A US federal judge has approved a $47.75 million settlement in a securities lawsuit against Hawaiian Electric Industries, while significantly reducing the legal fees requested by the investors’ lawyers. The October 23 ruling by the US 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. According to the court’s order in Bhangal v. Hawaiian Electric Industries, Inc., Judge Jacqueline Scott Corley approved the settlement but awarded attorneys $9.55 million, substantially below the amount sought. The decision follows scrutiny of the legal teams’ billing records and the hours claimed for their work on the case.
Why investors sued Hawaiian Electric
The lawsuit centred on allegations that Hawaiian Electric Industries and senior company officials misled investors about the utility’s preparedness for wildfire risks. The claims concerned securities purchased or acquired between February 28, 2019, and September 4, 2023, covering the period leading up to the August 2023 wildfires that devastated Lahaina, Maui.The complaint alleged that investors were given an inaccurate impression of the company’s efforts to address wildfire threats. Hawaiian Electric and the other defendants denied wrongdoing, and the settlement does not constitute an admission of liability. The case had not reached a final ruling on the merits of the allegations. The court had previously dismissed the complaint while allowing the plaintiff to amend it. The parties agreed to settle while a second motion to dismiss was pending, avoiding the uncertainty, expense and potential delays of further litigation.
Judge reduces attorneys’ fees by nearly $4.8 million
The most significant development in the ruling was the reduction in attorneys’ fees. Class counsel requested 30% of the settlement fund, amounting to $14.325 million. Judge Corley instead awarded 20%, or $9.55 million, reducing the requested fees by $4.775 million.The judge found that the request exceeded the 25% benchmark generally applied in the Ninth Circuit without sufficient justification. The order also raised concerns about the way legal work had been recorded and the extent of potentially duplicated work between law firms.The court questioned the reported $4.6 million in legal fees calculated using counsel’s recorded hours. It estimated that reasonable, non-duplicative work would more likely support a figure of approximately $2.5 million. The judge also declined to grant the lead plaintiff’s request for an additional $10,000 award, finding that the application was not adequately supported. Separately, 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.
More than 24,000 claims accepted
The settlement administrator, Verita, received 67,472 claims after sending 160,167 notices to potential class members. Of those claims, 24,306 were accepted, while 43,166 were rejected. The high rejection rate initially prompted questions from the court. However, the administrator explained that 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 that explanation, noting that none of the rejected claimants had challenged the denials within the available process. The approved claims represent approximately 60 million shares, equivalent to 75% of the damaged shares estimated by the plaintiff’s expert. Twenty investors opted out of the settlement, while one objection was filed and subsequently overruled.
When will investors receive payments?
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 recognised 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.