Virgilio ex rel. Virgilio v. City of New York

Following the terrorist attacks on September 11, 2001, Congress passed the Air Stabilization Act. The act’s stated purpose was to provide compensation for those hurt or killed by the terrorist attacks while preventing lawsuits from crippling or bankrupting potential defendants. To accomplish this goal, the act created a no-fault, nonadjudicative fund to provide payments to victims or their representatives. As a condition of receiving payment from the fund, a claimant was required to waive the right to file a civil lawsuit for “damages sustained as a result of the terrorist-related aircraft crashes” unless the lawsuit was against the terrorists themselves or for collateral benefits (e.g., disability or life-insurance benefits). In addition, the act capped the total amount that could be recovered in lawsuits against the airlines, aircraft manufacturers, anyone with an ownership interest in the World Trade Center, and the City of New York. Thus, if someone chose to sue any of these entities instead of making a claim from the fund, there was an additional risk that other claims could use up the limited funds, preventing the claimant from being able to collect even if the lawsuit were successful. Due to issues with their radio equipment, some New York City firefighters who were inside the World Trade Center shortly after the attacks did not receive the message to evacuate prior to the buildings collapsing, and these firefighters died in the towers. On behalf of those firefighters, a group of their representatives (plaintiffs) made claims to the act’s nonadjudicative fund. The representatives also filed a lawsuit against Motorola, Inc. and the City of New York (defendants), arguing that these entities were responsible for the faulty radio equipment that had arguably contributed to the firefighters’ deaths. The representatives argued that although the act’s waiver appeared broad, if read in the context of the entire act and its history, the waiver actually applied only to claims against the airline-transportation industry. The representatives also argued that the radio-equipment problems were a separate issue that pre-existed the attacks, which meant that these claims were outside the scope of the waiver. The district court found that the waiver applied and dismissed the lawsuit. The representatives appealed.