Zip. Zilch. Zero. Nil. Nada. Squat. Bupkis.

Here’s the latest in a case we’ve been following for a long, long time (see here and here, for example).

In Maunalua Bay Beach Ohana 28 v. State of Hawaii, No. CAAP-19-0000776 (Mar. 18, 2024), the Hawaii Intermediate Court of Appeals confirmed that a state statute declaring certain accreted littoral land to be public property was a temporary regulatory taking of littoral owners’ rights (the common law says that accreted littoral lands belong to the private owner), but that the just compensation the State owes to these owners is a big fat zero.

This case goes back to a statute the Hawaii Legislature adopted in 2003, which made certain land accreted on littoral private property public land. As the court put it, “[i]t effectively made land accreted to the Beach Lots after May 20, 2003, public land not owned by [the adjacent littoral owners].” Slip op. at 3.

Sounds like a taking, and sure enough a lawsuit followed, claiming that the ipse dixiting of accreted land was a taking because it represented a change in the common law under which the adjacent owners would own the accreted land. Nine years later, the legislature “changed the law by terminating the taking effectuated by [the statute].” Slip op. at 9.

The trial court dismissed the takings claim, but the Court of Appeals held that the statute worked an uncompensated taking of the land accreted before the effective date of the statute. (The court rejected a claim that the statute also confiscated future accreted land, but that is another story.) The appeals court sent the case back for a a ruling on whether these plaintiffs own land that qualified, and if so, the valuation of the accreted land.

After a bench trial, the trial court concluded that there was a temporary (nine year) taking, not a permanent one. The parties stipulated that just compensation was to be measured by the “fair rental value of the accreted land” as of the effective date of the statute, subject to the governmental and private restrictions that burdened the land. Slip op. at 5. The trial court concluded that just compensation is $0. 

The court of appeals affirmed, and made short work of the owners’ argument. It based its conclusion entirely on the appellate standard of review:

Beach Lot Owners’ evidence of fair rental value was based on the testimony of Stephany Sofos. The circuit court “did not find Ms. Sofos to be a credible witness” and gave “no weight to her testimony.” “It is well-settled that an appellate court will not pass upon issues dependent upon the credibility of witnesses and the weight of evidence; this is the province of the trier of fact.” Fisher v. Fisher, 111 Hawaii 41, 46, 137 P.3d 355, 360 (2006) (citation omitted).

The circuit court instead credited the testimony of Craig Leong, a licensed real estate appraiser who holds the MAI designation.

Slip op. at 11-12 (footnote omitted).

The State’s appraiser concluded there was no rental value because the size of the accretions were “irregular” and of “narrow widths,” and subject to regulations and restrictions. Slip op. at 12.

The owners couldn’t believe that beachfront property in one of the most desirable residential areas in Honolulu is utterly worthless: “Beach Lot Owners argued that ‘depriving [them] of oceanfront property in Maunalua Bay for 9 years cannot possibly be valued at $0.'” Slip op. at 10. Indeed isn’t it intuitive that ownership of even a small and irregularly-shaped portion of beach — even for a temporary period, and even if open to public access as the plaintiffs stipulated — could be worth something? Especially, as the plaintiffs claimed, as a buffer to the homes built on the adjacent residential lots (what the opinion calls the “Home Lots”).¹

Problem is, the plaintiffs making those claims “do not own any Home Lots.” Slip op. at 11. Ouch.

Having noted that the trial court made a determination that the plaintiffs’ appraiser offered incredible testimony (what that testimony was, and what value the appraiser assigned to the accreted lands we don’t know because the opinion does not tell us), and that the government’s appraiser was credible, the court of appeals held the factual conclusion of zero just compensation was not clearly erroneous because there was some evidence in the record to support it. Game, set match.

Also: no nominal damages because the plaintiffs, having scored no just compensation, “did not sustain a ‘technical injury due to a violation of some legal right[.]'” Slip op. at 13. In the court’s view, they were not injured at all.

Finally, the court rejected the argument that the plaintiffs should have been at least awarded attorneys’ fees under the private attorney general doctrine. Read pages 14-20 if you care why (we don’t, sorry).

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1. This intuition comes from the “Inversecondemnation on Valuation” treatise by the way. You won’t find a copy of this august work in your law library, sadly. In the end, the trial court found the in-court testimony of expert valuation witnesses a lot more persuasive than your author’s intuition, which, standing alone, is worth doodly-squat in a court of law (as we know). 

Maunalua Bay Beach Ohana 28 v. State of Hawaii, No. CAAP-19-0000776 (Haw. App. Mar. 18, 2024)