In this consolidated appeal, Plaintiffs-Appellants Douglas Leone and Patricia A Perkins-Leone (Leones), as Trustees under that certain unrecorded Leone-Perkins Family Trust dated August 26, 1999, as amended, appeal from the Circuit Court of the Second Circuit’s (Circuit Court) June 5, 2009 Amended Final Judgment dismissing their inverse condemnation, equal protection, due process, and 42 U.S.C. § 1983 claims.
The Leones and Larsons (collectively, Appellants) argue that the Circuit Court erred in dismissing their claims for lack of subject matter jurisdiction on ripeness grounds. They also request that this court grant partial summary judgment against Defendants-Appellees County of Maui (Maui County) and Director of the Department of Planning of the County of Maui, William Spence (Director),
1. BACKGROUND
This appeal arises from Maui County’s troubled attempts to create a public park at Palauea Beach in Makena, Maui. The 1998 Kihei-Makena Community Plan (Community Plan) assigned the beach lots a “park” land use designation, which does not permit the construction of single-family residences. In 1996, the Maui County Council (County Council) adopted Resolution No. 96-121, authorizing the Mayor to acquire the Palauea Beach lots for the creation of a public park. At that time, Palauea Beach was “one of the last undeveloped leeward beaches on Maui,” and the County Council noted “an outpouring of community support” for the creation of a beach park.
In 1999, the County Council adopted Resolution No. 99-183, affirming its “official policy” to “preserve Palauea Beach in South Maui.” Despite the Mayor’s “appropriately raised concerns about the County’s present financial constraints,” the County Council urged the administration to acquire two of the Palauea Beach lots. Maui County purchased the two lots in January of 2000. However, it was unable to allocate sufficient funds to purchase the remaining seven lots, which were then sold to private individuals.
The Leones purchased Palauea Beach parcel 16 in February of 2000. The Larsons purchased Palauea Beach parcels 16 and 17 in December of 2000. Their properties are zoned “Hotel-Multifamily,” permitting a variety of economically beneficial uses, including single-family residences. However, these parcels are among nine Palauea Beach lots that are designated “park” in the Community Plan.
The Palauea Beach lots are also located in a “special management area” (SMA) under the Hawaii Coastal Zone Management Act (CZMA). See Hawai'i Revised Statutes (HRS) § 205A-22 (2001). The CZMA was enacted, pursuant to the federal Coastal Zone Management Act, to protect valuable shoreline and coastal resources by establishing heightened land use controls on developments within protected zones, or special management areas. HRS § 205A-21 (2001). The Legislature delegated responsibility for administering the SMA provisions to the county planning commissions or councils. HRS § 205A-22.
The CZMA imposes stringent permit requirements for “developments” within special management areas. HRS §§ 205A-28, 205A-26 (2001). The term “development” expressly excludes, inter alia, single-family residences, unless the relevant county authority finds the proposed construction may have a “cumulative impact, or a significant environmental or ecological effect on a special management area[.]” HRS § 205A-22 (2001 & Supp.2011). Three types of SMA permits are available, depending on the nature of the proposed development: minor use permits, major use permits, and emergency use permits. Id. The CZMA empowers the county authorities to adopt rules implementing procedures for issuing SMA permits. HRS § 205A-29(a) (2001).
(1) Is exempt from the requirements of this chapter because it is not a development pursuant to section 205A-22, HRS, as amended;
(2) Requires a special management area minor permit pursuant to section 205A-22, HRS, as amended, which shall be processed in accordance with section 12-202-14;
(3) Requires a special management area use permit pursuant to section 205A-22, HRS, as amended, which shall be processed in accordance with sections 12-202-13 and 12-202-15;
(4) Requires a special management area emergency permit pursuant to section 205A-22, HRS, as amended, which shall be processed in accordance with section 12-202-16; or
(5) Cannot be processed because the proposed action is not consistent with the county general plan, community plan, and zoning, unless a general plan, community plan, or zoning application for an appropriate amendment is processed concurrently with the SMA permit application.
