Of Counsel: DAMON KEY LEONG KUPCHAK HASTERT Attorneys at Law A Law Corporation ROBERT H. THOMAS 4610-0 rht@hawaiilawyer.com MARK M. MURAKAMI 7342-0 mmm@hawaiilawyer.com VERONICA A. NORDYKE 10609-0 van@hawaiilawyer.com 1003 Bishop Street, Suite 1600 Honolulu, Hawaii 96813 www. hawaiilawyer.com Telephone: (808) 531-8031 Facsimile: (808) 533-2242 Attorneys for Defendant 2017 JUN 22 PH 3:28 BLOOD BANK OF HAWAII, a nonprofit corporation IN THE CIRCUIT COURT OF THE FIRST CIRCUIT STATE OF HAWAII HONOLULU AUTHORITY FOR RAPID) TRANSPORTATION, City and County of |) Honolulu, Plaintiff, vs. BLOOD BANK OF HAWAII, a Hawaii nonprofit corporation; ROSETTA RAMSEY FISH; MARIE SAUSET PETERS; JOHN DOES 1-25; JANE DOES 1-25; DOE PARTNERSHIPS 1-25; DOE CORPORATIONS 1-25; DOE ENTITIES 1- 25; and DOE GOVERNMENTAL UNITS 1- 25, Defendant. 354205 CIVIL NO. 17-1-0791-05 (BIA) (Condemnation) DEFENDANT BLOOD BANK OF HAWAII'S ANSWER TO PLAINTIFF’S COMPLAINT, filed May 15, 2017; DEFENDANT/COUNTERCLAIMANT BLOOD BANK OF HAWAII’S COUNTERCLAIM AGAINST PLAINTIFF HONOLULU AUTHORITY FOR RAPID TRANSPORTATION; DEMAND FOR JURY TRIAL; CERTIFICATE OF SERVICEDEFENDANT BLOOD BANK OF HAWAII'S ANSWER TO PLAINTIFF’S COMPLAINT, filed May 15, 2017 Defendant BLOOD BANK OF HAWAII (Blood Bank) responds to Plaintiff HONOLULU AUTHORITY FOR RAPID TRANSPORTATION’s (HART) Complaint, filed on May 15, 2017, as follows: 1. Paragraphs I, I, and III do not contain allegations and do not require a response. 2. Responding to the allegation in Paragraph IV, Blood Bank is without information or knowledge sufficient to form a belief as to its truth and on that basis denies it. 3. Responding to Paragraph V, Blood Bank admits that it is the owner of an interest in certain real property situate at Mokauea, Kalihi, Honolulu, Oahu, Hawaii, identified as Tax Map Keys 1-2-009-011 and 1-2-009-098. 4, Answering any and all other allegations of the Complaint to which Blood Bank has not previously responded, such allegations are denied. FIRST DEFENSE 5. The Complaint fails to state a claim upon which relief can be granted. SECOND DEFENSE 6. Neither the Plaintiff nor the City and County of Honolulu have properly authorized by resolution the condemnation of Blood Bank’s property. THIRD DEFENSE 7. HART does not have the delegated power of eminent domain. FOURTH DEFENSE 8. There is no public use or purpose for the taking under article I, section 20 of the Hawaii Constitution or under the Fifth and Fourteenth Amendments to the U.S. Constitution because completion of the rail project to its planned terminus at Ala Moana Center—accordingto HART’s own statements—is financially impossible or infeasible. This is an objection to public use or purpose under Haw. Rev. Stat. § 101-34 FIFTH DEFENS! 9. There is no public necessity for the taking, SIXTH DEFENSE 10. HART’s attempt to condemn Blood Bank’s property is not in accordance with the requirements of Haw. Rev. Stat. Ch. 101 or other governing law, and thus is a deprivation of Blood Bank's property without due process of law, in violation of article I, section 5 of the Hawaii Constitution, and the Fifth and Fourteenth Amendments of the United States Constitution. SEVENTH DEFENSE 11 HART’s attempt to condemn Blood Bank’s property is a breach of HART’s duty of good faith and fair dealing EIGHTH DEFENSE 12, HART is acting with improper motives, in bad faith, or for some other purpose amounting to a manifest abuse of its power of eminent domain, or a pretextual exercise of eminent domain, NINTH DEFENSE 13, HART lacks standing to commence and maintain the claims asserted in the Complaint. TENTH DEFENSE 14, HART failed to join parties whose presence is needed for just adjudication.ELEVENTH DEFENSE 15. Despite the property sought to be condemned constituting only a portion of a larger tract, HART has not assessed the damages which will accrue to the portion not sought to be condemned by reason of its severance from the portion sought to be condemned, and the construction of the improvements in the manner proposed by the plaintiff shall also be assessed, and also how much the portion not sought to be condemned will be specifically benefited, if at all, by the construction of the improvement proposed by the plaintiff. ADDITIONAL DEFENSES 16. Blood Bank asserts any other basis for an avoidance or affirmative defense under Haw. R. Civ. P. 8(c) and reserves the right to assert additional defenses as they become apparent during the course of the litigation. WHEREFORE, Blood Bank requests that the Complaint be dismissed and that it recover all such damage as may have been sustained by Blood Bank by reason of the bringing of the proceedings and the possession by HART of the property concerned including Blood Bank’s costs of court, a reasonable amount to cover attorneys’ fees paid by Blood Bank in connection therewith, and other reasonable expenses; and the possession and unencumbered title to the property concemed shall be restored to Blood Bank, and such other relief as this Court deems just and proper. If the Complaint is not