Forum

1. James Mahelona
2. J. Tek Yoon
3. Nanakuli Surf Club, an unincorporated association

1. John F. Schweigert, Honolulu, HI
2. Lawrence D. McCreery, Honolulu, HI

1. Hawaiian Electric Company, Inc., a Hawai‘i Corporation, et al.

1. Hugh Shearer, Goodsill Anderson & Quinn, Honolulu, HI
2. David L. Fairbanks, Goodsill Anderson & Quinn, Honolulu, HI
3. Stanley D. Taobr, Asst. U.S. Atty., Honolulu, HI
4. Harold M. Fong, U.S. Atty., Honolulu, HI
5. Laurence K. Lau, Deputy Atty. Gen., Honolulu, HI
6. Ronald Y. Amemiya, Atty. Gen., Honolulu, HI

U.S. District Court, D. Hawai‘i

N/A

• National Environmental Policy Act of 1969 (“NEPA”), § 102, 42 U.S.C. § 4332
• Federal Water Pollution Control Act Amendments of 1972 (“CWA”), §§ 301(a), 309, 402(a), 502(6), 511(c)(2)(A, B), 33 U.S.C. §§ 1311(a), 1319, 1342(a), 1362(6), 1371(c)(2)(A, B)

1. Plaintiffs sought a permanent injunction in the U.S. District Court of Hawai‘i to prevent further construction by defendants of the Kahe discharge facility. The development of the Kahe discharge facility included construction of a transit basin, which would have intersected a surfing site commonly used to teach beginner surfers. The plaintiffs argued that the defendants were required to submit an Environmental Impact Statement (“EIS”) pursuant to NEPA for the construction of the Kahe discharge facility. 
2. Hawaiian Electric Company (“HECO”) operates an electric power station at Kahe Point, which consists of five steam electric generating units. To cool the generating units, HECO pumped ocean water through the steam condensers and discharged the significantly heated water back to the ocean (“thermal discharge”), which was considered a pollutant. On May 3, 1975, HECO received a National Pollutant Discharge Elimination System (“NPDES”) permit for the thermal discharge under the CWA. 
3. The U.S. Army Corps of Engineers (“Corps”) claimed that the construction of the Kahe discharge facility would not have a significant impact on the environment and the lack of adverse public concern was dispositive in determining whether an EIS should be prepared. The U.S. Army Corps of Engineers’ (“Corps”) Environmental Assessment (“EA”), however, failed to conclude that the Kahe discharge facility construction would not have a significant impact on the human environment. Rather the EA acknowledged that the construction of the Kahe discharge facility would affect surfing and on-shore activities in the Kahe area. Additionally, the court held that the lack of public concern was not the only factor in determining whether an EIS was required for a major federal action. Instead the expression of public concern was a factor in deciding if an EIS should be submitted. 
4. The Corps asserted that it was not required to prepare an EIS because the U.S. Environmental Protection Agency (“EPA”), the lead agency, had decided that an EIS was unnecessary for the Kahe discharge facility project. The court, however, found that the EPA had not made a decision regarding whether the Corps was required to prepare an EIS for the Kahe discharge facility project under NEPA. 
5. The EPA and HECO argued that CWA exempted EPA from the obligation of submitting an EIS under NEPA. The court found that the Kahe discharge facility was not a “source” under the CWA. Instead, the Kahe discharge facility was a method of control for the thermal discharge. In addition, the Kahe discharge facility is not a “new source” CWA because the Kahe discharge facility is not a “source” as defined in the CWA. Therefore, the court concluded that the EPA was not required to prepare an EIS for the Kahe discharge facility under the CWA, which exempts the EPA from NEPA obligations when the discharge of a pollutant is not a new source (“new source exemption”). 
6. HECO claimed that the Corps was similarly exempt from NEPA obligations under the CWA. The Corps, however, did not rely on the new source exemption on the administrative level when it decided not to prepare an EIS for the construction of the Kahe discharge facility. Moreover, the CWA provision that the Corps relies on for its argument does not limit an agency like the Corps to prepare an EIS. Rather the CWA provision prevents direct review or contradiction of a federally established effluent limitation. Alternatively, HECO argued that the preparation of an EIS would constitute a “review” of an EPA established effluent limitation. The court held that HECO’s interpretation of the CWA provision was too broad. HECO’s interpretation would require the Corps to issue a construction permit for any project that had obtained a NPDES permit. 
7. HECO contended that the plaintiffs’ claims were barred under laches. HECO presented evidence that twenty-five percent of the project had been completed, and HECO has spent almost two million dollars when the court heard plaintiffs’ motion for a preliminary injunction. The plaintiffs had notice of the significant changes from the construction of the Kahe discharge facility when HECO began the actual construction. Five weeks later, the plaintiffs filed their complaint in the U.S. District Court of Hawai‘i. The court held that the delay between plaintiffs’ notice and the filing of the plaintiffs’ complaint was reasonable, therefore there was no lack of diligence to bar plaintiffs’ claim under laches. Moreover, HECO had not injuriously relied on the plaintiffs’ delay because HECO had decided to continue construction of the Kahe discharge facility without filing a motion for judgement in its favor. 
8. The court held that a permanent injunction would not properly satisfy either parties. If the Corps was required to submit an EIS, it would experience a delay in construction costing it ten million dollars. In addition, all parties agreed that the Corps’ conclusions based on an EIS would be to allow HECO to continue with its planned project. Therefore, the parties reached an agreement where HECO would construct a nearby surf site in exchange for the plaintiffs’ dismissal of their complaint. The parties submitted their agreement to the court, which approved the agreement and dissolved the preliminary injunction.