Arakaki v. Lingle

477 F.3d 1048

Earl F. ARAKAKI; Evelyn C. Arakaki; Edward U. Bugarin; Sandra P. Burgess; Patricia A. Carroll; Robert M. Chapman; Michael Y. Garcia; Toby M. Kravet; James I. Kuroiwa; Frances M. Nichols; Donna Malia Scaff; Jack H. Scaff; Allen Teshima; Thurston Twigg-Smith, Plaintiffs-Appellants Anthony Sang, Sr., State Council of Hawaiian Homestead Associations (SCHHA); State Council of Hawaiian Homestead Associations, Intervenors-Appellees, v. Linda C. LINGLE, in her official capacity as Governor of the State of Hawaii; Haunani Apoliona, Chairman, and in her official capacity as trustee of the Office of Hawaiian Affairs; Rowena Akana, in his official capacity as trustee of the Office of Hawaiian Affairs; Donald Cataluna, in his official capacity as trustee of the Office of Hawaiian Affairs; Linda Dela Cruz, in her official capacity as trustee of the Office of Hawaiian Affairs; Clayton Hee, in his official capacity as trustee of the Office of Hawaiian Affairs; Colette Y. Machado, in her official capacity as trustee of the Office of Hawaiian Affairs; Charles Ota, in his official capacity as trustee of the Office of Hawaiian Affairs; Oswald K. Stender, in his official capacity as trustee of the Office of Hawaiian Affairs; John D. Waihee, IV, in his official capacity as trustee of the Office of Hawaiian Affairs; United States of America; John Does, 1 through 10; Georgina Kawamura, in her official capacity as Director of the Department of Budget and Finance; Russ Saito, in her official capacity as Comptroller and Director of the Department of Accounting and General Services; Peter Young, in his official capacity as Chairman of the Board of Land and Natural Resources; Sandra Lee Kunimoto, in her official capacity as Director of the Department of Argiculture; Ted Liu, in his official capacity as Director of the Department of Business, Economic Development and Tourism; Rodney Haraga, in his official capacity as Director of the Department of Transportation; Quentin Kawananakoa, member of the Hawaiian Homes Commission, Defendants-Appellees.

No. 04-15306.

United States Court of Appeals, Ninth Circuit.

February 9, 2007.

H. William Burgess, Honolulu, HI, for the plaintiffs-appellants.

Sherry P. Broder, Honolulu, HI; Girard D. Lau, Charleen M. Aina, Office of the Attorney General of Hawaii, Honolulu, HI; Jon M. Van Dyke, William S. Richardson School of Law, Honolulu, HI; Aaron P. Avila, U.S. Department of Justice, Washington, D.C.; Thomas A. Helper, Office of the U.S. Attorney, Honolulu, HI, for the defendants-appellees.

Walter R. Schoettle, Honolulu, HI; Robert Klein, Honolulu, HI; Philip W. Miyoshi, McCorriston Miller Mukai MacKinnon LLP, Honolulu, HI, for the intervenors-appellees.

Le'a Malia Kanehe, Native Hawaiian LegalCorp., Honolulu, HI, for the amici curiae.

On Remand from the United States Supreme Court. D.C. No. CV-02-00139-SOM/KSC.

Before MELVIN BRUNETTI, SUSAN P. GRABER, and JAY S. BYBEE, Circuit Judges.

BYBEE, Circuit Judge.

In this case we are called on, yet again, to hear a challenge to state programs restricting benefits to "native Hawaiians" or "Hawaiians." See, e.g., Carroll v. Nakatani, 342 F.3d 934 (9th Cir.2003); Arakaki v. Hawaii, 314 F.3d 1091 (9th Cir.2002); Han v. U.S. Dep't of Justice, 45 F.3d 333 (9th Cir.1995) (per curiam); Price v. Akaka, 3 F.3d 1220 (9th Cir.1993); Price v Hawaii, 764 F.2d 623 (9th Cir.1985); Hoohuli v. Ariyoshi, 741 F.2d 1169 (9th Cir. 1984); Keaukaha-Panaewa Cmty. Ass'n v. Hawaiian Homes Comm'n, 588 F.2d 1216 (9th Cir.1978); see also Rice v. Cayetano, 528 U.S. 495, 120 S.Ct. 1044, 145 L.Ed.2d 1007 (2000).

Plaintiffs in this case are citizens of the State of Hawaii who allege that various state programs preferentially treat persons of Hawaiian ancestry, in violation of the Fifth and Fourteenth Amendments, 42 U.S.C. § 1983, and the terms of a public land trust. Plaintiffs brought suit against the Department of Hawaiian Home Lands ("DHHL"), the Hawaiian Homes Commission ("HHC"), the Office of Hawaiian Affairs ("OHA"), various state officers, and the United States. Plaintiffs claim standing to sue as taxpayers and as beneficiaries of the public land trust. In a series of orders, the district court held that Plaintiffs lacked standing to raise certain claims and that Plaintiffs' remaining claims raised a nonjusticiable political question, and dismissed the entire lawsuit. Arakaki v. Lingle, 305 F.Supp.2d 1161 (D.Haw.2004) ("Arakaki VI"); Arakaki v. Lingle, 299 F.Supp.2d 1129 (D.Haw.2003) ("Arakaki V"); Arakaki v. Lingle, 299 F.Supp.2d 1114 (D.Haw.2003) ("Arakaki IV"); Arakaki v. Cayetano, 299 F.Supp.2d 1107 (D.Haw.2002) ("Arakaki III"); Arakaki v. Cayetano, 299 F.Supp.2d 1090 (D.Haw. 2002) ("Arakaki II"); Arakaki v. Cayetano, 198 F.Supp.2d 1165 (D.Haw.2002) ("Arakaki I"). The district court also issued three unpublished orders, dated December 16, 2003, January 26, 2004, and May 5, 2004, which this opinion will address.

