Case Information
*4
BYBEE, Circuit Judge:
In this сase we are called on, yet again, to hear a challenge
to state programs restricting benefits to “native Hawaiians” or
“Hawaiians.”
See, e.g., Carroll v. Nakatani
,
Plaintiffs in this case are citizens of the State of Hawaii
who allege that various state programs preferentially treat per-
sons of Hawaiian ancestry, in violation of the Fifth and Four-
teenth Amendments, 42 U.S.C. § 1983, and the terms of a
public land trust. Plaintiffs brought suit against the Depart-
ment of Hawaiian Home Lands (“DHHL”), the Hawaiian
Homes Commission (“HHC”), the Office of Hawaiian Affairs
(“OHA”), various state officers, and the United States. Plain-
tiffs claim standing to sue as taxpayers and as beneficiaries of
the public land trust. In a series of orders, the district court
held that Plaintiffs lacked standing to raise certain claims and
that Plaintiffs’ remaining claims raised a nonjusticiable politi-
cal question, and dismissed the entire lawsuit.
Arakaki v.
Lingle
,
We affirm in part and reverse in part. We hold that Plain- tiffs lack standing to sue the federal government and that the district court therefore correctly dismissed all claims to which the Unitеd States is a named party or an indispensable party. We affirm the district court in finding that Plaintiffs have demonstrated standing as state taxpayers to challenge those state programs that are funded by state tax revenue and for which the United States is not an indispensable party. Plain- tiffs therefore have standing to bring a suit claiming that the OHA programs that are funded by state tax revenue violate the Equal Protection Clause of the Fourteenth Amendment. However, we reverse the district court’s dismissal of that claim on political question grounds and hold that a challenge to the appropriation of tax revenue to the OHA does not raise a nonjusticiable political question. We therefore affirm in part, reverse in part, and remand.
I. BACKGROUND
A. Historical Context
After the arrival of Captain Cook in 1778, the western world became increasingly interested in the commercial potential of the Hawaiian Islands. The nineteenth century saw a steady rise in American and European involvement in the islands’ political and economic affairs. As the resistance of the native Hawaiian government mounted, American com- mеrcial interests eventually succeeded, with the complicity of the U.S. military, in overthrowing the Hawaiian monarchy and establishing a provisional government under the title of the Republic of Hawaii. See Rice , 528 U.S. at 500-05.
In 1898, President McKinley signed a Joint Resolution to annex the Hawaiian Islands as a territory of the United States. 30 Stat. 750. This resolution, commonly referred to as the Newlands Resolution, provided that the Republic of Hawaii ceded all public lands to the United States and that revenues from the lands were to be “used solely for the benefit of the inhabitants of the Hawaiian Islands for educational and other public purposes.” Id . Two years later, the Hawaiian Organic Act established the Territory of Hawaii and put the ceded lands in the control of the Territory of Hawaii “until otherwise provided for by Congress.” Act of Apr. 30, 1900, ch. 339, § 91, 31 Stat. 159.
B. The Public Land Trust and the Hawaiian Homes Commission Act
Shortly after the establishment of the Territory, Congress “became concerned with the condition of the native Hawaiian people.” Rice , 528 U.S. at 507. Declaring its intent to “[e]stablish[ ] a permanent land base for the beneficial use of native Hawaiians,” Cоngress enacted the Hawaiian Homes Commission Act, 1920. Act of July 9, 1921, ch. 42, § 101(b)(1), 42 Stat. 108 (“HHCA”). The HHCA set aside 200,000 acres of lands previously ceded to the United States for the creation of loans and leases to benefit native Hawai- ians. These lands were to be leased exclusively, including by transfer, to native Hawaiians for a term of 99 years at a nomi- nal rate of one dollar per year. Id. § 208(1), (2) & (5). The HHCA defines “native Hawaiian” as “any descendant of not less than one-half part of the blood of the races inhabiting the Hawaiian Islands previous to 1778.” Id. § 201(7).
In 1959, Hawaii became the 50th State in the union. Under the Hawaii Statehood Admission Act, Congress required Hawaii to incorporate the HHCA into its state Constitution, with the United States retaining authority to approve any changes to the eligibility requirements for the HHCA leases. Act of March 18, 1959, Pub. L. No. 86-3, § 4, 73 Stat. 5 (“Admission Act”). See H AW . C ONST . art. XII, §§ 1-3. In return, the United States granted Hawaii title to all public lands within the state, save a small portion reserved for use of the Federal Government. Id. § 5(b)-(d), 73 Stat. 5. The Admission Act further declared that the lands, “together with the proceeds from the sale or other disposition of any such lands and the inсome therefrom, shall be held by [the State] as a public trust for the support of the public schools, . . . the conditions of native Hawaiians” and other purposes. § 5(f), 73 Stat. 6. The land granted to Hawaii included the 200,000 acres previously set aside under the HHCA and an additional 1.2 million acres.
The Hawaii Constitution expressly adopted the HHCA and declared that “the spirit of the Hawaiian Homes Commission Act looking to the continuance of the Hawaiian homes proj- ects for the further rehabilitation of the Hawaiian race shall be faithfully carried out.” H AW . C ONST . art. XII, § 2. Because the HHCA’s purposes include support of public education, the Constitution also provides that lands granted to Hawaii under the Admission Act will be held in “public trust for native Hawaiians and the general public.” § 4; see Arakaki v. Hawaii , 314 F.3d 1091, 1093 (9th Cir. 2002).
