The United States hereby submits this Memorandum of Points · civil no. 02-cv-139 som/ksc federal...

l

EDWARD H. KUBO, JR. (2499) United States Attorney District of Hawaii HARRY YEE (3790) Assistant U.S. Attorney Room 6-100 y PJKK Federal Building 300 Ala Moana Boulevard Honolulu, Hawaii 96850-6100 Telephone: (808) 541-2850 Fa c simi Ie: ( 808 ) 541-37 52 Email: [email protected]

STEVEN MISKINIS Indian Resources Section Environment and Natural

Resources Division P.o. Box 44378 Washington, D.C. 20026-4378 Telephone: (202) 305-0262 Facsimile: (202) 305-0271 Email: [email protected] Counsel for Defendant United States

IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF HAWAII

EARL F. ARAKAKI, et al.,

Plaintiffs, vs.

) ) ) ) )

LINDA C. LINGLE in her ) official capacity as GOVERNOR ) OF THE STATE OF HAWAII, et ale l

Defendants. ) ) ) ) ) ) ) ) ) ) ) ) )

------------------------------)

CIVIL NO. 02-CV-139 SOM/KSC

FEDERAL DEFENDANT'S MEMORANDUM OF POINTS AND AUTHORITIES IN REPLY TO PLAINTIFFS' OPPOSITION TO FEDERAL DEFENDANT'S RENEWED MOTION TO.DISMISS FOR LACK OF STANDING; CERTIFICATE OF COMPLIANCE; CERTIFICATE OF SERVICE

Date: Time: Judge:

November 17, 2003 9:00 a.m. The Honorable Susan Oki Mollway

University of Hawaii School of Law Library - Jon Van Dyke Archives Collection

FEDERAL DEFENDANT'S MEMORANDm-f OF POINTS AND AUTHORITIES IN REPLY TO PLAINTIFFS'

OPPOSITION TO FEDERAL DEFENDANT'S RENEWED MOTION TO DISMISS FOR LACK OF STANDING

The United States hereby submits this Memorandum of Points

and Authorities in Reply to Plaintiffs' Opposition to Federal

Defendant's Renewed Motion to Dismiss for Lack of Standing,

October 28, 2003 ("Plaintiffs' Brief") .

. ARGUMENT

I. Plaintiffs lack standing to bring a cla~ against the United States because they cannot show their alleged injury was caused by the United States

In their Oppo.sition, Plaintiffs do not contest the simple

fact that neither federal statute at issue here, the Hawaiian

Homes Commission Act ("HHCA"), 67 Pub. L. No. 34, ch. 42, 42

Stat. 108 (1921), nor An Act to Provide for the Admission of the

State of Hawaii into the Union ("Admission Act"), Pub. L. 86-3,

73 Stat. 4 (1959), requires the State of Hawaii to tax

Plaintiffs. Nevertheless, Plaintiffs attempt to allege causation

by erroneously asserting: (1) causation is an issue of fact; and

(2) federally mandated State programs allegedly harm them as

state taxpayers. As discussed below, neither of these

propositions has merit, and therefore Plaintiffs lack standing to

sue the United States because the United States has caused

Plaintiffs no injury_


A. Causation is an element of the standing inquiry which presents a legal question

Plaintiffs assert that causation is an issue of fact, and

direct the Court to sample jury instructions regarding causation.

Plaintiffs' Brief at 4. Here, however, causation is 6ne of three

elements a plaintiff must establish in order to demonstrate

standing as a matter of law. See LSO. Ltc. v. Stroh, 205 F.3d

1146, 1153 (9th Cir. 2000) (standing requires a showing by

plaintiff of "a causal connection between the injury and the

conduct complained of"). Whether Plaintiffs have standing to

bring a claim presents a question of law, not fact. See Carroll

v. Nakatani, 342 F.3d 934, 940 (9th Cir. 2003) ("Standing is a

question of law .... "). The standing inquiry is a "threshold

matter" by which a court must assure itsel'f of jurisdiction over'

a claim and thus is not a matter that is left for a jury to

determine. See Steel Co. v. Citizens for a Better Environment,

523 u.s. 83, 88-89 (1998). Thus,· whether Plaintiffs sufficientl~

have pled that the United States caused the irijury which

Plaintiffs allege is a question of law which this Court must

decide before addressing the merits of this case.

