Kaua'i Springs, Inc. v. Planning Department of the County of Kaua'i

NOT FOR PUBLICATION IN WEST'S HAWAII REPORTS OR THE PACIFIC REPORTER

Electronically Filed
Intermediate Court of Appeals
CAAP-XX-XXXXXXX
23-SEP-2024
10:16 AM
Dkt. 132 SO

NO. CAAP-XX-XXXXXXX

IN THE INTERMEDIATE COURT OF APPEALS

OF THE STATE OF HAWAI#I

KAUA#I SPRINGS, INC., Petitioner-Appellant-Appellee, v.
PLANNING DEPARTMENT OF THE COUNTY OF KAUA#I;
PLANNING COMMISSION OF THE COUNTY OF KAUA#I, and
COUNTY OF KAUA#I, Respondents-Appellees-Appellants

APPEAL FROM THE CIRCUIT COURT OF THE FIFTH CIRCUIT
(CIVIL NO. 18-1-0192 (JKW)

SUMMARY DISPOSITION ORDER
(By: Hiraoka, Presiding Judge, and Wadsworth and Guidry, JJ.)

In this secondary appeal, Respondents-Appellees-
Appellants Planning Department of the County of Kaua#i (Planning
Department), Planning Commission of the County of Kaua#i
(Planning Commission), and County of Kaua#i (collectively
Appellants) appeal from the Second Amended Final Judgment
(Judgment), entered in favor of Petitioner-Appellant-Appellee
Kaua#i Springs, Inc. (Kaua#i Springs), on January 7, 2020, by the
Circuit Court of the Fifth Circuit (Circuit Court).1/ Appellants
also challenge the Circuit Court's Findings of Fact, Conclusions
of Law, Decision and Order (FOFs/COLs/Order), entered on
November 1, 2019. The FOFs/COLs/Order "reverse[d] and vacate[d]"
the Planning Commission's Findings of Fact, Conclusions of Law,
and Decision and Order (Planning Commission FOFs/COLs/Order),
issued on November 26, 2018.

1/
The Honorable Kathleen N.A. Watanabe pesided.
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On appeal, Appellants contend that: (1) "the Circuit
Court's [COLs] 5, 6, 7 and 8 are clearly wrong"; (2) "the Circuit
Court's [COLs] 4, 9, 10, 11 and 12 are clearly erroneous for lack
of sufficient factual support"; and (3) "the Circuit Court's
[FOFs] 19, 22, 23, 25, 27, and 28 are clearly erroneous in view
of the reliable, probative, and substantial evidence on the whole
record."
For the reasons discussed below, we vacate and remand.

I. Background

This agency appeal has a long and complex procedural
history. The Hawai#i Supreme Court's published opinion in Kauai
Springs, Inc. v. Planning Commission of the Cnty. of Kaua#i, 133
Hawai#i 141, 324 P.3d 951 (2014), recounts the factual and
procedural background of the case through early-2014.
In brief, Kaua#i Springs filed an application with the
Planning Department in 2006 for a Use Permit, a Class IV Zoning
Permit, and a Special Permit to continue operating a spring water
bottling facility on a parcel of land within the County of Kaua#i
that was zoned for agricultural use (collectively, the Permits).
The Planning Commission denied Kaua#i Springs' application.
Kaua#i Springs appealed to the Circuit Court. On September 17,
2008, the Circuit Court issued findings of fact, conclusions of
law, and an order reversing in part and vacating in part the
Planning Commission order. The Circuit Court ruled that Kaua#i
Springs had met its burden for the Permits and ordered that they
be issued. On September 23, 2008, the Circuit Court entered
final judgment in favor of Kaua#i Springs and against the
Planning Commission.
The Planning Commission appealed from the Circuit
Court's judgment to this court. On April 30, 2013, this court
published an opinion vacating the Circuit Court's judgment and
remanding the case to the Planning Commission with instructions.
See Kauai Springs, Inc. v. Planning Commission of the County of
Kauai, 130 Hawai#i 407, 312 P.3d 283 (App. 2013).
The supreme court granted certiorari and issued its
published opinion on February 28, 2014. See Kauai Springs, 133

