9th Circuit is told to reconsider OHA ruling

The lawsuit seeks to halt state funding for Hawaiian programs

A lawsuit seeking to cut off public money used for native Hawaiian programs has suffered a setback in the U.S. Supreme Court.

The Supreme Court on Monday told an appeals court to reconsider whether taxpayers have the right to sue over how the government spends their money.

"It's likely the court will dismiss the case," said Clyde Namuo, administrator for the Office of Hawaiian Affairs. "That's a favorable ruling for us."

The Supreme Court ordered the 9th U.S. Circuit Court of Appeals to review whether taxpayers have standing to sue over lawmakers' tax or spending decisions.

The decision was prompted by a ruling in another case, in which the high court sided against a group of Ohio taxpayers who objected to nearly $300 million in tax breaks for a new DaimlerChrysler AG Jeep plant.

A lawyer for the Hawaii taxpayers making the claim, H. William Burgess, said the case is far from settled.

The 9th Circuit Court could stand by its decision last September that taxpayers do have legal standing to challenge state funding of Hawaiians-only programs, he said.

"In our case ... the state discriminates against them as taxpayers by making them pay taxes but denying them benefits," Burgess said. "You can't treat people unequally."

If the appeals court dismisses the lawsuit, Burgess said he may refile it with new plaintiffs who could show they were discriminated against by exclusive Hawaiian programs.

The lawsuit, originally filed four years ago, contended that programs through the Office of Hawaiian Affairs should not receive state funding on the grounds that they benefit only people of native Hawaiian ancestry.

U.S. District Judge Susan Oki Mollway threw out the lawsuit in 2004, but it was partially reinstated by the 9th Circuit Court last September, limiting it to the taxpayers challenging general fund money going to OHA.

The agency, created by the state in 1978, receives about $2.8 million a year from the state general fund. Its total annual operating budget is about $28.5 million.