In re MGM Grand Hotel Fire Litigation, MDL No. 453.

• Decision Date: 12 August 1983
• Docket Number: MDL No. 453.
• Citation: 570 F. Supp. 913
• Parties: In re MGM GRAND HOTEL FIRE LITIGATION.
• Court: U.S. District Court — District of Nevada

570 F. Supp. 913

In re MGM GRAND HOTEL FIRE LITIGATION.

MDL No. 453.

United States District Court, D. Nevada.

July 12, 1983.

As Amended August 12, 1983.

COPYRIGHT MATERIAL OMITTED

John J. Cummings, III, New Orleans, La., Stanley M. Chesley, Cincinnati, Ohio, Wendell H. Gauthier, Kenner, La., Melvin M. Belli, San Francisco, Cal., Toxey H. Smith, Los Angeles, Cal., Will S. Kemp, Las Vegas, Nev., Joseph W. Cotchett, San Mateo, Cal., Leonard M. Ring, Chicago, Ill., J. Bruce Alverson, Las Vegas, Nev., Joseph Weiner, Philadelphia, Pa., for plaintiffs.

Allan B. Goldman, Los Angeles, Cal., Stephen L. Morris, James Olson, Las Vegas, Nev., for MGM.

Leland Eugene Backus, A. William Maupin, Las Vegas, Nev., for Taylor Const. Co.

Rex Jemison, Corby Arnold, Las Vegas, Nev., for Martin Stern, Jr., AIA Architect d/b/a Martin J. Stern Architect and Associates.

G. Edward Fitzgerald, Richard McKnight, Los Angeles, Cal., for Cal. Elec. Const. Co.

Samuel A. Harding, Las Vegas, Nev., for Continental Mechanical Corp.

Nicholas W. Hornberger, Los Angeles, Cal., for Otis Elevator.

James F. Pico, Las Vegas, Nev., for Clark County Departments and Political Subdivisions.

John F. O'Reilly, Las Vegas, Nev., for W.J. Thompson, Inc.

Duane Tewell, Seattle, Wash., for Simpson Timber Co.

Samuel T. Rees, Beverly Hills, Cal., for Cadillac Plastic & Chemical Co.

Tom H. Foulds, Seattle, Wash., for American Protection Ins. Co., Lumbermens Mut. Cas. Co., Kemper Corp., American Motorist Ins. Co., American Manufacturers Mut. Ins. Co., and American Protection Ins. Co.

MEMORANDUM AND ORDER

BECHTLE, District Judge.

I. INTRODUCTION AND FACTS

On Friday, November 21, 1980, at approximately 7:00 A.M., a fire broke out in the delicatessen at the MGM Grand Hotel and Casino in Las Vegas, Nevada. The fire spread through the casino and caused heavy smoke and toxic gases to fill the twenty-six story high-rise. Approximately 3,400 registered guests and a number of hotel employees were in the hotel on the morning of the fire. As a result of the fire and heavy smoke and gases, eighty-four persons died in various locations in the casino and hotel. Sixty-one fatalities were documented in the high-rise tower (twenty-five in rooms, twenty-two in corridors, nine in stairways and five in elevators), eighteen fatalities were documented on the casino level and five others were moved before being pronounced dead by officials. In addition, three more fatalities occurred within a year of the fire. Over one thousand persons suffered injuries due to smoke inhalation and hundreds of others suffered sprains, broken bones and lacerations in escaping the fire. According to a report issued by the National Fire Protection Association in cooperation with the Federal Emergency Management Agency, National Bureau of Standards and United States Fire Administration, the major factors that contributed to the injuries and loss of life were the following:

Rapid fire and smoke development on the Casino level due to available fuels, building arrangement, and the lack of adequate fire barriers.

Lack of fire extinguishment in the incipient stage of fire.

Unprotected vertical openings contributed to smoke spread to the high-rise tower. Substandard enclosure of interior stairs, smokeproof towers and exit passageways contributed to heat and smoke spread and impaired the means of egress from the high-rise tower.

Distribution of smoke throughout the high-rise tower through the heating, ventilating and air conditioning equipment. Smoke spread through elevator hoistways to the high-rise tower.

Investigation Report on the MGM Grand Hotel Fire by National Fire Protection Association, at v (rev. January 15, 1982).

Lawsuits were filed against MGM Grand Hotels, Inc. and MGM Grand Hotel-Las Vegas, Inc. (collectively referred to as "MGM") and other defendants across the United States in numerous federal and state courts. All of the state court cases except those filed in California and Nevada between non-diverse parties were removed to federal court. The first lawsuits, filed in December, 1980, were assigned to the Hon. Roger L. Foley. On December 9, 1980, an Interim Committee of Plaintiffs' Counsel was appointed to serve on behalf of all plaintiffs. Pretrial Order No. 1. On December 22, 1980, the first pretrial conference was held. On January 30, 1981, the Court entered its first Order which stayed further discovery and the appointment of a permanent committee of plaintiffs' counsel until the outcome of the motions for transfer and consolidation pending before the Judicial Panel on Multidistrict Litigation. Pretrial Order No. 1.

