Processing Magazine

Anheuser-Busch, beer co. to pay $21M in club fire

May 27, 2008
According to the Associated Press, brewer Anheuser-Busch Inc. and a Rhode Island beer distributor have agreed to pay $21 million to settle lawsuits brought by survivors of a 2003 nightclub fire and relatives of the 100 people killed, according to court papers filed recently.

The February 2003 fire at The Station nightclub in West Warwick began when pyrotechnics used by the rock band Great White ignited flammable soundproofing foam on the club''s walls and ceiling. More than 200 people were injured.

Anheuser-Busch is the latest big-name defendant to settle the case rather than bear the costs of continuing litigation or risk the uncertainty of a jury trial.

The St. Louis-based Anheuser-Busch and its Cranston-based distributor, McLaughlin & Moran, did not admit wrongdoing.

Under terms of the settlement, Anheuser-Busch will pay $5 million and McLaughlin & Moran will pay $16 million.

The latest agreements with plaintiffs'' attorneys mean more than $122 million has now been offered to victims'' families and survivors by more than a dozen defendants, including The Home Depot, which sold insulation used in the club, and Clear Channel Broadcasting, whose local rock radio station promoted the concert.

A group of foam manufacturers agreed earlier this month to settle for $30 million.

More than 300 survivors and victims'' relatives sued dozens of people and companies over the fire. Defendants remaining in the case include the state of Rhode Island, the town of West Warwick and American Foam Corporation, a Johnston-based company accused of selling the flammable foam to the club.

Anheuser-Busch and McLaughlin & Moran were named in the lawsuits because survivors and victims'' families said they helped promote the concert.

Lawyers for the victims say McLaughlin & Moran ran a Budweiser promotion at the show, displayed a Budweiser banner outside the club and developed radio advertisements that aired before the concert.

The lawyers also said Anheuser-Busch allowed its Budweiser trademark to be used at an unsafe event and "without making such minimal inquiry sufficient to discover the dangers of the band''s performance."

In addition, a rock radio station disc jockey who served as the master of ceremonies at the concert was paid by McLaughlin & Moran for his appearance, according to court papers. The lawyers said the DJ introduced Great White and would have been positioned to stop the band from using the pyrotechnics but failed to do so.

The disc jockey, Michael Gonsalves, was among those killed.

McLaughlin & Moran said in a written statement that it was pleased about the settlement and hopes the case will be concluded quickly so the money can be paid out.

Gary L. Rutledge, the vice president for legal and government affairs at Anheuser-Busch Cos., said in a written statement that the company had no responsibility for the fire but was sensitive to the families.

The settlement requires the approval of each person suing as well as the federal judge overseeing the case, among other conditions. A Duke University law professor is devising a formula to split the settlement money among the plaintiffs, and no families or survivors have received any money yet.

The fire also led to separate criminal charges against club owners Jeffrey and Michael Derderian, who installed the foam, and former Great White tour manager Daniel Biechele, who set off the pyrotechnics. All three entered pleas to involuntary manslaughter charges, with Biechele and Michael Derderian each getting four-year prison sentences. Jeffrey Derderian was sentenced to 500 hours of community service and three years probation.

Biechele was released on parole in March after serving 22 months in prison, and Michael Derderian will be freed next year.