Hawaii Supreme Court Requires EA for Superferry

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SandBar 8:2, July, 2009 Recommended citation: Livingston, Maxwell. , Hawaii Supreme Court Requires EA for Superferry , 8:2 SandBar 11 (2009). Hawaii Supreme Court Requires EA for Superferry Sierra Club v. DOT, 202 P.3d 1226 (Haw. 2009). *Maxwell Livingston, 2L, Marquette University Law School* The Hawaii Supreme Court has ruled that the “Superferry,” a passenger-vehicle ferry operating between Oahu and Maui, must cease operations until it undergoes an environmental assessment (EA). The court found that the agreement between Hawaii and the ferry company (Superferry), allowing the project to progress without an EA, was unconstitutional. Background In Hawaii, when the state approves a program which involves the use of state lands or state funds, an agent of the state must prepare an EA. In 2005, the state Department of Transportation exempted the Superferry from environmental review. Several environmental groups, including Sierra Club, brought suit against DOT and Superferry, arguing that an EA was required because the state approved the project and it involved both state land and partial state funding. The Hawaii Supreme Court ruled in favor of the Sierra Club, reversing a 2005 lower court decision and ordering the DOT to prepare an EA.1 In October 2007, the circuit court issued a temporary restraining order, which provided that the DOT could not move forward with the Superferry project until it prepared an EA. In 2007, the state legislature passed Act 2,2 which provided, among other things, that an EA is not required for the use, construction, or improvement of any large ferry vessel or barge used for any large ferry vessel. The circuit court reversed itself based on the enactment of Act 2, dissolving the injunction and reviving the operating agreement between DOT and Superferry. However, the court did grant attorney’s fees and costs to Sierra Club. Sierra Club appealed, claiming that the dissolution of the injunction on the basis of Act 2 was unconstitutional and that the fees and costs granted by the court were not enough. DOT and Superferry cross-appealed because they felt that the court should not have awarded fees and costs to Sierra Club, because the organization was not the prevailing party. Constitutionality Standard Statutes are presumed to be constitutional. For statutes to be deemed unconstitutional in Hawaii, the party challenging them must show that they are unconstitutional beyond a reasonable doubt, and the constitutional defect[s] must be clear, manifest, and unmistakable.3 The court noted that to conform with the Hawaii Constitution, Act 2 must be a general law. The Hawaii Constitution favors general laws over special laws, which are generally meant to discriminate in favor of certain individuals or companies. The Hawaii Constitution only gives legislators power to create “general laws” regarding state-owned lands, with a few exceptions.4 Act 2 involves state land because A7 15 of Act 2 supports the use of state land to assist owners of large capacity ferry vessels. Since Act 2 involves state land, and since the exceptions do not apply, the court reasoned that Act 2 must be a “general law” to be constitutional. Special or General Law? Hawaii courts determine whether laws are special or general by looking at the “substance and practical operation, rather than [the] title, form or phraseology.”5 A law may be classified as a special law by operation if it applies to a “class of one” and creates only an illusory (unreal) larger class. No case law within the state of Hawaii provided usable precedent for the purpose of defining special versus general law in this case. As such, the court looked to a Colorado case, People v. Canister, for guidance.6 In Canister, the Colorado court said that there must be a specific entity considered by the legislators beyond a class of one for the class to be real; foreseeability of another party is not enough. The court then looked to a Nebraska case, Harman v. Marsh,7 which said that a general law may be created when there is a reasonable probability that another party will enter the class in the future. However, the class will be unreal if it is merely theoretical that another party will be covered under the legislation in the future. Here, by substance and operation, Act 2 creates an unreal class, and therefore is a special, unconstitutional, law. First, the court concluded that there is no apparent entity aside from Superferry capable of using the Superferry services, and no other large capacity ferry vessel has even shown interest. Second, it is unlikely that there will be another party “entering the class in the future.” At most, there is only a twenty-one month window at most during which Act 2 is in force; because the Act, according to its own terms, will be repealed after the 45th day (not including weekends) of 2009.8 Any attempt by a third party to fulfill its permit requirements in twenty-one months, before Act 2 would be repealed, would not likely be successful, the court reasoned, given that it took Superferry thirty-five months to fulfill its requirements. Also, any other ferry would have to be almost identical to the Superferry to be able to take advantage of the provided services. Further, it is provided in the agreement between DOT and Superferry that there might not be available equipment for a potential competitor. Also, if it became necessary for there to be an environmental impact standard, Act 2 would not govern because the Act stipulates that the Office of Environmental Quality Control’s acceptance of the first environmental impact statement would trigger the automatic repeal of Act 2, and, therefore, only Superferry would benefit. And finally, the ferry services can only be used in Honolulu pursuant to the express terms of the 2005 operating agreement. As such, the addition of future parties is not reasonably probable and certainly was not conceived of by the legislature.9 Therefore, the legislation benefits only Superferry through its operating agreement with the state. The court held that the legislation is a special law, which is unconstitutional in this instance. Attorney’s Fees and Costs The court held that since the lower court did not abuse its discretion and Sierra Club was the prevailing party, Sierra Club should be granted reimbursement of fees and costs as previously granted. The court noted that the party who wins on the main issue will be the prevailing party.10 In this instance, Sierra Club was given an injunction on the basis of the main issue. Further, the court noted that an injunction will constitute a final judgment on the main issue, except when the initial trial is based on hastily put together information and therefore incomplete.11 Here, the injunction was granted after four weeks of evidentiary hearings. Therefore, Sierra Club was the prevailing party. Under the Private Attorney General Doctrine, the court can grant fees and costs to a prevailing party in a public interest case, when it is reasonable to do so. The court found the grant of fees and costs reasonable, but lowered the award by $900 as Sierra Club did not challenge the requested relief by DOT. Conclusion Because Act 2 unconstitutionally discriminated in favor of Superferry, the court reversed the lower court’s decision. The Hawaii Supreme Court’s decision will require the DOT and Superferry to prepare an EA before the operating agreement will become effective, and before the ferry may become operational. The court upheld the fees awarded by the lower court and lowered costs by $900. Endnotes: 1. Sierra Club v. DOT, 167 P.3d 292 (2007). 2. 2007 Haw. Sess. Laws PAGE # Act 2, [A7A7 1-18 at 5-21.] 3. Sierra Club v. DOT, 202 P.3d 1226, 1241 (Haw. 2009). 4. Article XI, A7 5. 5. Sierra Club v. DOT, 202 P.3d 1226, at 1244. 6. 110 P.3d 380 (Colo. 2005). 7. 467 N.W.2d 836, 848-849 (Neb. 1991). 8. 2007 Haw. Sess. Laws Act 2, A7A7 1-18 at 18. 9. See People v. Canister, 110 P.3d 380 (Colo. 2005). 10. Food Pantry, Ltd. v. Waikiki Bus., 575 P.2d 869, 879 (1978). 11. See Sole v. Wyner, 127 S. Ct. 2188, 2194 (2007).
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SandBar 8:2, July, 2009
Recommended citation: Livingston, Maxwell. , Hawaii Supreme Court Requires EA for Superferry , 8:2 SandBar 11 (2009).

