The Lorenzo doctrine was adopted by the federal courts in the Ninth Circuit for jurisdictional purposes but it has been used in the land title insurance industry for denying insurance claims.
In 1994, the State of Hawai‘i Intermediate Court of Appeals (“ICA”) heard an appeal where the defendant-appellant, Anthony Lorenzo, was seeking an appeal that the trial court committed an error when his motion to dismiss his indictment was denied, which led to his conviction. Lorenzo argued that the Hawaiian Kingdom continues to exist because the overthrow of the Hawaiian government on January 17, 1893, was illegal. And since he was a citizen of the kingdom, the trial court did not have any jurisdiction over him. The case was State of Hawai‘i v. Lorenzo.
For the first time ever regarding the United States overthrow, the ICA distinguished the government from a sovereign State—the Hawaiian Kingdom, or at least tried to. In the past, these two terms were interchangeable. In its decision, the ICA cited a 1991 appeals case that was heard by the United States Court of Appeals for the Second Circuit, Klinghoffer v. S.N.C. Achille Lauro, 937 F.2d 44, 47 (2d Cir. 1991) that quoted another case in the Second Circuit, National Petro-chemical Co. v. M/T Stolt Sheaf, 860 F.2d 551, 553 (2d Cir. 1988), as well as quoting from §201 from the Restatement (Third) of the Foreign Relations Law of the United States (1987). The Second Circuit Court stated:
The [Palestine Liberation Organization] PLO first argues that it is a sovereign state and therefore immune from suit under the Foreign Sovereign Immunities Act (the “FSIA”), 28 U.S.C. § 1602 et seq. (1988). As support for this argument, it relies on its “political and governmental character and structure, its commitment to and practice of its own statehood, and its unlisted and indeterminable membership.” Brief for Appellant at 7. However, this Court has limited the definition of “state” to “‘entit[ies] that ha[ve] a defined territory and a permanent population, [that are] under the control of [their] own government, and that engage in, or ha[ve] the capacity to engage in, formal relations with other such entities.’” [citations omitted]. It is quite clear that the PLO meets none of those requirements.
The definition of a State includes a government and not that the government is synonymous with a State. Palestine has yet to be recognized by the United States as a sovereign and independent State, which prevented the PLO from claiming that Palestine is a State in U.S. federal courts. Therefore, whenever the issue of Palestine arises in federal court proceedings, the court itself or one of the parties to the lawsuit would invoke the “political question doctrine” and the case would be dismissed. Only until the United States recognizes Palestine as a State will the federal courts acknowledge Palestinian Statehood.
The Hawaiian Kingdom is different from the Palestinian situation in that the United States already recognized the Hawaiian Kingdom as a State in its treaties. In other words, the Hawaiian Kingdom did “ha[ve] a defined territory and a permanent population, [that are] under the control of [their] own government, and that engage in, or ha[ve] the capacity to engage in, formal relations with other such entities.” In fact, the Hawaiian Kingdom had an embassy in Washington, D.C., and the United States had an embassy in Honolulu.
The question that came before the ICA in the Lorenzo appeal is whether the State continues to exist despite the overthrow of its government by the United States on January 17, 1893. The ICA stated, “The essence of the lower court’s decision is that even if, as Lorenzo contends, the 1893 overthrow of the Kingdom was illegal, that would not affect the court’s jurisdiction in this case. Although the court’s rationale is open to question in light of international law, the record indicates that the decision was correct because Lorenzo did not meet his burden of proving his lack of jurisdiction.” Here, the ICA would appear to have conflated the Hawaiian State with the government of the Hawaiian Kingdom when it stated, “the 1893 overthrow of the Kingdom was illegal.”
This distinction between the State and the government was explained in the Restatement (Third) of the Foreign Relations Law of the United States that the ICA cited. In §202 is states:
Recognition of state and government distinguished. Recognition of a state is a formal acknowledgment that the entity possesses the qualifications of statehood, and implies a commitment to treat the entity as a state. Recognition of a government is formal acknowledgment that a particular regime is the effective government of a state and implies a commitment to treaty that regime as the government of that state. Ordinarily, that occurs when a state is incorporated into another state, as when Montenegro in 1919 became a part of the Kingdom of Serbs, Croats, and Slovenes (later Yugoslavia).
According to Professor Oppenheim, once recognition of a State is granted, it “is incapable of withdrawal” by the recognizing State, and Professor Schwarzenberger explains that “recognition estops the State which has recognized the title from contesting its validity an any future time.” §202 goes on to say that the “duty to treat a qualified entity as a state also implies that so long as the entity continues to meet those qualifications its statehood may not be ‘derecognized.’ If the entity ceases to meet those requirements, it ceases to be a state and derecognition is not necessary.”
