Appellants Reply Brief — Pacific Standard Life Insurance v. Committee to Save Nukolii

Office-Supreme Court, U.S,

FILED

po Set APR_2_ 1993

IN THE ALEXANDER L. STEVAS,

Supreme Court of the Yrited- Bites —

OcTOBER TERM, 1982

PACIFIC STANDARD LIFE INSURANCE COMPANY and GRAHAM

BEACH PARTNERS,

Appellants,

Vv.

COMMITTEE TO SAVE NUKOLI, County OF Kaval, and Tony T.

KUNIMURA, in his capacity as MAYOR OF THE COUNTY OF KAUAI,

Appellees.

ON APPEAL FROM THE SUPREME COURT OF HAWAII

———— =

APPELLANTS’ REPLY TO MOTION

s TO DISMISS OR AFFIRM

LEON SILVERMAN, P.C.

One New York Plaza

New York, N.Y. 10004

FRED P. BossELMAN, P.C. (212) 820-8080

Ross & Hardies Counsel for Appellants

WALTON D. Y. HONG Pacific Standard Life

Masuoka & Hong Insurance Company

Epwarb A. JAFFE and Graham Beach

Cades Schutte Fleming & Wright —_ Partners

SHELDON Raas, P.C.

Fried, Frank, Harris, Shriver &

Jacobson

FRANCIS A. WONG

Rice, Lee & Wong

Of Counsel

April 6, 1983

se -

—_—_—_ ———_——

TABLE OF CONTENTS

PAGE

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TABLE OF AUTHORITIES

Cases

City of Eastlake v. Forest City Enterprises, Inc., 426

i ani arisxdpeéubesndenedsdhaecasasincectecs

Cox Broadcasting Corp. v. Cohn, 420 U.S. 469

Grays Harbor Logging Co. v. Coats-Fordney

Logging Co., 243 U.S. 251 (1917).........cceeeeeeeees

Jenkins v. Georgia, 418 U.S. 153 (1974) .........6.0000

Kaiser Aetna v. United States, 444 U.S. 164 (1979)...

Penn Central Transportation Co. v. New York City,

ee Cy PE i aebisnsiassesibesisocencsdectviscens

Raley v. Ohio, 360 U.S. 423 (1959).........ccccceceeeees

San Diego Gas & Electric Co. v. City of San Diego,

SF Fs OE DEP civendsexoncscspadactedaraveseasions

Constitutional Provisions

NN oe cueuhac ane

ee I I, WF sivdgcseetndeindiinnkoxivesinebncens

Be IN FINE ciivoreassacicesesnccssanrascncesi

Statutes & Rules

I AEE scicddcodssncdyetandiestnanessusencatsiens

Charter of the County of Kauai, Hawaii, art. v........

County of Kauai, Hawaii, Referendum Petition

(certified on Jan. 30, 1980 and enacted on Nov. 25,

1980 upon certification of the results of the

election held Nov. 4, 1980).............c0ccecceeseeeee

MBs Be OE ce cccscncsessennesccscscccsocsosssesavesses

DE Sdigandbseckscedsaiperdeneuddecnesacecasis

PAGE

No. 82-1477

IN THE

Supreme Court of the United States

OcTOBER TERM, 1982

PACIFIC STANDARD LIFE INSURANCE COMPANY and GRAHAM

BEACH PARTNERS,

Appellants,

Vv.

ComMITTEE TO SAVE NUKOLI, County OF Kaual, and Tony T.

KUNIMURA, in his capacity as MAYOR OF THE COUNTY OF KAUAI,

Appellees.

APPELLANTS’ REPLY TO MOTION

TO DISMISS OR AFFIRM

The Committee to Save Nukolii (the “Committee”) has filed a

motion to dismiss or affirm. The Committee is the only party in

this proceeding adverse to the appellants.' The County of Kauai

and the Mayor have advised, by letter to the Clerk of this Court,

that they support the position of the appellants on this appeal.*

' The listing required under Rule 28.1 of the Rules of this Court is set forth in

the Jurisdictional Statement (hereinafter cited as “J.S.”) at ii, and remains un-

changed. Appellants have been advised that Tony T. Kunimura has succeeded

Eduardo E. Malapit as Mayor and, accordingly, the caption of this case has thus

been changed pursuant to Rule 40.3 of the Rules of this Court.

* The Developers have released any possible claims against the County for

construction costs arising from the delay in completing the project

during the period following the decision of the Hawaii Supreme Court, including

the required for review and consideration by this Court. The Developers

also have covenanted not to sue the County for any of the prior events relating to

the project if the County supports the Developers on this appeal and the

Developers prevail and are permitted to complete the project.

