ke kumu
CADES IN THE COMMUNITY
Cades Schutte’s Hoʻokupu for 100 was a year-long celebration of service to Hawai‘i by Cades Schutte attorneys and staff. Over 500 hours of community service were performed through beach cleanups, work days at nonprofits, and events such as the Heart Walk, the Walk to End Alzheimer’s, and the Humane Society Pet Walk. Attorneys further provided pro bono services through Legal Lines and by staffing the Access to Justice room. Over 70 attorneys and staff participated throughout the year, showing our firm’s
Cades Schutte attorneys and staff came together this June to pack 1,800 boxes of food for kupuna in need at the Hawai‘i Foodbank’s Senior Food Box program.
Cades Schutte LLP joined several downtown businesses and nonprofits on July 25 and cheered the start of the firm’s annual Aloha United Way pledge campaign.
Thank you to the Cades Schutte attorneys who volunteered their time at the Honolulu Access to Justice Room this May: Trever K. Asam, Michi Momose, Kristin S. Shigemura, W. Keoni Shultz, Mark K. Murakami, Ellen R. Ashford, Pōhai Nu‘uhiwa Campbell, Jarrett A. Dempsey, Darene K. Matsuoka, Caitlin M. Moon, Reyn S.P. Ono, and Michael R. Soon Fah.
A Cades Schutte group participated in Manoa Valley Theatre’s Annual Grounds Cleanup in August. The team cleared out the storage room, which will be converted into a studio.
Mauna Kea Trask, Andrea K. Ushijima, and Emily K. Tanaka
AIA KE OLA I KA HANA
Life is in labor. Labor produces what is needed.
2024 has proven quite busy, and it is hard to believe that we are already in Q4 approaching the end of another calendar. Often work plays a significant and integral role in our lives. In this issue, we feature articles that delve into workplace and business-related issues that may also intersect with your personal life interests. These articles discuss the federal ban on non-compete clauses, recent legislative updates in Hawai‘i that may impact you or your business, and important reasons why you should consider implementing an estate plan (or revising an outdated one). We also celebrate recent transitions in the Trusts & Estates Department and the 50th anniversary of practice of Philip J. Leas, who has dedicated a large part of his life to the practice of law and to our firm. We are grateful for his continued service. As we continue full steam ahead through the remainder of the year, we look forward to continuing to serve you to the best of our abilities.
On the Cover
Grounded in detail, building solid legal foundations.
Patricia J. McHenry was instrumental in the creation of this newsletter, acting as lead proofreader and editor.
Pōhai Nu’uhiwa Campbell assisted with drafting the forward of this issue.
Feedback?
If you have questions, or would like to see an article on a particular area of law, please let us know!
Submit feedback via email to: communications@cades.com.
Mahalo nui loa
A COMMUNITY EFFORT
We invite you to take a moment and learn about the team who contributed to this issue.
Paul M. Saito Partner
Paul is actively involved in counseling and educating business owners and human resource managers on employment law issues through the Chamber of Commerce of Hawai‘i, the Society for Human Resource Management certification programs, and the University of Hawai‘i’s Outreach College.
(808) 544-9225 psaito@cades.com
Pōhai Nu‘uhiwa Campbell Associate
Pōhai is an associate in the Trusts & Estates Department. She focuses her practice in the areas of estate planning, probate and trust administration, and trusts and estate disputes.
Mauna Kea Trask Partner
Mauna Kea is a partner in the firm’s Līhu‘e office. He practices in the areas of Environmental Law and Litigation, Land Use, Zoning, and Entitlements. Born on O‘ahu and raised on Kaua‘i, Mauna Kea is a graduate of Kamehameha Schools and a fourth-generation attorney.
(808) 521-9297 mtrask@cades.com
Emily K. Tanaka Associate
Andrea K. Ushijima Partner
Andrea practices in the areas of finance and real estate. She represents financial institutions in commercial loan transactions, and regularly advises lenders on consumer finance compliance matters. She also works on commercial real estate transactions, commercial leasing, and the nuances of Hawai‘i real estate law.
(808) 521-9350 aushijima@cades.com
Lindsay N. McAneeley Of Counsel
Lindsay is of counsel in the firm’s Honolulu office and is a member of the Litigation Department and Environmental Law Practice Group. Lindsay represents landowners, developers, major and small businesses, nonprofits, educational and financial institutions, government entities, and individuals across a wide array of legal matters.
(808) 521-9343 lmcaneeley@cades.com
Patricia J. McHenry Senior Counsel
Pat is Senior Counsel in the Litigation Department, and is the Chair of the Environmental Law Practice Group. Her practice concentrates on environmental law, lender liability, and commercial litigation.
(808) 521-9261 pmchenry@cades.com
(808) 521-9302 pcampbell@cades.com
Emily’s practice focuses on commercial lending and real estate. Her clients range from high-value residential real estate clients to businesses and lenders of affordable housing projects. (808) 521-9325 etanaka@cades.com
The FTC’s 2024 Non-Compete Ban and Recent Hawai‘i Limitations
A Guide for Employers to Protect Information
Paul M. Saito psaito@cades.com
2024 FTC REGULATIONS ON NON-COMPETE AGREEMENTS
Lindsay N. McAneeley lmcaneeley@cades.com
On April 23, 2024, the Federal Trade Commission (“FTC”) announced nationwide regulations prohibiting non-compete agreements in employment. That regulation took effect on September 4, 2024. The regulations invalidate existing non-compete agreements except for existing agreements with senior executives and prohibit employers from asking employees, including senior executives, to sign non-compete agreements. The FTC based its new regulations on evidence that non-compete agreements restrain trade. It argued that such agreements keep wages low and prevent employees from leaving because leaving may require them to relocate, take a lower-paying job, or face litigation over enforcement of the non-compete agreement. On a macro level, noncompete clauses prevent innovation, suppress new ideas, and hold back new business start-ups.