SMA Rule 12—202—12(f) (emphasis added).
Appellants and other Palauea Beach lot owners sought to construct single-family residences on their respective properties. The Director, inter alia, initiated a process for changing the Community Plan designation from “park” to “residential.” Property owners, including Appellants, funded the requisite environmental assessment because Maui County was unable to do so. However, the Planning Commission refused to accept the environmental assessment and instead requested additional archaeological studies and historical narratives. Several commissioners advocated for prolonging the amendment process as a deliberate strategy to preserve the status quo—a de facto beach park on the privately-owned lots. As one commissioner explained:
So if we decide on no action on this thing then the whole beach would remain as it is now and they would not be able to build on the land that they own. Granted, we can’t buy it but if we say no you can’t develop it then we then have access to it, at least the beach.
This strategy would “allow the people of Maui to utilize [the] beach area” while preventing property owners from constructing homes. Another commissioner acknowledged that moving forward with the process would result in a loss of the “de facto parking that people are enjoying now” on the private lots and could force Maui County to use its own parcels for parking. At least one commissioner expressly sought to preserve the public’s illegal camping, which had resulted in littering, defecating, and parking on the private beach lots, bemoaning the landowners’ resort to hiring security guards to remove the trespassers.
Appellants nevertheless filed assessment applications under SMA Rule 12-202-12, seeking a determination that their proposed use is exempt from the SMA permit requirements. The Director rejected Appellants’ applications because, inter alia, the proposed use was inconsistent with the properties’ “park” designation in the Community Plan.
Appellants then filed inverse condemnation claims under article I, § 20 of the Hawai'i Constitution and the Fifth and Fourteenth Amendments to the United States Constitution, alleging that Maui County had engaged in regulatory takings by depriving their properties of any economically viable use.
The Circuit Court dismissed all claims in both eases for lack of subject matter jurisdiction on ripeness grounds. It concluded that the claims were unripe for adjudication because Appellants failed to exhaust administrative remedies, namely: (1) appealing the Director’s decision to the Planning Commission; (2) waiving assessment procedure and submitting an SMA permit application; and (3) seeking an amendment to the Community Plan to change the properties’ designation from “park” to “residential.” The court rejected Appellants’ contention that such remedies would be futile.
The Leones and Larsons timely filed notices of appeal.
II. POINTS ON APPEAL
Appellants’ core argument on appeal is that the Circuit Court erred in concluding their claims were unripe for adjudication. More specifically, Appellants raise the following points of error:
(1) The Circuit Court erred in concluding that they were required to exhaust all available administrative remedies;
(2) The Circuit Court erred in concluding that Appellants’ failure to appeal the Director’s determination to the Maui Planning Commission rendered their claims unripe; and
(3) The Circuit Court erred in concluding that Appellants’ failure to seek a community plan amendment rendered their claims unripe.
III. APPLICABLE STANDARD OF REVIEW
“It is axiomatic that ripeness is an issue of subject matter jurisdiction.” Kapuwai v. City & Cnty. of Honolulu, Dep’t of Parks & Recreation,
IV.DISCUSSION
The Circuit Court’s sole determination was that Appellants’ claims were not ripe and, therefore, the Circuit Court lacked subject matter jurisdiction. Accordingly, on this appeal, we will consider only that issue.
A. Inverse Condemnation and Regulatory Takings
The Fifth Amendment to the United States Constitution, made applicable to the states by the Fourteenth Amendment, provides, in relevant part, that “private property [shall not] be taken for public use, without just compensation.” Article I, § 20 of the Hawai'i Constitution likewise provides: “Private property shall not be taken or damaged for public use without just compensation.” Thus, a governmental body can take private property, but it is subject to the requirements of a “public purpose” and “just compensation” to the property owner. See, e.g., Lingle v. Chevron U.S.A. Inc.,
Within these constitutional parameters, the State of Hawai'i or any county may exercise the power of eminent domain by instituting proceedings for the condemnation of private property, as set forth in HRS Chapter 101 (Eminent Domain). Although not specifically provided by statute, an “inverse condemnation” proceeding is the means by which a property owner can seek to recover the value of property that has been taken by the government for public use without exercising the power of eminent domain. See Black’s Law Dictionary 332 (9th ed.2009) (defining “inverse” condemnation).
