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IN THE SUPREME COURT OF THE STATE OF HAWAI#I
Electronically Filed
---o0o--- Supreme Court
30049
T.A. NO. 07-0086 27-APR-2011
08:02 AM
JOHN M. CORBOY and STEPHEN GARO AGHJAYAN, Plaintiffs-Appellants,
vs.
DAVID M. LOUIE,1 in his official capacity as Acting Attorney
General, State of Hawai#i; COUNTY OF MAUI; and COUNTY OF KAUAI,
Defendants-Appellees.
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T.A. NO. 07-0099
GARRY P. SMITH and EARL F. ARAKAKI, Plaintiffs-Appellants,
vs.
DAVID M. LOUIE, in his official capacity as Acting Attorney
General, State of Hawai#i; and CITY AND COUNTY OF HONOLULU,
Defendants-Appellees.
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T.A. NO. 07-0102
J. WILLIAM SANBORN, Plaintiff-Appellant,
vs.
DAVID M. LOUIE, in his official capacity as Acting Attorney
General, State of Hawai#i; and COUNTY OF HAWAII, Defendants-
Appellees.
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T.A. NO. 08-0039
In the Matter of the Tax Appeal of STEPHEN GARO AGHJAYAN,
Appellant-Appellant,
and
STATE OF HAWAI#I, Intervenor-Appellee.
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T.A. NO. 08-0040
In the Matter of the Tax Appeal of JOHN M. CORBOY,
Appellant-Appellant,
1
During the pendency of this action, David M. Louie (Louie)
succeeded Mark J. Bennett as Attorney General. Thus, pursuant to Hawai#i
Rules of Appellate Procedure Rule 43(c)(1) (2010), Louie has been substituted
automatically for Bennett in this case.
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and
STATE OF HAWAI#I, Intervenor-Appellee.
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T.A. NO. 08-0041
In the Matter of the Tax Appeal of GARRY P. SMITH,
Appellant-Appellant,
and
STATE OF HAWAI#I, Intervenor-Appellee.
---------------------------------------------------------------
T.A. NO. 08-0042
In the Matter of the Tax Appeal of WILLIAM J. SANBORN,
Appellant-Appellant,
and
STATE OF HAWAI#I, Intervenor-Appellee.
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T.A. NO. 08-0043
In the Matter of the Tax Appeal of EARL F. ARAKAKI,
Appellant-Appellant,
and
STATE OF HAWAI#I, Intervenor-Appellee.
NO. 30049
APPEAL FROM THE TAX APPEAL COURT
(Tax Appeal Case No. 07-0086 (Consolidated Nos. 07-0086, 07-0099,
07-0102, 08-0039, 08-0040, 08-0041, 08-0042, 08-0043))
APRIL 27, 2011
RECKTENWALD, C.J., NAKAYAMA, AND DUFFY, JJ., AND CIRCUIT
JUDGE NISHIMURA, ASSIGNED IN PLACE OF MOON, C.J.,
RECUSED AND RETIRED, WITH ACOBA, J., CONCURRING SEPARATELY
OPINION OF THE COURT BY RECKTENWALD, C.J.
Plaintiffs-appellants are real property owners and
taxpayers who brought claims in the Tax Appeal Court against
various state and county defendants-appellants, seeking an
exemption from real property taxes equal to the exemption granted
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to Hawaiian homestead lessees under the Hawaiian Homes Commission
Act (HHCA) and their respective county codes.2
Taxpayers, who are not native Hawaiian, argued that the
tax exemptions for homestead lessees involve discrimination on
the basis of race in violation of the Fifth and Fourteenth
Amendments to the United States Constitution and federal civil
rights laws because only native Hawaiians are eligible to become
homestead lessees under the HHCA. They accordingly sought a
refund of real property taxes paid in excess of what they would
have been assessed had each of them been granted a tax exemption;
a declaration that the HHCA, § 4 of the Admission Act, and
article XII, sections 1-3 of the Hawai#i Constitution are
invalid; and an injunction barring implementation of any real
property tax exemption given exclusively to Hawaiian homestead
lessees.
The State filed a motion for summary judgment on the
ground that the disputed tax exemptions did not violate the equal
protection clause because they did not involve a suspect
classification. Specifically, the State argued that “the tax
exemptions are not based upon whether a taxpayer is native
Hawaiian or not, but rather whether the taxpayer is a homestead
2
Plaintiff-appellants John M. Corboy, Stephen Garo Aghjayan,
Gary P. Smith, Earl F. Arakaki, and J. William Sanborn are hereinafter
referred to collectively as “Taxpayers.” Defendants-appellees David M. Louie,
in his official capacity as Acting Attorney General, State of Hawai#i; the
County of Maui; the County of Kaua#i; the City and County of Honolulu; the
County of Hawai#i; and the State of Hawai#i are hereinafter referred to
collectively as “State.”
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lessee of HHCA land.” (Emphasis in original). The State further
argued that Taxpayers lacked standing to challenge the tax
exemption on the ground that only native Hawaiians are eligible
to become homestead lessees because Taxpayers had not established
that they were interested in participating in the homestead lease
program. The tax appeal court granted the State’s motion for
summary judgment on the ground that the tax exemption did not
involve a suspect classification.3 On appeal, Taxpayers
challenge the tax appeal court’s judgment in favor of the State.
We hold that Taxpayers lack standing to pursue their
challenges to the constitutionality of the tax exemption and the
HHCA, generally.4 As set forth below, the record does not
establish that Taxpayers are interested in participating in the
homestead lease program, and Taxpayers have accordingly not
established an injury-in-fact sufficient to confer standing and
to warrant the exercise of the tax appeal court’s jurisdiction in
this case. We therefore vacate the tax appeal court’s judgment
and remand with instructions to dismiss Taxpayers’ complaints for
lack of jurisdiction. Cf. Office of Hawaiian Affairs v. Hous. &
Cmty. Dev. Corp. of Hawai#i, 121 Hawai#i 324, 339, 219 P.3d 1111,
1126 (2009) (vacating and remanding for an entry of judgment
dismissing claims, where the plaintiff’s claims were not ripe for
3
The Honorable Gary W.B. Chang presided.
4
As discussed further infra, the remaining issues raised in
Taxpayers’ appeal are waived or were otherwise not properly preserved.
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adjudication).
I. BACKGROUND
A. Historical Background
Taxpayers raise numerous challenges to State action
with regard to the ceded lands and the Hawaiian home lands. To
analyze the claims set forth in this appeal, it is necessary to
present the historical context in which this case arises.
1. Ceded Lands
“[F]rom 1826 to 1893, the United States recognized the
independence of the Kingdom of Hawaii, extended full and complete
diplomatic recognition to the Hawaiian Government, and entered
into treaties and conventions with the Hawaiian monarchs to
govern commerce and navigation[.]” Apology Resolution, Pub. L.
No. 103-150, 107 Stat. 1510, 1510 (1993) (hereinafter Apology
Resolution). In 1893, “the United States Minister assigned to
the sovereign and independent Kingdom of Hawaii conspired with a
small group of non-Hawaiian residents of the Kingdom of Hawaii,
including citizens of the United States, to overthrow the
indigenous and lawful Government of Hawaii[.]” Id. The group
that overthrew the Kingdom established a provisional government
and, after a failed attempt at annexation with the United States,
declared itself the Republic of Hawai#i. Id. at 1511-12.
Approximately five years later, the United States
annexed Hawai#i with the passage of the Newlands Joint
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Resolution. Joint Resolution To provide for annexing the
Hawaiian Islands to the United States (Newlands Resolution), No.
55, 30 Stat. 750 (1898); see also Apology Resolution at 1512.
Upon annexation, the Republic of Hawai#i “ceded 1,800,000 acres
of crown, government and public lands of the Kingdom of Hawaii
[to the United States], without the consent of or compensation to
the Native Hawaiian people of Hawaii or their sovereign
government.”5 Apology Resolution at 1512. This court has
recognized that the Republic “ced[ed] and transfer[red] to the
United States the absolute fee and ownership of all public,
Government, or Crown lands . . . belonging to the Government of
the Hawaiian Islands, together with every right and appurtenance
thereunto appertaining[.]” Trs. of the Office of Hawaiian
Affairs v. Yamasaki, 69 Haw. 154, 159, 737 P.2d 446, 449 (1987)
(brackets in original) (citing Newlands Resolution at 750).
Under the Newlands Resolution, the revenue and proceeds from
these “ceded lands” were to “be used solely for the benefit of
the inhabitants of the Hawaiian Islands for educational and other
public purposes.”6 Newlands Resolution at 750.
5
Although “[t]he public debt of the Republic of Hawaii . . . [was]
assumed by the government of the United States[,]” with the exception that
“the liability of the United States in this regard shall in no case exceed
four million dollars[,]” Newlands Resolution at 751 (emphasis added), no
compensation was made to the Kingdom of Hawai#i, see Apology Resolution at
1512.
6
Taxpayers assert that “[t]he Newlands Resolution established the
Ceded Lands Trust[.]” As discussed further infra in part III(B), this court
need not decide whether a trust was created by the Newlands Resolution because
Taxpayers did not properly preserve this point in the tax appeal court.
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Congress then passed the Organic Act, Act of April 30,
1900, c. 339, 31 Stat. 141 (1900), reprinted in 1 Hawai#i Revised
Statutes (HRS) 86 (2009), which “provided a government for the
territory of Hawaii and defined the political structure and
powers of the newly established Territorial Government[.]”
