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Day v. Apoliona

July 26, 2010

VIRGIL E. DAY; MEL HOOMANAWANUI; JOSIAH L. HOOHULI; PATRICK L. KAHAWAIOLAA; SAMUEL L. KEALOHA, JR., PLAINTIFFS-APPELLANTS
v.
HAUNANI APOLIONA, INDIVIDUALLY AND IN HER OFFICIAL CAPACITY AS CHAIRPERSON AND TRUSTEE OF THE OFFICE OF HAWAIIAN AFFAIRS; ROWENA AKANA; DANTE CARPENTER; DONALD CATALUNA; LINDA KEAWE'EHU DELA CRUZ; COLETTE Y. PI'IPI'I MACHADO; BOYD P. MOSSMAN; OSWALD SOM-BMK STENDER; JOHN D. WAIHE'E, IV, TRUSTEES OF THE OFFICE OF HAWAIIAN AFFAIRS OF THE STATE OF HAWAII SUED IN THEIR OFFICIAL CAPACITIES FOR DECLARATORY AND PROSPECTIVE INJUNCTIVE RELIEF SUED IN INDIVIDUAL CAPACITIES FOR DAMAGES; CLAYTON HEE; CHARLES OTA, FORMER TRUSTEES OF THE OFFICE OF HAWAIIAN AFFAIRS OF THE STATE OF HAWAII, SUED IN THEIR INDIVIDUAL CAPACITIES FOR DAMAGES, DEFENDANTS-APPELLEES,
STATE OF HAWAII, DEFENDANT-INTERVENOR-APPELLEE.



Appeal from the United States District Court for the District of Hawaii Susan Oki Mollway, Chief District Judge, Presiding. No. 1:05-CV-00649-D.C.

The opinion of the court was delivered by: Fisher, Circuit Judge.

FOR PUBLICATION

OPINION

Argued and Submitted October 13, 2009 -- Honolulu, Hawaii

Before: Robert R. Beezer, Susan P. Graber and Raymond C. Fisher, Circuit Judges.

Plaintiffs are "native Hawaiians," defined in section 201(a) of the Hawaiian Homes Commission Act, Pub. L. No. 67-34, 42 Stat. 108 (1921) ("HHCA"), to mean "any descendant of not less than one-half part of the blood of the races inhabiting the Hawaiian Islands previous to 1778."*fn1 As such they are beneficiaries of a "public trust" created in the Hawaii Admission Act, Pub. L. No. 86-3, 73 Stat. 4 (1959) ("Admission Act"). They contend that the trustees of the Office of Hawaiian Affairs ("OHA"), a Hawaii state agency that administers a portion of the public trust's proceeds, breached the trust. Plaintiffs appeal from the district court's grant of summary judgment to the OHA trustees. We have jurisdiction under 28 U.S.C. § 1291, and we affirm.

I. BACKGROUND

A. The § 5(f) Trust

The Admission Act granted to the State of Hawaii title to most of the federal government's public land within the state. Id. § 5(b)-(e), 73 Stat. at 5-6. Section 5(f) of the Admission Act requires the state to hold much of that land and profits from it in "public trust" (the "§ 5(f) trust") for five enumerated purposes. Id. § 5(f), 73 Stat. at 6. One such purpose is "for the betterment of the conditions of native Hawaiians, as defined in the Hawaiian Homes Commission Act." Id. The other purposes - for public schools, development of farm and home ownership, public improvements and the provision of land for public use - are not limited to native Hawaiians. Id. After setting forth these purposes, § 5(f) further specifies that the trust "shall be managed and disposed of for one or more of the foregoing purposes in such manner as the constitution and laws of said State may provide, and their use for any other object shall constitute a breach of trust." Id. Hawaii has provided that a portion of the § 5(f) trust's proceeds shall be administered by OHA.

B. OHA's Portion of the § 5(f) Trust

OHA is a Hawaii state agency that administers a portion of the § 5(f) trust's proceeds as well as some other funds. See generally Haw. Rev. Stat. ch. 10. In particular, state law entitles OHA to receive "[t]wenty per cent of all funds derived from" the § 5(f) trust, Haw. Rev. Stat. §§ 10-3, 10-13.5, and requires this portion of the § 5(f) trust's proceeds to "be held and used [by OHA] solely as a public trust for the betterment of the conditions of native Hawaiians." Id. § 10-3.*fn2 State law thus appears to limit OHA's uses of § 5(f) trust proceeds to only one of the five purposes enumerated in the federal statute. See Day v. Apoliona, 496 F.3d 1027, 1029 (9th Cir. 2007) ("Day I") ("OHA receives a portion of the § 5(f) trust monies, which it is to devote 'to the betterment of the conditions of [n]ative Hawaiians.' " (quoting Haw. Rev. Stat. § 10-3)).

C. The Challenged Expenditures

Plaintiffs challenge four projects on which the OHA trustees have spent parts of its 20-percent share of the § 5(f) trust's proceeds.

1. The Akaka Bill

OHA used § 5(f) trust money to lobby for and support the proposed Native Hawaiian Government Reorganization Act of 2007, commonly referred to as the "Akaka Bill" after Senator Daniel Akaka of Hawaii, one of its chief proponents. The Akaka Bill would create a process through which the United States could recognize a governing entity for Hawaii's indigenous people. See Native Hawaiian Government Reorganization Act of 2007, S. 310, 110th Cong. (2007). The governing entity would have the power to establish its own criteria for citizenship. Id. § 7(c)(2)(B)(iii)(I)(aa). Initially, however, it would be governed by an "interim governing council," id. § 7(c)(2)(A), to be elected by "adult members of the Native Hawaiian community who elect to participate in the reorganization of the Native Hawaiian governing entity and are certified to be Native Hawaiian," id. § 7(c)(1)(A). For the purposes of the Akaka Bill, the term "Native Hawaiian" includes (essentially) any direct descendant of the indigenous people of Hawaii. Id. § 3(10). This definition is broader than the class of "native Hawaiians" (like plaintiffs) comprised only of individuals with "not less than one-half part" indigenous Hawaiian lineage. See HHCA § 201(a).

The Akaka Bill would expressly empower both the United States government and the State of Hawaii to negotiate and enter agreements with the Native Hawaiian governing entity regarding "the transfer of lands, natural resources, and other assets, and the protection of existing rights related to such lands or resources" and "the exercise of governmental authority over any transferred lands, natural resources, and other assets, including land use." Akaka Bill § 8(b)(1)(A)-(B).

2. Native Hawaiian Legal Corporation ("NHLC")

NHLC identifies itself as "a non-profit corporation that specializes in Hawaiian land and Hawaiian rights issues." OHA used ยง 5(f) trust money to fund a contract with NHLC, under which NHLC agrees to render a range of legal services including "[a]ssertion and defense of quiet title actions," protection of water rights, "[p]reservation of Native Hawaiian Land Trust entitlements" and preservation of traditional practices and culturally significant places. The contract does not restrict NHLC to providing legal services to "native Hawaiians." Its recitals explain that OHA "has established a program whereby all Hawaiians can receive" certain legal services and that "the program is intended to better the conditions of all Hawaiians." In addition, the contract defines "Hawaiian" to ...


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