Lawyers urge review of settlement offers in Station case

 PROVIDENCE — Lawyers representing victims of the Station nightclub fire are asking a federal judge to set up a timetable for reviewing the proposed settlements that have been offered by the dozens of parties sued by those who lost loved ones or suffered injuries in the 2003 blaze.

 

In papers filed yesterday afternoon in U.S. District Court, lawyers for the fire victims asked Senior U.S. District Judge Ronald R. Lagueux to establish scheduling orders so their clients can get money from the proposed settlements as quickly as possible.

They say that by Oct. 15, they would like to submit for the court’s review a grid for distribution of the settlement proceeds that has been created by Duke University law Prof. Francis E. McGovern, whom Lagueux has appointed as special master in the fire case.

 

Lawyers for the fire victims say it is important to speed up the settlement review process because many of the fire victims are facing “serious, indeed critical, financial needs.” Each month of delay in finalizing the proposed settlement agreements means that there will be a “loss of substantial interest” that could be accruing on the settlement funds, they assert.

 

On Monday, lawyers for the fire victims finalized the last of a raft of tentative settlement agreements that have been reached in the mass tort case –– all of which must be approved by each of the fire victims and by Lagueux. All together, more than $176 million has been offered to those hurt or who lost family members in the fire.

 

The fire killed 100 people and injured more than 200 others. It began when sparks from fireworks set off by the rock band Great White ignited highly flammable polyurethane foam that the owners of the club had installed as soundproofing.

The wood-frame building on Cowesett Avenue in West Warwick was a deathtrap, awash in building and fire-code violations, when it filled with flames and toxic smoke the night of Feb. 20, 2003, according to prosecutors and the victims’ lawyers. The overcrowded club became engulfed within three minutes; many of those who died were caught in a stampede for the door. The nightclub had no sprinklers.

It is unclear at this point how much of the settlement proceeds will go to the victims’ lawyers, who have been working for several years on the case on a contingency basis, and how much will remain for distribution to the victims. The special master is working for free but his expenses will be covered from the settlement proceeds.

 

In the court papers filed yesterday, lawyers for the victims say that McGovern has had more than 20 meetings with the fire victims and has spoken in person with 236 plaintiffs, family members and their lawyers. He has also met alone with the victims’ lawyers and has had telephone conversations with the victims who could not attend the meetings, the court papers say. “All plaintiffs and their attorneys were given an opportunity to comment on possible allocation methodologies,” the lawyers say. They assert that the allocation plan that McGovern has devised “maintains a unified approach” and “is efficient, inexpensive and fair.”

 

McGovern has not responded to repeated requests for interviews –– and the plaintiffs’ lawyers have declined to provide details of the allocation plan to date –– so it is unknown exactly what the special master plans to propose.

But the fire victims, in letters from their lawyers, have been told that for the victims who died, McGovern’s grid will consist of “a point system” that will factor in such things as the victim’s age, marital status, education, number and ages of children and annual income.

 

As for the victims who suffered physical and/or psychological injuries, the amounts will probably vary, based on the severity of injury, days of hospitalization and amount of unreimbursed medical bills, predicted Kenneth R. Feinberg, who served as special master in the taxpayer-financed 9/11 Compensation Fund and more recently for the compensation fund set up for the Virginia Tech shootings.

 

In a hearing before Lagueux last November, Providence lawyer Mark Mandell, who represents more than 100 of the fire victims, told the court that McGovern would review each person’s medical records and treatment received for both the living and the dead, consider the number of surgeries, percentage of body burns, length of hospitalization and whether he or she suffered first- , second- , or third-degree burns. He’ll develop “categories of injuries” and “severity differentials,” Mandell said at the hearing.

 

In the court papers filed yesterday, the victims’ lawyers suggest that a “critical path be followed in order to finalize the proposed settlements.”

Once McGovern completes his plan, it must be reviewed by all of the victims and their lawyers. All of the defendants who have offered settlements must sign off on them. The court must review McGovern’s proposed distribution grid and approve it. The court must also appoint one or more guardians ad litem, who will review the proposed distribution plan to make sure it is fair to the minors who will be receiving settlement money. Releases must be signed by all parties to the lawsuits.

Once that is complete, the settlement proceeds would then be paid into a trust and a neutral expert would review the final allocation results and all accompanying forms and documents.  After all of those things are complete, the trustee of the settlement trust will distribute settlement checks to the victims.

Lawyers for some of the victims have told their clients that they hope the money can be distributed by the end of the year.

 

The Station fire was the fourth-deadliest nightclub fire in U.S. history.

Great White’s tour manager, Daniel M. Biechele, who set off the pyrotechnics without a permit, was sent to prison after pleading guilty to 100 counts of involuntary manslaughter. He was paroled in March, after serving less than half of the four-year prison sentence he was given. The owners of the club, Michael and Jeffrey Derderian, each pleaded no-contest to the same involuntary manslaughter charges. Michael Derderian is scheduled to be paroled in October 2009 from the Adult Correctional Institutions, where he has been serving a four-year term. Jeffrey Derderian was given a sentence of community service.

 

Yesterday, Governor Carcieri announced the appointment of a new state fire marshal, John Chartier. Chartier, who as Warwick fire chief helped battled the Station fire, said that fire services owe it to the victims of that blaze to never forget what happened and to ensure that such a disaster never happens again.