Nelson v. Hawaiian Homes Comm'n

130 Hawai'i 162

307 P.3d 142

Richard NELSON III, Kaliko Chun, James Akiona, Sr., Sherilyn Adams, Kelii Ioane, Jr., and Charles Aipia (deceased), Respondents/Plaintiffs/Appellants,

v. HAWAIIAN HOMES COMMISSION, The Department of Hawaiian Home Lands, Jobie Masagatani, in her official capacity as Chair of the Hawaiian Homes Commission, Imaikalani P. Aiu, Perry Artates, Leimana K. Damate, Gene Ross Davis, Jeremy Kamakaneoaloha Hopkins, Michael P. Kahikina, Ian Lee Loy, And Renwick V.I. Tassill, in their official capacities as members of the Hawaiian Homes Commission,¹ Respondents/Defendants/Appellees,andKalbert K. Young, in his official capacity as the State Director of Finance, and the State of Hawai‘i, Petitioners/Defendants/Appellees.

No. SCWC–30110.

Supreme Court of Hawai‘i.

June 28, 2013.

As Corrected July 8, 2013.

Reconsideration Denied July 17, 2013.

Robert K. Nakatsuji, Girard D. Lau, and Charleen M. Aina, Honolulu, for petitioners/defendants/appellees.

David Kimo Frankel and Alan T. Murakami, Honolulu, for respondents/plaintiffs/appellants.

Melvyn M. Miyagi, Brian A. Kang, and Emi L.M. Kaimuloa, Honolulu, for respondents/defendants/appellees.

RECKTENWALD, C.J., NAKAYAMA, McKENNA and POLLACK, JJ., with ACOBA, J., Concurring and Dissenting Separately, and POLLACK, J., Concurring Separately.

Opinion of the Court by McKENNA, J.

I. Introduction

Following the publication of this court's opinion in Nelson v. Hawaiian Homes Comm'n, 127 Hawai‘i 185, 277 P.3d 279 (2012), Respondents/Plaintiffs–Appellants Richard Nelson III, Kaliko Chun, James Akiona, Sr., Sherilyn Adams, Kelii Ioane, Jr., and Charles Aipia (collectively "Plaintiffs"), represented by Native Hawaiian Legal Corporation ("NHLC") requested attorneys' fees and costs² as the prevailing party, pursuant to the private attorney general doctrine. Both the State of Hawai‘i and the Department of Hawaiian Home Lands filed objections³ to Plaintiffs' request, arguing, inter alia, that Plaintiffs were not the prevailing party, that Plaintiffs do not qualify for an award of fees under the private attorney general doctrine, and that sovereign immunity bars an award of fees in any event. Additionally, DHHL objected to the request for costs as inadequately documented. For reasons that follow, we deny Plaintiffs' request for appellate attorneys' fees as barred by the State's sovereign immunity. We also deny Plaintiffs' request for appellate costs without prejudice.

II. Discussion

A. Prevailing Party

The first step in analyzing whether Plaintiffs are entitled to attorneys' fees (and costs) is to determine whether they are the "prevailing party." The "prevailing party" is the one who "prevails on the disputed main issue [.]" Food Pantry, Ltd. v. Waikiki Business Plaza, Inc., 58 Haw. 606, 620, 575 P.2d 869, 879 (1978). Even if the party does not prevail "to the extent of his original contention, he will be deemed to be the successful party for the purpose of taxing costs and attorney's fees." Id. (citation and footnote omitted).

"The trial court is required to first identify the principle issues raised by the pleadings and proof in a particular case, and then determine, on balance, which party prevailed on the issues." MFD Partners v. Murphy, 9 Haw.App. 509, 515, 850 P.2d 713, 716 (1992). In the circuit court, the principle issues raised were:

Count I: The State violated its constitutional duty to sufficiently fund DHHL in order to rehabilitate native Hawaiian beneficiaries, under the Hawai‘i State Constitution's Article XII, Sections 1 and 2

Count 2: DHHL violated the constitution and breached its trust obligation to beneficiaries to seek sufficient funds from the legislature.

Count 3: The DHHL Defendants breached their trust obligation to beneficiaries by leasing DHHL lands for commercial purposes to raise funds.

Count 4: The DHHL Defendants breached their obligation to trust beneficiaries by failing to ascertain whether trust lands are necessary for general homestead purposes before offering them for commercial lease.

The circuit court granted summary judgment in favor of the State and DHHL on Counts 1 and 2 based on the political question doctrine. The parties entered into a Stipulation to Dismiss Count 3 without prejudice and Count 4 with prejudice. On balance, before the trial court, the Defendants were the prevailing parties, securing summary judgment in their favor on the first two counts and a dismissal with prejudice on the fourth count.

