{"id":331,"date":"2014-04-01T23:30:10","date_gmt":"2014-04-01T23:30:10","guid":{"rendered":"http:\/\/localhost:8888\/EH\/?p=331"},"modified":"2014-04-01T23:30:10","modified_gmt":"2014-04-01T23:30:10","slug":"hawaii-supreme-court-supports-4m-fine-against-pflueger-company","status":"publish","type":"post","link":"https:\/\/environment-hawaii.org\/?p=331","title":{"rendered":"Hawai`i Supreme Court Supports $4M Fine Against Pflueger Company"},"content":{"rendered":"
It\u2019s finally settled. James Pflueger\u2019s company, Pila`a 400, LLC, must pay the state $4 million for damaging the reef at Pila`a Bay in North Kaua`i.<\/div>\n
\nAfter heavy rains in November 2001, a massive wall of mud from Pila`a 400\u2018s mauka land, which had been excessively and illegally graded, smothered the beach and reef, as well as a home and car owned by kuleana tenants Amy and Richard Marvin.<\/p>\n

After surveying the area in 2002 and finding the once-pristine reef had been extensively damaged, the state Department of Land and Natural Resources\u2019 Office of Conservation and Coastal Lands recommended in August 2003 that the Board of Land and Natural Resources fine Pflueger, Pflueger Properties (the land\u2019s previous owner), and Pila`a 400 $5,830,000 and assess $38,000 in administrative costs.<\/p>\n

A contested case hearing involving only Pila`a 400 ensued. After hearing from experts on both sides about the value and extent of the damaged area and the causes of that damage, hearing officer Michael Gibson recommended in December 2004 a reduced fine of $2,315,000 and about $70,000 in administrative costs. What\u2019s more, he recommended that the fine be used for remediation of Pila`a 400\u2019s property, which at the time was estimated to cost somewhere between $4 million and $5 million.<\/p>\n

In its June 2005 decision and order, the Land Board adopted Gibson\u2019s recommendation regarding administrative costs, but imposed a much larger fine of $3,963,000 that it felt reflected the impact to the bay\u2019s intrinsic and commodity values, as well as reef and beach restoration costs.<\/p>\n

The board had also agreed with the deputy attorney general representing the DLNR, William Wynhoff, who had argued that allowing the fine to offset remediation costs would really result in no penalty at all. Wynhoff had argued, and the Land Board agreed, that Pila`a 400 should pay to fix its own property.<\/p>\n

Pila`a 400 filed an appeal in 5th Circuit Court. The company argued that the Land Board was required by law to adopt rules establishing a methodology to calculate natural resource damages but that it had not done so. It also contended that because the illegal grading occurred in the Agriculture District and not the Conservation District, the Land Board did not have authority to find a violation. Finally, it argued that the DLNR failed to properly identify the scope of the contested case in the hearing notice. Specifically, Pila`a 400 argued that the DLNR should have stated upfront that it was pursuing the violation case under the rules prohibiting the placement of solid material on state land.<\/p>\n

Attorneys for the DLNR and the Land Board responded that the Land Board has the discretion to calculate damages without rules. They also argued that the source of the mud is irrelevant; what matters is that Pila`a 400 placed mud or allowed it to be placed on state submerged lands without a permit. Finally, they argued that the contested case hearing notice clearly explained the scope of the hearing, and properly cited the appropriate chapters of Hawai`i Revised Statues involved. And if the notice wasn\u2019t clear, Pila`a could have asked for a bill of particulars, which it didn\u2019t.<\/p>\n

The 5th Circuit Court upheld the Land Board\u2019s decision, as did the Intermediate Court of Appeals in reviewing the lower court\u2019s ruling. Undeterred, Pila`a 400 appealed to the state Supreme Court, which issued its opinion on February 14 siding with the two previous court decisions.<\/p>\n

The high court agreed with the ICA that \u201cimposing a single formulaic methodology for assessing [natural resource] penalties would be impracticable.\u201d<\/p>\n

Justice Richard Pollack, who wrote the decision, also pointed out that although the contested case hearing notice did not cite the specific rule regarding the placement of solid material on state lands, it did note that the hearing was being held to address natural resource damages \u201cdue to excessive sedimentation\u201d of submerged lands.<\/p>\n

Pollack further pointed out that even Pila`a 400\u2019s own attorney stated during the contested case proceedings, \u201c[E]veryone knew this was about mud going on the beach and into the nearshore reef.\u201d<\/p>\n

For Further Reading<\/i><\/p>\n

For more background on this case, read the following articles available on our website,\u00a0www.environment-hawaii.org<\/a><\/p>\n