Land Board rejects plea for contested case hearing from Nakoa luxury yacht owners

The Board of Land and Natural Resources has rejected a request from the owners of the luxury yacht Nakoa for a formal contested case hearing to fight a $1.8 million fine assessed last month.

On Friday, the Land Board took up the request from Honolulu attorney attorney Randall Schmitt on behalf of yacht owners Kevin and Kimberley Albert. They asked for a hearing to contest the fine, which on April 26 was increased more than 10 times over an initial fine.

The fines were levied for environmental damage inflicted when the Nakoa 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 the emotional impact on the community.

Staff from DLNR’s Division of Aquatic Resources stood by their recommendation to deny a contested case for the Alberts. They also said there was no good cause grounds to do otherwise.

To be granted a contested case proceeding, petitioners need to comply with a two-step process: First, request such a hearing orally or in writing by the close of the board meeting at which “the subject matter of the request is scheduled for board disposition.” Secondly, the initial request must be followed by a written petition filed no later than 10 calendar days after the close of the Board meeting at which the matter was scheduled for disposition.

The Alberts, through their attorney, accomplished the second step, but not the first.

Schmitt told the Land Board Friday that its April 26 session was a “very long meeting” and the Nakoa matter was the last item on the agenda. He said the board went into a closed executive session, and announced the decision after completing it.

“There was no opportunity at the April 26th meeting for us after the decision was announced,” he said. But, the Alberts did ask for a contested case hearing, in writing, “very quickly” (four days) after the meeting and filed an “extensive petition.”

Because of the property interest involved, Schmitt said “all we ask is for a full and fair hearing for both sides.”

Nāpili resident Junya Nakoa appeared as a testifier on Zoom, nodding when agreeing with something said and shaking his head when disagreeing.

“If they no follow the rules, they get busted,” he said. “You get kicked out of the game. You get penalized 100%.”

Ultimately, the board agreed with the Aquatic Resources Division staff, and denied the request 6-0, with an abstention from board member Vernon Char.

In his earlier letter to the board, Schmitt said the Alberts maintained 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. Damage to the reef by DLNR and its chosen salvor were much greater during salvage operations than from the initial grounding, he said.

To see the Land Board meeting, go here. The Nakoa matter begins at 4:24 and concludes at 4:51.