IN THE NEWS WITH ASR

The number of mass shooting events depends upon how you define them. For example, crime violence research group Gun Violence Archive defines a "mass shooting" as four or more shot (injured or killed) in a single incident, at the same general time and location, not including the shooter.  By this definition, there have been 2,697 mass shootings in just 6 years (2014-2020) and the numbers for 2021 are adding up quickly as well.

According to the FBI definition, between 2000 and 2008, there were about seven active shooter events per year, while from 2009 to 2016 there were 153 such events or about 19 per year.  In 220 incidents that occurred from 2000 to 2016, nearly half (107) took place in an education, retail, or government/military setting. And an incident can occur quickly — often in less than 15 minutes — during which time an assailant can cause significant harm. ¹ 

Economic impacts. No matter where they occur, mass shootings cause a wide range of damage, loss, and expense for victims and impacted businesses. The economic losses can include ²:

• Medical costs
• Funeral expenses
• Mental health counseling
• Property damage (including repair and replacement of buildings)
• Cleanup and extra expense
• Additional security and security upgrades
• Crisis management
• Business interruption or event cancellation
• Workers’ compensation, e.g., injury, death benefits, mental health (varies state by state)
• Fines/penalties

Litigation over mass shootings. Mass shooting incidents also can lead to significant and unique litigation exposures. The businesses and people that may be targeted for liability in a mass shooting event are varied and depend upon the circumstances, and potentially can include ²:

• Owners and operators of businesses or facilities where the shooting occurs
• Event promoters
• Security firms
• Law enforcement
• Parents/relatives of the shooter
• Employers
• Mental health providers
• Retailers or gun shops where the assailant acquired weapons (if acquired illegally)
• Straw purchasers
• Organizations that fail to report disqualifying information to authorities
• Anyone in a position to know of and/or intervene in the shooter’s plan

In addition, the first-party loss and workers’ compensation elements of such events can be equally significant. ³ 

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Foreseeability

Insurers’ historical lack of focus on exposure from mass shootings is due, in part, to the fact that, in most jurisdictions, a business owner is not liable to a person injured by the criminal acts of a third party unless the criminal act was foreseeable. Section 344 of the Restatement (Second) of Torts provides in relevant part:  Since the possessor is not an insurer of the visitor’s safety, he is ordinarily under no duty to exercise any care until he knows or has reason to know that the acts of the third person are occurring, or are about to occur.

Only in situations where the place or character of an owner’s business, or its past experience, is such that it “should reasonably anticipate . . . criminal conduct on the part of third persons, either generally or at some particular time,” may an owner be under a duty to take precautions against it and to provide a reasonably sufficient number of servants to afford reasonable protection. Similarly, most states do not impose a special duty on an employer to protect an employee against criminal actions on the employer’s premises unless the act is foreseeable. 

Foreseeability of mass shootings. Applying these principles, courts historically have found the actions of mass shooters to be so unexpected and remote that, as a matter of law, no rational juror could find that a business owner should have foreseen them.

An early example of this is Lopez v. McDonald’s Corp., a case arising out of the 1984 mass shooting at a McDonald’s restaurant in San Ysidro, California, where an armed assailant indiscriminately shot patrons and employees and left 21 people dead and 11 others injured (193 Cal. App. 3d 495, 238 Cal. Rptr. 436 (1987). Victims and survivors sued McDonald’s on theories of negligence and premises liability, arguing that the restaurant was in a high-crime area and negligent in failing to have private security. In response, McDonald’s claimed that the incident was so remote and unexpected that it fell outside of the restaurant’s general duty to protect patrons from reasonably foreseeable criminal acts.  On appeal, the court of appeal agreed that the attack was not foreseeable as a matter of law and that “the general character of McDonald’s nonfeasance did not facilitate its happening.” 

Duty to warn. Claims premised on a duty to warn have fared no better. In Commonwealth of Virginia v. Peterson, a case arising out of the 2007 slayings of 32 people on the Virginia Tech campus, the Virginia Supreme Court began its analysis from the “general rule” that a person does not have a duty to warn or protect another from the criminal acts of a third person unless a special relationship exists (Commonwealth of Va. v. Peterson, 749 S.E.2d 307, 311 (Va. 2013). After reviewing numerous cases where no duty to warn was found to exist, and considering the information known to the university at the time of the shootings, the Virginia Supreme Court concluded that even under “the less stringent standard of ‘know or have reasonably foreseen,’ there . . . [were] not sufficient facts from which the court could conclude” that a duty to warn students about potential criminal acts of a third party arose as a matter of law.

