Hawaii attorney general contests court order to increase DHHL funds

Hawaii Attorney General Doug Chin says that the courts overstepped their authority in ordering the state to boost funding for the Department of Hawaiian Home Lands by about $18.4 million this year.

In a motion for reconsideration filed late last month, Chin asks Circuit Judge Jeannette Castagnetti to reconsider her November decision because it violates the constitutional principle of separation of powers. The Legislature has also asked the court for permission to file a motion in support of Chin’s position.

If the motion is denied, Chin intends to appeal the order, he told lawmakers during a budget briefing at the state Capitol on Tuesday.

“What it does is it invites the beneficiaries to sue every single year the Legislature makes an appropriation if the Legislature doesn’t appropriate exactly what the DHHL director asked for,” said Chin. “So I think that’s a problem.”

But plaintiffs in the case say the motion lacks merit and “is nothing more than a delay tactic” aimed at depriving DHHL of the $18.4 million ordered by the court.

“Every single day that passes brings us closer to the end of the FY 2016 and, as a consequence, the end of DHHL’s opportunity to obtain from the State of Hawaii sufficient sums for its FY 2016 administrative and operating budget,” wrote DHHL attorney Melvyn Miyagi in a court filing opposing the motion.

If the money isn’t appropriated by June 30, the end of the fiscal year, then the doctrine of sovereign immunity will likely prevent DHHL from recouping the money in a lawsuit for damages, he said.

“The state defendants thus have $18 million reasons to delay the finality of these proceedings,” Miyagi wrote, while asking the court to rule on the motion before Jan. 20, the opening day of the legislative session.

In November, Castagnetti ordered the state to boost DHHL’s funding for the 2016 fiscal year to $28 million from the $9.6 million in general funds that the state had provided. The ruling followed a 2012 Supreme Court decision that found that the state had failed “by any reasonable measure” over the years to sufficiently fund the agency.

The Supreme Court remanded the case to the Circuit Court to determine what level of funding is sufficient.

Gov. David Ige has yet to authorize the additional $18.4 million appropriation for the 2016 fiscal year. He also didn’t increase DHHL’s funding in his 2017 fiscal year budget, which he submitted to the Legislature last month — general funds for the agency remain at $9.6 million.

Plaintiff attorneys say the Circuit Court ruling implies that the same level of funding — $28 million — should also be appropriated for the 2017 fiscal year.

The upcoming fiscal year budget will now be debated in the Legislature, with final approval scheduled for April. The Legislature can increase DHHL’s budget, but Ige can choose not to release the funding.

The lawsuit was initiated by the Native Hawaiian Legal Corp. nine years ago on behalf of Native Hawaiian beneficiaries who argued that the state has violated its constitutional duty to fund the agency.

The Hawaii Constitution requires the state to fund DHHL. However, general-fund appropriations have wavered over the years. General-fund appropriations reached a high of $4.3 million for the 1992 fiscal year and fell to zero under former Gov. Linda Lingle. DHHL has relied in part on leasing its lands to commercial interests to cover its expenses and assist with its mission of building homesteads for Native Hawaiians with a blood quantum level of 50 percent or higher.

Chin told lawmakers this week that the court ruling set a bad precedent, eroding the Legislature’s authority to decide on the level of funding for state agencies.

“To our minds, it is a separation of powers issue,” he said. “That is where we respectfully believe the court overstepped.”

Chin’s motion for reconsideration also argues that the budget that DHHL Director Jobie Masagatani filed with the court, and which was used by Castagnetti to determine the department’s required level of funding, was inadequate.

“Plaintiffs have submitted insufficient evidence to show that such projected total (administrative and operating) expenses are a necessary or reasonable amount, as opposed to being unnecessarily high or excessive,” Chin wrote. “The framers, after all, could not have intended to require the Legislature to fund excessive or otherwise unnecessary A&O expenses.”

David Kimo Frankel, an attorney for the Native Hawaiian Legal Corp., said that the state has taken “various and contradictory approaches throughout this case” and actually waived the right to object to the injunctive relief sought by the plaintiffs at the end of last year’s trial.

“It’s kind of like wrestling with Jell-O,” he said.

In opposing Chin’s motion, Frankel argues in court documents that DHHL provided abundant information to the court to justify its operating and administration costs and that the state hasn’t provided any new evidence or arguments that couldn’t have been provided during the court case to justify the motion.

He also says that the state ignored a plethora of case law in arguing that the courts don’t have the authority to direct the Legislature to fund a state agency.

“Incantation of the talismanic phrase ‘separation of powers’ does not render the court’s order inappropriate,” he wrote.

While Castagnetti’s ruling initially seemed to bring some finality to a case that has dragged on in the courts for nearly a decade, it appears that the Ige administration and Legislature are gearing up for a protracted fight.

Lawmakers peppered Chin with questions on Tuesday about the implications of Castagnetti’s ruling, at one point asking him what would happen if they didn’t increase DHHL’s funding to $28 million.

“We don’t actually believe that — or I shouldn’t say that so strongly — we are not entirely certain that the court would actually be able to enforce that kind of judgment,” responded Chin. “What are they going to do, throw everybody in jail? That would be the question.”

Asked to comment on the remarks, Frankel said that both the court and plaintiffs have steps they can take if the governor or Legislature defies the court order.

“There definitely is a recourse. They do not want to cross that bridge,” he said, while declining to elaborate.

Denise Antolini, a professor and associate dean at the University of Hawaii’s law school, said that the courts can impose monetary sanctions against the state if it doesn’t comply with a court order and also hold government officials in contempt.

“The courts circle the wagons because a defendant’s failure to comply is an offense to the judiciary itself,” she said. “So the stakes get ratcheted up really high. It becomes a constitutional battle.”

Jim Burns, a retired chief judge of the Hawaii Intermediate Court of Appeals, pointed to a case in Washington state in which the Supreme Court held the Legislature in contempt for failing to come up with a plan to close the funding gap between rich and poor schools. In August, the court followed up with a fine of $100,000 for each day the state failed to come up with an adequate spending plan.