dismissed, Blood Bank requests that the respective interests of all persons with an interest in the property and the larger parcel be determined and that appropriate orders be entered thereon, and that the court determine and award the just compensation and damages, including but not limited to blight of summons, to which Blood Bank is entitled by virtue of the taking and damaging of its property, severance damages to the remaining propertyand larger parcel, interest, costs of court, and a reasonable amount to cover attorneys’ fees paid by the defendant in connection therewith, and other reasonable expenses. DATED: Honolulu, Hawaii, June 22, 2017. DAMON KEY LEONG KUPCHAK HASTERT WY ROBER’ THOMA‘ MARK M. MURAKAMI VERONICA A. NORDYKE Attomeys for Defendant BLOOD BANK OF HAWAIIIN THE CIRCUIT COURT OF THE FIRST CIRCUIT STATE OF HAWAII HONOLULU AUTHORITY FOR RAPID) CIVIL NO. 17-1-0791-05 (BIA) TRANSPORTATION, City and County of =) (Condemnation) Honolulu, DEFENDANT/COUNTERCLAIMANT Plaintiff, BLOOD BANK OF HAWAIL’S COUNTERCLAIM AGAINST vs. PLAINTIFF HONOLULU AUTHORITY FOR RAPID BLOOD BANK OF HAWAII, a Hawaii TRANSPORTATION nonprofit corporation; ROSETTA RAMSEY FISH; MARIE SAUSET PETERS; JOHN DOES 1-25; JANE DOES 1-25; DOE PARTNERSHIPS 1-25; DOE CORPORATIONS 1-25; DOE ENTITIES 1- 25; and DOE GOVERNMENTAL UNITS 1- 25, Defendant. a) DEFENDANT/COUNTERCLAIMANT BLOOD BANK OF HAWAI’S COUNTERCLAIM AGAINST PLAINTIFF HONOLULU AUTHORITY FOR RAPID TRANSPORTATION Defendant BLOOD BANK OF HAWAII (Blood Bank), for its Counterclaim against Plaintiffs HONOLULU AUTHORITY FOR RAPID TRANSPORTATION (HART) alleges and avers as follows: INTRODUCTION 1. HART is recklessly subjecting Hawaii's blood supply to grave but unnecessary risks. HART’s taking of the entire Dillingham frontage of Blood Bank’s property by eminent domain, will, among other risks, prohibit bloodmobiles’ access to the parking lot and inhibit safe access for blood delivery vehicles, and the operation of a heavy steel-wheeled rail trains for 20 hours per day, seven days a week only feet outside Blood Bank’s laboratory and blood storage operation, will, as multiple studies detail, subject the public’s blood supply to safety, licensing, 354284 sand accreditation risks. HART possesses all of these studies, yet has not meaningfully responded. Instead, it has stonewalled, misrepresented facts to the City Council and to the public, and barreled forward without even knowing how the public is going to pay the billions of dollars necessary to continue the rail project past Middle Street. 2. HART has even refused to cooperate with Blood Bank by providing a schedule of HART's on-site activities, so that Blood Bank can ensure that these activities will not currently interfere with Blood Bank’s ability to maintain the continuity of the blood supply and blood delivery. HART has allowed its employees, agents or contractors, to trespass on and otherwise physically invade Blood Bank’s property without advance notice, and has, among other things, spray paint survey marks without seeking Blood Bank’s permission, or obtaining a right of entry under Haw. Rev. Stat. § 101-3. 3. HART has also expressly instructed its appraiser to not even look at, much less assess, the obvious severance damages which taking an essential portion of Blood Bank’s property will have on Blood Bank’s operations, including its ability to use its Dillingham property and its Young Street blood collection facility together. Hawaii and federal law requires an assessment of severance damages (damages which will accrue to the portion of Blood Bank’s property not sought to be condemned by reason of its severance from the portion sought to be condemned), when only a portion of a parcel is being taken. 4, HART also relies on a legally insufficient resolution as authority for this taking, which failed to identify the correct owner despite it being a matter of public record. HART’s director also testified to the City Council to not even know that his agency had instituted this, lawsuit to condemn Blood Bank’s property, even though he signed a swom affidavit used insupport of HART’s motion to immediately seize Blood Bank’s property during this condemnation action. PARTIES Blood Bank of Hawaii 5. Defendant BLOOD BANK OF HAWAII, a Hawaii nonprofit corporation that provides collects, processes, stores, and distributes lifesaving human blood products to civilian and military hospitals across the State of Hawaii, was established in February of 1941. At that time, Blood Bank served as a wartime agency under the Office of Civilian Defense. 