By Christopher Palmeri and Chris Dolmetsch

Lawyers, PR experts question wisdom of casino maneuver
‘Rare to see a major brand blisteringly bury itself alive’

It took just minutes for the hashtag #BoycottMGMResorts to appear on Twitter, and for people to declare they would no longer patronize the largest casino owner on the Las Vegas Strip.

“Was going to stay in November already changed my reservations,” a man named Brandon Tur wrote on Twitter. “One of the things you have to see multiple sources to believe it is real,” a woman named Susanne Abrams said.

The reaction to MGM Resorts International’s lawsuits against victims of the worst mass shooting in U.S. history was harsh, and probably not surprising.

“It’s rare to see a major brand blisteringly bury itself alive,” said Eric Schiffer, chairman of Los Angeles-based Reputation Management Consultants. “They were trying to create a chilling effect. Instead, it’s their brand that got chilled.”

MGM — whose Vegas resorts include the MGM Grand, Bellagio and Mandalay Bay, where the Oct. 1 shooting occurred — is seeking a court declaration that it can’t be held liable for deaths, injuries or other damages.

“We are not asking for money or attorney’s fees. We only want to resolve these cases quickly, fairly and efficiently,” MGM said in a statement. Company officials declined to comment for this story.

The Facts

The facts aren’t in dispute: Frequent gambler Stephen Paddock opened fire at festival goers from a 32nd-floor suite at Mandalay Bay, killing 58 and wounding about 500 before he committed suicide. More than 2,500 people have filed or threatened to file lawsuits against MGM, the company said in its complaints.

MGM argues that it hired a company, Contemporary Services Corp., that was certified by the U.S. Department of Homeland Security to provide security at the Route 91 Harvest Festival. As such, according to MGM, it complied with the Support Anti-Terrorism by Fostering Effective Technologies Act, a 2002 law that limits liability arising from mass attacks in the U.S.

In legal documents, MGM has said courts have repeatedly rejected claims of negligence filed after mass shootings, finding there is no “premises liability” where a third party “carried out a cold, calculated plan of extreme lethal violence.” To hold MGM responsible would “saddle businesses across the country with crippling liability for the evil acts of madmen — acts those businesses can, in the end, neither foresee nor prevent.”

MGM has filed at least nine nearly identical suits in federal courts against survivors and victims’ relatives who have sued the company.

A Stretch

Patrick McNicholas, a Los Angeles attorney who represents about 100 of the victims, called MGM’s attempt to use an anti-terrorism law to protect itself from liability “a stretch.” Instead of going after the injured and bereaved, he said, “they could have done it a more humane way.” For example, the company could have filed motions only in cases already in the courts.

In a hearing Tuesday in Los Angeles, attorneys for MGM said that they needed to specifically name the parties in order to establish a single legal ruling that applied to all of them.

The challenge for MGM, as one of its own lawyers acknowledged in a filing, is that the 2002 law “apparently has never been applied by a federal judge,” said Carl W. Tobias, a law professor at the University of Richmond’s School of Law in Virginia. There’s no history to suggest whether the approach will work.

MGM and other casinos stopped marketing their properties for several days in the wake of the shooting, and later with the city’s convention and visitors bureau created videos with local celebrities urging customers to return to America’s gambling capital.

MGM’s Chief Executive Officer James Murren said at a Bloomberg sponsored diversity summit in May that he has been trying to change the culture in Las Vegas.

Now, with the lawsuits making headlines, all that goodwill is at risk.

— With assistance by Jef Feeley

IMAGE: Screen shot from video

For more on this story and video go to: https://www.bloomberg.com/news/articles/2018-07-18/mgm-resorts-suffers-backlash-after-suing-shooting-victims