The HHCA established a Department of Hawaiian Home Lands (“DHHL”), to be headed by an executive board known as the Hawaiian Homes Commission (“HHC”). Act of July 9, 1921, ch. 42, § 202(a), 42 Stat. 108. By statute Hawaii created both the Department of Hawaiian Home Lands and the Hawaiian Homes Commission. Together, DHHL/HHC administer the 200,000 acres set aside by the HHCA, and DHHL/HHC’s beneficiaries are limited to “native Hawai- ians,” as defined in the Act. The DHHL is funded in substan- tial part by state revenue; although the record is not clear on this point, this revenue likely derives from both tax and non- tax sources.
C. The Office of Hawaiian Affairs
In 1978, Hawaii amended its Constitution to establish the Office of Hawaiian Affairs to “ ‘provide Hawaiians the right to determine the priorities which will effectuate the better- ment of their condition and welfare and promote the protec- tion and preservation of the Hawaiian race, and . . . [to] unite Hawaiians as a people.’ ” Rice , 528 U.S. at 508 (quoting 1 Proceedings of the Constitutional Convention of Hawaii of 1978, Committee of the Whole Rep. No. 13, p. 1018 (1980)). OHA holds title to all property “held in trust for native Hawaiians and Hawaiians,” except for the 200,000 acres administered by DHHL/HHC; OHA thus controls the 1.2 mil- lion acres ceded by the United States in the Admission Act. The term “native Hawaiians” has the same blood quantum requirement as under the HHCA; by contrast, the term “Ha- waiians” is broader and simply refers to any persons descended from inhabitants of the Hawaiian Islands prior to 1778. H AW . R EV . S TAT . § 10-2. OHA’s statutory purposes include “[a]ssessing the policies and practices of othеr agen- cies impacting on native Hawaiians and Hawaiians,” “con- ducting advocacy efforts for native Hawaiians and Hawaiians,” “[a]pplying for, receiving, and disbursing, grants and donations from all sources for native Hawaiian and Hawaiian programs and services,” and “[s]erving as a recepta- cle for reparations.” H AW . R EV . S TAT . § 10-3(4)-(6).
OHA administers funds received from two principal sources. First, OHA receives a 20 percent share of any reve- nue generated by the 1.2 million acres of lands held in public trust. H AW . R EV . S TAT . § 10-13.5 (1993). Second, OHA receives revenue from the state general fund, which derives from tax revenue and other, non-tax, sources.
D. The Proceedings
The Plaintiffs (some of whom qualify as “Hawaiians”) allege that they are citizens of Hawaii, taxpayers of the state of Hawaii and of the United States, and beneficiaries of a pub- lic land trust created in 1898. The Complaint alleges three causes of action. First, Plaintiffs allege that the various pro- grams of the OHA and DHHL/HHC violate the Equal Protec- tion Clause of the Fourteenth Amendment and the equal protection component of the Due Process Clause of the Fifth Amendment. Seсond, they make these same allegations under 42 U.S.C. § 1983. Third, they claim that the administration of the OHA and the DHHL/HHC constitutes a breach of the pub- lic land trust.
The district court dismissed Plaintiffs’ claims on grounds of standing and political question. With respect to the DHHL/ HHC, the court ruled that the United States was an indispens- able party to the lease eligibility requirements, but that Plain- tiffs had no standing to sue the United States. Arakaki IV, 299 F. Supp. 2d at 1120-25. Because “any challenge to the lessee requirements of the Hawaiian Home Lands lease program set up by the HHCA, a state law, necessarily involves a challenge to the Admission Act,” all claims against the DHHL/HHC were dismissed. at 1126, 1127.
The district court took a slightly different route with respect
to OHA. The court dismissed the breach of trust claim on the
ground that Plaintiffs had not pleaded a breach of trust claim
that is cognizable under the common law of trusts.
Arakaki
II,
Plaintiffs appeal the dismissal of all their claims.
II. STANDARD OF REVIEW
Standing is a legal issue subject to
de novo
review.
Bruce
v. United States
,
III. PLAINTIFFS’ STANDING TO CHALLENGE
THE DHHL/HHC LEASES
Plaintiffs claim standing to challenge the DHHL/HHC leases as land trust beneficiaries, and as state taxpayers. We find that neither theory confers standing to challenge the lease requirements or the appropriation of state revenue in support thereof. The district properly dismissed all claims against the DHHL/HHC and the United States.
A. Plaintiffs’ Standing as Land Trust Beneficiaries
Plaintiffs challenge the public lands trust administered by DHHL/HHC because it prefers native Hawaiians in the lease eligibility criteria for the 200,000 acres set aside in the HHCA and incorporated into the Hawaii Constitution through the Admission Act. The Plaintiffs argue that as members of the class of “native Hawaiians and general public,” H AW . C ONST . art. XII, § 4, they are trust beneficiaries, and may sue the trustee when the trustee’s actions violate the law. See R ESTATEMENT (S ECOND ) OF T RUSTS §§ 166, 214. Plaintiffs allege that the trustees—including DHHL/HHC and the United States—have enforced the provisions of the trust in violation of the Fifth and Fourteenth Amendments.