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Hawai#i at 141, 324 P.3d at 951. The supreme court concluded
that this court erred in certain respects, but affirmed this
court's judgment to the extent it vacated the Circuit Court's
judgment. Id. at 179-181, 324 P.3d at 989-91. Specifically, the
supreme court held that the Planning Commission's findings of
fact and conclusions of law were not wrong, and its decision to
deny the Permits was thus not arbitrary and capricious. Id. at
179-80, 324 P.3d at 989-90. However, the supreme court remanded
the case to the Planning Commission with instructions to clarify
its findings and conclusions in the underlying case consistent
with the supreme court's opinion. See id. at 181, 324 P.3d at
991.
On remand, the Planning Commission referred the case to
a hearings officer to "[r]eceive evidence consistent with the
. . . [s]upreme [c]ourt [o]pinion to supplement the record" and
to "[p]rovide an amended decision and order, based on the
additional evidence, back to the Planning Commission for its
consideration." On May 31, 2016, the hearings officer conducted
a contested case hearing during which the Planning Department and
Kaua#i Springs agreed that the Planning Commission had "reopened
a contested case hearing[,]" under which the Commission "was not
limited to clarifying its findings and conclusions" and could
receive "further evidence . . . to permit [Kaua#i Springs] to
establish that it presently meets the requirements for issuance
of the Permits, including public trust and the respective
requirements under each permit regime."2/ Subsequent to the
hearing, the record remained open for limited purposes; the
contested case was closed on September 12, 2017.
On November 26, 2018, the Planning Commission entered
the Planning Commission FOFs/COLs/Order, which denied Kaua#i
Springs' application for the Permits.

2/
We note that the supreme court did not instruct the Planning
Commission to reopen the proceeding to take additional evidence and to
determine anew whether Kaua#i Springs "presently," i.e., following the
submission and consideration of the additional evidence, met the requirements
for issuance of the Permits. That said, it does not appear that the Planning
Commission was legally precluded from doing so, as long as its new or amended
findings and conclusions clarified its prior findings and conclusions
consistent with the supreme court's opinion.

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On December 21, 2018, Kaua#i Springs filed a notice of
appeal in the Circuit Court seeking appellate review of the
Planning Commission FOFs/COLs/Order pursuant to Hawaii Revised
Statutes (HRS) § 91-14(b) (Supp. 2019). Following briefing and a
hearing, on November 1, 2019, the Circuit Court entered its
FOFs/COLs/Order, which vacated the Planning Commission
FOFs/COLs/Order and affirmatively directed the Planning
Department to grant Kaua#i Springs' application for the Permits.
On January 7, 2020, the Circuit Court entered the Judgment.

II. Discussion

In their first and second points of error, Appellants
contend that the Circuit Court's COLs 5 through 8 are clearly
wrong, and that COL 4 and COLs 9 through 12 are factually
unsupported. In this secondary appeal, we apply the standards in
HRS § 91–14(g) to the Planning Commission's decision to determine
whether the Circuit Court was right or wrong in vacating the
decision.3/ Flores v. Bd. of Land & Nat. Res., 143 Hawai#i 114,
120, 424 P.3d 469, 475 (2018).
Appellants argue that the Circuit Court erred in
concluding that Kaua#i Springs satisfied the public trust
requirements for issuance of the Permits. We thus briefly review
those requirements before addressing the challenged COLs.

A. The Public Trust Doctrine
The supreme court recently summarized the scope and
purposes of the public trust doctrine as follows:

"The public trust doctrine applies to all water
resources without exception or distinction." [In re Water
Use Permit Apps. (Waiâhole I)], 94 Hawai#i [97,] 133, 9 P.3d
[409,] 445[ (2000)].

We have recognized four types of water uses, or
"purposes," protected by the state water resources trust:

3/
In their third point of error, Appellants also challenge several
of the Circuit Court's FOFs. A circuit court reviewing an agency's decision
and order in a contested case under HRS § 91-14 acts as an appellate court; it
does not review the evidence in the agency record to make its own findings of
fact. Sierra Club v. Bd. of Land & Nat. Res., 154 Hawai #i 264, 284, 550 P.3d
230, 250 (App. 2024), cert. granted, No. SCWC-XX-XXXXXXX, 2024 WL 3378462
(July 11, 2024). We decline to review the Circuit Court's FOFs and instead
analyze the issues presented by Appellants' arguments.

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(1) maintenance of waters in their natural state; (2)
domestic water use, in particular, drinking water; (3) the
exercise of traditional and customary Native Hawaiian water
rights; and (4) the reservation of water enumerated by the
Water Code. Kauai Springs, 133 Hawai#i at 172, 324 P.3d at
982 (first citing Waiâhole I, 94 Hawai#i at 136-37, 9 P.3d
at 448-50; and then citing In re Wai#ola[ O Moloka#i, Inc.],
103 Hawai#i [401,] 431, 83 P.3d [664,] 694[ (2004)]). We
rejected, on the other hand, private commercial uses as not
protected by the public trust. Waiâhole I, 94 Hawai#i at
138, 9 P.3d at 450. We have acknowledged the public trust
"may allow grants of private interests in trust resources
under certain circumstances"; nonetheless, it has "never
been understood to safeguard rights of exclusive use for
private commercial gain." Id.

