HomeMy WebLinkAboutCOM 0277.003 2012-2014 FOR PUBLICATION IN WEST'S HAWAII REPORTS AND PACIFIC REPORTER
Electronically Filed
Intermediate Court of Appeals
29440
30-APR-2013
08:41 AM
IN THE INTERMEDIATE COURT OF APPEALS
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OF THE STATE OF HAWAI`I C)
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KAUAI SPRINGS, INC. , Appellant-Appellee, D7�C
V. N
PLANNING COMMISSION OF THE COUNTY OF KAUAI, Appellee-Appellant .
NO. 29440
APPEAL FROM THE CIRCUIT COURT OF THE FIFTH CIRCUIT
(CIVIL NO. 07-1-0042)
APRIL 30, 2013
FOLEY, PRESIDING JUDGE, FUJISE and GINOZA, JJ.
OPINION OF THE COURT BY GINOZA, J.
This secondary agency appeal addresses whether
Appellant Planning Commission of the County of Kaua`i (Planning
Commission) properly denied Appellee Kauai Springs, Inc. ' s (Kauai
Springs) combined application for a Use Permit, a Class IV Zoning
Permit, and a Special Permit to continue operating a spring water
bottling facility on land zoned for agricultural use.
The Planning Commission denied the permits to Kauai
Springs by way of a January 23, 2007 Findings of Fact,
Conclusions of Law, Decision and Order (Planning Commission
Submitted By: Margaret Wille, Council Member Comm. No. 1 -7.3
Ref. To: _
Ref. Date_ _ A i 5 2013
FOR PUBLICATION IN WEST'S HAWAII REPORTS AND PACIFIC REPORTER
Order) . Kauai Springs then appealed to the Circuit Court of the
Fifth Circuit (circuit court) . 1
The circuit court issued its Findings of Fact,
Conclusions of Law, and Order (Circuit Court Order) on
September 17, 2008, reversing in part and vacating in part the
Planning Commission Order. The circuit court ruled, as to the
Use Permit and the Class IV Zoning Permit, that they were "deemed
approved" pursuant to deadlines for processing the applications
imposed by the Kaua`i County Code (KCC) , and that Kauai Springs
had not assented to an extension of the deadlines . The circuit
court further ruled, inter alia, that Kauai Springs had met its
burden for the permits, and that the Planning Commission had
improperly required Kauai Springs to disprove future events,
i . e. , requiring Kauai Springs to prove that the Commission on
Water Resource Management (Water Commission) and the Public
Utilities Commission (PUC) would not exercise jurisdiction. The
circuit court thus ordered that all three permits be issued and
entered final judgment in favor of Kauai Springs pursuant to the
Circuit Court Order.
In its appeal to this court, the Planning Commission
asserts that the circuit court erred by: (1) implicitly holding
that the Planning Commission had no duty under the public trust
doctrine to consider Kauai Springs ' water use, (2) concluding
that the record lacked evidence that Kauai Springs ' existing or
proposed uses of ground water might affect resources subject to
the public trust, (3) implicitly holding that the Planning
Commission considered improper criteria for the permits when the
Planning Commission required Kauai Springs to prove the legality
of its commercialized use of the water, (4) concluding that Kauai
Springs had carried its burden of proof by presenting sufficient
evidence that its proposed use of the water was legal,
(5) concluding that Kauai Springs was properly integrated into
1 The Honorable Kathleen N.A. Watanabe presided.
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the community of uses and met the requirements for the permits,
and (6) concluding that Kauai Springs did not assent to extending
automatic approval deadlines for the Use Permit and the Class IV
Zoning Permit .
In whole, the Planning Commission' s points of error
present four issues for this court to decide, which will be
addressed in the following order:
(1) Whether the circuit court was correct that the Use
Permit and the Class IV Zoning Permit were automatically approved
pursuant to provisions in the KCC.
(2) Whether the Planning Commission had public trust
obligations to review Kauai Springs ' use of water.
(3) If the Planning Commission had public trust
obligations to review Kauai Springs ' use of water, whether the
Planning Commission applied the proper standards and criteria in
reviewing the application for the permits.
(4) Whether the circuit court was correct that Kauai
Springs met its burden of proof to be entitled to the permits.
For the reasons discussed below, we vacate the circuit
court 's final judgment and remand this case to the Planning
Commission for further proceedings consistent with this opinion.
I. BACKGROUND
Kauai Springs is a water bottling company owned and
operated by Jim and Denise Satterfield, and is located in KOloa,
Kaua`i . The land on which Kauai Springs operates (the Property)
is identified as TMK: (4) 2-008-002 : 5 and is within the County of
Kaua`i (County) agricultural district and the State agricultural
land use district. Kauai Springs leases the Property and
operates out of a 1, 600 square-foot building. Prior to applying
for the permits that are at issue in this case, Kauai Springs had
obtained a building permit from the County to construct a 1, 600
square-foot " [bottled] water processing facility, " and had also
obtained a permit from the State Department of Health (DOH)
approving Kauai Springs as a "bottled water manufacturer. " The
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business operated for a few years with just these permits before
it was notified by the County of zoning code violations.
On May 15, 2006, the County of Kaua`i Planning
Department (Planning Department) issued a Zoning Compliance
Notice to the owner of the Property advising that, after
receiving a complaint, it had found violations of the zoning code
on the Property. In particular, the notice stated that " [t] he
activity of processing and packaging without the proper permits"
was a violation of the zoning code, and that " [t] he use of the
[Property] for Industrial processing and packaging purposes is
not generally permitted within the Agricultur [al] District . "
Pursuant to Chapter 8 of the KCC, the notice contained a cease
and desist order.
To address the alleged violations, Kauai Springs
submitted an application to the Planning Department on July 5,
2006, for a Use Permit, a Class IV Zoning Permit, and a Special
Permit. The Planning Department accepted the application for
processing on the same day.
Of note, the Hawai'i Supreme Court ' s opinion in
Kelly v. 1250 Oceanside Partners, 111 Hawai'i 205, 140 P.3d 985
(2006) was issued on July 28, 2006, twenty-three days after Kauai
Springs submitted its permit application to the Planning
Department . The record indicates that the Planning Commission
was cognizant of the ruling in Kelly and, in reviewing Kauai
Springs ' application, sought to address its public trust duties
in light of Kauai Springs ' use of water in its water bottling
operation.
A. Permit Application and Planning Commission Hearings
Kauai Springs ' permit application sought to maintain
and potentially expand its existing use "for a water harvesting
and bottling operation" on the Property, in which spring water
originating from Kahili Mountain is filled into five-gallon
recyclable containers to service residents and businesses on the
Island of Kaua`i . At an August 8, 2006 Planning Commission
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hearing, Jim Satterfield (Mr. Satterfield) stated that Kauai
Springs ' productivity was at approximately 300-500 five-gallon
bottles per week and he wanted the permits to allow future
expansion of its operations to 1, 000 five-gallon water bottles
per day. Kauai Springs also sought to expand its operation to
include bottling the water into smaller biodegradable bottles.
As found by the circuit court and uncontested by the
parties, the Property is located miles away from the source of
the water and Kauai Springs does not have control over the source
or the system that brings the water to the Property. The
location of the water source is owned by the Eric A. Knudsen
Trust (Knudsen Trust) and the source is an underground spring
located approximately one-thousand feet up Kahili Mountain.
Kauai Springs purchases the water from Knudsen Trust . The water
is transmitted by way of a gravity-fed private system owned by
Grove Farm Company (Grove Farm) which was originally constructed
by KOloa Sugar Mill in the 1890s to irrigate the ahupua'a of
KOloa. Kauai Springs receives the water from a pipe that runs
across the Property. The water system also provides domestic
water to eleven homes along Waila`au Road, makai (ocean side) of
the Property.
The Planning Commission held four public hearings on
the matter,' received numerous letters, and heard testimony from
members of the public both in opposition to and in support of
permit approval . Mr. Satterfield attended each hearing and was
accompanied by Kauai Springs ' attorney, Harvey Cohen (Cohen) , at
the last two hearings. . The Planning Commission deferred a
decision on the application several times in order to gather
information and to correspond with other government agencies.
In the hearings, the Planning Commission inquired into
Kauai Springs ' operations, including how the proposed use of
2 Public hearings on this permit application were held on August 8,
2006; September 26, 2006; November 14, 2006; and November 28, 2006.
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operating a water bottling facility may affect the water
resources it utilizes and the surrounding lands dependent on the
water resources . Kauai Springs purchases the water it uses from
Knundsen Trust pursuant to a licensing agreement and, according
to Mr. Satterfield, there is no limit on the amount of water
Kauai Springs can extract.
At a hearing, Mr. Stacey Wong, Trustee for the Knudsen
Trust, explained that two water tunnels were constructed at the
water source sometime in the early 1900 ' s by McBryde Sugar
Company, and that there is an eight inch pipe line that was used
to provide water for people in the sugar plantation. The record
further indicates that one of the tunnels, referred to as "Tunnel
No. 1, " is located at about the 1000-foot elevation and is the
access to the water source for the water used in Kauai Springs '
operation.
Planning Department staff visited the source to view
the water tunnel and the water system. According to a staff
report, water from Tunnel No. 1 feeds into a water tank, where it
is chlorinated and serves the Kahili Mountain Park and feeds a
line going to KOloa town. At a certain point, the water line
then connects to a Grove Farm operated water tank that is located
approximately 200 feet mauka (mountainside) of Kauai Springs '
building. Prior to this second water tank, Kauai Springs has
installed a tap into the water line which feeds a meter and an
underground line to its water bottling facility.
The record does not contain verified data on the amount
of water flowing through Tunnel No. 1 that is utilized by Kauai
Springs for its operations and/or utilized by surrounding homes
before the water eventually feeds back into nearby streams.
Consistent with its rules, the Planning Department also
sought input from various state and county agencies including the
DOH, the State Historic Preservation Division, the County Fire
Department, the County Department of Public Works, the County
Department of Water, the State Land Use Commission, the Water
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Commission, and the PUC. See Rules of Practice and Procedure of
the Kaua`i County Planning Commission (Planning Commission Rules)
§ 1-13-4 (2) (stating that Special Permit applications may be
routed to appropriate government agencies for comments and
recommendations) ; KCC §§ 8-19 .5 (b) , 8-19 .6 (b) .3
The Planning Commission was particularly concerned with
the input, or the perceived lack of input, it received from the
Water Commission' and the PUC.5
1 . Water Commission Comments
The Water Commission first responded to the Planning
Department ' s request for input on the permit application by
letter, providing its comment that
3. There may be the potential for ground or surface water
degradation/contamination and recommend that approvals
for this project be conditioned upon a review by the
State (DOH] and the developer's acceptance of any
resulting requirements related to water quality.
The Water Commission also commented that " [g] round-water6
withdrawals from this project may affect streamflows, which may
require an instream flow standard' amendment . " The letter also
stated that
3 KCC § 8-19.5 (b) and KCC § 8-19.6(b) , with respect to Use Permits and
Class IV Zoning Permits, state that the Planning Director or his designee
"shall refer the application to the Department of Public Works and the
Department of Water and may refer the application to any other County or State
Department for comment or approval" and "may require additional information if
necessary to make a determination. "
4 Under article XI, section 7 of the State constitution, the Water
Commission is designated as the primary guardian of public rights under the
water resources trust. See Haw. Const. art. XI, § 7; see also In re Water Use
Permit Applications, 94 Hawaii 97, 143, 9 P.3d 409, 455 (2000) .