1. The United States as Trustee Plaintiffs argue that the trust obligations of the United States arise through two acts, the Newlands Resolution and the Admission Act. Plaintiffs claim the trust was first estab- lished in 1898 by the Newlands Resolution with the United States as trustee. Congress, according to Plaintiffs, then vio- lated its duties as trustee by discriminating on the basis of race when it enacted the HHCA in 1921 and again in the Admission Act when it required Hawaii to incorporate the HHCA into its Constitution. Alternatively, Plaintiffs argue that the United States became a trustee as a result of the Admission Act. [1]
The history of the land trust does not support either of
Plaintiffs’ theories. The United States is not currently a trustee
of the lands in question by virtue of either the Newlands Res-
olution or the Admission Act. The Newlands Resolution
recited that the Government of the Republic of Hawaii ceded
[1]
The district court concluded that Plaintiffs had waived the Newlands
Resolution theory, and addressed only the Admission Act theory.
Arakaki
II,
“the absolute fee and ownership of all public Government, or Crown lands.” Newlands Resolution, 30 Stat. 750 (1898). It further provided that existing U.S. laws regarding public lands would not apply to Hawaiian lands, but that Congress “shall enact special laws for their management and disposition: Pro- vided , That all revenue from or proceeds of the same . . . shall be used solely for the benefit of the inhabitants of the Hawai- ian Islands for educational and other public purposes.” Id. Although this passage did not specifically use the word “trust,” the Attorney General of the United States subse- quently interpreted it “to subject the public lands in Hawaii to a special trust.” Hawaii — Public Lands , 22 Op. Att’y Gen. 574, 576 (1899).
Assuming, arguendo , that the Attorney General was right to construe the Newlands Resolution as establishing a trust, and assuming further that the United States became a trustee, the United States’ status as trustee was expressly subject to future revision. The Resolution specifically provides that “the United Stаtes shall enact special laws for [the] management and disposition” of public lands. The Attorney General con- strued this provision as “vest[ing] in Congress the exclusive right, by special enactment, to provide for the disposition of public lands in Hawaii.” The Newlands Resolution thus contemplated that Congress would enact subsequent rules to govern the ceded lands. Congress enacted such rules in the HHCA and the
Admission Act. Any trust obligation the United States assumed in the Newlands Resolution for the lands at issue here was extinguished by Congress when it created the DHHL/HHC in the HHCA and granted it control of defined “available lands.” Act of July 9, 1921, ch. 42, §§ 202, 204, and 207; s ee id. § 204(a) (“Upon the passage of this Act, all available lands shall immediately assume the status of Hawai- ian home lands and be under the control of the department to be used and disposed of in accordance with the provisions of this Act.”). Any lingering doubt over the United States’ role as trustee was eliminated entirely in the Admission Act when the United States “grant[ed] to the State of Hawaii, effective upon its admission in the Union, the United States’ title to all the public lands and other public property, and to all lands defined as ‘available lands’ by section 203 of the Hawaiian Homes Commission Act . . . title which is held by the United States immediately prior to its admission into the Union.” Pub. L. No. 86-3, § 5(b), 73 Stat. 4. Our discussion here also resolves Plaintiffs’ claim that
the Admission Act established the United States’ obligations
as a trustee. The Admission Act unambiguously requires that
land be held in public trust, but by the State of Hawaii, not the
United States. Nothing in the Admission Act suggests that the
United States would serve as a co-trustee with the State. Nor
does the fact that the United States must consent to changes
in the qualifications of lessees under the trust make the United
States a co-trustee.
See
Pub. L. No. 86-3, § 4, 73 Stat. 4. Con-
gress might have made the United States a co-trustee; instead
it reserved to the United States the right to bring suit for
breach of trust,
id.
§ 5(f), a provision at odds with the sugges-
tion that the United States remains a trustee. We conclude, as
we noted in
Keaukaha-Panaewa Cmty. Ass’n v. Hawaiian
Homes Comm’n
,
2. The United States as an Indispensable Party Although the United States cannot be sued on Plaintiffs’ trust beneficiary theory, Plaintiffs nevertheless argue that they may at least sue the state defеndants on the same theory. Plaintiffs point to several cases in which we have held that native Hawaiians, as trust beneficiaries, could bring suit under 42 U.S.C. § 1983 against the State to enforce the terms of the trust. E.g. , Price v. Akaka , 928 F.2d 824 (9th Cir. 1990); Keaukaha-Panaewa Cmty. Ass’n v. Hawaiian Homes Comm’n , 739 F.2d 1467 (9th Cir. 1984); s ee also Price v. Akaka , 3 F.3d 1220, 1223-25 (9th Cir. 1993). Those cases involved claims that the state was improperly administering the trust and sought to enforce the trust’s terms.
We believe that this argument is disposed of easily. Those cases differ from the present challenge in a fundamental way: although those previous § 1983 cases have involved suits to enforce the express terms of the trust, this suit, by contrast, asks the court to prohibit the enforcement of a trust provision. That is, Plaintiffs now raise a § 1983 claim that is unique in that it does not seek to enforce the substantive terms of the trust, but instead challenges at least one of those terms as con- stitutionally unenforceable .
[3] We have recently held that in any challenge to the enforceability of the lease eligibility requirements, the United States is an indispensable party. In Carroll v. Nakatani , 342 F.3d 934 (9th Cir. 2003), a non-native Hawaiian citizen chal- lenged the homestead lease program administered by DHHL/ HHC. The plaintiff sued the relevant state actors, but failed to sue the United States. We held that Sectiоn 4 of the Admis- sions Act “expressly reserves to the United States that no changes in the qualifications of the lessees may be made with- out its consent.” Carroll , 342 F.3d at 944. We reasoned that because the qualifications for the DHHL/HHC leases cannot be modified without the United States’ approval, the United States is an indispensable party to any lawsuit challenging the DHHL/HHC leases, and the Plaintiff’s failure to sue the United States meant that his injury was not redressable. at 944. Here, unlike in Carroll , Plaintiffs properly named the
United States as a party. Carroll ’s logic nonetheless applies. Plaintiffs lack standing to sue the United States, but the United States is an indispensable party to any challenge to the lease eligibility requirements. Plaintiffs therefore cannot maintain their challenge to the lease eligibility requirements against the State. Accordingly, the district court properly dis- missed the Plaintiffs’ trust beneficiary claim against the state defendants.
