OHA v. State of Hawai'i -- Hawai'i Supreme Court Decides the Ceded Lands Case on September 12, 2001. But on July 21, 2003 OHA filed another lawsuit claiming the State of Hawaii had not properly represented OHA's interests in negotiations with the U.S. regarding airport ceded land "rent." That followup lawsuit dismissed on September 9, 2005. OHA requested reconsideration, the Supreme Court agreed, but then finally reaffirmed its ruling on April 28, 2006

(c) Copyright 2001 - 2006, Kenneth R. Conklin, Ph.D. All rights reserved

SUMMARY: On September 12, 2001 the Supreme Court of the State of Hawai'i dismissed the long-standing lawsuit filed by the Office of Hawaiian Affairs against the State of Hawai'i regarding revenues from the ceded lands. The court ruled (on a "technicality") that there is no way for a court to determine how much money is owed to OHA. The practical effect is that the State of Hawai'i no longer has any obligation to pay anything to OHA, until and unless the legislature resolves the matter. This provides a wonderful opportunity for the people of Hawai'i to reconsider the entire issue of racial entitlement programs in general and OHA in particular. The ceded lands rightfully belong to all the people of Hawai'i, not just one racial group. No racial group has any legitimate claim to any part of the ceded lands, nor to any portion of revenues from the ceded lands. Government help should be given to needy people based on need alone, not race. It is time to abolish the 23-year-old mistake known as OHA, and to begin restoring unity, equality, and aloha for all.

First comes information about the Supreme Court's decision, and opinions about what should happen as a result; as written in 2001. After that are some newspaper articles about OHA's followup lawsuit against the State of Hawai'i filed July 21, 2003 and dismissed on September 9, 2005, then reconsidered and finally dismissed on April 28, 2006.


On September 12, 2001 the Supreme Court of the State of Hawai'i dismissed the lawsuit filed by the Office of Hawaiian Affairs against the State of Hawai'i regarding revenues from the ceded lands. For a newspaper report explaining the dismissal and its implications, see


For a list of important events in the progress of this case, see


On the same day the Honolulu Advertiser reported the story, it also wrote an editorial suggesting that the Legislature should now take action to do the "right thing" for Native Hawaiians.


The Honolulu Star-Bulletin took the same attitude in its article reporting the event


and in its editorial


although the Star-Bulletin did provide a more balanced report on the history of the ceded lands lawsuit, and of the ceded lands themselves, in its feature article on September 23:


An Advertiser columnist took the position that OHA should have grabbed $250 Million and huge amounts of land when offered by the State in a settlement conference. He reasserts that the people of Hawai'i need to find some way to pay the poor downtrodden Native Hawaiians what they are owed.



Attorney H. William Burgess responded to the Honolulu Advertiser editorial in a letter-to-editor published September 23. That letter is printed in its entirety below its URL:


Posted on: Sunday, September 23, 2001
Letters to the Editor


Your Sept. 13 editorial encourages our political leaders to "find a formula" that "honors the state's obligation to the betterment of Hawaiians." I remind you this is an American democracy under which each of us is entitled to the equal protection of the laws without regard to ancestry or race.

The Hawai'i Supreme Court's landmark decision Sept. 12 in the Office of Hawaiian Affairs vs. State of Hawai'i blew away the black cloud that had hung over Hawai'i's economy for five years. It reversed the 1996 Heely decision that could have cost the state $300 million to $1.2 billion. It invalidated Act 304 and wiped the slate clean. It requires all of us to rethink OHA.

OHA has had 23 years and hundreds of millions of taxpayers dollars to show its worth. It has spent many millions for slick ads and TV commercials extolling its own virtues, trashing America and advocating the creation of a separate sovereign government for Hawaiians only.

It has spent many millions on legal fees (mostly in a losing effort to either protect itself from constitutional scrutiny or to extract still more money from the state). It has spent perhaps millions more for lobbying and expenditures such as a cocktail party in Washington, D.C.

It has enriched an entourage of lawyers, bankers, investment advisers, advertising agencies, lobbyists, politicians and service providers. It has created a bureaucracy whose livelihood depends on keeping Hawaiians in a permanent victim status. And it has regularly filled the media with stories about its own vicious internal bickering.

In those 23 years, has it bettered the condition of Hawaiians? Not in any noticeable way.

Before 1978, when OHA was created, the income from the ceded lands went primarily to the Department of Education, where it benefitted all students. Kids of Hawaiian ancestry make up about 26 percent of the public school student body so that Hawaiian kids benefitted somewhat more, proportionately, than others. Now the public schools are dilapidated, textbooks are in short supply and test scores are below par.

