Case Note: Revisiting the LUC's OSC

Some believe that the 2004 Hawaii Supreme Court case, Lanai Company, Inc. v. Land Use Commission, throws into uncertainty, whether the state land use commission ("LUC") can issue an order to show cause (“OSC”). However, this would be a gross misinterpretation of Lanai Company which had nothing to do with the LUC’s authority to issue an OSC.

In Lanai Company, the Supreme Court appeal was based on an LUC Order to revert Petitioner’s property to its former classification. The Order resulted from an OSC that was issued by the LUC. At issue on appeal was, inter alia, the interpretation of a condition of district boundary amendment. The Supreme Court affirmed the trial court’s conclusion that the LUC erred in interpreting the condition, and remanded the case to the trial court with instructions that the trial court remand the case to the LUC for further findings in line with its interpretation of the condition.

The court also opined that while the LUC is “expressly authorized to order a reversion of land to the prior classification” “absent substantial commencement of use of the land in accordance with ... representations made” by the petitioner, the LUC does not have cease and desist powers. The power to enforce LUC conditions and orders lies with the counties under HRS § 205-12. Counties have the responsibility to take necessary action against violators, not the LUC. Thus, the county has an “affirmative duty to enforce the LUC’s conditions” once brought to their attention.

The holding in Lanai Company has nothing to do with interpretation of HAR § 15-15-93 which allows “[a]ny party or interested person [to] file a motion with the LUC requesting an issuance of an order to show cause[.]” In fact, the case supports the proposition that the LUC can issue an OSC since the Supreme Court remanded the case to the LUC for further findings on the OSC it issued.

One cannot confuse the LUC's authority to issue an OSC with enforcement. Lanai Company instructs that the LUC can issue an OSC and based on findings, conclusions, and decision and order, revert a property to its former classification for petitioner's failure to comply with LUC conditions. However, that power is different from enforcement of conditions which is in the purview of the counties, or a cease and desist order, which is in the purview of the courts.