The FTC’s new regulations ban enforcement of non-compete agreements after August 2024 and prohibit employers from requiring any employee to condition their employment on a noncompete agreement. Because of employer concerns that senior executives may have agreed to a non-compete agreement for benefits unrelated to a restraint of trade, the FTC included an exception to allow such agreements to remain enforceable. The “senior executive” exception applies to executives who earn more than $151,164 annually and who have “policy-making” authority. The regulations adopted the term “executive officer” from the Security and Exchange Commission’s regulations, 17 CFR §240.3b-7, which “means its president, any vice president . . . in charge of a principal business unit, division or function (such as sales, administration or finance), any other officer who performs a policy-making function or any other person who performs similar policy-making functions . . .” Employers must apply that test to any noncompete agreements and should maintain only those for which the senior executive duties have that policy-making authority. Prior to September 4, 2024, employers will be required to notify affected employees that their noncompete agreement is being terminated.
OPPOSITION TO THE FTC REGULATIONS
Within days of the FTC’s release of its new regulations, several business organizations filed lawsuits challenging its authority to issue such broad regulations. The first lawsuit was filed within hours of the FTC’s announcement by Ryan, LLC, (a global tax services firm). That litigation was filed in the United States District Court for the Northern District of Texas and that court has since issued an injunction staying other complaints. Therefore, all plaintiffs are joining the Ryan, LLC plaintiff in that first litigation. The plaintiff employers argue that the FTC, like other federal agencies, must have specific power from Congress to address non-competes, which they claim the FTC does not have.
Conversely, the FTC referenced its specific authority to prevent restraints of trade and unfair competition–authority it claims Congress has clearly established. The court will be asked to decide if the FTC’s or the employer’s interpretation of the FTC’s authority allows it to issue the new regulations.
IMPACT OF THE FTC’S NON-COMPETE RULES IN HAWAI‘I
While the legal challenges may delay implementation of the new FTC rules, the fate of noncompete agreements appears to be written on Hawai‘i’s wall. Hawai‘i’s Legislature, in July 2015, eliminated the use of non-compete agreements for employees in technology and computerrelated jobs, and Hawai‘i’s Supreme Court in Prudential Locations, LLC v. Gagnon, 146 Hawai‘i 239 (2020) recently reminded employers that non-compete agreements can only be enforceable if they are reasonable and are no greater than needed to protect the employer’s legitimate business interests. As the Prudential Court noted, using a non-compete agreement simply to prevent an employee from competing against the employer is an unfair method of competition and is invalid. “As a general rule, . . . any contract that is in restraint of trade or commerce, is illegal. HRS § 480-4(a).”
LEVERAGING HAWAI‘I’S UNIFORM TRADE SECRETS ACT
While the FTC’s new regulations would allow a departing employee to work for a competitor or to start a competing business, an employer could require employees to maintain the confidentiality of the employer’s trade secrets through reliance on Hawai‘i’s Uniform Trade Secrets Act (“UTSA”). The UTSA can be used to prevent harm that could be caused by a former employee’s unauthorized disclosure or use of the employer’s confidential or proprietary information. Employers can use Hawai‘i’s UTSA to protect their trade secrets from being disclosed to any third-party, from a former employee disclosing it to a new employer, or from a former employee using the information to unfairly compete against a former employer.
The UTSA and Hawai‘i courts have applied the term “trade secret” broadly. The statute defines a trade secret as:
[I]nformation, including a formula, pattern, compilation, program device, method, technique, or process that: (1) Derives independent economic value, actual or potential, from not being
generally known to, and not being readily ascertainable by proper means by, other persons who can obtain economic value from its disclosure or use; and (2) Is the subject of efforts that are reasonable under the circumstances to maintain its secrecy. Haw. Rev. Stat. § 482B-2.
Hawai‘i courts have included client and customer lists/information, including past business, pricing, and discounts as well as profit margins, vendor contracts, and marketing strategies and programs as protectible trade secrets.
The UTSA allows employers to require confidentiality agreements which can prevent employees from taking, disclosing, or using an employer’s trade secrets without the employer’s authorization. It also provides for damages for misappropriating or disclosing trade secrets and discourages prospective employers from improperly obtaining a competitor’s trade secrets. So, the UTSA should be an effective tool to protect trade secrets.
NEXT STEPS FOR HAWAI‘I EMPLOYERS
Employers should review all non-compete agreements with the expectation that the FTC’s regulations may invalidate those agreements. Any agreements that would be exempt by the senior executive exception should be identified to ensure they remain enforceable. For employer confidential proprietary information and trade secrets, employers should have in place or prepare confidentiality agreements to ensure such information is protected and prevented from disclosure.
Cades Schutte can assist in either of those tasks and can help protect employer trade secrets. We will also monitor the litigation challenging the FTC’s new regulations and will provide updates.
Update: on July 3, 2024 the U.S. District Court for the Northern District of Texas granted Plaintiffs’ and PlaintiffIntervenors’ motion to stay and preliminarily enjoin the effective date of the Federal Trade Commission’s (FTC) final rule banning non-competition restrictions.
and
Lindsay N. McAneeley (Of Counsel) is a member of the Litigation Department and Environmental Law Practice Group. She represents clients in a wide array of legal matters, including environmental law and commercial litigation.
