By Steven A. Minicucci
Administrative/Association Judge
Rhode Island Workers’ Compensation Court

 

The impact of the fire was far-reaching including the horrific deaths, debilitating, and disfiguring injuries, the political and criminal fallout in diminutive Rhode Island which was likened in court to the state’s own version of a 9/11 tragedy. In the aftermath of the fire, Rhode Island tightened its lax fire codes, removed grandfather laws for old buildings, required sprinklers in most all places of public assembly, and reformed the State Fire Marshall’s office. Beyond criminal prosecution of the club’s owners and the band’s manager, the only other legal accountability was found through the prosecution and eventual settlement of civil suits against more than ninety defendants alleged to have varying degrees of liability in causing the calamity. Untreated packing foam misapplied to walls as soundproofing and other foam wall treatments lacking adequate warnings anchored the civil litigation. However, a negligently installed fire alarm which failed to deactivate the air handling system or silence the sound system as it blasted loud music over the alarm sound as intended, the aforementioned lack of sprinklers, faulty building inspections, overcrowding, questionable government and insurance inspections, and a band lighting fireworks off in a confined space were also all alleged to have contributed to the mayhem. Novel promoter liability claims were also advanced with some success.

From the standpoint of workers’ compensation considerations, the two owners of the Station Nightclub business, who are brothers, had failed to obtain legally required workers’ compensation insurance to cover their employees. Ironically, one of the brothers was a local news reporter who was present in his own club on that fateful night filming a news piece on nightclub safety in the wake of a nightclub stampede just a month earlier in Chicago. So, while the brothers were fined for not possessing the required workers’ compensation insurance, they filed for bankruptcy and none of the proceeds of the fines under bankruptcy law were legally permitted to be used to compensate the victim-employees. Instead, they were left without any avenue to collect workers’ compensation death benefits or scarring compensation otherwise available to employees under the workers’ compensation act in Rhode Island.

The state trial lawyer association had tried for years without success to convince lawmakers to create an uninsured fund to provide needed compensation to injured workers who were victimized by unscrupulous employers who tried to sneak by in business without carrying required workers’ compensation coverage. Such action is presumably undertaken by scofflaws hoping to reduce their overhead and render their businesses more competitive or worse, more profitable. This type of unlawful business practice and in some cases coupled with intentional misclassification of employees to avoid insurance, was felt to epitomize the adage “profits over people” by those advocating for establishment of an uninsured employer fund. Uninsured funds in other states cover injured employees with no other recourse against uninsured employers such as the Station Nightclub owners were in this case.

Unfortunately, it took this very public and disastrous fire, littered with senseless death and injury which altered the lives of so many, to silence the previously unyielding opposition. Opponents had for years been defeating the legislation needed to provide some measure of compensation to victim-employees who had no way to pay bills or bury loved ones when employers thumbed their noses at the law requiring them to carry workers’ compensation insurance. Fueled by the wave of reforms introduced in the wake of the Station Nightclub fire, coupled with settlement of the civil suits stemming from the tragedy which freed state and local government to act, in 2007 Rhode Island passed R.I.G.L. § 28-53-1 et al. the Rhode Island Uninsured Protection Fund (UPF). While the funding needed to capitalize this Fund took several additional years to accumulate, the UPF was finally passed by the legislature. The long-perceived short-coming in Rhode Island’s workers’ compensation system was now addressed.

The UPF in Rhode Island is a system that does not provide full compensation benefits for victims who qualify, but it provides something for these workers to feed families and pay bills. Benefits are limited and due to the Medicare Set-Aside concerns of potentially needing to fund a huge set-aside to account for Medicare’s interests potentially exhausting the fund.  Medical expenses are not directly compensated. There is no specific compensation for disfigurement or loss of function provided and each claim is capped with payments not to exceed $50,000 in any one case. Hopefully, as the Fund becomes further capitalized the benefits available from the UPF may be expanded. The thinking after the fire was something for future victims of uninsured employers would be better than nothing.

Any payments made by the UPF are vehemently pursued by the Fund for subrogation reimbursement from the uninsured employer. While this UPF did not help the Station Nightclub employees injured in the fire, it is clearly their legacy and their suffering which helped to provide this remedy for any such future victims in Rhode Island. While this fact provides no true solace to the victims or their loved ones, nor eases their terrible grief, it is certainly one of the small positives to have been born out of this horrendous tragedy.

As Rhode Island reflects upon the passage of twenty years since the awful Station Night Club Fire It is also worth noting that the Rhode Island Department of Labor and Training along with the forces of organized labor, the judiciary and the State Attorney General have since formed a misclassification task force which works tirelessly to address every perceivable loophole and plug any breeches in the legal damn to ensure that all employers who are required to carry workers’ compensation insurance do indeed have it or they face work stoppages, fines, and in some cases criminal prosecution. Small positives born of tragedy.

By: Hon. Steven A. Minicucci, Administrative/Associate Judge R.I. Workers’ Compensation Court. At the time of the Station Nightclub Fire the author was a practicing lawyer who represented several decedents and victims of the Fire in the civil lawsuits as a member of the Plaintiff’s Steering Committee. Also, He was the President of the R.I. Trial Lawyers Association who was involved with a legion of many who worked together to win passage of the UPF in Rhode Island. The author was named to the Bench in R.I. in 2017.