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Broadcaster offers $22 million to Station victims

10:09 AM EST on Thursday, February 14, 2008

By Tracy Breton

Journal Staff Writer

PROVIDENCE — Clear Channel Broadcasting has tentatively agreed to pay $22 million to the victims of The Station nightclub fire, bringing the pool of settlement money offered thus far to $71.5 million.

Lawyers for those who lost loved ones or suffered injuries in the February 2003 nightclub fire sued Clear Channel because it owns Providence radio station WHJY, one of the sponsors of the Great White concert at The Station. The performance began with a burst of pyrotechnics that ignited the club’s foam soundproofing and led to the deaths of 100 people. More than 200 others were injured in the blaze.

One of WHJY’s disc jockeys, Michael Gonsalves, (known as Dr. Metal) introduced Great White on stage the night of the fire. He was one of those who died in the blaze.

Clear Channel Broadcasting is a division of the San Antonio, Texas-based Clear Channel Communications, a publicly traded company that is the nation’s largest radio station owner. Clear Channel owns and operates more than 1,200 radio stations in the United States and was one of the companies with deep pockets that lawyers for the fire victims had targeted in hopes of securing large damages.

The settlement offer covers Clear Channel, WHJY and Clear Channel’s subsidiary, Capstar Radio Operating Co., the successor to WHJY Inc., all of which were named as defendants in the federal lawsuits brought by the fire victims.

Andy Levin, chief legal officer for Clear Channel Communications, said in a news release late yesterday that Clear Channel wasn’t responsible for the fire but wanted to help bring a sense of closure to the victims.

“We continue to be deeply saddened by the tremendous harm suffered by the victims, their families, and the community as a result of this tragic fire,” he said. “While Clear Channel had no role in causing or contributing to this fire, we are pleased to resolve these claims and, hopefully, contribute in some way to a sense of resolution for the affected victims and their families.”

In the lawsuits, the victims allege that Clear Channel Broadcasting was negligent and partly to blame for the deaths and injuries suffered by the fire victims because it “directly manages and controls the day-to-day affairs” of WHJY, including “decisions made with respect to promotion and sponsorship of concerts such as that which occurred at The Station on February 20, 2003.”

The victims allege that WHJY — which is named as a separate defendant — “knew or should have known that the concert and band it promoted” at The Station the night of the fire “was one that customarily utilized pyrotechnics and that Great White had repeatedly, openly and illegally used unlicensed pyrotechnics on its tour on numerous occasions” before Feb. 20, 2003, and had planned to set off illegal fireworks the night the club burned down.

The victims’ lawsuits also allege that WHJY and its disc jockey, Gonsalves, “had both the authority and opportunity to stop or delay Great White’s performance over any issue relating to safety or equipment” but failed to do so.

Clear Channel Broadcasting and Capstar had asked the federal court to dismiss the claims against them, but in a decision issued in 2005, Senior U.S. District Judge Ronald R. Lagueux, who is overseeing the fire victims’ claims, refused to throw them out.

In a written decision, Lagueux said, “To the extent that plaintiffs can establish that WHJY had control over the planning and operation of the concert, then the court can find that WHJY owed a duty … to the plaintiffs. That duty, if proven to exist, may have been breached when WHJY failed to take any steps to prevent the ignition of the fireworks inside the small and crowded nightclub.”

The lawsuits claim that WHJY advertised its sponsorship of the Great White concert, hung a banner outside The Station inviting people to “party with WHJY,” distributed free tickets, met with other sponsors to coordinate promotional activities and provided a disc jockey to serve as master of ceremonies.

Clear Channel’s proposed settlement agreement will have to be approved by Lagueux — who has yet to sign off on any of the settlement offers made by other parties — before any of the victims can receive any money. The judge must make a determination that each settlement offered is being made in good faith before disbursement of any funds. And no funds will be disbursed until a formula for disbursement is devised and approved by the court.

A court-appointed special master, Duke University law Prof. Francis E. McGovern, has had initial meetings with the fire victims and their families. The victims’ lawyers rented meeting space in late December and early January at the Knight campus of the Community College of Rhode Island and at the Crowne Plaza Hotel in Warwick, according to the victims. They say they were told at the meeting that each of them would get a detailed questionnaire to fill out. Once that information is provided, McGovern will develop a matrix to apportion damages that would be awarded to each plaintiff out of the pool of settlement money and later, whatever damages are awarded by a jury, if any, if the case ever goes to trial. No trial date has been set.

CLEAR CHANNEL is one of nearly 100 defendants targeted by the victims’ lawyers in the 10 lawsuits currently pending in federal court. The plaintiffs include surviving spouses, parents and minor children of people who died or were injured in the catastrophic blaze.

The settlement offer from the media giant is one of several currently on the table. Two weeks ago, LIN Television Corporation, as owner of WPRI-TV, tentatively agreed to pay $30 million to the fire victims in settlement of their claims. The tentative agreement followed allegations that the station’s cameraman, Brian Butler, paused in an exit to film the chaos as patrons were trying to escape the fire, delaying their egress and causing more deaths — something the television station and Butler continue to deny. The proposed settlement agreement from LIN, if approved by the court, would remove Butler as a defendant in the lawsuits. It also covers alleged wrongdoing by Jeffrey Derderian in his capacity as a reporter for WPRI-TV, but not in his position as an owner of The Station nightclub, so he would remain as a defendant in the victims’ suits.

Also pending approval by Lagueux are settlement offers from Home Depot and Polar Industries, which together have offered $5 million to the fire victims. According to the lawsuits, Polar Industries, a Connecticut company, manufactured and sold the PolarGuard polystyrene insulation that was purchased at Home Depot in 2000 by Howard Julian, who owned The Station at the time. Julian installed it in the exposed ceiling of the drummer’s alcove and elsewhere in the nightclub, according to the victims’ lawsuits.

Then, the lawsuits say, after Julian sold the club to Michael and Jeffrey Derderian, the Derderians went to Home Depot and bought Celotex SoundStop board, which they installed on the ceiling of the drummer’s alcove and in other places in their club. Both products, the lawsuits contend, were “unreasonably dangerous and defective.”

Last September, several other defendants together offered $13.5 million in settlement money. They include Luna Tech Inc., of Alabama — and two of its European subsidiaries — which according to the lawsuits, manufactured the fireworks used by Great White the night of the fire; High Tech Special Effects, a Tennessee company that allegedly sold the fireworks to Great White; Celotex Corp., which manufactured the SoundStop board the Derderians installed in their club; Triton Realty and Raymond Villanova, owners of the building where The Station was located; and Joseph LaFontaine, of Warwick, owner of the company that installed the fire-alarm system at the club when Julian owned it.

In addition, the court registry is holding $1 million from Great White — which would be added to the pool of settlement money if the victims agree to drop their claims against the band members.

tbreton@projo.com