Unite Here! Local 5 v. City & County of Honolulu

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IN THE SUPREME COURT OF THE STATE OF HAWA

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1a

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civil No. 06-1-0265 §
UNITE HERE! LOCAL 5; ERIC W. GILL; TODD A.K. MARTIN,

ReSpondents/Plaintiffs-AppelleeS,

|O=E kid @~ Hci\l@i@l

VS.

CITY AND COUNTY OF HONOLULU, a municipal corporation;
KUILIMA RESoRT coMPANY, a Hawai‘i corporation,
Respondents/Defendants-Appellees,

KUILIMA RESORT COMPANY, a Hawafi general partnership,
Respondent/Counterclaim Plaintiff-Appellee,
vs.
UNITE HERE! LocAL 5 HAWAI‘,I, a Hawai‘i labor organization,-

ERIC W. GILL, an individual,
ReSpondentS/Counterclaim DefendantS-AppelleeS,

KUILIMA RESORT COMPANY, a HawaiH general partnership,
Respondent/Counterclaim Plaintiff-Appellee,
vs.

UNITE HERE!, a New York labor organization,
ReSpondent/Additional Counterclaim Defendant-Appellee.

, Civil No. 06-1-O867
KEEP THE NORTH SHORE COUNTRY, a HaWaFi non-profit corporation;
and SIERRA CLUB, HAWAfI CHAPTER, a foreign non-profit
corporation, PetitionerS/Plaintiffs-Appellants,

VS.

CITY AND COUNTY OF HONOLULU; HENRY ENG, Director of Department
of Planning and Permitting, in his official capacity;
KUILIMA RESORT COMPANY, a Haw@ifi general partnership,

Resp0ndentS/DefendantS-AppelleeS.

GB"!M

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NO. 28602

CERTIORARI TO THE INTERMEDIATE COURT OF APPEALS
(CIV. NOS. 06-1-O265 & 06-1-O867)

APRIL 8, 2010

MOON, C.J., NAKAYAMA, AND DUFFY, JJ., AND CIRCUIT
JUDGE CHAN, IN PLACE OF RECKTENWALD, J., RECUSED;
ACOBA, J., CONCURRING SEPARATELY

OPINION OF THE COURT BY MOON, C.J.

On October l3, 2009, this court accepted a timely
application for a writ of certiorari, filed by petitioners/
plaintiffs-appellants Keep the North Shore Country (KNSC) and
Sierra Club, HawaiH.Chapter (Sierra Club) [hereinafter,
collectively, plaintiffs] on September 8, 2009, requesting that
this court review the Intermediate Court of Appeals’ (ICA) June
l2, 2009 judgment on appeal, entered pursuant to its May 22, 2009
published opinion. Unite Here! v. CitV & CountV of Honolulu, 120
Hawai‘i_ 457, 209 P.3d 1271 (App. 2009). Therein, the~:cIcA
affirmed the Circuit Court of the First Circuit's1 June 4, 2007
amended final judgment in favor of respondents/defendants-
appellees Kuilima Resort (Kuilima), as well as the City and
County of Honolulu and Henry Eng, the director of the Department

of Planning and Permitting (DPP) [hereinafter, collectively, the

1 The Honorable Sabrina S. McKenna presided unless otherwise
indicated.

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County and, along with Kuilima, collectively, defendants]. Oral
argument was held on December 17, 2009.

Briefly stated, this case arises from the proposed
expansion of the Kuilima Resort at Turtle Bay on the North Shore
of dahu for which an environmental impact statement (EIS) was
completed, pursuant to the HawaFi Environmental Policy Act
(HEPA) (codified as Hawafi Revised Statutes (HRS) chapter 343),
discussed ;aj;a, and accepted in 1985 by the Department of Land
Utilization (DLU) [hereinafter, the 1985 EIS]. The dispute
centers around whether Kuilima’s subdivision application, filed
in 2005, triggered the need for a supplemental EIS (SEIS),
pursuant to the administrative rules underlying HEPA,
specifically, Hawafi Administrative Regulations (HAR)

§§ 11-200-26 and 11-200-27 (governing SEISs), quoted ;aj;a at
n.l2 & 13. The circuit court, in granting summary judgment in

favor of the defendants, ruled that a SEIS was not required, and

' the plaintiffs appealed.

On appeal, a majority of the ICA agreed with the
circuit court, ho1ding;";g;a; a;;a; that, pursuant to the plain
language of HAR §§ 11-200-26 and 11-200-27, a SEIS was required
only where there was a substantial change in the “action,” aaa_

HAR § 11-200-26, quoted infra, and that, inasmuch as the

defendants were not substantially changing the proposed expansion

fitself, no SEIS was required. Unite Here!, 120 Hawaij.at 465-

67, 209 P.3d at 1279~81. Then-Associate Judge Nakamura

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dissented, asserting that, in his view, the relevant rules
required the completion of a SEIS “when significant changes to
the anticipated environmental impacts of a proposed action become
apparent such that ‘an essentially different action' is being
proposed.” laa at 468, 209 P.3d at 1282 (Nakamura, J.,
dissenting).

