{"id":12017,"date":"2019-12-01T04:37:55","date_gmt":"2019-12-01T04:37:55","guid":{"rendered":"https:\/\/www.environment-hawaii.org\/?p=12017"},"modified":"2019-12-01T04:40:05","modified_gmt":"2019-12-01T04:40:05","slug":"settlement-lets-pacific-paradise-owner-pay-dlnr-cents-on-the-dollar-for-damage-to-reef","status":"publish","type":"post","link":"https:\/\/environment-hawaii.org\/?p=12017","title":{"rendered":"Settlement Lets Pacific Paradise Owner Pay DLNR Cents on the Dollar for Damage to Reef"},"content":{"rendered":"\n

At approximately 10:30 p.m. on October 10, 2017, the Commercial Fishing Vessel (CFV) Pacific Paradise, a 79\u2019 longline fishing vessel owned by TWOL, LLC, ran aground in shallow waters of the Waikiki-Diamond Head Shoreline Fisheries Management Area (FMA). Over the next several days, multiple towing operations proved unsuccessful and resulted in a fire on board that lasted for two days. The vessel was eventually removed 58 days later on December 7, 2017. Division of Aquatic Resources (DAR) biologist and technicians conducted a series of three different investigative surveys at the vessel grounding impact to carefully document the impact to the state\u2019s protected resources. Approximately 1,964 square meters of submerged lands were impacted during this event, including fully protected stony coral and live rock. <\/em><\/p>\n\n\n\n

\u2014 Department of Land and Natural\nResources Report\n<\/em><\/p>\n\n\n\n

For nearly two months, the disabled Pacific Paradise <\/em>was on full view of tourists and other members of the public who visited or worked in Waikiki. It had reefed just a quarter mile off the famed beach. Those who weren\u2019t in the area were still able to track the frustratingly slow prog- ress of efforts to haul the damaged vessel out to sea, as the dramatic salvage attempts were the stuff of nightly news reports and daily headlines. <\/p>\n\n\n\n

The Department of Land and Natural Resources\u2019 Division of Aquatic Resources was closely monitoring events. For more than a month, its biologists were unable to get a close look at the grounding site, deterred by fires, a deteriorating vessel, and rough seas. <\/p>\n\n\n\n

Finally, on November 29, while the\ncrippled boat was still firmly lodged in\nthe coral, the DAR biologists got their\nfirst look at damage caused by the vessel\nitself as it ran aground, removal efforts,\nand debris. Subsequent surveys were\nmade in December and in January and\nFebruary of 2018.\n<\/p>\n\n\n\n

Damage to live rock and coral was\nconservatively estimated by DAR at more\nthan a quarter of a million dollars.\n<\/p>\n\n\n\n

Despite the massive publicity given\nto the grounding and following events,\nthe state\u2019s settlement of damages with\nthe vessel owner received none at all.\nInstead, the Board of Land and Natural\nResources agreed to settle for pennies on\nthe dollar.\n<\/p>\n\n\n\n

The Report\n<\/strong><\/p>\n\n\n\n

The results of the DAR biologists\u2019 analysis were written up in a March 2018 report. Among other things, they found that the extent of damage to the sea floor was more than half an acre, not counting areas scarred as the vessel grounded and the full 400-meter length of the egress scar created as the vessel carcass was hauled off. \u201cFish density, algal biomass, reef accreting substrate, and coral species were all found to be less in the vessel grounding impact site versus reference sites on the adjacent reefs,\u201d they found. <\/p>\n\n\n\n

The report\u2019s authors had to estimate\nthe extent of corals lost as a result of\nthe grounding, since, \u201cprimarily only\nbare substrate remained at the primary\/\nsecondary and tertiary impact areas.\u201d\n(The primary area was where the vessel\nfirst hit the reef; the secondary area refers\nto a site about 30 meters away, where it\nlanded after initial efforts to haul it off\nfailed; the tertiary impact area is about 75\nmeters distant from the second, and it is\nwhere the vessel ran aground after a third\nremoval effort was made on December 6.)\nAltogether, DAR concluded that most\nlikely, 1,720 coral colonies were damaged,\nbut acknowledged that the actual number\ncould be as low as 18 or as high as 2,400.\nA total of 1,362 square meters of live\nrock was damaged, including 301 square\nmeters of high-value live rock \u2013 rock that\nincludes more organisms attached to it\nand a more complex three-dimensional\nstructure.\n<\/p>\n\n\n\n

