UNITED STATES DISTRICT COURT
DISTRICT OF HAWAII
KASEY N. BENTLEY, INDIVIDUALLY CIV. NO. 24-00007 LEK-KJM AND ON BEHALF OF ALL OTHERS SIMILARLY SITUATED; KRISTOFER W. BENTLEY, INDIVIDUALLY AND ON BEHALF OF ALL OTHERS SIMILARLY SITUATED; PHYLLIS A. MINOR, INDIVIDUALLY AND ON BEHALF OF ALL OTHERS SIMILARLY SITUATED; AND CHRISTIAN BUTLER, INDIVIDUALLY AND ON BEHALF OF ALL OTHERS SIMILARLY SITUATED;
Plaintiffs,
vs.
HICKAM COMMUNITIES LLC, DOE DEFENDANTS 1-20,
Defendants.
ORDER GRANTING IN PART AND DENYING IN PART DEFENDANT’S MOTION TO DISMISS PLAINTIFF CHRISTIAN BUTLER’S COMPLAINT, FILED NOVEMBER 17, 2023
Before the Court is Defendant Hickam Communities, LLC’s (“Hickam Communities”) Motion to Dismiss Plaintiff Christian Butler’s Complaint, Filed November 17, 2023 (“Motion”), filed on October 29, 2024. [Dkt. no. 29.] Plaintiffs Kasey N. Bentley, Kristofer W. Bentley, Phyllis A. Minor, and Christian Butler, individually and on behalf of all others similarly situated (“Plaintiffs”) filed their memorandum in opposition on December 20, 2024, and Hickam Communities filed its reply on December 27, 2024. [Dkt. nos. 32, 33.] This matter came on for hearing on January 10, 2025. Hickam Communities’ Motion is hereby granted in part and denied in part for the reasons set forth below. Specifically, the Motion is denied as to Hickam Communities’ request for dismissal for failure to join an
indispensable party, and the Motion is granted in part and denied in part as to Hickam Communities’ request for dismissal for failure to state a claim. The claims at issue in the Motion are dismissed, with the exception of a portion of Butler’s claim asserting breach of the implied warranty of habitability and a portion of Butler’s Hawai`i Revised Statutes Chapter 521 claim. The dismissal of Butler’s strict liability claim, medical monitoring claim, and unfair and deceptive acts or practices claim is with prejudice, and the dismissal of the other claims at issue in the Motion is without prejudice. Plaintiffs’ amended complaint shall be filed by May 14, 2025. BACKGROUND
Plaintiffs filed their Complaint in the State of Hawai`i Circuit Court of the First Circuit (“state court”) on November 17, 2023, and the case was removed to this district court on January 4, 2024. See Notice of Removal, filed 1/4/24 (dkt. no. 1), Exh. A (Complaint). The Bentleys resided in a rental housing unit that “was owned, operated, managed and/or leased by” Hickam Communities, [Complaint at ¶¶ 5-6,] as did Minor, [id. at ¶ 7,] and Butler, [id. at ¶ 8]. Hickam Communities “manage[s] and lease[s] residential housing in the City & County of Honolulu, Hawai`i pursuant to agreements with” the United States Department of the Navy (“the Navy”). [Id. at ¶ 33.] Plaintiffs
allege that, under the leases, Hickam Communities had a duty to provide potable water to its tenants, and the tenants had the duty to pay for the utilities included with their homes. [Id. at ¶¶ 35-36.] Plaintiffs argue fuel spills and/or leaks at the Red Hill Bulk Fuel Storage Facility (“Red Hill”), which is owned and operated by the Navy, contaminated the water that Hickam Communities sold to them as part of the utilities included in the leases of their homes. See id. at ¶ 4. The water that Hickam Communities delivered to Plaintiffs came from a water system that is operated by the Navy (“Water System”). [Id.] Plaintiffs allege that, because of the contamination of the water, they
“have been constructively evicted from their homes, had personal property contaminated and ruined, and/or suffered physical harm due to exposure to contaminated water.” [Id.] Plaintiffs argue that, because of prior fuel leaks/releases at Red Hill, and because of Hickam Communities’ relationship with the Navy, Hickam Communities knew or should have known about the risk of contamination to the water that Hickam Communities provided to Plaintiffs under their leases. Further, Hickam Communities failed to warn Plaintiffs about the risk that fuel leaks contaminated the water that was provided to their homes. Hickam Communities did not test the water it provided to Plaintiffs to determine whether the water needed to
be treated and/or replaced. Even after the November 2021 fuel spill, Hickam Communities failed to warn its tenants in a timely manner, which resulted in Plaintiffs using and drinking the contaminated water. [Id. at ¶¶ 38-39.] Plaintiffs are attempting to pursue their case as a class action brought on behalf of a proposed class described in paragraph 13 of the Complaint, and on behalf of a proposed subclass described in paragraph 14 of the Complaint. See id. at pg. 5. Plaintiffs assert the following claims on behalf of the Class, unless stated below: negligence (“Count I”); strict liability (“Count II”); a claim alleging Hickam Communities has a duty to provide medical monitoring for conditions that may
develop because of the contaminated water (“Count III”); private nuisance (“Count IV”); an unfair and deceptive trade practices (“UDAP”) claim and an unfair methods of competition (“UMOC”) claim by the Subclass, pursuant to Hawai`i Revised Statutes Section 480-2 (“Count V”); a breach of the implied warranty of habitability claim by the Subclass (“Count VI”); a trespass claim by the Subclass (“Count VII”); a breach of contract claim by the Subclass (“Count VIII”); and a claim by the Subclass alleging violations of the Landlord Tenant Code, Hawai`i Revised Statutes Chapter 521 (“Count XI”). See id. at pgs. 17-30. Plaintiffs seek: certification of the Class and the Subclass; general, special, and consequential damages, as well as treble
