For the second time in a decade, the Sierra Club has dealt a major setback to Castle & Cooke’s plans to develop a new community between Waipio and Mililani.

A Circuit Court judge sided with the Sierra Club on Tuesday, ruling that an October state Land Use Commission decision in favor of the Koa Ridge project was invalid.

The LUC approval allowed Castle & Cooke to urbanize 768 acres of farmland for the estimated $2.2 billion project with 5,000 homes, a hotel, medical campus, two schools, parks and commercial space.

Circuit Judge Karl Sakamoto agreed with the Sierra Club that one of the six LUC members voting for the project should have been disqualified, which would invalidate the key approval by the commission.

"We’re delighted with the judge’s decision," said Robert Harris, director of the Sierra Club’s Hawaii chapter, adding that Sakamoto’s decision was a near-complete victory.

Sakamoto deferred a decision on a last-minute argument raised by the LUC challenging the Sierra Club’s ability to have the commissioner ruled ineligible, giving Castle & Cooke a thread of hope that Koa Ridge’s approval will stand.

Castle & Cooke officials reserved comment given the pending issue, which is scheduled for a hearing Aug. 24.

If the Sierra Club prevails, it would derail Castle & Cooke’s plan to start construction next year and deliver initial homes by the end of 2013.

The case goes back to Oct. 15 when the Land Use Commission voted 6-0 to approve an initial 3,500-home phase of Koa Ridge and gave conditional approval for a 1,500-home second phase. Three commissioners on the nine-member panel were excused and did not vote.

LUC rules require six "yes" votes to reclassify land for a different use.

The Sierra Club, before the vote, raised objections to the eligibility of one commissioner, Duane Kanuha, a Hawaii island representative.

Kanuha’s four-year term ended June 30, 2009, and the state Senate rejected his appointment to a second term on April 26, 2010, by a 14-9 vote. He remained on the commission as a holdover member by Gov. Linda Lingle until earlier this year.

The Sierra Club argued that Kanuha’s holdover status expired when he was rejected by the Senate.

Sakamoto ruled that the Senate’s rejection of Kanuha disqualified him from serving as a holdover commissioner and that his vote should be disqualified.

If only five votes counted, Koa Ridge would not have been approved, and Castle & Cooke would have to wait at least a year to file a new application with the LUC and start the approval process over.

Russell Suzuki, first deputy attorney general representing the LUC, contended that the commission’s approval should stand because the disqualification of a public official, such as an LUC commissioner, is governed by a section of Hawaii law that precludes the Sierra Club from being able to have Kanuha disqualified.

Suzuki, appointed by Gov. Neil Abercrombie in January, referred to a section of Hawaii law titled "quo warranto." He said the attorney general’s office did not raise the issue in written arguments filed in May because he only recently took over the Koa Ridge case.

If the Sierra Club prevails in the case, it would represent the second time in a decade that the environmental group has negated LUC decisions approving the conversion of farmland for Koa Ridge.

A prior version of Koa Ridge planned for 3,200 homes on 760 acres was approved by the commission in 2002. Completion of the first homes was estimated for 2007.

But the Sierra Club filed a lawsuit arguing that an environmental assessment should have been done prior to any LUC decision.

Castle & Cooke intended to complete the assessment after the LUC decision but before City Council consideration of a zoning change. A Circuit Court judge ruled in favor of the Sierra Club in 2003, and the decision was upheld by the Hawaii Supreme Court in a 2006 ruling that nullified the land-use change.

After revising its development plan and completing an environmental impact statement, Castle & Cooke reapplied for LUC approval in 2008. Hearings before the commission began in January 2010.