In their ongoing federal lawsuit against the City & County of Honolulu, companies owned by the developer of the Marconi Point Condominiums on Oʻahu’s North Shore now argue that a 2017 email among Department of Planning and Permitting staff that they discovered late last year justifies the filing of a third amended complaint.
Attorneys for the city and DPP disagree.
The companies owned by developer Jeremiah Henderson III argue that the DPP improperly denied or otherwise stymied the approval of building permits within the 96-acre property that lies entirely within the city’s Special Management Area.
The DPP informed the companies years ago of the need for development within the agricultural CPR to be reviewed in accordance with SMA rules. The companies, however, have insisted that no special management area permit is required for development to proceed.
In December 2023, U.S. District Judge Jill A. Otake dismissed the companies’ claims that building permits should have been issued to unit owners and a roadway subdivision the developer sought granted. She determined that despite the companies’ claims that they were given assurances by the DPP that no SMA permit was needed, the department always retained its authority to decide whether or not an SMA permit was required. She did, however, keep claims regarding the developer’s attempts to obtain agricultural subdivision permit approval alive.
The companies filed an amended complaint, hoping to revive their dismissed claims, but on June 24, the city and the Henderson companies filed a stipulation regarding the city’s motion to dismiss the amended complaint.
The companies agreed to the voluntary dismissal of their claims regarding building permits and to not re-file them unless they discovered new evidence that showed “unlawful or illegal conduct of the city” and “would be probative of the claims being dismissed by th[e] stipulation.”
Amongst the thousands of pages of documents that the DPP provided to the companies as part of discovery, they found a November 2017 email exchange between then-DPP director Kathy Sokugawa and DPP branch chief Mario Siu-Li that the companies’ attorneys argue supports the refiling of the building permit counts, even though the court determined that the window to amend the complaint closed last year.
Still, the companies’ attorneys argue in filings last month, “In the e-mail, Defendants’ discuss interpreting a provision of state law to require condominium property regimes on agricultural-zoned property to comply with subdivision requirements as a prerequisite for issuing building permits. The same email then expressly names Plaintiffs’ project as a target of this new rule. Later internal correspondence among Defendants’ employees refer to Plaintiffs’ project and the DPP Director’s ‘new approach to ag condo projects. …
“Defendants’ ‘new approach’ constitutes a rule, which is defined as an agency statement of general or particular applicability and future effect that implements, interprets, or prescribes law or policy, or describes the organization, procedure, or practice requirements of any agency.’ Defendants did not follow the formal rulemaking requirements of the Hawaiʻi Administrative Procedure Act. Defendants used this ‘new approach’ to wrongfully withhold building permits from Plaintiffs. Because Defendants adopted and enforced this rule without formal rulemaking, the rule is invalid, and Defendants could not use it as a basis to withhold Plaintiffs’ building permits. …
“Defendants’ Supplemental Production reveals that their ‘new approach’ to withholding permits, absent formal rulemaking, is arbitrary and likely unlawful.”
In addition to arguing that the companies missed their window to amend their complaint and failed to demonstrate good cause for an exception, deputies corporation counsel for the city state in their opposition for leave to amend, “The Court should reject Plaintiffs’ proposed amendments as futile because they neither correct the jurisdictional defects fatal to the dismissed claims nor establish ‘New Evidence’ under the Stipulation. DPP employees sent the internal emails after Plaintiffs had already received notice of their need to comply with SMA permitting requirements and roadway and agricultural subdivision approvals.
“Thus, Plaintiffs’ allegations of a pretextual ‘new approach’ do not plausibly show that DPP lacked discretion to require Plaintiffs to obtain an SMA permit, and Plaintiffs, which have not applied for an SMA permit, still have no vested rights to the building permits or roadway subdivision without the required SMA permit.”
— Teresa Dawson
Leave a Reply