Parties to the settlement reached among the WTC Captive Insurance
Company (the "WTC Captive"), the
City of New
York, the contractors the City hired, their subcontractors, and
attorneys for over 10,000 plaintiffs alleging injuries from the WTC site
operations addressed Judge
Alvin K. Hellerstein
of the U.S. District Court for the Southern District of
New York today regarding the amended
settlement that was announced
June 10, 2010.
Judge Alvin K. Hellerstein opened the proceedings,
and interjected during the parties' presentations to clarify how the
settlement values claims: "People were compensated [based] on two key
criteria. How serious, objectively speaking, objectively quantifiable,
is the disease, and what is the general relationship between the disease
and their work at the site."
The Judge emphasized
that the settlement process values each individual claim, unlike class
actions, where plaintiffs divide the settlement proceeds equally: "This
is not a class settlement but a series of individual settlements, each
plaintiff having an individual stake."
The settlement will
cost the taxpayer-funded WTC Captive $625 million
in cash at the required 95% plaintiff participation, with an additional
$87.5 million paid if certain conditions
are met, totaling up to $712.5 million.
Plaintiffs' attorneys are voluntarily reducing their fees to 25% and
waiving entirely their fees on certain other aspects of the settlement,
resulting in savings to plaintiffs of over $50
million. Plaintiffs will have 90 days to opt into the
settlement, unless that period is extended.
Plaintiffs were
expected to address the Court in the afternoon session. Suzanne Conroy,
whose husband Daniel worked at the WTC site and died, according to her
claim, from an illness caused by his exposure there, wrote a letter to
the Court praising the settlement.
"...I strongly feel
that this settlement is fair and reasonable," Ms. Conroy wrote.
"Lastly, I would like to state that this settlement is great because
people do not have to prove that their injuries were a direct cause of
their toxic exposure."
Kenneth
R. Feinberg, who was appointed Claims Appeal Neutral over the
Settlement Process Agreement, addressed the Court by video hook-up,
saying he will be fully engaged in his role overseeing appeals by
plaintiffs of their compensation awards. Mr. Feinberg listed several
reasons why the court should approve the settlement, noting it was an
improvement on the 9/11 Victim Compensation Fund by guaranteeing each
person a minimum payment, making payments more quickly, and establishing
a process for valuing each claim objectively.
"The final reason I
would approve the settlement is because, what is the alternative? These
eligible plaintiffs have waited and waited and waited and if they
litigate they will continue to wait," Mr. Feinberg said. "When you
consider the alternative, more litigation, uncertainty of result, I have
no problem urging that the Court approve this settlement and it be
implemented as soon as possible."
Paul
J. Napoli, a senior partner at the law firm Worby, Groner,
Edelman & Napoli, Bern, LLP, which
is representing over 9,000 litigants, addressed the Court regarding the
difficult negotiations that lasted over two years but, he said, resulted
in the "best possible" outcome.
"After seven long years
of hard-fought litigation and negotiations, we have finally achieved a
settlement of historic proportions and significance," Mr. Napoli said.
"These brave men and women, heroes of 9/11, will receive the
compensation to which they are entitled. They will no longer be
subjected to months and years of further discovery and will finally have
closure."
Mr. Napoli described a
range of payments from $3,250 for
plaintiffs filing a legal claim for fear of cancer to over $1 million for asthma severe enough to
permanently disable the claimant.
Nicholas Papain,
managing partner of Sullivan Papain Block McGrath & Cannavo, P.C.,
attorneys for nearly 700 New York City firefighters and 9/11 rescue and
recovery workers, said his firm has fully explained the terms of the
settlement and the procedures that will be utilized to calculate the
settlement sums to be awarded to his clients through several
communications and town hall meetings attended by the majority of his
clients: "Based on the questions and comments from our clients, we
believe they have a sound understanding of the settlement terms and
believe it to be the best and most effective way to resolve their claims
and receive reasonable compensation for their losses."
"A trial, if they get
past the motions to dismiss, will cost more than the money being put
into the settlement," Mr. Papain told the Court. He noted that if 95
percent of the plaintiffs do not opt in, the taxpayer funded WTC Captive
would be required to use that money "not to pay claims but to defeat
those claims."
James
E. Tyrrell, a partner at Patton Boggs, LLP and attorney for the
settling defendants, listed the defenses that would be available to the
defendants if plaintiffs decide not to "opt in" to the settlement
process, making the litigation process costly, lengthy, and uncertain.
He explained how the settlement valued the strength of each plaintiff's
legal case based on their likelihood of success at trial, which, for
some, was unlikely.
"If these cases go to
trial, the defendants can and will assert the defenses available to
them. They too came to the aid of the people of New York and all they have to show is that
they acted with reasonable care under the circumstances," said Mr.
Tyrrell. "Exposure to dust at the WTC site is not enough to prove that
an alleged injury or illness was caused by that exposure. The
plaintiffs will bear the burden of proving that a specific exposure
occurred and caused the alleged injury to a 'reasonable degree of
medical certainty.' Frankly, that means the road to resolution in this
case for those who do not accept this settlement will be long,
difficult, costly, and uncertain. That said, the WTC Captive does not
want to spend its money on continued defense costs, but rather on
compensating these claims."
Mr. Tyrrell said it
could take one to two years, if not longer, for the first of the trials
to begin. Moreover, if the City and contractors prevail in their
argument that state and federal laws make them immune from lawsuits
stemming from the performance of such recovery operations, the claims
may be dismissed and never reach a jury.
Margaret
H. Warner, a partner at McDermott Will & Emery, LLP, who
represents the WTC Captive and was the lead negotiator of the
settlement, explained why claims of certain illnesses, like hard-cell or
skin cancers, were paid less than other illnesses like asthma. Ms.
Warner said that many of the alleged illnesses were medically unlikely
to have been caused by any exposures at the WTC operations sites.
"We believed that based
on the principles of fairness and justice, the most money should go to
those most injured, whose injury is most causally related to 9/11," said
Ms. Warner. "Every effort was made here to find a mechanism to provide
compensation. This settlement avoids the necessity of each plaintiff
proving causation, but we valued claims higher that were more plausibly
related."
Michael
Cardozo, Corporation Counsel of the City
of New York, told the Court the City strongly supports the
settlement because it provides certain and swift payments as opposed to
the uncertainty of litigation. Mr. Cardozo listed the additional
benefits the City already provides and will continue to provide to most
of the plaintiffs, including medical monitoring and health care services
through the three Centers of Excellence, currently serving over 13,000
people, with no out-of-pocket costs.
"It is our hope and
desire that this settlement will help to heal the rift between the
heroes who performed so nobly for their country at Ground Zero and the
City and the companies that provided essential services to the public
when New Yorkers and all Americans most needed them," Mr. Cardozo told
the Court. "All the pensions, benefits and medical care that are being
provided from the City to many of these plaintiffs will continue with or
without the settlement."
In addition, while the
law allows payments from workers' compensation awards to be repaid from
the tort settlement proceeds by enforcing what is called a "lien" on the
settlement money, in this case, the City of
New York and its WTC workers' compensation insurer, which holds
some of those liens, have agreed to waive them. For many of the
plaintiffs, this waiver means their settlement payments will be free and
clear of liens and their workers' compensation benefits will continue
in the future with no deductions. Mr. Cardozo said this would mean an
additional $20 million in value to those
opting in to the settlement.
