Tragedy in Rhode Island; Suit Filed in Fire as R.I. Mulls Aid Fund Liability Claims Seen Topping $1B - The Boston Globe - March 5, 2003

By: Christopher Rowland and Jonathan Saltzman
The Boston Globe
March 5, 2003

WEST WARWICK, R.I. - Less than two weeks after a fast-moving fire consumed a packed nightclub, relatives of two victims yesterday filed the first of what is expected to be an avalanche of lawsuits against the club, the band whose pyrotechnics sparked the blaze, the town, and eight others.

While some defendants, including a West Warwick official, suggested the lawsuit was premature, the lawyer for the two families said it was important to file early, comparing the magnitude to the claims stemming from the Sept. 11 terrorist attacks.

'The breadwinners are gone in both of these families, and the children have to be supported, and as far as I'm concerned, in representing my clients, the sooner the better,' said Brian Cunha, a Fall River lawyer who specializes in personal injury cases.

Cunha filed the suit in Providence County Superior Court on behalf of the families of Tina Ayer, 33, of Warwick, and Donald Roderiques, 46, of Fall River.

The 20-page complaint names as defendants club owners Jeffrey and Michael Derderian, their business, the surviving members of Great White, the band's management company and managers, the town, West Warwick Fire Inspector Denis La rocque, an unnamed manufacturer of the pyrotechnics, and American Foam Corp., the Johnston, R.I., company that sold the club flammable foam to use for soundproofing.

'The best analogy to this case is probably the World Trade Center,' Cunha said. 'You get a lot of different defendants with different degrees of culpability, with a lot of different lawyers and a lot of different plaintiffs.'

Meanwhile, the prospect of enormous liability claims from the nightclub fire is prompting Rhode Island judicial and political leaders to consider forming a special fund to pay victims and their families, similar to the one Congress established to compensate victims of the Sept. 11 terror attacks.

Private State House talks are being held about how such a fund would be created and financed. It remains one of a number of options as political leaders, lawyers, and insurers delve into the ramifications of what could become the largest civil tort case in Rhode Island history. Estimates for total liability claims stemming from the 98 dead and nearly 190 injured have reached $1 billion, and court officials are looking at ways to streamline the case.

Chief Justice Frank Williams of the Rhode Island Supreme Court said in an interview yesterday that the state should consider a victims' fund, but it must be careful to avoid some of the controversy that the 9/11 fund has generated, such as concerns among victims over payouts being reduced because of other income and benefits.

'We're going to have to look at the New York experience closely,' Williams said.

He said he expects to discuss the issue with State House leaders. Another option, Williams said, is for the state to steer all litigation to a single judge in Superior Court, where payments could be dispensed by a trustee or special master.

Yet to be decided is how such a fund would be financed. Officials noted that insurance and assets from various potential defendants would not be enough to cover all claims, and the General Assembly would have to decide whether to raise additional money.

A bill was introduced in the Rhode Island House yesterday by Representative Timothy Williamson of West Warwick, who also serves as West Warwick's town solicitor, that would give the presiding judge of the Superior Court powers to streamline claims as they make their way through the state trial court.

If it is modeled on the Sept. 11 fund, the Rhode Island compensation fund would cap the amount that victims and their families could recover, while providing for speedier resolution of their claims. In exchange, they would not be able to sue.

Creation of the fund would most likely have to be approved by Governor Donald Carcieri and the Rhode Island General Assembly, in consultation with the courts, officials said.

Carcieri yesterday said he was not ready to discuss ways to streamline liability claims. He plans to go to Washington this weekend to press his case for emergency assistance to help the state pay for immediate costs of the fire.

'The longer term, the bigger issues, I just don't know,' Carcieri said. 'It's just too early.'

House Speaker William Murphy, who represents West Warwick, is interested in the idea, said his spokesman, Larry Berman.

'He wants to bring a lot of parties to the table in the next week or two - judges and trial lawyers and the communities affected - and he wants to talk about how it would work to set up a fund,' Berman said. 'There are a lot of different aspects to this.'

The proposal for a settlement fund was first broached publicly by a Chicago tort lawyer, Kenneth Moll, who has posted a notice on his website announcing his interest in pursuing cases related to The Station fire. The notion has gained some backing in Rhode Island, where many of the potentially responsible parties - the band Great White, the Derderian brothers, and the small, working-class town of West Warwick - lack the resources that could fairly compensate victims.

'I think it's something that should be explored,' said Thomas Dwyer, president and executive director of the Rhode Island Interlocal Risk Management Trust, an insurance carrier for West Warwick and 31 other cities and towns. 'I think it's quite clear here that you're going to have huge losses and insufficient financial resources to cover those losses.'

West Warwick has just $4 million worth of insurance coverage with the Interlocal Trust. That kind of coverage might be adequate for the claims typically lodged against cities and towns, such as automobile crashes involving municipal vehicles or police misconduct allegations. But it might not be deemed adequate to compensate even one severely burned victim from the nightclub fire.

A state law limits claims against municipalities to $100,000, but Dwyer said there is disagreement over whether that means $100,000 per accident or $100,000 per individual. State House and legal observers are expecting a raft of legislation from lawmakers who have victims in their districts seeking to waive the cap and set a much higher limit - or perhaps no limit - on West Warwick's liability. For the past three years, town fire inspections failed to note the flammable foam on the wall behind the stage at The Station.

Lawyers and specialists contacted yesterday said they knew of no precedent in Rhode Island where a town was in jeopardy of such large civil claims.

'It may well be that all of the responsible parties may not have insurance or the capacity to pay claims at that level,' said Carl T. Bogus, a law professor at Roger Williams University in Bristol, R.I. But loading liability onto West Warwick by removing the cap may be unfair, he said.

'I wonder whether this liability falling just on that community and its taxpayers makes financial sense,' he said, 'so it is to be expected that the state would begin to think about making a contribution in some fashion.'

But Milton Thurm, a New York lawyer who has written articles about the Sept. 11 fund and who represented a landlord in the Happy Land Social Club fire in New York in 1991, said it may not make sense for a state to try to emulate Congress in the field of victims compensation. Thurm said a more likely scenario is to have all plaintiffs' cases lumped together before a single judge, the traditional form of adjudicating mass casualty claims.

Cunha, the lawyer for the lawsuit filed yesterday, said he intends to file suits on behalf of the victims of four other families later this week, but declined to identify them.

Legal specialists have predicted that lawsuits from the fire could total as much as $1 billion. The suit lodged yesterday did not specify an amount, but Cunha said he would seek at least $1 million in compensatory and punitive damages for each of the families.

Cunha said all the defendants share responsibility for the fourth-deadliest night club fire in US history, but he asserted that Daniel Biechele, the band's road manager, was the most culpable because he ignited the pyrotechnics that started the fire.

Thomas Briody, the lawyer representing the 26-year-old road manager, said he hadn't seen the suit and declined to comment.

Cunha also heaped scorn on West Warwick fire officials, in particular Larocque, the fire inspector

whose notes do not mention The Station's flammable soundproofing foam.

Larocque has not responded to requests for comment about his inspections of the nightclub.

Williamson, the West Warwick town solicitor, said he expects as many as 300 lawsuits stemming from the fire.

As to the suit filed yesterday, he said, 'I don't think it has any merit. It starts with the person who ignited it, who started the fire.'