Filed: Feb. 19, 2020
Latest Update: Mar. 03, 2020
Summary: FOR PUBLICATION UNITED STATES COURT OF APPEALS FOR THE NINTH CIRCUIT BRIDGE AINA LE‘A, LLC, Nos. 18-15738 Plaintiff-Appellant/Cross-Appellee, 18-15817 v. D.C. No. 1:11-cv-00414- STATE OF HAWAII LAND USE SOM-KJM COMMISSION; VLADIMIR P. DEVENS, in his individual and official capacity; KYLE CHOCK, in his OPINION individual and official capacity; NORMAND ROBERT LEZY, in his individual and official capacity; DUANE KANUHA, in his official capacity; CHARLES JENCKS, in his official capacity; LISA M. JUD
Summary: FOR PUBLICATION UNITED STATES COURT OF APPEALS FOR THE NINTH CIRCUIT BRIDGE AINA LE‘A, LLC, Nos. 18-15738 Plaintiff-Appellant/Cross-Appellee, 18-15817 v. D.C. No. 1:11-cv-00414- STATE OF HAWAII LAND USE SOM-KJM COMMISSION; VLADIMIR P. DEVENS, in his individual and official capacity; KYLE CHOCK, in his OPINION individual and official capacity; NORMAND ROBERT LEZY, in his individual and official capacity; DUANE KANUHA, in his official capacity; CHARLES JENCKS, in his official capacity; LISA M. JUDG..
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FOR PUBLICATION
UNITED STATES COURT OF APPEALS
FOR THE NINTH CIRCUIT
BRIDGE AINA LE‘A, LLC, Nos. 18-15738
Plaintiff-Appellant/Cross-Appellee, 18-15817
v. D.C. No.
1:11-cv-00414-
STATE OF HAWAII LAND USE SOM-KJM
COMMISSION; VLADIMIR P. DEVENS,
in his individual and official
capacity; KYLE CHOCK, in his OPINION
individual and official capacity;
NORMAND ROBERT LEZY, in his
individual and official capacity;
DUANE KANUHA, in his official
capacity; CHARLES JENCKS, in his
official capacity; LISA M. JUDGE, in
her individual and official capacity;
NICHOLAS W. TEVES, JR., in his
individual and official capacity;
RONALD I. HELLER, in his individual
and official capacity,
Defendants-Appellees/Cross-
Appellants.
Appeal from the United States District Court
for the District of Hawaii
Susan O. Mollway, District Judge, Presiding
Argued and Submitted October 21, 2019
Honolulu, Hawaii
2 BRIDGE AINA LE‘A V. STATE OF HAWAII LAND USE COMM’N
Filed February 19, 2020
Before: SUSAN P. GRABER, MILAN D. SMITH, JR.,
and PAUL J. WATFORD, Circuit Judges.
Opinion by Judge Milan D. Smith, Jr.
SUMMARY *
Civil Rights/Takings
The panel affirmed the district court’s dismissal of
plaintiff’s equal protection claim, reversed the denial of
defendant’s motion for judgment as a matter of law, vacated
a judgment entered for plaintiff following a jury verdict, and
remanded with instructions to enter judgment for defendant,
in an action arising from the State of Hawaii’s Land Use
Commission’s 2011 reversion of 1,060 acres on the island of
Hawaii from a conditional urban land use classification to
the prior agricultural use classification.
The Commission’s reversion followed some twenty-two
years during which various landowners made unfulfilled
development representations to the Commission to obtain
and maintain the land’s urban use classification. Plaintiff
Bridge Aina Le‘a, LLC, one of the landowners at the time of
the reversion, challenged the reversion’s legality and
constitutionality in a state agency appeal, and in this case
Following trial, a jury made dual findings that there was a
regulatory unconstitutional taking of plaintiff’s property
*
This summary constitutes no part of the opinion of the court. It
has been prepared by court staff for the convenience of the reader.
BRIDGE AINA LE‘A V. STATE OF HAWAII LAND USE COMM’N 3
pursuant to both Lucas v. South Carolina Coastal Council,
505 U.S. 1003 (1992), and Penn Central Transportation
Company v. City of New York,
438 U.S. 104 (1978). The
district court determined that either finding independently
supported the verdict; denied, in part, the State’s motion for
judgment as a matter of law (JMOL); entered judgment for
plaintiff; and awarded $1 in nominal damages. Following
entry of judgment, the district court denied the State’s
renewed JMOL motion.
The panel held that the district court erred in denying the
State’s renewed JMOL motion because plaintiff’s evidence
did not establish a taking pursuant to either Lucas or Penn
Central. The panel held that there was no taking pursuant to
Lucas because the land retained substantial residual value in
its agricultural use classification and this classification still
allowed plaintiff to use the land in economically beneficial
ways. Accordingly, the panel concluded that the State was
entitled to judgment as a matter of law on plaintiff’s Lucas
theory, and turned to the Penn Central analysis.
Applying the Penn Central factors to the trial evidence,
the panel concluded that the jury could not reasonably find
for plaintiff. The panel first determined that the valuation
evidence, properly understood, weighed strongly against a
taking pursuant to the first Penn Central factor. The panel
rejected plaintiff’s assertion that the disruption of a land
sales agreement showed economic impact, noting that the
record showed that plaintiff overstated the reversion’s
impact on its contractual relationship with the potential
purchaser. The panel held that the Commission’s reversion
order did not interfere with plaintiff’s reasonable
investment-backed expectations at the time of acquisition.
The panel noted that the Commission had made clear in
1991, before plaintiff purchased the property, that it might
4 BRIDGE AINA LE‘A V. STATE OF HAWAII LAND USE COMM’N
issue an order to show cause as to why the land should not
revert for failure to substantially comply with
representations made to obtain reclassification. Hawaii law
expressly authorized the Commission to impose this
condition, and such conditions ran with title to the land. The
panel further noted that plaintiff had expressly committed to
build 385 affordable housing units as a part of an amendment
to the order governing the land’s conditional urban use
classification and had failed to complete the units.
The panel next considered the character of the reversion
order and held that the concentrated effect of the reversion
was reflective of the confines of a generally applicable
Hawaii law land use reclassification procedure. The panel
further held that the Hawaii Supreme Court’s invalidation of
the reversion as a matter of Hawaii statutory procedural
requirements did not carry the constitutional significance
that either plaintiff or the district court ascribed to it.
The panel concluded that because plaintiff’s own
evidence established a diminution in value that was
proportionately too small and because the reversion did not
interfere with plaintiff’s reasonable investment-backed
expectations for the land, no reasonable jury could conclude
that the reversion effected a taking pursuant to the Penn
Central analysis. The panel held that its analysis of
plaintiff’s taking theories required it to reverse the district
court’s denial of the State’s renewed JMOL motion. The
panel further vacated the judgment for plaintiff and the
nominal damages award, and remanded with instructions for
the district court to enter judgment for the State.
Addressing the dismissal of plaintiff’s equal protection
claim, the panel held that the claim was barred by the Hawaii
Supreme Court’s decision in plaintiff’s agency appeal.
Thus, applying Hawaii law, the panel could find no material
BRIDGE AINA LE‘A V. STATE OF HAWAII LAND USE COMM’N 5
difference between the equal protection issue plaintiff raised
in the agency appeal and the one raised in this suit. The
panel further rejected plaintiff’s contention that the Hawaii
Supreme Court’s remand for further proceedings consistent
with its opinion rendered the judgment nonfinal. The panel
noted that the Hawaii Supreme Court expressly vacated the
Hawaii circuit court’s judgment on the issue of equal
protection and remanded for the circuit court to effectuate
that vacatur. That remand could not have resulted in a
different resolution of plaintiff’s equal protection challenge
because no issue of law or fact regarding that challenge
remained unresolved. Finally, the panel held that plaintiff
received a full and fair opportunity to raise the equal
protection challenge in the agency appeal.
COUNSEL
Bruce D. Voss (argued), Matthew C. Shannon, and John D.
Ferry III, Bays Lung Rose & Holma, Honolulu, Hawaii, for
Plaintiff-Appellant/Cross-Appellee.
Ewan C. Rayner (argued), Deputy Solicitor General; David
D. Day, Deputy Attorney General; William J. Wynhoff,
Supervising Deputy Attorney General; Clyde J. Wadsworth,
Solicitor General; Department of the Attorney General,
Honolulu, Hawaii; for Defendants-Appellees/Cross-
Appellants.
6 BRIDGE AINA LE‘A V. STATE OF HAWAII LAND USE COMM’N
OPINION
M. SMITH, Circuit Judge:
This case stems from the reversion of the land use
classification of 1,060 acres of largely vacant and barren,
rocky lava flow land in South Kohala, on the island of
Hawaii. In 2011, Defendant-Appellee and Cross-Appellant
the State of Hawaii Land Use Commission (the
Commission) ordered the land’s reversion from its
conditional urban use classification to its prior agricultural
use classification. This reversion followed some twenty-two
years during which various landowners made unfulfilled
development representations to the Commission to obtain
and maintain the land’s urban use classification. Plaintiff-
Appellant and Cross-Appellee Bridge Aina Le‘a, LLC
(Bridge), one of the landowners at the time of the reversion,
challenged the reversion’s legality and constitutionality in a
state agency appeal, and in this case.
The cross-appeals here come to us following a final
judgment in a jury trial with a verdict for Bridge and the
district court’s denial of a post-judgment motion for
judgment as a matter of law (JMOL). Although the parties
raise several issues, we need decide only two. First, we must
decide whether the State 1 was entitled to JMOL on Bridge’s
1
We use the term “the State” to refer collectively to the Commission
and the commissioners whom Bridge sued in their official capacities.
See Hafer v. Melo,
502 U.S. 21, 25 (1991) (“Suits against state officials
in their official capacity . . . should be treated as suits against the State.”).
The commissioners whom Bridge named in their official capacities are:
Vladimir P. Devens, Kyle Chock, Normand R. Lezy, Lisa M. Judge,
Nicholas W. Teves, Jr., Ronald I. Heller, Duane Kanuha, Thomas
Contrades, and Charles Jencks. Bridge sued all but the last two
commissioners—neither of whom voted for the reversion—in their
BRIDGE AINA LE‘A V. STATE OF HAWAII LAND USE COMM’N 7
claims that the reversion was a regulatory taking in violation
of the Fifth Amendment. After an eight-day jury trial, the
jury found that the reversion was such a taking. The State
urges us to reverse on the ground that Bridge’s evidence did
not establish a taking. Second, we must decide whether the
Hawaii Supreme Court’s adjudication of Bridge’s equal
protection challenge in the state agency appeal barred the
same issue Bridge alleged here. See DW Aina Le‘a Dev.,
LLC v. Bridge Aina Le‘a, LLC,
339 P.3d 685 (Haw. 2014).
Bridge contends that the Hawaii Supreme Court neither
decided the same equal protection issue Bridge raised in this
lawsuit, nor issued a final judgment on the merits in which
Bridge had a full and fair opportunity to litigate the issue.
