IN A RARE legal move, MGM Resorts has filed suit against victims of the Oct. 1 mass shooting at Mandalay Bay in Las Vegas in which 58 people were killed. The company is seeking protection under the federal SAFETY Act, passed in the wake of the 9/11 terror attacks, and one expert says the lawsuit provides lessons other hoteliers should learn.
MGM filed the action for declaratory relief in the U.S. District Court Central District of California, Western Division, on July 13. In the filing the company claims that its use of federally certified Contemporary Services Corporation for security at the Route 91 Harvest musical festival where the shootings occurred qualified it for protection under the act and therefore any legal proceedings in the case should occur in federal court.
During the shooting, 64-year-old Stephen Paddock fired his weapon from a room on the 32nd floor of MGM’s Mandalay Bay Resort and Casino on the crowd below. There have been questions about whether the hotel could have done more to prevent Paddock from stockpiling the weapons he used in the hotel room, and some victims have already sued or threatened to sue the company.
MGM claims those legal actions were not unexpected, said company spokesperson Debra DeShong, but their lawsuit actually would benefit everybody, including the shooting victims.
“While we expected the litigation that followed, we also feel strongly that victims and the community should be able to recover and find resolution in a timely manner,” she said. “Congress provided that the federal courts were the correct place for such litigation relating to incidents of mass violence like this one where security services approved by the Department of Homeland Security were provided. Years of drawn out litigation and hearings are not in the best interest of victims, the community and those still healing.”
Still, MGM faced pushback in the media following the filing of the action. The MGM suits are hypocritical and bound to create public relations troubles for the company, Brian Claypool, an attorney who was at the music festival during the shooting and who represents some of the victims, told The Guardian U.S. Edition. “We collectively view this as a bullying tactic to intimidate the survivors who are rightfully seeking social change and redress through the litigation process,” he said.
That response led MGM CEO James Murren to release an internal memo to employees on July 27 explaining the company’s position. He emphasized that the company is not seeking any kind of damages from the shooting victims.
“Thus far, more than 2,500 people have filed or threatened to file legal claims against MGM Resorts. Unfortunately, resolving these cases currently requires a prolonged litigation process across multiple courts in multiple states lasting many, many years,” Murren said. “If these cases proceed in this manner, victims, which include MGM Resorts employees and families, first responders and witnesses would face the need to testify over and over again, traveling throughout various court rooms across the US in trial after trial. That scenario would place an unnecessary and painful burden on all of those affected.”
Mark Dombroff, an Alexandria, Virginia-based attorney with LeClairRyan law firm who is very familiar with the SAFETY Act, said declaratory relief actions are common legal filings, often in relation to contract disputes. “What is not common is bringing such a suit against victims alleging or who will allege negligence.”
The act is meant to encourage the development of qualified anti-terrorism services and technology by protecting the companies that create them from at least some liability. Dombroff said it has not previously been invoked in the way MGM is using it now.
How effective the filing will be, if the court decides the SAFETY Act applies, depends on the specifics of the lawsuits brought against the company, he said. Particularly, the act would only apply to actions involving the federally certified security company, CSC.
“However, if the focus of the plaintiffs’ claims is directed at MGM, independent of anything done or provided by CSC, absent MGM itself having Safety Act approval, there is a distinct possibility MGM could be separately exposed to liability,” he said.
Also, while the MGM case will likely be moved to federal court, the victims who do file suit will probably move to have the cases sent to state court. “There are well-established legal principles associated with moving (or removing) cases to federal courts,” Dombroff said. “It remains to be seen whether these cases can be kept in federal court.”
State courts are generally seen as less favorable for defendants as federal courts, he said. “However, in this instance, the significance of being in federal court is that The SAFETY Act vests exclusive jurisdiction for lawsuits against defendants under The SAFETY Act in the federal courts,” he said. “Accordingly, while it’s generally viewed as preferable to be in federal courts as a defendant, the declaratory relief action by MGM for protection under The SAFETY Act is a matter likely vested for decision, at least in the first instance, in federal courts.”
As for the public relations problems caused by the filing, Dombroff said MGM probably should have issued a press release explaining The SAFETY Act and why they were filing for declaratory judgement before actually filing. As for what other hotels should take away from MGM’s situation, he recommends that they get SAFETY Act approval for their security programs.
“If you contract for security services of any type, require your vendors to have SAFETY Act approval,” he said. “If you do have an ‘event,’ are exposed to liability and are considering filing a declaratory relief action like MGM, consider educating the public/media before you file by issuing a press release explaining what you are doing and why.”