The Hawai'i Supreme Court has ordered the state Commission on Water Resources Management to reconsider its actions in a Moloka'i water rights dispute that dates back to 1994.

The 56-page decision, released last week, faults the commission's approval of a water use permit to a private business on several grounds and ordered the commission to take up the matter again.

The dispute centers on competing claims for approximately 1 million gallons per day of fresh water on Moloka'i. As in previous high court decisions on water use in the Islands, the claimants on one side are a commercial business and the Department of Hawaiian Home Lands and the Office of Hawaiian Affairs on the other.

Various parties affected by the decision declined to comment on it in any detail, noting that its length and density required close study.

But attorneys for OHA and Hawaiian homesteaders generally hailed the decision as a victory, while an official with Moloka'i Ranch called it "technical in nature" with limited practical effects on current or projected water use.

Alan Murakami of the Native Hawaiian Legal Corp. has been involved in the case since 1997, representing two Hawaiian homesteaders on Moloka'i.

He called the ruling "a very gratifying affirmation of our position" and said he believes the opinion will have "a major effect on Moloka'i Ranch's plans for expansion."

Murakami said the court's findings are that private applicants for water must first demonstrate what impact the proposed use will have "on the Department of Hawaiian Home Lands, which has a superior right to the water."

The court also ruled that applicants must also demonstrate whether the proposed water use will adversely affect the coastal ecosystem or damage traditional Native Hawaiian gathering rights, Murakami said.

The ruling could have major implications for development plans on other islands where water supplies are scarce and where the Department of Hawaiian Home Lands has a competing interest in the natural resource, Murakami said.

DHHL was represented in the case by the state attorney general's office.

Department spokesman Lloyd Yonenaka said details of the decision are still under review, "but generally we're happy with it because it reaffirms DHHL's water rights position."

University of Hawai'i law professor Jon Van Dyke, who represented OHA in the case, said: "It's a wonderful victory. Basically they struck down the permit that the water commission had issued and this proceeding is going to have to almost begin anew."

Van Dyke said the Supreme Court had consistently ruled since 2000 that "the water commission must consider and protect Native Hawaiian rights to water."

Those rights are "not absolute but they must be carefully evaluated in an open and transparent process with a heavy burden of proof on the applicants who want to use the water," Van Dyke.

The Office of Hawaiian Affairs declined official comment, saying the ruling is still under review.

Daniel Orodenker, general manager for land and general counsel for Moloka'i Properties Ltd., the parent company of Moloka'i Ranch, called the decision "technical in nature" and noted that the water permit issue has been pending since the 1990s.

"A lot has changed since 1994," he said.

"We'll resolve these issues," Orodenker said, adding that the company "will continue to supply water to all the west end of Moloka'i."

Reach Jim Dooley at jdooley@honoluluadvertiser.com.

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