More September 11 Cases Settle – $1.2B for Property Damage – Judge Denies Request to Seal Record

Judge Alvin Hellerstein today approved the settlement of numerous property damage claims from the September 11 attack on the World Trade Center. The defendants were the airlines, security companies and other aviation related companies. The plaintiffs were both subrogated insurers and plaintiffs with direct claims. In doing so, he also refused the request of the parties to keep the information sealed.

After 180 depositions, and millions of pages of documents, the parties settled for $1.2B, an amount that Judge Hellerstein said was “fair and reasonable.” This represented a 72% discount off the $4.4B in property claims that were made.  According to Judge Hellerstein, “The discount was based on factors common to all settling parties, including the risk and expense of a trial, and the ability to resolve the case without any party claiming victory or admitting liability.” This is the Order of the property damage settlement.

The settlement takes into account a liability cap that had been imposed by Congress in the immediate aftermath of the attack (The Air Transportation Safety and System Stabilization Act). Because of that cap, some of the plaintiff’s associated with developer Larry Silverstein, long term lessee of the World Trade Center,  objected to the settlement, as the insurance policies of certain defendants  will be exhausted. This is true, for example, of Huntleigh USA, which was responsible for screening passengers at Logan International Airport in Boston where United Flight 175 originated.

The capping legislation is the same piece of law that formed the September 11 Victim Compensation Fund for those that were killed or injured as a result of the attack. The Fund gave automatic payments to those injured and the families of those killed, but in doing so people had to relinquish their rights to sue. The vast majority took this route.

But not all went with the Fund. Judge Hellerstein notes in his opinion that, with respect to the remaining personal injury cases that were filed in court, all but three have now settled.

This settlement comes fresh on the heals of the massive $712M settlement for 10,000 first responders that brought suit as they did not qualify for the Fund, and which was also before Judge Hellerstein.

Finally, the parties sought to keep this settlement sealed. The New York Times moved to have it unsealed, and this motion was granted in part. See: Order unsealing settlement. The aggregate settlement amount was revealed, but not the amount to individual claimants.

Judge Hellerstein, in deciding the issue of whether to seal the settlement or not, had to balance the common law right to judicial documents, the First Amendment rights to access, and among other things, the extent to which revelation of the settlement may chill the efforts of others to settle the remaining suits. The Aviation defendants were also concerned that, given the massive size of the settlement, others would come to see this as an acknowledgment of liability. He did find, however, that the privacy interests of the plaintiffs weighed heavily in favor of keeping specific settlement amounts confidential.