Argument Preview: Hawaii v. Office of Hawaiian Affairs

Stanford student Patrick Nemeroff previews the first case to be argued on Wednesday, February 25th.

In State of Hawaii v. Office of Hawaiian Affairs, No. 07-1372, the Court will review a decision of the Hawaii Supreme Court which prohibits the State from selling virtually any state-owned land until it reaches a political settlement with Native Hawaiians.

At issue in this case are competing claims to 1.2 million acres of state land – twenty-nine percent of the State’s total land area – and the duty owed to Native Hawaiians by the State. More broadly, the case implicates the entire history of U.S. control of Hawaii.

In 1893, the Hawaiian monarchy was overthrown by private U.S. citizens with help from U.S. officials. Queen Liliuokalani protested the forceful taking of Hawaiian land, declaring that she yielded the land only until the U.S. government recognized the overthrow as unlawful and reinstated the Hawaiian monarchy. But five years later, President McKinley signed the Newlands Resolution, pursuant to which the United States annexed Hawaii and the Hawaiian government ceded 1.8 million acres of land to the federal government.

When Hawaii became the Union’s fiftieth state in 1959, the federal government gave the State title to most of the previously ceded land. The Hawaii Admission Act, which detailed the terms of Hawaii’s entry into the Union, requires that all ceded land be held in trust to be used exclusively for one or more of five purposes, including for the benefit of Native Hawaiians and the promotion of homeownership. In 1978, the Office of Hawaiian Affairs (OHA), the named plaintiff in this case, was established through a state constitutional convention to receive and manage a portion of the funds derived from the ceded lands for the benefit of Native Hawaiians.

Central to the issues in this case are statutes passed in 1993 by both the Hawaii State Legislature and the U.S. Congress recognizing the 100^th anniversary of the monarchy’s overthrow. On the state level, three related statutes recounted the story of the monarchy’s overthrow and annexation of Hawaii, acknowledged that neither Native Hawaiians or their government had consented to the cessation of land, declared the U.S.’s actions “illegal and immoral,” and resolved to support efforts by Native Hawaiians to vindicate their rights and to establish their own sovereign government. Congress subsequently issued an Apology Resolution that described the monarchy’s overthrow and apologized to Native Hawaiians. And in 1997, the Hawaii Legislature passed another statute clarifying the proper management of lands held in trust for the benefit of Native Hawaiians and embracing the facts laid out in the federal Apology Resolution.

This case arose when the State sought to develop and sell as a residential property a 500-acre parcel of land in West Maui, called the “Leiali’i parcel.” Negotiations between the State and OHA regarding OHA’s compensation for the sale broke down when, following the 1993 legislation, OHA demanded that the transfer of the Leiali’i parcel include a disclaimer that the conveyance did not waive or diminish Native Hawaiian claims to ownership of the land. In 1994, the State transferred the land and paid OHA $5,573,604.40 – twenty percent of one fair market value discussed by OHA and the State. OHA refused to accept the check.

Instead, OHA (along with several individual plaintiffs) filed suits in Hawaii state court, seeking (1) an injunction prohibiting the State from selling any ceded land; and (2) an injunction barring the sale of the Leiali’i parcel specifically. In the alternative, they requested a declaration that any sale of the lands would violate the state constitution and the federal Admission Act, or at a minimum would not release or limit the claims of Native Hawaiians. The trial court denied relief on multiple grounds: waiver, collateral estoppel, sovereign immunity, ripeness, and the political question doctrine. And in any event, the court held, the State had express authority to alienate ceded land from the public trust.

On appeal, the Hawaii Supreme Court reversed, and ordered that an injunction be issued to require the State, as trustee, to preserve the ceded lands until the claims to them are resolved. The court began its discussion of the legal questions at issue in the case with a preliminary examination of the Apology Resolution and the related state statutes. In its view, the Apology Resolution evinced congressional recognition “that the Native Hawaiians have unrelinquished claims over the ceded land” and “contemplate[d] future reconciliation” between the State, the United States, and Native Hawaiians. In its view, because the related state statutes support that conclusion, the two sets of legislation together create a fiduciary duty by the State to preserve the land until the unresolved claims have been settled. Concluding that OHA’s claims satisfied the balance of hardships test for a permanent injunction, the Hawaii Supreme Court issued the injunction now before the Supreme Court.

The State begins its petition for certiorari by emphasizing the practical impact of the decision below, which limits the State’s ability to manage virtually all of the state-owned land in Hawaii. Moreover, the decision raises serious federalism concerns and, because it is based in federal law, cannot be corrected through the State’s political processes.

