David C. Farmer, Successor-Trustee vs. Harmon
(Formerly Woo vs. Harmon & Nicholson vs. Harmon)
CV05-00030 DAE KSC
U.S. District Court For the District of Hawaii
Judges: David A. Ezra; Kevin S. Chang
ROBERT F. MILLER
Attorney who served as special assistant to Governor John A. Burns from 1971-1974; Deputy Attorney General, 1977-1981, and Chief Antitrust Division from 1979 to 1981 - a period during which Tesoro Hawaii, Shell Oil, Texaco, Chevron and other oil companies were under investigation for price-fixing, etc; attorney who represented the UPW in the Gary Rodrigues case, and attorney for Marsh & McLennan in Defendant’s RICO lawsuit.
Robert F. Miller, Attorney at Law
735 Bishop St., Suite 500
Honolulu, HI 96813
Fax: (808) 521-3359
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NEW DISCOVERY (02-09-08): Kamehameha Schools made a “confidential” settlement agreement with the plaintiff in the John Doe vs. Kamehameha Schools case, which my former attorney, John Goemans, Esq., says, according to what he has learned from the IRS, violates the rules for a non-profit charitable trust:
February 9, 2008
An attorney involved in a challenge to Kamehameha Schools' Hawaiians-only policy reveals the amount of a settlement
By Ken Kobayashi, Honolulu Star-Bulletin
Kamehameha Schools made the first move to settle a legal challenge to their admissions policy giving preference to native Hawaiians and later agreed to pay $7 million, a lawyer involved in the case said yesterday.
John Goemans, an attorney for an unnamed non-native Hawaiian student who filed a lawsuit contesting the policy, said the charitable trust offered for the first time to talk about an out-of-court settlement last May, just days before the U.S. Supreme Court was to decide whether to hear the case.
Goemans, a former Big Island attorney recuperating in Florida from heart surgery, and Sacramento, Calif., lawyer Eric Grant, the lead attorney, represented the unnamed student and his mother.
"They (the schools) approached Eric and said we wanted to settle and we have to settle by Friday morning," when it was believed the high court was to make a decision about accepting the case, Goemans said.
He said it appeared the high court would accept their appeal of an 8-7 decision by the 9th U.S. Circuit Court of Appeals that upheld the policy.
"They (the schools) were worried about losing in the Supreme Court," Goemans said.
Goemans said he did not know how Grant and the Kamehameha Schools arrived at the $7 million figure.
The hotly disputed federal civil rights lawsuit caused a firestorm of controversy among Kamehameha Schools supporters who believed the challenge struck at the more than century-old admissions policy and the heart of the charitable trust's mission to educate children of Hawaiian ancestry.
The confidential settlement was announced on May 14. Those connected with the case repeatedly refused to disclose the terms.
Goemans said he was disclosing the amount because he said he recently learned from Internal Revenue Service officials that Kamehameha Schools, a tax-exempt charitable trust, cannot keep the figure confidential.
"Because exempt organizations operate in the public good, you got to report all your expenses with particularity, and you cannot keep information relative to those expenses confidential," he said. "It's in the public interest to have full disclosure."
Ann Botticelli, Kamehameha Schools spokeswoman, said yesterday the settlement contained a confidentiality clause.
"We intend to honor the terms, and we will not be discussing the settlement or John Goemans' assertions," she said.
Grant said yesterday he had no comment.
Kamehameha Schools, a multibillion-dollar charitable trust and the state's largest private landowner, was established under the 1883 will of Princess Bernice Pauahi Bishop. It educates more than 6,700 students at its flagship campus at Kapalama Heights, two other campuses on Maui and the Big Island, and 31 preschools throughout the state.
Senior U.S. District Judge Alan Kay upheld the school's Hawaiians-first policy, but a panel of the appeals court in San Francisco ruled 2-1 that the practice violated federal civil rights laws. That decision triggered statewide protests and marches by school supporters.
Later, a larger appeals court panel voted 8-7 to uphold the policy.
It was an appeal by Grant of that 8-7 ruling that was on the doorsteps of the U.S. Supreme Court when the settlement was announced.