B. Plaintiffs fail to allege how the United States caused their state taxpayer injury

Even under the generous standard accorded the non-moving

party in a motion to dismiss, Plaintiffs fail to allege with

sufficient specificity that the United States caused their state


taxpayer injury.l In neither their brief nor their Complaint do

Plaintiffs ever allege that any provision of the HHCA or the

Admission Act requires the State taxes challenged by Plaintiffs.

Rather, Plaintiffs allege that their taxpayer injuries

"result from programs created by and imposed on the State·of

Hawaii by the Federal Defendant and still mandated by federal

law." Plaintiffs' Brief at 10. However, neither the public trust

created under the Admission Act to benefit, among others, Native

Hawaiians, nor the. programs mandated by the HHCA require the

State of Hawaii to support them with state tax revenues. The

Admission Act only requires that proceeds from public lands

granted to Hawaii upon its admission as a State be used for the

purposes of the trust created by the Act. See Admission Act, §

5(f), 73 Stat. at 6. The Admission Act also requires that the

State adopt the HHCA and use proceeds from lands reserved under

that statute to. support HHCA mandated programs. See.i..9..s.. at § 4.

That the State uses tax revenues to support these programs cannot

be considered something required by the federal statutes or

caused by the United States.

In their effort to allege causation where the United States

has not injured them, Plaintiffs allege that even non-tax funds

lIn a motion to dismiss, a court "accept[s] all factual allegations of the complaint as true and draw[s] all reasonable inferences in favor of the nonmoving party." Bernhardt v. County of Los Angeles, 279 F.3d 862, 867 (9th Cir. 2002) (internal quotations omitted).

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used to support federally mandated programs .injure -them as state

taxpayers. Plaintiffs' Brief at 9-10. Whether that is so is a

question of law, not of fact, ·and the Court is not required to

accept the contention as true for purposes of a motion to

dismiss. See Morgan v. Church's Fried Chicken, 829 F.2d 10, 12

(6th Cir. 1987) (court ~need not accept as true legal conclusions

or unwarranted factual inferences" on motion to dismiss).

Indeed, this Court already has rejected the overbroad and

legally unsupported ,view of state taxpayer standing that

Plaintiffs, in their opposition brief at 7-9, urge on this Court

once again.2 These already rejected legal arguments are before

the Court yet again. See Plaintiffs' Motion to Vacate .

restrictions on Plaintiffs' Standing as State Taxpayers or, in

the alternative, 'to certify the 'Standing Order' as Final

pursuant to F.R.C.P. Rule 54(b), October 14,2003. The United

States demonstrated the failure of Plaintiffs' arguments in its

Opposition Brief. See Federal Defendant's Memorandum of Points

and Authorities in Opposition to Plaintiffs' Motion to Vacate .

Restrictions on Plaintiffs' Standing as State Taxpayers, October

28, 2003 (U.S. Opposition).

2See Order, May 8, 2002 at 17 (limitl.ng Plaintiffs' taxpayer standing to a challenge of ~direct expenditures of tax money by the legislature"); Order Denying Plaintiffs' Motion for Reconsideration of the Order Dismissing the United States, September 18, 2002 (Docket No. 209) (rejecting Plaintiffs' standing arguments again). -

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"


As shown in the u.s." Opposition, this Court properly

rejected Plaintiffs' theory of state taxpayer standing. Ninth

Circuit case law uniformly requires that st~te taxpayer injury be

derived from the expenditure of state tax money. u.s." Opposition

at 9-10; Cantrell v. City of Long Beach, 241 F.3d 674, 683 {9th

Cir. 2001) ("To establish standing in a state or"municipal

taxpayer suit under Article III, a plaintiff must allege a direct

injury caused by expenditure of tax dollars . ~"). In

arguing to the contrary, Plaintiffs resort to taking general

statements from taxpayer cases out of context, offering a theory

of state taxpayer standing that eviscerates the, well~~stablished

rule that a plaintiff show a direct injury. See Stroh, 2"05 F.3d

at 1152-53; u.s. Opposition at 10-17 (addressing cases cited in

Plaintiffs' Brief at 7-9).

In sum, Plaintiffs fail to demonstrate that the federal

defendant is the cause of their state taxpayer injuries "because

they nowhere allege that the federal defendant has caused them to

be taxed. Instead, they allege that federally-mandated State

programs use funds that could be appropriated to the State's

General Fund to reduce state taxes. Plaintiffs then argue that

such an allegation is legally sufficient to show that the federal

defendant is the cause of their state taxpayer injury, even if

the federal defendant has not caused Plaintiffs to be taxed.