Surface Water Use Permit Applications, Integration of Appurtenant
Rts. & Amends. to Interim Instream Flow Standards, 154 Hawai#i
309, 339, 550 P.3d 1167, 1197 (2024).
In Kauai Springs, the supreme court explained the
duties of the State in enforcing these public trust principles,
as well as the burden on the permit applicant, in the context of
this case. The court stated in part:

When an agency is confronted with its duty to perform
as a public trustee under the public trust doctrine, it must
preserve the rights of present and future generations in the
waters of the state." Waiâhole I, 94 Hawai#i at 141, 9 P.3d
at 453. . . . The agency measures the proposed use under a
"reasonable and beneficial use" standard, which requires
examination of the proposed use in relation to other public
and private uses. Id. at 161, 9 P.3d at 473. The agency
must apply a presumption in favor of public use, access,
enjoyment, and resource protection. Id. at 142, 154 n. 59, 9
P.3d at 454, 466 n. 59.
The agency is duty-bound to place the burden on the
applicant to justify the proposed water use in light of the
trust purposes. [In re Contested Case Hearing on Water Use
Permit Application Filed by] Kukui (Molokai), Inc., 116
Hawai#i [481,] 490, 174 P.3d [320,] 329[ (2007)]. Permit
applicants must demonstrate their actual needs, and, within
the constraints of available knowledge, the propriety of
draining water from public streams to satisfy those needs.
Waiâhole I, 94 Hawai#i at 162, 9 P.3d at 474. If there is a
reasonable allegation of harm to one of the uses protected
by the public trust, then the applicant must demonstrate
that there is no harm in fact or that any potential harm
does not preclude a finding that the requested use is
nevertheless reasonable and beneficial. Kukui (Molokai),
Inc., 116 Hawai#i at 499, 174 P.3d at 338.

The applicant is "obligated to demonstrate
affirmatively that the proposed use will not affect a
protected use, in other words, the absence of evidence that
the proposed use would affect a protected use is
insufficient." Wai#ola O Moloka#i, 103 Hawai#i at 442, 83
P.3d at 705 (emphases in original). See also Kukui
(Molokai), Inc., 116 Hawai#i at 509, 174 P.3d at 348 ("The
Water Commission's conclusion that 'no evidence was

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presented' . . . that the protected use would be adversely
affected erroneously shifted the burden of proof.")
Additionally, the applicant must demonstrate the
absence of a practicable alternative water source. Wai âhole
I, 94 Hawai#i at 161, 9 P.3d at 473. The applicant's
proposed use must be denied if the applicant does not show
that there is no practicable alternative water source. Id.
at 161 n. 65, 9 P.3d at 473 n. 65. "Such a requirement is
intrinsic to the public trust." Id.; see also Kukui
(Molokai), Inc., 116 Hawai#i at 496, 174 P.3d at 335 ("The
agency cannot fairly balance competing interests in a scarce
public trust resource if it renders its decision prior to
evaluating the availability of alternative sources of
water.").

Lastly, if the impact is found to be reasonable and
beneficial, then in light of the cumulative impact of
existing and proposed diversions on trust purposes, the
applicant must implement reasonable measures to mitigate
this impact. Waiâhole I, 94 Hawai#i at 143, 161, 9 P.3d at
455, 473.
When an agency or other deciding body considers an
application for permits under circumstances that requires
the deciding body to perform as a public trustee to protect
a public trust resource, the agency or other deciding body
must make findings sufficient to enable an appellate court
to track the steps that the agency took in reaching its
decision. Kilauea Neighborhood Ass'n[ v. Land Use Comm'n],
7 Haw. App. [277,] 230, 751 P.2d [1031,] 1034[ (1988)]
. . . .
. . . .

