Day v. Apoliona

FOR PUBLICATION

UNITED STATES COURT OF APPEALS

FOR THE NINTH CIRCUIT

VIRGIL E. DAY; MEL 

HOOMANAWANUI; JOSIAH L.

HOOHULI; PATRICK L.

KAHAWAIOLAA; SAMUEL L.

KEALOHA, JR.,

Plaintiffs-Appellants,

v.

HAUNANI APOLIONA, individually

and in her official capacity as

Chairperson and Trustee of the

Office of Hawaiian affairs;

ROWENA AKANA; DANTE No. 06-16625

CARPENTER; DONALD CATALUNA;

LINDA KEAWE’EHU DELA CRUZ;  D.C. No.

CV-05-00649-SOM

COLETTE Y. PI’IPI MACHADO; BOYD

P. MOSSMAN; OSWALD K. STENDER; OPINION

JOHN D. WAIHEE, IV, Trustees of

the Office of Hawaiian Affairs of

the State of Hawaii, sued in their

official capacities for declaratory

and prospective injunctive relief;

sued in individual capacities for

damages; CLAYTON HEE; CHARLES

OTA, Former Trustees of the

Office of Hawaiian Affairs of the

State of Hawaii, sued in their

individual capacities for damages,

Defendants-Appellees.



Appeal from the United States District Court

for the District of Hawaii

Susan Oki Mollway, District Judge, Presiding

9425

9426 DAY v. APOLIONA

Argued and Submitted

June 5, 2007—Honolulu, Hawaii

Filed August 7, 2007

Before: David R. Thompson, Marsha S. Berzon, and

Richard C. Tallman, Circuit Judges.

Opinion by Judge Berzon

9428 DAY v. APOLIONA

COUNSEL

Walter R. Schoettle, Honolulu, Hawaii, for the plaintiffs-

appellants.

Robert G. Klein, Honolulu, Hawaii, for defendants-appellees

Apoliona, et al.

Charleen M. Aina, Deputy Attorney General, Honolulu,

Hawaii, for defendants-appellees Hee and Ota.

William J. Wynhoff, Deputy Attorney General, Honolulu,

Hawaii, for amicus curiae, State of Hawaii.

OPINION

BERZON, Circuit Judge:

The Hawaii Admission Act, Pub. L. No. 86-3, 73 Stat. 4

(1959) (“Admission Act”) granted Hawaii title to most of the

federal government’s public land within the state, id. at

§ 5(b)-(e), 73 Stat. at 5-6, and required the state to hold that

land and profits from it in “public trust” for five purposes, id.

at § 5(f), 73 Stat. at 6. One such purpose is “for the betterment

of the conditions of Native Hawaiians.” Id. The other pur-

poses — for public schools, development of farm and home

ownership, public improvements, and the provision of land

for public use — are not limited to Native Hawaiians. Id.

The plaintiffs in this case, whom we call “Day” after the

first-named of them, are Native Hawaiians, defined under fed-

eral law as “descendant[s] of not less than one-half part of the

blood of the races inhabiting the Hawaiian Islands previous to

1778.” Hawaiian Homes Commission Act, Pub. L. No. 67-34,

42 Stat. 108 (1921) (“HHCA”); see generally Rice v. Caye-

tano, 528 U.S. 495, 507 (2000).1 Based on the Admission Act

1

Hawaii state law similarly defines the term “Native Hawaiians.”

Hawaii separately defines the term “Hawaiians” as any descendants —

DAY v. APOLIONA 9429

and state law, these Native Hawaiians contend that the defen-

dants, current and former trustees of the state’s Office of

Hawaiian Affairs (“OHA”), have not properly considered eth-

nic distinctions in spending the assets of the Admission Act

trust (“§ 5(f) trust”). To enforce their asserted right to ensure

that the § 5(f) trust funds are spent in accordance with the

Admission Act’s specifications, Day filed suit under 42

U.S.C. § 1983.

A considerable line of precedent in this circuit holds that

Native Hawaiians, as beneficiaries of the § 5(f) trust, have a

right under the Admission Act that is enforceable by § 1983.

The district court, however, held to the contrary, taking the

view that recent Supreme Court cases have so undermined our

prior case law that suits like this one may no longer be main-

tained. After a careful comparison of our prior cases with the

recent Supreme Court § 1983 cases on which the district court

relied, we cannot agree that there is a conflict sufficient to jus-

tify a district court or a three-judge panel of this court disre-

garding well-established precedent. We therefore reverse the

district court’s dismissal of the case and, without expressing

any opinion of the merits of Day’s allegations, remand for

further proceedings.2

regardless of exact ancestry or “blood” quantum — of certain aboriginal

peoples inhabiting the Hawaiian Islands in 1778. Haw. Rev. Stat. § 10-2.

We use the terms “Native Hawaiian” and “Hawaiian” as they are defined

in federal and state law, respectively.

2

No standing issue has been raised. We do, of course, have an obliga-

tion to consider Article III standing independently, as we lack jurisdiction

when there is no standing. See Bernhardt v. County of L.A., 279 F.3d 862,

868 (9th Cir. 2002). Day’s allegations, however, are analogous to those in

Price v. Hawaii, 764 F.2d 623 (9th Cir. 1985), in which we concluded that

Native Hawaiians alleging a breach of the § 5(f) trust for failure to spend

funds for the betterment of Native Hawaiians had standing to do so. Id. at

630; see also Price v. Akaka, 928 F.2d 824, 826-27 (9th Cir. 1991)

(“Akaka I”). We are bound by the two Price cases on the standing issue,

and so do not consider the matter further.

