Pflueger to pay $7.5 million

The Garden Island’s top Kaua’i story of 2005 made its pitch to be the top story of 2006, as retired Honolulu car dealer James Pflueger has agreed to pay a record $7.5 million for damaging Pila’a Bay and reef.

Details of the federal Clean Water Act lawsuit settlement were announced yesterday in Honolulu.

Of the $7.5 million, some $5.3 million will be used to continue reef and stream cleanup efforts on and around Pflueger’s property, and to prevent further erosion.

After the allegations of reef, land, private property and stream damage surfaced after torrential rains caused flooding all the way to the ocean in 2001, Pflueger has been conducting erosion-control and other mitigation work on his property.

The settlement announced yesterday is the largest of its kind ever, federal and state officials said Thursday.

The agreement brings total government penalties and required payments to $12 million for a massive, November 2001 mudslide caused when Pflueger was building an unpermitted road on his property. Mud and debris washed across neighboring property, and into the ocean near Pila’a.

Under the latest settlement, Pflueger, who owns auto dealerships on O’ahu, will pay $2 million in state and federal penalties and $5.3 million to prevent further erosion, and to clean up the reef and three streams. He will also be required to fund a $200,000 environmental project.

The settlement comes eight months after members of the state Board of Land and Natural Resources fined Pflueger $4 million in the same case, again one of the largest state fines ever levied.

In May 2005, Pflueger pleaded guilty to 10 felony counts in state court, and was ordered to pay a $500,000 penalty for the road work, which he was doing without permits.

The landmark case is the first involving the violation of the Clean Water Act by a single person at just one site to have reached the federal level. The previous highest fine ever for a similar infraction had been $125,000, but it was imposed at the local level.

Linda Pasadava of Kilauea, who lives two miles from Pflueger’s property, said the well-known auto dealer had built a garden to hide the illegal construction at his beach-side home.

“When that mud came rushing down, it wasn’t a secret anymore,” she said. “And that’s when we got active and we got busy.”

Pflueger’s attorney, Wesley Ching, did not immediately return calls seeking comment. In court proceedings, Pflueger’s defense team has argued that the big fines were an attempt to scam him for his money.

But David Henkin, an attorney for Earth Justice who represented members of two Kaua’i community groups in the suit, the Kilauea Neighborhood Association and Limu Coalition, said the fines were appropriate for the amount of damage from the construction site on 378 acres of property.

Following the runoff, a team of scientists concluded the entire ecosystem, not just the coral, was damaged, with a reduction in biological diversity, fewer fish, and a drop in algae species.

Henkin said it will take hundreds of years to restore the area.

“It is a very robust program for environmental restoration,” he said.

The clock is ticking on a 30-day period for public comment on the settlement before it can be brought before the court for final approval. The whole process is expected to take two months, Henkin said.

About 30 percent of all construction of five acres or more in the United States lack needed permits, according to officials with the Environmental Protection Agency. For Pflueger’s road project, state officials say permits would have cost about $6,000.

Representatives of the U.S. Department of Justice, U.S. Environmental Protection Agency, state Department of Health, County of Kaua’i, Earthjustice, Limu Coalition and Kilauea Neighborhood Association are all part of the largest storm water settlement for violations at a single site, by a single landowner, in the United States, according to an EPA press release.

“The unauthorized construction work at Pila’a did not incorporate stormwater-erosion-control measures required by permits issued under the Clean Water Act. These measures would have prevented the extensive damage caused by Pflueger’s construction,” said Wayne Nastri, the EPA’s administrator for the Pacific Southwest.

“This settlement will reduce erosion, restore stream systems and native plant habitats, resulting in healthier stream, ocean and reef ecosystems.”

“We are pleased to finally reach an agreement on major remedies to deal with major water-pollution problems,” said Laurence Lau, deputy director for environmental health, state Department of Health.

The construction site at Pila’a encompasses approximately 378 acres of coastal property. Pflueger conducted grading and other land-disturbing construction at the site beginning in 1997 without obtaining permits.

The activities included cutting away a hillside to create a 40-foot vertical road cut, grading a coastal plateau, creating new access roads to the coast, and placing dirt and rock fill into three perennial streams.

“Storm water requirements have been in place for a long time. Developers must be responsible for their actions to ensure compliance with the law,” said Granta Y. Nakamaya, EPA assistant administrator for the Office of Enforcement and Compliance Assurance.

“Runoff from construction sites is a primary contributor to the impairment of water quality and EPA is vigorously enforcing federal regulations to help reduce this problem,” said Nakayama.

“This settlement is a strong signal of this administration’s commitment to increased enforcement of our nation’s environmental laws and regulations.”

“Protecting the environment has been a top priority of the Department of the Attorney General. Those who violate our environmental laws must know that when they are caught, they will pay a very heavy price,” said Mark Bennett, state Attorney General.

“That is the only way to deter the type of conduct that took place here. This case is an example of the exceptional cooperation between the state of Hawai’i and the EPA, which continues,” said Bennett.

As a result of this unpermitted construction activity, discharges of sediment-laden stormwater have flowed to the Pacific Ocean at Pila’a Bay, damaging a beach-front home, the beach and coral reefs.

“Today’s joint settlement represents one of the largest-ever civil penalties for storm water violations,” said Sue Ellen Wooldridge, assistant attorney general of the U.S. Justice Department’s Environment and Natural Resources Division.

“The defendant’s violations were serious, and this settlement will ensure that the necessary storm water run-off controls will be installed, strengthening compliance with environmental laws, and ensuring that valuable natural resources will be protected in the future.”

Based on plans approved by EPA officials and other parties to this settlement, Pflueger began corrective work in September 2004, and continues to stabilize vulnerable areas of the Pila’a property and nearby Kaloko.

This work includes completion of a wall to stabilize the 40-foot vertical road cut adjacent to the Pila’a Bay shoreline. Pflueger will maintain erosion controls on roadways and trails that are used on the property.

The plan calls for terracing of slopes, using native plants to control erosion at vulnerable sites, and control of invasive plant species for all vegetation work.

Soil and rock used to fill portions of the streams to build a road and several dams will be removed. The remaining dams will be lowered and stabilized.

Workers will reconstruct streambeds to a more natural state by growing native plants along the banks.

The EPA and state Department of Health officials issued parallel enforcement orders in June 2002 to Pflueger for stormwater violations associated with construction activities at his Pila’a property.

Also in 2002, attorneys for Earthjustice, a national, non-profit, public-interest law firm, filed a lawsuit against Pflueger under provisions of the federal Clean Water Act on behalf of two community groups, the Limu Coalition and the Kilauea Neighborhood Association.


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