Under the foregoing principles and purposes of the
public trust, it is manifest that a government body is
precluded from allowing an applicant's proposed use to
impact the public trust in the absence of an affirmative
showing that the use does not conflict with those principles
and purposes. Therefore, the applicant is "obligated to
demonstrate affirmatively that the proposed use will not
affect a protected use," Wai#ola O Moloka#i, 103 Hawai#i at
442, 83 P.3d at 705 (emphases omitted). In other words,
"the absence of evidence that the proposed use would affect
a protected use is insufficient." Id. (emphasis added).
Kauai Springs has asserted "the public trust doctrine
imposes a duty to assess, but does not empower an agency to
deny an application simply because it claims it lacks
information within its power to obtain, thus shifting the
burden to the applicant." However, contrary to Kauai
Springs' assertion, a lack of information from the applicant
is exactly the reason an agency is empowered to deny a
proposed use of a public trust resource.

Kauai Springs, 133 Hawai#i at 173-74, 324 P.3d at 983-84
(original brackets omitted).
With these principles in mind, we address Appellants'
contentions.

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B. The Challenged COLs
Appellants first contend that the Circuit Court's COLs
5 through 8 are clearly wrong. These COLs state:

5. There has been no actual evidence to indicate
that [Kaua#i Springs'] property and/or the water that flows
through [Kaua#i Springs'] property, was ever used by Native
Hawaiian practitioners. See In re Conservation Dist. Use
Application (CDUA) HA-3568, 431 P.3d 752, 769-70 (Haw.
2018).

6. There has been no specific findings of fact and
conclusions of law by the Planning Department or the
Planning Commission "identifying (1) the scope of valued
cultural, historical or natural resources in the relevant
area, (2) the extent to which those resources will be
affected or impaired, and (3) any feasible actions to be
taken by the agency to protect Native Hawaiian rights that
are found to exist at the relevant area." In re
Conservation Dist. Use Application (CDUA) HA-3568, 431 P.3d
752, 769-70 (Haw. 2018).

7. The reservation of water enumerated by the State
Water Code, which generally refers to: (i) the reservation
of sufficient water for current and foreseeable domestic,
stock water, aquaculture and irrigation activities on lands
leased to native Hawaiians pursuant to the HHCA, (ii) the
reservation of appurtenant water rights of kuleana and taro
lands, and (iii) those traditional and customary rights
otherwise assured under the code (See In re W[ai #]ola O
Moloka[#]i, Inc., 103 Haw[ai#i] 401, 431 (2004)) will not be
affected by [Kaua#i Springs'] proposed use.

8. Therefore, [Kaua#i Springs'] proposed use is
consistent with the four (4) protected trust purposes
enumerated by the Hawaii Supreme Court in Kauai Springs,
Inc. v. Planning Comm'n of Cty of Kauai, 133 Haw. 141,
(2014), to wit: (i) the maintenance of waters in their
natural state; (ii) the protection of domestic water use;
(iii) the protection of water in the exercise of Native
Hawaiian and traditional and customary rights; and (iv) the
reservation of water enumerated by the State Water Code.

COLs 5 and 6, when read together with COLs 7 and 8,
appear to conclude that Kaua#i Springs met its burden of
demonstrating that its proposed water use will not affect the
protected use of water in the exercise of Native Hawaiian and
traditional and customary rights, because (1) there was "no
actual evidence to indicate that [Kaua#i Springs'] property,
and/or the water that flows through [Kaua#i Springs'] property,
was ever used by Native Hawaiian practitioners"; and (2) the
Planning Commission did not properly conduct an analysis under Ka
Pa#akai O Ka #Aina v. Land Use Comm'n, 94 Hawai#i 31, 7 P.3d 1068
(2000), consistent with the supreme court's ruling in In re

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Conservation Dist. Use Application HA-3568, 143 Hawai#i 379, 431
P.3d 752 (2018).
So read, COLs 5 through 8 are clearly wrong in their
application of the legal standards set forth in Kauai Springs.
"If there is a reasonable allegation of harm to one of the uses
protected by the public trust" – here, the use of water in the
exercise of Native Hawaiian and traditional and customary rights
– "then the applicant must demonstrate that there is no harm in
fact or that any potential harm does not preclude a finding that
the requested use is nevertheless reasonable and beneficial. 133
Hawai#i at 173, 324 P.3d at 983 (emphasis added) (citing Kukui
(Molokai), Inc., 116 Hawai#i at 399, 174 P.3d at 338). "The
applicant is obligated to demonstrate affirmatively that the
proposed use will not affect a protected use, in other words, the
absence of evidence that the proposed use would affect a
protected use is insufficient." Id. (internal quotation marks
and brackets omitted; some emphasis added) (quoting In re Wai#ola
O Moloka#i, 103 Hawai#i at 442, 83 P.3d at 705).
Here, the Planning Commission concluded that "a
reasonable allegation of harm was evidenced in the record" in
part by testimony that "raised concerns over the resulting harm
to Native Hawaiian traditional and customary rights and the
maintenance of waters in [their] natural state that may sustain
downstream flora, fauna, and riparian and coastal ecosytems."
Planning Commission COLs 60-61. The Planning Commission
summarized some of this testimony in COL 62 and there is more in
the record. The Planning Commission further concluded that
"[Kaua#i Springs] presented no evidence to demonstrate that there
is no harm in fact to the exercise of Native Hawaiian and
traditional and customary rights or the maintenance of waters in
[their] natural state, or that the requested use was nevertheless
reasonable and beneficial." Planning Commission COL 63.
Substantial evidence supported the Planning
Commission's COLs 60-63 (as well as the related FOFs) and they
reflect an application of the correct legal standard. The
Circuit Court did not expressly rule otherwise. Instead, the
Circuit Court erroneously concluded that Kaua#i Springs met its

