Petition — Keaukaha-Panaewa Community Ass'n v. Hawaiian Homes Commission
Supreme Court brief1979
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Supreme Court, U. &
FILED
queen
|
yr APR 9 1979 |
IN THE |
SUPREME COURT OF THE UNITED ST ABBE. gooiy, 1p. chek
OCTOBER TERM, 1978
KEAUKAHA-PANAEWA COMMUNITY ASSOCIATION,
KEAUKAHA-PANAEWA FARMERS ASSOCIATION, ISABEL
LEINANI KNUTSON, ERMA KALANUI and
APRIL KAMAKAOKALANIMALUNAO’E KALANUI, by her
guardian ad litem, ERMA KALANUI, individually and on
behalf of all persons similarly situated,
Plaintiffs-Appellees,
Us.
HAWAIIAN HOMES COMMISSION, BILLIE BEAMER, in her
capacity as Chairman of the Hawaiian Homes Commission,
THE DEPARTMENT OF HAWAIIAN HOME LANDS,
De fendants-Appellants,
and
COUNTY OF HAWAII, EDWARD HARADA, in his capacity
as Chief Engineer, County of Hawaii,
Defendants,
and
JAMES W. GLOVER, LTD., A Hawaii Corporation,
Defendant.
PETITION FOR A WRIT OF CERTIORARI
TO THE UNITED STATES COURT OF APPEALS
FOR THE NINTH CIRCUIT
RONALD A. ALBU
Max W. J. GRAHAM, JR.
LEGAL AID SOCIETY OF HAWAII
1164 Bishop Street, Suite 1100
Honolulu, Hawai 96813
BEN HARRY GADDIS
LEGAL AID SOCIETY OF HAWAII
305 Wailuku Drive
Hilo, Hawaii 96720 |
Washington, D.C. + THIEL PRESS + (202) 638-4521
aa / 4
‘ : _
(t)
TABLE OF CONTENTS
Page
I Or re Oe a a ae l
Bo ee ea ee 2
QUESTIORNS PRESENTED 2. ccc ccc ccc cs nee 2
STATUTORY PROVISIONS INVOLVED ............. x
gE I 3
REASONS FOR ALLOWANCE OF THE WRIT
I. This Action Involves Important Questions
Of Federal Law Which Should Be Decided
EE EE Se ee 7
Il. The Court Of Appeals Has Decided Federal
Questions In Ways Conflicting With Deci-
ee I Rs a iG Abs oc ce ee soe 12
CONCLUSION ........ ON re 18
APPENDIX A— Denial of Motions to Dismiss by
ES a eee la
APPENDIX B-— Findings of Fact, Declarations
and Conclusions of Law, and Order by U.S.
Se SS ere eee 5a
APPENDIX C—Amicus Curiae Brief of the
United States in the Ninth Circuit Court
i EE oe 16a
APPENDIX D—Opinion Denying Rehearing and
Rehearing En Banc by Ninth Circuit Court
EEN SS 24a
APPENDIX E—Hawaiian Homes Commission
Act, Hawaii Admission Act, and 28
TE GR EL ae 48a
APPENDIX F — Kila v. Hawaiian Homes Commis-
sion, Civ. No. 74-12 (9/17/74, D.C. Haw.) ........ 58a
(it)
TABLE OF AUTHORITIES
Page
Cases:
Agua Caliente Bank of Mission Indians v. County
of Riverside, 442 F.2d 1184 (9th Cir. 1971),
eS ye re 6
Aki v. Beamer, Civ. No. 76-0144 (2/28/78 D.C.
Saar ese cr ae ice ely pil ae Bho AM Ae a We 7
Alaska Pacific Fisheries v. United States, 248 U.S.
SRA Sa RI ag EP ee te A PaO ce a 17
Antoine v. Washington, 420 U.S. 194 (1975)... ......... 17
Brecner a, Wethery, FO U.S. GET ANGIE ches ke be ee aes 17
Bryen v. Itasca County, 426 U.S. 373 (1976). ........... 17
Capitan Grande Band of Mission Indians v. Helix
Irrigation District, 514 F.2d 465 (9th Cir.
1975), cert. denied, 423 U.S. 874 (1975) ....... 6, 13, 14
Cherokee Nation v. Georgia, 30 U.S. (5 Pet.) 1
GR ER Sea ME ae a ee ee a 17
CRoate v. Trapp, 224 U.S. G65 (1912) . 0... cece eee ses 17
Cave BAe; Gee ee CUED Sick k ob sawawa une tec 17
Gully v. First National Bank, 299 U.S. 109
SRN Oia hak ea 6 hk abled a's a6 ee ore aa 6, 8, 10
Kila v. Hawatian Homes Commission, Civ. No.
a oa 8 Re ee ee ee 3
Kimball v. Callahan, 493 F.2d 564 (9th Cir. 1974),
cert. dented, 419 U.S. 10190(1974) .. 2... ccc ccc eee 17
McClanahan v. Arizona Tax Commission, 411 U.S.
gc BPR ME SEP ARE NY OPA tr ar eae ae 17
Menominee Tribe v. United States, 391 U.S. 404
SRE onary has 5 es ae areca ® 6.4 00 Mocs bia 17
Moe v. Confederated Salish and Kootenai Tribes
of the Flathead Reservation, 425 U.S. 463
CRU oe Ais Lil Ss Raa Wah eee Oe 8 0 0 ha we a 12, 13, 14
(iii)
Cases, continued:
Page
National Railroad Passenger Corp. v. National Asso-
ciation of Railroad Passengers, 414 U.S. 453
oh ee errr ee ee Te ee ee ae ee eo 15
Northern Cheyenne Tribe v. Hollowbreast, 425
Th; SO CRU OD. oc acalek: 6 owe DAR Oh eo we NES wen 17
Oneida Indian Nation v. County of Oneida, 414
Ta, Gee CUO T OD 2's hes aah babe We 6 a0 ee 10, 11, 13
Pence v. Kleppe, 529 F.2d 135 (9th Cir. 1976) .......... 10
Poafpy bitty v. Skelly Oil Co., 390 U.S. 365
SUG) 4. b's ced ew OMe es oe Oe ee aes 6, 12, 13, 14
Santa Rosa Band of Indians v. Kings County, 532
F.2d 655 (9th Cir. 1975), cert. denied, 429 U.S.
Lo otk 2) ar eee eee Ser ne sear rer ee ar 16
Seminole Nation v. United States, 316 U.S. 286
PE eR ec bas We REET CODNE OAK Olas wee eed 17
Squire v. Capoeman, 351 U.S. 1 (1956) ....... 222 ee eee 17
United States v. Kagama, 118 U.S. 375 (1886)........... 17
United States v. The Native Village of Unalakleet,
422 F.2d 1265 (Ct. Chalins 2OGF) ose eee hive cee 10
Worcester v. Georgia, 31 U.S. 519 (1832) ...........06. 16
Statutes:
The Hawaiian Homes Commission Act, 1920,
§ 202, 204, 205, 206, 207, Act of July 9,
RR A ene ee eee passim
The Hawaii Admission Act §§ 4, 5, An Act To
Provide For The Admission Of The State Of
Hawaii Into The Union, Act Of March 18,
SOE ey es Bi, DOO CO Si ceca aah teaeaws passim
ETE Fe 1 ee, ene Ane, Siva elena raeML aN Eon Ae
SON ee Ue a gare. ew Wi, Aer passim
(iv)
Other References: Page
Annual Report of the Department of Hawaiian
Home Lands (Record on Appeal 322-327,
Exhibit DD to Affidavit of Beamer, pp.
55-56 8
IN THE
SUPREME COURT OF THE UNITED STATES
OCTOBER TERM, 1978
No.
KEAUKAHA-PANAEWA COMMUNITY ASSOCIATION,
KEAUKAHA-PANAEWA FARMERS ASSOCIATION, ISABEL
LEINANI KNUTSON, ERMA KALANUI and
APRIL KAMAKAOKALANIMALUNAO’E KALANUI, by her
guardian ad litem, ERMA KALANUI, individually and on
behalf of all persons similarly situated,
Plaintif{s-Appellees,
US.
HAWAIIAN HOMES COMMISSION, BILLIE BEAMER, in her
capacity as Chairman of the Hawaiian Homes Commission,
THE DEPARTMENT OF HAWAIIAN HOME LANDS,
De fendants-Appellants,
and
COUNTY OF HAWAII, EDWARD HARADA, in his capacity
as Chief Engineer, County of Hawaii,
Defendants,
and
JAMES W. GLOVER, LTD., A Hawaii Corporation,
Defendant.
PETITION FOR A WRIT OF CERTIORARI
TO THE UNITED STATES COURT OF APPEALS
FOR THE NINTH CIRCUIT
OPINIONS BELOW
The district court issued a written Denial of Motions
to Dismiss (Appendix A) and Findings of Fact, Declara-
tions and Conclusions of Law, and Order (Appendix B)
l
2
which are not reported. The court of appeals, after obtain-
ing the opinion of the United States as amicus curiae
(Appendix C), issued an opinion which, as amended on
denial of rehearing and rehearing en banc, (Appendix D)
is reported at 588 F. 2d 1216.
JURISDICTION
The judgement of the court of appeals was entered on
September 18, 1978. A timely petition for rehearing and
rehearing en bance was denied on January 9, 1979. The
jurisdiction of this Court is invoked under 28 U.S.C.
§ 1254(1).
QUESTION PRESENTED
Do Native Hawaiian beneficiaries of the Hawaiian
Homes Commission Act, adopted by Congress for their
especial benefit, have the right to obtain judicial review in
federal court of violations of the Act and breaches of
trust provisions imposed on the Hawaiian Homes program
by Congress in the Hawaii Admission Act.
CONSTITUTIONAL AND STATUTORY PROVISIONS
INVOLVED
The following constitutional and statutory provisions
are set out in Appendix E:
1. The Hawaiian Homes Commission Act, 1920,
§ 202, 204, 205, 206, 207, Act of July 9, 1921, C. 42,
42 Stat. 108.
2. The Hawaii Admission Act §§ 4, 5, An'Act to Pro-
vide for the Admission of the State of Hawaii into the
Union, Act of March 18, 1959, Pub. L. 86-3, 73 Stat. 4.
3. 28 U.S.C. § 133).
3
_ STATEMENT OF THE CASE
Native Hawaiian beneficiaries of the Hawaiian Homes
Commission Act of 1920! brought this class action to
prevent the unlawful use of their trust lands by non-bene-
ficiaries of the HHCA. The Native Hawaiians sought de-
claratory and injunctive relief to prevent violations of the
express provisions of the HHCA and to remedy breaches
of the trust provisions imposed by Congress upon the
Hawaiian Homes program in Sections 4 and 5 of the
Hawaii Admission Act.?
The Defendant moved to dismiss on jurisdictional
grounds and the district court denied the motions. The
district court held that Native Hawaiians had properly in-
voked jurisdiction under 28 U.S.C. § 1331 over viola-
tions of the HHCA, which it found to be a federal law,
and over breaches of the trust provisions of Section 5(f)
of the Admission Act, also a federal law. The district
court relied in part upon an earlier federal district court
opinion by Judge Martin Pence in Kila v. Hawauan Homes
Commission, Civ. No. 74-12 (9/17/74, D.C. Haw.)
(Appendix F) which also concluded that allegations of
violations of the HHCA raise substantial federal questions.
Subsequently, the district court granted the Native
Hawaiians’ Motion for Partial Summary Judgment, find-
ing that the Defendants had allowed more than 25 acres
of prime agricultural Hawaiian home lands to be unlaw-
fully used for a county flood control project to the
detriment of Native Hawaiian beneficiaries.? The district
Tact of July 9, 1921, C. 42, 42 Stat. 108, hereafter
“HHCA.”
2 An Act to Provide For the Admission of the State of Hawaii
into the Union, Act of March 18, 1959, Pub. L. 86-3, 73 Stat. 4,
hereafter “‘Admission Act.”
3The district court's findings are set out in Appendix B
herein.
4
court also found that a portion of the lands involved were
intended to be exchanged for state lands of equal value to
accommodate the flood control project, but that no act-
ual exchange had been agreed upon; the requisite approvals
for land exchanges, including the approval of the United
States Secretary of the Interior, had never been sought or
obtained for the exchange of this prime agricultural land,
in violation of § 204(4) of the HHCA, ‘The district court
further found that because of repeated failures to comply
with land exchange requirements, the Hawaiian Homes
Commission was allowing more than 1,700 acres of
Hawaiian home lands to be used by non-beneficiaries
under an intention to exchange lands, but that no ex.-
changes had ever been approved since at least 1972, no
state lands had ever been received in exchange by the
Hawaiian Homes Commission for these 1,700 acres of
trust land, and no compensation had been obtained for
their use. The district court further found a violation of
§ 207 (c)(1) of the HHCA because the Hawaiian Homes
Commission issued a license to the defendant county for
the flood control project in the midst of the litigation
(back dated to January 1, 1976) for an unauthorized pur-
pose and for only the nominal consideration of $1 per
year,
Finally, the district court held that the defendants had
breached their trust duties under the Admission Act by
(1) failing to exercise the care and skill required of a
trustee in the management of trust property, (2) by fail-
ing to adhere to the terms of the trust embodied in the
HHCA, (3) by failing to act exclusively in the interest of
the Native Hawaiian beneficiaries, and (4) by failing to
hold and protect the trust property for the beneficiaries.
The Hawaiian Homes Commission, the Department of
Hawaiian Home Lands, and the Chairman appealed the
district court decision to the Ninth Cireuit challenging the
decision on the merits and also challenging the district
court's jurisdiction, After hearing oral argument, the cir-
cuit’ court requested an amicus curiae brief from the
United States regarding the jurisdictional aspects of the
appeal. The United States submitted an amicus curiac
brief (Appendix C) supporting jurisdiction over the
Native Hawaiians’ Admission Act claims of breaches of
trust, but arguing that the HHCA was no longer federal
law.
The court of appeals reversed the district court on jur-
isdictional grounds, holding that Native Hawaiian benefi-
ciaries of the HHCA have no right of action to challenge
breaches of trust under § 5(f) of the Admission Act.
Section 5(f) provides in pertinent part as follows:
The lands granted to the State of Hawaii by sub-
section (b) of this section [including Hawatian home
lands] together with the proceeds from the sale or
other disposition of any such lands and the income
therefrom, shall be held by said State as a public
trust... for the betterment of the conditions of
Native Hawaiians, as defined in the Hawatian Homes
Commission Act, 1920, as amended, .. .[T] heir use
for any other object shall constitute a breach of trust
for which suit may be brought by the United
States...
The court of appeals held that the right to bring suit
for such breaches of trust is reserved exclusively to the
United States. The circuit court also suggested that Native
Hawaiians do not have a right of action to enforce the
terms of the HHCA even in state court, but left that ques-
tion for possible presentation to the state courts.
is)
The circuit court: further held that, while the HHGA
may technically remain a federal law, the Hawatian Homes
program has become “for all practical purposes” a matter
of state concern, Therefore, the court of appeals con-
cluded that a claim arising under the HIHICA does not raise
a federal question, applying the rule of Gully ov, First
National Bank, 299 US. 109 (1956),
Native Hlawanans petitioned for rehearing and rehearing
en bane, urging that Native Americans have the right to
bring suit to protect their trust property under this Court's
ruling in Poafpybitty v. Skelly Oil Co., 390 U.S. 365
(1968) and under the Ninth Circuit's own “co plaintiff
rule’ developed in) Capitan Grande Band of Mission
Indians v. Helix Irrigation District, 514 F.2d 465 (9th
Cir. 1975), cert. dented, 425 U.S. 874 (1975), Moses v.
Kennear, 490 F.2d 21 (9th Cir, 1973), and Agua Caliente
Band of Mission Indians v. County of Riverside, 442 F.2d
1184 (9th Cir, L971), cert. dented, 405 U.S. 933 (1972).
The Native Hawaiians further demonstrated that Gon
gress has retained ultimate authority over and has federal
review powers over the administration of the Hawaiian
Homes program, thus evidencing the continuing federal
Status, as a “practical” matter, of the HHCA, Neverthe.
less, the Native Hawaiians’ petition for rehearing and
rehearing en bane was denied,
* REASONS FOR ALLOWANCE OF THE WRIT
THIS ACTION INVOLVES IMPORTANT QUESTIONS
OF FEDERAL LAW WHICH SHOULD BE DECIDED BY
THIS COURT.
The court of appeals’ decision, unless reversed by this
court, as a practical matter, may foreclose all Native
Hawaiians from seeking judicial review under 28 U.S.C,
§ 1331 of breaches of trust and violations of the HHICA
in the administration of the Hawaiian Home Lands.‘
The ruling will seriously frustrate these Native Americans
in their efforts to fully realize the benefits which Congress
intended for them when it created the Hawaiian Homes
program almost sixty years ago.
The facts in this action alone demonstrate that during
the last fifteen years more than 1,700 acres of Hawaiian
Home Lands have been misappropriated in violation of
trust duties and HHCA land exchange provisions. Yet the
court of appeals decision denies all Native Hawaiian ben-
cficiaries the right to seck relief for these blatant abuses.
