The Background
Almost two years ago to the day, the deadliest mass shooting in American history took place in Las Vegas. 58 people were killed and hundreds wounded (1). The setting was a country music festival, Route 91 Harvest Country, located on the Vegas strip directly across the street from the Mandalay Bay casino. On October 1, 2017, Stephen Paddock opened fire from the 32nd floor of the casino and shot randomly into the festival crowd.The MGM Grand, owner of both the festival’s land and the Mandalay Bay hotel, immediately began receiving lawsuits.
MGM’s reaction to the lawsuits was both surprising and aggressive. Under Article III of the Constitution and Rule 57 of the FRCP, they filed a Complaint for Declaratory Relief against the victims that were suing them (2).
On what basis?
MGM’s pre-emptive strike was based on a statute from 2002 that had never before been litigated called the Support Anti-Terrorism by Fostering Effective Technologies Act or SAFETY Act (3). The law was created in the aftermath of September 11th to put damages caps on products and services designed to protect American citizens including things like cybersecurity measures and airport security equipment. The Department of Homeland Security decided who qualified for the list and therefore who would receive these protections.
The security company organization for the Route 91 Harvest Country music festival was CSC and they were on this specific list. MGM argued that the CSC should be held liable for the shooting because it was a terrorist attack and the Department of Homeland Security endorsed the CSC. In short, MGM argued that the shooting should be covered under the SAFETY act.
Other than garnering some very bad press (4) MGM did not receive a minimized risk of litigation. Also, the Department of Homeland Security has still never declared the shooting an actual “terrorist” event. It was estimated that the litigation between MGM and the victims’ families would take an approximate 15 years (5).
Conclusion
As a result, MGM entered mediation with the victims families. Eight months later, a settlement was reached awarding $751 million dollars to the victims’ fund, the third- largest payout next to the September 11th fund and BP Oil. MGM’s insurance will cover the cost. Payouts are expected to begin in May 2020.(6) It has been only two years since the shooting, making this one of the fastest settlements for a victims fund in modern American history (7).
Questions
Do you believe MGM is at fault? Who should be held responsible for a victims fund? Do you think the same outcome in mediation would have happened without MGM’s aggressive first move?
Sources
- https://www.law.com/natioallawjournal2018/12/26/mgms-fight-for-safety-act-protection-paused/
- MGM Resorts International v. Acosta, No. 2:18-cv-01288 (D. Nev. filed Jan. 2, 2019).
- https://www.safetyact.gov/
- www.abajournal.com/news/article/mgm_resorts_uses_an_obscure_law_to_sue_las_vegas_mass_shooting_victims
- https://www.inc.com/minda-zetlin/mgm-resorts-sues-victims-of-las-vegas-shooting
- lexology.com/library/detail.aspx?g=c94c1815-673f-491e-95c0-8c42503f76ce
- https://www.economist.com/democracy-in-america/2019/10/07/mgm-settles-with-the-victims-of-the-las-vegas-mass-shooting
Very tragic incident caused by a psycho individual. A good friend's sister was an unfortunate death in this senseless killing. In today's society, these are the types of liabilities that big businesses will continue to have to overcome. When inviting the general public onto the property and into their events, then consequently the business has a duty to protect it's patrons. Property and casualty type insurances policies will continue to be written and revised to protect against such events. I do think MGM and policy underwriters have to shoulder the liability since it occurred on property owned by them. Unfortunately, the firearms were transported through their facility under extreme video scrutiny and security personnel. It is virtually impossible to create a system that is one hundred percent secure against mass casualty situations. The amount of revenue generated and technology within their structures should have reasonable defenses to protect customers. Do they have security personnel with bomb sniffing dogs, bullet proof exterior glass or other attempts to keep patrons safe while being entertained? I do believe MGM had to take a proactive stance for a resolution due to the high profile of the case under the watchful eyes of the world. This settlement was about mitigating losses, press and avoiding lengthy legal processes. A victim's fund should be initially funded by the party who assumed liability or potentially an endorsement to the insurance policy for coverage of mass casualty damages and recovery. These types of ignorant expressions will continue to be an issue with public safety. Mediation was a favorable dispute alternative to keep good faith with the public and patrons. A difficult and nasty court battle could have potentially cost exponentially more by damage from bad press and lack of compassion for injured and departed.
