Friday, December 6, 2002

Court OKs
ceded-lands sale

DECISION: The court denies an OHA request to stop the sale of ceded lands, the revenue from which is the basis of OHA's funding

REACTION: The OHA chairwoman says the judge erred and the decision may be appealed

What are ceded lands?
History of ceded lands dispute

By Pat Omandam

In a setback to native Hawaiian entitlements, state Circuit Judge Sabrina McKenna denied a request by the Office of Hawaiian Affairs for a moratorium on the sale of ceded lands.

McKenna also ruled yesterday the sale of these lands is not a breach of trust and does not violate the state Constitution.


"We believe the judge erred, and our attorney is carefully reviewing her lengthy decision," said a disappointed Haunani Apoliona, OHA chairwoman. "When the case was filed, it was expected then that the case, no matter who prevailed, would be appealed to a higher court."

OHA had argued if ceded lands are sold, it would forever diminish the revenue to which the agency is entitled.

Also, OHA trustees wanted the moratorium so it and the state could resolve their dispute over revenue payments from these lands. By law, OHA's funding is based on ceded-land revenues.

In the 107-page opinion issued yesterday, McKenna said the state has the legal authority and sovereign immunity to sell public-trust or ceded lands. The judge added that the creation of OHA and other changes in 1978 to the state Constitution do not alter this power.

The ruling on this 8-year-old case, filed by OHA and four individual Hawaiians against the state Housing and Community Development Corp., was originally triggered by two stalled state affordable-housing projects on Maui and Hawaii: Leialii in Wahikuli on Maui, and Laiopua in North Kona on the Big Island.

Leialii is a planned 4,813-home project built over a 20-year period on 1,120 acres of land. Laiopua is a master-planned community with 4,263 housing units, a high school and support infrastructure.

Both projects are on ceded lands and are on standby pending the outcome of the case.

Attorney John Komeiji, who was hired by the state Attorney General's Office for this case, said yesterday he was not authorized to comment on the ruling.

The Attorney General's Office said last evening it could not issue a statement on it until it was reviewed by Gov. Linda Lingle.

McKenna said the case involved fundamental issues concerning ceded lands and the trust responsibilities of the state in relation to the native Hawaiian people.

Ceded or public-trust lands make up about 1.8 million acres, or about 43 percent of the land in Hawaii.

"The court fully appreciates the importance of the aina to the native Hawaiian people and recognizes the distinct possibility of the creation and recognition of a sovereign Hawaiian government," McKenna said. "The court also recognizes that the state, as trustee of the ceded-lands trust, owes a high standard of fiduciary duty to the beneficiaries of the ceded-lands trust."

But she concluded the 1959 state Admissions Act and the state Constitution "expressly place" responsibility for and decisions on ceded lands with the state Legislature.

"What we glean from the opinion immediately is that the judge is recommending the matter be referred back to the Legislature and must go through the political process," Apoliona said. "We look forward to working with Gov. Lingle and the Legislature for a just resolution."

Finally, McKenna said Congress, the state Legislature and the courts have all recognized the illegality of the overthrow of the Hawaiian kingdom and the historical injustices toward native Hawaiians.

Even so, she said, the state's sovereign immunity and the fact that the courts cannot settle matters of a political nature prohibited her from considering OHA's claim that there is a cloud on the state's title to these ceded lands.


What are ceded lands?

Public trust or ceded lands make up about 1.8 million acres, or about 43 percent of the land in Hawaii. They were given or ceded to the United States shortly after the 1893 overthrow of the Hawaiian kingdom.

Upon statehood, Hawaii became trustee for about 1.4 million acres.

The statehood act set aside five purposes for their use, one of them being the betterment of native Hawaiians. In 1978 the state Constitution was amended to create the Office of Hawaiian Affairs and to fund it with ceded-land revenue.

In 1980 the Legislature set that share at 20 percent.

A 1990 state law that calculated those payments was ruled moot by the Hawaii Supreme Court in September 2001. OHA plans a major lobbying effort next session to enact a new law.



Land dispute

The dispute over the sale of ceded lands between the state and the Office of Hawaiian Affairs and native Hawaiians extends back eight years, based on court documents:

>> Feb. 5, 1990: The state Housing and Community Development Corp. holds an organizational meeting for the Leialii and Laiopua projects.

>> July 1991: OHA seeks 20 percent of the proceeds from the sale of Leialii land from state.

>> May 1992: Legislature passes Act 318, which creates a process for the sale of the Leialii and Laiopua parcels to HCDC from the state Department of Land & Natural Resources. It also determines how much OHA and the state Department of Hawaiian Home Lands should be compensated from the sale.

>> 1993-1994: OHA and DHHL begin talks with state regarding fair market value of Leialii land.

>> February 1994: State decides to transfer Leialii property to HCDC from DLNR before reaching an agreement with OHA on its value. Negotiations continue.

>> July 11, 1994: All sides agree the value of Leialii is $27.8 million.

>> Nov. 4, 1994: OHA refuses payment of $5.5 million for 20 percent of Leialii land because of how payment was calculated. It sues the state, saying the claims on the land by native Hawaiians defeat the public-purpose use of the land for affordable housing.

>> Nov. 30, 1994: Title Guaranty of Hawaii refuses to provide title insurance based on the allegations in the complaint.

>> July 17, 1995: Attorney General Margery Bronster issues an opinion saying the state has been and remains empowered to sell public-trust lands.

>> Aug. 10, 1995: Gov. Cayetano informs HCDC to proceed with the project and tells the attorney general to litigate the case, based on Bronster's opinion.

>> May 1997: Laiopua property is transferred to state DHHL to partially satisfy the state's obligation to pay the $600 million settlement with the homelands agency.

>> March 16, 1999: Title Guaranty again refuses to issue title insurance based on the allegations in this case.

>> Nov. 20, 2001: Trial begins before Circuit Judge Sabrina McKenna.

>> Dec. 5, 2002: McKenna rules against OHA and says state can sell ceded lands.

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