CHING YOUNG v. City and County of Honolulu

We are called upon to decide whether the City of Honolulu violated the Contracts Clause of the United States Constitution when it repudiated several agreements to convey property to private citizens in connection with its leasehold conversion program.

I

A

In 1991, the City and County of Honolulu (the “City”) enacted an ordinance, later codified at Chapter 38 of the Revised Ordinances of Honolulu (“Chapter 38”), which created a mechanism allowing condominium lessees to convert their leasehold interests into fee interests through the City’s power of eminent domain. As we have previously explained,

Matsuda v. City & Cnty. of Honolulu, 512 F.3d 1148, 1150 (9th Cir.2008) (citations omitted).

To break the land-ownership gridlock, the City enacted Chapter 38, which provided that when a sufficient number of lessees within a condominium complex applied, the City would take steps to acquire the property on which the complex was built through its power of eminent domain. See generally Revised Ordinances of Honolulu § 38 (repealed 2005). If successful, the City would then convey each condominium unit and the appurtenant land to its lessee in fee simple.

Specifically, when an…