OHA challenge set back

A court rules against taxpayers trying to stop state funding of pro-Hawaiian activities

The 9th U.S. Circuit Court of Appeals ruled yesterday against a group of Hawaii taxpayers who say that the state unconstitutionally discriminates against non-Hawaiians by giving money to programs that only benefit Hawaiians.

Case At A Glance At issue: Fourteen taxpayers sued the state, saying it is discriminatory to use tax funds to pay for Hawaiians-only programs. The ruling: The 9th U.S. Circuit Court of Appeals rules that the plaintiffs did not have legal standing to file the lawsuit. What's next: The appeals court sent the case back to U.S. District Court in Honolulu where the plaintiffs vowed to continue to pursue their complaints.

The federal appeals court stopped short of dismissing the 2002 lawsuit but overturned its own earlier decision by finding the 14 taxpayers lack legal standing to challenge state funding of the Office of Hawaiian Affairs. The court sent the case back to U.S. District Court in Honolulu to determine if any of the plaintiffs are eligible "in any other capacity."

State and OHA attorneys said they expect the decision will put an end to the suit.

OHA attorney Sherry Broder said, "I consider this a victory for the Office of Hawaiian Affairs and native Hawaiians. The court found in favor of native Hawaiians."

But H. William Burgess, lawyer for Earl Arakaki and 13 others, said "it's not the end."

Burgess appealed the case to the appellate court after U.S. District Judge Susan Oki Mollway dismissed the lawsuit in 2004. In September 2005 a three-member panel of the 9th Circuit reinstated it, ruling that taxpayers could challenge the state for giving general fund money to OHA.

Last May, a U.S. Supreme Court ruling in a similar case appeared to doom the Hawaii taxpayers' challenge. The high court rejected a lawsuit by a group of Ohio taxpayers who challenged nearly $300 million in state and city tax breaks for DaimlerChrysler AG to build an auto plant in Toledo.

A month later, the Supreme Court instructed the appellate court to reconsider the Hawaii taxpayers' standing.

"Our case is different," Burgess said. "You have to have some specific injury to invoke court jurisdiction. Just because you pay taxes, you can't have a court decide on every state decision. In DaimlerChrysler the plaintiffs didn't suffer injury different from other Ohio taxpayers.

"In our case the plaintiffs have to pay taxes to support racial discrimination against themselves," Burgess said. "They suffer a specific pocketbook injury because not all taxpayers are eligible for the benefits. Taxpayers of Hawaiian ancestry don't suffer any injury because they are eligible for benefits."

"I still think ultimately we will prevail. This is just a bump in the road," he said.

State Attorney General Mark Bennett said, "We hoped the 9th Circuit would end the lawsuit. We're disappointed they continued it for further proceedings. We are pleased that on every substantive issue, the 9th Circuit ruled in our favor.

"We believe it's a short procedural delay. There's no possible basis on which plaintiffs can proceed with this lawsuit."

OHA Chairwoman Haunani Apoliona applauded the ruling but said it underscores the need for federal legislation that provides political recognition for native Hawaiians.

She called for passage of the Native Hawaiian Government Reorganization Act, known as the Akaka Bill after its author, U.S. Sen. Daniel Akaka. "It will benefit not only native Hawaiians, but the entire state of Hawaii," she said in a press release.

OHA receives about 10 percent of its $28.5 million operating budget from the state.

The lawsuit originally also named the Department of Hawaiian Home Lands. Mollway dismissed the agency as a defendant, saying the program was mandated by federal law and that state taxpayers had no standing to challenge federal law.