in-re-a-iao-ground-water-management-area-high-level-source-water-use ( 2012 )

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Electronically Filed
Supreme Court
SCAP-30603
15-AUG-2012
09:14 AM
IN THE SUPREME COURT OF THE STATE OF HAWAI#I
---o0o---
IN RE #ÎAO GROUND WATER MANAGEMENT AREA HIGH-LEVEL
SOURCE WATER USE PERMIT APPLICATIONS AND PETITION
TO AMEND INTERIM INSTREAM FLOW STANDARDS OF
WAIHE#E RIVER AND WAIEHU, #ÎAO, AND WAIKAPÛ
STREAMS CONTESTED CASE HEARING
NO. SCAP-30603
APPEAL FROM THE COMMISSION ON WATER RESOURCE MANAGEMENT
(CASE NO. CCH-MA06-01)
AUGUST 15, 2012
RECKTENWALD, C.J., NAKAYAMA, AND MCKENNA, JJ.,
AND CIRCUIT JUDGE TRADER, IN PLACE OF DUFFY, J., RECUSED,
WITH ACOBA, J., CONCURRING SEPARATELY
OPINION OF THE COURT BY NAKAYAMA, J.
I. INTRODUCTION
Nâ Wai #Ehâ, or “the four great waters of Maui,” is the
collective name for the Waihe#e River and the Waiehu, #Îao, and
Waikapû Streams. The case before the court began in June 2004
when Petitioners-Appellants/Cross-Appellees Hui1 O Nâ Wai #Ehâ
1
A “hui” is defined as, inter alia, a “[c]lub, association,
society, corporation, company, institution, organization, band, league, firm,
joint ownership, partnership, union, alliance, troupe, [or] team.” Mary
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and Maui Tomorrow Foundation, Inc. (“Hui/MTF”), through
Earthjustice, petitioned Appellee/Cross-Appellee Commission on
Water Resource Management (“the Commission”) to amend the Interim
Instream Flow Standards (“IIFS”) for Nâ Wai #Ehâ, which had been
in place since 1988. Around the same time, several parties,
including Applicant-Appellee/Cross-Appellant Maui County
Department of Water Supply (“MDWS”), and Applicants-
Appellees/Cross-Appellees Hawaiian Commercial & Sugar Company
(“HC&S”) and Wailuku Water Company (“WWC”), filed Water Use
Permit Applications (“WUPA”) for the same area. The Commission
held a combined case hearing to resolve the IIFS and WUPA; in
addition to the petitioner and applicants, the Office of Hawaiian
Affairs (“OHA”) applied to participate in the hearing. The
current appeal seeks review of the Commission’s resulting
Findings of Fact, Conclusions of Law (“FOF/COL”), and Decision
and Order (“D&O”), in which the Commission amended the IIFS for
two of the four streams, and substantially retained the existing
IIFS for the two remaining streams as measured above diversions.2
The FOF/COL and D&O also resolved several WUPA; the Commission’s
1
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Kawena Pukui & Samuel H. Elbert, Hawaiian Dictionary 86 (rev. ed. 1986).
2
The Commission’s FOF/COL D&O differs from the 1988 IIFS in one
important respect. In 1988, the Commission set the IIFS as the status quo at
that time “without further amounts of water being diverted offstream through
new or expanded diversions.” Haw. Admin. Rules § 13-169-48 (1988). The
FOF/COL D&O states that the IIFS will “remain” as established above
diversions, but does not contain the restriction limiting new or expanded
diversions.
2
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resolution of the WUPA is not before the court on appeal.
Hui/MTF and OHA appeal on related grounds. Their
primary complaint is that the Commission erred in balancing
instream and noninstream uses, and therefore the IIFS do not
properly protect traditional and customary native Hawaiian
rights, appurtenant water rights, or the public trust. Both
parties also contest the Commission’s treatment of diversions,
including the alternative source Well Number 7 (“Well No. 7”), a
water well on HC&S’s plantation that could be used to irrigate
HC&S’s cane fields. The parties contest the Commission’s
determination that HC&S will not be required to pump Well No. 7
to its full capacity, a decision that resulted in a higher
estimated allowable diversion for HC&S, and lower IIFS for the
streams.
MDWS’s cross-appeal asks the court to clarify the
priority of noninstream municipal use in setting the IIFS.
And finally, the Commission, HC&S, and WWC argue that
the court does not have jurisdiction to hear Hui/MTF’s and OHA’s
appeals.
As explained below, the court holds that it has
jurisdiction in the instant case, and takes this opportunity to
expand upon the jurisdictional analysis from In re Water Use
Permit Applications “Waiâhole I”, 94 Hawai#i 97, 9 P.3d 409,
(2000). In reviewing Hui/MTF’s and OHA’s points of error, the
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court concludes that the Commission on Water Resource Management
erred in several respects. First, in considering the effect of
the IIFS on native Hawaiian practices in Nâ Wai #Ehâ, the
Commission failed to enter findings of fact and conclusions of
law regarding the effect of the amended IIFS on traditional and
customary native Hawaiian practices in Nâ Wai #Ehâ, and regarding
the feasibility of protecting any affected practices. Second,
the Commission’s analysis of instream uses was incomplete, as it
focused on amphidromous species and did not fully consider other
instream uses to which witnesses testified during the hearings.
Third, the Commission erred in its consideration of alternative
water sources and in its calculation of diverting parties’
acreage and reasonable system losses. The court must vacate the
Commission’s June 10, 2010 Findings of Fact, Conclusions of Law,
Decision and Order, and remand the case for further proceedings.
II. BACKGROUND
A. Nâ Wai #Ehâ Water Systems
1. Surface Water3
Nâ Wai #Ehâ are the Waihe#e River and Waiehu, #Îao, and
3
“‘Surface water’ means both contained surface water—that is, water
upon the surface of the earth in bounds created naturally or artificially
including, but not limited to, streams, other watercourses, lakes, reservoirs,
and coastal waters subject to state jurisdiction—and diffused surface
water—that is, water occurring upon the surface of the ground other than in
contained water bodies. Water from natural springs is surface water when it
exits from the spring onto the earth’s surface.” Hawai#i Revised Statutes
(“HRS”) § 174C-3 (1993). Diffused surface water is “Water, such a rainfall
runoff, that collects and flows on the ground but does not form a
watercourse.” Black’s Law Dictionary 1728 (9th ed. 2009).
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Waikapû Streams. The Waihe#e River is the principal water source
in Nâ Wai #Ehâ; it is about 26,585 feet long, and its watershed
covers 4,500 acres. From 1984-2005, United States Geological
Survey (“USGS”) data shows streamflow upstream of all diversions
as follows: the Q504 flow was 34 million gallons per day (“mgd”),
the Q705 flow was 29 mgd, the Q90 flow was 24 mgd, and the Q100
flow was 14 mgd. The Waihe#e River’s two main diversions are
Waihe#e Ditch and Spreckels Ditch. See Section II.A.3., infra,
for more information about the ditches. The two ditches are
capable of diverting all of the dry-weather flow available at the
intakes, however, even if all the water is being diverted,
streamflow immediately downstream of the intakes may exist
because of leakage through or subsurface flow beneath the dams at
these sites. The dry-weather flow downstream of the intakes is
commonly about 0.1 mgd, but the stream may not have continuous
mauka-to-makai surface flow.
The Waiehu Stream is formed by the confluence of North
and South Waiehu Streams; it is about 23,700 feet long, and its
4
Discussions of the volume of water in a stream utilize flow-
duration curves to express the percentage of time that streamflows were
equaled or exceeded during a given period of record. The Q50 flow, also known
as the median flow, is the flow that is equal or exceeded 50 percent of the
time; the Commission found that the Q50 flow is “reflective of typical flow
conditions.”
5
To illustrate the previous footnote, the Q70 flow is the volume of
water that is equaled or exceeded 70 percent of the time during any given time
period. The Waihe#e River showed streamflows of at least 29 mgd 70 percent of
the time from 1984-2005.
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watershed covers about 6,600 acres. Gaging stations on both
branches of the Waiehu Stream were discontinued in 1917, but USGS
used historical data and record-extension techniques to estimate
flows above all diversions for North Waiehu Stream from 1984-2005
as follows: the Q50 flow was between 3.1 to 3.6 mgd, the Q70 flow
was between 2.3 to 2.7 mgd, the Q90 flow was between 1.4 to 2.7
mgd, and the Q100 flow was 1.6 mgd (as measured in March 1915).
For South Waiehu Stream, USGS utilized the same record extension
techniques, and estimated the 1984-2005 flows as follows: the Q50
flow was between 2.4 to 4.2 mgd, the Q70 flow was between 1.9 to
2.8 mgd, the Q90 flow was between 1.3 to 2.0 mgd, and the Q100
flow was 1.5 mgd (recorded in July 1913). The Waihe#e and
Spreckels Ditches divert water from both North and South Waiehu
Streams; in addition, the North Waiehu Ditch diverts from the
North Waiehu Stream and the Cerizos Kuleana Ditch diverts from
the South Waiehu Stream. There is extensive channel erosion
below the Spreckels Ditch on South Waiehu Stream, with a 12-foot
drop in the elevation of the stream just below the diversion, and
there is a vertical concrete apron located in Waiehu Stream.
Most of the water is diverted from North and South Waiehu Streams
at the North Waiehu Ditch and Spreckels Ditch, respectively; due
to these diversions and leakage, Waiehu Stream does not flow
continuously from mauka to makai.
#Îao Stream is the second-largest stream in Nâ Wai #Ehâ;
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it is about 38,000 feet long, and its watershed covers about
14,500 acres. USGS calculated the 1984-2005 flows above all
diversions as follows: the Q50 flow was 25 mgd, the Q70 flow was
18 mgd, the Q90 flow was 13 mgd, and the Q100 flow was 7.1 mgd.
The two main diversions off the #Îao Stream are the #Îao-
Waikapû/#Îao-Maniania Ditches at an altitude of 780 feet, and the
Spreckels Ditch at 260 feet. The United States Army Corps of
Engineers channelized significant portions of #Îao Stream’s lower
reaches and hardened the stream bed and banks with concrete for
flood control and drainage. About 2.5 miles above the mouth of
the Stream, the concrete channel includes a 20-foot vertical
drop. USGS estimates that #Îao Stream loses 6.3 mgd in reaches
downstream of the #Îao-Maniania ditch diversion that are not
lined with concrete. In absence of ditch return flows or runoff
during and following rainfall, #Îao Stream is dry and does not
flow continuously from mauka to makai.
The Waikapû Stream is the southern-most stream and the
longest of the four streams; it is about 63,500 feet in length,
with a watershed of about 9,000 acres. USGS, using record
extension techniques, estimated the 1984-2005 flows above all
diversions as follows: the Q50 flow was between 4.8 to 6.3 mgd,
the Q70 flow was between 3.9 to 5.2 mgd, and the Q90 flow was
between 3.3 to 4.6 mgd. The lowest recorded flow for Waikapû
Stream was 3.3 mgd, in October 1912. There are three diversions
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off the Waikapû Stream: the South Side Waikapû Ditch (also known
as the South Waikapû Ditch) near an altitude of 1,120 feet, the
Waihe#e Ditch, and the Reservoir 6 Ditch. The Waikapû Stream is
commonly dry downstream of all diversions, both because of the
diversions and because of infiltration losses into the streambed;
the Stream does not flow continuously from mauka to makai.
2. Ground Water6
There are three types of ground water in Nâ Wai #Ehâ
water systems: dike-impounded, the basal freshwater lens, and
perched. Dike-impounded ground waters occur at high elevations;
basal freshwater lenses and perched waters occur at lower
elevations and closer to the coast.
The dikes at higher elevations are low-permeability, so
water builds up behind them. The upper reaches of Nâ Wai #Ehâ
streams intersect the dike-impounded ground water so the upper
reaches have year-round streamflow, even during dry periods. The
portions of the stream joined by the dike-impounded water are
described as “gaining” because ground water contributes to
streamflow.
The basal freshwater lens system is contained in
volcanic rocks and sedimentary deposits. Perched water also
6
“‘Ground water’ means any water found beneath the surface of the
earth, whether in perched supply, dike-confined, flowing, or percolating in
underground channels or streams, under artesian pressure or not, or
otherwise.” HRS § 174C-3.
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occurs in the sedimentary deposits. In the lower reaches of the
streams where an unsaturated zone exists between the streams’
channel bottoms and the water table, stream waters migrate from
the stream beds to the basal lenses, and the streams are
described as “losing.” Some of the stream channels intersect the
basal freshwater lens near the mouths of the streams, making the
streams “gaining” in those areas.
The Commission considered the IIFS for Nâ Wai #Ehâ with
the WUPA for the high-level dike-impounded ground water. As the
Hearings Officer, Dr. Lawrence H. Miike, explained, the
Commission decided to combine the issues into one contested case
hearing because the water systems are all connected and
considering the WUPA and IIFS together would allow the Commission
“to get a bigger picture and to be able to try to reach a more
rational and reasonable decision . . . .” One example of the
interconnectedness of the high-level dike-impounded ground water
and the surface waters is the tunnel system. Several tunnels tap
dike-impounded ground water and discharge directly into the
streams. In some cases, denial of a WUPA for dike-impounded
ground water results in additional water contributing to
streamflow.
3. Ditches
There are two primary and two secondary systems that
distribute water diverted from Nâ Wai #Ehâ. The primary systems
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are WWC’s ditch system and HC&S’s reservoir/ditch system. Nine
active diversions feed the primary distribution system: two on
Waihe#e River, one on North Waiehu Stream, one on South Waiehu
Stream, two on #Îao Stream, and three on Waikapû Stream. There
are two major ditches in the system: the Waihe#e and Spreckels
Ditches. The WWC distribution system involves eleven registered
stream diversions, two major ditches, seven minor ditches, and
sixteen reservoirs; HC&S shares in the cost and maintenance of
portions of this system. HC&S also operates a diversion intake
on South Waiehu Stream at the Spreckels Ditch, a diversion intake
on #Îao Stream at the Spreckels Ditch, and the Spreckels Ditch
from Reservoir 25 to its terminus at HC&S’s Reservoir 73. The
waters that enter the distribution system travel by gravity flow
in primary ditches through uplands into reservoirs that in turn
deliver the water into smaller ditches for end use.
The secondary systems are the so-called “kuleana”7
ditches/pipes that either have an intake directly in a stream or
receive water from the primary systems and the MDWS water
treatment plants. The Commission identified seventeen kuleana
ditch/pipe systems. Fourteen kuleana systems are connected to
the primary distribution systems; three kuleana intakes connect
7
The term “kuleana” is used by the parties to describe the
distribution system and users who were not charged for water delivery; whether
the users have riparian or appurtenant rights had not been determined at the
time of the Commission’s hearings.
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directly to the streams.
B. Procedural History
On July 21, 2003, the Commission designated the #Îao
Aquifer System a Ground Water Management Area (“GWMA”). After a
water source is designated as a GWMA, existing users have one
year to file WUPA. See Hawai#i Revised Statutes (“HRS”) § 174C-
50(c) (1993) (“An application for a permit to continue an
existing use must be made within a period of one year from the
effective date of designation.”) The water code provides that
the Commission may issue permits for existing reasonable and
beneficial uses, and places the burden of proof on the applicant
to show that it satisfies the relevant criteria. HRS §§ 174C-
49(a), 174C-50 (1993). As discussed in the following subsection,
several parties filed such WUPA for ground water sources.