Twenty-three years of buffoonery is enough. It is time to ring down the curtain on this sorry drama. It is time to put OHA in the dustbin of history along with apartheid, white supremacy and the kapu system. It is time to take back the $300 million of our taxpayer money now in the dysfunctional hands of the OHA trustees and restore it to the public schools.

H. William Burgess



The Hawaii Supreme Court on September 12, 2001 reversed Judge Heely's 1996 judgment for OHA and dismissed the case for lack of justiciability. Here's the reasoning:

Act 304 enacted by the Hawaii Legislature in 1990 provided that "20% of all REVENUE [emphasis added] derived from the public land trust shall be expended by OHA for the betterment of the conditions of native Hawaiians." It then defined "revenue" broadly. Judge Heely's decision applied this broad definition liberally and, if affirmed, could have cost the State an amount estimated by the media to be between $300 million to $1.2 billion for the years 1980 through 1991. Act 304 also had a non-severability clause which said that "if any provision of the Act is held to conflict with any federal or state law, rule, or regulations, this Act, in its entirety, shall be invalid" and the earlier laws "shall re reinacted in the form in which they read on the day before the approval of this Act."

The Court held that Act 304, as applied to revenue derived from the Honolulu International Airport, conflicts with federal legislation (the 1998 DOT & Related Agencies' Appropriations Act which among other things says "There shall be no further payment of airport revenues for claims related to ceded lands, whether characterized as operating expenses, rent or otherwise, and whether related to claims for periods of time prior to or after the date of enactment of this Act."

The Hawai'i Supreme Court further stated, "Therefore, Act 304 -- by its own terms -- is effectively repealed. Consequently, in the absence of the substantive statutory amendments prescribed in Act 304, this court is left with no judicially manageable standards by which to determine whether OHA is entitled to the specific revenues sought in this suit. Accordingly, we reverse the circuit court's orders and dismiss this case for lack of justiciability."

The Court did not address the constitutional question raised in our amicus brief. Since the case was reversed on other grounds, it was not necessary to rule on that question. That question remains to be decided another day in another case.


Attorney Bill Burgess, and his wife Sandra Puanani Burgess, published an article in the July 2001 edition of the Hawai'i Bar Journal explaining the history of the ceded lands and why the Supreme Court should do what it has now done and dismiss OHA's lawsuit. Their article can be seen at


The Burgesses also have a website focused on the ceded lands issue, at



The author of this website endorses Mr. Burgess' letter to editor, thanks him for his legal analysis, and provides the following short essay, including a brief history of the ceded lands:


The Significance of the Hawai'i Supreme Court's dismissal of OHA's Ceded Lands Lawsuit; and The History of the Ceded Lands

The people of Hawai'i now have an opportunity to re-think racial entitlement programs in general, and OHA in particular, thanks to the recent decision of the Hawai'i State Supreme Court dismissing the ceded lands case OHA v. State of Hawai'i. The dismissal of that lawsuit has eliminated any basis for courts to determine how much money OHA should receive from ceded lands revenue. Unless additional legislation is passed, money given to OHA by the State of Hawai'i will be just that -- given freely, not owed. And nothing at all should be given! If we cut off the blood supply (money) to a cancerous tumor (OHA), the tumor will probably die. OHA's bureaucrats, and other institutions dependent on funding from OHA, are already scrambling to convince the legislature to take money from all of us to give it to themselves. A well-educated public can take this historic opportunity to tell the legislature to put an end to the 23-year-old mistake known as OHA. The money OHA has removed from Hawai'i's economy and invested in the stock market (whatever is now left of it) should be returned to the State of Hawai'i for the improvement of public education.

The ceded lands belong to all the people of Hawai'i, not just to one racial group. That was just as true during the Kingdom period as it is today. Here is a brief overview of the history of the government lands and crown lands which jointly became what is known today as the ceded lands.

During the Kingdom, the government lands were held on behalf of ALL the people for public purposes. Government lands are still used that way today. For ALL the people. During the Kingdom, the crown lands were held by the government to provide income to support the head of state. Crown lands did not belong to a monarch personally -- they were passed from one monarch to the next (not to personal heirs of the monarch), even when monarchs from different families were elected. After the King had run up huge mortgages on the crown lands to pay gambling debts and support a dissolute lifestyle, the Kingdom legislature in 1865 took control of the crown lands, issued government bonds to pay off those mortgages, and passed a law (signed by a grateful King) declaring that the King could no longer mortgage them. When the monarchy was overthrown and the office of monarch ceased to exist, the crown lands became the same as government lands. Ex-queen Lili'uokalani sued the United States in 1910, claiming that the U.S. owed her money for taking "her" crown lands. She filed on behalf of herself only, claiming the crown lands were hers personally, not the property of the kanaka maoli race. So if she had won, kanaka maoli generally (along with everyone else in Hawai'i) would have lost any rights to income from or use of the crown lands because those lands (or compensation for them) would have been declared her personal private property. But she lost, because it was proved that even when she was Queen she did not own the crown lands personally. For the entire decision of the court in the 1910 case, Lili'uokalani v. United States, see


Thus it was decided that the crown lands are now the same as the government lands, and belong to ALL the people of Hawai'i.