On application, the plaintiffs urge this court to adopt
Judge Nakamura’s view that HEPA mandates the completion of a SEIS
where there has been a change in circumstances or increased
environmental impacts and that, therefore, the DPP (the accepting
agency for Kuilima’s subdivision application) should have
required Kuilima to do so.

Based on the discussion below, we hold that the ICA's
majority erred in its interpretation of the relevant HARs and,
consequently, incorrectly affirmed the circuit court's grant of
summary judgment in favor of the defendants. Accordingly, we
vacate the ICA’s June 12, 2009 judgment on appeal, the circuit

court's June 4, 2007 amended final judgment in favor of the

defendants, and remand this case to the circuit court with

instructions to enter judgment in favor of the plaintiffs.
l. BACEU3RfHHHD
A. Background Information

As aptly summarized by the ICA:

In the 1980[]s, Kuilima's predecessor in interest,
Kuilima Development Company (KDC), owned a resort on the
N0rth Shore of the [i]sland of O%hu. The resort consisted

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of a 487-room hotel and an 18-hole golf course. KDC
proposed the Kuilima Resort Expansion ([p]roject), which
would involve expansion of the existing hotel and new
construction of three hotels for total of 1,450+ new units;
renovation of the existing 18-hole golf course; and new
construction of 2,060+ condominium units, a 70,000+ sq. ft.
commercial complex, an 18-hole golf course and clubhouse, a
tennis center, and an equestrian center. The [p]roject also
called for infrastructure and public improvements, including
a new wastewater treatment plant, a production water well, a
standby well, a new reservoir, new water distribution lines,
improvements to the portion of Kamehameha Highway fronting
the resort, two private and two public beach parks, a
wildlife preserve that included virtually all of Punahoolapa
Marsh, and public rights-of-way to the shoreline.

Unite Here!, 120 Hawafi at 459, 209 P.3d at 1273.
1. 1985 EIS

On August 5, 1985 and in accordance with HEPA, a Draft
EIS was prepared and filed with the Office of Environmental
Quality Control (OEQC) and, thereafter, published in the OEQC
bulletin on August 8, 1985. Public comment contributed to the
preparation of a revised E1S, which was submitted to the DLU on
October 7, 1985. The revised EIS was accepted on October 30,
1985 [hereinafter, the EIS or 1985 EIS].

According to the ElS, the proposed project was to be
developed in three phases: (1) phase 1 starting in 1986;
(2l phase II in 1988-89; and t3) phase III between 1993 and 1996.
The 1985 EIS also indicated that, “[a]t full development, the
expanded facilities of the resort would introduce a new visitor
population averaging about 4,783 persons on any given day.” With
regard to evaluation of the environmental setting of the project

area and the probable impact of the proposed project on the

environment, the 1985 EIS looked to topography and drainage,

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soils, water resources and usage, tsunami/flood hazards, coastal
water quality, vegetation, sand dunes, threatened or endangered
endemic species of birds, Punahdolapa marsh, historical and
archaelogical resources, agriculture, and air quality, as well as
traffic and road conditions.

In its analysis of the coastal waters, specifically
Kawela Bay, which borders the project, the 1985 EIS referenced
the potential impact of “desilting” on green sea turtles, a
“threatened” species under the federal Endangered Species Act
(ESA). More specifically, it noted that “the desilting operation
would be located across the area where the abundant growths of
algae that are known to be important diet items of [green sea
turtles] are found.” There was no reference to any anticipated
impact upon the Hawaiian monk seal, an “endangered” species under
the ESA.

The EIS also analyzed the “adverse and unavoidable
impacts” of the project’s development, These identified impacts
included drainage, traffic, dust generation, water consumption,
marsh drainage input, loss of agricultural uses, construction
noise, air quality¢ and solid waste disposal.

In addressing the adverse and unavoidable traffic
impacts of the project, the 1985 EIS relied upon a traffic study
that examined the traffic conditions caused by an increase in

visitors to the North Shore region on Oehu (between Haleiwa and

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PunaluHi), with projections through the year 2000. Specifically,

the 1985 EIS recognized that:

[a]ccess to the project site is via Kamehameha Highway,
Kamehameha Highway is the only arterial highway serving the
N0rth Shore and Windward Uahu. It is a two-lane, two-way,
undivided State highway generally following the coastline,
except for the Kahuku area where it turns inland. The
roadway width of Kamehameha Highway varies between 20 and 24
feet, with generally unpaved shoulders. The highway varies
from flat straightaways with few driveway connections to a
curvilinear alignment with many driveway connections.
Between Kahuku and Haleiwa, there are no provisions for
left-turn lanes or bus turnouts (except at Waimea Bay).

