In the Matter of the Contested
Case Hearing on Water Use, Well
Construction, and Pump
Installation Permit Applications,
Filed by Wai`ola O Molokai, Inc.
and Molokai Ranch, Ltd.
Hawaii Supreme Court
Jan. 29, 2004
The entire island of Moloka`i was
designated as a Water Management
Area in 1992, which required all
water users to register their water uses
and to seek permission from the
Commission on Water Resource
Management (usually called the Water
Commission) for any new uses of
water.
OHA
Trustees
Colette
Machado
And
Haunani
Apoliona
Wai`ola O Molokai
The developer’s
proposal was to put in a
new well at Kamiloloa,
about three miles from
the existing Kualapu`u
well fields.
Molokai Ranch
Owns 35-40% of the land on
Molokai (50,000 acres).
Sought 1.25 mgd from the new
Kamiloloa well.
Water Commission awarded
them 655,928 gpd.
Department of Hawaiian
Home Lands – Molokai
25,383 acres
2.905 million gallons a day –
water reservation
Aquifers – Sustainable
Yields
Kualapu`u – 5 mgd
Kamiloloa -- 3 mgd
[ These figures are
contested – no way to know
for certain.]
Wai`ola O Molokai (2004)
Important Water Rights Victory of Native
Hawaiians on Molokai
The decision extended the “public trust”
protections that it had previously affirmed in the
2000 Waiahole Ditch Case to the water rights of the
Native Hawaiian people and confirmed that the
State's Water Commission was obliged to ensure that
all its actions protected the rights of Native
Hawaiians.
The Court’s ruling that reconfirms Native
Hawaiians are in a special category: “We have
consistently recognized the heightened duty of care
owed to the native Hawaiians.”
Wai`ola O Molokai
* OHA was one of four intervenors in
the case, joining to help protect the water
rights of Molokai homesteaders.
* Department of Hawaiian Home
Lands
* Native Hawaiians represented by
Earthjustice
* Native Hawaiians represented by the
Native Hawaiian Legal Corporation.
Wai`ola O Molokai
The Hawaii Supreme Court remanded back to
the Water Commission for further proceedings a
request that had been filed by the Molokai Ranch to
develop a new well in central Molokai, ruling that
the Commission’s decision had “violated DHHL’s
reservation rights as guaranteed” by the Hawaii
Constitution, the Hawaiian Homes Commission Act,
and Hawaii’s Water Code.
“MR-Wai`ola had the burden of establishing
…that the proposed use would not interfere with
DHHL’s 2.905 reservation of water in the Kualapu`u
aquifer system.”
Wai`ola O Molokai
The Court ruled that the Commission had not
adequately evaluated whether the new well would interfere
with the rights of the Department of Hawaiian Home Lands
(DHHL) to develop water sources for its lands on Molokai
in the future, and thus that the Commission had “clearly
erred” in issuing a water permit to the Molokai Ranch.
The Court explained that the “reservation” of 2.905
million gallons a day of water that had previously been
granted to DHHL was “a public trust purpose” and “an
essential mechanism by which to effectuate the State’s
public trust duty” and was thus “entitled to the full panoply
of constitutional protections afforded the other public trust
purposes enunciated by this court in Waiahole.”
Wai`ola O Molokai
(2004)
“MR-Wai`ola was
obligated to demonstrate
affirmatively that the
proposed well would not
affect native Hawaiians’
rights.”
Wai`ola O Molokai
The Court also said that the
Commission had “failed adequately to
discharge its public trust duty to protect
native Hawaiians’ traditional and
customary gathering rights” by not
allowing adequate cross-examination of
the Ranch’s oceanography expert (Dr.
Stephen Dollar) regarding the protection
of the subsistence and gathering rights of
the Native Hawaiians on Molokai.
Wai`ola O Molokai (2004) – Correlative Rights
“Pursuant to HRS sec. 174C-49( c), MR-Wai`ola
may transport water outside the aquifer of origin.”