Until the United States Supreme Court’s decision in Pennsylvania Coal Co. v. Mahon,
The Supreme Court has recognized at least two categories of compensable regulatory takings: (1) where “regulations [ ] compel the property owner to suffer a physical ‘invasion’ of his property ... no matter how minute the intrusion”; and (2) “where regulation denies all economically beneficial or productive use of land.” Lucas v. South Carolina Coastal Council,
B. Ripeness
The Supreme Court has further held that, before a property owner may initiate a suit seeking compensation for a taking, the claim must be ripe. Williamson Cnty. Reg’l Planning Comm’n v. Hamilton Bank of Johnson City,
This finality requirement is rooted in the nature of the Takings Clause inquiry. Id. at 190-91,
Moreover, land use determinations often involve a high degree of discretion. Palazzolo,
C. Ripeness versus Exhaustion of Administrative Remedies
The Supreme Court in Williamson recognized the distinction between the ripeness doctrine and the exhaustion of administrative remedies. Williamson,
The question whether administrative remedies must be exhausted is conceptually distinct, however, from the question whether an administrative action must be final before it is judicially reviewable. While the policies underlying the two concepts often overlap, the finality requirement is concerned with whether the initial decisionmaker has arrived at a definitive position on the issue that inflicts an actual, concrete injury; the exhaustion requirement generally refers to administrative and judicial procedures by which an injured party may seek review of an adverse decision and obtain a remedy if the decision is found to be unlawful or otherwise inappropriate. Patsy concerned the latter, not the former.
The difference is best illustrated by comparing the procedure for seeking a variance with the procedures that, under Patsy, respondent would not be required to exhaust. While it appears that the State provides procedures by which an aggrieved property owner may seek a declaratory judgment regarding the validity of zoning and planning actions taken by county authorities ..., respondent would not be required to resort to those procedures before bringing its § 1983 action, because those procedures clearly are remedial. Similarly, respondent would not be required to appeal the Commission’s rejection of the preliminary plat to the Board of Zoning Appeals, because the Board was empowered, at most, to review that rejection, not to participate in the Commission’s decisionmaking.
Resort to those procedures would result in a judgment whether the Commission’s actions violated any of respondent’s rights. In contrast, resort to the procedure for obtaining variances would result in a conclusive determination by the Commission whether it would allow respondent to develop the subdivision in the manner respondent proposed. The Commission’s refusal to approve the preliminary plat does not determine that issue; it prevents respondent from developing its subdivision without obtaining the necessary variances, but leaves open the possibility that respondent may develop the subdivision according to its plat after obtaining the variances. In short, the Commission’s denial of approval does not conclusively determine whether respondent will be denied all reasonable beneficial use of its property, and therefore is not a final, reviewable decision.