The Provisional Government, followed by the Republic, accepted as its own obligations the huge debts of the monarchy that had been run up by King Kalakaua's construction and furnishing of the Palace, his trip around the world, and his lavish lifestyle. When the annexation occurred, the U.S. agreed to pay the debts of the Republic, most of which were from the monarchy. Paying someone else's debts is a form of compensation. Thus the "apology" bill is wrong when it says ethnic Hawaiians were "never compensated" for "their" land -- wrong first because the land did not belong to their racial group, and wrong again because compensation was indeed given by the assumption of the debt. The U.S. also agreed not to simply take the government and crown lands as its own, but to hold them in trust for ALL the residents of Hawai'i. Finally, when those "ceded" lands were returned to the new State of Hawai'i at statehood in 1959 (minus national parks and military bases, which also benefit the people of Hawai'i), they were returned on condition that the income must be used for ANY ONE OR MORE OF 5 PURPOSES. One of those purposes is education; and for the first 20 years of statehood, all the ceded land revenues went to support the public schools (which means that about 25% of the ceded land revenues went to ethnic Hawaiians, since they are about 1/4 of the school population). Finally, when OHA, racially restricted to ethnic Hawaiians, was created in 1979 (big mistake!), it was later funded by an act of the legislature interpreted as giving it 20% of ceded land GROSS revenues -- a huge error, because it costs big money to operate airports, universities, parks, roadways, etc. OHA's 20% of gross ceded land revenues is more than 100% of net revenues after operating expenses.

It's easy to see the problem here. OHA claims to be entitled to hundreds of millions of dollars -- 20% of ceded land revenues -- because "betterment of native Hawaiians" was one of five purposes for use of ceded land revenues. Well, what about the other four purposes? The Superintendent of Schools should be lined up right next to the head of OHA, demanding the same number of dollars as OHA, because education was also one of those five purposes. Likewise for the other stated purposes. There isn't that much money in the State budget. And the reason is that most government activities operate at a loss (that's why people have to pay taxes, to make up that loss). Also, ethnic Hawaiians get all the same benefits everyone else gets from State expenditures on public facilities, PLUS the 20% for OHA. The University, for example, operates at a huge loss. The tuition paid by students is only a small part of what it costs to operate the University. The rest is made up by the taxpayers.

So when ethnic Hawaiian students at UH say they are owed "rent" for being kind enough to allow the university to sit on ceded lands, we should all feel free to laugh. They think that every time somebody pays tuition, or buys saimin on campus, or pays for a parking space, the race of ethnic Hawaiians should get 20% of all that money (revenue from using the ceded lands) -- as though the professors don't have to be paid, the noodles didn't cost anything to make, and the parking spaces simply materialized from nowhere. Who do they think paid for the buildings? Who paid for the Center for Hawaiian Studies, and all those scholarships and tuition waivers? Where did the library books come from?

The ceded lands belong to ALL the people of Hawai'i. The ceded land revenues belong to ALL the people of Hawai'i. The institutions used by ethnic Hawaiians and everyone else cost money to operate, and are heavily subsidized by the taxpayers. Instead of getting 20% of ceded land revenues, OHA should be forced to pay for the difference between what the ethnic Hawaiian students pay to attend school and what it actually costs the State for them to attend. So don't be fooled by revisionist history, half-truths, and Clintonesque twisting of facts. Ethnic Hawaiians entitled to free tuition because the University sits on ceded lands? 'A'OLE!!

Attorney Bill Burgess, and his wife Sandra Puanani Burgess, published an article in the July 2001 edition of the Hawai'i Bar Journal explaining the history of the ceded lands and why the Supreme Court should do what it has now done and dismiss OHA's lawsuit. Their article can be seen at


The Burgesses also have a website focused on the ceded lands issue, at


Broader issues related to "stolen lands," "ceded lands," "native gathering rights," and reparations can be found at the "land issues" webpage


which is part of the larger website about Hawaiian Sovereignty. Of particular interest on that page, readers will find that on March 28, 2000 a multi-racial group of 23 citizens of Hawaii MOVED TO INTERVENE in OHA v. State in the Hawaii Supreme Court. Their MEMO IN SUPPORT charges the State Attorney General has a conflict of interest because he represents the interests of OHA in the Rice case. Their PROPOSED BRIEF challenges the validity of OHA itself based on the RICE DECISION.

