ARAKAKI #2 (ARAKAKI V. LINGLE) Phase 3: Detour to U.S. Supreme Court on Issue of State Taxpayer Standing -- Legal Documents and News Events Beginning November, 2005. On June 12, 2006 the Supreme Court vacated previous 9th Circuit decision and sends case back to 9th Circuit for further proceedings regarding plaintiffs standing in view of recent Daimler-Chrysler decision. On February 9, 2007 the 9th Circuit decides Daimler-Chrysler vitiates Arakaki plaintiffs standing as taxpayers and remands to Honolulu District Court for last chance for plaintiffs to show they have any standing at all. On April 16, 2007 Judge Mollway ruled no plaintiffs have standing. She gave plaintiffs until April 30 to file an amended complaint "to preserve the record" but indicated the motion to amend would almost certainly be denied. On April 30 the amended complaint was filed, and the motion to amend was denied. It appears the lawsuit is now finished.

NOW BEGINS THE HISTORY OF THE ARAKAKI#2 LAWSUIT DURING PHASE 3, BEGINNING NOVEMBER 2005

On November 10, 2005 the State of Hawaii and Department of Hawaiian Homelands filed with the 9th Circuit Court of Appeals a motion for a stay of their mandate ordering the lawsuit back to the Honolulu District Court for further proceedings regarding the expenditure of state tax dollars by the Office of Hawaiian Affairs. The motion for a stay is to allow time for defendats to file a petition for a writ certiorari with the U.S. Supreme Court, asking the Supreme Court to hear an appeal of the decision that state taxpayers have standing. Defendants' concept is that if the Supreme Court decides plaintiffs do not have standing, then that will terminate the entire lawsuit; and it is better to decide that issue first, before large expenditures of time and effort are wasted on proceedings that would be moot in case the Supreme Court eventually rules plaintiffs have no standing. On November 21 the 9th Circuit Court granted the motion for a stay.

STATE DEFENDANTS-APPELLEES' AND HHCA/DHHL DEFENDANTS-APPELLEES' MOTION FOR STAY OF MANDATE PENDING THE FILING OF A PETITION FOR WRIT OF CERTIORARI

Further proceedings at Honolulu District Court are now suspended until the Supreme Court decides whether to grant certiorari (solely on the issue of taxpayer standing). Plaintiffs and defendants will file briefs with the Supreme Court arguing whether certiorari should be granted. If it is granted, then both sides will file additional briefs in the Supreme Court arguing the issue of standing; oral arguments would take place in Washington, and nothing further could happen until a decision is announced. If certiorari is not granted, then the stay will presumably be vacated by the 9th Circuit, and the mandate to the Honolulu District Court will then be implemented, to conduct further proceedings regarding whether it is constitutionally permissible for the State of Hawai'i to give tax dollars to the Office of Hawaiian Affairs for a racially exclusionary group of beneficiaries..

Pursuant to the motion for a stay, granted by the 9th Circuit Court on November 21, 3006, the Attorney General of the State of Hawai'i filed with the U.S. Supreme Court on February 2, 2006 a petition for a writ of certiorari, on behalf of Governor Lingle and the State of Hawai'i. The petition asks the Supreme Court to decide whether the Arakaki plaintiffs have standing as state taxpayers to challenge a federal law, and other procedural issues. For about 5 weeks the Attorney General's office chose not to make its petition for certiorari available in electronic form. (The U.S. Supreme Court requires that documents filed with them must be printed by old-fashioned methods rather than printed by a computer directly from a word processing program. Although the Attorney General's office undoubtedly created its document on a computer and printed it by computer for delivery to a printing company to be printed the old-fashioned way for the Supreme Court; nevertheless the Attorney General's office refused to make the document available in electronic form. Thus anyone wanting to read the petition would need to go to the courthouse to get a copy made, at great expense.) However, after an additional request, the document was finally made available in electronic form on March 9, 2006. The State of Hawaii is the only defendant in Arakaki #2 who has filed anything with the U.S. Supreme Court regarding this lawsuit.

12 preliminary pages including table of contents and table of authorities. 21 pages of substantive argument, 197 pages of appendices including portions of the U.S. Constitution, Hawaii Revised Statutes, Hawaii statehood Admission Act, Hawaiian Homes Commission Act, and earlier pleadings or rulings in this Arakaki#2 lawsuit at the District Court and 9th Circuit Court.

Whether state taxpayers have standing to challenge the actions of state government or state agencies that expend, or involve the use of, state taxpayer dollars, simply because they pay taxes to the state?

I. The issue of whether state taxpayers have standing to challenge the actions of state government simply because they pay taxes to the state presents an important question of federal law that has not been, but should be, settled by the United States Supreme Court

II. The Ninth Circuit's ruling allowing state taxpayer standing conflicts with the decisions of at least five other circuits

III. Even if state taxpayers could satisfy the requirements of Article III, prudential concerns dictate dismissal of state taxpayer suits because the asserted harm is a "generalized grievance" shared in substantially equal measure by all or a large class of citizens

For the foregoing reasons, Petitioner respectfully asks that certiorari be granted in this case to resolve the very important and fundamental state taxpayer standing questions presented by this petition, and to eliminate the direct conflict between the Ninth Circuit and at least five other circuits.

At the very least, given that this Court's eventual ruling in the DaimlerChrysler Corp. v. Cuno/Wilkins v. Cuno case could effectively reverse the Ninth Circuit's state taxpayer standing precedent, this Court should, respectfully, at minimum hold this petition pending this Court's ruling in the Cuno case. See Stern, Gressman, Shapiro & Geller, Supreme Court Practice (7th Ed. 1993) at 249 ("In most [GVR] situations, the certiorari papers are held by the Court pending its plenary ruling, following which the summary reconsideration order is entered."). In the event this Court in the Cuno case does indeed adopt Petitioner's position, or otherwise contradicts or narrows the broad state taxpayer standing doctrine adopted by the Ninth Circuit, this Court could then simply grant this certiorari petition, vacate the Ninth Circuit's decision (to the extent it granted plaintiffs state taxpayer standing to pursue some of their claims), and remand to the Ninth Circuit for reconsideration in light of the ruling in the Cuno case.

On behalf of the Arakaki plaintiffs, attorney H. William Burgess filed with the U.S. Supreme Court on March 3, 2006 a CONDITIONAL CROSS-PETITION FOR A WRIT OF CERTIORARI.

1. Whether Cross-Petitioners have standing as beneficiaries of Hawaii's ceded lands trust: to challenge federal laws which require the present trustee (State of Hawaii) to breach its fiduciary duties (i.e., the duty of impartiality and the duty not to comply with illegal trust terms); and to sue Hawaii state officials to enjoin them from breaching the same fiduciary duties;

2. Whether Cross-Petitioners have standing as state taxpayers: to challenge federal laws which require the State of Hawaii to engage in racial discrimination; and to sue to enjoin state officials from implementing the federally mandated racial discrimination; and

3. Whether Cross-Petitioners have standing as state taxpayers (in addition to the right to challenge direct appropriations of tax revenues to the Office of Hawaiian Affairs, properly upheld by the Court of Appeals) to sue to enjoin state officials from racial discrimination in other ways which increase their state tax burden, such as: by issuing general obligation bonds or by transfers characterized as "settlement" or "trust revenues" or by lease of public lands at nominal consideration.

If this Court grants the petition for writ of certiorari filed by the Defendant-Appellee Governor of the State of Hawaii, then it should also issue a writ of certiorari to review the questions presented in this conditional cross-petition.

The petition filed by Mr. Burgess is available for download in pdf form, below. It consists of 12 preliminary pages (including table of contents), 30 pages of new substantive argument, and 118 pages of appendices which include the Annexation Act (1898), portions of the Organic Act (1900) and the Admission Act (1959); and various documents previously submitted to the U.S. District Court in Honolulu and to the 9th Circuit Court.

On behalf of the Arakaki plaintiffs, attorney H. William Burgess filed with the U.S. Supreme Court on March 7, 2006 a BRIEF IN OPPOSITION TO STATE'S PETITION FOR A WRIT OF CERTIORARI. The brief filed by Mr. Burgess is available for download in pdf form, below. It consists of a total of 18 pages covering the following points:

1. Whether this already long-delayed case, 4 years old and still enmeshed in litigating the threshold issue of standing, should be "held" further pending this Court's decision in Daimler-Chrysler v. Cuno.

2. Whether the time has come for this Court, respondents' last hope for a just and speedy adjudication, to take charge, resolve the standing questions and allow this important case to move forward to judgment on the merits.

A. Respondents have standing, not "simply because they pay taxes to the state," but because they are denied equal treatment which causes injury to their pocketbooks

B. Following annexation, Hawaiians' numbers increased steadily and they achieved political success

C. Admission Act §5(f) says "one or more". It does not require any additional special treatment for native Hawaiians or for any one of the other four purposes

E. The OHA laws and HHCA deny respondents the opportunity to compete for benefits on an equal basis. They are able and ready to apply if the state should cease using the racial classification

Piecemeal review of just the one "standing" issue raised by the petitioner would not only add further delay to this already unconscionably-delayed case, but might even foreclose indefinitely the practical ability of anyone in Hawaii to end the existing regime of invidious discrimi-nation by the Hawaii state government and its officials. Justice in this case has been denied for 4 years. Respondents pray that this Court will take charge; grant a writ of certiorari to both the petitioner and the respondents/ cross-petitioners; resolve all the standing questions; and allow this important case to move forward to judgment on the merits.

ARAKAKI PLAINTIFFS BRIEF IN OPPOSITION TO STATE'S PETITION FOR A WRIT OF CERTIORARI

On March 9, 2006, 20 states filed an amicus curiae brief in support of the Governor of Hawaii's petition for certiorari. They state the same question as the Governor and make generally the same arguments as she did. Following the table of contents and table of authorities there are 9 pages of substantive argument regarding the following points:

1. The Ninth Circuit's decision directly conflicts with precedent in the Second, Sixth, and Tenth Circuits and has created uncertainty in the law

2. The Ninth Circuit's evisceration of Article III's particularized injury requirement in cases initiated by state taxpayers dramatically undermines state sovereignty.

AMICUS BRIEF BY 20 STATES IN SUPPORT OF THE STATE OF HAWAII PETITION FOR A WRIT OF CERTIORARI, filed March 9, 2006:

What's next? The Governor and any of the other cross-respondents have until April 6th to file a brief or briefs in opposition to the cross-petition; and the plaintiffs have 10 days thereafter to reply to new points raised in the opposing brief or briefs. By mid April, the two petitions for certiorari and all briefs should be in the hands of the Supreme Court justices for their consideration.

The Arakaki #2 lawsuit must await a decision by the U.S. Supreme Court whether to grant certiorari on the issue of plaintiffs' standing as state taxpayers. If certiorari is denied, then presumably the case will be sent back to the U.S. District Court in Honolulu for further proceedings under Judge Mollway pursuant to the order of the 9th Circuit Court that over-ruled Judge Mollway's earlier dismissal of the case (However, it is always possible that the State or other defendants might find some other way to further delay the proceedings). In the very unlikely event that the Supreme Court grants certiorari, then further documents will be filed with the Supreme Court and oral arguments will probably be scheduled on the issue of "standing."

On May 8, 2006 the U.S. filed a brief in opposition to plaintiff's cross-petition, for the purpose of arguing that the U.S. should not be a party to this lawsuit. That brief and some commentary is provided later. But first, some news reports about what has happened so far in the lawsuit, and how Hawaiian Homestead leases are being awarded at an accelerated pace.

http://www.hawaiireporter.com/story.aspx?46c33d29-8a7c-41b4-b3cb-f9bfa5987a0b
Hawaii Reporter, March 16, 2006

Can Citizens Challenge Race-based Giveaways?
Both Sides, and 20 Other States, Want the Supreme Court's Answer

On Feb. 2, 2006, Hawaii Gov. Linda Lingle petitioned the U.S. Supreme Court for a writ of certiorari, arguing that state citizens, "simply because they pay taxes to the state" may not challenge her and other officials' giveaway of public money, land and privileges exclusively for one race. The petition asks the high court to grant certiorari (that is, review the judgment of the Ninth Circuit) and resolve the "very important and fundamental state taxpayer standing questions" presented.

The plaintiffs, Earl Arakaki and 13 other Hawaii residents, welcome the governor's petition as an opportunity for the Supreme Court to resolve all standing questions.

On March 3, 2006, the plaintiffs filed a Conditional Cross-Petition for a Writ of Certiorari, asking the Supreme Court, if it grants the Governor's petition, to also grant theirs; and review all the "standing" orders including those dismissing plaintiffs' "very important and fundamental" trust beneficiary standing, as well as the unprecedented orders restricting their state taxpayer standing.

On March 7, 2006, the plaintiffs filed a Brief in Opposition pointing out that they do not sue "simply because they pay taxes"; but because the state does not treat all taxpayers equally. It singles out plaintiffs and other taxpayers similarly situated and denies them the benefit of the part of their taxes used exclusively for those of the favored racial ancestry.

The aggregate injury to the state treasury and to the pocketbooks of Arakaki plaintiffs, and other taxpayers similarly situated, is over $1 billion to date and escalating.

This case is 4 years old and still bogged down in litigating the threshold issue of standing. Arakaki plaintiffs ask the Supreme Court to grant both petitions, settle all standing issues and allow this case to move forward to judgment on the merits.

On March 9, 2006, 20 other states filed an amicus curiae brief in support of the Governor of Hawaii's petition. They argue that “certiorari is necessary to restore certainty to the law.”

What's next? The governor and any of the other cross-respondents have until April 6th to file a brief or briefs in opposition to the cross-petition; and the plaintiffs have 10 days thereafter to reply to new points raised in the opposing brief or briefs. By mid April, the two petitions for certiorari and all briefs should be in the hands of the Supreme Court justices for their consideration.

Stay tuned. If the high court accepts certiorari, the idea that everyone should play by the same rules could soon be reinstated in the Aloha state.

H. William Burgess is a resident of Honolulu and the founder of Aloha for All, a group that is working to educate the community about the potential problems with the Akaka Bill. He can be reached via email at: hwburgess@hawaii.rr.com

http://starbulletin.com/2006/04/15/news/story07.html
Honolulu Star-Bulletin, April 15, 2006

New lease on life
The state begins a program to give Hawaiians 6,000 land leases over five years

Hawaiian Henry Kupihea hoped for 23 years that the state would someday give him property to build a home.

He got his wish last weekend when the state awarded 160 land leases to Hawaiians on Kauai in an effort to put the islands' native people back on the land.

"I was always on the waiting list, waiting to come home," Kupihea said Thursday. "It's so beautiful there. The ocean and the mountains are five minutes apart."