and punitive damages; a medical monitoring program; attorney’s fees and costs; disgorgement of profits; prejudgment interest; injunctive relief; and any other appropriate relief. See id. at pgs. 31-32. Plaintiffs Kasey N. Bentley and Kristofer W. Bentley (“the Bentleys”) and Plaintiff Phyllis A. Minor (“Minor”) have been ordered to arbitrate their individual claims, and the Bentleys’ and Minor’s individual claims and the class claims have been stayed pending the outcome of the arbitration. See Order Granting in Part and Denying in Part Defendant’s Motion to Compel Arbitration and to Dismiss or Stay Plaintiffs’ Claims, Filed November 17, 2023, filed 9/23/24 (dkt. no. 25) (“9/23/24
Order”), at 25-26.1 Thus, only Plaintiff Christian Butler’s (“Butler”) claims are currently pending. In the instant Motion, Hickam Communities first argues Butler’s claims should be dismissed, pursuant to Federal Rule of Civil Procedure 12(b)(7) because Butler failed to join an
1 The 9/23/24 Order is also available at 2024 WL 4267796. indispensable party – the Navy. [Motion at 2.] Hickam Communities also argues Butler’s claims should be dismissed, pursuant to Federal Rules of Civil Procedure 12(b)(6) for failure to state a claim because: residential landlords are not subject to strict liability for conditions on their property;
medical monitoring is not an independent cause of action; Butler lacks standing to bring a UDAP claim; Butler fails to allege the nature of competition element of a UMOC claim; and Butler’s nuisance, trespass, breach of the implied warranty of habitability, and Landlord Tenant Code claims fail because they are not supported by adequate factual allegations. [Id.] DISCUSSION I. Failure to Join Indispensable Party Hickam Communities urges this Court to dismiss Butler’s claims pursuant to Federal Rule of Civil Procedure 12(b)(7) because Hickam Communities contends the Navy is an indispensable party. Hickam Communities emphasizes that
the relief Butler seeks concerns Navy property, and his claims are based on actions and omissions of the Navy. Hickam Communities contends the relief that Butler seeks will have a substantial impact upon the Navy’s interests and upon any claims and defenses the Navy may have. [Motion, Mem. in Supp. at 3.] The Ninth Circuit has set forth a three-step inquiry to determine whether a case should be dismissed under Rule 12(b)(7) for failure to join an indispensable party. See EEOC v. Peabody W. Coal Co., 400 F.3d 774, 779-80 (9th Cir. 2005).
First, the court must determine if the party is a necessary party, i.e., whether the “nonparty should be joined under Rule 19(a).” Id. at 779; see also Salt River Agr. Imp. & Power Dist. v. Lee, 672 F.3d 1176, 1179 (9th Cir. 2012). Second, the court must determine whether it is feasible to order that the absent necessary party be joined. Peabody, 400 F.3d at 779. Third, if joinder is not feasible, the court must determine “whether the case can proceed without the absentee, or whether the absentee is an ‘indispensable party’ such that the action must be dismissed.” Id. If the litigation cannot proceed without the necessary party under Rule 19(b), then the party is considered to be an indispensable party. Lyon v. Gila River Indian Cmty., 626 F.3d 1059, 1070 (9th Cir. 2010).
Kabukshikigaisha v. Agu Ramen, LLC, CIVIL NO. 19-00379 JMS-KJM, 2019 WL 7499948, at *4 (D. Hawai`i Sept. 17, 2019). Federal Rule of Civil Procedure 19(a)(1) states:
A person who is subject to service of process and whose joinder will not deprive the court of subject-matter jurisdiction must be joined as a party if:
(A) in that person’s absence, the court cannot accord complete relief among existing parties; or
(B) that person claims an interest relating to the subject of the action and is so situated that disposing of the action in the person’s absence may:
(i) as a practical matter impair or impede the person’s ability to protect the interest; or
(ii) leave an existing party subject to a substantial risk of incurring double, multiple, or otherwise inconsistent obligations because of the interest.
“Rule 19(a)(1)(A) ‘is concerned . . . with precluding multiple lawsuits on the same cause of action.’” Kabukshikigaisha, 2019 WL 7499948, at *5 (alteration in Kabukshikigaisha) (quoting Northrop Corp. v. McDonnell Douglas Corp., 705 F.2d 1030, 1043 (9th Cir. 1983)). In contrast, Rule 19(a)(1)(B) is “contingent . . . upon an initial requirement that the absent party claim a legally-protected interest relating to the subject matter of the action.” Altmann v. Republic of Austria, 317 F.3d 964, 971 (9th Cir. 2002), as amended by 327 F.3d 1246 (9th Cir. 2003) (emphasis in Altmann) (citations and internal quotation marks omitted); see also Northrop Corp., 705 F.2d at 1043 (“Subparts (i) and (ii) are contingent . . . upon an initial requirement that the absent party claim a legally-protected interest relating to the subject matter of the action.”). “Where a party is aware of an action and chooses not to claim an interest, the district court does not err by holding that joinder [is] ‘unnecessary.’” Altmann, 317 F.3d at 971 (citing United States v. Bowen, 172 F.3d 682, 689 (9th Cir. 1999)).
Id. (alterations in Kabukshikigaisha). In the instant case, the Complaint prays for preliminary and permanent injunctions that, inter alia, require Hickam Communities to “[g]ive warning to existing tenants of the known existence of water contamination in residential units and about the premises,” and prohibit Hickam Communities “from entering into any new leases for residential property until [Hickam Communities] adequately address[es] the substantial water contamination that render the units uninhabitable.”2 [Complaint at pg. 31, ¶¶ G.i, G.v.] The relief that Butler seeks could arguably be awarded in the Navy’s absence. Thus, because complete relief among the existing parties is possible in the Navy’s absence, Rule 19(a)(1)(A) does not apply.