The motion to intervene, and accompanying brief, were filed by Bill Burgess on behalf of a multiracial group of plaintiffs which included this writer and two ethnic Hawaiians, plus 20 others people. That attempted intervention offered some of the reasons why OHA is unconstitutional. The State of Hawai'i is obligated to defend the state constitution, which includes OHA as a state agency. For that reason the state was unable to defend itself against OHA by raising the argument that OHA is federally unconstitutional. Therefore our group moved to intervene in the ceded lands case to raise these arguments which the state was helpless to raise in its own defense. Although we were not allowed to intervene, the arguments raised in that brief remain valid for future use.


In the coming months and years, the Legislature will undoubtedly be asked to "repair" the "damage" done by the Supreme Court's dismissal of OHA's ceded lands lawsuit. A massive public relations campaign will be launched to convince legislators to give ethnic Hawaiians what is "rightfully" theirs, to remedy past "injustices," to help these "poor, downtrodden victims of history." Such nonsense must not be believed. Thanks to the Rice and Arakaki decisions, and now the ceded lands decision, the people of Hawai'i have an opportunity to escape from racial balkanization through racial entitlement programs. We can escape from the robber-barons who run the Hawaiian grievance industry, collecting huge salaries and profits off the backs of a racial group, some of whom may indeed be needy. It is time to recognize that all the people of Hawai'i are equal under the law. Government help should be given to people based on need alone, not race. All are free to pursue their cultural and spiritual values. Hawaiian culture and spirituality are great treasures for the world; they are first among equals as defining characteristics of Hawai'i. But racial entitlement programs, racial separatism (Native Hawaiian Recognition bill), and ethnic nationalism (independence movement) are legally, historically, and morally bankrupt. Electricity is expensive in Hawai'i, so the last person leaving OHA should please remember to turn out the lights.

In this period following the terrorist activity of September 11, 2001, we have seen a great resurgence of patriotism. People of all racial groups, national origins, and religions are pulling together as citizens of the United States. Even in areas of Hawai'i where Hawaiian sovereignty activists are typically very visible, people flying the U.S. flag alone greatly outnumber people flying the Hawaiian flag alone. It is clear that the overwhelming majority of ethnic Hawaiians proudly call themselves Americans. Allocation of government resources to specific racial groups encourages racial separatism and ethnic nationalism. Now is the time to stop doing that.


Here is a letter sent to the legislature on September 24, 2001:

To: Members of the Hawai'i Legislature

From: Kenneth R. Conklin, Ph.D.

Re: Ceded Lands Decision and OHA Funding

Date: September 24, 2001

Aloha kakou,

On September 12 the Hawai'i State Supreme Court handed down its long-awaited ruling in the ceded lands case OHA v. State of Hawai'i. The Court ruled there is no way a court can decide how much the State of Hawai'i must pay to OHA for use of the ceded lands. Act 304 has been invalidated. Accordingly, unless the legislature does something foolish, the State has no further legal obligations to pay anything to OHA. Neither is there any moral obligation to pay OHA, as I will explain below.

This is not a crisis. It is an opportunity. I am asking you to take this opportunity to do the right thing for the people of Hawai'i -- do nothing at all in regard to OHA funding or ceded land revenue allocation. Indeed, since Act 304 has been ruled a nullity, you really should consider your fiduciary obligation to all the beneficiaries of the ceded lands trust (i.e., all of Hawai'i's people) to demand that OHA repay to the State of Hawai'i all the money OHA has collected under that illegal law.

Under ordinary circumstances it would require great political bravery to stand up against the powerful Hawaiian institutions and their service providers, and to deny their increasingly strident demands for money, land, and power. But the ceded lands decision coincided with the economic crisis caused by the September 11 terrorism. Thus, the economic crisis forces the State of Hawai'i to get a firm grip on its priorities. It is a great opportunity to do a job that long needed to be done -- to redirect government resources toward essential public services that benefit all Hawai'i's people. And you can do this job easily, simply by NOT going out of your way to rescue an ungrateful OHA at a time when Hawai'i's people are facing an economic crisis.

Begin the process of restoring equality under the law. Stop handing over to one group, defined by race, revenues and lands that properly belong to all the people. If government has funds to help needy people, let such help be given simply on the basis of need without regard to race. Stop giving help based on race regardless of need.

When you give government resources to a race-based agency and tell people of that race to look to that agency for help, you are pulling apart our society. You are encouraging people to identify more closely with their racial group than with their citizenship in the state and federal governments.

In this time of tragedy and economic disaster, let us come together as one people, proud to be citizens of one unified State of Hawai'i and citizens of the United States of America. Let us stop using government resources to fund an institution that sends hundreds of millions of dollars out of state into the stock market instead of helping people it was supposed to help. Stop funding an institution that spends millions on public relations and political advertising to pull us apart by supporting racial separatism and ethnic nationalism. Stop giving state funds to an institution that uses that money to sue the state for more.

