Thursday, January 1, 2009

Public Use Asserted in Condemnation May Meet Initial Judicial Muster but Courts Must Also Consider Pretext Defense

On Christmas Eve, the Hawaii Supreme Court (“HSCT”) issued an opinion in County of Hawaii v. C&J Coupe Family Limited Partnership, Haw. S. Ct. No. 28822, Dec. 24, 2008 involving a condemnation action related to the infamous Hokulia subdivision by 1250 Oceanside Partners.

Background

This case involves two condemnation actions related to the Hokulia project. The project is located on a 1550-acre parcel extending from the ocean toward the Mamalahoa Highway on the Island of Hawaii. See LUC Petition No. A06-769 1250 Oceanside Partners for a complete project description and maps.

C&J Coupe Family Limited Partnership’s (“Coupe Family”) property is contiguous to the southern border of Hokulia. In order to build the project, the property needed to be rezoned. The Hawaii County Council rezoned the land and as a condition of rezoning, Oceanside agreed to construct a Bypass so that the project could be accessed from Mamalahoa Highway.

The agreement between the County and Oceanside was that Oceanside was responsible for acquiring the property necessary for the Bypass and for the cost of constructing the Bypass, the County would use its eminent domain power in connection with the construction of the Bypass, and once built, the County would assume all responsibility and costs for operation, maintenance, repair, or reconstruction of the Bypass.

Condemnation 1: After negotiations for acquisition of a portion of the Coupe Family property failed, Oceanside sent a letter to the County requesting that it exercise its power of eminent domain on May 23, 2000. On July 26, 2000, the Council adopted a resolution finding it necessary for the County to initiate eminent domain proceedings against the Coupe Family land to acquire the right-of-way for the Bypass. Condemnation 1 sought only 2.9 acres of Appellant's property—the final subdivision approval indicated that 3.348 acres of Appellant's property would be needed for the Bypass. The ultimate result of Condemnation 1 was a court order which stated that "[t]he Condemnation is invalid. Judgment is hereby ordered to be entered in favor of [the Coupe Family] and against [the County] . . . ."

Condemnation 2: During the pendency of Condemnation 1, the County initiated procedures to condemn the Coupe Family’s property, on January 23, 2003. The Council adopted another resolution, this time for approximately 3.348 acres of the Coupe Family’s land and for the state purpose of providing “a regional benefit for the public purpose and use which will benefit the County.” Condemnation 2 was granted in favor of the County.

Questions on Appeal

On appeal, the Coupe Family brought the following questions:
  1. May [the County] forever avoid its obligation under [HRS] § 101-27 to pay damages for discontinued or failed takings by instituting serial condemnation actions?
  2. Is an eminent domain action abated—and the circuit court deprived of subject matter jurisdiction—when the court is already considering another, earlier-filed eminent domain action, instituted by the same plaintiff, in the same court, against the same defendants, for the same relief?
  3. Does a circuit court have any duty under the [United States] and Hawaii Constitutions to examine the record to determine whether the government's proffered public purpose supporting a taking is a pretext hiding a predominantly private benefit, or may it simply take the government's word?
Holdings.

First, the issue of whether the Coupe Family is entitled to statutory damages under HRS § 101-27 turns upon whether the property in question "was finally taken" under that statute. I previewed this issue in Should the Government Pay a Landowner for Its Failed Attempt to Condemn a Landowner's Property?  Under the statute, finally taken means that a condemnation is either "abandoned", "discontinued," or "the property concerned [was] not finally taken for public use[.]” Based on its reading of HRS § 101-27, the HSCT held that “the property concerned [was] not finally taken for public use" in Condemnation 1, because the circuit court ordered that the Condemnation was invalid. That the property was eventually condemned after the County prevailed in Condemnation 2 was of no import to the HSCT—the court looked at Condemnation 1 and Condemnation 2 as separate actions for purposes of HRS § 101-27. This question was remanded to the circuit court for a calculation of damages in Condemnation 1.

Second, abatement is "[t]he suspension or defeat of a pending action for a reason unrelated to the merits of the claim[.]" In this case, Condemnation 2 was started while Condemnation 1 was still being considered by the circuit court. The HSCT held that the Coupe Family’s contention that abatement necessarily implicates a court's subject matter jurisdiction over a case is not correct; rather, “abatement is a remedy for a variety of defects, including lack of subject matter jurisdiction.” After reviewing case law from several jurisdictions, the HSCT held that “the pendency of Condemnation 1 did not deprive the court of subject matter jurisdiction over Condemnation 2[.]”

Third, constitution (U.S. and Hawaii) requires that eminent domain powers can only be used for a “public use.” The Coupe Family argued that "that the asserted public use was a pretext . . . to hide the predominantly private benefit of the [Bypass] to Oceanside[.]" The HSCT noted that the Supreme Court's decision in Kelo v. City of New London, Conn., 545 U.S. 469 (2005) is consistent with prior state decisions which “allows courts to look behind an eminent domain plaintiff's asserted public purpose under certain circumstances.” Furthermore, HSCT cited Kelo for the premise that just because a public purpose may exist on its face, the government may not “condemn private property for the sole purpose of transferring title to a different private owner.” This would be a proper use of eminent domain powers on the pretext of improperly transferring private property for another’s private benefit. In this case, the HSCT held that on its face, the Bypass condemnation resolution asserted a public purpose; however, the circuit court must expressly consider the question of whether the County’s asserted public purpose underlying Condemnation 2 was pretextual.

1 comment:

Aaron Stene said...

Mahalo Jesse for breaking down this
significant HAWSCT ruling.