2

The Attorney General of the State of Hawaii has filed a brief amicus

curiae in support of the position of the appellants.

The Committee's brief in support of its motion to dismiss or

affirm (hereinafter cited as “Br.”) contains virtually no discussion

of the merits of the constitutional questions raised on this appeal.

Instead, the brief is devoted, almost entirely, to a discussion of

what it calls “threshold” procedural requirements (Br. at 6), fol-

lowed by an attempt to show that the questions presented are

“unique” to the case at bar (Br. at 12). Even as to these points, the

Committee's brief ignores the discussion of the very same matters

in the Jurisdictional Statement and fails to distinguish or even

discuss the controlling decisions of this Court cited in the Jurisdic-

tional Statement.

ARGUMENT

I.

The barriers to review which have been asserted by the Com-

mittee all have been discussed previously in the Jurisdictional

Statement. They are phantoms.

The Committee's claim that there has been no “final” judgment

is inaccurate for the reasons set forth in the Jurisdictional State-

ment (J.S. at 2n.2, 13-15). The decision being appealed from falls

into at least two of the four categories of cases discussed in Cox

Broadcasting Corp. v. Cohn, 420 U.S. 469 (1975). First, notwith-

standing the remand to the State Circuit Court as to remedy, the

federal constitutional questions on appeal here have been conclu-

sively decided by the Hawaii Supreme Court. 420 U.S. at 479.

Second, the federal constitutional issues, as decided by the Hawaii

Supreme Court, will survive and require decision regardless of the

outcome of the future State Circuit Court proceedings. 420 U.S.

at 480. The Hawaii Supreme Court has ruled that “enforcement of

the 1980 Referendum . . . does not offend . . . constitutional guar-

antees” and that “the Developers have no constitutional claim that

3

a taking has occurred” (J.S. at A-25).° It instructed the State

Circuit Court to “enter summary judgment for [the Committee]”,

to “order revocation of the condominium and hotel building per-

mits”, and to “restrain any further construction on the Nukolii site”

(id.). Where the highest court of a state has definitively deter-

mined the constitutional questions presented, its decision is re-

viewable by this Court, notwithstanding a remand for further

proceedings—including “even entire trials’, 420 U.S. at 479.

Hence, the Committee's claim that any further state proceedings

may be “extensive and evidentiary” (Br. at 5) is simply irrelevant

in determining whether there has been a “final judgment” within

the meaning of 28 U.S.C. § 1257.4

The Committee also states—as did the Developers (J.S. at 14)—

that theve was no briefing by any party on the federal constitutional

questions prior to the Hawaii Supreme Court's decision (Br. at 6).

What the Committee ignores is that the Hawaii Supreme Court in

fact determined the federal constitutional issues. This removed

any conceivable doubt as to this Court's jurisdiction (J.S. at 15). As

this Court has stated:

We now turn to the question of whether appellant's

exhibition of the film was protected by the First and

Fourteenth Amendments, a question which appellee

asserts is not properly before us because appellant did

not raise it on his state appeal. But whether or not

appellant argued this constitutional issue below, it is

clear that the Supreme Court of Georgia reached and

* Compare San Diego Gas & Electric Co. v. City of San Diego, 450 U.S. 621

(1981), cited by the Committee (Br. at 4-5), in which the state court had not

“decided whether any taking in fact had occurred.” 450 U.S. at 633. Similarly, in

Grays Harbor Logging Co. v. Coats-Fordney Logging Co., 243 U.S. 251 (1917)

(Br. at 4), there was no final judgment because the amount of “just compensation”

for the condemned land remained to be determined, 243 U.S. at 256. By contrast,

in the case at bar, since the Hawaii Supreme Court found that there was no

“taking”, there is simply no question of “just compensation” before the State

Circuit Court; and, in any event, an action in “inverse condemnation” is not

available in the Hawaii state courts (J.S. at 12 n.11).

*The Committee argues, disingenuously, that on remand “any completed

structure may be allowed to remain” (Br. at 5 n.2). But that is a non sequitur,

since the hotel stands uncompleted, with construction halted (J.S. at 11, 20-21).

4

decided it. That is sufficient under our practice. Raley

v. Ohio, 360 U.S. 423, 436 (1959).

Jenkins v. Georgia, 418 U.S. 153, 157 (1974).

