Ninth Circuit Wants To Know The Statute Of Limitations For Takings Claims In Hawaii

by Robert Thomas, Inverse Condemnation, March 7, 2019

Here's the latest in a case we've been following that has resulted in what we're counting as no less that three lawsuits in state court (all removed to federal court by the State of Hawaii, as far as we are aware), which have gone back-and-forth between the U.S. District Court, the Ninth Circuit, and the Hawaii Supreme Court.

The latest is no different, and asks which statute of limitations applies to takings claims: the two-year personal injury statute, or the six-year "catch all." The answer has not been definitively resolved by Hawaii's courts, so Ninth Circuit in this order (Mar.7, 2019) booted this dispositive legal issue to the Hawaii Supreme Court by certifying this question: 

What is the applicable statute of limitations for a claim against the State of Hawai‘i alleging an unlawful taking of “[p]rivate property . . . for public use without just compensation,” Haw. Const. art. I, § 20?

Order at 3.

This lawsuit originated only a couple of years ago. The operative acts occurred more than two years before that, but less than six years ago:

On February 23, 2017, DW filed a complaint in Hawai‘i state court against the Commission and the State of Hawai‘i asserting takings claims under both the United States Constitution and the Hawai‘i Constitution. DW alleged that the Commission’s reclassification of the property as agricultural constituted a regulatory taking of DW’s property without just compensation. Specifically, DW alleged that the reclassification increased the purchase price of the property after DW had agreed to purchase it, destroyed DW’s “sophisticated funding arrangement [with] Asia” for developing the property, and caused DW to sustain other increased costs and losses in business opportunities. The State removed the case to federal court and moved to dismiss the complaint as barred by the applicable statute of limitations.

Order at 5-6. The district court dismissed. 

Everyone agrees the takings claim accrued on April 25, 2011. Thus, "[t]he only issue is identifying the applicable statute of limitations. And although the parties focus on DW's federal takings claim, DW's state takings claim remains at issue, and the applicable limitations period may control its federal takings claim as well." Order at 7 (footnote omitted). 

Interestingly, after certifying the question, the Order also details the arguments made by the parties, and notes the panel is "skeptical" of the State's reliance on a footnote in a Hawaii Intermediate Court of Appeals' opinion with a passing reference to a two year limitations for state law inverse condemnation claims. Oder at 11. By contrast, in a case involving a different constitutional claim, the Hawaii Supreme Court held that the six-year catch all applied. Order at 12. 

So there will be more, for sure. Stay tuned.

PDF: Order Certifying Questions to the Supreme Court of Hawaii, DW Aina Lea Dev., LLC v. State of Hawaii Land Us...