5 The powers and duties of the PUC are set forth in HRS Chapter 269.
6 The State Water Code defines "ground water" as "any water found
beneath the surface of the earth, whether in perched supply, dike-confined,
flowing, or percolating in underground channels or streams, under artesian
pressure or not, or otherwise. " HRS § 174C-3 (2011 Repl.) .
An instream flow standard (IFS) is a "quantity or flow of water or
depth of water which is required to be present at a specific location in a
stream system at certain specified times of the year to protect fishery,
wildlife, recreational, aesthetic, scenic, and other beneficial instream
uses. " HRS § 174C-3.
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OTHER:
The island of Kauai has not been designated as a ground-
water management area;' therefore, a water use permit from
the Commission is not required to use the existing
source(s)9 or to change the type of water use. However, if
the source needs to be modified in any way, a well
modification permit from the Commission may be required. In
addition, if a pump is to be installed to induce additional
water flow, a pump installation permit from the Commission
would be required. If the source is modified to induce
additional water flow, and the modification results in
impacts to surface waters,10 a petition to amend the interim
instream flow standard" for affected surface waters must be
made and approved prior to the use of the water.
The Planning Department subsequently requested
clarification of these comments in a letter stating:
Pursuant to several conversations with [Water Commission
staff] , Planning Department staff understands that provided
the following apply, no permit is required for the
Applicant's use of water from the existing water system:
e The State Water Code defines "water management area" as "a geographic
area which has been designated pursuant to section 174C-41 as requiring
management of the ground or surface water resource, or both. " HRS § 174C-3.
9 The State Water Code defines a "water source" as
a place within or from which water is or may be developed,
including but not limited to: (1) generally, an area such as
a watershed defined by topographic boundaries, or a
definitive ground water body; and (2) specifically, a
particular stream, other surface water body, spring, tunnel,
or well or related combination thereof.
HRS § 174C-3.
10 The State Water Code defines "surface water" as
both contained surface water -- that is, water upon the
surface of the earth in bounds created naturally or
artificially including, but not limited to, streams, other
watercourses, lakes, reservoirs, and coastal waters subject
to state jurisdiction -- and diffused surface water -- that
is, water occurring upon the surface of the ground other
than in contained water bodies. Water from natural springs
is surface water when it exits from the spring onto the
earth's surface.
HRS § 174C-3.
" An interim instream flow standard (IIFS) is a "temporary instream
flow standard of immediate applicability, adopted by the [Water Commission]
without the necessity of a public hearing, and terminating upon the
establishment of an instream flow standard. " HRS § 174C-3.
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(a) The tunnel is not being changed, and the
Applicant's use of the water is not affecting the
source in any way (i.e. not inducing more water to
come out of the source or tunnel)
(b) The existing source has been registered and is
basically grandfathered, and there is an agreement
between the new user (Applicant) and the operator
of the system.
(c) There is a closed line from the tunnel to the tank.
Please advise if you concur with the foregoing, and if
pursuant to those conditions, no permit is required from
(the Water Commission) .
(Emphasis added. ) In a second letter, the Water Commission
concurred with the Planning Department ' s summary of its previous
comments and "confirm[ed] that no permits from the [Water]
Commission are required for the proposed use of water under the
three conditions outlined in your letter. " (emphases added) . The
Water Commission' s response did not affirmatively verify that the
three conditions outlined in the Planning Department ' s letter
actually existed.
2 . PUC Comments
With respect to possible regulation by the PUC, Mark
Hubbard, a Grove Farm consultant, testified to the Planning
Commission that to his knowledge, Grove Farm had not communicated
with the PUC. The Planning Department solicited input from the
PUC on the application and the PUC responded to the Planning
Department by letter, stating that Kauai Springs does not appear
to be a public utility subject to its jurisdiction. The PUC
further stated that there is a possibility that Grove Farm may be
operating as a public utility under HRS Chapter 269 and
" [a] dditional information, including a review of all relevant
facts and possibly testimony from all concerned parties, would be
necessary before a determination could be made as to whether
Grove Farm is a public utility under HRS Chapter 269. " The PUC' s
response indicated it was an informal and non-binding opinion,
and that " [i] f you require a formal opinion on this matter, you
may file a petition for declaratory relief [ . ] "
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B. Planning Commission Order
On November 28, 2006, the Planning Commission discussed
conditioning a permit approval on a favorable declaratory ruling
from the PUC and the Water Commission. The Planning Commission
voted instead to close the public hearing on the matter when
commission members realized that the automatic approval deadline
for the Special Permit was approaching. 12
On January 23 , 2007, the Planning Commission voted 6-1
to deny all three requested permits and issued the Planning
Commission Order which concluded that :
1. The Commission has jurisdiction over the subject
permits under provisions of Article XIV of the Kauai
County Charter, Section[] 8-20.5 and Section 8-21.2 of
the Comprehensive Zoning Ordinance, and Chapter 13 of
the Rules of Practice and Procedures of the Kauai
Planning Commission.
2. Due notice was given and all parties were offered an
opportunity to present evidence and argument on the
requested permits.
3. In view of the comments received from [the Water
Commission] and PUC the land use permit process should
insure that all applicable requirements and regulatory
processes relating to water rights, usage, and sale are
satisfactorily complied with prior to taking action on
the subject permits. The Applicant, as a party to this
proceeding should also carry the burden of proof that
the proposed use and sale of the water does not violate
any applicable law administered by [the Water
Commission] , the PUC or any other applicable regulatory
agency.
4. There is no substantive evidence that the Applicant has
any legal standing and authority to extract and sell
the water on a commercial basis.
12 According to the Planning Commission Rules, the Planning Commission
has 60 days after the close of the public hearing to take a vote on a Special
Permit petition, but must vote no later than 210 days after the acceptance of
an application. Planning Commission Rules § 13-7 (a) . If the Planning
Commission fails to act within the aforementioned time period, the petition
"shall be deemed approved after an additional thirty (30) days subject to such
protective restrictions as may be deemed necessary and as permitted under HRS
205-6(c) . " Id. § 13-8 (a) (2) . The Planning Commission accepted Kauai Springs'
application for processing on July 5, 2006. Thus, under the time limitations,
the Planning Commission had to take action on the application by January 31,
2007.
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Kauai Springs requested reconsideration, which the Planning
Commission denied.
C. Circuit Court Proceedings and Order
On March 15, 2007, Kauai Springs appealed to the
circuit court, essentially arguing that the Planning Commission
Order disregarded the permit standards and improperly placed the
burden on Kauai Springs to prove that its use of the water would
not be subject to regulation by the Water Commission and the
PUC.13
On May 15, 2007, the circuit court granted Kauai
Springs ' request for a preliminary injunction and enjoined the
Planning Commission from enforcing its order.
On September 17, 2008 , the circuit court issued its
order and entered the following relevant findings of fact (FOFs)
and conclusions of law (COLs) :
FINDINGS OF FACT
54. The [Planning Commission Order] stated the Water
Commission informed the Planning Commission that Kauai
Springs required "no permits" because "the Applicant's
use of the water is not affecting the source in any way
(i.e. , not inducing more water to come out of the
source or tunnel) , " "the existing source has been
registered and is basically grandfathered, and there is
an agreement between the new user (Applicant) and the
operator of the system, " and "there is a closed line
from the tunnel to the tank. " . . . .
CONCLUSIONS OF LAW
Kauai Springs Did Not Waive the Deadlines, or Assent To An
Extension
32. Kauai Springs appeared at the Planning Commission
hearings on its permit applications, but its presence
13 Kauai Springs argued that the Planning Commission Order violated
HRS § 91-14 (g) (1) - (6) (2012 Repl.) because it was: (1) in violation of
statutory provisions; (2) in excess of the statutory authority or jurisdiction
of the agency; (3) made upon unlawful procedure; (4) affected by other error
of law; (5) clearly erroneous; and (6) arbitrary or capricious.
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and participation did not constitute a waiver of the
deadlines to which the Planning Commission was
obligated to adhere, and was not consent to or
affirmation of an extension of time for the Planning
Commission to act on the applications. See, e.g. ,
October Twenty-Four, Inc. v. Planning and Zoning
Comm'n, 646 A.2d 926, 931-32 (Conn. Ct. App. 1994) .
36. Kauai Springs did not ask for extra time, nor did it
withdraw its applications.
40. The failure to adhere to the time requirements was due
solely to the actions of the Planning Commission.
Use Permit Standards
41. The Planning Commission did not consider the proper
criteria when reviewing and processing Kauai Springs'
zoning permit applications. The applicable standards
for whether Use, Special, and Class IV permits should
be issued are clearly established.
43. Kauai Springs is properly integrated into the community
of uses. It had been operating without issue and with
all the state and county permits necessary including
two County building permits. The Planning Department
staffer remarked about Kauai Springs, " [t]he existing
water bottling facility is relatively low impact at the
subject location in its current function and capacity. "
45. There is nothing in the [Planning Commission Order] or
the Record to indicate that Kauai Springs' existing or
proposed uses were not or will not be integrated.
59. The [Planning Commission Order] contains no finding,
and there is no evidence in the Record, that Kauai
Springs did not meet the criteria for issuing the three
permits at issue in this appeal.
Public Trust
61. The State of Hawaii and its political subdivisions have
duties under the public trust. Haw. Const. art. IX;
Kelly v. 1250 Oceanside Partners, 111 Haw. 205, 140
P.3d 985 (2006) .
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62. "Political subdivisions" of the State include the
County of Kauai. Kelly v. 1250 Oceanside Partners, 111
Haw. 205, 140. P.3d 985 (2006) .
63. Decisions on permit applications must be grounded in
fact and the Record, not speculation, and the Record in
this case is devoid of any evidence that Kauai
Springs ['] existing or proposed uses might affect water
resources subject to the public trust.
71. The Planning Commission did not identify any other
outstanding regulatory processes that it claimed must
have been fulfilled in order to satisfy any duty under
the public trust that it may have had.
72. There is nothing in the Record of this case to show
that the Planning Commission did not fulfill any duty
it may have under the public trust. Kelly v. 1250
Oceanside Partners, 111 Haw. 205, 140 P.3d 985 (2006) .
Burden of Proof
73. If Kauai Springs bore the burden of proof that its
proposed use did "not violate any applicable law
administered by [the Water Commission] , the PUC or any
other applicable regulatory agency, " Kauai Springs
plainly carried that burden of proof. Both of these
agencies had provided their input to the Planning
Commission, and neither agency had any substantial
concerns with Kauai Springs, as reflected in the
[Planning Commission Order] . . . .
74. There was no evidence presented at the public hearings,
and no findings made by the Planning Commission that
Kauai Springs did not carry any of its burdens to show
it was entitled to the three permits at issue in this
appeal, and the Planning Commission was clearly
erroneous when it determined that Kauai Springs did not
meet the burden on the zoning permit applications.
Haw. Rev. Stat. § 91-14 (g) .
