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Maui Circuit Court Judge Peter Cahill on Friday said he will ask the Hawaii Supreme Court to weigh in on key questions related to a proposed, $4 billion settlement of hundreds of lawsuits related to 2023’s Maui wildfires.

Several of Hawaii’s largest government, business and social organizations including the state, Maui County, Hawaiian Electric Co., Hawaiian Telcom and Kamehameha Schools have agreed to pay to settle the claims of hundreds of individual fire victims.

But whether that deal for practical purposes can go forward depends on whether insurers, who are not parties to the proposed settlement, can continue to pursue their own lawsuits against several of the defendants, including HECO and Kamehameha Schools. 

Insurers have paid out $2.3 billion in claims to Maui policyholders so far and expect to pay another $1 billion. More than 140 of the insurers, including local companies and international giants, have filed a so-called subrogation suit in Honolulu state court to recoup some of that money. 

Such subrogation suits pose a problem for defendants because, even if the defendants settle suits filed by fire victims, the defendants still could face billions of dollars in potential claims from the insurers. Accordingly, for practical purposes the settlement is unlikely to become final as long as the subrogation lawsuits loom.

But Cahill took a step to remove that problem earlier this month by ruling that the insurers are barred from continuing with independent subrogation lawsuits.

On Friday, in the face of criticism from insurers insisting they have the right to pursue subrogation, Cahill said he would ask the Hawaii Supreme Court to weigh in on key questions related to subrogation. They all relate to the central question that Cahill previously appeared to answer: whether the insurers can pursue their claims even if the other parties reach a settlement.

“The answer of the questions will assist me in making additional decisions,” Cahill said during the two-hour hearing.

The posture of the parties in the hearing was unusual because it was lawyers for the victims and defendants who were arguing that Cahill should send the question to the Supreme Court, even though the victims had effectively won previously when Cahill shut down the insurers’ subrogation suits.

Insurance industry lawyers pointed out the unusual nature of the proceedings in their pleadings, saying the judge had granted the victims “precisely the relief they asked for” and that it would strain the rules of appellate procedure for Cahill now to ask the high court to determine a question Cahill had already answered.

Insurance industry lawyer Adam Romney pointed out that the industry is not a party to the proposed settlement and that the subrogation cases are pending before a different judge in a different court. As a consequence, he argued, the Maui court doesn’t have jurisdiction over the subrogation claims. 

Romney additionally argued that sending the questions to the Supreme Court will create another procedural issue for the lawyers to argue about.

“It’s not going to help anyone,” he said.

Cahill acknowledged the question about jurisdiction was a reasonable one that an appeals court could be asked to weigh in on, but Cahill said he does have the right to ask for the Supreme Court to weigh in, even though Cahill has issued an order.

“It’s clearly permitted,” Cahill said. “That’s just the way it’s going to be.”

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