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Hard Rock Hotel collapse | Mediator named to settle dozens of civil claims

Mike Brandner Jr., who represents more than 40 injured construction workers, said the move toward a settlement is welcome after years of stagnation.

NEW ORLEANS — Nearly three years after the partially built Hard Rock Hotel collapsed and killed three construction workers, a mediator is trying to settle dozens of claims filed in Orleans Parish Civil District Court against the developers and construction contractors, ranging from business losses to worker injuries to death claims.

Judge Kern Reese appointed John Perry Jr., a Baton Rouge mediator, as special master to arbitrate a settlement between a committee of 13 plaintiffs’ attorneys and the companies involved in building the 18-story hotel that crumbled on Oct. 12, 2019. 

“It may be easy to settle with some of the defendants and very difficult to settle with other of the defendants,” Perry said in an interview Friday. “And we're just going to have to get into it in a traditional negotiation to make that determination.”

Reese signaled early on that he wanted the civil cases settled altogether, but there has been almost no movement for the last two years, and no witnesses have even testified in any depositions. The developers of the project, 1031 Canal Development, and owner Mohan Kailas have negotiated settlements in some of the cases individually, with Perry’s help.

“1031 Canal has worked closely with special master Perry to resolve multiple claims and looks forward to continuing that effort,” attorney Paul Thibodeaux said.

A separate criminal investigation, led by Orleans Parish District Attorney Jason Williams, has yet to produce any charges for negligence in possibly causing the accident. And the U.S. Occupational Safety and Health Administration issued safety violations against the designer, prime contractor, and some subcontractors, but lead engineer James Heaslip is still appealing his case.

Perry sent a letter Thursday to attorneys representing hundreds of plaintiffs who claim to have been damaged by the devastating collapse, which killed construction workers Anthony Magrette, Quinnyon Wimberly, and Jose Ponce Arreola, injured many others, damaged nearby property, and shut down a major intersection in downtown New Orleans for more than a year.

Perry’s letter says he will mediate settlement negotiations and, if a settlement is reached, he will run a compensation program to distribute any money put up by the defendants’ insurance companies. He also asks plaintiffs’ attorneys to sign a consent form by Sept. 28 agreeing to recommend that their clients participate in the compensation program, even though no settlement has been proposed yet.

“Hopefully we'll be able to put a program in place that's acceptable to all participants in the very near future,” Perry said. “And at that point, we'll be in a position to try to negotiate the claims with the defendants.”

Mike Brandner Jr., who represents more than 40 injured construction workers, said the move toward a settlement is welcome after years of stagnation.

“For our clients, it’s a light at the end of the tunnel,” Brandner said.

Perry’s letter indicates that if a settlement is reached and Reese agrees it’s fair to all parties, anyone with a claim who chooses to participate will be able to avoid protracted litigation by agreeing to participate in the claims process, but in so doing they will also sign away the right to sue and will have to accept the payment amount determined by Perry.

A consent form shared by Perry states he and his staff will review the claims and evidence submitted and make preliminary awards from a settlement fund. Claimants will be able to object and request reconsideration, but once Perry issues final awards, his “determinations will be final,” the document says. “There will be no appeal to any court or any other authority.”

Claimants do have the option of opting out of any settlement and continuing to pursue individual claims in court.

“But if they have to take 100 depositions and hire 25 experts and start getting trial dates and working their way through the traditional process, this will take years,” Perry said. “And we're trying to get this plane landed and give everyone an opportunity to resolve these claims efficiently and quickly.”

Reese has already ordered 4 percent of all claims payments to go into a pot for the plaintiffs’ committee to cover litigation costs, mostly to pay for storage of evidence recovered from the collapse site.  

RELATED: '300% overstressed' beams under 16th floor caused Hard Rock collapse, engineer says

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RELATED: City Council to require engineering review of high-rises after Hard Rock collapse

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