9430 DAY v. APOLIONA

I. PROCEDURAL HISTORY

State law assigns to the OHA the promotion of “[t]he bet-

terment of conditions of Native Hawaiians . . . [and] Hawai-

ians.” Haw. Rev. Stat. § 10-3. To effectuate this assignment,

OHA receives a portion of the § 5(f) trust monies, which it is

to devote “to the betterment of the conditions of Native

Hawaiians,” id. at § 10-3(1).3 The agency receives other funds

as well, which it uses to fund projects that do not meet the

§ 5(f) restrictions. See generally Rice, 528 U.S. at 508-09.

In this case, Day alleges that OHA misspent § 5(f) trust

funds in two ways: (1) by lobbying in favor of a federal bill

(the “Akaka Bill”) “that purports to create a Native Hawaiian

Governing Entity to be established by persons . . . without

regard to the blood quantum requirements set out under

HHCA,”4 and (2) by supporting three social service programs

whose “funds are not subject to the limitation that they may

3

The § 5 grant included approximately “200,000 acres [formerly] set

aside [as “Hawaiian homelands” to benefit Native Hawaiians] under the

Hawaiian Homes Commission Act and almost 1.2 million additional acres

of land.” Rice, 528 U.S. at 507. OHA receives twenty percent of the reve-

nue from the 1.2 million additional acres. Haw. Rev. Stat. § 10-13.5. A

different agency, the Department of Hawaiian Home Lands, administers

the 200,000 acres that were set aside by the HHCA. Haw. Rev. Stat. § 26-

17; see generally Rice, 528 U.S. at 509. We have not previously decided

whether the HHCA lands may be used for the purposes specified in § 5(f)

or only for the more restricted uses specified in the HHCA. See Admission

Act § 4, 73 Stat. at 5; Keaukaha-Panaewa Cmty. Ass’n v. Hawaiian

Homes Comm’n, 588 F.2d 1216, 1218-19 & n.2 (9th Cir. 1979)

(“Keaukaha I”); see also Akaka I, 928 F.2d at 826 n.1 (“A ‘compact’

between Hawaii and the United States strictly limits the manner in which

Hawaii may manage the homelands and the income they produce.”). We

do not decide that question today either, as Day challenges only the use

of funds managed by the OHA.

4

The complaint, first filed in 2005, refers to the Native Hawaiian Gov-

ernment Reorganization Act of 2005, S. 147, 109th Cong. (2005). In the

current Congress, a largely identical bill has been introduced as the Native

Hawaiian Government Reorganization Act of 2007, S. 310/H.R. 505,

110th Cong. (2007).

DAY v. APOLIONA 9431

be expended only for the betterment of the conditions of

‘native Hawaiians.’ ”5 Such expenditures, the amended com-

plaint alleges, are inconsistent with the purposes listed in

§ 5(f) and constitute a violation of (1) the Admissions Act and

the HHCA, enforceable by 42 U.S.C. § 1983; (2) the Equal

Protection Clause of the Fourteenth Amendment; and (3) a

state common law statutory duty of fidelity, see Haw. Rev.

Stat. § 10-16(c)). Day seeks an accounting; monetary, injunc-

tive, and declaratory relief; and attorneys’ fees.

The district court sua sponte dismissed the amended com-

plaint. Ruling on an argument raised not by the defendants but

by the state of Hawaii in an amicus curiae brief, the court held

that the complaint failed to allege any Admission Act viola-

tion enforceable under § 1983. The court additionally con-

cluded that the Equal Protection allegations failed to state a

claim and dismissed the state law claims as a matter of discre-

tion. See 28 U.S.C. § 1367(c)).

Day does not contest the dismissal of his Equal Protection

claims or the discretionary dismissal of the state claims. He

also does not contest the dismissal of all claims against the

two defendants, Clayton Hee and Charles Ota, who are former

rather than current trustees.6 We thus consider only whether

5

The three social service programs named in the complaint are the

Native Hawaiian Legal Corporation, the Na Pua No’eau Education Pro-

gram, and Alu Like, Inc. In their motions for summary judgment before

the district court, the parties submitted a substantial amount of information

about the activities of these programs and the grants they received from

OHA. As we do not rule on those motions, the additional facts — disputed

or not — are irrelevant to this appeal.

6

Before dismissing the amended complaint, the district court granted

summary judgment in favor of the former trustees on the basis of the

§ 1983 statute of limitations. The court allowed Day to amend the com-

plaint to address the issue, however, and defendants Hee and Ota were

again named in the amended complaint. As noted, the dismissal of the

claims against Hee and Ota is no longer contested. We affirm the dis-

missal of the complaint as to those defendants.

9432 DAY v. APOLIONA

Day’s Admission Act cause of action against the remaining

defendants, all current trustees, rests on a right enforceable

under § 1983.

Dismissal of a § 1983 claim for the lack of an enforceable

right amounts to dismissal for failure to state a claim, pursu-

ant to Federal Rule of Civil Procedure 12(b)(6). See Bollard

v. Cal. Province of the Soc’y of Jesus, 196 F.3d 940, 950-51

(9th Cir. 1999); United States v. Stanley, 483 U.S. 669, 691

n.7 (1987). We review such a dismissal de novo. Adams v.