We reverse the denial of the State’s renewed JMOL
motion because, as a matter of law, the evidence did not
establish an unconstitutional regulatory taking. We vacate
the judgment and remand. We affirm the district court’s
dismissal of Bridge’s equal protection claim.
FACTUAL AND PROCEDURAL BACKGROUND
I. The Reclassification History of the 1,060 Acres
A. The Conditional Urban Reclassification
For over forty years before the reclassification, the 1,060
acres at issue were vacant and part of a larger 3,000 acre-
parcel zoned for agricultural use. This classification
generally restricted the landowner to certain statutorily
specified uses. See Haw. Rev. Stat. § 205-2(d)(1)–(16)
(setting forth the general uses for agricultural land); see also
individual capacities as well. Commissioner Contrades died during the
pendency of this litigation before the district court.
8 BRIDGE AINA LE‘A V. STATE OF HAWAII LAND USE COMM’N
id. § 205-4.5 (elaborating on permissible uses of agricultural
land depending on soil ratings). The landowner also could
petition to obtain a permit for “certain unusual and
reasonable uses.”
Id. § 205-6(a).
In 1987, non-party Signal Puako Corporation (Signal),
the then-landowner, decided that it would seek to develop a
mixed residential community on the 1,060 acres as the first
phase of a development project on the entire 3,000 acres. To
do so, Signal petitioned the Commission to reclassify 1,060
acres as urban pursuant to Hawaii’s land use reclassification
procedure. See Haw. Rev. Stat. § 205-4(a). If the land were
zoned for urban use, Signal could pursue “activities or uses
as provided by ordinances or regulations of the county
within which the urban district is situated.”
Id. § 205-2(b).
The Commission approved the petition in a January 1989
order (the 1989 Order). In doing so, the Commission
exercised its authority to “modify the petition by imposing
conditions necessary . . . to assure substantial compliance
with representations made by the petitioner in seeking a
boundary change.”
Id. § 205-4(g). In relevant part,
Condition One required Signal to make 60% of the proposed
2,760 residential units affordable, for a total of 1,656
affordable housing units. Condition Nine required Signal to
develop the land in substantial compliance with
representations made to obtain reclassification. The 1989
Order did not specify any deadlines, nor did the order specify
any penalties for noncompliance. Nevertheless, the
conditions the Commission imposed ran with the title to the
land.
Id.
At some point, non-party Puako Hawaii Properties
(Puako), an entity in which Signal was a partner, took title to
the 3,000 acres. Puako proposed a mixed residential
community which would have fewer total housing units than
BRIDGE AINA LE‘A V. STATE OF HAWAII LAND USE COMM’N 9
Signal’s proposal and for which construction would end by
1999. Puako therefore petitioned to modify the 1989 Order.
The Commission approved Puako’s petition in a July
1991 order (the 1991 Order) with conditions. Like the 1989
Order, the 1991 Order required Puako to make 60% of the
residential units affordable housing. But the 1991 Order
reduced the required affordable housing units to 1,000 units
given the reduction to the proposed development’s total
number of units. The 1991 Order again imposed a condition
requiring Puako to develop the land in substantial
compliance with its representations. This time, the
Commission specified that “[f]ailure to so develop the
Property may result in reversion of the Property to its former
classification or change to a more appropriate
classification.” 2
Notwithstanding Puako’s representations, the 1,060
acres remained undeveloped by 1999. Bridge acquired the
entire 3,000 acres at this time—inclusive of the 1,060 acres
2
This language tracked a 1990 amendment to the Commission’s
statutory authority to impose reclassification conditions pursuant to
Hawaii Revised Statute § 205-4(g). The statute specifies that “[t]he
commission may provide by condition that absent substantial
commencement of use of the land in accordance with such
representations, the commission shall issue and serve upon the party
bound by the condition an order to show cause why the property should
not revert to its former land use classification or be changed to a more
appropriate classification.” Haw. Rev. Stat. § 205-4(g); see also DW
Aina Le‘a
Dev., 339 P.3d at 709 (“This sentence was added to [] § 205-
4(g) in 1990. The legislative history indicates that the legislature sought
to empower the [Commission] to void a district boundary amendment
where the petitioner does not substantially commence use of the land in
accordance with representations made to the [Commission].” (citations
and emphasis omitted)).
10 BRIDGE AINA LE‘A V. STATE OF HAWAII LAND USE COMM’N
of conditionally reclassified urban land—for $5.2 million
plus closing costs under its then-name Bridge Puako, LLC.
B. The Post-Acquisition Amendments to the
Conditions
In September 2005, nearly six years after acquiring the
land, Bridge moved to amend the 1991 Order in part. Like
the prior landowners, Bridge proposed a mixed residential
community. Bridge, however, argued that the cost of
complying with the 1991 Order’s affordable housing
condition was too high. According to Bridge, it would be
economically infeasible to develop the property without a
lower level of required affordable housing units. Bridge
contended that an appropriate benchmark would be the 20%
level set by a then-recent County of Hawaii affordable
housing ordinance.
The Commission amended the affordable housing
condition in a November 2005 order (the 2005 Order).
Condition One set the affordable housing unit requirement
at 20%, requiring Bridge to build a minimum of 385 units.
For the first time, the Commission set a deadline for the
condition. Specifically, Bridge had to provide occupancy
certificates for all affordable housing units by November 17,
2010. The Commission affirmed all other conditions of the
1989 Order, as amended by the 1991 Order.
Throughout 2006 and 2007, Bridge appeared before the
Commission to assure the Commission of its compliance
with the conditions, including through the apparent
construction of wells, roads, and other infrastructure.
According to Bridge, however, further progress “was
hampered somewhat” by the requirement that Bridge
prepare an environmental impact statement for the project in
BRIDGE AINA LE‘A V. STATE OF HAWAII LAND USE COMM’N 11
accordance with Sierra Club v. Department of
Transportation,
167 P.3d 292 (Haw. 2007).
C. The Order to Show Cause (OSC)
As early as September 2008, several commissioners
expressed concerns that Bridge’s status reports “showed ‘no
activity’ with respect to the conditions imposed by the 1991
decision and order, as amended in 2005.” DW Aina Le‘a
Dev., 339 P.3d at 693. In December 2008, the Commission
ordered Bridge to show cause why the land should not revert
to its prior agricultural use classification. The Commission
explained that it had reason to believe that Bridge and its
predecessors had failed to satisfy multiple reclassification
conditions and had not fulfilled various representations.
The Commission held the first OSC hearing in January
2009. Notwithstanding the potential impact ongoing OSC
proceedings might have on the use of the land, Bridge agreed
to sell the 1,060 acres to non-party DW Aina Le‘a
Development, LLC (DW). Pursuant to a February 2009
written agreement, Bridge was to convey the land in three
phases in exchange for a total of $40.7 million.3 Bridge and
DW would enter into a joint agreement, in which Bridge
would develop the nearly 2,000 agricultural use acres
remaining in its possession. Bridge would retain the right to
plan for the overall 3,000 acres, including the placement of
a sewage treatment plant, school, and park on the
agricultural land.
3
This agreement replaced the prior 2008 sale agreement between
Bridge and non-party Relco Corporation (Relco). Bridge and Relco
amended that agreement before it closed so that Relco could give its
interest to DW. Relco, however, was DW’s managing entity.
12 BRIDGE AINA LE‘A V. STATE OF HAWAII LAND USE COMM’N
On April 30, 2009, the Commission reconvened to
discuss the OSC. Bridge represented to the Commission that
it was in the process of transferring the 1,060 acres to DW,
which would assume the responsibility of constructing the
385 affordable housing units. The State Office of Planning
advocated for reversion, noting that Bridge indicated that it
could not complete the 385 affordable housing units by the
November 2010 deadline. Various commissioners
expressed dismay at what they viewed as unfulfilled
promises made to obtain the reclassification.
At the conclusion of the hearing, the Commission held a
voice vote on the OSC (the 2009 Voice Vote), in which
seven commissioners voted to revert the zoning of the 1,060
acres to agricultural use. The Commission never put the
result of the vote into a final written order.
After the 2009 Voice Vote, DW did not make any
payments due pursuant to the February 2009 sale agreement.
Nevertheless, in the month following the vote, DW
intervened in the OSC proceedings and advised the
Commission that any reversion would make development
impossible, including providing the 385 affordable housing
units. DW moved to stay any decision and order pending
consideration of additional information, including an overall
conceptual plan for the project and an affordable housing
unit site plan. The Commission agreed to stay the
proceedings in June 2009.
In August 2009, Bridge and DW co-petitioned the
Commission to rescind the OSC, contending that they had
performed, or were in the process of performing, all the
conditions the OSC cited. They also contended that the 2009
Voice Vote “put an immediate and substantial cloud over the
Project, making it extremely difficult in this economic
environment to secure short-term or long-term financing to
BRIDGE AINA LE‘A V. STATE OF HAWAII LAND USE COMM’N 13
develop and complete the Project.” Nevertheless, Bridge
and DW represented that DW would still pursue completion
of the 385 units by November 17, 2010, and that the units
“will be provided” if the Commission rescinded the OSC.
The Commission rescinded the OSC in September 2009,
subject to the single “condition precedent” of requiring the
construction of sixteen affordable units by March 31, 2010.
Following the OSC’s rescission, Bridge and DW
modified their sale agreement in December 2009 to change
the timing of purchases but they retained the previously
agreed-upon $40.7 million price. DW would buy a 60-acre
affordable housing parcel for $5 million, effective December
11, 2009. DW also would pay Bridge “development
expenses” of some $1.191 million for that parcel. The final
closing date for the remaining 1,000 acres was set for
February 28, 2010, by which point DW would have paid
Bridge an additional $35.7 million. Consistent with this
agreement, DW purchased the 60-acre parcel from Bridge in
December 2009.
D. The Resumption of OSC Proceedings and the
Reversion Order
On June 10, 2010, DW informed the Commission that it
had completed the sixteen affordable housing units by the
March 2010 deadline. In response, the State Office of
Planning informed the Commission that the units were not
habitable because they lacked water, a sewage system,
electricity, and paved road access.
