MANAGING THE PUBLIC TRUST IN HAWAII:
KEY
QUESTIONS REMAIN UNANSWERED[1]
By: Kenneth R. Kupchak and Jamesner A.
Dumlao
of DAMON KEY LEONG KUPCHAK HASTERT
1. INTRODUCTION
1. In In Re Water Use Permit Applications, 94 Hawai`i 97 (2000) ("Wai_hole") the Hawai`i Supreme Court expounded on the scope and the substance of a public trust regarding the State's water resources and the duties of the State as trustee.
1. Specifically, the State is obligated to regulate the use of its water resource consistent with the dual mandate of (1) protecting of the resource and (2) promoting reasonable maximum and beneficial use of the resource. Id. at 139.
2. In fleshing out the substance of the Trust, the Wai_hole majority suggested a dichotomy between uses that are "public" and those that are for "private commercial use." Id. at 138. "[I]f the public trust is to retain any meaning and effect, it must recognize enduring public rights in trust resources separate and apart from, and superior to, the prevailing private interests in the resources at any time." Id. (Emphasis added).[2]
3. According to the majority, "any balancing between public and private purposes begin with a presumption in favor of public use, access and enjoyment." Id. at 142. Thus, the Court affirmed the Water Commission proscription of a "higher level of scrutiny for private commercial uses . . . ." Id.
2. STARTING POINT – GETTING CLEAR ON PUBLIC TRUST USES/PURPOSES/VALUES
1. Defining exactly what these public trust "uses," "purposes," or "values" are (that the majority deems "superior to" private interests) must serve as the starting point of any discussion relating the administration of the public trust.
2. In its discussion of the purposes of the trust the majority identifies the following public trust uses/purposes/values:
1. Navigation, commerce and fishing;
2. Bathing, swimming boating and scenic viewing;
3. "Preservation of [the resource] in [its] natural state"; "recreational and ecological – the scenic views of the lake and its shore, the purity of the air, and the use of the lake for nesting and feeding by birds" (quoting National Audubon Soc'y v. Superior Ct. of Alpine Cty., 658 P.2d 709, 719 (Cal. 1983));
4. Maintenance of waters in their natural state;
5. Domestic uses, particularly drinking; and
6. Exercise of Native Hawaiian and traditional and customary rights. Id. at 136-38.
3. The majority rejects "the private use of resources for 'economic development'" as a public trust use/purpose/value. Id. at 137-38. In so doing, the majority observes, "the public trust has never been understood to safeguard rights of exclusive[3] use for private commercial gain." Id. at 138 (emphases added).
1. On further reflection, such a rejection may not be consistent with the public trust as articulated in our State Constitution. The Public Trust Doctrine and the Management of America's Coasts, written by J. Archer, D. Connors, K. Laurence, S. C. Columbia, and R. Bowen, suggests that "the precise interpretation of the [public trust doctrine] is left to the judicial public policy decisions of each individual state, so that the outcomes in the several states will necessarily differ." Id. at 13.
2. Specifically, Article XI, section 1 of the Hawai`i Constitution provides "the State and its political subdivisions shall [1] conserve and protect Hawaii's natural beauty and all natural resources, including land, water, . . . and shall [2] promote the development and utilization of these resources in a manner consistent with their conservation and in furtherance of the self-sufficiency of the State. All public natural resources are held in trust by the State for the benefit of the people." (Emphases added.)
3. Hawai`i, after all, has not adopted socialism and rejected capitalism. Hawai`i's Constitution recognizes and protects private property. See Haw. Const. art. I § 20 (1978). The Hawai`i Constitution recognizes the "private" rights essential to the capitalistic system. Such protections are further guaranteed by the United States Constitution. See U.S. Const. amend. V. To date, the United States Supreme Court has not established a priority between various constitutional protections. We submit that the Hawai`i Supreme Court did not denote the protection of private property to second-class status.
4. The public trust doctrine, as articulated in the State Constitution, embraces development and utilization of the water resource in "furtherance of the self-sufficiency of the State." Practically speaking, the State furthers its self-sufficiency in many ways, arguably one might be by fostering a strong business climate and a vibrant economy. In addition, it can act as a catalyst through partnerships with private enterprise that necessarily involve private commercial use. It would seem that private commercial use is contemplated and embraced by the public trust articulated in our State Constitution.
5. Indeed, as Justice Ramil observed in his dissent, "the State's constitutional obligations to 'promote diversified agriculture' and 'increase agricultural self-sufficiency' warrant no less consideration merely because they involve offstream uses resulting in economic gain for private individuals." Wai_hole, 94 Hawai`i at 196 (citing Haw. Const. art. XI, § 3).
