Ka Wai Ola - Office of Hawaiian Affairs, Volume 23, Number 7, 1 July 2006 — High court favors OHA in taxpayer case [ARTICLE+ILLUSTRATION]

High court favors OHA in taxpayer case

Ruling likely means dismissal of Arakaki 'race-based' benefits suit

By Derek Ferrar Public lnformation Specialist The U.S. Supreme Court has issued a ruling that appears to favor the Office of Hawaiian Affairs in the longrunning suit that challenges the agency's programs benefiting Native Hawaiians as being racially discriminatory. In a brief statement issued on lune 12, the court invalidated an appeals court's earlier decision that the plaintiffs, as state taxpayers, could challenge the tax-revenue funding that the state gives to OHA. Instead, the high court said the lower court must reconsider its ruling in light of a recent Ohio case, in whieh the Supreme Court ruled that taxpayers do not have the right to sue over how a state allocates its

tax funds. The court's announcement in the Amkaki case stated that new Chief Iustice lohn Roberts did not vote in the decision, without saying why. In 2000, Roberts, acting as a private attorney, represented the state in the Rice v. Cayetano suit, in whieh the court eventually ruled that OHA's Hawaiians-only elections were unconstitutional. The plaintiffs in the Amkaki case have often cited the court's Rice decision as justifying their case. OHA and its supporters hailed the high court's Amkaki ruling as a victory, saying it almost certainly would result in dismissal of the suit. "We were pleased with the Supreme Court's decision, although not necessarily surprised," said OHA Administrator Clyde Nāmu'o. "The attorney

general advised us early on that based on the court's ruling in the Ohio case, the Amkaki issues were likely dead." Nāmu'o said he expects that either the appeals court will now dismiss the case outright, or will in turn remand it back to a lower court in Hawai'i. "In either case, our legal advisors are saying that it will end up in a dismissal of the

suit," he said. "Either way, I think we will end up with a good verdict for Hawaiians." However, the attorney for the Amkaki plaintiffs, H. William Burgess, told the media that the appeals court could still stand by its original decision. "In our case ... the state discriminates against [the plaintiffs] by making them pay taxes but denying them ben-

efits," Burgess told the Associated Press. "You can't treat people unequally." The lawsuit was originally filed in 2002 by 18 state taxpayers, led by retired Honolulu polieeman Earl Arakaki, who claimed that by discriminating against non-Hawaiians, OHA, the See ARAKAKI on page 14

'AHA HO'OKOLOKOLO • IN ĪHE CDURTS

At ū December 2004 rally, Hawaiian homesteaders wave signs in support of Hawaiian programs challenged by the Arakaki lawsuit. - Photo: KW0 Archive

AKAKAKI Cūntinued fram page 08

Department of Hawaiian Home Lands and other programs violate the equal protection clause of the 14th Amendment to the U.S. Constitution. In 2004, U.S. District Iudge Susan Oki Mollway dismissed the case for several reasons, including that the plaintiffs, simply acting

as state taxpayers, do not have the right to challenge the funding OHA receives from state tax revenue. OHA receives approximately $2.8 milhon per year in state tax revenue, or roughly 10 percent of the agency's total annual budget, the remainder of whieh comes from its share of revenue from the state's pubhc land trust (see story on page 6). Mueh of the state tax revenue is used to fund three programs that directly benefit Hawaiians: Alu Like, the Native Hawaiian Legal

Corp. and the Nā Pua No'eau edueahonal enrichment program. Last August, a three-member panel of the San Francisco-based 9th U.S. Circuit Court of Appeals affirmed most of Mollway's ruhng, but reinstated the state tax revenue challenge. Then, in May, the Supreme Court ruled unanimously that a group of taxpayers in Toledo, Ohio, lacked the right to challenge some $300 milhon in tax breaks that were being offered for a new leep plant. While

that case may seem completely unrelated to the Arakaki suit, both lawsuits hinge strongly on taxpayers' abihty to sue their home state over its use of their tax money. In the Ohio case, Chief Iustice John Roberts wrote in the high court's ruhng that the taxpayers' elaim of injury was "mere conjecture," and that they did not have the right to sue the state over its taxation or spending decisions. Plaintiffs' attorney Burgess told the press that even if the Arakaki

suit fails over the taxpayer issue, he would pursue future "race-based" actions on behalf of chents who are denied OHA and other Hawaiian benefits because they are not Native Hawaiian. OHA's Nāmu'o responded that "if there is another lawsuit, we will be vigorous in our defense that we have the right and legal foundahon to offer programs just to Hawaiians. I think our legal position is a strong one, and in the end we will prevail." S