At the time, school officials indicated that the settlement calling for the dismissal of the lawsuit leaves intact the appeals court's 8-7 decision upholding the admissions policy.
But the dismissal does not guarantee that another lawsuit might surface and make its way to the high court, although it would first have to go through the federal trial and appeals courts, where the 8-7 ruling would be considered to be binding on the issue. But even if those who file the new lawsuit lose on those two levels, they could still ask the high court to review the case.
Honolulu attorney David Rosen said he has plaintiffs for a lawsuit to challenge the admissions policy. He said the settlement does not affect his case. Rosen said he expects the suit will be filed this year.
Goemans said Grant received 40 percent, or $2.8 million of the $7 million. Goemans said he is preparing to file his own lawsuit seeking to recover a "reasonable percentage" of the $7 million for his work in the case.
Goemans said he found the unnamed student and arranged for Grant to be the attorney for the student and his mother.
"I put the whole thing together," Goemans said. "But for me there would not have been a $7 million payment."
The student never was admitted to Kamehameha Schools because his case was pending. He has since graduated from high school and had been attending college, Grant said last year.
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February 9, 2008
Amount of settlement
raises critical concern
By Robert Shikina, firstname.lastname@example.org
Supporters and critics expressed surprise yesterday at the $7 million Kamehameha Schools paid a student to settle a lawsuit disputing its Hawaiians-first admission policy.
One Kamehameha Schools alumnus says disclosure of the settlement with the anonymous, non-Hawaiian student will prompt questions among Hawaiians.
"I'm not happy with $7 million," said Kamehameha Schools alumnus Jan E. Hanohano Dill. "Unfortunately, that's a lot of money, and it's going to create a lot of questions in the Hawaiian community whether it was right or wrong and to continue."
Dill, also a board member of Na Pua a Ke Ali'i Pauahi, a nonprofit group whose members include students, parents, and alumni of Kamehameha Schools, said he continues to support the school's decision.
"I don't know the details, and I think that's something that has to be cleared," he said. "You settle because you want to avoid costs that would be incurred as you go forward."
He added, "I have to believe that they understood that this was something good for the Hawaiian people. ... It will be clear as things unfold whether that was true."
Dill, who is also president of the nonprofit Partners in Development Foundation, said the admissions policy must eventually be addressed and that the settlement avoids this case but does not stop other cases.
Marion Joy, former vice president of Na Pua, called the settlement a "misuse of trust funds."
"The trust is continually going to be challenged," she said. "This is not going to be the last. ... As far as settling for the particular lawsuit, it's not in the best interests of the beneficiaries (of the 1883 will of Princess Bernice Pauahi Bishop)."
Kamehameha Schools declined comment.
Honolulu attorney David Rosen, who has sought potential clients to sue Kamehameha over its admissions policy after the settlement, sent out a statement yesterday that said the $7 million settlement was used to "buy off this case."
He added that the trustees should open a campus on the Leeward Coast of Oahu and possibly Molokai where increased educational opportunities are needed.
H. William Burgess, a retired attorney and founder of Aloha for All, a group opposed to Hawaiian sovereignty, said the settlement raises questions about the proper use of the trust funds.
"Normally, trustees, if they're doubtful about doing something, they ask the court to give them instructions," he said. "Yet in this case, the biggest charitable trust, probably in the nation, instead of welcoming the opportunity to get the highest court in the land to settle it, they pay $7 million to leave it open. And it is very much open."
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From The Catbird Seat website:
The Wise Old Owl asks: How much of the settlement amount came from Kamehameha’s insurance companies, and how much came from the trust funds? How much did Kamehameha Schools (and/or their insurance company) spend for defense costs in this case before they decided to settle? Who is their insurance company? Their insurance broker? Who actually signed the Settlement Agreement?
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November 23, 1999
BHP, Tesoro settle; companies to
help state gather evidence
The settlement beefs up the state's
$2 billion suit, experts say
By Rob Perez, Star-Bulletin
The state has substantially bolstered its $2 billion antitrust lawsuit against Hawaii oil companies by striking a proposed settlement with two defendants who have agreed to assist in the evidence-gathering process, antitrust and industry experts say.
