Fee-Shifting in HEPA Appeals: Private Attorney General Awards Against Developers; HRS § 607‑25(e)(1) Limited to Private Parties and Premature Absent Final Approval Determination

Fee-Shifting in HEPA Appeals: Private Attorney General Awards Against Developers; HRS § 607‑25(e)(1) Limited to Private Parties and Premature Absent Final Approval Determination

Introduction

In this post-appeal fee decision, the Supreme Court of Hawaiʻi resolves Unite Here! Local 5’s motion for attorneys’ fees and costs after its merits victory in Unite Here! Local 5 v. PACREP LLC, No. SCAP-22-0000601, 2025 WL 573299 (Haw. Feb. 21, 2025). The underlying litigation concerns environmental review for two connected high-rise projects in Waikīkī—The Ritz-Carlton Residences at 2121 and 2139 Kūhiō Avenue—developed by PACREP LLC and PACREP 2 LLC (collectively, PACREP), with the City and County of Honolulu’s Department of Planning and Permitting (DPP) serving as the accepting authority for the projects’ final environmental assessments (FEAs).

After Local 5 successfully appealed from summary judgments that had favored PACREP and the City, the union sought to recover appellate fees and costs under two theories: (1) the equitable private attorney general (PAG) doctrine; and (2) Hawaiʻi Revised Statutes (HRS) § 607‑25(e)(1), a fee-shifting statute for private suits seeking injunctive relief against unpermitted or unapproved development. The City and PACREP opposed.

The court’s September 11, 2025 opinion clarifies when fee-shifting is available in environmental appeals and how fees should be equitably allocated among private and public defendants. It awards $112,721.10 in total fees and costs against PACREP alone, denies fees against the City, and holds that HRS § 607‑25(e)(1) is both inapplicable to the City and, on this record, premature as to PACREP pending further proceedings on remand.

Summary of the Opinion

  • The court grants Local 5’s motion in part and awards $112,721.10 against PACREP only, consisting of:
    • $100,774.65 in appellate attorneys’ fees;
    • $5,692.50 for fees incurred preparing the fee motion;
    • $5,016.73 in Hawaiʻi general excise tax (GET); and
    • $1,237.22 in costs (under Hawaiʻi Rules of Appellate Procedure Rule 39).
  • Local 5 is a “prevailing party” for purposes of a PAG award because it prevailed on the main disputed issues on appeal—mootness and improper segmentation under the Hawaiʻi Environmental Policy Act (HEPA, HRS ch. 343)—even though full relief is subject to remand proceedings.
  • PAG doctrine applies:
    • The litigation vindicated important public policies embedded in HEPA and the constitutional right to a clean and healthful environment (Haw. Const. art. XI, § 9).
    • Private enforcement was necessary, given PACREP’s intentional concealment of its plans for 2139, including from its own consultants and the City.
    • The decision benefits a large number of people statewide by clarifying environmental review standards and remedies.
  • Equity warrants imposing fees solely on PACREP. Because the City was misled by PACREP’s concealment, the court declines to shift fees to the City under the PAG doctrine.
  • HRS § 607‑25(e)(1) is not a basis for a fee award here:
    • It applies only against a “private party” and does not authorize fee awards against a governmental entity like the City.
    • It is premature as to PACREP because the court has not yet determined whether PACREP proceeded “without obtaining all permits or approvals required by law.” The remand will determine if a consolidated EA or EIS is required.
  • PACREP did not contest the reasonableness of the requested amounts, and the court found the lodestar-based fees and itemized costs reasonable.

Analysis

Precedents Cited and Their Influence

  • Unite Here! Local 5 v. PACREP LLC, No. SCAP-22-0000601, 2025 WL 573299 (Haw. Feb. 21, 2025) (the “merits opinion”):
    • Held the cases were not moot, both because effective relief remained possible and under the public interest exception to mootness.
    • For the first time, adopted the “double independent utility” test to evaluate improper segmentation of environmental review and found unlawful segmentation of the two Ritz-Carlton towers.
    • Clarified remedies for HEPA violations are governed by equitable discretion and need not entail invalidating permits or destroying completed projects; injunctive-relief efforts (or lack thereof) may factor into remedy selection when a project is complete.
    • Remanded to assess whether the existing FEAs, considered together under the “rule of reason,” sufficiently analyze the combined project; if not, the circuit court must determine whether a new EA or an EIS is required.
  • Sierra Club v. Dep’t of Transp., 120 Hawaiʻi 181, 202 P.3d 1226 (2009) (“Superferry II”):
    • Articulates the three “basic factors” for the PAG doctrine: (1) importance of the public policy vindicated; (2) necessity of private enforcement and burden on the plaintiff; and (3) the number of people who stand to benefit. The court applies these factors and finds them satisfied here.
  • Kaleikini v. Yoshioka, 129 Hawaiʻi 454, 304 P.3d 252 (2013):
    • Defines “prevailing party” status as prevailing on the main disputed issue even if not to the full extent of the original claims. The court relies on Kaleikini to hold Local 5 is a prevailing party for PAG purposes.

