An Oahu judge has invalidated state water diversion permits to Alexander & Baldwin for its waning Maui sugar operations in a ruling that a member of the plaintiff’s group called “a historic victory.” The permits have been extended annually for 13 years without an official environmental review.

First Circuit Judge Rhonda Nishimura ruled Jan. 8 against permitting East Maui stream diversions through a series of ditches and siphons built in the 1870s. While the water continues to flow from East Maui to Central and Upcountry Maui, what happens next has yet to be determined.

Defendant A&B, whose subsidiary Hawaiian Commercial & Sugar Co. will be shutting down operations at the end of the year, has asked the judge to reconsider her decision.

The County of Maui, also a defendant because it draws about 6 million gallons a day from the system, has filed a direct appeal of Nishimura’s ruling to the Intermediate Court of Appeals. A hearing is set for Feb. 1, said plaintiff’s attorney Summer Sylva.

The judge ruled that the Board of Land and Natural Resources’ practice of extending revocable permits on an annual basis to A&B from 2001 to 2014 violated state law. The permits covered the Honomanu, Huelo, Keanae and Nahiku areas, with A&B paying the state a total of $13,200 per month for the permits.

Nishimura said that the BLNR granted the permits on a “holdover status,” which allows for “temporary occupation of public lands.” However, the statute does not apply to “A&B’s continuous uninterrupted use of these public lands on a holdover basis for the last 13 years.”

“Otherwise, holdover tenants could arguably be allowed to occupy public lands almost in perpetuity for continuous, multiple one-year periods,” Nishimura said in her six-page ruling. “Such a prospect is inconsistent with the public interest and legislative intent.”

The next steps the judge could take include halting the diversions, which county officials have put at between 40 million and 137 million gallons a day, or ordering the Department and Board of Land and Natural Resources to properly license the diversions, Sylva said Friday.

“Our hope with this case was to restore water to the East Maui watershed in defense of the environment and the taro farmers and gatherers . . . and in the interest of the public,” said Sylva, an attorney with the Native Hawaiian Legal Corp., which is representing the plaintiffs. “These are water resources belonging to the people of the state.”

Sylva noted that there has never been an environmental assessment or environmental impact statement performed on the diversions to assess the harm to users, the flora and fauna of the streams, and the resources themselves.

“This has been a long time coming,” she said “For the last 13 years, they have been allowed to ignore and proceed.”

“This is a historic victory for us,” said Mahealani Wendt, a member of the plaintiff group Na Moku Aupuni O Ko’olau, a community of taro farmers, fishermen, hunters and traditional practitioners.

Sylva added that the plaintiffs “would never object to or challenge” the county’s water draw. The threat of disrupting county water services to the Upcountry area is not on their agenda. County spokesman Rod Antone said Friday that the ruling will not affect Upcountry water availability.

Wendt put the ruling in a broader historical context, saying that the community’s legal challenges to the diversions began in the mid-1980s. Na Moku was incorporated in the early 1990s and lodged several legal challenges in the late 1990s to early 2001 against A&B and its system manager, East Maui Irrigation.

In 2001, the group challenged EMI’s application with the state to lock in diversions through 30-year licenses and won, Wendt said. Judge Eden Elizabeth Hifo ruled in 2003 that long-term leases could not be considered or issued until the defendants completed an environmental assessment.

No assessment was done. Instead, the Board of Land and Natural Resources has been issuing revocable permits on a holdover basis, Wendt explained. Nishimura has now ruled that process is in violation of state law.

“We obviously disagree with the judge’s decision and have asked her to reconsider it,” Rick Volner, general manager of HC&S, said in a statement Friday. “We have been following the procedures for securing a state water lease since 2001, but the process has been repeatedly delayed due to numerous legal challenges by those opposing diversions of stream water.

“We are unsure whether Judge Nishimura understands that this is the primary source of drinking and irrigation water for 36,000 Upcountry Maui residents and farmers. We will be working with the state and county to identify the quickest way to address this situation.”

A&B announced earlier this month that HC&S, the last sugar plantation in the state, will end its sugar production this year. By the end of the year, more than 600 workers will be unemployed.

A&B cited $30 million in losses in 2015 and a future of more “significant losses” in announcing the closure. Other factors mentioned by A&B officials included poor weather forecasts that would reduce crop yields, lots of sugar on the world market driving down prices, and opposition by anti-cane burning groups. There was no mention of problems with water licenses.

Sylva noted that A&B was on notice since mid-December through the judge’s “minute order” that the ruling was not going its way.

Given the plans to shut down the plantation, A&B may be able to obtain enough water from land it currently owns. One-third of the water comes from A&B land, Sylva said, meaning that even if the state revoked all permits it still would have one-third of its current take. It’s enough to supply the county’s needs, and “they arguably have enough to satisfy their transition into a different crop for the time being,” she said.

“Sharing the resource may be reasonable at this time,” she said.

This lawsuit is separate from a contested case currently before the state water commission on stream flow standards for 27 East Maui streams, from which A&B draws water, said Sylva, who also represents Na Moku in that case.

The state water commission issued stream flow decisions in 2008 and 2010 and denied a contested case hearing request from Na Moku in 2010. Two years later, the Intermediate Court of Appeals ruled that a contested case hearing should have been granted.

Hearings were held on Maui in the spring on setting stream flow standards for the 27 East Maui streams and the release of the hearing’s officer’s recommendations is pending.

* Lee Imada can be reached at leeimada@mauinews.com.