Law360, Philadelphia (February 10, 2017, 5:34 PM EST) — Wednesday’s record-setting $227 million settlement ending the civil trial over a 2013 fatal building collapse in Philadelphia was hastened by a harsh jury verdict that helped defang a 2011 liability reform statute that has hit plaintiffs hardest by limiting their avenues for collecting damages.
The Fair Share Act put an end to joint and several liability in the state, replacing it with a system in which civil defendants found less than 60 percent liable are only responsible for their proportionate share of a damages verdict. This posed a challenge in a case where two defendants already convicted of involuntary manslaughter and other charges for their role in the tragedy that led to seven deaths and 12 injuries were essentially penniless.
Robert Mongeluzzi, who led the team of plaintiffs attorneys trying the case, called the law a “high hurdle.”
The law has had a sharp effect on what personal injury and product liability cases get brought in Pennsylvania since it went into effect.
“A significant number of cases just become economically nonviable because a wrongdoer will not be responsible to make up the shortfall between the several share and the joint share,” Shanin Specter, a founding partner at Philadelphia-based plaintiffs firm Kline & Specter PC, told Law360 in 2013. “It alters the economic calculus.”
With regard to the collapse on Market Street – where an unbraced wall on a building undergoing demolition gave way and collapsed on a neighboring Salvation Army store – there was no question that litigation would ensue.
But Mongeluzzi said the critical point for the plaintiffs was to pin the bulk of the liability on the Salvation Army and to prove that the organization had acted intentionally. He and a number of lawyers unfolded this argument over a trial that lasted more than four months – the longest in Philadelphia history.
“The extraordinary length of this trial was very interesting. On the one hand, plaintiffs don’t want to waste the jury’s time. Plaintiffs don’t want to fill the court with endless questioning on the same subject,” said Max Kennerly, who represents plaintiffs at Kennerley Loutey.
“But the big problem for the defendants was there was no wasted testimony here. No needless repetition. There really was that much problematic evidence,” he added. “The more time they spent fighting with each piece of bad evidence, the more that emphasized to the jury the sheer volume of mistakes that were made.”
When the jury returned, after only four hours of deliberation on the question of liability, with a verdict finding that both the Salvation Army and the building owner had acted with intentionality and the Salvation Army was 75 percent liable, the defendants hustled to the negotiating table.
“The Salvation Army was looking to see this sort of answer before it started offering to contribute the number the plaintiffs were looking to get,” Kennerly said. “That finding removed whatever barrier was still there to settlement.”
According to Mongeluzzi, that outcome depended on the victims demonstrating that there was real danger when the Salvation Army received emails from the agent of the building owner urging the organization to cooperate with the demolition process in May 2013, less than a month before the collapse.
The victims succeeded in securing a photo a building inspector had taken from the roof of the adjacent Mutter Museum, which looks onto both the Salvation Army and the building under demolition, from before the collapse. They then tapped construction expert Stephen Estrin to annotate the photo, and he flagged 20 Occupational Safety and Health Administration violations, including the unbraced wall.
“It was really important for us to claim that the Salvation Army should have done something,” Mongeluzzi said. “That if they had actually investigated, they would have found something.”
Mongeluzzi found an opportunity to break this down into a point the jurors could relate to when he was cross-examining the defense’s expert on the retail industry. Both the defense and plaintiffs retail experts had the most experience in evaluating supermarkets, where the most common cause of injury is a spill on the floor.
“This is no different than a shopper coming up to someone in supermarket and saying, “There’s a spill in Aisle 4,” he said of the warning, adding that he cupped the microphone in front of the jurors to mimic the sound of a PA system. “There’s a spill in Aisle 4. Vinny, cleanup in Aisle 4.”
Mongeluzzi said he reiterated this point on later cross-examinations and at closings. The Salvation Army admitted to sending out an architect, who took pictures of the store itself rather than the adjacent building.
“They never sent anyone to Aisle 4,” he said. “They sent him to Aisle 5, when the spill was in Aisle 4.”
For Mongeluzzi, one of the crucial decisions in front of the lawyers for the victims was whether to cross-examine the officers and employees of the Salvation Army. This revealed that the Salvation Army leadership had been informed of the dangers the demolition posed, but the employees had not.
“We had a clear theory about the haves and the have-nots that was not being related on a socioeconomic basis but on the basis of information. I think our argument – ‘How dare you? How can you play God with other people’s lives?’ – was resonant,” he said. “The people who had the information were in West Nyack, New York. Those who didn’t get the information were right here.”
The weight of the overall undertaking bears comparison to another case Mongeluzzi litigated over the 2003 collapse of a parking garage at the Tropicana Casino Resort in Atlantic City, New Jersey, which killed four workers and injured about 30 others. That case was settled before trial in 2007 for $101 million.
While the present case involved approximately 100 days of depositions, 125 motions in limine, over 20 summary judgment motions and 20 liability experts, the New Jersey case featured 350 days of depositions, almost 40 plaintiffs and 10 main groups of defendants. Both collectively took the same amount of manpower for the plaintiffs – tens of thousands of hours.
Mongeluzzi estimated the costs for the liability phase in the Philadelphia case at $2.5 million and another $500,000 for damages. The Tropicana case led to liability costs of $3 million and damages costs of $3.5 million
“They were both probably the two most complex cases in the region over the past 15 years,” he said.