The Commission held a compliance hearing in July
2010, at which both Bridge and DW appeared. DW admitted
that it lacked the money to build on the remaining 1,000
acres. The State Office of Planning requested that the
Commission reopen the OSC and advocated for reversion so
14 BRIDGE AINA LE‘A V. STATE OF HAWAII LAND USE COMM’N
that a “bona fide developer” could make a new proposal. All
commissioners voted to reinstate the OSC, scheduled an
OSC hearing, and entered a finding that the condition
precedent had not been satisfied. About two weeks
thereafter, the Commission issued an order reinstating the
OSC and reiterating the 2005 Order’s November 17, 2010
deadline to obtain 385 affordable housing unit occupancy
certificates. Bridge contends that after the reinstatement,
DW failed to make the additional $35.7 million in payments
for the remaining urban land as contemplated by the
modified December 2009 agreement.
Bridge and DW moved to bar action on the OSC, arguing
that the Commission’s enforcement actions, starting with the
OSC, violated various Hawaii statutes and administrative
rules. At the conclusion of a second OSC hearing, however,
five commissioners voted to revert the land. With the
approval of a sixth commissioner, the Commission issued a
final reversion order (the Reversion Order) on April 25,
2011.
The Reversion Order found that Bridge and DW had
failed to comply with the 2005 Order’s affordable housing
condition, specifically noting that Bridge and DW had not
completed 385 affordable housing units by the deadline and
were unlikely to do so in the near future. Although the order
acknowledged that Bridge and DW had constructed sixteen
affordable housing units, the order determined that there was
no infrastructure connected to them. The order outlined
violations of the 1991 Order’s substantial compliance
condition based on representations made to the Commission
between 2005 and 2010. The order also found that Bridge’s
and DW’s procedural due process rights were not violated
because they had received a full and fair opportunity to
BRIDGE AINA LE‘A V. STATE OF HAWAII LAND USE COMM’N 15
present their case. The order declined to resolve Bridge’s
equal protection challenge.
At the time of the Reversion Order, DW had purchased
only the 60-acre affordable housing parcel while Bridge still
owned the remaining 1,000 acres. The closing dates for the
remaining 1,000 urban acres had passed several months
earlier without DW making the additional $35.7 million in
agreed-upon payments to Bridge.
II. The Direct Agency Appeal of the Reversion Order
Bridge and DW appealed the Reversion Order to a
Hawaii circuit court. Although the court declined to
preliminarily stay the Reversion Order, the court issued an
amended final judgment in June 2012 in Bridge’s favor. The
court determined that the Commission had violated various
Hawaii statutory procedural requirements in issuing the
Reversion Order. The court also determined that the process
by which the Commission issued the order violated Bridge’s
and DW’s federal and state constitutional due process and
equal protection rights. Thus, the circuit court vacated the
Reversion Order and voided the OSC.
On appeal, the Hawaii Supreme Court affirmed in part
and vacated in part the circuit court’s judgment. The Hawaii
Supreme Court acknowledged the Commission’s authority
to revert the land use classification, as well as the propriety
of the December 2008 OSC. DW Aina Le‘a
Dev., 339 P.3d
at 711, 713. The court, however, affirmed the circuit court’s
determination that the Reversion Order violated applicable
statutory procedural requirements.
The Hawaii Supreme Court explained that a reversion
may or may not be subject to certain procedural
requirements.
Id. at 709–10. If a petitioner fails to
16 BRIDGE AINA LE‘A V. STATE OF HAWAII LAND USE COMM’N
substantially commence use of the land in accordance with
its representations, then the Commission may revert a land
use classification pursuant to Hawaii Revised Statute § 205-
4(g) subject to a limited procedure.
Id. at 710. However, if
a petitioner has substantially commenced use, the
Commission must follow the requirements of Hawaii
Revised Statute § 205-4(h).
Id. at 689, 714. The court
determined that Bridge and DW had substantially
commenced use after the Commission rescinded the OSC
because DW actively prepared development plans and
constructed sixteen affordable housing units by March 31,
2010.
Id. at 712−14. Thus, the Commission had to find
within 365 days of the OSC’s initial issuance and by a “clear
preponderance of the evidence” that reversion was
reasonable, did not violate Hawaii Revised Statute § 205-2
and was otherwise consistent with the policies and criteria
set forth in Hawaii Revised Statute §§ 205-16 and 205-17.
Id. at 714; see also Haw. Rev. Stat. § 205-4(h). The
Commission had failed to do so. DW Aina Le‘a Dev., 339
P.3d. at 714.
The Hawaii Supreme Court vacated the remainder of the
circuit court’s judgment. With respect to the due process
ruling, the Hawaii Supreme Court concluded that Bridge and
DW had received notice and a meaningful opportunity to be
heard before the reversion.
Id. at 716. Noting that “the land
had changed hands numerous times,” that the Commission
“had amended the original reclassification order on multiple
occasions,” and the “long history of unfulfilled promises
made in connection with the development of this property,”
the court determined that the reversion was not “arbitrary
and unreasonable.”
Id. at 717. With respect to equal
protection, the court could not find that the Commission
lacked a rational basis for its treatment of Bridge and DW
“[g]iven the long history of this property and the
BRIDGE AINA LE‘A V. STATE OF HAWAII LAND USE COMM’N 17
[Commission’s] dealings with the landowners over the
course of many years.”
Id. at 718. The court otherwise
reasoned that the Commission acted pursuant to its broad
statutory authority to impose conditions and its related
authority to enforce such conditions.
Id. The court
remanded for proceedings consistent with its decision.
Id.
III. The Proceedings in this Case
Although Bridge and DW together pursued the agency
appeal, Bridge alone sued the Commission and
commissioners in Hawaii state court in June 2011.4 Bridge’s
eleven-count complaint for declaratory, injunctive, and
monetary relief raised federal and state constitutional due
process, equal protection, and taking claims. Bridge sued all
commissioners in their official capacities and sued the six
commissioners who had voted for the Reversion Order in
their individual capacities as well. Alleging that the $40.7
million DW agreed to pay for the 1,060 acres was the land’s
fair market value, Bridge claimed “not less” than $35.7
million in damages.
The State removed the case to federal court and moved
to dismiss. Before ruling on that motion, the district court
ordered a stay of the proceedings pending the agency appeal,
an order which the parties cross-appealed to our court. After
the Hawaii Supreme Court’s decision, we remanded to the
4
DW sued the Commission in Hawaii state court in 2017, asserting
federal and state constitutional taking claims. After the case’s removal
to federal court, a district court dismissed DW’s claims as barred by the
Hawaii statute of limitations. Our court has certified to the Hawaii
Supreme Court a question regarding the proper statute of limitations for
a taking claim raised pursuant to Hawaii law. See DW Aina Le‘a Dev.,
LLC v. Haw. Land Use Comm’n,
918 F.3d 602, 609 (9th Cir. 2019)
(certification order).
18 BRIDGE AINA LE‘A V. STATE OF HAWAII LAND USE COMM’N
district court. Bridge Aina Le‘a, LLC v. Chock, 590 F. App’x
705 (9th Cir. 2015) (unpublished).
On remand, the district court granted the State’s motion
to dismiss, which concerned only some of Bridge’s claims.
The court dismissed Bridge’s due process and equal
protection claims, reasoning that the Hawaii Supreme
Court’s decision barred re-litigation of the same issues.
Applying the doctrine of quasi-judicial immunity, the court
dismissed Bridge’s individual capacity claims against the
commissioners who voted for reversion. Ultimately, only
Bridge’s taking claims proceeded to trial on the theory that
the reversion was an unconstitutional regulatory taking
pursuant to the analyses in Lucas v. South Carolina Coastal
Council,
505 U.S. 1003 (1992), and Penn Central
Transportation Company v. City of New York,
438 U.S. 104
(1978).
A jury trial was held between March 13 and 23, 2018.
After Bridge put on its case-in-chief, the State moved for
JMOL on the grounds that Bridge had not established either
a Lucas or Penn Central taking and, even if it had, Bridge
should receive only nominal damages because Bridge lacked
admissible evidence of just compensation. The district court
granted the motion as to nominal damages but denied it as to
taking liability. Using the 1,060 acres subject to the
Reversion Order as the relevant property denominator at the
court’s instruction, the jury found that a taking occurred
pursuant to both Lucas and Penn Central. The district court
entered judgment for Bridge and awarded $1 in nominal
damages.
Following the entry of judgment, the State renewed its
JMOL motion and alternatively requested a new trial using
3,000 acres as the property denominator. The parties cross-
appealed the judgment during the pendency of the renewed
BRIDGE AINA LE‘A V. STATE OF HAWAII LAND USE COMM’N 19
motion, and the appeals became effective upon the district
court’s denial of that motion. The State timely appealed the
denial.
JURISDICTION AND STANDARDS OF REVIEW
We have jurisdiction over the appeals from the final
judgment pursuant to 28 U.S.C. § 1291. We also have
jurisdiction over the appeal from the previously nonfinal
orders that have merged with the final judgment, Hall v. City
of Los Angeles,
697 F.3d 1059, 1070–71 (9th Cir. 2012), and
over the denial of the renewed JMOL motion, Wadler v. Bio-
Rad Labs., Inc.,
916 F.3d 1176, 1185 (9th Cir. 2019).
We review de novo the denial of a renewed JMOL
motion. Reese v. County of Sacramento,
888 F.3d 1030,
1036 (9th Cir. 2018). “‘[W]hen reviewing a motion for
judgment as a matter of law, we apply the law as it should
be, rather than the law as it was read to the jury,’ even if the
party did not object to the jury instructions.” Fisher v. City
of San Jose,
558 F.3d 1069, 1074 (9th Cir. 2009) (en banc)
(alteration in original) (quoting Pincay v. Andrews,
238 F.3d
1106, 1109 n.4 (9th Cir. 2001)). A renewed JMOL motion
“is properly granted only if the evidence, construed in the
light most favorable to the nonmoving party, permits only
one reasonable conclusion, and that conclusion is contrary to
the jury’s verdict.” Castro v. County of Los Angeles,
833
F.3d 1060, 1066 (9th Cir. 2016) (en banc) (internal
quotations and citation omitted). “A jury’s verdict must be
upheld if it is supported by . . . evidence adequate to support
the jury’s conclusion, even if it is also possible to draw a
contrary conclusion.” Pavao v. Pagay,
307 F.3d 915, 918
(9th Cir. 2002).
