Court again rejects
OHA’s claim to airport
ceded-land rent

The Hawaii Supreme Court has again shot down attempts by the Office of Hawaiian Affairs to recover revenue from airport ceded lands.

The high court upheld the dismissal yesterday of an OHA lawsuit seeking what it estimates to be hundreds of millions of dollars in revenues it would have received under an invalidated state law.

State attorneys say OHA can go to the Legislature to settle the amount the state owes. In two previous suits brought by OHA, the Supreme Court ruled that the amount payable to OHA must be determined by the Legislature.

OHA trustees and their counsel, former Associate Justice Robert Klein, could not be reached for comment.

Under the state Constitution, OHA gets a percentage of revenues from former monarchy lands held in trust by the state government. A 1990 settlement agreement between the executive and legislative branches resulted in Act 304, which mandated that OHA would get 20 percent of ceded-land revenues.

But the Hawaii Supreme Court invalidated Act 304 in September 2001, saying it conflicted with a federal law that prohibits the diversion of airport revenues for non-airport uses.

The federal Forgiveness Act passed in 1997 prohibited the state from using airport money to pay OHA but forgave $28.2 million it had paid between 1992 and 1995. Had the state not settled the matter, it would have been obligated to repay that amount to the federal government.

OHA sued the state in July 2003, saying the state breached the 1990 agreement and its trust duties by agreeing with the Forgiveness Act, because it resulted in the invalidation of Act 304.

The state had argued initially that the payments to OHA were for rent. But then-state Attorney General Margery Bronster later wanted to resolve the dispute and chose not to challenge the Federal Aviation Administration's position that the $28 million payment to OHA was improper. The U.S. Department of Transportation inspector general had concluded earlier that the payments were illegal because no services were rendered.

The high court's ruling yesterday "upheld the exclusive authority of the attorney general to settle claims for the state of Hawaii, including claims by the federal government for the diversion of airport revenues," said Deputy Attorney General Dorothy Sellers.

"We're happy with the decision, and we appreciate the thoroughness and promptness with which the court ruled," she added.

The high court had heard oral arguments from both sides two months ago.

In their 55-page decision, the justices ruled that the attorney general's decision to settle the dispute with the federal government "fell squarely within her exclusive authority to control and manage 'the settlement of imminent actions against the state.'"

The justices also ruled that the claims OHA had against the state were not within the trust obligation that the state owes OHA. They also rejected OHA's argument that Act 304 was a binding, enforceable contract, Sellers said.

The state has continued to pay its 20 percent share of revenues -- close to $9 million a year from other sources other than airport fees.