In a surprising development late yesterday afternoon, the state, BHP Hawaii Inc. and Tesoro Petroleum Corp. announced a tentative settlement that dismisses the two companies and Tesoro's Hawaii subsidiary from the lawsuit in exchange for $15 million and a pledge of continued cooperation in the case.
The agreement, under which BHP and Tesoro deny wrongdoing or liability, still must be approved by a federal judge.
'This creates massive problems for the rest of the (defendants).'
Experts say getting the cooperation of two key industry players -- a past and current owner of one of only two Hawaii refineries -- will be instrumental as the price-fixing case moves toward trial in February 2001.
"This is very significant," said Robert F. Miller, who headed the state's antitrust division in the Attorney General's office from 1979 to 1981 and now is in private practice. He has characterized the state's case in the past as very weak.
Tim Hamilton, a mainland petroleum analyst who accused oil companies of gouging Hawaii consumers even before the state filed the lawsuit, said the proposed settlement is a major plus for the state.
"This creates massive problems for the rest of the (defendants)," Hamilton said. "They are in big trouble."
Suit accused 7 companies
Following a series of Star-Bulletin articles in 1998 on Hawaii's high gas prices, the state in October of that year filed a federal lawsuit accusing seven oil companies and several related subsidiaries of conspiring to fix Hawaii's wholesale gas prices.
The conspiracy, the state alleged, resulted in hundreds of millions of dollars in excess profits for the companies throughout the 1990s. The government also alleged the defendants concealed the conspiracy for years.
The companies have steadfastly denied the allegations.
Chevron Corp., the state's market leader and one of the remaining defendants, yesterday said it will continue fighting the charges....
In the retail market, BHP -- and subsequently Tesoro, which acquired BHP Hawaii in May 1998 --had only an 11.9 percent share, according to the state. Chevron has the largest chunk at roughly 30 percent and owns Hawaii's other, larger refinery.
"We can focus on the larger players now, and that's what we're going to do," said Spencer Hosie, the San Francisco attorney whose law firm is handling the antitrust case on behalf of the state....
Faye Kurren, president of Tesoro Hawaii Corp., had a more benign take on yesterday's announcement.
The agreement simply means Tesoro and BHP will continue cooperating with the state -- providing information and documents -- just as the companies have in years past when the attorney general's office investigated the local industry, Kurren said.
"It's not anything that's extraordinary by any means," Kurren said.
Some industry watchers were skeptical, however, saying such a reaction would be expected because Tesoro and BHP's parent still are part of the industry and want to downplay whatever help they may provide that could be used against the other defendants.
First settlers get discount
Under the proposed settlement, BHP has agreed to pay $12 million and Tesoro $3 million, reflecting the fact that Tesoro entered the Hawaii market via the BHP acquisition only months before the lawsuit was filed.
The state said the settlement reflects a discount that was offered to the two companies because they were the first to settle. Presumably, any other settlements would come at a steeper price.
Kurren said the agreement does not require Tesoro to change any of its business practices. The two companies made a purely business decision to settle even though the state's allegations were untrue, she said.
Over the past year, Tesoro alone spent well over $1 million in outside legal fees and costs, plus substantial staff time has been devoted to the case, Kurren said.
Faced with the prospect that the lawsuit could drag on for several more years, the companies -- at the state's initiative -- began settlement negotiations, she said. The negotiations took about one month to complete.
"It's just a sound business decision." Kurren said. "We settled basically for what amounts to less than three years of legal fees."
Miller, the antitrust lawyer, and some industry analysts scoffed at such reasoning, noting that one of the industry's defenses has been that the lawsuit lacked merit and was politically motivated, allegedly designed to help in Gov. Ben Cayetano's 1998 re-election bid. The complaint was filed a month before Cayetano won re-election.
If the lawsuit was just political posturing, companies wouldn't consider settling, they said.
"Somebody doesn't give you $15 million ... to settle a political shibai case," said Miller, who last year represented Texaco dealers in an unrelated lawsuit against Texaco Inc., one of the remaining defendants in the state case.
The other main defendants include Shell Oil Co., Tosco Corp. and Unocal Corp.
