Revocable Water Permit Renewals Are Reviewable Under HRS § 91-14 When a Contested Case Hearing Is Wrongfully Denied

1. Introduction

Kia'i Wai o Wai'ale'ale and Friends of Māhā'ulepū (collectively, “Petitioners”) challenged the Board of Land and Natural Resources (“BLNR” or “Board”) for (1) denying their requests for contested case hearings and (2) continuing a long-running revocable water permit (Revocable Permit No. S-7340) held by Kaua'i Island Utility Cooperative (“KIUC”). The permit authorized use of State lands and diversion infrastructure in the Līhuʻe-Kōloa Forest Reserve (the “Blue Hole diversion”) to divert large volumes of water to support KIUC’s hydroelectric plants, and it had been continued annually for almost two decades.

Petitioners asserted that permit continuation—especially after 2019 damage to diversion structures—caused harms to Kānaka Maoli traditional and customary practices (article XII, section 7), implicated public trust duties (article XI), and raised environmental concerns. They sought contested case hearings for the 2021 and 2022 continuations; BLNR denied the requests and granted continuations. After the permit later expired, the case raised threshold questions of mootness, standing, due process entitlement to a contested case hearing, and (in Part II) Environmental Court jurisdiction under HRS § 91-14 to review BLNR’s proceedings.

2. Summary of the Opinion

The Hawaiʻi Supreme Court vacated the ICA’s disposition and affirmed the Environmental Court’s judgment, remanding to BLNR for further proceedings.

Mootness: Although the permit expired, the Court held two exceptions applied: (1) “capable of repetition yet evading review” and (2) the “public interest” exception, relying heavily on Carmichael.
Standing: Petitioners had injury-in-fact standing based on harms to traditional and customary rights as found by the Environmental Court (article XII, section 7), and the ICA should not have reframed standing on different constitutional/statutory grounds absent a plain-error basis.
Due process / contested case: Applying Flores and Sandy Beach Def. Fund, the Court held Petitioners had constitutionally cognizable property interests in traditional and customary practices and were entitled to contested case hearings. The absence of a transcript for the 2020 meeting did not defeat due process analysis because the operative decisions were made at the 2021 meeting for which a transcript existed.
Part II (jurisdiction): The Environmental Court had HRS § 91-14 jurisdiction to review BLNR’s administrative proceedings culminating in the permit continuations, even though the continuations occurred in public meetings, because the agency’s denial of a contested case request followed immediately by a vote granting the permit is part of a final agency action subject to judicial review under a functional approach reinforced by Sierra Club v. Bd. of Land & Nat. Res. (Sierra Club I).

3. Analysis

3.1. Precedents Cited

A. Mootness doctrine and exceptions

Carmichael v. Bd. of Land & Nat. Res.: The Court treated this case as closely analogous: challenges to expired revocable water permits remain reviewable under mootness exceptions because annual permits “evade full review” and issues recur. Carmichael also supplied the public-trust-lens critique of BLNR’s revocable permit practices (including the need to demonstrate “best interests of the State” compliance through adequate explanation).
Cmty. Ass'ns of Hualalai, Inc. v. Leeward Plan. Comm'n: Petitioners invoked Hualalai to argue “live controversy” based on continuing impacts; the Court distinguished it (no ongoing construction/permitting dispute here) and instead proceeded through Carmichael-style exceptions.
Kaleikini v. Thielen: Provided the three-factor framework for the public interest exception (nature of question; desirability of guidance; likelihood of recurrence), which the Court applied to BLNR revocable water permits and contested case denials.
Cnty. of Hawai'i v. Ala Loop Homeowners and Sierra Club v. Dep't of Transp.: Cited for de novo review of mootness and general mootness principles.
Tax Found. of Haw. v. State: Referenced (among other points) as an abrogation on other grounds in standing/mootness lines and to situate doctrinal updates.

B. Standing (injury-in-fact) and environmental openness

Pub. Access Shoreline Haw. v. Haw. Cnty. Plan. Comm'n (PASH): Cited for standing review and (in Part II) for HRS § 91-14 jurisdiction requirements, including the “contested case” concept and finality.
Kilakila 'O Haleakala v. Bd. of Land & Nat. Res. (Kilakila): Supplied the three-part injury-in-fact test (injury, traceability, redressability), and, in Part II, the Court’s receptiveness to functional judicial review when contested case rights are at stake.
Citizens for the Prot. of the N. Kohala Coastline v. County of Hawai'i: Quoted (through Kilakila) for Hawaiʻi courts’ historically non-restrictive standing approach in environmental matters.
Sierra Club v. Dep't of Transp. (2007): Used to reject the premise that plaintiffs must prove multiple different injuries to establish standing.

