Who Is In Charge At The County Of Maui? SCOTUS OA Hinges On Internal Dispute Over Who Can Settle

by Robert Thomas, InverseCondemnation, October 12, 2019

We've been following the ongoing efforts to settle the Clean Water Act case involving the County of Maui with some amusement. 

Why, you ask? Part of it is that we like municipal law. (Perhaps sad, but true.) But we're amused mostly because the case's current posture illustrates the dual principles of "be careful what you ask for," and the legal corollary of one of Murphy's Rule of Combat ("No plan ever survives first contact"): that you may be able to start a lawsuit on your own terms, but you may not always be able to end it the same way. 

The plan here seemed pretty good. Sue the County for violating the CWA for its injection wells, asserting it should have obtained a CWA permit. Yes, the line between a "point source" and a "nonpoint source" was not settled law, but the case seemed like a very good bet. The plaintiffs would very likely find a receptive audience in both the U.S. District Court for the District of Hawaii and in the U.S. Court of Appeals for the Ninth Circuit. And when the lawsuit was instituted in 2012, the Supreme Court was not overly likely to take up the issue. Thus, the risk of making bad nationwide law (from the plaintiffs' standpoint) was low.  

At first, everything went according to plan. The plaintiffs sued the County of Maui, a Hawaii municipal corporation. The Hawaii federal court granted the plaintiff summary judgment. The Ninth Circuit, as expected, affirmed. But between the judgment in the district court, and the Ninth Circuit's ruling in 2018, the composition of the Supreme Court changed. You know why. Thus, when the County petitioned the Court late last year to hear the case, the Court agreed. Which didn't bode well for the until-now successful plaintiffs. The fortunes of war looked to be changing. 

With the looming prospect of the new Court possibly creating unfavorable nationwide precedent, the plaintiffs began a desperate effort to settle the case. That's when the current troubles arose. The defendant/Petitioner is the County of Maui, a municipal corporation organized under Hawaii law. But who, exactly, gets to decide whether the County of Maui can settle? 

The County Council thought "the County" means the Council, and thus the Council has the authority to settle the case. After a day-long hearing, the council (by a one member margin) approved of settling with the plaintiffs. The settlement was pretty much a roll-over by the County in which the plaintiffs get what they want. Not only that, but the Supreme Court thwarted! Game over, man, game over!.

Not so fast, wrote the Mayor, "the County" includes me, and I have to approve of any settlement; because I think the legal issue needs to be clarified, I won't approve. Game on! 

Meanwhile, back at 1 First Street, N.E., an impressive number of amici weighed in, (including some heavy appellate hitters and the federal government, which was granted face time) and the Supreme Court scheduled oral arguments for November 6, 2019. 

The plaintiffs wrote the Supreme Court, giving the Justices a heads-up that there was a brewing dispute over just who was the Petitioner, and that the case may or may not have been settled. The private counsel for the Petitioner County responded, asserting "I am Counsel of Record for the County of Maui," and "[t]his case has not settled," because "the Mayor must agree to settle the case and withdraw the County's petition. At this time, the Mayor has not agreed to do so."

Not content to sit on the sidelines, the Chair of the Maui County Counsel on her own wrote to the Court, "to confirm that on September 20, 2019, the Maui County Council settled the case by adopting Resolution 19-158 authorizing settlement and the withdrawal of the case from the U.S. Supreme Court." The letter described the dispute within the halls of the County building of whether the Council possesses the authority to settle the case on its own, or whether it needs to run it past the Mayor. The letter asked the Court to either dismiss the petition, "or, at the very least, postpone the hearing until Maui County can resolve our Charter crisis by determination of the Council's authority in court within the State of Hawaii or otherwise."