75. Conclusions of Law #3 and #4 in the [Planning
Commission Order] do not apply the governing legal
standards set forth in Finding of Fact #15, #16, and
#17, and state only that the Planning Commission denied
the applications because Kauai Springs had not
disproven that the Water Commission or the PUC might
not exercise jurisdiction, despite the fact that the
Planning Commission and the Planning Department
actually knew both of these agencies repeatedly had
disclaimed jurisdiction. Conclusions of Law #3 and #4
are wrong. Because of factual inaccuracies
mischaracterizing the Water Commission and PUC letter
are unsupported by the Record [sic] , FOF #19 is clearly
erroneous and must be reversed. Haw. Rev. Stat. 91-14
(g) (5) .
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The circuit court ultimately reversed the Planning
Commission Order with regard to the Use Permit and the Class IV
Zoning Permit, ruling that the application for these permits ad
been automatically deemed approved. In this regard, the circuit
court ruled that the deadline for granting or denying these
permits had expired before the Planning Commission Order was
issued and Kauai Springs had not consented to an extension of the
deadlines. The circuit court thus ordered that the Use Permit
and the Class IV Zoning Permit be issued forthwith.
The circuit court further ruled that the Planning
Commission Order "exceeds the Planning Commission' s authority or
jurisdiction, is clearly erroneous in view of the reliable,
probative and substantial evidence on the whole record; and is
arbitrary, or capricious, or characterized by abuse of discretion
or clearly unwarranted exercise of discretion. " The circuit
court thus vacated the Planning Commission Order with regard to
the Special Permit and remanded the case to the Planning
Commission with an order to issue the Special Permit immediately.
The court further permanently enjoined the Planning Commission
from enforcing its order or taking any actions that would be
contrary to the issuance of the three permits .
. II. STANDARDS OF REVIEW
A. Public Trust
The Planning Commission' s points of error related to
the public trust doctrine implicate questions of constitutional
law, which this court answers "by exercising its own independent
judgment based on the facts of the case, and, thus, questions of
constitutional law are reviewed on appeal under the right or
wrong standard. " Kelly, 111 Hawaii at 221, 140 P. 3d at 1001
(quoting Freitas v. Admin. Dir. of Courts, 108 Hawaii 31, 37,
116 P.3d 673, 679 (2005) (brackets omitted) ) . "Under the right
or wrong standard, this court examines the facts and answers the
question without being required to give any weight to the trial
court ' s answer to it . " Id. (quoting Leslie v. Estate of Tavares,
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91 Hawai`i 394, 399, 984 P. 2d 1220, 1225 (1999) (brackets
omitted) ) .
B. Secondary Appeal
Regarding appeals from agency decisions generally, the
Hawai'i Supreme Court has stated:
This court's review is . . . qualified by the principle that
the agency's decision carries a presumption of validity and
appellant has the heavy burden of making a convincing
showing that the decision is invalid because it is unjust
and unreasonable in its consequences. Konno v. County of
Hawaii, 85 Hawai'i 61, 77, 937 P.2d 397, 413 (1997)
(citations omitted) .
In re Water Use Permit Applications, 94 Hawaii 97, 118-19,
9 P.3d 409, 430-31 (2000) (hereinafter Waiahole I) (quoting
GATRI v. Blane, 88 Hawai'i 108, 112, 962 P. 2d 367, 371 (1998) ) .
However, this court ' s deference to agencies is further qualified
by the principle that "the ultimate authority to interpret and
defend the public trust in Hawaii rests with the courts of this
state. " Id. at 143, 9 P.3d at 455 .
"Review of a decision made by a court upon its review
of an administrative decision is a secondary appeal . The
standard of review is one in which this court must determine
whether the court under review was right or wrong in its
decision. " Leslie v. Bd. of Appeals of the Cnty. of Hawaii, 109
Hawai'i 384, 391, 126 P.3d 1071, 1078 (2006) (citation and
internal quotation marks omitted) . To determine if the circuit
court ' s decision is right or wrong, we "apply the standards set
forth in HRS § 91-14 (g) to the agency' s decision. " Id. (citation
omitted) . HRS § 91-14 (g) (2012 Repl . ) enumerates the standards
of review applicable to an agency appeal and provides :
(g) Upon review of the record the court may affirm the
decision of the agency or remand the case with instructions
for further proceedings; or it may reverse or modify the
decision and order if the substantial rights of the
petitioners may have been prejudiced because the
administrative findings, conclusions, decisions, or orders
are:
(1) In violation of constitutional or statutory
provisions; or
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(2) In excess of the statutory authority or
jurisdiction of the agency; or
(3) Made upon unlawful procedure; or
(4) Affected by other error of law; or
(5) Clearly erroneous in view of the reliable,
probative, and substantial evidence on the whole
record; or
(6) Arbitrary, or capricious, or characterized by abuse
of discretion or clearly unwarranted exercise of
discretion.
"It is well settled 'that in an appeal from a circuit
court ' s review of an administrative decision the appellate court
will utilize identical standards applied by the circuit court .
The clearly erroneous standard governs an agency's findings of
fact. '" Leslie, 109 Hawaii at 391, 126 P.3d at 1078 (brackets
and citation omitted) . "An agency' s findings are not clearly
erroneous and will be upheld if supported by reliable, probative
and substantial evidence unless the reviewing court is left with
a firm and definite conviction that a mistake has been made. "
Id. (citation and internal quotation omitted) . "The courts may
freely review an agency's conclusions of law. " Id. (brackets,
citations and internal quotation mark omitted) .
III. DISCUSSION
A. Assent to Extend Automatic Approval Deadlines
We first address whether the circuit court was correct
that the Use Permit and the Class IV Zoning Permit were
automatically approved pursuant to provisions in the KCC. In
this regard, the circuit court ruled that automatic approval
deadlines applied because Kauai Springs had not assented to an
extension of the deadlines for the Use Permit and the Class IV
Zoning Permit .'
14 There is no issue as to timely action for the Special Permit. The
circuit court determined, and it is unchallenged, that the Planning Commission
had up to January 31, 2007 (or 210 days after the permit application was
accepted) to take action on the Special Permit. See Planning Commission Rules
§§ 1-13-7 and 1-13-8. The Planning Commission Order was issued on January 23,
(continued. . . )
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HRS § 91-13 . 5 (Supp. 2006) requires state and county
agencies to adopt rules specifying a maximum time period to grant
or deny, inter alia, a development-related permit. This statute
states in relevant part :
§91-13.5 Maximum time period for business or
development-related permits, licenses, or approvals;
automatic approval; extensions. (a) Unless otherwise provided
by law, an agency shall adopt rules that specify a maximum
time period to grant or deny a business or
development-related permit, license, or approval; . . .
(c) All such issuing agencies shall take action to
grant or deny any application for a business or
development-related permit, license, or approval within the
established maximum period of time, or the application shall
be deemed approved; provided that a delay in granting or
denying an application caused by the lack of quorum at a
regular meeting of the issuing agency shall not result in
approval under this subsection; provided further that any
subsequent lack of quorum at a regular meeting of the
issuing agency that delays the same matter shall not give
cause for further extension, unless an extension is agreed
to by all parties.
(e) The maximum period of time established pursuant to
this section shall be extended in the event of a national
disaster, state emergency, or union strike, which would
prevent the applicant, the agency, or the department from
fulfilling application or review requirements.
(Emphases added. )
Even prior to the adoption of HRS § 91-13 .5, the County
had adopted maximum time periods for the Planning Commission to
act on the types of permits involved in this case. Under the
applicable county ordinances, the circuit court determined and it
is not contested that the deadline for the Planning Commission to
act on the Use Permit application was October 18, 2006, which was
105 days from the acceptance of the application. See KCC § 8-
20 . 6 and § 8-19 . 5 . The parties also do not contest the circuit
court 's determination that the deadline for the Planning
14( .continued)
2007, prior to the deadline for the Special Permit.
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Commission to act on the Class IV Zoning Permit application was
November 2, 2006, which was 120 days after the application was
accepted. See KCC § 8-19 . 6 . The Planning Commission Order was
issued on January 23, 2007, after the deadlines related to the
Use Permit and the Class IV Zoning Permit had expired.
However, the ordinances applicable to a Use Permit and
a Class IV Zoning Permit provide that, " [i] f the Planning
Director or the Planning Commission fails to take action within
the time limits prescribed in this Article, unless the applicant
assents to a delay, the application shall be deemed approved. "
KCC § 8-19.5 (g) ; KCC § 8-19 . 6 (e) (emphasis added) . The circuit
court held that Kauai Springs did not assent to a delay of the
prescribed time limits. The Planning Commission contests this
ruling and argues that Kauai Springs did assent to a delay and
therefore the Use Permit and Class IV Zoning Permit were not
automatically approved once the respective deadlines had passed.
In response, Kauai Springs argues that if the county
ordinances allow assent to extend the deadlines, they violate the
superior state law set forth in HRS § 91-13 .5 and are invalid.
Kauai Springs relies on HRS § 46-1.5 (13) (Supp. 2005) and
HRS § 50-15 (2012 Repl . ) . HRS i§ 46-1 . 5 (13) provides that each
county has the power to enact ordinances "not inconsistent with,
or tending to defeat, the intent of any state statute [ . ] " In
turn, HRS § 50-15 provides that
[n]otwithstanding the provisions of this chapter, there is
expressly reserved to the state legislature the power to
enact all laws of general application throughout the State
on matters of concern and interest and laws relating to the
fiscal powers of the counties, and neither a charter nor
ordinances adopted under a charter shall be in conflict
therewith.
Kauai Springs contends that under HRS § 91-13 . 5 (e) , "assent" is
not one of the three enumerated circumstances under which the
time periods designated by the agencies could be extended, and
the inclusion of the specific reasons to extend the time periods
in the statute implies the exclusion of others . Kauai Springs
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argues that the County ordinances are thus in conflict with
HRS § 91-13 . 5 (e) and are invalid in allowing assent to extend the
deadlines . We do not agree.
HRS § 91-13 .5 is silent as to whether counties may, by
code or rule, provide for assent provisions. HRS § 91-13 . 5 (e)
provides for three situations in which the maximum time period
shall be extended, stating:
The maximum period of time established pursuant to this
section shall be extended in the event of a national
disaster, state emergency, or union strike, which would
prevent the applicant, the agency, or the department from
fulfilling application or review requirements.
(Emphasis added. ) The inclusion of the mandatory reasons for
extending the time periods does not necessarily indicate an
intent to preclude counties from adopting other reasons why the
time periods may be extended. See Int 'l S&L Ass 'n v. Wiig, 82
Hawaii 197, 201, 921 P.2d 117, 121 (1996) (" [t] he inclusion of a
specific matter in a statute implies the exclusion of another
'only where in the natural association of ideas the contrast
between a specific subject matter which is expressed and one
which is not mentioned leads to an inference that the latter was
not intended to be included within the statute . '" (citation
omitted) ) .
