When the Record Is Not Enough: Hawai‘i Supreme Court Requires an EA as a Matter of Law for HEPA Exemptions Not Supported on the Face of the Agency Record

When the Record Is Not Enough: Hawai‘i Supreme Court Requires an EA as a Matter of Law for HEPA Exemptions Not Supported on the Face of the Agency Record

Introduction

In Ke Kauhulu O Mānā v. Board of Land and Natural Resources, the Hawai‘i Supreme Court clarified, sharpened, and applied key doctrines under the Hawai‘i Environmental Policy Act (HEPA), HRS chapter 343. The case arises from the Board of Land and Natural Resources’ (BLNR) decision to exempt Syngenta’s seed research operations on state-owned conservation land from preparing an environmental assessment (EA). The central dispute: whether BLNR could rely on a 1982 finding of no significant impact (FONSI) issued for sugar cane cultivation to justify a 2017 exemption for modern seed research employing restricted use pesticides (RUPs) and genetically modified organisms (GMOs), without a fresh, documented “hard look.”

The petitioners—Ke Kauhulu o Mānā (an unincorporated association) and several nonprofit organizations and an individual—challenged the exemption, arguing that HEPA required an EA and that BLNR’s record failed to analyze the current operation’s impacts. The Environmental Court upheld BLNR’s exemption. The Intermediate Court of Appeals (ICA) vacated and remanded for further proceedings, citing gaps and factual disputes in the record. On certiorari, the Supreme Court went further, holding that the agency’s failure to follow proper procedures and to consider appropriate factors is a question of law reviewed de novo and, because BLNR’s record was insufficient, an EA was required as a matter of law—not further remand to rebuild the record.

This decision recalibrates the remedial posture for defective HEPA exemptions: when the agency’s record does not show a proper “hard look” and consideration of the required factors, courts must order preparation of an EA rather than remand to allow the agency to patch the record.

Summary of the Judgment

  • Standard of review: Whether an agency has “followed proper procedures” or “considered appropriate factors” in declaring a HEPA EA exemption is a question of law reviewed de novo (reaffirming Sierra Club v. Dep’t of Transportation (Superferry I)).
  • Record sufficiency: BLNR’s 2017 exemption for Syngenta’s revocable permit relied on a 1982 FONSI for sugar cane and lacked any documented “hard look” at environmental effects from seed research operations using RUPs and GMOs. The record did not explain why the exemption applied or why impacts would be minimal or insignificant.
  • Remedy: Because BLNR failed to follow proper procedures and to consider appropriate factors, the court held an EA is required as a matter of law. The ICA erred by remanding for a do-over of the exemption decision. The case is remanded to the Environmental Court with instructions that BLNR must prepare an EA.
  • Consultation: Although not necessary to the holding, the court noted the apparent failure to consult the Department of Health (DOH)—which reviews GMO permits—when determining the exemption, implicating the HEPA rule requiring advice from agencies with jurisdiction or expertise.
  • Mootness: An eleventh-hour oral motion claiming mootness due to a subsequent permittee name change (to Hartung Brothers Hawaii, LLC) was denied. Mootness is prudential (not jurisdictional), and the “capable of repetition, yet evading review” and public-interest exceptions applied.

Factual and Procedural Background

The Land and the 1982 FONSI

The disputed parcel lies within a state-owned conservation district in Kekaha, Kaua‘i, approximately 400 feet from the ocean, encompassing around 132 acres (about half at issue). In 1981, Kekaha Sugar applied for a conservation district use permit (CDUP) to use 62 acres for sugar cane cultivation. BLNR issued a negative declaration/FONSI in 1982, describing brush clearing, soil improvements, and irrigation to raise sugar cane. Although a third party (Pride Company) mentioned seed research at a hearing, the published FONSI addressed only sugar cane.

Revocable Permits and Successor Use

In 1983, BLNR issued two revocable permits (RPs): one to Kekaha Sugar (cane seed cultivation) and one to Pride (corn seed cultivation). Through assignments and name changes, the seed research operations ultimately came under Syngenta. By 2017, DLNR staff realized the company had been using the full 61.2 acres (beyond the 43.6 acres in the original RP) and proposed issuing a new RP to Syngenta Hawaii, LLC, covering the full area.

The 2017 Exemption Decision

DLNR recommended declaring the new RP exempt from HEPA under the DLNR exemption list (Exemption Class No. 1, Item 51: “Permits, licenses, registrations, and rights-of-entry…routine in nature, involving negligible impacts beyond that previously existing”). The staff asserted the land had been in agricultural use for decades with no known significant impacts and characterized the action as a continuation without expansion or change. The exemption write-up referenced the 1982 FONSI. Although DLNR noted consultations with several agencies (e.g., DOA, ADC), the record does not reflect consultation with the DOH.

Environmental Court and ICA

Petitioners sued, arguing BLNR violated HEPA by failing to prepare an EA for the new RP. The Environmental Court accepted the exemption as an “existing use” and granted summary judgment for BLNR and Syngenta. The ICA reversed in part, finding material factual disputes and gaps in the record, and remanded for the Environmental Court to reexamine the exemption decision. Petitioners sought certiorari, arguing that an EA was required as a matter of law.

