Case 1:24-cv-00259-JAO-WRP Document 46 Filed 10/10/24 Page 1 of 33 PageID.626
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`7520
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`COX FRICKE LLP
`A LIMITED LIABILITY LAW PARTNERSHIP LLP
`
`JOACHIM P. COX
`
`jcox@cfhawaii.com
`RANDALL C. WHATTOFF 9487
`
`rwhattoff@cfhawaii.com
`800 Bethel Street, Suite 600
`Honolulu, Hawai‘i 96813
`Telephone: (808) 585-9440
`Facsimile: (808) 275-3276
`
`Attorneys for Defendants
`MAUI ELECTRIC COMPANY, LIMITED,
`HAWAIIAN ELECTRIC COMPANY, INC.,
`HAWAIIAN ELECTRIC INDUSTRIES, INC., and
`HAWAII ELECTRIC LIGHT COMPANY, INC.
`
`[additional counsel on next page and signature page]
`
`
`
`IN THE UNITED STATES DISTRICT COURT
`FOR THE DISTRICT OF HAWAI`I
`
`
`
`In re: Lahaina Wildfire Litigation
`
`
`
`
`
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`
`
`
`
`
`
` 1:24-CV-00259-JAO-WRP
`(Consolidated Case; Class Action)
`
`CERTAIN DEFENDANTS’ JOINT
`OPPOSITION TO SUBROGATION
`PLAINTIFFS’ MOTION TO
`INTERVENE [DKT. 21];
`DECLARATION OF ERIC H.
`TSUGAWA; DECLARATION OF
`RALPH J. O’NEILL;
`DECLARATION OF ALAN VAN
`ETTEN; DECLARATION OF
`DEREK R. KOBAYASHI;
`
`

`

`Case 1:24-cv-00259-JAO-WRP Document 46 Filed 10/10/24 Page 2 of 33 PageID.627
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`
`DECLARATION OF JAMES W.
`GEIGER; DECLARATION OF
`RANDALL C. WHATTOFF;
`EXHIBITS A - K
`
`DATE:
`TIME:
`JUDGE:
`
`TRIAL:
`
`
`October 29, 2024
`9:00 a.m.
`Hon. Jill A. Otake
`
`None Set
`
`
`
`
`MUNGER, TOLLES & OLSON LLP
`
`BRAD D. BRIAN (pro hac vice)
`
`brad.brian@mto.com
`RICHARD C. ST. JOHN (pro hac vice)
`
`richard.stjohn@mto.com
`NICHOLAS D. FRAM (pro hac vice)
`
`nicholas.fram@mto.com
`JACOB MAX ROSEN (pro hac vice)
` max.rosen@mto.com
`350 South Grand Avenue 50th Floor
`Los Angeles, California 90071
`Telephone: (213) 683-9100
`Facsimile: (213) 687-3702
`
`Attorneys for Defendants
`MAUI ELECTRIC COMPANY, LIMITED,
`HAWAIIAN ELECTRIC COMPANY, INC.,
`HAWAIIAN ELECTRIC INDUSTRIES, INC., and
`HAWAII ELECTRIC LIGHT COMPANY, INC.
`
`
`
`
`
`
`
`