C. Due process entitlement to a contested case hearing

Flores v. Bd. of Land & Nat. Res. and Sandy Beach Def. Fund v. City Council of City of Honolulu: These cases supplied the Court’s controlling two-step due process analysis: (1) whether the asserted interest is “property” protected by due process, and (2) what procedures (balancing private interest, risk of error, government burden) are required. The Court applied the balancing to conclude contested case procedures were necessary given factual disputes, the nature of cultural-practice interests, and the limitations of a public meeting format.
Mauna Kea Anaina Hou v. Bd. of Land & Nat. Res. and In re 'Iao: Supported the proposition that article XII, section 7 traditional and customary practices constitute a constitutionally cognizable property interest triggering due process protections.
In Re Application of Maui Elec. Co., Ltd.: Cited for the principle that protected “property” interests arise from independent sources such as state law.
Hui Kako'o Aina Ho'opulapula v. Bd. of Land & Nat. Res.: Addressed the procedural importance of timely written contested case petitions following an oral denial, preserving appealability under HRS § 91-14.

D. Public trust and BLNR’s authority over water-related land dispositions

In re Water Use Permit Applications: Confirmed constitutional adoption of the public trust doctrine (article XI, sections 1 and 7) and framed BLNR’s trustee obligations when disposing of interests involving water resources.
Carmichael v. Bd. of Land & Nat. Res.: Again pivotal, underscoring that BLNR’s revocable permit authority is “narrowly exercised” and must be justified as serving the State’s best interests, with trust-consistent reasoning.

E. HRS § 91-14 jurisdiction and “final decision” functionalism (Part II)

Sierra Club v. Bd. of Land & Nat. Res. (Sierra Club I): The centerpiece of Part II. It endorsed a functional approach to what constitutes a reviewable final agency action, warning against insulating final decisions from HRS § 91-14 review simply by acting at a public meeting after denying a contested case request.
Sierra Club v. Bd. of Land & Nat. Res. (ICA published opinion): The ICA relied on its own view (later reversed in part by Sierra Club I); Part II explicitly corrects that jurisdictional limitation.
Gealon v. Keala: Provided the classic finality formulation: a final decision ends proceedings “leaving nothing further to be accomplished.”
Cmty. Ass'ns of Hualalai, Inc. v. Leeward Plan. Comm'n: Cited in Part II on finality principles (cleaned up), reinforcing the “ends the proceedings” concept.

3.2. Legal Reasoning

A. Why the case remained justiciable despite permit expiration

The Court treated annual revocable permit continuations as structurally prone to expiring before appellate review can conclude, matching the “evading review” rationale in Carmichael. It also emphasized the broader public stakes: BLNR’s trustee role over water resources, recurrent disputes about permit continuations and compliance with permit conditions, and the need for guidance on contested case rights in this setting.

B. Standing anchored in traditional and customary rights

The Court refocused standing on the Environmental Court’s findings: declarations from Kānaka Maoli practitioners described specific cultural, subsistence, and religious practices tied to affected streams and places (including Blue Hole as a wahi pana) and alleged impacts from diversion/waste and disrepair. This satisfied “injury” and “traceability” because the challenged BLNR action was the continuation of the permit and the denial of procedures to contest it.

On “redressability,” the Court rejected BLNR’s attempt to shift responsibility entirely to the Commission on Water Resources Management under HRS chapter 174C. It held BLNR’s own statutory authority (HRS chapter 171, including HRS § 171-55 and HRS § 171-58) and constitutional trustee obligations include imposing and enforcing permit conditions and restrictions “which will serve the best interests of the State.” Thus, a contested case hearing and related relief could meaningfully address the asserted harms within BLNR’s sphere of responsibility.

C. Due process required contested case procedures here

The Court applied Flores/Sandy Beach Def. Fund to hold that article XII, section 7 rights are protected “property” interests and that the balance favored a contested case hearing. The public meeting format permitted brief testimony but did not provide the critical tools for resolving disputed facts (development of an evidentiary record, cross-examination, rebuttal evidence) where the parties offered conflicting accounts about diversion impacts, waste, ongoing effects, and compliance with conditions—especially after the 2019 infrastructure failures changed the operative reality of KIUC’s stated hydroelectric purpose.