Kupihea, who is 50 percent Hawaiian, said he and many other Hawaiians need this kind of help because they would have a hard time financing a home by themselves. He looks forward to escaping $1,400 monthly rents for him and his four children.

The Department of Hawaiian Home Lands distributed the land leases for $1 per year last Saturday, part of an effort to give out 6,000 leases in five years, more than were issued in the first 80 years of the program, which started in 1921.

About 1,300 residential leases have been awarded since 2003. The latest are part of Kauai's largest development for native Hawaiians. The leases come from 200,000 acres statewide that were set aside by Congress in 1921, said Lloyd Yonenaka, spokesman for the department.

"The wrongdoings to the Hawaiian people put them at a disadvantage. There is a desire by many to see that wrong made right," said Micah Kane, chairman of the Department of Hawaiian Home Lands.

Any resident who is at least 50 percent Hawaiian is eligible to sign up for the lease program. The state has been trying to give out the leases more quickly, and it is offering programs to help people finance the mortgages for houses built on the land.

The Hawaiians who receive the leases still must pay for the house, but it could cost less than half as much after the land is already purchased, Yonenaka said. "The price of a home in Hawaii is astronomical," he said. "It'll help relieve the pressure on the market for affordable homes for everyone."

More than 700 people, including Gov. Linda Lingle, attended the meeting last Saturday when the state announced who would receive the leases. They were allocated first to the families who had been on the waiting list for the longest amounts of time.

The New Home Ownership Assistance Program provides home-buyer counseling and ownership readiness training. Another program gives Hawaiians more time to raise money for the home after they have been granted the lease.

About 18,000 people are on the residential waiting list for Hawaiian land leases, Yonenaka said. "This provides incentives for families to improve their quality of life," Kane said.

The Piilani Mai Ke Kai subdivision will be built in three phases on 71 acres on the coastline in Anahola in eastern Kauai.

Infrastructure improvements such as waterlines, roads and electricity will be paid for by the Department of Hawaiian Home Lands. Construction on the first 80 lots is expected to begin in a few weeks, and the first homes could be completed in about a year and a half.

"We're very happy for those who were awarded homestead leases," said Kauai Mayor Bryan Baptiste. "Many of them had been waiting years for this to happen, and now their dreams of owning a home have come true."

On May 8, 2006, the Solicitor General filed a brief for the United States in opposition to the cross petition, arguing that, although the Admission Act requires the State of Hawaii to continue to carry out the Hawaiian Homes Commission Act, and by doing so the State spends tax moneys using a racial classification and also breaches the ceded lands trust, the Plaintiffs lack standing to sue because: The U.S. "does not require the State of Hawaii to impose taxes to support those undertakings" and the HHCA and Admission Act "extinguished any trustee role that the United States might once have had."

1. Whether cross-petitioners have standing to sue the United States and challenge the constitutionality of a federal statute based on an alleged injury as a state taxpayer where the cause of that injury is not fairly traceable to the United States.

2. Whether cross-petitioners have standing as alleged trust beneficiaries to sue the United States for a breach of trust where they identify no trust for which they are beneficiaries and the United States is trustee.

ON CONDITIONAL CROSS-PETITION FOR A WRIT OF CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR THE NINTH CIRCUIT BRIEF FOR THE UNITED STATES IN OPPOSITION

OR, the brief can also be downloaded directly from the Aloha For All webpage maintained by plaintiffs' attorney H. William Burgess, at:

On May 17, 2006 plaintiffs attorney H. William Burgess filed a reply brief in response to the May 8 U.S. opposition to the cross petition. The reply brief explains why the United States must be a party to this litigation and why plaintiffs have standing. Some major arguments are:

"The Admission Act §4 and the compact requiring the State of Hawaii to adopt and carry out the HHCA, cause the United States to violate the Equal Protection component of the Fifth Amendment and 42 U.S.C. §1985; and cause the State of Hawaii to violate the Equal Protection component of the Fourteenth Amendment, H.R.S. §708-875 and also 42 U.S.C. §1985. Thus the very thing which makes the United States an important party to this case: its mandate that the State discriminate and its retained powers over the corpus and administration of the ceded lands trust; also puts the United States and the State of Hawaii, or their responsible officials, squarely within the definition of conspirators under 42 U.S.C. §1985 and accessories under the model penal code.

In the absence of the U.S. as a party, the Court cannot enjoin State officials from carrying out the HHCA or the OHA laws without exposing them to a risk of suit by the U.S. for breach of the 1959 compact to adopt the Hawaiian Homes Commission Act. This could be particularly adverse for the 7,350 or more existing homesteaders because, without the U.S. in the case and bound by the Court's judgment, the U.S. would still hold the sword over the heads of State officials. This would discourage and proba-bly prevent State officials, if Plaintiffs prevail, from allowing homesteaders to acquire the fee simple ownership of their lots.

PLAINTIFFS' REPLY BRIEF TO U.S. OPPOSITION TO PLAINTIFFS CONDITIONAL CROSS-PETITION:

http://honoluluadvertiser.com/apps/pbcs.dll/article?AID=/20060516/NEWS23/605160341/1001
Honolulu Advertiser, Tuesday, May 16, 2006

A unanimous decision by the U.S. Supreme Court in an Ohio case yesterday is being touted by the Office of Hawaiian Affairs and the state as the end of a taxpayer lawsuit challenging the use of state general funds for the Native Hawaiian organization.

In a 9-0 ruling, the Supreme Court rebuffed efforts by a group of taxpayers in Toledo, Ohio, to challenge nearly $300 million in tax breaks for DaimlerChrysler AG's new Jeep plant.

U.S. Chief Justice John Roberts said the alleged injury to the taxpayers was mere conjecture, and that they had no standing to challenge tax or spending decisions "simply by virtue of their status as taxpayers."

"It's dead," OHA attorney Robert Klein said about the taxpayer lawsuit challenging OHA funding. "There's absolutely nothing for the district judge (in Hawai'i) to consider anymore."

But H. William Burgess, lawyer for the taxpayers group that includes former Honolulu police officer Earl F. Arakaki and about a dozen others, said the high court's decision deals with issues different from the ones raised in his challenge.

Hawai'i Attorney General Mark Bennett agreed with Klein, saying the Supreme Court "definitely stated state taxpayers standing does not exist as a doctrine."

Burgess, however, said his clients and other taxpayers are singled out for "disadvantageous treatment" because they have to pay taxes to support programs, including OHA, but are denied the right to obtain the benefits because of their ancestry.

Burgess filed the lawsuit, now called Arakaki v. Lingle, challenging the constitutionality of government funding for the Hawaiian Home Lands program and OHA because their programs are aimed at benefitting residents with Hawaiian ancestry.

In 2004, U.S. District Judge Susan Oki Mollway threw out the lawsuit, but the 9th U.S. Circuit Court of Appeals last September reinstated only part of the suit, limiting it to the taxpayers challenging state general fund money going to OHA.

OHA gets about $2.8 million a year from the state general fund, a fraction of the agency's $28.5 million annual operating budget, OHA officials have said.

Bennett's office asked that the U.S. Supreme Court essentially hold off reviewing the appeals court ruling until yesterday's decision because both cases involved the issue of whether taxpayers have legal standing to challenge how the state spends it money.

Bennett said he believes the U.S. Supreme Court will now vacate the appeals court ruling in the coming months, a move that essentially would end the taxpayer suit against OHA.

He said Hawai'i, as well as other states, filed a friend-of-the-court brief urging the Supreme Court to declare the Toledo taxpayers did not have legal standing.

The message from the Supreme Court ruling is that states "will not be held hostage to lawsuits" brought by people with "no direct connection to the issue at hand," said W. Frank Fountain, DaimlerChrysler's senior vice president for government affairs and public policy.

To lure a $1.2 billion Jeep assembly plant to the area, the city of Toledo and two local school districts gave the company a 10-year exemption from property taxes, and the company received additional investment tax credits against the state's corporate franchise tax.

The court disagreed with the taxpayers' argument that their local and state tax burdens were increased by the tax breaks.

"A taxpayer-plaintiff has no right to insist that the government dispose of any increased revenue it might experience as a result of his suit by decreasing his tax liability or bolstering programs that benefit him," the chief justice wrote. "To the contrary, the decision of how to allocate any such savings is the very epitome of a policy judgment."

http://starbulletin.com/2006/05/19/editorial/editorial02.html
Honolulu Star-Bulletin, May 19, 2006
EDITORIAL

THE ISSUE
The U.S. Supreme Court has disallowed people the right, as taxpayers, to challenge city and state expenditures in court.

STATE programs that provide assistance to Hawaiians have gained protection by a U.S. Supreme Court ruling that taxpayers cannot challenge state expenditures in court. The ruling should bring an end to a lawsuit alleging that such programs are racially discriminatory, but the programs still might be legally vulnerable in the absence of Hawaiian sovereignty.

While the ruling in an Ohio case appears to doom the Hawaii lawsuit, it could prompt the programs' adversaries to change strategy. Their only recourse might be to find plaintiffs who can claim they specifically -- not hypothetically -- were denied benefits, much as children who claimed they were denied admission to Kamehameha Schools because of racial discrimination.

The Supreme Court has long disallowed people to challenge particular federal expenditures by mere virtue of being federal taxpayers. Recognizing that precedent, a three-judge panel of the 9th U.S. Circuit Court of Appeals last year upheld District Judge Susan Mollway's dismissal of a challenge to federal money going to Hawaiian programs.

However, the panel ruled that Earl Arakaki and other plaintiffs could challenge the funneling of state tax dollars to the Office of Hawaiian Affairs. Only one-tenth of OHA's budget comes from state money; most comes from the Hawaiian Home Lands trust, which Mollway and the appellate judges shielded from the Arakaki lawsuit.

The Supreme Court on Monday unanimously rejected a lawsuit by a group of Ohio taxpayers challenging nearly $300 million in city and state tax breaks for DaimlerChrysler AG's new Jeep plant in Toledo. That should bring a finishing touch to the Arakaki suit.

The ruling affords city and state programs the same protection that federal programs have had against taxpayer lawsuits.

On Monday June 12, 2006 the U.S. Supreme Court ruled on both petitions for certiorari. The rulings were announced on the "order list" published for that date:

The petition for a writ of certiorari is granted.The judgment is vacated and the case is remanded to the United States Court of Appeals for the Ninth Circuit for further consideration in light of DaimlerChrysler Corp.v.Cuno , 547 U.S.___(2006).The Chief Justice took no part in the consideration or decision of this petition.

05-1128 ARAKAKI,EARL F.,ET AL.V.LINGLE,GOV.OF HI,ET AL. The petition for a writ of certiorari is denied.The Chief Justice took no part in the consideration or decision of this petition.

While the two rulings are a blow to the Arakaki plaintiffs, they do not necessarily mean the case is over. The case will go back to the Ninth Circuit. Both side will file further legal briefs and then the 9th Circuit 3-judge panel whether the DaimlerChrysler case changes its earlier decision which upheld plaintiffs’ standing as state taxpayers to challenge appropriations of tax moneys to OHA.

The Supreme Court in DaimlerChrysler eliminated state taxpayer standing suits where the plaintiffs are suing “merely because they pay state taxes” but do not suffer any concrete pocketbook injury different from that suffered by state taxpayers generally. If the federal courts adjudicate those kinds of claims, they would be forever second-guessing decisions of state governments.

Arakaki plaintiffs’ claims are not “merely because they pay taxes”, but because they are excluded, solely because they lack the favored racial ancestry, from the benefit of their state taxes paid to OHA. Those taxpayers with the favored ancestry benefit from the taxes paid by plaintiffs. The Constitution bars states from using any racial classification unless it passes strict scrutiny, i.e., it is narrowly tailored to serve a compelling state interest. Federal courts regularly adjudicate claims that state governments and their officials engage in racial discrimination which causes genuine pocketbook injuries to plaintiffs.

The fact that Chief Justice Roberts did not participate in consideration or decision of either of these petitions is probably a recusal based on the fact that he was attorney for the State of Hawai'i arguing for the defendants in the Rice v. Cayetano case.

Native Hawaiians suffered a big political defeat last week but the U.S. Supreme Court offered some legal hope for the sovereignty movement on Monday.

Just days after the Senate killed the Native Hawaiian recognition bill, the justices intervened in a Native Hawaiian case. In a short order, the high court ordered new proceedings in a lawsuit filed by non-Natives against the state of Hawaii.

The lawsuit accuses the state's Office of Hawaiian Affairs of violating the U.S. Constitution by setting aside money for Native Hawaiian-only programs. The 9th Circuit Court of Appeals last August ruled that the non-Natives, as taxpayers, have legal standing to bring the case.

But a fresh ruling from the Supreme Court has changed the landscape. In a unrelated case, the justices ruled unanimously that a group of taxpayers in Ohio couldn't challenge the state's spending decisions simply because they are taxpayers.

In response, the justices vacated the 9th Circuit's ruling in the Native Hawaiian lawsuit and sent the case back to the appellate court for "further consideration" in light of their recent May 15 ruling.

And in a significant development, Chief Justice John G. Roberts "took no part in the consideration or decision of this petition," yesterday's order stated. Although no reason was given, he previously defended the state of Hawaii before the Supreme Court by arguing that Native Hawaiians deserve the same treatment as American Indians and Alaska Natives.

There is no guarantee that the 9th Circuit will dismiss the case in favor of Hawaii. Even if the lawsuit is thrown out, the non-Natives could try to push the issue of Native-only funding in the state courts.

But reconsideration gives the state some rest in its ongoing legal battle to preserve Native Hawaiian programs, services and benefits. In the last six years, the state has lost four major lawsuits -- including the one that Roberts took on -- filed by non-Natives who say Native-only programs are illegal because they are based on race.

The most recent case involves a private school that restricts admission to Native Hawaiians. A three-judge panel of the 9th Circuit ruled that the policy violates the U.S. Constitution but the full court has since decided to rehear the controversy.

Advocates for Native Hawaiians argue that federal recognition of a Native governing entity will resolve these kinds of disputes. By extending the self-governance policy to Native Hawaiians, they hope to protect the land, culture, heritage and rights of the island's first inhabitants.

A procedural move in the Senate prevented the recognition bill from moving forward, however. After two days of debate last week, supporters secured 56 votes but that tally fell short of the 60 votes needed to clear the measure for an up or down vote.

"I am disappointed that we did not overcome the procedural obstacles to bring the bill to the floor, but I am heartened by the fact that 56 Senators supported our efforts," said Sen. Daniel Akaka (D-Hawaii), the primary sponsor of S.147, the Native Hawaiian Government Reorganization Act. "I have always said that we had the votes to enact this bill on an up or down vote."

