# Opposition Brief — Hawaiian Homes Commission v. Aged Hawaiians

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## Record

- **Collection:** Supreme Court brief
- **Document type:** Opposition Brief
- **Published:** January 1, 1995
- **Citation:** 516 U.S. 819

## Text

TEL, ele Oe RS CER CAE ts TET OG

ion EL TOE ees ess

| FILED
No. 94-2036 AUG 15 1995

Toh er ee to oe ee
In The , "
Supreme Court of the United States

October Term, 1995
SJ

HAWAIIAN HOMES COMMISSION; KALI WATSON,
in his capacity as Chairman of the Hawaiian Homes
Commission; WANDA MAE AGPALSA, ANDREW é
APANA, NANI BRANDT, ROCKNE FREITAS, DENNIS :
KAUAHI, LLEWELYN KUMALAE, ANN NATHANIEL, |
PATRICIA SHEEHAN, in their capacities as members
of the Hawaiian Homes Commission; and THE
DEPARTMENT OF HAWAIIAN HOME LANDS OF
THE STATE OF HAWAII,

Petitioners,

vs.

THE AGED HAWAIIANS,
an unincorporated association,
Respondents.
On Petition For Writ Of Certiorari To The
Supreme Court Of The State Of Hawaii

A

RESPONDENTS’ BRIEF IN OPPOSITION
+

ALAN T. MuraAKami*
Paut F. Nanoa Lucas
Cari C. CHRISTENSEN
*Counsel of Record

Native HawanANn LEGAL CORPORATION
Suite 1205, 1164 Bishop Street
Honolulu, Hawaii 96813 :
Telephone: (808) 521-2302

Attorneys for Respondents

COCKE Lay See Pentre OO, Gee Teens
OR CALL COLLECT (402)

QUESTIONS PRESENTED

The Hawaiian Homes Commission Act, 42 Stat. 108
(July 9, 1921), as amended, created a homesteading pro-
gram for the benefit of individuals of at least one-half
indigenous-Hawaiian ancestry. The Hawaiian Homes
Commission Act was adopted as a federal-state compact
pursuant to § 4 of the Hawaii Admission Act, 73 Stat. 4
(March 18, 1959), and Haw. Const., Art. XII, §§ 1-3, and
the administration of this project was thereby transferred
to the State of Hawaii, subject to continuing federal
supervision. The questions presented are:

Whether the Hawaii Supreme Court erred when it
decided by a unanimous vote that native Hawaiian appli-
cants who have been waiting for a pastoral homestead lot
under the Hawaiian Homes homestead program for more
than 40 years are entitled under the Hawaiian Homes
Commission Act to notice and an opportunity to be heard
after the Hawaiian Homes Commission awards non-eco-
nomic pastoral lots, arbitrarily denying them the oppor-
tunity to ask for a pastoral homestead economic unit?

Whether the Hawaii Supreme Court erred when it
decided, by a unanimous vote, that under the unique
circumstances of this case, the Hawaiian Homes Commis-
sion Act requires the Hawaiian Homes Commission, as a
matter of procedural due process, to hold an evidentiary
hearing so as not to arbitrarily preclude a native Hawai-
ian homestead applicant from receiving an award of a
pastoral homestead economic unit?

ii

TABLE OF CONTENTS

Page
QUESTIONS PRESENTED .........ccsccccccccccess i
TABLE OF CONTEND 6ccccacvcccroandensumeagen ii
TABLE OF AUTHORITIES .....ccccccscsccvessences iii
STATEMENT OF THE CASE... ..200c'csesvecccvevun 2
REASONS FOR DENYING THE PETITION......... 5

I CONCERNS OF FEDERALISM AND JUDI-
CIAL ECONOMY COUNSEL AGAINST
REVIEW .osic cccscvistvacdpultesenentagenen 6

II THE HAWAII SUPREME COURT COR-
RECTLY INTERPRETED PETITIONERS’
DUTIES UNDER THE HAWAIIAN HOMES »
COMMISSMIN BS oi divekccvntsocacbemians 8

III BENEFITS UNDER THE HAWAIIAN
HOMES COMMISSION ACT ARE PROP-
ERTY RIGHTS PROTECTED BY THE DUE
PROCS CL ARII dic cies cretancandine teen 10

IV THE HAWAII SUPREME COURT PROPERLY
DETERMINED THAT DUE PROCESS
REQUIRES THE AVAILABILITY OF A
TRIAL-TYPE HEARING UNDER THE CIR-
CUMSTANCES OF THIS CASE............. 14

V SANDIN V. CONNER, RECENTLY DECIDED
BY THIS COURT, GIVES NO AID TO PETI-
TURNERS CAUSE 0 ia cites beness cares taraee- 17

CONCLUSION

iii

TABLE OF AUTHORITIES

Page(s)
Cases
Aged Hawaiians v. Hawaiian Homes Commission, 78
Fiaw. 192, 891 P.2d 279 (1985) ................ passim
Ahia v. Department of Transportation, 69 Haw. 538,
NO I ho io 25s chided seeds scccass 9
Ahuna v. Department of Hawaiian Home Lands, 64
Haw. 327, 640 P.2d 1161 (1982) ........ a, & 9, 48,12
Atkins v. Parker, 472 U.S. 115 (1985) ............c0- 13
Bi-Metallic Investment Co. v. State Board of Equaliza-
ym a OE MRED a oy on oes nce ep ein'gc osc ec eeee 14
Board of Regents v. Roth, 408 U.S. 564 (1977)......... 10

Bush v. Hawaiian Homes Commission, 76 Haw. 128,
I I i Ra bw ksw te eseeseivees 15

Chongris v. Board of Appeals of Town of Andover, 811
F.2d 36 (1st Cir.), cert. denied, 483 U.S. 1021

BREE SEER CTS EE SRE SS ae ee 16
Cleveland Board of Education v. Loudermill, 470 U.S.

