9/12

The dust hasn’t begun to settle on 9/11 litigation

Published in 2007 New York Metro Super Lawyers — September 2007

A peek through the retaining fence where the World Trade Center once stood offers few clues about the horror that day. Workmen in hardhats are plying their trades as heavy trucks roll along gravelly roadways. Passersby who didn’t know better might think this was Ground Zero for an ambitious construction project.

The clues are elsewhere. Graffiti on a nearby wall reads, “Fuck you, Osama bin Laden.” St. Paul’s Chapel has been transformed into a makeshift 9/11 museum. The Ten House has erected a memorial in honor of its six firefighters who were killed that day.

Farther away, in law offices throughout New York, the legal system continues to choke on a mind-boggling array of 9/11-related suits. Virtually no aspect of 9/11 has been untouched by litigation.

To the attorneys involved, the proliferation of legal battles is a mixed bag. Many see it as democracy in action.

“Whenever there’s a tragedy like this that touches so many lives, the courts often end up being the place of ultimate remedy,” says Randy Mastro, an attorney for Gibson Dunn & Crutcher, who has represented a group of firefighter widows and a former deputy mayor of New York in the wake of 9/11. “It doesn’t surprise me that there are still many cases continuing. Insurance cases, business cases, personal injury and tort cases, workers’ compensation cases—they’re all a natural consequence of such a huge tragedy.”

Adds Donna Newman, who represented Jose Padilla after he was arrested in May 2002 for allegedly being part of a plot to detonate a “dirty” bomb in U.S. streets: “I think, to some extent, when things go to court, there is an open debate. And I think that’s what’s important. That’s what I’m for. A democracy is based on an exchange of ideas.”

Others contend that the spate of litigation reflects poorly on the nation and prevents the wounds from healing.

“It’s unfortunate for our society and country, frankly, that the terrorists mount these attacks on us and we end up suing each other for the next decade at least,” says Richard Williamson of Flemming Zulack Williamson Zauderer, who has represented, among others, the lessees of the World Trade Center buildings. “I don’t see this as being good for our country. Everybody’s very busy in our country suing each other.”

The following offers a glimpse into the complexity of the legal fallout and into the difficult roles some of New York’s finest attorneys have played in cleaning up the mess.

 

The September 11th Victim Compensation Fund

Soon after the terrorist attacks, an act of Congress created the Victim Compensation Fund (VCF) in an attempt to stave off a crippling onslaught of lawsuits against the involved aviation entities. The VCF was designed to pay out damages to the families of 9/11 victims in exchange for their agreement not to sue the airlines.

Kenneth Feinberg was selected by then-attorney general John Ashcroft to be the special master of the VCF. Feinberg’s background made him an ideal choice. The 1970 graduate of the New York University School of Law previously had served as a court-appointed special settlement master in thousands of disputes, ranging from mass torts to product liability cases. Approximately 98 percent of the families eligible for the VCF decided to participate, and a total of $7 billion was paid out.

By many accounts, Feinberg managed the VCF deftly and efficiently under trying circumstances.

“I think Kenneth Feinberg did a terrific job administering it,” says Williamson. “He’s an extremely accomplished, hardworking, dedicated person. And in this instance, he gave a tremendous amount of his personal time and emotions. He tried as hard as anyone ever could to treat people fairly—to listen to their concerns, to listen to their presentations as to why they should receive more money than perhaps he was originally thinking.

“He also understood the need to bring closure to all of this for the sake of these families. So he set a final date on which you had to make up your mind—either file a claim or don’t—and he was going to close the fund. He was very clear on that, and he held to it.”

On December 22, 2003, after more than two years of working pro bono, Feinberg shut down the fund. In his closing statement, he wrote, “It has been an honor and privilege to serve those families and victims whose lives were tragically disrupted by 9/11. I believe the Fund exemplifies the best in American character and is a tribute to the American people.”

 

The Domestic Defendants

Of course, this hardly closed the book on 9/11-related litigation. Even though the VCF resolved a high percentage of cases, claimants had the choice of opting out of the fund and pursuing a litigation alternative.

A large chunk of these suits have been directed at the so-called domestic defendants, including the airlines, airplane manufacturers, airports, airport security firms, the Port Authority of New York and New Jersey, and the World Trade Center lessees. They range from wrongful death and personal injury claims to property damage claims; they number in the thousands. These suits have been heard by Judge Alvin K. Hellerstein, United States district judge for the Southern District of New York. 

Many of the biggest domestic cases have focused on the aviation entities. Teams of defense attorneys have been entangled in this litigation, including Desmond Barry of Condon & Forsyth and Roger Podesta of Debevoise & Plimpton. Barry is the defense coordinator in the suits against the aviation entities, while Podesta’s firm represents American Airlines.

