Killer Show

by John Barylick

  Finally, we wrapped up the presentation with a sampling of what a jury would likely experience when considering evidence of the pain-and-suffering endured by those killed in the fire. I ran the Butler video, with Matthew Pickett’s chilling sound recording from inside the club time-synched to it. When the lights came up, no one spoke for a full minute. Defense counsel then repaired to a separate conference room — pointedly leaving their expert, Dr. Mowrer, behind.

  The same group reconvened two weeks later to hear Sealed Air’s rebuttal presentation and to see if the two sides could agree on a settlement. They finally did. Twenty-five million dollars. The last defendant had settled, bringing the total of all settlements to $176 million.

  During the course of our research into the contribution of PE foam to the ferocity of the Station fire, I came to learn a remarkable irony about the PU/PE foam sandwich that had been applied to the walls of The Station: if the Julian PE foam alone had been showered with sparks from Great White’s gerbs, it would not have caught fire, due to its closed-cell structure, smooth surface, and high density. But glue a piece of the Derderians’ egg-crate PU foam on top of it, and the open cells, convolutions, and low density of the PU foam make it ideal to catch sparks, pyrolize, and burst into flame — then transfer its energy to the PE foam beneath it.

  As it turns out, egg-crate PU foam is the perfect kindling for PE foam blocks. Without it, the PE foam would not have burned. But with PU foam glued on top of PE foam, it was preordained that The Station’s walls would burn like the fires of hell.

  CHAPTER 28

  DIVINING THE INCALCULABLE

  ON DECEMBER 27, 2007, a few months after the first civil defendant agreed to a settlement, Duke University law professor Francis E. McGovern met with an apprehensive group of thirty Station fire victims and families in an unused classroom of the Community College of Rhode Island. He wore a neatly pressed blue blazer, with his thinning, surprisingly long hair curling over its collar. Most of those present had never set foot in a college classroom, much less met a law professor. Bundled against the winter cold in sweatshirts and ball caps, they warily watched the man whose work would probably affect them for the rest of their lives. As this unassuming, bespectacled gentleman moved from table to table, working the room with his soft southern drawl, McGovern met the gaze and shook the hand (or what was left of victims’ burned hands) of each person, briefly introducing himself.

  “Don’t worry. I’m not running for office,” he assured them. “With a name like McGovern, you wouldn’t, either.”

  Thus began the first of twenty-four such meetings held by Professor McGovern, part of a yearlong process that would eventually solve one of the knottiest problems arising from the Station tragedy: how to equitably distribute millions of dollars in settlement monies among hundreds of victim families.

  From the moment the first civil defendant struck a settlement in principle with plaintiffs’ counsel, it was clear that any defendant who wished to settle would only settle with all plaintiffs in all of the consolidated cases. Piecemeal settlements with only some plaintiffs would be unworkable for several reasons, the first of which was that settling defendants wanted to buy their peace once and for all, and the second, that the pool of settlement funds would never be enough to fully compensate all victims for their losses. If a race to trial and judgment by each plaintiff were to be avoided, some mechanism would have to be developed to divide whatever settlement monies were amassed.

  Lawyers are prohibited by ethical rules from settling claims of multiple clients for an aggregate sum, because of the inherent conflict of interest when they allocate the settlement among their clients. Such a conflict would arise if a lawyer were to represent two injured automobile passengers suing their negligent driver. The lawyer cannot accept an aggregate settlement from the driver and then divide it between his clients, lest he favor one over the other. Only with each of his clients’ informed consent, after full disclosure of the other’s injuries and settlement share, may such a settlement be ethically struck.

  While this rule is sometimes honored in the breach, as in asbestos litigation (where plaintiffs’ firms have been known to settle multiple cases wholesale and then conduct an ethically dubious parceling of the money among their multiple clients), the Station fire cases would require an objective allocation plan, developed by an officer of the court, in order to effect a global settlement. Even more critically, every single plaintiff would have to agree to the distribution plan, because no defendant was willing to settle with less than all plaintiffs. Since many Station fire victims understandably regarded their particular injuries as worse than anyone else’s (and since they well knew that the total pool of money would be inadequate to fully compensate all), unanimous approval of any plan appeared highly unlikely.

  Creation of an objective settlement distribution plan (and convincing all victims of its fairness) would require a “special master.” Courts have the power to appoint individuals with special experience or training to be special masters. Acting as neutral officers of the court, special masters can examine the facts of a complex case and make recommendations to the court. Special masters may be accountants, scientists, or professors, depending upon the particular needs of a case. What was needed in the Station fire litigation was an individual experienced in developing distribution plans for mass tort settlements. The special master eventually appointed by Judge Lagueux was Professor McGovern. His résumé contained, to put it mildly, some relevant work experience.

  McGovern had previously served as a court-appointed special master, or “neutral,” in over fifty cases. His experience as a special master in products liability mass torts alone encompassed the fields of asbestos, silicone breast implants, intrauterine devices, and prescription drugs. McGovern even worked with the United Nations Compensation Commission to help distribute reparations for the Persian Gulf War.

