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Carmichael Timeline

Intro

This section of the website goes through the history of extracting surface water from East Maui and transporting that west, to the central area of Maui. Most of that water was used for agriculture and it was the sugar companies that engineered the transport system, primarily a system of ditches, pipes, and reservoirs. The first ditches were dug in the late 19th century.

The lands which were the primary source of the streams that supplied the water were partly privately owned but the bulk were and still are State (previous: Territory and Kingdom) owned. The problem is, the streams were so significantly diverted that it choked off private land owners downstream from water they depended on.

 The two following maps show the situation. The first map shows the ditch systems along with the lands in question; the second map shows what became the four lease areas.

Timeline

1939

EMI enters into an agreement with the Territory of Hawai’i for joint use and management of the aqueduct system EMI constructed in East Maui. Part of that agreement is for the Territory to sell, at a public auction, a 30-year license for the water gathered by the aqueduct.

1970

The Hawai’i Environmental Policy Act (HEPA) was made law. This act is now known as Chapter 343 of Hawai’i Revised Statutes (HRS). The act established procedures for review of the impact certain activities may have on the environment (which includes impact upon people), and defines what those activities are that would trigger a review. Any EIS (Environmental Impact Statement) today is probably in response to HRS 343.

1985

BLNR approves a public auction sale of a 30-year license for water rights on 33,000 acres of state land. A single license would cover four lease areas: Huelo,  Holomanu, Ke’anae, and Nahiku (shown in the map above). The 30-year license was suspended by the Hawai’i Attorney General and replaced with an annual revocable permit.

2000

The BLNR approves the issuance of four revocable permit to A&B and EMI for the four license areas of the original (but now expired) lease.

The revocable permits gave the permittee the “…right, privilege, and authority for the development, diversion, and use of water” from the relevant license area, “pursuant to the terms and conditions” in the relevant expired general leases.

These permits authorized EMI to divert more than 100 million gallons of water per day from east Maui streams for sugar-cane irrigation by Hawaiian Commercial and Sugar Co (HC&S). The permits also authorized the delivery of approximately 8.6 million gallons of water per day from east Maui streams to Maui County water treatment facilities for distribution as potable water.

Each of the permits stated that they were issued pursuant to HRS § 171-58 (1993). The BLNR added, as a condition to the issuance of the revocable permits, that the Attorney General issue an opinion regarding compliance with HEPA as it related to these leases. The last condition became an important element of the Carmichael suit (below).

HRS 171-58(c)  provides: Disposition of water rights may be made by lease at public auction as provided in this chapter or by permit for temporary use on a month-to-month basis under those conditions which will best serve the interests of the State and subject to a maximum term of one year and other restrictions under the law; provided further that after a certain land or water use has been authorized by the board subsequent to public hearings and conservation district use application and environmental impact statement approvals, water used in nonpolluting ways, for nonconsumptive purposes because it is returned to the same stream or other body of water from which it was drawn, essentially not affecting the volume and quality of water or biota in the stream or other body of water, may also be leased by the board with the prior approval of the governor and the prior authorization of the legislature by concurrent resolution.

2001

On May 14, 2001, A&B and EMI filed an application requesting that the BLNR (1) consolidate the four license areas under one thirty-year lease and sell the lease at public auction and (2) authorize “temporary continuation” of the four revocable permits pending issuance of the long-term lease (“proposed long term lease”).

On May 23, 2001, Nā Moku Aupuni O Koʻolau Hui (“Nā Moku”), and three individuals, petitioned the BLNR, pursuant to HRS chapter 91, for a contested case hearing on the proposed long-term lease for the license areas.

At a May 25, 2001 meeting, the BLNR considered the issuance of interim revocable permits to A&B and EMI for the license areas. The administrator of the Land Division of the DLNR recommended that the BLNR authorize the issuance of interim revocable permits to EMI and A&B, and “explained that there was going to be a HEPA requirement, and that the applicant [would] be required to prepare the necessary environmental documents.”

An A&B representative requested (which was denied) that the BLNR also approve the proposed long-term lease it had requested in its May 14 letter to the BLNR.

A Nā Moku representative testified that they would be petitioning for a contested case hearing.

The BLNR voted to defer action and instead “grant a holdover permit on a month-to-month basis [to EMI and A&B], pending the results of the contested case hearing”.

A “holdover” permit is an agreement that gives the licensee right of use without a formal lease. Without a formal lease there is no review. It avoided (illegally as it turned out) the HEPA requirement for an EA for long term use.

2002 – Holdover

At the BLNR’s May 24, 2002 meeting, upon consideration of an agenda item titled “Re-issuance of Interim Revocable Permits to [A&B] and [EMI] for the [License Areas]” BLNR staff recommended that the BLNR “authorize the re-issuance of permits for the subject waters in the interim and pending the outcome of the contested case.” The BLNR again voted to defer, and to grant a holdover of the existing revocable permit on a month-to-month basis pending the results of the contested case hearing. This was a continuation of the holdover permits from 2001.

2003 – 2005

After the BLNR’s 2002 holdover decision, the revocable permits were annually “continued” by a process in which the BLNR reviewed and voted to approve for continuation of a “master listing” of hundreds of revocable permits submitted by the DLNR. This process continued the revocable permits included on the master listing on a month-to-month basis for a one-year period. The DLNR’s submissions to the BLNR from 2002 to 2004 cited HRS § 171-55 (1993) as its authority for this annual review process.