Apology Resolution, at 1512. The Organic Act stated, in relevant
part:
That the public property ceded and transferred to the
United States by the Republic of Hawaii under the
joint resolution of annexation . . . shall be and
remain in the possession, use, and control of the
government of the Territory of Hawaii, and shall be
maintained, managed, and cared for by it, at its own
expense, until otherwise provided for by Congress, or
taken for the uses and purposes of the United States
by direction of the President or of the governor of
Hawaii.
Organic Act, § 91.
2. Hawaiian Home Lands
Congress later enacted the Hawaiian Homes Commission
Act, 1920, Act of July 9, 1921 (HHCA), Pub. L. 67-34, 42 Stat.
108, reprinted in 1 HRS 261 (2009), which mandated that
approximately 200,000 acres of the ceded lands be held in trust
for the benefit of native Hawaiians.7 See Bush v. Watson, 81
Hawai#i 474, 477 n.3, 918 P.2d 1130, 1133 n.3 (1996). Congress
enacted the HHCA after holding hearings and determining that
Hawaiians were a “dying race,” with the number of “full-blooded
Hawaiians” dropping from 142,650 in 1826 to 22,600 in 1919. H.R.
7
The term “native Hawaiian” is defined in the HHCA as “any
descendent of not less than one-half part of the blood of the races inhabiting
the Hawaiian Islands previous to 1778.” HHCA § 201(a).
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Rep. No. 66-839, at 2 (1920). The report of the Committee on the
Territories quoted Territorial Senator John H. Wise, an architect
of the HHCA, in discussing “the reasons for the decline of the
Hawaiian race” and the need for such legislation:
The Hawaiian people are a farming people and
fishermen, out-of-door people, and when they were
frozen out of their lands and driven into the cities
they had to live in the cheapest places, tenements.
That is one of the big reasons why the Hawaiian people
are dying. Now, the only way to save them, I contend,
is to take them back to the lands and give them the
mode of living that their ancestors were accustomed to
and in that way rehabilitate them.
Id. at 1-4 (quoting Hearings before the Committee on the
Territories, House of Representatives, 66th Cong., 2d Sess., on
Proposed Amendments to the Organic Act of the Territory of
Hawai#i, Feb. 3, 4, 5, 7 and 10, 1920, at 39-40 (statement of
Sen. John H. Wise)).
3. Admission Act
In 1959, Congress passed the Hawai#i Admission Act
(Admission Act), Pub. L. No. 86-3, 73 Stat. 4 (1959), reprinted
in 1 HRS 135 (2009), which made Hawai#i a state of the Union. As
a condition of admission, “the State of Hawai#i agreed to hold
certain lands granted to the State by the United States in a
public land trust,” subject to the trust provisions set forth in
§ 5(f) of the Admission Act.8 Office of Hawaiian Affairs v.
8
Section 5(f) provides:
The lands granted to the State of Hawaii by subsection
(b) of this section and public lands retained by the
United States under subsections (c) and (d) and later
conveyed to the State under subsection (e), together
(continued...)
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State, 96 Hawai#i 388, 390, 31 P.3d 901, 903 (2001); see
Admission Act § 5. Section 5(b) of the Admission Act granted to
the newly established state the United States’ title to “all the
public lands and other public property, and to all lands defined
as ‘available lands’ by section 203 of the [HHCA], within the
boundaries of the State of Hawaii[.]” The Admission Act stated
in relevant part: “lands granted to the State of Hawaii by
subsection (b) . . . together with the proceeds from the sale or
other disposition of any such lands and the income therefrom,
shall be held by said State as a public trust[.]” Admission Act
§ 5(f).
Section 4 of the Admission Act further required the
State of Hawai#i to adopt the HHCA as part of its Constitution
and barred changes in the qualifications of the lessees without
the consent of the United States.9 The United States and the
8
(...continued)
with the proceeds from the sale or disposition of any
such lands and the income therefrom, shall be held by
said State as a public trust for the support of the
public schools and other public educational
institutions, for the betterment of the conditions of
native Hawaiians, as defined in the Hawaiian Homes
Commission Act, 1920, as amended, for the development
of farm and home ownership on as widespread a basis as
possible for the making of public improvements, and
for the provision of lands for public use. Such lands,
proceeds, and income 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 for which suit may be
brought by the United States.
9
Section 4 provides:
As a compact with the United States relating to the
(continued...)
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State thus entered a compact under which the State would assume
the management and disposition of the Hawaiian home lands. See
Haw. Const. art. XI, § 2 (1959) (renumbered art. XII, §§ 1-2
(1978)). This court has noted that “the federal government set
aside certain public lands to be considered Hawaiian home lands
to be utilized in the rehabilitation of native Hawaiians, thereby
undertaking a trust obligation benefiting [sic] the aboriginal
people” and “the State of Hawaii assumed this fiduciary
obligation upon being admitted into the Union as a state.” Ahuna
v. Dep’t of Hawaiian Home Lands, 64 Haw. 327, 338, 640 P.2d 1161,
1168 (1982).
B. Taxpayers’ Complaints
On August 2, 2007, Maui County homeowner John M. Corboy
(Corboy) paid under protest his real property taxes of $1,023.10
9
(...continued)
management and disposition of the Hawaiian home lands,
the Hawaiian Homes Commission Act, 1920, as amended,
shall be adopted as a provision of the Constitution of
said State, as provided in section 7, subsection (b)
of this Act, subject to amendment or repeal only with
the consent of the United States, and in no other
manner: Provided, That (1) sections 202, 213, 219,
220, 222, 224 and 225 and other provisions relating to
administration, and paragraph (2) of section 204,
sections 206 and 212, and other provisions relating to
the powers and duties of officers other than those
charged with the administration of said Act, may be
amended in the constitution, or in the manner required
for State legislation, . . . (2) that any amendment to
increase the benefits to lessees of Hawaiian home
lands may be made in the constitution, or in the
manner required for State legislation, but the
qualifications of lessees shall not be changed except
with the consent of the United States; . . . .
(Some emphasis in original and some added.)
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for the first half of tax year 2007-2008.10 He asserted that he
was entitled to an exemption from real property taxes equal to
the exemption granted to Hawaiian homestead lessees.11 He argued
that the tax exemption for Hawaiian homestead lessees violated
10
HRS § 40-35(a) (1993) provides that “[a]ny disputed portion of
moneys representing a claim in favor of the State may be paid under protest to
a public accountant of the department, board, bureau, commission, or other
agency of the State with which the claimant has the dispute.”
11
Although not cited by Corboy, original lessees on Hawaiian home
lands in Maui County are entitled to an exemption from real property taxes
under HHCA § 208 and Maui County Code (MCC) § 3.48.555. HHCA § 208 provides,
in pertinent part:
Conditions of leases. Each lease made under the
authority granted the department by section 207 of
this Act, and the tract in respect to which the lease
is made, shall be deemed subject to the following
conditions, whether or not stipulated in the lease:
(1) The original lessee shall be a native
Hawaiian, not less than eighteen years of
age. . . .
. . . .
(7) The lessee shall pay all taxes assessed
upon the tract and improvements
thereon. . . .
(8) The lessee shall perform such other
conditions, not in conflict with any
provision of this Act, as the department
may stipulate in the lease; provided that
an original lessee shall be exempt from
all taxes for the first seven years after
commencement of the term of the lease.
(Emphasis added).
MCC § 3.48.555 provides, in pertinent part:
Exemptions from real property taxes as set forth
in . . . section 208 of the Hawaiian Homes Commission
Act, 1920, . . . shall remain in effect and be
recognized by this County in its administration of the
real property tax system; provided, that real property
leased under homestead and not general leases pursuant
to the authority granted the department of Hawaiian
home lands by section 207 of the Hawaiian Homes
Commission Act, 1920, shall be exempt from real
property taxes, the seven-year limitation on the
exemption afforded by section 208 of the Hawaiian
Homes Commission Act, 1920, notwithstanding.
(Emphasis added).
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his rights, as a non-native Hawaiian, to equal protection of the
law as guaranteed by the Fourteenth Amendment to the United
States Constitution and federal civil rights laws. On August 14,
2007, the Maui County Department of Finance advised Corboy that:
Property taxes applied to the Department of Hawaiian
Home Lands (DHHL) are governed by [MCC] 3.48.555 and
authorized under the Hawaii State Constitution and
[HRS].
Your property does not fall under either provision and
is, therefore, not appropriate for an exemption under
the MCC or the HRS.
Kaua#i County homeowner Stephen Garo Aghjayan
(Aghjayan), City and County of Honolulu homeowners Gary P. Smith
(Smith) and Earl F. Arakaki (Arakaki), and Hawai#i County
homeowner J. William Sanborn (Sanborn) likewise paid under
protest their real property taxes for 2007-2008 by claiming an
exemption equal to the exemption granted to Hawaiian homestead
lessees under the HHCA and their respective county laws.12 Smith
12
Taxpayers did not specify which county codes they were
challenging. However, Revised Ordinances of Honolulu (ROH) § 8-10.23 and
Kaua#i County Code (KCC) § 5A-11.23(a) are nearly identical to MCC § 3.48.555,
quoted supra note 11, and provide that “real property leased under homestead
and not general leases . . . shall be exempt from real property taxes, the
seven year limitation on the exemption . . . notwithstanding.” (Emphasis
added). Accordingly, the counties of Maui, Honolulu and Kaua#i extend the tax
exemption for Hawaiian homestead lessees beyond the seven year period mandated
by HHCA § 208(8). However, it appears that the County of Hawai#i requires
that Hawaiian homestead lessees pay a “minimum tax” of between $25 and $100
after the seven-year exemption period expires:
Hawaiian home lands, as defined in section 201,
Hawaiian Homes Commission Act, 1920, as amended, real
property, exclusive of buildings, leased and used as a
homestead (houselots, farm lots, and pastoral lots),
pursuant to section 207(a) and subject to the
conditions of sections 208 and 216 of the Hawaiian
Homes Commission Act, 1920, shall be exempt from real
property taxes, except for the minimum tax, and as
provided for by this section. Disposition of Hawaiian
(continued...)