That is a legal argument -- not a fa~tual allegation -- one to


which this Court owes no deference, even on a motion to dismiss,

and, indeed, one that this Court has already held to be legally

meritless.

II. The United States is not needed to redress Plaintiffs' alleged injuries

Plaintiffs argue that the United St~tes is needed to red~~ss

their injury, Plaintiffs' Brief at 10-11, yet they fail to show

such a necessity. Instead, Plaintiffs opine that the United

States is needed if the Court is to ~enjoin St~te officials from

carrying out the HHCA or·the OHA laws." Plaintiffs' Brief at 10.

However, this Court has already held Plaintiffs are not entitled

to such relief. See Orde+, May 8, 2002 at 17 (Plaintiffs'

standing limited to challenge of expenditure of tax money by

legislature); Order, September 3, 2002 (clarifying that May 8,

2002 Order ~did not find that Plaintiffs may seek invalidation of

the Hawaiian Homes and OHA laws in toto").

By ignoring this matter, Plaintiffs in effect concede that

within the current scope of their standing, as limited by this

Court, they are entitled to no relief that requires participation

of the United States in this suit. Should they prevail,

Plaintiffs will only be entitled to an injunctipn ~gain~t the

appropriation of State tax revenues to support the programs they

find objectionable. The United States has not mandated any State

tax appropriations in the challenged federal statutes and thus

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the United States is not needed to 'provide Plairitiffs with arty

redress to which they may be entitled. 3 .

III. Federal taxpayer standing is needed to sue the United States on the basis of a taxpayer injury

Plaintiffs' state taxpayer standing does not entitle them to

bring a claim against the federal government, even if it could be

shown that federal actions impact state tax revenues. Federal,

state and municipal taxpayer standing requirements differ

depending on the taxpayer's relationship with the government unit

whose action is challenged. See Frothingham v. Mellon, 2'62 U. S.

447, 487 (1923) (noting that the reason municipal taxpayer

standing requirements differ from the more stringent federal

taxpayer standing requirements derives from ~the peculiar

relation of the corporate taxpayer to the [municipal]

corporation" which does not pertain to federal taxpayers). 'For

this reason, the Second Circuit held that plaintiffs showing

municipal taxpayer standing are only entitled to sue

municipalities. See,Bd. of Educ. v. New York State Teachers

Retirement Sys., 60 F.3d 106, 111 (2d cir. 1995) (noting that

~one of the central prefuis~s of municipal t~xpayer standing is

3Pl a intiffs detail the magnitude of lost revenues as a result"of DHHL. Plaintiffs' Brief at 15-17. This recitation is beside the point. The use of funds not derived from tax revenues does not injure Plaintiffs as state taxpayers and is not subject to challenge in this taxpayer suit. See Order, May 8, 2002 at 17-20.

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that the taxpayer's suit be brought' against" a municipality")

(emphasis in original).

Plaintiffs do not contest the reasoning of State Teachers;

rather, they inexplicably assert that the taxpayer suit in that

case was dismissed for lack of standing because it amounted to no

more than a generalized grievance -- even though the phrase

'generalized grievance' does not appear in the decision.

Plaintiffs' Brief at 12. Plaintiffs then suggest the court's

holding is actually dicta. Plaintiffs' Brief at 13. Plaintiffs

are simply wrong.

In State Teachers, the Second Circuit faced the question

whether plaintiff municipal taxpayers had standing to sue the

State, where State action was alleged to have caused the injury.

See State Teachers, 60 F.3d at 111. Plaintiffs there relied on

Gwinn Area Corom. Schs. v. Michigan, 741 F.2d 840 (6th Cir. 1984),

a case allowing municipal taxpayers to sue the State on the basis

of municipal taxpayer injury. While in Gwinn the court was

satisfied plaintiffs had standing after noting that stating an

injury as a muncipal taxpayer was different from stating an

injury as a federal taxpayer, ~ ide at 844 -- the Second

Circuit in State Teachers demonstrated the insufficiency of this

analysis which only considered whether plaintiff was injured.