`

`Case 1:24-cv-00259-JAO-WRP Document 46 Filed 10/10/24 Page 3 of 33 PageID.628
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`
`TABLE OF CONTENTS
`
`I.
`
`C.
`
`D.
`
`E.
`
`F.
`
`B.
`
`3.
`
`Page
`BACKGROUND ............................................................................................ 4
`Individual Plaintiffs, Class Plaintiffs, and Subrogation Plaintiffs
`A.
`Bring Hundreds of Actions Arising Out of the Maui Fires .................. 4
`B. Months of Arm’s Length Mediation and Settlement Discussions
`Culminate in an Historic Proposed Global Settlement ........................ 5
`Judge Cahill Holds that, Under Hawai‘i Law, the Subrogation
`Plaintiffs’ Independent Claims Against Defendants Will Be
`Extinguished by the Global Settlement ................................................ 7
`The Hawai‘i Supreme Court Agrees to Address Judge Cahill’s
`Ruling on an Expedited Basis .............................................................. 9
`The Subrogation Plaintiffs’ Actions Are Transferred to the
`Hawai‘i State Court Overseeing the Proposed Global
`Settlement ........................................................................................... 10
`The Subrogation Plaintiffs File the Motion Without Meeting
`and Conferring ................................................................................... 11
`II. ARGUMENT ............................................................................................... 13
`The Court Should Postpone a Hearing on the Subrogation
`A.
`Plaintiffs’ Motion Until the Hawai‘i Supreme Court’s Decision
`on the Reserved Questions ................................................................. 14
`In the Alternative, the Court Should Deny the Motion ...................... 15
`1.
`The Subrogation Plaintiffs Failed to Meet-and-Confer ........... 15
`2.
`This Court Lacks Subject-Matter Jurisdiction Over the
`Subrogation Plaintiffs’ Claims in Intervention ........................ 17
`The Subrogation Plaintiffs Have No Legally Protectable
`Interest Meriting Intervention .................................................. 19
`(a) The Subrogation Plaintiffs Have No Significant
`Protectible Interest in This Action to Protect
`Their Supposed “Right” to Pursue Independent
`Claims Against Defendants ......................................... 20
`The Class Action Settlement Will Be
`(i)
`Effectuated in State Court, not This Court. ......... 20
`The Subrogation Plaintiffs Have Failed to
`Demonstrate a Significant Protectable
`Interest. ................................................................ 21
`
`(ii)
`
`
`
`i
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`(b) The Subrogation Plaintiffs’ Other Arguments
`About Purported Interests Fail .................................. 23
`Resolution of This Action Will Not Impair Any Rights .......... 24
`4.
`III. CONCLUSION ............................................................................................ 25
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`ii
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`Case 1:24-cv-00259-JAO-WRP Document 46 Filed 10/10/24 Page 5 of 33 PageID.630
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`TABLE OF AUTHORITIES
`
`
`FEDERAL CASES
`Arakaki v. Cayetano,
`324 F.3d 1078 (9th Cir. 2003) ........................................................................... 19
`Canatella v. California,
`404 F.3d 1106 (9th Cir. 2005) ........................................................................... 17
`
`Page(s)
`
`Chambers Med. Found. v. Chambers,
`236 F.R.D. 299 (W.D. La. 2006) ....................................................................... 17
`Clark v. QG Printing II, LLC,
`No. 1:18-CV-00899, 2021 WL 38180 (E.D. Cal. Jan. 5, 2021) .................. 17, 18
`Colorado River Water Conservation Dist. v. U.S.,
`424 U.S. 800 (1976) .......................................................................................... 25
`DePaepe v. White,
`No. CV 20-00198 JAO-WRP, 2020 WL 3472907 (D. Haw. June
`24, 2020) ............................................................................................................ 23
`Great Am. Ins. v. AOAO of Lahaina Residential Condominium,
`Civ. No. 24-00075-JAO-BMK, ECF No. 50 (Aug. 29, 2024) .......................... 18
`Lexington Ins. Co. v. Caleco, Inc.,
`No. CIV 01-5196, 2003 WL 21652163 (E.D. Pa. Jan. 25, 2003) ...................... 19
`
`Perry v. Proposition 8 Off. Proponents,
`587 F.3d 947 (9th Cir. 2009) ....................................................................... 13, 24
`
`Ranchers Cattlemen Action Legal Fund United Stockgrowers of Am.
`v. U.S. Dep’t of Agric.,
`143 F. App’x 751 (9th Cir. 2005) ...................................................................... 19
`Twins Special Co., Ltd. v. Twins Special, LLC et al.,
`No. 1:22-CV-00118, ECF No. 30 (D. Haw. Sept. 27, 2022) ............................. 15
`
`
`
`iii
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`Case 1:24-cv-00259-JAO-WRP Document 46 Filed 10/10/24 Page 6 of 33 PageID.631
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`STATE CASES
`Certain Underwriters at Lloyd’s London Subscribing to Policy
`Number TRIB223061 v. Maui Elec. Co.,
`No. 1CCV-24-0000179 ....................................................................................... 5
`Hyundai Marine & Fire Ins. v. Maui Elec. Co.,
`No. 1CCV-24-0000437 ....................................................................................... 5
`Yukumoto v. Tawarahara,
`140 Haw. 285 (2017) ....................................................................................... 7, 9
`FEDERAL STATUTES
`28 U.S.C. § 1332 ............................................................................................... 17, 18
`28 U.S.C. § 1367 ............................................................................................... 17, 18
`Class Action Fairness Act ............................................................................. 4, 17, 18
`Multiparty Multiforum Trial Jurisdiction Act of 2002 ............................................. 4
`STATE STATUTES
`H.R.S. § 431:13-013 ................................................................................................. 7
`H.R.S. § 663-10 .................................................................................................. 7, 22
`FEDERAL RULES
`Fed. R. Civ. P. 18 .................................................................................................... 23
`Fed. R. Civ. P. 24 ........................................................................................ 12, 13, 16
`RULES - OTHER
`Local Rule 7.8 ............................................................................................... 2, 15, 16
`
`
`
`
`iv
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`