Before the ICA, Plaintiffs prevailed on Counts I and II (or at least succeeded in reversing summary judgment and securing a remand), as the ICA held that the political question doctrine did not bar the determination of what constituted sufficient sums that (1) the State must provide to DHHL and that (2) DHHL must request. See Nelson v. Hawaiian Homes Comm'n, 124 Hawai‘i 437, 447, 246 P.3d 369, 379 (App.2011).

On certiorari, however, only the State further appealed the ICA's decision as to Count I, and the principle issue raised was

Does the political question doctrine bar Hawaiian Homes Commission Act (HHCA) beneficiaries from using Haw. Const. Article XII, Section 1's "sufficient sums" provision to demand more legislative funding of the Department of Hawaiian Home lands (DHHL), when that provision provides no guidance at all as to how quickly homesteads must be developed?

This court held that the political question doctrine did not bar determination of what constituted "sufficient sums" for one of four enumerated purposes under Article XII, Section 1 : administrative and operating expenses. Nelson, 127 Hawai‘i at 188, 277 P.3d at 282. Thus, the extent to which Plaintiffs "prevailed" is at issue.

This court has previously given guidance on determining which party prevailed in a case in which the relief granted was not solely in favor of one party. In Food Pantry, 58 Haw. at 620, 575 P.2d at 879, which involved a lease dispute, this court determined that the lessor was the prevailing party, even though the lessee did receive the relief he requested. In that case, the trial court found that the lessor was required to consent to a sublease under the lease, that the lessee materially breached that provision of the lease, and that the lessor was entitled to terminate the lease. Id. Even though the trial court granted the lessee's requested relief (that the lease not be forfeited and that damages for the breach be paid instead), the lessor was, "on balance," the successful party in the case, based on the pleadings and proof. Id.

In this case, although the State received the relief it requested on certiorari (that the political question bar the determination of what constitutes "sufficient sums" for the development of homestead lots), Plaintiffs are the prevailing party, because this court affirmed the ICA's judgment, albeit on a narrower ground that the political question doctrine did not bar determination of what constituted "sufficient sums" for administrative and operating expenses only. More importantly, part of Plaintiffs' claims against the State survived, in that the circuit court's grant of summary judgment in favor of the state was vacated, and this case has been remanded to the circuit court for further proceedings.

Having established that Plaintiffs prevailed on appeal, we next examine whether the private attorney general doctrine entitles them to an award of attorneys' fees.

B. Private Attorney General Doctrine

Normally, "pursuant to the ‘American Rule,’ each party is responsible for paying his or her own litigation expenses. This general rule, however, is subject to a number of exceptions," including the private attorney general doctrine. Sierra Club v. Dep't of Transp., 120 Hawai‘i 181, 218, 202 P.3d 1226, 1263 (2009). In In re Water Use Permit Applications, 96 Hawai‘i 27, 29, 25 P.3d 802, 804 (2001) ("Waiahole "), this court first recognized the private attorney general doctrine, which it summarized as follows:

The doctrine is an equitable rule that allows courts in their discretion to award attorneys' fees to plaintiffs who have "vindicated important public rights." Courts applying this doctrine consider three basic factors:

"(1) the strength or societal importance of the public policy vindicated by the litigation, (2) the necessity for private enforcement and the magnitude of the resultant burden on the plaintiff, (3) the number of people standing to benefit from the decision."

(citing Serrano v. Priest, 20 Cal.3d 25, 141 Cal.Rptr. 315, 569 P.2d 1303, 1314 (1977) ). This court, however, declined to apply the doctrine. Id. It held that the plaintiffs met the first and third prongs of the doctrine, as the underlying case "involved constitutional rights of profound significance [i.e., the apportionment of water rights], and all of the citizens of the state, present and future, stood to benefit from the decision." 96 Hawai‘i at 31, 25 P.3d at 806. But it also held that the plaintiffs had not met the second prong because they were merely one of several parties who "challenged the decision of a tribunal (the Commission on Water Resource Management or "CWRM") in an adversarial proceeding not contesting any action or policy of the government" and in which the government had not "either completely abandoned, or actively opposed, the plaintiffs' cause." 96 Hawai‘i at 31–32, 25 P.3d at 806–07. Although declining to award attorneys' fees under the private attorney general doctrine in that case, this court did not foreclose the application of the doctrine "in any future case...." 96 Hawai‘i at 32, 25 P.3d at 807.

In Maui Tomorrow v. State, 110 Hawai‘i 234, 245, 131 P.3d 517, 528 (2006), this court once again declined to apply the doctrine to award attorneys' fees. In that case, the plaintiffs had succeeded in appealing a decision of the Board of Land and Natural Resources ("BLNR") to the circuit court, which remanded the matter for further findings, because that agency had not fulfilled its constitutional duty to protect customary and traditional native...