Hawaiʻi Supreme Court: Ritz-Carlton Waikīkī Towers Were Improperly Segmented Under HEPA, and Developer Must Pay Union’s Fees

On February 21, 2025, the Hawaiʻi Supreme Court issued a decision in Unite Here! Local 5 v. PACREP LLC (SCAP-22-0000601), holding that the environmental review for the Ritz-Carlton Residences towers at 2121 and 2139 Kūhiō Avenue in Waikīkī was improperly segmented in violation of the Hawaiʻi Environmental Policy Act (HEPA), HRS chapter 343. 

The Court later followed up on September 11, 2025, awarding Local 5 more than $112,000 in attorneys’ fees and costs against the project developer, PACREP LLC, under the private attorney general (PAG) doctrine.  

Background 

PACREP LLC and its affiliate PACREP 2 LLC developed the two Ritz-Carlton Residences towers in Waikīkī. The City and County of Honolulu’s Department of Planning and Permitting (DPP) accepted separate Final Environmental Assessments (FEAs) for each tower and issued findings of no significant impact (FONSIs). 

Unite Here! Local 5, a labor union representing hotel and restaurant workers, filed lawsuits challenging the sufficiency of the FEAs under HEPA. Local 5 argued that the two towers should have been reviewed together, because the projects were interdependent: 

• they shared a podium, amenities, and 
• infrastructure, and 2139 could not have been developed without 2121. 

The union also raised concerns that the projects could be converted to permanent residences, undermining promised job creation. 

The circuit court ruled in favor of PACREP and the City, but Local 5 appealed.

The Court’s February 2025 Decision 

Whether PACREP improperly segmented the Ritz-Carlton projects into two separate environmental reviews and whether the case was moot because the towers were already built and sold. 

The Hawaiʻi Supreme Court held that: 

• Not Moot: The case was not moot even though the projects were completed. Courts can still order effective relief, including additional environmental review, and the public interest exception to mootness applied. 
• Improper Segmentation: PACREP improperly segmented the environmental review. Applying the “double independent utility test” adopted in Kiaʻi Wai o Waiʻaleʻale v. Department of Water, 151 Haw. 442, 517 P.3d 725 (2022), the Court found that 2121 was a necessary precedent for 2139 and that both towers should have been analyzed as one project. 
• Remedy: Remedies for HEPA violations are a matter of equitable discretion. Courts need not invalidate permits or order demolition of completed projects, but must ensure that environmental impacts—including economic and social effects—are properly disclosed. The case was remanded to the circuit court to determine whether the FEAs sufficiently analyzed the projects together, and, if not, whether a new EA or EIS is required. In a notable passage, the Court emphasized that PACREP’s concealment of its plans for the second tower from its own consultants and from DPP was “not pono.”   

The Court’s September 2025 Fee Decision 

After prevailing on the main issues, Local 5 moved for attorneys’ fees and costs. 

• Statutory Claim (HRS § 607-25): The Court denied fees under HRS § 607-25(e)(1), finding the request premature because it remains to be determined on remand whether PACREP lacked required approvals. 
• Private Attorney General Doctrine: The Court awarded fees under the PAG doctrine, which allows fee-shifting where litigation vindicates important public policies. The Court found that: 
• Local 5 was the prevailing party. 
• The case vindicated significant public policies under HEPA and the Hawaiʻi Constitution’s environmental protections.  
• Private enforcement was necessary, as the developer’s improper segmentation would have gone unaddressed without Local 5’s litigation. 
• The ruling benefits the public by clarifying HEPA standards and remedies. 

Because PACREP concealed its plans and bore primary responsibility for the violation, the Court ordered PACREP—not the City—to pay. Local 5 was awarded $112,721.10, consisting of $100,774.65 in attorneys’ fees, $5,692.50 for preparing the fee motion, $5,016.73 in general excise tax, and $1,237.22 in costs. 

Key Takeaways 

1. Segmentation under HEPA: Developers cannot divide interdependent projects into separate environmental reviews. If one project is a necessary precedent for another, they must be analyzed together. 
2. Mootness and Completed Projects: HEPA litigation does not become moot simply because a project is finished. Courts retain equitable discretion to order further review or mitigation.  
3. Economic and Social Impacts: HEPA’s scope includes not just ecological effects, but also economic, social, and health impacts. Job creation claims and potential residential conversions must be properly addressed. 
4. Private Enforcement: Unions, community groups, and other private parties play a role in enforcing environmental laws, and successful litigants may recover attorneys’ fees under the PAG doctrine. 
5. Developers Bear the Risk: Where developers conceal plans or improperly segment environmental review, they may face both litigation risk and fee awards. 

The PACREP decisions reinforce that segmentation is impermissible and that completed projects are not immune from environmental review and costly penalties.