UPDATE, MAY 28, 2024: Hawaii’s Board of Land and Natural Resources (BLNR) has denied a request from the owners of Nakoa for a contested case hearing. During a board meeting on May 24, five of six board members agreed that the owners didn’t follow proper procedural requirements. (The sixth member abstained from voting.) BLNR rules indicate that contested case requests must be presented in writing or orally before the adjournment of a meeting where the subject matter is being discussed. Additionally, a written request must come within 10 days of the end of that same board meeting.
Although the owners filed a written request within that 10-day window, they didn’t comply with the first requirement. The BLNR had a vote for the $1.8-million fine on the agenda for its April 26 meeting. Randall Schmitt, a lawyer representing the owners, was present at that meeting. Although he gave testimony about Nakoa and the grounding, he didn’t request a contested case hearing. During the May 24 board meeting, Schmitt stated that the meeting adjourned before he was able to present the petition. However, upon questioning by a board member, he agreed he could have mentioned it at the beginning of the meeting, once the board read aloud the rules as part of its regular practice. Schmitt added that it would have been “preemptory” to raise the request at that point.
Read on for our original article.
An initial six-figure fine against the owners and operator of the sunken yacht Nakoa in Hawaii has dramatically increased. The proposed penalty has now risen to $1.8 million to account for the emotional impact on the community.
Hawaii’s Board of Land and Natural Resources (BLNR) voted unanimously in late April to levy a stiffer penalty. The decision came after the original fine went unpaid, plus public testimony from three meetings. between July 2023 and January of this year.
The fine of $1,818,851.97 is far higher than the initial $117,471.97 fine levied in July 2023 for multiple reasons. Firstly, the initial fine was a conservative compensation estimate consistent with similar coral-related fines. The physical damage to the environment totaled 119 coral colonies (below) and 17,658 square feet (1,6450.5 square meters) of live rock. Additionally, the higher fine accounts for cultural damage. The 94-foot (28.65-meter) Nakoa grounded approximately 600 yards north of the Honolua-Mokuleia Bay Marine Life Conservation District. It’s a marine sanctuary, along the northwestern coast of Maui. Lastly, the BLNR took int account what it terms “emotional distress to the community,” plus loss of resource use.
Notably, the original fine was a recommendation from a Hawaiian government agency to which the BLNR belongs. It came from the Department of Land and Natural Resources (DLNR). The DLNR informed the BLNR that it lacked a way to determine the monetary impact of the public’s emotional distress and cultural damage. It therefore left the BLNR to determine whether more fines were appropriate.
Following the April board vote, John Carty, vice president of the Save Honolua Coalition, was pleased with the higher penalty. “A slap on the wrist in this situation would be a slap in the face of this community,” he says. Dawn Chang, chair of the BLNR, agreed and thanked community members for voicing their concerns, too. “I’m proud of the BLNR for sending a strong message,” she adds. “If you damage Hawaii’s precious resources and cause distress for people, the penalties can be significant.”
The sunken yacht Nakoa, a 2004 Sunseeker,belongs to Jim Jones, who was aboard with his family when the incident happened. Jones says he and his family had anchored for the weekend when a mooring buoy failed on February 20, 2023. (The mooring buoy only permitted two hours of anchoring, which Jones also admits knowing.) Nakoa ended up on the rocks and coral reef near the marine sanctuary, and within a day fuel began spilling. The DLNR and other officials coordinated containment and salvage operations with him. During the salvage attempt, though, the superyacht sank, within minutes of becoming free.
Jones had taken on investors in December 2022 to acquire Nakoa and charter her through his company, Noelani Yacht Charters. Those investors, Albert Revocable Trust and its trustees, Kevin and Kimberly Albert, agreed to the above-mentioned $117,471.97 settlement for the grounding. Meanwhile, the BLNR indicated it could still levy fines and penalties against Jones and his company. The BLNR claims it requested the Alberts pay the fine multiple times prior to its April meeting. Furthermore, the board says its April vote was its third time dealing with enforcement action against all parties.
A lawsuit by the Albert Revocable Trust against Jones, Noelani Yacht Charters, and Jones’ captain remains. The trust is suing for breach of contract. It claims Jones and his company used Nakoa “in a grossly negligent manner” during an unapproved personal voyage. It adds that the yacht’s purchase agreement held Jones responsible for loss or damage if he breached terms. The lawsuit seeks $1.45 million for the loss of Nakoa, which is the sum Jones was to pay them over 15 years. It also seeks $500,000 for salvage work and $500,000 for environmental damage.
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