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NO. 22533 IN THE SUPREME COURT OF THE STATE OF HAWAI#I HAWAII GOVERNMENT EMPLOYEES ASSOCIATION, AFSCME, Local 152, AFL-CIO and UNITED PUBLIC WORKERS, AFSCME, Local 646, AFL-CIO, Plaintiffs-Appellants vs. LAWRENCE MIIKE, DIRECTOR, IN HIS OFFICIAL CAPACITY AS DIRECTOR, DEPARTMENT OF HEALTH, STATE OF HAWAI#I; STATE OF HAWAI#I DEPARTMENT OF HEALTH; BENJAMIN CAYETANO, IN HIS OFFICIAL CAPACITY AS GOVERNOR OF THE STATE OF HAWAI#I; HAWAI#I HEALTH SYSTEMS CORPORATION; HANA COMMUNITY HEALTH CENTER, INC., Defendants-Appellees and JOHN DOES 1-10; JANE DOES -10; DOE CORPORATIONS 1-10; DOE PARTNERSHIPS 1-10; ROE NON-PROFIT ORGANIZATIONS 1-10; and ROE GOVERNMENTAL ENTITIES 1-10 (97-032), Defendants APPEAL FROM THE FIRST CIRCUIT COURT (CIV. NO. 97-2555) SUMMARY DISPOSITION ORDER (By: Moon, C.J., Levinson, Nakayama, and Duffy, JJ.; and Acoba, J., Dissenting) Plaintiffs-Appellants Hawaii Government Employees Association, AFSCME, Local 152, AFL-CIO and United Public Workers, AFSCME, Local 646, AFL-CIO appeal from the: (1) September 5, 1997 Order granting Defendant Hana Community Health Center, Inc.'s (HCHC) July 7, 1997 Motion to Dismiss First Amended Complaint; (2) Findings of Facts; Conclusions of Law; and Order, filed January 7, 1999; (3) Judgment, filed February 1, 1999; (4) Notice of Entry of Judgment, filed February 1, 1999;

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(5) Amended Judgment, filed May 14, 1999; and (6) Notice of Entry of Amended Judgment, filed May 14, 1999, by the Circuit Court of the First Circuit, the Honorable Gail Nakatani presiding. On

appeal, the Plaintiffs-Appellants contend that the circuit court: (1) erred by its failure to extend Hana Medical Center (HMC) employees the protection of the merit principles under article XVI, section 1 of the Hawai#i Constitution; (2) misinterpreted and misapplied Acts 262 and 263 of the 1996 Session Laws in violation of constitutional and statutory merit principles because: (a) Act 263 "mentions nothing about civil service

positions," (b) implied exclusion from the civil service system is not permitted, (c) Act 263's authority to release HMC to a private nonprofit organization was conditional on the resolution of the issues in Section 2(2), (d) the circuit court did not consider the testimony of key legislators regarding the intent of the enactment, (e) resolution of the issue of employee status was a mandatory civil service law, (f) when Act 263 is read in pari materia with Act 262, control over HMC was transferred to HHSC and HMC positions were subject to HRS chapters 76 and 77, and (g) Act 262 preempts Act 263, so the HMC positions retained civil service protections; (3) improperly dismissed HCHC as a party because its contract with Defendants-Appellees was null and void as a violation of public policy; and (4) erred when it ignored the ultra vires acts of health administrators and failed to grant

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relief in mandamus against the HHSC Board. The seven

subcategories in Plaintiffs' point of error number two can be distilled into two issues: (1) whether Act 263 specifically

exempted the HMC positions from the civil service; and (2) whether resolution of the issues in Act 263 was a condition precedent to privatization. The subcategories dealing with

reading Acts 262 and 263 in pari materia are addressed in the ultra vires issue discussion. Upon carefully reviewing the record and the briefs submitted, we hold as follows: The circuit court did not err by failing to extend HMC employees the protection of merit principles under article XVI, section 1 of the Hawai#i Constitution. The plain language of Act 1996

263 mandated privatization of the HMC within two years.

Haw. Sess. L. Act 263,

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