B. Plaintiff’s Standing As State Taxpayers
Plaintiffs also challenge the DHHL/HHC lease eligibility programs in their capacity as state taxpayers. The question is whether our decision in Carroll bars Plaintiffs’ equal protec- tion challenge in their capacity as taxpayers, just as it barred Plaintiffs’ suit in their capacity as trust benefiсiaries. In par- ticular, we must decide whether Plaintiffs have standing to challenge Hawaii’s spending of tax revenues on the lease pro- gram. [2] This is a more complicated question.
The standing doctrine, like other Article III doctrines con-
cerning justiciability, ensures that a plaintiff’s claims arise in
a “concrete factual context” appropriate to judicial resolution.
Valley Forge Christian Coll. v. Ams. United For Separation
of Church & State, Inc.
,
plained of, and that the injury will likely be redressed by a
favorable decision.
United States v. Hays
,
Plaintiffs have alleged that Hawaii has supported the lease
program through tax revenues, a point that Hawaii does not
dispute.
Arakaki
II,
Plaintiffs’ taxpayer-based claims might be construed as a limited challenge to the lease program: Plaintiffs challenge the lease program to the extent that Hawaii has—independent of any federal obligation, including the Admission Act— engaged in taxing and spending in support of the DHHL/HHC program. Under this theory, unlike their trust beneficiary the- ory, Plaintiffs would not challenge the lease eligibility requirements directly, nor would they implicate any substan- tial rights belonging to the United States. Thus, Plaintiffs might argue, even if they cannot seek to enjoin the native Hawaiians-only rule directly, they can seek to enjoin furthеr state funding of a provision that allegedly violates the Equal Protection Clause. Plaintiffs’ remedy, presumably, would be an injunction against spending state tax revenues, but not an order directing changes in the lease criteria.
[5]
Plaintiffs’ theory, though game, ultimately fails under
Carroll
. The only ground Plaintiffs have alleged for enjoining
the state from spending is that the spending is for purposes
prohibited by the Equal Protection Clause. Any remedy that
Plaintiffs seek—for example, an injunction against expendi-
ture of tax revenues for the lease program—demands that the
district court decide whether the lease eligibility criteria are
constitutional. The lease criteria are found in the HHCA
which is adopted by Article XII of the Hawaii Constitution.
We held in
Carroll
, however, that “Article XII of the Hawai-
ian Constitution cannot be declared unconstitutional without
holding [Section 4] of the Admissions Act unconstitutional.”
Carroll
,
United States. They claim no status that would distinguish
them from any number of other persons who also do not qual-
ify for the Hawaiian Home Lands leases. The Court has “re-
peatedly refused to recognize a generalized grievance against
allegedly illegal government conduct as sufficient for stand-
ing.”
Hays
,
IV. PLAINTIFFS’ STANDING TO CHALLENGE
OHA’S PROGRAMS
As with DHHL/HHC, Plaintiffs allege two theories of standing to challenge OHA: they challenge the appropriation of state tax revenue based on their status as state taxpayers, and they challenge the appropriation of trust revenue to OHA based on their alleged status as trust beneficiaries. Relying in large measure on our decision in Hoohuli v. Ariyoshi , 741 F.2d 1169 (9th Cir. 1984), the district court held that Plaintiffs had standing to sue OHA as state taxpayers. Arakaki II, 299 F. Supp. 2d at 1094-98. The court further held, however, that Plaintiffs lacked standing to challenge state funding of OHA that did not originate in taxes, specifically, any revenue that OHA received from lease rentals, settlements, or state bonds. Id. at 1100-01. With respect to the trust revenue claim, the district court dismissed the breach of trust claim on the ground that Plaintiffs had not pleaded a trust claim that was cognizable under the common law of trusts. at 1103.
OHA contends that the district court erred because our prior decision in Hoohuli has been effectively overruled by ASARCO Inc. v. Kadish , 490 U.S. 605 (1989), and because the United States is an indispensable party under Carroll . Plaintiffs allege that the district court erred by restricting the scope of their challenge to OHA programs directly funded by taxes.
We address each of these contentions in turn. We conclude that Hoohuli remains valid law in this circuit and that the United States is not an indispensable party to the suit chal- lenging the appropriation of state tax revenue. Accordingly, Plaintiffs have standing as state taxpayers to challenge the appropriation of state revenue to OHA. We agree with the dis- trict court, however, that Plaintiffs’ state taxpayer standing limits their claims to revenue that derives directly from taxes. Finally, we conclude, as we did in the prior section, that Plaintiffs cannot prevail on their trust beneficiary theory of standing because the United States remains an indispensable party to a suit challenging the trust, and Plaintiffs have no standing to sue the United States.