Johnson, 355 F.3d 1179, 1183 (9th Cir. 2004).7

II. ANALYSIS

The question in this case, whether a violation of § 5(f) of

the Admission Act is enforceable via § 1983, is not new to

this court. Over the last two decades, we have established the

broad contours of Native Hawaiians’ right to sue for breach

of the state’s § 5(f) trust obligations and held that § 5(f) does

not create an implied private right of action for breach of the

§ 5(f) trust, see Keaukaha I, 588 F.2d 1216, but does create

a right enforceable via 42 U.S.C. § 1983, see Price v. Akaka,

3 F.3d 1220 (9th Cir. 1993) (“Akaka II”); Keaukaha-Panaewa

Cmty. Ass’n v. Hawaiian Homes Comm’n, 739 F.2d 1467 (9th

7

On appeal, as before the district court, the defendants take no position

with regard to the § 1983 right because, as their attorney explained at oral

argument, doing so could present the defendants, as trustees, with a con-

flict with the Native Hawaiians whose interests they have a fiduciary obli-

gation to forward. The state, as amicus, alone argues that the complaint

was properly dismissed. “Generally, we do not consider on appeal an issue

raised only by an amicus.” United States v. Gementera, 379 F.3d 596, 607

(9th Cir. 2004) (quoting Swan v. Peterson, 6 F.3d 1373, 1383 (9th Cir.

1993)). Here, however, the issue addressed by the state is at the heart of

the district court’s order. Day, therefore, advisedly, addressed the question

in his opening brief. Except where noted, the amicus brief does not go

beyond the scope of Day’s argument.

DAY v. APOLIONA 9433

Cir. 1984) (“Keaukaha II”). We have repeatedly applied this

latter holding.8

The district court concluded, however, that Akaka II’s hold-

ing is no longer good law because it has been effectively

overruled by Gonzaga University v. Doe, 536 U.S. 273

(2002). There are indeed circumstances in which a district

court or a three-judge panel of this court can disregard circuit

precedent because of intervening Supreme Court authority:

“[W]here intervening Supreme Court authority is clearly

irreconcilable with our prior circuit authority[,] . . . a three-

judge panel of this court and district courts should consider

themselves bound by the intervening higher authority and

reject the prior opinion of this court as having been effectively

overruled.” Miller v. Gammie, 335 F.3d 889, 900 (9th Cir.

2003) (en banc). But, this is simply not one of those instances.

Gonzaga and other recent Supreme Court cases concerning

§ 1983 rights have not so changed the law that it is now irrec-

oncilable with our prior cases. The Miller standard is thus not

met, and we (and the district court) are bound by our earlier

precedent. Therefore, the district court should not have dis-

missed the case for failure to allege a right enforceable under

§ 1983.

A. Breach of trust actions under the Admission Act

Before explaining our conclusion regarding the impact of

Gonzaga, we set the scene by describing our existing case law

regarding the enforcement of the § 5(f) trust by beneficiaries

in some detail.

Section 5(f) of the Admissions Act provides that the rele-

vant lands and income from them

8

See Hou Hawaiians v. Cayetano, 183 F.3d 945, 948 (9th Cir. 1999);

Price v. Hawaii, 939 F.2d 702, 706 (9th Cir. 1991); Price v. Hawaii, 921

F.2d 950, 954-56 (9th Cir. 1990); Price v. Akaka, 915 F.2d 469, 472 (9th

Cir. 1990); Ulaleo v. Paty, 902 F.2d 1395, 1397 (9th Cir. 1990); Price v.

Hawaii, 764 F.2d 623, 628 (9th Cir. 1985).

9434 DAY v. APOLIONA

shall be held by said State as a public trust for the

support of the public schools and other public educa-

tional institutions, for the betterment of the condi-

tions of Native Hawaiians, as defined in the

Hawaiian Homes Commission Act, 1920, as

amended, for the development of farm and home

ownership on as widespread a basis as possible for

the making of public improvements, and for the pro-

vision of lands for public use. Such lands, proceeds,

and income shall be managed and disposed of for

one or more of the foregoing purposes in such man-

ner as the constitution and laws of said State may

provide, and their use for any other object shall con-

stitute a breach of trust for which suit may be

brought by the United States.

73 Stat. at 6 (emphasis added).

[1] Prior to Gonzaga, we twice explicitly held that because

it creates a trust, § 5(f) also creates a right enforceable under

§ 1983 by the trust’s beneficiaries. In Keaukaha II, we

reached that conclusion by relying on “a presumption that a

federal statute creating enforceable rights may be enforced in

a section 1983 action.” 739 F.2d at 1470 (citing Pennhurst

State Sch. & Hosp. v. Halderman, 451 U.S. 1, 51 (1981)

(White, J. dissenting in part)). Our primary concern was

whether the § 1983 remedy was foreclosed by the statute’s

public remedy. Earlier, in Keaukaha I, 588 F.2d 1216, we had

concluded that the Admission Act did not create a implied pri-

vate cause of action in part because the Act allowed the

United States to sue for breach of trust. Id. at 1223-24. But in

Keaukaha II, we concluded that the public remedy did not

foreclose a § 1983 action because of the presumption in favor

of a § 1983 remedy where a statute creates enforceable rights.

739 F.2d at 1470.

Keaukaha II recognized that “[t]here remains a question . . .

whether the Admission Act created a federal ‘right’ enforce-

DAY v. APOLIONA 9435

able under section 1983.” Id. at 1471. While we observed that

“[t]he Admission Act clearly mandates establishment of a

trust for the betterment of native Hawaiians,” we did not dis-

cuss the question in any detail, because “[t]he defendants

[did] not seriously contend that plaintiffs have no enforceable

rights.” Id.

