No. SCAP-13-0000091, Wednesday, June 25, 2014, 8:45 a.m.

DW AINA LE`A DEVELOPMENT, LLC, Respondent/Co-Petitioner-Appellant-Appellee, vs. BRIDGE AINA LE`A, LLC., Respondent/Co-Petitioner-Appellant-Appellee, and STATE OF HAWAI`I LAND USE COMMISSION, Petitioner/Appellee-Appellant, and STATE OF HAWAI`I OFFICE OF PLANNING, COUNTY OF HAWAII PLANNING AGENCY, Respondents/Appellees (CIV. NO. 11-1-112K), and BRIDGE AINA LE`A, LLC., Respondent/Appellant-Appellee, vs. STATE OF HAWAI`I LAND USE COMMISSION, Respondent/Appellee-Appellant, and STATE OF HAWAI`I OFFICE OF PLANNING and COUNTY OF HAWAI`I, Respondents/Appellees, and DW AINA LE`A DEVELOPMENT, LLC., Respondent/Appellee-Appellant (CIV. NO. 11-1-0969-05).

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

Supreme Court Courtroom
Ali`iolani Hale, 2nd Floor
417 South King Street
Honolulu, HI 96813

Attorneys for Petitioner State of Hawai`i Land Use Commission:

Russell A. Suzuki, William J. Wynhoff, and Diane Erickson, Deputy Attorneys General

Attorneys for Co-Petitioner Bridge Aina Le`a: 

Bruce D. Voss, Michael C. Carroll, and Matthew C. Shannon of Bay Lung Rose & Holma

Attorneys for Respondent DW Aina Lea Development: 

David J. Minkin, Dayna H. Kamimura-Ching, and Troy J.H. Andrade of McCorriston Miller Mukai MacKinnon LLP

Attorney for Respondents County of Hawai`i Planning Dept. and County of Hawai`i: 

William V. Brilhante, Jr., Deputy Corporation Counsel

Attorneys for Respondent State of Hawai`i Office of Planning: 

Bryan C. Yee and Deborah Day Emerson, Deputy Attorneys General

NOTE: Certificate of Recusal, by Associate Justice Simeon R. Acoba, Jr., filed 01/13/14.

NOTE: Order assigning Circuit Court Judge Randal K.O. Lee, in place of Acoba, J., recused, filed 01/16/14.

NOTE: Order granting Application for Transfer, filed 01/28/14.

COURT: MER, C.J.; PAN, SSM, & RWP, JJ.; and Circuit Court Judge Lee, in place of Acoba, J., recused.

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Brief Description:

This appeal arises out of a dispute over the classification of approximately 1,060 acres of land in Waikoloa on Hawai`i Island. In 1989, the land was reclassified from the agricultural land use district to the urban land use district in order to allow for the development of a residential community. The land was reclassified subject to the condition that at least sixty percent of the units be for affordable housing. Over time, the land changed hands several times and the Land Use Commission (LUC) amended the affordable housing condition.

By 2005, the condition required Bridge Aina Le`a (Bridge) to construct no fewer than 385 affordable housing units, provide certificates of occupancy for all of these units by November 17, 2010, and submit a joint venture agreement and mass grading contract no later than November 17, 2006. In December 2008, the LUC issued an order to show cause why the land should not revert to the former agricultural land use classification. The LUC stated that it had reason to believe that Bridge and its predecessors in interest had “failed to perform according to the conditions imposed and to the representations and commitments made to [the LUC] in obtaining reclassification of the Subject Area and in obtaining amendments to conditions of reclassification.” The LUC specifically cited the affordable housing condition in the order, among others. Early in 2009, Bridge informed the LUC that it intended to assign its interest in the land to DW Aina Le?a Development (DW) through an installment sale. After proceedings over the course of several years, the LUC issued an order reverting the land to the agricultural use district. Bridge and DW each appealed and their cases were consolidated.

The Circuit Court of the Third Circuit issued findings of fact, conclusions of law, and an order reversing and vacating the LUC’s order. The circuit court concluded that the LUC: (1) exceeded its statutory authority and violated HRS chapter 205; (2) violated HRS §§ 205-4(h), 205-17, and 205-4(g); (3) violated HRS chapters 91 and 205 and HAR chapter 15; and (4) violated Bridge’s and DW’s due process and equal protection rights.

On appeal, the LUC raises the following three points of error. First, the LUC asks whether the circuit court erred in equating the reclassification process set forth in HRS § 205-4(a) (Supp. 2012) with the reversion process set forth in HRS § 205-4(g) (2001). Second, the LUC asks whether the circuit court erred in considering matters not part of the record in violation of HRS § 91-14(g) (2012) and HRS § 91-9(e) (2012). Third, the LUC asks whether the circuit court erred in determining in an agency appeal that the LUC and individual commissioners violated Bridge’s and DW’s constitutional rights to equal protection and due process.