6. In an emergency, the State already has the power to regulate asset usage through its police power. However, if such regulation goes "too far," the State would have to compensate the private right holder.
4. It is important to emphasize, however, that in articulating the scope and the substance of the public trust, the Court rejected the Water Commission's bright-line conclusion that the trust "establishes resource protection as 'a categorical imperative and precondition to all subsequent considerations.'" Id. at 142. Moreover, the majority readily acknowledges that "it is widely understood that the public trust assigns no priorities or presumptions in the balancing of public trust purposes." Id. at 142 n.43 (emphases added). Thus, the public trust doctrine offers no guidance on how to balance competing public trust uses/purposes/values.
5. As the majority suggests, "the 'purposes' or 'uses' of the public trust have evolved with changing public values and needs." Id. at 136. Thus, like our living constitution, the aforementioned list of public trust uses/purposes/values are not exhaustive, and the majority's public trust priorities will likely spawn the next phase of litigation – a flood of cases over whether a particular use is a public trust use/purpose/value. Id. at 191 (J. Ramil, dissenting).
3. PRACTICAL DILEMMAS IN MANAGING THE TRUST
1. In dealing with the practical realities of managing the State's Water Resources Trust, and assuming that the exercise of this management obligation does not amount to a "taking," a fundamental question is how does one adequately balance competing public and private uses of water, factoring in "a presumption in favor of public use, access, and enjoyment," id. at 142, when one is not sure how much water is needed for public trust uses/purposes/values. How can one tell if the proposed private use impairs rather than enhances the public trust uses/purposes/values if those uses/purposes/values have not been clearly identified, much less quantified by the amount of water necessary to sustain such uses/purposes/values?
1. For example, what is the "natural state" of the waters sought to be attained and, concomitantly, how much water is necessary to achieve that "natural state?" How or when is the "natural state" gauged? Is it immediately before the filing of the application? Is it before the digging of the Wai_hole ditch? Is it before the first inhabitants of this island diverted any water from the stream? Is it somewhere in between? Is it a matter of volume?
2. The majority appears to point to the future establishment of permanent minimum instream flows set forth in the Water Code, Hawai`i Revised Statutes ("HRS") Chap. 174C, as the solution to this dilemma. Id. at 148.
3. The starting point of the Code is its Declaration of Policy. Specifically, HRS § 174C-2(c) provides:
The [Code] shall be liberally interpreted to obtain maximum beneficial use of the waters of the State for purposes such as domestic uses, aquaculture uses, irrigation and other agricultural uses, power development, and commercial and industrial uses. However, adequate provision shall be made for the protection of traditional and customary Hawaiian rights, the protection and procreation of fish and wildlife, the maintenance of proper ecological balance and scenic beauty, and the preservation and enhancement of waters if the State for municipal uses, public recreation, public water supply, agriculture, and navigation. Such objectives are declared to be in the public interest. (Emphases added.)
4. This policy statement generally mirrors the water resources trust principles as articulated by the majority.
5. The majority characterizes the instream flow standard ("a quantity or flow of water or depth of water which is required to be present at a specific location in a stream system at certain specified times of the year to protect fishery, wildlife, recreational, aesthetic, scenic, and other beneficial instream uses," HRS § 174C-3) as integral part of the regulatory scheme established by the Code "to protect the public interest in the waters of the state." HRS 174C-71(1).
1. Specifically, the majority states that "instream flow standards serve as the primary mechanism by which the Commission is to discharge its duty to protect and promote the entire range of public trust purposes dependent upon instream flows." Wai_hole, 94 Hawai`i at 148.
2. Question: What about offstream public trust uses/purposes/or values, such as ensuring an adequate supply of drinking water? Does establishing permanent minimum instream flow standards discharge the State's duties under the public trust?
6. After surveying the Code's provisions concerning the establishment of instream flows, the majority observes "the clear implication of these provisions is that the Commission may reclaim instream values to the inevitable displacement of existing offstream uses." Id. at 149. (Whether there is a cost under the Fifth Amendment of the United States Constitution to this reclamation remains for the future to determine.)
7. The Commission, however, concluded that "firm knowledge about the streams upon which to reach some permanent solution . . . will require considerably more work and is years away." Id. at 150. According to the majority, the Commission erred in setting "interim" instream flow standards that "did nothing more than ratify the major diversions already existing." Id.
