The September 11, 2001 Terrorist Attack and Litigation Aftermath

• Published in: Defense counsel journal 2019-04, Vol.86 (2), p.1-11
• Main Authors: Barry, Desmond T., Jr, Kwarta, Evan M
• Format: Article
• Language: English
• Subjects: Air transportation industry; Air travel; Aircraft accidents & safety; Aircraft industry; Airlines; Airports; Aviation; Business liability insurance; Compensation; Federal court decisions; Hijacking; Insurance coverage; Insurance policies; Law; Laws, regulations and rules; Leases; Liability insurance; Property damage; Remedies; September 11 terrorist attacks-2001; State court decisions; Terrorism; Torts; Transnational terrorism
• ISSN: 0895-0016; 2376-3906

[...]the District Court addressed Boeing's motion to dismiss, which argued that Boeing did not owe a duty to prevent the use of the aircraft as weapons, and that the terrorists' acts were superseding causes that severed the chain of causation. 52 In 2003, claims against Boeing had only been filed by victims of American Flight 77 and United Flight 93, which crashed in Virginia and Pennsylvania, respectively. 53 Pursuant to the ATSSSA, Boeing's motion thus was analyzed under Virginia and Pennsylvania law. [...]the court revealed that as among the insurers for each airline and its respective security company, the proportions allocated also were based on the amount of available coverage that the airlines and their respective security companies had remaining on their liability insurance policies. 116 On appeal, WTCP repeated its arguments made to the District Court. 117 WTCP also argued that New York's "first-come, first-served" rule was inconsistent with, and thus preempted by, the ATSSSA. 118 The Second Circuit first concluded that the District Court correctly applied New York state law to its evaluation of the settlement. 119 The court also found that the ATSSSA only created a liability cap for the Aviation Defendants' benefit, not a "limited fund" for any plaintiff's benefit. 120 Accordingly, the ATSSSA did not conflict with New York's "first-come, first-served" policy, and the District Court did not err by applying that rule to the settlement. 121 Next, the Court of Appeals found that the District Court had made a proper evaluation of the fairness of the settlement agreement. 122 Specifically, the Second Circuit found that the Aviation Defendants had no duty to pay all plaintiffs' claims ratably, and there was no evidence that either the Aviation Defendants or the settling plaintiffs had acted in bad faith. 123 Nor, as WTCP contended, was the lump sum basis on which all claims were settled a reason to reject the settlement. 124 The court also rejected WTCP's argument that the settlement was improper because the insurers of only four Aviation Defendants were responsible for paying the full settlement amount. [...]7WTCo.'s own expert opined that the value of WTC 7 prior to 9/11 was no greater than $737 million. 192 For the purposes of their summary judgment motion, the Aviation Defendants accepted that amount as the fair market value of WTC 7, and all parties agreed that it was lower than the building's replacement cost. Because 7WTCo. received $831 million