An inmate injured while taking a shower. A cyclist who struck the edge of a sidewalk. Lawsuits stemming from subcontract work at Honolulu International Airport.

Those are just three of more than a dozen settled claims against the state of Hawaii that will be paid under legislation signed into law May 18 by Gov. David Ige.

The claims total $17.9 million, an increase of almost $7 million from a similar claims bill last year.

Hawaiian Airlines and Aloha Air cargo. Interisland terminal 22 june 2015. photograph Cory Lum/Civil Beat

The Hawaiian Airlines and Aloha Air Cargo Interisland terminal in Honolulu. Roughly $10 million in taxpayer money will go to settle lawsuits from airport subcontractors.

Cory Lum/Civil Beat

Paying for lawsuits settled through the state Attorney General’s Office is a common practice. But what added significantly to the 2017 legislation was a $10 million settlement involving the state Department of Transportation’s Airports Division.

The DOT contracted with DCK Pacific Construction to build the Inter-Island Terminal Maintenance/Cargo Facility at Honolulu International Airport.

According to the AG’s summary of the case, two lawsuits were filed against the state by subcontractors and suppliers seeking payment from DCK. The DOT agreed the cases had merit, and that it would be prudent to settle rather than risk “protracted and expensive litigation.”

The $10 million will come from funds already in the airport project’s budget, rather than requiring additional dollars from the state’s general fund.

But the Legislature and governor still needed to sign off on the deal, and it’s all taxpayer money.

Three claims submitted to the Legislature by the AG this year, however, will not be honored.

They include almost $3.4 million in attorney fees and back payments arising from a class action lawsuit concerning foster care. As Civil Beat reported earlier this month, leaders in the Hawaii House of Representatives refused to make the payment, complaining that the legal fee was too large.

From $1 Million To $1

Also subtracted from the claims bill in the last days of the 2017 legislative session was $1 million for a lawsuit called Bridge Aina Le’a LLC v. State of Hawaii Land Use Commission.

In testimony on the claim, the attorney general explained that the LUC changed the land classification of property on Hawaii Island from agriculture to urban, in the process requiring the owner to build 385 affordable housing units.

But after 20 years, the only affordable housing at the site controlled by Bridge Aina Le’a was “several incomplete multi-unit dwellings that did not have utilities and could not actually be used.”

The LUC argued that the work did not amount to “substantial commencement” with the affordable housing requirement, but the Hawaii Supreme Court reversed the decision, saying that $20 million of planning and other preparation constituted “substantial commencement.”

Bridge Aina Leʻa sought $29 million in damages but accepted the far lower settlement. When the claims bill went through Sen. Gil Keith-Agaran’s Judiciary and Labor Committee, however, he changed the $1 million settlement to just $1.

Senator Gilbert Keith Agaran chair. 27 april 2017

Sen. Gilbert Keith-Agaran during conference committee negotiations April 27.

Cory Lum/Civil Beat

Keith-Agaran said the $1 figure served as a “placeholder” so that lawmakers could continue to discuss the settlement.

“I had questions specifically about that claim, which involved a longstanding dispute on the Big Island,” he said. “A developer had promised a certain number of affordable housing units, and over two decades it never fulfilled that promise. The LUC gave them one last shot, but the developer still did not fulfill the commitment.”

The $1 million was later restored after Sen. Jill Tokuda’s Ways and Means Committee reviewed the claims bill. But it disappeared altogether during conference committee.

“It’s just one of those things that happened in negotiations in conference,” said Keith-Agaran. “That especially happens with funding bills. And I think some of the conferees had concerns.”

The senator said the Bridge Aina claim illustrates an unease among some lawmakers as to whether the LUC can actually hold developers to their promises.

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