041: Smoke Gets in Your Eyes

Stella Case No. 041, Originally Published: 19 March 2003

The tragic fire last month at the Station Nightclub in West Warwick, R.I., killed 100 people and injured many more. Early indications are that the Station’s owners used cheap foam to provide soundproofing around the stage — very flammable foam which quickly spread the fire, when more expensive non-combustible foam should have been used. And featured band Great White, which set off fireworks inside the packed club during its performance, also appears to be very much at fault.

Naturally, even before the smoke cleared the smell of lawsuits filled the air. With so many dead, legal observers expect settlements and judgements will reach $1 billion. Surely the burned-out night club and band won’t have that much in assets or insurance coverage. Who, then, would have that kind of money? If the lawyers can figure out who had money and had any involvement whatever with the event, they would then know who to sue. Anyone. Anyone at all.

Radio station WHJY-FM in Providence ran advertisements for the concert, and Michael Gonsalves, a WHJY disk jockey, was there to introduce the band. (Gonsalves, by the way, is one of the dead.) WHJY is owned by Clear Channel Communications, which owns more than 1,200 radio and TV stations, as well as other media properties.

The start of the fire, and the band’s confusion.

A gigantic media corporation, you say? And one of its outlets helped lure poor, innocent victims …er, customers!… to the show? Good enough, say two Providence lawyers: they have announced they will name Clear Channel in the suits they are filing to get their share of that billion-dollar damage estimate.

Attorney Steven Minicucci, the president of the Rhode Island Trial Lawyers Association, represents two people injured in the fire as well as the family of one man who died. He says Clear Channel “bears considerable responsibility” for the fatalities and injuries because the commercials it ran for the show did so well that the night club was overcrowded. “Their hands are all over this event,” he says.

Attorney Max Wistow, who represents a number of victims, claims that ethical considerations demand that he name Clear Channel. “Any lawyer who didn’t exhaustively explore their relationship to this thing and the facts surrounding their participation would be absolutely remiss and guilty of legal malpractice,” he argues, as if that doesn’t show, in and of itself, that there’s something very, very wrong with America’s civil court system.

What was WHJY’s official involvement in the concert? Station general manager Bud Paras says the station was not a sponsor, but merely produced and ran 15 30-second commercials for the event, for which it was paid $700. The station was also given, and gave away, just four tickets to the concert.

Rhode Island attorney Edward C. Roy, who doesn’t represent any victims, finds the whole idea of involving Clear Channel a bit far fetched. “I don’t think it’s necessarily a clear case of liability,” he says, “but given the huge economic loss suffered by the victims, you’ll definitely see them named. Of the people that are involved, they’re probably the most well-insured. They’ve got the deepest pockets.” Those, to be sure, are sweet words to a litigator. Well, the last two sentences, anyway.

Roy says that in normal civil cases, the blame is divided up among the various defendants according to how much they are at fault. So, for instance, if a defendant is judged to be 1 percent at fault, they would be liable for 1 percent of any jury award. But in large cases, Roy points out, the system in the state is designed “to help make injured parties whole,” so judgements can be collected from any at-fault defendant — known as “joint and several liability.” Thus, even if Clear Channel was judged to be only 1 percent at fault, they could be forced to pay as much as 100 percent of any awards which, again, is estimated to be in the vicinity of $1 billion for all the cases.

With that logic, anyone who promoted the concert is as much as 100 percent liable — such as people who heard about the concert and told a friend. Is that reasonable? Is that fair? Is that what the USA stands for? Why should any person or company be made to pay any portion of the blame assigned to someone else? Joint and several liability is all about “helping make injured parties whole,” but it doesn’t explain how the parties that the doctrine damages or destroys; their “wholeness” isn’t an issue, and thus the damage done to the people who were in the wrong place at the wrong time is merrily transferred to those who weren’t.

Sources

  • “R.I. Fire Victims’ Lawyers Eye Firm; Suits Expected to Name Radio Station’s Owner,” Boston Globe, 8 March 2003

Case Status

Over time the list of defendants in the case expanded to more than 45 as other deep pockets were identified. In addition to the nightclub owners, list includes the state fire marshal, for failing to personally be there to ensure there were not too many people inside; CBS television, because a local station’s cameraman was inside and maybe, just perhaps, he got in the way of people trying to run after the fire started; the city fire inspector, for failing to note that flammable foam was used on the stage for soundproofing; the company that made the foam, even though it was not sold as fireproof material; the nightclub’s insurance company, because it didn’t discover that the soundproofing foam wasn’t fireproof; Anheuser-Busch, who makes Budweiser beer, which was served at the nightclub; and, naturally, the band, Great White, for starting the fire — probably one of the few defendants that makes sense in the case. But they don’t have hundreds of millions of dollars in assets or insurance to pay the claims, so that’s why everyone else is named. Because without deep pockets, the plaintiffs can’t cash in.

Band Manager Daniel Michael Biechele, 26, faced criminal trial: he was the one who set off the pyrotechnical effects that started the fire.

