Hawai'i Supreme Court Extends Relaxed Standing to SMA Permits and Prohibits SMA Permit Exemptions from 201H Affordable Housing Projects

On June 16, 2021, the Hawai'i Supreme Court ("HSCT") issued its opinion in Protect and Preserve Kahoma Ahupua‘a Association v. Maui Planning Commission.

First, the HSCT upheld the Intermediate Court of Appeal's ("ICA") decision that the Maui Planning Commission ("MPC") improperly denied the Association's standing to intervene in special management area ("SMA") use permit proceedings. 

The SMA permit is a coastal use permit under the Coastal Zone Management Act, Hawai'i Revised Statutes ("HRS") chapter 205A ("CZMA"). In the County of Maui, the MPC considers and issues major SMA permits after holding a contested case hearing, where parties are allowed to intervene, present evidence, cross-examine witnesses, and present and argue conditions of permit approval. 

The Association requested intervention in the contested case before the MPC but was denied. The MPC determined that the Association was not entitled to intervention because it “failed to demonstrate that they will be so directly and immediately affected by the matter before the Commission that their interests are clearly distinguishable from that of the general public.” The MPC also concluded that the Association failed to show a threatened injury traceable to the proposed project. 

The Association appealed. The Circuit Court agreed with the MPC. The Association appealed again.

The ICA disagreed with the MPC and the Circuit Court. Instead, the ICA extended the HSCT's decision in In re Application of Maui Elec. Co. (MECO), 141 Hawai‘i 249 (2017). The ICA held that the CZMA is an environmental law under article XI, section 9 of the Hawai‘i Constitution. Therefore, plaintiffs were entitled to procedural due process to protect their constitutional right to a clean and healthful environment, which invokes a less rigorous standing requirement. Consequently, the Association needed to "demonstrate an injury in fact, which requires them to show that they suffered an actual or threatened injury fairly traceable to the defendant’s actions, and that a favorable decision would likely provide relief." They did not need to show an injury that is different in kind from an injury to the public generally.

Having established standing to intervene, the ICA also determined that the Association was entitled to a hearing. Based on the record, the ICA opined that (1) that the Association sought to protect a constitutionally protected “property interest” under article XI, section 9, and (2) participation in the contested case hearing before the MPC was required to protect that interest.

The HSCT agreed with the ICA's analysis. 

Second, the HSCT also opined on a key provision of Hawaii's affordable housing statute, HRS chapter 201H.

To promote the development of affordable housing in Hawai'i, HRS § 201H-38 broadly allows exemptions “relating to the development and improvement of land.” Exemptions are adopted by county resolution, which generally includes exemptions to specific statutes, ordinances, and rules. 

The HSCT opined that even if the project was explicitly exempt from complying with SMA permitting requirements, "the Council would not have been able to exempt the Project" from those requirements. The CZMA, is not a law “relating to” the development and improvement of land for exemptions under 201H-38. Therefore, the MPC would have been required "to make findings on the Project’s consistency with the West Maui Community Plan."

The case was remanded to the MPC for further proceedings.