Conservative Republicans rallied against the bill, saying it creates a new government based solely on race. They said the trust relationship that exists between the United States and American Indians and Alaska Natives cannot be extended to Native Hawaiians.

The Supreme Court, and the 9th Circuit, have never ruled directly on the issue of federal recognition for Native Hawaiians. Their decisions have said resolution of the matter resides with Congress.

The case is Lingle v. Arakaki, No. 05-988. Case documents and briefs can be found on the Native American Rights Fund site [Tribal Supreme Court Project].
http://www.indianz.com/my.asp?url=http://www.narf.org/sct/caseindexes/current/linglevarakaki.html

The case that prompted the reconsideration is DaimlerChrysler Corp. v. Cuno [Wikipedia Entry].
http://www.indianz.com/my.asp?url=http://en.wikipedia.org/wiki/DaimlerChrysler_Corp._v._Cuno

** Note from Ken Conklin: There are a large number of internet links provided at the bottom of this article, regarding the Akaka bill and issues related to this lawsuit. See the bottom of
http://www.indianz.com/News/2006/014445.asp?print=1

http://honoluluadvertiser.com/apps/pbcs.dll/article?AID=/20060614/NEWS01/606140353/1001
Honolulu Advertiser, Wednesday, June 14, 2006

The U.S. Supreme Court has rejected a taxpayer lawsuit challenging the use of state general funds for the Office of Hawaiian Affairs.

In its ruling, the high court indicated on Monday that the payment of taxes alone isn't enough to provide a group of Hawai'i residents with the legal standing needed to challenge the OHA funding.

Attorney General Mark Bennett and OHA officials yesterday said they were pleased with the high court's actions.

"We always felt state taxpayer standing was not a viable doctrine, so we're gratified that our legal strategy has been vindicated by the Supreme Court ruling," Bennett said.

The lawsuit is the last pending challenge to the constitutionality of government funding for OHA.

The high court's actions provide some relief to OHA and other government programs for Native Hawaiians that came increasingly under fire following the U.S. Supreme Court's 2000 decision in a case known as Rice v. Cayetano, in which the court ruled unconstitutional OHA's requirement that voters for its trustees must have Hawaiian blood.

In the wake of that landmark decision, former police officer Earl Arakaki and more than a dozen other residents filed a lawsuit challenging government funding for OHA and the Department of Hawaiian Home Lands.

After Monday's ruling, H. William Burgess, a lawyer for the taxpayer group, said other challenges may be filed later by someone denied benefits because they don't have Hawaiian blood.

Bennett and OHA administrator Clyde Namu'o said the state and OHA will contest those challenges.

"We believe that the Office of Hawaiian Affairs is constitutional and we would vigorously defend any future lawsuit challenging either the Office of Hawaiian Affairs, the Department of Hawaiian Home Lands or any other program that benefits Native Hawaiians," Bennett said.

As part of the ruling, the Supreme Court set aside an appeals court decision that had allowed part of the suit to go forward. It also granted the state's request to overturn the appeals court decision and ordered the 9th U.S. Circuit Court of Appeals to consider the case in view of a Supreme Court decision last month that ruled that Ohio tax-payers don't have legal standing to sue the state of Ohio over tax breaks for DaimlerChrysler.

The court on Monday also rejected a request by the lawyer for the taxpayers seeking to have the entire lawsuit reinstated.

Namu'o, who estimated OHA has spent about $395,000 in legal costs in defending itself in the case, said the organization would also vigorously oppose any future lawsuits.

Burgess said he was disappointed by the high court's rulings, but said he still believes the appeals court will allow its decision to stand. He said the Ohio decision does not apply to his case.

The suit was dismissed by U.S. District Judge Susan Oki Mollway, but a part of the case dealing with state general funds to OHA was reinstated by the appeals court in August. OHA estimated at the time that it received $2.8 million, or about 10 percent of its annual operating budget, from state general funds.

Last month, the high court issued a 9-0 ruling that essentially halted efforts by a group of taxpayers in Toledo, Ohio, who were challenging nearly $300 million in tax breaks for DaimlerChrysler AG's $1.2 billion Jeep assembly plant.

At the time, Bennett and Robert Klein, OHA's lawyer, said the decision signaled an end of what had become known as the Arakaki lawsuit.

Burgess yesterday disagreed with the assessment that the high court's actions end the case. He said the Ohio ruling doesn't apply because in the Arakaki case, the taxpayers are treated differently and excluded from certain benefits because of their ancestry.

But Bennett said the Ohio ruling eliminated the basis of the taxpayer standing in the Arakaki case.

"I believe all that's left is the housekeeping order from the 9th Circuit (dismissing the Arakaki case)," Bennett said.

The brief orders said, without explanation, that Chief Justice John Roberts Jr. did not participate in the decisions.

Before he was appointed chief justice last year, Roberts was a private lawyer who was hired by the state to defend OHA's Hawaiians-only voting restriction in the Rice v. Cayetano case.

# March 2002: Earl Arakaki and about a dozen others file a lawsuit challenging constitutionality of government-supported Department of Hawaiian Home Lands and Office of Hawaiian Affairs, both of which benefit people of Hawaiian ancestry.

# August 2005: 9th U.S. Circuit Court of Appeals affirms the dismissal, but reinstates a portion of the lawsuit challenging state general funds going to OHA. The amount is about $2.8 million, 10 percent of OHA's annual $28.5 million operating budget.

# May 15, 2006: U.S. Supreme Court rules that taxpayers in Toledo, Ohio, have no legal standing to challenge nearly $300 million in tax breaks for DaimlerChrysler AG's new Jeep plant.

# Monday: The U.S. Supreme Court grants Hawai'i's appeal and overturns the 9th Circuit ruling. The court denies a request by lawyers for taxpayers asking that the entire Arakaki lawsuit be reinstated. The court sends case back to 9th Circuit for further consideration in view of the DaimlerChrysler decision.

http://starbulletin.com/2006/06/14/news/story06.html
Honolulu Star-Bulletin, June 14, 2006

9th Circuit is told to reconsider OHA ruling
The lawsuit seeks to halt state funding for Hawaiian programs

A lawsuit seeking to cut off public money used for native Hawaiian programs has suffered a setback in the U.S. Supreme Court.

The Supreme Court on Monday told an appeals court to reconsider whether taxpayers have the right to sue over how the government spends their money.

"It's likely the court will dismiss the case," said Clyde Namuo, administrator for the Office of Hawaiian Affairs. "That's a favorable ruling for us."

The Supreme Court ordered the 9th U.S. Circuit Court of Appeals to review whether taxpayers have standing to sue over lawmakers' tax or spending decisions.

The decision was prompted by a ruling in another case, in which the high court sided against a group of Ohio taxpayers who objected to nearly $300 million in tax breaks for a new DaimlerChrysler AG Jeep plant.

A lawyer for the Hawaii taxpayers making the claim, H. William Burgess, said the case is far from settled.

The 9th Circuit Court could stand by its decision last September that taxpayers do have legal standing to challenge state funding of Hawaiians-only programs, he said.

"In our case ... the state discriminates against them as taxpayers by making them pay taxes but denying them benefits," Burgess said. "You can't treat people unequally."

If the appeals court dismisses the lawsuit, Burgess said he may refile it with new plaintiffs who could show they were discriminated against by exclusive Hawaiian programs.

The lawsuit, originally filed four years ago, contended that programs through the Office of Hawaiian Affairs should not receive state funding on the grounds that they benefit only people of native Hawaiian ancestry.

U.S. District Judge Susan Oki Mollway threw out the lawsuit in 2004, but it was partially reinstated by the 9th Circuit Court last September, limiting it to the taxpayers challenging general fund money going to OHA.

The agency, created by the state in 1978, receives about $2.8 million a year from the state general fund. Its total annual operating budget is about $28.5 million.

On September 19, 2006 plaintiffs' attorney H. William Burgess filed with the 9th Circuit Court a supplemental brief defending the concept that plaintiffs have standing as state taxpayers, despite the Supreme Court's decision in DaimlerChrysler. This brief argues that "rather than closing the federal courthouse to all state taxpayers, the Court in DaimlerChrysler clarified and restated existing law upholding their standing where they show particularized, pocketbook injuries caused by tax and spending in violation of their fundamental constitutional rights"; and that the Arakaki plaintiffs have shown particularized pocketbook injuries caused by the fact that they are taxed to support state government programs which exclude them as beneficiaries solely on account of race.

On February 9, 2007 the 9th Circuit Court of Appeals fulfilled its duty to reconsider its earlier decision on plaintiffs' standing in view of the Supreme Court's decision on DaimlerChrysler. As noted above, the State of Hawaii had filed a petition for writ of certiorari to the Supreme Court, asking for a review of the 9th Circuit decision upholding the Honolulu Circuit Court's decision that plaintiffs have standing as state taxpayers. Plaintiffs, various defendants, and a group of 20 states filed briefs on this matter. The Supreme Court vacated the 9th Circuit's previous decision on taxpayer standing and remanded the case to the 9th Circuit for reconsideration in light of DaimlerChrysler. Now, on February 9, 2007 the 9th Circuit has decided that indeed the DaimlerChrysler decision causes the 9th Circuit to reverse its previous decision upholding taxpayer standing and to overturn the Honolulu District Court's decision granting taxpayer standing to the plaintiffs. The 9th Circuit was not willing to make a final decision; but only rules that plaintiffs do not have standing as taxpayers. The case is now remanded to the Honolulu District Court for further proceedings on whether plaintiffs have any basis for standing.

The 9th Circuit decision of February 9, 2007 makes very interesting reading, because it includes a clear and concise summary of all the major issues in this case and of the rulings to date and the reasons for those rulings. The decision was originally posted on the 9th Circuit website at

http://www.ca9.uscourts.gov/ca9/newopinions.nsf/ECF932AC9FA86A2E8825727D000220DB/$file/0415306.pdf?openelement

9TH CIRCUIT COURT OF APPEALS DECISION OF FEBRUARY 9, 2007 ON REMAND FROM THE SUPREME COURT, AND FURTHER REMANDING THE CASE TO THE HONOLULU DISTRICT COURT:

At first the Honolulu Advertiser posted a "breaking news" item on its website on Friday February 9, 2007 implying that the case is now finished. But the following day both Honolulu newspapers published full-length articles accurately reporting the news and describing what happens next. News reports follow, in chronological order.

http://www.hawaiireporter.com/story.aspx?317759a4-1b7f-4ee6-9791-38a32d5a0008
Hawaii Reporter, February 9, 2007

Plantiffs Challenged the Office of Hawaiian Affairs' Ability to Use Taxpayer Funds for Native Hawaiian-Only Programs

The Ninth Circuit Court of Appeals' panel decision on Arakaki v. Lingle issued on Friday, February 9, 2007, says that in view of the Daimler-Chrysler decision, "it appears to us that there are no plaintiffs who have standing to challenge the Office of Hawaiian Affairs funding" but "we are unwilling to make that final judgment on this record'. "Accordingly, we remand to the district for further proceedings."

This leaves the case about where it was after the 2005 decision of the Ninth Circuit and the Supreme Court's Daimler-Chrysler decision in 2006.

Plaintiffs still maintain they have standing as state taxpayers because, unlike the Ohio taxpayers in Daimler-Chrysler, the Arakaki plaintiffs suffer an injury different from Hawaii taxpayers generally.

The Arakaki plaintiffs are taxed to support racial discrimination against themselves. Taxpayers of the favored degree of Hawaiian ancestry suffer no such injury because they are eligible for the benefit of their taxes.

So, what's next? We could again petition the Supreme Court for certiorari or just wait until the case is remanded to the District Court and proceed there, possibly with amendments; or we could file a new suit.

http://the.honoluluadvertiser.com/article/2007/Feb/09/br/br6419085732.html
Honolulu Advertiser, Breaking News, Posted at 4:34 p.m., Friday, February 9, 2007

The 9th U.S. Circuit Court of Appeals today rejected a lawsuit by a group of Hawai'i taxpayers challenging state general funds going to the Office of Hawaiian Affairs.

The decision by the appeals court is in line with a U.S. Supreme Court decision last year that indicated payment of taxes alone isn't enough to provide the taxpayers with the necessary legal standing to challenge the state funding.

The high court sent the case back to the appeals court, paving the way for today's ruling.

The challenge was filed by Earl Arakaki and about a dozen other taxpayers who contended government money for OHA is unconstitutional because the organization was set up to benefit only those people with Hawaiian ancestry.

http://www.honoluluadvertiser.com/apps/pbcs.dll/article?AID=/20070210/NEWS20/702100352/1170/NEWS
Honolulu Advertiser, Saturday, February 10, 2007

A federal appeals court yesterday ruled against a group of Hawai'i taxpayers challenging the use of state general funds for the Office of Hawaiian Affairs.

The move is in line with a U.S. Supreme Court decision last year that indicated payment of taxes alone isn't enough to establish the taxpayers have the necessary legal standing to challenge the state funding.

Yesterday's decision by a three-member panel of the 9th U.S. Circuit Court of Appeals also found that the taxpayers did not have standing to challenge the state funding.

But instead of dismissing the taxpayer lawsuit, the appeals court sent the case back to U.S. District Judge Susan Oki Mollway.

H. William Burgess, lawyer for Earl Arakaki and about a dozen other Hawai'i taxpayers, said he wasn't happy with the ruling. He said the appeals court could have found that last year's U.S. Supreme Court ruling, in an Ohio case, did not apply and ruled that his clients could pursue their lawsuit.

State Attorney General Mark Bennett said he was pleased that the appeals court ruled in favor of the state on all "substantive issues." But he said the appeals court could have ordered that the case be dismissed instead of sending it back to the trial court. Bennett said he didn't know what was left for Mollway to decide.

Bennett said he anticipates that Mollway soon will hold a conference with the lawyers on how to proceed with the case.

The decision is the latest development in the taxpayer lawsuit alleging that the use of government money for OHA is unconstitutional because the organization benefits only those of Hawaiian ancestry.

Mollway initially threw out the lawsuit, filed in 2002, challenging government money to OHA and the Department of Hawaiian Home Lands. But in 2005, the appeals court reinstated the portion of the suit dealing with OHA, which gets about 10 percent of its operating budget from state general fund money.

In June last year, the U.S. Supreme Court rejected that part of the suit and indicated that the payment of taxes alone isn't enough to give the residents legal standing.

The high court cited a previous ruling that threw out an Ohio taxpayer lawsuit challenging $300 million in tax breaks for a DaimlerChrysler Jeep assembly plant.

The high court sent the Hawai'i case back to the appeals court to issue a ruling based on the Ohio case, which led to yesterday's decision.

