On Wednesday, August 21, the Hawaii Supreme Court will hear oral arguments in the case of Kalima v State of Hawaii.

This is another case involving rights of beneficiaries of the Hawaiian Homes Commission Act was originally filed in 1999. No, that’s not a typo. We’re talking 20 years. And these Hawaiians, who have been adjudged to have suffered damages caused by the state’s breach of trust to Native Hawaiian benficiaries, are still waiting. Some plaintiffs died waiting.

The court issued an earlier opinion in this case on June 30, 2006, which summarized the background of the layers of problems with the Hawaiian Homes program over the years.

A.The Hawaiian Home Lands Trust

During the early 1900s, concern about the plight of the Hawaiian people who had been displaced from rural to urban areas began to emerge as a result of the serious disruption in their traditional way of life. Out of concern for the declining numbers of full-blooded Hawaiians and the recognition that all previous systems of land distribution were ineffective, Congress entertained various homesteading proposals designed to rehabilitate the native Hawaiian people. Eventually, Congress enacted the HHCA, creating a land trust from ceded crown and public lands that was intended to rehabilitate the native Hawaiian people by, inter alia, making them eligible to receive the benefits of homesteading through leased land and related programs from the trust.6 The HHCA designated certain public lands on the five major Hawaiian islands as “available lands.” HHCA §203 (1993). However, notwithstanding the efforts of various individuals, including Senator John Wise and Prince Jonah Kuhio Kalaniana‘ole, the available-land designation excluded some of the best agricultural lands of the territory, leaving the trust lands under the HHCA poorly suited to achieving the act’s intended purposes. Title to the Hawaiian home lands vested in the United States until the Territory of Hawai‘i became a state on August 1, 1959, at which time the newly formed State of Hawai‘i entered into a compact with the United States to assume the management and disposition of the Hawaiian home lands. Hawai‘i Admission Act of March 18, 1959, Pub.L. 86-3, §§ 4 & 5, 73 Stat. 4 (1959) (Hawai‘i Admission Act or Admission Act). The HHCA, together with the Hawai‘i Admission Act, impose upon the State the duties and obligations of trustee to oversee the operations carried out under the authority of the HHCA.

Despite the HHCA’s admirable goals, controversy plagued the trust from its inception in 1921 and continued after its transfer to the State in 1959. The problems were of such magnitude that, in 1983, a Federal-State Task Force on the HHCA was convened. The Task Force submitted a report to the State that identified several areas of concern and made recommendations for improvement. The areas included, inter alia: (1) problems with the HHCA program itself that affected the trust as a whole, involving (a) the lack of an inventory of the Hawaiian home lands, (b) the lack of useable lands, (c) the lack of proper funding sources, and (d) the improper use/sale/exchange of Hawaiian home lands by state and federal governments; and (2) administrative problems affecting individual beneficiaries, such as (a) delays related to the application and eligibility determination processes and (b) delays resulting from mismanagement of the long waiting lists.

With that background, here’s the summary of the case to be heard on Wednesday as it appears on the court’s website:

No. SCAP-18-0000068 Wednesday, August 21, 2019, 8:45 a.m.

LEONA KALIMA; DIANE BONER; RAYNETTE NALANI AH CHONG, special administrator of the estate of JOSEPH CHING, deceased; CAROLINE BRIGHT; DONNA KUEHU; IRENE CORDEIRO-VIERRA; and JAMES AKIONA, on behalf of themselves and all others similarly situated, Plaintiffs-Appellees/Cross-Appellants, vs. STATE OF HAWAII; STATE OF HAWAII DEPARTMENT OF HAWAIIAN HOME LANDS; STATE OF HAWAII HAWAIIAN HOME LANDS TRUST INDIVIDUAL CLAIMS REVIEW PANEL; DAVID Y. IGE, in his official capacity as Governor of the State of Hawaii, Defendants-Appellants/Cross-Appellees.

The above-captioned case has been set for argument on the merits at:

Supreme Court Courtroom
Aliiolani Hale, 2nd Floor
417 South King Street
Honolulu, HI 96813

Attorneys for plaintiffs-appellees/cross-appellants Leona Kalima, et al.:

Carl M. Varady of Law Office of Carl M. Varady and Thomas R. Grande of Grande Law Offices

Attorneys for defendants-appellants/cross-appellees State of Hawaii, et al.

Clyde J. Wadsworth, Solicitor General; Kimberly T. Guidry, Robert T. Nakatsuji, and Kalikoonalani D. Fernandes, Deputy Solicitors General

NOTE: Certificate of Recusal, by Associate Justice Sabrina S. McKenna, filed 01/25/19.

NOTE: Order assigning Circuit Court Judge Matthew J. Viola, in place of McKenna, J., recused, filed 01/29/19.

NOTE: Order granting Application for Transfer, filed 02/05/19.

COURT: Recktenwald, C.J., Nakayama, Pollack, and Wilson, JJ., and Circuit Court Judge Viola, in place of McKenna, J., recused.

Brief Description:

This transfer case concerns the calculation of damage awards to beneficiaries of the Hawaiian Home Lands Trust (“the trust”) who were injured as a result of the State of Hawaii’s (“the State”) breaches of the trust. Petitioners are beneficiaries of the trust whose time on the waiting list to receive homestead land was prolonged due to the State’s breaches of the trust.

In Kalima v. State (Kalima I), 111 Hawaii 84, 137 P.3d 990 (2006), this court held that Petitioners were permitted to file a complaint seeking individual damages under Hawaii Revised Statutes Chapter 674. On remand, the Circuit Court of the First Circuit (“the circuit court”) first found the State liable for various breaches of the trust. It later adopted a fair market value based damages model to calculate the damages to be awarded to each waiting list beneficiary. Another trial was held to resolve methodological issues regarding the circuit court’s fair market value model. In 2018, the circuit court entered a final judgment.

On appeal, the State contends that the circuit court erred in (1) establishing an overbroad subclass list; (2) finding that the State breached its trust duties by not recovering lands that were “withdrawn from the Trust prior to Statehood[;]” (3) adopting a damages model that is not connected to the breaches of trust that were found by the circuit court; (4) adopting a damages model that fails to limit recovery to “actual damages” as required by statute; (5) applying the Oahu fair market rental value model for residential leases to the entire State; (6) incorrectly determining that subclass members had no duty to mitigate damages until 1995; (7) incorrectly providing for temporary suspension of damages when claimants “deferred” from participation in a homestead offering; and (8) shifting the burden of proof to the State on essential elements of Petitioners’ case.

On cross-appeal, Petitioners argue that the circuit court erred in (1) ruling that beneficiaries must prove out-of-pocket expenditures to recover individual damages; (2) ruling that a waiting list subclass member’s “deferred” status suspends their individual damages; (3) imposing a six-year delay before individual damages accrue; (4) not bringing damages to present value; and (5) adopting the “best fit” curve and reducing individual subclass damages.