Dw Aina Le'a Development, LLC v. State of Hawaii Land Use Comm

918 F.3d 602
CourtCourt of Appeals for the Ninth Circuit
DecidedMarch 7, 2019
Docket17-16280
StatusPublished
Cited by4 cases

This text of 918 F.3d 602 (Dw Aina Le'a Development, LLC v. State of Hawaii Land Use Comm) is published on Counsel Stack Legal Research, covering Court of Appeals for the Ninth Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Dw Aina Le'a Development, LLC v. State of Hawaii Land Use Comm, 918 F.3d 602 (9th Cir. 2019).

Opinion

FOR PUBLICATION

UNITED STATES COURT OF APPEALS FOR THE NINTH CIRCUIT

DW AINA LE‘A No. 17-16280 DEVELOPMENT, LLC, Plaintiff-Appellant, D.C. No. 1:17-cv-00113-SOM- v. RLP

STATE OF HAWAI‘I LAND USE COMMISSION; DOES, ORDER CERTIFYING Governmental Units, 1–10; QUESTION TO THE STATE OF HAWAI‘I, SUPREME COURT OF Defendants-Appellees. HAWAI‘I

Filed March 7, 2019

Before: Richard C. Tallman, Jay S. Bybee, and N. Randy Smith, Circuit Judges. 2 DW AINA LE‘A DEV. V. STATE OF HAWAI‘I LAND USE COMM’N

SUMMARY*

Civil Rights

The panel certified the following question to the Hawai’i Supreme Court:

What is the applicable statute of limitations for a claim against the State of Hawai’i alleging an unlawful taking of “[p]rivate property . . . for public use without just compensation,” Haw. Const. art. I, § 20?

COUNSEL

Sang J. Peter Sim, Sim & Record LLP, Bayside, New York, for Plaintiff-Appellant.

Ewan Christopher Ravner, Deputy Solicitor General; Clyde J. Wadsworth, Solicitor General; Douglas S. Chin, Attorney General; Department of the Attorney General, Honolulu, Hawai‘i; for Defendants-Appellees.

* This summary constitutes no part of the opinion of the court. It has been prepared by court staff for the convenience of the reader. DW AINA LE‘A DEV. V. STATE OF HAWAI‘I LAND USE COMM’N 3

ORDER

Pursuant to Haw. Rev. Stat. § 602-5(a)(2) and Hawai‘i Rule of Appellate Procedure 13, we respectfully certify the following question to the Hawai‘i Supreme Court:

What is the applicable statute of limitations for a claim against the State of Hawai‘i alleging an unlawful taking of “[p]rivate property . . . for public use without just compensation,” Haw. Const. art. I, § 20?

This significant question of law is “determinative of the cause” in this court and is not answered by statute or any “clear controlling precedent in the Hawai‘i judicial decisions.” Haw. R. App. P. 13(a). We therefore respectfully ask the Hawai‘i Supreme Court to exercise its discretion to accept and decide it.

Below we provide a “statement of facts showing the nature of the cause,” a “statement of prior proceedings in the case,” the “circumstances out of which the [certified] question arises,” and the “question of law to be answered.” Haw. R. App. P. 13(b).

I. STATEMENT OF FACTS

This appeal arises out of a dispute over the classification of approximately 1,060 acres of land in South Kohala on Hawai‘i Island. The facts of the underlying dispute are detailed in DW Aina Le‘a Development, LLC v. Bridge Aina Le‘a, LLC, 339 P.3d 685, 689–703 (Haw. 2014). We briefly review them here along with the factual allegations contained in the complaint, which we accept as true for purposes of this 4 DW AINA LE‘A DEV. V. STATE OF HAWAI‘I LAND USE COMM’N

appeal. See Wadsworth v. Talmage, 911 F.3d 994, 995 (9th Cir. 2018).

