No. SCWC-11-0000594, Thursday, June 30, 2016, 10 a.m.

JASON KAWAKAMI, individually and on behalf of all others similarly situated, Petitioner/Plaintiff-Appellant/Cross-Appellee, vs. KAHALA HOTEL INVESTORS, LLC, dba KAHALA HOTEL AND RESORT, Respondent/Defendant-Appellee/Cross-Appellant.

The above-captioned case has been set for argument on the merits at:

Supreme Court Courtroom
Aliʻiolani Hale, 2nd Floor
417 South King Street
Honolulu, HI 96813

Attorneys for Petitioner:

James J. Bickerton, Bridget G. Morgan, John Francis Perkin, Brandee J.K. Faria, and Kristina M. Hanson

Attorneys for Respondent:

David J. Minkin, Lisa W. Cataldo, and Dayna Kamimura-Ching

NOTE: Order accepting Application for Writ of Certiorari, filed 04/08/16.

COURT: MER, C.J.; PAN, SSM, RWP, and MDW, JJ.

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Brief Description:

Petitioner/Plaintiff-Appellant Jason Kawakami (Kawakami), individually and on behalf of all others similarly situated, filed an Application for Writ of Certiorari on February 26, 2016. Kawakami’s Application seeks review of the Intermediate Court of Appeals’ (ICA) December 23, 2015 Memorandum Opinion. The ICA’s Memorandum Opinion affirmed the Circuit Court of the First Circuit’s January 4, 2011 Order Denying Plaintiffs’ Motion in Limine No. 1, and February 8, 2011 Order Granting Defendant Kahala Hotel’s Renewed Motion for Judgment as a Matter of Law.

Kawakami held his wedding reception at the Kahala Hotel and Resort in July 2007. Kahala Hotel collected a 19% service charge on the purchase of food and beverages for his reception. Hawaiʻi Revised Statutes (HRS) § 481B-14 mandates that a hotel must either distribute all of its service charge to employees as tips, or else disclose to consumers that it is using the service charge for another purpose. Instead of distributing its service charge to employees as tips, Kahala Hotel retained 15% of the charge as a “management share,” reclassified it, and then used it to pay for the banquet employees’ wages. No disclosure was made to Kawakami that a portion of the service charge was used as wages, rather than directly distributed to the banquet employees as tips.

Kawakami previously appealed to this Court on the issue of whether Kahala Hotel’s retention of a portion of the service charge violated HRS § 481B-14. We ruled in Kawakami’s favor that Kahala Hotel violated HRS § 481B-14 when it failed to disclose that it retained a portion of its service charge as a management share. Kawakami v. Kahala Hotel Inv’rs, 134 Hawai#i 352, 360, 341 P.3d 558, 566 (2014). Kawakami appeals to this Court once more, but on the issue of injury, i.e. whether the ICA erred in holding that he was not injured by Kahala Hotel’s actions and could not recover damages as a result. He also appeals the ICA’s decision to affirm the circuit court’s Order Denying Plaintiffs’ Motion in Limine No. 1, which sought to preclude evidence of the percentage of the service charge Kahala Hotel’s management retained and the percentage it paid to its employees as tips.

Kawakami’s Application states the issues as follows:

1. Whether the ICA gravely erred in holding that a consumer who is charged and who pays a mandatory service charge that was imposed in violation of the law (because there was no disclosure by the hotel of its retention of a portion of the service charge) has not been injured by the non-disclosure and the subsequent payment of the unlawful charge.

2. Whether the ICA gravely erred in affirming the lower court’s order denying Plaintiffs’ Motion in Limine No. 1, which sought to preclude evidence of the manner in which Appellee/Cross-Appellant/Respondent Kahala Hotel Investors (“KHI”) distributed the remainder of its service charge after it was improperly collected from the members of the Plaintiff Class and a portion was retained by KHI on grounds that such evidence is irrelevant where the violation of Section 481B-14 had been adjudicated pretrial and the only remaining issue for the jury was the amount of damages.