Hawaiian Electric Industries and its subsidiaries have said little about the cause of the wildfires that razed much of Lahaina six weeks ago, except for asserting that the origin of the deadly fires is unknown. An army of lawyers disagrees.

In more than a dozen lawsuits filed against the company, plaintiffs allege that Hawaiian Electric’s equipment ignited the flames on Aug. 8 and that the company failed to take reasonable steps to prevent the fires from happening.

The outcome of this central argument, set to play out in Hawaii courts, could profoundly affect wildfire victims, Hawaiian Electric, its 470,000 customers statewide and shareholders who have already seen Hawaiian Electric’s market value drop by billions of dollars.

Similar wildfires and ensuing civil lawsuits and criminal indictments pushed Pacific Gas and Electric Co. into bankruptcy in 2019.

“Unfortunately this isn’t the first fire of this sort, and it won’t be the last,” Will Abrams, a California wildfire survivor and community advocate, said of the Lahaina fire.

Abrams is one of many still seeking to recover claims awarded to them against PG&E after the company’s downed power lines led to lethal fires in Northern California in 2017 and 2018. Abrams said how long desperate victims in Lahaina must wait for direly needed, long-term relief will probably depend on whether local, state and federal officials push for solutions.

“The timing is really going to depend on the path of the litigation and the extent to which local officials, state officials and federal officials champion their cause,” Abrams said.

A Deluge Of Cases

One issue affecting the path of the litigation is how Hawaii courts manage the mounting lawsuits.

Among the first to file against Hawaiian Electric were Honolulu lawyers Terry Revere and Richard Wilson, who sued on behalf of clients Nova Burns and Woodley West on Aug. 12. Husband-and-wife litigators Graham and MaryBeth LippSmith sued the same day on behalf of Monica and Rede Eder. 

Both complaints seek class-action status. The concept of class action is simple: if numerous plaintiffs are in the same situation, the court can join their cases together. The benefit is economy and efficiency: parties don’t have to conduct repeated depositions, discovery requests and procedural hearings concerning the same facts and issues.

But numbers alone don’t justify courts certifying complaints as class actions. According to the Hawaii Rules of Civil Procedure, there also must be common questions of law or fact among the plaintiffs, class representative claims must be typical of the other plaintiffs and the representatives must “fairly and adequately protect the interests of the class.”

A potential problem with treating the Lahaina fire lawsuits as a class action involves damages. Even if Hawaiian Electric were found liable, damages are likely to vary among parties. But that problem is surmountable, Graham LippSmith said in an interview. 

LippSmith previously represented plaintiffs after the collapse of the Champlain Towers South condominium in Surfside, Florida. In that case, liability was dealt with as a single class action, LippSmith said. Damages were dealt with through a separate series of cases, he said. 

The same thing could be done in Lahaina, he said.

But Honolulu trial lawyer Mark Davis says a better way would be to treat the Lahaina cases as a mass tort. Discovery can still be consolidated, he said, without going through the formality of a class action. 

Regardless, Davis said, how to handle the growing thicket of lawsuits is “exactly what’s on everybody’s mind right now,” including that of Hawaii Circuit Court Judge Peter Cahill, who will likely be presiding over most of the cases in Maui.

“This is all a matter of case management by Judge Cahill,” Davis said.

However the cases are managed, the main allegation against Hawaiian Electric involves negligence. That occurs when a party breaches a duty to exercise reasonable care, causing someone else to be damaged as a foreseeable consequence.

In Hawaiian Electric’s case, the plaintiffs’ allegations turn on assertions that the utility knew its equipment, including aging utility poles, posed a risk of causing wildfires but failed to take basic precautions. Documents filed with Hawaii regulators show Hawaiian Electric knew about mitigation measures it could have adopted, like creating a plan to shut off power lines to protect public safety but chose not to do that.

Hawaiian Electric declined to comment for this article, but in the past has sought to distance itself from blame. In a statement issued in August, the company acknowledged a downed power line sparked a fire in Lahaina the morning of Aug. 8. But the company said firefighters extinguished that blaze, after which the company’s lines lost power. The origin of the afternoon fires that destroyed much of the town is unknown, Hawaiian Electric said.

