NEW & NOTEWORTHY : Court Decisions on Ka`anapali Tours, Pila`a 400

posted in: February 2013 | 0

Dead in the Water: Queen’s Treasure — the 65-foot luxury catamaran custom-built for Ka`anapali Tours, LLC — won’t be plying the Ka`anapali coast any time soon.

On December 21, U.S. District Judge Leslie Kobayashi issued an order vacating the jury trial, set for January 8, on a complaint KTL filed against the state Department of Land and Natural Resources, three of its staff, and the Board of Land and Natural Resources. The complaint sought to force the DLNR to allow KTL to sail Queen’s Treasure under its permit with the department’s Division of Boating and Ocean Recreation.

Years ago, in a messy, convoluted, and possibly illegal transaction, KTL acquired a one-of-a-kind permit that appeared to allow the company to operate either a monohull or multihull vessel in waters off Ka`anapali. This was despite the fact that multihull (catamaran) permits for Ka`anapali are subject to a waiting list, and KTL was not at the top of the list at the time.

When, in 2011, DOBOR prevented KTL from making Queen’s Treasure its vessel of record, the company sued, noting that the division had repeatedly renewed the permit.

In January 2012, Judge Kobayashi denied KTL’s motion for a preliminary injunction against the DLNR that would allow Queen’s Treasure to operate pending the outcome of the jury trial. In her order, she found that DOBOR did not have to honor the terms of an erroneously issued permit. (DOBOR has since allowed the permit to expire.)

In the months that followed, the state parties sought a summary judgment on the case and sought to remove the DOBOR staffers, in their individual capacities, as defendants.

Kobayashi heard arguments on the state’s motions on December 10. Later that month, she granted the motions, at least with regard to KTL’s state law claims and the state’s claim that the DOBOR staffers have immunity from prosecution for performing their official duties.

The latter decision, she wrote, “precludes any claim for damages, leaving only prospective injunctive relief as to the state Defendants. These claims, however, are MOOT because the Court cannot grant the relief requested because the Plaintiff no longer has the permit at issue.”

Kobayashi withheld opining on KTL’s allegation that the state defendants retaliated against the company by refusing to renew the permit. KTL “never amended the complaint to include claims based on the non-renewal,” she wrote, adding that KTL could file such claims in a separate action.

For more on this case, read our February cover story, “Permitting Missteps Threaten to Unravel Commercial Boating Regime at Ka`anapali,” and our March New & Noteworthy column. Both are available at

Mud Fine Upheld: On December 21, the Intermediate Court of Appeals affirmed a 5th Circuit Court denial of Pila`a 400, LLC’s appeal of a $4 million fine imposed by the state Board of Land and Natural Resources for damages to Pila`a Bay resulting from a 2001 mudslide.

The ICA found Pila`a 400’s arguments unclear, misplaced, inadequate or just plain wrong. Contrary to the company’s claims, the Land Board had provided adequate notice of the scope of the contested case hearing that resulted in the fine, the board’s findings were clear, it had the authority to impose the fine, and a federal consent decree addressing Clean Water Act violations stemming from the mudslide did not bar the Land Board from pursuing its own damages, the ICA found.

In his concurring opinion, acting associate judge and former Land Board chair Mike Wilson expanded on the court’s finding that the board may consider intrinsic value when calculating damages to the state’s natural resources. Pila`a 400, owned by James Pflueger, had argued that the Land Board couldn’t.

Wilson admitted that something like natural beauty “is not susceptible to valuation based on price in the marketplace,” adding, “The value of Hawai’i’s forests is not the market value of its board feet. The value of Hawai`i’s coral reefs is different from the value of its harvest.”

Still, state law empowers the Land Board to consider “any factor it deems appropriate” in imposing fines and seeking damages, including “the loss of the natural resource to its natural habitat and environment and the cost of restoration or replacement,” he wrote.

— Teresa Dawson


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