* “Waiahole extended the ‘correlative rights
rule,’ as enunciated in City Mill, to all groundwater
resources in Hawaii…”
* “Inasmuch as the entire island of Molokai has
been designated a WMA, the common law doctrine
of correlative rights is inapplicable to the present
matter.”
* The Commission FOF “establish the findings,
as set forth in HRS sec. 174C-49( c), requisite to
allowing MR-Wai`ola to transport and use
groundwater outside the Kamiloloa aquifer system.”
Kukui (Molokai) Inc.
In 1993, Kukui (Molokai), Inc. (KMI), which
owned and operated the resort in the western end of
Molokai, submitted an application for 2.0 million
gallons a day (mgd) of water.
The Water Commission staff determined that this
application was incomplete, but the next year
recommended that the Commission allocate 1.275
mgd to the applicant for “existing uses” of water.
A few months later, the staff lowered its
recommendation to 1.183 mgd, based on better data,
and the following year (1995) lowered its
recommendation still further to 0.871 mgd.
Kukui (Molokai) Inc.
A formal contested case hearing began in 1998.
Challenging KMI’s application were
* the Department of Hawaiian Home Lands
(represented by the Attorney General through Clayton Lee
Crowell),
* individual intervenors Judy Caparida and Georgina
Kuahuia (represented by the Native Hawaiian Legal
Corporation through Alan Murakami), and
* individual intervenor Sarah Sykes (represented by
Maui attorney Isaac Hall).
* the Office of Hawaiian Affairs’ (represented by Jon
Van Dyke)
The contested case itself took place in November and
December 1998, primarily in Moloka`i, but with several
days of hearings in Honolulu.
Kukui (Molokai) Inc.
The Hearing Officer (Peter Adler) issued
his Proposed Findings of Fact, Conclusions of
Law, and Decision and Order on May 15,
2000.
The parties then filed written exceptions in
July 2000.
The Water Commission heard oral
arguments on these written exceptions on
October 17, 2001, in Moloka`i, and it issued
its Findings of Fact, Conclusions of Law, and
Decision and Order on December 19, 2001.
Kukui (Molokai) Inc.
The Water Commission allocated a total of 1.018
mgd to the applicant, 0.936 mgd for “existing uses”
and 0.082 mgd for “new uses.”
This allocation was less than the applicant
sought, but more than should have been allowed in
light of the facts showing that KMI had never in fact
utilized this much water and also the realization that
this allocation will have a significant negative
impact on the ability of the Department of Hawaiian
Home Lands to deliver water to its homesteaders in
Moloka`i.
EXISTING USE?
Application 1991-92 COWRM Established
(12/5/93)
(A-31)
March ‘95)
Golf 600,000
378,630
475,600
378,630 – bw
Hotel 100,000
130,685
100,000
100,000
Backwash
100,274
??
Condos 175,000
90,959
193,200
175,000
Kualapuu
75,890
Rsdnces
330,000
23,400
Papahaku
137,534
15,600
Moana Makani
3,288
1,800
Beach Park
26,027
Nursery
17,534
Molokai Ranch
49,315
System Loss
83,835
MIS
124,830
79,220
67,103
“Difference” __
25,753
_______
0
Total 1,205,000
1,244,544
871,420
738,133
Kukui (Molokai) Inc.
An appeal of the Contested Case involving
the application of Kukui (Molokai), Inc., for
water from the Kualapu`u Aquifer in central
Moloka`i.
This case is a companion case to one
involving Wai`ola O Molokai and the Molokai
Ranch from the adjacent Kamiloloa Aquifer.
Kukui (Molokai), Inc. has recently been
purchased by the owners of the Molokai
Ranch, so the issues in these two cases are
closely intertwined.
Kukui (Molokai) Inc.