ET Re Rate oles win os c/w ein hice 'a pp v0 ce eos 13
Daniels v. Williams, 474 U.S. 327 (1986).............. 16
Flemming v. Nestor, 363 U.S. 603 (1960).............. 13
Fusco v. State of Connecticut, 815 F.2d 201 (2d Cir.),

Gert, momen, GO6 US. BEF (I9G7) «ww ccc cece cece 17
Goldberg v. Kelly, 397 U.S. 254 (1970) ................ 13
Logan v. Zimmerman Brush Co., 455 U.S. 422 (1982) .... 13
ek RB ES a 6) 16

Price v. Akaka, 928 F.2d 824 (9th Cir. 1990) (Akaka
ay, Cave, ene, Bee UB. S67 LIGST) oe i ce aces 12

iv
TABLE OF AUTHORITIES - Continued ©
Page(s)

Price v. Akaka, 3 F.3d 1220 (9th Cir. 1993) (Akaka II),
cert. denied, __. US. __., 114 $.Ct. 1645 (1994) .... 12

Richardson v. Belcher, 404 U.S. 78 (1971) ............. 13
Richardson v. Perales, 402 U.S. 389 (1971) ............ 13
Sandin v. Conner, __ U.S. __, 63 U.S.L.W. 4601

CRED Rik bese ones RRs CER End eee es Ee 17, 18
Sandy Beach Defense Fund v. City Council, 70 Haw.

SOR FF Notte: Be Lt add cathe oes ba ca akon 17
Schuster v. Schuster, 75 Ariz. 20, 251 \.2d 631 (Ariz.

SG) < 5:0 085 0h 59 eek ak bh cdo eR ek Se aa 12
Shively vo. Bowlby, 152 U.S: 1 (10948). 6.6 ib 0 bc dec ccesi 6
In re Smith, 68 Haw. 466, 719 P.2d 397 (1986)........ 11

Utah Division of State Lands v. United States, 482
Uk SR COMME 6h 05 6s coisas ak whl ete eth cee is 6

Vermont Yankee Nuclear Power Corp. v. National
Resources Defense Council, 435 U.S. 519 (1972)...... 15

CONSTITUTION, STATUTES & LEGISLATION:

US. Comet. aaa, MEV oss eee is fae ow awe 4
Dh hs Ie RN ey 564 EWE e One en eres ed a 7
Hawaii Admission Act, 73 Stat. 4, Pub. L. 86-3

GUE. Ty Re ob co 0s ia ae bce a 8
Hawaii Admission Act, § 4.................. ae GO 32
Hawaii Admission Act, § 5(f).................. 6, 8, 13

‘eeeeneeeneaiel

Vv

TABLE OF AUTHORITIES - Continued
Page(s)

Hawaiian Homes Commission Act, 42 Stat. 108
(July 9, 1921), as amended; reprinted in 1 Haw.

Ew. SOMt. 207 OF BOR CIO) 26 2. 00265 o. i oeersd. 2
Hawaiian Homes Commission Act, lg ey 2
Hawaiian Homes Commission Act, ot A per es 4
Hawaiian Homes Commission eG Bere « 52 oka: 10
Hawaiian Homes Commission Se ty 2” Sees eee 10
Hawaiian Homes Commission Act, § 219............ 10
Hawaiian Homes Commission Act, § 219.1........ 4, 10
Hawaiian Homes Commission Act, RMN dod oy crite Sian 10
Hawaiian Homes Commission Act, 9 | RRS tren 10
H.R. Rep. No. 839, 66th Cong., 2nd Sess. 4 2 ae 9
aN es UU gc a 7
POW Tt: MR PAE oo va vic bhok vivo oben 2, 8
Haw. Const., Article XII § 2 ..........ccc0cccccee. 2, 8
ge ee eS. ee ee re 2, 8
Hawaii Revised Statutes, Seer perce 3,7
Hawaii Revised Statutes § 661-1 (1985)............... 7
Hawaii Revised Statutes, ts kg Ss ae a 13
Hawaii Revised Statutes § 673-1(a) (Supp. 1992)...... 7
Hawaii Revised Statutes § 673-2(a) (Supp. 1992)...... 7
Hawaii Revised Statutes, eee 13, 14

