Immunity issues muddle $1.2B lawsuit over Navy water contamination in Hawaii

A Hawaii water utility may not be able to pursue state environmental claims if the facility that was the source of a massive jet fuel leak is determined to be part of the EPA's National Priorities List for Superfund sites.

by Jeremy Yurow, Court House News, December 9, 2025

HONOLULU (CN) — A federal judge signaled Tuesday she may allow Honolulu’s water utility to hold the U.S. Navy accountable for decades of fuel contamination but stopped short of ruling on critical questions about sovereign immunity and what damages the utility can recover.

U.S. District Judge Leslie Kobayashi told attorneys she was inclined to dismiss claims under state environmental law while permitting the Board of Water Supply to proceed with negligence, nuisance and trespass claims arising from contamination events dating back to 1998 — not just the single November 2021 spill that affected 93,000 residents in and around Joint Base Pearl Harbor-Hickam.

But the Barack Obama appointee identified a factual dispute that could upend even that preliminary view: whether the Navy’s Red Hill Bulk Fuel Storage Facility is actually included on the Environmental Protection Agency’s National Priorities List for Superfund sites, a designation that would bar state environmental law claims under federal sovereign immunity.

The distinction matters enormously. If Red Hill is on the priorities list, federal law explicitly bars state environmental law claims at such facilities. The Board of Water Supply is seeking roughly $1.2 billion to remediate contamination of the island’s sole source aquifer.

“There’s a factual issue concerning what the scope, the boundaries, the confines of the NPL is,” John Gisleson, attorney for utility, said.

Justice Department attorney Alex Hardee pushed back, pointing to a federal facilities agreement map that lists Red Hill as part of the site.

“Red Hill is unambiguously part of the Pearl Harbor naval complex, which is unambiguously listed on the national priorities list and has been since 1992,” Hardee said.

On the question of which contamination events the Board of Water Supply can seek damages for under the Federal Tort Claims Act, Kobayashi appeared more sympathetic to the water utility than the government had hoped.

The judge said she was inclined to find that the utility gave sufficient notice in its administrative claim to pursue damages for contamination events going back to 1998, a timeframe that could include a major 2014 spill of 27,000 gallons and a 2022 PFAS firefighting foam release.

“When we look at the administrative claim that they filed, the specific statement about November 2021 and thereafter is forward-looking from the moment of the November 2021 fuel spill,” Justice Department attorney Lucas White said.

But Kobayashi appeared skeptical, suggesting the administrative claim could be read to encompass the cumulative contamination that led to the utility shutting down its wells.

“We’re really talking about the 2021 fuel release, but everything that happened before then doesn’t mean that’s not relevant to their claim,” she said.

Gisleson argued that the water utility couldn’t reasonably list every individual fuel release in its administrative claim because only the government had access to that information. He said the claim still gave the Navy adequate notice by stating that its operations at Red Hill had caused multiple fuel and hazardous substance releases that contaminated the island of Oahu’s main aquifer.

The government countered that historical releases lacked the specificity required.

“There’s nothing in the administrative claim that gives a time, a year, or even a decade,” White said. “Nothing that specifies its location within the 29 miles of pipelines or seven miles of tunnels.”

The Red Hill facility’s 20 massive underground storage tanks sit just 100 feet above an aquifer that provides drinking water to nearly one million Oahu residents. The water utility has documented potentially 1.9 million gallons of fuel releases over the World War II-era facility’s lifetime.

In May 2021, Navy personnel didn’t follow proper refueling procedures, causing approximately 20,000 gallons of jet fuel to spill into a fire suppression pipeline. The Navy initially claimed only 1,000 gallons had been released. Six months later, a Navy employee accidentally struck a valve, releasing the trapped fuel into the drinking water system serving Joint Base Pearl Harbor-Hickam.

The Board of Water Supply said it has already spent more than $24 million responding to the contamination, with future costs potentially exceeding $1 billion if replacement water sources or treatment facilities are needed.

The Navy has since completed fuel removal from the underground tanks, and the facility is being permanently closed. In September 2023, the Secretary of the Navy issued letters of censure to retired admirals for leadership failures that contributed to the crisis.

Kobayashi also indicated she would deny the government’s request to sever and transfer PFAS-related claims to a multidistrict litigation proceeding, citing judicial inefficiency, undue delay and prejudice to the plaintiff.

The judge did not issue a final ruling Tuesday. Kobayashi ordered both sides to file supplemental briefs within two weeks clarifying whether Red Hill is included on the National Priorities List, with the government’s response due in early January.