In most of the communities between Haleiwa and PunabIu, the
great majority of residents live within a few blocks of
Kamehameha Highway. The highway is each community's link
with the rest of Uahu and a sense of increasing congestion
is a major source of concern of area residents. Field
investigations of traffic conditions on weekends and
holidays show that traffic congestion occurs because of
“bottleneck” locations rather than a breakdown of the
overall highway facility. This indicates that the highway's
capacity restraint is not the number of lanes on the roadway
but rather highway geometrics and increased roadside
activity.

Haleiwa and Waimea Bay are the primary capacity restraints
along the North Shore. The narrow Anahulu Bridge located
near Haleiwa Beach Park requires opposing stream of vehicles
to slow down. Through Haleiwa, left-turn traffic and
motorists pulling off to park on the roadside queue traffic
in both directions. Similarly, at Waimea Bay, motorists
parking on the roadside and turning left into Waimea Beach
Park or into Waimea valley Road queue traffic in both
directions. The curvilinear highway alignment along Waimea
Bay causes a further slowdown. Finally, the vehicles parked
on the roadside impose additional restraints on capacity and
operating speeds. Similar frictional effects occur at other
beach parks such as at Pupukea, Sunset, HauW1la and Swanzy
Beach Parks when large gatherings occur (a surf meet or a
community picnic). Furthermore, periodic slowdowns occur
behind [city] buses stopping in the highway to pick up or
drop off passengers.

On the Windward side, between Kuilima to Laie, there are no
restraints on capacity other than the highway itself.

The 1985 EIS reported that, “[o]n the regional level,
previous studies have recognized the highway alignment problems
at Waimea Bay and the need for upgrade of the existing Kamehameha

Highway.” (Emphasis added.) Relying on a 1985 traffic study

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analyzing the existing regional traffic impacts in the Kahuku,
Kawailoa, and Hadula areas, the 1985 EIS projected -- to the
year 2000 -- the traffic impacts to the aforementioned areas

(1) without the resort expansion and (2) wiga the resort
expansion. In comparing the “with” and “without” resort
expansion impacts, the 1985 EIS indicates that the construction
of the resort expansion would increase traffic impacts by an
average of 37.4% in Kahuku, 14.3% in Kawailoa, and 6.4% in
Hadula.

The EIS observed that, in order to mitigate the impact
of entry into the project from -- and exiting the project onto --
Kamehameha Highway, at full development, the traffic study
recommended: (1) the construction of a left-turn lane on
Kamehameha Highway at the existing Kuilima Drive (the main access
road to the resort); (2) the construction of fully channelized
intersections on Kamehameha Highway with turning lanes at the
proposed West Kuilima Drive (also known as the project’s “Alpha
Road”) and at the existing Kahuku Airport Road; (3) the
installation of traffic signals on Kamehameha Highway where it
intersects with Kuilima Drive, Kahuku Airport Road, and the
proposed West Kuilima Drive; and (4) minimization of visitors’
use of automobiles by instituting, for example, an airport
shuttle service. Despite the suggested improvements, the EIS --
quoting the traffic study -- also observed that,_“[w]hile the

increased traffic generated by the proposed resort expansion is

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significant when compared to the projected background conditions,

it is not beyond the carrying capacity of an upgraded, high

quality two-lane arterial.”

2.

Initia1 Approva1s and De1ays in the Project's
Deve1opment

As observed by the ICA:

The [1985] EIS listed additional governmental
approvals KDC needed to obtain in order to complete
development of the [p]roject, including rezoning approval
from the DLU, grading and building permits, a shoreline
certification, a Special Management Area Use Permit [(SMP)],
and subdivision approval.

On March 27, 1986, the Land Use Commission approved
the reclassification of 236 acres of the property from
[a]griculture to [u]rban [d]istrict for resort and
golf course uses.

On May 23, 1986, the DLU accepted KDC's application
for a [SMP] and [s]horeline [s]etback [v]ariance. KDC
sought to expand its resort by developing a master~planned
resort community that would include hotels, dwellings,
commercial areas, golf courses, parks, roadways; to replace
two drainage culverts with open channels; and to conduct a
desilting operation at Kawela Bay, `

On June 25, 1986, a bill for an ordinance to rezone
certain portions of the property to be developed under the
[p]roject was introduced before the [City Council]. The
bill incorporated the Unilateral Agreement and Declaration
for Conditional Zoning ([u]nilateral [a]greement), in which
KDC agreed that the zoning change would be subject to
conditions requiring, among other things, construction of a
wastewater treatment plant, construction of
low-to-moderate-income housing, improvements and
modifications to roadways, the implementation of a shuttle
service, and the establishment of a child care center,
parks, public easements to and along the shoreline, and
public parking. Like the [1985] EIS, the [u]nilateral
[a]greement anticipated development to proceed in three
phases, the last phase to be completed before 2000. The
[u]nilateral [a]greement noted that development may deviate
from the phased development schedule “due to the occurrence
of changed economic conditions, lawsuits, strikes or other
unforeseen circumstances.”

The City Council passed the rezoning bill on August
14, 1986 and approved KDC's application for the [SMP] and
[s]horeline [s]etback [v]ariance by resolution adopted on
October 1, 1986 (the March 27, 1986; August 14, 1986; and
October 1, 1986 approvals are collectively referred to as
the [p]roject [e]ntitlements).