The Recommendation\n<\/strong><\/p>\n\n\n\n

While the report \u2013 marked \u201cAttorney- Client Privilege Draft\u201d \u2013 was finished in March 2018, it wasn\u2019t until that following December that the Board of Land and Natural Resources took up the DAR staff\u2019s recommendation for fines and penalties against the vessel owner, TWOL, LLC. <\/p>\n\n\n\n

DLNR rules set out fines for damages\nto aquatic resources, including corals and\nlive rock. Fines for first-time violators\nare $1,000 per violation, plus $1,000 per\ncoral specimen injured. For live rock \u2013\ndefined as \u201cany natural hard substrate\nto which marine life is visibly attached\u201d\n\u2013 a specimen is either an individual live\nrock or, if the violation involves an area\nlarger than one meter, each square meter\nof live rock.\n<\/p>\n\n\n\n

On the basis of those rules, DAR staff\ncalculated that with 18 coral colonies\ndamaged (the low-end estimate), plus\nthe per-incident fine, an administrative\nfine of $19,000 was warranted.\n<\/p>\n\n\n\n

For damage to 1,361 square meters of\nlive rock, the fine would come to $1.362\nmillion.\n<\/p>\n\n\n\n

However, the staff went on to provide\na breakdown of the coral and live rock\nvalues based on \u201cpenalty matrices\u201d the\nDAR has recently developed. Based on\nthose matrices, the revised stony coral\nvalue comes to just $2,015, while the\nrevised value of damaged live rock was\nplaced at $266,200.\n<\/p>\n\n\n\n

The recommendation also included\na tally of staff hours and costs for the\nsurveys done by DAR. Those costs came\nto $14,443.59.\n<\/p>\n\n\n\n

Finally, staff proposed a fine of $17,835\nas a result of the public\u2019s loss of use of\nthe area.\n<\/p>\n\n\n\n

Total penalties and costs amounted\nto $300,493.59.\n<\/p>\n\n\n\n

The Discussion\n<\/strong><\/p>\n\n\n\n

At its December 7, 2018 meeting, just moments before the Land Board took up discussion of the proposed penalties and fines for TWOL, deputy attorney general William Wynhoff informed the board that a contested-case hearing had been requested by attorney Bryan Ho, representing the company and its principals, Loi Hang and Nguyen Ngoc Tran. <\/p>\n\n\n\n

But on learning that by filing a request,\nthe board would effectively be precluded\nfrom discussing the matter, Ho requested\nthat the request be withdrawn without\nprejudice.\n<\/p>\n\n\n\n

Ho went on to state that the proposed\nfines were \u201cpenal and not compensatory\u201d\nand \u201care not awardable.\u201d The damage to\nlive rock made up the largest part of the\nproposed fine, he noted, but \u201clive rock is\nnot considered aquatic life.\u201d\n<\/p>\n\n\n\n

Brian Nielson, then acting head of\nDAR (since appointed to the position),\nexplained that live rock supports crustose\ncoralline algae, which are precursors to\ncorals. He also provided details on the\nDLNR\u2019s actual out-of-pocket costs of\ninvestigating the damages.\n<\/p>\n\n\n\n

Board member Stanley Roehrig asked why the division was going after just this one boat. \u201cIt\u2019s small money,\u201d he said, then asking \u201cwhy haven\u2019t we gone after the association? They got money. … The deep pocket is the association.\u201d <\/p>\n\n\n\n

Ho, however, noted that the workers\nwho were being brought to Hawai\u2018i on\nthe Pacific Paradise <\/em>when it ran aground\n\u201cwere not brought on for an association.\nThey were brought up [from American\nSamoa] for certain other vessels in the\nlongline industry… I don\u2019t even know\nwhat association member Roehrig\u201d was\nreferring to. If it was the Hawai\u2018i Longline\nAssociation, he said, that \u201cis organized\nsolely for lobbying.\u201d\n<\/p>\n\n\n\n