On the other side of the fence are lawyers such as Brian Alexander. His firm, Kreindler & Kreindler, has represented hundreds of plaintiffs in wrongful-death claims. About 20 of these plaintiffs opted out of the VCF to pursue tort litigation against the aviation defendants.

“They had different reasons for why they chose not to go into Mr. Feinberg’s fund,” Alexander says. “Some because the rules didn’t work for them so that they would [not] have received any significant level of compensation. Others really just wanted answers.

“We have learned a great deal since this started. I would say without any hesitation that this is a story that must be told. I think people will be shocked, frankly, by what comes out. I can tell you that the bottom line is that the state of aviation security on 9/11 was abhorrent. It was a sieve, and the airlines knew it. They knew the full breadth of the problem.”

Other prominent defendants in Judge Hellerstein’s court include the Port Authority of New York and New Jersey and Silverstein-affiliated net lessees of the World Trade Center buildings, which all have been represented by Williamson’s firm, Flemming Zulack Williamson Zauderer.

Initially, more than 1,000 plaintiffs filed wrongful-death suits against these defendants, but through a variety of motions and tactics on the part of Williamson’s firm, that number is now zero. Virtually every case has been dismissed, according to Williamson.

“We pointed out that from the standpoint of our clients, our clients were the victims,” Williamson says. “We’re the victims being sued by the victims. We said, ‘If you want to keep pursuing claims against our clients, you certainly have the right to do that. But we will defend them vigorously, and we think in the end you will lose.’”

Common sense prevailed as the majority of the plaintiffs realized that the odds were stacked against them. Williamson’s team made it clear that this was an all-or-nothing proposition for the plaintiffs: By pursuing these suits, they would lose the opportunity to file a claim with the VCF.

“Judge Hellerstein held numerous conferences to explain this to the plaintiffs’ lawyers,” Williamson says. “It was an enormously successful technique. It led in our case to having almost all of the suits dropped.”

 

The Hot-Button Issues

Not surprisingly, many 9/11-related cases have sparked powerful emotions within New York City—especially when it comes to the firefighters, more than 300 of whom lost their lives responding to the attack. One such dispute involved the families of about 80 fallen firefighters and the Uniformed Firefighters Association.

Gibson Dunn & Crutcher’s Mastro, who represented the families of these fallen firefighters, says the case got ugly quick. Following 9/11, the union collected $70 million in donations from around the country through its Widows’ and Children’s Fund. That’s when things became hazy … and contentious.

“Those funds were solicited supposedly on behalf of the families,” Mastro says. “After raking in that money, the union first took the position that it wasn’t going to distribute the funds. The position the union took was that it was at their discretion whether to disperse those funds and when to disperse them. They first took the position that there were many firefighters over the years who had given their lives in the line of duty. So that now that they had all of this money, they might want to portion it out in a different way instead of just to the 9/11 victims, even though they had raised the money expressly and specifically for that purpose.

“They also were taking the position that there were more than 300 firefighters who died that day. Not all of them were married. Some were single; some were in committed relationships but not yet married. The firefighters union was taking the position that if you weren’t married at the time, you didn’t qualify for the Widows’ and Children’s Fund.”

Mastro’s firm initially filed a complaint with the attorney general’s office. Then it waged a brutally effective PR campaign that brought swift closure to the case, in the fall of 2002, without involving the courts.

“We went public with the issue, so it became a big media story in New York City and nationally,” Mastro says. “And to the credit of all the families, even though many of them were acting against their fiduciary interests, they were united in their view that all the families should share equally and that this was a tragedy that affected all people, whether or not the firefighter was married and had children. 

“The firefighters union faced tremendous public reaction, and shortly thereafter, they settled the case and immediately distributed more than $60 million to the [families of] more than 300 firefighters who died that day. It was a tremendous victory.”

Other hot-button cases have involved workers’ compensation benefits and health benefits for those who were exposed to the toxic elements at Ground Zero. Mastro wound up in the middle of one of these cases too.

It centered on Rudy Washington, a New York deputy mayor of community relations whose job called for him to be at Ground Zero every day. Several weeks after 9/11, Washington fell victim to a rare blood disease associated with exposure to decaying body parts. That malady was successfully treated, but over the next few years Washington developed severe respiratory problems and his health rapidly deteriorated.

