A $4 billion Lahaina wildfire settlement that is key to rebuilding efforts underway by survivors has cleared a key hurdle with a unanimous opinion by the Hawai’i Supreme Court. In a February 10 ruling, the five justices on the state’s highest court rejected an attempt by insurance companies to block the settlement by claiming a share of funds intended for survivors.
“This ruling means that survivors are one step closer to justice,” said Galiher DeRobertis & Waxman attorney Beth Nardi, a Lahaina resident who also lost her home in the fire. “We’re grateful that the Supreme Court followed Hawai’i state law in this case and rejected the insurance companies’ argument. This paves the way for much-needed financial assistance for fire survivors to rebuild our lives.”
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The court faced a decision that could kill the so-called “global” settlement between victims, Hawaii Electric, the state, Kamehameha Schools and other entities. The unusual arguments pitted supporters of the settlement, including those responsible for the damage, against the insurance industry.
The key issue was whether insurance companies should have been included in the settlement for the $3 billion they say they are paying out in property damage claims.
According to the opinion, the only way for insurance companies to recoup claims that have been paid out to individual policyholders would be to pursue policyholders individually and seek any funds they may have received in excess of their damages.
Defendants Hawaiian Electric, the state of Hawaii, Kamehameha Schools, Spectrum Oceanic LLC, and Hawaiian Telcom were aligned with the fire victims in opposing the insurance companies’ legal strategy to disrupt the settlement.
According to the settlement, Hawaiian Electric will pay $1.99 billion. Investigators have determined that a downed power line owned by the company sparked the devastating fire that swept through Lahaina. In addition, the company failed to follow industry best practices during periods of high fire risk and de-engerize electrical lines.
The state and Kamehameha Schools — landowners where overgrown vegetation contributed to the fire’s spread — will each pay $872.5 million. Spectrum Oceanic LLC and Hawaiian Telcom, which share utility infrastructure with Hawaiian Electric, will collectively pay approximately $300 million.
Attorneys and staff at Hawai’i-based Galiher DeRobertis & Waxman were directly impacted by the Maui fires. The firm has assembled its resources and expertise handling complex mass tort litigation to assist fire victims with a wide range of claims. Early on, the firm made a decision to reduce its contingent fee rate to 20 percent — far below regular rates for complex litigation and the lowest rate of any firms involved in the litigation.
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