Plaintiff Leona Kalima said homeownership helps you improve "your stance in life" and had she been awarded a lease "way back," she said, "I could have probably afforded to send my children to college." With her, from left, are plaintiffs Raynette Nalani Ah Chong, whose father, another plaintiff, died in 2001 awaiting resolution to the 10-year-old case, and Irene Cordeiro-Vierra, who at 82 years old, says she's too old and sickly to accept a homestead from DHHL. - Photo: Lisa Asato

By Lisa Asato / Ka Wai Ola Loa

Breaches of trust by the state and the state Department of Hawaiian Home Lands led to delays in homestead awards for 2,700 Native Hawaiian plaintiffs between statehood and 1988 and the state must pay a to-be-determined amount of monetary damages for out-of-pocket expenses incurred as a result, a state judge ruled on November 3.

"We're extremely grateful for the judge's ruling," Carl Varady, a plaintiffs attorney, said November 4 at a press conference, where he was joined by six plaintiffs in the class-action suit, including Raynette Nalani Ah Chong, who is awaiting an award after applying for a homestead in 1985 and whose father, Joseph Ching, was among the about 300 plaintiffs who died waiting for a resolution to the decadelong court case. Varady added, "These clients and these beneficiaries have waited for much too long and we hope that we can promptly resolve the damages claims so we can move on and have our final step toward a just adjudication of these claims."

Plaintiffs attorney Thomas Grande said this is the first court ruling to find the state liable for breaches of trust in failing to award homesteads in a timely manner. Both attorneys declined to specify what the damages might total.

First Circuit Judge Eden Hifo said in her decision in the 1999 Kalima v. state case that the plaintiffs proved by "clear and convincing evidence" breaches of trust that caused eligible Native Hawaiians to not be placed on the land – which itself is a further breach of trust.

Hifo said breaches of trust include not taking an inventory of lands, not maintaining proper financial records which among other things prevented DHHL from taking advantage of revenue bonds, and not acting to ensure the return of 29,000 acres of land, or "set asides," which had been removed from the trust for government entities and private individuals, most before statehood in 1959.

At the same time, Hifo said the state's failure to appropriate general funds or authorize general obligation or revenue bonds "is not itself a breach of trust." Her decision found that funding the trust is "distinct from the duty to manage the trust in a manner that protects trust assets and the ability to make the trust assets productive."

It is unclear whether the state will appeal. DHHL deferred comment to the state attorney general's office, which released a statement saying: "The state is reviewing the decision to determine the appropriate next steps."

Varady described DHHL's application and award processes during the period from 1959 to 1988 as "really hamajang."

"People's applications were getting lost, people who applied earliest were getting awards latest," he said. "You're looking at many people who spent the productive years of their lives waiting for a homestead award, and many of them applied during that period of time."

He said had they received awards in a timely manner, "they would be in a position to be handing down their homesteads to their children or their grandchildren."

At the press conference, four plaintiffs briefly shared their personal experiences with DHHL. Leona Kalima, who was adopted and whose 1972 application was thwarted by not being able to prove her required 50-percent ancestry for eligibility, even though, she said, DHHL already had her adoption records and thus proof of her ancestry but "couldn't and wouldn't help me out." Kalima, who could verify her eligibility by 1983, said now that she is a homeowner with her daughter she can see how that is an asset which helps you improve credit scores, get loans and improve "your stance in life."
"To be able to have had that way back … I could have probably afforded to send my children to college," said Kalima, who in the 1990s lived in a $1,000-a-month two-bedroom apartment with her husband and four children.

Varady said Hifo's ruling would not change the way DHHL operates today; rather, it vindicates past wrongs. He said DHHL today is much improved largely due to Act 14, which in 1995 provided DHHL a $600 million settlement over 20 years to restore the trust. "I want to be very careful to acknowledge the fact that it's doing so much better," he said. DHHL built an average of 71 homesteads a year during the period 1959 to 1988; today it builds 481 homesteads a year, Grande said.

Grande said the next step is for the court to determine the amount of damages that each client suffered, which, among other things, could mean payments made for rent or mortgage they wouldn't have had to pay if they had a homestead. The Nov. 3 decision suggested that a special master be appointed to determine individual damages, but Grande said they are also hopeful "that we can come up with a classwide measure of damages that will apply to everyone equally and expedite the damage-evaluation process."

The lawsuit was filed in 1999 after the state shut down an administrative panel it had created in 1991 to compensate beneficiaries for their losses resulting from delays in receiving homestead awards, plaintiffs attorneys said. The state had appealed the case to the state Supreme Court, which ruled that claims could be brought under state law created to remedy these claims and remanded the case to the lower court, they said.

The federal Hawaiian Homes Commission Act was passed in 1921 to help rehabilitate Native Hawaiians and support their self-sufficiency through homestead awards for homes, agriculture, ranching and other purposes. The state became trustee upon statehood in 1959.