Maui Vacation Rental Association, Inc. v. County of Maui

CourtDistrict Court, D. Hawaii
DecidedNovember 20, 2020
Docket1:20-cv-00307
StatusUnknown

This text of Maui Vacation Rental Association, Inc. v. County of Maui (Maui Vacation Rental Association, Inc. v. County of Maui) is published on Counsel Stack Legal Research, covering District Court, D. Hawaii primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Maui Vacation Rental Association, Inc. v. County of Maui, (D. Haw. 2020).

Opinion

IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF HAWAII

MAUI VACATION RENTAL CIVIL NO. 20-00307 JAO-RT ASSOCIATION, INC., a Hawaii corporation; WILLIAM GOULD; ORDER GRANTING IN PART AND DEBORAH VON TEMPSKY, DENYING IN PART SUCCESSOR TRUSTEE OF HELEN DEFENDANTS’ MOTION TO VON TEMPSKY TRUST; THE DISMISS COMPLAINT FOR MOTHER OCEAN LLC AND DECLARATORY AND WILLARD GARY DEARDORFF AND INJUNCTIVE RELIEF AND JOAN DEARDORFF; MANAHALE STAYING ACTION ESTATE LLC AND JAMES C. WAYNE,

Plaintiffs, vs.

MAUI COUNTY PLANNING DEPARTMENT; COUNTY OF MAUI; MAYOR MICHAEL VICTORINO, successor in interest; MICHELE MCLEAN, in her official capacity as Director of the Maui County Planning Department; DOES 1–20; JANE DOES 1–20; DOE PARTNERSHIPS 1–20; DOE CORPORATIONS 1–20; DOE ENTITIES 1–20 and DOE GOVERNMENTAL UNITS 1–20

Defendants.

ORDER GRANTING IN PART AND DENYING IN PART DEFENDANTS’ MOTION TO DISMISS COMPLAINT FOR DECLARATORY AND INJUNCTIVE RELIEF AND STAYING ACTION In this action, Plaintiffs Maui Vacation Rental Association, Inc. (“MVRA”); William Gould; Deborah Von Tempsky, Successor Trustee of Helen Von Tempsky Trust; The Mother Ocean LLC; Willard Gary Deardorff; Joan Deardorff; Manahale Estate LLC; and James C. Wayne (collectively, “Plaintiffs”) present multiple

challenges to the legality of Maui County Ordinance No. 5059, which capped the number of permits available for Short-Term Rental Homes on the island of Molokaʻi at zero. Defendants Maui County Planning Department (the “Planning

Department”); County of Maui (the “County”); Michael Victorino, in his official capacity as the County Mayor and successor in interest to Mayor Alan Arakawa; and Michele McLean, in her official capacity as Director of the Planning Department (the “Director”) (collectively, “Defendants”) filed a motion requesting

the Court to abstain and stay the action under Railroad Commission v. Pullman Co., 312 U.S. 496 (1941), or, in the alternative, dismiss Counts I–IV, VI–IX, XI– XII, and XVI of Plaintiffs’ Complaint. For the reasons discussed below, the Court

GRANTS IN PART AND DENIES IN PART Defendants’ motion, ABSTAINS pursuant to Pullman, and STAYS this action. I. BACKGROUND A. Facts1

MVRA includes as members various vacation rental owners and managers and has the stated purpose of “promot[ing] the fact that Vacation Rentals play an

1 These facts are based on the allegations in the Complaint, ECF No. 1, which are taken as true when reviewing Defendants’ motion to dismiss. important role in [Maui County’s] healthy economy and diversified tourism.” ECF No. 1 ¶ 9. Each of the remaining Plaintiffs hold short-term rental permits for real

property they own on the island of Molokaʻi.2 Id. ¶¶ 10–16. In 2012, the County enacted Ordinance 3941, which created a new category of permitted uses of real property called Short-Term Rental Homes (“STRHs”) and

set out various conditions and procedures that govern the issuance of permits for STRHs. Id. ¶ 21; ECF No. 1-1. Under Ordinance 3941, all owners of real property in the County who lease their homes for less than an initial term of 180 days are required to obtain a permit to do so, subject to certain exceptions. ECF No. 1 ¶ 25.

