A vigil in 2018 for victims and survivors of the mass shooting in Las Vegas. Photo / AP
A vigil in 2018 for victims and survivors of the mass shooting in Las Vegas. Photo / AP
The settlement would resolve claims that MGM was negligent in allowing the killer to stockpile weapons and ammunition at its Mandalay Bay hotel.
The company that owns a Las Vegas hotel where a gunman opened fire from his room onto a country music festival two years ago, killing 58 andwounding hundreds of others, agreed Thursday to pay up to $800 million ($1.2 billion) to settle lawsuits filed by victims.
MGM Resorts International, which owns the Mandalay Bay hotel where the killer rented a room on the 32nd floor and stockpiled a cache of weapons, announced the settlement, ending litigation that had become a closely watched test case about liability in mass shootings.
The killer, Stephen Paddock, holed up inside his room and fired into the crowd of thousands of music fans as the night's final concert began. It was the deadliest mass shooting in modern American history.
Thursday's settlement appears to resolve litigation that had raised novel and significant issues of law, including how much liability large companies and property owners could face after a mass-casualty attack.
While there is often litigation after mass shootings — such as lawsuits that parents filed against the companies that manufactured and sold the semi-automatic rifle used in the 2012 massacre at an elementary school in Newtown, Connecticut — legal experts said the scope and nature of the litigation and the legal issues raised in the MGM case were without precedent.
Faced with potentially hundreds of lawsuits, MGM sued more than 1,000 victims in July 2018, in an aggressive but untested strategy to short-circuit the cases and shield itself from liability.
Robert Eglet, one of the lawyers for the victims, said Thursday that the settlement would be in the range of $735 million ($1.1 billion) to $800 million ($1.2 billion) and would cover "substantially all" of the lawsuits and claims against MGM related to the massacre.
"While nothing will be able to bring back the lives lost or undo the horrors so many suffered on that day, this settlement will provide fair compensation for thousands of victims and their families," Eglet said in a statement, adding that the deal "represents good corporate citizenship on" the part of MGM.
Another lawyer for the plaintiffs, Craig Eiland, said that the settlement was expected to cover up to 4,500 people, which he said would include everything "from death cases all the way down to those who had PTSD."
Mourners gather in Las Vegas on October 4, 2017, at a makeshift memorial to victims of the mass shooting. Photo / Eric Thayer, The New York Times
Passing the two-year statute of limitations for filing new claims — which happened this week — was critical to completing the settlement, Eiland added.
Depending on the settlement's final cost, all of the money paid to the victims, or nearly all of it, will come from MGM's insurers. The company's coverage limit for this case was US$751 million, so the most MGM will have to pay would be US$49 million.
An independent claims administrator, who will need to be approved by a judge, will review medical bills and other expenses, as well as the circumstances of each victim, before deciding how much each will receive.
On Thursday, MGM's chief executive, Jim Murren, called the agreement "a major step, and one that we hoped for a long time would be possible. We have always believed that prolonged litigation around these matters is in no one's best interest."
At first, MGM responded with a hardball legal strategy when claims poured in from the injured and the relatives of the dead, who accused the company of negligence in allowing Paddock to stockpile high-powered rifles and thousands of rounds of ammunition in his hotel room.
It had sought to block victims from recovering any money from the company, arguing that a little-known federal law passed in the aftermath of the September 11, 2001, attacks meant that MGM enjoyed a shield from liability because the shooting qualified as an "act of terrorism" under that federal law's expansive definitions.
Because of that — and also because a security firm hired for the music festival possessed a special designation from the Department of Homeland Security — MGM argued that its interpretation of the law meant that it should not have to pay damage claims to injured concertgoers.
The federal law is known as the Support Antiterrorism by Fostering Effective Technologies Act, or SAFETY Act. It was believed to be the first time that anyone had sought to use the law this way to defend lawsuit claims in the aftermath of a major mass shooting.
Last October, however, a panel of federal judges denied MGM's attempt to consolidate the cases in one court, saying that because "the contours of this litigation are not yet apparent, centralization is inappropriate." The question of whether the Safety Act shielded MGM from liability was never decided.
By February the two sides were in mediation, and by May, the rough outlines of the settlement had already been worked out.