Paul M. Saito (Partner) is in the firm’s Litigation Department and represents business owners
managers on employment law issues.
CADES SCHUTTE TIMES
Philip J. Leas: 50 Years of Practice and Counting
Phil’s story began in Omaha, where he grew up with parents who had deep roots in farm life and instilled in him the values of hard work and perseverance. Determined to chart a different path, Phil became the first in his family to attend college and eventually become a lawyer.
His educational journey was marked by a series of remarkable achievements. He attended Creighton Preparatory School with a scholarship, a prestigious institution that required a rigorous entrance exam.
He graduated second in his class and continued his academic pursuits at Georgetown University, again graduating second in his class. His thirst for knowledge and legal acumen led him to Stanford Law School, where he ranked in the top third of his class and contributed to the Law Review.
Phil’s connection to Hawai‘i began serendipitously. During an era when Hawai‘i lacked a law school, mainland institutions were the primary sources for new legal talent. Phil met Cades Schutte partners Bill Swope and Doug Prior during an interview session at Stanford. Despite having a modest resume, his status as an Eagle Scout—a significant accolade for Bill Swope— caught their attention.
Initially, Phil did not receive an offer from the firm and considered an opportunity in Portland. However, upon notifying Cades Schutte of his decision, they extended an offer, inviting him to spend the summer with the firm. This summer in Hawai‘i was
transformative; Phil experienced the real-world challenges and rewards of practicing law, which left a lasting impression.
In December 1972, Phil married his wife Sheila. Phil’s positive experiences during the summer in Hawai‘i led them as newlyweds to consider the islands as their new home. When the firm made a job offer in August, Phil accepted it without hesitation.
Phil officially started his career in Hawai‘i on May 31, 1974. The practice of law then was far different from today’s digital age. Timekeeping was done manually on paper sheets, payroll processes were rudimentary, and office technology was limited to a single Xerox machine, push-button phones, mimeographs, and carbon paper for document copies. Communication was slower, often relying on letters that took a week to reach their destinations.
Phil’s path from rural Omaha to practicing law in Honolulu for over 50 years is a testament to his hard work and resilience. His story reflects the transformative power of education, the importance of seizing opportunities, and the enduring impact of early career experiences. We share some anecdotes from his current and former peers about his journey so far, and what to expect in the future.
Stories from Colleagues
I have had the pleasure of working with Phil for the past 38 years. Phil has always been one of those attorneys in our firm who always has time to take your questions and provide whatever answers or help that he can. He is a super approachable guy. He always takes things that come along with a combined sense of intellectual curiosity, pragmatism, calm, and humor.
I have especially enjoyed his humor over the years (mostly self-deprecating and never at the expense of others). It has been a privilege to be able to work with him, first as an associate and now as a fellow partner. Practicing law is a team sport. For the 38 years that I have known Phil, he has been a consummate team player. His commitment to the firm and to helping others in the firm is amazing. On my good days, I try and emulate Phil in that regard.
My most memorable experiences with Phil were outside the firm. I remember skiing with Phil at Vail many years ago. He was not the strongest skier in the world, but he was game for anything. On one of the ski days, I convinced Phil and Sherry (my wife) to ski a back bowl with me. The weather and conditions turned bad (really bad), lots of snow, visibility was minimal and the terrain was above Sherry’s and Phil’s levels. Sherry and Phil should not have been out there in those conditions. I remember Sherry cursing me all the way down the mountain (in fine Boston form) and Phil laughing in amusement the whole time. He never scolded
Philip J. Leas, Senior Counsel, Cades Schutte LLP
Continued from page 9
me a bit – maybe because Sherry was doing such a good job at it. Not that I learned my lesson. A day or so later, I took Sherry and Phil down a glade run (picture a heavily treed obstacle path) in deep snow in a back bowl. I saw other tracks on the trail that day but no other skiers. Sherry stuck with me on the run, but I managed to lose Phil. I thought he might have hit a tree or fallen into a tree well. After waiting 20 minutes for him to come out, I went back up and did that run another 2-3 times looking for Phil. Sherry waited for me at the top of the chairlift (to keep an eye out for Phil). Of course, Sherry reminded me several times how much of an idiot I was for taking them down that run in the first place. Also, back then nobody carried cell phones. Long story short, I eventually found Phil (I can’t remember exactly where). He had skied out of the trees a different way and we had just missed each other. Typical Phil, he just laughed and was ready to do it again. I said “no way” to that suggestion.
W. Keoni Shultz Partner Cades Schutte LLP
Phil has been a mentor and friend to me since I started at the firm in the summer of 1999 and I owe so much of where I am as an attorney today to Phil’s support these last 25 years. It is still amusing to me that the first pleading I signed as a newly minted attorney (and a proud native-Hawaiian) was a complaint on behalf of a long time firm client ejecting a part-Hawaiian guy from one of the client’s properties, and of course the partner on the case was Phil.
I remember one time where we missed some deadline in a case because of my mis-calendaring of something and when I walked with terror into Phil’s office expecting to get yelled at, he just sighed when I told him and then said something to the effect of, “well I guess it’s my fault for poorly training you” and we just moved on as to what to do next. I have never seen Phil panic and I have always been confident that when Phil is there, he is one of if not the smartest guy in the room. Of course Phil will sometimes let opposing counsel, or the judge, know that Phil is smarter than they are; which is not always helpful - even if it is true! The funniest experience I had with Phil was another case for the same firm’s long time client in which I had argued a couple of the previous motions in a quiet title matter and I had been the primary attorney interacting with the defendants – all of course at the directions of Phil. At the hearing where Phil argued the motion for summary judgment, defendants kept complaining about me to the judge saying “that Keoni Shultz did this . . .” and “that Keoni Shultz said that . . .” all the while they completely ignored Phil. He was having an absolute ball that I was the one they were all mad at and yelling at while he was the puppet master who had orchestrated everything.