So because the Hawaiian State cannot be “derecognized,” it would continue to exist despite the overthrow of the government of the Hawaiian Kingdom on January 17, 1893. Evidence of “when a state is incorporated into another state” would be an international treaty, particularly a peace treaty, whereby the Hawaiian Kingdom would have ceded its territory and sovereignty to the United States. Examples of foreign States ceding sovereign territory to the United States by a peace treaty include the 1848 Treaty of Peace, Friendship, Limits, and Settlement with the Republic of Mexico that ended the Mexican-American war, and the 1898 Treaty of Peace between the United States of America and the Kingdom of Spain that ended the Spanish-American War.
The 1898 Joint Resolution To provide for annexing the Hawaiian Islands to the United States, is a municipal law of the United States without extraterritorial effect. It is not an international treaty. Under international law, to annex territory of another State is a unilateral act, as opposed to cession, which is a bilateral act between States.
In 2002, the federal court in Honolulu, in United States v. Goo, referred to the State of Hawai‘i v. Lorenzo and the Lorenzo doctrine. For 28 years both the State of Hawai‘i courts and the federal courts have been applying the Lorenzo doctrine wrong. Under international law, which the ICA in Lorenzo acknowledged may affect the rationale of the ICA in placing the burden on the defendant to prove the Hawaiian Kingdom “exists as a State,” shifts the burden on the party opposing the continued existence of the Hawaiian Kingdom that it “does not exist as a State.”
When the ICA acknowledged that Lorenzo did state in his motion to dismiss the indictment that the Hawaiian Kingdom “was recognized as an independent sovereign nation by the United States in numerous bilateral treaties,” it set the presumption to be the Hawaiian Kingdom’s existence as a State under international law and not the existence of the State of Hawai‘i as a political subdivision of the United States.
Under international law, it was not the burden of the defendant to provide evidence that the Hawaiian Kingdom “exists as a State” when the Lorenzo Court already acknowledged its existence and recognition by the United States. Rather, it was the burden of the prosecution to provide evidence that the Hawaiian Kingdom “does not exist as a State.” As a result, the Lorenzo Court’s ruling was wrong and all decisions that followed in State of Hawai‘i courts and federal courts applying the Lorenzo doctrine also were wrong.
The Lorenzo doctrine also has been used by the title insurance industry. In a denial letter to a title insurance claimant, Michael J. Moss, Senior Claims Counsel for Chicago Title Insurance Company, specifically referenced the Lorenzo doctrine applied in two State of Hawai‘i court cases and one federal court case as a basis to decline the insurance claim under an owner’s title insurance policy in the amount of $178,000.00. Moss stated:
The Hawaiian Courts have consistently found that the Kingdom of Hawai‘i is no longer recognized as a sovereign state by either the federal government or by the State of Hawai‘i. See State v. Lorenzo, 77 Hawai‘i 219, 221, 883 P.2d 641, 643 (Haw.App.1994); accord State v. French, 77 Hawai‘i 222, 228, 883 P.2d 644, 649 (Haw.App.1994); Baker v. Stehua, CIV 09-00615 ACK-BMK, 2010 WL 3528987 (D. Haw. Sept. 8, 2010).
Like the courts of the State of Hawai‘i and the federal courts, the Senior Claims Counsel incorrectly applied the Lorenzo doctrine, which should have been in favor of the title insurance claimant. The title insurance claim was that the “Owner’s deed was not lawfully executed according to Hawaiian Kingdom law [because] the notaries public and the Bureau of Conveyance weren’t part of the Hawaii[an] Kingdom, that the documents in [the claimant’s] chain of title were not lawfully executed.”
In other words, the Lorenzo doctrine, when applying international law correctly, would force the title insurance company to pay the claimant his $178,000.00 covered under the owner’s title insurance policy he had purchased to protect him in case there was a defect in the title.
All titles to property that were conveyed after January 17, 1893, are defective because the deeds were “not lawfully executed according Hawaiian Kingdom law [because] the notaries public and the Bureau fo Conveyances weren’t part of the Hawaii[an] Kingdom, [and] that the documents in [the claimant’s] chain of title were not lawfully executed.”
Defective titles to land in Hawai‘i also renders all mortgages tied to the land to be void and that title insurance also pays off the balance of the loan to the bank under the Lender’s Policy. For more information on this topic, download the Royal Commission of Inquiry’s Preliminary Report on Land Titles Throughout the Realm and its Supplemental Report on Title Insurance.