In early 2001, the resort in west Moloka`i suspended
operations, and this property was put up for sale. Recently,
it has been reported that the KMI property will be purchased
by the Moloka`i Ranch.
The goal of the Office of Hawaiian Affairs throughout
this litigation has been to ensure that the Water Commission
recognizes and protects the water rights of the Native
Hawaiian People, and that the rights of the Native Hawaiian
People to water that has been recognized nationally in the
case of Winters v. United States, 207 U.S. 564 (1908), is
also recognized and applied by state agencies throughout the
Hawaiian Islands.
I. Impact of KMI’s Request on the Rights of the Native
Hawaiian People
A. The Winters Doctrine – land set aside by the federal
government for natives is entitled to the water the natives
need for agricultural and domestic uses.
B. Relevant Hawai`i Statutes --Haw. Const. Art. XII, Sec.
7; Haw. Homes Comm. Act, sec. 221( c); * Water Code –
HRS 174C-101(a)&(c); Water Code – HRS 174C-49(e)
C. The DHHL Reservation (2.905 mgd) – designed to
protect the rights of Native Hawaiians under Winters and
the relevant Hawai`i statutes – constitutes an important right
that must be protected.
D. Traditional and Customary Rights – strong Native
Hawaiian culture on Moloka`i requires protection of
subsistence living – Native Hawaiian families obtain 38%
of their food through traditional gathering activities.
II. How Much Water Is Available from the
Kualapuu Aquifer?
A. 5 mgd total? – Tom Nance testified that DHHL
could not obtain its reservation from its existing
wells; Bill Meyer testified that DHHL might not be
able to obtain the reservation at all from the
Kualapuu area.
B. Where is the top of the “transition zone”? – it
appears to be above the bottom of the DHHL well.
C. Evidence of rising chloride levels. – provides
strong evidence that the bottom of the DHHL well is
already in the transition zone.
D. Need for a new monitoring well. – an essential
step, pursuant to the precautionary principle.
III. What Is the Extent of KMI’s “Existing Use”?
In re Permit Applications for Koolaupoko
Ground Water Management Area (Oahu) (Dec.
Ruling No. DEC-OA94-G4, April 5, 1995):
“Therefore, we conclude that the term ‘existing use’
as used in the Water Code, HRS chapter 174C for
purpose of water use permits refers to those uses as
of the date of a particular area is designated as a
water management area under HRS 174C, Part IV.”
IV. How Should the Claims of Terrestrial Water Users
Be Balanced Against the Value of Having Fresh Water in
the Coastal Areaas and Nearshore Waters?
A. The value of natural ecosystems
1. To support native life forms – and support traditional
subsistence gathering rights.
2. Erosion control/Reduce fires
3. Promote health of coastal area
B. Ecosystems around the world are being restored:
1. Everglades, Florida
2. Owens Valley, California
3. Waiahole Valley, O`ahu
C. Transfers of water should be limited -- Precautionary
Principle – always err on the side of caution when scientific
information is inadequate.
Kukui (Molokai) Inc.--The Issues.
A. That KMI’s application was flawed because it
combined requests for both “existing” and “new” uses of
water, and that these uses should be considered separately in
separate proceedings.
B. That KMI had not established actual usage and
current need for the amount of water it was requesting,
particularly with regard to the condominium units it had
constructed, its golf course, and its residential units.
C. That the hearing officer had failed to recognize the
danger to the Kualapuu Aquifer from increased pumpage.
D. That KMI had failed to comply with the Safe
Drinking Water Act.
Kukui (Molokai) Inc.--The Issues.
E. That the hearing officer had misunderstood and
misapplied the correlative rights doctrine, by allowing water
obtained through that doctrine to be transferred to distant
locations.
F. That the hearing officer had misinterpreted and
misapplied the 2.905 mgd water reservation that had
previously been allocated to the Department of Hawaiian
Home Lands, and had not recognized that it should be
treated as an “existing use” that serves to limit allocations of
water to other claimants. This ruling is particularly
disturbing, because it fails to recognized the application of
the Winters doctrine to Native Hawaiians. This issue is also
raised in the Wai`ola case now pending before the Hawai`i
Supreme Court.