"In light of the Supreme Court's decision in DaimlerChrysler, we now hold that plaintiffs, as state taxpayers, lack standing to bring a suit claiming that the OHA programs that are funded by state tax revenues violate the Equal Protection Clause of the Fourteenth Amendment," the panel's unanimous opinion said.

"Although it is not clear that any plaintiffs have standing in any other capacity to challenge the OHA programs, we remand to the district court for further proceedings."

The 36-page opinion was written by appeals Judge Jay Bybee, who wrote the decision for a three-member panel that Kamehameha Schools' admissions policy of giving preference to Hawaiians violated federal law. A larger panel of the 9th Circuit later reversed that ruling.

OHA Chairwoman Haunani Apoliona yesterday said she was pleased with the decision, but warned that Hawaiians must gain political status to ward off future legal challenges.

"Although we have prevailed in the legal battle, we must continue our efforts to recognize Native Hawaiians as an indigenous people with a sovereign identity," she said.

http://starbulletin.com/2007/02/10/news/story02.html
Honolulu Star-Bulletin, February 10, 2007

OHA challenge set back
A court rules against taxpayers trying to stop state funding of pro-Hawaiian activities

The 9th U.S. Circuit Court of Appeals ruled yesterday against a group of Hawaii taxpayers who say that the state unconstitutionally discriminates against non-Hawaiians by giving money to programs that only benefit Hawaiians.

The federal appeals court stopped short of dismissing the 2002 lawsuit but overturned its own earlier decision by finding the 14 taxpayers lack legal standing to challenge state funding of the Office of Hawaiian Affairs. The court sent the case back to U.S. District Court in Honolulu to determine if any of the plaintiffs are eligible "in any other capacity."

State and OHA attorneys said they expect the decision will put an end to the suit.

OHA attorney Sherry Broder said, "I consider this a victory for the Office of Hawaiian Affairs and native Hawaiians. The court found in favor of native Hawaiians."

But H. William Burgess, lawyer for Earl Arakaki and 13 others, said "it's not the end."

Burgess appealed the case to the appellate court after U.S. District Judge Susan Oki Mollway dismissed the lawsuit in 2004. In September 2005 a three-member panel of the 9th Circuit reinstated it, ruling that taxpayers could challenge the state for giving general fund money to OHA.

Last May, a U.S. Supreme Court ruling in a similar case appeared to doom the Hawaii taxpayers' challenge. The high court rejected a lawsuit by a group of Ohio taxpayers who challenged nearly $300 million in state and city tax breaks for DaimlerChrysler AG to build an auto plant in Toledo.

A month later, the Supreme Court instructed the appellate court to reconsider the Hawaii taxpayers' standing.

"Our case is different," Burgess said. "You have to have some specific injury to invoke court jurisdiction. Just because you pay taxes, you can't have a court decide on every state decision. In DaimlerChrysler the plaintiffs didn't suffer injury different from other Ohio taxpayers.

"In our case the plaintiffs have to pay taxes to support racial discrimination against themselves," Burgess said. "They suffer a specific pocketbook injury because not all taxpayers are eligible for the benefits. Taxpayers of Hawaiian ancestry don't suffer any injury because they are eligible for benefits."

"I still think ultimately we will prevail. This is just a bump in the road," he said.

State Attorney General Mark Bennett said, "We hoped the 9th Circuit would end the lawsuit. We're disappointed they continued it for further proceedings. We are pleased that on every substantive issue, the 9th Circuit ruled in our favor.

"We believe it's a short procedural delay. There's no possible basis on which plaintiffs can proceed with this lawsuit."

OHA Chairwoman Haunani Apoliona applauded the ruling but said it underscores the need for federal legislation that provides political recognition for native Hawaiians.

She called for passage of the Native Hawaiian Government Reorganization Act, known as the Akaka Bill after its author, U.S. Sen. Daniel Akaka. "It will benefit not only native Hawaiians, but the entire state of Hawaii," she said in a press release.

OHA receives about 10 percent of its $28.5 million operating budget from the state.

The lawsuit originally also named the Department of Hawaiian Home Lands. Mollway dismissed the agency as a defendant, saying the program was mandated by federal law and that state taxpayers had no standing to challenge federal law.

At issue: Fourteen taxpayers sued the state, saying it is discriminatory to use tax funds to pay for Hawaiians-only programs.

The ruling: The 9th U.S. Circuit Court of Appeals rules that the plaintiffs did not have legal standing to file the lawsuit.

What's next: The appeals court sent the case back to U.S. District Court in Honolulu where the plaintiffs vowed to continue to pursue their complaints.

http://starbulletin.com/2007/04/18/news/story06.html
Honolulu Star-Bulletin, April 18, 2007

Sixteen taxpayers who challenged the constitutionality of state funding of the Office of Hawaiian Affairs had no standing to bring their claims, a federal judge has ruled.

U.S. District Judge Susan Mollway's order Monday in the long-running Arakaki v. Lingle case brings to an end the lawsuit that initially began in March 2002 as Arakaki v. Cayetano, said Sherry Broder, one of three attorneys representing the state.

The plaintiffs disagree and intend to file an amended complaint by April 30, said plaintiff attorney H. William Burgess. "It ain't over yet," he said. Before the court dismisses a case for lack of standing or lack of a party, the filing of an amended complaint is allowed, Burgess said, adding, "It's not unusual."

The 5-year-old case has gone through the 9th U.S. Circuit Court of Appeals and the U.S. Supreme Court, which essentially ended the case last year after it issued a decision in Daimler Chrysler Corp. v. Cuno, ruling that there was no taxpayer standing in cases of this sort, Broder said.

The U.S. Supreme Court sent it back to the 9th Circuit, which issued a new opinion and sent it back to Mollway to issue a final judgment.

The appellate courts essentially found that the plaintiffs had suffered no individualized injury as taxpayers. To challenge governmental programs, the taxpayer must demonstrate that they have suffered "a particularized concrete injury that is redressable by the court's judgment," said Broder, quoting the 9th Circuit.

After asking the parties to submit briefings on any remaining issues and following discussions with the parties, "this court determines that there are no such issues, as no plaintiff has standing to challenge OHA funding," Mollway wrote in her order.

While she indicated that a motion to add parties to the complaint would be denied, Mollway gave the plaintiffs until April 30 to file an amended complaint to preserve the record.

http://www.honoluluadvertiser.com/apps/pbcs.dll/article?AID=/20070419/NEWS23/704190337/1001/NEWS
Honolulu Advertiser, Thursday, April 19, 2007

The Office of Hawaiian Affairs scored a major legal victory when a federal judge dismissed a lawsuit that sought to stop the state from funding the agency's Hawaiians-only programs.

U.S. District Judge Susan Oki Mollway has held that the 16 taxpayers who challenged the constitutionality of the funding had no standing to bring their claims, according to lawyers in the case.

OHA attorney Sherry Broder said the ruling Monday brings to an end the lawsuit filed by the plaintiffs in March 2002.

But lawyer H. William Burgess, representing the plaintiffs, said the court granted him permission to file an amended complaint by April 30, which he intends to do.

Burgess, contacted by the Associated Press, would not say what changes he plans to make to the complaint.

The case has been reviewed by the U.S. Supreme Court and the 9th U.S. Circuit Court of Appeals.

The high court told the appeals court last June to reconsider whether taxpayers have the right to sue over how the government spends its money. In February, the appeals court ruled that taxpayers don't have the power to sue the state on the issue.

Broder said the Supreme Court and the appeals court explained that the plaintiffs had suffered no individualized injury as taxpayers and so couldn't sue.

"The federal courts have concluded that these plaintiffs are not hurt by the activities of OHA and thus they do not have standing to bring a legal challenge to OHA," Broder said.

The court held that the concerns of the plaintiffs are political grievances best left to the legislative and executive branches of government, she said.

Om April 30, 2007 plaintiffs attorney H. William Burgess filed an amended complaint to convert the lawsuit to a class action on behalf of all property owners who have no Hawaiian native ancestry or less that 50% native ancestry, arguimg that their property taxes are higher than necessary because of illegal racial discrimination in the form of zero or negligible property taxes assessed to residents of the Hawaiian homesteads, and other tax discrimination.

EARL F. ARAKAKI, et al.,

Plaintiffs,

LINDA LINGLE, et al.,

State Defendants,

HAUNANI APOLIONA, et al.,

OHA Defendants,

MICAH A. KANE, et al.,

HHCA/DHHL Defendants,

THE UNITED STATES OF AMERICA, and JOHN DOES 1 through 10,

Defendants.

STATE COUNCIL OF HAWAIIAN HOMESTEAD ASSOCIATION and ANTHONY SANG, SR.,

Defendant/Intervenors,

HUI KAKO’O’AINA

HO’OPULAPULA, BLOSSOM

FEITEIRA AND DUTCH SAFFERY,

Defendant/Intervenors.

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CIVIL NO. 02-00139 SOM/KSC

PLAINTIFFS’ MOTION FOR LEAVE TO FILE AMENDED COMPLAINT;

MEMORANDUM IN SUPPORT;

EXHIBIT A: AMENDED COMPLAINT;

CERTIFICATE OF SERVICE

HEARING

DATE:___________

TIME:____________

JUDGE: SUSAN OKI MOLLWAY

Please take notice that Plaintiffs will move the court in her courtroom in the U.S. District Court, 300 Ala Moana Blvd., Honolulu, Hawaii on the __ day of May, 2007, at _____ o’clock ___m., or as soon thereafter as counsel may be heard, for leave to file an amended complaint substantially in the form attached hereto as Exhibit A.

This motion is based Rule 15 F.R.Civ.P., which provides that leave to amend shall be freely given when justice so requires, and on the attached memorandum in support and the records and files of this case.

Rule 15 (a) F.R.Civ,P. provides that leave to amend “shall be freely given when justice so requires.”

However, unlike amendments as of course, amendments under the second portion of subdivision (a) may be made at any stage of the litigation.[FN11] The only prerequisites are that the district court have jurisdiction over the case and an appeal must not be pending.[FN12] If these two conditions have been satisfied the court will proceed to examine the effect and the timing of the proposed amendments to determine whether they would prejudice the rights of any of the other parties to the suit.[FN13] If no prejudice is found, then leave normally will be granted.[FN13.1]

6 Federal Practice and Procedure, Wright and Miller § 1484

Our analysis would not be complete without recognizing the strong policy favoring leave to amend. In dismissing for failure to state a claim, "a district court should grant leave to amend even if no request to amend the pleading was made, unless it determines that the pleading could not possibly be cured by the allegation of other facts." Lopez v. Smith, 203 F.3d 1122, 1127 (9th Cir.2000) (en banc) (internal citations omitted).

Thus, the standard is whether the pleading can possibly be cured by the allegation of other facts. As to the proposed new Count I, the only possible answer is yes, any defect can easily be cured by rewording. The complaint as filed March 2002 at paragraph 62(c) alleges that “The exemption of Homestead lots from real property taxes also harms Plaintiffs as taxpayers.” That language unambiguously put the present Defendants on notice that Plaintiffs were seeking redress for being deprived of the real property tax exemption. They can not claim surprise or prejudice or even any possible monetary loss since they do not collect real property taxes.

As to joining the counties as defendants, Rule 19 is couched in mandatory terms: A person who is subject to service and whose joinder will not deprive the court of jurisdiction “shall be joined as a party” if “in the person’s absence complete relief cannot be accorded among those already parties.”

As to the proposed rewordings of Counts II and III, the same plaintiffs are still seeking the same redress from the same defendants arising out of the same nucleus of facts. The arguments and theories are somewhat revised but, the rules do not and could not prevent the court from being exposed to other theories and, if they are valid, justice requires that they be adopted by the court. In Sherman v. Hallbauer, C.A.5th, 1972, 455 F.2d 1236, plaintiffs switched the legal theory on which they based their case in their memorandum in opposition to summary judgment. The court granted summary judgment for defendant on the basis of the theory set forth in the original complaint. The appellate court reversed stating that the summary judgment memorandum should have been construed as a motion to amend the pleadings and since it presented a strong theory supporting plaintiffs' case, summary judgment should not have been entered.

Fed. R. Civ. P. Rule 54(c) provides in relevant part, “every final judgment shall grant the relief to which the party in whose favor it is rendered is entitled, even if the party has not demanded such relief in the party’s pleadings. There can be no dispute that plaintiffs state a valid claim for relief from the racially discriminatory real property tax exemption. That relief can be granted by enjoining the counties to give the same exemption to Plaintiffs and all others similarly situated or to give it to no one.

As to Count II the Plaintiffs did not and do not complain merely by virtue of paying taxes. The gravamen of much of the complaint is in the biased way the government spends its tax money and allocates other public property. Giving tax credits to attract new business is not illegal. Racial discrimination is, unless it passes strict scrutiny. DaimlerChrysler did not repeal the Fifth or Fourteenth Amendments or the civil rights laws forbidding race discrimination. The court should, at a minimum, permit Plaintiffs to present evidence and full briefing before entering a final judgment.

As to Count III, DaimlerChrysler has no effect since federal trust law was in no way involved. The Ninth Circuit did not adopt this court’s trust theory (that beneficiaries only have standing to challenge mismanagement, and not to challenge partiality or compliance with illegal trust terms) but based its affirmance on the fact that Plaintiffs do not have standing to sue the U.S. because the U.S. is no longer the trustee. The amended complaint specifically alleges what has always been true, that the U.S. and the State and the counties or their respective officials are engaged in a mutual plan that unlawfully deprives Plaintiffs and others similarly situated, on racial grounds, of their rights as trust beneficiaries and as taxpayers and threatens to deprive them of their sovereignty as citizens.

Plaintiffs respectfully ask the court to allow Plaintiffs to file an amended complaint substantially in the form attached hereto and give the claims therein full and just hearing.

The undersigned hereby certifies that on the date set forth below, the foregoing document(s) will be duly served upon the following parties via process server, facsimile, hand delivery, U.S. Mail or certified U.S. Mail, postage prepaid.

MARK J. BENNETT, ESQ.

CHARLEEN M. AINA, ESQ.

GIRARD D. LAU, ESQ.

Dept. of Attorney General

State of Hawaii

425 Queen Street

Honolulu, Hawai`i 96813

Attorneys for State Defendants,

and HHCA/DHHL Defendants

SHERRY P. BRODER, ESQ.

Jon Van Dyke, Esq.

Melody K. Mackenzie, Esq.

841 Bishop Street, Suite 800

Honolulu, Hawai`i 96813

Attorney for Defendant

Trustees of the Office of Hawaiian Affairs

Robert G. Klein, Esq.

