the City.

The circuit court ruled in favor of Kuilima and concluded that Hawaii Environmental Protection Act ("HEPA") regulations should be interpreted such that "an agency can require an SEIS only when there is a substantive change in the project itself." (Emphasis added.) Thus, an SEIS was not required because the Plaintiffs had not shown a substantive change in the project.

The ICA

The Plaintiffs appealed to the ICA. The ICA upheld the circuit court's order in favor of Kuilima. Significantly, the ICA set out the following two-step inquiry to determine whether an SEIS is necessary:

(1) Whether the action (the Project) has changed substantively in size, scope, intensity, use, location or timing? And if so,
(2) Will the change in any of these characteristics likely have a significant effect and result in individual or cumulative impacts not originally disclosed in the EIS?

If the agency answers "no" to the first question, it need not consider the second part of the inquiry and no other statement will be required pursuant to HAR sec. 11-200-26 and HRS sec. 343-5(g).

The ICA did not adopt the Plaintiffs' interpretation of the HEPA rules. In particular, the ICA noted that Hawaii's HEPA rules require an SEIS only upon a "substantive change in the project or action" and not where there are "substantial changes or significant new circumstances or information relevant to the project and action," as with the federal and California laws relied upon by the Plaintiffs.

The Hawaii Supreme Court and Beyond

The Turtle Bay opinion may not be the final opinion in this matter.

The Plaintiffs may seek certiorari from the Hawaii Supreme Court, in which case, the dissenting opinion by Judge Nakamura might be significant. Nakamura supports the broader approach to SEIS determinations advocated by the Plaintiffs. Nakamura would "require the preparation of an [SEIS] when significant changes to the anticipated environmental impacts of a proposed action become apparent such that 'an essentially different action' is being proposed," including "changes to the design of the project itself, changes to conditions surrounding the project, or the discovery of new information," similar to NEPA and CEQA.

Nakamura also dissented from the majority regarding the significance of a subdivision application for purposes of considering an SEIS. In the majority's opinion, there was no need to consider whether the subdivision application was a "trigger" under HEPA since it is part of the "action" that was proposed and studied in the 1985 EIS. However, Nakamura suggests a case-by-case, totality of circumstances approach--i.e., whether or not an agency has "sufficient discretion in rendering its decision on the Subdivision Application that its decision-making would meaningfully and usefully be informed by an SEIS." Under the majority's opinion, there is one trigger for HEPA analysis, so long as the project does not change, no future HEPA analysis is required. Under Nakamura's dissenting opinion, every subsequent agency approval could be a "trigger" under HEPA. If an action is a trigger, it would swallow the SEIS rules because there would no longer be a need to look at whether the project has changed. Instead, if there was a trigger, the HEPA process must be started anew. See, e.g., When a Trigger is Not a Trigger Under Hawaii's Environmental Impact Statement Law (HRS Chapter 343).

As mentioned here previously, an SEIS challenge is a perennial issue in Hawaii environmental law, because HRS chapter 343, Hawaii's Environmental Impact Statement Law, lacks guidance and HAR chapter 11-200, Environmental Impact Statement Rules, lacks clarity. This recent ICA decision has helped to clarify some of these issues.

For more on environmental laws that impact Hawaii, see Environmental Law.