After Don Scearce retired from the firm, it was Phil who came to me and asked if I wanted to learn the quiet title practice alongside with him so he and I could continue the firm’s work in that field. I can’t think of a better person to have learned the practice with. I am still talking with Phil almost daily about cases and strategies and I am always thankful for his thoughts and
I’ve known Phil for more than 20 years. He is my friend and mentor. Phil believes that lawyers learn by doing. He let me second chair a circuit court trial as a summer clerk. He sent me to hearings. He let me deliver the closing arguments following the evidentiary hearing on a motion for preliminary injunction. In short, he always encouraged me to be a lawyer. Phil instilled in me enthusiasm for the law and for being a lawyer. Those feelings have never waned.
Calvert G. Chipchase
Partner, Cades Schutte LLP
perspectives. I am by nature less aggressive than Phil in litigating matters and I think that he and I have always been a great team in representing our clients and advancing their goals. I will be forever thankful for his mentorship and friendship.
Cades Schutte LLP Volleyball Team in 1983
Keoni and Phil in 2017
Lori K. Wilke Partner
Cades
Schutte LLP
Back in 2004, being a young “FRED” (Finance and Real Estate Department) associate was extremely stressful. To put it mildly, we had a few demanding partners. Many associates had breakdowns when working with these partners, and some associates quit. During my early years, the associate pau hanas were mostly, “I want to quit” venting sessions. But, because I worked with Phil, I could not relate; I never felt like quitting. I was content and thriving. I am forever grateful to Phil. I learned so much from him. He encouraged me even when I screwed up. He was a patient teacher and mentor to me. He is the main reason I felt that I belonged at Cades Schutte as an associate. He’s always accepted me and my quirks without judgment.
When Phil became the “FRED” department chair, our department, from an associate’s perspective, flourished. For the first time (in my opinion), we had thoughtful and educational agendas for our monthly department meetings. Phil would spend hours and days developing our monthly agendas. I appreciated the time he took to develop our real estate knowledge. Our meetings became welcoming and informative, and our lunches changed from the same boring sandwich platters to a variety of local cuisine.
Phil loves practicing law. It’s his passion. He positively influenced me to be grateful for our work, even when under immense stress. As a young associate, I liked working at Cades Schutte because of Phil. He never made me cry.
I started working with Phil in my first week at Cades Schutte. Phil dazzled me with his ability to recall the names and reporter information for Hawai‘i cases that came up in conversation and to distill complicated issues into short questions and statements. I continue to benefit from and enjoy our mentor-mentee relationship and Phil continues to teach me how to be a Cades attorney. To provide excellent legal services, you need to know a lot and think creatively to anticipate and solve problems. Phil is exemplary at knowing and applying the law, identifying practical solutions, and training young associate attorneys to be precise and resourceful thinkers. Phil also teaches young associate attorneys how to leverage the subjectmatter experts at the firm and when an issue appears to be a matter of internal first impression the advice is often, “Ask Phil.”
Ellen R. Ashford
Phil is an invaluable source of mentorship and legal knowledge, especially for the associates at the firm. I routinely lean on Phil as a primer on the more arcane areas of Hawai‘i law and legal practice. Phil’s encyclopedic legal knowledge combined with his decades of practical experience is frequently more helpful and efficient than reading a dozen treatises. Working with Phil has also helped to refine my legal skills and ability to problem solve as a lawyer. I hope that others can benefit from his guidance and mentorship in the future.
The Honorable James Ashford
First Circuit Court
I met Phil in late December 1989, before many current Cades Schutte attorneys were even born. Because I applied to Cades Schutte as a lateral hire, I did not go through the typical interview process. Instead, I was interviewed by four partners in the FRED (now FREC, or is it FRICK?) department, with all of us sitting in the senior partner’s corner office. From my perspective, the interview seemed to go well. I was pretty confident that I had snowed three of the partners (one of whom, like Phil, is still at Cades Schutte); but I was worried that Phil was less gullible than his partners. Apparently, he was outvoted and I got the job.
I joined the FRED department and worked with Phil a fair amount at the outset. We worked together more and more as the years went by, and eventually I was fortunate to have his secretary, Momi, ask me to join their lawyer/secretary pairing. Another stroke of luck for me. Phil, Momi, and I tried, arbitrated, and argued dozens of cases together with wonderful clients who trusted Phil with their problems for good reason. I repaid Phil by introducing him to skiing, which he enjoyed in Utah, Whistler, and Lake Tahoe for
Associate, Cades Schutte LLP
Michael R. Soon Fah
Associate, Cades Schutte LLP
2010 Holiday Party (Phil and Cal)
Stories from Former Colleagues
1979 Holiday Party (Phil)
Phiilip J. Leas in the 1980’s
several years. I worked with Phil all the way to my last day at Cades Schutte in 2013.