The water code also provides that “[a]ny person with
the proper standing may petition the commission to adopt an
interim instream flow standard for streams in order to protect
the public interest pending the establishment of a permanent
instream flow standard.” HRS § 174C-71(2)(A) (1993). Hui/MTF
filed such a petition; it is the Commission’s resolution of this
petition that is currently before the court on appeal.
On March 13, 2008, during the pendency of the Hearings,
the Commission also designated the four streams of Nâ Wai #Ehâ a
Surface Water Management Area (“SWMA”). Like the GWMA
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designation, the SWMA designation triggered WUPA requirements.
The resolution of those WUPA are not currently before the court,
but they are relevant because the Commission utilized estimates
of expected surface water use permits in determining the IIFS for
the water system.
1. Water Use Permit Applications
MDWS, HC&S, and WWC’s predecessor in interest, Wailuku
Agribusiness Company, Inc.,8 filed timely WUPA for #Îao Aquifer
sources. Hui/MTF and OHA filed objections to the WUPA. The
Commission held public hearings on the WUPA on October 28, 2004;
April 22, 2005; and February 2, 2006. Prior to the close of the
third hearing, several attendees, including MDWS, WWC, Hui/MTF,
and OHA, verbally requested that the Commission hold a Contested
Case Hearing (“CCH”) regarding the WUPA. Subsequently, the
parties filed written petitions to that effect.
2. Petition to Amend Interim Instream Flow Standards
In June of 2004, Hui/MTF filed a Petition to Amend
Interim Instream Flow Standards. In its petition, Hui/MTF argued
that the then-existing standards, which had been in place since
1988, lacked any scientific basis and merely preserved the status
quo without addressing the public trust, environmental concerns,
native Hawaiian practices, outdoor and recreational activities,
8
WWC filed Requests to Transfer Wailuku Agribusiness’s permits to
WWC.
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or aesthetic and scenic values, as required by the water code.
Hui/MTF requested that the Commission establish scientifically-
based IIFS and order restoration of all streamflows not currently
put to beneficial use.
HC&S and Wailuku Agribusiness Company filed comments to
the petition, largely arguing that their use is reasonable and
beneficial, that the petition did not prove the necessity of
establishing new standards, and that the Petition did not show
how native Hawaiian practitioners would use the water or how much
they would need to use. Hui/MTF responded that the burden falls
on the Commission, not on Hui/MTF, to determine reasonable IIFS
and to protect instream public trust uses and native Hawaiian
rights.
3. Contested Case Hearing
At its February 15, 2006 meeting, the Commission
decided that a CCH would be held for the ground water WUPA and
the IIFS together. On May 4, 2006, the Commission released a
“Notice of a Combined Contested Case Hearing (CCH-MA-06-01)
Concerning Water Use Permit Applications For Maui Department of
Water Supply, Hawaiian Commercial and Sugar, and Wailuku Water
Company, LLC; Iao Ground Water Management Area, Maui, and
Petitions to Amend the Interim Instream Flow Standards for Iao,
Waiehu, Waihee, & Waikapu Streams.” One of the Commissioners,
Dr. Lawrence Miike, was appointed Hearings Officer. After a
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hearing, Dr. Miike granted standing to five of the parties
presently before the court: HC&S, Hui/MTF, MDWS, OHA, and WWC.
Dr. Miike held twenty-three days of hearings between
December 3, 2007 and March 4, 2008; by the end of the evidentiary
phase of the hearing, seventy-seven witnesses had testified and
over six hundred exhibits had been accepted into evidence. After
the conclusion of the Hearings, Dr. Miike reopened evidence, on
motions of two parties, to admit two additional exhibits: HC&S
offered a study it commissioned from John Ford, an environmental
consultant, which had not been completed at the time of the
Hearing, and OHA offered a portion of an Environmental Impact
Statement Preparation Notice for the Wai#ale Water Treatment
Facility. HC&S, MDWS, WWC, and Hui/MTF submitted proposed
Findings of Fact and Conclusions of Law. OHA joined Hui/MTF’s
proposals.
4. Dr. Miike’s Proposed Findings of Fact, Conclusions of
Law, Decision and Order
On April 9, 2009, Dr. Miike released his proposed
FOF/COL D&O (“Proposed FOF/COL”). The Proposed FOF/COL consisted
of 617 FOF regarding Nâ Wai #Ehâ’s water systems, fish and
wildlife habitats, traditional and customary native Hawaiian
practices, users and uses, and the projected economic impact of
restricting noninstream uses. The Proposed FOF/COL also included
297 COL, on topics including instream values, users and uses,
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alternative water resources, system losses, economic impacts of
restricting noninstream uses, IIFS, and WUPA. Many of the
Proposed FOF/COL were ultimately adopted by the Commission in the
final FOF/COL, as discussed in subsequent sections, infra.
Dr. Miike’s Proposed Decision amended the IIFS for all
four streams, as follows: the IIFS for the Waihe#e River would be
14 mgd downstream of diversions; for North and South Waiehu
Streams, the IIFS would be 2.2 mgd and 1.3 mgd, respectively; for
#Îao Stream, the IIFS would be 13 mgd; and for Waikapû Stream,
the IIFS would be 4 mgd, with contingencies to adjust the IIFS or
its point of measurement. The proposed IIFS limited diversions
enough to increase streamflow to a level that should have
established mauka-to-makai flow in all four streams. The
Proposed FOF/COL also concluded that Well No. 7 is an alternative
source for HC&S, and that it can supply 14 mgd of HC&S’s water
requirements.
The Commission permitted parties to file written
Exceptions to Dr. Miike’s Proposed FOF/COL and D&O; each party
filed such Exceptions. On October 15, 2009, the Commission
convened to hold a hearing on the parties’ Exceptions.
In their written exceptions and their presentations to
the Commission, Hui/MTF and OHA argued that the IIFS should be
higher for several reasons. They argued that the Commission
should allow fewer commercial diversions because the companies’
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actual water needs are lower than the Commission’s estimates,
that the diverting parties should be required to eliminate system
waste by lining ditches and reservoirs, and that HC&S should be
required to pump Well No. 7 to full capacity. Regarding kuleana
rights, Hui/MTF and OHA claimed that while the provisions made
for kuleana users were adequate for current and planned uses of
kuleana users who testified, they were inadequate to provide for
all kuleana users in the system. Furthermore, they argued that
the Commission should not defer to future proceedings for
determinations of appurtenant rights and the reasonable-
beneficial uses of noninstream users.
MDWS objected to several of the Proposed FOF/COL. MDWS
argued that the IIFS for #Îao Stream would restrict diversions
such that it could not operate its #Îao Water Treatment Facility
to serve domestic needs of Maui residents. MDWS also objected to
several of the Proposed FOF/COL indicating that the IIFS should
be set without considering “offstream public trust uses, such as
the public water supply.”
WWC’s exceptions argued that the Proposed FOF/COL did
not properly balance instream and noninstream uses, and were too
severe in their limitations of noninstream uses. WWC argued that
nothing in the water code required the Commission to establish
mauka-to-makai streamflows, and that the Proposed FOF/COL’s
efforts to do so reflect an improper emphasis on instream values.
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HC&S offered similar exceptions, arguing that the
Proposed FOF/COL tipped the balance too sharply in favor of
stream restoration. HC&S encouraged the Commission to consider
the water system as a whole, instead of focusing on
reestablishing mauka-to-makai streamflow in each individual
stream. HC&S also argued that the Proposed FOF/COL did not
adequately consider the economic impact of restricting HC&S’s
noninstream uses or of requiring HC&S to pump Well No. 7. HC&S
emphasized that it employed about eight hundred workers on Maui,
and that reduction in water “would jeopardize the viability of
HC&S.” If HC&S were to cease operation, HC&S argued, those eight
hundred jobs, and the HC&S’s other substantial contributions to
the Maui economy would be lost.
5. The Commission’s Final Findings of Fact, Conclusions of
Law, Decision and Order
On June 10, 2010, the Commission released its final
FOF/COL and D&O. The Commission reached 617 FOF and 276 COL,
adopting most of the Proposed FOF/COL but revisiting some. Most
notably, the D&O amended the IIFS for only the Waihe#e River (to
10 mgd) and the North and South Waiehu Streams9 (to 1.6 and 0.9
9
The IIFS for South Waiehu Stream has not been implemented.
Hui/MTF, OHA, MDWS, WWC, and HC&S entered into a series of stipulations
suspending the implementation; the Commission approved each stipulation. The
impetus for the stipulations appears to be complaints from kuleana users who
did not participate in the CCH and who take water from the ditch system off
South Waiehu Stream. South Waiehu Stream was one of the streams for which
actual streamflow measurements were not available at the time of the hearings;
the Commission utilized USGS estimates based on record extension techniques to
continue...
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mgd, respectively); it maintained the status quo, thereby not
restricting any of the parties’ diversions, for the #Îao and
Waikapû Streams. It also lowered the amount of water HC&S was
required to pump from Well No. 7 to 9.5 mgd, a significant
decrease of 4.5 mgd from the Proposed FOF/COL.
Dr. Miike dissented from the decision. Dr. Miike
agreed with the Commission majority regarding water requirements
for kuleana users, MDWS, and WWC. Dr. Miike also agreed with
most of the analysis regarding HC&S’s irrigation requirements.
The basis for Dr. Miike’s dissent was the Commission majority’s
allocation of water between instream uses and HC&S’s diversions.
His strongest objection was to the Commission’s treatment of Well
No. 7; Dr. Miike would have required HC&S to pump higher
quantities of water from the well during dry-weather conditions,
thereby retaining more water in the streams for instream and
downstream uses. Dr. Miike argued that the Commission’s decision
reflected a residual approach in that it set the IIFS as the
amount of water remaining after satisfying all noninstream uses.
Last, Dr. Miike objected to the Commission majority’s evaluation
of the economic impact of restricting HC&S’s water. He asserted
9
...continue
set the IIFS. In the time since the first stipulation, the Commission has
worked on collecting actual streamflow data, and it started the process of
determining and quantifying appurtenant rights of users on South Waiehu
Stream. HC&S repaired a portion of its diversion infrastructure, and the
parties have discussed modifications to the ditch system, pending final
determination of appurtenant rights.
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that the Commission cannot assume that the Proposed FOF/COL would
have resulted in HC&S’s “doomsday scenario” in which the water
restrictions render its entire operation impractical. Dr. Miike
argued that the accurate point of analysis would be the economic
effect of limiting availability of water to the 15 percent of
HC&S’s fields that are in west Maui. Dr. Miike noted that,
rather than providing this analysis, HC&S “instead outlined the
consequences if its entire 35,000 acre sugar operations were
ended.” As Dr. Miike explained:
Absent an economic analysis by HC&S, the Commission cannot
assume that HC&S’s doomsday scenario would result from an
occasional 10.5 to 13.4 percent decrease of its irrigation
requirements for 15 percent of its entire operations. Those
decreases equate to only 1.6 to 2.0 percent of its
irrigation requirements for its entire 35,000-acre
operations, and then only on an occasional basis. In the
absence of any information supporting its doomsday scenario,
the Commission could not assume that HC&S’s assertions
overcame the presumption in favor of the public trust
resource, the streams of Nâ Wai #Ehâ.
Dr. Miike concluded that the Commission majority “has failed in
its duties under the Constitution and the State Water Code as
trustee of the state’s public water resources.”
6. Appellate Filings
On July 14, 2010, OHA and Hui/MTF filed their Notices
of Appeal. On July 30, 2010, MDWS filed its Notice of Cross-
Appeal. On February 23, 2011, MDWS, OHA, and Hui/MTF filed their
Opening Briefs in the Intermediate Court of Appeals. On April
18, 2011, Hui/MTF filed an application to transfer the case to
the supreme court; OHA joined this motion. On June 23, 2011,
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this court accepted the application for transfer.
III. STANDARDS OF REVIEW
A. Judicial Review of the Water Commission’s Decisions
The water code provides that “[j]udicial review of
rules and orders of the commission under this chapter shall be
governed by chapter 91. Trial de novo is not allowed on review
of commission actions under this chapter.” HRS § 174C-12 (1993).
Chapter 91 articulates the standards of review applicable to
appeals of agency decisions and provides:
Upon review of the record the court may affirm the decision
of the agency or remand the case with instructions for
further proceedings; or it may reverse or modify the
decision and order if the substantial rights of the
petitioners may have been prejudiced because the
administrative findings, conclusions, decisions, or orders
are:
(1) In violation of constitutional or statutory
provisions; or
(2) In excess of the statutory authority or
jurisdiction of the agency; or
(3) Made upon unlawful procedure; or
(4) Affected by other error of law; or
(5) Clearly erroneous in view of the reliable,
probative, and substantial evidence on the whole
record; or
(6) Arbitrary, or capricious, or characterized by
abuse of discretion or clearly unwarranted exercise of
discretion.
HRS § 91-14 (g) (1993). “This court’s review is . . . qualified
by the principle that the agency’s decision carries a presumption
of validity, and appellant has the heavy burden of making a
convincing showing that the decision is invalid because it is
unjust and unreasonable in its consequences.” In re Wai#ola O
Moloka#i, Inc., 103 Hawai#i 401, 420, 83 P.3d 664, 683 (2004)
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(citations, brackets omitted).
B. Findings of Facts
“FOFs are reviewable under the clearly erroneous
standard to determine if the agency decision was clearly
erroneous in view of reliable, probative, and substantial
evidence on the whole record.” Id. at 421, 83 P.3d at 684(citations, brackets omitted).
C. Conclusions of Law
“COLs are freely reviewable to determine if the
agency’s decision was in violation of constitutional or statutory
provisions, in excess of statutory authority or jurisdiction of
agency, or affected by other error of law.” Id. (citations,
brackets omitted).
D. Mixed Questions of Law and Fact
A COL that presents mixed questions of fact and law is
reviewed under the clearly erroneous standard because the
conclusion is dependent upon the facts and circumstances of
the particular case. When mixed questions of law and fact
are presented, an appellate court must give deference to the
agency’s expertise and experience in the particular field.
The court should not substitute its own judgment for that of
the agency.
Waiâhole I, 94 Hawai#i at 119, 9 P.3d at 431 (citations, brackets
omitted).
An FOF or a mixed determination of law and fact is clearly
erroneous when (1) the record lacks substantial evidence to
support the finding or determination, or (2) despite
substantial evidence to support the finding or
determination, the appellate court is left with the definite
and firm conviction that a mistake has been made.
Id. (citation). “We have defined ‘substantial evidence’ as
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credible evidence which is of sufficient quality and probative
value to enable a person of reasonable caution to support a
conclusion.” Id. (citation).
E. The State Water Resources Trust
The public trust in state water resources is a
constitutional doctrine, and as such, “the ultimate authority to
interpret and defend the public trust in Hawai#i rests with the
courts of this state.” Wai#ola, 103 Hawai#i at 421, 83 P.3d at
684.