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`CERTAIN DEFENDANTS’ JOINT OPPOSITION TO
`SUBROGATION PLAINTIFFS’ MOTION TO INTERVENE
`The Subrogation Plaintiffs’ motion to intervene is an improper procedural
`
`attempt to derail the global settlement of the Maui Fires cases. It is also flagrant
`
`forum shopping. Unhappy that the Honorable Peter T. Cahill ruled that, under
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`Hawai‘i law, the Subrogation Plaintiffs cannot pursue their independent state-law
`
`claims against Defendants if the global settlement becomes effective, the
`
`Subrogation Plaintiffs then unsuccessfully sought to relitigate these issues in the
`
`First Circuit in front of the Honorable Dean E. Ochiai. Now they seek a third bite
`
`at the apple: a different ruling on the exact same question of Hawai‘i law from a
`
`federal court.
`
`That is not how our system works, in particular as to a question of state law.
`
`Rather, if the Subrogation Plaintiffs disagree with Judge Cahill’s ruling regarding
`
`the contours of Hawai‘i law, then their recourse is to take that ruling up through
`
`the state appellate system. And that is exactly what is already happening: the day
`
`before the Subrogation Plaintiffs filed this motion, the Hawai‘i Supreme Court
`
`agreed to consider three “reserved questions” of Hawai‘i law that, once answered,
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`will resolve whether the Subrogation Plaintiffs may pursue independent claims
`
`against the Defendants in any court under Hawai‘i law, if the global settlement of
`
`the Maui Fires litigation becomes effective.
`
`Because the Hawai‘i Supreme Court will soon consider the validity of the
`
`
`
`
`1
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`

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`underlying premise of the Subrogation Plaintiffs’ motion—that they have
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`independent claims against the Defendants even if the global settlement is finalized
`
`and their insureds’ claims are released—this Court should not decide this motion
`
`now and should continue the hearing (as set forth in the Motion to Continue).
`
`If the Court chooses not to wait for the Hawai‘i Supreme Court and elects to
`
`resolve the Motion, it should deny the motion for at least four reasons.
`
`First, the Subrogation Plaintiffs failed to meet and confer with the
`
`Defendants before filing their motion in violation of Local Rule 7.8.
`
`Second, the Motion must be denied because this Court lacks subject-matter
`
`jurisdiction over the insurers’ claims in intervention.
`
`Third, the Subrogation Plaintiffs lack any protectable interest in this
`
`proceeding. Because the State of Hawai‘i is a party to the settlement but not a
`
`party to this action, and as counsel for the class has stated publicly, the proposed
`
`class action portion of the settlement will not be consummated in this federal
`
`action. Instead, in order to allow the State to participate as a party, the
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`administration of the class settlement will move forward in Hawai‘i state court—
`
`the same state court where the Subrogation Plaintiffs have actions pending already.
`
`Regardless, there is no scenario where the Subrogation Plaintiffs have a right
`
`and need to intervene in any action to protect any legally protectable interest. If
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`the Subrogation Plaintiffs’ view of Hawai‘i law is correct, and the Hawai‘i
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`
`
`
`2
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`