Next, the State argues that the Hawaii Supreme Court incorrectly interpreted the Apology Resolution as limiting Hawaii’s sovereign authority to sell its own land. The State explains that the Apology Resolution was intended to serve two purposes: (1) to acknowledge the 100^th anniversary of the monarchy’s overthrow; and (2) to apologize to Native Hawaiians for the U.S.’s role in that overthrow. The Apology Resolution does not address the State’s obligations and certainly does not alter the State’s legal rights. In particular, the Hawaii Supreme Court erroneously construed Section 3 of the Apology Resolution, which provides that “[n]othing in [the Resolution] is intended to serve as a settlement of any claims against the United States.” This provision does not – as the Hawaii Supreme Court held – require future settlement of Native Hawaiians claims; instead, it at most ensures that Native Hawaiians’ claims are no worse off after enactment of the Resolution than they were before. Regardless, Congress would not have altered the State’s substantive rights by implication. This more limited construction is supported by the Resolution’s legislative history, which specifically notes that the Resolution “will not result in any changes in existing law.” The doctrine of constitutional avoidance also counsels in favor of this limited interpretation of the Apology Resolution, because the Hawaii Supreme Court’s more expansive construction raises serious federalism issues by abrogating the State’s sovereign authority to manage and sell its own public lands. At a minimum, the State argues, a clear statement of Congress’s intent to take such a constitutionally questionable step is required.

Opposing certiorari, OHA does not address the merits of the Hawaii Supreme Court’s interpretation of the Apology Resolution. Instead, the OHA argues first that the decision rests on adequate and independent state grounds, because the Hawaii Supreme Court’s decision was grounded in state trust law and the State’s fiduciary duty to Native Hawaiians, as established by the four state laws cited by that court. Thus, the state court would have reached the same result even if the Apology Resolution had never been enacted. To be sure, the Hawaii Supreme Court referred to the Apology Resolution, but it also relied on corresponding state law for every point on which its holding rested. For the same reason, the State lacks standing, as no holding by the U.S. Supreme Court would remedy the State’s injury.

In any event, OHA argues, this case does not warrant review by the Supreme Court because the holding is limited to Hawaii’s unique circumstances. In Hawaii, OHA explains, public lands have always been held for the benefit of Native Hawaiians, so that the fiduciary duty on which the Hawaii Supreme Court relied is not found anywhere else. Moreover, the impact of the decision is limited even within Hawaii, as it merely maintains the status quo: the State’s lands will continue to be managed the way they have always been. Finally, the Native Hawaiians’ claims will be resolved within a finite period of time, at which point the injunction will end.

In its reply brief, the State disputes the argument that the Hawaii Supreme Court’s opinion rests on independent and adequate state grounds. Under Michigan v. Long, the Court has jurisdiction if the decision is “interwoven with federal law,” so long as the adequacy and independence of the state law ground “is not clear from the face of the opinion.” In this case, the Hawaii Supreme Court repeatedly cited the Apology Resolution and even indicated that the State’s fiduciary duty arose only after the Apology Resolution was enacted. In any event, even if the decision were supported by independent state grounds, an exception to the adequate and independent state grounds doctrine is warranted in this case, in which – unlike most cases – the the Court’s resolution of the federal-law question would not be merely an advisory opinion with no practical impact on the parties. Rather, these parties have adverse interests regarding the federal-law question, the resolution of which will affect possible resolutions of the case through state politics. Finally, the State again emphasizes the significant practical impact that the decision below will have on the State’s ability to manage its lands and the widespread concern it has raised among other states.

The State begins its merits brief where it left off at the cert. stage: responding to OHA’s argument that the Court lacks jurisdiction to review the decision below because it rests on adequate and independent state grounds. The State first reiterates its earlier arguments that (1) the opinion below rested primarily on the Apology Resolution; (2) it did not clearly rest on independent and adequate state grounds; and (3) the federal law basis for the holding impedes the State from resolving the Native Hawaiians’ claims through any political means other than a settlement. The State also argues that the Court has jurisdiction to review the decision because it “affirmatively conflicts” with other federal laws – such as the Newlands Resolution, Organic Act of 1990, and the Admission Act – in violation of the Supremacy Clause.

Turning to the merits, the State makes three primary arguments. First, it again contends that the Hawaii Supreme Court erroneously interpreted the Apology Resolution. Second, the decision conflicts with other federal laws besides the Apology Resolution. The Newlands Resolution, it explains, completely extinguished the Native Hawaiian claims to the land, taking absolute title for the federal government – a conclusion that is in fact reinforced by the Newlands Resolution’s direction that the newly annexed land would be used for the benefit of the inhabitants of the Hawaiian Islands. And subsequent legislation – notably the Organic Act of 1900 and the Admission Act – similarly reflect the full title rights held first by the federal government and passed to the State. Because the Apology Resolution did not repeal those acts, federal law bars the Hawaii Supreme Court’s holding that the State does not have perfect title to the land, including the right to alienate it.; Third, constitutional avoidance requires the Court to reverse the decision below given the serious federal issues it raises and the lack of the clear statement from Congress necessary to limit the State’s sovereign interest in its land given the grave constitutional issues with such a limitation.