This is not to say that this court will supplant its
judgment for that of the legislature or agency. However, it
does mean that this court will take a ‘close look’ at the
action to determine if it complies with the public trust
doctrine and it will not act merely as a rubber stamp for
agency or legislative action.
Id. at 422, 83 P.3d at 685.
F. Constitutional Questions
“We answer questions of constitutional law by
exercising our own independent constitutional judgment based on
the facts of the case. Thus, we review questions of
constitutional law under the right/wrong standard.” State v.
Hanapi, 89 Hawai#i 177, 182, 970 P.2d 485, 490 (1998) (citations
omitted).
IV. JURISDICTION
Before the court can consider the parties’ points of
error, it must first resolve a jurisdictional argument. Kernan
v. Tanaka, 75 Haw. 1, 15, 856 P.2d 1207, 1215 (1993) (cert.
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denied, 510 U.S. 1119 (1994)) (“Appellate courts have an
obligation to insure they have jurisdiction to hear and determine
each case.”) The Commission, HC&S, and WWC argue that Hui/MTF
and OHA do not have a right of appeal, and therefore the court
has no jurisdiction in this matter. Hui/MTF and OHA both contend
that the court’s opinion in Waiâhole I resolves the issue and
clearly establishes that the court has jurisdiction over appeals
of IIFS determinations. As explained below, the court holds that
it has jurisdiction in this case, and takes this opportunity to
elaborate on the jurisdictional analysis from Waiâhole I.
The water code provides that “[j]udicial review of
rules and orders of the commission under this chapter shall be
governed by chapter 91.” HRS § 174C-12. HRS § 91-14, the
portion of chapter 91 relating to judicial review, states that,
“[a]ny person aggrieved by a final decision and order in a
contested case . . . is entitled to judicial review thereof under
this chapter.” HRS § 91-14(a) (1993). In previous cases
interpreting this provision, the court has defined “contested
case” as “an agency hearing that 1) is required by law and 2)
determines the rights, duties, or privileges of specific
parties.” Pele Defense Fund v. Puna Geothermal Venture, 77
Hawai#i 64, 67-68, 881 P.2d 1210, 1213-14 (1994). Further, the
court determined that a hearing is “required by law” if it is
required by statute, by administrative rule, or by constitutional
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due process. Id. at 68, 881 P.2d at 1214.
In this case, neither statute nor administrative rule
mandates a hearing to establish an IIFS. HRS § 174C-7110 governs
the Commission’s actions vis-a-vis the state’s Instream Use
Protection Program, and nothing in that statute requires the
Commission to hold a hearing before establishing or amending an
10
HRS § 174C-71, Protection of Instream Uses, provides, in relevant
part, that the Commission shall:
(2) Establish interim instream flow standards;
(A) Any person with the proper standing may petition the
commission to adopt an interim instream flow standard for
streams in order to protect the public interest pending the
establishment of a permanent instream flow standard;
(B) Any interim instream flow standard adopted under this
section shall terminate upon the establishment of a
permanent instream flow standard for the stream on which the
interim standards were adopted;
(C) A petition to adopt an interim instream flow standard
under this section shall set forth data and information
concerning the need to protect and conserve beneficial
instream uses of water and any other relevant and reasonable
information required by the commission;
(D) In considering a petition to adopt an interim instream
flow standard, the commission shall weigh the importance of
the present or potential instream values with the importance
of the present or potential uses of water for noninstream
purposes, including the economic impact of restricting such
uses;
(E) The commission shall grant or reject a petition to adopt
an interim instream flow standard under this section within
one hundred eighty days of the date the petition is filed.
The one hundred eighty days may be extended a maximum of one
hundred eighty days at the request of the petitioner and
subject to the approval of the commission;
(F) Interim instream flow standards may be adopted on a
stream-by-stream basis or may consist of a general instream
flow standard applicable to all streams within a specified
area[.]
HRS § 174C-71(2) (1993).
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IIFS. In fact, the code indicates that the Commission need not
hold a hearing; the Code defines the IIFS as “a temporary
instream flow standard of immediate applicability, adopted by the
commission without the necessity of a public hearing, and
terminating upon the establishment of an instream flow standard.”
HRS § 174C-3. The Commission’s administrative rules are
identical to the water code in relevant regard, so there is no
rule-based requirement to hold a hearing.11
This does not foreclose judicial review of the
Commission’s actions, as there remains a third route whereby a
hearing may be “required by law”: there may be a constitutional
due process requirement. In determining whether a party has a
due process right to an administrative hearing, the court must
first resolve whether the party’s asserted interest is
“‘property’ within the meaning of the due process clauses of the
federal and state constitutions.” Sandy Beach Defense Fund v.
City Council of City and Cnty. of Honolulu, 70 Haw. 361, 376, 773
P.2d 250, 260 (1989) (citing Aguiar v. Hawai#i Housing Auth., 55
Haw. 478, 495, 522 P.2d 1255, 1266 (1974)). “To have a property
interest in a benefit, a person clearly must have more than an
abstract need or desire for it. He must have more than a
11
As Hawai#i Administrative Rules § 13-169-2 states, an IIFS is “a
temporary instream flow standard of immediate applicability, adopted by the
commission without the necessity of a public hearing, and terminating upon the
establishment of an instream flow standard.” Haw. Admin. Rules § 13-169-2.
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unilateral expectation of it. He must, instead, have a
legitimate claim of entitlement to it.” Id. (quoting Bd. of
Regents v. Roth, 408 U.S. 564, 577 (1972)).
The court has had several opportunities to interpret
due process property interests as affected by the water code. In
the case most similar to the current case, Waiâhole I, this court
considered new and existing WUPA and IIFS for the Waiâhole ditch
system, a water system that provides water from Oahu’s windward
side to the island’s leeward side. Waiâhole I, 94 Hawai#i at
110, 9 P.3d at 422. Waiâhole I contains extensive analysis and
interpretation of the water code, and will be discussed in
subsequent sections of this opinion. Regarding jurisdiction,
however, the opinion provides only brief analysis. First, the
court explained that it had jurisdiction over the appeal of the
existing WUPA because both the HRS and the administrative rules
required a hearing as part of the WUPA process. Waiâhole I, 94
Hawai#i at 119-20 n.15, 9 P.3d at 431-32 n.15. Second, with
regard to the petitions to amend the IIFS and the new WUPA, the
court stated that “constitutional due process mandates a hearing
in both instances because of the individual instream and
offstream ‘rights, duties, and privileges’ at stake.” Id.(quoting Puna Geothermal, 77 Hawai#i at 68, 881 P.2d at 1214).
The parties dispute the import of the above-quoted
sentence. Hui/MTF argues that this “holding” from Waiâhole I
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“made clear that [the court] had independent jurisdiction over
IIFS petitions.” The Commission, HC&S, and WWC argue that the
Waiâhole I court’s citation to Puna Geothermal indicates that the
court had jurisdiction over the IIFS in that case only because
the appeal also challenged the Commission’s resolution of WUPA;
they argue that because no party appealed from the WUPA in the
present case, Waiâhole I is distinguishable and the court,
therefore, lacks jurisdiction.
First, a review of Puna Geothermal. There, the court
considered whether it had jurisdiction over an appeal following
the Department of Health’s (“DOH”) resolution of Puna Geothermal
Ventures’s (“PGV”) applications for permits to build a well field
and a power plant. 77 Hawai#i at 66, 881 P.2d at 1212. The DOH
held two “public informational hearings,” denied PGV’s request
for a CCH, and ultimately granted PGV’s permit applications. Id.When the Pele Defense Fund (“PDF”) sought judicial review of the
DOH’s actions, PGV filed a motion to dismiss, arguing that the
court lacked jurisdiction because there had been no contested
case. Id. On appeal, this court concluded that PDF had a
constitutional due process right to a hearing before the DOH.
Id. at 68, 881 P.2d at 1214. The court held,
as a matter of constitutional due process, an agency hearing
is also required where the issuance of a permit implicating
an applicant’s property rights adversely affects the
constitutionally protected rights of other interested
persons who have followed the agency’s rules governing
participation in contested cases.
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Id. (emphasis added). The court concluded that the hearings in
that case satisfied the “contested case” requirement for purposes
of judicial review under HRS § 91-14. Id. at 71, 881 P.2d at
1217.
The Commission, WWC, and HC&S argue that the Waiâhole I
court’s citation to Puna Geothermal indicates that the court
exercised jurisdiction over the appeal of the IIFS only because
the parties also appealed the Commission’s resolution of permit
applications. Hui/MTF reads Waiâhole I as holding that the court
has independent jurisdiction to review IIFS. The court concludes
that the jurisdictional language from Waiâhole I is susceptible
to both interpretations. However, the court’s due process cases
indicate that the court has jurisdiction to hear Hui/MTF’s appeal
because the IIFS, independent of any WUPA, affects property
interests of Hui/MTF’s members.
John Duey, President of Hui O Nâ Wai #Ehâ, testified
that the Hui’s members “live, work, and play in the areas of Nâ
Wai #Ehâ,” and that the Hui is “committed to restoring these
streams’ natural and cultural values and protecting Maui’s
quality of life for present and future generations.” #Îao Stream
runs through the property owned by Duey and his wife, Marie
Ho#oululâhui Lindsey Duey. Marie is native Hawaiian; she gave
their property her Hawaiian name: Ho#oululâhui. Ho#oululâhui
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contains at least seventeen ancient lo#i12, but the Dueys
currently cultivate only two small lo#i with stream water, which
they take directly from, and return to, #Îao Stream. John
testified that he would like to restore the remaining lo#i on his
land, but that “[t]he only limiting factor is the availability of
water.”
Ron Sturtz, President of the Board of Directors of Maui
Tomorrow Foundation, Inc., submitted a letter stating that the
organization’s supporters engage in traditional and customary
gathering practices. One such supporter, Roselle Keli#ihonipua
Bailey, a kuma hula and native Hawaiian practitioner, submitted
written testimony explaining the gathering practices she would
like to practice in #Îao Stream and its nearshore waters, and
testifying that the lack of flowing water makes her practices
impossible.
Kalo13 farmer and Hui O Nâ Wai #Ehâ member Hôkûao
Pellegrino testified that his 2.175-acre farm, Noho#ana, contains
several restored ancient lo#i, ready to be cultivated. The
12
“Lo#i” is defined as an “[i]rrigated terrace, especially for taro,
but also for rice; paddy.” Pukui & Elbert at 209.
13
“Kalo” is the Hawaiian word for taro. Pukui & Elbert at 123. “In
Hawai#i, taro has been the staple from earliest times to the present, and here
its culture developed greatly, including more than 300 forms. All parts of
the plant are eaten, its starchy root principally as poi, and its leaves as
lû#au.” Id.29
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Noho#ana lo#i are irrigated via a traditional #auwai14 that diverts
water from Waikapû Stream, and the water that leaves the lo#i
returns to the Stream. Pellegrino testified that he is only able
to cultivate two of his lo#i at a time because of insufficient
water in Waikapû Stream.
The interests of the Dueys, Roselle Bailey, and Hôkûao
Pellegrino are selected examples of testimony presented to the
Commission, but dozens of others testified about their similar
interests. Indeed, in its FOF/COL D&O, the Commission found that
“Cultural experts and community witnesses provided uncontroverted
testimony regarding limitations on Native Hawaiians’ ability to
exercise traditional and customary rights and practices in the
greater Nâ Wai #Ehâ area due to the lack of freshwater flowing in
Nâ Wai #Ehâ’s streams and into the nearshore marine waters.”
The question before the court today, a question we answer in the
affirmative15, is whether these interests constitute “property
interests” for the purpose of due process analysis.
The court has explained that a party has a property
interest in the subject of litigation for purposes of due process
analysis if the party has “more than an abstract need or desire
14
“#Auwai” means “ditch or canal.” Pukui & Elbert at 33.
15
Hui/MTF also has standing to pursue this appeal, having
demonstrated that “their interests were injured” and that they were “involved
in the administrative proceeding that culminated in the unfavorable decision.”
Puna Geothermal, 77 Hawai#i at 69, 881 P.2d at 1215 (quoting Mahuiki v.
Planning Comm’n, 65 Haw. 506, 514-15, 654 P.2d 874, 879-80 (1982)).
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for it. He must have more than a unilateral expectation of it.
He must, instead, have a legitimate claim of entitlement to it.”
Sandy Beach Defense Fund, 70 Haw. at 376, 773 P.2d at 260. The
court has cited with approval the U.S. Supreme Court’s analysis
that:
Property interests, of course, are not created by the
Constitution. Rather they are created and their dimensions
are defined by existing rules or understandings that stem
from an independent source such as state law—rules or
understandings that secure certain benefits and that support
claims of entitlement to those benefits.
Int’l Broth. of Painters and Allied Trades v. Befitel, 104
Hawai#i 275, 283, 88 P.3d 647, 655 (2004) (quoting Bd. of Regents
v. Roth, 408 U.S. 564, 576 (1972)). See also Aguiar v. Hawai#i
Housing Auth., 55 Haw. 478, 496, 522 P.2d 1255, 1267 (1974)
(citing federal authority to support the conclusion that “a
benefit which one is entitled to receive by statute constitutes a
constitutionally-protected property interest”).
The interests asserted by Hui/MTF have a statutory basis in the
water code. As stated in HRS § 174C-101,
(c) Traditional and customary rights of ahupua#a tenants who
are descendants of native Hawaiians who inhabited the
Hawaiian Islands prior to 1778 shall not be abridged or
denied by this chapter. Such traditional and customary
rights shall include, but not be limited to, the cultivation
or propagation of taro on one's own kuleana and the
gathering of hihiwai, opae, o‘opu, limu, thatch, ti leaf,
aho cord, and medicinal plants for subsistence, cultural,
and religious purposes.
(d) The appurtenant water rights of kuleana and taro lands,
along with those traditional and customary rights assured in
this section, shall not be diminished or extinguished by a
failure to apply for or to receive a permit under this
chapter.
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HRS §§ 174C-101(c) and (d) (1993). HRS § 174C-63 is yet another
section of the water code that entitles native Hawaiian farmers
to their water; it states: “Appurtenant rights are preserved.
Nothing in this part shall be construed to deny the exercise of
an appurtenant right by the holder thereof at any time.” HRS §
174C-63 (1993).
HC&S argues that these interests do not rise to the
level of property for due process purposes, citing Sandy Beach
Defense Fund, for support that native Hawaiian practices are
similar to “aesthetic and environmental interests” which the
court has held to be insufficient to establish a property
interest. In that case, the City and County of Honolulu issued
Special Management Area (“SMA”) use permits for a proposed
development. 70 Haw. at 364, 773 P.2d at 253. Area residents
and community groups alleged that the County was required to hold
a CCH before issuing the permits, expressing concerns “regarding
the development’s impact on coastal views, preservation of open
space, traffic, potential flooding, and sewage treatment.” Id.The supreme court held that the community groups were not
entitled to a CCH because their “aesthetic and environmental”
claims did not constitute “legitimate claims of entitlement.”
Id. at 376, 773 P.2d at 260. The court also noted that the
community groups did not cite authorities to support their
argument, and that none of the area residents owned property
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contiguous to the development. Id. at 377, 773 P.2d at 261.