We review de novo the dismissal of a claim pursuant to
Federal Rule of Civil Procedure 12(b)(6), United States ex
20 BRIDGE AINA LE‘A V. STATE OF HAWAII LAND USE COMM’N
rel. Anita Silingo v. WellPoint, Inc.,
904 F.3d 667, 676 (9th
Cir. 2018), as well as the district court’s issue preclusion
ruling, Garity v. APWU Nat’l Labor Org.,
828 F.3d 848, 854
(9th Cir. 2016) (citation omitted).
ANALYSIS
I. The State’s Renewed JMOL Motion on Bridge’s
Taking Claims
Our core focus in this appeal is the district court’s denial
of the State’s renewed JMOL motion on Bridge’s Lucas and
Penn Central taking challenges to the reversion pursuant to
the Fifth Amendment’s Takings Clause. 5 As we explain, as
matter of law, Bridge’s evidence failed to establish a taking
pursuant to either. Accordingly, it is unnecessary for us to
consider the other taking issues that the parties raise on
appeal.
A. The Fifth Amendment Regulatory Takings
Framework
“The Takings Clause of the Fifth Amendment states that
‘private property [shall not] be taken for public use, without
5
Bridge also asserted takings claims pursuant to the Hawaii
Constitution, which provides that “[p]rivate property shall not be taken
or damaged for public use without just compensation.” Haw. Const. art.
1, § 20. The Hawaii Supreme Court has endorsed federal regulatory
takings jurisprudence in determining whether government action is a
taking in violation of the Hawaii Constitution. Leone v. County of Maui,
404 P.3d 1257, 1270–71 (Haw. 2017) (acknowledging the Lucas and
Penn Central tests). Because Bridge raises no distinct and separate
arguments regarding its state law takings claims and given the Hawaii
Supreme Court’s reliance on the federal regulatory takings framework,
our Lucas and Penn Central analyses apply equally to Bridge’s state law
takings claims.
BRIDGE AINA LE‘A V. STATE OF HAWAII LAND USE COMM’N 21
just compensation.” Knick v. Twp. of Scott,
139 S. Ct. 2162,
2167 (2019) (alterations in original). By its terms, the clause
“does not prohibit the taking of private property,” but instead
requires “compensation in the event of [an] otherwise proper
interference amounting to a taking.” First English
Evangelical Lutheran Church of Glendale v. County of Los
Angeles,
482 U.S. 304, 314, 315 (1987). A classic taking
occurs when the “government directly appropriates private
property or ousts the owner from his domain.” Lingle v.
Chevron U.S.A. Inc.,
544 U.S. 528, 539 (2005).
Beyond a classic taking, the Supreme Court has
recognized that “if regulation goes too far it will be
recognized as a taking.” Pa. Coal Co. v. Mahon,
260 U.S.
393, 415 (1922). There are three types of regulatory action
the Court has recognized, “each of which ‘aims to identify
regulatory actions that are functionally equivalent to the
classic taking.’” Cedar Point Nursery v. Shiroma,
923 F.3d
524, 530–31 (9th Cir. 2019) (quoting
Lingle, 544 U.S. at
539). Two types of regulatory actions—Loretto and Lucas
takings—are per se takings. 6
Id. at 531. Penn Central
takings are the third type of regulatory taking.
Id.
Generally, courts determine whether a regulatory action
is functionally equivalent to the classic taking using
“essentially ad hoc, factual inquiries, designed to allow
careful examination and weighing of all the relevant
circumstances.” Tahoe-Sierra Pres. Council, Inc. v. Tahoe
6
A Loretto taking occurs “where government requires an owner to
suffer a permanent physical invasion of her property.”
Lingle, 544 U.S.
at 538 (citing Loretto v. Teleprompter Manhattan CATV Corp.,
458 U.S.
419 (1982)). This “relatively narrow” per se rule requires the
government to provide compensation, however minor the physical
invasion.
Id. Bridge’s land did not suffer a permanent physical invasion,
and thus Loretto does not apply.
22 BRIDGE AINA LE‘A V. STATE OF HAWAII LAND USE COMM’N
Reg’l Planning Agency,
535 U.S. 302, 322 (2002) (citations
and internal quotation marks omitted). These inquiries are
set forth in the three Penn Central factors: (1) “[t]he
economic impact of the regulation on the claimant,” (2) “the
extent to which the regulation has interfered with distinct
investment-backed expectations,” and (3) “the character of
the governmental action.” Penn
Central, 438 U.S. at 124.
Certain regulatory actions, however, are treated
categorically as a taking without the necessity of the Penn
Central inquiry. The Lucas rule “applies to regulations that
completely deprive an owner of ‘all economically beneficial
us[e]’ of her property.”
Lingle, 544 U.S. at 538 (alteration
in original) (quoting
Lucas, 505 U.S. at 1019). Government
regulations that constitute such a taking are typically those
that require land to be left substantially in its natural state.
Lucas, 505 U.S. at 1018. This is a “relatively narrow” and
relatively rare taking category,
Lingle, 544 U.S. at 538,
confined to the “extraordinary circumstance when no
productive or economically beneficial use of land is
permitted,”
Lucas, 505 U.S. at 1017 (emphasis in original). 7
Compensation is required in such a case unless the
government can show that underlying principles of state
property or nuisance law would have led to the same
outcome as the challenged regulation. See
Tahoe-Sierra,
535 U.S. at 330;
Lucas, 505 U.S. at 1029.
Here, the jury made dual findings that there was an
unconstitutional taking of Bridge’s property pursuant to both
7
One review of some 1,700 taking cases in state and federal courts
decided over 25 years identified only 27 cases in which a landowner
successfully brought a Lucas claim, i.e. 1.6%. See Carol N. Brown &
Dwight H. Merriam, On the Twenty-Fifth Anniversary of Lucas: Making
or Breaking the Takings Claim, 102 IOWA L. REV. 1847, 1849–50
(2017).
BRIDGE AINA LE‘A V. STATE OF HAWAII LAND USE COMM’N 23
Lucas and Penn Central. The district court determined that
either finding independently supported the verdict.
We underscore at the outset that when “a regulation
‘denies all economically beneficial or productive use of
land,’ the multi-factor analysis established in Penn Central
is not applied” because Lucas supplies the relevant rule.
Esplanade Props., LLC v. City of Seattle,
307 F.3d 978, 984
(9th Cir. 2002) (quoting
Lucas, 505 U.S. at 1027)). When
“a regulation places limitations on land that fall short of
eliminating all economically beneficial use, a taking
nonetheless may have occurred, depending on” the Penn
Central framework. Palazzolo v. Rhode Island,
533 U.S.
606, 617 (2001) (citing Penn
Central, 438 U.S. at 124).
Thus, if the jury could find that the reversion deprived
Bridge of all economically beneficial uses of the 1,060 acres,
then Penn Central was inapplicable. Only if the reversion
fell short of a total taking was application of Penn Central
necessary. We apply this approach in considering the State’s
arguments.
B. Lucas Taking
Although the State raises several challenges to the jury’s
Lucas finding, the State’s core challenges to that finding are
that the land retained substantial residual value in its
agricultural use classification and that this classification still
allowed Bridge to use the land in economically beneficial
ways. We agree and thus decline to reach the State’s
alternative challenges to the jury’s Lucas finding.
We recognize that shortly after the Supreme Court
announced the Lucas rule, we remarked that “the term
‘economically viable use’ has yet to be defined with much
precision.” Outdoor Sys., Inc. v. City of Mesa,
997 F.2d 604,
616 (9th Cir. 1993). Acknowledging the lack of precision in
24 BRIDGE AINA LE‘A V. STATE OF HAWAII LAND USE COMM’N
this concept, we stated that “the value of the subject
property” is “relevant” to the Lucas inquiry, but we rejected
“focusing solely on property values.” Del Monte Dunes at
Monterey, Ltd. v. City of Monterey,
95 F.3d 1422, 1433 (9th
Cir. 1996), aff’d,
526 U.S. 687 (1999). Pointing to this
passage in Del Monte Dunes, Bridge urges us to reject the
State’s arguments regarding the role of value in the Lucas
context.
Subsequent developments in the Supreme Court’s
takings decisions, however, lead to three observations that
guide our resolution of the parties’ arguments here. First,
the Court has made clear that “[i]n the Lucas context, . . . the
complete elimination of a property’s value is the
determinative factor.”
Lingle, 544 U.S. at 539 (emphasis
added). As the Court has underscored, “the categorical rule
in Lucas was carved out for the ‘extraordinary case’ in which
a regulation permanently deprives property of all value.”
Tahoe-Sierra, 535 U.S. at 332. “Anything less than a
‘complete elimination of value,’ or a ‘total loss’ . . . would
require the kind of analysis applied in Penn Central.”
Id. at
330 (quoting
Lucas, 505 U.S. at 1019 n.8). Second, although
value is determinative, use is still relevant. See Murr v.
Wisconsin,
137 S. Ct. 1933, 1949 (2017) (concluding that the
challenged regulations did not deprive the landowners of all
economically beneficial use because “[t]hey can use the
property for residential purposes” and “[t]he property has not
lost all economic value”). Finally, the Court has clarified
that a token interest will not defeat a Lucas claim. See
Palazzolo, 533 U.S. at 631 (“Assuming a taking is otherwise
established, a State may not evade the duty to compensate
on the premise that the landowner is left with a token
interest.”). Guided by these observations, we conclude that
Bridge’s evidence did not satisfy Lucas.
BRIDGE AINA LE‘A V. STATE OF HAWAII LAND USE COMM’N 25
1. The Land Retained Substantial Economic
Value
We turn first to the land’s value. Bridge relied on the
expert testimony of Steven Chee to opine on the fair market
value of the 1,060 acres in the urban and agricultural land
use classifications before and after reversion. Chee
expressly assumed that the 2009 Voice Vote on April 30,
2009 reverted the land. Although this assumption is
demonstrably wrong, this testimony is the only valuation
evidence in the record. We therefore address the argument
as Bridge frames it.
Chee appraised the fair market value of the 1,060 acres
by determining the highest and best use of the land in each
classification, a metric “shaped by the competitive forces
within the market where the property is located.” First, Chee
opined that the land had a value of $40 million on April 29,
2009 in an urban classification based on land banking until
market conditions improved given the significant off-site
work necessary before the land could be developed and the
ongoing impacts of the Great Recession. Second, Chee
opined that the land had a value of $6.36 million on April
30, 2009 in an agricultural classification. Although Chee did
not presume that reclassification would be obtained, the
agricultural use valuation accounted for land banking while
simultaneously attempting to regain the former urban
classification. 8 The difference reflects an 83.4 % diminution
in value.
