BY JIM DOOLEY – Kamehameha Schools is on the verge of settling its lawsuit against a mother and child who received $7 million from the Schools after challenging the institution’s admissions policy that favors students of Hawaiian ancestry.

The Schools paid the pair — identified only as Jane and John Doe — $7 million in 2007 in return for their agreement to drop a federal court lawsuit that claimed the admissions policy violated civil rights laws. The 2007 settlement agreement contained a $2 million penalty clause if either side disclosed terms of the deal.

Another attorney who had represented the pair, John Goemans, revealed the $7 million figure to the Honolulu Advertiser newspaper in 2008. The Schools sued the Does and their attorney Eric Grant for $2 million.

The Does claimed they were not responsible for the breach of confidentiality by Goemans, who died in 2009.

Trial in the case was scheduled to begin this month on the Big Island, where the Does live, but jury selection was delayed as the two sides discussed settlement, according to minutes of recent hearings held before Circuit Judge Greg Nakamura.

“Nothing has been finalized,” Elizabeth Ahana, Integrated Strategies Manager for Kamehameha Schools, said today.

“The court has put off the trial pending the outcome of these discussions,” she said.

Attorneys for the Does and Kamehameha Schools did not respond to requests for comment today.

Grant declined comment.

Minutes of hearings before Nakamura indicate the two sides are very close to agreement.

In an October 6 session, Micah Kane, vice chairman of the Kamehameha Schools board of trustees, was present.

“Confidential settlement placed on the record,” the minutes of the session said.

Kamehameha Schools is one of the largest non-profit institutions in the country, with assets estimated at $7 billion to $8 billion.

It was created under the 1883 will of  Princess Bernice Pauahi Bishop, who endowed the institution with large tracts of land throughout the state. Some of that land, including sections of oceanside property in Waikiki, is now among the most valuable real estate on the planet.

The Schools’ admissions policy gives preference to children of Hawaiian ancestry and the Does claimed in a 2003 federal lawsuit that the policy violated federal civil rights laws.

When Goemans revealed the $7 million settlement figure, he argued that it should have been disclosed by the Schools in their annual tax returns and in detailed financial statements the institution must file yearly with state Probate Court.

The payment was apparently consolidated in larger line item entries on the IRS return and broken up into smaller segments on the Probate Court report.

The Does attempted to use Goemans’ argument about public disclosure in the Big Isle case. But Nakamura ruled that how the institution prepared its tax returns and financial statements had no bearing on whether the defendants breached the terms of the confidentiality agreement.

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Jim Dooley joined the Hawaii Reporter staff as an investigative reporter in October 2010. Before that, he has worked as a print and television reporter in Hawaii since 1973, beginning as a wire service reporter with United Press International. He joined Honolulu Advertiser in 1974, working as general assignment and City Hall reporter until 1978. In 1978, he moved to full-time investigative reporting in for The Advertiser; he joined KITV news in 1996 as investigative reporter. Jim returned to Advertiser 2001, working as investigative reporter and court reporter until 2010. Reach him at Jim@hawaiireporter.com