6. Blood Bank played an integral, lifesaving role in the aftermath of the attack on Pearl Harbor. In 1943, Blood Bank became a Hawaii nonprofit corporation. Blood Bank is and ‘was at all relevant times mentioned herein, incorporated in Honolulu, Hawaii 7. Blood Bank’s mission is to provide a safe, reliable, and adequate supply of blood, blood products, and related transfusion services to patients throughout the State of Hawaii. Blood Bank is the sole blood provider to all 18 hospitals statewide and provides supplemental and emergency support to Tripler Army Medical Center, Bank is under contract to provide blood products; if it does not have donated blood, it must acquire it by purchase from mainland blood banks. Blood Bank employs over 120 qualified professionals, including a medical director, phlebotomists, and laboratory technologists who collect, prepare, and distribute blood products statewide. Blood Bank also provides the blood which enables Hawaii's hospitals to provide organ transplants and heart surgeries, and this blood provides the infrastructure for the establishment of Hawaii's trauma centers, neonatal and pediatric intensive care units, and oncology centers. Over the course of its more than seventy-five years of operations, Blood Bank has saved thousands of lives, and continues to meet the ever-increasing health needs of Hawaii’sgrowing population, Today, Blood Bank supplements its Young Street donations with statewide bloodmobile or other mobile drives which add challenges to operations in terms of transportation, access and efficiency. HART 8. Plaintiff HART is, as it calls itself, a “semi-autonomous” agency of City and County of Honolulu which is a municipal corporation of the State of Hawaii. In November 2010, the voters of the City and County of Honolulu amended the Revised Charter to create HART, to oversee planning, construction, and operation of the Honolulu rail project. HART is governed by a ten-member Board of Directors (HART Board). HART has not been delegated the power of eminent domain, either by the State of Hawaii, or by the City and County of Honolulu JURISDICTION AND VENUE 9. This court has jurisdiction over this matter and the parties pursuant to Haw. Rev. Stat. §§ 603-21.5, 661-1, 632-1 and 634-35, in that the parties are all residents of the City and County of Honolulu, Blood Bank's operations are based in the City and County of Honolulu, even though it services civilian and military hospitals on Oahu and neighbor islands, and the property which HART is attempting to condemn is located in the City and County of Honolulu. 10. Venue is proper in the First Circuit pursuant to Haw. Rev. Stat. § 603-36. FACTS: Blood Bank’s Property and Operations 11. Blood Bank is presently the owner of a fee simple interest in real property situate at Mokauea, Kalihi, Honolulu, Oshu, Hawaii, identified as Tax Map Keys 1-2-009-011 and 1-2-009-098. 12, This was and is an improved property, on which is located a two-story concrete building which houses Blood Bank's headquarters, which include its blood componentproduction facility, distribution facility, Immunohematology Reference Laboratory, liquid and frozen rare blood repository, enterprise computer system, and administrative offices, and formerly, Blood Bank’s primary donation center. 13, The property enjoyed direct access to both Dillingham Street from two driveways along its main frontage and another driveway providing access to Puuloa Road. This Counterclaim will refer to this property and building collectively as the “Dillingham Operations Center.” 14, In December 1988, Blood Bank Real Property, Inc. (BBRPD, acquired title to the Dillingham Operations Center. 15, After the purchase, Blood Bank retrofitted the existing building on the site to meet its specific needs, and to create its central blood processing, collection, and storage facility. 16. At about the same time, BBRPI leased the Dillingham Operations Center to Blood Bank. 17, The property was selected specifically to serve as Blood Bank's statewide operations center because of, inter alia, the property’s: (1) central location, (2) close proximity to the Honolulu International Airport and the interisland and general aviation terminals, (3) size and ability accommodate pharmaceutical-grade ventilation and disposal systems capable of handling blood products, and (4) accessibility to and from roadways, which enable emergency vehicles to quickly transport blood and blood products to and from the site. 18. Accessibility to and from Blood Bank’s Operations Center was, and remains, a critical aspect of Blood Bank’s operations 19, Today, the Dillingham Operations Center is the nerve-center of Blood Bank’s statewide operations, including blood component manufacturing, testing, blood storage anddistribution, which include an ancillary brick-and-mortar blood donation center on Young Street (which was leased in anticipation of the rail transit project’s impacts to the Dillingham Operations Center), Virtual Donor Centers, as well as a fleet of blood donation vehicles. 20. All donated blood is delivered from the ancillary facilities to the Dillingham Operations Center for processing and storage, before distribution to individuals in need. 21, In September 2014, BBRPI canceled Blood Bank’s lease and transferred ownership of the Dillingham Operations Center to Blood Bank. 22. This conveyance was recorded on September 16, 2014. 23. Today, and from the very beginning of the HART’s efforts to acquire the site, Blood Bank—not BBRPI—has owned the Dillingham Operations Center. 