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4/29/2011

1 Remedies Spring 2011


Fordham Law School

WTC Cleanup cases


George W. Conk
Adjunct Professor of Law & Senior Fellow, Stein Center for Law & Ethics
Certified Civil Trial Attorney
Room 409
gconk@law.fordham.edu
212-636-7446
Torts Today tortstoday.blogspot.com
Otherwise – Commentaries on Law, Language & Politics
Blackstonetoday.blogspot.com

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3 Philip Landrigan, MD (2002)
Lessons learned – Worker health & safety since 9/11/2001
 The most massive acute environmental disaster that ever has befallen New York City.
 The destruction of the twin towers released thousands of tons of toxic materials into the air
of lower Manhattan—asbestos, particulate matter, lead, soot, PCBs, and dioxins.
 Workers and children were the groups at greatest risk of exposure.
4 Legislative response to 9/11
Air Transportation Safety and System Stabilization Act
49 U.S.C. § 40101
5 ATSSSA
 All tort claims arising from the catastrophe
 - venue in SDNY
 - NY State law applies
 Subject to liability limits
6 ATSSSA
 Limited to available insurance the liability of
 Airlines
 owners and operators of the airports
 manufacturers of the hijacked aircraft
7 ATSSSA
 Title IV created the September 11 Victims Compensation Fund offered to replace tort liability
claims for immediate victims of the catastrophe.

8 ATSSSA
 It is the purpose of this title to provide compensation to any individual (or relatives of a
deceased individual) who was physically injured or killed as a result of the terrorist-related
aircraft crashes of September 11, 2001.
9 ATSSSA - 9/11 Victims Compensation Fund
 An alternative to tort claims
 NY state law applied to opt-outs
 SDNY venue
 Duty owed to ground victims?
 Proof of negligence
 Immunities of governmental actors
10 ATSSSA PL 107-42 - waiver
 (i)--Upon the submission of a claim under this title, the claimant waives the right to file a

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civil action… in any Federal or State court for damages sustained as a result of the terrorist-
related aircraft crashes of September 11, 2001
11 ATSSSA PL 107-42 Eligibility
 (A) an individual who-- (i) was present at the World Trade Center, (New York, New York),
the Pentagon (Arlington, Virginia), or the site of the aircraft crash at Shanksville,
Pennsylvania at the time, or in the immediate aftermath
12 ATSSSA PL 107-42 Eligibility
 (ii) suffered physical harm or death as a result of such an air crash; (B) an individual who
was a member of the flight crew or a passenger on American Airlines flight 11 or 77 or
United Airlines flight 93 or 175
13 ATSSA PL 107-42 (2001)
 The Special Master shall review a claim submitted under subsection (a) and determine-- (A)
whether the claimant is an eligible individual under subsection [c]
14 ATSSA PL 107-42 (2001)
 (2) Negligence.
 --With respect to a claimant, the Special Master shall not consider negligence or any other
theory of liability.
15 (B) the special master shall consider
 (i) the extent of the harm to the claimant, including any economic and noneconomic losses;
and
 (ii) the amount of compensation to which the claimant is entitled based on the harm to the
claimant, the facts of the claim, and the individual circumstances of the claimant.
16 (5) ECONOMIC LOSS.
 …any pecuniary loss resulting from harm (including the loss of earnings or other benefits
related to employment, medical expense loss, replacement services loss, loss due to death,
burial costs, and loss of business or employment opportunities) to the extent recovery for
such loss is allowed under applicable State law.
17 (7) NONECONOMIC LOSSES
 losses for physical and emotional pain, suffering, inconvenience, physical impairment,
mental anguish, disfigurement, loss of enjoyment of life, loss of society and companionship,
loss of consortium (other than loss of domestic service), hedonic damages, injury to
reputation, and all other nonpecuniary losses of any kind or nature.
18 ATSSA PL 107-42 (2001)
 (6) Collateral compensation.
 --The Special Master shall reduce the amount of compensation… by the amount of the
collateral source compensation the claimant has received or is entitled to receive as a result
of the terrorist-related aircraft crashes of September 11, 2001.
19 (4) COLLATERAL SOURCE.
 means all collateral sources, including life insurance, pension funds, death benefit programs,
and payments by Federal, State, or local governments related to the terrorist- related
aircraft crashes of September 11, 2001.
20 ATSSA PL 107-42 (2001)
 5) No punitive damages.--The Special Master may not include amounts for punitive damages
in any compensation paid under a claim under this title.
21 Limitations of air carrier liability
 (a) In General.--Notwithstanding any other provision of law, liability for all claims, whether
for compensatory or punitive damages, arising from the terrorist-related aircraft crashes of
September 11, 2001, against any air carrier shall not be in an amount greater than the limits
of the liability coverage maintained by the air carrier.
22 The aftermath
The WTC disaster responders’ claims
An epidemic of industrial lung disease

