Tuesday, May 19, 2020

Hawaii Supreme Court Defines "Potable" and "Brackish" Water -- Resort Allowed to Water its Golf Course

The Hawaii Supreme Court has been creating new real estate and land use law over recent months, e.g., HawaiiUSA Fed. Credit Union v. Monalim, No. SCWC-16-0000807 (Apr. 30, 2020) (changing foreclosure math; concurring and dissenting opinion by Nakayama, J. in which Recktenwald, C.J., joins); and Haynes v. Haas, No. SCWC-16-0000570 (May 5, 2020) (expanding public nuisance damage awards).

The latest is Lana’ians for Sensible Growth v. Land Use Comm’n, No. SCOT-17-0000526 (Haw. May 15, 2020) (concurring in the judgment and dissenting by Recktenwald, C.J., in which Nakayama, J., joins).  In this case, the central issue is what the state land use commission ("LUC") meant by its 1991 condition of approval in a district boundary amendment issued by the LUC to Lanai Resorts, LLC, which allowed it to build a golf course.  

Specifically, Condition 10 provides:

10. [The Resort] shall not utilize the potable water from the high-level groundwater aquifer for golf course irrigation use, and shall instead develop and utilize only alternative non-potable sources of water (e.g., brackish water, reclaimed sewage effluent) for golf course irrigation requirements.

Several challenges by Lana’ians for Sensible Growth ("LSG") ensued on various aspects of Condition 10.  The question before the court in the instant case is whether the LUC erred in its follow up 2017 order concluding that the Resort did not violate Condition 10 based on the quality of water the Resort was using. 

The court disagreed with how the LUC defined “potable” and “brackish” water.  The court, at length, opined on what it considered the plain meaning of those terms.  Ultimately, the court concluded that its definition of these terms resulted in the same conclusion the LUC arrived at in its 2017 order.  In other words: No harm, no foul.  

The minority disagreed with the court's departure from the record:

The LUC’s conclusions are supported by the record and correctly apply the law. The Resort’s use of brackish water from Wells 1 and 9 did not violate Condition 10, nor does such a reading of the Condition violate the public trust doctrine.

[ . . . ]

The majority, however, defines potable in reference to “county water quality standards.” This reading ignores the terms of the Condition, for “county water quality standards” appears nowhere in it. Because the majority creates a standard contrary to the text of the Condition, deprives the Resort of fair warning of its ongoing obligations under the LUC’s Order, and provides little useful guidance to the Resort for future water use, I respectfully dissent.

In the end, the same conclusion is reached by the majority and minority:  The LUC’s June 1, 2017 LUC order is affirmed.  

The challenge going forward for drafters is that courts may go beyond the four corners of an administrative order to find meaning even though, as the minority points out in this case, the terms at issue are defined in the order.

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