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Over the next twenty years, only certain aspects of
the [p]roject were completed, KDC constructed a wastewater
treatment plant and water main between January 1989 and
March 1990, the Opana Wells between February 1989 and March
199l, and the Palmer Golf Course between March 1989 and
March 1991. Construction of improvements to Punahoolapa
Marsh began in approximately March 1990. From 1990 through
1991, KDC obtained subdivision approvals for various parcels
to be used for parks, roads, hotels, a golf course, and a
golf clubhouse.

In March 1999, Kuilima purchased the property
underlying the [p]roject from KDC[,] and KDC assigned its
interest in the [p]roject to Kuilima.

In May 1999, the DPP drafted the Kdolau Loa
Sustainable Communities Plan “to help guide public policy,
investment, and decision-making through the 2020 planning
horizon” in order to maintain and enhance “the region's
ability to sustain its unique character, current population,
growing [sic], families, lifestyle, and economic
livelihood.” The plan recognized and supported the
[p]roject. The City Council adopted the plan on December
16, l999.

Kuilima renovated the existing Fazio Golf Course
between 2000 and 2002. In 2003, Kuilima obtained approval
to renovate and expand existing portions of the Turtle Bay
Resort. Between 2003 and 2005, Kuilima invested about $100
million in completing these renovations, which included the
addition of nine resort condominium units.

As of November 2005, construction on the major

components of the [p]roject, including the hotel rooms and
the [remaining] condominium units, had not begun.

120 HawaiH.at 460-61, 209 P.3d at 1274-75 (emphasis added).
3. 0ther Re1evant Post-1985 EIS Traffic studies
After 1985, Kuilima solicited two additional traffic
impact analysis reports -- in 1991 and 2005.2 Because the 1985
EIS considered projected traffic impacts through the year 2000,

the 2005 updated traffic impact analysis [hereinafter, the 2005

2 The record also contains references to a Department of Transportation,
Highway Planning Branch's traffic counts taken on Kamehameha Highway in front
of the resort, dated August 2000 (2000 DOT traffic count), and a Laniakea
Beach Park Traffic lmpact Analysis Report, dated 2005 (2005 Laniakea traffic
report).

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report] and three addendums thereto, prepared in 2006, are
particularly relevant.

The 2005 traffic report focused on local traffic
impacts, that is, impacts on the roadway fronting the property,
including the internal roadways of the resort itself. Generally,
the 2005 traffic report indicated that, even with the
construction of certain traffic improvements (many of which
overlap with the yet incomplete improvements suggested by the
1985 EIS), the expansion project, when completed, Wgala result in
increased local traffic impacts.

lAs previously stated, the 2005 report was updated three
times in 2006, focusing again on only local traffic impacts.
Addendum No. l, dated February 15, 2006, evaluated the initial
design of the intersection of Kamehameha Highway and the
project’s Alpha Road (also known as the proposed west Kuilima
Drive), including turning lanes and the recommended improvements
to facilitate the traffic needs of that immediate area, projected

out through 2008. The addendum concluded that,

[a]s Turtle Bay Resort continues to expand beyond the Year
2008, the peak hour traffic operations at the intersection
of Kamehameha Highway and Alpha Road are expected to
deteriorate below satisfactory levels of service [(LOS)].
Additional improvements at the study intersection, such as
traffic signalization and lane modifications, may be
required to mitigate the traffic impacts resulting from
further development of the Turtle Bay Resort.

(Emphasis added.)

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Addendum No. 2, dated February 23, 2006, evaluated the
design of two-lane Alpha Road to determine when it should be

widened to a four-lane roadway. lt concluded that

Alpha Road will be constructed as a private roadway and is
expected to remain so in the foreseeable future. Traffic
operations of the two-lane section of Alpha Road at peak
hour volumes over 800 [vehicles per hour] would result in a
[below satisfactory LOS]. In general, intersection
operations are more critical than the operation of a
continuous two-lane roadway. The proposed 108-foot right of
way will provide adequate width as to construct turning
lanes on the initial two-lane divided roadway at internal
resort intersections, as needed. widening sections of Alpha
Road . . . would maintain [satisfactory] conditions or
better as major [l]ots in the Turtle Bay Resort are
developed. The remaining two-lane section of Alpha

Road . . § is expected to operate at a satisfactory [LOS] at
full build out and occupancy of the Turtle Bay Resort Master
Plan.

Addendum No. 3, dated August 25, 2006, analyzed the
second phase of improvements on Kamehameha Highway, including
traffic signalization at the Kamehameha Highway/Alpha Road
intersection, improvements at the intersection of Kamehameha
Highway and Kuilima Drive, and traffic signalization of the
Kamehameha Highway/Kuilima Drive intersection, projected through

2011. ,The addendum concluded that

[t]he Kamehameha Highway intersections at Alpha Road and
Kuilima Drive are expected to require traffic signalization
to accommodate the anticipated expansion of Turtle Bay
Resort up to the Year 2011, when a total of 1,970 hotel
rooms will be constructed. Lane modification at the study
intersections, the extension of Alpha Road from Kuilima
Drive to Marconi Road, and the improvement of Marconi Road
and its intersection with Kamehameha Highway will be
required to mitigate the traffic impacts resulting from the
full-build out and occupancy of Turtle Bay Resort Master
Plan[.]