8
We understand Chee’s evidence to account for a realistic
probability that the urban classification would be regained based on
Chee’s trial testimony that an appraiser will consider the possibility of
rezoning if it “looks highly realistic.” In actuality, we also know that
26 BRIDGE AINA LE‘A V. STATE OF HAWAII LAND USE COMM’N
The State contends that this evidence shows that the land
retained substantial residual value in an agricultural use
classification and that any diminution in value was less than
the land’s total value. We agree. Absent more, there is no
Lucas liability for this less than total deprivation of value.
See Appolo Fuels, Inc. v. United States,
381 F.3d 1338, 1347
(Fed. Cir. 2004) (concluding that a 92% loss of value in one
part of the land and a 78% loss in another part “is manifestly
insufficient” under Lucas); Cienega Gardens v. United
States,
331 F.3d 1319, 1344 (Fed. Cir. 2003) (concluding
that Lucas requires a loss of “100% of a property interest’s
value”); Cooley v. United States,
324 F.3d 1297, 1305 (Fed.
Cir. 2003) (“Contrary to the trial court’s holding, the record
shows that the 1993 denial apparently destroyed less than all
of Cooley’s property’s value, which constitutes a non-
categorical taking. The categorical takings directives of
Lucas do not apply.”).
In rejecting the State’s arguments, the district court
reasoned that value was relevant to but not dispositive of the
Lucas inquiry by relying on our discussion on value versus
use in Del Monte Dunes. This was error because, as we have
explained, the Supreme Court’s precedents underscore that
value is determinative. See
Lingle, 544 U.S. at 539; Tahoe-
Sierra, 535 U.S. at 330. We have stated as much in a
decision that the district court acknowledged but interpreted
as irrelevant. See Horne v. U.S. Dep’t of Agric.,
750 F.3d
1128, 1141 n.17 (9th Cir. 2014) (“Lucas plainly applies only
when the owner is deprived of all economic benefit of the
property. If the property retains any residual value after the
regulation’s application, Penn Central applies.” (citation
Bridge did regain the conditional urban classification roughly a year after
the reversion because of the circuit court’s judgment.
BRIDGE AINA LE‘A V. STATE OF HAWAII LAND USE COMM’N 27
omitted) (emphasis in original)), overruled on other grounds
by Horne v. Dep’t of Agric.,
135 S. Ct. 2419 (2015).
The district court also wrote off the substantial residual
value that Bridge’s evidence found in the land’s agricultural
use classification by pointing to our observation in Del
Monte Dunes that if “no competitive market exists for the
property without the possibility of development, a taking
may have
occurred.” 95 F.3d at 1433. The district court read
this passage to mean that the jury could find that Lucas
applied here if no competitive market existed for the land
without a change in the regulation. Bridge reprises this
reasoning here.
Del Monte Dunes does not control here. There, we
determined that “the mere fact that there is one willing buyer
of the subject property, especially where that buyer is the
government, does not, as a matter of law, defeat a taking
claim” when the “government action relegates permissible
uses of property to those consistent with leaving the property
in its natural state (e.g., nature preserve or public space).”
Id.
at 1433. Thus, the fact that the government purchased the
land subject to the challenged regulation that the government
put in place did not defeat a Lucas theory. Unlike in Del
Monte Dunes, the Commission neither attempted to buy the
subject property, nor was Bridge captive to a single buyer
exercising its regulatory power. Moreover, the Commission
thought that reversion would encourage Bridge to sell the
property so that a new developer could make a new proposal,
suggesting that Bridge could have sold the land in a
competitive market with a possibility of a regulatory change.
In the end, the relevant inquiry for us is whether the
land’s residual value reflected a token interest or was
attributable to noneconomic use. See
Palazzolo, 533 U.S. at
631 (concluding that a 93% loss in value was insufficient for
28 BRIDGE AINA LE‘A V. STATE OF HAWAII LAND USE COMM’N
Lucas because the value was attributable to economic use,
specifically residential use); Lost Tree Vill. Corp. v. United
States,
787 F.3d 1111, 1115–17 (Fed. Cir. 2015) (concluding
that the Lucas rule applied to a 99.4% deprivation because
the residual value was attributable to noneconomic uses).
We do not think either situation applies here.
The land’s $6.36 million value in an agricultural use
classification was neither de minimis, nor did the value
derive from noneconomic uses. Bridge’s expert valued the
land in a competitive market using pricing for similarly
situated properties, and expressly accounted for the
possibility of regaining the urban use classification. Lucas
does not apply when “substantial present value” stems from
“future use” of the land. See Tahoe-Sierra Pres. Council,
Inc. v. Tahoe Reg’l Planning Agency,
216 F.3d 764, 781 n.26
(9th Cir. 2000), overruled on other grounds by Gonzalez v.
Arizona,
677 F.3d 383 (9th Cir. 2012). Thus, the land’s
value in the agricultural use classification precludes a Lucas
finding here.
2. The Reversion Did Not Deprive Bridge of All
Economically Viable Uses of the Land
As a secondary matter, the permissible uses of land
classified as agricultural reinforce our conclusion that the
reversion did not completely deprive Bridge of all
economically viable uses of the 1,060 acres as a matter of
law. “[T]he existence of permissible uses determines
whether a development restriction denies a property owner
economically viable use of his property.” Del Monte
Dunes,
95 F.3d at 1432 (emphasis added); Outdoor
Systems, 997
F.2d at 616. “[W]here an owner is denied only some
economically viable uses, a taking still may have occurred”
pursuant to the Penn Central analysis, but not pursuant to the
BRIDGE AINA LE‘A V. STATE OF HAWAII LAND USE COMM’N 29
Lucas rule. Del Monte
Dunes, 95 F.3d at 1432 (emphasis
added).
Hawaii law permits an array of uses for land classified as
agricultural. See Haw. Rev. Stat. § 205-2(d)(1)−(16). 9 In
addition, a landowner may obtain a permit for “certain
unusual and reasonable uses within agricultural . . . districts
other than those for which the district is classified.”
Id.
§ 205-6(a). There are no express limitations on such
specially permitted uses. 10 Against this statutory backdrop,
we do not see how this case is like Lucas. The mere
reclassification of the 1,060 acres from urban use to an
agricultural use did not prohibit all development, nor did it
9
These uses include: (1) crop cultivation activities and uses; (2)
farming activities or uses related to animal husbandry and game and fish
propagation; (3) aquaculture (i.e., the production of aquatic plant and
animal life within ponds); (4) wind-generated energy production for
public, private, and commercial use; (5) biofuel production for public,
private, and commercial use; (6) solar energy facilities; (7) bona fide
agricultural activities and uses that support such activities, including
accessory buildings; (8) wind machines and wind farms; (9) small-scale
meteorological, air quality, noise, and other scientific and environmental
data collection; (10) agricultural parks; (11) agricultural tourism
conducted on a working farm, or a farming operation; (12) agricultural
tourism activities; (13) open area recreational facilities, (14) geothermal
resources exploration, (15) agricultural-based commercial operations
registered in Hawaii; and (16) hydroelectric facilities. See Haw. Rev.
Stat. § 205-2(d).
10
Trial testimony showed that prior examples of specially permitted
uses in an agricultural district included: rock quarrying operations;
cinder and sand mining facilities; concrete batching plants; construction
waste facilities; landfills; public and private sewage treatment plants;
gardens and zoos; schools (pre-kindergarten to college); memorial parks,
including crematoria, commercial facilities, including post offices and
gas stations; private storage facilities; construction yards; maintenance
facilities; and telecommunications facilities and structures.
30 BRIDGE AINA LE‘A V. STATE OF HAWAII LAND USE COMM’N
require leaving the land in an idle state. See
Lucas, 505 U.S.
at 1008.
Although Bridge offered evidence suggesting that many
of the statutorily permitted uses would not have been
economically feasible, Bridge did not address all of the
statute’s permitted uses or account for any of the uses for
which the Commission had granted special permits in the
past, such as a sewage treatment plant or rock quarrying.
Some of the specially permitted uses may have been
especially suitable for this land. Bridge intended to place a
sewage treatment plant on the adjacent 2,000 acres of
agriculturally zoned land. Bridge’s own witnesses also
recognized that the land was “good for growing rocks.”
Based on the evidence that Bridge presented, we do not think
that the jury could have reasonably found that the reversion
deprived Bridge of all economically feasible uses of the
land.
Bridge otherwise draws our attention to the
Commission’s findings in the 1989 and 1991 Orders that the
soils were rated poorly and were not adequate for grazing to
suggest that there were no viable uses in an agricultural use
zone. By definition, however, “[a]gricultural districts
include areas that are not used for, or that are not suited to,
agricultural and ancillary activities by reason of topography,
soils, and other related characteristics.” Haw. Rev. Stat.
§ 205-2(d). Thus, the Commission’s findings are simply not
evidence that the land lacked economically viable uses in an
agricultural classification.
Ultimately, we think that the notion underlying Bridge’s
Lucas theory is that the inability to pursue a particular
development and to obtain its value was a total taking. This
view is unsupported by the law. See Palm Beach Isles
Assocs. v. United States,
231 F.3d 1354, 1364 (Fed. Cir.
BRIDGE AINA LE‘A V. STATE OF HAWAII LAND USE COMM’N 31
2000) (order) (“[M]ost land use restrictions do not deny the
owner of the regulated property all economically viable uses
of it.”); Hoehne v. County of San Benito,
870 F.2d 529,
532−33 (9th Cir. 1989) (“A government entity is not
required to permit a landowner to develop property to the
full extent it may desire. Denial of the intensive
development desired by a landowner does not preclude less
intensive, but still valuable development.”). Accordingly,
we conclude that the State was entitled to judgment as a
matter of law on Bridge’s Lucas theory, and we turn to the
Penn Central analysis.
C. Penn Central Taking
Penn Central requires that we consider: (1) “[t]he
economic impact of the regulation on the claimant,” (2) “the
extent to which the regulation has interfered with distinct
investment-backed expectations,” and (3) “the character of
the governmental
action.” 438 U.S. at 124. Our
consideration of these factors aims “to determine whether a
regulatory action is functionally equivalent to the classic
taking.” Guggenheim v. City of Goleta,
638 F.3d 1111, 1120
(9th Cir. 2010) (en banc) (internal quotation marks omitted).
The first and second Penn Central factors are the primary
factors.
Lingle, 544 U.S. at 538–39. “The outcome [of this
inquiry] . . . depends largely upon the particular
circumstances [in the] case” at hand.