Ordinance 3941 included both a comprehensive permitting scheme and various performance-based standards designed to mitigate the effects of STRHs on neighboring properties. Id. ¶ 28.

Between 2016 and 2019, the County and the Planning Department imposed a series of ordinances and administrative rules outlining the requirements for STRH permits and the County’s enforcement mechanism for noncompliance relating to STRHs. Id. ¶ 31. According to Plaintiffs, the Planning Department and

the Director have acted inconsistently and unpredictably when deciding whether to

2 The island of Molokaʻi is part of the County of Maui, which also includes the islands of Maui, Lānaʻi, Kahoʻolawe, and Molokini. grant STRH permits, giving significant weight to whether the applicants’ neighbors oppose the issuance of the permits. Id. ¶ 35.

In March 2020, the County adopted Ordinance 5059, which capped the number of STRH permits that the County may issue for Molokaʻi at zero and precluded the renewal of existing STRH permits, stating that such permits shall

remain valid through December 2020. ECF No. 1-2 at 5–6. Plaintiffs allege that Ordinance 5059 “has the effect of shutting down all STRH[]s on Molokai as of December 31, 2020, even if there are valid permits that go beyond December 2020.”3 ECF No. 1 ¶ 45.

B. Procedural History Plaintiffs commenced this action on July 10, 2020, asserting the following claims against each of the Defendants: Count I – Declaratory Relief Pursuant to 28

U.S.C. § 2201; Count II – Violation of the United States Constitution: Due

3 It is unclear from the Complaint which, if any, of the Plaintiffs had STRH permits that would have remained effective after December 31, 2020. It is not clear from the face of Ordinances 3941 and 5059 whether the latter prematurely terminated any STRH permits. STRH permits are granted for an initial length of one year, with the possibility of a two-year extension if the Planning Department does not receive complaints. ECF No. 1-1 at 25. On Molokaʻi, permits could have been renewed prior to the adoption of Ordinance 5059, but only for an additional year for each renewal period. Id. And Ordinance 5059 states, “Existing permits for Short-Term Rental Homes in the Moloka‘i Island Community Plan area will remain valid through December 2020 and are not eligible for renewal[.]” ECF No. 1-2 at 6. At the hearing, Defendants’ counsel represented that each of the STRH permits held by Plaintiffs in this matter are scheduled to expire on or before December 31, 2020. Plaintiffs’ counsel did not disagree with this representation. Process; Count III – Hawaii Constitution Violation: Due Process; Count IV – U.S. Constitution Violation: Equal Protection; Count V – Unconstitutional Taking;

Count VI – Violation of HRS § 46-4; Count VII – Deprivation of the Right to Honest Services 18 U.S.C. § 1346; Count VIII – Violation of Hawaii Administrative Procedures Act; Count IX – Equitable Estoppel/Vested Rights;

Count X – Prima Facie Tort; Count XI – HRS chapter 480—Unfair Competition by Promoting Hotel Interests over Competing STRH Interests; Count XII – Violating the Right to Interstate Travel and the Privileges and Immunities Clause of the U.S. Constitution, art. IV, § 2, cl. 1 by Discriminating against Out-of-State

Residents Owning Land in Hawaii; Count XIII – Violating the Contracts Clause of the United States and Hawaii Constitutions; Count XIV – Violation of 28 U.S.C. § 1983;4 Count XV – Estoppel/Detrimental Reliance; Count XVI – Unjust

Enrichment; and Count XVII – Prima Facie Tort/Violation of the Restatement (Second) of Torts § 871. Plaintiffs pray for declaratory relief; injunctive relief prohibiting the enforcement of Ordinance 5059 in its entirety, or, in the alternative, as against Plaintiffs and those similarly situated; for an award of attorneys’ fees

4 Title 28 of the United States Code governs the judiciary and judicial procedure and does not have a section 1983. The Court assumes that Plaintiffs intended to bring a claim under 42 U.S.C. § 1983

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Maui Vacation Rental Association, Inc. v. County of Maui, Counsel Stack Legal Research, https://law.counselstack.com/opinion/maui-vacation-rental-association-inc-v-county-of-maui-hid-2020.