“First Round” Loss for Families Challenging 9-11 Compensation
We noted in our last newsletter (See Aviation Update Vol. II No.1) that challenges 9-11 Victim’s Compensation Fund were an “uphill battle.”  As borne out by yesterday’s (8 May 2003) decision from the U.S. District Court for the Southern District of New York (Judge Hellerstein), the incline has thus far proven too steep for plaintiffs.  Yesterday, the court ruled that Special Master Kenneth Feinberg and the Justice Department had acted within their discretion in crafting and administering the regulations and guidelines to administer the Victims Compensation Fund.

The court rejected arguments that Feinberg  had created “caps” for recovery or abused his discretion by considering such factors as perceived need and family resources for higher wage earners.  Judge Hellerstein also held that awards under the Fund need not mirror New York’s wrongful death law; the Fund was not intended to replicate potential jury awards in the tort system.

Although plaintiff’s counsel have not committed to an appeal, it is difficult to imagine that this decision will go unchallenged.  In light of the December 21, 2003 deadline for filing claims with the Special Master, any appeal from this decision will likely proceed on an expedited basis.  It is also reasonable to expect an increase in filings under the Fund now that the regulations and guidelines have survived plaintiffs’ opening challenge.
(Source: NYLJ, May 8, 2003, page 1.)

First “9/11” Default Awards Against Terrorist States
On May 7th, Judge Harold Baer awarded the families of two people killed in the September 11th terrorist attacks $104 million in damages against the State of Iraq.

This decision, in Smith v. The Islamic Emirate of Afghanistan, is the first ruling in the nearly 2,000 cases filed in the Southern District of New York that are seeking to hold foreign states (including Iraq, Iran, Sudan, ministers of the Saudi government, and Saudi banks) responsible for the September 11th terrorist attacks.

Judge Baer ruled that the World Trade Center attack met the definition of “international terrorism” as established by the Antiterrorism Act, 18 U.S.C. §2333, though he noted that an “expansive definition of ‘international terrorism’ might render the [definition of] ‘domestic terrorism’ superfluous.”

He also ruled that plaintiffs “barely” met the necessary evidentiary standard to obtain a default judgment against a foreign state. The Judge reviewed the testimony of plaintiff experts including, Mr. James Woolsey Jr., former director of the CIA, and Dr. Laurie Mylroie, a terrorism expert. Both alleged links between the Iraqi regime and Al Qaeda, and speculated about a meeting between the lead hijacker and Iraqi intelligence, and a Sadam-run hijacking training camp outside of Baghdad. Judge Baer found that while these experts “provided few actual facts of any material support that Iraq provided, their opinions, coupled with their qualifications as experts on this issue, provide a sufficient basis for a reasonable jury to draw inferences which could lead to the conclusion that Iraq provided material support to Al Qaeda.”

Judge Baer ruled that the Flatow Amendment, which revokes the sovereign immunity of foreign officials and government employees in cases of state-sponsored terrorism, also “likely provides a cause of action against a foreign state.” Accordingly, the state of Iraq could be held liable for economic loss, pain and suffering, and emotional injuries.

James Kreindler, of KREINDLER & KREINDLER –counsel in many similar suits, commented: “We’re glad to see a court recognize Iraq’s complicity in the 9/11 attacks and award damages in line with the enormity of the loss. We look forward to presenting a great deal of additional evidence on Iraq’s role when we have the opportunity to try our case along with the case against the Saudi government officials, banks, and charities who raised money for Al Qaeda and supported its terrorist activities.”
(Source: NYLJ, May 8, 2003, page 1.)

Warsaw Exclusivity Upheld in AA 587
Judge John F. Keenan rejected a motion brought by two of the plaintiffs in the In re Air Crash at Belle Harbor action, to remand their lawsuits to state court. The plaintiffs, families of two of the 305 people killed in the AMERICAN AIRLINES plane crash of November 2001 in Belle Harbor, N.Y., had filed their suits in Texas state court and were petitioning to remand the cases back there.

Their cases were transferred to the Southern District of New York by the Judicial Panel on Multidistrict Litigation. The Supreme Court, Judge Keenan noted, has held that the Warsaw Convention pre-empts state common law personal injury claims because ‘recourse to local law’ would disrupt the uniformity of air disaster litigation.

The plaintiffs argued that due to the alleged “willful misconduct” of AMERICAN AIRLINES, INC. and AIRBUS INDUSTRIE INC., their cases were exempt from the Warsaw Convention (and therefore removal from state court) under Article 25. This article states that “a carrier can not invoke the limitations or exclusions on liability in the convention if the damage is caused by willful misconduct.”

Judge Keenan ruled that a “careful reading” of Article 25 shows that the reference to “willful misconduct” refers only to liability, not to pre-emption. “[N]owhere does Article 25 state or even imply that willful misconduct removes a claim entirely from the scope of the Warsaw Convention’s provisions….  [Article 25] should be read only to preclude the carrier from benefiting from the Warsaw Convention’s monetary limits on liability.”
(Source: NYLJ, May 6, 2003, page 1.)

Airlines’ Ability to Foresee 9-11 Attacks at Issue
As reported in the New York Times, more than 60 families of victims of the September 11th terrorist attack filed lawsuits alleging negligence against AMERICAN AIRLINES, INC. and UNITED AIRLINES for the airlines’ failure to anticipate the use of their planes as weapons to strike the World Trade Center and the Pentagon.

Lawyers for the airlines argued for dismissal, asserting that airlines’ liability is limited to passengers and does not extend to those people killed on the ground because the hijackers’ attacks were “acts of war” that could not “reasonably been foreseen.”  Plaintiffs’ counsel presented a thirty-year old newspaper ad that discussed the possibility that planes could strike the towers, and argued that by 2001 the airlines should have been aware of this risk.

Judge Hellerstein said that the central issue in these cases is “whether the actions of the hijackers to use the jet planes to kill as many people as possible were events that exceeded the scope of the airline’s legal duties towards people on the ground.”

Commentary: If successful, a ruling that the 9-11 attacks were not foreseeable would be an enormous victory for the airlines and their insurers. Due to the magnitude of the decision, an appeal is virtually certain regardless of Judge Hellerstein’s decision. A decision favoring the airlines would give rise to an immediate right of appeal. An appeal after a pro-plaintiff ruling could be years away.
(Source: NYT, May 2, 2003)
On a personal note we are pleased to report a favorable decision in federal court on ADA preemption.

On March 14th, Judge John Gleeson dismissed the claim of Edward Roberts against AMERICAN AIRLINES, INC. Mr. Roberts was denied the right to board his ticketed AMERICAN AIRLINES flight from Ft. Lauderdale to New York because he arrived only five minutes before the plane was departing. Roberts claimed that the airline departure board was inaccurate and/or misleading.

Judge Gleeson ruled that Mr. Roberts’ claims were directly related to AMERICAN AIRLINES’ boarding practices, and therefore American’s provision of airline “services”, which fall under the Airline Deregulation Act. He ruled, that under Rule 12(b)(6), of the ADA, Mr. Roberts state claims were pre-empted and accordingly, subject to dismissal.

Judge Gleeson also dismissed Mr. Roberts’ cause of action regarding the infliction of emotional distress. Roberts had not been in any “zone of danger” as required for “negligent infliction.” In addition, American’s alleged conduct was not sufficiently “outrageous” to satisfy the “intentional” infliction standard.