The Second Circtiit showed the need to consid~i further the

relationship between the plaintiff and the gove~nment unit

8


causing the· injury, noting that when municipal taxpayers bring

suit against another government unit, they cease to "rely on a

'peculiar relation' with the municipality." State Teachers, 60

F.3d at 111 (quoting Frothingham, 262 u.s. at· 486-87). In

effect, municipal taxpayers can challenge a municipali ty'·s

illegal use of their tax revenues because of their close relation

to the municipality. But their relation to the municipality·

provides no basis to challenge the acts of other government units

(state or federal) which may impact the municipality and its

disposition of municipal tax revenues. Municipal taxpayers do

not share the same close relationship with those government

entities, and their injury does not derive from direct use of"

their taxes by those entities.

As argued in the opening federal brief, State Teachers'

reasoning applies equally here where state taxpayers alleging

state taxpayer injury seek to bring suit against a third party

(the federal government) whose actions Plaintiffs allege have

impacted state tax revenues. State taxpayers only have standing

to sue the government entity levying a particular tax for ·any

alleged misuse of that tax money. State taxpayer standing does

not allow a party to sue the federal government or,·for ·that

matter, any other third party whose actions may impact the

State's tax revenues.

9


,IV. Plaintiffs fail to show a waiver the United States' Sovereign Immunity

To maintain a suit against the United States, a plaintiff

must "point to an unequivocal waiver of sovereign immunity."

Blue v. Widnall, 162 F.3d 541, 544 (9th Cir. 1998). Unable to

establish a clear waiver of sovereign immunity, Plaintiffs

suggest that the Court might either consider this an "officer

suit," or find that it arises under the Administrative Procedures

Act ("APA") broadly construed" or finally, ,all, else failing, the

Court should simply "stop" the United States' sovereign immunity

from precluding this suit against the federal government.

Plaintiffs' Brief at 17-24.

This action is not an "officer suit" because Plaintiffs do

not identify a federal officer as defendant. Plaintiffs' Brief

at 17-20. In an "officer suit," a plaintiff brings an action

against an officer of the federal government, rather than the

government itself. See Larson v. Foreign & Domestic Commerce

Corp., 337 u.S. 682, 686-87 (1949). Such suits are allowed where

"(1) the government officer's powers are limited by statute and

his actions are ultra vires, or (2) the officer acts

unconstitutionally or pursuant to an unconstitutional grant of

power from the sovereign." Alaska v. Babbitt, 38 F.3d 1068, 1076

(9th Cir. 1994). The Supreme Court noted that where an officer

is named, a court must go·further and determine whether the suit,

"although nominally directed against the individual officer

10


. is, in substance, a suit against the Government." Larson, 337

u.s. at 688. If the suit is against the government, it may not

go forward as an officer suit. See ide

In this case, Plaintiffs' suit can only be against the

government~ since Plaintiffs have failed to name any officer in

their Complaint, and in their brief they reiterate that the

alleged wrongdoer here is "Congress and the United States.""

Plaintiffs' Brief at 18. Accordingly, this suit is not an

"officer suit," and Plaintiffs must find their waiver of

sovereign immunity elsewhere. 4

For the same reason, Plaintiffs cannot resort to the waiver

of sovereign immunity under the APA, 5 U.S.C. § 702. That

provision allows courts to review an "agency action" that injures

a plaintiff. Id. A plaintiff seeking to bring a claim under the

APA "must . identify a final agency action." ONRC Action v.

Bureau of Land Mgrnt., 150 F.3d 1132, 1135 (9th Cir. 1998).

Plaintiffs have neither identified an "agency" nor an "action."

The United States is not an "agency" of itself within the terms

4Even if, somehow, the United States could be construed as a "government officer" -- a nonsensi.cal proposition -- Plaintiffs still would need to demonstrate that their suit against the United States "is not "in substance, a suit against"the Government," and does not "require affirmative action by the sovereign or disposition of unquestionably sovereign property." Larson, 337 U.S. at 688, 691 n. 11. See also Dugan v. Rank, 372 U.S. 609, 620 (1963) (suit is against governm~nt where relief" will "interfere with the public administration" or "restrain" the government") (internal quotations omitted). .

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of the statute. See 5 U.S.C. § 701(b) (1) (defining agency as.

"each authority of the Government of the United States").

Neither is Congress. See 5 U.S·.C. § 701(b) (1) (A) ("agency" does

not include "Congress"); National Council for Indus. Defense,

Inc. v. United States, 827 F. Supp. 794, 798-99 ("the APA .

does not provide a remedy for congressional or presidential

action") (citations omitted).