"A test to determine whether an ordinance conflicts
with a statute is whether it prohibits what the statute permits
or permits what the statute prohibits. " Waikiki Resort Hotel,
Inc. v. City & Cnty. of Honolulu, 63 Haw. 222, 241, 624 P.2d
1353 , 1366 (1981) . As to the issue of whether HRS § 91-13 . 5
prohibits the challenged assent provisions, HRS § 91-13 . 5 is
ambiguous. See Gillan v. Government Employees Ins. Co. , 119
Hawaii 109, 117, 194 P.3d 1071, 1079 (2008) ("When there is
doubt, doubleness of meaning, or indistinctiveness or uncertainty
of an expression used in a statute, an ambiguity exists . "
(citation and internal quotation mark omitted) ) . HRS § 91-13 .5
neither explicitly allows or disallows the adoption of rules or
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ordinances which provide that the period for automatic approval
may be extended. In construing an ambiguous statute, a court may
resort to extrinsic aids in determining legislative intent, one
of which is legislative history. Gillan, at 119, 194 P. 3d at
1081 .
While the legislative history indicates that the
purposes for enacting HRS § 91-13 . 5 include streamlining
administrative processes and improving Hawaii ' s business climate,
see 1998 Haw. Sess. Laws Act 164, § 1 at 613, the legislative
history as a whole contemplates flexibility in rule-making and a
balance between streamlining on one hand and constitutional
demands, public input, and environmental concerns on the other
hand, and leads us to conclude that the challenged assent
provisions do not conflict with HRS § 91-13 . 5 . See Conf. Comm.
Rep. No. 127, in 1998 Senate Journal, at 799 ("Your Committee on
Conference notes the continued concerns of some that automatic
permit approval will be misused to short-circuit existing public
input processes. Your Committee is confident that agencies will
account for the preservation of such processes in their
rulemaking. " ) ; S . Stand. Comm. Rep. No. 2386, in 1998 Senate
Journal, at 976-77 ( "Your Committees find that establishing time
frames will compel agencies to prioritize permitting and approval
activities, streamline and eliminate any requirements for
unnecessary application information, and in the process identify
critical application information. This can be accomplished by
establishing time frames that are goals rather than
'maximums ' . " ) ; S . Stand. Comm. Rep. No. 2760, in 1998 Senate
Journal, at 1121 ("In streamlining the approval process your
Committee is also mindful of environmental concerns. This bill
is not intended to jeopardize the environment. The provisions in
this bill are intended to allow for the continued safeguard of
legitimate review and public comment on those issues. ") .
Having concluded that the assent provisions in KCC § 8-
19 .5 (g) and KCC § 8-19 . 6 (e) do not conflict with HRS § 91-13 .5,
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we turn to whether the circuit court correctly determined that
Kauai Springs did not assent to an extension of the maximum time
periods for the Use Permit and the Class IV Zoning Permit .
The word "assent" is not defined by the applicable
county ordinances . However, Black' s Law Dictionary defines
assent as " [a] greement, approval, or permission; esp. , verbal or
nonverbal conduct reasonably interpreted as willingness. "
Black 's Law Dictionary 132 (9th ed. 2009) . The types of assent
include the following:
apparent assent. Assent given by language or conduct that,
while not necessarily intended to express willingness, would
be understood by a reasonable person to be so intended and
is actually so understood.
constructive assent. [ ] Assent imputed to someone based on
conduct.
implied assent. [ ] Assent inferred from one's conduct
rather than from direct expression.
Id. Unlike assent, waiver necessarily involves the intentional
relinquishment of a known right . See Coon v. City & Cnty. of
Honolulu, 98 Hawai`i 233 , 261, 47 P.3d 348, 376 (2002)
("Generally, waiver is defined as an intentional relinquishment
of a known right, a voluntary relinquishment of rights, and the
relinquishment or refusal to use a right . " (citations omitted) ) .
The Planning Commission argues that by its conduct,
Kauai Springs led the Planning Commission to reasonably believe
that Kauai Springs assented to a delay in the final decision on
the Use and Class IV Zoning Permits. In our view, as to the
question of assent, the relevant conduct of Kauai Springs
includes both verbal and nonverbal conduct that can be reasonably
interpreted as willingness to extend the applicable automatic
approval deadlines, see Black 's Law Dictionary 132 (9th ed.
2009) , and thus we hold that the circuit court erred in
concluding that Kauai Springs did not assent to extend the
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automatic approval deadlines for the Use Permit and Class IV
Zoning Permit .
At a November 14, 2006 hearing, almost a month after
the Use Permit deadline had elapsed and more than one week after
the Class IV Zoning Permit deadline had passed, Kauai Springs,
through its attorney, amended its original application to seek
approval for only the current needs of the water-bottling
operation rather than allowing for company growth.
At a November 28, 2006 hearing, Kauai Springs ' attorney
retracted his earlier amendment and asked the Planning Commission
to consider its original application, which contemplated company
growth. Kauai Springs ' attorney also continued to negotiate for
the granting of a conditional Use Permit :
Chair: Yes. I would ask in light of public comment
whether you would be willing to accept the restriction on
the Use Permit that it would be for the use of the applicant
only, it's not transferable and that should you sell the
business that the Commission would have the right to review
the Use Permit?
Mr. Cohen: Yes.
At a January 23, 2007 hearing, Kauai Springs ' attorney
expressed his surprise with the Planning Commission' s decision to
deny the permit application, stating that "I think where we were
heading and correct me if I 'm wrong was a conditioned approval,
conditioned upon clarifying some of these water right issues. "
He further asked the Planning Commission to "reconsider this
outright denial . "
At a February 13 , 2007 hearing, Kauai Springs ' attorney
urged the Planning Commission to reconsider its decision, offered
to accept conditional permits, and asked for another continuance
in order to obtain more evidence pertaining to the issue of water
rights, stating:
Again we were willing to put all sorts of conditions
and I know you have a long docket ahead of you. What we
would like is for you to vote to reconsider and then
continue this matter to a time in the not [too] distant
future when we can all get our arms around any of the
remaining issues . . . . I don't see any downside in
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continuing this matter until we are certain and you
gentlemen are certain that he is indeed operating outside
the limits of the law. I don't think we are going to find
that out but it sure would be nice to get to that point. So
I thank you.
At no point in time did Kauai Springs assert that its
permit application had been automatically approved.
Kauai Springs argues that "merely appearing at a
hearing after an auto approve deadline has passed does not
constitute waiver or affirmation [, ] " citing October Twenty-Four,
Inc. v. Planning & Zoning Comm 'n, 646 A.2d 926, 931-32 (Conn.
App. Ct . 1994) and Frito-Lay, Inc. v. Planning & Zoning Comm 'n,
538 A.2d 1039 (Conn. 1988) . However, as outlined above, Kauai
Springs actively participated in hearings, asked for a
continuance of the matter, actively negotiated, and opposed and
sought reconsideration of the denial of the permits after the
applicable auto-approve deadlines had passed. Furthermore, the
courts in October Twenty-Four and Frito Lay addressed the
separate issue of waiver of an automatic approval deadline, as
opposed to the issue of assent to an extension of an automatic
approval deadline as specifically allowed by ordinance.
The circuit court erred in concluding that Kauai
Springs did not assent to an extension of the deadlines to take
action on the Use Permit and the Class IV Zoning Permit, and
therefore these permits were not automatically approved based on
expiration of the applicable time periods.
B. Public Trust Doctrine Related to Water Resources
With regard to the public trust doctrine, the Planning
Commission takes issue with two COLs by the circuit court which
the Planning Commission contends raise doubt as to whether it had
public trust duties. Specifically, the Planning Commission
challenges COLS 71 and 72 in the Circuit Court Order, which
state:
71. The Planning Commission did not identify any other
outstanding regulatory processes that it claimed must
have been fulfilled in order to satisfy any duty under
the public trust that it may have had.
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72. There is nothing in the Record of this case to show
that the Planning Commission did not fulfill any duty
it may have under the public trust. Kelly v. 1250
Oceanside Partners, 111 Haw. 205, 140 P.3d 985 (2006) .
(Emphasis added. ) The Planning Commission argues that because of
the indefinite nature of these COLs, referencing any duty that
the Planning Commission "may" have under the public trust
doctrine, the circuit court implicitly held that the Planning
Commission had no duty under the public trust doctrine to
consider Kauai Springs ' water use in this matter.
The Planning Commission also challenges COL 63, which
states :
63. Decisions on permit applications must be grounded in
fact and the Record, not speculation, and the Record in
this case is devoid of any evidence that Kauai
Springs ('] existing or proposed uses might affect water
resources subject to the public trust.
The Planning Commission argues that it does not matter that
Knudsen Trust owns the land containing the water source or that
Grove Farm owns the water transport system, but rather, because
the public trust doctrine applies to all water resources, it
could not overlook Kauai Springs' commercialized use of water.
The Planning Commission thus contends that because Kauai Springs
sought to greatly increase its bottling and commercialization of
drinking water taken from a ground water source, and because
Kauai Springs had not investigated its rights (or the rights of
the Knudsen Trust or Grove Farm) related to the water, there was
ample evidence that Kauai Springs ' existing or proposed use might
affect resources subject to the public trust . Given these public
trust implications, the Planning Commission contends that Kauai
Springs was required to show that its commercialized use of the
water resources "was legal . "
In response, Kauai Springs argues that the Planning
Commission misreads the Circuit Court Order, because the circuit
court did recognize that the Planning Commission had public trust
duties and the court determined that those duties had been
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satisfied. Kauai Springs further argues that, because its permit
application did not seek permission to take or extract water
(because it does not control the water source) and all it does is
open a tap on a pipeline that crosses the Property, it is no
different than any other business that purchases water from
another.
Kauai Springs thus contends that the Planning
Commission' s public trust inquiry is limited to whether public
resources would be impacted by Kauai Springs ' building on
agriculturally-zoned land, and the public trust obligation does
not authorize the Planning Commission "to turn the usual zoning
permit process into an open-ended and standardless [sic] inquiry
in which it is free' to stray outside of its delegated
responsibilities merely because a connection can be made between
a permit application and water resources. " Rather, according to
Kauai Springs, the Planning Commission took "reasonable measures"
and made "appropriate assessments" to protect public trust
resources by seeking input from other government agencies, and
had before it information satisfying the permit criteria as well
as affirmative evidence that the use would not affect public
trust resources . Ultimately, Kauai Springs argues that the
Planning Commission fulfilled its public trust duties, but
wrongfully denied the permit application by requiring Kauai
Springs to exhaust "outstanding regulatory processes, " i. e. by
requiring that Kauai Springs had the burden to show that "the
proposed use and sale of the water does not violate any
applicable law administered by [the Water Commission] , the PUC or
any other applicable regulatory agency. "
Given these arguments, the parties do not dispute that
the County generally has public trust duties. The dispute in
this case centers more specifically on the scope of the County's
public trust duties and the applicable standards or criteria that
the County (through the Planning Commission) is authorized to
employ in reviewing the application for the three permits . Thus,
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we must determine: (1) whether the County' s public trust duties
extend to a review of Kauai Springs ' use of ground water in its
water bottling operation or is limited to just reviewing Kauai
Springs ' building on the Property; and (2) what are the
applicable standards and criteria that the Planning Commission
should apply in fulfilling its ;public trust duties .
1 . The Planning Commission's Public Trust Duties Extend To
Reviewing Kauai Springs' Use of Water
The parties do not dispute that the public trust duties
required under article XI, section 1 of the Hawai`i Constitution
apply to the County. Article X:I, section 1, promulgated in 1978,
provides:
Conservation and Development of Resources
Section 1. For the benefit of present and future
generations, the State and its political subdivisions shall
conserve and protect Hawaii's natural beauty and all natural
resources, including land, water, air, minerals and energy
sources, and shall promote the development and utilization
of these resources in a manner consistent with their
conservation and in furtherance of the self-sufficiency of
the State.