Our next substantive discussion of the issue was in Akaka

I, 928 F.2d at 826-27. Akaka I considered Native Hawaiians’

claim that OHA trustees violated § 5(f) by comingling § 5(f)

trust funds with other funds, and by not spending the trust

funds to benefit Native Hawaiians or to serve the other § 5(f)

purposes. Id. at 826. We did not directly address the question

of whether the statute created an enforceable right. But we

did discuss the plaintiffs’ rights, in explaining why they

had standing even though the trustees could legally spend

the § 5(f) funds for purposes other than to benefit Native

Hawaiians:

We recently considered this very question, and deter-

mined that allegations such as those Price has made

are sufficient to show an ‘injury in fact.’ See Price

[v. State of Hawaii, 764 F.2d 623, 630 (9th Cir.

1985) ]. In addition, allowing Price to enforce § 5(f)

is consistent with the common law of trusts, in which

one whose status as a beneficiary depends upon the

discretion of the trustee nevertheless may sue to

compel the trustee to abide by the terms of the trust.

Akaka I, 928 F.2d at 826-27.

Drawing directly on Akaka I, we explicitly returned in

Akaka II, 3 F.3d 1220, to the enforceable rights question iden-

tified in Keaukaha II. That case addressed an issue similar to

the one at bar: whether Keaukaha II had been effectively

overruled by the Supreme Court’s analysis of the “rights” ele-

ment of § 1983 in Suter v. Artist M., 503 U.S. 347 (1992),

which concluded that there was no enforceable right in the

9436 DAY v. APOLIONA

provisions of the Adoption Act of 1980 requiring states to

meet certain prerequisites before receiving federal reimburse-

ment for certain expenses related to adoption and foster care

services. See Akaka II, 3 F.3d at 1224-26.

Akaka II held that Keaukaha II had not been so overruled.

We explained why § 5(f) created an enforceable right by cit-

ing to Akaka I:

The instant case involves a public trust, and under

basic trust law principles, beneficiaries have the right

to “maintain a suit (a) to compel the trustee to per-

form his duties as trustee; (b) to enjoin the trustee

from committing a breach of trust; [and] (c) to com-

pel the trustee to redress a breach of trust.” Restate-

ment 2d of the Law of Trusts, § 199; see also id.

§ 200, comment a. We have accordingly held that

“allowing Price to enforce § 5(f) is consistent with

the common law of trusts, in which one whose status

as a beneficiary depends upon the discretion of the

trustee nevertheless may sue to compel the trustee to

abide by the terms of the trust.” Akaka I, 928 F.2d

at 826-27.

Our decisions in Keaukaha II, 739 F.2d at 1472,

and Akaka I, 928 F.2d at 828, holding that beneficia-

ries of the public trust created by Congress may

bring a § 1983 claim are consistent with the Supreme

Court’s decision in Suter. Congress enacted the

Admission Act, a federal public trust, which by its

nature creates a federally enforceable right for its

beneficiaries to maintain an action against the trustee

in breach of the trust. As a beneficiary, Price may

therefore bring a § 1983 action under the Hawaii

Admission Act against the trustees.

Id. at 1224-25 (internal parenthetical omitted).

DAY v. APOLIONA 9437

[2] Akaka II’s reliance on trust law was not unique. Unify-

ing most of our § 5(f) case law is the understanding that

because they are designated as a “public trust,” § 5(f) funds

are governed by a set of trust law principles that have proce-

dural as well as substantive implications. Akaka I’s discussion

of standing, quoted earlier, drew on the funds’ status as a trust.9

See Akaka I, 928 F.2d at 826-27. Furthermore, although we

have as yet said little on the merits of § 5(f) claims, we have

strongly suggested, if not explicitly held, that trust law princi-

9

In a concurring opinion in Rice v. Cayetano, Justice Breyer expressed

concern that the relationship between OHA and Native Hawaiians was not

analogous to a trust for an Indian tribe. See Rice, 528 U.S. at 524-257

(Breyer, J. concurring). Justice Breyer noted that, unlike a trust for an

Indian tribe, the lands ceded in the Admission Act are to benefit “all the

people of Hawaii,” not simply Native Hawaiians. Id. at 525. Furthermore,

unlike an Indian trust, OHA has “funding . . . from several different

sources” other than § 5(f) trust funds. Id.

Justice Breyer’s characterization of OHA is accurate. The differences he

describes between Indian trusts and the OHA, however, while perhaps rel-

evant to the question at issue in Rice — about election of OHA officials

— are not pertinent to this case or our prior applications of trust principles

to § 5(f) claims for two reasons. First, at issue in this case and our prior

related cases is only a portion of the OHA funds, those funds covered by

§ 5(f) and denominated by federal statute as held in “public trust.” At issue

in Rice, on the other hand, was the election of officials who managed all

of OHA’s assets, including funds that are not covered by § 5(f).

Second, in contrast with the Hawaiian governor’s apparent position in

Rice, this case is not based on any implicit assumption that Native

Hawaiians and Hawaiians are the only intended beneficiaries of the § 5(f)

trust. Our discussions of standing, rights of action, and the scope of the

§ 5(f) restrictions have arisen in cases brought by Native Hawaiian indi-

viduals and groups. But neither our prior case law nor our discussion

today suggests that as a matter of federal law § 5(f) funds must be used

for the benefit of Native Hawaiians or Hawaiians, at the expense of other

beneficiaries. For example, our holding in Akaka I that Native Hawaiians

have standing to sue to enforce the § 5(f) trust draws on the common law

regarding trusts that, like this one, have multiple potential beneficiaries or

are defined as “public.” See Akaka I, 928 F.2d at 827 (citing Restatement

2d of the Law of Trusts, § 214(1), comment a (regarding the rights of mul-

tiple beneficiaries), and § 391 (regarding which beneficiaries may sue to

enforce the terms of a public charitable trust)).