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The 2005 Subdivision App1ication

As the ICA further summarized:

On November 8, 2005, Kuilima submitted a Site
Development Division Master Application Form ([s]ubdivision
[a]pplication) to the DPP, seeking subdivision approval for
approximately 744 acres of its 808-acre property.

In response to the [s]ubdivision [a]pplication¢ the
DPP received two letters in January 2006, asking that the
DPP require the preparation of a [SEIS] before approving the
[s]ubdivision [a]pplication. In a January 5, 2006 letter,1
Eric Gill, the treasurer of UNITE HERE! Local 5, asserted
that a[] SEIS was required because twenty years had passed
since the [1985] EIS and changes had occurred in the
“traffic, water availability, hotel and housing needs,
endangered species habitat needs, and the like.” ~North
Shore resident Ben Shafer submitted a January 6, 2006
letter, stating that “[m]uch had changed since the approval
of the [1985] EIS some twenty years ago” and a[] SEIS needed
to be prepared to allow for some community input and to
address new concerns regarding “[t]ransportation, sewage,
housing, water, cultural [issues], [and] the Master Plan for
the Koplauloa region.”

The DPP responded to the Shafer and Gill letters
that[,] because no specific time limit had been imposed on
the [p]roject at the time of the [p]roject's initial
approval, the DPP felt it could not require a[] SEIS to
address changes in the conditions surrounding the [p]roject
caused by the passage of time. Although DPP planner James
Peirson (Peirson) drafted the January 19, 2006 reply letter
to Shafer, the letter was signed by Eng. The DPP’s letter
to Shafer stated:

No time frame for development was either implied
or imposed by the City Council as part of its
approval. Accordingly, the developer is
entitled to proceed with the project as
approved. By not imposing any time limits at
the time, the City Council indicated that the
project could be developed at its own pace.
_Further, as a matter of law, the [County] cannot
retroactively impose time limits or unilaterally
rescind an entitlement like an approved
discretionary permit.

The DPP’s reply letter to Gill, dated January 31,
2006, was prepared by DPP planner Mario Siu-Li (Siu-Li) and
signed by Eng. The letter explained that a[] SEIS was not
required because[,] as long as Kuilima was following the
appropriate subdivision rules and regulations, the [CountyJ
was obligated to continue to process the [s]ubdivision
[a]pplication. The DPP provided Gill a copy of its letter
to Shafer.

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[DPP Planner] Peirson explained . . . that[,] when
determining whether to require a[] SEIS, DPP looked to see
if there had been any substantive changes to a project.
[Planner] Siu-Li similarly stated that the reason why the
DPP did not require a[] SE1S for the [p]roject was because
“the [s]ubdivision [a]pplication was not changing the
existing condition of the properties.”

On March 8, 2006, the [Environmental Council] heard
testimony from members of the North Shore community
regarding the SEIS issue. On March 22, 2006, the
Environmental Council wrote to the DPP requesting
clarification as to why the [p]roject did not require a[]
SEIS considering “the changes in timing since 1985,
especially with respect to cumulative impacts and mitigative
measures articulated in the original accepted T1985 EIS].”
In an April 4, 2006 letter, the Department of Corporation
Counsel for [the County] responded that the DPP would not
comment on the Environmental Council's concerns because the
issue of requiring a[] SEIS had become the subject of
litigation.

The Environmental Council sent a follow-up letter to
the DPP dated June 14, 2006, expressing the [C]ouncil’s
concern that the DPP was placing the burden on others to
prove a[] SEIS was required instead of making its own
independent determination:

The Council is concerned that DPP has not made
an independent determination of whether a[] SEIS
is required. Rather, it appears as though DPP
believes that it should not require a[] SEIS
unless some third party proves to DPP that it is
required. This does not appear to be correct.

The Environmental Council also stated that[,] based on the

-information available to it regarding changing environmental

conditions in the [p]roject over the last twenty years and
changes in the [p]roject's timing and scope, it believed the
DPP should require Kuilima to prepare a[] SEIS for the
[p]roject,

As part of its subdivision review process, the DPP
circulated Kuilima’s [s]ubdivision [a]pplication to various
interested departments and agencies of [the County] and the
State of HawaFi for review, comment, and approval. The
State of Hawafi Department of Transportation (DOT) was
among the departments and agencies that reviewed the
[s]ubdivision [a]pplication. The DOT accepted Kuilima's
[r]oadway [i]mprovements [i]mplementation and [p]hasing
[p]lan after Kuilima agreed to revise its [t]raffic [i]mpact
[a]nalysis report to address the DOT's concerns.~ On
September 29, 2006, without requiring a[] SEIS, the DPP
tentatively approved the [s]ubdivision [a]pplication.