Summary Judgment in a simila, action, Akt v. Beamer,
Civ. No. 76-0144, (2/28/78, D.C. Haw.) was recently
vacated on the authority of the court of appeals decision
in this case. In Aki v. Beamer, the district court had found
that the practice of administratively expropriating
Hawaiian Home Lands for use by state agencies through
* The decision precludes any action in any court for breaches
of trust in violation of Section 5f of the Admission Act. Addition
ally, the opinion suggests but does not decide that Native Hawaiians
may have no private right of action to redress violation of the
HHCGA, even in state court. See Appendix D, p. 24a; 588 F.2d
1216, 1224.
s
the isuance of Governor's Executive Orders was a vio
lation of the HHCA, That practice affects many thousands
of acres of Tlawatan Home Lands.
The performance of the THiawatian Homes program in
general has fallen far short of meeting the needs of Native
Hawanans, As of the time of the tihng of this action the
Annual Report of the Department of Thawanan Tome
Lands (Record on Appeal $22-527, Exhibit DD to Ath
davit of Beamer, pp. 95 56) shows that smee the un eplion
olf the TLawanan Homes program only 2,260 Native Hawa
Han families had been awarded parcels of trust lind. The
awards total only 25,2592 weres out of the more than
200,000 acres set aside for Native Hawatans by Congress,
The wating list for awards at that time numbered 4,607
families. Nevertheless, almost 150,000 acres, or approxi
mately 75% of these trust lands, were being used by non
benehonmnes of the THICA under general leases, leenses,
Governor's Executive Orders, pending land exchanges and
other forms of tenancy, The court of appeals, while ad
mitting that the Native Thiwatans’ argument that) the
HHCA is a federal statute for the purposes of 28 ULS.C,
8 ISS) bears “a degree of logical and technical appeal,”
nevertheless reasoned under the “common-sense” ap
proach of Gully ov. First National Bank, 299 US, 109
(1956), that Native Thiwanans bad mot stated a federal
cham under the HHCGA because, “Le]ven though the his
fonteal source of these rights was a federal statute, it is
the clear state nature of the rights which governs our
decisions.” (Baphasis inthe orgmal.) See Appendix D,
p. 2da, SRK F.2d, 1216, 1226.
In reaching its conclusion that the United States had:
relinquished control over the Hawaiian Homes program to
the State of Thiwan, and concluding that the THICA is
primarily a matter of state concern, the court of appeals
overlooked five significant statutory provisions: (1) The
United States retained the right to bring suit agaist the
state to enforce the trust: provisions of the Admission
Act? (2) Congress retained the right to unthiterally amend
or repeal the THTCGA which it created? (3) Congress pro
hibited substantive amendments to the HEICA without its
approval,’ (4) Phe approval of the United States Secre
tary of the Interior is required for any proposed exchange
of Hawatan Hlome Lands for state Linds;® and (9) The
federal lands which were unencumbered at the time of
Hlawaiti's admission to the Union. These reservations of
federal control over the Thiwattan Homes program de
monstrate conclusively that the HIICA ts a federal statute
and that there is a strony continumy federal mterest in the
proper administration of this trast which Congress created
in recognition of the United States’ obligations to Native
Hawatians. [If Congress had intended to completely trans
fer the program to the state and relinquish tts control, a
would not have reserved the power to unilaterally amend
the HHCGA or to prohibit substantive amendments without
its approval. [te would certamly not retain the right to
repeal the HHICA if it had already repealed the act by
implication. Finally, if the THICA is only a state law as
concluded by the court of appeals, then it is difficult to
understand how a state liw could legally bind the United
Section Sf of the Admission Act,
Section 225 of the HHICA,
Section 4 of the Admission Act.
*Section 204(4) of the HHGA,
"Section S(h) of the Admiasion Act,
10
States Secretary of the Interior to exercise a review func.
tion in the land exchange process as required by § 204(4)
of the HHCA. Fundamental principles of supremacy
make Wt clear that no state law can impose any duties
upon a federal official. Yet the review function of the
Secretary of the In¢erior ts a provision of the HHCA
imposed by Congress and amendment of that provision
was forbidden by Congress without its consent. These
indicia of federal control clearly establish that the HHICA
is a federal statute for the purpose of 28 U.S.C. § 1351.
The court of appeals applied the “common-sense” anal
ysis of Gully v. First National Bank, supra, and concluded
that even though the ITHCA ts the historical source of the
rights of Native Hawaitans and is a federal statute, the
s
HHCA, has now acquired a “state nature.” “That analysis
is based upon the mistaken conclusion that the federal
government has relinquished its gontrol over the Hawaii-
ans Homes program and abandoned its trust: responsi
bilities to Native Hawaiians. A similar analysis was thor-
oughly rejected by this Court in Onetda Indian Nation v.
County of Oneida, 414 U.S. 661 (1974). In Oneida the
argument was made that the well-pleaded complaint rule
barred federal jurisdiction because a mere claim of fed
eral source of tithe to trust lands of Native Americans !°
10-There can be no doubt that Native Hawaiians are a group
of Native Americans or “Indians” as that term is used in Article 1,
Section 8, cl. 3 of the United States Constitution providing for the
power of Congress to regulate commerce with the Indian tribes.
In Pence v. Kleppe, 529 F.2d 135 (9th Cir. 1976), the Ninth Cir
cuit Court of Appeals cited with approval an exhaustive opinion of
the court of claims in United States v. the Native Village of Unala
kleet, 411 F.2d 1255 (Ct.Claims 1969), holding that the word
“Indian” is commonly used in this country to mean “the abo
rigines of America.” 529 F.2d at 138-139, n.5. Additionally, the
Hawaiian Homes Commission Act itself is ample evidence that
federal recognition of this Native American group has been ex-
tended by Congress.
was not sufficient. The basis of federal jurisdiction was
perhaps best explained in the concurring opinion of
Justices Rehnquist and Powell. Justice Rehnquist wrote:
In contrast to the typical instance in which the Fed
eral Government conveys land to a private entity,
the Government, by transferring land rights to In
dian tribes, has not placed the land beyond federal
SUpervIsION, Rather, the Federal government. has
shown a continuing solicitude for the rights of the
Indians in their land... Thus, the Indians’ right to
possession in this case is based not solely on the
onginal grant of rights in the land but also upon the
Federal Government's subsequent guarantee. Their
claim is clearly distinguishable from the claims of
land grantees for whom the Federal Government
has taken no such responsibility. (Emphasis in orig
inal.) 414 U.S. at 684.
Just as in Oneida, Congress has demonstrated a contin
uing federal supervision over and responsibility for the
Hawatian Homes program. Accordingly, Native Hawatians
have properly raised federal claims for the numerous vio
lations of the HHICA found by the district court.
Because of the importance of these issues to the class
of Native Hawatians bringing this action as well as the im
pact on future generations of trust "beneficiaries, this
Court should allow the writ to issue to determine the
right of Native Hawatians to seek judicial redress pursuant
to 28 U.S.C. § 1331 for breaches of the trust provisions
of Section 5(f) of the Admission Act and violations of
the HHCA. The trust relationship between the United
States and Native Hawatians established by the HHCA has
never been examined by this Court and it is critical to
Native Hawatians that the issues raised in this action be
12
decided so that Native Hawaiians may finally enjoy the
benefits Congress intended for them so long ago.
THE COURT OF APPEALS HAS DECIDED FEDERAL
QUESTIONS IN WAYS CONFLICTING WITH DECISIONS
OF THIS COURT,
This Court should allow the writ to issue for a second
and equally important reason, The court of appeals
denied Native Hawaiians a private right of action for rea-
sons directly conflicting with the holdings of this Court,
including Poafpybitty v. Skelly Oil Co., 390 U.S. 365
(1968), Moe v. Confederated Salish and Kootenat Tribes
of the Flathead Reservation, 426 U.S. 463 (1976), and
Cort v. Ash, 422 U.S. 66 (1975).
The holding of the court of appeals is in conflict with
the principles established by this Court in Poa/pybitty
v. Skelly Oil Co., 390 U.S. 365 (1968), where this Court
stated, regarding the enforcement of claims of other
Native Americans,!! as follows:
[T]he agency . . . charged with fulfilling the trust
obligations of the United States is faced “with an
almost staggering problem in attempting to dis-
charge its trust obligations with respect to thou-
sands upon thousands of scattered Indian allot-
ments. In some cases, the adequate fulfillment of
trust responsibilities on these allotments would
undoubtedly involve administrative costs running
many times the income value of the property.”
H.R. Rep. No. 2503, 82nd Cong., 2d Sess., 23
(1952). Recognizing these administrative burdens
and realizing that the Indian’s right to sue should
not depend on the good judgment or zeal of a
I See Footnote 10, supra.
13
government attorney, the United States has indi-
cated its support of petitioners’ position that
Indians have a capacity to sue... 390 U.S. 365,
374,
Similarly to Poafpybitty, the United States supports the
right of Native Hawaiians to bring suit pursuant to 28
U.S.C. 81331 to enforce the trust provisions of Section
5(f) of the Admission Act. (See Brief of the United
States, Amicus Curiae, Appendix C hereto.) In fact, the
United States cited Poafpybitty as the controlling
authority in reaching its conclusion.
More recently, in ga action brought by Native Ameri-
cans in which the United States was not a party, Moe
v. Confederated Salish and Kootenat Tribes of the Flat-
head Reservation, 425 U.S. 463 (1976), this Court held
that Native Americans “in certain respects . .. were to
be accorded treatment similar to that of the Uniied
States had it sued on their behalf.”” 425 U.S. 463, 474.
Thus, this Court has held not only that Native Americans
have the right to bring an action to protect their trust
property, but that they also enjoy the immunity of the
United States from the application of the anti-injunction
statute in tax cases, 28 U.S.C. §1341, even though
that immunity is not expressly stated in the statute. !*
Indeed, the Ninth Circuit pointed out in Capitan Grande
Band of Mission Indians v. Helix Irrigation District, 514
F.2d 465 (9th Cir. 1975), cert. denied, 423 U.S. 874
12 While Moe involved an action under 28 U.S.C. § 1362, this
Court has noted that the only significant difference from an action
by Native Americans brought under 28 U.S.C. §1331 is that
§1362 relieves Indian Tribes of the $10,000 amount in contro-
versy requirement. Onetda Indian Nation v. County of Oneida,
414 U.S. 661, 663.
14
(1975), that the failure to afford the trust beneficiaries
the same rights as the United States when suing on their
behalf could lead to inconsistent results. Thus, the court
held that the Native Americans enjoyed the same immu-
nity from the application of a state statute of limitations
as the United States. The Capitan Grande court stated:
Indian bands and tribes have no assurance that all
their claims, or even all their plainly reasonable
claims, with respect to trust lands will be pursued
in a timely fashion by us United States. Such
assurance is precluded by the magnitude of the
administrative burdens imposed on the United
States by reason of its fiduciary responsibilities,
and the inherently discretionary manner in which
these responsibilities must be discharged. To pro-
vide such assurance would be substantially illusory
were such sutts barred by state statutes of limita-
tion more restrictive than that to which the United
States would have been subject had it brought the
suit. (Emphasis added.) 514 F.2d 465, 470-71.
The decision of the court of appeals is directly in con-
flict with the principles of Poafpybitty v. Skelly Oil Co.,
supra, and Moe v. Confederated Salish and Kootenat
Tribes of the Flathead Reservation, supra, because it
denies to Native American beneficiaries the right to bring
suit to enforce breaches of trust and unlawful use of
their trust lands. The holding completely fails to account
for the fact, as recognized by this Court in Poafpybitty,
that it is completely unrealistic to expect that the United
States will be able to vigorously protect the rights of all
Native Americans given the enormous burden on the
United States. The lack of any action by the United
States in light of the long standing abuses in the Hawaiian
Homes program, as found by the district court in this
15
action, amply demonstrates the necessity for allowance
of a private right of action by the Native Hawaiian
beneficiaries for breaches of trust in the administration
of the Hawaiian Home Lands.
The court of appeals has also denied Native Hawaiians
a private right of action for enforcement of the trust pro-
visions of the Admission Act by applying a presumption
under circumstances rejected by this Court in Cort v.
Ash, 422 U.S. 66 (1975). The court of appeals examined
the legislative history of the Admission Act and was able
to find no evidence as to whether or not Congress intend-
ed that Native Hawaiians have a private right of action to
enforce the trust provision of Section 5f. Nevertheless,
the court of appeals applied the Latin maxim expressto
unius est esclusio alterius, applied by this Court in
National Railroad Passenger Corp. v. National Association
of Railroad Passengers, 414 U.S. 453 (1974) (Amtrak)
to deny Native Hawaiians a private right of action even
though that approach was expressly discredited by this
Court one year later in Cort v. Ash, supra.
This Court discussed the application of the exclusto
unius maxim of Amtrak in Cort v. Ash, 422 U.S. 66, 82-
83 (1975), and declined to apply it where the legislative
history failed to show whether there was any Congres-
sional intent regarding a private right of action. In foot-
note 14 of Cort, 422 U.S. at 82, this Court rejected the
suggestion that the provision of a private remedy in one
title of a particular act implied that no private remedy
was intended in another title of the same act. This
Court stated:
14. We find this excursion into extrapolation of
legislative intent entirely unilluminating. In Am-
trak, there was a private cause of action provided
L6
in favor of certain plaintiffs concerning the partic-
ular provision at issue, It was in this context that
we referred to ‘a frequently stated principle of
Statutory construction... that when legislation ex-
pressly provides a particular remedy or remedies,
courts should not expand the coverage of the stat-
ute to subsume other remedies.’ (Emphasis added.)
422 U.S. 66, 82.
Thus, the Supreme Court limited the application of the
maxim to situations where Congress had provided a lim-
ited private right of action, Where a limited private right
of action is provided, it is logical to infer that Congress
did not intend a broad general private right of action.
That is simply not the case here. The court of appeals
expressly acknowledged both that the legislative history
is silent on the issue and that no private right of action of
any kind is mentioned in the Admission Act. Thus, the
exclusio untus maxim was applied by the court of appeals
under circumstances expressly rejected by this Court.
Additionally, the court of appeals’ application of the
discredited exclusio unius maxim is also directly contrary
to this Court’s well established rule that ambiguities in
Federal treaties or statutes dealing with Native Americans
are to be liberally construed in their interest. Indeed,
that principle was emphatically affirmed by the Ninth
Circuit Court of Appeals itself in Santa Rosa Band of
Indians v. Kings County, 532 F.2d 655, (9th Cir. 1975),
cert. dented, 429 U.S. 1038 (1977), where after a careful
review of this Court’s frequent application of this prin-
ciple, it stated:
To resolve the ambiguity ..., we begin with the
fundamental postulate, enunciated in Worcester v.
Georgia, see 31 U.S. at 393, that ambiguities in Fed-
eral treaties or statutes dealing with Indians must be
17
resolved favorably to the Indians. See, McClanahan
v. Arizona Tax Commission, 411 U.S. at 174-175;
Menominee Tribe v. United States, 391 U.S. 404
(1968); Kimball v. Callahan, 493 F.2d 564 (9th Cir.
1974), cert. denied, 419 U.S. 1019 (1974). This
principle is somewhat more than a canon of con-
struction akin to a Latin maxim, easily invoked and
as easily disregarded. It is an interpretive device,
early framed by John Marshall’s legal conscience for
insuring the discharge of the nation’s obligations to
the conquered Indian tribes. The Federal govern-
ment has long been recognized to hold, along with
its plenary power to regulate Indian affairs, a trust
status toward the Indian—a status accompanied by
fiduciary obligations. See Seminole Nation v, United
States, 316 U.S. 286, 297 (1942); United States v.
Kagama, 118 U.S. 375 (1886); Beecher v. Wethery,
95 U.S. 517, 525 (1877); Cherokee Nation v.,
Georgia, 30 U.S. (5 Pet.) 1, 12 (1831). While there
is legally nothing to prevent Congress from disre-
garding its trust obligations and abrogating treaties
or passing laws inimical to the Indians’ welfare, the
courts, by interpreting ambiguous statutes in favor
of the Indians, attribute to Congress an intent to
exercise its plenary power in the manner most con-
sistent with the nation’s trust obligations. See,
Squire v. Capoeman, 351 U.S. 1, 7-8 (1956). 532
F.2d at 660.
See also Bryan v. Itasca County, 426 U.S. 373, 392
(1976), Northern Cheyenne Tribe v. Hollowbreast, 425
U.S. 649, 655 n.7 (1976), Antoine v. Washington, 420
U.S. 194, 199-200 (1975), Alaska Pacific Fisheries v.
United States, 248 U.S. 78, 89 (1918), and Choate v.
‘Trapp, 224 U.S. 665, 675 (1912). This canon of con-
struction regarding interpretation of ambiguous statutes
clearly militates in favor of a finding that Native Hawaii-
ans should be accorded a private right of action to pro-
18
tect their Hawaiian Homes Lands from being illegally
used by non-beneficiaries in violation of the trust
imposed by the Admission Act.