The penalties proposed \u201cvastly exceed what\u2019s allowed by law or what they can prove to the requisite degree of certainly,\u201d he continued, and the board should deny the proposed fines \u201cas a practical matter. The respondent\u2019s financial ability is a consideration that has to be considered. I provided the deputy attorney general all tax returns for 2015, 2016, and 2017. <\/p>\n\n\n\n

“They\u201d \u2013 the company \u2013 \u201care existing solely for the purpose of responding to inquires like this and possibly an inquiry by the Coast Guard to be reimbursed for their expense. That\u2019s why we have not voluntarily dissolved already.\u201d <\/p>\n\n\n\n

\u201cThis was an accident. Nobody wants\ntheir boat to go on the reef…. My clients\ndid a Herculean effort and spent more\nthan $1.5 million to get the boat off the\nreef,\u201d he said.\n<\/p>\n\n\n\n

Then-board member Keone Downing responded, \u201cYes, it\u2019s an accident, but at the same time, for me, somebody fell asleep on the job,\u201d referring to the fact that there was no one on duty in the wheelhouse when the vessel ran aground. <\/p>\n\n\n\n

With respect to fines, he went on\nto say, \u201cyou\u2019re saying that basically it\nshould only be $1,000 here or there…. I\nguess from my side, I get the hard part.\nThere was negligence. Is there a fee for\nnegligence?\u201d\n<\/p>\n\n\n\n

\u201cI personally don\u2019t think so,\u201d Ho\nreplied. \u201cWhether you want to call it\ncriminal or civil in nature, [the proposed\nfine] is still penal.\u201d\n<\/p>\n\n\n\n

Board chair Suzanne Case then noted,\n\u201cIt\u2019s a sanction.\u201d\n<\/p>\n\n\n\n

Board member Chris Yuen pointed\nout that the Hawai\u2018i Revised Statutes\nprovide for a fine of $1,000 per specimen\nfor coral, and DAR has proposed fines\nbased on the low end of its estimate of\ndamage to corals. Damage to live rock is\nmeasured on each square meter taken.\n<\/p>\n\n\n\n

\u201cThat is DAR\u2019s argument,\u201d Ho responded. But, \u201cthe legal definition of aquatic life does not include coral.\u201d As for damaging live rock, the maximum fine, Ho said, is $1,000. <\/p>\n\n\n\n

Board member Downing said he\nhad dived in the area, where \u201clive rock\nstands up 3-4 feet like a tree, so when\nyou break it, you break the habitat of\na lot of things, from top to bottom….\nIt could make sand, eventually. [The\ngrounding] destroyed an area, changed\nthe demographics of an area.\u201d\n<\/p>\n\n\n\n

The board entered into executive session. On reconvening in public, Board member Tommy Oi moved to approve the fines as recommended by DAR. <\/p>\n\n\n\n

Downing proposed an amendment, to\neliminate the penalty associated with\ndepriving the public of the use of the\narea. \u201cI don\u2019t think there was much public\nuse at that time. … It was closed off for\ndiving, and it was winter time, so there\nwas no surf.\u201d\n<\/p>\n\n\n\n

Roehrig noted that paddlers were inconvenienced, and Case objected to the idea of eliminating the penalty associated with public use altogether. In the end, the board reduced the public-use penalty by $10,000, leaving it at $7,835 and reducing the total fine to $290,493.59. <\/p>\n\n\n\n

At that point, Ho renewed his request\nfor a contested case hearing.\n<\/p>\n\n\n\n

The Outcome\n<\/strong><\/p>\n\n\n\n

In a normal contested case hearing, there\u2019s a hearing officer who hears witnesses, reviews records and evidence submitted by the parties, and issues a proposed decision. A court reporter prepares transcripts. On rare occasions, the full board might hear the proceedings. <\/p>\n\n\n\n

None of that seems to have occurred\nin this case.\n<\/p>\n\n\n\n

Instead, as reported in a \u201cproposed\nstipulated judgment and settlement\nagreement,\u201d after the contested case was\nrequested last December, the state and\nTWOL \u201chave engaged in subsequent\nsettlement discussions to attempt to\nresolve the matter prior to a contested\ncase hearing.\u201d\n<\/p>\n\n\n\n