1988 Hawaii Session Laws, Act 395.............. 13, 14

|

vi

TABLE OF AUTHORITIES - Continued

Page(s)
1991 Hawaii Session Laws, Act 323 .........--++-++++: 13
1993 Hawaii Session Laws, Act 351 .........-++-++: 13
1993 Hawaii Session Laws, Act 352..........++++0+- 14

Hawaii State Legislature, 1995 Special Session, Act

Court RULEs:

Hawaii Rules of Civil Procedure, Rule 54(b).......... 4
TREATISES:
90 C.J:S., Trusts § 457.0... cece eee e eee e reece neces 12

Restatement (Second) of Trusts, § 214(1), comment a.... 12

ene ee nT ee ea

No. 94-2036
¢

In The

Supreme Court of the United States

October Term, 1995
5

HAWAIIAN HOMES COMMISSION; KALI WATSON,
in his capacity as Chairman of the Hawaiian Homes
Commission; WANDA MAE AGPALSA, ANDREW
APANA, NANI BRANDT, ROCKNE FREITAS, DENNIS
KAUAHI, LLEWELYN KUMALAE, ANN NATHANIEL,
PATRICIA SHEEHAN, in their capacities as members
of the Hawaiian Homes Commission; and THE
DEPARTMENT OF HAWAIIAN HOME LANDS OF
THE STATE OF HAWAII,

Petitioners,

VS.

THE AGED HAWAIIANS,
an unincorporated association,

Respondents.

«

On Petition For Writ Of Certiorari To The
Supreme Court Of The State Of Hawaii
%

RESPONDENTS’ BRIEF IN OPPOSITION
+

Respondents The Aged Hawaiians respectfully
request that this Court deny Petitioners’ Petition for Writ
of Certiorari (hereinafter “Petition”), which seeks review
of the Hawaii Supreme Court’s opinion below. That opin-
ion is reported at 78 Haw. 192, 891 P.2d 279 (Haw. 1995)
and is reprinted in the Petition at Appendix A.

*

1

STATEMENT OF THE CASE

The Hawaiian Homes Commission Act of 1920, 42
Stat. 108 (July 9, 1921), as amended (hereinafter
“HHCA”), reprinted in 1 Hawaii Revised Statutes
(“H.R.S.”) 167 et seq., established a homestead program
for native Hawaiians.1 The HHCA was adopted as a
federal-state compact and as a provision of the Constitu-
tion of the State of Hawaii pursuant to § 4 of the Hawaii
Admission Act.? In these enactments “the federal govern-
ment set aside certain public lands to be considered
Hawaiian home lands to be utilized in the rehabilitation
of native Hawaiians, thereby undertaking a trust obliga-
tion benefiting the aboriginal people . . . [and] . . . the
State of Hawaii assumed this fiduciary obligation upon
being admitted to the Union as a state.” Ahuna v. Depart-
ment of Hawaiian Home Lands, 64 Haw. 327, 338, 640 P.2d
1161, 1168 (1982). In their administration of the benefit
program established by the HHCA, Petitioners herein are
to be judged by “the most exacting fiduciary standards.”
Id., 64 Haw. at 339, 640 P.2d at 1169. Their conduct is to be
“measured by the same strict standards applicable to
private trustees.” Id.

1 “Native Hawaiians” are defined in the HHCA as “any
descendant of not less than one-half part of the blood of the
races inhabiting the Hawaiian Islands previous to 1778.”
HHCA, § 201(7).

2 Pub. L. 86-3, 73 Stat. 4 (Mar. 18, 1959) (providing that as a
compact with the United States the HHCA shall be adopted as a
provision of the Constitution of the State of Hawaii); see also
Haw. Const., Art. XII, § 1-3 (adopting HHCA as “a law of the
State,” § 1, as “a compact with the United States,” §§ 2, 3, and
“as a provision of the constitution of this State,” § 3).

The present case, though superficially complicated in
light of the forty-year history of the underlying contro-
versy, is at heart a simple dispute in which Respondents
brought suit: (1) to challenge Petitioners’ unlawful failure
to consider awarding Respondents pastoral homestead
leases of a size sufficient to support commercial ranching
(i.e., an “economic unit”), benefits for which they had
applied; and (2) to enjoin future awards of pastoral lots
under a plan which was conceived in violation of state
administrative law and due process, and which Respon-
dents claim violates the HHCA because it provides only
for the award of lots too small to support economically
viable commercial ranching.

Respondents were among 427 persons who, in 1952,
applied for pastoral homestead leases at Puukapu, Island
of Hawaii, pursuant to the HHCA; 187 of these persons,
including Respondents and James Akiona, were found to
be eligible for such awards. Only 48 lots, ranging in size
from 200 to 300 acres, were then deemed available. The
remaining eligible persons, including Respondents and
Akiona, were placed on a “waiting list” pending future
development of additional pastoral lots. Aged Hawaiians v.
Hawatian Homes Commission, 78 Haw. 192, 195, 891 P.2d
279, 282 (1995). In 1988, nearly forty years later, they were
still on the waiting list. Accordingly, on July 25, 1988,
Akiona requested the Hawaiian Homes Commission
(“Commission”) to grant him a “contested case hearing”
(an administrative hearing pursuant to the Hawaii
Administrative Procedures Act, Chapter 91, H.R.S.) in
which he could challenge the Commission’s then-pending
proposal to award small “subsistence ranching” leases at