CONCLUSION
This Court should issue a writ of certiorari because of
substantiel federal questions whith are of extreme impor-
tance to thousands of Native Hawaiians in their efforts to
remedy serious abuses of the Hawaiian Home Lands.
Unless the writ is granted, these beneficiaries may effec-
tively be precluded from obtaining any judicial review of
the substantial trust violations. Additionally, this Court
should review the court of appeals’ decision because it is
inconsistent with the decision of this Court recognizing
the rnght of Native Americans to bring suit to protect
their trust property.
Respectfully submitted,
RONALD A. ALBU
Max W. J. GRAHAM, JR.
LEGAL AID SOCIETY
OF HAWAII
1164 Bishop Street
Suite 1100
Honolulu, Hawaii 96813
BEN HARRY GADDIS
LEGAL AID SOCIETY
OF HAWAII
305 Wailuku Drive
Hilo, Hawaii 96720
To ED PRET Sy
SO a ne a
APPENDIX
la
APPENDIX A
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF HAWAII
CIVIL NO. 75-0260
KEAUKAHA-PANAEWA COMMUNITY = ASSOCIA.
TION, KEAUKAHA-PANAEWA FARMERS ASSOCIA
TION, ISABEL LEINANI KNUTSON, ERMA KALANUI
and APRIL KAMAKAOKALANIMALUNAO’E KALA.
NUI, by her guardian ad litem, ERMA KALANUI, indi-
vidually and on behalf of all persons similarly situated,
Plaintiffs,
vs.
HAWAIIAN HOMES COMMISSION, BILLIE BEAMER,
in her capacity as Chairman of the Hawaiian Homes
Commission, THE DEPARTMENT OF HAWAIIAN
HOME LANDS, COUNTY OF HAWAII, EDWARD
HARADA, in his capacity as Chief Engineer, County of
Hawai, and JAS. W. GLOVER, LTD., a Hawaii cor-
poration,
Defendants.
DENIAL OF MOTIONS TO DISMISS
Plaintiffs have brought this action ‘to enjoin further
construction of the Waiakea-Uka Flood Control Project
which will destroy over 20 acres of available Panaewa agri-
cultural land, because of the diversion of this land to the
County of Hawaii for a flood control project violates
their rights under §4 of the Admissions Act of 1959, the
Hawaiian Homes Commission Act of 1920, and Article
XI of the Hawaii State Constitution.”
2a
_
Plaintiffs allege that jurisdiction is conferred on this
Court by 28 U.S.C. $1331. Grounds for jurisdiction are
also alleged under 28 U.S.C. § § 1343 (3) and (4).
Under Section 1331, besides the minimum value of
$10,000, the matter in controversy must be one that
“arises under the Constitution, laws, or treaties of the
United States.”
The Admission Act (An Act to Provide for the Admis-
sion of the State of Hawaii into the Union) is, of course,
a federal law. Such act, in pertinent part, provides as
follows:
§4. As a compact with the United States relating to
the management and disposition of the Hawaiian
home lands, the Hawaiian Homes Commission Act,
1920, as amended, [HHCA] shall be adopted as a
provision of the Constitution of said State...subject
to amendment or repeal only with the consent of
the United States, and in no other manner:.....
§5. . .(f) The lands granted to the State of Hawaii
by subsection (b) of this section and public lands re-
tained by the United States under subsections (c)
and (d) and later conveyed to the State under sub-
section (e), together with the proceeds from the sale
or other disposition of any such lands and the income
thereform, shall be held by said State as a public
trust...for the betterment of the conditions of native
Hawaiians, as defined in the Hawaiian Homes Com-
mission Act, 1920, as amended, ... [T] heir use for
any other object shall constitute a breach of trust
for which suit may be brought by the United States...
(h) All laws of the United States reserving to the
United States the free use or enjoyment of property
3a
which vests in or is conveyed to the State of Hawaii...
shall cease to be effective upon the admission of the
State of Hawaii into the Union.
Pursuant to Section 4 of the Admission Act, the HHCA —
was adopted as Article XI of the Hawaii State Constitu-
tion. The HHCA was first enacted by the United States
Congress in 1921. Act of July 9, 1921, ch. 42, 42 Stat.
108. Until Hawaii’s admission into the Union as a state
in 1959, the Act was codified in 49 U.S.C. § 691 et seq.
In Kila v. Hawaiian Homes Commission, Judge Pence
stated: “Upon Hawaii’s admission the Act acquired a
unique, hybrid character... The omission of the Act from
Title 48 makes suspect its status as a federal law. In §4
of the Admissions Act, the act admitting Hawaii to the
Union as a state, however, Congress compacted with the
State that Hawaiian Homes Commission Act, 1920, as
amended, must be adopted as a provision of the State
Constitution. The Act was therefore adopted as a law of
the State of Hawaii in the State Constitutuion as Art. XI,
§§ 1, 2. The HHCA, 1920, thus now appears to be a
Federal law, a State law, and also the substance of a
compact between the United States and the State of
Hawaii.” !
This court concurs in the above conclusion. The Admis-
sion Act, if not in haec verba, at least in intent, incorpor-
rated the HHCA. See Section 4 thereof. This is buttressed
by the trust provisions of Section 5(f). Section 5(h)
which provides for the cessation of “[A]ll laws of the
United Stated reserving to the.,United States the free use
or erjoyment of property which vests in or is conveyed
1 Kila v. Hawaiian Homes Commission, Civ. No. 74-12 (9/17/-
74, D.C. Haw.) at pp. 4-5.
4a
to the State of Hawaii...”” (emphasis edded) could be con-
strued to mean that all other pertinent laws of the United
States remained in full force.
Accordingly, this court concludes that both the HHCA
and the Admission Act confer jurisdiction on it under 28
U.S.C. 1131. The motions to dismiss made by respective
defendants are, therefore, hereby DENIED.
DATED: Honolulu, Hawaii, September ___ ,_ 1975.
United States District Judge
Xa
APPENDIX B
LEGAL AID SOCIETY OF TAWAITI
Suite LLOO, L164 Bishop Strect
Honolulu, Hawan 96815
Telephone No. 536-4302
BEN HARRY GADDIS
RONALD ALBU
PAUL ALSTON
Attorneys for Plaintiffs
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF TLAWALII
Civil No. 75-0260
KEAUKAHA-PANAEWA COMMUNITY
ASSOCIATION, et al.,
Plaintiffs,
V.
HAWAIIAN HOMES COMMISSION, et al.,
Defendants.
I. FINDINGS OF FACT
This action came on for hearing before the Court,
Honorable Dick Yin Wong presiding, and based upon the
record herein, the briefs, and the arguments of counsel,
the Court finds as follows:
1. Plaintiff KEAUKAHA-PANAEWA COMMUNITY
ASSOCIATION is a non-profit corporation composed of
native Hawaiians who are lessees or qualified applicants
for leases administered under the Hawaiian Homes Com-
mission Act of 1920 (hereinafter ““HHCA”’).
ba
& Plaintiff KEAUKAHA-PANAEWA FARMERS
ASSOCIATION is an unincorporated association whose
membership is composed of native Hawaiians who are
lessees or applicants for leases on Hawaiian Homes agri-
cultural lands administered under the HHGA,
3. Plaintiff ISABEL LEINANI KNUTSON is a qualified
applicant for a Hawatian Homes agricultural lease at
Panaewa, Hawai, and was 35th on the waiting list for
such leases at the time this action was initiated,
4. Plaintiff ERMA KALANUL is a qualified applicant
for a Hawaiian Homes agricultural lease at Panaewa,
Hawai, and was 41st on the waiting list for such leases as
of August 6, 1976.
5. The above-described Plaintiffs represent a class of
persons of more than 50% aboriginal Hawaiian blood
(native Hawaiians) who are qualified under the terms of
the HHCA to lease Hawaiian home lands at Panaewa,
Hawa. As such, Plaintiffs are beneficiaries under the
HHCA,
6. Plaintiff APRIL KALANUI was a fourteen year old
minor child who is 75% native Hawaiian who will be eligi-
ble to lease agriultural land at Panaewa when she attains
her majority. Her mother ERMA KALANUI was appoint-
ed guardian ad litem to represent her interested in this
action.
7. Defendant HAWAIIAN HOMES COMMISSION,
(hereinafter “Commission”), is a state commission which
is charged with the responsibility for administering and
implementing the HHCA.
8. Defendant BILLIE BEAMER (hereinafter
“Beamer”), is Chairman of the Hawaiian Homes Commis-
sion and is Director of the Department of Hawaiian
Home Lands. She has primary responsibility and authority
7a
for developing and presenting to the Commission plans
for lands entrusted to the Department of Hawaiian Home
Lands as well as authority, with the approval of the
Commission, to enter into binding contractual arrange-
ments on behalf of the Commission.
9, Defendant DEPARTMENT OF HAWAITAN HOME
LANDS, (hereinafter “Department”’), is the state agency
charged with administering the HIICA under the direction
of the Commission and Director of the Department.
10. Defendant COUNTY OF HAWALL, (hereinafter re-
ferred to as “County”, is the corporate body of the island
of Hawaii vested with the power to authorize and contract
for the construction of public works within its boundaries,
ll. Defendant EDWARD HARADA (hereinafter
“Harada”), is the Chief Engineer for the County of Hawaii
and is the County official responsible for the supervision
of the construction of a public works project known as
the Waiakea-Uka Flood Control Project.
12. Defendant JAS. W. GLOVER, LTD., (hereinafter
“Glover”’), is a Hawaii corporation licensed to perform
general contracting services within the State of Hawan.
13. The lands which are the subject of this action are
Hawaiian home lands at Panaewa, Hawaii, administered
under the terms of the HHICA by Defendants Commission,
Department, and Beamer (hereinafter State Defendants).
14. Hawaiian home lands at Panaewa have been desig,
nated by the State Defendants for agricultural farm lots
for native Hawaiians eligible to lease such lands under
§ 207(a) of the HHCA.
15. Hawaiian home agricultural farm lots in Panaewa
(hereinafter “Panaewa farm lots’’), are among the best
farm lots in the possession of the Department at the pre-
sent time.
Ra
16, Panaewa farm lots used by the County for the pro-
ject include land which the State Defendants planned to
lease to native Hawaiians for agricultural purposes under
§207(a) of the HHCA,
17. There are over 40 cligible native Hawatians on a
waiting list for Panaewa farm lots.
18. The WatkeaUka Flood Control Project, (herein
after “Project’’), is located in lower Waiakea-Uka, District
of South Hilo, County and State of Hawaii, and will con
sist upon completion of a diversion of Palat Stream into
Four Mile Creek and a transmission channel designed to
carry the combined tHlows of Palai Stream and Four Mile
Creck into a water detention basin in Panaewa.
19. On March 30, 1973, the County and its consultant
appeared before the Commission and presented 2 request
lor approval of the Project. The minutes of that meeting
indicate that the flood control project would require
approximately 12 acres of Hawaiian home lands. At this
meeting the Commission veted to approve this Project
“pending a 12 acre land exchange to be worked out.”
20. Jas. W. Glover, Ltd. constructed Phase I of the
Project under contract with the County. This contract
was awarded in August, 1974 and construction began in
January, 1975.
21. Phase T of the Project has been completed and ex:
tends the transmission channel in an easterly direction
from Awa Street across the Panaewa farm lots. Phase I
of the Project, not yet under construction, will extend
the transmission channel from Awa Street in a westerly
direction across other Panaewa farm lots.
22. The County is presently using 16.371 acres of the
Panaewa farm lots for Phase [of the Project.
9
23. The County will use 3.617 acres of the Panaewa
farm lots for Phase IL of the Project.
294. Because the transmission channel has cut across
a road reserve, an additional 5.460 acres of the Panaewa
farm lots have been set aside for a new road reserve,
25. A minimum of 25.488 acres of the Panaewa farm
lots will be taken by the County for the Project and will
be rendered unsuitable for agricultural use by native
Hawanan beneliciaries of the HHICA,
26. State Defendents were informed by no later than
May 29, 1975, that the County was using more than 12
acres of Panaewa farm land approved for exchange by the
Commission,
27. State Defendants have not approved an exchange
of more than 12 acres of the Panaewa farm lots for the
Project,
28. Despite their knowledge that the County was using
more land than was approved for exchange, State De
fendants have taken no action to halt the use and altera
tion of the Panaewa farm lots by the County.
29, After the Commission vote, described in paragraph
19 above, State Defendants took no further action to
authorize use of Hawaiian home lands for the Project
until February, 1976, over six months after the initiation
of this action,
$0, State Defendants have received no replacement
lands in exchange for the 12 acres of the Panaewa farm
lots originally approved for the Project pending a land ex
change, or for the additional lands actually used by the
County for the Project,
$1. No approval has been sought or obtained from the
Governor of the State of Hawai, or the Secretary of the
10a
Interior for the exchange for any of the Panaewa farm
lots being used for the construction of the Project.
$2. There are over 1709 acres of Hawaiian home lands
which are presently awaiting replacement lands through
the land exchange process. From as early as 1962 until
the present State Defendants have permitted much of this
land to be transferred out of their control and manage:
ment for the use of persons who are not beneficiaries
under the HHCA without any compensation, Although
such transfers were purportedly made under the land ex-
change provisions, §204 (4) of the HIICA, no lands have
been obtained by State Defendants in exchange for lands
they surrendered,
43. As of April 5, 1976, State Defendants had not de-
termined what state lands, if any, were available from the
Department of Land and Natural Resources for exchange
for lands already surrendered by State Defendants for the
Project or the other unconsummated land exchanges.
34. The Project was designed to alleviate flooding and
to provide better drainage for portions of the City of Hilo.
35, The Project will significantly interfere with use of
the Panaewa farm lots by native Hawaiians.
36. The Project was not primarily designed to serve the
Panaewa Hawaiian homes farm lots although it may pro-
vide minor incidental benefits for this area.
37. The State Defendants permitted construction of the
Project because they believed it was “essential to the gen-
eral public’, and that community benefit outweighed the
detriment to the beneficiaries of the HHCA,
38. On February 2, 1976, Defendant Beamer wrote to
Defendant Harada inquiring whether the County would
have any objection to receiving a license for the use of
Panaewa farm lots for the Project.
lla
39, Thereafter State Defendants and Defendant County
executed a license agreement on April 22, 1976 (back-
dated to January 1, 1976), allegedly authorizing the use
of the Panaewa farm lots for the Project. ‘This license
agreement cites §207 (c) (1) of the HHICA as authority
for its issuance,
40. The license agreement purports to grant to Defen
dant Gounty a “flood control drainage easement’. Said
license provides for use for a term of 10 years, or until
consummation of a land exchange. Consideration for the
license is $1.00 per year.
Il. DECLARATIONS AND CONCLUSIONS OF LAW
1. ‘There are no genuine issues as to any material fact
and Plaintiffs are entitled to partial summary judgment as
a matter of law,
2. Sections 4 and 5 of the Hawaii Admission Act of
1959 and Article XLof the Hawaii State Constitution im-
pose fiduciary obligations upon State Defendants who are
trustees charged with executing the trust created by the
HCA for the benefit of native Hawatians.
%. As fiduciaries, State Defendants owe the following
duties to Hawaiian beneficiaries of the HHCA;
A. ‘To exercise such care and skill in the management
of the Hawaiian home lands as a person of ordinary pru
dence would exercise in dealing with his own property,
B. To adhere to the terms of the trust embodied in
the HHCA,
C. To act exclusively in the interest of native Hawa-
iians, the trust beneficiaries.
D. To hold and protect the trust property for the
trust beneficiaries.
4. State Defendant have breached their trust or fid-
uciary duties described in paragraph 3 above by: (1)
Qa
allowing the use of Hawaiian home lands under the land
exchange provisions without first satisfying the prerequi-
sites for an exchange, (2) issuing a license for an unlawful
purpose, (3) permitting the uncompensated use of these
lands, and (4) allowing the needs of the general public, as
opposed to the needs of native Hawaiians, to control
decisions made concerning the Project.
5. State Defendants may not lawfully permit Hawaiian
home lands to be used for the benefit of persons who are
not beneficiaries under the HHCA without first obtaining
reasonable compensation for such use, when otherwise
permissible, based upon sound economic and accounting
principles.
6. Section 204 (4) of the HHCA permits the State
Defendants —
with the approval of the governor and the Secretary
of the Interior, in order to consolidate its holdings
or to better effectuate the purposes of [the HHCA,
to] exchange the title to available lands for lands,
publicly owned, of equal value.
7, State Defendants have violated § 204 (4) by permit-
ting Defendants County and Glover to take possession of,
alter, and render unuseable for agriculture more than 24
acres of Hawaiian home lands at Panaewa, Hawaii, for the
Waiakea-Uka Flood Control Project. The transfer of these
lands under § 204 (4) was unlawful and invalid because:
A. State Defendants failed to make express factual
findings that the land exchange proposed by Defendant
County would cither (1) consolidate the land holdings
of the department or (2) better effectuate the purposes
of the HHCA.