Times are Changing and Risk is Now Becoming Foreseeable

As mass shooting incidents become more frequent and widely reported, the perception of whether such events are foreseeable has begun to shift. There were signs of this in Axelrod v. Cinemark Holdings, Inc., a case that arose from the shootings at the movie theater complex in Aurora, Colorado, in July 2012 (65 F. Supp. 3d 1093 (D. Colo. 2014).  The court there observed that incidents that were unlikely to occur in say 1984, are not necessarily as unlikely in current times.

Based on “the grim history of mass shootings and killings that have occurred in more recent times,” together with evidence of warnings that Homeland Security issued to theaters before the shooting and other policies that the theater had in place, the Alexrod court denied the theater owner’s motion for summary judgment, finding that plaintiffs had presented enough evidence to create a genuine dispute of fact as to whether defendants knew or should have known of such risks.  The theater owner in Alexrod ultimately was granted summary judgment on the issue of causation after the court found that a reasonable jury plausibly could not find that the theater’s actions or inactions were a substantial factor in causing the harm (Nowlan v. Cinemark Holdings, Inc., 2016 WL 4092468 (D. Colo. June 24, 2016). 

But signs of a shift continue to show. in 2020, in Wagner v. Planned Parenthood Federation of America, Inc., the Colorado Court of Appeals was asked to answer these same questions in connection with a 2015 mass shooting at the clinic of a nonprofit provider of family planning services.  The plaintiffs in Wagner had presented specific evidence that the risk of an active shooter was known to the owner of the facility, as well as expert testimony regarding security measures that the clinic could have taken that might have prevented the attack or mitigated its consequences.

After reviewing the history of decisions addressing foreseeability and causation, including Lopez and Alexrod, the court of appeals reversed the lower court’s finding that the shooting was not foreseeable as a matter of law. The court of appeals went one step further and reversed summary judgment for the defendant on the issue of causation, concluding that the trial court erred in determining as a matter of law that the defendant’s “contribution [was] infinitesimal as compared to [the shooter’s actions]” and instead holding that a jury could conclude that the defendant’s conduct was a substantial factor in the loss. More on the case here.

Insurance Coverage for Mass Shootings

Secondary actors: covered, but beware of exclusions. Coverage for third parties under separate liability policies generally is not impacted by the intentional nature of the underlying act. Thus, the negligence of a business in failing to warn or prevent an attack generally will qualify as an “accident” or “occurrence” that an insurer is obligated to defend unless some broader exclusion applies. One such exclusion is the “firearms” exclusion, which excludes coverage for bodily injury arising out of the “manufacture, importation, sales, distribution, gunsmithing, ownership, maintenance, or use of firearms or weapons.” In a recent decision, the U.S. District Court for the Middle District of Georgia denied coverage to the owner of a bar where a fatal shooting occurred, finding that the firearm exclusion in the policy applied to anyone’s use of a firearm (See, e.g., Hudson Specialty Ins. Co. v. Snappy Slappy LLC, No. 5:18-CV-00104-TES, 2019 WL 1938801, at *1 (M.D. Ga. May 1, 2019) (granting motion for reconsideration).

The number of occurrences. Another important coverage issue in mass shooting cases is the number of occurrences. The number of occurrences comes into play where the insurance policy contains a “per-occurrence” limit of liability that is less than the policy’s aggregate limit. In this situation, a finding that the underlying claims arose from multiple occurrences expands the coverage available—at least until the total amount paid reaches the aggregate policy limit. Of course, if the policy does not contain an aggregate limit, the scope of coverage may be limited only by the number of occurrences (See, e.g., Mason v. Home Ins. Co., 532 N.E.2d 526, 527–28 (Ill. App. Ct. 1988). Conversely, if the policy contains a high retention or deductible written on a per-occurrence basis, a finding of multiple occurrences can reduce significantly the insured portion of a loss (Nicor, Inc. v. Associated Elec. & Gas Ins. Servs. Ltd., 860 N.E.2d 280, 287 (Ill. 2006)).