Sandy Beach is readily distinguishable. First, the affected
parties before the court today own or reside on land in the area
of Nâ Wai #Ehâ, and rely upon that water to exercise traditional
and customary rights, including kalo farming. Second, as cited
above, there is statutory authority found throughout the water
code to support their entitlement to water for kalo farming.
HC&S also argues that downstream kalo farmers cannot
assert property interests to more water than they currently use
because it “would be a grave departure from the principle that
‘the range of interests protected by procedural due process is
not infinite.’” (quoting Int’l Bd. of Painters & Allied Trades v.
Befitel, 104 Hawai#i at 283, 88 P.3d at 655). This argument is
rejected for several reasons. First, as both Hui/MTF and OHA
argue, the fact that HC&S and WWC have historically deprived
downstream users of water does not negate those downstream users’
interest in the water. Second, neither statute quoted above
provides for abandonment of appurtenant rights; in fact, the text
specifically protects against abandonment by stating that
appurtenant rights will “not be diminished or extinguished by a
failure to apply for or to receive a permit.” HRS § 174C-101(d).
Furthermore, as the court explained in Waiâhole I, “The
constitution and Code, [. . .] do not differentiate among
‘protecting,’ ‘enhancing,’ and ‘restoring’ public instream values
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[like native Hawaiian rights], or between preventing and undoing
‘harm’ thereto.” 94 Hawai#i at 150, 9 P.3d at 462.
The court also disagrees with the Commission’s, WWC’s,
and HC&S’s argument that setting the IIFS in this case did not
determine individual water rights. When the Commission issued a
D&O retaining the existing IIFS for #Îao and Waikapû Streams, it
necessarily affected the Dueys’ and Pellegrino’s access to water
because it endorsed the upstream diversions that remove water
from #Îao and Waikapû Streams, apparently finding that the
“importance” of those diversions outweighed the importance of
downstream uses. HRS § 174C-71(2)(D).
Though the conclusions above are sufficient to support
today’s holding, the analysis of one more case merits
consideration. In Ko#olau Agr. Co., Ltd. v. Comm’n On Water Use
Mgmt. (“Ko#olau Ag”), an agriculture company unsuccessfully
sought review of the Commission’s designation of several O#ahu
aquifers as Water Management Areas (“WMA”). 83 Hawai#i 484, 486,
927 P.2d 1367, 1369 (1996). The court explained that the company
did not have a property interest in whether the aquifers in
question received the WMA designation. Id. at 493, 927 P.2d at
1376. In so concluding, the court drew a distinction between WMA
designations, which do not require a hearing, and WUPA decisions,
which do require hearings. As the court explained, this
disparity in procedure is “eminently logical given the difference
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between the issues presented for decision.” Id. First, the
court noted the difference in analysis required before the two
resolutions. When considering a WMA designation, the Commission
must determine whether “the water resources in the area may be
threatened by existing or proposed withdrawals or diversions of
water.” Id. (quoting HRS § 174C-41(a)). Contrast a WUPA, where
the Commission’s analysis is much more robust; the Commission
must consider several factors when granting a WUPA, including
whether the water use is “a reasonable-beneficial use as defined
in [the Code];” whether the use is “consistent with the public
interest;” and whether it is consistent with governmental land
use plans. Id. at 492, 927 P.2d at 1375 (quoting HRS § 174C-48).
Second, the court considered the necessity of judicial review.
The court recognized that “the consequences of an erroneous [WMA]
designation decision by the Commission do not indicate a need for
judicial review because the rights of individual water users are
fully protected in the permitting process.” Id. at 493, 927 P.2d
at 1376. And third, the court noted that WMA designations do not
affect the interests of any potential water users; the impact of
such a designation is only that the user’s water source is
subject to the Commission’s regulation, which does not, in and of
itself, affect the user’s water rights. Id. Contrast a WUPA,
where the outcome is a permit directly specifying a user’s rights
to water. Id.35
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All parties cite Ko#olau Ag for assistance on the
question of whether there is a property interest at stake in this
case. The Commission, HC&S, and WWC argue that an IIFS
determination is similar to designating a WMA because neither
directly determines property rights. The court concludes that
each of the factors listed above counsel in favor of judicial
review in this case. First, the analysis the Commission must
undertake in setting an IIFS is complicated. The statute
specifies the factors the Commission must consider:
In considering a petition to adopt an interim instream flow
standard, the commission shall weigh the importance of the
present or potential instream values with the importance of
the present or potential uses of water for noninstream
purposes, including the economic impact of restricting such
uses.
HRS § 174C-71(2)(D). As the voluminous record in this case
readily establishes, each of these factors is complex and
involves significant and thorough analysis and factfinding.
Unlike establishing a WMA, the analysis supporting a
determination of an IIFS requires more than a yes/no decision,
but rather requires the Commission to weigh serious and
significant concerns, including: “the need to protect and
conserve beneficial instream uses of water,” “the importance of
the present or potential instream values,” “the importance of the
present or potential uses of water for noninstream purposes,” and
“the economic impact of restricting such uses.” HRS §
174C-71(2)(C) and (D). Indeed, in Waiâhole I, the Commission
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itself advocated for due process rights in proceedings to
determine IIFS. One of the Commission’s own Orders, cited in the
court’s opinion with approval, states
A petition to modify instream flows at ... specific
locations is a fact-intensive, individualized determination
at each site that may directly affect downstream and
off-stream interests.... [I]ndividual claims may need to be
examined. The site-specific inquiry required in this case is
not compatible with rule making, but with a method which
provides the due process procedures necessary to assess
individual interests.
94 Hawai#i at 152, 9 P.3d at 464.
Second, the ramifications of an erroneous IIFS could
offend the public trust, and is simply too important to deprive
parties of due process and judicial review. As the court stated
in Waiâhole I, “[t]he public trust . . . is a state
constitutional doctrine. As with other state constitutional
guarantees, the ultimate authority to interpret and defend the
public trust in Hawai#i rests with the courts of this state.” 94
Hawai#i at 143, 9 P.3d at 455. The courts serve an important
function with regard to the water code; as the court noted in
Waiâhole I, “[t]he check and balance of judicial review provides
a level of protection against improvident dissipation of an
irreplaceable res.” Id. (quoting Arizona Cent. for Law in Pub.
Interest v. Hassell, 837 P.2d 158, 168–69 (Ariz. Ct. App. 1991),
review dismissed, 837 P.2d 158 (Ariz. 1992) (brackets and
citation omitted)).
Finally, in Ko#olau Ag, the court specified that there
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was little necessity for judicial review because the permitting
process would adequately protect individual rights. 83 Hawai#i
at 493, 927 P.2d at 1376. This protection does not exist in
today’s case for several reasons. First, as the Commission
itself acknowledges, setting an IIFS is a final action and it
would be “inappropriate for the Commission to reevaluate the IIFS
during the upcoming surface water use permit proceedings.” This
argument indicates that downstream users cannot ask the
Commission to raise the IIFS to a level that would accommodate a
permit to fulfill their kuleana needs. Second, as the court
noted in Waiâhole I, the water code envisions that “Once the
Commission translates the public interest in instream flows into
‘a certain and manageable quantity[, t]he reference to
consistency with the public interest in the definition of
reasonable beneficial use likewise becomes a reference to that
quantity.’” 94 Hawai#i at 149, 9 P.3d at 461 (quoting Douglas W.
MacDougal, Private Hopes and Public Values in the “Reasonable
Beneficial Use” of Hawai#i’s Water: Is Balance Possible?, 18 U.
Haw. L. Rev. 1, 62 (1996)). In short, the IIFS matter. They
have both immediate and lasting impacts on individual water
users. They are also an opportunity for the Commission to
consider the needs of our state’s water systems. “Under the
[Water] Code, [. . .] instream flow standards serve as the
primary mechanism by which the Commission is to discharge its
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duty to protect and promote the entire range of public trust
purposes dependent upon instream flows.” 94 Hawai#i at 148, 9
P.3d at 460. The court therefore holds that Hui/MTF had a due
process right to a hearing, and therefore has a right to judicial
review, in this case.
V. ANALYSIS OF POINTS OF ERROR
A. This Court Must Dismiss MDWS’s Cross-Appeal, As It Seeks
Resolution of an Abstract Proposition of Law.
MDWS filed a cross-appeal in this case seeking
“clarification” of several COL, in which the Commission
articulated that it established the IIFS prior to considering
noninstream uses, including MDWS’s diversions for the public
water supply. MDWS contends that Waiâhole I established a
“higher status” for public trust uses as compared to commercial
noninstream uses, and that municipal use, though a noninstream
use, should be afforded higher status and preferential
consideration as a public trust use.
Hui/MTF filed an answering brief to MDWS’s opening
brief; OHA joined the brief. In its answering brief, Hui/MTF
argues that MDWS’s point of error is not reviewable by the court
because MDWS seeks clarification of language in the Commission’s
D&O but does not argue that the Commission’s alleged error
affected MDWS’s rights or interests. Hui/MTF reasons that
because MDWS sought and was issued water use permits in the
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amounts requested, any treatment of their point of error would be
an “advisory opinion.” Hui/MTF accordingly requests that the
court dismiss MDWS’s cross-appeal.
Hui/MTF’s argument is well-taken. This court has
recently affirmed its practice not to issue “advisory opinions on
abstract propositions of law.” Kemp v. State of Hawai#i Child
Support Enforcement Agency, 111 Hawai#i 367, 385, 141 P.3d 1014,
1032 (2006)) (citing Kona Old Hawaiian Trails Group v. Lyman, 69
Haw. 81, 87, 734 P.2d 161, 165 (1987)). This is a longstanding
value of the court.
The duty of this court, as of every other judicial tribunal,
is to decide actual controversies by a judgment which can be
carried into effect, and not to give opinions upon moot
questions or abstract propositions, or to declare principles
or rules of law which cannot affect the matter in issue in
the case before it.
Wong v. Bd. of Regents, 62 Haw. 391, 394-95, 616 P.2d 201, 204
(1980) (citing Anderson v. Rawley Co., 27 Haw. 150, 152 (1923))
(further citations omitted).
MDWS’s point of error seeks resolution of an abstract
proposition because any possible resolution of MDWS’s point of
error would not affect MDWS’s right—or any other party’s right—to
the water use permits issued by the Commission. MDWS sought
permits for 1.042 mgd for the Kepaniwai Well (Well No. 5332-05),
and 1.359 mgd for the #Îao Tunnel (Well No. 5332-02). The
Commission found that MDWS’s applications met all the permitting
criteria and awarded the permits in full. Analysis of MDWS’s
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point of error would not affect this determination because MDWS’s
request was granted, even without the requested treatment as a
public trust use. MDWS’s cross-appeal is therefore dismissed.
B. The Commission Failed To Enter Findings of Fact and
Conclusions of Law Regarding The Effect Of Its Amended IIFS
On Traditional And Customary Native Hawaiian Practices.
OHA and Hui/MTF argue that the IIFS established by the
Commission did not protect traditional and customary native
Hawaiian rights to the extent feasible. More specifically, both
parties contend that the Commission erred in failing to
articulate FOF and COL regarding the impact of its decision on
traditional and customary native Hawaiian rights. OHA also
argues that the Commission failed to weigh traditional and
customary rights when it balanced instream values and noninstream
uses.
The Commission articulated a general conclusion of law
relevant to this point of error:
19. In addition to appurtenant rights when practiced for
subsistence, cultural and religious purposes, traditional
and customary rights include, but are not limited to,
kuleana water for domestic purposes, kalo cultivation, and
other irrigation purposes, and the gathering of hihiwai,
opae, o#opu, limu, thatch, ti leaf, aho cord, and medicinal
plants for subsistence, cultural, and religious purposes.
COL 19 is, in large part, a quotation from HRS § 174C-101(c), the
provision in the water code protecting native Hawaiian rights; it
provides an illustrative list of the activities that can be
protected under the water code. During the hearing, Hui/MTF and
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OHA presented several witnesses who testified about native
Hawaiian practices specific to Nâ Wai #Ehâ, and the Commission
found several facts on the subject. First, as for historical
practices, the Commission found several facts indicating a
distinct connection between Nâ Wai #Ehâ and Hawaiian history and
culture. The Commission found:
34. Due to the profusion of fresh-flowing water in ancient
times, Nâ Wai #Ehâ supported one of the largest populations
and was considered the most abundant area on Maui; it also
figured centrally in Hawaiian history and culture in
general.
35. The abundance of water in Nâ Wai #Ehâ enabled extensive
lo#i kalo (wetland kalo) complexes, including varieties
favored for poi-making such as “throat-moistening lehua
poi.”
[. . .]
40. In addition to extensive agricultural production,
traditional and customary practices thrived in Nâ Wai #Ehâ,
including the gathering of upland resources, such as thatch
and ti, and protein sources from the streams, including
#o#opu, #ôpae, and hihiwai.
[. . .]
43. The waters of Nâ Wai #Ehâ were renowned for the
traditional and customary practice of hiding the piko, or
the naval cord of newborn babies. “[T]he spring Eleile
contained an underwater cave where the people of the area
would hide the piko (umbilical cords) of their babies after
birth. . . . The location of where one buries or hides the
piko is a traditional custom that represents Native Hawaiian
cultural beliefs about an individual’s connection to the
land.”
44. Upper #Îao Valley contained the royal residences of
chiefs in both life and the afterlife. In a secret
underwater cave, Native Hawaiians hid the bones of “all the
ruling chiefs who had mana and strength, and the kupua, and
all those attached to the ruling chiefs who were famous for
their marvelous achievements. There were several hundred in
all who were buried there.” Thus, the burial of sacred
chiefs required a deep freshwater body to ensure the utmost
protection of their bones.
45. Nâ Wai #Ehâ is home to several important heiau. Of
particular significance are Haleki#i and Pihana Heiau,
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located between Waiehu and #Îao Streams. These heiau were
re-consecrated in 1776 as an offering before the famous
battle between Hawai#i and Maui. It is said that
Kalanikaukooluaole, a high chiefess and daughter of
Kamehamehanui, bathed in the stream water near the heiau,
before she entered the heiau.
[. . .]
54. The spiritual practice of hi#uwai, also known as kapu
kai, often occurred around the time of makahiki, when
individuals “would go into the rivers or into the ocean in
order to do a cleansing for the new year[.]” This type of
cleansing, which required immersion in the water, was also
conducted “before you start or end certain ceremonies[.]”
For ceremonies dedicated to Kâne, “having a hi#uwai in a
stream magnifies the mana[.]”
The Commission heard testimony explaining that native
Hawaiian practices still continue in Nâ Wai #Ehâ:
51. Despite significant challenges, some Native Hawaiian
practitioners in Nâ Wai #Ehâ continue to exercise
traditional and customary rights and practices, including
“gathering stream life such as hihiwai, #ôpae, #o#opu, and
limu for subsistence and medicinal purposes,” as well as
“cultivating taro for religious and ceremonial uses,
gathering materials for hula, lua (ancient Hawaiian martial
arts), and art forms.”
[. . .]