All public natural resources are held in trust by the
State for the benefit of the people.
(Emphasis added. )
In Kelly, the Hawaii Supreme Court ruled that the
County of Hawai`i was a political subdivision of the State
pursuant to article VIII, section I of the Hawai`i Constitution,
and in turn, "the plain language of article XI, section 1
mandates that the County does have an obligation to conserve and
protect the [S] tate ' s natural resources. " 111 Hawaii at 224-25,
140 P.3d at 1004-05 . The same holds true for the County in this
case.
Here, the Circuit Court Order cites to Kelly in COLs 61
and 62, concluding that " [t] he State of Hawaii and its political
subdivisions have duties under the public trust [] " and that the
" [p] olitical subdivisions ' of the State include the County of
Kauai . " Therefore, the circuit court clearly recognized that the
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Planning Commission had duties under the public trust doctrine,
generally.
As noted above, however, the dispute in this case
centers on whether the public trust duties under article XI,
section 1 extend to a review of Kauai Springs ' existing and
proposed use of water for its operations. In this regard, the
Circuit Court Order is somewhat conflicting, first ruling in COL
63 that the record "is devoid of any evidence that Kauai
Springs [ ' s] existing or proposed uses might affect water
resources subject to the public trust [, ] " but then apparently
suggesting in COLS 71 and 72 that the Planning Commission "may"
have public trust duties in this case. We conclude that the
circuit court ' s COLS 63, 71 and 72 are incorrect in that they do
not recognize the Planning Commission' s public trust duty to
consider and review Kauai Springs ' water usage in its water
bottling operation.
First, Hawai`i law has consistently recognized water
resources as a part of a public trust .' This public trust has
its genesis in the common law. See Waiahole I, 94 Hawaii at
130, 9 P. 3d at 442 . The Hawaii Supreme Court has declared that
"the right to water is one of the most important usufruct of
lands, and it appears clear . . . that . . . the right to water
was specifically and definitely reserved for the people of
Hawai [`] i for their common good in all of the land grants. "
is Early Hawai'i Supreme Court decisions acknowledged that Hawaii's
system of laws governing water is "based upon and is the outgrowth of ancient
Hawaiian customs and methods of Hawaiians in dealing with the subject of
water. " Territory v. Gay, 31 Haw. 376, 395 (1930) . The system was of a
cooperative nature and based on a stable "spirit of mutual dependence"
stemming from "the critical import of water in the lives of the people. "
Reppun v. Bd. of Water Supply, 65 Haw. 531, 540, 656 P.2d 57, 64 (1982) ; see
generally id. at 540-48, 656 P.2d at 64-68 (detailing the traditional systems
of water and land management in Hawai'i and the emergence of western notions
of property ownership) ; see also Robinson v. Ariyoshi, 65 Haw. 641, 676 n.33,
658 P.2d 287, 311 n.33 (1982) (describing the ancient Hawaiian system of water
allocation) . Even after the introduction of a more western system of private
land ownership, Kingdom of Hawai'i laws continued to categorize water as a
resource reserved for the public good. See Reppun 65 Haw. at 542-45, 656 P.2d
at 65-67.
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McBryde Sugar Co. v. Robinson, 54 Haw. 174, 186, 504 P.2d 1330,
1338 (1973) (footnote omitted) . As such, rights of water
ownership were not included when private ownership of land was
instituted in Hawai`i, but rather "the ownership of water in
natural watercourses [, ] streams and rivers remained in the people
of Hawaii for their common good. " Id. at 186-87, 504 P.2d at
1338-39 . The State holds all such water in trust for the benefit
of the common good. Id. at 187, 504 P.2d at 1339; see also
Robinson v. Ariyoshi, 65 Haw. 641, 673-74 , 658 P.2d 287, 310
(1982) .
In 1978, amendments to the Hawai`i Constitution,
including the promulgation of article XI, section 1, "elevated
the public trust doctrine to the level of a constitutional
mandate. " Waiahole I, 94 Hawai'i at 131, 9 P.3d at 443; Kelly,
111 Hawaii at 222, 140 P.3d at 1002 . " [T] he public trust
doctrine applies to all water resources without exception or
distinction. " Waiahole I, 94 Hawai'i at 133, 9 P.3d at 445; see
also Kelly, 111 Hawaii at 222, 140 P. 3d at 1002 .
Second, in determining whether the Planning
Commission's scope of public trust duties required it to consider
and protect water resources in this case, we are guided by Kelly.
In Kelly, to determine whether the County of Hawai`i had a public
trust duty to protect ocean waters involved in that case, the
Hawai'i Supreme Court based its ruling on a combined analysis of
article XI, section I and the "general laws" that delegated
duties and responsibilities to the county. 111 Hawai`i at 224-
25, 140 P.3d at 1004-05 .
In Kelly, the Hawaii Supreme Court held that the
County of Hawai`i had public trust obligations to protect ocean
waters that were affected by development activity on nearby land,
where the activity had been regulated and permitted by the
county. 111 Hawai`i at 224, 140 P.3d at 1004 . There, a 1, 540
acre residential , recreational, and agricultural development was
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being constructed on the island of Hawaii and, pursuant to the
Hawaii County Code, the developer was required to obtain grading
and grubbing permits from the County of Hawai'i for construction
activity and erosion control . Id. at 209-10, 140 P.3d at 989-90 .
As a result of two heavy storms, runoff from the property was
alleged to have polluted the nearby pristine ocean waters, id. at
211-12, 140 P. 3d at 991-92 , and claims were subsequently asserted
against, inter alia, the County of Hawai`i for violating its
public trust duties.
In recognizing that the County of Hawaii ' s public trust
obligations included protecting the ocean waters involved in that
case, the Kelly court focused on the constitutional framework
related to article XI, section 1 and the statutory authority
conferring powers on the county. Id. at 224, 140 P.3d at 1004 .
The Kelly court first recognized that by its plain language,
article XI, section 1 "provides that ' the State and its political
subdivisions shall conserve and protect Hawaii ' s natural beauty
and all natural resources [ . ] ' " Id. (citation omitted) .
Importantly, the court then noted that, under a separate
provision of the Hawai'i Constitution -- article VIII, section 1
-- " [t]he legislature shall create counties, and may create other
political subdivisions within the State, and provide for the
government thereof . Each political subdivision shall have and
exercise such powers as shall be conferred under general laws. "
Id. (quoting Haw. Const . Art . VIII, sec . 1) (italics in
original, underline emphasis added) .
Given the constitutional mandates of article XI,
section 1 and article VIII, section 1, the Kelly court then
analyzed the statutory authority -- i. e. , the general laws --
under which the County of Hawai'i was acting in regulating the
grading and grubbing activity in that case . The supreme court
noted that :
The County's power under general laws with respect to its
public trust duty to protect the natural water resources of
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the State can be found in HRS chapter 180C (1993) , entitled
"Soil Erosion and Sediment Control. " HRS § 180C-2 (a)
provides that " [t]he county governments, in cooperation with
the soil and water conservation districts and other
appropriate state and federal agencies, shall enact
ordinances for the purpose of controlling soil erosion and
sediment. "
Id. at 224, 140 P. 3d at 1004 (underline and bold emphasis added).
The court then quoted from HRS § 180C-2 (b) (2011 Repl . ) , which
set out the minimum required of county ordinances for the purpose
of soil erosion and sediment control . In particular, the supreme
court highlighted a section of HRS § 180C-2 (b) that required
county ordinances to " [c] ontain standards for various types of
soil and land uses, which standards shall include criteria,
techniques, and methods for the control of erosion and sediment
resulting from land disturbing activities. " Id. (italics
omitted, underline emphasis added) . In turn, the supreme court
noted that:
"Land disturbing activity" is defined under HRS § 180C-1
(1993) , in pertinent part as "any land change which may
result in soil erosion from water or wind and the movement
of sediment into state waters [.) " "State waters" are
defined in pertinent part under the same statute as "all
waters, fresh, brackish or salt, around and within the
State, including, but not limited to, coastal waters [.] "
Id. at 225 n.23, 140 P. 3d at 1005 n.23 (italics in original,
underline emphasis added) . Thus, the supreme court ' s analysis in
Kelly demonstrates that the scope of the county' s public trust
duties in that case included the protection of the coastal water
resources in light of both the public trust duties mandated by
article XI, section 1 and the authority and duties delegated to
the county by statute that established protection of the coastal
waters as a concern for the county.
Indeed, the supreme court concluded this portion of its
analysis as follows:
the plain language of article XI, section 1 mandates that
the County does have an obligation to conserve and protect
the [S]tate's natural resources. Coupled with the State's
power to create and delegate duties and responsibilities to
the various counties through the enactment of statutes, the
County's duty to conserve and protect is clear.
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Id. at 224-25, 140 P. 3d at 1004-05 (bold and underline emphasis
added) ; see also id. at 227 n. 29, 140 P.3d at 1007 n.29 (the
legislative history for HRS Chapter 180C evidenced the
legislature ' s intention " ' to conserve and protect the land,
water, and other resources of the State ' by requiring ' the county
governments to enact ordinances for the purpose of controlling
soil erosion and sediment [ . ] '" (citing H. Stand. Comm. Rep. No.
234-74, in 1974 House Journal, at 647) ) .
Therefore, to determine whether the duties and
responsibilities delegated to the County (and thus to the
Planning Commission) encompass protection of the water at issue
in this case, we must analyze the "general laws" authorizing the
County (and thus the Planning Commission) to issue the three
permits involved in this case.
(a) The Use Permit and Class IV Zoning Permit
The Use Permit and Class IV Zoning Permit sought by
Kauai Springs are regulated by the County pursuant to the
County' s delegated authority to zone. See HRS § 46-4 (Supp.
2006) ; KCC, Chapter 8, The Comprehensive Zoning Ordinance for the
County of Kauai (CZO) . The general law that conferred zoning
powers to the counties is HRS § 46-4 (a) . Kaiser Hawaii Kai Dev.
Co. v. City and Cnty. of Honolulu, 70 Haw. 480, 483 , 777 P. 2d
244, 246 (1989) ("The counties of our state derive their zoning
powers from HRS § 46-4 (a) . . . referred to as the Zoning
Enabling Act . ") . HRS § 46-4 (a) provides in relevant part :
(a) . . . Zoning in all counties shall be accomplished
within the framework of a long-range, comprehensive general
plan prepared or being prepared to guide the overall future
development of the county. Zoning shall be one of the tools
available to the county to put the general plan into effect
in an orderly manner. . . . The zoning power granted herein
shall be exercised by ordinance which may relate to:
(1) The areas within which agriculture, forestry,
industry, trade, and business may be conducted;
(12) Other regulations the boards or city council find
necessary and proper to permit and encourage the orderly
development of land resources within their
jurisdictions.