Biechele, against his lawyers’ advice, pleaded guilty to 100 counts of involuntary manslaughter on February 7, 2006, in what he said was an effort to “bring peace — I want this to be over with.” State Prosecutor Randall White asked the court to sentence Biechele to 10 years in prison, the maximum allowed under the plea bargain, but Superior Court Judge Francis J. Darigan Jr. sentenced Biechele to 15 years, with 11 suspended, plus 3 years of probation. The judge, at least, was totally correct when he told Biechele, “The greatest sentence that can be imposed on you has been imposed on you by yourself.”

While in prison, Biechele sent handwritten letters of apology to all 100 victims’ families. Many wrote letters to the parole board asking for his release. “In the period following this tragedy, it was Mr. Biechele, alone, who stood up and admitted responsibility for his part in this horrible event,” wrote radio host Dave Kane and his wife Joanne O’Neill, the parents of the youngest victim, Nicholas O’Neill. “He apologized to the families of the victims and made no attempt to mitigate his guilt.” Biechele was released from prison on 19 March 2008.

The nightclub owners were also criminally charged. Brothers Michael and Jeffrey Derderian changed their pleas from not guilty to “no contest.” Michael received the same sentence as Biechele; Jeffrey received a 10-year suspended sentence, three years’ probation, and 500 hours of community service. Judge Darigan said the difference in the brothers’ sentences reflected their respective involvement with the purchase and installation of the flammable foam.

Who Paid Out for the Lawsuits?

Settlements definitely didn’t reach $1 billion. But by September 2008, $115+ million was paid to, or offered to, the victims or their families:

  • The Jack Russell Tour Group Inc. offered $1 million in a settlement to survivors and victims’ relatives, the maximum allowed under the band’s insurance plan.
  • Club owners Jeffrey and Michael Derderian offered to settle for $813,000, which is to be covered by their insurance plan due to the pair having bankruptcy protection from lawsuits.
  • The State of Rhode Island and the town of West Warwick agreed to pay $10 million as settlement — deep pockets indeed!
  • Sealed Air Corporation agreed to pay $25 million as settlement. Sealed Air made the flammable packaging foam that was improperly installed in the club without their knowledge or consent, which application required acoustic foam designed for this purpose.
  • Providence television station WPRI-TV and their then-owners LIN TV made an out-of-court settlement of $30 million as a result of the claim that their video journalist, who ironically was present to tape a story about nightclub safety(!), was said to be obstructing escape, and not sufficiently helping people exit — as if that was part of his job. Yet his tape of the fire starting provided the best evidence available to what actually happened at The Station that night.
  • JBL Speakers settled out of court for $815,000. JBL was accused of using flammable foam inside their speakers. The company denied any wrongdoing.
  • Brewer Anheuser-Busch offered $5 million. McLaughlin & Moran, Anheuser-Busch’s distributor, offered $16 million.
  • Home Depot and Polar Industries, Inc. (a Connecticut-based insulation company) made a settlement offer of $5 million.
  • As noted in the case writeup, Providence radio station WHJY-FM, which promoted the show, and its DJ, Mike “The Doctor” Gonsalves, was killed. Clear Channel Broadcasting, WHJY’s parent company, paid a settlement of $22 million.
  • American Foam Corporation who sold the insulation to The Station nightclub, agreed to pay $6.3 million to settle lawsuits relating to the fire.

My 2020 Thoughts on the Case

The fire was the fourth-deadliest at a nightclub in U.S. history, and the second-deadliest in New England, surpassed only by the 1942 Cocoanut Grove fire (492 deaths). Sure enough, a lot of non-involved parties had to cough up a lot of money, including taxpayers. My unanswered question: how much did the lawyers pocket? Sadly, it was likely around a third of the $115+ million.

In 2014 Clear Channel renamed itself to iHeartMedia, and warned it may have to file bankruptcy. Their $22 million settlement hardly figured in to that: the company did file in March 2018, restructured $10 billion of their $20 billion in debt, and emerged from bankruptcy in May 2019.

One job related to this case I really would not want: deciding on which victims got what percentage of that money: there were a lot of victims from that horrible night, but who should get more: the family of a teen who was killed, or someone with terrible and painful burns? Tough decisions were made.

Letters

Letters flowed in on the dog killer (Case 040), but I’ll let one speak for all.

Brian in North Carolina: “The state of affairs of this country wherein a *convicted criminal* can even get away with *filing* a lawsuit against his own victim, never mind the ensuing (er… no pun intended) litigation, is appalling. If I were president…. No, scratch that — the president doesn’t have enough power. If I were tyrant of America, I’d end all this cushy treatment of criminals. Criminals earning money? Preposterous! Criminals being treated to fine food and pleasant living arrangements? Insanity! If I were running the penal system, criminals would sleep on uncomfortable beds, eat the nastiest-tasting (while not harmful, of course) slop in the world, be ‘mandatory volunteers’ for all inmate jobs, and forget about amenities like air conditioning! The pioneers of this country survived without it; so can criminals.”