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and Arakaki also pursued their protested payments by filing
Notices of Real Property Assessment Appeal with the Board of
Review for the City and County of Honolulu.13
On August 31, 2007, Corboy and Aghjayan pursued their
claims for a real property tax exemption by filing a complaint in
the tax appeal court (TX No. 07-0086) pursuant to HRS § 40-
35(b).14 On April 14, 2008, Corboy and Aghjayan filed an Amended
Complaint for Refund of Real Property Taxes Paid Under Protest
Pursuant to HRS § 40-35 and for Declaratory and Injunctive Relief
(amended complaint), naming as defendants the Attorney General,
12
(...continued)
home lands for other than homestead purposes is deemed
fully taxable and will not qualify for the exemption
granted by this section. The respective homestead
lessee of Hawaiian home lands shall continue to
qualify and receive other personal exemptions,
provided that claims for the exemptions are timely
filed, including the seven-year limitation on the
exemption afforded by section 208 of the Hawaiian
Homes Commission Act, 1920.
Hawai#i County Code (HCC) § 19-89 (emphasis added); see also HCC § 19-90(e)
(providing that “there shall be levied upon each individual parcel of real
property taxable under this chapter, a minimum real property tax of $100 per
year,” except under certain conditions where the minimum tax is lower).
13
The record does not reflect the result of Smith’s and Arakaki’s
appeals to the Board of Review. The record does, however, reflect that Smith
and Arakaki previously appealed their assessments for tax year 2006 to the
Board of Review, and that the Board of Review determined that “[t]he assessed
value of the property as determined by the director is correct.” In their
Complaint, Smith and Arakaki assert that “the Board denied the appeals of both
[Smith and Arakaki in 2006] without deciding or even mentioning the
constitutional questions raised.” The Complaint does not, however, directly
allege that Smith’s and Arakaki’s real property taxes from tax year 2006-2007
are at issue in the instant case.
14
HRS § 40-35(b) provides, in pertinent part, that “[a]ny action to
recover payment of taxes under protest shall be commenced in the tax appeal
court.”
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State of Hawai#i; the County of Maui; and the County of Kaua#i.15
In their amended complaint, Corboy and Aghjayan alleged, in
pertinent part, as follows:
1. This action is brought under HRS §§ 40-35
and 232-3[ 16] and Rules 1 and 2(a)(4) of the Tax
Appeal Court of the State of Hawaii for refund of real
property taxes paid to the Counties of Maui and Kauai
under protest. Plaintiffs seek, under the Constitution
and civil rights laws of the United States, exemption
from real property taxes equal to the exemptions given
respectively, by the County of Maui and County of
Kauai to Hawaiian homestead lessees; and demand, among
other relief, an equivalent exemption and refund of
any amounts greater than would have been payable if
they (each Plaintiff respectively) had that same or
equivalent exemption.
. . . .
CLEAR AND CONCISE STATEMENT OF BASIS FOR APPEAL (HRS
§ 232-3)
6. The County of Maui and its officials, and
the County of Kauai and its officials, acting in
concert with the State of Hawaii and its officials and
the United States and its officials and the other
counties and their officials, by exempting Hawaiian
homestead lessees from some or all real property taxes
but denying an equivalent exemption to other property
owners in their respective counties, deprive
15
The parties later stipulated to the intervention of the State of
Hawai#i as a defendant.
16
HRS § 232-3 (2001), concerning tax appeals provides:
Grounds of appeal, real property taxes. In the
case of a real property tax appeal, no taxpayer or
county shall be deemed aggrieved by an assessment, nor
shall an assessment be lowered or an exemption
allowed, unless there is shown:
. . . .
(2) Lack of uniformity or inequality, brought about
by illegality of the methods used or error in
the application of the methods to the property
involved, or
(3) Denial of an exemption to which the taxpayer is
entitled and for which the taxpayer has
qualified, or
(4) Illegality, on any ground arising under the
Constitution or laws of the United States or the
laws of the State (in addition to the ground of
illegality of the methods used, mentioned in
clause (2)).
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Plaintiffs, and other real property owners similarly
situated in each of their counties, of equal
protection, privileges and immunities under the law in
violation of the Equal Protection Clauses of the Fifth
and Fourteenth Amendments and Federal civil rights
laws. Plaintiffs and others similarly situated,
solely because they are not “any descendant of not
less than one-half part of the blood of the races
inhabiting the Hawaiian islands previous to 1778” can
never become Hawaiian homestead lessees; and their
ownership of an interest in real property in the
counties of Maui and Kauai, respectively, therefore,
can never qualify for the exemption. Because
thousands of Hawaiian homestead lessees pay reduced or
no real property taxes in the counties of Maui and
Kauai, but still receive the benefit of municipal
services including some or all of the following:
police and fire protection; emergency medical care
services; culture and recreation; planning, zoning and
permitting; sewage and solid waste collection and
disposal; public mass transportation; human services;
traffic safety and control; and construction and
maintenance of public streets, roads, bridges,
walkways and drainage and flood control systems and
other county infrastructure and services, Plaintiffs
and all property owners similarly situated in each of
those counties each pay proportionately more twice
each year to carry them. Every six months these
citizens of the United States are each forced to pay
extra dollars to their respective counties of Maui and
Kauai to support a group selected not by need or merit
but because of their racial ancestry. Refund alone
will not provide adequate relief because, unless
declaratory and injunctive relief is granted, a
multiplicity of suits year after year by Plaintiffs
and others similarly situated will be necessary.
7. Since this action draws into question the
constitutionality of State of Hawaii and Federal laws
(including § 4 of the 1959 Admission Act which
required as a condition of statehood that the State of
Hawaii adopt the [HHCA,] still mandates that the State
continue to carry out the HHCA and forbids repeal or
amendment without the consent of the United States),
Plaintiffs will promptly serve this complaint and the
attached Notice of Constitutional Question on the
Attorney General of the United States and the United
States Attorney for the District of Hawaii and on the
Attorney General of the State of Hawaii.[ 17]
Accordingly, Corboy and Aghjayan sought the following
relief:
17
Although a copy of the complaint was served on the Attorney
General of the United States and the United States Attorney for the District
of Hawaii, the United States was not made a party to this action.
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A. Find and Declare:
1. As to real property tax exemptions, in
the absence of equivalent exemptions for Plaintiffs
and other real property owners similarly situated in
each of the Counties of Maui and Kauai, the special
exemptions from real property taxes given to Hawaiian
homestead lessees by each of those Counties violate
the Fourteenth Amendment of the United States
Constitution and 42 U.S.C. §§ 1981, 1983, 1985(3),
1986 and 2000d et. seq. and/or other statutory and
common law and are invalid;
2. As to the HHCA, the Compact in § 4 of
the 1959 Admission Act, and Art. XII of the Hawaii
Constitution, in the absence of equivalent homestead
leases and benefits for every Hawaii citizen without
regard to race or ancestry, the HHCA, the Compact in §
4 of the Admission Act of March 18, 1959, and Article
XII, §§ 1-3 of the Constitution of the State of
Hawaii, mandate, encourage, aid, abet or act in
concert with the counties of Maui and Kauai (and other
counties) in the deprivation of the equal protection
of the laws and equal privileges and immunities under
the laws of Plaintiffs and others similarly situated,
violate the Fifth and Fourteenth Amendments and/or 42
U.S.C. §§ 1981, 1983, 1985(3), 1986 and 2000d et. seq.
or other federal statutory and common law, and are
invalid;
B. Enter judgment for refund to each Plaintiff
by the applicable County of Maui and County of Kauai
of all amounts paid under protest for real property
taxes greater than would have been payable if each
Plaintiff had an exemption equivalent to that for
Hawaiian homestead lessees;
C. Enjoin Defendants. Permanently enjoin each
of the Defendants and all persons acting in concert
with them, from further implementation of any real
property tax exemptions given exclusively to Hawaiian
homestead lessees and from any further or other
discrimination between taxpayers on the basis of race,
ancestry or status as Hawaiian homestead lessees in
the assessment, levy and collection of taxes. This
injunction should also provide that, for as long as
HHCA § 208(8) and the compact in Admission Act § 4
remain in effect, and any Hawaiian homestead lessee
enjoys exemption from all taxes during the first 7
years after the commencement of the term of the lease,
Plaintiffs and all other taxpayers similarly situated
in the County of Maui and the County of Kauai “shall”
also “be exempt from all taxes.”
D. Costs, attorneys fees, other relief. Allow
Plaintiffs their costs, reasonable attorneys’ fees,
and such other further relief as is just.
Corboy and Aghjayan’s amended complaint was filed by
attorney H. William Burgess (Burgess), who filed nearly identical
complaints with the tax appeal court concerning real property
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taxes paid under protest for tax year 2007-2008 on behalf of
Smith and Arakaki (TX No. 07-0099), and Sanborn (TX No. 07-0102).
Burgess also appealed Taxpayers’ real property tax assessments
for tax year 2008-2009 by filing Notices of Appeal directly with
the tax appeal court (TX Nos. 08-0039, 08-0040, 08-0041, 08-0042,
and 08-0043) pursuant to HRS § 232-16 (Supp. 2007).18 The
appeals in TX Nos. 08-0039, 08-0040, 08-0041, 08-0042, and 08-
0043, and Burgess’s three tax appeal court complaints in TX Nos.
07-0086, 07-0099 and 07-0102, were consolidated under Corboy and
Aghjayan’s case in TX No. 07-0086.