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23 Philip Landrigan, MD (2002) Lessons learned


Worker health & safety since 9/11/2001
 The most massive acute environmental disaster that ever has befallen New York City.
 The destruction of the twin towers released thousands of tons of toxic materials into the air
of lower Manhattan—asbestos, particulate matter, lead, soot, PCBs, and dioxins.
 Workers and children were the groups at greatest risk of exposure.
24 WTC Captive Insurance Co.
 Congress appropriated
 $ 1 billion aggregate defense and excess liability insurance to the City of New York and its
contractors.

25 Does ATSSA § 408 (b) apply?
 A federal cause of action “for damages arising out of the hijacking and subsequent crashes'"
 “ all claims 'resulting from or relating to' the crashes are to be brought exclusively in the
United States District Court for the Southern District of New York”
26 Immunities - Disaster relief – FEMA
42 USC 5121 - Stafford Act § 5148
 The Federal Government shall not be liable for any claim based upon the exercise or
performance of or the failure to exercise or perform a discretionary function or duty on the
part of a Federal agency or an employee of the Federal Government

27 NY State Defense Emergency Act
 the state [or] any ..political subdivision...in good faith carrying out...any order... relating to
civil defense, including but not limited to activities pursuant thereto, in preparation for
anticipated attack, during attack, or following attack * * * shall not be liable for any injury or
death to persons or damage to property as the result thereof.
28 NY Labor Law 241
 All contractors and owners and their agents, except owners of one and two-family dwellings
who contract for but do not direct or control the work, when constructing or demolishing
buildings or doing any excavating in connection therewith, shall comply with the following
requirements:
29 NY Labor Law 241
 6. All areas in which construction, excavation or demolition work is being performed shall be
so constructed, shored, equipped, guarded, arranged, operated and conducted as to provide
reasonable and adequate protection and safety to the persons employed therein or lawfully
frequenting such places.
30 Key alleged operative facts
 The City of new York took control of the WTC site and hired over 100 companies to do the
work of rescue, recovery, and debris removal.
 The City and its contractors face respiratory disease cases brought by thousands of
policemen, firemen, and laborers who labored at Ground Zero.
31 Global settlement
aggregation
32 Types of settlement funds
 Bankruptcy
 Johns Manville Products Co., et al.
 Statutory
 Vaccine Injury Program
 September 11 victims compensation
 Judicial
 Class actions: funds in court
 MDL: settlement trusts

