Owners of grounded luxury yacht Nakoa seeking contested case over $1.8 million fine

The owners of the luxury yacht Nakoa want a formal contested case hearing to fight a $1.8 million fine assessed last month by the Board of Land and Natural Resources.

On April 26, the Land Board increased an initial fine more than 10 times for environmental damage inflicted when the vessel went aground on a reef about 600 yards north of the Honolua-Mokulē‘ia Bay Marine Life Conservation District in February 2023. The fine took into account biological and cultural damages, as well as “emotional distress to the community.”

This coming Friday, the Land Board will take up a recommendation to deny the April 30 request of yacht owners Kevin and Kimberley Albert for a contested case proceeding. They are represented by attorney Randall Schmitt of the Honolulu law firm McCorriston Miller Mukai MacKinnon.

In his letter to the board, Schmitt said yacht owners Kevin and Kimberley Albert maintain there’s “no basis to impose liability against either the Alberts or (their) Trust because the grounding took place following the theft of the vessel, and neither the Alberts nor the trust violated any provisions of the Hawaiʻi Administrative Rules.”

Schmitt also said damage from the initial grounding must be separated from the damage related to salvage. “DLNR and its chosen salvor were the cause of the much greater damage, and they should be responsible for the damage caused by their choices and conduct,” he said.

“As members of the Save Honolua Coalition and residents who were front and center trying to mitigate any further damage this boat caused, and being present to see the utter negligence and disrespect for our place, we find the recent developments deeply concerning. As locals and as Hawaiians, we are compelled to accept the consequences of our actions, especially when they involve negligence or rule-breaking,” said Paele Kiakona President of Save Honolua Coalition.

Kiakona said the statement from the boat’s owner, now challenging the $1.8 million fine imposed by the Board of Land and Natural Resources, raises serious questions about accountability. “During the official hearings held by the BLNR to address this issue and determine appropriate fines, community members diligently participated, voicing their concerns and impacts. In stark contrast, the owner’s representatives failed to appear at any of these sessions to present their perspective. This absence should cast doubt on the legitimacy of any subsequent claims or defenses they might attempt to assert regarding this matter,” he said.

The Land Board’s Division of Aquatic Resources recommends denying the petition for a contested case hearing because the board is not required to do so when the petitioners fail to comply with procedural requirements.

Schmitt maintains the Alberts complied with legal requirements because their April 30 submission was within 10 days after the end of the board meeting on April 26.

The Aquatic Resources Division said there’s a two-step legal requirement: First, a request for a contested case hearing by the board must be made orally or in writing by the close of the board meeting at which “the subject matter of the request is scheduled for board disposition.” Then, “the initial request must be followed by the filing of a written petition no later than 10 calendar days after the close of the Board meeting at which the matter was scheduled for disposition.”

However, for good cause, the time period for making such requests may be waived, the division staff says. And, it adds that the “petitioners have not provided good cause for why the board should waive the requirements” of requesting a contested case hearing in time periods set out in administrative rules.

Kiakona called the petition for a contested case hearing “a further attempt to evade responsibility.”

“Our community fully supports the BLNR’s efforts to proceed with the enforcement of the fine and to deny this petition, reinforcing our commitment to justice and accountability. The owner’s continued attempts to deflect blame onto others, including the salvage company and individuals within their organization, only underscores their reluctance to accept responsibility for their actions. Ultimately, the responsibility lies with the owner. Our community is united in its call for justice and insists that this situation serve as a deterrent to prevent future disregard for our land and its people,” according to an email response for comment from the Save Honolua Coalition.

The Alberts’ dispute of the reef damage fine is one of many items on a busy Land Board agenda for its May 24 meeting. That meeting is set to begin at 9 a.m. in the DLNR Board Room at the Kalanimoku Building at 1151 Punchbowl Street, 1st Floor, in Honolulu. The Land Board’s deliberations will be on Zoom (meeting ID: 893 5594 2602) or Zoom link: https://us06web.zoom.us/j/89355942602. The meeting will also be available livestream on YouTube at https://www.youtube.com/live/2r_eOTqSlsM.

Written testimony is encouraged prior to the meeting so it can be distributed to board members and allow their timely review of submittals. Testimony can be emailed to blnr.testimony@hawaii.gov or mailed to the Land Board at P.O. Box 621, Honolulu 96809.

After it was grounded for nearly two weeks, the yacht was scuttled in 800 feet of water on March 5, 2023, after it was freed from the rocky coastline near Honolua. According to the DLNR division staff, the department’s Division of Aquatic Resources conducted two biological damage surveys and documented at least 119 stony coral colonies and at least 1,640.5 square meters of live rock that were damaged as a result of the grounding.

The original fine of $117,471.97 was recommended by the DLNR Division of Aquatic Resources, while leaving consideration of penalties for biological and cultural damage, and community distress, to the board. After hearing impassioned public testimony, including one calling the proposed fine a “slap on the wrist,” the Land Board ordered a fine of the statutory maximum of $1,818,851.97, payable by the responsible parties within 60 days of the April 26 board meeting.

It was the third time an enforcement action against Jim Jones, Noelani Yacht Charters, LLC and Kevin S. Albert, Kimberly L. Albert, and the Albert Revocable Trust, had come before the Land Board. Earlier, in July 2023, the board reached a tentative agreement with the Alberts and their trust to pay the lesser fine. However, the Land Board reserved its right to assess fines and penalties against Jim Jones and Noelani Yacht Charters. After six months and despite numerous requests to the Alberts, the settlement failed to materialize.

In January, the DLNR renewed its administrative enforcement action against all parties. At the board’s direction, the department held a community meeting Feb. 22 at Kumulani Chapel in West Maui to solicit public input about the proposed fine and the the grounding incident.

Residents told state officials the fine amount was too low, and a maximum fine should be imposed as a deterrent against future groundings. Members of the public also called for improved policing and management of Honolua Bay, which they maintained should be closed to all commercial activities.

*Editor’s note: This post was updated to include comments from the Save Honolua Coalition, which were received after initial publication.