  Such special master assignments can often be quite lucrative, as in securities fraud settlements. However, at the time Professor McGovern was considering the job, the combined settlements totaled only $13 million. McGovern took one look at the demographics of the Station fire victims, and, considering the modest pool of settlement money, offered to act as special master, charging only his out-of-pocket expenses. (Another candidate for the job asked to be paid $250,000 for every three months he worked on developing and implementing a distribution plan.) While McGovern may not have chosen the word, his commitment to develop a plan without compensation represented a mitzvah of the first order (especially as contrasted with the chutzpah of the other candidate).

  McGovern instructed the plaintiffs’ attorneys at the outset that, ideally, any allocation methodology for a mass tort settlement should be developed “from the bottom up” — that is, from victims’ input — early in the settlement process, long before it is known what the total fund will be. “That is the only way that victims will embrace a plan,” McGovern explained. The purpose of meeting with every family was to build consensus in this way — early on, from the ground up.

  McGovern could have held one or two huge “informational meetings” with all the victims together, in a hotel ballroom. It certainly would have been easier on him. But he insisted, instead, on holding twenty-four separate sessions with twenty to thirty attendees each, so that he could meet with, and hear from, anyone who wished to speak. It was important, too, that the setting be spartan — an empty classroom donated by the state, rather than a posh (and seemingly wasteful) hotel conference room. The victims had to know that they played a vital part in an economical, and accessible, process.

  Before each day of family meetings, McGovern fortified himself by visiting the site of the Station fire, where one hundred makeshift memorials had been erected. Over the two months of wrenching family meetings, he never lost sight of his work’s purpose.

  The meetings were part lecture, part question-and-answer. Many of the attendees challenged the legal assumptions underlying an allocation plan. Yet McGovern patiently an
d gently bridged the social and educational gulf between himself and his audience, explaining the two competing objectives that must be served in any mass tort allocation plan.

  Those two objectives are efficiency and fairness. The first, efficiency, is mandated because the costs associated with determining and distributing settlement monies cannot be permitted to consume the limited funds available. The second, fairness, is an absolute prerequisite to victim acceptance of any plan.

  At one end of the spectrum, suggested McGovern, might be an allocation plan that simply took the total of monies available and divided it by the number of victims, giving each the same award. That would be very efficient, but not very fair. At the other end of the spectrum, he noted, would be hundreds of individual jury trials for every victim (and their derivative claimants), by the end of which there would be no money left for distribution. The latter would be fair, but unworkably inefficient.

  McGovern proceeded to educate the Station families about different types of distribution plans used in the past to better serve both objectives. In the Dalkon Shield intrauterine device litigation, for example, an injury “grid” was developed, whereby particular injuries were awarded a fixed dollar amount. The grid box into which a plaintiff fell determined the amount of her settlement. Similarly, in asbestos settlements, injuries fell into fairly predictable groups: mesothelioma, lung cancer, asbestosis. However, there, a system was established whereby a particular injury was awarded “points” in an attempt to relate its severity to other injuries. Additional points were added to reflect a victim’s relatively young age, or the number/age of his dependents.

  One advantage of a point system, the professor explained, is that it can be applied where the ultimate amount of the settlement fund is unknown. The points only establish relative values of injuries, not their absolute dollar values. This feature was important in the Station case, because at the time of his meetings, there was still only $13.5 million dollars in tentative settlements from a few defendants.

  The consensus of victim families attending the McGovern meetings was that a point system of some kind would best serve the dual objectives of efficiency and fairness, particularly because the final amount of the fund was unknown. That was the easy part. The devil, however, would truly be in the details. The unseemly calculus of attaching points to one person’s death versus another’s, to one person’s burns versus another’s — would test the patience and understanding of several hundred families in the months to come. Securing unanimous approval of a distribution plan required all the families to accept some unpleasant legal principles — and many just weren’t buying.

  McGovern necessarily based his distribution plan on the law of torts and, particularly, Rhode Island’s law establishing who has standing to claim tort damages, and how those damages are calculated. For example, ninety-seven of the Station cases alleged that defendants negligently caused a loved one’s death. They are called “wrongful death” cases. Few laymen appreciate that the right to sue another for wrongful death is entirely a legislative creation of each state (indeed, before Lord Campbell’s Act in 1846, there existed no cause of action whatsoever for wrongful death at English common law), and that wrongful death statutes strictly limit who can sue, and how damages are calculated. McGovern would have to explain to several skeptical Station families how tort law values deaths of young married persons, or people with children, more highly than those of single, childless adults. To parents who lost an unmarried adult child in the fire, such legal concepts were anathema. “My daughter never even had the chance to marry or have children! Why is her death worth less?” demanded one bereaved mother.