Puukapu which were, he argued, inconsistent with §§ 207
and 219.1 of the HHCA. Aged Hawaiians, 78 Haw. at
195-96, 891 P.2d at 282-83. Akiona’s request was denied
on February 21, 1989, and on July 17, 1989, Respondents
(then including Akiona, who later withdrew from this
litigation) filed their complaint in the present action
(twice amended thereafter) in State court seeking declara-
tory and injunctive relief against Petitioners and their
predecessors in office. Respondents successfully chal-
lenged the Commission’s failure to adopt administrative
rules governing the award of pastoral lots. Later, they
successfully challenged the validity of the rules subse-
quently adopted by the Commission under the “void for
vagueness” rule. Their remaining claims relating to viola-
tions of the HHCA and of Respondents’ due process
rights under U.S. Const., amend. XIV, with regard to
Petitioners’ adoption of the 1990 pastoral lot size plan
(the “1990 Plan”), were dismissed by the trial court for
failure to exhaust administrative remedies. Respondents
took this interlocutory appeal pursuant to Rule 54(b),
Hawaii Rules of Civil Procedure. Aged Hawaiians, 78 Haw.
at 197-200, 891 P.2d at 284-87.

The Hawaii Supreme Court, in a unanimous opinion,
reversed the trial court’s dismissal of Respondents’
claims. While expressing no opinion as to whether or not
Respondents were in fact entitled to be awarded pastoral
homestead leases of a size constituting an “economic
unit,” the court nevertheless declared that: (1) the HHCA
imposed a duty upon Petitioners to place native Hawai-
ian beneficiaries “on the land to the fullest extent possi-
ble,” Aged Hawaiians, 78 Haw. at 209, 891 P.2d at 296
(quoting Ahuna, 64 Haw. at 336, 640 P.2d at 1167); and that

(2) any benefits due Respondents under the HHCA were
a constitutionally protected “property interest” rather
than a mere “expectancy.” Aged Hawaiians, 78 Haw. at 211,
891 P.2d at 298. It further held that, as the award of an
“economic unit” of land for ranching purposes was a
benefit which could not be “arbitrarily” precluded by the
Commission, id., Petitioners violated due process when
they failed to provide Respondents an adequate forum in
which to contest the legality of the denial of the award of
such leases and of the award of additional “subsistence
ranching” lots incapable of supporting viable commercial
ranching under the 1990 Plan. Id. Accordingly, the court
ordered Petitioners to grant Respondents an opportunity
to contest the denials and to challenge the lease award
plan in a contested case hearing under Chapter 91, H.R.S.
Aged Hawaiians, 78 Haw. at 213, 891 P.2d at 300. Peti-
tioners now seek review in this Court.

+

REASONS FOR DENYING THE PETITION

The Hawaii Supreme Court properly interpreted the
HHCA in defining Petitioners’ duties thereunder. In any
event, its interpretation of this unique Congressional
enactment providing benefits to native Hawaiians, a fed-
eral-state compact incorporated as part of the Constitu-
tion of the state of Hawaii, raises no legal questions of
more than purely local significance and implicates no
substantial issues of federalism. Judicial economy will not
be furthered by review of this interlocutory opinion as
after reversal by this Court on remand the court below
could reach the same result (remand for agency hearing)
on independent state grounds. The court below applied

well-settled principles of state law in determining that
benefits under the HHCA are “property interests” pro-
tected by due process. Accordingly, Petitioners fail to
satisfy criteria traditionally applied by this Court in
determining whether or not to grant a Writ of Certiorari.

~

I

CONCERNS OF FEDERALISM AND JUDICIAL ECON-
OMY COUNSEL AGAINST REVIEW

Petitioners’ efforts to find support for its position in
the doctrine of federalism, Petition, at 25 n.7, are mis-
guided. These concerns are implicated to at most a minor
degree where, as here, it is argued that a state court has
given its citizens “too much” due process as against a
state agency by choosing to recognize a statutory entitle-
ment scheme as creating a protected property interest.
Petitioners’ concerns based on Utah Division of State Lands
v. United States, 482 U.S. 192 (1987), see Petition, at 25 n.7,
are not on point, as the result in that case stems from the
special considerations that govern ownership of lands
under navigable waters. Utah Division of State Lands, 482
U.S. at 195-98 (citing Shively v. Bowlby, 152 U.S. 1 (1894)).
In any event, the burdens imposed on the State of Hawaii
by Congress in the HHCA were “definitely declared or
otherwise made very plain,” cf. Petition, at 25 n.7, both in
the HHCA itself and in §§ 4 and 5(f) of the Hawaii
Admission Act. Furthermore, the recognition of the
HHCA as a source of protected property interests is well-
established in Hawaii law. See infra. Thus, to the extent
issues of federalism are relevant here, they counsel

against granting review of this highly fact-specific case
involving legal issues of purely local interest and of little
if any precedential value beyond the limits of the State of
Hawaii.

