John Carroll v. James Nakatani, in His Capacity as Chairperson/director of the State of Hawaii Department of Agriculture Paul Lamahieu, in His Capacity as Chairperson/director of the State of Hawaii Department of Education Timothy E. Johns, in His Capacity as Chairperson/director of the State of Hawaii Department of Land and Natural Resources Seiji Naya, in His Capacity as Chairperson/director of the State of Hawaii Department of Business Economic Development & Tourism Kazu Hayashida, in His Capacity as Chairperson/director of the State of Hawaii Department of Transportation Raymond Sato, in His Capacity as Chairperson/director of the State of Hawaii Department of Accounting and General Services State of Hawaii Benjamin J. Cayetano, in His Official Capacity as the Governor of the State of Hawaii Office of Hawaiian Affairs Charles Ota Collette MacHado Nalani Olds Nani Brandt Clayton Hee Gladys Brandt Dante Carpenter Ilei Beniamina and Hannah Springer, in Their Capacities as Trustees of the Board of Trustees of

Citations: 342 F.3d 934; 2003 Cal. Daily Op. Serv. 7978; 2003 Daily Journal DAR 10027; 2003 U.S. App. LEXIS 18117Docket: 02-15483

Court: Court of Appeals for the Ninth Circuit; September 2, 2003; Federal Appellate Court

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John Carroll and Patrick Barrett appeal the dismissal of their equal protection claims against various state officials and the State of Hawaii, arguing that Article XII of the Hawaiian Constitution and its implementing statutes, which allocate benefits based on the classification of "Hawaiian," violate the Fourteenth Amendment's Equal Protection Clause. Their challenge is based on the Supreme Court's ruling in Rice v. Cayetano, which deemed the "Hawaiian" classification race-based and unconstitutional when limiting voter eligibility for trustees of the Office of Hawaiian Affairs under the Fifteenth Amendment. The Supreme Court's decision did not address the validity of the benefits allocation itself, leading to Barrett and Carroll's claims that such benefits are unlawfully restricted to those identified as "native Hawaiians" or "Hawaiians." The Ninth Circuit is tasked with determining whether the district court correctly dismissed their claims due to lack of standing.

Barrett filed a complaint on October 3, 2000, in the District of Hawaii, alleging that Article XII of the Hawaiian State Constitution violates the Fourteenth Amendment by allowing government benefits to be distributed based on race. He specifically challenged the establishment of the Office of Hawaiian Affairs (OHA) and the Hawaiian Homestead Commission (HHC) and sought a declaration affirming that all races are entitled to access benefits created by Article XII. His case was consolidated with Carroll's similar complaint, filed on October 2, 2000, which also claimed racial discrimination in the allocation of government benefits.

On July 12, 2001, the district court granted summary judgment against Barrett, ruling that he lacked standing to challenge either the OHA's business loan program or the HHC's homestead lease program, primarily due to his failure to include the United States as a party, which retained rights under the Hawaiian Admission Act of 1959 regarding homestead leases. Barrett subsequently filed a motion for reconsideration on July 19, 2001, introducing two new arguments: the necessity of notifying the United States under 28 U.S.C. 2403 and the potential for joining the United States as a party under Federal Rule of Civil Procedure 19(a).

On September 18, 2001, the district court denied Barrett's motion, stating that he had not raised these arguments in a timely manner. The court ruled that notification under 28 U.S.C. 2403 was unnecessary as it pertained to the constitutionality of federal laws, which Barrett had not contested. Additionally, the court rejected his Rule 19(a) argument, stating that Barrett had consistently avoided including the United States in his lawsuit, and allowing joinder would not address his standing issues, which should have been resolved earlier in the proceedings.

Barrett's injury was deemed not redressable by the court, as a favorable ruling would not allow him to compete equally, given the homestead lease program's intent to benefit native Hawaiians. The district court granted summary judgment against Carroll, determining he lacked standing to challenge the constitutionality of Article XII and chapter 10 due to failure to show any specific injury from the unequal treatment, presenting only a generalized grievance against the Office of Hawaiian Affairs (OHA). The court rejected Carroll's argument of "representational harm" as analogous to voting rights cases. Jurisdiction is established under 28 U.S.C. 1291, and standing is a legal question reviewed de novo. Summary judgment is also reviewed de novo, assessing whether genuine issues of material fact exist and if the law was correctly applied. The denial of reconsideration is reviewed for abuse of discretion. Standing is essential under Article III, requiring an "injury in fact," causation by the defendant, and likelihood of redressability. Generalized grievances are insufficient for standing; only those personally denied equal treatment have standing, as emphasized in various Supreme Court rulings. Barrett appeals two issues: the district court's ruling on his standing regarding OHA's business loan program and the HHC's homestead lease program, not contesting the summary judgment on Article XII's gathering rights.

