MOLOAA, Kauai — When Facebook founder and principal stockholder Mark Zuckerberg said last year that he and his wife were giving up their effort to use the courts to force owners of small inholder “kuleana” parcels within their huge North Shore estate to sell their land to Zuckerberg, most saw it as a capitulation.
Disclosure of the lawsuits had sparked intense local controversy, especially among Native Hawaiians for whom ownership of such parcels has significant historic and cultural importance. Zuckerberg was seen as an interloper trying to use his financial power to oust owners whose families have held the properties in question for generations.
In January 2017, Zuckerberg wrote an opinion piece that was published in The Garden Island, Kauai’s daily newspaper, saying he and his wife, pediatrician Priscilla Chang, were abandoning the litigation. The reason, he said, was “we understand that, for Native Hawaiians, kuleana are sacred and the quiet title process can be quite difficult. We want to make this right.”
But instead of actually ending the effort to bring pressure on the small landholders he sued in so-called “quiet title” actions, Zuckerberg waited six months before doing anything and then used a legal maneuver to switch his position from plaintiff to defendant. That gives him greater latitude if he elects to continue his attempt to purchase the plots at a court-ordered auction.
Zuckerberg — or a limited liability corporation he controls — could now bid on the properties in a “partition auction” early next year.
The auction was ordered by a judge who ruled the historic ownership rights for the parcels have been so diluted by time that the only way to resolve ownership is to literally sell them off on the steps of the courthouse in Lihue, Kauai’s seat of government.
In such an auction, Zuckerberg, whose net worth has been estimated by Forbes Magazine at $49 billion, would bring purchasing power no other defendant seeking to acquire the parcels could muster.
The case is an outgrowth of litigation originally filed by Zuckerberg and Carlos Andrade, a noted Hawaiian cultural expert and author. That suit sought to force owners of four small parcels of kuleana lands — property that has been in families for decades (often more than a century) but is surrounded by larger holdings.
Originally, Zuckerberg and Andrade were co-plaintiffs. Later in the litigation, Zuckerberg switched roles and became a defendant, leaving Andrade as the sole plaintiff. Status as a defendant would make it easier for Zuckerberg to acquire ownership at the auction since he would be classified by the court as having the same status as other defendants who also claim ownership.
“Many people think this case has gone away, but it doesn’t appear that way.” — Wayne Rapozo
Attorney Patrick Childs, designated by Judge Kathleen Watanabe as a commissioner for purposes of holding the auction, said Zuckerberg or Northshore Kalo LLC, technically the owner of his estate, could bid on the properties.
Wayne Rapozo, also an attorney and the chief defendant in the litigation, is a member of a Portuguese family that settled on Kauai in the 1800s.
“Andrade remains the sole named plaintiff in this action, but both Northshore Kalo and Mr. Zuckerberg remain substantially involved,” Rapozo said in a sworn statement filed in the case several months ago. “Northshore Kalo has employed aggressive litigation tactics, supported by the resources and influence of Mr. Zuckerberg, that have been intimidating, humiliating and daunting.”
He contended that, after Zuckerberg became a defendant, he and Andrade engaged in coordinated behavior to get the court to “compel the purchase” of land claimed by other defendants.
“I think the public should know when a public process is being used to force the sale of private property,” Rapozo said in an email from London, where he resides. “In Hawaii, kuleana lands carry a cultural and historical legacy that raise deep issues and that again call for a public process. Many people think this case has gone away, but it doesn’t appear that way.”
While it has long been assumed — and often reported in the news media — that Zuckerberg owns Northshore Kalo, official confirmation has been difficult to obtain. However, in an email exchange, Northshore Kalo’s Honolulu lawyer, Keoni Shultz, confirmed that the LLC is “affiliated with the Zuckerberg family.”
Said Shultz: “Northshore Kalo withdrew as a plaintiff in this matter in June 2017. Given its interest in these parcels, Northshore Kalo — like other interest holders — became a defendant in the action following its withdrawal as a plaintiff.” He did not respond to questions asking why Zuckerberg switched his status in the case.
Shultz also declined to respond to questions about whether Zuckerberg intends to use the auction process to acquire the land.
A small public relations firm in Lihue, which says it represents Zuckerberg’s interests on Kauai, denied that Zuckerberg or the company plans to bid.
The partition auction could occur as early as February, Childs said.
In 2014, Zuckerberg purchased 700 acres of prime oceanfront land to develop as his island getaway. Construction has been underway for more than a year. Earlier this year, he purchased 89 adjacent acres.
“Mark Zuckerberg stated he was dropping out of the quiet title actions,” Harvey Cohen, Andrade’s lawyer, said. “He then withdrew as a plaintiff and became a defendant in those actions. My client believes he will remain a defendant and not bid at the auction.”
Cohen added that Northshore Kalo’s interests would also be sold at the auction.
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