  Apparent inequities abound in the law — and would have to be accepted by all plaintiffs. They needed to understand that the law necessarily distinguishes among classes of persons who may, and may not, recover when someone dies. A surviving spouse has a claim for loss of her dead husband’s society and companionship, but a longtime unmarried companion does not. In 2003, children of a decedent had a claim for loss of their parent’s companionship — but only if they were under eighteen at the time of the parent’s death. If a young man killed in the Station fire had fathered a child and never married, or divorced its mother, that child would be the only beneficiary of his wrongful death claim. (One unmarried man who was killed in the fire actually left a surprise sole heir — later confirmed by DNA testing — in utero at the time of his death. Imagine explaining that to the man’s parents, who, as a result of their unexpected grandchild, had no legal standing to sue for their son’s death.)

  Perhaps most difficult for families to accept was that, generally, the law of wrongful death damages in Rhode Island does not compensate families for their understandable grief; rather, it is a purely economic calculation, intended to replace the decedent’s lost net earnings and services to his dependents.

  From his many meetings with victims’ families and plaintiffs’ attorneys, McGovern developed a proposed plan of distribution, which he readily admitted was not perfect, but which, in his view, did rough justice for all. Under that plan, death claims started with a base award of one hundred points, for the decedent’s pain and suffering, loss of earning capacity, and funeral expenses. To that figure were added points for each year that a victim was younger than the median age of persons killed in the fire, in order to reflect additional lost wages and life expectancy. If a decedent left behind a spouse, additional points were added; if he left minor children, yet more points. If he had unusually high earning capacity or education, there was further upward point adjustment.

  Valuing personal injury cases was more difficult. From the outset, families of the dead had trouble accepting that catastrophic injuries have higher value in tort cases than do deaths. This apparent dichotomy reflects both the statutory limit on how death damages are calculated, and the practical fact that the appearance of a seriously burn-scarred survivor can translate into a mammoth jury award.

  When McGovern initially set out, with the assistance of plaintiffs’ counsel, to establish criteria for injury point awards, his early drafts attempted to take into account location of burns, degree of burns, percentage of body involvement, number of grafting operations, days of hospitalization, and character of permanent scarring. The result was an unworkably complex matrix with too much room for subjective opinion. Was a burned hand worth more than a scarred scalp? What if it were the victim’s dominant hand? Is facial scarring on a single woman worth more than similar disfigurement of a married man? Is loss of a hand worth more than loss of an eye? (The entire exercise called to mind the silly insurance policies peddled to schoolchildren in the 1950s, in which loss of “one eye and one finger” had a different payoff from “one ear and one hand.” Beyond their value as deterrents to playing with explosives and machetes, the policy pamphlets made for ghoulishly fascinating third-grade reading.)

  What plaintiffs’ counsel and their clients came to realize after several draft injury point plans had been considered, and rejected, was that the total amount of a victim’s medical expenses bore a rough correlation to the severity and permanence of their injuries. Expensive hospital time directly mirrored the pain and suffering of burn debridement and skin grafting procedures. Rehabilitation stints closely paralleled residual disability and deformity. For this reason, the final McGovern plan came to value personal injuries by awarding one point for every $2,000 of medical expense incurred by the victim. All notions of suffering, scarring, and disability would be subsumed under the single measure of medical expenses. It was not perfect, but it was objectively verifiable and generally fair.

  Verification of each victim’s medical expenses would be performed under the McGovern plan by a court-appointed neutral verification expert, whose team of nurse-consultants was to examine each victim’s completed claim form and supporting medical records. The appointed verification expert, Jeffrey Dahl of Minneapolis, Minnesota, was not to engage in subjective valuation; rather, he would simply determine how many points were s
upported by each claimant’s medical records and verified family facts. Appeals from the Dahl calculations were limited under the McGovern plan to calculation errors only.

  This unseemly translation of death and suffering into point values was performed with cold, mathematical accuracy by the Dahl team. But someone had to do it. The upshot of McGovern’s and Dahl’s work was a plan that finally, and objectively, attached relative values to each Station fire claim (including derivative claims of children and spouses). These values, expressed as percentages of the total of all points awarded to all claimants, could then be applied to whatever settlement fund the plaintiffs’ counsel were able to amass at the case’s conclusion.

  Claimants may not have completely agreed with the legal concepts that determined their share, or with the relative valuations of various injuries and deaths. But to their credit, with $176 million in play, even victims who disagreed with their share under the plan ultimately yielded their own self-interest to the common good. As a result, the McGovern plan was eventually approved by all plaintiffs and adopted by the court in 2008.

  In his final report to the court, special master McGovern described how hard the process had been for the victims — and how well they conducted themselves in the end: “The meetings have been difficult for everyone,” explained McGovern, “because of a realization that no amount of money could possibly be adequate compensation for the horrors caused by The Station Fire. It has taken great fortitude for the beneficiaries and their families to even attend these meetings.” He concluded that, despite these difficulties, “they have comported themselves with poise, fortitude and united purpose.”