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[ATG] Supreme Court rules Indiana will not have to pay for contractor’s legal liability or expenses in State Fair tragedy
Start Date: 1/28/2016Start Time: 12:00 AM
End Date: 1/28/2016
Entry Description

INDIANAPOLIS – Now that the Indiana Supreme Court has ruled against a stage rigging contractor that sought to shift its liability for the State Fair disaster onto taxpayers, Indiana Attorney General Greg Zoeller expressed his relief that this part of the litigation now is over. He noted the State of Indiana has fully paid out all it can in public funds to the stage collapse victims.

“The litigation surrounding the State Fair stage collapse has been the most difficult and painful of all cases during my two terms as Attorney General. While it is the obligation of the Attorney General to defend state clients, it does not diminish the knowledge of the pain and suffering of all those who were killed and injured that tragic day in 2011,” Zoeller said.

The Indiana Supreme Court ruled today in a case asking whether Mid-America Sound Corporation could claim “indemnification” from its liability for the August 2011 stage rigging collapse that caused seven fatalities and multiple injuries.  In March 2014, a Marion County trial court granted the State’s summary judgment motion and found the State Fair Commission could not assume the company’s liability for the disaster; but on appeal, the Indiana Court of Appeals in March 2015 reversed the trial court, instead finding the company’s claim could not be rejected on summary judgment grounds. The State Fair Commission in turn appealed that decision to the Indiana Supreme Court, which heard oral argument last Sept. 23.  Today the Supreme Court issued a unanimous opinion vacating the Court of Appeals ruling and affirming the trial court’s ruling granting summary judgment in favor of the State Fair Commission and against Mid-America.

In the appeal, Mid-America had argued that it was permitted to shift its liability to the State Fair Commission on the basis of an indemnification provision Mid-America inserted onto the back of an invoice and then submitted to the Commission after the stage-rigging collapse in 2011. The Supreme Court, the state’s highest court, rejected that argument and ruled in favor of the State Fair Commission.

“My office put the victims first by fully paying out the State’s maximum $5 million in liability in 2011 and then secured another $6 million in supplemental relief for victims from the Legislature in 2012. Our position was Indiana cannot indemnify a private party, nor was there any agreement here to do so.  We were opposed to the contractor’s assertion that it could shift its legal responsibility for the State Fair tragedy onto the taxpayers, and we respect the conclusion of the Indiana Supreme Court that has resolved this legal question with finality,” Zoeller said.

The Supreme Court’s 11-page opinion, authored by Chief Justice Loretta Rush, unanimously found that the State Fair Commission could not retroactively indemnify Mid-America.

“The terms of Mid-America’s invoices to the Commission did not clearly and unequivocally provide for retroactive application, and as a matter of law, we will not infer such an onerous provision from the parties’ course of dealing. We therefore affirm the trial court’s grant of summary judgment to the Commission,” the Indiana Supreme Court opinion said in its conclusion.

Mid-America Sound supplied and oversaw the assembly of the stage rigging that collapsed August 13, 2011, during a windstorm prior to a scheduled concert at the State Fair grandstands. The disaster resulted in multiple injuries and seven fatalities. Injured victims and the estates of the deceased filed lawsuits against numerous defendants – including Mid-America, the performing group Sugarland, other private companies and the State Fair Commission – that later were consolidated into one case by the Marion County Superior Court. Mid-America claimed indemnification based only on language on the back of an invoice it submitted to the Commission after the incident.

In the State Fair Commission’s appeal to the Supreme Court, the Attorney General’s Office cited numerous other states that take the same legal position, that a state government entity cannot indemnify a private company for that company’s own actions. The State argued that the Court of Appeals ruling of March 2015 conflicted with multiple precedents. Also, the Commission contended that even if indemnification might otherwise be lawful, Mid-America’s back-of-the-invoice claim was “legally unconscionable” – it was not a contract and there never was a willing agreement by the Commission to indemnify the company.

The State also contended its full financial liability already had been paid. Four months after the disaster, in December 2011, the State, represented by the Attorney General’s Office, reached agreement with 62 collapse victims and paid out $5 million in settlements, the maximum allowed under Indiana’s tort claim cap. The plan for apportioning the $5 million among the victims was developed by the AG’s Office with the guidance of Kenneth Feinberg, the expert who designed compensation plans for victims of 9/11 and the Gulf Oil Spill – and who more recently oversaw payment efforts for victims of the Boston Marathon tragedy and GM ignition switch recall. State Fair victims who accepted settlement payment under the Feinberg Plan in 2011 waived any future litigation against the State.

One year after the initial $5 million settlement, the State of Indiana in December 2012 distributed another $6 million in supplemental relief that the 2012 Legislature had approved for victims. The 59 who accepted supplemental payment signed a waiver releasing the State from any claim of indemnification. The elimination of indemnification liability exposure was a specific condition the Legislature attached to the supplemental fund. In total, the State in the two phases paid a combined $11 million in public funds to State Fair victims, not counting private charitable efforts. Private lawsuits between the victims and private entities continued on, with most of the parties including Mid-America eventually reaching private settlements with each other

At stake in the case decided today was whether Indiana tax dollars would have to be used to pay for any settlements and judgments in favor of plaintiffs that Mid-America already incurred or might incur in the future in relation to the stage-rigging tragedy. Also at issue in the case was whether Indiana tax dollars would be used to defray any of Mid-America’s own legal costs, such as attorneys’ fees and costs, incurred in defending private lawsuits against the company and its owner.

The case the Supreme Court decided today was captioned Mid-America Sound Corporation v. Indiana State Fair Commission et al.  Indiana Solicitor General Thomas M. Fisher and attorney John C. Trimble led the legal team representing the State Fair Commission.

In a separate case, the Attorney General’s Office in January 2015 successfully defended the State in a legal challenge to Indiana’s tort claim caps filed by one plaintiff who was injured in the State Fair disaster.  In that case, the Court of Appeals ruled in favor of the State that the statutory tort claim caps of $700,000 per individual and $5 million per incident are constitutional. The Supreme Court declined to hear the plaintiff’s appeal in that case, meaning the challenge to the caps is over and the statute is constitutional.

NOTE: The Indiana Supreme Court’s opinion is at this link: http://www.in.gov/judiciary/opinions/pdf/01281601lhr.pdf

                                                                         -30-
Location Information:
Lake County

Marion County
IN
Marion

State House
IN
Marion
Contact Information:
Name: Bryan Corbin
Phone: 317.233.3970
Email: Bryan.Corbin@atg.in.gov
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Entry Type:
Press Release
Entry Category:
  • Announcements
  • IN.gov Category:
  • Government
  • Agency Name
    Attorney General

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