I know your time is limited, so let me briefly give some basic principles about the ceded lands, and then offer additional resources if you wish to investigate further.

The ceded lands belong to all the people of Hawai'i, not to just one racial group. That was true of the government and crown lands of the Kingdom, and it remained true in the Republic, Territory, and State.

For the first 20 years of statehood, virtually all the ceded land revenues went to support the public schools. There is nothing in the Organic Act or the Admission Act that requires any ceded land revenue to be directed specifically toward any racial group.

Ceded land revenue can be used for any one or more of five purposes. One of those purposes is betterment of Native Hawaiians. Native Hawaiians can he helped by improving the public schools, and the other services of the State of Hawai'i which Native Hawaiians utilize.

Native Hawaiians comprise about 20% of Hawai'i's population, and about 26% of Hawai'i's public school children. Therefore, if ALL ceded land revenues were given to the school system, Native Hawaiians would automatically receive the benefit of more than 20% of ceded land revenues without any need for unconstitutional and socially divisive racial entitlement programs.

The State of Hawai'i has been allocating 20% of ceded land gross revenue to OHA, and would have been forced to continue doing so under Judge Heely's earlier decision. But as anyone knows, it takes huge capital investment and operating expenses to produce that revenue. 20% of gross revenue is far more than 100% of net income. To understand this point, remember that the Admission Act specified 5 purposes for ceded land revenue, one of which was public education. So every time OHA demands 20% of ceded land revenue, the Superintendent of Schools should also demand an equal number of dollars.

If OHA complains it needs more money, tell OHA to start using the money it has hoarded and sent to the stock market. Last year OHA had assets of more than $400 Million, of which $350 Million were in the stock market. Even without any interest or dividends at all, that money if simply spent would have covered OHA's annual expenditures for more than 20 years. Let's bring that money back home to Hawai'i and use it to help needy people.

For further information about the ceded lands lawsuit, see an outstanding article in the July 2001 issue of the Hawai'i Bar Journal by attorney H. William Burgess and Sandra Puanani Burgess, also available on the internet at

For a website focused on the ceded lands issue, see

For the complete text of the decision in the year 1910 in the crown lands case Lili'uokalani v. United States, see

For a thorough examination of the legitimacy of Hawaiian reparations for the overthrow of the monarchy, see

For general discussion about Hawaiian sovereignty, see

Finally, I offer you a letter-to-editor published in the Sunday Honolulu Advertiser of September 23, 2001:

[full text of that letter was sent to the legislature, and can be viewed above on this webpage]


Honolulu Star-Bulletin, Sunday, February 9, 2003

OHA still awaits land payoff
The issue of the longstanding dispute over revenues from ceded lands resurfaces

By Ron Staton
Associated Press

Haunani Apoliona sees the "hustling and bustling" DFS-Hawaii store in Waikiki, where tourists from Japan buy duty-free goods to take home, and wonders why native Hawaiians aren't benefiting from those sales.

That is a key issue in a long-standing dispute between the state and native Hawaiians. The agency Apoliona heads is charged with distributing benefits to Hawaiians and already has turned down a settlement of more than $250 million and 360,000 acres.

More than 20 years after a state law promised funds to help Hawaiians, the Office of Hawaiian Affairs is still battling for those funds in a dispute that goes back to the overthrow of Queen Liliuokalani on Jan. 17, 1893.

The issue is ceded land revenues.

Ceded lands are crown or public lands that were ceded to the new Republic of Hawaii after the overthrow of the monarchy, and then to the Territory of Hawaii after U.S. annexation of the islands in 1898 and to the new state of Hawaii in 1959.

Ceded lands make up about 1.4 million acres, or 95 percent of state-owned lands.

"We're not being greedy, but just asking for what we are statutorily entitled to," said OHA chairwoman Apoliona.

The 1959 Statehood Admissions Act provides that lands granted to the state be held in trust for public education, health, housing, farming and conservation and betterment of Hawaiians.

A 1980 state law provides that each of the five areas would get 20 percent of the "funds derived from the public land trust," and that the portion for Hawaiians goes to OHA, a state-supported agency created by a 1978 constitutional amendment as a public trust with a mandate to better the conditions of Hawaiians. The office, established in 1980, was to be funded with the share of revenues from ceded lands.

However, the state and OHA failed to reach agreement on what constituted "funds derived from the public land trust," and OHA sued the state in 1983.

In 1987, the Hawaii Supreme Court said it could not decide the case because the law did not provide the courts with a way to measure and calculate the amount due to OHA.

