(2nd Amended 05/21/18)

No. SCOT-17-0000184, Thuraday, May 31, 2018, 10 a.m.

In the Matter of the Contested Case Hearing on the Water Use Permit Application Originally Filed by KUKUI (MOLOKAI), INC., Now Refiled as a New Ground Use by MOLOKAI PUBLIC UTILITIES, LLC.

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

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

Attorneys for Appellant Molokai Public Utilities, LLC:

Calvert G. Chipchase and Christopher T. Goodin

Attorneys for Appellees Judy Caparida and Georgina Kuahuia:

David K. Kopper and Sharla Ann Manley

Attorneys for Appellee Dept. of Hawaiian Home Lands, State of Hawaii:

Diane K. Taira, Matthew S. Dvonch, and Ryan K. P. Kanakaole, Deputy Attorneys General

Attorney for Appellee Office of Hawaiian Affairs:

Sherry P. Broder

Attorneys for Appellee County of Maui, Dept. of Water Supply:

Caleb P. Rowe and Kristin K. Tarnstrom, Deputies Corporation Counsel

NOTE: Certificate of Recusal, by Associate Justice Michael D. Wilson, filed 05/10/18.

NOTE: Order assigning Circuit Court Judge R. Mark Browning, in place of Wilson, J., recused, filed 05/16/18.

NOTE: Certificate of Recusal, by Circuit Court Judge R. Mark Browning, in place of Wilson, J., recused, filed 05/17/18.
 NOTE: Order assigning Circuit Court Judge Colette Y. Garibaldi, in place of Circuit Court Judge R. Mark Browning, who was previously assigned in place of Wilson, J., recused, filed 05/21/18.

COURT: MER, C.J., PAN, SSM, and RWP, JJ., and Circuit Court Judge Garibaldi, in place of Circuit Court Judge Browning, who was previously assigned in place of Wilson, J., recused.

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Brief Description:

This appeal considers whether the Commission on Water Resource Management (the Commission) erred in its February 17, 2017 dismissal of a contested case based on its finding that Molokai Public Utilities (MPU) waived the right to proceed with the case.

The underlying contested case hearing arose from a 1993 ground water use permit application submitted by Kukui (Molokai), Inc. (KMI). Following a contested case hearing, the Commission granted the application in 2001. Intervenor-Appellants Department of Hawaiian Homelands (DHHL), Office of Hawaiian Affairs (OHA), and Judy Caparida and Georgina Kuahuia (Caparida/Kuahuia) (collectively, Intervenors) appealed the Commission’s decision. The supreme court vacated the Commission’s final decision and order and remanded the case for further proceedings, stating that if KMI sought to “revive” expired uses, it was required to apply for a permit under HRS § 174C-51. In re Contested Case Hearing on Water Use Permit Application Filed by Kukui (Molokai), Inc., 116 Hawaii 481, 174 P.3d 320 (2007)).

During the pendency of the appeal, KMI was acquired by a wholly-owned subsidiary of Molokai Properties Limited (MPL). MPL also owns MPU, a licensed public utility that provides water in the Kaluakoi area of West Molokai. In early 2008, a status conference was held regarding the case. On May 27, 2008, MPL sent a letter to the Commission on behalf of MPU stating that the company was seeking a buyer for MPU, that it did “not have the resources to pursue this very expensive remand proceeding,” and that “hopefully, [the new owner of MPU] will be capable of resolving this matter.”

MPU remained in business. In 2015, the Commission accepted as complete a new groundwater use permit application from MPU as part of the remanded contested case. After a status conference, briefings, and oral arguments by MPU and the Intervenors, joined by Maui Department of Water Supply (MDWS), the Commission dismissed the contested case. The Commission found that MPU waived its right to continue the contested case via its May 27, 2008 letter and a subsequent May 30, 2008 letter notifying the Public Utilities Commission that MPU would cease operations that summer.

MPU appealed the dismissal. On appeal, MPU claims that the May 27, 2008 letter is equivocal and thus cannot constitute a waiver. MPU contends that it complied with the order of remand by submitting a new permit application, and the Commission erred when it failed to incorporate this application into the existing contested case. DHHL, OHA, MDWS, and Caparida/Kuahuia filed responsive briefs in support of upholding the Commission’s decision to dismiss the contested case. These parties assert, inter alia, that MPU waived its right to participate in the contested case through the May 27, 2008 letter and by its subsequent actions.