B. State Defendant permitted the County to use
and alter over 24 acres of the Panaewa farm lots before
obtaining title to public lands of equal value in exchange.
13a
C. State Defendants failed to obtain the approval of
the Governor of the State of Hawaii prior to allowing use
and alteration of the Panaewa farm lots, thereby depriving
native Hawaiian beneficiaries of the protection afforded
by his independent review.
1D. State Defendants failed to obtain the approval of
the Secretary of the Interior prior to allowing use and al-
teration of the Panaewa farm lots, thereby depriving native
Hawaiian beneficiaries of the protection afforded by his
independent review.
8. State Defendants violated § 207 (c) (1) of the HHCA
by issuing a license to Defendant County on April 22,
1976 (dated January 1, 1976) for the use and alteration
of the Panaewa farm lots. Section 207 (c) (1) provides:
(c) (i) The department is authorized to grant
licenses for terms of not to exceed twenty-one
years in each case, to public utility companies or
corporations as casements for railroads, telephone
lines, electric power and light lines, gas mains, and
the like. The department is also authorized to grant
licenses for lots within a district in which lands are
leased under the provisions of this section, to-
(A) churches, hospitals, public schools, post: of
fices, and other improvements for public pur:
Poses;
(B) theatres, garages, service stations, markets,
stores, and other mercantile establishments (all
of which shall be owned by lessees of the depart.
ment or by organizations formed and controlled
by said lessees).
9, The license of April 22, 1976, is unlawful because:
A. Licenses under § 207 (c) (1) are restricted to pub.
lic utility and similar casements which do not. signifi
cantly interfere with the underlying use of such lands by
native Hawaiians. The Project significantly interferes with
l4a
the use of these and surrounding Hawaiian home lands by
native Hawaiian beneficiaries.
B. Licenses under § 207 (c) (1) (A) may be granted
for public improvements only if the public improvements
primarily serve native Hawaiian lessees within the district
where the improvements are located. The Project does
not primarily serve native Hawaiian beneficiaries in this
district.
10. Licenses under §205 (2) of the HHCA can not be
granted for the Project because that section does not per-
mit the licensing of Hawaiian home lands which are re-
quired for leasing to native Hawaiians under § 207 (a) of
the HHCA. Since these lands were planned for leasing to
native Hawaiians, they could not be licensed to the
County. In addition, licenses under § 204 (2) may only
be issued to the “general public, including native Hawaii-
ans.”” The County is not a member of the general public
and does not qualify for a lease or license under § 204
(2).
11. Because no land exchange has been properly con-
summated and the purported license is unlawful, Defen
dant County, through Defendant Glover, has unlawfully
taken possession of, used, and altered in excess of 24 acres
of Hawaiian home lands at Panaewa, Hawaii.
Il. ORDER
Il IS ORDERED that Defendants Commission, De-
partment, Beamer, County, Harada and Glover and their
agents, employees or successors in office or any persons
in active concert or participation with them who receive
actual notice of this order are hereby enjoined from using
the Waiakea-Uka Flood Control Project until a program
or schedule is submitted to this Court and approved, pur-
suant to this order set forth below.
L5a
IT IS FURTHER ORDERED that the State Defendants
complete a land exchange as soon as reasonably possible
in compliance with §204 (4) of the HHCA to obtain
suitable replacement lands on the Island of Hawaii for the
Hawaiian home lands rendered unsuitable for agriculture
by the Waiakea-Uka Flood Control Project. State Defend-
ants shall submit to this Court and to Plaintiffs’ attorneys
within 30 days after the effective date of this order a pro-
posed schedule setting forth the steps required to com-
plete the land exchange process and the manner and dates
by which each step will be accomplished; provided, how-
ever, that such schedules shall be subject to review and
revision by this Court, if inadequate.
IT IS FURTHER ORDERED that this Court shall re-
tain jurisdiction over this matter until a land exchange ts
fully and properly consummated.
DATED: Honolulu, Hawaii, , 1977
JUDGE OF THE ABOVE-ENTITLED COURT
l6a
APPENDIX C
IN THE UNITED STATES COURT OF APPEALS
FOR THE NINTH CIRCUIT
No. 77-1044
KEAUKAHA-PANAEWA COMMUNITY
ASSOCIATION, ET AL.,
Plaintiffs-Appellees
HAWAIIAN HOMES COMMISSION, ET AL.,
Defendants-Appellants
ON APPEAL FROM THE UNITED STATES
DISTRICT COURT FOR THE DISTRICT OF HAWAII
BRIEF OF THE UNITED STATES, AMICUS CURIAE
OPINION BELOW
The unreported “Finding of Fact; Declarations and
Conclusions of Law; Order’’ by District Judge Dick Yin
Wong appears at pages 551-555 of the reproduced record.
JURISDICTION
The final order of the district court was entered Septem-
ber 1, 1976 (R. 561). This Court’s jurisdiction rests on
28 U.S.C. 1291.
QUESTIONS PRESENTED
1. Whether an association which represents Native
Hawaiian beneficiaries under the Hawaiian Homes Com-
17a
mission Act and individual native Hawaiians have stand-
ing or a right to bring an action to enforce provisions of
that Act or the Hawaii Admision Act in United States
District Court under 28 U.S.C. 1331.!
2. Whether the United States alone is authorized to
bring an action to enforce compliance with provisions of
the Hawaiian Homes Commission Act or the Hawai Ad-
mission Act.
STATEMENT
This brief is submitted by the United States in response
to the order of this Court, dated April 21, 1978, request-
ing the Department of Justice to file “fa brief as amicus
curiae on the jurisdictional aspects of the case.”
The district court below has concluded that the Hawai-
an Homes Commission Act (HHCA) is ‘fa Federal law, a
State law and also the substance of a compact between
the United States and the State of Hawaii” (footnote omit-
ted; R. 203). This was also the ruling of the District
Court of the District of Hawaii (Pence, J.) in Kila v.
Hawaiian Homes Commission, Civ. No. 74-12 (Sept. 17,
1974, unreported, R. 70). |
The HHCA of 1920 was first enacted as a law of the
United States on July 9, 1921, 42 Stat. 108. This act was
' codified to the United States Code under Title 48 Section
691 to 716. The United States, in providing for the ad-
mission of the State of Hawaii into the Union, P.L. 86-3,
73 Stat. 4, March 18, 1959, provided in Section 4 of the
Admission Act that Hawaii, as a condition to obtaining
lWe have assumed that the Court in its order of April 21,
1978, inadvertently asked for our views on the standing or right
of “appellants’”’ to bring this action and intended for our brief
to address the appellees’ standing or right.
18a
statehood, enter into a compact with the United States re-
lating to the management and disposition of the Hawaiian
home lands. This Act provides that ‘ * * * the Hawaiian
Homes Commission Act, 1920, as amended, shall be
adopted as a provision of the Constitution of said State
* * *” 73 Stat. 5. In Section 5, subsections (a)-(e) of
the same Act, the United States, with certain exceptions
not here relevant, granted to the State of Hawaii title
to all public lands and other public property held by the
United States immediately prior to the State of Hawaii’s
admission into the Union. Section 5 (f) of the Act, 73
Stat. 6, provided that “such lands and the income there-
from, shall be held by said State as a public trust for the
support of the public schools and other public educational
institutions, for the betterment of the conditions of na-
tive Hawaiians * * *, for the development of farm and
home ownership on as widespread a basis as possible for
the making of public improvements, and for the provision
of lands for public use.” Section 5 (f) continued: “Such
lands, proceeds, and income shall be managed and disposed
of for one or more of the foregoing purposes in such
manner as the constitution and laws of said State may
provide, and their use for any other object shall constitute
a breach of trust for which suit may be brought by the
United States.”
The State of Hawaii, in its Constitution, Article XI,
Section 1, adopted ‘‘as a law of the state,’ the Hawaiian
Homes Commission Act of 1920. Section 2 of Article XI
of the Constitution is the compact with the United States
which was validated by the ratification by the people of
the State of Hawaii in adopting their constitution. Sub-
sequently, Title 48 U.S.C. 691-716 dealing with Hawaii-
an Homes Lands was omitted from the United States
Code, but the HHCA has never been formally repealed.
19a
VIEWS OF THE UNITED STATES
1. The Hawatian Homes Commission Act ts a law of
the State of Hawau and is no longer a federal law. - The
United States does not believe the HHCA, which Con-
gress required the State of Hawaii to adopt as part of the
law of that State upon admission, is presently a federal
law.
The United States, upon the admission of Hawaii as
a state, turned over to the new state the public lands,
with certain exceptions not relevant here, to which it
formerly held title. These lands were to be administered
by the State under the HHCA which had been adopted
by its constitution as a “law of the State.” The intent of
the United States that these lands be held and adminis-
tered by the State of Hawaii under the HHCA is, we be-
lieve, clear. The principal restriction retained by the
United States, set forth in Section 4 of the Admission
Act, provides that the essential purposes of the HHCA
may not be changed without the consent of the United
States. 73 Stat. 5. Significantly, Section 7 (b) (3) of the
Statehood Act provided that “all provisions of the [State-
hood] Act of Congress approved [on the approval date |
reserving rights or powers to the United States, as weli as
those prescribing the terms or conditions of the grants of
lands or other property therein made to the State of Ha-
waii are consented to fully by said State and its people.”
73 Stat. 7.
Certainly the HHCA became a law of the state of Ha-
waii upon the completion of the compact which the State
was required to enter into with the United States as an
condition to obtaining statehood. If this Act were still a
federal law, there would have been no need to have ob-
tained the consent of the State and its people to the re-
servation of certain residual rights relating to the manner
20a
that parts of the HHCA may be amended or repealed as
set forth in Section | of Article XI of the Hawaiian Con-
stitution,
To our knowledge, the Federal Government has taken
no action in this area of State concern since this Act be-
came a State law and we know of no intent to retain the
HHCA as a federal statute and no federal purpose to be
served in having the HHCA regarded as a federal law.*
2. The fact that the HHCA was required to be “adopted
as a law of the state,” as a compact with the United
States, does not operate to make the HHCA a federal
law. - Section 4 of the Hawaii Statehood Act, Pub. L.
86-3, 73 Stat. 4, provided in pertinent part:
As a compact with the United States relating to the
management and disposition of the Hawaiian home
lands, the Hawaiian Homes Commission Act, 1920,
as amended, shall be adopted as a provision of the
Constitution of said state * * *.
The State did enter into the required compact with the
United States. See Article XI of the Hawaii State Consti-
tution, Titles 1-4 of 1 Haw. Rev. Stats.; and Proc. 3309,
August 21, 1959, 24 F.R. 6868, 73 Stat. c74, admitting
the state of Hawaii into the Union.
The fact that the HHCA was required to be enacted
into state law by the Hawaiian Admission Act, and was
adopted by the State, does not operate to make this act
a federal law any more than would Section 3 of the Hawa-
iian Admission Act, which required that the State Con-
2 Stated differently, the provisions of the Admission Act and
the adoption of the State Constitution ended federal administra-
tion of the HHCA. The pertinent provisions of the HHCA have
since been administered by the State and Congress has not evinced
any intent to the contrary.
2la
stitution always be republican in form, make the State
Constitution a federal law. Had Congress intended the
HHCA to remain a federal law it certainly could have so
provided. What it did, however, was to have the HHCA
adopted as a State law, permitting the State to manage
and dispose of the lands granted by the United States to
the State by Section 5, subsections (a)-(e) of the Admis-
sion Act *‘ * * * in such manner as the constitution and
laws of said State may provide * * *.’”
The state entered into the compact with the United
States as required by the Admission Act. The compact
was completed; and nothing remains to be done. The
compact is not in issue and the present action does not
raise any questions concerning it.
3. Hawaiian Natives can properly bring sutt in federal
court to enforce the trust provisions of Section 5 (f) of
the Hawai Admission Act. - In response to the second
issue posed by this Court, we believe that there is pre-
sented here a federal question. Native Hawaiians can pro-
perly bring suit in the United States District Court under
28 U.S.C. 1331 (a) to enforce the provisions of the Hawaii
Admission Act, 73 Stat. 4, which is a law of the United
States.
The Hawaii Admission Act, Section 5(f) provides that .
the lands, proceeds, and income granted to the State
under that Act shall
be managed and disposed of for one or more of the
foregoing purposes in such manner as the constitu-
3Under the circumstances, this congressional direction is at
least an expression of implied intent that the HHCA itself was no
longer to be considered a federal law.
22a
tion and laws of said state may provide, and their
use for any other object shall constitute a breach of |
trust for which suit may be brought by the United
States. [Emphasis added. |
Since the State of Hawaii holds the lands conveyed to
it by the United States for the benefit of the Native Hawa-
lians, they, as beneficiaries of that trust, would seem to
be entitled to bring suit in the United States District Court
to compel the State to fulfill the terms of the trust. Ob-
viously, beneficiaries under a trust have standing to main-
tain an action to protect the trust or to compel adminis-
tration of the trust intended by its creation and purpose.
See Poafpybitty v. Skelly Oil Co., 390 U.S. 365 (1968),
which we believe is analogous.*
The Admission Act, in our opinion, is clearly a federal
law. It specifies the purposes of the transfer of property
and the restricted uses of lands and income for the bene-
fit of Native Hawaiians. Under these circumstances, our
view is that Native Hawaiians may maintain a suit in fed-
eral court to enforce the purposes of the trust as express-
ed in the Admission Act and that there is “federal ques-
tion”’ jurisdiction.
4. The United States could have properly maintained
a suit in federal district court for a breach of any of the
trust duties specified in Section 5 (f) of the Hawaii Ad-
misston Act, 73 Stat. 4. - Section 5 (f) of the Admission
Act, quoted above, clearly authorizes the United States
4p. Capitan Grande Band of Mis. Indians v. Helix Irr. Dist.,
514 F.2d 465, 470-71 (C.A. 9, 1975), cert. den., 423 U.S. 874;
State of New Mexico v. Aamodt, 537 F.2d 1102, 1107 (C.A. 10,
1976), cert. den., 429 U.S. 1121.
23a
to file suit to enforce the State’s responsibilities with re-
spect to the Hawaiian trust lands.
The Hawaii Admission Act, 73 Stat. 4, is unquestion-
ably a federal law. A suit to enforce a provision of that
Act would be a suit arising under a law of the United
States within the meaning of 28 U.S.C. 1331, and, if
commenced by the United States, jurisdiction would be
in the federal district court. 28 U.S.C. 1345.
CONCLUSION
We believe that the district court incorrectly found the
HHCA to be a federal law. However, we believe that the
district court did have jurisdiction over this matter under
28 U.S.C. 1331 (a) to enforce Section 5 (f) of the Hawaii
Admission Act. That law specifies that the lands con-
veyed by the United States to the State are to be managed
and disposed of for certain stated purposes. Clearly, the
United States could have filed suit to enforce this trust
as the statute explicitly states. In addition, the Hawaiian
beneficiaries could also properly bring an action to en-
force this trust.
Respectully submitted,
Sanford Sagalkin,
Acting Assistant Attorney General.
Jacques B. Gelin,
George R. Hyde,
Attorneys, Department of Justice,
May 1978 Washington, D.C. 20530.
90-1-0-1208
24a
APPENDIX D
KEAUKAHA-PANAEWA COMMUNITY ~~ ASSOCIA-
TION, Keaukaha-Panaewa Farmers Association, Isabel
Leinani Knutson, Erma Kalanui and April Kamakaoka-
lanimalunao’e Kalanui, by her guardian ad litem, Erma
Kalanui, Individually and on behalf of all persons
similarly situated, Plaintiffs-Appellees,
v.
HAWAIIAN HOMES COMMISSION, Billie Beamer, in
her capacity as Chairman of the Hawaiian Homes
Commission, the Department of Hawaiian Home
Lands, Defendants-Appellants,
and
County of Hawaii, Edward Harada, in his
capacity as Chief Engineer, County of
Hawail, Defendants,
and
James W. Glover, LTD., a Hawaii
Corporation, Defendant
No. 77-1044
United States Court of Appeals,
Ninth Circuit.
Sept. 18, 1978.
As Amended on Denial of Rehearing and
Rehearing En Banc Jan. 9, 1979.
Before CHAMBERS, WALLACE, and ANDERSON,
Circuit Judges.
WALLACE, Circuit Judge:
Pe
25a
Agencies of the State of Hawaii appeal from a judg-
ment of the district court that the agencies have violated
their obligations in connection with certain lands held in
trust by the State of Hawaii for the benefit of native
Hawaiians. This appeal raises complex jurisdictional and
jurisdiction-related issues. We reverse.
I
In 1921, Congress enacted the Hawaiian Homes
Commission Act (Commission Act), 42 Stat. 108, which
created the Hawaiian Homes Commission (Commission)
and designated some 200,000 acres (the Hawaiian home
lands) for the welfare and rehabilitation of native Hawa-
iians. The Commission Act empowers the Commission to
lease parcels of land within its jurisdiction to native
Hawaiians at nominal rates. Although the underlying pur-
pose of the statute has been questioned, it was ostensibly
designed to rehabilitate the declining indigenous Hawa-
lians by facilitating their access to farm and homestead
lands. See Levy, Native Hawattan Land Rights, 63 Cal.
