Lawsuit by Hawaiians poses serious threat to OHA

THE ISSUE A federal appeals panel has ruled that legal Hawaiian beneficiaries of a trust managed by the Office of Hawaiian Affairs have a right to sue OHA for breach of trust.

SIX months after staving off a lawsuit by non-Hawaiians, the Office of Hawaiian Affairs faces a serious challenge by those with 50 percent or more Hawaiian blood. Federal legislation separate from Sen. Daniel Akaka's sovereignty bill might be needed to keep Hawaiian programs intact.

A three-judge panel of the 9th U.S. Court of Appeals this week reinstated a lawsuit by Hawaiians asserting that OHA should not be lobbying for the Akaka Bill or assisting Hawaiians with less than 50 percent Hawaiian blood. District Judge Susan Oki Mollway had ruled a year ago that the lawsuit was not permitted under federal law.

The appeals court ruled two years ago that non-Hawaiian taxpayers had no right to challenge OHA's expenditure of federal funding or revenue from crown or public lands ceded to the state in accordance with the Admission Act and the state Constitution. That lawsuit's challenge of state money going to OHA was rejected after the U.S. Supreme Court ruled in an Ohio case last year that taxpayers cannot challenge state expenditures in court.

The Admission Act set aside 1.8 million acres of land to be held by the state as a "public trust" in support of five areas of concern, one of which is "the betterment of the conditions of native Hawaiians," as defined in the 1920 Hawaiian Homes Commission Act. That law defined native Hawaiians as descendants "of not less than one-half part of the blood of races inhabiting the Hawaiian islands previous to 1778," when Capt. James Cook first came ashore.

Legislators have interpreted that to mean that 20 percent of the state revenue from those lands should go to OHA, which now receives more than $15 million a year from the state in ceded land revenue. Its annual operating budget is $28.5 million.

The lawsuit brought by Hawaiians with at least 50 percent Hawaiian blood contended that OHA has misspent the revenue to lobby in favor of the Akaka Bill and support three social programs -- the Native Hawaiian Legal Corp., the Na Pua No'eau Education Program and Alu Like Inc., a social services program, helping Hawaiians regardless of blood quantum.

The appeals panel ruled that a Hawaiian beneficiary of the trust "has an individual right to have the trust terms complied with, and therefore can sue ... for violation of that right." It ruled that Mollway misunderstood from a ruling in another case "that there was no private right of action under the Admission Act."

The panel sent the case back to Mollway to determine whether benefits are being spread among Hawaiians who don't qualify because they are less than half-Hawaiian. If so and the panel's ruling stands, OHA may have to turn to legislation amending the Admission Act in order to continue its good work.