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`Supreme Court holds that they are entitled to pursue independent actions against
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`Defendants even if the global settlement becomes effective, then they do not need
`
`to intervene in this action, nor any action where the class settlement is effectuated.
`
`They can pursue the actions they have already filed in state court. If the Hawai‘i
`
`Supreme Court upholds Judge Cahill’s order, then the Subrogation Plaintiffs still
`
`have no right to intervene: they would have no legally protectible interest in trying
`
`to scuttle a settlement the insureds are entitled to effectuate without the insurers’
`
`assent. Instead, their recourse would be to assert liens against settlement proceeds.
`
`But the global settlement is not yet effective, making any motion seeking to protect
`
`that interest premature; and the procedure for asserting liens would occur in state
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`court. Finally, if the global settlement does not become effective, the Subrogation
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`Plaintiffs’ arguments are moot as no claims will be released.
`
`Fourth, the Court should deny intervention on the grounds that the complaint
`
`in intervention that the Subrogation Plaintiffs propose to file is the same complaint
`
`that they are currently pursuing in state court. The Court should not countenance
`
`their attempt to bring the exact same claims against the exact same parties in two
`
`different forums. Resolution of this action will not affect their ability to bring all
`
`of these arguments in their state-court action.
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`
`
`
`3
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`

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`Case 1:24-cv-00259-JAO-WRP Document 46 Filed 10/10/24 Page 10 of 33 PageID.635
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`I.
`
`BACKGROUND
`A.
`Individual Plaintiffs, Class Plaintiffs, and Subrogation Plaintiffs
`Bring Hundreds of Actions Arising Out of the Maui Fires
`Hundreds of lawsuits arising out of the August 8, 2023 Maui Fires were filed
`
`by Individual Plaintiffs (“IPs”), mostly in the Second Circuit court on Maui, where
`
`Judge Cahill established a Special Proceeding to coordinate them. Those few IP
`
`cases that were initially brought in the First Circuit on O‘ahu were dismissed or
`
`transferred to the Second Circuit by consent. Court-appointed Liaison Counsel
`
`filed a “Master Complaint” on behalf of the IPs in the Special Proceeding in
`
`January 2024. Today, over 700 cases brought by IPs are pending before Judge
`
`Cahill, and no case brought by any IP is pending in any other court.
`
`Three putative class actions arising out of the Maui Fires that were filed in
`
`state court were removed to this Court and consolidated into this action on behalf
`
`of putative class members (“Class Plaintiffs”).1 The IPs and Class Plaintiffs bring
`
`claims against various Defendants they allege are responsible for the Maui Fires.
`
`Three days after Liaison Counsel filed the IP Master Complaint, over 150
`
`insurance companies filed their own action in the First Circuit court on O‘ahu. See
`
`Exhibit A to the Declaration of Randall C. Whattoff (“Whattoff Decl.”), Amguard
`
`
`1 Various Defendants removed the IP cases to this Court under the Multiparty
`Multiforum Trial Jurisdiction Act of 2002 (“MMTJA”). This Court remanded the
`IP cases, holding that MMTJA jurisdiction was lacking, but ultimately retained
`jurisdiction over the class cases under the Class Action Fairness Act.
`
`
`
`
`4
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`

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`Ins. Co. v. Maui Elec. Co., No. 1CCV-24-0000068, Compl.; Demand For Jury
`
`Trial, Dkt. No. 1 (Jan. 12, 2024) (“Amguard Complaint”). Other insurers filed two
`
`additional actions in the First Circuit as well.2 The plaintiffs in these three actions
`
`are collectively referred to as the “Subrogation Plaintiffs.”
`
`The Subrogation Plaintiffs seek damages for payments they allegedly made
`
`to their insureds arising from the Maui Fires. All causes of action brought by the
`
`Subrogation Plaintiffs were brought by the IPs in the Special Proceeding, and all
`
`Defendants named by the Subrogation Plaintiffs were named by the IPs. The
`
`Subrogation Plaintiffs even copied allegations from the IP Master Complaint.
`
`B. Months of Arm’s Length Mediation and Settlement Discussions
`Culminate in an Historic Proposed Global Settlement
`Judge Cahill ordered the parties in the Special Proceeding to mediation
`
`sessions facilitated by three court-appointed mediators: Keith Hunter, the Hon.
`
`Louis M. Meisinger, Ret., and the Hon. Daniel Buckley, Ret. The mediators
`
`conducted numerous mediation sessions over the course of several months
`
`attended by all key stakeholders in the Maui Fires litigation, including counsel for
`
`the IPs, Class Plaintiffs, all Defendants, and the Subrogation Plaintiffs. Those
`
`efforts culminated in a mediators’ proposal for a total settlement payment to be
`
`
`2 Certain Underwriters at Lloyd’s London Subscribing to Policy Number
`TRIB223061 v. Maui Elec. Co., No. 1CCV-24-0000179; Hyundai Marine & Fire
`Ins. v. Maui Elec. Co., No. 1CCV-24-0000437. The insurers in Amguard later
`amended their complaint twice to add additional insurers as plaintiffs.
`
`
`
`
`5
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`

