Law & Justice

Judge Approves $47.75 Million Settlement in Hawaiian Electric Investor Lawsuit, Cuts Attorneys’ Fees by $4.78 Million

By TOI World Desk

A U.S. federal judge has approved a $47.75 million settlement in a securities lawsuit against Hawaiian Electric Industries, Inc. (HEI) and reduced the legal fees requested by the investors’ lawyers. The October 23 ruling by the U.S. District Court for the Northern District of California, reported by Bloomberg Law and Law360, brings the investor class action closer to resolution nearly three years after the devastating Maui wildfires.

In the case of Bhangal v. Hawaiian Electric Industries, Inc., Judge Jacqueline Scott Corley approved the settlement but awarded attorneys $9.55 million, far below the $14.325 million (30 % of the settlement) that the class counsel had sought. The judge found the requested amount exceeded the 25 % benchmark generally applied in the Ninth Circuit without sufficient justification. She also questioned the billing records, noting that the reported $4.6 million in legal fees, based on counsel’s recorded hours, likely overestimated the actual cost. The court estimated that reasonable, non‑duplicative work would support a figure of about $2.5 million.

The lawsuit alleged that HEI and senior company officials misled investors about the utility’s preparedness for wildfire risks. The complaint covered securities purchased or acquired between February 28 2019 and September 4 2023, the period leading up to the August 2023 wildfires that devastated Lahaina, Maui. HEI and other defendants denied wrongdoing, and the settlement does not constitute an admission of liability. A final ruling on the merits of the allegations had not been reached.

The court had previously dismissed the complaint while allowing the plaintiff to amend it. The parties settled while a second motion to dismiss was pending, avoiding further litigation uncertainty, expense, and potential delays.

Judge Corley also addressed other fee matters. She declined to grant the lead plaintiff’s request for an additional $10,000 award, finding the application inadequately supported. The court allowed $133,938.30 in litigation expenses for lead counsel Pomerantz LLP but rejected $43,297.37 in costs claimed by Levi & Korsinsky. Settlement administration expenses were capped at $500,000, despite the administrator reporting higher costs.

The settlement administrator, Verita, received 67,472 claims after sending 160,167 notices to potential class members. Of those, 24,306 were accepted and 43,166 rejected. The high rejection rate was explained by the administrator: many submissions failed to demonstrate an eligible loss, included securities or trading dates outside the class period, or lacked the documentation needed to verify eligibility. The court accepted this explanation and noted that none of the rejected claimants challenged the denials within the available process.

The approved claims represent approximately 60 million shares, about 75 % of the damaged shares estimated by the plaintiff’s expert. Twenty investors opted out of the settlement, one objection was filed and subsequently overruled.

The $47.75 million settlement will be distributed among eligible claimants after deductions for attorneys’ fees, litigation expenses, administration costs and applicable taxes. Payments will be calculated proportionally according to each claimant’s recognized loss under the settlement’s allocation plan, rather than divided equally. The court directed the parties to submit a proposed judgment by November 6 2026. As of October 24, no payment date had been announced. The deadline to submit claims was June 25 2026, meaning investors cannot file new claims under this settlement. If funds remain after the initial distribution, the administrator will attempt a second distribution.

The securities lawsuit is separate from litigation seeking compensation for people who suffered personal injury or property losses in the Maui wildfires. The approved agreement addresses investor claims arising from alleged misrepresentations about wildfire risks, not the full range of losses caused by the disaster.