Palazzolo, 533 U.S. at
633 (O’Connor, J., concurring) (quoting Penn
Central, 438
U.S. at 124) (internal quotation marks omitted). When we
apply the Penn Central factors to the trial evidence, we
conclude that the jury could not reasonably find for Bridge.
1. The Reversion Order’s Economic Impact
Our first consideration is the challenged regulation’s
economic impact on the property owner.
Lingle, 544 U.S. at
32 BRIDGE AINA LE‘A V. STATE OF HAWAII LAND USE COMM’N
528. “[W]e ‘compare the value that has been taken from the
property with the value that remains in the property.’”
Colony Cove Props., LLC v. City of Carson,
888 F.3d 445,
450 (9th Cir. 2018) (quoting Keystone Bituminous Coal
Ass’n v. DeBenedictis,
480 U.S. 470, 497 (1987)), cert.
denied.
139 S. Ct. 917 (2019). Although there is “no litmus
test,”
id. at 451, our value comparison again aims “to
identify regulatory actions that are functionally equivalent to
the classic taking in which government directly appropriates
private property or ousts the owners from his domain,”
Lingle, 544 U.S. at 539.
Bridge attempted to show the reversion’s economic
impact by relying on Chee’s valuation testimony and on
testimony regarding the disruption to the sale agreements
between Bridge and DW. We address each in turn.
a. The Valuation Opinion
As we have explained, Chee calculated the fair market
value of the land using the day of the 2009 Voice Vote as the
relevant point at which the land reverted. Chee calculated
the land’s value as $40 million on the day before the vote
and as $6.36 million on the day of the vote. The parties
agree, uncritically, that Chee’s opinion shows that the land
suffered an 83.4% diminution in fair market value. On this
account, the reversion would have resulted in a loss of $33.6
million in the land’s value. We conclude, however, that, as
a matter of law, Chee’s calculation suffers from a number of
defects for the purposes of Bridge’s taking claim.
First, Chee’s valuation opinion did not properly ascertain
economic impact for the purposes of Bridge’s taking claim
because it assumed that the April 30, 2009 Voice Vote
BRIDGE AINA LE‘A V. STATE OF HAWAII LAND USE COMM’N 33
reverted the land. 11 We have already explained that it is not
proper to measure economic impact based on a “hypothetical
economic result” that assumes a state of affairs that did not
exist. See MHC Fin. Ltd. P’ship v. City of San Rafael,
714
F.3d 1118, 1127 (9th Cir. 2013) (rejecting the district court’s
comparison of the effect of a 1999 rent control ordinance
with a “hypothetical economic result assuming that there
was no rent control ordinance in effect at all”). The
reversion did not occur until some two years after the 2009
Voice Vote and thus the vote could not be the proper
reference point.
Second, the vote’s effect on the land’s fair market value
during the ongoing OSC proceedings is not evidence of a
taking. We understand that Bridge could account for what it
contends cast a “dark cloud” over the project by using the
vote as the reference point for its valuation calculation.
Nevertheless, “[m]ere fluctuations in value during the
process of governmental decisionmaking, absent
extraordinary delay, are incidents of ownership. They
cannot be considered as a taking in the constitutional sense.”
Tahoe-Sierra, 535 U.S. at 332 (quoting Agins v. City of
Tiburon,
447 U.S. 255, 263 n.9 (1980)); First
English, 482
U.S. at 320 (same). Chee’s valuation evidence falters for
this reason as well.
11
We observe that it appears that Chee’s calculation of the land’s
value prior to voice vote failed to account for Bridge’s November 2010
deadline to complete the 385 affordable housing units. Chee calculated
the land’s urban value as $40 million based on the “highest and best use”
of “‘land banking’ the property until overall market conditions
improved,” specifically waiting to gauge “the full fallout of the Great
Recession.” Thus, Chee’s highest and best use valuation of the land in
its urban classification also appears to have inflated the land’s value.
34 BRIDGE AINA LE‘A V. STATE OF HAWAII LAND USE COMM’N
Third, even if we assume that Chee properly calculated
the land’s value, the asserted 83.4% diminution in value
substantially overstates the relevant diminution in value
Bridge could have suffered for the purposes of weighing this
factor. See MHC
Fin., 714 F.3d at 1127 (taking issue with
valuation evidence based on a hypothetical state of affairs
but nevertheless assuming it could show economic impact).
“[T]he duration of the restriction is one of the important
factors that a court must consider in the appraisal of a
regulatory takings claim.”
Tahoe-Sierra, 535 U.S. at 342.
When we account for the reversion’s temporary duration, the
resulting relevant diminution is much smaller than 83.4%.
We observe that, consistent with the nature of its
temporary taking claim, Bridge did not attempt to pursue at
trial damages that would reflect the full 83.4% diminution it
asserted. 12 Instead, Bridge sought damages by taking (1) the
diminution in the land’s value attributed to the government
action, (2) multiplied by the time period of the temporary
taking, and (3) further multiplied by Bridge’s rate of return.
Using an overstated taking period from the date of the 2009
Voice Vote to the Hawaii Supreme Court’s November 2014
decision, Bridge asserted that the relevant time period for its
12
In a temporary regulatory taking case, just compensation damages
are modified because “the landowner’s loss takes the form of an injury
to the property’s potential for producing income or an expected profit,”
not the loss of the property itself. Wheeler v. City of Pleasant Grove,
833 F.2d 267, 271 (11th Cir. 1987). In these circumstances, “[t]he
landowner’s compensable interest . . . is the return on the portion of fair
market value that is lost as a result of the regulatory restriction.
Accordingly, the landowner should be awarded the market rate return
computed over the period of the temporary taking on the difference
between the property’s fair market value without the regulatory
restriction and its fair market value with the restriction.”
Id. (citing
Nemmers v. City of Dubuque,
764 F.2d 502, 505 (8th Cir. 1985)).
BRIDGE AINA LE‘A V. STATE OF HAWAII LAND USE COMM’N 35
damages was 5.68 years. Seeking to apply a 10.12% rate of
return to the $40 million valuation, Bridge claimed damages
of $19.54 million. That is a roughly 48% diminution in
value.
More critically, Bridge’s claimed damages still overstate
the relevant diminution in value for the purposes of this
factor. The reversion lasted roughly a year, from the
Reversion Order’s issuance in April 2011 until the Hawaii
state circuit court’s judgment vacating the order in June
2012. 13 See DW Aina Le‘a
Dev., 339 P.3d at 704. When we
account for the reversion’s actual one-year duration,
Bridge’s damages are at most $6.72 million if we use the
higher 20% rate of return that Bridge hoped to receive on its
total investment (an issue we discuss in further detail below).
Bridge’s loss thus amounts to an approximately 16.8%
diminution in value, a number far lower than the 83.4%
figure on which it relied at trial. This economic impact
weighs against the conclusion that the reversion constituted
a taking. See Colony Cove
Props., 888 F.3d at 451
(concluding that a 24.8% diminution was “far too small to
establish a regulatory taking”); Laurel Park Cmty., LLC v.
City of Tumwater,
698 F.3d 1180, 1189 (9th Cir. 2012)
(finding that a “less than 15%” economic loss with respect
to one property and no effect on two other properties “does
not support a takings claim”).
13
Bridge treats the Hawaii Supreme Court’s decision as the decision
that invalidated the Reversion Order. We know of no principle of Hawaii
law that would render ineffective the Hawaii circuit court’s judgment
vacating the Reversion Order. The general rule is that “an appeal does
not vacate the judgment appealed from.” Solarana v. Indus. Elecs., Inc.,
428 P.2d 411, 417 (Haw. 1967). Thus, the circuit court’s judgment is
the relevant end point.
36 BRIDGE AINA LE‘A V. STATE OF HAWAII LAND USE COMM’N
For these reasons, we conclude that the valuation
evidence, properly understood, weighs strongly against a
taking pursuant to the first Penn Central factor.
b. The Disrupted Sale Agreements
Bridge also relied on the disruption of the land sale
agreements between it and DW to show economic impact.
John Baldwin, the CEO of Bridge Capital and Bridge’s
parent company as well as Bridge’s manager, testified that
DW failed to purchase the remaining 1,000 acres for the
$35.7 million price stated in the February 2009 sale
agreement because of the vote. Apparently, the vote affected
DW’s ability to borrow money to finance the purchase.
Baldwin further testified that DW failed to make any more
payments to Bridge pursuant to the modified December 2009
agreement—which retained the same $35.7 million price for
the remaining 1,000 acres—after the OSC’s reinstatement.
There is a fundamental problem with using the claimed
disruptions to the February 2009 and December 2009 sale
agreements as evidence of the Reversion Order’s economic
impact. DW’s contractual default under the February 2009
agreement after the 2009 Voice Vote occurred some two
years before the 2011 Reversion Order. DW’s default under
the modified December 2009 agreement also occurred after
the OSC’s reinstatement in July 2010, several months before
the Reversion Order’s issuance. The Reversion Order thus
could not have caused the contractual defaults that pre-dated
it by several months. See Esplanade
Props., 307 F.3d at 984
(citing
Tahoe-Sierra, 216 F.3d at 783 & n.33) (recognizing
that a regulatory taking plaintiff must establish both
causation-in-fact and proximate causation). Moreover, the
record otherwise shows that Bridge’s focus on the
disruptions to these agreements overstated the reversion’s
impact on its contractual relationship with DW. After the
BRIDGE AINA LE‘A V. STATE OF HAWAII LAND USE COMM’N 37
Hawaii Supreme Court’s decision, DW agreed to pay Bridge
$14 million more than the previously agreed upon $40.7
million to purchase the land. Thus, the contractual defaults
during the reversion’s temporary duration do not affect our
economic impact analysis.
2. The Extent of Any Interference with Any
Reasonable Investment-Backed Expectations
We must consider next “the extent to which the
regulation has interfered with distinct investment-backed
expectations,” Penn
Central, 438 U.S. at 124, that Bridge
had for the 1,060 acres at the time of its acquisition, see
Colony Cove
Props, 888 F.3d at 452; Laurel Park
Cmty, 698
F.3d at 1189. Although this factor raises “vexing subsidiary
questions” about its proper scope and application,
Lingle,
544 U.S. at 539, certain principles guide us.
For one, we must “use ‘an objective analysis to
determine the reasonable investment-backed expectations of
the [o]wners.’” Colony Cove
Props., 888 F.3d at 452
(quoting Chancellor Manor v. United States,
331 F.3d 891,
907 (Fed. Cir. 2003)). Our focus is on interference with
reasonable expectations. See Concrete Pipe &
Prods., 508
U.S. at 646; Ruckelshaus v. Monsanto Co.,
467 U.S. 986,
1005 (1984). “‘Distinct investment-backed expectations’
implies reasonable probability, . . . not starry eyed hope of
winning the jackpot if the law changes.”