When I started at Cades Schutte, most of the other FRED associates were a bit scared of Phil, probably because every FRED associate ended up going to trial at least once with him. I never found Phil to be intimidating, harsh, or remotely difficult to work with. To the contrary, he explained his thoughts well, made you feel like you were a part of the team and a part of the solution, and welcomed input from the associates he worked with. He taught us how to pay attention to detail. He is an excellent writer and an equally excellent editor of others’ written work. He routinely took the time to help associates with their writing and analysis. If you stopped by his office and asked for help, he uniformly would make time to answer your questions. In my view, he was the single best trainer of associates that Cades Schutte had during my 23-plus years at the firm. I am confident that no civil litigation firm in this state trains its associates as well as associates were trained in my years at Cades Schutte. The practice of law is not intuitive. To survive and thrive, a firm has to take the time and effort to nurture and train its associates, and Phil is excellent at that.
Phil’s former assistant who was paired with him for over 45 years
When coming back from maternity leave in October 1976, admin assigned me to Phil who needed a secretary. We were both young and grew together over the years to a point where we knew what each other was thinking about the work that needed to be done. It was a flawless working relationship that carried over into our families spending time together. Phil and I stayed together for 46 years before my retirement in 2023 (my daughter will be 48 this year).
Phil is a great typist and in the early years put me to shame as a new struggling secretary with little experience. He told me he typed term papers while in college to make extra money.
He was always a thoughtful and respectful leader and made sure to have work ready for me in the morning when I came in and throughout the day. What I appreciated most was that his work was very easy to understand. His writing style helped make me a better writer and gave me the confidence I needed to draft documents for him and other attorneys I worked for in later years at the firm.
Phil taught me everything I know about my work at Cades Schutte, especially litigation. He instilled confidence in me to manage repetitive tasks, prepare simple drafts, think logically, and stay ahead of deadlines by organizing processes before the deadlines arrived. The more responsibility he taught me to handle, the more I grew as a person and contributor.
Phil is a very calm person, especially in stressful situations. By staying calm, he helped me remain calm under pressure, which is important when you are working to meet deadlines. His steadiness and ability to think ahead carried on to other attorneys I worked with in the firm and helped us deal with work stress gracefully. I consider myself very lucky to have worked side by side with Phil for my entire career at Cades Schutte. He was a very great boss! Happy 50th Anniversary, Phil.
The Honorable Richard Clifton
U.S. Court of Appeals for the Ninth Circuit
I joined Cades Schutte in 1977. Phil was already there, and we met very soon after. We quickly became friends and have remained friends ever since. We worked together on projects for clients and the firm, played on the firm softball and volleyball teams, and regularly talked about things both professional and personal. Our families became friends and did a lot together, including our kids, especially when they were young. That friendship continued after I left the firm in 2002 to become a judge, and it continues to this day.
Phil is unflappable. He exudes calm, whether in court, with clients, or on the softball field. When heat builds and panic threatens to take over, Phil remains cool. He is also a strategic thinker, focused on what will matter in the end.
I tried my first jury case in federal court together with Phil in 1982. Our client operated a sugar plantation on leased land. The federal government condemned a large portion of that land. The government also acquired the crop growing on it but refused to pay a price that seemed reasonable to our client. As a result, we went to trial to establish the fair value of the crop. The jury verdict was for a value substantially higher than what the government had offered. Our client was pleased.
Trials are stressful, but Phil was calm and methodical in working through the challenges, both in getting ready and in the trial itself.
By remaining calm under pressure, keeping his eye on the ultimate goal, and maintaining focus on priorities, Phil served as a great example for me and many others.
Cades Schutte LLP Softball Team, “The Bad News Barrister’s,” in 1983
Momi’s retirement in 2023
2024 Hawaiʻi Legislative Updates
Mauna Kea Trask mtrask@cades.com
Emily K. Tanaka etanaka@cades.com
TAndrea K. Ushijima aushijima@cades.com
his legislative session, 260 bills passed and made their way to the Hawaiʻi Governor’s desk. Proposed laws include those related to landlordtenant issues, Native Hawaiian cultural preservations, the environment, and real estate development.
Cades Schutte partners Andrea K. Ushijima and Mauna Kea Trask recently presented some of the new legislation, as part of the Hawaii State Bar Association’s annual program outlining upcoming legal changes. This article provides a summary regarding some of the topics that were covered in their presentation.
Residential Landlord-Tenant Code Updates
(Act 32, SB2132 SD1 HD1 CD1, effective November 1, 2024; Act 33, SB2834 SD1 HD2 CD1, effective November 1, 2024; Act 202, HB2742 HD1 SD2 CD1, generally effective on the expiration of the final eviction moratorium relating to the Lahaina wildfires)
Act 32 amends the Hawai‘i Residential Landlord-Tenant Code to clarify that landlords have seven calendar days to repair health and safety violations. The landlord must notify the tenant if the repairs cannot be completed within this timeframe, and a tenant who performs the work because of a landlord’s failure to timely comply shall have the right to deduct up to the greater of $1,000 or one months’ rent for the tenant’s actual expenditures.
Act 33 permits a tenant to designate, as part of the rental agreement or other written agreement, a representative authorized to collect or dispose of the tenant’s personal belongings after the tenant’s death. The new law addresses who a landlord should notify in the absence of a written designation by the tenant, as well as how to handle the tenant’s personal property if no representative comes forward.
Act 202 requires pre-litigation mediation for tenancies subject to the eviction moratorium issued under the Governor’s emergency proclamations relating to the Lahaina wildfires. The emergency proclamation applies broadly to tenancies in Maui. Act 202 sunsets on December 31, 2026, or on the one-year anniversary of the expiration of the Governor’s final emergency proclamation relating to the wildfires, whichever occurs first.