Carroll argues that the district court incorrectly determined he did not show an injury in fact, presenting three claims. First, he asserts personal injury from being subjected to racial classification under Article XII and chapter 10. Second, he claims injury from the Office of Hawaiian Affairs (OHA) allocating grants and benefits, which he believes preferentially supports native Hawaiians over other racial groups, criticizing the lack of state support for Caucasians. Third, he draws a parallel to "representational harm" related to racially gerrymandered districts.

Barrett’s case involves his attempt to secure a loan from OHA to start a copy shop. His initial application was incomplete, lacking key information, which OHA returned with a request for completion. Barrett did not respond and later admitted he had not prepared a business plan or determined costs associated with the venture. He has not worked since 1975 and relies solely on Social Security disability payments. The district court noted that Barrett's complaint was filed shortly after his loan application.

In cases of equal protection challenges to race-conscious programs, the relevant injury is not merely the denial of benefits but the inability to compete on equal terms. This principle is supported by the precedent set in Northeastern Florida Chapter of Associated Gen. Contractors of Am. v. City of Jacksonville, where the Supreme Court ruled that a plaintiff must show readiness to compete for contracts that a discriminatory policy renders inaccessible.

The "able and ready" standard from Northeastern Florida was applied in Bras v. California Public Utilities Commission, where the plaintiff, an architect with over 20 years of experience, challenged a preferential treatment policy for women and minority-owned businesses. The court found the plaintiff had standing to contest the policy based on his declared intent to resume work with Pacific Bell, supported by the company’s willingness to consider him for future projects.

In contrast, Barrett fails to demonstrate that he has been denied equal treatment regarding an OHA loan. His actions do not show he is "able and ready" to compete equally for the loan, as evidenced by a symbolic and incomplete application, lack of alternative financing exploration, absence of a business plan, no work history for the last 25 years, and minimal understanding of business expenses. His application deficiencies and failure to respond to OHA's requests for further information further indicate a lack of preparedness.

While intent can sometimes be relevant for standing in equal protection cases, Barrett has not shown sufficient readiness or ability to compete for the loan. His generalized grievance does not meet the necessary criteria for standing, as he has not demonstrated an injury in fact, which negates the need to evaluate the other standing requirements.

Barrett also argues that he cannot compete equally with native Hawaiians for a Hawaiian homestead lease, claiming that the HHCA's implementation violates the Fourteenth Amendment by restricting access to government benefits based on ethnicity.

The district court determined that Barrett experienced an injury in fact due to the denial of his homestead lease application, contrasting it with his business loan application. It was established that obtaining a homestead lease requires only a stated desire and certain personal information, and all parties concurred on Barrett's demonstrated injury.

Barrett challenges Hawaii's Article XII, which establishes the Hawaiian Homes Commission (HHC), asserting that it permits government benefits based on race. He specifically targets the Hawaiian Homes Commission Act (HHCA), enacted by Congress in 1921, which allocated approximately 200,000 acres for native Hawaiian homesteading. Upon Hawaii's statehood in 1959, it incorporated the HHCA into its Constitution, retaining federal oversight over changes to homestead lease qualifications, as outlined in the Admissions Act.

The Admissions Act mandates that changes to lessee qualifications cannot occur without U.S. consent, thereby linking the constitutionality of Article XII to the validity of the Admissions Act. Barrett's complaint does not challenge this federal provision, which emphasizes the necessity of U.S. involvement in any claims against Article XII and the HHCA. The court noted Barrett's likely awareness of this requirement, given his acknowledgment in the complaint of the agreement between the State and the U.S. regarding the HHCA. The Supreme Court case Rice v. Cayetano, cited by Barrett, highlights Congress's historical concern for native Hawaiians and details the context of the HHCA and Admissions Act.