Finally, the Committee makes the bizarre statement that the

Hawaii Supreme Court rendered its federal constitutional holdings

“in passing” (Br. at 8, 10). It is undenied that the Hawaii Supreme

Court devoted the first sections of its decision to the construction

of the referendum provisions involved and their application to the

facts at bar. However, the court then went on to determine whether

its construction ot these provisions met federal con:itutional re-

quirements (J.S. at A-22-A-25). In that regard, the Hawaii Su-

preme Court expressly held that: (a) its construction and application

of the 1980 Referendum and the referendum provisions of the

Charter “satisfied constitutional requirements” (J.S. at A-23); (b)

the result reached comports with the Fifth and Fourteenth

Amendments, citing Penn Central Transportation Co. v. New

York City, 438 U.S. 104 (1978) (J.S. at A-25); (c) “zoning by

referendum is compatible with due process”, citing City of East-

lake v. Forest City Enterprises, Inc., 426 U.S. 668 (1976) (J.S. at

A-23);5 and (d) “the Developers have no constitutional claim that a

taking has occurred” (J.S. at A-25). (See also J.S. at 14). The

Committee’s refusal to discuss these holdings is telling and simply

underscores the undoubted jurisdiction of this Court to review the

judgment ofthe Hawaii Supreme Court.

The Committee devotes the remainder of its brief to arguing

that the case involves “factual” matters and “unique issues”. Again,

the Committee fails to come to grips with what the facts are® and

what the Hawaii Supreme Court did.

* Eastlake is also cited by the Hawaii Supreme Court in two other places (J.S.

at A-8, A-14).

* Space does not permit a refutation of all of the Committee's misstatements of

fact. Among the most egregious of these are: (a) the Committee states that it

obtained certification “immediately” after the Developers’ property was zoned for

resort use (Br. at 2), whereas certification in fact occurred on January 30, 1980

(J.S. at 8, A-5, A-82), almost a year to the day after the February 2, 1979 zoning

5

A graphic example concerns the discussion of the condominium

building permit, which in fact was issued on August 5, 1980—

three months (J.S. at 8, A-6), not four days (Br. at 3), prior to the

general election. The Hawaii Supreme Court found that, although

the building permit was issued in August, it was predicated upon

an approval from the State’s Health Department which, although

obtained, would have been revoked if the Developers had not

proposed a plan for an alternative sewage disposal site—which the

Developers did and which plan was finally approved on October

31, 1980—before the general election (J.S. at A-21 n.19). Cer-

tainly, there can be no question on these facts as to the Developers’

reliance on the various permits obtained; and even the Committee

must concede that the entire issue was moot by the time of the

Referendum.

Likewise, the Committee’s claim that the Developers have used

“wildly exaggerated figures” is belied by the record—the $4.3

million in expenditures prior to the 1980 general election are all

documented in the record before the Hawaii Supreme Court and

are explained in the Jurisdictional Statement (J.S. at 11; see also

id. n.9).

The Committee proffers additional purported “findings” by the

Hawaii Supreme Court, none of which justifies the decision below.

Thus, that the Nukolii site may border land that is not zoned

“resort” (Br. at 10) is hardly “unique” to the Developers’ property

and is not a justification for the result reached. Irrespective of the

asserted rationality of the “rezoning”, there has been a taking in

the constitutional sense because the Developers simply had gone

(J.S. at 7, A-S, A-83-A-86); (b) the Committee states that the Developers “misrep-

resent[ed]” the sewage system to be used (Br. at 3), whereas the Hawaii Supreme

Court found that the Deve “candidly” stated that their initial submission

was proposed “on an interim “ (A-21 n.18); (c) the Committee states that at

graded (J.S. at 11), and the Developers had completed numerous improve-

ments connected with the entire (J.S. at 11-12); and (d) the Committee

that the “Kauai County and the relevant referenda provisions

gg adage age no gh (Br. at 12), whereas exactly the opposite

is true, both within the State of Hawaii (Brief of State of Hawaii, at 7) and

elsewhere (J.5. at 29 n. 18).

6

too far to be “rezoned” out of their project and were deprived of

their “distinct investment-backed expectations”. Kaiser Aetna v.

United States, 444 U.S, 164, 179-180 (1979); Penn Central, supra.

And—with respect to the issue that does concern the selective

nature of the restriction imposed—what is critical is not the treat-

ment of bordering areas, but that the 1980 Referendum effected a

down-zoning for one single spot in a clear deviation from Kauai's—

and Hawaii's—comprehensive land-use planning scheme (J.S. at

| 7, 28-29).

