Hawaiʻi Supreme Court hears arguments in historic $4.037B Maui Wildfire Settlement
Hawaiʻi Supreme Court (2.6.25) PC: Hawaiʻi Courts / YouTube with express permission- Adam M. Romney, Attorney for Subrogating Insurers, et al (2.6.25) PC: Hawaiʻi Courts / YouTube with express permission
- Terrance Revere, an attorney for the consolidated class plaintiffs. (2.6.25) PC: Hawaiʻi Courts / YouTube with express permission
- Attorney Jesse Creed, Liaison Counsel for individual plaintiffs in the Maui Wildfire Cases. (2.6.25) PC: Hawaiʻi Courts / YouTube with express permission
- Ginger Anders, attorney for the defendants. (2.6.25) PC: Hawaiʻi Courts / YouTube with express permission
The Hawaiʻi Supreme Court convened to determine whether or not insurers can interfere with the historic $4.037 billion global settlement for plaintiffs in the Maui Wildfires Cases.
After hearing arguments on Thursday morning, Chief Justice Mark Recktenwald said the court will take the matter under advisement. “We recognize the urgency of this matter, and we’ll issue a decision as soon as possible,” he said.
The findings by the higher court could provide more clarity on the role of insurers seeking to recoup money from payouts. If a resolution is not reached in sufficient time, the challenge could potentially result in a termination of the settlement. There’s also worry of potentially cutting into settlement funds available for survivors.
Adam M. Romney, attorney for subrogating insurers said he’s in favor of a global settlement, but wanted to ensure that the rights of insurers were not overlooked in the process.
“Our position is that the settling parties—you know, the class action plaintiffs, the individual plaintiffs—they can settle for any amount they want. They can settle for the full $4.037 billion that’s been announced. They can take every penny that been offered, and leave us with whatever is left, hypothetically,” he said.
“What they can’t do—this is where we’re drawing the line—is settle our claims as part of that deal. And that’s sort of a basic, fundamental promise of fairness—is that they just aren’t their claims to settle.”
-Adam M. Romney
Romney pointed to case law in Hawaiʻi, contending that the legislature rules do not affect equitable subrogation, as the insurers seek to recover costs from the responsible party.
Terrance Revere, an attorney for the consolidated class plaintiffs is representing a variety of individuals including wrongful death clients, people who have suffered property and business losses, and personal injury claims.
He explained what he called the guiding principles of the case saying, “We want to make people whole. We don’t want plaintiffs to get a double recovery. We want, plaintiffs and defendants to be able to settle their cases.”
For insurers who are claiming rights to subrogation, Revere said, “First things first. You have to make sure the insured is made whole.”
He said insurers have to, on a case by case basis, show that clients were fully compensated. “Then go ahead and assert your claims. But they haven’t done that.”
-Terrance Revere
Romney explained that under the current settlement the surrogating insurers would not be able to pursue recovery after the settlement, even though they are not a party to it. He notes that insurers already paid out $2.6 billion, and anticipate paying another $800 million before the cases are resolved.
“We know today that HECO, the primarily responsible utility that started the fire is going to pay $1.99 [billion]— it’s significantly less than what the insurers have paid… We, the subrogating insurers will ultimately bear most of the responsibility,” he said.
“We will have to pay more than the people who actually caused the damage, and that is fundamentally unequitable,” said Romney. “Ultimately, we did not start the fire,” he said, explaining that insurers provide a safety net for recourse when the worst things happen.
He said the settlement as written, “messes with the social agreement, the fabric, that allows that safety net to occur. And that’s something that I think that the courts should be wary of… in terms of its long-term implications,” said Romney.
Jesse Creed, Liaison Counsel for Individual Action Plaintiffs in the Maui Wildfire Cases, was among those who presented oral arguments before five justices of the Hawaiʻi Supreme Court. He said there is a comprehensive framework already established by the legislature. Under those guidelines, he said, the insurance companies cannot attempt to “circumvent these remedies and thwart their policyholder settlement.”
According to Creed, “The subjugating insurers seek full unlimited reimbursement of the $2.3 billion they were obligated to pay to their premium paying policyholders.” But, he said, “every penny they take outside of the rules—the substantive rules of 663-10—is one less penny that goes back to rebuilding Lahaina.”
Ginger Anders, arguing on behalf of the defendants said: “This court should hold that the insurer’s exclusive remedy is to assert liens against their policyholders in the context of the global settlement, and that the insurers may not bring direct subrogation actions against the defendants.” That conclusion, she said is compelled by Hawaiʻi law.
“There’s an overriding public interest in the settlement because it represents the wildfire victims best opportunity to obtain compensation now to begin rebuilding their community. So I would urge the court to answer the question so as to reaffirm existing law and to provide the finality necessary to enable the settlement to go into effect,” said Anders.
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