HRS § 171-55 provides: Notwithstanding any other law to the contrary, the board of land and natural resources may issue permits for the temporary occupancy of state lands or an interest therein on a month-to-month basis by direct negotiation without public auction, under conditions and rent which will serve the best interests of the State, subject, however, to those restrictions as may from time to time be expressly imposed by the board. A permit on a month-to-month basis may continue for a period not to exceed one year from the date of its issuance; provided that the board may allow the permit to continue on a month-to-month basis for additional one-year periods.

The revocable permits were not subject to this annual review and continuation process in 2003 or 2004 and first appeared on the master listing submitted to the BLNR on November 18, 2005. In a declaration, the administrator of the Land Division of the DLNR stated that he put the revocable permits on the 2005 master listing “to be consistent with how all of the other revocable permits were being addressed by DLNR.”

In summary, the applicants (A&B and EMI) skirted the requirement for an Environmental Assessment by use of holdover permits that were continued on an annual basis, without proper review on the part of the BLNR. The BLNR also switched from drawing authority under HRS 171-58 to HRS 171-55.

2015 – Start of Carmichael Litigation

Kealoha Carmichael, Lezley Jacintho, and Nā Moku (“Petitioners”) filed a complaint in circuit court for declaratory and injunctive relief against the BLNR, its interim chair, Carty Chang, and the DLNR; A&B, EMI, and HC&S; and the Maui County Department of Water Supply.

Petitioners’ complaint was:

  • That both the DLNR and A&B had violated HRS 343 by not performing an Environmental Assessment
  • That revocable permits are therefore void
  • That A&B has no right to divert water from state lands without a permit
  • The DLNR has no statutory basis for authorizing water rights to A&B

A&B and the State argued that the decision authorizing the use of State lands occurred on May 26, 2000, when the revocable permits were first issued, and that the annual review process and continuation of the revocable permits did not constitute “use of State land” or “applicant action” for which an EA was required under HEPA.

Petitioners responded that the BLNR’s 2014 continuation decision was “[t]he only relevant decision” at issue.

The circuit court granted Petitioners’ motion for summary judgement. The Circuit Court found that the BLNR’s 2014 continuation decision was not HEPA “action” requiring an EA, but held that the revocable permits were, nonetheless, invalid because they exceeded the BLNR’s authority under HRS chapter 171 to issue temporary permits.

HRS § 171-40 provides: Upon expiration of the lease term, if the leased land is not otherwise disposed of, the board of land and natural resources may allow the lessee to continue to hold the land for a period not exceeding one year upon such rent, terms, and conditions as the board may prescribe; provided that if, immediately prior to the expiration of the lease, the land was cultivated with crops having ratoons for at least one cycle, as defined hereinafter, the board may permit the lessee to continue to hold the leased land until the crops from the last remaining cycle have been harvested. The term “cycle” as used in this section means the period required to plant and cultivate the original crop, including the harvesting of the first ratoon, being a period exceeding two years.

2019 – ICA

The Intermediate Court of Appeals (ICA) overruled the Circuit Court. Their reasoning was based on HRS chapter 171-55 which they ruled authorized A&B and the BLNR to engage in using holdover permits while A&B sought a long-term lease, regardless (the word in dispute was “notwithstanding”) of any other laws to the contrary. The ICA believed that the HEPA requirement was superseded by HRS 171-55, and that section also nullified the one-year limit on temporary permits stated in HRS 171-58. The ICA concluded that the purpose of HRS § 171-55 is to allow the BLNR to issue temporary permits to an applicant pursuing a long-term lease and that the BLNR’s 2014 continuation decision was not subject to HEPA’s EA and Environmental Impact Statement (“EIS”) requirements.

In summary, the pivotal issue is whether HRS 171-55 applies or whether HRS 171-58 applies. The ICA ruled that only 11-55 applies, despite explicit language being put in the permit that it was issued pursuant to HRS 11-58.

2020 – Supreme Court

The Hawai’i Supreme Court heard the appeal by the petitioners and defendants.

The arguments of the defendants were this:

  • HRS 171-55 is the operative law and 171-58 does not apply
  • The case originated from one-year permits issued in 2014 which have long since expired so the suit is moot,
  • The situation has changed significantly, particularly:
    • A&B stopped growing sugar cane
    • The CWRM set inflow stream standards in support of E. Maui farmers
    • CWRM capped diversions for 2020 in the amount of 45 MGD
    • A Draft EIS for water leases by A&B and EMI has been released.
  • Requiring an EA for revocable permits would be a huge burden given the number of revocable permits under the DLNR.

2022 – Findings by the Court

The ICA erred by ruling on the basis of perceived issues of material fact. HRS § 171-55 did not authorize the BLNR’s 2014 continuation decision because the BLNR did not make factual findings or enter conclusions of law positing that it was serving the State’s best interests. As a trustee of the public trust, the BLNR failed to demonstrate that it properly exercised the discretion vested in it by the constitution and the statute.

Furthermore, the original permits issued in 2001 were issued under HRS 171-58 which imposes a one-year limit on the permit. The BLNR has exceeded its authority in 2014 when it continued the permits.

The final court orders in finding for Carmichael, et al, was this:

Because analysis under HAR § 11-200-8 turns heavily on the nature and impact of the A&B Defendants’ specific “action,” we find that this inquiry properly lies within the circuit court’s purview. On remand, the circuit court should determine (1) whether the A&B Defendants’ “action” falls into one of the exempt classes enumerated by HAR § 11-200-8(a) and, if so, (2) whether HAR § 11-200-8(b) renders the exemption inapplicable. If the circuit court finds that either HAR § 11-200-8(a) does not apply or an exemption is inapplicable under HAR § 11-200 8(b), the circuit court should determine how best to apply HEPA’s EA requirement to the revocable permits, taking into consideration relevant actions already taken by Defendants toward issuance of the long-term lease, including A&B’s publication of a DEIS.