On June 17, Brian Ho and DLNR\ndeputy director Robert Masuda signed\nthe agreement, which knocked down the\ntotal penalty to about an eighth of what\nDAR had proposed \u2013 from $300,493.59\nto $37, 603.59.\n<\/p>\n\n\n\n

On June 28, at a \u201csettlement approval\nhearing\u201d held moments before the Land\nBoard began its regular, publicly noticed\nmeeting, the agreement was approved\nwith the consent of four board mem-\nbers: Case, Roehrig, Yuen, and Jimmy\nGomes.\n<\/p>\n\n\n\n

The payment reflects the full cost of investigation ($14,443.59) and the public loss of use (proposed by DAR at $17,835 but reduced at the December meeting to $7,835). The loss of stony coral was valued at $2,015, mirroring the recommendation of DAR.<\/p>\n\n\n\n

Where the settlement diverged was in the assessment of damage to live rock.\nWhere DAR had proposed fines of\n$266,200, the settlement pegged damage\nat just 5 percent of that: $13,310.\n<\/p>\n\n\n\n

The settlement notes that TWOL claimed that \u201cDAR\u2019s request to be compensated for the alleged value of natural resources lost is not a viable claim as a matter of law,\u201d since the remedies authorized by law \u201care penal, not compensatory, in nature.\u201d At most, \u201cfor any proven violation\u201d of DLNR rules relating to damage to coral or live rock, the most the Land Board can fine TWOL is $1,000, it maintained. <\/p>\n\n\n\n

TWOL raised the same argument\nwith respect to DAR\u2019s proposed claim\nof damages resulting from the loss of\npublic use.\n<\/p>\n\n\n\n

Finally, there was the matter of the company\u2019s ability to pay restitution. \u201cIn deciding whether to settle a case, the board must consider not only the likelihood of prevailing on its claims, but also the likelihood of recovery in the event of a favorable judgment,\u201d the settlement states. <\/p>\n\n\n\n

\u201cOne important factor in reaching the proposed settlement was TWOL LLC\u2019s insolvency and inability to pay a fine. TWOL LLC\u2019s primary asset, the [commercial fishing vessel] Pacific Paradise<\/em>, was disposed of at sea after removal. TWOL LLC has not generated any revenue since the grounding…. On March 8, 2019, TWOL provided DAR with a letter the company received from the U.S. Coast Guard National Pollution Funds Center (NPFC) setting forth a demand for TWOL LLC to reimburse the NPFC $1.7 million… Based on DAR\u2019s investigation of TWOL LLC\u2019s financial capability and resources to date, if the board did continue to pursue this action, any penalty awarded by the board or any judgment on appeal would likely be unenforceable.\u201d <\/p>\n\n\n\n

According to the DLNR\u2019s public\nrelations office, the settlement payment\nwas made to the DLNR in July.\n<\/p>\n\n\n\n

\u2014 Patricia Tummons\n<\/strong><\/p>\n","protected":false},"excerpt":{"rendered":"

At approximately 10:30 p.m. on October 10, 2017, the Commercial Fishing Vessel (CFV) Pacific Paradise, a 79’ longline fishing vessel owned by TWOL, LLC, ran aground in shallow waters of the Waikiki-Diamond Head Shoreline Fisheries Management Area (FMA). Over the … Continued<\/a><\/p>\n","protected":false},"author":1,"featured_media":12018,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[461,8],"tags":[],"class_list":["post-12017","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-december-2019","category-fisheries"],"_links":{"self":[{"href":"https:\/\/environment-hawaii.org\/index.php?rest_route=\/wp\/v2\/posts\/12017","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/environment-hawaii.org\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/environment-hawaii.org\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/environment-hawaii.org\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/environment-hawaii.org\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=12017"}],"version-history":[{"count":0,"href":"https:\/\/environment-hawaii.org\/index.php?rest_route=\/wp\/v2\/posts\/12017\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/environment-hawaii.org\/index.php?rest_route=\/wp\/v2\/media\/12018"}],"wp:attachment":[{"href":"https:\/\/environment-hawaii.org\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=12017"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/environment-hawaii.org\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=12017"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/environment-hawaii.org\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=12017"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}