Posted 4:55 p.m.
PROVIDENCE -- The company that owned The Station nightclub has asked the
Workers' Compensation Court to let it complete an appeal before the court
tries to enforce a $1.06 million penalty for failing to carry workers'
compensation insurance.
On July 24, Workers' Compensation Court Judge Bruce Q. Morin upheld that
penalty against Derco LLC, the company that owned the West Warwick club,
which was the scene of a Feb. 20 fire that killed 100 people and injured
about 200.
In the aftermath of the fire, the Derderians' company received the
largest penalty ever imposed by the state Department of Labor and
Training in a worker's compensation case and the maximum allowed by
state law.
Morin also ruled that state law allows for the assessment of a penalty
personally against the nightclub owners, Jeffrey and Michael Derderian.
Morin sent that aspect of the case back to the state Department of Labor
and Training, ruling that a hearing officer would have to determine
whether the Derderians should have to pay any or all of the fine
themselves.
The Derderians, in a separate petition, have also asked the court to
hold off on that action pending their Aug. 5 appeal to the court's
appellate division.
The requests for a stay of Morin's rulings are scheduled for a hearing
at 9 a.m. on Aug. 25 before Morin.
As it did previously, Derco argues in court papers filed that the fine
is excessive.
"The petitioner claims that the amount of the penalty violates the due
process, equal protection clauses of both the United States and Rhode
Island Constitutions, as well as the excessive fines clauses of the
United States and Rhode Island Constitutions and the Rhode Island
Constitution's requirement that all punishments be proportionate," says
the petition fled by Kathleen M. Hagerty, lawyer for Derco.
Hagerty argues that "a stay is reasonable" because payment of the
penalty would be made to the state general fund, not an injured claimant
or employee.
In their petition, the Derderians claim that Morin was wrong in ruling
that they could be held personally responsible.
The Derderians say that state law "does not authorize the imposition of
administrative penalty on any party other than the corporate employer."
The Derderians say it makes sense to hold off because "the decree would
entail proceeding with a hearing at the administrative level while the
decree is on appeal to the appellate division.
"The parties would be required to prepare for and conduct a hearing
which would ultimately become futile if the appellate division accepts
the hearing officer's reading of the statute and the petitioner's
position on appeal," says the petition.
The petition was submitted by Hagerty, and lawyers Jeffrey B. Pine and
Thomas M. Dickinson of Pine's office.