Legal Reasoning

The court’s fee decision proceeds along three principal axes: statutory fee-shifting (HRS § 607‑25), equitable fee-shifting (PAG), and reasonableness of the requested amounts.

1) HRS § 607‑25(e)(1): Scope and Timing

  • Private-only application. By its terms, § 607‑25(e)(1) authorizes fee awards in suits for injunctive relief by a private party “against another private party” developing without obtaining all legally required permits or approvals. The court holds the statute does not permit fee awards against a governmental entity such as the City.
  • Prematurity absent a final determination. The statute is triggered only after a determination that required approvals were missing. Because the merits opinion remanded to determine whether a new EA or EIS is required (i.e., whether prior FEAs were sufficient for “the Projects” when properly treated as a single project), the court concludes any fee claim under § 607‑25(e)(1) is premature. Even assuming an approved EA/EIS constitutes a “required approval,” that premise has not yet been adjudicated on remand; thus, the statutory pathway is not yet open.

2) PAG Doctrine: Prevailing Party and the Superferry II Factors

  • Prevailing party status. Under Kaleikini, a litigant prevails by succeeding on the main disputed issues. Local 5 prevailed on the two central appellate issues—mootness and HEPA segmentation—securing remand for substantial further proceedings. This suffices to qualify as a prevailing party under the PAG doctrine.
  • Importance of public policy. The case reinforces the primacy of HEPA in safeguarding the constitutional right to a clean and healthful environment (Haw. Const. art. XI, § 9). Notably, the merits opinion adopted the double independent utility test statewide for analyzing improper segmentation and clarified that HEPA remedies remain available post-completion without requiring demolition or permit invalidation, subject to equitable discretion. These pronouncements are of high public significance.
  • Necessity and burden of private enforcement. The court finds “clear need” for private enforcement: PACREP intentionally hid its plans for the second tower (2139), even from its own consultants and the City. Local 5 incurred substantial costs litigating over a decade to vindicate HEPA’s requirements.
  • Number of beneficiaries. The decision benefits a broad constituency—residents, environmental stakeholders, agencies, and developers—by clarifying segmentation rules, remedial flexibility, and the continuing availability of judicial relief in completed projects.

3) Equitable Allocation: Fees Against PACREP, Not the City

Because PAG fee awards are equitable, the court allocates them based on fault and fairness. The record shows the improper segmentation flowed from PACREP’s intentional concealment. The City, as accepting authority, was among those misled. On these facts, the equitable balance favors fee-shifting solely to the private developer, not the public entity. This tailored allocation is consistent with PAG’s function: encouraging public-interest litigation without unduly penalizing a government agency that was not the bad actor.

4) Reasonableness and Components of the Award

  • Lodestar method. Local 5 submitted detailed time records and cost appendices. PACREP did not challenge the amounts. The court reviewed the submission and found the fees reasonable.
  • Fees for fee work (“fees on fees”). The award includes $5,692.50 for time spent preparing the fee motion—recognizing the common practice of compensating reasonable time spent to secure fee awards in public-interest litigation.
  • Tax and costs. The court includes Hawaiʻi general excise tax ($5,016.73) as part of the fee recovery and awards taxable appellate costs ($1,237.22) under HRAP Rule 39.