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Unite Here!, 120 HawaFi at 461-62, 209 P.3d at 1275-76
(underscored emphasis in original) (original ellipses omitted)
(some brackets in original).

B. Circuit Court Proceedings

Two civil lawsuits were originally filed in connection

with DPP's decision not to require a SEIS for the project:

(1) Civ. No.‘06-l-0265, filed on February l5, 2006, by Unite
Here!, a labor organization representing 350 Kuilima employees,
against Kuilima and the County, seeking to require Kuilima to
prepare a SEIS and to enjoin DPP from processing approvals and
permits for the project; and (2) Civ. No. 06-1-0867, filed on May
19, 2006 and amended on June 7, 2006, by KNSC, a HawaFi non-
profit corporation comprised of North Shore residents and/or
property owners, and the Hawafi branch of Sierra Club, a
California non-profit organization, seeking declaratory and
injunctive relief. Eventually, both actions were consolidated on
July l7, 2006.

On August 10, 2006, the parties stipulated to dismiss

with prejudice all claims and all parties in Civ. No. 06-1-0265
(the original suit brought by Unite Here!), pursuant to HawaiU_
Rules of Civil Procedure (HRCP) Rule 4l(a)(1)(B) (2006). Thus,

the only remaining claims and parties are those brought under

Civ. No. 06-1-0867, KNSC, et al. v. City & County of Honolulu, et

al. [hereinafter, the KNSC/Sierra Club action or the instant
action].

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ln the KNSC/Sierra Club action, the plaintiffs sought
(1) an injunction requiring Kuilima to prepare a SElS pursuant to
HAR §§ 11-200-26 and ll-200-27 and (2) to enjoin construction
relating to the project until the SElS was completed. Relying on
the description in the 1985 ElS with respect to the timing of the
project,3 the plaintiffs essentially argued that “the [p]roject
has changed ‘substantively in timing, among other things,’” and
that this “change in timing has had a significant effect” such
that a SElS is warranted. On June 16, and June 19, 2006, Kuilima
and the County, respectively, filed an answer to the plaintiffs'
complaint, generally denying the plaintiffs' allegations. a

On October 1l, 2006} Kuilima filed a motion for
judgment on the pleadings and three motions for summary judgment.
The County joined in Kuilima‘s motions, except for Kuilima's
second motion for summary judgment.4 §aa Unite Here!, 120

Hawafi at 462, 209 P.3d at 1276. Additionally, in response to

3 As observed by the lCA, “the [p]roject was to be developed in three
phases, with phase l starting in 1986, phase ll starting between 1988 and
l989, and phase lll starting between 1993 and 1996[,]” Unite Here!, 120
Hawai°i at 460, 209 P.3d at 1274, and that “the last phase [was] to be
completed before 2000.” lap

4 Each joinder noted that the County “[did] not join in . . . the facts
contained in said . . . [m]otion[s] . . . [to the extent that such facts]
constitute legal conclusion(s), argument or otherwise attempt to characterize
the actions taken by the [County] with regard to the issuance of land use
approvals/permits.”

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the defendants' third motion for summary judgment, the plaintiffs
filed a cross-motion for summary judgment.5
ln their motion for judgment on the pleadings, the

defendants argued, inter alia, that HAR § 11-200-26, et. seg.

exceed[s] the statutory authority of HEPA and/or that
requiring Kuilima to prepare a[] SElS for the Turtle Bay
expansion project would violate the plain and express
language of HRS § 343-5(g) [(Supp. 2005)], which mandates in
unequivocal terms that “[a] statement that fs accepted with
respect to a particular action shall satisfy the
requirements of this chapter and no other statement for that
proposed action shall be required[.]”

ln their first motion for summary judgment, the defendants argued
that the lawsuit was barred by the statute of limitation set
forth in HRS § 343-7 (1993), quoted ;af;a. ln the second motion,
Kuilima argued that it was entitled to summary judgment on the
entirety of the plaintiffs' complaint because the subdivision
application was “(1) exempt from the environmental review
process[] and (2) non-discretionary in nature and[, thus, could]
not trigger a SElS.” Finally, the defendants argued in their
third motion for summary judgment that they were entitled to
summary judgment as a matter of law because, based on the

undisputed facts before the circuit court:

1. [The p]laintiffs have no evidence to show a
“substantive change” in the [p]roject as required by
HAR §§ 11-200-26 and 11-200-27;

2. [The p]laintiffs have no evidence to show “significant
effects” on the environment likely “resulting from”
their alleged change in the [p]roject (timing) asp
required by HAR §§ 11-200-26 and 11-200-27;

5 The circuit court focused only upon the third motion and cross-motion
for summary judgment and, as reported infra, ruled that the remaining motions
were rendered moot by its grant of summary judgment in favor of the
defendants.

