Obama Administration's Amicus Brief: Deny Cert To Case Challenging Property Tax Exemptions For Hawaiian Homestead Lessees

by Robert Thomas, InverseCondemnation.com

The federal government has filed its invitation brief in Corboy v. Louie, No. 11-336 (cert. petition filed Sep. 15, 2011), the cert petition asking the U.S. Supreme Court to review the Hawaii Supreme Court's dismissal of a challenge to the property tax exemptions conferred on lessees of Hawaiian Homesteads.

Only "native Hawaiians" are eligible to lease homestead land, and thus only those possessing the appropriate blood quantum are entitled to the tax exemptions. The petitioners are not "native Hawaiians" and thus are not lessees, and paid their property taxes under protest. When they sought refunds in the Hawaii Tax Appeals Court and argued that they should also be exempt, that court concluded that "native Hawaiian" was not a racial classification and did not review the tax exemption with strict scrutiny. Instead, the court upheld the exemption under rational basis review. The Hawaii Supreme Court vacated the Tax Court decision and dismissed for lack of jurisdiction, holding the petitioners lacked standing to challenge the exemption since they had not sought homestead leases (leases for which they were ineligible because they are not native Hawaiians). Even though they are not eligible as a matter of law, the court held that in order to bring a lawsuit challenging their ineligibility, they needed to have applied for a lease (and been denied).

The cert petition argues that the refund claimants have standing, and that the Equal Protection Clause prohibits state and local tax exemptions that are "available only to members of a certain race." The State of Hawaii's Brief in Opposition argues that the these are questions of state law, and that the Court should not grant cert.

The case was scheduled for the Court's conference on December 12, 2011, but the Court postponed consideration of the case and invited the Obama Administration to weigh in with a brief, because the petition draws into question the constitutionality of the Hawaiian Homes Commission Act and the constitutionality of a part of the Hawaii Admission Act. When federal laws are so questioned, the federal government is required to be notified, and it may file a brief in the case. The petitioners did, but the Solicitor General's office did not weigh.

As a result of the Supreme Court's invitation (such "invitations" are never declined!), it now has, and the feds have strongly supported the State in arguing that the standing questions are matters purely of Hawaii law, and the Hawaii Supreme Court's dismissal is grounded in "independent and adequate" state law, meaning that it is immune from Supreme Court review under Michigan v. Long, 463 U.S. 1032 (1983). The SG's brief also argues alternatively that if federal standing law is applied, the petitioners are alleging only "taxpayer standing" and not an individualized injury. Finally, the brief argues that whether the rule of Rice v. Cayetano, 528 US. 495 (2000) is applicable should be left for a future case. Perhaps the most interesting parts of the SG's brief are its recitation of Hawaii history (pages 1 - 3), and its noting of "recent and ongoing legal developments" (the State's recent legislation instituting a "process for the indigenous native people of Hawaii to reorganize as a sovereign government").

Here is the Court's docket entry. We will bring you more if additional briefs are filed, and when the case is put back on the Court's conference calendar.

Full Text: Brief for the United States as Amicus Curiae, Corboy v. Louie, No. 11-336 (filed May 25, 2012)

Related: Supreme Court asks for Federal Input on Challenge to Hawaii Admission Act, Hawaiian Homes Commission Act