In response, the Legislature in 1990 passed Act 304 to provide a more detailed mechanism for measuring and calculating the amount due OHA.

"The question is 20 percent of what? Act 304 tried to define that," said Ernest Kimoto, an OHA staff attorney.

In 1993, the state, as partial settlement of its obligation, gave OHA $135 million, which formed the basis of the OHA trust fund, Kimoto said. That amount covered what the state should have paid between 1980 and 1991, according to Apoliona.

Wise investment increased that fund to about $400 million by the late 1990s, former OHA chairman Clayton Hee said, but it was hit hard by post-Sept. 11, 2001, stock market losses and now stands at about $268 million.

During negotiations to settle the issue, the state and OHA signed a memorandum listing four areas of disagreement. The money in dispute is from community hospitals, the duty-free shops, public housing, and interest accrued by the state during the 1980-91 period it did not make quarterly payments.

In 1997, the Federal Aviation Administration entered the ceded lands dispute, saying federal money for Honolulu International Airport, one-third of which sits on ceded lands, would be withheld unless the state recovered $28.2 million in airport revenues paid to OHA for non-airport purposes.

Federal statute requires that landing fees and related revenues go back into airport maintenance and construction, Kimoto said.

The "Forgiveness Act" passed by Congress in 1998 effectively allowed OHA to keep the $28.2 million, but prohibited further use of any airport funds to pay claims related to ceded lands.

The Hawaii Supreme Court in 2001 held that the state's plan for paying OHA was invalid because it conflicts with the Forgiveness Act.

In its ruling, the Supreme Court reaffirmed the state's obligation to Hawaiians and their right to benefit from the ceded lands trust.

Former Gov. Ben Cayetano said the ruling effectively reversed a ruling by Circuit Judge Daniel Heely in 1966 that allowed OHA to sue to recover ceded land revenue from hospitals, duty-free shops, public housing and the interest earned by the state.

OHA insists that Heely's ruling on revenue from the four areas still stands.

The University of Hawaii main campus in Manoa also sits on ceded lands, and OHA is at odds with the state on whether it should share in such revenues as parking and dormitory fees, Kimoto said.

Because of the Supreme Court ruling, Cayetano ordered state departments to withhold payments to OHA. Shortly after Gov. Linda Lingle took office on Dec. 2, OHA made a request for payment of $10.3 million in undisputed payments.

Another quarter has passed, and the payments now total $12.3 million, according to Kimoto and Apoliona.

Lingle has pledged to make the back payments, but said she first wants the state attorney general to work out a way to continue the payments without the chance of a court challenge.

"We must make absolutely sure that we do not inadvertently drive a wedge between Hawaiian and non-Hawaiian communities," Lingle said in her Jan. 21 State of-the-State address.

Apoliona said she hopes the quarterly payments will resume "so that our revenue stream will continue until we can get a new Act 304." A bill revising the payment plan has been introduced in the state Legislature. OHA also is proposing an interim revenue bill, Apoliona said.

Cayetano in 1999 offered OHA $251 million and 360,000 acres of ceded lands to settle the issue, Hee said. However, Cayetano insisted it be a "global" settlement that would relieve the state of any future OHA claims.

The OHA board declined to accept the proposed settlement, voting 5-3 with one trustee absent to terminate the negotiations.

"If OHA had settled, it wouldn't be in the position it is in now," said Hee, who was chairman at the time. "I don't expect there will be another opportunity for a quarter-billion dollars and land the size of Kauai."

Cayetano said the OHA trustees went to great lengths to argue for a larger settlement.

"They got greedy and demanded more," he said, insisting that the state's offer was motivated "by a genuine desire to seek a permanent settlement of the ceded land dispute."

Circuit Judge Sabrina McKenna ruled Dec. 5 that the state has the legal authority and sovereign immunity to sell ceded lands. OHA has appealed that ruling.


Honolulu Star-Bulletin, Tuesday, July 22, 2003

OHA sues to resume land revenues
The agency says that the state failed in its fiduciary duties as trustee of the lands

By Debra Barayuga

The Office of Hawaiian Affairs, the agency responsible for distributing benefits to Hawaiians, has gone back to court to get the state to resume paying ceded land revenues it owes.

OHA logo The complaint, filed yesterday in Circuit Court, is the latest development in the long-standing ceded land dispute. The state attorney general could not be reached for comment.

Under the state Constitution, OHA is entitled to income and proceeds from ceded lands, former crown or public lands that were ceded to the Republic of Hawaii after the overthrow of the monarchy in 1893.

In 1990 the Legislature passed Act 304 to provide a mechanism for determining the amount of ceded land revenues owed to OHA. The law specified that OHA is entitled to 20 percent of revenue from the ceded lands.

