Maui wildfire litigation expected to surge

Litigation over wildfires that destroyed most of Lahaina and burned parts of Upcountry Maui is approaching an inflection point four months after the Aug. 8 disaster.

The number of fire loss lawsuits filed in state court have topped 70 but is expected to soar into the hundreds — and perhaps beyond 1,000 — to easily become the biggest incidence ever of mass tort litigation in Hawaii.

“I can’t think of anything else that comes close in scope,” said Ilana Waxman, a Maui-born attorney representing one person who lost their home and art studio business on Front Street.

The anticipated surge in cases has the potential to overwhelm 2nd Circuit Court for Maui County, where four judges handle the workload that included 380 civil cases filed in all of 2022 along with criminal cases.

Yet expectations are steadfast that a massive wave of additional Maui fire lawsuits won’t jam up the state judiciary system because several relatively efficient paths exist for the litigation to flow and reach resolution.

It’s hard to predict how the big picture of Maui fire litigation shapes up and shakes out, though it’s possible that the vast majority of cases get settled after as little as one case gets decided at trial.

It’s also possible that all the cases get shunted into a court-authorized mediation program.

Most cases might alternately wind up getting resolved or partially resolved in U.S. Bankruptcy Court if one defendant named in all or nearly all of the cases, Hawaiian Electric, seeks bankruptcy protection, a move that would stay civil lawsuits against the company.

A couple of other factors that could affect the scope of all the litigation by reducing the number of individual lawsuits over the fires include a couple of class-­action cases pending in federal court that seek to collectively represent many people who suffered losses, and a victims fund being set up to pay damages in lieu of litigation.

The victims fund so far involves the state, Maui County, Hawaiian Electric and Kamehameha Schools collectively committing around $150 million, including up to $75 million from the utility company. Gov. Josh Green said at least $1 million will be available to families of each person who was killed in the fire, if they agree to forego litigation, and that the fund can hopefully be expanded.

One thing that almost certainly won’t happen with all the litigation is scores of cases going to trial individually.

“It ain’t never going to happen,” said Jeff Portnoy, a partner at the local law firm Cades Schutte LLP, which isn’t involved in any Maui fire cases.

Waxman, who also sees having hundreds of trials as unrealistic, said to do so would take decades and the state hiring more judges and developing another courthouse on Maui.

Still, it will be arduous to resolve all the litigation because of how diverse the cases are with respect to defendants and damage.

Case diversity About 25 cases filed so far are against only Hawaiian Electric, including one filed by Maui County.

Another close to 30 complaints are against Hawaiian Electric, the state and Maui County.

Kamehameha Schools, a charitable trust that owns a lot of undeveloped land that burned in Lahaina, is a defendant in about 10 cases along with the other three most-named defendants.

A few cases also have been filed against affiliates of West Maui Land Co. led by developer Peter Martin in combination with other defendants.

At least two cases name Hawaiian Telcom and Charter Communications as defendants along with Hawaiian Electric, the state and Maui County.

In cases with multiple defendants, it’s possible that cross-claims between defendants will make litigation even more complex.

With regard to plaintiffs, most of them lost homes and personal possessions. Around 3,500 homes were destroyed in Lahaina, affecting about as many households. Others lost their businesses and livelihood. Yet others suffered physical injuries. At least 100 people died in the Lahaina fire, which was the deadliest U.S. wildfire in a century.

Some cases represent only one plaintiff. Others represent more than one plaintiff, including renters, property owners, partners in businesses and relatives of people killed.

Dozens of law firms are bringing the cases, including many mainland firms with wildfire litigation experience partnering with local law firms. Some firms have single cases, and others have filed several separate cases for different plaintiffs.

So far nearly all the cases have been filed in 2nd Circuit Court on Maui and are assigned to Chief Judge Peter Cahill. Several other cases have been filed in 1st Circuit Court on Oahu.

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SPECIAL MANAGEMENT

For all the cases filed on Maui, a handful of plaintiffs attorneys have sought and received permission from Cahill to consolidate certain procedures for all the cases with nongovernment plaintiffs, including existing and coming cases.

Under this special proceeding for complex litigation, some things including pretrial document discovery work would be done en masse. For instance, depositions could be taken in one place with attorneys representing all the different cases participating instead of having separate deposition sessions for each case.

The consolidation move also allows the court to hold joint hearings on issues involving questions of law or fact that are common to all the cases, but does not merge individual cases into one.

“It makes it a more streamlined process for the judge,” said Cynthia Wong, a Maui attorney who represents plaintiffs in more than a dozen of the cases and sought the consolidation action.

Attorneys representing Hawaiian Electric support the petition for special case management.

“Such coordination is common in mass tort cases and is a best practice,” said a response filed in court by several of the company’s attorneys at the law firms Cox Fricke LLP in Honolulu and Munger Tolles &Olson LLP in California.

Plaintiffs attorneys leading the special management effort also are seeking to allow a “master complaint” to be filed that in part would allow subsequent lawsuits to use a short, simplified complaint form that would state allegations against a particular defendant and allow for decisions made on certain pleadings to be applied to groups of cases that share certain elements.

Wong said she expects initial trial dates to be scheduled for next fall. How many cases actually get to trial, however, is uncertain.

Typically most cases get settled in instances of mass tort litigation, often after one case is decided at trial, though in some instances settlements happen before a first case is decided in court.