53. Kumu hula Akoni Akana gathers materials such as hau,
palapalai, la#î, and laua#e from Waihe#e and Waiehu for hula
ceremonies and performances. “As part of the protocol for
gathering these items, we always soak the leaves we gather
in the stream flow nearby. This practice necessitates a
flowing stream.”
[. . .]
55. Other practitioners would like to expand the scope of
their traditional and customary practices and plan to do so
if water is returned to the streams. For example, Hôkûlani
Holt-Padilla testified that “[m]any families seek to
reestablish the tradition of growing kalo” in Nâ Wai #Ehâ.
The Commission also found facts to explain the
connection between current traditional and customary practices
and streamflow levels:
49. Cultural experts and community witnesses provided
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uncontroverted testimony regarding limitations on Native
Hawaiians’ ability to exercise traditional and customary
rights and practices in the greater Nâ Wai #Ehâ area due to
the lack of freshwater flowing in Nâ Wai #Ehâ’s streams and
into the nearshore marine waters.
50. “#O#opu must once have been plentiful in Nâ Wai #Ehâ
streams; the wind in Waihe#e is called ka makani kili#o#opu,
which means the wind that brings the faint odors of the
#o#opu.” Today, however, “[i]t is very difficult to find
#ôpae, hihiwai, and #o#opu in the streams of Nâ Wai #Ehâ,
large portions of which are frequently dry.”
[. . .]
57. According to testimony, “Nâ Wai #Ehâ continues to hold
the potential to once again support enhanced traditional and
customary rights and practices if sufficient water is
restored.” Restoring streamflow to Nâ Wai #Ehâ “would
enormously benefit” Native Hawaiians and other communities
who seek to reconnect with their culture and live a self-
sustaining lifestyle, and more people would be able to
engage in traditional and customary practices with more
water.
58. Testimony contended that “Restoration of mauka to makai
flow to the streams is critical to the perpetuation and
practice of Hawaiian culture in Nâ Wai #Ehâ.” “If we are not
able to maintain our connection to the land and water and
teach future generations our cultural traditions, we lose
who we are as a people.”
59. According to testimony, “The return of the waters of Nâ
Wai #Ehâ to levels that can sustain the rights of native
Hawaiians and Hawaiians to practice their culture will
result in the betterment of the conditions of native
Hawaiians and Hawaiians by restoring spiritual well-being
and a state of ‘pono’ (goodness, righteousness, balance) to
the people and communities of Nâ Wai #Ehâ.”
60. Testimony contended that cold, free-flowing water is
essential for kalo cultivation, which in turn is integral to
the well-being, sustenance, and cultural and religious
practices of native Hawaiians and Hawaiians. Kalo
cultivation provides not only a source of food, but also
spiritual sustenance, promotes community awareness and a
connection to the land, and supports physical fitness and
mental well-being.
OHA and Hui/MTF both argue that the Commission had a
duty to make specific findings of fact and conclusions of law
with regard to the effect of its D&O on traditional and customary
native Hawaiian practices. Their argument is grounded in Ka
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Pa#akai O Ka #Aina v. Land Use Comm’n, 94 Hawai#i 31, 7 P.3d 1068(2000).
In Ka Pa#akai O Ka #Aina, native Hawaiian groups
appealed the State Land Use Commission’s (“LUC”) grant of a land
developer’s petition to reclassify land in a conservation
district to an urban district. 94 Hawai#i at 33, 7 P.3d at 1070.
The LUC held hearings on the petition, and reached several
findings of fact and conclusions of law regarding native Hawaiian
practices. Id. at 36-37, 7 P.3d at 1073-74. The LUC determined
that the developer would develop and implement a Resource
Management Plan (“RMP”) to coordinate coastal access for the
purpose of traditional and customary practices; the LUC
specifically found that one family gathered salt in the area, and
that the shoreline is used for fishing, gathering limu, #opihi,
and other resources. Id. at 37, 7 P.3d at 1074. The LUC
mandated that the RMP will preserve these practices,
archaeological sites and the coastal trail, and required the
developer to preserve and protect native Hawaiian rights. Id. at
38, 39, 7 P.3d at 1075, 1076. On appeal, this court recognized
that Article XII, section 7 of the state constitution “places an
affirmative duty on the State and its agencies to preserve and
protect traditional and customary native Hawaiian rights,” while
giving the State and its agencies the power to discharge this
duty. Id. at 45, 7 P.3d at 1082. The court then provided an
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“analytical framework” to guide the State in its decisions
affecting native Hawaiian rights, specifying that the agency
must, at a minimum, articulate:
(1) the identity and scope of “valued cultural, historical,
or natural resources” in the petition area, including the
extent to which traditional and customary native Hawaiian
rights are exercised in the petition area; (2) the extent to
which those resources-including traditional and customary
native Hawaiian rights-will be affected or impaired by the
proposed action; and (3) the feasible action, if any, to be
taken by the LUC to reasonably protect native Hawaiian
rights if they are found to exist.
Id. at 46-47, 7 P.3d at 1083-84 (internal footnotes omitted).
The court held that the LUC failed to satisfy those criteria for
several reasons: (1) the LUC did not enter definitive findings
regarding the extent of the native Hawaiian practices, but rather
delegated the determination to the developer; (2) the LUC did not
enter findings about the practices undertaken outside the RMP,
despite evidence that the area outside the RMP could require
protection; (3) “the LUC made no specific findings or conclusions
regarding the effects on or the impairment of any Article XII,
section 7 uses, or the feasibility of the protection of those
uses.” Id. at 48-49, 7 P.3d at 1085-86 (emphasis in original).
As the court explained, “the promise of preserving and protecting
customary and traditional rights would be illusory absent
findings on the extent of their exercise, their impairment, and
the feasibility of their protection.” Id. at 50, 7 P.3d at 1087.
Hui/MTF and OHA argue that the Commission’s FOF/COL D&O
do not satisfy the analytical framework of Ka Pa#akai O Ka #Aina.
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They cite the Commission’s own findings that the lack of
freshwater in Nâ Wai #Ehâ limits the native Hawaiian practices of
kalo cultivation and gathering, and argue that the Commission did
not fulfill its duty to protect native Hawaiian rights because
“nothing in the Decision indicates that the majority even
considered the feasibility of protecting those traditional and
customary rights.”
The court concludes that Hui/MTF and OHA are correct;
the Commission’s FOF/COL D&O, while very thorough in several
respects, including its documentation of the area’s native
Hawaiian practices, lacks findings or conclusions articulating
the effect of the amended IIFS on the native Hawaiian practices
of Nâ Wai #Ehâ. It also lacks findings or conclusions explaining
the feasibility of protecting the practices. This is
particularly apparent with regard to kalo cultivation,
considering the Commission’s decision not to restore any
streamflow to #Îao and Waikapû Streams. In its FOF/COL D&O, the
Commission identified seventeen kuleana ditch/pipe systems, and
divided those seventeen into two categories: the fourteen that
are connected to one of the primary distribution systems (and
thus rely on diverted water for their kalo cultivation), and the
three that divert water directly from a stream (and thus rely on
sufficient instream flows from which to pull their water). While
the Commission’s analysis considered the needs of the former
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category of kuleana users, there was no mention of the kuleana
users who access their water directly from the streams. This is
particularly troublesome for the users who take from two of the
ditches, described in the record as the Pellegrino and Duey
Kuleana Ditches, which draw water directly from Waikapû and #Îao
Streams, respectively. The users on those Ditches testified that
their water is insufficient, and urged the Commission to amend
upward the IIFS for their streams so they could irrigate their
lo#i kalo. The Commission’s FOF/COL D&O justifies its decision
not to restrict diversions from Waikapû and #Îao Streams due to
the streams’ lack of potential to support certain native species,
described as amphidromous.16 The Commission does not state the
effect of this decision, which is to deny the Pellegrino and Duey
Ditch users the water they need to cultivate the lo#i kalo on
their property; furthermore, the Commission did not articulate
whether it would be feasible to return flow sufficient to support
the kuleana.
In addition to neglecting this portion of the kalo
cultivation analysis, the FOF/COL D&O does not provide any
analysis of the decision’s effect on gathering rights. HC&S
argues that the Commission’s FOF/COL were adequate on this point,
reasoning that “if instream fauna populations increase as a
16
A full discussion of this analysis follows in Section V.C.1.
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result of the amended IIFS as [the Commission] anticipates they
will, that would support gathering practices.” This argument
fails for two main reasons. First, the FOF/COL do not satisfy
the analytical framework articulated in Ka Pa#akai O Ka #Aina. It
appears as though the first step of analysis, identification of
the scope of traditional and customary native Hawaiian rights, is
satisfied by the above-quoted FOF regarding gathering rights,
which identify the several items gathered from Nâ Wai #Ehâ.
However, subsequent steps of the analysis require the
administrative agency to articulate “the extent to which those
resources [. . .] will be affected or impaired by the proposed
action,” and then to specify what feasible action can be taken to
protect native Hawaiian rights. Ka Pa#akai O Ka #Aina, 94 Hawai#i
at 47, 7 P.3d at 1084. The FOF/COL do not contain any
information on these two steps of analysis. Furthermore, even if
the court accepted HC&S’s post hoc explanation to be adequate,
this would only resolve rights to gather amphidromous species,
but the Commission concluded that gathering rights in Nâ Wai #Ehâ
also encompassed several other species. The Commission’s
analysis does not examine whether the amended IIFS impact these
gathering rights, or whether any negative impact may be avoided.
Having concluded that the Commission did not discharge
its duty with regard to the feasibility of protecting native
Hawaiian rights, the court must vacate the Commission’s FOF/COL
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D&O and remand to the Commission for further consideration of the
effect the IIFS will have on native Hawaiian practices, as well
as the feasibility of protecting the practices. Should the
Commission determine that the amended IIFS will negatively impact
protected native Hawaiian practices and that protection of those
practices is feasible, the Commission may enter amended IIFS to
reflect that protection.
C. The Commission’s D&O Does Not Adequately Justify Its
Decision Not To Restore Streamflow To The #Îao And Waikapû
Streams.
Hui/MTF challenges the Commission’s failure to restore
flow to the #Îao and Waikapû Streams. Hui/MTF argues that such
an action was not supported by the record and disregards all
instream uses other than sustaining amphidromous species.
Hui/MTF further contends that the Commission did not properly
weigh the competing interests in this case, and that the
Commission arbitrarily misused the USGS’s temporary flow release
figures.
1. The Commission’s Analysis Regarding Instream Use Is
Incomplete.
The Commission explained its reasoning in the FOF/COL
D&O section titled “The Commission’s Analysis and Conclusions.”
That section of analysis shows a clear emphasis placed on the
potential to restore amphidromous species in the streams. This
was a main area of controversy in the hearing; the parties
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presented the Commission with several expert witnesses, all
promoting different opinions on the issue.
The term “amphidromous” describes species of fish that
undergo regular, obligatory migration between fresh water and the
sea at some stage in their life cycle other than the breeding
period. Native Hawaiian amphidromous species exhibit “freshwater
amphidromy,” where spawning takes place in fresh water, and the
newly hatched larvae are swept into the sea by stream currents.
While in the sea, the larvae undergo development as zooplankton
before returning to fresh water to grow to maturity. The
Commission found that these species suffer in Nâ Wai #Ehâ due to
the disruption of natural flow caused by the offstream water
diversions; the diversions degrade or destroy habitat, diminish
food sources, diminish larval drift by capturing eggs and larvae,
and impair flows necessary to transport larvae to the ocean.
The Commission also found that discharge of sufficient duration
and volume is necessary to attract and accommodate upstream
migration of post-larval fish, mollusks, and crustaceans; there
is a direct correlation between stream volume and recruitment,
such that increased streamflow correlates with increased
recruitment at the stream mouth.
Dr. Mark Eric Benbow, an Assistant Professor at
Michigan State University, testified on behalf of Hui/MTF as an
expert in aquatic biology, ecology, and the Central Maui streams.
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Dr. Benbow testified that the amphidromous life cycle requires
continuous mauka-to-makai flow, though he acknowledged that he
did not know the precise volume and duration necessary to sustain
the species. Dr. Benbow reached his opinions after conducting
multi-year studies of Central Maui streams in which he found that
the largest migrations of species occur in streams with minimal
or no diversions, while the greatest reductions in recruitment
during drought occur in diverted streams. Dr. Benbow made two
specific recommendations to the Commission: first, he recommended
that the Commission require sufficient flow levels to increase
the quantity and quality of habitat in order to have a
functioning reproduction population of organisms; second, he
recommended maintaining continuous mauka-to-makai flow in Nâ Wai
#Ehâ. Dr. Benbow testified that, without additional studies, he
cannot recommend maintaining the streams at less than 75 percent
of their median flow. As the Commission found, however, Benbow’s
75-percent figure was an “informed guess,” and the precise volume
and duration of streamflow needed to sustain the life cycle of
amphidromous organisms is not known.
John Ford, Program Director and Office Lead for SWCA
Environmental Consultants, testified on behalf of HC&S as an
expert in aquatic biology, with specific emphasis on native
species in Hawaiian streams. Ford presented a different account
of the importance of mauka-to-makai flow for amphidromous
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species. Ford distinguished “ecological connectivity” from
“physical connectivity”; the former is the term for streamflows
sufficient to allow the normal distribution of a species within
an entire watershed, the latter is the term for continuous flow
from a specific stream’s headwaters to its mouth. Ford noted
that there are naturally interrupted and intermittent streams in
Hawai#i with amphidromous organism populations, and suggested
that amphidromous species therefore may not require the
continuous physical connectivity of each stream to sustain their
population.
HC&S retained Ford’s consulting company, SWCA, to
evaluate amphidromous species in Nâ Wai #Ehâ. In 2007 and early
2008, SWCA performed a series of larval drift sampling to
evaluate the reproduction of amphidromous species; this survey
lasted one week in total, so the Commission found it was “just a
snapshot” and could not support “broad extrapolations over time”
or “to other streams.” SWCA observed that Waihe#e River was the
only stream in Nâ Wai #Ehâ with significant reproductive
populations of native amphidromous species. SWCA also observed
amphidromous species in Waikapû and #Îao Streams, which may be
evidence of ecological connectivity as those streams do not have
physical connectivity to the sea except during prolonged intense
flooding events. There may be another explanation, however, as
Dr. Benbow testified that he and Division of Aquatic Resources
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biologist Skippy Hau have planted specimens of amphidromous
species above the diversions of those streams. SWCA concluded
that ecological connectivity exists under diverted conditions in
the Waihe#e River and Waiehu Stream. Ford opined that the
addition of flow to Waihe#e River and Waiehu Stream would be the
most beneficial for increasing populations of native amphidromous
species in Nâ Wai #Ehâ. With regard to #Îao Stream, SWCA’s final
conclusion was that the channelization “is the primary factor”
impeding recruitment of amphidromous species. SWCA also found no
definitive evidence that Waikapû Stream ever flowed continuously
from mauka to makai.
The Commission’s Final FOF/COL D&O accepted Ford’s view
of the streams with regard to amphidromous species. As the
Commission explained in its final analysis section, it
concluded that the restorative potentials are highest for
Waihe#e River and Waiehu Stream. #Îao Stream can be restored
to enhance recruitment and increase stream life, but its
reproductive potential is severely limited because of
extensive channelization in the 2.5 miles immediately above
its mouth. Waikapû Stream likely has minimal to no
reproductive potential, because there probably was no
pre-diversion continuous flow to the mouth, and even if
there had been continuous flow, Kealia Pond and the delta
below most likely inhibited recruitment.