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(Emphases added. )
Pursuant to HRS § 46-4 (a) , the County was thus
authorized to adopt a comprehensive general plan to guide the
county' s future development and to adopt ordinances to exercise
the zoning power. Kauai ' s General Plan recognizes that the
zoning power granted under HRS § 46-4 must be based on a general
plan and " [i]n fact, the general plan comes before and guides
zoning. " Kaua`i General Plan, 1 .2 .1; see also KCC, § 7-1.2
(Kauai ' s General Plan is "intended . . . to be considered in
reviewing specific . . . development applications. ") .
Chapter 2 of Kauai ' s General Plan presents, inter alia,
the vision for Kaua`i in the year 2020 . The vision statement
includes that " [t]he people of :Kauai, along with the State and
County governments, [will] practice careful stewardship of the
island' s land and waters . The high mountains, forested watershed
areas, the ocean and coral reefs, beaches - these areas are
managed as part of the public lands trust . " Kaua`i General Plan
at 2-3 (emphases added) .16
Moreover, in the CZO adopted for the County, a Use
Permit and a Class IV Zoning Permit' can be granted only if the
Planning Commission finds, inter alia, that "the establishment,
maintenance, or operation of the construction, development,
activity or use in the particular case . . . will not cause any
substantial harmful environmental consequences on the land of the
applicant or on other lands or waters, and will not be
16 Section 3.4 of the Kaua`i General Plan adopts policies related to
watersheds, streams and water quality, however those policies apply " (i]n
developing County roads and drainage facilities and in administering the
grading, flood control, and drainage regulations (.) " Therefore, it does not
appear that the policies adopted in Section 3.4 are pertinent to this case.
17 A Class IV Zoning Permit is required because a Use Permit is
required. See KCC § 8-7.7(4) . There do not appear to be any independent
standards in the KCC for approval of a Class IV Zoning Permit and the parties
thus agree that the KCC standards for approving a Use Permit likewise apply to
the Class IV Zoning Permit.
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inconsistent with the intent of fthe CZO1 and the General Plan. "
KCC § 8-20 . 5 (emphases added) .
In sum, HRS § 46-4, inter alia, confers authority upon
each county to zone, to adopt a comprehensive general plan to
guide the overall future development of the county, and to
exercise the zoning power by ordinance. Relevant to the County' s
public trust duty in this case, the Kaua`i General Plan and the
zoning ordinance for issuing a Use Permit and a Class IV Zoning
Permit provide for the protection of water and watershed areas.
Therefore, as in Kelly, the County' s public trust duty under
article XI, section I of the Hawaii Constitution, " fcloupled
with the State ' s power to create and delegate duties and
responsibilities to the various counties through the enactment of
statutes, " 111 Hawaii at 225, 140 P.3d at 1005 (emphasis added) ,
establishes that the County (through the Planning Commission) had
a duty to conserve and protect water in considering whether to
issue the Use Permit and the Class IV Zoning Permit to Kauai
Springs.
(b) The Special Permit
A Special Permit was required in this case because the
Property is located in a state agricultural district and
operation of a spring water bottling facility is not otherwise
permitted under HRS § 205-4 .5 (Supp. 2006) , which lists
permissible uses within the state agricultural districts .
HRS § 205-6 (Supp. 2012) delegates authority to the respective
county planning commissions to promulgate procedures governing
the issuance of Special Permits . HRS § 205-6 states in relevant
part :
§ 205-6 Special Permit. (a) Subject to this section,
the county planning commission may permit certain unusual
and reasonable uses within agricultural and rural districts
other than those for which the district is classified. Any
person who desires to use the person's land within an
agricultural or rural district other than for an
agricultural or rural use, as the case may be, may petition
the planning commission of the county within which the
person's land is located for permission to use the person's
land in the manner desired. . . .
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(c) The county planning commission may, under such
protective restrictions as may be deemed necessary, permit
the desired use, but only when the use would promote the
effectiveness and objectives of this chapter; . . .
(Emphases added. )
The Hawai`i Supreme Court has ruled that the
"overarching purpose" of HRS Chapter 205 is to "protect and
conserve natural resources and foster intelligent, effective, and
orderly land allocation and development . " Curtis v. Bd. of
Appeals, Cnty. of Hawaii, 90 Hawai'i 384, 396, 978 P.2d 822, 834
(1999) (internal quotation marks omitted) ; see also Cnty. of
Hawaii v. Ala Loop Homeowners, 123 Hawaii 391, 409, 235 P.3d
1103, 1121 (2010) ( "HRS chapter 205 is a law relating to the
conservation, protection and enhancement of natural
resources [ . 1 ") . As noted in Curtis,
The stated purpose of the law is, inter alia:
to protect and conserve through zoning the urban,
agricultural and conservation lands within all the
counties. A coordinated, balanced approach not only
within each county but an overall balance of statewide
land needs for economic growth is essential to:
(1) Utilize the land resources in an intelligent,
effective manner based upon the capabilities and
characteristics of the soil and the needs of the
economy;
(2) Conserve forests, water resources and land,
particularly to preserve the prime agricultural lands
from unnecessary urbanization;
(3) State the allocation of land for development in an
orderly plan to meet actual needs and minimize costs of
providing utilities and other public services . . . .
90 Hawai`i at 396, 978 P.2d at 834 (underline emphases added,
italics and footnote omitted) (quoting H. Stand. Comm. Rep. No.
395, in 1961 House Journal, at 855-56) .
HRS § 205-6 thus confers authority to the Planning
Commission to grant special permits for uses not otherwise
permitted in state agricultural districts, but only when the use
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would promote the effectiveness and objectives of HRS Chapter
205 . The overarching purpose of HRS Chapter 205 includes, among
other things, the protection and conservation of water resources.
Therefore, the Planning Commission' s public trust duty under
article XI, section 1 of the Hawaii Constitution, coupled with
the State' s power to create and delegate duties to the counties,
establishes that the Planning Commission had a duty to conserve
and protect water resources in considering whether to issue the
Special Permit to Kauai Springs.
(c) Kauai Springs' Current and Proposed Use of the
Property Affects a Public Trust Resource
Here, Kauai Springs' application seeks to continue
operating a spring water bottling facility. The spring water
utilized by Kauai Springs is held in trust for the common good
and therefore the proposed use does have an impact on a public
trust resource . See Waiahole I, 94 Hawaii at 133 n. 31, 9 P.3d
at 445 n.31 (rejecting the contention that the reference in
Article XI, section 1 to "public natural resources" indicates an
intent to exclude "privately owned" waters from the public trust
inasmuch as "apart from any private rights that may exist in
water, ' there is, as there always has been, a superior public
interest in this natural bounty. '" (citations omitted) ) .
According to the record, Kauai Springs currently
bottles between 1, 500 and 2, 500 gallons of water per week and
proposes an increase to at least 35, 000 gallons of water per
week. Thus, the record clearly contains evidence that Kauai
Springs ' existing and proposed use of the Property directly
affects a public trust resource. Accordingly, we vacate the
circuit court ' s COL 63 . We also vacate the circuit court 's COLS
71 and 72 in that they fail to affirmatively recognize that the
Planning Commission has a public trust duty to review Kauai
Springs ' use of water in its operations on the Property given
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article XI, section 1, as well as the general laws and authorized
regulatory provisions applicable to issuance of the Use Permit,
Class IV Zoning Permit, and Special Permit.
We therefore agree with the Planning Commission that,
in deciding whether to approve the application for the three
permits, the Planning Commission' s public trust duties required
it to consider Kauai Springs ' use of water for the existing and
proposed operations of the water bottling facility on the
Property. We thus reject Kauai Springs ' assertion that the
Planning Commission' s public trust inquiry was limited only to
whether public resources would be affected by Kauai Springs '
building on agriculturally-zoned land.
2. Standards and Criteria for Reviewing the Application
for Permits
Having determined that the Planning Commission' s public
trust duties required it to consider Kauai Springs ' use of water
in reviewing the application for the three permits, we now turn
to the question of whether the Planning Commission employed the
correct standards and criteria in carrying out its public trust
obligations .
In this regard, the Planning Commission challenges the
following COLs in the Circuit Court Order:
41. The Planning Commission did not consider the proper
criteria when reviewing and processing Kauai Springs'
zoning permit applications. The applicable standards
for whether Use, Special, and Class IV permits should
be issued are clearly established.
59. The [Planning Commission Order] contains no finding,
and there is no evidence in the Record, that Kauai
Springs did not meet the criteria for issuing the three
permits at issue in this appeal.
73. If Kauai Springs bore the burden of proof that its
proposed use did "not violate any applicable law
administered by [the Water Commission] , the PUC or any
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other applicable regulatory agency, " Kauai Springs
plainly carried that burden of proof. Both of these
agencies had provided their input to the Planning
Commission, and neither agency had any substantial
concerns with Kauai Springs, as reflected in the
[Planning Commission Order] .
75. . . . [The Planning Commission's] Conclusions of Law #3
and #4 are wrong.
As noted earlier, the Planning Commission' s COLs 3 and 4, which
the circuit court held were wrong, stated:
3. In view of the comments received from [the Water
Commission] and PUC the land use permit process should
insure that all applicable requirements and regulatory
processes relating to water rights, usage, and sale are
satisfactorily complied with prior to taking action on
the subject permits. The Applicant, as a party to this
proceeding should also carry the burden of proof that
the proposed use and sale of the water does not violate
any applicable law administered by [the Water
Commission] , the PUC or any other applicable regulatory
agency.
4. There is no substantive evidence that the Applicant has
any legal standing and authority to extract and sell
the water on a commercial basis.
(Emphases added. )
To determine whether the Planning Commission applied
the correct standards and criteria in reviewing Kauai Springs '
application for the permits, we again turn to Kelly for guidance.
In Kelly, as noted above, the County of Hawai`i issued grading
and grubbing permits for development of land near coastal waters.
111 Hawaii at 210, 140 P. 3d at 990 . The Hawai`i Supreme Court
rejected the County of Hawaii ' s argument that it had no duty,
inter alia, to take affirmative action to make pre-permit
assessments of the effect of the development on coastal
resources. Id. at 226-28, 140 P.3d at 1006-08 . Of note, in
framing the county' s duties and certain relevant standards in
that case, the court relied, in part, on both the statute and the
applicable provisions of the Hawai`i County Code setting out the
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county' s obligations to control soil erosion and sediment . Id.
at 227-28, 140 P.3d at 1007-08 .
Further, the Kelly court relied on certain standards in
holding that the evidence in that case did not show that the
county violated its public trust duties. Id. at 209, 228, 140
P. 3d at 989, 1008 . The court stated there was no evidence in the
record "to show a lack of reasonable erosion control measures at
the Property or that actions or inactions of the County caused
any damage to coastal waters. " Id. at 228, 140 P.3d at 1006
(emphasis added) . The court also noted that " [i] t appears that
no evidence was entered establishing a failure by the County to
make appropriate assessments prior to the issuance of any
approval or permit [ . ] " Id. (emphasis added) . The court thus
concluded that "inasmuch as the record is devoid of evidence
adduced at trial that there was a lack of reasonable erosion
control measures or that the County failed to make appropriate
assessments, " it could not sustain the trial court ' s ruling. Id.
(Emphases added) . Thus, the supreme court ruled that the trial
court had erred in concluding that the county had breached its
public trust duties . Id.