On May 5, 1981, the Judicial Panel on Multidistrict Litigation acted on the motions and transferred all federal court actions to the United States District Court for the District of Nevada for coordinated and consolidated pretrial proceedings pursuant to 28 U.S.C. § 1407. This judge was then assigned, pursuant to an intercircuit assignment order issued by Chief Justice Warren E. Burger, to the District of Nevada to handle the pretrial proceedings. On June 18, 1981, the first pretrial conference by this judge was held. Thereafter, on August 13, 1981, the Plaintiffs' Legal Committee ("PLC") was appointed to initiate, coordinate and conduct all pretrial liability and damage discovery on behalf of all plaintiffs who filed civil actions governed by the MDL No. 453 and known as the "MGM Grand Hotel Fire Litigation." Pretrial Order No. 8. Moreover, in that Order, the Court provided that all settlements agreed to and fully consummated by 4:00 P.M., Monday, September 21, 1981, would be presumed to have been achieved without material benefit by the work of the PLC and that accordingly no consideration to an assessment of the settlements would be given by the Court for the work of the PLC. Pretrial Order No. 8, ¶ 9(B). Any settlements arrived at after September 21, 1981, would be presumed to have benefited from the efforts and work of the PLC and an assessment would be made on those settlements. Pretrial Order No. 8, ¶ 9(C). The assessment was ordered at a sum equal to five percent (5%) of the gross settlement amount for the PLC's members' fee and a sum equal to one and one-half percent (1½%) of the gross settlement amount for costs. See Pretrial Order No. 75. As a result of that Order, many settlements were arrived at before September 21, 1981, between plaintiffs and MGM both in filed and unfiled claims. The first wave of discovery proceeded and various pretrial motions were filed by both plaintiffs and defendants with the Court.

The Hon. Philip M. Pro, United States Magistrate, was appointed pursuant to 28 U.S.C. § 636(b) and Rule 11(c) of the Rules of Practice of the United States District Court for the District of Nevada, to have authority over all non-dispositive civil motions, petitions and applications, including discovery, by this Court. Pretrial Order No. 6. Pretrial conferences were held on September 9 and November 18, 1981, February 10, June 2, and September 29, 1982, and February 1, 1983. Moreover, discovery conferences were held weekly by the Hon. Philip M. Pro. To date, seventy-eight discovery conferences have been held by Magistrate Pro.

In a spirit of cooperation often not seen between federal and state courts, it was agreed between the respective courts in Nevada and the parties that the discovery developed in this MDL No. 453 could be used in the suits pending before the Nevada state courts. In addition, a similar fee assessment in the amount of five percent (5%) for PLC fees and one and one-half percent (1½%) for PLC costs was approved by the Hon. J. Charles Thompson, District Judge for the Eighth Judicial District Court of the State of Nevada as the assessment to apply to Nevada state cases arising out of the fire. Pretrial Order Nos. 94 and 95. On December 1, 1981, due to the complexity of the litigation and the need for the efficient scheduling and completion of the taking of oral depositions, Michael Cherry, Esquire, was appointed by both courts as Special Master to establish and administer an oral deposition plan of all witnesses. Pretrial Order No. 37.

On March 9 and 10, 1982, the Court heard oral argument on the motions to dismiss and for summary judgment filed by defendants and third-party defendants based on N.R.S. 11.205. That statute provided that no suits could be brought against any person involved in the design, planning, supervision or observation of a construction project six years after substantial completion of the construction project, except the owner or occupier of the improvement to real property. Because the constitutionality of the statute was then before the Nevada State Supreme Court and for a variety of other reasons, on June 2, 1982, the motions were denied without prejudice. On March 31, 1983, N.R.S. 11.205 was declared unconstitutional by the Nevada Supreme Court in State Farm Fire and Casualty Company v. All Electric Inc., et al., 660 P.2d 995 (Nev.1983). Following the hearing on March 9, 1982, settlement was explored for the first time by both plaintiffs and defendants. At a settlement conference held in Philadelphia, Pennsylvania, on March 25, 1982, defendants and third-party defendants, both MGM and remaining defendants ("Non-MGM"), stated their desire for a "global settlement" of all wrongful death, personal injury and property damage claims resulting from the November 21, 1980 fire. See Pretrial Order Nos. 86 and 87. Estimates of the remaining wrongful death and personal injury claims were in excess of $350,000,000.00. A "global settlement" was expressed by defendants and third-party defendants as the only type of settlement which defendants and third-party defendants would be willing to enter because of the need to resolve all claims and end all litigation, both in federal and state court. Before any defendant or third-party defendant would participate in a "global settlement," it was further required that each def...