The Navy undoubtedly has an interest in the Navy- operated Water System and in the property that the Navy contracts with Hickam Communities to lease to persons such as Butler. However, issues such as Hickam Communities’ control, or lack thereof, over the Navy-operated Water System and whether Hickam Communities was required to utilize the Navy-operated Water System, can be addressed through Hickam Communities’ answer and a third-party complaint, such as has been done in similar cases brought by residential tenants affected by water contaminated by Red Hill’s operations. See, e.g., Camp et al. v. Ohana Mil. Cmtys., LLC et al., CV 24-00003 LEK-KJM (“Camp”), Defendants Ohana Military Communities LLC and Hunt MH Property
Management, LLC’s Answer to Complaint Filed November 17, 2023; Defendants and Third-Party Plaintiffs Ohana Military Communities, LLC and Hunt MH Property Management, LLC’s Third- Party Complaint Against United States of America, filed 8/13/24
2 Butler does not seek an injunction requiring Hickam Communities to remedy the conditions that caused and/or are causing the water contamination. (dkt. no. 27). Thus, allowing Butler to proceed with his claims in the instant case would not impair or impede the Navy’s ability to protect its interests and would not leave Hickam Communities subject to possible multiple or inconsistent obligations because Hickam Communities is motivated to, and will
likely be able to, bring a third-party complaint against the Navy. During the hearing on the Motion, Hickam Communities argued that it is not similarly situated to the defendants in Camp, and it is unlikely that the Navy will answer a third-party complaint in the instant case. However, at this stage of the instant case, Hickam Communities merely speculates that it will be unable to bring a third-party claim against the Navy. Such speculation is insufficient to support a Rule 12(b)(7) dismissal. This Court therefore concludes, for the purposes of the instant Motion, that the Navy is not a necessary party under
Rule 19(a). Further, even if the Navy was a necessary party, the joinder of the Navy through a third-party complaint is feasible. In light of those rulings, it is not necessary to address whether this case can proceed under Rule 19(b) without the Navy. The Motion is denied as to Hickam Communities’ request to dismiss Butler’s claims under Rule 12(b)(7). The denial is without prejudice to the filing of a new Rule 12(b)(7) motion if further developments in this case indicate that the Navy cannot be joined. II. Failure to State a Claim Hickam Communities also argues all of Butler’s claims should be dismissed pursuant to Federal Rule of Civil
Procedure 12(b)(6), but Hickam Communities does not seek the dismissal of Count I (negligence) and Count VIII (breach of contract). See Motion at 2; id., Mem. in Supp. at 20. Plaintiffs’ position is that all of Butler’s claims are sufficiently pled, but they acknowledge that this Court is likely to rule in a manner consistent with its orders in Camp. Plaintiffs have also represented that they will amend all of Butler’s claims that are dismissed without prejudice. This Court turns first to Butler’s claims that raise the same issues as claims addressed in Camp. A. Claims Addressed in Camp 1. Count II – Strict Liability
In Camp, this Court stated: Applying the reasoning of Armstrong [v. Cione, 69 Haw. 176, 738 P.2d 79 (1987),] and Leong [v. Sears Roebuck & Co., 89 Hawai`i 204, 970 P.2d 972 (1998),] to the instant case, the Court predicts the Hawai`i Supreme Court would not hold the landlord in a residential lease strictly liable for the provision of contaminated water in a residential lease. Defendants can neither adjust the costs up the chain of distribution nor take greater care in providing water to Plaintiffs. Here, as the supreme court noted in Armstrong, “[t]he same economic incentives for creating safer products through an enduring commercial relationship between the manufacturer and its distributors are not present in the case of the residential landlord.” Armstrong, 69 Haw. at 185, 738 P.2d at 84 (citations omitted).
[Camp, Order Granting in Part and Denying in Part Defendants’ Motion to Dismiss Complaint Filed November 17, 2024, filed 7/30/24 (dkt. no. 26) (“Camp 7/30/24 Order”), at 13 (some alterations in Camp).3] The strict liability claim in Camp was dismissed with prejudice. Camp 7/30/24 Order, 2024 WL 3594742, at *5. Because Butler has not presented any reason that warrants departing from the ruling in the Camp 7/30/24 Order, this Court dismisses Butler’s strict liability claim with prejudice for the same reasons set forth in Camp. Hickam Communities’ Moton is therefore granted as to Butler’s claim in Count II. 2. Count III – Medical Monitoring In the Camp 7/30/24 Order, this Court stated: The Court predicts that the Hawai`i Supreme Court would not adopt an independent tort for medical monitoring. Cf. In re Zantac (Ranitidine) Prods. Liab. Litig., 546 F. Supp. 3d 1152, 1167- 68 (S.D. Fla. 2021) (declining to recognize a medical monitoring claim in Montana when only one state trial court case that was twenty years old and unpublished recognized such a claim in Montana, and dismissing such claims with prejudice).
3 The Camp 7/30/24 Order is also available at 2024 WL 3594742. However, the Court notes, without deciding, that Plaintiffs may still be able to recover medical monitoring damages as a remedy, if Plaintiffs can establish that they are entitled to such a remedy in connection with one of the remaining claims. See In re Haw. Fed. Asbestos Cases, 734 F. Supp. 1563, 1573 (D. Hawai`i 1990) (stating the defendants’ motion for new trial as to special damages would be denied if the plaintiffs filed a remittitur regarding the cost of the future medical monitoring, discounted to present value); cf. Ross v. Stouffer Hotel Co. (Hawai`i) Ltd., 76 Hawai`i 454, 466, 879 P.2d 1037, 1049 (1994) (“[A] claim for punitive damages is not an independent tort, but is purely incidental to a separate cause of action.” (citation omitted)). Because medical monitoring damages as a remedy would flow from a separate cause of action, the Court declines to address whether Plaintiffs possess standing to pursue such damages until a later stage of this case when the causes of actions are more fully developed.
