The case in which the county is both plaintiff and defendant will be before the Hawaiian Supreme Court next week.
The lawsuit, which names the County of Kaua‘i against Mayor Bryan Baptiste, the County Council and Finance Director Wallace Rezentes Jr., stems from allegations that a tax relief measure passed by the voters in November 2004 was illegal.
But the validity of the tax relief should have been verified by the county before it was written onto the ballot and passed by two-thirds of the voters, Robert Thomas, an attorney for the Pacific Legal Foundation, said yesterday.
Thomas will represent the Kaua‘i residents who helped get the measure, dubbed the ‘Ohana Kaua‘i tax relief, in front of the voters 21/2 years ago.
The initiative called for the stabilization of property assessments in three residential classes.
After voters approved the measure, the county sued itself based on claims that the measure was too vague and that it violated the Hawai‘i constitution and county charter.
The case brings into question whether the government can sue itself to stop voters from capping property taxes, Thomas said.
Also coming into play is whether there was a conflict of interest when the case began.
“This is a collusive, sham lawsuit,” Thomas said.
Walter Lewis, a member of ‘Ohana Kaua‘i and a former attorney, said at the heart of the “sham” are the parties involved.
“At no time did the mayor or County Council take any position which was inconsistent with the position taken by the county attorney,” Lewis said.
“There must be a controversy by the parties to the lawsuit. There was no controversy between the county attorney, who was the plaintiff, and the mayor and County Council, who are the defendants.”
When the case was first filed, former County Attorney Lani Nakazawa had been named as the plaintiff and Baptiste the defendant.
Nakazawa filed the case citing that the Hawai‘i Constitution states the counties — not the state — have the authority to determine property tax policy.
Nakazawa argued “the counties” exclusively meant “County Councils,” not its residents.
In the wake of Nakazawa’s resignation, Deputy County Attorney Rosa Flores is representing Baptiste, Rezentes and the council in this case.
The county has hired outside counsel Gary Slovin for its representation, said Mary Daubert, county spokeswoman.
In a prepared statement, Flores said at this time, it would be “improper to make any statements regarding the substance of my clients’ position in the ‘Ohana charter amendment case. We look forward to presenting it before the Hawai‘i Supreme Court next week.”
If the high court rules in favor of Thomas’ clients, whether taxpayers would see some sort of retroactive rebate, refund or future tax cut would be yet to be determined, he said.
“That is not before the court,” Thomas said. “We’ll cross that bridge if the court decides that’s the way to go.”
As attorneys often rely on precedents, Thomas said he has been unable to find a case as unique as this one.
“We have not been able to find a single case out there like it,” Thomas said.
The closest case Thomas found was a California ruling from 2005 — Santa Monica v. Stewart.
That lawsuit also related to a tax initiative, of which Santa Monica officials were disapproving.
Lewis and several other Kaua‘i residents plan to hear the oral arguments that will be presented from 9 a.m. to 10 a.m. Feb. 15 at the Hawai‘i Supreme Court.