24. BBRPI has had no interest in the Dillingham Operations Center at any time during the times relevant to this Counterclaim, or to the Complaint. 25, Blood Bank has searched for, but has been unable to locate, a suitable property to which is could relocate its blood processing and storage operations. 26. Faced with the ominous circumstance of HART"s threatened impending construction on Dillingham Boulevard, Blood Bank decided to relocate its donor operations to its Young Street satellite donor center on January 7, 2015, 27. The Young Street property had to undergo major renovations to allow it to handle the volume of blood donors previously accomplished at the Dillingham Operations Center. 28. On January 5, 2016, after a lengthy search, Blood Bank opened up the renovated blood donation center on Young Street; the Young Street Blood Donation Center, 29. Today, the Young Street Blood Donation Center serves as Blood Bank's primary donation center.30. The Young Street Blood Donation Center is located several miles from the Dillingham Operations Center, which allows for quick transportation of blood to the Dillingham Operations Center several times daily. 31. There is no redundaney for this operational network, and interference with either the Young Street facility or the Dillingham Boulevard facility would severely impair Blood Bank’s operations and its ability to provide a safe and reliable blood supply to the people of Hawaii 32. Since the relocation of the donor operations, Blood Bank’s blood donation has dropped off like was experienced when the Blood Bank relocated its original Queen Street facility to the Dillingham Operations Center. 33. Blood Bank warmed HART that blood donations fall off when the donation centers move. The Rail 34, On August 10, 2005, the City Council of the City and County of Honolulu adopted Ordinance 05-027 by a 7 to 2 vote, approving the establishment of a general excise tax surcharge for the City and County of Honolulu to fund a mass transit project. 35, The rail project, as HART presently represents to the public, consists of a 21- station, elevated concrete guideway, steel-wheel-on-steel-rail train from Kapolei to Ala Moana Center. 36. Initially, the City provided estimated to the public that the total cost of the rail ‘would be $5,120,000,000 (with a committed federal share of $1.55 billion), and an estimated a completion date of January 31, 2020. These public figures have, over the course of HART’s involvement, ballooned exponentially.37. Although HART has undertaken study of the environmental impacts of the rail project, the Environmental Impact Statement, relied upon to comply with the National Environmental Policy Act, 42 U.S.C. § 4321, and Hawaii’s Environmental Policy Act, Haw. Rev, Stat. ch. 343, did not analyze the impacts of the project on the public’s blood supply. HART & Blood Bank—Initial Interactions 38. On March 28 and 29, 2014, HART sent BBRPI the then-recorded owner, a Letter of Intent to Acquire and an Appraisal Site Inspection Request for TMK 1-2-009-011 and TMK. 1-2-009-098, respectively, 39. In response, on July 23, 2014, HART’s appraiser was permitted to enter the site to consider it for a partial take which was contemplated to comprise the entire Dillingham frontage, including a portion of the Dillingham driveway. 40. Just over a month later, on September 10, 2014, Blood Bank submitted a letter and report to HART, which informed HART that construction and operation of the rail would have catastrophic and unacceptably risky consequences, and thus full relocation was necessary for Blood Bank to remain operational (Blood Bank Report) 41, The Blood Bank Report included a report by a Food and Drug Administration (FDA) consultant, specializing in FDA compliance, outlining the serious risks and impacts of even a partial taking, as well as the eventual operation of the rail right outside of Blood Bank’s windows 42, On January 23, 2015, HART sent BBRPI a Letter of Offer to acquire only a portion of the Dillingham Operations Center. 43. Over the next thirteen months, in an effort to resolve the matter without jeopardizing the public’s blood supply, Blood Bank representatives meet with members of theCity Council and the state Legislature in an effort to secure relocation of Blood Bank’s Operations Center to another site, one that would be unaffected by HART’s construction eventual operation, City Council Allocated $3 Million To Relocate Blood Bank 44, In response to Blood Bank’s operational concerns over the safety to the public’s blood supply caused by HART, on March 2, 2015, City Council Chair Ernest Martin, introduced an amendment to the HART Budget for the 2015-2016 fiscal year (Ordinance 15-28), which appropriated $3,000,000 to fund the relocation of Blood Bank’s Dillingham Operations Center to a site away from the rail project. 45, On June 3, 2015, City Council unanimously voted to adopt Councilmember Martin's proposed amendment of Ordinance 15-28. 