Court says state doesn’t
owe FEMA $10 million

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Star-Bulletin staff

The 9th U.S. Circuit Court of Appeals has ruled that the state of Hawaii does not have to pay a $10 million reimbursement to the Federal Emergency Management Agency.

The state contended that FEMA had demanded reimbursement beyond the actual amount of insurance money the state received for repairs after Hurricane Iniki on Sept. 11, 1992.

"This has been a long battle, and we're glad to wrap it up by the 10th anniversary of Iniki," said Dorothy Sellers, supervising deputy attorney general of the appellate division.

The decision will benefit other states, according to a news release issued yesterday by the Attorney General's Office.

Sellers said the state has been quarreling with FEMA for about eight years.

The court ruled the state acted in a commercially reasonable manner in settling with its insurers and properly reimbursed FEMA only for the insurance proceeds actually received.

"It's unusual for a state to win one of these cases because their (federal appeals courts) rulings are entitled to a high degree of deference," Sellers said, and "they tend to affirm the ruling of the federal administrator."