History was made Tuesday when Hawaii’s highest court held its first-ever remote oral arguments through a video platform.

It was necessary because of the social distancing requirements spawned by the COVID-19 pandemic.

The Hawaii Supreme Court will probably make history again when it eventually rules on the actual case, Carmichael v. BLNR.

At issue is whether the state Board of Land and Natural Resources and Alexander & Baldwin, also a defendant in the case, can sidestep Hawaii’s Environmental Policy Act so that water can be diverted from streams in East Maui.

Chief Justice Mark Recktenwald presided as the Hawaii Supreme Court heard arguments remotely in Carmichael vs. BLNR.

Attorneys for BLNR and A&B — a large real estate company and formerly one of the Big Five companies that dominated Hawaii’s territorial period — told the five justices they believe the law was followed when the state annually granted the company and subsidiary East Maui Irrigation revocable permits dating back to 2005.

They say that the water is used to support important agricultural operations and that Upcountry Maui depends on the diversion for water to the area.

A disruption of that process could prove devastating, attorneys for A&B, BLNR and Maui County Board of Water Supply — another defendant — said, as the state tries to regain its economic footing after nearly two months of COVID-19.

But the Native Hawaiian Legal Corp. says the diversion of water from about 33,000 acres of state land — as much as 450 million gallons per day — should not continue until an environmental assessment is completed, the very first step in the environmental review process required under HEPA.

Summer Sylva, executive director for the Native Hawaiian Legal Corporation, argued that the granting of water-diversion permits to Alexander & Baldwin violated a key state environmental law.

The water comes from the Koolau Forest Reserve, and the NHLC argues that the development of a ditch system on state land and the diversion of water has resulted in “cumulative and significant” environmental and cultural harm.

In 2001, the Land Board gave A&B a “holdover” status in its permits, something that NHLC attorney Summer Sylva said was a mistake.

“Now for the next 19 years, HEPA — a law intended to protect East Maui streams, its kupuna and their loi kalo — was ignored, inflicting irreparable harm upon our most precious of cultural resources,” she said in her concluding remarks.

She continued: “HEPA is more than just words on paper. Hundreds of permit holders already know this to be true, and dutifully comply. HEPA applies to A&B’s permits too, and if complied with now, even after all these years, has the potential of preventing any further harm and restoring justice long overdue to East Maui.”

Technical Difficulties

The Carmichael case is complicated and jargony, filled with reams of briefs, involves multiple state laws, and crosses state and county jurisdictions.

Many of the questions from Chief Justice Mark Recktenwald and Associate Justices Paula Nakayama, Mike Wilson, Richard Pollack and Sabrina McKenna centered on why, after so many years, an environmental impact statement had not been completed.

Some justices also expressed concern about water being cut off to Upcountry Maui. Sylva, the NHLC attorney, expressed confidence that A&B and EMI and the county could work out a solution.

BLNR attorney Linda Chow told the high court that the state agency had followed the law in continuing to grant A&B revocable permits year after year even without conducting an environmental review.

The case, live-streamed on YouTube via Cisco Webex, was interrupted early on for about 15 minutes because Pollack did not have the bandwidth needed to stay connected.

On several occasions Recktenwald had to remind his colleagues to unmute their computer microphones to be heard. And at one point Wilson’s computer could be heard inadvertently accessing Siri, Apple’s virtual assistant (“I’m on it!”).

After the hearing, which lasted nearly two hours, Recktenwald thanked everyone participating for their patience and “good humor.”

Public Trust Doctrine

While it is a 21st century legal case, Carmichael has its origins in the 19th century when sugarcane, a thirsty crop, was first harvested on Maui.

BLNR attorney Linda Chow and A&B attorney David Schulmeister pointed out that A&B had been diverting water from East Maui many decades before HEPA was enacted in 1974.

Limited water rights for some farmers have been restored in recent years, but original petitioners to the court have also died waiting for a resolution of the dispute. The Hawaii Supreme Court is being asked to be the final arbiter.

The NHLC represents farmers Healoha Carmichael and Lezley Jacintho and the nonprofit Na Moku Aupuni O Koolau Hui. The hui represents taro farmers that want to restore water rights in East Maui, and they want the high court to invalidate the permits.

A&B attorney David Schulmeister said it was important to understand the timeline of how the permits came to be granted from the BLNR. He warned of dire consequences should the justices revoke them.

The Maui County Department of Water Supply’s primary concern is that EMI continue to flow water to thousands of residents in Upcountry Maui, an essential function that county attorney Caleb Rowe said could not be easily resolved should A&B lose its permit.

A&B’s four permits to divert water were first granted by the BLNR in 2000 and then held over in the two years that followed. The permitting was contingent on the resolution of a contested case concerning A&B and EMI’s application for a long-term lease of the land.

Carmichael had previously been heard by the First Circuit Court, which ruled in favor of the plaintiffs (though it said HEPA was not violated), and the Intermediate Court of Appeals, which vacated the lower court’s ruling. The ICA said the continuation of permits was allowed under state law, HEPA notwithstanding.

NHLC then asked the Hawaii Supreme Court to take up the case.

At the core of Carmichael is the question of what is in the best interests of the state, and whether public trust duties enshrined in the state constitution have been upheld.

Such is the importance of the dispute that the Hawaii Legislature approved a three-year extension of A&B’s four permits in 2017, something that drew heated protests from Native Hawaiian and environmental groups like the Sierra Club but also fierce lobbying from A&B, which remains a wealthy and powerful political player.

Last year, the state Senate deadlocked on whether to again extend the water permits and whether to include A&B along with several utility companies, farmers and ranchers that also tap into state waters.

While A&B no longer grows sugar in Central Maui, it wants to continue diverting water to Mahi Pono, another politically connected company that A&B sold its lands to. Mahi Pono wants to cultivate diversified agriculture.

Asked for comment on the Carmichael case, Lynn Kenton, director of corporate communications for A&B, said in an emailed statement, “As we await the decision of the Hawaii State Supreme Court, EMI will continue to operate in compliance with its current state-granted water permits, allowing it to provide uninterrupted water to the County of Maui for its over 35,000 Upcountry Maui residents, dozen schools, the lone Upcountry hospital, businesses and farmers as well as to Mahi Pono, to enable their continued transformation of the Central Maui valley back to active agricultural operations.”

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