A. Plaintiffs’ State Taxpayer Standing
1. The Vitality of Hoohuli In Hoohuli , residents of Hawaii and a taxpayers’ group brought suit under 42 U.S.C. § 1983 for damages and injunc- tive relief to challengе programs administered by OHA to the extent those programs favored “Hawaiians.” 741 F.2d at 1172. We held that at least some of the individual plaintiffs had standing to seek to enjoin the “appropriating, transferring, and spending” of taxpayers’ money from the state treasury’s general fund. Id. at 1180. The plaintiffs had alleged that they had “ ‘been burdened with the necessity to provide more taxes to support [the class of “Hawaiians”]’ ” and that this was suf- ficient to sustain a “ ‘good-faith pocketbook action’ set forth in Doremus [ v. Board of Education , 342 U.S. 429, 434 (1952)].”
Conceding that
Hoohuli
controls this case unless there is an
intervening change in the law, OHA argues that the Supreme
Court’s decision in
ASARCO
has effectively overruled
Hoo-
huli
.
See Price v. Akaka
, 3 F.3d 1220, 1224 (9th Cir. 1993)
(addressing an analogous argument that an intervening
Supreme Court decision overruled our precedent). In
ASARCO
, Arizona taxpayers brought suit in Arizona state
court to enjoin a state law governing mineral leases on state
lands. The taxpayer plaintiffs alleged that the state lands had
been granted to Arizona by the United States when it acquired
statehood and that the statute violated the terms Congress
specified for the disposal of lands granted by the U.S. to Ari-
zona. Reviewing a judgment of the Arizona Supreme Court,
the U.S. Supreme Court considered “whether, under federal
standards, the case was nonjusticiable at its outset because the
original plaintiffs lacked standing to sue.” 490 U.S. at 612.
Four members of the Court
[3]
held that if the plaintiffs had
brought the suit in federal court, they would not have had
standing by virtue of their status as state taxpayers. They
noted that “[a]s an ordinary matter, suits premised on federal
taxpayer status are not cognizable in the federal courts,” but
that “the same conclusion may not hold for municipal taxpay-
ers.”
Id.
at 613 (Kennedy, J.). They observed that it has “lik-
ened state taxpayers to federal taxpayers, and thus we have
refused to confer standing upon a state taxpayer absent a
showing of ‘direct injury,’ pecuniary or otherwise.” at
613-14 (quoting
Doremus
, 342 U.S. at 434). Ultimately the
Court concluded that, although the plaintiffs (respondents in
the Supreme Court) would not have had standing to com-
mence suit in federal court, the petitioner-defendants had
standing to seek review in the Supreme Court of a judgment
[3]
Although we have occasionally referred to that portion of Justice Ken-
nedy’s opinion, Part II.B.1, as a plurality,
see, e.g., Graham v. Federal
Emergency Mgmt. Agency
,
from Arizona courts that are not themselves bound by federal standing rules. Id. at 617-19. Four justices argued that the question of the standing of the state taxpayers was “ ‘irrele- vant’ when the petitioners were defendants below, and the plurality’s discussion was therefore ‘unnecessary.’ ” at 633-34 (Brennan, J., concurring in part and concurring in the judgment).
Whether Justice Kennedy’s opinion is dictum or not, that
portion of his opinion on state taxpayer standing is not the
opinion of the Supreme Court.
See, e.g., Marks v. United
States
,
The state defendants point to our statement in
Bell v. City
of Kellogg
that “[t]he same constitutional standing principles
apply to those suing in federal court as state taxpayers” as evi-
dence that we have embraced Justice Kennedy’s view. 922
F.2d 1418, 1423 (9th Cir. 1991) (citing
ASARCO
,
2. The United States as an Indispensable Party OHA argues that even if Plaintiffs have taxpayer standing, under Carroll the United States is also an indispensable party to any equal protection challenge to its programs. The district court rejected the argument on the ground that DHHL/HHC and OHA have distinct origins. In contrast to DHHL/HHC, “[n]othing in the Admission Act requires the creation of OHA or governs OHA’s actions.” Arakaki IV, 299 F. Supp. 2d at 1127. The district court is correct with respect to OHA’s
expenditure of tax revenue. OHA was created nearly twenty years after Hawaii’s admission to the union. In 1978, Hawaii amended its Constitution to add Sections 5 and 6—creating OHA and defining its duties—to Article XII. See H AW . C ONST . art. XII, §§ 5-6. The Constitution does not provide for OHA’s funding, which is provided by statute. See , e.g. , H AW . R EV . S TAT . §§ 10-3(1) (“A pro rata portion of all funds derived from the public land trust shall be funded in an amount to be determined by the legislature.”), 10-13.5 (“Twenty per cent of all funds derived from the public land trust . . . shall be expended by [OHA] . . . .”). Unlike the lease eligibility requirement imposed by the HHCA and adminis- tered by DHHL/HHC, the United States has no right to con- sent or withhold consent to the creation of OHA or its administration of programs for native Hawaiians or Hawai- ians. Because Plaintiffs can prevail against OHA “without holding [Section 4] of the Admissions Act unconstitutional,” nothing “requires the participation of . . . the United States.” Carroll , 342 F.3d at 944. We decline to extend Carroll to claims against OHA concerning tax revenue.
3. Limiting Plaintiffs’ State Taxpayer Claims Plaintiffs contend that the district court erred when it
denied Plaintiffs’ right to “seek invalidation of . . . OHA
in
toto
.”
Arakaki
IV,
The issue Plaintiffs raise is this: Does a taxpayer have standing to challenge government spending if the funds actu- ally challenged did not accrue as a result of taxes? While we think that to state the question is nearly to answer it, the par- ties have not located any case directly on point. The answer, nevertheless, is implicit in the Supreme Court’s limited recog- nition of taxpayer standing.