Another factor arguing against review is the fact that
reversal of the lower court’s decision on federal grounds
would not prevent the Hawaii Supreme Court from
reaching exactly the same result on remand under either
of two separate theories of independent state grounds.
First, on remand, the Hawaii court could well find that
the due process provisions of the state constitution, Haw.
Const., Art. I, § 5, require Petitioners to provide Respon-
dents with the same Chapter 91, H.R.S., contested case
hearing it has already granted them as a matter of federal
law. Although such a state law claim could not be
asserted under 42 U.S.C. § 1983, the waiver of sovereign
immunity provided in § 661-1, H.R.S. (1985), pleaded by
Respondents, Aged Hawaiians, 78 Haw. at 198 n.11, 891
P.2d at 285 n.11, could provide an alternative means of
asserting Respondents’ rights under Chapter 91, H.R.S.,
to a contested case hearing. Second, such relief would
also be available under § 673-2(a), H.R.S. (Supp. 1992),
also pleaded by Respondents. Aged Hawaiians, at id.°

3 Section 673-2(a), H.R.S., provides that HHCA benefici-
aries “shall have the right to bring an action in the circuit courts
of the State to resolve controversies relating to the Hawaiian
home lands trust described in section 673-1(a)(1).” Section
673-1(a), H.R.S. (Supp. 1992), in turn, provides that “[t]he State
of Hawaii waives its immunity for any breach of trust or fiduci-
ary duty resulting from the acts or omissions of its agents,
officers and employees in the management and dispositign of
trust funds and resources of: (1) the Hawaiian home lands trust

Accordingly, review by this court would not further judi-
cial economy as even a reversal of the lower court’s
opinion, issued on an interlocutory appeal, would likely
have no effect on the ultimate disposition of the case
(remand for agency hearing).

Il

THE HAWAII SUPREME COURT CORRECTLY INTER-
PRETED PETITIONERS’ DUTIES UNDER THE
HAWAIIAN HOMES COMMISSION ACT.

Petitioners do not deny the existence of the fiduciary
duty recognized in Ahuna and by the court below, but
challenge instead the Hawaii Supreme Court’s conclu-
sion, first stated in Ahuna and reiterated in Aged Hawai-
ians, that the HHCA grants its native Hawaiian
beneficiaries a right “to be placed on the land to the
fullest extent possible.” Petition at i, 7, 19. Petitioners
proclaim this to be an onerous and ill-defined require-
ment, Petition, at 6-7, 22-24, and argue that “[t]his amor-
phous standard could not possibly give rise to ‘a
legitimate claim of entitlement.’ ” Id. at 22 (citation omit-
ted).

Petitioners are simply wrong. Just such a duty is
clearly implied: (1) in the legislative history of the
HHCA, where it is stated that “the Hawaiian must be
placed upon the land in order to insure his rehabilita-
tion,” Ahuna, 64 Haw. at 336-37, 640 P.2d at 1167 (quoting

under Article XII, sections 1, 2, and 3 of the Constitution of the
State of Hawaii, implementing sections 4 and 5(f) of the Admis-
sion Act (Act of March 18, 1959, Public Law 86-3, 73 Stat. 4)[.]”

ee

H.R. Rep. No. 839, 66th Cong., 2d Sess. 4 (1920)); and (2)
in the undisputed existence of Petitioners’ fiduciary duty
to the native Hawaiian beneficiaries of the HHCA. If one
of the goals of the HHCA is that “the Hawaiian must be
placed upon the land in order to insure his rehabilita-
tion,” as recognized in Ahuna, at id., it is reasonable that,
as trustees fulfilling their duty “to make trust property
productive,” id., at 340, 640 P.2d at 1169, Petitioners
should be under a duty to establish eligible beneficiaries
as homesteaders on trust land “to the fullest extent possi-
ble.”

On remand Petitioners will of course be free to show,
if they can, that in light of the constraints imposed by the
funding available to them, it was simply not “possible” to
provide homestead leases of the kind sought by Respon-
dents. Similarly, the court below did not hold that Peti-
tioners are under a duty to award Respondents a pastoral
homestead lot of a size sufficient to form an “economic
unit.” Instead, it simply stated that “the Commission may
not arbitrarily preclude” such an award. Aged Hawaiians, 78
Haw. at 211, 891 P.2d at 298 (emphasis added). On
remand, Petitioners are free to attempt to justify their
refusal to provide such lots. They are simply prevented
from arbitrarily refusing to make such lots available. If
Petitioners’ discretion to manage and to allocate trust
resources under the HHCA is in fact as wholly unfettered
and standardless as they claim, Petition at 7-14, Peti-
tioners will handily defeat Respondents’ challenge on the
merits in the proceedings below. See Ahia v. Department of
Transportation, 69 Haw. 538, 751 P.2d 81 (1988) (recogniz-
ing decisionmaking authority of the Commission). If Peti-
tioners’ discretion is less unconstrained than they imagine,

10

however, it will instead be Respondents who prevail on
remand.

Ill

BENEFITS UNDER THE HAWAIIAN HOMES COM-
MISSION ACT ARE PROPERTY RIGHTS PROTECTED
BY THE DUE PROCESS CLAUSE

As Petitioners concede,

ms
property interests “are created and their dimen-
sions are defined by existing rules or under-
standings that stem from an independent source
such as state law - rules or understanding that
secure certain benefits and that support claims
of entitlement to those benefits.