A notable procedural clarification is the Court’s rejection of the ICA’s reliance on a missing 2020 transcript: the operative agency decisions appealed from were made at the 2021 meeting, and that record sufficed for the due process inquiry.

D. Part II’s jurisdictional rule: BLNR cannot avoid HRS § 91-14 review by proceeding via public meeting after denying a contested case

Part II establishes the most distinct doctrinal development: when BLNR denies a contested case hearing request and then immediately proceeds to decide the underlying permit matter in the same administrative proceeding, the “final decision” for HRS § 91-14 purposes includes the permit decision—not merely the denial of the contested case request.

Relying on Sierra Club I, the Court adopted a functional approach to finality: the permit vote “ends the proceedings, leaving nothing further to be accomplished.” Because the permit continuation determined KIUC’s “rights, duties, and privileges” and was the culmination of the agency process, it was reviewable. This prevents a jurisdiction “loophole” where agencies could defeat judicial review of substantive procedural compliance (such as “best interests” explanations) by labeling the forum a “public meeting” rather than a contested case.

The Part II majority also characterized the Environmental Court’s “best interests of the State” discussion as pointing to procedural deficiencies (absence of required explanatory findings) rather than impermissibly reaching the merits of whether the permit should have been continued.

3.3. Impact

Broader judicial review of BLNR permit actions: Part II, informed by Sierra Club I, curtails the ability of agencies to insulate permit renewals from HRS § 91-14 review by denying contested case requests and deciding matters at public meetings.
Strengthened procedural protection for article XII, section 7 claims: The opinion reinforces that credible declarations of impacts on traditional and customary practices can trigger due process rights to contested case hearings, particularly when factual disputes and public trust resource management are at stake.
Revocable water permits face heightened scrutiny as “temporary” instruments used long-term: The Court’s framing—echoing Carmichael—signals skepticism of decades-long reliance on annually renewed “temporary” permits and emphasizes BLNR’s duty to justify continuations as serving the State’s best interests.
Agency enforcement responsibility cannot be offloaded wholesale: BLNR remains accountable for conditions it imposes on land-and-water dispositions even where other agencies (like CWRM) have overlapping water code authority.
Remedial consequences even after expiration: By remanding for a contested case to address alleged prior violations and resulting harms, the decision suggests that expiration will not necessarily erase accountability for permit-conditioned degradation or waste occurring during the permit’s life.

4. Complex Concepts Simplified

Revocable permit (RP): A temporary, discretionary authorization to use State land (and here, water infrastructure/resources) that can be renewed but is not a long-term entitlement like a lease.
Contested case hearing: A trial-like administrative hearing (testimony under oath, evidentiary record, cross-examination) required when law demands it before an agency determines specific parties’ rights, duties, or privileges.
Due process “property interest”: Not limited to physical property; it includes legally protected entitlements. Here, traditional and customary practice rights under article XII, section 7 qualify.
Mootness: Courts typically avoid deciding cases where they cannot grant effective relief (e.g., an expired permit). Exceptions apply when the issue will recur but repeatedly expires before review, or when the issue is important to the public and needs guidance.
HRS § 91-14 review / “final decision”: Judicial review is available once the agency finishes its decision-making process. Part II clarifies that the agency’s final vote granting a permit after denying a contested case request is still a final, reviewable decision.
Public trust doctrine: The State holds certain natural resources (including water) in trust for the people and must manage them for present and future generations, not merely as a landlord collecting rent.

5. Conclusion

This decision meaningfully strengthens procedural accountability in Hawaiʻi water-and-public-land governance. It (1) preserves review of short-term revocable water permit disputes through mootness exceptions; (2) anchors standing and due process in article XII, section 7 traditional and customary rights supported by practitioner declarations; (3) requires contested case hearings where those rights face risk of erroneous deprivation in a public-meeting format; and (4) in Part II, confirms that Environmental Courts have HRS § 91-14 jurisdiction to review BLNR proceedings culminating in permit renewals even when the agency proceeds by public meeting after denying contested case requests—preventing agencies from avoiding judicial review through procedural labeling.