The Hawaii Supreme Court has rejected an appeal that was holding up initial payments to Maui wildfire disaster victims.

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The Hawaii Supreme Court has rejected an appeal that was holding up initial payments to Maui wildfire disaster victims.

Justices unanimously ruled Wednesday against three attorneys and one fire victim who appealed a state Circuit Court judge’s decision limiting fees of all attorneys representing 21,750 victims with claims in a $4 billion litigation settlement over damage from the Aug. 8, 2023, calamity that killed 102 people and destroyed most of Lahaina.

The three attorneys, who represent more than 1,000 victims, had their appeal accepted on Aug. 5 and presented oral arguments at a Sept. 15 hearing, contending that a June ruling by Maui Circuit Judge Peter Cahill setting attorneys fees was unlawful.

“Their central attack is that the circuit court had no power to enter the fee order,” wrote Associate Justice Todd Eddins in an opinion joined by his colleagues describing the main thrust of the challenge.

The appellants also argued that Cahill’s order was unconstitutional, and that even if Cahill had authority to set fees then his exercising of such authority was an abuse of discretion.

“Appellants are wrong on the power,” the high court opinion said, upholding the fee limits. “Judge Cahill had authority to act.”

The other justices who rendered the decision were Acting Chief Justice Sabrina McKenna, Associate Justice Lisa Ginoza and two Circuit Court judges, Kevin Morikone and Taryn Tomasa, serving as substitute justices due to a vacancy and recusal by Chief Justice Vladimir Devens.

Cynthia Wong, a Maui attorney who for much of the last three years was one of several lawyers appointed as liaison counsel to a brigade of attorneys representing plaintiffs with damage claims, had argued during the Sept. 15 hearing that Cahill’s ruling was appropriate and based on finding a balance between what attorneys and victims would receive from a settlement fund dwarfed by $12 billion to $15 billion in claims for damages that include loss of life, property, well-being and income.

Wong on Thursday said she is pleased with the decision and that it will benefit 21,750 claimants.

“The court recognized the appeal’s urgency and issued an expedited and very thorough review and opinion, essentially affirming Judge Cahill’s decision to cap the attorneys fees so that the victims of the Maui fires will receive as much as possible from the limited settlement fund,” she said.

Wong anticipates that claims administrators will begin to issue payments within the next two months.

Samuel Shnider, a Maui lawyer who represented the three attorneys and one fire victim who appealed Cahill’s fee order at the Sept. 15 hearing, was not available Thursday to comment.

The appeal was filed by Anthony Ranken with Wailuku law firm Ranken &Shnider, Alex Edrenkin with Honolulu’s PacLaw Group, John Thickstun with Wailuku firm Montegna &Thickstun, and Michael Adrian Kahaleala Bates, who lost a home in Lahaina in the fire.

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Appellants argued that contracts between fire victims and their lawyers, along with state law capping attorneys fees at no more than 25% in such litigation, should dictate how much attorneys receive from the settlement as a portion of each client’s claim award.

Under the statutory cap, attorneys could have received up to $1 billion, though Shnider said during the hearing that attorneys likely would provide significant discounts.

Cahill decided on a general fee ranging from 3% to 10%, with 3% applying to most attorneys retained after the settlement was reached Aug. 19, 2024, and up to 8.33% for most attorneys retained before then. A handful of attorneys whose “bellwether” cases were heading to trial before the settlement are eligible for up to 10%.

In extraordinary circumstances, attorneys may seek a little more under Cahill’s ruling, but no higher than 12.5%, at Cahill’s discretion and subject to a hearing.

The fee percentage applies to each plaintiff’s settlement amount and is roughly estimated to total $200 million, or 5% of $4 billion.

An additional $222 million was set aside by Cahill for allocation among attorneys who did work that benefited all plaintiffs.

The $4 billion settlement is to be paid in four equal annual installments by Hawaiian Electric Co., the state, Kamehameha Schools, Spectrum Oceanic LLC, Hawaiian Telcom and affiliates of West Maui Land Co.

A little over $1.1 billion has been in a trust account for several months awaiting distribution after earlier disputes, which included claims by insurance companies, were resolved.

The Hawaii Supreme Court’s ruling on Wednesday did take issue with how the $222 million “common benefit fund” for certain attorneys would be divided under Cahill’s order, and part of the process for allowing general fees over 10% but not more than 12.5%.

Common benefit fees are to be paid out in the second, third and fourth years of settlement distributions after determinations by a review board that includes three retired judges.

The high court invalidated some of Cahill’s fee award provisions, including not allowing decisions by the review board to be appealed, and penalizing lawyers who challenge an award determination.

The justices said in their ruling that striking anti-appeal conditions does not unravel Cahill’s order setting attorneys fees, but does opens rulings on some fee awards to possible higher review. “The fund still exists, the fee schedule still stands, and the board still does its job,” the ruling said.

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