Petition, at 17 (quoting Board of Regents v. Roth, 408 U.S.
564, 577 (1977)). The benefits and entitlement to those
benefits that are at issue here derive from the HHCA and
extend to all eligible native Hawaiian beneficiaries.
Respondents’ eligibility under the HHCA has been recog-
nized since 1952. Aged Hawaiians, 78 Haw. at 195, 891 P.2d
at 282. As qualified native Hawaiian beneficiaries,
Respondents may obtain a homestead lease granting
them “the right to the use and occupancy of a tract or
tracts of Hawaiian home lands within the following acre-
age limits per each lessee: . . . (2) not more than one
hundred acres of irrigated pastoral lands and not more
than one thousand acres of other pastoral lands|.]”
§ 207(a), HHCA. The court below also listed numerous
additional benefits eligible beneficiaries may obtain
under the HHCA, Aged Hawaiians, 78 Haw. at 211-212, 891
P.2d at 297-98 (quoting §§ 214, 219, 219.1, 220, and 221,
HHCA), and noted that “[t]hese provisions contemplate

11

and seek to promote full time ranching, farming and
aquaculture by native Hawaiians on homestead lots.”
Aged Hawaiians, 78 Haw. at 212, 891 P.2d at 299.

As noted earlier, the HHCA is simultaneously a stat-
ute enacted by Congress, a federal-state compact adopted
by Congress, and a provision of the constitution of the
State of Hawaii. Accordingly, when the Hawaii Supreme
Court interprets the HHCA as endowing eligible benefici-
aries with a right “to be placed on the land to the fullest
extent possible,” Aged Hawaiians, 78 Haw. at 209, 891 P.2d
at 296 (quoting Ahuna, 64 Haw. at 336, 640 P.2d at 1167),
and thereafter determines that this right is a property right
worthy of due process protection, it is not only interpret-
ing federal law but is simultaneously making a definitive
determination that, as a matter of Hawaii law, such a prop-
erty right exists. Such a definitive determination of state
law by a state court should end the inquiry in the absence
of the exceptional circumstances not present here.

Furthermore, contrary to Petitioners’ assertion that
the court below undertook an “unprecedented expansion
of the standard for defining property interests that man-
date due process,” Petition, at 21, the lower court’s deci-
sion was well within the bounds of prior jurisprudence in
what could fairly be said to be a well-settled area of law.
The Hawaii court had already concluded that an HHCA
homestead lease is a protected property right, and in
cancelling such a lease the Commission must comply
with due process requirements. In re Smith, 68 Haw. 466,
719 P.2d 397 (1986). While, as a general rule, beneficiaries
under a statutory welfare plan have no “property right in
the allocation of assets to - or even within — the program
itself, or even to a particular level of benefits,” Petition, at

12

24, the HHCA created a trust in favor of its beneficiaries.
Aged Hawatians, 78 Haw. at 206 & N.24, 891 P.2d at 293 &
n.24; see also Ahuna. The rights of Respondents, as bene-
ficiaries of that trust, include “the right to (a) compel the
performance of trust duties, (b) enjoin the commission of
a breach of trust by the trustee, and (c) compel the trustee
to redress a breach of trust.” Aged Hawaiians, 78 Haw. at
208 n.26, 891 P.2d at 295 n.26 (citing Price v. Akaka, 3 F.3d
1220, 1224-25 (9th Cir. 1993) (“Akaka II”), cert. denied, __
U.S. __, 114 S.Ct. 1645 (1994)).

Petitioners may argue that the rights of beneficiaries
who have applied for but have not yet been awarded
homestead lots do not amount to more than a “unilateral
expectation” because of the funding limitations that have
been imposed on Petitioners over the years and their
resulting inability to award homestead lots to all eligible
beneficiaries in a timely manner. See Petition, at 21-24.
Nevertheless, however, Respondents’ assertion that their
rights under the HHCA rise to the level of a property
right is not thereby defeated, because under the common
law of trusts, held applicable by Ahuna, “one whose
status as a beneficiary depends upon the discretion of the
trustee nevertheless may sue to compel the trustee to
abide by the terms of the trust.” Price v. Akaka, 928 F.2d
824, 827 (9th Cir. 1990) (Akaka I) (citing Restatement (Sec-
ond) of Trusts, § 214(1), comment a), cert. denied, 502 U.S
967 (1991). Indeed, any interest, whether vested or con-
tingent, is sufficient to give a beneficiary the right to
protect the trust fund and to see that the trust is properly
executed. 90 C.J.S., Trusts § 457 at 895 n.46 (citing Schuster
v. Schuster, 75 Ariz. 20, 251 P.2d 631 (Ariz. 1952)). While
Respondents cannot require Petitioners to award them the

13

leasehold lot of a particular size, they should be free to
enjoin the award of lots to others under a plan that is
substantively unlawful.

