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MGM sues Vegas victims in hopes of limiting liability

People carry flowers as they walk near the Mandalay Bay hotel and casino in April during a vigil for victims and survivors of a mass shooting in Las Vegas. MGM Resorts International has sued hundreds of victims of the deadliest mass shooting in modern U.S. history in a bid to avoid liability for the gunfire that rained down from its Mandalay Bay casino-resort in Las Vegas. (John Locher/AP file photo)

People carry flowers as they walk near the Mandalay Bay hotel and casino in April during a vigil for victims and survivors of a mass shooting in Las Vegas. MGM Resorts International has sued hundreds of victims of the deadliest mass shooting in modern U.S. history in a bid to avoid liability for the gunfire that rained down from its Mandalay Bay casino-resort in Las Vegas. (John Locher/AP file photo)

MGM Resorts International sued the victims of a Las Vegas music festival mass shooting in an effort to block any potential compensation claims against it.

The owner of the Mandalay Bay hotel claims a 2002 federal statute wipes out liability for any company that adopts “anti-terrorism technology,” which it says it did. It asked a federal judge in Nevada for a declaration that the company isn’t liable.

After Stephen Paddock opened fire at festival goers from the Mandalay Bay hotel, killing 58 and wounding about 500, more than 2,500 individuals brought, or threatened to bring, lawsuits against MGM, the company said in its complaint, filed July 13 in Las Vegas federal court.

The casino operator argues that because it hired a company certified by the U.S. Department of Homeland Security to provide security at the Route 91 Harvest Festival to “help prevent and respond to mass violence,” it’s not liable.

The law “precludes any finding against” MGM and other defendants and bars victims from targeting the companies’ insurance policies as well, according to the suit. Debra DeShong, an MGM spokeswoman, didn’t immediately return a call or an email Tuesday for comment on the suit.

Robert Eglet, a Las Vegas-based lawyer for the shooting victims, told the Las Vegas Review Journal the suit targeting the 800 survivors of the mass shooting was misfiled in federal court. Since MGM is incorporated in Nevada, suits over the shooting must be heard in state court and the company’s countersuit amounted to a “blatant display” of judge shopping, he told the paper.

Las Vegas police commanders say Paddock shot festival goers from the windows he broke out of his 32nd-floor suite at the Mandalay. The room was filled with more than 20 automatic weapons. Paddock, 64, killed himself before authorities could capture him. His victims included a U.S. Navy sailor, a California firefighter and an off-duty Las Vegas police officer.

Police haven’t identified Paddock’s motive for opening fire on the crowd.

Insurance costs

Insurance executives have estimated the industry may have to shell out more than $1 billion for the massacre.

The shooting will drive up man-made disaster costs for insurers, after losses for such incidents worldwide totaled $7.8 billion in 2016, according to data from reinsurer Swiss Re. Brokers and lawyers expect claims related to the Las Vegas incident from life and health insurance, and class-action lawsuits, to continue for years.

Long-term costs insurers face for incidents like the one in Las Vegas include physical damage, hotel and event planner liability, workers’ compensation and festival refunds, according to Peter Williams, global leader for live events at Allianz SE’s global corporate and specialty unit.

The U.S. Treasury Department has a terrorism insurance program to help shield insurers from losses, but President Donald Trump and the Department of Homeland Security have not declared the Las Vegas shooting to be an act of terrorism. The Sept. 11, 2001 attacks, the first to be covered by the program, resulted in $43.6 billion of property, life and liability claims. It was the second costliest insurance event after Hurricane Katrina, which totaled $49 billion.

Events like the Vegas tragedy “touch a number of policies, some of which you don’t necessarily see immediately,” Allianz’s Williams said. “It takes time to work out exactly what it’ll really cost.


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