C. Summary Judgment Motions
On April 20, 2009, the Attorney General and the State
of Hawai#i filed a motion for summary judgment, in which the
defendant counties joined.19 In its Memorandum in Support of
State of Hawaii’s and Attorney General’s Motion for Summary
18
HRS § 232-16, concerning appeals from assessments, provides in
pertinent part:
Appeal to tax appeal court. A taxpayer or
county, in all cases, may appeal directly to the tax
appeal court without appealing to a state board of
review, or any equivalent administrative body
established by county ordinance. An appeal to the tax
appeal court is properly commenced by filing, on or
before the date fixed by law for the taking of the
appeal, a written notice of appeal in the office of
the tax appeal court and by service of the notice of
appeal on the director of taxation and, in the case of
an appeal from a decision involving the county as a
party, the real property assessment division of the
county involved. An appealing taxpayer shall also pay
the costs in the amount fixed by section 232-22.
19
The County of Kaua#i also filed a motion to dismiss on April 30,
2009, which it later withdrew.
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Judgment, the State sought:
judgment in full for the State, and against
[Taxpayers] on the ground that the alleged
discriminatory tax exemption is based upon the
indisputably non-suspect classification of whether one
is a homestead lessee (pursuant to [the HHCA]) or not.
Assuming this court accepts that premise, this case
will be very simple, as the State will need only to
demonstrate a conceivable rational basis for the tax
exemption. The State demonstrates in this motion that
many such conceivable rational bases exist to uphold
the tax exemption. The State also shows that
Taxpayers’ federal civil rights claims are without
merit.
In the unlikely . . . event this [c]ourt decides
that the tax exemption involves an ostensibly racial
classification that [T]axpayers have standing to
attack, then this [c]ourt would likely deny this
motion for summary judgment. In that unlikely event,
the State will file a subsequent and different summary
judgment motion . . . arguing that even if the
classification generating the differential tax
treatment is deemed to be based upon whether the
taxpayer is native Hawaiian or not, Taxpayers’ Equal
Protection challenge is still not subject to strict
scrutiny, but rather to the deferential Morton v.
Mancari “tied rationally” standard of review
applicable to native peoples. See Morton v. Mancari,
417 U.S. 535, 555 (1974).[ 20] The State would then
demonstrate that the tax exemptions satisfy that
Mancari standard. . . .
(Footnote omitted).
The State argued that “[n]o suspect classification is
involved in the HHCA homestead real property tax exemption”
20
In Mancari, the United States Supreme Court upheld a statutory
employment preference for American Indians in the Bureau of Indian Affairs
against a challenge brought pursuant to the Equal Employment Opportunity Act
of 1972, 86 Stat. 103, 42 U.S.C. § 2000e et seq. (1970 ed., Supp. II), and the
due process clause of the Fifth Amendment to the United States Constitution.
417 U.S. at 537, 551, 555. The Court’s conclusion that the preference did not
constitute invidious racial discrimination was based in part on the “unique
legal status of Indian tribes under federal law and upon the plenary power of
Congress . . . to legislate on behalf of [them].” Id. at 551. The Court
analogized the preference to “the constitutional requirement that a United
States Senator, when elected, be ‘an Inhabitant of that State for which he
shall be chosen,’” id. at 554 (citation omitted), and concluded that “the
preference is political rather than racial in nature[,]” id. at 554 n.24.
Thus, the Court concluded that “[a]s long as the special treatment can be tied
rationally to the fulfillment of Congress’ unique obligation toward the
Indians, such legislative judgments will not be disturbed.” Id. at 555.
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“because the tax exemptions are not based upon whether a taxpayer
is native Hawaiian or not, but rather whether the taxpayer is a
homestead lessee of HHCA land.” (Some formatting altered)
(emphasis in original). The State asserted that “native
Hawaiians who are not homestead lessees of HHCA land also do not
receive the tax exemption[.]” (Emphasis in original). The State
further argued that “[b]ecause the status of being a homestead
lessee versus not being one is plainly not a suspect
classification, the tax exemptions are not subject to strict
scrutiny, but rather to the rational basis test.” (Citation
omitted).
The State, relying on San Antonio Independent School
District v. Rodriguez, 411 U.S. 1, 19 (1973), also argued that
Taxpayers’ argument that a suspect classification is involved
“because only native Hawaiians can become homestead lessees of
HHCA land” failed because “[e]qual [p]rotection analysis
requires, first ‘delineation of the disfavored class,’ which in
this case are those taxpayers who are not homestead lessees of
HHCA land -- a group that includes most native Hawaiians.”
(Emphasis in original).
The State further argued that Taxpayers lacked standing
to challenge the HHCA on the ground that only native Hawaiians
are eligible to become homestead lessees of HHCA lands because
“there is no allegation, much less evidence, that Taxpayers
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actually desire to become homestead lessees of HHCA lands.”21
Accordingly, the State argued, “eliminating the native Hawaiian
qualification to become a HHCA homestead lessee would have no
effect upon Taxpayers as they would still not become HHCA
homesteaders.” (Emphasis in original).
Having argued that the classification is subject to
rational basis review, the State asserted that “[t]here are many
conceivable rational bases to uphold the tax exemption for HHCA
homestead lessees,” including that the HHCA imposes “severe
restrictions” on alienation of a lessee’s interest, “severely
limits who may succeed to a homestead lease upon the lessee’s
death[,]” and that “HHCA homestead lessee households have below-
average household income.” (Some formatting altered).
The State also argued that “Taxpayers’ federal civil
rights claims fail because the tax exemptions are not based upon
any ostensibly racial criteria, but rather upon whether one is a
HHCA homesteader or not,” and because the “federally mandated
[HHCA] expressly authorizes the county tax exemptions.”
(Formatting altered) (emphasis in original). The State further
21
In their Reply Brief to this court, Taxpayers assert that “[t]he
State’s assertion that [Taxpayers] do not ‘want’ a homestead lease is
incorrect.” However, Taxpayers do not point to any evidence in the record to
indicate that they desire to become homestead lessees. To the contrary, in
their Memorandum in Opposition to State’s Motion for Summary Judgment,
Taxpayers asserted that “[n]one of the [Taxpayers] in these eight consolidated
cases ask for award of a homestead lease. Rather each of these citizens comes
to this Court for redress of the assessment of his real property taxes without
the benefit of an exemption equivalent to that given to Hawaiian homestead
lessees.” Accordingly, as discussed further infra in part III(A), the record
does not establish that Taxpayers are interested in participating in the
homestead lease program.
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argued that “[b]ecause the HHCA . . . is a federally mandated
law, . . . it cannot itself violate another more general federal
law. That is because a specific statute like HHCA § 208(8)
cannot be invalidated by a far more general statute, which the
federal civil rights statutes certainly are.” (Emphasis in
original).
Taxpayers filed a Memorandum in Opposition to State’s
Motion for Summary Judgment on May 1, 2009. Taxpayers argued
that in Rice v. Cayetano, 528 U.S. 495, 514 (2000), the United
States Supreme Court rejected an argument similar to that set
forth by the State in the instant case, that the real property
tax exemption does not involve a suspect classification.22
Taxpayers further asserted that:
the “special” exemption from real property taxes at
issue in this case is not based merely on being a
lessee of Hawaiian home lands. It is limited to DHHL
homestead leases for which only one class of persons
selected using a racial classification is eligible;
and the HHCA only requires the exemption for the first
22
In Rice, the United States Supreme Court struck down a provision
of the Hawai#i Constitution that limited the right to vote for trustees of the
Office of Hawaiian Affairs (OHA) to “qualified voters who are Hawaiians, as
provided by law.” 528 U.S. at 498-99, 509. The Court rejected the State’s
argument that the restriction did not involve a racial category “but instead a
classification limited to those whose ancestors were in Hawaii at a particular
time, regardless of their race.” Id. at 514. The Court also noted that,
“[s]imply because a class defined by ancestry does not include all members of
the race does not suffice to make the classification race-neutral.” Id. at
516-17. The Court concluded that, in the context of the voting restriction,
ancestry functioned as a proxy for race and the restriction therefore violated
the Fifteenth Amendment to the United States Constitution, which provides that
“[t]he right of citizens of the United States to vote shall not be denied or
abridged . . . on account of race, color, or previous condition of servitude.”
Id. at 514-17; U.S. Const. amend. XI, § 1. Rice did not address whether such
a classification would violate the Fourteenth Amendment. 528 U.S. at 522
(“The question before us is not the one-person, one-vote requirement of the
Fourteenth Amendment, but the race neutrality command of the Fifteenth
Amendment.”).
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seven years after commencement of the term of each
original homestead lessee. Each county is free of any
federal mandate and can eliminate the discriminatory
assessments after the first seven years of the
original lease of each tract by simply enacting an
ordinance.
(Emphasis in original).
Taxpayers also argued that “there can be no genuine
dispute that any native Hawaiian citizen of Hawaii is more
favored than [Taxpayers], simply because he or she is eligible to
compete on an equal basis for the exemption in question.”
(Emphasis in original). With regard to standing, Taxpayers
asserted that:
Each of the [Taxpayers] is affected personally
by the challenged exemption because, if he was
accorded the equal privileges and immunities to which
he is entitled, i.e., exemption equivalent to that for
homesteaders, his real property taxes would be no more
than $100 per year and he would be entitled to a
refund for the two or three most recent years at
issue.
None of these five [Taxpayers] in these eight
consolidated cases ask for award of a homestead lease.
Rather each of these citizens comes to this Court for
redress of the assessment of his real property taxes
without the benefit of an exemption equivalent to that
given to Hawaiian homestead lessees.
