Significant Rulings in Federal District Court Challenge to Maui's Residential Workforce Housing Policy

On July 3, 2008, the U.S. District court issued an order ("Order") in the Kamaole Pointe, LLP v. County of Maui case, where the Plaintiffs (Kamaole Pointe, et al.) are challenging the constitutionality of the Maui’s Residential Workforce Housing Policy ("Ordinance").

For you non-lawyers out there, the U.S. District Court is a Federal trial court. The Court’s Order in this case is regarding the parties’ motions for summary judgment offered prior to trial. In summary judgment motions, parties attempt to get the other party’s case, or portions of their case, dismissed based on the law and evidence in the record. In legalese: A court will grant summary judgment when the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law.

In short, the outcome of the Order is that some claims remain for trial and some were dismissed. In particular, the Court will not hear Plaintiffs’ unconstitutional conditions claim. The Court reasoned as follows:

. . . (1) despite its reliance on the allegedly distinct doctrine of unconstitutional conditions, Plaintiffs’ Motion is appropriately construed as a facial takings claim; (2) generally, Williamson County’s ripeness requirements apply to facial takings claims; (3) the Ninth Circuit previously recognized the “substantially advances” test as the only means of mounting a facial takings challenge free from Williamson County’s state compensation requirement; (4) the Supreme Court abrogated “substantially advances” as a takings test in Lingle; (5) the Nollan/Dolan standard has not been extended by the Supreme Court or the Ninth Circuit to apply outside of the facial takings claims realm; and, (6) as a result, to the extent that Plaintiffs raise a facial taking claim here, whether based on the federal or State Constitution, Plaintiffs must first seek compensation via State court.

Related to the facial and as-applied takings claims, the Court dismissed the Plaintiffs’ claims to the extent that Plaintiffs explicitly bring takings claims or claims that are in fact takings claims (as in the case of their unconstitutional conditions argument), as none of these claims are ripe. The claims are not ripe because, among other things, “Plaintiffs indisputably have not sought compensation in State court [which] proves immediately fatal to all their takings claims.” However, the Court ruled, because “these claims are subject to further development in State court, at which point they could conceivably be ripe," the Court dismissed these claims without prejudice.  Therefore, with regard to Plaintiffs' takings claims, the Plaintiffs must seek compensation in State court first, then the Federal court may hear its takings claim.

The Plaintiff’s equal protection and substantive due process claims are still viable. In the Court’s words, “there remain serious concerns about the constitutional viability of the Ordinance in light of the relevant due process and equal protection standards[.]”

The Equal Protection Clause of the 14th Amendment commands that no state shall deny to any person within its jurisdiction the equal protection of the laws. The Court found that “Plaintiffs’ equal protection claim is twofold and consists of: (1) a general argument that the Ordinance is arbitrary and irrational, and (2) a “class of one” argument that Plaintiffs were intentionally, and without rational basis, treated differently from others similarly situated during their appeal for a waiver.” For the first equal protection claim, the Plaintiff need only show that the Ordinance is “arbitrary and irrational.” For the second equal protection claim, the Plaintiffs must show that they were intentionally, and without rational basis, treated differently from others similarly situated during their appeal for a waiver.

The Substantive Due Process guarantee protects individuals against government power arbitrarily and oppressively exercised. The Court ruled that in this case, the proper standard of review for "a substantive due process challenge to legislation that neither utilizes a suspect classification nor draws distinctions implicating fundamental rights is reviewed pursuant to the 'arbitrary and irrational' standard."  Thus the Plaintiffs need to show that the Ordinance is "arbitrary and irrational," which is a lower standard than proposed by the County.

The case now moves forward in Federal Court, sans the takings claims.  If the Plaintiffs prevail on the equal protection and/or substantive due process claims, the takings claim may be moot.

Related articles include:  Maui's Workforce Affordable Housing Bill: Unconstitutional?, Update: Challenge to Maui Workforce Housing Ordinance, J. Ezra hears Motions for Summary Judgment from County of Maui and Kamaole Pointe et al., and The Rise and Fall, and Rise Again, of Due Process Challenges to Government Takings.