Guggenheim, 638
F.3d at 1120 (quoting Penn
Central, 438 U.S. at 124). Thus,
“unilateral expectation[s]” or “abstract need[s]” cannot form
the basis of a claim that the government has interfered with
property rights.
Ruckelshaus, 467 U.S. at 1005 (citation
omitted).
Second, “what is ‘relevant and important in judging
reasonable expectations’ is ‘the regulatory environment at
38 BRIDGE AINA LE‘A V. STATE OF HAWAII LAND USE COMM’N
the time of the acquisition of the property.’” Love Terminal
Partners, L.P. v. United States,
889 F.3d 1331, 1345 (Fed.
Cir. 2018) (quoting Commonwealth Edison Co. v. United
States,
271 F.3d 1327, 1350 n.23 (Fed. Cir. 2001) (en banc)).
“[T]hose who do business in the regulated field cannot
object if the legislative scheme is buttressed by subsequent
amendments to achieve the legislative end[.]” Concrete
Pipe &
Prods., 508 U.S. at 645 (quoting FHA v. The
Darlington, Inc.,
358 U.S. 84, 91 (1958)).
With these principles in mind, we must determine what
reasonable investment-backed expectations Bridge had and
to what degree the Reversion Order interfered with them.
The record shows that Baldwin testified that Bridge
hoped to make annually at least 20% from “the total
investment,” meaning every dollar put into the property. 14
Even if this hoped-for return was reasonable, the reversion
could not have meaningfully interfered with it during the
reversion’s one-year duration. Bridge did not expect any
profit from its purchase of the property unless and until the
Commission amended the 1991 Order’s affordable housing
condition. Bridge also did not expect that an amendment to
the affordable housing condition would translate into
immediate profits. Indeed, Bridge represented to the
Commission that $86 million in initial infrastructure costs
and over $200 million in total development costs had to be
spent before the construction and sale of any housing units
could begin. At the time of the reversion, the project was
14
The district court denied the State’s JMOL motion in part by
relying on evidence that Bridge anticipated receiving a 20% return on its
initial investment. On appeal, Bridge passingly refers to this in the
factual background of its answering brief to the State’s cross-appeal and
does not argue it in its Penn Central analysis. Nevertheless, we address
it here.
BRIDGE AINA LE‘A V. STATE OF HAWAII LAND USE COMM’N 39
nowhere near this level of investment—indeed only sixteen
affordable housing units existed—and thus Bridge could
have had no reasonable expectation of making the 20%
annual return on the total investment at that time.
The State and Bridge largely focus on whether Bridge
could have reasonably expected that the Commission would
amend the 1991 Order’s affordable housing condition
requiring the construction of 1,000 affordable housing
units. 15 Pointing to our distinction in
Guggenheim, 638 F.3d
at 1120−21, between reasonable expectations and
speculative possibilities, both sides find support for the
(un)reasonableness of Bridge’s expectation in the $5.2
million that Bridge paid for the 1,060 acres. We will assume
that Bridge reasonably expected an amendment to the 1991
Order’s affordable housing condition, but we do not see what
it proves. The Commission did not predicate the Reversion
Order on a purported failure to build the 1,000 affordable
housing units that the 1991 Order required prior to
amendment, but instead on the reclassification conditions
that Bridge conspicuously ignores.
Bridge further argues that the jury was entitled to find
that Bridge had a reasonable expectation that the
Commission would not revert the land to its prior zoning for
agricultural use once Bridge purchased the property,
obtained the amendment, and substantially commenced use
of the land. The substantial commencement of use point
stems from the Hawaii Supreme Court’s determination that
DW’s active preparations for the land and completion of
15
The propriety of the Commission’s affordable housing conditions
is not at issue in this case. As Bridge avers on appeal, “the ‘challenged
regulation’ giving rise to Bridge’s takings claim is not the affordable
housing condition in effect when Bridge purchased the Property.”
40 BRIDGE AINA LE‘A V. STATE OF HAWAII LAND USE COMM’N
sixteen affordable housing units by March 2010 was
substantial commencement of use. But again, we do not see
what this proves. Substantial commencement of use did not
eliminate the possibility of reversion; it simply changed the
circumstances pursuant to which the Commission could
exercise its reversion authority. See DW Aina Le‘a
Dev., 339
P.3d at 714.
What we find dispositive are the conditions of the 1989
and 1991 Orders requiring the landowner to substantially
comply with representations made to obtain reclassification.
The 1991 Order made clear that the Commission might issue
an OSC why the land should not revert for failure to
substantially comply with representations made to obtain
reclassification. Hawaii law expressly authorized the
Commission to impose this condition, and such conditions
ran with title to the land. Haw. Rev. Stat. § 205-4(g).
Critically, the substantial compliance condition turned on
the landowner’s own representations to the Commission.
Bridge expressly committed to build 385 affordable
housing units as a part of the amendment to the order
governing the land’s conditional urban use classification.
Based on Bridge’s representations to the Commission, the
2005 Order required Bridge to build these units by
November 2010. At no point in arguments before us does
Bridge acknowledge this deadline, let alone Bridge’s and
DW’s repeated representations to the Commission as part of
seeking the OSC’s rescission that they would complete the
385 affordable housing units.
The operative conditions in place at the time of the OSC
and the Reversion Order, and Bridge’s failure to meet them,
dispel the notion that Bridge could reasonably expect that the
Commission would not enforce the conditions. See MHC
Fin., 714 F.3d at 1127–28 (finding that plaintiff could not
BRIDGE AINA LE‘A V. STATE OF HAWAII LAND USE COMM’N 41
satisfy this factor in the context of challenging a 1999 rent
control ordinance because the plaintiff “had even less reason
to expect that the rent control regime would disappear
altogether” given a prior 1993 rent control ordinance in
effect when plaintiff bought its property). The Commission
properly issued the OSC based on the suspicion that Bridge
would not meet the conditions. See DW Aina Le‘a,
Dev.,
339 P.3d at 713 (“The [Commission] did not err in issuing
the OSC. Bridge and DW do not contend otherwise.”
(citation omitted)). And, in fact, Bridge did not complete the
385 affordable housing units by the deadline to do so, which
lapsed several months before the Reversion Order’s
issuance. Thus, we do not see how the Reversion Order
interfered with any reasonable expectations that Bridge
could have formed regarding enforcement or reversion.
Accordingly, we conclude that, as a matter of law, this factor
weighs strongly against finding a taking.
3. The Character of the Government’s Action
Finally, we consider the Reversion Order’s character.
“[T]he character of the governmental action—for instance
whether it amounts to a physical invasion or instead merely
affects property interests through some public program
adjusting the benefits and burdens of economic life to
promote the common good—may be relevant in discerning
whether a taking has occurred.”
Lingle, 544 U.S. at 539
(internal quotation marks omitted). The government
generally cannot “forc[e] some people alone to bear public
burdens which, in all fairness and justice, should be borne by
the public as a whole.”
Id. at 537 (quoting Armstrong v.
United States,
364 U.S. 40, 49 (1960)). Even if this factor
weighs in favor of finding a taking, this factor is not alone a
sufficient basis to find that a taking occurred. See Laurel
Park
Cmty., 698 F.3d at 1191.
42 BRIDGE AINA LE‘A V. STATE OF HAWAII LAND USE COMM’N
The district court concluded that Bridge’s evidence
provided the jury with an ample basis to find for Bridge on
this factor. The court reasoned that the Reversion Order’s
effect was concentrated because it directly affected the
owners of the 1,060 acres. The court also reasoned that
credible testimony showed that the Commission intended to
cause Bridge to sell the property. In addition, the court
observed that the “decision to revert the Property’s
classification was the first time in the [Commission’s] 50-
year history that it had taken such action,” and that the
Hawaii Supreme Court ultimately invalidated the reversion.
Much of this evidence was insufficient to establish that this
factor weighed in Bridge’s favor.
For one, we recognize that government action that
singles out a landowner from similarly situated landowners
raises the specter of a taking. See
Lingle, 544 U.S. at 542–
44. The concentrated effect of the reversion here, however,
was reflective of the confines of a generally applicable
Hawaii law land use reclassification procedure. See Haw.
Rev. Stat. § 205-4(a) (permitting a landowner to petition).
We cannot find in this generally applicable scheme that this
factor weighed in Bridge’s favor.
Second, the Hawaii Supreme Court’s invalidation of the
reversion as a matter of Hawaii statutory procedural
requirements does not carry the constitutional significance
that either Bridge or the district court ascribed to it. The
reclassification history is critical to the reversion challenged
here. See Buckles v. King County,
191 F.3d 1127, 1139 (9th
Cir. 1999) (observing that a taking claim must be considered
“‘in light of the context and . . . history’ of the land use
decisions related to [the] property.” (ellipsis in original)
(quoting City of Monterey v. Del Monte Dunes at Monterey,
Ltd.,
526 U.S. 687, 721 (1999))).
BRIDGE AINA LE‘A V. STATE OF HAWAII LAND USE COMM’N 43
As the Hawaii Supreme Court observed when it rejected
Bridge’s assertion that the Commission violated Bridge’s
substantive due process rights, the “reversion was not
‘clearly arbitrary and unreasonable,’ given the project’s long
history, the various representations made to the
[Commission], and the petitioners’ failure to meet
deadlines.” DW Aina Le‘a
Dev., 339 P.3d at 689, 717. The
court otherwise acknowledged that, despite their repeated
assurances to the Commission that they would complete the
385 affordable housing units by November 2010, “Bridge
and DW did not satisfy the affordable housing condition, and
did not comply with numerous other representations made to
the [Commission].”
Id. at 717. The Hawaii Supreme
Court’s rejection of Bridge’s equal protection challenge
echoed this reasoning.
Id. at 718. The same underlying
history blunts the force of Bridge’s assertion that the
reversion’s character established a taking.
4. The Balance of the Penn Central Factors
Although we construe the evidence in the light most
favorable to the jury’s verdict, we conclude that no
reasonable jury could find that Bridge’s evidence satisfied
the Penn Central test. Even if we assume that the character
of the government’s action weighs in favor of finding a
taking, the first and second factors weigh decisively against
such a finding. Because Bridge’s own evidence established
a diminution in value that is proportionately too small and
because the reversion did not interfere with Bridge’s
reasonable investment-backed expectations for the land, no
reasonable jury could conclude that the reversion effected a
taking pursuant to the Penn Central analysis.