9438 DAY v. APOLIONA

ples guide the merits of any § 5(f) claims. If nothing else, the

words “public trust” in the Admission Act “betoken the

State’s duty to avoid deviating from section 5(f)’s purpose.”

Price v. Hawaii, 921 F.2d at 955-56. But see id. at 955 (con-

cluding that because the Hawaii Admission Act “confers a

broad authority upon the State,” it does not impose any duties

on the state regarding the management of the § 5(f) funds).

And we have implied that the “body of law [applicable] for

the purpose of enforcing” this duty likely draws on the com-

mon law of trusts. Id. (“There is no free floating federal com-

mon law of trusts, but we have no doubt that we would have

the power to formulate a body of law for the purpose of

enforcing the Act if that were appropriate under the circum-

stances. No doubt that would not present insuperable difficul-

ties, since the common law of trusts is well developed in this

country and speaks with a good deal of uniformity across the

length and breadth of the land.” (citations omitted)).10

10

Courts have frequently looked to the common law of trusts to guide

resolution of two sets of related claims: those concerning the federal gov-

ernment’s management of Indian assets for which the government has a

fiduciary duty, see United States v. Mitchell, 463 U.S. 206, 226 (1983),

and those related to states’ management of land granted to them in trust

by the United States, see Branson Sch. Dist. RE-82 v. Romer, 161 F.3d

619, 637 (10th Cir. 1998); United States v. 111.2 Acres of Land, 293 F.

Supp. 1042, 1049 (E.D. Wash. 1968), aff’d by, 435 F.2d 561 (9th Cir.

1970) (per curiam, adopting the district court opinion); Kadish v. Ariz.

State Land Dep’t, 747 P.2d 1183, 1186-87 (Ariz. 1987); County of Ska-

mania v. State, 685 P.2d 576, 579-80 (Wash. 1984) (en banc).

Although we do not address the merits of Day’s claims, we note for the

sake of example and clarity that the common law of trusts offers guidance

on two of the issues that Day’s claims present: (1) how a court should

determine whether activities funded by the trust funds are “for the better-

ment” of Native Hawaiians, and (2) whether trust funds can be spent in

a way that serves Native Hawaiians, but also, incidentally, benefits other

individuals. One treatise suggests:

To the extent to which the trustee has discretion, the court will

not control his exercise of it as long as he does not exceed the

limits of the discretion conferred upon him. . . . Even where the

trustee has discretion, however, the court will not permit him to

abuse the discretion. This ordinarily means that so long as he acts

DAY v. APOLIONA 9439

Thus, Akaka II constitutes an integral part of our § 5(f)

jurisprudence. A change in its holding would have substan-

tive, as well as procedural, impact.

With the context set, we turn to the sole issue in this case:

whether Akaka II remains the law of this circuit.

B. The effect of recent Supreme Court cases

After Akaka II was decided, two Supreme Court cases —

Blessing v. Freestone, 520 U.S. 329 (1997), and Gonzaga,

536 U.S. 273 — summarized, explained, and, on some points,

refined the law regarding when a statute creates a right

enforceable under § 1983. The two cases are now the natural

starting point for analysis of the issue. See generally Ball v.

Rodgers, No. 04-16963, ___ F.3d ___, 2007 WL 2034043, at

*6-7 (9th Cir. July 17, 2007). Nevertheless, neither “under-

cut[s] the theory or reasoning underlying [Akaka II ] in such

a way that the cases are clearly irreconcilable.”11 Miller, 335

not only in good faith and from proper motives, but also within

the bounds of a reasonable judgment, the court will not interfere;

but the court will interfere when he acts outside the bounds of a

reasonable judgment.

Austin W. Scott & William F. Fratcher, 3 The Law of Trusts § 187 (4th

Ed. 2001).

11

The state of Hawaii, as amicus, also suggests that we should recon-

sider Akaka II in light of City of Rancho Palos Verdes v. Abrams, 544 U.S.

113 (2005). But, Abrams does not address whether a statute creates an

enforceable right, as the defendants did not dispute that point. Id. at 120-

21. Instead, Abrams concerned whether a § 1983 remedy for an acknowl-

edged enforceable right was foreclosed by the availability of other reme-

dies. Id. Hawaii suggests that Abrams requires a change in Keaukaha II’s

related conclusion: that the public remedy in § 5(f) does not foreclose pri-

vate enforcement. But that question is beyond the scope of this appeal. It

is raised only in the amicus brief and was not addressed by the district

court. See United States v. Gementera, 379 F.3d 596, 607-08 (9th Cir.

2004). We further note that with regard to alternative remedies, Abrams

simply applies two Supreme Court cases, Middlesex County Sewerage

Authority v. National Sea Clammers Association, 453 U.S. 1 (1981) and

Smith v. Robinson, 468 U.S. 992 (1984), both of which pre-dated Akaka

II and Keaukaha II. See Abrams, 544 U.S. at 121.

9440 DAY v. APOLIONA

F.3d at 900. Whether or not we would reach the same result

as the Akaka II panel today, neither Blessing nor Gonzaga so

affected the reasoning of Akaka II that the case has lost its

binding force.