Most jurisdictions recognize a relationship between the number of occurrences and the insured’s proximity to the act of shooting. If the event is viewed from the perspective of the perpetrator, there is a better argument for more occurrences. Alternatively, if the event is viewed from the perspective of another party—a business or a family member—there is a stronger argument for a single occurrence.

The number of occurrences often comes down to whether a jurisdiction follows the “cause test” in determining an occurrence or focuses on the resulting injury. A substantial majority of jurisdictions apply the cause test, which determines the number of occurrences based on the cause of the injuries or damages. The minority rule is the “events test,” which focuses on the event for which the insured is held liable (e.g., a claimant’s injury or death at the hands of the shooter) rather than some earlier moment in the causal chain.

Even among jurisdictions that follow the cause test, however, there is significant variation. Many courts identify a single underlying cause (e.g., the insured’s failure to warn) to which all resulting injuries are attributable. For instance, in Donegal Mutual Insurance Co. v. Baumhammers, the parents of a shooter were sued by victims of their son’s two-hour, three-township shooting spree for negligence in failing to confiscate their son’s weapon and notify law enforcement and mental health care providers of his unstable condition (938 A.2d 286 (Pa. 2007)). Despite the different locations and times between shootings, the court rejected the argument that there were six occurrences. Because coverage was predicated on the parents’ inaction, and the resulting injuries to the several victims stemmed from that one cause, the court reasoned that the parents’ alleged single act of negligence constituted one accident or occurrence under the policy.

Similarly, in RLI Insurance Co. v. Simon’s Rock Early College—a case involving a campus shooting spree that lasted 18 minutes, spanned a quarter mile, and resulted in two killed and four injured—the college’s excess insurer sought a declaration that the underlying aggregate limit of $3 million applied (RLI Ins. Co. v. Simon’s Rock Early Coll., 54 Mass. App. Ct. 286 (2002)). The primary insurer counterclaimed, asserting that its single per-occurrence limit of $1 million applied. The court found a single occurrence, concluding that the school’s allegedly negligent acts or omissions in failing to prevent the assailant from using his gun was the occurrence under the primary policy. The court reasoned that occurrence must be defined to give meaning to the insured’s connection to liability, and must be an event over which it had some control.

In contrast, in Koikos v. Travelers Insurance Co., the Florida Supreme Court, on a certified question from the U.S. Court of Appeals for the Eleventh Circuit, held that although the underlying lawsuit alleged that the insured restaurant owner failed to provide adequate security, each of a guest’s separate gunshots at other patrons constituted a separate occurrence( 849 So. 2d 263, 271–73 (Fla. 2003)). The court, citing decisions addressing coverage for clergy sexual abuse, rejected the insurer’s reliance on the continuous or repeated exposure language in the policy, finding that it was a mismatch for this type of circumstance. The court focused instead on the immediate injury-producing act that caused the damage rather than the underlying tortious omission for which the insured was being sued.

An Identified and Significant Turning Point in Foreseeability - The Las Vegas Music Festival Shootings 

The facts surrounding the Las Vegas music festival shootings are well-known. On October 1, 2017, a lone gunman opened fire on a crowd at the Route 91 Harvest Music Festival in Las Vegas. The attacker fired from adjacent rooms on the 32nd floor of the Mandalay Bay Hotel across the street from the festival. In the span of 10 minutes, the attacker fired hundreds of rounds of ammunition, killing 58 people and injuring more than 850, making it the deadliest mass shooting in modern history.