Barrett received notice of the Admissions Act before the district court's summary judgment ruling, as the defendants raised the issue in their filings. Despite this, Barrett did not challenge the constitutionality of any federal law and appeared to avoid including the United States in the litigation until after receiving an unfavorable summary judgment. He lacks standing to contest the native Hawaiian eligibility requirement for Hawaiian Homestead leases because his inability to compete equally arises from a federal and state classification, necessitating the United States' involvement to effect any change. Barrett's claim is unredressable due to his failure to include the United States as a party despite prior notice of its necessary participation.

Additionally, Barrett's argument during oral argument that the Hawaiian Admissions Act is obsolete was not considered, as the court only reviews issues distinctly raised in briefs. His motion for reconsideration of the dismissal of his homestead lease claim was denied because he introduced two new arguments too late: the need for notification to the United States under 28 U.S.C. 2403(a) and the requirement to join the United States under Federal Rule of Civil Procedure 19(a). The court emphasized that motions for reconsideration are extraordinary remedies and should not be granted unless based on newly discovered evidence, clear error, or changes in law, none of which applied in Barrett's case. Ultimately, Barrett did not establish standing nor challenge the constitutionality of any federal law; thus, the court's dismissal due to lack of standing did not implicate the notification requirement under §2403(a).

Barrett's invocation of Rule 19(a) and 2403(a) to address standing issues is rejected, as the absence of the United States as a party and failure to challenge the constitutionality of the Admissions Act render his claims non-redressable. The district court's determination that Barrett did not demonstrate an injury in fact from the OHA loan program is affirmed, as is the ruling that his challenge to the HHC homestead lease program lacks redressability due to similar omissions.

Carroll's claims of injury are also addressed, with three main arguments presented. First, he asserts that the racial classifications in Article XII and chapter 10 personally harm him. Second, he argues that OHA's allocation of grants favors native Hawaiians over other state residents, which he views as discriminatory. Third, he likens his injury to representational harm seen in racially gerrymandered voting districts. 

The district court properly dismissed Carroll's broad claim of injury based solely on racial classification, emphasizing that standing requires evidence of being personally denied equal treatment, not merely the existence of a racial classification. Carroll fails to demonstrate individualized harm necessary to challenge such classifications, which are subject to strict scrutiny. The Supreme Court has not ruled that race-conscious decision-making is inherently discriminatory, reinforcing that such classifications can be justified under specific circumstances.

The Supreme Court's handling of *Adarand Constructors, Inc. v. Slater* illustrates the principles of standing within an equal protection framework. In this case, the plaintiff contested the use of a race-based presumption in a federal procurement program but was found to have standing only for specific programs in which he competed, not for the program as a whole. The Supreme Court later dismissed the certiorari as improvidently granted, acknowledging the Tenth Circuit's ruling regarding the plaintiff's lack of standing.

In analyzing Carroll's claims, he asserts injury from the allocation of benefits to native Hawaiians but fails to demonstrate a particularized injury necessary for standing. Despite claiming discrimination, Carroll has not identified any specific OHA program he wishes to join or applied for, nor does he provide evidence that he is prepared to compete for OHA benefits. His generalized grievance, similar to that in *Allen v. Wright*, where plaintiffs lacked standing due to a failure to show direct injury from the government's actions, does not suffice to establish standing. The court concludes that Carroll's claims reflect a mere desire for the government to adhere to his interpretation of the Constitution, rather than a legitimate injury from the allocation of benefits. As a result, Carroll lacks standing to challenge the OHA's benefit distribution.

Carroll's claim of "representational harm" is likened to issues arising from racially-gerrymandered voting districts, as seen in the cases of Shaw and Hays. In those cases, the Supreme Court recognized that voters in racially classified districts could suffer unique harms related to representation. However, Carroll's situation does not involve gerrymandering or any voting-related practices; he merely argues that a trustee he can vote for may not represent his interests adequately due to the racial objectives of the OHA's programs. The court emphasizes that this is not a voting rights case and that the rationale for recognizing representational harm does not extend to this context. Since Carroll did not demonstrate an actual injury, the court finds no need to consider causation or redressability. Consequently, the district court's ruling that Carroll lacks standing to challenge the OHA business loan program is upheld, reaffirming that mere classification does not equate to injury. Both Carroll and Barrett are determined to lack standing, leading to the affirmation of the district court's judgment. Notes clarify definitions of "Native Hawaiians" and "Hawaiians" as per state law, and also mention Barrett's separate claims which are not under appeal.