One more letter followed. The County's outside appellate counsel responded that the Council Chair isn't the lawyer for the County of Maui, "I am Counsel of Record for the County of Maui in this case," and that the County's corporation counsel "has asked me to submit the attached letter in response to [the Chair's] letter[.]" The "attached letter" refers to a letter which the Corporation Counsel sent to the Court the same day of the Council Chair's letter, offering "my sincerest apologies for the [Chair's letter]. The Corporation Counsel asserted she is the chief legal officer for the County, and as the lawyer for the County, she asserts "the County of Maui is not requesting a delay or dismissal in this matter," and that "[a]ny alleged conflict involving the County Charter is a matter than may be addressed independently." (emphasis original).  

So who is right? Who speaks for "the County?" Is it the Council alone which has authority to settle lawsuits for the County, or is the Mayor also a part of the process?  

We have been down this path before under Hawaii's law governing municipal governments. Although that case was in a much different context, it presented the same issue: who speaks for "the County?" County of Kauai ex rel. Nakazawa v. Baptiste, 115 Haw. 15, 165 P.3d 916 (2005), was a case about the definition of "the counties" as used in the Hawaii Constitution's article which delegates the counties the power to levy and collect property taxes. The Hawaii Supreme Court held that the term "the counties" did not include the people of a county exercising their home rule powers to adopt Charter amendments via direct democracy. The long and the short of the case is that 3 of 5 Justices concluded that the term "county" means "county council" (the 2 dissenters objected on procedural grounds, and would have never reached the substantive question). 

Baptiste, however, does not solve the present question of who gets to decide for Maui whether to settle, because Baptiste is about the allocation of power within the counties when it comes to property taxes, and how the term "county" is defined by the state constitution. The present case is more about how the Maui County Charter internally allocates the County's home rule authority to make litigation decisions. But still, Baptiste is at least a touchpoint in analysis under Hawaii municipal law.   

And that takes us to our final document of this post, an opinion letter issued in September by the Corporation Counsel. The memo concludes that it is a mixed question under the Maui Charter, and depending on the circumstances, the council has exclusive authority to settle certain cases, the mayor has exclusive authority to settle others, and both the Mayor and the Council must agree in other cases:

DOES THE COUNCIL HAVE THE AUTHORITY TO SETTLE A LAWSUIT ON BEHALF OF THE COUNTY:

A) YES, when the consideration for settlement involves the commitment of county funds in excess of $7,500, or an exercise of municipal authority exclusively vested in the council by the charter.

B) NO, when the consideration for settlement does not exceed $7,500, or where settlement involves the exercise of municipal authority exclusively vested in the executive branch by charter. 

C) NO, when the consideration for settlement requires both an exercise of municipal authority vested exclusively by charter in the council and the executive branch, UNLESS the council and the executive branch concur.

Memo. at 7 (emphases original). The memo relied on a Hawaii Supreme Court case resolving a similar dispute between Honolulu's mayor and the city council, which recognized the principle of separation of powers within Hawaii municipal governments, which mandates that each coordinate branch of county government be limited to its charter-specified power.      

Any guess which circumstance is presented by the council-only-approved settlement here? Apparently, the Mayor and Corporation Counsel believe that it is the last one, "C" (where both branches are required), because the settlement would allocate way more than $7,500 in County money (so the council has a role in getting the money), and the executive branch of the County government -- the Mayor -- also must execute other parts of the settlement by directing County employees to accomplish certain actions. If that is indeed what the final terms of the settlement requires, and how the Maui Charter divides up the County's power, then the Mayor and Corporation Counsel may have a good point. 

But for Supreme Court watchers and environmental law mavens, the real question posed by all of this wrangling is whether the scheduled oral arguments on November 6 will go on, or be postponed while the County sorts out who can do what, and who represents it under Hawaii law (we're guessing there's at least one lawyer in Hawaii who is working this weekend on a state-court declaratory judgment complaint). On that, we defer to the uberlawyers who regularly practice in the Supreme Court, and their guesses about what the Justices might do. 

We'll be following closely. We had planned on taking a field trip to the Court in November with our class, just like we did for the Knick arguments. But until the Court gives us an indication whether the OA is a go or no-go, like you, we remain in limbo. 

PDF: Memorandum, Council's Authority to Settle a County Lawsuit (Sep. 16, 2019)