Sierra Club v. DOT, 202 P.3d 1226 (Haw. 2009).

Maxwell Livingston, 2L, Marquette University Law School

The Hawaii Supreme Court has ruled that the “Superferry,” a passenger-vehicle ferry operating between Oahu and Maui, must cease operations until it undergoes an environmental assessment (EA). The court found that the agreement between Hawaii and the ferry company (Superferry), allowing the project to progress without an EA, was unconstitutional.

Background
In Hawaii, when the state approves a program which involves the use of state lands or state funds, an agent of the state must prepare an EA. In 2005, the state Department of Transportation exempted the Superferry from environmental review. Several environmental groups, including Sierra Club, brought suit against DOT and Superferry, arguing that an EA was required because the state approved the project and it involved both state land and partial state funding. The Hawaii Supreme Court ruled in favor of the Sierra Club, reversing a 2005 lower court decision and ordering the DOT to prepare an EA.1 In October 2007, the circuit court issued a temporary restraining order, which provided that the DOT could not move forward with the Superferry project until it prepared an EA.
      In 2007, the state legislature passed Act 2,2 which provided, among other things, that an EA is not required for the use, construction, or improvement of any large ferry vessel or barge used for any large ferry vessel. The circuit court reversed itself based on the enactment of Act 2, dissolving the injunction and reviving the operating agreement between DOT and Superferry. However, the court did grant attorney’s fees and costs to Sierra Club.
      Sierra Club appealed, claiming that the dissolution of the injunction on the basis of Act 2 was unconstitutional and that the fees and costs granted by the court were not enough. DOT and Superferry cross-appealed because they felt that the court should not have awarded fees and costs to Sierra Club, because the organization was not the prevailing party.

Constitutionality Standard
Statutes are presumed to be constitutional. For statutes to be deemed unconstitutional in Hawaii, the party challenging them must show that they are unconstitutional beyond a reasonable doubt, and the constitutional defect[s] must be clear, manifest, and unmistakable.3
      The court noted that to conform with the Hawaii Constitution, Act 2 must be a general law. The Hawaii Constitution favors general laws over special laws, which are generally meant to discriminate in favor of certain individuals or companies. The Hawaii Constitution only gives legislators power to create “general laws” regarding state-owned lands, with a few exceptions.4 Act 2 involves state land because A7 15 of Act 2 supports the use of state land to assist owners of large capacity ferry vessels. Since Act 2 involves state land, and since the exceptions do not apply, the court reasoned that Act 2 must be a “general law” to be constitutional.