In a prior opinion, we affirmed in part and reversed in part. Arakaki v. Lingle, 423 F.3d 954 (9th Cir.2005). The Plaintiffs filed a petition for certiorari, which the Supreme Court denied. Arakaki v. Lingle, ___ U.S. ___, 126 S.Ct. 2861, 165 L.Ed.2d 909 (2006). On the state's petition for certiorari, however, the Supreme Court granted the petition, vacated our prior judgment and remanded for further consideration in light of DaimlerChrysler Corp. v. Cuno, 547 U.S. ___, 126 S.Ct. 1854, 164 L.Ed.2d 589 (2006). Lingle v. Arakaki, ___ U.S. ___, 126 S.Ct. 2859, 165 L.Ed.2d 892 (2006). On reconsideration, we again affirm in part and reverse in part, although on different grounds. In the interest of clarity for all interested parties, we are issuing a complete opinion in support of our judgment following remand from the Supreme Court.

We hold that Plaintiffs lack standing to sue the federal government and that the district court therefore correctly dismissed all claims to which the United States is a named party or an indispensable party. However, we reverse the district court's finding that Plaintiffs have demonstrated standing as state taxpayers to challenge those programs that are funded by state tax revenue and for which the United States is not an indispensable party. In light of the Supreme Court's decision in DaimlerChrysler, we now hold that Plaintiffs, as state taxpayers, lack standing to bring a suit claiming that the OHA programs that are funded by state tax revenue violate the Equal Protection Clause of the Fourteenth Amendment. Although it is not clear that any Plaintiffs have standing in any other capacity to challenge the OHA programs, we remand to the district court for further proceedings. Finally, if any Plaintiffs are able to establish standing, their challenge to the appropriation of tax revenue to the OHA does not raise a nonjusticiable political question. We therefore affirm in part, reverse in part, and remand.

I. BACKGROUND

A. Historical Context

After the arrival of Captain Cook in 1778, the western world became increasingly interested in the commercial potential of the Hawaiian Islands. The nineteenth century saw a steady rise in American and European involvement in the islands' political and economic affairs. As the resistance of the native Hawaiian government mounted, American commercial interests eventually succeeded, with the complicity of the U.S. military, in overthrowing the Hawaiian monarchy and establishing a provisional government under the title of the Republic of Hawaii. See Rice, 528 U.S. at 500-05, 120 S.Ct. 1044.

In 1898, President McKinley signed a Joint Resolution to annex the Hawaiian Islands as a territory of the United States. 30 Stat. 750. This resolution, commonly referred to as the Newlands Resolution, provided that the Republic of Hawaii ceded all public lands to the United States and that revenues from the lands were to be "used solely for the benefit of the inhabitants of the Hawaiian Islands for educational and other public purposes." Id. Two years later, the Hawaiian Organic Act established the Territory of Hawaii and put the ceded lands in the control of the Territory of Hawaii "until otherwise provided for by Congress." Act of Apr. 30, 1900, ch. 339, § 91, 31 Stat. 159.

B. The Public Land Trust and the Hawaiian Homes Commission Act

Shortly after the establishment of the Territory, Congress "became concerned with the condition of the native Hawaiian people." Rice, 528 U.S. at 507, 120 S.Ct. 1044. Declaring its intent to "[e]stablish[ ] a permanent land base for the beneficial use of native Hawaiians," Congress enacted the Hawaiian Homes Commission Act, 1920. Act of July 9, 1921, ch. 42, § 101(b)(1), 42 Stat. 108 ("HHCA"). The HHCA set aside 200,000 acres of lands previously ceded to the United States for the creation of loans and leases to benefit native Hawaiians. These lands were to be leased exclusively, including by transfer, to native Hawaiians for a term of 99 years at a nominal rate of one dollar per year. Id. § 208(1), (2) & (5). The HHCA defines "native Hawaiian" as "any descendant of not less than one-half part of the blood of the races inhabiting the Hawaiian Islands previous to 1778." Id. § 201(a)(7).

In 1959, Hawaii became the 50th State in the union. Under the Hawaii Statehood Admission Act, Congress required Hawaii to incorporate the HHCA into its state Constitution, with the United States retaining authority to approve any changes to the eligibility requirements for the HHCA leases. Act of March 18, 1959, Pub.L. No. 86-3, § 4, 73 Stat. 5 ("Admission Act"). See HAW. CONST. art. XII, §§ 1-3. In return, the United States granted Hawaii title to all public lands within the state, save a small portion reserved for use of the Federal Government. Id. § 5(b)-(d), 73 Stat. 5. The Admission Act further declared that the lands, "together with the proceeds from the sale or other disposition of any such lands and the income therefrom, shall be held by[the State] as a public trust for the...