The company that owns the Las Vegas hotel where a gunman opened fire from his room onto a country music festival two years ago, killing 58 and wounding hundreds of others, agreed on Thursday to pay up to $800 million to settle lawsuits filed by victims.
MGM Resorts International, which owns the hotel, Mandalay Bay, announced the settlement, ending what had become a closely watched case about liability in mass shootings.
The killer, Stephen Paddock, holed up inside his room on the 32nd floor with a cache of weapons and fired at thousands of music fans as the night’s final concert began. It was the deadliest mass shooting in modern American history.
Thursday’s settlement appears to resolve litigation that had raised novel and significant issues of law, including how culpable large companies and property owners are in mass-casualty attacks.
While there is often litigation after mass shootings — such as lawsuits that parents filed against the companies that manufactured and sold the semiautomatic rifle used in the 2012 massacre at an elementary school in Newtown, Conn. — legal experts said the scope and nature of the legal issues raised in the MGM case were without precedent.
Faced with potentially hundreds of lawsuits, MGM sued more than 1,000 victims in July 2018, in an aggressive but untested strategy to short-circuit the cases and shield itself from liability.
Robert Eglet, one of the lawyers for the victims, said on Thursday that the settlement would be in the range of $735 million to $800 million and would cover nearly all of the lawsuits and claims against MGM related to the massacre.
“While nothing will be able to bring back the lives lost or undo the horrors so many suffered on that day, this settlement will provide fair compensation for thousands of victims and their families,” Mr. Eglet said in a statement, adding that the deal “represents good corporate citizenship” on the part of MGM.
Another lawyer for the plaintiffs, Craig Eiland, said that the settlement was expected to cover up to 4,500 people, which he said would include everything “from death cases all the way down to those who had PTSD.”
Passing the two-year statute of limitations for filing new claims — which happened this week — was critical to finalizing the settlement, Mr. Eiland added.
Depending on the settlement’s final cost, all or nearly all of the money paid to the victims will come from MGM’s insurers. The company’s coverage limit for this case was $751 million, so the most MGM will have to pay would be $49 million.
An independent claims administrator, who will need to be approved by a judge, will review medical bills and other expenses, as well as the circumstances of each victim, before deciding how much each will receive.
It was not immediately known whether any of the victims who have filed claims will opt out of the settlement and instead take their cases to trial. How many eventually agree to participate in the settlement will determine the precise amount that MGM’s insurers — and possibly the company — will end up paying. The company predicted that the process would be completed by the end of 2020.
On Thursday, MGM’s chief executive, Jim Murren, called the agreement “a major step, and one that we hoped for a long time would be possible. We have always believed that prolonged litigation around these matters is in no one’s best interest.”
At first, MGM responded with a hardball legal strategy when claims poured in from the injured and the relatives of the dead, who accused the company of negligence in allowing Mr. Paddock to stockpile high-powered rifles and thousands of rounds of ammunition in his hotel room.
It had sought to block victims from recovering any money from the company, arguing that a little-known federal law passed in the aftermath of the Sept. 11, 2001, attacks shielded MGM from liability because the shooting qualified as an “act of terrorism” under that federal law’s expansive definitions.
Because of that — and also because a security firm hired for the music festival possessed a special designation from the Department of Homeland Security — MGM argued that its interpretation of the law meant that it should not have to pay damage claims to injured concertgoers.
The federal law is known as the Support Antiterrorism by Fostering Effective Technologies Act, or Safety Act. It was believed to be the first time that anyone had sought to use the law this way to defend lawsuit claims in the aftermath of a major mass shooting.
As part of its strategy to have the company declared immune from liability by funneling cases to a federal court where that issue could be litigated, MGM sued more than 1,000 people who had already filed cases or indicated an intent to pursue claims against the company. Though the company’s lawsuits did not seek any money, the strategy stirred anger against MGM.
Last October, however, a panel of federal judges denied MGM’s attempt to consolidate the cases in one court, saying that because “the contours of this litigation are not yet apparent, centralization is inappropriate.” The question of whether the Safety Act shielded MGM from liability was never decided.
By February the two sides were in mediation, and by May the rough outlines of the settlement had already been worked out.
“MGM, and also the victims and their lawyers, recognized that years of litigation did not make sense, and there was risk in taking a case forward, and that it would take a tremendous emotional toll on the victims, the community and our company,” John McManus, MGM’s general counsel, said in an interview on Thursday.
“We wanted a consensual resolution to this case,” he added. “We did not want to be fighting with the victims and their families.”
Several factors most likely influenced MGM’s decision to settle, including bad publicity spurred by the company’s legal tactics and that they were able to reach an agreement with the plaintiffs’ lawyers for right around the limit their insurers were willing to pay, said Carl Tobias, a tort-law professor at the University of Richmond law school.
“I think they reached a tipping point, so the settlement made sense, especially since they’re not really paying anything out,” said Mr. Tobias, who previously taught law at the University of Nevada, Las Vegas, near where the attack took place.
While the initial strategy made it seem like “they were going to defend this to the end,” he added, “the settlement is a sign that there were other important factors to be considered.”
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