Special or General Law?
Hawaii courts determine whether laws are special or general by looking at the “substance and practical operation, rather than [the] title, form or phraseology.”5 A law may be classified as a special law by operation if it applies to a “class of one” and creates only an illusory (unreal) larger class. No case law within the state of Hawaii provided usable precedent for the purpose of defining special versus general law in this case. As such, the court looked to a Colorado case, People v. Canister, for guidance.6 In Canister, the Colorado court said that there must be a specific entity considered by the legislators beyond a class of one for the class to be real; foreseeability of another party is not enough. The court then looked to a Nebraska case, Harman v. Marsh,7 which said that a general law may be created when there is a reasonable probability that another party will enter the class in the future. However, the class will be unreal if it is merely theoretical that another party will be covered under the legislation in the future.
Here, by substance and operation, Act 2 creates an unreal class, and therefore is a special, unconstitutional, law. First, the court concluded that there is no apparent entity aside from Superferry capable of using the Superferry services, and no other large capacity ferry vessel has even shown interest. Second, it is unlikely that there will be another party “entering the class in the future.” At most, there is only a twenty-one month window at most during which Act 2 is in force; because the Act, according to its own terms, will be repealed after the 45th day (not including weekends) of 2009.8 Any attempt by a third party to fulfill its permit requirements in twenty-one months, before Act 2 would be repealed, would not likely be successful, the court reasoned, given that it took Superferry thirty-five months to fulfill its requirements. Also, any other ferry would have to be almost identical to the Superferry to be able to take advantage of the provided services. Further, it is provided in the agreement between DOT and Superferry that there might not be available equipment for a potential competitor. Also, if it became necessary for there to be an environmental impact standard, Act 2 would not govern because the Act stipulates that the Office of Environmental Quality Control’s acceptance of the first environmental impact statement would trigger the automatic repeal of Act 2, and, therefore, only Superferry would benefit. And finally, the ferry services can only be used in Honolulu pursuant to the express terms of the 2005 operating agreement. As such, the addition of future parties is not reasonably probable and certainly was not conceived of by the legislature.9 Therefore, the legislation benefits only Superferry through its operating agreement with the state. The court held that the legislation is a special law, which is unconstitutional in this instance.

Attorney’s Fees and Costs
The court held that since the lower court did not abuse its discretion and Sierra Club was the prevailing party, Sierra Club should be granted reimbursement of fees and costs as previously granted. The court noted that the party who wins on the main issue will be the prevailing party.10 In this instance, Sierra Club was given an injunction on the basis of the main issue. Further, the court noted that an injunction will constitute a final judgment on the main issue, except when the initial trial is based on hastily put together information and therefore incomplete.11 Here, the injunction was granted after four weeks of evidentiary hearings. Therefore, Sierra Club was the prevailing party. Under the Private Attorney General Doctrine, the court can grant fees and costs to a prevailing party in a public interest case, when it is reasonable to do so. The court found the grant of fees and costs reasonable, but lowered the award by $900 as Sierra Club did not challenge the requested relief by DOT.

Conclusion
Because Act 2 unconstitutionally discriminated in favor of Superferry, the court reversed the lower court’s decision. The Hawaii Supreme Court’s decision will require the DOT and Superferry to prepare an EA before the operating agreement will become effective, and before the ferry may become operational. The court upheld the fees awarded by the lower court and lowered costs by $900.

Endnotes:
1.   Sierra Club v. DOT, 167 P.3d 292 (2007).
2.   2007 Haw. Sess. Laws PAGE # Act 2, [A7A7 1-18 at 5-21.]
3.   Sierra Club v. DOT, 202 P.3d 1226, 1241 (Haw. 2009).
4.   Article XI, A7 5.
5.   Sierra Club v. DOT, 202 P.3d 1226, at 1244.
6.   110 P.3d 380 (Colo. 2005).
7.   467 N.W.2d 836, 848-849 (Neb. 1991).
8.   2007 Haw. Sess. Laws Act 2, A7A7 1-18 at 18.
9.   See People v. Canister, 110 P.3d 380 (Colo. 2005).
10. Food Pantry, Ltd. v. Waikiki Bus., 575 P.2d 869, 879 (1978).
11. See Sole v. Wyner, 127 S. Ct. 2188, 2194 (2007).