A significant legal challenge has been halted as a judge dismissed a $324.1 million lawsuit filed by Hitachi Rail Honolulu JV against the Honolulu Authority for Rapid Transportation (HART) and the City and County of Honolulu. The lawsuit, which alleged “breach of contract and unjust enrichment,” was dismissed by 1st Circuit Court Judge Shirley Kawamura on August 14, 2023, stemming from claims related to construction delays in the city’s extensive rail system project, valued at over $10 billion.
The dismissal followed motions filed by the city in January, which sought to have the case thrown out. Judge Kawamura’s ruling dismissed Hitachi’s claims on three counts, with two of those dismissals occurring “without prejudice.” This indicates that while the current case has been closed, the door remains open for Hitachi to refile similar claims in the future.
Attorneys representing Hitachi did not provide immediate comments regarding the ruling or the potential for a new lawsuit. HART officials, including Deputy Corporation Counsel Lisa Hirahara, announced the ruling during a board meeting, which was subsequently followed by a closed-door session to discuss the implications of the dismissal.
Commenting on the court’s decision, Ian Scheuring, deputy communications director for the Mayor’s Office, explained that the dismissal was due to Hitachi’s failure to adhere to the prescribed dispute resolution process outlined in their contract. “The court ruled from the bench and did not issue a written decision,” Scheuring noted. He further clarified that no settlement agreement was in place at the time of dismissal and highlighted that Hitachi unilaterally notified the court of its intention to continue litigation.
The lawsuit accused HART of mismanagement, claiming that delays in setting schedules had led to cost overruns of tens of millions of dollars, which Hitachi alleged it had to absorb entirely. Specific allegations included an instance where HART permitted incompatible track installations by another contractor, which resulted in substantial additional costs for Hitachi.
Hitachi was contracted by HART in 2011 under a $1.4 billion agreement to design, build, operate, and maintain the city’s fleet of automated, driverless electric trains. These trains are intended to service an 18.75-mile elevated rail system with 19 stations from East Kapolei to Kakaako.
Earlier this summer, HART officials acknowledged the potential legal costs associated with the Hitachi lawsuit, estimating claims exceeding $120 million. Reports indicated that HART had reached a preliminary agreement with Hitachi, allowing the company a chance to justify additional costs that could inflate the settlement by up to $30 million. However, following the dismissal, Scheuring stated that the extent of any legal cost savings remains unclear.
In related developments, HART Executive Director and CEO Lori Kahikina announced that Segment 2 of the rail line, which extends from the old Aloha Stadium to Middle Street in Kalihi, is set to open for public revenue service on October 16, 2023. An official opening ceremony is planned for the day prior, October 15, organized by the city’s Department of Transportation Services.
Unlike the previous opening ceremony for Segment 1 on June 30, 2023, which attracted crowds eager to ride the train, this segment will not allow public access until the official opening date. Following the launch, free rides will be available across the Skyline, TheBus, and TheHandi-Van systems on October 17 and 18, as recently approved by the City Council.