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3. _[The p]laintiffs have no evidence to show that any of
the alleged environmental impacts of the [p]roject
that they allege resulted from a change in timing of
the [p]roject were not originally disclosed or
previously dealt with, as required by HAR §§ 11-200-26
and ll-200-27; and

4. Applying the “rule of reason” to DPP's decision, and

` considering the agency’s extensive record regarding
the planning and permitting process for the region in
general, and for this [p]roject in particular, the
DPP's decision not to require a[] SElS for the
[p]roject cannot be deemed either arbitrary or
capricious.

The plaintiffs argued in their cross-motion for summary
judgment that: (l) enforceable HEPA rules required a SElS either

when there are substantive project changes or new circumstances

and evidence (emphases added); (2) the substantive change in the

timing of the project caused, and new circumstances and evidence
brought to light, increased environmental impacts to traffic and
species not previously dealt with in the 1985 ElS; (3) Kuilima's
subdivision application triggered HEPA’s supplemental review; and
(4) DPP did not take a hard look at the new circumstances and
evidence and, thus, violated HEPA when it decided that Kuilima
was not required to prepare a SElS. with respect to timing, the
plaintiffs specifically argued that “the passage of time,
especially when it is more than twenty years, is relevant and
must be considered in light of the very low threshold for
requiring a[] SElS under Hawafi law.” On November 3, 2006, the
defendants each filed a memorandum in opposition to the

plaintiffs' cross-motion for summary judgment.

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1. Defendants' Evidence in Support of Third Motion
ln support of the third motion for summary judgment,
the defendants, pursuant to HRCP 56(e) (2006),6 attached parts of
the 1985 ElS and the KDC unilateral agreement. with respect to
the 1985 ElS, the defendants pointed to the following specific

language contained therein, which stated:

D. PHASING AND TIMING OF THE ACTION

Figure 9 shows the approximate phasing of development
for the resort (phasing is dependent on receiving the
necessary governmental approvals). Note that Phase l
designation generally indicates a 1986 start of construction
date, Phase ll, commencement between 1988 to l989, and Phase
lll, [c]ommencement between 1993 to 1996.

with respect to the unilateral agreement, the defendants pointed

to a provision therein, which stated in relevant part:

3. Development of the project shall generally be based on
the submitted schedule [(which is the same as the one
referenced in the 1985 ElS.] Development may deviate from
this schedule due to the occurrence of changed economic
conditions, lawsuits, strikes or other unforseen [sic]
circumstances.

5 HRCP 56(e) states, in relevant part, that:

Supporting and opposing affidavits shall be made on
personal knowledge, shall set forth such facts as would be
admissible in evidence, and shall show affirmatively that
the affiant is competent to testify to the matters stated
therein, Sworn or certified copies of all papers or parts
thereof referred to in an affidavit shall be attached
thereto or served therewith. The court may permit
affidavits to be supplemented or opposed by depositions,
answers to interrogatories, or further affidavits. when a
motion for summary judgment is made and supported as
provided in this rule, an adverse party may not rest upon
the mere allegations or denials of the adverse party’s

`pleading, but the adverse party’s response, by affidavits or
as otherwise provided in this rule, must set forth/specific
facts showing that there is a genuine issue for trial. lf
the adverse party does not so respond, summary judgment, if
appropriate, shall be entered against the adverse party.

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2. P1aintiffs' Evidence in Support of Cross-Motion

The following relevant evidence was submitted by the
plaintiffs in support of their cross-motion for summary judgment,
pursuant to HRCP 56(e):

a. the 1985 ElS

Relying on the same provision from the 1985 ElS cited
by the defendants, _'J____.__e_a, "D. PHASING AND TIMING OF THE ACTION, "
quoted above, the plaintiffs argued that the timing condition was
inherent within the 1985 ElS itself. Additionally, the
plaintiffs maintained that the entirety of the 1985 ElS was based
on evidence available in 1985 -- over twenty years ago.

b. DPP's SElS procedures

Regarding DPP's SElS procedures, the plaintiffs
submitted the depositions of (l) Arthur Challacombe, “the person
designated by the [County] as the most knowledgeable on the
obligations of the County[‘s] DPP to enforce the State of
[Hawaii's] environmental rules and regulations,” (2) Mario Siu-
Li, DPP's senior planner, and (3) James Peirson, another DPP
planner. with respect to how DPP obtains its evidence to aid in
determining whether to require a SElS, Challacombe stated that,
“if there's evidence submitted to [DPP;] we will review the
evidence, lf . . . we have no evidence, then we have nothing to

base a determination on.” Challacombe noted that there

must be some sort of development trigger, ;aaa, “if . . . the
condition of the SMP called for X . . . units and the building

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"r

permit application doubles that, . ._. that would cause concern
and give us evidence that we need to look at further.” He
further emphasized that, “if everything’s the same, if nothing’s
changed, then we have no evidence and no need to require or ask
for a [SElS].” Siu-Li similarly testified that “normally the
inquiry [DPP] make{s]” is whether “the project conforms to the
approved permit.” According to Peirson, who drafted the response
letter on behalf of Eng to Shafer, one of the concerned citizens

requesting a SElS:

[E]very time a permit comes in, it isn’t a standard question
that needs to be asked, hmm, does a [SElS] have to be done.
we will examine the impacts associated with the

request, determine what agencies that have expertise in --
certain matters need to review it to let us know whether
there's issues that we need to be concerned about that might
have changed or things that might be necessary or impacts
that need to be mitigated.