Blessing, for one, did not change the law relevant to Akaka

II’s analysis. The Court in Blessing listed three factors to use

in identifying which statutes create rights enforceable under

§ 1983:

First, Congress must have intended that the provision

in question benefit the plaintiff. Second, the plaintiff

must demonstrate that the right assertedly protected

by the statute is not so vague and amorphous that its

enforcement would strain judicial competence.

Third, the statute must unambiguously impose a

binding obligation on the States.

520 U.S. at 340-41(citations and quotation marks omitted).

But while this “test” has since evolved into an analytical

touchstone, see, e.g., Sanchez v. Johnson, 416 F.3d 1051,

1056-57 (9th Cir. 2005), Blessing did not create these factors

from scratch. Rather, Blessing succinctly summarized three

factors that the court had “traditionally looked at . . . when

determining whether a particular statutory provision gives rise

to a federal right.” 520 U.S. at 340. And, Blessing drew those

factors from two cases decided prior to Akaka II: Wright v.

Roanoke Redevelopment and Housing Authority, 479 U.S.

418, 430-32 (1987) and Wilder v. Virginia Hospital Ass’n.,

496 U.S. 498, 509-12 (1990), the latter of which discussed all

three factors later summarized by Blessing.

Not surprisingly, then, Akaka II’s reasoning is consistent

with the three factors summarized in Blessing. By discussing

the beneficiaries’ rights and the corollary duties of trustees

implied by the word “trust,” the opinion addresses implicitly

— and reasonably — the first and third factors in Blessing:

that “Congress . . . intended that the provision in question

DAY v. APOLIONA 9441

benefit the plaintiff,” and that “the statute . . . unambiguously

impose a binding obligation on the States.” Blessing, 520 U.S.

at 340-41; Akaka II, 3 F.3d at 1224-25. Because it is based on

routinely enforced principles of trust law, Akaka II’s holding

is also not “clearly irreconcilable” with the second Blessing

requirement that a right be concrete enough to enforce.

[3] For similar reasons, we conclude that Akaka II is also

not clearly irreconcilable with Gonzaga, 536 U.S. 273.

Although Gonzaga arguably shifted the focus of § 1983 anal-

ysis more than Blessing, it did not so change § 1983 law as

to create an irreconcilable conflict with Akaka II.

Clarifying a source of potential tension in earlier cases,

Gonzaga enunciated three holdings concerning identification

of § 1983 rights. First, the Supreme Court made clear that

nothing “less than an unambiguously conferred right is

enforceable by § 1983.” 536 U.S. at 282. In other words,

“broader or vaguer ‘benefits’ or ‘interests’ ” are not enforce-

able under §1983. Id. at 283. Second, Gonzaga mandated that

“implied right of action cases should guide the determination

of whether a statute confers rights enforceable under § 1983,”

because the two inquiries “overlap in one meaningful respect

— in either case we must first determine whether Congress

intended to create a federal right.” Id. Third, Gonzaga offered

guidance for discerning the relevant congressional intent,

emphasizing that “[f]or a statute to create such private rights,

its text must be ‘phrased in terms of the persons benefited.’ ”

Id. at 284 (quoting Cannon v. Univ. of Chicago, 441 U.S. 677,

692 n.13 (1979)). In other words, “ ‘rights-creating’ language

[is] critical to showing the requisite congressional intent to

create new rights.” Id. at 287 (citing Alexander v. Sandoval,

532 U.S. 275, 288-89 (2001)).

As applied to the Admission Act, these three holdings nei-

ther dramatically change the law on which Akaka II relied nor

create an irreconcilable conflict with the Akaka II reasoning.

9442 DAY v. APOLIONA

Like Blessing, Gonzaga largely repeats rather than undercuts

the law upon which Akaka II rested.

Suter, for example, stated that the key inquiry in § 1983

cases is “whether the [statutory] language in question created

‘enforceable rights, privileges, or immunities within the

meaning of § 1983. . . . Section 1983 speaks in terms of

‘rights, privileges, or immunities,’ not violations of federal

law.” 503 U.S. at 357 (alterations and quotation marks omit-

ted) (emphasis in original). Akaka II quoted this holding, and

applied it by recognizing the right of beneficiaries to enforce

trust obligations. 3 F.3d at 1224-25. Rather than suggesting an

alternative form of analysis, Gonzaga repeated Suter’s obser-

vation as its first holding, stating that because “Section 1983

provides a remedy only for the deprivation of ‘rights, privi-

leges, or immunities secured by the Constitution and laws’ of

the United States. . . . it is rights, not the broader or vaguer

‘benefits’ or ‘interests,’ that may be enforced under the

authority of that section.” 536 U.S. at 283.

For similar reasons, Gonzaga’s second holding, recogniz-

ing the overlap between implied right of action cases and

§ 1983 cases, also did not undercut Akaka II. At issue in Gon-

zaga was an apparent conflict between Wilder, a case which

suggested that “implied private right of action cases have no

bearing on the standards for discerning whether a statute

creates rights enforceable by § 1983,” Gonzaga, 536 U.S. at

283 (citing Wilder, 496 U.S. at 508-09 & n.4), and Suter,

which “appear[ed] to disavow” that notion, id. (citing Suter,

503 U.S. at 363-64). Gonzaga explicitly adopted the approach

of Suter, the case with which Akaka II was primarily con-

cerned.

