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Judge Says Case Could Be Biggest Lawsuit Ever

March 19, 1985

LAS VEGAS, Nev. (AP) _ The issues in a $342,000-a-day trial that could take months to determine insurance liability in the MGM Grand Hotel fire are beyond the grasp of jurors and the case should have been settled, judges say.

″In terms of complexity and size this may be the biggest lawsuit ever tried anywhere,″ Nevada Supreme Court Chief Justice Charles Springer told dozens of attorneys on hand for the opening of the trial Monday.

District Judge Paul Goldman, who is overseeing the legal tangle, said the trial could run from five to 14 months, with legal fees running $342,000 a day for a total of over $60 million if the trial runs eight months.

At issue is a unique $170 million retroactive insurance policy the hotel purchased following the Nov. 21, 1980 fire that killed 87 and injured hundreds of others.

″This case is unique in that it is the only time in history such retroactive insurance has been written,″ Goldman said Monday. ″And this is also the largest trial we know of in terms of complexity.″

The hotel is suing and being counter-sued by dozens of insurance companies who were involved in the retroactive policy.

″We think we have 63 companies involved,″ Goldman said. ″There are a kaleidoscope of cases against each other.″

The complexity of the case was demonstrated Monday when officials began the tedious process of selecting 14 jurors from a panel of 100 prospects jammed into a meeting room to hear Goldman explain the details of the case.

It will be ″almost impossible″ for any juror to grasp the legal complexities that will be presented in the months ahead, and once the jury rules, ″there’s no doubt that decision will go to appeal,″ Goldman said.

The judge criticized attorneys for letting the case go to trial, saying it should have been settled out of court.

Millions of pages of documents have been assembled in special meeting rooms adjoining the main courtroom, which is just off the basketball arena at the Thomas and Mack Center on the University of Nevada-Las Vegas campus.

In the months following the disaster, the MGM was hit with 1,357 death and injury claims - ranging from a few thousand dollars to several million each. At the time the hotel had $30 million in liability insurance.

Knowing that would be a fraction of the money needed to settle all the claims, the hotel purchased $170 million worth of retroactive insurance for $38.3 million.

The insurance companies were stunned in early 1983 when the MGM agreed to pay $75 million as its share of a settlement figure that has now topped $160 million. One hundred fifteen companies ranging from architects to contractors and equipment manufacturers are contributing $85 million of that.

The insurance companies involved in the $170 million retroactive package have refused to pay, contending that the MGM settled early and for excessive amounts.

MGM attorney William Shernoff of Los Angeles said the insurance companies are using a smoke screen in an effort to avoid payment.

″They guessed wrong on the amount and on the time,″ Shernoff said.

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