44 BRIDGE AINA LE‘A V. STATE OF HAWAII LAND USE COMM’N
D. The Outcome of the Taking Liability Analysis
Our analysis of Bridge’s taking theories requires us to
reverse the district court’s denial of the State’s renewed
JMOL motion. Bridge’s evidence could not establish that a
taking occurred pursuant to either Lucas or Penn Central.
Thus, the district court should have granted the State’s
motion. We vacate the judgment for Bridge and the nominal
damages award and remand with instructions for the district
court to enter judgment for the State. As a consequence of
this determination, we need not address any other taking
issues the parties raise on appeal.
II. The Dismissal of Bridge’s Equal Protection Claim
Next, we must determine whether the Hawaii Supreme
Court’s decision in Bridge’s agency appeal barred Bridge’s
equal protection claim in this case. Hawaii law governs
whether we afford preclusive effect to the Hawaii Supreme
Court’s decision. See Hiser v. Franklin,
94 F.3d 1287, 1290
(9th Cir. 1996) (“[A] federal court must give to a state-court
judgment the same preclusive effect as would be given that
judgment under the law of the state in which the judgment
was rendered.” (quoting Migra v. Warren City Sch. Dist. Bd.
of Educ.
465 U.S. 75, 81 (1984))). Thus, if Hawaii law
precludes Bridge from litigating the equal protection claim
in state court, then Bridge cannot pursue the same claim
here. Caldeira v. County of Kauai,
866 F.2d 1175, 1178 (9th
Cir. 1989).
Pursuant to Hawaii law, the “judgment of a court of
competent jurisdiction is a bar to a new action in another
court between the same parties or their privies concerning
the same subject matter.” Santos v. State Dep’t of Transp.,
646 P.2d 962, 965 (Haw. 1982) (per curiam). A judgment
BRIDGE AINA LE‘A V. STATE OF HAWAII LAND USE COMM’N 45
has preclusive effect pursuant to the doctrine of issue
preclusion if four requirements are met:
(1) the issue decided in the prior adjudication
is identical to the one presented in the action
in question; (2) there is a final judgment on
the merits; (3) the issue decided in the prior
adjudication was essential to the final
judgment; and (4) the party against whom
[issue preclusion] is asserted was a party or
in privity with a party to the prior
adjudication.
Bremer v. Weeks,
85 P.3d 150, 161 (Haw. 2004) (alteration
in original); see also Dorrance v. Lee,
976 P.2d 904, 909
(Haw. 1999).
The district court determined that all requirements were
met. Bridge disputes the first and second requirements and
further argues that it did not have a full and fair opportunity
to litigate its equal protection challenge in the agency appeal.
We reject each argument in turn.
A. Identical Issues
We can find no material difference between the equal
protection issue Bridge raised in the agency appeal and the
one raised in this suit. In the agency appeal, Bridge asserted
that the Commission violated its equal protection rights
because the Commission did not treat other developers the
same way it treated Bridge. In its complaint here, Bridge
alleged that the Commission lacked a rational basis to treat
Bridge differently than it treated other developers. These are
undoubtedly the same issue. Bridge’s further contention that
the Hawaii Supreme Court decided only whether the
Commission had a rational basis to enforce the
46 BRIDGE AINA LE‘A V. STATE OF HAWAII LAND USE COMM’N
reclassification conditions ignores that the court determined
that any differential treatment did not lack a rational basis.
See DW Aina Le‘a
Dev., 339 P.3d at 717–18.
Furthermore, we disagree with Bridge that Hawaii law
requires the availability of identical remedies in both
proceedings for an earlier judgment to have preclusive
effect. In Citizens for the Protection of the North Kohala
Coastline v. County of Hawai‘i,
979 P.2d 1120 (Haw. 1999),
the Hawaii Supreme Court decided that issue preclusion did
not bar the suit there because different standards governed
the issue of standing to challenge an agency action pursuant
to different Hawaii statutory provisions. See Tax Found. of
Haw. v. State,
439 P.3d 127, 149 (Haw. 2019) (“[I]n
Citizens, we pointed out the difference between standing
requirements for HRS § 91-14 agency appeals and HRS
§ 632-1 declaratory judgment actions[.]”). The court
observed that the statutory provisions provided different
forms of relief to bolster the conclusion that issue preclusion
did not bar the later suit, not to fashion a new identical
remedies requirement for Hawaii issue preclusion law. See
Citizens for the Protection of the North Kohala
Coastline,
979 P.2d at 1128 (citing Pele Def. Fund v. Puna Geothermal
Venture,
881 P.2d 1210, 1216 n.13 (Haw. 1994) (further
explaining that in a § 91-14 agency appeal, “the court only
has power to grant relief in accordance with HRS 91-
14(g)”)). Thus, we reject Bridge’s challenge to the identical
issue requirement.
B. Final Judgment on the Merits
We also reject Bridge’s contention that the Hawaii
Supreme Court’s decision was not a final judgment on the
merits. Insofar as the decision concerned Bridge’s federal
equal protection rights, the decision became final when the
time expired for Bridge to seek review by the United States
BRIDGE AINA LE‘A V. STATE OF HAWAII LAND USE COMM’N 47
Supreme Court. See E. Sav. Bank, FSB v. Esteban,
296 P.3d
1062, 1068 (Haw. 2013); see also 28 U.S.C. § 2101 (setting
90-day time period within which to file a writ of certiorari
with the United States Supreme Court). We are not aware of
Bridge ever pursuing any such appeal.
Contrary to Bridge’s view, the Hawaii Supreme Court’s
remand for further proceedings consistent with its opinion
does not render the judgment nonfinal. The Hawaii Supreme
Court expressly vacated the circuit court’s judgment on the
issue of equal protection, and remanded for the circuit court
to effectuate that vacatur. That remand could not have
resulted in a different resolution of Bridge’s equal protection
challenge because no issue of law or fact regarding that
challenge remained unresolved. See Robinson v. Ariyoshi,
658 P.2d 287, 297 (Haw. 1982). Moreover, Bridge has never
identified any further agency appeal proceedings in the more
than five years since the Hawaii Supreme Court’s judgment.
Thus, the court’s decision was a final judgment on the
merits.
C. Full and Fair Opportunity to Litigate
As a final matter, we consider whether Bridge lacked a
full and fair opportunity to litigate its equal protection
challenge in the agency appeal. Federal courts will not
afford preclusive effect to a prior state court judgment if the
party lacked a full and fair opportunity to litigate the issue
on the merits. See Allen v. McCurry,
449 U.S. 90, 101
(1980); Ross v. Alaska,
189 F.3d 1107, 1112–13 (9th Cir.
1999). 16 “[N]o single model of procedural fairness, let alone
16
This parallels a requirement of Hawaii issue preclusion law,
pursuant to which the plaintiff must have had a full and fair opportunity
48 BRIDGE AINA LE‘A V. STATE OF HAWAII LAND USE COMM’N
a particular form of procedure, is dictated by the Due Process
Clause.” Kremer v. Chem. Constr. Corp.,
456 U.S. 461, 483
(1982). Instead, “‘state proceedings need do no more than
satisfy the minimum procedural requirements of the
Fourteenth Amendment’s Due Process Clause in order to
qualify for the full faith and credit guaranteed by federal
law.’”
Ross, 189 F.3d at 1112 (quoting
Kremer, 456 U.S. at
481). The proceedings at issue here met that standard.
Bridge contends that it lacked a full and fair opportunity
to litigate its equal protection challenge in the agency appeal
because the Hawaii Supreme Court excluded from the
evidence the dockets from the Commission’s proceedings
involving other property owners on which Bridge sought to
rely to show differential treatment. DW Aina Le‘a
Dev., 339
P.3d at 689, 714–15. Bridge did not lack the opportunity to
present this evidence, but instead failed to properly introduce
this evidence into the agency appeal record.
Id. at 715 &
n.18 (finding that Bridge and DW failed to request judicial
notice). Bridge’s failure to do so does not undermine the
judgment’s fairness. See
Kremer, 456 U.S. at 483, 485
(having “little doubt” that the state’s procedures were
constitutionality sufficient and concluding that the plaintiff’s
“fail[ure] to avail himself of the full procedures provided by
state law does not constitute a sign of their inadequacy”).
It is otherwise clear that Bridge received a full and fair
opportunity to raise the equal protection challenge in the
agency appeal. Bridge raised, briefed, and argued the
challenge during the proceedings before the Commission
and on appeal before the circuit court and defended the issue
before the Hawaii Supreme Court. See DW Aina Le‘a Dev.,
to litigate the relevant issue on the merits in the earlier case.
Dorrance,
976 P.2d at 911; Foytik v. Chandler,
966 P.2d 619, 627 (Haw. 1998).
BRIDGE AINA LE‘A V. STATE OF HAWAII LAND USE COMM’N
49
339 P.3d at 689, 704–06, 717–18. Bridge thus received a
full and fair opportunity pursuant to both Hawaii law and the
federal exception to issue preclusion. See
Ross, 189 F.3d at
1112–13 (finding that the plaintiff received a full and fair
opportunity to litigate an issue in a prior Alaska state court
proceeding when the plaintiff was able to raise as well as
fully brief and argue the issue);
Dorrance, 976 P.2d at 911
(making a similar finding under Hawaii law). We therefore
affirm the district court’s issue preclusion ruling that bars
Bridge from re-litigating the equal protection issue in this
case.
With no remaining viable claims, it is unnecessary for us
to address Bridge’s appeal from the district court’s dismissal
of the individual capacity claims Bridge raised against the
commissioners who voted to revert. Trans-Canada Enters.,
Ltd. v. Muckleshoot Indian Tribe,
634 F.2d 474, 476 n.2 (9th
Cir. 1980) (declining to address judicial immunity “[i]n view
of our holding that no claim for federal relief” existed).
CONCLUSION
The district court erred in denying the State’s JMOL
motion because Bridge’s evidence did not establish a taking
pursuant to either Lucas or Penn Central, and we reverse the
denial. Consequently, we vacate the judgment for Bridge on
the taking claims and remand with instructions for the
district court to enter judgment for the State. We affirm the
dismissal of Bridge’s equal protection claim. We decline to
address all other issues raised on appeal as unnecessary.
AFFIRMED IN PART, REVERSED AND
VACATED IN PART, and REMANDED with instructions
to enter judgment for Defendants-Appellees/Cross-
Appellants. Costs are awarded to Defendants-
Appellees/Cross-Appellants.