Here Petitioners cannot distinguish the long line of
cases wherein th Court has held that statutorily created
entitlements for rsons qualified to receive them are
appropriately « 1 1as a form of “property” protected
by due process.. © ‘hermore, in recognizing the HHCA
as creating a protected interest in its beneficiaries, the
Hawaii Supreme Court was merely following the lead of
the Hawaii State Legislature. In recent years the latter has
gone to great lengths to safeguard the rights of HHCA
beneficiaries and to provide them with a forum to obtain
redress for breaches of fiduciary obligations imposed by
the HHCA.5 Thus in Aged Hawaiians the Hawaii Supreme

4 See, e.g., Goldberg v. Kelly, 397 U.S. 254 (1970) (welfare
benefits); Richardson v. Belcher, 404 U.S. 78 (1971), Richardson v.
Perales, 402 U.S. 389 (1971), and Flemming v. Nestor, 363 U.S. 603
(1960) (social security disability benefits); Atkins v. Parker, 472
U.S. 115 (1985) (food stamp benefits); Cleveland Board of Educa-
tion v. Loudermill, 470 U.S. 532 (1985) (civil service employment);
Logan v. Zimmerman Brush Co., 455 U.S. 422 (1982) (unlawful
termination).

5 See 1988 Haw. Sess. Laws. Act 395, codified as Chapter
673, H.R.S. (providing prospective waiver of sovereign immu-
nity to permit suit to enjoin breaches of trust or of fiduciary
duties imposed under the HHCA or §§ 4 and 5(f) of the Hawaii
Admissions Act, including award of attorneys fees to prevailing
plaintiffs, and directing governor to propose mechanism to
resolve similar claims arising from 1959 to 1988); 1991 Haw.
Sess. Laws, Act 323, codified as Chapter 674, H.R.S. (establish-
ing administrative agency to resolve claims of individual bene-
ficiaries of the HHCA for “actual damages” resulting from
breaches of trust occurring from 1959 to 1988); 1993 Haw. Sess.

14

Court broke no new ground in defining the range of
constitutionally protected property interests recognized
under Hawaii law, and its decision should be respected
by this Court.

IV

THE HAWAII SUPREME COURT PROPERLY DETER-
MINED THAT DUE PROCESS REQUIRES THE AVAIL-
ABILITY OF A TRIAL-TYPE HEARING UNDER THE
CIRCUMSTANCES OF THIS CASE

Petitioners argue that Respondents were accorded all
of the “process due” them because Petitioners’ refusal to
make large pastoral leases available was an act of quasi-
legislative decisionmaking. Petition, at 26-27 (citing, inter
alia, Bi-Metallic Investment Co. v. State Board of Equaliza-
tion, 239 U.S 441, 445 (1915)).

Petitioners’ argument fails, first, because the adop-
tion of the 1990 Plan, one of the principal targets of
Respondents’ suit, was not a “quasi-legislative decision”
relating to, for example, “whether to build sewers on

Laws, Act 351 (amending Chapter 674, H.R.S., for the purpose,
inter alia, of extending the period during which claimants may
file actions against the State under that chapter); 1993 Haw.
Sess. Laws, Act 352 (in response to governor’s proposal manda-
ted under 1988 Haw. Sess. Laws, Act 395, providing administra-
tive mechanism to redress time-barred claims relating to breach
of State of Hawaii's fiduciary duties under the HHCA arising
from 1959 to 1988); Hawaii State Legislature, 1995 Special Ses-
sion, Act 14 (establishing program whereby, inter alia, $600 mil-
lion will be paid over a 20-year period to redress breaches of the
State of Hawaii’s HHCA trust obligations occurring from 1959
to 1988).

15

Maui, to run roads on Molokai, or to make new subdivi-
sion lot sizes bigger on Kauai, or smaller on the Big
Island.” Petition, at 7. Instead, it related to a site-specific
proposal to develop homestead lots in a specified configu-
ration on a particular 3000 acre parcel of homestead lands
at Puukapu on the Island of Hawaii, the very lands which
were the subject of Respondents’ pending homestead
applications. Aged Hawaiians, 78 Haw. at 197, 891 P.2d at
284. Thus, Petitioners are not merely challenging a gen-
eral rule of conduct but are instead among the “very
small number of persons” who are “exceptionally
affected” by Petitioners’ action. Cf. Petition, at 27 (quoting
Vermont Yankee Nuclear Power Cop. v. National Resources
Defense Council, 435 U.S. 519, 542 (1972)). In a recent case,
citation to which is glaringly absent from the Petition, the
Hawaii Supreme Court drew a similar distinction in deny-
ing the existence of a due process right to a trial-type
hearing to third parties seeking to challenge the Commis-
sion’s actions where no property interest was at issue.®
Contrary to Petitioners’ assertions here, the Hawaii
Supreme Court has carefully weighed the effects of this
decision on the Commission’s important work on behalf
of native Hawaiians and has no intention of setting in
motion the parade of horribles Petitioners offer up in an
effort to draw the Court’s attention.”

6 Bush v. Hawaiian Homes Commission, 76 Haw. 128, 135-36,
870 P.2d 1272, 1279-80 (1994) (Hawaiian homestead lessees seek-
ing to challenge Commission’s approval of “third-party agree-
ments” (cropping agreements) affecting lands leased to other
lesees had no due process right to a contested case hearing
under Chapter 91 because no property interest was at issue).

