(BIVN) – On November 19, the Hawaiʻi County Council Finance Committee heard the latest from Corporation Counsel on the case of Patricia Nakamoto and Shyla M. Ayau vs. former county clerk Jamae Kawauchi, former Council Chair Dominic Yagong, and Corporate Specialized Intelligence and Investigations, LLC.

Yagong, who is no longer a public official, was in the audience to hear the brief presentation.

The case, which dates back to the year 2012, has gone to the Hawaiʻi Supreme Court. Oral Arguments were presented on Tuesday, October 17. The high court provided this brief description of the case:

Petitioners/Plaintiffs-Appellants Patricia Nakamoto and Shyla M. Ayau (Petitioners) applied for writ of certiorari from the Intermediate Court of Appeals’ (ICA) May 9, 2017 Judgment, entered pursuant to its March 14, 2017 Memorandum Opinion, which affirmed the Circuit Court of the Third Circuit’s (circuit court) judgment against Petitioners.

This case arises out of an incident in which Petitioners and other employees of the County of Hawaiʻi were terminated from their employment following an investigation. An article was published in a local newspaper regarding the terminations, which quoted County officials Jamae Kawauchi and Dominic Yagong as stating that the firings were due to violation of County policy.

Petitioners brought suit against the County, Kawauchi and Yagong in both their official and individual capacities, and Corporate Specialized Intelligence and Investigations, LLC (CSII), which the County hired to conduct the investigation. Petitioners alleged that the defendants had caused defamatory statements about them to be published in the local newspaper and elsewhere, and that the investigation had been conducted negligently.

The circuit court dismissed Petitioners’s claims holding that defamation claims are barred by the Workers’ Compensation Law (WCL), HRS Chapter 386, and that CSII as a third-party investigator owed no duty to Petitioners. Petitioners appealed to the ICA, arguing that the WCL does not bar claims based on injuries to a person’s reputation, and that CSII owed them a duty of care. The ICA affirmed the circuit court’s judgment.

Petitioners’ application for writ of certiorari raises three questions:

A. Did the ICA commit grave error by extending workers’ compensation exclusivity to injuries involving a person’s reputation?

B. Did the ICA commit grave error by determining the “truth” of disputed facts which was a question for the jury?

C. Did the ICA commit grave error by holding that no duty exists to conduct an objective investigation in support of employee discipline for public sector employees?

According to Deputy Corporation Counsel Laureen Martin, “two separate lawsuits were filed – one by Patricia Nakamoto and one by Shyla Ayau – though they were later consolidated into a single lawsuit. The county filed motions to dismiss in those cases based upon the workers compensation exclusivity bar, which were granted. The remaining defendants had motions for summary judgment which were granted. The plaintiffs appealed the case that went up to the ICA which affirmed and then the Hawaiʻi Supreme Court heard the case and reversed in part. They reversed the claims against the county, only as to the defamation of false light claims, ruling that workers compensation did not bar those claims. They also reversed the claim against the investigator CSII finding that there was a duty owed to the plaintiffs, and so now the case is back at the trial court level and currently pending in mediation.”

“So workers compensation prevents employees from suing their employer for injuries that arise out of the course and scope of their employment,” Martin explained. “So it’s very clear that, as you can imagine, like a simple injury – if somebody falls at work that kind of thing – is clearly barred. They can’t sue their employer for that injury. Instead they get the bundle of workers compensation benefits. So in this case, some of the plaintiffs’ claims were barred, clearly barred, even after the Hawaiʻi Supreme Court decisions – such as negligent infliction of emotional distress. That claim was barred. But the court found that the defamation claim and the false light claims were not barred.”

“So in that case I mean is it somewhat of a landmark decision?” asked councilmember Aaron Chung.

“Yes, in the sense that there was previous decisions by the Intermediate Court of Appeals that did bar those types of claims based upon workers compensation, so the Hawaiʻi Supreme Court reversed those decisions,” Martin said.

“Now as this thing develops,” Chung said, “I’m assuming since it is going back to the trial court, more things will be developing over the next several months. And then we’d like to be kept abreast of it periodically if that’s okay.”