Williamson,
Although perhaps less explicitly, Hawaii ease law is in accord. Under the exhaustion doctrine, “if an administrative remedy is provided by statute, a claimant must seek relief first from the administrative body before judicial relief is available.” Williams v. Aona,
Where landowners seek to challenge the decision of a land-use authority under the CZMA, HRS sections 91-14 and 205A-6(c) provide the mechanism for judicial review. See Kona Old,
On the other hand, where landowners do not challenge the substance of the decision of the land-use authority, but instead raise constitutional claims based on the effect of the decision, the doctrines of exhaustion and primary jurisdiction are not implicated. In such cases, the ripeness doctrine operates to “prevent courts, through avoidance of premature adjudication, from entangling themselves in abstract disagreements over administrative policies, and also to protect the agencies from judicial interference until an administrative decision has been formalized and its effects felt in a concrete way by the challenging parties.” Grace Bus. Dev. Corp. v. Kamikawa,
D. Application of the Ripeness Doctrine
Turning to the case at hand, we must decide whether the Director’s refusal to process Appellants’ assessment applications constituted final decisions regarding the application of the subject regulations to the properties at issue. Williamson,
1. The Director’s Decision Was a Final Decision
The parties dispute whether, under the applicable rules, an appeal from the Director’s decision to the Commission was available to Appellants in this case. Maui County cites SMA Rule 12-202-26, which provides that an “[a]ppeal of the director’s decision may be made to the commission.” Appellants contend, based on arguments of statutory construction, that the appeals process set forth in SMA Rule 12-202-26 applies to other parts of the SMA Rules, but that it does not apply to the Director’s decision, under SMA Rule 12-202-12, refusing to process Appellants’ assessment applications due to inconsistency with the Community Plan. We need not resolve this issue.
Maui County’s argument concerning ap-pealability to the Commission would be pertinent to whether an applicant had exhausted its administrative remedies prior to seeking judicial review of a decision by the Director, but it is of no consequence to the ripeness analysis applied to takings claims. The Williamson decision was crystal clear:
While the policies underlying the two concepts [ripeness and exhaustion] often overlap, the finality requirement is concerned with whether the initial deci-sionmaker has arrived at a definitive position on the issue that inflicts an actual, concrete injury; the exhaustion requirement generally refers to administrative and judicial procedures by which an injured party may seek review of an adverse decision and obtain a remedy if the decision is found to be unlawful or otherwise inappropriate.
Williamson,
The Supreme Court specifically rejected the proposition that the initial, concrete, decision must be appealed before a takings claim becomes ripe:
[Respondent would not be required to appeal the Commission’s rejection of the preliminary plat to the Board of Zoning Appeals, because the Board was empowered, at most, to review that rejection, not to participate in the Commission’s decision-making.
Id.
Accordingly, we conclude that Appellants were not required to appeal the Director’s decision that their assessment application could not be processed because “[t]he proposed Single-Family dwelling is inconsistent with the Community Plan.” The Director’s decision satisfied the finality requirement for ripeness by setting forth a definitive position regarding how Maui County will apply the regulations at issue to the particular land in question.
2. Amendment to the Community Plan
Maui County argues that Appellants failed to obtain a final decision regarding the application of the “park” use designation for their properties because they did not seek an amendment to the Community Plan to change the “park” designation. The County argues that a Community Plan amendment is essentially a “variance” from the Community Plan and, thus, as with the possibility of a variance in Williamson, the Director’s decision leaves open the possibility that Appellants may develop their properties after obtaining an amendment to the Community Plan. Cf. Williamson,
It is undisputed that, in Williamson, the Supreme Court held that the property owners’ claims were not ripe for adjudication because they had not availed themselves of the procedure for obtaining variances. See Williamson,
First, we must consider the nature of the Community Plan itself, as explicated by the Hawai'i Supreme Court in GATRI. The plaintiff in GATRI submitted an SMA minor permit application to the Director, seeking to build a 470 square foot snack shop on its property, which was zoned B-R Resort/Commercial, but designated “single-family residential” in the Community Plan.
The plaintiff in GATRI appealed the Director’s decision to the Circuit Court. Id. The Circuit Court reversed the Director’s decision and the Director appealed to the Hawai'i Supreme Court. Id. at 110-11,
In the second issue before it, the supreme court held that the Director did not err in his decision not to process GATRI’s application because it was inconsistent with the Community Plan, which in the County of Maui is a part of the general plan, and which contains a specific, relatively-detailed land use plan. GATRI,
Moreover, a legislative act “predetermines what the law shall be for the regulation of future cases falling under its provisions,” whereas a non-legislative act “executes or administers a law already in existence.” Sandy Beach Defense Fund v. City Council of the City & Cnty. of Honolulu,
A Community Plan amendment cannot be equated with a zoning variance or similar relief. A variance is a thoroughly administrative mechanism that changes the effect of an existing law on a particular property. See MCC § 19.520.050 (1991). Because the Community Plan is legally binding, an amendment amounts to a change of the existing law rather than an administrative exception to its application.