46. On June 12, 2015, Blood Bank representatives met with HART representatives to discuss relocation of the Dillingham Operations Center. 47, On June 22, 2015, Ordinance 15-28 became law, without Mayor Kirk Caldwell’s signature 48, Ordinance 15-28 correctly notes the owner of the Dillingham Operations Center, Blood Bank. 49, To date, HART has failed to utilize these budgeted funds to relocate Blood Bank. HART"s First Attempt to Condemn Blood Bank 50, On July 24, 2015, despite Blood Bank’s ongoing communications with HART, council members and legislators, as well as Ordinance 15-28, HART notified Blood Bank of its intent to partially condemn the Dillingham Operations Center.51, Later the same day, HART sent Blood Bank a Notice of Recommendation for Eminent Domain Action, 52, Less than a week later, on July 30, 2015, the HART Board adopted HART Resolution 2015-48, which formalized HART’s intent to condemn Blood Bank, 53. Despite it being a matter of public record (recorded title) and common knowledge that Blood Bank owned the Dillingham Operations Center, a fact which a simple title search would have revealed, HART Resolution 2015-48 included exhibits which wrongfully designated BBRPI as the owner of the Dillingham Operations Center. City Council Rejected HART’s Attempt to Condemn Blood Bank 54. On August 3, 2015, HART notified City Council through Departmental Communication No. 573 of its intent to acquire four properties by eminent domain, including Blood Bank’s Dillingham Operations Center. 55. On September 2, 2015, through City Council Resolution 15-221, CDI, City Council unanimously denied HART’s resolution to partially condemn the Dillingham Operations Center. 56. Additionally, through City Council Resolution 15-221, CD1, the City Council re- emphasized HART’s obligations under Ordinance 15-28, which appropriated three million dollars ($3,000,000) to HART for the full relocation of Dillingham Operations Center. 57. City Council Resolution 15-221 incorrectly named BBRPI as the owner of the Dillingham Operations Center. Blood Bank Is Prepared to Relocate 58, In anticipation that HART would next attempt to condemn the entire Dillingham 10 Operations Center, or purchase the entirety of the site, Blood Bank retained an appr: 10conduct a complete appraisal, which includes a record of the severance damages which would be suffered in the event of a partial taking. 59. Blood Bank also completed a relocation survey, as required under the federal Relocation Act. 60. Blood Bank also provided HART with an inventory of its personal property, for relocation purposes. 61. Blood Bank also began looking at alternate, suitable properties 62, On January 5, 2016, Blood Bank relocated the entirety of its exis 1@ donation facility from Dillingham Operations Center to Young Street. Blood Bank no longer uses the Dillingham Operations Center for blood donation, 63, Despite exhaustive efforts, to date, Blood Bank has not been able to find a ty, distribution facility, suitable replacement property for its blood component production faci Immunohematology Reference Laboratory, liquid and frozen rare blood repository, enterprise computer system, and administrative offices, HART’s Second Blood Bank Condemnation 64. On February 12, 2016, representatives from HART and Blood Bank met and discussed, inter alia, Blood Bank’s appraisal and the estimated cost of relocation (collectively Blood Bank's Damages). 65. On February 18, 2016, possibly in response to the magnitude of Blood Bank's Damages, as shown through Blood Bank’s appraisal and relocation costs, HART Board adopted a second resolution, Resolution 2016-4, which re-notified City Council of HART’s intent to condemn the entire frontage of the the Dillingham Operations Center.66. HART Resolution 2016-4 attached the same incorrect exhibits as Resolution 2015-48, which wrongly identified BBRPI as the owner of the Dillingham Operations Center. 67. On February 24, 2016, HART transmitted Resolution 2016-48 to City Council for review through Departmental Communication No. 99. 68. On February 25, 2016, in an attempt to avoid the time and expenses of an eminent domain proceeding, Blood Bank sent HART an offer to sell the Dillingham Operations Center, in full, for $4,989,103, plus relocation costs. 69. OnMarch 10, 2016 HART rejected Blood Bank’s offer. At the Last Minute, and Without Notice, the City Council Reneged on its Promises to Blood Bank and Allowed HART to Take a Critical Portion of the Dillingham Operations Center 70, On February 24, 2016, City Council Chair Martin, introduced Resolution 2016- 48, approving HART’s partial acquisition of the Dillingham Operations Center. 71. On March 1, 2016, Resolution 2016-48 was heard before the Committee on Executive Matters and Legal Affairs. 72. The Committee on Executive Matters and Legal Affairs objected to HART's partial acquisition of the Dillingham Operations Center, and amended the resolution to reflect this position (Resolution 2016-48, CD1). 