In 1989, the State of Hawai‘i Land Use Commission (“Commission”) reclassified the land in South Kohala from “agricultural” use to “urban” use in order to allow for the development of a residential community. The reclassification was subject to several conditions, including a condition that a certain percentage of the newly constructed residential units be affordable. The Commission amended that condition over the years as ownership of the land changed hands, and by 2005, the Commission required the landowner, Bridge Aina Le‘a, LLC (“Bridge”), to construct no fewer than 385 affordable units, which constituted 20% of the total units to be constructed.

In December 2008, the Commission issued a show cause order requiring Bridge to explain why the land should not revert to its former agricultural use classification. The Commission believed that Bridge and its predecessors-in- interest had failed “to perform according to the conditions imposed and to the representations and commitments made to the [Commission] in obtaining reclassification” of the property. In addition to responding to the show cause order, Bridge informed the Commission in February 2009 that it had entered into a purchase agreement with DW Aina Le‘a Development, LLC (“DW”) that gave DW the right to develop the residential community. DW then invested more than $28 million developing the property, constructing more than a dozen townhouses and grading the site for roads, utilities, and additional townhouses.

Nevertheless, in April 2009, the Commission voted unanimously to return the land to its former agricultural use DW AINA LE‘A DEV. V. STATE OF HAWAI‘I LAND USE COMM’N 5

classification. Bridge sought reconsideration, with DW now on board as a co-petitioner before the Commission, but those efforts failed. Following numerous hearings, the Commission issued a final, written order on April 25, 2011, reclassifying the property as agricultural. Shortly thereafter, Bridge and DW sought judicial review of the Commission’s order in state court. The Hawai‘i Supreme Court ultimately vacated the Commission’s order, concluding that, because use of the property had “substantially commenced,” the Commission improperly reclassified the property without complying with certain statutory requirements for doing so. DW Aina Le‘a, 339 P.3d at 711–14 (discussing the requirements set forth in Haw. Rev. Stat. § 205-4).1

II. STATEMENT OF PRIOR PROCEEDINGS

On February 23, 2017, DW filed a complaint in Hawai‘i state court against the Commission and the State of Hawai‘i asserting takings claims under both the United States Constitution and the Hawai‘i Constitution. DW alleged that the Commission’s reclassification of the property as

1 After the Commission entered its written order, Bridge also filed a second lawsuit against the Commission alleging, among other things, that the reclassification of the land constituted an unconstitutional taking without just compensation. That lawsuit, which the State removed to federal court, was stayed pending the Hawai‘i Supreme Court’s review of the Commission’s reclassification order. See Bridge Aina Le‘a, LLC v. Haw. Land Use Comm’n, 125 F. Supp. 3d 1051, 1057 (D. Haw. 2015). Once that decision came down, Bridge’s takings claims proceeded to trial, where a “jury found that the State had taken [Bridge’s] property without just compensation.” Bridge Aina Le‘a, LLC v. Haw. Land Use Comm’n, No. 1:11-cv-00414-SOM-KJM, 2018 WL 3149489, at *1 (D. Haw. June 27, 2018). Bridge was awarded only nominal damages. See id. For reasons that remain largely unexplained, DW never sought to become a party in Bridge’s takings suit. 6 DW AINA LE‘A DEV. V. STATE OF HAWAI‘I LAND USE COMM’N

agricultural constituted a regulatory taking of DW’s property without just compensation. Specifically, DW alleged that the reclassification increased the purchase price of the property after DW had agreed to purchase it, destroyed DW’s “sophisticated funding arrangement [with] Asia” for developing the property, and caused DW to sustain other increased costs and losses in business opportunities. The State removed the case to federal court and moved to dismiss the complaint as barred by the applicable statute of limitations.

The district court granted the State’s motion to dismiss.2 The parties agreed that DW’s takings claims accrued when the Commission issued its order on April 25, 2011. Regarding the federal takings claim, the court determined that, although this claim was not (and could not be) brought against the State under 42 U.S.C. § 1983, see Will v. Mich.

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