Since rules have been reversed, judge says liquor lawsuit ‘moot’

Loo concludes that the legal notice for the Liquor Commission meeting was sufficient; plaintiffs plan appeal

WAILUKU — Pointing out that the disputed liquor rules had already been reversed, a judge ruled in favor of the county Liquor Control Department and Liquor Control Commission on Tuesday in a lawsuit that challenged the transparency of the rule changes.

Second Circuit Judge Rhonda Loo concluded that advance notice for a Feb. 8 commission meeting — when the changes were made — “was on its face sufficient” under Hawaii’s Sunshine Law and administrative rules.

“The court finds plaintiffs’ underlying concerns and the complaint, however valid, to be moot at this time,” Loo said.

Kihei resident Madge Schaefer and the Committee for Responsible Liquor Control filed the lawsuit on May 5, arguing that the liquor department and commission did not properly notify the public before making changes that allowed 24-hour liquor sales, removed a cap on the number of hostess bars and allowed home delivery of alcohol. The commission repealed the rules on July 12 after strong public backlash.

The lawsuit was later expanded to include the department’s decision to start requiring criminal background checks for nonprofits seeking liquor licenses for one-day fundraisers — which attorney Lance Collins called “a radical change” that did not go through the proper rule-making channels. However, the department has said that it was simply enforcing a state law already in place since 2008.

Loo also ruled in favor of the department and commission on the nonprofits issue, saying they had the authority to require background checks under Hawaii Revised Statutes 281-53.5a.

“The court ultimately finds the defendants were not rule-making . . . but rather determining methods of enforcing the pre-existing agency rule,” Loo said. “The defendants ultimately had the discretion to enforce and interpret their own rules.”

No other counties in the state require the checks, and the state Attorney General’s office told The Maui News in June that the department has the option but is not required by law to ask for background checks.

Schaefer and Collins said Tuesday that they planned to appeal Loo’s decision. They have 30 days to do so.

“We don’t believe the case is moot, because without a ruling from the court, the Liquor Commission could go back to its old ways,” Collins said. “The substance of moving forward at this point is to ensure that the Liquor Commission doesn’t fall off the wagon, that it continues to be reformed in its ways of government transparency.”

Schaefer added that she was “disappointed” with the ruling.

“But I will always support the people’s right to know what their government is doing and have the opportunity to comment on those options,” Schaefer said. “That was what was lacking here and that was what drove us to this courtroom.”

Kristin Tarnstrom, attorney for the county, declined to comment after the ruling Tuesday. Liquor Control Director Glenn Mukai and Deputy Director Mark Honda could not be reached for comment.

In court, Tarnstrom said that a Jan. 6 legal notice published in The Maui News provided enough information “as to what was occurring at the Feb. 8 meeting,” and that any problems with the Feb. 8 agenda were “cured by the January notice.” She also argued that the state Office of Information Practices should be making a decision on the issue, not the 2nd Circuit Court.

“They could easily have withdrawn their OIP complaint,” Tarnstrom said. “The only reason to maintain two actions is to get two bites of the apple.”

But Collins pointed out that later agendas were much more detailed than the agenda for the Feb. 8 meeting, when the 24-hour liquor rule was established. While the February agenda only says that a public hearing will be held on “proposed amendments” to Title 08, Chapters 101 and 102 of Liquor Commission rules, the July 12 agenda details the actual proposed changes on 24-hour liquor sales, hostess bars and home delivery of alcohol.

“I suspect that to avoid further litigation, the commission is now following Chapter 92 (of the Hawaii Revised Statutes) going forward,” Collins said.

Chapter 92, Hawaii’s Sunshine Law, covers rules for public agency meetings and records.

He also explained that Schaefer and the group had 90 days to file a lawsuit after the commission changed the rules and that the OIP wouldn’t have been able to take action before then.

After the hearing, representatives of several nonprofits gathered outside of the courtroom to gear up for today’s Liquor Commission meeting, when the commission will consider further rollbacks on requirements for nonprofits applying for one-day special event liquor licenses.

Nonprofits have said that the background checks take up valuable time and money, and that the many requirements for obtaining a one-day liquor license have led to the cancellation of crucial fundraisers.

Mahina Martin, one of the founding members of the Coalition to Repeal 24-Hour Liquor Sales, encouraged nonprofit officers to be firm and clear about what they want from the department and commission.

“Even though they may feel emboldened by today’s results, I don’t really see it as a door shut,” Martin said. “It’s a rally call. It tells us that we need to step up our game.”

The Liquor Commission meeting will start at 9 a.m. today in the Liquor Control Conference Room in the David K. Trask building.

* Colleen Uechi can be reached at cuechi@mauinews.com.

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