C-PACER: Commercial Loans for Green Infrastructure Improvements
(Act 41, HB2801 HD1 SD1 CD1, effective July 1, 2024)
As of 2022, commercial property owners seeking financing for renewable energy improvements, cesspool conversions, fire protection measures, or resilience improvements are eligible for C-PACER loans. Under the C-PACER program, the lender enters into a C-PACER contract with the property owner and Hawai‘i Green Infrastructure Authority (“HGIA”) to finance or refinance qualifying improvements. Because C-PACER loans have the super-priority of a government lien, the borrower must obtain the consent of all existing holders of mortgages on the property. The C-PACER
contract, or a short form thereof, is recorded against title to the property. Act 41 adds that condominium associations are eligible for C-PACER financing, and delegates administrative responsibilities to the HGIA.
Accessory Dwelling Units in Residential Zoned Lots and Restrictions on Private Covenants
(Act 039, SB 3202, effective May 28, 2024)
SB 3202 requires the counties, no later than December 31, 2026, to adopt or amend an ordinance to allow at least two accessory dwelling units, on all residentially zoned lots, subject to certain restrictions. The Act also prohibits private covenants, such as CC&Rs, for residentially zoned lots within an urban district from: (a) limiting the number of accessory dwelling units below the amount allowed pursuant to State law; and (b) restricting the long-term rental of residential units (however, this prohibition does not apply to private covenants recorded before May 28, 2024). The new law also requires any administrative authority to act on any application for subdivision, consolidation, or resubdivision for certain parcels to be vested in the director of the county agency responsible for land use or another county officer and amends the calculation of impact fees for certain developments.
Burials and Archaeological Sites on Private Property
(Act 119; SB2591 SD2 HD1 CD1 (CCR 111-24), effective upon approval, June 28, 2024)
SB2591 imposes a fine on any private landowner that fails to disclose or record with the Bureau of Conveyances, or in documents used to offer real property for sale, the existence of burial or archaeological sites on their property that the landowner knew or should have known of. It requires fines collected to be deposited into the Hawaiʻi Historic Preservation Special Fund.
Regulation of Archaeological Activities
(Act 129; SB3154 SD1 HD1 CD1 (CCR 24-24), effective June 28, 2024)
SB3154 clarifies that failure to comply with approved mitigation commitments, conduct an archaeological inventory survey, or comply with other administrative requirements pertaining to archaeology approved by the Department of Land and Natural Resources shall result in civil and administrative violations.
Mauna Kea Trask (Partner) is a partner in the firm’s Līhu‘e office. He practices in the areas of Environmental Law and Litigation, Land Use, Zoning, and Entitlements.
Andrea K. Ushijima (Partner) leverages her background in business and technology, and experience in regulatory matters, to help clients achieve their business objectives.
Emily K. Tanaka (Associate) has a practice focusing on commercial lending and real estate. Her clients range from high value residential real estate clients to businesses and lenders of affordable housing projects.
10 REASONS WHY ESTATE PLANNING SHOULD BE A TOP PRIORITY
Pōhai Nu‘uhiwa Campbell pcampbell@cades.com
Estate planning is something that we all know we should do, but it is a task that is easy to set aside and push to the bottom of the to-do list as part of life’s ever-growing responsibilities. If you need a little motivation to begin the estate planning process, or need a reminder to review your current estate plan to determine if changes are needed, look no further. Here are 10 reasons why estate planning should be a top priority:
1. Maintaining Control
One of the main reasons, if not the main reason, to make your estate plan a priority now is because you can. While you are alive and have capacity, you can make a solid plan to establish your wishes so that they are carried out in the future. Documents like a trust, will, power of attorney, and advance health care directive are important to provide guidance to your agents so that your wishes are fulfilled when you are not able to manage your finances or health care decisions yourself. The bottom line is that by the time you really need estate planning, it is often too late. The best time to take care of your estate plan is now.
2. Maintaining Privacy
Privacy, even after death, is a top priority for many. If you have a will, your estate will likely go through a probate court process where information about your assets, beneficiaries, and transactions may be available to the public. In contrast, if you have a trust and your assets are owned by your trust, your estate may not have to go through this public court process, and your information will remain private. Even if you have a trust, it is important to ensure that your property is appropriately titled so that the probate process can be avoided.
3. Peace of Mind
Health is wealth, especially mental health. Without a solid estate plan, many worry about what will happen to their assets after they pass, and importantly, if their loved ones will be cared for. Once a comprehensive estate plan is established, almost all of our clients share that a weight is lifted off their shoulders, and that they are comforted knowing that there is a plan in place, even for the worst-case scenarios. This intangible benefit of calm and comfort can also extend to a client’s family as well. For many of our clients’ children, the knowledge that their parents have their affairs in order (even if they do not know the specifics), helps put them at ease and can help to avoid any potential future disputes.
4. Your Children Are Depending on You
Having children can change your life in many ways. Minor children and children with special needs are especially reliant on their parents to provide for their care, manage assets to provide for their needs, and make decisions in their best interest. Estate plans can be designed and tailored to address your specific situation, and importantly allow you to designate trusted individuals to act as agents in your place and care for your children if you are unable. It is imperative to designate these agents in your estate planning documents so that a court appointment of an agent can be avoided.
