Left high and dry in Koloa

KOLOA — Jim and Denise Satterfield can only watch as hundreds-of-thousands of gallons of drinking water flow down the hillside past their once-thriving water bottling business.

Kauai Springs, after a lengthy legal battle, recently shut down operations.

The Satterfields have been involved in a dispute with the Kauai County Planning Department over land-use permits to bottle water on a plot of land they have leased in Koloa for over a decade. Their battle with the planning commission began two years after the business was founded in 2004 and rose from county government offices to the highest court in the state.

Kauai Springs bottled its water by tapping an otherwise defunct gravity-fed private water system that once supplied the Koloa Sugar Plantation with 300,000 gallons of potable water a day.

Sometime near the end of the 19th century, laborers tunneled into the rock face of Kahili Mountain over a thousand feet above sea level and ran an eight-inch steel pipe down the hill to Koloa, providing the plantation with drinking and irrigation water for a hundred years until it finally went out of business in the mid-1990s.

When Jim Satterfield came to Kauai and learned about the water source in the early 2000s, he saw more than an interesting historical relic.

He saw opportunity.

“This got approved in 2004, and we were off and running,” Satterfield said in an interview earlier this month.

He pointed to the point in the pipe where he tapped into the water supply.

“This is what’s called a renewable natural resource,” he said. “The more you take out of it, the more it gives.”

Satterfield relocated to the island from Alaska, where he had successfully started a similar venture that provided the inspiration for Kauai Springs. After the county planning commission signed off on his proposal, the Satterfields got to work, steadily growing their family-owned and operated business.

They weren’t making much money, but the business employed their sons and paid the bills. Trouble with the planning department started just two years later, however, and the dispute has plagued the Satterfields ever since.

“Our competition filed a complaint cause we had a better product, and we were out selling ‘em,” Jim Satterfield said.

In 2006, Satterfield received a memo saying the planning commission, in response to a complaint from an unidentified party, had prompted an investigation into Kauai Spring’s right to access and distribute the water.

The commission had reversed its decision to issue water and land use permits, and the Satterfields were ordered to cease and desist on the grounds that water bottling manufacturers were not allowed to operate on land zoned for agriculture.

The Satterfields took the matter to court, where a Fifth Circuit judge sided with Kauai Springs. But an appellate court later overturned the ruling and sent the matter back to the planning commission, which subsequently issued another cease and desist order and considered the matter closed.

Undeterred, the Satterfields took the fight to the Hawaii State Supreme Court. The dispute had become so convoluted and legally complex by that point that Chief Justice Mark Recktenwald wrote that the case “requires us to further define the contours of the public trust doctrine with respect to water resources.”

The broadening statutory implications of the case did little to comfort the Satterfields. The Supreme Court sided with the appellate court, and the case was once again placed in the hands of the planning commission.

Meanwhile, operations at Kauai Springs had gone on largely uninterrupted. Business was good, all things considered. Jim Satterfield said at one point he had around a thousand regular customers, with hotels among his list of clientele.

For nearly five years following the state supreme court’s decision, the Satterfields battled the planning commission. Finally, a planning department hearing officer was assigned to the case, and following an investigation, recommended the commission grant the Satterfields their permits and allow Kauai Springs to operate.

Shortly thereafter, June 26, the commission overruled the hearing officer’s recommendation, in a unanimous 6-0 vote. The permits were denied.

“One of our major concerns here is public trust and how this has a potential impact upon present and future generations in the utilization of water and conservation of water, and how this has an impact upon the public trust responsibilities that we, here, have,” said Commission Vice Chair Glenda Nogami Streufert, as recorded in the meeting minutes. “So that was the primary thrust of our deliberations.”

Commissioner Kanoe Ahuna added that, “it was not only just the volume of water, like whether large or small, but the overall public trust of water rights and the public trust doctrine.”

Commissioner Kimo Keawe, later in that meeting, said, “The resources that we have — the land and the water — we need to make sure that the decisions that we make are not for a few; the decisions we make are for the public in general and to protect that trust that has been entrusted to us for future generations.”

“We are charged with the careful stewardship of Kauai lands and we take that very seriously, not just for today,” but also for tomorrow,” Streufert said.

Commissioner Sean Mahoney said at the meeting “this has been a very complicated case.”

He said they evaluated the evidence and went through a thorough process and the underlying factor behind their decision was the public trust.

“I think each and everyone of of us had a very difficult time in making this decision,” he said.

In July 2018, the planning director and county attorney were called to brief the county council on why the hearing officer’s recommendation was not followed.

According to the minutes of that meeting, then-Council Chair Mel Rapozo said he was still “confused as to why the planning commission would disregard the recommendation of the planning department and the advising deputy county attorney.”

He pointed out that the commission voted against the recommendation the day after receiving the hearing officer’s lengthy report.

“The commission either worked really fast, or it had already decided what the vote would be,” Rapozo said.

Regardless of what prompted the commission’s decision, the result was the same — Kauai Springs was once again ordered to shut down, this time the cease and desist order was followed by a $10,000 fine. When it arrived in the mail in April, the Satterfield’s finally decided to call it quits. Almost.

They shut down Kauai Springs and are in the process of dismantling their 15-year-old business, but earlier this month, their lawyers filed an appeal, contesting the fine and asking the planning commission to reconsider the case.

The protracted legal battle may prove to be a financial war of contrition, and the Satterfields are losing.

“We don’t have anything,” Denise Satterfield said earlier this month, while taking smoke break from cleaning out the building that had served as the Kauai Springs office and warehouse until a week before. “We lost our house.”

The Satterfields said they borrowed against their home mortgage to pay attorneys fees. The lawyers lost the case and the Satterfields lost their home. They now live in a studio apartment in Koloa and have no idea how to go about scraping together $10,000 to pay the planning commission’s fine.

“I don’t know how we’re gonna pay it,” Denise Satterfield said.

Her cigarette was interrupted when the phone rang. She went inside to answer and came back a few minutes later.

“Another cancelled account,” she said. “I’ve had 35 today.”

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Editor’s note: Chief Justice Mark Recktenwald did not author the Supreme Court opinion in this case. This story incorrectly stated he did. That has been removed.