Detailed Analysis

Precedents Cited and Their Influence

  • Sierra Club v. Department of Transportation (Superferry I), 115 Hawai‘i 299, 167 P.3d 292 (2007)
    • Core holding reaffirmed: The standard of review depends on the question. Factual findings are reviewed for clear error, but whether the agency followed proper procedures or considered appropriate factors in granting a HEPA exemption is a question of law reviewed de novo.
    • Application here: The Supreme Court applied this de novo lens to BLNR’s 2017 exemption. As in Superferry I, the agency had recognized HEPA’s applicability but granted an exemption without demonstrating, on the face of the record, a “hard look” showing minimal or no significant environmental effects. Result: the exemption is erroneous as a matter of law, and an EA must be prepared.
  • Umberger v. Department of Land & Natural Resources, 140 Hawai‘i 500, 403 P.3d 277 (2017)
    • Umberger set a three-part threshold for EA requirements and articulated a four-step path to apply exemptions: fit within an exempt class; ensure no significant cumulative impacts and no significant impact on sensitive environments; obtain advice of agencies/experts with jurisdiction; and determine that effects will probably be minimal or insignificant.
    • Distinction: In Umberger, BLNR incorrectly assumed HEPA did not apply at all; the remedy was a remand for BLNR to consider exemptions in the first instance. Here, BLNR recognized HEPA but granted an exemption; thus, the Superferry I remedy governs—order an EA when the record does not show the required analysis.
  • Carmichael v. Board of Land & Natural Resources, 150 Hawai‘i 547, 506 P.3d 211 (2022)
    • Similar to Umberger: BLNR initially proceeded as though HEPA did not apply to revocable water permits; the court remanded for application of HEPA and consideration of exemptions.
    • Distinction: In Ke Kauhulu, HEPA applicability was acknowledged and an exemption declared; remand to consider whether HEPA applies is unnecessary. When the record shows procedural/factor deficiencies in the exemption, the proper remedy is to require an EA.
  • Kiaʻi Wai o Waiʻaleʻale v. Department of Water, 151 Hawai‘i 442, 517 P.3d 725 (2022)
    • Agencies bear the burden to compile the information necessary for meaningful public scrutiny; challengers may point to extra-record evidence to identify deficiencies, but agencies cannot rely on extra-record material to cure an inadequate record post hoc.
    • Impact here: The court emphasized that BLNR’s exemption must be justified on the existing record. The ICA’s remand risked turning into impermissible post hoc record-building by the agency; instead, an EA is required.
  • Kilakila ‘O Haleakala v. University of Hawai‘i, 138 Hawai‘i 364, 382 P.3d 176 (2016)
    • Clarifies the role of FONSIs under HEPA: if an agency determines no significant environmental impact, it may issue a FONSI allowing the project to proceed without an EIS—but the determination must be supportable and is subject to challenge.
    • Relevance: BLNR’s reliance on a 1982 FONSI for sugar cane cultivation did not analyze the seed research operation’s environmental effects, rendering its reliance inadequate.

Legal Reasoning

The Supreme Court’s reasoning proceeds in three principal steps.

  1. Standard of Review: The court reaffirmed that whether an agency “followed proper procedures” or “considered appropriate factors” in granting a HEPA exemption is a legal question reviewed de novo. This set the stage for the court to independently assess BLNR’s exemption decision against HEPA’s procedural and substantive requirements, rather than deferring to agency judgments or remanding for factfinding.
  2. Failure to Follow Proper Procedures: HEPA places the burden on agencies to compile an adequate record allowing the public and courts to evaluate the decision. BLNR’s exemption relied on a decades-old FONSI covering sugar cane cultivation and characterized the seed research operations as a continuation of agricultural use with no significant impacts. The record, however, lacked any analysis of the particular impacts from seed research employing RUPs and GMOs, cumulative impacts over time, or the sensitivity of the environment near coastline and potential critical habitats. This absence meant BLNR did not follow proper procedures because its record did not substantiate the exemption.
  3. Failure to Consider Appropriate Factors: To declare an exemption, an agency must do more than match an action to an exemption category on an agency list. It must determine that the action “will probably have minimal or no significant effect on the environment,” including consideration of cumulative impacts and particularly sensitive environments, and after obtaining advice from agencies or experts with jurisdiction. BLNR’s record did not analyze the environmental effects of seed research operations; its reliance on the 1982 FONSI for sugar cane failed to show the required “hard look.” The court also flagged, as further indication of procedural deficiency, the apparent failure to consult DOH regarding GMO oversight.

Having found both procedural and substantive deficiencies on the face of the record, the court held that an EA is required as a matter of law. It rejected the ICA’s remand because permitting a post hoc fix would contravene HEPA’s burden on agencies to justify exemptions within the contemporaneous record and would blur the line between permissible challenger supplementation and impermissible agency record-building after the fact.