And when we get that kind of feedback, then we have an
opportunity to . . . take action, for instance, such as
requiring a [SElS] or requiring additional studies or
reports and things like that.

with regard to the DPP's process to determine whether

to require supplemental review, Challacombe testified:

Q. [By the plaintiffs' counsel] [w]ould[] you look at
the cumulative to see what's . . . been built around the
subdivision to determine the cumulative impacts of something
before you grant the subdivision application?

A. [By Challacombe] l would look at the cumulative
impact of the project on the community, not the other way
around.

Q. Okay, but in doing that, you'd have to know what
the community is at the time, right, you're looking at?

A. That’s correct.

Q. And . . . the DPP wouldn't have done that unless
somebody came to them with evidence that the community has
changed in some way since the original [permit or
application] was granted . . . ?

A. l wouldn't do it. . . . lf the project doesn’t
chanqe, if the project is the same that was what was
approved, then there is no evidence of cumulative impact.

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Q. ln your experience, have there been other projects
where the SMP and unilateral agreement had been approved,
but the project wasn't initiated for another 20 years[.]

l'm just trying to find out if there's any limits on this --
. l understand this is your opinion, that time is
irrelevant.

A. Timing is one of the components in . . . the
review. lt is important. `lt is not the sole criterion.

Q. And is it your understanding, though, that then 20
years just by itself is not sufficient to trigger some
thought, gee, maybe things have changed a little bit and we
ought to come investigate?

A. lf the project hasn’t changed, then the project
hasn’t changed so there are no new impacts.

Q. Unless the surrounding community has changed,
right? There might be if the surrounding community has
changed, no?

A. lf the surrounding community's changed, we would
consider that, but we . . . would need the evidence.

Q. And you would wait for somebody to present
evidence to you, rather than go out and look and see if the
surrounding community has changed?

A. ln terms of the building permit, again, we would
compare. we would take that into account. Again, l go back
to the traffic study. we, l am sure, are going to require
an updated traffic study at the time of building bermit

application for the Kuilima development,
A twenty year old traffic study is not sufficient, because

as you pointed out, there may be factors in the community
that have changed, i.e., traffic.

(Emphases added.)

with respect to the review process in the instant case,
Siu-Li indicated that, in drafting his response to Gill, the
other concerned citizen and an officer of Unite Here!, requesting
a SElS, his initial assumption was that no SElS would be
necessary, and, as a result, he relied on the past determination
of a SMP and his colleague's (Peirson's) response letter to
Shafer. He further indicated that he did not go back and review
the 1985 ElS and, thus, was not fully apprised of its contents
nor did he review the original SMP. Addressing the changes that
have occurred over the twenty years since the 1985 ElS, Siu-Li

testified:

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(Emphases

timing of

(Emphases

Q. [By the plaintiffs' counsel] Did you have a

question in your mind . before you drafted that letter
[to Gill], whether or not the delay of almost 20 years might
have a significant impact on the environment or surrounding
community?
A. [By Siu-Li] No, l didn't. But like l said, we had
some discussions before drafting the letter, and ppg
consensus was that the passing of the time by itself alone
would not necessarily trigger a [SElSl.

Q. {B]efore your letter of January, are you aware of
any consideration given by DPP as to whether or not the
surrounding community had changed in the 20-year period?

A. well, you know, everything has changed in 20
years, l mean, that's without even saying. You know,
whether the project itself has changed, that's something
that has not been shown to us.

added.) Peirson also testified with respect to the

the project as follows:

Q. [By the plaintiffs' counsel] wasn't there a
projected phasing [indicated in the 1985 ElS] to be finished
with the project by 1996?

A. [By Peirson] There was, l think, one sentence in
the ElS that had a proposed phasing, followed by a footnote
or a second sentence that qualified that phasing.

But what l would explain to you, as a matter of
reading what the entitlement is, there's a difference
between what an applicant proposes and what the council
disposes in terms of an authority. .

lf they don't adopt\the phasing as a condition of the
approval, it doesn’t matter what might have been proposed.
There was no phasing required as a condition of its
approval; and therefore, the passage of time itself could
not constitute a substantive change to the project.

Q. Could not, you said?

A. Not under the authority granted by that particular
permit. _ g
Q. And you don't believe that it could ever require
another review under Chaoter 343?

A. Are you asking simply because of the passage in
time?

Q. Let's start there.

A. Ng.

Y€S .

added.)

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c. evidence of “significant changes”
i. traffic studies

The plaintiffs enlisted the services of Tom Brohard, a
professional engineer, and submitted his declaration, as well as
his October 2006 review of traffic studies for the Turtle Bay
resort expansion project on the North Shore of