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`made by the Defendants to globally resolve all of the Maui Fires litigation.
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`Thereafter, Liaison Counsel for the IPs, the Class Plaintiffs, and all
`
`Defendants entered into a settlement agreement in principle that would globally
`
`resolve the Maui Fires litigation. As part of that settlement, memorialized in a
`
`Term Sheet, Defendants agreed to pay an aggregate settlement amount—
`
`approximately $4 billion—to resolve all claims arising out of the Maui Fires.
`
`Whattoff Decl. Ex. B, See In re Maui Wildfire Cases, Individual Action Pls.’ Mot.
`
`for Order Re: Operation of H.R.S. § 663-10, Ex. 1, Dkt. No. 1740 (Aug. 2, 2024)
`
`(“Term Sheet”). The Subrogation Plaintiffs did not sign the Term Sheet. Id.
`
`Certain conditions must occur before the global settlement is final. Those
`
`conditions, in part, ensure that the proposed settlement achieves global peace by
`
`resolving all claims, including insurers’ claims, consistent with the mediators’
`
`proposal. One such condition is that for the proposed settlement to become final,
`
`either (1) the Subrogation Plaintiffs must reach an agreement to release their
`
`claims against Defendants (presumably after negotiating with IPs on dividing the
`
`aggregate settlement amount); or (2) there must be a final, unappealable ruling that
`
`under Hawai‘i law, if the settlement becomes effective, the insurers’ exclusive
`
`remedy is to assert liens against their insureds’ settlement proceeds rather than
`
`maintain separate claims against Defendants outside of the global settlement. Id.
`
`¶ 4(b). Another condition is that the Subrogation Plaintiffs’ actions must be
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`
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`6
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`

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`Case 1:24-cv-00259-JAO-WRP Document 46 Filed 10/10/24 Page 13 of 33 PageID.638
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`dismissed with prejudice. Id. ¶ 4(c). The Term Sheet requires that the IPs and
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`Class Plaintiffs indemnify the Defendants with respect to their insurers’ claims—
`
`further ensuring the settlement is a global one. Id. ¶ 5.
`
`C.
`
`Judge Cahill Holds that, Under Hawai‘i Law, the Subrogation
`Plaintiffs’ Independent Claims Against Defendants Will Be
`Extinguished by the Global Settlement
`On August 2, 2024, to satisfy the conditions under Paragraph 4 of the Term
`
`Sheet, the IPs filed a motion in the Special Proceeding requesting that Judge Cahill
`
`enter an order providing that, if the settlement is effectuated, the Subrogation
`
`Plaintiffs’ “exclusive remedy under Hawaii law would be asserting liens against
`
`policyholders’ recovery, thereby barring subrogation lienholders from bringing an
`
`independent action.” Whattoff Decl. Ex. C, In re Maui Fire Cases, Pls.’ Mot. For
`
`Orders Re: Operation of H.R.S. § 663-10 & Appl. For Interlocutory Appeal Under
`
`H.R.S. § 651-1(b), at 2, Dkt. No. 1740 (Aug. 2, 2024). The IPs argued that H.R.S.
`
`§§ 431:13-013(1) and 663-10 required this result. As the IPs explained, the
`
`Hawai‘i Supreme Court had previously interpreted these statutes to require
`
`dismissal of an insurer’s subrogation claim after the insured settled with a
`
`tortfeasor, with the insurer limited to asserting a lien under § 663-10. See
`
`Yukumoto v. Tawarahara, 140 Haw. 285 (2017). The Subrogation Plaintiffs
`
`opposed, arguing, inter alia, that Yukumoto was limited to health insurance. See
`
`Whattoff Decl. Ex. D, In re Maui Fire Cases, Non-Party Subrogating Insurers
`
`
`
`
`7
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`