Kukui (Molokai) Inc.
OHA’s brief addressed the rights of the
Native Hawaiian People under the
Winters doctrine and Hawai`i statutes in
some detail, and explained why the Water
Commission erred in awarding 1.018
million gallons a day of water to Kukui
(Molokai), Inc., because this award
interferes with the ability of the
Department of Hawaiian Home Lands to
access the water it needs for homestead
developments.
Kukui (Molokai) Inc.
OHA’s brief also addressed the public trust
doctrine and the precautionary principles in
some detail, drawing upon the Court’s
decision in the Waiahole Ditch case and
explain how they apply to this dispute.
Finally, the brief discussed the correlative
rights doctrine, and the impact of the closure
of the resort and golf course in West Molokai,
which are the primary users of the disputed
water.
The Winters Doctrine.
OHA has always put particular emphasis on ensuring
that the Water Commission recognizes the unique rights of
the Native Hawaiian People to water, which stems from the
Winters case.
That case involved a group of white investors and
farmers who in 1900 constructed dams to divert the Milk
River in north-central Montana to provide irrigation water
to settlers who had acquired property under the federal
homestead and desert land use acts.
Their action was lawful under the homestead acts, but it
significantly reduced the amount of water reaching the
1,000,000-acre Fort Belknap Indian Reservation (which had
been created in 1888 by a treaty between the United States
and the Gros Ventre and Assiniboine Indians), producing the
effect that the water reaching the Native Americans was no
longer adequate for irrigation, livestock, or domestic use.
The Winters Doctrine.
After the United States brought suit on behalf of the
Natives to prevent the upstream diversion, the U.S. Supreme
Court held that the federal government had acquired on
behalf of the Native groups an appropriation of sufficient
water to fulfill the purposes of establishing the Reservation.
Because the Reservation was established prior to the
activities of the upstream diverters, the rights of the Natives
were superior and the white settlers were enjoined from
diverting any substantial quantities of water from the Milk
River.
The Court held that the fact that the Natives had not
begun to use substantial quantities of water until after the
white settlers had perfected their title to the lands under
U.S. homestead and desert land laws was immaterial,
because of the superior treaty rights of the Natives.
The Winters Doctrine.
The Court quoted the standard canon of interpretation
for agreements with Natives that “ambiguities occurring
will be resolved from the standpoint of the Indians.” 207
U.S. at 576.
It then said it was necessary to interpret the treaty to
achieve its goals, namely to enable the Indians “to become a
pastoral and civilized people,” id., by raising horses and
growing grass, grain and vegetables. Id. at 566.
This goal could be achieved only if the Natives had
access to large amounts of water from the Milk River, and
their rights had to be viewed as superior to any later
upstream settlers.
In reaching this conclusion, the Court was aware of the
substantial economic losses that would accrue to the
upstream white community, but viewed these losses as
immaterial.
The Winters Doctrine.
The parallels between the Native Hawaiian
homesteaders on Molokai and the natives at the Fort
Belknap Reservation in Montana, are obvious.
In both cases, the natives had originally controlled the
land and water in a much larger area.
Most of the native lands were in both cases ceded to the
United States, and the United States reserved specific lands
for use by the natives.
The clear intention of Congress in both cases was to
enable and encourage the creation of stable agriculturallybased communities.
The Hawaiian Homes Commission Act, 1920, 42 Stat.
108 (1921), was aimed at “rehabilitating the Hawaiian race”
by returning them to the lands. H.R. Rep. No. 67-236, at 1
(1921).
The Winters Doctrine.