I don’t think too many prisoners are getting “pleasant living arrangements,” but I get your point. I’m all in favor of prisoners doing useful work and earning money — as long as it all goes to paying for their incarceration and/or paying compensation to their victims. But suing their victims? That’s beyond outrageous.

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4 Comments on “041: Smoke Gets in Your Eyes

  1. The only comment I have is that Clear Channel, I believe, is not I-heart-Radio and is owned by one of the richest people in the USA, the remaining Koch brother. Deep and Deep red pockets indeed.

    As for the merits of the case, this has nothing to do with it.

    Clear Channel is indeed now known as iHeartMedia, and neither Koch nor Koch Industries is among the top 10 shareholders of record. -rc

    Reply
  2. My thoughts on the “also named” people/companies:

    • the state fire marshal, for failing to personally be there to ensure there were not too many people inside: no guilt; it’s not his job to personally be there.
    • CBS television, because a local station’s cameraman was inside and he got in the way of people trying to run after the fire started: no guilt, helping/staying out of the way of people get out wasn’t his job.
    • the city fire inspector & the city, for failing to note that flammable foam was used on the stage for soundproofing – some guilt, he should have noted/seen that & cited the nightclub for the violation. Beyond that, what he could have done depends on the local fire codes & the associated penalties.
    • Sealed Air Corporation & American Foam Corporation: no guilt as they can’t control misuses of their product. But if their packaging didn’t make it clear that the foam was NOT nonflammable then some guilt.
    • JBL Speakers: no guilt as their speakers didn’t start the fire; also by the time the fire hit the speakers, even if they had had nonflammable foam, it probably wouldn’t have made any difference.
    • the nightclub’s insurance company, because it didn’t discover that the soundproofing foam wasn’t fireproof: some guilt, they should have done a better inspection job. Of course if they HAD done a better inspection job they wouldn’t have insured the club & couldn’t be named in the suit.
    • Anheuser-Busch & their distributor: absolutely no guilt, they had NO responsibilities regarding venue safety.
    • Clear Channel Broadcasting, WHJY’s parent company: absolutely no guilt; they did what they were paid to do, promote the show. They had no responsibility re: venue safety.
    • Home Depot & Polar Industries, Inc.: can’t tell as it’s not stated why they were even named. Maybe the flammable foam was bought at Home Depot but the story says American Foam Corporation sold the foam to the nightclub, so who knows.

    The vast majority of the blame (well over 90%) should be on the band’s manager (who set off the fireworks), the club owners, their insurance company, the city fire marshal, & the city. But, as Randy said, those pockets weren’t anywhere deep enough for the lawyers.

    Like many others, I’m sick & tired of the lawyers getting many times what any actual victim got (e.g. lawyers often get 1/4-1/3 of the total settlement & the actual victims get equal shares of the rest. With a settlement of $1M, the lawyers getting 1/4, & 100 victims, the lawyers would get $250K & the victims would get $7.5K each; so the lawyers would get >33 times what any actual victim got). One idea to stop lawyers getting most of the settlement could be to cap any $$ the lawyers get, at the max. allotted to any actual victim. Another idea would be to not give the lawyers *ANY* of the settlement; they’d get paid their normal fees for the time they spent on the case (in lawyer-speak, they’d only get paid for actual hours billed). BTW, I do realize that the various lawyers associations would *NEVER* go for either idea, especially the 2nd one as the ideas would cost their members a FORTUNE.

    Victims don’t automatically get an exact share of awards; that’s part of the judge’s job to decide how the money is split. I’m not against the attorneys getting an amount higher than any particular victim: they gamble when they take on a contingency case in that if they lose, they get nothing. They have to pay their bills somehow, so when they win, they get to average out those they lost. That said, in a case like this it’s obvious there are a lot of deep-pocket possibilities, and it’s almost assured there would be a payout, so I hope that they accepted a lower percentage than the typical third. -rc

    Reply
  3. I wonder if Brian in North Carolina thinks that’s the sort of treatment Mr. Biechele should have received. I doubt very much that any convicted prisoners get the sort of cushy treatment that swirls in Brian’s imagination — unless, of course, they are wealthy.

    Just to be extra clear, Brian was commenting on the dog killer story, not the nightclub fire. -rc

    Reply
    • I think the point is that not all prisoners are equal, as has been recently highlighted by BLM protests, ‘The Squad’ of 4 freshmen Representatives, and Trump’s pardoning of ‘Sheriff Joe’ Arpaio (Maricopa Co, Arizona) for breaking the law and going in the opposite direction, treating prisoners inhumanely. Many prisoners are as much victims as the victims of their crimes (and in many cases there are no explicit victims, e.g. those serving sentences for dealing drugs or defrauding insurance companies); many prisoners are incarcerated under inhumanely harsh laws, or convicted by biased juries (e.g. again, the ‘War on Drugs’).

      Reply

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