Kauai Planning Commission Can Modify SMA Use Permit

Morgan v. Planning Department, County of Kauai, 86 P.3d 982 (Haw. 2004).

Daniel Park, 2nd Year Law Student at University of Hawaii School of Law

On March 24, 2004, the Supreme Court of Hawai‘i ruled that the Planning Commission of the County of Kauai (Commission) possesses the inherent authority to modify a validly issued Special Management Area (SMA) Use permit due to changed conditions. The supreme court based its decision on the language and context of Hawai‘i’s Coastal Zone Management Act (CZMA)1, as well as the Planning Commission’s Rules of Practice and Procedure (PCRPP).

Background
For many oceanfront property owners, shoreline erosion threatens significant damage to their property. In response to this threat, owners usually construct some type of structure for protection. In September 1981, several property owners in Kauai (the seawall owners) located within a SMA applied for a SMA Use permit, required for any development within a SMA, to construct a seawall for shoreline erosion protection. One month later, the Commission granted them a permit to construct a rock revetment subject to nine conditions. Instead of building a rock revetment, the seawall owners constructed a seawall and even made unauthorized additions to the seawall at a later date. In 1986, an adjacent landowner filed a lawsuit against the seawall owners alleging that negligent construction and maintenance of the seawall damaged her property. The circuit court entered judgment in favor of the adjacent landowner and ordered compensation of $128,000.

By 1996, two property owners south of the seawall contacted state agencies to express concern about the damage to their property caused by the seawall and demand action. Consequently, the Planning Department filed a petition to revoke, amend or modify the SMA Use permit, alleging that (1) the seawall was not constructed according to approved plans; (2) the seawall owners failed to obtain permits for additional development in connection with the permitted project; and (3) the seawall owners failed to comply with the SMA Use permit condition.

After several public hearings, the Commission concluded that the seawall did not conform to the various conditions of the SMA Use permit. The Commission ordered the seawall owners to (1) conduct a sand replenishment program for the area immediately fronting the seawall, (2) alter the southern portion of the seawall to limit flanking erosion by providing a sloped, curved return rock revetment, (3) offer the two southern property owners a one-time sand replenishment program for the area immediately fronting their properties, and (4) repair the seawall and its surrounding areas. In August 1997, the seawall owners appealed the Commission’s decision to the circuit court, which held that the Commission lacked authority (1) to modify a condition of the SMA Use permit, and (2) to order injunctive relief. The Planning Department and Commission appealed the circuit court’s ruling.

Modification of an Existing SMA Use Permit
The CZMA is a comprehensive State regulatory scheme to protect the coastal environment of Hawai‘i. The Supreme Court explained that the State legislature is dedicated to the preservation, protection and, when feasible, the restoration of the natural resources within the coastal zone of Hawai‘i. The legislature authorizes counties to establish SMAs. The Court concluded that the CZMA mandates that “the designated authority seek to minimize, where reasonable . . . any development which would reduce the size of any beach or other area usable for public recreation.”2

The primary issue in this case is whether the Commission had the authority to modify the SMA Use permit previously issued to the seawall owners. Morgan, one of the seawall owners, argued that the circuit court properly held that the Commission did not have the authority to amend a SMA Use permit issued many years ago. Since the Commission’s enabling statute did not expressly allow reconsideration, Morgan argued that the Commission could not modify the permit. The Commission countered that because it must administer the objectives and policies of the CZMA, the Commission possesses continuing authority over SMA Use permits to ensure compliance with the CZMA.

The Commission also raised two other arguments regarding its authority to reconsider a SMA Use permit. First, it maintained that the circuit court’s interpretation of HRS § 205A-29 would lead to an absurd result. This statute states in pertinent part that “[a]ction on the special management permit shall be final unless otherwise mandated by court order.”3 The Commission argued that the circuit court’s interpretation of this language would require the Commission to file a court action every time a SMA Use permit requires modification. Second, the Commission argued that PCRPP §§ 1-12-8(b) and 1-12-9(b) expressly allow it to modify a condition imposed by a permit.

The supreme court concluded that the Commission did possess the inherent power to reconsider a validly issued SMA Use permit for several reasons. “Administrative tribunals possess the inherent power of reconsideration of their judicial acts” because “grave consequences” might occur if a decision could not be recalled.4 The Court reasoned that the Commission could not foresee every unexpected situation that could occur at the time of permit issuance. In addition, the supreme court agreed that the Commission’s enabling statute authorized the Commission to carry out the goals and policies of the CZMA and ensure its compliance. The supreme court also agreed that the circuit court’s interpretation of HRS § 205A-29 was unreasonable and held that it would not allow an interpretation of the statute that creates an absurd result. Finally, the supreme court held that PCRPP §§ 1-12-8(b) and 1-12-9(b) allow revocation and modification of a permit if the permit holder does not comply with the permit’s terms. Since the seawall owners did not comply with the terms of the SMA Use permit, the Commission could modify their SMA Use permit.

Injunctive Relief
The second issue in the case is whether the Commission had authority to order injunctive relief. Morgan argued that, pursuant to HRS § 205A-33, only the circuit court possesses injunctive power, and therefore, the Commission could not order the seawall owners to perform any of the four actions described above. The Commission countered that since it is vested with the authority to implement the objectives and policies of the CZMA, it could order injunctive relief. The supreme court agreed in part with Morgan.

Hawai‘i Revised Statutes § 205A-33 states in pertinent part “any person or agency violating any provision of this chapter may be enjoined by the circuit court of the State . . .”5 This statute expressly grants injunctive power to the circuit court, and there is no provision in the CZMA which expressly grants this power to a lead agency. The supreme court found that directing Morgan to conduct the sand replenishment program and offer a one-time sand replenishment program to the two landowners south of the seawall were injunctive remedies and concluded that the Commission lacked authority to order these two remedies.

The supreme court, however, concluded that the Commission did have the authority to command Morgan to alter and repair the seawall because these actions were not injunctive in nature. Instead, the Court reasoned that by ordering these two actions, the Commission intended to ensure compliance with the original conditions of the SMA Use permit. In addition, PCRPP 1-12-8(b) expressly authorizes the Commission to “allow the permit holder a reasonable opportunity to correct, remedy or rectify the problem” if any condition has been violated.6 The supreme court reasoned that the Commission could have revoked Morgan’s permit and concluded that by directing Morgan to alter and repair the seawall, the Commission provided an opportunity to correct the problem.

Conclusion
The Supreme Court of Hawai‘i held that the Commission has authority (1) to modify a validly issued SMA Use permit for changed conditions, and (2) to order Morgan to alter and repair the seawall in order to rectify the damage to adjacent properties. The supreme court also concluded that the Commission improperly mandated injunctive relief when the Commission ordered Morgan to conduct a sand replenishment program and offer the two southern property owners a one-time sand replenishment.

Endnotes
1. Haw. Rev. Stat. § 205A-1 et seq. (2001).
2. Id. at § 205A-26(3)(B) (2001).
3. Id. at § 205A-29 (2001).
4. Morgan v. Planning Department, County of Kauai, 86 P.3d 982, 992 (Haw. 2004).
5. Haw. Rev. Stat. § 205A-33 (2001).
6. PCRPP 1-12-8(b) (2001).