L. Rev. 848, 865-66, 876-80 (1975).
With the admission of Hawaii into the Union in 1959,
responsibility for the administration of the Hawaiian
home lands was transferred to the state. Section 4 of the
Hawaii Admission Act, Pub.L. No. 86-3, 73 Stat. 5
(1959) provides:
As a compact with the United States relating to the
management and disposition of the Hawaiian home
lands, the Hawaiian Homes Commission Act, 1920,
as amended, shall be adopted as a provision of the
Constitution of said State
In addition, the Admission Act conveyed the United
States’ title to the Hawaiian home lands to the state, zd.
26a
at § 5(b),! and requires Hawaii to hold these lands ‘as
a public trust... for the betterment of the conditions
of native Hawaiians... and their use for any other object
shall constitute a breach of trust for which suit may be
brought by the United States. /d. at § 5(f).?
In accordance with section 4 of the Admission Act, the
Commission Act was adopted as a provision of Hawaii's
constitution, Hawaii Const. art. XI, and was thereafter
deleted from the United States Code, although it was not
formally repealed. |
In the early 1970s, the County of Hawaii proposed the
construction of a flood-control project in the Waiakea-
Uka area. Because the proposed project was to be con-
structed on approximately 12 acres of Hawaiian home
lands, the County presented its proposal to the Commiss-
ion. The Commission apparently concluded that the pro-
ject would alleviate flood problems experienced by some
of its lessees in the Panaewa area and accordingly approved
' Section 5(b) provides:
Except as provided in subsection (c) and (d) of this sec-
tion, the United States grants to the State of Hawaii, effec-
tive upon its admission into the Union, the United States’
title to all the public lands and other public property, 2nd to
all lands defined as ‘available lands” by section 203 of the
Hawaiian Homes Commission Act, 1920, as amended, within
the boundaries of the State of Hawaii, title to which is held
by the United States immediately prior to its admission into
the Union. The grant hereby made shall be in lieu of any and
all grants provided for new States by provisions of law other
than this Act, and such grants shall not extend to the State
of Hawaii.
2 Section 5(f) provides:
The lands granted to the State of Hawaii by subsection
(b) of this section and public lands retained by the United
[footnote continued]
27a
the project. On this basis, the Commission agreed to con-
vey the 12 acres of affected home lands to the County in
exchange for equivalent acregage of county land.
In January 1975, construction began on the proposed
flood-control project. Shortly thereafter the County de-
termined that the survey on which the project was based
was inaccurate and that as a result an additional 5.5 acres
of home lands would be required. It is now undisputed
States under subsections (c) and (d) and later conveyed to
the State under subsection (e), together with the proceeds
from the sale or other disposition of any such lands and the
income therefrom, shall be ‘held by said State as a public
trust for the support of the public schools and other public
educational 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 pos-
sible for the making of public improvements, and for the
provision 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 manner as the constitution
and laws of said State may provide, and their use for any
other object shall constitute a breach of trust for which suit
may be brought by the United States. The schools and other
educations institutions supported, in whole or in part out of
such public trust shall forever remain under the exclusive
control of said State; and no part of the proceeds or income
from the lands granted under this Act shall be used for the
support of any sectarian or denominational school, college,
or university.
This provision contains an ambiguity since it arguably pro-
vides that the Hawaiian home lands may be used for the same gen-
eral public purposes as other federal lands conveyed to Hawaii pur-
suant to the Admission Act. For purposes of this case, however,
we accept as true plaintiffs’ assertion that the home lands may
still lawfully be used only in the manner set forth in the Commis-
sion Act.
In 1954 Congress amended section 204(4) of the Commis-
sion Act to permit the Commission, under certain circumstances,
[footnote continued]
28a
that the entire project, if completed, will require approx-
imately 25.5 acres of Hawaiian home lands. It is also
undisputed that no lands have been exchanged in order to
compensate the Commission for the home lands used in
the project.
In July 1975, a group of native Hawaiians (plaintiffs)
brought this action against the Commission, the County,
and various individuals involved with the construction of
the Waiakea-Uka Project, seeking declaratory and injunc-
tive relief. The plaintiffs are all lessees of Hawaiian home
lands in the Panaewa area or are qualified applicants for
such leases.
Plaintiffs asserted five distinct claims each of which is
premised on either the Admission Act or the Commiss-
ion Act. First, plaintiffs claim that the Commission has
violated section 204(4) of the Commission Act by agree-
ing to exchange lands for a purpose other than those per-
mitted by the Act.* Second, plaintiffs claim that the
Commission has violated section 204(4) by permitting
the County to render home lands useless for their de-
signated purpose without first receiving title to lands
to exchange property within its jurisdiction for lands of equal
value. Section 204(4) reads in part:
The Commission may, with the approval of the Governor
and the Secretary of the Interior, in order to consolidate its
holdings or to better effectutate the purposes of this Act,
exchange the title to available lands for land, publicly owned,
of an equal value.
Act of June 18, 1954, ch. 319, 68 Stat. 262 (1954).
4 Section 204(4), by its terms, only permits land exchanges
designed “‘to consolidate [the Commission’s] holdings or to bet-
ter effectuate the pvrposes of th[e] Act ....’’ See note 3, supra.
Plaintiffs assert that an exchange of lands to make possible
the project, which is designed primarily to serve the City of Hilo,
furthers neither of the permissible goals.
29a
received in compensation. Third, plaintiffs claim that the
Commission violated section 204(4) by failing to obtain
the consent of the Governor and Secretary of Interior for
the proposed exchange. Fourth, plaintiffs allege that the
project is “illegal”? because it will consume twice the
amount of home lands originally approved by the
Commission.° Finally, plaintiffs claim that the Commis-
sion has violated fiduciary obligations imposed upon it by
sections 4 and 5 of the Admission Act.
The Commission moved to dismiss the action on the
ground that it does not “arise under the Constitution,
laws or treaties of the United States.” See 28 U.S.C. §
1331(a); U.S. Const. art III, § 2. The district judge denied
the motion and held that because both the Commission
Act and the Admission Act are federal statutes, federal
question jurisdiction would exist as to each claim.
In September 1976, the district judge granted plain-
tiffs’ motion for summary judgment on their second,
third, fourth and fifth claims. The district judge ordered
the Commission and the other defendants to ‘“‘complete a
land exchange as soon as reasonably possible in compli-
ance with § 204(4)” of the Commission Act. The defend-
ants were also enjoined from “‘using’’ the Waiakea-Uka
Flood Control Project until the district court had approved
a land exchange schedule.
On appeal, the Commission renews its jurisdictional
arguments and also attacks the merits of the district court’s
ruling. Because of the unique and substantial nature of
5 Plaintiffs’ general assertion that the project is ‘“‘illegal”
makes precise jurisdictional analysis very difficult. We think it
clear from the entire complaint, however, that this claim too was
premised on the Commission Act and the Admission Act. There-
fore, the “federal question’’ and ‘“‘cause of action” analysis in the
subsequent text are fully applicable to this claim.
30a
the jurisdictional questions, we requested the Department
of Justice to present its views as amicus curiae.
The problem which the parties and amicus have treated
under the general heading of jurisdiction really involves
two discrete issues: whether there exists (1) a private
cause of action, and (2) federal question jurisdiction. The
Supreme Court recently explained the distinct nature of
these separate inquiries in National Railroad Passenger
Corp. v. National Ass’n of Railroad Passengers, 414 U.S.
453, 94 S.Ct. 690, 38 L.Ed.2d 646 (1974) (Amtrak):
In this Court and in the Court of Appeals, the
parties have approached the question from several
perspectives. The issue has been variously stated to
be whether the Amtrak Act can be read to create a
private right of action to enforce compliance with
its provisions; whether a federal district court has
jurisdiction under the terms of the Act to entertain
such a suit; and whether the respondent has stand-
ing to bring such a suit.... [T]he threshold ques-
tion clearly is whether the Amtrak Act or any other
provision of law creates a cause of action whereby a
private party .. . can enforce duties and obligations
imposed by the Act; for it is only if such a right of
action exists that we need consider whether the
respondent had standing to bring the action and
whether the District Court has jurisdiction to enter-
tain it.
[T]he threshold question clearly is whether the
Amtrak Act or any other provision of law creates a
cause of action whereby a private part . . . can en-
force duties and obligations imposed by the Act;
for it is only if such a right of action exists that we
need consider whether the respondent had standing
to bring the action and whether the District Court
had jurisdiction to entertain it.
31a
Id. at 455-56, 94 S.Ct. at 692.
[1] Based upon Amtrak, therefore, our threshold in-
quiry is whether the Commission Act and the Admission
Act create private causes of action for enforcement of
their terms. Only if such a right of action exits need we
determine whether the district court had jurisdiction. We
hold that the Admission Aci does not provide a private
right of action and we therefore do not reach the jJurisdic-
tional issue as to the Admission Act claims. We do con-
sider this subsequent issue as regards the claims alleged to
arise under the Commission Act, but conclude that the
district court was without jurisdiction. We theretore
reverse.
I]
We turn first to plaintiffs’ claims which are based on
the trust language of sections 4 and 5 of the Admission
Act. Section 5 expressly provides that the improper use
of Hawaiian home lands “shall constitute a breach of
trust for which suit may be brought by the United States.”
The Act is silent, however, on the question of whether
suit may be brought by a private individual to enforce its
terms. Thus, the threshold question is squarely presented:
Does the Admission Act create an implied cause of action
by which a private party may enforce the duties and ob-
ligations imposed by the Act? The Supreme Court has
recently decided a series of cases which guide us to
the proper resolution of this question.
A
In Amtrak, supra, 414, U.S. 453, 94 S.Ct. 690, 38
L.Ed.2d 646, an association of railroad passengers challeng-
ed the discontinuance of certain passenger lines as viola.
tive of the Rail Passenger Service Act. In reaching its
32a
conclusion that the Act does not imply a private cause
of action of this type, the Court focused principally on
the fact that the Act specifically permits enforcement
suits by the Attorney General or, in cases involving a labor
agreement, by employees. It was argued that the authoriza-
tion of the public cause of action and the very narrow pri-
vate right of action “should not be read to preclude other
private casues of action for the enforcement of obliga-
tions imposed by the Act.” /d. at 457, 94 S.Ct. at 693.
Since the action was brought by the intended benefici-
aries of the Act, it was contended that the Court should
therefore imply a private cause of action in their favor.
The Court disagreed, reasoning
that when legislation expressly provides a particu-
lar remedy or remedies, court should not expand
the coverage of the statute to subsume other re-
medies. ‘When a statute limits a thing to be done
in a particular mode, it includes the negative of any
other mode.” This principle of statutory construc-
tion reflects an ancient maxim—expressio untus est
exclusto alterius. Since the Act creates a public
cause of action for the enforcement of its provi-
sions and a private cause of action only under very
limited circumstances, this maxim would clearly
compel the conclusion that the remedies created in
§ 307(a) are the exclusive means to enforce the
duties and obligations imposed by the Act.
Id. at 458, 94 S.Ct. at 693 (citation omitted).
[2] Although the Court carefully stated that the
expressio untus principle would “yield to clear contrary
evidence of legislative intent,” id. at 458,94 S.Ct. at 693,
Amtrak clearly indicates that in cases where a statute pro-
vides only for a public or very narrow private cause of
action, there is at least a rebuttable presumption that the
33a
legislature did not intend to grant a general, private en-
forcement cause of action. See Giraraier v. Webster
College, 563 F.2d 1267, 1276-77 (8th Cir. 1977); Olsen
v. Shell Oil Co., 561 F.2d 1178, 1184 n.5 (5th Cir. 1977),
Cannon v. University of Chicago, 559 F.2d 1063, 1074 &
n.14 (7th Cir. 1976), cert. granted, Ri cig VO D.C.
3142, 57 L.Ed.2d 1159 (1978); Goldman v. First Fed.
Savings & Loan, 518 F.2d 1247, 1250 n.6 (7th Cir. 1975);
Note, Implied Private Actions Under Federal Statutes
The Emergence of a Conservative Doctrine, 18 Wm. &
Mary L. Rev. 429, 438 (1976).
In addition to the expressto unius and legislative intent
criteria, the Court in Amtrak also stated that the implica-
tion of a private cause of action “must be consistent. . .
with the effectuation of the purposes intended to be
served by the Act.” Amtrak, supra, 414 U.S. at 458, 94
S.Ct. at 693.
In Securities Investor Protection Corp. v. Barbour, 421
U.S. 412, 95 S.Ct. 1733, 44 L.Ed.2d 263 (1975) (SIPC),
the Court reaffirmed the analysis it had recently adopted
in Amtrak. In SIPC, the Court framed the issue as whether
customers of a financially troubled securities broker
“have an implied private right of action under the Secur-
ities Investor Protection Act of 1970’ to compel the
Securities Investor Protection Corporation “to exer-
cise its statutory authority for their benefit.” Jd. at 413-
14,95 S.Ct. at 1735. The Act expressly provided for such
enforcement actions by the SEC.
The Court held that the Act did not imply a private
cause of action for enforcement of its terms. In reaching
its decision, the Court relied almost exclusively on
Amtrak. Most significantly, the Court reaffirmed that
the express provision for a public cause of action “‘ordi-
34a
narily implies that no other means of enforcement was
intended by the Legislature.” /d. at 419, 95 S.Ct. at
1738.
Reemphasizing the additional criteria it had used in
Amtrak, the Court also explained that the inference
drawn from the structure of the Act would yield to clear
extrinsic evidence that Congress intended a private cause
of action and that any implied right of action must be
compatible with the scheme and purpose of the Act. /d.
at 420-21,95 S.Ct. 1733.
In Cort v. Ash, 422 U.S. 66,95 S.Ct. 2080, 45 L.Ed.2d
26 (1975), the Court considered “whether a private cause
of action [was] to be implied in favor of a corporate
stockholder under 18 U.S.C. § 610, a criminal statute
prohibiting corporations from making ‘a contribution or
expenditure in connection with any election at which
Presidental and Vice Presidental Electors . . . are to be
voted for.’ ” Id. at 68, 95 S.Ct. at 2083. In concluding
that such a private right of action was not implied, the
Court identified four “factors” to be examined in deter-
mining whether implication of a private right of action
is appropriate.
First, is the plaintiff ‘tone of the class for whose
especial benetit the statute was enacted,” ...—that
is, does the statute create a federal right in favor
of the plaintiff? Second, is there any indication
of legislative intent, explicit or implicit, either to
create such a remedy or to deny one? See, e.g.,
National Railroad Passenger Corp. v. National Ass’n
of Railroad Passengers, 414 U.S. 453, 458, 460,
94 S.Ct. 690, 693, 694, 38 L.Ed.2d 646 (1974)
(Amtrak). Third, is it consistent with the under-
lying purposes of the legislative scheme to imply
such a remedy for the plaintiff? ... And finally,
35a
is the cause of action one traditionally relegated to
state law, in an area basically the concern of the
States, so that it would be inappropriate to infer a
cause of action solely on federal law?
Id. at 78,95 S.Ct. at 2088 (citations omitted).
This formulation is superficially in accord with Amtrak
and S/PC. The citation to Amtrak following the second
criterion suggests that the expressio unius inference is an
acceptable manner of ascertaining “implicit” legislative
intent. In a footnote, however, the Court left uncertain
the vitality of the expressto untus inference approved in
Amtrak and SIPC.
In Cort, it was argued that the Federal Election Cam-
paign Act of 1971 had created private remedies for
violations of its disclosure provisions and had amended
section 610 without providing a parallel private remedy.
Thus, it was contended, Amtrak required the inference of
legislative intent not to provide a remedy for section
610. The Court rejected this argument, distinguishing
Amtrak primarily on the ground that in Amtrak “there
was specific support in the legislative history of the
Amtrak Act for the proposition that the statutory reme-
dies were to be exclusive.”’ Jd. at 82-83 n.14,95 S.Ct. at
2090. Thus, Cort suggests that the expresto unius infer-
ence is only permissible when supported by legislative
history. This suggestion, however, apparently conflicts
with Amtrak’s teaching‘ that this inference is operative
unless contradicted by “clear contrary evidence of
legislative intent.”’ Amtrak, supra, 414 U.S. at 458, 94
S.Ct. at 693.
[3,4] Although Cort may be read as rejecting the
Amtrak approach, see Note, Implied Private Actions
Under Federal Statutes-The Emergence of a Conservative
Doctrine, 18 Wm. & Mary L.Rev. 429, 453 (1976), we
36a
believe Amtrak remains important for our analysis of the
case before us. First, the Court distinguished Amtrak
rather than reject it. Therefore, in cases which do not
share the same bases for distinction, Amtrak remains a
controlling precedent. Second, we are guided by the fact
that other circuits have continued after Cort to afford
some, albeit differing, weight to the Amtrak approach.