Id. at *6 (alteration in Camp). The medical monitoring count was dismissed with prejudice, but this Court ruled that the plaintiffs were not foreclosed from seeking medical monitoring damages as a potential remedy. Id. Because Butler has not presented any reason that warrants departing from the ruling in the Camp 7/30/24 Order, this Court dismisses Butler’s medical monitoring claim with prejudice for the same reasons set forth in Camp. Hickam Communities’ Moton is therefore granted as to Butler’s claim in Count III. However, as in Camp, Butler is not foreclosed from seeking medical monitoring damages as a potential remedy in his remaining claims. 3. Count V a. UDAP In the Camp 7/30/24 Order, this Court predicted that “the Hawai`i Supreme Court would hold that the provision of water in a rental unit is not a ‘good’ under Section 480-1,
because the contracts at issue are fundamentally agreements to lease a residence, not to sell a ‘good.’” Id. at *8. This Court also stated: While cognizant that Hawai`i consumer law is interpreted broadly to maximize consumer protection, see State ex rel. Shikada v. Bristol- Myers Squibb Co., 152 Hawai`i 418, 446, 526 P.3d 395, 423 (2023), the Court agrees with Lake [v. Ohana Military Communities, LLC, CIVIL 16-00555 LEK-KJM, 2017 WL 4563079, at *6-7 (D. Hawai`i Aug. 1, 2017)], Barber [v. Ohana Military Communities, LLC, Civil No. 14-00217 HG-KSC, 2015 WL 2250041, at *7-8 (D. Hawai`i May 12, 2015)], Freeman [v. United Dominion Realty Trust, Inc., No. E042905, 2008 WL 1838373 (Cal. Ct. App. April 25, 2008), as modified (May 6, 2008)], and Heckart [v. A-1 Self Storage, Inc., 196 Cal. Rptr. 3d 504, 512 (Cal. Ct. App. 2015)].[4] The provision of water cannot be properly viewed in isolation from the underlying lease. The fundamental nature of a rental agreement is to lease a residence, not to purchase the service of water delivery to a tenant’s residence. Even accepting all of Plaintiffs’ factual allegations
4 This Court granted reconsideration of the August 1, 2017 order on grounds unrelated to the analysis cited here. See Lake v. Ohana Mil. Cmtys., LLC, CIVIL 16-00555 LEK-KJM, 2017 WL 4560123, at *3 (D. Hawai`i Oct. 12, 2017). The Ninth Circuit vacated the judgment in Lake on grounds that were unrelated to the analysis in the August 1, 2017 order. See Lake v. Ohana Mil. Cmtys, LLC, 14 F.4th 993 (9th Cir. 2021). Heckart was superseded and affirmed by the California Supreme Court. Heckart v. A-1 Self Storage, Inc., 4 Cal. 5th 749 (2018). as true, see Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009), the Court predicts the Hawai`i Supreme Court would find that Plaintiffs have not purchased, attempted to purchase, and were not solicited to purchase “services” within the meaning of Chapter 480.
Id. at *9. Finally, this Court ruled that the plaintiffs could not establish standing to pursue a UDAP claim based on their purchase of replacement household goods. The UDAP claim in Camp was therefore dismissed with prejudice. Id. Because Butler has not presented any reason that warrants departing from the ruling in the Camp 7/30/24 Order, this Court dismisses Butler’s UDAP claim with prejudice for the same reasons set forth in Camp. Hickam Communities’ Moton is granted as to Butler’s UDAP claim in Count V. b. UMOC “‘[A]ny person may bring a claim of unfair methods of competition based upon conduct that could also support a claim of unfair or deceptive acts or practices as long as the nature of the competition is sufficiently alleged in the complaint.’” Id. (quoting Haw. Med. Ass’n v. Haw. Med. Serv. Ass’n, Inc., 113 Hawai`i 77, 113, 148 P.3d 1179, 1215 (2006)). This Court therefore rejects Butler’s argument that a plaintiff asserting a UMOC claim is not required to plead the nature of the competition in the complaint. See Mem. in Opp. at 22-23. In the Camp 7/30/24 Order, this Court also stated: Plaintiffs’ factual allegations are insufficient to support a claim that Defendants’ failure to disclose the risk that Plaintiffs’ household tap water was contaminated had a negative effect on competition that harms consumers like Plaintiffs. Plaintiffs allege: “Defendant Ohana is in competition with other providers of leased residential housing in Honolulu and gained an unfair competitive advantage over them by failing to disclose water contamination or provide uncontaminated water while charging comparable rents.” [[Camp,] Complaint at ¶ 79.] This allegation, standing alone, is insufficient.
While a plaintiff may allege a defendant’s conduct negatively affects competition by alleging a defendant’s conduct creates incentives for consumers to purchase defendant’s services, rather than a competitor’s, here, Plaintiffs do not make such allegations. See Gurrobat [v. HTH Corp.], 133 Hawai`i [1,] 22, 323 P.3d [792,] 813 [(2014)] (stating “plaintiffs may prove how a defendant’s conduct negatively affects competition by showing that defendant’s conduct enables the defendant to create incentives for customers to purchase banquet services from the defendant instead of competitors”). Instead, Plaintiffs allege that Defendants’ conduct allows Defendants to charge market-rate rents, with the implication that Defendants’ rental rates would have been lower if Defendants had disclosed the water contamination.
Missing from the allegations is the anticompetitive effects within that market – how competitors were harmed by Defendants’ alleged actions. “‘[O]rdinarily, the factual support needed to show injury to competition must include proof of the relevant geographic markets and demonstration of the restraint’s anticompetitive effects within those markets.’” Sunday’s Child, LLC v. Irongate Azrep BW LLC, CIVIL NO. 13-00502 DKW-RLP, 2017 WL 10651861, at *4 (D. Hawai`i Oct. 27, 2017) (quoting Les Shockley Racing, Inc. v. Nat’l Hot Rod Ass’n, 884 F.2d 504, 508 (9th Cir. 1989) (affirming dismissal for failure to allege actual detrimental competitive effects)). The Complaint does not contain allegations of how Defendants’ actions restrained competition by “disrupting ‘price setting, resource allocation, market entry, or output designation’ “ or other market functions. See WHIC LLC v. NextGen Lab’ys, Inc., Civ. No. 18-00261 JMS-WRP, 2019 WL 2717769, at *4 (D. Hawai`i June 28, 2019) (some citations omitted) (quoting Les Shockley Racing, 884 F.2d at 508) (citing Field, Tr. of Estate of Aloha Sports Inc. v. Nat’l Collegiate Athletic Ass’n, 143 Haw. 362, 375, 431 P.3d 735, 748 (2018) (listing how the defendant’s actions negatively affected competition by “(1) restricting the transfer of ownership of bowl games contingent upon recertification; (2) leading to lower prices for the sale of bowl sponsoring agencies because of uncertainty as to whether a bowl will gain recertification; and (3) acting as a restriction on output that would result in a loss of financial benefits to schools and consumers who would have otherwise participated in a given bowl”)). Absent from the Complaint are allegations outlining the effect of Defendants’ actions on the price or availability of leased housing in the relevant geographic market, or any other characteristic of a competitive market.
