 Mark Coleman, I'm Mark Coleman, and I'm the co-host today of Talking Tax, our bi-weekly show here on Think Tech Hawaii, where we talk with Tom Yamachika, president of the Tax Foundation of Hawaii, about issues of concern locally. And our topic this week has to do with the recently resolved Kalima versus State case. That is a long-running case that Tom recently wrote about for his column that is posted on the website at the Tax Foundation of Hawaii, and also published in newspapers statewide. So the case essentially involved a long-running claim against the Department of Hawaiian Homelands by a class, it was a class action suit, and it took decades. And they finally resolved it in 2022. These people were alleging, thousands of Hawaiian, native Hawaiians were alleging that the State, the Department of Hawaiian Homelands, was not meeting its fiduciary responsibility to provide them homesteads on DHHL lands under the 1920, I think it was. Hawaiian Homes Commission Act of 1920. So Tom wrote about this, there was a, the actual title of his article was called Upsetting the Apple Cart in the 24-year, in 24-year-old litigation. It had to do with a one claimant filing, he actually submitted a letter at the very last minute before all the money was supposed to be handed out to the claimants. They had ruled in their favor and they were supposed to all get some money. But he filed, and when he found out he was only going to get zero, nothing, he filed a letter with the court and was disputing his situation. And that threw the thing into, upsetting the Apple Cart, as Tom said. So Tom, I'm curious, and then as you point out in your article, Tom, the Supreme Court jumped in in October and ruled that Mr. Rivera, Ricky Rivera's claim to be owed something didn't have any standing because he was too young at the time that he filed the claim. So what was exactly your issue that the Supreme Court ruled throughout his case, they said he had a right to file that, but that basically he'd had no, he didn't win. So now everybody's going to get their money. And I was curious, why you wrote about it, was it the hold up because of that one letter or was it more the general issue that this case has taken so long? Well, it's kind of both of those things, but I think it is very instructive that you have something that people, many, many people have worked on for many, many years. And depending on how people approach it, it can all be upset by just one person. And let me kind of give you some background on what's going on here. As you correctly pointed out, this is a class action. It was filed in 1999, before the turn of the century, by a number of beneficiaries in the Native Hawaiians who under our statehood act in the Hawaiian Homes Commission Act, which is a federal act in 1920, the fed seated them, seated some lands to be distributed to Native Hawaiians for various purposes. And there's been a problem getting that land to these people. It's taken decades, and people have literally died while on the waitlist. It's been a huge problem over several years. And earlier this year, we thought that this travesty was going to finally come to an end when the state and the beneficiary class reached a settlement. And the judge presiding over the case was really happy about it. And she had a hearing to basically consider the fairness of the settlement, and of course would take anybody's input into consideration when grueling on the fairness of the settlement. And this is basically how class actions work. Well, what happens is somebody files a claim early in the litigation that we start by people who call themselves class plaintiffs. They file a suit on behalf of themselves and other people. And basically the first major part of the litigation is establishing the class that these people represent. So it can be like a suit against a company for securities fraud. It can be a suit against a telephone company for allegedly leaking personal information where it shouldn't have gone. There are all kinds of cases where class actions can be brought. And once the court certifies the class, which means they say, okay, this is not a lawsuit involving just the particular plaintiffs who brought the action, but for a whole class of people who are described in the class certification order. It then becomes a vehicle for anybody who is within the class to share in the lawsuit and in the relief, if any, that's then brought against or that's paid. So typically you have class actions where individual people may get less than 100 bucks each, but there's millions of them. So those settlements still tend to make news because they're multimillion dollars once everybody's added up. So this was one of them. This is a typical class action suit, but again it goes back to 1999. And it's definitely before many of us who are involved in the reporting in this case were even born. Not me of course, but yeah. So we go through the process and I think it's important to understand how the process works for people who are considering class actions or have been a part of class actions. Once the class is certified, the court sends notice to everybody who's in the class and they have then the right to opt out if they want to and bring a lawsuit themselves or stay with the class and participate in the relief that is offered to the class. Now that is usually for people who have small claims, it's a lot more resource-efficient because you don't need a lawyer. The lawyer is basically hired by the class and yeah, the lawyer is getting some major bucks, but it's millions of claims or at least not millions, but claims too numerous to deal with individual suits. I mean here we had a class of 2,500 beneficiaries at the time the litigation started. So it was still a kind of a big number. And like I said, the class and the state were about to reach a settlement, $320 million, they agreed upon earlier in the year and the judge held a hearing on the fairness of the settlement, notice of which was given to all class members and she approved the settlement, which means that it was okay for beneficiaries to start getting their money, okay, but then this happened. And what I mean by this is that a single person wrote a letter and his name was Ricky Rivera. He wrote a letter saying, I wish to file an appeal before the deadline of August 31st, 2023. The appeal is limited to the issue of special master