Last month, checks began arriving in the mail for more than 100 victims of the 2011 Reno Air Races disaster — an incident in which a World War II plane crashed into an audience of spectators, killing 10 people and leaving many more injured. While the settlement was handled out of court, which was unusual enough, it also had a "settlement administrator" who helped the lawyers determine how much compensation each of the victims received from a limited pool of insurance funds.
If this sounds familiar, it’s because Mike Slack, a partner in Austin’s Slack & Davis who was the lead negotiating plaintiff lawyer involved with the Reno crash, used a similar process to help settle claims related to a 2008 airplane crash case that killed 10 people in Guatemala.
With the Guatemala crash, a trial court appointed Al Ellis, of counsel at Dallas’ Sommerman & Quesada, to act as a settlement administrator to distribute a limited pool of insurance funds tendered by an airline. In that case, Ellis traveled to three different states, meeting individually with 40 plaintiffs who either survived or lost family members in a 2008 airplane crash in Guatemala that killed 11 people. [See "Grief Counseling" Texas Lawyer, Nov. 29, 2010, page 1.]
This time, Slack proposed using a "settlement administrator" to opposing counsel Mike McQuillen, a partner in Chicago’s Adler Murphy & McQuillen who represents the Reno Air Association.
McQuillen agreed that the case needed a quick and fair resolution in how to distribute $100 million in insurance proceeds tendered by the association, Slack says.
"The idea was to have something with certainty and had an advantage over the alternatives," Slack says. He compares the Reno crash to "a bomb going off in a crowd" — involving claimants who suffered everything from "light shrapnel wounds to deaths."
"And to administer [the settlement], it needs someone with rock star credentials. And I said ‘Ken Feinberg,’ " Slack recalls telling McQuillen.
Feinberg, a partner in Washington D.C.’s Feinberg Rozen, has handled similar duties as a special master to the Federal September 11th Victim Compensation Fund of 2001 and the BP Deepwater Horizon oil spill. Feinberg acceptedthe job and helped Slack and McQuillen with the difficult tasks of coming up with a settlement formula, determining who was eligible and drafting release statements, among other things, Feinberg says.
While the biggest challenge of the Reno settlement was its limited pool of funds, Feinberg says the lawyering made the settlement distribution go smoothly.
"The creativity and ability of Slack and McQuillen made my job much easier. They were on the same page from day one," Feinberg says.
"It’s vastly preferable to arguing in the courtroom," Feinberg says of the process for handling the claims. "Instead, the lawyers get together, they secure the services of an independent neutral, they work with a formula, fashioning a formula, and then the formula is implemented."
Whether or not the victims of the crash will be happy with the distribution remains to be seen, Feinberg notes.
McQuillen did not return two calls seeking comment.