The Committee's statement that the Developers’ conduct un-

dermined the “orderly development permit process” (Br. at 8) is

untrue. Prior to the certification of the Referendum petition, the

Developers had an undisputed right to take the various steps

necessary to use their property as zoned, The Developers’ expen-

ditures began well prior to certification of the Referendum petition

(J.S. at 11 n.9). After certification, each of the government officials

concerned and the State Circuit Court, in all of its decisions, not

only permitted the Developers to continue to obtain the necessary

approvals and permits for such development—which they did (J.S.

at 9-10, A-32-A-68)—but also construed Section 5.11 of the

Charter as protecting these expenditures regardless of the result

of the Referendum vote. Even the Hawaii Supreme Court, while

giving the Referendum retroactive effect, did not deny that the

Developers had a right to proceed as they did. To state that the

Developers engaged in a “race” undeserving of constitutional pro-

tections (Br. at 4, 13) is not to state a question of “fact”; it is the

assertion, in rhetorical terms, of an erroneous principle of consti-

tutional law. Indeed, the Committee's argument that he Devel-

opers engaged in a “race” can be applied to any developer who

does not consent to halt activity while an anti-development group

conducts a referendum. In other words, the argument assumes the

conclusions that: (a) the Developers’ expenditures before certifica-

tion are unworthy of constitutional protection, (b) after certifica-

tion, the Developers’ activities lose constitutional protection

because the Developers should have anticipated the “freeze” ret-

roactively imposed by the Hawaii Supreme Court's decision, and

(c) that “freeze” itself is constitutional.

It is not disputed that the Hawaii Supreme Court determined

that the Developers “proceeded at risk” after certification (J.S. at

7

A-19) and that their substantial expenditures in that period were

“speculative” (J.S. at A-20-A-21). However, the Developers pro-

ceeded “at risk” only because the Hawaii Supreme Court held—

retroactively and in acknowledged rejection of the literal statutory

language—that the Developers’ expectations for use of their prop-

erty could not be taken into account once the 1980 Referendum

petition was certified as having been signed by the requisite num-

ber of voters, i.e., twenty percent of those eligible to vote at the

1978 general election (J.S. at 21-22, A-24). Whether the Devel-

opers’ property use can be put “at risk” in the circumstances

presented is a central part of the decision of the Hawaii Supreme

Court which is called into question on this appeal.

The Committee predicts that the issues in this case “are very

likely never to arise again” (Br. at 12), But dispassionate observers,

including the State of Hawaii, entertain an entirely contrary view,

setting forth effects which have already become both widespread

and pernicious. The reason is evident. If the decision below is left

to stand, any referendum mechanism can be misused in the same

way as in the case at bar. Apart from the spate of constitutional

issues which are likely to arise, the ultimate effect can only be to

stop legitimate development before it begins.

IV.

A party which argues that there can be no “taking” because, at

the time of the Referendum, the Developers “had barely com-

menced the foundations of the condominiums” (Br. at 13),” has not

paused to understand Kaiser Aetna v. United States, supra, or the

other applicable decisions of this Court (J.S. at 18-20).

In view of the remarkab!+ result reached by the Hawaii Supreme

Court, the clear conflict with applicable decisions of this Court,

s In fact, development had progressed substantially beyond that point (J.S. at

8

the fact that both the County of Kauai and the State of Hawaii also

urge reversal of the decision below, and the Committee's evident

inability to justify (or even discuss) that decision in light of prior

precedent, we respectfully urge that summary reversal is war-

ranted.

CONCLUSION

For the reasons set forth in this Reply Brief and in the Jurisdic-

tional Statement, appellee Committee's motion to dismiss or affirm

should be denied. We respectfully request this Court to note

probable jurisdiction of this appeal or, alternatively, to grant cer-

tiorari. In view of the clear conflict presented with prior decisions

of this Court and the absence of justification by any party for the

decision below on the merits of the constitutional questions pre-

sented, the Court should consider summary reversal in lieu of

plenary briefing and argument.

April 6, 1983 Respectfully submitted,

Leon Silverman, P.C.,

One New York Plaza

New York, New York 10004

(212) 820-8080

Counsel for Appellants

Pacific Standard Life Insurance

Company and Graham Beach

Partners

Fred P. Bosselman, P.C,

Ross & Hardies

One IBM Plaza

Chicago, Illinois 60611

(313) 467-9300

Walton D. Y. Hong

Masuoka & Hong

P.O. Box 1727

Lihue, Hawaii 96766

(808) 245-4757

Edward A. Jaffe

Cades Schutte Fleming &

Wright

1000 Bishop Street

P.O. Box 939

Honolulu, Hawaii 96808

(808) 521-9200

Sheldon Raab, P.C.

Fried, Frank, Harris, Shriver

& Jacobson

(A partnership which includes

professional corporations)

One New York Plaza

New York, New York 10004

(212) 820-8090

Francis A. Wong

Rice, Lee & Wong

345 Queen Street

Honolulu, Hawaii 96813

(808) 536-4421

Of Counsel