Hui/MTF argues that the Commission’s treatment of #Îao and
Waikapû Streams is not supported by the record and disregards all
instream uses other than amphidromous species.
In setting the IIFS, the Commission was charged with
weighing “present or potential instream values.” HRS § 174C-
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71(2)(D). The water code contains a definition of instream uses,
as well as an illustrative list of examples. It provides:
“Instream use” means beneficial uses of stream water for
significant purposes which are located in the stream and
which are achieved by leaving the water in the stream.
Instream uses include, but are not limited to:
(1) Maintenance of fish and wildlife habitats;
(2) Outdoor recreational activities;
(3) Maintenance of ecosystems such as estuaries,
wetlands, and stream vegetation;
(4) Aesthetic values such as waterfalls and scenic
waterways;
(5) Navigation;
(6) Instream hydropower generation;
(7) Maintenance of water quality;
(8) The conveyance of irrigation and domestic water
supplies to downstream points of diversion; and
(9) The protection of traditional and customary
Hawaiian rights.
HRS § 174C-3. As Hui/MTF shows, the record contains substantial
evidence that establishing mauka-to-makai flow in all of the
streams of Nâ Wai #Ehâ would support the public interest by
fostering many of the statutorily-designated instream uses.
Hui/MTF argues that the Commission focused on amphidromous
species, a subset of parenthesis (1) in the statute, and
disregarded evidence supporting the other instream uses.
HC&S replies that the Commission is not required to
restore streamflow, or even to establish an IIFS, for each
stream. The water code requires the Commission to establish IIFS
in some instances; as the code provides, the Commission “shall”
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set an IIFS “in order to protect the public interest”. HRS §
174C-71(2)(A). Accordingly, in resolving the petition to amend
the IIFS for Nâ Wai #Ehâ, the Commission was not precluded from
retaining the existing IIFS in some or all of the streams, had it
concluded that the public interest was sufficiently protected by
the existing IIFS.
In undertaking a close review of the Commission’s
decision, it is apparent that the decision focuses on the flow
standards as they relate to amphidromous species, and justifies
the decision not to restore water to #Îao and Waikapû Streams due
to the conclusion that those streams show limited “reproductive
potential” for amphidromous species. HC&S, the Commission, and
WWC draw the court’s attention to the evidence in the record,
especially the SWCA evaluation reviewed supra, that supports the
Commission’s conclusion. However, Hui/MTF’s point of error does
not merely contend that the Commission’s decision is not
supported by the record; it also alleges that the Commission
erred in disregarding the evidence of other instream uses. In
Waiâhole I, this court held that where “the record demonstrates
considerable conflict or uncertainty in the evidence, the agency
must articulate its factual analysis with reasonable clarity,
giving some reason for discounting the evidence rejected.”
Waiâhole I, 94 Hawai#i at 163-64, 9 P.3d at 475-76. In its
FOF/COL D&O, the Commission does not explain its focus on
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amphidromous species above the evidence of other instream uses.
Even if the #Îao and Waikapû Streams may not support amphidromous
species, evidence that they can support other instream uses must
be weighed against noninstream uses, as required by HRS § 174C-
71(2)(D). The Commission erred in not considering this evidence;
on remand, the Commission must undertake and articulate this
analysis. Waiâhole I, 94 Hawai#i at 158, 9 P.3d at 470(remanding where the Commission “made invalid, inadequate, or
incomplete findings.”) (citation).
2. The Commission Did Not Err In Using USGS Data As A
Starting Point For Analysis.
In federal fiscal year 2006, the USGS initiated a study
of Nâ Wai #Ehâ. The study consisted of eight parts: (1)
compiling and analyzing existing information relevant to the
Waihe#e River, and Waiehu, #Îao, and Waikapû Streams, (2)
conducting baseline reconnaissance surveys of the streams to
identify sites of diversion and return flow and significant
gaining and losing reaches, (3) establishing low-flow partial-
record stations in reaches with flowing water to characterize
natural and current diverted flows in Nâ Wai #Ehâ streams, (4)
establishing temperature-monitoring sites in reaches with flowing
water to provide information on temperature variations for
diverted and undiverted conditions, (5) monitoring the frequency
of dry days in selected reaches of the diverted streams to
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establish the number of days during which continuous mauka-to-
makai flow is available for the upstream movement of native
species, (6) surveying the presence or absence of native and non-
native aquatic species in selected stream reaches to provide
baseline data for assessing effects of streamflow restoration,
(7) collecting macrohabitat, microhabitat, and channel-geometry
information in selected study reaches downstream from existing
diversions to characterize the effects of diversions on habitat
for native stream macrofauna, and (8) analyzing data and
producing a report summarizing the study findings.
Photographic information from cameras mounted at three
selected sites downstream of all diversions established that from
September 2006 to July 2007, North Waiehu Stream was dry about 79
percent of the time, #Îao Stream was dry about 70 percent of the
time, and Waikapû Stream was dry about 37 percent of the time.
At the time of the Commission’s decision, USGS had requested, as
part of its study, to partially or fully restore mauka-to-makai
flow to Waihe#e River, Waiehu Stream, and #Îao Stream17 to allow
measurements of streamflow, infiltration, and physical habitat
for different flow conditions in sections of the stream that are
commonly dry due to diversions. The proposal sought to release
water into the streams in three phases, each involving a higher
17
USGS Hydrologist Delwyn Oki stated that controlled releases would
be helpful for Waikapû Stream, too, and could be developed in the future.
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flow than the last; each phase would be maintained for about a
month and long enough to allow flow conditions to stabilize for
observation.
For Waihe#e Stream, USGS proposed flows near the coast
of 6.5 mgd, 13 mgd, and 26 mgd; this would require flows just
downstream of the Spreckels Ditch diversion of 10 mgd, 17 mgd,
and 30 mgd, respectively, for each of the three phases. For
North and South Waiehu Streams, USGS proposed flows near the
coast18 of 0.6 mgd, 1.6 mgd, and 2.6 mgd. USGS estimated that
this would require the following flows: South Waiehu Stream at
Spreckels Ditch would be 0.9 mgd, 1.3 mgd, and 1.6 mgd,
respectively; North Waiehu Stream at the North Waiehu Ditch would
be 1.6 mgd, 2.2 mgd, and 2.9 mgd, respectively. For #Îao Stream,
USGS proposed flows near the coast of 3.2 mgd, 9.7 mgd, and 16
mgd; this would require flows just downstream of the #Îao-
Maniania Ditch diversion of 9.5 mgd, 16 mgd, and 22 mgd,
respectively. For the Waikapû Stream, USGS deferred controlled
releases entirely.
With regard to the USGS controlled release proposals,
the Commission specifically found:
606. “The results [following the controlled releases] are
intended to be used along with other biological and
hydrological information in development, negotiations, or
mediated settlements for instream flow requirements.”
18
Recall that the North and South Waiehu Streams join downstream of
diversions and flow together until reaching the sea.
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(Gingerich and Wolff, 2005).
The quote originated in a 2005 USGS Study of Nâ Wai #Ehâ; HC&S’s
biologist, Thomas R. Payne, quoted that language to make his
greater point that the USGS controlled releases would not be, in
his opinion, conclusive to determine IIFS. This is because the
controlled releases are designed to study the effect of flow
conditions on habitat, not to predict the biological response of
the stream to the flow condition; therefore, the scientists have
to infer the effect of streamflow on population, “without any
direct quantification or prediction of individual species.” In
Payne’s words, “considerable work remains to be done before
defensible instream flow standards could be recommended from [the
controlled release] studies alone.”
In its Final FOF/COL19 the Commission concluded that:
The most credible proposals for amending the IIFS are USGS’s
proposed controlled flows. Of the three proposed phases, the
[first] phase, totaling 12.5 mgd and comprised of 10.0 mgd
for Waihe#e River, 1.6 mgd for North Waiehu Stream, and 0.9
mgd for South Waiehu Stream, provide the best balance
between instream values and offstream uses, and are the only
viable IIFS when stream flows are low and all available
practical alternatives are in use.
Hui/MTF argues that the Commission “arbitrarily
misused” USGS’s temporary flow release figures, noting that the
USGS’s figures were not proposals for IIFS, but rather a proposal
for scientific study of the area. Hui/MTF argues that USGS
19
Dr. Miike’s Proposed FOF/COL set different IIFS, and did not reach
this finding.
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certainly did not consider instream values, and adoption of USGS
flow levels could not possibly discharge the Commission’s duty to
balance instream values and noninstream uses. OHA shares
Hui/MTF’s criticism; it describes the above-quoted COL as
“inexplicabl[e].”
In making their argument, Hui/MTF and OHA appear to
misstate the Commission’s actual treatment of the USGS figures.
Even though COL 261, quoted above, suggests that the Commission
simply adopted the USGS figures, the entirety of the FOF/COL D&O
actually indicate that the Commission merely utilized the USGS
figures as a starting point. First, the Commission explained the
utility of the USGS figures; the figures “were chosen to
correspond to specified flows at the stream mouths, after
adjusting for losses into the stream beds in the lower reaches of
each stream.” As described earlier, the Commission focused its
analysis on establishing mauka-to-makai streamflow in streams
that would support amphidromous species; for this the USGS
estimation of loss in the streams’ losing reaches is helpful
data. Second, the Commission did not simply adopt the USGS
figures, but rather adapted one of the three USGS figures as part
of its analysis; the USGS proposed release for #Îao Stream was
9.5 mgd, but the Commission decided not to limit diversions of
that stream based on its conclusion that restoration was unlikely
to support amphidromous species. Even though, as explained
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above, this reasoning does not adequately discharge its duties in
this case, the Commission did not err in utilizing the USGS
figures as a starting point for its analysis.
D. The Commission Violated The Public Trust In Its Treatment Of
Diversions.
Hui/MTF argues that the Commission erred in its
estimation of HC&S, MDWS, and WWC’s diversions. Hui/MTF alleges
that the Commission did not hold the diverters to their burden of
proof and then “penalized the public trust” for the absence of
data, that the Commission failed to consider variable offstream
demands in setting the IIFS, and that the Commission did not
properly require the diverters to justify system losses. Both
Hui/MTF and OHA argue that the Commission erred in its
consideration of Well No. 7; Hui/MTF also argues that the
Commission erred in its consideration of recycled water as an
alternative source. Finally, Hui/MTF contends that the
Commission erred in calculating HC&S’s acreages. The following
sections consider each argument in turn.
1. The Commission Did Not Err In Articulating The Burden
Of Proof In Determining An IIFS.
Hui/MTF argues that the Commission erred because it did
not hold the diverting parties to a burden of proof; they argue
that Waiâhole I requires noninstream users to justify their
diversions in light of the water uses protected by the public
trust. The flaw of their argument is that the portions of
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Waiâhole I that they cite apply to the WUPA process. In the
context of IIFS petitions, the water code does not place a burden
of proof on any particular party; instead, the water code and our
case law interpreting the code have affirmed the Commission’s
duty to establish IIFS that “protect instream values to the
extent practicable” and “protect the public interest.” In re
Water Use Permit Applications “Waiâhole II”, 105 Hawai#i 1, 11,
93 P.3d 643, 653 (2004); HRS § 174C-71(2)(A). Accordingly, our
review of the Commission’s analysis of the stream diversions must
focus on whether or not the Commission properly discharged this
duty. Where the Commission’s decisionmaking evinces “a level of
openness, diligence, and foresight commensurate with the high
priority these rights command under the laws of our state,” the
decision satisfies close look review governing public trust
resources. Wai#ola, 103 Hawai#i at 422, 83 P.3d at 685.
2. The Commission Did Not Err In Using Dr. Fares’s Model
Of Irrigation Requirements As A Starting Point For
Analysis.
Hui/MTF argues that the Commission erred in its
treatment of testimony from Dr. Ali Fares, a hydrologist who
testified as an expert witness for Hui/MTF, OHA, and MDWS. Dr.
Fares is an Associate Professor in the Department of Natural
Resources and Environmental Management at the University of
Hawai#i, Mânoa. Dr. Fares testified regarding his estimation of
the optimal irrigation requirements for HC&S’s sugar cane fields.
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Dr. Fares’s model considered historical rainfall data,
evapotranspiration or pan evaporation data20, and data regarding
the soil; he then calculated, over the historical period covered
by the rainfall data, how much irrigation water would have been
required to grow the sugar crop. Dr. Fares statistically
analyzed the results to calculate the average amount of
irrigation water needed in the wettest year and the driest year,
as well as the amount of water that would have supplied the
irrigation requirement between the two extremes. Dr. Fares
calculated the optimal irrigation requirements using the 80
percent probability standard because it’s the industry standard
utilized in both government and the private sector. Under the 80
percent probability standard, water meeting or exceeding
requirements is available four out of every five days.
HC&S employees testified that they used a different
model called a water balance model, which differs from Fares’s
model in that it uses “real-time data” collected from four rain
stations and two evaporation stations located in the west Maui
fields. The Commission found that real-time data is more
reliable than long-term daily averages to calculate irrigation
requirements.
20
Evotranspiration (or evapo-transpiration) is the loss of water
from the soil by evaporation and by transpiration from plants growing in the
soil. Pan evaporation is a measurement of water from an open pan, which can
be correlated to the water demands of a specific crop.
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Both models also consider irrigation efficiency, or the
percentage of water that is actually delivered to the plants, as
opposed to the amount that is channeled through, and possibly
lost in, the irrigation system. Fares used an 85 percent
irrigation efficiency figure for his calculations; this is
industry standard. HC&S’s estimations takes into account the
different types of tubing, the length of tubes, and variations in
topography; HC&S’s estimations utilize an 80 percent efficiency
standard. The Commission accepted Fares’s use of 85 percent
irrigation efficiency.
HC&S stressed the importance of basing water management
on actual field conditions, rather than models. The Commission
found that Fares had not personally visited the HC&S fields or
inspected the HC&S irrigation system; he also never studied
actual water usage for sugar cane. Moreover, HC&S
representatives testified that Fares’s model does not account for
several factors increasing water usage, including water run
through irrigation lines to detect leaks and irrigation water
that is “lost” because it is applied just before it rains. HC&S
also testified that it is impractical to assume that HC&S can
irrigate to restore soil moisture exactly when necessary; this is
not always the case for several reasons, including the facts that
only a fraction of the fields actually receive water at any given
time, and sometimes fertilizers and herbicides preclude watering.
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In its FOF/COL D&O, the Commission accepted Fares’s
estimates of irrigation requirements, but added five percent to
account for the above-listed factors identified by HC&S that
Fares’s model does not incorporate. Hui/MTF argue that this was
error because the five percent increase is “random” and accounts
for “unsubstantiated excuses.” HC&S responds that the Commission
was not limited to choosing between Dr. Fares’s model and HC&S’s
estimates, but rather that the Commission was empowered to
utilize the information presented as it saw fit, as long as its
decision was supported by the evidence.