BECKY T. CHESTNUT, Esq.

Five Waterfront Plaza, Suite 400

500 Ala Moana Boulevard

Honolulu, Hawaii 96813

Attorney for Defendant-Intervenor SCHHA

EDWARD H. KUBO, JR., ESQ.

HARRY YEE, ESQ.

Office of the United States Attorney

PJKK Federal Building

300 Ala Moana Blvd. Suite 6100

Honolulu, Hawaii 96850

Attorneys for Defendant,

United States of America

ELLEN J. DURKEE, ESQ.

STEVEN MISKINIS, ESQ.

AARON P. AVILA, ESQ.

U.S. Department of Justice

Environmental & Natural Resources

Division, Appellate Section

P.O. Box 2795 (L’Enfant Station)

Washington, D.C. 20026

Attorney for Defendant,

United States of America

Yuklin Aluli, Esq.

AMBER WILLIAMS, ESQ.

415-C Uluniu Street

Kailua, Hawaii 96734

Attorneys for Defendant-Intervenors

EARL F. ARAKAKI, EVELYN C. ARAKAKI, EDWARD U. BUGARIN, SANDRA PUANANI BURGESS, PATRICIA CARROLL, ROBERT M. CHAPMAN, JOHN M. CORBOY, MICHAEL Y. GARCIA, TOBY M. KRAVET, JAMES I. KUROIWA, JR., FRANCES M. NICHOLS, DONNA MALIA SCAFF, JACK H. SCAFF, GARRY P. SMITH, THURSTON TWIGG-SMITH,

JAMES S. WARSON

Plaintiffs,

LINDA LINGLE in her official capacity as GOVERNOR OF THE STATE OF HAWAII; GEORGINA K. KAWAMURA in her official capacity as DIRECTOR OF THE DEPARTMENT OF BUDGET AND FINANCE; RUSS K. SAITO in his official capacity as STATE COMPTROLLER, and DIRECTOR OF THE DEPARTMENT OF ACCOUNTING AND GENERAL SERVICES; PETER YOUNG in his official capacity as CHAIRMAN OF THE BOARD OF LAND AND NATURAL RESOURCES; SANDRA LEE KUNIMOTO, in her official capacity as CHAIRPERSON OF THE DEPARTMENT OF AGRICULTURE; THEODORE E. LIU, in his official capacity as DIRECTOR OF THE DEPARTMENT OF BUSINESS, ECONOMIC DEVELOPMENT AND TOURISM; BARRY FUKUNAGA in his official capacity as INTERIM DIRECTOR OF THE DEPARTMENT OF TRANSPORTATION,

State Defendants,

MUFI HANNEMANN, in his official capacity as Mayor of the city and county of Honolulu; MARY PATRICIA WATERHOUSE, in her official capacity as Director of the Budget and Fiscal Services Department of the city and county of Honolulu; HARRY KIM, in his official capacity as Mayor of the county of Hawaii; WILLIAM TAKABA in his official capacity as the Director of the Department of Finance for the county of Hawaii; CHARMAINE TAVARES, in her official capacity as the Mayor of the county of Maui; KALBERT K. YOUNG, in his official capacity as Director of the Department of Finance for the county of Maui; BRYAN J. BAPTISTE, in his official capacity as the MAYOR OF THE COUNTY OF KAUAI; WALLACE G. REZENTES, JR., in his official capacity as the FINANCE DIRECTOR FOR THE COUNTY OF KAUAI,

County Defendants,

HAUNANI APOLIONA, Chairman, and ROWENA AKANA, DONALD B. CATALUNA, WALTER M. HEEN, ROBERT K. LINDSEY, COLETTE Y.P. MACHADO, BOYD P. MOSSMAN, OSWALD STENDER, and JOHN D. WAIHE=E, IV in their official capacities as trustees of the Office of Hawaiian Affairs,

OHA Defendants,

MICAH A. KANE, Chairman, and BILLIE ILIMA BACLIG, DONALD S.M. CHANG, STUART KEAHIAHI HANCHETT, MALIA PATRICE KAMAKA, FRANCIS KAHOU LUM, MAHINA MARTIN, TRISH MORIKAWA, MILTON PA, in their official capacities as members of the Hawaiian Homes Commission;

HHCA/DHHL Defendants

THE UNITED STATES OF AMERICA; DIRK KEMPTHORNE, in his official capacity as Secretary of the U.S. Department of the Interior; ALPHONSO JACKSON, in his official capacity as Secretary of the UNITED STATES Department of Housing and Urban Development,

FEDERAL Defendants

and

JOHN DOE DEFENDANTS 1 through 10.

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CIVIL NO. 02-00139 SOM/KSC

AMENDED CLASS ACTION Complaint for Declaratory Judgment

(Re: constitutionality of Office of Hawaiian Affairs, Hawaiian Homes Commission and related laws)

and for an Injunction;

Addendum

KAPU TO WE THE PEOPLE TO …

KAPU AGAIN?

Caption 7-0430

1. This is a class action brought under 42 U.S.C. §1983 for violations and threatened violations of the rights of Plaintiffs and the classes they represent to the equal protection of the laws under the Fifth and Fourteenth Amendments to the United States Constitution, and for racial discrimination in violation of 42 U.S.C. §§1985(3), 1986 and 2000d et seq, and for violation of the Ceded Lands Trust (sometimes referred to as the Public Land Trust) created under federal law in 1898.

As used in this complaint, “HHCA” means the Hawaiian Homes Commission Act; “DHHL” means the Department of Hawaiian Home Lands; and “OHA” means the Office of Hawaiian Affairs.

2. Jurisdiction is invoked pursuant to 28 U.S.C. §1331 (federal question), §§1343(3) and 1343(4) (civil rights).

3. Venue is in this judicial district pursuant to 28 U.S.C. §1391(b) because the acts giving rise to this action occurred and will occur in this district and the property that is the subject of this action is situated in this district.

4. All plaintiffs are citizens, registered voters, and taxpayers of the United States, the State of Hawaii and the counties in which each resides. Plaintiff John M. Corboy owns real property in the County of Maui. Plaintiff James Warson owns real property in the County of Hawaii. Plaintiff ***** owns real property in the County of Kauai. Each of the other Plaintiffs owns real property in the City and County of Honolulu.

5. Each plaintiff is a beneficiary of the Ceded Lands Trust created in 1898 when the public lands of the Republic of Hawaii were ceded to the United States, and accepted by the United States, with the requirement that all revenues or proceeds, with certain exceptions, “shall be used solely for the benefit of the inhabitants of the Hawaiian Islands for educational and other public purposes.

a. Applied to but not received from the county where he or she owns real property, exemption from real property taxes equivalent to the exemption given to Hawaiian Homestead lessees;

b. Applied for but not received from the State of Hawaii and the United States, concurrent disbursements of public money and allocations of public lands, benefits, privileges and immunities equivalent to those given exclusively for “native Hawaiians” (anyone with not less than one-half part of the blood of the races inhabiting the Hawaiian Islands previous to 1778) or “Hawaiians” (anyone with at least one drop of such ancestry); and

c. Requested but not received from the State of Hawaii or the United States impartial treatment equivalent to that accorded “native Hawaiian” beneficiaries in the administration of the Ceded Lands Trust.

7. Plaintiffs bring this suit as a class action pursuant to Rules 23(a), 23(b) and 23(c)(4)(B) of the Federal Rules of Civil Procedure on behalf of:

a. A class consisting of all residents of Hawaii with less than 50% or no Hawaiian ancestry (the “Class”);

b. A subclass consisting of all residents of Hawaii with no Hawaiian ancestry (the “Subclass”); and

c. Four additional “Municipal” subclasses, each consisting of all real property taxpayers in one of the four counties: Honolulu, Hawaii, Maui and Kauai who are not Hawaiian Homestead lessees or eligible to be.

8. The Class, numbers and prorata entitlements. Based on Census 2000 and the assumption of about 30,000 “native Hawaiian” residents (50% or more blood), as reportedly estimated recently by a prominent HHCA/DHHL Defendant, Plaintiffs estimate the Class has about 1,180,500 members.

9. Since “native Hawaiians” (50% or more Hawaiian ancestry) make up less than 5% of the State of Hawaii population, for every dollar going exclusively for “native Hawaiians”, in order to comply with the Constitution’s promise of Equal Protection of the laws to every person, nineteen dollars should be, distributed or allocated exclusively to or for plaintiffs and the other members of the Class (Hawaii residents with less than 50% or no Hawaiian ancestry).

10. Plaintiffs do not advocate “separate but equal”. Their preference would be for all governmental actors, federal, state and local, to stop treating people differently on the basis of race, color, ethnicity or national origin. However, for so long as federal, state or local governments treat people differently on the basis of race by disbursing or allocating public moneys, lands, privileges or immunities (including tax exemptions) exclusively for native Hawaiians or Hawaiians residing in Hawaii, Equal Protection of the laws for every person requires comparable disbursements and allocations to or for every other person residing in Hawaii.

11. The Subclass, numbers and comparable entitlements. Census 2000 counted 239,655 residents of Hawaii who reported some degree of Hawaiian ancestry (In Census terminology, Native Hawaiian alone or in combination). Subtracting those from the total Hawaii population of 1,211,537, the Subclass (residents with no Hawaiian ancestry) would have about 972,000 members.

12. Since “Hawaiians” (one drop) make up about 20% of the State of Hawaii population, for every dollar going exclusively for “Hawaiians”, four dollars should have been, and in the future should be, distributed or allocated exclusively to or for plaintiffs and the other members of the Subclass (Hawaii residents with no Hawaiian ancestry).

13. The Municipal Subclasses. To comply with the Constitution’s promise of Equal Protection of the laws and equal privileges and immunities under the law, the County Defendants, if they continue to exempt Hawaiian Homesteaders from some real property taxes, must extend that exemption to all real property taxpayers in their respective counties. If they make other disbursements or allocations exclusively for native Hawaiians or Hawaiians or deprive Plaintiffs or any members of the Municipal Class of their respective county of the equal protection of the laws or equal privileges and immunities under the laws, they must extend equivalent benefits to all Plaintiffs and members of the Municipal Class for their respective counties.

14. Plaintiffs seek to maintain the Class (Hawaii residents with less than 50% or no Hawaiian ancestry), pursuant to Rules 23(b) and 23(c)(4) on the issues challenging exclusive benefits for “native Hawaiians”; Plaintiffs, except for the three with part but less than 50% Hawaiian ancestry, seek to maintain the Subclass (Hawaii residents with no Hawaiian ancestry) on the issues challenging exclusive benefits for “Hawaiians.” Plaintiffs who pay real property taxes in each county seek to maintain the Municipal Subclass for their county to challenge the real property tax exemption given to Hawaiian Homesteaders, and other racially discriminatory laws, customs or usages of their respective counties.

15. The Class and Subclass and Municipal Subclasses are so numerous that joinder of all members of any of them is impracticable.

16. Common questions of law and fact exist as to all members of the Class and each of the subclasses and predominate over any questions solely affecting individual members of the Class and subclasses. Among the questions of law and fact common to the Class and each of the subclasses is whether defendants violated the Fifth and Fourteenth Amendments to the United States Constitution, and federal laws, 42 U.S.C. §§1985(3), 1986 and 2000d et seq. and federal trust law, by discriminating and by conspiring to discriminate against members of the applicable class or subclass on the basis of race or failed to protect the applicable class or subclasss members from conspiracy, and whether they will continue to do so.

17. Plaintiffs’ claims are typical of the claims of the members of the Class and they are adequate representatives of the Class.

18. Plaintiffs’ claims (except for the claims of the three Plaintiffs of Hawaiian ancestry) are typical of the claims of the Subclass and they are adequate representatives of the Subclass.

19. The claims of Plaintiffs who own interests in real property and are required to pay real property taxes but are not Hawaiian Homesteaders or eligible to be, are typical of the claims of the members of the Municipal subclass for that county and they are adequate representatives, respectively, of the Municipal Class for each county.

20. Plaintiffs and members of the Class and Subclass and each of the Municipal Subclasses have sustained damages, and will sustain damages in the future if defendants are not enjoined, because of the unlawful activities alleged herein. Plaintiffs have retained counsel competent and experienced in race discrimination litigation involving Hawaiian entitlements and intend to prosecute this action vigorously. Plaintiffs will fairly and adequately protect the interests of the Class and Subclass.and each of the Municipal Subclasses.

21. The Appendix to this amended complaint is a timeline of historic events showing Hawaii’s progression from monarchy and subjugation under the Kapu system in 1778 (when the Alii held the rule and possessed the land title and commoners were subject and landless) toward freedom, democracy and equality; the reversal of that course in 1921 by enactment of the Hawaiian Homes Commission Act, officially requiring racial discrimination in the Territory of Hawaii; and the subsequent progression back toward subjugation where a new Alii now holds the rule and threaten, by the Akaka bill, to make Plaintiffs and all other American citizens in Hawaii similarly situated, subject and landless.

23. HHCA §208(8), enacted by the United States Congress in 1921, provides in part that “an original [ Hawaiian homestead ] lessee shall be exempt from all taxes for the first seven years after commencement of the term of the lease.”

24. Under the State of Hawaii Constitution, Art. VIII, Sec. 3, adopted in 1978, “all functions, powers and duties relating to the taxation of real property shall be exercised exclusively by the counties, with the exception of Kalawao.”

25. The City and County of Honolulu and the counties of Hawaii, Maui and Kauai all recognize and implement the seven year real property tax exemption required by HHCA §208(8); and extend it to later years. They exempt Hawaiian home lands leased as homesteads (house lots, farm lots and pastoral lots) from real property taxes except for minimum taxes of, on information and belief, $25 in the case of Kauai and $100 in one or more of the other counties. By limiting the exemption to Hawaiian Homestead lessees, all four of the counties deprive Plaintiffs and others similarly situated of equal privileges and immunities. (Plaintiffs and all members of the Municipal subclasses, solely because they lack the “not less than one-half part of the blood of the races inhabiting the Hawaiian Islands previous to 1778,” can never become Hawaiian Homesteaders and their ownership of an interest in real estate in Hawaii, therefore, can never qualify for the exemption)

26. Because Hawaiian Homesteaders pay reduced or no real property taxes in every county, but still use county roads, sewers, water lines, refuse disposal, fire, police, safety and other county infrastructure and services, Plaintiffs and all members of the Municipal subclasses for their respective counties, have to pay more to carry them.