73, On March 16, 2016, while Resolution 2016-48 was up for third hearing, City Council members voted to amend the text of the resolution that it had heard twice to completely gut it, and replace it with a version that was 180-degrees against the prior recommendation of the Committee on Executive Matters and Legal Affairs. 74, The amended version, Resolution 2016-48, CD1, FDI, at the last minute switched City Council’s position from objecting to the taking, to approving HART’s condemnation of Blood Bank. 1275. The FD1 amendment failed to conform to Couneil Rule 19(e) which required the Couneil to provide the property owner and public with at least 48 hours’ notice before allowing the resolution to be read and approved. The City Council recognized this failure, but instead of complying with it, City Council members voted to waive the requirement without the public or Blood Bank’s consent. 76. Thus, Resolution 2016-48 was not available to the public for forty-eight (48) hours. 77. Blood Bank was not served with a copy of the FD1 amendment. 78. All versions of City Council Resolution 2016-48 incorrectly name BBRPI as the owner of the Dillingham Operations Center. 79, In other words, the Council has only approved the taking of BBRPI’s property, and not Blood Bank’s. 80. On April 21, 2016, the HART Board voted to proceed with eminent domain, and forcibly deprive Blood Bank of its property. HART’s Public Unraveling: ‘nancial and Managerial Problems 81. A little over a month later, HART’s and the Project’s ongoing financial and managerial problems came to a head. 82. On June of 2016, HART’s Project Management Oversight Consultant issued a Risk Report, which updated estimated cost of the Project to between $7,073,000,000 - $8,010,000,000 dollars, excluding financing costs, and further guessed that completion would be delayed until 2024 (PMOC Risk Report). 83, Also around this time, on June 6, 2016, the Federal Transit Authority (FTA) sent City Mayor, Kirk Caldwell, a letter requiring that the City provide the FTA with a recovery plan 1Boutlining how it planned to complete the Project in light of the budget increases and increased timeline (Recovery Plan). 84, Two months later, on August 16, 2016, HART’s then-executive Director Dan Grabauskas resigned in disgrace, one step ahead of being fired. 85. Despite HART’s obvious financial and managerial troubles, on August 30, 2016, FTA reminded HART that its funding is contingent upon completion of the rail project according to HART’s original plan, and thus HART faced two choices: (1) repay the FTA or (2) find a way to bridge the $3,000,000,000 billion dollar funding gap between HART’s budget and its then- current representation of the cost to the public. 86. HART’s Environmental Impact Statement has not studied the financial viability of the project in light of the changed circumstances associated with the dramatically escalating project costs, including construction costs. HART’s Present Position 87, In October 2016, HART Board appointed K.N. Murthy as the interim Chief Executive Officer and Executive Director of HART. 88. In December of 2016, HART submitted an interim financial plan to the FTA, which estimated the Project to costs $9,500,000,000 billion, over $1,000,000,000 billion more than the PMOC Risk Report completed just six months earlier. 89. Additionally, on January 18, 2017, in an attempt to make up the huge amounts needed for the rail project, HART introduced or tracked over twelve funding measures during the 2017 Legislative session. 490. — While these measures laid pending before the Legislature, on April 28, 2017, HART sent FTA an updated Recovery Plan, and updated the estimated rail project cost to $8,165,000,000 billion dollars with a completion date of December 2025. 91. Because of the pending legislation, the updated Recovery Plan also acknowledged that HART could not state precisely how the rail project would be funded. 92, On May 4, 2017, the 2017 legislative session ended without agreement over whether or how to make up HART’s massive budget shortfall; none of HART's tracked measures passed. 93. Atpresent, HART’s money is expected to run out in January 2018. 94. Despite the financial uncertainty, on May 15, 2017 HART filed a condemnation action against Blood Bank. 95, On April 24, 2017, Director Murthy signed an affidavit in support of HART’s Ex Parte Motion For An Order Putting Plaintiff in Possession. 96. But on May 16, 2017, when City Council Budget Committee on Committee asked HART CEO Murthy to update the City Council of matters relating to Blood Bank, Murthy testified before the Council Budget Committee and responded oppositely stating, “I was not aware of the complete negotiations [with Blood Bank].”” 97. When asked about HART’s lawsuit, Murthy responded, “I did not know.” 98. As stated above, HART had filed the complaint one day earlier, on May 15, 2017. COUNT I- DECLARATORY RELIEF 99. Blood Bank hereby incorporates and adopts each and every allegation in the preceding paragraphs. 100. Pursuant to Haw. Rev. Stat, § 632-1, there is an actual controversy between the parties which has given rise to uncertainty. 