Hawaiʻi Supreme Court Provides Useful Insight for EIS Preparers in Upholding Aquarium Fishing Permits

On August 28, 2024, the Hawaiʻi Supreme Court issued its opinion in Kaupiko v. Board of Land and Natural Resources, marking another chapter in the ongoing legal battles over commercial aquarium fish collection from state coastal waters.

Background

In 2017, the Court held in Umberger v. Dep’t of Land & Nat. Res., 140 Hawaiʻi 500 (2017) that commercial aquarium collection permitting is not exempt from review under Hawaiʻi Revised Statutes (HRS) Chapter 343, the Hawaiʻi Environmental Policy Act (HEPA). The Court ruled that such permits are not merely “minor alterations” to state waters, stating:

“A permit for extraction of an unlimited number of aquatic life cannot be said to constitute only a ‘minor alteration’ in the condition of state waters and submerged lands.”

Following the Umberger decision, the Pet Industry Joint Advisory Council (PIJAC) prepared an Environmental Impact Statement (EIS) to obtain permits for commercial aquarium fishing in the West Hawaiʻi Reef Fishery Management Area (WHRFMA). The Board of Land and Natural Resources (BLNR) rejected the EIS for fourteen specific deficiencies. PIJAC revised the EIS, published it, and resubmitted it to BLNR for acceptance. However, a BLNR vote to consider the EIS ended in a 3-3 tie. Under HRS § 343-5(e), such a tie results in the EIS being “deemed accepted.” HRS § 343-5(e) provides,

“The final statement shall be deemed to be accepted if the agency fails to accept or not accept the final statement within thirty days after receipt of the final statement.”

While the case was pending, BLNR authorized limited commercial aquarium collection permits on August 23, 2024.

Supreme Court Decision

The Court addressed three substantive issues on appeal, holding:

1. The State was a proper defendant in the case and was required to defend the EIS.
2. A reviewing court must apply the “rule of reason” alongside HEPA’s content requirements when evaluating an EIS.
3. The EIS met HEPA’s content requirements and contained sufficient information for BLNR to make an informed decision.

Key Holdings

1. The State as Proper Defendant

The State argued that it should not be required to defend the EIS because the EIS was accepted by operation of law due to the tie vote, not through an affirmative agency decision. The Court rejected this argument, reasoning that acceptance under HRS § 343-5(e) is still an agency action and subject to judicial review. The Court clarified that the State, through BLNR, remained responsible for the adequacy of the EIS, even in cases of deemed acceptance.

2. The Rule of Reason in EIS Review

The Court reaffirmed its holding in Price v. Obayashi Hawaiʻi Corp., 81 Hawaiʻi 171 (1996), emphasizing that the sufficiency of an EIS is guided by the rule of reason. Under this standard:

"An EIS need not be exhaustive to the point of discussing all possible details bearing on the proposed action but will be upheld as adequate if it has been compiled in good faith and sets forth sufficient information to enable the decision-maker to consider fully the environmental factors involved."

The Court outlined steps for reviewing an EIS:

• HEPA Content Review. Evaluate whether the EIS satisfies the environmental factors in HAR § 11-200.1-24, ensuring it provides sufficient information for reasoned decision-making.
• Response to Deficiencies. Ensure that the final EIS addresses initial reasons for rejection and responds to substantive feedback, as required under HAR § 11-200.1-27.
• Practical Inquiry. Consider whether alleged HEPA violations impede informed decision-making or public comment.

3. Use of Appendices in EIS Documentation

Opponents argued that HEPA requires substantive comments to be incorporated directly into the body of the EIS. The Court disagreed, holding that appendices may contain important information, provided the EIS’s body guides readers to relevant appendices. The Court stated:

“The purpose of the EIS here was to ensure that BLNR made a fully informed decision as to the environmental impact of commercial aquarium permits in the WHRFMA. That purpose is not defeated when important information is held in an appendix.”

The Court concluded that the EIS met HEPA’s requirements because the body and appendices together enabled BLNR to make a reasoned decision.

Lessons from Kaupiko

The Kaupiko decision underscores the importance of an EIS that balances legal sufficiency with practical usability. Key takeaways for preparing an enforceable EIS include:

• Address All Concerns. Ensure that all substantive feedback and prior deficiencies are addressed thoroughly.
• Structure with Clarity. Use appendices effectively, while ensuring the body of the EIS directs readers to relevant content.
• Focus on Decision-Making. The overarching goal is to enable informed and reasoned decision-making based on the environmental factors at issue.

This decision reaffirms HEPA’s role in safeguarding environmental and public interests while balancing procedural fairness for applicants.