The court has held that, due to the fact that the
Commission must articulate an IIFS at an “early planning stage”
of water management, the Commission “need only reasonably
estimate instream and offstream demands.” Waiâhole I, 94 Hawai#i
at 155 n.60, 9 P.3d at 467 n.60. The court also explained that
the IIFS may be based “not only on scientifically proven facts,
but also on future predictions, generalized assumptions, and
policy judgments.” Waiâhole I, 94 Hawai#i at 155, 9 P.3d at 467.
In this case, the Commission concluded, based on the above-listed
facts showing an incongruity between Fares’s model and field
conditions, that the model would be insufficient to quantify
actual irrigation requirements. The Commission then added five
percent to Fares’s figures to account for this difference. The
Commission fully explained its logic in predicting the irrigation
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requirements, and it settled on a figure that is a small
deviation from the Hui/MTF expert’s proposal. Faced with the
question of whether the record lacks substantial evidence to
support the estimates, the answer must be no; the court therefore
concludes that the Commission did not err in its use of Fares’s
model numbers as a starting point in articulating irrigation
requirements for HC&S’s fields.
3. The Commission Erred In Calculating HC&S’s Acreage.
Hui/MTF argues that the Commission erred in including
fields 921 and 922 when calculating HC&S’s acreage. Hui/MTF
alleges error on two grounds: first, the Commission wrongfully
took judicial notice of facts affecting an alternative water
source for the fields, and second, the soil quality of fields 921
and 922 is poor and it is unreasonable to provide fresh water to
cultivate them.
As the Commission found, fields 921 and 922 are sandy
“scrub land” that HC&S had never cultivated until sometime
between 1995 and 1997 when it entered into an agreement with Maui
Land and Pine (“MLP”), under which MLP delivered wastewater from
its pineapple cannery to irrigate the fields for seed cane.
After the close of evidence, the Commission took judicial notice
of newspaper reports that: (1) MLP announced that it would cease
pineapple operations, (2) Haliimaile Pineapple Company would
“revive” the fresh fruit operations, and (3) this “should not
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result in a restoration of the wastewater source.” Hui/MTF
argues that it was error for the Commission to take judicial
notice of these three “facts”.
Hawai#i Rules of Evidence (“HRE”) Rule 201, limits the
scope of judicial notice to facts “not subject to reasonable
dispute in that it is either (1) generally known within the
territorial jurisdiction of the trial court, or (2) capable of
accurate and ready determination by resort to sources whose
accuracy cannot reasonably be questioned.” HRE Rule 201(b). In
this case, the Commission took judicial notice of facts presented
in two newspaper articles. There is precedent for taking
judicial notice of facts as reported by newspapers. Application
of Pioneer Mill Co., 53 Haw. 496, 497 n.1, 497 P.2d 549, 551 n.1
(taking judicial notice that a land court judge had announced his
candidacy for public office, based upon newspaper articles
submitted by the parties). In this case, however, the Commission
went further than taking notice of facts reported in newspapers:
it predicted the impact of those facts on HC&S’s water supply.
HRE Rule 201 does not permit the Commission to take judicial
notice of a possible effect of a change in ownership in the
pineapple cannery. First, this prediction fits neither prong of
the relevant rule of evidence; the effect of the change of
ownership on HC&S’s water supply is neither “generally known
within the territorial jurisdiction” nor “capable of accurate and
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ready determination by resort to sources whose accuracy cannot
reasonably be questioned.” HRE Rule 201(b). Second, the
prediction that wastewater will no longer be available is purely
speculative. In fact, one of the Commission’s FOF contradicts
this speculation, stating “due to the shutdown of MLP’s cannery
operation, MLP mill wastewater will only be able to supply
approximately half of the irrigation requirements of Fields 921
and 922 in the future.” Furthermore, it is entirely possible
that the company that “revived” operations also “revived” the
practice of providing wastewater to HC&S. Hui/MTF are correct
that the Commission’s taking judicial notice in this instance was
improper.
Hui/MTF also argues that the Commission erred in
permitting HC&S to include fields 921 and 922 in its acreage
because it is marginal farm land, or, as found by the Commission,
“sandy ‘scrub land.’” Hui/MTF argues that the burden is on HC&S
to show “the propriety of draining water from public streams” to
irrigate this land which had been uncultivated until a wastewater
source was available.
The Commission found that fields 921 and 922 are
similar to field 920, another “sandy ‘scrub land’” field on which
HC&S ceased cultivation because it “has a very sandy soil and has
consumed more water than other fields.” The Commission also
explicitly excluded field 920 from HC&S’s acreage and water duty
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calculations, “because it has consumed more water because of the
porosity of its sandy soil and its use for seed cane.” HC&S
points to testimony from HC&S’s agronomist that HC&S is able to
grow sugar on those fields because the sandy area has loam soil
underneath it, thus permitting HC&S to achieve “good crop
growth.” Though HC&S draws the court’s attention to this
testimony in its briefing, this testimony is not included in the
Commission’s FOF/COL D&O. In fact, the Commission found no
explicit facts regarding the propriety of cultivating the fields;
instead the Commission included fields 921 and 922 in HC&S’s
acreage without explanation. As evinced by HC&S’s and the
Commission’s treatment of field 920, the wisdom of irrigating
fields 921 and 922 with Nâ Wai #Ehâ water is questionable. The
record does not contain sufficient analysis to support the
conclusion that fields 921 and 922 should be treated differently
from field 920. Similarly, the record does not contain
sufficient analysis showing that the Commission considered these
fields with “a level of openness, diligence, and foresight”
required when authorizing the diversion of our public trust res.
On remand, the Commission must reevaluate its determination that
HC&S should be permitted to divert Nâ Wai #Ehâ water to irrigate
fields 921 and 922.
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4. The Commission Erred In Its Treatment Of Some Of The
Diverters’ System Losses.
Hui/MTF also argues that the Commission erred in
failing to hold HC&S and WWC to their burdens of proof regarding
losses. Hui/MTF contends that diverting parties bear a burden of
justifying losses and adopting practicable mitigation. WWC
argues that there is no burden of proof on diverting parties in
an IIFS proceeding; WWC also notes that “[n]othing within HRS §
174C-71(2) mandates that the Commission consider or not consider
system losses. Likewise nothing within the public trust doctrine
mandates that the Commission consider or not consider system
losses.” HC&S responds that “some system loss, such as
evaporation from open ditches and reservoirs, is unavoidable and
not unreasonable,” and that the Commission’s determination of
system losses is reasonable and not clearly erroneous.
With regard to losses, the Commission found:
375. The great majority of WWC’s ditches are open and
unlined. All of WWC’s reservoirs are unlined.
376. WWC did not address the feasibility of minimizing the
losses from its system except to state that it “may . . . in
the future” have plans to line the unlined portions of their
system.
[. . .]
423. HC&S estimates that it loses 6-8 mgd through seepage
from the Waiale reservoir, depending on the level of the
reservoir. Seepage throughout the rest of the HC&S ditch and
reservoir system is estimated to be 3-4 mgd.
[. . .]
425. HC&S acknowledges that “high density polyethylene
lining could negate much of the seepage, not all of it” and
that concrete lining “is obviously another option.” HC&S
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has no estimates of the cost to line Waiale Reservoir or the
other reservoirs and ditches and has undertaken no
engineering or financial analysis of what it would take to
reduce the losses.
The Commission concluded that WWC and HC&S have “not established
the lack of practicable mitigating measures to address these
losses.” The Commission then “assum[ed]” that “losses could be
halved” by lining most of WWC’s reservoirs, and concluded that
WWC’s reasonable losses are 2.0 mgd. The Commission also deemed
HC&S’s reasonable losses to be 2.0 mgd, after estimating that
HC&S could line the Waiale Reservoir to prevent 6-8 mgd, and,
like WWC, could halve remaining losses.
First, in considering these losses, it is necessary to
recognize the magnitude of the losses. If the Commission’s
estimates are correct and system losses run between 13-16 mgd21,
then the minimal estimation of that loss is approximately twice
the 6.84 mgd the Commission estimated for deliveries to all
kuleana system users in Nâ Wai #Ehâ. The lowest estimation of
losses, 13 mgd, is higher than the total volume that the final
IIFS restore to the Waihe#e and Waiehu Streams.22 Briefly stated,
losses in the water system of Nâ Wai #Ehâ are massive. The
Commission’s order that HC&S line the Waiale Reservoir to prevent
a large portion of these losses is commendable and shows the
21
This includes 6-8 mgd for the Waiale Reservoir, 3-4 mgd for HC&S’s
water system, and 4 mgd for WWC’s water system.
22
This includes 10 mgd for Waihe#e Stream, 1.6 mgd for North Waiehu
Stream, and 0.9 mgd for South Waiehu Stream, for a total of 12.5 mgd.
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“diligence” and “foresight” expected of the Commission in its
management of the public trust.
Second, WWC contends that the Commission, when setting
an IIFS, does not have to consider system losses. The Commission
does not respond to the argument in its answering brief, but the
water code indicates that a diverter’s system losses may factor
into the Commission’s estimations of noninstream uses when it
sets an IIFS. The statute articulating the IIFS standards
mandates that the Commission “weigh the importance of the present
or potential instream values with the importance of the present
or potential uses of water for noninstream purposes, including
the economic impact of restricting such uses[.]” HRS § 174C-
71(2)(D). The plain meaning of the word “importance” requires
the Commission to judge the value of a party’s noninstream use
against the other present or potential uses. The value of
diverting water, only to lose the water due to avoidable or
unreasonable circumstances is unlikely to outweigh the value of
retaining the water for instream uses. Therefore, the Commission
did not err in considering losses.
However, it appears that the Commission erred in its
articulation of the burden of proof regarding losses. The
Commission’s FOF/COL D&O twice cites Waiâhole I and Waiâhole II
for authority that “[o]ffstream users have the burden to prove
that any system losses are reasonable-beneficial by establishing
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the lack of practicable mitigation measures, including repairs,
maintenance, and lining of ditches and reservoirs.” The
Commission erred placing the burden of proof on the parties in
the IIFS proceeding, as the authorities cited by the Commission
apply in the context of a WUPA. In Waiâhole I, the cited
discussion of losses considered Waiâhole Irrigation Company’s
(“WIC”) request for 2.0 mgd to compensate for the losses of its
ditch system. 94 Hawai#i at 118, 9 P.3d at 430. There, the
Commission denied WIC’s request, but suggested that WIC could
draw “non-regulated” surface water to cover the losses; on
appeal, this court concluded that the Commission’s suggestion was
erroneous for several reasons, and held that the Commission must
consider the 2.0 mgd as a “‘use’ pursuant to the permitting
process.” 94 Hawai#i at 118, 173, 9 P.3d at 430, 485. On
remand, the Commission found that “[o]perational losses are a
normal component of any water delivery system” and therefore
issued a permit to WIC’s successor in interest, Agribusiness
Development Corporation (“ADC”), to cover the losses. Waiâhole
II, 105 Hawai#i at 27, 93 P.3d at 669. When that decision
returned to this court on further appeal, this court held that
the Commission’s decision was incomplete because it did not
include findings that ADC met its burden as a permit holder
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pursuant to HRS § 174C-49(a)23. Id. This burden is articulated
in the WUPA statute, but is absent from the statutes governing
IIFS. The Commission erred when it imposed a WUPA burden on the
diverting parties in the IIFS CCH. As noted above, the burden in
setting an IIFS is on the Commission to “protect instream values
to the extent practicable.” Waiâhole II, 105 Hawai#i at 11, 93
P.3d at 653; HRS § 174C-71(2)(A).
The court concludes that the Commission did not meet
this burden when it “assum[ed]” that WWC’s and HC&S’s losses
could be halved. As discussed above, the court has held that,
due to the fact that the Commission must articulate an IIFS at an
“early planning stage,” the Commission “need only reasonably
estimate instream and offstream demands.” Waiâhole I, 94 Hawai#i
at 155 n.60, 9 P.3d at 467 n.60. Though reasonable estimates are
23
HRS § 174C-49(a) states that “[t]o obtain a permit pursuant to
this part, the applicant shall establish that the proposed use of water:
(1) Can be accommodated with the available water source;
(2) Is a reasonable-beneficial use as defined in section 174C-3;
(3) Will not interfere with any existing legal use of water;
(4) Is consistent with the public interest;
(5) Is consistent with state and county general plans and land use
designations;
(6) Is consistent with county land use plans and policies; and
(7) Will not interfere with the rights of the department of
Hawaiian home lands as provided in section 221 of the
Hawaiian Homes Commission Act.
HRS § 174C-49(a) (1993).
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permitted at this stage, the Commission did not provide any
analysis on how it reached that figure to show that it had
“reasonably estimate[d]” that half of the losses could be
eliminated. In choosing a number that appears to be arbitrary,
the Commission could have significantly over- or underestimated
the potential for mitigation of losses in HC&S’s and WWC’s water
systems. On remand, the Commission must “reasonably estimate”
losses, mindful of its duty to “protect instream values to the
extent practicable.”
5. The Commission Erred In Its Consideration Of HC&S’s
Well No. 7.
Hui/MTF argues that the Commission arbitrarily
minimized Well No. 7’s potential contributions. OHA raises a
similar challenge regarding Well No. 7; it contends that the
Commission did not properly weigh HC&S’s potential use from the
well. More specifically, OHA claims that HC&S did not
demonstrate that Well No. 7 is not a practicable alternative, and
that the Commission’s lowering of Well No. 7’s yield was
arbitrary and capricious.
Well No. 7 is the only one of HC&S’s sixteen brackish
water wells on its plantation that is able to introduce water
into HC&S’s internal ditch system. From 1927 until the 1980s,
Well No. 7 was HC&S’s primary source of irrigation water for the
3,650-acre Waihe#e-Hopoi Fields; HC&S pumped an average of about
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21 mgd from Well No. 7 until 1988, when a competing sugar company
ceased operations, freeing up a great amount of Nâ Wai #Ehâ water
for HC&S use. For the past twenty-five years, HC&S has minimized
use of Well No. 7, but it has occasionally used the well; in
fact, it used the well heavily on two occasions: for six months
from June through November of 1996, HC&S pumped an average of 25
mgd, and for six months from May through October 2000, HC&S
pumped an average of 18.9 mgd.
Well No. 7 is currently configured with three pumps:
pumps 7A and 7B are at water level and can each pump 17.5 mgd to
ground level, for a total of 35 mgd, which it can distribute to
about 800 acres of the 3,650 acres of the Waihe#e-Hopoi Fields.
The third pump, Pump 7C, is a booster pump at ground level that
HC&S claims can pump 14 mgd24 from pump 7A to Waihe#e Ditch for
distribution to all of the Waihe#e-Hopoi Fields except for the
175-acre Field 715.
During the hearings, HC&S offered four explanations for
its argument that it would be impracticable to rely heavily on
water pumped from Well No. 7. First, HC&S estimates that it
would incur an estimated $1 million dollars in capital costs to
install new pipelines and pumps. Second, HC&S claims that it
24
The Commission’s FOF indicate suspicion about the accuracy of this
figure. FOF 497 states, “According to HC&S, as currently configured, Well No.
