The state cannot sell or transfer the 1.8 million acres of former Hawaiian monarchy lands, known as ceded lands, until the claims of Native Hawaiians to the property have been resolved, the Hawai'i Supreme Court ruled yesterday.

The Supreme Court ruling was a victory for the Office of Hawaiian Affairs.

Sherry Broder, one of the attorneys who argued the case on behalf of OHA, called the ruling "a tremendous victory for the Hawaiian people. I'm very excited about it."

The decision was a defeat for the state, which argued it had the right to sell ceded lands.

"We're disappointed with the decision," state Attorney General Mark Bennett said last night. "It is our belief that the state is and should be able legally to sell ceded lands. ... We think it's legal."

In the case of OHA vs. the Housing and Community Development Corporation of Hawai'i and the state of Hawai'i, the Supreme Court reversed an earlier Circuit Court judgment in favor of HCDCA and the state and ordered the lower court to bar the sale or transfer of ceded lands.

The court's decision cited 1.8 million acres of historical ceded lands. Broder said the amount was 1.4 million acres.

The case began in the mid-1990s when the state transferred parcels of ceded lands to private entrepreneurs on Maui and the Big Island for residential development. In 1995, OHA sought an injunction for the Maui and Big Island parcels, as well as any other ceded lands from the public lands trust.

The Supreme Court's decision yesterday cited generations of critical moments in Hawaiian history, dating to the 1893 overthrow of the Kingdom of Hawai'i and the surrender of crown, government and public lands to the United States; the admission of Hawai'i as a state; the creation of OHA and the public lands trust; and Congress' 1993 Apology Resolution 100 years after the overthrow.

"In our view," the justices held, "the Apology Resolution acknowledges only that unrelinquished claims (by Native Hawaiians) exist and plainly contemplates future reconciliation with the United States and the state with regard to those claims."

The court held that the Apology Resolution and related state legislation "give rise to the state's fiduciary duty to preserve the corpus of the public lands trust, specifically, the ceded lands, until such time as the unrelinquished claims of the Native Hawaiians have been resolved."

Bennett, the attorney general, and his staff were reviewing the 93-page decision last night and he said it was premature to comment on whether the state may appeal.

RENEWED FOCUS ON BILL

Various entities have been awaiting the court's ruling, Bennett said, but he was not immediately aware of any potential third party land transactions that might be affected.

"We'll have to take a better look at the facts to see what the immediate impact will be," Bennett said.

Bennett said, "We respectfully disagree with the Hawai'i Supreme Court that the Apology Resolution is any way relevant to the question of whether the state has a legal right to sell ... ceded lands. We believe and argued that the law clearly allowed the state to sell ceded lands. That was the contemplation of Congress when it passed the Admissions Act."

The Supreme Court's order for an injunction to bar the sale of the land until claims are resolved places new focus on the stalled Akaka bill in Congress, which could create a third party to resolve claims on the ceded lands, Broder said.

"The next step is having the creation of a Native Hawaiian entity to negotiate with the federal and state governments for the unrelinquished claims for the Hawaiian people," Broder said. "The court is keeping the corpus of the ceded lands intact until any claims can be resolved."

A STOPGAP MEASURE

In its ruling yesterday, the Supreme Court noted that OHA specifically asserted that it is not asking to resolve any claims to ceded lands "but only to protect the trust assets that are in dispute by issuing an injunction barring the sale or transfer of the (ceded) lands."

The court found that OHA merely wanted the court to protect the lands "until the political branches can reach a just solution to this dispute. In fact, the OHA plaintiffs admit that 'the ultimate resolution of the Native Hawaiian claims must be through the political processes, and it is actively engaged in these processes. But this struggle for justice will be futile if the assets in disputes (i.e., the ceded lands) no longer exist when a solution is found.' "

OHA issued a statement last night saying it "is pleased with the favorable opinion by the Hawai'i State Supreme Court in a case with important implications."

OHA attorneys scheduled a press conference for 1:30 p.m. today.

Reach Dan Nakaso at dnakaso@honoluluadvertiser.com.