See Gtrardier v. Webster College, supra, 563 F.2d at 1276-
77 (where enforcement of statute is entrusted to Secre-
tary of HEW, “no private cause of action arises by in-
ference’); Olsen v. Shell Oil Co., supra, 561 F.2d at
1188 (Amtrak ‘“‘modiflied] . . . somewhat” by Cort).
In short, we agree with the conclusion of the Seventh
Circuit in Cannon v. University of Chicago, supra, 559
F.2d 1063.
The teaching of Amtrak, SIPC and Cort, supra, is
that a private cause of action should not be lightly
implied under a statuie where Congress has not
specifically provided one—especially where Congress
has provided for other means of enforcement.
Id. at 1074 (footnote omitted). Whatever the impact
of Cort may be, the Amtrak inference is at least one
factor which, in appropriate cases, may properly go into
the crucible for resolving the implication issue.
B
[5] The first of the Cort criteria is that the plain-
tiff must be a member of the “class for whose especial
6 Apparently, our court has employed the Cort test three
times in determining whether a certain statute implies a private
right of action. See Starbuck v. City & County of San Francisco,
556 F.2d 4506 (9th Cir. 1977); Kipperman v. Academy Life Ins.
Co., 554 F.2d 377 (9th Cir. 1977); Harmsen v. Smith, 542 F.2d
496 (9th Cir. 1976). In none of these case, however, were we
required to consider the impact of Cort on the Amtrak approach.
37a
benefit the statute was enacted ....’” 422 U.S. at 78,95
S.Ct. at 2088. Of course, the trust provision of section
5(f) of the Admission Act pertains to all public Hawai-
ian land and not just to the home lands. In that sense,
the provision does not benefit any class narrower than all
citizens of Hawai. It is clear, however, that the home
lands were to continue to be used for the benefit of
native Hawaiians as defined by the Commission Act.
Therefore, the trust provision, as applied to the home
lands, is intended especially to benefit native Hawaiians.
Since plaintiffs are clearly members of this group, the
first element of the Cort test is satisfied.
The second element of the Cort test, “explicit or
implicit’ legislative intent, cuts against implication
of a private cause of action here. Our review of the
legislative history of the Admission Act, see S.Rep.
No. 80, 86th Cong., Ist Sess., Appendix C (1959)
reprinted in [1959] U.S. Code Cong. & Admin. News,
pp. 1346, 1403, has not discovered any indication that
Congress intended to created a private cause of action via
the Admission Act nor has any such indication been
pointed out to us. Indeed, the rare references in the
Committee reports to enforcement of section 5’s trust
provisions refer exclusively to the public cause of action.
See, e.g., S.Rep. No. 1164, 85th Cong., Ist Sess. 14
(1957). This does not surprise us, however. It would be
unusual for Congress to employ a state’s admission act
to create private enforcement rights, and it is inconceiv-
able that Congress would intend to do so implicitly.
At this point, of course, the Amtrak presumption
enters our analysis. Although the uncertainties of the
Cort decision counsel against heavy reliance on_ this
presumption, as we explained above, it remains a
relevant factor in cases such as this. We think the particu-
38a
lar history of the Admission Act renders it most appro-
priate for application of the expressio unius presumption:
The first Hawaii statehood bill was introduced
in the 65th Congress in 1919. Hearings began 25
years ago with those on H.R. 3034, 74th Congress.
Since then, the House and Senate have held 22
additional hearings on the subject of statehood for
Hawaii. The record on the question comprises more
than 6,600 printed pages of testimony and exhibits.
More than 850 witnesses have been heard in the
Territory and in Washington. Seven of the hearings
have been held in Hawaii (1935, 1937, 1946, 1948,
1954, and 1958). In addition, at least 12 reports
have been made.
The question of admitting Hawaii to statehood
has been longer considered and more thoroughly
studied than any other statehood proposal that has
ever come before Congress. Thirty-seven States have
previously been admitted to the Union by action of
-Congress, yet in no single case has there been such
a thoroughly careful study of the qualifications of
the applicant as in the case of Hawaii.
S.Rep.No. 80, 86th Cong., Ist Sess. (1959), reprinted in
[1959] U.S.Code Cong. & Admin. News, pp. 1346-50.
[6] The expressio unius principle is based on a pre-
sumption that by providing a specific remedy, Congress
intended to exclude others. Reason dictates that the
more thoroughly a_bill is considered, the greater the
likelihood that the expressio unius presumption accurate-
ly reflects reality. Since in this case, the legislative meas-
ure was given protracted consideration, it is more likely
that the lack of an express private cause of action was in-
tentional. Given this consideration, and finding no con-
trary evidence, the express provision for the public cause
ee
39a
of action permits us, on authority of Amtrak and SIPC,
to infer that Congress did to intent to create a private
right of action.
[7,8] The third of the Cort elements is that an im-
plied cause of action must be consonant with the general
scheme and purposes of the statute. Although this is a
close question in this case, we think this criterion tends
to militate against implication. Clearly, the Admission
Act was intended to transfer complete ownership and
responsibility of the Commission Act program and the
home lands to Hawaii. Since, as this case demonstrates,
disputes pertaining to this program involve purely Ha-
walian officials, citizens, and lands, we see no federal
purpose to be served by reading a private cause of action
into the Admission Act. Absent a Federal constitutional
violation, we rely upon the laws and institutions of
Hawaii to protect its native citizens and assure the proper
use of state-owned lands, subject only to the public
enforcement right expressly contained in the Act.
Turning to the final Cort criterion, we easily conclude
that the cause of action at issue here is ‘‘one traditionally
relegated to state law, in an area basically the concern of
[Hawaii] ....” 422 U.S. at 78,95 S.Ct. at 2088. With
Hawaii’s admission into the Union, the national govern-
ment virtually relinquished its control over and interest
in the Hawaiian home lands. The problem described in
plaintiffs’ complaint is essentially a matter of state con-
cern. We deem it most appropriate for Hawaii’s laws
and judicial system to deal with it.
These factors concertedly and decidedly militate
against implication of the private enforcement cause oi
40a
action. Therefore, plaintiffs’ Admission Act claims must
be dismissed.’
Ill
Plaintiffs’ claims which are premised on the Commis-
sion Act raise the same problems as do their Admission
Act claims; the Commission Act similarly does not ex-
pressly provide for a private right of action to enforce its
terms. However, we choose not to confront this difficult
question because even assuming a private right of action,
a suit based upon the Commission Act claims faces a
’ Plaintiffs contend that, as native Hawaiians, they should
receive the benefit of cases that have allowed native Americans
(American Indians) a private federal right of action where the
United States, as trustee, could sue in federal district court to pro-
tect the native Americans’ rights with regard to trust lands. See,
e.g., Agua Caliente Band of Mission Indians v. County of River-
side, 442 F.2d 1184, 1186 (9th Cir. 1971), cert. denied, 405
U.S. 933, 92 S.Ct. 930, 30 L.Ed.2d 890 (1972). We developed
this “‘co-plaintiff”’ doctrine in reliance upon Poafpybitty v. Skelly
Oil Co., 390 U.S. 365, 366-72, 88 S.Ct. 982, 19 L.Ed.2d 1238
(1968), which held that “[a]n Indian, as the beneficial owner of
lands held by the United States in trust has a right acting independ-
ently of the United States to sue to protect his property interests.”
Agua Caliente Band of Mission Indians v. County of Riverside,
supra, 442 F.2d at 1186 (emphasis added) (footnote omitted).
The argument in favor of a private right of action in federal
court pursuant to the “‘co-plaintiff’’ doctrine is of less force in the
situation before us. The factual circumstances underlying the line
of cases establishing this doctrine generally involve native Ameri-
cans, as plaintiffs, suing a state or other entity to protect their
rights in trust property, where the United States is trustee of the
lands. In this case, however, the state is the trustee, the native
Hawaiians are attempting to sue the state for breach of the state’s
trust obligations, and the United States has the opportunity to sue
the state only on the basis of a right reserved by Congress in the
state’s Admission Act. The United States has only a somewhat
tangential supervisory role under the Admission Act, rather than
the role of trustee.
4la
discrete and equally lethal potential obstacle: federal
subject matter jurisdiction. We conclude that the district
court was without jurisdiction to hear these claims; we
therefore reverse.®
Plaintiffs argue that the district court had subject
matter jurisdiction over the Commission Act claims pur-
suant to 28 U.S.C. § 1331{a). Section 1331(a) provides
in part:
The district courts shall have original jurisdiction
of all civil actions wherein the matter in controversy
exceeds the sum or value of $10,000 ... and arises
under the Constitution, laws, or treaties of the
United States....
The crucial question here, of course, is whether plaintiffs’
Commission Act claims “‘arise under’? the laws of the
United States. :
The issue of whether or not a particular case arises
under federal law is perhaps “the most difficult single
problem in determining whether the federal jurisdiction
exists.” Smith v. Grimm, 534 F.2d 1346, 1350 (9th
Cir.), cert. dented, 429 U.S. 980, 97 S.Ct. 493, 50
L.Ed.2d 589 (1976), quoting C. Wright, A. Miller, &
E. Cooper, 13 Federal Practice & Procedure 397 (1975).
Although the Supreme Court has rendered several rele-
8 Although the Supreme Court in Amtrak did refer to the
implication issue as “the threshold question,’’ 414 U.S. at 456, 94
S.Ct. 690, we think it preferable to reach first the jurisdictional
issue with respect to the Commission Act claims. First, the jurisdic-
tional issue is also a threshold one in that it too must be satisfied
before we can proceed to the merits. More important, because we
are without jurisdiction, it would be unwise needlessly to express
an opinion on a difficult question—whether the Commission Act
implies a private right of action—which may ultimately be pre-
sented in the proper forum, a state court.
42a
vant decisions,’ these cases do not fit snugly into a single,
logical mosaic.
Beginning with Osborn v. Bank of United States, 22
U.S. (9 Wheat.) 738, 6 L.Ed. 204 (1824), the courts
have endeavored, from time to time, to develop an all-
encompassing rule to be applied to determine if a case
arises under federal law. Chief Justice Marshall looked to
whether the federal law is the “original ingredient” of the
action. Jd. at 824. Perhaps the next most famous was
Mr. Justice Holmes’ formulation that “[a] suit arises
under the law that creates the cause of action.’’ American
Well Works Co. v. Layne & Bowler Co., 241 U.S. 257,
260, 36 S.Ct. 585, 586, 60 L.Ed. 987 (1916).
None of the definitions found seem to have universal
application. Perhaps the most thoughtful distillation was
developed by Professor Paul Mishkin when he concluded
that original federal jurisdiction requires ‘‘a substantial
claim founded ‘directly’ upon federal law.”.. Mishkin, The
Federal “Question” in the District Courts, 53 Col.L. Rev.
157, 165, 168 (1953).
Fortunately, however, it is unnecessary for us to go
beyond the facts of this case. In Gully v. First Nat'l
Bank, 299 U.S. 109, 57 S.Ct. 96, 81 L.Ed. 70 (1936),
the Supreme Court comprehensively reviewed its prior
decisions and provided an analysis which is determinative
of the case before us.
In Gully, a state tax collector brought suit in state
court to collect a state tax levied against a national bank.
The bank removed the case to federal court. On appeal,
9See C. Wright, A. Miller & E. Cooper, 13 Federal Practice
and Procedure § 3562 (1975); Mishkin, The Federal “Question”
in the District Courts, 53 Col.L.Rev. 157 (1953); Cohen, The
Broken Compass: The Requirement That A Case Arise “Directly”
Under Federal Law, 115 U.Pa.L. Rev. 890 (1967).
43a
the Fifth Circuit upheld the district court’s assertion of
jurisdiction “upon the ground that the power to lay a
tax upon the shares of national banks has its origin and
measure in the provisions of a federal statute ....”” /d.
at 112, 57 S.Ct. at 97.
The Supreme Court reversed. Mr. Justice Cardozo,
writing for a unanimous court, analyzed the problem as
follows:
Not every question of federal law emerging in a
suit is proof that a federal law is the basis of the
suit. The tax here in controversy if valid as a tax at
all, was imposed under the authority of a statute of
Mississippi. The federal law did not attempt to
impose it or to confer upon the tax collector author-
ity to sue for it. True, the tax, though assessed
through the action of the state, must be consistent
with the federal statute consenting, subject to
restrictions, that such assessments may be made....
If there were no federal law permitting the taxation
of shares in national banks, a suit to recover such a
tax would not be one arising under the Constitution
of the United States, though the bank would have
the aid of the Constitution when it came to its
defense. That there zs a federal law permitting such
taxation does not change the basis of the suit, which
is still the statute of the state, though the federal
law is evidence to prove the statute valid.
. . . We recur to the test announced in Puerto
Rico v. Russell & Co., supra: ‘The federal nature
of the right to be established is decisive—not the
source of the authority to establish it.’’ Here the
right to be established is one created by the state.
If that is so, it is unimportant that federal consent is
the source of state authority. To reach the under-
lying law we do not travel back so far.
44a
Id. at 115-16, 57 S.Ct. at 99 (citations omitted).
In the case before us, plaintiffs argue that the Commis-
sion Act created the rights which they seek to vindicate
and, since the Act was never formally repealed by Con-
gress, these claims arise under a federal law. Although
this argument bears a degree of logical and technical
appeal, we think it ignores the practical realities of the
situation. Its adoption would require us to reject Mr.
Justice Cardozo’s counsel:
To define broadly and in the abstract ‘‘a case arising
under the Constitution or laws of the United States”
has hazards of a kindred order. What is needed is
something of that common-sense accommodation of
judgment to kaleidoscopic situations which charac-
terizes the law in its treatment of problems of
causation. One could carry the search for causes
backward, almost without end. ... Instead, there
has been a selective process which picks the substan-
tial causes out of the web and lays the other ones
aside. As in problems of causation, so here in the
search for the underlying law. If we follow the
ascent far enough, countless claims of right can be
discovered to have their source or their operative
limits in the provisions of a federal statute or in the
Constitution itself with its circumambient restric-
tions upon legislative power. To set bounds to the
pursuit, the courts have formulated the distinction
between controversies that are basic and those that
are collateral, between disputes that are necessary
and those that are merely possible. We shall be lost
in a maze if we put that compass by.!°
!0This statement has been criticized as an inadequate test so
long as the court will only look at the complaint in making its
determination. Chadbourn & Levin, Original Jurisdiction of
Federal Questions, 90 U.Pa.L. Rev. 639, 670-71 (1942).
45a
Id. at 117-18, 57 S.Ct. at 100 (citations omitted; em-
phasis added). We have followed Mr. Justice Cardozo’s
“common-sense”’ admonition. See League to Save Lake
Tahoe v. B.J.K. Corp., 547 F.2d 1072, 1074 (9th Cir.
1976).
[9-11] The Commission Act, as originally enacted,
created certain benefits for native Hawaiians. It is clear,
however, that for all practical purposes these benefits
have lost their federal nature. Upon admission of Hawaii
into the Union, the entire Commission Act program was
turned over to the State of Hawaii. The United States
conveyed its interest in the home lands (which are the
subject of the Commission Act) to the state and these
lands are now administered by state officials. The Com-
mission Aci itself was deleted from the United States
Code and, at Congress’ insistence, was adopted as a
permanent fixture of the state’s constitution. Thus, it is
undisputable that the Commission Act program together
with its. rights and duties are, for all practical purposes,
clements of Hawaiian law.!! In essence, this is an action
.*
'lWe acknowledge the argument that if the Commission Act
is still also federal law, there may exist two independent sources
for plaintiffs’ claims, one state and the other federal. There, the
argument goes, since plaintiffs may determine on which law they
base their claims, Bell v. Hood, 327 U.S. 678, 681, 66 S.Ct. 773,
90 L.Ed. 939 (1946), their reliance upon the federal statute
confers “federal question”’ jurisdiction.
It is clear, however, that even though a federal statute
expressly grants a specific right of action, the case will not neces-
sarily be deemed to arise under federal law if the resolution of the
case will depend wholly on issues of state law. Shoshone Mining
Co. v. Rutter, 177 U.S. 505, 20 S.Ct. 726, 44 L.Ed. 864 (1900).
In addition, even assuming that plaintiffs’ claims have a federal
source, it is the state nature of the claims which, as we explain in
the text, resolves the jurisdictional issue. if we were to hold that
the Commission Act claims arise under federal law solely because
[footnote continued]
46a
brought against state officers to compel them to adminis-
ter state lands in conformance with the state constitution.
These facts make it clear that the rights plaintiffs seek to
vindicate are state rights by nature. Even though the
historical source of these rights was a federal statute, it
is the clear state nature of the rights which governs our
decision. Gully v. First Nat’l Bank, supra, 299 U.S. at
114, 116, 57 S.Ct. 96, 81 L.Ed. 70; Puerto Rico v.
Russell & Co., 288 U.S. 476, 483, 53 S.Ct. 447, 77 L.Ed.
903 (1933); Shoshone Mining Co. v. Rutter, 177 US.