Suter also previewed Gonzaga’s third holding with regard

to clear statutory language.12 Prior to Gonzaga, Suter held that

12

We note that it is not self-evident that Gonzaga’s third holding,

regarding statutory language, applies to § 5(f) of the Admission Act. Gon-

DAY v. APOLIONA 9443

rights must be conferred “unambiguously” by statutory lan-

guage. See Suter, 503 U.S. at 358, 363. Specifically, Suter

held that the statute at issue, the Adoption Act, did not create

enforceable rights because, “[c]areful examination of the lan-

guage . . . does not unambiguously confer an enforceable right

upon the Act’s beneficiaries.” Id. at 363. Gonzaga quoted this

holding with approval, summarizing it as a recognition that

“[s]ince the [Adoption] Act conferred no specific, individu-

ally enforceable rights, there was no basis for private enforce-

ment, even by a class of the statute’s principal beneficiaries.”

536 U.S. at 281; see also id. 283 (approving Suter’s reason-

ing); id. at 287 (emphasizing the need for statutory language

that confers individual entitlements).13

zaga’s primary concern was the creation of enforceable rights by statutes

enacted under the Spending Clause of the Constitution, art. 1, § 8, cl. 1.

Although much of Gonzaga’s discussion is in general terms, the Court

introduced its analysis with the observations that “[w]e made clear [in

Pennhurst State School and Hospital v. Halderman, 451 U.S. 1 (1981)),]

that unless Congress speaks with a clear voice, and manifests an unambig-

uous intent to confer individual rights, federal funding provisions provide

no basis for private enforcement. . . . Since Pennhurst, only twice have we

found spending legislation to give rise to enforceable rights.” 536 U.S. at

280 (citations and alterations omitted; emphasis added). Furthermore,

Gonzaga cited with approval Golden State Transit Corp. v. City of Los

Angeles, 493 U.S. 103 (1989), which held — in contrast with Gonzaga’s

focus on statutory language — that a non-Spending Clause statute could

create rights by structural implication. See Gonzaga, 536 U.S. at 285; Gol-

den State, 493 U.S. at 111-12.

We do not pursue this possible distinction further, however. Doing so

would entail a determination of the constitutional basis for the enactment

of § 5(f) and a comparison of that basis with the Spending Clause jurispru-

dence, issues that have not been briefed. Instead, we assume that the third

prong of Gonzaga is fully applicable to § 5(f).

13

“In response to the Court’s reasoning in Suter, Congress enacted 42

U.S.C. § 1320a-2, sometimes called the “Suter fix”. See Watson v. Weeks,

436 F.3d 1152, 1158 (9th Cir. 2006); ASW v. Oregon, 424 F.3d 970, 977

n.11 (9th Cir. 2005). Section 1320a-2 did not change the analysis in Suter

applicable here and thus has no pertinence to the issues in this case.

9444 DAY v. APOLIONA

As Suter was decided before and discussed in Akaka II, and

Gonzaga on this point simply reaffirms Suter, we are not at

liberty to disagree with Akaka II’s holding that the Admission

Act’s language clearly creates an individual right. The state

nevertheless argues that Akaka II’s reasoning is irreconcilable

with Gonzaga’s command to identify unambiguous statutory

language. Even if we had authority to consider that question,

we would see no such resounding conflict.

[4] In accordance with Gonzaga’s emphasis on statutory

language, Akaka II’s analysis is based on the Admission Act’s

explicit use of the term “trust.” The opinion’s conclusion that

the word “trust” refers unambiguously to a body of law

describing the rights of individual beneficiaries to enforce the

§ 5(f) terms with regard to any particular expenditure of the

§ 5(f) funds may not be the only reasonable conclusion, but

it is certainly colorable, and thus, reconcilable with Gonzaga.

Gonzaga’s emphasis on an unambiguous conferral of rights

is essentially a clear statement rule that, like such rules in

other contexts, reflects the principle that, “[i]n traditionally

sensitive areas, such as legislation affecting the federal bal-

ance, the requirement of clear statement assures that the legis-

lature has in fact faced, and intended to bring into issue, the

critical matters involved in the judicial decision.” Will v.

Michigan Dep’t of State Police, 491 U.S. 58, 65 (1989) (quot-

ing United States v. Bass, 404 U.S. 336, 349 (1971)); see, e.g.,

Gregory v. Ashcroft, 501 U.S. 452, 460 (1991) (regarding fed-

eral preemption of states’ authority to choose their own offi-

cers); Atascadero State Hosp. v. Scanlon, 473 U.S. 234, 242

(1985) (regarding abrogation of states’ sovereign immunity);

Pennhurst State School and Hospital v. Halderman, 465 U.S.

89, 99 (1984) (same); South Dakota v. Dole, 483 U.S. 203,

207 (1987) (regarding imposition of conditions on states

under Spending Clause statutes). But Gonzaga does not signal

that comprehensive statutory enunciation of a right and of its

beneficiaries is always essential. Instead, Supreme Court pre-

cedent shows that statutory cross-references, references to

DAY v. APOLIONA 9445

established legal principles, and other devices that, when fol-

lowed to their sources, supply a clear message, can suffice to

create a right.

As discussed above, supra note 12, Gonzaga cites with

approval Golden State Transit Corp., 493 U.S. 103 (1989), a

case in which the Supreme Court concluded that a statute cre-

ated rights by structural implication. See Gonzaga, 536 U.S.

at 285. Gonzaga makes no mention of Livadas v. Bradshaw,

512 U.S. 107, 133-34 (1994), but that case reaches a conclu-

sion similar to that of Golden State. Both Golden State and

Lividas recognized a principle that could conflict with some

readings of Gonzaga: “A rule of law [regarding the rights

imposed by a statute] that is the product of judicial interpreta-

tion of a vague, ambiguous, or incomplete statutory provision

is no less binding than a rule that is based on the plain mean-

ing of a statute.” Golden State, 493 U.S. at 112 (quoted in

Lividas, 512 U.S. at 134 ). But unless and until the Supreme

Court says otherwise, we must assume that this principle from

Golden State is consistent with Gonzaga and remains good

law.