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33 Vioxx®
Global settlement after bellwether trials in multi-state judicially managed product liability
litigation against Merck
34 Judicial management
 MDL – Eldon Fallon, E.D. Louisiana
 Mass tort judge – Carol Higbee, Atlantic County, NJ
 Complex Civil Litigation Judge -Carolyn Kuhl, Superior Court – Los Angeles
 “We never thought we would try all the cases, but there was a chance we would try another
500 cases." - Judge Higbee
35 Merck settled in 2007 after 18 bellwether jury trials
 2/3 trials won by Merck (12/18)
 Most defense wins based on individual causation
 4 punitive damages awards
 5 major awards of compensatory damages
 3 awards of consumer fraud damages and attorneys fees
36 Agreement between Merck and plaintiffs lawyers
 Lawyers agree to recommend settlement to 100%of their clients
 If client refuses to join lawyer will terminate representation of client
 85% of claimants must agree
 MDL Steering Committee to oversee fund
 Claim administrator retained
37 Official Vioxx Settlement Program (MDL Plaintiffs Steering Committee)
 $4.85 billion settlement fund
 Eligible claimants allege heart attack, stroke, or death and Vioxx use
 93% of 47,000 eligible claimants enrolled

38 Set-offs, reductions, counsel fees
 Capped at 32%
 8 % to common benefit lawyers
 Costs of litigation
 Medicare and Medicaid liens

39 The Amended Agreement
WTC Debris Removal Litigation
40 WTC Litigation Process Agreement as Amended
 The WTC Captive Insurance Company, Inc. and all of its insureds
 AND
 All Primary Plaintiffs and
 Derivative Plaintiffs
 with Debris Removal Claims against the Insureds or any of them

41 WTC Litigation Process Agreement as Amended
 Hereby agree to the process set forth in this binding and enforceable [Agreement] for
settling Debris Removal Claims against the Insureds or any of them.
 This Agreement shall take effect on the day upon which the last counsel to a Party executes
this Agreement
42 WTC Litigation Process Agreement as Amended
 On the Effective Date, this Agreement will supersede the World Trade Center Litigation
Settlement Process Agreement executed by the Parties on March 11, 2010
43 WTC Litigation Settlement Process Agreement
 I. DEFINITIONS
 II. SETTLEMENT AMOUNT

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 III. SETTLEMENT AMOUNT ADMINISTRATION


 IV. CONTINGENT PAYMENTS
 V. RECIPROCAL RELEASES, PLAINTIFFS’ COVENANTS NOT TO SUE AND
 PLAINTIFFS’ WAIVER OF PUTATIVE “SECOND INJURY” CLAIMS........ 30
44 WTC Litigation Settlement Process Agreement
 VI. OPT-IN THRESHOLD
 VII. ELIGIBILITY FOR PAYMENTS AND ELIGIBILITY TO ENROLL IN THE CANCER
 INSURANCE POLICY
 VIII. ALLOCATION AND PAYMENT TIERS

45 WTC Litigation Settlement Process Agreement
 IX. PRELIMINARY PAYMENTS
 X. FINAL DISTRIBUTIONS TO TIER 4 PLAINTIFFS
46 WTC Litigation Settlement Process Agreement
 XI. THE CLAIMS APPEAL NEUTRAL, THE ALLOCATION NEUTRAL, THE MEDICAL PANEL AND
THE ALLOCATION PROCESS GENERALLY
 XII. MEDICAL PROOF CRITERIA
 XIII. TIER 4 POINT SYSTEM
 XIV. RECONSIDERATION REQUESTS AND APPEALS
47 The injuries
 Proving causal relationship to the tortious conduct
 Special masters assisted in grid development
 Settlement grids – diagnosis and severity
48 Firemen’s lung function
After seven years
49 Tiers
 95% approval threshhold
 90% for Tier 1
 Cancer policy – all entitled
 Staged payments for others
 Point value to be assigned and adjusted


50 Medical proof criteria - XII
 Qualifying injury
 Meet diagnostic criteria
 Impairment criteria
51 Qualifying injuries
 COPD
 Interstitial Lung Disease
 Asthma/RADS (WTC syndrome)
 Laryngitis/Pharyngitis
52 Qualifying injuries
 Chronic Rhinosinusitis
 Upper digestive
 Sleep disorders
 Death
 Cancer
 Cardiac
 Restrictive lung disease
53 Tier 4 Adjustment factors
 Secondary qualifying injuries