Just as the U.S. Supreme Court concluded that the 1888
treaty with the Gros Ventre and Assiniboine Indians must be
interpreted to achieve its goals (i.e., to allow the Natives to
use their lands to graze and grow crops), state agencies such
as the Water Commission must also conclude that the
Hawaiian Homes Commission Act and the other statutes
relevant to water disputes must be interpreted to ensure that
they achieve their goals – to permit the “rehabilitation” of
the native Hawaiians by allowing them to engage in
successful agricultural activities, which of course requires
adequate water.
The Native Hawaiian homesteaders are entitled to
waters in sufficient quantities for their agricultural,
aquacultural, livestock, and domestic needs.
The Winters Doctrine.
The Winters “federal-reserved-water-rights” doctrine
has been followed in many other cases, including Arizona v.
California, 373 U.S. 546, 601 (1963), decree entered, 376
U.S. 340 (1964), modified, 460 U.S. 605 (1983)(which
ringingly reaffirmed Winters and explicitly protected the
rights of Natives on five reservations near the Colorado
River), and Cappaert v. United States, 426 U.S. 128
(1976)(where the Court held that lands set aside for natives
by the United States are protected from subsequent water
diversions, whether the diversion is by surface water or
groundwater). Because most of the lands assigned to the
Department of Hawaiian Home Lands were -- like most of
those assigned to North American Natives -- marginal, arid,
and in need of irrigation, these lands can only be utilized if
it is recognized that the Native Hawaiian homesteaders are
entitled as a matter of right to the water their lands need.
The Winters Doctrine.
Hawai`i’s Constitution and laws recognize and protect
the rights of Native Hawaiians to water, but these written
protections will become meaningless unless state agencies
apply these doctrines in disputes over water. Article XII,
Section 2, of Hawaii’s Constitution recognizes the
importance of protecting DHHL trust assets, including
water, and Article XII, Section 7 provides broad protection
to all the subsistence and traditional rights of Native
Hawaiians.
The water rights of Native Hawaiian homesteaders on
the lands of the Department of Hawaiian Home Lands are
also protected first in Section 221(c) of the Hawaiian
Homes Commission Act, 1920, 42 Stat. 108, as amended,
and in the Water Code, HRS §174C-101(a) and §174C49(e).
The Winters Doctrine.
But despite these strong protections, the Water
Commission concluded in Conclusion of Law 27 in its
recent KMI decision that the reservation it had previously
given to the Department of Hawaiian Home Lands is not an
“existing legal use” and hence cannot serve to block the
allocation of water to other users, and the remainder of the
opinion ignores the DHHL reservation, thus indicating that
reservations are not even to be considered when reviewing
applications for water by other parties.
This conclusion is in direct violation of governing law.
The rights to water of the Department of Hawaiian
Home Lands, just like the Native Hawaiian traditional and
customary rights, do have a priority status, and in that sense
the Hawaiian community does have a veto power over water
developments.
Wai`ola O Molokai (2004)
“In essence, the 1991 amendments
to HHCA sec. 220, HRS sec. 174C49(a)(7), and HRS sec. 174C-101(a)
comprise the state law equivalent to
the Winters doctrine for purposes of
homesteaders on Hawaiian
homelands. Thus, the Winters
doctrine is inapplicable to the present
matter.”
Kukui (Molokai) Inc.– attorney for the Commission.
The long delay between the hearing officer’s report and
the oral argument before the Commission was attributable in
part to the resignation of the attorney for the Commission
and the failure to appoint a replacement.
The attorney finally appointed was Yvonne Izu, a new
Deputy Attorney General, who had previously served as
counsel for Wai`ola o Moloka`i (the Moloka`i Ranch) in the
still-pending Wai`ola case.
Once it became clear that the Moloka`i Ranch was in
the process of purchasing the KMI property, the impropriety
of this appointment became obvious.
Although DHHL has some awkwardness in challenging
this appointment, because it is also represented by a Deputy
Attorney General, the other intervenors feel it is necessary
to challenge the conflict presented by this appointment.