As we have discussed, in order to satisfy the case or contro-
versy provision of Article III, a federal plaintiff must demon-
strate an injury in fact, a causal relationship between the
injury and the conduct complained of, and that the injury can
be redressed.
Lujan
,
“a taxpayer will be a proper party to allege the unconstitution-
ality only of exercises of congressional power under the tax-
ing and spending clause of Art. I, § 8, of the Constitution. It
will not be sufficient to allege an incidental expenditure of tax
funds in the administration of an essentially regulatory stat-
ute.” at 102. A taxpayer must demonstrate “a measurable
appropriation or disbursement of . . . funds occasioned solely
by the activities complained of.”
Doremus
, 342 U.S. at 434.
In a series of cases, the Court rejected taxpayer standing in
circumstances in which no tax expenditures were involved,
even though the challenged program, if found unconstitu-
tional, might have saved the public fisc. In
Valley Forge Col-
lege
, for example, the plaintiffs complained of a transfer of
surplus government property to a religiously affiliated col-
lege. The Court held that the plaintiffs lacked standing as fed-
eral taxpayers: “the property transfer about which [plaintiffs]
complain was not an exercise of authority conferred by the
Taxing and Spending Clause . . . [but] an evident exercise of
Congress’ power under the Property Clause . . . . Respondents
do not dispute this conclusion, and it is decisive of any claim
of taxpayer standing.”
we held that taxpayers lacked standing to challenge the prac-
tice of sponsoring prayers at high school graduation because
“Doe identifie[d] no tax dollars that defendants spent solely
on the graduation prayer, which is the only activity that she
challenges.”
If we permitted Plaintiffs to challenge OHA’s programs
across the board, irrespective of the origin of the funding, it
would greatly expand the effect of their taxpayer standing to
programs that they would not otherwise have standing to chal-
lenge. Given the care with which the Supreme Court has
looked at taxpayer injury and redressability, we cannot go so
far.
See, e.g., Allen
,
Plaintiffs object to the district court’s disallowing its stand- ing to challenge three sources of OHA funding: (1) funds received from the Hawaiian home lands trust, (2) funds received through a settlement of prior claims, and (3) bonds issued to secure the settlement. By law twenty percent of “all funds derived from the public land trust” are dedicated to the use of OHA. H AW . R EV . S TAT . § 10-13.5. The funds OHA receives from the trust, which are apparently largely rents, are first paid into Hawaii’s General Fund and then paid to OHA. See Arakaki II, 299 F. Supp. 2d at 1100. The district court found that this was simply an “administrative ‘pass-through’ ” and concluded that because these are dedicated funds, the fact that the funds pass through the General Fund is irrelevant. We agree with the district court that Plaintiffs, as taxpayers, may not challenge the expenditure of such non-tax revenues.
Plaintiffs’ challenge to funds paid in settlement is more complicated. In 1993, the legislature appropriated more than $135 million to OHA’s trust fund to settle past claims. The district court questioned whether, as taxpayers, Plaintiffs could challenge the settlement since it would “nullify[ ] a set- tlement reached years earlier” and “would be tantamount to having the court review the wisdom, at any time, of every leg- islative decision, regardless of when made, to settle a case rather than to litigate it.” Id . at 1100 & n.10. The district court’s concerns are well-stated, but we do not need to go so far as to hold that taxpayers may never challenge a legislature-ordained settlement.
The provenance of the settlement at issue here is quite unusual. As we have pointed out, when Hawaii created the OHA, it allocated to OHA twenty percent of “all funds derived” from the public land trust. H AW . R EV . S TAT . § 10- 13.5. The statute, however, did not define the term “funds,” and it was not clear what OHA was entitled to receivе. In 1983, OHA’s trustees filed suit against various state officials, claiming that OHA had not received its twenty percent share of “funds,” specifically settlements concerning lands in the public trust. On appeal, the Hawaii Supreme Court ruled that the term “funds” was so ambiguous that the court could not resolve the intra-government dispute, and it declined judg- ment because of the state’s political question doctrine. Trust- ees of Office of Hawaiian Affairs v. Yamasaki , 174-75, 737 P. 2d 446, 458 (Haw. 1987). In response, the Hawaii Legislature amended Section 10-13.5, substituting the word “revenue” for “funds.” Act 304, § 7, H AW . S ESS . L AWS 947, 951 (1990). In 1993, the legislature appropriated $136.5 million to OHA in settlement of OHA’s claims from 1980 through 1991. § 8, H AW . S ESS . L AWS at 951; Act 35, § 3, H AW . S ESS . L AWS 41 (1993). [4] Whatever the revenue origins of the $136.5 million allocated in 1993, the legislature paid these funds as compen- sation for revenues that OHA did not receive between 1980- 91 that were generated by the public land trust. Since the orig- inal revenues were not tax-based, Plaintiffs lack standing to challenge these expenditures. For similar reasons, Plaintiffs cannot challenge the
bonds issued by the state to fund these settlements. Whether some tax monies are used to service or repay the bonds, the bonds fund a settlement of land revenues owed to OHA. We affirm the district court’s ruling that Plaintiffs may not chal- [4] In Office of Hawaiian Affairs v. State , 31 P.3d 901 (Haw. 2001), the Hawaii Supreme Court ruled that the 1990 amendments to Section 10-13.5 conflicted with federal law. Under Hawaii law, Section 10-13.5 was reverted to its pre-amendment language. Thus, the current version of Sec- tion 10-13.5 again reads “funds.”
lenge these funds paid in settlement and financed through general bonds.