The owner of the hotel and concert venue (MGM), the concert promoter (Live Nation), and the security firm at the concert faced hundreds of lawsuits for allegedly failing to employ adequate security measures at the hotel and the concert venue that could have prevented or limited the shooting. MGM alone received prelitigation hold letters from at least 63 attorneys on behalf of 2,462 individuals (In re Route 91 Harvest Festival Shootings in Las Vegas, Nev., on Oct. 1, 2017, No. MDL 2864, 2018 WL 4905479, at *2 (U.S. Jud. Panel MDL Oct. 3, 2018)). The lawsuits question, among other things, how the gunman was able to spend several days amassing an arsenal of assault-style weapons and ammunition in his rooms at the hotel without being detected. Over the course of six days, the shooter stockpiled an arsenal of weapons and associated equipment and ammunition, including (14) AR-15 rifles (all equipped with bump stocks and 12 of which had 100-round magazines), (8) AR-10 rifles, a bolt-action rifle, and a revolver. He brought the weapons to his room in large cases, often with the help of hotel bellhops. On September 30, he placed “Do not disturb” signs on the doors of both rooms. The shooter interacted with Mandalay Bay employees more than 10 times during his stay, including twice on the day of the shooting (LVMPD Preliminary Investigative Report 1 October / Mass Casualty Shooting Event: 171001-3519, Las Vegas Metropolitan Police Dep’t (Jan. 18, 2018)).  Victims also questioned why the hotel and police did not act more quickly to stop the gunman.

Between life and health insurance, workers’ compensation, and property and liability claims, the insurance industry initially estimated that it could pay more than $1 billion related to the massacre. The recent announcement that MGM and insurers will contribute up to $800 million to its settlement of victim liability claims suggests that estimate may have been low.

With the media attention and reputational exposure associated with mass shootings, it may be inevitable for an insurer and a policyholder to have different views regarding the level of defense that will be provided, the scope of coverage afforded under a policy, and whether claims should be settled. MGM was insured under a primary commercial general liability policy that provided coverage for claims subject to a “per-occurrence” limit of $1 million and a general aggregate limit of $25 million. The policy included an expanded definition of bodily injury that encompassed “mental anguish, mental injury, shock, fright or death resulting from bodily injury sustained by a person,” ensuring coverage for the full range of injuries suffered by survivors of the mass shooting. Even with this coverage, disagreement emerged earlier this year when MGM filed suit accusing its primary carrier of willfully refusing to pay defense costs and attempting to exhaust its coverage limit prematurely in order to end the duty to defend (MGM Resorts Int’l v. Zurich Am. Ins. Co., 2:19-cv-01051-JCM-NJK (D. Nev. filed June 19, 2019)). In the end, however, it appears that MGM had a significant tower of excess liability coverage that avoided the need for coverage litigation. But not all businesses will be so well protected.

Conclusion

As the cases discussed in this article demonstrate, even if an insured entity ultimately is found not liable for the actions of a mass shooter, the cost of defending businesses and building owners from claims arising out of mass shooting incidents is a significant exposure. Moreover, a time may come when public perception, institutional awareness and practices, and public policy converge to place greater duties and responsibilities on businesses, institutions, and professionals to act affirmatively to intervene and prevent mass shootings. 

Details and article facts courtesy of the American Bar Association Article Published Here on 2/7/2020,

When we consider the shift that is happening with liability reasoning as it relates to businesses and active shooter foreseeability, its worthy to note that businesses have a vested interest in doing all they can to protect its invitees, that is, all persons that may be in a businesses building or in its immediate vicinity.  Lawsuits alleging that a business did not do all it could to protect its invitees are gaining momentum as active shooter events become more common and hence more foreseeable.  So what can YOUR business do to help better protect YOUR invitees should an active shooter event occur? Though it is impossible to predict when or if an active shooter will target your organization, there are steps you can take to mitigate the damage and protect your people if an event were to occur.

ASR has a solution.

ASR Alert Systems is a patented state-of-the-art critical incident response technology specializing in the field of alert notifications to Law Enforcement and First Responders in the event of an active shooter or other crisis. Our technology can be customized to any industry, building, or event. We deliver customer-specific technology unmatched by anyone.  We are the only solution on the market today that goes DIRECT TO LAW ENFORCEMENT (we hold the patent on this technology).  All other commercially available solutions utilize third-party call centers.  The Patented ASR First Responder Dispatch Console is a stand-alone wireless (cellular) console that resides inside the dispatch centers or RTCC’s and does not require a computer or additional hardware.  Our patented method works great as a permanent solution or we can also integrate directly with police computer-assisted dispatch systems.  The difference is our comprehensive information exchange DIRECT WITH LAW ENFORCEMENT that will be responding to a critical event at your facility.

How the ASR Threat Alert System Works in YOUR Building