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`Mem. Opposing Individual Action Pls. Mot. For Order Re: Operation Of H.R.S.
`
`§ 663-10 & Appl. For Interlocutory Appeal, Dkt. No. 1905 (Aug. 11, 2024).
`
`
`
`Judge Cahill granted the IPs’ motion following an hours-long hearing on
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`August 13, 2024, and subsequently issued a written order. Whattoff Decl. Ex. E,
`
`In re Maui Fire Cases, Case No. 2CSP-23-0000057, Order (1) Granting Individual
`
`Action Pls.’ Mot. For Orders Re: Operation Of H.R.S. § 663-10 And (2) Den.
`
`Without Prejudice Appl. for Interlocutory Appeal Under H.R.S. § 651-1(b), Dkt.
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`No. 1954 (Aug. 19, 2024) (“H.R.S. § 663-10 Order”). The order held that, if the
`
`proposed settlement becomes effective, “any subrogation claimant’s exclusive
`
`remedy for any Maui Fires claims would be asserting rights of reimbursements, if
`
`any, against an insured policyholder’s respective settlement amount,” and the
`
`“Subrogating Insurers are barred from bringing or maintaining any independent
`
`claims against” the settling Defendants. Id. at 6. It also held that Yukumoto
`
`applied “directly to the claims of the Maui Fires if the Global Settlement becomes
`
`effective,” rejecting the insurers’ contrary argument. Id. at 5.
`
`
`
`Judge Cahill also rejected the argument that the Subrogation Plaintiffs made
`
`before him—and have repeated in multiple forums since—that the global
`
`settlement was somehow collusive. “Based upon the evidence before me and the
`
`history of mediation and settlement discussions,” Judge Cahill held, “the proposed
`
`settlement is not collusive. It reflects the outcome of a settlement process
`
`
`
`
`8
`
`

`

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`supervised by court-appointed mediators who worked with all parties, including
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`Subrogating Insurers, to develop a global mediators’ proposal, and that the
`
`aggregate settlement amount in the proposed settlement reflects that proposal.” Id.
`
`at 7.
`
`D. The Hawai‘i Supreme Court Agrees to Address Judge Cahill’s
`Ruling on an Expedited Basis
`As noted, for the global settlement to become effective, Judge Cahill’s order
`
`must become final and unappealable within nine months. Term Sheet ¶ 4(b). IPs
`
`thus moved for Judge Cahill to reserve questions to the Hawai‘i Supreme Court as
`
`to the scope of Hawai‘i subrogation law. The Subrogation Plaintiffs opposed
`
`expedited appellate review, even though they disagreed with the substance of
`
`Judge Cahill’s ruling, laying bare that their sole goal was to derail the settlement.
`
`On September 11, 2024, Judge Cahill reserved three questions “of urgent
`
`public importance” to the Hawai‘i Supreme Court. The first question was:
`
`Question 1: Does the holding of Yukumoto v. Tawarahara, 140 Haw.
`285 (2017), 400 P.3d 486, (2017), which limited the subrogation
`remedies available to health insurers to reimbursement from their
`insureds under HRS § 663-10 and barred independent actions against
`tortfeasors who settled with the insureds, extend to property and
`casualty insurance carriers?
`
`
`Whattoff Decl. Ex. F, In re Maui Fire Cases, Am. Order Granting The Court’s
`
`Own Motion For Reserved Questions To The Hawai‘i Supreme Court Under
`
`HRAP Rule 15(a), at 2–3, Dkt. No. 2015 (Sept. 11, 2024).
`
`
`
`
`9
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`