B. Plaintiffs’ Trust Beneficiary Standing
[14] Plaintiffs allege, as an independent basis for standing, that as trust beneficiaries they may sue OHA because OHA receives trust revenues. Although the United States is not an indispensable party to a challenge to the appropriation of tax revenue, see Part IV.A.2, supra , this is not true with respect to OHA’s receipt of trust revenue. We have previously held that the expenditure of trust revenue is governed by the Admission Act. Price v. Akaka , 928 F.2d 824, 827 (9th Cir. 1990). Any challenge to the expenditure of trust revenue brought by alleged trust beneficiaries must challenge the sub- stantive terms of the trust, which are found in the Admission Act. For the reasons we explained in Part III.A.2, supra, the United States is an indispensable party to any challenge to the Admission Act. Accordingly, although the United States is not an indispensable party with respect to challenges to OHA’s expenditure of tax revenue, it remains indispensable with respect to challenges to the expenditure of trust revenue. Plaintiffs’ attempt to challenge OHA’s expenditure of trust revenue thus suffers from the same fatal flaw as its chal- lenge to the DHHL/HHC lease eligibility requirements. The United States is an indispensable party to the challenge to the expenditure of trust revenue, and yet Plaintiffs cannot estab- lish standing to sue the United States either as taxpayers or as trust beneficiaries. See Parts III.A.2 and III.B., supra . Plain- tiffs therefore cannot proceed with that claim. We do not reach the issue whether Plaintiffs’ breach of trust claim is oth- erwise cognizable under the common law of trusts, which was the basis of the district court’s dismissal of the breach of trust claim against OHA. Rather, we affirm the dismissal on the alternative ground that Plaintiffs cannot demonstrate standing to sue an indispensable party.
V. POLITICAL QUESTION
The remaining question is whether Plaintiffs’ surviving
cause of action — namely, that the appropriation of state tax
revenue to OHA violates the Equal Protection Clause of the
Fourteenth Amendment — presents a nonjusticiable political
question. The district court reasoned that in order to rule on
Plaintiffs’ equal protection claims, the court would have to
determine what level of scrutiny to apply.
Compare Grutter
v. Bollinger
, 539 U.S. 306, 328-33 (2003) (applying strict
scrutiny to uphold race-conscious admissions policy at state
university law school),
and Gratz v. Bollinger
,
Prominent on the surface of any case held to involve a political question is found [1] a textually demon- strable constitutional commitment of the issue to a coordinate political department; or [2] a lack of judi- cially discoverable and manageable standards for resolving it; or [3] the impossibility of deciding without an initial policy determination of a kind clearly for nonjudicial discretion; or [4] the impossi- bility of a court’s undertaking independent resolution without expressing lack of the respect due coordinate branches of government; or [5] an unusual need for unquestioning adherence to a political decision already made; or [6] the potentiality of embarrass- ment from multifarious pronouncements by various departments on one question.
369 U.S. 186, 217 (1962);
see Alperin v. Vatican Bank
, 410
F.3d 532, 537-40 (9th Cir. 2005);
EEOC v. Peabody W. Coal
Co.
,
trine in the context of a challenge to the executive’s failure to
recognize Hawaiians as federal Indian tribes in
Kahawaiolaa
,
In order to stay our hand in this case, we must determine that the resolution of Plaintiffs’ equal protection claims against OHA would interfere with the constitutional duties of one of the political branches, whether that duty has been exer- cised or not. The district court and the state defendants locate that “textually demonstrable constitutional commitment of the issue” in Article I, Section 8, Clause 3 of the U.S. Constitu- tion: “The Congress shall have Power . . . To regulate Com- merce . . . with the Indian Tribes.” The Court has observed that “Congress possesses plenary power over Indian affairs, including the power to modify or eliminate tribal rights.” South Dakota v. Yankton Sioux Tribe , 522 U.S. 329, 343 (1998). Thus, the “questions whether, to what extent, and for what time [Indians] shall be recognized and dealt with as dependent tribes requiring the guardianship and protection of the United States are to be determined by Congress, and not by the courts.” United States v. Sandoval , 231 U.S. 28, 46 (1913).
Here, no party seeks to compel Congress to recognize the tribal status of Hawaiians. Instead, OHA argues that if Con- gress has treated Hawaiians as a tribe, then under the author- ity of Mancari , OHA would have to demonstrate only a rational connection between its Hawaiian preferences and its programs. Plaintiffs argue that Congress’ failure, so far, to recognize Hawaiians’ tribal status does not prevent the courts from deciding whether OHA’s Hawaiian-preference violates the Equal Protection Clause of the Fourteenth Amendment. Effectively, the district court found that it could not rule on the equal protection claim until it could determine the appro- priate level of scrutiny, and it could not determine the level of scrutiny until Congress decided to grant or not to grant tribal status to Hawaiians. Nothing in the claims Plaintiffs have asserted or the
remedy they seek invites the district court to exercise powers reserved to Congress or to the President. The district court has not been asked to declare tribal status where Congress has declined. Instead, it is asked to interpret the implications of past congressional action or inaction for equal protection anal- ysis. Indeed, courts are frequently called upon to “scrutiniz[e] Indian legislation to determine whether it violates . . . equal protection.” Del. Tribal Bus. Comm. v. Weeks , 430 U.S. 73, 84 (1977). The fact that Congress enjoys “plenary power . . . in matters of Indian affairs ‘does not mean that all federal leg- islation concerning Indians is . . . immune from judicial scru- tiny.’ ” at 83-84 (quoting Brief of the Secretary of the Interior). In general, “the political question doctrine does not bar adjudication of a facial constitutional challenge even though Congress has plenary authority, and the executive has broad delegation, over Indian affairs.” Kahawaiolaa , 386 F.3d at 1276.