Impact

  • Clarified path to fees in environmental appeals. Litigants who secure significant appellate rulings on HEPA—even when ultimate remedies are remanded—can qualify as “prevailing parties” for PAG purposes. This encourages robust private enforcement of environmental laws.
  • Targeted fee exposure for private developers. Where a developer’s conduct drives the violation (e.g., concealment leading to improper segmentation), courts may equitably impose PAG fees against the developer alone, even when a government agency participated in the litigation. This incentivizes developers to ensure full, accurate, and consolidated environmental disclosures at the outset.
  • Statutory fee-shifting under HRS § 607‑25(e)(1) tightened. Parties seeking fees under § 607‑25 must:
    • Proceed against a private party (not a government entity), and
    • Wait until a court determines that “all permits or approvals required by law” were not obtained. Filing a fee request before that determination risks a denial as premature.
  • Remedial flexibility re-affirmed. The merits opinion’s emphasis on equitable remedies for completed projects (without mandating demolition or permit invalidation) will inform trial courts handling HEPA violations discovered late. It also signals that post-completion relief remains meaningful and that injunctive-relief timing is a factor, not a bar.
  • Doctrinal consolidation on segmentation. The statewide adoption of the double independent utility test (in the merits opinion) now governs segmentation analysis under HEPA. Project proponents tying multiple segments together—via shared infrastructure, amenities, or operational integration—must consider combined environmental review.
  • Practical fee-application guidance. Successful public-interest appellants should:
    • Document work contemporaneously to support a lodestar submission;
    • Include reasonable time spent preparing fee motions;
    • Itemize taxable costs under HRAP Rule 39; and
    • Account for GET as part of the fee request when appropriate.

Complex Concepts Simplified

  • HEPA (Hawaiʻi Environmental Policy Act), HRS ch. 343: Hawaiʻi’s environmental review framework, requiring agencies and project proponents to evaluate environmental impacts through environmental assessments (EAs) and, when significant effects are likely, environmental impact statements (EISs). An FEA may culminate in a “finding of no significant impact” (FONSI), ending the process without an EIS.
  • Segmentation of environmental review: Breaking a larger, unified project into smaller pieces for separate review to minimize or mask cumulative impacts. It can be improper when segments are functionally or operationally integrated.
  • Double independent utility test: A standard assessing whether two project components each have substantial independent utility apart from the other. If they do not, treating them as separate for environmental review is likely improper segmentation.
  • Rule of reason (for EA sufficiency): A pragmatic standard asking whether the environmental review, as a whole, reasonably discloses and analyzes the likely environmental effects of the action. On remand, the circuit court must decide whether the two FEAs, considered together as one project, satisfy this standard.
  • Private Attorney General (PAG) doctrine: An equitable exception to the “American Rule” (each party pays its own fees). Courts may award fees to a party whose litigation vindicates important public policies, where private enforcement was necessary and benefits extend to many people.
  • Prevailing party (for PAG): A party that succeeds on the main disputed issues—even if it does not obtain all requested relief—is deemed prevailing for fee purposes.
  • Public interest exception to mootness: Courts may decide otherwise moot cases if the issues are of public importance, are likely to recur, and may evade review.
  • HRS § 607‑25(e)(1): A fee-shifting statute for private suits seeking injunctive relief against a private developer that proceeded without “all permits or approvals required by law.” It does not apply to government defendants and requires a determination that approvals were missing.
  • Lodestar method: Calculating reasonable fees by multiplying hours reasonably expended by a reasonable hourly rate, subject to adjustments. Supporting documentation (time entries, descriptions) is key.
  • General excise tax (GET) and HRAP Rule 39 costs: GET may be added to fee awards where appropriate, and Rule 39 governs taxable appellate costs (e.g., filing fees, transcripts, copies) recoverable by the prevailing party.

Conclusion

The Supreme Court of Hawaiʻi’s fee decision in Unite Here! Local 5 v. PACREP LLC sharpens the contours of fee-shifting in environmental litigation. It confirms that public-interest litigants who prevail on the core appellate issues—here, defeating mootness and establishing improper segmentation—qualify for PAG fees even when the remedy is remanded. It further cabins HRS § 607‑25(e)(1) to its private-party focus and insists upon a final determination of missing approvals before fee-shifting can occur under that statute. Equitably, the decision assigns fee responsibility to the developer whose concealment precipitated the HEPA violation, declining to tax fees against a public agency misled by that conduct.

Substantively, the case builds upon the merits opinion’s landmark adoption of the double independent utility test, its reaffirmation of the public interest exception to mootness, and its guidance on equitable remedies post-completion. Procedurally, it offers a roadmap for assembling successful appellate fee applications—embracing lodestar submissions, reasonable “fees on fees,” GET, and Rule 39 costs.

The upshot is a coherent, fair framework that both strengthens private enforcement of Hawaiʻi’s environmental laws and channels fee liability to the parties whose conduct necessitates litigation. That balance will influence not only future HEPA cases but also broader public-interest litigation in Hawaiʻi where the PAG doctrine and targeted fee allocation play central roles.

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