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burden based on an absence of evidence that Native Hawaiian
practitioners ever used Kaua#i Springs' property or the water
that flowed through it, and the absence of a related Ka Pa#akai
analysis. These conclusions do not reflect application of the
correct legal standard, as set forth in Kauai Springs.4/ See also
Wai#ola O Moloka#i, 103 Hawai#i at 442, 83 P.3d at 705 (where
intervenor Native Hawaiians presented evidence that they
traditionally and customarily gathered food and fish along the
Kamiloloa shoreline and that a private developer's proposed well
and related pumping would significantly reduce groundwater
discharge into the ocean, thereby adversely affecting the limu
growth and fish populations, the developer "was obligated to
demonstrate affirmatively that the proposed well would not affect
native Hawaiians' rights; in other words, the absence of evidence
that the proposed use would affect native Hawaiians' rights was
insufficient to meet the burden imposed upon [the developer] by
the public trust doctrine . . . ."); Kukui (Molokai), Inc., 116
Hawai#i at 509, 174 P.3d at 348 (where intervenors contended that
a private landowner's proposed diversion of well water could
result in a reduction of marine life that would diminish their
ability to practice their traditional and customary native
Hawaiian gathering rights, even if their access was not impaired,
"the Commission's conclusion that 'no evidence was presented' to
suggest that the rights of native Hawaiians would be adversely
affected erroneously shifted the burden of proof to [the
intervenors]"). COLs 5 through 8 are clearly wrong.
Furthermore, because Kaua#i Springs did not meet its
burden under the public trust doctrine, COLs 11 and 125/ are, by

4/
We further conclude that although the Planning Commission was
required to "make findings sufficient to enable an appellate court to track
the steps that the agency took in reaching its decision[,]" Kauai Springs, 133
Hawai#i at 173, 324 P.3d at 983, it was not required to conduct a complete Ka
Pa#akai analysis in this context, where Kaua#i Springs failed to meet its
affirmative burden to demonstrate that its proposed use would not affect the
protected use of water in the exercise of Native Hawaiian and traditional and
customary rights, and the Commission denied the Permits on that basis.
5/
COLs 11 and 12 state:

11. [Kaua#i Springs's] proposed use of the water
flowing in the Waihohonu Stream is a reasonable, beneficial

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extension, also wrong. We need not reach Appellants' remaining
contentions regarding COLs 4, 9, and 10.

III. Conclusion

For the reasons discussed above, the January 7, 2020
Second Amended Final Judgment entered by the Circuit Court of the
Fifth Circuit is vacated. The case is remanded to the Circuit
Court for entry of judgment in favor of Respondents-Appellees-
Appellants Planning Department of the County of Kaua#i, Planning
Commission of the County of Kaua#i, and County of Kaua#i, and
against Petitioner-Appellant-Appellee Kaua#i Springs, Inc., and
for further proceedings consistent with this summary disposition
order.

DATED: Honolulu, Hawai#i, September 23, 2024.

On the briefs:
/s/ Keith K. Hiraoka
Mark L. Bradbury, Presiding Judge
Deputy County Attorney,
County of Kaua#i,
for Respondents-Appellees- /s/ Clyde J. Wadsworth
Appellants. Associate Judge

Gregory H. Meyers
(Meyers & Meyers LLC) /s/ Kimberly T. Guidry
for Petitioner-Appellant- Associate Judge
Appellee.

and efficient use of Kauai's water for the benefit of the
public.
12. Given that the Waihohonu Stream is not otherwise
being used by any person or entity, there is no cumulative
impact of [Kaua#i Springs's] proposed use on the public
trust purposes."

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