MGM settlements set bad precedent

Your kids and their friends are playing on your front lawn. Suddenly, a lunatic appears and starts beating them, inflicting severe injuries. Police determine that it was a random act, and that the perpetrator had no motive.

Not only are you sued for “negligence” by the victims’ families – since you had an “obligation” to “prevent” it – but are slapped with lawsuits by passersby who became “traumatized” upon witnessing the incident.

Sound fair? Of course not. After all, how could you possibly have anticipated such an attack? Even if you posted armed guards next to your children 24/7, you’d only be mitigating risk, since no amount of protection is “guaranteed.” (That was proven when an intruder made it deep inside the heavily guarded White House before being discovered).

But in the real world, we don’t employ such extreme measures. They’d be prohibitively expensive, but more important, would prevent us from living our lives freely.

So how is it that MGM Resorts International will pay almost $800 million in settlements stemming from the 2017 shooting at its Mandalay Bay Las Vegas hotel – since there is no difference between the front yard and Vegas attacks?

Trial lawyers wouldn’t be so successful if business leaders had the guts to fight them, costs be damned. But almost none do. Instead, CEOs typically heed the bad advice of counselors, CFOs, and marketing “gurus” to settle, get the lawsuit off the books, and limit “bad PR.”

From a short-term financial perspective, that approach is understandable. But when a lawsuit is frivolous, settling is the worst move. For all the advanced degrees held by business executives, it’s truly amazing how little is known about crisis management – and common sense.

Take MGM. They now get the worst of all worlds. At first, the company made the correct argument that it was not liable for the nation’s worst mass shooting. But then they caved to – what else? – a small but vocal social media community claiming that MGM was being heartless by not taking responsibility and compensating victims.

Now, it will pay at least three-quarters of a billion – but insists that the settlement isn’t an admission of liability.

You pay a massive sum (actually, their insurance company will), set a new landmark for settling insane lawsuits, and are viewed in a bad light anyway. For a casino business that prides itself in playing the odds, how that is a “win” for the house remains a mystery.

The shooter killed 58 and wounded 800. So how can there be more than 4,000 claimants? The answer, not surprisingly, is that many claim that they were “traumatized” and suffer from PTSD-like symptoms. No one disputes that people witnessing such horror were affected, but that doesn’t mean they should be financially compensated. Where do we draw the line? What about people who watched it unfold on TV? Or families who couldn’t get in touch with loved ones? And what about people who witness a car accident? Should everybody experiencing anxiety be enriched? Not to minimize people’s trauma, but let’s not forget how resilient human beings are. Life goes on for survivors, and quite frankly, no amount of money will help them “cope.” Enough is enough with the woe-is-me entitlement sweeping America.

Under the trial lawyer’s rationale of “liability,” why not sue the restaurants that gave the shooter sustenance, his car company (since he transported guns in his vehicle), the cell phone company (for information he needed), and, of course, the gun and ammunition manufacturers.

MGM did nothing – zero – to facilitate, enable, or assist this lunatic. America’s most basic principle is self-accountability, but that is being whittled away when cases such as these get settled.

Unlike the Exxon Valdez disaster or the BP oil spill, this is not a case of negligence, and MGM should not be held accountable for a murderer’s actions.

If MGM had stuck to its guns, it’s a good bet it would have won. But in playing a bad hand and caving, it opened the door for more preposterous lawsuits, at the expense of every American.

And you don’t need to be a gambler to know that.