A federal appeals court last week affirmed a lower court decision to dismiss a lawsuit that claimed the Office of Hawaiian Affairs is racially discriminatory.

The 9th U.S. Circuit Court of Appeals also affirmed U.S. District Judge J. Michael Seabright's order that plaintiffs' attorney H. William Burgess pay OHA $2,308.90 in compensation for making what Seabright described as "frivolous arguments."

Burgess said he is contemplating his legal options. An attorney for OHA said he was pleased with the decision.

The lawsuit Kuroiwa v. Lingle was filed by Burgess on behalf of six plaintiffs characterized in the suit as "non-ethnic Hawaiians": James Kuroiwa Jr., Patricia A. Carroll, Toby M. Kravet, Garry P. Smith, Earl F. Arakaki and Thurston Twigg-Smith. Most of the plaintiffs were involved in previous lawsuits against OHA.

The lawsuit charged that OHA exists to carry out "a racially discriminatory purpose to better the conditions of native Hawaiians and Hawaiians" at the expense of others. The lawsuit said money going to OHA from ceded land revenues should instead be benefitting all Hawai'i's people.

But Seabright sided with the argument made by state attorneys that the issues raised by Burgess had already been litigated in the 2002 case Arakaki v. Lingle. Filed by Burgess on behalf of 16 taxpayers, the Arakaki lawsuit also sought to stop the state's funding of OHA on constitutional grounds. That case was ended in March 2007 when U.S. District Judge Susan Oki Mollway declared the plaintiffs did not have standing to bring their claims.

The U.S. Supreme Court and 9th Circuit Court reviewed Mollway's decision in the Arakaki case and remanded the matter back to the judge. Burgess said Mollway declined to dismiss the case and suggested that he could file a new suit.

On Aug. 27, 2008, Seabright dismissed Burgess' new lawsuit, ruling that the Kuroiwa case "lacked an adequate legal basis, and a reasonable inquiry would have revealed that the complaint is baseless in light of Arakaki."

Burgess would have been able to avoid sanctions if kept his arguments to seeking a reversal of the Arakaki case, Seabright said. Instead, Seabright said, "Mr. Burgess put forth a series of frivolous arguments for why the court should not follow" the Arakaki ruling.

As a result, the court "concluded that an appropriate sanction to deter repetition of this conduct would be for Mr. Burgess to pay a portion of OHA defendants' attorneys' fees for those services that are directly and unavoidably caused by the violation."

The decisions are not a complete victory for the state and OHA.

OHA sought $50,223.80 from Burgess to pay for fees paid to three attorneys from the law firm McCorriston Miller Mukai MacKinnon who assisted in the case.

But Seabright said OHA and McCorriston attorney Robert Klein was not able to establish that all the firm's billable hours were a direct result of Burgess' frivolous actions.

Klein, an OHA legal counsel, said yesterday: "The 9th Circuit affirmed that it will not tolerate the filing of frivolous cases against OHA or the state of Hawai'i and will sanction lawyers who misguide their clients into believing that they can continue to litigate issues that have no merit whatsoever."

Burgess said he will ask the 9th Circuit Court for the three-member panel to rehear its decision or for an en banc review requiring a larger number of judges to hear the case.

"The state, as trustee, has a duty to uphold the 1.2 million acres of the ceded lands trust for the benefit of all the people of Hawai'i, not just the Native Hawaiian beneficiaries of the trust," Burgess said.

Klein said he was disappointed the court chose not to impose higher penalties against Burgess.