Id. at *10 (some alterations in Camp). The UMOC claim in Camp was dismissed without prejudice because of the possibility that the plaintiffs could add sufficient factual allegations to state a plausible UMOC claim. Id. at *11. Paragraph 77 in the Complaint in the instant case contains the same allegation as paragraph 79 in the Camp complaint. Because Butler’s UMOC claim has the same defect as the UMOC claim in Camp, and because Butler has not presented any reason that warrants departing from the ruling in the Camp 7/30/24 Order, this Court dismisses Butler’s UMOC claim without prejudice for the same reasons set forth in Camp. Hickam Communities’ Moton is granted in part and denied in part as to Butler’s UMOC claim in Count V. B. Claims Not Addressed in Camp 1. Count IV – Nuisance
Under Hawai`i law, a nuisance is defined as:
an activity or condition that actively interferes with an individual’s right to use and enjoy land. See Western Sunview Properties, LLC v. Federman, 338 F. Supp. 2d 1106, 1116 (D. Haw. 2004) (A nuisance “has been defined as ‘a nontrespassory invasion of another’s interest in the private use and enjoyment of his land.’”) (quoting Layton v. Yankee Caithness Joint Venture, 774 F. Supp. 576, 577 (D. Nev. 1991)). The “central idea of nuisance is the unreasonable invasion” of a property interest. Lussier v. San Lorenzo Valley Water Dist., 206 Cal. App. 3d 92, 100 (Cal. Ct. App. 1988). A typical example of a nuisance is smoke or fumes that invade an individual’s property from another location. E.g., Olden C. LaFarge Corp., 203 F.R.D. 254 (E.D. Mich. 2001). Other common examples include noxious odors and unreasonably loud noise. E.g., Crea v. Crea, 16 P.3d 922 (Id. 2000) (odor from hog farm could be a nuisance); Schild v. Rubin, 232 Cal. App. 3d 755 (Cal. Ct. App. 1991) (excessive and inappropriate noise may constitute nuisance).
Mitchell v. United States, Civ. No. 11-00088 HG- KSC, 2011 WL 4048986, at *7 (D. Hawai`i Sept. 12, 2011).
One is subject to liability for a private nuisance if, but only if, his conduct is a legal cause of an invasion of another’s interest in the private use and enjoyment of land, and the invasion is either
(a) intentional and unreasonable, or
(b) unintentional and otherwise actionable under the rules controlling liability for negligent or reckless conduct, or for abnormally dangerous conditions or activities.
Restatement (Second) of Torts § 822 (1979) Westlaw (database updated June 2019) (Restatement of Torts). An invasion is “unreasonable” if, inter alia, “the gravity of the harm outweighs the utility of the actor’s conduct.” Id. § 826.
Lee Ching v. Loo Dung, 145 Hawai`i 99, 115, 446 P.3d 1016, 1032 (Ct. App. 2019).[5] . . .
Powers v. Airbnb, Inc., CIV. NO. 23-00243 LEK-WRP, 2023 WL 7166246, at *3-4 (D. Hawai`i Oct. 31, 2023) (footnote omitted). Butler’s nuisance claim in Count IV appears to allege both a nuisance claim under Restatement (Second) of Torts Section 822(a) and Section 822(b). See Complaint at ¶ 72 (alleging Hickam Communities created a nuisance by “knowingly and recklessly allowing petroleum contamination of the potable water of [Butler], and by willfully failing and refusing to take reasonable measures to resolve said water contamination and to
5 The Intermediate Court of Appeals’ decision in Lee Ching was reversed by the Hawai`i Supreme Court on grounds other than those cited here. See Lee Ching v. Loo Dung, 148 Hawai`i 416, 477 P.3d 856 (2020). bring [his] unit[] into a habitable condition” (emphases added)); id. at ¶ 73 (alleging Hickam Communities’ conduct “was knowing, willful, wanton, reckless, and/or grossly negligent, and demonstrates a conscious disregard for the rights of others” (emphasis added)). Butler also alleges that the presence of
petroleum contamination in the water provided to his home is an unreasonable interference with his use and enjoyment of his home. See id. at ¶ 72. However, Count IV does not plead factual allegations that, if proven, would establish that Hickam Communities’ conduct was the legal cause of the invasion of petroleum contamination into Butler’s home. Butler’s allegation that Hickam Communities “knowingly and recklessly allow[ed] petroleum contamination of [Butler’s] potable water,” [id.,] is a conclusory assertion that is not supported by any factual allegations regarding how Hickam Communities’ conduct was the legal cause of the contamination that entered Butler’s home. A conclusory allegation is not taken as true for purposes of the
instant Motion. See Iqbal, 556 U.S. at 678 (“Although for the purposes of a motion to dismiss we must take all of the factual allegations in the complaint as true, we are not bound to accept as true a legal conclusion couched as a factual allegation.” (citation and internal quotation marks omitted)). Butler’s claim in Count IV fails to state a plausible nuisance claim and must be dismissed. See id. (“To survive a motion to dismiss, a complaint must contain sufficient factual matter, accepted as true, to state a claim to relief that is plausible on its face.” (citation and internal quotation marks omitted)). The dismissal is without prejudice because it may be possible for Butler to cure the defects in his claim by
amendment. See Hoang v. Bank of Am., N.A., 910 F.3d 1096, 1102 (9th Cir. 2018) (“Dismissal with prejudice and without leave to amend is not appropriate unless it is clear on de novo review that the complaint could not be saved by amendment.” (quotation marks and citation omitted)). 2. Count VII - Trespass [U]nder Hawai`i law, “[a] trespass occurs when a person intentionally (a) enters land in the possession of the other, or causes a thing or third person to do so, or (b) remains on the land, or (c) fails to remove from the land a thing which he is under a duty to remove.” Shayefar v. Kaleleiki, Civ. No. 14-00322 HG-KSC, 2014 WL 5023498, at *5 (D. Hawai`i Oct. 7, 2014) (citation and internal quotation marks omitted).