and claim administration failing to process my claim in a timely fashion. That's all the letter said, he signed his name. So like the judge and the attorneys looking at that saying, what the heck is this? And they didn't really quite know how to deal with it. So the judge did something what I thought was fairly reasonable and said, okay, let's have a hearing and invite this guy and figure out what he really wants. And at first it seemed that everybody's going to go along with it. But then the state suddenly changed its mind and said, no, no, you can't do that. Because the letter says it's an appeal. And when an appeal is filed, the appellate court has to sort things out. And the trial court loses jurisdiction. So everything at the trial court must stop is what the state said. And this kind of annoyed the judge to no end. Because, yeah, I mean, yeah, it's a person who didn't have a lawyer. It's not a notice of appeal and proper form. But what you got to give some leeway to people who aren't lawyers. And so here's what the judge said about it. If any case demands that counsel bring to bear the full measure of their experience, expertise, and talents to develop and consider strategies for thoughtful, constructive, creative, and legally competent resolution short of disposition by the appellate court is this one. The state sees otherwise, even though the state cannot articulate any real-world risk in the distribution of settlement proceeds short of withdrawal of the letter or disposition by the appellate court. Ultimately, however, it's the state's refusal to advise this court if it would initiate its own appellate action if the court ordered the transfer of funds, thereby even further delaying the class member's receipt of those funds, that ensures there will be no resolution at this stage. In light of the state's just announced objection and it's refusal to disclose what action it might take thereafter, the risk of even more delay is too significant to move forward. So in your article that you were pretty pessimistic, I think you wrote this before the Supreme Court ruled initially, and then you were kind of upset about now it's going to take forever. Apparently, it already took this long. Now we're going to have to go through more and more. So you were calling the state's position intractable. Were you surprised? How quickly things rolled after that? I was surprised. I mean, usually appellate cases in the Hawaii system take years. How do you think it occurred that it moved up so quickly to the Supreme Court? Do you think people were talking about it and we got to get this over with? That may be. I'm not really sure how the Supreme Court got wind of it, but it's a good thing that they did. The Supreme Court jumped in and basically said, look, the class here is limited to those people who could have filed Homestead Claims as of a certain date, and Mr. Rivera was 17 at the time. So he couldn't have filed any claim. You have to be 18 or older. You know, it sounded like he, I was reading the documents or some of them anyway, it sounded like he actually, maybe I'm wrong, but it sounded like he was a claimant and he didn't act until he, I think they must have informed all the beneficiaries or the winners of the suit, the class action plaintiffs, how much each of them were going to get. And when he saw he was going to get nothing, that's when he filed his appeal. Does that make sense? That may be. Yeah. But you know, if he was. But that wasn't the only letter he wrote. I mean, he wrote other letters to the appellate court and stuff like that. The Supreme Court's opinion refers to some of those. And then the idea that he was just so, you know, hey dude, you're not old enough. You weren't legally qualified to be a plaintiff from the very beginning. How come, how could he, why would he go to the trouble to dispute that? I mean, if it was so quickly disposed of, what was, I don't even understand why it got that far. What do you think? Well, I think there was probably a lack of understanding as to what the qualifications were to be in the suit. He thought, well, look, I'm native Hawaiian. Therefore I'm entitled to be in this, you know, which is, you know, perhaps a reasonable assumption. Yeah, it made me wonder that, you know, now that they've gotten that cleared up, the Supreme Court ruled that his case is put aside and now they can go ahead and distribute the money. As you mentioned, there was 5,000. Was it 30? What was the number? How many people were in that lawsuit? A couple thousand, a couple thousand. 3,000 and a bunch of them already died. Over a thousand died already or more. But what about claimants who, what about others that are still on the list? I mean, there's, those people got money for having to wait for years to get their homesteads and probably many of them never did. And so that must have been the basis of their claims that we're not getting the money, but we're owed something. And we're not getting the land, but so we're owed something. That was basically what they're saying. And then the state said, the court said, okay, yeah, you guys are owed some money for your troubles of waiting. You should have had something all along. But since you've had to wait and the ruling said that here's your money now, we're released of all the claims against the state. You know, you can't sue us again. But does that mean they're not on the list anymore? They're not going to get any land? Or what does that mean? Do you think? Well, I think there's a long process that's kind of being followed to get homestead lands ready for people to live on. I mean, right now, I don't know if you were aware of this, but many of the homestead lands are in fairly inaccessible places mountains, cliffs and that kind of thing. For people to actually live on them, you have to get some basic infrastructure in there like water, power, sewage. That's always been the excuse. And I guess we could get into that. When they set up this thing, when they originally started, there were 24,000 native Hawaiians. I'm trying to look for that note I wrote here. And now there's, and at the time, there we go. And now there's 27,000, I think. I think it's actually more. And there's still 10,000 people on the list. Let's see. Okay, in 1921, there were 24,000 people that qualified under the act. And now there's 10,000 beneficiaries on Hawaiian homestead