15101. Blood Bank has a concrete interest in the Property and HART asserts an interest in the Property. 102. A declaratory judgment will serve to terminate that uncertainty and controversy between HART and Blood Bank. 103. Blood Bank is entitled to a declaratory judgment that HART’s attempt to condemn the Property is invalid, illegal, or unconstitutional. COUNT Il- INVALID CONDEMNATION 104, Blood Bank hereby incorporates and adopts each and every allegation in the preceding paragraphs. 105. HART and failed to adequately identify the correct owner of the Dillingham Operations Center. 106. The passage Resolution 2016-48 was flawed and was not adopted by the legally required process, and therefore is void ab initio. 107. As such, HART has not complied with the requirements of Haw. Rev. Stat. Ch. 101. 108. As a consequence, Blood Bank is entitled to declaratory judgment that HART’s attempt to condemn the Property is invalid, illegal, or unconstitutional. COUNT Ill - INVERSE CONDEMNATION 109. Blood Bank hereby incorporates and adopts each and every allegation in the preceding paragraphs. 110. Blood Bank possesses constitutionally recognized and protected property interests. 111, HART has inversely condemned Blood Bank’s property through its actions. 16112, HART, by its actions alleged above, without legal authority and without providing just compensation and damages, has taken or inversely condemned Blood Bank’s property, including, but not limited to blight of summons between the adoption of the Resolution and the date of Summons. 113. HART, by its actions alleged above, without legal authority and without providing just compensation and damages, has taken, inversely condemned, and trespassed upon Blood Bank’s property. COUNT IV - SEVERANCE DAMAGES 114, Blood Bank hereby incorporates and adopts each and every allegation in the preceding paragraphs. 115, The condemnation of the Dillingham Operations Center will cause severance damages to the remainder of Dillingham Operations Center as well as its operations state-wide 116, HART has never appraised or otherwise determined Blood Bank’s severance damages necessitating this counterclaim for inverse condemnation. 117. As a result of the condemnation, Blood Bank has suffered and will continue to suffer damage and irreparable harm. COUNT V -BAD FAITH CONDEMNATION Severance Damages 118. Blood Bank hereby incorporates and adopts each and every allegation in the preceding paragraphs. 119. HART is only partially acquiring Blood Bank’s property. 120. Under Hawaii law, a partial condemnation requires an assessment of damages to the property remaining after the condemnation. These are called severance damages. 121, HART has not appraised the severance damages,122, HART instructed its appraisers to not appraise the severance damages. 123, HART did not offer to compensate Blood Bank for any severance damages, 124, Under the Uniform Relocation Act, HART was required to negotiate in good faith and provide @ good faith offer to resolve this dispute. 49 C.F-R. 24.102; 42 U.S.C. 4651 125, By failing to analyze, much less appraise, the severance damages, HART is not assessing a mandatory measure of damages guaranteed by the U.S. Constitution, Hawaii State Constitution and Haw. Rev. Stat. Ch. 101 126. This action constitutes bad faith condemnation. 127, Blood Bank has suffered damage on account of HART’s bad faith condemnation. COUNT VI - BAD FAITH CONDEMNATION Financial Infeasibility 128. Blood Bank hereby incorporates and adopts each and every allegation in the preceding paragraphs. 129. At present, the Project is financially infeasible. 130. In light of this, HART is acting in bad faith by bringing condemnation proceedings for the Dillingham Operations Center. 131. Blood Bank has suffered damage on account of HART’s bad faith condemnation. COUNT VII - HAWAII REVISED STATUTES CH. 343 132, Blood Bank hereby incorporates and adopts each and every allegation in the preceding paragraphs. 133. The institution of condemnation proceedings to partially acquire the Dillingham Operations center is an “action” under Haw. Rev. Stat. Ch. 343. 134, This action has potentially significant impacts to the environment. 18135. Because there have been substantial changes to the Project’s finances and timing of project impacts, a supplemental environmental impact statement (SEIS) must be conducted before the Project can proceed. 136. Blood Bank is entitled to a declaration that before any further steps be made in furtherance of the action, i.e. the condemnation of the Dillingham Operations Center, that HART conduct a SEIS in accordance with Haw. Rev. Stat, Ch, 343 and the administrative rules promulgated thereunder. 137. Blood Bank is entitled to injunctive relief to prevent the partial condemnation of the Dillingham Operations Center until a SEIS is prepared. COUNT VIII - TRESPASS. 138, Blood Bank hereby incorporates and adopts each and every allegation in the preceding paragraphs. 139, On or about February 2017, HART employees, contractors or agents, entered onto the Property without permission to conduct survey activities. 