7 See especially Petition, at 7 (alleging that the lower court’s
decision would grant each of the twenty thousand HHCA

16

Petitioners’ argument also fails for the reason that, as
the HHCA does create entitlements that are a “property
interest” in the hands of its beneficiaries, see preceding
section, the requirements of due process are applicable,
including the requirement that some adequate forum be
made available to one who is denied a statutory benefit to
which he is arguably entitled. The presence of an ade-
quate post-deprivation remedy pursuant to state law can
sometimes cure the constitutional defect that would oth-
erwise result from the absence of a pre-deprivation hear-
ing, Parratt v. Taylor, 451 U.S. 527 (1981), overruled in part
on other grounds, Daniels v. Williams, 474 U.S. 327 (1986),®
however the adoption of Petitioner’s position and dis-
missal of Respondents’ claims would leave Respondents
without any forum, pre- or post-deprivation,? federal or
state, in which to fully contest the legality of Respon-
dents’ denial of the statutory benefits at issue here. Peti-
tioners would restrict Respondents to an inadequate pre-

beneficiaries “the right to federally-compelled trial-type
administrative process prior to every management decision made
by the Commission.”).

8 See also Chongris v. Board of Appeals Town of Andover, 811
F.2d 36, 40 (1st Cir.) (no due process violation because state
procedures “provide[d] a suitable form of pre-deprivation hear-
ing coupled with the availability of meaningful judicial
review”), cert. denied, 483 U.S. 1021 (1987); this case, 811 F.2d at
41, was cited by Petitioners for the proposition that trial-type
hearings are not required for “appropriation decisions,” Peti-
tion, at 26 n.8, although such a characterization of the case
seems questionable.

9 The distinction between a pre- and post-deprivation hear-
ing fades into insignificance here, in light of the fact that
Respondents have been waiting since 1952 to obtain benefits for
which they believe themselves to be eligible.

17

deprivation hearing (the opportunity to offer testimony
at a public hearing, with no right of cross-examination or
opportunity for full legal argument) and no means what-
soever of obtaining post-deprivation judicial review. Peti-
tioners thus do not merely seek to prevail on the merits,
but instead ask this Court to insulate their denial of
benefits from substantive review in any forum, a result
prohibited by the requirements of due process.

The zoning cases cited by Petitioners!® are not on
point. They merely state that third parties seeking to
challenge the rezoning of properties owned by others and
in which they themselves have no legal interest have no
due process right to notice and a trial-type hearing. Here,
however, Respondents claim a legal interest, as eligible
beneficiaries on the waiting list for HHCA pastoral home-
stead leases at Puukapu, to lease the particular lands that
are the subject of Petitioners’ action.

Vv

SANDIN V. CONNER, RECENTLY DECIDED BY THIS
COURT, GIVES NO AID TO PETITIONERS’ CAUSE

Petitioners’ invocation of Sandin v. Conner, __ U.S.
__ 63 U.S.L.W. 4601 (1995), decided subsequent to the
filing of the Petition, is misplaced. In Sandin, this Court
declined to recognize state prison regulations as creating
a constitutionally protected liberty interest in favor of

10 Petition, at 26 n.8, citing Sandy Beach Defense Fund v. City
Council, 70 Haw. 361, 773 P.2d 250 (1989); Fusco v. State of Con-
necticut, 815 F.2d 201, 205-06 (2d Cir.), cert. denied, 484 U.S. 849
(1987).

18

convicted inmates, stating that “Conner’s discipline in
segregated confinement did not present the type of atypi-
cal, significant deprivation in which a state might con-
ceivably create a liberty interest.” Id., 63 U.S.L.W. at 4605.
This Court was rightly cautious in permitting a federal
court to interpret state law as creating a protected liberty
interest in favor of prison inmates, the recognition of
which would lead “to the involvement of federal courts
in the day-to-day management of prisons.” Id., at 4604.
Sandin did not, however, purport to restructure the man-
ner in which either liberty or property interests are
accorded due process protection outside of the prison
context. Petitioners’ reliance on Sandin may have been
based on their hope that the Court would speak more
broadly than in fact it did. In any event, a general appli-
cation of the Sandin standard to all liberty interests would
not necessarily affect the present case, where it is instead
a property interest that is at issue. Respondents here have
actively relied upon their entitlement under the HHCA
since 1952, a period in excess of forty years. In the context
of property interests it is just such reliance that “the Due
Process Clause often aims to protect[.]” Sandin, at 4608
(Breyer, J, joined by Souter, J, dissenting). ©

¢

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19

CONCLUSION

Accordingly, for all the foregoing reasons, Petitioners’
request for a Writ of Certiorari should be denied.

Respectfully submitted,

ALAN T. MurRAKAmiI*
Paut F. NaHoa Lucas
Cart C. CHRISTENSEN
*Counsel of Record

Native HawanAN LEGAL CORPORATION
Suite 1205, 1164 Bishop Street
Honoluiu, Hawaii 96813
Telephone: (808) 521-2302

Attorneys for Respondents

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Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40386012_1906%3A2. Public record. Not legal advice.