In re September 11 Litigation

600 F.Supp.2d 549 (2009)

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In re September 11 Litigation

United States District Court for the Southern District of New York
600 F.Supp.2d 549 (2009)

Facts

Dozens of families of individuals killed in the September 11, 2001 terrorist attacks (families) (plaintiffs) filed suit against airlines, airport-security companies, and others (defendants) to recover for the losses they sustained from the death of their loved ones. The legal remedies available to the families were curtailed by the Air Transportation Safety and System Stabilization Act (ATSSSA), which was enacted by Congress shortly after the attacks to preserve the air-transportation industry from the consequences of the inevitable onslaught of litigation that would arise from the mass tragedy. The ATSSSA altered the traditional legal process by granting the District Court of the Southern District of New York original and exclusive jurisdiction over all claims relating to the events of September 11, limiting liability to maximum insurance coverage, and ostensibly proscribing punitive damages and damages beyond state-authorized recovery. The ATSSSA also created an alternative remedy by establishing the September 11 Victim Compensation Fund (fund). Victims’ families could file a claim with the fund on behalf of their lost loved ones and receive prompt relief without proving fault or enduring litigation, in exchange for waiving their right to file a lawsuit. Unlike traditional litigation, compensation from the fund was subject to deductions for collateral sources like life insurance, and the formula for recovery did not account for exceptionally high-earners. Ninety-seven percent of claimants participated in the fund, but for various reasons, 96 families elected to file suit in the district court. Several cases settled quickly, but when negotiations stalled in many others, the district court appointed attorney Sheila Birnbaum to serve as mediator. Birnbaum’s involvement, along with the district court’s unprecedented order to conduct damages-only discovery and trial, ultimately led to settlements in all but three cases. Birnbaum subsequently filed her report with the district court.

Rule of Law

Issue

Holding and Reasoning (Hellerstein, J.)

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