A comparison of the two processes supports this conclusion. The Maui Board of Variances and Appeals, an administrative agency, has authority to grant variances from an existing land use regulation if it determines the regulation imposes unique hardship on a specific property. MCC § 19.520.050(C). The landowner must file an appropriate application, and the board must hold a public hearing. MCC §§ 19.520.020 (1997), 19.520.030 (1991).
In some respects, the process for obtaining a Community Plan amendment appeal’s similarly administrative in nature: an individual landowner may apply, on an individual basis, at any time for an amendment on a promulgated form; and the Planning Commission reviews the application and sets it for a public hearing. MCC § 2.80B.110(A), (B) (2006). However, the bulk of the process is legislative. Following review of the application, the Planning Commission has no authority to approve or deny a proposed amendment. Instead, its role is limited to providing findings, conclusions, and recommendations. MCC § 19.510.020(A)(6)(7); Maui County Charter § 8-8.4. The Commission must transmit the application along with
In Kailua Community Council v. City & County of Honolulu, the supreme court addressed this issue in the nearly identical context of a general plan amendment, which on 0‘ahu is accomplished by ordinance of the city council.
Because a Community Plan amendment is not an administrative act, it cannot reasonably be required as a step in reaching a final agency determination for ripeness purposes. See, e.g., Ward v. Bennett,
In a California case nearly identical to the one at bar, the court held that the landowners’ failure to obtain a general plan amendment was not a bar to ripeness. Howard,
For these reasons, we hold that Appellants are not required to seek a change in the applicable law, ie., the Community Plan, in order to satisfy the ripeness requirement for their takings claims.
V. CONCLUSION
We conclude that the Circuit Court erred in its determination that it lacked subject matter jurisdiction because Appellants’ claims were not ripe for adjudication. Accordingly, we vacate the Circuit Court’s June 5, 2009 Amended Judgment in Civil No. 07-1-0496 and October 15, 2009 Final Judgment in Civil No. 09-1-0413, and we remand for further proceedings.
Notes
. The Honorable Joseph E. Cardoza presided.
. The Honorable Shackley R. Raffetto presided.
. During the pendency of this Appeal, William Spence, Director of the Department of Planning of the County of Maui, succeeded Jeffrey S. Hunt. Thus, pursuant to Hawai'i Rules of Appellate Procedure (HRAP) Rule 43(c), Spence has been substituted automatically for Hunt in this case.
. The Larsons' assessment application apparently did not comply with certain other requirements of SMA Rule 12-202-12. However, upon the Director’s determination that the application could not be processed due to inconsistency with the Community Plan, any other deficiencies became irrelevant to the ripeness analysis because, even if such deficiencies were remedied, the application could not be processed.
. As the only issue before us is whether Appellants’ claims are ripe for adjudication, and Appellants’ claim that they have been deprived of all economically beneficial use, we need not address the distinction between total takings and partial takings. See generally Callies, Takings, 24 U. Haw. L.Rev. at 445-50.
. Williamson enunciated a second barrier to ripeness in federal court takings cases, which is that the plaintiff must first seek compensation through the procedures that a state provides for seeking just compensation, or demonstrate that such procedures are unavailable or inadequate. Williamson,
. The Community Plan at issue in GATRI was the Kihei-Makena Community Plan, as adopted by the Maui County Council in 1985, in Ordinance No. 1490. That Community Plan was updated in 1997 and is now referred to as the 1998 Kihei-Makena Community Plan, the same plan that is at issue in the instant case.
. We note that the developer in GATRI sought an SMA minor use permit for a proposed "development” under the CZMA.