“He, like many others, sought workers’ compensation benefits for work-related injuries,” Mastro says. “He didn’t ask for lost wages, even though he hadn’t worked—all he asked for was the health coverage associated with workers’ comp benefits. The city, the [Mayor Michael] Bloomberg administration, routinely took the approach of denying all such claims and appealing them up the chain on the basis that, ‘How do you know whether it’s related to 9/11 or not?’ 

“In Washington’s case, he was one of the first, if not the first, to go to an administrative hearing for workers’ comp benefits. The workers’ comp officer put in medical testimony that ruled in his favor, and the city decided to appeal anyway.”

Once again, Mastro’s firm took its case to the people. Once again, the strategy worked.

“There was such a backlash that the city agreed [in 2006] to settle the claim and cover his health benefits,” Mastro says. “We were pleased to help him, but there are many other people who face the same problem.”

Indeed, by some estimates, the number of respiratory-related cases has grown to more than 10,000. Many of these claims have been filed relatively recently, and the resolutions don’t appear to be imminent. Williamson’s firm, however, is attempting to have these cases dismissed. 

“If we are successful in the 2nd Circuit Court of Appeals, they will be dismissed,” Williamson says. “And all of these people are able to obtain help: medical monitoring, medical treatment, and so on through a variety of programs that the city has set up and that the federal government has funded. They also can receive payments from a number of sources. But they are seeking by these lawsuits to recover damages, and they have lawyers who want to press those claims.”

Of course, even if these respiratory-related cases are dismissed, the plaintiffs can appeal.

“All of these people came to Lower Manhattan,” says Williamson, “and helped in whatever way they could. And now they make whatever allegations they make about their medical conditions and end up suing the government entities that rushed in and tried to do the best job they could in a horrible situation. How is that good for our country? That’s my point of view. We believe those cases should be dismissed so that if and when there’s a next terrorist attack, we don’t end up with the same thing again: another 10 years of litigation.”

 

The Civil Rights Angle

The civil rights issues that have arisen in the aftermath of 9/11 are particularly sticky, cutting to the very core of the U.S. Constitution.

Several suits questioning the Bush administration’s use of executive power have been filed on behalf of alleged terrorists imprisoned in the U.S. Naval Station in Guantánamo Bay, Cuba. The New York-based Center for Constitutional Rights, whose president is Michael Ratner, was among the first to file such suits. In 2004, Ratner appeared before the U.S. Supreme Court as co-counsel for the Guantánamo Bay detainees and helped earn a victory that gave them the right to test the legality of their detention.

“Obviously, everyone wants security, but the answer is not simple,” says Newman, the lawyer who represented Padilla. “And [the answer is] certainly not: ‘We have to give up our civil rights.’ We have to understand better how to succeed at this. It doesn’t mean we have to change our democracy. If we change our democracy, that’s what [the terrorists] want. I think we have to act like a moral country and act like the country we are. We have to put our best foot forward, not our worst foot.”

The owner of a small private practice, Newman occasionally serves as a New York public defender, and in May 2002 she was assigned the Padilla case. Her life changed. 

Padilla was arrested at O’Hare Airport and, along with other al-Qaida operatives, was accused of plotting to detonate a “dirty bomb.” Padilla then was transferred to New York, where the situation grew increasingly dicey.

“He was arrested on a material witness warrant, which is not really a typical arrest warrant,” Newman says. “It’s not an arrest for a crime—it’s an arrest to secure your presence for a grand jury appearance. Once you testify, theoretically you’re released. So he was here for about three and a half weeks, and I was able to see him and discuss a very difficult legal concept with him, which was that he wasn’t really arrested. We had motions pending with respect to that.”

Then, in a stunning turn of events, Newman lost all contact with her client. Before Newman and Padilla could appear before the court with respect to the material witness warrant, he was transferred to a Navy brig in South Carolina. From June 2002 until March 2004, Newman couldn’t see or talk to her client. All the while, Padilla never was formally charged with a crime.

The government reasoned that because it had classified Padilla as an enemy combatant, it had the right to hold him indefinitely. 

“During this period, we pursued the writ of habeas corpus, which is essentially a petition to the executive branch, or a complaint, that you’re holding somebody against their constitutional rights,” Newman says. “We said, ‘Look, you can’t hold someone unless you charge them with a crime. So if you want to hold him, you’d better charge him with a crime, and we have to be allowed to see him.’ It’s a core constitutional right.”

In November 2005, Padilla was finally indicted in Florida on charges of material support of terrorism, and two years later he was convicted on all counts, though Newman was no longer involved in the case.

“What the case symbolized—for me, at least—was that people don’t realize what the writ of habeas corpus is about,” Newman says. “It’s a right to challenge the executive detention. If you don’t have that, then there are no other laws worth fighting for.”

