Nightclub lawyers tell judge $1.06 million fine is unjust
PROVIDENCE, R.I. (AP) _ Lawyers for the owners of a nightclub where a fire killed 100 people told a judge Friday that the fine levied against their clients for failing to carry workersďż˝ compensation insurance was excessive and unjust.
The state Department of Labor and Training fined Derco LLC, the company owned by Jeffrey and Michael Derderian, $1.06 million for not having the required insurance during the more than three years they operated The Station nightclub.
The West Warwick club was destroyed in a Feb. 20 fire. Sixteen nightclub employees were working that night, four of whom died.
The state�s attorney, Bernard Healy, said the fine was reasonable and dictated by law.
Businesses with one or more employees are required to carry the insurance. Companies can be fined up to $1,000 a day for every day they operate without it.
Attorney Kathleen Hagerty, who represents Michael Derderian, said the maximum penalty imposed on Derco LLC is without precedent _ it�s the largest ever imposed by the state.
"The seven-figure penalty is clearly unreasonable, it�s unusual, not proper and unjust," Hagerty said.
But Healy said no evidence was presented to the department to support deviating from the maximum.
The brothers have acknowledged they did not have the insurance from March 2000 when they bought the club until February.
Judge Bruce Morin ordered the attorneys meet with him on June 25 for further deliberation in chambers. Then, Morin will decide a date to issue a decision.
On Thursday, the state Senate unanimously approved a bill allowing the state to levy felony charges against businesses that fail to carry the required workersďż˝ compensation insurance. An identical bill is being considered in the House. Failure to carry the insurance is now a misdemeanor.
The measure comes as the state reviews nightclubs, bars, restaurants and other businesses to see if they comply with workersďż˝ compensation laws.
If there had been workers� comp insurance at The Station, the families of the dead employees would have been eligible for $15,000 for burial and other expenses plus a portion of the deceased�s lost wages. The injured employees could also have qualified for compensation, depending on the nature of their injuries and extent of disability.
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