5. Protecting Your Beneficiaries
In addition to designating the beneficiaries of your assets, estate planning allows you to plan ahead to protect your beneficiaries (even adult beneficiaries) from challenging circumstances. In some instances, you can protect your beneficiaries from bad decisions, improper outside influences, creditors, or even their own spouse and family members. For example, instead of giving an asset outright to a beneficiary at your passing, you could instead choose to hold that asset in further trust to be managed by a trustee for the benefit of such beneficiary, with distributions made to the beneficiary upon the satisfaction of certain requirements, such as attaining a certain age or being chemically clean and gainfully occupied.
6. Addressing Change
The recent pandemic taught us that nothing should be taken for granted and sometimes, in an instant, everything can change. An estate plan should be revisited and maintained over time to reflect current and changed circumstances. Significant life events can serve as a beacon or reminder to review an estate plan to ensure that it accurately reflects your wishes. For example, a marriage or divorce, the birth of a child or the maturation of a minor child into adulthood, or a death, may signal that a review of an estate plan is needed.
7. Doing Good in Our Community
Our community has experienced multiple events in recent years, many unprecedented, which have greatly impacted people in Hawai’i and beyond. In addition to providing for family members and loved ones, clients often have a philanthropic desire to give back to our community to leave it better for generations to come. A thoughtfully executed estate plan is a wonderful way for you to leave a legacy while supporting non-profit organizations and foundations, and may also result in potential estate tax benefits.
8. Taking Care of Your Pets!
Did you know that Hawai’i law recognizes pet trusts? A pet trust is a trust that is specifically designed to benefit and provide care for your pet. A beloved pet is an integral part of a family, and your estate plan can be tailored to ensure that your pet (and any caregivers for your pet) are cared for throughout a pet’s lifetime. If this is a priority for you, once your estate plan is in place, you can rest easy knowing that your pet will be in good hands.
9. Setting Up Your Business for Success
The Hawai‘i business community is unique and often family-driven, and if you have a successful business, it is very likely that you have worked incredibly hard to achieve that. Business succession planning is often overlooked and making sure that a succession plan is in place that aligns with your estate plan is essential. The right estate planning will ensure that the treatment of your business at either your incapacity or death is handled properly and seamlessly so that your business will be able to continue to prosper.
10. Minimize Estate Taxes
No one wants to pay taxes, especially taxes due at death, and the desire to minimize a tax burden can be an important reason to establish an estate plan. The current Hawai‘i estate tax threshold is $5.49 million per individual, and the federal estate tax threshold is $13.61 million per individual. The current federal estate tax exemption amount is currently set to sunset at the end of 2025, at which time the threshold will
be reduced to an estimated $7 million. While it is possible that the federal estate tax laws may be modified, the currently anticipated change may affect your estate and gifting plans, and it may be a good time to review your estate planning documents to determine if any revisions are needed.
Pōhai Nu‘uhiwa Campbell (Associate) is in the Trusts & Estates Department. She focuses her practice in the areas of estate planning, probate and trust administration, and trusts and estate disputes.
Cades Schutte Trusts & Estates Department Chair
Rhonda L. Griswold will transition to Senior Counsel in 2025. She introduces incoming Chair Summer G. Shelverton and highlights the full capabilities of the team.
In 2024, Rhonda L. Griswold, Chair of Cades Schutte LLP’s Trusts & Estates Department, celebrates 40 years of practice. Rhonda has made a significant impact both within the firm and the broader legal community. She has served on Cades Schutte’s Management Committee and was President of the Hawaii State Bar Association (HSBA) in 2023.
Rhonda’s practice covers all facets of trusts and estates law. She has represented thousands of clients, ranging from small local business owners to high-net-worth individuals. Recently, she participated in to the Drafting Committee for Hawai‘i’s new Uniform Trust Code, influencing state laws.
Rhonda’s transition to Senior Counsel also marks a key moment in the firm’s succession plan as her colleagues prepare to continue serving the firm’s clients.
Summer G. Shelverton, Partner, will assume the role of Department Chair in 2025. Summer specializes in estate planning, probate and trust administration, conservatorship and guardianship proceedings, and trust and estate disputes. Like Rhonda, she was involved in drafting Hawai‘i’s Uniform Trust Code and is a Fellow of The American College of Trust and Estate Counsel (ACTEC).
Daniel C. Vermillion, Partner, brings extensive experience in complex tax planning. He advises clients on trust administration and estate settlement, focusing on both revocable and irrevocable estate planning strategies to ensure smooth generational transitions. He is currently Vice President of the Hawai‘i Estate Planning Council.
Pōhai Nu‘uhiwa Campbell, Associate, concentrates on estate planning, probate and trust administration, conservatorship and guardianship proceedings, and trust and estate disputes. She was a fellow of the HSBA’s Leadership Institute and serves on the boards of the Hawai‘i Estate Planning Council and HSBA Probate and Estate Planning section.
Caitlin M. Moon, Associate, advises clients on estate planning, probate and trust administration, and conservatorship and guardianship proceedings, as well as trust and estate disputes. She has chaired the Elder Law Section of the HSBA and participated as a Fellow in its Leadership Institute in 2023. Caitlin is also recognized for her pro bono work, having been honored by Volunteer Legal Services Hawai‘i twice.
Janine M. Yim, Associate, advises clients on estate planning, probate and trust administration, and conservatorship and guardianship proceedings, with an emphasis on trust and estate disputes. She currently serves as Chair of the HSBA’s Elder Law Section.
Recent Wins
Cades Schutte LLP Attorneys Recognized for Top Tier Legal Work
• The 2024 Chambers and Partners USA Guide awarded Cades Schutte Band 1 or 2 rankings in eight practice areas: Bankruptcy/Restructuring, Corporate/ Commercial, Employee Benefits & Executive Compensation, Environment, Labor & Employment, Litigation: General Commercial, Real Estate, and Tax. 26 attorneys were ranked within these practice areas.