ReplyDeleteWhen i first heard of the lawsuit details I have gone back and fourth d=several times on it. I tend to believe to not hold MGM at fault as it was done by one man and he should be the one responsible. Obviously no form of justice can come from him. But Should MGM/mandaly bay be held responsible? I say partially. My concern with holding them responsible is the fact is how much can they really do to prevent it. There was security but how much security is needed and is there a point where we get so secure we give up our freedoms. Did they have enough reasonable security? Could they have done more sure but is it resonable for them to do such. I think they do have some propoortion of blame but i tend to not find them at fault.
ReplyDeleteI think the insurance of the hotel and the concert organizers should be responsible for the victim fund.
I think the agressive first move was wise for MGM. Taking out the emotion and distate of thier action they had to know they would be sued and they had to protect themselves for good or bad. By suing first and taking the PR hit short term it problably forced mediation and causing the lawsuit and future lawsuits to quickly be finished falling out of the media and public eye faster then a longer drawn out lawsuit.
I agree with you Ethan. For all of the bad press MGM received for their actions, nobody is talking about that now. Everybody is focused on the award.
ReplyDeleteMost people ultimately acknowledge restitution payments in tragic events no matter what the amount cannot conceivably restore what is lost. Defining the percentage of fault in situations such as this are arbitrary at best.
ReplyDeleteWhile the portion of MGM’s liability is arguable based on basic hotel security measures, hiring a reputable security firm for the concert, and recognition that this heinous act was ultimately the perpetrator’s responsibility, MGM’s insurance policy should be utilized as part of a victims’ payout. One purpose of insurance is for uncertain loss. This situation definitely qualifies as “uncertain”. (1) I believe today there is a demanded expectation that someone, some business, some organization should always be responsible for the unexpected, unpredictable, unforeseen events of twisted individuals. While having some place or someone to set blame on seems to belie some sense of cathartic relief and justice, ultimately, no one person, business, or government can anticipate nor prepare for all the insidious actions of others. Nonetheless, that does not alleviate the responsibility to try in good faith for prevention. However, answering the question of who should be responsible for a victims’ fund is laborious at best and that net can erroneously be cast far and wide. MGM’s initial aggressive move ultimately seems to have served them well despite the initial public relations backlash. For the victims, swiftly settling the bulk of claims in alternative dispute resolution appears beneficial and should be a model for future mass tragic incidents. Victims' needs are better served through early restitution payments. Receiving funds for services and needs years after lengthy court only exacerbate those needs and issues.
Mandatory victims’ fund for restitution in criminal cases was modified by Congress in 1996. (2) The timing of this bill followed one of the worst acts of terrorism against the United States following the federal bombing in Oklahoma City. With the Vegas shooter dead and with it his intent, the categorization of his actions may sit in limbo as to whether or not it will receive official terrorism designation. However, I am sure those touched in anyway by these incidents may already define it as terrorism as the terror elicited on that day is not specific to categorical definitions. If MGM had negligence, it was not criminal but the expectation for restitution in egregious cases, civil and criminal, is becoming a part of the mental lexicon of expectations. MGM needed to participate in restitution in some meaningful way commensurate to their financial stature to maintain moral and business expectations.
In addition, to assuaging loss through monetary payout, perhaps victims’ funds are not just about the money payouts but include an avenue where victims emotional and mental restitution is addressed with opportunities to participate in processes and decisions on future decisions to mitigate these types of tragic events. As companies and governments consider variables from mental health, security measures, licensing, insurance issues, response measures, etc., by including victims and their perspectives about how to approach these issues by giving victims a meaningful role for participation, it may restore some victim’s sense of something lost in an intangible way that reaches beyond monetary payout. Public-private coalitions used in authentic ways may meet victims’ needs in ways that are not easily quantifiable but address emotional and psychological impacts in a way money cannot. Each tragic event teaches additional and important lessons for responding to future events and expands the knowledge base for better assisting victims unfortunately impacted by the malevolence of others.
1 - https://www.nibusinessinfo.co.uk/content/purpose-business-insurance
2 - https://www.congress.gov/bill/104th-congress/house-bill/665