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`Case 1:24-cv-00259-JAO-WRP Document 46 Filed 10/10/24 Page 16 of 33 PageID.641
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`On September 25, 2024, the Hawai‘i Supreme Court accepted Judge Cahill’s
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`reserved questions. Whattoff Decl. Ex. G, In re Maui Fire Cases, Order Accepting
`
`Reserved Questions, Dkt. No. 2020 (Sept. 25, 2024). The Hawai‘i Supreme Court
`
`set an expedited schedule, with opening briefs due within 40 days and answering
`
`briefs due 40 days thereafter, meaning briefing will be complete by mid-December
`
`2024. See id. at 1–3. IPs, Defendants, and Subrogation Plaintiffs may file both
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`opening and answering briefs. Id. at 2–3.
`
`E.
`
`The Subrogation Plaintiffs’ Actions Are Transferred to the
`Hawai‘i State Court Overseeing the Proposed Global Settlement
`In light of Judge Cahill’s H.R.S. § 663-10 Order, certain Defendants moved
`
`to transfer the Subrogation Plaintiffs’ actions from the First Circuit on O‘ahu to the
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`Second Circuit on Maui—where the Subrogation Plaintiffs could be, as they now
`
`argue to this Court they should be, before the same court that will effectuate the
`
`proposed global settlement. Notwithstanding their purported desire to be a part of
`
`that process, the Subrogation Plaintiffs vigorously opposed the transfer.
`
`In opposing the transfer motions, the Subrogation Plaintiffs attempted to re-
`
`litigate the merits of Judge Cahill’s order, asking the Honorable Dean E. Ochiai to
`
`hold that they are entitled to pursue their own actions against Defendants,
`
`regardless of what happens with the settlement, in a forum of their choosing. See
`
`Whattoff Decl. Ex. H, Amguard, No. 1CCV-24-0000068, Pls.’ Mem. Opposing
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`Defs. Mot. To Transfer Venue, Dkt. 322 (Sept. 10, 2024). Judge Ochiai rejected
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`10
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`Case 1:24-cv-00259-JAO-WRP Document 46 Filed 10/10/24 Page 17 of 33 PageID.642
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`the Subrogation Plaintiffs’ transparent attempt to obtain a different ruling on the
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`same questions from a different judge. He stated that “subrogation rights don’t
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`dictate that . . . the insurer plaintiffs can go venue-shopping, in essence, as it
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`appears to possibly have been the case here.” Whattoff Decl. Ex. I, Transcript of
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`Audio Recording, at 33:24–34:2 (Sept. 18, 2024). Judge Ochiai granted the
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`motions to transfer from the bench, with a written order pending.
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`F.
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`The Subrogation Plaintiffs File the Motion Without Meeting and
`Conferring
`As of September 25, 2024, the Subrogation Plaintiffs’ actions were set to be
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`transferred to the Second Circuit, where all efforts to effectuate the proposed
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`global settlement have thus far occurred, and where the Subrogation Plaintiffs had
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`already participated in significant briefing on H.R.S. § 663-10. Nevertheless, and
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`without meeting and conferring with a single Defendant, the Subrogation Plaintiffs
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`filed the instant motion to intervene (“Motion”) the very next day. See ECF No. 21
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`(“Mot.”).
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`The thrust of their argument is that because the class action component of
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`the proposed global settlement may extinguish their claims under Hawai‘i law (as
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`Judge Cahill held), they have a right to intervene in the court that will oversee and
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`effectuate that class action to try and prevent their claims from being released. See
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`ECF No. 21-1 (“Mem.”) They specifically argue—notwithstanding Judge Cahill’s
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`order to the contrary and the pending resolution of these questions in the Hawai‘i
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`Case 1:24-cv-00259-JAO-WRP Document 46 Filed 10/10/24 Page 18 of 33 PageID.643
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`Supreme Court—that they “are entitled to pursue the underlying tortfeasors for
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`recovery.” Mem. at 2. In other words, their Motion is premised on the notion that
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`Judge Cahill’s H.R.S. § 663-10 Order was wrong about Hawai‘i law. They make
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`no secret that they will ask this Court to hold as much (even though this proceeding
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`is currently stayed), and they do so at the very same moment that the Hawai‘i
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`Supreme Court is reviewing whether they have independent claims at all. Id.
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`In the Motion, the Subrogation Plaintiffs represent that they met and
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`conferred with Defendants. Mot. at 2. In fact, they never reached out to or met
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`and conferred with Defendants. Meet-and-confer was particularly essential here.
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`In addition to timing issues with regard to the Hawai‘i Supreme Court, the parties
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`could have discussed a basic factual problem with Subrogation Plaintiffs’ motion:
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`Defendants would have told them that the settling parties intend to have the class
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`action component of the settlement resolved in state court,3 where the State of
