The Hawai‘i Supreme Court has concluded that the attorneys involved in the $4 billion Lahaina fire settlement aren’t entitled to a bigger slice of the pie.
Earlier this year, attorneys involved in the years-long Maui settlement case appealed Maui Judge Peter Cahill’s June ruling that determined how much money attorneys could receive for their part in the case.
Cahill’s verdict was that attorneys could only claim up to 8% of the settlement funds. At the same time, he established out of the $4 billion a $222 million common benefit fund that Hawai‘i-based lawyers could tap into to receive compensation proportional to the amount of work they did on the case. Out-of-state attorneys could not qualify for that fund, leaving them only with the 8%.
But although three attorneys from the Hawai‘i law firms Ranken & Shnider, the PACLAW Group and the San Diego-based Montegna & Thickstun appealed that decision — arguing that Cahill didn’t have the authority to establish the common benefit fund — the state Supreme Court on Wednesday ruled that Cahill’s arrangement will stand, for the most part.
Associate Justice Todd Eddins, writing for the opinion of the court, rejected the attorneys’ arguments. If the court is unable to “coordinate thousands of related claims and to supervise the settlement that resolved them,” Eddins wrote, “it would be powerless over the very proceeding it opened. The one that produced $4.037 billion for the victims.”
However, Eddins did agree with the appellants that Cahill’s order was flawed in some ways. For example, Cahill’s order declared that the decisions of the Common Fee Review Board — the body that determines who gets how much from the common benefit fund — could not be challenged and that attempting to appeal those decisions would void any award from the fund.
These provisions, Eddins said, are unconstitutional. As the state constitution protects the right to judicial review, Cahill’s anti-appeal provisions would inherently penalize people for attempting to exercise their constitutional rights.
Similarly, a provision requiring the claims administrator to withhold all future fee payments to an attorney who files an appeal also impinges on people’s rights.
However, these faults don’t destroy the entire $222 million common benefit fund. Eddins’ verdict simply removes those problematic clauses and keeps the remainder of Cahill’s order intact.
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