In June 2007, the executive branch’s detention policies were challenged again, but this time the outcome was quite different. A 4th U.S. Circuit Court of Appeals panel ruled that the government couldn’t continue to hold U.S. resident Ali Saleh Kahlah al-Marri, a suspected al-Qaida sleeper agent who was arrested in 2001, without filing charges against him.

“It was great news,” Newman says. “What a difference a new panel can make. We were before the 4th Circuit. Our argument was similar, but the panel was different. It’s good to see that the rule of law is being upheld.”

Plenty of other lawyers have been fighting similar fights, including Debra Brown Steinberg of Cadwalader, Wickersham & Taft. Steinberg says her responsibility is, very simply, to “speak for others who can’t speak for themselves.”

Steinberg has worked steadfastly as an advocate for immigrant families of World Trade Center victims. She led her firm’s pro bono representation of about 70 such families and, in 2002, drafted substantial portions of the federal September 11th Family Humanitarian Relief and Patriotism Act, which would give green-card status to spouses and children of those who died on 9/11, so long as they are eligible beneficiaries under the VCF. Much to Steinberg’s chagrin, the bill is still pending in the Senate and the House of Representatives.

“We as a nation are building memorials to the dead, but these [immigrants] won’t be able to go see them,” Steinberg says. “I think waiting five years for legislation to pass on behalf of these families of 9/11 is a national disgrace. This is important to me because I love this country, and history will judge us badly if we don’t honor all of the families of 9/11.”

 

No End in Sight

The type of closure Steinberg speaks of won’t come anytime soon. 

One prominent pending suit involves Cantor Fitzgerald Securities, which lost 658 employees, about two-thirds of its work force, in the attack. In 2004, Cantor Fitzgerald—represented by a number of attorneys, including Richard Fields of Dickstein Shapiro Morin & Oshinsky—filed a $7 billion suit against alleged financers of al-Qaida. This group included the Kingdom of Saudi Arabia and various Mideast banks and charities. 

Prior to the company’s lawsuit, thousands of individual plaintiffs sued the same defendants, plus additional financial institutions and al-Qaida itself. Known as the “Terror Lawsuit,” it runs into the tens of billions of dollars, says Alexander, whose firm represents a number of Cantor Fitzgerald employees’ families. He says it’s a tricky case to pursue because the Saudi Arabian government claimed sovereign immunity and was dismissed as a defendant. Litigation now centers on the shadowy banks and charities.

“You just have to be patient, and you can’t speculate,” Alexander adds. “I think when it all settles out, yes, there will be recovery there for the families. But a lot of the places where you would hope to get a just remedy might be afforded legal protection.”

On the domestic front, the judicial system remains overloaded. In addition to the respiratory claims, a slew of property damage cases in Judge Hellerstein’s court have taken a backseat to the wrongful-death suits.

“The litigation has been geared to try to resolve the wrongful-death claims in the tort litigation,” Alexander says. “Every effort has been made. Property damage claims that are intertwined and are before Judge Hellerstein have actually expressed a willingness to be second, at least up until the trial point. You’re looking at a couple of more years for the property damage claims.”

In the meantime, many of the lawyers find it hard to approach the litigation with their usual sense of emotional detachment.

“I flew past the towers that morning at about 8 o’clock on my way to Dulles [International Airport],” Alexander, a lifelong New Yorker, says. “I had personal friends who lost their lives in the towers that day. We’ve had to deal with all of these stories of incredible people and the beautiful families they left behind. 

“The local nature of this made it even more challenging. And the way the [VCF] worked for we lawyers here was really difficult. We were doing three, four, five hearings a day with candidates. It was gut-wrenching. You had to get yourself geared up every single time to give your best effort for every single family. In the classic New York sense, it definitely has affected me and my partners in a way that is a little bit different and closer to the heart.”

The tragedy also hit home for Mastro, who was former mayor Rudy Giuliani’s chief of staff (1994-96) and deputy mayor of operations (1996-98).

“I never missed public service as much as I did when 9/11 occurred, because we all wanted to serve,” Mastro says. “We all feel very strongly about honoring the memories of those who gave their lives that day, and doing right by them. There are many, many New Yorkers who answered the call to try to help after 9/11. The work I’ve been able to do as a lawyer has been a labor of love.”

“We didn’t just feel like New Yorkers,” Steinberg says. “The whole country embraced us. In fact, the whole world did. It brought out the best in all of us. People came here from all over the country to help rebuild. It was once said that by lightening other people’s burdens we lift our own. That’s what I get out of the work. Assisting others in need has helped all of us get over 9/11.”  

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