The Plaintiffs are owner-occupants of a residence on Papailoa Road. Papailoa Road runs parallel to the beach and is near two tourist attractions, Laniakea Beach, known for the presence of sea turtles, and the beach that served as the set of the ABC television show "Lost." Defendants own residences on Papailoa Road.
In their complaint filed with the First Circuit Court, the Plaintiffs alleged that Defendants operated a bed and breakfast home or a transient vacation unit without a non-conforming use certificate, pursuant to LUO §§ 21-4.110-1, 21-4.110-2. The Circuit Court dismissed Plaintiffs' complaint with prejudice.
On appeal to the ICA, Plaintiffs argued that the Circuit Court erred in dismissing their complaint, because they have a private right of action under HRS § 46-4(a) to file suit to enjoin Defendants' alleged violation of the LUO. The ICA agreed with Plaintiffs, but also held that the "enforcement action is subject to the doctrine of primary jurisdiction[.]" Consequently, the Circuit Court cannot dismiss the complaint with prejudice, instead the Circuit Court must either (1) retain jurisdiction and stay the proceedings, or (2) if the parties would not be unfairly disadvantaged, dismiss the case without prejudice. Either action allows the Plaintiffs to first bring their claim before the administrative agency charged with enforcing the LUO. In this case, the Plaintiffs must (1) petition the director of the Department of Planning and Permitting for a declaratory ruling as to the application of the LUO to the alleged violation, and (2) if the director's decision is adverse to the Plaintiffs, they must appeal to the Zoning Board of Appeals, before the Circuit Court can consider their complaint.
The ICA recognized the similarity between the concepts of primary jurisdiction and exhaustion of administrative remedies, and offered the following guidance from the Hawaii Supreme Court:
Courts have "developed two principal doctrines to enable the question of timing of requests for judicial intervention in the administrative process to be answered: (1) primary jurisdiction; and (2) exhaustion of administrative remedies." B. Schwartz, Administrative Law § 8.23, at 485 (2d ed. 1984). "Both are essentially doctrines of comity between courts and agencies." Id. (footnote omitted).See Kona Old Hawaiian Trails Group v. Lyman, 69 Haw. 81, 734 P.2d 161 (1987).
"'Primary jurisdiction' applies where a claim is originally cognizable in the courts, and comes into play whenever enforcement of the claim requires the resolution of issues which, under a regulatory scheme, have been placed within the special competence of an administrative body." United States v. Western Pac. R.R., 352 U.S. 59, 63-64, 77 S.Ct. 161, 164-65, 1 L.Ed.2d 126 (1956). When this happens, "the judicial process is suspended pending referral of such issues to the administrative body for its views." Id. at 64, 77 S.Ct. at 165 (citation omitted). In effect, "the courts are divested of whatever original jurisdiction they would otherwise possess." B. Schwartz, supra, § 8.24, at 488 (emphasis omitted). And "even a seemingly contrary statutory provision will yield to the overriding policy promoted by the doctrine." Id.
"Exhaustion," on the other hand, comes into play "where a claim is cognizable in the first instance by an administrative agency alone; judicial interference is withheld until the administrative process has run its course." United States v. Western Pac. R.R., 352 U.S. at 63, 77 S.Ct. at 164. "The exhaustion principle asks simply that the avenues of relief nearest and simplest should be pursued first." Moore v. City of East Cleveland, 431 U.S. 494, 524, 97 S.Ct. 1932, 1948, 52 L.Ed.2d 531 (1977) (Burger, C.J., dissenting). "Judicial review of agency action will not be available unless the party affected has taken advantage of all the corrective procedures provided for in the administrative process." B. Schwartz, supra, § 8.30, at 502.