Taxpayers also argued that Mancari does not apply to
the HHCA tax exemption, but rather “applies only to federally
recognized Indian tribes, their members, and regulation of Indian
tribes and members by the Bureau of Indian Affairs[.]” Taxpayers
also argued that, “[i]n Rice, the [United States] Supreme Court
rejected the Mancari defense[,]” and there is therefore “no need
to reach the issues of ‘indigenous’ status and ‘special
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relationships.’”23
In addition, Taxpayers argued that (1) “Congress’
exercise of its power under the Admission Clause to admit Hawaii
as a State of the Union does not immunize the challenged programs
from judicial review[;]” (2) “[t]he Equal Footing Doctrine and
the rule that Congress cannot authorize a state to violate the
Equal Protection Clause lead to the conclusion that a
congressional admission act could not put a new state on an
unequal footing by authorizing it to deny on account of race the
right to receive public benefits[;]” (3) “Congress [cannot]
immunize governmental conduct from judicial review by declaring a
trust or making an unconstitutional contract[;]” and (4)
“[c]laims to Hawaiian home lands raise grave constitutional
concerns” because “[t]he HHCA clearly ‘purports’ to cloud the
title now held by the State of Hawaii[.]” (Some formatting
altered).
On May 1, 2009, Taxpayers filed a Counter-Motion for
Summary Judgment. In their Memorandum in Support of Counter-
Motion for Summary Judgment, Taxpayers alleged the following
23
In Rice, the Court determined that the Mancari analysis did not
extend to a voting provision that, the Court concluded, classified on the
basis of race and therefore violated the Fifteenth Amendment. 528 U.S. at
520-22; see supra note 22. The Court, however, declined to address whether
“native Hawaiians have a status like that of Indians in organized tribes[.]”
Id. at 518-19. Thus, the Court did not reject Mancari in its entirety.
Rather, the Court determined that, even assuming arguendo that Mancari can be
extended to native Hawaiians, it nevertheless “does not follow from Mancari
. . . that Congress may authorize a State to establish a voting scheme that
limits the electorate for its public officials to a class of tribal Indians,
to the exclusion of all non-Indian citizens.” Id. at 520.
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“[k]ey facts”:
1. All four counties of the State of Hawaii provide
special exemptions from real property taxes for
lessees of DHHL homestead lots.
2. Under the HHCA, only “native Hawaiians” are
eligible for award of DHHL homestead leases.
3. The definition of “native Hawaiian” which is the
foundation and only reason for the existence of
HHC-DHHL is a racial classification.
4. Use of a racial classification by any
governmental actor, federal, state or local, is
subject to strict scrutiny.
5. The counties’ special exemptions for homestead
lessees have a racial purpose and a racial
effect.
6. The counties’ exemptions cannot pass strict
scrutiny because the counties, like the federal
and state governments, have no compelling
interest in discriminating between home owners
on the basis of racial ancestry.
(Footnote omitted).
Taxpayers argued that “the definitions of ‘Hawaiian’
and ‘native Hawaiian’ are racial classifications,” and that “no
compelling interest requires the State or its counties to
discriminate between citizens or homeowners on the basis of
race.” (Emphasis in the original).
The court held a hearing on the State’s summary
judgment motion on May 11, 2009. During the hearing, the State
argued that Taxpayers did not have “standing to [] challenge the
fact that only native [H]awaiians can become homesteaders.” The
State explained its standing argument as follows:
[Deputy Attorney General (DAG):] What we’re
saying is because they do not want a homestead,
they’ve affirmatively stated in their declaration in
their opposition that they do not want a homestead
that they have to [sic] right to then no standing to
then challenge the fact that only native [H]awaiians
can become homesteaders. And, so, because they don’t
want a homestead there’s no reason for them to
challenge any qualification for becoming a
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homesteader, therefore, they can’t raise or challenge
the qualifi -- any of the qualifications for becoming
a homesteader including the native Hawaiian -- native
[H]awaiian qualification, therefore, there’s no basis
at all for them to suggest that there’s any suspect
classification involved in this particular tax appeal.
THE COURT: So, you’re saying a non[-H]awaiian
non lessee can never have standing. The only possible
class of persons that can challenge the homestead
exemption is a [H]awaiian non lessee.
[DAG:] Well, again, they have the general
standing to challenge the homestead exemption. What
we’re saying is they can’t try and raise the fact that
only native [H]awaiians can become homesteaders. They
can’t raise that aspect unless they want to be a
homesteader. And, so, therefore, if they’re only
allowed -- because they don’t want a homestead they
can’t challenge the aspect of becoming a homesteader
any aspect or any qualification of becoming a
homesteader including the native [H]awaiian
qualification. And, it’s that native [H]awaiian
qualification that’s the key to their attempt to try
and create a suspect classification or try and claim
that this tax exemption somehow discriminates on the
basis of the suspect classification and because they
don’t want homestead they have no right and standing
to challenge the qualification any qualification for
becoming a homesteader including the native [H]awaiian
qualification.
The State asserted that “[Taxpayers] have general
standing to challenge the fact that a homesteader gets the
exemption and the non homesteader doesn’t. That classification
is clearly a non suspect one. . . . they have a general standing
to challenge the fact that they don’t get the tax exemption and
other people do[.]”
The tax appeal court stated:
This is an equal protection challenge and the
court does not view this case as raising a suspect
classification. The court does believe that this is a
rationale [sic] basis situation and that is the
standard this court is applying to this matter. There
is no suspect class involved. And, therefore, the
court is inclined to conclude that there is a
rationale [sic] basis for the classification involved
in this case.
And, for that and any other good cause on the
record, the court is inclined to grant the motion.
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The tax appeal court then asked Burgess, counsel for
Taxpayers, “if [he] wish[ed] to make any further argument or
record at this time.” Burgess argued that the classifications
presented in the HHCA and, specifically in § 208, are racial
classifications, and asked the court to analyze the
classifications under strict scrutiny. The tax appeal court then
asked Burgess whether Rice was distinguishable because “in the
case at bar you have a situation where within the [H]awaiian race
you have lessees and non lessees[.]” Burgess argued that
it’s not a valid distinction because if every -- if
everyone leasing Hawaiian home lands, for example, was
exempt from the taxes, there would be no problem. But
that’s not the case. The [HHCA] itself specifically
says that like other lessees of home lands are taxed
just like everyone else.[ 24]
The tax appeal court granted the State’s motion for
summary judgment, concluding that there was no evidence in the
record to refute the rational bases offered by the State.
The tax appeal court held a hearing on Taxpayers’
counter-motion for summary judgment on June 8, 2009. Taxpayers
advised the tax appeal court that they intended to appeal the
prior summary judgment decision, and stated that “perhaps it
would be appropriate to present the arguments for this motion at
this time for the record.” Taxpayers’ subsequent argument to the
tax appeal court is somewhat unclear. Taxpayers discussed their
24
It is not clear which “other lessees” Burgess was referring to.
However, under HHCA § 208, only “an original lessee” is exempted from real
property taxes, and “[t]he original lessee shall be a native Hawaiian.”
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theory that the Newlands Resolution created a Ceded Lands Trust,
and asserted that the United States, in requiring that the State
of Hawai#i adopt the HHCA, was in violation “not only of the
trust but also of the constitution, the equal protection
component of the Fifth Amendment, the trust law, the basic trust
law, and also the equal footing doctrine.” Taxpayers also
appeared to argue that, in adopting the Hawai#i Constitution, the
State of Hawaii “violated its duty as trustee.” Taxpayers
further argued that the counties’ extension of the real property
tax exemption “to Hawaiian homestead lessees for the full term of
the lease to some extent” “violates . . . the basic trust law[.]”
Taxpayers also asserted that “any use of a racial
classification by any governmental actor” is reviewed under
strict scrutiny, and that “the definition of [n]ative Hawaiian
. . . and Hawaiian . . . is a racial classification.” Taxpayers
also asserted that the tax exemption is “illegal” because it
violates trust law.
In response, the State argued that the tax appeal
court’s previous ruling “would necessarily preclude summary
judgment for [Taxpayers].” The tax appeal court denied
Taxpayers’ motion for summary judgment, noting that “the court
will maintain its consistency with its ruling at the prior
hearing.”
On June 26, 2009, the tax appeal court filed its Order
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Granting State of Hawaii’s and Attorney General’s Motion for
Summary Judgment. On July 29, 2009, the tax appeal court filed
its Order Denying [Taxpayers’] Counter-Motion for Summary
Judgment. On August 7, 2009, the tax appeal court entered its
final judgment “in favor of the State of Hawaii, the Attorney
General, and in favor of each of the Counties in each case in
which the respective county is a Defendant-Appellee.”
D. Taxpayers’ appeal
A timely appeal followed. Upon Taxpayers’ motion, this
court accepted transfer of the case on December 29, 2009.25 In
their Opening Brief, Taxpayers present the following points of
error:26
A. Legality of HHCA adopted by Congress in
1921. Whether the [HHCA] violated and still violates
the Equal Protection component of the Fifth Amendment
and the fiduciary duty of the United States as Trustee
of the Ceded Lands Trust created in 1898 by the
Annexation Act.
. . .
B. Imposition of HHCA compact on the new State
of Hawaii in 1959. Whether the United States, by § 4
of the Admission Act of March 18, 1959, Pub L 86-3, 73
Stat. 4, (which required, as a condition of statehood
and as a compact with the United States, that the new
State of Hawaii adopt the HHCA and continue to carry
it out) also violated the Fifth Amendment and the
fiduciary duty of the United States as Trustee of the
25
We subsequently denied Taxpayers’ request for an injunction
pending appeal. On April 14, 2010, Taxpayers filed a petition for a writ of
certiorari with the United States Supreme Court, seeking review of this
court’s order denying an injunction pending appeal. See Docket of the Supreme
Court of the United States in No. 09-1256, available at
http://www.supremecourt.gov/docket/docket.aspx. The Court denied Taxpayers’
petition on June 21, 2010. Orders List at 7, available at
http://www.supremecourt.gov/orders/courtorders/062110zor.pdf.