8. In seeking to manage the public trust articulated in the State Constitution and complying with the provisions of the Code, a serious question arises about the interrelation of "instream values" and public trust uses/purposes/values. Are they one in the same? Are instream uses superior to offstream uses? Are instream uses superior to offstream public trust uses identified by the court? For example, are instream values, such as the procreation of fish, superior to Hawaiian rights, which arguably, might call for offstream irrigation of taro? Furthermore, are instream values superior to the need for an adequate supply of potable water? Or are these issues trumped by necessity under the health, welfare and police powers of the government? These questions remain unanswered.
9. Furthermore, in light of the public trust articulated the majority as a comprehensive water resources management vehicle, is the Commission still bound by the express provisions of the Code requiring the specific designation of a particular territory as a "water management area," HRS § 174C-41, prior to the establishment of the Commission's administrative control over withdrawals and diversions in the area now rendered a nullity? Under the public trust doctrine, are all the waters of the State, wherever they may lie, automatically designated to be within a water management area?
10. It is particularly noteworthy that the majority reserved the question of whether the fees accessed on applicants to fund the Commission's ongoing studies and monitoring activities constituted an illegal tax pending the Commission's determination of the fee schedule. Wai_hole, 94 Hawai`i at 186.
4. WHAT IS AN OFFSTREAM USER TO DO?
1. What is the offstream user's burden? According to the majority, an offstream user has the burden of justifying his/her/its use in light of protected public rights in the resource. Id. at 160. This begs the question of whether an offstream use right is a protected property right that was taken away in the 1978 Constitutional Convention.
2. Offstream users are told that they must (1) "prove that they actually need the water," and (2) "demonstrate the absence of practicable mitigating measures." Id. at 161. (If property rights do or did exist in offstream uses prior to 1978, it would seem that this burden might well be required to be reversed.)
3. Inherent in the majority's formulation of the public trust and its elevation of instream uses to "superior claims" status, id. at 149 n.52, is the burden on offstream users to demonstrate that their use will not unduly harm instream values. See id. at 161 ("We thus confirm and emphasize that the 'reasonable-beneficial use' standard and the related criterion of 'consistent with the public interest' demand examination of the proposed use not only standing alone, but also in relation to other public and private uses and the particular water source in question."). The potential for arbitrary decision making looms large. Solomon would not have enough swords for this division.
4. This task may well be effectively impossible given that we do not know how much water is necessary to preserve these amorphous "instream values" and "public trust uses/purposes/values." See id. at 197 (J. Ramil, dissenting). Furthermore, we have few if any guidelines to remove the arbitrariness ("due process/equal protection") in the balancing or prioritizing of competing uses.
5. CONCLUSION
1. In many respects, the Wai_hole opinion leaves many more questions for those charged with the daily responsibilities of managing the Public Trust than it answers. Those charged with the responsibility of managing the trust should carry out their duties with the realization that the Hawai`i's Water Resources Trust embedded in our state Constitution embraces the mandate of "promot[ing] the development and utilization of these resources . . . in furtherance of the self-sufficiency of the State" with equal force as the command to conserve and protect the trust res. Haw. Const. art. XI, § 1.
2. The framers of the State Constitution defined "conservation" as "the protection, improvement and use of natural resources according to principles that will assure their highest economic or social benefits." Stand. Comm. Rep. No. 77, in 1 Proceedings of the Constitutional Convention of Hawaii of 1978, at 686 (1980) (emphasis added).
3. Most interestingly, the majority leaves open the questions of if and how the Public Trust applies to land. Id. at 133 ("We need not define the full extent of article XI, section 1's reference to 'all public resources' at this juncture."). When that time comes, which no doubt will be soon, the clash between the public trust doctrine as it relates to land and the principles embedded in the Fifth Amendment of the United States Constitution ("[N]or shall private property be taken for public use, without just compensation") and article I, section 20 of the Hawai`i Constitution ("Private property shall not be taken or damaged for public use without just compensation") will take center stage. See Wai_hole, 94 Hawai`i at 181 ("Usufructory water rights . . . 'have always been incomplete property rights, so the expectations[4] of [rightholders] to the enjoyment of these rights are generally weaker than the expectation of the right to exploit the full value of dry land.'") (Quoting A. Dan Tarlock, Law of Water Rights and Resources § 3:92, at 3-153 (2000)).
1The following outline is a discussion piece, drafted from the point of view of a private right holder. This outline, designed to highlight the inherent tensions between "public" and "private" rights, does not necessarily represent the views of the authors.
2The implications of this attempted supremacy, when measured against both the state or federal prohibition against the taking of private property without just compensation, highlights the tension suggested by this paper.