Bad optics vs. fiduciary responsibility

Window from which shots were fired into crowded concert. (Pix by Jeff Scheid for NVIndy)

The pro/con format lives at NVIndy.

The online donation-funded news site today features columns by John L. Smith and Elizabeth Thompson taking differing stances on MGM’s decision to try to legally limit its liability for the Oct. 1 shooting that left 58 concert goers dead and hundreds more injured.

Smith makes a cogent argument that the legal maneuver — technically a suit against the victims — is tone deaf and damaging to the brand.

“The legal questions will be determined, but the fallout from the filing of the litigation against shooting victims still in various stages of physical and emotional recovery seems downright cruel,” Smith states. “It’s also terribly risky, and something more than money is at stake.”

Thompson argues that MGM should not be financially liable for the acts of a madman firing from the windows of his 32nd floor room in Mandalay Bay, any more than a convenience store should be liable if someone is shot on its property.

“It is easy to say MGM ‘should have’ noticed (Stephen) Paddock’s activities and prevented his crime,” she writes. “But it is not fair. An unfathomable act was perpetrated. None of us could initially believe it, even as it was happening. One cannot anticipate the unthinkable.”

Frankly, I think she missed a salient argument that MGM bears a fiduciary responsibility to its stockholders and employees to protect the bottom line from financial hemorrhaging. Money if fungible. What goes to cover legal liabilities is not available to pay dividends or wage hikes.

But Smith is right. The damage to the brand can also be costly.

Though MGM clearly bore far greater liability as a result of the 1980 fire that killed 85, Kirk Kerkorian’s rush to settlement may have been both good optics and sound fiduciary responsibility.

By the bye, both columns contained the obligatory disclaimers about MGM being a donor to the website.




5 comments on “Bad optics vs. fiduciary responsibility

  1. Steve says:

    They are doing good things @ The Nevada Independent.

  2. Rincon says:

    In theory at least, plaintiffs have to show negligence. If MGM was following generally accepted protocols, then they should be insulated from liability. Unfortunately, as we have discussed in the past, jury selection procedures often create juries of fairly ignorant, easily persuaded people, especially in cases like this where the only potential jurors that haven’t already heard some of the facts of the case (thereby disqualifying them as I understand it) would be nowhere near representative of the population. Put more directly, assuming a jury trial, it would be difficult to avoid having a jury of oddballs.

  3. From Twain’s “Roughing It”:

    I remember one of those sorrowful farces, in Virginia which we call a jury trial. A noted desperado killed Mr. B., a good citizen, in the most wanton and cold-blooded way. Of course the papers were full of it, and all men capable of reading read about it. And of course all men not deaf and dumb and idiotic talked about it. A jury list was made out, and Mr. B.L., a prominent banker and a valued citizen, was questioned precisely as he would have been questioned in any court in America:
    “Have you heard of this homicide?”
    “Have you held conversations upon the subject?’
    “Have you formed or expressed opinions about it?”
    “Have you read the newspaper accounts of it?”
    “We do not want you.”
    A minister, intelligent, esteemed, and greatly respected; a merchant of high character and known probity; a mining superintendent of intelligence and unblemished reputation; a quartz-mill owner of excellent standing, were all questioned in the same way, and all set aside. Each said the public talk and the newspaper reports had not so biased his mind but that sworn testimony would overthrow his previously formed opinion and enable him to render a verdict without prejudice and in accordance with the facts. But of course, such men could not be trusted with the case. Ignoramuses alone could mete out unsullied justice.
    When the peremptory challenges were all exhausted, a jury of twelve men was empaneled — a jury who swore they had neither heard, read, talked about, nor expressed an opinion concerning a murder which the very cattle in the corrals, the Indians in the sagebrush, and the stones in the streets were cognizant of! It was a jury composed of two desperadoes, two low beerhouse politicians, three barkeepers, two ranchmen who could not read, and three dull, stupid, human donkeys! It actually came out afterward that one of these latter thought that incest and arson were the same thing.

  4. Rincon says:

    Maybe Mark Twain should have been President.

  5. Steve says:

    Maybe he is!

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