In re World Trade Center Disaster Site Litigation

The law firm Worby Groner Edelman and Napoli Bern (Napoli Bern) represented victims (victims) (plaintiffs) in their lawsuits against the City of New York and others (defendants) for injuries the victims sustained during the September 11, 2001 terrorist attacks. Among the thousands of victims Napoli Bern represented, 59 victims had already collected compensation from the September 11 Victims Compensation Fund (VCF) in exchange for releasing their right to file lawsuits. However, after the 59 victims received their compensation, they learned that the injuries they sustained were far more serious than were accounted for when they filed their claims with the VCF. Thus, the 59 victims sued for compensation from the defendants or to be included in any potential settlement. Napoli Bern negotiated a settlement with the defendants on behalf of the victims, but by the settlement’s terms, only victims who had not filed a claim with the VCF were eligible to participate in the settlement. Additionally, the settlement would only go into effect if 95 percent of the eligible victims opted into it. Many of the 59 victims expressed their desire to enter the settlement, but the question of whether the 59 victims were eligible to participate had not been answered when the deadline for opting into the settlement arrived. Despite having been directed by the court to retain independent counsel to advise the 59 victims, Napoli Bern failed to do so, and instead, removed the 59 victims from the list of victims eligible for settlement. The settlement was ultimately approved, but the status of the 59 victims remained unresolved. The court ordered the appointment of special counsel to advise the 59 victims, at Napoli Bern’s cost. Napoli Bern moved per Federal Rule of Civil Procedure 60(b) for an order vacating the court’s appointment of special counsel, claiming that no conflict of interest existed and that being required to compensate the special counsel was an unfair sanction.