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 Pre-existing injuries
 Age (inverse to age)
 Last day of exposure
 Duration of exposure
 Smoking history
 Location of exposure
54 Dispute resolution
 Reconsideration requests to allocation neutral
 Claims appeal neutral
55 XVI -Permanent Disability Fund
 Award of permanent disability by
 - an adjudicatory body
 - comp carrier or company MD
 - Medical Bd of NYFD
 - Medical Board of NYPD

56 How Judge Hellerstein tamed the beast
 2002 -2004 complaints filed: WTC site; WTC area; straddlers
 2003 -remands all but pre 9/29 cases to state court
 2005 2d Cir reverses (McNally)
 2006 Extensive discovery proceeds
 2007 SJ motions on immunity denied
 2008 appoints special masters
 2009 damages only bellwether trials planned


57 How Judge Hellerstein tamed the beast
 2/2010 – selects bellwether cases
 3/2010 rejects settlement as inadequate – demands counsel fees be cut; asserts control
over allocation neutral, etc.
 4/2010 sets fairness hearing
 Defense raises offer, counsel fees “voluntarily” reduced
 6/10 Approves settlement(s)
 Appoints Garretson, Feinberg and Simon
 Disallows interest as costs

58 A quasi class action?
 Inspired by Judge Weinstein – In re Zyprexa Products Liability Lit. 467 F. Supp. 2d 256
(2006)
 Fairness hearings
 Controlling counsel fees and costs
 Public hearings post-settlement
59 FRCP 23 Class Actions
 (a) Prerequisites….
 (1) the class is so numerous that, joinder of all members is impracticable
 (2) there are questions of law or fact common to the class,
 (3) the claims or defenses of the representative parties are typical of the claims or defenses
of the class; and
 (4) the representative parties will fairly and adequately protect the interests of the class.

60 Counsel fees and disbursements
Financing the litigation, cutting counsel fees

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61 Counsel fees allowed


 25% to plaintiffs counsel
 5% common benefit expenses to Napoli Bern
 “Common benefit fees are often awarded in mass-tort cases where one Plaintiffs'
 counsel serves the broader Plaintiff field. See, e.g., In re Vioxx Prod. Liab. Litig., MDL No.
1657,2011 WL 572394 (E.D. La. Jan. 20,2011)
62 Vioxx common benefit expenses - 6.2% of total fee
 Depositions
 hearings, or trials
 Developing litigation strategies and tactics (through moot court presentations or similar
practices)
 drafting briefs
 Court conferences
63 Vioxx common benefit expenses - 6.2% of total fee
 Negotiating settlement
 Managing and organizing the administrative aspects of the case
 Lesser factors
 Document review and archiving
 Correspondence
 Advising clients
64 Net recovery
Liens and offsets
65 WTC - costs of litigation
 Usual and customary expenses
 Tier payments per protocol
 Review and audit relegated to allocation neutral per protocol
 Court approved allocation neutral
 Ct. retained jurisdiction of fee disputes among counsel
66 Workers compensation laws
 All injuries “arising out of and in the course of employment”
 Medical benefits
 Temporary disability
 Scheduled awards for permanent disability
 No pain and suffering awards
 No jury trials
67 Workers comp liens
 New York Cit waived its liens
 Other carriers compromised
68 Medicare Liens
 42 USC 1395y
 Medicare is a secondary payer
 Conditional payments
 Lien
 Allocation of costs
69 Zadroga Bill
James Zadroga 9/11 Health and Compensation Act of 2010
70 World Trade Center Health Program
 Education and outreach
 Uniform data collection
 Clinical centers of excellence
 Evaluation and treatment (100% - secondary to WC and health insurance)
 Follow-up monitoring

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71 World Trade Center Health Program


 “substantially likely to be an aggravating or contributing factor”
 List of health conditions
 - physical
 - psychologial
 Cancer (tbd)
72 September 11th Victim Compensation Fund of 2001