Yesterday, the Hawaii Intermediate Court of Appeals issued an opinion in In re Trustees Under the Will of the Estate of James Campbell, No. 30006 (June 13, 2013), a fascinating case involving the nature of Torrens title.
In doing so, the court rebuffed the State of Hawaii's attempted land grab, which would have undermined the sanctity of all Land Court titles, and, in a sense, the very notion of property rights and settled expectations. The ICA also rejected the State's attempt to transform the "public trust" doctrine into a physical servitude that would have allowed the State to flood land without consequence.
he court held that the intent of the registration provisions in chapter 501 is to "preserve the integrity of titles," slip op. at 11, and "a certificate of title is unimpeachable and conclusive except as otherwise provided by law." Id. As a consequence, "[b]y virtue of the Land Court registration of the Subject Property, the Trustees held, and subsequent good faith purchasers of the Subject Property for value hold, the Subject Property free from all encumbrances, except for encumbrances noted on the certificate of title." Id. The court noted that at oral argument the State conceded that the reservation of mineral or metallic mines is an "encumbrance" and an alienable right. The court concluded that the state had appeared in the 1938 Land Court action to assert some of its rights (but not the mineral rights), and the Land Court's judgment thus "extinguished the reservations of mineral or metallic mines." Slip op. at 14.
The court also rejected the State's attempt to transform the State's "public trust" in water resources into much more than it is. In Hawaii's version of the public trust doctrine, the State owns all water and holds it in a trust for the benefit of the public. As Professor David Callies and Cal Chipchase have pointed out, our version has already distorted the public trust's usual scope, but in the Campbell case, the State sought to make it even broader. It claimed this power gives the government a flowage easement that should be reflected on Land Court title. A flowage easement is an inherent right to flood land without consequence. In other words, the State argued that its duty to "preserve and protect" water resources virtually eliminated any claim any landowner may have for State-caused flooding.
The court rightly recognized that the State was, in effect, throwing up a wildly excessive argument just to see if it would stick: the State provided no authority and "no specifics" to support a reading of the public trust doctrine that would stray the public trust doctrine even further from its moorings than it already has, it did not identify where the easement would run on the land, it did not idenfity the scope of the claimed easement, and it did not "demonstrate that the notation of an easement for the free flowage of waters as an encumbrance on the Subject Property at the present time and in the context of this case is needed to perform such duties [under the trust]." Slip op. at 21. But these are the kind of arguments you get in these type of cases, where invocations of the magical public trust often get results, even where they should not.
The bottom line in this case is that the ICA rejected two vastly overreaching claims by the State, and in the process thwarted what would have amounted to massive land grabs.