In the exercise of its power to regulate commerce with Indi-
ans and recognize their sovereign status, Congress might be
able to alter the relativе burdens of proof and persuasion
shouldered by Plaintiffs and OHA in this case.
[5]
But Congress
[5]
We couch this in the conditional because the Court in
Rice
suggested
that it remains “a matter of some dispute . . . whether Congress may treat
has no obligation to exercise its Article I, Section 8, Clause
3 powers in any particular way. That it has, so far, declined
to do so does not excuse the district court from hearing the
case. Congress does not have a constitutionally committed
power to set the level of scrutiny for those claiming native
American status; it has the constitutionally committed author-
ity to regulate affairs with native Americans, and the courts
then determine which level of scrutiny is warranted by Con-
gress’ action or inaction.
See, e.g., Three Affiliated Tribes of
Fort Berthold Reservation v. Wold Eng’g
,
Moreover, we note that even if Congress had treated Hawaiians or native Hawaiians as a tribe, the district court would still have to determine whether OHA’s classification was based on race or on tribal status. As we observed in Kahawaiolaa :
As Rice illustrates, an “Indian tribe” may be clas- sified as a “racial group” in particular instances . . . . We reject the notion that distinctions based on Indian or tribal status can never bе racial classifications subject to strict scrutiny. . . . Government discrimi- nation against Indians based on race or national ori- gin and not on membership or non-membership in tribal groups can be race discrimination subject to strict scrutiny.
the native Hawaiians as it does the Indian tribes.” 528 U.S. at 518. Like the Court, “[w]e can stay far off that difficult terrain” in this appeal. Id. at 519.
[18] The questions on which Plaintiffs have standing squarely and exclusively raise a Fourteenth Amendment claim. The courts must therefore determine the proper level of scrutiny. We do not require further action by Congress to inform that determination. To deny the federal courts their authority to adjudicate an equal protection claim simply because Congress expressed its intent with less than complete lucidity is to expand the political question doctrine beyond its historical limits. In doing so, it would restrict judicial author- ity in unprecedented ways; such an expansive interpretation subverts the very separation of powers that the political ques- tion doctrine is designed to protect. Although the Supreme Court was able to postpone consideration of those equal pro- tection questions of “considerable moment and difficulty,” Rice , 528 U.S. at 518-19, we do not have that luxury. We therefore remand to the district court the issue whether the expenditure of state tax revenue on OHA programs violates the Equal Protection Clause of the Fourteenth Amendment.
VI. PLAINTIFFS’ REMAINING MISCELLANEOUS
ARGUMENTS
Plaintiffs make several additional arguments on appeal, none of which is meritorious. Plaintiffs contend that the dis- trict court erred in striking its Counter Motion for Summary Judgment of December 15, 2003. The district court cited mul- tiple grounds in its December 16, 2003 unpublished Order for striking the motion, including: the motion was not a true counter motion because it raised numerous issues not raised in the motion which it purportedly countered; it was untimely; and the motion was not filed in the proper round of summary judgment rounds, as scheduled by the district court in a previ- ous order. We review for abuse of discretion challenges to pre-
trial management.
Navellier v. Sletten
,
[20]
Plaintiffs also appeal the district court’s May 5, 2004
unpublished Order awarding roughly $5300 in costs to select
defendants on the ground that imposing such costs will have
a “chilling effect” on civil rights litigation. We review an
award of costs for abuse of discretion.
Evanow v. M/V Nep-
tune
,
VII. CONCLUSION
The district court’s orders are variously affirmed or reversed as follows.
Arakaki I, 198 F. Supp. 2d 1165 (D. Haw. 2002), is affirmed in part and reversed in part. We affirm the court’s holding that Plaintiffs have standing to challenge the apрro- priation of state tax revenue to OHA. We reverse the holding that Plantiffs have standing as taxpayers to challenge the appropriation of tax revenue to DHHL/HHC. We affirm the denial of standing to challenge the settlement of past claims against OHA. We affirm the denial of standing to challenge the issuance of bonds and the denial of standing to challenge all other spending that does not originate in tax revenue. The remaining issues addressed in that order are not on appeal.
Arakaki II, 299 F. Supp. 2d 1090 (D. Haw. 2002), is affirmed in part and reversed in part. We affirm Plaintiffs’ standing to challenge the appropriation of state tax revenue to the OHA. We reverse the grant of standing to challenge the appropriation of tax revenue to DHHL/HHC. We affirm the denial of standing to sue as trust beneficiaries. We affirm the denial of the motion to dismiss the tax revenue claim against OHA under the political question doctrine. We reverse the denial of the motion to dismiss the tax revenue claim against DHHL/HHC. The remaining issues in that order are not on appeal.
Arakaki
III, 299 F. Supp. 2d 1107 (D. Haw. 2002), is
affirmed on different grounds.
Arakaki
IV, 299 F. Supp. 2d
1114 (D. Haw. 2003), and
Arakaki
V,
The parties shall bear their own costs on appeal. AFFIRMED IN PART, REVERSED IN PART, AND REMANDED.