Powers, 2023 WL 7166246 at *3 (some alterations in Powers). The Complaint alleges “harmful petroleum hydrocarbons and fuel contaminants” entered Butler’s property through the water provided by Hickam Communities. [Complaint at ¶ 95.] The Complaint, however, does not allege Hickam Communities engaged in intentional conduct that satisfies any of the three types of trespass claims. The Complaint alleges that, because Hickam Communities “controlled the contaminated water when it entered [Butler’s] property, [it is] liable for the trespass of [its] contaminated water . . . onto the property of [Butler] . . . .” [Id. at ¶ 96.] However, this is a conclusory assertion that is not supported by any factual allegations regarding how Hickam Communities controlled the contaminated water. The conclusory
allegation therefore is not taken as true for purposes of the instant Motion. At the hearing on the Motion, Plaintiffs’ counsel argued that, even if Hickam Communities did not intentionally cause the fuel contaminants to enter Butler’s home, once Hickam Communities was aware of the fuel contamination, it had a duty to remove the contaminants, and it intentionally failed to do so within a reasonable period. Such a theory could support a plausible trespass claim, but the factual allegations currently pled in Count VII do not support it, and therefore Butler cannot rely on that theory to avoid the dismissal of his trespass claim. Butler’s claim in Count VII must be dismissed because,
as currently pled, it fails to state a plausible trespass claim. The dismissal is without prejudice because Butler may be able to cure the defects in his claim by amendment. 3. Count IX – Landlord-Tenant Code Claim Count IX cites Hawai`i Revised Statutes Sections 521- 10, 521-42(a)(1), and 521-63. [Complaint at ¶¶ 107-08, 110-11.] In addition, paragraph 112 cites Chapter 521 as a whole. Section 521-10 states: “Every duty imposed by this chapter and every act which must be performed as a condition precedent to the exercise of a right or remedy under this chapter imposes an obligation of good faith in its performance or enforcement.” Section 521-42 governs a residential landlord’s duty to provide
fit premises. Section 521-42 states, in pertinent part: The landlord shall at all times during the tenancy:
(1) Comply with all applicable building and housing laws materially affecting health and safety;
(2) Keep common areas of a multi-dwelling unit premises in a clean and safe condition;
(3) Make all repairs and arrangements necessary to put and keep the premises in a habitable condition;
(4) Maintain all electrical, plumbing, and other facilities and appliances supplied by the landlord in good working order and condition, subject to reasonable wear and tear;
(5) Except in the case of a single family residence, provide and maintain appropriate receptacles and conveniences for the removal of normal amounts of rubbish and garbage, and arrange for the frequent removal of such waste materials; and
(6) Except in the case of a single family residence, or where the building is not required by law to be equipped for the purpose, provide for the supplying of running water as reasonably required by the tenant.
Section 521-63 addresses remedies, and it states, in pertinent part: (a) If any condition within the premises deprives the tenant of a substantial part of the benefit and enjoyment of the tenant’s bargain under the rental agreement, the tenant may notify the landlord in writing of the situation and, if the landlord does not remedy the situation within one week, terminate the rental agreement. The notice need not be given when the condition renders the dwelling unit uninhabitable or poses an imminent threat to the health or safety of any occupant. . . .
(b) If the condition referred to in subsection (a) was caused wilfully or negligently by the landlord, the tenant may recover any damages sustained as a result of the condition.
(c) If the landlord removes or excludes the tenant from the premises overnight without cause or without court order so authorizing, the tenant may recover possession or terminate the rental agreement and, in either case, recover an amount equal to two months rent or free occupancy for two months, and the cost of suit, including reasonable attorney’s fees. If the rental agreement is terminated, the landlord shall comply with section 521-44(c). . . .
In Lake v. Ohana Military Communities, LLC, the plaintiffs asserted a Chapter 521 claim that was similar to Butler’s claim here, and this Court ruled: Plaintiffs have alleged the contaminated soil at [Kaneohe Marine Corp Base Hawaii (“MCBH”)] deprived them of the use and enjoyment of their rental homes and of the MCBH community in general and Defendants have failed to adequately respond to the contamination issues. Plaintiffs also allege Defendants’ actions were willful and/or negligent. This Court concludes the alleged violation of § 521-10 is actionable pursuant to § 521-63, and therefore denies the Motion as to the portion of Amended Count III based on § 521- 10. However, Plaintiffs have not identified any specific “building or housing laws materially affecting health and safety” that Defendants allegedly violated. Amended Count III therefore fails to a state a plausible claim for violation of § 521-42(a)(1) and must be dismissed.
