## Facts

- Maui Electric Company, Limited (MECO) applied to the Hawaiʻi Public Utilities Commission (PUC) for approval of an amended and restated power purchase agreement (PPA) with Hawaiian Commercial & Sugar Company (HC&S).
- HC&S generated electricity at its Puʻunēnē facility using bagasse and also coal and petroleum products.
- MECO sought findings that the PPA’s charges and arrangements were just and reasonable, prudent, and in the public interest, and authority to recover purchased-power costs from customers through an adjustment mechanism.
- Sierra Club moved to intervene, asserting its members lived near the facility and would be affected by air emissions and public-health impacts from the plant’s continued fossil-fuel use and alleged lack of adequate pollution controls.
- The PUC denied Sierra Club’s motion to intervene and approved the amended PPA and associated cost recovery.
- On appeal, the Intermediate Court of Appeals dismissed for lack of appellate jurisdiction, concluding the PUC matter was not a “contested case” because no hearing was “required by law.”
- The Hawaiʻi Supreme Court granted certiorari to determine whether due process required a hearing and intervention, and whether that requirement created a contested case permitting judicial review.

## Issues

1. Whether the Hawaiʻi Constitution’s right to a clean and healthful environment, as defined by environmental laws and regulations, can constitute a protected “property” interest under the state due-process clause.
2. Whether PUC approval of the amended PPA adversely affected that interest such that due process required a contested-case hearing allowing Sierra Club to participate.
3. Whether the existence of a constitutionally required hearing rendered the PUC proceeding a “contested case,” giving appellate courts jurisdiction to review the PUC’s action.

## Decision

- The Hawaiʻi Supreme Court vacated the dismissal for lack of jurisdiction and remanded for further proceedings.
- The Court held that, under the circumstances presented, Sierra Club and its members asserted a protectable property interest in a clean and healthful environment as defined by environmental regulations.
- The Court concluded that the PUC’s decision had the potential to adversely affect that interest and that procedural due process required a hearing.
- Because a hearing was required, the matter qualified as a contested case for purposes of judicial review, and Sierra Club was entitled to intervene.
- A dissent would have held no protected property interest existed and would have affirmed the dismissal for lack of a contested case.

## Legal Principles

- A constitutionally guaranteed environmental right, when given concrete content by statutes and regulations relating to environmental quality, may qualify as a protected property interest for procedural due-process purposes.
- When an agency action directly and adversely affects such a protected interest, due process may require an evidentiary, participatory hearing before the agency.
- Whether due process requires a hearing depends on the importance of the interest, the risk of erroneous deprivation absent participation, and the government’s interests in administrative efficiency.
- If a hearing is required by constitutional due process in an agency matter, the proceeding may be treated as a contested case, enabling judicial review under the state administrative procedure framework.

## Conclusion

The Hawaiʻi Supreme Court held that Sierra Club’s members could assert a due-process-protected property interest in a clean and healthful environment, requiring a contested-case hearing before the PUC on the amended PPA and enabling appellate jurisdiction to review the agency’s denial of intervention and approval decision.


In re Application of Maui Electric Co., Ltd., 408 P.3d 1 (Haw. 2017)