In addition to the guidance provided by Kelly, we
recognize that, although the public trust doctrine and statutory
protections of natural resources often overlap, the public trust
doctrine "exists independently of any statutory protections
supplied by the legislature. " Waiahole I, 94 Hawaii at 132, 9
P.3d at 444 . As the supreme court expressed, " [t]his view is all
the more compelling . . . in light of our state ' s constitutional
public trust mandate. " Id. The supreme court endorsed the idea
that " [m] ere compliance by [agencies] with their legislative
authority is not sufficient to determine if their actions comport
with the requirements of the public trust doctrine. The public
trust doctrine at all times forms the outer boundaries of
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permissible government action with respect to public trust
resources. " Id. (quoting Kootenai Envtl. Alliance v. Panhandle
Yacht Club, Inc. , 105 Idaho 622, 671 P.2d 1085, 1095 (1983) ) .
We further recognize that under the public trust
doctrine, those seeking the private use of water for economic
gain have the burden to justify the use, given the public trust
considerations. As expressed in In re Kukui (Molokai) , Inc. , 116
Hawai'i 481, 174 P. 3d 320 (2007) :
Although "the state water resources trust acknowledges that
private use for economic development may produce important
public benefits and that such benefits must figure into any
balancing of competing interests in water, it stops short of
embracing private commercial use as a protected trust
purpose." [Waiahole I, 94 Hawai'i at 138, 9 P.3d at 450) .
Therefore, to the extent that "the public trust . . .
establishes use consistent with trust purposes as the norm
or 'default' condition, . . . it effectively prescribes a
'higher level of scrutiny' for private commercial uses." Id.
at 142, 9 P.3d at 454 (footnote omitted) . In this regard,
"the burden ultimately lies with those seeking or approving
such uses to justify them in light of the purposes protected
by the trust. " Id.
Id. at 508, 174 P.3d at 347; see also Waiahole I, 94 Hawaii at
138, 9 P.3d at 450 (noting that prior Hawaii cases "generally
demonstrate that the public trust may allow grants of private
interests in trust resources under certain circumstances, "
however the case law did not "establish private commercial use as
among the public purposes protected by the trust . ") . Thus,
Hawaii precedent does not suggest that use of water for economic
gain is illegal or improper per se. Indeed, as noted in In re
Kukui (Molokai) , Inc. and Waiahole I, private use of water for
economic gain could produce important public benefits. However,
such use is not protected as part of the public trust and a
higher level of scrutiny for such use is required.
Based on our reading of Kelly, Waiahole I, and In re
Kukui (Molokai) , Inc. , we thus hold that the applicable standards
and criteria that the Planning Commission is required to employ
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to meet its public trust obligations in this case are as follows :
that the Planning Commission' s decision be initially grounded in
the framework of the statutes and regulatory provisions that
authorize the Planning Commission to act in this instance; in
addition thereto, that the Planning Commission make appropriate
assessments and require reasonable measures to protect the water
resources at issue in this case; and, because Kauai Springs seeks
to use the water for economic gain, this case requires that the
Planning Commission give the permit application a higher level of
scrutiny and, although Kauai Springs ' use of the water is not
illegal or improper per se, that Kauai Springs carries the burden
to justify the use of the water in light of the purposes
protected by the public trust .
As to the statutory and regulatory framework for the
Use Permit and Class IV Zoning Permit, as noted above, HRS § 46-
4 (a) authorizes the County to adopt the Kauai General Plan and
zoning ordinances . The general plan sets forth as part of its
vision statement that " [t]he people of Kaua`i, along with the
State and County governments, [will] practice careful stewardship
of the island' s land and waters. " The Kauai CZO, more
specifically, sets out the criteria for issuing the Use Permit
and Class IV Zoning Permit, '8 as follows :
(a) A Use Permit may be granted only if the Planning
Commission finds that the establishment, maintenance, or
operation of the construction, development, activity or use
in the particular case is a compatible use and is not
detrimental to health, safety, peace, morals, comfort and
general welfare of persons residing or working in the
neighborhood of the proposed use, or detrimental or
incurious to property and improvements in the neighborhood
or to the general welfare of the community, and will not
cause any substantial harmful environmental consequences on
the land of the applicant or on other lands or waters, and
16 As noted earlier, there does not appear to be independent standards
for approval of a Class IV Zoning Permit. The parties agree that the KCC
standards for approving a Use Permit also apply to the Class IV Zoning
Permit.
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will not be inconsistent with the intent of this Chapter and
the General Plan.
(b) The Planning Commission may impose conditions on
the permit involving any of the following matters: location,
amount and type and time of construction, type of use, its
maintenance and operation, type and amount of traffic, off-
street parking, condition and width of adjoining roads,
access, nuisance, values, appearance of the building,
landscaping, yards, open areas and other matters deemed
necessary by the Planning Commission.
KCC § 8-20 .5 (emphasis added) .
For the Special Permit, as noted above, HRS § 205-6 (c)
provides that " [t] he county planning commission may, under such
protective restrictions as may be deemed necessary, permit the
desired use, but only when the use would promote the
effectiveness and objectives of this chapter [ . ] " The
"overarching purpose" of HRS Chapter 205 is to "protect and
conserve natural resources and foster intelligent, effective, and
orderly land allocation and development . " Curtis 90 Hawai`i at
396, 978 P.2d at 834 (internal quotation marks omitted) .
Further, and more specifically, the Planning Commission Rules
1-13-6 provide:
1-13-6 Guidelines for Issuance of Special Permit. The
Planning Commission may approve a Special Permit under such
protective restrictions as may be deemed necessary if it
finds that the proposed use:
(a) Is an unusual and reasonable use of land situated
within the Agricultural or Rural District, whichever the
case may be. The Planning Commission shall consider the
following guidelines in determining unusual and reasonable
use:
1) Such use shall not be contrary to the
objectives sought to be accomplished by
Chapters 205 and 205A HRS, and the rules of
the Land Use Commission;
2) The desired use would not adversely affect
surrounding property;
3) The use would not unreasonably burden public
agencies to provide roads and streets, sewers,
water, drainage, school improvements, and
police and fire protection;
4) Unusual conditions, trends, and needs have
arisen since the district boundaries and rules
were established; and
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5) The land upon which the proposed use is sought
is unsuited for the uses permitted within the
district; and
(b) Would promote the effectiveness and objectives of
Chapter 205, HRS, as amended.
(Emphasis added. )
Given the above, the Planning Commission' s review of
Kauai Springs ' application should have been based, as an initial
matter, upon the standards and criteria specified by its
statutory and regulatory authority to issue the permits in
question. Although the Planning Commission Order cites to, inter
alia, KCC § 8-20 . 5 and Planning Commission Rules § 1-13-6 as
setting out applicable standards for issuance of the permits, the
denial of the permits is not based on any of the particular
standards or criteria set out in those provisions.
The Planning Commission essentially required Kauai
Springs to prove that its water usage -- and the sale of the
water by the Knudson Trust and Grove Farm's operation of the
water system -- were legal and met all potentially applicable
regulatory requirements. No concerns are articulated in the
Planning Commission Order related per se to Kauai Springs ' water
bottling operation or its particular use of the water. For
instance, there is no concern articulated about the amount of
water Kauai Springs sought to use, whether it was a compatible
use in the area, whether it would be detrimental to the general
welfare of other people or other property in the area or to the
community, or whether it would cause harmful environmental
consequences to lands or waters . There also was no concern
articulated that Kauai Springs' use of water would be contrary to
the objectives of HRS Chapter 205, HRS Chapter 205A or the rules
of the Land Use Commission. Rather, the concerns stated in the
Planning Commission Order are based on whether the Knudsen Trust
and Grove Farm, who were non-parties to the proceeding, were in
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compliance with all regulatory requirements, and whether Kauai
Springs has "legal standing and authority to extract and sell the
water on a commercial basis. "
The Planning Commission Order references the Water
Commission' s remarks, stating:
The Planning Department further acknowledges the qualifying
remarks by [the Water Commission] that:
• if the source needs to be modified in any way, a
well modification permit from [the Water
Commission] may be required;
• if a pump is to be installed to induce additional
water flow, a pump installation permit from [the
Water Commission] would be required;
• if the modification results in impacts to surface
waters, a petition to amend the interim instream
flow standard for affected surface waters must be
made and approved prior to use of the water.
The Planning Commission Order then notes that the site visit to
Tunnel No. 1 showed that certain items had been built in the
tunnel .19 In this regard, the Planning Commission Order states:
In view of the foregoing, there may be outstanding
regulatory processes with [the Water Commission] that the
Applicant must satisfy. Based on the comments provided by
[the Water Commission] and staff observations during the
field trip, it should be the Applicant's responsibility to
confirm and determine the need for any permits that may be
required for the construction of the concrete stem wall and
the steel panel mounted over the tunnel entrance.
The Planning Commission Order further highlights
comments from the PUC that there was a possibility that Grove
Farm may be operating a public utility and thus could be subject
to PUC regulation. Further, the Planning Commission Order notes
that the PVC' s comments were informal and that to obtain a formal
19 The Planning Commission Order notes that "to prevent infiltration of
surface water into the tunnel, a concrete stem wall was constructed at the
bottom of the tunnel entrance to above [the] water level within the tunnel and
a steel panel was mounted over the tunnel entrance. Furthermore . . . inside
the tunnel, water enters the system through a water pipe installed at or below
the water surface. "
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opinion, the Planning Department could file a petition for
declaratory relief.
As a result of the comments by the Water Commission and
the PUC, COL 3 of the Planning Commission Order then concludes in
relevant part that, "the land use permit process should insure
that all applicable requirements and regulatory processes
relating to water rights, usage, and sale are satisfactorily
complied with prior to taking action on the subject permits, " and
that Kauai Springs as the applicant should carry the burden of
proof "that the proposed use and sale of the water does not
violate any applicable law administered by [the Water
Commission] , the PUC or any other applicable regulatory agency. "
(Emphasis added. ) Further, although there are no findings
related to Kauai Springs ' commercial use of the water, COL 4 of
the Planning Commission Order concludes that " [t] here is no
substantive evidence that the Applicant has any legal standing
and authority to extract and sell the water on a commercial
basis. "
To its credit, the Planning Commission took seriously
its public trust duty and made appropriate assessments by, inter
alia, investigating the water source and the transmission of the
water, seeking comment from a number of county and state
agencies, and holding several hearings and seeking input from the
community related to Kauai Springs ' application for the permits.
However, based on the articulated basis for its decision, the
Planning Commission applied incorrect standards and criteria in
denying the permits.
First, as an initial matter, there is no indication in
the Planning Commission Order that denial of the permits was
grounded upon any statutory or regulatory criteria relevant to
the respective permits, or that those criteria were a part of the
Planning Commission' s consideration. For instance, the Planning
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Commission did not analyze or base its denial of the permits in
any way on Kauai Springs ' failure to meet any requirements under
KCC § 8-20 . 5 (for the Use Permit or Class IV Zoning Permit) or
Planning Commission Rules § 1-13-6 (for the Special Permit) .