27. The most recent DHHL Annual Report shows 8,418 homestead leases in effect statewide as of June 30, 2006. Assuming a value for the homestead lots even well below median home values statewide, each of those homesteaders is probably saving about $1,000 annually; and the four counties altogether are under-collecting real property taxes in the aggregate of about $8.4 million annually. Each Plaintiff and every member of the four Municipal subclasses is therefore deprived of an equivalent annual saving of about $1,000, because his or her interest in real estate is denied the exemption given exclusively to Hawaiian Homesteaders, a status Plaintiffs and others similarly situated can never achieve solely because they lack the favored racial ancestry.

28. The counties’ discriminatory real property tax exemptions for Hawaiian Homestead lessees, are just one part of a common and unlawful plan of the federal, state and local governments or their officials, i.e., a conspiracy within the meaning of 42 U.S.C. §1985(3) to deprive persons of rights or privileges.

29. The United States, in 1921, enacted the HHCA and originated the explicitly racial discrimination in favor of “native Hawaiians” defined as “any descendant of not less than one-half part of the blood of the races inhabiting the Hawaiian Islands previous to 1778.”

30. Even after the Civil Rights Act of 1964 Title VI, 42 U.S.C. §2000d et. Seq. which provides “No person in the United States shall, on the ground of race, color, or national origin, be excluded from participation in, be denied the benefits of, or be subjected to discrimination under any program or activity receiving Federal financial assistance”, the United States has continued to support DHHL and multiple other Hawaiian-only or native Hawaiian-only entitlements. For example, in 1990, the United States amended the “HUD”, Housing and Community Development Act of 1974 to waive the race discrimination prohibitions regarding assistance to Hawaiian Home lands. Pub.L. 101-625, Sec. 911, added subsec. (d), thereby rather blatantly purporting to give HUD a free pass to discriminate by race in favor of native Hawaiians and against other United States citizens residing in Hawaii.

31. After 1978, the counties’ continuation of the discriminatory real property tax exemptions for Hawaiian Homestead lessees far beyond the first seven years of each homestead lease, indicates they have each enthusiastically joined in the unlawful plan.

32. The conspiracy between the federal, state and county governments continues at an accelerated pace. Since 2002 DHHL has received $37,013,550 of block grants from HUD. (DHHL Ann. Rept. FYE June 30, 2006 at 8 available online at the DHHL homepage.) That annual report praises the actions of the counties, state and federal governments; shows photos of some of the co-conspirators, including Governor Lingle on page 8, HUD Asst. Sec Orlando Cabrera with his hand on HHC Chairman Micah Kane’s shoulder on page 9, and, on page 13, a chart showing a five-fold increase in annual homestead lease awards in 2006 over 2004 and earlier years. As of June 30, 2006, under the Hawaiian Home Lands Recovery Act of 1995, 913 acres of Federal excess properties had been conveyed to DHHL. (Id. at 31).

33. On February 15, 2007 U.S. Senator Dan Inouye announced in his press release (available online at his Senate home page) that members of the Hawaii Congressional Delegation are pleased to have worked for the inclusion of nearly $62.5 million in Native Hawaiian initiatives into the final appropriations measure for the current fiscal year. Included among those items is “nearly” $9 million for Native Hawaiian Housing Block Grants for which DHHL is the sole recipient. On about April 4, 2007 Hawaii’s Congressional delegation filed with the U.S. Supreme Court in Doe v. Kamehameha Schools, et al No. 06-1202, an amicus brief urging the high court not to review KSBE’s racially discriminatory admission policy which, through the charitable exemption is subsidized by millions, perhaps hundreds of millions of federal and state dollars annually. To Plaintiffs’ knowledge, Hawaii’s Congressional delegation has never worked for any appropriations or exemptions exclusively for Plaintiffs or the members of the classes and subclasses Plaintiffs represent.

34. By the acts described above and by other laws, actions, customs and usages, the United States and the State of Hawaii or their respective officials, agents or agencies have conspired with and actively participated in and carried out with the City and County of Honolulu and the Counties of Hawaii, Maui and Kauai, the deprivation of the equal protection of the laws and the equal privileges and immunities of Plaintiffs and others similarly situated in violation of the Equal Protection clauses of the Fifth and Fourteenth Amendments and 42 U.S.C. §§1985(3), 1996 and 2000d et seq.

35. Moreover, with knowledge of the wrongs conspired to be done and about to be committed, and having the power to prevent, or aid in preventing the commission of the same, the United States and the State of Hawaii and its officials and the City and County of Honolulu and the counties of Hawaii, Maui and Kauai or their officials, failed or refused to do so and, accordingly, are liable under 42 U.S.C. 1986 for damages or declaratory and injunctive relief to prevent further injuries caused to Plaintiffs and all other members of each of the Municipal classes.

36. As a result of the aforesaid conspiracy and laws, acts, omissions and failures of the Federal Defendants, State Defendants, HHC/DHHL Defendants and County Defendants of each of the four counties, Plaintiffs and all members of each of the Municipal Classes have been deprived of the equal protection of the laws and equal privileges and immunities under the law and are likely to continue to suffer further such deprivations in the future unless such unlawful activities by Defendants are permanently enjoined.

Count II. Claims of the Class and Subclass for distributions and allocations

38. The State of Hawaii has distributed approximately $1 billion exclusively for the small group of about 30,000 “native Hawaiians” since 1990, taking into account cash, land in lieu of cash, and items such as liabilities incurred and debt service on moneys borrowed to pay OHA and DHHL for native Hawaiians, and the rent-free use of public land. (See spreadsheets itemizing losses to State treasury, Further Excerpts of Record 3A in the appeal of this case to the Ninth Circuit.) The State currently disburses about $45 million annually exclusively for “native Hawaiians.” OHA now holds about $400 million earmarked exclusively for “native Hawaiians.” The State, during that period has made no disbursements to or for the exclusive benefit of Plaintiffs and the other members of the Class.

39. Since 2002 the United States through its Department of Housing and Urban Development “HUD” had disbursed to DHHL $37,013,550 of block grants as of June 30, 2006. (DHHL Ann. Rept. FYE June 30, 2006 at 8 available online at the DHHL homepage.) In addition, as of June 30, 2006, under the Hawaiian Home Lands Recovery Act of 1995, 913 acres of Federal excess properties had been conveyed to DHHL. In addition, by a continuing Resolution by Congress in February 2007, an additional nearly $9 million for Native Hawaiian Housing Block Grants (for which DHHL is the sole recipient) was added to the funding for the current fiscal year ending September 30, 2007. Only native Hawaiians are eligible to receive awards of Hawaiian homestead leases. The United States, during that period has made no disbursements to or for the exclusive benefit of Plaintiffs and the other members of the Class.

40. Since “native Hawaiians” (50% or more Hawaiian ancestry) make up considerably less than 5% of the State of Hawaii population, for every dollar going exclusively for “native Hawaiians”, at least nineteen dollars should have been distributed exclusively to or for Plaintiffs and all the other members of the Class: At the current rate of $45 million per year, the State should be disbursing $855 million annually exclusively to or for the Class. Since OHA now holds about $400 million of public funds exclusively for “native Hawaiians”, the State should, to comply with the Constitution’s promise of Equal Protection of the laws to every person, disburse or allocate $7.6 billion exclusively to or for the benefit of Plaintiffs and all the other members of the Class.

41. For the same reason, the United States, to comply with the Constitution’s promise of Equal Protection of the laws to every person, should have disbursed or allocated, between 2002 and June 30, 2006, about $703 million of block grants exclusively to or for the benefit of Plaintiffs and all the other members of the Class. For the current fiscal year if it continues to disburse public moneys to persons selected on the basis of their race, it should disburse or allocate $171 million exclusively to or for the benefit of Plaintiffs and the other members of the Class.

42. Between July 1, 1990 and June 30, 2002 the State of Hawaii disbursed cash of over $78 million to OHA, in addition to the far greater amounts the State disbursed to OHA earmarked for native Hawaiians. The OHA Annual Report for the year ending June 30, 2005, financial statement showed revenue from State of Hawaii appropriations of $2,498,460.

43. Since “Hawaiians” (persons with at least one drop of Hawaiian ancestry) make up about 20% of the State of Hawaii population, for every dollar going exclusively for “Hawaiians”, at least four dollars should have been distributed exclusively to or for plaintiffs and all the other members of the Subclass: At the current rate of about $2.5 million per year distributed for Hawaiians on the basis of their race, the State should be disbursing $10 million annually exclusively to or for members of the Subclass.

44. On November 27, 2006 investigative Reporter Jim Dooley of the Honolulu Advertiser reported that OHA spent $2 million on its congressional lobbying efforts for the Akaka bill --- a third of all money spent by Hawaii companies, private citizens and government agencies on Washington lobbying since 2003. The report quotes the OHA administrator as saying that $2 million does not include $900,000 spent by OHA since 2003 to operate and staff a “Washington bureau”, nor does it include costs incurred by regular visits to Washington DC by OHA and other state officials, including Governor Linda Lingle, to seek passage of the Akaka bill. And it does not include $120,000 spent by Maui-based private developer Everett Dowling’s company on pro-Akaka bill Washington lobbying. Dowling has been involved in several development deals with the Department of Hawaiian Home Lands on Maui.

45. Subsequently the Chairperson of OHA said in a public Q&A blog sponsored by the Honolulu Advertiser, OHA planned to continue lobbying for the Akaka bill and would spend another $2 million if necessary.

46. The Akaka bill (S. 310/H.R. 505 in the current Congress) would give Hawaiians political power superior to that of other citizens and it would sanction the breakup and giveaway of some unknown amount, perhaps all, of the State of Hawaii’s lands, natural resources, appurtenant reefs, territorial waters, governmental power and authority and civil and criminal jurisdiction. Spending public moneys to lobby for its passage, therefore, not only deprives of Plaintiffs and all members of the Subclass of comparable amounts of the moneys spent, but threatens to deprive them of their political power and sovereignty over the entire State of Hawaii guaranteed in the Admission Act and the Hawaii Constitution.

47. On March 20, 2000 U.S. Senator Daniel Inouye’s office summarized then recent awards by Congress to Hawaiians (probably including some just for “native Hawaiians” and others for all “Hawaiians”) through grants and other programs of over $440 million. On February 15, 2007 Senator Inouye’s office announced the inclusion of $62.5 million for Native Hawaiian initiatives in the current fiscal year.

48. These federal disbursements for housing, medical, education and other benefits now given exclusively for “native Hawaiians” or “Hawaiians” in Hawaii should be extended to cover all citizens of Hawaii; or, to eliminate the racial discrimination, additional disbursements of 19 or 4 times, respectively, of those amounts must go exclusively to or for members of the Class or Subclass. At the current rate of $62 million annual federal disbursements, if the Constitution’s promise of Equal Protection of the laws to every person is to be honored, between $248 million and $1.18 billion more should be disbursed annually by the United States exclusively to or for the Class and Subclass.

49. By the acts described above and by other laws, actions, customs and usages, the United States and the State of Hawaii or their respective officials, agents or agencies have conspired and actively participated in and carried out the deprivation of the equal protection of the laws and the equal privileges and immunities of Plaintiffs and others similarly situated in violation of the Equal Protection clauses of the Fifth and Fourteenth Amendments and 42 U.S.C. §§1985(3), 1996 and 2000d et seq.

50. Moreover, with knowledge of the wrongs conspired to be done and about to be committed, and having the power to prevent, or aid in preventing the commission of the same, the United States and the State of Hawaii and its officials, failed or refused to do so and, accordingly, are liable under 42 U.S.C. 1986 for damages or declaratory and injunctive relief to prevent further injuries caused to Plaintiffs and all other members of each of the Municipal classes.

51. Plaintiffs and all members of the Class and the Subclass are likely to continue to suffer further such deprivations in the future unless such unlawful activities by Defendants are permanently enjoined.

53. The scope of the U.S. fiduciary duty in administering trust property is a question of federal law. U.S. v. Mason, 412 U.S. 391, 397 (1973).

54. The common law of trusts applicable to federally created trusts may be found in the Restatements of the Law of Trusts. For example, see Price v. Akaka, 828 F.2d 824, 827 (9^th Cir. 1991).

(1) If there are several beneficiaries of a trust, any beneficiary can maintain a suit against the trustee to enforce the duties of the trustee to him or to enjoin or obtain redress for a breach of the trustee's duties to him.

A breach of trust is a violation by the trustee of any duty which as trustee he owes to the beneficiary.

(1) The trustee is not under a duty to the beneficiary to comply with a term of the trust which is illegal.

(2) The trustee is under a duty to the beneficiary not to comply with a term of the trust which he knows or should know is illegal, if such compliance would be a serious criminal offense or would be injurious to the interest of the beneficiary or would subject the interest of the beneficiary to an unreasonable risk of loss. (emphasis added.)

56. The aforesaid conspiracy, the OHA laws, the HHCA/DHHL laws and the ongoing acts of the State Defendants, HHC/DHHL Defendants, OHA Defendants and County Defendants and the Federal Defendants in implementing and enforcing or assisting, aiding or abetting their enforcement and the ongoing administration and continuance in effect of the Homestead leases, breach the fiduciary duty those Defendants, owe to Plaintiffs and all members of the Class as beneficiaries of the Ceded Lands Trust and are ongoing violations of federal laws.

1. As to real property tax exemptions, in the absence of comparable exemptions for every real property taxpayer, the special exemptions from real property taxes given to Hawaiian Homesteaders by each of the four counties of the State of Hawaii violate the Fourteenth Amendment and 42 U.S.C. §§1985(3), 1986 and 2000d et. seq. and are invalid;

2. As to disbursements, allocations for native Hawaiians (50% or more), in the absence of comparable disbursements and allocations for every Hawaii resident, the disbursements or allocations of public money, land, revenues from public lands, or other benefits, privileges or immunities exclusively for native Hawaiians pursuant to the OHA laws, HHCA laws, including §4 of the Admission Act of March 18, 1959, the Native Hawaiian Housing Block Grant Program and related laws, violate the Fifth and Fourteenth Amendments and 42 U.S.C. §§1985(3), 1986 and 2000d et. seq. and federal trust law and are invalid;

3. As to disbursements, allocations for Hawaiians (one drop), in the absence of comparable disbursements and allocations for every Hawaii resident, the disbursements or allocations of public money, land, privileges or immunities exclusively for Hawaiians pursuant to the OHA laws, HHCA laws, the federal Native Hawaiian education programs under the No Child Left Behind Act, the native Hawaiian Health Care Improvement Act, and the Native Hawaiian Institutional Aid provision of the Higher Education Act, and related laws violate the Fifth and Fourteenth Amendments and 42 U.S.C. §§1985(3), 1986 and 2000d et. seq. and are invalid;

4. As to funds, property, investments now held. All moneys, investments, lands and property of any kind, and all earnings thereon and growth thereof, held by or for OHA, HHC or DHHL, are general funds and property of the State of Hawaii;

a. All such property is free of any trust or other encumbrance which restricts its use to the benefit of Hawaiians or native Hawaiians or prevents it from being used for the benefit of all of the people of Hawaii; and

b. All such property is within the care and control of the Defendant Governor to be used for such constitutional and non-discriminatory purposes as the State deems appropriate and in compliance with the public land trust for the inhabitants of the State of Hawaii; and

5. As to existing Homestead leases, continued management, administration and enforcement of the existing Homestead leases by HHC/DHHL defendants would be an ongoing and continuing violation of federal law (the equal protection clause of the Fourteenth Amendment and the Civil Rights Act) and a continuing breach of the State’s fiduciary duty, under federal law, as trustee of the public land trust;

C. Negotiation with existing homesteaders. Order the HHC/DHHL defendants and/or the State Defendants to negotiate with the existing Homesteaders for the State’s exercise of its right to withdraw the lands demised in a way that is fair to the Homesteaders but does not further violate the rights of plaintiffs and others similarly situated. ¹

D. Enjoin County Defendants. Permanently enjoin each of the County Defendants from collecting any further real property taxes until each of them has either given comparable exemptions for every real property taxpayer, or has repealed the special exemption for Hawaiian homesteaders and has assessed and is collecting taxes from Hawaiian homesteaders without any special exemption.

