A US$4B settlement for Hawaii wildfire victims is in legal limbo as an unusual trial starts

Wildfire wreckage is shown in Lahaina, Hawaii, Aug. 10, 2023. (AP Photo/Rick Bowmer, File)

HONOLULU, Hawaii — When Hawaii Gov. Josh Green announced a US$4 billion settlement about a year after the deadliest U.S. wildfire in a century devastated Lahaina in 2023, he touted the speed of the deal to “avoid protracted and painful lawsuits.”

Five months later, however, an unusual trial starting Wednesday will delve into difficult questions about survivors’ losses as a judge decides how to divide the settlement. Some victims will take the witness stand, while others have submitted pre-recorded testimony, describing pain made all the more fresh by the recent destruction in Los Angeles.

The trial won’t determine fault. Defendants blamed for the blaze including the state, power utility Hawaiian Electric and large landowners have already agreed to the settlement amount.

At issue is how much money various groups of plaintiffs might receive, including some who filed individual lawsuits after losing their family members, homes or businesses, and other victims covered by class-action lawsuits, including tourists who simply had to cancel trips to Maui following the inferno.

Lawyers for the two groups failed to come to an agreement, leaving it up to Judge Peter Cahill to determine how the $4 billion should be shared.

“A class action is everybody suffering the same loss,” said Damon Valverde, whose Lahaina sunglasses company burned. “And I suffered quite a bit more than others, and others suffered quite a bit more than me.”

Valverde isn’t expected to testify; the focus should be on victims who lost family members, he said.

Those include Kevin Baclig, whose wife, father-in-law, mother-in-law and brother-in-law were among the 102 people known to have died.

Baclig said in a declaration that if called to testify he would describe how for three agonizing days he searched for them — from hotel to hotel, shelter to shelter. “I clung to the fragile hope that maybe they had made it off the island, that they were safe,” he said.

A month and a half went by and the grim reality set in. He went to the Philippines to gather DNA samples from his wife’s close relatives there. The samples matched remains found in the fire. He eventually carried urns holding their remains back to the Philippines.

“The loss has left me in profound, unrelenting pain,” he said. “There are no words to describe the emptiness I feel or the weight I carry every day.”

The class action includes some people who lost homes and businesses, but also tourists whose trips were delayed or canceled. Only a nominal portion of the settlement should go toward that group, said Jacob Lowenthal, one of the attorneys representing victims — like Baclig — who have filed their own lawsuits, known as the “individual plaintiffs.”

“The categories of losses that the class is claiming are just grossly insignificant compared to our losses,” Lowenthal said.

Attorneys representing the class didn’t respond to messages from The Associated Press. In their trial brief, they challenged the idea that everyone who has a claim worth suing over has already done so. Many people have held off hiring attorneys, the brief said, because of the fire’s disruption to life, “distrust in heavy attorney advertising, and a desire to see how the process plays out first.”

Further complicating the matter are questions before the state Supreme Court, which is considering whether insurers can separately sue the defendants for reimbursement for the $2 billion-plus they have paid out as a result of the fire, or whether their share must come from the $4 billion settlement.

If the court says insurers can sue separately, that will likely torpedo the entire deal. Preventing insurers from going after the defendants is a key settlement term, and allowing them to do so would drain the money available for fire victims and lead to prolonged litigation, lawyers for the individual plaintiffs say.

Jennifer Sinco Kelleher, The Associated Press