26
In their Opening Brief, Taxpayers identify their points of error
as “Questions Presented.”
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Ceded Lands Trust as well as the Equal Footing
Doctrine;
. . .
C. Adoption of HHCA by State in 1959 and
continuing to implement it. Whether the State of
Hawaii, by agreeing to the compact and adopting the
HHCA, incorporating it into Hawaii’s Constitution and
continuing to implement it, violates the Fourteenth
Amendment, federal civil rights laws, and the State’s
fiduciary duty as Trustee of the federal Ceded Lands
Trust;
. . .
D. The counties’ special exemptions for
Hawaiian homestead lessees. Whether each of the four
counties of the State of Hawaii, by giving Hawaiian
homestead lessees special exemption from real property
taxes and depriving Appellants and other homeowners
similarly situated of the same exemption, violates the
Fourteenth Amendment and other provisions of the
Constitution and laws of the United States as well as
each of the county’s fiduciary duties as political
subdivisions of the State of Hawaii, Trustee of the
Ceded Lands Trust.
. . .
E. The Tax Appeal Court’s final judgment and
several orders. Whether the Tax Appeal Court erred in
granting the State’s motion for summary judgment and
the counties’ joinders in that motion; and in denying
Appellants’ counter-motion for summary judgment.
With regard to the tax exemptions, Taxpayers argue
that, because only native Hawaiians can become homestead lessees,
the State and counties violate the Fourteenth Amendment by
providing real property tax exemptions to homestead lessees and
not to Taxpayers and others similarly situated.
In their Answering Brief, the State argues that the
challenged tax exemptions do not involve a racial classification,
but instead classify on the basis of HHCA homesteader status, and
therefore are not subject to strict scrutiny. The State further
argues that “Taxpayers’ argument that only native Hawaiians can
become homestead lessees of HHCA land is irrelevant for two
independent reasons.” First, the State argues that “the
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disfavored class,” i.e., those who are not homestead lessees and
cannot receive the tax exemptions, includes both native Hawaiians
and non-native Hawaiians. Accordingly, the State argues, “there
is no racial classification, and strict scrutiny is
inapplicable.”
Alternatively, the State argues that Taxpayers do not
have standing to challenge the tax exemptions on the ground that
only native Hawaiians can become homestead lessees, because
Taxpayers have not established a desire to become homestead
lessees. Accordingly, the State argues, Taxpayers do not have
standing to argue that the native Hawaiian qualification turns
the classification of homesteader vs. non-homesteader into a
suspect classification. The State asserts that Taxpayers may
therefore only challenge the tax exemption “in general -- i.e.,
to challenge the fact that homesteaders receive the tax
exemption, while non-homesteaders do not.”
II. STANDARD OF REVIEW
We first consider whether Taxpayers have standing to
bring their claims. “Whether the circuit court has jurisdiction
to hear the plaintiffs’ complaint presents a question of law,
reviewable de novo. A plaintiff without standing is not entitled
to invoke a court’s jurisdiction. Thus, the issue of standing is
reviewed de novo on appeal.” Hawaii Medical Ass’n v. Hawaii Med.
Serv. Ass’n, Inc., 113 Hawai#i 77, 90, 148 P.3d 1179, 1192 (2006)
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(citing Mottl v. Miyahira, 95 Hawai#i 381, 388, 23 P.3d 716, 723
(2001)).
III. DISCUSSION
Taxpayers seek review of the tax appeal court’s
August 7, 2009 judgment, entered pursuant to its June 26, 2009
Order Granting State of Hawaii’s and Attorney General’s Motion
for Summary Judgment. Accordingly, we focus our analysis on the
claim alleged in Taxpayers’ amended complaint and upon which the
tax appeal court’s judgment was granted, i.e., Taxpayers’ claim
that the HHCA tax exemption and the HHCA, generally, violate the
equal protection components of the Fifth27 and Fourteenth
Amendments.28
We note that Taxpayers’ challenge to the HHCA tax
exemption is, in essence, a challenge to the HHCA’s native
27
“The Fifth Amendment . . . does not contain an equal protection
clause as does the Fourteenth Amendment which applies only to the states.”
Bolling v. Sharpe, 347 U.S. 497, 499 (1954). Nevertheless, the United States
Supreme Court has held that the guarantee of equal protection applies to the
federal government through the due process clause of the Fifth Amendment. Id.
at 500. Because no federal defendants have been named in the instant case,
and because “[e]qual protection analysis in the Fifth Amendment area is the
same as that under the Fourteenth Amendment,” Buckley v. Valeo, 424 U.S. 1, 93
(1976) (citation omitted), we do not discuss the Fifth Amendment further.
28
In their Opening Brief, Taxpayers also assert that the HHCA
violates federal civil rights laws, and direct this court’s attention to their
respective complaints, wherein they asserted that the HHCA, Admission Act § 4,
and article XII, sections 1-3 of the Hawai#i Constitution violate 42 U.S.C.
§§ 1981, 1983, 1985(3), 1986 and 2000d et seq. However, Taxpayers’ Opening
Brief does not provide any argument concerning federal civil rights laws.
This point of error may accordingly be deemed waived, Hawai#i Rules of
Appellate Procedure (HRAP) Rule 28(b)(7), and will not be further addressed.
In addition, although Taxpayers’ “Questions Presented” raise
challenges based on the equal footing doctrine and Taxpayers’ theory that the
Newlands Resolution created a land trust, these claims were not properly
preserved or may otherwise be disregarded. See infra, part III(B).
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Hawaiian qualification for homestead lessees. In the tax appeal
court and on appeal, Taxpayers have alleged that the tax
exemption violates equal protection principles because only
native Hawaiians are eligible to receive it. However, the tax
exemption provision of the HHCA provides a tax exemption for
“original lessee[s]” and not specifically to native Hawaiians.
It is HHCA §§ 207(a) and 208(1), governing homestead lease
eligibility requirements, which provide that lessees must be
native Hawaiian. Accordingly, Taxpayers’ allegations concerning
the constitutionality of the tax exemption challenge those
provisions of the HHCA that set forth the lease eligibility
requirements. We therefore construe Taxpayers’ challenge to the
tax exemption afforded to homestead lessees as a challenge to
those lease eligibility provisions.29
A. Taxpayers do not have standing to bring their constitutional
challenges to the HHCA because they have not established an
injury-in-fact sufficient to confer standing
As set forth below, Taxpayers have failed to allege an
29
Similarly, the respective county codes provide that “real property
leased under homestead and not general leases pursuant to the authority
granted the department of Hawaiian home lands by section 207 of the [HHCA],
shall be exempt from real property taxes, the seven-year limitation on the
exemption . . . notwithstanding.” MCC § 3.48.555 (emphasis added); see also
ROH § 8-10.23 (same); KCC § 5A-11.23 (same); HCC § 19-89 (providing an
exemption for “Hawaiian home lands . . . leased and used as a homestead . . .
pursuant to section 207(a) and subject to the conditions of sections 208 and
216 of the [HHCA]”). The county tax exemptions are therefore granted based on
the same criteria as the HHCA tax exemption, i.e., they are granted to
homestead lessees who meet the eligibility requirements set forth in HHCA
§ 207. Accordingly, we similarly construe Taxpayers’ challenge to the
respective county codes that effectuate the HHCA tax exemption, i.e., MCC
§ 3.48.555, ROH § 8-10.23, KCC § 5A-11.23, HCC § 19-89, as a challenge to the
lease eligibility provisions.
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injury-in-fact with regard to the HHCA’s native Hawaiian ancestry
qualification for homestead lessees. Accordingly, Taxpayers do
not have standing to bring their challenges to the
constitutionality of the tax exemptions for homestead lessees, or
the HHCA, generally.
This court has stated that:
Though the courts of Hawaii are not subject to a
“cases or controversies” limitation like that imposed
upon the federal judiciary by Article III, § 2 of the
United States Constitution, we nevertheless believe
judicial power to resolve public disputes in a system
of government where there is a separation of powers
should be limited to those questions capable of
judicial resolution and presented in an adversary
context. . . . In short, judicial intervention in a
dispute is normally contingent upon the presence of a
“justiciable” controversy.
Sierra Club v. Dep’t of Transp. (Superferry I), 115 Hawai#i 299,
319, 167 P.3d 292, 312 (2007) (emphasis added) (citations
omitted).
This court has further explained that:
Standing is that aspect of justiciability focusing on
the party seeking a forum rather than on the issues he
wants adjudicated. And the crucial inquiry in its
determination is whether the plaintiff has alleged
such a personal stake in the outcome of the
controversy as to warrant his invocation of the
court’s jurisdiction and to justify the exercise of
the court's remedial powers on his behalf.
County of Kaua#i ex rel. Nakazawa v. Baptiste, 115 Hawai#i 15, 26,
165 P.3d 916, 927 (2007) (quotation marks omitted) (emphasis
added) (quoting Life of the Land v. Land Use Comm’n, 63 Haw. 166,
172, 623 P.2d 431, 438 (1981)).
We determine whether a plaintiff has alleged a
“personal stake in the outcome of the controversy” sufficient to
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confer standing by asking: “(1) has the plaintiff suffered an
actual or threatened injury . . . ; (2) is the injury fairly
traceable to the defendant’s actions; and (3) would a favorable
decision likely provide relief for plaintiff’s injury.”