Impact and Forward-Looking Consequences

  • Remedy Clarification: When an agency’s exemption is unsupported by its record, the court should order preparation of an EA rather than remand for the agency to rework its exemption. This elevates the importance of front-end documentation and prevents “second chance” cures.
  • Agency Burden and Record-Building: Agencies must assemble robust, contemporaneous records for exemptions, including:
    • A project-specific analysis showing minimal or no significant effects;
    • Consideration of cumulative impacts and sensitive environmental contexts;
    • Documentation of advice from agencies with jurisdiction/expertise (e.g., DOH for GMO/RUP issues where applicable).
  • Limits on Stale Reliance: Old FONSIs cannot be repurposed to justify exemptions for materially different activities. Using a sugar cane FONSI to cover modern seed research operations deploying RUPs and GMOs is insufficient without a fresh analysis.
  • “Existing Use” Exemptions Narrowed in Practice: Simply labeling a new permit as a continuation of “existing use” is not enough where the nature of the activities, technologies, or environmental footprint plausibly differs from what was previously analyzed.
  • Environmental Court Practice: The decision cautions against remands that enable post hoc agency repairs to exemption records. Environmental Courts should evaluate whether the exemption is defensible on the record; if not, the default remedy is to require an EA.
  • Sectoral Relevance: The holding will resonate in cases involving:
    • Revocable permits on state lands (HRS § 171-55) for activities with potential environmental effects;
    • Agricultural operations using RUPs and GMOs, especially near sensitive resources;
    • Conservation district lands where HEPA scrutiny is inherently heightened.

Complex Concepts Simplified

  • HEPA (HRS ch. 343): Hawai‘i’s framework for environmental review. For certain triggers—such as use of state lands—agencies must prepare an EA unless a valid exemption applies.
  • EA vs. EIS:
    • EA: A preliminary environmental disclosure document. If it shows no significant impact, the agency may issue a FONSI and proceed without an EIS.
    • EIS: A more comprehensive study required if an EA or other information shows a likely significant impact.
  • FONSI: A finding of no significant impact that allows a project to proceed without an EIS. It must be grounded in a defensible analysis tied to the actual project.
  • HEPA Exemption: Even if an action is otherwise subject to HEPA, an agency may declare it exempt if it:
    • Fits within an exempt class;
    • Does not have significant cumulative impacts or significant impacts on sensitive environments;
    • Obtains advice from agencies/experts with jurisdiction;
    • And—critically—will probably have minimal or no significant environmental effects. A categorical fit is not enough; project-specific analysis is required.
  • “Hard Look”: A term of art requiring agencies to meaningfully analyze potential environmental effects, including indirect and cumulative impacts, and to disclose and grapple with adverse effects—not merely recite conclusions.
  • Record-Building Rule:
    • Challengers can use extra-record materials to highlight deficiencies in an agency’s environmental process;
    • Agencies cannot rely on extra-record materials to patch an inadequate record after the fact (Kiaʻi Wai).
  • Mootness Exceptions:
    • “Capable of repetition, yet evading review”: Short-lived actions likely to recur can be reviewed;
    • Public interest exception: Courts may decide cases raising issues of public importance likely to recur.

Practice Notes and Takeaways

For Agencies

  • Do not assume an “existing use” exemption applies when the operational methods or potential impacts have evolved (e.g., introduction of RUPs/GMOs).
  • Demonstrate the minimal/no impact conclusion with project-specific analysis, not just categorical references or historic FONSIs for different activities.
  • Document consultation with agencies that possess relevant jurisdiction or expertise (e.g., DOH for GMO oversight, DOA for pesticides, resource agencies for sensitive habitats).
  • Compile a thorough contemporaneous record; courts will not permit post hoc supplementation to cure deficiencies.

For Practitioners and Stakeholders

  • When challenging exemptions, identify mismatches between the project and the record used to justify the exemption (e.g., reliance on stale FONSIs).
  • Point to cumulative impacts and sensitive environmental contexts; these independently bar exemptions.
  • Use extra-record information to show real-world impacts and agency omissions—but expect agencies cannot use new materials to fix their record later.
  • Remedy: Where the record shows the agency did not take a “hard look,” advocate for an order requiring an EA, not a remand to reconsider the exemption.

Conclusion

Ke Kauhulu O Mānā v. BLNR decisively confirms two core HEPA principles and refines their application. First, courts review de novo whether an agency followed proper procedures and considered the appropriate factors in declaring an exemption. Second, when the agency record itself does not demonstrate a genuine, project-specific “hard look” showing minimal or no significant environmental effects, the exemption fails as a matter of law and an EA must be prepared.

The court’s remedy-centric holding is pivotal: it curtails opportunities for agencies to retroactively justify exemptions by remand-based record rebuilding and instead prioritizes up-front, transparent analysis. For environmental governance in Hawai‘i—especially on state lands and within conservation districts—this decision strengthens HEPA’s disclosure mandate, ensures more rigorous scrutiny of potentially impactful operations (such as those involving RUPs and GMOs), and reinforces that categorical exemptions are not safe harbors absent a demonstrable, contemporaneous showing of no significant environmental effect.

Case Details

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