CIVIL 16-00555 LEK-KJM, 2018 WL 2449188, at *6–7 (D. Hawai`i May 31, 2018).6 Similarly here, Butler does not identify any specific “building and housing laws materially affecting health and safety” that Hickam Communities allegedly violated. Therefore, the portion of Butler’s claim in Count IX based on Section 521- 42(a)(1) fails to state a plausible claim for relief. During the hearing on the Motion, Butler’s counsel argued the Complaint contains sufficient factual allegations to state a plausible claim under other subsections of Section 521-42, including (a)(3) and (a)(4). However, only subsection (a)(1) is alleged in Count IX. Count IX therefore fails to state a plausible claim for relief under any portion of Section 521-42, and that portion of Butler’s claim in Count IX must be dismissed. As recognized in Lake, a violation of Section 521-10 is actionable pursuant to Section 521-63. However, because Butler’s Section 521-10 claim appears to be based upon Hickam Communities’ failure to provide housing that complies with
6 Lake was vacated on grounds unrelated to the May 31, 2018 order. See 14 F.4th 993. health and safety laws, see Complaint at ¶¶ 107-09, that portion of Butler’s Section 521-10 claim fails for the same reason that Butler’s Section 521-42(a)(1) claim fails. That portion of Count IX must be dismissed. Count IX also alleges Hickam Communities violated
Section 521-63 because it would not allow Butler to terminate his residential lease without notice after the water contamination rendered the premises uninhabitable. See Complaint at ¶¶ 110-11. Although Section 521-63(a) states that a tenant may terminate a rental agreement without notice when a condition renders the premises uninhabitable, the Complaint alleges: Defendants represented to Plaintiffs and the Subclass that in order for them to be able to vacate the premises as a result of the water contamination, Plaintiffs were bound under the terms of the lease to pay two months’ rent for early termination of their leases. Defendants further represented to Plaintiffs and the Subclass that in order to escape the two-month rent penalty for early termination of the lease, they must execute an agreement waiving and releasing any claims by Plaintiffs and the Subclass against Defendants, which would include all claims related to the water contamination. . . .
[Id. at ¶ 111.] These allegations, which are assumed to be true for purposes of the instant Motion, see Iqbal, 556 U.S. at 678, are sufficient to support a plausible claim under Section 521- 63(a). Hickam Communities’ Motion is therefore denied as to the portion of Butler’s claim in Count IX based upon the alleged refusal to allow Butler to terminate his rental agreement without notice. As to the portions of Butler’s claim in Count IX that have been dismissed, the dismissal is without prejudice because it may be possible for Butler to cure the defects in his claim
by amendment. The Motion is therefore denied as to Hickam Communities’ request for dismissal with prejudice. 4. Count VI – Breach of the Implied Warranty of Habitability
Relevant to Butler’s common law claim for breach of the implied warranty of habitability, Hawai`i Revised Statutes Section 521-3(a) states: Unless displaced by the particular provisions of this chapter, the principles of law and equity, including the law relative to capacity to contract, principal and agent, real property, public health, safety and fire prevention, estoppel, fraud, misrepresentation, duress, coercion, mistake, bankruptcy, or other validating or invalidating cause supplement its provisions.
“Chapter 521 . . . applies to residential landlord-tenant relationships, and it . . . displaces the common law regarding residential leases.” Wond Fam. Kapalama, LLC v. Cont’l Tire the Americas, LLC, CIVIL NO. 16-00676 LEK-KJM, 2018 WL 2027728, at *14 (D. Hawai`i May 1, 2018). Although not entirely clear, Hickam Communities appears only to argue displacement as to Butler’s breach of the implied warranty of habitability claim. See Motion, Mem. in Supp. at 18. One of the allegations supporting Count VI is that Hickam Communities “[f]ailed to provide adequate, safe, potable water for use by [Butler] after the November 2021 Red Hill
Facility spill.” [Complaint at ¶ 92.d.] Hawai`i Revised Statutes Section 521-42(a)(6) states that, “[e]xcept in the case of a single family residence,” a landlord is required to “provide for the supplying of running water as reasonably required by the tenant.” Thus, as to single family residences, Section 521- 42(a)(6) does not impose a duty upon a landlord to provide running water. To the extent that potable running water is necessary to the provide a habitable single-family residence, Chapter 521 does not displace the implied warranty of habitability. However, the Complaint does not allege that the residence Butler rented from Hickam Communities was a single- family residence. See Complaint at ¶ 8 (alleging only that
Butler “resided in, and paid rent for, a housing unit in the City & County of Honolulu, Hawai`i, that was owned, operated, managed and/or leased by Defendant Hickam [Communities]” (emphasis added)). Plaintiffs have indicated that they will file an amended complaint as to the claims dismissed without prejudice in this Order. The amendments to those claims should include, inter alia, further allegations clarifying Butler’s Chapter 521 claim, and those amendments are likely to affect the displacement analysis. This Court therefore declines to address displacement at this time. Hickam Communities may raise the displacement issue in a future motion when the record is more fully developed.
Assuming that the common law breach of the implied warranty of habitability claim is not displaced, the claim’s requirements are as follows: A property owner breaches the implied warranty of habitability if he leases his property with a defect or unsafe condition that is “of a nature and kind which will render the premises unsafe, or unsanitary and thus unfit for living.” Armstrong v. Cione, 736 P.2d 440, 445 (Haw. Ct. App. 1987); Lemle v. Breeden, 462 P.2d 470, 474 (Haw. 1969) (recognizing the doctrine of implied warranty of habitability and finding rat infestation of leased premises constituted a breach). The leased premises must be substantially unsuitable for living so that the breach of the warranty would constitute a constructive eviction of the tenant. Armstrong, 736 P.2d at 445.
Lake, 2018 WL 2449188, at *6 (quoting Barber v. Ohana Military Communities, LLC, Civil No. 14–00217 HG–KSC, 2014 WL 3529766, at *6 (D. Hawai`i July 15, 2014)). The Complaint alleges Butler was constructively evicted from his home because of the water contamination. See Complaint at ¶¶ 4, 47, 87. Count VI alleges Hickam Communities breached its duty to provide Butler with “safe, sanitary, and health residential housing” because Hickam Communities: a. Failed to identify, test or otherwise screen water sourced from the City & County Board of Water Supply, the Navy and/or the Southern O`ahu Basal Aquifer before it was sold or distributed to [Butler];
b. Failed to warn [Butler] of the November 2021 Red Hill Facility spill and contamination of Defendants’ water in a timely manner;
c. Failed to provide alternative housing for [Butler] after the November 2021 Red Hill Facility spill;
d. Failed to provide adequate, safe, potable water for use by [Butler] after the November 2021 Red Hill Facility spill; and
e. Otherwise failed to provide housing that was safe and habitable.