Mikal Watts is a Texas lawyer who has applied to Hawaii’s judiciary for permission to represent Lahaina resident Jan Apo and the Apo Family Trust in a lawsuit related to the fires.

“The evidence is overwhelming that Hawaiian Electric started the fire,” Watts said in an interview. “And I am 100% certain of our ability to prove it.”

Will Hawaii Adopt California’s Inverse Condemnation Doctrine?

If Hawaiian Electric did start the fires, the company could be on the hook for billions of dollars in damages, even if it’s not found to be negligent. In other words, Hawaiian Electric could have to pay a fortune to victims even if it turns out the Lahaina fires were caused by a freak accident that Hawaiian Electric took reasonable care to prevent.

Many of the complaints against Hawaiian Electric include an allegation of inverse condemnation, which normally occurs when a government takes property without a standard condemnation proceeding. Such takings are prohibited by the U.S. and Hawaii constitutions, which say the government can’t take property without just compensation.

California courts have applied the doctrine to regulated utilities that start wildfires. Like governments, utilities typically have the ability to condemn and acquire property for things like power lines and power plants. Accordingly, under California law, if a utility causes a fire that damages private property, it’s analogous to a governmental taking, and the utility has to pay. The only question is how much.

As LippSmith explains it, inverse condemnation provides “an easier path to liability.” 

Hawaiian Electric is counting on Hawaii courts not following California. In an investor update filed with the U.S. Securities and Exchange Commission in August, Hawaiian Electric noted, “Unlike in California, there is no precedent in Hawai‘i applying inverse condemnation to a private party like an investor-owned utility. It has only been applied to government entities.”

But that’s only half the story. Hawaii courts haven’t addressed at all whether to apply inverse condemnation to utilities. While California case law isn’t binding on Hawaii courts, Watts thinks precedents from the Golden State will be persuasive for Hawaii judges in what lawyers call a “case of first impression.”

“California has a lot of wildfire case law,” Watts said. “We anticipate Hawaii will do the same thing.”

These are just a few of the issues facing Hawaiian Electric. Most suits also involve allegations of nuisance and trespass, ancient property legal principles that protect owners from unwanted interferences with the use and enjoyment of their property.

Shareholder Lawsuits

Another suit was filed by a group of shareholders, on behalf of the company, against Hawaiian Electric’s board of directors. The shareholder derivative suit alleges decisions made by Hawaiian Electric’s board members to not maintain the company’s distribution systems amount to breaches of fiduciary duties. 

“Through their repeated refusal to approve urgently needed increases to the Company’s safety and maintenance budgets, Hawaiian Electric’s officers and directors directly contributed to the catastrophic 2023 Maui fire,” the suit alleges. “To operate Hawaiian Electric’s power lines under these conditions was reckless and represented an abdication of their fiduciary duties and a callous indifference to the loss of human life, tangible property, and natural habitat.”

Another lawsuit by shareholders claims Hawaiian Electric misled them by failing reveal that “Hawaiian Electric’s wildfire prevention and safety protocols and procedures were inadequate to meet the challenges for which they were ostensibly designed.”

A Chapter 11 bankruptcy reorganization could add another twist to the litigation. 

“It doesn’t complicate it; it just makes it different,” said Watts, the Texas lawyer, who represented fire victims in the PG&E bankruptcy. “It may speed it up actually.” 

Will Abrams, the California wildfire victim and activist, said it’s important that Hawaii victims understand the powerful forces that could to bear on the litigation and a bankruptcy. It’s not just the utility that might try exert pressure on “the powers that be,” including lawmakers and regulators, Abrams said. With billions of dollars at stake investors would likely try to assert influence, he said.

There’s also what Abrams called “the wildfire litigation industry.” While Abrams said victims should “welcome the good help” from some lawyers and advocates, there are some interested primarily in their own gain.

“They have honed their game to really take advantage of the public to advance their own financial interests,” he said.

Civil Beat’s coverage of Maui County is supported in part by grants from the Nuestro Futuro Foundation.