7 can supply only 14 mgd to the Waihe#e-Hopoi Fields, with the exception of
Field 715. However, HC&S’s records do not indicate that Well. No. 7 was ever
configured differently than its current configuration.”
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does not have adequate electrical power to run the pumps on a
consistent and sustained basis because of its power contract with
Maui Electric Company (“MECO”). HC&S estimates it would incur
costs of $777,650 to upgrade its pumps and electrical equipment
to meet MECO’s standards for servicing such equipment; HC&S also
claims it would cost $7,440 per day for energy to run Well No. 7,
and that HC&S would lose $1.8 million in revenues under its
contract with MECO as well as a decrease in HC&S’s avoided cost
rate and penalties three times the power rate for power it does
not deliver. Third, HC&S claims that increased pumping would
exacerbate the degree to which sustainable yield is already being
exceeded and reduce the recharge from the imported surface water
that sustains the Kahului aquifer. Fourth, HC&S claims that
increased pumping of the well would increase the salinity of the
water.
The Commission’s Final D&O considered the first three
factors listed above (the capital costs, energy costs, and
aquifer recharge) and determined that HC&S must pump only 9.5 mgd
from Well No. 7. The Commission determined that Well No. 7 is an
alternative that most likely would not be available on a daily
basis, citing the uncertainties about the recharge rate and
electrical power. In determining that HC&S must pump 9.5 mgd,
the Commission required that HC&S pay additional energy costs to
pump the water, but did not require HC&S to accrue any capital
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costs. The D&O requires HC&S to provide monthly ground water use
reports documenting the volume of water pumped from Well No. 7,
along with ground water levels and salinity measurements.
In his dissent, Dr. Miike criticized the Commission
majority for its treatment of Well No. 7, writing that the 9.5
mgd figure is “without any credible foundation.” This is a main
point of error on appeal for Hui/MTF and OHA; they argue that the
Commission arbitrarily minimized Well No. 7’s potential
contributions as an alternative source to Nâ Wai #Ehâ water.
The Commission’s response is contradictory and makes it
clear that guidance is necessary in this area. First, the
Commission responds that “neither the statutes nor the
administrative rules require an analysis of practicable
alternatives in setting the IIFS.” The Commission then asserts
that Well No. 7 “had a place” in the IIFS analysis because it is
a consideration when weighing instream values with offstream
purposes when establishing the IIFS.
The analysis with regard to alternative sources is
similar to the analysis with regard to system losses, supra. The
water code requires the Commission to “weigh the importance of
the present or potential instream values with the importance of
the present or potential uses of water for noninstream purposes,
including the economic impact of restricting such uses[.]” HRS §
174C-71(2)(D). The plain meaning of the word “importance”
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requires the Commission to judge the value of a party’s
noninstream use against the other present or potential uses.
Furthermore, as the water code’s Declaration of Policy explains,
“[t]he state water code shall be liberally interpreted to obtain
maximum beneficial use of the waters of the State . . . .” HRS §
174C-2(c) (1993). Allowing a water user to divert water from the
public trust res when that user has exclusive access to an
alternative water source that is currently un- or under-used
would not effect the Legislature’s policy as expressed in the
water code. This suggests that the Commission’s second argument
is correct; Well No. 7, as an alternative source, “has a place”
in the analysis of setting an IIFS because the availability of
alternative water sources necessarily diminishes the “importance”
of diverting Nâ Wai #Ehâ water for noninstream use.
Hui/MTF, OHA, HC&S, and WWC do not dispute the
relevance of Well No. 7 water to the IIFS analysis; they do,
however, disagree on whether the diverting party bears a burden
of proof with regard to this point of analysis. Hui/MTF argues
that HC&S bears a burden to prove that using Well No. 7 is not
practicable, and that the Commission is “duty bound” to hold HC&S
to its burden. OHA agrees that the burden falls to HC&S to
demonstrate that Well No. 7 is not a practicable alternative.
HC&S and WWC both argue that the burden falls to the Commission
to determine IIFS that best serve the public interest. The
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Commission’s FOF/COL D&O does not specify a burden of proof for
alternative sources, as it did for system losses. In its
introduction, however, the Commission does specify a general
standard that “[f]or those seeking private, commercial uses of
water, there is a higher level of scrutiny. In practical terms,
this means that the burden ultimately lies with those seeking or
approving such uses to justify them in light of the purposes
protected by the trust.” More specific to alternative sources,
the Commission stated that it “is not obliged to ensure that any
particular user enjoys a subsidy or guaranteed access to less
expensive water sources when alternatives are available and
public values are at stake,” and also that “[a]n applicant’s
inability to afford an alternative source of water, standing
alone, does not render that alternative impracticable.”
In evaluating Well No. 7 and HC&S’s four arguments
listed above, the Commission found the following:
494. [. . .] From 1927 until additional Na Wai ‘Eha water
became available in the l980s, HC&S’s primary source of
irrigation water for its Waihe#e-Hopoi Fields was Well No.
7, [. . .] a brackish water well.
495. Between 1927 and 1985, HC&S pumped an average of about
21 mgd from Well No. 7. Since the additional Na Wai ‘Eha
flows became available. HC&S has minimized its use of Well
No. 7 but used it heavily on to occasions: e.g., for the
six-month period from June through November of 1996, an
average of 25 mgd was pumped; and for the six-month period
from May through October of 2000, an average of 18.9 mgd was
pumped.
[. . .]
497. According to HC&S, as currently configured, Well No. 7
can supply only 14 mgd to the Waihe#e-Hopoi Fields, with the
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exception of Field 715. However, HC&S’s records do not
indicate that Well No. 7 was ever configured differently
than its current configuration.
498. HC&S estimates that it would cost approximately
$525,000 to add another booster pump and additional
distribution pipeline to increase the volume that can be
pumped from Well No. 7 to HC&S’s Waihe#e Ditch from 14 mgd
to 28 mgd; and the cost of an additional pipeline to reach
Field 715 would be $475,000.
499. HC&S also claims that it does not have adequate
electrical power to run the pumps for Well No. 7 on a
consistent and sustained basis because of its power contract
with Maui Electric Company (“MECO”) and limitations of its
capacity to generate electricity through its system of
burning bagasse and other supplemental fuels in its power
plant and the operation of its hydro power turbines on its
ditch system which are supplied by East Maui water[.]
500. HC&S also claims that any increased pumping of water
from the Kahului aquifer to replace surface water being
imported from the West Maui Ditch System would both
exacerbate the degree to which the sustainable yield is
already being exceeded and reduce the recharge from imported
surface water that sustains the aquifer.
These findings of fact are plainly descriptions of testimony. In
its conclusions of law section examining “Reasonable Offstream
Uses,” the Commission restated several of these “findings,”
indicating that the Commission adopted the testimony as fact.
The Commission then stated
The combined facts that the current sustainable yield of the
aquifer is already being exceeded; that increased pumping
from Well No. 7 may exacerbate that strain; and that the
historically higher levels of pumping occurred during a
period where furrow irrigation methods were affecting
recharge rates for the aquifer, the practical alternative
from Well No. 7 is lower than historic rates. Considering
these uncertainties in combination with the Commission’s
decision to place the full burden of remedying losses
immediately upon HC&S, discussed intra, the practical
alternative from Well No. 7 is deemed 9.5 mgd. This
alternative will not require capital costs, only the costs
of pumping.
The Commission erred in adopting HC&S’s testimony
without any assessment of the evidence on the record that
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contradicted HC&S’s arguments. As the court explained in
Waiâhole I, where “the record demonstrates considerable conflict
or uncertainty in the evidence, the agency must articulate its
factual analysis with reasonable clarity, giving some reason for
discounting the evidence rejected.” 94 Hawai#i at 163-64, 9 P.3d
at 475-76. The record shows that the Commission did not explain
its analysis with “reasonable clarity” regarding any of the
“facts” recited above.
For example, OHA shows that, with regard to HC&S’s
claim that pumping Well No. 7 would result in a diminished
aquifer, HC&S had represented the exact opposite to the
Commission in another context but around the same time as the
hearings in this case. OHA’s exhibit C-90 is a letter dated
January 11, 2008 to the Commission from HC&S’s Senior Vice
President, Rick Volner, regarding the Public Review Draft Water
Resource Protection Plan (“WRPP”) for parts of West Maui,
including the Kahului aquifer. In its letter, HC&S states that
it has five wells in the Kahului aquifer and eleven wells in the
Pâ#ia aquifer. HC&S writes
Over the last twenty years, the daily average rate of
withdrawal, by year, for all 16 of these wells combined has
ranged from approximately 40 mgd to as much as 112 mgd far
in excess of the combined sustainable yield of between 7 and
8 mgd for the Kahului and Paia aquifers recommended in the
Draft WRPP. Several of these wells have been in operation
for more than a hundred years, and all have been in place
and operated for many decades without any long term
deterioration in water quality.
Though these written comments contradict the evidence it
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presented regarding its inability to pump Well No. 7 due to the
alleged recharge problem, the Commission does not explain why it
disregarded the written comments in favor of HC&S’s evidence
supporting the existence of a recharge problem.
The Commission attempted to analyze the economic impact
of requiring HC&S to augment Nâ Wai #Ehâ water with water from
Well No. 7. HC&S claimed that the economic consequences of
reduced allowable diversion or increased requirements to pump
Well No. 7 would result in HC&S discontinuing all operations on
Maui. The Commission found that:
HC&S had not “done any economic analysis on how a reduction
of available surface water in this case would force HC&S to
shut down”; Mr. Holiday[, President of HC&S’s Agricultural
Group,] “[could not] say yes or no” when asked whether
shifting 9 mgd of Nâ Wai #Ehâ surface water to another
purpose would prevent HC&S from being viable, but testified
that HC&S is “assuming” that impact “for planning purposes.”
As the Commission recited in its FOF/COL, Catherine Chan-
Halbrendt, Professor in the Department of Natural Resources and
Environmental Management at the University of Hawai#i, Mânoa,
testified that “the lack of any economic analysis, or the data
required to conduct such an analysis, prevents anyone, including
this Commission, from evaluating HC&S’s claims of economic
impact.” The Commission agreed that the record was insufficient,
stating “It would have been more helpful to the Commission if
either or both parties had provided information on incremental
decreases in surface water to the 5,000 acres of HC&S’s West Maui
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Fields.” Nonetheless, the Commission stated that “the lack of
such analyses does not prohibit the Commission from its duty of
weighing instream values with non-instream uses.”
The record shows, however, that the Commission did not
merely weigh instream values with noninstream uses; rather, the
Commission’s own explanation of how it arrived at the 9.5 mgd
requirement shows that cost to HC&S was the determinative factor.
The Commission concluded first that there were uncertainties
regarding the aquifer recharge, and that therefore “the practical
alternative from Well No. 7 is lower than historic rates.” That
is, even though the Commission found that historical rates for
Well No. 7 showed that “[b]etween 1927 and 1985, HC&S pumped an
average of about 21 mgd from Well No. 7,” the Commission decided
that a lower number would be more appropriate. Then, in
determining that lower number, the Commission explained:
Considering these uncertainties [regarding aquifer recharge]
in combination with the Commission’s decision to place the
full burden of remedying losses immediately upon HC&S,
discussed intra, the practical alternative from Well No. 7
is deemed 9.5 mgd. This alternative will not require
capital costs, only the costs of pumping.
(emphasis added). That is, since the Commission already required
HC&S to pay to eliminate some of its system losses, it would not
require HC&S to incur any capital costs to improve Well No. 7.
The Commission erred when it made its decision
regarding Well No. 7 based on cost while explicitly acknowledging
that it did not have the data it needed to truly analyze cost.
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“[T]he Commission must not relegate itself to the role of a mere
‘umpire passively calling balls and strikes for adversaries
appearing before it,’ but instead must take the initiative in
considering, protecting, and advancing public rights in the
resource at every stage of the planning and decisionmaking
process.” Waiâhole I, 94 Hawai#i at 143, 9 P.3d at 455(citations). When such critical information is missing, the
Commission must “take the initiative” to obtain the information
it needs. Where the Commission’s decisionmaking does not display
“a level of openness, diligence, and foresight commensurate with
the high priority these rights command under the laws of our
state,” the decision cannot stand. Wai#ola, 103 Hawai#i at 422,
83 P.3d at 685. On remand, the Commission must revisit its
analysis of Well No. 7 as an alternative source to diverting Nâ
Wai #Ehâ water, as explained in this opinion.
6. The Commission Erred In Its Consideration of Recycled
Wastewater.
Hui/MTF argues that the Commission erred in failing to
consider the practicability of using recycled wastewater from the
Wailuku/Kahului wastewater treatment plant. In its FOF/COL D&O,
the Commission concluded that at least 5 mgd of recycled
wastewater “is currently disposed of via underground injection.”
In response to Hui/MTF’s urging that HC&S be required to utilize
this water, the Commission found that “the County currently has
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no existing infrastructure to deliver recycled wastewater to
HC&S’s fields.” The Commission also heard testimony that
“private parties could construct their own pipeline to the
plant.” The Commission appears to have concluded that this
alternative did not merit consideration, based solely on the
current lack of infrastructure. This decision does not evince “a
level of openness, diligence, and foresight commensurate with the
high priority these rights command under the laws of our state.”
Wai#ola, 103 Hawai#i at 422, 83 P.3d at 685. The recycled
wastewater was quantified as “at least 5 mgd”; 5 mgd is nearly
enough water to satisfy all kuleana users in Nâ Wai #Ehâ and
would be a significant contribution to HC&S’s water needs. On
remand, the Commission must evaluate this alternative with
“openness, diligence, and foresight” to determine whether it is a
viable alternative to diverting Nâ Wai #Ehâ water.
VI. CONCLUSION
As explained in Section V.A., supra, MDWS’s cross-
appeal is dismissed.
We recognize and appreciate the substantial time,
energy, and diligence that the Commission, Dr. Miike, and the
parties have invested in this case. However, for the reasons
stated above, the Commission on Water Resource Management’s
June 10, 2010 Findings of Fact, Conclusions of Law, Decision and
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Order is hereby vacated and remanded to the Commission for
further proceedings consistent with this opinion.
Isaac H. Moriwake and /s/ Mark E. Recktenwald
D. Kapua#ala Sproat of
Earthjustice for Appellant /s/ Paula A. Nakayama
Hui O Nâ Wai #Ehâ and
Maui Tomorrow Foundation, Inc. /s/ Sabrina S. McKenna
Anna Elento-Sneed and /s/ Rom A. Trader
Pamela W. Bunn of Alston Hunt
Floyd & Ing for Appellant
Office of Hawaiian Affairs
Patrick K. Wong, Corporation
Counsel and Jane E. Lovell,
Deputy Corporation Counsel,
County of Maui, and Jon M.
Van Dyke, for Appellee/Cross-
Appellant County of Maui,
Department of Water Supply
Donna H. Kalama and Julie H.
China, Deputy Attorneys
General, for Appellee
Commission on Water Resource
Management
David Schulmeister and Elijah
Yip of Cades Schutte LLP for
Appellee Hawaiian Commercial
and Sugar Company
Paul R. Mancini and James W.
Geiger of Mancini, Welch &
Geiger and Gilbert S.C. Keith-
Agaran for Appellee Wailuku
Water Company, LLC
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