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`Hawai‘i (a defendant party to the Term Sheet) does not have sovereign immunity;
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`and where Judge Cahill may oversee both the individual and class components of
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`the settlement contemplated by the single Term Sheet.
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`3 Whattoff Decl. Ex. J, In re Maui Fire Cases, Consolidated Class Pls.’ Statement
`Re: Status Conference Order Re: Next Steps, Dkt. No. 2024 (Oct. 1, 2024) (“CC
`Counsel believe the class settlement should be presented to the Second Circuit
`for preliminary and final class approvals.”).
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`Case 1:24-cv-00259-JAO-WRP Document 46 Filed 10/10/24 Page 19 of 33 PageID.644
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`II. ARGUMENT
`“An applicant for intervention as of right must satisfy four criteria
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`under Federal Rule of Civil Procedure 24(a)(2): (1) the applicant must timely move
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`to intervene; (2) the applicant must have a significantly protectable interest relating
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`to the property or transaction that is the subject of the action; (3) the applicant must
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`be situated such that the disposition of the action may impair or impede the party's
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`ability to protect that interest; and (4) the applicant's interest must not be
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`adequately represented by existing parties.” Perry v. Proposition 8 Off.
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`Proponents, 587 F.3d 947, 950 (9th Cir. 2009) (internal quotation marks and
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`citation omitted); see also Fed. R. Civ. P. 24(a)(2).
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`Alternatively, assuming threshold requirements are met,4 a court may grant
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`permissive intervention in its discretion, which may include consideration of “the
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`nature and extent of the intervenors’ interest.” Perry, 587 F.3d at 955; see also
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`Fed. R. Civ. P. 24(b). Under both mandatory and permissive intervention, a central
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`inquiry for the court is the applicant’s interest, if any, in the action, and whether
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`resolution of the action might impair it. See id.
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`4 The threshold requirements include the applicant (1) making a timely motion, (2)
`having independent grounds for jurisdiction, and (3) having claims or defenses
`with a question of law or fact in common with the action. Perry, 587 F.3d at 955.
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`A. The Court Should Postpone a Hearing on the Subrogation
`Plaintiffs’ Motion Until the Hawai‘i Supreme Court’s Decision on
`the Reserved Questions
`As Defendants explain more fully in their concurrently filed Motion to
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`Continue, the Subrogation Plaintiffs’ Motion is, at a minimum, premature.
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`The Motion, however misguided, rests on principles of Hawai‘i law that are
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`set to be addressed by the Hawai‘i Supreme Court in a matter of months. The
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`premise of the Subrogation Plaintiffs’ motion is that Hawai‘i law affords them an
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`independent right to pursue claims against the Defendants regarding the Maui
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`Fires, even if Defendants settle with their policyholders. Judge Cahill considered
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`and rejected this interpretation of Hawai‘i law, holding that under Yukumoto, the
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`Subrogation Plaintiffs are “barred from bringing or maintaining any independent
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`claims against settling third party tortfeasors,” if the Maui Fires settlement
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`agreement is finalized. H.R.S. § 663-10 Order, at 6. The Hawai‘i Supreme Court
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`is set to consider that exact issue on an expedited basis in the coming months.
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`The Motion also turns on the existence of a consummated global
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`settlement—a condition of which is that the Hawai‘i Supreme Court affirm Judge
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`Cahill’s order. The settlement, while advanced, is not yet final. There is no reason
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`the Subrogation Plaintiffs need to intervene now, before the Hawai‘i Supreme
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`Court’s decision, which may satisfy the condition under the Term Sheet.
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`This Court need not and should not wade into questions of Hawai‘i law
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`Case 1:24-cv-00259-JAO-WRP Document 46 Filed 10/10/24 Page 21 of 33 PageID.646
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`before the Hawai‘i Supreme Court rules, and should hold this Motion in abeyance.
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`B.
`In the Alternative, the Court Should Deny the Motion
`If the Court elects to rule on the merits of the Subrogation Plaintiffs’ Motion
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`now, it should deny the Motion for at least four independent reasons: (1) the
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`Subrogation Plaintiffs failed to meet and confer with Defendants, as required by
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`Local Rule 7.8, (2) this Court lacks subject-matter jurisdiction over the
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`Subrogation Plaintiffs’ claims, (3) the Subrogation Plaintiffs lack a significant
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`protectable interest in this li