505, 20 S.Ct. 726, 44 L.Ed. 864 (1900). We therefore
conclude that the Commission Act claims do not arise
under federal law.
Thus, we hold that plaintiffs’ claims which are based
on the Hawaii Admission Act must be dismissed on the
ground that the Act does not provide an implied indi-
vidual cause of action. This is a dismissal on the merits.
Bell v. Hood, 327 U.S. 678, 682, 66 S.Ct. 773,90 L.Ed
939 (1946). Plaintiffs’ claims which are based on the
Commission Act must be dismissed for lack of federal
subject matter jurisdiction. !?
REVERSED.
of their origin in a federal statute in spite of the otherwise wholly
state nature of this dispute, we surely would have “put [the]
compass by.” Gully v. First Nat'l Bank, supra, 229 U.S. at 118,
57 S.Ct. 96.
12Section 4 of the Admission Act provides in part:
As a compact with the United States relating to the
management and disposition of the Hawaiian home lands, the
Hawaiian Homes Commission Act, 1920, as amended, shail
be adopted as a provision of the Constitution of said State
. . Subject to amendment or repeal only with the consent of
the United States, and in no other manner ....
[footnote continued]
47a
From this language, plaintiffs argue that the Commission Act
is now ‘‘the substance of a compact between the United States and
the State of Hawaii.’”’ Therefore, argue plaintiffs, an action charging
a breach of the Commission Act arises under federal law. League
to Save Lake Tahoe v. Tahoe Regional Planning Agency, 507 F.2d
517 (9th Cir. 1974), cert. denied, 420 U.S. 974, 95 S.Ct. 1398, 43
L.Ed. 2d 654 (1975). We disagree.
This language from section 4 clearly indicates that the
substance of the compact was Hawaii’s agreement to adopt the
Commission Act as a provision of its constitution and not to
amend the Act without the consent of Congress. We do not agree
that this language is sufficient to incorporate the substance of the
Commission Act itself as a federal-state compact.
48a
APPENDIX E
HAWAIIAN HOMES COMMISSION ACT, 1920
(Act of July 9, 1921, c 42, 42 Stat 108)
§202. Department officers, staff, commission; mem-
bers, compensation. (a) There shall be a department of
Hawaiian home lands which shall be headed by an execu-
tive board to be known as the Hawaiian homes commission.
The members of the commission shall be nominated and
appointed in accordance with section 26-34, Hawaii
Revised Statutes. The commission shall be compesed of
seven members, four of whom shall be residents of the
city and county of Honolulu; of the remaining members,
one shall be a resident of the county of Hawaii, one a re-
sident of the county of Maui, and one a resident of the
county of Kauai. All members shall have been residents
of the State at least three years prior to their appointment
and at least four of the members shall be descendants of
not less than one-fourth part of the blood of the races
inhabiting the Hawaiian islands previous to 1778. The
members of the commission shall serve without pay, but
shall receive actual expenses incurred by them in .the
discharge of their duties as such members. The governor
shall appoint the chairman of the commission from among
the members thereof.
The commission may delegate to the chairman, such
duties, powers, and authority or so much thereof, as may
be lawful or proper for the performance of the functions
vested in the commission. The chairman of the com- |
mission shall serve in a full-time capacity. He shall, in
such capacity, perform such duties, and exercise such
powers and authority, or so much thereof, as may be
delegated to him by the commission as herein provided
above.
Se Se ha, ee
ies
6 tN NIT hetae > LORY RE Fc PEA Nie
49a
(b) The provisions of section 76-16(0) Hawaii Revised
Statutes, shall apply to the positions of the first deputy
and private secretary to the chairman of the commission.
All other positions in the department shall be subject to
the provisions of chapters 76 and 77, Hawaii Revised
Statutes, and employees having tenure, according to the
employment practices of the department, immediately
prior to [June 20, 1963] and occupying positions in
accordance with the state’s position classifications and
compensation plans shall be given permanent appoint-
ment status under chapter 76 without a reduction in pay
or the loss of seniority, prior service credit, vacation or
sick leave earned heretofore. An employee with tenure
who does not occupy a position under chapters 76 and
77 shall be appointed to the position after it has been
classified and assigned to an appropriate salary range by
the director of personnel services and such employee shall
not suffer a reduction in pay or loss of seniority and other
credits earned heretofore.
All vacancies and new positions which are covered by
the provisions of chapters 76 and 77, Hawaii Revised
Statutes, shall be filled in accordance with the provisions
of sections 76-23 and 76-31, Hawaii Revised Statutes,
provided that the provisions of these sections shall be
applicable first to qualified persons of Hawaiian extrac-
tion. (Am Jul. 26, 1935, c 420, §1, 49 Stat 504; May 31,
1944, c 216, §1, 58 Stat 260; Jul. 1, 1952, c 618, 66 Stat
515, am L 1963, c 207, §1; am imp L 1965, c 223, §§5,
8]
§ 204. [Control by department of “available lands’’;
return to board of land and natural resources, when.]|
Upon the passage of this Act, all available lands shall
immediately assume the status of Hawaiian home lands
and be under the control of the department to be used
50a
and disposed of in accordance with the provisions of this
title, except that:
(1) In case any available land is under lease by the
Territory of Hawaii, by virtue of section 73 of the
Hawaiian Organic Act, at the time of the passage of this
Act, such land shall not assume the status of Hawaiian
home lands until the lease expires or the board of land
and natural resources withdraws the lands from the oper-
ation of the lease. If the land is covered by a lease con-
taining a withdrawal clause, as provided in subdivision
(d) of section 73 of the Hawaiian Organic Act, the board
of land and natural resources shall withdraw such lands
from the operation of the lease whenever the department,
with the approval of the Secretary of the Interior, gives
notice to it that the department is of the opinion that
the lands are required by it for the purposes of this title;
and such withdrawal shall be held to be for a public
purpose within the meaning of that term as used in sub-
vision (d) of section 73 of the Hawaiian Organic Act;
(2) Any available land, including land selected by the
department out of a larger area, as provided by this Act,
as may not be immediately needed for the purposes of
this Act, may be returned to the board of land and natural
resources and may be leased by it as provided in chapter
171, Hawaii Revised Statutes, or may be retained for
management by the department.
Any lease by the board of land and natural resources
of Hawaiian home lands hereafter entered into shall con-
tain a withdrawal clause, and the lands so leased shall be
withdrawn by the board of land and natural resources,
for the purpose of this Act, upon the department giving
at its option, not less than one nor more than five years’
notice of such withdrawal; provided, that the minimum
5la
withdrawal-notice period shall be specifically stated in
such lease.
In the management of any retained available lands not
required for leasing under section 207(a), the department
may dispose of such lands by lease or license to the general
public, including native Hawaiians, on the same terms,
conditions, restrictions and uses applicable to the dispo-
sition of public lands as provided in chapter 171; provided,
that the department may not sell such lands in fee simple
except as authorized under section 205 of this Act.
(3) The department shall not lease, use, nor dispose
of more than twenty thousand (20,000) acres of the area
of Hawaiian home lands, for settlement by native Hawa-
lians, in any calendar five-year period.
(4) The department may, with the approval of the
governor and the Secretary of the Interior, in order to
consolidate its holdings or to better effectuate the pur-
poses of this Act, exchange the title to available lands for
land, publicly owned, of an equal value. All land so ac-
quired by the department shall assume the status of avail-
able lands as though the same were originally designated
as such under section 203 hereof, and all lands so con-
veyed by the department shall assume the status of the
land for which it was exchanged. The limitations imposed
by section 73 (1) of the Hawaiian Organic Act and the
land laws of Hawaii as to the area and value of land that
may be conveyed by way of exchange shall not apply to
exchanges made pursuant hereto. No such exchange shall
be made without the approval and of two-thirds of the
members of the board of land and natural resources.
[Am Mar. 27, 1928, c 142, §1, 45 Stat 246; Jul. 10,
1937, c 482, 50 Stat 503; Feb. 20, 1954, c 10, §1, 68
Stat 16; June 18, 1954, c 319, §1, 68 Stat 262; am L
1963, c 207, § §2, 5(b); am L 1965, c 271, §1].
52a
§205 [Sale or lease, limitations on.] Available
lands shall be sold or leased only (1) in the manner and
for the purposes set out in this title, or (2) as may be
necessary to complete any valid agreement of sale or
lease in effect at the time of the passage of this Act; ex-
cept that such limitations shall not apply to the un-
selected portions of lands from which the department has
made a selection and given notice thereof, or failed so to
select and give notice Withim the time limit, as provided,
in paragraph (3) of section 204 of this title. [Am L 1963,
c 207, §2]
§206. [Other officers not to control Hawaiian home
lands; exception.] The powers and duties of the governor
and the board of land and natural resources, in respect to
lands of the State, shall not extend to lands having the
status of Hawaiian home lands, except as specifically pro-
vided in this title. [Am L 1963, c 207, §5 (a) (b)]
§207. [Leases to Hawaiians, licenses.] (a) The depart-
ment is authorized to lease to native Hawaiians the right
to the use and occupancy of a tract or tracts of Hawaiian
home lands within the following acreage limits per each
lessee: (1) not less than one nor more than forty acres of
agricultural lands; or (2) not less than one hundred nor
more than five hundred acres of first-class pastoral lands;
or (3) not less than two hundred and fifty nor more than
one thousand acres of second-ciass pastoral lands; or (4)
not less than forty nor more than one hundred acres of
irrigated pastoral lands; (5) not more than one acre of
any class of land to be used as residence lot: provided,
however, that in the case of any existing lease of a farm
lot in the Kalanianaole Settlement on Molokai, a resi-
dence lot may exceed one acre but shall not exceed four
acres in area, the location of such area to be selected by
the lessee concerned: provided further, that a lease granted
53a
to any lessee may include two detached farm lots located
on the same island and within a reasonable distance of
each other, one of which, to be designated by the depart-
ment, shall be occupied by the lessee as his home, the
gross acreage of both lots not to exceed the maximum
acreage of an agricultural or pastoral lot, as the case may
be, as provided in this section.
(b) The title to lands so leased shall remain in the
[State]. Applications for tracts shall be made to and
granted by the department, under such regulations, not in
conflict with any provisions of this title, as the department
may prescribe. The department shall, whenever tracts are
available, enter into such a lease with any applicant who,
in the opinion of the department, is qualified to perform
the conditions of such lease.
(c) (1) The department is authorized to grant licenses
for terms of not to exceed twenty-one years in each case,
to public utility companies or corporations as easements
for railroads, telephone lines, electric power and light
lines, gas mains, and the like. The department is also
authorized to grant licenses for lots within a district in
which lands are leased under the provisions of this section,
to-
(A) churches, hospitals, public schools, post offices,
and other improvements for public purposes;
(B) theatres, garages, service stations, markets, stores,
and other mercantile establishments (all of which shall be
owned by lessees of the department or by organizations
formed and controlled by said lessees).
(2) The department is also authorized, with the
approval of the governor, to grant licenses to the United
States for terms not to exceed five years, for reservations,
roads, and other rights-of-way, water storage and dis-
54a
tribution facilities, and practice target ranges: provided,
that any such license may be extended from time to time
by the department, with the approval of the governor, for
additional terms of three years: provided further, that
any such license shall not restrict the areas required by
the department in carrying on its duties, nor interfere in
any way with the department’s operation on maintenance
activities. [Am Feb.-3, 1923, c 56, §1, 42 Stat 1222:
May 16, 1934, c 290, §2, 48 Stat 779 Jul. 10, 1937, c
482, 50 Stat 504; May 31, 1944, c 216, §§3, 4, 58 Stat
264; Jun. 14, 1948, c 464, §§1, 2, 62 Stat 390, Jun.
18, 1954, c 321, §1, 68 Stat 263; Aug. 23, 1958, Pub L
85-733, 72 Stat 822, am L 1963, c 207, §2]
THE ADMISSION ACT
An Act to Provide for the Admission of the State of
Hawaii into the Union
(Act of March 18, 1959, Pub L 86-3, 73 Stat 4)
§4. As a compact with the United States relating
to the management and dispostion of the Hawaiian home
lands, the Hawaiian Homes Commission Act, 1920, as
amended, shall be adopted as a provision of the Constitu-
tion of said State, as provided in section 7, subsection (b)
of this Act, subject to amendment or repeal only with the
consent of the United States, and in no other manner:
Provided, that (1) sections 202, 213,219, 220, 222, 224
and 225 and other provisions relating to administration,
\and paragraph (2) of section 204, sections 206 and 212,
and paragraph (2) of section 204, sections 206 and 212,
and other provisions relating to the powers and duties of
officers other than those charged with the administration
of said Act, may be amended in the constitution, or in
the manner required for State legislation, but the Hawai-
55a
ian home-loan fund, the Hawaiian home-operating fund,
and the Hawaiian home-development fund shall not be
reduced nor impaired by any such amendment, whether
made in the constitution or in the manner required for
State legislation, but the Hawaiian home-loan fund, the
Hawaiian home-operating fund, and the Hawaiian home-
development fund shall not be reduced or impaired by
any such amendment, whether made in the constitution
or in the manner required for State legislation, and the
encumbrances authorized to be placed on Hawaiian home
lands by officers other than those charged with the ad-
ministration of said Act, shall not be increased, except
with the consent of the United States; (2) that any
amendment to increase the benefits to lessees of Hawaii-
an home lands may be made in the constitution, or in
the manner required for State legislation, but the qualifi-
cations of lessees shall not be changed except with the
consent of the United States; and (3) that all proceeds
and income from the “‘available lands,’ and defined by
said Act, shall be used only in carrying out the provisions
of said Act.
§5. (b) Except as provided in subsection (c) and (d)
of this section, the United States grants to the State of
Hawaii, effective upon its admission into the Union, the
United States’ title to all the public lands and other
public property, and to all lands defined as “available
lands” by section 203 of the Hawaiian Homes Commission
Act, 1920, as amended, within the boundaries of the
State of Hawaii, title to which is held by the United States
immediately prior to its admission into the Union. The
grant hereby made shall be in lieu of any and all grants
provided for new States by provisions of law other than
this Act, and such grants shall not extend to the State
of Hawaii.
56a
(f) The lands granted to the State of Hawaii by sub-
section (b) of this section and public lands retained by
the United States under subsections (c) and (d) and later
conveyed to the State under subsection (e), together with
the proceeds from the sale or other disposition of any
such lands and the income therefrom, shall be held by
said State as a public trust for the support of the public
schools and other public educational institutions, for the
betterment of the conditions 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 provision 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 manner as the constitution
and laws of said State may provide, and their use for any
other object shall constitute a breach of trust for which
suit may be brought by the United States. The schoois
and other educational institutions supported, in whole or
in part out of such public trust shall forever remain under
the exclusive control of said State; and no part of the
proceeds or income from the lands granted under this
Act shall be used for the support of any sectarian or
denominational school, college, or university.
(h) All laws of the United States reserving to the
United States the free use or enjoyment of property which
vests in or is conveyed to the State of Hawaii or its polit-
ical subdivisions pursuant to subsection (a), (b), or (e) of
this section or reserving the right to alter, amend, or re-
peal laws relating thereto shall cease to be effective upon
the admission of the state of Hawaii into the Union.
57a
28 U.S.C. § 1331. Federal question; amount in con-
troversy; costs
(a) The district courts shall have original jurisdiction
of all civil actions wherein the matter in controvesy ex-
ceeds the sum or value of $10,000, exclusive of interest
and costs, and arises under the Constitution, laws, or
treaties of the United States except that no such sum or
value shall be required in any such action brought against
the United States, any agency thereof, or any officer or
employee thereof in his official capacity.
(b) Except when express provision therefor is other-
wise made in a statute of the United States, where the
plaintiff is finally adjudged to be entitled to recover less
than the sum or value of $10,000, computed without re-
gard to any setoff or counterclaim to which the defendant
may be adjudged to be entitled, and exclusive of interests
and costs, the district court may deny costs to the plain-
tiff and, in addition, may impose costs on the plaintiff.
As amended Oct 21, 1976, Pub. L. 94-574, § 2, 90,
Stat. 2721.
58a
APPENDIX F
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF HAWAII
Civil No. 74-12
GEORGIANA K. KILA,
Individually and on behalf of all persons
similarly situated,
Plaintiff,
HARRIET AU HOON,
Intervenor,
HAWAIIAN HOMES COMMISSION, and
WILLIAM G. AMONG, in his capacity as
Chairman of the Hawaiian Homes Commission,
Defendants.