Three years later the state paid OHA $19 million and agreed to make annual revenue payments. OHA filed a lawsuit in 1994 to resolve all remaining back-payment issues.

On Sept. 12, 2001, the Hawaii Supreme Court ruled that Act 304 conflicted with the 1998 "Forgiveness Act" passed by Congress, which prohibited further payment of airport revenues for claims related to ceded lands, and was therefore invalid. However, the high court reaffirmed OHA's right to benefit from the ceded lands trust.

Based on the ruling, then-Gov. Ben Cayetano ordered state departments to stop payments to OHA. He offered to settle the issue of repayment in 1999 with a global settlement of $251 million and 360,000 acres of ceded lands, but OHA declined.

Lawmakers introduced a bill last legislative session to reinstate Act 304 but did not have enough support. A committee was formed instead to review it.

OHA's complaint alleges the state breached its fiduciary duties as trustee of the public land trust when it failed to oppose the Federal Aviation Administration's position that payments to OHA from airport revenues were illegal and were not a permissible use of airport revenues.

OHA is asking that the court order the state to reinstate Act 304, make airport-related payments from other sources and appoint an independent trustee to resolve issues, including reinstating Act 304 and payment of revenues from other sources other than airport revenues. The agency also seeks an injunction to prohibit state officials from opposing its efforts.

OHA alleges the state is liable for damages in the 1994 case and amounts due under Act 304 that have yet to be paid.


Honolulu Advertiser, Saturday, September 10, 2005

Ceded-land decision stands

By Ken Kobayashi
Advertiser Courts Writer

In a second legal setback for the Office of Hawaiian Affairs in nine days, the Hawai'i Supreme Court yesterday affirmed the dismissal of a lawsuit that OHA had hoped would lead to recovering at least $150 million from the state related to revenues from lands once belonging to the Hawaiian kingdom.

The high court upheld a 2003 dismissal of OHA's lawsuit alleging the state should have done more to oppose a 1997 federal law that barred the state from giving OHA money from Ho-nolulu International Airport, a portion of which sits on those lands.

In addition, the court once again declared how much OHA should receive from the state rests with the state Legislature.

OHA attorney Robert Klein, a former associate Hawai'i Supreme Court justice, said on behalf of OHA beneficiaries, they are "very disappointed."

He said OHA should now work with the Legislature and the governor to reach a settlement on the ceded land payments. "The courts certainly aren't giving OHA any relief," he said.

State lawyers agreed the court made clear OHA should turn to lawmakers.

"We're happy with the outcome with the case and we very much appreciate the thoroughness of the decision," Deputy Attorney General Dorothy Sellers said. "OHA really has no option now, except to go to the Legislature."

Yesterday's 55-page decision follows the Aug. 31 ruling by the U.S. 9th Circuit Court of Appeals that reinstated part of a taxpayers' lawsuit challenging about $2.8 million a year in state tax money for OHA. The lawsuit alleged state payments to OHA violate the constitution because its programs benefit only residents of Hawaiian ancestry.

Although the appeals court reinstated only part of the lawsuit, OHA had wanted the appeals court to affirm the dismissal of the entire case.

Yesterday's ruling deals with the thorny issue involving the amount the state should pay OHA from the revenues from what's known as ceded lands, and also, who should make the ultimate decision — state lawmakers or the courts.

The state pays OHA about $9.5 million for ceded land revenues.

But the state and OHA have long disagreed over whether revenues related to — but not directly from — ceded lands should be part of the payments. These revenues, for example, include money from Honolulu International Airport's Duty Free Shoppers' auxiliary locations that are away from the airport and do not sit on ceded lands.

Former Circuit Judge Daniel Heely ruled the state was liable to OHA for a portion of those disputed revenues, but in 2001, the high court overturned Heely's decision and struck down a 1990 state law that established a formula that OHA should get 20 percent of the ceded land revenues.

The high court said the 1990 law conflicted with the 1997 federal law, the Forgiveness Act, which barred the state from giving airport money to OHA, but also "forgave" the state from recovering $28.2 million it had earlier paid to OHA.

OHA later filed a suit alleging the state breached its fiduciary duty to OHA by not opposing the Forgiveness Act. Circuit Judge Gary Chang threw out the lawsuit in 2003.

The high court yesterday affirmed Chang's dismissal.

OHA attorneys had argued that if the state had challenged the Federal Aviation Administration memo that led to the law, the Forgiveness Act would not have passed. In addition, they contended if the state had notified OHA that the state would not be challenging the memo, OHA could have opposed the memo and prevented the legislation's passage.

"We believe that such allegations are mere speculation, and, more importantly, it would be impossible for (OHA) to prove whether the state's actions or inactions led to Congress' passage of the Act," the court said in the opinion written by Chief Justice Ronald Moon.