Superferry I, 115 Hawai#i at 319, 167 P.3d at 312 (footnote and
citation omitted) (ellipses in original).
“With respect to the first prong of this test, the
plaintiff must show a ‘distinct and palpable injury to himself
[or herself]’” as opposed to an alleged injury that is “abstract,
conjectural or merely hypothetical.” Mottl v. Miyahira, 95
Hawai#i 381, 389, 23 P.3d 716, 724 (2001) (brackets in original)
(citations and some quotation marks omitted) (quoting Life of the
Land, 63 Haw. at 173 n.6, 623 P.2d at 446 n.6; Doyle v. Okla. Bar
Ass’n, 998 F.2d 1559, 1566 (10th Cir. 1993)). Moreover, a
plaintiff must demonstrate “that they have suffered an injury to
a recognized interest, as opposed to ‘merely airing a political
or intellectual grievance.’” Id. at 395, 23 P.3d at 730 (quoting
Akau v. Olohana Corp., 65 Haw. 383, 390, 652 P.2d 1130, 1135
(1982)).
Because this court is not bound by the same “cases or
controversies” limitation as the federal courts, see Superferry
I, 115 Hawai#i at 319, 167 P.3d at 312, federal cases concerning
standing are not dispositive on this issue. Nevertheless, the
Ninth Circuit Court of Appeals’ analysis in Carroll v. Nakatani,
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342 F.3d 934 (9th Cir. 2003), is persuasive. In Carroll, the
court affirmed the district court’s grant of summary judgment in
favor of the State and state defendants, on the ground that the
plaintiffs lacked standing to raise equal protection challenges
to various state programs. Id. at 948.
Specifically, plaintiff Carroll alleged injury from,
inter alia, “[the Office of Hawaiian Affairs’ (OHA)] allocation
of benefits to native Hawaiians and Hawaiians.” Id. at 947.
Carroll asserted “that OHA discriminates against him on the basis
of race through the operation of the OHA program[,]” but
“offer[ed] no evidence that he [was] ‘able and ready’ to compete
for, or receive, an OHA benefit” and “[did] not even identif[y] a
program that he would be interested in receiving.” Id.
(citations omitted). Carroll also acknowledged that he had never
applied for any OHA programs. Id. Accordingly, the court
concluded that “Carroll lack[ed] standing because he fail[ed] to
show an injury from the allocation of benefits to native
Hawaiians and Hawaiians. He present[ed] only a generalized
grievance, requesting the State to comply with his interpretation
of the United States Constitution.” Id.
Similarly, plaintiff Barrett challenged both OHA’s
business loan program and the HHCA homestead lease program. Id.
at 938. Barrett had sought to obtain an OHA loan to open a copy
shop. Id. at 941. However, his loan application to OHA was
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incomplete, and he had failed to comply with OHA’s request to
complete the omitted information and return his application. Id.
at 941. In addition, Barrett admitted that he had not prepared a
business plan or determined any of the proposed business’s
operational costs, and that “the only step taken in furtherance
of his business was to speak with a sales clerk at Office Depot.”
Id. The court concluded that Barrett could not demonstrate he
had been denied equal treatment because he “fail[ed] to
demonstrate he [was] ‘able and ready’ to compete on an equal
basis for an OHA loan, or benefit from OHA’s assistance in
applying for one.” Id. at 942. Accordingly, the court concluded
that Barrett “fail[ed] to demonstrate an injury in fact,” and
therefore did not have standing to pursue his equal protection
claim. Id. at 943.
With regard to Barrett’s challenge to the HHCA
homestead lease program, the court concluded that “Barrett
adequately demonstrated an injury in fact.” Id. The court noted
that, in order to obtain a homestead lease, “a person need only
state a desire to obtain a lease and provide certain personal
information.” Id. (emphasis added). Thus, Barrett suffered an
injury in fact from the denial of his homestead lease
application.30 Id.
30
The court nevertheless concluded that Barrett did not have
standing to pursue his claim because he had failed to name the United States
as a party and his claim was accordingly not redressable. Id. at 944-45. The
(continued...)
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The reasoning of Carroll is consistent with the
decisions of this court, which have required that a plaintiff
demonstrate that he or she has “suffered an actual or threatened
injury as a result of the defendants’ conduct[.]” See, e.g.,
Mottl, 95 Hawai#i at 391, 23 P.3d at 726 (citation omitted);
Sierra Club v. Hawai#i Tourism Auth., 100 Hawai#i 242, 250, 59
P.3d 877, 885 (2002). For example, in Mottl, the plaintiffs (the
labor union representing University of Hawai#i faculty and
several individual faculty members) filed a complaint “seeking to
prevent the implementation of the ‘payroll lag act[,]’” which
“would have resulted in a reduction in the University of Hawaii’s
expenditures of approximately $6,163,000.00 in fiscal year 1998.”
95 Hawai#i at 383 & n.4; 23 P.3d at 718 & n.4. The State
defendants filed a motion for summary judgment and a motion to
dismiss the complaint arguing, inter alia, that the plaintiffs
30
(...continued)
court explained:
[Barrett’s] injury, the inability to compete for
Hawaiian homestead leases on an equal footing with
native Hawaiians, requires a change in the
qualification of the lease program. The native
Hawaiian classification is both a state and a federal
requirement. Consequently, any change in the
qualification requires the participation of the State
of Hawaii and the United States. Barrett's claim is
not redressable because he failed to include the
United States as a party to the action despite notice
that its participation would be necessary.
Id. at 944 (citation omitted) (emphasis added); see also Arakaki v. Lingle,
477 F.3d 1048, 1061 (9th Cir. 2007) (“[T]he United States remains an
indispensable party to any challenge to the DHHL/HHC lease eligibility
criteria.”).
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“suffered no injury as a result of the conduct of which they
complained.” Id. at 386, 23 P.3d at 721. The circuit court
granted judgment in favor of the State on the merits. Id. at
388, 23 P.3d at 723.
On appeal, this court concluded that the plaintiffs
lacked standing to assert their claims. Id. at 395, 23 P.3d 730.
In so doing, we noted:
[T]he plaintiffs’ allegation that the
withholding of six million dollars from the University
of Hawaii’s appropriation resulted in “a loss of
support for working conditions, teaching programs,
research programs, discretionary support staff,
replacement of consumable items, and . . .
electricity and telephone charges” merely invites this
court to infer that the plaintiffs, or at least some
of them, were actually affected. In fact, during oral
argument, the plaintiffs’ counsel conceded that the
plaintiffs’ claim to standing in the present matter
depends on such an inference. However, in the absence
of evidence in the record establishing what “specific”
and “personal” interest has been affected, the
plaintiffs’ argument amounts to speculation.
Moreover, even if the plaintiffs were to have
alleged specific examples of changes in their work
environment that had negatively impacted them, they
would still have the burden of demonstrating that
these changes were attributable to the defendants’
actions. The loss of six million dollars could have
been offset by the university through a tuition
increase, a reduction in student services, a freeze of
administrative-as opposed to teaching-staff salaries,
or other savings without any discernible effect on the
faculty members.
The plaintiffs do not attempt to prove any
specific and personal injury but, rather, press their
general proposition that, in any organization, a loss
of six million dollars from its budget must have some
negative effect on its operations, ultimately
affecting all of its employees. Their argument calls
for assumptions or inferences that are not supported
by the record or any case law that the plaintiffs
cite. Accordingly, the injury that the plaintiffs
assert is “abstract, conjectural, or merely
hypothetical.” Citizens for Protection of North
Kohala Coastline [v. County of Hawai#i, 91 Hawai#i 94,
100, 979 P.2d 1120, 1126 (1999)], does not abrogate
the “injury in fact” standing requirement in actions
for declaratory relief affecting a public interest,
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but merely mandates less demanding standards in
assessing the plaintiffs’ proof of an “injury in
fact.” Inasmuch as the plaintiffs have failed to
demonstrate that they suffered an injury to a
recognized interest, as opposed to “merely airing a
political or intellectual grievance,” we hold that the
plaintiffs lacked standing to pursue the present
action.
Id. at 394-95, 23 P.3d at 729-30 (emphasis added) (citations
omitted).
In the instant case, Taxpayers have failed to meet
their burden of establishing that the standing requirements have
been satisfied. See Sierra Club v. Hawai#i Tourism Authority,
100 Hawai#i 242, 250, 59 P.3d 877, 885 (2002) (“Petitioner must
establish its standing for this court to exercise jurisdiction
over this case.”). In order to meet the first prong of the
injury-in-fact test, i.e., that they had suffered an actual or
threatened injury, Taxpayers were required to establish their
interest in participating in the homestead lease program.
However, as set forth supra, the record does not reflect that
Taxpayers have applied for a homestead lease, and does not
otherwise establish that Taxpayers are interested in
participating in the homestead lease program. To the contrary,
in their memorandum in opposition to the State’s motion for
summary judgment, Taxpayers asserted that “[n]one of the
[Taxpayers] in these eight consolidated cases ask for award of a
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homestead lease.”31
Accordingly, Taxpayers’ allegations “merely invite[]
this court to infer that the plaintiffs, or at least some of
them, were actually affected.” See Mottl, 95 Hawai#i at 394, 23
P.3d at 729. “[I]n the absence of evidence in the record
establishing what ‘specific’ and ‘personal’ interest has been
affected,” Taxpayers’ argument “amounts to speculation.” See id.
at 395, 23 P.3d at 730. Without more, Taxpayers are “‘merely
airing a political or intellectual grievance[,]’” see id., which
the tax appeal court lacked jurisdiction to redress.32
31
In their Reply Brief to this court, Taxpayers respond that “[t]he
State’s assertion that [Taxpayers] do not ‘want’ a homestead lease is
incorrect. [Taxpayers] have not applied for a homestead lease. To seek equal
treatment in the taxation of their real property, [T]axpayers are not required
to first make futile applications.” (Emphasis in original) (citation and bold
emphasis omitted). Even assuming arguendo that Taxpayers were not required to
“make futile applications” for homestead leases in order to establish standing
under the injury-in-fact test, nevertheless Taxpayers were required to
establish their interest in participating in the homestead lease program in
order to demonstrate that they had suffered an actual or threatened injury.
