Some 9/11 Court Cases...

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Plaintiffs have not filed claims with the Fund; but they have attended informal meetings with the Special Master to discuss their claims (what are referred to as "test cases"). (The plaintiffs' kin all appear to have been employees of Cantor Fitzgerald, and the firm's counsel was present at these meetings). At her meeting with the Special Master, plaintiff Cheryl Schneider presented an expert report explaining that the lost income to the Schneider family was between $28 million and $52 million. The Special Master indicated that his consultant, Price Waterhouse, had calculated the lost earnings at $14-15 million, but the Special Master added that the issue was "moot" since either number was "far north of anything" he would pay. In a subsequent conversation, he told her that he would not give more than $6 million to anyone.

The other Plaintiffs testify to similar conversations in which the Special Master told them that he did not intend to award compensation on the basis of the lost incomes of high-income earners. It does appear that, contrary to the statement he reportedly made to Mrs. Schneider, the Special Master expressed a willingness to award up to $7 million dollars in later informal conversations.

Some members of Congress advocated a cap on individual compensation award, but Congress did not vote on the proposition; the text references no cap.2 The statute, which "constitutes budget authority in advance of appropriations and represents the obligation of the Federal Government to provide for the payment of amounts for compensation" by the Fund, Act § 406(b), seems to be a blank check. Legislative history is equivocal and unhelpful on whether the payout would be subject to considerations of need or proportionality.3


The Silverstein Parties also assert that there is federal jurisdiction under the Air Transportation Safety and System Stabilization Act of 2001, Pub.L. No. 107-42, § 408(b)(3), 115 Stat. 230, 241 (Sept. 22, 2001), as amended by the Aviation and Transportation Security Act of 2001, Pub.L. No. 107-71, § 201, 115 Stat. 597, 645 (Nov. 19, 2001).6 That Act, originally passed by Congress to limit the liability of air carriers for any claims arising from the September 11th attacks, was later amended to extend its protection to, inter alia, any "person with a property interest in the World Trade Center." Id. at § 408(a)(1). The purpose of the Act is to cap the liability of various entities for damages and contribution claims to the limits of their liability insurance coverage. The Act also creates a federal cause of action for any damages claims arising out of the September 11th attacks. Id. at § 408(b)(1). In addition, the Act grants to the District Court for the Southern District of New York "original and exclusive jurisdiction over all actions brought for any claim (including any claim for loss of property, personal injury, or death) resulting from or relating to the terrorist-related aircraft crashes of September 11, 2001." Id. at § 408(b)(3).

While the other parts of § 408 apply only to liability claims brought against air carriers, World Trade Center property interest holders, and similar entities, the jurisdictional grant of § 408(b)(3) is considerably broader, and its plain language would appear to encompass the instant claims filed by the World Trade Center property interest holders against their insurers — claims that are clearly "related to" the September 11th attacks. The very breadth of this jurisdictional grant, however, raises the question of whether it exceeds the constitutional limitations on Congress's authority to grant jurisdiction to federal courts. See Verlinden B.V. v. Cent. Bank of Nigeria, 461 U.S. 480, 491, 103 S.Ct. 1962, 76 L.Ed.2d 81 (1983) (noting that "Congress may not expand the jurisdiction of the federal courts beyond the bounds established by the Constitution," such as to purely state-law claims). In fact, in the only opinion in this litigation to discuss jurisdiction, the district court, while addressing a different issue, noted that there is "a serious question whether the grant of jurisdiction in the Act applies to this case," and that to avoid the constitutional question presented, it "would be inclined to construe the Act's grant of jurisdiction as not extending to these claims between the insurers and their insureds." SR Int'l Bus. Ins. Co. v. World Trade Ctr. Props. LLC, 2002 WL 1905968, at *2 (S.D.N.Y. Aug.19, 2002) (holding, after analyzing the statute, that the parties' contractual appraisal procedure for determining the amount of loss was not preempted by the Act). The district court ultimately concluded, "[h]owever, [that it] need not decide whether Congress either intended to or could vest this Court with exclusive jurisdiction over an action between the Silverstein Parties and their insurers." Id. at *3.

We recently acknowledged these same constitutional concerns in a case between foreign reinsurers involving a breach of contract claim arising out of the September 11th terrorist attack, in which we observed that to construe the statute "to encompass all claims for economic loss" relating to the September 11th attacks would raise "serious doubts as to its constitutionality." Canada Life Assurance Co. v. Converium Rückversicherung (Deutschland) AG, 335 F.3d 52, 59 (2d Cir.2003). We declined to "delineate the precise contours of Section 408(b)(3)'s jurisdictional grant," finding it clear that the case then before us, as to which there was no claim or defense that would "require adjudication of any issue of law or fact that concern[ed] the events of September 11," fell outside the statute. Id. at 57.

Because, as discussed above, this federal action is supported by diversity and supplemental jurisdiction, we need not and do not decide whether there would also be jurisdiction under the Act and thereby avoid unnecessarily addressing these constitutional concerns. Cf. Edward J. DeBartolo Corp. v. Fla. Gulf Coast Bldg. & Constr. Trades Council, 485 U.S. 568, 575, 108 S.Ct. 1392, 99 L.Ed.2d 645 (1988) ("[W]here an otherwise acceptable construction of a statute would raise serious constitutional problems, the Court will construe the statute to avoid such problems unless such construction is plainly contrary to the intent of Congress."); United States v. Arrous, 320 F.3d 355, 360 (2d Cir.2003) ("[W]e avoid interpreting statutes in a way that may create constitutional problems. . . .").