DECISION ON PLAINTIFF’S AND DEFENDANTS’
MOTIONS FOR SUMMARY JUDGMENT
Plaintiff, Georgiana K. Kila, and Intervenor, Harriet
Au Hoon, bring this action for damages and injunctive
and declarative relief against the Hawaiian Homes Com-
mission and its Chairman, William C. Among, in his offi-
cial capacity. Both plaintiff and intervenor presently
‘lease land from the Hawaiian Homes Commission and
have secured $17,500.00 and $18,000.00 loans, respect-
ively, from the Hawaiian home loan fund, Hawaiian
Homes Commission Act (hereinafter HHCA) § 213(b)
59a
(6).! Each of their loan contracts contains a convenant
obligating them to pay 7.5% interest per annum on the
unpaid principal. After obtaining the loans, plaintiff and
intervenor both apparently fell behind in their payments
and were given notice by the Hawaiian Homes Commis-
sion that hearings would be held to determine whether
or not delinquencies existed and if they did, whether or
not their leases should be cancelled. It appears from the
record that Kila was never. afforded a hearing but that
Hoon was given a hearing, found to be delinquent and
ordered to pay the overdue amounts pursuant to a sched-
ula established by the Commission.
In Count I of her complaint, plaintiff seeks a declara-
tion that the 7.5% interest rate which she is currently
being charged on her loan is unlawful since it is author-
ized by an unlawful amendment to the HHCA whereby,
in 1965, the Hawaii State Legislature added thereto §213
(b)(5)? without the consent of the United States and in
16) The department may borrow and deposit into the spec-
ial revolving account for the purposes of repairing or maintaining
or purchasing or erecting or improving dwellings on Hawaiian home
lands and non-Hawaiian home lands and related purposes as pro-
vided for in the second paragraph of (8) hereinafter, from financial
institutions, governmental or private, and if necessary in connec-
tion therewith, to pledge, secure or otherwise guarantee the
repayment of moneys borrowed with all or a portion of the esti-
mated sums of Additional Receipts for the next ensuing ten years
from the date of borrowing, less any portion thereof previously en-
cumbered for similar purposes;
2 (5) The department shall establish interest rate or rates at
two and one-half per cent a year or higher, in connection with
authorized loans on Hawaiian home lands or non-Hawaiian home
lands, and where the going rate of interest on moneys borrowed
by the department under (6) immediately following or loans made
by financial institutions to native Hawaiians is higher, pay from the
special revolving fund from either the Additional Receipts-Loan
Fund Portion or the moneys borrowed, the difference in interest
rates;
.
+
60a
conflict with §215(2)? of the Act. She therefore asks
for a refund of overpayments and a reformation of her
loan contract. Plaintiff Kila’s motion for partial sum-
mary judgment as to Count I is now before the court for
decision.
JURISDICTION
Plaintiff alleges that this court has jurisdiction over the
subject matter of her action under 28 U.S.C. 1331.
There being no question in regard to the jurisdictional
amount in this case, the sole issue is whether or not plain-
tiff’s action “arises under’’ the laws of the United States.
The essence of plaintiff’s case is that the State’s amend-
ment of HHCA §213(b) by adding subsection (5) vio-
lated §4 of the Admissions Act, Act of March 18, 1959,
Pub. L. 86-3, §4, 73 Stat. 4,* since the prior consent of
3(9) The loans shall be repaid in periodic installments, such
installments to be monthly, quarterly, semi-annual, or annual as
may be determined by the department in each case. The term of
any loan shall not exceed thirty years. Payments of any sum in
addition to the required installments, or payment of the entire
amount of the loan, may be made at any time within the term of
the loan. All unpaid balances of principal shall bear interest at the
rate of two and one-half per cent a year payable periodically or
upon demand by the department, as the department may deter-
mine. The payment of any installment due shall be postponed in
whole or in part by the department for such reasons as it deems
good and sufficient and until such later date as it deems advisable.
Such postponement payments shall continue to bear interest at the
rate of two and one-half per cent a year on the unpaid principal.
fas a compact with the United States relating to the man-
agement and disposition of the Hawaiian home lands, the Hawaii-
an Homes Commission Act, 1920, as amended, shall be adopted as
a provision of the Constitution of [this] State, as provided in Sec-
tion 7, subsection (b) of [the Admission Act], subject to amend-
ment or repeal only with the consent of the United States, and in
no other manner. Provided, That (1) sections 202, 213, 219, 220,
[footnote continued]
6la
the United States was not obtained. Plaintiff urges that
her action, therefore, “arises under’’ a law of the United
States, viv., the Admissions Act.
To arise under a federal law, an action must be based
essentially on a right created by that law; the validity of
the asserted right must rest primarily on the construction
or effect given to the federal law. Wheeldin v. Wheeler,
373 U.S. 647 (1963); Gully v. First National Bank, 299
U.S. 109 (1936); Smith v. Kansas City Title & Trust Co.,
255 U.S. 180 (1921). Here, therefore, plaintiff's success
or failure depends substantially on this court’s interpre-
tation of that portion of the Admissions Act which estab-
lishes the circumstances in which the HHCA may be
amended without the consent of the United States. This
court, therefore, has oginal jurisdiction of this case
under 28 U.S.C. 1331.5 Whatever residual state law
222, 224, and 225 and other provisions relating to administration,
and paragraph (2) of section204, sections 206 and 212, and other
provisions relating to the powers and duties of officers other than
those charged with the administration of said Act, may be
amended in the constitution, or in the manner required for State
legislation, but the Hawaiian home-loan fund, the Hawaiian home-
operating fund, and the Hawaiian home-development fund shall
not be reduced or impaired by any such amendment, whether
made in the constitution or in the manner required for State legis-
lation, and the encumbrances authorized to be placed on Hawaiian
home lands by officers other than those charged with the adminis-
tration of said Act, shall not be increased, except with the consent
of the United States; (2) that any amendment to increase the bene-
fits to lessees of Hawaiian home lands may be made in the constitu-
tion, or in the manner required by State legislation, but the quali-
fications of lessees shall not be changed except with the consent of
the United States; and (3) that all proceeds and income from the
“available lands’’, as defined by said Act, shall be used only in car-
rying out the provisions of said Act.
See, Haire v. Rice, 204 U.S. 291 (1906); Doucette v. Vin-
cent, 194 F.2d 834, 846 (Ist Cir. 1952); United States v. Fenton.
. [footnote continued]
62a
issues which might exist because of the ambiguous nature
of the HHCA would fall within the pendent jurisdiction
of this court. United Mine Workers of America v. Gibbs,
383 U.S. 715 (1966).
The HHCA was enacted by the United States Congress
in 1921. Act of July 9, 1921, ch. 42, 42 Stat. 108. In
the Act Congress set aside certain public lands in Hawaii
to be used to provide for the welfare and rehabilitation of
native Hawaiians. Until Hawaii’s admission into the
Union as a state in 1959, the Act was codified in 48
U.S.C. 691 et seq. Upon Hawaii’s admission the Act
acquired a unique, hybrid character. It was omitted from
Title 48 since “the scope of this title limits it to general
and permanent laws applicable to Territories and Insular
Possessions, and Hawaii was admitted to the Union as a
state on August 21, 1959.” 48 U.S.C. §§491-724
(1970). The omission of the Act from Title 48 makes
suspect its status as a federal law. In §4 of the Admis-
sions Act, the act admitting Hawaii to the Union as a
state, however, Congress compacted with the State that
the Hawaiian Homes Commission Act, 1920, as amended,
must be adopted as a provision of the State Constitution.
The Act was therefore adopted as a law of the State of
Hawaii in the State Constitution as Art. XI, §§1, 2.
The HHCA, 1920, thus now appears to be a Federal law,
a State law, and also the substance of a compact between
the United States and the State of Hawaii.
Both the Admissions Act and the State Constitution .
delineate the methods by which the HHCA may be
amended.® Certain provisions of the Act relating to
27 F.Supp. 816 (S.D. Idaho 1939). But cf., Kennard v. Nebraska,
186 U.S. 304 (1901); Jones v. Brush, 143 F.2d 733 (9th Cir.
1944); Cranston v. Aronson, 124 F.Supp. 453 (D. Mont, 1953).
6 Act of March 18, 1959, Pub. L. 86-3, §4, 73 Stat. 4; Hawaii
Const. art. XI, §3.
63a
administration, duties of non-administrative officials, and
the increase of benefits to lessees (native Hawaiians) may
be amended “in the constitution, or in the manner
required for State legislation . .. .” Generally speaking,
all other provisions may be amended only with the con-
sent of the United States.’
At the time of Hawaii’s admission to the Union as a
state, HHCA §213(a) then 48 U.S.C. 707(a) “‘established
in the treasury of the Territory two revolving funds to be
known as the Hawaiian home-loan fund and the Hawaiian
home-operating fund, and two special funds to be known
as the Hawaiian home-development fund and the Hawaii-
an home-administration account.’’ The Hawaiian home-
loan fund, HHCA §213(b), then consisted primarily of
up to $5,000,000.00, to be derived from the Territory’s
lease receipts paid to the Territory by lessees of culti-
vated sugar-cane lands. From this fund loans were to be
made available to lessees for purposes including “[t] he
erection of dwellings ....”” HHCA §214, 48 U.S.C. 708.
7§. Rep. No. 80, 86th Cong., Ist Sess. (1959), in which the
Senate approved admitting Hawaii to the Union as a State, anal-
yzed §4 of the Admissions Act as follows:
Section 4 requires the State of Hawaii to adopt the Hawaiian
Homes Commission Act, 1920, as a provision of its constitution
and provides that it shall not be changed in its basic provisions
except with the consent of the United States. Article XI of the
constitution of Hawaii conforms to this requirement. The Hawaii-
an Homes Commission Act is a law which set aside certain lands in
order to provide for the welfare of native Hawaiians. While the
new State will be able to make changes in the administration of the
act without the consent of Congress, it will not be authorized,
without such consent, to impair by legislation or constitutional
amendment the funds set up by under it or to disturb in other
ways its substantive provisions to the detriment of the intended
beneficiaries. 2 U.S. Code Cong. & Ad. News 1346, 1361 (1959).
64a
The affidavit of defendant Among indicates that
. In early 1964, the maximum authorized amount
{$5,000,000.00] of the Hawaiian Home-loan Fund was
reached ....’’ In 1965, the State Legislature recognized
that “‘[i]n the past there has been a-continued scarcity
of funds available to support worthwhile home loans”’
and it amended §213(b) by providing “‘additional bene-
fits .. . so long as . .. the department is unable to gener-
ate from its own lands the kinds of income necessary to
finance the vigorous kinds of rehabilitation measures
included in these proposed amendments ....” H.R.
Stand, Comm. Rep. No. 184, Hawaii H.R.J. 576, 577
(1965). The additional benefits provided in the amend-
ment included (in §213(b) subsection (6) which allowed
the department to augment the basi¢ $5,000,000.00
Hawaiian home-loan fund by borrowing from govern-
mental financial institutions and depositing the funds
into a special revolving account of the loan fund for the
purpose of purchasing, erecting or improving dwellings on
Hawaiian home lands. Kila’s loan came from funds which
had been borrowed from the Hawaii Housing Authority
and deposited in the special revolving fund created by
subsection (6).°
The department,’ pursuant to its rule-making power
established in HHCA §222 and §4 of the 1965 Amend-
ment to HHCA §213(b), promulgated section 11.05 of
the department’s rules and regulations which provides:
The Department may borrow funds from other
sources to make loans available to qualified appli-
8See Law of July 14, 1969, ch. 239, §1 (A) (now HLR.S.
§359G-10.1 (Supp. 1973).
°The “‘department”’ is the “department of Hawaiian home
lands [which is] headed by an executive board known as the
Hawaiian homes commission . . . ."” HHCA § 202(a).
65a
cants and homesteaders to build, replace or pur-
chase homes on or off Hawaiian home lands.
Hawau Housing Authority: The Department
shall make available to qualified Hawaiians
loans from monies loaned to the Department by
Hawaii Housing Authority. Such loans may be
made from construction of homes for lessees on
Hawaiian home lands only. Such loans shall
bear the same interest rate charged by Hawaii
Housing Authority to the Department and shall
not be governed by the restrictions as to interest
rates set forth in the Hawaiian Homes Commis-
sion Act. Applicants need only qualify as to
blood and have a homestead lease to apply for
such loans and are not restricted to any income
level.
Retirement System: The Department may make
loans to applicants on non-Hawaiian home lands
who qualify as native Hawaiians as that term is
used in the Act. Such loans shall be made with
monies borrowed from the State Retirement Sys-
tem and other lending institutions and the inter-
est charged to borrowers shall be the same inter-
est as that paid by the Department to the lender.
Pursuant to section 11.05 of its rules, the department
exacted the same 7.5% interest rate from Kila as it was
obligated to pay to the Hawaii Housing Authority.
Plaintiff’s first argument is that the interest rates are
substantive conditions in loan contracts, that they are
not administrative in nature and, therefore, may not be
the subject of legislative amendment without the consent
of the United States. Therefore, plaintiff urges, the 7.5%
interest rate is unlawful. Presupposing that interest rates
are substantive conditions cf loan contracts under the
Act, not all substantive, non-administrative amendments
66a
to the HHCA, however, require the consent of Congress;
both the Admissions Act and the Hawaii Constitution
provide:
(2) that any amendment to increase the benefits to
lessees of Hawaiian home lands may be made in con-
stitution, or in the manner required for State legisla-
tion, but the qualifications of lessees shall not be
changed except with the consent of the United
States;....!°
Notwithstanding the fact the 7.5% interest rate is
higher than the 2.5% mandated by HHCA §215(2), this
court holds that the 1965 amendment, clearly intending
to make available to the native Hawaiians for homes,
monies not otherwise obtainable, can only rationally be
construed as a whole, severable from the basic HHCA.
Thus, §213(5) and (6) together with section 11.05 of the
department’s rules constitute a separable and unified pro-
cedure by which benefits to lessees, such as the plaintiff,
might be increased; therefore, the 1965 amendment to
§213(b) need not have been consented to by the United
States.
Plaintiff’s second argument is one based on the con-
struction of the HHCA. Plaintiff contends that §213(5)
violates §215(2) and is therefore null and void. Section
215(2) provides in part that ‘‘All unpaid balances of prin-
cipal shall bear interest at the rate of two and one-half
per cent a year payable periodically or upon demand by
the department, as the department may determine.”” The
2.5% rate was established by Congress in 1952. Act of
10 act of March 18, 1959, Pub. L. 86-3, §4, 73 Stat. 4;
Hawaii Constitution, art XI, §3.
67a
July 9, 1952, ch. 615, §4, 66 Stat. 514. Until 1965, this
was the only interest rate applicable to borrowers from
the Hawaiian home-loan fund. However, as noted earlier,
before 1965 the Hawaiian home-loan fund consisted,
basically, of the $5,000,000.00 authorized by the Act of
july 9, 1952, ch. 615, 66 Stat. 514. The 1965-created
§ 213(b)(6), special revolving fund, did not exist. Thus
the 2.5% interest rate of §215(2) applied only to loans
made from the original $5,000,000.00 Hawaiian home-
loan fund. Indeed, Among’s affidavit indicates that loans
currently being made from the basic $5,000,000.00 fund
are still made at the 2.5% interest rate required by
§215(2). As indicated heretofore, this court holds that
§213(b)(5) applies to and lawfully authorizes interest
rates higher than 2.5% to be charged only on loans from
funds other than those existing at the time Hawaii was
admitted to the Union as a State.
As above indicated, the purpose of the 1965 amend-
ment to §213(b) was to provide additional benefits to
lessees. Additional benefits were provided by the crea-
tion of severl new funds from which more loans could be
made: the Additional Receipts-Development Fund Por-
tion, the Additional Receipts-Loan Fund Portion and the
special revolving fund consisting of borrowed monies.
To hold that §215(2) prohibits charging interest at a rate
higher than 2.5% on loans from these completely new
funds would be contrary to the power given to the State,
in both §4 of the Admissions Act and Art. XI, §3, of the
Hawaii State Constitution, to increase benefits to lessees
without the consent of the United States. There is no
conflict between §213(b)(5) and §215(2). They apply
to severable and separate funds.
Although defendants have not by any formal pleading
squarely presented to this court a motion for dismissal or
68a
for summary judgment, nevertheless, in their ‘‘Memoran-
dum in Opposition’ to plaintiff's motion, defendants
have, inartfully, set out three contentions that this court
can and does construe as motions to dismiss or for sum-
mary judgment. Matters outside the pleadings have been
presented in response to both plaintiff’s motion and
defendants’ contentions, and the case has been argued on
the merits.
As heretofore indicated, defendants’ contentions that
this court lacks subject matter jurisdiction, as wel! as that
this court should abstain, are without merit.
Defendants’ third contention that the complaint fails
to state a claim upon which relief, can be granted has
presented justicable issues.
For the reasons set forth above, plaintiff’s motion for
partial summary judgment is DENIED.
Construing defendants’ third contention as a motion
for summary judgment, defendants’ motion is GRANT-
Ep."'
Defendants will prepare the necessary order.
DATED: Honolulu, Hawaii, September 16, 1974.
United States District Judge
11
This court, sua sponte, questioned counsel as to the
application of the Equal Footing doctrine to the Congressional
mandate that Hawaii adopt the HHCA into its laws as a condi-
tion of admission. Since no party disagreed thereon, the question
never became an issue and is not by this decision resolved. See,
Moore v. Charlotte-Mecklenburg Bd. of Ed., 402 U.S. 47 (1970).
ae
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