Despite Taxpayers’ assertions to the contrary in their Reply Brief, Taxpayers
do not identify anywhere in the record where they have established they are
interested in participating in the homestead lease program.
32
We decline to reach the issue, raised in the concurring opinion,
of whether Taxpayers have general taxpayer standing to assert their claims.
Although each of the individual plaintiffs allege that they are taxpayers,
they do not expressly claim general taxpayer standing. See Mottl, 95 Hawai#i
at 391 n.13, 23 P.3d at 726 n.13. Accordingly, we need not address this
theory. Id. (concluding that “the circuit court’s exercise of jurisdiction
over [plaintiffs’] complaint may not be justified on the ground that they were
taxpayers[,]” where plaintiffs did not expressly claim general taxpayer
standing or allege any pecuniary loss resulting from the actions of State
officers in relation to the implementation of the payroll lag act); see also
Hawai#i Tourism Authority, 100 Hawai#i at 250, 59 P.3d at 885 (“Petitioner must
establish its standing for this court to exercise jurisdiction over this
case.”). Moreover, although Taxpayers’ Opening Brief to this court asserts
that the lack of an equivalent tax exemption costs non-homestead real property
owners on Oahu an average of $1,717 per year, this assertion was not before
the tax appeal court on the respective motions for summary judgment. HRS
§ 641-2 (2009) (“Every appeal shall be taken on the record and no new evidence
shall be introduced in the supreme court.”). To the contrary, the
(continued...)
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Additionally, because the record does not establish
that Taxpayers have an interest in becoming homestead lessees, it
is not apparent that any change in the homestead lease
qualification would affect Taxpayers’ interests. Put another
way, there is no indication in the record that Taxpayers would
become homestead lessees if the native Hawaiian qualification
were abolished.
Accordingly, Taxpayers have not asserted an injury-in-
fact sufficient to confer standing to challenge the HHCA tax
exemption, or the HHCA, generally.33
B. This court need not address Taxpayers’ remaining claims
1. Taxpayers’ claims of breach of trust and fiduciary duty
In their Opening Brief, Taxpayers assert that (1)
“[t]he Newlands Resolution established the Ceded Lands Trust[;]”
(2) the trust revenue is required to “be used solely for the
benefit of the inhabitants of the Hawaiian Islands for
educational and other purposes;” and (3) in adopting and
32
(...continued)
declarations and exhibits offered in support of Taxpayers’ Memorandum in
Opposition to State’s Motion for Summary Judgment and their Counter-Motion for
Summary Judgment do not specify any pecuniary loss.
Because we conclude that Taxpayers do not have standing, we need
not address the remaining issues raised in the concurring opinion, i.e.,
whether Taxpayers were required to join the United States as a party, and
which level of scrutiny would apply to Taxpayers’ claims.
33
Although the State asserts that Taxpayers have standing to
challenge the tax exemption “in general -- i.e., to challenge the fact that
homesteaders receive the tax exemption, while non-homesteaders do not,” we
note that Taxpayers have not raised any such “general” challenge to the tax
exemption. To the contrary, Taxpayers challenge the tax exemption on only one
ground: that only native Hawaiians are eligible to receive it.
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implementing the HHCA, the State violates its fiduciary duties
under the trust that Taxpayers allege was created by the Newlands
Resolution.34
In response, the State asserts that Taxpayers’ claims
are not properly before this court and, alternatively, are
without merit. The State further asserts that (1) “[t]here is
serious question . . . whether a true trust was ‘created’ by [the
Newlands Resolution];” (2) assuming arguendo that a trust was
created, that trust was subsequently modified by the settlor
United States to mandate the homesteader tax exemption; (3) even
assuming the trust was not modified, there are “rational reasons
to allow homesteader inhabitants, and not other inhabitants who
are not homesteaders, the tax exemption;” (4) the Newlands
Resolution called for Congress to “enact special laws” for public
lands management and disposition, and the HHCA is such a law; and
(5) non-homesteaders benefit from the remaining ceded lands not
set aside for the HHCA homesteading program.
Taxpayers’ argument on this point is not clearly
articulated. Although Taxpayers provide some background
concerning the Newlands Resolution, Taxpayers do not provide any
34
In their Opening Brief, Taxpayers also appear to argue a new issue
concerning the Contracts Clause of the United States Constitution. However,
inasmuch as Taxpayers did not raise their Contracts Clause argument in the tax
appeal court, that argument may be deemed waived. See State v. Moses, 102
Hawai#i 449, 456, 77 P.3d 940, 947 (2003) (“As a general rule, if a party does
not raise an argument at trial, that argument will be deemed to have been
waived on appeal; this rule applies in both criminal and civil cases.”)
(citation omitted).
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specific argument as to how the adoption of the HHCA violated the
trust that Taxpayers allege was created by the Newlands
Resolution. Accordingly, this point of error may be deemed
waived. See HRAP Rule 28(b)(7) (“Points not argued may be deemed
waived.”). Moreover, Taxpayers’ claim before the tax appeal
court concerned the equal protection clause, and their amended
complaint cannot be fairly read to articulate any cause of action
based on breach of fiduciary duty or trust law.
HRS § 232-16 provides that “[a]n appeal to the tax
appeal court shall bring up for review all questions of fact and
all questions of law, including constitutional questions,
necessary to the determination of the objections raised by the
taxpayer or county in the notice of appeal.” (Emphasis added).
In the instant case, it does not appear that Taxpayers’ breach of
trust and fiduciary duty claims were necessary to the
determination of their objections concerning the tax exemption.
Put another way, a determination that the State had breached its
fiduciary duty by adopting the HHCA would have no bearing on the
constitutionality of the tax exemption. Accordingly, although it
does not appear that the tax appeal court adjudicated any breach
of trust and fiduciary duty claims, it would have lacked
jurisdiction to do so. See HRS § 232-16.
2. Taxpayers’ equal footing doctrine claims
Taxpayers assert that (1) “a new state can only be
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admitted on equal footing with all others;” and (2) “Congress
cannot condition a prospective new state’s admission on its
agreement to enter the Union on terms different than the original
states did.” Accordingly, Taxpayers argue, “a congressional
admission act could not put a new state on an unequal footing by
authorizing it to deny on account of race the right to receive
public benefits.” (Citation omitted). Taxpayers further argue
that “Congress cannot authorize a State to violate the [e]qual
[p]rotection [c]lause, nor can it immunize an unconstitutional
program from judicial scrutiny.”
In its Answering Brief, the State argues that
Taxpayers’ equal footing doctrine claim is not properly before
this court and, in any event, Taxpayers “do not have the right to
even assert the Equal Footing doctrine, as the ‘right’ asserted
belongs to the States . . . , not to Taxpayers.” The State
further argues that “[i]t surely cannot be a violation of the
Equal Footing Doctrine for the United States to give Hawaii title
to home lands subject to certain conditions when the United
States did not have to give Hawaii title to those lands at all.”
(Emphasis in original).
At the outset, it should be noted that Taxpayers’
points of error allege that “the United States . . . violated
. . . the Equal Footing Doctrine.” (Emphasis added). Insofar as
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Taxpayers’ equal footing doctrine claim appears to allege a claim
against the United States, and Taxpayers have not named the
United States as a party to this action, “[t]his court cannot
undertake to hear and determine questions affecting the interests
of these absent persons unless they are made parties and have had
an opportunity to come into court.” Filipino Fed’n of Am., Inc.
v. Cubico, 46 Haw. 353, 372, 380 P.2d 488, 498-99 (1963)
(citation omitted); cf. Kahala Royal Corp. v. Goodsill, Anderson,
Quinn & Stifel, 113 Hawai#i 251, 277, 151 P.3d 732, 758 (2007)
(“Generally, ‘[i]t is elementary that one is not bound by a
judgment in personam resulting from litigation in which he is not
designated as a party or to which he has not been made a party by
service of process.’”) (brackets in original) (citation omitted).
Moreover, as with their breach of trust and fiduciary
duty claims, Taxpayers’ amended complaint cannot be fairly read
to articulate any cause of action based on the equal footing
doctrine. In addition, it does not appear that Taxpayers’ equal
footing doctrine claim was necessary to the determination of
their objections concerning the tax exemption. Thus, a
determination that the State was admitted on unequal footing
would have no bearing on the constitutionality of the tax
exemption under the Fourteenth Amendment. Accordingly, although
it does not appear that the tax appeal court adjudicated any
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equal footing doctrine claims, it would have lacked jurisdiction
to do so. See HRS § 232-16.
IV. CONCLUSION
We hold that Taxpayers lack standing to bring their
equal protection challenges because they have not established
that they are interested in participating in the homestead lease
program. Accordingly, we vacate the tax appeal court’s August 7,
2009 judgment and remand with instructions to dismiss Taxpayers’
complaints for lack of jurisdiction.
/s/ Mark E. Recktenwald
H. William Burgess for
plaintiffs-appellants.
/s/ Paula A. Nakayama
Girard D. Lau, Deputy
/s/ James E. Duffy, Jr.
Attorney General, for
defendants/appellees.
/s/ Rhonda A. Nishimura
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Corboy v. Louie.
Combined Opinion