[Id. at ¶¶ 92-92.e.] The Complaint also alleges: 34. [Hickam Communities] and the Navy entered into a public-private venture to make productive use of residential housing previously utilized as a military housing community. Under the public-private venture, federal lands are leased to [Hickam Communities] who then lease residences to private consumers, including [Butler]. The public-private venture also includes the sourcing of potable water sources from a Navy-operated water system to [Hickam Communities’] control. As a party to the public- private venture, Defendant Hickam [Communities] had and has a unique ability to obtain information on the quality and safety of the water in the [Navy-operated Water System] and to obtain information on risks of contamination to potable water supply attributable to leakages and spills occurring at the Red Hill Facility.
. . . .
38. [Hickam Communities] possessed knowledge of the risk of water contamination from the Red Hill Facility by and through their relationships with the Navy and their sale of water that they acquired from the [Navy-operated Water System]. On information and belief, they knew or should have known of the many prior fuel leaks from the Red Hill Facility. At no time did they warn [Butler] of the risk of fuel leaks in their water. Even after the November 2021 Red Hill Facility spill, [Hickam Communities was] unreasonably slow to warn consumers of the spill, allowing [Butler] to continue drinking and using the poisoned water.
[Id. at pgs. 12-13.] Count VI appears to allege that Butler’s residence was uninhabitable both before and after the November 2021 fuel spill at Red Hill. The factual allegations of the Complaint are sufficient to state a plausible claim for the breach of the implied warranty of habitability based on Hickam Communities’ actions and omissions after the November 2021 fuel spill. Hickam Communities’ Motion is therefore denied as to that portion of Butler’s claim in Count VI. However, the Complaint does not include sufficient factual allegations regarding the issue of whether Butler’s residence was uninhabitable prior to the November 2021 fuel spill. That portion of Butler’s claim in Count VI fails to state a plausible claim for breach of the implied warranty of habitability and must be dismissed. The dismissal is without prejudice because it may be possible for Butler to cure the defects in that portion of Count VI by amendment. III. Ruling on the Motion & the Filing of the Amended Complaint In sum, this Court rules as follows: -Hickam Communities’ Motion is denied without prejudice as to its request for dismissal pursuant to Federal Rule of Civil Procedure 12(b)(7) for failure to join the Navy.
-The Motion is granted insofar as Butler’s claims in Counts II and III and Butler’s UDAP claim in Count V are dismissed with prejudice.
-The Motion is granted insofar as Butler’s UMOC claim in Count V and Butler’s claims in Counts IV and VII are dismissed, but the Motion is denied insofar as the dismissal of those claims is without prejudice.
-The Motion is denied as to the portion of Butler’s claim in Count VI based on Hickam Communities’ actions and omissions after the November 2021 fuel spill at Red Hill. The Motion is granted insofar as the portion of Butler’s claim in Count VI based on Hickam Communities’ actions and omissions prior to the November 2021 fuel spill is dismissed, but the Motion is denied insofar as the dismissal of that portion of Butler’s claim in Count VI is without prejudice.
-The Motion is denied as to the portion of Butler’s claim in Count IX alleging that Hickam Communities violated Hawai`i Revised Statutes Section 521-63(a) by preventing Butler from terminating his rental agreement without notice. The Motion is granted insofar as all other portions of Butler’s claim in Count IX are dismissed, but the Motion is denied insofar as that dismissal of those portions of Butler’s claim in Count IX is without prejudice.
Hickam Communities has not sought a Federal Rule of Civil Procedure 12(b)(6) dismissal of Counts I and VIII. See Motion, Mem. in Supp. at 20 (“at a minimum, Counts 2, 3, 4, 5, 6, 7, and 9 of Plaintiff’s Complaint should be dismissed with prejudice”). This Court makes no findings or conclusions regarding Butler’s claims in those counts. Butler shall file an amended complaint by May 14, 2025. As previously noted, the Bentleys and Minor have been ordered to arbitrate their individual claims, and the Bentleys’ and Minor’s individual claims and the class claims have been stayed pending the outcome of the arbitration. The amended
complaint shall include the stayed claims, and Plaintiffs may amend the stayed claims consistent with this Order. Plaintiffs’ amended complaint shall not include any new parties or claims. Further, the amended complaint shall not include any new theories of liability, except as necessary to address the defects that have been identified in this Order. If Plaintiffs wish to make amendments to their claims that are not expressly permitted in this Order, Plaintiffs must file a motion for leave to file a second amended complaint. If Plaintiffs file such a motion, it will be considered by the magistrate judge in the normal course. If Plaintiffs file a motion for leave to file a second amended complaint, that motion will not affect the May
14, 2025 deadline for the filing of the amended complaint. Plaintiffs are CAUTIONED that, if the amended complaint does not comply with this Order, sanctions may be imposed, including, but not limited to, the striking of the amended complaint. PagelD.6/74
CONCLUSION For the foregoing reasons, Hickam Communities’ October 29, 2024 Motion to Dismiss Plaintiff Christian Butler’s Complaint, Filed November 17, 2023, is HEREBY GRANTED IN PART AND DENIED IN PART, as stated in Discussion Section III. Plaintiffs’ amended complaint shall be filed by May 14, 2025. IT IS SO ORDERED. DATED AT HONOLULU, HAWAII, April 30, 2025. SE —
> ry □ /s/ Leslie E. Kobayashi Leslie E. Kobayashi A Senior U.S. District Judge 2 > 22 me
KASEY N. BENTLEY, ET AL. VS. HICKAM COMMUNITIES LLC, ET AL; CV 24-00007 LEK-KJM; ORDER GRANTING IN PART AND DENYING IN PART DEFENDANT’S MOTION TO DISMISS PLAINTIFF CHRISTIAN BUTLER’S COMPLAINT, FILED NOVEMBER 17, 2023