Second, under the circumstances of this case, it was
not a reasonable measure for the Planning Commission to require
that Kauai Springs prove that "the proposed use and sale of the
water does not violate any applicable law administered by [the
Water Commission] , the PUC or any other applicable regulatory
agency. " This requirement creates an obscure and indefinite
burden of proof because it is completely open-ended as to the
"applicable law" that is of concern to the Planning Commission
and completely open-ended as to "any other applicable regulatory
agency" that the Planning Commission believes would have
jurisdiction relevant to its permit review. Without making its
requirements clear, the Planning Commission Order was arbitrary
and capricious in denying the permits. See HRS § 91-14 (g) (6)
(2012 Repl . ) ; see also De Maria v. Enfield Planning and Zoning
Comm 'n, 271 A.2d 105 (Conn.App.Ct . 1970) (holding that vague and
undefined considerations alone were insufficient to support
zoning authority' s denial of construction permit) ; Bethlehem
Christian Fellowship, Inc. v. Planning and Zoning Comm 'n of the
Town of Morris, 807 A.2d 1089 (Conn.App.Ct . 2002) (noting that a
special permit could not be denied for vague or general reasons) ,
overruled on other grounds by Cambodian Buddhist Soc. of
Connecticut, Inc. v. Planning and Zoning Comm 'n of Town of
Newtown, 941 A.2d 868 (Conn.App.Ct. 2008) .
Further, given the circumstances and the record in this
case, it was not a reasonable measure for the Planning Commission
to require Kauai Springs to undertake regulatory action to
establish and confirm that other parties, Knudsen Trust and Grove
Farm, were in compliance with "all applicable requirements and
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regulatory processes, " especially given the limited and specific
concerns raised by the Water Commission and the PUC. As noted
above, the Planning Commission Order articulates a concern that
involvement by the Water Commission would be needed if (a) the
water source needed to be modified in any way, (b) a pump is to
be installed to induce additional water flow, or (c) a
modification results in impact to surface waters.20 These
clearly are issues that could affect the water resource, but they
are factual questions that could have been addressed directly by
the Planning Commission. As found by the circuit court and
undisputed by the parties, the water system was constructed by
Koloa Sugar Mill in the 1890s to irrigate the ahupua'a of Koloa,
and thus the question is whether Kauai Springs ' existing or
proposed use of the water would require modification of the water
source and/or would require that a pump be installed. Because
these questions can be answered by the Planning Commission, in
light of the input from the Water Commission, it was not
reasonable to require Kauai Springs to initiate an entirely
separate regulatory proceeding before the Water Commission to
determine that all applicable requirements were met.21 In the
event that Kauai Springs failed to show that its water use would
not require modification of the water source and would not
20 In correspondence with the Planning Commission, the Water Commission
clarified that no permits would be required from it if three conditions were
met: (1) the tunnel is not being changed, and Kauai Springs' use of the water
is not inducing more water to come out of the source or tunnel; (2) the
existing source has been registered and is grandfathered, and there is an
agreement between Kauai Springs and the operator of the system; and (3) there
is a closed line from the tunnel to the tank. The Planning Commission Order
did not raise all of these conditions as a concern and thus we focus on the
concerns raised in the order. Indeed, the record indicates that the water
source had been registered with the Water Commission and that there was a
closed water line from the tunnel to the Grove Farm tank.
21 The parties do not address Kauai Springs' standing to initiate a
proceeding before the Water Commission where the water source is on land owned
by the Knudsen Trust, and therefore, we do not consider that question.
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require a pump to be installed to induce more water to flow, then
a denial of the permits on that basis would be appropriate under
the public trust doctrine if modification of the water source or
installation of a pump would jeopardize the water. However, the
Planning Commission did not render its decision based on any such
factual determinations .
With regard to the concern raised in the Planning
Commission Order that Grove Farm may possibly be operating a
public utility subject to PUC regulation, there is nothing in the
order or the PUC' s comments that suggests the water resources are
in jeopardy or affected without PUC regulation of Grove Farm as a
public utility. Based on the record, Grove Farm' s water system
has been in place for over a century and it currently supplies
water to other users besides Kauai Springs, including at least
eleven other homes in the area. Specifically as to Kauai
Springs, the PUC commented that Kauai Springs ' water bottling
operation does not appear to be a public utility subject to PUC
jurisdiction. Given this record, it was not reasonable to
require Kauai Springs to initiate a proceeding with the PUC to
determine if Grove Farm was a public utility subject to PUC
jurisdiction.
Third, it is clear from the record that, because Kauai
Springs seeks to use the water for economic gain, the Planning
Commission did review the permit application with a heightened
scrutiny. Moreover, the Planning Commission clearly placed a
heavy burden on Kauai Springs . As articulated by the Planning
Commission, however, the burden that it imposed was primarily
focused on whether other parties were in compliance with all
applicable laws . While compliance with the law by non-parties
supplying water may in certain circumstances be a proper burden
if such compliance will help to protect and conserve water, the
concerns by the Water Commission in this case could be addressed
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by the Planning Commission, and the PUC's comments did not
suggest that water resources would be affected. Thus, the burden
imposed here of requiring regulatory compliance by others with
all applicable laws was not reasonable.
However, the Planning Commission can and should require
Kauai Springs to carry the burden of justifying its use of water
for economic gain in light of the purposes protected by the
public trust . In re Kukui (Molokai) , Inc. , 116 Hawai`i at 508,
174 P.3d at 347; Waiahole I, 94 Hawai`i at 138, 142, 9 P.3d at
450, 454 . In this regard, because Kauai Springs provides bottled
water to residents and businesses on Kauai, such water usage "may
produce important public benefits" and "such benefits must figure
into any balancing of competing interests in water [ . ] " Waiahole
I, 94 Hawai`i at 138, 9 P.3d at 450 . Ultimately, however, Kauai
Springs must show that its use of the water for economic gain is
justifiable given the public trust purposes.
Based on the above, the circuit court 's COL 41 is
correct to the extent that it concludes that the Planning
Commission did not consider the proper criteria when reviewing
and processing Kauai Springs ' permit application. The circuit
court ' s COL 75 is also correct to the extent it concludes that
the Planning Commission' s COL 3 was wrong.
The Planning Commission also challenged the circuit
court ' s conclusion in COL 75 that the Planning Commission' s COL 4
was wrong. As previously noted, the Planning Commission' s COL 4
stated that " [t] here is no substantive evidence that the
Applicant has any legal standing and authority to extract and
sell the water on a commercial basis. " We read COL 4 as raising
a concern whether it was illegal or improper per se for Kauai
Springs to use the water for economic gain. As discussed above,
Hawaii precedent does not hold that it is illegal or improper,
in and of itself, to use water :Eor economic gain. Waiahole I, 94
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Hawaii at 138, 9 P.3d at 450; In re Kukui (Molokai) , Inc. , 116
Hawai`i at 508, 174 P.3d at 347 . The circuit court was therefore
correct that the Planning Commission' s COL 4 was wrong as a basis
for denying the permits .
With regard to the remaining portion of the circuit
court ' s COL 41, it is vacated to the extent that it suggests
applicable standards inconsistent with this opinion. With
respect to COLS 59 and 73, we address them below.
3. Remand to the Planning Commission is Appropriate
The Planning Commission challenges the circuit court 's
FOF 54 and COLs 73 and 74, arguing that the circuit court erred
in determining that Kauai Springs had presented sufficient
evidence that its proposed use of the water resources was legal .
FOF 54 is clearly erroneous in that it misstates the Planning
Commission Order and the information provided by the Water
Commission, and thus it is vacated.' COLs 73 and 74 are based
essentially on a determination that the Water Commission and the
PUC had not raised substantial concerns about Kauai Springs '
permit application. However, the framework of standards and
criteria adopted above, applicable under the Planning
Commission' s public trust duties, are different than simply
considering whether other agencies have raised substantial
concerns . Therefore, COLs 73 and 74 are also vacated.
22 The circuit court's FOF 54 states in relevant part:
54. The [Planning Commission Order] stated the Water Commission
informed the Planning Commission that Kauai Springs required
"no permits" because "the Applicant's use of the water is
not affecting the source in any way (i.e. , not inducing more
water to come out of the source or tunnel) , " "the existing
source has been registered and is basically grandfathered,
and there is an agreement between the new user (Applicant)
and the operator of the system, " and "there is a closed line
from the tunnel to the tank. "
(Emphasis added) . To the contrary, the Water Commission confirmed that no
permits would be required from it if the stated conditions were met.
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The Planning Commission further challenges the circuit
court ' s COLs 43, 45 and 59, asserting that the circuit court
erred in concluding that Kauai Springs met the requirements for
the permits . The circuit court ' s conclusions, in this regard,
appear to hold that Kauai Springs met the regulatory criteria in
the CZO and the Planning Commission Rules for issuing the
permits. The Planning Commission Order, however, does not
address in any substantive way the requirements under the CZO and
the Planning Commission Rules. As part of the more comprehensive
framework of standards and criteria adopted above, we conclude
that it would be more appropriate to allow the Planning
Commission to consider and decide whether Kauai Springs can carry
its burden in meeting the requirements of the CZO and the
Planning Commission Rules. We therefore also vacate COLS 43, 45
and 59.
We remand this matter to the Planning Commission to
consider Kauai Springs ' application for the three permits
consistent with the analysis set forth in this opinion. See
Public Access Shoreline Hawaii v. Hawaii Cnty. Planning Comm 'n,
79 Hawaii 425, 452, 903 P.2d 1246, 1273 (1995) (remanding permit
application back to Hawaii County Planning Commission for
further proceedings consistent with the court ' s analysis) .
To reiterate, article XI, section 1 of the Hawaii
Constitution and the general laws that authorize the Planning
Commission to act on the Use Permit, the Class IV Zoning Permit,
and the Special Permit require the Planning Commission to
consider Kauai Springs ' use of water under the public trust
doctrine. The standards and criteria that apply are as follows:
the Planning Commission' s decision should be initially grounded
in the framework of the statutes and regulatory provisions that
authorize the Planning Commission to act in this instance; in
addition, the Planning Commission should make appropriate
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assessments and require reasonable measures to protect the water
resources at issue in this case; and, because Kauai Springs seeks
to use the water for economic gain, this case requires that the
Planning Commission give the permit application a higher level of
scrutiny and, although Kauai Springs ' use of the water is not
illegal or improper per se, Kauai Springs carries the burden to
justify the use of the water in light of the purposes protected
by the public trust .
IV. CONCLUSION
Based on the foregoing, we vacate the circuit court 's
Final Judgment entered on September 23 , 2008 and remand this case
to the Planning Commission for further proceedings consistent
with this opinion.
David J. Minkin
Dayna Kamimura-Ching
(Christopher D. Bayne with („,62-7u1.42-TioS
David J. Minkin on the briefs)
(McCorriston Miller Mukai and MacKinnon LLP)
(Alfred B. Castillo, Jr. ,
Office of the County Attorney with
David J. Minkin on the briefs)
for Appellee-Appellant acv.e.iliA,C7nywc)Robert H. Thomas
(Mark M. Murakami with him
on the briefs)
(Damon Key Leong Kupchak Hastert)
for Appellant-Appellee Vol
Isaac H. Moriwake v
(EarthJustice)
on the briefs for Amici Curiae
Malama Kaua`i and Hawaii ' s Thousand Friends
Jon M. Van Dyke
Ernest M. Kimoto
(Office of Hawaiian Affairs)
on the briefs for Amicus Curiae
Office of Hawaiian Affairs
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