September 11 Lawsuits and the Victims’ Compensation Fund

Thousands of legal cases arose after the September 11, 2001, terrorist attacks in New York City, with many accusing airlines and city agencies of faulty and unsafe operations. Ten years later, the lawsuits have been consolidated into four “master cases,” and several have ended in settlements.

People injured or who lost loved ones in the attacks have the option of making a claim through the Victim Compensation Fund, but in so doing, they forfeit their right to sue airlines or other possibly responsible parties in personal-injury or wrongful-death lawsuits. And, following a recent decision by fund administrators, the Victim Compensation Fund currently will not provide compensation for cancer allegedly arising from exposure at Ground Zero.

September 11th Victim Compensation Fund

The September 11th Victim Compensation Fund (VCF) was created by Congress shortly after the attacks and distributed more than $7 billion to people injured or to the families of people killed in the tragic incidents. The fund closed in 2003, but the James Zadroga 9/11 Health and Compensation Act recently set aside $4.3 billion to help people suffering from 9/11-related injuries and illnesses that became apparent after the first fund closed.

Just like the first fund, the second fund requires claimants to sign a contract stating that they will not sue airlines for any damages incurred. Claimants also give up their right to sue anyone in relation to the attacks by making a claim to the VCF.

According to CNN, illnesses eligible for coverage under the Zadroga Act include:

  • Asthma
  • Chronic cough syndrome
  • Depression
  • Digestive disorders
  • Laryngitis
  • Lung disease
  • Post-traumatic stress disorder
  • Sinusitis
  • Sleep apnea
  • Substance abuse

However, the VCF is not providing coverage for cancer possibly resulting from exposure to dangerous substances at Ground Zero. The National Institute for Occupational Safety and Health and the U.S. Centers for Disease Control and Prevention, which administers the fund, said there is insufficient scientific evidence linking cancer to time spent living or working near the wreckage to provide compensation. The Huffington Post reports that a scientific advisory panel will again evaluate whether cancer should be included as a compensable illness in 2012.

September 11th Lawsuits

People who opt-out of the VCF retain the ability to file lawsuits against people, businesses or other entities allegedly responsible for their injuries and losses from the attacks. Reuters reports that more than 12,000 victims, victims’ families, first responders, cleanup workers and business and property owners have filed lawsuits against more than 600 defendants.

Ten years later, several of the lawsuits have been settled. The cases have been consolidated into four “master cases” now handled by U.S. District Court Judge Alvin Hellerstein of the Southern District of New York:

Case 21-MC-97

The first master case comprised lawsuits by people injured in the attacks and the families of victims killed in the attacks with claims against United and American Airlines as well as security operators at the airports where the hijacked airplanes took off. The plaintiffs claimed that the airlines and other defendants used insufficient security procedures, resulting in personal injury and wrongful death.

Over the years, 94 of the 95 cases were settled so only one family’s lawsuit remained set for trial. However, on September 19, 2011, the family settled its lawsuit against United Airlines and its security contractor, ending the last case left in this group.

Case 21-MC-101

The second master case encompasses claims by business and property owners against United and American Airlines for damage to their businesses and properties. The plaintiffs claim that the airlines are responsible for damage caused by the attacks because their lax security measures constituted negligence that essentially permitted the attacks to occur.

Case 21-MC-100

The third master case encompasses lawsuits of 10,563 plaintiffs, including first responders and cleanup workers, against approximately 170 defendants, including the City of New York, the Port Authority of New York and New Jersey and contractors working to clean up Ground Zero. The plaintiffs assert that they developed respiratory diseases and other illnesses due to exposure and transportation of the site’s hazardous substances.

In March 2010, the case came close to settling. However, presiding Judge Hellerstein rejected the deal after criticizing the plaintiffs’ high attorney fee arrangement and maintaining that not enough money from the settlement was being passed onto the sickened workers. Plaintiffs’ attorneys went back to the bargaining table and in August 2010 a new settlement was proposed.

In the new settlement, the plaintiffs’ attorneys agreed to reduce their fee arrangement to 25 percent of the overall recovery (thereby allocating more money to the victims) and obtain a settlement endorsement of 95 percent of the class (as stipulated by Judge Hellerstein). The new settlement was officially approved in November of that same year.

Approximately 10,116 of the total number of plaintiffs agreed to split roughly $637 million dollars-minus attorney fees and expenses. Each plaintiff will collect the dollar amount in proportion to the designated tier level he or she falls under. Reuters reports, however, lawsuits for the remaining several hundred plaintiffs who choose not to opt-in to the settlement agreement are still pending.

Case 21-MC-102

The fourth master case consolidates the claims of first responders and cleanup workers under a New York state law permitting lawsuits against parties other than their employers for work-related injuries and illnesses. Under the law, workers injured in buildings lacking proper safety equipment may sue the building’s owner and manager as well as the contractor that hired the company, if applicable, in addition to making a workers’ compensation claim against their employers.

Settlement negotiations in this case were halted when the second VCF was created, providing coverage for Ground Zero first responders and cleanup workers. Beginning in October 2011, the plaintiffs must choose within 90 days whether to make a claim through the VCF or to opt-out and continue their lawsuits.

It is uncertain how the second compensation fund will impact the lawsuits started in the wake of the September 11th terrorist attacks. As the cases are very complicated and involve numerous parties, however, one White Plains personal injury attorney says it is likely that a majority of the cases will end in private settlements or with the plaintiffs making claims through the VCF.

Abstract: Thousands of legal cases arose after the September 11, 2001, terrorist attacks. Ten years later, the lawsuits have been consolidated into four “master cases,” and several have ended in settlements.

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