• Cades Schutte’s Trusts & Estates team and Partner Rhonda L. Griswold were named Band 1 in Private Wealth Law in Hawai‘i once again in the 2024 Chambers and Partners High Net Wealth Guide. Summer G. Shelverton and Daniel C. Vermillion also maintained their individual rankings in Band 2.
• 62 Cades Schutte attorneys were recognized in 51 practices for Hawai’i in the 2025 results for The Best Lawyers in America® and Best Lawyers Ones to Watch® in America. In addition, three attorneys were named “Lawyer of the Year”: David F. E. Banks (Corporate Law), C. Michael Heihre (Construction Law), and Trisha L. Nishimoto (Litigation – Insurance).
• 16 Cades Schutte attorneys were selected to the 2024 Super Lawyers® and Super Lawyers Rising Stars lists. In particular, David F. E. Banks (Partner, Chair of Corporate/Employment Law & Labor Relations), Calvert G. Chipchase (Partner, Litigation), and Kelly G. LaPorte (Partner, Chair of Litigation) have now been recognized for over ten years.
• Pacific Business News named Cades Schutte LLP first by number of attorneys in its annual Top Hawai’i Labor and Employment Law Firms list.
• Cades Schutte LLP was the only Hawai‘i law firm to be recognized in Vault’s 2025 Top 150 Under 150, a list of leading small and midsize law firms with 150 lawyers or fewer. Vault created this list to recognize outstanding small and midsize law firms that deliver big results.
• Cades Schutte LLP was recognized in The NLJ 500, the ranking of the nation’s 500 largest firms based on headcount. Published annually in collaboration with the Law.com Compass and The National Law Journal editorial team, this report offers data on where and how the country’s largest law firms are expanding or contracting.
University of Hawai‘i William S. Richardson School of Law Outstanding Alumni Award
W. Keoni Shultz received an Outstanding Alumni Award at the University of Hawai‘i William S. Richardson School of Law’s 50th Anniversary Gala.
Hawaii Business Magazine Emerging Legal Stars
Nathan C. Yang, Pōhai Nu’uhiwa Campbell, Jarrett A. Dempsey and Caitlin M. Moon were named Emerging Legal Stars by Hawaii Business Magazine in its most recent recognition of attorneys with ten years of practice or less in Hawai‘i’s legal community.
Volunteer Legal Services Hawai‘i (VLSH) Kahiau Award
Caitlin M. Moon received VLSH’s Kahiau Award at the organization’s annual Taste of Justice event for the pro bono estate planning work she is doing with VLSH.
Cades Schutte Secures Victory for EC Paia in Landmark Maui Land Contract Dispute
Cades Schutte LLP obtained a significant legal victory for its client, EC Paia, in a complex land contract dispute involving 330 acres in Paia on Maui that was ongoing for several years. The trial team was led by Calvert G. Chipchase and also included Lisa K. Swartzfager, Lindsay N. McAneeley, and Darene K. Matsuoka.
Major Legal Victory for Vertical Association International: Hawai‘i’s State Law Overturned on Preemption Grounds
Cades Schutte LLP partners Calvert G. Chipchase and Lisa K. Swartzfager achieved a significant victory for their client, Vertical Association International, f/k/a Helicopter Association International (VAI), in a high-profile litigation to invalidate a state statute which required VAI to provide monthly reporting to address considerations regarding noise, safety, and community disruption.
Cades Schutte LLP Advises Areté Collective in $43 Million Land Acquisition from Blackstone
A multi-practice Cades Schutte team recently advised Areté Collective in its acquisition of 65 acres from Blackstone Real Estate for $43 million on the North Shore of O‘ahu. The land is adjacent to and part of Blackstone Real Estate’s larger sale, totaling $768 million of the Turtle Bay Resort. Calvert G. Chipchase and Christopher T. Harrison led the team which included David F. E. Banks, Cheryl L.M.T. Itagaki, Rick Kiefer, Ryan M. Wilson, Nathan C. Yang, Gabriel F. Gorman, Keola R. Whittaker, and Reyn S.P. Ono
Team Updates
Senior Counsel Grace Nihei Kido, a former member of the firm’s Management Committee who practiced with the firm for nearly 40 years, celebrated her retirement earlier this year. The Cades Schutte team would like to thank her for her time at the firm and wish her luck.
On the Board
Trisha L. Nishimoto was selected as part of the 2024 Class for the American Board of Trial Advocates (ABOTA) National Trial College. The Trial College is a week-long program designed for young lawyers looking to hone their trial experience, and is highly selective, Trisha was one of 35 participants out of thousands of applicants.
Partner Jeffrey M. Osterkamp started his four-year term as a commissioner on the Hawai‘i Elections Commission. The Commission is charged with overseeing Hawai‘i’s elections and he is one of two members from O‘ahu on the nine-person Commission.
Partner Jeffrey S. Portnoy was elected as Board Chair for the Ninth Judicial Circuit Historical Society, which was established to preserve and educate about the vibrant legal history of the West and the vital importance of an independent judiciary. Jeff is also acting as President of the Board for Manoa Valley Theatre, “Honolulu’s Off-Broadway Playhouse,” as of July 2024.
Cades
attorneys recognized by the 2024 Chambers and Partners Guides.
Schutte
Cades Schutte Building
1000 Bishop Street, Suite 1200
Honolulu, Hawai‘i 96813
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