Further, other than Congress' passage of the federal

statutes Plaintiffs challenge, they do not identify any federal

agency action reviewable under the limited waiver of sovereign

immunity under the APA. Plaintiffs note broadly that from 1921-

1959, the federal government administered the HHCA. Plaintiffs'

Brief at 21. However, any claim concerning federal actions in

that period, even if "final agency action," has been long barred

by the six year statute of limitations on claims raised against

the United States. See 28 U.S.C.· § 2401(a); Shiny Rock Mining

Corp. v. United States, 906 F.2d 1362, 1364 (9th Cir. 1990) (28

U.S.C. § 2401(a) applies to actions brought under the APA).

Because Plaintiffs can neither identify an agency nor an action,

they cannot bring their claim under the APA.

Finally, Plaintiffs' arguments that the doctrine· of

sovereign immunity should either be relaxed ·or rejected is

without merit because this Court has no subject matter

jurisdiction over a claim against the United States in the

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absence of a waiver of'sovereign immunity. See United States v.

Mitchell, 463 U.S. 206, 212 (1983).

CONCLUSION

For the foregoing reasons, the federal defendant

respectfully requests that this Court grant its Renewed Motion to

Dismiss for Lack of Standing.

Dated this 3d day of November, 2003, at Honolulu, Hawaii.

EDWARD H. KUBO, JR. United States Attorney District of Hawaii HARRY YEE Assistant U.S. Attorney

~~~~~'Sk~ States Department of Justice

Attorneys for the United States

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IN THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF HAWAII

EARL F. ARAKAKI, et al., ) ) )

) )

CIVIL NO. 02-CV-139 SOM/KSC

Plaintiffs, vs.

Federal Defendant's Certificate of Compliance

LINDA C. LINGLE in her ) official capacity as GOVERNOR ) OF THE STATE OF HAWAII, et ale ~

Defendants. ) --------------------------------)

CERTIFICATE OF COMPLIANCE

The undersigned hereby certifies that pursuant to the Order

of this Court, September 8, 2003, the foregoing attached

memorandum contains under 3000 words.

Dated: November 3, 2003, at Honolulu, Hawaii.

EDWARD H. KUBO, JR. United States Attorney District of Hawaii HARRY YEE Assistant U.S. Attorney

~~ Indian Resources Section Environment and Natural Resources

Division United States Department of Justice

Attorneys for the United States


Certificate of Service

I hereby certify that on November 3, 2003, I caused a true

and correct copy of the Federal Defenqant's Memorandum of Points

and Authorities in Reply to Plaintiffs' Opposition to Federal

Defendant's Renewed Motion to Dismiss for Lack of Standing to be

sent to the following service list by u.S. mail, postage prepaid,

and by the manner in which each recipient requested.

Service List:

via email

H. William Burgess 2299-C Round Top Drive Honolulu, HI 96822 Email: [email protected] (hard copy by mail requested)

-David Rosen Pacific Tower, 1001 Bishop St. Ste 3050 Honolulu, HI 96813 [email protected]

Emmett E. Lee Loy 758 Kapahulu Ave. Ste 429 Honolulu, HI 96816 Email: [email protected]

Walter R. Schoettle P.o. Box 596 Honolulu, HI 96809 Email: [email protected]

Charleen M. Aina Girard D. Lau Office of the Attorney General-Hawaii 425 Queen St. Honolulu, HI 96813 Email: [email protected] Service by mail required as well

Jon M. Van Dyke Corporation Counsel 2515 Dole Street


Room 239 Honolulu, HI 96822 Phone: (808) 956-8509 Fax: (808) 956-5569 Email: [email protected]

Sherry P. Broder Davies Pacific Center 841 Bishop St. Ste 800 Honolulu, HI 96813 Email: [email protected]

Melody K. MacKenzie 579 Kaneapu Place Kailua, HI 96734 Email: [email protected]

Philip W. Miyoshi Robert G. Klein Becky T. Chestnut McCorriston Miller Mukai MacKinnon LLP Five Waterfront Plaza Ste 400 500 Ala Moana Blvd Honolulu, HI 96813

.Email: [email protected]

via fax Yuklin Aluli Amber R. Williams Law Offices of Yuklin Aluli 415 C. Uluniu St. Kailua, HI 96734 Fax: (808) 262-5610

DATED: November 3, 2003, .at,H~nolulu, Hawaii.

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