Posted by: Patricia Salkin | December 18, 2020

HI Supreme Court Holds Statute of Limitations for a Regulatory Taking is Six Years

This post was authored by Matthew Loescher, Esq.

The United States Court of Appeals for the Ninth Circuit certified a question of Hawai‘i law to the court pursuant to HRS § 602-5(a)(2) (Supp. 2016) and Hawai‘i Rules of Appellate Procedure (HRAP) Rule 13, asking it to resolve the question of “what is the applicable statute of limitations for a claim against the State of Hawai‘i alleging an unlawful taking of private property for public use without just compensation.” The underlying dispute arose from the State of Hawai‘i Land Use Commission and other defendants’ (collectively LUC) reclassification of 1,060 acres of land in South Kohala on Hawai‘i Island from “agricultural” to “urban”. Notwithstanding DW’s purchase and its representation that it had invested more than $28 million into the development, the LUC voted to reclassify the land as agricultural in April 2009, which was finalized in a written order on April 25, 2011.

At the outset, the court noted that the language of Hawai‘i’s Takings Clause demonstrated that it was self-executing. As such, DW’s claim pursuant to the clause was properly construed as a direct constitutional claim rather than a claim based on an implied contract with the State. Due to this, the claim was beyond the scope of HRS § 661-1 and the accompanying statute of limitations for that chapter.

The court next found that LUC’s arguments that HRS § 657-7 applies were unpersuasive. As it pertains to this case, HRS § 657-7 sets forth, “Actions for the recovery of compensation for damage or injury to persons or property shall be instituted within two years after the cause of action accrued, and not after.” Here, while DW’s claims alleged diminution in the value of their property, the true nature of the claim was not that the LUC physically injured property, but that the property was taken without just compensation. Furthermore, while states often use the adverse possession statute of limitations for inverse condemnation claims, the court held that this rule was limited to claims arising from a physical invasion of land.

 As other statutes of limitations did not apply, the court held that the catch-all statute of limitations in HRS § 657-1 provided the correct limitation period to apply to DW’s regulatory takings claim. While HRS § 657-1.5 (1991) exempts claims brought by the State from the statutes of limitation set forth in the chapter, there was no parallel exemption for claims brought against the State. Accordingly, the court found that the statute of limitations for a takings claim under the Hawai‘i Constitution is six years pursuant to HRS § 657-1(4).

DW Aina Le’a Development, LLC v State of Hawai’i Land Use Commission, 2020 WL 7394265 (HI 12/17/2020)


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