Once Gonzaga is understood in light of the Golden State

line of cases, it becomes clear that Akaka II’s analysis is rec-

oncilable with Gonzaga’s clear statement rule. Under the

Golden State principle, Akaka II’s analysis — based on judi-

cial interpretation of the term “trust” — is undoubtedly sound.

Akaka II relies on a much more straightforward, language-

based statutory analysis than did Golden State.

Furthermore, the term “trust,” when paired with the statu-

tory reference to “breach of trust” actions and in light of the

common law consequences that attached to the use of the

term, is reasonably read to indicate plainly that the trustees

have a duty not to breach the trust and that the trust’s benefi-

ciaries have corresponding rights to enforce it with regard to

each expenditure of § 5(f) funds. Indeed, Akaka II is nothing

more than a straightforward application of a statutory inter-

9446 DAY v. APOLIONA

pretation rule that the Supreme Court discussed in the context

of another clear statement analysis:

Where [a legislature] borrows terms of art in which

are accumulated the legal tradition and meaning of

centuries of practice, it presumably knows and

adopts the cluster of ideas that were attached to each

borrowed word in the body of learning from which

it was taken and the meaning its use will convey to

the judicial mind unless otherwise instructed.

INS v. St. Cyr, 533 U.S. 289, 312 n.35 (2001) (quoting Moris-

sette v. United States, 342 U.S. 246, 263 (1952) and applying

the rule to confirm that a statutory limitation on “judicial

review” is not a “clear” limitation on courts’ authority to issue

writs of habeas corpus); see also id. at 311-12 (analyzing the

history and context of the term “judicial review” before reach-

ing a conclusion about its meaning).

C. The district court’s analysis

Our analysis of this issue differs not only in result but also

in approach from that of the district court. The district court

held that after Gonzaga, Akaka II’s reaffirmance that § 5(f)

established a right enforceable under § 1983 was no longer

good law, because that conclusion is irreconcilable with the

Ninth Circuit’s earlier holding in Keaukaha I that there was

no implied private right of action under the Admission Act.

This conclusion was based on a misunderstanding of Gon-

zaga.

The court read Gonzaga to equate the availability of an

implied private right of action with the availability of a right

enforceable under § 1983. But Gonzaga endorsed no such

equation. To the contrary, Gonzaga stressed that “whether a

statutory violation may be enforced through § 1983 is a differ-

ent inquiry than that involved in determining whether a pri-

vate right of action can be implied from a particular statute.

DAY v. APOLIONA 9447

But the inquiries overlap in one meaningful respect — in

either case we must first determine whether Congress

intended to create a federal right.” Gonzaga, 536 U.S. at 283

(quotation marks and citation omitted). In other words, under

Gonzaga, the inquiry into whether there is a federal right is

the same in the context of private rights of action and § 1983

rights. Id. The inquiry into whether there is a private right of

action is different, however, from the inquiry of whether there

is a private right enforceable through § 1983 because an

implied private right of action requires “not just a private right

but also a private remedy.” Alexander v. Sandoval, 532 U.S.

275, 286 (2001); see generally Price v. City of Stockton, 390

F.3d 1105, 1109 n.3 (9th Cir. 2004).

Keaukaha I’s holding that the Admission Act created no

implied private right of action is thus fully consistent with

Akaka II, after Gonzaga as before. The former did not dis-

avow the existence of a private right; to the contrary,

Keaukaha I suggested there was such a right, but held that

there was no private right of action because the statute created

no remedy for the right. 588 F.2d at 1223-24 (concluding that

the plaintiffs were part of the class for whose benefit the

Admission Act was enacted, but finding no congressional

intent to create a remedy for violations of the act).

[5] Because it is based on a misreading of Gonzaga, the

district court’s conclusion that Gonzaga so conflicts with this

court’s precedents as to require deviation from those prece-

dents cannot stand.

CONCLUSION

[6] We thus reaffirm what we have already held and reaf-

firmed: that each Native Hawaiian plaintiff, as a beneficiary

of the trust created by § 5(f), has an individual right to have

the trust terms complied with, and therefore can sue under

§ 1983 for violation of that right. Violations of this right may

include, at minimum, wrongs of the type of which Day com-

9448 DAY v. APOLIONA

plains: expenditure of funds for purposes not enumerated

under § 5(f). We leave to the district court to interpret those

§ 5(f) purposes to determine in the first instance not only

whether Day’s allegations are true, but also whether the

described expenditures in fact violate § 5(f). In doing so, we

recognize the sore lack of judicial guidance on this point and

the uncertainty that lack of guidance has injected into the poli-

cymaking environment. Cases related to the OHA’s expendi-

ture of funds for Native Hawaiians have reached our court on

numerous prior occasions, but we and the district court have

shed little light on the merits of § 5(f) claims. See generally

Arakaki v. Lingle, 477 F.3d 1048, 1052-53 (9th Cir. 2007)

(citing cases). Absent further foundational issues with Day’s

claim, today’s affirmance of our existing precedent should

permit much-needed elucidation of the substance of § 5(f).14

AFFIRMED in part, REVERSED in part, and

REMANDED.

14

We emphasize once more that we are expressing no view concerning

the merits of the expenditure challenges.