E. Enjoin further implementation of HHCA. Permanently enjoin the HHC/DHHL defendants from issuing any further Homestead leases, making any further grants, loans, guarantees, transfers, contracts or expenditures or planning, constructing or implementing any further developments relating to DHHL projects, or from otherwise further implementing, enforcing or carrying out the HHCA laws; permanently enjoin the United States and the State of Hawaii and their respective officials from enforcing or complying with the Compact in §4 of the Admission Act; and permanently enjoin all defendants from funding, assisting, aiding or abetting the implementation of the HHCA laws.

F. Enjoin further implementation of OHA laws. Permanently enjoin the OHA defendants from making any further expenditures for lobbying, advertising, litigation, grants, loans, or making any further guarantees, transfers, contracts or expenditures relating to the OHA laws or from otherwise further implementing, enforcing or carrying out the OHA laws; and permanently enjoin all other defendants from funding, assisting, aiding or abetting the implementation of the OHA laws.

G. Enjoin all other laws, acts. Permanently enjoin all defendants from, under color of any other federal, state or local law or by any actions, customs or usages, giving native Hawaiians or Hawaiians any right, title or interest in the ceded or public lands of the State of Hawaii, or the proceeds or income there from, or any right, privilege or immunity not given equally to all citizens of Hawaii.

H. Transfer of OHA property to State. Order the OHA defendants to transfer to the State defendants all moneys, investments, lands and property of any kind, and all earnings thereon and growth thereof, held by or for OHA;

I. Transfer of HHC/DHHL property to State. Order the HHCA/DHHL defendants to transfer to the State defendants all moneys, investments, lands and property of any kind, and all earnings thereon and growth thereof, held by or for HHC and DHHL;

J. Retain jurisdiction. Retain jurisdiction to exercise its equitable powers and issue such further orders in aid of execution of its judgment, to resolve disputes as to settlements between the State defendants and the individual Homesteaders and to accomplish, to the greatest extent possible, either a global settlement or final adjudication of all related claims.

K. Costs, attorneys fees, other relief. Allow plaintiffs their costs herein, including reasonable attorneys’ fees, and such other and further relief as is just.

This timeline of historic events shows Hawaii’s progression from monarchy and subjugation under the Kapu system in 1778 (when the Alii held the rule and possessed the land title and commoners were subject and landless) toward freedom, democracy and equality; the reversal of that course in 1921 by enactment of the Hawaiian Homes Commission Act, officially requiring racial discrimination in the Territory of Hawaii; and the subsequent progression back toward subjugation under which a new Alii now holds the rule and threaten, by the Akaka bill, to make Plaintiffs, and all other American citizens in Hawaii similarly situated, subject and landless.

After Captain Cook’s “discovery” in 1778, Hawaii transformed itself within about 140 years from being the most hierarchical of the Polynesian chiefdoms, where high rank held the rule and possessed the land title and commoners were subject and landless and without a written language; toward the highest ideal of American democracy: free enterprise with broadly shared prosperity where all men and women are created equal, well educated, good and industrious.

Kamehameha the Great, who, with the help of his non-native friends, had unified the Hawaiian Islands in 1810, died in 1819. Shortly after that, his son, Liholiho (Kamehameha II), and widow Kaahumanu, who became the de facto moi, or King, broke the Kapu, ordered destruction of the heiaus throughout the Islands, burned the wooden idols and rejected the ancient religion and culture. Into this religious and cultural vacuum, the first American missionaries

arrived the next year, 1820. Soon Kaahumanu took charge of Christianity, made it the new Kapu, displacing Lono and Ku as the path to mana. Hitch, Islands in Transition, First Hawaiian Bank (formerly Bishop Bank), 1992, distributed by University of Hawaii Press, at 21, 22; Kame’eleihiwa, Native Land and Foreign Desires, Bishop Museum Press, 1992, at 74-79 and 154.

By the mid 1850’s the ali’i nui themselves had abolished the kapu system; adopted a Bill of Rights laying the legal basis for a free-enterprise economy, under which the people of Hawaii were set free to work and otherwise manage their affairs as they wanted and to accumulate personal property and pass it along to their heirs; provided Hawaiians with a written form of their previously oral language and established widespread public schools and an exemplary level of literacy among all classes; adopted an American-style written constitution giving commoners an institutional voice in the government and guaranteed a regime of law for business transactions and property holding; Kamehameha III and 245 chiefs had agreed among themselves how much land should go to the crown and how much to the chiefs and in 1850 the legislature had ordered grant of fee-simple titles to native tenants for their kuleanas, the parcels of land cultivated by them. By the end of the mahele, or land division, in 1855, less than 30,000 acres were awarded to the native tenants. However, these tracts of land consisted chiefly of taro lands and were considered the more valuable lands in the Islands.2 The kuleana grants put land into the hands of about two out of every three Hawaiian families, said to be “a record of fee simple ownership among natives unique in the early 19^th century.”3

Kamehameha’s great-grand daughter who would be the last survivor of his direct descendants, Bernice Pauahi Bishop, was born in 1931 and lived for 52 years during that period. Her greatest achievement fit those ideals perfectly. In her will, which went into effect upon her demise in 1884, she left 378,569 acres of choice land in Hawaii in trust “to provide first and chiefly a good education in the common English branches, and also instructions in morals and in such useful knowledge as may tend to make good and industrious men and women.” The will contains no racial restriction for admission to the schools. It leaves admission decisions to the trustees and directs the trustees, after purchasing suitable premises, erecting and furnishing school buildings and paying for the maintenance and operation of the schools, to “devote a portion of each year’s income to the support and education of orphans, and others in indigent circumstances, giving preference to Hawaiians of pure or part aboriginal blood.” Her own English was impeccable and she had a deep understanding and rapport with America and Americans. She and a whole coalition of Hawaiians and haole strongly opposed King Kalakaua’s actions in September 1880 when he dismissed his cabinet and appointed the adventurer Celso Caesar Moreno as Premier and Minister of Foreign Affairs. Mrs. Bishop and her husband, Charles Reed Bishop, gradually became estranged from Kalakaua. Kanahele, Pauahi, The Kamehameha Lagacy, Kamehameha Schools Press, 1986, at 158. Her husband and the other four trustees she personally appointed to manage the trust all favored annexation of Hawaii to the United States.

Mr. Bishop, in his own right, was a major benefactor of the Kamehameha Schools-Bishop Estate (“KSBE”). Immediately after his wife’s death, he set in motion the establishment of the schools. Because his wife’s estate was land rich and cash poor, Mr. Bishop contributed his own funds for the construction of several of the schools’ initial buildings: the Preparatory Department facilities (1888), Bishop Hall (1891) and Bernice Pauahi Bishop Museum in 1899. (From KSBE website 4/18/07.) His cash contributions exceeded the then-value of Mrs. Bishop’s entire land holdings.

1898 - The public land trust established for inhabitants of the Hawaiian Islands

In 1898, the Republic of Hawaii ceded its public lands (about 1.8 million acres formerly called the Crown lands and Government lands) to the United States with the requirement that all revenue from or proceeds of these lands except for those used for civil, military or naval purposes of the U.S. or assigned for the use of local government "shall be used solely for the benefit of the inhabitants of the Hawaiian Islands for educational and other public purposes". Joint Resolution to Provide for Annexing the Hawaiian Islands to the United States, Resolution No. 55, known as the Newlands Resolution, approved July 7, 1898; Annexation Act, 30 Stat. 750 (1898) (reprinted in 1 Rev. L. Haw. 1955 at 13-15).

The Newlands Resolution established the public land trust. Such a special trust was recognized by the Attorney General of the United States in Op. Atty. Gen. 574 (1899); State v. Zimring 58 Haw. 106, 124, 566 P.2d 725 (1977) and Yamasaki 69 Haw. 154. 159, 737 P.2d 446, 449 (1987); see also Hawaii Attorney General Opinion July 7, 1995 (A.G. Op. 95-03) to Governor Benjamin J. Cayetano from Margery S. Bronster, Attorney General, “Section 5 [Admission Act] essentially continues the trust which was first established by the Newlands Resolution in 1898, and continued by the Organic Act in 1900. Under the Newlands Resolution, Congress served as trustee; under the Organic Act, the Territory of Hawaii served as Trustee.”

In 1898, about 31% of the inhabitants of Hawaii were of Hawaiian ancestry and the remaining 69% were of other ancestry. Robert C. Schmitt, Demographic Statistics of Hawaii, 1778-1965 (Honolulu, 1968).

In 1900, the Organic Act, 31 Stat. 141 (1900), §73(e) reiterated that “All funds arising from the sale or lease or other disposal of public land shall be … applied to such uses and purposes for the benefit of the inhabitants of the Territory of Hawaii as are consistent with the Joint Resolution of Annexation approved July 7, 1898.” (Emphasis added.)

Note: The public land trust, from its inception in 1898, required the ceded lands and proceeds and revenues derived from them, except for the portions used by the U.S. for civil and military purposes, to be held “solely for the benefit of the inhabitants of the Hawaiian Islands”, not just for those of Hawaiian ancestry. (Emphasis added.) Nor did persons of Hawaiian ancestry, merely by virtue of their ancestry, have any special entitlement to the use, income or proceeds of the public lands of the Kingdom of Hawaii. The King conducted his government for the common good and not for the private interest of any one man, family or class of men among his subjects. Constitution of 1852, Article 14. Every adult male subject, whether native or naturalized, was entitled to vote. Id, Section 78. Everyone born in the Kingdom (except children of foreign diplomats) was a native-born subject of the Kingdom. In the last half of the 19^th century, the government of the Kingdom actively encouraged immigration and offered immigrants easy naturalization and full political rights. For example, the Civil Code of 1858 provided that “[e]very foreigner so naturalized shall be deemed to all intents and purposes a native of the Hawaiian Islands ... and ... shall be entitled to all the rights, privileges and immunities of an Hawaiian subject.”

The political and economic power of Hawaiians increased dramatically once Hawaii became a Territory. University of Hawaii Political Science Professor Robert Stauffer wrote:

It was a marvelous time to be Hawaiian. They flexed their muscle in the first territorial elections in 1900, electing their own third-party candidates over the haole Democrats and Republicans...The governor-controlled bureaucracy also opened up to Hawaiians once they began to vote Republican.

By the '20s and '30s, Hawaiians had gained a position of political power, office and influence never before--nor since--held by a native people in the United States.

Hawaiians were local judges, attorneys, board and commission members, and nearly all of the civil service. With 70 percent of the electorate--but denied the vote under federal law--the Japanese found themselves utterly shut out. Even by the late 1930s, they comprised only just over 1 percent of the civil service.

This was "democracy" in a classic sense: the spoils going to the electoral victors.

Higher-paying professions were often barred to the disenfranchised Asian Americans. Haoles or Hawaiians got these. The lower ethnic classes (Chinese, Japanese and later the Filipinos) dominated the lower-paying professions.

But even here an ethnic-wage system prevailed. Doing the same work, a Hawaiian got paid more per hour than a Portuguese, a Chinese, a Japanese or a Filipino--and each of them, in turn, got paid more than the ethnic group below them.

The alliance between Hawaiians, with a clear majority of voters through the 1922 election, and more than any other group until 1938, and the Republican party is described in more depth in Fuchs, Hawaii Pono: A Social History, Harcourt, Brace & World, Inc., 1961, at 158-161.

The United States Congress itself reversed Hawaii’s aspiration for equality in 1921 by, for the first time, officially interjecting race into the previously race-neutral Ceded Lands Trust; adopting the HHCA and setting aside some 200,000 acres of the ceded lands for the exclusive use of native Hawaiians, defined not by need or merit or industriousness but explicitly and solely by race: “any descendant of not less than one-half part of the blood of the races inhabiting the Hawaiian Islands previous to 1778.”

The "decline" in the standard of living of Native Hawaiians can only be tracked to the early 1950s, when the Democratic Party began its political dominance of government as a result of the "Democratic Revolution of 1954". Hawaiians, being overwhelmingly Republican, found themselves displaced from such well-paying jobs as the civil service and Department of Education which they had previously controlled. Id.

In 1959, as a condition of statehood, the United States required in §4 of the Admission Act that the new State of Hawaii, by compact between the two governments, adopt the HHCA as part of the State’s Constitution and use all proceeds and revenues of the approximately 200,000 acres of Hawaii’s ceded lands set aside as “available lands” for the HHCA, “only in carrying out the provisions of said Act.”

This compact is a “smoking gun” proving a common and unlawful plan between the United States and the State of Hawaii, i.e., a conspiracy to interfere with the civil rights of American citizens in Hawaii. The compact not only requires the State of Hawaii to carry on the HHCA but it reserves to the United States that the State will not repeal the Act or change the explicitly racial qualification for the lessees or reduce benefits to native Hawaiians without its consent. The compact remains in full force today.

With Hawaii becoming the 50th State, mass tourism began and land values climbed. Kamehameha Schools-Bishop Estate (“KSBE”) charitable trust was at the center of one of the hottest real estate markets in the world, owning about one in every 6.3 acres in the state not owned by the federal or state governments. (Acreage numbers based on the most recent Atlas of Hawaii, 2d Ed. 1983.)