lands and another 27,000 on the wait list. There's 27,000 people. So there's 37,000 people, I guess, total considered to be native Hawaiians. So yeah, your point about what's taken, it's been 100 years. And these people, and they still don't have all the Hawaiians on the land. I wonder what, you know, what's the holdup? The excuse I keep hearing is that, well, we don't have the infrastructure. And they've got to build them to build the home. They've got to have the water lines and the power lines. But I think I might be mistaken, but I think the original idea was to just give the land to the Hawaiians and let them figure it out. If they need water, maybe that would be an incentive to figure something out. I don't know, but if you have to wait for the Department of Homeland to do this, and instead of letting them just live on the land and figure it out, they're at least... Well, I think they've rejected, just give them raw land as an option. I think they came to the conclusion some time ago that they have to provide basic infrastructure. Then their defense over several decades has been, oh, we have permitting delays. We couldn't build on it even if we wanted to. And with the permitting situation that we have here on many of the islands, that doesn't sound like it's a lie. No, I've heard too when I was doing a little research on it way back when that one issue was that sometimes they would award land to certain people and the people would say, oh, no, I really don't want that parcel. And so they'd go back on the list to wait for a better one. That might be, I'm not really sure. So what it sounds like with this case is that the state basically is giving people money instead of making them wait forever to get the land. Does that hint that maybe a solution for the remaining people that are on the wait list? Why not give all of those folks an option like this as well? Well, I mean, they've been trying to do other creative things as I understand, like giving them mortgage assistance or rental assistance, even if they're not on homestead land. Because part of the deal was that, yeah, they get a parcel, but it's got to be in homestead land. And there are designated tracts where this is supposed to happen. Right. But like I said, some of these tracts are not accessible and it's going to take some work to make them accessible and make them fit for human habitation. Well, they got $600 million a year or two ago and then another huge amount of money. They've gotten a lot of money lately. And now I suppose the state will have to cough up $328 million more to pay off this settlement. Where does this all end? When they do what the defense has told them to do. I mean, but do you think that it would be better to just kind of work out something with the claimants, like divide the land and put it in their hands and let the individual claimants divide it up somehow and just be done with it? I don't know if that's even an option. Right. I mean, there's this federal process to be followed. I mean, not federal process, but process defined by the 1920 federal law. Well, my other thought is that now we have probably a whole new class of claimants and somebody else could file a lawsuit and we could do this all over again. It could take another 40 years, right, to figure this one out or 30 years. Well, maybe more. One of the things that we have been complaining about in the past was that we've looked at Department of Hawaiian homelands and they get money from like the federal government every year and they don't spend it. They had Native Hawaiian block grants under a federal program that was especially created for Native Hawaiians. They had been getting like maybe, I think, $15 million a year and they couldn't spend it down. The excuse they gave at the time, what they told the legislature was, well, we can't get the permits. So we can't construct. And that went on for a while and then finally the legislature said, all right, heck with this. And by the way, there have been allegations of systematically underfunding GHHL for years, if not decades. So I think that was one of the issues in the suit. And ultimately, they got to do their jobs. The state has to do their job. That has been tasked with back to statehood and before. Well, I know we were going to essentially talk about the Kalima case. We are talking about the Kalima case. But specifically about that, we went broader focus here with the DHHL's mission. When you say, well, they just got to do their job, what is, how do they do it? How can they do it? They've had 100 years. I just think it's a broken system period. I think they ought to go, what I think maybe doesn't really matter, but my preference would be to see these people just be given the land, let them homestead it, become fee simple owners. But it just seems to me like there's an interest in keeping them as wards of the state, the native Hawaiians. It seems like that to me. And we're just going to be in for more and more of this bureaucratic delay for another century. With more claimants, more people dying on the waiting list and so on. Was that the broader message? What was the broader message of your article about the Rivera-Applicard issue? One thing I think that we have to be really wary of is if you are hyper-focused on procedure, and it seems like the attorney generals here were, that it's very easy for a good, if perhaps maybe a little bit misguided effort, to get into a real pickle really quickly. So I think it behooves all of our civil servants and government officers and so forth to try and look at practicalities, to try to come up with solutions to problems instead of saying, oh no, the process doesn't work. So we got to stop right here because what they did. Well, work together, huh? Let's all work together. As we say at the Grassroots Institute. That's right. Where I work. Well, thank you very much, Tom. This has been a great discussion about pretty arcane subject. Any last word? Well, like I said, I hope that this settlement will be done quickly and that cooler heads will prevail and kind of further, you know, the further mission of the Department of Foreign Homeland. Right on. Well, thank you very much, Tom, and enjoying being here with you again. And thank you very much for all our viewers for being here. I hope you learned something today and had a good time watching. Hope to see you again. Aloha.