No. SCWC-11-0000065, Thursday, March 30, 2017, 11:15 a.m.

IN THE MATTER OF THE ARBITRATION BETWEEN HAWAIʻI STATE TEACHERS ASSOCIATION, Respondent/Union-Appellant, and STATE OF HAWAIʻI, DEPARTMENT OF EDUCATION, Petitioner/Employer-Appellee.

The above-captioned case has been set for argument on the merits at:

Supreme Court Courtroom
Aliʻiolani Hale, 2nd Floor
417 South King Street
Honolulu, HI 96813

Attorney for Petitioner:

Robert T. Nakatsuji, Deputy Solicitor General

Attorneys for Respondent:

Herbert R. Takahashi, Rebecca L. Covert, and Davina W. Lam

NOTE: Order accepting Application for Writ of Certiorari, filed 02/01/17.

COURT: MER, CJ; PAN, SSM, RWP, and MDW, JJ.

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Brief Description:

Petitioner/Employer-Appellee the State of Hawaiʻi (the State) has applied for a writ of certiorari from the Intermediate Court of Appeals’ (ICA) November 21, 2016 judgment on appeal.

In 2008, Kathleen Morita (Morita or grievant) was terminated from her job as a public school teacher. Respondent/Union-Appellant Hawaiʻi State Teachers Association (HSTA) filed a grievance on Morita’s behalf and the grievance went to arbitration pursuant to a collective bargaining agreement between HSTA and the State. The arbitrator sustained the grievance, ordered that Morita be reinstated to her position, and awarded Morita backpay and backpay interest.

In the following circuit court proceedings, the State objected to the backpay interest (also labeled throughout the proceedings as prejudgment interest), claiming that it violated its sovereign immunity. The circuit court ultimately found in favor of the State on this issue and vacated the arbitrator’s award of prejudgment interest.

On appeal, the ICA vacated the circuit court’s judgment and reversed the circuit court’s orders as to the issue of prejudgment interest, concluding that the arbitrator’s award should be upheld. The ICA based this conclusion on two grounds. First, the ICA determined that the circuit court erred procedurally when it entered an order vacating the portion of the award relating to interest because the circuit court no longer had the authority to enter an order on that issue. Second, the ICA determined that sovereign immunity did not protect the State from an award of interest in this context. The ICA subsequently awarded HSTA attorneys’ fees and costs on appeal.

In its application to this court, the State raises three points for review:

1. Did the ICA commit grave errors or act inconsistently with prior case law by, in its procedural decisions, improperly giving binding effect to the October 1, 2010 Judgment (which was not a final judgment and was, in any event, altered/amended) and in invalidating the circuit court’s rulings on pre-judgment interest?
 2. Did the ICA commit grave errors or act inconsistently with prior case law by, in its substantive decisions, improperly upholding an award of pre-judgment interest against the State as a result of ignoring sovereign immunity law and the public policy exception to arbitrations?
 3. Did the ICA gravely err in awarding HSTA appellate attorney’s fees and costs?