Timing called a surprise
Another antitrust lawyer who asked not to be named said the amount of the proposed payment suggests that the case has enough merit to prompt the two companies to avoid potentially greater liability down the road.
The settlement would free the two companies from any claims stemming from the state's lawsuit.
Several experts said they were surprised a settlement came so early in the process. The trial isn't scheduled to begin until February 2001, and discovery -- the evidence-gathering process -- is nowhere near finished.
Among those still to be questioned is Cayetano. He is expected to answer in writing more than 200 questions from Chevron, including what role the Star-Bulletin's coverage played in a decision to file the lawsuit. Lawyers for the state previously have said that coverage was a key factor....
Chevron spokesman Albert Chee Jr. declined to comment on the two defendants' decisions to settle and assist in the state's discovery. Chee said Chevron's intent remains unchanged. "Simply put, we plan to prove the state's charges of price-fixing are absolutely unfounded."...
The state yesterday filed a motion asking the court to approve the proposed settlement agreement. A hearing is expected to be held early next year.
~ ~ ~Robert Miller is expected to testify regarding the facts and circumstances regarding the Settlement Agreement at issue in this case, and is expected to produce a copy of his Attorney of Record letter from Marsh & McLennan, Inc. evidencing the fact that he was legally appointed to represent them in Defendant’s underlying RICO lawsuit. Robert Miller is also expected to testify regarding his personal, professional, financial and social relationships with Rocco Sansone (Marsh & McLennan), Peter Lowe, Christine Lee, Rodney Park, William S. Richardson, Nathan Aipa, Colleen Wong, Louanne Kam, Gilbert Tam, Lyn Anzai, Earl Anzai, Mark McConaghy (PricewaterhouseCoopers), Colbert Matsumoto, Lionel Tokioka, Robert F. Clarke (Hawaiian Electric Industries), Edwina Clarke (Kamehameha Schools and P&C Insurance Co.), Peter Lewis (Hawaiian Electric Industries), James A. Baker; Judge Rey Graulty; Judge Barry Kurren, Faye Kurren, Hawaii Dental Services (HDS), Gary Rodrigues, Robin Haunani Rodrigues Sabatini, William S. Richardson, First Hawaiian Bank, Walter A. Dods, Hamilton McCubbin; Dee Jay Mailer, Judge Kevin Chang, Judge David Ezra, Judge Lloyd King, Judge Robert Faris, Matsuo Takabuki, Susan Tius, Guido Giacometti, Sukamto Sia, Henry Peters, Richard Wong, Constance Lau (American Savings Bank and Kamehameha Schools), BHP Hawaii, Tesoro Hawaii, Aloha Petroleum, Harken Energy, Alii Petroleum, Paradise Petroleum, James Ahloy, Chevron-Texaco; Shell Oil Co.; The Nature Conservancy, Francis Ahloy Keala, Larry Mehau, J.W.A. “Doc” Buyers, Bert Kobayashi, Art Woolaway, Patty Woolaway, Evan Dobelle, The University of Hawaii Foundation, Perry Confalone (Torkildson Katz Fonseca), Wayne Metcalf, Linda Chu Takayama, Warren Price, Margery Bronster, Mark Bennett, Lawrence Goya, Hugh Jones, Dorothy Sellers, Robin Campaniano (AIG), Paul Casey (Hawaiian Airlines), Allen Doane (Alexander & Baldwin, Schidler Group), Gary North, Matson Navigation Company (A&B), Jeffrey Stone (Ko Olina Partners), Waikiki Aquarium, Larry Johnson (Bank of Hawaii and Summit Communications), Ronald Rewald, Mary Lou Woo, Steven Guttman, Alan J. Ma, Robert K.U. Kihune, Benjamin Matsubara, Robert Katz, Matt Tsukazaki, Jeffrey Harris, Esq., Peter Carlisle, Charles Marsland, James B. Nicholson, David Farmer, Peter Murnane, Mesa Airlines, Brook Hart, Joshua Gotbaum, Aloha Airlines, David Banmiller, and others yet to be named upon discovery.
Last Update: March 28, 2008