140, Blood Bank did not give permission for such survey activities nor were they compensated for the entry. 141, HART employees, contractors, or agents, left spray-painted markings on Blood Bank’s property without restoring it to the pre-entry condition. 142. Blood Bank was damaged by HART’s trespass. COUNT IX ~ FEDERAL SUBSTATIVE AND PROCEDURAL DUE PROCESS 143, Blood Bank hereby incorporates and adopts each and every allegation in the preceding paragraphs. 19144, The Due Process Clause of the Fifth Amendment to the U.S. Constitution, as incorporated and applied to the States through the Fourteenth Amendment, provides that “[nJo person shall ... be deprived of life, liberty, or property, without due process of law... ..” 145, Blood Bank possesses constitutionally recognized and protected property interests. 146, In bringing the condemnation action, HART violated Blood Bank’s Due Process rights under the United States Constitution by acting arbitrarily and capriciously by failing to provide a proper public purpose, by relying on a procedurally flawed Resolution 2016-48, and waiting over one year before filing the Complaint and Summons. 147, Asa direct result of HART’s actions, Blood Bank has suffered and will continue to suffer damage and irreparable harm, COUNT X - SUBSTANTIVE AND PROCEDURAL DUE PROCESS UNDER THE HAWAII CONSTITUTION 148. Blood Bank hereby incorporates and adopts each and every allegation in the preceding paragraphs. 149, The Due Process Clause of the Hawaii Constitution provides that “[nJo person shall be deprived of life, liberty or property without due process of law ... .” Haw Const. art. I, §5. 150, Blood Bank possesses a constitutionally recognized and protected property interest as set forth in article I, sections 5 and 20 of the Hawaii Constitution, 151. In bringing the condemnation action, HART violated Blood Bank’s Due Process rights under the United States Constitution by acting arbitrarily and capriciously by failing to provide a proper public purpose, by relying on a procedurally flawed Resolution 2016-48, and waiting over one year before filing the Complaint and Summons. 20152. Asa direct result of HART’s actions, Blood Bank has suffered and will continue to suffer damage and irreparable harm. PRAYER FOR RELIEF WHEREFORE, Blood Bank respectfully requests: ‘A. That the Court enter judgment in favor of Blood Bank and against HART, granting Blood Bank the remedy of declaratory relief, injunctive relief, and damages; B. That the Court order, inter alia, the following: (1) a dismissal of HART ’s Complaint in Eminent Domain; and (2) any other orders that are proper or are required to do justice; C. That the court enjoin HART from prosecuting the Complaint against Blood Bank; D. The court declare HART ’s attempt to condemn Blood Bank invalid, arbitrary, and capricious; E. Blood Bank be awarded damages as proven at trial; F, Blood Bank be awarded his reasonable attorneys’ fees and costs; and G. The court award other and further relief as it d ems proper. DATED: Honolulu, Hawaii, June 22, 2017. DAMON KEY LEONG KUPCHAK HASTERT Vom Juma = ROBER™ MAS) MARK M. MURAKAMI VERONICA A. NORDYKE, Attomeys for Defendant BLOOD BANK OF HAWAIL 2IN THE CIRCUIT COURT OF THE FIRST CIRCUIT STATE OF HAWAII HONOLULU AUTHORITY FOR RAPID CIVIL NO, 17-1-0791-05 (BIA) TRANSPORTATION, City and County of (Condemnation) Honolulu, DEMAND FOR JURY TRIAL Plaintiff, vs. ) ) ) ) ) ) } BLOOD BANK OF HAWAII, a Hawaii) nonprofit corporation; ROSETTA RAMSEY ) FISH; MARIE SAUSET PETERS; JOHN) DOES 1-25; JANE DOES 1-25;DOE PARTNERSHIPS 1-25; DOE ) CORPORATIONS 1-25; DOE ENTITIES 1- ) 25; and DOE GOVERNMENTAL UNITS 1-) 25, ) ) ) ) Defendant. DEMAND FOR JURY TRIAL Defendant BLOOD BANK OF HAWAII demands a trial by jury on all issues so triable in the instant action. DATED: Honolulu, Hawaii, June 22, 2017. DAMON KEY LEONG KUPCHAK HASTERT Va fe ROBERT H. THOMAS MARK M, MURAKAMI VERONICA A. NORDYKE Attomeys for Defendant BLOOD BANK OF HAWAII 351084_sIN THE CIRCUIT COURT OF THE FIRST CIRCUIT STATE OF HAWAIL HONOLULU AUTHORITY FOR RAPID) CIVIL NO, 17-1-0791-05 (BIA) TRANSPORTATION, City and County of ) (Condemnation) Honolulu, CERTIFICATE OF SERVICE Plaintiff, vs. BLOOD BANK OF HAWAII, a Hawaii nonprofit corporation; ROSETTA RAMSEY FISH; MARIE SAUSET PETERS; JOHN DOES 1-25; JANE DOES 1-25; DOE PARTNERSHIPS 1-25; DOE CORPORATIONS 1-25; DOE ENTITIES 1- 25; and DOE GOVERNMENTAL UNITS 1- 25, Defendant. CERTIFICATE OF SERVICE I HEREBY CERTIFY that on this date, a true and correct copy of the foregoing document was duly served upon the following party by hand delivery to their last known address, as follows DONNA Y.L. LEONG, ESQ. DON S. KITAOKA, ESQ. RICHARD D. LEWALLEN, ESQ Deputies Corporation Counsel City and County of Honolulu 530 South King Street, Room 110 Honolulu, HI 96813 350284 5DATED: Honolulu, Hawaii, June 22, 2017. DAMON KEY LEONG KUPCHAK HASTERT en HOMAS ~ MARK M. MURAKAMI VERONICA A. NORDYKE. Attorneys for Defendant BLOOD BANK OF HAWAII 35028¢_s 2