In its brief, the OHA again argues the Supreme Court lacks jurisdiction to review the decision below because it was based in state law, and in particular on the State’s fiduciary duty to Native Hawaiians created by the State’s Constitution. OHA does not dispute that the Hawaii Supreme Court looked to the Apology Resolution, as well as state laws, to support the factual premise that Native Hawaiians have unresolved claims to the land. But OHA argues that the reliance on federal law to support factual findings does not change the legal basis of the decision. OHA defends the merits of the Hawaii Supreme Court’s opinion under state law, but maintains the Court in any event lacks jurisdiction to review the decision.

OHA next argues that the Court should not consider the State’s argument that the decision below conflicts with federal laws such as the Newlands Resolution and the Admission Act. Such an argument, OHA contends, is not properly within the scope of the question presented, which asks whether the Apology Resolution strips Hawaii of its authority to sell the land; indeed, the State did not even cite the Newlands Resolution in its petition. Moreover, the State did not make the argument below, depriving the Hawaii Supreme Court of the chance to address it. But in any event, neither the Newlands Resolution nor the Admissions Act provides a basis for reversing the decision below, which was based on the State’s fiduciary duty to Native Hawaiians and the Native Hawaiians’ political and moral claims. Thus, it makes no difference whether the Newlands Resolution forecloses a purely legal claim by Native Hawaiians. Similarly, although the Admissions Act allows the State to sell its land, it – unlike other acts of admission – does not define the State’s fiduciary duty, which was established by the 1978 amendment to the Hawaii Constitution. Accordingly, the Hawaii Supreme Court appropriately interpreted that fiduciary duty, in light of the facts acknowledged in the Apology Resolution and state statutes, to prohibit sale of the land prior to settlement of Native Hawaiian claims.

In its reply brief, the State contests OHA’s claim that the Hawaii Supreme Court relied on the Apology Resolution merely as factual support. Indeed, the Hawaii Supreme Court held that the Apology Resolution changed the legal landscape by altering the obligations of the State. It is implausible, the State argues, that the mere congressional acknowledgment of well-known facts would lead the Hawaii Supreme Court to recognize for the first time claims on the land by Native Hawaiians. Moreover, the so-called facts on which the court relied include the illegality of the annexation of Hawaiian land – which is necessarily a legal conclusion, not a factual one.

Similarly, the State dismisses OHA’s arguments that the Newlands Resolution and Admission Act do not bear on the decision below because it rested on the political and moral claims of Native Hawaiians rather than their legal claims to the land. Although, in the State’s view, OHA is oversimplifying the basis for the decision below, the state courts in any event are only entitled to issue injunctions on the basis of legal (rather than moral) claims, and federal law bars Native Hawaiians’ legal claims to the land. Finally, the State counters OHA’s waiver claim, emphasizing that the argument was both presented below and fairly presented in the petition for certiorari.

The Solicitor General filed a brief for the United States as amicus curiae in support of the State. The United States focuses on the State’s argument that long-established federal law bars Native Hawaiians’ claims to the land. It argues that the Newlands Resolution and Organic Act confirm that the federal government took absolute title to the land, without any constraints on alienation. The federal government then transferred its unencumbered title to the State, subject only to a federal (not state) trust in the Admissions Act. Because the Apology Resolution neither repealed those acts nor intruded upon Hawaii’s sovereign authority, the Hawaii Supreme Court’s injunction cannot stand.

This case has attracted considerable attention. Including the United States’s brief, seven amicus briefs were filed in support of the State, most notably a brief on behalf of thirty-two states arguing that the decision below violates principles of federalism. Ten amicus briefs were filed in support of OHA. Several of those briefs raised issues that were not addressed by the parties’ briefs. The Mountain States Legal Foundation filed a brief supporting the State in which it addressed the question whether Native Hawaiians deserve special deference from Congress similar to that given to American Indians; the Alaska Federation for Natives filed a brief in response. Another related argument, whether recognizing Native Hawaiian claims to land constitutes a race-based preference in violation of the Equal Protection Clause, was raised by the Pacific Legal Foundation, Cato Institute, and the Center for Equal Opportunity in support of the State and responded to by the National Congress of American Indians as well as The Native Hawaiian Legal Corporation et al.

The case will be argued on Wednesday, February 25^th.