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The Hawaii Supreme Court ruled Monday that Act 2, passed in special session of the state Legislature in 2007 to allow the Hawaii Superferry to operate, was a special law and therefore unconstitutional.

The current Legislature had already declined to extend Act 2 beyond July 31, when it expires. The law had allowed the ferry to operate between Honolulu and Kahului while an environmental assessment was prepared. The court remanded the case to 2nd Circuit Court.

The Hawaii Constitution requires that all legislation (except transfers of particular pieces of property) be of general impact. It found that although the law was written to apply to a "large-capacity ferry vessel," in reality only one such vessel and operator were in existence or likely to try to enter the business within the 21 months before the law was scheduled to expire.

This question is rarely appealed. Only once before has the state's highest court considered it. That was in 1967, in a Maui County case, and the court found that the law in question was general. Monday's decision is the first time a Hawaii state law has been found unconstitutional because it applied only to one person or corporation.

The court also affirmed that 2nd Circuit Judge Joseph Cardoza was within his discretion when he awarded attorney's fees to the appellants, Sierra Club, Maui Tomorrow and the Kahului Harbor Coalition, under the private attorney general doctrine.

That also was a first in Hawaii. The doctrine says that if private litigants pursue a lawsuit that benefits the public generally, then they can be awarded fees even though usually they would not be. The state Department of Transportation and Hawaii Superferry will have to pay fees of about $86,000 to plaintiff attorney Isaac Hall, plus another $4,500 in costs.

The five-member court was not unanimous. Associate Justices Simeon Acoba and James Duffy and acting justice Michael Town agreed. Associate Justice Paula Nakayama wrote a separate concurrence, though dissenting in part; and Chief Justice Ronald Moon joined her.

In 1967, in Bulgo v. County of Maui, the court had considered a law whose purpose was to provide for succession when a chairman of the Board of Supervisors died. Although it was written narrowly to address deaths that had occurred within a few weeks, and the court said only one supervisor had actually died during that period, nevertheless the law was general in that it applied to any county in the future that wished to pattern its succession as Maui had (even though no other counties at the time wanted to).

In the Superferry case, the court said that although the law provided an illusion of generality, the fact that it was to be in effect for, at most, 21 months made it impossible for any other entrant to take advantage. Citing a Colorado case, the court found that in reality Act 2 was meant for Superferry and only Superferry.

This is the second time the Supreme Court has acted to tie the ferry Alakai to its home pier at Honolulu.

Despite bitter protests, the ferry began operations in August 2007, although attempts to access Nawiliwili Harbor on Kauai were abandoned. Within days, however, the court ruled that a 2005 Circuit Court decision to exempt the ferry and the Harbors Division from environmental review was in error.

That challenge had been brought by the Maui plaintiffs, saying that a full environmental assessment was required. The state Department of Transportation had granted Hawaii Superferry an exemption and had also limited environmental review to onshore changes on state property. The plaintiffs wanted a review to encompass possible impacts at sea, although no other vessel plying Hawaii waters has had to do an environmental impact statement.

The plaintiffs also wanted wider review of onshore effects, such as movement of pests between islands and impacts on natural resources. Once the ferry began operating under Act 2 later in 2007, three trucks full of imu rocks taken from state property on Maui were intercepted, renewing the outcry about impacts of daily ferry operation.

The state had advocated an interisland ferry for decades, and Gov. Linda Lingle's administration had worked closely with Hawaii Superferry to craft an operating agreement, provide onshore support and generally get out of Superferry's way. The Legislature had concurred, allowing expenditure of $40 million in harbor funds for improvements, to be repaid from user fees.

Once the court shut down the ferry, Lingle called a special session of the Legislature, which within days in October passed Act 2, which allowed the ferry to resume operations while an environmental study was being prepared. It has not been completed.

As part of the legal proceedings, the state asked Cardoza to invalidate the ferry's operating agreement with the state Transportation Department, which was done for a brief period from Oct. 9 to Nov. 2, 2007.

This came back to bite the state and Superferry when the case reached the high court.

One of Hall's arguments was that only the executive, not the Legislature, can direct use of state lands. The state countered that Act 2 was not a disposition of state lands but a procedural matter. And, anyway, the disposal of state land had been done by the executive when the state signed the operating agreement.

However, the court noted that when Lingle signed Act 2, the operating agreement was null, on Cardoza's order, and that therefore there was no executive authority for the disposition.

The ruling by the majority is 113 pages long, and it goes into great detail to demonstrate that whatever Act 2 said on its face, in fact only Hawaii Superferry could possibly have taken advantage of it.

"A highly improbable set of events would have to occur in order for another ferry vessel company to enter Act 2's class of 'large-capacity ferry vessel company' within the 21-month viability of Act 2," the court wrote.

The court also spent many pages determining whether the plaintiffs had served as a "private attorney general" in order to vindicate important public rights.

Hall argued that they had: They had preserved the integrity of Act 343, the environmental law, by establishing procedural standing and clarifying the need to address secondary impacts. The state contended that the controversy was over a particular instance and that Act 343 was never in jeopardy.

The court agreed with the plaintiffs, and its interpretation broke new ground. Even in the highly contentious Waiahole II water decision, the private plaintiffs failed in their bid to be reimbursed.

The court indicated it still will award fees sparingly. Only the legal expenses during the second appeal period are covered.

The court said the limitation on special laws is as important when the law is framed to favor a specific individual, class or entity as in the more common case, when it is contended that a law is intended to discriminate against an individual, class or entity.

* Harry Eagar can be reached at heagar@mauinews.com.