The civil rights movement of the 1960’s (which triggered the “Hawaiian Rennaissance”) also had a negative spin as peoples everywhere became increasingly sensitive to racial differences not only as sources of inequity and injustice but as opportunities for individual self-aggrandizement. Claims to compensation for group injustices began to be advanced around the globe by ethnic leaders. Carrington, Testamentary Incorrectness: A Review, Vol. 54 Buffalo Law Review 693, 705-709, Dec. 2006.

The rise of Hawaiians to leadership of organized crime occurred at the same time as the Hawaiian political and cultural revival movements, the “Hawaiian renaissance” that began in the late 1960s and early 1970s. Cooper & Daws, Land and Power in Hawaii, Benchmark Books, Inc., 1985, at 252, see also Chapter 7, Organized Crime.

In 1967 Hawaii’s Land Reform Act, called “mandatory leasehold conversion” gave homeowners on leased land a way to buy the land under their single-family dwellings, even if owners of that land did not wish to sell. KSBE challenged the constitutionality of the law and its implementation was stayed pending appeal to the U.S. Supreme Court.

In 1978, John Waihee won his first elective office: Delegate to the 1978 Hawaii Constitutional Convention. Leading a tightly knit group of fellow graduates from the first class of the University of Hawaii Law School, he was the force behind the throne at the convention. As a result of the ConCon recommendations, Hawaii's Constitution was purportedly amended to establish an Office of Hawaiian Affairs ("OHA"). Amended Article XII, Section 6 of the State of Hawaii Constitution provides that the board of trustees of OHA "shall exercise power as provided by law; to manage and administer the proceeds from the sale...and income...including all income and proceeds from that pro rata portion of the trust referred to in section 4 of this article for native Hawaiians." Section 4 does not specify any pro rata portion.

In 1980, the Hawaii Legislature enacted Section 10-13.5 H.R.S. "Twenty per cent of all funds derived from the public land trust, described in Section 10-3, shall be expended by the office [OHA], as defined in section 10-2, for the purposes of this chapter."

The Supreme Court in 1984 upheld the Land Reform Act of 1967 enacted by the Hawaii legislature to reduce the perceived social and economic evils of a land oligopoly traceable to the early high chiefs of the Hawaiian Islands. Within just a few years, KSBE’s land sales brought in nearly $2 billion for the trust, tax free.

In 1986 John Waihee won election as Governor of Hawaii, the first Native Hawaiian elected to that office.

In 1990 the Hawaii Legislature in Act 304 defined "revenue" from which OHA is to share, retroactive to 1980, as "all proceeds, fees, charges, rents or other income … derived from any … use or activity, that is situated upon and results from the actual use of lands comprising the public land trust".

Act 304, which was interpreted to calculate OHA's "pro rata share" on the gross revenues, (rather than on “income” as provided in the Hawaii Constitution or on net income after expenses as required under trust law).

Act 304 also mandated that OHA and the State Department of Budget and Finance (“B&F”) negotiate the amounts payable to OHA for the years 1980 through 1991.

In 1993, after extensive discussions, a proposal for payment of about $130 million, including interest, for the years 1980 through 1991, supported by both OHA and the State administration, was submitted to the Legislature. State officials, including the then Director of the Department of Budget and Finance, testified that such amount would "settle" or constitute "paying the full amount" of OHA's claims to revenues from the ceded lands for 1980-1991. OHA did nothing to dispel this understanding but rather confirmed it. The Legislature, by Act 35, then authorized and appropriated the amount in general obligation bond funds to be paid to OHA for this purpose.

In April 1993, after Act 35 was enacted, OHA and an official from the Office of State Planning ("OSP") which was part of Governor Waihee’s office as Governor, signed a Memorandum which stated in part "OSP and OHA recognize and agree that the amount specified in Section 1 hereof does not include several matters regarding revenues which OHA has asserted is due to OHA and which OSP has not accepted and agreed to."

In June 1993 the approximately $130 million was paid to OHA for its share of the ceded lands revenues for 1980 through 1991.

In January 1994, OHA commenced a lawsuit, OHA v. State of Hawaii, seeking payment of additional amounts going back to 1980 arising from receipts of the Waikiki duty-free shop, public housing, the Hilo Hospital and investment earnings on unpaid "revenue."

In October 1996, Circuit Court Judge Daniel G. Heely granted OHA's motion for partial summary judgment, ruling that OHA is entitled to a 20% share of each of the items in question. The State appealed and the Hawaii Supreme Court until 1999 deferred ruling while the State and OHA discussed settlement.

Media accounts estimated that, if Judge Heely's decision was affirmed, between $300 million and $1.2 billion may be payable to OHA for the period 1980 through 1991 in addition to the $130 million already paid to settle OHA's claims for that period.

On December 2, 1994, just before Governor Waihee’s term expired, his Office of State Planning signed a Memorandum of Understanding with the DHHL and DLNR to create a Hawaiian home lands settlement fund and pay it $30 million per year for 20 years: Total $600 million. Since then, on information and belief, the State of Hawaii has made the annual payments as provided in that memorandum of understanding.

In 1997 prominent community members wrote an essay, “Broken Trust” that was published in the Honolulu Star-Bulletin, lambasting the Bishop Estate trustees and the political and judicial system that allows them to operate with impunity.

Governor Benjamin Cayetano then instructed Hawaii State Attorney General Attorney General Margery Bronster to investigate Bishop Estate and the issues raised in “Broken Trust.”

Subsequently four of the five Hawaii Supreme Court justices announced they would no longer select Bishop Estate trustees.

On May 29, 1999, some of plaintiffs here filed in the Hawaii Supreme Court an amicus curiae brief in OHA v. State arguing on behalf of the defendant State of Hawaii that the OHA laws are based on racial classifications and therefore presumptively invalid and subject to strict scrutiny. Also, Hawaiians have no “special” or “political” relationship, comparable to that of Indian tribes, which would exempt the OHA laws from strict scrutiny analysis.

The Internal Revenue Service threatened to remove KSBE’s tax exempt status for abuse, saying it looks more “like a personal investment club” than a charity. It called for resignation or removal of all five trustees.

The Hawaii Circuit Court removed one trustee, accepted another trustee’s “temporary” resignation” and removed the other trustees temporarily. Eventually all five of the KSBE trustees resigned.

Hawaii Deputy Attorneys General asked the Hawaii Circuit Court Judge to surcharge the former trustees more than $200 million. The Judge approved a “global settlement” in which the former trustees admitted no wrongdoing and do not have to pay surcharges, damages or restitution. He ordered the file sealed.

On February 23, 2000, the Supreme Court of the United States in Rice v, Cayetano, 528 U.S. 495, 514-516 (2000), struck down OHA’s Hawaiians-only voting restriction. In applying the Fifteenth Amendment, the Court rejected the arguments to the contrary by OHA and the State and held that the definitions of “Hawaiian” and “native Hawaiian” are racial classifications.

Those definitions, which the highest court in the land determined to be racial classifications, are the foundation and the only reason for the existence of OHA and HHCA/DHHL.

In response, the State Legislature passed and the State Governor signed a bill saying only Hawaiians are eligible to serve as OHA trustees. The State of Hawaii Office of Elections subsequently refused to issue nomination papers for election to the OHA board of trustees to Kenneth Conklin, a qualified and registered Hawaii voter, solely because he is not “Hawaiian.”

On March 28, 2000, a diverse, multi-ethnic group of 23 Hawaii men and women, some of whom are plaintiffs in this case, moved to intervene in the Hawaii Supreme Court in OHA v. State arguing, among other things, that the Rice decision together with the Supreme Court’s other decisions holding all racial classifications presumptively invalid, if applied in a case challenging OHA itself, will require that OHA be invalidated and its claims be dismissed.

On May 8, 2000, the Hawaii Supreme Court denied the motion to intervene in OHA v. State. No reason was stated.

On July 25, 2000, Kenneth Conklin and a multi-ethnic group of plaintiffs, some of whom are plaintiffs in this action, filed a suit in this Court, Civ. No. 00-00514 challenging the validity of the OHA candidacy restrictions. This Court declared the racial restriction invalid and ordered the State to permit otherwise eligible non-Hawaiians to run and, if elected, serve as OHA trustees.

On September 12, 2001, the Hawaii Supreme Court in OHA v. State, reversed the 1996 Heely decision and dismissed the case for lack of justiciability. The Court said that, because it conflicts with federal legislation, “Act 304 ‘by its own terms’ is effectively repealed.”

The Hawaii Supreme Court did not rule on or even mention the federal Constitutional questions raised in the amicus brief and in the motion to intervene. It nevertheless said,”the State’s obligation to native Hawaiians is firmly established in our constitution” and “it is incumbent upon the legislature to enact legislation that gives effect to the right of native Hawaiians to benefit from the ceded lands trust.” OHA v. State, Appeal Nos. 20281 & 20216 Decision, September 12, 2001.

KSBE HAS CORRUPTED HAWAII’S GOVERNMENT, PURSUES HEREDITARY SUPERIORITY, DISASSIMILATION AND AKAKA BILL

A remarkable book by Senior U.S. District Court Judge Samuel P. King and trust Professor Randall W. Roth, former President of the Hawaii State Bar Association, has revealed the trustees of KSBE have so corrupted the political process in the State of Hawaii that the legislative, executive and judiciary powers have been, and still seem to be, concentrated in the hands of those who facilitated “A World Record for Breaches of Trust” by trustees and others of high position, without surcharge or accountability. Broken Trust: Greed, Mismanagement & Political Manipulation at America’s Largest Charitable Trust, King and Roth, University of Hawaii Press, 2006.

Corruption within Bishop Estate Reached the Highest Levels of Government, But Major Records Still Under Seal Six Prominent Community Leaders Share Their Part in the ‘Broken Trust’ Controversy, Call for Release of More Than 1Million Pages of Documents Kept Secret by the Court By Malia Zimmerman, 7/10/2006 http://tinyurl.com/pwsgg. KSBE put legislators on its payroll and used its alumni association as its proxy to lobby. Hawaii Reporter,

The Honolulu Star-Bulletin Special Series Edition at http://starbulletin.com/specials/bishop.html provides links to stories illustrating KSBE’s activist role in promoting segregation. See, for example, Aug. 4, 2005, “Rallies show school support.” At one of the rallies organized by KSBE, one speaker, a tenured professor at U.H. Manoa, had this to say, “Some white men against us say they have been here seven generations. Big deal. We won’t assimilate and we won’t go away, so sooner or later, America will have to

The KSBE trustees continue to turn their backs on the unifying aspirations of Bernice Pauahi Bishop by actively supporting the Akaka bill S.310/H.R.505 (which would “recognize” Native Hawaiians as a privileged class, not based on merit or achievement but solely because of their ancestry; establish a process for them to create their own separate government and allow the state government, still dominated by KSBE, to negotiate with the new Native Hawaiian government, also certain to be dominated by KSBE, for the breakup and giveaway of much of the domain of the State of Hawaii).

KSBE openly flaunts its participation with OHA, DHHL, the University of Hawaii Center for Hawaiian Studies, Hawaii’s Congressional delegation and a multitude of others in supporting passage of the Akaka bill. KSBE and its Alumni Associations of Northern and Southern California are members of CNHA, Council for Native Hawaiian Advancement, http://www.hawaiiancouncil.org/members.html.

The nativehawaiians.com website, lists the co-conspirators: CNHA, the Kamehameha Alumni Association, the prominent entities [many under KSBE’s hegemony] that support the Akaka bill; and a number of questionable groups such as the National Council of La Raza, the organization that seeks to “liberate” the SouthWest. http://www.nativehawaiians.com/listsupport.html.

So said the headline on the first page of USA Today 3/7/07 describing the attack Feb. 19th 2007 in the parking lot of the Waikele mall on Oahu, when a Hawaiian family beat a young soldier and his wife unconscious while their three year old son sat in the back seat of their car. The attack, “unusual for its brutality,” sparked impassioned public debate.

The USA Today article and related links may be found at http://tinyurl.com/2jle2e . See also, The Gathering Storm, Chapter 1 of Hawaiian Apartheid: Racial Separatism and Ethnic Nationalism in the Aloha State by Kenneth R. Conklin, PhD http://tinyurl.com/2f7p8b.

Over 1 million American citizens in Hawaii are under siege by what can fairly be called an evil empire dedicated to Native Hawaiian Supremacy. That empire is dominated by KSBE, the nation’s largest charitable trust, which has already conquered Hawaii’s government and much of its business establishment.

Professor Carrington, referring to KSBE, puts it this way: As the ambition to achieve disassimilation rose, the instinct of the state’s citizens who lacked the appropriate ancestor was to humor those who did, seemingly in the hope that tolerance and modest support would enable all to remain amiable neighbors. Few if any citizens stepped forward to question efforts to assign White Guilt to the polychromatic people of the state when in 1993 Congress was asked to apologize for “the crime of 1893” and did so, with the possible implication that some further apology to a defiled group might be in order. . . . It discounted the possibility that its unwarranted apology might elevate the racist sentiment, as may have happened. Testamentary Incorrectness: A Review by Paul D. Carrington, Vol. 54 Buffalo Law Review 693, Dec. 2006.

¹ Such negotiations could result in a global settlement under which, for example, the fee simple interest in the demised land is conveyed to the Homesteader in exchange for no or a reduced payment and a complete release of all claims by the Homesteader and his heirs and assigns against all parties, including all claims against the State of Hawaii and the United States and anyone else arising out of or related to the Homestead leases, the HHCA laws, the OHA laws the Apology resolution, the overthrow of the monarchy, annexation, independence, reparations and any other claims for Hawaiian entitlements. If the fair market value of the land demised were, say, $50,000, the fee might be conveyed with no payment required. If the fair market value was $200,000 the Homesteader might be required to pay $150,000 within ten years or earlier if the Homesteader sells or mortgages the land or ceases to occupy it as the Homesteader’s residence. These are just examples showing how plaintiffs believe a fair settlement might be reached. Plaintiffs do not ask the court to order such a settlement. Plaintiffs do believe that any settlement reached should be subject to this court’s approval, to ensure that the interests of plaintiffs and others similarly situated are protected. If no settlement is reached by the State and Homesteaders within a reasonable time, plaintiffs believe the court should order the State defendants and the HHC/DHHL defendants to withdraw the lands demised by the Homestead leases. In that event, and if the Homesteaders intervene in this action, plaintiffs believe the court should adjudicate the manner in which the demised lands are withdrawn so that it is fair to the Homesteaders and does not further violate the rights of plaintiffs and others similarly situated.

2 Chinen, The Great Mahele, Hawaii’s Land Division of 1848, University of Hawaii Press, 1848 at 31.

On April 30 Plaintiffs filed their amended complaint, above. However, as she previously said she would do, Judge Mollway denied the motion to amend the complaint, and dismissed the case. It appears this long-running lawsuit is now finished.