Attorney General Mark Bennett earlier estimated that OHA might have received hundreds of millions of dollars if it ultimately prevailed. Klein yesterday estimated it would have been at least $150 million to $300 million.


Honolulu Star-Bulletin, Saturday, September 10, 2005

Court again rejects OHA’s claim to airport ceded-land rent

By Debra Barayuga

The Hawaii Supreme Court has again shot down attempts by the Office of Hawaiian Affairs to recover revenue from airport ceded lands.

The high court upheld the dismissal yesterday of an OHA lawsuit seeking what it estimates to be hundreds of millions of dollars in revenues it would have received under an invalidated state law.

State attorneys say OHA can go to the Legislature to settle the amount the state owes. In two previous suits brought by OHA, the Supreme Court ruled that the amount payable to OHA must be determined by the Legislature.

OHA trustees and their counsel, former Associate Justice Robert Klein, could not be reached for comment.

Under the state Constitution, OHA gets a percentage of revenues from former monarchy lands held in trust by the state government. A 1990 settlement agreement between the executive and legislative branches resulted in Act 304, which mandated that OHA would get 20 percent of ceded-land revenues.

But the Hawaii Supreme Court invalidated Act 304 in September 2001, saying it conflicted with a federal law that prohibits the diversion of airport revenues for non-airport uses.

The federal Forgiveness Act passed in 1997 prohibited the state from using airport money to pay OHA but forgave $28.2 million it had paid between 1992 and 1995. Had the state not settled the matter, it would have been obligated to repay that amount to the federal government.

OHA sued the state in July 2003, saying the state breached the 1990 agreement and its trust duties by agreeing with the Forgiveness Act, because it resulted in the invalidation of Act 304.

The state had argued initially that the payments to OHA were for rent. But then-state Attorney General Margery Bronster later wanted to resolve the dispute and chose not to challenge the Federal Aviation Administration's position that the $28 million payment to OHA was improper. The U.S. Department of Transportation inspector general had concluded earlier that the payments were illegal because no services were rendered.

The high court's ruling yesterday "upheld the exclusive authority of the attorney general to settle claims for the state of Hawaii, including claims by the federal government for the diversion of airport revenues," said Deputy Attorney General Dorothy Sellers.

"We're happy with the decision, and we appreciate the thoroughness and promptness with which the court ruled," she added.

The high court had heard oral arguments from both sides two months ago.

In their 55-page decision, the justices ruled that the attorney general's decision to settle the dispute with the federal government "fell squarely within her exclusive authority to control and manage 'the settlement of imminent actions against the state.'"

The justices also ruled that the claims OHA had against the state were not within the trust obligation that the state owes OHA. They also rejected OHA's argument that Act 304 was a binding, enforceable contract, Sellers said.

The state has continued to pay its 20 percent share of revenues -- close to $9 million a year from other sources other than airport fees.


Honolulu Advertiser, Saturday, April 29, 2006

OHA suit dismissal affirmed

By Ken Kobayashi

For the second time, the state Supreme Court yesterday affirmed the dismissal of a lawsuit by the state Office of Hawaiian Affairs seeking from the state hundreds of millions of dollars related to ceded lands once held by the Hawaiian monarchy.

The high court last year unanimously affirmed Circuit Judge Gary Chang's dismissal of the suit in 2004, but agreed to reconsider its ruling, paving the way for yesterday's decision.

The court, however, in its 64-page opinion, also repeated its position that the state Legislature has authority to determine how much the state must pay OHA to fulfill its constitutional obligation of paying a portion of the income from ceded lands to OHA.

The portion is 20 percent under state statute, the court said.

The state has recognized that it owes OHA a portion of the revenues from ceded lands.

State lawmakers are to vote on a measure next week that would provide OHA with a lump sum of $17.5 million and annual payments of $15 million.

OHA's lawsuit dealt with revenues that the state disputes should go to the Hawaiian organization.

OHA contended the revenues are related to ceded lands — such as income from the Duty Free Shoppers Waikiki store that is not on ceded lands but is related because Duty Free's headquarters are at Honolulu International Airport, which is on ceded lands.

OHA contended the state breached its obligations to OHA by not doing enough to halt the passage of a 1998 federal law that essentially negated the basis for OHA's claims to the disputed revenues.

"From the beginning of the history of this case, I have believed that the claim is legally meritless, and I am gratified that the Circuit Court's dismissal was unanimously upheld on appeal by the Hawai'i Supreme Court," Attorney General Mark Bennett said.

Robert Klein, OHA's lawyer, could not be reached for comment yesterday.


(c) Copyright 2001 - 2006, Kenneth R. Conklin, Ph.D. All rights reserved




Email: ken_conklin@yahoo.com