Appeals Court Upholds State's $4 Million Fine Against Kauai Landowner James Pflueger
BY MALIA ZIMMERMAN - A Kauai landowner who caused a catastrophic mudslide on November 26, 2001, which destroyed a rare coral reef and polluted a pristine bay at Pilaa, Kauai, must pay a $4 million fine to the state, according to the Hawaii Intermediate Court of Appeals.
James Pflueger pled guilty in 2006 to criminal charges of illegally grading and grubbing his 387-acre property at Pilaa in 2001, which left 100 acres of red dirt exposed.
A heavy rainstorm that night in November 2001 pushed 1,000 tons of mud and debris into the once sparkling ocean, causing more than $100 million damage to the 20-acres of the reef that was awaiting the same federal protection that Oahu’s Hanauma Bay enjoys.
After a joint investigation by the Kauai County, state Department of Health and the U.S. Environmental Protection Agency, Pflueger was charged with 13 felony counts and pled guilty to 10 counts in 2006. He was fined $12 million in restitution and fees. The EPA portion of the fine - $7.5 million - was the largest penalty against an individual polluter in U.S. history.
The state Board of Land and Natural Resources also fined Pflueger’s company Pilaa 400 LLC, the listed property owner, $4 million for the impact Pflueger’s illegal grading had on conservation land.
Pflueger appealed the ruling to the Fifth Circuit Court on Kauai, and when he lost that case, appealed again to the Intermediate Court of Appeals. A panel of three judges recently affirmed the lower court ruling in the state's favor.
Pflueger’s attorney argued the federal consent decree wiped out the state's administrative case against him, but the Intermediate Court of Appeals dismissed those claims, noting two state departments – the state health department and the state Board of Land and Natural Resources – made distinctly different allegations.
Pflueger may file an appeal with the Hawaii Supreme Court, and the justices could either accept the case, or let the lower ruling stand.
Pflueger has not had much luck with the Hawaii Supreme Court in recent years.
Before the mud reached the ocean on that fateful day in 2001, homes and property owned by the Marvin family were also covered with mud and debris. Kauai attorney Teresa Tico represented the Marvins in a civil suit against Pflueger, which was filed in 2002 and settled for an undisclosed amount nearly 6 years later. Pflueger at first refused to turn over his financials to Tico, appealing the court order to the Hawaii Supreme Court, but after losing that appeal, Pflueger was forced to send information.
Pflueger filed another appeal in the Marvin v. Pflueger civil case after Fifth Circuit Court Judge Kathleen Watanabe issued a 44-page precedent-setting decision, in which she upheld the Marvins’ land and water access for their kuleana property. She said Pflueger must provide the Marvins access via his land to the public roadway and to a water-well because his property encases theirs. Pflueger appealed the case to the Intermediate Court of Appeals and the Hawaii Supreme Court and lost in the Hawaii Supreme Court. He was ordered to sign a recorded easement over to the Marvins but so far has refused to sign the paperwork presented by Tico.
Marvin and Tico were responsible for initiating the local and federal investigation into the mudslide at Pilaa. Tico took underwater video that documented the catastrophic damage to the colorful coral reef and vibrant bay. Life in the bay either fled or died under suffocating brown slime. Left behind there was an eerie underwater ghost town. While some believed the reef would recover, Marvin said the muddy banks on the beach fronting her home are still exposed. And Tico, who annually videos the condition of they bay, says that all these years later, the bay has deteriorated considerably.
Ironically, the EPA announced the plea agreement with Pflueger on March 9, 2006, just 5 days before his dam at Ka Loko breached, allegedly because of illegal grading and grubbing violations he committed in 1998.
The dam, which reportedly overtopped after more than 40 days of rain, unleashed an estimated 400 million gallons of water on the community below. Seven people were killed including an expectant mother. The waves, which reached as high as 40 feet, also caused millions of dollars in property damage.
Pflueger settled the civil suits filed against him by those who lost loved ones, and property, in the breach. But he is months overdue on pay his portion of the damages, with the exception of interest on the settlement.
Pflueger was also charged criminally in November 2008 with 7 counts of manslaughter and one count of reckless endangerment for causing the deaths of 7 people. He is still fighting those charges. He has made multiple appeals to Hawaii’s higher courts to delay the criminal case, and he lost all of those appeals in both the and Intermediate Court of Appeals and Hawaii Supreme Court.
In an exclusive interview after the dam breach, Pflueger denied that he either covered the dam’s main safety feature, its spillway, before it breached, or ever saw a spillway. He blames the breach on the state for its lack of dam inspections and his reservoir manager for poor maintenance of the dam.
This conflicts with testimony by Kauai realtor Mike Dyer, who told Hawaii Reporter that when he saw illegal grading at the dam and reservoir in the late 1990s, he warned Pflueger that covering the spillway was dangerous. Dyer also took photos and sent a letter to the Department of Land and Natural Resources to document his concerns. No action by either Pflueger or the state was taken.
In addition to fighting the state administrative fine for Pilaa as well as the criminal charges against him for the deaths caused by the dam breach, Pflueger faces federal tax evasion charges.
His son, accountant and staff from his Pflueger auto dealership have already pled guilty to related charges, but Pflueger continues to deny wrongdoing. He is set to go to trial in 2013 on both state manslaughter charges and the federal tax evasion charges.
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